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bus. adm. °CTSs 19 Library Sections-Section 1 In 2 ESTABLISHED 1839 Edition Final Reg. U. S. Pat. Office y yolume 164 New York, N. Y., Number 4536 Inflation " be not only business depression but profound upheaval of there says another also a " - free and approaching peak of inflationary phase concludes there is sure wants a it Of all accurate in Jordan Virgil Dr. revival of free * .< Addressing the Union League Club of Chicago on Oct. 15, Dr. Jordan, President of the Industrial Conference National States crucial that confronts the United asserted that "the and the world is whether the American used. ■ef¬ It people are willing (Continued on page 2120) munication ages, t tional | like- V different must be greater than normal. Sees unsatisfactory interna¬ trade situation and unprecedented consumer spending as of inflating both prices and wages and causing more acute Concludes stock market debacle is due to bewilderment! face of complicated and confused situation. > means shortages. In 1926, under the as the and vening in New York, warns that the peoples' desire for peace as an in¬ Alan H. in Temple prises, >- •; -■.' ■} /" ■'' • but they are not the same thing. A more useful description \of in¬ rising threatens, in contrast with the realistic decisions confronting the Council of Foreign Ministers. Climactic Veto re-examination possible/ Molotov the public's "in¬ Frank ternational Sinatra.''; ■ INDEX index of contents see page 2071 one to before. than (Continued *An address works page on is that 2098) \ / sirens, Hall went to raw ma¬ Prospectus tile products down from 108.3 to on A. Wilfred May 2095) page *Based on talk by Dr. performance and luncheon official receptions with delegates and secretariats to the scene activities. v„,''r? was (Continued out of of their 6^/2 Palyi be¬ fore the Association of Customers Brokers, New York City, Oct. 3, ':v. 1946. (?) weeks .-v.; of 7 . -.7 / (Continued on page 2131) (Text of President Truman'S address on yage 2073) STATE AND & OHIO RR. COMMON STOCK request Y: on Palyi 1946. GULF, MOBILE Havana Litho. Co.* Dr. Melchior were Aerovox Corp.* • one- Nay, the entire price "slipping"; from 103.5 in 1925, the BLS wholesale index fell to about 95 in 1929, with tex¬ here in the late afternoon welcomed the array Water¬ coffee level first citizen, President Truman, sugar—our the of softening. with Maestro Whalen, and Association, Atlantic City, N. J., Oct. 18, City a of boom, in the process 1946—In this former skating rink which; with the by Mr. Temple be¬ Pennsylvania the fore Vacuum Concrete second those years other which The thirds. During terials promote they spend more freely instead of saving the excess. The third is that there are not enough goods two- tin, zinc, cot¬ ton, hides, and is more aid of a $2 Vi million face-lifting treatment, is sound now serving as the universe's "Temple of Peace" thinking about it, is one which ;—the United Nations Assembly today began anemphasise its causes. In inflation other major re-airing of ihe world's problems. three conditions exist. One is that Climaxing a hectic day brimful of typical Amer¬ people have a lot more money ican fanfare—including motor parades with and calculated by or third; sugar, MEADOW PARK, N. Y. Oct. 23, FLUSHING 40 some cents, down The prospect of indecisive .oratory mani¬ to price ideal must be implemented by realistic sacrifices. is itself fests President Truman, sounding keynote at UN General Assembly's con¬ Of that true flation ,,ji; By A. WILFRED MAY same it course flation, For detailed of one thing. ill-fated Stevenson scheme, the price of crude high of $1.26 per pound. When the stock » market broke in September, 1929, the rub¬ ber price had already dived rubber reached the all-time Meeting of the World" Moves to Western Hemisphere thought. Many people think o f rising prices and in¬ flation commodity prices have not yet fallen ] ; com¬ economy j I inflation is probably means so many shortage a Dr. Palyi sees probable cause of stock market break in declining and fluctuating profits. Holds labor's demands mean that volume production, which is now handicapped by short¬ "Town almost come Lays question and inflationary boom because in economic vocabulary useless for the - Board, the that it has be¬ down essentials for Virgil ». ferent cally controlled ' in things to difpeople through United Nations, threat¬ ens a politi¬ economy. words the most loosely and improperly collectivism, America. Asserting symptoms indicate continuation of lihood of extensive disastrous deflation. extension of international economy no * with stock prices, order. no longer I By DR. MELCHIOR PALYI* of word "in- % use job of getting productive organization back to peacetime working Says current situation is characterized by immense credit expansion based largely on government borrowing, and hence there will be no forced or disorderly liquidation as after last war, but sees danger in distorted cost-price relationships. Holds we are Easiness is that loose and improper progress to 1 Says American ■economy, •/ of rising prices and economic conditions resulting therefrom during and following war, points out that we "fumbled" opportunity Jo stabilize conditions by not buckling down flation," reviews may life. American '-1:7V';;' Copy Vice-President, National City Bank of New York Bank official, commenting on President of the Conference Board ■ a What Does the Stock Approaching Peak "-By ALLEN H. TEMPLE* Virgil Jordan Price 60 Cents Thursday, October 24, 1946 Municipal MUNICIPAL BONDS Analysis on request Hirsch & Co. Successors to HraSCH, LIL1ENTHAL A Members York New Chicago Teletype NT 1-210 Cleveland London Geneva (Representative) 1927 INVESTMENT SECURITIES 64 Wall 25 Broad St., New York 4, N. Y. 2-0600 ;Established Stock Exchange and other Exchanges HAnover R. H. Johnson & Co. CO. BOSTON Troy PHILADELPHIA Buffalo ; Syracuse Washington, D. C. Scranton Wilkes-Barre New Haven Woonsocket Dallas OF NEW YORK Pittsburgh Springfield Acme Aluminum CORPORATE Harvester Co. Com. ^Detroit Solar Aircraft Company SECONDARY BROKERS Alloys, Inc. Conv. Preferred FINANCE BOND New York Security Dealers Assn. WILLIAM 52 •7v Bond Dept. Teletype: NY 1-708 90c MARKETS Conv. Preferred *Twin Coach Company ; ST., N. Y. HAnover 2-09M Gearhart Bull, holden & c° MEMBERS NEW YORK STOCK EXCHANGE 14 WALL ST., NEW YORK 5.N.Y. INCORPORATED Members N. Y. Security Dealers Ass'n. New York 5 45 Nassau Street Tel. TELEPHONE-RECTOR 2-6300 Company & REctor Philadelphia 2-3600 Teletype N. V. 1-576 Telephone: Enterprise 5015 - ReynoldsStock &Exchange Co. Members New York 120 Broadway, New Bell York 5, N. Y. REctor 2-8600 Teletype NY 1-635 Telephone: NATIONAL BANK Bell Teletype NY 1-385 New York Bond Montreal OF Toronto Service THE CITY OF NEW YORK New Brokerage England j Public Service Co. Appraisal of Values available upon request for Banks, Brokers and Dealers ira haupt & co. Conv. Preferred *Prospectus on request Department THE CHASE Members Street, New York S Albany Baltimore Bond ■ THE NATIONAL CITY BANK HART SMITH & CO. Hardy & Co. Members New York Stock Exchange Members New York Curb Exchange 30 Broad St. New York 4 TeL DIgby 4-7800 Tele. NY 1-733 Members New York Stock Exchange and 111 other Principal Exchanges Broadway York 6 New REctor 2-3100 10 Post Office Sq. Boston 9 Hancock 3750 Tele. NY 1-2708 Direct Private Wire to Boston '''' : :4: t\ 1 V„V',U "ii'V.'::*, .'i-, "■ r'': • Expreso Aereo Taca Airways* yt 4 ; trol law is defective '• Dealers Assn. of Securities Dealers, Inc. ■ Alarm Fire stuffs, be the forces of ent "Standard Screw supply and demand pro¬ trols. Lamb and beef and chicken which send them, more most the This There ceilings seems a the to Request on that the so share free poor will Stock Exchange Broadway, N. Y. 5 NY Teletype Bell 1-1227 .i Direct wires to what But Cadillacs. on page 2120) " I" ? Rogers Peet Preferred' & Common 3/6s, ; v. j Henry Hazlitt over The "con¬ national economy off the things that "A" Cle.ss 'V Vanderhoef & Robinson Members New Telephone . Bell System at last, not' only Now, York Curb Exchange practically York 5 ■ all COrtlandt 7-4070 "/."V have foodstuffs been decontrolled. Teletype NY 1-1548 meat but But while price before the Sales Executive Club, New York City, Oct. 22, 1946.r , / . :<4 *An address delivered . ^ American Overseas Campbell Common Stock v Airlines 41/41 Members WHitehall 3-1223 Teletype NY New '; 1-1843 120 >. • , Curb Exchange markets but o.r.. BROADWAY, NEW YORK 5 Tel. REctor 2-7815 own and not are Ragnar D. Naess if / sometimes change to no .our will be able maintained or blocks large the School Club, New York City, Oct, - -f; Dominion of Canada Internal Bonds N. Y» -Security Dealers Bell Assn. N. Y. 5 Canadian • ■ five say to Manufacturer Exchanges NEW YORK 6, N Y. Teletype NY 1-672 Telephone BArclay 7-0100 divi¬ improve-substaritially in heavy industry and remain favor¬ able in light industry, in trade expected earnings, and . and l -service' ift New 25 Broad St., York Stock New York 4, N. Y. HAnover 2-4771 Tele. NY 1-2903 Aspinook Corp. Frank C. Masterson & Co. Members'New York Curb Exchange64 about occur mid-sum¬ By on page 2100) 7 "NATIONAL GAS i ; CORPORATION - NEW YORK 8 HAnover 2-9470 - Haytian Corp. - v"; Punta a v:7j: i Alegre Sugar vv r-"- • -jy yi ' Quotations Upon Requett Members New New 120 & York New York CO. Stock York Curb Exch. Exchange Assoc. Member Coffee & Sugar Exchange WALL ST., NEW YORK TEL. HANOVER 2-9612 > Curb and Unlisted Securities } : MICHAEL HEANEY, Mgr. WALTER KANE, Asst. ^ Mgr. 7 Joseph McManus & Co; York Curb Exchange Members New Chicago Stock Exchange 39 Broadway Digby 4-3122 - s New York 6 , Teletype NY 1-1GIO Western Union Leased Line Stocks International Ocean BOVGHT—SOLD—QUOTED Southern & Atlantic Tele. Co. Empire & Bay States Teleg. Co. bought Troster, Currie & Summers 4 Teletype 1-376-377-378 Buffalo—&eve!aaft~l>etr«it--Pittflrargli—8*. Mi - sold quoted J-G-White £s Company INCORPORATED York Security Dealers Association 74 Trinity Place, New York 6, N. Y. Telegraph Co. Pacific & Atlantic Telegraph Co. Common Private Wlret to ' 4: WALL ST. Teletype NY 1-1140 • Finch Telecommunications Telephone HAnover 2-2400 v Commodore Hotel, Inc. & ELECTRIC Member New ' in this favorable outlook to Trading Market Exchange 4 A of Simons, Linbarn & Co. Members industries. ' Banks, Brokers & Dealers . Request : (Va.) Common Stocky ; still unhealthy. The actual levels of prices at wholesale and retail that obtained in July did not disturb Stock on - Members N. Y. Stock Exchange and. Other. Principal, : » favorable- early this year. dends to mer. Currently selling around 2l/z •Prospectus years .economic*-* situation- Phonograph Records Common ten period ahead. ing July that the trend of com¬ modity prices was dangerous and 115 BROADWAY Central States E!e& FAItR this along, yy,Goodbody & Co.. For Recordings, Inc. j August it appeared to us, on the basis of the available data covering developments dur¬ Securities Dept. priced speculation— Keynote some¬ - ings and dividends, over a (Continued A low is it Spring and Summer that common stock prices were relatively high in relation to the outlook for earn¬ began Hanover 2-4850 Teletypes—NY 1-1126 & 1127 37 Wall St., 4 right knew change &TeeTie«xAGompaTU!j Members We Maintain Active Markets in U. S. FUNDS for,: sense difficult to execute a Investment Policy Business Harvard at of Over-the-Counter Stocks and Bonds; , Immediate Reason for Change in We for the accumulation placement- of occur policy than it is to formulate it. We Naess this more looked Department be. adopted^ to- recognize In look. The Is ? foresee to Our \ bottorh in the politicaldevelopments times V V the assumption that on go ftne , ' , .opinions quickly because of economic and political developments that may have of "Special Situations" a important change of policy and if, by chance, this change of policy can be put into effect only after a top has beexi reached in security prices it is of great importance that portfolios be adjusted immediately in line with the changes in the basic out¬ limi¬ -' 16, 1946. J or that require an also we 4* An address delivered by Mr. . top a this condition. If sudden economic and secu¬ rity N. Y. Scranton Spring Brook Water devel¬ should ness s ' Exchange York Stock York - , . stock market, except suddenly occur. bfc pONNELL & Co. New York 5 New Bell either our conclusion York 4, <$>- analy¬ and We H. C. BRUMS & CO. r . change in the outlook for business and eco¬ surprised Bought—Sold—Quoted Telephone: ^ > have to be constantly on the watch for ments in busi¬ sis- we Common stock 20 Pine Street, we respect nomic . Wells Struthers * . business We our Bell System Teletype NY 1-1919 as a -'temporary washstocks to move selectively common regarding fin ture develop¬ for ■ Broadway WHitekall 4-8120 50 New by Tuck,-'and that a rational investment policy places considerable- emphasis on the prices of securities in relation to their basic long-term values, If prices appear either high or low against: values- the proper "policy have we • Expects the security tations A. S. our markets: our Stock Common and divergently. In • commodity prices, but only out" of 12-18 months. recognize Byrndun Corporation Members New York Curb Exchange - enofmous-increase in opments that may cause; a foodstuffs was discontinued and price ceilings retained. This was exactly the way to bring about a shortage. ■ expects in business and that rationing Shortly after V-J Day •/ 31 Nassau Street, New . / op¬ of meats and other Savoy Plaza Com.-J Members New York Stock Exchange ;; the seemed to make common sense. 1956-7- v- Edward A. Purcell & Co. ! , available consumers' 4 goods will result in intensified competition and lower prices.. Antici-4 pates sharp curtailment in capital expenditures. Looks for decline actually is a chaotic situation. By RAGNAR D. NAESS* ~ Naess Mr. V( \- * , proceeded in precisely the posite direction from the one ^ H;'*'■ Savoy Plaza ,, trols come T ) Northern Indiana P.S'i Scranton Elec. The Securities Markets ~ • nearly everybody expected to be decontrolled last. Decontrol has & Preferred Common f South Carolina Elec. Gas very have Electric Ferries V branch offices our Birmingham Electric: * ' ; Oiitlook for Business and have we NY 1-1557 American Gas & Power get hiis can and - window. the St., New York 4, N. Y.- New Orleans, La.-Birmingham, Ala. 4 Many people are saying that price control is already out WOrth 2-4230 , :1 Request on Empire Dist. Elec. be now rapid. Mitchell & Company 120 I.-S*1 •' marked, but held man Lincolns of -(Continued on 25 Broad feeling extremely Members Baltimore Analysis HAnover 2-0700 that decontrol I * Analysis ■ of automobiles is the/.price of manufactured is chaotic. Price still being held are left are they are still held on great bulk articles. go now suppose. to be Bros. off food¬ wherever whiskey (unless it is in new-bar¬ rels); while milk is free of con¬ ceilings have been taken of economy people at pres¬ May, McEwen & Kaiser Stern (s/""i: Members New:York Stock Exchang&.\~ . *- bulk than Preferred •' • • the longed Scale Howe Common & over the will Corp. Grinnell .f„ Steiner,Rouse&Co! fashion, and the Administration has announced a business man is asking himself is how long the war¬ going to be continued. My own belief' is that price rapid decontrol program, the question that every time government controls over the economy are controls Automatic I 7 collapsed in dramatic Now that meat control has HA 2-2773 MY 1-423 prolongs inflation by cutting down production." ahd reducing profit margins and effects of partial controls in raising pricss of uncontrolled items*!r. Concludes universal price control, to be effective, must ultimately lead-to a totalitarian economy, while partial control does not reduce general price level. Urges abolition of all price Controls to deal properly/ with inflation. SECURITIES CORP. Established 1920 BBLXi TBLETYPH • r Bought—Sold—Quoted .7/' 4 points out Members N. Y. Security Ass'n Manufacturing Co.; removal.while retaining price ceiling8 as' "chaotiC.^ Holds new price con¬ because it does not give President power to decontrol at his discretion. 1 Contends price control actually KING & KING gxchange PI., M.Y. 5 './rf opposite direction than might be expected, Mr. Haz- Asserting decontrol has proceeded in precisely the Higginsjiic* 40 "Newsweek"" Associate Editor, IStt characterizes rationing Prospectus '■ 'v Rockwell IIAZLITT* By HENRY Drug Products*. *With v-.-.v ' / ■' Standard G & E Com.' N&t'l Thursday, October 24,'1946 Trading Market* tns : l» •• • FINANCIAL CHRONICLE THE COMMERCIAL & ',l."• ' ' L- 2070 !*' ' i,.1-;,4 < 37 WALL STREET ESTABLISHED 1890 Tel. HAnover 2-9300 Arnhold and S. Bleichroeder NEW YORK 5 Tele. NY 1-1815 INC. 30 Broad St. WHitehall 3-9200 New York Teletype NY 1-51 2071 IN D E X Articles and The Outlook for Red V^'V' T What Does The Stock Market Break Portend Page ~ By DAVID SAPERSTEIN , AND COMPANY Former Director, Trading & —Melchior Palyi „__.-_._^«.____^.w-.-V__-,>.-.„_Cover Inflation Approaching Peak—Allen: H. Temple., -Cover..,Crisis Coining—Virgil Jordan ______Cover j : ; ' "Town Meeting i of the World" Moves to Western May Wilfred Hemisphere—A. Herrings .tyVi News - Exchange Division, Exchange Commission KILROY Former SEC official holds SEC's proposed changes in rules for , —___Cover _ Securities & issue How Long Government Controls?—Henry Hazlitt _____2070 ?#' Outlook for Business and the Securities Markets 7:-. i ;—Hagnar D. Naess __2070 new distribution leave unsettled several questions which he ' alyzes. Concludes, nevertheless, ; ; [ an¬ whole is sound and constructive in 2071 f The Outlook for Red Herrings—David Saperstein_>_ f How Par Can Federal Expenditures Be Trimmed? i M. J The . Boom I The UN's T i —Ta Ming Kung _-_-2074. — - Stanley Rukeyser::207<U for the U.S.?—Merryle What's Ahead h - . —Edson Trade—Wilbert Foreign f Financing v Italy's Future Import Requirements—Antonio ~ Giordano-_2077 } E. Teylor j Contrasts Within Europe—Herbert M. Bratter— Only A Republican Congress Can Check Inflation j —Senator Taft -i The Federal Reserve System and Credit Control )j \t—Ralph A. Young —Albert E. Van Court and Augustus * g for comment, are ; page 2073.) new j - T> , Telephone: WHitehall 4-6551 Specialists in SECURITIES give effect to program as sound and construc¬ a GOLDWATER, FRANK & 0GDEN 39 Broadway, New York, N. Y. The SEC Proposals In substance, :j the' proposals dealing with the red herring pros¬ ? David statement be¬ pectus are A red date and the ef¬ date, without opening the . World Bank Faces Crucial Decisions l\„:—Ernest H. Weinwurm Teletype NY 1-1203 Member of ' \ York Security Dealers New Assn. National Assn. of Security Dealers, Inc. follows: J as herring (Continued on STROMBERG -—...---2082 Slater ESTATE REAL V' . program,! the 'whole is } the filing fective ; HAnover 2-8970 registration a tween Dept. NEW YORK tenta- tive step in the right direction. of information 2080 £ us! to WALL STREET, 09 r the dissemination in° the j o possible . by tive rules drafted to problem t unsettled (Comments received by the' Chronicle" with reference to SEC's proposal appear on \ encourage e s. left are parties t They alt generally written! their obsoletes 1933. ing the broad- Reasons for Stock Market Break i of of ..2080 .... n Securities the .2078 ..2080 .—... ad-- i is sales, offers to sell, or of¬ fers to buy during that period. While several important questions a %| i —Lewis L. Lorwin ..—.... —-—____.-___._._2077 : f Current Trends in International Transactions ? ■ r —Amos e r addressed v;';iKv?4 Trade in minist name bring door to prob¬ ious interested Ward^__-___u.^..—i.r_2077~ Organizations Fostering Foreign f International -. proposals, recently.^ sub¬ mitted..to. var¬ 2075 Gould..— ;?/ .'•/ standards. current The vj$$$£ 4 4<No Grounds for Further Stock Liquidation'?^.?" c lems Act Bowen___r-.___———-—,_2073 'f Law or Anarchy—Albert E. i a s the Highest—Robert T.<Haslam.._2074-■ M Government In Business—George V. McLaughlin_____:-_2075 f Let's Wipe Out Economic Illiteracy—Ody H. Lamborn_«__2075 Why Our Living Standard Is - radically improved instrumentality for; proposals for regulating the use of the red herring ( prospectus have focused widespread attention upon one of ,th e>- agency's 4»— — Truman_.rr--1'22072 for Peace—President Struggle f Chinese Communism—A Menace to World Peace a Obsolete Securities tev^The:. SEC's ._____2072 Here—What's Next?—Lewis Schellbach.;Jl_2072 Sakolski Is developing wider circulation of information under proper _„_207i stock certificate obsolete an that should be pasted up where his , | Regulation "Shenanigans"—Editorial WAS HERE —with program as a s ^...^_^r..__2082 ! Construction Industry Reform of Needed: » 2082 ..2083 ...2083 I —Beardsley Ruml J Scouting the Economic Front—Arthur A. Hood i Comprehensive Social Security—A. J. Altmeyer Pitfalls and Guideposts of Commercial Banking .■*i\, —Edward A. Wayne ; i'Vic-■- | Communications of SEC! and NASD on filfng of financial state- ! ments |: Governors of Execntive Director's instant: activities questioned. Challenge to Free Enterprise—Roger There follows the full text of -—2076 < letter sent out ^ 1835 K « | . N.'W.' Street, Market Imminent—Marcus Nadler Sees Buyers' Switzerland and U. S. Conclude Transactions Eases Securities Canada v Trade Agreement ^ Bank and Insurance Stocks^..^.-..-..-..----------------2088 I York, Reg. U. S. Patent Office ■J '• ; 25 Park Place, New York 8, N. j jT \ ?' .;V Y. Pan-American Union, Dominion Canada, WILLIAM SEIBERT, President v1 Bank .Every Thursday (general news and ad¬ issue) and every Monday (com¬ vertising statistical issue — market quotation uncords, corporation news, bank clearings, plete per $25.00 per year. • Monthly f. We the rate of t/o Edwards & Smith Copyright 1946 by William B. Dana ' Reentered 25, as 1942, Company •• second-class matter Febru¬ m at the post office at New TITLE COMPANY CERTIFICATES Bond & Mtge. Guar. Co. N. Y. Title & Mtge. Co. Newburger, Loeb & Co. exchange, remittances for eign subscriptions and advertisements be made in New York funds. WHitehall 4-6330 Alegre Sugar Lea Fabrics * : U.S. Sugar High Grade Public Utility and Industrial Commodore Hotel ^Fidelity Electric ' PREFERRED STOCKS . V _ Spencer Trask & Co. v Stromberg-Carlson j i Members, New f: Tel.: HAnover- 2-4300 - ' •• Armstrong Rubber Ft. Pitt. Bdge. Wks. Punta Alegre Sugar Exchange' York Stock 25 Broad Street, New York 4 Albar.jr * . 'Boston -' > Members New 135 S. La \ ' York Co. Class A Common Stock Susquehanna Mills for¬ must ;;s:;■>/. . Curb Exchange Salle St., Chicago 3 Tel.: Andover 4690 * > , prospectus on request DUNNE&CO. Members New York Security Dealers Assn. 25 Broad S.t., New York 4, N. • ' Y. WHitehall 3-0272—Teletype NY 1-850 Teletype—NY 1-5 /' Glens Falls ■*i f1 Schenectady- Worcester 'Private Wire to Boston MacFadden Fuller Houses, Inc. Publications, Inc. AH Sport Products Issues Capital Stock '"Public National Bank ... STRAUSS BROS. Members N. Y. Security Broadway NEW YORK 4. DIgby 4-8040 Teletype NY 1-832.. 834 . Bought—Sold—Quoted - > • : HouRsseSBisster Established 1914 • Harrison 2075 Teletype CO 128 York—Chicago—St. Louis City—Los Angeles Kansas . * Board of Trade Bldg. CHICAGO 4 * . Dealers Assn. Direct Wire Service New « Members New York Stock Exchange Bell Teletype NY 1-2033 Punta account of the fluctuations In 32 Prudence. Co. 15 Broad St., N.Y. 5 Haytian Corporation 2119) interested in offerings of Lawyers Mortgage Co. Lawyers Title & Guar. Co. 2-0300 1-84 , (Foreign postage extra.) St., Chi¬ 3, 111. (Telephone: State 0613); 3 Drapers' Gardens, London, E. C., England, ary are Earnings- Record — Monthly, year. (Foreign postage extra.) Note—On Teletype NY in in year, sago -Y on page System t Eastern Sugar Assoc. etc.) 135 S. La Salle you WOrth Broadway Bell file with the Execu¬ of the financial statement filed by (Continued " Other Offices: copy you of Record—Monthly, Quotation and $25.00 per Thursday; October 24, 1946 vtate and city news, a that : S. year; per $29.00 Members New York Security Dealers Awn. $33.00 per year. Other .Publications SEIBERT, Editor & Publisher DANA $26.00 htnioG , WILLIAM D. RIGGS, Business Manager I of Countries, Other statement of, to this letter of the Securities and Exchange Com- response Rates in '' United States, : U, Possessions,' Territories and Members REctor 2-9570 to 9576 HERBERT D. March Subscriptions DANA COMPANY, Publishers WILLIAM B. Actof - Subscription CHRONICLE FINANCIAL tive Office the under Y., a of Sept. 30, 1946. as The Association requests J, 1879, and The COMMERCIAL N. Shops Products £ 170 ———-.2082 Twice Weekly Chicago 3, 1946 Dealers, Inc.: (registered brokers and dealers to file with it (Continued on page. *2132) Published Reilly & Co., inc. The Securities and Exchange Commission has requested financial condition Business Man's Bookshelf a Request Laclede-Christy Clay of Securities National Association ;.. Regular Features * on Thiokol Cor|L ,To; Members of the 2090 .*... /'v.' National Shirt Oct. 2081 —^208X . 2085 2087 Inflation in 1947 Operation of Monetary Fund , ^ TRADING MARKETS Washington 6, D. C. . Association Economists See End of Price • by the / s * London Sees Delay in , ^National Association of Securities Dealers, Inc. to J. Arthur Warner Trying Brokers' a j Dealers, to its membership: ^Investors to .Get Data on. New Issues...,————....2073 Criticlze's Personnel Increase in Government . i —Senator Byrd — ~-r-2075 —— i iExecutive-Director of the National Association of Securities Should Be Easy for J to Pin Market Slump on Them Ohman's Farewell Message to Chicago Stock '• Prospectus New York >♦ Underwriters Take Exception v', '• J. F. ,S tion scored, —^2078 Lawrence • • * disapproved, and right to "Special Statement" under j Rule X-17A-5 doubted. Encroachment by administrative regula¬ > —Joseph Stagg v Preferred Bought—Sold—Quoted ' _ Underwriters Agree With SEC It & i.-il £ by, dealers and brokers analyzed.: 4 Knowledge by NASD SEC letter V-'' Common • W. Babson 2084 National Transportation Policy—Donald D. Conn——..2083 Are Labor-Management Relations Based on Economic Principles—Jerome and Sr Jay Rival Unions Now Seeking to Organize Banks and Broker•.age Houses of Wall Street Community—Edmour Germain 2132 ''Federal Usurpations in Attacking Inflation Dangerous" A V CARLSON Regulation fShenam .'* _,•:•• 74 Trinity Place, New York 6, N. Y, Telephone: BOwling Green 9-7400 Teletypes: NY 1-375 & NY 1-2751 upon Request - C.E. Unterberg & Co. Members / & Trust Co. Analysis 61 N. Y. Security Dealers Ass'n Broadway, New York 6, N. Y. Telephone BOwling Green 9-3565 Teletype NY 1-1666 ■ "v THE COMMERCIAL & FINANCIAL CHRONICLE 2072 Thursday, October 24, 1946 BUSINESS BUZZ How Far Can: ■ Expenditures Be Trimmed ? | •• Air Cargo ' • Art Metal Const Amer. Window Glass* Com. & Pfd. .' Automatic Instrument A victorious war's end always brings hopes Barcalo Mfg. Co.* \ H'; Cinecolor Chicago R. I. & Pac. } Old Pfd. .-w This hope again has been clamors for 4 silent or pectation the that of the of these ment . Mohawk Rubber* | Moxie N.T. New Hav. & Hart i (M 1946-47. determined: A effort must be made to reduce the total v volume : .::: :■ an editorial in the of spending. - must be in terms, of New ■ . Missouri Pac. Old pfd. postwar a timates and the budget realities of A. M. Sakolski ■ Michigan Chemical S :■ of expen- Thus Mastic Asphalt that can the that notice be reduced taxation present scale to remain,—this is (Continued on page 2099) : more determined effort must be made to bring ex- significantly, Purolator Prod.* „ - . Before Tax rates Pfd./ . This effort billions, not York "Times" of Aug. 16 boldly in terms of millions, if a healthy budgetary situation* : is to be states; The main, emphasis "The major factor in the con¬ achieved; tinuing unbalance of the Federal must: be on reduced \ spending / budget, however, is not the pres¬ rather than reduced taxes." But there is much, doubt that ent high tax rates. Record vol¬ ume of expendtures for peace¬ the reduced spending will be sub¬ time, plus-the unwillingness of stantial. So the bulk of the na¬ Congress to hold down new ap¬ tion's taxpayers, particularly busi¬ propriations, plus the willingness ness concerns, are doomed to dis¬ of the Administration to approve appointment. Senator Walt e r of such new appropriations—this George,. Chairman of the Senate is the source of the budget deficit. Tax Committee has already given time. Majestic Radio & Tel. ... budget would be easily possible of less than $25,000,000,000. There is a wide disparity between these es¬ iture in peace¬ Jack & Heintz ; have i estimated ex¬ pectations, than more , course, is re¬ duced govern¬ j Hartford-Empire Co.* Higgins Inc. S' the The basis ets; Gt Amer. Industries 1 in¬ in come estimated at are $40,000,000,000 during the current fiscal- year. Unless these ex¬ penditures can be.pared substan¬ tially, tax relief is- out of }the question. i • ' "Most students of this problem public's pock¬ ^iSS-Expreso Aereo ; | itures govern¬ more Douglas Shoe* ]{ penditures under control. Under the revised budget; recently re¬ leased by the President, expend¬ ex¬ national '! ' r ment's fingers will leave District Theatres! of taxation relief. On all sides, there are either manifested. tax reductions Diebold Inc. ; --M-V A.'m; SAKOLSKI public demands for reduced Federal. expenditures and Federal taxes, land points out substantial reduc¬ tions are out of question in view of fact bulk of government outlays are of a fixed character or are required by military ahd«. adminis¬ trative necessity. Shows economy program following First World War was confined almost entirely to reduction in Army and Navy costs, as other expenditures were largely stationary. Estimates that Federal expenditures in coming years will equal, or exceed present receipts, and doubts whether total outlays can be reduced below $35 or $40 billions annually. •' ■ By Dr. Sakolski calls attention to • a is "Well, K - *The FR Corporation ^District Theatres Tenn. Products ^Princess Vogue Upson Corp.* United Drill & Tool "B" of What's Next? a By LEWIS SCIIELLBACH* Alabama tion LeRoi Company Available U Members Mills^ 52 New York New York 5, N. Y. ^ Teletype NY 1-2425 Sold Bought "The Boom is Here; i Quoted , the wildest expecta-^- income is the EASTERN CORPORATION Derby Gas & Elec. NORTHERN INDIANA PUBLIC SERVICE New England P. S. Com. MARATHON CORPORATION : g the war. Central National I Southwest Natural Gas : Standard Gas Elec. . 22 East 40th Circular upon requeet Corporation ESTABLISHED 192? at new skies clearest. seem nessmen, and something not very pleasant. The second really * Teletype: NY" 1-2948 canned signal is the supply of grains, and frozen fruits and vegetables. With relief ship¬ tapering off as foreign har¬ vests come in, it takes no great imagination to see what will hapben to farm commodity prices ments next spring if another year of the large domestic crops is then in¬ break in stock prices, which dicated. Y dropped 22% in a hurry. Similar The 1921 Deflation declines in 1920, 1929, and 1937 anticipated business depressions. ; If any one thing can be said The first storm signal was wide a to variety of factors the stock to have caused the depression of market 1921, it was the deflation of farm break, it * wiw probably saying commodity prices, with the collat¬ eral slump in farm land values, something of importance to busiresulting mortgage foreclosures, *From an address by Mr. Schell- bach before Tri-State Conference of Credit Oct. - storm terrific of and and Street, New York 16, N. Y. Telephone: LExington 2-7300 tProspectus Upon Request or ,, trade is Profits are rolling in. The second part—what's nextpresents the problems. A few storms signals have gone up, and if experience teaches anything it is that those signals should be examined most carefully when the contributed Spec. Part. •Bulletin Retail peaks. While Pnget S'nd P. & L. Com. above highest point reached during business Cent States Elec., Com. Southeastern Corp. The first part is self-evident. Employment is What's Next?" tions. "National surpassing Security Dealers Association Wall Street Tel. HAnover 2-S080 American Gas & Pow. already exceeds consumption, and that former may drop 24% Index bogging down to 135. Expects in¬ creasing competition with credit troubles. with Federal Reserve Industrial production is at record peacetime rates". ; I Textron Wrnts. & PldL ■. ; .. . ^Stratford Pen FIRST COLONY CORPORATION Aspinook Corp.* i . Economist holds that tip-off on future is provided by renewed union demands, worsening already-created dislocations. Asserts produc¬ Shops *Metal Forming Corp. 3'v*.' 'Prospering Vacnnm Concrete ! ; A *Hungerford Plastics *Loew Drug Co., Inc. f U. S. Air Conditioning ; Collateral, Mr. Pendleton!" > Economist of Standard & Poor's Corp. Taylor-Wharton* f I Wouldn't Exactly Call A Sweepstakes Ticket The Boom Is Here— Richardson Co. I - , . 18, Men, Atlantic City, N. J., 1946. bank failures. Both farm products and farm land have been inflated by World War II to al- (Continued on page 2114) CTIVE MARKETS Ward & Co. EST *Argo Oil Corporation Stand/ Comm. Tobacco 1926 ^Tennessee Products .Nmhrt N. Y. Seturity Dealers Assn. 120 BROADWAY, N. Y. 5 REctor 28700 General Crude Oil *Wellman Electrol, Incorporated Direct Wires To & Los Angeles ENTERPRISE PHONES HartTd 6111 Buff. 6024 Bos. 2109 U. S. Finishing Com & Pfd. Engineering 'Descriptive Circulars on ^Capital Records request Seligman, Lubetkin & Co. Incorporated *Prospectus New York 4 5s 1952 -New Common W. I. request Established 1908 Members,N, HAnover 2-2100 on J.K.Rice,Jr.&Co. Members New York Security Dealers Association 41 Broad Street, OFFICE BLDG. *Hoving Corp. Robert Reis Common N.Y. 1-1286-1287-1288 Chicago, Phila. Standard Thomson Prod. Osgood Co. "B" t. Security REctor 2-4500—120 .. Bell System Dealers Assn. Broadway Teletype N. Y. 1T7H SIEGEL & CO. 89 Broadway, N, Y. 6 DIgby 4-2370 Teletype NY 1-1942 . < VlOM.tivv ••(AJ *. Volume Number 4536- 164 The UN's Struggle . ■' ; President Truman asserts Assembly's coming to'United States symbolizes our abandonment of isolation. Emphasizes our bi-partisan support of UN. war, but warns against complacency people to submit to collective justice. specialized agencies to further both parts of <*>- • to cisco, Charter represent their countries this of eral of the at Assembly the United the people of meeting of the League Assembly; which This time the United States is not the only and. I represen¬ tatives of United the Many.. ';;v-' V >'■^ who are here today were present then. It was the final day Conference San at ; Nations and the at the and > ■,. „ chosen by President Truman at opening of the General Assem¬ bly of the United Nations, Flushing Meadows, L. I., Oct. 23, 1946. Nations a home for the United in American this and welcome the (Continued The country." people delegates the the of cooperation on the Secretariat of 2114) :| page Jos. Stagg Lawrence 1 a conser "far are more -V -.grave . than possible ill effects of inflation '22 ' :yj 'v' "On the ground that inflation must be controlled," Dr. Lawrence stated, "the Federal Government has seized plants owned by pri¬ any itself." . . , the spirit It the of has used Fifth Amend¬ this power to Easy for Investors to Get Data on New Issues current help to return the party to power." \ "The. right of buyers and sellers "inalienable" our "For the on liberties ternate are spurious same reason, for easy investors < that ing to upon offerings facts i> the but doubtful are wider all bear¬ the values of coming new security them obtain in any way have a can of use of many whether 'Mr. for himself the among under¬ by suggesting that the SEC rules governing certain un¬ derwriting procedures should be changed. The underwriting fra¬ ternity generally has felt for time some that drastic some re¬ visions in the laws affecting their business in were order. 5 It will be recalled that Mr. Caf¬ frey gave the underwriting indus¬ try until Nov. 14 to submit opin> ions to him concerning his sugges¬ tion put by him in the form of proposed rule lished in full in which a ; Editor, The nancial our pub¬ was Commercial Comment columns last prospectus into the of the actual issue new best effective of the underwriting is ;and still is inviting comment it* the on subject. -printed such comment ready received. ment should Below as mailed com¬ to a and see a deliberately contrived sciously a and to place a was former director ceiling to pectuses investors hire larcenous in their impact high incomes were justified on the ground that they were nec¬ essary to curb inflation. This un*' just and- uneconomic tax struc¬ make upon the the became ture land in revenue law page prospectus, could one or then readily and (Continued Morgenthau, when on the stand before a Congressional com¬ mittee, admitted that the great Broadway to distorted "This the tax of Foster Nichols Co. dermine in the distribution our the efforts of The entire & telligence, courage I request of Abitibi Pr. & Paper Co., Ltd. those Giant - . Brokers In & Dealers Investment 62 William St. •? • • v" Brown Consol. Pap. the Canadian Bank Stocks Abitibi Pr. & Paper 5s, 1965 : Branch 113 Hudson St., *- 1-2613 Office Jersey Cltyj N. J. IN ,j 4»/2s, 1967 , Brown Company 5s, 1959 Consol. Pap. Co. International '.V 6s, ;; , 6l/2S, 1955 .-.I . International Power Securities * & 1952 7s, ■ Bell 1957 HAnover 2-0980 N. Y. 5 1-395 Teletype NY Toronto Montreal New York Louis Y., New Haven & Hartford Western Pacific N. Y., Ontario & Western Wisconsin Central Sulphur Ptd. & Jonas & Naumburg Southwestern N. Lake Com. Francisco St. Houston Galveston Jefferson Lane Mills Corp. Cotton Standard Fruit & Com. G. A. Saxton & Co., Inc. S/S Pfd.' & T. J; FEIBLEMAN & CO. Members New 70 Pine Street, New investor York 5, N. Y. WHitehall 4-4970 2117) . New Orleans 12, La. Carondelet Bid*. 41 Broad St. Bo. 9-4482 Bell Tel.—NY-1-498 2'i Dravo Corp.* *Air Products, Inc. American Maize Prod. Co. Common Com. & "A"; ^Raytheon Manufacturing Co. $2.40 Conv. Preferred Common ♦Universal Winding Co. Com. Bought — Sold — Quoted , ♦ Request Orleans Stock Exchange New York 4, N. Y. Teletype NY 1-609 . on request Prospectus on request , FREDERIC H. HATCH t CO., INC, Reynolds & Co. ,Members Established 1888 120 , Broadway* New York 4, N. Y. Tel. WHitehaU 4-6430 1944 ■ Seaboard Air Line PETER BARKEN 32 SVfcs, 1961 Hydro-Electric International Power Securities ■ Dulilth, So. Shore & Atlantic 1 Teletype NY . member banks. page 2090) ; Missouri Pacific Securities 4-2422 Aldred Investment Trust for on easily turn to on Paper Co. Sun Life Assurance "Again, for the alleged puroose controlling inflation, the Fed¬ Reserve Board has been Louis-San ♦Prospectus *Memorandum : Noranda Mines eral quirements of (Continued Company Corp., Ltd. of Can. Minnesota & Ontario Preferred New Yo» k 5, N. Y. Telephone WHitehaU . largely resoonsible in the past. Yellowknife ' progress St. American Beverage MAHER& HULSEBOSCH I ^SECURITIESy which have Denver & Rio Grande West. Baker Raulang ... ments in our economy so IN CANADIAN and energy to Rutland Railroad Statistical data upon MADE reading investor, ^American Insulator Preferred . with Sheets Co. AMERICAN who have in¬ men Old Colony Railroad Common Mining Issues Mr. Nichols connected was MARKETS ultimately un¬ economy. It gravely progress. of past Elmer A. citizens in every community who constitute: the spark plugs of our secu¬ name will load discourages been in the engage rities business under the firm buying power constituting a threat to prices was received by taxpayers in brackets below the $5,000 annual level. Chi., Milw., St. Paul & Pac. Albert Pic'$ Philippine < increased of bulk Chi., Rock Island & Pacific two of the on page Fund. Preferreds & Commons small, would read a syn-. however. If the synopsis on of the the Sturc, of spite of the fact that Mr. "OLD" or opsis the of Ernest ols has opened offices at 30 South 52 WILLIAM ST., however, does practice a and As¬ of YONKERS, N. Y.—Foster Nich¬ were TRADING MARKETS study the various pros: as they come out. The individual investor, large < Counsel HART SMITH & CO. ting stitutional Re¬ Foster Nichols Forms Co. earnings on and redistribute income. Taxes that a as wider of the synopsis method of staffs con¬ monstrous encroachment Fund; Funds structure, the net effect of which given vast powers whose exercise no perceptible relation to the Continuing, Dr. Lawrence re-: purpose for which they have been granted. These authorities have marked that the government has the right to change reserve re¬ get¬ the desired information to the investor, though I would not substitute the synopsis for the prospectus. I know that I myself hesitate to read a lengthy mem¬ orandum which can run up to 50 pages or so. The insurance com¬ panies, banks, and other large inf use were it has al¬ Additional be are of investor industry whole. I would like to not 'self a the these prospectuses. Every has of to week, and to assist in the general "Chronicle" a far ahead date possible as interest the hands as General Bank, has the arch of human freedom." Anything that * helps to put prospective investor mar¬ of Staff; Ansel Lucford, ket which is the very keystone in 1 No. open way; ex-director of the World every Chronicle, 25 Park Place, 8, N. Y. ; f; oersonal choice in the discussion the Fi¬ and merchant, every producer, every worker, every consumer that right of unhindered deny New York the Caffrey has made friends writers to the "red-herring" prospectus, exactly as suggested by Mr. Caffrey, would achieve this end or, for that matter, whether it would be legal. supply and demand. In order to keep prices from rising, it was necessary—so ran the argument— of Organiza¬ Monetary Gardner sistant , Underwriters agree with James J. Caffrey, new Chairman of the Securities and Exchange Commission, that it should be made and to Walter develop new;* processes, to find doubtful, however, whether the wider use traditionally exercised in a free new ways to make better mouse of "red-herring" prospectuses exactly as market to determine the fair price suggested by James J.V traps, are precisely the men who of more than 3,000,000 articles," Caffrey, new Chairman of the Securities and Exchange Commission, are most heavily penalized by a he said, "was delegated to a gov* would achieve this end or, for that tax structure allegedlv designed matter, whether it would be | ernment bureau on the specious to control inflation. No kind o* legal. Nevertheless, underwriters are generally pleased with factM and dangerous ground that the discrimination by the State could Mr. Caffrey recognizes some drastic revisions in laws and rules i people had given it—the bureau— be better calculated to shackle affecting their business are in order* * f a mandate to control the law of and destroy those dynamic ele¬ - Commission getting under International search lesser evil. a i.e., inflation control, the Federal Treasury throughout the war peri¬ od agitated .for an i income tax vate, citizens in clear violation of and in fact did Many underwriters r promote the interests of groups which in turn were expected to Underwriters Agree With SEC It Should Be v e auences ment. ; the by d Government, our measure making tions e f o surpa- power ,F country for We will extend be- cause , of people in pretext, are headquarters. the fullest Address ra¬ that under its first that the Gov¬ you States has tions its Fran- in * of deeply proud and grateful that the United Na¬ of you the assure United tions. of can ernment President Truman Na¬ in order to abate Administ member; it is host to the a United Nations. with the asserted occa¬ .met nounced fight¬ inflation the last I upon and empty Cincinnati of de¬ ing was Club York, tion League tion currently New<8> of Co. significance. After the first World the . George Luthringer, American al¬ the -Commercial this meeting has a special historic seat .spoke before Preparatory the International Trade Stagg.Lawrence, Vice-President of the Empire Trust policies of the our on address an country my join sion In Oct. 19, Joseph of foundation great pleasure I recall with . signed. was the prices in the consideration of investments. War the United States refused to V; ■ Nations On that day United constitutional For Gen¬ Nations. the Arrive in London individuals have just arrived here as observers of - the meetings of impact the United Nations was laid. meeting the when Conference Observers LONDON, ENGLAND, Oct. 22 (by special C3ble)~—1The following grave in its On behalf of the Government and the people of the United States a warm welcome to the delegates who have come here from the-world 2073 than effects of inflation itself. Calls tax system larcenous on high incomes and attacks one-sided labor policy. In Virginia Beach address, he counsels attention be given to labor factors and government controls which raise costs and depress < , I extend all X :v. Joseph Stagg Lawrence, Vice-President of Empire Trust Co., New York, holds Federal usurpations in attacking inflation are more economic and social reconstruction. J; *> Dr. ; Scouts fear of and cites necessity of getting Stresses importance of UN's -2' .,^Av. Usurpations in Attacking Inflation Dangerous" : President oi the United States .* \ ; 2) -i/vj "Federal for Peace By HON, HARRY S. TRUMAN* , fAvVi/'i' (•'! THE COMMERCIAL & FINANCIAL CHRONICLE Tele. NY 1-2500 MEMBERS 83 Wall N. Y. SECURITY DEALERS ASSOCIATION Street, New York 5, N. Y, _ * BeU Teletype NY 1-897 New York Broadway, New Telephone: Stock Exchange York S, N. Y. REctor 2-8600 Bell Teletype NY 1-635 : THE COMMERCIAL & FINANCIAL CHRONICLE 2074 ■ BALTIMORE TA kung Weight Political Preferred STEIN BROS. & BOYCE Members New York & Baltimore Stock' Exchanges and other leading exchanges CALVERT ST., BALTIMORE 2 S. 6 \ , • Bell Teletype BA <393 New York Telephone REctor 2-3327 confusion Great situation China. in problem fac¬ our superior "material well-being and high living standard. Stresses productivity as means of bringing greater stabilization of wages and prices and balanced income relationships among all producing groups. ing i j ! Political economist, pointing to great American confusion over current Chinese situation, states Communism is permanently uik dermining his country's democracy and liberal economy. Asserts there is an unbridgable gap between Kuomintang and Communists. Warns if true situation is not faced, the present disturbance may constitute primary cause of new World War. ;f Noxzema Chemical By MERRYLE STANLEY RUKEYSER* New York ;• Ming; - • - ' inefficient the man on corrupt. This belief is accom¬ panied by a similar widespread contention that the Chinese Com¬ the formation of Government is both t and The Parker Company, tube a has time peace industries for stantial to Outlook operation. indicates served in sorhe way con¬ ocratic and united earning power. prospective In ad¬ contrary fac¬ tors, there is the hope for a dem¬ sub¬ China, the first step toward which, in the mind of At current Is available mately and per basic in 50% at less position, LOUISVILLE of indicated than net share. book value American ' Willett H. upon-.request Girdler 8% Corporation Murphy Chair Winn & Homsey Co. up¬ the outlook fundamental - policy of th6 Chinese Com¬ from their. temporary real that (4) the be¬ peace, distinct as ■C (Continued ' 2092) page on \ ' r>/' ' y :: ■'::1 ■' "• : Stocks „ * Memos on Request Members ' F. L. PUTNAM & CO., INC. Members 77 Franklin Boston Portland Stock Liberty Exchange 2340 Providence Springfield New York, Philadelphia Los Angeles. Stock Also New Street, Boston 10, Mass. Tel. Curb York 1420 Walnut Exchanges Member ; Members St. Louis Stock SALT LAKE CITY : V* >*V- *... ' • ' •*: ' ij V..V. " *r \f* 4 ;;4. for ! Printing Co. Produces of Forms * > UTAH Labor-Saving of all Kinds i MINING STOCKS MOINES Phone 4-7159 BUILDING 9, IOWA Members Salt Lake Stock Exchange Byllesby & Company BROKERS OFFICE Stock Exchange Bldg. Telephone Bell Tele. DM 184 * Phila. 2 % Stock Exchange Building 7:; Salt Lake City, Utah Teletype SU 67 Teletype RIttenhouse 6-3717 '* American Southern i. ■ Optical Co. For Immediate Execution Colorado i •'of . Common Exchange Pac. from Std. 10:45 Time: on to Floor 11:30 Sp-82 at other hours. Stocks standard securities & Dolphyn f Members Detroit Stock Exchange Buhl Bldg., Detroit 26 Cadillac 5752 Tele. DE 507 to was corporation BOENNING & CO. Philadelphia 3 PEnnypacker 5-8200 - Private Phone to ~ I PH 30 N. Y. C. < Members Standard Stock Exchange of 1606 Walnut St., , . T ; $|j (N.J). Haslam ascribed this f. , - go a * Brokers . - Peyton Dealers - Underwriters Building, Spokane Branches at Kellogg, Idaho and Yakima, Wn. „ Some of the countries I visited were el. • in ence ■■ of traveled serve Robert T. Haslam or whom we had' been partly cut off, ;:to ob¬ the plants of our how badly the own : . . great ^ country living course, ' .. of mass : standards in Europe have been affected by the war. But I recalled, upon visiting these organi¬ wholly our, living for Of con- from the great differ-; by between the people. wfth of before and other nations in the standard business, our with worldwide in¬ of doing business, and modes of living. But on these recent trips I was struck more forcibly than ever of employee of an Amer¬ ways Amer- renew an terests, I am accustomed to wide diversities in laws, viewpoints,; South I familiar from previous trav¬ As ican company con- both f ; and the Government permitted abroad, I began a period of traveling have countries again, in normal times most of them great that even the standards of are separated by a gulf from what we in the United States take almost for foreign affiliates had been dam-; aged, to learn at first-hand con-; granted. As for, the Latin Amer-though they too aitions in the different countries, ican countries, to see what could be done to v/ere affected by the world con¬ v make petroleum fuels available to them, and to; study post-war trends affect¬ peoples who badly need ing markets. Spokane * COrtlandt 7-1202 > over coun¬ I zation of Qrdera Quotes call TWX Sp-43 A.M., Power Co. request j SECURITIES ■ Mercier, McDowell war to me tacts NORTHWEST MINING or Sheller on the alnd in on MARKETS Bausch & Lomb Manufacturing Corp. Report furnished resources. businessmen members request Now people ask, "Who was (Continued on page 2107) ^ year. Europe to on windbags out of the Cabinet this enterprise and not to superabunCites foreign cases where regimenta- number of ci¬ ties Phone B-6172 SPOKANE, WASH. TRADING Prospectus furnished as which, in the past ten month s, has ica.,o--v//:'^,':' PH 73 DETROIT Electromaster, Inc. but let's not overlook his good work—he* did drive two of those By ROBERT T: HA SLAM* v soon visited 1898 W. H. CHILD, INC Request PHILADELPHIA been critical of Harry Truman in last few weeks, and rightly Vice-President, Standard Oil Company sider able H. M. DES As tries. Established on very eliminate other human liberties. fifteen Capitalization: 90,390 shares common Bulletin EQUITABLE I taken Sole Municipal understanding | or for for accurate statement. We have nvested interests hamper competitive system is inequit- able, wasteful, and "without rules." / Lauds competition as putting / : a premium on efficiency which leads to low prices and high wages, ' and concludes to prohibit competitive business would restrict or.^f ;'Jf MARKETS BROKERS and DEALERS 1901/ We have been listening for too long to intelluctual windbags without the ca¬ J tion, government controls, / cartels and Exchange * System between {Established affluence. our freedom of competition and to io v - General Manifold & We invite offerings danger, that we are grave of the factors which cre¬ ated ;economic progress, and denies our TRADING INCORPORATED a unaware Oct. 18, 1946. U dance of natural ' Philadelphia, New York and Los Angeles WHEELOCK & CUMMINS the There is so, Street, Philadelphia 2 Wire living standards far international average. American above the of. Exchange ma¬ terial wellbeing and which lifted Mr. Rukeyser delivered another address along the same lines before the;1 Westminster Men's Forum at Steubenville, O., 30, 1946, superior made for American stitute, French Lick, Indiana, Sept. (, New York Los Angeles Pittsburgh, Pa. Hagerstown, Md. N. Y. Telephone—WHitehall 3-7253 Private DES MOINES Rukeyser Equipment In¬ Farm the 'of aware Foinfing to U. S. higher living* standards, Mr. St. Louts l.Mo, and : Iowa the STREET' OLIVE 509 v BUCKLEY BROTHERS Securities has be today is to factors which United States the pacity Industrials—Utilities Inactive the ;::From address by Mr. ' Insurance in circulated was L -V. v.;.. INVESTMENT SECURITIES South Carolina Electric & Gas and , been shown to be unworkable and before with Why Our Standard :: Of Living Is Highest • Secondary Distributions Bank 1 i. that nonsense on STIX & Co Gruen Watch Company ■ see ■ ST. LOUIS England Coverage • wishes to China such. war as ■ •• Merryle S. Rukeyser sensible housewife the of comes • greatest problem facing us •vThe in heaval, but on the practical observations Chinese Com¬ the by in one civil Standard Stoker Company <• opportunity \ which change is indeed a challenge. temporary military truce, a desired is PHILADELPHIA England Markets Such any be? r change may not .be .as benefical as we would like to see it but the change, is not academic differentiate and 2,600,000 civilians still on the payroll to offset the con¬ of the political change which is now under way. ' The in Government; (2) inability, or un¬ Bell Tele. LS 186 Long Distance 238-9 minds. in the air are a sequences ter s' willingness/to from Grocery Floor, Kentucky Homo Life Bldg. LOUISVILLE 2, KENTUCKY 1st Teletype BS 424 Telephone CAnal 6-8100 New . way take Federal that change is vo ferment the States today,' I think under - which great deal of skill Nov. 5th next in manipulating on in,.: the .- United on no 9, MASS. ment . find ourselves. So I say change will it fer¬ based lief Company Lovett HH BANKERS BOND £°! STREET HANcock 8200 Retail Chinese National the; the and democratic basis, and Incorporated BOSTON New between Communists munists asaTarty ihei^ly because 31 MILK N. Y. ferences political is r and non- the impasse in created we say there shops of the nation, and on the observations of working men in lieving that it is possible to estabr lish a coalition government by the plants and by plain citizens every¬ Much of the magnificent two parties on an enduring and where. Turf; Ass'n Consider du Pont, and might ideological-dif¬ thei the recognize tactics; (3) the error consequent upon the above two factors in be¬ American Air Filter r? k\ PRICED ABOUT to and working capital available Circular Americans suffer from' the consequences of certain fallacies which they seem to hold inadver¬ tently. These misconceptions may be described briefly as (1 ^failure many munists approxi¬ at perfectly understandable if only .realize that, so far as the Chinese situation is concerned, tween one- despite tremendous improve- ; 1940, ment approximately than original offering price third less In quotations, common stock at has that dition to these iwo nor¬ of this confusion The existence m the future — think, in passing, that I are *• Way.f 1 we Communists hydraulics, reconverted successfuly mal of political is nected with Soviet Russia. valves and fittings transmission the munists, Then, there is the fear lurking in the background that the Chinese leading manufacturer of couplings, the *. > economics asserts greatest of factors which make for The things that. I .want to discuss with you today about United States are approached in a non-partisan of nents, ability in administration and are good Chinese patriots in general. Appliance Company for contrary to their oppo¬ have shown considerable ernment. the street, seems to be a coalition gov? on aware and urges busipublic ferment and dissatisfaction by expressing economic truths simply and forci¬ bly. Sees reaction to saner Administration policies ahead. pression that the present Chinese® BOSTON is keeping us Administrators of getting their economics "by ear," nessmen and others to take advantage of existing ' reigns in American minds with respect to the In the first place,. there is a widespread im¬ . commentator Ascribes stock market break to restricted short-selling and absence of margin trading, thereby making a thin market. Accuses Federal v . ^ Thursday, October 24, 1946 What's Ahead for the U.S.? j Economist s ' ' ' To World Peace Davis Coal & Coke Sash V Chinese Communism—A Menace Bayway Terminal National ' ' ' ... - ... flict, they did not experience the dislocations which occurred in the United men so : > * large wealth by Mr. Haslam be¬ fore the r Advertising : Club of Washington.-*D.-C.-.'October 8,1946. An address where States were millions of under arms and where a and proportion energy of our chan¬ were neled into the making of weapons. fY*nntimiPri nn naffp 21 Volume 164 THE COMMERCIAL & Number 4536 FINANCIAL CHRONICLE Government In Business Geo. V. McLaughlin Let's Wipe Out Economic Illiteracy strongly that dt is not enough for the scholars to acquire knowledge. They must teach the people. For until the . in man the street BRITISH SECURITIES un¬ derstands, the information labor¬ iously obtained cannot be,fully utilized^^ learned the by i -1 need not remind United that the you Kingdom 4$, 1960-90 peace, comfort, and well-being of the people of the United? States have had their origin., in a healthy economy:; The? genesis :of.airxevo-t (Continued on page 2096) Goodbody & Co. Members N, Y Stock Exchange and Other Principal Exchanges NEW YORK 6, N. Y. 115 BROADWAY Teletype NY 1-672 Telephone BArclay 7-0100 Bought—Sold—Quoted Sullivan-Waldron Products CQMMON STOCK Leading Company Banks and Trust ;yy y,y Manufacturers of the Nationally Known i "WHIPSTER" (RICHMOND CEDAR WORKS) of New York) - 58th -CONSECUTIVE PROSPECTUS ON QUARTERLY COMPARISON REQUEST Available H. D. Knox & Co., Inc. 11 Broadway, N. T. 4 27 State St., Boston 9 Tel. DIgby 4-1388 Tel. Capitol 8950 Tele. NT 1-66 Tele. BS169 ' Established 192$ F. H. KOLLER & Members N. Y. Ill CO., Inc. Security Dealers Ass'n , request New York Hanseatic Corporation 120 Telephone , on . BROADWAY, NEW YORK 6,. N. X. BArclay 7-<057O Companies NY 1-1026 BROADWAY, NEW YORK 5, N. Y. BArclay 7-5660 Teletype: NY 1-583 UHMfcKMWWfcMUA**"*^ jmm "■■' - r f • 2076 ,THE COMMERCIAL & FINANCIAL CHRONICLE Eventually, those who do not ac¬ cept the exchange offer would (if the plan consummated) have by cash pay¬ at $150 and $137, respec¬ their is stock ments Thursday, October 24, 1946? "No Grounds For Further retired Electric American Power & .« I"#'1 Light American Power & Light, one of the more volatile holding com¬ stocks, advanced from 2% last year to this year's high of 221/2, then dropped in the recent market break to lOVs and is now around 13. Earnings for the 12 months ended Aug. 31 were $5.25 a share compared with $1.37 last year but, of course, this does not take into account the large arrears on the preferred stocks. Several lengthy studies on the company have been®* issued by Wall Street houses this retirement program is somewhat with estimates of potential future break-up value ranging year 10 mate 60—the to being These average perhaps - estimates were, esti¬ around 40. of course, based largely on the application of assumed price-earnings ratios to the subsidiary .earnings. Due to the high leverage resulting from the large issues of preferred stocks' and their heavy arrears, application of price-earnings ra¬ tios varying from 10 to 16 might produce liquidating values rang¬ ing roughly from 10 to 60. . ... Earlier 16 in that sumed the it was as¬ year of ratios from 13 to could be applied to AP's sub¬ sidiaries. ' But the disappointing market reception accorded a num¬ ber of the new utility stock offer¬ ings such as Columbus & South¬ Ohio Electric, Cincinnati Gas & Electric, etc., combined with the market, have made it seem nec¬ essary to shorten the market yardstick applied to the AP com¬ panies, as well as to other holding company subsidiaries of similar ern ' caliber. 1 - the meantime, the company Sept. 4'filed its detailed plan In involved. If and when the SEC and the-Federal court approve the plan, American Power will offer for sale at competitive bidding 15% of its holdings of common of Florida Power stock Light, Gas & Electric, Minnesota & Light, Montana Power Kansas Power Texas and is there & Utilities. However, After the sales are effected the prices received by the company plus 5% of such prices (as an al¬ pre¬ spread between the successful bid price and the later public offer¬ ing price) will furnish the yard¬ stick for the exchange offer. However, the plan remains quite flexible and if the remaining common stocks (about 85% for ferred stocks, exchange or preferred is callable accumulations dividend has (it $43.57 rate this should is 115 at paying the so that year remain fixed at of Under the fig¬ $150, as compared with $158.57 re¬ demption price plus arrears. Sim¬ ilarly, the $5 preferred is evalu¬ ated at $137 compared with re¬ demption price and arrears of $146.31. In other words, the com¬ pany is willing to pay par plus arrears plus about 42% of the re¬ demption premium in the case of the the "package" $6 stock. In the case of the $5 pay only about 70£ the $10 redemption pre¬ conditions the two values to are are earnings outlook for American corporations and for level of prices. the stock process from far of New City, York that has Edson Marshall will join the Bank as a Vice-President on Nov. 1. Fred¬ Sheffield, member of the a B. Gould an¬ Clark Lawrence built up long a period of time. Goodhue, President of the Bank of the Manhattan Com¬ nounced great pres¬ sures Appoints Two F. Abbott result natural over The substan¬ tial readjust¬ ment of stock prices, the increase in money rates and the begin¬ nings of the decline in agricul¬ tural prices are parts of -; the process. More adjustments lie ahead, but the current level of stock prices appears to discount to - considerable extent the uncer¬ a The probability is that we have research staff of Smith,; Barney & Co., but the views and opinions expressed by him are not neces¬ sarily those of the firm. allocated rateably to each exchange unit — a unit being roughly equal to the claim of $6 or $5 preferred stock. Any small adjustment will be made in cash the lows for this year, and that successive the an of form ICC able rate tax good news in favorable election, a decision favor¬ legislation (all dis¬ and labor and after the turn of the year possibilities) may carryprices upward well into the first quarter of 1947. stock We next almost will certainly have disturbances labor more early when contracts expire, but it by no means follows that major labor difficulties will en¬ sue or that production will be interrupted to the degree that it was this year. It is pertinent to year recall that ficulties in it not was that broke labor dif¬ the £ market Stock prices held September. up during the second quarter labor disturbances. Rather was it policies governmental and / con¬ trols. Fluctuating Profit Margins summer costs the ended war 1945 it was of that the rapid elimination with in soon the ap¬ decline in of waste¬ ful wartime practices arid- release of inefficient help greatly im¬ prove t^e orofit outlook and the (Continued on page 2117) being and accrued Underwriters Take // Frederick L. C. Marshall dividend current law effective has been elected b,y American Power in its discretion after preferred stock the 65% of the total (as measured by dollar amount of claims) has deposited (deposits need not Sheffield ^ would also be adjusted in cash. The exchange offer may be made made until notice of firm of Webster Garside, & member of the a / Board of Directors of the Bank. Marshall, who resides in Madison, New Jersey, is a gradu¬ ate of East Orange High School and attended Dartmouth College. the ex¬ 1925 From he 1928 to was Midland Realization Northern Indiana Pub. Ser. Com. Gilbert J. Postley & Co. NEW YORK 6. N. Y. to Chicago New the Investment of the United States Trust Company. In 1943 he was elected an Assistant Vice-Presi¬ he 1934 joined Department placed in charge of its Department. Mr. Mar¬ shall is a Trustee, Treasurer and Chairman of the Finance Com¬ mittee of the American University dent and Banking of is Vice- and Lebanon Beirut, Chairman of the New York Uni- Cam¬ Hospital versity-Bellevue paign. is Sheffield Mr. the a of member Association of the Bar of the City of New York and the Ameri¬ can Bar Association. He is a Di^ Birmingham Electric Common rector Trustee Carolina Power & Light Common Southwestern Public Serv. Common South Carolina Electric & Gas Common (When Distributed) Trying to Pin Market Slump A. of of the O. Schwarz, Trudeau a Sanitor- the Board of School of of Managers St. .. • dealing with the investing public.: Asked for comment by — Coles in Rochester ROCHESTER, Paine, Webber, Jackson & Curtis F.ST ABLISHED W. ties N. Y. — York business from 1879 Clarissa Street. offices securi¬ at 446 • > - ; the "Chronicle," many underwriters ex¬ Security Dealers Associa¬ when he Under the present Securities | firm with a registration may placed responsibility for the cur¬ broker-dealer rent decline ir) -stock market elect to act as an underwriter, re¬ prices upon the underwriting fra¬ gardless of his qualifications or > moral responsibility to the poten¬ ternity. ' Last week,the "Chronicle" tial buyer of the security that he printed a resume of Mr. Warner's may offer, insofar as that security allegations. It was not the first is priced to the public. Express¬ report of Mr. Warner's speech but ing it as his opinion that the mat¬ it was printed in our columns so ter of underwriting and pricing that all would know what Mr. of a security resolves itself in Warner's views were on the sub- many cases into a form of con¬ ject.It will be recalled that he spiracy between the underwriter" jgave it as his opinion that the and the corporation, Mr. Warner primary cause of the decline in pointed out that the corporation, security values over the last few its cupidity aroused by the ex¬ months was the "plethora" of new istence of an extremely favorable;security offerings, many of which, capital market has, in many cases, he intimated, should never have formed or expanded for the sole been placed on the market. : purpose of securing other people's He made the charge, too, as ft money for the benefit of the of¬ tion was two weeks ago- pointed out in the story last week, that "underwriting and pricing a security resolves itself in many cases ment money was in the hands of public and that it would be benefit of the Acts, ficers said, he and poration to any promoters of the cor¬ the exclusion of the public interest, except that if the business happens to prosper, the stockholders cidental "As will become the in¬ beneficiaries. we know," he stated, "the then finds a regis¬ corporation tered broker-dealer who, as I said before, may be without the requi¬ site qualifications that should be both in his responsibility to the investing ties fraternity, and to the public, and be of investing in new unproven,~nnd then together, these two, the cor¬ and the underwriter, in some cases, disgraceful public poration (Continued on page 2119) offerings from the standpoint of the Howard Coles is engaging in a i Warner,; President of J. Arthur<e>Warner & Co., Inc., New York the value received for the dollar : City, in a talk before the New invested." the country and to price structure of the securi¬ markets if these funds "could denied the dubious privilege economy QUOTED , 5 pressed resentment, to say the least, at the charges made by J. Arthur to the considerable SOLD : honest the Luke's Hospital. Them writers Inc., New York City, New York into a form of con¬ Social Work and the Community spiracy between the underwriter and corporation." He stated fur¬ Service Society and a member of ther that a reservoir of invest¬ ium, of the New York on was off the beam in his recent speech before ~ Security Dealers Association, in which he accused underof causing current decline in stock market-prices by dis- ; // em¬ & Co., former members of the York Stock ~ Exchange. In sey Exception to J. Arthur Warner Charge that J. Arthur Warner, President of J. Arthur Warner & Co.** I Mr. than 50% of the claim is denosited Federal Water & Gas Com. t ■- parent *Mr. Gould is a member of the are Consolidated Elec. & Gas Pfd. * ),-1 witnessed When tainties in store. ployed in the Foreign and Credit the plan cannot be accepted with¬ Departments of the American Ex¬ National Bank, ; which out the consent of the parent change later merged with" the Irving company, Electric Bond & Share. Trust Company. From 1928 to 1934 he was manager of the Re¬ search Department of C. D. Hal- . of tinct , The Bank of The Manhattan change offer is given), but if less — , stock prices this average of the regimented economy It is especially favorable for longe r^ term violence is the the BOUGHT .—V'l; - operations to all likely, and gives list of stocks witnessing the liquidation is mium. Win We stocks in order to effect be Direct ' V"',' bring profitable not and it is good news for all of America. to assign operating attempting been • will Says higher prices offering good value. of the difficulties some in toward 29 BROADWAY. controls smooth;| its erick : is being liquidated, Mr. Gould economy industries. prac¬ issue, it will It is not quite clear whv $6 preferred gets this "break" except that it has a higher re¬ demption price. The method of carrying out the of nation permit. to be applica¬ preferred stocks, ing plan become standard The stocks mak¬ divided into two portions up pear retiring senior on arrears to of five Montana Power. ble ; exchanges. pany, V*' \ Contends present market prices apwell adjusted to changes that have occurred, but cautions elimi¬ recent development preferred regular this it is pro¬ posed to "evaluate" the stock at ure). (based a market avoids Co. v • . bank liquidation of securities. tne method This the distribution cover Electric and finally (if necessary) the preferred { \ '.V •' ; '• . probably witnessed lows in unfavorable at that time. the its • trols brought change in long-term interest rates and was cause / the to offered retire securities is theoretical the have we ,'v regimented stock. company of our C' >•"' - serves ceed is latter to next and of retirement the public) inherent through voluntary subsequently for cash. American Power & Light $6 the for new after It each • v (j year. Lays recent break to roll-backs of OPA which caused uncer¬ tainties and fluctuating profits. Holds tightening of monetary con- these market use (together with that of the southern holding company prices approval will be obtained before lowance to ' «/?•.*'''•! *!' holds reports). Com¬ press monwealth will offerings.. It seems un¬ likely that Commission and court companies) ex¬ stock claims the "evaluation" figures named above) then the shares of Minnesota Power & Light will be withdrawn, next Kansas Gas & on according to may are offer. tially into effect by sale of Ohio Edison (an offering of Consumers has been twice postponed but is now being reconsidered, if conditions : Asserting Power and spring and the company re¬ the right (subject to SEC approval) to defer making the of¬ ferings if market and business ;'V..'.v' The plan is similar to the pro¬ gram adopted by Commonwealth & Southern and already put par¬ Liquidation By EDSON GOULD* after the year received under the exchange tice time a sell received by) any stocks are schedule exact no for these will Share & (not later than shares pany Bond /# Stock tively, for the $6 and $5 stocks. '[l. from .... 'wS'WiW \ T~ of incumbent upon him Volume 164 THE COMMERCIAL & FINANCIAL CHRONICLE Number 4536 International Organizations financing Foreign Trade \ By WILBERT WARD* V Vice-President, National City Bank of New York By LEWIS L. LORWIN* / cooperation if commercial relations between nations is to be stored and fostered. Describes various international goods on tions and terms,' have • and into and out of our own country, exceeds $5 billion. The volume of trade financed by bank times, fully employed the (facili¬ credit me as cial commer¬ banks. It ; ^ the power the member banks of United Wilbert Ward the to finance by ceptance , a v e in war *An address by Mr. .Ward before and the beautiful have wreckage battered streets of the men, war-drab trying to live amidst the ruins, seeking a corner wherever of roofless and there is some elements ruins-that protection from the and trying to' fix once Paris, silver concentrates, silk, rub¬ One reason destruction,, hang¬ page 2111) on Lewis L. or economic Lorwin seen in food and such whereby the men war. piaces the I r of chemicals. Textile materials in are import requirements will depend of country's economic situation. fore the American Merchant Ma¬ delayed by lack credible overcrowding (Continued on page Fulfillment of Italy's ? • :Y . tons of coal, and . 'VV4 A i k !r V- for analyses of on ©f those .' •' V 11 \ S4A DISTRIBUTOR, jf\ Analyses YOU? TO j\ < ^ ,/ v j-, frequently called you are new Vi. * issues—and the quality analyses is therefore mighty important to you. one of the various branches of the in¬ dustry.. The requirements of agri¬ 600,000 /.tons of iron and steel and 86,000 of non-ferrous products. The chemical industry should culture a have estimated been total value of to $412 million, and include, in addition to fertilizers, import (Continued page on 2109) way in which offerings in which reconstruction 11,700,000 products, Americans. This are made with the an eye to we same we are of definite and participate as underwriters thoroughness and written with clarity and investor-interest; just as are our No. 145A is in the When recently read we tion from Galileo in analyses in the future, we are confident that you practically helpful as have others. near will find them as minded of how hard think of we "words"—during visit to California, when recent 2104) ripening in the famed Valley. That's where CREST A stood in BLANC A are hill, BLANC A and these are three . . new District Managers- of grapes Fredrick w. Johnston < ;,v , ■■ ; Arthur m. Wolkiser Headquarters in St. Louis J , '' "■■■ " ' ' - •' * ifornia sunshine. quantitative about the Cal¬ It just isn't all it's qualitative ... Every visitor to seems to things whose roots fornia soil. Small are .*'• in the Cali¬ Z then, giant redwood trees are ■"j, & V;:- that Pressprich & Co. 68 William Street Telephone HAnover 2-1700 NEW YORK 5 Teletype NY 1-993 , • 201 the oldest growing higher and higher sun. And in the .California * the hillsides, carefully selected qualities of soil and climate, grow the vineyards, much of whose on go to make the wines today challenging the are Europe sun can vineyards produce. ; has much else to do in "ripen grapes," but the wine a bunch grapes are Devonshire Street, BOSTON 10 season has passed. 96-Page Book containing reprints of articles on various Exchange earlier subjects. Mail coupon to MARK MERIT OF SCHENLEY GOVERNMENT, DISTRIBUTORS GROUP, INCORPORATED PUBLIC MUNICIPAL, UTILITY, AND RAILROAD, > INDUSTRIAL INVESTMENT BONDS 18A, 63 Wall Street, New York S, N. Y. DISTILLERS N. STOCKS Y. 350 CORP. Fifth Dept. Avenue. 1, N. Y. Name StreetL City— h so their gratitude in "liquid sunshine"—long after the fresh express fruit JZone- ; valleys and I for ■H'./.r*'.'? / /;• the earth. They just on grateful for their share—and R. W. Members New York Stock • do the so : wonder, living things on California it and sense FREE— ' •• more " the world besides Headquarters in Chicago uv:'-V;V' • or if it had nothing else in as There's something of v we spoken by . hundred the world to do." The the appointment of two its the words "The sun, which has all those planets revolving around it and de¬ pending upon it, can ripen a bunch of announce which derives best that the renowned pleased to of the from years ago. which are located. the shadow crested Galileo strained to those ripened fruits We quota¬ a "Words To Live By," from Alfred Noyes, in This Week Magazine, we were re¬ have occasion to use one of these you series. a By MARK MERIT of —reaching for the Should of Sunshine keep other studies. space, SCHENLEY DISTILLERS CORP. too. That's i3,000 2,900,000 tons of oil petroleum >'■ tons the for time, in this appear an advertisement which hope will be of interest to our fellow tried to remember GoodSecurity • necessary we name, of requirements to there will CRESTA HOW USEFUL ARE. • tons of machinery- and apparatus the SCHENLEY DISTILLERS CORPORATION white practical help to our underwriter friends. Our analyses ment may be mentioned .* y' * v •' - i' .- ♦ ■ ; ; NOTE—From time We tons, and this in addition to 50,000 Among Sons, Inc. Livermore transport forecasted by the Italian Govern¬ > grapes were 4 Chronicle) Co., 647 South Spring Street, members of the Los Angeles Stock Exchange. Mr. Schlutsmeyer was formerly with Wyeth & Co. and E. H. Rollins & our Oct. 18, 1946. tons/ the foodstuff industry lion. lack Conference, New York City, homes, the black markets which ed also the amount of the cost of estimated at $230 mil- Financial Winery and Vineyards MILAN, ITALY—In connection^ with the Italian future import re¬ 83,000 tons of raw materials, the industry 25,000 quirements, it is interesting to pharmaceutical tons, the lumber industry 3,031,000 note that, according to the latest y information secured from Italian tons, the textile industries 205,000 tons of cotton, 60,000 tons of wool official quarters, such require¬ and 61,000 tons of jute and other ments for 1947 may be estimated fibres, while the rubber industry as far as foodstuff needs, indus¬ should require 33,000 tons, the trial, agricultural and transport leather industry 72,000 tons, the activities are concerned, at $1,258 oilseed refining industry 170,000 million, in which figure is includ¬ - come dis¬ ship, the factories unable to run because they have no coal, the in¬ foreign trade policy in lieu on The Schenley's rayon excess. to have An address by Dr. Lorwin be¬ total. Italian Industry requires 15 million tons of coal, of which 6 million should ! I tion in the quality of goods where there was once pride of craftsman¬ stores full of useful Economist estimates 1947 needs at $1,258,000,000 j Ernest shortages of goods live, the deteriora¬ By ANTONIO GIORDANO from U. S. Enormous home output of Maxwell, Marshall in as social goods, were once was ANGELES, CALIF. — C. Schlutsmeyer has be¬ associated with Maxwell, Prague, there and locations due to the busy railroad stations, the gap¬ ing holes in shattered walls which * Brussels the are once for the small employ- (Continued Italy's Future Import Requirements come up whatever they can so that life may go on. splendid liv¬ ing places, the rine j and women steel 18, 1946. V and also the hu¬ seen and co¬ who children win dowless were were avenues. I man once tortured ber, nuts, bristles and fur skins. Conference, New York City, Oct. Europe which took Hutchinson Torrey. With twisted coa, Merchant Marine & increasing the heaps of rubble where there of endless blocks frames American the Ger¬ — S, Marshall & the dismal destruction partners in partner in W. J. Banigan & Co. will be associated with Cohu far go York Stock a (Special 10 -week visit to a seen use power, toward will outstanding amounted to but $206 ing; imports, including coffee, the h just returned from of their ac¬ million at the end of August, and ing in mid-air alone, without were largely employed in financ¬ which were the Organization and v. its loans in U. S. mostly fallow. Dollar acceptances Presently, this power now lies States trade to John Even where there has been lit¬ tle physical of were also Frankfurt, Berlin, Moscow, Warsaw, Prague, Paris, Brussels many and Po- million at the end of 1929. available by our New Both W. J. Banigan & Co. London. land should not be made I to acceptances reached a peak of $1 forgotten that ties members of the Exchange. and shipping of the world. billion in 1920, fluctuated between $400 million and $700 million un¬ til 1927, resumed its upward climb to touch the old high of $1 billion in 1928, and to pass it by reaching an all-time high of $1,700 barriers Trade 1, William J. Banigan Jr., will be¬ partners in Cohu & Torrey, Street, New York Cit.y, LOS the well International removing commerce I have as predicts World Bank will float bulk of proposed toward im¬ the recourse w e ne.ver, in flush even Holds to their loanable funds, importation or exportation of goods between foreign countries nor¬ Nov. Wall organizations <$- credit re¬ that have been set up under U. S. leadership and asserts U. S. has much to gain from work of each. Lauds Bretton Woods institu- y mal On and John B. Fowler, 1 Administration's foreign trade expert stresses need for international ■ movement of Be Partners in Cohii come Economic Adviser, Office of International Trade jV present export-import situation creates a distortion in our trade balance and points to need of granting foreign credits. Says exports ; when paid for by our investors and taxpayers will not benefit people until/ as a nation, we can receive from others equivalent prod¬ ucts and services. Scores "do-gooders" in our government who I propose heavy loans to foreign nations, and expresses belief that loans will be extended only to those countries in which favorable conditions for production exist. The financing of our foreign traders—of our exporters and porters—has never been a problem. In the field of financing Banigan & Fowler to Fostering Foreign Trade V Foreign trade expert points out that when conditions have been I proper there never was a problem in foreign trade financing. Says * 2077 State_ Thursday, October 24, 1946 THE COMMERCIAL & FINANCIAL CHRONICLE 2078 Analytical Osgood Company—Special report Peltason,. Tenenbaum —Seligman,.Lubetkin & Co., Inc., Chefford report Dealer-Broker Investment Columbia York—58th consecutive quar¬ terly comparison of leading New York banks and trust companies- edition—A. E. Ames & Co., Inc., 2 Wall Street, Co;, 120 Broadway, New N. Banks—Com¬ City York New York 5, n,y(, New York 5, N. Y. ' : ' , — Railway Circular — Light¬ & • V, » • r _• - .... •••' K "• i f ' v Corp.—Analysis—Wil¬ Co.," 42 Broadway, 4, N. Y. Baren New York Pettibone Muliiken Corpi-—t-Bul- tailed'memorandum—De- Analysis—Comstock & Co., South La Salle Street,. Chi¬ & Rapids 2, Michv Co./ 120 Street, Chicago Also available is a circular* on Chicago Hardware Foundry Co. Young Grand Rapids Building, Grand Bank Salle La South — & Caswell — 3; 111. Tornga, National Insulation Universal Zonolite Analysis , Larson 231 S. liam 9, Fred B. Prophet Company—De¬ tailed V •«' '• Boston & Adams Decker Manufacturing Co.—De¬ > Telecoin Homsey Pont, Street, ' letin—Doyle, O'Connor & ' Co., Inc., 135 South La Salle Street, Chicago 3, 111. 19 New Peck, 63 Wall Street, New York 5, the third N. Y. ..;ftft2r. for banks City Co. ing Milk 31 Mass. analysis of and quarter of 1946—Laird, Bissell & Meeds, 120 Broadway, New York ■- YorkV5, Y. 6, N. Y. parison Provinces—Twelfth an¬ and nual tive: analysis—du L. F. Rothschild & — Connecticut Comparative Condensed State¬ ments of the Dominion of Can¬ ada cupied by these industries—E. F. Co., 61 Broadway, New ■ Parker Appliance Co.—Descrip¬ Co., Corp. & Electric Columbia Gas —Analysis York Corp., 120 York 5, N. Y. \ /.Purcell & Co.,' 50 Broadway, 4, N. Y.. ftft^/vftft*; Study of the strategic position oc¬ Electric & Gas. Carolina situation—Edward New York Industries— Resource Electric- & 1420 Brothers, Street, New York .4, N, Y.- Walnut Street, Philadelphia 2, Pa. Also available are memoranda v Also available is. a late report on Gruen Watch Co. and South on Wellman Engineering Co.V-. vv ; A. Hutton & Hanseatic York New Broadway, New Natural - Companies of Banks and Trust New Gas the of Study the firms mentioned will be pleased interested parties the following literature. C®.—Memo¬ Stoker Standard randum—Buckley 41 Broad .v."ft: 2, Mo. It is understood that to send — Co., Landreth Building, St. Louis Recommendations and Literature - Master — Corp.—De¬ Concrete Vacuum analysis—Ward & Co., 120 Broadway, New York 5, N.. Y,V tailed < , Utilities— cago 4, 111. ft2j:-; ft.■; 22/ \.vPublic National Bank> & ^ Trust Also available are analyses.of Comprehensive comparison of 127 ; Yuba C onsoiidate d Gold - Fields Co.~-Analysis—C. %':E. f Unterberg common stocks—Ames, Emerich Hydraulic Press Manufacturing —Summary and^vanalysis—Shu-> & Co.; 61 Broadway, New York 6, & Co., Inc., 105 South La Salle Co.; Long Bell Lumber Co., and man, Agnew & Co.,. 300 Moht- Street, Chicago 3, 111. . / * \1-. Miller Manufacturing Co. gomery Street^ San Francisco '4, Public Operating ? Sugar Cuban , Stocks—Study of outlook—Lewisohn Co., 61 Broadway, New York 6, and situation & N. Y. Calif. Utility (jommon several issues Operating Includes Kit Tax reference to Also available is the holders and also enclosed is of. suggested exchanges to on situations. various interesting and a handy application establish tax losses, data with Letter Investment list a Fortnightly gains and losses—Mer¬ Lynch, Pierce, Fenner & Beane, 70 Pine Street, New York rill Paper Co.— Circular—Ernst & Co., 120 Broad¬ Abitibi; Power & is bulletin on a Corp. 'United Aircraft That; The Commercial Shearing and StampUs Executives * Tell . . Barcalo Manufacturing Co.; John Doe Letter; American Phenolic Corp.; General Machin¬ Co.; ing Mining Corp.; Qolden Crown ery Co.;'Silver Creek Precision Corp.; Plastics Materials Corp.; Higgins, Inc.; Highlights of Wall Street. ' Tele¬ & 5, N. Y. dum is on a memoran¬ South Carolina Electric & Gas Co. and review of J. C. Pen¬ a of . Corp.—Descriptive cir¬ Argo Oil >•- ■ • ■ •• New UNDERWRITERS & on available LOS ANGELES 14 650 S. Spring St. 135 La Salle St. memoranda are Hart¬ , Glass; Puro- „;2.,-1.><> ; • *?> : '• > -vt lar—Hicks available Also The Chicago Corp. and The2ft :2ft Corp. Alarm—Anal¬ ysis—Mitchell & Co., ,120 Broad¬ way, New York 5, N. Y. Johnson H. ■r Co., 208 Street, Chicago /Brailsfbrd Salle La & ftftftft'2 available is:"a circular Ion Also Queen Anne Candy Co. , International Resistance Co.— Hano, 61 Broadway, New York' 6, N. Y. • : & Lomb Optical Co.— • ■ Publications Cribben & Sexton Inc., Com. Salle La Street, Chicago 4, 111. cular—.C. E. de Willers & — ;• Cir¬ Recent •ft..\\ .Established 100 — Co.—An¬ The First Boston Corp., N. Y.1 Broadway, New York 5, N. Y. 3; 10 So. La Salle St., Chicago 'Teletype CG405 Indianapolis, bid. Rockford, III. Cleveland, Ohio Public Central of '52 and and Gas study Pfd. and form—Fred Utility Consolidated 5%s Electric Comprehensive analysis in.brochure — W. Fairman Co. ' England Public volume and nature The reflect many oar analyzing 208 new these SOUTH LA SALLE ST. CHICAGO Telephone Direct Private Bell 1 Randolph Doolittle, iSchoelikopf & Co., Lib¬ erty Bank Bldg., Buffalo 2, N; ,Y. a fluence the conditions ■ : under which . international dealings world with Amos E. Ch Taylor are car? forward. ried the ten alter Railroad Municipal " 637 York Incorporated a n ge s in - policy are ofdevelopments these may in turn result and the both character of of and volume business - Telephone New York State 8711 Philadelphia tp ~ > the Pittsburgh Minneapolis wielding.; an unprecedented balance of econom¬ ic power a.t;2the"1 conclusion ;; of World War n,_ is-certain to hdve its policies and decisions reflected in the, composite statement of ; its international .accounts. EVeii The United States, • , though this country normally ex¬ ports only a relatively small part of its total output it is the world's greatest exporter. Despite the fact imports are a that United] States fraction small very volume of of the total goods utilized for con¬ sumption or for serving the with other nations. At the same processes of production this coun¬ time, developments arising from try is the second largest importer purely domestic causes may pro¬ in the world. The nature and duce shifts in the channels of course of our trade with other na¬ methods national * Teletype CG 273 nation's, international transactions conducted balancing the inter¬ accounts. A nation,' deof - 135 So. La Salle Street, Chicago 3 4068 Wire to New CG ■■ a Byllesby and Company . 4, ILLINOIS System > ft of trade which will in turn alter the H. M. Gerety Economics, Department of Commerce 2 the rest of the r c u Brochure Bonds'. William- J.- of the basic elements of that nation's vitality and economic stabil-'« : —: im¬ ity. The im¬ pendent upon international trade or upon shipping for a substantial pact of world developments part of its national income or for the maintenance of an established upon the na¬ of living, is likely to tional econ¬ standard omy may react sensitively to developments ,♦ ^ -.4 { strongly i n - abroad. Service 5y2's of '52 Write for admitted the 2 have small part - — BONDS and STOCKS New York t Curb Fkchange, Department official contends that despite relatively; t international transactions play in: our total commerce^ the nature and course of our foreign trade warrants particular attention at present time. Points out government shipments abroad; "/; are declining rapidly and both exports and imports will be greatly 2 influenced by economic conditions at home and abroad.^ Sees need for larger international capita] and credit transactions to bring 2 about an equitable balance of payments and to avoid draining: outside world of its resources Sees hope for American shipping.: . abroad Utility Broadwdy, J Commerce ■:•' v:\;■ " Ohio-Apex, Inc.^—U i Industrial BradY & Garvin Admit partnership in the firm. Director, Office of Business ... Underwriters—Dealers—Distributors Public Utility 2 New...York"- City, members ef national trade Central Public Rothschild he organized a bond Transactions Straus-Duparquet, Inc. ISINCE1908 Fred. W. Fairman Co. partner in the* bro¬ kerage firm of L. Current Trends in International Appraisal of values — Ira Haupt & Co., Ill Broadway, New York 6, N. Y. : & Co., 208 South La Salle Street, Chi¬ cago 4, 111. 'ft/ South /: Mich. . 1916 Chicago Board of Trade he became a • — Buhl Building, De* Dolphyn, troit 26, —Bulletin—Luckhurst & Co., Inc:; 40 Exchange Place, New York- 5,1 New Members Principal Stock Exchangesi Tel. Franklin 8622 Electric Birmingham alysis ?mi H.Davis & Co: 'VJ!1""'1" 1 1 }mt •• •• > Nathan ^Prospectus Available on Request. • report—-Mercier, McDowell Co., 120 Broadway, New York 5, N. Y. j Woodward Govenor Co., Com.;< shortly after the turn of the cen¬ tury to begin iiis career with: the firm of William-Salomon. Later Brady & Garyin, 115 : Bausch Analysis Sheller Manufacturing Corp. , - MacFadden Circular—Adams & Co., 231 South York; & Steel', Products Co. Memorandum on*interesting situ¬ Co., Com. Snap-On Tools Corp., Com. — Sills, Mintoii & Co., Inc;, 209 Co., Wall Street, New York 5, N. Y. .— J of age. department Serrick Gulf,. Mobile & Ohio Railroad— ation an 2 2 f memoranda are Muter-Ch. 64 years 1939, died at his home illness of several months. Price, 231 South La Salle Street, Chicago 4, 111. Memorandum—N ewourgerl& LA 255 Wells-Gardner & • Ala¬ lator Products; Upson Corp.; bama-Mills. Automatic7 Fire * , 4, III. Michigan 4181 CG 99 Building,. Stock Greyhound Corporation—Circu¬ South ~ State 6502 > Whart¬ Iron'& Steel; Barcalo; Haloid; Window 1 Byllesby & Exchange Philadelphia 2, Pa. Co., Lanova Corp.; Mo¬ Empire; American CHICAGO 3 M. Indiana hawk Rubber; and Taylor DISTRIBUTION New York Avenue, Printing & 30 & CO., where Broadway, W. Li Douglas Shoe Co.; ford MARKET SECONDARY Co.—Bulletin—H. :; • Co., 120 York 5, N] Y. Also on Fifth 350 Products and Wellman Aspinook Corporation—Circular —Ward For ■ Manifold. Analysis—R. Pacific Coast — Tennessee running in the Chronicle-^ to Mark Merit, in care 0" Schenley: Distillers Corporation write La Salle Street." on available are circulars on ; Wholesale Distributors Middle West Wall*Street,'Nevv York 5, N, Y. General York 4, Inc., 41 Broad Street, New Distillers Corporation of articles they hav» Schenley —Brochure been ft * in the ihbusiness for until his re¬ Mr: Marks came to New & Engineering. „ V Dealers Securities 37 than more He was 69 years N.Y. . tirement in after effort, and postwar develop¬ ment—J.: G.' -White & Co., Inc., • cular—Seligman, Lubetkin,& Co., comparison—H a y d e n, Street; New position, prewar ". Company. ney A war „ available Also Also Member, National Association of and- Welder Co., 15 Broad Street, New his & N. Y. CARTER H.C0RBREY&CO. Machine Federal graph—Discussion of the coming A. T. & T. financing—Kalb, VoorYork - banking York % memoranda Distilling Corp,: Merchants and < . Telephone "American are South Carolina Electric & Gas Co.—Study Forecast—J. F. Reil- Long Term ly & Co., Inc., 40 Exchange Place, New York 5, N. Y. Also available are the following: Election Day; ' available Also Broad¬ 32 Barken, New York 4, N.Y. way, ' Insulator—Memoran¬ American dum—Peter : . Corp.—Memorandum—- — ' H. Marks, Lawrence Stone &: Co.. 25 Broad 1420 Walnut Street,. Philadelphia 2, Pa. on available cale •• Lawrence , vestment San Mauricio and United Para- Brothers, Buckley ;! New York 5, N. Y. 2 2;.'r, way, 5, N. Y,,; Also St. Louis-San Francisco. on Eastern of capital - dum | Co.— Anaiysis^-Steiner, Rouse 25 > Brbadl:Street^ ;NeW ;York ■ 4V N; Y. -. ■ ' ■ " • memoran¬ a r for determining chart available -is Also Manufacturing Rockwell Rio Grande Western & tax manual a current tax ity Denver Railroad Co—Discussion of infor 1946— Stocks—A list of explaining appearing attractive at current interesting possibilities-—Vilas - & levels—H. Hentz & Co., 60 Beaver Hickey, 49 Wall Street, New York laws, with particular their effect on secur¬ Street, New York 4, N. Y. 5, N. Y. t:2ftiftftft 2- Investor's ■ An address by Mr. fore the American Taylor be¬ Conference, New York City, Oct. 17, . v as we are time to the that r a foreign Merchant Ma¬ rine 1946. passing from war¬ peacetime economy thus warrant particular attention at this time. The interdependence of tions of the trader's interest and shipper -1 places (Continued on page 2105) j;he ; ! , [Volume v 164 THE, COMMERCIAL & Number 4536-■ J FINANCIAL CHRONICLE 2079 Wfc producer every once a come V'.-.. #y PAUL einzig /'V -: rv' v: 7 ■ jAsserting British export boom in face of home shortages has hamprogress, Dr. Einzig contends emphasis placed NSTA LEGISLATION COMMITTEE ' ' SeburUy^ -Traders ^ Association. appoint a'- specialt ,.committee ; .to analyze- the legislation proposed ..by- the Securitiesand Exchange Commission reqiiesting additional information on unlisted companies, according to Thomas Graham, The-Bankers Bond'J Company, President of the NSTA, in a letter to Robert McConnaughey, a commissioner of the SEC.-.: *: The committee, Mr. Graham ^declared,-.will be instructed "to take a thorough look and to National "The • to very ateness for do. ation most to be The sre these special few of The ^ Petersburg. The > . of accent southern cute Paul McClsaary George Mrs. of St. Jk good sportsmanship of Mrs. Robert Erb of Cleveland. The unfailing poise of-Mrs. Bob McConnaughey^f Philadelphia: It is not unerring &raciousness .of Mrs. G< W. Hyett of the Road. £• ' ' Milwaukee its ignored; means rising. On the and worked to the government's increase of exports merit who hand, on situa¬ . were ' and / DETROIT AND MICHIGAN, INC. - Traders. Securities and Detroit of held be will • on Association Michigan, .Inc. Nov. 8 in the Detroit. Penobscot Club, the ness dinner, ► ^ VYY'Y 'Y : i F. & Rothschild David • Don offices of Leven has Lexington Avenue City, to engage in the securities business under 120 th§ firm of Leven Brothers. nanje Broadway, New York City, mem¬ opened 710 New York announce "-them partment.y Mr. -r ; y D. A. Pincus & Co. '- De¬ i[ ■- New • partner in W. W. Lanahari A Co. York retire Mravlag in the past was a from Stock Exchange, wil partnership in D. A Pincus & Co. Oct. 31; on know the that .We have prepared a bulletin We must make .attractive markets Reserve credit cities. again to the Resolution we trans¬ mitted to them in October of last in effect. ; "An out¬ rec¬ the year E. William Ohman :^0/rsZ-; Copies available upon serve ernors us • an our Ohman said. every this move marily but sense, a as was was. a our not intended their part of community unwarranted the whole and would and thin markets. This wire to are the Governors of Stock Exchange at meetings and copies say Mr. pri¬ gesture of friendship hard-headed business on Active request Optical Co. v'-wjL<./••• Schram Stock of one v,. •• J YV' £'.-S, ...V t t. b. e - '•«" in the in¬ New York. "Looking and New to -V'/P-' on 7 York the ■ "; * V-: .r. J */.*'•; 7 the;, future almost too obvious to seems 231 SOUTH p; 2 'S v'.i. •.} * LA SALLE STREET CHICAGO 4, ILLINOIS TELETYPE CG 36! As¬ it PHONE STATE 0101 Aeronca Aircraft * Decker \ Old 7 * Coal Corporation Mastic Asphalt Co. Miller Manufacturing Co Seven-Up Texas Corp. National Tool Co.: Hamilton Mfg. Co. p James Manufacturing Co. Ben Long-Bell Lumber Company OF Compo Shoe Mach. Co. Industries, Inc. Hydraulic Press Mfg. Co. Weyenberg Shoe Mfg. Co. , Corp. Manufacturing Co. Howard * St. Louis Public Service Co. Nekoosa Edwards Paper Co. Trailmobile *Detailed Company analysis available on request. COMSTOCK & CO. Chicago Stock Exchange 225 EAST MASON ST_ PHONES—Daly 5392, Chicago: State 0933 , CHICAGO 4 1200 MILWAUKEE } ... (2) 231 So. La Salle St. Teletype MI 488 f Si i, , I 77: ^ ' V '» i'" * • * -i' * * Dearborn 1501 Teletype CG 955 s Vi' ."i :'4 :v-> ADAMS 6- CO. men¬ tion that the need for Northern Paper Mills Co.. : ■■ ■* A **""" * -' 'into -Vf Cons. Water Pwr. and Paper Co.i r J '.v • v • J Request 'i. ivPj sent to organization the door opened to us to offer our and concerted action by the men help in shaping of over-all poli¬ and women in our profession is cies, giving voice to the producer's growing from year to year. Equal¬ viewpoint, and also have the priv¬ ly obvious is the need to have $ 7 ' 711771 ☆ ; : * Circular r; v ,' Chicago of their were the Exchange Exchange itself and Security Business in general. i"We, as a group, have thus had of the Members ..•1 ■ i',v- Common Stock v . CG Trading Market in read was the .yy Teletype: Tele. CG. 28 sociation of Customers Brokers in Wisconsin Elec. Pr. Co. CHICAGO 3, ILLINOIS Telephone: Dearborn 6161 job." Bausch €r Lomb now unduly rapid price declines resulting from organization I venture to Wisconsin Pr. & Lt. Co. .. ^ profession our life-time we confidence business capacity," Continuing, he Chicago Stock Exchange indeed friends of in a avoid advisory Koeliring Co. . INCORPORATED ranks. our attention ' • a blood new Chicago 3f iii. the Board now, permitting trading on a 50% credit basis would re¬ this year their Board of Gov¬ on in controls We called DOYLE, O'CONNOR & CO. • as Tel. STAte 4950 CONTINUOUS INTEREST IN: 135 SOUTH LA SALLE STREET con¬ 135 South La Salle Street J- Lake Superior District Power Co.> . am KITCHEN & CO. j protested against regulations and suggested prompt announcement from these that our in which Chicago Stock Exchange naming of your president store on Corporation common busi¬ airlines sent a, Reserve thin declaring THE SECURITIES Pettibone Mulliken conduct, and I tinuing infusion of of high quality into * . high and we Federal eral o n, the Clayton Snyder, member of the in local terest that Paul yV. associated with is .now in their Institutional Mravlag - to h ap t ers in the principal t i a decision bers of the New York Stock Ex- •change, ethics . on Sept. 24 belief that existing, resulted from Fed¬ Mr. Leven Brothers in N. y. C Co., Washington o r states that "While the officers of L F. Rothschild & Co. - to Board to Chapel ?.SV, Mravlag Hew with L. terested in R. of survive nor maintain our telegram a from the Harold grow not organization. i"Along this line you will be in¬ wj o r k of our organization came to will attend. of ness ognition of the mem¬ bers will be entertained by mov¬ •V;, H. Terry Snowday with our best insurance in this direction will be the con¬ intimately. This sort of close contact and vigilance conceive to be the primary busi recom¬ standing ing pictures of the MichiganArmy football fgame. It is ex¬ pected that several of the officers and members of other cities work vinced trends formation of I Inc., is Chairman of the committee in charge. lins & Sons, the and mended the with j Snowday of E. H. Rrol-1 Following do we standards E. William Ohman, retiring president of the Stock Brokers' Asso Chicago, in his farewell message to the membership ex pressed grati£ i c ai; i o n at ilege of watching developments c . Association, announced that H. Terry 47; end { ganiz of neither can if ciates of national 4 - Harold R. Chapel, president this IIIItaca M// and of the The annual Fall Dinner . to committees from other organi¬ zations affected. Our business Retiring President of organization tells fellow members they should work for removal of Reserve prohibition against margin trading. and prestige gained. by the organization ASSOCIATION OF SECURITIES TRADERS busi¬ our be required to accomplish the desired result may Chicago Stock Brokers'Associates confi dence femmes tvho went along. of the One as mid-continent Louis. many more * Consequently TRADING MARKETS such treasures aboard, and those men¬ tioned: were duplicated by others. WO shall hope to bring home more of these from Boston instead of just souvenirs. There like Ohmanfs Farewell Message ta ,r] The adlibbing ability of i and all group. profession. ness are 2109) insistent would we ing such changes in business page na¬ believe we ought to give a great deal of attention to mak¬ have every reason for (Continued a it originate right from see our horse racing event other such I enemies. the sure our .own a On become am , increase of absenteeism did for need F a snail-like pace, in spite of the catastrophal, housing shortage. They are their, government's worst harder They are: "2. We need to attract young men and women of high grade to drop in the coal output. Building workers are working at to an every an my national organiza¬ a the ready I classes which appeals to the miners limit. Wages workmen. respond of Mrs. Star Koerner of Chicago. : : Ed Kelly of New York, f vt The peerless charm of Mrs. Ed Beck of X j* ; A dancing partner like William Koeth of Cleveland. The amiability of Mrs:. C. J, Newpart. of Chicago. • . J The reflected glory Mrs. Ed Welch must feel because her husband Was responsible for our having a perfect trip all the way. I well's in tion-wide organization has al, The good grooming of Mrs. Thomas Montgomery of Chicago.. The stunning wardrobe of Mrs. E; E. Parsons,. Jr. of Cleveland. The vivacity of Mrs.: Jack, Morris of Atlanta. .. I The musical talent of Mrs. Richard Walsh of St. - not other appeal for • The ability at bridge ' to have reached trade paradoxical a working out principal cities. I feel strongly , brought in the Labor Government if workmen engaged as export .;,:. . last year are letting, down their government. Fuel Minister Shin- Cheap policy hand, export trade is sur¬ passing even the most optimistic anticipations. " v • L in is - 0'. stand tion of Registered Representa¬ tives, with local chapters in receptive is slow. other han The \ This; : equally markets. tion,: The , > ^ and the culinary art of Mr. Dyke of the The ability in cuisine ^ Einzig and prices are still the overseas industrial seems qualities and characteristics we noted in our fellow-travelers: to reconversion money Souvenirs! Yes, we brought home all we could carry, and they nice to have.. But we wish we had been able to bring home a kets progress of ,. much desired. which "1J Building en¬ far, from adequate industrial out¬ put from the starving home mar¬ situation leaves merchants organiza- can vote ever-increasing attention building workers did. It is the in¬ and at added work or gaged in export trade who re¬ sponded. It is they who are divert¬ ing a very high proportion of the food •: miners dustrialists listing and also to Thomas Graham coal situ¬ factory,- The study .very care¬ than more housing carefully what constitutes appropri- 5CHE FEMININE VIEW POINT OF THE NSTA CONVENTION > .: is critical. The is the that any unsatis¬ fully the nfatter of the removal-of unlisted.priv¬ ileges ;on; all exchanges.'' * - „ « ^ . • The situation coal „ study of expected <$• was we our mind, and to which I hope the in¬ coming administration and suc¬ ceeding administrations will de¬ LONDON, ENG.—There can be no doubt that export trade is the sphere in which the Labor Government has done better than it one that so it privilege to be¬ of speak and act authority of full representation. Two major pieces '• will:: shortly consider a member a with jpered reconversion by the labor Government and by British industrialist* is resulting tin selling goods abroad at bargain prices. Says situation is due to efforts-of manufacturers to please Government so as to avoid intervention. Holds export drive is grossly "overdone" and is a shortjsighted policy. ion duty and \ Contrasts Within Ohio Brevities -* investment An group and Northern Trust Co. of headed by McDonald & Co. of Cleveland Chicago, offered $1,600,000 of 1#% school Lakewood, residential suburb of Cleve¬ reported that it was 85% sold. The 100.628. additional construction and improve¬ The3> to1 the board now holding $4,300,000 of its bonds compared with yield 0.70% to 1.50% to maturity. $1,700,000 held by the public They mature serially at $80,000 and $600,000 by the city treasury annually from 1948 to 1967. transit board operates the municipally^ owned street railway. The bonds bear an interest rate of V/2%. were land, Fahey, Clark & Co. and Merrill-Turben & Co. and Braun, -• > Toledo.- I'. r v - •: of last the Co., & Bosworth '« . James F. Lincoln, Presi¬ ded announced^- =/ZZ Taylor, who served with the Air Corps in the first World War, was appointed Vice-President in charge of sales in 1928 and has bebn a director since 1927. A the split Following; the dividends of; 80 «ents and Class B will be en¬ titled, under certain conditions; to non-cumulative dividends up Zr/Zf '/ * *; to 40 cents. has been elected Vice-President of the company, shares will receive * * } - . schedules " in ' airport, the traveled from central v n...v.^ -Europe-'^ has the feeling of being a charin acter Switzer¬ land still exist this ex¬ hausted really ever exist? It seems bid of 99.279 for Cleveland. He formerly was chair¬ l3/4s. Harris, Halh& Co. bid 99.154 men of the American Transit As¬ for i3/4S find Blair & Co. 99.766937 sociation's bus advisory committee. weeks in Ger¬ f-;' * unbelievable, almost, to one coming from Railway Co. on a clusive. * * — - * •- - • • /./•;/: stone year $625,000 of Fire¬ & Rubber Co.* 20- of total FA Tire 3% lj, 1961, debentures, due May redeemed on are being first of the . month. The bonds are being selected by lot ahd should be presented to the Cleveland Trust Co. or J. P. the Co.* & Morgan New York,' ' • * /</: ; - < -I * * • two for one and par is $1. It formerly was split now no" par. * :•!l/' . Wallace De ""/• ~ y. * Laney was elected Presi¬ dent and T. W. Miller, Jr., First Vice-President; George A. Meiler, Secretary-Treasurer, Z. T. Wile, Assistant Treasurer and R. C. chairman of the board and Johnson, Assistant Secretary. 'V-F.'.-br-"v'; * V. * * of increased ing positions because living costs. the 800,000 city of of purchase fund Tressel With Merrill Lynch Office In Cleveland $1,- commission, tations New OHIO—John J. Tressel, manager of the Cleveland office of Merrill Lynch, Pierce, Fenner & Beane, 216 Superior Avenue, N. E., announced Thomas B. Ross has been assigned to the Cleveland office as account ex¬ From lake's the evening neon glowing their come! one Oriental a scandals and Corporate : Philip Carey Com. & Pfd. Securities safety S t (Incorporated). Established / . .. . 1 Stock 1899 New York Exchanges—N. Dixie CLEVELAND and Y. Cincinnati Curb Assoc. Terminal Building CINCINNATI Chicago Denver Columbus Toledo Buffalo bonds shore in looks on 2 New York Tel. Main 4884 Tele. CI 68 & 274 • its with e, displaying fur coats, watches, electric razors and shiny " shoes, bananas, — what you will! The not — dollar but — Ameri¬ the goods are ration • , 14, Ohio and frame They men. the measures and determine the time when be will While we sistance sometimes have the as¬ who Democrats of is Only theirsupport wavering. ; principles, uncertain and Republican a *An address by Senator Taft at Decatur, 111., .Oct. 16, 194-3. ' . , '» • have . not do an oppor¬ Curley Brooks. For the last six he has fought steadily for American principles. He has not hesitated to incur t^e enmity of those who smear anyone opposing years the PAC program. I look forward to four years more in the Senate sitting by his side. I strongly urge the re-election (Continued on page 2091) /// \ with so eats very one trast There food. style/ Such the with of cities and Vienna. That I am the is ruins changing financial conditions. Holds system has been vital force in financial development of a free economy, and present problem is ■ /';..vH/ in Switzerland today by plan, but one of those fortuities which require of today's is not traveller in Europe either banking and monetary conditions favorable to to maintain and rising level a stable of production and consumption without inflationary speculative pressures and without undue monetization of public private debt. Says traditional instrument of general Reserve credit policy has been weakened by necessity for maintaining orderly conditions in government securities markets and for protecting pattern of interest rates, and sees need for amplifying or or much / credit controls. appreciate having the opportunity to talk to you today about System in credit control. Morris Plan I banking con¬ /' System1 Young traces role and function of tbe Federal Reserve System Z points out constant need of adjustment to' Dr. are German Statistics, Board of in credit control and the role of the Federal Reserve to be sure, but well indeed and in System and Governors of the Federal Reserve Reserve* Federal and banking stem from the same so¬ cial background and are about of the same age. Both had their origin in a period of thorough¬ going reappraisal—by the public —of the functioning of banks; and both have passed through the periods same stress Of financial and change. Because of the Another circumstance makes a review of the role and function of the Reserve System in credit con¬ trol especially appropriate occasion. the That on this circumstances is which we find our¬ selves in national banking devel¬ opment. We /have just passed through a period when the na¬ tion's banking resources were pre¬ dominantly absorbed in financing stage in adaptations that have been made to newer situations, both systems total war. We are now endeavor¬ have turned out to be somewhat different institutions in method ing to readjust our banking opera¬ tions and activities to \tfhat we de¬ and in function from conceived at their or¬ voutly hope will be an enduring igin. But men of broad vision were period of neace. This transition must be a grad¬ associated with their founding- of operation what many men Richardson who by aware are that agencies of fi¬ dynamic needs of the Field, Richards 8c Co. Union Com. Bid;, CLEVELAND Tele. CV 174 Union Cent. BIdg. CINCINNATI Tele. CI 150 ual one, because the assets of a banking organization geared to fi¬ nancing total war can only be institutions, slowly converted into assets ap¬ experience and study changing NEW YORK 6 still By RALPH A. YOUNG* INCORPORATED 29 BROADWAY ?j.^ • You Asst. Director, Division of Research and and Teletype CV 594 is Credit Control J; sensitive 14 Administration by the idea that we spend ourselves into prosper¬ The Federal Reserve nance Members Cleveland Stock Exchange be¬ American in lieve they to ; Congress. presented WM. 1. MERICKA & CO. CLEVELAND Commerce BIdg. Cleveland mittees form ; coupons, Harshaw Chemical Union Commerce Building 1582 Union the" com¬ "appoint; the chair¬ Congress. Z They were Exchange measures check inflation, be¬ tunity of electing a Senator this year, but I could not come to Illinois without expressing * my great admiration and affection for the Cleveland Stock in¬ ity. organization of an Company Request war Only a will have dominated can the Drackett on has Congress to adopt to the cause Robert A. Taft the of Communist in Wellman Engineering Circular the it courage necessary the government. : has control of the (Continued on page 2113) Members of the in been a;;; hard . \„ •. ^ . . ,. battle because the Administration broad the down r a s s tastefully are sale! for W. D. Gradison & Co. •»Members Republican American razors, prewar OTIS & CO. and reg¬ home and here, not merely on display, but ,/ Red Top Brew investigation fluence American farm, real the of the ulation hand¬ see looks down its nose at the * to-, complete with many pleasantly messages of wel¬ rugs; all sorts, And Distributors of Municipal the trend of the Admin- always cheap in for Switzerland perhaps alone among the nations Land Trust Certificates block frame can program is tr a tion glasses, cameras, clothing of opera can Underwriters and been to steady chocolates Whitaker Paper have able brightly lit street lamps, is like walking down Fifth Avenue. On each side are rows" of shopwindows Sport Products tive While somewhat signs, walk To Bahnhoff past six months he took company's intensive training course in important phases of the securities and commodities busi¬ Gruen Watch, Com. Cincinnati we an affirma¬ within American principles of liberty ' and equal justice. Only a Republican Con¬ gress can frame a definite plan for reducing, expenditures and then reducing taxes. Only a Re¬ publican Congress can undertake Congress of city,. _ colored ecutive. ness. to Decatur and urge Republican Congress this year. I cannot elec¬ an tion. London, American eyes j such Paris;-and Zurich. Only the Berlin Stock Ex¬ change board stands blank.; 4/v illuminated CLEVELAND, can stocks < and of York, prices , are but one real pleasure for me to come digits of gold; the latest quo¬ early the its bonds from the sinking all, bank, windows set For the Cleveland Transit Board au¬ thorized at portanoe pressing facilities. jeeps, mirabile dictu; nor/ any : \ Furthermore,1 teachers are being foreign troops!" forced to seek other better pay¬ The coins are of silver! And in Incorporated, ; Splitting of common stock and 1 The majority of the issues; are in the 2 and 3-mill class, with of par value was ap¬ others ranging from 1 to 8 mills. proved by Faultless Rubber Co. stockholders. Present common has been For here in Zurich ruins no a the/.im-v' size enrollment/is changing value .and Czecho-. nice, newtaxing districts in Cuyahoga looking buildings! The streetcars, County (Cleveland) will seek shiny in their toy-blue paint, have voters' approval on Nov. 5 of tax glass windows instead of boards levies and bond issues running where windows should be; and no passengers cling to the* outside into the millions of dollars.f Various members of the school steps! The motorcars purr uncon¬ by, and no; crowds boards, school officials and teach¬ cernedly gather in the streets to admire a ers have pointed out the need for new Chrysler! Nor are there any new equipment and that heavy • j- 32 school A total of 21 of the Austria many, Bratter \ Slovakia. priced to yield 1.10% to 2%. They mature from Nov,.; 15, 1947. to 1956 ml%s/The issue was for M. Herbert Likens over-empha¬ wards ■*y'C -/- ment for the Captial Transit Co., A Halsey,1 Stuart-Otis Z& Co. Washington, D. C., has been ap¬ grpup was; successful bidder for pointed motor coach sales manager; : v ' $2,740,000 equipment trust certifi¬ of the White Motor Co. He will have his offices in cates of the Western Maryland ■ It has been con¬ tinent? Did it equip¬ affirmative artificial export business and forcing prices up. an the importance of electing a a fairy tale. Can such a place as an present situation to conditions after World War I. the the of Zurich by bus from \ frame can present price situation to President Truman's eco¬ policies. Says inflation has been encouraged by Administration's liberal spending policies and that resulting tax burden is grossly excessive on all classes. Favors a reduction in Federal budget to $25 billions, and attacks foreign lending program as creating deposited suddenly . on of ; ZURICH, SWITZERLAND—Be¬ ing Republican Congress a nomic requiring great flexibility. heart Z : , Taft ascribes highly uncertain* are Senator from Ohio S. within American principles of liberty and justice, Senator program an abundance of food. Air travel * superintendent U. Asserting only Reports clothing and lA. F. McDougald, for several years : ". • 'Clarence M. Taylor, with the Electric Co. of Cleve¬ Executive of both Class A' and B stocks,v boosting the au¬ thorized A shares to 400,000 and B stock to 216,000. :>• *. ! •" land for 30 years, split for-one -■ < Lincoln j? i Greif Bros,, Cooperage Corp. stockholders have voted a fouri:t tinent. The fund. investment of the group •National"City Bank of Cleve¬ Other -members "Chronicle" Correspondent contrasts Swiss "Fairyland" with the remainder of the ruined and exhausted Con¬ reoffered at prices were Can Check Inflation * < / HON. ROBERT A. TAFT* Special Correspondent of the property. school of ment bonds Republican Congress a BRATTER By HERBERT M. land, and soon after the offering group won the issue on a bid of will be used for Only Europe district bonds of the City of Proceeds Thursday, October 24; 1946 CHRONICLE THE COMMERCIAL & FINANCIAL 2080 to the propriate to sound banking in economy. peacetime. Not only must this transition be gradual, but it must * and orderly. An address by Dr. Young be¬ also be. disciplined has taught us that fore Annual.Convention of Morris Experience Plan Bankers Association, Vir¬ stable banking operations are esresponsive ginia Beach, Va., Oct. 22, 1946. (Continued on page 2100) 164- Number 4536 Volume THE COMMERCIAL & FINANCIAL CHRONICLE index Economists See End of Price Inflation in 1947, Mild business recession expected by most to accompany ured decline in prices, with employment, not seriously affected. „ (which registers OPA ceil¬ ing, prices) but from greater as actual meas¬ current prices being paid in the market. ; General commodity prices will reach an early peak and then turn downward in the opinion of a majority-of the 72 non-government economists participating in a sur~£ —— : vey conducted by Thomas S. number qualified this statement Holden, President of F. W. Dodge by saying the drop would be less Corp., the findings of which were if measured from the official price J made public Oct. 19. rises than do those of the major¬ ity average of expected rises to the price peak is about 40 points.! As a general conclusion, it may be stated The minority of 12 who expect the price peak after the end of 1947 naturally expect larger price group.; The average of in¬ to the end of 1946 expected creases 2081 majority consider that inflation has price very nearly run its course, while the minority expect it to continue into 1948 or beyond. a commodity The 6 economists who refrained from specific answers to the by the minority is 10 points, the questions asked, cited uncertain¬ ties in the .foreign situation, do¬ mestic politics, government conrols, and union labor attitudes as reasons why no answers could be hazarded. The following participated the survey: Adolph Inc.); of G. Dr. v Abramson Eugene Economics, E. Rutgers (Continued (S.K.P. Agger tions, on page with" business corpora¬ financial versities : institutions, vv; ' - Fifty-three to of expected and occur recession to the the peak general before start price the end 1947, one expected it Within months,: while'12 expected'it 118 after the end of 1947. The ing six situation peak remain-^ the time to as the of when the current Y m commented on the price without giving specific answers ■ uni¬ research economic and organizations. v. ™ '■* * m&r INCHES MM JfjMk movement All but three of the economists VIILLIB^ who expect a price recession before the /end Of 1947 anticipated ■ ^ be reached. may the downswing in commodity prices to be accompanied by a re¬ , cession in business activity, only of the. 50 one. business recession though expects, such to assume .se- ' rious of proportions. - them Twenty-three characterize recession the coming 24 as of them "moderately serious." A-ma¬ jority (28 of the • 53) dov not exrjNpct .serious unemployment; i 9 as . expect unemployment of moder¬ seriousness and 12 expect se¬ ate rious unemployment. About half expect buyers' strikes, and about two-thirds expect inventory trou¬ bles and reduced business profits. ■ A "composite of the views ex- ■ pressed on the timing of the price and business recession follows: goods consumer would reach and turn-down .a during spring of 1947, building matearound the middle of next other durable goods in the year, ' secondhalf, of 1947. Eighteen of the economists expect the turn in goods prices before the end of 1946. With regard to dura¬ consumer tion of the expect downswing, two-thirds it " to last: less" than • 12 dt "t v m months in consumer good prices, 60%- expect less, than 12 months of downswing in building mate¬ rials prices, and 55% expect less than 12 months of declining prices in durable goods other than build- ing materials. , /.Pointing : - - Labor Statistics' index sale all : ■ prices stood of 128.4 at economists of Aug. on 24, asked were whole¬ commodities the to esti- ; mate the extent of such rise that figure time over they might antici¬ as pate by the end of 1946, the You make the out that the Bureau of the index and by reaches its Financial Weatt anticipated peak. V ■? Among the 53 anticipating a price peak before the end of 1947 the extent index of the to follows: rise in the general end of 1946 was anticipated a decline from the Aug. 24 figure (128.4), 8 anticipated zero increase over that figure, 28 ranging from 7 anticipated or . answers was crease. •':: to 9 rise rises points, and of 10 points average of all about 5 points the in: >'• :■. . On 2 a The more. anticipated \"v» ' \ ' ... • -V'" ._:-v ;• points the general index would from Aug. 24 to the antici¬ pated 1947 peak, the answers were follows: , all economic questions a meeting increase,, 7; in¬ ranging from 2 to 9 points, 16; increases from 10 to 15 points, 13; increases of more than 15 points, 10. The average of all the increases business, about ground! for all shades of affect the national public opinion are ♦.. majority opinion moment and the of the reflected that BEWARE OF "THEY SAY" welfare, : daily in the the Exchange offers this advice: At You, as a part of the American Thus, this financial market¬ investing public, help make place—one of great free the weather in this financial institutions—records the market. The Exchange itself, indicated was a i or ■> barometer-fashion, merely i of investors. Their ideas about records it. With regard to building mate¬ dicate from in a the smaller peak general percentage drop than would occur commodity prices. A on alleged "inside" tips. The grapevine will always let you down. vague rumors or ■ -little rials prices, 32 of 42 answers in¬ time is it safe investment decisions composite opinions of millions • no sensible to base your under 10 points. ■i through the facilities of this market, prevails. our To those who exercise their financial "vote" market quotations. no creases "•! election, provides the auestion of the number rise , the future of ■ of as A free market, like a free as 5 New York Stock Exchange Industries, (Department University);' Prof ;: The group polled includes eco¬ nomic consultants and economists connected in ' i 2121) ' 1 « . ■ ^ . . Man's Writers discuss such attributed ■ (1) Russia and fear of for visors—Selected Super¬ History Labor, of The — A Evolution Its tion It is 17, N. Y. — Paper quantity. 25c — France . struction • Bank and for the received of loan vanced of for stated purpose of the loan is to meet the cost of purchasing and importing into France certain equipment and ma¬ than coldly modernization. ■ It was announced in last week's issue of the "Chron¬ icle" a (p. 1995) that from a loan $500,000,000 request for by France the International Bank ;expected. 5 '/.*'■ " , was on.s ; , . jtionv of >• t h jfirst „li st /loan kets; the Bank will have to adjust its policy 1 to ^ those * conditions without fvhavirigi p&rticiilar > - e of : shMe: . applica¬ s annual t Problem < Board of Gov¬ the ' of ernors / > is i th<r Bank's .crediLpolicy to be decided upon by the management (the crucial; ivprpbjem '-^The meeting of the ruled partly ^ •\t'bwdit'siPoiicy^i^fe}^nts-v tions: and. the; f kr. Bank. Ernest H. Weinwurm psychology and are there¬ Why should k hyper-sensitive to maladthis particular stage be supposed justments which periodically A b?r,t Er Yan Court.. to have such outstanding impor¬ plague our economic system. These maladjustments are not always clearly discerned and almost tance. It is not so much—as many never universally agreed upon. Hence, in a politico-economic atmos¬ phere charged with confusion and^ vacillation, orderly switching or of the 1946'securities market..to, liquidation may induce additional date. The urge to sell, assuming, and often blind selling. Panic is at times stampede proportions, by Slater President and within rectors) t. montns. For the terms few next the included agreements will into as ((Continued : on page 2122); i Needed: Reform, of irrational fear is that the of little a unknown, what we of had. " With the postwar business boom still in the making; the absence of usual elements associated with severe price declines — inflated commodity prices, rampant specu¬ lation on borrowed money, swol¬ len inventories (see below), or dwindling consumer demand—has nevertheless had ratioriaLbegin-, a Constructionlndustry ning and must come to a - logical end. But the multiplicity of rea¬ sons generally ascribed for the the in is decline a measure mindvt upon, ( In ' restrictive - to. on page . , Asserting 'constructionindustry is costly and wasteful, subject to feasts and famines of seasonal and cyclical demand and to illegal Mr. RumI points out measures, progress in housing is disappointing. 7 Lays blame on Congressional delays, and calls for a thorough investigation lor stabilizing the construction industry^ • ?: . therefore order (Continued the in¬ , Reasons? •By BEARDSLEY RUML* Chairman of the Board, R. II. Macy & Co., Inc. of fact of tempo infringing and fancy vestment itself swift recent heightened the apparent mystery clarify. Says public works alone cannot effect stabilization, but should be a program for government regulation of 2121) reused in connection with industry^ Says this would foster competition and would be large factor in promoting prosperity the United States and throughout world. .1 e whole construction and lower costs, in SECURITIES ; be made 80 Nov. 1. 1946: on per $1000 bond '' 26.00 per 650 bond 23.75 per 1000 bond $16.25 *_______ Brpad Street BOUGHT _ _ (Greenfield_________ Kramon Development Lewis SOLD _______ Morris Macrid _ Maple Kissena QUOTED ★ v • Pennsylvania Building , Textile Realty J Governor Clinton Roosevelt Hotel, N. Y.__X.________ ____ 16.95 per 1130 bond 17.50 per 1000 bond 22.50 per 20.00 per 1000 bond 1000 bond 1000 bond 1000 bond 15.00 per 25.00 per ______ Madison ★ bonds will -"p"' Remsen A. M. real estate the on _ 6.93 per 12.00 per 346.50 iooo bond :K' bond 20.00 per 1000 m bond 25.00 per 1000 bond dustry whole Membart New York Stock Exchange Membert New York Curb Exchange 40 EXCHANGE PL, N .Y. Bell Teletype NY Dlgby 4-4950 1-953 Genessee*Valley Incorporates Fagan & Co. to Admit » Co., 41 BrOad Street, New York City, members of the New York Stock Exchange, will ' as a an struction. I want to make it clear that my attitude toward \with some /; thee construc¬ originally k inter- an admit Irving Herzfeld to partner¬ ship on Nov. 1. California & New York Hotel 2s Brooklyn Fox 3s Chariin 1958 Grant 1957 155 W. S. A. New Majestic 4s 1956 W. S. Units Bldgr. 2%s 1957 W. S. Hotel Lexington Units Hotel St. purveying of color¬ During the 20's, the government taught us to believe that public works might be used to help even from study a Beardsley and ± conservation works Ruml b 1 i c i p.u in element national fiscal as one policy, *An by Mr. Ruml be¬ Electrical Con¬ address fore the National tractors Association, Atlantic Cit^, out " ' . business cycle. But dur¬ illusionment use of 17, 1946. ... the ; ing the depression of the 20's, we came to have a profound dis¬ with respect to the public works as a means sustaining business activity. (Continued on page 2106) of r Hotel York Cuba C. 2s 6s 1959 W. S 1955 HELP WANTED Pittsburgh Hotels Common Roosevelt Hotel 5s " •! POSITIONS WANTED 1964 Savoy Plaza Class "A" George 4s 1950 East 1956 W. S. Incorporated Broadway Tel. BArclay 7-4880 OTHER CLASSIFIED ADS Savoy Plaza 3-6s 1956 42nd St. 3s Amott,Baker & Go. 150 EXbrook 8515 in sensational¬ interested in the for National Montgomery St., San Francisco 4 Tele. 8F 01 & 62 or ful anecdotes. policy, Comfton Hotels Statler New York Hotels 51 J. S. Strauss & Co. not ism fiscal N. J., Oct. W. S. Bldg.. 1st 4s 1945 Eastern Ambassador Real Estate Issues am OFFERINGS WANTED . Ambassador Hotel L. A. 5s '50 W. S. Beacon of perfectionism. "If remarks are critical, est in national rv. Trading Markets: £¥ ■ Fagan & ROCHESTER, N. Y.—Genessee Valley Securities Co.,. Powers Building, is now doing. business as a corporation. or of my wrong impression, I should be the first to want to change them.! I industry derived from the industry and problems is not one* of they -are not unfriendly. If they are incorrect or if they give a My'interest in is toward its hostility its- parts. tion recently from the hous¬ more ing crises (and^ its relation to cqn* respect to any of Association invited . and - Firm ' in¬ nor expert of SHASKAN & CO. not con¬ struction "11 West 42nd Street , on am Contractors meeting, it did not do so under any misapprehen¬ authority an The following interest distributions Court ★ I sion. We hear that: Electrical National the When to address this me REAL ESTATE • Di¬ Executive the . have and con- fore A. eral reconstruction may total subscrip¬ tion; publica-t types and circum¬ are assume—the question of de¬ veloping & Market tot the Bank's obligations.To be;;true, this is. an important matter.>But its solu^ "tion depends mainly/on the future situation on the main capital mar-? the .amounting to 20%. of their. accept we The for jt.r.i b.u.t i mathematical phe-\ Prices stances. and of nation a vestors of all terials required as part of a gen¬ plan As call member rare often manifold or be events: statutory -v. declines to a application requested that the lean be made to the Credit National, to be guaranteed by the French The ' nomenon, reflecting the hopes' and fears of over 15 million in¬ an- $500,000,000, to be ad¬ during the year 1947. The Government. the but The security -markets, more than ever today, t- are an intensely human, rather Recon- France -The World Bank has now entered the second and probably the' decisive chapter of its shorter history. This date is marked by three growth and progresses matterof-cOurse,. but regard faltering or-recession with superstitious application from Government Bank bonds eligible for trust. invest¬ be expected to insist that borrowers furnish maximum security in addition to the guarantees provided for in the Bank „apprehehsion. Development, an of obscure. ; nounced on Oct. 21 that the Bank ; had understood, . conceived Seeking Loan International i 1 y causes • Eugene Meyer, President of the • Charter. for booms and optimism are obvious and reasons e a s From Internaf'l Bank of projects built and goods purchased called upon to make World characteristic of American business and investment a common psychology that the ;V : by ;/y Lower — Holds segregation tiated. he remedied by more productivity Inc., 247 Park Avenue, New York rates in \ from loan proceeds is decisive issue, and advocates they should be used as collateral for those loans. Says state legislatures when ments may and bottlenecks. Our Time—Murray T. Quigg—Nation¬ al Industrial Conference Board, ' • Bank's credit policies presented Executive Director, will have to be implemented directions when actual loan contracts are being nego¬ in various i terms; (8) low rail rates in relation to operating costs; ? profligacy which characterized war effort, and situa¬ and cooperation of labor management. Sees better outlook due to removals of controls can on J. W. Beyen, Dutch of waste and Brief in Writer contends statement and and of By ERNEST II. WEINWURM (2) unsatisfactory labor conditions war; (9) foreign liquidation of securities; (10) marginless trading; (11) undigested new capital issues. Conclude present diffi¬ culties stem from political considerations and carry-over of a spirit reading list—In¬ Relations Section, Cali¬ fornia Institute of Technology, Pasadena 4, Calif.—Single copies complimentary — Quantity prices quoted upon request. Law Crucial Decisions , tion ment credit dustrial Banktraces S# as:' affecting productivity and profits; (3) OPA actions; (4) jconstruc-v bottlenecks; (5) transition from sellers7 to buyers' market; (6) increasing inventories at peak levels; (7) tightening of instal- § Bookshelf Relations * of stock market break causes Thursday, October 24, 194$ •> , 1 By ALBERT E. VAN COURT and AUGUSTUS SLATER : Of Gross, Van Court & Co., Los Angeles Industrial > V; • Reasons for Stock Market Breaks World Business . CHRONICLE THE COMMERCIAL & FINANCIAL 2082 ' 4 . k 9 ' SEE INSIDE BACK COVER New York 7, N. Y. Teletype NY 1-588 Sk® > Volume 164 Number 4536 THE COMMERCIAL & FINANCIAL CHRONICLE i LONDON, ENGLAND: (by Ca¬ )—-Wednesdays' London "Fi¬ ble nancial Times" reports in. financial London the failure of as the Monetary Fund a curiosity to whether International to announce its members' parities on Oct. 12 be¬ tokens difficulties and consequent > delay |n .the Fund's expected mencement com¬ of operations early The article states Manager Emile Gutt requested the parities within 30 days of Sept. 12. That zero hour has passed without public announcement of the next year,-: . par¬ ities filed with the Fund and the "Times", asks whether Mr. Gutt is experiencing difficulty in obtain¬ compliance. Calling the an¬ ing to this question not unim¬ portant the "times" cites the de¬ swer layed organization of * the Fund this summer, and says "procrast¬ ination over parities might post¬ actual pone business commencement beyond the of expected , early days of the hew year." The ; Fund's personnel, now in London,: when contacted by the "Chronicle's" fused to representative re¬ speak; for/quotation but indicated their clear opinion th,at London views just cited are the based inadequate understand¬ on ing of the Fund's Articles of Agreement. Naturally the fixing of parities in many instances poses great difficulty as was pointed out during the Conference. Bretton And the Woods Fund has 90 days from Sept. 12 to sweat the problem through. The Rubber -Trade members contracts to Association henceforth may buy sell or make physical rubber for delivery and for ship¬ commencing Jan. X, when ment the combined Rubber Committee allocation system ends thus fur¬ ther restoring normal marketing methods. The contracts, however, - are confinable to loose rqbber for packed or delivery, ■ into ware¬ house in sterling producing areas physical rubber 'for CIF or FOB shipment from sterling pro¬ ducing areas to consuming coun¬ tries, excepting the United King¬ dom^ Such shipments will be sub¬ ject to normal export licensing procedures and any non-sterling preceeds must be accounted for under Defense Finance Regula¬ or tions 3 The as between 1940 and 1942. for authorizing 1947 contracts now is to avoid foreign buyers sidestepping the London reason market. don Rubber hope traders in Stafford Sir Lon¬ Cripps' statement next Friday on the res¬ of free market dealings toration will clarify operators. prospects for hedge This advertisement appears of record only and is not, and is under no circumstances to be construed to be an offering • of this Capital Stock for sale or a solicitation of an offer to buy any of such Stock. The offering is made only, by the Prospectus* ' NEW ISSUE , } 100,000 Shares Arthur J. Altmeyer ' % r r- ,1 * ), ' " > s* ti" - <""<1 ' • Fowhes Brothers & Co.y Incorporated ' V Capital Stock - • P.ar Value $1.00 ; { address by Mr. Altmeyer before the Controllers Institute of America, New York City,- Sept. 16, 1946. ... October 21, 1946. may \ . Price $9,50 per share Copies of, the Prospectus Van •;»*An * - ; ' be obtained Trom the undersigned Alstyne, Noel & Co ^ - 1 2084 ; hearings have now been com¬ pleted so that holders of rail se¬ curities will be Many rail analysts who have been cautious, and even bearish, for.as long as a year have recently been inclined to adopt a more bullish attitude towards at least that section of the list representing roads which over a period of years have proven themselves funda¬ mentally sound. There obviously can not be at any time any real assurance that prices have seen their absolute bottoms. It is char¬ acteristic of security markets that they are regularly subject to extremes of pessimism as well as no declines the hand, question but that of the past few be can other the On optimism. there have been available to return as much dends the Thus, whether bottom has been not the or it seen is con¬ sidered in many quarters that the arrived at least to start time has on buying program. a of railroads with a Stocks profits of tory ■ ' his¬ back well with en¬ going into the last century and viable dividend records even dur¬ depression ing periods of severe & Paper 1st 5s, 1965 reduced Most are so to months 12 favorable. Fe, appears Such roads Chesapeake in verse their of influence Arden Farms of sentatives Marion Power Sliovel roads anticipating " traffic volume above previ¬ any peacetime peaks. Certainly unless industry in general is going ous to high¬ in 1947. tributing tor. A railroad ness can no con¬ fac¬ other busi¬ not be expected to oper¬ or any with faced be a serious and work strikes new wave of pages the outlook for production stop¬ is highly favorable and high pro¬ heavy freight This will be augmented duction rates volume. mean by movement of construction ma¬ terials The crops and shipment of bumper to markets here and abroad. high-cost replacements. MEMBERS Stock Railroad Bonds and Slocks I Exchange Broadway, New York 5,N. Y. — .. 231 So. LaSalle St., ' vC.'\ "■ * i Chicago 4, III. ^ r".,r ■■'■'y-iL vr \ It is es¬ within the next few now being over 25 years in service. There is great need for; new passenger and freight cars. Are the railroads to continue to operate with the same equipment until eventually it falls apart and we have no railroads? Or are they going to manage to operate with a - profit large enough to attract investor interest many and thus with the increased cap¬ ital so obtained permit replace¬ and improvements? V Need for Economy D. L. & W.-SVJ. & E. 4-6s 2042 Canada Southern 3% 61 York Stock * Broadway ting more'effectively than the old air-seasoning process. Further, it reduces the time necessary to ac¬ Exchange New York 6 Bell Teletype—NY 1-310 Telephone—DIgby 4-4933 Electric Motors Co. Howell proximately than 15 v Situations at All, Times rails help costs. Broad New York 4, N. complete arbitrage proposition on request profits discounted SUTRO BROS. & CO. EST- • costs, " . ■■■'>■ 1896 ever before. three to , the portation of the country is close to breaking down and where the government-owned roads are be¬ ing controlled and operated by the labor unions. And this brings final statement, namely, running the railroads. With an exception of a dozen, I don't want a penny invested in the remaining 20(1 me to my that the labor unions are Sleindeckor2# Years With N. Y. Hansealie Otto H. Steindecker, Assistant Vice-President of the New York Hanseatic Corporation, 120 Broad- .A', machines, With four times more can be laid manually and costs materially track than mainte¬ reduced. be laid in the same time Otto H. Steindecker may and motive power of today be effected by the installa¬ tie plates. An au¬ New York City, celebrated twentieth anniversary with Corporation on Oct. 21. He tendered a luncheon by his way, his the was , associates at the Bankers Club in honor of the occasion. 1955 - 5s, 1955 Mclaughlin, reuss & co Wall Street, New BOwllng Green-9-8120 BOND BROKERAGE SERVICE UNITED PUBLIC UTILITIES Specializing in Railroad Securities Common * Prospectus on request ONE WALL STREET NEW YORK S York 5 Tele. NY 1-724 L h. rothchild & Member of National Philadelphia Members New York Stock Exchange ISLAND AIRLINES* GETCHELL MINE Adams & Peck Hartford of Securities TEL. co. Association Dealers, Inc. 52 wall HAnover street 2-9072 be seen rail trans¬ „ can loads Telephone REctor 2-7340 LONG Boston . protection of ties from me¬ chanical damage, caused by the higher speeds and the heavier NATIONAL SKYWAYS 63 where The '120 BROADWAY, NEW YORK 5, N. Y. Trading Markets in— Ref. Mexico maintenance-of-way tion of larger Ref. 4s, in because of higher labor many nance Members New York Stock Exchange Illinois Central what this might mean can departments are using more power-operated machinery than •'.in¬ Teletype NY 1-1063 When issued profitable business, . When issued securities Y. Telephone BOwllng Green 9-6400 a of of track.. Railway Company RAILROAD STOCKS-BONDS Street use St. Louis-San Francisco Gulf, Mobile and Ohio Railroad Company 2S The longer-lived materials results in greater rigidity and permanence , . months to less hardened and to reduce high Denver & Rio Grande Western Railroad Co. i Partly GUARANTEED 1 End day. a maintenance Selected all of the railroad employees. complish the seasoning from ap¬ welded Harris-Seybold Co. ; , Stock to roads. ing method for'ties and timbers, checking and split¬ pflugfelder, bampton & rust New interest the railroads, an active managing avail - itself of all to up government ownership is likely to result. A fair example of six to which reduces Members continue to operate it is the railroads four savings in the new vapor season¬ '* in present management is to the years, from only real hope for con¬ tinued solvency of the railroads is a concerted campaign to reduce costs. We have examples of such >*•5 !*-!> Analyses On Request: interest cial If The leading Security and Commodity Exchs. 120 of rail¬ greater finan¬ their companies. be replaced . other and officials thousand locomotives will need to ments ' York New and If management does not fight for its rights to make and keep that timated . Ernst&Co. Directors roads should have a . In profitable oper¬ ations this year and least mod¬ at a ' higher rates in addition ate at a loss. Yet today, in the known and new methods of eco¬ operation. Furthermore, to the naturally progressively greatest period of peacetime rail¬ nomic must cooperate toward a way traffic, most of the railroads labor greater control over costs. Along with the prospect of fur¬ are operating at dangerously high fair relation between labor costs ther rate increases and the grad¬ costs and are crying for higher and freight and passenger rates; ual better control over expenses, freight rates which only postpone and, in addition, must find ways of encouraging thrift and respon¬ the railroads are believed by most the day of recovery. { analysts to be facing a period of The railroads, today, need many sibility for a full day's work by given to estimates by licity was of benefit is officials doubt the di¬ and ' Management's Responsibility erately that Pennsylvania and New York Cen¬ tral. Considerable less press pub¬ vide it. on the large who controls the rates must pro¬ of had ofsuch even other¬ rectors RogerW. Babson plates, finan¬ or part aggra¬ was hip! est in the rail¬ wise, rigidity the subject states that cial vated during the : on installation the roads, bv traditional lighted by the extremely bearish estimates made individually by Common & Preferred This first half of 1946 wage increases retroactive to the beginning of the year and mounting other costs not compen¬ sated for by any rate increases. Effective July 1 the roads have own. carriers, expected to continue. traditionally slow to are Great was the 1946 traffic first starts to decline. considerable publicity given to the dire earn¬ ings prospects depicted by repre¬ there of thority though the heavier It is not en- rails are not now to be installed, t i r e 1 y the will produce a savings per track fault of man- mile of $500 to $1,500 annually. But all these improvements cost a g e m e n t, although the money and where will the money lack of inter¬ be found? I fear that Uncle Sam. get expenses under control when freight rate the with is trend Railroads on connection half first the t govern m e n owners Earnings com¬ like 1945 months with with the are^ toward racing that railroad train making ray am on a Well, my first thought is that U. S. our railroads become consistently more favorable since the midyear. This the general sharp par¬ ing of all security prices the rail¬ roads have had a particular ad¬ 1927 being published I inspection of decided change to be Santa factors the As this is annual have Any such action would from is picture a on concerted campaign to a months. recent parisons and railroads enter better in earnings results for the few, been Babson, in commenting realistic and be market railroad should, on the basis of present prospects, be well able to give serious consideration to increased disbursements over the intermedi¬ Aside men there has Pacific Union and Northern as Ohio, & Mr. railroad situation, points out unless 1 > reduce costs, they are rac- v ^ ing toward government ownership. Sees need for physical im- g provement of lines, but expresses doubt that, unless rates are until -December. increased, needed capital can be obtained. Urges rail directors and believe that the officials have greater financial interest in their companies. grant a substantial part of the in¬ creases requested. Another favorable aspect of the important dividend rates to be in danger at the present time and there is probably no other of our major industries where the prospect of dividend increases over the next six By ROGER W. BABSON predictions of industry. { On the least at rail Challenge to Free Enterprise of the Commission will have a salutary psy¬ chological influence on the entire better grade rail list. gl Preferred pected Actually entirely. no longer almost daily the contrary, the market will probably soon begin to try and anticipate the freight rate action even though' the decision is not ex¬ appear hearings ■ for obviously Chicago Railways - reports any, that brought Cons. "A" 5s, be to is true. There reverse ate term. Abitibi Power i; if about were A presumably with press prices would appear to possibility that divi¬ eliminated or On their 7.5%. to faced doom the reflect outstanding bargains among the better grade dividend paying of 5.5% as such face months have uncovered a number stocks. Thursday, October 24, 1946 THE COMMERCIAL & FINANCIAL CHRONICLE ;t : n. y. c. 5 Tele. NY 1-1293 HANOVER 2-1355 TELETYPE NY 1-2158 Philadelphia Telephone — Lombard 9008 , v Sees THE COMMERCIAL & FINANCIAL CHRONICLE Number 4536 Volume 164 National Buyers' Market Imminent predicts an increase in production exceeding demand if V5 prices and wages remain high and productivity of labor increases. Johnston, Wolkiser Transportation Policy Dr. Nadler ; 2085 By DONALD D. CONN* Executive Vice-President, Transportation Association At Distributors Group of America The picture of the United States at the economic crossroads during the next few months, with a prediction of an end to the present boom within that® period, was will drawn business outlook. by Dr. Nad¬ Marcus the Central the and strict Trust N of the other f with University, to of members the Factors and Or. Marcus Nadler D i Finance is i v the of o n and more less or wages their at somewhat present follows: as production is bound to increase very rapidly and soon the present sellers' mar¬ ket will be converted into a buy¬ < 1 ; , 44 "This applies particularly to soft goods (perishables, clothing, etc.)," he said, "where production has been at a': high level and where the accumulated demand is not particularly great. A large portion of the family income, par¬ ticularly those in the middle and lower income groups, has to be used for food. As soon as the supply of durable goods increases, there will be a shift in purchases from soft to hard Dr. said of recession in the not distant a that the financial outlook for the country thesupremof state;> the other, the doc¬ trine of choice bert B. such have Mr. Adams Sixth Street. was pre¬ viously with the First California Co. Mr. More were & Co.; Dofflemyre and Mr. with Nelson Douglass Mr. Kent with Walston, Hoffman & Goodwin. ' . Conn went a the under Also connected with the great instrument a 1 of government that the creation of to ||j;; By JEROME and S. JAY LEVY New Economic total available goods are justly divided among workers. They there- « fore recommend - worker can technique of "Job Evaluation" be utilized so each be paid in proportion to his contribution to production. | Specific proposals : are listed for accomplishing such evaluation, of development of a method to assure fair wages that will eliminate the need for strikes and lockouts and which will be new women. hearts of Yet, for these many years Minnesota services new tant general been elected ment. and V LOS John with direct charge of all sales person¬ nel and sales activities in the field. GARY, by Mr. Conn before Conference on Distribu¬ tion, Boston, Mass., Oct. 14, 1946. IND. — ins T. with was Maxwell, Marshall vv ;• past held several years Congress hearings numerous on labor-management proposals. A great many magazine and news¬ paper articles and radio discus¬ sions have dealt with this prob¬ Holley and Jeffers iWith Hoffman ' (Special LOS to The Financial ANGELES, Luther R. Jeffers have Holley lem. But no acceptable plan has been evolved. Because wages is solution - of economic problem, its be should derived order to promote the South Holley unions They that for soon | v collective bargaining in it¬ bring higher wages working conditions "l» with ties business. and Adams-Fastnow ' i v 1 ''" i "" ' •' r4 * C + from and better & Co. Mr. Maxwell, 44 political found these weapons in the strike and the picket line. These weap¬ obligated to assure its just and efficient operation. Since we are also living in a democracy, the under ons power gradually laws our as won Common Stock acceptance in rights guaranteed political democratic our Price $4.25 Per Share system. With the strike and the economic measures adopted must Inc. of industry. Labor principles of our capitalist system. To hold otherwise would be taking the position that a gov¬ ernment accepting a system is not the picket ' also be in accord with our demo¬ line cratic to realize many of their demands for higher wages, shorter hours, principles. From the beginning of our indus¬ the worker has been struggling against low money wages, unsatisfactory working conditions, and unjust treatment by his employer. At first the pub¬ trial growth lic attitude was that labor-man¬ agement relations were solely an affair between each concern and its employees and did not call for the workers have been '-As ..' able '■ overtime pay, the elimination speedup methods, restrictions the use of shop, and Labor, able to * i'1 1 ' '»«i- ■ ' "J , • • 1 . . . - »•.»'* ; •. *..*•'• .,**' 4' '• / ;•*£; f -i ' •, 4 .•••'v\.'/•/ t John J. O'Kane, Jr. & Co. equipment, the closed so forth. however, has not been secure contention ment is >- of on * its ' i''*' the that acceptance of the govern¬ obligated to assure every worker the opportunity of a job. (Continued on page 2088) * > 42 Broadway, New York (4), N. Y. Dlgby 4-6320 4 Teletype NY 1-1525 V Jeffers Marshall j 44 Konga International, Additional power or weapons was needed to offset the financial and Street. with Hill, Richards & Co. and Barbour, 50,000 Shares ""r E. associated Spring Smith their wel¬ organized into collective bargaining. found out, however, — James previously was Broadway to engage in the securi¬ workers Chronicle) CALIF. Walston, Hoffman & Good¬ self would not , the" determination an In and become Collective Bargaining Not Enough fare "4:44 ".V. ■ Dwyer has opened offices at 522 J " C. associated & Co., 210 West Street, members of the Angeles Stock Exchange. Mr. Co. V- & Mr. William — Fairman win,? 550 W. T. Dwyer Opens Herbert was formerly with Wal¬ ston, Hoffman & Goodwin and prior thereto was a partner in Thomas Kemp & Co. Mr. Hudg¬ with they and Dewar a capacities Dewar Seventh Los has manager, ANGELES, CALIF. M. Hudgins have become assis¬ since 1934 has been named gener¬ al sales manager. He will be in have taken it too much for grant¬ ed. Too many have failed to heed < Dewar & Hudgins with Fairman&Go. record business. sales as a special advisor German industry and Govern¬ acceptable to labor, management,^ public is one of our most' government action. It was a pe¬ vital domestic problems. During riod of extreme individualism. the western ; and the has and . Clay in Berlin on Grady Clark who had served in and men Ripley His ter¬ department various sales executive enterprise is anchored deep in the Harriman States and Europe. Dr. Wolkiser was on the staff of Lt. General Di¬ Vice-President of the company. Mr. Moore will be the administrative and executive officer of the sales department. farm, la¬ bor and business leaders, indi¬ vidually and in gatherings. I can emphasize without fear of con¬ Boston The a Clyde J. Moore, former *An address under Government aegis. — more recently headed the company's Sales Department. a thousands with Michigan. nesota, ac¬ portation problem in rural areas, small towns, and cities. I have vate Pointing out higher pay does not mean increased purchasing power, economists maintain real function of wages should be assurance nois, with its expanding pace volume of this tradiction that this system of pri¬ 4 Library^- keep investment discussed and debated the trans¬ with been ritory will include northern Illi¬ announced the promotion of three members of its executive staff and half million miles of travel about this country. I have met and with Syndicate MINNEAPOLIS, MINN. now past decade I have cumulated Are Labor-Management Relations Based on Economic Principles? ing rectors of Investors Syndicate, in¬ ternational investment company, The Background the Army war associated was & Co. from 1933 to 1941. system, Robert L. Smith, Jr., Vicehighest living standards ever en¬ President, has been named head joyed by the masses of any race', of the new department designated not only can endure but can be as "Conservation, Research and adapted to the needs of an Mr. over¬ Education." Smith, former charging economy. Securities Commissioner of Min¬ In the the Kidder, Peabody & Co. after hav¬ which has given to its people the new branch will be Walter Glerlich. i must during Elevates Three individual are Major in a previously Investors the liberty and freedom. The moti¬ vating force, by which these prin¬ ciples 5 are guaranteed to the demonstrate Chamber of Building to 0*u contract form—the Constitution. The. prime I objectives of this tions Merritt & Co., Inc. has opened Commerce u - LOS ANGELES, CALIF.—King office in the n lengths of laying out their plan in American people, is the system of private enterprise. We who believe in our institu¬ King Merritl Opens Los Angeles Branch branch de- American idea Donald D. u with Buckley Brothers, 530 West of signed the associated become re¬ import¬ who men James D. Kent and Edward myre, as that the ance Chronicle) CALIF.—Al- Adams, Ralph L. Doffle- E; More was as Forces Air Dr. Wolkiser, with a territory public and private agencies; to the use of government capital in di¬ comprising southern Illinois, most of Indiana and rect competition with private cap¬ Missouri, and in¬ ital, and to the rise of predatory cluding Cincinnati, will make his in St. Louis. He political machines.: In too many headquarters is well known as a lecturer places self-interest has been ason economics in the grad¬ (Continued on page 2107) uate division of Brooklyn Col¬ lege and as a- consulting econ¬ omist for a number of large com¬ panies. He is a frequent contrib¬ utor to leading financial and eco¬ nomic journals both in the United light of garded Group Securities, Johnston, who will make headquarters in Chicago, served vidual upon- government instead of upon himself; to the disregard of the line between functions of history, the Buckley in Los Angeles ANGELES, the supremacy of the individual. depression." (Special to Tar Financial his danger-signals that threaten its" very existence. s':4 ;4.vX 44.4 I refer,, particularly, to the growing dependence of the indi¬ the has Distributors one Mr. Y / Managers by of tl\e country's largest mutual investment funds. the on In the LOS Inc., doctrine acy activity and to prevent the reces¬ management of Paul J. Koughan. goods." also Nadler the Four Join Staff of that period ers'market, men, remain Business activity will be at a high level for the next few months. Within one of the shares of contemplating forces that might order the political affairs of the choice may be narrowed down to two: On the one hand, in level," Dr. Nadler predicted, "and productivity of labor in¬ creases, then the business pattern be the on - / announced Group, Incorporated, 63 Wall Street, New York City, sponsors In the pattern of busi¬ of relative stability sion from becoming a the will permitting private ownership to survive. future, then, the policy of the monetary authorities will un¬ doubtedly be to stimulate business New York City on Oct. 21. prices - District as been would lead to socialism. Complains carriers are sub¬ jected to conflicting restrictive statutes and that government is .supplying capital to compete with private transportation. Urges a Congressional reappraisal of transportation policy with view to Federa¬ tion of Jewish Philanthropies "If is If, purposes. kiser movement . use hand, ness York e w • at their disposal to re¬ of bank credit for means Company, and speculative o - "is one of boom and bust, then, obviously, the monetary au¬ thorities will endeavor with all Hanover Bank Finance ;-4 the on said, of Professor primarily 6 , "If the pattern for business," he ler, consulting economist depend appointment of Frederick W. Johnston and Arthur W. Wol¬ Asserting transportation regulation is drifting toward government ownership, Mr. Conn holds there exists program tdtdiscredit pri¬ vate enterprise by focusing attack on carriers. Says success of this A I •ViV-i'".1 Co. & was Co. 2086 THE COMMERCIAL & FINANCIAL CHRONICLE iestimated. Support the of Thursday, October 24, 194<? They point to-periods readjustment such as (experiencing as offering (investment opportunities., RED CROSS! . ' , t LOW PRICED1 By BRUCE WILLIAMS Competition With I/// / It is / 1 < , Capital "K" a ^ , our painful duty to report that a great deal of good, bad and indifferent investment company literature is not being read by deal¬ ers these days. The reason? Simply that the output has reachedthe point of diminishing returns. Whereas, a few years ago a lot of investment company literature went unopened in the waste basket because of lack of dealers of GROUP SECURITIES, Inc. and interest, today it is finding its salesmen physically able current volume to assimilate output.' ^ % v- - , YOUR INVESTMENT DEALER OR Distributors Group, Incorporated 63 Wall Street New York 5, • N. Y. fund , . Story From here on, mutual . • With Selected who place the ac¬ cent on quality rather than quan¬ tity should get the most out of recent their the sponsors sales And, as promotional Shares can- national Securities Series,, dollars. ^fallowing | sons; Sept. Industrial A >■ .< BOND SERIES ! has sponsor direct zation in the field'. the sales only organi¬ Devoted to the Prospectus upon request from your investment dealer or < NATIONAL SECURITIES £ RESEARCH CORPORATION which have 120 BROADWAY 55.28 are gradually Essentially correct the of 48.42 —12.4 Z : 5.4 + tant companies. . . / ... We firKb ferreds upon careful the second half. A and to meet readjust 51.86 12.65 —26.9 13.45 + still-soaring liv¬ holdings justment. from Now is the time to use.* than justify brokerage costs in making new purchases."—From ' to two major factors: have a ence on act expires. " It restraining strong > labor v demands should influ¬ in the early part of 1947. Labor produc¬ tivity will probably begin to im¬ prove. . "Our if materialize,, will be attrib¬ most carefully se¬ earnings Strid prospective results for jahead. ..a reasonable Also, ;the average stock now affords a that come; investors ones these that can are be the are r I are Vestment* oppor tunity." common essential t i mat e d> distributions es to. holders, Preferred stock :series,ta $0.16» Stock series 0.07 Selected groups series-_ Investors Stock Fund—A divL* share tap-: proximately 18 cents out of net' a recent analysis* by Manhattan Re¬ search Associates published in J he investment income and 20 from jOctober issue of the New York. fetter, * u" realized security . and Manhattan Bon Fund—An Or¬ COMMONWEALTH ari INVESTMENT 29 cents per. share for COMPANY 38 Prospectus upon request m with Redeemable Shares ; Z. ! Z'P/Z: i GENERAL DISTRIBUTORS , 1 NORTH AMERICAN SECURITIES CO, Lord, Abbett & Co. INCORPORATED New S. N.Y York — Chicago Los 2500 Ru«» Building . . San Francisco 4, California / 8 cents to share a holders of he obtained Prospectus or . your may be obtained from iocal investment dealer, or Keystone Company per* share payable Oct 25, * article' do not necessarily.. at-anyv. time *coincide with Chronicle. They those■ of are presented of the author only.\ Congress Street, Boston 9, Mass. THE PARKER CORPORATION ONE COURT STREET. BOSTON 8, MASS. request from Principal Underwriter. - INVESTORS SYNDICATE R. E. / > F on record / * Prospectus total of payable pet, 1946, to holders, of record: Oct 15; / [The views expressed in this,* those Angeles per Dividend Shares—A dividend of ; 'prospectus; on Request cents Oct. 5. * :l* Extraordinary Distribution of 15;; 1946; Diversified Investment Fund . i ey stone 50 cents/ profits) payable Oct. 28, 1946, to stock of record Oct. 15. CHICAGO of Boston : - 0.02 dend* of 38; centsper; SHARES OF CAPITAL STOCK OF The I of FecOrdi Qct. 31; reasons From — |/l Dividends* -j . payable Nov.: 15, 1946, yield which is strong * r National Trust Funds—The foLt lowing period for; concludingthatthis; is; an For the only measured opinion, . 26/1946.;/ •most attractive against high grade bond yields of 2l/e% to 3%. These, our 10,/ f. Dividend Shares revised Prospectuses dated Sept. a period re¬ '- general, have declined to his¬ •current in indicate studies considerations—they Senate, for ; Selected American Shares vised Prospectuses dated Oct. 1946. V ; extended • in the an torically low levels' agaihst both profits and higher dividends. of anticipate OP A earnings results will be reassuring. The expected change control to in This will probably lead discard of OPA long be¬ the sonable- Prospectuses dated, Sept, 25, 1946;,! rea¬ 6.3 in control of the House of Repre¬ sentatives and the possible change Third' and !NCO«K5»AT£0 map tax., a dinary Distribution of 9 cents and HUGHW. LONG & CO. local investment dealer usually^ short-term losses; to- offset taxes; oi}-previous sho^trterm; or'long-" term capital gains,: The tax sav¬ ings to many investors will jmorri/ poor earn¬ stock-prices.- We believe it is ,V pour ' ' , of/securities; advancing the; date of such read-f lected companies,; Common stocks, and labor. Prospectus from your Investment Dealer or Prospectus iri-f standpoint at the end of the year. The current situation necessitates y^ ■earnings The trend of developments should translate | this; into high fears. causes ORD ABBEII GROUP I from is* stocks . "Owners long list of 2.8 37.90 • OF INVESTING COMPANIES c ustockan object, present ; at common ing costs. checking; with good 2.8 103.08 Shares, Inc. STREET, NEW YORK one attractive and helps the vestor demonstrat¬ are companies with fair to A ANGUfi thing, very American Business 10*. individual ti.ve.'For prices, the rate; of return available1 on many issues of bonds, pre- .v. ing the traditional American in¬ genuity by adjusting costs and prices to show a reasonable profit. Investors Int. 48 WAIL the. customer's • — 64.36 fourth these business depression. To an¬ swer this question, with confi¬ dence we have made extensive checks with executives of impor¬ a period of active business and good quarter the vestment program in the light of the current status; of accounts and the threshold — of high production levels is still before us for some time; to these Fundamental A: ... opinion, forces are al¬ ready beginning to operate which will gradually clarify the confu¬ our . 0.1% — 106.04 to averages and investors many on practical ings'/^lier dhis For 62.53 fore uthe sion - 34.78 rAarket term outlook for business. / ... 33.01 the decline of about 20 % in stock "In are customer's" in-* va revised.. uted " \ caused coming into focus. they all have to do with the short- New York 5, N. Y. We 1946^ the DowStock Average 174,09 174.29 Stock Average-.-.-:— Reassuring Earnings foreseen fears we - unusual opportu¬ an review on as Dow-Jones Defaulted Rail Bond Average SELECTED AMERICAN SHARES, INC.- "The 27, 174.09? at Dow-Jones Industrial Stock Average Dojv-Jbnes Railroad Stock Average Dow-Jones Utility Priced at Market if to the October issue, of the National* same, price substantially better earnings 'dur/ Trust Funds Survey, Aug, 3T, 1945/a little ling the balance of the year. Earn¬ over a year ago, on which day the. ings of a large fUM- ' New Prospectuses; A" majority of wellIndustrials closed at 174.29. / Keystone* Custodian ' Funds re¬ imanaged companies are now at or "We believe you will find it in¬ vised General Prospectuses dated' teresting to observe what has'hap¬ japproaching satisfactory levels. Sept. 30, 1946. pened to various types of invest¬ I "In summary, we believe that Wellington Fund revised Pros¬ ments in this period; ;the-investment outlook is more fa¬ pectuses dated Oct. 15,1946. 8-31-45 9-27-4(1 % Chgs. vorable than, suggested By, current i Manhattan Bond: Fund, level Dow-Jone& Combined 65 Stock Average. Dow-Jones 40 Bond Average Shares . nity purposes, this is the Syndicate's monthly house organ, "Broadcaster," is unique among investment com¬ pany publications, primarily be¬ this of invest-^ - ment dealer stock that most companies Before," presents, earnings for the first half of- 1946 pointed eompariexpect to report good earnings for / "On cause "When entitled, Jones nation-wide a Selected Ameri¬ on still be the best Investors prices has caused to ask Were Here Once always where competition "Broadcaster*9,. of the Investments Co.,. in memo closed One decline U in severe in most industries Moral a is keen, "quality in quantity" will answer. "The / possibilities. The present situation" gives the conscientious individual That, undoubtedly, is the price intensified competition. All investment company literature is better today—much of it so good that it only needs, to be used to get results. A PROSPECTUS ON REQUEST FROM there because InpestmentjO pportunity" r '[ in those security groups designed / for both income and appreciation';, salesmen, and consist¬ ^/'Industry continues .to operate under many handicaps. There are ing largely of contributions from! many governmental regulations, them, -this "magazine" is an ex¬ including OPA price controls. cellent example of first class sales Nevertheless, good (managements promotion. \ the of v>/* way not^ are "Ain /• • may use the October Investment Report of Distributors Groups' In¬ . li Readjust be~a good time to;/ current prices as a pivot point Z for averaging the cost of holdings-/ sound vestment Research D epar tm to '/ "This f—From « '* Time we. are MACGREGOR, President Minneapolis, Minnesota . .1 . ... REPRESENTATIVES IN- THE PRINCIPAL CITIES OF THE UNITED STATES the as " - r * Volume 164 THE COMMERCIAL & FINANCIAL CHRONICLE Number 4536 to draw, definite conclusions on the future its effects ori the money markets. \ ... "Our 1" • ' Reporter Bj> JOnN T. ' Thef announcement that Governments" on CinPFE^DAI,E, JR.' g redemption while others that date. Nov. on . would not be aS" large" as $2,000,000,000' no retirements at all1 on' 1 believed' that' there' might be Again there were those who expected that the Treasury wbdld continue'tO" redeem as large amounts as possible of the matur¬ ing certificates; The' redemption of these certificates on Nov. I ; . . . . . . will reduce' war loan accounts to the point Where it will take few mote of these cash repayments of ortl'y a maturing debt to eliminate the reserve free accounts from the banking system. The sharp decline in the equity markets and the Uncertainties' that seem to be develop¬ ing in the economic picture, apparently are not yet significant enough to bring about any alterations in the plans of the monetary author¬ . ities: . 7 loans, and Byrd Henderson Pres. ' With the elimination of certain price controls and others to be well as the likely ending of wage con¬ trols, there is concern in financial quarters aS' to what' effect this will have 011 economic conditions. ' This will depend to a very considerable extent on" the course of taken off in the near * $2,000,000,000 of the Nov. 1 cer-fificates will be paid Off in cash means a continuation of the Treas¬ ury debt retirement' program. i There" were some who felt that the cash -7 WATCHING about . of bank course . . future, Byrd E. Henderson, President of . . Household Finance' Corporation, . commodity prices, which have shown" a; declining ttend. If this trend" should continue for a time and4 then level off and improve somewhat, it- is believed that the . . . dangers of a4 boom and' bust cycle will5 be greatly lessened. A downward trend in prices and a? business recession would no doubt effect' some' changes in Treasury .policy.- .•> It would probably mean . . . borrowing by the government to retire bank-held bonds, since the inflationary psychology .would seem to be pretty well dissipated by such action of prices and business. no . ■ .• . - : The government securities markets, with the Treasury not 1 likely to be seeking funds should improve; which5 should mean' -better prices for outstanding obligations.. 1 •••!'".* . . I •good Market1 , Switzerland and U. S. . The government bond'market has been displaying a good tone, with some issues buoyant enough to have carried them above recent trading'areas.. Byrd Conclude Trade Agreement The demand for the lbnger restricted issues as well eligibles has come from banks, CMGUS agrees Oil pact for imports and exports between U. S. insurance'companies and dealers. Although the interest in the Zone and Switzerland. Great market has not been too large it has been sufficient to mOVe priced cooperation, and implementation' of ahead, and at the same time clean up some of the obligations that 77 increased5 trade, fa anticipated; < have been waiting for somewhat improved levels to be liquidated;.!., LONDON, EN GLAND—It has been announced; that the5 Dele¬ There also5 seems to he a irbed undertone; with sizable orders gation on behalf of the Swiss Government and the representatives reported for specific issues oil the' bid side-of the market or a) of OMGUS held a conference in Berlin to discuss the resumption of thirty-second or so1under those levels... ; TheTechnical position? trade between the U. S. Zone: of Occupation and Switzerland and of the market stili improves^ as bonds We beliig taken have come to an» understanding. When the machinery: of bizonal perina-j nentlyout of the market/. J operation of the British and U. S. Zones is completed certain alter¬ Although1 certain institufiohal investors in some instances are ations in this understanding will<$mot yet > attracted tov the government bond market', in an important become necessary. The text of the confirmation of the opening ■way, iMs believed4 by many mohey market experts that there will be understanding follows :> of the credit. At the same change in this attitude in thd not* too distant future. : tint'ej the! Swiss ihiporter Will X, Exports and Imports : be requested5 to produce a WARNINGS 1. Procedure regarding exports to i certificate stating .that the The; action of the6 regulatory: authorities, particularly those in Switzerland: Division; of Commerce in ihe\ Savings5 bank field,, in5 calling attention in no uncertain terms to Berne approves of the t'ransa. OMGUS is at present the ex¬ what happened in the 1930's> according to reports, may have an im¬ clusive aetiott. Theexporter of' goods statement; of portant bearing ort the investment policies of these institutions. from1 the U. S. Zone of Oc* certification«( will be forAt ther fecenf convention of thb New York State Savings. Banks in Warded' by the Division * of cupation. Therefore Swiss -Quebec,' foF example,- attention} was* directed' to-past experience |of Commerce ■ in impoi^er^pLsuch goods miist Berne , - to real-estate mortgages that werd based on inflated values. Like¬ OMGUS through channels: contact the Trade and Coih-' wise,. it was1 statedr that the Obrrent unfavorable, trend of railroad merce Branch of OMGUS; ;As soon as OMGtJS is in earnings' ihdicates that several1 of- these obligations may be removed possession of the aforemen¬ throiigh official' channel's for irom the legal5 list in the* not distant future. tioned two the as Of Small Loan Ass'n as . , later maturities of the bank • . . . E. Hendfersort' has been elected President of the American Loan of Association" Companies at the of Small convention a Association held at the Hotel Commodore City. The Association is the only in New York national trade association Of small loan companies and has over 2',000 memberships in the U. S. . * , . — ... . , , P. W. Brooks Celebrate , . ' ^ ■ - , . . . Fortieth Inc., 115 City, celebrated' . ing of the firm at Harvard thirty These word's bf caution4 trom< the authorities* seem1 to* mean' that they are' in' favor, of a; more conservative trend in the in-: vestment of savings bank funds. United States Government 7 ; " obligations, as a' reSult Of thik attitude on the part of the regibr i latorV authorities, will most likely be ak more favored source W 7. . . . the placing of savings bank monies until ttoejte is clarification of the economic situation. ♦ . particularly the' longer OMGUS when' business correspondence by mail' of a non-trarisaction'al' character; is permitted between Swiss and larger city commercial bunks,- there has been some porter open acquisition by on di¬ c.5 The final conclusion5 an irrevocable credit in* favor providing The floating supply of these securities lias been cut down sharply in recent weeks and it is reported? that the holdings of government agencies in some of these issues that were' available for sale have been pretty well liquidated/ , . • ,■ conclude the for of 2. "take bank ;; necessary OMGUS with the Swiss Na¬ through sales to modest proportions. There is a* good demand ^reported for the? 2%s due 1960/65 as well as the 2%s dUe 1950/59j The; bank will issuing the credit transmit to OMGUS . through official channels prodedure' dinner at the of the' attended Officers of some were Daniel will foreign securities before H, is now a registered World' War representative and associated' with Edward A. Viner and Co;, IT Wall OMGUS is at - imports . present the importer of goods New York Curb . . peak and will tend to level off from here. J others who are of the /v are . pation. Therefore OMGUS of goods which iv desires to Jersey, which is the manufactur¬ ing affiliate of the International • from' Switzerland,!. Telephone and Telegraph Corp. in (Continued' on page 2089) ^ the United States. 7:77 import about There are opinion that commercial loans will continue to advdnhc,. with the largest demUnd from'now on (A Delaware' Cdirpor atiori)" coming from the heavy goods industries. The year has been showing trial demand an and increase €biriittdriv Stoick business loans for substantial very expansion of mope agricultural ib ventories. business /. loans., since the* beginning of the with reporting member (Par Value 500 Per Share) banks than 29% in commercial, indus¬ ... borrowings considerable A part of this Price $1.50" Per Share has been* to finance larger in¬ i i.l-V (With Warrants) ? . While it' is likely that there will be some slowing down of in¬ • . ventory loans in the consumers' goods industries it is believed that "thefe will finance be increases Inventory loans. offset to loans working indicate what considerable extent a '-"V. ■;'.!"{• V; .• for capital any to and . . . 42 Broadway New York seems, largely by the trend of commodity prices and activity. these ... trends As yet' there will be. . .. . are not sufficient data Therefore, it is quite likely that some time will have to elapse before it will be possible' v.-. Frcink C. Moore & Co. decrease in The demand for loans in the future, it ... determined the level of business to term expansion of plant facilities in the heavy goods industries. This would' probably -Will be in October 22, 1946 other work future trend Some in the financial district believe that these loans and in the principal cities throughout the United States, and Will keep the Division of abroad, and during the war : he Commerce in Berne informed worked for the Federal Telephone of the6 kinds and' quantities and1 Radio Corp:, Newark, New into-the U. Sv. Zone of Occu¬ t the principal exchanges. During his absence from Wall Street, Mr. Dkvis did publicity of commercial loans which have been making new highs each week. , • Daniel L. Dhvis, who for many traded in1 foreign exchange ahd 199,000 Shares rat their > Edwaid A. Vhen 6a. 7 XQAN TREND to be'differences of opinion, over the the Davis Is Wife . seem cere¬ of guests at the dinner. the demand for the partially exempt issues will continue as long as -the tax-free yield remains favorable and there are no changes in income taxes. .-. There Brooks corporations which have recehtly been financed by the Brooks firm of the intermediate-term isSues. coming in for considera¬ The opinion now held by bank investment officers is that . the years . of process- case regarding exclusive to tional Bank in U. S. dollars. same' from Switzerland:6 7 7 The' apply in the Procedure OMGUS1 payment a ing> of raW • materials; or semi-manufactured products Street, New York City, members supplied by Swiss54 firms. ;s of the New York Stock Exchange, the credit of the account of Savings banks and insurance companies are he longer important holders Of those" bonds since* their positions have been-brought dOWn . and Steps* for delivery of goods according to the" terms of the'" German1 an* agreement is reached, OMGUS will re¬ quest the Swiss importer id . . will Co., York Approximately members organization mony. New contract With the Swiss im¬ b. If and when the medium-sized banks in the out-of-town areas.... . and of contracts will in any case be negotiated by OMBUS. ma¬ maturities of the eligible taxable obligations. . ; . Although- the pre¬ mium; is Substantial and* most of the demand has come from: the . If . The partially exempt obligations, tion. contracts. tions may be carried turities MVebeenshowihg an Mproved trend4 and despite recent price advances still give U. better tax free return than comparable some of rectly. PARTlfA^ EXEATS INF DEMAND with document's, inquiry; and for' negotiation •'firms, preliminary negotia¬ 77:77 contract.,;777W7:::77,:w77j » . Club; . ;; Broadway, on Oct.; 1!8 the anniversary of the found¬ fortieth , . Anniversary Members of P. W. Brooks & Euler & Co. 1518 Walnut Street Philadelphia JoV THE COMMERCIAL « FINANCIAL CHRONICLE $470,564,000, whicfc gives a ratio slightly in excess of two. This is conservative and also indi¬ cates that the fire insurance com¬ very Bank and Insurance Stocks By E. This Week The assets fire of 19342 lustrate,, 193872 This secular trend is still under has many years and much distance to go, and will presumably be reflected in the long-term market action of fire insur¬ yyay, apparently ance stocks. This situation should appeal particularly Visioned investor, and also to the $>■ investor who is interested in the than medium tebm outlook, which like- favorable. Currently, representative fire insurance stocks are temporarily ^ and 1928 . ; which year aggregates clusive. 131,000 :: 108,989 v 108,989 ; 111,489 1936— — '— —— —, 1939——————-1——-: table study. the total 366,295 341,943 ;370,126 367,093 377,737 >327,141 333,264 # 34,659 228,579 303,886 298,341 35,093 262,772 241,576 275,337 249,054 247,785 •250,220 mium nevertheless 33,636 397,870 % 33,667 726,069 ; 438,024 31,570 823,292 410,039, principles of 32,174 The purpose of our economic sys¬ tem; can be discovered from the 118,900 146,489 250.2% little a 21 25.9% 58.4% respective extent an that stered by which explains it had to transfers from the drop be latter from $162,755,000 in 1931 to $108,989,000 in 1932; Capital has since steadily increased to its present: figure of $146,489,000 (still below 1931), while surplus has expanded to a new peak. Un¬ earned premiums and premium volume also- since steadily a declined, but climbed/\ have / / The. peak in dividend payments was in 1931; but in 1932 they were cut 32.5%. It is significant, how¬ ever, that not one. of the 21 fire companies passed each paid its dividend, dividends and maintained its record for longev¬ ity of dividend payments. In each year dividends were ex¬ earnings, which aggregated $49,- one amply covered by net investment income alone, and even in 1930 610,000 in 1945 against $28,711,000 and 72.5%. 1932, losses when underwriting incurred, total net operating profits provided a com¬ It is of interest to observe what were fortable cushion. The rapid re¬ of the insurance companies from the depression is very strik¬ ing. ' covery Comparison and Analysis functions of workers • Worker's Function Is Production It is the function of the worker to produce goods. To that end devotes his productive assets, bol¬ capital, of the our mechanics, and economic system. and investors. break, sur¬ plus shrunk rapidly and to such operating in 1926, an increase of 1 With the stock market are within the > It seems clear from policy-holders today are / very much better protected than they were in the pre-1929 period. In 1926 the policyholders' surplus of the 21 companies aggregated $344,066,000 and net premiums City Banks; Circular on examina¬ tion of the figures presented that 19 New York : an Request . Laird, Bissell & Meeds ■Member New York Stock written $337,586,000* resulting in ; Exchange a 120 BROADWAY, NEW YORK 5. N. Y. Telephone: Bell BArclay 7-3500 Teletype—NY ratio of only .In one. 1925 fractionally above policyholders' sur¬ 1-1248-49 (L. A. Gibba. Manager Trading Department) plus against aggregated a net The first is vestor to function of assume the production. A the $969,781,000 premium volume of Insurance & Bank Stocks ANAYLZED Sold Quoted — REVIEWED — ] :{ COMPARED — Trading daily 7 a. m. Inquiries invited. to 5 p. m. (P. C. T.) Orders solicited. r \ of producing goods for assumes ; two . risks, (1) that his product may be destroyed damaged by phenomena such fire, flood, pests and drought, or as and (2) that his product may not bring a price that will enable him to buy other goods of equal value. When worker is a employed at is protected fixed wage, he against these risks. If his product is destroyed or sold at a loss, his employer, whether cern private government, stands or a con¬ the loss. The first function of the in¬ vestor, therefore is to insure the worker a against loss. He is in effect "work" insurance company. When ers, a concern employs work¬ it expects to be able to sell their products York — Chicago TELETYPE L. A. 279 San — Francisco L. A. 280 Seattle taaVi con¬ and endeavors to produce them at the lowest cost. The sec¬ ond function of the investor, therefore, is to produce desired efficiently. Thus the in¬ goods vestor serves the worker in As as two¬ a worker his work is consumer he is sup¬ plied with desirable goods. The workers, serve perpetuate It the is doubtful if ; „ the average worker appreciates the unfairness of the present method of arriving at wages. He takes the position, "I have; the right to, strike; I am going to use this right to better our with the :://// principles of right economic system? By the strike is meant that an ployee has the right to associate employed to contribute to this in accordance with obligated measures their effect upon the welfare of the workers. The Government's Obligations Specifically the economic obli¬ with his fellow workers to stop the production of their product. It has nothing to do with the right of the worker to leave his job at will. We live in a specialized society. Every worker produces at best a few products (V.// /-v / /;?¥!: em¬ ■' ; qualifications, ization wage which a work value same maximum goods will buy products of the his own, the of desired as amount leisure, and the greatest or freedom. Freedom is essential if the worker is to be able to leave his position at will to find one- in which he will be most productive and content. In order to the assure maxi¬ >>>:':>; ■•V/— depends upon / other workers to produce most of the goods he consumes. Special- / enable him to /:;, :• gations of the government are to assure every worker the opportu¬ nity of a job based upon his terfere with its job. \ however, do not the investors or to their existence. The the right to insure their work through their own co¬ operative organizations their government. not with or They have the essential. are satisfactory and Government from point of Unless view we its ability to fulfill ' |sf; and has provided a quantity, quality, and variety of goods that each man producing for himself could not hope to have. Special¬ ization is made possible by each man's knowledge .that others are producing the product which he mm- ://>: />;>• needs and desires. Otherwise there could be little specialization and would be living in a primitive It is inconsistent with the we state. your your will re¬ * our nomic, system is pieant the eco¬ .way in which it operates. Let us see how the mechanics of the system affect labor's ability to increase its pur¬ chasing scale power or by raising the wage average wage. Suppose that every and Smith worker in their labor obligations to The same.. default affect effect Brown on of does; not their obligations. But if forgoes the right to.strike, get justice? how will it We have already that seen wages do not provide for increasing the thereby increasing the de¬ crease mand for increasing medium a purchasing Under Australia and New Zealand goods by 10% without the supply of goods. a«free economy . new south wales ing profits by 10%. If purchasing and the power we base the of the workers investors and their on (ESTABLISHED turbed. total workers taken Reserve fore. or crease workers General Head Office: assume in that wages remain Vz of of all constant. increase the £223,163,622 the HEFFER, Manager ' * / / OFFICES: Threadneedle Street, E. C. 2 47 Berkeley Square, W. /•'. 1 Agency arrangements with Banks each industry receive in £23.710,000 30th George Street, SYDNEY LONDON 29 share 20%: increase the ':'/ THOMAS BAKER scale does not in¬ of goods. wage labor's Now will ;/ An increase in the average wage 6,150,000 Liability of Prop.- 8,780,000 Aggregate Assets Sept., 1945 to¬ gether will not be able to buy a larger part of the goods produced after the raise then they were be¬ £8,780,000 Reserve Fund operating The 1817) Paid-Up Capital profits re¬ spectively, their relative purchas¬ ing power will not have been dis¬ wages ii baniTof v industry will increase its prices and operat¬ throughout the U. S. A. while workers wages other As before total this of operating 10%. As NATIONAL BANK before the workers taken together of INDIA, LIMITED country and the profits of industry by will not be wages able to buy a larger after the raise than they were before. Thus while the workers receiving the increase will be able to buy more goods, the others, because of higher prices, will be able to buy cor¬ respondingly less. A sweeping victory by one union may mean Bankers share of goods defeat for all other workers. It follows from the is, therefore, an mechanics of the economic sys¬ of■»workers to pro.-. tem'that the workers' share of to the Government in Kenya Colony and Uganda Head Office: 26, Bishopsgate, London, E. C. Branches in India, Burma, Ceylon, Kenya Colony and Aden and Zanzibar Subscribed Capital——£4,000,000 Paid-Up Capital Reserve The - . economic their the country wins a 10% wage in¬ sweeping an the are Brown $1 and $50 owe respectively, pay By the mechanics .of the workers have organization http://fraser.stlouisfed.org/ 5BB555551^^^ Federal Reserve Bank of St. Louis 2085) end. Thus government is to consider all economic sumers charges reasonable, place you." » WIRES — profit.' It* a best fulfill the desires of the services OF CALIFORNIA PRIVATE at therefore, selects to the best of its ability those products which will are 210 Wrest 7th St., Los Angeles present do not demands of their are ex¬ right to say to the investors, "You BUTLER-HUFF & CO. The real wages at group to self-employed change exist to j Special Bulletin and Booklet Service to Dealers & Brokers any . - in¬ risk worker insured; — 22,603 24,365 a his logic of specialization to maintain mum output of desired goods, labor, manual skill, power of con¬ that any group has the right to centration, physical courage, ex¬ every investor must be offered the products of others while re¬ the opportunity for profit that perience, education training, per¬ fusing to produce theirs. The will compensate him for his pro¬ sonality, knowledge, ability, sense opposite view is the logical one. of responsibility, etc. to the extent ductive risk and be given every chance to use his ability to pro¬ Everyone is obligated not to re¬ required by his occupation. The sort to any activity which will duce efficiently. It is value of his work is, illogical, to therefore, interfere with the production of give a group the job of producing represented by the demands his his product. This obligation can¬ the maximum quantity of desired occupation makes upon his pro¬ not be dependent upon the essen¬ goods and then to impose regula¬ ductive assets. v ' •, ' tions and restrictions that will in¬ tiality of the product. If Jones fold role. Bought 23,540 48,256 52,059 secure >' ;-•>■ >■ of -goods for one of workers at the expense mote their welfare. The investors he v 3rd Quarter 1946 page a under the purpose, happened in the 1929-1932 period pre¬ of 32,346 470,564 21.5% vestor The peak in surplus was reached in 1929, and in capital in 1930-31. com¬ face net to assure profit, /Having noted what rights labor was and was not able to gain under our political system, let us see what rights it is entitled to 32,636 approximately $0.60 in 1945, a decline of 37.5%.'/v;\f: Dividends, it will be noted, are 58.4% higher, and this expansion total job than it is 30,712 425,744 to of worker every in¬ every 326,671 337,389 372,466 rates throughout the two decades, from an average of $0.96 in 19261 pansion gated to assure i> 32.016 constant lowering of fire premium conservatively Bill./it 340,073 totals the Employment the 389,212 Unearned in from the 302,167 highest in the whole 20-year period, and this expansion has achieved employment full 278,074 the been struck of 298,876 34.4% 1945 recently 329,712 are the Congress principle 573,740i and net premiums This is a when to have taken the position that government is no more obli¬ 22,603 .24,365 - clear seems 23,540 ; made 566,334 524,302 544,957 21.5% higher written, 25.9%. very moderate increase, reserves 30,281 was 30,346 worth 182%.- 25,996 fact 285,995 34.4% of crease This (Continued from 268,104 ,651,247 25,490 21,625 to weapons '■ share of their unions compared with that of their employer influenced by such factors as the essentiality of their product. \ 35,093 24,408 / myself." But is the right to strike 547,960 capital of the is /; these consistent 112,400 • —5,403 '• they / respective occupations on their productive assets but the strength Labor-Management Relations 30,306 higher than in 1926 and that surplus is 250% higher; total capital funds (capi¬ tal and surplus) aggregated $969,781,000 on Dec. 31, 1945 vs. $344,066,000 on Dec. 31, 1926, an in¬ panies 30,893 27,651 • of of Dividends 34,659 -26,631 labor's represent Profits $30,281 28,054 ; Operating .Results 39,967 43,930 — 280,062 :>■ Total Net Underwriting goods more. group of other workers. be |onS 23,317 ■ 258,700 263,696 Total Net 39,372 — 311,003 „ is t 342,768 232,677 years may as larger shown below; $64,355 — —— Are $20,310 457,674 273,909 are to by and ? wage, as far purchasing power isconcerned lies solely in the ability '' 393,004 355,917 interest, and average obtain- more ing, strikes, and picketing (000's Omitted)- Dividends : of increased the The value of collective bargain¬ dividend payments during those critical be 24, 1946 ' com¬ $28,382 Net Prem., » earnings —2,099 »: 4,588 V;-/ 340,351 will be observed that It Prem. , , '>488,371 > 118,900:) ■/ This /' ■ #'?' f't '/ . with of $35,973 —— 258,808 118,400 1926 by old-line that same 1930r^^_—-42,060 278,614 1942 over year 21 record cannot must produce ''j: pared Income 623,758 118,400 Increase the of than 114.0 by the more The / i Net Inv. 478,324 118,400 ■ as tially index. Total 112,400 a 18,400 ■ il¬ to serves ill,900 i94i::::::::::z"::::::,-:: 1945———::::::——:_— shows Unearned 158,019 ; ; companies from 1926 to 1945, in¬ 301,697 108,989 —— 19'35—I"ZZ— is table ii5,5oo;:, 162,755/ -— diyidends, etc goods raising worth 110.8 in October 1926, by Standard & Poor's Index, they are in October 1946, worth substan¬ how 1929 funds greater, Reserves ' Written -(000's Omitted)$235,066 $337,586 $373,687 162,752 ———— 1931—: much years capital assets, very 20 fire* insurance Surplus X: $109,000 19271-31111-1—I 1926, premium volume, are 3' Capital .':;;V r October Meanwhile v :;i.Year— : / to the long brought out in the accompanying can ,Z in companies' be bought at less than 75% of liquidating Values, on the average, and to yield over 4%. Standard & Poor's Weekly Index now stands at 114.0 which is only some 3.0% higher depressed have Year- ago.' Wise appears a beautifully well managed insurance companies can ride through economic storms of great severity, and at the same time provide protection to the insurance • as This whole record companies have ex¬ panded with the growth of population and with the increase in the national wealth of the United States. whole ample capital to expand their underwrit¬ ing business substantially. DEUSENi policyholders and take care Oj! their stockholders. // " , If fire insurance stocks were „ panies Insurance Stocks — business and VAN A. Thursday, October ' Bank —£2,000,000 Fund-^ conducts banking and £2,200,000 every exchange descriptionJ of business Trusteeships and Executorships also undertaken A Volume 164. of power Number 4536 all gether. The workers function of to assure that the get* share be paid his ures tion, ' } fair a work goods, that wage contribution that wage the or quired units a of by of he worker .: The it tioning successfully f for large organizations. * f in job evaluation. the would pation the is •/. of each ment. ■ the 'J effort, ■" various factors, result a factors the paid wages work in different often for ! organiza¬ not living * be a on of savings that the wage materially on for other.. reasons, wage scale should than the current the not be oiner The ... that do nenceiortn were units of stated in . III aminations ?Y7 777,' job -: in the evaluation. r would in effect. now • * are determining wages and their determination by a government body on the basis of opportuness and expedience. We have arise not may, from - be may in to values give each These > naturally aim ■, - most advanced field. 7.7; 7: •y Review by M for the occupations in which i|!- -"'i i-. ■■ YY 7 The concerned. were I- rived at would be reviewed by a government body of experts to that they conformed with the ; 7//:. see ;/77 would become the -legal V.'i by neither labor for nor wages. that nor management matter by govern¬ ment, but by a scientific method sponsored r by * government and used by both labor and manage¬ //. i-': /■: I ■' ment. 7^>,5 ■»;- « • f - i ' management * to arrive at wages ' ■ for various calling occupations without upon CJA's. In such The the ,- L ..;*: yyM ;< '- • Many familiar with one or . workers have filled job. They would labor, skill," personality^ and present •- so his any oc¬ the most use of force and the threat of force. As result in many cases there is no relation between the value of the a the when a worker's re¬ the value his receive.; excess of be they and measured by. the occupation, makes assets,: that and job is fixed by his. own chosen approved experts. in. turn; by The feeling increase granted to of* workers one group would* be ^assumed and more upon as an com¬ demands by all other workers: y , would not excuse for be a looked series of I The Tcfllowihg;; illustration hielp to' determine present better or - the working will balance be at compensation for 3,; The the free opening J will be 7; • at 1. i, - V (Continued from page 2087) that the workers 7 possible .Swiss contact Y -J :7 Director of / .j«;5.when reached it / .; -r : I ■' dividual - has"' an *: ; ; > , ' nkakes upon j "i devotes to his hies that* wages Na- t Y ' and Commerce, ' . . OMGUS,, ' Berlin, Germany, Oct. 9, 1946.: 7 ? |7; ; *-7 ;7 : / --v;: / 7; : —Mil 1 A :'*v Tlids. Malison With Nat'l Sec. & Research OMGUS. * 1 will - ibrder . Swiss' francs in drawn on 'vr National' 7 T : • in exporter, the Swiss National Bank... This payment order will be honored by one the conclude contract with the Swiss ex- porter and will make pay'T ment by issuing a payment ,>•; * receipt, Upon favor of the Swiss hfqs- denied- that -job -evaluation is thb best method we know of for en _ 7 ... * covering the dollars into Swiss francs to. pay for the I H. J. Simonson, Jr., President export. If both are granted, of National Securities & Research copies of both licenses will be forwarded by the Swiss Corporation, 120 Broadway, NeW York City, announces that exporter through channels OMGUS V; his, products determining the value, of the prcA diictive assets which every works* Swiss , - . assets, these assets. No the tional -Bank exchange of to strength, endurance, manual skill, ability, etc.,- and that his contribu¬ tion is measured by the demand the' production " of from 'yp/ ' power of all cannot be in¬ certain' and the Swiss exportert the Swiss exporter will request cense raising the wage scale. ;,[; '' questioned that every in¬ p one OMGUS between ;;;7:7>::v;Y;v- Bennett, !y77YY>-> M. S. Szymczak, 77 Y ' Civ. Chief, Trade >7 • export license from the Swiss-authorities,, and; a li- ; •v " creased by No • Jack Director of Finance, V :. OMGUS .v:7: ' , an Economics, OMGUS ; ex- / Y: ' I Delegation , 7 Trade (Signed) William H. Draper Jr., 77 s* >77 7:7 ^ Brigadier General S7;V If and ; [ lM - agreement < is channels. official , times forces other unit 7:..7.1,1 (Signed) Paul Keller, 7; 'i porters who will make direct offers- to OMGUS through of a v! ■' of Occupation Germany and Switzerland. of 7 will The; Swiss i authorities purchasing as account During the meeting import and export lists were discussed in 77 ;: V , . amount this Y the U. S.JZone with the to interfere ~ workers of subject to approval by why Conclude Trade Pact times takes weeks.; While ; this bargaining is going on, the work¬ er often stops working reducing, thereby, the amount of goods pro¬ at disposal 6f Washington. This approval will other Switzerland and U. S. Furthermore the bargaining be¬ tween worker and investor some¬ duced. This fjy account J be requested by OMGUS. Evaluation of this OMGUs.;/;g;;/Hv /;/,; f?:-. ;■ con¬ . This. is also true of investors. of the Swiss of OMGUS National the account Y -* Bank in U. S. dollars, within ' job* No one d©r I based upon job mittee. sible The for committee the is respon¬ investments of the; various funds managed. Mr. Mat son, 7 an analyst councelor, Guaranty Dillon & was ? and * investment mil can { formerly with the: Trust Co., Co., and" other Eastman] financial houses.77 7 Y77;;Y>v/YY7;7hY 7- Bank "to the 'debit 7 with * the 7 Swiss; of Thomas E. Mattson has been made a member of the investment com¬ E. F.Hulton SOo. Adds Three le Staff ,7 7the amount of the available (Special to The; Potanciai. Chbonicle) Y I /7 /balance, at the day's buying t». LQS;ANGELES, CALIF.YWil: liam TP. Herbert, Jr.,' Edmund Wirate for U. S. dollars^ on the present method sr -1 Clark and* Thomas M. Mclnerney 11 bargaining and strikes. Yet many Strength' of the license as have become associated with E. F;. people have objected to this pro¬ 777;. issued. ' > YYY•'!' Hutton & Co., 623 South posal. V;'-\ ' ; Y"" i >' Spring; 3. Correspondence will ordinarily Street. Mr. Herbert in the past t Objections to the Plan .7 +. 7 be ^channeled through the Of- was manager of the : trading de-« i These objections tan be sum¬ marized, ."This plan would enslave V? w fiee :of the Commercial Attache partment for the local office„of evaluation aiirived at are fairer than wages by . . * x whether1 the. proposed procedure serve according regulations. .,>; The , iyw worker; it would d6prty& himf class: -•bf" his present status which was ; supplier OMGUS Mn ; to OMGUS by ; number a num- transaction The German paid , of Chief of Swiss declines.The educated are power mem-, as one group nature will' be just and efficient conduct of our economic system. <* '• the expense of the other workers. the procedure and receipts issued. It is only who depend, 7on. his products to stop work. As a result just, the including were productive experts union are ~ those are posi¬ would contribution is government forth -in; their occupations '■* with party V employs other a ing by an increase in. the wage scale,, that e^ch man's work or by for knowledge", work „ wages assets required by his pare the point • values given : the factors specific no occupations and is not in the money value of each of these • given their respective* cupations. .* the published point values; for of not being justly compensated J which exists among Workers to¬ day would be- eliminated. Thus values r for workers upon each factor in every occupation could also be used by workers to check the accuracy of the point than own demands, his cases government and V following in¬ amount, detail and information was ex¬ job evaluation employed to determine changed as to present availabil¬ wages. It would destroy the false ity of goods as well as existing concept fostered by Communists / possibilities for processing. Y that there is a basic antagonism 2. It can be stated that all major between the working and invest¬ problems were discussed in a j ing classes. It would promote for¬ spirit of great willingness to eign trade, fair competition, and understand difficulties on both the efficiency of management. It ; sides. The basis was laid for is essential for sound money, full the implementation of concrete ' employment, the maximum output ./ proposals for the development of goods, and to deprive industrial v of exports to and imports from and labor leaders of their need no determining the -?ach product. opportune At cannot raise their standard, of liv¬ occupation and wages arrived at. -with approval. at than his to the fact that / the interested concern and its em'\i ployees would file a description of the how arrived the factor "in every" occupation " covered by- job evaluation; "This data could be used by labor and f know proposed The Department of Labor would publish the point values given to each are the re¬ statement should be available goods investors, more¬ over, spend a great deal of time bers of another union are given and effort preparing for * these a raise, he too should get a raise. bargainings which they could have This puts it up to his union lead¬ otherwise used to promote the ers to get him an increase at least efficient production of goods. as high as that won for the mem¬ Of the many people who pave bers of the other union. This is a studied this proposal, none has normal attitude which, has con¬ questioned the reasoning no;: de¬ tributed to the number of strikes. nied the truth of the explanation Under the These wages would be determined Y Each the various tion^^ to judge thbir ia^ therefore, feels that if the standards laid down by Congress. Once accepted by this board they :' for Reasons reasons and each There can. methods which it thinks of ation boards. No constant formula is used. The average worker does not Other tries receipts of he can, as bank EH. therefore, workers he as accidental boards, and arbitration and medi¬ ar- wages the contain notify payments marks of their function and economic system. payments for The Swiss will the This involved. deter¬ deprives the of German supplier, OMGUS contract ber the relative consumer be name of Swiss debtor, name of German consumers therefore, our products delivered and the value are determined by collective bargaining, fact finding they measure for Bank formation: right, job evaluation will lead to price fixing is not justified under the principles of r increased;; wages. for will by their shall be goods will payments with of ceived. the the There /Many .workers, therefore, .wages determine ' J . investor, give value of " of function of in bearing in7 services. OMGUS Thus the fear that the . rules ' " of ation-: experts ; hot considered. the sumer workers measures by ing, the ceipt raised value government Certified Job Evalu¬ occupations ■.VJ Labor and management would call upon' these job evaluation experts to determine the wages the On work: Furthermore ■ while - worker be Government" hand investors. method to arrive at wages, its effect upon the attitude be product will and National Assuming fair competition and free consumers' choice, the selling price of every own get 94% ceipt a should What with the produced and what organizations worker tries to get as large a re¬ seems to. be a gen-, eral assumption that the standard of living of the working class can y the low value as present there knowledge in the yYY-/<YYY ' Workers to Each to section ; prepare students for the CJA examination which would be based upon the c2*-\ Vj.. on goods Bank will account importers German , an account not This economic serve ment and not the share; In determining the desirability of courses - to Effect : that manner to purchases dollars, credited shall produce them. receipts he receives for his product or work, the higher the value, the larger his abruptly to disturb existing rela¬ tive consumers to our value of the receipt he gives the value and order system it, is the of the goods, each worker's share depends upon tne productivities,:; it desirable is Under; place upon it. Under price fixing the govern¬ still en^ local - conditions different - function for going ether however, new second S. Swiss that the investors' seen consumer. mines pro¬ applied to the our for OMGUS terest. any value of the various worker, the lower its value* the larger his share in the goods products. Government price fix¬ tire country immediately. If these different wage scales, • 1 i f7r*:;: this should not be CPA's are licensed. A number of 7; universities now offer courses Jn $■&■: those of Swiss National open U. country. The investors as a group still get 6% of the goods produced tneir services. But each in¬ vestors share depends upon tne great strides which to aspect 1. The totalitarian regime a make of mythical country our the not distinction be¬ tween job evaluation as a means A on government fixing of wages will lead to receipts instead in fixed . services. expressed f Now let scale is raised slightly, say 5%. a basic wage based upon its pres¬ Congress should provide for the ent wage scale, and then gradually establishment of job evaluation raise its basic wage until it con¬ standards and for the licensing of forms to the basic wage set for job evaluation experts, Certified the country. u 7 Job Analysts, on the basis of ex¬ t , being take to the productivity of in these re¬ spective sections, there would be no reason why the basic wage tion of job evaluation if the wage • Each stating ;: / the average worker however,. facilitate the introduc¬ ii receipt call each unit of worK to "dollar." worK portionate lower It one. the country. If these scales the work- higher than the present one. And in view of the large national debt * if- a legislature of that country dollars. Today there are various wage scales tor different sections of tne wage scale adopted the part of cur¬ affect scale adopted should be and 77- The decided made in developing techniques, he would no longer than point value. yers "will be able to buy, it is essen¬ tial in order to protect those y.77. re- production. and insurance opinion. More¬ over, whatever his opinion of job evaluation, he will agree that the wages it determines will be fairer assure Although the and subscribe differ- to rent production which ■-TV 7 courage,. etc. its" given changed for any desired product of equal worK value less 6% have- been its the materially* just wages workers, Congress should all will i-w-V experts cnargea oy the investors for their lower grade and wages than those in which they were' / concentration, determine the national basic wage or; i is to tion for * ior certified are wages the laoor, manual ot aointy,: woiKer attempts ent the basic wage or point value used, by each concern varies. As Therefore '■"vv'^V oasis t|UjLied against evaluating most of the jobs in the country is nearly impossible. However, if the layman knew the present wide use of job evalua¬ same '. value a hy the determined value of his product in units ot work. This receipt can be ex¬ manage¬ have for at years of struggle. If terested in purchasing goods going, moreover, to have from the U. S. Zone of Occu¬ by government, it pation will be arranged by win soon fix prices. Our democ¬ OGMUS in the light of over-all racy will then have given way to policy. a totalitarian system." The only 5. Rail transportation in Germany liberty the worker Would lose of exports to ana imports from through job evaluation would be Switzerland is an OMGUS rethe liberty to gain a wage higher / sponsibility. than that scientifically determined just by job evaluation. II. Account with the Swiss fj The people who take the view National Bank accepted the at by entering into any occupation total 72 and each point represents $.02, the occupa¬ tion pays $1.44 per hour. At pres¬ tions- ■i would lookout uie skill, the part of management to classify their employees in occupations of determine to of the Unions the on occu¬ an treatment-by is 2089 gained after you receipt formerly call¬ ing for MO units of goods was skill,"education, training, responactually valued at $10. As betore, each ,v- '7 77y7 '• y sibility, physical courage, ability, working. : 7 worKer could exchange his re¬ personality, etc. required for its /•; Job evaluation; has been little ceipt for products v-ot the > same efficient conduct. The values are publicized and the layman may, worK or monetary value less the given in points. If the points for therefore, believe that the task of t>% charged by tne investors. >fl ' analyzed value physical ; evaluation h evaluation ual worker was protected Operation of Job Evaluation Under job on were paid, that working conditions were maintained, and that the individ¬ - wrtqre rit government oy procedure to the unions to up a country in which each brings nis product to mar¬ investors proposed be aroitrary The T that the wages arrived job many , ket; good func¬ now comparisons. Under see by an by "job measured | evaluation" which«is ■ would j make The- resulting u 7:YY; Union Supervision re¬ work worker^ _ errors produc¬ his required are Picture occupations,, Probably mil¬ explanations snouiu bring about the correction of any meas¬ occupation. work occupation of factors protests and measures units his to these for of justiy divided these For each worker to his given other is wages rnnong them. must values to¬ goods; available, lions to workers will be /*' taken THE, COMMERCIAL? & >FINANCIAL CHRONICLE ? ,_of_the-U.-S.* LegationinBerne; 4. Visits of Swiss businessmen in- E. H. Rollins & Sons and of Herbert-Reynolds Co. was head 7 2090 TOE COMMERCIAL & FINANCIAL CHRONICLE ruling is merely to give offi¬ cial blessing to transact certain security arbitrage operations di¬ rectly instead of deviously as was previously the case. * ^'Thursday, October 24, 1946 new Canadian Securities ^Federal Usurpations in By WILLIAM It is j McKAY somber caution. This trait can no announcement . .had little the market and the .on ex¬ ;(Continued from page 2073) ternal section continued .dormant, Canadian characteristic to view the future with somewhat a The .effect Abitibi doubt be traced to the pronounced 5s of 1956 eased to They have the right to insist <ori full cash payment for all securi¬ ties purchased .in the open mar¬ 98% Scottish pattern in the Dominion racial fabric. .On the one hand this ,and at this level appear attractive tendency to foreboding assures that the problems,of/the future will whether or not the discussed .re¬ be tackled with proper respect. Qn the other hand, an appraisal of funding materializes.) Internals Canadian prospects from a pessimistic. war fears were con¬ stantly expressed that the Domin- ion would be hard put -to ;meet its obligations to this country. conclusion of at :the itself found As it Canada transpired ultimately hostilities with almost an .embar¬ credit balance of U. S. dollars.. Similarly at the present time Canadian opinion is inclined to view with some misgiving the rassing $100,000 i Power & Paper Principal and interest -payable in U. S., Canada London or * iPrice 99 and accrued ; ; interest to Buffalo, Dominion Securities CORPORATION; • ' •' ■» 40 Exchange Place, Hew >V,' » i.' York 5, N. Y. Furthermore even in a period of direst depres¬ sion, Canada has a virtual monop¬ oly in certain export fields such as 1 asbestos, nickel and forestry products which would fall in the category of essential imports for foreign account. Moreover other commodities ' be cited such as can i ary. $ / < proceeds which have been as / three years. / Mr. Eccles, for in sounds 1 price automatic is "It rency or the ernment. to ful v PROVINCIAL solvency of the/gov¬ CORPORATION CANADIAN STOCKS United before world production can meet tionary influence, there should be an interim period ahead of pros¬ tion low cost a as imposing variety of essential com¬ modities and her relatively stable labor situation, would share to grim jeremiads about the possible of OPA decontrol, say nothing about the effect of complacent labor policy on rising NY-1-1045 an be turned to beyond Canada's produce greater even • . During the past week the action of the Foreign Exchange Control in easing ^governing securities dealings came that dication the are as restrictions /The fact is that inflation in the United States, insofar as it has taken place in the last decade, has and rising prices. None of champions ,of greater bureau¬ cratic A been farm products that the be cancelled, or Federal agencies now bidding in American markets for a are now been debt ernment granted Such Canadian domes¬ .an a national • .asset the 'Dominion au¬ thinking in terms of as labor .and both instances, the one wages and the other farm prices, the value of the dollar has depreciated more than it did dur¬ ing the First World War. There is no evidence suggesting any- Willis Btirnsfde Go. /Willis Burnside E. Street, New York doing business tion. Officers side, president; as Co., 30 Alton City, is J. Great never Tet- was the firm, meyer formerly proprietor of with .which Mr. Tet- was associated trader. as ness. and f as they been fatal. universities. our are, Our they have own coup- try was bom in -the midst of a grievous inflation in which the depreciation of the .currency be¬ came a by-word for worthlcss- njieyer, vice-president. Mr. Burnside disturb¬ causing great injustice the classrooms of Blauner, William and by economic as between various groups in the community. These evils have been amply explored and expounded in a corpora¬ a Nevertheless, we survived and -great nation was new born .amidst economic ,pangs that Constantinos Fateras increasing As a gov¬ practical disturbing were but, ,as events | Constantinos A. Pateras is en¬ proved, certainly not fatal. To¬ gaging in the securities business day ft seems that the country from offices at 4-6 New York ;City. Piatt . through Street, tion // is flation Street, New York 5 All Issues . ' • ' CANADIAN 1 ' ■■■■' - Incorporated ; Corporate Toronto Montreal Street, New York 5 the and latter labor It is subject to and has costs rate a Vancouver London, England high struc¬ firmly controlled by the ICC. This does not that the mean en¬ tire rail field should be abandoned institutional investor. whose credit will the by There are roads be good even if the country runs into a protracted depression. It is necessary -to emphasize that the investment confine man can himself to longer no an examina¬ tion of balance sheet and statement figures and income past rec¬ He must give careful .coiir1 sideration to factors which for¬ ords. merly have been lesser of certainly, not .controlling tance. -"/.'otVv) '/ •; (Tt is of sion possible that the inflation bonds. There is discus¬ its impact may under¬ and no and impor¬ government good ground at 'the present time for such a loss of faith in government obliga¬ tions. It is true that the debt is huge and .that fiscal thinking has been unduly influenced ib.y theo¬ ries which violate all sound the -finance. country The precepts of fact .is that investor may be possesses /enormous . .com¬ ' Winnipeg to economic power and can lake a great deal of punishments jn box¬ mitting a grave error in trying to ing parlance, it has 'whiskers' and anticipate the effects of inflation,' can take quite ,a beating. The He is apt to be. guided by the country is entirely capable of classicexperiences of the pasl carrying its present debt load and which 'have been expounded in there is no immediate danger of,a classroom and text." substantial rise in interest rates "In 'line with these -apparent - or a- correlative decline in bqfid lessons of the past," Dr. Lawrence prices." / / t / :. tutional Municipal 14 Wall of Bankers Association Virginia Beach on .Oct. 22, Dr. Lawrenqe .warned that "the insti¬ Wood, Gundy & Co. SECURITIES Plan at Bought—Sold—Quoted usurpation." Speaking at the .Convention Morris 3-1874 ; Provincial to curb the very in¬ has been. the pre¬ which text for bureaucratic & Company costs its political administra¬ on government debt denying many of the es-. mine confidence in time failing Dominion of Canada raise to depress prices. The railroad in¬ dustry unfortunately illustrates ture ance Willis E. Burn- are vice-president; .& "In his consideration of invests ments, ,the prudent manager will lay great stress upon labor factors and controls, the former tending both hazards. companied Now A Corporation would alter this fact. ' "There is no desire to minimize inflation. It is a grave evil ac¬ .. lesser rather than TA YLOR, J)EALE Government such In welfare. sential liberties guaranteed by the Constitution and is at the same WHitehall more past patterns agriculture. honest/purpose would furthermore try to re-educate the public cn the fruits of thrift, both personal and governmental. 11 welcome in¬ matter, however, the effect of the Wall from voter masses, commodities with the funds the credit of American tax¬ scarce f -r, its for depar¬ than its conformity/* The / power of the government has been used delibr erajtely to promote the interests of groups which contain large ture post¬ price'floors for guaranteed war politically selective infla¬ a tion, notable suggests that subsi¬ power dies be removed from agriculture and other commodities, that Canadian in a ernmental control. •64 use¬ ground, : costs the other security of the same type as now thorities RECTOR 2-7231 the costly. may prove consequences tic security and the simultaneous investment of the proceeds in an¬ of trade barriers progress account. MEW YORK 5, N. Y- had dollars Permits for the sale of Pine Board States allowed. the Dominion important .de¬ gree in any boom in foreign trade. Likewise if the present ef¬ forts to bring about a relaxation will TWO WALL STREET in precious metal of great value, may In view of Canada's posi¬ lip-service stage, comoetitive ability to INCORPORATED coal, tangible, highly a substance any dike Bpwles/ h»d Porter encounter conditions where a se¬ who /have been sounding off with curity .commitment in its future would seek furthermore to re¬ international Well as in the securities payable store to the individual full re¬ ip United States currency. sponsibility fpr his own economic producer of an in activity perous the A. E, AMES & CO. ; to . / "Men . trade. MUNICIPAL / obvious is today hardly a good hedge against inflation./ Similarly, gold, / a metals, precious the existing demand and in addi¬ tion threaten to exercise a defla¬ GOVERNMENT " . be of investment that although • CANADIAN BONDS must student threaten the integrity of the cur¬ ' rises. safeguard a discrimination. alarm ;as level general adequate in /the past, they pan the -applied today only with the most careful the .fi¬ such the as Howevor definite a the .conduct .of minister nance secur¬ - loud, a whenever securities Canadiap imposes to such commitments .may ;haye beep upon currency issue and credit expansion. Furthermore, Xt maturity pf npt less than a (this conviction which justify & search for things jn /the .ground, real -estate and commodities, pecause .all these presumably will vary in is seems gold standard. ZIt ity in Canada where the proceeds are being immediately reinvested in Canadian dollar stocks or bonds with ./"It causes limit now/ sell //a can or -very responsible for this country has ing is more likely to compel sound fiscal hehavior and prevent infla¬ tion /.than a return to the se-' prohibition has been removed. United States the real;substance,of fhe -fund; in .other words, its purchasing power. m i . does not suggest a re¬ turn to the gold standard. Noth¬ of the Canadian Government. This non-resident ■ example, Sales of domestic Canadian the ■ ignores carefully the • ^ecndtiesfi^iisacliens invest - "The irony of all this is .that it . and uranium and Hitherto a Canadian resident payers be barred until such time of which has not been permitted to sell a as supplies become adequate and Canada is the world's lowest cost Canadian domestic security in domestic prices reasonable. producer. In this field also the New York and buy in exchange "An honest purpose to control Dominion, under the worst condi¬ another Canadian domestic;' se¬ inflation would also call for change in. the political) direction tions would undoubtedly still con¬ an of inflationary forces. curity— one payable /solely in abandonment of the It would tinue to maintain a fair flow of specious phi¬ Canadian dollars—although rein¬ be a great mistake to assume ,a losophy that governmental defi¬ exports. .' ! vestment in securities payable in Republican victory in November cits are salutary and a huge Mt would appear, however, that gov¬ base metals, gypsum, other Bell System Teletype NY 1-702-3 commodities remain unexploited. ! Toronto and -Montreal these in resources Piiect Private Wires Chairman of the of Governors of the Fed¬ vestment commitments in situa¬ Reserve System, is now .de¬ tions which will appreciate suffi¬ manding a change in the .capital ciently ;to a?sure.,(l) the.satisfac¬ gains tax on the ground that the tion of dollar commitments and current levy -of 25% ..is .inflation¬ (2) if possible, the protection of ac¬ curities now permitted if promost countries in this category Canada ihas (devel¬ ceedsare simultaneously Invest-/ oped .an industrial strength which ted in another security of same promises ultimately to eliminate her dependence on essential im¬ /type pr jn securities payable Jin ; ports. At the worst, the Dominion United States/currency. would be obliged to adopt a policy Accord i n g to. the Canadian of self-sufficiency, and would be Press, the : Foreign Exchange forced to exploit ,domestic re¬ Board of Canada has announced sources in place of imports. In the new rules governing transactions long run this could prove to be a ip securities by both residents and blessing in disguise. While it is non-residents of Canada. ' / now expedient to import such es¬ ; Previously, a non-resident /was sentials as coal, iron, and oil, the not permitted to sell common or tremendous undeveloped domestic preferred stocks in Canada and to result in general rise in prices, in con¬ sequence, he tries to place his in¬ Board unlike, ever, is/bound bank credit a present suffered .to date. gether with all countries that rely the marketing of, primary . eral Canada Eases on vestment manager. is .apt to as¬ 'that .a; very. gi;eat increase public debt plus an accom¬ panying increase in currency and in the no in,any other market. such inflation produce, would be faced with a serious exchange problem. How-: 1, 1965 / undervalued. depression of course, Canada, to¬ 5% First Mortgage Bonds the .current levels the paper and base metal stocks would appear to ;be currencies in the postwar period. In the event .of a world-wide Company, Ltd. Due June the .an¬ nouncement of the $10 rise in newsprint. Free funds after eas¬ ing to 4Vs% subsequently rallied ;to 3%%. /,/.//■.,.;■■:■ ; There still appears little likeli¬ hood of any early revival of commented, "the institutional in¬ sume They have the right to. regulate installment .credit. ; Mrt Fccles, following tivity; in 3py .section .although at ability of Dominion commerce -to earn an adequate total of hard Abitibi | advance ous condition that confronts a other buyer likewise dull and the paper stocks, receded after their previ¬ ■ During the ket. were Canadian source is apt to be misleadingly ® / Attacking Inflation Dangerous- . . .. ■Volume 164 Only Number 4536 . THE COMMERCIAL & Republican Congress Can Check Inflation a (Continued from 2080) page .of Rolla McMillen. project for spending money which nas not been endorsed by the . He has made outstanding record in Congress 'President. He has .recommended in a short time and represents 1 billions for public works, -includwhat I know to be the thinking mg every--creek in- theV United and ,philosophy of the people of: States; billions for the compulsory Wm. G. Stratton. The country of a ., the more-employees. The figures show; inflation; that in July, 1946, i-1 -months after today- is. in - inflation is threatened result of those policies. as workers has increased approximately more, ment there has been prewar. In view of the fact that there has been no increase- in- the crease; <• in cost the last 0.00,000. further wage to achieve time to 'lb >/*■' ''y v« Monetary Fund. is due Include gold, I . which over have we control; no * -1 Bank I di¬ " seerh to bf all "its lending of $3,500,000,000 is already power allocated. The Treasury estimates e wards. very Truman lion granted extensive price increases in basic prices like that of steel, Which in turn increased the Then on ■-. effect of such politcal pur¬ hard work. the President justifed his veto by claiming that the provisions of raise manufactured goods. price of To prevent billion. can entirely •housewife. a difference to Manufactured there is constant a This .approximately $25 can be done, but it only be done by Administration foff the market-basket items which -really made In the effort to escape burden be reduced to the this he took the ceilings and progress temporarily, but leads ultimately "to disaster. In my opinion the budget should The would burden "is to dis¬ pressure towards reduces the burden •days. Of course they went rapidly to adjust themselves to costs. bill a initiative, courage' a Reoublican which does not believe in the theory that more spending is the solution *of every the goods /The net result is Hon which in the a end will cer- nations. < Such a-budget would -reduction in taxes *so . icies. Of once of the New Deal did. before when it reduced i course BALTIMORE, MD.—E,: R. & Co.j 221 East Redwood Street, memberg of the Baltimore that Lorimer A. Davidson has become associated with them. Mr. David¬ son his position upon -re¬ assumes ceiving separation from the Can¬ Army where he held toe rank, of Major |n the Royal Can¬ adian the Foreign LendingProgram • ^'The-, $3;300,-! - New Deal spending; The ultimate inflation resulting from this British . loan amounts to 0C3;000;' the Export-Import Bank will be worse than that in the loans to $3,500,000,000, with more World War when there 'was al-; to-.come; the Bretton Woods Mone¬ most no price -control at: all.'■:? Be-j tary Fund takes $2,750,000,000; .sides hitting those who have been, the International Bank can sell thrifty, it ' hits with particular ? guaranteed securities in this coun¬ warf force the white-collar group. Fac-j try up to S7,500^000,000; we have tory workers [ have more than .given UNRRA $2,750,000,000. Thus Y made up the difference. '.Salaries over a period of three or four in the lower income class move, years We are making available i much more slowly, if at all. i" ■' to foreign - nations, without; any its been the same . Inflation From Liberal Spending '• This inflation-has been substan¬ tially encouraged by the liberal! spending polices of the Adminis-" tration. It is hard .to think of any which may during the^next four well be - billions spent here J ■i J V A it f ■ • | f SOUL est profits and WILL ,, HELP WITH IT. But chal¬ ever pay while bad are business business ... . , men business . men greedy, they want the high¬ toe lowest wages, LEAVE IT TO US •* WE ;, YOU. All this "Business'men business men will exploit you . want to starve you . men are . WE HAVE those of Street, have been taking it A on MONOPOLY whorare in us the chin. Some of us have been afraid to dp ON HUMANISM!" business, We've . never and in Wall answered back./ because we couldn't trust these to pry into our private lives, o£ so people. They have power charge us with tax evasion, and.even if we are innocent, they can plague us with endless annoyances and investigations. Or they could send their.clerks into our haven't answered back. • in But times their known ers are The thought offices ' i changing. confusion. own as they is a Do construct They disrupt a our affairs. So we * . The little .There could and , Tower of Babel. reach to Heaven? men becoming snarled are story from the old Testament you remember how the build¬ man-made would that tower small men too and they failed; It is the way our present crop of small men are failing now. BUT THEFOUNDING FATHER^ OF THIS NATION WERE NOT SMALL MEN. were THEY BUILT SO STRONGLY THAT EVEN THE INDIFT . . . Prior to being (Washington). commissioned in Canadian the Army in 1940, he had 18 years of experience in the investment banking business in New;;York; Mr.. Davidson, with his. wife and son, resi.de in Wash¬ ington, D. C. '•■ • " • ■ *>*—MBMWw-1.« •' - fice WILL WE HAVE THE COURAGE AND THE CHARACTER TO HELP OUR YFELLOW Service and Bank has served- from - the two over years. overseas Oberman & Company 5% Cum. Conv. Pfd. Stock , .Y : Common Stock / Prospectus <! a as transport duty was as service Yand on request 1 : < ■ • and Herrick,Waddell & Co., Inc. : 55 LIBERTY STREET, NEW YORK 5, N. Y. one-half 'Supply Officer and cruiser.-.. His Officer in Charge American of the Contract Termination Sec¬ tion of the Bureau of S' Supplies and Schoff & Baxter BURLINGTON, IOWA — R. Baxter!is engaging in the securi¬ ties business under the firm of ISchoff & Baxter Fullerton Grower# Inc., Com, v Oil Co., Com.* mi WdgensellerS DurstJnc. - jfembers Los Angeles Stock Exchange ^ name from bffices Fruit Arden Farms Co., Pfd. fit Com. i '' Accounts in Washington, D. C. ' sufficient been . ; ONE that in¬ . Co., First National Building. !. ,• release ■ . Mohr & ton, last . 'Jn:vv-Vv admitted to partnership in Thorn¬ of. UNDERSTAND dividual freedom is greater than security and that wealth MONTGOMERY, ALA.—J.Mills Thornton, Jr., has returned from Naval TO for all is here in this land of ours, providing we WORK for it. Thornton, Jr., Partner In Thornton, Mohr the AMERICANS That material well being is a personal thing TRUTH? Y ) • i ' v €26 SO. SPRING ST. Y : - v TRINITY 5761 LOS ANGELES 14 t ' V-!.:!/V'Y::'Y -Teletype: LA 68 years .at the in the Tama Building.. In the past rate of 5 billion a year. This kind he was ; a partner in Schoff & of buying, of course, will build up an artificial •export trade -and atl:Baxter; 'li l :) l.M AND FREEDOM, AND WHO WOULD NOT FIGHT FOR THIS FREE¬ DOM, CAN HAVE ANOTHER CHANCE TO HELP BUILD A BET¬ TER AMERICA. When "these small men are gone from public of¬ Joint Staff Mission . $20 ideas FERENCE AND TIMIDITY OF THOSE OF US WHO UNDERSTAND Artillery. For the past three he has served as a General Staff, Officer on the Canadian ■ return; totalitarian existing organizations in this business tirade. can't be trusted. y -immediate unsound, adian ^Mjt..; Thornton -was • serving as -{0 Lieutenant-Commander upon his gold '" value of r -the: dollar. TheYfore^ Thrift and saving has always been- threatens $ ^ontinuatipn ^of "dnfla^ /♦contrary *; to- the .v phi losophy • of I tion in % dangerous form of ..many years ■ :r onslaught our but it cant be reached*unless we; great inf la-; stop passing out money to foreign > tainly reduce the value .of the ddl- permit a lar by 40.%,, and thereby reduce ; that the total tax burden would the purchasing power of all banks be less than one-fourth of the na¬ deposits, and life insurance pol-; tional income. Y;^Y;-'//-YAYr/■• Y-vv. *this un¬ Jones T-0' problem. went up anyway, and. so did raw This figure of $25 billion can materials. Now, of course, it &s; be-reached within the estimates impossible to roll them back. The of the War and Navy Department effort to do so in the case of meat for a peacetime military force, lias simply resulted in no meat > the little announced to ours, which give breath and life to this business of supplying capital for industry, and free markets for' the ownership of that in¬ dustry. Time after time, little men in government Rave smeared WALL STREET. The Wallaces, the Peppers, yes, even the verytop men in our government have "been yowling for years, and always years, Wilh E, R. Jones & Co. Exchange, PART little . these Lorimer Davidson Now Stock done CATIONS Serious collapse. n have lenge such a virus and expose the fallacies upon which it was based? Did any of our existing dealer, or broker associations, ever stand up for good public relations and defend the ECONOMIC JUSTIFI-, sta¬ - local national income. ' The inevitable a survived of . the flood of spending, and begin a' stabilization which can prevent a We of untold favors but that is because our founding fathers very resistant form of government that has prevailed land did any one in operation; face will VICTORY. Our industry is the recipient PROPERTY, YOU: TAKE THE BODY but only if a Republican Congress is elected can we hope to check 38; billion dollars; of Fed¬ taxes,'-we find that ; the tax burden" is nearly one-third of toe | poses, the President vetoed the Price Control Extension bill and took all controls off prices for 30 the and State of it for free¬ cally nothing to preserve FREEDOM. We have allowed unsound slogans to mesmerize the majority of our people: "Put human rights Republican Congress a elected 'are pleasant results for several eral July 1 at the behest of the PAC and for dollars taxes 'to price of manufactured goods.': , Even if is excessive today ; on all particularly on the low groups. If we add ten bil¬ short time the fallacy grossly policy was ad¬ classes, mitted by the OP A itself which' income .a and this free THIS above property rights." Do you remember that one? The believers in statism and government control of our economic existence who said this KNEW ONLY TOO WELL'THAT ONCE YOU TAKE weak reed to lean on when a these Vast forces Furthermore, the tax burden is the steaks FOR which have been inculcated into the thinking of our people, and the actions of our government ever since 1932. We have done practi¬ the flood created between CREDIT established those policies than you can sweep back the sea with a broom! Paul Porter says that people must choose THE and by un¬ by too low since' deed me understand deficit of $1,900,000,000 for the war the President' removed all year, but again its estimate of tax I pre¬ wage controls and proclaimed the receipts seems excessive. doctrine that wages could be in¬ dict that properly calculated, the creased while prices were arbi¬ deficit will be at least $5,000^000,trarily held down. He encouraged 000 by the first of next July. Of the most general■>increase id sal-1 course Ythis creates the purchasing aries,as well as wages, which the power out of thin air and with ;a country has ever seen .and these limited supply of .goods, forces .now can never be adjusted dowri- further price increase. ; In in Price controlcan .check ; assisting our fellow American how, Why, and when, they should invest their savings educate—or to lead. Furthermore,, the estimate for ex-- bilization. Unfortunately, we have pendxtur.es by Vhe Exportrlmport neither. /For* price control is in¬ rectly to toe Truman economic polices. Immediately after the of bring it about. no- more own NO OF enemy -of inflation whi le pursuing all of the policies calculated to don't under¬ another. Y witnessed the confusion in the productive forces of this nation have won a victory dom in what happened last week. BUT WE DESERVE • to is being transferred an-'international organization to Truman Economic Policy The whole situation not ernment and for *V-v%r,. • stand why ii must ; not bs counted since it is the property of the Gov¬ come. i *''*'V '* does - then even citizens as to we face the collapse which follows any arti¬ be transferred to the International increases, la stabilty This $1,800,000,000, mostly in and to market." Meanwhile the law of supply and demand reigns. Y.. Those of us who are engaged in when that"* happens expenditures for the which began July 1, almost year after V-J Day., is $41,500,- wise credit policies. The President has posed as the all of . 20s, except that we are loaning the taxpayers' money. It is unlikely that these loans will ever be repaid. If they are not stopped entirely, they will "be greatly cut down in rate, and a some • ! situation exists today same in' the least difficult • the substantial of one old and in their adding to the severity of The The total ;rising spiral with stakes and less ^productivity. Even if we cain ♦check this rise, it will be very- " was an They heard them rant, listened to them plead, of the planners themselves, when impotence they finally said, "We give up, but it's not our fault that the little pigs, the sheep, and cows won't listen to us, it's some other politicians who have convinced them not to come export industries ficial inflation of business Yforces , in year 70% There is governmental control of our economy. The people now understand that small rpen in Washington (no matter how arrogant) can not put meat on their tables. They saw these little men try one plan be productivty of labor, this meads that labor ,costs (and labor is at analysis) have increased moiie than pricest and the price of man¬ ufactured goods will have to be ^adjusted still more upwards if /they are to be made at all; This ?■, the as steady/In¬ a resulted not the depression. ■ , would causes civlian 'employees of the War ,and the Navy Depart¬ ment and outside of that Depart¬ cveir these -loans which has occurred war We built up DUTTON adage that when a small man is given author¬ ity he sometimes becomes unbearable; but when a big man acquires such a position, it makes him humble. Last week we saw the be¬ ginning of the end of a nation's blind faith in what has been termed private an artifical - repaid, all lending stopped. Exports col¬ lapsed and wide unemployment the among still 58% . since the crease of fac¬ from - ' JOHN Tried and Found Wanting learned export business. Then in the 30$, when it bepame apparent that This compares to less than a mil¬ lion when the war started, and a The prewar. average hourly wage rate tory have loaned ' Jarge sums -abroad, for sources. Already .according to the Bureau of Labor: to 563,000 under the last Repub¬ Statistics, the cost of living, .which • lican President. There were 118,500 in January, 1946, had increased employees in the State of Illinois. .Practically .all of the de¬ 33% over prewar, >. has .now over should we By foolish lesson in the 20s. At that time we . more 45% ^ ,/ . peculiarly the I; most \part for terminal leave and billions for r .brought about by the ^policies of < V-J Day, there were still 2,711,165 the Truman Administration. Much employees on the Federal payroll. reached up prices for goods heeded in • serious : seems because our I urge strongly that health program, billions for Social you elect the Republican candi¬ Security, billions for UNRRA, bil¬ date for Congress at large, Mr.; lions. for foreign loans, billions midst This 2091 Securities Salesman's Corner the same time'force many types 'of. this country.:. . .an this District. FINANCIAL CHRONICLE . f- / Marital 9*otafiow and Information oa a# California Sacaridal ; 2092 in Chinese Communism—A Menace to World Peace Communism Few would munism that state political liberty are" compatible. The Com¬ by nature of its inner logic, cannot and will not tolerate rival parties. The eco¬ nomic democracy boasts economic of which involves planning it totalitarian that entails the suppression of economic free¬ Since economic freedom of choice and political liberty are ireally inseparable, Communism is .the antithesis of the democratic Communism system. in China stands, therefore, in opposition to the development of political dem¬ ocracy, well as as liberal a economy. This is not to affirm, of .course, that the present Chinese Govern¬ ment is democratically consti¬ tuted Chinese Com¬ totalitarian a of China. ;Jjj'.':,; and that the present economic or of the Kuomintang is not toward increasing con¬ program leaning trol. But with the as we concerned are possibility of China's development to a full-fledged democracy, we should not allow ourselves Democracy to overlook the funda¬ as Interlude an : It is true that the Chinese Com¬ munists fact that the pamphlet Mr. by chairman a Tse-tung, Chinese the of munist Party. to Mao Com¬ But it is necessary inquire into the real character of this "new democracy." Accord¬ ing to Mr. Mao, political democ¬ racy in the Western sense is no than more the first of the stage Communist program. It forms the requirement of the minimum policy of the Communist Party. the In the long run, however, the goal of the Chinese Communists is establishment the state. ' $$$? . immediately be¬ fore the War, a liberal economic program as an instrument of gov¬ ernment policy, was clearly dis¬ cernible. It was interrupted by the War and its full resumption at present is prevented only by the unsettled political situation, both , {domestic and international. The Kuomintang and the Communists :;v" J% The principles laid down by Dr. :Sun Yat-sen, from which Kuomintang has invariably a problems, the deapproach to <nived its fundamental China's - capable of liberal interpretation. So far as are this Mr. Mao of socialist a further in states political tract that there diate program -Three Peoples' the Kuomintang have in common, and that, there¬ fore, it is possible for the two parties to join, forces. Party and Principles the of We bear must in Soviet when Russia was not yet allied to the Western Powers and was, therefore, interested in the continuation of Chinese resistance Japan, which to doubt served no to weaken* the latter. The period of collaboration be¬ tween the two parties in China was clearly defined by Mr. Mao from the ;!:hen impossible the limited. as than the result of it foreign policy, Communists have the now seen second their avowed policy? to the fit to stage of It is well to remember that for not .If tonly there were diency. interval of an without the constant men¬ ace of an independent army owing allegiance to a political party which knows no tolerance, the -.greatest obstacle to the develop¬ of ment China of rfche economic toward political field fullest liberty would moved. be in re¬ .vV The fundamental difference be¬ tween and Chinese the the Communists Kuomintang fact that the former lies in the ideologi¬ cally anti-democratic and inimical to economic freedom of choice, the latter, though whereas means an within a by no ordinary political party democratic auevertheless, on country, is, the whole demo¬ cratic in outlook, In are other words, favorable y of One foreign main the opinion *; ; reasons has often why taken the Chinese Communists for pseu¬ do-Communists cals is out by the land agrarian radi¬ reforms carried the Communists in their under or control. The Com¬ changed the actual methods adopted in carrying out their land policy, and political expediency has invariably beefi the factor de¬ termining the methods employed at any time. In the years prior to the "Long Kiangsi to f.the northwest, the Communists adopted the policy of confiscating March" , from well as "large" landowners as the physical liquidation of the the latter. This policy was con¬ (Kuomintang would eventually re¬ linquish one party,rule and aban¬ tinued in the first years of their don economic collectivism, where¬ rule in the so-called Shensi- BEECH-NUT PACKING COMPANY Reports for nine months ended Sept. 30: ble of diverse rate, Net profit before federal taxes.... $3,249,641 taxes...... /'' held by 437,524 shares the Company, of whereas program 1,150,000 there is the to large tive central core Communists, it is more a majority of are Kuomintang and constitutes army, a to certain a extent the at / '• tion. this we $4,460,569 2,895,000 $3.58 real economic The formula is one: a initiating of reform and re¬ real program inability to do Exploit the so. so¬ cial discontent thus generated and expand your own power. This that does the not able concrete program * - however, mean, Communists would temporary truce. to a them the opportunity for political infiltra¬ tion under the unstable conditions which , is munist inherent which diminution all of circumstances. the indus¬ be further tightened without ducing large-scale famine starvation. vfe The Impossibility of now If the above argument is cor¬ rect, the logical inference is that there is breathing 1 «; - space /rv.'-. * " experience of General Hur¬ early negotiations is re-lived by General efforts at media¬ in his While mintang Lasting a a "'.; in the being tion. Coalition election the of some diehards Kuo¬ doubt have no r of the fiscal 1947. year Merrill of man Hanson Director of Investors Stock Fnnil * MINNEAPOLIS, MINN. — Eu¬ B, Hanson, Vice-President gene and Director of Northern Finance Corporation and Minneapolis Se¬ Corporation was elected a Stock member and committee vestment Fund, Chairman * to this ceeds underlies the impasse. Stock The Way to Peace to come coalition government composed of the two parties can endure. In an and terms way operate to ordinary political as party is to economic <•' recovery in view of the fact that the Chinese- promote China generally, and to advance Communists now l and M. Dain Minneapolis. resigned y , a Vice- & Com¬ He suc¬ Hubert as a Kennedy who director of Investors Fund, Inc. tional Bank in of in¬ ducing the Chinese Communists to only effective , Barney & bankers, W. in¬ formerly with Company, in¬ was vestment of the Investors the \ ' Mr. Hanson Smith, of of E. E. Crabb, Board, an¬ Inc., of nounced. day, the fundamental attitude of the Chinese Communists really The Investors members of the Committee. Vice-President unbridgable gap be¬ tween the ideologies of the Kuo¬ mintang and the Communists re¬ spectively. This means that no Committee for ending Sept. 30, Griswold, Chair¬ Massachusetts pany an \/} > Trust, and Hardwick Stires, gen¬ partner of Scudder, Stevens & Clark, were elected as the other to reach up \ t eral to share the blame for the failure agreement V i Dorsey Richard¬ its Administrative President of J. an '.*v. Vice-President of The Leh¬ Corporation, as Chairman of son, man director situation, Marshall and the tional ley pro¬ and if ' , curities The would, entail inestimable hu¬ suffering, as the belt cannot a desirable to more ' Dorsey Richardson -1 • when, in view of the .military and interna¬ is required. moreover, Such peace. Communists the the trialization of China after the So¬ viet pattern at this time man the accompany real truce is all the Com¬ welfare The of absence entail economic inevitably . planning, in creed, .would of Companies announces ,Tn, is desire- Their emphasis is on the economic Investment ob¬ sub-division of the "cake" and not Totaliarian ; Association National as construction. Discredit him for his ; 'The pre¬ simple a a temporary truce because it affords making the cake bigger. Of Inv. Cos. Assn. reconstruc¬ ject to offer. on Dorsey Richardson V.P. a fact, no historians left. peace in be this aim munists have beginning of the Third World War—provided, of course, that there will be any reason Party, On the other hand, by , ards. .VV1, V' as the obvious very concerned, however, the Com¬ So far ex¬ Prevent your rival from population. dustrialization. be of can impossible for the present government to embark on a program for economic recovery and the raising of living stand¬ cannot be ameliorated without in¬ is might be written in history as the munists make it is the utter poverty This poverty economy the disturbances in China the present venting the establishment of real peace and the granting of large foreign loans to China, the Com¬ The major problem facing Chi¬ ■ facing the true situation squarely, militant group intent on seizing dation .of Industrialization nese unpleasant necessity of the* from the Kuomintang position to reduce military expenditure, thereby putting a brake on monetary in¬ flation, and to lay down the foun¬ Kuomin¬ *"v"'V • this were nomic problem of China cannot be '■ effec¬ an A-.•./•; : Chinese Communist would may be accused of inefficien¬ in carrying out land reform, it least recognizes that the eco¬ r and is already fairly ad¬ cannot be sincere in its profession for peace. For, if there tang cy man vanced in China. power, the In the second place, purpose. the free or For the China, in choosing the methods for The strug¬ totalitarianism between because cajoled and, because of ignorance, can be easily in¬ doctrinated. Poverty breeds dis¬ less unscrupulous was gle their opinion, we have to bear two things in mind. In.the first place, we must realize that the equalization of land ownership is in fact one of the major tenets of the economic policy of the Kuo¬ mintang. Insofar as the Kuomin¬ tang had failed to bring about this fact that it con¬ Most of the peo¬ opposition. erced -the to disposition of postwar inseparably connected is \If the responsible statesmen of The peasants who comprise the Communist army are easily co¬ as outside aim in the greater part of it was at least partly due the to with the fate of man. the Communist Party, possessing a good impression the practical re¬ sults of their policy have made on of political democ¬ racy and economic liberalism in China. The future of China, simi¬ countries able to act should shrink content and discontent as in the interested are more ple in the Communist camp have joined it because they are opposed to of becdme the First Minneapolis. a Na¬ : ' Investors Stock Fund, a mutual investment company with 5,000 shareholders began operations in July, 1945 and now has total as¬ sets of $7,300,000. Vr/vv-'v' ' ; — possess an inde¬ pendent social it is further obvi¬ they would not attempt to bring about a' "revolution by consent." v> army, The only way First, there must plat¬ on Two involved are approach. in X, must b^ large for¬ eign loans to the present Chinese Government. Secondly, there in which the Chi¬ political struggles and equality. factors this line of Communists may be convert¬ to justice essential that ous be thorough reforms within It forms within a constitutional framework is the removal of their the, Chinese Government. even be desirable to arrange for¬ armed eign loans in have internal reform forces. as To of a such is the attempt coalition gov¬ a bound to fail. > *$2,099,641 $1,565,569 *$4.80 well as Com¬ control who people. C; But, the Chinese Communists -* " their million vinced Marxists. announced ' . Communists claim than doubtful that the inter¬ far all development Europe, ; second-largest 100 of fervent At any so as ■ . In establishment 1945 earnings for the first nine months of 1946 include net profit $507,508, equal to $1,16 per share, resulting from the sale of se¬ curities the have, under land policy was concerned, they had not yet decided on the degree of radicalness for the fu¬ ture. be than their condition. such Since Besides, in trying to mediate be¬ tween the two parties, the United of recovery and States from has pressure after taxes..... "Net of methods Communists the Chinese - pretation is only too clear. ernment 1946 on / enemy. a munist Party in the world and to be dictated by neces¬ That the last phrase is capa¬ sity. ed Earned per share to of orthodox way as may nese Net explanation from revolution is to proceed in such a munists have,- from time to time, circumstances, Estimated federal The . areas the land of given the most the "large" landowners in the initial period of the Chinese Communist in Agrarian Reform peace guarantee Communist Aim According to Mr. Mao's "new democracy," the dispossession of of episode in Soviet communism, is a mere interlude dictated by expe¬ smce to the over Chinese between the Communists and temporary manage de-conven- with than more Truce, but Not Peace, ' Sino-Japanese the and it situa¬ solved by land reform alone, the Kuomintang at the time when Bsr. Sun expounded his theories. M 1937 the "retreat" clear orientation of So¬ a proceed Is that, in view of international changed tion and viet outset really sacrificing any of their principles. The much advocated "new democracy," like the N. E. P. more down in of no of lar con¬ but be re¬ temporary military truce. should bear in mind that whereas principles seem to indicate the Communist Party, expediency approach in the is the sole criterion of political iuconomic field, which in the ulti¬ tactics. Besides, in reverting to a mate analysis would indeed be policy of non-cooperation with the {Contrary to political liberty, this Kuomintang, the Communists are no conflict, this liquidation, would succeed if it did, the even trying to understand the part ploited to the advantage agrarian reform plays in the Com¬ Communist Party. of the Communist munist socialist was toned was are these & and cannot manner certain points which the interme¬ doctrines of years policy of outright a themselves, in 1944, that mind, how¬ Kuomintang as a Party are ever; that Mr, Mao's ''now democ¬ perfectly compatible with the re¬ racy" was published in 1940, at a quirements of a political democ¬ time when Japan was indulging in racy,. as well as of economic aggressive warfare in China and In was fiscation sult district. , now of which have been outlined in the liberalism. It border speak of a "new methods was that, otherwise, the democracy," the essential features dispossessed landowners might go , mental Kangsu-Ninghsia outbreak mutually Party, dom. the munists would make Com¬ munist ©ften favorable cir¬ same cumstances, Freidom versus contend given the as, (Continued from page 2074) this easily and, munists. sure or to no bear can on exerting the on only bring the Com¬ or indirect munists. another, coercion one disguised and on Admittedly, the Com- to attached as the program reform, when car¬ will detract many a man Communist camp, it the be manner that it cannot obstruct the execution of the program. [ The Wagner DETROIT, MICH. — Ferriss, Wagner & Miller, Buhl Building, members of the Detroit Stock Ex¬ change, were completed honored for having years of con¬ fifteen tinuous service The tory on the local mart. Exchange in message a congratula¬ pointed out that members of the firm have served the Exchange in every important off'^e and on nearly every com¬ mittee and had been lactor in an important its progress. pushed forward without opposition. While this program is being carried out, the Commun¬ ist army must be isdlated in such Kuomintang a as as way delay and in spite of Communist pres¬ offer it encouragement, in form ried out, must directly She of means a may Honor Ferriss, above proposal requires mediation daring statesmanship on the part Richman & Co. Formed BROOKLYN, N. Y.—Aaron W. Richman has formed Richman Co. 50 with Avenue. offices Mr. at Richman & Lefferts was pre¬ viously connected with Luckhurst & Co., Inc. , yolume 164 Number 4536 THE COMMERCIAL & FINANCIAL CHRONICLE part of labor of need for greater Scouting the Economic Front (Continued from page 2083) duplicity and plausibility of enemy's program. Here is a tragic paradox — Communism the the which is the worst thing that can happen them the to masses to seems their brightest hope, while Private Enterprise which is the best thing that can happen to the masses seems to them a thing re¬ served exclusively for the upper classes. * Let take us quick a of the situation inventory find ourselves we in this morning and study the ter¬ rain the which over must we fight in future. near have to think I safely can that say Americans do not like controls. Well, whether there not, or the on that will exercise the economic a con¬ business life trol on profits of every future in the * man , , front degree of and room. like them or eight compulsions are forces we ; of our production, pur¬ chases, investments and sales; that buying power withheld from ex¬ penditure and investment shuts down equivalent employment and , # First: The, world-wide swing to the of left. An economic awakening the masses that is sweeping the continents of the world. across It is grounded in a desire for se¬ curity—in a belief that security lies in the state operation of bus¬ iness—in a conviction that eco¬ nomic security is more important than individual freedom—in the fanatical idea that, the state can provide a better living standard than private enterprise. In a de¬ mocracy it expresses itself; in votes—and we either vote or into such a in America could legislate ourselves state controlled ecori- omy. | ' ' Its great danger is that it is grounded in economic ignorance, r. Second: The second compulsion is economic ignorance—if we can call ignorance lite name It is no ever name a force, A more po¬ Economic is less Illiteracy. dangerous by what¬ we Nor is this illiteracy confined to the so-called masses. From top to in life industrial American have failed to clearly de¬ we fine to ourselves what is free en¬ terprise—what is American the of life. Exactly how does a way free economy work? What causes periodic depressions? What was wrong with the pattern of free enterprise / that preceded the great depression? How can free enterprise be shaped to prevent another great depression? Labor thinks it is working itself job when it lays 1,200 bricks per day instead of 600. out of a Many workers actually believe they can have more by producing less. Hence featherbedding, madework and stand-bys! Both labor must dig out the truth and be able to clearly answer to themselves and others the great economic question of the day—How can we have management and both freedom and a reason¬ able degree of Less economic security? Propaganda and :: More Education ■ Specifically, why can the man on the street expect to have more under a free enterprise system than under a system of production for use with state controlled dis¬ tribution? ganda one and need We more American in less propa¬ education. a hundred Not un¬ derstands that consumption is the ward As a matter of limiting realistic fact, technology has advanced produc¬ point where the only road to freedom is the selling road. Does anyone think that the tion to the trend individual to¬ output, be to seems cruculence, belligerency, pug¬ nacity, and general cantankerousin human ness given - nature which has what someone has called "versus" complex. This has re¬ a us sulted in dise. "Capital "Management vs. — Employees";— "Government Business," etc. These hates > Non-advertised ing sluggishly. ing fanned by self-seeking dema¬ Our gogues. great have groups classes found never and products mov¬ price offers are becoming more frequent. ,• Real Estate prices are off from way to work together harmoniously— fairly divide the joint produc¬ Interdependence In Economic Life tion; to find a strategy whereby peaks in 13 cities. :-'v Automobile retailers Third: Perliaps our report greatest Business, Agriculture, Labor and danger is that we will fail to rec¬ Government can lie peacefully in heavy duplication of advance or¬ the fellow stand minds we chain how totally interdependent are in the light of the present of ders with competitive makes. In the home building bed! Resentments in the same sense being abused by the other rankle and i burn in the of opposing groups like reaction which builds several hundred thousand houses started early in the year but their completion has been delayed for seven or more months were up situation, and the coal, rail¬ into explosive antagonisms. The road:; and shipping strikes is a customary relief valve in the sit¬ the meat strange intellectual phenomenon —but our traditional rugged dividualism is dying hard.. in¬ mixed economy, a the shibboleths "individual economy." freedom"- . "Every self and the most", is much of cling to slogans of we and and.,"free man for him¬ devil take the hind¬ still prevalent in thinking. Time was, almost up to the turn of the cen¬ our when Americans had the economic background for individ¬ ual independence; when the ma¬ jority of families either produced were or able to barter directly for the necessities of life. is action, but this to resort to 1 to • On top of the $1,500 to $2,000 black market inflation in the sell¬ We have time, to barely men¬ tion three other factors that may economic future.' Their needs cance ing price of these houses, another $500 to $1,000 each has been added our signifi¬ emphasis—They: no to the cost because of delays. With the limitations of FHA ' are: ; ; committments Sixth: A Public Debt now al¬ prices most equal to our total national wealth—and still growing. Just more than the in government total cost of - • its potentials are extra the with ceiling GI Houses of costs must contractors Existing ou' come pockets. Con¬ financed them—and even existing demand, thou¬ houses will be slow to ing economy tween on on free of the world is be¬ individual enterprise the one hand and Communism the other, whereas neither ex¬ ists as The a reality in today's world. actual issue; is between a mixed economy, wherein free shall independently and co¬ men operatively plan, organize, direct and control our economic affairs, through voluntary action, and a Totalitarian economy whereby by default the Government shall take over the direction and control of industry and enforce cooperation by police power. trols industry of lished fact; it is degree. We Government are con¬ estab¬ an question of the gravest now a in are, danger of losing our last economic freedom, the freedom to cooperate voluntarily, When we confess our inability to cooperate voluntarily and Now let that us closer to the daily op¬ eration- of our individual; busi¬ nesses. something economic front are always happens we on the don't like. We seeking laws which will curb the other fellow oif one hand while seeking freedom from restrictive laws for ourselves. The grand trek is on to to dump our of of the building industry ceiling prices figures OPA. The the books on coming reces¬ sion will be felt most-where black market prices have reached the highest level. The old saying the bigger they are the harder they fall shall hold true. constantly current consumption and personnel are use. somewhat years of a sellers' The attitude toward sell¬ profession is deplorable. a tribution.-, Eighty, ' i ' , cent those who out of the retail field did not to go back to retail want per of work, 50% of those who had previ¬ ously engaged in selling did not want to go back to selling. Peo¬ ple do not like selling, and they, do not want to sell. Adequate and compensation schedules and in¬ centives have not been set up for salesmen, particularly for the most important sales job: that of retail selling to the ultimate consumer. V-How will hardwood eight general you meet these three specific study year? men and challenges as plan here for and NN-N./r'N" you next •• :V . I have purposely avoided a de¬ tailed .discussion of the Hardwood Lumber business. or N Your President others far more competent treat these in detail. have I the presumption will Neither temerity to tell you how to run business! But I would be remiss duty if I didn't suggest to specific very and in my you ten definite steos that you might consider taking in meet so-called some be sales totalling inadequate number returning veterans are seeking salesmanship and dis¬ black present I refer to the forces of Inflation and Deflation. Both forces are Ten T .. individual businesses to these problems. Points of Action in Meeting Tomorrow's Challenges! l.; Build An -Organizational Bridge from the Five-Year Sel¬ lers' Market to the Coming Buy¬ ers' Market—1947 is certain to be a transition year, a year- of or¬ ganization and preparing for the intense competition ahead. < During every this transition period businessman should thor¬ industry I believe oughly overhaul his entire pro¬ duction and distribution machin-. production in¬ economy and not on a 35-hour cluding imports is at the ery and personnel along the en¬ highest week schedule either. point in history. It is„ tny under¬ tire chain from product design to Inflation means a greater money ultimate consumption or use of standing that some gum lumber It might be noted supply than goods, deflation more has been sold under ceiling prices his product. goods than the money supply. and that more hardwood lumber that you men in the hardwood Inflation doesn't mean a boom— is business have the longest produc¬ moving to the flooring mills. it means less tion and distribution chain in the goods for a dollar. So much for the immediate past world.' Deflation working doesn't sion—it dollar. ' . While work a free depres¬ goods for the "X' We built twice tionary in mean means more ary year, the bad habit of saying: "There ought to be a law" when¬ tackle certain forces come . gotten the " that will inadequate the field of your Any realist must admit today that the black market is the mar¬ just net A of material market prices is indicated. and more important environmental forces. last freedom. , from are for example, The next great danger is Washingtonites. Even the most conservative of us have building New York to Washington. So much for a few of the dump our problems in the lap of Congress, we sacrifice our Fourth: prices and ket in the home though the struggle in the politi¬ other. cal 42 lumber hours travel from any A B-29 the other day flew 12,000 miles in less time than it took our grandfathers to go from over as your asking prices. understood, we do realize that This means that new starts will In the last century we have de¬ humanity has been ;; given the be fewer next spring—at the very veloped a specialized production choice - of time production will be destroying itself or reaching of a million patents. Our inde¬ learning to cooperate. new heights and a recession in Eighth. The Annihilation of Dis¬ tance—No spot- on earth is today over, spoiled by five and sell at the businesses with to sales into than I of is shrinking sales organizations are depleted from raw mate¬ rials selling clear through the production and distributive chain have the facing Our - pendence has shrunk proportion¬ ately. There is much confusion over terms. We talk and act as Many together with lumber dealers whc sands Energy. While not fractionally is margins of both gross < and profit per dollar of sales. • with Seventh: Atomic • sale tractors will have serious losses- of pre-depression years. and the on these servicing this debt annually will cost whole series of a deflationary headaches. . change the whole pattern of No This will bring further : beyond Vz months completion normal 3 time. legislative leads loss of freedom. In spite of the totality of our interdependence and the actuality of uation honeymoon management came industry a profit gross .. ognize the completeness of our in¬ terdependence in our economic life. How we can fail to under¬ - dences of a breakdown in tradi¬ tional distributive channels. The market. Cut a greatest badly and radiant heaters above previous totals. 200% are production the plans, organization and personnel. ■ Convector vs. be¬ are our face the jockeying for distributive preference, there are already evi¬ III. - The production of electric irons is 85% above previous records. headlines like, Labor" vs. will dogfight in the his¬ tory of American business. In the competition for retail outlets and caught peaks). • ' Consumers shy away from new brands and unbranded merchan¬ • as In your own year. Now pressures both are at inflation and deflation—the brake on either extreme inflation or Historic started extreme de¬ from go their money. but pressures $28 ' N at work continue therefore three for it is coming once some safe to develop- can name the exact day, it II. As the increased to ; come era the One production of which we have seen. of that the the like the more more economic you have of laws a is thing difficult it is to sell at profit. The greater the volume of production, the more pressure there is on the price. The greater the pressure on the price, the more deadly the competition. The a cide to completely overhaul marketing structure: / * your Re-appraise the mental and physical assets and capacities of the company. » . . - Recapitulate the company's maximum potentialities. Determine the market, poten¬ *. Adjust company production to market potentialities. Determine logical sales and profit objectives. , of full employment hits the mar¬ ket we are in for a competitive never following 30-point chart might be helpful to you if you, de¬ tialities, national, international. Buyers' Market Is Ahead! one appears, certain some time next year. billion in cash in the pockets. of the Washington— people, the enormous unfilled de¬ problems in the lap mand for nearly everything, de¬ deflation A Buyers' Market Ahead I. A No " indicates with;-/:., supply—the willingness or unwillingness of people to spend - to • The we experience will and predict money the do •ments that you will have to cope flation is the effectiveness of the Inflationary today include where that this trend time influencing : and current situation. homes, in 1921, a deflation¬ than in 1920, an infla¬ various hardwood here? many Congress for a legislative solu¬ clining individual production, profession of selling would have tion. Pressure groups whether la¬ shorter work weeks, strikes and the place it does in the opinion bor, business or agriculture all government deficits. of the public if this truth were seem to forget that every time we generally known? We have got to pass a new economic law we are Deflationary Pressures sell selling, sales management, and one step nearer a state controlled Deflationary pressures evident salesmen as the real job makers. economy. There are 1,250,000 laws in the current picture include, If we could develop this kind on our statute books now. Some growing inventories, fuH employ¬ t)f economic literacy, we might day, if we keep on running to ment, increased awareness on the Radios are moving slowly (pro¬ duction is 45% above previous inherent an to ever salesmanship de¬ termines who gets and keeps the jobs. -N;-. the reverse , is that competitive maximum a standard of living and, whether management or la¬ bor, give a full day's work for a full day's pay. ; into only road to steady jobs, to have our must we mother of employment, that sales into ultimate consumption or use the we are growth in tury, call it. " bottom decreases the total amount of goods and services we can consume; There hit we we competitive - . that if When stride our • level intensive the competition, the lower the gross profit. more production, declining price of stocks, shrinking gross profits, in¬ hope that the ma¬ Washington for the solution of our creased commercial loans, govern¬ citizens would un¬ problems, we shall find that the mental bungling, buyers resistance derstand these truths; that individ¬ sheer weight of economic curbs to increasing prices,-^ duplicated ually and collectively we can have has made state control a reality. orders at retail levels, and a new no more than we produce; that to Fifth: Then we have the prob¬ caution in investment and expen¬ have more we must not only pro¬ lem of Warfare on the Home diture on the part of consumers, duce more but trade more and Front. Instead of working as a investors and management. consume more; that' any kind of team in American enterprise—our Some specific evidences that limitation on salable output low¬ ends, backs, tackles and guards all Deflationary Forces are in the as¬ ers the standard of living of all; go into a separate huddle before cendancy: that our standard of living can each Truck tires are play and each player selling at a dis¬ rise no higher than the balanced wants to be count. ' '■ ' ' quarterback. reason jority of * I 2093 Establish detailed and decen¬ tralized production and distribu¬ tion quotas. Review " philosophy, structure, channels, and patterns of distribu¬ tion. Project credit terms and dis¬ tribution financing. Establish distribution cost re¬ duction techniques and incentives. -Revise sales stimulating tech¬ niques and incentives. (Continued on page 2094) t' ■ " . THE COMMERCIAL & FINANCIAL CHRONICLE 2094 Thursday, October 24, 1946 mmmrnrnm Talking with them, not to them Front the "distributive chain, Produce markets, Coordinate advertising, promo--, tion management deals with the markets. (Continued from page 2093) tion and | fabrication and internal and external training tasks. ' Set up internal executive train¬ ing (conference method). Devise personnel rating and specify This must of techniques. train. trainers to by training or the and limiting distributive waste breath and greater expend¬ one itures distribution in the next, on but it is retailers perfectly consistent A Let's state it this way: tribution • •, No dis¬ low enough if plan¬ there is the slightest waste in the coordinated into final consumption use,' AaAY ' effec¬ can assure wholesaling and retailing going direct to consum¬ ers by building adequate franchise structures and then training all without • distributors' service organization training. Cooperate with formal educa¬ tors and U. S. Department of Edu¬ Improve factors on the distribution Manufacturers in are a chain. far more favorable position to develop re¬ tail training programs than their - economic in mer¬ tive techniques. Improve distributors' salesmen and staff training. yA{v{A Coordinate be Manufacturers . cation. in his products into ulti¬ consumption. It means that chandise a a Improve distributors' recruiting, compensation and sales manage¬ ment equitable com¬ costs are own planning retailers spread the cost for the postwar era. because over a they large can num¬ , : We should stop saying, "Distrihution costs are tob < high,'^un¬ less- qualify the statement by specific instances of distributive waste. It really doesn't matter what percentage of .our .purchase dollar goes Y forA distribution '{if there is no waste involved. When we need more sales vol¬ ume to -sustain employment, • we should leave no dollar uninvested we in additional sales that duce them at a cah< pro¬ ened through mutual agree¬ of'an enlight- .; public opinion. These {•{{{?{ • at ; . { representative ,V groups { Decent environment and pleas-, would be an effective educational ant working conditions. AA{ medium to whip the problem of of ning and action among all sales process. No distribution costs are factors, from factory doors to ulti¬ too high if they can produce ad¬ mate consumption,, on the com¬ ditional profitable volume with¬ ■ AA; mon A " >1, \ '. problem - of moving mer¬ out waste. training. training voice wholesalers there- must Improve company sales, staff and field organization training. Review distributors' executive Deputize a about that the producer means have the mate ; , pensation plan. We must tap ever larger reservoirs who propel operating sales raw chandising polities and practices . and export paradoxical to talk ' aptitude testing techniques. Interpret management policies to distribution employees. - yYY'' Revise company recruiting, com¬ pensation materials into markets,' new Fair wagesY An •• rived ment and the power buying power and A demonstrated interest in their ready-for-use products. It is im¬ ever deeper levels of consumption; health and happiness. • we must A .t expend our external and perative that the producer should direct those processes which are internal sales budgests and sales c Opportunity to grow and prog¬ ' (AfP ? A' .! Y'A;{■ ■ 5A • A?- ress,{.'implemented with training necessary to get his products into personnel. facilities. {One wise management ultimate use or consumption. a;!:: It may seem sales activities. Measure of ; or at'.them.;.AA;: :.{•{{{A/A;A;;\ economic -illiteracy v r the; grass{ roots { where it must bev whipped. ''. :"'{' ■ f ;r.. £ ; Some might argue that this type of organization would be nothing;calls its personnel records "prog¬ but; a debating society. -Well, if ress records.'!) '* A ' ';{• they; will prevent a State-con- ! ?i Some responsible management trolled economy I don't care what! factor to gripe to and the assur¬ they're named. ance: that their {gripes will be A It still holds true that discus¬ fairly handled.':: ,,:,Y :yAA{ Ay; sion is better than silence, reason, {{{A; y A sense of "belonging.'-' A mem¬ is better than violence, coopera-: ber of a winning team. tion is better than anarchy,, and" ' {In providing these management democracy is betteir than tyranny.J { will need to re-appraise and re¬ It is a simple formula for detervise such techniques as recruiting, mining what is the right thing selection, indoctrination, motiva- do cooperatively. A. t'on;. training,; compensation, and '. j; 9. We could not close a discus¬ the supervision of manpower— sion of the part management must both production and sales. Per¬ play in meeting the problems of-: haps I should have .said especially sales, manpower.: Employee turn-; necessity of d^ermining industryoverwill be a y far more costly by industry of tfie part the f/ov-. problem in the future than" in the ernment should play in the sucp right* at . , ■ past; 8.. " y: : Build*.. New improved and Structures for Economic Coopera¬ tion Outside pfGovernMeni-^his the only, possible is proift. cessful operation of each.: y Make ho mistake, that with • ; a 300 billion dollar debt to manage: the government is a permanent' part of our mixed economy—gov-! ernment regulations will be a part: { vent ever-increasing controls of effective antidote to of our operation from here on out A handicaps in a free choice the economy by" the State. The question then is to see that market is more and better selling. a We; recognize• that .we must co¬ the {government's: part* of our" cieties, industry and competitive their consumption creating activi¬ The question is 7. Better Human: Relations- operate to exist. economy is constructive and helpties if the manufacturer's fran¬ groups on distribution problems. Arid now we come to a manage¬ whether we shall nave govern¬ chise has three elements: (a) bet¬ ment imposed {and enforced co- ful, rather than destructive > and! Organize, supervise, interpret ment activity at the very! "top tin harmful. - " ter profits for the distributor than A and consolidate distribution re¬ importance—that is, your relations operatipn, or voluntary coopera¬ A We must he stop damning bureau-- { might otherwise maker- (b) search and tests. A / with youf employees and your:, as¬ tion, by free-enterprisers,, r • cratic toterfarencer.'.wi^"? private; consumer acceptance and demand .It' is just .that simple in prin¬ sociates.r .-V ^ AYAAY Operate clearing house of new for the enterprise until -industry by in¬ product; and (c) manufac¬ A A". :;{;A:{AAGood public relations rest upon ciple.. sales and distribution ideas. turers' advertising spotlighting the we are, prepared ta be : Our economic interdependence, dustry good industrial relations and good Plan, coordination and follow distributor. specific in verse and paragraph as. a ' industrial relations on good human our universal individual capacity to what we want done through by company's line, staff, by govern¬ We can look for more closely relations. Human relations is the as produced, trader and consumer, ment and what areas we want left field organization and distribupartnerships in marketing bemakes structures for intra-indusmost important problem in busi¬ tors' personnel. to ourselves. • tween each manufacturer and his ness today. In, fact, Vail business try and inter-industry ^coopera¬ This is;one of the most.vitalSupervise consumer education"' distributors and between manu- problems tion, integration, and coordination may be synthesized at tasks before our industrial asso¬ (coordinate with advertising pub- • facturers' associations and retail a. vital necessity. The counter¬ the level Of human relations. ; :V ciations, and one of the biggest licity and public relations). : ;' associations in the same industry, balance to Washingtonitis, to bu¬ The future of any company to¬ jobs of management; !A 2. More Effective Market Re* f t5. Elimination of (.Distributive reaucracy and government {inter¬ day is determinable in terms of its : The obligation of management, ference with competitive search Analyses and Salescasting Wastes—Distribution is essentially enter¬ is to manage, it is management' manpower. ^ /; —It is imperative that manage- motion; the movement of raw maprise is the ability of industrial failures which have {brought us. Mental aititude governs > both: ment find the answer to the para- • terials through the process of fabmanagement to organize coopera¬ to the pass we are in; ;, '" • tiox of plenty! .There is no down rication A warehousing, transpor- the quality and quantity ' of the tive planning and action, and new individual and the team. .• { Summarizing the stewardship'of r < standards and ethics, in the liajhit cycle in human wants. The total tation, selling and delivery, into industrial management in this new Wherever market is unlimited. There is no ultimate consumption. Productivity is the kev to a of public interest—thus avoiding age includes the areas of govern-: known height to which the Amer¬ there is motion there is oppor¬ higher living standard, and better unneeded and hampering legisla¬ mental relations, public relations*, for the application of human relations is the basis of in¬ tion. ican standard of living cannot tunity p: g competitive - relations, " customer, climb! And yet we can have over- engineering techniques. The same creased production, f\ •' ' A { Because'of a fear of anti-trust relations, distributor relations and production of individual products scientific and engineering apSuccessful management is <de{ laws industrial management has community relations, as well as. and partial collapse of the mar- jproach should be had to distribuveloping people and getting the shied away from cooperative ac¬ the previously accepted responsi¬ ket. We must find the causes and, tion problems as we have had in most out of In the interest of pre¬ employee manpower tivities. bilities to stockholders and em-' the remedies for accumulating un¬ the past in the field of distribu¬ potentialities and capacities, in venting further unwarranted gov¬ ployees. ■ J sold inventories, industry by in¬ tion. Time and motion studies are the interest of the employees as ernmental controls in the econ¬ Social {responsibility must. notj dustry. We must •achieve a bal¬ in order all along the distributive well as that of the company.' : La-, omy, this complex must be re¬ be left out. of management deci-" anced production and consump¬ chain. -There should be detailed bor is no longer a commodity subr moved:1:. There are thousands of sions in the future if we are to tion diet. If there is no satura¬ analysis of every "function and ject solely to the laws of supply perfectly legal cooperative plans perpetuate the freedoms and pre¬ tion point in the market as a process and a fight for savings and demand. People are not. ma¬ and activities that could be un¬ rogatives of management. ' A* wherever waste can be found. A: whole, we must determine what the economy for chinery, they are organisms, with dertaken;:, in Nor will this detract from the % Management should have a new minds and souls as well as bodies, mutual benefit which would stim¬ will, and what will not, sell at a profit structure, it will add sta¬ given period and point. We must accounting approach to distribu- all capable of growth and expan¬ ulate rather than restrain trade. bility to the profit chance and have a better pre-knowledge of tion costs with the producer, re- sion. The abilities and capacities Representative groups, covering tend to perpetuate our profit and" product acceptance by the public; quiring detailed knowledge of of our people are far beyond what every livelihood and walk of life, loss system and the concept of ) quantitatively and qualitatively. J every cost from factory door to we realize should be organized at every level pr they realize. \ private property. • Y> We must have wiser budgeting, ultimate consumption, even though from the grassroots to the national •: 10. I will close on a very inti¬ Management's primary iob in more intelligent quota building he is not directly concerned with Capitol, with the sole objective of mate and personal note. producing' profits is to develop That is„ and better utilization of the power the sale of his products into conpeople, machines do not make developing cooperative plans to the responsibility of each individ-. of credit. Our market analysts sumption. A / M profits—people do. { Tomorrow's provide the people with what they ual to Renew the Right Spirit in and researchers have their work 1 In our older industries it is want, while retaining the people's American Life! Y,-;Y *; management will treat employees - h •. ^ cut out for them. '"" freedoms. probable that further savings in as integral A A{{A: A, vAAA^^^Y parts of a family. That 3. Constructive Price and Profit production costs will be meas¬ is the highest human meaning of. iAVe might call such a develooParcel Post to China Policies—Management has learned ured in cents; while savings in the word "company." ment a. FOURTH HOUSE OF DE¬ a : during the war that lowest oper¬ distribution costs may be meas¬ Postmaster^ Albert! Goldman an- r '{ Would you like a management MOCRACY. The guiding principle ating costs are found at "close to ured- in dollars,- because of the of such a structure might be: nounced on Oct,: 2, that, effective^ formula for human relations that capacity" operations. To hold its many wastes in existing distribu¬ "That which is attained by dis¬ al once, ordinary (unregistered will. increase the production of own in competition management tive processes. Management should cussion, and agreement without and uninsured) parcel post pack-A your organization a minimum of must therefore price with capacity not overlook the fact that savings 40% at an increased labor cost of legislation tends to enforce itself, ages up to 50 pounds in weightin distribution costs passed on to volume in mind. viz., all established ethics,,while may be accepted when addressed not over 20% and at a decreased that which is obtained by legisla¬ to the cities of Canton, Peiping.Management will learn in the the consumer in the end-use prod¬ operating cost of 10 to 15%? I uct price will have the same his¬ new economy that 10% of a dime have enough case histories of the tion must be maintained by the Shanghai, Swatow, and TeintsiaY in net profit is probably easier to toric effect in increasing markets freedom-destroying police power and up to 22 pounds in weight* use of this formula to practically as savings in production costs secure than 15% of a nickel; that {AY. when addressed to other places in < guarantee these results. \{A{!{'{A of government." -"AYr have brought about -in the past.: 7% net-on a 200 thousand dollar Each of you here can start China to which the service ex-^ a It involves nrovidng your em¬ volume is more easilv obtained 6. Greater Pressure on the Cre¬ building these freedom-perpetuat¬ tends. It is pointed out that the than 10% net on a 100 thousand ation of Sales—If industry is to ployees with the things they ex¬ ing structures in your home com¬ parcel post service to Manchuria, pect from good management: dollar volume. Thus management move double prewar tonnage into munity by calling together repre¬ and to the Provinces of ShansiY A fair job evaluation—what is will turn increased competition ultimate consumption, manage¬ sentative leaders from every spe¬ Suiyuan, and Chahar remains sus- and shrinking gross margins into ment must certainly double its "par" on their course, cial interest group such as labor, pended; There is no parcel post* incresaed net profits and returns expenditure in advertising and j Incentives and rewards for ex¬ agriculture, education, manage¬ service to Mongolia. Postmasteron the investment. More for less promotional activities. Someone tra thought, ingenuity," resource¬ ment (manufacturing, wholesale, Goldman also says: money at higher wages and fair has wisely stated that "advertising fulness and enterprise. .A retail), finance; transportation, Except as indicated above, par¬ profits can be had through the is moving people toWards one's Reasonable jOb security, and an communication, religion, women, cels addressed to China will be" elimination of waste and greater products, while merchandising is understanding of why they have youth, health, etc. subject to the postage rates and* Wholesalers and Cooperate with government bu-. ber of outlets. retailers will accept manufac¬ on distribution problems Cooperate with associations, so-, turers' counsel and direction of reaus i The only the ' , - " . . . < . . • ... . . . , , , . , ... •• ... 1 efficiency. ; ' - 4. Vertical • Coordination of Man¬ moving the products towards the people." Both processes must have stimulation. ' ■' " it. ' "A { ; The Individual recognition and re¬ spect for their personality"— a sense of being needed and impor¬ Wholesalers and Re¬ When confronted, with accumu¬ this new era consumption,, pro- lated unsold inventories or the tant. y'a. '' duction management has a special threat of them, we must lift our { To be informed of what is go¬ obligation to the other factors in sights to wider markets, fringe ing on and consulted occasionally. ufacturers. tailers of Selling—In imperative agenda before such a group the settlement of local should be economic problems that would re¬ other conditions x 'a i :t ' i i r.-. „ j: < i' i.' v ' t, ■) i i : .? 1. » '. t rl « . at the* regulations of the Office of In¬ production in the com¬ ternational Trade, Department of •. munity or would tend to require Commerce, Washington 25. D. C..^ the passage of m<pre laws to curb are applicable to parcels for de¬ ' free, enterprise — settlements ar- livery in China. AA k . j effect strict • „ ■■■ in present time. The export control* ■) *i, t i': S 1 ■ T.'i i' j > f i : f • r* t - I • ■ [ » , i f-r >. J c*:!- r i > l L':i ... . J- . >/ * ' ' 1 . {,■ {;••{'• , 1 Volume * 164~ Number 4536 THE COMMERCIAL & FINANCIAL CHRONICLE 2095 *hTH$>: also What Does the Sfock Market Break Portend? (Continued from first page) V -.90»'; When tile' crash J- ing - Wc^ri^ in hame. i ties merely registered the prevail¬ bottlenecks, ultimate both resort on depending of the candle forth¬ coming money supply. " That sup¬ ply is not described adequately by business the real well. as burns at The both trouble is bor its that But even ing commodity price trend, as one elimination of all governmental would./ Expect/. ,anddiscounted reference to the face value >of controls, including the ; unlikely its, implications. ! It is the. same inflated currency and deposit fig-! "de-control" of the labor market way on every occasion: the stock market knows little in „ contrary . to. its; reputation, but for time, and reacts .with violent emphasis. • on some In all known • history, major de- clines of stocks and credit bonds have been preceded by one of two "phenomena fcoming crisis. 'cline of both or heralding One is major de- a if not all "sensitive'' some wholesale prices; The other .is a 'serious credit trouble that has oc• not the rising prices in the sectors which engender billions have ductidns be or is known to be in the Free markets can been redeemable duced" without more we • a in the rate world-wide tries to it not years hence). Our running this year, at for our transportation tie-ups, toration the of balance not - casion. total so the on basis of self oc¬ recognizedcrystal-gazing ernment have Overshadowed so tea leaf reading agencies" far this new credit expansion, but would be of little public interest they both are coming to an end. - - it not for the fact that were There they practically is limit, no on "reflect the mind of many an in¬ the other hand to the commercial vestor who seeks guidance in such credit expansion until and unless •primitive analogy-devices as, the the monetization of the national 'average number of months be-i debt .will be; stopped. tween the beginning of a boom; arid its peak in previous cyclesj in the superstition that yester¬ or . ; Be that as it may, the fact is! that commodity prices did not fall before or during last summer's the which will not be that almost: available demand for labor j quantities before another two means must drawn be from other three years em-] ployment; and the competition be-: quent tween natural employers will raise wages g., with cabinets Monetary Situation cannot be provided unless the cabinet¬ /world's makers find that demand expec¬ tations, set-up in which, the largest national debt is being kept monetizable at the world's lowest interest rate structure; in which credit expansion does not curtail the credit base and slowly but ture buyers go begging, or else additional labor and lumber have import-potential is to,, be creased We in—from industrial Germany, our where? this country. As a matter of fact, commodity prices have been rising and the credit structure is as liquid as it can be expected.. -The All symptoms indicate the contiriuation of a shortage economy,] .or of an inflationary boom, two t terms to designate £ the same phenomenon in its physical and financial aspects, forecasters. arid Do Causes of Stock Market Reaction Having said that the much about are. inventories in-; turning point of the,! Per inventories is se, the size of immaterial. : The relevant consideration is the ratio how is the stock and bond market behavior of the last, few months to balance of many upward less price other industrial which is still far ; below "what has that which in 1939. up, must come • er a What as difference does it another example, wheth¬ firm orders 1,000 units to be in 10 monthly instal¬ delivered ments, or units at a deliveries whether time when can it no buys ■ 800 periodical be guaranteed? Sta¬ tistically, inventories appear much higher in the second/case; in real-! ity, -they may average out below jnormaL The exa mples could be multiplied. V, •. It ment is the 1941 low double.) Bewilder¬ what should not be surprising if inventories keep increasing—not¬ withstanding downward revisions .in this or that field—given the trend of rising prices and mount¬ is threatening ment to our the stock are . commodity price .level? . . • is no means and the oratory), and often also to reduce productivity at work. Pro¬ of out¬ similar non-productive penditures may duction and of sales. ! That should passing. stimulated capital valuations, es¬ pecially so when profit expecta¬ or be a Kurtz, Jr., of the Sun Oil Com¬ there pany, so week Treasurer. Dr. and W. E. Bradley, supervisor, Union Oil Company, Los Angeles, Cal., were counted. ' That "profit¬ be one off-hand dis¬ and easy interpretation. True, under OPA, ICC, and similar controls, with re¬ troactive wage-boosts cost-raising posed, .is. not and- other chicaneries sun^rim - margins may dwindle in industries. They same numerous policies help to reduce the volume to on world the con¬ simple a even in a free economy, break-even levels for each plant./.The latter mean that production has to be greater than normal to yield prof¬ it—a factor market. ■ to caution ■..'! , the stock .."! That is the curious self-contra¬ diction tion of which understood: a "controlled" seems it to brings be so little full employment at rising prices, but Co., a Sti rLouis, has net - in rthis result is elected been to of In¬ -experimental station in Wilming¬ be ton, Del. Mr. Curtis is interruptions and delays in production, , greater confusions, and Division the engineering department at the E. I. du Pont de Nemours & Co.,. country. bound the rector of the technical division of enhancing the tie- threatening up of try of the Society for 1946-47. He succeeds Thomas H. Chilton, di¬ substantial fraction of that coveted output at Chairman tion of the of the former a American Society Sec¬ Chemical of bigger bottlenecks. : y Industry. Dr. H. F. Johnstone of Unprece¬ .the .University of Illinois was spending—$120 chosen Vice-Chairman of the In¬ billions this year, double the 1929 dustrial and Engineering Division, Just dented one more point. consumer peak level volume means in¬ flated prices and wages, and more and Dr. William A. Pardee of the — Gulf acute shortages; / To meet the challenge, and to economize on labor costs, business has to ex¬ pand." of The current expenditures infla¬ about . by exporting .the expense of ... always process y.- ■] volume ' ;.v -j is a sumer the an portation tie-ups of the rest of the and higher .. shifting of.which costs, Committee of the Division which, with 1,300 members, is the dustrial and Engineering Chemis¬ extraneous factors, then inflation" might less things:«-■ rising chosen members of the Executive Chairman ment, all of these factors add two • Kurtz very multiplied by an artificially high ?andguaranteed rate of capitalization. ° But obvi¬ ously, if production, volumes and profit margins are curtailed by to at named vice- research conspicuous example: their lags far behind our urgent needs, and we are duty-bound to relieve the trans¬ less successful attempts by un¬ • to interfere with manage¬ up Laboratories was and Cary R. Wagner, consulting chemist of Bartlesville, Okla., was re-elected Secretary- is, the workers General rhairman coal our As it Soconoy-Vacuum Oil Com¬ Paulsboro, N. J., good. most The be Norwood, Pa. A. N. Schanen pany's production mere to are of " ions tions Institute • crisis emoloy- , in more American over ther ex¬ mentioned Together with the the Chemists, succeeds Dr. Stewart S. and our longer paid-vacations, health and welfare funds, improvements in working conditions, social benefits and has additional pressure on largest of the Society's 18 profes¬ hard-pressed resources, fur¬ sional Divisions. ! narrowing. the bottlenecks. Francis J. Curtis, Vice-Presi¬ Freight cars and locomotives are • dent of the Monsanto Chemical campaign mere Chicago, Chemical Society for 1946-47. Dr.. •Egloff, who is a former President miners if such guar¬ . Universal... Oil been elected Chairman of the Pe¬ troleum Division of the American of the losing the Company, coal full textile prices? of Products after week, not being able to com¬ pete with wages in other indus¬ tries. As to the miners, John L. Lewis may be relied upon not to labor to utilize its revaluation—who knows at what' program inflation the lack of vital parts while deal¬ ers and consumers wait franti¬ make, far below rather than its • bargaining po¬ down," a meager basis for fore-! sition not only for raising wages, miss the opportunity. In other but also to reduce working hours words, our sight under paper money condi-! export surplus is any¬ atfons which might end in a new (the latest A!FL 30-hour week, thing but an unmixed blessing. It gone concomitant against 1.52 Presently, "inventories"; shortages raise prices and thereby /accumulate, when radio makers the margin in dollars, if. not in cannot get cabinets, or when half- percentage terms, in addition to finished equipment is tied stimulating the volume of pro¬ up by cally. no a Research bottom growers The guarantee mills Monetary 0.97 cotton should and normal; 1.80 is the ratio, at/latest! Security values reflect ? .the of manufacturers' -inven- capitalization of profits, and prof-! longed strikes and slow-downs are part and itories to .shipments against 2.31' its in turn are the parcel of the strug¬ product of gle for higher wages. More and before the war, and retail stocks "margin" and volume. at our antee is needed. So far But how will that affect .count, run to manufacturers. decline to hopeful look adjustments—un¬ productions be mar¬ whole series of a its sales What this year's debacle "discounts" a in-i average accordingly. Also, infla-f keep raising production lefurbished from top should offer some j nails would upset the precarious monetary side of the picture:1 kets and unleash not rising the up-swing? "to ! annual rate of interpreted ? ;; If;; it; were proportionately. One bottleneck respectively." ; true, as it is being rationalized,' may be • overcome, but only by that the security marts "predict" Inventories ] creating, another. C a coming depression,- then they Take, e.g., inventories. Their! rA'humber of additional or deri¬ -total, in trade and manufacturing would see a. trend that is invisible vative factors, and no mean as yet and ones, prognosticate a future; combined, has passed the all-time! are at play to enliven this uncon¬ .high mark of $30 billions. A great without having facts on which to trollable scramble for resources. deal has been made of this fact base the prediction. They would Most important is the tendency of be acting on the dictunt by market sales : the market producing homes at an costs in foreign countries while registers, bewilderment in the face (say) 500,000 units, of an utterly complicated and con¬ their labor but in view, of steel,, lumber and productivity lags be¬ fused situation, the like of which other shortages, we can do so only hind ours. Nor is the. outer world it never before has witnessed. short of ' ! by cutting down commercial and purchasing power: $17 to irom one field to another—such a municipal construction, and while $18 billions of gold and some $12 shortage economy, if there ever! the lag in automobile production billions in balances held abroad American Chemical Soc. was ; one, is likely to continue by; keeps down Detroit's demand for plus more than. $10 billions of still' I its own momentum. Its basic re-; steel and other materials. If rais¬ unused American credits Appointments Announced could go a sources are afflicted long way, to finance our by the short-' ing rent ceilings or granting subinflated I t Dr. Gustav Egloff, Director of • -to /v back -to us coming .depression —of symptom is visible—nor "profitless inflation," tak¬ ing that term literally. (If zero profit rate were expected, indus¬ trial security quotations should as underlying factors at play, the monetary side and in age-ailment and will stay so as sidies, should result in the. con¬ expoit-surplus, even if no more } the sphere of commodities and; long as the underlying/demand-; struction of i,000,000 housing foreign credits should be granted .services, promise further- rising inflation is oiled by a self-gen¬ units per year (which is the mini¬ (which is most unlikely). > ••• fmum we heed) prices with no sign of reprecus- erating money flow.. a scramble for J. Anyhow, the 200 million West¬ ern sions on the financial structure. Europeans who have to be everything: from .electricians to -dicate .V; not even on dhigh all .. .in both net in¬ which Japan, our reduced, while I are concomitant profits is and possibilities to as stock market eliminated competitors Italy export tions mark brings starting point. tobacco, mineral and oils, etc. Furthermore, successfully the 'round, and in each individual That sucHi ; brought tion dustry. than- the demand for furniture, in which case the furni¬ profitable in or tin, vegetable but stresses, plus political uncertainties, inject a large ques¬ conse¬ sugar, an strains and rubber, tungsten, etc., is having more . The of be economy geared to a $200 billion total national output should pro¬ vide most sanguine profit basic bottleneck of world economy, to say nothing of reduced supplies in increasing the physical volume of output., The radio in¬ e. (at best). shortage a without , declines, either at home or! steadily rising prices do not dis¬ world markets. Nor is courage effectively, the demand, ^s; hicreasing there a credit crisis of any production does hot so,rt to the offing, certainly none that eliminate the prevailing bottler -could cause widespread liquidation necks, but ^merely shifts ! them stock -on which dustry, A . day's market behavior forecasts what it will do tomorrow. , , level, any .additional far guarantees) have to discounted. In other words, , and how Federal keeps . " govern¬ readjusted; (c) whether actual deflationary (raising taxes and/or interest rates, curtailing bank credits, etc.) or invigorated infla^ tionary policies deficit (more spending, lower taxes, extended point out circulation,it¬ superficial will measures supply and total demand. After as briefly that our imports are sub¬ growing:! commercial; before, bottlenecks must prevail; ject to the restraints on produc¬ analogies which they loans !are pouring out at the week^; because with 58 million workers tion abroad, especially in articles 'incorporate in pseudo-scientific ly rate of $100. millions or so. The competitive in engaged, we are scraping the bot-j primarily the Charts 'and verbalizations. The decline of security loans and the torn of the labor barrel. We are! the American market, such as the "appalling ignorance of most of. redemption of bonds, by* the gov¬ operating on the full employment! raw materials of the Far East these' 'do 'historical far need to be •and we be discussed at length on this It may suffice to between between how vidual prices out-of-line in rela¬ tion to the general price level and sphere turned to the uncontrolled, j might double this export surplus The result of de-control is a res¬ next year,; a chapter that cannot prices—but and profit margins, break-even levels, and volume of shipments; (b) where and how far are indi¬ tions, including strikes, shortages and controlled cu¬ should fect limita¬ own of shifting causes interference from above and union interference from below af¬ of better' than were samples recurrent and ment over-pro- some are or illustrate the problem confronting the stock market. It is a problem of deciding: (a) in which indus¬ short¬ our (threatening foregoing shortages and their $10 billions, and imports af less than $5 bil¬ lions, leaving an inordinate ex¬ port surplus of $5.5 billions. If ' high prices, since part of the demand that could not satisfied present exports portionately be aggravating at ages mean These raising prices: the produce, the more latent •offing.* Needless to go [ into de-^ money. tends; to turn , into - actual tails;-, every- history of'.business ; purchasing ! pOwer.;' Thri supply-cycles bears •'out ■ the story. The' increase is matched or offset by ones who ignore it are the most ne\y demand. - But that'is "not rill.' 'successful stock market forecast¬ On top of the rising velocity of ers operating-in this eountryv vvho; curred prevalent bottlenecks overcome. controlled, and possi¬ savings piled-up dollars are, bly falling prices for substitutes. In other words, 'we now have two coming gradually into .- use as goods become available, especially kinds!, of markets (not counting capital goods. That is one reason the black ones), some with artifi¬ why inflation cannot be "out-pro¬ cially low, and others with dispro¬ in bonds. a The mulative ... (against $4%- and $50 billions, re¬ spectively, in 1929) still is dor¬ mant, to say nothing of the $49 . Problem Confronting Stock Market ' ■: distribution of profits losses is another depressant the security markets, even if to¬ element same which already are felt throughout the body economic. matters, in the first would not mean of necessarily a a major part of the! level of profits to justify a bull tal profits shoiild approximate the almost $29 • billion currency in market in securities.!:" ' ;; vf; ! $9 billions peak of 1945. circulation, and of the $150 billion International trade is another The crucial issue is: whether or; n ongovern mental deposits, infla¬ competes resources, the short¬ or the relative is that demand outlay of ages and What r advance^ place, discovers suddenly what has been -going tires, This consumer Business for the industry losing uncertainty about making profits money. • » , be the tion. are will the of productivity. Therefore, prof¬ bound to fluctuate wildly, and the worst of it is that it is difficult to predict which profit ends. bottlenecks and reduced la¬ on annual equipment, labor saving etc., is it a over direct or rate inventories, devices,' $30 billions, much of indirect consequence Research and Development Co., Pittsburgh, was Secretary-Treasurer. re-elected »' • - The Division will hold its •Thirteenth Chemical Engineering Symposium, on the subject of dis¬ tillation, at the Mellon Institute for Industrial burgh on Research Dec. 30 Curtis announced. and in Pitts¬ 31, Mr. THE. COMMERCIAL & FINANCIAL 2096 CHRONICLE of that phase of our history. and more we will have to end Out Economic Illiteracy Let's Wipe '■ (Continued from page : expert. He said, in effect, "I -0.1 2075) lutions i3 basicany lc.atea 10 eco¬ have learned from nomics. of * - v Although in the exact sciences making prodig ous strides, iri the field of economics we have been and are in reverse gear, y we are " And economic illiteracy our is appalling!. A recent survey disclcses that less than 50% of the people of the United States understand what is > nieant by the expression "balanc¬ ing the budget." Another poll in¬ dicates that in nearly three cases out of four the "man on the street" who has an opinion "on the subject believes that "capital" re¬ ceives a larger, share of the, prod¬ ucts of industry, than after "capitaF'gets labor—that, costs other all are than more paid, left is and labor years the of and this from or that source. If most people's knowledge is ob¬ haphazardly, that is not tained other side not take steps to correct this showed. Although the tax corporations is now about two-thirds of earnings, only 15% people the of realize that taxes The average guess public is that the corpora¬ tions pay, in taxes, about one-third of their earnings. And it is in¬ teresting to note that the same people, on the average, believe that one-quarter of "earnings that high. are of the would be the a fair tax, although present statd of their education they are greatly exercised by in economic cess/at educate the masses as will people many be is white. Under the circumstances, those who know the truth cannot justly that say He has done nothing to the to ut¬ necessity-iOf-capitaL' Hehas convinced done nothing to show how /busi¬ black .hat ter ness" has had a vital part in mak¬ ing us a great nation. In failing put across his own story he to loses his his opportunity to contribute share the to of living. ■/ the rank and man has permitted unprincipled ama¬ As to the people's lack of curi¬ teur in economics to take the osity about a subject as vital as "play" away from him. The result economics, it is deplorable; but is that the public has been taught t must be granted that the sub¬ untruths or half-truths. In the ject is complex and requires time, meantime we are having built for patience, and, above all, com¬ us a financial and business house petent teaching. If they do not stranger than anything Alice ever receive able and patient instruc¬ saw in Wonderland. tion, the people cannot be. blamed they regard economics as an subject and proceed to if esoteric ignore it. ! probably not Leadership and the responsibility the situation. statesmen ' j , education are of educators, and business Ob¬ men. job for big and little Each is responsible Each must do his share, if not for love of country then because of This is business a men. seif-interest. / enlightened : The small business man can a great job by word of mouth in pointed out "that viously, leadership of the right a personal way. The big business the public is badly informed on kind has been lacking in great man will have -to use different how much corporations make and measure. tactics. But in his case, in teach¬ that this misinformation is at the The economic illiteracy of our ing fundamentals of w business cost of many business difficulties oeople has been fostered by the economy, he can reach the mil-/ with the public." The public be¬ demagogic politician's thirst for lions through the printed word. 1 Another poll , manufacturing company's profits reach 30% of earnings. The research organiza¬ tion comments in connection with this "obviously a public so haphazardly and badly informed is a dangerous public." y In view of the record, it is safe to, say that only a small minority of our people would be able to .define a "free market," to de¬ scribe its values and explain its indispensability in a free society. Yet today, fundamentally, our short¬ ages of vital supplies in many fields may be directly ascribed to thesubstitution of a "Planned Economy" system for the very fundamental and sound free marketing system. The people, because of their eco¬ the average lieves — . v "sold" a planned economy illiteracy, * were nomic bill of goods on through many bitter experiences, r that they bought a lemon — that they now and are have a finding counterfeit economy. Little Understanding of Simple Economics The • lack of - understanding of simple economics by the vast ma¬ jority of our citizens is a danger¬ ous weakness which must be cor¬ rected. If it is not rectified we will standard superior Standing in the family of nations. lose of not living only our high but also our illiteracy may be attributed, basically, to several ' Oulr economic general factors: * ' Lack of interest, curiosity and concern by the people them¬ selves in a problem that should be (A) has been completely brazen and shameless in fostering theories ~alse economics. of He norance anything and sake of his brief for the appearance on the political stage. He dangerous is fifth por a most columnist, ready to his own brief and type of destroy tainted ■*lory the well-being of the many. a termite he is busily en¬ Like* gaged in undermining much Tie nation's vital foundation of — the state of mind and judgment of our ->f people. ■ ; the footsteps of the (D) The childlike faith of other and of the labor movement. the people of America precious little, if anything, sure know of Ruether, of Murray, views the ness Today from busi¬ would the sums needed for the pennywise policies of the majority of our; business leaders is beyond comprehension. And since honest confession is good for the soul I want to say that until the National Association of Commodity Exchanges & Al¬ work. The Inc., was established lied Trades, in 1944, the done commodity trades had a constructive job in telling anything of the importance or necessity of our great com¬ is sound econ¬ mon mind, just as the twig is omy to be built on a fixed price basis. Where do we expect to find bent, the tree's inclined." * As for businessmen, they have that seventh son of a seventh son whom we can put in Washington m the vast majority been totally who will know and understand all Peking in leadership and imagin¬ ation in the educational field. the factors entering into the pro¬ Their's has been the attitude, "let duction and distribution of all me alone while I attend to my products of the world and can tell us what is the proper price own business." They overlook the com¬ Business In How can we for this We or expect a and that? should not the people, into fool Russian large part as a of the economic heart. In the lat¬ ter case our free I refer the to markets fact that either dead are badly crippled. Under a frozen economy there is no more chance or for market free a than there where to exist here is today in Russia, exists, or in Hitler's where none existed. none Germany And, of course, in a frozen econ¬ omy the law of supply and de¬ mand is So plan, planners unable to of our factories shut want of vital supplies, for building program for veterans in Public Relations the field of public relations imagination, eternal vigilance, a sharp eye on national and competitive factors. Our natural wealth in fields, the business man ference free between marketing American the the and system Russian Planned Economy System is that we exchange good products and lots of them,, and the Russian, shabby products in inadequate quantities. But what a difference! Our political of cir¬ (the "you will anything to worry about if you elect me" fellow) can be sold "short" as our people awaken to the truth of simple economics—the truth that nothing is obtained from nothing. purveyors and parades cuses have ,Now, some light, some truth, is finding its way through our dirty others still in the talking or economic windows. A few of the leaders are awakening. blueprint stage, our butcher shops labor of meat, our sugar bowl William Green, President of the a shadow of its former self, and American Federation of Labor, re¬ white shirts and clothing con- cently said: \; spicious by their absence from "Labor has come to the con¬ the retail shelves. Indeed we have clusion that the time has come an economic jigsaw puzzle that to drop artificial government even a wizard could not put to¬ controls which have kept the , gether. And • In effect equipped can you by of quick The Economy" "Planned a successfully substituted rock of the free cannot be If economy, Another v ing for and with us, in fact, that are .Working 'fob/each'''other; that; in one of us the final analysis, is merely exchang¬ products of others the with individual jobs. We are inter¬ dependent! Picture, if • will, a popula¬ you standard living of have? , No group conscious of would he ' in American is more the interdependence people and nations than those finished materials. They of the great number ties and are aware supply to which we the products which create our high standards of well being. But our great masses who en¬ joy this great variety of products have no conception of the loca¬ of sources of must go of tions the to - demand is for reoeal of govern¬ controls. The people are tired of bureaucracy. They are tired of being told what wage they can earn, what price they must pay and what food and necessities they can buy." +./+ ment > : Now honest that's kind! leadership That's real Americanism! The administration in Washing¬ ton has last to been compelled at long capitulate on meat con¬ secure these storehouses of slightest idea of the infinite in the pro¬ by the enraged and disillusioned public, finally awakening to the facts that the government is not an all-wise father who always knows best and that government control all over the world — of whom- learned to lean government, had been doing many on their duty over the years by edu¬ cating the public to the spuriousof New Deal economics, we ness would never have would They their also own 140.000,000 /./a years. To the embarrassment of every American citizen, .our has presented the un¬ fortunate spectacle of utter be¬ thinking country they would better under¬ and indisof the a series of orders; counter-orders, marches and counter-marches, and confusion compounded should be a upon confusion. This never-forgotten lesson public, its memory is short. It again be sold a visionary eco¬ nomic utopia. But this must not happen again; and will not occur again if business men live uo to the importance pensability the benefits better under¬ relationship to people in the people in the world with whom they are exchanging directly cr indirectly their product or service. And to to the business leaders. As for the United States and the two billion stand sunk depths of economic chaos which we have experienced for so many order in for them to receive these and free markets. If business men, too and a great exchange op¬ perpetually in motion successfully self-reliance for wilderment with realize that be cannot substituted duction, shipment, fabrication and financing. If they had, they would is t ofthe constructive! That's number of steps taken eration '''-.. trols/The capitulation was forced tion in the United States of only one lone human being. How high of ,'• . "Unquestionably, the popular We' a , dent, who stated in the last few enjoyed by each is only possible because others are work¬ and market place. can their full social and responsibilities, both economic. Still Planning Utopias But in the cold, real facts face we of the hard, find the "plan¬ They would better understand ners". still planning their Utopias. bunk that is wrapped up in I And they are planning dangerous this package they. are buving i plans from the standooint of the called "Planned Econo They 1 American who wishes to main¬ w( aid better understand the im¬ tain and improve his high stand-* the , item is a John ' O'Leary, by weeks: v each restore United Mine Workers Vice-Presi¬ of living our balance. to exoect refreshing statement stantly ing off economy ever v/e peacetime conditions in.AmerS ica, we must first restore peace¬ time freedoms." •/" ; solid the for a Model T car¬ won't work. not build a solid ignoring certain laws. fundamental sands nation's attempting to truck which is ton with economy will! ever are we It just buretor. No, one no ten a stand and international one only exchange with another Russian the products of their respective labors. The dif¬ can devoid the believing that communism and ourselves, high standards of living can be maintained without hard work, K+ / communism. of snare under never many down our dodo. a and confusion with chaos business our as have today in the United state of complete/eco¬ a nomic dead as we •States / our the the arteries well Communism they would better under¬ stand Even wealth and comfort, nor have they .. And hardening of the arteries. In fact, we have completely lost some of as of Snare suffering + "'Tis education forms the have "anything" (excepting reg¬ is merely political hogwash. \For competition in any phase of life cannot he stilled. It is an integral part of all life. imentation) economic of case who purchase our raw commodi¬ They system to gain antees small. or nation our bad a American of large men, drilled into the "eco¬ nomically illiterate" is that every one of us is dependent upon the others — that the high standard generally is doing business at the "old stand" forest and mines in the past has ing their large share of respon- of 1880. And yet we have a right been so stupendous that we have aibility of enlightening the public. to expect leadership from him in been able to "afford" the costly Some months ago I was greatly the teaching of the fundamental nf economics to the peonlg; after luxury of economic illiteracy. But impressed by a statement made by !h<* recent war has hastened the a nationally known public opin- all. he is practicing economics I'm Walter I modity exchanges, our free mar¬ used the kets, — vital to the wellbeing of power—the all interested in commodities. We system of divide and rule — the were asleep at the switch and pitting of class against class, the derelict too until death was star¬ building up of hatreds, the ing us in the face. ^reaching and teachings of false Pleads For Free Economy doctrines. They have no qualms tbout assuring their constituents Now I ask you, how can we that 2+2—5. And they have been hold our own with foreign comriGst vocal. - V :'..+•: v.netition without free markets. politician. the Dereliction on the part of business men generally in -assum¬ (E) Mr. phase, One factor that should be con¬ demagogic the other. people in their right to get some¬ thing for. nothing. ; of this on pending money for such construc¬ tive and essential educational never And many of the labor leaders this country have followed in close poration who is niggardly in ex¬ ,, |irst on their list of musts. (B) Lack of good leadership. "act that their business ig every¬ (C) Mal-practices and false body's business—that we are* Com¬ teachings of demagogic politicians pletely interdependent—one upon and labor leaders. The executive of the large cor¬ promise anything for votes. By twisted work, or fails to do any such reasoning, by the nurturing of work, is doing a disservice to his prejudices, by fantastic promises, stockholders as well as to the by false accusations, the political public. Lack of action on such a demagogue leads the people public relations program will deeper into the black night of ig¬ prove infinitely more costly than do will same , He oower. solute financial security, or guar¬ I Philip run do And views which produced our high standard has survive. to They would understand that any bill of goods proposed by a politi¬ cal demagogue which will elim¬ inate competition, provide ab¬ use before the of knowledge people's me advancement of American Business System The business Competent Teaching Needed brains our practicability of "floors", "ceil¬ ings,'' subsidies and frozen prices: should like to emphasize that all of America knows the economic Mr. nomically speaking, he has found himself, in public, or human re¬ lations, at the foot of the class. True, he knows how to "sell" his product and has been a great suc¬ does falsehood, then assuredly in time More members nation. na¬ survey bill of as But, as the American business man has been intelligent eco¬ black is white and the another taxes, business of ture confiscatory the of be successful at it to othewise he would fail. . the greater fault lies to capital, instead of exceeding with the public. If Columbus's the return to labor, actually proof of the theory the earth is amounts to less than one-sixth of -ound had been kept a state secret the return to labor. the people of that day would have The public has little compre¬ continued to believe it to be flat. hension obliged that, Beyqpd that point, their fault." \ however, he has done nothing to Thus, if those with a certain "sell the very important story point of view take the time and about where and why and how money to educate the people that he fits into the pattern of the half of less than half. The truth is that the return what mj&many experience in the field of public opinion surveys, that whatever may be the opinion of the people on any subject, be it- right or "wrong, we cannot criticize their verdict, for their judgment is based upon the in¬ formation they have picked up study daily and knows more about the subject from a practical stand¬ point than anyone else.#And he is -/Thursday, October 24, 1946 ; iuiMMwMAv mwatwffmmwwa .Volume 164 Number 4536 THE COMMERCIAL & FINANCIAL CHRONICLE ■i, ard of to living. They give are planning America away! ;*£• Howard R. of the about ' Tolley, formerly haps /*' duce. United States. the We 1950 the So our Must 13,500,000 Law more .* .• V .v'/.v-; / on after to course, wartime a the peace. ; And, of over controls and distribution price and government purchase and sale of sugar crops, would have to be continued. The "free" market on would sugar such * plan a been since But be it as on under the food proposed program suoolies every of no use interfere saying La¬ food would He we "put said, "it not the delegates to tell not helping to bring world standard is objective." our of him His of economic remarks confuse not serve further the up con¬ illiteracy. only to other our eco¬ nomic illiterates but to make certain ouri un¬ trouble to check with drawing out¬ parallel a tion arise out of ; 88% oppose the closing of modity exchanges; > • ployees; sometimes the employer nas nothing to do with it, but it is between two different organized groups of employees, each claim¬ ing the right to negotiate with the employer. Sometimes workers are compelled to go on strike when ihey have no grievance at all and would are such organizations, but often into membership against their will by violence of threats of violence.. Often they are forced coerced into ; 94% believe wartime; not fix the that/ -v\ •••-'• •. • • ;> ■ ', • - •• control should of be commodity eliminated as possible. •' ' Furthermore, ; the y5; / ' soon belief . commodity, exchanges - • ' are Commerce in It is; not 30 states! : that a condition to make appraisal of stop as delay educa¬ a -:, not here trying to fix the am or or to who say is to what extent. that "such a in the But I do situation will destroy any breeds government no more excuse for per¬ up a sinister purpose,/to take into their own hands the re¬ dressing- of their that there, is own' grievances, for whole and the system into disrepute itself government contempt. into \ /•'*' : '; The authority of law must be whom preserved, orderly procedures maintained, the rights of the un¬ offending but suffering public made secure wishes of regardless of the the contending parti er the pressures they may bring or to bear. Another death. no ; - . an organized body to obstruct public iront of to throw with to places work and hold others out its inevitable stifling of in¬ dividual freedom. That warfare involves religion. If the insuffer¬ able and inexcusable condition picket lines in entrances of by vio- now iurve'thfltln?Kdatl°-n' -threat and in~ prevailing then there is in any person retript?r-fPKrl has been stolen to retrieve it by force of amis, killi-hnc free to way * will government give form of totalitarian¬ some man or of of the state will ter. class a destroy religious liberty. government as we have known it, what commonly now i evhShv r+°ngSf Y?U never cure an OVer^nf fr?m 0ne of Setthose 0f hands into li the hands spoken of as our democracy, is foundationed in the great spiritual principle of the supreme impor¬ &P°Slt? ?ide« Wrong is just divine 7 transferring the power to on tance as sinister and just as fatal to order- of the individual derivation of and the the human ,ly living when perpetrated by one soul. f;df *° abycontroversy trated est political exposition in the Dec¬ laration of Independence which commission as if nerpe- the/ other. Former not righted by the of new ones by the other party.- Our method of handling . ' ^ or men—are circumstance that they God-endowed witr basic law our and * ' conviction carried tice established the not were into prac^ over do that. The can disciples who , Ancient who men Church rationalized Jesus and his doctrines away, nor satisfied with ' proclaiming were him merely a great et';ical teacher. When Jesus asked Peter, "whom do men him that I am," Peter gave say the various conjectures that had ventured concerning him. Jesus then put it to him directly, men "But whom That say that I ye am?" which of the living God." of living faith the Christian reli¬ son the is kind carried gion into ascendency in the West¬ world and ultimately gave to. the world our democracy. It is ern the only kind of faith that can save world from the unchristian the doctrine of regimentation and au¬ dominance over the thoritarian lives of men. /. , which even are no the Investment- residential tember increased for in Sep^ over the 3% ed in August in the 27 states east of the Rocky Mountains, it was reported on Oct. .15 by ' F. W. Dodge Corporation, a fact-finding organization' for the - construction industry. The report went say; • to on r • September residenfial contracts $293,831,000 against $284,- totaled 025,000 in August and called for the construction of 40,390 dwell¬ ing units. Publicly-owned dwelL ings account for 9% of the Sep¬ tember and dollar Gains in of awards, $26,702,000. volume amounted to residential contract uniform not were Declines described areas. erate to = commitments construction dollar volhme of contracts award¬ awards on governmen ,oc. jV' Contracts Awarded > inviola¬ power - : September Construction in all. mod¬ as reported by' the Dodge organization for.metropolitan New York, northern New " made coordinate with tne severe were tracts able. in For a fullness the two must the products oLmcme century and a half of the teachings of the Christian religion out of which they must draw their are a nourishment. or If this well-spring is suffered to dry up, then indi¬ vidual freedom will wither and SUrpnmK1/10^" not to the^en lure^h° of wm expedi- New England showed the right to life itseJf.;The history of human struggle loudly proclaims that life without liberty is mtoler-. ration succumb die. '• .V?• • , declined from con-^ $211,530,000 Aug. 1946 to $169,627,000 last month, while heavy engineering fell from $184,354,000: to! $156,399,000 in the eastern states,1 works the Dodge Corporation The , demands agencies materials vealed that all - For it is out of that religion that the whole concept of the common brotherhood of. men as the chil¬ greatest gains. ' , : ' ' ', Nonresidential construction on . in 23% of reported. government the available critical and equipment is re-, showingdollar value of. tabulation a of the contracts awarded during the. •. sloshing around in positions requiring big men of un- dren of the same God „ derives, each equal before the law. -So Integrity to fill them. Why. should great cities be thrown-into darkness and their timately ; 5 mere than it without regard to personal because:.two the are together. These conceptions in¬ corporated in the immortal Decla¬ thotiS? intelligence to discern right and the courage to pur¬ citizens exposed to birth, by the creatives de¬ go the nrfy'- but who dare, to stand on ™ITPe tbough they stand alone, j-hece are too many favor-currymg iit je men that gave them being—from thus or- to' have themselves accomplished the regimentation of the bodies and spirits of men. But . men ,to been may properly- infringe. Among these inalienable and in¬ Jersey, upstate New York, the violable rights are the right tc southeastern states, western life and to liberty.. The right o Pennsylvania, West Virginia, Ohio, man to liberty—to be free—is the south central states.pnd Texas.: ™e/rying need and of this age is of stature character sue that at earth; not ingSit?SiVe influence in establish- consequences fire itself w5 h°Pe to achieve order, of cree ble thJi6 ^as^lgating other nations for ^role deli^.uencies ortotothem. assume of instructor If international words men force of thp the cannot maintain domestic in certain rights which are "unalien¬ able" and which of right and b> these '.ppUSnfiaK d^sPutes belongs to the tiona? . arbarism and is a na21- disgrace.. So long :?as^ we nr,w -defiance, disorder, rPd^!! "USUrpation of the riSht to redress wongs, we have no right we This concept finds its high¬ proclaims * A National Disgrace has thorough . group or even not much mat¬ Free past suffered are there most one or And totalitarianism must al¬ ways eve.n though true, that vorkers? have in the wrongs thd Christian rex.gion and in that country where the break¬ down hafc -been most complete, is not corrected ism, whether the despotism of processmaiming if need be in *he anvh^ d0GS i1: belp the cause over ^breaking down and de¬ Christ, the the appro¬ is that the whole future of free¬ dom of religion is at stake. There is war between the concept of a free people under a free govern¬ ment and totalitarian governmem - greater right in for reason priateness of this discussion here per- There is coun¬ perished, Peter answered without equivocal tion or hesitancy, "Thou are the Freedom of Religion at Stake he than needs nor are in¬ the two intertwined 'that democracy and the Christian religion must survive,or perish the marauder Wether. contending' parties Neither has worked fectly in human hands. to be belligerent? " Why per¬ But tbf first nine months of this year was, for projects listed as "publicly— owned," the Dodge corporationreported. September awards listeri¬ publicly owned amounted to.; 30% of the total of all as awards.^, . The total of all 'construction- contracts awarded in the 37 state? failure of the perfect working o the principles, of free government whole innocent populations be probably is fairly in proportion,to states the dentiaL construction re duced;to hunger and cold- and < failure. of . men to -live the , during the first three quarters of this,; ' year was $5,995,493,000 against'$2,281.9^0 000 in the cor¬ responding period of 1945 in the- tra°nsnnS'er and laad transportation, Svippinft be stopped and himself the satisfaction, of his own wrongs of whatsoever nature with¬ ; is in: t.iose east of the Resi- Rockies. ' in > first- the permitting any privation because two private par¬ Christian religion, r The .perfect nine -months of,this *year aggre?.; individual, to take upon ties, or perhaps? only one of them; Working of4 the -latter Would -in-^ gsfed .$2,492,556,000. mcm-residem sets up its imperious will regard- Wp the nerfect "workinr of the bal construction contracts totaled r private . cause that note a tribunal set up to render the kind decision the dissatisfied party wants. That practice only brings a mi? shammed to or cover the to rendered of ani aestr°y lusonfood¬ and necessary to give-an out -regard- to - the good Order; and tmbhc? to who knows more welfare of if laws the~whole-soeiety.~~/ *' i , pinion to this on before And when be tant judgment has a superficial unbelieving profes¬ by a duly consti¬ sion of the Christian fai h will not tuted tribunal, let that body not withstand the disintegrating forces; be dissolved and its judgment va¬ at play in the world today. Only cated under pressure and another 'a genuine, deepseated religious I Permitting a man J* nose son has been killed, perwlfhn1? investigation -a brawl> to kill so out and without the an the merits respective positions, cerely entertained im¬ !V unreasonable are mitting those with an industrial complaint, real: or fancied, sji. - * workers There is as portant in marketing basic com¬ modities is heartily subscribed to by 76% of the heads of farm and commodity trade publications, and 86% of the heads of .Chambers of are or society that does not find an effective way of dealing with it. prices . I say the; same*percentage be¬ that, in, peacetime, Federal afford can moment J® the'seats of power. Men who the and "And lieve and lawlessness, eventuates in anarchy - part of been of right commodities in on heard. f for blame in should us a predicted educa¬ an vital accounts, while employers assert that the demands i w. except government prices general; •• -*• •• injustices balancing of their commodity ; suffered pute is in 96% express opposition to floors or loans to. support prices in peacetime; are unbiased l certainty whnL1S prefer to go on working, compelled to walk off the job by the orders of the organiza¬ but impossible of granting. Ob¬ viously, neither party to the dis¬ com¬ with personnel so biased that their decision may with other part. And any ™ants disagree¬ and costs; are as Pay,-another;, driver- be¬ Sometimes the dispute is between the employer and his em¬ now commodities; • ; ; J84% credit the commodity ex¬ changes with reducing distribu¬ unsus¬ stuffs Unless he will take now "Strikes" long commodity exchanges play an im¬ portant role in marketing basic of °r membership be¬ cause otherwise they will not be survey, commented on this subject permitted to work at all or to earn their daily bread. of free markets as follows: Employees claim that they have 96% expressed the belief that standing economists of the coun¬ try have recently, as a result of a as * that and the barbaric meth¬ we they know something about economics he would have found that the an farmer carrying his own produce, the fruits of his own toil, to market and tip over and break ments. of those who by ■ tion to which they belong. Some¬ times they are voluntary members standing with, the peoples of the world at large. If Mr. LaGuardia had v taken the believed fJ^fre l\ no more Justification permitting an organized group employ in our han¬ dling of industrial disputes. I have no nesitancy in saying that the "strike" is a totally uncivilized way of dealing with them. the living, which Mr. LaGuardia's utterances vict ods is gamblers and of tween going people in their countries that, if they did not set up a "world pool" as the "only export agency" they would be "just bolstering trade and assuring profits to the specu¬ lators and helping the are to txie pose exchange are they for sumed; to present this sketchy background for the express pur¬ with " free exchange sales." Mr. LaGuardia free invited Mr. impartially constituted, not packed (Continued from page 2075)■ V . purpose of worsnipping assembly such as is convened nere today. I will tell you. I have pre¬ Agri¬ world grain : . By now, some one will surely be asking what all this has to do witn £ distributing that business." to and a of dabbling out and Organization, Guardia board Food that often Anarchy! or Disputes Barbaric a recent speech in Copen¬ hagen, Denmark,^ before the Nations' so false tional program! men, Methods of Settling Industrial In United by side with economics repeated another of people could not have lived to¬ gether. tion, has a bigger and better plan. He would out-Tolley Tolley. culture and are, business haunting fears. Without such accomplishment, large numbers an energetic ,Mr. Fiorello H. LaGuardia, exMayor of New York, now Director General of the United Nations Re¬ lief & Rehabilitation Administra¬ ^ there has gone side its decline, nial of before strained license to do evil. It tribunals be needed to administer and enforce the laws, let them be scotch must they tional nature for Harbor. — We that public relations of day in the progress of civilization. Anarchy gave place to order and it became possible for human be¬ ings to live together with a large degree of stability and freedom is and has now Pearl hold dead as nas pecting public. We must recognize plication of principles of justice. This achievement marked a great regulations and things. doctrines the realm of impartial judicial de¬ termination by reason and the ap¬ a plan would require that all of the current of private feuding and reprisals by physical might and put over: into basis into effect such put tries where freedom the vTolley would keep the Ameri¬ citizen to People business as evil with laws that shackle one oi the disputants while leaving tne other to roam at large with unre¬ portance of business in the scheme facilities Educate way, our power to pro¬ the rights, privileges and obligations Toge.her they have provided an trie> respective contenders,, let atmospnere in wukl, spite of laws be passed, but let them impenections, we nave lived arid be fair, impartial ..and unbiased ,ilourished~a& has- no otner natio# laws. You will never cure tne in recorded history. It is import, of help them to understand the place .of business and the im¬ none Business of educating 2097 sucn fundamental economics. on ' the total expected to be than in 1940! .0 years the need is total consumption of prewar. And this despite the fact that our population in 1950 is can world responsibility We must true markets. proposes (and syrups) depressed by 12.6% be under the people bureaucratic controls they are not by> the year supply of sugar should is clear.-We must not only be a constructive force in creating jobs and in turning out better prod¬ ucts, but. jnust take unto, .ourselves a places. Market places that are free markets! If they are not free markets but are markets that are hobbled by complete or partial * Tolley that in exchange that production , and service with others. To accomplish that, we need markets and market Tolley ^Specifically, this power to serve, famine i in possesses years to come. program is not a relief. program. It is a plan to raise the normal consump¬ tion of sugar in other countries at the -expense, and through the sacrifice, of the peoples of the The took , er na^ons f°r wiu LaGuardia Mr. Mr." LaGuardia little too much territory when he expanded his efforts beyond New York City's limits. ; / * All you or I, or anyone else, program of sugar- supply with our economics, the economists mentioned. Per¬ or U. S. Department of Agri¬ culture now Director of the Divi¬ sion of Economics and Statistics of tne Food and Agricultural Organ¬ ization of the United Nations, has recently proposed a sharing 1,11Vt■'4!i9!^'I,A^Vt,^i!^;^1^,^',' i1,1 g0t>d law-abiding pure me jaasect working at toe $2,182,054:000 former;" We may.. not,, except at and _ utilities and - - public works- construction - con- - - :t V-' . I are needed to define the oirr fperil, discard either of them, tracts amounted to $1,280,883,00(L ; h r -i I U -ri* f r i i ^ ■ T-.nf t s i i ,>lit'i - n 'v f - ill- i r. i«. V, ;,/--/\v4 '"/// -i''v;" S' -v•' y ;i THE COMMERCIAL & FINANCIAL CHRONICLE 2098 mand Inflation (Continued from first page) trebling of the money supr ply and the liquid assets of the country during the war, together All wars with : » a , immense the deferred and " alf kinds*; have1 resulted in infla¬ It is now clear in retrospect, as tion, because in war the govern¬ it seemed to many of • us at the out money, while at' time, that what we had to fear the same time a large part of cur¬ was never deflation, but a more rent production is for war instead active inflation than we had ex¬ of civilian use, and the goods are perienced while the inflationary, not available for purchase by the forces were being created.; One people who receive the money. We danger was that people would ment pours treated money purchasing power, without supplying the goods. to and com¬ before the industries were into rush pete, absorb it. And although under thej combination of patriotic incen-. the markets do an M'rC- • /-/:"- f':. Wy7y/!' Thursday,; October 24, 1946 r weakens. because cline some "v efficient » of , turnover .the^ will ^ incomes of other groups will de¬ day's jn other words, says Dr. /Hahn, -7lf break-even points are too high.. This public statements labor cline. Excessive costs aiid uribalianced prices have, brought on re- to seems friost important . one* me of ther , , of our are for-^; by, nature ; aspects , [cessibns in the- past when there current/situation, /Those jwere undeniable needs for hous¬ ing, automobiles and other goods to be filled. Credit Expansion !; ; , Cost-Price and Distortion tunate industries. which enjoy a which highly stable demand, or an expanding com¬ which are still in their period. Such industries / serve munity, growth or less vulnerable to the dangers are \ ; When we > look, at the current described by Dr. Hahn than are. < the heavy machinery industries, putes, and petty strikes over petty Situation we note, first, that credit which are peculiarly subject to causes. create friction. A record;is immensely expanded today, but cyclical fluctuation. Yet none are breaking industrial employment •it is credit based chiefly on gov¬ fails to produce a commensurate wholly immune to fluctuations in /!;;// ernment debt■ of which there -.vill volume, or to the damage that a output, measured by past stand¬ ibe no forced or disorderly liquidaards. !7/7/7,.;//A77/7 "■:''7'77 high break-even, point can wreak In all this there is one encour¬ jtion. In.fact, I doubt that any of |uS' expect any substantial govern* aging feature. The creation, of iment: surplus or. debt retirement, goods tives and lack of goods people purchasing power through gov¬ in-, during the war. To avert that, the and, as long, as r the government ernment deficit financing for all creased their savings and bought debt stands in the banks the de¬ need was restraint/by consumers to supply them, for the which had become scarce ready '■ ■■' 7 join with employers in emphasizing the need bf produc¬ tion to raise living standards,,, but along with this goes emphasis, on higher money wages, on shorter hours, on payments for longer vacations and other non-produc¬ tive time. Union rivalries, organ¬ izational arid jurisdictional dis¬ leaders replacement demands for goods of of the three basic to work. In of the isfy the enlarged demands. These conditions push prices up. The price increases are the effeqt, the inflationary influences. labor On the other were the stark facts and services in the markets to sat¬ consequences, Approaching Peak ■ ■ when The- down. volume * turns sales /vs.;;;^ begins to tell then. The erosion of the rates allowed by. the, regu-r latory commissions to public cor¬ vast amounts of government se¬ and!the highest degree of unified Ipracticarpurposes has come to an posits, that is the money created curities they could not supply all' and | cooperative effort tb. get pro¬ jend. As early as the first quarter by it, will stand also. The amount porations, will also begin; to tell, when" itris no longer obscured and i the m on ey the government duction going. The second danger |of 1946 the government budget of .credit empjoyed in carrying se¬ erosion of profit margins on . was balanced, in the second quar¬ ter there was a deficit, in the cost-price spiral .' The need third quarter again a small sure was to keep hourly wage ratesstable or at least to hold increases •plus. A small deficit for the full fiscal year 1947 is indicated. But within a range that would be on a cash basis, including the in¬ justified and supported/ by- high take of Social Security taxes, the man-hour output. We .needed] government will take in j more stability and patience — patient waiting" by buyers'fbr the goods money from the people than -it ! they wanted and patient waiting pays out. 1 This means that the piling up by labor for the wage .increases which improved technology and. of inflationary pressures result¬ productivity would later bring ing from the. government paying them. We needed above all, a more ; money to people than /it willingness to buckle down to the. takes away from them;-has ended. heeded.. The government borrowed from the banking system. it increased the money and- met its needs. was Thereby^ continuation and acceleration of the supply, . Inflationary Forces From the beginning of the warto the end of 1945 the money sup¬ ply, consisting; of bank deposits; subject to check and of currency: outside the banks, increased more, curities in securitydoans of the leading ber banks mem¬ other than govern¬ on securities are probably not -15.% of their 1929 peak and ment over probably one-fourth about only of their 1920 level. However, the economic panorama: unfolds, the painful task of paying down loans ■ than three times. In addition, the. "absorbed ,in; expanding volume. > # is, relatively, the lowest | *! In my remaining time I should > times. For example, modern on stocks that have declined on a serious vl| like to offer you an opinion as to: where we may be in the inflation- ! the- deflation cycle, arid what are fcriicial,points;tovlook.for., As, I, said earlier, the piling up of basic s which comie through increasing the money supply actually came to. an end. last December. At that time; fhe^ inflationary pressures % , , governments took money away, from people by selling them V1C7 spending. The tory Bonds, and djiring 1946 it has reserve position i§ not strained and no ^one; expects restrictive applied that money to retirementipent securities — in an amount, qfi/spriie:j-^Of TthhS g(wieimment/^eb^|/ job of getting the productive or¬ The dimensions of tfye inflation policies comparable. to those of held in" the !banks.' Also, during also more than three times the. ganization back into: peacetime- problem are reduced accordingly; .1920 ;to be. established. 1946 "the government budget has prewar figure. Total liquid assets! working order. !•--When we explore cost and price were $225 been nearly balanced. The money billion at the end of et showing is attributable not to relationships, however, we .come last year, compared with $65 bil¬ Fumbled Opportunity to Stop t supply have been increased r by of economy that. .ought 7 the kind to a less, favorable answer. The lion at the end of 1939. The in¬ Inflation private borrowing from the banks,* people of the country held other; liquid assets -'- time deposits,;war savings bonds and other govern-! market value will not be drag on consumer / . enforced to. be in the supply of money is crease It the original and primary source the inflationary pressure. ; - ; of The war is for the war more money to ended with the the But increase in the' money supply remains. The goods which the bought money are war wages and ma¬ terials costs rose, and prices of all the industriesnot merely those service corporations — brought under regulation. The great solvent of the earnings problem! despite the be¬ squeeze tween rising costs and relatively inflexible prices, was the rise in; volume. We started our months after program war in mas Mr. Wilson announced the plants, opening new mines and buying more materials; decision of the General Electric abroad, but by putting people to Company to offer a wage increase and to apply for price increases. Work who in normal times would; have been retired, would have He said it was apparent/that "the stayed in the homes, or would company can no longer adhere to new have been in school. We built our up total labor force, including the armed services, to 67 million, was somewhere from 7 to million above normal. At the which 10 peak we had 7 or 8 million more people at work in this country than in 1940, despite the draft of , 14 million into the armed; forces. Every producer of goods and serv¬ ices, including the waterworks, felt the stimulas of the demand resulting from this immense en¬ largement of activity. The in¬ crease in costs manageable because of the expansion in the gross. At the were end was of the war there sharp divisions of opinion to the effect on as business and. the real nature of our economic prob¬ lems. fear On of the an one hand immense was volume the of unemployment as workers were released from the war plants ajid veterans from the armed forces. but which to is a burden continually Imbalance ripw most to be feared is that created by the rise in the of organized .: labor above what its productivity would. sup¬ port. The effect is to raise indus¬ trial costs and prices above the buying power of less favored groups, including those living on relatively fixed incomes. When organized labor, which, constistitutes,- but . one-fourth t)f .the working population, puts a price on its services which places its product beyond the reach of pur¬ chasers it is pricing itself out of heavily oppressive. The- total wages the • Federal budget for the Day the prospect was bright be-: single peacetime year 1947 is far yond all expectations. There was above the total cost of our parreason to think that the auto¬ ticpation * in the' first world war; it mobile industry and durable goods is far more than we spent in the in general would be under strong ten years from 1921 to 1930 in¬ momentum by the turn of the year clusive; and it is more than our and moving toward full produc¬ expenditures in five years of large tion by spring. 'Meanwhile* how¬ spending from 1935 to; 1939 in-; '' 1 ever, the conditions which have elusive. led both to curtailment of pro¬ The Current, Situation V duction and to increases of costs This brings us to the current were developing. Mistaken fears situation. If you gentlemen were of deflation and depression led in Wall Street and had your noses the government to support de¬ buried in- the stock. market you mands for large wage increases and other measures "to maintain might say at this point that it is time to stop talking about infla¬ purchasing power."; Government tion. The most spectacular de¬ memoranda arguing that - large wage increases could be. paid velopment in the economic situa¬ , building and V-J. of pro¬ without advancing prices strength¬ 1940 * with/ ened union demands. large unemployed resources, and, The moment when these forces with a wide margin for expansion culminated was marked for his¬ of output. We had eight million workers unemployed and our steel ? tory, I think,. in two sentences uttered by Mr. C. E. Wilson, Pres¬ industry, to take only one* ex-! ident of the General Electric Com¬ ample, was operating when Belguim was overrun at only 65%' pany, a man devoted as thousands of its capacity. First we put the and millions of others are in this country to the philosophy of try¬ unemployed people and plant. capacity to work. Second, we in-, ing to make goods better and at lower costs. Just before Christ¬ creased capacity not i only by' duction taxation , - of public were three of , the money remains. 77,:. ^7/;..; During the - now ' at the bottom of the sea or dissolved into the air, but the debt remains, and or say . Victory, Loan drive in December,4 1945. to that fumbled this opportunity. For/ two The demands over. the banks for on pay we is needless . the market.. These are , in ^ihe situation. It/ is not a sufficient answer to them to say the industries can bear the . in making them effective have provided a would basis for period; ; / the . reconversion ". \ From the war's end until , near the present time the inflationary forces have hardly been checked. Wages have risen, costs have risen, and prices have risen, Moreover, people have not pulled together well enough to get the productive organization working at full capacity and keep it going that way. Employers pay the highest wages -in history but worry less about their wage scales than they do about the willingness oI their , a, —^ it generates, during 1946. v » has increased not ///'/"//'• ">: mount through-the,.use of purr chasing power previously created through the inflationary be¬ havior of people. A lot of us have / ■ w! : and 1. ■ ' ■; _ x'_ . 1 _i ■ x X _ build been trjdng, for example, to more houses than we had doors and flooring for. The , than is available, in so many lines; does not bring ] out the goods'but it does push up costs and create black markets. sure •, strained. This cause of for the past few years a student of American affairs, Dr. L. Albert to get more — — |^~ ~ w — W -W — TT" — - — ■ — " " 1 | ,<■ Hahn says: - '-Even avoided where the price economy rises will are prove increasingly vulnerable. Wages are under the permanent upward pressure. due to the enormous consists of the exchange of goods and services. The essential condi¬ mand/cheapens and alleviates pro¬ duction/and distribution. It is a ,v' pent-up de¬ mv-: -/- '• trades the distribution pipeare unquestionably being filled, and the volume of goods becoming available to consumers is increasing. Second, our farms fhis year, have yielded the blessjrig of abundant cereal crons, and these' ample feed: supplies lay the foundation for a coming increase „ - , lines - / , . output of livestock prod- , authorites think that ; farm prices in ggneral are about T tion of keeping trade going is that very high-strung system, in which; kt their peak. . yr.yy''f-/.L-y prices of goods and services shall the -price-cost, relationship re¬ ;/. A: third fact is, that in some, be fair and practicable, so that mains tolerable only so long as lines, high costs are having their each group of the population can everything works full blast and at usualeffect" of cutting off de- •' sell to and buy, from all .other high speed. As soon as the -slight¬ mand. They -have- caused the pargroups. It is a characteristic of in¬ est slackening.in deriiand will set jrig down- arid; postponement of a ^ flation that prices of all products in, many, enterprises wiB/have to good deal of - industrial expendi- . and, incomes of all groups; of the shut down; because of., the losses ture, and they, have, driven-a good population do not move up" to¬ they suffer.' Exactly as at the onset manyv customers out., of the hous-* gether, but unevenly. Those whose of every depression, the booni will ing" market; * v incomes lag lose purchasing power? collapse through the losses that -My fourth point is / that the > for the products of those ^whose * the marginal enterprises begin to deadline in- stock prices- has inj prices are pushed up most. This, undergo; only! that, this time not duced a/ certain amount of so-, disparity weakens deipririd-'Tf'de-' fbb "decline of prices, but .the de¬ onety. Concern is expressed as tp^ tionships. AH business and trade i ' many * : 1 It* seems to me that we must be approaching the peak of the in¬ Hahn. Discussing the distortions flationary phase of the- cycle,. To of prices and wages which result support the opinion several facts from inflationary pressures, Dr. can be adduced. One is that in ; which I drop caused by government v debt. of moneyjsiipply, and. the ? basic.' inflationary jpressure which; • The ensuing wage in¬ inflationary spiral may creases—where they do not lead treat before a national, failure to, be brought to an end is through to unemployment are bearable establish policies and achieve the distortion of cost-price>rela> only because the huge turnover unity retirerheht Hence the/ wage increases, for the idea so widely entertained a short time ago that wages could be raised 15 in stock prices, which obviously to 25 % without raising prices has Labor at the same time uses its carries the tag not of inflation, been disproved by the event. monopoly petition s to push up ; but of deflation. >>.7>>71 There is still another side to the money wages, heedless of the ef¬ Before dwelling concretely on matter which is of special impor¬ fect, on costs. The beneficialre-; the current situation, let me first tance to the regulated industries. suits which ought to follow from try to tell you in general terms If iv wage rates are lifted to the halting the expansion of the what usually brings an inflation¬ most the producer can bear when money supply are lost in an at¬ ary spiral to its end. There may he is driving every facility at its mosphere of heedlessness and of be two general causes. One is that fullest capacity, what will the too many people trying to get the expansion of bank credit situation be when this condition something at the expense of m and the creation of purchasing changes?1. In this connection I somebody els like : to power thereby — come to an end should quote a dis¬ 'M: because credit resources become tinguished f European. i economist, Approaching Inflation Peak tion this Fall has been the break was a contributing, the 1 $20-21 depression.' Then credit was employed exces¬ sively in carrying distended in¬ ventories and in financing com¬ its policy of maintaining prewar modity - speculation ov e r the price levels. We / regret ; that world. Banking resources were through this decision we join the strained to the point where the forces of inflation." /./;-\/77;7 Federal Reserve System had to Let us take note of those words; adopt restrictive polices.. ;77>//7 as a curtain dropped on a glori¬ The second principal way in ous opportunity, as a reluctant re¬ which an stable but the rise from this source has been less,than the J the main uncertain¬ ties that - in the ucts. ; Most - 'SNTZ/S { 2099 the unbalance of the size of. . . , inventories and the possibilty of ab-j sorbing : further, rcost increases; through higher physical volumeis past.> Fortunate are those for' many outstanding .forward commitments for merchandise. In good many quarters re-exam.ination of buying policy is taking place. ' ,'i .a It is fortunate that - y inflated .our has people started ask¬ a time still powerful sup- are -porting elements beneath the bus¬ iness structure. These supporting -elements -mands - are for the . unsatisfied goods both at de- not yet caught The up 419 -with the current rate of scrapping. The whole world wants American -goods and most of our important customers can for pay Class Oct. I railroads had 1, How Fat Can Federal Expenditures Be Trimmed? (Continued from page 2072) boiu, uUk) pcrnaps a trank state¬ ment in view of erating all of the civil services in 1930 the approaching Congressional elections. Rep. Harold Knutson, ranking Repub¬ lican member of the House Ways and Means 20% all-round tax Committee, urges a on of Senator; Harry ginia, the spreading the As a govern¬ reforms, mates. and them. weakening of demand. It can stand fall in black market prices and others that have been inflated be- on in on' order which Oct. on included electric If -and 1 65 steam, Diesel 484 six locomo¬ cluded 129 steam and 406 Diesel. New freight cars installed in ^they will gain. through more orderly operations, fewer bottle¬ service in the first nine months . 12,003 1 freight Cars put in service in the -from inflationary conditons have stopped at precisely the right fcoint where- excesses are cor¬ first nine months not many believe, that power of it tives ^situation. service this in first nine of which 77 Diesel. year, New locomotives period last same locomo¬ new the steam, and 306 were were installed in the year, totaled 457, Diesel. were let in economies can of Expenditure best be Future a billions. Federal slightly This under compares with of about ing from the minimum just prior $9 billions. As War, estimate, will, add at government, like a busi¬ concern, has fixed expenses and variable expenses. The fixed outlay of of $25 Federal a billions increases wage refrigerator and .continued low output-per worker. The missing element necessary "for a lopg prosperity is the insuf¬ railroad-owned lines. Locomo¬ by car; tives and order by private lines or installed cars railroads industrial on or lines, short- car are i not included. ficient emphasis on 'production lancl |he ; in sufficient i concern for | ^the general long-run welfare, as .opposed to what people think they can get out of the situation lat the moment. ..power as a flation, people to halt correct minimize It is within our our our in¬ our excesses' arid deflation by dis¬ cipline and cooperation, No Disasterous Inflation - Sept. Freight Traffic IJ % Under a Year Ago The of volume freight traffic population, it past element may be the immediate years : Added to all this, is the higher the purchasing lar, which was annual is after veteran prices affect governments as well as the public. The depreciation of at a least tory indeed highly conservative and, from trend the cost of running governments ancl business. Higher wages and higher $10 billions to the annual budget, estimate of come. r expenditures war the expected in the the additional fixed charges aris¬ The may matter power of the dol¬ short and transi¬ a after World War be assumed to become a I, per¬ manent a condition, unless some un¬ realistic view, entirely over-op¬ expected boost in national pro¬ mainly the result of timistic? And, when it; is con* ductivity comes about. " commitments, which cannot sidered that even during the war be altered, except through repudi¬ period the Federal government, } Conclusion ation or impairment of contracts. aside from projected public works, Thus, if future peacetime budg¬ War, itself, is the pause of much has been assuming larger func¬ ets are to be in of this fixed future balance, there ap¬ outlay. The tions, all entailing increasing out¬ pears to be little hope'for sub¬ service and amortization of the lays of a current as well as' a stantial tax reductions. The Fed¬ National Debt, pensions to veter¬ special nature, to add $5 billions eral Government alone will con¬ ans and others, the care of .the or even expenses are firm ill and wounded victims of the fixed are all in the nature of charges, the burden on of which future $10 billions to the $25 bil¬ will bring the budget near to .the point where it is hardly covered by tax re¬ lions together with the vast ma¬ chinery for administering these war, falls railroads and strength to maximum a to the ness was and, in view of the political and $26 immediately ahead. And, as A1 Smith used to say, "Let us Look at the Record." How far can Federal costs be trimmed? - This in the untary or reduceable at will. These costs will, of course, depend future international * relation¬ on ships, and, judging by the present outlook as well as by past ex¬ perience, the outlays may be ex¬ pected to be maintained on a large scale,—certainly, ; much higher than in the prewar period. When these defense outlays and the ab¬ solutely fixed costs are taken into consideration—they constitute by tinue minimum, to pockets extract a from fourth World War find to it difficult trim to : The a impractical the* ef¬ or Federal ex¬ -v-.";''- of taxpayers " lies the •in Now, let's look pened was hope and substantial any degree penditures. After* I the. public third of a earnings. And any new economy-minded ; Congress ' will, fective Bridget Reductions to private ceipts, under conditions of. high employment and prosperity.: , 'tnresh round of to wars, casted Federal expenditures in 1949 at "a 'minimum of $18 billion : are Organi¬ determination outlays will continue to be large, $15 to $40 billions. study of the Brookings In¬ stitution publised in 1945 fore¬ us taxpayers, extend¬ I The figures given above in¬ per man-hour to increase produc¬ / ing throughout ? several genera¬ clude only locomotives and comtion and reduce costs. tions. Then, there are the ex¬ We need inercial service freight cars in¬ penses jstabilty and industrial peace, Con¬ relating to national de¬ stalled arid riri order ; by Class I fense which are not versely, the gravest dangers that entirely vol¬ threaten us I strikes and commitments our our army and navy is essential. Thus, it may be expected that defense from range Thus, examine the situa¬ tion which will confront the Na¬ tional Government in the years functions of which €2" were steam and: 395 people to improve the We need higher output and - totaled . in 'months the encouraging is within the 1945 They also put 383 , -But if the heart of the danger is 1ri labor costs arid prodttctivtyy as so of 30,590. rected without any particular un¬ employment, losses or distress. -aspect is automobile box, and 11,346 box freight cars. New plain recessions course it is Estimate an necks and less waste. The situa- of 1946 totaled 30,625, which irition will be easier for those who {cl uded 12,214 hopper < including have to go ahead now and others '2,932 covered hoppers), 4,259 may reasonably hope for better gondolas, G84 refrigerator, 119 flat, - Historically of But this: year, tives. This compared with 535 on the same date last year, which in¬ ^people will take their turn and rfiot • ask the economic organization for more than it can produce, :; and, in view of under the United Nations zation Departments, .maintain peace in all quarters of these categories that the globe, a large, and efficient the and To the extent .that demand ex¬ ceeds possible supply an abate- -work at lower costs by waiting. continue to keep large armies of occupation in Germany and Japan, It is estimated that applied. bile, 8,343 refrigerator, 200 stock quently were so bountiful in the 400 miscellaneous freight use of the peoples' money, shot : cars. New freight cars on order at in their first Presidential cam¬ "yond reason. It can stand the kind Sept. 1, last totaled 50,169 and on paign 14 years ago. rof recession that might lead to Oct. 1,11945 amounted to 38,315. "better quality goods and services.; The Budget Situation They also had "555 locomotives helps rather than* hurts. ha3 The Judicial proposed trimming of budget esti¬ And we are hearing more States abandoned. though, of course, much below the forthcoming elections re¬ ;i ; ';;;;;Vv::Budgets '.,';■!,! .level of the war years. To this Oct. 22. This included 15,450 hop¬ garding Federal extravagance, A number of estimates were vast outlay we wastefulness and per (including 2,154 covered may expect in¬ inefficiency. It made hop-j during the war period of the creased liberalized veterans' aids pers), 5,807 gondolas, 1,199 flat,; is a target which even the first extent of postwar budgets. and New They Deal expanded pension payments. 21,490 plain box, 8,530 automo¬ Democrats, who subse¬ a vment and United notwithstanding the terrifying implications of the atomic bomb, exceedingly bellicose. We must $41'billions of Federal outlays 1946, not more than $2 billions comprise civil service of Execu¬ tive the is in calling for admin¬ istrative smaller. of definitely present day international temper, of Byrd of Vir¬ official missionary of policy been the even F. gospel ' $540,804,378, out of $3,994,152,487, or national budget of ex¬ penditures stands today, the per¬ centage of civil service, costs is reduction, and ment economy and. fiscal has been again but was grand total of only approximately 14%." this, he says, can be obtained by cutting down Federal outlays. 61,- freight cars on order 1946, the Association new American Railroads announced With these elements of strength the situation can" stand some : Some are Freight Oars m Order Again Up In September home tial building can be projected far into the future. Automobile prohas "hard . should be to prove them wrong. and abroad. The need for residen¬ "duction that amending this to read "Qrily hard times make hard work," and predicting depression accordingly. The objective of all spread, ing questions about it, at •-when there : times makes hard work."" awareness of position $ and that people have , whom it is not past. There is a maxim • : cases expansion of the na¬ at what hap¬ after World War I. This tional income; in greater economic period in which the avowed productivity and in a reformed •fiscal system, rather than in re¬ duction of immediate government outlays. A reformed and more purpose of the Administration that succeeded the Wilson regime was one of economy. In fact, the trimming of Federal outlays be¬ equitable tax system, if properly elections, and gov¬ devised and executed can lower taxes and at the same time in¬ ernment bureau after bureau, which had run wild with* public crease Federal revenues and this •is the one positive way funds, through waste and expan¬ open at sion, as at present, had' their ap¬ •the present time to relieve the propriations cut down. Moreover, heavy burden of taxation which following the Disarmament Con¬ is depressing the nation. Unless gan before the by Class I railroads in fa? the bulk of the Federal bud¬ ference in 1921; the War arid Navy 4his is done and the trend of the the first nine months of 1946; get—it will be clearly seen that; Departments' budgets .were cut last century is reversed, and gov¬ measured in ton-miles of revenue the margin for trimming is rela¬ to the bone. Thus, the War De¬ ernmental functions are cut down freight, was approximately 19.4% tively- narrow and seemingly in¬ partments' outlay declined from a instead of being constantly en¬ -v under 1945 and about 22.5% less significant. * ' peak, of $9 billions in 1919 to larged, higher and higher scales than in the corresponding period Regarding this point, IP. W. Wil$451,800,000 in 1922. This com¬ of Federal taxation are to be ex¬ in 1944, according to a prelim¬ loughby, a recognized expert in pared with a peace expenditure pected. Certainly, the rosy pre¬ inary estimate based on reports government finance, in his book, in 1917 of $377,400,000, barely dictions made during the war that received from the railroads by the "Financial Condition and Opera¬ one-quarter less. The Navy De¬ we will have a national govern¬ Association; of American Rail¬ tions of the National Government, partment, which spent $2 billions ment budget of between $15 and 1921-1930" remarks; (p. roads. Freight traffic in the first 134)\ in 1919, expended less than a half $18 billions (as stated by the Com¬ nine months of 1946 totaled ap¬ V "One frequently sees the posi¬ billion in 1922. As to other ex¬ mittee on Postwar Tax Policy) tion taken that the great cost of penditures, the changes compared seems visionary. Even under the proximately 431,300,000,000 tonhandled . - I neither necessity for nor see likelihood of extensive disastrous deflation. One of the salient facts in pur, , position is that our money j is unlikely to contract "supply "much within a forseeable time. This is because it is based mainly on government debt and to that extent can be contracted only by retiring government debt,whch few expect. Jtends This fact aloriri porsubstantially higher price a level in the postwar* period than before the war. The monopoly ppsition of labor direction. same points in the We need not feel 'level, -ahead on which safely. word which practical sume purposes we relatively' high but must costs -price levels for about as long ;is possible to look ahead. .v .a creased funds in order to permit to expand their activities; that if these services were and, put upon a more efficient, and of 1.1% ton-miles, a- economical basis, the. cost of gov¬ ernment could be with compared and; the est debt, the highest outlay was slightly over $1 billion in 1920, this declined to $991 million in 1922. As around J expenditures it is practicable .to do so.; The squeeze of costs against prices -Will become no in 56% greater than September, 1939-5j'J'-/■C;%; * it ■ was The ^ real important fallowing table summarizes total revenueton-miles statistics! for the first nine months, of 11946 and 1945 any (000 omitted): .,. "1946. .- let-7 inos._r 324,285.888 Mo. of Aug.-. *55,000,000. Mo. of Sep. ;t52,000,000 Tot. 9 mos. - /, '.1945 . - 425,374,735 V* . Dec.- 23.8% 56,800,000 3^2 52,600,000 1.1,, 431,300,000 534,800,000; 19.4% "Revised estimate. 'tPreliminary estimate. I reduction of government in as billions or one-third of -slightly the amount debt. Can would make • , of the It Defense be can readily Reduced? seen from the costs reduction for the than government proper, or the items having to do with .the. War. and. Navy Depart¬ ments naval total with their military establishments. cost of Thus maintaining and ment after chiefly of in from defense the cost World of War drastic govern¬ I came curtailment outlays. It is doubtful and whether the same policy can be the renewed under present interna¬ tional blocked ac¬ procedure No. 95. of *"This action . was Gen¬ The Treas¬ •' taken : ; after exchange an the of letters between Charge d'Affaires a.i., of the Greek Embassy acting on behalf Ministry of Finance and Secretary Snyder similar tc those written in connection witlf Greek .the defrosting of the countries previously named in the license. Copies of the letter are available at the New Federal Reserve York,-: Francisco. Chicago Banks of and - San ; "The Greek Government has designated the Bank of Greece as conditions. The isolationist its certifying agent." . op¬ License of the be costs—meaning operating eral ' Costs whose ury's anouncement added: the public ' above comparison that along with the Calvin Coolidge economy, the . ^certification represented- by burden v.. countries counts may be released under the pre¬ possible real. relief must take place in the non-government other •of figure,, and not greatly abov.e increased ; Greece has been added to the'list result the expenditures; that iSj a reduction such $3- than more however, of/, these ; several services conducted upon an economical and efficient basis. At the same time, it should be recognized that a still doubtful. Secretary of • the Treasury Snyder announced on Oct 15 that annual of these reductions the total gov¬ ernment ; outlay in 1922 was is Greek Funds Released the public on severely burdensome tax a balanced budget in, structure, the years ahead 000 or-about 12%. As to the inter¬ the volume carried in • in¬ for as since 125,- was for as¬ It is sound sense to easier, the decrease 52,000,000,000 saving and rbtire- postpone -capital "where years ago, government The outlay for such purposes increased roughly from $1V3 billions to $1,477,100,- war We should not, through current business polices, contribute to in¬ flation. Emphasis should be on - two the substantial. the *• "economy and rnent of debt. .with of present with the prewar year of 1917 were not railroads in September this year,' work and - Compared ices greatly lessened taxpayers' burden corre¬ spondingly reduced. It is of September, 1945. The amount of course highly desirable that every traffic handled by the. Class. I effort should be made to have the sensible economic will ruse, period same government is due to the insati¬ able demand of the several serv¬ them decrease go is last i year. about new will Permanent no -commentator. business a ton-miles in the September traffic amounteds to we must retrace our steps to the.prices of 1939. Rather the problem is to bring about a bal¬ of prices and costs on 000 535,800,000,^ 000,000,000 ton-mules. "that ance miles compared with r high employment and a high level of production in this country. If Outlook for Business and the Securities Markets much as the trend higher page 2070) implications of towards substantially levels over period a had become of aware the fact that the physical volume of consumption at retail had not in¬ since creased March that and surely be intensified competition, particularly in soft goods and consumers' services, a buyer's market in many items and lower wholesale and retail prices that the next major of out this over-all manner we sult /.will of time. We prewar; level. If -we; View) long-range / business outlook are we ourselves the as certainly pricing a part of the market for these goods. The re¬ when (Continued from us The probably had declined. The change from a rapidly increasing trend to a declining or stationary trend of physical volume of con¬ sumption suggested to us that the basic economic position was be¬ coming less favorable. The rapid increases in retail prices and the in at the in a high level of busi¬ a very shortages of labor and ma¬ terials and many other develop¬ ments that come to mind are typi¬ cal of such a period. ness, and wider of consumers' goods, in¬ cluding consumers' durable goods. This unusual feature arises from he slowness of reconversion of he consumers' durable goods in¬ range The fourth and final considera¬ not wait industries to reconvert spending its money in lav¬ The public did dustries. lor these tion of importance has to do before profit about our) concern the These current version developments reconversion goods is near completion, consum¬ character because of more basic ers have lifted their spending to a -light level and retail price in¬ and longer-range economic trends. These can be discussed under four creases are taking the edge off prospective markets. important headings. might assume 5 more a with margins. I expect that when we get all through with our Now when recon¬ consumers' durable fashion. in ish longer-range outlook. profit to margins a Since the Are ended the Ameri¬ war second The - 1 :• ja. mi. • : _ Ll i - ... civilian econ¬ normal in pre¬ days even though the volume business and the price level war of will be higher than prewar. We are High basic rt VI —. accumulated savings, high level of current in¬ prompted this wave of increase because of in moderate fur¬ a national income counted A further increase a in production: and increased wage industries. No doubt at a will step in Great a Deal1 stocks already seem to be selling at prices not much above long-term values, while others are selling much above long-term values. One of the jobs that we have is to ap¬ praise an individual stock from great many some stabilize and remain high plateau for two or three years. This sort of development seldom occurs in a free economy. us justments may well ber that the the total of put Activity at Present Is Close to Capacity will not increase greatly from the present level it is obvious that the market will be unable to take all the goods and services now bought and at the sorb the are will now same tremendous consumers' durable being time ab¬ amount of which being manufactured and goods shortly become available. The implications of this devel¬ opment in portant. to shift siderable our The economy consumer his are im¬ will have to a con¬ spending degree from soft goods and services to consumers' durable goods such as washing machines, refrigerators, electrical appli¬ ances, and furniture automobiles. and furnishings This spending is coming at prices at retail are There we shift in time when rising and a , are, can be little doubt that at the present time run- ning our economy at a level pretty close to capacity. Taking our history for many years in the past we know that year in and year our close to but whole, but for in¬ dividual issues. situation. Many companies have enjoyed a sharp increase in sales and their profits have sky-rocket¬ ed. Other companies have had There any are situation the certain that it a stable Since employment. and that and to present level substantially higher than the directly ber as bank 90% the basis of non-mem¬ deposits. Federal Re¬ accounts for about currency serve of currency in circula¬ outstanding Federal Re¬ all tion, and serve credit comprises about one- half of the for the total effective reserve base of the country's bank deposits and currency banks., . < outside of; 4 Changes in outstanding*FederaI credit exert a powerful influence on banking and mone¬ Reserve tary conditions. Increases in such credit under present conditions, not absorbed by increases in the public's holding of currency, add to bank reserves and permit a many-fold expansion in bank de¬ posits. Decreases in Federal Re¬ be pre¬ serve credit, not accompanied by served. It also sought to devise reduced currency in the hands of central banking facilities that the public, reduce bank reserves would be responsive to the vary- and may function to impose a ing banking conditions in different many-fold contraction in bank de¬ parts of the country and still posits. Furthermore, such changes make possible a uniform and har¬ in Federal Reserve credit affect monious banking policy for the not only the reserves and deposits country as a whole. It further con¬ of member banks, but also those ceived of a central banking sys of non-member banks, which in¬ tern that would serve as a pro¬ clude most of your own institu¬ vider of elastic currency and which that structure could in soften that and We have a large for the System experience had been he distribution of authority over acquired in connec¬ credit policies. Through all of the tion with problems of financing changes, however, runs a very war. Today the Reserve' System genuine consistency with the origis fortunate in having a large res¬ nal broad purposes of Congress ervoir of experience for shaping in creating the System. More im- |i policies that will influence the fu¬ portant, the basic organization of ture course of banking. Not only the System remains unaltered, it is the System able to draw on its continues to be a "grass roots" experience in helping to finance central banking mechanism. And two World Wars, but in addition its policies continue to be shaped it • has available the broad and by the interaction of regional and varied peacetime experience of national influences which its the Twenties and Thirties and the fundamental structure makes pos¬ strengthened powers which the sible. Congress has seen fit to grant it Today the Federal Reserve Sys¬ from time to time. This war-time tem has some 6,900 members, in¬ period, however, like the last one, has brought significant changes in cluding more than 5,000 national ;• banks and nearly 1,900 State the country's banking and eco¬ banks. These member banks hold • nomic conditions. These changed about 80% of the $160 billions of conditions give rise to a degree of uncertainty as to how the Sys¬ deposits of all banks in the coun¬ reserve bal* tem can and will function in the try. Member bank ances with Reserve Banks total period ahead, considering the aims about $16 billions and these bal- : and principles underlying its leg¬ ances serve not only as the basis islative authority. of member bank deposits but in-) may occur in | commodity prices.) potential demand consumers' durable goods and decline business inception of he Congress has seen fit on sevoccasions to modify various eral principally elements should and vital details of the original struct& Then, at the end of ture in order to make it i more) the Federal Reserve adaptable to the country's chang¬ policies adopted had far-reaching ing financial requirements. On the importance for the future devel¬ whole, the changes have worked! opment of banking. At that time, o strengthen the structure, to the Federal Reserve System had clarify functions, and to delineate only six years' experience behind more sharply within the System housing. We have a large poten¬ tial demand for some types of capacity. much below the a World War I, economy business in the future is likely be as markets transition. does not run construction including public The government will Whether it works. runs year in and year out at 70% spend large sums for our military establishment and for other pur¬ or 80% of capacity is really im¬ material. The point is that our poses which should exert a sup¬ economy operates at capacity for porting influence in our economy. Therefore, we may not run into a relatively short periods of time The war increased our capacity serious depression but rather a to produce by a very large temporary wash-out or recession amount. No one can say how lasting from a year to eighteen much capacity has been added but months. We may have a high level it may fall within say, 30 to 40%. of consumers' spending with in¬ If we are now running close to creasing competition, lower prices and relatively rigid costs, result¬ capacity the average level of ing in poor profits. out the with (Continued from page 2080) to Two and one-half decades ago, the banking system was in similar Business Outlook spending consumer are peacetime | their operations and coordinated ' equipped to realize its in their credit policies by the fullest potential in terms of out¬ Board of Governors. ups rising tide# of consumers' durable goods coming on the market dur¬ ing the next few months. Since must remem- 1 not dealing with' • come we we stock market rather % further read- ) stock market While inthe pause.; economy Our economy the sharply rising prices at whole¬ sale and retail. The other is the suffered as much as they do normally in a serious bear market. That alone should give is characterized by poor profits during the first two and downs and some times or three quarters of 1946 because and some people will use accumu¬ the fluctuations are extremely of the effect of substantial cut¬ What Is Basic Conception of the lated savings as a means of in¬ rapid. At present we seem to be backs of armament orders, rising Federal Reserve System? headed toward the end of a sharp¬ wage rates' and price ceilings. The creasing their spending. Yet it At the time of the founding of doesn't seem reasonable to antici¬ ly rising trend in capital expendi¬ companies that enjoyed large the first Morris Plan back in 1910, pate a substantial increase in the tures by industry and it seems earnings may show a substantial the National Monetary Commis¬ rate of consumer spending through only reasonable to ^assume that decline in earnings during the the remainder of the boom. I this will be followed ■) in due coming year in view of the out¬ sion of the Congress was engaged look for business, while the com¬ in comprehensive studies of the The consumer has been spendcourse by a sharp reversal. Such banking structure to point the ing lavishly in the face of rising a sharp reversal cannot be many panies in heavy industry that have shown poor earnings may way to a stronger, more effective prices of retail for; goods land months off. some improvement. This coordinated and flexible banking services that have been available. If increased competition should show system. When the Congress be¬ He has spent for soft goods, result in a lower rate of profits improvement in profits of heavy came convinced that major de¬ movies, liquor, {ravel and other in many consumer goods indus¬ industry which is now underway fects in the country's banking or¬ items that he could obtain. Much tries, the current extremely may only last a few months be¬ fore a decline in business causes ganization might be substantially of the merchandise and services high rates of capital expenditures remedied by the addition of cen¬ have been of an inferior quality may also be reversed. In that a reversal. Such a situation does not provide a background for tral banking facilities, it under¬ at high prices. Two current de¬ case, it is quite to be expected took to design a system suited to velopments will effect the con¬ that these expenditures will be much higher stock prices. the existing dual and independent tinuation of this spending spree. curtailed considerably in 1947 and Some Constructive Elements in banking structure and under One has already been mentioned, 1948, rates in Instalment loans will also increase ) proportions. These poor earnings have had a sobering ef¬ fect in the market. Many stocks The Federal Reserve System Credit Control , ditures attempt to Many Stocks Have Already Dis¬ large There will be unemployment viate the situation. — and the ther in will and take various measures to alle¬ torical basis or in relation to the of making estimates may prove output of consumers' goods may be fallacious. of less concern, perhaps, than the come Outlook for Stock Prices Only spending. At the present time, the oresent trend of orders or con¬ Mediocre tracts and the present trend of consumer is spending at a rate in This in general is the back¬ line with his current income. Any capital expenditures. Orders or further substantial increase i in contracts, and expenditures have ground that I would use in judg¬ spending can only come about been increasing lately at a rate ing the trend of the stock market. through a further considerable in- , which cannot be sustained. It In the last analysis the. trend of would be comforting to believe the stock market will depend up ¬ crease in national income, through borrowing on instalment or that the sharply rising trend of on the outlook for profits and Since, the ending of through the use of accumulated the last few months will continue dividends. the war we have had a unique and that after that capital expen¬ savings. the increase an will result in no greater than sential considered those Capital Expenditures by Industry Spending Spree by Consumers like decline in business and competition omy * serious going through a; major read¬ justment t>f our economy in terms of productive capacity, the price point that can public has beem engaged in a should be considered is the high level and the cost of doing busi¬ spending spree unequalled in his¬ After these readjustments level of capital expenditures by ness. tory. From last Fall until this Fall the public increased its cur¬ industry for plant equipment. All we expect that competition will rent rate of spending as much as you have to do is to take a look equalize the return on capital in¬ vested or on volume of business normally would take place in an at the orders for machinery and entire business cycle lasting sev- ' equipment or the contracts let for to a level not greatly different i ' Iv. v-I ril ' /»AV» industrial and commercial con¬ than that prevailing before the eral years. This spending spree Many earnings estimates al¬ was made possible only because struction. Capital expenditures by war. are running at about low a very high volume of busi¬ of a reduction in the rate of con- industry sumers' savings out of current in- j three times prewar. Prices are ness in combination with very high profit margins. The high up, but even allowing for price come to normal or less than nor¬ mal from the extremely high rate increases it is seldom that such level of business easily can lead of the war years. The relief that a - high level of capital expendi¬ to the assumption that profit mar¬ the war'was over, the need for tures continues for any length of gins will also be much higher time. The high level on a his¬ than before the war. This method many types of goods and services, : ernment a Will Reduce Profit Margins in Many Industries prospect of further price increases creased there is little doubt that the gov¬ have Competition this Fall and next year further in¬ dented to have a number of com- have already that we are present experiencing many of normal developments that a boom. Rising been prices, soft? goods than rather services conclude characterize has boom present concentrated in tivity will be downward. consumers' goods. for many it the It is unprece¬ point of view. this panies reporting deficits or poor earnings during a period of in¬ tense business activity of boom¬ we change of ac¬ We must remember Thursday, October 24, 1946 ' CHRONICLE THE COMMERCIAL & FINANCIAL 2100 source of emergency funds to meet seasonal ments and temporary of member require¬ banks. Finally tions. 1 setting .up the Federal Re¬ serve System to function as the nation's central banking mechan¬ In projected centra banking facilities which would be ism, the Congress was not un¬ aware of the strategic banking adaptable to varying levels of business activity, to secular and monetary powers and respon¬ sibilities it was vesting in the growth in production and trade and to changes in the structure of System; nor of the likelihood that the economy. The result was the these powers and responsibilities; Federal Reserve System, with its would assume increasing impor¬ twelve regional Reserve Banks, tance with the passage of time. In addition to investigating fully Wash¬ each with original capital sub¬ scribed by members, these Re- the country's needs for central the Congress Any administration in ington is more or less committed to a policy of maintaing relatively serve Banks to be supervised in banking facilities, the National L ■Y •v tVolume 164 .;; Monetary Number 4536; i'"'. ' ^ 'Vy'" of Commission,;, for Congress, > , • . it would function continuously in the national public interest with¬ out regard to immediate or run fected the so-called availability of bank credit. v, ■?/. -". • longThey also influenced profits. discretionary Just its to powers ad- credit operations, within Jimits prescribed by statute, ac¬ / cording ;to 'With ■:= should view a commerce to and Later, language, such "the maintenance of sound as credit conditions" and "the ac¬ commodation of situation ' preventing "preventing the credit" for of the "injurious contraction," excessive speculative use pur¬ poses. Originally, 'the Reserve System provided with two major insstruments of credit policy. The first was terest or which to determine power discount individual rates on member in- loans banks may^ obtain from Reserve Banks toy direct advances or by discount¬ ing paper to finance payments for agricultural or industrial prod¬ 7 ucts. The second major instrument was the power to supply banks with reserve funds or to withdraw such funds by the purchase or sale of government obligations. It was • , anticipated that Reserve credit in¬ fluenced by these methods would the broad purposes of the System and that such credit ex¬ meet * tensions,; under the discretionary powers governing them, could be , , geared to the temporary and long¬ needs of production and trade, without risk of inflation. It er-term was of the conception of the framers the System that the discount ffate was to be the principal fitrument of credit control. Under the circumstances inpre¬ vailing during the first years of the System's existence, this con¬ ception was realized, not fully but .; an considerable part. While there little need for Reserve System credit prior to World War I, the , erations of the Banks and to discount as general several assure was requirements of war rate credit Reserve their admin¬ finance that ensued quickly after declaration of made necessary extensive loans to member banks. These war operations resulted in part from the increase in Federal Reserve currency to meet the needs of expanded busi- same objectives policy, "the maintenance namely, of sound credit an market operations were em~ twin instruments of as ordinated Was r the In order to bring about coordination of open-market op¬ central banking Control • in ease situation. ployed Early Experience in Credit v due conditions," the System organized Open Market Investment Com¬ mittee early in the 20s. From this point on, discount rate and open- of ? other mone¬ tary developments, to induce un¬ general credit expansion and sand >: to open-market istration with the credit with instrument for influenc¬ an the demand ing ' for a 2101 Its purposes especial-] ables'during the wide fluctuations, by cutting j borrowing power of persons seeking credit for the pur-1 pose of purchasing or carrying se- j curities. Y.'y 'y.; down the . first, were, particular strain demand for type of credit, subject to ly " 'V /'.vACvV'- VMI to re¬ dur¬ consumer emergency pe¬ riod and thus to reduce inflationpressures on available supplies of these goods; and sec¬ ond, to restrict the overall growth, ary of credit consumer and of con¬ Subsequent to the adoption of sumer buying power during this these changes in instruments for period and thereby to moderate influencing bank credit and mone¬ inflationary pressures in general. The major focus of credit policy tary conditions, Reserve System credit policies were generally in after the nation's entry into war ministering credit policy during the nature of adjustments to the necessarily became assurance that the late 20s made it clear that prevailing easy credit conditions an amply supply of funds would speculative credit expansion could that resulted from international be available at all times for fi¬ not be held down by discount financial influences. During the nancing the war effort and that rates and open-market operations revival of the mid-Thirties, re¬ conditions in the government se¬ without putting, the entire credit curities serve requirements were increased market would continue structure of the economy under to prevent the large volume of satisfactory from the standpoint severe and excessive strain. of the excess reserves from government's requirements/ becoming the basis for an injurious credit ex¬ Initially, this involved downward Reconstruction of Credit Control adjustments in discount rates to pansion and to place the System ? " in the - commenced commerce, indus¬ try, and agriculture," the bearing of System operations "upon the country," Z the "accommodating tended, together with business." strengthening, the ' System's powers, the Congress expressed its aims in similar broad ,v of government, securities market and in - experience cer¬ that be the exercised current Ebanking and monetary conditions. powers After World War I period, the Reserve Banks on their own initiative function through operations.-.These first experimental operations had disorganizing effects upon the the needs of ?:J;';**The Congress indicated tain . Developments During the 20s the decision to provide the System "With •■'V:'- v'/- • THE COMMERCIAL & FINANCIAL CHRONICLE' the than through paper originating in1 serve Banks to /liquidate their carefully direct customer relations. Experi¬ stock market loans,*1 This policy studied the credit operations of ence with this method of discount was quickly frustrated when loans jthen existing central banks of rate operation, moreover demon- ( to; the stock market by lenders other countries, and clearly set strated that changes in discount other than banks expanded in forth the nature of central bank- and money market rates were 1929 at an extremely rapid rate. functions in terms of their history promptly and ■ directly reflected Discount rates were then raised UP to that moment. : \ | in the cost of credit to bank bor¬ sharply as a warning to the strong The findings of these studies rowers. The experience further speculative forces prevailing, / greatly influenced the original showed that changes in the dis¬ while open-market operations f. ; framework devised for the Re- count rate also influenced the dis¬ sought to avoid an undue tighten¬ fserve System and the structural position, of banks to lend to cus- ing in the credit situation. Viewed y/ safeguards adopted to assure that,; tomerSj that is to say, they af¬ as a whole, this experience in ad¬ benefit Z effect policy, with a co¬ on general bank credit and monetary conditions. The objective of Reserve Sys¬ tem credit the balance operations throughout of maintain sound in of terms the the 20s credit was to conditions relation of total bank deposits and currency to the of production and trade, to contribute to greater business and financial stability. Accordingly, credit operations volume and so directed to tighter and more were credit costly business conditions when and speculative activity excessive and, con¬ Thirties . credit new low market. :y Concurrently, openmarket operations were used as a tion in in The unprecedented crisis which break in banking followed the 1929 closer touch with the banks levels and central \ reduc¬ requirements reserve in some for markets. Later, it entailed open-market op¬ money security prices put the means of moderating temporary in the position of disturbances in the money market erations in such volume as to last resort, making and of maintaining orderly con¬ provide banks with ample funds funds available in a limited way ditions in the government bond for meeting unusual expansion in through open-market operations, market. In the the public's demands for currency same period, with but largely in response to the ini¬ the rise in stock speculation, the and with adequate reserves for tiative of the money market. Board made upward adjustments absorbing such government securAfter the storm of crisis and in margin requirements. During ities as were necessary to issue credit liquidation cleared but were not sold to non-bank in¬ away, and after the business Reserve Banks lenders of easy credit policies again became the order of the day. At this point, however, unsettled inter¬ slump be¬ ginning in 1937, downward ad¬ vestors. As a further phase of alljustments were made in both re¬ out assistance in war finance and and serve margin requirements to that assure the cost to the national conditions, together with the country's favorable creditor and also* in discount rates. oosition System adopted stabilization of general pattern of System credit the prevailing pattern of interest policy followed in the 20s, name¬ rates as a primary objective of strengthened devaluation, drew stantial amounts by gold to our dollar in ; sub¬ markets. . These actions confirmed Treasury the debt of expanding war held down, the its 'would be 1 ly; of ad j u.Tting policies, with a Largely because of the gold in-! view to money-market policy./ ;/ moderating booms ' and flow, bank reserves increased far The close wartime cooperation depressions in business activity. . in excess of requirements. Condi¬ tions of extreme credit ease there¬ There was/ however, a funda¬ the; 20s in . between the Treasury and the Re¬ serve System "made it possible to finance the most expensive war,; policy.' in history at low and stable rates." Then, the main reliance for this eral Reserve credit operations. purpose was on the traditional It also produced, however, an un- » In these circumstances, the Re¬ central banking y instruments of precedented expansion in' banlc serve System found itself with¬ .discount and open-market opera¬ deposits and the money supply. out power to exert the period of war, the much, if any, tions. In this period, because of Over restraining influence on banking the changed financial conditions country's money supply—demand and monetary conditions. prevailing, major emphasis was deposits plus currency in circula- y Defects in the credit powers of placed on the System's additional tion—nearly tripled. In addition, time deposits nearly doubled and the Federal Reserve/. System general instrument—:the power brought to light by the banking to change reserve requirements, the public came into possession of a huge additional volume of li¬ crisis and by changed financial and its new instrument of selec¬ conditions were the subject of dis¬ tive credit control—the power to quid assets in the form Of govern¬ upon developed market without in the benefit money of mental the contrast mechanics with of credit Fed¬ appeared versely, in the direction of easier and cheaper credit at times of business recession. They were cussion and remedy by the Con¬ determine margin requirements also directed at reducing seasonal gress during the period 1933-1935. against registered securities. While and other temporary disturbances The System's discount powers! traditional instruments continued in credit conditions. In the end, were enlarged by making all!to be used, the altered financial these methods of operation were sound assets of banks the potential setting made their role one of sec¬ decisively upset by the feverish basis of advances by Reserve ondary rather than primary im¬ stock market speculation of the Banks and by giving the Reserve portance in governing general ex¬ late 20s which, together 1 with Banks a limited power to lend pansion or contraction in bank business recession, brought to a the directly to established businesses credit and money supply. close one oJ the longest bull mar¬ unable to obtain credit elsewhere Open-market operations, in fact, kets in stock prices in history. on a reasonable basis. Second, A had become chiefly an instrument Prior to the establishment of Federal Open Market Committee to help maintain orderly condi¬ the Reserve System, the market was established by law to coordi¬ tions in the government securities for stock exchange loans had nate open-market operations and market. Admittedly, however, ex¬ served some of the important to integrate them with other Sys- pansion of the public debt during functions of a central banking ter credit policies. Third, the the 30s had made this market mechanism. It provided a ready Board was given an additional virtually the pivot of financial or¬ market for surplus bank loans major instrument of general cred¬ ganization. funds and a ; ready market from it control in the form of power which funds could be withdrawn. to Effect bt War on Credit Policy change member bank reserve introduction of the Reserve requirements within statutory System did not alter in any basic limits. Fourth, the Board of Gov¬ way the role of the call loan mar¬ ernors was given the power to ket; in fact, under the impact of influence credit conditions by de¬ the great bull market of the 20s termining maximum interest rates The As the nation ment securities. tered transition ; from en¬ to war it confronted a redundancy in its monetary supply and liquid peace, resources, and the »reality of extreme /inflationary pressures, largely ? from The money monetary . causes. supply, which had av¬ eraged 50% of the economy's total product in the 20? 70% and in the 30s, had risen under war pres- ;;; to sure nearly 80%. that "armies bilize than are the The adage easier to demo¬ of currency war" finance" threatened to be verified again, Conditions of banking transition from a war finance to a peacetime basis has presented to the System a new set of credit policy prob¬ The eve of World War • II, lems. System has had to policies were largely in¬ recognize the changed role of Fed¬ fluenced by international consid¬ eral public debt in the economy's erations. Gold stocks continued financial organization and the fact On the credit this .debt has to accumulate at a rapid rate, in¬ that become the asset of commercial lending assumed in¬ on time and savings deposits. creasing bank reserves and en¬ dominant ness activity, rising prices and creasing importance and involved banks and in addition an impor¬ Fifth, the authority of the System couraging bank credit expansion. higher costs of living, a pattern an increasing volume /of bank to out in Europe, tant asset to other financial insti¬ apply direct influence on When war broke | made familiar to all of stock market by re¬ addition to this devel¬ member banks in periods of spec¬ open-market operations were used cent war- period developments. opment, banks were.making a ulative excess was strengthened to absorb sales by timid holders of They also resulted, and in large growing volume of loans to cus¬ by empowering the System to re¬ government securities. No further part, from methods of war financ¬ tomers secured by stock exchange fuse credit accommodation to credit policy action with regard ing. World. War I expansion of collateral and were also expand¬ members making undue use of to the System's general instru¬ Reserve and member bank credit ing their holdings of corporate bank credit for speculative pur¬ ments was taken until the fall of finally induced an increase in securities. poses, and also the power to reg¬ 1941 when reserve requirements • funds. us rates on discounts and advances to members in order to check infla¬ » ■ a result of these conditions, ulate the proportion of member developments. After were the further tutions. nize It has also had to recog¬ its responsibility for continuing close cooperation with the Treasury in the management J. that of this debt is a vital factor in the restoration of budgetary equilib¬ rium of the ; and in stability durv permitted by statute as a check on ing transition of financial organ¬ Finally, it has been inflationary pressures being gen¬ ization. erated by the national defense necessary to give account to the financing needs of commerce and program. fyJ business during conversion from Also in the fall of 1941, the were increased to the maximum stability of banking became close¬ bank credit represented by loans ly dependent on the price stability secured by stock or bond collat¬ of Finally, margin require¬ security market collateral. eral. raised for these' purposes. By Consequently, while overall cred¬ ments on registered securities for early 1920 they were established it conditions were not basically all lenders became subject to de¬ at the highest levels ever set in inconsistent with the issued an Executive Systems termination by the Board, Vzy'y President the System's entire history. adopted standard for sound credit The first five of these changes Order authorizing and directing The principles of discount rate conditions, dependence of many in basic credit powers gave the the Board of Governors to exer¬ policy developed in that formative bank assets for their soundness System greater flexibility — in cise a measure of control over period were in line with estab¬ upon stability of security values terms of preceding experience and consumer credit for the duration lished banking practices. Dis¬ did expose the banking system to This contemporary conditions—and en¬ of the current emergency. count rates were related to mar¬ the risk of bear market conditions. hanced the System's powers to in¬ order gave rise to the System's ket rates on short-term open- The exposure was a matter of in¬ fluence the instrument of selective supply, availability, second market paper. Obviously, such creasing concern to Reserve Sys¬ and cost of bank credit. The sixth, credit control, which as you all assets yield to banks the lowest tem officials and led to the appli¬ that relating to margin require¬ know, has functioned by limiting prevailing return and adjustments cation for a brief period of direct ments on security loans, was an the terms on which consumer tionary p; war discount rates f, As In the war government maintenance of to civilian economy. ; Tran¬ sition requirements of the govern¬ ment and the economy generally, therefore, have favored.on balance continuance of easy general the credit conditions in the face of an inflationary v postwar business ; rates in the government market a securities special focus of poliey.*^ in bank assets are - through paper Accordingly, the Reserve System ordinarily made; pressure on individual member innovation in central banking in¬ credit is extended, and thus re of this type rather banks who were borrowers of Re¬ struments. It provided the System stricting the demand for its use. (Continued on page 2102) * ; boom, with maintenance of order¬ ly conditions and stable interest / t, "> 1,1- THE COMMERCIAL & FINANCIAL 2102 The Federal Reserve System Credit Control CHRONICLE Comprehensive Social Security and - . of destitution. (Continued from page 2083) one the now, see can rate of change, rapid as it has been, seems be accelerating even more, to (Continued from page 2101) rather than declining. selective instrument for once more responded to a nent A World of Change changed credit situation by ad^- maintaining sound credit condi¬ J . . V-" justing its policies to a balance of tions. The reason I emphasize the fact The action of the Board of Gov¬ contemporary forces and consid¬ that the postwar will be a world ernors in bringing these matters erations. of change is because change to the attention of the Congress This does not. mean that the means uncertainty and insecurity represents performance by the System has been indifferent to for the millions of human beings Board of responsibilities placed further expansion of bank credit who will inhabit this postwar on it by the Corfgress to keep the and the money supply during this world. This, in spite of the fact Congress and the public informed inflationary period. Its close co¬ that a basic human trait—perhaps as to basic changes in the char¬ operation with the Treasury in we should call it instinct—is the acter of the nation's bank credit •debt management policies has yearning for security. This yearn¬ and monetary problem. Because contributed to a substantial pro¬ ing for security manifests itself of altered banking and monetary gram of retirement of maturing in many ways. Likewise, as so¬ conditions brought about by ne¬ marketable public debt. Because becomes more and more cessities of war finance and by ciety of the large bank holdings of interdependent, the necessity of such debt, a degree of restraint underlying changes in commerce and industry, the Board's judg¬ relying upon group, action rather on further bank credit expansion than individual action grows ment is that the problem of Sys¬ has been exercised. tem credit policy needs careful greater and greater. In addition to these policies, the Group action may be either study and consideration at this System has made vigorous use of time. This is essential because governmental or nongovernmental has available methods selective of in character. Thus, the business¬ statutory authority under Amer¬ ican democracy is the source of man may seek a tariff or a rail¬ liquidation " of outstanding loans the System's credit control pow¬ road or a ship subsidy to protect for carrying government secur¬ ers. From the standpoint of the himself against undue risks, or he ities purchased in war loan drives. constructive functioning of the may turn to business and trade It has made maximum use of its Reserve System in future finan¬ associations to protect his inter¬ powers to determine margin re¬ cial He may even join trusts or developments and from the ests. quirements for purchasing or car¬ standpoint of the public interest, cartels to keep down. what he rying corporate securities. Fi¬ it is desirable for Congress to de¬ considers undesirable competition. control. It has the encouraged it has maintained with termine the policy which should The farmer may seek a tax on minor adjustments its selective be followed with respect to the oleomargarine or an embargo on control over consumer credit.' As questions which have been Argentine meat or a parity price a result of these selective credit brought to its attention by the or government loans or govern¬ measures, a significant contraction Board. ment subsidies of bne kind or interruption of f income accidents, old ag^ death, and unemployment. In other words, we should strive to devise a system which will spread income over periods of nonearning. as well as over periods at earning. - This can be accom¬ plished to a i large extent by a comprehensive system of social However, in the when it is used to specific program of ac¬ against due to sickness, narrower sense, describe a tion, it is usually confined to gov¬ measures designed to eliminate want by preventing the loss of current income,, ernmental , . , Many well-meaning and social¬ ly-minded people believe that if we maintain full employment can and full production there is insurance no has ities occurred and some * * re¬ We have * , the traced another; v and role straint has been imposed on the function of the Federal Reserve expansion of consumer credit. System in credit control from the Thus, banks have had a greater System's beginning. The record is margin of flexibility for accom¬ one of constant 7 adjustment to modating transitional credit needs rapidly changing financial condi¬ of commerce and business without tions. Certainly the System has excessive pressure " for further been flexible in its credit policies, overall expansion in bank credit but this has been necessary in our and the monetary supply. ■■ • , dynamic, free enterprise economy. .•'-iv:. V-". t It is a good thing at this point of The Legacy of War Finance i reappraisal of the Federal Re¬ From the standpoint of Reserve serve System to view the System's System credit policy, the legacy credit control problem in terms of of war finance is a radically al¬ such long perspective; some as¬ tered banking situation. Tradi¬ pects of this problem appear in tional instruments of general Re¬ quite a .different light. serve credit policy have been The System since inception, weakened, at least as far as re¬ most observers would agree, has straint of bank credit expansion been a vital force in the financial is concerned; In other words, development of a free economy. , . - these methods aire he may join farm and farm coopera¬ or organizations tives to able himself assure reason¬ a income. stable and - The worker may seek government leg¬ islation prohibiting court injunc¬ tions or a Wagner Act preventing employer interference with labor organizations, or legislation plac¬ ing a floor below wages and h ceiling over hours; or he may re¬ sort economic his to through unions labor power control to working con¬ usually largely upon governmental action to protect his hours, wages, ditions. must and The' rely consumer rather interests. Thus, we have a law providing for meat inspection, a Pure Food and Drug Act, laws regulating weights and measures, Federal a Commission Trade to longer two- The problem of the future is to enforce truth in advertising, and be used enhance its role in this respect in of course an Office of Price Ad¬ either to discourage or to encour¬ the public interest. The contribu¬ ministration which undertakes to age bank credit expansion. This tion of the System's credit policies control prices. ' 1 is because commercial banks, with to the public good would clearly Sometimes the yearnings for se¬ their large holdings of government seem to lie in maintaining bank¬ curity on the part of businessmen, securities, possess a medium for ing and monetary conditions fa¬ farmers, workers, and consumers obtaining funds at will 'with which vorable to a stable and rising clash. In fact, sometimes the to expand other types of loans and level of production and consump¬ yearning for security of the very investments. They can sell such tion, without inflationary or same individual as a businessman securities to the Reserve Banks speculative pressures and with¬ ♦ no instruments that way and the create can reserves which out the or undue monetization of be used as the basis for mul¬ public or private debt. Such credit expansion. The Re¬ banking and monetary conditions serve System in its responsibility would be "sound" in any mean¬ for maintaining orderly conditions ingful sense of that word. in the government securities mar¬ may tiple ket and for of interest ities to National Air-Mail Week secur¬ is compelled by its policies provide the reserve funds / Postmaster Albert Goldman nounced on Oct. 1 that an¬ National sought by commercial banks. This Airr-Main Week will be observed situation presents control on reported to from Oct. 27 to Nov. 2, 1946, and invites the public to visit the General Post Office, 31st to 33rd Congress in its last Annual Re¬ port. It is a problem that needs Streets and Eighth Avenue, where an exhibit of air-mail maps, air¬ the future which: be to ers . these on of the problem a credit Board for studied carefully by bank¬ mail time tables, and an electri¬ and business men. cally operated air and train time The trols area is of selective credit another field careful in con¬ need of schedule the says: developments have induced the System to put considerable re¬ liance for specific purposes upon Mail selective credit control map main Wartime consideration. farmer or a worker clashes with his yearning for security as a consumer. men they Naturally, business¬ and ^ farmers want to get sell as and workers high prices for what producers and pay low prices for what they have to protecting the pattern rates a . "The are on lobby. •> Mr. ;v • purpose Week is display in Goldman -v- of National Airto * encourage the buy as consumers. Under such conditions, it is of course neces¬ sary for the government to under¬ take instru¬ the of air mail service considered most expeditious means of all of these yearnings for individual security in order to achieve the maximum amount of general security paid to - compensate for a reasonable proportion of the wa^e of loss sustained. set up current these a income. people fail to However, realize of the physical disability, . old age and death. In our modern society these greater interruption of earnings greater destitution than far and hazards However, far cause numbers of persons are unable to tem. protect themselves for governmental cumstances. The particular form of with which are other well-meaning socially-minded people who Contributory what has come security. to be called social Hardly a decade ago the very term social security had not come into existence. Now it is in the process of acquiring such inclusive meaning that its use¬ fulness as a term to describe a ments, both during the war period proper and during the transition. mail transportation, and to bring specific program of action is in danger \ of - becoming impaired. This Thus, draw has a enabled line the between System limited to and general objectives of credit policy. In view of its war to the attention of the public the reduction 8 emergency ex¬ cents to in 5 air-mail cents rates per from ounce or we find world statesmen social security is asserting that the main motive of national life. We find it listed as a chief objec¬ longer- fraction thereof in all territories tive in the Atlantic Charter. run credit control problem with of the United States and its In the large sense in which It pos¬ which the System is confronted, session and to members of the is used by statesmen, it covers the Board, as you know, has asked all of the essentials of decent abroad, including the Congress also to give consid¬ armed forces human existence, such as housing, eration to the addition of con¬ Canada and Mexico, effective Oct. education, health, and full em¬ perience and sumer also of credit control the as a perma¬ 2 f» • ployment—as well as require elimination analysis much demonstrate that socialism social to and ^circumstances at the able loss aims at income of often for tractive himself dividual such nanced way case, and is usually fi¬ out of general tax reV,~ enues. A , , Single Comprehensive System T believe that is it perfectly single com¬ prehensive contributory social in¬ surance system that would cover all of the major economic hazards feasible to construct encouraged at¬ more a beneficiaries and by the employers of the potential benefi¬ ciaries. In contrast, public assist¬ ance is payable only on the basis of a showing of need in the In¬ Socialism a loss wage tential should do is to establish • b a si c protection build usually pay¬ a portion sustained, but are to compensate for the name implies, is mainly supported by contributions made by the po¬ against loss of income, upon which to • large families than to high wage earners with no dependents. Con¬ tributory social insurance, as its minimum the individual will be a to pay a greater proportion of benefits to low wage earners with social £ security recog¬ nizes that all that a government a and as However, program system usually constructed in such redistribution of wealth. a insurance However, the benefit formula is without which cause. Public Assistance applying a means or needs test in the individual -case- It does this by providing individuals with a min¬ imum degree of protection against changes fcje cannot own resources.. without social problems. the vs. system benefits of time creating serious same which systeqi of public assistance. Under a contributory social insurance and social security proceed from dia¬ metrically opposite goals. Marxian socialism is based upon the theory of the class struggle. Social secu¬ rity is based upon the theory of social solidarity. Socialism aims at the destruction of private en¬ terprise whereas social security is designed not only to preserve but to promote private ; enterprise. Social security enables a system of free enterprise to encourage invention, improvement, elimina¬ tion of waste, variety and con¬ tinual adaptation to changing ideas priqr the sys¬ As you know, there is a basic difference between a contributory sometimes confuse social security and socialism. However, it does not of ^ There and families met out of their - occurred a their 17rv f'\ : that have establishment Therefore, there is also need basic and comprehensive of public assistance to meet the needs of individuals anjd 'V ; "'"-.J"' *; \ which to the a. workers of this well-being, country are exposed. The sim¬ through the well-known devices plest way to accomplish this pur¬ of individual savings, private in¬ pose would be to use the present surance, and home ownership. Federal old-age and survivors in¬ ; • When we undertake to establish surance system as a foundation. a social security system designed Under that system there are al¬ to provide a minimum basic pro¬ ready individual wage records tection we eliminate want, thus and established not are and of degree new striving for strange ideals; nor is it even viduals. ing for us to depend upon strange and new methods. While social security in this country is a necessary relatively recent development, been a familiar function other countries. concerned is are we the system Social Security Not Socialism nized security Certainly an insur-* system cannot insure against ance hazards against these through non¬ means.. sys¬ pro¬ tection under all conceivable cir¬ to hazards comprehensive even a contributory social insurance tem cannot provide complete unemployment, even the. unem¬ ployment that occurs during a period of deep depression. Ex¬ perience has shown that large economic out made by the workers of this country and by their employers, supplemented ultimately with some contribution from the government, represent¬ ing the entire community. ; ' great economic hazards sickness, of such cost financed be contributions of though we achieve the goal of full employment and full produc¬ tion the working people of this country will still be confronted with The should benefits that even has Security 1 >i ; Social an use reconcile to benefits are to . bank credit for carrying secur¬ which under specific social security program to prevent loss need nally, in Thursday, October 24, 1946 v: of and . of Indeed, it is maintained mechanical 74 million accounts indi¬ are through the equipment, at be¬ use an average cost of 12 cents per ac¬ count per year., There is no rea¬ it son recog¬ government for These why these individual records, cannot be used for the determina¬ in tion of benefit rights in the case of unemployment insurance as one function of government Which has well as temporary and permanent grown and is growing, despite disability and , .medical care. changes in government and two Through the .use of -teletype world wars. We have a world his¬ equipment the individual records tory-and world experience upon could be made instantly available which to base our planning and to any local office throughout the our action. Indeed, we already country;, so that claims could be have in our own Social Security processed without delay. V t Act the fundamental elements of of social security de¬ eliminate want. It is only necessary for us to extend, expand, and improve upon our present Social Security Act in the light of the experience and think¬ ing that has developed since that act was passed in 1935. ^ a program signed to , Since the security of the large majority of people is dependent their earnings, the focal point of our efforts should be to ; v Employers would have to make only the four quarterly wage ports they already make re¬ under the Federal old-age and survivors insurance system. in sharp contrast This would be with the 209 reports ah employer is now re¬ quired to make under the old-age and survivors and the insurance system upon provide reasonable protection ment 51 different insurance laws unemploy¬ if he hap- Volume 164. THE COMMERCIAL & FINANCIAL CHRONICLE Number 4536 pens to these juristUcttons.;.i'.<;/• r*;/ be operating in , all . be used for all phases of such a system of contributory social in¬ There' should surance. established unemployment be advi¬ committees and, in the sory of also representative compensation, local :: : • The fact that is possible to de¬ centralize claims determination is evidenced by the experience de¬ veloped under the Federal old- and survivors insurance sys¬ age tem.all claims are claims The taken place old-age under and which to four under and different drawn benefits under the calculated of that I the on made were ject to appeal to a tative / tripartite!; locally, sub¬ local represen¬ board which would be too becomes. Iii hazards. -From ministrative np longer , groups * should from the protection there why any be /excluded ;and there is every reason ease of workers for small ' ; mail carrier and in urban they could be purchased offices.;/■■■/v areas at post Payroll Deduction . ; - self-employed sons against temporary there would be ployee loss wage no to serve specific or as test a of entitlement to benefits. However, it would be perfectly feasible to insure self-employed persons against the other economic haz¬ ards mentioned, years it is probable that the current costs all of the benefits count in suggested, than covered by a total combined rate on depending on provided. This both payrolls of 8%, the exact benefits would employers' include and. employees' contributions. The total combined normal rate at the present time is 5%. However, present . ; ,1 under rate. Act. this 9% by Jan. ; " I'':1:;. il,11949/ Universal. System Best believe that a unified prehensive system of social insur¬ ance that offers the greatest there overlaps pr will assurance be,.no gaps or anomalies in the pro- tection.fthat is afforded against how , Decentralized Administration v The administration always the believe that enterprise is simply this: some insurance previous history and beneficiary has Therefore, differ¬ wage past income has been which able to an de¬ velop -is; given some recognition. In- contrast, under any system of public assistance, since the assist¬ is ance based it need, a the on remains person individual true that the saves the health course centralized all that so and thorities could on be necessary doctors and health au¬ subject to ad¬ local a be de¬ basis. 'The local hospitals and doctors should be permitted to choose the method of remuneration which they de¬ sire. Besides free a insured. individual is recognition given to length of time entials'in there of insurance should of of choice remuneration, should provide of system choice - of physicians and free choice of patients. The professional organ¬ izations themselves should be re¬ lied upon to assist in the main¬ tenance and promotion of desir¬ able professional standards. less *he Voluntary organizations that possibility of no a proyide health services would have of invidious an tive of great distinction individual virtue of. destruc¬ morale. The contributory a health insurance. voluntary however intelligently and sym¬ pathetically administered, creates important role under an tions others not cooperative that paying , are a system So would organiza¬ hospitals, for health services ? provide rectly. with concerned doctors, these or but services di¬ •' " •"•' do ■ der the State. laws of Neither ,the long than more would delay that one there be who simply to relieve it after it occurred. exists in^ always be now from, move takes has one- State to line of ; State Benefits combination insurance - of a national social system temporary dis¬ ability and unemployment insur¬ there is great need for ordination between the insurance the State various know, sev¬ unemployment agencies with old-age and have experi¬ the Federal survivors greater coverage Federal and insurance provisions any success. uniformity State laws before v is of in the neces¬ extended use could be made of the Federal old- ords survivors insurance by the various State ployment insurance unem¬ cover¬ provisions is of- course desir¬ even though the Federal old- age and survivors ords are not used employment since to rec¬ agencies. Greater uniformity in the able use it ? siderable course The insurance by the State insurance might enable • rec un¬ agencies, employers carbon copies of one wage a between portion sustained cover lately. Of distinction must sharp cover loss con¬ attention a first be made to the of and cost American insurance the wage insurance of medical Medical to care. Associa¬ tion, which, as you know, is op¬ posed to a system of contributory social insurance to of medical to cash care, cover is not indemnity to the cost opposed pay a por¬ tion of the wage loss due to sick¬ ness. - of the problem of spreading the costs of medical I believe we care, must recognize, that large and people the government poll the last this is act. that tion, as a of years medicine implies medical by physicians employed - by - the government; health insurance, on the other hand, implies a system whereby services provided favor of sory result is wholeheartedly in the principle of compul¬ covered sons cial insurance fund for the ices they render. serv¬ In other words, and the Canadian Association has gone on as tributory : - ? System, - mented So much In by for hqalth insurance is a system in contrast, a system for /;?• since the Social Security Act was passed is many times the amount written in all the previous years. As you insurance. em¬ there prehensive insurance contributory system social supplemented the feasibility and desirability of additional insurance to supple¬ ment the. basic insurance protec¬ tion provided under the govern¬ I am confident that ment system. insurance companies public: to tection obtain An Let the It would protecting people of this country against economic bed releasing necessity selves. hazards, of It would a them from helping be not an them¬ effective Thrift . Plan also not forget that un¬ contributory social insur¬ system, the financial base is automatically provided. The der us a ance workers of this country and their employers for pay that are for giving received. the benefits It is not a plan everybody something for nothing but a plan for organ¬ ized thrift. As former Prime Min¬ ister of Churchill social said, the insurance is essence "bringing the magic of averages to the res¬ of the millions." cue •''/*///•//: I do not pretend that the pro¬ gram I have outlined will usher in. Utopia. who Even and necessary lieve basic that there so, believe minimum a security is unwise. result social forces. convinced of un¬ They be¬ by and large, is due to personal quacy/ and derelictions than/the are that providing destitution, inade¬ rather impersonal Therefore, they that are government any action aggravates rather than re¬ lieves the problem. must we agreb that so¬ cial security does substitute hopes for fears. It really comes down to question of just how much a faith we have in the and in democratic Putting it bluntly, whether side must by be the driven the fear common man government. must we common to deman himself exert of .starvation or whether it is hope of reward that leads to high endeavor. / If the needs to be common man driven by fear of starvation there be can a little very of law of is man land, and the the common mind, reliance as worthy a of has a the the will Indeed, fear of on motive the force is slave nation, not a * The greatest just certain shall inherit man starvation. vote for my starvation- be for democracy the will common make hope of democratic government. success history net pro¬ insur¬ V. V;/ ::..Vv Organized free nation. safety private ance.;;;:.' system—would provide only a additional through comprehensive public assist¬ provide generally ; believe that this government sys¬ tem educates and induces the a people of this country. radio, are ance minimum basic security for the from the several large life in¬ companies that are bas¬ ing their sales promotions largely not com¬ noticed and surance to a have may advertisements In Public Aid health suggested—namely, feather also already happened in the case of the Federal old-age and survivors insurance system. The amount of group annuity business written phasize that the twin program I medical but to provide still better security for himself and his fam¬ ily through individual savings and private insurance. This has have major practice; Supple- conclusion, I should like to the care pro¬ Advocates Comprehensive Con1 socialized medicine is not only a medical services favoring the principle of compulsory health insurance. ; system for spreading the cost of of Indeed, it Likewise, Medical record a spe¬ health . individual I think thirty over with health insurance. vided. who a of > . this . • Associa¬ assumed leadership in de¬ manding that the present health insurance system be made more comprehensive in terms of per¬ by reimbursed from taken shows that has medical service is provided by private, competitive practitioners are been Medical tinction between socialized medi¬ ized has years experience insurance, we turn to the question protection against the cost of cine and health insurance. Social¬ country that Every un¬ , British a demand. by this ten is so. The When medical care, again it is essential for clear thinking to make a dis¬ of there . growing the in surance, since it has received involved in are a by the individual citizens country. A sound social security program makes these costs more bearable by distribut¬ ing them more systematically and equitably. Because only a minimum basicsecurity would be provided, there would be every inducement to the of some governmental attempt to meet any biased Perhaps before closing I should say ; something, about health in¬ , using records with considerable However, co¬ you may mented sary defense Health Insurance covering what might be termed the long-term risks, such as permanent disabil¬ ity, old age, and death, and State systems covering the so-called the secondary, against human a want. But, regardless of whether we have a straight national contribu¬ tory social insurance system or a of Therefore, it must first line of defense and public assistance Need of Co-ordination With ance, a Though hazards a provide borne method the free . would In fact, in a very real sense the costs of insecurity are now being on \ I ing been split between more than social > insurance system is that ; one State or drawing duplicate it-prevents human destitution be¬ benefits because of qualifying un¬ fore it occurs rather than under¬ age com- of free I Under;;'social more - the automatically be¬ it nonoccupational accidents and diseases.,, • : age and Social; Security combined comes even norr failing to draw benefits because of his wage record: hav- eral of contribution to the full worker ; new more discuss our Thep reasori :• than compensation; covers the present system of public assistance can be and should'be strengthened. fronr been way \ there would be systems.: As be the though he - may have many States. :4, Thus, even worked both the present benefits and the benefits, would all short-term risks of ; During the first few of ranging , or employer-em¬ relationship different 'Stalter.un- another; i because inclusive more justment per¬ unemployment disability merely fact; there vyould be ; much' contributory social insurance sys¬ consistency thaflfexists now' tem fits in better with a system mal rate of 2.7 It would of course not be feasito. insure blt is workmen's public ers >An 8% adequate compensation for physicians and hospitals hospitals the payment of benefits to work¬ "v.-;■ to and called upon to treat them. In the broader sense, health insurance However, time will me diseases Federal Then, of course, it should also gets by -way of assistance. More¬ borne in mind that under a over, in-order to get assistance, national system a worker's total the :, applicant must submit to a earnings, historyis taken into ac¬ needs/ or a /means test, which, a ing contributions made by the employer and the employee. In rural areas the employer could purchase these stamps from the believe by the be through system; system the employee would be furnished with a stamp .book in-rwhich stamps would be placed by his-employer evidenc¬ Under such permit than and . In em¬ ployers it is administratively fea¬ sible to extend coverage the use of a stamp book be, ,operated accidents a one-tenth of 1 % standpoint of providing why they should be included. the is to agreed that, in recognized deficiencies, of the , rather one compensation has re¬ sulted in providing more adequate medical care for the victims of strengthen our present system of public assistance, which should States no generally spite with year ad¬ an standpoint, any - reasort seems circumstances. Therefore, it is im¬ portant that * we also : greatly continue that sure arrangements $210.00 to $546.00 at a weekly rate varying" all the. wayrfrony; $15.00 to 425.00. / Likewise,- employers with exactly the same experience with unemployment have to pay contribution rates ranging from coun¬ try is subject in varying degrees to these re¬ employment insurance laws; ?At present, a worker with exactly the sameearnings record- can draw unemployment benefits:ib^a possible, since all of the population of this > automatically course underthe 51 sirable and necessary that Hhe coverage of such a system be ex¬ tended as widely as more Government. would of increasingly de¬ against hazards that have already occurred or can provide adequate protection under all conceivable not individual's, past: earnings, I believe they should be, they an as death, it of work to more age, and insure throughout the entire country. However, if "benefits are related covering all of the hazards that I have mentioned of course social national contributory social flect differences in wage rates in the various parts of the country. temporary disability, old workmen's Retirement Act and the would be familiar with local labor market conditions,"; '■i/ ylf a comprehensive contributory social insurance system is adopted unemployment, disability, permanent would be too much to expect that all human destitution would be " eliminated. No system of can am abandoning work¬ compensation insurance. It it insurance already is operating would think of must, we United arising out of occupa¬ is, workmen's com¬ that — men's combined inflexible because of the necessity for uniform provisions applicable case unemployment insurance if the decisions a more in keeping with system of free enterprise than system of public assistance. I It would be minimum cost. system of compulsory health insurance applicable to accidents and diseases recognize that even with a comprehensive con¬ tributory social insurance system well. as record developed under the insurance -system de¬ system, because I believe that a contributory social insurance one the which loss wage proven maximum amount of security at a than national a surance survivors benefits now question might be raised laws.". States but in to need. proven system ' State related or system more have , Every think I.v Some compensation surance. a surance believe : that ;more realistic cisions would be made in the* I have laid more-emphasis the development of a com¬ prehensive contributory social in¬ erans' compensation, and vet¬ legislation. Until recently* surviving spouse could /also system because the benefits would be systems of compulsory health in¬ ance. upon medicine; workmen's tralized claims determination that ployment including national a countries tion Railroad unem¬ attack, state thirty pensation. I old-age and survivors in¬ system. , -• • ■ ■ ■ v,, : State of system is Federal under- most the prevention be a two- on must both social insurance and public assist¬ State laws, cen¬ exists pronged Republics has our wage insurance draw attack our care Only the Union of Soviet Socialist namely, old-age and survivors in¬ surance; United States Civil Serv¬ ice f Retirement System, State are the- Federal survivors under/any killed is Federal However, has system is in contrast with the or Railroad Retirement Act decentralized determination who kinds of have system 97 % of determined in the office. system benefits a Under that local of/ destitution worker circumstances ing the decisions. talk, insurance public retirement system. On the other hand, it is possible for- the dependents of a taken into account in mak¬ were spreading the cost of medical and does not replace the competi¬ tive private practice of medicine. As I stated at the outset of my fy for retirement benefits under the Federal old-age and survivors other private or case local tripartite appeals boards to niake certain that all of the indi¬ vidual; and report for^ both Federal and State '' ' present it is of course possible for- purposes.'. V ' • a person to have worked an in¬ A Two-Pronged Attack sufficient length of time to quali¬ A single string of offices could . risks /covered* V At the •various of 2103 war been fought that free this earth. in to people We can absolutely certain that as the forces of democracy advance the postwar world is bound to be one of greater and greater social se¬ curity and less and less individual insecurity. THE COMMERCIAL & 2104 Thursday, October 24, 1946 FINANCIAL CHRONICLE MMl credits, grant¬ ed by- the International' Bank, available for purchases by mem¬ ber foreign nations in the United Economic ; co- diet of semi-starvation. To" , lift States.;, Further, 'these loans will reasons- for that, nations takes these peoples; to higher levels mop up purchasing power, now operation among would enhance their own welfare ex¬ idle in private bank deposits, and place largely J through the /4 PQ^triflOi as well as their contribution to change of goods and services, but put these funds to work, in our ex¬ the welfare of the rest of the it'is important to keep in mind port program. ' fj' 1 • '< world- The FAO is also consider¬ then become dollar International 0r_ • (Continued from page 2077) ^ have taken the place of open and fair trading, dealings illicit the ... ... are goods in ; the for export but be moved, because _ . —-C .. . . the currency, , o>v. ~ States for the or* ganization of ITO and the Charter of the ITO which. the United States has prepared/ After this meeting-is over, there will be an¬ other meeting in "the spring of 1947 to discuss mutual tariff con¬ cessions and then a conference in by the United ■ the summer of 1947 to adopt a between nations can The United States has a deep final form of organization. It is ing plans for bringing greater sta¬ interest in the only if there is cooperation cultural, scientific, the hope of the United States that exchange rates, ex¬ bility in the marketing of "sur¬ in many other ways. A growing educational and welfare organiza¬ the final agreement reached will port and import controls" and plus" agricultural commodities—a tions of the United Nations not so go far towards removing barriers i other trade barriers, the gummed and mutually profitable trade de¬ matter in which the American much because they may contrib¬ to trade and towards increasing up transport system with its slow- pends on arrangements for stable farmer has been deeply concerned and equitable rates of exchange. ute indirectly to world trade but the commerce and shipping of the passenger trains, limping freight for years and which can be solved A weaker nation can buy and sell because they help strengthen the world. service and run-down personnel only by international cooperation. more abroad if it can develop its Conclusion I foundations of international coEverywhere there is need for The International Labor Or¬ own resources and technical skills operation in general. The UNESCO repairing, rebuilding and recon¬ Such then is the wide scope and ganization (ILO) which was will advance the mutual knowl¬ and raise its living standards, and struction. Everywhere there is de¬ varied character of the program founded in 1919 and which main¬ mand for coal and cotton, iron and it may need the help of stronger edge and understanding of peo¬ of international economic coop-, tained its activities during the nations to do so. World trade can ples through communications, eration on which the United steel, lumber, chemicals,, tools, Second World War has had the popularize education, d e v e 1 o p States is now embarked. In prac-V machines, the thousand and one be helped if the producers and workers of all countries feel that cooperation of the United States educational activities, and make things by which our modern eco¬ since 1934. American employers, tically all the organizations of the nomic civilization is carried on. it is carried on by equitable meth¬ for cooperation in intellectual United "Nations through which workers and government officials Everywhere there are calls for ods with due regard for the wel¬ take an active part in the confer¬ activities. The practical results of such cooperation is to be carried; more hands to do the work and fare of air countries and for fair such cooperation are likely to be ences and committees of the ILO out, the United States plays a for more skill and v technical working standards in the making a great increase in foreign travel, in order to rationalize competitive leading and decisive part. The knowledge to give it meaning and of the goods. The exchange of conditions in world trade so as the development of tourist trade, original drafts of the agreements direction. And what is even more goods is fostered by foreign travel the growth of international trade to protect the better living and and,', charters themselves 5 have and by closer cultural relations in books and publications and in important, everywhere there is a been drawn up by American ex-J working conditions in. advanced school and laboratory materials desire deep in the hearts of the which enable the citizens of one countries and to raise standards in perts in the various Federal de-v and equipment, and a growing in¬ people to start all over again, to country to know better and; to less developed countries. You partments. and embody the basic. want more of the' goods of other terchange of technical ideas and pick up the broken threads, and to are familiar with the work of the policies of this government. In¬ make a decent and prosperous life countries. And above all, world of research. The World Health cidentally, in the work of drafting X ILO in your own industry, with can prosper and expand in a new world of promise and trade Organization should promote the these documents the point of view the progress it has helped to make only in a world in which there interchange of doctors nurse's Itftese aocumems "ie WJL peace. ■ . is peace and as much freedom of in the life of the seamen, with its 1 oUi^r-.incf intprf»st<3 has been repEverywhere in Europe there is efforts to improve competitive pharmacists, as well as world.of shipping interests has been rep¬ also the feeling that no one nation movement as possible; trade. in pharmaceuticals, chemi¬ resented by the participation of The foreign economic policy of conditions in world shipping. can do the job alone. At no time cals, hospital and surgical equip¬ the staff of the Commerce De-'f The Bretton Woods organizations in recent history has there been the United States today is guided ment of all kinds. partment. The representatives of the International Monetary such recognition of the need for by this larger concept of inter¬ the United States Government are national cooperation. In January Fund and the International Bank i Proposed International Trade working out economic problems active in all the specialized agen¬ and February of this year it was for Reconstruction and Develop¬ Organization by international cooperation. Only cies of the United Nations and in ment—are largely the result of an than in other all countries working together, it my privilege to be in London at Perhaps more than in other _ . , _ of American and matters, the United States has|the Economic is realized, can find the resources the First Assembly of the United interchange Nations as an adviser from the British thinking. The first of these and use them in such a way as to taken the lead in promoting the cil in meet effectively the reconstruc¬ Department of Commerce at¬ institutions, the Fund, is designed proposed International Trade Or- in to eliminate the currency and ex¬ tion needs of the devastated and tached to the United States Dele¬ ganization. As i you know we! process of give and take.. handicaps which ham¬ emerged from the war with the ocratic to the Assembly. Since change war-shaken countries of Europe. gation ocratlc process That applies also to the war-af¬ then I have also had the opportu¬ pered foreign trade during the 30s trade V of the world throughly It would be futile to deny nity to attend sessions of the Eco¬ and the war years. The Fund has hamstrung by a maze of restrict- difficulties in the path fected areas of Asia and Africa. nomic and Social Council as a now begun operations and its first ive regulations. While some of national economic We witness these difficulties al¬ member from the Commerce De¬ task is to establish new rates of V War's Economic Effects these have been removed or re¬ most daily in the meetings of the; ; among all member laxed, many of them still remain. One comes back to America with partment to the advisory staff of exchange John G. Winant. In this way; I qpuntries which will bring them a sense of relief and with a feel¬ Furthermore, Furtnermore, they are uvenam tney overlaid - Economic and Social closer relation with have watched the steps by which | into' IIJL LU UAUkJVi. X •— economic ing of gratitude for having been by new restrictions due to the de- of the the United States has tried,- in! realities. As and when conditions sire of each country to protect its j connected with the spared - the horrors inflicted by U +V>/i r*tVi<ar> natinnQ I xxri 11 11 qp its with the other nations, require, the Fund will use its resources and manpower for the tions. 7 Cooperation . is the war on Europe. But just the concert to hammer out the structure for powers to prevent temporary urgent needs of reconstruction. | by the fear of same one cannot close one's eyes , to the difficulties which the war world-wide international coopera¬ shortages of dollars and of Other These controls throughout the 1 lingering passions of wartime ex* has left in its wake also for us. tion in the economic and social scarce currencies from hindering world will not disappear auto-!perience, by nationalistic While we have been spared de¬ field. It is no easy task and the the purchase of goods by foreign matically—they must be removed (mind, by conflicting struction by bombs, rockets and result may seem slow to some of nations in the United States and or at least weakened by the com-; aims and purposes, by / elsewhere.The members of the mon action of all nations. r; | standings, as to each eco- guns, we have suffered deteriora¬ you, but if you consider that it is Fund also undertake to promote tion in land, forest and mineral only a little over a year since the The proposed - International inomic world was in the grip of ,war, the exchange stability, to refrain from ort„efit„t00iand by "power-pohtics", consid-v resources as a result of the heavy Trade Organization constitutes erations which intrude themselves arbitrary changes in rates of ex¬ needs of war. We have fallen be¬ progress made in building the edi¬ our principal line of attack upon into the sphere of social-economic 7 hind in farm building, housing fice of international cooperation change, and not to use exchange restrictive trade practices. It has ~ .7 . and currency restrictions as com¬ action//,'//;// and many of the conveniences of is considerable. been designed to accomplish the ; petitive weapons in world mar¬ But ..we cannot let .these diffi¬ life. And} our very advance in following' major reforms in world /Value- of ^International ' kets. . ... , 4 culties discourage; us, nor should technical efficiency and industrial Organizations i The second of the Bretton we: over-emphasize them. All co¬ plant has created problems in re¬ If you will look at the chart, Woods institutions, the Interna¬ 1. The reduction of tariffs, trade operation:, implies differences *o£ adjustment in management-labor barriers and the elimination of tional Bank, is to help the expan¬ view and of interest which have relations, investment, foreign you will see that the organizations the discriminatory treatment of for world cooperation already set sion of world trade by making to be reconciled. / Argument , and I trade and public finance which nations in international trade. up and those projected are- in¬ loans for the rehabilitation of some friction are part of the job) are still ahead of us awaiting solu¬ tion. While our production records tended to supplement one another wartorn areas and for the devel¬ 2. The elimination of all measures of hammering out a common pol-? in the destructive of world trade by icy. :It is part of the job of the general task of promoting opment of undeveloped economic are the envy of all nations, we providing opportunities for the United Nations .: and the special* ; ourselves are not entirely at ease world peace on the basis of great¬ areas.. Large parts of the world are still virgin territory in so far er social-economic welfare for all. reciprocal expansion of world izedi international as to. how long we can maintain organizations trade. v s / ' 1* 1 ■ connected with the United Nations them without a serious break that At the top of the structure are the as the: use of their natural re¬ sources is concerned. In these Security Council and the General will spell depression and unem¬ 3. Assistance in the industrial de- to throw light on underlying con- ' Assembly of the United Nations— same areas and elsewhere mil¬ ployment. velopment of member countries. flicts even if that is accompanied the embryo of that Parliament of lions of people are eager to learn some times by a glaring and noisy Thus, we in the United States 4. The expansion of the producman which has been the hope and how to do things the modern way are also realizing more and more display of verbal fireworks. As / tion, exchange and consumption that the war has wrought a change ideal of the greatest thinkers and and have the capacity for higher time goes on, the positive results Y of goods. * • • '• development. Th eir in our relations with the rest of prophets of all times.' The main technical achieved — that of , clearing the5. The maintenance in all coun¬ minds and hearts of the people -he world. We now need more than organ of the General Assembly is progress in this respect will mean tries of high levels of employ¬ more the Economic and Social Council goods for themselves and ever before many of the minerals and of pointing the way to con¬ ment and real income, i more interchange of goods for with its several commissions and stores which which cannot trade that - grow artificial of 1- . American business, trade - - -J and — 1 '• - — * - ..... • Atw% * ^ - ,rr_ ; and Social Coun-^ promoting its policies and seeking the reconciliation of divergent views through the demof give the of intercooperation, . xiavivuuA . ua vu ^ vvwvviivw Council and specialized organizations United Na- * + obstructed insecurity, by the habits of/: short-run misunderother's systems and social ideals ^ -1- — > , , , t other and raw materials coun¬ sub-commissions. And working in coordination with and under the we use our vastly ex¬ general guidance of the Economic need to work with other tries m putting to all cooperative action—will structive which other countries produce. Above the ' benefit '■ • The Bank of ' the world a as ' *' . make loans under 6. The solution of all problems in assert themselves to the benefit of the field of international com- all. y mercial policies through collab- t j Meanwhile, we must also real* its present charter up to the full "oration among members. Y; ize that theVsuccess of the United amount of its authorized capital *> These ends are to be accom¬ Nations and of the specialized in¬ which stands today at $7,670,000,plished through the creation of a ternational organizations can be 000. Those loans may be made centralized agency which will no greater than the degree of pop* directly or the Bank may guar¬ watch .over the application of ular support which they are able antee or participate in loans commercial and business practices to obtain. They deserve our full which are locally floated. If the in accordance with the principles loans of the- Bank are, wisely of the Charter to which the mem- support and our patience..,Espe¬ whole. • can ; ; ' panded industrial facilities so to as and-Social Council are the several maintain .steady work and in¬ specialized 7 agencies for comes heed we,can skills world people. We concerned "with apply °ur resources and of the for cannot we our:,own peaceful world in which ited a benefit of all, and • areas which are definitely delim¬ and with specific tasks international and development. readjustments , , J -; - - y-. •- • keep the peace of the The United States has much "to by our own efforts alone. gain from the work of each, one of inade, they should result in a very bers will have subscribed. substantial/* enlargement of the producing, capacities of the world own problems, we too must seek Agriculture Organization (FAO), and. consequently- in the totaL vol¬ the goodwill and cooperation of for instance, has set itself the task" ume of - tradef which must- be other nations. of And so, in trying to solve our these organizations. helping - . International ■ Cooperation Needed ■ It is customary * * * ; • The Food and through research and otherwise to increase agricultural production and jto raise standards to express this of nutrition around the v world. [j^pwed,^ j.y ■ ^ y I ■ International Loans in U;v S. j As' things now stand; it is quite While cially groups like those repre* which basic Woods organizations sented at this conference concerned with such have already been establshed and are the Bretton . are now . starting jVashington, the operations International Trade Organization is project stage. nations, in problems eration of international as trade and coop¬ shipping only in the should make those organization^ The delegates of 18 chiefly, members of the the subject tinuous of careful study and give and con? them all Economic and Social Council, are help possible by way -of sym¬ of the world are still likely that the:Bank will float a substantial proportion of its loans meeting now in London to dis¬ pathetic understanding and con* agricultural * - work cooperation in terms of foreign carrying *> on cuss the specific proposals^ made *stractive suggestions trade. There are, of course, good r with primitive tools and live oh a in * the United -States;" These will hped ■ of international economic Large areas tzc /:;■-'■'"^■}^hV^t' 'rti.H' ■:'■■' • ln'M) ft. 4. ■ * • >' ;THE COMMERCIALS FINANCIAL CHRONICLE JVolume 164 ' v Number 4536 /V|. i 'k, (Continued from page 2078) problem into bold relief in this period of transition. ' J>;One of the outstanding phenom- v , ena of the recent .war this was transactions bound are to enter cline international the into sheet. The inward and balance very movements are nized conducted or so never so outward of synchro¬ no as to elim¬ extraordinary capacity inate the use of capital transac¬ to produce goods and services. By tions. Moreover, the freedom of the same token our capacity.to national money markets and se¬ equip and maintain large armies curity markets in a free enterprise in many oversea theatres and to economy makes the flow of shortsupply, through lend-lease and term and long-term capital a nat¬ other means, billions of dollars ural element in the conduct of in¬ worth of supplies and services was ternational business. unprecedented and exceeded our International Capital Transactions best hopes. By the second quarter International capital transactions of 1945 when we reached our peak of annual rate of national output are certain to play a peculiarly of approximately $206 billion we important part for some time to E ■ bad already passed beyond the come. Our economy is geared high wartime peake of lend-lease and other shipments but they were to aid in still running at an annual rate of of shattered economies in than $14 billions in the transfer of goods from the United more a level of production to and meeting the requirements Europe, clined sharp goods services equivalent abroad. Transfers this cate¬ growing volume of ; relief ship¬ ments through UNRRA and trans¬ fers under the Army civilian sup¬ plies program. ■ - ' • depression " of the the ' • more early rapidly than the total imports of foreign countries. The wide gap that de¬ veloped between them persisted Imports Related to Domestic except that in the case the United States gained enced Generally speaking, United States purchases from foreign countries this normally to sponse vary business country. in re¬ conditions Since a in relatively Alternate current after as trends flected in ports World War I. in a and imports. a With exception of his war Anthony-Paul Grafftey- Smith has been with the Bark of England since 1923. Mr. GraJ:cey' - Smith re¬ is some re¬ erset and stud¬ ied as expands and business pros¬ reason, the higher Mr. degree of ecOnomic stability throughout the world than we ex¬ services. though "straight" ingly high level there is an in¬ v; war were characterized not only lend-lease practically ceased with creasing tendency for our people ? by normally high transfers of the conclusion .of hostilities in the to engage in foreign travel. More goods abroad—exceeding a Value Far East the outward flow of dollars come into foreign hands of $16.8 billions in 1944—but goods and services is continuing arid this in turn tends to stimu¬ these transactions were directed on a high level. With the sharp late exports. largely by governmental agencies decline in lend-lease and other American Shipping as distinguished from direction unilateral transactions other items Even and operation by private traders will assume an increasing import¬ peacetime. Strategy and mil¬ ance. During the war many for¬ itary need governed the nature eign countries accumulated sub¬ :•> and course of international trans¬ stantial dollar balances, which to¬ as in fers. Goods and services had to be made available in all parts world -according to of the over-all an plan. The building and Operation ships were integral I parts of of the program. Transactions Wartime The wartime United Large accounts of the During the interwar period'net payments by this country on in¬ shipping account also contributed to the foreign sup¬ gether with gold holdings will ply of dollars. Except for the first provide substantial means of pay-; three years immediately following ment. Yet despite the size of these World War I, when the world was assets- they can provide only a abnormally, dependent on Ameri¬ fraction of total requirements. At can shipping, payments to foreign¬ a time when most nations of the ers exceeded receipts throughout world have assumed definite ob¬ the entire interwar period. The ligations by virtue of their mem¬ data relating to the shipping ac¬ bership in international organiza¬ count for this period reflect the ternational States reflect the excep¬ tions- which are designed to of the pro¬ progressive deterioration large volume of goods mote and maintain currency sta¬ American merchant marine in the transferred. Contrary to the struc¬ bility and economic expansion, no wake of the shipping boon re¬ ture and inter-relationship'of the constructive purpose would be sulting from the first World War. American ships became engaged international transactions in time served if this country were to of peace the wartime account con- drain the outside world of its gold relatively more and more in the coastwise trade with the result tains high value - for goods and and financial resources. services transferred for which no Net liquidation of foreign gold that by 1929 only 42% of United equivalent for goods and services and dollar holdings in the six States oceangoing tonnage was received from abroad is shown in months ended June 30, 1946, engaged in foreign commerce as the balance of payments statement. amounted to $800 millions while compared; with - 61%' in 1920. De¬ The major part of these "unilat¬ government loans and ; credits, spite attempts to subsidize and tionally / eral" transactions lend-lease of consisted which entered the international merchandise which, accounts in connection with lendduring the period of straight lerid- lease sfettlement> 4 foreign surplus !# lease transfers from March 1941 property sales, and Export-Import tb'September 1945, amounted to Bank disbursements amounted to approximately $40 billions. It is $1.5 billions. • ~ otherwise assist American ship¬ ping under the Merchant Marine ized by wide fluctuations in level of economic contributed to activity. . that the overall cost i " ' ■ ,v.; .'' ; A ■' r of therefore travelled widely on behalf of the Bank. of Throughout World War II activity * and imports. Grafftey-Smith served in the The result was sharp variations armed forces. The outbreak of the close relationship in the level business in our purchases of goods and conflict in 1939 found him second services abroad. Closely related to in command of a yeomanry tank these ratic developments was the: er¬ regiment on the Continent. This of capital move¬ regiment he later commanded in reflecting the sudden shifts Lybia in 1941-42. behavior ments of American interest in foreign In : 1943 ; Grafftey-Smith was investments and the fluctuating made chief financial officer of oc¬ preferences for American securi¬ cupied enemy territories in East ties and dollar balances. Africa and in May the same year During the postwar transitional period our exports will assume to an increasing degree the, nature of shipments abroad account. For the time ever ; on private being, how¬ civilian supplies furnished by the military in occupied coun¬ tries and relief shipments made through UNRRA will remain im¬ portant. The flow of relief goods during the amounted to lion first half of 1946 approximately $1 bil¬ about 17% chandise transfers. or of total mer¬ These trans¬ fers will, of course, taper off rap-; idly toward the end of the he became of cer Chief AMGOT Financial and Offi¬ moved with the 15th Army Group in the inva¬ sion of Sicily and Southern Italy, i With the amalgamation of AM¬ GOT the and for Italy, came Allied Commission Grafftey-Smith Joint Chief Financial be¬ Offi* cer along with Col. E. H. Foley, Jr., who had been general corinsel Treasury Department of the U. S. and who is Assistant Secre¬ now tary of the Treasury. Grafftey-Smith was promoted Brigadier in January, 1945. He to holds the .decoration Com¬ of mander of the Order of the Brit¬ ish Empire arid has been awarded portion of United States trade car¬ ried in domestic vessels continued year, be limited to LfNRRA the American' Legion of Merit, to These will continue until the end Acts of 1928 decrease ceipts - Bank has ,, r t ment of the England, and A. P. Grafftey-Smith ment in many of our foreign mar¬ kets especially because of the p a r year. The present program of relief ac¬ tivities will, after the end of the and and 1936 the the ratio pro¬ of re¬ v. V. the and For eign De- This ments to P a c i f ,i ship¬ .destinations. ' estimated has in i Overseas the economic unsettle- at Grafftey- Smith been } ports of goods and services will pects begin to sag. Similarly when perienced,;after >eWorld War I. ,/*/ The global character of modern continue to exceed very substan¬ business activity is high and na-j During the interwar period our tional income is on a correspond¬ war means global effort. Our in- tially our purchases of goods and domestic econdmy was character¬ ternational transactions during the Bank the age of 20; Since 19 2 8 States to foreign countries. ■ in Fiance and Spain bef o r e joining large part of merchandise im¬ however, to expect that the con¬ ports consists of raw materials and structive steps taken towards ef¬ semifinished prpducts • the de¬ fective international collaboration mand for these goods moves up as will operate in favor of a activity was born in Som¬ I large volume of ex¬ large margin over There Director the service, Then, the requirements for rehabilitation^ were now, lief and Executive of the Fund for the U. K. < . Many of the Series) a A. P. GRAFFTEY-SMITH slight¬ a international transactions are similar to those which we experi¬ „ (Twenty-third of Asia ox ly larger rather than smaller part of- the trade. : Conditions And World Fund throughout the upswing after 1932 our business ex¬ in gory were limited to the small but tends to decline our which received from was period reconstruction for During much largely from the drop in the transfer did and Asia, and elsewhere. During the of world vigorously. thirties, United States exports de¬ resulted t country's - 210S A' expand Current Trends in International Transactions ;* V& • . , to payments continued to of the first quarter of 1947 while Hald ; Appointee] Head Loans and Credits decline. military civilian supply shipments Of Internal Auditors N includ¬ to occupied areas will continue v Arthur E. ing services of various kinds, will Loans and credits are now be¬ Since the nature and importance Hald, Auditor of Cditfor at least three riionths longer. solidated reach more than $50 billions by coming an increasingly important of shipping receipts and Edison Ccu of N. Y., was payments Post-UNRRA relief shipments on elected President of The Institute the time all final settlements are factor in the balancing of our in¬ in the balance of international ©f the lend-lease program, concluded. In accordance with the ternational mutual-aid credits have recently entered the arrangements made between the United States and the accounts. Substantial international balance sheet in foreign "lend-lease" countries our nection with the various con¬ settle¬ payments are*influenced by na¬ defense policy as well as by the volume of foreign trade tional the future of this item cannot be a much smaller countries are scale also to certain being consid¬ ered. On the import side .govern¬ ment purchases will also remain for some time a factor in our surplus property -held, gauged by past experience. More¬ abroad and disposed " of there. over, the ratio betweenv-receipts purchases of goods abroad. value of so-called reciprocal lend- Small amounts of domestic sur¬ and There are certain other govern¬ payments is exceedingly un¬ lease received by this country, v plus may also be sold abroad on certain since changes in freight mental operations, such as the cot¬ With the cessation of straight credit terms. Lines of credit, such rates and ton rehabilitation program for competitive factors may lend-lease the volume of "gift" or as the dollar "loan" of $3.75 bil¬ considerably influence this re¬ Germany and Japan, which will international accounts carried a counterpart item representing the ments on . unilateral transactions began recede. The level of these actions has been a to trans¬ general indi¬ cator of the degree to which the % government t participated in our international transactions. During lions granted to If our level of domestic produc¬ tion remains high and exports for some time provide substantial continue at approximately the "offsetting" capital items balanc¬ present level of $10 to $11 bil¬ ing the 1 corresponding value of lions, imports may rise to possibly goods purchased from the pro¬ $7 or $8 billions. Under such cir¬ ceeds. The lending capacity of the cumstances United States ship¬ Export-Import Bank has been ex¬ ping would be able to handle the tended to $3.5 billions. Up to June present volume of cargo even if 30, 1946, loans amounting to $2.7 foreign shipping were to increase - > ! Auditors for 1943-47 Victor Z. Brink, Vice President, Continental-United Industrie* Co., Inc., was elected First Vice-Presi¬ dent; Harris R* Symes, yThe De-4 Edison Company, Second Vice-President; and David B. Mathias, Bankers Trust Company, troit ex¬ treasurer. J. K. Laurentz, of The imports. Credit lend- Brooklyn Union Gas Co., has been lease shipments are rapidly com¬ appointed Secretary. The an¬ ing to an end, and foreign surplus nouncement issued by the Insti¬ property disposal programs are ports and nearing completion. The govern¬ ment's foreign credits program will make possible the financing transactions in goods and services of a substantial part of future whereas by the second quarter of shipments. These facilities will be 1946 this interest in international indirectly augmented by our con¬ transfers had fallen to about 35% billions have been authorized with tribution of $2.75 billions to the its proportion of our foreign trade ©f the total. / International Monetary Fund and $727 millions actually disbursed. carried. Other important changes in the by our share of $635 millions in Because of these shifts long-term The forces determining the United States balance : of intercash and $2.54 billions in guaran¬ capital transactions during the course of United States exports national payments during the first half of 1946tees to the International Bank for have resulted in have usually been more varied transitional period relate to the Reconstruction and Development. a net outflow of capital for financ¬ and complex than those respon¬ •capital side of the account.. Since ing foreign requirements which sible for the behavior of imports. In contrast with the currency the goods and services transferred amounted to In general, changes in the dollar disorders and economic $1,502 billions as instability to foreign countries are seldom of compared with $1,210 billions for volume exports have been which provided an uncertain basis of the same value as those pur¬ the entire year 1945. for closely related to variations in foreign trade financing after chased from abroad the settle¬ Some of these basic changes in basic economic conditions in the World War I the government's ments i arising out of day-to-day this country's balance of inter¬ principal foreign markets. But program of participation ; in the transactions may involve the use national payments began to de¬ here again there may develop revival of international economic of credits and loans. Even in the velop when Japan surrendered in shifts in emphasis as happened revival during the period immedi¬ rare case of an annual balance August, 1945. Even though goods even prior to World War II. After ately ahead should permit the de¬ and services- supplied- to. foreign exports to Europe had reached velopment of international trade between outgoing 'and* incoming countries remained high there was a peak in 1925 they dropped to and investment on private account trade and service transactions nevertheless a sharp decline from lower levels whereas shipments to on p. sound ■ and self-sustaining short-term and long-term capital the high wartime total. This de¬ most other countries continued to basis. b 'v | the first half of 1945 government participation involved 74% - of Internal at their annual meeting held Oct. 7 at the Hotel Roosevelt, N. Yn influence the total volume of Britain, extended lationship. in the interest of world recovery and world trade expansion, will of tute added: ' „ ■ The annual meeting was a part of The Institute of Internal Audi¬ tors'. Fifth / Annual Conference Which began with a reception at the Roosevelt, lasted Oct. on 6 and through Oct. 8. Sessions of the Conference executives in were attended by industrial, banking, insurance, public utility, arid ac¬ counting fields. Of special interest to them livered the an and are at a series of papers de¬ the Oct. 8 sessions on organization and operation of internal its auditing deparment coordination with public accountants. Mr. Hald succeeds as President of The Institute, Curtis T. Atkinson, Consultant Inc. of Chief Accounting Fbasco Services, - ' .■•'.'/■ ' . ■ .• • • • ; : ... THE COMMERCIAL & FINANCIAL CHRONICLE 2106 Industrgpil The high sched¬ speedy end. 1 ' " • , ; The measures that -need to *be taken should be taken, and they can be taken without compromis¬ into action. 1933, in what thought to be a bold attempt to put' such an idea In the spring of was to produce recovery, an appro¬ priation of $3 300,000,000 was made for pubi c works cs part of the National Recovery Act of 1933. By the fall of public works could not merely by appropriat¬ that ent 1933, it became appar¬ started be ing money. Public works require long and detailed planning, legal investigation, site acquisition and, in tion enabling legisla¬ and local govern- cases, many State by A'A'm ^'."V/ / '• "•'''"SK?"' 'ments. ■ Public Works Not Antidote to Depression The idea of lic works using standard pub¬ way of supporting a as purchasing power in time of de¬ pression had failed. The record of Federal public works as a means of overcoming a depression was a disappointing because we had one, been partly led to ex¬ pect too much, and partly because during the years preceding the depression the necessary prepara¬ tory work had not been done. Our disappointment should not cause us to reject the use of public works as one of the means of sup- sporting the level of private busi¬ ness, but it should make us re¬ vise our expectations and improve the idle time too. prices is forced higher still by the uncertainty of how: long the periods of idleness will be. A retailer knows that spring and ule of winter come therefore he costs. and year, every can figure his annual In construction, who knows how long a boom may last or when it may come again? Illegal Restrictive Measures The restrictive measures in the industry are in many cases in¬ genious, in some cases illegal; in all cases for the purposes of price maintenance and the of control competition. In. spite of exten¬ uating circumstances, it is un¬ wholesome in the national interest to go along indefinitely with an industry which for its own sur¬ vival has to have- of the element a considerable outlaw in it. • As long as illegal practices are con¬ doned on the front of restrictive collusive rules, they will be excused wherever they can be ex¬ and make or to, fortify a position. Toleration of illegal practices leads to a special kind of cooperation between gov¬ ernment, labor and business—the cost of which is paid for by the consumer-citizen, both in high ploited to power , we and: act can to should organize and bring this war to a 'set as ari .'offthe free play of economic elsewhere in the, business to forces system^ . These menare : tistical units which erly moved from can one not'1 sta-• be prop¬ column of Today, with Let me refresh your memory with a few quotations. "To meet our obliga¬ tion, we will need the same drive and ingenuity that made possible the spirit the of that report. miracle of war production." be raised."-'Pri¬ vate enterprise must assume; the "Our sights must leading role in this task as it did in the task of war production," "On the assumption that the rec¬ ommended legislation is author¬ ized promptly the program should move into high gear by the end of the first quarter of 1946." "It will dynamic program to achieve this goal." "Neither business-asusual, labor-as-usual, buildingas-usual, n o r ■' Government-asusual will suffice." ; take a we see some signs cf in housing but the gen¬ eral picture as of October, 1946, is profoundly disappointing. The Today progress t so produc¬ What the we level of employment in industry should construction set.as full-time longrtime program? tion has been made take as a Stabilizer normal rough standard the age rebuilding of our plant once a generation, in 30, years. . for a The sugges¬ that we might - aver¬ physical say once This suggestion has the appeal of picturing each new generation ;vturning over, to :lhe next generation new, : modern structures instead of old, out¬ . moded .- schools houses, and fac- The precise level, around which f.should idirect our efforts to¬ to its of •own the policy itself. Decision as to level, whether in terms of dollars of men employed, is a matter of public policy. It will be decided after considering such questions or hs how much of ^our product wd wish to put into brick and mortar, what the requirements of the peo¬ reduce tiees for industy which is the construction notorious". All these sibilities io the veterans in hous- drop the pretense living in a peacetime economy* 'As far as the unhoused fng until that wo are we that the; industry requires certain immunities under the \ Sherman Act and State anti-trust, laws; it should be subjected to correspond¬ should be continued, even under stabilized production,! these high practices should be sanctioned by law and supervised by .an appro¬ priate regulatory body; ' " • The construction industry sta¬ . bilized tures by public works expendi¬ and regulated by a'.govern¬ ment agency would be a different industry from what it is today. It would still be competitive, just as the radio Or the banks lines or the air¬ competitive;'it is pos¬ sible that the industry would be even more competitive than it is today." The dominant factors in are industry would turn to inner¬ economies as their of bidding for a larger secion of the construction pie, and since under these circumstances ia way pie is assured, who. will complain if the quality is "im¬ proved? ' t larger . . An for . industry that is -lookedf to , least at 8% of the national product is certainly a matter of national when concern, particularly things the stabilize in the nature of not able to without resorting industry is itself to inef¬ ficient, restrictive practices which increase costs, postpone .innova¬ tions, and introduce elements of lawlessness into the industry. The industry vis source of of indispensable v as a essential public works, housing and transportation, and as an outlet for the investment of the people's savings;.it will be .the recipient of billions of dollars of planned public expenditures over the "years.v; It is certainly discuss¬ able that the industry should have the opportunity under the law to reorganize for the most efficient service to the community as a pri¬ vate, competitive construction in¬ dustry.' It may well be that the. 1940's will be the decade of the construc¬ tion industry^ the period when it out of unregulated anarchy an orderly pattern of-effec¬ tive competition. Just as the rail¬ roads in the 1880's, the banks in the 1900's, and the Security Ex¬ changes in the 1930's were reor¬ ganized and regulated in the pub¬ lic interest, so the pattern of the construction industry may be re^drawn in the years immediately ahead—a pattern that will give stability and order to the industry, efficiency and lowered-cost con¬ struction to tile public, and sound public works programing: to the Federal Government. A grew into Improvement in Construction Technique !\c v ! Finally, our long-term objective is to bring into the construction industry the fruits of technical be attained. The magnitude of and managerial V knowledge, ; to any construction stabilization pro¬ raise the industry to its appropri¬ gram over a period of 20 years would make possible dramatic ate place in terms of productivity changes in our national physical and efficiency. We cannot expect plant; Unless there is some com¬ even a distant approach to this prehensive concept of what is at¬ long-term objective until we have tainable, there will be* great waste made good progress on ouh interr through the undertaking of thou¬ mediate objective, \: the achieve¬ sands of unrelated, efficient de¬ ment of reasonable stability. tails. This is not a justification A Benefits of Stabilization ■; for a formalized, unified, and im¬ Stabilization of the construction posed national public works straight-jacket into which the fu¬ industry can be confidently ex¬ ture public construction of the pected to yield important benefits. country will be tied. It is simply First of all, stabdity of employ r ■ . , that the whole is ment should eliminate the uncer¬ that many a poor cake has been'made from worthy ingredients. tainties and' fe*r<3 w^i^h make the an observation greater than its parts, Wants Congressional , It is not necessary to recite In specific detail the restrictive prac- following which the System' was cs-! be found Reserve tablished.' If it*' should vations: and our First of all, it taught us appropriate place in terms things. productivity and efficiency, to that the scale on which'public costs and prices, increase works must be pressed in order to annual earnings of workers, and do any substantial good in a pe¬ give a regular and reasonable riod of unemployment is vastly would pay for the time when there was little or nothing to do. margin of profit for successful en¬ greater than we had been led to terprise. When this has been done, believe. Indeed, it is so vast fhat This kind of pricing, though the time will have come to re¬ the use of public works as a means necessary for survival, presents build most of our country. Today of. stabilizing the whole economy some difficulties. In the first we cannot afford to use and to through the phases of the business place, it takes the cost of idle time The enjoy the physical /plant and cycle must be abandoned. and adds it to the cost of active structures which we well know most we should expect—and this time so that the active time car¬ is no small gain—is that we may how to design and build. ried a heavy total expense. In Let me discuss these three ob¬ be able with public works and the second place, no such price conservation to stabilize the con¬ jectives separately. .V schedule can be maintained un¬ struction industry itself, so that less outsiders are kept from com¬ Short-Term Housing Objective it would have a more even level ing into the industry, and unless First, the short-term objective, of activity throughout the year insiders understand more or less' speedily to house the veterans and over the years. specifically what the rules of the and to relieve In addition to magnitude and the distressing game are and it is made "con¬ pressure for housing generally. administrative difficulties, there venient" to follow them. We cannot discharge our respon- is another reason for abandoning* in its Commission the * way—to establish and to hold a price structure high enough so that the days and hours of activity that ward., reasonable stabilization of the industry is less important in some ways than the acceptance of • companies, re¬ same we . mortgage would that reorganization. Such investigation should be of the dignity and competence as of the National Monetary an ing regulation. If some of the re¬ strictive practices of tha industry Public Works As . and sult in in its peacetime conditions prevail. I have just re-read the report of Feb. 7, 1946, to the President from the Housing Expediter. We need to recall the language and • all found, it necessary—each recommendations Federal an ple for physical plant may be, high level of tive of ships and planes and tanks; how rapidly we wish to restore employment and with our acute has not yet shown its ability to the national domain, and the pres¬ bulk of construction over a period housing shortage, the construction deliver the goods as far as hous¬ ent and prospective efficiency of of time arises from private de- industry is very much in the pub¬ ing is concerned. To be sure, the industry. mand, and that the greater the lic eye. Many programs and many there is far more housing, started A second lesson which has been proportion of private demand, the reforms are being put forward and completed this year, than the learned as a result of the experi¬ healthier the industry will be. and the voices of those who .speak professional forecasters predicted ence of the 1930's is that the pub¬ Optional public works should be are heard against an increasingly in late 1945. So we have accom¬ lic will not tolerate expenditure1 looked to only as a balancing fac¬ audible background of discontent plished something, but it is not The record is not good. by the government*which it be¬ tor, not as the main source of de¬ and despair. .No longer is it pos¬ enough. lieves to be wasteful. Leaf-raking sible to analyze and discuss the mand for construction." "v * Most of the blame for the re¬ and boondoggling are condemned The construction industy is obsolete structure and practices of tarded performance is properly by public opinion and even the the construction industry in the placed on the 79th Congress for greatly involved in public works inefficiency which results from obstructive delays in passing expenditures, no matter what our quiet of critical detachment. the employment,,.,of the incom¬ In connection with the housing legislation that was indispensable policy on public works may be, and the all-important and which every thoughtful ob¬ petent unemployed, or from the and the construction industry is a problem failure to use known labor-saving construction industry, there has server knew; had to be passed costly and a wasteful industry. The been much confusion and needless sooner or later, ; Meanwhile, the equipment is frowned upon. ;;:"t , The reasons are not hard to controversy because we have not precious spring months slipped by. public rejects the sophisticated ra¬ find. Every phase of the industry tionalization that some purchasing distinguished among several ob¬ The excuse that lobbies and spe¬ is subject to the feasts and famines power is better than none at all. jectives, each one of which is good. cial interests were "too powerful" of seasonal and cyclical demand. The argument that public boon¬ As I see it, we must keep before is no excuse. The plain fact is The circumstances, which cause doggling is neither better; nor us simultaneously three objectives that the 79th Congress was too one family tq decide to build a worse than private boondoggling —A, B and C; A, a long-term ob¬ weak to perform its legislative house, cause /thousands to decide is to no avail. jective; B, an intermediate objec¬ function efficiently "under the the same way at the same time. The insight of the people in this The circumstances which result tive; and C, a short-term objec¬ ordinary pressure of a representa¬ tive. They must begin at the same tive, democratic government. Let respect is sound. It is obvious that in a profitable outlook for the time, which is now even though us hope that the provisions of the wasteful effort at public expense building of a factory by one com¬ is done at a social cost. HThe jus¬ there ..terminal points are long, in¬ LaFollette-Monroney Act, the pany will simultaneously affect tification that had the labor been termediate and short in time. Legislative Reorganization Act of thousands of companies. On the The short-term objective is 1946 passed at the close of last unemployed, nothing at all would other hand, when families and be produced in unconvincing. Even businesses cannot or do not wish speedily to house the veterans, session, providing for first steps and to relieve the distressing in Congressional reorganization, though the waste be less, it is still to build, broad, general,, causative undesirable. that ; people ■ have for will not be by-passed or emascu¬ factors are at work which create pressure some place to live. The interme¬ lated by the 80th Congress. : > :: There is another reason why the depression for the construction indiate objective is to create reason¬ So much for the short-term ob¬ purpose, scope, and scale of pub¬ dustry. -•../; -.A'.: A ' ■'AAA/A able stability in the construction jective. lic works programing should be A Seasonal Industry ; ' under public discussion. It is de¬ The private construction indus¬ industry through advance plan¬ Intermediate Objective—Stability sirable that the public should ap¬ ning of public works and conser¬ try has tried to adapt its practices vation projects, and through the Our intermediate objective is to preciate the magnitude of the pro¬ ,so that the several elements of skillful timing of optional projects. create reasonable stability in the gram, and should approve the pol¬ the industry could survive under The long-term objective is to construction industry, throughout icy well in advance of the time these adverse conditions. Archi¬ when detailed operations will bring into the industry the fruits the year and over the years. tects, building contractors, build¬ The of technical and managerial experience of the 1930's have to begin. Only in this way ing supply companies, labor, fi¬ knowledge, to raise the industry with public workfe taught us many can true economy of expenditure nance planning and scheduling. We must never forgehthat the our companied by a Congressional inyestigahob- of. the] ladusty with accounting sheet to another in order to preserve a balanced level of employment.,; Nor can they be shifted long distances from their ing in any way our desire and ex¬ homes to places and at times con¬ pectations for the abandonment of venient to the business cycle. wartime measures as soon as prices and in the corruption of his government. • arsenal of democracy, , into forcing them out again veteran is concerned, the war is still going on; His war is our;, war; and men ^^ebnstFuctioh :>;in :}u,stryA mnd practices spring from a common When tne oreaituown came in need, to make sure that the scale of prices obtained when there is 1929, nothing of a practical nature had been done to make it possible work to do is sufficient to pay for (Continued from page 2082) \:{ ' 4 Thursday, October 24,1946 hundreds of thousands of Needed: Reform of Construction vv"',k-■ .'/•< ■' ' .'V---v-.'-r■■ ' * . and Investigation industry irresponsible, always fighting for its life. Second, con¬ struction costs should fall sharply and the earnings of workeYs: and know, it is my opinion the profits of contractors. should Third the total public that a program for stabilizing the increase. a general cure-all for the business could be cycle., This, other reason, is. the construction industry through the construction program ac¬ well planner1 '. ^".rf-^nly a stahuman undesirabilitv bringing use of public worK* the idea of using public works as As you Volume 164 Number 4536 THE COMMERCIAL & FINANCIAL CHRONICLE 2107. bilized industry would produce vastly these good products at as well,Reasonable a greater quantity of con¬ output and,-over a pe¬ time,-would change in a fundamental way the structural, lower costs duplication and waste in capi¬ tal expenditures, services, and facilities, for which the public pays in its rates or taxes, or stability of industry at high levels of ac¬ tivity. would be a bulwark of na¬ tional prosperity and a great tool American environment. Obsolete of fiscal policy. ! d \ buildings could not stand before ,1 But the setting is really broader the match v of; an efficient con¬ still. Prosperity in the United struction industry. ■ ' y' v States is the first requirement far struction riod the of , V~ . 'In dosing, let us see the con¬ a prosperous industry in broad per¬ Fortunately, in serving well our spective. The industry is inti¬ own interests, we serve at the mately associated with the every¬ same-time the interests of all peo¬ day life of every one of us.~. It ples who look to us both as a gives us our homes, our factories, market and as a source of goods and' services. and our places of business.(It pro¬ /.yy ■■ ■ •• streets, our ways; our and harbors, our high¬ waterways, our our bridges, and our tunnels. It protects the national, domain against irreparable loss. Reason¬ regulation have been benefit all elements of the indus¬ ies to world only be made if able to use our terms of and peace of to degree that ignores public responsibility and; welfare of country." ,No major economic issue con¬ fronting the people of the United Spates today can be intelligently a not the Would topple like house a cards. i - ^. "The Key servicedaffect •the daily lives of all people, in¬ fluence the destiny of every enj terprise. I speak l of ; national A most serious complication^ and one which may well dis- va. rupt tems !* est sense when I emphasize that it is, in fact, the key to efficient distribution. I am convinced that if we do not soon " consummate that will riers d. ownership, there may be no private industry left for which to upon' regulation of trans¬ fostering tended away care of stage the practical |? outright * • 5' ,;V ; " owner¬ : of f state d socialism definite program are The groundwork and authorities which regulate the price of transportatation. When y,'yy- '."J!Mjjj| V , tation j in labor relations Act'of were Transpor- 1920 by passage of the Railway bor Act of 1926, :C loss of revenue in the rates which he must pay, or, pri¬ vate V investors .' must absorb the declining net income. This is not or a true of the manu¬ the major part of his gross rev¬ enues from the sale of his com¬ modities and performs focal for his vate has and up (Continued from ( his economic position of Individually and shoulder ownership. a publicity-grabbing; outfit. box score in, the primaries the as Dunn to sults. accomplish the They same re¬ that the differ- say is that under the bonus plan ence all the employees will participate in the fruits of the increased pro¬ The Survey in Greenwich, Connecticut, shows that his CIO- | we are a great people for saving. face through word usage. our When menace asked whether the he late thought would ever have Fascism in the United States, he said, "Prob¬ :we they ably, but they will probably call, it Anti-Fascism." be. The real menace is in their gift for publicity and confu¬ sion of the public mind. y Reduced Productivity someone Long may Sees 2074) duction, whereas in the incentive achievement1 plan there is an effort to measure conducted by ! each individual worker. Of course, their on page followers 'tend So I say that lem is to create - the part of 'factors r; quirements. terial which material among matter major prob¬ our an understanding citizenry of the our contribute wellbeing, them of I to and would our first rate this indivdual productivity. wellbeing, and I mean es¬ Until we deal with it, and deal sentially the attribute of high.' with it A Sound Approach constructively, thee the productivity—high individual outj( current so-called boom will re10 years the Association put per worker. It is the-tendency main largely A For which work no iated, accepting bonus plans which ever only as an incident to his marketing and n distributing re¬ T can collectively, they must the responsibility for the adoption of national policies under which this industry can survive in pri¬ counted, he may find that his in¬ fluence has been enormously ex¬ aggerated. Even his followers, in the PAC of the CIO are chiefly . count grave transportation. on ac¬ I on - t represent has been- at this problem. We have the La- March of this illusionary and will toward reduced productivity which have to. be measured in inflation- is at the core of problem durin this postwar our ary terms rather than in terms of year, and such - now an under way. ual processes, into chines that transportation systems, each being permitted to use any type of fa¬ the . - - . . , in — unit, of .domestic buying Private ownership and sphere greatest usefulness. ■ of ■ . -. r . is ir a -- be dependent abandoned; people upon are . ■ ' • • • .. i.'..rElf I - t i I' nessman,: the so go-between was employer, is only that he is an a intef- mediary who brings the worker into touch with raw materials and . tools and brings the product , the worker into contact with the not a trivial detail in our nation's i customer who meets all elements, material wellbeing. ! of , • , . ' • business costs, including ■ I somewhat amused was a few months ago when a delegation of CIO the unions visted our one- time ally, the Soviet Union, and came back with elaborate an li^kpr costs, tiie cost Union. the cost of taxes, the materials and services others, the cost of depreciation, or the wearing out of the tools, and the growing old- eco- fashioned of the machines, and also COfit of capital that is, the return to the owners for the This delegation discussed, with great sympathy, the incentive system in the Soviet Union and of of J nought, ftom nomic report of life in the Soviet of VSe savings. So when rather inclined to praise one of the forward looking was greases are added to the cost it as s'leet. they must in turn be passed steps in the Socialist Republic of ,alo»g to the customer. .It is the Soviet Russia. Yet this same union j customer who is asked to assume group thinks that the incentive system in the United States is improper stand and squarely in opposition, to f the incentive system. •I ^Q hrpair in thnt linp CIO union there, the United Auto Workers, somewhat on their face by backing down opposition to They are saving is their incentive plans. saying that they still they are in one other that ' 1 < cases \ I 3 burdens, not the -f ' are .- 1 only the go- You might say that these facts elementary that they don't heed to,be stated, but a group of being nego' Polltical. Personalities dominated the front pages last autumn after VJ-Day by preaching the reverse doctrine. They were telhng you and me and 140 million other Americans that it would not only be possible but, in the nature of things, feasible to increase costs, including wages costs, without in¬ creasing selling prices to the cus- but instance, and two •>. is | are so I was in Toledo the other day and I found indications that there The additional uie businessman who inhumane, and they > between. won't accept incentive plans, it. I Third: That regulated transporvast tation be excluded from anti-trust ». Consequently, there * cannot its economic work men output, , . the.largest misunderstanding , no with which overall . ; work. _ most ' men period, steadily rising and at a sharper and higher JBI rate than prevailed in competitive countries; throughout the world., So, this matter of productivity is competitive - control;over recent reorganized, by orderly and grad¬ ' s with which Up to this; that any gains exacted in collec¬ matter how tive bargaining are at the expense The Association offers the fol¬ much the human factor may have of the employer. And business¬ lowing recommendations, which it been petted, we offset the effect men have fallen for that sophistry is prepared to sustain when called of this on and have productivity through contributed to the mis¬ upon by Congress to do so: perpetual improvement in the understanding by not making it .First:- That common carriers be quality and quantity of, the ma¬ clear to the public that the busi¬ investigation is has . single , Henry Wallace ;; I say that the major problem before us is proper appreciation, of what is responsible: for our ma¬ own attack upon . pbweri If stands transpor¬ services - limited -?* Ickes?" great power and the . .vpolicy that, has!;since beets" efficient services at the lowest IvfeS extended to all other basic cost to meet the respective public : transportation: The strike of the ; .industries during emergency needs/;;';vV" AsBrotherhood of Railway Train¬ ,periods.• We advocate the principle of men! only six months ago, forgot¬ 2. Government, as a policy, now competitive "department stores" ten already by' most business : promotes direct competition be- in transportation, each selling leaders, is a glaring example of f tween its capital* which need every type of service—thus sup¬ taking the enterprise principle ,too ] earn no. return,; and porting the security of the overall private much for granted. This strike was capital, which must earn a re- private investment by earnings a "trial balloon":—a test case. And | derived from all forms of facili¬ K turn. 1 ! •" President Whitney of the union,' a I There is now about $40 billions ties. ••v:V'v.. staunch advocate of government f of -government capital invested ; Under present national policy ownership, was able to throttle in transportation; six times aa the transportation dollar, paid by the economy of the country in C much as in 1920. the public, is divided 48 hours.*,.' A; •; !V • • among hun¬ -; n > ■' \"-ti r Moreover, federal funds are be¬ dreds of unrelated enterprises, Government ownership of trans¬ ing used to promote various eaeh trying "to sustain itself, sep¬ port in the United States would ; branches of transportation by arately, in private ownership— open the door for the socialization over 50 federal with not agencies, unre¬ enough traffic to go of our entire economy, including lated as to policies and prac¬ around in peacetime. agencies of distribution and mar¬ tices. To none of these is dele¬ Second: That every appropriate keting. ' v ' ' gated^ responsibility for the inducement be offered for facili¬ economic position of the com¬ Freight rates, which enter many tating voluntary consolidations of times into the distributing mech¬ mon carrier industry as railroads and other forms of whole. anism, would be subjected to po¬ / transport. Over 78,000 miles, or litical dictation. 3. The several forms of nearly one-third of the Class I transport Ten million voters (employes are either greatly restricted or railroad mileage, is now depend¬ and their families) would be add¬ prohibited from owning or ent on less than 6% of the total op ed to the federal payroll. erating all types of transporta¬ ton-miles. Much of this mileage Bureaucracy would have un¬ tion facilities each .been laid for the primaries this year. And we build them up when we talk about their producer who derives set a precedent in national cility that, will provide ;, , enterprise. trUnsportatioh, ; are removed from the ; their attempt to discredit and un¬ dermine 4he principle of private :• * controlled by federal procedures. that have no relatlonship whatever to the statutes - ' - a car¬ solely agriculture, longer ignore the implications of PAC has failed to get out the vote level pi and to deliver the goods in the cuted carrier pur¬ The Pattern for Nationalization following common revenues of finance .. ship. M Leaders his leaders ■ increasingly of management. -Unless trends are reversed, the next step, will be the for : ■■ emphasize me . poses, government has reached the present its the industry,; and will into 1 : Whatfs Ahead; lor the II. S.? either by by government or that unnecessary go * „ from regulation and towards full control." For all now being proseby the Department of Justiee. Iff anti-trust prohi- to * conclusion, let a business * : > portation—obviously justified in the public interest. But, for 60 has are shipper of commerce, national defense, of In regula¬ as major :, ■,,, ' car¬ such system of in which each, derived bitians prevail over regular devoted a long period to research ing reconversion improved material wellbeing, heinto the physical financial, and period. tory statutes, long-establishIn some quarters it has cause, my friends, costs are rising ed competitive regulatory.aspeets, of the industry. become unfashionable in the last, relationships everywhere. Our costs are rising between shippers and con- Two years ago. we advocated that few years to be productive. Vast not only because of monetary and sumers,; producing areas and Congress lose no time in creating pressure groups have been organ- fiscal factors which are operating the machinery to conduct an im¬ ized to restrain ♦; agencies of transport will be productivity, to in that direction, but they are risdisrupted. Chaos in distribu¬ partial and thorough reappraisal put quotas not only on the exer- ing concurrently because of other of national transportation policy. tion of human energy, which may adjustments. tion would be inevitable. House Resolution 318, providing be to some extent jusifiable, but !• b. Wages, the largest for such a survey, was adopted by also to •;/Public Pays put quotas on the output item:* of cost in commonthe House of Representatives in of the iron slaves*: the machines There is the > this - increasingly . socialistic government will make own rules! * -.''K "A;- ;i In 1887, the United States em¬ state r to provide of revenues L" A its years attempt to apply regulation f vate distribution. this country, is the or are the sys¬ common carriers with one hand and anti-trust controls 1with the other. Common car- industry in pri¬ efficient of it the can¬ shipper who is wholely de¬ pendent upon this form of trans¬ portation must make up for the tation distributive AiAto the preserve the be transportation from the transportation of persons and property. Every ton of traffic which it loses means either that facturer . make : large Its services be continued derives regulation. ; should a industries., ;, ■; objective of national poli¬ tion reorgan¬ business, up. bulwark loss, in transportation policy in its broad¬ common-carrier subjbct- Two examples will suffice:. * Ttahspdrtatiori now to cies common standard and character of of common carriers pre¬ ^bes bankrupt, it bloodstream conflicting federal-stat¬ utes 4 and' opposing policies of . Industry If it just fold rier „ & Transportation is ed ordinary Furthermore, the . f^Specifically: The econom¬ thus of in agencies lowest possible basis of individual rates, will leave a net return sufficient to attract private capital on terms no less favorable than those enjoyed by other and eliminate all' prefer¬ and discriminations. • ences carrier is not the kind of private enterprise as private capital , broad public interest and a lack of public understanding, or will¬ ingness to face this most crucial of aR domestic issues. riers, It is ownership. Government Ownership Through , reorganizing the and must of activities result from the single, in¬ common the 2086) page considered except in the ,light of, Public Default • In my candid y'; tins background.. ^ ' opinion, present £; The present-day transportation policies and principles of regula¬ problem lias been" brought 'about tion'will inevitably lead; to gov¬ by the play of all of these forces, ernment ownership of .'this in¬ with a resultant disregard of the dustry. ' barked gross promo¬ tional learned to think in we transportation, small. operation of basic industry, public services, and natural resources , provide a must competitive Fifth: That Congress define the extent to which the Federal Gov¬ ernment shall continue its for Transportation (Continued from 'i-s: traffic. war Fundamental Differences A the National is - cluding the necessity for izing its balance sheets. we unparalleled same policies cies - That regulation of all domestic common car¬ of on ruptcy, tory volume of contribution can / the verge of bank¬ twice saved by the transi¬ advantages to establish here, at home,: a high standard of pros¬ perity and democracy. ; ■ try, and will giye to the people all • types / j.. For 30 years the majority of our regulated transport agencies time that are able stability in the industry will i Fourth: riers be centralized in cumbersome and slow. We must succeed at-home if we are to succeed abroad. * Our great freedom , sferted tory authority. bankruptcies. own account. And, if private own¬ ership is to prevail, national poli¬ the supervision of the regula¬ Obviously, the common-carrier dependent, federal agency respon¬ industry is over-regulated. The sible only to the Congress. and peaceful world. administration of struction vides to which must be absorbed by the private investor in recurrent ?, ,. laws when the methods* costs, and proposals of camera are subject a Z, . ' (Continued * ' * ■ on page 2108), of products^of their year's labor, i pletely abolish him, they looked (Continued from page 2107) i ■ These elemental' truths were upon him with disdain. i lomers. They were right in saying On the way ; up, the foundation stones of our na¬ my friend, that it was theoretically possible tional economic greatness.: In Marriner Eccles, Chairman of the to offset higher money wage rates because the annals of American place of such medicine which has Governing Board of the Federal Reserve System; advocated infla¬ business are replete with evidence proven itself, it has been profit¬ able and popular in recent months tion as a means of ending the de¬ that that is what we have done and years to offer patent medi¬ pression in the mid-30s. How¬ through the years, through the cines, quack therapeutics. For ex¬ ever, he has been disturbed in decades, but we achieved that mir¬ the last three or four years be¬ acle in former years by adding ample, instead of striving for a balanced national economy with cause his advice has been, taken to the productivity of the wrnrker some sort of equality of exchange so wholeheartedly. He was get¬ and the tools. • The reason that it between agricultural and indus¬ ting uneasy and wanted to reverse didn't work out this time was that trial groups, the Senator from himself. He didn't share this en¬ at the very time when we were Montana offered an easier * way thusiasm of Senator Murray of marking up jponey* wages, we out. The problem of balance re¬ Montana that you could make a were simultaneously putting re¬ careful calculations and bull market perpetual, so early in straints and quotas on output so quires minute study, but he offered an the year he tried to calm down that we did not use the higher easier formula. Senator Murray the bulls in Wall Street by rais¬ money wages to increase output introduced a full employment bill ing margins on listed stocks to per worker per hour and thus off¬ so that we would always be at a 100%. That was supposed to set the rise in the unit cost of the. top, always at the crest of calm down, the. rise; but it didn't production. _r non-stop boom. He would always wprk ' that i way. in view* of the Prior to June 30th last when haVe a one-way street in securi¬ swollen money count. At the time the OPA act expired, in authoriz¬ the break came and when cour¬ ties, in business, and in life. ing more than 200 increases in Of course, the Congress modi¬ ageous traders might have step¬ price ceilings, the OPA itself was fied the bill; and in passing it, it ped in and bought on the way publicly certifying to the error of didn't achieve that perfection that down, they found, under these the doctrine which its leader had the Senator had in mind, so that new margin rules, that they been / circulating the previous we did have a slight slip-up in the needed not only courage but a autumn. Since then, after our stock market last month. And, considerable amount'of cash. So holiday of price fixing during the of course, Representative Sabath the effect of the rule was to make summer and the resumption of of Illinois was outraged after he the market thinner and exagger¬ controls, the OPA has been mark¬ had been led to expect the milate the movements up and down. Though part opposed to the return of the OPA, the OPA has rendered an were and indirect to business the away from price increases. These increased ceiling prices onus , . backhanded service in taking some of / have been made under Federal auspices and with political bless¬ ings, but I wouldn't count too much on that alleviating factor. In the long run, the customer,who determines. your success, is to going be more interested in technicalities and in American indus¬ try has been based on a different type of performance. Your suc¬ results your cess v than success has been based on your gen¬ perpetually fighting costs achieving the miracle of pay¬ in ius and ing higher wages to workers in and better things the form of more in exchange for a week's work, ; , at work, the effect of the rising in business and in the se¬ curves markets would incumbents to stay in. curity help the Each of was us, Byt what Market Break we had . under the American for the future//If each made our they Why takes, In old- washed out of the facts? bit unknowable. system, was entitled to make, our own mistakes in estimating' the probabilities Reasons for a would own have mis¬ been on and ways maiming and killing the with the obligation to> the economic process so eaves, us clarify that their freedom intel- men use igently. As had a temporary con¬ ception of what was essential and non-essential. ; As part of that war effort we deliberately tried o attract workers from civilian rades into critical war industries. free people we are entitled to be foolish; we are en¬ titled to be fallacious. We are Of If enemy, we it was necessary to part of the war effort. Whether it was wise to do it the a technically entitled to be but as people a price for our errors we and blunders. can as to Support Truth charge of the War Man¬ effort. I told him that the In presenting the truth, the ob¬ department stores and banks jective truth, not anybody's gild¬ around the Los Angeles area found ing of the lily, because the times-. great difficulty in getting clerical are too serious for that, you busi¬ help with which to carry on be¬ nessmen come into the picture. It t cause of the very much higher wage is up to the businessmen to re—//; rates offered in the war indus¬ establish their prestige before thetries. Paul McNutt said, "That is public—and there shouldn't bo ■ < wonderful. That is just what we any fudging of the truth. When want." I don't think that was a men of in was power , know management far-seeing very even • because, truth, based view in wartime situation, in or¬ get the wartime production, have to service the war work¬ in the banks and, to some de¬ der to you ers it express without the- scientific research,, on they should have the simply fear to- courage and forcibly/ offending the lady who was; any such people as of in the stores, But let that my hostess in a border state, a member in good standing of the* C/ point slide. • It was the official policy, League for Women Voters, whothrough disparity in wage rates, might regard an exposition of: to attract men out of the civlian realities as a symptom of reac— trades and into the critical war tionaryism. industries. Therefore, when the I say, if arithmetic is reaction¬ armistice came what the country ary, then let's be reactionary. 1/ needed was a reversal of that pol¬ say that, if using words honestly icy so that there could be a return is illiberal, then let's be illiberal,. gree, flow tion of workers from the industries back • muni¬ the into Let's not be intimidated by labels,. I that somewhat facetiously „ say interdicted civlian My own serious recommendation^ trades. But this ill-considered, is that we should not only ex¬ though seemingly plausible doc¬ pound the truth forcibly, but that, trine, of maintaining wartime we should also identify the truth take-home pay was an effort to with somewhat attractive labels—- v freeze the situation and make that that is, good intelligent merchan¬ healthy readjustment more diffi¬ dising—and that we can then. temporarily and much slower. We are stigmatize Henry Wallace ancf all* paying for it in shortages in the the vendors of political blue sky stores, shortages of materials and and indicate that we are opposed* unbalanced inventories • through¬ to them because they don't knowr & out the nation. But the policy was what they are talking about. predicated on a wrong premise, The late Orlando F. Weber, aon the idea that we had too little cult great industrialist, soid once purchasing power at a time when "Nowadays a liberal is a fellovsr money in circulation was greater who is liberal with the truth."" than ever before in history, at a Let's identify in the public's mind1; time ; when bank credit was that true liberalism, which can greater than ever before, and at b® measured in more and better* things for the be average family, can; : provided best under the Amer¬ competitive system, based on. ican its record through the decades, in producing more and better goods t than can any other system in the- world. The American industrial*. system has the right to be called* progressive, liberal and forward looking. When make you that clear you destroy the fakers whov have appropriated these attractiveand seductive labels. The time is; now ripe for clarification, for the- first time in than more a dozen for the housewives of the* nation and the workers and others; years, are beginning to They and in are more a ask mood scientific, . ; wrong,, terrible /, we pay a bring clarity; to the people so that they will use their / freedom on the basis of precise in looking to ' way we did is beside the point. knowledge, then, We did it deliberately and with this period ahead, we can do so ! with our eyes open. greater enthusiasm •:/ and > 5. f During the ..war, when I/re¬ greater confidence.;;/• turned from Southern California, Business Should Have Courage <; called on Paul McNutt, when he course, do that time, giving to in the process. But did the market break? the customer more and better under this new concept of central¬ fashioned days the news services goods for his money. You achieved ized economic planning in Wash¬ and newspapers, with which I that miracle in the i: American the mistakes made are a time when the liquid assets in have been associated, were naive ington, competitive system through fight¬ whoppers because they are made the hands of the citizen, in the enough to expect their financial ing costs, through elimination of writers to give immediate answers not only by the men who formu¬ form of war bonds and other sav¬ waste, through the elimination of to f such questions, but now we late the opinions, but they are ings, was unprecedentedly high. needless motions, through the degiven the sanction of government are in a more scientific period. At velopment of better processes, the behest of Representative and all of us are expected to fol¬ Economics "by Ear" through more efficient tools and low them. After V-J Day the Sabath, the Securities and Ex¬ through the increased use of me¬ statisticians and economists of the We have men in public office change Commission is undertak¬ chanical energy. That is where Federal Administration were ex¬ who take their economies by ear ing a prolonged investigation as your success lies. You may be They fore¬ rather than by eye, who know to why stock prices went down. tremely pessimistic. driven by forces beyond your It would be discourteous to the shadowed a quick depression with little_about bookkeeping and care control to reverse that trend. If They have made the read¬ commissars to discuss this subject widespread unemployment, run¬ less. you go along, you ought to go ning not less than eight million. justment more difficult. The re¬ pending a report. along reluctantly and with per¬ on the engineering But in a purely unofficial way, On the basis of this forecast, it conversion petual opposition because the ef¬ the President side is well within the know-how without government sanction, we will % be recalled, fect of rising costs will be to put The diffi¬ can look at the; charts and the recommended an extension of the of American industry. a ceiling on the improvement in records and see that stock prices unemployment benefits increasing cult readjustment has been the American living standards. the amounts and number of weeks changing of men's minds from the had been rising\for some four There must be an understand¬ over which they would be paid. thinking of a wartime economy years. Someone ought to staft an ing on the part of workers, farm¬ investigation as to \yhy tljey went However, it wasn't a good fore¬ into the thinking that is needed ers, civil servants and others that cast. It proved to be a very bad for a peacetime economy. up so fast and so far—why the we exchange goods and services "r I; ' market was devoid of the reac¬ forecast, The missing link in this whole with one another, that all of us We didn't have the depression. transition has been popular un¬ tions that it normally would have as specialized workers exchange had on the We way up that would had, instead, shortages of derstanding of the fact that one the products of our year's labor have tested each rung of the price goods and of labor. With that'bad worker is the customer of the with other specialized workers, structure on the way up. But our economic thinking came a series other worker and that if you and that the important thing is to political planners, who want to of upsetting policies which were make it tough for other workers get down the costs so that, in make us all rich and happy by needlessly disturbing to the econ¬ to buy goods through arbitrarily terms of our hours of labor, we government fiat, had determined omy, such as the belief that in the increasing costs, you are building produce more in an hour's work that the effort to ward off unemployment way to have a perpetual up trouble for the future. and have more to exchange in re¬ I was riding in a taxicab in one-way bull market was to not we should do something artificial turn for an hour's work. In order only ever-expand the money and in increasing purchasing power. New York a few days ago. It to keep the economy balanced credit count from $55 billion to The Administration, in its desire was one of the few new cabs in and thriving, it is desirable that to ward off this depression which the streets. The driver said That the major groups proceed in tem¬ upwards of $180 billion, but also wasn't coming, sponsored pres¬ he had paid close to $2,000 for the po and harmony so that they can to manipulate the gadgets with sure group demands that we en¬ cab which he could have bought trade with one another. If, which speculators worked in such large purchasing power through for $1,400 before the war. I don't through political miscalculations a way that unanimity wojjfld pre¬ marking up money wages and know whether he was entirely or through pressure group force, maintaining something equivalent accurate in the figures, but the vail on Wall Street from now on. not based on reason and underto wartime take-home pay. In trend is that way. To me it was For example, though short standing, one or more major eco¬ other words, it became the offi¬ a dramatic presentation of the nomic' groups are pushed out of selling was not entirely outlawed, cial public policy of the United fact that when the automobile balance with the others, that is the provision was made rather States to interfere with recon¬ workers in Detroit arbitrarily an undesirable trend, not only for version and to stop the healthy marked up their wage cost and the groups directly involved but subtly that you, could only sell readjustment which should follow other costs, they weren't hurting for the country as a whole, be¬ short on an up tick of the stock the transition of war economy to the owners, as assumed, but they cause prosperity rests on balanced ticker, not on the way down. The a peacetime economy. vr were hurting other workers, such income relationships among all idea was to hamstring the bear Let me spell that out in detail. as the taxicab driver who is their the producing groups, who give and make it difficult for him. Al¬ During the war, when we turned customer. employment to one another by in¬ Where does this leave us? I from making things for the use terchanging among themselves though they weren't ready to com¬ while, at the same ' lenium, so he called upon the I' say that the nefarious char¬ patriarchs of Philadelphia, who acter of this loose economic think¬ were to safeguard our personal ing by our commissars of Wash¬ riches, to investigate why the ington, Philadelphia and else¬ stock market had gone down. He where is to give the people of intimated that Wall Streets bears the United States the idea that were the culprits, 'and, if so, sug¬ they don't have to succeed any¬ gested they should be thoroughly more the hard way, that a formula punished and sent to jail. He has been found for financial, in¬ made it clear that their activities dustrial and labor success through not only disturbed the financial legislative panaceas. The effect plans of many good private citi¬ of this full employment propa¬ zens, but also that they had polit¬ ganda has been to deflect popular ical implications too. And though attention from the realities which Representative Sabath didn't spell make the economy flourish. it out, the market crash probably Let's see if I can illustrate that upset Hannigan's hope that in face in another way. After V-J Day of all the adverse political factors the future of families American concentrated means the ing up other ceilings. businessmen for , the most million 35 and S-? What's Ahead for the U. * Thursday, October 24, 1946 FINANCIAL CHRONICLE THE COMMERCIAL & 2108 questions.. % for a better intellectual9 / explanation of what makes the* wheels go around and what pro¬ vides prosperity and material! wellbeing. Take Advantage of Public /v , if J Ferment Businessmen will muff the bait they don't take advantage of - this ferment which is underway,. They should do what they can to make this a greater nation through disseminating popular understanding of the economic* They should do it fundamentals. in the ciety. interest Our contrast of our records with the at whole home, more so— in meager achievements of other nations inmaterial progress, show that the* great fountainhead of sociological? advance lies in improved indus¬ try, in the use of manpower ifa conjunction with more and better tools and quantities of me¬ under the com¬ petitive system. Competition calls upon the individual to make the basic decisions aiid it operates chanical more energy ! ' ' - iVolume 164 Number 4536 through the merit system, giving the who stockholder, foregoes his right to in return for spend intangibles, if return, at least THE COMMERCIAL & FINANCIAL CHRONICLE incentive or the hope turn. not of a re¬ the United States, through the high productivity in American in¬ dustry, to the saving of the Soviet take Union will be indeed more constructive. when its badk Was had we in sent of capital is a lot of non¬ You face a capital cost in Soviet Union or any social- the istic - state just as do you in a capitalistic society. You have costs in those foreign economies incidental to the wearing out of " tools. The chief difference is that ©n all-powerful state, a dictatorial state, decides for the people how much of the year's production shall go into production goods and how much into consumption ^oods. Then the commissars on high specify what types of goods should be •taking .-and made consumed, from the housewife away other and customers freedom of «choice. ; ;& So, in the transition from capitalistic economy to a social¬ istic economy you don't •cost of capital, <cate to the "determine and Likewise, merely allo- you dictators what what in the shall shall right to be be saved consumed. totalitarian a omy you take worker freedom the save econ¬ away from the of decision as to the type of job he will seek. £ During the last War, ' 1944, we had 6^2% only of the world's population and less than 7% of the world's land area. We produced two-fifths of all the combat munitions made that year would —you \! have friends, that record as there a thought, result . have would greater enthusiasm than this been there today for the American • my of is corrmeti- tive system which met the test of as it has met the test of war : peace. C - In spite of the mouthings of the ■./ decadent politicians who, in the middle 30's told us that industrial plants.had been fully built and that our future was largely be¬ hind us, implying that all we had to in ,h do to get met the challenge of a critical period. By 1940, when the Low Countries fell and France was de¬ feated, we took a realistic look at factories and our own tlemen, our and against fice Lend-Lease Russia? of fronts the blood the advice other that he wanted to as he himself. He intolerant of re¬ was ity to produce and shocked to learn that, war Garden he tried to isolate us As look ahead and we the issues and the not itable some which and will shake As ■ . w ment.- cited The shows record we that that were we the ahead, we see political change in ferment.>; We see the possibilities«: of competitive re¬ in effort will industry be to made that so get an costs I have out- produce the world in the other fellow's game of making of lethal It was an astonishing weapons. performance and a compelling demonstration to the whole world • and to people at home, of the superior potential productiv ity of the American competitive our system. You will recall that while the war was on, even Uncle Joe Stalin, himself, doffed his hat to the American private enterprise system and said that I had done we much to contribute to the over the Axis. \ victory • f' ' [ Comes September 1946 and begin to forget the sequence events. we of A fellow who had grown up in, Iowa and who had not shown any too great competence cither or as Secretary of Agriculture Vice-President, at least no enough to somehow position merce. or of win other renomination got Secretary into of the Com¬ Just why, I don't know I contributed what I could, at the time his nomination was before the Senate Commerce Committee to putting on the record his con¬ spicuous unfitness for the job, but he was put there anyway. He made a speech in./ New York several weeks ago and he seemed to overlook in that speech " ■ the contributions that we customer made in revive the tradition a of courtesy to before it ? is necessary. If you customer long competitively do that, you will build the con¬ tacts, the friendship and the lead¬ ership that you should strive for. As look down the we long aisle going to laboratory of progress ahead, we are find that the current of And of the doctrines which have seemed seductive. so sense of the mon The com¬ American work¬ ican competitive test of any system met the and peace better than war of these so-called orders, which are new neither social new or orderly. We when the the psychological man on the street is ready to accept this more sensible view. In your contracts with employees, with your own stockholders, and with your friends, you will find that they look to you for leadership. your own Take abroad has all or self-satisfied. sense of Apply salesmanshio and merchandising to the intellectual home. But the them to on re¬ taken this legal to power and force exporters to anything. Business men perhaps prefer to do of their free will what they fear the govern¬ ment might otherwise force them to do. They are prepared to go well out of their in way that the government should no for excuse sumption would be divided con¬ as fol¬ lows: order have intervening. Per¬ Industry— Tons Building materials industry... Chemical industry... ; Household heating order the not flow of to ex¬ ports. Perhaps they are so keen on recovering their prewar mar¬ kets that they are prepared to cut down profits minimum. V on exports to 7 Whatever \ the L , , , there reason, a is a growing feeling in the country this export drive is now grossly overdone. It should have that been a 2,050,000 1,950,000 1,550,000 1,200,000 950,000 „ , Glass and Paper Leather of the austeritv. war¬ Indeed this policy is decidedly short¬ sighted, and is apt to defeat its own end. One of main why reasons output is still inade¬ that there is very little quate is the worker beyond spend buy for his can his rations.. He futile on and goods does not worth his while to earn more. to is apt to and serv¬ consider exert Now money if it himself he could only buy the things he would really like to have, it would be all different. volume of To goods him would be a increase the available for' good investment from the point of view of raising Temporarily there would be, it is true, less available export. The trade balance figures would become less favor¬ able. But the resulting increase 110,000 ? 50,000 J.7 requirements..__.__15,260,000 ,in would be the be imported from tries, and exactly foreign Great coun¬ 6,000,000 from the United States of from 1,800,000. to tons America, 2,000,000 from from 1,200,000 to Britain, 1,440,000 tons from Germany, and from ! 720,000 to 1,200,000 tons from Poland, but it is evident that all these figures have only a theoretical value since it remains to be the* various whether seen countries been also ments mentioned will be in a Among unloaded there, have important free shipr- both from U. S. A. and from Brazil sent outside of the U. N. R. R. A.-Italian Government and the made by Import and Export BankGovernment spinners their agreements- have preferably there, and purchases paying cash they have guar¬ anteed themselves unexpected tions. against exchange any fluctua¬ However, it is exactly suck preference that has increased the demand for dollars in Italy and has worsened the position of the Italian currency and that has in¬ duced the government in Rome to stop the authority Customs Officers Italy cotton and rials without given to to admit other raw the into mate¬ requesting the For¬ eign Trade Ministry permit. Here¬ after only such Ministry will be allowed to grant such permits and, therefore, it is evident that the import requirements of the country will be dependent on the Italian foreign trade policy much more than on the actual economic situation of the country. Stock Exchange Ass'n position to supply the quantities of coal in question, commencing with Poland, with which Italy has not signed as yet any com¬ Nominates Governors mercial the Association of Stock the agreement, various and branches whether of the in¬ dustry will actually be able to de¬ velop the activity requiring such imports of fuel. To mention one in this .case ficient; to connection, it is suf¬ refer to the which is dependent the on de¬ mand arising from the building industry. In this regard the ques¬ tion must, be asked whether* build¬ ing will be resumed in Italy while the. government blockade maintains' against the the raising of lodging prices so that the capital invested in buildings does not re¬ a: The remuneration higher than for the of thing said in connection with and steel may be the iron industry, and the engi¬ neering industry, the activity of which is dependent also on the liquidation of the war damages by the Italian Government. Increase Of Artificial course, there is there are certain no have greatly 1946) and could have pects of the further there of coal; course 670,000 kg. in Jan¬ 5,237,076 kg. in August to uary doubt increased their output in Italy in the of 1946 (from As be a even years: present demand fact, with for v'f rayon textiles from Wilbur Nominated to output of owing to the tion of the supply of rials which industry short. a matter are of Nominating Committee for 1947: Sidney L. Schwartz, Sutro & San Francisco; Russell A, Ballou, Schirmer, Atherton & Co., Boston; Patrick F. Buckley, Harris, Upham & Co., Chicago; Co., Atkins, Shearson, HamCo., New York; William Haffner, Wilcox & Co., New & mill The mate¬ en¬ rather fact, for son, Co., H. of consume copper. on Levante to Rome cannot be car¬ owing to the shortage of On the I other hand, in Crary, Los E. F. Angeles; is York; Edgar Hutton & Henry? U. Harris, Harris, Upham gomery, (Genoa) report Co., of Chicago; Hammill & Allan railway ried Committee the composed of Roy E. Bard, Shear- New ' Sestri Nominating submitted which example, the electrification of the from two years to : ques¬ especially in the gineering As raw serve Gardner D. Stout, Dominick ;& Dominick, New York; William. Wymond Cabell, Branch, Cabell & Co., Richmond; Harold L. Bache, Bache & Co., New York. York. industry, instead, cannot raise the ! three years: serve fill unexpired terms: B. a larger quantity disposal. The chem¬ ical ; / Hoye, Chas. W. Scranton & Co., New Haven; Al¬ bert D. Far well, Far well, Chap¬ man & Co., Chicago; Benjamin H. Griswold, III, Alex. Brown & Sons, : Baltimore; Lyon Carter, Estabrook & Co., Boston; Harold P. Goodbody, Goodbody & Co., of soda at its ! three G. Robert W. Furthermore, there is the ;■•'!v/r/■ Nominated to should there be shortage of coals. serve Bradford, J. C. Bradford & Co., Nashville; James M. Hutton, Jr., W. E. Hutton & Co., Cincin¬ nati; i M. Donald Grant, Fahnestock & Co., New York; W. W. Cumberland, Ladenburg, Thalmann & Co., New York; Leonard D. Newborg, Hallgarten & Co., New York; Thomas F. Lennon, Delafield & Delafield, New York. overseas markets the Italian rayon output could be in¬ creased to 8,000,000 kg. monthly soda follows: as to J. C. pros¬ developments larger supply matter of a Governors to be voted on at Annual Meeting and Election Association to be held on New York. Fibres industries, artificial fibres industries, the as in of Exchange its nominations the Renominated 6 and 7% paid on the capital invested in trade and same announced Monday, Nov. 18, against industry. The Nominating Committee Firms building- materials industry the activity of of the output would enable Brit¬ ain both to export more and to more. industry proportion • of 3,560,000 by the Italian coal out¬ put while 11,700,000 tons should should the industrial 220,000 150,000 requirements covered which of coal Such position of Britain is not so des¬ perate that it would call for a continuation 400,000 .... industry.. industry ; Total that state cellulose industry......) Electrotechnical had rejected the American Loan. As it is, the foreign exchange 810,000 pottery industry and Rubber evil if Congress necessary cotton Textile Vz% with the Italian ceive in program ing the 1936-1940 period. Iron and steel works____u_ ... excess 200,000 tons of cotton against an average year¬ ly cotton trade of 99,000 tons dur¬ Italian tion interfere to Railways and mercantile marine. 2,600,000 Chemical & metallurgical cokeries haps they want to prove the ef¬ ficiency of private enterprise, in the hope that the government, for considerations • of expediency, might slow down its nationaliza¬ for some higher do almost about snug ex¬ position a 7even have manufacturers production. economic life to clarify the issue for others. Don't be stubborn in your views, don't be at the advantage of this opportun¬ ity to use your special know-how our of Their zeal is due in part to their desire to be on good terms with the government. The government ices, at are moment price warning so seriously that they are giving away their goods at bar-* gain prices. er, farmer and ordinary citizen is going to recognize that the Amer¬ a exporters time many the from taking undue advan¬ tage of -the present situation by charging "extortionate" prices. virtual neoole the fallacy of British frain for own of are than degradation, starvation and fa¬ mine abroad is going to clarify our in government called shorter pe¬ riod surgence freight, import not really neces¬ sellers' market British obtain prices we can the did to x. look to we of the ; foreign exporters would be in clarify the peoole's mind in these days of complications and con¬ fusion. spite and cuts In sary, taking the long view and looking ahead as to the. kind of country his will be for my children and your children. I say, on the side of hope and promise, that the op¬ portunities for progress and deunlimited if in ported goods out Government experts the coal Tax! "" ' Such type of recess:on may be beneficial. I am are payable ex-Purchase price on—that velooment prices this goods. ;|of; the industrial hangers-? nrideed is duties that foreign importers have to add to the inev¬ are Tax ground insurance the!' short- of which the V thinking of the talking recessions erm Purchase no extent some on be American people; but until we do that, we will have endless hurdles. am justified are goods And What see is are exported. But in some instances they, prices of British goods abroad are lower than their is before us, my friends, I say that economic greatness and progress are ahead of us if we can clarify accord¬ ing to the point of view of Italian industry " 800,000 Electric industry.. —7 / 470,000 Engineering industry....^....... ' 450,000 British get him outi We should hankful for small favors. requirements during 1947, it Foodstuff industry that moves Italian interesting to note that an the loaded at Genoa about the to at disposal industry, and during period from September 1945 August 1946 have been un¬ the ■, cheaper abroad than they in Britain in so far as they on from to remarkable more obtainable at all. To remaining friendly allies. It took the President four even is reference materials raw of the Italian agricultural " • is that many British manufactures this years •;rying to liquidate his ideological adversaries by calling them isoationists, but in Madison Square our coal drive.. are You know Wallace went around the country during the capac¬ under What is with him.',*• verse export an Britain. reverse anybody who wasn't ready to on with them British goods the likes of which are unobtainable in giving for several years, nasmuch effort They leave the home market un¬ provided for, in order to be able to carry out at least part of their large foreign orders. Travelers returning from abroad bring back sacri¬ on in! line with the capacity of the to buy. I say that the return of competition,, the return narcotics of the 30's, for the first of selling .will be an. entirely i, -decade in our national history, we healthy development which will had failed to add anything net to make for long-term progress. T ; our store of tools. > But we fever¬ say to you businessmen here this ishly set out around 1940 to remorning, don't wait until you are pair that !. retarded development forced to recognize a competitive and to make good the delay in situation; discount ; it now; be building new plants and equip¬ read for the months ahead and -• most of and,the industrial¬ certain " the textile field there is of Ital¬ Coal Requirements With ment have concentrated their ut¬ sent we scheming against the Soviet He berated us, by impli¬ in his address, because we lad been of branches. (Continued from page 2079) hating and fearing this govern¬ scheming Was American followed lad ization Drive Overdone? Union? cation Export ian agriculture on the billions were in over administrators to divide the existing wealth, we V was Is British multiple fronts relieving the Russian armies. Henry Wallace said, in effect, at Madison Square Garden in New York, "We should stop scheming against the Soviet Union." ; Gen¬ full year of the produced upwards we British armies to favor the motorization cru¬ in .. of 40% of all lethal weapons made in the Axis and United Nations alike, though < " (Continued from page 2077) important share of machinery an Lend- fallacy that if you Lease; and the overlooked the shoot the capitalist, you avoid the cial effect of the American cost If all of us cooperate and advantage of this golden op¬ portunity, then the next chapter up great sense. field. again the wall; he overlooked the millions The ■ \ & Co., of Scott, Mont¬ Scott & Co., of Philadel¬ phia, and John L. Clark, Abbott, Proctor & Chairman. Paine, of New York, Thursday, October 24, 1946 THE COMMERCIAL & FINANCIAL CHRONICLE 2110 the Commission ment that deficiencies in the first to reverse letter of comment be cured, would the undesirable trend away from defeat the entire program, unless the use of the red herring by giv¬ the first letter of comment were to buy before the effective date, received in ample time for the is¬ ; y'i it was required to comply with ing these assurances. suer to complete the preparation certain standards. In general, Comment on the Proposals * of the necessary amendments and these were that the red herring L The projected rules would i;o prepare, print and file the red should be a fair summarization of lerring prospectus at least ,48 the salient information in the reg¬ make an important/contribution rent proposals of for Red Herrings The Outlook (Continued from page opinion concerning the merits of the security; (2) it bears a spe¬ cific legend limiting its use to in¬ or 2071R which reasonably accurate and formative purposes only; and (3) complete information and bears a five exact copies are filed with the specific legend limiting the use of Commission a certain number of date, effective the before contains informative pur¬ poses only, will not constitute an attempt, or offer, to dispose of a security nor the solicitation of an the prospectus to offer deemed complete,! prepared of the information the registration To it. buy to on basis in the , contained least 48 hours Commission at before the registra¬ tion becomes effective.: the developments which gave rise The Securities Act of and to them. amended, provides that the effective date of a registration statement shall be the twentieth day after .the filing thereof or such earlier date as the Commis¬ sion may determine, having due regard to the adequacy of the in¬ formation respecting the issuer theretofore available to the public, and to the public interest, and the protection of investors. Until the effective date, it is unlawful for any person to use the mails or the 1933, the -v final prospectus may consist of a red herring which as attached to and made part of a "document" containing such addi¬ tional information as is necessary to correct inaccuracies and to sup¬ The 2. complete understanding of A amended to cure all deficiencies cited in the Commis¬ sion's first letter of comment. Five copies of the red herring must be with vv- import of these proposals requires a consideration of the background statement as filed - Background of the Problem plement inadequacies in the red herring. The red herring and the "document" together must contain all the information required for a complete prospectus under the Securities Act. , 1 , as interstate commerce channels of to sell or offer to buy the ties the through The intention of attempt . Iiours before the effective date. ;o the promotion of the purposes should 1 not of the statute by assuring to un¬ A red herring put into circulation stress or emphasize the favorable derwriters and dealers that a red within a matter of; hours before as against the unfavorable aspects herring prospectus will not in it¬ the effective date serves little pur¬ of the security; should contain no To be useful, red herrings recommendation or opinion as to self constitute an attempt to dis¬ pose. should be distributed several d^ys the merits of the security; and pose of securities or to solicit of¬ in advance of the effective date. fers to buy, provided that the pre¬ should be clearly marked to in¬ scribed conditions are met. The While the projected rule does not dicate that it was & informative statement; j any intent When these only and to negative solicit to standards orders. were rules would have the effect of re¬ which may inger in the minds of underwrit¬ moving met, the red her¬ of dealers, brokers, corporations and and individual in¬ institutional vestors without Act. ' This was the the of violation ' 1 general situation a dealers proper In 2. doubt any and ers ring could be sent to underwriters, as to the legality to be postponed until the first'letter is received. Conse¬ De of 'comment the quently, red herring. order prohibit distribution before filing, it does require that distribution protected by entire of workability program the depends .upon a rules, the red her¬ speeding up of the Commission's ; ring must be prepared on the basis procedure in examining registra¬ tion statements. ' '» of the information contained in proposed re . registration oe statement "as prospectus may consist of the red herring which 4.' The 'final by and large, it seemed to fairly well until April 30, amended to cure all deficiencies On that date the Commis¬ cited in the Commission's first let¬ is attached to and made part of a sion issued a statement of policy ter of comment." This provision is "document" correcting any inac¬ curacies or inadequacies in the regarding requests for the accel¬ far too restrictive, ^undoubtedly Any person- receiv¬ eration of the effective date where more so than the. Commission in¬ red herring. and, work 1945. red medium otherwise. prospectus or securi¬ of a an , istration determined) before days (not yet it is used. be reasonably accurate and the red herring must be represent 1 the Congress in herring prospectuses had been tends. In the statement of pol¬ circulated. The icy made it clear that the Com¬ mission would not accelerate in common mission , first ,,' practice to " - place, it note for 1 ' ing a red herring prior to The ef¬ has been fective date need receive only the the Com¬ "document" if both are delivered deficiencies as by the same person. Under this the % Commission would 3. Any person to whom a red her¬ been circulated containing ma¬ fact material and which the staff no longer require proof, as a con¬ waives after conference. dition to acceleration, that every ring prospectus was sent or given the effective date was twofold: to terial inaccuracies or inadequa¬ oftep prior to the effective date need be slow down the process of distri¬ cies, until the Commission had re¬ While only material matters may person who received a copy of the sent or given only the "docu¬ bution, and to afford opportunity ceived satisfactory assurances that be intended, the rule literally re¬ red herring had also received a ment," if both are sent or given for public and professional scru¬ by apprporiate means the nature quires that "all" deficiencies be copy of the final prospectus. It is of the material amendments had cured. Thus, if there is not pre¬ implicit in the rule that the liaby the same person. tiny of the proposed issue. It was These proposals are intended to contemplated that during the been communicated to those per cise and exact compliance with oility of the particular -transmit¬ the deficiency letter, notwith¬ ter of the red herring would be encourage the printing and use of waiting period there would be hsons to whom the red herring was red herrings. To supply them widespread dissemination of in¬ distributed. standing that it may refer to im¬ satisfied by his sending a copy of the "document" to the recipient with "teeth," the Commission formation among dealers and the An immediate result of the an¬ material deficiencies or to defici¬ encies later waived by the Com¬ of the red herring. In other words, would refuse to grant requests for public generally with respect to nouncement of this policy was to acceleration of the effective date the issue. At the same time it was create a general doubt in the mission's staff, the red herring the underwriter would no longer where it believed that the under¬ contemplated that no sales, offers minds of underwriters as to the would not have the protection of be held responsible for transmis¬ the rule. Hence, the requirement sion of the final prospectus by the writers had not endeavored to ac¬ to sell, or offers to buy, would be advisability of continuing the use dealer. This will go- far to re¬ complish an adequate distribution made until the effective date. of red herring prospectuses. Com¬ should be limited to the curing of the practical difficulties of red herrings. Underwriters deficiencies; and the move the Commission's material Obviously, public and profes¬ pliance with would be expected to get red her¬ standards for acceleration in¬ Commission's first letter of com¬ created by the Commission^ -ear¬ sional scrutiny cannot be stimu¬ ment should concern itself ex¬ lier statement of policy regarding rings into the hands of dealers,' lated merely by the filing of a volved several practical difficult ties. An underwriter might keep clusively with material deficien¬ acceleration. particularly those who may be registration statement, even asked to join the selling group, 5. The Commission would refuse careful records of the names and cies. though a copy of such statement and would also be expected, to Secondly, if the Commission acceleration of the effective date is open to public inspection. Only addresses of dealers to whom he have an adequate supply of red delivered red herrings, and yet be continues to cite as a deficiency where it believed that underwrit¬ a small segment of the public can herrings available for, persons in¬ unable to supply the "satisfactory the failure to include price and ers had not tried to accomplish possibly have opportunity to in¬ terested in learning about the se¬ assurances" necessary to obtain underwriting data, the rule would adequate dissemination of the red spect the statement. The Con¬ curity. " ' • acceleration. Since the Commis¬ perhaps inadvertently, require £ herring. Some uncertainty may gress, recognizing this fact, met sion's statement of policy referrec arise on the question of what con¬ On the other hand, the Comsubstantial and drastic change in the problem for the period sub¬ to all persons to whom the red present $ underwriting mission would continue its exist¬ practice stitutes an attempt at* adequate sequent to the effective date, by ing policy of refusing acceleration requiring that the sale of a regis¬ herring was distributed, the 'un¬ Instead of supplying such infor¬ dissemination, particularly where was required to in¬ mation immediately before the the underwriter does not contem¬ where materially inaccurate or in¬ tered security be accompanied or derwriter prescribing a compulsory waiting period between the filing date and any case where various red herring had a matters which . adequate red herrings are circu¬ preceded by the delivery of a lated, until, corrective informa¬ prospectus to the purchaser. While tion has been communicated ; to no express provision was made in receiving the red her¬ the Act for a medium of transmit¬ ring. The Commission believes, ting information to -prospective however, that fhis would no purchasers during the waiting longer constitute a problem under period, there can be no doubt as the proposed procedure,' since fu¬ to the Congressional intention ture red herrings would probably that information should be dis¬ the persons amendments required the by the Commission's first letter of comment and, presumably, would not be materially inaccurate or in¬ adequate. , ' ' " V; ;v- ; After the effective date, the red seminated during that prospectusby simply at¬ it to the necessary one- taching "document." The requirements of the two-page or prospectus Act would be met when a person who had been f urnished a red her¬ ring would be given in addition, by the person who furnished the red herring, the "document" in¬ corporating the red herring by reference and containing the in correct in¬ supplement in formation necessary to accuracies and to adequacies in the red herring. The • final Commission's , pro¬ posal relates to the use of "sum¬ maries" of the information in registration statement before the effective date. posal such constitute Under summary a an this pro¬ would not attempt or offer to dispose of the security, nor a so¬ licitation of an offer to buy the security, provided: (1) it contains a fair summary of the most sig nificant information in the regis¬ tration cure statement all .as amended deficiencies cited in to the Commission's first letter of com¬ ment, does not stress or empha¬ size the favorable aspects as against the unfavorable, and does not contain any period. In the fact, the Committee Report on House draft of the Securities herrings from age: the difficulty 16 (bR (now program . 17 (b) ), is not communications selling group or dealers generally of the nature of .a se¬ curity that will be offered for sale after the effective date of statement, to full in¬ formation respecting such a se¬ curity. This could easily and ef¬ fectively be done by circulating the offering circular itself, if clearly marked in such a man¬ ner as to indicate that no offers registration the circulate among the mem¬ is now the prac¬ plate the formation of a selling tice, the underwriters would be group. This uncertainty will tend disappear, ■' however, as the required to include it in the red to herring. The rule, therefore standards are crystallized through i?, should except price and under¬ administrative precedent.- effective date, as writing data from the deficiencies to be cured in the red herring. 6. The them of draf the able for underwriters . succeedec cited deficiencies. The question of whether a deficiency has been practical device for cured is frequently a matter of buy should be sent :or would be accepted until the effective circulating information during the opinion. Underwriters may toe date of the registration state¬ waiting period. hesitant to gamble on the ultimate ment. (House Committee Report If underwriters and dealers are outcome. A "clearance" letter: or No. 85, 73d Cong., 1st Session, again to be encouraged to circu telegram, by furnishing assurance late red herring prospectuses or that the standards for acceleration pp. 12-13). - ; Early in the administration of other forms of information during have been satisfied, would en¬ the Act, the red herring pros¬ the waiting period they must !be courage them to proceed with the assured (a) that the dissemination distribution of red herrings, f pectus emerged as the most ef to abuse, the Commission in discouraging the development of the most . vehicle fective sion of for the information transmis¬ the during waiting period. In order that the red herring should not run afoul of the prohibition against making provisions relating to the of "summaries," • as distribution distinguished from red herring prospectuses, are the least effect¬ ive portions of the program. This is due primarily to the. absence of any adequate standards for the preparation of asummary. -If this omission is left unremedied, it may result in widespread ne¬ glect of the summary as a means of circulating information during process which made it difficult for ment. This objection can be over the waiting period, particularly them to supply satisfactory as¬ come by adding a provision mak¬ since the use of summaries is per¬ surances that later amendments missive and not mandatory. ';: '' ing it permissive for the red her had been communicated to al In its memorandum, accom¬ ring to cure any other deficiencies persons to whom the red herrings which may come to the issuer's panying the proposed.-/rules, the were distributed. It was simpler attention before the red herring is Commission states that ""the vpry many underwriters believed, to used. ' X. V'. v?; nature of the summary makes it abandon the red herring alto¬ Finally, it would be /.advisable impossible to establish an absolute gether. ■ ' to provide for a "clearance" letter standard of what it must contain While the Commission's 'ob¬ or telegram to be -sent by the —that there must be a certain lati¬ jective may Rave been sound, Hie Commission to : the underwriter tude of independent judgment;alJ means used to achieve the objec¬ when the red herring is deemed lowed to the. author/';. Neverthe¬ tive were unfortunate. In seeking by the Commission to contain the less, there is ample precedent, for to correct what may have been an information necessary to cure the a specification by the Commission Thirdly, under the present a rule, it would be inadvis¬ to distribute an amended red herring based on the underwriters over the distri¬ later deficiency letters or changes bution of red herrings. Accord¬ necessitated by altered conditions ingly, underwriters , grew more since such a procedure would not and more reluctant to jeopardize conform with the requirement the granting of requests for accel¬ that the red herring be based eration by setting in motion upon the "first" letter of com ity. It is, therefore, possible for underwriters who wish to in¬ a of country, no adequate controls could feasibly be maintained by which merely describe a secur¬ form of later identifying selling group included dealers in various sections of the bers , concerned with dealers, their them increased. Where bill, apart from Section The the employees. As the number of such persons expanded and salesmen Act recommendation offers to sell or soliciting offers quire into the identity of all per¬ who had received the rec sons suggested the very medium to be employed, in the following pass¬ herring could be made part of the final not in . . reflect are will not in itself constitute an at tempt to dispose of the securities in violation of the Act, and • (to) that it is not likely to delay accel eration of the effective date of registration statement. the The cur¬ general matters -to. be'in¬ omitted from a sum¬ mary. For many years the 'Com¬ mission's -rules have authorized the omission from a prospectus of various items contained in 'the of the. cluded in or statement; By enu¬ which could be omitted, ►the Commission estab¬ lished standards upon which; an issuer courd safely rely, in pre¬ the prospectus. 'These 3. 'Five exact copies of the red paring recognized - standards will herring must be filed with the well Commission at least 48 hours be-> serve as a guide to the prepara? fore the registration statement be¬ tion of -the red herring prospectus comes effective. This require¬ ment, coupled with the require- under the proposed rules., They registration merating the items - Volume 164 will ,not Number 4536 serve THE COMMERCIAL & FINANCIAL CHRONICLE <■■■*'. guide to the summary will supplement the red a map are, at best, guesses. One summary, since herring prospectus and not be a of the great gains tnat can come contemplated fhat the sum¬ substitute for it. Consequently the with the completion of the organi¬ mary will be a more condensed red herring will be generally zation of the Bretton Woods insti¬ instrument than the red herring. available to correct any mislead¬ tutions is an increase in the ac¬ But ;the approach used by the ing impression which might other- curacy and speed of these tabula¬ Commission in fashioning the con¬ wise be created by the more con¬ tions. But until there is much imtents of a prospectus would be densed summary. In the second pro.vementvin the bookkeeping of equally valid with respect to the place, the summary must be filed many nations which are looking summary. • with the Commission a ^ specified to us for goods, the signal that the The Commission has gone even period before it is used. This re¬ detour has begun will be the same further in the case of newspaper quirement should not only serve time-honored one that betrays the prospectuses. Jts instructions for as a deterrent to unfair slanting or financially embarrassed business various registration forms have, emphasis, but should afford the man everywhere—the nation will permitted tne deletion from news- ! Commission opportunity to de¬ be reported slow-in-the-trade. paper advertisements of a great mand any necessary changes. In the case of foreign trade, it many items of the registration •Finally, the summary could not is the nation as a whole, and not statement which could not be lawfully be used after the ef¬ the individual buyer, that becomes omitted from the. offering date unless accompanied slow. pros¬ fective The «buyer may be solvent pectus. This procedure was by a prospectus conforming with and liquid, with an abundance of prompted by the need for brevity the requirements of the Act. With local currency with which to pur¬ in; a newspaper prospectus. A these safeguards, the potential chase dollars; but. if his country siipilar need for brevity exists in dangers in the ,use ,of .a summary; has incurred an adverse balance the -summary. Like the newspaper ate .negligible as compared with of payments in international ac¬ prospectus, the summary would the advantages to be derived from count, the dollars cannot be pur¬ merely direct public attention to its development into ah instru¬ chased with Jhis loqal the salient currency. points in the registra-' mentality for the circulation of The only way that he can honor a tion statement. Since the summary information under proper stand¬ bill of exchange drawp in dollars behrs some relationship in pur¬ ards. ; ' > , . is to - deposit the local currency pose 'to the newspaper prospectus, ; TJhe proposed program, amend¬ equivalent and .engage to make the Commission : might -readily ed ,as., above suggested, - should further deposits to meet any de¬ adapt the existing standards for haye ,the effect of promoting the preciation in its value until dol¬ newspaper- prospectuses to the broader dissemination -of informalars are again ^available. summary. If this were done, the' tibp;dtirihg |the waiting period. It 1 The sure signal that the detour summary could well develop into represents a material advance has begun is a report that a na¬ a favored device for disseminating over the Commission's existing tion is deficient in dollars ;with information; during ithe waiting policy with respect to red herring which to pay -for imports from period; -: :U z ; <• -' «, prospectuses. Under the present the United States. iThe development of the sum-! Having agreed policy, the power to withhold ac¬ ,pn that point, our problem is to mary should not be restricted be¬ celeration constitutes a deterring determine its significance. It is cause of the" possibility that un¬ factor, to the 'circulation (of red likely to represent something more scrupulous persons may unfairly herrings; under the proposed pro¬ than temporary ^congestion, be¬ slant lor emphasize the informa¬ gram the same power would be¬ cause the local tion it contains. The Commission i come an banks, by drawing encouraging factor. The 9{Lday-drafts on their bank cor¬ has ample power to deal with that outlook for the red herring under respondents iin the United States possibility. -In the first place, the the new program is far brighter in accordance with powers con¬ program. contemplates that the than it has been in the past." ferred by the Federal Reserve Act in such -a situation, can create dol¬ preparation / as of a nations, in the expectation they will shortly be able to a it is , , , t at the rate for prime commercial pa- currency fie can continue to sell; but ;that will eventually tie up his capital .unless .a market for these focal currencies is created by private investors in the United per. States present that the is cost .of ; such Lnancing-—,currently around 2xk% per slightly annum—runs above With the loanable funds of our who investments contemplate making The recent¬ overseas. banking institutions by no means ly : issueel .report 5 jof the Colmer fully .employed, and their accept-: Committee .on The Postwar For¬ eign .Economic Policy an£e power in only nominal use, of the tliere be United States estimates that in the question with re¬ the availability of funds postwar period our private foreign to-finance our exporters and im¬ investments,, with proper encour¬ porters, <at rates so moderate that agement, might amount to as much as it is certainly fair to say that $2 billion a year. This is a any ,can no spect to business which cannot readily ab¬ sorb them had better not be .en¬ tered, into. ■ „ * • . v * * sound and effective way to aug¬ ment the supply of dollars avail¬ able for payment of our exports. It is subject to the limitation that The Export-Import Situation provision must be made for the appreciate the problem in-; remittance, in dollars, of the in¬ vqlved in the financing of our; terest and dividends on the sums foreign trade as differentiated; thus invested abroad. It is further from financing our foreign traders, subject to the qualification that let us take a look at the current the practice of foreign investment To foreign trade figures. In June, our must be continuous, because its commercial exports rose to $684 cessation would curtail the expan¬ million, the highest level for any sion of our exports and its .re¬ month since December, 1920. Total versal would diminish them. exports, including UNRRA and Foreign Loans to Finance Exports Lend-Lease shipments, were $878 ^ What about -foreign foans to fi¬ million, the highest level in 26 June imports at $385 mil-; nance exports? The fundamental fact about a foreign loan is that lion, were 5% below the $406 mil¬ lion high for fifteen years reached it is a deferred import. In other April, 1946. These figures mean words, the stimulation of exports years. that after caused by imports of a - short our raw interruption greatly enlarged materials for war* created through loans involves a corresponding restriction of ex¬ ports This when the loans are paid. statement js subject (to the purposes, and enormous expendi-! lures for the maintenance of oqr qualification that a foreign loan armed forces around the world,' may possibly ;be used for a pur¬ atra time when we had neither the goods to export nor the ships to carry them, we have reverted to Pur normal position as creditor' in visible international count. 1 /V."; -\-.VV ; ' trade '/-I-.: ■ ac¬ ' -'i/:' pose1, which cient will additional generate suffi¬ dollar exchange during >its life to provide for its payment at maturity. A .considerable .distortion in balance of trade with our any .coun¬ The .basic principle of foreign try can be financed by .a loan trade/.is that it is ,a .trade, and; wjithout detriment—indeed, with as long as the tracle must ultimately balance. We mutual benefit adverse balance is not-so severe can give to the limit of .our pro-, or so protracted that an ultimate ductiyrty, but we ..can .trade no — more goods than purchasers; pay for out of what we buy frqrp .them plus what we pay them for services, such as freight and. foreign travel, plus what we give! them in .remittances to relatives and friends. our can Of if the exporter is accept payment in local course, content to balance becomes impossible. difficulty is to agree upon traffic signals for the The some journey such a detour. discussing how the .detour has map. to meet a We can one realizes start on by that begun. Not by a The statistics of the balance of use ently receive from Foreign ■ v : 1920, deficit, loan. are are 1 Fownes Stock > a government who haye $6 billion loan to Rus¬ first of that postponement of the payment process, -while useful, is possible only if a favorable atmosphere is provided for its foreign invest¬ ment arranged a f our investment bankers through public .offering, the risk is :qn "in pending repatriation. and a It is a world of peace, prosperity, liberal trade policy, there well be a revival and con¬ tinuation of American private in¬ vestment large scale, includ¬ ing a reinvestment of the profits of industry, that will put the pe¬ riod of net repayment far in the on a ples is no easy matter is supplied by the fact that, while the Pres¬ ident's Budget Review, in August, estimated our and Development, taxpayers will share the risk quarter that oUr foreign credit but was $567 million. Since July 1, repayments of Ex¬ port-Import Bank credits have with those of the other subscrib¬ ing nations. In any event, for our exceeded rowed funds foreign traders export has served to middle the new loans from bor¬ by $33 million. Up September, the of its purpose, which is to sell goods a realized profit. But exports United for but $400 million sold by our foreign traders and paid for by our investors and tax¬ $3% billion credit, which was con¬ siderably .below the earlier esti¬ will not result in benefit to people of the United States payers the until wte ,as a Kingdom had withdrawn of 'the approved mate of needs during this period. "Business Action," the weekly re¬ .nation have received from others, in products and ser¬ vices, the equivalent of the prod¬ port of the Chamber of Commerce of the United States, of .September 16, predicts that "for the fiscal ucts and services which we have supplied to them. And that means year that ing the British credit and loans through the Export-Import Bank, does not seem likely to exceed $3 international loan, like a single purchase, can be paid only with goods and services. The trade cycle, no matter .how long and an un¬ the public offering of securities Fownes The offering consisted of 100,000 shares of $1 par value capital stock at $9.50 a share. ' The ^company's present Ameri¬ can set-up was accomplished by an incorporation under New York laws in 1921. The Sherrs control from of this company .acquired in 1936 Fownes Brothers & Co., an English partnership, members the of and Fownes from family, whose glove manufacturing enter¬ began in Worcester, Eng¬ land, in 1777.. prises The American company is capi¬ with ,300,000 shares of talized stock, of which 200,000 by the Sherr retained are to be interests, the underwriting managers said. The American company maintains plants at Gloversville, Amsterdam, Fultonville, Worcester and Broadalbinal in New York State. Evidence of the fact that Roth program would: require $4,168 million for the fiscal year, the total actual outlay for the first construction Sale the release and the use of credit in accordance with sound princi¬ the payers. On loans to be arranged by the International Bank for Re¬ on future." was investing public. If the loan arranged through pqr govern¬ ment, the risk is now on our tax¬ i son. conceivable, .the reporhstates, that strained by are company, and part of those of his responsible for the operation Export-Import Bank. They usefully set opt in the first may by worry about :yvhere the dollars are ,coming from. The do is to which •. of the National Advisory Council, transmitted by the Pres¬ prompt loan has .transferred that worry to others. If the loan was can conditions outside the sphere of finance." of .our payer. the traffic sign at green, and trade proceeds at a merry clip, unre¬ organized action Brothers & Co., Inc., sia, and proportionate amounts to The shares China to develop a Yellow River glove manufacturers. for sale are part of the holdings Authority — are fortunately 're¬ of Ivens Sherr, president of the spected and observed by those who up past-due bills and pro¬ vide dollars for current .purchases. Qur slow-in-the-trade customer is set to¬ sum favorable to production, and of those the most important fall which promises to , proposed The proceeds of the loan devious, and certainly much products principles—though they Van Alstyne, Noel & Co., seem not to restrain the do-good¬ derwriters, on Oct. 21 made ers in our And right here is where the dan¬ dangerous.. The loan has the work, and the These ■ clear more i ' life consists .of create goods for export of dollar value at least equal to the interest and amortization on the United States are not to cease, a loan of some duration is indicated. more suggested a Foreign Loan Policy of the United States Government." Among other ther purchases of goods from the things, the statement emphasizes Is .the detour ended? Not at all. the contrary, it has become ; or skill, unless the enterprise will the local banks to meet with shor.Lterm credit measures. If fur¬ On frequently have increased only by an increase of production. All that any official create useful temporary a basic—so funda¬ an of men's foreign materials mand for dollars is too severe for be have tal of human prosperity can be Nor should a foreign loan be used to finance any enterprise which requires ident to the Congress on March 1, 1946, entitled "A Statement of the to world domestic report again reported I so — a part only, essential part, of its mechanism. - The wealth of the though terial. a use It is economic nor to finance any domes¬ be put to across "Finance is, after, all, only a reflection of commercial and tic enterprise which can be built with local labor and local ma¬ or ran the leave it ringing in your ears: our that we can usefully and willing-' ly receive. That means that for-' eign loans should not be made to borrower's be of that it be displayed in bold type in the Board Room of every pub¬ lic financial institution. May I necessities, but to the ability of the recipients to produce, ulti¬ mately, an equal volume of goods the which mental—that. I own finance might record in the report of the Economic Conference of quoted. be the statement a Foreign loans should, then; be geared not simply to our ability to produce goods in excess of wisdom some In that search, I past. . Should excess: of ger lies. for international financial collaboration was taking form, I Brussels Made ' / us.; Loans our plan thought in production from them the equivalent of what they pres¬ When ultimately be made. years ago, when Several extracted from receive of living, a may our capital, and in the fur¬ ther expectation that they will ul¬ timately be able to increase their output to the point that we will their standard rise of production to levels out of which repayment in goods yearly at least sufficient goods services, of the sort that we willingly and advantageously receive, to compensate us for the demand over supply. We haye • iben, at least a caution sig¬ nal, indicating that the excess de¬ (Continued from page 2077) of; acceptance .credit exchange and and . lar ment in can , - that send us r ment 2111 1948, the outlay in the inter¬ national finance program, includ¬ billion and may not run Offered a! $4.25 An issue of a Sh. shares of common stock, par value $1, was offered to the public Oct. 22 by John J. York. $4.25 50,000 O'Kane, Jr., & Co., New The per stock share as offered was at speculation. a The .company; was incorporated in Delaware Sept. 13, 1945, and is the sole all in owner of the formula and patents, copyright, trade marks connection with the name "Konga." Konga is a carbonated soft drink*sold to the general pub¬ lic in bottles at 5 cents. is made with from essences a Its flavor secret formula distilled from fruits, The pro¬ herbs, roots and barks. ceeds received will be u$ed by the company to expand its activities throughout the .country by sales promotion, for the advertising, etc., and purchase of additional machinery, | materials, . etc. \iimm — that usefully it is postponed, -can even¬ high." -;■ ' - •! • :•• tually be completed only by re-, There is reason to hope that the versing the normal position of the. voice and Influence of the global . Bramhall, Barbour Co. , United States from that of a net exporter of goods and services to that of .a net importer of goods and services. Essentially, our - program for economic assistance to the United and Allied Nations consists of the of trade and international capital delivery movements which constitute such current of some billions productivity to of our planners To Be Formed in NYC and super-lenders has waned, and that our loans for re¬ construction and development will is being formed with offices at 25 be Broad extended and which those ,to those countries— alone—in countries conditions production funds wRl .exist. favorable So used, for our Bramhall, Barbour & Co., Inc., Street, New York City, to in the -securities business. Principals of the new firm will be engage H. Keasbey Bramhall and Phillips Mr. Bramhall was sqpjply machinery and f. Barbour. equipment to multiply men's la¬ friendly bors, with a resultant improve¬ formerly a Merle-Smith. partner in Dick & - THE 2112 V issuer is the Pitfalls and (Continued from page \ 2083) ments are available to any , , ularly. in making ihese purpose comparisons was to establish what, idr want of a better term, we will The principal differences revealed are can • iields these: 1. A experience." of loan importance of and types in difference loans in the the aggregate as earn¬ ing assets; the nature and 2. A difference in - . of importance the investment portfolio; deposit struc- ':. ///,/;; •'y ture. These observations suggest j pitfalls discuss should /;:////,{/.,/ ../>'■'•/ services that and reg¬ balance,; than have, on dollar value greater a funds "exported" settle to "imported" products and vices. (Again, I "am ser¬ that my statement over-simplifies the case.) They flow into your bank when you have' convinced the public that you can and will, cheerfully and courteously, pro¬ the vide maximum aware of uable will service at Again val¬ obvious—it guideposts are amply repay you to con¬ stantly study the economy of your community, its relative advan¬ tages or handicaps and prospects. with k especial refer¬ ence to (1) loans for productive I need say nothing on the vital purposes; (2) . investment prob¬ importance of your public rela¬ lems; and (3) deposit character¬ tions program; you have already istics.. *<" proved M your astuteness in that guideposts . , I "order of impor-I will discuss them in inverse order to what I suspect is the weight of your interest. It might be appropriate to stop right here and mention something that I have come to regard as Pitfall Number One— something which I have heard described as an "occupational dis¬ ease" of bankers, a charge which in my opinion is not justified subjects in tance" since every any this affliction walk of is found in life. What I have reference to is the belief attitude or field. that one has Let -never instead but all ment such bonds. True, constituting a major seg¬ bank investment port¬ ; long time. a least until the end of the war, there was little activity in eitner corporate or municipal bond flotations. In the past too many banks have said, "This is a specialized field;! know nothing about it, so I'll turn the problem over to somebody else." These are specialized fields, but you are not justified in turning your responsibility over to some¬ one 1940, else. at Least of all should you expect a seller of securities to be in position to discharge fully the obligations of an investor. Fre¬ quently and naturally, the inter¬ ests of buyer and seller are 'dis¬ a similar. - - tions are two , t - securities—the of The tion me rest just add, however on your to answer ' laurels. our third ques¬ is illusive, and I do not be¬ it permits any categorical lieve propriate to the two classes. ■ In answer. the past you have had a very great number of small accounts, a relatively few mediumsize accounts, and frequently no large accounts. In many instances your deposits have been predom¬ inantly time deposits. As you succeed in "breaking ( into the commercial field," so to speak, you will attract more and more of the larger accounts. and more volatile And whereas the nature and bonds, where the risk interest and due is are to such a in almost be considered non-existent. They enjoy maxi¬ mum shif tability, "Credit" bonds, on the other hand, are long-term loans with varying degrees of shiftability and of the intimate They even see in in each each new new problem, opportunity, a striking parallel to some situation of the past which did not work 'out as hoped and, instead of seek¬ ing the causes of failure of the nitely worth while to analyze reg¬ ularly their deposits according to classes of ownership, to chart the trend of each of years and to make projections class over a period based upon the economic orospects of each class. An explana¬ language of that are some ■ : few Some of best our op- V /:- /'■ /...; and a pit into which banks have fallen, some to after tears and/travail, others to disappear forever, r I many have herit the earth." / for you but philosophers have ob¬ "how the mighty have fallen," and "the meek shall in¬ power, served these particular /•//-:' This brings us to a new depart¬ ure Contemporary thought seems to place a premium upon size and in mind:— Failure to obtain and maintain full and complete credit informa¬ tion. / ■ • /: r ' /.,■,.. authorities informed that believe municipali¬ ties face insoluble problems which portend decay. I shall attempt no prophecy, but suggest that the standard railroad crossing sign— certain of large our Stop, Look, and Listen—is sound i ft z •- Much what of ments of said been should sound commercial loan a be not the abandoned simply form of the obliga¬ tion has been changed to a bond. ' Loan All their too many Pitfalls banks look upon as something file / credit which must be maintained to sat¬ isfy the examiners. It is hardly : necessary to add that no good bank entertains any such point of view, for nothing could be farther from the truth. has concerning municipals is equally applicable to corporate bonds. It is axiomatic that credit require¬ heart of the mercial bank. obtain" The credit file is successful com¬ It is not enough to any balance sheet statements/: If will dearly, perhaps more than can afford. V \ V'" ? annually and let it go at that. you pay you fall into that trap you est need similar' statements for preceding years, and a thorough analysis of such statements made lies, namely loans, let me sim¬ ply mention three further sources by someone who can see through the figures and read the signs, tell of possible whether the 1. trouble: Allowing yourself to be lulled into relation¬ false r sense a because m of security larger bank also of the corporate is¬ some holds some sues you Chase can are holding. Even mistakes make and prospective borrower good competitive basis in the industry, obtains efficiency of is on a operation, and enjoys quality of management, etc. An X-Ray pic¬ ture is of little value except in the expert. To do a good lending money to "big" hands of an it is just possible they may be in a better position to protect job themselves that your or "if worse comes l to worst"—absorb the loss. You should tions of the United States Govern¬ yourself have adequate current credit and information local in business it is also necessary analysis be so clear and your knowledge of the industry so complete that you could see that a loan to a borrower,/say for would be bad business bank and your cli¬ must admit at the same time that 2. Substituting "ratings" by com¬ ent, whereas a loan for $300,000 would be sound for you both. That the degree of credit risk varies mercial agencies for individual is often done and it is good busi¬ enormously.;; To some this may / credit analysis. Historically ness when the lender knows his appear to be an unwarranted po¬ //the commercial agency ratings business. sition, but I assure you it is the ^, * * have shown a tendency to fol¬ ment—that "credit*' all bonds other even bonds are though we . the need for current financial and operating statements Beyond c you Before, turning to;the field in which I believe your major inter¬ ships and personal characteristics all the answers—that of the small ones is more uniform associated with most of your loans. there is nothing new under the and their analysis simple, con¬ A major pitfall arises from the sun. Nobody has all the answers, versely the nature of the larger possibility of confusing the two and the only safe plan is to as¬ accounts is frequently more vari¬ types. sume that all past experiences able and analysis must be made For the purpose of our discus¬ and all present knowledge are in greater detail, and at more sion, let us assume there is only nothing more than "points of de¬ frequent intervals. Many com¬ one "money" bond—direct obliga¬ parture" for charting the future's mercial banks have found it defi¬ All/ too often men with years of experience in banking tend to solidify in their thinking. chances emerge already course. soundness of issue. of issuer with point that it may devoid lomanufacturing center, , pitfall may be found confusing size and importance principal as and when reduced a, erations. - , because obligations of nonpayment of "Money" bonds the Another so-called "credit" bonds, and you must be able to distinguish between them; Differ¬ ent investment techniques are ap¬ money" obligations of the same and credit issuer.) designa¬ broad in cated and obligations of; the issuer. particular products or types of (True, you will find cases where manufacture will predominate and the revenue obligations are supe¬ you will find it necessary to be¬ rior in quality to ; the .full .faith come thoroughly familiar with the advice. There lems and techniques of retail wholesale trade. If you are eral of Since political without. risk or. in the same risk category as gen¬ the evidence points to govern¬ folios for or the bond / is even that it. falls . , not going to take up these am lure activities to ments' /. -: citizens its of the minimum of cost. 3. A variance in the banker factors Deposits flow into your Com¬ munity when the products and for ■ - marked these watches who State a subdivision;; that Guideposts of Commercial Banking Banking Changes ;*';'My *. .Thursday,..October 24,,1946 COMMERCIAL & FINANCIAL CHRONICLE • .. concerning every corporate is¬ sue in your portfolio. /• : v $100,000, for both your ' tion the of technique employed safer course to follow. It simply low rather than precede the / In a book released two weeks time than we have means that,-except in the case of previous effort in order that the at our disposal market. And that leads us to ago by the Research Committee of today. Should any direct current hope may be brought to obligations ,of the United the final "pit" that I shall men¬ Robert Morris Associates entitled of you be interested in making fruition, •; they find V themselves such a study of. your own bank-r States,: you will satisfy yourself tion in the investment field.'/ / "The Credit Department, a Train¬ as to the risks involved. ;* taking the easier course, which is and I cannot emphasize its value 3. Playing the bond marketi—shift* ing Ground for the Bank Loan Of¬ to say "no." Please do not mis¬ too strongly, if you will write me ficer" appears a paragraph which Recently quiescent, but due for i; ing the composition of your inunderstand me; the successful at the Federal Reserve Bank of a sharp revival, is the issue of ob¬ conveys my thought in words //vestment portfolio witheach banker has to say; "no" many Richmond we rpore effective" than I can com-* shall be glad to ligations by States and their po¬ passing whisper of theu innu¬ times, and when that is the proper send you litical subdivisions, : obligations Z/' ' $ explanatofy material merable "experts" who furnish mand:/ »." answer, he should say it with and the necessary forms. which, for the purpose of this dis¬ //"confidential" Z; "A financial statement is a information to kir dly finality. What I am trying cussion; we will lump together in¬ all. Personally, I do not believe Guideposts—useful in charting 'picture,';* and - most / financial to say is that we should approach to a class and call municipals. that buying, and selling bonds f men your future course—have been frequently refer to it as each new day with an ooen mind, Generally speaking,: municipals mentioned. Let us state certain with a view to obtaining a net such. * If the analogy is pursued saying, to ourselves, "This is the have a* good—though "spotty"— : pitfalls and leave them without profit, from * the - day-by-day further, the balance sheet may' dav when I shall think a new record. But some inexperienced .;/ fluctuations of the market has any discussion. be referred to as a 'still picture/ ; thought, encounter a new idea, and unwary investors have fallen vi any V place ; iu in that it 'freezes' a moving a commercial or aid in some new endeavor to into a trap by assuming that mu¬ ' Pitfalls / bank. /Not that a bond once process or business phenomenon tmrrove the economy of my com¬ y .i T + . . ■ J * # • . nicipals are "money" bonds. That at a stated place and at a stated bought shall be retained "come 1. A sense of complacency and munitysimply is not true. The evaluation Y hell or high watnr" but rather time. By the same token, the J self-satisfaction arising from a of risk in the V But enough of that—and back municipal credit purchase for yield- to maturity profit and- loss statement may ; period of increasing / deposit field is a fairly well established to our particular tonics with cur or call should be the underly¬ be likened to a 'motion picture/ aggregates, / -' / . , attention turning first to deposits. technique and, before you enlarge ing philosophy. v intended to show business his¬ 2. A sense of confusion or be¬ this section of your portfolio, you Of course none of you are ac¬ tory in the making and !n be¬ Time marches on, so, let us turn wilderment ; arising would do well to obtain some one from the cepting deposits for the first time, tween balance sheet dates. The : complexity of the problem and or more of the available tex^s on our attention to the field of per¬ but since many of you in recent 'still' shots, set up side by side, ; resulting in failure to You keep the subject and engage in a little haps major interest—loans. years have begun to seek accounts may be thought of as portray* constantly informed regarding serious study. Lack of compre¬ have specialized in a type of loan from so-called commercial cus¬ ing the condition of a givei} the economic factors affecting hensive financial information con¬ where, by achieving a sufficient tomers, it seems in keeping with business at stated „ intervals. volume, you have been able to your community, and therer stitutes a major problem. irv subject to include a few gen¬ However, .taking a- picture o£One special note of caution be¬ rely considerably upon what we eral observations. In ; order * to* Vvfore your deposits. ;■ little Jimmy only on his birth* orient our thinking we might ask 3? Failure to constantly strive for fore passing on: some cause for might term the law of averages in days will not explain such de^ the field of credit. By pooling ourselves three questions: rv = /'{.as much economic diversifies- concern is seen in the developvelopments as physical growth, your experiences and observing tion among your- depositors as [ment of revenue bond financing. 1. Where and how do deposits changes, in features, or personsstandards applicable to the nature of your community I; have in mind here securities certain V originate?. ality changes. Sole reliance oiv which rely solely upon the rev¬ large numbers of borrowers with¬ /■ will permit. /■. /'V// the snapshots will cause the ob* 2. How and why do they flow to enue from some, specific source out the necessity of exhaustive in¬ 4. .Failure to server to miss such occurrences correctly appraise ,'pnd from your bank? //)////;..' and are not supported by "the full vestigation in; individual cases, the possible consequences of a as Jimmy's summer at the farm, 3. How can.you know when they faith and taxing power of the is¬ you have been able to place your lack' of economic diversifica¬ or the time when a tendency • are going? v suing unit. Each separate issue risks upon what might almost be tion when it cannot be achieved, toward chubbiness first; oc-ftermed an actuarial basis. But in Let's state our answer 'to the and adjusting your course of requires- individual appraisal and cur-red,. /• Aside from • general first question this way: The ag¬ every prospective purchaser entering the field of what we shall action accordingly.; -; r • * knowledge as to how well ot should demand complete financial call "commercial" lending these gregate deposits of the banking ; ' ' ■-'■■■.' ■ * .s • i*. poorly he was eating in that pe-4 information before buying, and as¬ techniques will be of little if any system as a whole increase when Investments. v. >:>. { > riod; such changes in little Jim* sure himself also that current value to you./ No one of you will loans increase, increase when in¬ my could not accurately be acbe able to develop a sufficient Now, let us turn our attention operating statements will be avail vestments increase, increase from counted for except through a a net inflow of gold, increase briefly ; to another field in-which able throughout the life of the volume to achieve an "averaging" 'motion picture/ record of the of risks./You must become spe¬ your past experience has been bond. Credit standards appropri when currency in circulation out¬ > whole, ? period. Furthermore^ somewhat limited—investments: >- ate to private ventures in similar cialists in whatever type or types side of banks decreases and, in : when- Jimmy .was, , seenw riding Most of your experience here fields,; subject to adjustments ^ne¬ of -"Commercial")!oan& are avail¬ each case, vice versa. I am over¬ : his,/, bike, whistling'. with, to able, in - your respective commu¬ simplifying the matter somewhat, has been, with governments,: but cessitated by the different powers ? hands in his pockets/ crying if you are going to be active in of "the;issuers, should apply. " nities. "If your-bank is located in b^t that is sufficient for our pur¬ ? ovdr ah injury; or winning all a* distributing * center,) you ~ must poses. Valuable guideposts indi¬ commercial banking it is not like-* H It is an error—a pitfall, if yoti the marbles in the neighborhood^ become familiar with the prob¬ cating future deposit develop¬ ly that you will confine* your fu« please—to assume that- because requires t more - . , . t , . , .. . , *' . . , • . . * - ■ • . 'Volume 164 Number 4536 * THE COMMERCIAL v i FINANCIAL CHRONICLE & .2113 :'V lie became something real, vital, off other creditors, make further and functional; and the observ¬ loans to revitalize the company er's attitude ' towards him, be¬ and assume an active part in the cause of increased familiarity management of the business. It with in his activities them becomes livened." ', . If you - , and ; \V greatly the latter Let's course. ex- pend the time, effort, and expense to develop adequate credit infor¬ , patience bank left my hotel in volved bound for Warsaw, Poland. I had my plane ticket and reservation - ing field and stay out!! definition tutes adequate is possible time to of No what condition —but when you cision, unless overwhelming, since it varies of business from holders the upon the forts pending upon the nature of the operation and the risk element in¬ prises. volved. j:V; ■;: Inadequate Perhaps ;,.• ; to ••'Some years ago an old arid well established ing in The tor company of one large various was operat¬ amounts of credit been at successful so period of years ceased to demand that over the these ly with substantial "A to a it fixed. watch tomer such specu¬ are the rare . More home by "the watch will commercial able ran banker was -discussing with me the problems Of a particular line of business en-* Oeavor, one into which incident¬ ally some of you have ventured I understand,—I refer to the truckring industry. He felt that he rneeded complete financial infor¬ mation monthly, and in some cases additional reports were re¬ quired weekly! We cannot spend much more "time on this particular subject but there is one additional pitfall which we must be mentioned before leave—I have in mind sending rgood money after bad. Probably you do not be of reminded this ; . need to since you :have operated on a principle of ^establishing reserves currently ;and charging potential losses ^against these reserves as they ap¬ pear. But will you have the ■"fortitude to continue this healthy borrowing customers. was 5. - bank. your the Thus cases to be cease you wherein pledgee and a become an Never lower' your V owner. or irresponsible repair competition. If competitor is taking away business by granting credit ; on ious to know if the cuckoo clock your man was cur¬ terms, then if your con¬ clusions are unchanged, let him have the .business—you cannot The customer 'How afford "Fine,' said the 'only the cuckoo man. But do not and been guideposts many being made- annually Morris Associates by Robert in Con- because your standards you petition, it becomes imperative that you review your require¬ ments. Again, if you are satis¬ fied you. are right, go ahead. if taking long chances it may be your com'Tjpetitor who is the smart bank¬ er after all,' you are , for that association—if you do not ate already hold You 'cannot membership in the a Morris Associates would do well to bank just entering commercial the credit historical file seek studies To one. the in you a field big a and of way credit suggestions available from the Associates It is against should is, invaluable. much error mistakes.im be easier to guard than it is to correct A familiar credit "The best loans max¬ col¬ are with than the work their responsibilities. grow and men with of the greater for as possible, I for hope sumed have none that of sense, out." have you I was ready Not 11:00 Then a.m. cawe have as¬ banks In: fact most thoroughly are anti-climax. count -vtfV airport at 9:15, after we had gone through customs, we were told that the departure for War¬ saw would be delayed until 10.430 ho^^oultl But it? on 1 ' ■ *.•##*• . •' . ,y. Flying fro**" Prague to Zurich, by Sw^sair was an unusual eit~ porierice. As seems customary with European airlines, the plane took off with seemingly word perfuac- the Czechoslovak airline, a tory, if any, testing of the motors; goverrimeptenterprise" of course, and it flew unusually low, es-r thak there would be no plane to pecially over Switzerland, where Warsaw until Monday. I had a our altitude above towns seemed choice and of going taking back chance a to afternoon Swissair Zurich,, I which plane to fortunately had unexpectedly cancelled seat. chose the only about 200 or 300 feet. One could see the upturned faces of people in the streets, high church steeples at St. Gallan and Gossan Monday of waiting for the or one Prague on a departure, were virtually within "arm's reach," and outside towns as we latter course, rather flew low alongside the Swiss hills* than "reenter" Czechoslovakia. .-Vi." we could see farmers a few hundred feet away virtually at At the. Prague Airport eye-level. It was like a ciossDuring my several hours wait country ride in hedgehopping au¬ at the Prague airport an employee tomobile on a sunny Swiss after¬ gave me the reason for the can¬ noon. cellation of the Warsaw flight. It nothing • to do with the weather, but with a shortage of Something had happened to require slight repairs 1. on planes. another plane. delayed a This would of score of. them Shares have A at Warsaw the flight moment. and the Europe was Vienna travelling from Prague. I had wanted to to go from Vienna to American knew either is experi¬ last week in ence the my Warsaw, but an Army in Vienna of no way to go directly, by plane or* train. Vienna island Russians' in grip, • an area and for in the and be authorities—one needs a Russian road pass, which for Americans either unobtainable or obtain¬ able only after is me was long delay. The Army's official advice to go to Warsaw from Prague. This raised the question of how reach mally Prague. One could nor¬ fly, after a two-hour bus trip to the Vienna airport, Ameri¬ cans must use. The airport is about 18 miles away by shortest route, but the Russians make us use a part to 35-mile of winding route as their wear program of trying out American interest in Prairies" tells an avoiding them has become almost Europe. In any case, when I amusing story which may have a "second nature"—a reflex action wanted to go, all American message for us today. Back in the seemingly .controlled by, instinct flights over Czechoslovakia were days when Chicago was only a and requiring little if any con¬ suspended, ■practice when the dollar figures due / to "political" frontier village a .young couple, scious effort. Nor do I -want to reasons5 involved are substantially larger (aninternational meet¬ John Smith and leave the Peggy Myres, impression that operat¬ ing?) This meant travel .-and when the famliarity which by sur¬ came before a justice of the peace ing a commercial bank is like face means. comes with regularity is absent? ' A'^ to be married. This justice of the walking a high wire without any Perhaps one illustration will The Army advised me that the peace had in fact just set himself net—where one suffice:—Some years ago a com¬ slip is fatal. The overnight train from Vienna to up in the business and actually fact is, I was asked to discuss mercial bank made a loan to a Prague was out of question for had not been legally installed in these obstructions in the road and company for operating purposes. me, since I had no Russian road the office. He was aware of this have therefore not dwelt upon the ^Bad management or bad luck, who deficiency, but the situation called long stretches of smooth concrete pass. There is another train from can tell, seemed to plague the for Vienna to Linz. It arrives at Linz action, so he did the best he where most of our traveling is company and the loan was re¬ at about 1:30 or 2:00 could by performing some kind of done. a.m., just An average driver can newed from time to time without used mortgage common of stock 199,000 of Red to pay off a $149,000 the company's plants machinery and equipment; pur4 chase additional bottling equip-f on ment; build additions to the plants and acquire new trucks. Uoozt completion of the financing 309,-r 000 shares of .The company franchises stock common be outstanding. ground travel—according tq U. S. Army of Moore & Co., and Euler & Co. The stock was priced at $1.50 a shares Proceeds from the offering will The mail Also indicative of conditions in Eastern Market offering Rock Bottling Co., of Youngstown was made Oct. 22 by Frank (L cancelled was last very three J pasengers could wait. public shares Warsaw, the on passengers bound for the Netherlands. Since there were only three passengers headed for war-mangled to you all. an you the to , all commercial at safely in Prague next day ever meeting a Russian. After so much ado, this was reqPS without to take off was .• rived early The plane only at 10 o'clock, but one always must be well be¬ forehand, the airlines insist. At Saturday morning. on ti, will i bas-i- exclusive for bottling and sell-^ ing Red Rock Cola, Clicquot Club* Ginger Ale and Soda and Hep, a* lithiated lemon drink, in six counties in Ohio and Pennsylvania; with a population of approxi-^ mately a million people. The ter-r ritory includes such principal! cities as Youngstown, Cor\ton; Warren, Massillon, Alliance, Niles/ Salem, East Liverpool and Lisbon in Ohio, and Sharon and Farrell in. Pennsylvania. Beverages of The Purity Bottling Works, a 45-year-; old concern in Warren, Ohio, ac¬ quired by Red Rock earlier this; year, will continue to be bottled under the name of "Purity." > _ FIG Banks Place Bebs. ' V- } A successful offering of an issue * curtail. There were other obliga¬ the company and finally tions of the day came band." time The was $6,500. the choice of the that letting "nature take ing through bankruptcy, in which the bank would probably have lost the entire loan, or put¬ ting up additional money to pay and t the handle the smooth stretches but it . - . of Illinois ss: To all requires cessfully the world traveling Greeting. Smith and to suc¬ the rough of you are many to been together does, and do anywhere as old inside precinct, and when my this road for the first time, while I have bumped along over coperas negotiate places. And since Peggy Myres is hereby certified folks driver . Know ye that John go good a it for 28 ^years, our trip has primarily a study in detours, rather than ant places.' a ' travelogue in pleas¬ of debentures for the Federal In¬ termediate Credit Banks has been concluded with the Prague train. Therefore Americans using that route have to wait in Linz 23 painful hours Charles R. Duma, fiscal agent for the banks. The financing consisted of $39,910,000 1% consolidated de¬ bentures dated Nov. 1, 1946, and due Aug. 1, 1947. The issue was placed at par. Of the pror^ds $30,645,000 will be used to retire debentures, maturing Nov. T, 1946, and $9,265,000 will be used for new money purposes. - As of in Nov. in issuing ...... Peoria County The bank had its course" with the company go¬ case ceremony when some other "State decided to "call bank loan at creditor a couple this license: a a at Wagon Lits for the sleeper to Vienna, I boarded the jammed night sleeper, and I ar¬ for exit when I reached the airlines office American such bank has stumbled into all of them. bought ticket • • , correspondent's advice. Without Russian road pass I to go." In "checked up every who fallen into the many pits I mentioned or that any one have Here indeed was a dilemmaL What I did was to follow a news are . your commodity. responsible if I went that way without a road pass, so I gave u» that idea. currency as well as custom, controls at every border. You leave "packed you. After all, what you have to sell service and they provide is they, are made.".Her- commercial banks Asbury, in his book "The familiar with all Gem any women and you lected when bert in as . But cooperation with the Federal Reserve System. 6. And finally continually strive to develop your personnel and Incidentally, would you consider it out of order if I put in a pay them salaries commensur¬ plug Robert currency there another carries out are lower than those of your com¬ explored will be found along the way. A most val¬ uable one*is the industry studies otherwise. versely, if business is coming to ; despair; the varied credit fields have do to one travels one to had standards under pressure from unwise your When country from any new field until that you ,can ef- reduce you of headaches Is the business which and down with such ra¬ pidity that you must watch its af¬ fairs almost daily. The other day and er little spend the night there, and next day take an early morning train to Prague. But the Army told me they could not be Prague yesterday - sure your one Europe today, or profitable to both the borrowV backs out every hour and says, "What time is it?" ' " - moves up mean- worked, and asked the customer customer, likely to bring your share liberty changes terms which you have conclud¬ ed involve undue risks, review The repair repair ;Yr at are effect Accept and apply the philos¬ ophy that every loan should be fixed and are and does it work?' asked the watch •against the exceptional case that must protect yourself. man replied, Yes, I fixed it.' ex¬ ception and not the rule, but it is you it took if he had fixed it. You understand cases ' A few years clock repair far¬ go profits from speculative efforts.:That goes for both you .. . A month later the customer shop. and deeper until it was hope¬ that 3. repair shop to have The to pocket. my So fectively, efficiently, and profitqbly operate in it. { Avoid all attempts to secure ■ 4. He brought it effort in from great numer¬ rules, but in the don't enter you , a down with work, and suggested to the customer that he fix it himself. So the cus¬ late in other fields, getting deep¬ involved. j'v cuckoo a the Never overreach your ability or organization. In other words, * v such are will ': time, respect the rules. 2. loaded banks. lessly \ makes you endeavor in the v express. mine bought to passed er of that didn't work. it. to to You country and to i of ventures inexperienced trying am friend he ago information lines but "outsmart other fellow and play the game according to established rules. If you don't approve of the rules—then this is still a free - field your hobby of clocks, banks interim required by the creditor The company had used its credit bank can I* had been established if the you ther and last longer if you work rather than against the banking are to be The efforts of sincere¬ interested thought What had happened? financial analysis in, Here is his story:— .'Something which would have been unlikely if not impossible if the indicated experts as with send a losses commercial one to failures. ous caused Public Relations Committee of the American Institute of Banking, tells a story which points up the suddenly, without warning, the business went on the rocks than try For- every that succeeds there reserves. have reserves guideposts, !'■ v'- Don't policy a or field." enter¬ produce unexpected results in any field. D. C. Armanino, Chairman of the National j-eports.4Then its creditors. - amateurs boring financial centers, y The type of "operation and fluctuating credit requirements indicated clearly the need for interim opcrating and balance sheet state¬ ments supplementing annual au¬ dited reports. ; Bui the operation been 1. doubt into commercial throughout the state and in neigh¬ Jiad such adequate course, successful. established - Of credit and in order to needs, banking con¬ had nections the profitable more become times, its supply stock¬ your of is You must secure, or yourselves southern states. business called our of its nature give observations which you may call good money after bad simply because it felt it could not V afford to take the loss currently. f ; : , to more two or evidence benefit presupposes .''V'' ' ;r \. illustration an the me pitfalls choose: de¬ a —take your loss and turn your ef¬ generally, and from business to business de¬ ■Would be in order:— face such conclude by inviting attention to a few general your tures work out that way, not at all con¬ consti¬ credit information time, depending Now let or Europe (Continued from page 2080) flexibility, I Czechoslovakia, Conclusions . make mation, then, let me urge you— not yet paid. You get the point I am sure—not that all such ven¬ get out of the commercial bank¬ clusive Within . a long story short—that "My remarks have consisted finally had over $60,000 in¬ largely of a statement of occasion¬ in that business' and to ally overlooked pitfalls in fields of date, after 10 years, $15,000 has commercial banking which many been charged off and the loan is of you have recently entered. en- :: v,. not prepared to are chose interest commission.> comes I am to marry 'em good and date 'em back to kivver accidents." time what to miss the for passes connection third a rate hotel, I was told. The Linz route, however, requires no Russian road ing Prague to — means but circumvent an , 1, 1946, the total amo""t of outstanding will" be debentures $316,565,000. Vienna to of reach¬ Black-CIawson Comply obvious ef-, the road-pass system—is to from b,y York, pass. An alternative fort New Russiansgo by bus Bratislava in HAMILTON, OHIO—The BlacrkClawson Company is a securities business. engaging in 1 THE COMMERCIAL & 2114 FINANCIAL CHRONICLE The Boom Is Here be realized The DIPs Struggle for Peace 8 r.v Thursday, October 24, 1946 (Continued from page"2073) that many industries a favorable pattern Will have been (Continued from page 2072) and trades are still suffering from established for other important most exactly the same extent as a labor shortage and will be more labor' crises in the critical next they were by World* War I. If all inclined to- add' employees? than to six months. other things were equal, we would drop them, for a time at least. The obvious ■" signs,* however, expect about the same degree of Total wage" payments; therefore, deflation as occurred in; 1920-21. point to exorbitant demands on should decline less than industrial But other things are not equal. Chrysler, to an extended Strike, production. ;; ; ; f i r ah unsatisfactory ultimate The government is committed by and :i Dividend and interest payments perhaps requiring a statute to support farm products settlement, the United' Nations as good and bors This ':i': isolation.. war. the United the talk Of war. No* nation wants Assembly abandonment by Every nation needs peace. States of a policy of F TO' avoid war-and1 rumors symbolizes 1 this; hall will joinT me in rejecting of the meeting that every deleg'ate in 1 am sure neigh¬ friends. warm .77 hanger of 7"*' countries The overwhelming majority of the1 American peace regardless party, support the United Na¬ people, as and the peoples- of all war must not only cherish ideal1 but they must an develop- means of settling conflicts probably go- down relatively of further - increase in automobile' prices at 90% of "parity" with-the 1 between nations in '? accordance 7r less, for corporations- have gen¬ tions. prices of things farmers buy. If prices to: an extent that may erally been very conservative in ■' They are resolVed that the ;with principles* of' law .and justice. shrihk the demand for cars. Such such supports are successful, they their disbursements to stockhold¬ United The difficulty is- that it is easier States, to,- the full limit of a pattern would point to a repe^ ers. will hold the inevitable deflation" Entrepreneurial income, in¬ its strength, shall contribute to to get people to agree upon peace tition of the labor difficulties that to about half that suffered 26 years cluding that of farmers; Will be off the establishment and mainte¬ as* art ideal than to agree' Upon slowed down our industrial ma«ago; In the earlier era- moreover, quite sharply. Undistributed prof¬ nance of a just and lasting peace principles of law. and justice* or to chine so drastically in the early farmers had greatly Over-extend¬ it's of corporations may likewise j agree to subject their own acts to among the nations of the world.* of this year. Further¬ ed themselves creditwise. They months shrink widely, but this is a rela¬ ...However, I must fell you that the collective judgment: of man¬ (and their bankers) learned from more, it would mean that the dis¬ tively small item in the over-all ' / --7 .•*;*; the'American people are troubled kind. created which that experience, with the result locations already picture. Our estimate is that; a by the failure of the Allied na¬ The Path to Agreement V that farm mortgages- have been could conceivably be corrected in 24% drop in industrial production tions to make more progress in1 But difficult as the* task may be, reduced1 by almost $2 billions7 time by an increase in productive would be translated into a de¬ their common search for lasting the path along which1 agreement since the war began" and farmers efficiency and1 relatively moderate cline of only about 20% in na¬ peace. " / . may be sought, with hope of suc¬ are in the strong^t financial po¬ deflation in* certain fields, will be : 7 tional income, bringing that fig¬ • a;; cess, is clearly defined. - r ; ,'v sition in their history. There won't extended even further. ure down to the neighborhood - of UN Not Concerned with Postwar be the wave of foreclosures and In the first place, every mem¬ $135 billions from the recentdevel The Cross-road Before Us O v,i'7'7'77^■; Problems 7;• .4- .;:''777 ber of the United Nations is> le¬ bank failures that accentuated the of close to $170 billions. (These In other' words, we stand at! a It is important to remember the earlier deflation. gally and morally bound' by the references are to annual? rates cross-road:' The sensible path intended place of the United Nd« Charter to keep the peace. More Finally, urban buying power, rather than calendar year totals.) leads to a relatively painless cor¬ which plays an important part in Another widely used index of hl2nSTrntoward this goal, specifically, * every : member*: is rection of the excesses* already The United Nations—-as an organbound to refrain in its internadetermining farm prices, is un¬ general prosperity is disposable committed. The other leads to a ization—was not intended to' tional relations from the threat, or likely to slide to the extent it did income; which is the total of in¬ piling up of further excesses, and settle the problems arising imme- use, of force against the territorial 4-*in 1920-21. : come' payments less ; taxes. It is a strain' of wage-cost-price rela¬ currently running at art annual dlately out of the war. The United integrity-: or 1 political -independ¬ Farm Price Drop Imminent tionships the correction of which Nations was intended to provide ence of any state.7 rate of arourtd $144 billions. The would- require a major economic the means of The fact remains, however, that maintaining inter: will- . • - face we a severe* drop , in farm readjustment. It would be Despite prices and farm' income. the supporting elements much as 20% the as to 25%. When you one-sixth remember that close to population is ort working the if nature crying a path second our faith has been worn have chosen, but mentioned, it couldvrun just of I shame were in human so thin in circumstances of set described neighborhood' Consumers' $115 of • billions. part to black market operators. Once building materials 7 are and that the current excess of pro¬ flowing more freely, perhaps by next summer, this situation will phenomenon The mere and- prices tion to new homes will come down 4 u of these prob- {he Charter 'the* of Nuremberg , war, just as many economic meas¬ urements in 1921 were well above duction over consumption is a current rate of con¬ sharply. Used houses Will decline In view of the well-adver¬ correspondingly; indeed, there is ity. to believe that the peak of tised large deferred demand for residential prices has already goods and similar large accumu¬ been passed. Moreover, many of lated buying power, we would those who have been forced to expect a drop in consumption to exorbitant prices will walk away from their mortgages when be small relative to similar drops building costs shake down. Regardless of the beneficial longer-range effects of this cor¬ rection, its' shorter term reper¬ for pay in previous depressions. Assume a freer hand tried the' bar before of interna. t, ™ ^"ss&sswrs xsaisfiscsst tlS*' of the world know setWements have- S mS l,lat' thet*e cari be peace tfd5unlas® « « Peace with justice for peace' j „ bulw a t"?,? our more" to race; creed or color- • search for everlasting rest upon the four essential secondary and freedoms. lasting postwar boom. T-w* set the stage' for a toSr!S all—justice for small nations and for nations andi justice'for these settlements individuals without distinction! as permlnmt peace I submit that and peace, ^'r^rd^he J. four freedbhis. attainment of the :shall attain freeSbm from oro Returning Competition all, we must prepare for sumption would cause a drop of two problems that have been al¬ more than 7 % in productive activ¬ most wholly absent from our op¬ reason opportunity and to carry out its long*range task of tional justice' L those of any year before World' providing peaceful means* for the i adjustment of future War f. Relative to the present, some of which might arise out of however, they look like hard times. ; ft' would' be a mistake to dwell too long upon the indicated diffi¬ culties ahead. They will serve a own ^'rAnnnsihillffM ?m«T *' The Pe°Ples highly useful purpose, we believe. of p'eak prosperity. adjustment of produc¬ the ter differences)WJ^ 'Pfar? « for * , of high costs. Our in¬ and August combined,; roughly vestigations con v i rtce us that 7V2% of total manufactures were1 prices of new homes have ad¬ added to inventories,: largely of vanced out of all proportion to-the goods in process. True, inventories rise in legitimate materials prices are still by no means excessive in and building wages. In part, this relation to sales. The fact remains, jBy bringing, down the price of is due to excessive profits^ taken nevertheless, that: they are pro¬ food and building, by halting the by builders and subcontractors; ceeding rapidly in that direction,* perennial demands of labor for in part to the waste entailed in that any important downturn in1 benefits oiit of keeping, with pro¬ delays caused by shortages of consumer buying would adversely ductivity, and by increasing pro¬ materials, supplies and labor; in alter the relationship with sales* ductivity per man hour, they will corrected, settlement spending,, recently at t Ih the second place, I" remind nre after you that23 members of the United leen madfe. Nations have bound -themselves by iv. U ah; annual because largely + rate of $122 billions, +^lb^tely ^)ns^^di Tri^urtal to the principal that to negotiations among the years- that we* cannot dis¬ might well drop to $110 billions. tAllies- planning, initiating of waging a regard this possibility. of These figures still add up to a ,as distinguished from the United ■ War aggression is a crime Assuming that organized labor high level of activity relative to Nations. This was done l'fi order jlSgainSt humanity for which indito takes the second road, how severe give the United Nations a bet- viduals as well as states shall be that which was known before the recent farms, this is not a prospect to be a decline is to be expected? The brushed lightly aside. A third storm' signal is to be first consideration in arriving at found in the building field. [Resi¬ any estimate must be that we are dential contract awards have al¬ now producing at a greater rate ready turned downward, - partly than we are consuming; For July be t might bring it down to the above- - Above erations in recent years. The first is the return of competition and the second is the reappearance of business Both failures. sent challenges men. The first to will you. as means pre¬ credit that you will want, These to nrp are freedom and are which niPrtf?pH p edg from a the United brings closer to nation tT nfrT Nations nndpr thp Pharfpr undpr Lher fear. freedoms fundamental all . freedom of speech, freedom of refreedom from want. tne^Cnarter. ^an(j To the attainment of these free-j Along this path we can find5 jUsdoms—everywhere hv the world— ttce for all, without distinction-bethrough the friendly cooperation tween the Strong: and the weak cf all nations, the Government and among nations, and Without dis¬ people of the United States are crimination among individuals.: dedicated. * l."-After* the peace has been made, credits, ; The fourth freedom—freedom I am convinced that the United 10 %. That 10%, combined with for every such refusal will mean from fear—means, above all else; Nations can and will prevent war say 7% representing the adjust¬ a loss of business to your firm at freedom from fear of war. between nations and remove the ment of production to present a time when every sale may count. This freedom is attainable now. fear of war that distracts the peo¬ cussions could be disturbing, un¬ consumption would make a total The second means that an equally Lately we have all heard talk ples of the world and interferes 1 v settling the construction trend of 17%. fine discrimination must be exer¬ about the possibility of another with their progress toward a- bet¬ for a time. However, economic trends al¬ cised in granting credits, for the V7?) ^7;:'a.4 world war. Fears have been ter life.'7$47^ most always go to extremes. In risk of losses through bankruptcy It is difficult to measure the aroused all over the world. • 4 7 The war has left many, parts of all probability production would will again be an' extremely live repercussions- of the deflation we ahead in these fields. for Much the a moment that it is only have to exercise a fine degree of , discrimination in refusing time fall below the reduced one. After the last war business War Fears Unjustified consumption. The huge failures: were depend upon (1) the extent very light through These fears are unwarranted of further inflation of wages' and, inventories now existing would be the middle Of 1920; after which and unjustified. 7/7,/■•.,7.: ?;■ 7.4 eaten into. Assume that the sag consequently, of finished goods they rose" from an average of of production below consumption around However, rumors of war still 500 a month to" almost prices within the next few months and (2) other labor developments should be 7%. That would point 2,500 in December, 1921'. A repe¬ find-?willing listeners- in certain to a total drop of 24% in aggregate tition of this places. If these rumors are not in the near future. pattern lies ahead production of goods. The Federal as- the business enterprises1 now checked they are sure to impede world recovery. Union Demands Crucial Reserve Board's monthly index,< 77 7' 7 being formed5 meet the first severe I have been reading reports The tip-off on the first may be now standing at 178, could bog tests of a: competitive economy. down to 135—no mean drop. This from many parts of the world. Credit men; will' have to go back provided by union demands on is not advanced as a definite fore¬ to These reports all agree ort one work! '7777\, Chrysler and results of negotia¬ tions there. George Addes> Sec¬ cast, but seems- to us to be well ■MM major point—the people of every nation are sick of war. They retary-Treasurer of the UAW, said within the realm of possibility during" the next year or two. know its- agony and- it's futility. a few days ago, "This month we f No' responsible government can present our demands to the Wages on One-Way Street Chrysler Corporation and we shall ignore* this universal feeling. \j Such; a drop in industrial pro¬ fight for their realization with all The United- States' of America1 NEW ORLEANS, LA.—On Nov. the power and militance at our duction would probably be trans¬ has- no wish to make war, now or lated into a somewhat smaller de¬ command." From all indications, 1, Walter H. Weil, Walter H. Weil, in the future, upon1 any people cline iri national income. In the Jr., partners in Weil & Company, anywhere in the world1. The heart too, Chrysler Will be equally first place, it is extremely doubt¬ and Sam Cahn will bC admitted tough. The resulting atmosphere of our foreign policy is a sincere ful that wage rates can be re¬ to is far from reassuring. partnership" in Kohlmeyer, desire for peace. This nation will duced. Organization has made If this should Newburger & Co., Carondelet work patiently fov peace by every prove* to be them flexible in only one direc¬ Building, members of the New means consistent; with self re¬ merely stage setting' on both sides, Whatever decline York Stock Exchange. we could take" considerable ert-^ tion—upward. spect—and security". Another takes place in wage income, there¬ It is understood that Charles couragement. If the union de¬ world war would shatter the See level will of , Newborger ' mands are moderate and a reason¬ able settlement is arrived at soon; To Admit Weil & Calm fore, must be largely the result of Loeb, unemployment. Moreover, it must a; partner in will do business as Weil an & Co., individual. hopes of mankind and completely destroy" civilization as we-know it. the world in tufmoil. Differences have arisen among' the Allies.v It will not help us to pretend1 that this is not the case. But* it is not necessary to ferences. exaggerate" the dif¬ ; For my ? part) I believe there is ino difference of interest that need stand" in the way of settling: these problems and settling them in ac¬ cordance with the principles ' of the United'Nations Charter. Abqve all,, we must , not' permit differ¬ ences in economic, and social sys¬ tems to stand in the way either now of peace, in the future. or To permit the? United Nations tb be broken ihtp irrecortsiliable parts, by different political philosophies bring disaster to the wohld. would' So far- as1 (Germany and Japan concerned; -the United States is resolved that neither shall again are* become a cause for war. We shall continue to seek agreement upon peace terms which both Germany ensure that and Japan remain disarmed, that Nazi1 influence in Germany be destroyed and that i" •'.►■*' \ j / Volume 164 Number 4536 THE COMMERCIAL & FINANCIAL CHRONICLE 2115 • the > • the war lords, in Japan be eliminated forever. ; The United States, will continue of disputes as well as them. The exercise of neither: veto to rights nor make peace of power 1 seek settlements arising from just to all states, large and small, that uphold the /; human rights and fundamental freedoms? to which the Charter the that war are- da not '': contain conflicts. I• A ; .; y.' * between peace based the seeds of the v: - quick a new and '?'! "/'■ '£•(' nations- tfie "ravages of " it is it able to no force its attainment at the earli¬ the est possible, date. tween nations.-, tion/of the " public methods ; of settlement of - - , /Removing War Settlements. All-Important . the Nations fear of the We na- tions the reach to agreement ;v peace, settlements. • •; First, ment. - a n establishing of ful energy, that for peace¬ use ^ v; There must be accommoda- tibn by all the Allied nations in Wiiiclt. mutual't adjustments- of . ; lesser national interests . in order to > the serve tefrest of all in peace, . are made J These t and \ agri¬ must also prepare and strengthen the United Nations for the tasks ;■> Organization Organization; be can . is that ahead lie ments have after the settle¬ of rope. .. im¬ an is essential over be of that created in from UNRRA caring new for as been made. re¬ on resettling the refu¬ displaced persons of Eu¬ # ^ 'All, member nations, large and small/ are represented here as equals. Wisdom is : nations r large able mo¬ to receive those; toward few years! toward: the: realization -of anotherthe four freedoms-* freedom from want. the upon bers , ]The ; V highest obligation of Assembly a that' will be lasting a, peace justice. -La seeking unity we should not be concerned differences about freely. ' should which the this end. United Na¬ has than the world ' • the of any who, are fearful effects of free and 1 frank discussion l- The- the United Nations. in United States throughout •all the humanity world, of- us the- fullest bly and in the Security Council. demonstrated" in The United: States has: already u . of the more the leather the an(j enjoyment of life. a . ,, mean we do there are people . •• t , assBVAaa PVar^ii .?SLn ^ f not our in !hi?! . torce. Now it point population this is worid's big nations. our country! only 6% +• ge P°Pulatlon> +a la^e+ ^orkl.nf is true that in 0f that. tioned; recognize ^ ctatPS! fh . and diets,, people, is our the of one the of one But,.as menpopulation ebnstitutes- o£ the total world papu¬ mean that there numbers foreign are ger competi. have high standards of living For mstance, z not long ago.; I drove one But on share of land> in such cities and tween and ^ [iflua^e ^ejng reiation number expianation a gome of seem for our the. be- of an in- q^ewell- countries Where j have recently been have wide lands and a density of popurlation less than our the even and habitants, does not j what.ywould be course,Hsuch of comparison disregards factors of fertility, accessibility and climate, Nevertheless, the extent of our while, a- fraction of?land> people including the ter- and area.. This figure corresponds closely to our 6% of world population> so that we WQuld se^ io have no m0re than an equit?bie e? ver^ the . land parts of the United States. Many of them had four-car and five-car of , is possessions, actually comprises but 7 % of the total world that drive; They were houses such 1% , our United states, as garages . pvnini?!nM+a^dvanceid the to explam living standard stories of the best residential sections; of a large! Sdutli; American cit5^ : It is a beautiful city, and I have never k^mes than I saw' at thou extent of our country—the amount of land area<, Again it Ts tme that in this respect we are, one of the large countries. However,, the con- very through several streets in where, , . ^ who and intervals SsnSlsS^eof tanl, _of individuals countries level not ,infreauent - not are those where the of people exist at a bare subsistence republican form • indiaj masses chief 0. m extreme, At the other ours. Belgium is a country which has little land and is densely populated. In both instances the granting of large loans andt credits bers of the and ; and direct many ways its among peoples is ewn, nec¬ exchange of grave concern about economic re¬ essary to this task. The United information, pro¬ construction that will repair the States, therefore attaches great iimportance to all. activities motes/imderstanding and there¬ damage done by war.' " :r' designed fore contributes in the. long run ! We have tcr the removal of the fear, of war in and United some of the causes of war. ■/ The .United States believes that the rule unanimous of accord _ Security Council im¬ poses upon these members a. spe¬ cial obligation. ' in among the five permanent mem¬ free afgymentsr and ■\ t^coUon.. Weuse"^' i upon the high level of national .wealth does not a pledged under the United .knowledge rariinQ the extremely wealthy conHying standard is markedly lower a very small fraction of than ours, the total population; Below this' So although size of population, relatively ; small wealthy class, and of land area; may be factors ,to break down barriers to mutual however, the pattern differs greattne paxxein uin accolinting for our living standunderstanding and to wider tol¬ noweyer, ly between the United States and ,h , ard, they are nott off fundamentai fundamental erance. other nations. Here the great ma¬ i.;.*'".1;/ •, importance." The United States will support jority of people are in a middle the United Nations with, all the economic class which has a very jj„ Perhaps the most widespread resources that we possess. misconception as to the basis of comfortable, The : tt, Emphasis , great importance to the principle of free discussion in this Assem¬ in made 'to the of sssss built the premise that since wars rvery small group at the top begin in the minds of pyramid whose base is a men, the defense of peace must be con¬ tude Jiving m structed in the minds of men, and poverty by our standards.. ^ that a free In those countries, as in exchange of ideas and cooperation. norm magnitude pertain to nearly all the materials which humans need for health re- capita goods far per upon attaches Need for Economic Reconstruction a Cultural Organ^- abroad may live m beautiful ization, which is meeting in No¬ homes, as much as 90% is likely vember, is a recognition of this ,tO hve im hovels., The usual patfact tern; is one of a very wealthy but That organization is self-interest alike demand of and are al, Scientific . the view of 'year iss*5 'sa&rjss siderable believes ' look us world, and onethird of all the soap. Percentages of a similar order of quantity of consumer above that obtained by any other not The United Nations Education¬ ■" imporIn«. these constructive tasks 1 tance of freedom-of speech to the 'which concern directly the lives cause of peace, f do not share and welfare of human beings : that every challenges to Nations Charter, great opportunity lies before us.. clear / Americans tive form of economy. mation—the right of the people to know--as among the most impor¬ tant of those human rights and fundamental freedoms to which had before. ever A is ceive . States to the- shall succeed. we 0f coffee, half or rubber, 35 %' of all tanned J of government and to our or We regard freedom of expres¬ sion and freedom to receive infor¬ ' • demonstrate work to annually. It these concerted; effort must be made to break down the barriers to a free¬ flow of information among the na¬ tions of the world. we expressing The United States believes that this Assembly .The,"United /:' toward of the political • food, shoes, shirts, dresses, soap, gasoline4, electricity-—used per cap¬ Similarly, the> figures cited- do completion, this Economic and Social Council, its commissions^ and related specialized agencies. 11: provides more complete and effective institutions through the unity of/all members in be¬ half of together structure help 42% situation.) SW0Sf is meant services, or educational facilities. To improve the lot of Free Flow of Information Needed tions in' this, field is now nearing man¬ to promote way as because it is founded upon , this is to speak for all kind in such / The to Aerators, medical refugees who do reasons ofv world marginal regions, there are many who do not have proper religious, belief. of work supreme deliberative/body. homes for. Charter pledges the mem¬ the - United Nations to The .formation of collective policy. * This Assembly is the world's seek we everlasting la standards!* iT'f common'lation and yet we/se a far ^ knowledge that in the slums of worid's® SutputVmajorhcon°sume? not wish to return to their former war • equally nations judgment to bear the* fear of remove progress can be made in the next bringing constructive thought and wise to from the world unless substantial mercy,., guide as a11 the automobiles the quantity of consumer goods— our , The United Nations: will! not be size/ Small contribute can with; the. / the not or fortunate standard of living By V »,y ' nopoly of strength ™ ; There will be similar tasks, magnitude, in the Far forces adequate to prevent, Organization and in acts- of aggression. joining with other nations peace With His riches, or that immigration here has been the goal of generations of ambitious, adventuresome folk from other lands. ' 1 year and the United States to authorize this country to do its full part, both in financial support of the Inter¬ national Refugee' Council may have at its disposal peace us world. prfwhoinhaliftbS Enfted' ita great East. agree¬ and sustain curfes^ afto wito '' as possible in the tasks gees -and of It Organization time to take order that the Security wisdom and bring m-d6 feelings oicondescension riot with not ■ for * preparation press ments in world well-being. wfft \! ' Assembly can do much outcome. < The United tdward recreating, the spirit of States considers On behalf of the United States this a matter of great ; friendly cooperation and toward I can say ;we are not urgency in discouraged, the cause of ;> reaffirming those principles of the f We shall continue to? seek restoring peaqe and agree/ in th^ cause of ? United Nations which must be humanity itself. apment by every possible means. i I intend to urge the plied1 to the peace settlements. It T At the same time we shall also, Congress of - the us fx!stsbln°EuiopLWhiCh^ ly tions,. helping; each other oh a basis of equal, rights^ In the field of social reconstruc¬ this the upon their another specialized agency in this field—the International Refugee give to It. The future safety of Nations, and of every This of possibilities patriating nation, depends life that all peoples \ ; The Assembly now has before it forr adoption the- constitution of United partnership of May Almighty' God, in His in¬ „ perma¬ Why Our Standard Of Living Is Highest a realized only by the cooperation of. members of the United Na¬ the member mon nations develop development early the a peace and coim- of areas all to portant step forward.' we among the peoples for their common in¬ dustrial edents in the law of nations. Each can security and that able economic will be^ worth1 everything in* and good faith that finite as partnership^—a '* We believe Health per¬ peoples. porary expedient but nent areas, be without setting fundamental prec¬ severance greater in- Per- a tion and advancement the comple¬ tion of the Charter for a World ments that will remove tiom by , the deadly tions to respect *the legitimate in^ Tear of other weapons of mass de¬ •'i terests of all "states ' and act as struction, in accordance^ with the good neighbors toward each other, ; same resolution; *■ •• ' /. ivfr '.Lastingv agreements:-, between? Each of these obligations is go¬ ; Allies cannot be imposed by one ;V nation nor can they be reached at ing to- be difficult to fulfill. Their .fulfillment will require the ut¬ the expense of the- security; indemost in perseverance and good Ti pendence or integrity of any na.^ faith, and we cannot succeeed i; being The American people look upon the United Nations not as a- tem-r : agree- only, in accordance the Allies will not help us. Agreements designed to remove with the Assembly's unanimous resolution of last winter. the fear'of war can. be reached :> Secohd,. we must reach agree¬ only by the cooperation of naamong London cultural modernization. purposes United' Nations. (Continued from page should be able to 2074) reap the bene¬ ^ Yet/even those countries to the fits of their with other, nations. Let own? labor and of: south have, by and their, own natural resources. large, an aver- at a few., ^ dge living scale no better There are immense than, ty- Only qo/ q£ +ne world'*? possibilities in many parts of the world for ; international atomic will will ensure its d 'r: misunderstanding now well-developed healthy fulfilled.. we must reach an controls Propaganda that promotes dis- t t js u s t r on remain to be war in believe! own.. be¬ toward the removal of the fear of first requirement is for the Allied less should - Fear: Organization; the world. Two of the greatest obligations undertaken by the United Nations United the war, ' •: the to act together to re- are the move of members States Tt must be the determined pur¬ of all of us to see that the United Nations lives and grows in the minds and ,the hearts of all pose but the indus¬ trial and agriculturalprogress of * If United creation; of the International devastated chamber to disputes at¬ highest importance to paratory Committee. / / ;;;; ; This country, wants to see, not only the rapid- restoration/ of applica¬ peaceful and council a the ,v-.v,.v: • , The discussed function- continuing < ■' ". structure. Trade- continuously, the Security Coun¬ cil represents a most significant development in international re¬ lations—the !)y- must \ complete we both in the making of the peace settlements and in the fulfillment of the long-range tasks of. the taches the the are / Now ; can .*■ is The world is crying for" a'just and durable peace with an intensity that must Peace United Nations. fully qualified for that Because war. , rights: purpose.•' from recovery majority brought into relationship-with: the acceptable because they are just to all concerned. The Security Council is intended to promote that kind, of agreement on world and settlement for airing universally justice will make possible an early improvement in livirig conditions throughout the I promoting secure. There is substitute for agreements that V-' pledges all its members, and. that •{y for means This obligation is to seek and reach agreements that will-enable them and. the Security We every participated measure Nations have separate in actively by the this end. taken such > of action our as. the reciprocal ization, the International; for ment and. the International Mone¬ Charter toward -their fellow bers. of the United mem- Nations and toward the maintenance of peace, it is- essential; to the future of the United Nations that the mem¬ bers should use the Council as a Reconstruction and Develop tary Fund, members of the United Nations have proved their capac¬ ity for toward tives. constructive ..cooperation economic* objec¬ common In addition, the Interna¬ tional Labor Organization is being tion of necessities- and uries , The , Bank yes, even high, liv¬ the ing standard. Nearly everywhere abroad the widespread distribu¬ -the The. use of force or the threat of force anywhere in the world to break the peace is of direct con¬ cern to the American people. Through the' establishment of the Food and? Agriculture Organ J Council " , trade-agreements^ program. 1 ties ta fulfill the responsibilithey have assumed under the , . . addition national renewal taken toward stitute course of which marks small lux¬ economy our " history has- made one of the stronger nations of the world. It has therefore placed iii- conspicuously lacking. -- us special responsibilities to our strength and to use rightly in a world so interde¬ pendent as our world today. upon us conserve it The American people recognize these special responsibilities. We shall do our best to meet them, American belief been living standard that our is has country exceptionally endowed with We do, in fact, natural resources, but natural resources; have many let us examine a few to see Higher Living Standards Not! Due f we compare in this respect to Natural Resources the rest of the world. how with . While precise figures are not readily available on a worldwide scale, there are sufficient statistics to provide revealing indices of the comfort and well-being of. the American people as compared1 Of the. total amount of poten— tial water-p'ower for generation of electricity in the world, 5% is available within our borders. On the basis of our proportionate land (Continued on page 2116) THE COMMERCIAL & 2116 FINANCIAL CHRONICLE schedules and introduce new con¬ Why Our Standard Of Living Is (Continued from page area tle and less teriais population, this is a lit¬ than what might be re¬ share." "our garded, as veniences if it the From is this 2115) another is standpoint, ruptcy of the inefficient—even if, thereby, the progress of the effi- seedlings would have taken eight years. But his competitors ap¬ peared one day with $2,500 worth cient of young trees which they set out a more with their prices, all others are compelled to follow suit, whether they can 'af¬ may - most with oil as an energy But the oil industry, which active in scientific re^- search, is not in despair. It be¬ lieves that ample opportunity will be found for the use of all energy plentiful consumer goods, of production power whose plot was swept by fire. To obtain salable stock again from compete source. maintained that they are primary basis of competition. atomic meet to travelers Tomorrow Highest from for a world total of When it seemed nature and that, even be should 7% of the how can we account for the fact come products— that the United States, 'which sible to find new and useful em¬ Just about our share and no more. must import virtually all its tin, ployment for the oil thus dis¬ There are many essential raw turns out 85% of all the food in placed. materials of which our country the world preserved in tin cans, In American corporations most has no indigenous supply at all, or that well over half of all the of the people in top positions got or only a small one. We have lit¬ tires in the world are American- there by virtue of selection in tle or no natural rubber, tin, made although there is not a sin¬ competition with other individ¬ nkkle, manganese, mercury, co¬ gle rubber-tree plantation within uals. Few of them started out at balt, industrial diamonds, or quartz our borders? the top or were born into their 'V'''[/■ 'V : crystals for electronic equipment, jobs. They have had to sharpen All these are vital to an industrial Profitable Use of Resources their abilities in contest and have civilization. Our-indigenous sup¬ Possession of abundant natural had to prove their capacities. The ply of lead,^coppet,'^chromium, raw materials can no doubt con¬ former board chairman of Jersey uranium, linseed oil, bauxite, and tribute importantly to the achieve¬ Standard, recently retired, began a host of other essentials are low ment .of a satisfactory • living his working career in a pumping In proportion to our use of these standard, but any hypothesis that station of an oil pipeline company materials. it is the determining factor is where his duties included sweep¬ In this connection it is interestclearly not- tenable. * ing the station floor. America's trees comes forest of Texas,: speaks of iron deposits, coal veins, under¬ University ground oil, etc., as "neutral stuff," and terms them "natural re¬ sources" only after human effort and skill have been applied. the proved oil reserves and have We world's about 35% of coal reserves. of the volume of iron ore lying in American earth vary from 25 to 50% of the world's store, These (figures appear to 50% of the known I Estimates the I evident, tem. . made in New but England are son ' the other. built largely petroleum. automobile re¬ quires about 30 pounds of rubber per year. Brazil has some coal, gasoline; that means On the average, an and their among has iron ore deposits are the richest in the world. It considerable areas favorable that lead to action." 1 already in ex¬ istence and possibly wishing to expand their service to the public. It was suggested to one of our af-:* filiates there that they could increase was sys¬ is framed and tions cartels, exercised or by govern¬ associations in trade and collaboration. Let cite me some examples. As . suppose a corporation wishes to put out a new line of goods or a young man wishes the to for kind open retail public. a shop of some merchandising to In several European countries neither would be allowed to do unless they could prove so such a busi¬ ness previously, in the same ter¬ ritory, . they had operated If the young man could not fur¬ such proof, his shop would nish have to be operated by someone previously operated Failing these re¬ else who had a similar shop. quirements, he could not go into this be business particular this in ser- particular territory. Vested inter¬ ests are not confined to "big" bus¬ iness. Throughout the industrial fabric the division of existing bus¬ This ' found to was impossible, since all soft-drinlc licenses vice in the stations areas where had operated distributed to others. The ser-*5 been existing soft-drink merchants had in effect : purchased the right to do business in the area and at the same time had acquired a protection against competition. When it was further that the drinks might be given away as an extra feature of the stations' service, we were suggested informed illustration, an from their revenue to be serviced. by governments, by trade associa¬ ments the vice stations by selling cold drinks to patrons waiting for their cars , and This affected businesses only in broad principle, as it is in this country, but in detail. Reg¬ ulation : somewhat differ¬ a ent sort of trade restriction. what American 4 - Again, while in South America, I encountered actually had ' • this also would be im¬ Giving away the drinks would be interpreted as lowering possible. the price of gasoline to the cus- tomer, and prices in that country were fixed by the government. Such restrictive practices amount to birth control in business. They allow not do new a f) large number of businesses to come into and then allow the public by being their patronage decide which shall swv: vive. Control is taken away from <; ernment. The effect to put people business And on who can are hardly be; already in their mettle. what is the result of the' „ , , The products and services and to keep ; * ' hampering prices down. this philosophy as it af¬ \ Competition in Oil Industry • "Economist" London re¬ ferred recently to the effects of It said: fects British business. "It is difficult to deny is a that there sluggishness about British ac¬ industry, with which I particularly familiar, is espe- p cially competitive. Each one of' scores of companies is striving to \ The oil am price, that is to the ben¬ of personal behavior soon finds tions, public and private, that does efit of the general public. Mis¬ himself under the strong pressure not exist elsewhere. ; There is develop new business and to hold' souri will take part of New Eng¬ of community disapproval, and no no active discontent, but also no it. As a result of such effort, theland's shoe business, New Eng¬ business organization can with sparkle or enthusiasm. . . . There price of ;* gasoline has declined land will have to develop some impunity gain a reputation for is a conspiracy of labor, capital from about 30 cents a gallon' irt other activity to fill the gap, and and the state to deny enterprise 1920 to less than 15 cents cur¬ cheating or gouging. the resulting diversification will reward. The embattled American competition is tough, its rently, exclusive of taxes. And ir* no doubt be ultimately to her but it is not without rules. trade association movement has . Here also we have ., industry competing with industry. Oil com¬ petes vigorously with coal as a In response, the coal indus¬ Most of these rules are unwrit¬ ten, tacitly recognized ones. But a number of broad principles have . . locomotive that burns powdered coal, a smokeless household stove to use bituminous coal of even expression in law the or Sherman Clayton anti-trust acts. our otherwise conr- plain loudly about these laws, I • ■ the meantime quality and service (put) any attempt to reduce costs to the public has steadily gone up. prices by greater skill or en¬ Quality as measured on the octane ' terprise under the ban of 'destruc¬ scale for example, has gone up tive pecuniary return and by his own colleagues of any social "The same process reward.... has been ap¬ since 1928 ing), from about 60 to 78. Authorities have estimated that this quality improvement alone has American public hun¬ dreds of millions of dollars through saved ... .. . i2fii in' ziSffiB . - (while price was fall¬ the improved engine performance. By contrast, in one South Amer¬ of oil. It is the the poorer grades, and a new fully believe this occurs because of plied to the wage earner as well. ican country, where the petroleum original home of natural rubber. automatic stoker for home'heat¬ The whole effect of the growth their ambiguities or when they business is under government Yet Brazil has one car per 342 ing. It is fair to wonder whether feel that the laws are being un¬ in strength of the trade union monopoly, gasoline retails at the persons, while the United States that research group would have movement—indeed, one can say fairly interpreted or administered equivalent of 55 cents per gallore has one per five persons. Fur¬ been set up if the coal industry and does not arise from any dis¬ its deliberate intention—ha§ been including tax. In any part of the , ther, all Brazil's autos are im¬ had not felt the pressure of com¬ approval of the laws themselves. to divorce the worker's income United States similar grades would ported. Some are assembled, but peting forms of fuel. The Federal Trade Commission from any dependence on the ef¬ none is actually manufactured sell for 1.5 to 20 cents a gallon. Many of us have witnessed the Act and the Robin son-Patman Act forts he makes. within the country. Like Brazil, A further consequence of our growth of transportation by bus are other instances of rules of "The growth of trade associa¬ the Dutch East Indies are rich in and, private auto all but eliminate fair play in our system. : tions, of price-fixing and market- system is that it puts a premium petroleum and rubber and have the electric street car. Today we The spirit of sportmanship in sharing devices—the whole appa¬ some iron ore. But there are few upon efficiency, which leads to see the airlines competing-with ratus of protection, in fact—is in¬ our competition was illustrated by autos there, and none is made low prices and high wages, which, the railroads, and we see the rail¬ a recent newspaper report about spired by nothing so much as by locally. > the desire to prevent the bank¬ in turn mean that more people a Considering natural raw ma- roads, in turn, speed up . their : nurseryman ia .New; .Jersey for the presence • v and and Although businessmen sometime's . . competition.' The industrialist fuel. who discovers a way of making formally established.: For exam¬ try has set up a research organi¬ better things more cheaply (which ple, the American conviction that zation which is working on such is what he is sent on earth to do) competition is a good thing finds developments as a gas turbine is deprived by. the state of all been framed in : complete but fair competition that American business practices—the system in which one of the car-r> ; dinal principles is that there' A importance than should be as few obstacles as pos- f the creating of new opportunity. sible to the starting of new en¬ Producers, wholesalers and re¬ terprises or the expansion of extailers of a given product may be isting ones? The result is that banded together in an association. many pebple do start businesses, If a merchant attempts to open a from the small bakeries, hardware business without joining the asso¬ stores and newsstands up to great; ciation, he will soon go bankrupt factories and department stores. for lack of wares to sell since the And since the system leaves it to cartel will not deal with a nonthe free choice of the public to ; member. And the gates of such decide which enterprises shall "trade association" ^membership prosper, and how much they shall are often closely guarded. ;i prosper, there are powerful in-1; ' centives to business to improve, The British Situation lower in good. . the public and placed in the hands of a small group or with the gov-: iness is of greater . For an automobile is of steel, that means iron ore and coal. In the course of a normal life of eight years it consumes. 16 times its weight in any today be-* competitors, both whom, in their different ways,keep a sharp edge on the motives In all the countries I visited in But the per¬ who violates the conventions thaty they ... ot When about not. or "Britain finds herself Europe and Squth America, trade —especially in its : competitive aspects—tends to be regulated not . of natural re¬ sources. In fact, if the mere pres¬ ence of natural raw materials in a country were enough to assure to its people a plentiful supply of goods made from those ma¬ terials, a country like Brazil would have more automobiles than it." on them known never support the idea that we have been highly blessed by nature. not the exception. developed. ; But it must be remembered that In considering in detail how the existence and extent of min¬ Competition Coupled with business is conducted in the eral resources in any location can Fair Play United States, and comparing be determined only by wide and other business patterns with our | I have said that American com¬ persistent exploration. So the fig¬ petition is exceptional not only ures on the proportion of these own, a characteristic of the Amer¬ ican system, of vital significance, because it reaches throughout all resources situated in the United levels and cross-sections of Amer¬ States probably reflect not so becomes evident. This characteris¬ ican industry but also because it much that we have more of these tic is competition—and competi¬ is coupled with fair-play. Critics materials than other people as tion of a very special kind. of the competitive system, both Now it is true that in most that we have been more energetic here and abroad, often overlook in seeking and developing them. other countries there is competi¬ this fact. They tend to regard the This interpretation is supported tion, of a sort, in business. But competitive system as a carryover by the fact that although the it is most certainly not the Amer¬ into civilized society of the law What makes Amer¬ United States has only one-eighth ican brand. of the jungle, as a conflict which of the world's land area geologi¬ ican competition different is that admits no rules and in which cally favorable for the occurrence it is complete and far-reaching only the very strongest and most of petroleum, we have discovered and, what is most important, it ruthless survive. Obviously, if about two-thirds of all the oil found has been developed in conjunction people are going to live together in the world to date. This is sim¬ with a code of fair-play. in an orderly, productive, happy ply because any person in our Here in America competition is society, such conditions cannot be country can win the rewards of complete, that is, there is compe¬ allowed to exist among business finding oil, so there are more tition at all levels and from all units any more than we can allow Americans looking for oil than directions. Geographic areas, in¬ competition among individuals to there are in other nations. If the dustries, corporations, new inven¬ be settled with knife and pistol. rest of the world were explored tions and people, all compete one Any idea that American busi¬ as intensively for mineral wealth with another. . ness competition is a claw-andas the United States has been, it Here, the South competes with fang proposition is a misconcep¬ is likely that our proportion of the North in the manufacture of tion. There are, of course, excep¬ reserves would decline percent¬ cotton textiles. The West com¬ tions to this generality just as agewise. : J petes with the East in shoes. If there are exceptions to the gen¬ It is impossible to attribute the Missouri can make and distribute eral rule of forbearance and po¬ American standard of living to a shoes which are as good as those superabundance with they had done previously, it * liteness in social life. restrictions talked efficient machine and cuts tween two great competition, they would say, "but we tried that and it didn't work, so we felt obliged to modify competition and put certain ... ford' to American kind of uq&ue element The N. W. Ayer & Son adver¬ of the American economy? What tising agency recently conducted is a more adequate explanation a survey to learn the starting sal¬ than any of these others for the aries of the top executives of 50 wealth that has been.made avail¬ of the largest businesses in the able to the masses of our people? United States. The average for These were questions that kept the 1943 men surveyed was $13.40 arising in my mind as I traveled a week. Only seven had started and talked with people abroad. at more than $25 weekly. " It seems to me that the answer In Europe a man who starts fair¬ lies in something less obvious than ly low in a business organization size of population, area of land, and ends up as a chief executive or the presence of natural re¬ is referred to with something akin sources. I believe it is an intangi¬ to amazement. In this country ble, but none the less real, quality such a career occasions little com¬ of the economic system we have ment because it is the patternWhat then is the that the competition might really distinguishing fea¬ our and distribution, I mentioned it to va¬ I met in my travels, And frequently, while; admitting that they do not practice the ■ i ing to observe that Professor Erich W. Zimmermann, of the once. me rious persons • ; of to is also impeded. In a competitive economy, such as the American, when one firm acquires ture of American production - ' equipment to put own him back in business at if the atom supplant petroleum in cases, it will be entirely pos¬ sources Thursday, October 24, 1946 , Volume 164 can buy goods In are the great United THE COMMERCIAL & FINANCIAL CHRONICLE quantities turn out. we the money ,'y • of - States, not only are else. factory worker can ouy a pair of work shoes with the wages of three and one-half hours of work, to the labor English worker has nine -enough to buy and 24 in Italy hours shoes. hours make pair of work shoes a a of to must man work for in put a pair of :ir[:y ;y:V v '' . ^ In the United States it takes work-hour one to make a cotton It takes four hours in Great Britain and nine and one-half in shirt. pre-war Germany. Sixty Sweden. turn \ : ■ v ■ present, out forts mistic. of become :• : workers Russian the on !'-X' v,V only average a fraction of the work produced by A U. S. coal .American laborers. Has workers productive. It ; from times seven much coal as as against different po¬ litical and economic ideologies, it is important that Americans have a clear appreciation of the accom¬ there is American terial no other realms. coincidence that of personal farmer, veloped in ; our using American power-driven •equipment, produces four and a not or stock prices return price and solid com¬ of elimina¬ wage controls for reasons better to fit be decisions 1y alT and industries this tinue at least might through sive "No Grounds For Further Stock terial Liquidation" rapid rise in natural stock result. . ,; prices , was Organized labor was, however, quick to sense the situation and, greatly encouraged by the ernment, filed and gained Gov¬ wage demands member down bank reserves from $1.5 ^billion to less than $0.5'billion in the first half of the year. (they are now back to $1 billion); Reserve Bank came . . Excess a credit fell from above $25 billion to less than $23 billion (now back that narrowed profit margins by raising costs against to $24 billion); high grade bonds fairly rigid price /ceilings; and came off about' five points from when it was apparent that the March to September; acceptance Government was considering price rates increased; commercial paper control via profit control in the rates were thrice increased,, in early part of this year the market July, September and recently, \ experienced the sharp February The effect upon the stock mar¬ decline. yHv'y y' ■v'i'V'V Then OPA months to with ket few a before termination run became far only ■ more liberal in inters preting statutes and lifted prices with the result that potential gins widened went to Then new and stock prices highs. came the / ; hectic with OPA prospects mar¬ .. • , summer shifting rap- Idly between expiration and con¬ tinuation; and when OPA finally went back on the books to be promptly followed by recontrol and rolled-back prices the market straightway broke. Monetary Controls ' A contributing factor to the de¬ cline of stock prices was the suc¬ cess of the efforts of the monetary authorities to restrict credit and tighten money rates in the name of inflation control. Since the first of the of year a total of $17 billion debt has been retired; $2 bilof certificates were retired Sept. 1st, $2 billion more on liop on Oct. 1st and will be retired another on $2 billion Nov. 1st. direct and indirect—indi¬ was rect in the sense that the upward adjustment of rates called long-term for some interest adjustment in stock yields and direct in the sense that the monetary policies caused bank liquidation of securi¬ ties. i'v But 'vy yy market prices appear adjusted to the changes that well have now occurred. Industrial stock yields have widened from close to 3% to more than 4% and over¬ all dividend payments are in¬ After a typical four creasing. weeks of panicky liquidation prices stabilized and the intensity of liquidation steadily declined after Sept. 3rd. Some dividend reduction and cuts in the period ahead may occur, but these are unlikely to be general and the overall trend of payments likely to be upward for period 1947 of months. earnings aggerated current may earlier a further Estimates have been this is year, of ex¬ groups." 1 -\' ma¬ '"H.* y n the longer ism is the It as itself 18 the comment days, and .Without red-herring pros¬ pectus can be issued. Often, too, questions arise which require not just one but two or more answers as Standard Texas structure and in the labor situa¬ tion, reasons are lacking for be¬ lieving that such a major read¬ justment must take place. We may face such a juncture some time red-herring It of available would course, real spiral of deflation, but here another 'another /bridge that does not approval mal time herring four weeks and the available data sug¬ gest present reason prehension on the fiscal "no The decline commodity prices strued as rather than ap¬ score. agricultural be con¬ favorable unfavorable. Lower commodity raw prices material costs for industry and reduce living costs for workers and there seems slight reason for concern over the purchasing power of farmers after the large earnings and accumu¬ lated savings of the rural popu¬ lation For during recent vears. Higher Prices Likely a 55% Si ! 52 Carbon_ U. S. Gypsum_ U. S. Plywood—— U. S. Rubber— t.t. s. Steel 92% _108 l 58% — 57% * 70% page New Issues on 2073) Comment No. 4 The proposal is a step in the right direction but it does not go far enough. A reliable firm, feel¬ ing it is responsible for any state¬ ment it issues, would hesitate to distribute any prospectus without first clearing up all points of doubt. Underwriters would have to be relieved of all responsibility for made the statements red-herring prospectus there be could ceptance of It be would agent of after hold a some the y before general ac¬ Caffrey's plan. just too easy for an any Mr. the new in SEC issue some years floated was underwriting firm to ac¬ countable for such incorrect data as could appear in the red-herring prospectus that Mr. Caffrey would permit the industry issue. Some¬ thing very much like the synopsis Mr. Ceffrey talks about is greatly needed, too. Investors should have the chance to obtain information about coming new issues quickly easily and the synopsis would give them this chance. •; and •J-*Comment No. 5 Incorporated in the SEC rules covering underwriting procedures should be a provision enabling investment initiative bankers' to themselves red-herring take in , prospectuses the putting in the hands of prospective purchases of new issues during the twenty-day different story, give some consideration to this particular angle of the problem. firm could issue a the SEC in ad¬ be saved and Mr. suggestion a real might then possibility. A red- prospectus vestor to read it before buying. The synopsis idea is more prac¬ tical, I think. The average in¬ ;; dividual investor would be more likely to read the synopsis. But here again, delay in receiving the SEC's first letter of comment and necessity of clearing up un¬ questions would remove any advantage that would be gained by its use as proposed. . considerable preiod it has 1 • v , ; > |V;.\ ■' y.y Mr. Caffrey understands the un¬ derwriting business, I believe, and '■ trying to be help¬ ful.- To my mind, permitting un¬ ' I do think he is derwriters ring t to. distribute prospectuses o m e r s red-her¬ their to immediately cus- following their publication would only aid the SEC to accomplish its avowed objective in the matter—the edu¬ cation of the possible investor. « : Comment No. 6 -;y y I agree with the SEC that every effort should be made to get in¬ formation about to the investor hours There new issue is no reason red-herring sufficient care speedily be made prospective buyers. out than twelve before he is asked original with a sooner to why—if the is prepared —- it - y; buy. , y can't available * to The original y;', undoubtedly was the intent draft of the red-herring prospec¬ of Congress Ho give the investor tus would mean more to the unthe chance to find out something derwriting firm if it knew in ad¬ about a new issue during the vance that the material the pros¬ waiting period and study should pectus contained would be the be given to ways -and means by information would most that which investors might be given likely go out to the investing pub¬ this lic. But I agree with those who opportunity. There is no doubt the SEC is showing a co¬ who think that speed would be y operative attitude and, so far as assured in getting vital informa¬ the underwriting industry is con¬ tion about new issues out to the cerned, this is a good sign. I won¬ investors if the SEC were to give der, however, whether it would a clear definition of just what it tv be legal for the SEC to carry out means by the solicitation of new Mr. Caffrey's plan without first business by an underwriting firm, changing the law. during a waiting period. / It . must broadly agricultural will reduce in for Cal Sulphur Carbide 69% — tus is being reopened at this time, I certainly think the SEC should would then really get out in time for an in¬ settled past 36 38% _ ___ un¬ receipt of the more for¬ of comment, valuable would the the a cus¬ such letter been for a from of vance yet require crossing. Government bond prices • have rising be their red-herring prospectus/, two or days after registration. If an underwriter could get a verbal Caffrey's is if to pros¬ three become flationary effect upon the econ¬ omy they could conceivably exert enough influence to bring about 48 waiting period prior to the effec¬ make yet but it does not appear to have arrived. v An important factor may be the policies of the fiscal authorities. If these continue to exert a de¬ 47% . tive date and, as long as the question of the red-herring prospec- to next year, a Oil of Gulf Union ;; tate to require major liquidation.- To date, in the banking situation, in inventories, in the evolving price 46 % Mfg. from the SEC. Firms would hesi¬ pectuses necessitous 42% & Chemical for no tomers if there Were any settled questions. point Mining Phelps Dodge Pittsburgh Plate Glass,,.. (N. J.) at least ten days to get the SEC's first letter of comment, not be witnessed until and unless the' economy becomes so strained and Mining & Smelting™,— 35 Standard Oil he certainty that materially lower stock prices will at some 67% - Monsanto takes sometimes virtual 59% — Youngstown Sheet & Tube——— 66%> prospectus such additional data . ly i; ; Apart from the favorable con¬ notations of elimination bf most governmental controls, an impor¬ tant reason for avoiding pessim¬ but projections of 1947 pros¬ ■ Depression Not in Sight • (Continued from page 2076) in the case of the raw as 66 Rubber & Oil Minnesota (Continued from show impres¬ or Tire Hudson Bay . convincing 95 _162% Easy for Investors fo Get Data y or appear as ; . Refining International Paper Kennecott Copper first wanted. that the to¬ profitable operations. In; many The reason I wouldn't rely on the talitarian systems of fascism and fields materials may continue too half times more than a Russian synopsis alone is that every in¬ communism not only restrict or scarce and impediments to un¬ vestor is looking for some special farmer, an American steel work¬ prohibit competitive business but interrupted operations too great piece of information which er produces as much steel also might as three restrict or eliminate other to permit of early highly not always be covered pros¬ ^Russians, * by the liberties. In all history, there has perous operations. It is to be re¬ In one city I visited synopsis. abroad, the not been any important society in called, however, that in most -driver of a tank-truck for trans¬ which there Comment No. 2 was freedom of wor¬ \'V periods of prosperity a large num¬ porting petroleum products re¬ ship and freedom of speech but We have not yet formulated a ber of industries and companies ceives a wage of about $45 ^pej:: not economic freedom. Whether definite reply to Mr. Caffrey's fail to participate. month. Wages for tank - truck economic liberty grows out of po¬ ''Probably the groups with the general proposal. We think that drivers in New York City are litical liberty or the other way surest what he suggests is a step in the earnings prospects over 5ibout $275 month. Yet despite this around seems beside the point. the near term right direction, however. We period are the com¬ higher wage-rate, the cost of sell¬ What is important is that they ap¬ modity and raw material stocks— heartily approve of any move that ing, distribution and collection of pear always to co-exist. will help the investor to such get in¬ groups as chemicals, oils payment for products from termi¬ For, as has been said, "Our way formation about new issues in ad¬ paper, building materials, rubbers nal to customer is about 1.75 cents of vance of actual effective date. We living together in America is and steels. The manufacturing and per gallon in New York as com¬ a strong but delicate fabric. It is assembling companies have large wonder, though, whether Mr. Caf¬ pared with 3.25 cents in the Euro¬ made up of many threads. It has potential earnings, but a further frey's proposal would be of much pean city/; Naturally the wage- been woven over many centuries period may elapse before these help in that direction. We wonder, earner can be paid more when ef¬ by the patience and sacrifice of companies can produce in the too, whether the law wouldn't ficiency thus reduces the unit-cost countless liberty-loving men and have to be changed. Our thinking continuous fashion necessary to of operation. There is no secret women. It serves as a cloak for is not clear on all points yet and large scale profits. A high level about this efficiency; it is not a the our protection of poor and rich, of lawyers are helping us to public purchasing power should guarded formula. The methods of black and white, of Jew and sustain the operations and earn¬ study the proposition. ylyy;;yyused in the United >, States are Gentile, of foreign and native Comment No. 3 ings yof such groups as " retail available to businessmen else¬ born. Let us not tear it asunder, trade, movies and Mr. Caffrey's proposal concern¬ liquors and where. But here competition for no man knows, once it is de¬ these could experience worth¬ ing the alleged desirability of the forces business constantly to seek stroyed, where or when man will while advances, but the rate and broader use of the red-herring better and better methods and to find its protective warmth again." degree of improvement does not prospectus is not very practical liberty, Products Chemical Gulf con¬ the 44 _ . Underwriters Agree With SEC It Should Be '; wnl movement Steel Corn Dow Goodrich will quarter of next year. contributing to Group Distinctions: time the moment that Recent Price Bethlehem levels may not soon be violated, that the next major movement of the market will be upward and current - recent nessed a the following: ; Rolling Mill—34% Archer-Daniels-Midland ; 33%, period of months combine to sug¬ gest that the lows recently wit¬ apprehension, current American prices, dividend payments and earnings and the outlook over a com¬ and not reasons for rather to at below of¬ to the • depend interim events, but certainly the present levels upon "y in Allegheny Ludlum Steel__ Whether Elimination of controls does not mean that all corporations land devoted to ideals a agricultural a conditions of ; profitable operations. It is method of doing business has de¬ in will realm leads to limi¬ the more decline , believed value are Stock—• • level stocks good market prosperity and that view still that >; fer holds. conditions, but here, too, such de¬ velopments scarcely deserve bearish interpretation since they terwoven with all the other aspects that limitations of fundamental Russian miner in a given period of time. An American .-a and to making. Among could prior schedules The economic aspect of human living is so in¬ would one expect the beginning of the real period of post-war reconstruction hopeful attitude. We will prob¬ ably read announcements by more corporations of postponements of expansion plans and reductions of ma¬ earliest or but well-being.. one 200 the to are essen¬ than believe though late 1947 as about down tion involved in more system looked be follow at all that any general col¬ lapse of productive activity is in petitive vitality lies, in attempting to improve it we may inadvertently impair that vitality seriously. And close to the up modity prices, tial the pessi¬ . to will, in their dynamic fluctuations, which will probably continue, get A our understand where its ■ , 2117 the-next several months and thereafter to have some decline into next summer, but it does not the system and of what makes it go. This is not to say that our system is perfect as it operates today. But unless all us >v. reasonable over change, and of propa¬ ganda and emotion-charged state¬ plishments of overly prove . points sucn ments for or may seems that the Federal Reserve Board Index of Production may experi¬ ence a further rise of 10 to 15 Accomplished In these days of accelerated so¬ cial change, of the stresses arising .miner, using American methods liberty in ^and machinery, produces more tations in •than individual the more What Free Enterprise of work- iiours. go into an average radio made in a United States factory; 171 in Great Britain; 262 in At pects high but real also higher than any¬ The average Amer¬ wages whereas develop machines by which the ef¬ wages where ican Number 4536 , CHRONICLE * THE COMMERCIAL & FINANCIAL 2118 Thursday, October 24, 1946 provided it does something Government In Business over public opinion. If you doubt be coming home. Now that over 80% of the veterans are home and that these people have been try¬ there would be many of them have no place to ing to perpetuate price control live, the politicians are squirming and other forms of government public regula (Continued from page 2075) * men and never need no tion is greedy, for even business. of hundred One banks were State ago years allowed to issue cur¬ in many States there was little or no supervision. The result was that many "wildcat" banks abused the privilege by and rency issuing over which currency, promptly went to a discount un¬ der its face value and the public could never be certain what its , " is more. subsidies priorities, credit, when the real less regulation, not easier and need will. effort to solve the an by problem has existed and probably never never in around That, however, situation1 which ideal an | always strictly honest were for Intelligent and far-sighted gov¬ regulation of construc¬ tion during the war might have gone far towards preventing a housing shortage today. But it was easier to temporize and let the future take care of itself and not only in housing but also in other just what was done, is sale for are Their fields where government has as¬ money" would be worth sumed control ^ over business. or next week. This Most'people knew that price con¬ unsatisfactory situation was reme¬ trol without rationing and wage died by establishment of Feder¬ control wouldn't work, but price ally supervised national banks control was—I emphasize the past and by extension of supervision tense—popular with the voters by the various States. No doubt and rationing and wage control the speculative bankers of that weren't. So the first was con¬ time protested that the ^govern¬ tinued and the last two were ment was ruining their business, dropped. The»results are familiar but, looking backward over the to all of us. years, I am sure that bankers to¬ ^ '-l \ 1 * x V * -"O'A businessmen unorganized. Mr. before Controls No -man can stay in business indefinitely if his prices are con¬ ■<;; frailties permit. sixty years ago many of Some £ the principal railroads were in hands the who speculators of manipulating rates, service and securities for their own profit were regard to the public in¬ The result was the estab¬ without Controls Essential to Price Cost trolled while his expenses are al¬ lowed to follow the law of supply and demand. only so He continue can long as his working cap¬ out and then he must ital holds shop or go into the black So the bootlegger, whom shut up market. weeks, his changed of But how made personal butchers many calls the oh own would agree that public supervision of banks has been a good thing and that it has been administered as well, as human recent disappearance consequence even day In Truman to well from congressmen How districts? many written letters to their How congressmen? other many written have businessmen or to their congressmen amending the one-sided labor laws that have been put en spoken about the last the statute books during ten eleven years. or This is an election members of Congress Both their year. and opposing candidates are especially sensitive to the troubles of the voters. Let them know if gov¬ more another that known of the people living in so- many called slum which areas Sen. Byrd Criticizes Personnel Increase have in Government been condemned to make way for public housing projects are eco¬ nomically unable to pay the rents charged in the new subsidized buildings t; and other merely move to somewhere else. slums There social or eco¬ gain in such activity than is nomic but meat from the markets. their ,i< numerous, slum a is It mQre no there is in allowing private enter¬ prise to erect new housing with¬ out subsidies. ' ., have 1 are mind, butchers were particularly hard hit by price control and the "paper i newstand. any on is great and grow¬ power tomorrow, '* and magazines which ing, so don't underestimate it. \ . ernment that regulation, just read their official newspapers transfer than location. . thing which This is the sort of life insurance companies and sav¬ ings banks have already begun to opinion it is a splen¬ As soon as materials do and in my did thing. available become stabilized, come build can costs be¬ expect may If private enterprise and operate housing of it. more and we then there will be no government housing ex¬ cept to provide for persons actur ally residing in the slum dwell¬ ings which are to be torn down. projects, need for the field of remains in There "government in business" the nu¬ government corporations formed during the past 15 years merous wide variety with power to to a (Continued from V-J 2075) page Day, while 11 effected slight reductions. were The largest increases in Veterans' Administration with 116,943 additional employees, Post Office Department with 106,486 (including the 53,277 em¬ ployees v reported for the first time in Sept., 1945), State Depart¬ ment with 9,188, Treasury Depart¬ ment with 7,451, Interior Depart¬ ment with 7J587, Agriculture De¬ partment with 4,896, Federal Works Agency 'with 3,556, Na¬ tional Housing Agency with 3,279/ and Federal Security Agency with 2,365. Due to consolidations, the Labor Department has increased 25,688. In addition to these in¬ creases, the War Assets Ad minis¬ tration has taken on 18,928; addi¬ tional employees. "The War and Navy Depart¬ reductions totaling 1,253,333 employees, from 2,532,313 in Aug. 1945 to. 1,273,980,in Aug. 1946. Most of these em¬ ployees werev of the. indpstrial type, working on war construc¬ tion projects such as airfields jand ments reported things. Many of these corpo¬ ruining rations were created by Executive roads and in shipyards and ar¬ your business and tell them what Orders under broad grants of au¬ senals. Prodf of this statement is you think ought to be done about, thority by Congress, others were the fact that since Nov. T945, acit. Remember, there are always created by existing government cording to reports submitted .tomany pressure groups opposed to business interests which are corporations which had been char¬ the Committee, 563,610 such in¬ tered by Congress and still others dustrial employees have been re-* flooding the desks of your conernment of is regulation and all others with let¬ telegrams, petitions, etc. Unless businessmen make their gressman without created were any ap¬ leased. Since Aug. 1945 the emer¬ parent authority. gency war- agencies have released there was no or transferred to other agencies voices heard, how can they expect control over the forming of gov¬ 111,909 employees, reducing their the lawmakers to understand ernment corporations by other employment from 159,773 in Aug. their problems? And don't ne¬ government corporations or by 1945 to 47,864 in Aug. 1946. glect < the Senators. There are executive order and few of thorn "Summarized; a comparison -.of only two from each State and it had to make any public account¬ Aug.. 1945 and Aug.11946 per-* fair in the matter of freight rate A long step sonnel statistics discloses that the may not be so easy to call on them ing of their funds. selling steaks, white shirts, new forward was taken last year when War and; increases, its record over the past Navy /Departments and automobiles, nylon stockings and personally, but one can write let¬ fifty or sixty years has been one the Government Corporation Con¬ the emergency war agencies re** ters to them. of general fairness and reason¬ apartment. leases. trol Act was approved, providing, leased 1,370,242 employees, and Thus can government regula¬ ableness. It would be hard in¬ Government Competition In among; other things, that no new terest. thought we had got rid of lishment of the Interstate Com¬ when the Eighteenth Amendment merce Commission, with regula¬ was repealed, has come back in tory powers over railroads. While through the side door. Only now, some of us feel that the Commis¬ instead of doubtful Scotch: and sion right at present isn't being "needled" beer, he has been we to deed government that argue regulation has mot railroads of place—become regulation that is bene¬ would like to live under such con¬ by private business brought about regulation or supervision by Fed¬ eral or State governments. / The administration actual of govern¬ ment regulations has not always been as impartial and honest as that of banks and railroads, but that is what we may expect from human nature. Where, then, are to draw the line between gov¬ we ernment To that question I might answer which ball to should be nor even dom of choice in the ways of an ing, a manager. Regulation vs. Government Operation v There But as long as we prefer> free¬ say that government umpire, not a player is what prices it can charge, subject regulations of Our competitive automatic the to has produced the high¬ economy enforcing the rules of the game, est material standard of actually running a business. The trouble of late has been, however, that world Government has not contented it¬ economies—or, the on one hand, and umpire, governing self with enforcing, as an the time-tested the transaction rules of business, has added hundreds of but rules new has them Yet that is the sy/ung at a pitch! the business world of for the means freedom up to we individual, to fail as succeed, or whether want the doubtful security of to as paternalistic government which will never let us out of its watch¬ a ful care. The war provided a per¬ today. fect in such us—whether is freedom we situation millions The choice, there¬ us. fore, if before he rather, want well and his accountant stand¬ allowed to know any¬ as are thing about which yer living the known—a people living under controlled of ine how many a ever ard which is the envy of which confuse the players. Imag¬ hits would be made batter had to consult his law¬ liv¬ must restore the freedom of business management to decide we competition. between difference a A excuse, for all Action sorts of regu¬ Not Whining Needed But all the wailing and whining large and small, will not stop unnecessary and un¬ warranted government regulation unless it is accompanied by ac¬ There are strongly * organ¬ perpetuating many of the controls tion which had no real reason for their ized political groups tirelessly There agitating for more and more gov¬ existence even in wartime. is no reason, for example, why ernment control, in order to some of the labor and materials weaken private enterprise and which went into goods "lend- pave the way for political dis¬ leased" to nations which hap¬ turbances which will enable such of which had nothing whatsoever to do with winning the war. Now that the war is over, the excuse of "na¬ tional emergency" is still used for lations, many of ; far So control of business. problem of. gov¬ ernment competition with many businesses. Electric power utili¬ ties have long suffered the com¬ government There is also the businessmen, . temporarily on our might now have been diverted side to to the amount erans be construction of housing of for a certain the vet¬ whom everyone knew would increase their own power. Their members often turn up in the most unexpected places and, in the aggregate, they exert a great deal of influence groups to Congress and that all govern¬ corporations now operating ment net reduc¬ 732, which results in a 1,037,510 from 3/49,769 in Aug. 1945 to 2,612,259 in Aug. 1946. This would appear to be an tion of under charters /State cally 1 will be . < Tax-paving real estate have the competition of subsidized public housing. The ultimate effect of these activities tion. by, government can be summarjzed in two words: Higher taxes. The voters in some localities have come to understand this and have proposals rejected Perhaps plants. New of voters issue to new municipal power bonds to finance % the day some City York : will to the point of understand¬ come ing that they are paying taxes to the deficit of the City's transit system under a five-cent fare. '' ■ ■ / ■' ' ;. * make up arguments in favor of pub¬ The lic housing are more difficult to answer than those in favor of mu¬ nicipally out With¬ ^business can¬ owned * utilities. labor supply, a and expand and with¬ out adequate housing, labor sup¬ cluded specific provision, pro¬ a ply remains static or diminishes. Because of prevailing rent ceil¬ ings on new construction and be¬ cause of shortages of certain ma¬ terials, private builders have been doing little building since the end the Therefore, say the public housers, if private enter¬ prise cannot or will not build, then the government should step in. Thus, we have a situation of where war. the government, through the continuation of rent ceilings, is helping to create the very hous-* ing shortage which is used as a justification for its entry into the real estate business on a broader war. "Slum thing 1 ; , and clearance" no one is is a fine against it agencies of the govern¬ Eric Mellg^en <• Summary To sum up, government super¬ of certain business of vision types has been beneficial and comes harmful only when be¬ the government stops being an um¬ pire and tries to become a man¬ ager; direct participation in busi¬ government is warranted only in cases where private busi¬ ness cannot or will not supply the by ness facilities necessary public to meet a real Right at the mo¬ to be in the need. ment the trend seems direction ment in change are of a little business, any not "on less govern¬ but it and senators the moment an attempt increase it. may day if businessmen their toes" to; protest to their congressmen scale. civilian private ment which admittedly took on enterprise. Many government additional personnel from 1940 corporations ? have, done a great through 1945 for additional war deal of good.. Both business en¬ work should feel the need to in¬ terprises and individuals have crease employment % further , now benefited from the activities of that the war is over, yet just this such organizations as the Home is taking place. Some additional Owners Loan ,Corporation, the personnel are undoubtedly re¬ RFC, the Federal Deposit Insur¬ quired over the 1939 total to deal ance Corporation : and many with problems of the war's after¬ others. But to1; leave the door math, but I reiterate that as a re¬ sult of the war we have surplus j open for government corporations to enter any business without re¬ personnel as well as property for gard to private corporations al¬ disposal. The'failure of the de¬ ready engaged in it, is both un¬ partments > and agencies to ac¬ fair and unsound.^.Fortunately, it knowledge this/may /well force the Congress to make further re¬ appears that we have passed the • peak in the formation of govern¬ ductions mandatory." ment corporations—at least until the next depression or the next hibiting competition with not prosper , pened of automati¬ liquidated on June 30^1948, unless Congress rein¬ appreciable reduction if it were petition of tax-exempt municipal corporates them prior to that date. not. for the fact, that in Dec/1939/ Annual budgets and annual audits when, the country started on its plants which are able .to sell are required. .. national defense program, there power at lower rates because they pay no taxes. Country ; Where a corporate charter re¬ were 928,836 Federal employees, of War Department banks have felt the competition quires an Act of Congress, there exclusive of the Production Credit Associa¬ is -opportunity for open debate civilian employees stationed out¬ tions and other instrumentalities over its proposed powers and the side the continental United States. usual result is that there is in¬ It is incomprehensible why the of the Farm Credit Administra¬ owners ditions. borrow from the language of base¬ . Business ^ its tyranny by a ficial and that which is harmful? of privilege stances where abuses years many Ihe/old-line departments^in-; ///// government: corporations/ canvbO: dependent establishments^. * and chartered except by specific Act I have been discussing postwar agencies increased 332,- tion—a good thing in its proper properly belong to business management in a free economic order. Of course, if we want a completely managed economy, where every person is told what work he has to do, where he can live, what he will eat and • wear and what he may do with his money—then price control would be in order, provided we could find managers with sufficient in¬ telligence to manage everything and, provided further,; that we could cite many other in¬ One For , unwarranted extension into fields benefited the public. r. ters, is made to ; Join Grimm & Co. Eric G. will become & Co., 44 Mellgren associated with Grimm Wall Street, He Exchange. City, York New members of the New York Stock formerly was partner in W. J. Banigan a & Co. Gessing with Grischy Horan & (Special to The ■ Financial CINCINNATI, rence Chronicle) OHIO G. Gessing & Grischy, is Law¬ — with now Union Trust Building. Mr. Gessing was previ¬ Horan ously with Edward Brockhaus Co. *• . . V v & iv X.K t.... •V '■; Volume 164 Number 4536 * THE COMMERCIAL & FINANCIAL CHRONICLE ready oppressive, without increasing the same by regula¬ tory requirements, whilst at the same time attempting to reduce spreads. Regulation -Shenanigans'' (Continued from page 2071) •' mission. dress This on copy should before Oct. 21. or If you were not cial statement, you \r;. \ ; The two be received at the above ad¬ strate reviewed an these in letters demon¬ NASD lack of ready a i. 1( H. • Underwriters Take Exception to J. Arthur Warner Such missive prompts the following questions: l. y Was the subject of sending this communication taken up with the Board of Governors of the NASD? Did .the members of the Board have Trying to Pin Market Slump to be of the Board, then what authority does the Executive Direc- said before, that gets the most for the corporation and the under¬ tdr claim, that -is, pursuant-to- what provisions of -theu^by- writer." ' ' ' laws did he give the "order-contained in-the letter of OcL m3 He ended on this note: as 1946? * M . S* ^ feluctaftf as I am to suggest any 2; : Assuming that th^ letter itself wa? duly authorized}' "furthertebptrols, I think that if we give this subject some earnest r every recipient who was bh the. alert would naturallyj^sk thought" mpst of us will come to himself; is' the whole thing legal and' proper, is the Secur¬ the* conclusion that these under¬ y legations absolutely true and were it could be proved without ques¬ that underwriter and cor¬ , tion ... ' , porate . . * ities and Exchange CdhlmissiOri'request' referred- tp:an the Jletter;;dne^q which "each ^greteredbrol^ reply? In other words,*doesn;Uthe' NASD have some-rp'-* - •?-spoiisibflity"tQw!iM^^ :-;h^tah^^case^ tb< advise v themrpf their^TigKt&^duty : arid Tobligatidn 'Th^f^ cial statement sent out to all a not all registered brokers and dealers insofar as the :* to1 the Sept. 30, 1946. V According to its text, it tered brokers and dealers." _ It required the addressees to : ■ v. with addressed, "To all regis¬ furnis]^; the CpmmKsipn statement of financial condition as of,Sept. 30, 1946, which statement should be filed with the Regional Office not later than Oct. 15, 1946, pursuant.to Rule X-17A-5. a Mr. as — Warner with ^our midst and they should not be permitted to pursue the like It pick¬ a implies it needs—more than it has already to deal the situation. The SEC Comments Mr. on v. : ... Comment No. 1 writer. issues that sons not X, \ ; Mr. Underwriting which writers do actual facts which he instance the of kind account for to general ,prices. -?■ decline no of the in If known, a large have issues all in price not but, than In fact, determine price. Under¬ try to establish a fig¬ ure for a new issue they are get¬ ting out which will be as close as possible to the price that will be , established in the market that be developed for can the particular issue but this is only in conform¬ ity with the established practices industry. It looks to me as though Mr,vWarner is just' looking for a scapegoat rea¬ gives. chinations of underwriting houses is fraudulent practice that Mr. War¬ ner alleges to be common in the cent for the it is ihe market always and not the ma¬ hhtyilow—nor has been—in the 'position to have. In the under¬ such at would warrant. of the or in where they have, not more the conditions of the market _ just isn't his business. The complaint he statement, therefore, presumes degree•. of knowledge Then followed of the trade. security . * Mr. Comment No. 3 Warner would deny the - of securities need not be supplied, and that particular parts of the form need not be answered. All of the information "This is for the . - a full ordered, must statement of financial time /; true, he would have done the industry a service by reveal¬ ing the events he describes when says are they taking place. were Under¬ writers can't be held accountable for price movements up or down. interesting observation: special statement which is not required under Rule X-17A-5." this was - Then there appeared this , ' furnished, it affirmation. or a substitute condition regularly Security values are always deter¬ mined by general market condi¬ tions. , . There -- was months back - . Such - - period a few a when a statement conclusion one . . leads to either . ; we , ; ,, charges which he underwriting industry wholly without meaning are without - names mention (and of actual firm the names of other parties involved and without such other proof might be cited. as customer has for to recourse A the law the adjustment of any claim arising out of misrepresentation of issue. If there is any substance at all to what Mr. Warner alleges, an specific instances spiracies" he of the claims "con¬ should be cited. V. An the new would securities not have stock prices that Mr;, suggests. An abundance issues is only one of many new factors that can contribute decline in security values to a but, all by itself, an excess of new issues would depress the market no more three points or so. When¬ than ever it pose of becomes difficult to dis¬ stock is¬ in the aggregate, it is usually possible to sell the shares over a numerous new sues longer period of time in smaller quantities. "% '* ' ''v But I defy to anyone tell me when the market is going to turn. I ask just when should an under¬ writer advise not suer plans. a to go is the It prospective ahead with last issue is¬ his of, no one can pos¬ sibly know in advance just which one this is going to be. New is¬ sues are readily absorbed by the market, then all of a sudden, without warning, there is a rever¬ of trend. In fact, an expand¬ sal rect the situation is ridiculous. would Warner has not thought this thing ; . . - .. Commision to direct the filing of Where do the Securities Acts * or a "special statement"? the rules grant it such thority? If those who by Rule X-17A-5 ^reports of financial condition,- in fact are statements" not tive Office a copy Commission? \ ' with the V activity. The : curse ^ " of over-regulation is sufficiently over-burden¬ some already without belaboring those in the securities in¬ dustry further, every time the Commission is on a witch hunt. . » The cost of doing business in the securities serving meeting answer It field is al¬ I sorry No. 2 J , the to is merely that Mr. me Warner not an be impossible for latory body of any kind a It regu¬ to con¬ trol the market in the way he sug¬ it were determined that a particular market could absorb only two out of four given issues, on just what basis could a regulatory body de¬ For gests. cide which floated and instance, two suppose issues which two kept off the market? should be should be The regu¬ investing can only talk the intimate business as an not can details of he pretends. Actually, he is attacking the un¬ derwriting function itself. It's just a case of sour grapes. as , There just a few of us in the particular branch of the busi¬ ness to are which Mr. Warner years much of time we is are are now public in latory body would—at once—be¬ come exposed to all sorts of influ¬ ences, including political string-* pulling, and it would be extreme¬ ly difficult for it to formulate any order at all. devoid of Besides, I don't think thev mar¬ intelligence. For ket is so bad now, anyway. I there has been too have just returned from a visit to and many this kind talk—its of had less of it... especial¬ ly from those who should know better. in underwriter Therefore, he all was I recall, not so long as ago.,, He is himself and the the trying to win the favor of the SEC with whom he know character at not was as I would have liked to Mr. Warner on the spot. seems outsider. v" ; It is said that the market break of Sept. 10, and the de¬ sire of the SEC to get at the bottom of it, is behind all this . am subject, difficulty, to file with the Execu¬ of the financial statement filed f».-■ I wherein lies Now then, if all this is so perplexing, why does Wallace Fulton take it for granted and instead of probing the premise that those who these United States Comment ; required to make do so, .to compel additional "special required by the rule?■••v; just naively advise NASD members underwriter. au- the right of the Commission y entirely beyond the control of the the West where Comment Warner's No. 4 the labor If our in¬ , set the prices of new securities too forecast of the future depends, of oeace his South industrialists mistic about the future. course, that to the charges the SEC and others were intimat¬ say the against dustrialists were pessimistic, then the underwriting industry can be that might be a cause for concern. answered point for point. Just It was generally estimated toward how far the industry should go in the close of the war that reconver¬ formulating a reply is a question, sion would take about a year but, however, as it is evident that Mr. because of labor disturbances and other causes, reconversiori is tak¬ Warner is only looking for some ing longer. The five years of pros¬ cheap publicity.. " perity which the business men It is strange that underwriters saw lying ahead has now been ex¬ should be accused now of having tended to seven years or so. This Mr. with to Coast and found angry, very angry, over high when only three months ago facts I situation and OPA, but not pessi¬ pointing his finger and I think I am sufficiently well acquainted the a long series of new offerings which up to then have been successful, s ^ :) on the on Warner of of excess market but „ , various hurls at the Mr. Rule not or 5 ing market must reach a turning Warner charge with the respons¬ point at some time or other as ibility for sifting the wheat from otherwise stock values would in¬ the chaff? Who is to say what crease indefinitely and this is im¬ should be bought and by whom? possible. Would he have more government Mr. Warner's implied suggestion overlords selected for this task? that the granting of additional Have we not had enough of this powers to the government regu¬ sort of thing in this country? ; latory bodies might help to cor¬ anything are not venturing any opinion as to would sell and it is doubtful through, or he doesn't understand X-17A-5, which requires members of whether any statement of cau¬ the difference between a country national securities exchanges and-registered brokers and tion to any prospective purchaser that operates under Constitutional dealers to file periodic statements ctf their financial law, such as ours, and a dictator¬ condi¬ of some new stock issue in the To give the power to any stock prospectus itself—even a ship! tion with the SEC, is legal., ~ • ' « statement that would go so far as group of men to decide what rep¬ We will not attempt at this time to resents a sound new issue and say whether such to say that the stock was purely rule constitutes an arrogation of legislative powers, not in- speculative—would have had any one that is not, goes far beyond tended to be granted deterring effect upon the public's anything ever yet advanced by by the Securities Act. even the most ardent advocates of impulse to buy. Prices can be We will assume for the purpose of this discussion only high in a market at one period statism and national socialism.,; that the rule itself is in all respects lawful. and low in the same market at The balance of Mr. Warner's re¬ That being the assumption we ask what right has the another period due to influences marks rest upon the unsound whether the No. know Mr. Warner but that breaks and re¬ investors of this country, "the du¬ some five negative injunctions. Thus it Anybody can have hindsight. bious right" to invest in certain provided among these that answers need not be pre¬ If .Mr. Warner knew so much new securities which, in his opin¬ pared by independent public accountants, that audit, re¬ about the conditions he says ex¬ ion, represent "disgraceful public isted, why - 'didn't- he- mention quirements need not be followed, that certain market val¬ them before? Whom would Mr. If the things he offerings." be under oath do not effect shrunken Warner of' new deteriorated under¬ an have all the facts were now number is. „> value to the extent Warner's 9':-f' V\ ''.-••• .r Warner case. a was. ues or huge profits from buying up the stock at the issue price and then selling it later at the higher mar¬ ket price which developed. al¬ just isn't true, either, that all new pocket pursuing his prey." writing field myself, I know of was need bridled in Mr. original communicati6ii,t)fitt# not in such ;jf';ff:: •.»; similarly treated would power finan¬ received follows: subject matter is concerned 4:-^This takes us-hack SEC dated were SEC ready has authority to intervene views which the "Chronicle" registered brokers and deal¬ ers? The last paragraph of the NASD letter which says. Tf you were not requested by the SEC to file this financial did, as he "conspire" against the investor, the interest of the corporations should not .he^permitted to wander un¬ .. Was the request of the Commission to file best writers'-and matter? 3. management suggested, , 1 issue, new - authority , "insiders," such as members of family of an individual under¬ the Comment with ^ ~ setting them were was last June that the before it proposed Rule X-15C2-3 which would prohibit I knowledge that the sent, and if they did, was it trans¬ conspire to foist upon unwary charges are wholly without basis. buyers a security at the highest I know of not a single instance their approval or with the approval of the possible price consistent with the of such dishonest dealing with majority of them? " market's ability to absorb the se¬ the investing public that Mr. War¬ 0 "r If the communication was sent without the curity; and at a price, as I have ner talks about. Even if his al¬ was they It SEC had Them on (Continued from page 2076) any mitted that too low. writer getting out a FULTON, Executive Director." ' ; communication ing requested by the SEC to file this finan¬ employees of his firm, from par¬ Straws like these indicate an administrative intent to ticipating in the offering because, may, of course, disregard this letter. increase rather than relax the powers of administrative as the claim went, underwriters Very truly yours, ; ' ; «- • * and these "insiders" were bodies, through means of doubtful interpretation. reaping ; ; directives initiative, and to our mind, servility of that organization to SEC purposes. WALLACE : , , ' ' 2119. upon the maintenance of in the world. ■' How Abandonment r Sees No Quick Con¬ immediately after the elec¬ Such fantastic, is condition a law. the that present price control one. Every¬ law is such messy a * v that thinks is it his -or / supposes. T:,. thinks be- bad is law the * it does not give him power cause -of • r ControL great the Actually weakness of the law is that it did . give him power to decontrol. f'X-n it did not seem to occur to the Administration when last spring's price-fixing debate was going on i it would that In Congress y- ever -strongly want the power of de-control. That power could have been inserted in a single sentence. Congress • could have; provided * - r either "that . QPA bis President item the or could administrator trol any . the decon- all/items at or even to have occurred to any- body. As the bill stands, it is hard to decontrol anything (apart from , , /. agricultural '• products) V without finding elaborate positive reasons for for j v doing--so? It must beshown, example, that "supply has into balance with demand, prices fall. When demand,is. in excess of.-supPly, prices rise. After the rise, „ ' • . , a of excess ■ demand and supply balance. The price rise itself brings the demand : and supply into balance.Tt leacis ; to when price is held below a the price that a free market would | fix, it necessarily makes demand ;/ supply. If the present law taken literally, there might be never the decontrol. any - doubt and all items now on cannot number a furbelows that are from are be of price con- few items very called no frills important either to living costs or to business costs. To control all items that are important to living costs and V to business costs would still be control the great bulk could not prices of steel or say coal aluminum copper or not of the Certainly the Adminis- economy. ( iration and consequences of inflation, diverts public, attention away from; the cess or that or the ore lead or were important to business costs. It that the value of fallen.; This value o£ the, rponetary money fall in/the unit is reflected in' a rise in com¬ modity prices, The increased vol¬ of money and bank credit is ume in turn caused by the cumulative budget deficit, will have basic inflationary a situation, regardless of *' "what slumps or jolts may occur inside situation. "v crisis recent The in. meat trated not or that the say milk or shirts or this increase blamed market. Poultry on and the eggs free were they said, because they under ceilings. But the that poultry and eggs went up was clear. When price ceilings on meat made meat im¬ possible to get, the demand for meat was concentrated on the only available substitutes, and eggs and poultry prices were forced up be¬ going up, were not real reason cause of this abnormal demand. When the ceilings were taken off beef/ lamb pork, the im¬ mediate result was a drop in the and price of poultry and eggs, because the abnormal pressure of de¬ when could beef are now. from taken off. Similarly, ceilings were removed margarine and other fats, was the the immediate consequence was a decline in the price of butter. illustrated a much wider eco¬ get the decontrol of prices with the speed that is now essential it President's economic / freedom., <ZA under* ; world free is or who economy not afraid more in of some it than government control. /;, j greater sure that it wants and has a longer no free economy developed even left-wing ;.of a / ■ large/ Zorganizations/and / propaganda actively - promoting schemes of government planning ings were removed from meat, the Price Administrator for this five- State region he declared, spent a total ernment controls which have pen¬ every* Crevice of/our life and work/ The government has ; Of Goods ; had practically complete author¬ What you have is a certain total sole; responsibility, and volume of money or money in¬ ity/and the, private citizen almost none, comes bidding for a certain total for everything that has happened volume ofv etrated. > . goods. If . that volume you increase of. money- or; money incomes without increasing corre¬ , or been done in America during The past decade these many years. supported;/ unioniisih; will '/ lead . them, but most of the unions still believe in salvation by ;greater V benevolence, higher wages, less work and more price controls, -and few are willing to face / free collective bargaining and a free labor market, least of; all in depression. [.Even scientists, teachers and other 5 professional groups have caught the pandemic disease of political power and are bringing their influence to bear in many ways against the restora¬ tion of economic freedom. ; government . provided a perfect test of government spending, government "Of course, government here or; planning and government control, elsewhere does not want to see and today the American people hold down the price of part- of a free -economy revived in Amer¬ are now exposed to a demonstra¬ those goods, you must either pile tion/ of /the consequences which ica, despite all its pious protesta¬ up a certain amount of unspent tions about free enterprise,/for^,/. Should be.-conclusive or/convinc¬ savings in the Hands of the public, the main business of the bureau¬ ing if we can learn anything from or you must divert that unspent cratic State everywhere is * to/ / experience. We might at least ex¬ amount to the uncontrolled goods. maintain and expand the; enorpect that the coming; depression We may compare the condition mous increase of power and con-/ would cure them of the consumer with that of a balloon ; that is trol it acquired over the economy purchasing-power theory of pros¬ "filled with a given volume of air. as consequence of the war. Since; for it has never before If you squeeze it at one place, it perity, nearly every other government; in been tried on such a colossal scale will stretch all the more at some the world has an immense vested and Vith such complete failure. other, because the air has to go interest in preventing' the resto¬ "The chances of restoring or somewhere. Similarly, if you pre¬ ration of a free economy in this vent money from having its ef¬ preserving a free economy in country, our own government has fect on' goods at one place, it America depend' mainly unon how been busily engaged in' negotiat- ; must all the more affect it at the American peoole will behave ing global economic agreements under the conditions they face some other place. The money has and arrangements which compel to go somewhere. during the next five years. They and in effect guarantee the con¬ ; are now moving into a" major tinuance of a politically controlled Now, if this is true, it brings decline in production, economy in America indefinitely. us to some conclusions that are cyclical extension of international precisely the opposite of the con¬ employment and prices which will The speeded and made collectivism through the economic clusions usually arrived at. Uni¬ probably be deeper and longer by the polio'es versal mechanisms of the United Nations price-fixing must ulti¬ that have been pursued during mately lead to a totalitarian econ¬ organization has become for the the past 13 years of expanding omy. But what does partial pricerest of the world a powerful safe¬ fixing lead to? Its ultimate effect, government control of the econ¬ omy. It will put an even greater guard against the revival of a free even if it does not discourage the strain upon our capacity of selfeconomy in this country. / j. , production of the items controlled, "Such a revival is not impos¬ is not to reduce the general price discipline than the depression of the 1930's, and there is reason to level at all, for in squeezing down sible, but as matters stand it; is the peo¬ spondingly the volume of goods, the inevitable effect is to push up the prices of those goods. If you has • v the prices of the controlled com¬ modities, it merely forces up the prices of the uncontrolled com¬ modities. We may apply this principle to the general belief that price con¬ trol should removed be from everything except rents. Now for political reasons, I am inclined to agree with the conclusion that this is probably the most desirable next step, so long as it is recog¬ nized that the solution is a tem¬ Wholly apart from the question of equity, when we hold down rents, what; we do is to porary one. divert that much power more My own we conviction is that the get ple are meet it without resorting to another foreign war they were then to rid of price con¬ sooner we can achieve to of the because real remedies as long believed in. men always on on horseback who is hand in a crisis of . the rest of their of offer fake escape or freedoms for an with The temptation to phoney money. security the dilemma of depression get permanent power by method any this to vote away kind to invite them will be very either strong for administration that may be 1952. "One may as are false not ap¬ ones are hope we have learned of problems of prosperity from experience of the past 13 something about these solutions the a And the plied another dictatorship by one or in office from 1948 to commodities. sooner American today better able than doubt whether purchasing to the bidding up of other maximum, balanced production. sooner we can get rid of price controls, also, the soooner we can deal properly with the question of controlling inflation; da,y after the President anounced that ceil¬ sumers, the j,r Volume of-Money vs.' Volume trols, the The much by down the r has been overlooked. declared that OPA ceilings had never governed the entire economy. American con¬ better, go a / /American-business is continued, leave, the nomic principle, and it is this that only be done either by the ignoring, with the consent of Congress, the provisions of the present law, or, can Administration's a not Uncontrolled commodities. J Now, these dramatic consequences , My personal conviction, therefore, is that if we really hope to . of the monetary unit has. . . the It is because of this ex¬ war. mand ; That than beginning of circulation. in tripled\ since the prices of . ybltime • of" fnOney and money; and credit has more stockings were not important to living costs. ; And when OPA had compiled a complete list we might not find -ourselves very far from where we - . . or con¬ which promises), would remove trols. But there • symptoms try and eggs. The price controllers tration • attempting to the not from important to living costs or business costs. This requireif sensibly followed (and if fulfilled quickly as the Adminis¬ ; with to price law that the OPA before Dec. 31 must take off trols ■ merely most graphically by what happened to poultry and egg prices. When beef, lamb and pork were put back under price con¬ trols, the immediate result was an increase in the price of poul¬ ent . deal by control, price brought out dramatically a very important aspect of price control that has been almost universally overlooked. This aspect was illus¬ and of //,/ Some hope seems to be left / about the provision in the pres¬ • I But perhaps even more Tmporthah\th|s vis "the fact - that tarit; tween demand were ♦ lost." I ' this - - rider the battle was a greater than supply. It 'necessar¬ ily perpetuates an unbalance be¬ requirements X of we pur¬ chases and procedures to increase : horse vantage of higher profit margins. their J, production, in order to take ad,4 / does But reduce measure of the restore - America in controlled commodity country might appear to-be. more because we have been rest of the hopeful situation unchanged; its effect lis living for 13 years of peace and actually to boost the prices of the war under; almost" complete gov¬ price of by deficit financ¬ ing and by artificially low interest rate policies still being- persisted in. As long as this situation lasts, consumers - lost; for want of a shoe for want of a the rider was lost; for want, shoe was bank .credit free economy. When supply is in / "whether we are to rest of the road to the totalitarian dictatorship-and lose ;of also /our .political /and cultural the OPA Admin¬ freedoms which can survive only what happens to the prices of other > $150,000,000,000 : worth the horse was lost; free / market they balance at the free :l market price. That, in fact, is pre¬ cisely the function of price in decide," he likewise /■ "It will rest of to , only at a years."- next; few the in wants . balance price. In during the 'f. //;//./; // from the war recovery or - increased a well as our future world peace as bility during the past decade, and it is hard to find any one here . real, cause of inflation. The re&l cause of inflation is the demand." come" the prospects for will, determine . beginning , into demand now , and a is No free economy, nor other kind of freedom, is free♦ It has to be paid for by self-dis¬ cipline, self-control, self-sacrifice, and in all these respects the pros¬ pects / are not promising. All / groups among the American peo- ->i pie have been weakened and de¬ moralized by the expansion of / government power and responsi; any - Supply //This is : whose meaningless requirement. come that issue the price. to control purchasing power and 'mixed economy' cannot long ex¬ production we have to professional services, certain lux¬ ist in America or anywhere else. consumption based upon the gos- /; worry' about. For - a shortage, in uries/etc. To/the extentthatthe Every!: economic 4system % *m hst pel-according to Karl Marx and nails may, as it is doing, slow prices of controlled commodities Agricul-.; move toward freedom/or; become JohmMaynard Keynes. down the entire building industry., are kept /down by price-fixing completely controlled,? and such ture is afraid of a; free economy The slow-down of building con¬ consumers will be able to get and / wants' government; price \ control always requires complete ductionwin ^ ;iri ? turn • have,; its. them : for less/ They: will; haVe control * of the life; and "work of guarantees, subsidies? and world repercussions on the whole busit just that • many more dollars left stabilization plans.' ; Some/labor ness situation. In business, not over to bid up the values of the Individual citizen.- ; ; ; leaders have begun to doubt less than in [war, /the/old/ simile the" uncontrolled commodities. In; : "The; prospects- for revival: and where the road, of government/ applies; for ;want of a hail, the other words, to - hold down the survival of a free economy in this own seem j . wage this nails, for example, discourages or goods? I suppose the production of nails," istrator had in mind such things it is not merely that one item as real • estate, / security, values, discretion, without having / to giye any reason, for it. But «uch : a simple clause does not ' on //■; ;/;• If ; the public, "is buying $250,000,000,000 worth of goods, and the government controls the prices of only; $100,000,000,000 - worth, buy and sell and sub¬ aids America," he predicted that "the outcome of the great debate in ac¬ v reduces Tiot : consumption, crucial items. It there¬ by * discourages or slows down production. Sometimes the effect of this is extremely broad.-If an ill-considered price ceiling -.|on margins wish to discuss. can "Discussing the topic, "The Future.. of the - Free Economy in doubt very they without production controls, price fixing and unlimited spending by government." // / Z figures of this sort. But the figures will do well enough to illustrate the principle which; I It profit has which and accuracy In fact~I OPA the the for figures. revive to sidies, curate inflation. but it reduces or eliminates Mr. Truman apparently that whether these able services and services. Now vouch cannot 1 against inflation. But it is begin¬ not only encourages power. He is right about this, but X in a different way than he himself v worth of goods ning to. be rocognized, at last, that so far from this being true, price It does this in two main ways. give him administrators ; sufficient law because it does not goods and services at scope. After the order decontrolling meat, he estimated OPA was still controlling about $65,000,000,000 of control actually prolongs bad a in and preserve here the kind of economic system maximum President's chief if not the sole weapon the . Truman 000 worth of its Inflation / Until, I believe, - a few months the Administration view was accepted by most people in this country that price control was agrees ' and ago, that this is so, but there is very little agreement as to why it is so, or • in precisely what its messiness consists.' Mr. body (Continued from first page) $250,000,000,000 a year, and the OPA ha'd only, been controlling the prices of about $100,000,000,- V ;f"' • Price Control and not think it will be very quickly abandoned. One jreason it will not be abandoned and yet I do price present the repeal to tion Thursday, October 24, 1946 of calling a special session of gress I."W: Ciisis Coming: Virgil Jordan Government Controls ? Long (Continued from page 2070) • is COMMERCIAL & FINANCIAL CHRONICLE THE 2120 ?'-t■':-.;-::'':::--:v:V /'v ■ ^■'i. ■:r■;:; V:- /" r~": ■' : ^-y—.*_ our years. omy; / But to keep a free econ-, intelli¬ in'a people. it and believe in requires more than gence or experience They must want it and have the capacity to pay difficult to imagine. very It will hard work, which not only require nobody is willing to do any more, but such things as the power curtailment of of unions and govern-^ restoration, to ment to fix wages, management of the power to hire and fire the basis of produc¬ on elimination of the tive efficiency, the and shop closed stopping the use of force the check-off, government to growth of unionism, limitation of government borrow¬ ing and many spending, and changes ir* othei' conditions upon which most groups have come to depend in one way or another and which most Americans as * "That coming more is one crisis than take for granted normal today. necessary or reason will another and / the why probably be business de¬ a pro¬ found unheaval in American li£e.,? pression may mean .Volume 164 Number'4536 THE COMMERCIAL & FINANCIAL CHRONICLE . telling. They are a matter of per¬ sonal distress to millions through¬ Reasons for Stock Market Break r (Continued from will' 2082) • and appraise the current1 situa¬ tion, we list below the principal page fill, 1. Russia, and fear of tivity, profits. f. •3., OPA. 4. ■" j . Construction industry bottle(3). necks due largely to r;. 5. Transition sellers' from to buyers' market with prospect of increased competition. *6. ;//> ; 7. lv Inventories, publicized ing to peak levels. - lis- as Tightening of instalment credit rates increased versus operating costs. 9. Foreign liquidation frozen" securities. 10. 11. "un¬ of reconverted from Undigested There is more new capital issues. doubt that no their in while still others some are of continuing a threat to the achievement of imum business volume and profits. max¬ reason¬ determine To the ally to these several factors by the mass of investors, and therefore • in tomorrow's likely to exert news continuing in¬ decisions, better place to look a investment on no than within the market itself. There is shown herewith stock common price Bar- 31 individual stock groups V-J Day; at their 1946 highs; .and on Oct. 3, and the Dow-Jones ages of price averages on From this data we percentage the same dates. have computed of the postwar price gains lost in the subsequent sell-off; and the total percentage •decline from the 1946 highs. Note that the groups which have fared the worst, and are now selling at below levels prevailing at the •or «end of the war, represent pally the durable tries—automobiles, princi¬ goods indus¬ farm, office, railroad and electrical equipment. the building mate¬ rials, iron and steel, and nonferrous metals (copper, etc.) groups are price clined 1946. payrolls, work¬ the recent permissible ment reduction installment of pay¬ period from 18 to 15 months under government regulation and are still above levels their war- have de¬ less than average during On the other hand, the and -chemica 1, efited These industries have ben¬ to important extent by "repeal of the Excess Profits Tax, :and labor is less of a cost factor than in the durable goods lines. Several an conclusions may be •drawn from these brief compari¬ (1) the "war" theory as a market influence is minimized by sons: -the or fact that the durable goods "war" industries, with the ex¬ other and still ■ durable ■'goods assure over, the a / capacity protracted standing cars which opera¬ period current, obstacles been removed. un¬ have Furthermore, outinstalment consumer only one-fifth the level 1941 and personal savings are unprecedented levels. Should the are Production Facing, at the end of the war, a backlog of new automobile de^> is still anticipated at in be outrun Building material Chemical stand- lower income bracket people who ordinarily constitute part of the new car market, there is no doubt whatever that plans of the major companies to priced models, doned due to produce tentatively "low" construction diffi¬ aban¬ culties, will; be resumed. The automobile industry has always been facile in developing the greatest possible market foi; its product. lated been that previously 18 -cent calcu¬ in¬ wage creases, added to wartime gains, would raise manufacturing costs part."* * Similarly, retailers' lack; of Electrical Farm sales to isons. demands. The threat became real at the end of August with respect to the Chrysler-CIO contract, and in our opinion was the principal factor in the subsequent selling wave,' ; * ^ differences Labor-management are riot new. I, labor Following World demands, imple¬ mented by bitter strikes, resulted in wage increases (126% over prewar), much greater than dur¬ ing World Wdr II to date. How¬ ever, it has been the intrusion of War Administration steeped in labor politics that has created conster¬ nation- among ply of goods and transition to a buyers' market, consumer pref¬ erences will again become the ruling factor in trade. "Ersatz" merchandise investors. A Retail more important labor leaders are now advocating absolutely free col¬ bargaining without gov¬ return to ernment interference. In are addition, beginning to appreciate compensation, produc¬ that labor - ' Inventories.* has been no such accumulation to date, if only for the manufacturers been unable as to a reason whole obtain that have the * ma¬ than political mand supply-de¬ consideration; tardiness of in increasing railroad ICC sellers are com¬ peting^forthe pconsumer% dollar than during the past year," have been; additional} factors very dis-? turbing to investor psychology. capital new issues earlier in the year, accentu¬ ated rather than being directly responsible for the decline. In ad¬ dition, there has been a tendency to reappraise the near-term out¬ look of individual industries, such as the airlines, in the light of re¬ peculiar believe these we to are pass¬ ing phases of an exceedingly com¬ plex transition, not only from war to but peace, chronic also from depression to a prewar postwar world in which well state political values as are in a mild upheavel. price levels as of Conclusion It seems • > clear that most of our difficulties, including labor truculence, stem from political consid¬ erations and carry-over of a spirit of waste and profligacy which un¬ deniably characterized much of the war effort. Lifting of meat controls and speeding of OPA machinery to break remaining "price bottlenecks" will have a salutary effect upon business psychology, but the real need is for willingness of the man at bench lathe or to do an honest day's work for much more money than he has ever gotten before. The physical needs an almost complete growing out of wartime lapse civilian goods production pre¬ ceded by years too well of depression, are known to require re¬ 73.4 66.0 21.3 49.4 77 l 23.9 18.8 29.4 • 96.2 127.7 30.7 61.8 29.3 242.0 33.1 50.0 63.6 23.2 , _! (heavy)— ______ iron_______ 55.4 . 54 7 • 10.5 t 78.8 * 60.5 62.6 48.9 111.3 89.4 110.2 88.1 106.1 20.0 11.4 17.9 12.1 89 2 32.4 142.8 101.2 46.8 29.1 108.0 34.5 55.0 28.5 102.5 23.5 ' 3i.8 46,7' 38.3 79.6 30.6 v 56.9 . 21.9 66.0 85.6 42.1 58.7 21.4 35.8 24.0 82.0 33.0 61.0 47.5 '65.8 22.1 40.5 —, 41.7 55.3 68.7 105.4 57.8 81.0 52.3' — r 50.3 53.3 equipment Textiles 18.1 \ 56.8 139 0 '43.8 _____ —, ' - 34.4 " 50.1 — _ 138.7 20.7 37.8 merchandise________-v___^-______^ 65.5 50.5 . ' 75.9 49.3 -■ 14.0 38 6 122 9 30.2 83.1 608 21.2 62 1 815 23.2 S&O ' 62.7 17.4 69.6 104.8 76.2 81.3 27.3 58.6 69.5 55,6 127.5 20.0 94 5 24.8 212.3 171.6 85.0 19.3 53.1 68.3 47.7 135.5 30.2 —32.3 43.6 34.7 78.8 20.5 Tobacco_______________——______ Average, all groups— Dow-Jones Average: Industrials - ——164.4 S,:;"——— Utilities — Economists See End of Price Inflation in 1947 R. (Continued from page 2081) S.. Alexander Brig. Gen. {Columbia University); Murray Ayers (The Cleve¬ Sherwin C. Badger (New nomist, Leonard P. land Trust- Co.); England Mutual Life Insurance Co.); Dr. Benjamin H. Beckhart (The Chase Nation¬ al Bank); son W. S. Company); Brush Cable M. (Consolidated Robert Economist,. Western W. Burgess Valley (Professor Prof. Soule Edi¬ Dr. College); Standard sey); Dr. Ohio); Dr. Dr. New W. Cumberland mann & (School Co.); Louis Rev. of (Ladenburg, Bernard W. Commerce Jer¬ University); Wendell Thal- Dennis fessor of Business Organization, Ofeio State University); W. J. Donald (Managing Di¬ rector, National Electrical Association); dent, Lionel Prof; of ■ Dr. D. William & Edie Technology). Stephen New M. York Garbade Co., Foster Life Insurance (Assistant Inc.); (Economic Roy Advisor, Co.); Treasurer, L. Garis W. H. Shell Oil (Professor phone & Telegraph Co.); Dr. Richard J, (Economist and Statistical Co¬ Gonzales Dr. Humble Lewis H. Oil Haney & Refining (Graduate Co.): School of Administration, N. Y. University); Haney (Economist, Sheridan, FarMorrison, Inc.); C. Frederick Han¬ E. well & sen (Director Co.); Dr. of Research, Charles sociation W. T. ings (Professor of' Economics, Yale Uni¬ versity); William F. Hauhart (Professor of Finance, St. Louis University); Dr. Donald L. Kemmerer (Associate Professor of American Economic History, University Illinois); Fred I. Kent. (New York); Dr. Willford I. King (Committee for Consti¬ of tutional Government);, William H. Kniffin (President, Bank of Rockville Centre Trust Co.); Dean Langmuir (New York); Dr. Frederic Edward Lee (Professor of (Assistant University of Illinois); Dr. J. L. Leonard (Head, Economics Department, University of Southern California); Arthur D. i Lewis f (Manager, Economic Analysis, American Airlines); William Livingston (Economist, Alexander Hamilton Institute); Hans Widenmann '(Carl M. Loeb, Rhoades & Clarence D. Staff, National search); tor, Roy A. Long Bureau Wilfred Commercial W. & McDonald (Member Research of May Economic (New Re¬ (Executive Financial Institute); President, Ragner York). Dr. J. General (Vice Foods Roland Co.); Statistical Electric one be I. Illinois); The Dr. Chase Glen Sun sun (Yale Na¬ Savings (Manager, Division, umsion, Young (Manager, Westlnghouse who asked that his and name Canada's New Savings Bonds Attract Canada Savings Buyers Bonds, which went on sale Oct. 15, by Montreal the Bank monthly for a of just summary, publication, to have ready very reported are response. that their sale marks ing in Oil uu Sta¬ Co.); v^u.;, University); its released met with Observing an interest¬ development in Dominion new finance, the bank states that bonds' attractive novel and the fea¬ tures have been designed primar¬ ily to provide a peacetime invest¬ ment medium for those millions ol Canadians who acquired investor status through Government war ; the bonds savings certificates. The bonds new are security priced at 2.75% a purchase wartime par. interest coupon, better return than is able from term now issues ten-yeai Bearing avail¬ comparable outstanding. Their at¬ tractiveness is heightened by fact that they may be the bonds-, monthly which par interest. may in denominations as be assignable. hold more No one and The purchased small non-transferable the cashed by registered holder at accrued a they give now of ol and ^ a as and J, H. Riddle of,., Mutual Saxon E. Department, Manufacturing Company) economist (Economist, (Economist, Saurino Research wesearcn Olin (Vice Bankers Trust Company),; Robinson. Charles & \yithheld. Bank); Cummings); President, Hercules University of Kentucky); Dr. Max Wi-klei (New York); Wilson Wright (Ar— t-onq are Benedict .isticai & <s tistical Frof. (Chicago, Corporation); Association Banks); & Bank); F. E. Richter (Vice President, Dr. Morgan National (Naess Palyi Pogue National Chase Naess Melchoir E. Shepard The D. Treasurer, Edi¬ Chronicle); Dwight Michener- (Associate Director of Research, The Chase National Bank); Dr. Herman E. Michl (Economist, Cotton Tex¬ tile Motor; & Cork Eco¬ nomics, Co.); (General Col¬ Uni (President, Tan America, Inc.); Paul J Grant O. Hardy (Chicago As¬ Commerce); Hudson B. Hast¬ of Tucker Company); Business Paul ol George Watson of Power of Economics, University of Southern Cali¬ fornia); Charles A. Glover (American Tele¬ ordinator, University); (Presi¬ Company, Inc.);. (Stevens Institute Ennis S. Merrill Weber Manufacturers Lionel-D. Edie D. Eco¬ Co.); (Department Roy Wenzlick (R03 Co.); Nathaniel R. ""•'lne\ (Economist, The Procter & Gamble Co.); Edward Wlest (Dean, College of Commerce, Finance, M. and Manhattan I. Stone (New York); (Headmaster, Mercers- Tippetts Council Wenzlick Dempsey, and Princeton Rufus Corp.); ners* Donald R. G.. Cowan (Cleveland, V. Cox (Dean, School of University of Chicago); Dr. Wil¬ S. J. of President The Smith Academy); James Trant (Dean, lege of Commerce, Louisiana State versity). / of Co. of G. (New York) ; N. Charles S. Garfield Business, liam Oil (Vice Bank burg J. Economics, University); Miles ;; L. Colean D. C.); Stewart P. Coleman (Director, Shields James Economics, (Chief Electric1 Co.); (Missouri Clark tional of 72.1 95^8 64.9 — ,—— Steel and So also have' exaggerated rumors of foreign liquidation; the tech¬ nical aspects: of ; marginless trad** 90.0 . (average). High 12L6 • 105.4 :•/ :v __________ 1946 44.8 93.6 —________ Postwar 82.5 55 n , problems 13.5 105.1 (Manager, Economic Division, American Cyanamid Co.); Dr. Charles A. Dice (Pro¬ conversion 38.0 115.1 79 0 ply costs; and the probability of narrower, profit margins in some ing, and the flood of 134 3 65.2 62.3 St. more 53 5 75.4 / rates in line with wages and sup¬ lines when 86 3 (Washington, updn the 23.1 61.9 65.7 65.3 — finance Columbia the .fact that its been based more have 7q'o 113.8 Rubber J. The- OPA and decisions -jr'q Paper________——____ Ray disappear, Other Factors But fore, is that the will 479 equipment—— Packing ;v that they have however, 10.8 33 7 Oil compar¬ reached record peace-time levels, but that with a more normal sup¬ 131 5 129.4 Machinery Office relation ,:.?. . reason, these. they in 1939 44 1 chams__________—86.6 ___ Manufacturers, wholesalers and are becoming increas¬ ingly wary,, it is true, of the 1 in¬ ventory situation. Not for the dis¬ lective less on 63.7 equipment. equipment Insurance retailers tinctly encouraging factor, there¬ a 25 % based 36.5 48.2 55.0 Instalment to the current volume of As of the latest figures nearly are 33% unless compensated for by increased labor productivity per hour. In addition to the resulting squeeze on profits where labor is important cost item, it was observed that the resulting in¬ crease in the cost of living would undoubtedly generate fresh wage and and beverages mining Grocery chains in available, department store stocks 191.0 zinc Foods still; inade¬ are 33.9 Gold single total f inventories 53.4 __ equipment Railroad hands 43.2 — Dry goods be can - a 1—-% Lo~s~ Gain Lost — - »■ some an __ Drugs shipments , has ;It _ Copper, lead and "Ersatz" automobile at-r 1946 ; — Motion pictures-..-..'.— by at afford High r__?; ponents together ^ at the; right place at the same time. The ship¬ an which V-J Day ____ Investment trusts Liquor forestalled prices Oct. 3, ... due to simple inability under cur¬ rent conditions to get all com¬ ment : of insurance stocks—available 1946 __ Banks this disposition is uniform throughout all branches of in¬ have bank current From manufacturing transport Air that ventories preferred. stocks, and po¬ .-rr: . A Automobiles current a trade. ible nar¬ or re-* "touchrand-go," but with majqy defensive issues—such as convert¬ far \ , and could adequate to 1939 as factor security market is still been "" goods ruling solved the have / * processed materials needs based upon the class Until enough." issues . raw trade. at „ combined quate models of any Aircraft postwar current • im¬ inventories which levels peace-time believe that Automobile equipment considered at have- "had all; these claque will be superseded tractive yields and the opportu¬ by the needs of the peopbe as a nity of participating in a re¬ whole, and detect signs that they sumption of the upward trend. J', ^ 1, " :" BARRON'S GROUP STOCK AVERAGES V V v level of 183, which was a We interests substantially below the amount of prices still be out of reach of the > During recent weeks, the in¬ building materials group despite crease in manufacturers'" inven¬ high construction costs; and (3) tories has been continuously pub¬ most important, action , of the licized as a dangerous portent in automobile group specifically in¬ the current economic picture. The dicates that the labor situation, last postwar depression, it will including renewed wage increase be recalled, was set off by the demands under government spon¬ dumping of unwieldy inventories sorship, has been the principal of raw materials which had been depressant of postwar security accumulated during the preceding markets. period of price speculation. There mand which it basis, same truly is prices. equipment. In these instances in¬ bottlenecks, in view of the betterthan-average performance of the vs the there litical The , an extent, there is an urgent and precedented need for new tivity, and selling prices are di¬ ceptions noted, have suffered most rectly related, and that still in the present market, whereas higher wages will mean another "'peace" industries have been rela¬ boost in the cost of living. While tively buoyant; (2) possible con¬ uncertainty still clouds the labor sumer resistance to higher prices horizon, some light is beginning has not become a factor as yet, to show through. v/ : ; ; ' : v t nor have construction industry Labor 234. to dustry / except • automobiles and other types of transportation oil, merchandising, liquor, motion picture and other rsimilar groups were still selling a government stubbornly perpet¬ •as of Oct. 3, in some cases con¬ uating wartime powers and an siderably above their V-J, Day "levels. amounted merce, / gain was accounted for to portant extent by higher which previous any record. row as for production above " • sharply higher new /car prices will affect potential sales to some aver¬ on •end the on volume ■ relative weight attached individu¬ •which truck and men While the at Exceptions But— ing a leisurely 37 hours per week. of the minimum. a production was only 41% of similar output in 1941—with an average of 20% importance; Ton's were ' 1939 land corrective other than efficient no "100," Au¬ gust shipments of all types of manufactured goods, as reported by the U. S. Department of Com¬ were auto tions are. is changes models ' Based upon total probably of transient or'waning economic significance; there to design 1941 required advances. the out for current pro¬ duction, much less lay in a stock against the possibility of price On emphasized items , terials during the first 9 months of 1946/ loans fluence last planned the above factors have been over¬ the to peace-time use, time-consuming de¬ expense, the once able to avoid and to will Marginless trading. others years , terms.' Rail three the lay and war. least automobile industry has plagued more continuously than any other by wage demands, strikes, and parts shortages. Auto¬ mobile plants had been quickly which are supposed in varying degrees to have contrib¬ uted to the decline, and will weigh: these against the back¬ ground of the market itself: 2. Labor—wages, strikes, produc- at been factors ,/ take 2121 person than $2,000 of the $50; non¬ may new securities, although each membe* of , family a . limit» r . may hold up to this • /_/ Tomorrow's a look at the market did in the Orleans ous Whyte day at 169.86. As a mat¬ what was more im¬ ter of fact portant was that it opened that day almost six points above the previous day's =By WALTER WHYTE; market is to advance again close.. In doing that it left a must hold above the 170 vacuum of about four points. Says— it Both bear and bull news generally known. Which will take precedence is Dow figure. life Markets time Anybody who thinks that Tuesday's (Oct. 15) whoop-ee- reflection of speech and nothing closed down day was a Truman's else. The fact is that at least v now was vacuum gap i or closed. Now the important thing to before that event¬ ful Tuesday the market watch was the action from showed there was something the gap close. The market* was in the wind; something that again in dead center. If the meant anything, would bring higher prices. advance For despite the newspapers- averages had to stay above a "informative" stories there certain predetermined point. was somebody with money In this case the point is 170. who was buying stocks in an¬ Breaking that level (make it the discount twice. the not thing react in same They act or The public acts on such action insiders unload. This, anticipation. It is news. on that the insurance) the chances that- were would go old lows, around prices down to the the In both prove to than would be policies most of which apparently was designed to serve the inter¬ creditor's Most has ' • ' 1 •• *.{,■'}}'•■ . Members Curb Exchange Cotton Exchange York New York New Inc. Exchange, Commodity Chicago Exchange Stock York New Trade of Board ; tape Orleans And Cotton Exchange other now CHICAGO rather PITTSBURGH as rea¬ [The.- views, expressed tin this not necessarily *at any •;£ time coincide with those of the y Chronicle. " They are presented as * , article do of break That to me is one now of the sil¬ Investiga¬ yet. liest reasons is needed tors a whipping boy gentleman from New will made tive another. The statement Bank's representa¬ by the considered be for an from appropriate ap¬ Mr. Beyen restated V ; the ..basic will be given "for rule that loans , from l'- i that states for made goods. loans financing of WELL DEFINED PROJECTS of reconstruction and the do all these issues for development" vious the offer reflect making This Crucial Issue As questions are is rule unanimity only. result, it will be up to the a dress that "the bank was study¬ ing policing methods actions so that the for its trans¬ money ad¬ vanced 'for Pacific Coast Securities ' definite purposes used in accord¬ ance with the terms of the con¬ tract and he was sanguine on the would actually be crucial decisions are its However, should can management to decide how interpreted and these decisions will be re¬ flected in the terms of the first enabling statutes- which will placing of World Bank the lists of eligible in¬ vestments '(New York State has already passed such a law).* . permit bonds upon Considerable opposition can be expected in many legislatures If the debates on the British loan can be .considered a precedent. Doubts will" be whether the Charter should be ings can be agreements. hardly be any doubt; can lending organization the Bank should set forth a clear-cut as a segregation and should effort to enforce it strongly and rigidly as possible. This would mean that all dis¬ bursements would be made for rule of j make every as unpaid portion of a loan. ^ : /It policy the with > asserted that this would be in agreement may be spirit of the Charter feels strongly that and the writer actually true but he has to admit that this opinion is not is this legislatures will have to pass Bank that However, before be done, the of the several states of the under these agreement that World Bank ob¬ ligations; will have to be sold mainly to institutional investors; only they will be in' a position to absorb the large volume of bonds' the Bank will float within the conflicting ideas and interests which could be adopted solution disappear^ & that the quite natural, for the Charter is a compromise concerned. ^ doubt there > is one point greatly strengthen position of those in favor of segregation. r - " ' -" :> Market experts are in general i which pointed out in the pre¬ article, the Charter pro¬ are not very clear as far these determining as time. no ; ; fairly obvious. was visions of dur¬ arguments will be advanced quite early in the game and the difficulties the Bank will face in this As is next few years. the . very SEGREGATION. as short a There . and granted without they would simply within special instances of the crucial problem which is Segregation cer- ) In this way, there would be no possibility of using the purchased goods as collateral merely real will And V they the importation for able > doubt ; that no • than a the'purpose circumstances" There ShalLRef Supervised advisable the "specific" requirement. Yet loan praisal. Use of Loan Funds to procedures that be less effective first class chance to argue a away the rules and exceptions for one should this angle be have them would be under heavy or have certainly standpoint. "special to relax grant expressed as to small sav¬ accumulated safely invested in an lending abroad in bad - experiences of the inter-war period. To refute these assertions proof will have to be furnished that the Bank and its prospective borrowers are making and will make every ef¬ fort to safeguard these obligations in which savings banks and in¬ surance companies have invested * their funds. Evidence that the doctrine of segregation is being enforced and that ample collat¬ eral is being provided for would go far in silencing such opposition. ; I The Bank as well as the bor¬ rowing governments will have to be fully aware of this situation. After all, nobody: would; suffer more than the prospective bor¬ rowers if opposition , to invest¬ ments in ; World Bank bonds should develop among the people at large. Everything possible will have to be done to avoid such a situation. * ■ <•'{ organization view of the • achieve this fully supported by the actual would be words of the Charter which may be interpreted in y'a different in accordance with the strict pro¬ visions of Article III, " Section way if the creditor viewpoint is \: Mr. Beyen* 111 his address, has given less weight. The "special pointed to the cooperative char¬ 5(b) of the Charter. acter of the World Bank which Undoubtedly, it was useful to circumstances" — clause makes has been also emphasized in the remind prospective borrowers of such interpretation entirely feas¬ aforementioned article. If all in¬ these rules as laid down by the ible. terested parties will keep that Charter. However, bankers are Disregarding Creditor Interests spirit of cooperation constantly in well aware of the considerable May Hurt Borrowers • rpind, satisfactory solutions Will difficulties in enforcing similar Opponents of the doctrine of be found for even the most com¬ terms in commercial loan agree¬ segregation will be motivated plex problem and the Bank will ments particularly if the loan mainly by considerations of na¬ proceeds are to be used for many tional prestige and sovereignty. prove its worth in the years to come by financing loans to Gov¬ diversified purposes and over a They will argue that it is incom¬ ernments for "prudent and pro¬ lengthy period of time. Customers patible with the position of an ductive expenditure within their independent and financially sol¬ lAddress by J. W. Beyen, Dutch Exec¬ territory", as stated recently by utive Director of the Bank before, the vent government to permit any Hugh Dalton, British 'Chancellor Savings Bank Association of New York. international organization ■ t he of the" end."3 Executed ^ - .They will, attempt to have the proceeds of the loan transferred /, into their Treasury accounts and * will use them for-the purchase of materials and foodstuffs rather) "specific projects" "except in special circumstances." Are Mr. Beyen's "well defined projects" the equivalent of the Charter's "specific projects"? Apparently they are, but some astute lawyers may feel differently and they out that the Bretton Agreements were well de¬ signed to make posisble a satis¬ factory credit policy; however, there was every expectation that to , of Woods Bank en¬ -The than less troubles and Charter should on credit pointed practical Orders r tainly'plead the existence of "special; circumstancesJ'--: /ffi iV ; , more the of special attention to the provisions of the .Bank .Charter.2 'fit was pressure difficulties. important is the in¬ terpretation of the term "well de¬ fined projects" as used by Mr. Beyen. Article III, Section 4 (VII) ganging up upon helpless loan applicants. '- " ' -? .r " ■ Spme important issues facing the Bank's credit policy decisions have been discussed by the pres¬ ent writer some time ago with the result from such „terms. agree Even considered proposals enforce to reason unusual events. cotton only.}-- those of the author unavoidable- red may of more to sure policy. That this statement should have been made by a representa¬ tive of one of the prospective bor¬ rowers seems to be a very adroit move.1 For it will be much easier N. Y. SWITZERLAND The actual : ,, &:f'J:--WaIter Whyte f iw it will be under considerable pres¬ Bank statement issues important some Exchange BWg. DETROIT GENEVA, ago iCsK';; if: Moi:e next Thursday. will not be "careful study of specific purposes and in such a such projects and the use of- the page one news, as are the way that the goods produced or money shall be carefully super¬ "reasons" for it. According vised." purchased with the proceeds of a ,V„, loan would be available and ac¬ to the official version, a spec¬ He added during a press con¬ tually used as a collateral for the ulator was being sold out. ference following his prepared ad¬ Exchanges NEW YORK 4, years Bank will World taken the opportunity to bate and to make a permits. *: So I according¬ and the N. Y. Cotton The interference'with..their forcement " New resent and business intervene in this "whispered" de¬ a The H. Hentz & Co. particular groups. appropriately, the of ests go ly allowed for of the may through the re¬ highs, 177.05. tion , as for the Icotton break will good deal of gossip and,41confidential" reports about these public in the market—and these came into the list on it's back again—an ordinary technical reaction can carry Saturday's set-back. them lower than normal ac¬ Established 1856 close. seems son were . I have purposely placed 15; Gulf, Mobile & Ohio at \% stop 10; International Paper these stops some distance un¬ at 43, stop 38, and Boeing at der the buying points. With Practically all of the results often Industries at 17, stop hence the stops. 23, stop 21. then, stocks., in certain in 1932. World Bank Faces Crucial Decisions On the down-side you have oversimplifying a market phenomenon, but if news of new strikes, increased I tried to interpret it differ¬ tax selling and more consum¬ ently, I wouldn't have enough er resistance. On the. up-side space to answer it. you have potential big earn¬ In expectation of the ad¬ ings, and an anticipated Re¬ vance, I recommended a list publican Congress to give it of stocks. Of his list the fol¬ impetus. So far the market lowing were available at the doesn't show which factors prices mentioned .below: will play- the biggest role, Dresser cases If it held the chances equitable by borrowers themselves rather than originating from were equally good that the creditor countries which recently market would make another have been under heavy attack of cent breaks writer the and break (Continued from page 2082) set such powerful precedents ihat subsequent changes will meet strong resistance.,- ■ • The significance of these forthT coming decisions has been duly recognized in the interested cir¬ cles. As a result, there has been is of course, market 160. effort to know, „ wasn't interested. now, a 169 for reason . three days ticipation of the news. {!, I have often harped on subject that markets do didn't days before the deaths of heads of the companies. two On Oct. 17 the loss was 1.69. what In both .analogy between * the; cotton were made break of last 'week and the sales the cases immediate forerunner of similar markets 2.59, and then came two more with averages "down is living in an ivory tower. days about .50 for both days. The That market is an for given at the Kreuger and Toll situation occur¬ that correct red. The averages lower prices, how much and service*^Among On Oct. 16 the first effort to problematic. doo was to and Eastman Kodak. them earliest opportunity. the at running time same time.. called to the Stock was this Exchange so or short sales the abhor nature 1932 teletype a writer V"- in and at the and try to. fill vacuums become known for some not result the a I. don't think a single "explain" his speculator had anything to writer was doing a daily col¬ system,; The explanation was do with tit; no more than the writer wa&resporisiDle for the umn for a paper now extinqt^ sioaplq;f;^ The ; tape> showed •• Back t If apparently chos- phenomenal. .As was en. succeeding days: On Tuesday the averages went up to 176.52 after closing the previ¬ Markets Walter take let's Now what Thursday, October 24, 1946 $ FINANCIAL CHRONICLE THE COMMERCIAL 2122 steps to , Such procedure . on ' • LAMBORN & CO. 99 WALL Pacific Coast Exchanges STREET NEW YORK 5„N. Y. Schwabacher & Co. Members New SUGAR New York York Stock Exchange Curb Exchange Chicago New York 5, N. 14 Wall Street Export$—Imports—Futures San Francisco Monterey — Y. Teletype NY 1-928 COrtlandt 7-4150 Private Wires to DIgby 4-2727 (Associate) Board of Trade Principal Offices —- Santa Barbara Oakland Fresno — Sacramento Reprinted in the "Commercial and Finan¬ cial Chronicle," Oct. 17, 1946. 2 "World Bank's Success Dependent on Credit Policy," "Commercial and Financial Chronicle," Aug, 22, 1946. 3 According to a report in the New York "Herald Tribune" of Oct. 16, 1946. amount trol as of interference and con¬ may be inevitable for the segregation. They innumerable admin¬ elected Exchequer and of the Chairman newly Board of Governors of the World BankA enforcement or will advance istrative and legal obstacles and 4 According to a report in the New York of Oct. 17,. 1946. "Times" Volume 164 THE COMMERCIAL & FINANCIAL CHRONICLE Number 4536 2123 in • Acme Electric Corp., Cuba, N. Y. ly t June 26 filed, 132,740 shares ($1 par) common stock. Underwriters—Herrick, Waddell & Co., Inc.,. and First ^Colony Corp. Offering—To be offered publicly at $5 "a share." Proceeds—Company will receive proceeds from the sale of 68,880 shares and four selling stockholders price of $200. will be used pay net proceeds ($292,940) $50,000 current bank loans; about $20,000 machinery and equipment, and the reworking capital. Y7\ ' mainder for © . No i * r Acme-Hamilton1* 1 Aug. Mfg^Coiv-;^ filed 50,000 shares ; stock '($20 par) * and 82,000 29 5% cumulative preferred || ratio of a •* ^ holders. 7 Prices—$20 a -share for the preferred, and $11.50 a share for the common; Proceeds—Company will J apply proceeds tp^fully , discharge secured demand notes, mortgage4 notes C: and partial discharge of de- if 7 ; benture indebtedness. Offering temporarily postponed. , of capital stock- reserved for issuance of 15-year 3 % convertible debenture upon bonds It also ance upon conversion of Estimated the shares of covers net share held. ; Unsub¬ be common reserved for issu¬ preferred. Underwriter—New- being sold by three stockholders. of $2,300,000 will be used by proceeds company to pay off bank notes of about $1,100,000 to purchase additional machinery and equipment and in the amount of $1,200,000. Offering date indefinite. Beaunit Mills, Inc., New York on or. shares mon. conversion are issued before :Nov, 8, 194). At Oct. 10,-the company had 565,632 shares reserved for such issuance and 20,457,011 will receive proceeds from the sale of all of the preferred and; 100,00 shares of common. The remaining 50,000 shares of common are $100 principal amount of debentures for each Livingstone & Co. Offering—Company is offering the 7< shares of common into which they would have been 50,000 shares Of preferred, while the 82,000 shares of 7 convertible. The principal amount of debentures of¬ cbmmon are being sold for the account of certain stockfered will-be $350,377,300 in the event that all shares - common common burger & Hano, Philadelphia. Price—$25.50 a preferred share and $12 a common share. Proceeds—Company will Underwriting— shares ($1 par) common 7; 6 shares of stock held. Company will withdraw from ' stock.'"Underwriters—G. LV'Ohrstrom & Co; and S. R. 7yregistrator any debentures not subscribed for and the. ' 1 of Sept. 27 filed 53,648 shares ($25 par) 4^% cumulative convertible preferred and 150,000 shares ($1 par) com¬ underwritng. Offering—Debentures will be offered subscripton to stockholders of record Nov. 8 in the for shares Artcraft Hosiery Co., Philadelphia ; American Telephone & Telegraph Co., New York able upon conversion of the debentures. share for each new purchased by the underwriters. Price—Public offering prices by amend¬ ment. Proceeds—Net proceeds will be used to retire all unexchanged shares of $6 prior stock and to redeem its outstanding 7% preferred stock. Temporarily postponed, Och 17 filed $350,377,300 15-year 2%% convertible de;bentures, due 1961, and 3,503,773 shares of common issu- ■ a scribed by; amendment, i Proceeds—Net proceeds, with funds, will be used to redeem $20,000,000 of 7% cumulative preferred stock at $115 a share plus accrued dividends. Indefinitely postponed. : ; 7 f ; Of the to will be used for of ;V other common stock to underwriters at an aggregate * / Price the proceeds from the sale of 63,860 shares. Company also will receive proceeds from the sale of 20,000 war¬ , American Locomotive Co., New York . ISSUE July, 18 filed 100,000 shares each of $100 par prior pre7 ferred stock and $100 par convertible second preferred stock. Underwriting—Union Securities Corp., New York. " rants for INDICATES ADDITIONS SINCE PREVIOUS Sept. 27 filed 180,000 shares ($2.50 par) common. Under¬ White, Weld & Co., New York. Price — By writer • were — outstanding, a total of 21,022,643 shares; Price 7, amendment. Proceeds—Of the total, 140,000 shares are $100 principal amount of debentures. being sold by St. Regis Paper Co., New York, and the Aerovox Corp., Bedford, Mass. Proceeds—The proceeds' will be used to provide sub- 7 remaining 40,000 shares are being sold by I. Rogosm, Aug. 22 filed $i;500,000 of 5% sinking'fund debentures, sidiary and associated companies with funds for extenPresident of Beaunit Mills, Inc. due 1961, and -50,000 shares ($1 par) commonxstock. sions, additions and improvements to plants, for extenUnderwriter—Ames, Emerich & Co., Inc., and Dempsey 7 sions and improvements to company's own plant and for ? Berbiglia, Inc., Kansas City, Mo. & Co., Chicago. Offering—The debentures will be ofgeneral corporate purposes. Sept. 12 (letter of notification) 41,000~~shares of 5% fered publicly." The common shares will be issuable upon cumulative convertible $6 par preferred. Offering price, American Water Works Co., Inc., N. Y. thO exercise of stock purchase warrants for purchase of $6 a share. Underwriter—Estes, Snyder & Co., Topeka, common stock at $2 a share above the bid price of such March 30 filed 2,343,105 shares of common (par Kans. To pay outstanding indebtedness and $5) plus expenses and common on the effective date of the an additional number determinable registration. Com"to open five additional stores in Kansas only after the re¬ City, Mo. Offer¬ sults of competitive bidding are known. Underwriters— • pany will sell warrants for 25,000 common shares to the ing postponed indefinitely. —$1001 for each . . r , * * * 1 7 underwriters at 10 cents ■ * To The remaining war- warrant. a rants will be sold to officers and employees of the comi| pany. Price—Debentures at 98. Proceeds—Company will use $1,025,000 of proceeds of debs, for payment of an Indebtedness to Bankers Trust Co., New York. Balance, f Will.be added to:, working capital. Offering postponed. - YY7 Air Lanes, Inc., Portland, Me. : / share and T cent 1 in the State of a common share. by amendment. Probable bidders include Byllesby e V If on Nov. 1. in. the ratio of one additional share for Offering—Shares were sold to the July 29, 1946 at $10.70 a share. They will be offered to the public at $12.50 a share. 336,550 shares common stock (par $1). Un¬ derwriting—No underwriting. Offering—Stock, will be offered for subscription to common stockholders of record Co. and underwriters Lead &" Smelting Co., St. Louis 7 Sept. 6 filed (letter of notification) 15,000 shares each of preferred and common.; Offering price, $10 a preferred * filed American Zinc, Oct. 9 > be Dillon, Read & Co. Inc., White Weld & Co., and Shields 7 ^7 Black, Sivalls & Bryson, Inc. (10/28-31) & Co. (jointly), and W. C. Langley & Co. and The 7 July 29 filed 100,000 shares ($1 par) common stock. First Boston. Corp. (Jointly), Offering—Price to public Underwriters—F.' S. Yantis & Co., Inc., and H. M. by amendment. 1.7; :|7i: 7-:;7':77.. -77;: -7:777; r :7-77777:7:-7 on. ■;;i " Blumenthal (Sidney) & Co. Inc., New York Aug. 30 filed 119,706 shares (no par) common and sub¬ scription warrants relating to 30,000 shares thereof. Underwriting — None. Proceeds—For reimbursement - Sept. 10 filed 30,000 shares preferred and 500,000 shares offerings are made Maine, they will be made by Frederick 7 each two shares held. The subscription'offer will ex- ; pire on Nov. 21. Unsubscribed shares will be offered;;' Co.,'Boston, r To complete plant and equipof: companyV treasury for funds expended in re¬ 7 for subscription to officers and directors of the > ment and to provide working capital. company. 7 ' . *. *; ;■ 7 demption of 3,907 shares of '• 7% cumulative pre¬ -/ v Price—^By amendment. Proceeds—Working capital. ;'y *> ' '' ~r \ ^ •'vy.j i ferred on April 1, and for funds deposited in trust for American Broadcasting Co., lnc., N. Y. redemption on Get. 1 of Ansley Radio remaining preferred shares. Al¬ Corp., Trenton, N. J. i June 27 filed 950,000 shares ($1 par) common stock. though it was proposed to offer the stock for subscrip¬ Aug. 29 filed 70,000 shares of Class A cumulative con¬ Underwriter—Dillon, Read & Co. Inc., New York. Offertion to stockholders at $10 per share, company on Sept. vertible preferred stock ($5 par) and tying—A maximum of 100,000 shares may be sold by com70,000 shares of 20 decided to withhold action at this time.. common -:-7:77Z vV (50c par) and warrants for 50,000 shares of pany to persons, firms, or corporations with whom the 3 t :i O. Adams & * * - . . -.,. . . . 7 corporation had network affiliation agreements on March 31; The remainder will be offered publicly. Price by 7 common stock to be sold to underwriter at 5c per share ;7 warrant and exercisable through Oct. 1, 1951 for pur¬ . * chase of amendment. Proceeds—To prepay notes payable to acquire radio station WXYZ, to construct broadcast trans$ mitter for station KGO at San Francisco and for working Treat * *■ ' <• '• i.v t.* (7,\r «•* American * v*?. Cladmetals common & at $1 per share. Underwriter — Amos Offering—To the public in units of one Co. p share of preferred and $7 - 7 per unit of common. . one Boston Store of writers—Paul H. Davis share of common. Prices— Offering—Preferred share of preferred and one share of Proceeds—To retire bank loans of approxone and for working capital. Temporary postponed. .'July 3 filed 196,500 units comprising 196,500 shares of voting Common stock ($1 par) and 589,500 shares of nonArkansas Western Gas Co; voting common stock ($1 par)r each unit consisting of i 1 share of voting common and 3 shares of non-voting 7 June 5 filed 33,639 shares of common stock (par $5). i common. Underwriters—None—the company intends to Underwriters—Rauscher, Pierce & Co; Inc., and E. IL Rollins & Sons Inc. distribute its common stock directly to the public. OfferOffering—Stock will be offered to the public. j log—Price $6- per unit. Price by amendment. Shares are being sold Proceeds—Net proceeds estimated at $1,179,000 will be used to pay a mortgage on by six stockholders. , \ plant, .pay accounts payable, purchase equipment, for Armour and Co., Chicago 7 building alterations and working capital. J ; July 12 filed 350,000; shares (no par) cumulative first: American Colortype preference stock, Series A; 300,000 shares of convertible > Co.y Clifton, N. J. second preference Aug.. 12 filed 30,000 shares ($100 par) cumulative pre¬ stock, Series A, and 1,355,240 shares ferred stock.^ Underwriter—White'j Weld & Co; Price 7; common stock (par $5).; Underwriter—Kuhn, Loeb & by- amendment! Proceeds—Net proceeds initially ; will Co., New York. Offering—The 350,000 shares of first , be added to general funds, however, the company anticipreference stock will be offered in exchange to holders pates it. will vsei the funds for. its building ana expansion ; of its 532,996 shares of $6 cumulative convertible priori : program. Offering date indefinite. : ,: preferred stock at the rate of 1.4 shares of first prefer- & will ($50 par) 5% cumulative ($1 par) common. Under¬ Co. and have Stroud & Co., Inc. non-detachable stock purchase warrants for purchase of 30,000 shares of mon stock com¬ of the total common, 375,000 shares will be offered for sale for cash. 30,000 shares are reserved for 7 imately $100,000, to purchase wood-working machinery Co., of Pittsburgh Chicago, Inc. issuance upon exercise of warrants attached to preferred and 95,000 shares are reserved for issuance upon exer¬ cise of outstanding warrants. Price—By amendment. - > Proceeds—Net proceeds, together with other funds, will be used to pay the company's. 2% subordinated note in principal amount of $5,268,750 and accrued interest. Offering date indefinite. - the . < 1 Bowman Gum, Inc., Philadelphia Sept. 27 filed 268,875 shares ($1 par) common. Under¬ writer—Van Alstyne, Noel & Co., New York. Price—By amendment. Proceeds—Stock is being sold by share¬ holders who will receive proceeds. ^ ence stock for each share of $6 prior preferred. Shares 7 of first preference not issued in exchange will be sold * Seph 25 filed 75,000 -shares»of; common stock (pari $1). v to underwriters. The,<300i000 shares of second preference Underwriter—Riter & Co. Proceeds—Stock being sold 7 stock will be offered-publicly. The 1,355,240 shares of 7 for account,of Harry common will be offered for subscription to common Bloomberg, President. Price—By amendment. *:7777''';' V:. 7y7:7T7:7777 7/-7:77.V:/-./77 stockholders of the company in the ratio of one-third k t . t f-;v. j ■ '■} 'x' \ . • -,i ■ „?:f American Limoges China Corp., New York • t Braunstein ; (Harry), Inc., Wilmington, Del. Sept. 25 filed 12,500 shares ($25 par) 4^% cumulative convertible preferred stock and 50,000 shares (200 par) stock. Underwriter common New York. Price— a share for $25 a C. K. Pistell & Co., Inc., share for preferred and $11 — common. Proceeds—7,000 preferred shares the remaining 5,500 pre¬ ferred shares and all of the common are Heing sold by 7777'-.v; (Continued on page 2124) are being sold by company, ☆ I7>7'|7:'. —SPECIALISTS Corporate and Public Financing IN — Underwriters and Distributors United SfateslGovernmenl' Securities " 7' 7'4 of ' :Corporate and Municipal '■ V:-; State and Municipal Bonds • Securities The C. J.DEVINE FIRST BOSTON- & CO. Kidder,Peabody^Co. INC. CORPORATION . 48 WALL Boston • New York • Pittsburgh and other cities • Chicago Chicago • ST., NEW YORK 5, N. Y. Boston • Cincinnati Philadelphia * St. Louis • • HAnover 2-2727 Pittsburgh ♦ San Francisco Cleveland 7 ' Founded 1865 Members of the New York and Boston Stock Exchanges New York Boston Philadelphia Chicago THE COMMERCIAL & FINANCIAL CHRONICLE 2124 satisfactory. 2123) -■ /{/r'.Vi.-;. stockholders. Net proceeds to the company, es¬ at $147,500, will be used to prepay to the ex¬ (Continued from page present timated $24,031 to Cameron Aero : Best Associates, Brewers • (10/28) Inc., N. Y. Oct. Engine Corp., New York shares of capital Bell & Co., Inc., Purpose, working capital. Business—Company plans to pursue the ex¬ ploitation of a plan for brewing and marketing a uniform premium beer to be known as "Brewers' Best Premium Lager Beer." , ' (letter of notification) 52,000 Stock (par $1). Underwriter—W. H. Philadelphia. Price, $2,875 per share. Camfield Mfg. Co., Grand Haven, Mich, July 29 filed 220,000 shares ($1 par) common stock. Un¬ derwriters—Gearhart & Co., Inc. Offering—Of the shares 100,000 are issued and outstanding and will be sold to the underwriters by three stockholders at registered, Briggs & Stratton Corp., Milwaukee Aug. 9 filed 76,000 shares (no par) capital stock. Under¬ writers—A. G. Becker & Co., Inc., Chicago. Price by amendment. Proceeds—Shares are being sold by stock¬ holders. $4.50 a share for their own account. The remaining 120,000 shares are being offered by the company. Price $4.50 a share. Proceeds—Company's share to pay rene¬ gotiation refund in amount of $180,000 to the U. S. Government, and for additional working capital. Offer¬ ing date indefinite. r Temporarily postponed^ (N. Y.) Brooklyn Union Gas Co. May 3 filed 70,000 shares of cumulative i ($100 par). Underwriters—To be filed preferred stock by amendment. v. • (10/28) £ Hoboken, N. J. Camro Company, 19,950 shares cotriihoh — Leason & Co., Inc., share. Purpose, working capital. Oct. 21 (letter of notification) stock (par $1). Underwriter July 23 rejected two bids re¬ ceived for the stock. Blyth & Co., Inc., and F. S. Moseley & Co. and associates submitted a bid of 100.06 for a 4.30% dividend. Harriman Ripley & Co. and Mellon Securities Corp. bid 100.779 for a 4.40% dividend. In¬ v definitely postponed. / July 8 filed 150,000 shares ($1 par) common stock. Underwriter—Dempsey & Co. Offering—Stock initially will be offered to common stockholders of Admiral Corp. V Bids Rejected—Company Brown & Bigelow, St. Paul July 19 filed 35,000 shares of 4y2% ($100 par) Chicago. Price, $7.25 per at cumulative tock. plus Carscor 15,921 shares of common stock. Under¬ supply name of an American underwriter by post-effective amendment. Offering— To the public at $1 a share in Canadian funds. Proceeds —For a variety of purposes in connection with explora¬ tion, sinking of shafts, diamond drilling and working writer—Registrant will ' \ '* ." Buffonta Mines Ltd., Toronto, Sept. 12 filed 1,000,000 shares rency) common/Underwriting pay cago ance « Can. A y ) ^ \* ' I ^ !' / Coi* Springfield, stock other than the Middle which holds 38,564 shares of such stock. If preferred stock are de¬ than 150,000 shares of old posited for exchange the number of shares to be ex- California Oregon Power Co. May 24 filed 312,000 shares of common stock (no par). Stock will be sold through competitive bidding. Under¬ writers—Names by amendment. Probable bidders in¬ clude Blyth & Co., Inc.; The First Boston Corp.; Harri¬ man Ripley & Co. Offering—Stock is being sold by Standard Gas and Electric Co., parent, of California. Bids Rejected—Standard Gas & Electric Co. rejected June 25 two bids for the purchase of the stock as un¬ UNDERWRITERS—DISTRIBUTORS—DEALERS Industrial, Public Utility, Railroad and Municipal Securities Hemphill, Noyes CSb Co. Members New York Stock Exchange CHICAGO ALBANY PITTSBURGH • ■ TRENTON ^DIANAPOLIS WASHINGTON I changed will be pro rated. Shares of new preferred not issued in exchange will be sold to underwriters. Pro¬ proceeds from sale of shares not issued in exchange will be used to redeem old preferred at $110 ceeds—Net a share and accrued dividends. Aug. 30 filed its ($5 par) capital stock. Company's name is to be changed by post effective amendment to Central & South West Corp. (Del.) Prospectus will be issued in connection with the public invitation for sealed bids for the as purchase of a sufficient number of such shares will be constituted upon consummation of a same proposed merger into the issuer of American Public Service Co., to provide funds for retiring the preference shares of the issuer and American Public Service Co., the merged corporation. Possible bidders: Glore, Forgan & Co.; Lehman Brothers-Lazard Freres & Co. (jointly); Smith, Barney & Co.-Harriman, Ripley & Co. (jointly); Btfth & Co., Inc., Stone & Webster Securities Corp. and First Boston Corp. (jointly). Price by amend- not for shares of by amendment. exchanged Underwriters ment. for each sold be "'s;: to Offering indefinitely postponed. Candy Co., St. Joseph, Mo. Sept. 12 filed $2,500,000 of 4% sinking fund debentures, due 1961; 100,000 shares ($20 par) 5% convertible cumu¬ lative preferred, and 170,000 shares ($1 par) common. Underwriters F. S. Yantis & Co., Inc. and H. M. Byllesby and Co. (Inc.), Chicago, and Herrick Waddell & Co., Inc., New York. Offering—Common will be of¬ fered for subscription at $10 a share to common stock¬ — holders at of record for will rate on be employees. of Oct. one share for each 19. Shares of offered for Price—The sale to two shares held not subscribed common officers, directors and will be offered at debentures 100 and the preferred at $20 a share. The common will be offered to stockholders at $10 a share. Pursuant to the .common stock subscription rights, F. S.! Yantis & Cowill purchase 100,000 shares of the 170,000 shares of common for investment. Any of the remaining 70,000 shares which are not subscribed for by directors and employees stockholders and will be sold to the proceeds, estimated at $5,856,125, will be used to pay the balance of the purchase price, amounting to $5,150,000, for acquisition of the candy manufacturing business operated by Clinton In¬ dustries, Inc., as its national candy division with plants In St. Louis, Mo., and Chicago. The balance will be used to redeem its 4% serial debentures and for additional Clary Multiplier Corp., Los Angeles ; Sept. 3 filed 150,000 shares 5V2% cumulative convertible preferred stock (par $5). Underwriting—Maxwell, Mar¬ shall & Co., Los Angeles. Price—$5.25 a share. Proceeds —Net proceeds, estimated at $650,000, will be used to repay a $90,000 bank loan, to construct a factory and office building at San Gabriel, Calif., at a cost of about $250,000, and to purchase additional equipment, esti¬ mated at $250,000. The balance will be added to work¬ ing; capital. Offering jtempprarily postponed. Climax Industries, Inc., Chicago Aug. 28..filed 150,000 shares 5% convertible cumulative preferred standing ($10 par) common and 250,000 shares ($1 par) out¬ s^ock. Underwriter—Brailsford & Co- Offering— company is offering the preferred and Gen¬ eral Finance Corp., issuer's sole stockholder, is offering the common for its own account. Price of preferred $10 per share; price of common $4 per share. Proceeds of preferred to pay company's indebtedness to General Finance Corp., purchase equipment and real estate and for working capital. Indefinitely postponed. A c „ j August 15 filed 300,000 shares ($1 par) common stockUnderwriters—Emanuel, Deetjen & Co., New York. Price by amendment. Proceeds—Company will receive pro¬ ceeds from the sale of 150,000 shares and Generoso Poper President of company, who is selling the remaining 150,000 shares will receive proceeds from these shares. The company will use its proceeds for payment of mortgage notes, open account indebtedness and for purchase of additional equipment. Any balance will be added to working capital. Indefinitely postponed. Colorado Milling & Elevator Co., Aug. 20 filed 70,000 shares vertible preferred stock. Denver, Colo* ($50 par) cumulative con¬ Underwriter—Union Securi¬ ties Corp., New York. Price by amendment. Proceeds to the proposed issue of preferred stock, the —Prior company Central & South West Utilities Co. v will Colonial Sand & Stone Co., Inc., N. Y.I Aug. 14 filed 150,000 shares ($100 par) cumulative preferred stock. Underwriter—To be determined by com¬ more share one Falls, S. D. off $3,000,000 loan from First National Bank Chi¬ and Harris Trust and Savings Bank. Chicago, bal¬ working capital. Offering deferred indefinitely. West Corp. development of gold min¬ Sept, 23 filed 10,000 shares ($50 par) 5% cumulative preferred and 120,000 shares ($2.50 par) common. Under¬ writer—H. M. Byllesby and Co. (Inc.), Chicago. Offer¬ ing—Of the common, 110,000 shares are being sold by stockholders/ The remaining 10,000 shares are reserved for issuance upon the exercise of warrants attached to the preferred. Price by amendment. Proceeds—To re¬ imburse treasury for purchase of machinery and equip¬ ment at a cost of $98,386 and payment for new building being constructed at estimated cost of $223,700; balance for purchase of additional machine tool equipment. PHILADELPHIA , holders of its old preferred ing properties. NEW YORK • petitive bidding. Probable bidders include Dillon, Read & Co., Inc.; Smith, Barney & Co., White, Weld & Co.; Glore, Forgan & Co.; Lehman Brothers and Lazard, Freres & Co. (jointly). Offering—New preferred stock will be offered on a share for share exchange basis to $1 par (Canadian cur¬ — George F. Jones Con¬ Burgess-Norton Mfg. Co., Geneva, III. Chase III. ine., Buffalo, N. Y. Price—$1 a share, American cur¬ The underwriting commission will amount to 20 *• '* CentraL Illinois Public Service rency. cents a share. Proceeds—For ^ cago. Offering—The stocks will be offered to the public at prices to be supplied by amendment. Proceeds—To ; j*' \\\~* 'Jv. "■ ' >S-x y*'' '« _ \ ^ May 29 filed 35,000 shares of $2 cumulative preferred stock, series A (no par), but with a stated value of $50 a share, and 175,000 shares of common stock (par $1). Underwriter—Paine, Webber, Jackson & Curtis, Chi- to redeem the out¬ Gas and ( Central Electric & Gas Co., Sioux shares will be offered publicly and the remaining 70,185 shares will be offered in exchange for 23,395 shares of Class B common of American Gas Machine Co., of Albert Lea, Minn., on the basis of three shares for each Class B share. Price—$10.25 a share. standing Class A common shares of American the outstanding preferred stock of Brunner. * i Of the total, 110,000 Proceeds—Net proceeds will be used capital, etc. Porcupine Gold Mines, Ltd., of Toronto, capital. of shares working capital. June 24 filed 400,000 Manufacturing Co., Utica, N. Y. Sept. 13 filed 180,185 shares ($1 par) common. Under¬ writers—George R. Cooley & Co., Inc., Albany, N. Y.,t and Mohawk Valley Investing Co., Inc., Utica. Offering— corporate Ontario offered to the public. Of the total common, Brunner available for Indefinitely delayed. ' additional will be the company is selling 67,500 shares to underwriters for public offer¬ ing and 55,177 shares are to be offered in exchange for outstanding capital stock of Consolidated Printing Ink Co., Quality Park Box Co., Inc., and John Beissel Co., which will become subsidiaries. In addition, stockholders of the company are selling 322,521 shares to the under¬ writers for public offering. Price—Preferred $103.50 a share; common $26.50 a share. Proceeds—Net proceeds to the company will be used to redeem unexchanged shares of 6% preferred at 110% and for increasing general corporate funds. Offering indefinitely postponed. in exchange be will balance fixtures; purposes. ing—19,079 preferred shares will be offered to 6% pre¬ ferred stock on a share for share exchange basis. Shares issued Ltd., Toronto Proceeds—$75,000 is earmarked for pur¬ equipment, and tools, jigs, dies $3 a share. and rate Unsubscribed underwriters. Proceeds—Net chase of machinery and Underwriters—Reynolds & Co., ($1 Newpar) York. Offer¬ f(referred stock and 427,558 shares common not shares held. underwriters. Price by amendment. Proceeds—Working officers, Canadian Admiral Corf). stockholders at common 7% 2 (letter of notfication) 60,000 shares of common. Offering—Price $2 a share. Underwriter—R. A. Keppler' & Co., Inc., New York. Proceeds—To demonstrate the Cameron Engine by flight tests in company-owned plane.; 18 Oct. a Ind. Aug. 21 filed 90,000 shares (no par) common. Under¬ writers;1— Glore Forgan & Co., Chicago. Offering — Common shares initially will be offered for subscription when market conditions improve. liabilities. possible outstanding $149,300 mortgage tent Central Soya Co., Inc., Fort Wayne, Blyth & Co., Inc., and First Boston Corp. share, and Harriman Ripley & Co. bid share. Stock will again be put up for sale bid of $28.33 a of Thursday, October 24, 1946 plans to call its $3 cumulative convertible pre¬ ferred stock for redemption at $55 a share plus accrued dividends. Funds for the redemption will be supplied by a short term bank loan. Proceeds from the sale of preferred, together with other funds, will be used to repay the bank loan. Indefinitely postponed. ^ Columbia Aircraft Products Inc., Somerviller June 26 filed 150,000 shares ($4 par) 30c cumulative preferred stock, convertible into commoni initially of IV2 shares of common for each share of preferred. Underwriters—Floyd D. Cerf convertible stock in the ratio Co., Inc., Chicago. Offering—Company offered 59,585Mr shares for subscription to present common stockholders of record Aug. 6 at $4.50 a share in the ratio of one share of preferred for each share of common held. Rights expired Aug. 20. The offering to common stockholders [Volume 164 - ' Number 4536 THE COMMERCIAL & FINANCIAL CHRONICLE competitive bidding. Probable bidders include Morgan Stanley & Co.; Lehman Brothers; Shields & Co.; Harriman Ripley & Co. and The First Boston Corp. (jointly).* Price by amendment. Sale Postponed—The company on Sept 19 postponed indefinitely the sale of the NEW ISSUE CALENDAR ** ' ' ■ > t (Showing probable date of offering) October 24, Baltimore & Ohio RR. 12 r noon V. (EST)., Foote Mineral v/; \v • ____Equip. Trust Ctfs. Co October 25, par) October 28, ..Capital Stock (EST) Leader Enterprises Inc Merchants Factors Corp.- Bonds Pref. and Common -Preferred Pacific Gas & Electric Co., 10 a.m. (PST)_- -Bonds Sharot-May Co.—————————Common October 29, Atchison Topeka & 12 (EST).' noon writers—Aronson, Hall ^ ■ - - *' ..' Northwest Airlines Inc 1946 Preferred > Common — •ouipment. manufacturing Offering date indefinite, v ——Preferred November 4, 1946 Felt & Tarrant Mfg. Co.— Films Inc.. Common Class A and Common November 5, 1 1946 Bonds - Debentures — Common - Plastic Molded Arts Inc by Equip. Trust Ctfs. Preferred 1946 Inc., . ' * a ' ' new annex to present share. No underwriter. To be offered by the company directly to the purchasers. For general corporate purposes. ' a Corp., New York June 28, 1946 filed 20,000 shares ($10 par) lative convertible preferred stock. 4%% cumu¬ Underwriters—To be supplied by amendment. Price—$12 a share of preferred and $7 a share of common. Proceeds—Estimated net pro¬ ceeds of $3,420,000 will be used for working capital. Commonwealth Telephone Co., Madison, Wis. Sept. 23 filed 16,071 shares ($100 par) $4 cumulative preferred. Underwriters Paine, Webber, Jackson & Curtis and Stone & Webster Securities Corp. Offering— Shares will be offered for exchange for $5 cumulative preferred, on a share for share basis, plus cash adjust¬ ment. Shares not exchanged will be sold to underwriters. Price by amendment. Proceeds—To redeem at $110 a — share, plus divs., all unexchanged old shares. , , . um, Tully & Co., Los Angeles. Price by Proceeds—Of net proceeds, $1,000,000 will additions for being sold by six share¬ . York. Offering—Stock will be offered to stockholders at rate of one-half share for each share held. Unsub¬ be sold to underwriters. Price by* amendment. Proceeds—To be added to general funds. scribed shares will and purchase improvements to of additional company's machinery Crooksville KO.) Oct. Jackson, Mich. unspecified number of shares (no par) Underwriters—To be determined by 18 > • Dow Oct. 17 Chemical V Cyprus Mines, Ltd., Montreal, Canada May 31 filed 500,000 shares of common stock Duluth (Minn.) Oct. • filed 62,000 shares ($25 par) 5% cumulative preferred stock and 71,950 shares (par $2) 40,000 by company and 31,950 by certain stockholders. Underwriters—Paul H. Davis & Co., and convertible stock ment. . buildings and to retire bank indebtedness. Offering date indefinite. ■ 1 # ; Joist, Inc., Washington, D. C. of notification) 1,471 shares of Offering price—$20 a share. No no par under¬ To advance interests of company. Deep Sea Trawlers, Inc., Seattle, Wash. Oct. *7 (letter of notification) 1,000 shares ($100 par) common. Offering—Price $100 a share. No underwrit¬ ing. For construction and operation of deep sea trawlers. * * * (letter of notification) 12,000 shares ($5 par> common and 8,000 shares ($5 par) Class B common. Offering—Price $5 a unit. No underwriting. For purchase of additional flight and servicing equip¬ ment, payment of deferred salary balances, for working^ capital and other expenses. A t Dumont Electric • Corp., . New York Aug. 29 filed 94,000 shares of common Underwriter Corp. — First Colony (10/28) stock (par 10cV Offering — 25.000 partnership. • III. Airlines, Inc. $6 of per share. Proceeds—Net the company's 25,000 eral corporate purposes. (par $1). Inc., Cicero, / 15 Class Durasite proceeds shares will Corp., Clearwater, Fla. from be for the gen¬ ' Oct. 11 (letter of notification) 99,000 shares of common purchase warrants covering 50,000 shares Of com¬ mon. Offering—Price $3 a common share and five cents and a warrant. Underwriter—Amos Treat & Co., New York. * writing. (11/5) ; • Price, Toronto. Offer¬ ing—Shares will be offered to the public at 75 cents a share. Proceeds—Net proceeds, estimated at $300,000, will be used for mining operations. capital stock. Mich. AkUg. 12 filed 80,529 shares ($1, par) class A stock, con¬ vertible into common stock (par $1). Underwriters— Maxwell, Marshall & Co., Los Angeles. Price—To public $10.25 a sharer Proceeds—Net proceeds, estimated at $694,761, will be used to pay off loans and accounts pay¬ able. Offering temporarily postponed. /:,./■ sale Underwriters—Sabiston-Hughes, Ltd., (letter Midland, shares being -offered by Dumont Electric Corp., and 69,000 shares by Dumont Electric Co., a limited rangement of existing facilities or for purchase or re¬ demption of the bonds presently offered. Business— Manufacture of wide variety of types of steel. 14 Co., filed Drayer-Hanson, Inc., Los Angeles cumu¬ Corp., Davisbilt Steel ~ / (letter of notification) 90,000 shares of $1 par Price, $3.25 a share. No underwriting. For working capital..-',-"■/: ;■ ;;*• \■■; .■ ;/'••• and company's $12,217,000 of 15-year 3Y^% sinking fund de¬ bentures, due 1955, at 102. The balance will be used for purchase or construction of property additions or rear¬ • •'. • and Price by amendment. Proceeds—Net pro¬ ceeds will be used to redeem on or before Dec. 31, 1946, 26 : to be expended for general corporate purposes. / plants York. common '• be used for Crucible July Manufacturing Corp., common. China Co. Danly Machine Specialties, & amendment. Steel Co. of America, N. Y. (11/5) > Oct, 18 filed $25,000,000 of first mortgage sinking fund bonds, due 1968. Underwriter—The First Boston New Boston. Electric $30,000,000 15-year debentures, due 1961. Underwriter—Smith, Barney & Co.,, New York. Price by amendment. Proceeds—To be added to cash funds - : Dormitzer t'lY;:/; stock. equipment, and $900,000 will be applied to the payment of outstanding bank loans. The remainder will be added to work-» ing capital. Business—Production of dairy products. -• • $5.50 — Dictaphone Corp., New York July 25 filed 65,347 shares (no par) common stock. Un¬ derwriter—Merrill Lynch, Pierce, Fenner & Beane, New • Oct. the sale of 851 shares of preferred. The remaining shares and all of the common are being sold by Ben Weingart, President and director. Company "will add the proceeds to working capital. an Stock is — - , of preferred stock. Under¬ — holders who will receive proceeds. pur¬ Shillinglaw, Bolger & Co., Chicago. Price by amend¬ Proceeds—Company will use proceeds, together with a $1,000,000 bank loan, to purchase machinery, Aug. 9 filed - machinery and equipment and to Consolidated Hotels, Inc., Los Angeles Aug. 9 filed 97,363 shares ($25 par) 4%% convertible preferred stock and 150,000 shares (50c par) common. Underwriter—Lester & Co., Los Angeles. Price—$25 a share of preferred and $9 a share of common. Proceeds -—Of the total, the company will receive proceeds from common by Typesetting Co., Detroit, Mich. share. Proceeds a writers—Kidder, Peabody & Co., New York; and Mitch- j. • Baltimore, Md. (letter of notification) 150,000 shares ($1 par) Cd., Price Dobbs Houses, Inc., Memphis, Tenn. Sept. 27 filed 75,000 shares ($1 par) common. Under¬ writer—Emanuel, Deetjen & Co., New York. Price—By v.Offering—Price $100 a share \ subject to the exchange of 1,100 shares of company's 6% and 7% preferred. No underwriting. For retirement of preferred. ' Spring Corp., Commonwealth Aviation Angeles. Sept. 25 filed 70,920 shares ($1 par) common. C. G, McDonald & Co., Detroit. Price writer /' . Los Temporarily postponed. Oct. 14 (letter of notification) 2,000 shares of 4% lative Class A preferred, Building Corp., Washington, notification) $300,000 of unsecured Offering price, at par. No underwriting. Par¬ Consumers Power Detroit Creameries of America, Inc., Los Angeles Oct. 17 filed 15.6,986 shares ($1 par) common. Under¬ of Price, $1 / Cor, exploration program. Indefinitely postponed. capital. V , & Proceeds—Of the shares being offered company is selling 100,000 shares and 15,000 shares are being sold by a stockholder. The company will use its proceeds to provide additional factory space and • 21 . • common subsidiary, balance working capital. class B stock. working Douglass Proceeds—Part of the estimated net pro¬ ceeds will be used to pay a bank loan. The remainder, with other funds, will be used to expand a drilling and share. Underwriters—First Boston Corp., New York. Price by amendment. Proceeds—Go to Joseph Levy, President, selling stockholders. Offering date indefinite. stockholders will be offered to the public through underwriters. Price —$5 a share. Proceeds—Approximately $55,000 for pay-S tnent of Federal taxes; $250,000 for payment of a loan; $50,000 as a loan to Palmer Brothers Engines, Oct. Nelson amendment. Under¬ Crawford Clothes, Inc., L. I. City, N. Y. Aug. 9 filed 300,000 shares ($5 par) common " excluded the two principal stockholders who waived their rights to subscribe. The remaining 90,414% shares -and shares not subscribed to Comfort , . Pref. and Common construction of ' stocks common Underwriting—H. M. Byllesby and Co., Inc., Chicago, , 4,1 > . November 25, 0 Derby Oil Co., Wichita, Kans. July 19 filed 131,517.3 shares ($8 par) M * , Maltine Co.—. payment for office building. : York office building. 1946 Chicago & North Western Ry. 12 noon (CST)—± notes. and space be 15 and per will amendment. Proceeds—Net proceeds will be used for construct a new expansion of business consisting of airline The balance will be added to catering and working restaurant capital. Offering date indefinite. and coffee shop/operations. Date of 1 ,v offering indefinite. • 1946 Corp.-—* November 7, tial $8.25 DeMornay-Budd, Inc., New balance Copco Steel & Engineering Co., Detroit • Aug. 19 filed 115,000 shares ($1 par) common. Under¬ writer—E. H. Rollins & Son, Inc., New York. Price chase November 6, (letter Price The by amendment. Crucible Steel Co. of America 17 Co. for. (letter of notification) 270,000 shares (20c par) common. Offering—Price $1 a share. No underwriting. For expansion of plant and business. preferred. Underwriters—Otis & Co. and Prescott & Co., Inc. Offering—To the public. Price— $25 a share. Proceeds—Estimated net proceeds of $1,356,200 will be used to redeem its outstanding 4% deben¬ tures, due 1967, to pay certain debts and for additional —Common People's Service Corp Zatso Food Corp.—.— Oct. • Oct. convertible ^November 1, 1946 Medical & starting operations of four plants, two of which al¬ ready have been contracted added to working capital. Cooper Tire & Rubber Co., Findlay, Ohio July 17 filed 60,000 shares ($25 par) 4%% cumulative —.Common Espey Manufacturing Co.. Standard Brands, Inc Columbia of * Proceeds—To repay demand loans and for general funds. (Originally company filed for 80,000 preferred shares par $25 and 350,000 common shares.) ,'i~l Sales Agreements ! October 30, Pari-Mutuel Totalizer :• —-Equip. Trust Ctfs. — Dow Chemical Co and Continental-United Industries Co., Inc. Aug. 2 filed 150,000 shares ($1 par) common. 1946 Santa Fe —Conditional Central of Georgia Ry. Company anticipates expenditures of $300,000 in 1946 and $300,000 in 1947 for equipping and absorbing costs Alstyne, Noel & Co. Offering—Price by amendment. Proceeds—For rearrangement and expansion of the com¬ pany's manufacturing plants, acquisition of additional tools and facilities, and for additional working capital requirements. Offering temporarily postponed. Common added purpose. (10c Underwriters—Van ..Common Dumont Electric Corp 2 filed proceeds to company of $1,007,913 will be general funds to be applied for corporate to Continental Motors Corp., Muskegon, Mich. July 8 filed 250,000 shares 4%% cumulative convertible preferred stock, Series A ($50 par). -Common El Paso Electric Co., 11:30 a.m. net share. No underwriting. equipment and for a , Capital Stock — common. Price purchase , i94«^2:l^1^:.',r;■■{:^ Black, Sivalls & Bryson Inc.___ Brewers Best Associates, Inc.— Camro Co. Co., Inc., Jackson, Miss. 300,000 shares (200 par) common. Under¬ writers—Names by amendment. Price, $8 a share. Pro¬ ceeds—Of total, company is selling 150,000 shares an«L remaining 150,000 shares are being sold by Apponaug Manufacturing Co., Inc. Principal stockholder estimated advertised for Sept. 24. 12% cents plant machinery working capital. : To 1946 Helicopter Air Transport Inc._ were Continental Mining Co., Kellogg, Ida. 14 (letter of notification) 1,000,000 shares Oct. _____Preferred and Common Delta Chenille Oct. stock. Bids 1946 2125 .For machinery, plant renovation and Offering date indefinite. working capitaL y V El Paso (Texas) Electric Co. (10/28) Sept. 27 filed $6,000,000 first mortgage bonds, due 1IH6L Underwriter—By competitive bidding. Probable bidders include Stone & Webster Securities Corp.; Halsey, Stuart & Co. Inc. Proceeds—Net proceeds together with gen¬ eral funds, will be applied to the redemption of its' $6,500,000 of first mortgage bonds, Series A, 3Y4%. due 1970, at 108. Bids Asked—Bids for the purchase of the will be received up to 11:30 a.m., EST, Oct. 26 90 Broad St., New York City. bonds at office of Epsco, Inc., © Oct Elgin 16 (III.) Sweeper Co. (letter of notification) common. To be offered prior preference stock common rently, for each in 57,462 shares (no par> exchange for outstanding (no par) on basis of 6 shares ot of prior preference. Concur¬ share holders of prior preference surrender their stock and receive are $25 given option to., in cash and one (Continued from share of be $5 a in common Chicago, to page exchange. a Offering—Price $35 a common- Ross & Co., Mullaney, 1 ' Empire Millwork Corp., New York Foster & Kleiser Co., offer to holders of Class A Co., Salt $1,000 of insurance at $2 a share. No underwriting. capital and surplus required by law to qualify old line legal reserve capital stock life insurance com¬ Shares are ' , >■{.* * ' K A . , ' V < ' '■ "l •>- Espey Manufacturing Co., \ 1 ■> •»' - (10/30) : N. Y. Inc., j,r- 14 (A. B.) Farquhar < .• .-••••• 1 •• :v-j' tract entered into last • ., dendsi! li also and Aronson, Hall& Proceeds—To pay -'j ;■ - - Hartfield Engineering and Manufacturing Co., General • St. par) 5% cumulative iion-v Johnston, Lemon & Co., Washington, D. C. Offering— preferred and 100,000 shares ($2 par), common.To be offered to the public at $8 a share. Proceeds—? Underwriters—Dempsey, Tegeler & Co., and J. W. Brady Company is selling 60,000 shares and stockholders are! &' Co., St. Louis. Price—$10 a preferred share and:$5 a!! selling 40,000 shares. The company will use its proceeds] common share. Proceeds—Net proceeds, estimated at to pay the costs of opening additional stores and to/ex¬ vertible ($25 par) f pand merchandise in its existing stores. ; porarily postponed, .. •• outstanding bank loans* Feb, 27 filed 185,000 . Shares July 24 filed -200,000 shares ($1 par) common stock* Underwriter—Van Alstyne, Noel & Co. Offering—Offering does not constitute new financing but is a sale of currently outstanding shares owned by members of the Meyers family, owner of all outstanding stock. After : giving effect to the sale and .assuming exercise of certain ¥ warrants and - an ' 4 Felt A ' , Tarrant / " / Manufacturing Co. Sept. 25 filed 251,340 shares of Underwriters y common ;• ' - (Canadian Funds). 1' (11/4-15)] stock (par $5). Lee Fiduciary Management, Inc., Jersey City, N. J. a company may ment and share. Proceeds—To capital so expand operations in the field of develop¬ reorganization financing. films Inc., New York - | , (11/4-8) filed 100,000 shares ($5 par) class A stock and 300,000 shares (10 cent par) common stock, of which; 200,000 shares reserved for conversion of class A. Each: initially convertible into 2 A Underwriters—Herrick, Waddell & Co., Inc., New York. Offering—To be offered! publicly at $8.10 a unit consisting of one share of class A H stock and one share of common stock. Proceeds—$201,- : QOO.for retirement of 2,010 shares ($100 par) preferred ? stock at $100 a share; remaining proceeds, together with: other funds, will be used for production of educational share of class A common stock Florida Food Sept. 23 (letter of notification) 26,400 shares Fla. Class A1 working capital. stock an share. commission to the selling, exercise of options. Price—$5 a of company and for on Foote Mineral Co., Philadelphia and 83 shares of preferred on (10/24) 1,025 shares of common behalf of Norman Wood-: ' • 'i refinancing - ■ /-' ' Griggs, Cooper & Co., St. Paul, Minn. construe-: vPP P; . 12,000 shares ($1 par) f common. Underwriters—Kalman & Co., Inc., St. Paul. Price—$25 a share. Proceeds — For improvement and modernization program. Offering indefinitely postponed. (letter of notification) Grolier Society, Inc., New York July 29 filed 18,500 shares at $4.25 cumulative preferred stock ($100 par), with non-detachable common stock purchase warrants entitling registered holders of shares of the $4.25 preferred to purchase at any time 64,750 shares of common stock at $16 a share at the ratio of 3% common shares for each preferred share held; and 120,-j Proceeds—Net proceeds will be added;1 date indefinite. ;; \ 3 * by amendment. . indebtedness. Partly as a Proceeds—For & Co.,-Cleve-; the preferred; stockholders are selling the common shares., Price—$25 a share of preferred. Price for the common, shares and Crosby, President and James Manoil, Treasurer, will act as selling agents. Offering—Of the total 500,000 shares will be offered to the public and the remaining 136,500* shares will be reserved for issuance partly in payment agents and partly convertible ($1 par) common stock. Underwriters—Otis land, Ohio. Offering—Company is selling City, Nev. : York of 4%% ($25 par) cutoiu-/ preferred stock r and 33,884 shares 28,1946 filed 20,000 shares lative Canyon-Boulder Dam Tours, Inc., Boulder Sept. 3 filed 636,500 shares ($5 par) capital stock. Under¬ writing—There will be no underwriting but Everett N. firms: Buckley Bros.; Durand Earle May & Co., Palo Alto, C&liff» (Henry) & Co., Inc., New Holt June Temporary postponed. Grand v: of the following Co., Tucson, Ariz.; J. to replenish working capital. departments. and 'v-.:;v.1 Hollywood Co|orfilm Corp., more selling 120,000 shares and 90,000 shares are being sold by shareholders. Company will use proceeds for expan-P sion and modernization work, establishment of new; retail 42 East Ave., share of each.1 and working 1 .; ! v- Burbank, Calif.; . Oct. 16 (letter of notification) 119,500 shares of ($1 par)' capital. Price, $3 a share. No underwriting contract, how¬ ever, 55,000 shares to be issued to or throiigh H. R. O'Neil , of Buckley Bros., Los Angeles, will be sold by one./or},: Goldring Inc., New York Sept. 3 Pet. 16 (letter of notification) Publishing Co,, Inc. (letter of notification) 10,000 shares of preferred* (par $5) and- 10,000 shares of common stock*: -/s-v' e Sept. 27 filed 210,000 shares (100 par) common. Under-: writer—Merrill Lynch, Pierce, Fenner 8c Beane, New: York. Price—By amendment: ] Proceeds—Company is $1). Underwriter—Blair & Co. Proceeds—Working capital. Company was formerly known as E. H. Borchardt & Co. Issue may be placed privately. Inc., Philadelphia - capital. Business—Publishing. at $11 a share. Price by amendment. Offering temporarily postponed. tion program. Food Fair Stores, \ Helicopter Digest purchase warrants to the selling stockholders at to purchase up to Aug; !, working capital and funds for development and Aug. 5 filed 60,000 shares ($15 par) cumulative preferred; stock. Underwriters—Eastman, Dillon & Co. Price by amendment. Proceeds—To be used to redeem 15-year 3%% sinking fund debentures, due 1959; and $2.50 cum¬ ulative preferred at $53 a share. Balance will be added > to working capital. Temporarily postponed. ? (par $1). Underwriter—Frank P. Hunt, Rochester, N. .Y* Price—$6 per unit of one Proceeds—Purchase of machinery, paper is Products Corp., Belle Glade, Camden, N„~ J. 'Helicopter Air Transport, Inc.; • (10/25 ) ■ Oct.-18/(letteroLpiotification)'50,000-shares* of/?capitali stock (par 10c). Underwriter—Putnam> &-Uo. as to. 5,500 shares;; issuer plans sale of 44,500 shares ■ for its own' : account. Price, $3 per share. Proceeds—For acquisition of additional .helicopters and related equipment: and ^ York stock (par $10) and 26,400 shares of common stock (par*' • • ,!-• Alstyne, Noel & Co. Offering—The 300,000 shares are Issued and outstanding and being sold for the account, of certain stockholders. Company has also issued 55,000 of • .//J- Oct. 15 stock. films. amendment. pffering-r»-Pirice Aug. 28 filed 355,000 shares ($1 par) common, ol/which: 55,000 shares are reserved for issuance upon, the exer-'. else of stock purchase warrants. Underwriter — Van stock Stock amendment. . June 25, shares of ing Co.;Underwriter—By i 1949, common stock of the company increase shares certain stockholders. being sold by are 10 cents a share entitling them Sept. 27 filed 867,420 shares ($25 par) common. Under¬ writer—No underwriting. Offering—Stock will be of¬ fered for subscription to common stockholders on the! ibasis of four additional shares for each one share held. Price—$3 Proceeds—For; mine development. Glensder Textile Corp., New Higginson Corp. and Kidder, Pea- ! body & Co. Offering — Shares are being sold by share¬ holders after consummation of proposed changes in com¬ pany's capitalization and the merging into the company of Comptometer Co. Price by amendment. ; 4, — ^ Oct. 2 filed 300,000 shares ($l par) stock.;Underwriter—- , Mark Daniels & Co., Toronto. Price—40 cents a share r option, the Meyers family will retain ownership of approximately 58% of the common stock. Offering temporarily postponed. V " ... Tdrontof -Can. 4 Glencair Mining Co. Ltdr, ' { Raplds, Mich. of commomstock ($2 par).! acquired by selling stockholders in exchange for 432,900 shares of common stock (par $3) of American Engineer¬ July 31 filed 50,000 shares of $1.25 cumulative converti¬ ble preferred stock series A ($20 par) and 150,000 shares/ (10c par) common, all issued and outstanding and being sold by eight selling stockholders. Underwriters—Van Alstyne Noel & Co. Price by amendment...Proceeds— To selling stockholders, Offering temporarily postponed. Frocks, Inc. Offering tem^j Hayes, Manufacturing Corp., Gr. * on Inc., Los Angeles Stores, Oct, 21 filed 50,000 shares ($10 cumulative concommon; and $893,000, will be added to working capital and will be an unspecified number of common shares to permit con¬ used to finance the company's new product, the "Gemversion of the preferred. Underwriter—Stroud & Co., : co" space cooler (an air conditioning unit) and other Inc., Philadelphia. Price—By amendment. Proceeds — corporate purposes. Business—Manufacture of shapers, Proceeds will be used to redeem $355,350 4^% sinking which are machine tools, » •" li: / fund mortgage bonds, due Aug. 1, 1957, to pay off • certain contracts and chattel mortgages of $72,000 and Glen Industries Inc., Milwaukee, Wis. Fashion ^ June 27 filed 400^000 shares ($1 par) Common / stock.] Underwriters—Van Alstyne, .Noel & Co., New York, an,d Louis, Mo. vertible preferred; 45,000 shares ($5 par) $800,000 to reduce principal wiR;.use;upin,O5iimatelY^402,00 cost of ac^^^!;consh^tio?iyand;% the ^purchase of a manufacturing plant ■ in .Chicago; ance for working.papital.,Offering-date •indefinite. plant, and for .working capital.^\ In¬ equipment of new definitely postponed, Co., York, Pa. Sept. 26 filed 30,000 shares •• • & Co. (letter of notification) 59,500 shares ($1 par) common; stock purchase warrants, 40,000; the under¬ writer to designate who shall subscribe to 22,500 and the company to designate who shall subscribe to 17,500; not exercisable until the expiration of one year after public offering. Offering—Price $5 a common share and 5 cents sv warrant. Underwriting—B. G. Cantor & Co., New York. For payment of debt and working capital. Oct. Benton Stores, Inc. and its affiliates from William Book-; and Maurice Hoppin pursuant to terms of a con- < man . , ' i • Thorndike, Inc., New York. Price, $4.50 a share. Pro¬ of all the outstanding stock of the & ceeds—For purchase August 15,. Business—Operation of} shares. Pricerrr$6-a share. Proceeds iH stores telling women's kand children's wear. —For purchase of sweet potatoes, plant expansion, addi/ •Hammond lnstrument :Co., Chicago tjonal storage facilities, research'and. development*work Aug. 8 filed 80,000^ shares i($l;: par) common. Under¬ and working capital. Ju writer: Paxil H. Da vies Z&lCo jChicago. 't vV. ,V. ."'"fVj **«ji ^ *** * V 'JZ \ >,»! 1 *j'•S'* 'A'"'"'••• Price by amend-' : General -Bronze Corp., L. I. nient:^ Proceeds-r^et vproceeds ?wiU be hsed ;to xedeemi July 26 filed 115,000 sharesof./cumulative convertible!, its' outstanding 6% cumulative preferred stock. at an <•; estimated cost oL*$213,258r exclusive of accrued divi-| preferred stock ($25 par). Undervi^it^FS^W.^C. Langley being sold by stock¬ holders. (50c par) common. Under-, Gillespie & Co., Inc., and Childs Jeffries the remaining 100,000 t, 5 filed 105,000 shares common stock (par $1). Underwriter—Straus & Blosser, Chicago. Price—$11.50 — ] -• York 100,000 shares 23 filed Oct. writers—E. F. is selling 350,000 shares and two stockholders,.. Roland E. Fulmer and Louis H. Newkirk, Jr., are selling Ero Manufacturing Co., Chicago Proceeds have agreed to waive Halliday Stores Corp., New • Columbia, S. C. $3 per share.*1 Holders preemptive rights. Offering date indefinite. their company Sept. share. (par $l).j Offering—Btock is being of¬ fered to present shareholders at of approximately 200,000 shares making exchange preferred on share for share Fresh Dry Foods, Inc., Co., Jacksonville, Fla. 17 filed 270,000 shares of common stock Underwriters—Blair & Co. Aug. 30 filed 450,000 shares (100 par) common. Under-, writer—Newkirk & Banks, Inc. Offering—Of the total ; To raise a Gulf Atlantic Transport'n Jan. Offering temporarily postponed. price by amendment. per i - cash adjustment. Proceeds—Approximately $1,060,950 for redemption of class A preferred; balance for expansion, working capital, etc. Dividend rate and (letter of notification) 90,000 shares of common. to policyholders at the rate of 11 shares ' < basis plus a be offered pany. mon $14 a share. /Proceeds—To retire $6 cumulative ] preferred, pay notes," discharge a lo^n. Offering tem¬ porarily postponed. t *• ♦ * '' stock, all Price; by San Francisco Co., Inc. Offering—Underwriters are & fering temporarily postponed. an Torrey. Graham, Jr., 100,000 shares of issued and out¬ Prices, preferred $100 a share; com-.| standing common. July 29 filed 100,000 shares of $1.25 cumulative con¬ vertible preferred stock (par $25)! Underwriter—Blyth new lines of products and expand the business. The-, remaining 100,000 shares of common stock and the pre¬ ferred shares will be sold by present stockholders. Of¬ Oct. 16 common Co., Inc. and Byllesby and J. C. York indefinite. date amendment. Offering add Equitable Life & Casualty Insurance Lake City Fabrics Corp., New July 29 filed 110,000 shares ($1 par) outstanding. Underwriters^Cohu & :y Aug. 28 filed 50,000 shares of $1.25 cumulative converti¬ ble preferred stock, (par $25) and 150,ObO shares of common stock (par $1). Underwriters—Van Alstyne, Noel & Co. Proceeds—Corporation will receive the pro¬ ceeds from the issuance of 50,000 shares of the common stock which will be used to increase productive capacity, • M. Philadelphia. by stockholders accepting this option at share. stock. Underwriters—H/ Offering—Underwriters to'!] purchase from the company 18,500 shares of preferred! and 20,000 shares of common; and from Fred P. Murphyi shares df $1 par common 000 preferred share. Underwriter —r Butcher & Sherrerd, Proceeds go to the selling stockholders. - offering to purchase the shares of common are recived Thursday, October 24, 1946 CHRONICLE and Anita M. Wood¬ share and $100 a director of the company, ward, ward. 2125) Foreman To & FINANCIAL THE COMMERCIAL 2126 to, general funds. "Offering ;: ;■{:i}-.,>:¥()■¥ ■ ■ rHp (Edward) Co.,,Los Angeles • , Oct 12 (letter of notification) 20,000 shares of no parr; common. Offering—Price $4.50 a share. No under-,, writing. For working capital. \ h > * ** { t Hyman . .Illinois Power Co., Decatur, III. filed 200,000 shares ($50 par) cumulative pre-'> ferred stock and 966,870 shares (no par) common stock. June 17, Underwriters—By competitive bidding. Probable bid-; ders include Blyth & Co., Inc. and Mellon Securities : (jointly) and Morgan Stanley & Co. and W. E. (jointly). Proceeds—Net proceeds from Ihe sale of preferred will be used to reimburse the com*: pany's treasury for construction expenditures. Net pro¬ ceeds from the sale of common will be applied for re¬ Corp. Hutton & Co. cumulative convertible preferred stock: common prior to the redemption date. The balance will be added to treasury funds.; Company has asked the SEC to defer action on its finflnrino nroeram because of present market conditions/ demption of 5% not converted into Volume 164; Number 4536 THE COMMERCIAL & FINANCIAL CHRONICLE International Dress Co., Inc., New York Aug. 28 filed 140,000 shares of common stock (par $1). Underwriter—Otis & Co. Offering—Price H * $10 Proceeds—Selling stockholders will Offering date indefinite. —Michigan;wilLu$£vHet proceeds from at 106.75 and interest. proceeds. • . >,y. ■ • ' redeem be purchased 105 and accrued dividends all $ ^ —$10 ex¬ 27 filed 100,000 shares ($1 par) unexchanged stock. common & Co., Detroit. Offering— To be offered publicly at $8.25 a share. Proceeds—Pur¬ chase additional facilities, expansion, etc. (III.) Citizens, Inc. (letter of notification) $25,000 of 4% preferred stock and $25,000 4% debentures. Offering—Price $25 a unit." No underwriting. For working capital. definitely postponed. Oct. 15 | Lake State for Co., Detroit. 100,000 shares & Offering—Price $2.50 a share. Proceeds .for working capital to enable issuer to produce its prod¬ uct, an" automatic dishwashing machine in the commercial .quantities. Offering delayed;} due to market basis • v • •. & com¬ .share and $5 a preferred share. Underwriter— Gearhart & Co., Inc., New York. Proceeds—To replace ( working capital used to promote new publication called Fashion Trades and to provide : additional • working Macco Corp., Clearwater, j - Calif. (par 40c). 25 -of Oct. 15 (letter of common 175,418 con¬ • Merchants Factors Corp., New York (10/28) 'Oct. 21 (letter of notification) 2,877% shares 7% cumu¬ lative and participating preferred stock (par $100). Un-" .some $100 Co. share for by common stock and • stock preferred. Of the being registered, company is selling 40,000 shares, Middle West is selling 57,226 shares and Halsey, Stuart be ■ Higginson Corp., & Proceeds—Shares Chicago. Webster are out¬ Tempora¬ Price—By amend-' ment. Proceeds—The stock is issued and outstanding and is being sold by shareholders. Names of the selling stockholders and the number of shares to be sold be by each supplied $35 a Co., Inc. 8,500 shares of share. • common Underwriters— Proceeds—For redemp¬ National Hie & Mfg. Co., Anderson, Ind. 7 (letter of notification) 50,000 shares stock/ rate of 1 share No June Underwriters—Newburger & Hano, and Kobbe, Gearhart Price, $6.75 a share. Proceeds—Net pro¬ the company from 62,000 shares, estimated at $350,200, will be applied as follows: About $111,300 for retirement of outstanding preferred stock; $41,649 to ' purchase 100% of the stock of two affiliates, and bal¬ & for each 2% shares underwriting. capital. v ance the other 3,000 The purposes. shares will to go pro¬ selling, O-Cel-O, Inc., Buffalo, N. Y. price, at ■ 450 shares par of common. $45 par Offering Not underwritten. par. Ohio Associated (•..(.' Telephone Co. Sept. 11 filed $3,250,000 of first mortgage bonds, 2%% series, due 1976; and 35,000 shares (no par) $2 cumulative preferred bonds to be sold privately. Underwriters Paine, Webber, Jackson & Curtis and Stone & Webster Securities, both of New York. Offering—Of the preferred being registered, 21,000 are being sold by the company and the remaining 14,000 are being sold by General Telephone Corp. Price—By amendment. Proceeds—Net — proceeds to the company will be used to redeem its $1,770,000 of 3V2% first mortgage bonds, due 1970, at107%%; to repay $1,450,000 in bank loans; to pay Gen¬ eral Telephone Corp. $937,518 in retirement of its 6% cumulative preferred owned by General and to reim¬ burse its treasury for funds previously expended. held. Old Town Ribbon & Carbon Co. Inc., Brooklyn Sept. outstanding Price—By are being sold by 140,900 shares ($5 par) common. The being sold by three stockholders. Underwriter —The First Boston • ■ > . Oxford 11 - filed are ment. Corp., New York. Price—By amend¬ ' . . ;(.;:(( Radio Corp., Chicago , '■ .y • . (letter of notification) 60,000 shares ($1^ par) share. UnderwriterFloyd D. Cerf Co., Inc., Chicago. For payment of note/ purchase of machine tools and testing equipment and "for general corporate purposes. For additional working and 19 shares Offering—Price $5 a Pacific Gas & Electric Co. (■;( and from stockholders. Offering temporarily postponed. Oct. Newburgh Steel Co., Inc., Detroit Aug. 2 filed 30,000 shares of 6% cumulative convertible preferred (par $10), and 30,000 common shares ($1 par). Underwriters—Names by amendment. Offering—Shares .issued to $197,000 for other corporate ceeds Oct. are Co., Incr ceeds •common. . ($1 par) Offering to stockholders for subscription at the amendment. Port Arthur, Texas J'.: V'/ (letter of notification) 1,000 shares each of $100 par cumulative preferred debentures and $100 par cumu¬ lative preferred stock; and on behalf of Lyle Bishop, President, and his family, 1,000 shares of no par com¬ mon. Offering—Prices $100 each for the debentures and preferred and $75 a common share.; No under writ- ( ing. For purchase of equipment and working capital. byr amendment. National Manufacture and Stores Corp,, Atlanta Oct. Nu-Air-Wa Co., Oct. 14 17 (letter of notification) preferred and 450 shares of $5 bonds, common will bidders in- Blyth & Co., Inc.; The First Boston Corp.; Stone* & Webster Securities Corp., and Harriman Ripley & Co., Inc. (jointly). Of the shares registered, 182,667 are being sold by Midland Realization Co.; 54,426 by Mid¬ land Utilities Co., and 146,923 by Middle West Corp. Oct. outstanding $2.50 class A non-cumulative stock. Postponed indefinitely. exchange basis to holders of itsf prior lien, $6 no-par prior lien, 6% (no par) (par $1). Bosworth, Chanute, Loughridge & June 12 (letter of notification) stock. Offering price, ' common Indefinitely offered preferred and $6 , an unspecified number ($2.50 par) com¬ shares. Underwriters—First Boston Corp., New York, Lee will ' Co. elude • Underwriters—Stone amendment. Clement A. Evans & share outstanding 7% • shares of tion of ($100 par) cumulative preferred ($10 par) common stock. Un¬ derwriters—To be determined by competitive bidding. Probable bidders include Blyth & Co., Inc.; Kidder, Peabody & Co.; The First Boston Corp.; Harris, Hall & Co. (Inc.); Merrill Lynch, Pierce, Fenner & Beane, and Ira Haupt & Co. Offering—New preferred will be a ; , r Price mon stock and 120,000 shares on . National Aluminate Corp., Chicago share. Purpose, working capital. due 1976; 14,000 shares v Sept. 27 filed but Michigan Gas & Elec. Co., Ashland, Wis. June 24 filed $3,500,000 of series A first mortgage , standing and are being sold by stockholders. rily postponed. company may employ individuals to promote the sale of the stock. Price, per 13 filed 250,000 preferred stock). Securities Corp., and shares present ; C.). Co., McKeesport, Pa, to ($1 par) common stock. 'Underwriters—Goldman, - Sachs & Co., and Hemphill, •Noyes & Co. Price—By amendment. Proceeds—Net pro¬ ceeds go to 11 shareholders who are selling the stock : being registered. Offering temporarily postponed, Iderwriter—None at (G. June 28 filed 28,960 shares of 4%% cumulative preferred stock ($100 par), 250,000 shares of common stock ($1 par) and warrants for 28,960 common shares (attached ( 11/7) Service ! Nugent's National Stores, Inc., New York 21 filed 85,000 shares ($1 (par) common stock. are v May McEwen Kaiser Co., Burlington, N. C. filed per share shares ofof preferred and 20,000 shares National Alfalfa Dehydrating & Milling Co., Lamar, Colo. * Plains, N. Y. 22 20,000 $5.75'per share. Proceeds—Of postponed. ( vertible preferred stock (par $100). Underwriter—East¬ man, Dillon & Co. Price—$100 and dividend. Proceeds together with funds from loans, will be applied to con¬ struction cost of new plant and laboratories at Morris Aug. Remaining will be offered to officers and key em- ierred stock at $109 a share plus dividends. „ £ notification) 2,900 shares of 4% % will Underwriter—Smith, Barney & Co. Price by amendment. Proceeds—Redemption of outstanding 4%% pre- Utility Holding Company Act.w*• common. Headed by Stern Brothers & Co., Kan— Preferred and 20,000 shares of be offered publicly. —- common common June Lynch, Pierce, Fenner & Beane. Proceeds—The shares are being sold by Consolidated Electric and Gas Co., parent of Maine Public Service, in compliance with geographic integration provisions of the Public Public offered under competitive bidding. Probable ; • par¬ Offering Murphy Merrill Indiana underwriters. Proceeds—To pay bank loans; purchase of additional equipment and facilities. Co., Kansas v• (,((v (and to increase working capital. Corp.; Kidder, Peabody & Co.,* and Blyth & Co., Inc. (jointly); Harriman Ripley & Co; Coffin & Burr and Proceeds—To be sold to Brewing being sold by the company. Proceeds— Proceeds together with other funds, will be used to pay off $181,909 balance of note held by Schroder Trust Co., New York; to finance a proposed expansion program filed Maltine Co., New York common ~ and Preque Isle, Me. 150,000-shares ($10 par) capital stock. Underwriters—To be determined through competitive bidding. \ Probable bidders include The First Boston June share. a Indefinitely postponed. . fered^td^public. ^^OO share Maine Public-Service Co., • Price—$16 Barney ( ployees at $4.75 each. Price—Preferred $25 company. 4 City. sas shares — / Smith ticipating preferred and 40,000 shares ($1 par) supplied by amendment Offering—Stock will be offered publicly in the U/S. at .40c a share (Canadian money). Proceeds—Proceeds, .estimated, at- $75,000, will be used in operation of the , and Underwriters % ■ . Co. •'/%.(/ Mines, LtdL, Toronto stock indefinitely. Aug. 28 filed maximum of 384,016 shares of stock. Underwriters by amendment as shares ■•//v;/(•/'/ Sept; 25,-filed 41,327 shares ($25 par) 5% cumul. . June 7 filed 250,000 shares of capital Underwriters Names to be ////;/.'•/ temporarily postponed. -• Northern Mountain States Power Co. Muehlebach (George) *■(/ City, Mo//(;r Sept. '25 filed 100,000 shares <$1 par) ? capital stock. Underwriter — Dean Witter &.Co., Los Angeles. PriceBy amendment. Proceeds :^ To pay off outstanding ;bank loans. ">;r Mada YelIowknife Gold V*.' '• Sale postponed Northwest Airlines, Inc. (10/29) Co., Inc.; Kuhn, Loeb Sept. 19 filed 271,935 shares ($10 par) common. Under& Co. (jointly); Harriman, Ripley & Co.; The First Boston Corp." Offering—Shares, ( writer — Auchincloss, Parker & Redpath, Washington, D. C.; The First Boston are owned by Standard Gas & Electric Co. and con¬ Corp., and Hornblower & Weeks, New York. Offering—Shares are stitute 56.39% of the offered for subscription company's outstanding common. to common stockholders of Sale Postponed—Standard Gas & Electric record Oct. 15 in ratio of one Co. asked for additional share for each two shares bids ;for the; purchase of the stock on held, at $18.50 per Sept. 4, but the share. Rights expire Oct. 28. sale has; been Unsubscribed shares will (letter of notification) 150,000 shares of (100 57,000 shares ($5 par) 6% cumulative mon , of present holders. June 6 filed 140,614 shares of common stock (no par). Underwritersr-rTo be determined by competitive bidding. Probable bidders include Blyth & . common and > »'■■■■'''■■■'TC 12. Underwriter—Cruttenden & Co. Offering—All shares are issued and outstanding and being sold for the account ■ August 19 (letter of notification) 14,000 shares ($10 par) common stock, offering price $20 a share. Underwriter— Clany M. Seay, Jackson, Miss, will undertake to obtain signatures authorizing subscriptions for the stock to create capital and (surplus for operation of business. Company is to be organized in Mississippi. ; t > I " (Leader Enterprises, Inc., New York ( 3.0/28-31) /capital. The underwriters Mississippi Fire, Casualty & Surety Corp. • working capital, a withdrawn Aug. selling stockholders. Langevin, President of the Company. Offering -Price $5,125 a unit consisting of one share of Class A stock and one-half share of common. 3,000 units are reserved for sale to certain officers and employees of the company, s Underwriter—Hill, Thompson & Co., Inc., New Yprk. Proceeds—For payment of indebtedness and to increase cents share. - , Northern Engraving & Mfg. Co., La Crosse, Wis. Aug. 29 filed 70,000 shares ($2 par) common stock. wdrk» Business—Mining. of Carl C. preferred, Series A. Price—10 a were 1,000 shares sold for every '■ , stocks, con¬ par) com¬ mon on behalf of the company and 19,000 shares of ($4^ .par) Class A and 9,500 shares of the common on behalf' convertible shares for a and for the issuance of $22,500,000 of bonds and 2,300,000 of new common shares. The SEC has extended to Nov. 30 time within which refinancing may be carried out. Bids for the purchase of the bonds and the common stock which were to be received by the company Aug. 13 a discount on the 1,000,000 shares of 15 cents /each. Proceeds—For exploration and mine development Oct. 3 Sept. 26 Ltd., Toronto, (will receive ,, Langevin Co. Inc., New York par> of 250 -the company. Price—60 cents conditions. (letter of notification) 39,000 shares ($4 par) vertible Class A stock and 19,500 shares (10c Mines 1,250,000 shares ($1 par) common. Underwriter—R. J. Hale, East Aurora, N. Y. Offering—Of the total company is selling $1,000,000 shares and the re¬ maining 250,000 shares are being sold for the account of the principal underwriter, brokers and dealers, which shares they will receive as additional compensation on ($1 par) Underwriter—Keane Gold Oct. 21 filed Products, Inc., Jackson, Mich. benefit of issuer. Midas Yellowknife Canada • Aug. 27 (letter of notification) ; common • • President Corp., White, Weld&Co.-Kidder, Peabody & Co. (jointly). Offering—Bonds and common stock are being offered in connection with a compromise recapitalization plan approved by the SEC, on June 24, 1946, which among other things provides for the elimination of all out¬ standing debentures and preferred and common Offering in¬ Kankakee Friedman, New England Gas and Electric Association July 11 filed $22,500,000 20-year collateral trust sinkingfund Series A bonds, and a maximum of 1,568,980 com¬ mon shares ($5 par); Underwriters—By amendment. Bidders may include Halsey, Stuart & Co. Inc. (bonds only), Bear, Stearns & Co. (stock only), First Boston Underwriters—Cray, McFawn • Samuel each selling 15,000 * preferred and 15,000 shares of common. Price share for the preferred and $6 a share for the common. Michigan Steel Casting Co., Detroit . -June by and Secretary-Treasurer, respectively, shares of shares of prior lien and preferred stocks. Chicago Title & Trust Co., a stockholder.-No under¬ writing. For expansion of building and plant facilities. • at Cohen and change wTill be used to redeem $375,000 3%% serial de¬ bentures, due 1951, at 101.2 and interest. It also will Subscription rights terminate shares will preferred not issued in new 2127 Maurice Net proceeds from sale of com¬ and from shares of mon ;' "Kane County Title Co., Geneva, III. Sept. 25 (letter of notification) 4,000 shares of common. Offering—To be offered to stockholders of record Oct. 4 for subscription at $30 a share at the rate of one share •for each two shares held; Nov. 3. Any unsubscribed Proceeds bonds to redeem $3,500,000 3%% series A first mortgage bonds, due 1972, share. per receive & Co. Inc., New York, is selling 22,774 shares. 4 Series P $25,000,000 2%% 1st and ref. mtge. bonds,; due June 1, 1981. Underwriters—Names by amendment. Corp., (10/28) filed Blyth Proceeds — Probable bidders include The First Boston & To Co., Inc.; Halsey Stuart & part of construction finance (Continued on nage 2128) Co., Inc. program. Plastic Molded Arts, Inc., New York (11/25) ^t (Continued from page 2127) '{ •IbMs Invited—Company will receive bids for the purAug. 27 filed 60,000 shares Of preferred stock ($10 par) and 75,000 shares of common (par 50c). "chase of the bonds at its office, 245 Market St., San Underwriter— 2 Herrick, Waddell & Co., Inc. Offering—Company v is Francisco, Calif, up to JO a.m. PST on Oct. 28. offering the preferred stock to the public, while the common is being sold by certain stockholders. Prices— Pacific Power & Light Co., Portland, Ore. Preferred, $10 a share; common, $4 a share. Proceeds— ' July 10 filed 100,000 shares ($100 par) preferred stock. Proceeds from sale of preferred will be used to purchase Underwriters—By amendment. Probable bidders' include equipment, pay bank loans, and other corporate purposes, Blyth & Co., Inc., White, Weld & Co. and Smith, Barney & Co. (jointly); The First Boston Corp., W. C. Langley & Co.; Portis Style Industries, Inc., Chicago Harnman Ripley & Co. Offering—Company proposes to Sept. 27 filed 110,000 shares ($1 par) common. Under¬ issue the 100,000 shares of' new preferred fort the purwriters—Brailsford & Co., and Shillinglaw, Bolger & pose of refinancing at a lower dividend rate the .67,009 Co., Chicago. Offering—Of the total 100,000 shares will "Outstanding preferred shares of Pacific and the 47,806 be offered to the public and 10,000 to employees of the preferred shares of Northern Electric Co., in connection company. Price—Price to public $6.50 a share. Price to with the proposed merger of Northwestern into Pacific. employees $5,525 a share. Proceeds—Shares are being In connection with the merger, the outstanding preferred sold by four stockholders of the company who will re¬ stocks of Pacific and Northwestern will be exchanged ceive proceeds. The registration showed that the com- ' 4share for share, with cash adjustments, for the new prepany changed its authorized capital from^4,000 shares jtefred stock of Pacific, the surviving corporation, Offer¬ ($100' par) common to 400,000 shares ($f par). Each ring price—To be supplied by amendment. shares of $100 par common was changed into 100 shares of $1 par common, which exchange was consummated Pal Blade Co., Inc., New York shares of common stock only, which will be stockholders of record Sept, issue 454,465 ■ , June 28, 1946 filed 227,500 shares ($1 par) Underwriters — F. Eberstadt & Co., Inc. Sept. 23. capital stock. ' Offering — 225,000 shares are outstanding and are being sold by 10 stockholders, and 2,500 shares are bfcipg sold by A. 1». Marlman to all salaried employees, indefinitely post¬ poned. ftfltlg IS 1|?M ' ■, '' ' ' Palmetto : Fibre Corp., • ' Portland (Ore.) Transit Co. (as amended) 60,000 shares of 5% cumu¬ lative convertible preferred stock (par $25) and 300,000 shares of common stock, of which 80,000 shares will be sold to Pacific Associates Inc.. at $6 per share, ^so an undertermined number of common shares for conversion ; June 14 filed • Washington, D. C. preferred. Underwriters — First, California, Co.; Scherck; Richter & Co.; Weeden & Co.; Allen & Co., and Rauscher, Pierce & Co. Offering price,'preferred $26.50 of August 16 filed 4,000,000 shares (100 par) preference stock. Underwriting—Tellier & Co., New York. Price 50 cents a share. Proceeds—The company will, use esti¬ mated net proceeds of $1,473,000 for purchase of a new factory near Punta Gorda, Florida, at a cost of about : $951,928. It will* set aside $150,000 for research and de¬ velopment purposes arid the balance Will be used a9 operating capital. share; common, $7.50 per share. per writer—Underwriting arrangements will be supplied by ^amendment, but it is contemplated that Van Alstyne, "^Toel & Co.,v New York, may be one of the underwriters. Offering—Company is making an exchange offer to , stockholders of Textileather Corp., Toledo, O.; The Passaic, N. J.; and Astra Realty Co., New York, for the purpose of acquiring the controlling in¬ terests of the companies. Pantasote Plastics will offer ; three shares of its common, plus"% of a share of pre¬ ferred, for each share of Textileather common. It will offer two shares of its each shares of Astra for common shares of common. nated debentures. and . of preferred and 250,000 shares of of (30,000 shares of which common, company will be applied to make loans to Textileather -and Pantasote for various corporate purposes. Pari-Mutuel Totalizer Corp., New York (11/6) 75,000 shares of common (10 par). Offering price—$2.75 a share. Underwriting r^Howel, Porter & McGiffin, Inc., New York. For man¬ ufacture of pari-mutuel totalizing machines and for other corporate purposes. Peninsular Oil Corp., Ltd., Montreal, Canada 26,19^6 filed 20.0,000 shares ($1 par) common stock, tJnderwrite^s—Blyth. & Co., Inc. Offering—Company* will sell 130,000 shares to the public through the under¬ writers and 70,000 shares to Bethleham Steel Co. Price—^ At a fixed price based on market (approximately, $4,"533,750). Proceeds—Receive short term bank loan for building, machinery, and working capital. Rowe Corp., sharei, purchase I J.ui" . machinery other and equipment. •; People's Service Cof-p! Philadelphia (11/1) Oct. 18 (letter of notification) 50,000 shares ($10 par) Price, $10 a share. No underwriting. Manu¬ facture letail wearing apparel. * common. Pharis Tire & Rubber ; vertible share. Proceeds—For payment of loans and to BFC and to complete construction of ness—Manufacture ; materials, . ^ of tires and common pense tire and repair -J/,'. Sept. 23 (letter of notification) common. Offering—To be underwriter, White, Weld & Co. Offering—Terms Of offering and price by amendment. Proceeds—Net pro- • ceeds will be used to redeem company's 5% cumulative prior preferred stocks and an unspecified amount will be advanced to Taggart Corp., a subsidiary, for redemption for Republic Aviation Corp., Farmingdale, N. Y.* ($50 par) convertible pre¬ ferred stock. Underwriters—Hayden, Stone & Co., and Kidder, Peabody & Co. Price—By amendment. Pro¬ ceeds—Proceeds, together with bank loans, will be used Oct. 9 filed 100,000 shares increase working to necessary Republic Foil & Metal Mills, Inc., Danbury, Conn. •■■■' V 1966; 2,500 and 15,000 shares of common stock (no par); Underwriting — No underwriting. Offering—The securities being registered Sept. 6 filed $500,000 shares of preferred and be sold at of care options which it ment for past a and share. before No shares to take give run to manage¬ over a a the share within 18 months and expiration underwriting. business. For of the the will not registered with the SEC. common be added earlier Alabama option, exploitation of at its Co., of shares. proceeds will be used to restore working The balance of to share, and a Proceeds general corporate funds., — Proceeds , l ' f date indefinite. r'~ * % ' , '7 ' t , { 1 Sardik Food Products Corp., . w / . 1 1 ^ ; t 1 New York May 29 filed 175,000 shares of capital stock (no, par). Underwriter^t-George F. Breen, New York. Offering— Of the total being offered company is selling 155,000 shares of which 9,524 shares are reserved for possible sale to F. G. and P. F. Searle on or before April 30,1947,v at remaining 20,000 shares are stockholders. Price to the public $12 Proceeds—Working capital, purchase equip¬ plant, etc. Registration may be withdrawn. ,■ $10.50 per share and the being sold by two share. per ment and Inc., Atlanta, Ga. Scripto, Aug. 7 filed 25,000 ble shares ($10 par) 5% preferred stock and 244,000 shares cumul. converti¬ ($1 par) common fk Underwriters—Clement A. Evans & Co., Inc., At¬ lanta. Price of preferred $10.75 per share; price,of com-1 mon, $5,625 per share. Proceeds—Company is selling the 25,000 shares of preferred to the underwriters at $10 a share and stockholders are selling 244,000 shares : to the underwriters at $5 a share. - The registration stated that 24,000 of the 244,000 shares of cOmmpn are stock. period of four days following the; registration for sale to employees, directors at $5 a share,; The company also being reserved for a effective date of the officers and is selling 200,000 of the company use its proceeds at for ^ ^ Seaboard Finance Co., , Washington, D. C. 240,000 shares of common stock (par $1). Underwriters—Van Alstyne, Noel & Co., and Johnston, Aug. 29 filed Lemon & Co. Offering—Certain stockholders are sell¬ . issued and outstanding shares. Company is 100,000 shares. Price by amendment. Proceeds company's 100,000 shares proceeds will be used ing 140,000 Republic Pictures Corp., New York Registration shares of $1 and 277,231 originally filed July 31 covered . - 184,821 cumulative convertible preferred ($10 par) shares (50c par) common stock, with Sterling, Grace & Co. as underwriters. Company has decided to offering —From to reduce and for outstanding bank loans and other nnctnnnpfl ; executives 50 cents a warrant. Company will : general corporate purposes. Offering stock purchase warrants to date indefinite. secur¬ Price—The notes 100, the preferred at $100 at 10 cents a share. The pur¬ public. of the recission offer is because the period six months and provide that the stock be purchased at $10 thereafter to services, the options to *>f two years and $15 proposes previously sold to with interest and reoffer them to the were wishes to have available 6,000 common private subscribers for an aggregate price of $464,384. offering to repurchase these securities will company notes, due of 3Vz % preferred stock (par $100) 3lk% ities one deeined Such funds are intends to acquire and its large backlog of peace- share for-each the basis of capital. in view of the additional facilities that com¬ share held. Price not disclosed although it is stated that on preferred. Both securities are cumulative at proceeds as advances to Pulp and Paper whose common stock the company owns 25,000 : S stock (par $2.50). Underwriter—Tucker; Anthony & Co., New York/,. Pric^ j; —By amendment. Proceeds—The shares are being sold by stockholders who will receive proceeds. ' Business— Production of plastic injection molding machines. pose present stockholders $2.50 $52.50 a share plus accrued dividends. In addition, the company will apply $2,675,000 of the Oct. 11 filed 120,300 shares of common subscription to may its redeemable Corp.! Worcester, Mass. The company is 14,164 shares of $5 par offered Co., flew York Sept. 27 filed 150,000 shares ($100 par) first preferred. Underwriter—To be supplied by amendment. Probable holders; Offering Reed-Prentice include notes, Phillips & Benjamin Co., Waterbury, Conn. of printing directories. St. Regis Paper Midland Trust Co., New York. • biulding. Busi¬ a tubes ' ^rA t4 by amendment. Proceeds—Nat E. Heit, President and director, and Harry Preston, board Chairman, Secretary and Treasurer, will receive net proceeds as selling stocky a replace «" ^i San-Nap-Pak Mfg. Co. Inc., New York con¬ working capital expended in purchase of building from !rx Proceeds—Estimated, net proceeds of $476,362jwill bq used to pay off a loan from the Marine preferred. Underwriter—Van Alstyne, Noel & £o. and G. L. Ohrstrom & Co., New York. Price—$20 ' ( Directories, Inc., Bowling Green, capital. lime business. Sept. 27 filed 100,000 shares ($20 par) cumulative Offering Price, by amendment. 1,000 shares of no par com-* Offering price—$100 a preferred share and $1 a share. No underwriting. To defray initial ex-» mon. By,; amendment. pany Co., Newark, O. * cumulative preferred and Co., Bridgeport, Conn. (D. M.) | Ohio (letter of notification) 200 shares of $100 par 16 Oct. \ 1 ^ Rural • Business—Graphite bronze Under¬ Proceeds—Net proceeds will be used to drilling New York July 29 filed 100,000 shares common stock. Underwriters —Hayden, Stone & Co. Offering—The selling stockholders, who include Robert Z. Greene, President, are offer¬ ing the shares to the public through the underwriters, July 24 filed 80,000 shares ($1 par) common stock. Un¬ derwriters—Dunne & Co., New York. Offering—Price writer—Sabistoi\ Hughes, Ltd., Toronto, Canada. Price— m cents a No underwriting. to the selling stockholders. Manufacturing Co. Rheem - (par $1). common of $22.50 to $25 a share. Sept. 27 filed 100,000 shares (250 par) .common. Under¬ writer—Van Alstyne, Noel & Co., New York. Price— Oct. 17 (letter'of notification) Sept; 3 filed 600,000 shares of excess date indefinite 15 filed 100,000 shares ($1 par) common. Underwriter—White, Noble & Co. and Smith, Hague St Co., Detroit. Price—$3.50 a share. Proceeds—Net proceeds Read Eari and June Oct. go received under the exchange offer) are to be purchased from selling stockholders. Proceeds — Proceeds to the - in and the balance (which are part of the shares to be pany • not Proceeds to go Price by amendment. to selling stockholders. bushings and other products. 12.853 shares of preferred and 50,000 shares of common to be purchased by the underwriters from the com¬ are Fruhman Leo Morchower, all officers of the company. Offering—Price of It is proposed that under¬ offer publicly a maximum Hebert, C. Ernest Fruhman, Inc., Dallas, Texas notification) 4,000 shares ($20 par) cumulative preferred on behalf of Sidney of (letter 15 convertible Graphite Products Corp., Chicago Randall " writers will No $1,000. capital. for common Rhealee Stores, • Oct. notification) $175,000 of 5% subordi¬ Offering—Price in units of $100, $500 underwriting. For general working Oct. 10 (letter of of share one its proceeds to the Company will be added to working capital. —Net Precision Scientific Co., Chicago • Pantasote Co., Pantasote- common," and -12 300,000 -by stockholders. Underwriters—Names by amendment; Offering—Terms : by amendment. Proceeds Pro¬ will be used to pay 3% notes held by National Bank of Detroit, $75,000 to reimburse treasury for sums spent in acquisition of the electrical division plant of the company, $30,000 for con¬ struction of space for executive offices in the economy baler plant, and. the balance will be deposited with gen¬ eral funds. Offering temporarily postponed. Sept. 27 filed 60,000 shares ($25 par) 4^% cumulative preferred and 1,352,677 shares ($1 par) common. Under! • May 4 filed 400,000 shares of common stock (no par), 100,000 shares are being sold by company and ceeds—Of the net proceeds, $250,000 Inc., Passaic, N. J. s , of which cumulative convertible Underwriter—Van Alstyne, preferred stock ($10 par). will Reynolds Pen Co., Chicago July 5 filed. 75,000 shares 5% Noel & Co. and associates. Pantasote Plastics underwritten, not be for their own account. Precision Parts Co. of Ann Arbor, Mich. ; offered for subscription to 5 to the extent of one share for each five held; Issue commercial paper temporarily corporate reasons. Offering . •; a ' ■ .... . Volume 164 Number 4536 THE COMMERCIAL & FINANCIAL CHRONICLE 2129 V \ Sharot-May Co., Inc., New York (10/28) "/ . . Oct. 15 (letter of notificatibn) 90,000 shares of common (par 25c). Underwriter—Hautz & Engel. Price—$3 share. Proceeds—To pay outstanding debt 4o its stock per , balance for expansion. v Super-X Corporation of America, New York Oct. 16 (letter of notification) 100,000 shares of $1 par ; common. Offering price—$3 a share. No &For organization , factors, /• v'/. / * Manufacturing Corp. ? ' 'r- «• '•*1 > > & K* fV;*. ;,. underwriting.•>'■ of business.. -<*■ Swern Solar preference stock at $110 a share and accrued dividends and 1,386 shares of second preference stock at $100 a share and accrued dividends. The balance will be added to general corporate funds; : v. ' K/'.-y 1 , Co., Trenton, N. 'West Coast Airlines, Inc., Seattle, Wash. Aug. 28 filed 195,000 shares common stock (par $1), Sept. 2 filed 245,000 shares 80,000 shares of $1.12% cumulative con($1 par) common. Under¬ Underwriter—C. K. Pistell & Co., Inc. writer Offering—Com¬ preferred stock, series A (par $20). Auchincloss, Parker & Redpath, Under-; pany is selling 45,000 shares, and Washington, eight selling stock- r D. C. Price—$7 a share. % writers—Van Alstyne, Noel & Co. Price by amendment. Proceeds—Will be used for holders are disposing of the pay¬ remaining 150,000 shares, ment; of various expenses, Proceed*—Net proceeds will be applied for the repayment of bank loans, redemp- • price—$10.50 a share.* Proceeds—From 45,000 shares- .purchase of equipment and for tion of outstanding series A convertible sold by preferred stock working capital. June 14 filed iVertiMe which | ceeds — are also not converted into common stock. will be used for additional company .wilLbe applied^to- working Capital initially. ^•;■■ Such pro- • July 12 (letter of notification) 44,300 shares of ($5 par) cumulative convertible preferred stock and 44,300 shares (par 50c). Offering—Price $6 a share for preferred and 75 cents a share for common. Underwriter & Co., —Amos Treat & Co. Proceeds—For payment of notes, mortgages and for general corporate purposes. Offering temporarily postponed. unsubscribed shares will be sold to underwriters at same price. Price — Public offering price of unsubscribed chares by amendment. Proceeds—Ftr expansion of plant facilities and for additional working Tele-Tone Radio Corp., New York *v Aug. 1 filed 210,000 shares of common stock (par 50 cents). Underwriters—Hirsch & Co. Offering—Com¬ pany is offering 75,000 of the shares registered. Eleven stockholders are selling 135,000 issued and outstanding shares, for their own account. Offering—Price vertible preferred. Underwriter—Ames, Emerich con¬ Inc., Chicago. Offering—To be offered to common stock¬ holders-for subscription at $25 a share in the ratio of one preferred share for each five shares of common held capital. postponed. ; Offering $6.75 Springfield Oct. (Mo.) filed 8,817 shares ($100 par) series cumulative preferred. -Underwriters—H» M; E 4%% Thew Shovel Co., Lorain, Oct. 18' (letter of stock one share of new preferred plus 50c in cash and for each share of series D stock one share of new preferred plus $1 in cash and a $1.25 dividend payable Jan. 1, 1947. Shares not issued in common exchange will underwriters; for public offering *at $104. a; Proceeds—Will be used to retire the series Q, stock at $103 plus dividends and series D stock at $105 plus dividends. sold to $35 a share. York, Standard Brands, Inc., New York (10/30) » Sept. 6 filed 220,000 Shares $3.50 (no par) cumulative preferred. Underwriters—Dillon, Read & Co. Inc. and Blyth & Co. Offering—First in exchange for 200,000 out¬ — the capital of the company, and estimated expenses, it will deducting $5,000 $995,000 as surplus. after classify1 United States Shoe Corp., Cincinnati, Ohio Aug. 25 filed 24,000 shares ($4 par) common. Under¬ writer—Ben j. D. Bartlett & Co., Cincinnati. Offering— Shares will be offered to the public • by seven stock-: holders, who will receive the entire net proceeds. Price by amendment, Offering postponed indefinitely. ferred at the rate of 1 l/10th shares of new preferred for share of old preferred. Price — By amendment. ^Proceeds Company will use net proceeds from any shares sold to the public to redeem all each unexchanged Mich. Mines Ltd., J Ontario' July 18 (letter of notification) 5,500 shares of 4%% first preferred stock series B ($50 par). Offering i>rice, $50 a share.; Underwriter—First of Michigan Corp., Detroit, Proceeds—For enlargements and improvements of power plant facilities. Offering date indeterminable at present. general corporate purposes. Offering date indefinite; Stereo Pictures Corp., New York Yalsetz Lumber Co., Portland, Ore. Oct. 4 filed 14,000 shares ($100 par 2% cumulative Class A preferred and 2,000 shares ($100 par) 2% cumulative Class B preferred. Underwriters None. Offering •— Oct. 14 (leter of notification) 2,985 units of stock, each unit consisting of one share of $6 cumulative (no par) preferred stock and one Stocks will be offered for sale to customers and former •share of common stock (par 50c). Underwriter—Ayres Barley & Associates, Inc., (165 Broadway, Suite 1717) customers of the Herbert A* Templeton Lurnber Co. with whom the registrant. has an exclusive sales contract $100 per unit. Proceeds—for, working capital, machinery, equipment, etc. — be sold to Templeton. Price—$100 a shares holders are chares.S Price by amendment. and Of the total, 200,000 underwriting reimburse treasury for funds spent on June 26 to retire Offering tem¬ Underwriter—Goldman, Sachs & selling stockholders the company ferred and Co. stock (par $5). ; stock. Offering—Eight are stockholders. ~ Price by amendment "building construction improvement fund." Offering date indefinite. Street & Smith writers—Glore, Forgan & Co. represents a $3.45 share, a wick selling as Purpose—To acquire all of the equity in War- Gardens, Inc., which owns real1 certain improved . .. .. stock waukee. Under¬ Offering—The offering , ' k %\ . 1 | , K' « > 1 \t"x 1 t^ i the .. * ' i Offering—Company is offering 75,000 shares of preferred; the 50,000 sharee common are outstanding and being sold by four in¬ of dividuals for their own account. Price by amendment. Proceeds—Proceeds from the sale of the preferred stock will be used to provide funds for a wholly-owned sub¬ sidiary, retire loans from banks and from White's Em¬ ployees Profit Sharing Trust, and for additional working capital. Offering date indefinite. : ^ . Winters & Crampton Corp., Grandville, Mich* Aug. 28 filed 119,337 shares of common stock (par $1). Underwriter—E. H. Rollins & Sons, Inc. Offering—r Company is initially offering the stock to its common holders at the rate of share for each two shares held. Proceeds—To retire a conditional obligation held by the Reconstruction pay off bank loans of $600,000, and foi one Price by amendment. sales contract Corp., working capital. t v ^ . Wisconsin Power & Light Co., Madison, Wis. May 21 filed 550,000 shares ($10 par) common stock to be sold at competitive bidding. Underwriters—By amendment. Probable bidders include Merrill Lynch Pierce, Fenner & Beane; White, Weld & Co.;, Glore Forgan & Co., and Harriman Ripley & Co. (jointly*; The Wisconsin Co., and Dillon, Read & Co. Proceeds-— Part of the shares are to be sold by Middle West top holding erence of Corp. company of the System, and part stockholders of North West Utilities by pref¬ Co., parent Wisconsin, who elect to sell common which will be such shares of Wisconsin to them upon the distributed dissolution o| North West Utilities Co. ^ Yolande Corp., New York * will amendment. and be by shareholders. supplied by The amendment. Proceeds—Company will use Courts & Co., Atlanta; Irving Rice & Co., St. Paul, and Maxwell, Marshall & Co., Los Angeles and New York. Price—$10 a share. Proceeds—Estimated net proceeds of $400,000, together with $87,125 from the sale of 10,250 additional purchase shares to J. William common President, at $8.50 of a 10,995 total price of $220,522 from Mrs. Gertrude of L. Herbert Yolande Corp. Miskend, President Korsh, sister Treasurer; of used to redeem at $110 a company's 625 shares of $100 ferred S. and Of the remaining proceeds, $68,750, plus dividends, will be stock.' The additional working com¬ -respective Price Anchell, Vice4 share, will be used partly for the shares of capital" stock of Island balance par will share the 6% cumulative be used to ,pre¬ reimburse the company's treasury for previous expenditure and for . (par $1). Underwriting—Loewi & Co., Mil¬ Offering—The shares are being sold both by company amounts f White's Auto Stores, Inc. Aug. 29 filed 75,000 shares $1 cumulative convertible. preferred stock ($20 par) and 50,000 shares common stock (par $1).' Underwriters—First Colony Corp. and Childs, Jeffries & Thorndike, Inc. Needlework,. Inc., of Puerto Rico, out of a total of 11,000 outstanding shares. The shares will be purchased for aJ Underwriter— - ; Webster Electric Co., Racine, Wis. » Sept. 3 filed an unspecified number of shares of - part of the holdings of the present stock¬ holders. Indefinitely postponed. share. a : and stock. common at $7.50 notification) 39,948.shares of capital estate at Red Bank, N. J. Publications, Inc. July 17 filed 197,500 shares of share, and 3,500 shares certain employees Offering price, agent. mon . Offering— through the Ray H. Stillman, Eatontown, N. J., will act - Proceeds—Net proceeds from the sale of the company's shares will be added to its a sold Warwick Apartments, Inc., Red Bank, N> J* Oct; 8,(letter of disposing of 62,000 shares, and will offer 40,759 shares initially to its pre¬ common shares will be pt $8.50 Underwriters— & Blosse?. Offering postponed indefinitely. Stlx, Baer & Fuller Co., St.Louis common group will be offered to porarily postponed. Aug. 28 filed 102,759 shares stock which are to be sold Sherck, Richter & Co., and Straus the sale of 51,000 shares by the company will be used to par. 4 17 filed 50,000 shares ($1 par) common stocks Underwriters—Headed by E. F. Gillespie & Co., and in¬ cludes Childs, Jeffries & Thorndike, Inc., New York; for the account of certain stockholders. disposing of 140,000 issued and outstanding Proceeds—Proceeds from 5,000 shares of preferred stock, $100 — by amendment. Price by amendment. Proceeds—Will be used to redeem. $625,000 4% bonds and $638,600 first and second deben¬ tures; balance for working capital. Sept. Velvet Freeze, Inc. ; July 24.filed 203,500 shares of selling stock¬ 'v *' * Oct. 7 filed 80,000 shares ($5 par) 50c cumulative con+~y vertible preferred stock and 100,000 shares ($1 par) > common. Underwriter Names share for each class of stock. Stern A Stern Textiles, Inc., New York Aug. 29 filed 101^80 shares of common stock ($1 par), Un#>ew>Bmf Pari M. Loeb, Rhoades & Co. Offering- 51,000 common. -whereby all the lumber produced by the registrant will . Company is bffering par) Wheeler, Osgood Co., Tacoma, Wash. ' Finance Upper Michigan Power & Light Co., Escanaba, March 27 filed 500,000 shares of capital stock (par $1). Underwriters—Otis & Co. Offering—Price to public by amendment. Proceeds—Net proceeds will be added to the general funds and will be available for Tfew York. Price constitute (.$12.50 porarily postponed. City Bank of Cleveland, executors. Price, proceeds will standing shares of $4.50 cumulative preferred. In the offering price of the new preferred is $100 a share, holders of the old preferred will be grant¬ ed the opportunity to exchange their stock for new pre¬ non-convertible, behalf of the shares . • par)' — event the public mon-voting, ($5 United Benefit Fire Insurance Co., Omaha, Neb. Oct. 7 filed 50,000 shares ($10 par) common. Underwriting — None. Price $30 a share. Proceeds The company stated that $500,000 of the $1,495,000 , 1,647,037 ^ Underwriter-^Smith, Barney & Co,, New proceeds go to the selling stockholder. • p Steep Rock Iron on The National filed each share of common or preferred held. Unsubscribed shares will be sold to underwriters. Price—By amendment,: Proceeds—To reduce bank loans. Offering tern-- estate of Frank A. Smythe, deceased; Chauncey B.' Smythe, - Alan - W. Smythe and share* shares of old preferred at $110 a share. Aug.: 14 Ohio notification) 2,000 shares ,, Underwriter—Kuhn, Loeb & Co. Offering—Stock will be offered for subscription to holders of outstanding pre¬ ferred stock and common stock in ratio of Vs share few • • of series C • , Westinghouse Electric Corp. a by them. They are also selling to Hallgarten & Co., for $1,500, plusr $360 as a contribution toward the expenses of issuance, options to purchase an additional 18,000 shares of the issued and. outstanding common. Proceeds—Net proceeds for the sale of com¬ pany's 75,000 shares will be used for increasing working capital, with a view to entering the Frequency Modula¬ tion and Television fields at an advantageous time. Of¬ fering date postponed. Payson & Co., Portland Me. and The Moody Investment Co., Springfield. Offering—Stock will be offered for ex¬ change to holders of series C 6% preferred and series D 5% preferred on the following basis: For each share I>e Western Lease & Royalty Corp., Denver, Colo. Oct. 18. (letter of notification) 400,000 shares (5c par) common. Price 5c a share. No underwriting. To pur-; chase gas and oil leases and royalties. s> outstanding; common owned City Water Co. 16 underwriter. • share. Options—Selling stockholders are also selling to the underwriters at 7 cents per option warrant options to purchase 18,000 shares of the issued and Soya Corp. of America Aug. 28 filed 375,000 shares (par lc) common stock. Underwriter—Peter Morgan & Co. Price market or $4-. per share, whichever is higher. Proceeds—To repay'RFC ; loan, to buy Canton Mills, Inc., and for working capital. - Taylor-Graves, Inc., Saybrook, Conn. common stock Seas Manufacturing Co., Detroit, Mich. Sept 3 filed 40,000 shares ($25 par) 5% cumulative ■ " f capital. Offering temporarily postponed. ' ^ West Virginia Water Service Co. Aug. 6 filed 46,400 shares (no par) common. Under¬ writer—Shea & Co., Boston. Price, by amendment. Proceeds—Shea & Co. is selling 26,400 shares for its owa account and the remaining 20,000 shares are being soldL by Allen & Co., New York, with Shea as : manufacturing facilities in the amount of $600,000; for additional inven¬ tory amounting to $400,000, and for additional working by about $210,- 000 of its net proceeds to redeem 645 shares of its prior • Oct. capital. Zatso Food Corp., Philadelphia 18 preferred stock (par $100) with Price, $100 for (11/1) (letter of notification) $100,000 5% general per common unit. For purchase of conduct of business. cumulative stock raw as bonus. materials and Underwriter—Ludolf Schroeder, 1614 Cambridge St., Philadelphia. (Continued on page 2130) jd 2130 Prospective Security Offerings (NOT YET V'VV :- REGISTRATION) IN • * INDICATES ADDITIONS SINCE 1 tiV> r- ft w.: ».vv-'-» PREVIOUS ISSUE [EDITOR'S NOTE—Due to the paper situation, we are limitingl coverage of "prospective" financing-hi this issue to only those undertakings which have come to hand during the past week, thus omitting the items of this nature which can be reported in previous issues. We regret the necessity for this action: and will resume the usual complete tabulation as early as circumstances permit.] our (Continued from page 2129) ■ the Hose of the Stock Exchange Oct.: 22 was postponed indefinitely following a decline in: Light Co., Montana Power Co. and Texas Utilities Co. , lprice.vIn 1943 a block of 85,000/shares was sold at $43.90, The remaining 85% of the stocks of these utiliUes;would,share ,and ;inr the foUowingiyearv704,12L; sha_res were:5 be divided ratably into exchange units to be offered, tosold at $45.25. 4' American Power & Light preferred shareholders:-' ^ • ' » ' o„ • Chicago & North Western:Ry; :(41/7>;* Atchison Topeka & Santa Fe Ry. (10/29),,*-<■ - Bids, for the purchase of $10,140,000 equipment trust. Bids^will be received by F. G. Gurley; at 80 Ei'Jacfeon^ certificates^toibe dated Dec: li l946^:and;due serially ihi Boulevard, Chicago^ up tot nooni (CST)^ Oct; 29, .fprUhe?^ *equal annuaL instalments^ will bereceiveh at Oompany's^ will 20 stockholders Dec. vote on authorizing issue an ^ 6% defiled with the SEC a plan for recapitalization of the company. This calls for a single class of stock consisting of 1,100,000 shares ($1 par) common. Under the plan American Gas would sell at competitive bidding enough shares to pro¬ vide the $12,210,578 due holders of its 5 and 6% deben¬ tures. All the remaining common stock would be distributed to holders of present securities on the following basis: sixrthfrteenths to common stockholders, fourthirteenths to holders of scrip certificates and threecounsel for the holders of $50,000 of as office 400 West MadisOn St., Chicago, up to 12 noon CS'IV will provide -funds : Nov. ;7v; Dividend * rates to be*specif:ted in bids: * ,PrGb- * financing the acquisition of railroad equipment under able bidders include Otis & Co.; Salomon Bros. & Hutz- conditional sale agreements, in five lots, viz.L (1) . not; ler; Harris, Hall & Co. (Inc.); Halsey,Stuart &,Co,Tnc.»to exceed $2,904,000; (2) not to exceed:$927,-80O^(3-)^not^ lowest interest rates at which bidders bentures of the company, Percival E. Jackson i American • for to exceed began • each $5 : • S. Commission New York State Electric & • of the Alleghany Corp. to sell ablock of Chesapeake & Ohio Ry. of more than 100,000 shares, $13,000,000 3%% bonds and $12,000,000 5.10%' preferred stock. Plan also provides for issuance of an additional $3,000,000 preferred to be applied against cost of new construction. Probable bidders include Blyth & Co. and' ✓ United States Government, First California Company State, Municipal and Co. Inc. (bonds vi& ■ Our Sixteen INC. Serve Offices California and Nevada *- CLEVELAND ^CHICAGO Commonwealth's- recapitalization * sufficient.. common stock,1 to $13,500,000, to be invested in Southern Co.*s sub¬ cash for plan sidiaries and cash a upward now for months— the feeling is that the money mar¬ um on been of wartime in the treme ease" money market has passed. But it credit con¬ holds that "basic easy The ? two Treasury's billion plan to its of more. retire debt, is due needed funds obtain of demands credit to (- The capital market is no longer geared primarily to the needs of the Treasury for purposes of fi¬ nancing recovery and victory and the government is not in the posi¬ tion of taking care of industry's capital needs. / As ■ a consequence of the war period, however, and the deficit financing which went before it, the banks supply heavily invested in government securities. At the availing moment itself of the its Treasury, huge un¬ cash balances piled up closing war loan drives, necessary in the and seeking to dry up some of the surplus money around as a guard against inflation, is soaking up some of its short-term paper held by the banks. If, as expected, private industry borrows from the banks in in¬ noon. were larly losings nb is expected that com¬ will be keen: particu- ; since the undertaking is more mission. are that the Securities the and com- Ex¬ change Commission with a view expediting actual marketing as much possible. The banking group the award will be offer the new stock ers of the obligated to first to hold¬ present 7 and 6% pre- ferreds on an exchange basis with used;,by the , Stock Issue foregoing issue will pro-: Presumably satisfied that the listed security markets have re¬ for expansion and improvemehts=an& liquidation, of bank^ loans; among; gained: their equilibrium after the other things. vide the company with funds Influence of Government on Business and Accounting to Be Discussed by NACA Group Ef Peloubet, partner of^ the firm of Pogson* Peloubet Ji certified public accountants; will address the Third Technical r Session of the Brooklyn Chapter of the National Association of Cost Accountants on the subject, "Influence of Government /on Business and Accounting," at the Park-Vanderbilt Restaurant, Park Plaice * •t " Maurice & Co., . and Oct. Dow Chemical Co* Avenue, Brooklyn, N. Y.^ on.; Wednesday, Vanderbilt largest- industrial the Dow $30,000,000 of to gress on and he will discuss the International .Con-, Accounting held in New 1929 and in London in Past President of York in 1933. He new,: l5-year**d&* ing the past few. years and the ef¬ fect these special codes, rules, the New Jersey # v.*. "V/ to the Commission's competitive^ bidding rule, but is being handled negotiation and egate the business agencies that Since this issue is not subject company ing survey for the U. S. and Brit¬ He was a del- ♦ ish Chiefs of Staff. ernment and also as an advisor to business has had to live with dur¬ bentures. by perience in the service of the gov¬ Co., involving Chemical between its bankers, the it could reach market immediately evening, 30, 1946. -Mr. Peloubet has had wide ex¬ the of financing operations to go t into registration with the SEC in re¬ cent months is that projected by / which wins be to finance its extensive construction program. ^ One to as new . will proceed without delay to put the issue in registration with proportions, the di¬ underwriters v„ • Proceeds will Com¬ pany reported. now The Large with line which company the - , Indications -■ Service Public Alabama in like to handle. of organizing authorized : by ' considerable in^th^ way of equity,, offerings welled up in distributors' hands, but substantial progres£ in plaOing- of such issues is Since this is a.new money petition hut to bid for the 64,000 shares of new preferred stock which Birmingham Electric Co. is seek¬ have output. not of unduly large time in the process to . for additions to plants, production of new products and broadening of markets for current to be spent , issue, it accommoda¬ groups ing refunding Monday. called for bids on its projected Z%s this week, to be opened at its offices in San Francisco during the fore¬ mensions Underwriters eries of America, again the undertaking represents a new money opera¬ tion since funds will be added to cash which is and will continue The company Birmingham Electric themselves find now mortgage bonds next. business tion at low rates. Reserve for base 2% %, 25-year first and can market since the close of the war. a Bjids in its program, bankers will be bidding for $25,000,000 of new Pacific Gas & Electric Co. chiefly, however, to fact that member banks through use of their large hold¬ ings of short-term governments as the quired period of hibernation. change altered. been total thus far this years to $19 billions, turns atten¬ tion anew to the change which has taken place in the money bringing , the not have ditions" This upon Provided there is no cause for its latest bulletin notes that "ex¬ post-Labor Day deluge, Cream¬ Inc., has gone into registration for 116,986 shares of commoh stock^bf $tparvalue. The break in the market; leftv the expiration of the re¬ adjustment for the premi¬ existing issues. Pacific Gas Asks ket, sooner or later, must reflect Board in new-construction. Here these developments. The Federal Reserve (wherr becomes effective). realize creasing' volume — the trend has V;tiE:, '< Southern Co., New sell h (KjjfiUv- i-'v;- Head Office: San Francisco ST. LOUIS PITTSBURGH PHILADELPHIA ■ York October 22 Commonwealth & Southern Corp: filed' with SEC a proposal to. organize Southern Co., as a step in its program for compliance with the corporate sim¬ plification and geographic integration requirements of the Holding Company Act. The Southern Co. proposes to NEW YORK BUFFALO & Co. (jointly) and only). v' : Underwriters and Distributors Blair 6- Co, (jointly); the First Boston Corp. Halsey, Stuart & Smith, Barney & Co. and Glore, Forgan INCORPORATED Corporate Securities ■OSTON Gas Corp. company's proposed to issue $13,000,000 1st mtge. bonds due 1976, interest not to exceed 2% % and $12,000,000 preferred stock, dividend rate not to exceed 4%, the proceeds to be used to retire Chesapeake & Ohio Ry. Oct 23 the plan 15% of the common will sell at competitive bidding are sold to-ten institutions Nov. 6 SEC will hold hearings on plan, the value of both preferred stock rights combined would total $253,084,000. Upon approval by the SEC and issuance of an order by aU, S. District Court, the com^ pany r sale offers at competitive to proposes planned/ for ;early: D^embei^vT1iei:3fe wfere in September, $936, at; I09&\ and are currently redeemable at U0; The preferred stock, is callable at $115 a share. Probable bidders include Halsey, Stuart & Co.; Inc. (bonds only);* The First; Boston Corp.; Harrinian; Ripley & Dillon, Read 8c Co. Inc.; Central Republic Co. (stock) andBmith, Barney\ & Co. (stock)." •' sales and Blythe & Co., Inc. First Boston Corp. It $33,000,000 of bonds and $10,000,000 of new preferred stock and to contract a bank loan of $4,000,000. These Electric Co. (Ala.) mortgag^ 3%% bonds and'$4,00(^000 of $8 stock. ferred authority to issue 64,000 shares of new preferred to be sold at competitive bidding. Shares would be offered in exchange for outstanding 7% and 6% preferred stock. * Probable bidders include Dillon Read & Co., Inc.; The 1946, Of each $6 preferred share at $150, and preferred share at $137. There are 793,581 shares of the former issue and 978,444 shares of the latter issue outstanding. On the basis established in the ? Birmingham i reported company planning to refund its $38,000,-* OOO first purchase of for June 30, on • Oct. 23 company applied to Alabama P. ' •of the for r i11$ || 17, +? * %^ j *-r s ^ Kansas City Power & Light Co* ^ Oct 23 $7,620,000 equipment trust certificates^ series R, to mature in 10- equal instalments'of $762,000 each on Nov. 1, 1947-1956 will be received J up to 12 noon, Oct. 24, at company's office, 2 Wall Street, New; York;; Probable bidders include Halsey, Stuart & Co. Inc., and Salomon Bros. & Hutzler. Bids Light Co. Power & S<fn (10/24) Baltimore & Ohio RR. hearings on company's plan for ^retirement of its $6 and $5 pfd stocks, through voluntary exchange for common stocks of five of the company's subsidiaries or through later payment of cash. The plan would establish the fair and equitable value of the rights SEC 22 Oct. ahd Middle West banks. (4) not to exceed $2j024,900,a und" $2,352,000; (5) not to exceed $2,744,400. warrants. thirteenths to holders of ' -> ' Co. & Power American Gas Oct. 22 - & 1,000,000 ■ common stock after Florida ; Power. &. Light Co., Kansas Gas & Electric Co., Minnesota Powers shares of a new class of preferred stock which will be a junior issue, pending retirement of the 6% cumulative preferred stock. Probable underwriter, The First Boston. Corp. of of fivO i subsidiaries, namelj^ stocks * Aluminum Co. of America • /■ ' - various government fied is a Society-of Certi- : Public Accountants, Director, New York State Society Public Accountants, regulations," laws, forms and re¬ of the ports will have on our future. • A Certified Public Accountant of Certified of,.New York,. New Jersey and Texas, Mr. Peloubet was consul¬ tant to the War Production Board tute -of Accountants, National Di¬ - and to the U. S. and was Navy Department, in charge of ah- account- Treasurer rector of the American Insti¬ of NACA, Director of the Arbitration Association of Amer¬ ica and-a~ member of the countants Club of America. Ac¬ .. • Volume 164 Number 4536 "Towii THE COMMERCIAL & FINANCIAL CHRONICLE a full-dress discussion of which may instigate a climactic' re-examinatioh "Of the basic concept of the entire World Organization;. Meeting of Moves to Western ! * . ' • 4\ ' * i liberative body." ~ routine matters to be determined by this Assembly include agreement on the 1947 budget $25,000,000, of which the United States will shoulder 49%; the admission of new member nations; approval of agreements with the specialized agencies, as UNESCO, the International Labor Office, at about , de- supreme, a And Security Council; and that most knotty problem- of permanent site for the entire Organization;; is There is f I * Should the Town Hall meetihg technique unfortunately -prevail —iri a context of long-winded delay—the effeet- will be- a severe boomerang against the public's morale/ President Paul-Henri Spaak of: the ^Assemblycpn two occasiims ^dda^ exhibited oxtreme senshr tivenes^ regarding, such; public reaction. In hia initial address I Hall * he^plaintively 'i mptor -at- City as . ^lunchephy: •*' he^deVotedrconsiderable effptt^to-'Self-defens^^egarding the organization's "weakness," his defense being based en the world's encouragement Organizations. 6. Mere Wishing for Peace Insufficient - for in *; next thieiibeffectivlhess..depehdihg; wholly six . weeks are a ' Railway Company, has today been declared, payable December 16| 1946, to stockholders; of record at the close of business November be mailed to all stockholders of record at their addresses as they appear on the books of they and Red Crescent Company unless otherwise instructed J. J. countries, in conjunction a hbt: with^e^aatdal in writing. MAHER, Secretary, Q with NATIONAL DISTILLERS regular and share on thb out¬ standing Common Stock, payable on November I, 1946t to stockholders of record on-October II, 1946. The transfer books will not close. The Bobby-Soxers* Delight President our psychology.. It THOS. A. CLARK : . treasurer ■ bad Was judgment because, instead of confining the knowl¬ ■ per September 26t 1946. andshowecf; misconception of any dividend of 25tf extra INTERNATIONAL apathy to the comparatively small HARVESTER if ft COMPANY of The Directors of International Harvester Company declared a final dividend cn the commmctr' stock of the Company for the fiscal ending October 31, 1946, of forty cents per share, payable December 20, 1946, to of record on November 22, 1946. same- time; the Directors declared- a quarterly dividend of sixty-five cents '36c) year (40c) stockholders At to 'itidividual hero worship we of the more powerful Security Council .having been; so burely are again vividly and recurrently demonstrated,^ what chance is-there for truly ^Aiqg the bull's eye. For every bobby-soxer, ^^ffgfitiVe^ action'oh: any Of the controversial issues relevator by the Assembly? boy, stenographer, truck ^ driver, as well ~^"By*Way"Of contrast, thfe Council Of Foreign Ministers which-will -as Park Avenue hostess, is feverishly interested \ i* be in session in:New York AcOiicutrentlysbeginhmg. Nov. 4, must -pitch "in? one colorful glamorous j right *in and make - crucial and concrete decisions; First; of all -in Molotov, the American public's own "inter¬ i importance, the Ministers must come to grips with drafting a neace | impotence: Checks in paymenf of these dividends will' ? people attending, it broadcast this to f36wer" is ohiy that of v rebommendatioi^ not of absolute directiori. the whole world. Moreover, it overlooked the | Just. like f the * Economic and. Sbcial Council, thS Assembly has nb fact that the American public is interested! in< *, enforcement "teeth"; it depend^ oil moral suasion oil the,part of the. personalities far more than in issues. And. as public to; implement*its-;proposals j.with t action. tfSo, > quarterly dividend of Seventy- out of the surplus of net profits of the Company^, for the fiscal year ended December 31, 1945,; Spaak's bawling-out this morning Of the American public for lack of enthusiasm was both- stupid edge* of matter^which "are >uled important by < a- two-thirds „-tfoter arid; these iiumber matters which are considered routine by a simple5 maj ority vote? Its * A regular five Cents (75c) per share on 1,298,200 shares of Common Stock without par value of Southern stationed in non-^eriemy countries. Assembly | by the member states. The Assembly has no veto powers but decides; £ declared, payable December 16, 1946, to stockholders of record at the dose of business November 15, 1946; children's emergency fund. the binding, their voluntary acceptance on on the Preferred Stock of Southern Railway Company has today been, Cooperation, iri Paris, Cross Red York, October 22,. 1946. share per items, any one of a number of PRODUCTS CORPORATION controversiaL'^oliticar sounding board" matters can be introdueed-— The Bftard: bf Dlrectbr9 has declared a as the former "abortive attempt of Russia- to have the: Allies report quarterly dividend of 25tf per share * the the overrun * Success, for of ($1.25) In addition to the 53 Scheduled The ddWs and Lake New A dividend of One Dollar and Twenty-five Cents and subsistence allowances for various commissiohs., children 8. Establishment of Contrasting Realism of the Councirof Foreign Ministers v Unfortunately, the "debating society" character of the General -Assembly will' be thrown into sharp relief when the Council- of s Foreign Ministers of the Big Foui? concurrently* meets NoV; - 4. - • FOr the- Assembly proceedings; scheduled to sprawl over Flushing Mea^ * a 15, 1946. of Intellectual UNRRA. * ^ Travelling 7. Aid The other realistic note sounded byr President Truman- today^Wafi. ? nis cautioning that the people's desire fof pe4ce^-ih lieui of War1—as ph ideal is not enough to»preveriti war. Not 'only aggression itself, but r tyUlihgness to feffain frqm national sovereignty for the benefit of the ^international collective interest, ;is the basic indispensable element in any successful world organization;• ' ^ 4i.-Transfer, of the Institute to- UNESCO. 5: Formal lack of any better alternative. irr selecting consume * commented on the public's alleged -lack of proper revealed in the spectators' apathy toward the morning's cavalcade of delegates. Agaih iri his address at the City-s enthusiasm agenda, to' these six and one-half weeks and more. In fact the formal agenda has just been inflated to 53 items,^ by the addition of the following eight being handed in from the recent sessions of the Economic and Social Council: lr A-report of~ the Council's first three sessions^ 2. The Council's request for authorization to obtain from the Inter¬ national Court of Justice, advisory opinions on legal problems. 3. A request for a $300,000 load for the establishment of the World Health Organization. | such indecisiveness perhaps additionally indicated by the President's | major emphasis today on the "UN's humanitarian agencies? < ,r", | dearth of no DIVIDEND NOTICE -!■ v. the body really be? Will the ^Assembly supers-debating society, voluntarily or in- f voluntarily- abstaining from \making enforceable decisions? i Company and the Provisional International Civil Aviation Organization; elec¬ new members of the Economic and Social Council and will this I merely resolve itself into Railway tion; of the r »^4... How "deliberative" Southern Some of the relatively session of the UN \ • - The eo.ncrete' query Confronting, all thoughtful, observers- of the I Current '-proceedings "was significantly indicated' by Mr. Truman's I succinct assertion this afternoon; "This is the,world's DIVIDEND NOTICES The Miscellaneous Agenda Hemisphere (.Continued from first pagfe) , 2131 the share on the common stock payable Janu¬ 15, 1947, to all holders of record at the per % ary close of business December on SANFORD B. 16, 1946. WHITE. ; Secretary - J' treaty with erations : Germany; •> whose periphery have only 'the Paris delibmust examine; the controversial made aUParig-on, the? draft treaties^with J^umania; skirted. Also is sfill raging. East-West v. been DIVIDEND NOTICES 181st A-dividend share has stock of . dividend of of fifteen cents ($0.15) a Been declared upon the BURROUGHS ADDING record of the British Government the at close (n establishing independence in India. November 1, 1946. Progress similarly is being, made in solving-the problems imln- donesia, arising in the liberation of the Netherlands East Indies from; Japanese occupation. The major issue still in controversy there arises,, business common 15# Ahd, "of courso,; the highly' controversial and State Department policy-makers And our military leaders. diplomats want to pursue a policy, ;; P. :.tw« Duiulier, Treasuter, INDUSTRIES, INC.; SITUATION WANTED Trader Available Experienced THE desires lished over-the-counter connection with ... Of -course' this overall indecision is accentuated by the tainty of our future relations with the Soviet Union. With ^inatid status with Moscow as mutually "fluid"_as it now is, estab¬ "decide whether now to definitely embark of jreiying on the United Nations for our on a whole-souled policy future security; or whether to establish "defensive-offensive" out- the strategically located bases through¬ globe—thereby involuntarily sabotaging thk World Organ^ ization. bers in social and economic matters, and regarding provisions for treatment of native populations. i ' ' the • "! .V'4 " ;v Re-examination of the Veto Also oh the provisional agenda is that volcanic item—the veto; l948r of record November 4-; GRIFFIN, Sectetary-Treasurisu ' 1 M. E. NOTICE Kingdom of The Netherlands High-Class Confidential Executive Secretary -AVAILABLE Ready and of able^to take large affairs. Capable of making matters and; |s By is fully -DeclarationOf Netherlands Securities % The Office of the Financial COunselof of — been Has had of and and lighten the business burdens of over • , any > - . ^ prompt excellent long capable Stocks, Bonds Has an of reason and of years satisfactory, decisions correspondent, experience in , i , the on r ■ important ( Securities business, jsuccessfully making satisfactory adjustments Real Estate investments. Executive head of and is advanced thereto.' • experience in modern ns an business administrator methods and and pertaining any , clean and orderly circumstances. mercial & in a ' t' personal Financial life and can be depended >■■■.■■ ■ ■■ lands securities and owned who are held in the corporations by domiciled not or United or States individuals resident in the Kingdom of the Netherlands have to be de¬ clared to the Netherlands Royal of September 17, 194r as pursuant 16, E-100 by Royai Decree F-272 of Novem¬ 1945. The declaration period has been extended personality^ with training and ability to handle difficult problems, and placate diversified minds and individual desires. a as ber Agreeable Leads Embassy, 25 Broadway, 4, N. Y. informs interested par¬ previously announced, that Nether¬ York ties, amended coordinator details Netherlands New Decree of important financial enterprises. abstainer, and trust-worthy in every respect. valuable If interested v": has payable December 1, 1946 FINANCIAL Alert mind, Again, some of the American:proposals are likely to-run into criticism, if not actual opposition,: by the Russians—regarding the "open door" factors of equal treatment for all United Nations mem¬ Pre¬ value) par SITUATIONS WANTED man we cannot Siy^c Convertible 8, N. Y. uncer- diplo- ' 5%■ ($25.00 16j Married, 33' years, old; Box L 1017, Commercial & Financial Chronicle, 25 Park Place, New York RED CROSS the stockholders the our on. Stock to trader well quarterly dividend of- share firm. to the World .drganization's basic OOncept—of international coopera-* — the military service, concentrating*, on the preservation of ,! regular been deelared tion * 4 Philadelphia, Ph. = New Tork;, October 17„ 19461 Secretary While seGhrity^ want- to keepf undejr; tl. S. control all? formerly-mandaited territories; which conceivably might! be needed for security purposes. 22,1946 ' Geo. W. Evans, ... conforming . I October 15, 194ft Volubly disputed Ah the One hand our payable JOHNS'HOPKINS;" Treasurer ber 2, 1946 to stockholders Of record November SUPPORT /- declared; THE UNITED GAS IMPROVEMENT CO. cor- ferred Palestine issue. cannot ba: settled by unilateral Pi? bilateral policies of per Stock, share on per stock of the pbrAtion, payable bh Decem¬ per \th&BigPoweris,rbutphly!;b^an^ihcluSive:actte plafed Trusteeship Council of thO tinited Nations. * " ? disposition of the Japanese-mandated islands presents, a special fjfdbleM: The American position involves a difeel eohflict batweerV cents Dec. 18> 1946, to stockholders A ^ii6t!waht thes6:Marids ihtluded lihdef^^th^doihihatidi^of^fe'Jay^ ; 65 Capital of record Nov. 20, 1946. from the demand by the Indonesians that the new territory take in. Sumatra; and other islands, whfereas the Holland- Government does^ - * har been has of the on value $13.50 per share, par quarterly a the WHITE, Secretary WOODALL Detr'6it,Miehigan, October 15,1946 of the share Bbardi of Directors this dhy dfeclarfed DIVIDEND dividend A CORPORATION CONSECUTIVE CASH MACHINE COMPANY, payable Debringing self-government 4° member 10, 1946, to shareholders of the worldfs half-billion; dependent peoples is the constructive action * SANFORD B. DUMOftT ELECTRIC? THb the has at of DIVIDEND NOTICES , dollar on 1946, 2, declared to stockholders of record business November 4, 1946. close now at this session of the Assembly. The United Kingdom on Monday submitted draft terms of agreementsfor its African mandates* •,France and Australia have similarly: sub¬ mitted drafts covering their? mandates; and Belgium and New Zea-land have definitely promised* to Submit them in the near future. The outstanding recent event in r Molotov ' •ference, will finally- be established . M; Quarterly dividend Nd. 113 of one and seveht.v-flve cents ($1.75) per share preferred stock payable December rift Trusteeship 4n Important Issue seeliis that the tJnited Nations' Trusteeship Council^ wbich liaCbeenTdebated ever siiice the beginning of the, Sam Francisco ConIt HARVESTER COMPANY Frank Sinatra." they ^'recommendations I Bulgaria, Finland, and Italy, regarding which the ? national INTERNATIONAL "■ upon under .?V' interview, please write Box S 1016 Com¬ Chronicle, 25 Park Place New York 8. to December 1, 1916. 44';< Securities for which no declaration is filed will become VOID in accordance with the terms of Circulars said and Decree.the ^ necessary fofms o'£ declarations may be obtained at the Office of the Financial Counselor of the Nether¬ lands New Embassy, 25 Broadway, Room 1132, 4, N. Y., and at any Consular York Office States, of the Netherlands in the United Building at 63 Park Row so as to • complete organization on an industry-wide basis. At Guild the bank is willing to give its em-; Organize Banks And Brokerage Houses of Wall Street Community ikival Unions Now Seeking to By EDMOUR ployees granted in the form GERMAIN reached high pitch on Wall Street this past week as Financial Employees Guild, CIO group, sought actively to in-fg; vade field heretofore private happy hunting ground of United Fi-|| Employees, independent union. UFE still in midst an of A. M. Kidder & Co. nounced mass 7 The Financial Employees Guild has not been entirely without suc¬ cess in making inroads into the New York financial community but, on the surface at least, the United Financial Employees to possess some ad¬ vantage. The UFE is firmly en¬ trenched in the New York Stock Exchange, or so it thinks at least, conducted & even this presumption on its financial district. The relation between the Stock Exchange and the UFE is not ex¬ tution in the actly a happy one at the moment, The union is seeking a the union if the union refuses to pledge it¬ self to a no-strike agreement. The another contract with Exchange thinks that its request principle. The union claims a no-strike clause in the contract would under certain cir¬ cumstances force its members to a For detailed index of r.'-> next "r':: , ;* C 'i.'.O 2071 contents see page Thursday from 3;30 to 4:30 p.m. - Page V Overdone?—Paul Mutual Funds elec- 2i25 Security Issues Calendar ___l_ Observations—A. Wilfred May , Reporter Our Reporter's Commons & Pfds. • _2130 1 t' ,1 ' • 1 ' **1 , * * _2084 FOREIGN SECURITIES ______»2082 2091 2123 Securities Salesman's Corner Registration Securities Now in « . 2076 Railroad Securities Real Estate Securities -LL... Tomorrow's Markets . NEW ISSUES ;-Report_-'L*_4_^>^__r_^„^__^__^_yfc Prospective' Security Offerings-^— Public Utility Securities__:___ 2122 (.Walter Whyte Says) pertaining to opening * See Mr. May's story on cover page . ' * _2087 2 Governments on Ralls 2086 .2079 ; Our Old Reorganization :_2078 New last week dramatic . ;__2079 Einzig j NSTA Notes session of UN General Assembly. M.S.Wien&Co. ESTABLISHED 1919 40 Exchange PL, N, Y. 5 HA. 2-8780 Teletype N.Y. 1-1397 Co. lunch-hour Trading Markets in Allen B. DuMont Laboratories Jefferson-Travis Corp. Lear, Inc. 148 State St., Majestic Radio & Television Corp. Radio & Television, Inc. Tel. CAP. 0425 Boston 9, Mass* Teletype BS 259 : : N, y. Telephone HAnover 2-7914 Wilcox-Gay Corporation lege when it asked for it last incorporating a summer. Members of the Guild on Sun¬ 25% wage increase, and other de¬ mands, with the Exchange but the day voted in favor of empowering Exchange feels that it would be the union to call a strike at Peo¬ ple's Industrial Bank if the bank worse than useless for it to sign is Co. contract, new • & Harrimari 2090 Drive Export however. - INDEX election an bargaining rights employees of Brown Securities British Is Employees Guild rallies at the corner of Wall and Broad Streets Tuesday and yesterday to advance the cause of unionism in general and its own cause in par¬ ticular, succeeding in attracting huge crowds that ran into the hundreds, though not all of them employees of the firms and banks they want to organize. The UFE is very much upset over the fact the police is allowing the Guild to conduct street rallies when it denied the UFE a similar privi¬ part, if it is that, would , tend toi give it some advantage as, from some points of view, the Stock Exchange may be rightly con¬ sidered a central, pivotal insti¬ • State -Labor The Financial •^would appear and y Dealer-Broker Investment Recommendations- employees of the Curb now cov¬ by three^^ jpontracts ;for set)"arate divisions ^of the employees there. The UFE is also negotiating for the runners of Stern, Lauer ered •'i (Continued from page 2071) Regular Features Canadian if perhaps, as would seem at<^ witH A. M.. Kidder & Co; are ex¬ present writing, not too effective attempt to obtain a foothold in a pected to commence shortly. The UFE is also in the midst of ne¬ field which heretofore has been gotiations with the N. Y. Curb pretty much the private happy hunting ground of the United Exchange. One master contract is Financial Employees, an inde¬ being sought which will cover all V the -%<•- • fion at Brown pendent union. - of y rally for all of messengers and guards of Wall Street Building on Park Row tomorrow at r^v Union activity reached a high pitch on Wall Street this as the Financial Employees Guild* a CIO group, made a ';rr: collective for rally of all mes¬ guards of Wall Street firnis at the Pulitzer the conduct will Brothers Financial Employees Guild has an¬ At Guild's request, State Labor Board will conduct an Brothers Harriman & Co. next Thursday. / Board among banks and firms at Pulitzer 5 p.m. also, request sengers and banks and P: '.Wp'tyrf:\j~: * conduct a; inass negotiations with New York Stock Exchange and has opened nego- J tiations with Curb Exchange.' It has won election among employ¬ ees con¬ announced has Guild The tract. of a that tomorrow at 5 p.m. they will- Union activity nancial guaranteed by salary raise Thursday, October 24, 1946 FINANCIAL CHRONICLE THE COMMERCIAL & 2132 matter of Gearhart & Company INCORPORATED negotiate with the union. The union announced yesterday however that the bank has agreed i to meet with repre¬ sentatives o fthe union. On Mon¬ to refuse should day, the Guild won a State Board election among the - r-::- , 45 NASSAU STREET, Labor Suburban Elec. Sec. Av ■' \ '-.v. y Dealers Association Members New York Security Rogers Corp. Thompson's Spa Inc. NEW YORK 5 TEtEPHONE PHILADELPHIA TELEPHONE REctor 2-3600 Enterprise 6015 Airplane & Marine BELL TELETYPE new york 1-576 Schoellkopf, Button & Pomeroy mes¬ guards, - vaultmen, ele¬ operators and porters of the cross their own picket lines and the union refuses to put itself in Irving Trust Company, 146 to 61. this position. Further negotiations There were" 236 eligible to vote ; on the contract will take place in this election and 220 did vote. There were six challenged bal¬ Saturday afternoon. Last Thursday, the UFE won a lots. One ballot * was blank and State Labor Board election for six were void. The Guild's street demonstra¬ collective bargaining rights for f the employees of A. M. Kidder tion, on Tuesday was partly di¬ rected against the Bankers Trust Co.; 76 to 64. There were 150 ^eligible to vote and 144 did vote; Company in protest against a 10% bonus granted by the bank to its j/ There were two challenged votes. I/14.U.V V* U.WJ Xixv J very day. The One ballot was blank and one was employees that void. Negotiations for a contract union wants any bonus money Worcester Trans. Assoc. sengers, Boston Real Estate Trust vator ^ * C;y. ■ -y.'.'y.v : I ■' V■' -V-\ 5 MINING and OIL STOCKS , Ralph F. Carr & Co., Inc. 81 • v vv M.. WW *7 vvw tr J » SoldQuoted Bought ★ ';/■ :':■■■■ iy'h-- ■ ;■ v .. v : V''' Teletype BS 328 ★ ★ ' / ' ■ '.V ' > -.V\ V /' We epecialize in Morris Stein & Co. • Industrial Issues„ Established 1924 ; alt Insurance and Bank Stocks ■ HANOVER 2-434X JiS"TEtETYP&^.T.^i-28^ Teletype—N. Y. 1-971 BRITISH SECURITIES . * j , Investment Trust Issues Public Utility Stocks and Bonds TEXTILE SECURITIES Securities with Firm Trading Markets a New Eng. Marked Frederick C. Adams & Co. Specialists in Unlisted Securitiet Ail Issues .. New York H.norer 2-7913 ' SO BROAD ST., N.Y. 4 HAnover 2-0050 Milk Stroot, Boston 9, Mass. Boston Hubbard 6442 ]" New England ; >eciatixingItt IXntisted Securities 24 FEDERAL STREET, BOSTON 10 ■ P.ARL MARKS & P.O. INC. vEstablished in 1922 Tele. BOston 21 Tel. HANcock 8718 " FOREIGN SECURITIES ' iSanh—Insurance SPFnATKTq 50 Broad Street . New York 4, N. Y. Public AFFILIATE: CARL MARKS & CO. Inc. CHICAGO Utility ~ Industrial—Real Es tate - , . Grinnell j||| Gerotor-May Eastern Sunshine Consolidated Mastic The Asphalt Company Is Automatic ■ ' ^Susquehanna Mills Bonds, Preferred and Common Stocks "Wl" a consolidation Signal Eastern BOUGHT—SOLD —QUOTED Corp. Engineering Co. REMER, MITCHELL & 208 120 Broadway New York 5 Telephone COrtlandt 7-0744 Bell Teletype NY 1-886 Empire Steel Corp. < of *Prosj>ectu$ on request ! and Delhi Oil W. T. BONN & CO. ^General Products Corp. Lumber & Timber Industries, Inc. Traded , *Seaboard Fruit Co., Inc. Amos Treat & Co. 40 Wall St. BO 9-4613 New York 5, N. Y. Tele. NY 1-1448 SOUTH LA SALLE ST., CHICAGO 4 • WESTERN UNION TELEPRINTER "WUX" • REITZEL, INC. PHONE RANDOLPH 3736 BEll SYSTEM TELETYPE CG-98? Hill, Thompson & Co., Inc. Markets and Situations 120 for Dealers Broadway, New York 5 Tel. REctor 2-2020 Tele. NY 1.2660