Full text of Commercial and Financial Chronicle : October 25, 1951, Vol. 174, No. 5058, Section 1

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UNIVERSITY

In 2 Sections

ESTABLISHED 1S39

OF MICHIGAN

Section 1

-

OCT 29 1951
BOSIKESS ADMINISTSATIOH
U88ASY

Reg. U. S. Pat. Office

EDITORIAL

.

V

.

in

seem

approximately 60

How different things would

of
prolonged
of Congress just now come to an end af¬
a basis for a campaign of statesmanlike
light of all this if the record of either

session

forded

I wish to

af¬
all aspirants for public office who

forded any

and

begin with

a

few preliminary remarks

in

way

any

bound by the deficiencies
major political parties of

and the clamor of the

"

the

day! One

can

only wish that modern political:

organization and tactics did not render it so
public life

diffi¬

independents to make progress in

cult for such

that somewhere, somehow real
real understanding of the basic facts

leaders with

v

or

—

Believes

Economists

of

producers
*

are

•

still

which

of the

to the discomfiture

recenf times,' the

It

To do

people

on

would often in effect convict

so

perceive or to act upon
these issues when opportunity repeatedly pre¬
sented itself in the legislative halls during the
themselves of failure to

past year or two.

and the

course,

of the

master

of
professional politician is past

art

There are a few exceptions,

record appear

of making his

really is not. Faced with an aroused gen¬
public even the professional politician might
it profitable to get down to brass tacks and
Continued on page 30

what it

NSTA

Pearson

•

ISSUE

CONVENTION

:

been

long time. During this 32 years there have
only 3^ times when it has paid investors in good
(as distinguished from scalpers, or intermediate

movement

traders,

or

outright speculators in specula¬

to "sell everything" and go into cash. One
of these times was in 1919; another was in 1929; and antive stocks)

Continued

24
talk

by Mr. Hooper before
Analysts, Inc., October 22, 1951.
*A

New

Municipal

Securities
telephone;

R. H. Johnson & Co.

across

State and

Bonds

Canada

SECURITIES

upon request

,

:

Bond Department

Chemical

30

DEPARTMENT

BROAD ST., N. Y.

64 Wall Street,
BOSTON

Buffalo

Albany

Troy

New York 5

THE NATIONAL CITY BANK

of Commerce

OF NEW YORK

Harrisburg
Scranton

Providence

Williamsport

Wilkes-Barre

Head

Bond Dept.

Teletype; NY 1-708

Allentown

Canadian
.

4
Bought

,

and Bonds
Direct

VANCE,
Ill

SANDERS & CO.

14 Wall

Devonshire Street

and

Chicago

York
Los

•

-

,

..

N. Y.

CANADIAN

•

Boston

•

Honolulu

•

OF

THE CITY OF NEW

YORK

20 Exchange PL

BONDS & STOCKS

New

England

Public Service Co.
Analysis

Goodbody & Co.

Pomehox Securities
Grporatio/s

upon

request

IRA HAUPT &

CO.

Stock Exchange
Principal Exchanges

Members New York
and other

ESTABLISHED 1891

Chicago
»

NATIONAL BANK

sold

DEPARTMENT

MEMBERS NEW YORK

Exchanges

Los Angeles

THE CHASE

Portland, Ore. San Francisco Los Angeles

Quoted

Principal Commodity

Security

San Francisco

Angeles




Street, New York,

Members of

^

Wires

Dean Witter & Co.

BOSTON
New

Private

Toronto

CANADIAN

Stocks
Hawaiian Securities

Office:

New York Agency:
Seattle

Pacific Coast &

authorized dealers or

The Canadian Bank

PHILADELPHIA

,

Washington, D. C.

Proipectui frcm

21

Security

Monthly Commercial Letter

HAnover 2-3700

COMPANY

page

of

Municipal

INVESTMENT

BOND

on

Society

"Chronicle" consti¬

600 Branches

Established 1927

BANK & TRUST

York

an

U. S. Government,
Stale and

O., Hooper

stocks

84-page Special Supplement devoted to the Annual Convention of the
NATIONAL SECURITY TRADERS ASSOCIATION AT CORONADO, CAL.

tutes

L.

writing about securi¬

and that's a

Con¬

OUT TODAY—Section Two of today's

been

ties and the stock market since 1919,

gold-standard and gold-scarcity have wrongly
been made the culprits for the 1929 depression. I believe

address hy Mr. Cortney before the American Mining
Los Angeles, Calif., October 24', 1951.

equities must be based on
cyclical ideas of stock price

I have

The

*An

in

ment

fluctuations.

they had clearly distinguished between money
and credit, we could have prevented the intensity and
length of the 1929 depression.

gress,

the

approaches to the market's be¬
blanket generalizations and
very idea that scientific invest¬

the old

if

page

forecasting

tally changed stock market. ' ;
Frankly, I am impatient with socalled
technical
systems,
all one¬

the

and prices has already had disastrous
consequences for humanity.
I share
the view that if those managing our monetary destiny
in the 1920s had understood how gold influences prices,

on

in

havior,

Philip Cortney

Continued

than

sided

Warren

on

and

and

true

probable behavior of our fundamen¬

prices. This lack of a body of
accepted doctrines on gold, credit

issues.

find

by

the right side of real

to go to the

and

early possibility.

fascinating thing about this profession of ours is
deals with ever-changing data which find con¬

it

more

gold and prices has
further muddled our thinking on gold

gress

eral

book

" . .
:
would be difficult for most members of Con¬

and

Industrials

Dow-Jones
an

systems which were helpful, and
perhaps infallible, yesterday may be
obsolete today.
And in no-area of
the field of investment art is this

this

scheming, professional politician.

cyclical

stantly fresh applications in a dynamic economy which
is in a perpetual state of flux as it evolves into succes¬
sive new phases and environments.
Investment practices and trading

on

question: In the literature on
there is also a constant con¬
fusion between money and credit. In

300- for

to

95-100 for rails

The

that

of: gold?.

disputing

rise

i

erally accepted doctrine: as to ; how
gold influences prices. Does gold act
on: prices via the " credit system or
.does gold influence prices because it
represents new monetary: demand in

the/hands

Stock Exchange

of long-term
holdings.' While he expects no extreme market move¬
ment, maintains stocks are fundamentally cheap on basis
of earnings, dividends,; and greatly increased book values. ;

money

of life would emerge

Members New York

swings,! Mr. Hooper advocates maintenance

1

not

are

.

Disclaiming belief in gearing investment policy to

might help you understand why, in my judgment, our
gold policy does not make any sense.
Why is there so much nonsense said about gold and
'
the gold - standard?
Mainly I be¬
lieve because there never, was a gen¬

But what an opportunity is thus

qualities!

HOOPER*

Chief Analyst, W. E. Hutton & Co.,
•

objective, halting of "engine of
inflation" and preventing severe and prolonged depres¬
sion, by restoring gold standard with greatest technical
skill. Advocates, while getting ready to return to gold
standard, v/e should maintain present gold-bullion stand¬
ard, and permit free purchase and sale of gold, as well
as its importation and exportation.
Economist urges as our

major political parties during the

the

By LUCIEN O.

f

International Corp.

Economist and President of Coty

days back home to mend political fences and lay
the foundations for the election campaigns sched¬
uled for next year.

Sense?

By PHILIP CORTNEY*

Individual

Congress has at length adjourned.
members of both houses have

Make Any

Copy

a

Stock Holdings Should
Not Be Disturbed!

Does Our Gold Policy

We See It

As

Price 40 Cents

1951

York, N. Y., Thursday, October 25,

New

Number 5058

Volume 174

*

115

BROADWAY

NEW YORK

STOCK EXCH.

40 Exchange Place,

111 Broadway,
WOrth 4-6000

105 W. ADAMS ST.

CHICAGO

New York 5, N.Y.

Teletype NY 1-702-3

WHitehall 4-8161

Boston

N. Y. 6

Teletype NY 1-2708

Telephone:

Enterprise 1820

2

(1546)

The Commercial and
Financial

The

TRADING MARKETS IN

Security I Like Best

Consumers Power
Common

&

Puget Sound Power & Light

(The articles contained in this forum

they

are

New York Hanseatic

he regarded,

to

GORDON

Y.

offer

as an

New York

York

5

1,250

Phillips Petroleum (Common)

Specialists in

at

MCF, adding net
capital
and
deducting

$350 mil¬

4,100

By
1945, the capi¬

2-7815

tal investment

had

reached
Gordon

about

American Furniture

is

ment

The

an

Dan River Mills

not

million and

another

week

nouncement

STRADER,TAYLOR & CO., Inc.
TWX LY 77

I

a

decade.

by

goes

Hardly

without

oi

some

in this
time

from

come

an

new

pansion

MIDWEST STOCK
EXCHANGE

are

1940

to

of

date,

it

is

the
most
important
developments of ^ the

past

several

today

products

new

decades.

They

contributing
on an

are

spectacular

ever-widening

scale and

promoting progressively
higher standards of living. Until

Co.

about

ten

materials

raw

thesis

.

years

of

the

syn¬

commercial

Petro-chemicals,
the

in

used

basic

products
coal, cellulose, and salt.

were

St. Louis l.Ho.

the

ago

*

derived

from

almost inexhaustible supplies

of petroleum and natural
gas, are
the bellwether of the

expanding

chemical industry. Due to the in¬
ventive genius of the chemist and
the chemical engineer and the

PRIMARY TRADING

ear¬

volubie

Petroleum

is

in

acreage

States.

a

trend

this

major

the

of large
petroleum industry

leum

Common

the
prominent

West

and

gathering system in
Phillips has a 50% interest

June, 1952.
Phillips is the largest producer
natural

gasoline and, in the
competitive oil business,
occupies a particularly favorable
position due to its low cost

highly

opera¬

tions.

Natural

considered

gas

the

dustry; A

reserves

are

this

Petroleum

Common

offers

sively

decision

its gas

upon

Company,
cals

is

and

ings,

of

common

the

year's

value

on

the

analysis,

Phillips

Petroleum

especially for the patient investor.
Phillips is a dominant factor

McANDREW & CO.

in the petroleum

INCORPORATED

try as well as
and natural gas

1900 Russ Bldg., San
Francisco 4
Tele. SF 370

ations

chemical indus¬
in the petroleum

ther

price

same

time has

industry. Its

oper¬

main

year.

carbon

black used
of

plant

pyridine,

an

in

synthetic

the

Common

4|'2%

tion

and

characteristics.

&

rights

*

Pfd. & rights

Commonwealth Gas Corp.

fur¬

at-

the

It

& FHEHKEL

and

owns

important commodities in
a
strong growth trend. Current
earnings and dividends are being
capitalized at what will eventually
to

One
this

Members

be

subnormal

position is

150
Tot.

N.

Research

*

of

most

the

Broadway

Dealers

Assn.

New York 7

>

DIghy 9-1550

The

Tel. NY 1-1932

Specializing in

Mountain Fuel

Supply
Equity Oil

Utah Southern Oil
Analysis

few. certainties
of

Security

levels.

strong.

Companies

uncertain

Y.

,

secrets

&

COMPANY
Established 1899

160 S. Main St.

of

Bell

The

world

;

request

EDWARD L. BURTON

ravelling the'
nature.

upon

in

economies

the

amazing progress that is
being made by scientists in un¬

.

r v

Salt Lake
City 1

.Teletype SU

464

Oldest Investment House
in Utah

of

|. tomorrow Js
being

snaped

in

today's
laboratories

and

them

s

•"

from

..J

v
„

will

-

A

come

m

BUY

-

>

p rove d and

u. s.

cheaper
products,
equip

m

Ralph

A.

Rotnem

processes

that

A

will

savings

bonds

ent

and

manu¬

will

us

new

give

drugs,

chemicals,

organizations are Phillips used in synthetic fibers. The com-' foods, clothing,shelter, amuse¬
Company, Phillips Chemical pany is the pioneer in the LP gas ments, transportation, power and
Company, and Phillips Pipe Line industry with its
weapons. Today's frontiers are notwidely known
Company.
Philgas.
geographic, but scientific, and the
Net assets
today of over $700
wise
Next month the
investor
who
is
company will
thinking
million compare with
Oil

ACTIVE TRADING MARKETS IN

UTILITY STOCKS
Direct

Private
to

New

million

York

I. B. Naguire & Go., toe.
Nat'l

31 Milk

Asm.

of Securities

Dealers

St., Boston 9, Mass.

Tel. HUbbard 2-5500

Portland, Me.
Hartford, Conn.
Open End Phone

Inc.

'

Tele. BS 142

Enterprise
Enterprise

2904

6800

to New York Canal
6-1613




prior

to

Pearl

Harbor.

During this same period gross
operating income expanded from
around $142 million to about
$534

CAnal 6-1613
Members

be

around $246

Telephone

million last year, while net
income
rose
from about $17 million
to
more
than1 $51 million.
New
peaks
this

will

probably
which

year

be

reached

promise

to

be

exceeded next year. At
present the
company is in a period of

greatly

expanding
chemical

its

already

activities.

extensive

'

the

recipient

of

the

coveted

have

"Chemical

scientific

terrelated
to tne

and

for

Engineering." Two in¬
accomplishments vital

welfare

its

ot tne

defense

United States

won

this

award

Phillips. One was the comdevelopment si^e 1948 pf

^f^cial

high abrasive
tne

otner

carbon

was

tne

black

and

companys

good

companies

representation

that

are

research

in

in'

that
who

have

business

ability to translate these

.

into

profits

for

new

their

prime factors

A

■*>.

12-Year Performance of
35 Industrial Stocks

shareholders.
>

Two

Forum,
chosen

years
a
as

list

ago

in

of such

"The

this
stocks

BOOKLET
same

v

Securities I Like

Continued

on

ON" REQUEST

was

major contribution to the success¬ Best." In spite of the
fact that
development of cold rubber.' they have appreciated
76%
in
were

INDUSTRIAL STOCK INDEX

have

managers

the
the

discoveries

OVER-THE-COUNTER

the

dominant

and

ful

Both of these

N. Q. B.

ahead for the next 10
years should

1951 award for
ical

outstanding chemachievement given by

M

Cone Mills Common

Exchange

produce
vinyl
intermediate material

259

Robbins Mills

controls

into.

rubber.

BS

4-5000

5%

strong anti-defla¬

This

converted

acid

new

fully integrated. Of the
operating subsidiaries, the

next

be

Mass.

Teletype
IVOrth

Consumers Power

10

common

inflation

for
producing
ammonium
sulphate fertilizer.
Phillips is a
large producer of special
types of

facture

are

several

early

:

Telephone

earn¬

against

ammonium

will

than

approximately

and
Chemical activities

completed

7-0425

Y.

present

rubber, carbon black, solvents,

sulphur

N.

this

Harris, Uphum & Co., N. Y. City
Members New York Stock

be

•

reserves

indicated

sulphate,;
large sulphur plant designed to
recover 100 tons of
sulphur daily

orthodox

State St., Boston 9,
CA.

.

stock possesses all of the attributes
of an ideal investment. It offers
excellent protection

Scientific

will

request

company
is
less- than half its net

synthetic

gas

on

growth

yield

to

of

148
Tfcl.

RALPH A. ROTNEM

fibers, nitrogen

natural

stock

Information

<

dividend rate,
which should be increased in due

wide range of chemi¬
is
produced. Included are a;

sour

THERMO KING RY.

re¬

approximate $5.

A

is

for

record under the present
manage¬
ment speaks for itself.

reserves.

sulphur chemicals,

participa¬
Phillips
from
stock, which

industry

any

U. S. THERMO CONTROL

half

course.

a

base for synthetic

this

Financial

handed

Through its wholly-owned sub¬
sidiary,
the
Phillips
Chemical

nitrate, and

excellent

basis

first

called

common

selling for

prove

largest in the in¬

recent

down by the Federal
Power Com¬
mission freeing the
company from
its jurisdiction over
the sale of
natural gas, once it has
been con¬
firmed, would place the
company
in a position to
capitalize aggres¬

been

for

industry.
in

the

asset value in proven oil
and
for somewhat less

area

addi¬

tion is scheduled for

sums

A foremost choice for

tion

Kingsburg Cotton Oil

in

should

year

Thus,

newly

in

have

by the hydrocarbons.
also include
fertilizer plants witl>
research,
petroleum chemistry has become facilities for producing
anhydrous
a specialized branch of
the petro¬ ammonia, nitric acid, ammonium
marking

MARKET

Lucky Stores

Tel. EXbrook 2-7900

United

from

of

branch offices

our

J

demption November 13th, earnings
per share
of common stock for

con¬

tional oil to its refineries in
Texas,
Oklahoma, and Kansas. Comple¬

'to

ex¬

the

is under construction in
this
enable the movement of

Assuming

rate

which

primarily

to

at the

NY 1-1557

Birmingham, Ala.

Mobile, Ala.
Direct wires to

.

Sales

^

are

Spraberry

which

Exchange
Exc^nnpe

St., New York 4, N. Y.

of

times

line

.

of

one

industrial

bal¬

previ¬

a

estimated that by 1962 the figure
will be 50%. Petroleum chemicals

MEMBERS

25 Broad

New Orleans, La. -

lip's
management
received
the
signal honor of being selected by
Energy Commission to
operate a reactor project.
"

ously mentioned. A crude oil
pipe

an*

estimated

petroleum.

from

Members New York Stock
Members New York Curb

the

successful wells in this area
prob¬
ably has added to reserves

petro¬

country

are

continuation of the

a

Steiner, Rouse & Co!

of

the Atomic

as

Texas, believed to be one of the
biggest discoveries in the past 20
Completion of a number of

About 25% of all the chemicals

produced

debt

years.

it will
for at

chemical process or product.

present

1

United States nearly self-sufficient
in rubber. In
addition, the Phil¬

con¬

estate.

of

found

promises
long time to

probability
appreciably

slacken

least

Life Insurance Co. of Va.

STREET

holder

annual rate of ap¬

for

all

In

come.

No.

development of synthetic
rubber, which has made the

cents

published

within

Phillips

expansion

continue

to

Commonwealth Natural Gas

of

rate

last

District

HAnover 2-0700

in

working

(allowing for full

real

ducted

proximately 16,000 million pounds.

Camp Manufacturing

the

Operations

about $1,950

output is at

Bassett Furniture Industries

&

uable

Billard

and

output expanded to 10,500 million
pounds. Today, the total invest¬

Trading Interest In

soa OLIVE

Y.

$1,200

million

3

old—Q uoted

v-

Utility

this-year was up 15% over
convertible deben¬
tures), the resultant value for that of a year ago, with demand
Phillips common stock is approxi¬ .for most products, including avia¬
mately $100 per share. This does tion gasoline, motor fuels, carbon
not give consideration
black, and butadiene for synthetic
to the com¬
pany's extensive chemical
plants; rubber, at peak levels. Allowing
its refineries and
for full
conversion' of the out¬
transportation
facilities, pipe lines or other val¬ standing convertible debentures,

was

pounds.
5

in

sheet

ance

million

Exchange ■>;
Exchange

at

reserves

B o tight—S

can¬

version of the

while

about

Members

stated

industry

output

gas

per

—

Rotnem, Harris, UpCo., New York City.

County, Wash.—Robert
Tuller, Partner, Tuller, Crary
& Ferris, N. Y. City.
(Page 27)

barrel and

per

natural

lion,

mcdonnell &(b.

Stix

figure of 75 cents

Louisiana Securities

N.

arbitrary and conservative

ment/ in the
petro - chemical

(Lynchburg, Va.

an

—

Chelan

barrel. How¬

a

&

Companies

(Page 2)

ever, by valuing oil in the ground

was

BROADWAY, NEW YORK

$1

even

Alabama &

(common)

Research

A.

>

Public

country

today for

estimated, the
capital invest¬

-

Since 1917

LD 39

at

has

feet. It has been said that oil
be discovered in this

represen¬

Rights & Scrip

Tel. REctor

(this

not

some

In 1940, it is

Curb

barrels

ham

Natural gas reserves are
estimated at about 15 trillion
cubic

tation.

Stock

million

year,

estimated

were

1951

^

Ralph

year).

investor should have

every

York

reserves

Petroleum

Scientific

undoubtedly been increased
through new wells discovered this

standing growth industry in which

New

beginning of this

Thursday, October 25,

.

(Page 2)

*

Petroleum chemistry is an out¬

120

the

to

.

and

City.

intended

not

.

Selections

Gordon Y. Billard,
Partner, J. R.
Wiliiston & Co., New York

be, nor
sell the securities
discussed.)

oil

Members of New York Stock
Exchange

Teletype NY 1 -583

York

are

At

City

Ettablished 1920

New

to

BILLARD

Partner, J. R. Wiliiston & Co.,

Corporation
BArclay 7-5660

Phillips

security.

Eastern Utilities Assoc. Conv.

Broadway, New

Their

A continuous forum in
which, each week, a different group of experts
in the investment and
advisory field from all sections of the country
participate and give their reasons for favoring a particular

Rights

Interstate Power

120

This Week's
Forum Participants

Chronicle

page

27

National Quotation Bureau;
Incorporated

46 Front Street

New York 4, N. Y.

.Volume 174

Number 5058

.

The Commercial and Financial Chronicle

.

.

(1547)

Visible Factors in Business

INDEX

llfiHTOSTfin

^

Outlook for Next Five Years

Article» and New$

AND COMPANY1

Stock

Professor of Business Economics, Graduate School of

term business

-

combat

to

world-wide

contain

basic

inflation;

productive capacity

and

(4)

pace

■—Donald

My

particular

crystal

ball

is

barely worth looking into. It
sembles

I" know—it fails

set

times

The Gold

ularly when
home

runs

As. I

touchdowns

0

r

judged
past

by

performs

There

^2)

will
<,

much

as

and

years

be

✓

:t

like

were

able and accurate,

E.

and unmistak-

(5) A marked growth in

lation

Primary Trading Markets

11

Irredeemable Currency

vs.

'

Cinerama Inc.

12

___

Haile

Day

King Brothers

16

Sonneberg

NYSE Joins in Census of Stockholders

State! (Boxed)

a

L

Reeves

5

Byfield to Be NYSE Representative at UN Meeting in Paris__

To Such

Portsmouth

18

N. Y. Security Analysts to Meet on Nov. 8

I

19

r

Bankers

Incorporated

J

Association of America

going to

21

61

greater pressures for
higher levels of living both here

and abroad will require expand-

here trying to make this speech—

ing

at

ance.

.least

.

was

until

not

I

drastically improved

had

first

busy

real

making

estate,

a

I

were

to

blandishments

a

(6)

two

year or

your

The

the

to

such

any

perfesser"
would

fighting

address

spectful-like"

me

eccentric

be

recurrent

V

spend

is

years

Notice that

but

v

$55.5

far

in

June

reach

much

—Richard

Table

with

so

romantic

caution

in

the

30,

1953 -and

fiscal

and

alternative

hesitancy

0f

I
,

to

"guesstimate" the shape of things
come from necessarily incomplete analyses of what is feared,
or'at best' not clear* visibIe- As
*An

fore

address

the

by

1951

Professor

Retail

tional Association

of

Clinic

Retail

Kreps
of

the

a

Producer's
>

Southern

McEntire

•

,

-

to

add

are

have

M.

Heffernan

Role

Motion

in

to

eJtimlte

merit spending

Na-

Bank

W.

said to be

and

certain

on

of

McKinlay

..

—

1952

\

1954—

____

Expenditures

57.0

19.2

37.8

60.7

98.5

40.0

58.5

103.5

55.5

50.0

-

83.0

.

35.0

68.0

40.0

40

Exchange PL, ISP. Y. S

Teletype NY 1-1825 & NY 1-1826

18

15

—'

Reporter

on

May__

5

-—

-

28

—

:

41

Offerings

Securities

Securities

Air Products

43

^—

Governments

Security

Utility

.Railroad

t

-

Baker-Raulang

31

—

24

63.0

35.0

.

Securities

Salesman's

Securities

r

Now

;

The

Collins Radio

in

26

Corner

38

Registration

28.0

Tomorrow's Markets

on

the Economic

The

-

of

'

High Grade Public Utility and Industrial

'

*

U.

wit Tiaim

WILLIAM

Spencer Trask & Co.
-




Glens Falls

Members New York Curb Exchange

50 Congress Street, Boston 8
2-8200

*

1-5
-

Schenectady

Copyright

1951
•

Publishers
•

C.,

ary

25,

Hoving Corp.

Eng-

Stromberg-Carlson

by William B. Dana

Company

as.second-class matter Febru-

1942,

at

the

post

office

at

Whitin Machine

New

*H*. N- Y" unt'er the Act °f March «•

SEIBERT, Editor & Publisher

•

n

DANA SEIBERT, President

D.

Rir.r.s
RIGGS, Business

Manager
Manager

Thursday, October 25, 1951
Every

Chicago

CHRONICLE

Y.

E.

land' c/° Edwards & Smith<

and

Patent Office
COMPANY,

London,

Works

Suh8cripti„„ Rate,
WILLIAM

Teletype—NY

Gardens,

Drapers'

Reentered

DANA

B.

HERBERT D.

Hubbard

S.

1

Park Place, New York 7, N.
REctor 2-9570 to 9576

PREFERRED STOCKS

HAnover 2-4300

44

—

Weekly

COMMERCIAL

Reg.

WILLIAM
25

York Stock Exchange

Twice

FINANCIAL

;

.

25 Broad Street, New York 4 1

Di-Noc

34

Report.
Published

interested in offerings

5

:__s_

(Walter Whyte Says)__

Washington and Yon
Staff, Joint Committee

Dictograph

2

Security I Like Best

The State of Trade and Industry...

28.0

35.0

-

6

-

Reporter's Report

Public

48.0

45.0
35.0

28.0

Albany

MACKIE, Inc.

HA-2-0270

33.0

■

48.0

^

33.0

New

&

16

,

Notes

Prospective

Year

47.6

1956

Members

8

37

-

Our

Following

1955—

are

Singer, Bean

20

...

Our

.

Budget

i

We

•

22

NSTA

Administrative

i

SOURCE:

Reeves Soundcraft

25

44

Securities

News About Banks and Bankers

uO

Carry-over to
Available

—

Indications of Business Activity

TABLE I

Authority

58.5

1953—

I

Stocks

Insurance

Observations—A Wilfred

Total Funds

I
Cover

.1

j

9.4

_

and

(Editorial)

Mutual Funds

glvern-

37.8

—

11

From Washington Ahead of the News—Carlisle Bargeron

sSh

COTltlTltlCCl 071 JDCLQe

Net New

Years

Year

1951

of Oklahoma

Einzig—"Flexible Exchange Rates".'

v

Can

Brought Forward
J-

Sterling Oil

Industry—Carey Wilson__ 10

Dealer-Broker Investment Recommendations

in no Sense be
high. If anything, they

^

See It

Canadian

all

(Billions of Dollars)
From Prior

Picture

.Greater N. Y. Industries

9

Industry—Harry W. Strangman

Business Man's Bookshelf

like

umrtions

a

tLI

be

West End Chemical

by

f

Fiscal

8

i

•_

Regular Featuret
As We

Budget
Expenditures for Defense Department Military Functions Only -

-

7

Cinerama, Inc.

should

one

'ba_ed

baY® tli.

Authorizations, Total Funds Available, and
"

6

L

California's $200,000,000 Bargain

—Albert

year

stabilize

and

estimates,

Furnishers, Stanford, Cal., Oct. 22, 1951.
j

articles:

taper

level of $60 billion.

estimates

be-

Clothiers

billion,

These

hasten

to

»

$87.3

1956 to

probe

low

following

the

Economy

0ff gradually thereafter to a level

or

state
business the.P.refsent order
visibility in

includes

Present and Future of Aircraft

I.

peak of

a

B.

—Edward

now

less

Calif.,

Philadelphia and Los Angeles

<

Security Traders Associa-

Mutual Trust Funds—The Modern Investment

0f ^35 billion by June 30, 1956.
"I'm stuck", and .Total
government
expenditures
unfortunately you're "stuck" with may likewise reach a high in 1953

a

"Chronicle," devoted to the recent

?.

thus

military expenditures

billion

ending

Coronado,

Teletype NY 1-3370

Direct Wires

TWO

"Free Enterprise and IIow to Preserve It—Floyd B. Odium

military is
during the next

to

at

gentleman farmer.

However,

SECTION

IN

Capital for America's Expanding

'

the

shown

estimated

are

"kind-a-re-

what

tion

upheavals
.

estimate

of

five

name- as

philanthropist,

best

likely to

retired capitalist,

as

SECTION TWO of today's

will

available

program

economist

or

ARTICLES

perform-

Astronomical Military Spending

Chairman, he would not be calling
me

xhere

social
and
political
throughout the world.

or

succumb

of

business
=•

m

stocks,

common

commodities. And if

hence

killing"

of

;

Broadway, New York 6

BO 9-5133

MORE

Annual Convention of the National

the present

tax-burdened and inflation-gutted
state of my exchequer. I would be
too

levels

Soundcraft

J.F.Reilly&Co.

20

i

Steel

18

Joseph Johnson Nominated for President of Investment

pop li¬

Mines

Jessop Steel

arid

happen, I would surely not be up

ably revealed what

\

10

:

10

Spahr

E.

—Walter

continue to overhang and disturb
my crystal ball ' business markets.,

"

1

Economy Not Depression Proof—William A. McDonnell 15

—James

Of course, if

always completely depend-

YORK

WHitehall 4-6551

Ventures—Large and Small

Increased Production Alone Will Not Solve Economic Problem

tantalizing,.(4) Large increases in basic
un dependable
productive capacity and in the
wench.
•
- Pace of technological progress will

:

Telephone:

14

gov-

a

Theodore J. Kreps

NEW

*

8

13

Our

*.

...

bring

Tidings

too!

WALL STREET,

99

Importance of Distribution in the Securities Markets

large

v

..

7

._.

Changing Investment Policies of Mutual Savings Banks
—August Ihlefeld
J,
1

There will be a continuous
struSgle to combat and contain
world-wide inflation,

its

record

some

get Glad

Obsolete Securities Dept.

:____>

Fairless___"

Standard

ernmental deficits.'

1

a

in

cash

obsoletes,

You'll

6

What Have We Learned from Our Experience With Inflation?
Sumner H. Slichter__

less than $35 or $40 billion,

never

pic-

0

n

$70 billion

as

tures; and in
g

of

six

are

frightfully high—possibly

made);
i t
gives wavy,
blurred

there

'(1) Defense expenditures will be

being

are

it,

see

Charles Sawyer__

Uius-__H__

—Walter

greatest potential importance:

or

holding

us.

4

Longer Work Day Is Best Cure for Inflation—Roger W. Babson

Factors of Greatest Importance

(partic-

F.

uyuig o.

..

utterly at critical

c

and

to

Independent Universities—Essential to Private Enterprise

likely to happen, what items jut
out in the business landscape?

re-

inferior television

an

Kemmerer.

We Need New Business

what is

see

Maynard__

them

4

Cobleigh.______

Prominent Banker's Reply to Rep. Patman's Questionnaire
—John J. Rowe

Benjamin

strains forward to

one

L.

you're

3

Is the Cycle of War Bond Selling Completed?

War III in next five years.
r

L

Too Much Waste in Government—Hon.

of
technological progress; (5) marked growth in population;
and (6) recurrent social and political upheavals throughout
world. Sees no likelihood of depression like 1932, or World

>

If

:

A Constructive View of the Stock Market—Walter

large in¬

quicker

"GLAD TIDINGS"

Cover

:____

The Defense Does Not Rest—Ira U.

outlook:

and

in

Hooper

—Theodore J. Kreps

(1) frightfully high defense expendi¬
tures; (2) large government deficits; (3) continuous struggle
creases

O.

Visible Factors in Business Outlook for Next Five Years

six most important factors in long-

as

Holdings Should Not Be Disturbed!

—Lucien

Business, Stanford University

Professor Kreps lists

Page

Does Our Gold Policy Make Any Sense?—Philip Cortney__Cover

By THEODORE J. KREPS*

Worcester

Vertising

Thursday (general news and adissue) and every Monday (com-

plete statistical issue — market quotation
records, corporation news, bank clearings,
state and city news, etc.).
Other Offices:
135 South La Salle St.,
Chieaeo 3. 111.
(Telephone; STate 2-0613);

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Dominjcn

of

Union,
Canada,

$45.00 per year;
$48.0o

1

•

in United States,
U.
Territories and Members

Subscriptions
Possessions,

per

S.
of

in

Bought

—

Sold

—

Quoted

year.

Other Countries, $52.00 per year.

Other Publications
Bank and Quotation Record — Monthly,
$30.00 per year* (Foreign postage extra.)
Note—On account of the fluctuations in
the rate of exchange, remittances for foreign subscriptions and advertisements must
be

made

in New York funds.

THEODORE YOUNG & CO.
40

3

Exchange Place, New York 5, It. Y.

WHitehall 4-2250

Teletype NY 1-3230

4

(1548)

.

actively

in

batross, a two-engine amphibian,
and
the
Guardian for anti-sub

By IRA U. COBLEIGH

warfare. A terrific backlog of $620,

V

The Stock Market

million projects full company ac¬

Author of

tivity 1xk

years into the future.
Presuming $180 million of actual
delivery in 1951, earnings of above
$3 a share lie in the realm of the
probable. With an unbroken divi¬

"Expanding Your Income"

Giving

!

some

appraisal of appropriations for military hardware
and stressing the difficulty of

thwart Muscovite malice;

to

r

in defense
.1 *

i.

.

World

War

fiendish

I

brought
of

science

\'h'•"•■V."

to

the
the

warfare

tank, fighter aircraft, and poison

War

introduced

•

-

•

labyrinth of ; electronics
with astounding
accuracy,
even
from several miles up, and costing

rier, radar and

100-foot yacht.
With the Army, it's new tanks
of all sizes, new range finders,
rockets, new pieces of artillery,
and probably on the way, some
shells

strategic

bombing,
aircraft

the
car-

atom

bomb.
the

Thus

the

Maginot
Line, have
joined
the

long-bow, the

pult

in

our

Museum
Irau.Cobieigh

r

,

of

Destructive

atomic

more

battlewagons,
aircraft carriers, with planes to
match, helicopters, and newest of
all,
atom
powered
submarines,
And all of these must be as new

government till July 1, 1952-the
largest
financial
allocation
for

spending taxpayer

in

money

our

fabulous

history; and, of course,
biggest slice of this wampum
(only six years after the end of

the

differently, and means different
things, depending on your viewpoint.
.

tv.

4a

a

■

n

idea

the

to

hardware

the

that

his

of

unit

Army

-I

will

receive

*
than the roughly 1/ of de%
funds allocated to it since

more

fense

for

volves

at

void

A

in

if

our

52

"unification" of the Armed Forces

types

picture

the

of

three

analysis

been

prospective

cur

Consider,

enemy.

too,

all

production

of

warfare,

but

the

ment

Electric

ponder

head

Boat.

for

a

this

start

Nuclear

gives

someday* propel the ships at

may,

sea, trains, planes and cars—and
Electric Boat will pioneer. Apart
from its other outlooks, which are
,

excellent,

the

^

,

future

f

,

the

indicated

dividends

S°
1S tbat we can never, in
tbe foreseeable immediate future,
Slt ^a^c auMi-say:^
wevf
sPei}t $.150 billion in training and
equipping a modern armed force.

provide present

we may need
fua4.

for

a7eVer
Thu^

No,

more

modS-n^

principal

as

whole

a

tilted

now

reason

tilt is the

earn¬

downward.
for
this

high rate of

income taxation, and therefore

Corporate

Taxes

The points that investors should

]^eep jn mind with regard to
te taxes
.

x

cor-

,

,

It should

Hppnlv

vprv

pvpn

in the kind of market weVe

to

in

defense

(b) Income taxes

.

science

is

were

40

some

panies offering themselves

is

^ tbat.

^

11

do'hot

reached—thev

nofnt

liquida-

if

the

;

armament

liquidated, it
accomplished under condi-

we

have become accustomed in recent
years.

/■

Finally, the experiences of in¬
in
the
years
since the
great depression of 1932 are such
vestors

to

as

furnish

profound

is

contribute

ample grounds

confidence

in;

our

for
na¬

tional ability to overcome all ob¬

and
of

in

the

long

range

stocks

common

—

in-

as

vestments.

For
.

4.

•

these reasons,
although
familiar economic and marj•

+

®

adverSe

*

x c

eTs^

seems

U

pessimism

S'bl^^d
policy that

likely to work

out the best at this juncture is to

minimize risks by avoiding issues

LShlr that

hriak-even

com-

as pro-

are now an

hSfrnm nthPrS

Pia-

Helicopter Corporation. Back

1947 there

which

most onerous form of taxation,
is toexp.re by limitation.

impressive contributor

defensive

our

secki

fluid

tax,

been'the

Piasecki Helicopter Corp.
Another

profits

similar

in the past/

ings ratios than those to which

lowered

excess

than
been

make for greater public
confidence and higher price-earn¬

value

,

^a} Taxes can be lowered. They
the

above,

should

^Yhen deflation threatened, and

snhmprffp

factor, combined with

Moreover,

stacles,

are.

_

that

a

taxes may be worthwhile,
About

under-

tions of diminished international
tension, and this factor by itself

brief review of certain factors af-

Tenets

have

will be
<

of

were

nnt

we can't
a

f

and

and

assumption

boom is in fact to be

and

recent levels around 24.

•

mUet bp

our_

are

downward

of

having!

sav

ings
The

$2
for your

reasons

the

consideration of Electric Boat at

fully prepared. Now,

we are

for stocks

course

earnings fecting

Current backlog of $200
million,
annual earnings of around $3 and
1951

Maynard

ings,

Electric Boat.

doar Prlze, Ju,st thls week-

■

Walter

from atomic research suggest new
horizons of investment worth for

bunks of this earth s geography
w? ar® n°w dedicated to defend—with Suez thrown in as a sort of

:v'

prospective
,

known
the

marketwise
tions

Of the value of

mo¬

energy

prime

current

Keyne¬

the value factors discussed

determinant

the

housing
a

should make the liquidation of the
various booms much less painful

psychology.

is

and

quence, this

of

investor

stocks

of
on

be use(j |s generally accepted and agreed to. As a conse¬

itself, and the

A

subsidy

widely

stood,
^ey

market

state

the

sian scale.

now

.

vital

a

;

The existence of these powers is

ply-demand
relationships
the

yields.

schemes and deficits

sup¬

in

Advocates

cheap
money,
lower
heavy public works pro¬

grams,

actual

stocks,

country's only private

for

taxes,

of

of

Boat

in¬

separate

the

—

,

including

value

first atom-powered sub. Not only
will this revolutionize tuna-level

serves

the

Co.

Boat

years

have

of

market

stock

booms.

armament

issues with prospective sustained

on

discussion

least

v

weapons

old, this

Electric

wasn't around.
outfit is

defense

our

exist

would

tric

military

best

a11 we need to do is store our
Ih l Planes and our subs, our tanks
substantial and 0Ur carriers' aSainst the daV

and

outlook

Electric Boat Co.

S°c£S nl

l

orderly

23.

around

Now

World War II) is for defense! Well
defense is a Protean word. It looks

An

adjunct to our Navy in the past,
but they now appear to have en¬

cause (mother $5 billion has been

has

pear

Submarines

allocated to aircraft, does not
J*1®?11 *ba*
are immediately
better prepared to cope with an

Congress

concentration

tomorrow's sunrise,
tered a new and dynamic
phase;
This then, is the defense gear
for which we appropriate; with for on Aug. 21 the N a v y an¬
nounced a contract award to Elec¬
top brass, in each division, devoted

con-

82nd

tax

solid qualities,
industrials, ap¬
in Grumman, particularly at

Keynesian

submarines, and its
subsidiary, Canadair Limited, is
Canada's largest producer of air¬
craft, turning out the ''Sabre" jet
for the Royal Canadian Air Force,

defense,

eluded its labors, and appropriated
some $90 billion for running our

The

liquidation of capital goods and

maximum

69%

some

Exchange

situation, and the government's
of inflation to overcome later

after

builder

warheads,

vital defense needs,
Well the simple fact of the matturn, to a
ter is that we're having a tough
bombs, military super jets, and time
converting
appropriated
guided missiles, with their satanic money into all these things at
talent for maximizing mayhem,
the production level; and just beour

Art; and, in
enlightened days, we
mad future of hydrogen

of

constructive offsets in the tax
retention of

a

Y. Stock

against excessive pessimism, citing certain

warns

with possible 1952 earnings,

a

as

ram,
cata-

the

with

tation

meter gun and

and

as

The Navy, too, has its interpre-

75-milli-

battering

much

going back to 1933,
$2 dividends this

Maynard

not found in many

>

minute

as

Mr.

probable

bite, of $4,

•"

•

Shearson, Hammill & Co., Members N.
:v

even

the

World

gas;

II

•"

By WALTER MAYNARD

year;

as

-y,-V" '?y\,

•_

record

and

Grumman Aircraft, Electric Boat
Co. and Piasecki Helicopter Corp.

research, such

I;
\

dend

putting defense on the assembly line, without stockpiling
obsolescence. Plus an outline of certain companies impressive

;

Thursday, October 25, 1951,

.

A Constructive View of

The Defense Does Not Rest

<

.

.

Al¬

the

plus

Korea;

The Commercial and Financial Chronicle

really

are

high-priced

in

terms of Price-earnings ratios and
to concentrate

on

the

issues

many

pAace„Actual!J;.150,wings is ducers can, wUh greatoTlad?; byTe
blahrtTnrtodSa7theWtop to losses as do other cost elements, now available which afford good
sincle wine^nnt
fonthaU t^rmt than m0st other seSments oi our three are. Bell,
Sikorsky (United
(c) Corollaries of this reasoning assurance of sustained satisfactory
eauals 20 tn
^ economy, predict that they will Aircraft) and Piasecki.
are that earnings are of better yields.

a

a

nendl

tvnl^
^moment we™

on

At

men.

q nno

qutte

always from either the planes

or

the men—-partly because aeronau-

"tics

becomes more complicated
costly with each passing day.
For instance, the ace
fighter of
World War II, the P51
Mustang,
and

was

reported to have cost roughly
$55,000.
Its
successor,
the
jet

driven F86,
handsomely outfitted
with every new electronic
device
to
combat
the
enemy
and
the

weather,
seven

about

weighs

50%
more,
is
powerful and costs
times as much. Nor is

times
10

as

this the last word.
Brilliant scientists and engineers
are, at " this

be operating at virtual

capacity

The

ceive

powerful

a

enemv

on

tary

the

ourdefense?snever^on?
fave to be thSe "fS' S

the latest

m

well

as

'The

mLw

highly enterprising unit, the
helicopter opens up new vistas of
military mobility such as: (1)

"

L
i
as the mostest.
Thus it is, too, that investors, in
defending their incomes against
inflatl°n, are likely to consider

Rapid

_

And

withdrawal

or

the defense
(parachuters have no method
cffering a field for sustained of return); (3) Spotting submagrowth,- expanding earnings, and rines; and (4) Picking up pilots
fair dividend treatment. Accord- at sea unable otherwise to return
ingly» I am outlining today two to carriers (destroyers used to

v.;;Grumman

ed

do

this

far

with

efficiency and

greater

cost)
In the last two
years

military

First is Grumman Aircraft En-

1

Expanding Your Income
No

mumbo-jumbo but

a

shares, split 2 for
May of this year (and now

in

an

on

request

/

simple,

common-

.

/

Naturally,

thor, a successful investor and a successful
business man, picks
up where he left off in
"How to Make
a
Killing in Wall Street
and Keep It."
He explains the know-how

ln

for

guide to

BUTLER, M0SER &
44 Wall

NY^iaSI
INT

1-1862

CO.

while it
ad

St., New York 5, N. Y.

BOwling Green
9-0040




to

wise

investing for income
To

investment, which

from

Park

this

entertains

informs, send two dollars

Dept.

and

this

6.

David McKay
225

profit

Avenue,

New

to

Co., Inc.
17,

N.

only

in

vast

our
a

war.

arsenal

a

is

•HWWWHHWWHWWWW

and

pray -

to

employ

expanding

arsenal

on

War

indeed

III.
our

But
best

this

hope

leading
in research and
production, such
as
I have
outlined, give further
proof that development by private
create and sustain

enterprises that best

continuance
The

can

of

CAROLINA

few

MUNICIPAL BONDS

danger point.

:1

'

F. W.

Supply-demand relationships in
the

stocl£

CRAIGIE&CO.

also tilted in

are

selling with remarkable uni-

are

a

{market

unfavdrable direction—insiders

RICHMOND, VIRGINIA
'

Bell System Teletype:

directly and indirectly,

RH 83 & 84

Telephone 3-9137

Sn^aduf increased,
increased
being ^adity
via

flood of convertible issues. De¬
for

stocks

despite

record

peactime public savings, remains
barely steady. This is because of
the

5 MINUTES

FROM WALL ST.

large amount of debt which

has been incurred by the public in
the last five years, most of which

offers foremost

contains

facilities for

self-liquidating

S10ns-

\

N. Y.'s

provi-

:

our

1B°°ms

•

peace, and companies

those
Y.

hope

we

and

World

a

yields at the low levels
whichjn the past has proved to be

largest Hotel
-

;

banquets

of Two

Dnnme

or

be called

mvestment
York

Moreover,

NORTH and SOUTH

groups are

m

never

growth.

14V2),

interesting and fascinat-

future in peace

way
to add dollars
td an
income,
pre-shrunk by taxes and inflation. The au¬

capital

term.

Specialists in

VIRGINIA—WEST VIRGINIA

reported

earnings,
and
thus are relatively secure,
This is an important fact to consider, particularly for the longer

a

sense

and

at

to

i^rul^i.0n in \field
"?tf-Liquidation
Coming I°
nautics, with
quite predictable

and the know-when of

Memo

relation

mand

offer

Mfg.

in

®t0+^ 1?

and its common

Since 1932

Dividends, another major deterof
value, are also low

minant

ap-

HUP, a sixNavy utility helicopter in
production, and its 40-passenger
Air Force XH16
being developed,
has now a $100 million
backlog;

are now

low.

place

Aircraft

By IRA U. COBLEIGH

be, and break-even points

propriations for helicopters alone
have increased
by over $400 million. Piasecki with its

gineering Corp. Made the famous
Hellcats and Avengers in World
War II; and now produces the
F9F-2 and F9F-3 Panthers used

Collins Radio

Quality than they otherwise would

an

less

WHHHHHHUHWHHWW quoted over-the-counter

Texas Engin. &

of

and supplies in
volume;
(2) Prompt withdrawal of wound-

companies in
production effort as

it is with bombers and

so

landing

troops

the most Progressive

::

pOmbsights—ever new designs and
•higher costs. The famous Norden
/sight, costing around $2,500 in
4944, has been outdated by a new

ro-

and

companies with brilliant backgrounds of success in technology
moment,
working
overtime
to and Production, plus
a third,
a
create advanced frames
and en- newcomer,
that fills a special
gines, which will make the
F86, niche in our aviation picture.

,in.,its turn, obsolete.

of tandem

wings

making possible far
greater carrying capacity. As developed by this relatively new

horizon
We

big point favoring Piasecki

is its development

J^vteU Tiong I" wfpTr*

way

assure

of

life.

defense, indeed, does not rest,

.

.

.

^

Taking a longer view of the
situation, it is evident that in the
next two or three
the

capital

boom

of

war)

all-out

liquidated.

However,

have

to

when

7th

this

small
Ave.

groups! Clark St. sta.
IRT

subway in hotel.

Telephone MAin 4-5000.
'

begins

to

produce

degree

of

unemploy-

^

a

,

men*' the government

can be exPected to intervene with its full
of

or

be

significant

arsenal

Outstanding values-for large

(in the absence
will

liquidation
±.

office parties

years> not only
boom, but the

goods

armament

meetings

inflationary

weapons,

HOTEL

st.George
Clark St.

Brooklyn, N. Y.

Bing & Bing, Inc., Management

;

.5

(1549)
Number 5058

Volume 174

.

.

.

The Commercial and Financial Chronicle

Security Analysts
Meeting on Nov. 8

Steel Production

The

Electric Output

•

•

•

Carloadings
Retail

State of Trade

Commodity Price Index
Food
f

and Industry

Price

By A. WILFRED MAY

Index

Business Failures

"How's-the-Market?" Fantasy

over-all

much

held

production

chasing after the exceptionally broad decline 7
with nonsensical hindsight "explanations" and with reversals of

speculative

previous

the

above

of
<

the

appreciably as

tinued to expand.
week

Last

market.

<•'

an appreciable number of
categorization impracticable, •
but also in any event it is only useful in de¬
scribing past and present performance.
The
failure to distinguish fully between hindsight "<
and foresight in the picturing (with or without
fancy charting)
of a trend constitutes anerroneous
basic premise underlying most of "

entire industry.

industry, the defense program
nearing its point of greatest impact on the economy, according
"The Iron Age," national metalworking weekly.
Actual output
With

respect

the steel

to

is
to
of;

popular
misconception

the

full stride until the latter
part of next year.
But, because of lead time necessary for both
material and parts, the steel take for defense will be very high in
the first quarter of 1952 and will probably reach its peak about
mid-year.
After that, it is expected to level off for a time—then
military goods isn't expected to hit its

venerated
A. Wilfred May

the Controlled
alter their product mix.
Some steel items which were in tightest supply before Korea are
now relatively easier.
On many other items the reverse is true.

as

a

Such

gadgeting.

encompasses the
as well as the more

trend

Theory

in the market

demolished by the long-continuing
■•! ■-!;
;; .!
Divergence Between Industry Groups

unit, is completely

' /;■:•

Materials Plan steel people have had to

record.

strip were
about the tightest items in the steel market.
During the previous
five years such
light gage flat-rolled products accounted for
roughly one-third of total finished steel output. ' Principal con¬
sumers
were consumer durable goods industries including autos

n

actual

sistently ruled over both the

V1

For example,

going pegging.

'

•

.

•

■

Actually, it's all part of the plan—to produce less thin flatrolled products and more plates, shapes and bars.
Much of the
needed expansion in plate output is being obtained by assigning

hot-strip mills. Space is made
sheets and strip.

light plate orders to continuous
available by curbing demand for

in U. S.

month

leading to steel wage negotiations
publication asserts. During the past
wildcat strikes have hit production in four important steel-

Over the

underway, this trade

Youngstown,

districts—Pittsburgh,

producing

Chicago

and

the

view of past experience.
Steel labor's wage campaign will officially open Nov. 14, when
their 33-man International Executive Board will meet at Atlantic
City. They will outline and recommend formal contract demands.
These will be passed on by the union's 163-member International
Wage Policy Committee meeting at the same place Nov. 15 and 16.
The negotiators will pick it up from there.
-v I
In Washington, Office of Price Stabilization officials are racing
to complete a list of tailored price controls on steel mill products
before wage negotiations get in full swing. : Chances are they will
lose the race.
The outlook is that premium-priced producers will
still be allowed to charge more than the bulk of the industry.
Steel producers are

still selling their products

brightest spots in the

of the

increase in steel wages will blow

any

*■

Auto

output last week fell less

,

Issues !

r

:

bullish 12-month period
resulting in a 17.%.% net rise in the Dow Jones Industrial Average,,
347 of 1,235 active listed issues examined nevertheless registered
declines, with 22- ending

unchanged.

During the first half of

vanced, 422 declined

During the 25%

this year, of the 1,235 issues,

769 ad¬

and 44 were unchanged.

rise■■•'since the top of the

1946 market scored

Industrial Average, net declines have occurred
popular issues: Air Reduction (50%), American Tobacco

by the Dow Jones
in many

(30%), International
(Sears

But

•

•

.

has
*'

'

advanced
*

(27%),
(65%),

Telephone (50%), Montgomery Ward
by 20%), Twentieth Century Fox
1

.

Continued

1

on page

15

.
*

than 1% below the previous

Source: Standard

and Poor's Indexes

of the Security Markets.

Reports."

week, states "Ward's Automotive
Buick production declined the

past week when materials

short¬

and adjustments to October's output schedule cut 40% off
output on Monday, this agency reported. "Nash was shut down J
completely on Wednesday; a week ago, because of supplier strikes, *
but resumed operations of all but its Rambler series assembly the'
ages

!

following day.
Ford

tailed

and

last

„

-

V

....

according

week,

to

halted for the second successive
tion
Ford

.

'

Mercury output at the Rouge

plant was "also cur¬
production was

"Ward's," when

Investment Bankers

Friday for alterations in produc¬

equipment. Labor trouble at its Kansas City factory also hit
car
production last Thursday.
Resumption of assemblies

by Packard, down since Sept. 25 for inventory and equipment
rearrangement, helped to offset the industry's setbacks the past
week, "Ward's"

!;i "v'L"...;v,■.v- "

noted.'

!
s

"' '/ *

-

Many car manufacturers are threatened with severe produc¬
tion curtailments because of the continuing strike at Borg-Warner,
their

sole

agency
On

supplier

added.

•

of

some

critical

components, the

statistical

/V

.

Monday of this week the securities market experienced the
last year. Stocks underwent a steady

worst break since Dec. 4, of

in early trading following broad declines in the
A wave of heavy selling later developed which
flooded the market and caused the tape to run seven minutes
behind floor transactions.

drop

in prices

previous week.

In the afternoon some stocks

lows

on a

recovered somewhat from

their

lighter volume of sales.




DALLAS

★

TEXAS

it

on

page

34

>'

"W.sa't.ti
i

V

fj

t ~

Md n

*,, t f

Commodity futures were also under pressure, affected by
weakness in securities and uncertainties in the international situa-

Continued

Chairman of the
committee.
--Li

will open at 10:30
by a dinner
at which the speakers will be M. S.
Szymczak, member of the Board
of Governors of the Federal Re¬
serve
System, and Courtney j C.
Brown,
economist of Standard
Oil Company of New Jersey.
The program

a.m.

and be climaxed

East

400

N.

57th

J

.

Street,

New York,

Y.

their 1935-39 prewar average:;

the face of the

During last year, in

off the price lid, this trade

authority concludes.

it was announced by
Jenks, President, and

Correction

„

...

the part
Ohio correspondents,

Due to inadvertence on
of

one

it

was

of

our

indicated in the

Chronicle"

under a "volun¬

price-control picture so far.

Society of Se¬

Sidney B. Lurie,
program

416 issues have risen

Divergence Between

tary" agreement not to raise prices without giving the government
advance notice.
Even controls officials admit that this has been
one

longer period since

87%; distillers have
gained 504%, bituminous coal 465%, tires 450%, while on the
other hand seven other groups show net declines.

but rather are to be expected, in

mon,

Packaged

4%, in tobaccos by 2%.

unchanged from their 1949 lows.

the composite

While

workers are not uncom¬

Such tactics on the part of steel

South.

between

gold mining issues by

foods remain

The "softening-up" process
is well

York

Analysts
will hold an
Eastern Regional Conference in
New York City Nov. 8 at the Hotel

'

"The Iron

brokers is

_

4

New

curity

the various industry groups has con-J
long and short terms.
During the single week ended Oct. 17, while the Standard
The program'this year is aimed
and Poor's Combined
Index of 416 stocks was advancing by
primarily at frontier industries
0.3%; 27 of the individual industry groups also advanced (up to,., that are based on new scientific
4.4% for the crude oil producers), but 43 were simultaneously
discoveries. Electronics, synthetic
declining (with a 3.8% loss for the coal stocks), the canned food
fibers, servo-mechanisms, atomic
issues hitting a new low for this entire bull year.* ,
-V energy and new metals are among
the subjects to be discussed at
Between the low average point of 1949 and last week, while;
the forum sessions which continue
the composite group was advancing 70%
net, the component
throughout the day.
utility issues rose by only 22%, apparel by only 18%, the 5c-to-$l
chainstores by but 8%.
Information
and
reservations
Simultaneously there have actually been
declines in tne soft drink issu'es by 14%, in the sugars by 16%,
are being handled by Helen Slade,

production cutbacks have so throttled their demand,
Age," that sheet tonnage offered by conversion

Now

,

Divergence

before Korea cold-rolled sheets and

and appliances.

states

-

The

C. C. Brown

Szymczak

Jeremy C.

uniformity of stock price action '

of future price changes

M. S.

Statler,

theory,

sufficient to take advantage

the defense program and

about

Dow

that there is

The assumption

"technical"

geometric "evidence" embodied in 1
sun-spots and stellar radiation.;,

involved

cycle

slowly decline.
To meet the needs of

to

issues make such

steel ingots and castings.

102.9% and equivalent to 2,057,000 tons of

is theoretically possible to categorize
But not only does divergence

extends

which

of a.

point, above the capacity rate of the previous week.
The current week the rate is scheduled to show a rise of 0.8 of a point to
for the

it

tion,

majority

in the same direc¬

their behavior.

*

production advanced to 102.1%, or 0.3

steel

■

traded stocks move

of the

claims for unemployment '•
manufacturers' payrolls con¬

front initial

employment

declined

insurance

picturing

Concededly, so long as even a bare

of World War II.

On

highlights the persistent fallacy
a
capturable trend of "the"

strongly

position,

.

peak production levels

year's levels, it failed to come up to the

price movements, with the

past week's turbulent stock

financial community

past week saw a steady rise take place in

While

York.

STOCK MARKET BREAK

THE

total industrial
in most heavy industries as manufacturers increased their
to meet the challenge of growing defense requirements..

efforts

Regional Con¬

ference in New

And the

output

address Eastern

to

Auto Production

The
The

Szymczak and C. C. Brown

M. S.

Trade

liam

A.

sociated

of

Oct.

Fennell
with

Hayden,

Co. of Cleveland.
have

shown

"Financial

11 that Wil¬
become as¬

had

Miller

&

The item should

that

Donald

W.

Graber, formerly with Otis & Co.,
had joined the staff of Hayden,
Miller &

Co.

.

6

(1550)

The'Commercial and Financial Chronicle

one

Too Much Waste in Government
.'7

•'

'•

'■ "*

:

'

>■"'

7

.

;

Blames Congressmen for

commissions.

with

Says

sole

department

no

function
limits

on

away

unnec¬

We hear continually of the need

discussed,
in

and

If appropriations

calendar

the

of

halls

of

rejected

eight.

Con¬

the

costs

difficult
tive

The great trouble with most

re¬

government

ports

should be cut.

(and

this

many

subjects) is that the reports

As

theoreti¬

a

cal

objective,
i

everyone

for

it.

s

Prob¬

lems

become

difficult

as

way

•

The

to

cut

costs is to cut.

There

is

a

theory that by

Charles Sawyer

so

-

called

"stream'ii

v

n

-

ing" of government activities and
reshuffling
of
functions,
great
savings can be accomplished. This
theory is attractive, but is; it
sound?

Some
savings can be
by "streamlining" — great
require a different treatment;

made
ones

Fundamentally I
no
large saving
funds

—

of

of government
taxpayers' money —
eliminating
things

the

except

conceive

can

by

which the government does.
Large
be
made
in
the

savings must
places where

we

are

making

large expenditures.
this matter

a

completely realistic and
objective standpoint. That being
so,

must

we

are

recognize

with

dealing

an

that

we

extremely

difficult

true

of

reports

on

other

fellow—few favor
it strikes home.

Many reports
Teform

of

it

when

efficiency and

on

procedure
"have been produced. The most re¬
cent and
outstanding and

helpful

of these

known

are

as

the Hoover

Commission Reports, the result of
long and serious study by com¬
petent and experienced men. The
President
tious

has

effort

made

a

conscien¬

to

carry
out
the
recommendations of these reports

by

35

Plans

so-called
which

submitted

these,

the

to

he

Reorganization
has

periodically

the

Congress.
Of
Congress has adopted

*An address
by Secretary Sawyer at
Luncheon Meeting of
Eighth Annual Ad¬
and
Sales
Promotion Confer¬
ence,
Ohio
State
University,
Colum¬
bus, O., Oct. 19, 1951.

bureau

one

I

in

a

am

reorganization.
What

is

into

is

to

put

the

but

effect;

is

accomplish
and

bear

little

of

Budget

connection

submitted

operations -and

and

to

charts

and

more

the use of
manpower, the occupying of
recommendation that

study

be

made

commission

that

or

1

a

new

be

appointed to take
over the problem which has
been
discussed.

who

make them

enthusiastic

so

Carlisle

the:

was

Bargeron.

check, that nothing

than has.

The New

Dealers

will

could

more

tell

differ¬

you

In their

As just one

example, they

were

determined to take

the

over

had it not been for him.
>

on

men

'
"
apparent

; ■

be

not

may

happened

this.

It wasn't

is that he

these, requests —first,

honestly

are

no one, in my
such responsi¬

country's entire credit system. They would have done so, I
believe,

cut

because the

his

We still have, at least, the framework of the
government which
forefathers gave us. You can credit Jesse Jones for much of

our

more

times

7

he, just operating

had

than

more

Roosevelt

himself.

But the fact

course.

during those turbulent

Indeed*

confidence of the legislative body within

about-

of

as one man,

the confidence of Congress

a

Roosevelt

lost

the

short time after

very

the activities in which
he came into office. He
they are
kept power over it as he did over the
engaged; and second, because the.State Governors through the unlimited
funds which he had to
suggestion
is
continually made
spend, but he soon lost its confidence.
that in other agencies and in other.
,

,

savings

studies—but

more

kind

of action

said

at

plish

the

action.

savings

forced to cut

What

is required?

beginning, to

great

certain

we need—not

down

functions

accom¬

will

we
or

As I
be

get rid of
being per¬

now

With such
action; and in
with any specific suggestion

along this line, there will arise

a

of

protest and anger from
every affected individual or
group
throughout the country,
There are,

however,

some prac¬

tical steps which could
short of the drastic one
and

the

forth
any

ideas

have

I

been

am

be taken

J suggest;

about

based

to

not

commission study but

set

upon

on

ob¬

departments

the

to

urge

econo¬

Jesse

equally present.
The
Congress has been fine in giving

credit

to

my

endeavor
that

to

Department

economize,

for

him

its

priated,

and

with

up

from

if

possible

surplus.

a

its

estimates

(of expend¬
itures for the
coming year. This
"year" is

gins

on

a

fiscal year

July 1.

quests must be

which be¬

Appropriation re¬
developed at least

to

The

Jesse maintained his position
through his

come

head a poor adminis¬
Instead of being' rewarded

agency

trator.
for

his

in

success

fears that he will be
reduced

tion

that

year.

for

the

This has gone

toward

of

the

close

of

so

or

Such manipulation

was

a

and

of

matter

you

to be

provided for
increased

minimum

a

power

for the

Encountering opposition in Congress, they would

aren't."
a

was

took the grounds for

If Jesse had

"you

either

are

the team

on

taken the stand that he wasn't

ever

on

part of the Administration, he would have had to get

.

efforts—and I

use

out.

tic" advisedly-—at the close of the
fiscal year represent
expenditures;
which could be avoided. The rem-

for

this

disturbing situation
<

I have stated

k

repeatedly^ to
bureau heads that I will not

th

the Department of Com>,
for the past fiscal
year was *
saved.
These funds will be re¬

has been

one around here with

He

case

and

Treasury

as

required

mind that he

He

either the

turned

them

was

largely responsible for what¬
I would hold him

But he accomplished much

pressures.

back innumerable

against Private Enterprise

or

times

what has become

ridicule; the American Way of Life.
-

in
a

their assaults

term of

department

others, there

as

are agency

well

the

on

page

source

most
-

time.
a

;

Pur¬

of such "scandals''

as

As

long

its

A bottle of

Pull

I try to remember

whiskey

it exists it will be

have recently been exposed.

present-day operations.

anybody else.

it down.

as

or a box of

pull

and

and

It is

inseparable

are

influence

are

mighty

any

time, in dealing with

my

banker at Christmas

cigars won't in itself get

me

loan but it will keep my
many other good points in the banker's

mind.

-

Jesse Jones presided
•

certain.

handy assets in dealing with bankers at

as

35

that it has served its

says

political lending agency and influence

from
.

In the Civil Aeronautics

Continued

himself,

from getting anywhere towards closing

a

heads who

Mr. Jones,

*

lot with the idea of getting

a

It has too many influential clients, however, to
prevent Con¬

One thing is sure and

honest and effective efforts

in saving.

Since he left, Congress has toyed

Leftist

\

gress

publications, which last item,
incidentally, amounted to $1,009,-

my

'

pose.

those from the sale of documents

Savings can be made, of course,
by improvements in management.

or

nerve

pain in their necks and there

if he accomplished 110 more than adding to their

hairs and their blood

rid of the RFC.

of all unexpended bal¬
other receipts such as

some¬

a

was

salvaged from their depredations.

in high esteem

and

make

only

to

merce

In

doubt in my

no

ever

gray

.

the

was

ability to outwit them.

more.

$6,220,000 of the funds avail-

their legislation for them, except that

another the power would land up with him and he
usually

Jesse Jones

is

lies partly with the administrative
heads and partly with the Con-

able

or

put quietly on the shelf. In all of the scheming of the New
Dealers,
,

'4

edy

So he would get

how

the word "fran¬

Savings From Improved
Management

STREET, NEW YORK 5, N. Y.

usually found that the spending

from the New Dealers

Maybe it

Dealers.

the team,

request

INCORPORATED

away

spending.

was

control.

seek Jesse's influence in the mood of

f.

810.50 for the current
year.

Gearhart, Kinnard & Otis

under his

N.ew

the

extraordinary efforts are made to
discover ways of spending it.
It is obvious that these frantic

ances

on

enacted it

was

done

he-'?/'
penalized by t agitation

economy

appropriations

following

in the

Copies of Offering Circular

or

was

.

the

turned to the

Price $1.00 per Share

ability to "give"

necessary and when the price

not too

of

Common Stock

run

great. Time after time he succeeded in getteng legislation
if he shows a
surplus he gives
Congress the impression that the r through Congress for them when they could not get.it themselves.
original request Was excessive and ' These matters
usually concerned spending and when the legisla¬

action, the amount

Gearko Incorporated

because of the'confidence

confidence, in fact, that made

they would have liked nothing better than to

answer;; bend towards this crowd when

tolerate any such practice.* As the
result of my

200,000 Shares

this

was

operating official is that

an

fiscal year if a surplus in
any particular account is found to
exist,

Each department of the
govern¬
required to submit period¬

It

power

have suggested that
him out of town. It is a
seeming paradox that he was their great¬
a particular effort be made
to op-- ^
est enemy and at the same time
erate within the amounts
utterly essential to them.
appro¬

myself.
My first suggestion y.s
perhaps impossible of fulfillment,

ment is

counter

a

indispensable to the New Dealers when they so
thoroughly

I

reason

far

.

was

Congress had.in him.

for;., despised him

and

servation of what
goes on in gov¬
ernment as I have lived with
it

but here it is;

Jones

mize is not

my




';■/

more

further

a

to

confined

not

their frustration.

fig-'

down

the

book, in the book of this motley crowd of Commies,
left-wingers, pinkoes and whatnot, Jesse Jones is anathema. He

was

each activity."
Strength of character is needed to * v

In many cases it results in

space;
a

money,

ap¬

which he maintained over the revolu¬
tionaries that swarmed into Washington and took over
the govern¬
ment. In view of what has
happened you may likely question this
statement and say there was no

ently.

expend- ;■

regrouping of functions, will
carefully
scrutinized.
The department head who is debring about great savings.
I
sirous
of
might interpolate
that
the
promoting, economy,
drafting of studies and programs questions his agency subordinates
is a Washington
as
to the amounts of
obsession, which
money re- '•
of

is

see.

have

the

are

quested to carry

an

on

check

•

not

itself calls for the expenditure

It is
were

had the responsibility and the power

ever

What

itures of the department are
;outlined in great detail.
These
ures

in

to

'

satisfied

probable

who

us

bility and power more wisely and efficiently.
But this is all on the record for the historians

J.

Making

with

of

opinion, could have exercised

budget;
by each department, the

dream

a

relation

reality, full of graphs

In

result.

major

a

Studies which deal with
world

NEW ISSUE

October 23, 1931

has

the vast number of ap¬

Defects

rendered.

man

that those

this banker-statesman had, and

depart¬

am

',f

you

getting the wheels of industry to turn¬
ing again. Except for the President" no one

80 separate

as

'

•

work in

of

step in the right direction. >.-• 1

a

be¬

yond this is the need to recognize
that reorganization in itself will
not

many

propriations, which I

-

needed

suggestions

as

an

have long had.
This appreciation

a particular
informed that '

Federal

'*

■

scene

identified with

gress.

45 NASSAU

preciation

necessity for hearing each of¬

ficial

appropriation.

only get

service which this

requires

because

to reduce

have,

judgment, sufficient studies
suggestions with reference to

ically

vertising

months

in my

howl

government

currently

if -not

•

book, "Sixty Billion Dollars,"
amazing insight into per¬

haps the most turbulent, momentous and tragic
decade of this country's
history, but you will
also get an appreciation of the tremendous

Fed¬

and

used. We

or

formed.

the

budget

weeks

a

were two
gov¬
the New Deal and then there

was

,

appropriations until a short time
ago.
The government has moved

fact

applied to

The processing of

There

..

grind

ment had

vors

as

to

1933-44, it might be said there

Jones.

If you will read Mr. Jones'

will not

appreciate

tends

the period

Jesse

was

drastic proposal and
achieve—the legisla¬

machinery

the

I

thereafter

and

away

seen

problem.
The difficulty
lies in the fact that
everyone fa¬
economy

In

ernments in Washington.

by

now

never

For great

I propose to discuss

from

is

filed

are

they become
practical.

efficiency in government

a

to

slowly.

Economy Reports in Practice

on

held

were

information.

eral

of

intended.

are

of the News

By CARLISLE BARGERON

hearings for the

1952

year

that this is

Hoover

constructive, and
are being
made to

gress.

Put

Washington

Ahead

Congress near the first1 of that
it would afford the Congress
and the government departments.
the advantage of utilizing
up-to-

them out.

carry

Nobody
disputes
that

The

adjust¬

year,

functions.

proposals
are
honest efforts

times with heat,

many

out

27,

It is

for

possible to the period

as

for which the funds

date

for economy in
government.

interval

placed on a calendar
basis. Furthermore, requests

closely

as

and recommends

money,

government

From

an

for appropriations should be made

at cabinet level should be created

of giving

after

—

Thursday, October 25, 1951

.

next

ment—be
year

essary appropriations and increase in government
agencies. /
Attacks system of budget
making, and advocates changes in
civil service laws to eliminate
incompetents in government

service.

expenditures

appropriate

*

Cabinet officer severely condemns wasteful
government expen¬
diture, and calls for putting into effect recommendations of
recent economy

the

1,

ernment

77 7 7

■

of

should be abandoned and all gov¬

Secretary of Commerce
'7

advance

fiscal year. This confusing use of
a
fiscal
year
starting
July

By IION. CHARLES SAWYER*
■'

in

year

.

.

-

over

I

the RFC in different times and also

there aren't many Jesse Joneses.

-

Volume 174

Number 5058

people of that era were not
government

The

Is the

Cycle of War Bond
Selling Completed?

i''

'■

•,

■

•

•

•

•

.

Dr. Kemmerer

1

bonds

'

'

•

•

■

■

of

form

the

• .

It

these notes that forced a sus-

the gold standard,
other
issues
of
notes,
called
"green-

off

country

Subsequently
.Treasury

completed. Says bond-support system is not only
essential, but has fault of inflating currency, discouraging
bond buyers and diluting tax dollars. Urges return to a gold
was

coin standard and sale of bonds redeemable in
-

„

',

;

•

__

least

turies
new

us

matters.

has

man

For

constantly sought
playing

ing,
--

games,

-«

run-

ning his

--

econ-

regulat-

omy,

ing his money
rais-.
'

supply,
ing

children,

building
1-

fighting ships,
and

so

ad

on,

infinitum.
vis

way

No

•

ever

perfect

and

yet

keep

we

the

perfect
make

It

way.

will

sirable and painful,

the

we

to be used. The middle method,
selling bonds, generally provides
changed .more funds than : either of the
it

protection;
sacrifice

ones

heavy

speed

4.)

but

method

vantages and disadvantages;
one
has all the advantages.

Likewise,

economic

no

or

are

remembered

hopes

offer

one

held for

no

this

r

not

perfect and

will be.

never

Yet, somehow, many of us persist
in thinking that the kind of economy, the type of money system,
or

other

some

that

we

than .the

The

nf

action,

is

any

system in

^

f
member thp fanH.

thne

it

try

we

Tthfd 7h»
h»vf nirt ci
s/stem

old
and

examine

us

,,

...

Fourth War Loan____
Fifth War Loan___—

War Loan_____

Sixth

Seventh War Loan—

_1

Victory Loan
Total eight

loans___$156,893

amounts

The

21,144

drives 'include

raised

in

only

not

these
bonds,

however, but billions of dollars in
short-term Treasury obligations
also. As in World War I, a large
part of these bonds were at first
sold to or through banks. After
1942 strenuous efforts were-made
to sell more of them to the public,
This was not especially successful
but the effort was highly commendable. The banks continued to

currencies

inflated

more

Continued

than

on page

resentment

legalistically

too

their

on

had the earlier ones, that they

as

Despite

gold.

in

payable

were

HUGH JOHNSON&COMPANY,Inc

political campaigns featuring such

the

are

an

pleased to announce

their admission to membership on

Midwest Stock

the financing of World War I. -

:

,

Third War Loan—__

Main Office: Rand

World War I Bonds

Exchange

Building, Buffalo 3, N. Y.

Branch Offices

*

,

Although

the

we

%

'

i

'

••••

.

i

h

Cooperstown, N» Y.

Bradford, Pa."

Cleveland, O.

Westfield, N. Y.

Gowanc'a, N. Y.

of victory. The first 75,000 troops were ill prepared when the time
were mustered in for just three came. We had to train troops and

w

different

a

sisted

better method

a

there
to-

over

was

war

had over two
strong South. At the start the years' warning that we might be/
North- was recklessly optimistic drawn into
World War I, we

vir-

o™

the

18,555
18,944
16,730
20,639
21,621
26,313

Second War Loan____

vv. r— -

pound of gold flesh.'The later
bond issues had not stated clearly,

was
a
struggle
industrially strong but
militarily weak North and an industrially
weak
but
militarily

use

the

apparent;

of

Civil War

between

using.

are

Let

n.

The

better

we

faults of

ti,pC

using

that

one

painfully

are

of

course

not

are

time.

faults

in Millions

$ 12,947

First War Loanr

TT

w

-"Total Sales

-

wards those bondholders who in-

to

war

1

-Issue-

•

methods used in this country, slogans as "The same currency for
starting with the Civil War, our the bondholder and the plowfirst modern war, and continuing holder," all the bondholders were
down to the present. The Civil paid off in gold. This costly way of
War method, especially, should in- financing the war and its political
teres't us today.
repercussions were long rememCivil War Bonds
^ered, however and influenced

politi-

cal or other system of doing things
is perfect, because man himself

is

are

major

the

considerable

was

The terms of bond sales differ,

however, from
the next. The

armored

protection. Each has its ad-

more

After

-

other two^ (See Table 1, Column

ships,
example, have speed but offer

little

drives in the "Federal Reserve
Bulletin" for February, 1946 (p.
120) shows the amounts sold as
follows:

.

is

adapted to a
Light armored

condition.

•

much

ernment whose credit was not standard and had no difficulty revery good. Professor Wesley C.. maining on it. Since there was no take a large part of the governMitchell later estimated that the domestic convertibi»ty of gold, ment bonds, but in a more indirect
use v. of greenbacks in the
Civil
+ '
•
'
v.- n
+
•
specie payments did not have to way now. Thanks chiefly to in.~
War increased the cost of the war
be suspended. With other nations' creased production over the nation,
by $600 million.
»" "J ''.v4

bound

are

method

a

that is better

for

sible, the next time,.

wero

Bond sales again provided

,

both, in,the

We; wars all three methods

does.

find

may

in

welter

an-astute and energetic
Philadelphia banker, organized a
corps
of salesmen who almost
literally peddled bonds from door
to door. All told, 70% of the war
was financed by borrowing. It was

order just given. In major modern

never

was

Cooke,

ing bonds), and by creating money
(and bank deposits). They are de-

ex-

reveal

improvements,

some

true, and

nextr

periment
v

a

increases

tax

of the funds, especially at first. A
summary of the eight war loan,

uonas
-World War II was a double war
and it lasted over twice as long
ing itself. It explains why, for exas World War I. Despite at least
ample, people have tired of govtwo years of warning, we were
ernment regulation and tried laisagain caught unprepared. Because
sez faire, and
then tired of that necessary to make these bonds °f a decade of depression, moreand tried government regulation very attractive to sell them. They over, our public debt was already
again. Or'why people shift back usually carried interest of 6%. sizable ($43 billion in 1940). But
and""forth between^ hard'mohey ~ "
1
"
Better yet,""the '
buyercould pay the banking and fiscal policy pursystems " and
soft
or
managed for them in greenbacks but Was sued since 1931 had driven interest
money
systems.
What has this promised in most cases that the rates to an all-time low.
This
philosophizing to do with war interest and principal he received rnade loanable funds cheap not
bond sales? Quite; a lot, as you would be gold. This was an espe- only to the government but also
will see, if you read on.
'
»
daily fine bargain for those who to everyone else and stimulated
There are three basic way§ of bought bonds when the green- inflation. Again there were no
financing a modern war: namely
backs were heavily depreciated. It greenback issues, however. The
by taxation, by borrowing (sell- was the high price paid by a gov- nation was on a "qualified" gold

hoping that
Donald L. Kemmerer

of

sale

wars,

slow in appearing,

bered fact about World War I
Liberty Bonds. Obviously it was
something to be avoided, if pos-

;

knowledge of history, is one of
the mainsprings of change. It explains why history keeps repeat-

on

cen-

of worshipping, govern-

ways

the

to

war.

Loan bonds sold, as .low as 82.
Perhaps this was the best remem-

of short-term Treasury notes. Jay

perfectionists

are

some

This

(See Table 2.)

addition

V

•.

....

Most of
at

gold, with little :

participation in market by Federal Reserve.

;

vious
-

gold

undesirable

an

the

after

could

deem

and

Too
many persons wanted to cash in
their bonds in a market that was
not strong anyway. Fourth Liberty
reputation

During the war. the government 1
also conducted five major bond
drives.

a

we

ours,

what

1919

of

June

21, the bonds got

backs," caused more inflation.
;

in

continue to reinternationally although most of the time it was
gold" not necessary to do so. As in pre-

that after
buy

wholesale prices fell 40% in 1920-

not
-

so

might

they

standard

pension of specie payments in
December, 1861, and drove the

traces

through bonds
war

they wanted.
Although we returned to

short-term

notes that circulated as money.

history of War Bond selling and indicates
present situation resembles that following Civil War, when sell¬
ing cycle

nowadays. So

are

floated a $50 million

the

in

loan

was

:

they

as

the Treasury

University of Illinois %

:

.

save

accustomed to buying

By DONALD L. KEMMERER*
Professor of Economics,

months and Co"gress increased. Produce supplies for

TMs

them and get

nrtaxes only slightly. But the North them all to Europe in a hurry.
untemnered
h/ ivwHp .f
won no major battles for over a This was bound to be costly. As
:
™Prd
y experience or ycar and g hal(^ gnd ag the war before, we increased taxes relucidealism

T*Reprinted
"Current

and

Soon

banks

'

of Illinois.

men

to lend more to the govern-

price level and on our monetary

on

but

any

a

system. Trices rose sharply. We
prohibited the export of gold in

stifr terms,

very

1917 and thus

Duration

Civil

War

Cost in
Billions

___

v.-

48

World War I

Money Creation

18

$4

Bonds

70

12

-

19

World War II

26

20

-50

<330

40

50

demand deposits.

10

■■0M

.

these grew
of

TABLE 2

*- 6%'

-

6

February, 1862
March, 1863

-£

./

Proceeds

v. '

.

5-20

'

r>.t.

6

514.700,000
i-T:'C

17

:

5-20

-

"

;

-

90,700,000

V

_

5-40

5 -6%

.

-

change
money

$1,041,800,000

D.

R.

Dewey, Financial History of the United States

:

TABLE 3
World

_...

First

Date

Liberty

Second

Third

_____

Liberty £__
Liberty

Victory

; genuine,

Term in

four

Tears

Rate

of

Proceeds

the

half

War

15-30

$1,989,000,000

Oct.,

4.0

10-25

3,808.000,000

afterwards.

4,176,000,000'

[loan

met

There

and

by

were

during

sales

bond
I

direct

the

was

war

borrowing.-

major

World

3.5%

victory

one

___

(See Table 3.)

In ad¬

4.25

10

Sept., 1918

4.25

15-20

6.964.000,000

dition, there were, of course, con¬
tinual sales of various short-term

4.75

2-3

4,498,000,000

Treasury obligations. Neither the

$21,435,000,000

principal nor the interest of these
bonds was payable in gold, but
the interest rate ranged from 3.5%

1919

1917-1919
d/

502-3,

R.

506,

Dfcwev,

508, 516.




Financial

3.5-4.75%
Histoiy

of

the

2-30

United

States

Members
New York Stock Exchange

(1928),

to

and

4.75%,

People

were

other

>

New York Curb Exchangb

£

Principal Exchanges

Main Office: 120 Broadway,

urged to

Branch

r

Empire State Buildinc

-

New York 5

Offices
New York 1, N.

•

"»/■• /

Philadelphia, Pa.
Allentown, Pa.

East Orange,

.

Y.

,

Chicago, III.
Syracuse,N. Y.

Bridceton, N. J.

Lancaster, Pa.

Durham, N. C.

N. J.

Pottsville, Pa.

Morristown, N. J.

Pinehurst, N. C.

Scranton, Pa.

vlnelandj N. J.

Raleigh, N. C.

Winston-Salem, N. C.

York, Pa.

Direct Private 1 Vires to

of three-year Treasury notes

Apr., 1918

Total
SOURCE:

Approximately

cost

.Interest

ex¬

is 30%.

/
'./•"

in

banks

to

greenbacks. A reasonable estimate
on
World War I money creation

Apr., 1917
1917

Cbrrespondeftts

Reynolds & Co.

for created
deposits is
creation just as is printing

May,

Liberty_____

Fourth

.

have become Our

Westfield, N. Y.

credit.

of such bank

.

War I Bond Issues

'

Loan-

pp.

(1928),

306-8.

pp.

in

bonds

^Selling

,

SOURCE:

by

creation

the

.172,900,000

•

Total, 1861 -64

Gowanda, N. Y.

much of the war was financed by

74,300,000

10-40

5

March, 1864
June, 1864

$189,200,000 "

20

6

^

Bradford, Pa.

Clevelani>, o.

Cooperstown, N. Y.

in part out of the sale
banks, in part out of

and

loans,

'

July-August, 1CC1

Buffalo, N.Y.

The increase of

somewhat indefinite
part from other
causes, such as war-induced busi¬
ness
expansion. It is difficult to
ascertain
very
accurately
how
assisted

'Term in Years

Interest Rate

,

JOHNSON & COMPANY, INC.

sales to bank customers who were

Major Bond Issues in the Civil War
Authorized in—

bonds to

HUGH

pleased to announce that

increased

of

result

the

largely

30

45

__

government issued no greenbacks.
The inflation that took place was

Percentage of Cost Paid By——
Taxes

abandoned the gold
the

standard. This time, however,

Financing Three Major American Wars
In Months

are

might have been expected on our

showed

TABLE 1

Wat-

We

tantly and this had effects that

costs mounted.

on

reluc-

the

UnlveX tance

ness
"

went on

the August issue of
Comment," published

from

Economic

y

7

(1551)

The Commercial and Financial Chronicle

...

All Branch Offices and to our

Lincoln

and

Correspondents in

San Francisco, Calik.;, Buffalo, N. Y.;
Omaha, Neb.; Dls Moines and Sioux City, Ia.

Detroit, Mich.;

October 22, 1951

26

8

The Commercial and Financial Chronicle

(1552)

ber banks of the Federal Reserve

Rep. Patman's Questionnaire

Answer—The principal func¬
tions

of

ments

Rowe, President of Fifth Third Union Trust Company
of Cincinnati, finds no change in his bank's loan and invest¬
ment policies. Opposes banks being required to hold additional
reserves, and sees no need for restrictions on real estate or
consumers' loans. Says transfer of ownership of Federal Re¬
serve
Banks to government would be outrage to those who
John J.

bank

and able to meet unusual with¬

drawals.

I

of

•

„

creases

Ohio, has

State

the

to

"Chronicle"

his
to

a

cinnati

ques¬

tionnaire,

bile

ad¬

in

and,

man,

to

of the

to

Subcommittee

Credit Control

Jtka J. Row*

at

to require

be

required

additional

the

to

reserves

option

of

the

or

years

to

seems

that

me

banks to hold addi¬

tional reserves is
less than

nothing

more

bald

a

plan to, by
require more

police action,
holdings of Government

bonds

they

themselves

wish

to

make
what

its

decision

own

should

credits

tended to

include all deposits in
insured Banks?
Why, or why not?

be

Answer—I
the

do not believe

Federal

Deposit

in

Insurance

change? Specifically, what change

police power should come
through
the
legal
route
of
proper bank examination. I do

Plan in the first place. I do not
think the Government
belongs

has

occurred
in
your
lending
policies with respect to: (a), Regu¬

not feel that bank examination

in the Insurance business.

lar commercial

have

since July 1950? If so, what has
been the general character of the

casional

(c)

customers, (b) oc¬

of loan to

the

cost

as

the

of

corporate

in¬

been

—

that it

have

y

*

another

time

1951?

If

under

or

When,

System been successful in accom¬
what conditions? If you favored plishing their
respective objec¬
the abandonment, would you have tives?
Have they been fair and
preferred that it be done earlier? equitable in administration?
When?

Answer—Again, I feel strongly
believe

that both regulation X and
reg¬
ulation W should not have been

the

that

Question No. 3 — Discuss the
factors which contributed to the

Federal

changes in

tage of the shareholders of the

policies described

Federal

preceding questions,
and your evaluation of the rela¬
tive importance of each factor.
Please give consideration to the

prices

of

should not, in the first
place, have accepted a par sup¬ r;
port

in

requirements around the turn of
year, (d) moral suasion (in¬
cluding the Voluntary Credit Re¬
straint Program), (e) changes in
prices and in the business outlook.

Answer

—

One

of

.

on

collateral loans.

Personally,

I
consider
(a),
namely, increases in short-term

interest

rates,

as a

very natural

result of constantly rising costs
and taxes. With higher over¬
head and taxes, our Bank feels
that it has to get more interest.
As to

(b), declines in prices of
long-term Government bonds, I
feel

having

a

10—What

consider to be the

do

']■ i
you

advantages and

the

be

larger market risk

*

whether

I

afford.

can

favored

desirable?

more

Implements—Bulletin

that

been

My

it

should

started

own

in

the industry—A. M. Kidder &
Co., 1 Wall Street, New York 5, N. Y.-

Government of Canada Internal Loans—Bulletin of
quotations
—A. E. Ames &c Co., Inc., 2 Wall

Street, New York 5, N. Y.,

Most

Fascinating Business in the World—Brochure describing
the various products,
transparent films, foils, etc., made by
The Dobeckmun Co., Cleveland 1, Ohio.

New

York

Banks and Trust

Companies—Comparative figures

of

Sept. 30—New York Hanseatic Corp.,
New York 5, N. Y.
as

conviction is that gov¬

completely

competitive

system
plies to business.

tions

York City Bank Stocks—Third quarter comparison and
analysis of 17 New York City Bank Stocks—Laird, Bissell
& Meeds, 120 Broadway, New York
5, N. Y.
:
\

Over-the-Counter Index—Booklet showing an up-to-date com¬

Jones Averages and the 35 over-the-counter industrial stocks
used in the National Quotation Bureau

Averages, both as to
12V2-year period. Of
the 35 companies represented in the National Quotation Bu¬

yield and market performance

that longer term money should

ments?

up

reau's

Over-the-Counter Industrial Stock Index, 12 trace
ancestry to years before the Civil War and another
nine had their beginnings in 1900 or earlier.
Twenty-three
of the companies have been paying dividends
continuously
from seven to seventy-nine years.
Of the other twelve, one
started paying dividends 119 years ago, and its stockholders
have received annual dividends regularly with the exception
of the years 1833, 1840 and 1858—National Quotation
Bureau,
Inc., 46 Front Street, New York 4, New York.
their

Railroad Income Bonds—Analysis—McGinnis & Co., 61 Broad-

*
-n.

;

Aberdeen

.V.si.v.;;

.-'.v.

.•

*

surplus

very

and

* V'

;

Bon¬

Air-Way

Electric Appliance Corporation—Bulletin—Newey &
Conway, 231 South La Salle Street, Chicago 4, 111.

Anaconda

Copper Mining Co.—Analysis—Eastman, Dillon &
Co., 15 Broad Street, New York 5, N. Y.
Also available is
a study of convertible
Railroad Income Bonds & Preferred
Stocks.

Autocar
Wall
Brazil

Co.—Card memorandum—Bond, Richman
Street, New York 5, N. Y.

Co., 37

&

Traction—Analysis—Arnhold and S. Bleichroeder, Inc.,
Street, New York 4, N. Y.

Broad

30

Bucyrus-Erie Company—Analysis—Filor Billiard & Smyth, 39

Broadway, New York 6, N. Y.
Superior

Richards

Calif.
in

&

Oil

of

non-dividend

Chesapeake

California,

Ltd.

—

Analysis

—

Hill

Co., 621. South Spring Street, Los Angeles 14,

Also available is

&

a

study of Capital Gain Possibilities

paying securities.

Ohio

Railway—Analysis—E. F. Hutton & Co.,
Broadway, New York 6, N. Y.

61

Christiana
&

Securities

Company—Analysis—Francre I. du Pont

Co., 1 Wall Street, New York 5, N. Y.

Colgate-Palmolivc-Peet—Memorandum—Carl M.Loeb, Rhoades
&

Co., 42 Wall Street, New York 5, N. Y.
memorandum

a

Colorado

Haile

Also available is

Paramount Pictures.

and Iron Corporation—Analysis—Bache & Co.,
Street, New York 5, N. Y.

Mines—Bulletin—Frank

New York

Jack

on

Fuel

Wall

36

C.

Moore

&

Co., 42 Broadway,

4, N. Y.

Heintz—Memorandum—Merrill, Turben & Qo^tlnion
Building, Cleveland 14, Ohio.
/r

&

Commerce

Lone Star Steel

bilt Hotel

Company—Analysis—McCarley & Co., Vander-

Building, Asheville, N. C.

Market Basket—Memorandum—Fewel &

Co., 453 South Spring

r;

Street, Los Angeles 13, Calif.
Mergenthaler Linotype—Memorandum—Auchincloss, Parker &

Redpath, 52 Wall Street, New York 5, N. Y.
is

a

memorandum

on

Also available

Norfolk & Western Railway.

V

Have you
Our recent

Banks

Continued

on

page

36

read

"Highlights" featuring

~

Science Stocks?

larger
profits

pay

in

upon
more

by the banks
capital.
The

thought that the United States

non-

Y
(

account in order to guard against
to

Do you believe that

Y:

;•\

banks

much

undivided

being called

require^

-V

*

'

Petroleum

Corporation—Analysis—Bonner &
Incorporated, 120 Broadway, New York 5, N. Y.

ner,

~

New York 6, N. Y.

way,

to say in the

Reserve

a

ap¬

reserve

a

as owners

member

more

Federal

build

which

do'

over

administration and management

the

No.1'5—What

bank

Banks,

should have

above

you
consider to be the principal func*
of

serve

the

(

Question

120 Broadway,

New

of Federal Reserve
Banks, and
particularly endeavor to see that

place.

ernments have to go to the open
market when borrowing money,
and should not consider them¬

selves

the
cap¬

of the stock of the Federal Re¬

have

never

the first

Cobleigh—Explaining
investing for income and

on

V

...

f Answer—I feel that

the

abandonment, or would have
preferred that it had been done }■■'
earlier, my own firm conviction
is

U.

17, N. Y.

Farm

^

to

personally that these de¬
clines are again the result of
higher wages and taxes, and




Question No.

f -v".

their

which

than their net worth
As

contributing to the little change
requirements

'

..

same
disadvantages of the ownership of
member ithe stock of the Federal Reserve
banks adopt, namely, which is- banks
by member banks? Do you
sues
are
for the best interests believe
that ownership
by the
of the Bank, bearing in mind ; United States
Government would

not

the factors

have made has been margin

follow

5

;

.

..

•

we

should

policy

reserve

put into effect, and that if we
do
believe in free enterprise,
we should avoid
any concession
whatsoever to being under directives from an "all wise" Government. ;

Govern¬

long-term

ment .market,
and that their
purchasing of Government

the

?

of the

Government H bonds

increases

that

Banks;

they
-

rates, (b) declines in

long-term

(c)

Reserve

•

following: (a) Increases in short-

bonds,

should

buy} bonds for the best advan¬

two

term interest

Banks

Reserve

Income—Ira

ital growth—$2.00 per
copy—Dept. 6, David McKay Co., Inc.,
225 Park Avenue, New York

under

or

Your

know-how and know-when of

Canadian

Governors of the Federal Reserve

bonds in March

at

other conditions?

really

holding down
holdings of longer

your

economic stability seems to me
nothing in the world but a

police state.

Gov¬

long-term

of

Answer—I

the

of

The suggestion that examination
♦could further the objective of

maturities.

in

purpose

wise

support

ernment

been
or

single

seeing that the bank examined
is amply liquid, able to meet its
obligations, and to avoid any
form of dishonesty whatsoever.

wise to abandon the

was

and

one

Question No. 9—In your experi¬
ence, have
regulation X (realestate loans)
and regulation W
(consumer loans) of the Board of

par

change in investment
because for some time

purchases

up.

Capital Gains Tax—Bulletin—Francis I. du Pont & Co., 1 Wall
Street, New York 5, N. Y.

exami¬

supervision should be

not, would you have considered it

(b)

securities,

has

and taxes con¬
Obviously, in¬

as wages

going

the

Question No. 4—Do you believe

no

policy
we

There

long

taxes increase.

(c) management of your govern¬
ment security portfolio.
Answer

that

and

cash balances for the
income
tax
payment
dates,
which again seems clear proof
to me that deposits increase as

policies of your bank
changed since July, 1950? Discuss
the change in terms of: (a) Pur¬
purchase

increase,

build up

vestment

chase of municipal securities,

believe that bank
and

Answer—It seems to me that
bank examination should be for

dividuals and companies have to

loans.

2—Have

you

nation

deposits are certain to rise

tinue

of

property u nd e r existing
regulations, and (d) similarly
No.

do

in

will

ness

the

on consumer

Question No. 8—To what extent

the dollar volume of busi¬

bank

(c), we have ob¬
served the margin in the rela¬

Question

is

vance

On

tionship

banks

prices and in the used as instruments for further¬
business outlook, personally, it ing the
objective of economic sta¬
strikes me that as prices ad¬ bility?
*

occasional commercial bor¬
rowers.

insurance at all, but I am cer¬
tainly opposed to any increase
in its field.

of

improved much since then,

changes

(b)

nor

roaring 20s,

the

examination

capable of further im¬
provement as bank examining
skills
increase.
As
to
(e)

Answer—In my opinion, the
lending policies of this Bank
have changed very little since
July; 1950.1 can see no change
at all in our loans to regular

am

strongly opposed not only to the

that

and

customers,

in

been

I

should

it

as

has

borrowers,
loans, (d) con¬

loans?

commercial

effective

as

but

commercial

real-estate

sumer

was

will be pleased

following literature:

parison between the listed industrial stocks used in the DowQuestion No. 7—Do you believe
coverage of Federal de¬
posit insurance should
be
ex¬

Credit Restraint Pro¬
that the
as I feel that each bank

to

as

a

granted, and what credits should
not be granted,
and that the

ing policies of your bank changed

an¬

Reserve

little interest in the Vol¬

should

Question No. 1—Have the lend¬

the

securities.

than

gram,

The questions, together with the
answers of Mr. Rowe, follow:

on

hold.

untary

Ma nagement.

banks

required, such

held

strong

very

Debt

and

in

and

sound

Federal

Answer—It

keep the Bank and its cus¬

tomers

be

quick cash position, and I have

Generjhl

Comment

bank in specified classes of United

„

on

—

reserves

now

States

my

effort

every

been made for many

has

Chair-

man

institution

our

6

the

that

hold

to

those

opinion, these balances consti¬
tute a real liquidity,
(d) As to
moral suasion, in my opinion,

etc.

banks,

No.

of

System)

their mo¬
in New York, Chi¬

bankers of the

in

their

'

:

nual reports of the Board of Gov¬
ernors

city like Cin¬

a

cago

by
Congressman
Wright
Pat-

them

Expanding

dressed to the

country

granting

Charter.

proposal
(advanced
in
Wilson report and in several

have to keep

reserve

send interested parties the

to

banks

the

power

Banks in

ness.

answers

It is understood that the firms mentioned

other rules and

■

my

earning

re¬

leased

in

—

non-member

regulations than those made by
the
V

Recommendations and Literature

what¬

reason

no

to be under any

opinion lessen the
of Banks, and
again amount to a further in¬
crease in the cost of doing busi¬

Cincinnati,

see

for

soever

higher return, (c) In¬
in reserve requirements

a

reserve
require¬
keep banks liquid

to

are

Question

bring

Rowe,
President of
Fifth Third Union Trust Company
J.

Thursday, October 25, 1951

Dealei-Broker Investment

System?

John

.

member banks should be required
to hold the same reserve as mem¬

Prominent Banker's Reply to

believe in free enterprise.

.

.

Government
the

should

ownership

serve

Banks

of

take
to

Members:

over

Federal

seems

Troster, Singer & Co.

me

Rean

outrage to those who believe in
private enterprise.

74
*

N.

Y,

Security

Dealers

Association

,

Trinity Place, New York 6, N. Y.

Telephone:

HA

2-2400.

Teletype

Private

wires

NY

1-376;

377;

378

to

Cleveland-Denver-Detroit-Los Angeles-Philadelphia-Pittsburgh-St. Louis

i

Volume 174

S

Number 5058

'
..

.

.

.

.

;■

■

.

.

New Issues

Interest

(1553)

The Commercial and Financial Chronicle

:

'

'

'

;

the underwriters, from Federal Income

Exempt, in the opinion of counsel to

' :

-

•

:

■

.

v

Housing Act of 1937, as Amertded

Taxes by the provisions of the United States

$109,511,000

Authority Bonds

New Housing

Con¬
annual
funds of the
the Bonds when due.

first pledge of annual contributions unconditionally payable pursuant to an Annual Contributions
Administration and the Local Public Agency issuing said Bonds in the opinions of bond counsel. Said
will be payable directly to the fiscal agent of said Local Public Agency in an amount which, together with other
Agency which are actually available for such purpose, will be sufficient to pay the principal of and interest on

The Bonds of each issue will be secured by a
tract

between the

contributions
Local Public

Public Housing

The United States Housing
the annual contributions

solemnly pledges the faith of the United States to the payment of
Administration pursuant to the aforesaid Annual Contributions Contracts.

Act of 1937, as amended,

by the Public Housing

Legal Investments, in the opinion of

Bonds issued by

and Trust Funds in New York

counsel to the underwriters, for Savings Banks
noted below.*

and certain other States; except as

located in:

Local Public Agencies which are, or are

—Scale B

New York City, N.

$15,410,000

Y.

2'/g%-Scale

4,191,000

9,548,000

Little Rock,

1,032,000

County of Kern,

1,162,000

Calif.

N.J.®

2,486,000

Albany, Ga.

2,453,000

New Brunswick, N.

2,180,000

Brunswick, Ga.

2,860,000

Perth Amboy, N.

2,729,000

Rome, Ga.

Im¬

7,480,000

providence, R. I.

2,189,000

J. ©

J. ©

Kingsportv Tenn.<
Everett, Wash.

2,553,000

N.J,®

Rahway,

Puerto Rico

10,601,000

>

N.J.®

City, N. J.®

Goldsboro, N. C.

2,819,000

MicA

River Rouge,

Bayonne,

855,000

Union

1,228,000

2,449,000

Ark.

South Amboy,

866,000

$

Monroe, La.

3,300,000

Ark.

1,947,000

Fort Smith,

Massac County, III.

743,000

$

Phoenix, Ariz.

•-

x<i

f;'

77:".j

g

1

•

•

■

f

-2*/8%

564,000

[

'

*

«i,

~

$

Hartwell, Ga. ©
Lavoni a,

616,000

Ga. ©

Gladewater, Texas

173,000

470,000

Jasper, Ala.©

"

t

^

,

352,000

JBoaz,Ala.®

585,000

■:

»,

"

—scale d—

$

i

•.

©

Hamilton, Texas ©

Haskell, Texas ©

693,000

Mesa/Ariz!

322,000

McRae, Ga.®

403,000

850,000

NorthJLittle Rock, Ark.

612,000

Rockmart, Ga.©

575,000

417,000

Calexico, Calif. ©

875,000

Waynesboro, Ga. ©

661,000

257,000

Holtville, Calif.

Canton, Miss. ©

195,000

Honey Grove,: Texas

290,000

Port Hueneme,

442,000

Jefferson, Texas ©

263,000

Riverbank, Calif.

941,000

San Buenaventura, Calif.

735,000

©

1,060,000

Calif. ©

851,000

1,735,000
1,104,000

Key West,

2,463,000

Bonham, Texas ©

1,633,000

Brownwood, Texas
Del Rio,

447,000

©

Fla.©

Electra, Texas

760,000

Fla. ©

Olney, Texas©

424,000

Seymour, Texas©

Ennis, Texas®

©©©©®
*The Bonds of the

Mission, Texas ©

368,000

Puerto Rico Housing

Offered

©

McKinney, Texas ©

770,000

Texas ©

Eagle Pass,

Henderson, Texas ©

861,000

©

Texas ©

905,000

Miami Beach, Fla.

Sanford,

©

1,010,000

Daytona Beach, FEa. ©

525,000

900,000

©

Calif. ©

County of Yolo,

Miss. ©

West Point,

Hearne, Texas©
'

850,000

Sweetwater, Texas©

473,000

©

Clallam County, Wash.

as a group

Authority are the only exception to the above statement on

Legal Investments.

Maturities, Rates, Yields or Prices
•YIELD*

■YIELD*

Due

Issues

Due

Issues

B

Due

2%

ft

Scale

B

c

Due

2&

2Ml

Year

D

C

Year

All

Year

All

Year

Scale

Scale

Scale

Scale

Yield

Yield

2ft ft.

.

,

1972

1.75%

1.80%

1.80%

1983

1.80

1.85

1.85

1984

2.075

1974

1.85

1.90

1.90

1985

2.10

1986

2.10

1987

@100

2.075%

1973

2.10

1952

1.00%

1962

1.50%

1953

1.05

1963

1.55

1954

1.10

1964

i. 55

1965

1.60

1975

1.95

1.95

1.15

1.90

1955

1966

1.60

1976

2.00

2.00

1.20

1.95

1956
1957

1.25

1967

1.65

1977

1988

1958

1.30

.1968

1.65

1978

1959

1.35

1969

1.70

1979

1960

1.40

1970

1.70

1980

1961

1.45

1971

1.75

1981

1.95

@100

2.05

2.10

2.05

2.10

2.15

2.05

2.10

2.175%

2.15%

2.20

2.15
'

2.20

2.175

2.225

2.isf:

2.175

2.225

2.175

2.25

2.175

2.25

2.175

2.25

2.175

2.25

1992

2.10

2.05

D

1991

2.05

@100

;

2.00

Scale

2'/g%

2.175

2.25

1989
'

't.v-

1990

..

:

2.075

1982

2.175

@100

•'

■

•'

vV

,":f • v

'.

'■■■}

•'

(and accrued interest)

^

The bonds will be
The

offering is not made hereby, but

Phelps, Fenn & Co.
Drexel & Co.

Lehman Brothers

F.S.Moseley & Co.

only by means

'

Bear, Stearns &'Co.
■

■

,i

■

Paine, Webber, Jackson & Curtis

HaQgarten & Co.
Eldredge & Co.
Incorporated

McDonald & Company
October 25, 1951

Vsss//s///s/rss////y/y//////s/////r///wn///s/^^^

maturing

BIyth & Co., Inc.

Eastman, Dillon & Co.

'

A.C.ADyn and Company




The Bonds

on

and after ten years from

their dates are redeemable prior to maturity as

stated in the Offering Prospectus.

approval o] legality, with respect to each issue, by bond counsel to the issuing Local Public Agency.
oj the Offering Prospectus, copies oj which may be obtained from such of the undersigned and other underwriters as are registered dealers iti this State.

offered, subject to award, when, as and if

issued and received by us and subject to

Goldman, Sachs & Co.

Harriman

Equitable Securities Corporation
Alex.Brown & Sons

Coffin & Burr
Incorporated

Schoellkopf, Hutton & Pomeroy, Inc.

Ripley & Co.

Smith, Barney & Co.

Shields & Company

The First Boston Corporation

Incorporated

Merrill

Lynch, Pierce, Fenner & Beane

Estabrook & Co.

American Securities

Stone & Webster Securities Corporation

Hemphill, Noyes, Graham, Parsons & Co.
Corporation

Hornblower & Weeks

9

'

10

The Commercial and Financial

(1554)

cessfully

We Need New Business Ventures

A

into

largest

FAIRLESS*

national
in

economy,

business units

new

tures

In

♦.

(-

,

indicating individual ventures still

as

field

world.

iron

of

It

also

Essential to Private Enterprise

powder

By IRVING S. OLDS*

manufac¬

diverse items

such

•

f

Chairman of the Board, United States Steel
Corporation'

piano

as

plates and aircraft sub-assemblies. <

new

fact, the

Extolling need for

products which it

new

universities

has developed during the past ten
years

are many

sales.

And

because

it

of

-

size, in itself, cannot crush competition.

security, and the
a

tive

steadier income to its work¬

of

us

tance

of

new

to

recognize the impor¬

national

our

When

producing

stops
units

business

business

economy.

nation

any

small

and

new

it must perish

just
as

,

children.

The

.

of

ment

any

stant

a
very hazardous
and

of
de-

Benjamin F. Fairless

ppends on the
!

place.;

their

arouses

admiration;
it—and

they

so

to

keep

There

Are

try to
it that

let

But

another

at

look

for

pri-

in

of

independent

our

find

may

difficult

it

for,

weapons

serious

colleges

crisis

have

that
faced

more than a century.[
Surveys show that one-half of

all

private,

our

stitutions
red.
into

—what

liberal

dn-

arts

are

now-operating in the
of them are dipping

Many

with which to

,

financial

private

our

uni-

what has
.hi w been described,
press
reports, as the

recent

most

y-eijvin

intellec-

tual

their
is

endowment
more

capital 'or
serious—are cur- #

by totalitarian tailing their
teaching staffs. Their
ideologies. No;
situation, moreover, is growing

moment

a

te 1

facts of
h*

resist invasion

"Malefactors

us

o u r

a

the
,

Great Wealth?" :

in¬

ae-

versities

And I

on

,.

strange theory which
of success propound.

other

nation

they

pect
of
meeting v these • deficits
that over¬
many
private solely by contributions to current
worked phrase you have, heard so\
universities as income.
Our private universities
often
that
phrase
about * the
Irving S. 01d»
we do; and no
must ;seek
"malefactors of great wealth."
greater
endowment
nation, I sup- gifts4-from
-Now first, let me confess, reindividuals, founda—
gretfully, that I have never ac- pose, enjoys the same full measure tions and corporations,

,

reforms, and ad¬
theories, which would make
growth and success impossible;

mind

our

certain: no man in his right

take any gamble unless

It

.the worst of it is that
people

theories

accept

some

these

false

facts.

as

of

'

is

summed

up

possesses

in

worse, and there seems little pros-

so

,

—

advocate

vance

and

ever

the first

congratulate them

a g-

dowed

their

.

.

A

universities

the enemies

willingness of millions of people
to take that risk—and one thing is
will

to
v

Dun¬

.

district in

"midget

But let that business grow
—let it become strong and sue-:
cessful and vigorous and big, and
it frightens them to death.
So

Yet the whole

America

foreign
toreign

f,

which brought this
plant here to

gram

have

gressors, so we
have looked

through
program; of

splendid

,

owned to indicate that

industries

Jmaterial weapons to keep pace with their tax-supwlth whlch t0 rePel thie armies of ported competitors. Here are the

progress

made

.

,

privately

way.

costly gamble.
future

operated

They think small.

weak

protect

it represents
It is exactly

cansville

V A new-born business that is lit¬
and

own

and

industrial diversification—the pro¬

false

tle

is likely to be

.

Just , as our

not

may

u

social

of

have

Altoona

their

constant clamor

a

kind

same

of

they find it, and who

complex."

business

new

Johns

+

the

* success

from what I would call a

establish-

the

denounce

alarms, are undoubtedly
sincere, well - meaning peoplepeople .who are only suffering

trouble is that
v

who

iiim

eventually eliminate private colleges,
Says most diffi¬
enterprise faces lie chiefly in

may

education. Wants academic freedom
preserved.

arts

T

which the citizens and merchants.

of

producing
:

Calamity

ing out that America is in danger.
Yet many of these Calamity

fill the air with

it had stopped

The

like that; but, to me,
real social progress.

wherever

if

it would

they will take to horse,

like Paul Revere, and storm every
Middlesex village and farm, cry¬

Johns

surely

as

the facts,

advantages and

-liberal

to their families, to their
communities, and to the nation. >
ers,

.

All

»

privately endowed independent

unless latter receive greater financial
support.
cult problems which American

promise

new

support of

curb against totalitarian
trends, Mr. Olds calls

financial situation of most of these in¬
Points out tax-supported universities have
competi¬

stitutions.

'no

longer puts all of its eggs in one : ,;
basket, it affords a new measure /
of

as

attention to precarious

60% of its

now account for

total

.

"malefactors of great wealth,"
and points to success of Carnegie and others in starting small
concerns that grew large and prosperous.
Says the "customer"
is judge and jury in determining business success. Concludes
Denies there

persist

the

producer

the

in

V

and small businesses in our
leading industrialist cites recent increase

Stressing importance of

new

"/•';•j*•

experiment led
of
powder
metallurgy, and today the National Radiator Company .is the

—Large and Small
President, United States Steel Corporation

several

laboratory

them

By BENJAMIN F.

developed

lines of.products.

Chronicle .Thursday, October 25, 1951

'

,

quired

that

quantity

would

which

of

entitle

wealth
be

to

me

x

of individual liberty that we have
know"-

That

can

hardly

be

studies

of

our

a dowed universities

privately-enas a

whole dis-

c°inci<!ence-

close that the rate of income on
so I can speak freely
and imperAbroad — in countries where their invested endowments is only
The Basis of Business Success
pay off to somebody.
sonally
on the subject.
In faet, education is wholly dominated by slightly more than half what it
V Now I do not know how many
Yet the true facts are available
the most fanatical of our Calamity the State—we have seen ruthless was 20 years ago, while the over-f
©ther old, established businesses to all of us. They are to be found
Johns could hardly regard me as and ambitious men subvert the all cost which the student must
are—at
this
precise
moment— not only in official government
anything more than a minor haz- youthful minds of an entire nation pay for a college education is
celebrating their growth and ex¬ reports, but also in the history of ard on the road to his Socialist to the barbarities of' Fascism or nearly twice what it was in
1941.
pansion as we are here; but T do every successful company and of
Utopia.
to the corkscrew convolutions of a So-called; soak-the-rich tax polknow that somewhere in America, every thriving community in the
Riif
if
thp
»r>rnmiiiatinn
nf
crooked party line. That must not icies, moreover, must result, in the
this very day, nearly thirteen hun- United
States.
And
certainly,
?
wealth is evil then certainly- one haPPen here■ we have many fine long run, in drying up the welltired brand new businesses are they are all a round us as we
of
thP
greatest
"malefactors" in tax-supported
public colleges springs from .which large future
opening their doors to the public gather here today.
.♦
*
hictnrv
was
voung
telegranh which are controlled by State and endowments might have been exhe knows, for

a

distinguished

fact, that it does

as

"malefactor,"

a

*

>

jteen hundred

n

Another thir-

»for the first time.

!

will do

tomor-

so

So let's look at

facts

let's

and

few of these

a

for

see

ourselves

it will be the next what would have happened if the
'".day—and every weekday through¬ strange and unreasoning fears Of
:

and so

row,

out the entire year.

r

unhappily,

Experience tells us,
that

most

these

of

our
#

brave

new

Calamity Johns had

permitted to govern

been

ever

national

our

thinking.

ventures will

fail, and yet—know¬
For
example, there is that
ing this, their owners have still quaint—but
widely entertained—
been willing to. risk their precious notion
that every business must
•/savings, and to mortgage, perhaps, be
strictly monogamous
that
their entire future, on the outside once it has become
wedded to one
chance of success.
particular line of products, it
.£ ;i Why?
must
v

;

.

.

.

f

Well, there

only two.rea-

are

j- sons: first, because they have

seen

| others take the same gamble and
win; and second, because they
*

j hope—if they win—to win big.
If

they

thought

for

remain small, provide

hand-to-

mouth

existence, and keep < one
jump ahead of the sheriff, you can
-bet your bottom dollar that not
■

;

one

these

of

would

little

have

ever

new

seen

the light of

the

Yes,

truth

is

that

growth

If

a

never

meat packer goes

the

'

\

Now all of
are

here, I presume,
bigamy; so it all
fairly logical.
But is it?

opposed

sounds

us

to

Well, suppose
tory of the

we

Company for

a

look at:the his¬

National

Radiator

moment, and

This company was

ventures

day.
*

other.

never,

ma

for

worked

once
right

ri

here

Wvp

at

***governmental agencies, but pected although temporarily,
we

are

determined that

no

self-

this

That

now

see.

monogamous—industrially speak¬
ing.
For more than thirty years

progress are

than

■

the

something

more

it

symptoms of suc¬

mere

they

are the necessary
it; and when any
company, big or small, stops grow¬
ing and ceases to progress, you can
he
perfectly^ sure that the
rigor mortis of business failure
cess

.

.

.

ingredients

t

,

of

has set in.

'

Unfortunately,
are

who

in

this

do

however,

country

not

regard

some

there
people

success

as

a

virtue, and who look upon busi¬
ness growth as a national calamity. To them, the opening of this
fine new plant will mean only that
another Big Business has grown
bigger.
They
will
conclude,

pro-

about

a

thffalLrZ£rS/independence

steel

industry

day. It

was

we

as

V^ Finely nSSS^m

taow it to-

his time that

during

.democratic system of freedom and

sponsible for that fact.
'

The
lhe

fact
fact

that
that

America
is-the
America .is
the

largets steel -producing nation on
earth accounts,
added fact that

is

the

the
and

I

^

]

^

.

Yale has survived. and prospered;

tor

250 -pyears. Without governmental subsidy, it has grown from
small and humble origins to begreatest
purchasing, power, come one of our nations truly
the finest standard of living great institutions, and it has done

in all of recorded history.
do

not

know

1

•

:

this^ only because it has satisfacreal and useful

how

those 62,000,000 jobs can be traced
back directly or indirectly to the

dhem—oi

^

.

world's

greatest industrial nation, providing work for more than 62,000,000
people who enjoy the highest pay,

'J

J

opportunity is, I believe,dhe com-' SidJes, a?, ,,tve .are getting from
resDOnsibilitv of our ori- Private donations and bequests. So

of course, for the
it

,

^Teemtog> ineXus

^

QnH

?

,1^.7111
will-

they

higher salaries, build
facilities and charge lower
tuition than we do./'-:v'i-.
can pay

more

Thus f
meet

h

b

bl

t

this competition

largely be:
cause 0Ur wonderful
library and
our
prestige have attracted many
0f the nation's

outstanding scholars

and educators to

books and

our faculties; but
...m
prestige will not buy
*

i

groceries, nor: will they induce
weii-balanced, • thoroughly • qualified young men, of the type^we

made nothing but
heating efforts and to the success of An-'
g^v
equipment, and so it was tied to
drew Carnegie; but I do know
Threat to Private Education
shall need in the future, to 'emthe apron strings of the
building that 40%
of
all
our
industrial ;;
R
f
npHhpr
oj7P
nor
o1IPrpo<=
brace teaching as their' chosen
industry.
As long as
building workers
today are employed;
was
bl
age' nor the oast Profession- When a racehorse can
booming, the heating business either in
making steel or in makboomed too; and then suddenly—
,record of ereat public service is earn more money ln one year than
ing products out of steel. ;
'

just at the moment when the
pany appeared to ihave
the very peak of its size
dustrial

'

per-

may

is

olant

was

.

and

haps, these high taxes

seeking individual or group shall duce larger current gifts from a
ever destroy their academic inde- few individuals who figure fthat
hundred vears ago arS his name? Pendence, and we recognize that-the Government is thus paying
"ot course was Andrew CarneSe their best assurance o£ continued .indirectly a good share of their
He".vas
Win the preservaem,
integrated, mass-production v
of a strong, hea^lthy,wigo^rous
Supported Institutions
where

Switches

standing

strictly

once

mil

thA

eauc.ation, privatelyemowea.,
America became the largest steel-V, To preserve
that^system of prt-f
producing nation in the world, and vate education is, I think, a funda°rfp
it was he—more than any Other mental responsibility of private b
make one man,
probably—who was re- enterprise, andto/ preserve our «ic^of

grocery, business, or a
radiator
company
makes flying
machines, that is industrial big-

minute

a

a

any
into

amy'

that the best they could expect of
their business was that it would
.

never,

who

operator

-

power

—

industry went into

the
a

com¬

reached
and in¬

building

slump; and

And of

one
thing I am certain:
could gather in ,one mountainous pile,
all of the wealth
which Carnegie created

if

we

during

his

could then

lapsed completely, and this
pany almost did likewise.»

made

^

of

these
comes

ori vate

any

beside

-

lifetime-r-and

if

we

place, in another pile

it, all the money .that ,he
for- himself—'his own per—

sonal

fortune,

would

seem

vast

as

it

was,

so

puny

fail to

which

institution

times?'and if the day
when

Yale

for-.-others, privately-endowed

depression struck the nation. The
market for heating equipment col¬
com¬

jtv

and

our

in

ever

other

no

^

provide the kind of service
our

society

wants

is

and

more

independent; private

^

to see

iv?™
th^re
GC°"

universities

willing to support, then there will
he

LhXiF/etfmf'"itT easy
"f"
£ntire lifetime, it is
^
hf^
n

„_ny

f

a1

-

APcl^r1"'

sense of valuesvlt\
Some people, -of course, would
seek to euro this situation by

ca

Putting a ceiling on the earnings
racehorse, but I personally
b^tcomparison thcit you could put Government control of education. clir?S to the. old-fashioned and refor the alertness and
quick think¬ it in
your eye!
That is why J am gravely dis- sctionary school of thought which
ing of its managers.
Diagnosing
Somewhere in this
its weakness
country to- turbed tonight by-what • appears b°lds that the better course is to
correctly, they de¬
J therefore, that Small Business
day, there may be other young' to be a clear and definite trend increase lhe pay of the professor,
\ must be growing smaller; and cided at once to diversify its
>

'

J without
•From

pany,

have

no

doubt

that

have gone under had

it

it

would

an

Plant

by

of

the

Mr. Fairless

Duncansville

National

Radiator

Com¬

Duncansville, Pa., Oct. 18, 1951,




at

Sheet

small and

colleges

in

America.

There

will

-only-be-Government-subsidy and

.

"If people won't buy
stopping to look at products.
radiators," they said, "we've got
address

of

so

not been

ever

'«dedication
Metal

I

to

make

something

they will
they began a great
program of research, which sucbuy."

And

so

-rrasmrriii.^^

men

who

possess the imagination, away from private education in
" the day ever comes when our
ingenuity and the genius of a' this country—a-trend which seems tax-supported competitors can ofCarnegie; but I seriously wonder.:—~t—
•»
,fer the youth of America a better

the

.

whether

our

present laws and

Continued nn
LsOnunuea on

eco-

r>aae

11

page J1

"ofnn" ^lebS'in, the"zsSth fducatl0n than we ca^-and at a
AnnTveVsary Tf -Slif ^ UnTverity, New lower price-we are through, and
Alumni

Haven,

Conn., Oct.

19,

1951. -

I think there

is no

doubt that that

Number 5058

yolume 174

unless

will -'come

day

...

we

privately-endowed

to carry on our

And 1 wdl 8° fur_
that
I
question
that! support
will
be

universities.

and

ther

say

whether

in full measure unenlist the aid of the

forthcoming
•

less

can

we

America,

corporate enterprises of

scholastic pattern to the self-serv^anv Irouo indLtrfaLor is bad' But there is n0 leSitinf!ate
"a ?> aniL
Sell a? excuse for the increase in prices
P°iltlcal- We might as well ac and the Cost-of-living. If people
Rntfnm had been worried about inflation
J™1
be
^
in the thirties, as they are today,
FrLnm 2f FnternHse; fnflation would not . have hap®atiicwvrnidFir ^°.Pened- Tt is ^ust as bad now to
?hin^_thnt fh p ari inseparable^ fear inflation wiU "bust the coun~

Now-speaking as a corporation
although not officially
as a representative of the company
with which I am connected, I want
executive,

emphatically that

to say

—

in my

independent, privatelycolleges and universities

free,

endowed

remains

And unless it recognizes and
obligation, I do not believe it is properly protecting the

out the othe

long-range interests of its stockholders, its
employees and its

No

•

.

.

the want of his support; and why
no honest devotee of Academic
Every
well-managed
corpora- Freedom will ever seek to destroy After World War lf the
tion, of course, must preserve, im- oar. fai
fr^nnnnrtnnftv living' beginninS in 1920'
prove
and
develop the major ?xr-IuCf^ f ^
,
opportunity. until it reached a low

*

Jflth tbat

materials; but
if it is necessary for us to spend
millions of dollars to beneficiate
the ore which goes into our blast
furnaces and to process the coal

Xch
then

its

of

sources

goes

why

business

raw

0r coke

into
is it

not

ovens-

our
improve

that

and .
of speech is

absolute

is

Freedom

To a limited extent, many cor- the overriding laws of libel
porations are doing that today. siander. Freedom of assembly is
•They support scientific research" subject to the laws of1 trespass.
by qualified schools, in various Freedom of petition is limited by
specialized fields. They also make the laws governing lobbying. And
general donations to certain tech- s0 it is with Academic Freedom,.
.

schools

nical

which

from

they

which is always

basis of

an

all ' worked

our

be

will

nonsensical

this

can

lem whenever

not

S.

arma¬

result

solve the prob¬

a

wages.

reduction in
Fifty billion

.,

Russia

waiting

year

by all of us working longer and
harder.

doing

By

would

now

licked

and

fellow

labor
work day.

travelers

resist

to

urging

a

Two With E. F. Hutton
*

(Special to The Financial Chronicle)

LOS

ANGELES,

government can operate with
surplus, instead of a deficit, and
by extending

the working day from

ten

hours

Calif.—Robert

A. Marshall and Richard J. Martin
have been added to the staff of E.

F.

Hutton &

Company, 623 South

without

eight hours
a pay in-

Co. Adds

(Special to The Financial Chronicle)

B. Williams has been added to

staff of Kaiser &

The total income of the country

Francisco

Stock Exchange.

,

This is not

an

offering of these Shares for sale, or an offer to buy^or a solicitation of-an
.The offering is made only by the Prospectus, r V

offer to buy, any of such Shares,

plant communities where most of of the consecrated scholar to lay
the benefits of these expenditures aside
all personal prejudice, to
.will devolve directly upon their renounce the dictates and preemployees.

own
„

conclusions
of
any
ideology, and to search, with all

conceived

,,

.

.

..

Problems Lie

Liberal Arts

in

t^e seifiess

Education

for the

devotion of

1,500,000 Shares

Galahad,

a

precious Grail of Truth.

*

Pacific Gas and Electric Company

But their power to contribute is

*

limited by the statutes

them

/

state

the

in

state

ticular

.

of the pareach of

which

incorporated,

is

laws

cast

right of

a

and

many

doubt upon
corporation to do¬

nate the

money of its stockholders
unless the probability of immediate and direct benefit to the

.

.

is .' clearly

demonstrable.
felt free;
generally to finance studies in the

donor

Longer Work Day

Par Value $25 per

Is Best Cure

For Inflation

That is why they have not
'

'liberal

arts

and

the

humanities,'

though the most difficult
problems which American enter- •
prise
faces
today
are
neither.
scientific nor technical,
but lie
chiefly in the realm of what is
even

.
'

.

,

embraced in

tion.

a

5% Redeemable First Preferred

grave

liberal arts educa¬

That such doubts should

be1

resolved, either by judicial inter- '

Stock

share

Price $25.50 per

By ROGER W. BABSON

share

of

Pointing out deflation instead

inflation followed previous wars,

Copies of the prospectus may be obtainedfrom any of the several under¬
writers only in states in which such underwriters are qualified to act as
dealers in securities and in which the Prospectus may legally be distributed.

Babson ascribes current in¬

Mr.

prices to organized
labor aided by politicians. Says

flationary

will not -"bust
country," and advocates ex¬

armament program

the

*

pretation or by legislative amend- L
ment, is, I believe, an immediate
and major responsibility of the
managers
and
share-owners
of
every corporation which honestly
'-desires to preserve free and inde-t
pendent education in America, v

:

i:

of
reducing government deficit and

without pay

increase

avoiding inflation.

:

The First Boston

Dean Witter & Co.

Harriman Ripley

Corporation

Glore, Forgan & Co.

Eastman, Dillon & Co.

;

& Co.

Incorporated

-

Smith, Barney & Co.
Most people worry

at the wrong

is

ers

the part of our private
to
inspire in their
students understanding of, and de¬
votion to, the fundamental prin¬

know I was

on

con

universities

*

■

Blyth & Co., Inc.
:■/

Lehman Brothers

Lazard Freres & Co.

Kidder, Peabody & Co.

Goldman, Sachs & Co.

equally compelling responsibil-

ity on
bility
~

as means

time; and worry about the wrong
thing. A few years ago when no
the other side—a responsi- one was fearful of inflation, readbelieve that there

But I also
an

tending working day to ten hours

Merrill Lynch,

White, Weld & Co.

Corporation

warning

Union Securities

it. In
fact, the Fred-'

Schwahacher & Co.

against

ciples of individual liberty and
opportunity which have always
been the basic source of spiritual
and economic strength in our so¬

Stone & Webster Securities

Pierce, Fenner & Beane

tinually

-

•

*

Corporation

First California Company
Brush, Slocumb & Co.

Walston, Hoffman & Goodwin

erick A. Stokes

*

of

Company

,

N

Shuman, Agnew & Co.

Mitchum, Tully & Co.

Elworthy & Co.

York

e w

,.

published in.

briety.' Rightly or wrongly, there
seems

be

to

belief that
{

a

our

:1937

growing popular
colleges and uni-

who

seeks

above

all

else

Comes."
that

to

educational indepen¬
dence in America, I want to speak
briefly on this subject.

one

preserve
'

Private

book

has

gone

no

or

inflation;
but
recently the

through ten edi-

Hemphill, Noyes, Graham, Parsons & Co.
Lee

Iligginson Corporation

Wertheim & Co.

Blair, Rollins & Co.
Incorporated

Davis, Skaggs & Co.
Shields & Company

clearly that it is in




.

Hornblower & .Weeks

Carl M. Locb, Rhoades & Co.

Irving Lundborg & Company

'

Hallgarten & Co.

W. E. Hutton & Co.

Paine, Webber, Jackson & Curtis

Sutro & Co.

Central Republic Company

Bateman, Eichler & Co.

Crowell, Weedon & Co.

October 24,

1951.

Davies & Co.

(Incorporated) '

Drexel & Co.

Hill Richards & Co.

frightened

In 1937 the cost-of-living index
their own- interests to
preserve was 103.
Since then it has risen
those fundamental
principles of 80% and average weekly earnings
freedom
upon
which Academic have risen 160%.
Now all the
Freedom
itself - depends.
They columnists are warning of inflato understand

*

Dominick & Dominick

to

hopeful that our private tions. People are now
universities do and will continue about inflation.
am

& Co.

any

to

*

I

time

paid

the book

Institutions Should

Preserve Academic Freedom

' Weeden

At

attention
Roger W. Babson

William R. Staats & Co.

book

"If Inflation

versities are not adequately ful¬
filling this responsibility.v; So, las
one

a

by me entitled

Spencer Trask & Co,

the

Co., Russ Build¬

ing, members of the San

crease.

t

i; SAN FRANCISCO, Calif.—Dan

subject—I submit
v

are

longer

draw

to

we
once

No wonder the Com¬

and for all.

munists

this

Russia

have

can

taxes can be reduced

The.truth 1S tbat tbe. Present
trend is contrary to previous eco-

our

Of course, we

the

,,

until

busted is the "bunk,"
will sometime have
business depression for

country is

be spent on Spring Street.
armaments, the cost-of-living can
be
reduced, Federal employees
Kaiser
can
continue to hold their jobs,
a

'

:

our

military preparations. To talk

about

talk.

they wish and this

require

home"

dollars

to

pro¬

trying to get something for noth¬
ing; but < if such threatens our
existence, it can quickly be cured *

government to get into
debt. The facts do not

Labor leaders

a

than

would,

equivalent to increasing

our

our

"take

more—.

longer

inflation problem and pay for all

high that the people
them, or else will

so

uphold

will

either

no

worked—this

fathers

another

is that the

now

be

duction 25%. This could solve

down

U.

the

Fear

hours

two

would

which

billion

wageworkers on the
eight-hour day. If we

stand

terrible

deflation instead

^

trained personnel; —to something that I 'would call
and
they contribute extensively "Academic Integrity" and that • I
to educational
projects in their WOuld define as the determination

-hope

cost-of-

of none the War of 1812j the Mexican War,
unlimited. j^e civil War, the Spanish-Amersubject ton-.
w„r
anri
woriH War I
we

w

taxes

cause

„

resource

to

program

cannot

tutional Liberties, I know

quality of the greatest natural
of all—the human mind?

the

in

may. be' to

equally

develop and

to

to

armaments

on

J 1
tuated for a few years and again
distinguish between increased during World War II.
ShatH *
the^n? h^nd fnd The natural thing would have
Freedom on the one band and keen for ^ to be on the decline
^ e,mC Llcense on the other again today. If it followed the
na™"
previous wars inAmong all our nrerioil, r„n,ti. course of all Revolutionary War,
precious t-onstt
ciuding the
becom^s our

go

will
"bust
the
country"; but I don't believe'this.
Bankers point to the fact that an
expenditure of $50 billion a year

de.clined
point-in
St 1933< The c°st-°f"living then fluc"

as

will

Will Bust

;

The talk

After' every great war, until
now> there has been a decline in
tde cost-of-living. -After the Civil
\yar, 1861-1865, the cost-of-living
gradually declined until 1896.

customers. v

Of this amount about $175

reasonable, the cost-of-

Reason

r

II

for 1951 will be about $275 billion.

labor leaders

the

if

would have gone
following World War II.

Lets Look at the Record

independent universities die for

.

That is why no true believer in
Free Enterprise will ever let our

meets this

prices

living

ment

ity.

that

had been

t

opinion—every American business
has a direct obligation to support
the

nomic history. Inflationary

tion! It is just like the stock mar- are due to Organized Labor, aided
ket. When stocks are cheap, as
by the politicians, reducing work¬
they were in 1932 and 1933, no
ing hours. Labor leaders yell about
one was interested in buying the
high cost-of-living and blame
them; but in 1951 when they have it on
"Inflation"; but. they will
risen 175% and the Dow-Jones, not*:tell
you the
real cause for
Average is up from 100 in 1933 inflation. This is not necessarily
to 275 today, people want to buy a criticism of labor unions. I have
stocks.
always defended collective bar¬
j am not con(joning inflation. It gaining. The fact, nevertheless,

should know, as well as you and I,
that to sacrifice these principles of
individual liberty and opportunity,
or to weaken them, must someday
result in the collapse of the very
system of Private Education that
we seek to preserve. Now let me
make one point very- clear. I am
not suggesting that we tailor our

can

adequate financial support

secure

(1555)

Chronicle

The Commercial and Financial

Lester, Ryons & Co.
Wood, Struthers & Co.

■

12

(1556)

The Commercial and Financial
Chronicle

spite the

The Gold Standard

irredeemable

drift into
tion

redeemable

of

against

and

currency,

1939-1949.

in this situation

sees

tion

to universal adop¬

way

deplores

currency were made re¬
deemable in our standard

gold

unit,

the proper
right of
our
people to control the government's
of

use

their

be

be

r

/

Our

.,

'f

.*

control

can

the

4v&m

two

the

t

de¬

(1)

IT

■

by

of the

is

why

is

the

use

by

the

I

power

inherent

in

■
K'

the

right to

demand

the

7

Jfi ' V

/-

r

that

of

7

Federal

Walter E. Spahr

this

in

pay

their

promises to

nation's

:

standard

monetary unit.
When

irredeemable currency

an

thrust

was

upon

odr

people in
deprived of the

1933, they were
right to demand that the.Treasury
and

Reserve

Banks

in

paper money

dollar. As
of the

a

control

purse

passed from

unrestrainable Federal

an

government.

The

of

power

ballot, standing alone,

may

often

to

is

their

standard gold

consequence,

people's

them to

our

redeem

insufficient

the

be and

bring

a

government under control when it
has

the

freedom, given it by an
irredeemable currency, to use the
people's purse as it sees fit. Under
these powers, the government can

corrupt the ballot and the people,
and buy the support needed while
it pursues its course of profligate

tem can be called upon

to redeem

pay,

those

in¬

stitutions conduct themselves with
much

tion

greater restraint

than

is

the

an

and

when

case

<?annot be held to

cau¬

they

effective

ac¬

counting under the freedom given
them by an irredeemable cur¬

rency. When non-gold currency is
Redeemable in gold, that monetary
Commodity of universal" accept¬
ability places restrictions upon the
amount

of

promises

to

pay

that

be issued against it. That re¬
striction is proper and desirable.
can

The

issuance

Other

of

promises

government

against

currency

to

debt,

pay,

such

as

against no
specific commodity has no limits,
or

and
such currency can become
Worthless. A currency redeemable
m

gold

Gold,

never

as

becomes worthless.

intermediary in

an

change, has the widest

ex¬

acceptabil¬

ity and the greatest stability of
any

medium

Store

of

of

value

exchange

known

to

and

man.

JI Among the consequences of
loss of control over our

our

public
purse, beginning with the infliction
upon us of an irredeemable cur¬

in

basic

gold

irredeem¬

of

fiscal

and

banks

could

government

and

make

protect

to join with others to obtain

this

across

the results
in the reduc¬

tion

in

the

Federal

gold

of

reserves

Reserve

Banks

the
and

reserves of these

obtain

institutions,

and thus would the government's
wild spending be

brought

to

the

purchasing power of our
dollar, and the development of

Oct.

by Dr. Spahr before

23rd,

of

rency should
to do so, the

Des

1951.




the

Moines,

ment

/

and

lies

be

his

our

boundaries

With

a

system

the- United

which he

selecting

our

can

signal system in

any degree he chooses up to the
full value of his property. In
1933,

the millions of golden wires

run¬

people to that
central signal system were with¬
drawn. Every individual lost his
our

power to record his

judgment and
to protect his
property against a

rapacious

government

by

con¬

verting it into gold. A basic right
of our citizens
disappeared. The
signal system in Washing¬

central
ton

was

eign

closed

central

to

all except

banks

for¬

and

govern¬

ments. The power of the

dictator,

except

controlled by the power

as

of the
ballot, was ushered in; and
it has grown in
ways too numer¬
ous

to permit enumeration.

records

of
and

the

mankind

rights

the people
over

reinstituting

Treasury at
record his judgment
monetary policies in

ning from all

himself

the

purse

redeemable

a

re¬

of this nation

public

of

by

Although

gain

private

tective
with

device

the

since

have been taken
into government
responses have

a

of

have

1933

that

we

great distance
Our

demonstrated that

irredeemable

history

respect for the
that history holds

dictatorship,

we

.

gov¬

engage

price fixing and price control,
allotments, and various other
compulsions regarding what we

produce, sell, and buy, and

may

what

an

prices—all tools of gov¬
dictatorship. We exhibit

economic

illiteracy and

a

will¬

ingness to sacrifice freedom that
suggest strongly a marked degen¬
eration among our people in what
were

widely supposed to be a
high level of intelli¬

generally

profit

gence

and

an

ability

and deter¬
freedom

our

dictatorship.

It

would

from

seem

that

seeing

we

of

freely

Those were,

throughout the
indeed, as Dr.
"happy days." He is

"with horror."

-

The way to help to end this se¬
rious throwback to practices char¬
acteristic of the all-powerful state
is for the United States
govern¬
ment

to lead

the

into what

way

should again be happier
days by
instituting a redeemable currency;

exchange; and by permitting
private enterprise and free mar¬

such

as

to

ism.

fore

of

the

step in the

ca¬

the invasion of the

principle

this

state

affairs

made

Schacht

of

with

its

has

men,

the evils of government

man¬

irredeemable

currency and dictatorship.
he
(in his "Gold For

Gerald

Duckworth

London, 1950,
ternational

day in
keeps

p.

3): ".

trade

is

.

.

All in¬

involved

permanent

a

all

Says
Europe,"
Co., Ltd.,

and

crisis

politicians

and

to¬

which
econo¬

happy

ready

out

friction

state confined itself to
eral

a

few gen¬

regulations—sees today with

horror how governments labor in
vain to restore international trade

by

a

succession of regulations and

interference.
ernment

sults

This

continual gov¬

interference

in

the

simply

re¬

damping down of

all

enterprise on the part of those en¬
gaged in trade.
The efforts of

businessmen,

formerly

concen¬

trated

solely on the organization
production and markets, are
exhausted today
largely in a
struggle against
state
bureauc¬
racies.
Artificially established
international finance
of

.

.

relations,

strictions

on

the international

re¬

ment

of

ex¬

the

pursue

same

validity. It is either

by those who wish to

what

they

planning,
lack of

a

or

a

dictatorship,
call

govern¬

manifestation

understanding of the

elemental facts involved.
Shall

Standards of Responsibility
in Government Be Lower
Than
Those Applicable to Private

Enterprise?
Institution of
eral

>

redeemable

a

rency would force

government

Fed¬

upon cur

and

cur¬

Reserve

banks the

same degree of
respon¬
sibility that is applied to people
in private
enterprise under our
body of contract law.

There is no valid defense for the
present two sets of standards. In

private enterprise, people who is¬
sue

promises to pay

to fulfill them

or

ties prescribed in

required

are

suffer the penal¬
our

body of' con¬

tract law.

But

under

our

system

of

irre¬

deemable

currency, our Treasury
and
Federal Reserve banks are
authorized to issue promises to

pay, or what pass as promised to
pay, without being required to re¬
deem them in the

type of dollhr

that

has

most

ability—except
banks

and

privilege

universal accept¬
for foreign central

governments.

without

That

is

corresponding

responsibility. It is a case of hav¬
ing one standard of responsibility
for

people

and

a

ard

of

in

private

enterprise

different, and lower, stand¬

responsibility for govern¬
ment officials. That is
government

tyranny.
We

that

if

-

need
a

to

'

remind

ourselves

government

employs an
irredeemable currency, because it

Continued

ex¬

a*4-"

to
no

continue government

through

—

under free
play of
private enterprise, and when the

has

defense

a

War

when
the
international
ex¬
change of goods took place with¬

be

path in

The commonly
advanced argument that we could
lead off until other nations

by Dr.

Germany

who, perhaps above all

same

as

those

not

planning."

of

Hjalmar

take

we

steps, other nations could

are

bourgeoisie be¬

substantially

If

pected to follow the

trade."

It is another

1914.

the course of time.

"The large-scale entry of the
government into the sphere of for¬
eign trade is only another part of
the development of state
capital¬

pitulation

operate

before

course

.

should

ourselves

Ex¬

nations of the world then and now
the present state of affairs

..

days before the first World

us.

in

ernment

American

note

in the post¬

lessons

dragged into the cesspool of

today.

as

Schacht says,
also correct when he remarks that
those aware of the practices of the

un¬

for

or

Instead of dealing with the basic
causal factor
involved, we issue
futile protests
against being
ernment

Governments

Company checks carried the

invest

as

mists fighting for breath.
Anyone
who
lived through those

currencies

no

which

pro¬

early

either do not know the

we

form,

dictatorship.

quently,

De¬

cur¬

that

consequence

mination to maintain
from government

government.

bulk

agement

other

some

without

parity rates that

maintained.

State capitalism in its

process...

dictatorship in
been

by free conversion in

kets

seen

have

another

the government as
organizer, di¬
rector, and financier of the whole

is the most potent weapon
a people have
by which to protect
themselves against Socialism or
we

ment.

We should also be able to
profit
from some of the observations on

Dictatorship

redeemable

a

also

greatest develop¬
Currencies were linked to

by withdrawing from its dictator¬
ship in international trade, travel,

cur¬

rency

at

major
to

Our Drift Into

currencies

their

and

of socialist

place it in the hands of the
people.
Revolutions have been
fought to
establish the people's
right to con¬
trol the public
purse and, conse¬

their

to

redeemable

States

of fiscal and

to

redeemable

attained

development of foreign trade
than precisely the intervention of

of

rency.

of

currency, every individual with
dollars has, as it
were, a direct
connection through a golden wire
with the central

turn

commit

domestically,

development.
gold standards

world.

of our state of affairs. Said he
(op.
pp. 43-44): "... There is noth¬

citizens who

our

as

because

was

and

well

as

exchange parities in terms of gold
all important currencies.
Peo¬
ple could travel and trade and

Communist, Earl Brow¬
der, said in 1950 about this aspect

necessary

.ex¬

of

We should be able to profit from

more

and

Nineteenth

its greatest

parities

what the

cit.,
ing

the

war

Presidential candidates will

control

That

press

to what shall

traded, at what prices, and

travel,

during

relations,

interna-

government sits at
as

the

did not manipulate standards
and

der what conditions.

cur¬

emergence

exercise influence in

will

was

reached

govern¬

our

of

use

and

Century and up to the first World
War that freedom in international

Private enter¬

international

judge and dictator

for

irredeemable currency.

who

imports,

terms of gold at

system of irredeemable

a

currency,

the

only hope for their
the

dictatorship at

Under

the majority desire

Therefore, all

next

It

one

ment.

irre¬

irredeemable

in

remove

currencies

change rates.

the

prise, which could capitalize the
infinite ingenuity of millions of
people, could then go to work to
open up trade, travel, and invest¬

<

statesman who understands what

4

world, through the

ports,

redeemable

a

tional boundaries.

currencies,

a

halt.

an
un¬
property for the individual
and ' unrestrainable
through battles to take the con¬
spending orgy on the part of our trol of the
public purse from an
government, a sharp depreciation uncontrollable
government and to

Iowa,

redeemable

country,

would be recorded

freedom

right
to
monetary use,

Association,

-

would

currency

Federal

our

of

.

have been the loss of the

*An address
Iowa Bankers

will make

we

popular vote
almost 100% in

quicksand

a

of

action; he could proceed freely, is
involved and who will lead most advanced forms is taking
Secretly, and alone—and with ef¬ them
back to the solid ground of over the field of foreign trade
fect. His action would raise a red
more than
any other field.
The
redeemability where official re¬
flag of danger for the Reserve
sponsibility replaces the irrespon¬ day of private trading between
Banks and Treasury. As the num¬
nations is coming to an
end; it
sibility of officialdom inhefeDt in
ber of such red flags increased
has already ended for the main
the use of

precedented

in

whether

Reinstitution

the mass of people have
appreciable amount of under¬

rescue

yet

actual,

Boundaries

the

jand could
not extricate themselves from the

holds. He would not find it neces¬

not

the

the

were

was

deemable

United States Treasury and Fed¬
eral
Reserve
Banks, which he
sary

become

an uncontrollable gov¬

or

between

his

stage

America;

the

international

our

dictatorship,
block
the
prospects for "one world," in any
practical sense, by controlling ex¬

industries,

concentration

is

related

Dictatorship at Our International

standing of the vital differences

his savings
judgment felt by
demanding redemption in gold of
the promises to pay, issued
by the
and

Labor

Browder, "Keynes, Foster
Marx, Part I, State Capitalism
and Progress," published
by Earl
Browder, 7 Highland Place, Yonkers, N. Y., 1950, pp. 29-30.)

Since
no

of

irredeemable

(Earl

favor.

monetary policies

Federal

our

pro¬

and

is

answer

so-called

Hitler

formal

a

in

com¬

times

much of, and agi¬
tate
for, "one world," national
planners in nearly every nation

.

if

guiding reins of national economy
in government hands is
probably
on a higher level in the U.
S. A."

our

last

is

remarkable

these

while

than

under the

obstruction

international

talk

has

certain

substantial

deemable currency. The power of
the ballot alone is insufficient to
insure the liberty of a people. The

gold unit, every
individual opposing or distrusting
the

which

source of
authority in this coun¬
try, it follows as night follows
day, that they must have a re¬

sees

of

reached

people, rather than our
government, is to be the ultimate

standard

our

History
struggles

for

one sees an

ization

the
on

that

America

in

of

recovery."

of

planners

Government, despite its national¬

responsive and responsible

our

If

can

one

to

are

agent as intended by
Constitution.

currency redeemable

our

property

rency,

it

for

fail

the

promises to

ernment

redeemable currency.

a

Were

people's
national
Treasury and central banking sys¬ gold
their

Wherever

we

fact

and
.

payments,

mentaries

question pressing

us

to serve our people well and
Treasury. Congress would be com¬
pelled to hfied a decline in the properly unless they select a man

spending and waste.
"

When

potential dictator

or

basic

subjects of

irredeemable currency
potent weapon
a

people.

a

der

redeem

whether

No

able currency. Human freedom is
associated with and develops un¬

•Reserve

Banks

futile.

most

dictatorship,

Treasury

and

been

legally employ to obtain control

*

life,

aspects,

farther

in Great Britain

more intelligent than were
peoples of various other na¬

upon

formal

gressed

no

A most

in

not

na¬

designed to save us. We
permitted a great freedom

hard

of their funds. That

use

an

dictator

j,

economic

State

Who Shall Be Master—Our People
Or Our Government?

irredeemable

an

have

against its

ballot, and (2)

of

for

One

major

changed the face of politics.
capitalism, in substance

from

governmentallymanaged economy.

government, having complete pos¬
session of the people's purse, need
be
responsive to their protests

government

by

under

currency,

Federal

vices:

people characteristic of

endless

ernment

affairs

channel of irredeemable
currency
and
through a

the insane spending and
waste, made possible and invited
by the freedom afforded our gov¬

people

of

seeking pottage through the in¬
viting, insidious, and devastating

econ¬

dictatorship.
protests, organized
unorganized, of our people

The

state

a

tions who lost their freedom while

against

restored to

them.

and

our

to

basis

It became overwhelm¬
every

of

transfers of capital—all these de¬
prive trade and production of any

high point in the decade

new

phase

was

the

government

and

would

purse

government controls of
omy

a

ingly predominant in

to be taken from us, and we are
apparently revealing ourselves to

discrimination

people in favor of foreign central banks and
Upholds free gold market with $35 an ounce

our

States, apparently
important amount of un¬

no

have

fixed price.
If

United

which the government of this

,

a

change

and. prevention

country:
leaped forward

capitalism

.

our own

governments.

leading
Browder,

our

Earl

to

the

derstanding. of what we
have
done, have joined in that throw¬

control of people's purse because

Dr. Spahr
dictatorship. Urges U. S. lead

of

one

Said

"State

with

Monetary Policy

currency,

by

in 1950, of the situation into
which
we
have fallen in this

back

an

described

Communists.

in

Currency

Executive Vice-President, Economists' National Committee

Contending public have lost

be

ly, taken possession of the people's
purse and of the people; and we

Professor of Economics, New York University,

of

should

facts, govern¬
throughout the world have
again, in high degree or absolute¬

By WALTER E. SPAHR*

;

that

these

ments

Irredeemable
on

lessons

learned from

VS.

Thursday, October 25, 1951

...

nifjs?*'

fa

on

page

30

Volume 174

Number 5058

.

The Commercial and

.

.

however, farm prices, flationary influence than have in¬
dividuals.
*
pointed out, dropped
III
sharply, while non-farm prices
The Fundamental Causes of the
changed very little. During the
Postwar Inflation
second
postwar
inflation
both
farm prices and non-farm prices
What
were
the
fundamental
have
risen at substantially the
causes of the postwar inflation?
It
same rate.
•
is usual to explain the inflation
(3) Differences in behavior of by the methods of financing the
different parts of the community: war which caused the volume of
There has been a conspicuous dif¬
adjusted demands deposits and
ference in the behavior of indi¬
money outside of banks almost to
viduals and business enterprises
treble between the end of 1939
and

What Have We Learned from

Our Experience

With Inflation?

SUMNER H. SLIGHTER*

By

as

...

.

Professor, Harvard University

Lamont University

inflation trend, Professor Slichter lays it
of money and rate at which it is spent, the

In analyzing recent
both to volume

latter

Upholds controls that

being the most effective force.

I
The

The

last

1939

to

been

one

-

Issues

twelve

ume

1951)
of the most inflationary

history

the

price level has
about

130%

and
of

the

con-

sumer

prices

more

than

85%; This rise
in

prices

has

'

much

been

creased

t

infla-

stantial

to

years

their

measured

rate

This
far

eral

What

as

rising

did

role

What

inflation?

whole

a

was

remarkably stable—

cash

iqar

hut

nne

third

Seven

hold¬

considerably

a

quantities of

larger

government bonds and smaller
quantities of cash and demand de¬
posits at the end of the war, their
postwar expenditures would have
been less and the postwar rise in

quan¬

prices would have been less,

•"j (2) The world-wide shortage of

very hard—not as
chasing goods back
short, the usual ex¬

materials and foodstuffs:

terials

prise.

and

It

foodstuffs

followed

was

by

culties of

the

limited

influences

rise

in

surpluses.

It

dropped

in

2%

about

the

same

very

briefly.

anticipated

The inflationary diffi¬
countries, such as

some

rope

•

end of

Between the

did not revive to the extent

that

had

been

civil

•

The strong disposition of
persons during the previous five
or six
years to save in the form
of
cash
and
demand
deposits:
(1)

v.

war

and political

expected.

Far East retarded

in the

Continued

1939 and the

Finally,

difficulties

on

agriculpage

Has Happened.

Let
at

last

twelve

rise in

The

years.

distinguish
the inflato notice the different

desirable

is

(1)

tion;

(2)

to

(3)

prices;
ences

different

of

to

notice

$15,000,000 3V4% Debentures

This

inflation:

March,

in

began

1951 and has lasted for six months,
The price level has drifted downward very slightly, but employment and personal incomes

continued

to

differ-

the

characterized by a large increase
in the rate of personal saving. As
I write these lines, it looks as if

parts of the community.

the upward movement of prices
will soon be resumed because the
be future prices of commodities have
been advancing for two months,

(1) The phases of the war and
inflation: Five principal

;

postwar

phases of the
distinguished:

inflation

may

(a) Wartime inflation from 1940

^ank cred|t .is expanding, con-

the cash

This period was char- sumf credl* is increasing,
acterized by a rapid increase in surplus of the Federal government
the quantity of money and a sub- ls a thing of the past, and perstantial drop in the rate at which s0"aI incomes continue to grow
money was spent. Between
1939 whlle the .o^P"4
consumer
and 1945 the quantity of money S°ods remains about the same.
increased nearly three times as
(2) Differences in the movefast
as
physical production. In ments of different groups of prices:
this period the
wholesale price The movements of non-agricullevel advanced about 34%. The tural prices and agricultural prices
V-J
Day:

to

of

great

increase in the volume of
not in a fundamental

money was
sense

the

cause

of

an

increase in

have been quite different during
several phases of the inflation,
During

the demand for goods. On the con-

trary, it was the result of an increase
in the demand for goods,
The money was
the

.

created to finance

expansion in demand.

.

the
,

,

war,
.

,

.

farm
.

prices
.

,,

,

non-farm products increased less
than

25%,

inflation in

*

An

fore

from V-J Day to J gnu-

address

the

Iowa

by Professor Slichter beAssociation, Des

Bankers

Moines, Iowa, Oct. 22,




1951.

'

The Company
these shares

as

Subscription Price to Warrant
Prior to the

Cumulative

'

During the
1946

and

post-war

crease

expiration of the Warrants, the several Underwriters may
Preferred Stock at the prices and pursuant to
conditions set forth in the Prospectus.

-

_

.

.

- .

- •

.

During

prices.

farm
,

„

,.

,

.

.

•

,

_

,

the

first

.

t <

_

Underwriters

as

may

,

•

Lehman Brothers

Goldman, Sachs & Co.The First Boston Corporation

BIyth & Co., Inc.

-

.

Smith, Barney & Co.

Kidder, Peabody & Co.

Stone & Webster Securities

Corporation

*

i

October 25, 1951.

;

obtained within any State from such of the
regularly distribute the Prospectus within such State.

nQn.

period of adjustment during 1948

•

offer shares of
the terms and

of the Prospectus may be

1947, prices

faster than

slightly

Holders $102 per Share

Second

t

A copy

and Without Par Value)

is offering to the holders of its Common Stock the right to subscribe to
set forth in the Prospectus. Subscription Warrants expire at 3 P.M.,
Eastern Standard Time, on November 7, 1951.

neardy doubled, but the prices of

W The first period of postwar 0f farm products continued to ininflation

(Convertible Prior to November 1, 1961

second

This

grow.

Second Preferred Stock

104,533 Shares $4.25 Cumulative

have

interruption to inflation has been

in the behavior of different

accrued interest

Price 100%% and

of

groups

due October 15, 1976 4

The second interruption of

(e)

the different phases of

behavior

contin-

spent

was

money-

during the

has happened

prices has occurred at an uneven
rate and twice it was interrupted.
It

money

Continental Can Company, Inc.

ued to rise rapidly and during the

begin by looking briefly

us

what

solicitation of any offer to buy securities.

made only by the Prospectus.

New Issues

second half of 1950 there was
also a rapid increase in the quan-

of What

A Brief Survey

offer to sell nor a

an

war

which

i

neither

The offering is

(d) The second period of postinflation: This inflation began
fected the economy? What light about the beginning of 1950 and
does the
experience of the last was moderate until the beginning
twelve years throw on the probfighting in Korea. It reached a
lem of controlling inflation?
peak in March 1951. The rate at
II

This announcement is

be

took

influenced the rise France, caused farmers to hold
prices between 1945 and 1948 foodstuffs off the market or to
are
worth calling attention to. I use grain for animals. Trade be¬
shall comment on each of them tween eastern and western Eu¬

In short, corporations

period,

the

soon

—

prices? Why was the inflation so
decisively interrupted in 1948 and
1949 and again in the spring of
1951? How has the inflation af-

sur¬

agricultural production

restore

in Europe.

general conditions, among

a

The
ma¬

that

would

longer than had been
to

raw

expected

was

hostilities

of

end

of

shortage

in

below

much stronger in-

at which personal

ings of cash and demand deposits
turned over. Had individuals held

was

Jn

to

the many, that

above 1945butone-third below
a

was

rate

world-wide

1939.

over,

began

and

there

the

however, in¬
spend their
demand
deposits and
a considerable rise in

was

war

dividuals

raw

in

1939 to $41.6
1945.
After

December,

hard

19f l°JT°

changes
ocplay in causing the rise in curred
in price relationships, pre-war.
prices? Who did the buying that prices of farm products were fall- have been
pushed up prices? How was the jng—they dropped over 22% bebuying financed? Why was the tween January 1948 and December
rise
in
prices
not considerably 1949
bUt
non-farm
prices regreater than it actually was? What mained
about
the
same —they
important

though

costs:

in

chasing goods
it

a

government securities did in¬
enormously — from $5.7

the

money.

as

deposits. As

crease

billion

the

securi¬

fact, personal holdings

of

billion in December,

chasing goods—

as, upon

a

smaller proportion into
demand

and

matter

During most of the
inflationary period money was not
tity of.

price level as $3.93 in 1950—a considerable rise

years the

well

a

of

how rapidly money is

upon

spent

per¬

place

to

government

into

cash

price level obviously de¬

pends

fcom $5J2 in

fundamental questions. of two
the basic nature of the

was

was

money

for the

how¬

individuals

savings

surplus. Nor does it explain how
hard

war,

government

the

ties and

money

showing

was

the war.
limit the

larger proportion of their wartime

budget of the Fed¬

government

helped

prices after the

suaded

explanation is correct as
it goes, but it is by no
complete. It does not ex¬

as

means

(c) The first interruption of in- „Aeue
no ;n
/lation-the period of stability and
My remarks will deal mainly mild recession from Januarys 1948 1939 to $2.69 in 1945 and rose to
With the period since 1945 and to December, 1949: For a period $3.23 in 1947, $3.70 in 1948, and
few

much

was,

have

had

ever,

chasing too few goods."

°f wholesale prices increased by then rose to $15.00 in 1947, $16.10
57%. The rapid rise in prices dur- in 1948, and $14.90 in 1949—far
this period was made possible above pre-war. Expenditures of
by an increase in the turnover individuals 0n consumer goods per
of money.
■
aollaI. of cash and demand de-

future?

near

"too

would

rise in

physical output increased

expression

cash and de¬
of course,

of

deposits

anti-inflationary during
It

prices is explained by the familiar

by

1948: In this period the vol- have increased their rate of spendof
physical production in- ing far more than have individ-

guide policy-making today and in
the

holdings

mand

planation of inflation does not
explain
the
process
by
which
prices rise, why they increased as
much as they did, and why they
did not increase faster and more
than they did.
*

from the sub-

twelve

last

the

a

—

in¬

deposits

$11.4 billion to $45.7

billion. This large growth in per¬
sonal

by about 63%. Hence the rise in

was

be learned

can

Prof. S. H. Slichter

of

spending

of

ume

in¬

ratio of their expenditures to

in
W h

substantially

have

the
their
holdings of cash and demand de¬
posits. Corporations, however,

of

'

years.

individuals

ceased and the

greater
than
is
likely to

tion

and

justed demand deposits increased
about 11 % between the end of

The wholesale

index

creased from

and the end of 1945 while the vol¬

running a surplus, prices ad- of cash and demand deposits
vanced rapidly—far faster than dropped from about $11.80 per

States,

risen

tions

personal holdings of

demand

and

'

Cash outside of banks and ad- posits faster than in 1939, whereas
individuals have been spending
their holdings of cash and demand
1945 and the end of 1947- The deposits more slowly than in 1939.
period of post-war inflation was Since the holdings of cash and
accompanied by a surplus in the demand deposits by corporations
cash budget of the Federal gov- have changed little since 1945,
ernment. The surplus was partic- one can obtain a reasonably good
ularly large in 1947, when it was measure of the disbursements of
$5-7 billion. Despite the facts that corporations by their sales. Measproduction increased faster than ured in this way, the disbursemoney supply and that the budget ments Of corporations per dollar

of the

United

in

cash

have

creased faster than the quantity uals. For several years corpora- plain, for example, why the vol¬
ume
of money continued to in¬
of money—though the rise in the tions have been spending their
supply of money was fairly rapid, holdings of cash and demand de- crease even after the fighting had

(from
have

years

September

periods

ary,

of 1945,

end

1949,

I

during the period of postwar in¬
flation. Since 1945, both corpora¬

until economy is ready to produce more civilian
goods. Stresses changes in distribution of monetary supply as
inflationary factor, and points out credit and fiscal policies,
even
though drastic, will not, because of rapid turnover of
money, prevent moderate price advances during boom times.
Predicts long-run rise in prices due to labor union pressure.
stabilize prices

13

(1557)

Financial Chronicle

'

'

Harriman Ripley & Co.
Incorporated
,

Glore, Forgan & Co.
White, Weld & Co.
f

■

■

■

'

32

I

14

■t

MH

'X

t

rf

1»'!

**.>*

»tf

4f

tional economy.

In the first three
capital require¬
ments
were
by .far
the more
important.
This was not true in
the 1930-1945 period, but since the
end
of World War II we have

By AUGUST IHLEFELD*

President, Savings Banks Trust Company

.Mr, Ihlefeld lists

banks investment
'policies: (1) lower proportion of government securities hold¬
ings; (2) expansion of mortgage lending; (3) larger holdings
of corporate and tax exempt bonds; and (4) purchase, on
limited scale, of common stocks. Sees need for further build*
ing up of reserves, and larger income returns so as to permit
higher dividend payments and thus encourage thrift.
major shifts in savings

as

Mutual

savings banks serve the
economy
in three main ways.
JTirst, they stimulate and facili¬
tate thrift
by providing a safe,

a

this

omy

of

character

munerative

medium
the

for

invest¬

ment

indi¬

of

vidual

savings

—the

American

the

underwent

major

a

econ¬

change.

activity tended
relatively speaking,

to

stagnate,
while a great expansion occurred
in

role

economic

the

Fed¬

the

of

This trend

eral Government.

was

savings
account.
It is

clearly reflected in savings bank

questionable

after

wnei

u

considerable

part

the

of

existing

billion

$20

mutual

of

portfolios.

the

By

end

1939,

of

decade of reduced

building
activity and deflation of realty
values, mortgages constituted less
a

than

half of savings

bank invest¬

United States Government

ments.

bonds had assumed a

leading place

ings bank denosits

Ihlefeld

among bond holdings, accounting
for three-fifths of the total.
Cor¬

would

porate

been

smaller part

have
saved

at

banks

had

if

all,
not

mutual

sav¬

savings

available

been

to

Teceive and conserve these funds.

bonds

The

Secondly, mutual savings banks
a wide variety of per¬
financial

sonal

depositors.
States
ited

services

life

make

cost,

orders

cial

United

savings bonds, provide lim¬

amounts of

low

sell

They

their

to

available

advice

to

money

finan¬

objective

give

and

at

insurance

of

persons

small

who do not have access to
sources of information and

means

other

guidance.
In the

ings

third place, mutual sav¬

banks

furnish

long

-

term

private enterprise and to gov¬

ernment

through investment
the savings entrusted to them.
This

third

is

service

of

particu¬

larly important to a dynamic,
growing economy like that of the
United States.

savings

bank

vestment

It is this phase of
operation—the in¬

policy of these banks—

that I will discuss today.

;

Investment Policy

Changing
The

tual

investment

policy of

mu¬

savings

banks must .con¬
stantly be adapted to our chang¬
ing economy ? and
to i changing
national policies.

Hence, we find
shifts in the make-up of
savings bank. investments taking
place over a period of years.

major

At

banks,

tions.

to

a

in

a

in

sav¬

institu¬

patriotic duty

Treasury

obligations

maximum extent to help fi¬
the

nance

Not

shift

for other

as

It became

invest

to

drastic

only

huge
were

in

vested

wartime
new

deficits.

deposits

government

but other investments

in¬

securities,
were

liqui¬

dated and the proceeds reinvested
in governments.
By the end of

1945, two-thirds of the deposits of
savings banks were in¬

the

beginning of this

cen¬

vested

in U.

gations.
a

little

Government obli¬

S.

Mortgages accounted for
than

more

25%

and

cor¬

municipal bonds 7%.
savings banks, like
other
financial
institutions, de¬
voted their energies and resources
porate

The

and

mutual

to

financing the Treasury during
this war emergency period.
~
Since

the end of the war, the
savings banks have again
sought to serve the private enter¬
prise sector of our economy, which
has undergone unprecedented ex¬
pansion.
In particular, they have
mutual

concentrated
home

and

thereby

on

other

the

financing of

urban

building,

in vested, in

was

the

of

the

war.

U.

earning
ment of

banks,

enterprises,
to

Government

still

to

sources

of demand

the

home

Mutual

savings

traditions.

past practices
chief lesson

The

taught by the past is that we
expect changes in the future.

must
In

.

adjusting

vestment

savings

policies

tions and to

new

safeguard the strength and liquid¬
ity

these

of

The

available

is

supply of investments
institutions

financial

to

now

institu¬

thrift

great

much

very

and

greater

more

varied

phase
Both

of our financial history.
public and private debts

have

been

scale.

an

on

Just

is

so

diverse, mutual savings
institu¬

banks and other financial
tions

un¬

because

investments

of

choice

wide and

earlier

any

expanded

precedented
the

in

than

much

are

able

better

securities,

than half of deposits.

against

that

over

•'

to

The

larger

it

tant

c

of

bulk

investments.

avaiF-

Today,

the

debt is larger than all
other types of long-term indebted¬
public

the

and

and

of

which

we

have

the issues

as

International
and

Bank

for

Development

public housing authorities
were

not

the

re¬

even

in

equities, in

th^' emergence

enjoying

dreamed of

consequence

of corporations

size, financial strength

a

(1) Safety.
(2) Liquidity.

helped to satisfy both these
demands with the savings they

than

possess

Mutual

the

proportion
to

savings

of-

Mutual savings billion mark.
To summarize savings bank in¬
mortgage loans in¬
creasingly attractive during the vestment policy during the first
first three decades of the
century, half of the 20th century, one could
and competition among investors
say that in the first 30 years mort¬

for

found

these

loans

less

was

than for bonds.

As

a

severe

result,

we

find that in 1930 more than 60%
of

savings

vested

in

bank
real

funds

were

in¬

estate

assets.

been
or

The

of long-term
on

important

government
be

tion.
is

But,

securities

ernment

deposits
of

and

peace

relaxation

a

the

enterprise
economy.
With

private

the

of

*An

address

by Mi*. Ihlefeld before
England Bank Management
Conference, Boston, Mass., Oct. 19,1951,




dislike

inter¬

national tension, government bond

holdings of mutual savings banks

lending became increasingly
important, while financing of

gage

-

term
banks
de¬

accounts

preciate in price, however tempo¬

in

decline

the

rary

market

the

may be.
So

long

at or above

the Federal Reserve
the

for

case

this

of

bonds
by

government

as

pegged

were

a

par

banks,

as was

before

decade

this type of
investment enjoyed an extraordi¬
nary degree of market stability.
This is no longer the case.
Gov¬
March

year,

several

declined

bonds

could gradually decline to

a point
they constitute a quarter of
deposits.
They would then still

ernment

points below par during the first

be

decline again now that the

larger proportion of deposits

a

than

was

own

view

the

is

in

case

that

1939.

such

a

My

propor¬

tion of non-risk investments would

savings

pursued

banks have
policy in

conservative

a

the selection

of risk assets.

of the bonds held

are

Most

of the high¬

est rating.

A large proportion of

mortgages

held

indirectly

are

backed

by the credit of the U. S.
Government, through FHA insur¬
ance

or

VA guarantees.

The rest

of the

mortgage portfolio consists
largely of carefully selected liens,

enjoying
zation,

regular annual amorti¬
single and
multiple

on

part of this year, and they could
Reserve banks are no

mitted to

Federal

longer com¬

rigid market stabiliza¬

a

tion program.

%

However, with a public debt

of

billion and Treasury
likely to become
necessary again in the foreseeable
future, the wide swings in interest
rates and bond prices of earlier
$250

over

deficit financing

decades

are

ness

not

likely

to

occur

And at times when busi¬

again.

recession threatens or occurs,
is

there

every

reason

expect

to

the credit authorities to return to

policy of relatively easy money,
they did as late as 1949.
Government
bonds, therefore,
should enjoy a relatively high
a

as

degree of market stability over a

dwellings built mainly for middle-

period

income

families.

no

reserves

are

possible

future

losses

these

reserves

Each

these 'factors

of

requires

careful analysis.
The Safety Factor in Savings

Bank

gages and

In

being set up against

reached

considerable

in many

Investments

addition,
on

mort¬

have now
proportions

I

define

institutions.

ital

tending investment.
The

cash

which

the

authorities .designate
in character are U.
ment

funds

19%,

only type of asset outside
regulatory
as

non-risk

S.

Govern¬

securities.

as

mately

risk

to

assets

compared with

17%

for

all

exceeds

approxi¬

commercial

These statistics add up to a pic¬
ture

of years.

of

great reserve strength in

Although they

longer have a rigidly pegged
market which puts a floor price

of par

under them, some Federal
support is reasonable to
anticipate in declining markets.

Reserve

More attention
sues

may

to selection of is¬

spacing of maturities
be in order for banks that
and

want to avoid the risk that

bonds

have to be sold several points
below par to meet a need for cash
because of deposit withdrawals or

may

to make attractive alternative in¬

that become available.

vestments

Sucn factors

banks.

as

approaching eligi¬

bility for commercial bank, in vest¬
ment

could

lessen

the

risk

of

They
are
in position to assume addi¬
tional credit risks as opportunity

market depreciation for particular
issues at certain times.

offers.

market

our

mutual savings banks*

,

Needless to say,

they will

At

most, however, the need for
stability is limited.
Sav¬

not do so unless the added returns

ings

offered

rising every year of this century
except four, despite
the great
changes in economic conditions

amply justify further risk

assumption. '

\

"

,

,

The Liquidity Factor

lending expanding .rapidly vary from negligible, as in a
Receiving deposits which are. in
lending to government slowly triple-A bond or an FHA insured fact if not in name, withdrawable
declining in relative importance. mortgage, to great.
on demand, mutual savings banks
and

bond

see

invest¬

long
Also,

where

;

Regardless of
market fluctuations, it is held that
government was a minor factor. there is no
question that the
In the 15 years 1930-1945,
private Treasury will pay these securities
lending contracted while lending promptly whenever they* mature.

gage

to

liquid

bonds.

government

(4) Reasonable yield.

of

their

for

particularly

decline

financing

to

the

of

will

deposit

to make attractive

or

ments,

savings banks devote

a

as

invest¬

meet

investments, they are
in the stability of the

interested

gov¬

banks

their

to

market

the longer run, it

over

order

alternative

would

probable that holdings of

savings

of

some

in

withdrawals

to combat infla¬

way

;

Stability

mutual

liquidate

of

buyers

net

standard.

find it desirable at times to

ments

again

may

bonds.This

sound

a

may

has

resumed,

are

minimum

Market

deficits due to
that offerings

terms

bank

savings

mutual

safety,

Because

so

savings banks

become

of

possess

In terms of liquidity, as well as

se¬

non-

as

bonds to institutions

attractive

mutual

rated

In the next two

heavy
spending

measure

not

reasonable

proportion

incur

ury

defense

e d

did

today

should the Treas¬

years,

i t

m

they

ways.

banks

are

declining.

three

-

portfolios today have a consider¬
able margin over and above any

deposits in U. S. Government

^

mortgages.
The rest was invested
mainly in to government came to the fore
Other assets are considered to
railroad and public utility bonds. »s t^e main outlet for investment
involve a measure of credit risk,
Holdings of Federal, State and funds.
Since 1945, the trend has and so are
designated as "risk
municipal obligations constituted been reversed again, with mort¬ assets."
The degree of risk will
the 21st New

.

of

impor¬
prepare
for

have invested nearly half of their

risk

1 i

a

liquidity

more

in these three

curities, which

VA

sec-,

a

for FHAguaranteed

before.

up

fourfold.,

banks

exists

mortgage loans, so that such assets

be

assets

(3) Market stability.

bonds have been exn
panded as record plant and equip¬
ment expenditures have stepped

Moreover,

mortgage loans.

source.

The ratio of
safety in connection capital funds to deposits of mutual
industrial capital -needs, al¬ with
savings bank investments as
savings banks is better than 11%
had
collected
from
more
than though corporate bonds are still assurance that
obligations held by for the entire
system, as compared
not - much more than 10% of the
5,000,000 individual depositors,
a savings bank will be
paid in full with less than 8% for all com¬
i By 1930, d e p o s i t s in mutual total of savings bank deposits, when
they mature. It may also be mercial banks. The ratio of
cap¬
savings banks had expanded more which now is well past the $20
referred to as the credit risk at¬

banks

governments provide
additional liquidity, as do

current amortization payments on

that

•

of

High-grade bonds

than

some

loss

beginning of the century.
clearly safeguard the overwhelm¬
Moreover, there is growing senti¬
ing strength and safety mutual
ment for the investment of a lim¬
savings banks enjoy today.
ited
percentage
of
institutional
Mutual
funds

was

than this in the first three decades

losses

the

at

even though
actually far lower

safety level,

ratio

other

future

becomes

sector

Reconstruction

today. .Around a 30% ratio
should be regarded as an appro¬

overall cush¬

an

held, the

future losses

needs

of

private area
become more in¬
sistent.
Cash and
governments
are well over half the deposit total

adequate

non-risk

of

risk assets

new

available such bonds

as

any

proportion
government

should long-term

even

of the century.

of

in

of-the economy

set aside reserves.

railroad

combined,

possible

invested

credit demands of the

priate

arise, from whatever

we saw,

ness

absorb

liquidity is perhaps

substantial

a

assets

securities,

its

aside adequate

capital funds

Early in the century, as

able

of

a

hold

(3) Maintenance

real estate mortgages and

less

Holdings of

to

dividual special requirements,

the

keeping

earn

risk assets.

on

further

formed

The need for

Careful selection.

adjust their portfolios to their in¬

bonds

pay

to

securities

the main sources of liquidity.

paramount among the reasons for

dividend rate
deposits, to
attract new deposits and to build
up
a; surplus .for contingencies.
But sound investment policy calls
for minimizing possible losses from
risk assets through:

in¬

bank

to new condi¬
national policies

they develop, it is essential to

as

building and the rhil- corporate

industries.

road

for

were

as

particular

any

and

sav¬

The chief

largest single asset of mutual
ings banks, now amount to

long-term credit at the time

conditions

new

to

life insur¬

as

companies.

ance

Cash and government

adjustment adequate to provide sufficient in¬
they arise, creased income out of which to

for

rather than doctrinaire adherence

the

loans, and the rest in
bonds, mainly railroad obligations.

of all business

as

calls

to

assets

considerably higher de¬
liquidity than do such

a

of

financial institutions

are

acqhire risk
bank
must

savings
risk

require
gree

Careful selection of risk assets ondary market
manage-; requires that the
yield differential, insured and

Sound

assets.

S.

mortgage

enough

may

future

A
in

adequate

ion

in deciding on
distribution of their

not and will
banking.
A

the private sector

serve

assets.
invest

(1)

been

is

risKless

(2) Setting

helping

end

bank, to

bank managements

the

be

serves

have

as

banking

of the economy, must

Asset

to
relieve the and stability of earning power
acute shortages left by the war.
that could hardly be conceived in
Savings
banks
have
thus
co¬
1900.
operated wholeheartedly with the
Mutual savings banks have four
national policy of relieving the
chief objectives to guide them in
housing shortage through stimula¬ the selection of investments. These
tion
of
private home building. are:

since

Good
never

the
past changes in savings bank in¬
vestment policy, they are of lim¬
ited aid in guiding mutual savings
Interesting

tury, the mutual savings banks of
the country held something over Mortgage portfolios have, in con¬
$2 billion bf deposits. Just under sequence, been more than doubled
half of this total

new

a

Distribution

mutual

credit to individual home owners,
to

ings

wit¬

years

policy for mutual

'

perform

II

raise

to

of

Guiding

Principles

tions.
War

another

investment

the

of the bond portfolio.

World

nessed

formed

now

because

ac¬

economic

Private

have

not

budgetary
surplus of $7 billion in the five
fiscal years 1947-1951.

1930's, the

the decade of the

In

did

ment

money

still limited in scope.

were

convenient, li¬
re¬

the

when government

era

tivities

quid

and

a gratifying revival of
private segment of the econ¬
omy, while the Federal Govern¬

witnessed

lesser part of the bond portfolio

in

private

decades,

Thursday, October 25, 1951

.

'

No
financial
institution
can
These changes have corre¬
sponded with the changing rela¬ serve the private sector of the
tive roles of the private and the economy adequately without hold¬
government segments of our na¬ ing sizable amounts of risk assets.

Changing Investment Policies
01 Mutual Savings Banks

.

.

♦' r • '-r

1

.

August

.

The Commercial and Financial Chronicle

(1553)

bank

that have
50

years.

deposits

have

been

ocqurred over the past.
It may reasonably be

Continued

on

page

23

.Volume 174-

Number 5058

.

(1559)

from

5

page

Our Economy Not

Observations,

Depression Proof

Advocates of economy in

Asserting only

(20%),
(27%).

\

Among the issues
dividend

International

•

Tobacco,

American

including

payers

by wise action

,

,

seemed that the laws of the busi¬

peak reached in the 1929 boom, there is,
31% in the D-J Industrial Average.
Nevertheless, approximately 400 listed issues stand above their
1929 highs, of which the following small sample is typical:
the

all-time

of the present, a net fall of

1929 High

Present
Price

*

(Adjusted)

Monsanto

Minn.

1925-28.

■

21

44
43

we

57
55

The actual experience

+>+•.'

.+

.

■

descend to old

levels, and

Aircraft

Auto

'

'

80

+..

Building Material
Chemicals

86

_

+

Drugs

+

33

.

—

Electrical Equipment

175

5+,

55

.

,■+ —23

84

.

Instalment Finance

.

23

Insurance (Fire & Cas.)___

•++

—52 +
—

46

—

9

3

2r

+ 16+.
'

Liquor

421

:

Machinery
Metals, Nonferrous-

+ 26
+ 42 i
..

6*

—

—20

+ 26
+ 16

—19

+ 53

237

+36

73

—35

+50<
+ 10

151

—43

4-80

47

Equipment

Oil

Paper

4

—25

67

Office

________

Retail Trade

Tires__

Rubber Goods and

—19

Steels

+ 15

+

284
-

Avg. Dow-Jones Industrials

+ 30
—46

-29

which government has not yet

one

employed and that is the cutting
out of all non-essential spending
and lending."

But

levied.

raise

taxes

because

production

increased

costs

and

in

tive

Inflation cannot be per¬
can
only be pro¬
longed and the longer it is pro¬
longed the more severe will be

the inevitable, reaction.

fighting inflation as are
in government spend¬

depreciate our money to such an
extent that free enterprise will be
destroyed and we will become en¬
slaved
in
the very
totalitarian

against which
we
are
In other words, if we
are not
careful — if we do not
have wise leadership — inflation
will make a mockery of all of our"
real efforts to
achieve freedom

system

struggling.

and

peace

as

are

men
an

open

+22

The

«+
test

severe

to

which

raises

taxes

without

non-essential

all

like

free

to

buy and

sell

market there will be

a

require
part of our
people.
But sacrifices alone are
not enough.
We must also have
statesmanship in public office and.
a return to
old-fashioned morals.

great sacrifices on the

eliminating

expenditures, it
a fire ex¬

determination
chaff

in

of

warrant anticipa¬

Donnell

ciation,

before

St.

-address

an

the

Louis,

by

Mr.

Mc¬

Gas Asso¬
17, 1951,

American

Mo., Oct.

to
strip out the
government. It is esti¬

unprecedented in war or peace—
fall

will

Syndicate Reports

fireman with

$3j/2

billion short of an

syndicate headed by Phelps,
& Co., Lehman Brothers
and Blyth & Co., Inc. which pur¬
chased $111,920,000 New HousingAuthority Bonds reports a most
satisfactory response to the offer¬
ing, orders having been received,
in excess of $220,000,000. (Further
The

Fenn

details of the underwriting appear
on

page

20.)

t.: •

-

,v

Joins Waddell & Reed
(Special to The Financial

KANSAS CITY,

Mo.—Orville E.

Scotten has become
Waddell &
more

affiliated with

Reed, Inc., 1012 Balti¬

Avenue.

'''+••+-+++++•+

''SECURITY TRADERS ASSOCIATION OF NEW YORK
The

Security

.-.TEAM

-

buy these securities.
*

,500,000

Wisconsin
Association

Traders

•

:

as

-

of

New

York

.

+

+

•

.

Bonds, 3 ^8% Series due 1981

1

.

Points

Dated October 1,
1

-.

.Kumm1

Michigan Power Company

First Mortgage

(STANY)

of Oct. 19, 1951 was as follows:

24
20

(Capt.)VGehegan, R. Montanye, Krassowich, Manson—. ~
iLeone (Capt.), Tischr, Pollack, Nieman,, Bradley
-Burian (CaptO, Siepser, Gronick, Growney, Kaiser
:
Mewing. (Capt.), G. Montanye, M. Meyer, La Pato, Klein
+
Krisam (Capt.), Gavin, Gannon, Jacobs, Murphy

20

.Goodman (Capt.), Weissman, Farrell, Valentine, Smith

1951
1

*

Due October 1, 1981

:

-

.

-

v

19

Serlan

(Capt.), Gold,

Krumholz, Young,

Price 102.31% and accrued interest

20
20
19

Gersten______

.Hunter (Capt.), Craig, Fredericks, Weseman, Lytle_

18

-Donadio

15

(Capt.), Rappa, O'Connor, Whiting, Demaye

H. Meyer (Capt.), Swenson, A. Frankel,
Bean

200 Club
Leone

r

'
204

+

5

—

HALSEY, STUART &. CO. INC.

<

Walter Mewing
s ■




11

Point, Clul>
Julie Bean

Wilbur

be-obtained from the- undersigned.

12

Wechsler, King___

(Capt.), Lax, H. Frankel, Werkmeister, Reid~

;

Copies of the Prospectus may

12

Greenberg (Capt.), Siegel, Gohen, Sullivan, Coccoli

Krisam

Willie Kumm

October

24,1951

>

Chronicle)

++++

NSTA

'Bowling League standing

this

is being put will

Nation

of market trend.

++: +

;

for the individual and

world.

an offer to sell or a solicitation of an offer to
The-offering is made only by the Prospectus.

.

»

great danger facing this
Nation today is that in the proc¬
ess of rearming ourselves we shall
The

reductions

This announcement is not

'

In fact, it

-

petuated—it

Increased taxes, to be sure, must
be

appear

the

•

and downs in business. The mated that the revenues of the
way to keep prices from Federal government in this fiscal
falling/is to keep them from going year, under the new law about to
up and. the only way to do that be enacted, will, for the first time
is to take the freedom out of free in the nation's history, exceed the
enterprise, Some of our eco¬ equivalent of a billion dollars a
nomic planners, of course, would ?' week, at an annual rate. The total
be willing to do just that in order Ms expected to run around $65 bil¬
to achieve their goal.
The only lion for the year. And yet we are
way to prevent a severe deflation told by our leaders in government
that this gigantic sum—a revenue

Surely the actual record of stock price behavior clearly dem¬
onstrates insufficient? intra-market uniformity to

set

I say that is because under
a-capitalistic system-the only-way tinguisher in one hand and a
you "can- eliminate the - business flame thrower in the other. +.
cycle- is to eliminate freedom- of
The economy record of govern¬
enterprise. In a slave state there ment to date is far from encour-*
are no business cycles, but as long
aging and indicates a total lack of

*Digest

tion

to

only

—10

+41

unwilling

seems

ups

+ •/'+

5

Textiles

Tobaccos

it

example. The most effective *.
method of preventing inflation is
an

is

in

+ 46

82

266

Motion Pictures

s

2

—

123
35

-

In fact, I hope we have
we never do.
The

reason

+ 23+
—

which

it

that

and

not

.

Foods

is

ourselves pleas¬
profitably out of any

before

economy.

+26

—26

++

negligible.

that the present
Administration is trying to per¬

would

I' do not think that we ing) If ill its endeavor; to control
depression-proof fires of inflation the government

sonally,

4

been almost

have achieved a

—34

+

the

It

rising standard of living, unin¬
terrupted by business cycles,; Per¬

+33

;

6

again.

thing

(2) urging our people to purDefense Bonds and practice
and. economy,
virtues in

degenerates, prices, they have an inflationary
into depression—that with sensi¬ as well as deflationary effect and,
ble planning we can have an ever- therefore, are not nearly as effec¬

—29
—

since

hearing

inflate

to

recession

0

VO

—24

-

been

chas

thrift

thing of the past—that we are

antly. and

'

22

.

______

Containers
^

+

16

of

sort

going

—13
—

remember

period

postwar
have

we

us

prophecies turned out.;

this

In

+/."+ +

*

Most of

over.

1945

+ 37 +

—29

.

101+'

Equipment

Banks

+

113

.

Wm. A. McDonnell

days

these

same

\-';?+35%:;
++•

2

+

never

depression

how

War

—25%

we

the

were

Oct. 17, T>t

484

::

Automobile

of

June 21. '50-

May 1, '42

+ + 24%

Manufacturing

Air Transport ;

that

a

Period; Sept. 1,'39-

1945

and

from

e a u s

being said that in this new age of
economic planning depressions are

'Arsenal of Democracy'

1939 Through

eco-

;: pla-

c

would

Korean.

Dtfrlng World'War IIi-——---

Entire Period

i

tion

inflation.

business is the fact that we
had ten years of unin¬

now

terrupted inflation in this country

new

policy would have.

far, however, the reduc¬
in
such
expenditures has

Thus

petuate rather than put an end to

have

it

policies have the opposite effect.
In fact, about the only- important
anti-inflationary policies the gov¬
ernment has are (1) raising taxes,

t

CHANGES BY INDUSTRY GROUPS

STOCK PRICE

dur¬

and, while government gives lipservice to curbing and putting an
end to this inflation, most-of its

which

in the markets surrounding the Second

pay-as-you-go

To do

that

ed

the Korean "tepid War,"

overlook the tremens
psychological effect upon the
stability of the dollar which a

dbus

wise

on

compared

in my

pe¬

said

•n o m

demonstrates the highly
irregular impact on the market resulting from important external
events. The appended table shows these non-uniform effects within
a
single situation, as well as the divergence from situation*
to situation.
Additionally substantiating the*;latter conclusion
was the comparative action in the First and
Second World War
markets (for a detailed analysis cf. "Analysis of Wartime Stock
Market Behaviorby George F. Shaskan Jr., and A. Wilfred May
in the "Commercial and Financial Chronicle," July 13, 1950). .

World War and

so.

small

is

total budget

swings

had reach¬

•

;/+++'+•'+

Crazy-Quilt Since 1929 Peak

*

deficit

ing the up-swings so as to cushion
or
modify the down-swings.
What is worrying many of us

of

when

was

150

Union Carbide
Sears, Roebuck

.

++^'V+++''

"

it should endeavor to do

responsibilities.
billion
to the

Those who assert that a $3

cycles, and

this, brakes should be put

That

the

riod

business

of these

by

the wide

take

can

without sacrificing essen¬

international

inflation, for

Government

other.

action

severe

a

at

government services and op¬
erations or impairing the rearma¬
ment effort or the meeting of our

is but the counteraction of

one

out

in

period

was

56

"

'3

or

The

was

the

Amerada

nullified

been

other

first

'

1

51

10

+

b y

45

7"

Honeywell

Abbott

...

had

forces,
w

when

periods

counteracted

94

27

Minn. M. & M

the

cycle

ness

31

13

May Department Stores..

the

two

seen

avoid

is to

it

have

out of Con¬
record that econo¬
least twice the $31/fc
in and

on

tial

Shoe, and Woolworth.
In the last twenty-five years we

"...++■

-

and should prevent wide swings in business

can

of

cal year

be eliminated is by

can

are

to

billion could be made in this fis¬

while giving lip service to inflaprevention, is fostering it through extravagance.

tion

\

Varying Impact of War
Since

•»

,

Warns government,

conditions.

Cola,

Coca

mies

:

destroying free enterprise, Midwest banker holds government,

selling below their June 1949 lows are

now

business cycle

way

government,
gress,

President, First National Bank of St. Louis

(25%), Borden (14%), Woolworth (30%), Sterling Drug
General Foods (20%), Schenley (50%), EasternAir¬

lines

as

the

sufficient

budget.

By WILLIAM A. MCDONNELL*

long

balance

amount

Continued

Pullman

15

Financial Chronicle

The Commercial and

,

.

W'.

■

■

16

The Commercial and Financial Chronicle

(1560)

.

.

Thursday, October 25, 1951

.

have

Flexible Exchange Rales

Importance of Distribution

By PAUL EINZIG

States underwent

will

economic crises in world his¬
tory, largely because of the undue rigidity ot
the dollar, especially after the depreciation of

sharp fluctuations of

sterling between 1931 and

why

downward direction.

a

This difficulty could be

parities of sterling.

Admittedly,
ernments

even under the

existing system the

entitled to change their
parities up to
having to obtain the consent of the
But to do

shows,

10%

without

International Monetary Fund.

so

would involve

governments

were

a

major decision which,

are

reluctant

to

take.

On

experience
the

other

understood that their
parities would remain un¬
changed but the rates could fluctuate within
t'hose limits, then the
member governments
might conceivably take
advantage of such a
limited elasticity
provision, thereby sparing their countries the
inconvenience caused by undue
rigidity.




but

constructive addition in the inter¬

reason

of

such

buy and sell

a

large

Selling

group

orders

stock available for purchase
about not through the sale

manipulation

pools,

but

vestors

to

of

comes
or

the

syndicates

by

or

through

sales

realize capital

by in¬
gains or

our na¬

sales

turnover

or

stock

common

of

Telephone

amounted

to

over

tion,

market¬

our

Exchange regulations

the

as

con¬

cor¬

porations.

With

these

hand, it should be
who wish

to

facts

clear

to

understand

at

those

that

to¬

day's securities markets are truly
public markets.
You
still hear

what I would

liquidity.

hand, the specialist,
a

security,
heights,

rules

present

;

believe

him

it

and

to

be

regulations

I

inroads of Socialism and Commu¬

healthy in¬ nism.
hope that he may
It might be
a

have had any relation to

function

as

a

to create artificial

liquidity. These only when the security advances

particular times also
mation

of

pools

saw

and

the for¬

syndicates
in the

^that became major factors

in price at least

an

eighth.

The penalties for the formation
of pools and

syndicates

are so

vig¬

selloffs of any or all of our securities
in the future. - If we are to have
another

world-wide

then, most certainly,

depression,
securi¬

our

sharp inclines and declines of stock orous that
they are simply riot in ties markets will be affected, but
prices. Though they provided a existence
I do believe that this broad dis¬
today.
.certain
amount
of
liquidity
A final comparison shows that tribution among millions of Amer¬
through a volume
operation it was,

at

best,

'

way

finance.

an

unnatural

in the

Any

number of

in

and

one

interest of

sound

our

totals

the

of

"old

days" with

these so-called stimuli to
accounted for

as

much

liquidity
70% of

as

compe¬

the volume of Exchanges, as com¬
in writing his-'
tories of American finance, point pared with our present record of
tent

authorities,

out that there

stock

70%

as

times when

were

of

Exchanges

the

volume

could

be-

counted for by these unnatural

as
on

approximately

viction

ac¬

artificial

or

The

means.

stock

Exchanges,

through
attempted
control
these situations,
but
since they could only rule
against
rules

and

that

*An

ton,

by

Conference

Mr.
on

Day before the
Distribution, Bos¬

Mass., Oct. 15, 1951.

a far more stable force in
the event of panic than the hold¬

ings of

huge

blocks

few individuals.
Another

kets is

•

stock

by

important stabil¬

very

the

of

"

present

our

basis

and

mar¬

type of

se¬

the

participation by curity purchases. A recent survey
the specialist and floor trader, un¬ of Chicago brokerage office trans¬
der

present
sound

controls,

and

in

the

is helpful actions
public in¬ odd-lot

show that about 40%

market

Securities Now Mere Widely Held
Since

orders

our

stock

daily

tables,

papers,

reflect

through
the fact

that

our

that

the securities traded therein

markets today are

broad,

value

of

surveys

show

of

Trades with

less

accounted for 49%

number

brokerage

20

than

years

office

or

Other

the
ago

a

$1,000

of the unit

transactions.

.throughout

that

were

involving less than

100 shares of stock.

terest.

the
address

icans is

participation. izing factor in

regulations,

to

Boston

12%

I repeat that it is my earnest con¬

and

as

flow

from

rules
and
regulations
can
no
panic because there are so many
specialist—that longer unduly bid a stock up and, investors who
could, in an unprec¬
of being a stabilizing force in
any on the other side, he can only sell edented
selling wave, touch off
given market. He could almost, it short on an "up-tick"—or, to a
collapse?"
In answer to that,
with "restriction, sell stock short.
put it another way, he may sell first le.t me
say that I know of no
It was, therefore, possible for him securities that he does not
have way to prevent substantial

his

much

are

most

hand if it

member gov¬

natural

investors.

or

may not

no

un¬

own

concerned.

of

fluence and I
up to new
a natural question
supplying unrestricted become a more important factor. to ask: "Aren't we
quite vulner¬
of stock which may or
The specialist under the "new able in our
securities markets to

bid

amounts
on

overcome

on

"artificial"

taking

neces¬

any movement

The basic

great deal of

a

could

sarily bear any relations to the equilibrium level of
sterling. It
might depreciate to the lower limit when at
$2.80 sterling is not
overvalued, simply because of a wave of pessimism
leading to
speculation against sterling. Or it
might appreciate to the upper

justification.

be obtained.

On the other

Instead of fixing their value
rigidly at the parities accepted
by the International Monetary Fund, they could be allowed- to
move
within, say, 10% on either side of the parities.
Thus, the
sterling-dollar rate could be allowed to move
between, say, $2.52
and $3.08. A margin of 20% would
be sufficient even these
days,
for correcting any conceivable
overvaluation or undervaluation.

by official intervention which would
prevent
justified by a shifting of purchasing
power

its

as

was

the

orders

The Securities and

Day

investment

in making a market for

tuate.

limit without
any

far

as

automatically

trol over the floor trader, which expressions
by the neophyte to
This put a stop to the so-called free the effect that: "They" are the
was accomplished by the latitude
riding and required him to pay corner druggist, the farmer, the
of the operations permitted floor for
any of his purchases in a regu¬ white-collar
worker,
the
Vicetraders and specialists on the Ex¬ lar
way. It is estimated that his President and Mrs. Jones in Cenchanges. It was possible in those operations in the earlier
days, terville, Kansas.
days for the so-called floor trader from time to time, amounted to
The American people
gradually
to trade in thousands of shares of as much as
40% of the volume. coming to own America's
corpora¬
stock within any given day. and The
present records show that the tions not
only means improved
to even his account out at the floor
trader, at present, averages marketability but presents the
close and end up by having none somewhat less than
2%
of the strongest
single army for the pro¬
of his personal funds involved.
volume on the Exchange.
Under tection of our country against the

a kind of
compromise, would satisfy nobody—would be the fix¬
ing of margins within which exchanges would be allowed to fluc¬

not

practices,

showed

has

created broad liquidity for the is¬
sue.
This comes about through

mission

for

avenues

term

solution—which, precisely because it

would

James E.

of

ability depended

f

rate

Exchanges

internal operation

in

future

years

postwar policy has been variously criticized both for the

of the

these

the

our
security markets were ment bureau that has and still is
quite broad; liquidity was excel¬ functioning very much to the gen¬
lent, but for different reasons than eral interest.
is the case today. In these earlier
From out of all this came such

ground for criticism of the decision. It is almost impossible to
strike a happy medium between the two
extremes, and it is cer¬
tainly impossible to reach a decision which would more or less
satisfy both those favoring rigidity and those favoring
elasticity.

movements

courage in establishing new
controls that virtually eliminated

dis¬

ebb,

its low¬

'20s

in having to decide between
undue rigidity and undue elasticity is indeed far from enviable.
Both policies are fraught with grave
disadvantages. It is possible
to put forward a formidable array of arguments in favor of either
policy. Whichever course is chosen there is certain to be ample

The trouble is that the

that

volume running at

With

stockholders through¬

nation

but provides our financial 3,000,000,
virtually
all
coming
for this is the fact that most securi¬
industry with one of the best safe¬ from this natural flow of buy and
ties have a ready market and can guards against a return of reck¬ sell
orders
from
the
investing
be sold in the space of a few less and unsound
public. ;
activity.
minutes.
There are things that I would
This same process
creating to¬
In our modern markets today, like to see changed in the Securi¬ day's
marketability of the credit
and
the liquidity or marketability of ties
Exchange Commission of American
industry is, in effect,
these securities has been con¬ regulatory field but, as a whole, I in the hands of the
general public,
stantly improving. In the late must say that here is one govern¬ except in the case of closed

the governments

is

real

can

considerable upheaval in the domestic economy and
foreign

A possible intermediate

for

their

provide the finest collateral that est of the stockholders in

are,

having changed its parity

Securities

est

fer

It

however, as many
arguments against a revaluation of the Belgian franc as against
a devaluation of the French
franc, for both changes are liable to

devaluation of the pound and for not
more than one occasion.

the

Exchange Commission.

of

the

Exchange Com¬ losses, to provide monies to pur¬
played an important part; chase a new home, pay doctor
America. I think it is worthwhile in
fact, it is my opinion that the bills or
from
estates,
pension
to mention that securities of our Securities and
<v
Exchange Commis¬ funds, etc.
national corporations not only of¬ sion has not only been a most
Last
year
the purchases and

Owing to the undervaluation of the Belgian franc there is a per¬
export surplus, especially in relation to the countries of
European Payments Union. The limit of the balances which
Belgium is prepared to accumulate with the EPU having been
reached, the government has now introduced a series of restric¬
tions designed to safeguard the country, riot against an outflow of
funds but against an inflow of funds. The alternative would be a
revaluation of the franc, and the government may yet reluctantly

British

of

my

the

the

-

establishment
and

important

sistent

task of

edly, in part, the forerunner of the

mar¬

tribution is all

Undue rigidity of the exchange parity is causing a consider¬

The

for

undoubt¬

were

greater

able amount of trouble also to Belgium, though in a different sense.

trade relations of the countries concerned.

,

important part of all this to

number

broadening of
regulations of securities

believing

frequent changes. On the other hand, between the changes
the franc tended to become grossly overvalued as a result of the
depreciation of its internal purchasing power. As the French Gov¬
ernment was naturally reluctant to devalue even more frequently,
France became exposed from time to time to the disadvantags of
a rigid currency at an overvalued level.

cause

The

our stock market the liquidity
of American Tele¬
violently. There were a phone and Telegraph Company
of instances, at that time, common stock is that this
vast

reasons

to such

There

phone.

depression

finally,

difficult to establish confidence in a currency which is liable

decide in favor of that solution.

SEC

out

base

I

say,

companies
growth in stockholders, in
degree, parallels that of Tele¬

early '30s

markets and which

the

to

whose

ketability of
liquidity and,

The value of the French franc tvas changed a
1945, always in

Needless
numerous

name

that called for the

in

their

1,000,000,
approximately
Here, certainly,

total of

a

could

number

place

Telegraph

ideal example of industrial

an

rules and

taken

ap¬

of its

that

democracy.

reacted

has

of

numbered

29,000,000 shares.

in the

that

and

announced

who held

change

The history of the French franc since the last war provides an
example of the disadvantages caused both by undue elasticity and

was

our

total

a

(1951) the Amer¬

year

Telephone

Company

a

,At the start ,of

held

stockholders

members, it was virtu¬
impossible to include those

Establishment of the

of this

ican

portant; re¬
viewing brief¬
ly the drastic

concerned were unwilling to make adjustments
every time there was evidence of disequilibrium, because they felt
that the disadvantages of instability would outweigh those of the
overvaluation or undervaluation of their currencies.
A similar
line came to be adopted also by governments of those countries
which suffered hardships through the undue elasticity of their
currencies during the early postwar years,
-

since

uary

own

The

who

average holding was
approximately 28 shares. In Jan¬

attempt

distribu¬

1923

The

tion is all im¬

The governments

of times

holders
stock.

formed outside the Exchange.

In the

ally

In

the American Telephone and Tele¬
graph Company had 281,149 stock¬
proximately 7,000,000 shares

to

their

time alloted to me, I shall
to
show
you

the

.

number

vulnerable

more

modern securities markets.

the other hand, the

tions

by undue rigidity.

markets

Distribution is the greatest sin¬
gle factor in the marketability of

competitive currency, deprecia¬
following on the depreciation of the
dollar in 1933 caused chaotic currency condi¬
tions throughout the world.
.
^
During the Second World War a rigid
Dr. Paul Einzig
stability of currencies was maintained, and it
was
agreed in the Bretton Woods plan to
continue to aim at rigidity after the war
Indeed as far as the
dollar is concerned this aim has been fully achieved. The value
of sterling only changed on one occasion during the postwar
period, and changes were equally infrequent in the exchange pan¬
ties of 'many other currencies. As a result these currencies tended
to become either overvalued or undervalued from time to time.
and

1936

make

v

is

The rigidity of tne French franc until
1936 inflicted on France a series of financial

sterling.

On

stock

panics, but asserts
greater outright ownership of securities by public is a stabil¬
izing factor.

of the gravest

crises.

and wide

stock

holdings in
the hands of the
investing public.
Let me give you one of the best

exchange executive describes functions of
floor traders and specialists in
creating "liquidity" in securities
markets. Though favoring some changes in Securities and
Exchange Act, he praises SEC regulations regarding floor
traders and specialists. Says
resulting loss of marketability
has been offset by increased growth and wide distribution of
stockholdings. Denies increase in number of securities' holders

Eng.—During the 'thirties the world suffered a
undue rigidity of exchange rates and
through their undue elasticity. This may sound paradoxical but
it is none the less true. Until the suspension of the gold standard
in 1931 Britain suffered grave disadvantages
from the undue rigidity of sterling at an
ove£"
valued level. Until the suspension of the gold

political

of

examples of distribution:

Prominent

LONDON,

and

the increased growth

distribution

By JAMES E. DAY*

great deal both through the

one

Is

President, Midwest Stock Exchange

would be allowed to fluctuate.

standard in 1933 the United

marketability,' what,

ketability lost through regulation?

In the Securities Markets

Seeing difficulties and grave dangers arising from both too
rigid and too elastic exchange rates, Dr. Einzig finds as inter¬
mediate solution the fixing of margins within which exchanges

good

then, is the major factor making
up this great percentage of mar¬

nation

90%

revenues

of

came

Number 5058

Volume 174

.

.

.

The Commercial and Financial Chronicle

speculative trades on margin
Today this picture is
exactly reversed; 90% of revenues
are derived from cash purchases

•from

accounts.

and

10%

only

1929

neighborhood

in the

were

people?

toward

a

Authority Engages
Wainwright, Ramsey

Authority

on

its future

of

listeners thority of Texas, announced

my

In

order

to

continue

growth

in the operations of
Authority on the soundest
possible basis, the Board of Di¬

new

being contem¬ rectors has decided to engage the
plated at this time, but that the consulting firm to assist them with

yes¬

distribution of terday that the Authority has en¬

enormous

are

growth

the

of

entire

$8,000,000,000, representing the the securities of American indus¬ gaged the services of the financial area served
by the Authority is
greatest proportion of the amount
try to improve marketability and consulting firm of Wainwright, continuing at such a rapid pace
of
money
involved in security
the ownership of American secu¬ Ramsey
&
Lancaster, 70 Pine that reconsideration of expansion
purchases. Today brokers' loans
are
sTSmall item, indeed. Latest rities by Americans.
Street, New York City, to work plans must be made at frequent

their

long

of

plans

range

and

eration

of

future

programs,

stated.

security purchases are on loan or
margin, even though there are

the

securities An

more

public today than in

1929.
/

%

'

Bought

Securities Now Largely

Outright
1

believe

I

conclude that

can

we

v^c>'
,~*o

*

'

«"'■>

' ■

♦

i

' '

in the .num¬
shareholders in American

this steady increase
of

ber

corporations who own their se¬
outright provides one of

curities

far

greatest safety factors as

the

price decline is concerned that
our
financial markets have ever

as

enjoyed.
•

Though we have seen this amaz¬

growth in shareholders of
corporations, we still

ing

American

only scratched the surface.

have

It may be a

ihock for you to learn12% of its people

that

in

own

securities in business enter¬

Japan

prises, while here in our country
today only 7% of our people own
shares in American industry. We
correct this sit¬

must continue to

if

uation

America.

<% *#w

attention to the fact

*

s*

'

in the greatest period

are

we

free

a

♦

; I call your

that

have

to

are

we

expansion that our country has
known. It appears that this

of

ever

for

continue

may

number

of

years.

indefinite

an

this

Where is

coming .from to pay for
this growth in industry?
There
are only two sources that I know
of: (1) through the sale of stock
or
bonds to the American pub¬
money

lic, and (2) through the borrow¬
ing of funds by industry through
some
government agency.
Our
newspapers
have been carrying
accounts of charges about unwar¬
ranted loans made through gov¬

agencies.

ernment

Leading Products of

His

•

Lit up the World!

loans

where

true eco¬
Even

to businesses having no

nomic

for

base

existence.

though all the loans may be sound
in the future, I believe that there
is no shorter cut to socialized in¬
dustry than to have our

Legend has it that

'

Greater

cigarette. As the story

American

of

If

are

we

fortunate

enough

in those

to

great part of these funds
through the sale of securities to
the
American
public, we must
realize that we have a great, re¬

raise

We

must clearly

dicate these risks.

as

in¬

chasing

a

make clear that

stock in any corporation
same problems and

we

can

/

est in

of war, which

Old Gold

HEADLINE

of the

involved by using the

American

is there

viding

through

a

years.

BAGPIPE

Established in 1760, the

HAVANA BLOSSOM

helped write the history of
means

are

buying

more

Old Golds than ever

years

success.

of tobacco experience is the key to

It opens up a future bright with promise

people

risks

in

the
AMERICA'S OLDEST TOBACCO MERCHANTS

not loss involved in pro¬

funds

Chewing Tobaccos
BEECH-NUT

savings

of American securities,

the

%

We can

in addition, that though

the

cus¬

cross-section

American people.

purchase

VAN BIBBER

BETWEEN THE ACTS

for Lorillard's fine tobacco products.

healthy condition to have those

profits shared by a

of

with

history—even higher than in record-breaking 1950.

Nearly 200

profits and dividends are

if

than 70

Today smokers

they always seem to be, that it is

are

Cigars

to ourselves

say

to be made in time

more

for

government

•

ESTABLISHED 1760

industry
W0f. vV '/',"

agency?

'

'

'
,,,

Isn't it* true that any

''

4*

,

government




i2i

in*"■«

'

MURIEL

before. 45 months of increasing sales prove it. During the
first nine months of this year, Old Gold sales were the
high¬

any one

think

say,

INDIA HOUSE

Old Golds for millions of Americans!

individual would
starting his own business.

as

have in

a

FRIENDS

Company had already been tobacco

pur¬

the

involves

P. Lorillard

makers of Old Golds have

gain, but we should not discount
industry.

that

paper

smoking pleasure. No wonder smoking pleasure

great as the likelihood of

should

...

We must stress

this credit of American

I

UNION LEADER

v/.fyy

;tll'

tissue paper tube—used

days to prime cannon—filled the

experts for

that the likelihood of loss is every

risks

a

When that first cigarette started a world-wide
tom

in the investment of new

enterprise.

We

day in 1832 he and his

tobacco, and rolled his own!

sponsibility. Our public generally
is not familiar with the risks in¬

bit

goes, one

a

volved

(

Smoking Tobaccos

gunner' invented the first

a

emptied the gunpowder from

Securities Dealers and Brokers
Z;jr}

EMBASSY
MURAD

HELMAR

battery mates found themselves with plenty of tobacco,
but nothing to smoke it in. The ingenious
artilleryman

,

Responsibility

OLD GOLD

BRIGGS

corporations financed by the gov¬
ernment.

P. LORILLARD COMPANY

Cigarettes

It appears that
in¬
were made

there have been far too many
stances

Cigarette

...

r

W.

,-^C

■"

hq
1

figures available show that less
1% of the total amount of

many

to

supervise the Authority's finan¬
cial public relations and the op¬

than

hands of the

17.

the

Max Starcke, General Manager
by earnestly solicit¬ of the Lower Colorado River Au¬ financing plans

broader

intervals.
the

financing operations.
Mr. Starcke added that ho

I conclude

Brokers' loans ing the support

truly speculative.
in

ican

with the

River

the Amer¬

purposes through taxing

be considered

can

its funds for loaning

agency gets

(1561)

18

The Commercial and Financial Chronicle

(1562)

a

Increased Production Alone Will

cast of actors capable of

it

not

marching
end

for more production, Mr. Sonneberg points out qualifying conditions which are fundamental
and essential if production is to solve nation's present dilemma.
Warns of U. S. global spending spree.
persistent

on

and

taking

increased production
rescuing the economy
Xrom
the
present dilemma
has
become the popular indoor sport.

self

In the absence

"Deficit

Assigning

pro¬

Oliver
Twistian, selfdefeating as¬

pect.

d

One

Sonneberg

Walter

—-

UN

Sixth

delusive

system, muff essen¬

a

the

customers

password.

than

rather

portation,
to

or

dorf-Astoria

in

with the bank. William E.

member

a

the

President of the

of

the

Exchange,

Robert

S.

top-

By field

function

it

as

bound to prove dis¬

appointing.
no

the S.S. America

on

civ|c organizations to
jn the Paris meetings.

Getting rid of the goods in, a way
will maintain employment

prices is the test
enterprise.

business

E.

1950's Come

G.

Nourse

First"—

—

"The

points the

issue: "We cannot accept the arti¬
stimulus

of

which is

war,

now dominating the economy, or
the temporary subterfuge of defi¬
cit financing, which we have had

for

practically
period, as well
itself

alLpjLth^. postwar
as

during the

war

the

and

preceding depres¬
sion." Certainly if enterprise is to
be kept free sounder methods of
operation must be found, econom¬
ically sanctioned principles must

the

.

the

;

market, without

recourse

reducing

"excessive inventories." Manufac¬
turers have been disposed to "take
the bull by the horns" and trim

production in earnest in the hope
of reducing "excess stocks." One
Los

Angeles

offers

a

free

people at
each

a

television
h

1 i d

y for two
California resort- with

television

attractive

o

merchant

set

a

sold.

unloading

Similar

deals

are

made

by stores overstocked with
refrigerators and other
gadgets.

electric

We don't know

our

strength or
our weakness.
The American
giant, disregarding the limitations
of a tax-supplied
treasury, the
inflation threat and the accumula¬
tion of

debt,

toward

national

Despite
parallels

engages

and

in

a

global

commits




it¬

assurances

depicted

made

and

some

his-

by

torians there's po precedent upon
which to draw. A Russian mon-

to

impose

on

the world

has been

its

industrial

according to

made

on

an an¬

Oct.

17

questionable

The scenario for

more

a

his

firm, forhierly

cor¬

of the Connecticut

Sav¬

ings Bank of New Haven, Conn.,
held at the banking house on Oct.

22, two changes
official staff.

were made

in the

Thomas E.

merly auditor,

Curl, for¬
elected to the

was

office

of
comptroller, and
Foschi, formerly as¬
sistant auditor, was elected audi¬
new

Felix

tor.

F,

de

Mr,

Curl

became

with the

bank

in

Curl

Mr.

associated,
June, 1929 and
was elected auditor in
July, 1941/
Mr. de Foschi joined the bank's
staff in December, 1929. Both Mr.
and

Presidents

Conference,
of

de

Bank

Foschi

the

of

•

National

Auditors

past

are

New

Haven

Association
and

Comp¬

trollers.
if

if'

'

of the First National Bank of Jer-'

sey

City, N. J.

of

posed
staff

This group is corri-V

members

who

have

of

had

the bank's5
,

20

or

years of service with the
tion or its predecessors.

more)

institu-J

Kelley'
Graham, Chairman of the Board,'
Vice- again expressed his .appreciation

was

dent of Outdoor

members of the Twenty Year Club),
holding the "record" for the longest'
number of years of service. These)

.Advertising, Inc.,

which company he first joined in

.

1923. when it was known as O. J.
Gude and Poster Advertising Co.
$

$

*

President;
Company

has announced that

Edward

loyalty and cooperation of

compliments

were

Clifford'

included:

•

"Special*

paid to the

A.' S

10-

poerl,*

President, 45 years; Harry J. Du-;

-

•

Horace

A:

rejoining

bank, he

Offered in Kitchener

and

croiset, teller, 41 years; Harold;E.:

McCausland, Assistant Vice-Presi-';
dent, 37

years;

teller, 34

years;

Daniel P. Griffin,)
Anna.Hackenburg,)

teller, 34 years; Charles R. Mer-j
wgrth, Assistant Cashier, 33 years;
Henry; F. Moorhouse) Assistant
Cashier, 32 " years; Cornelius " V.
Voorhees, note teller,- 31 :years;
Alfred

E.

:Wroldsen, Auditor,- 31

*

organization

Vice-President

was

Treasurer

of

Kitchener Investment Course will
i

was

again be given by

Company for 21

vestment dealers,

pices

of

the

a

group of in-

under the

Kitchener

aus-

Board

of

with the Bank

of

45

Manufacturers
pany in 1943, ..'

have

Manhattan

at

the

Kitchener

&

)"„■

.

if

'

Waterloo Collegiate & Vocational
Forty-three new members will
The
panel
of lecturers ' join The Hanover Bank Quarterwill be D. R.
Dattels, Dattels & Century Club at its 11th annual

'[Company Limited;' . J. B.

Smith,
Wood, Gundy & Co., Ltd.; R. Learn,
Nesbitt, Thomsoa & Co., Ltd.; W.

dinner

York,
the

Hotel

at

on

Roosevelt,

Oct. 26.

veteran

New

Membership in

LillCagO /\naiystS-tO iYieet

have

cheon

as

today

(Oct.

25),

year,
•

century-of (service

\yith First National.
•'

The

-

t*
Trust

Verona

Verona,

N.

J.,( an

member

of

the

*'''!)(

;lit

of N

Company

npn-)

insured

Federal

/

Reserve

System, has been absorbed by
Montclair
T r u st
Company,

-t^ie
,

of.

Montclair, N. J., a State mem§££. /
Incident
tor the; absorption,ijjt^ie."
Montclairlished

a

Co.

Trust

.

has

estab-

-.

branch in the quarters of

the Verona Trust.

*)'•*"

.

*

•

" J

y; *

Irving T. Cueman and Joseph S. •
Gray, Chairman of the
Bator have been named Assistant '
member of the Club,
Vice-President,
and
address the dinner meeting.
Controller, J

William S.

bank and
will

guest speaker at its lun-

meeting

group

25

'

quarter

'

School

the

their

\

•'

if

■

■

passed

just

mark, received pins indicative of

before join¬
Trust
Com¬

'

Education

a

mester, H. W. Manning and Michael Fuller, three members who,

years

ing

the • longest,was gold pin indicating hisyears' service. Arthur Kacken- )

awarded

Canada ( Dry

Bottling Co. of Trenton, of which
KITCHENER., Ont.,
organization he remains a director.
CanadaAnnouncement, is made that theo¬ Mr. Sheil, a native ,New Yorker,

'

a

'

16,

Chemical Company.

the sale of

Trust

i;

First

The

dent and Treasurer, of the Spencer

awaits

porators

the staff of his institution.

im-

and

*

for the

"better

by

skills"

^

Broadcasting
System.
Prior, to ihat he was yice-Presi-

Kenneth-A, Spencer, President,
and John
MiUer- Vice-Presi-

grand civili-

power

mechanical

too

enterprises.

characterized

machines,
proved

in

^

special meeting of the

a

President in charge of sales of the

the

CHICAGO, 111.—The Investment
fully proved, and in dis- Analysts Club of Chicago
will
resources

■

At

Committee

'

before that pattern

sipating its vast
many

pattern

1177.

v

will total 463,
strosity, motivated by a cockeyed D. Meikle, Osier &
Hammond; P." of which 364 are active employees.
philosophy, ppliticianed by fanat- H. Bartlett) Dominion Securities R. E. McNeill, Jr., President of
ics, and administered by a
Corp., Ltd., and Lome Sellery, A. the bank, will present savings
bloody-handed police state is pit- E. Ames &
bonds
to
new
members,
and
Co., Ltd.
ted against a Republic which
James R. Day, President-elect of
overplays its hand by attempting
Chirac Analvsf* tn Mppt the Club, will award 25-year pins.

zation

spending spree,

bankruptcy."

referred to in these

was

Sept. 27, pages 1168 and

years,.and Alfred'Rose, vault at-;
Company,
tendant,
29. years. ;;•* Clifford
A.;
from- 1937 to T948,
During the
Spoefl, who has been;.with the:
last three years, before

Invesim't Course to Be

which they can
be preserved against a rising ideological tide are laid down in- experience. An experience recently

groups to keep
of .each-other-is
leading

the bank

columns

Trust

upon

economic

-

Henry of the bank's
temoSmaking; to world peace. Fifth
Ayenue.and £3rd Street Of¬
Mr., Byfieid, too, is well equipped;
fice, ♦ and Thomas 13heil of .the,
to answer the arguments of those
Boynton 'Avenue Qffice in the
^"0 criticize, because of- misinBronx, have been
formation or; lack of information, sistant. Secretaries. appointed As¬
-Mr. Henry, a
tap.ltajism at work and the end- native of
Trenton, N. J., was with
Product of capitalism. )
Manufacturers

enterprise and democracy
not just prize winning slogans.

abreast

upon the exercise of rights. Offer¬
ing of the new shares of stock of

Mutual

It is; an-

that

and

shares,1

Blaine, Vice-Chairman

of the Executive

man

of

Pri®e and the contributions

Free

among

Club

C. Flanigan,
Pret the functioning of the Amer- v
^{Manufacturers Trust
ican system of . freedom of enterof New YOrk

good,. and workers resolved to get
spoils, hold the
reins, with Uncle Sam standing
by to pick up the pieces.

About a year ago officials were
warning us of an impending
shortage of goods due to compet- : noted by-a Wage Stabilization
ing war productions. Now business Board warning that
jockeying

the

368,622

approximately .98.3% of the
offered, were subscribed

the

,

their share of the

terms

to

by
J.
Wilbur
Lewis, President of
the /bank. Mr. Barnes, also Chair¬

|lclPated that Mr. Byfieid will • be
in a^ tinusual position to lntpr-.

to

industrialists given to milking the.
situation cow while the milking's

are

concerned with

international leaders.

or

shares

*

nouncement

v

n

members

of New York,

participate
j

com¬

agency, has been elected a trustee
Of the Union Dime Savings Bank

tending^ the meetings, and. other-

]ply arid demand will conveniently
take care of price- levels. Not so
long as subsidy-minded farmers,

The

are

•

and

elected

was

the

•

*

Wars
or
Deals, big production
discounts other advantages.
Some folks hold the comfortable
idea that.the so-called law of sup-

be installed for

men

u

to its shareholders

to the

Thursday,

S+
•'delegation, representatives of nonia-f0^.1^^31 organwations a at^

c or dance
with the way it
handled. Unaccompanied by purchasing power and prices that will
take the product continuously off

of production

sharing the fruits
practically between
workers, employers and public.

;n

has advised the underwriters
that of the 375,000 shares of stock
offered by the bank under rights

Thirty-five bank officers and
bank, presented emblems
members celebrating their employees,
representing,
it
is.,
30th, 35th, 40th and 45th anni¬ stated, close to 1,000 years of
banking experience, were honored
versaries.
*
*
*
V
on
Saturday evening, Oct. 20, at
Z. C. Barnes, a partner of Cal¬ the Hotel Plaza, Jersey City, on)
kins & Holden, 'Oarlock, McClin- the occasion of the annual dinner:
tori
&
Smith, Inc., advertising meeting of the.Twenty Year Club.'

of

'1 y ^011"

,

,

of

Graham B.

was

It

Avenue

office

J. Stewart Baker, Chair¬
Bank, welcomed the

year.

new

participated in a number of radio
and television forums. In 1949 he

public lower pfices. * In
short, production performs in ac-

trick > at "all.;

that

and keep down

ficial

for

^

is

ing

.

should.

Draude,

Club, presided at

Madison

Street

man

and

cannot

years

President of the Club for the

arid

icsandhas

on

bank's

64th

on

are pen¬

dinner, and Harry P.-Black of

the

written

economic

the

year, 49
of service

completed their 25

financial

in which "the mechanisms of can only come into its own if its
distribution are properly geared fruits are rightly divided between
to the increased output of ma¬ worker pay, employer profits and

time, and 54
During the past

sioners.

No¬

^A
The Stock Exchange named a
Production, saddled with the representative and observer at the
handicap of. uneconomically high General-Assembly in
response to
wages, near confiscatory taxes, and an invitation
by the United,States
swollen
social
welfare
charges, Mission",; to. national labor and

deficit-financed regime for a set¬

Of

Club, 350 are
(employees of the bank at

active

has

up

17.

the present

in

extensively

cents-r

Oct.

on

404 members of the

lications.

war-spurred,

The First National Bank of Bos¬
ton

•

.

.

special representative of the
Exchange
on
the
Town
Hall
'Round the World Seminar.
He
ad- will sail with the U. S. delegation

etc.,

seven

.

_

Doctor

York, was
New York

the

f Mr. Byfieid,

the

on

.

prices
that
prevent Oct. 25. Mr. Byfieid will report
maximum circulation and account his observations directly to Mr.
for the bankruptcy of many pub-: Funston.
;)))))):)))/)

by the profit motive, was a step
unaccompanied by necessary con¬
cessions to economic reality. The
a

six

costs

shoes, in conditions of mutual ad¬
vantage, to a too ambitious pro¬
duction
mainspringed primarily

of

production,

vanced

primitive exchanges of
bushels of wheat for pairs of
From

of modern

New

by

vember,

capacity of enough customers to

relationship to natural "production costs forced up sell¬
demand
as
distinguished from ing price of all newspapers to a
artificially created wants, the way point beyond the level of good
it is financed, are some of the business."
Daily papers, chiefly
factors determining desirability. through increased costs all along
Quality, not quantity, should be the line for labor, materials, trans-

Production

York

Meeting in Paris

General

Paris

cost of living fixed

premises—based on
appetite of advertisers for

set-up, the

was

New

State

the U nited

pacity of increased production to pay—tell the story.
An example taken at random
all shortcomings.
The kind of production, the way shows how the thing works in
it fits into the modern industrial
practice. In the newspaper field,

chinery"

the

of

known

Nations

overcome

substitution

made

Assembly of

a

many

fictitious

on

tials, disregard fundamental defi¬
ciencies and depend upon the ca¬

the

by

Banking Department of a
certificate of increase in the capi¬
tal stock of J. P. Morgan & Co.

Banking
Department
on
Oct. 17. The plans provide for the
enlargement of the capital from
G. Keith Funston, President of $20,000,000 in 200,000 shares of
^ew York Stock Exchange, $100 par each to $25,000,000, con¬
has announced the appointment by sisting of 250,000 shares, par $100

.

betrays the

Wages tied to

people, and

speed));

feature of the

*.^—0

ing featuring too

sway¬

ed by the

Approval

Incorporated

cost of liv¬
expensive
things out of reach of too many

the

situation as¬
sessors,

the
give

Representative at

financing" at a rate we
before; an agri¬

item

trend.

easily
of

some

by

Byfieid to Be NYSE

undertaken?

transactions

o u s

surpris¬

ing how

which

,

an

It is

limited

CAPITALIZATIONS

On what basis are these tremen-

groups

duction takes
on

production

a

and

OFFICERS, ETC.

REVISED

whipping the
economy
FnttTa "price-income spiral" are
/
the Board of Governors of Robert each.
scarcely the
stuff of
which a
S. Byfieid
to
'
*
\
healthy, independent system is
be special repmade. Nor is there much nourish¬
(, The tenth Annual Dinner of the
resentative
ment in attempting the imposition
Quarter Century Club of the Bank
of
the
Ex¬
of
the
Manhattan
of such an unproved system on an
Company of
New York was held at the Wal¬
change at the
unprepared world.

pectations the
persistent cry
more

industry's vulnerability

State

industry requiring large
subsidies, and special interest

fillment of ex¬

NEW BRANCHES
NEW

production full economic value.

cultural

favoring ful¬

for

on

had never known

conditions

of

for

valor

of

deeds

to

open

the country.

over

absence of factors that would

capacity is questionable.

its

CONSOLIDATIONS

derives from too much dependence

cry

the role of

from

the Germans
around it at the

stop

American

Commenting

i

News About Banks

,

did

By WALTER SONNEBERG

Thursday, October 25, 1951

.

over.

.In
France the
Maginot Line,
"mightest, defense line ever built,"

Not Solve Economic Problem

>

■<i

putting

.

.

Co.

creased

of

its

from

•

if

if:

National

'

respectively, of the Bank of Nut- s
Bank

Walden,- N.

Y.,

&

in¬

capital, effective Oct.
$75,000 to $100,000, by
$25,000 of new stock.

ley,

at

Nutley,

to the Newark

Oct.

13.

The

N.

X,

according :

"Evening News" of
"News"

adds:

"Mr. r

Volume 174

staff since
sistant

Number 5053

1942,

.

The Commercial and Financial Chronicle

.

.

formerly As¬

was

^"Mr. Bator, head bookkeeper for

the

bank

before

his

promotion,

Announces formation of

was

acquired by the Bank
of Nutley in 1937."
■*

A

*

proposal to

Committee to, assist
stitution.

the Pater-

merge

survey

Savings & Trust Co. of Pater-

son

N.

son,

J. with

at

a

special
Nov. 9 at

stated.

staff

The

quote

we

correspondent
from which

bank

create

be

Bank

known

will

have five

include

offices.
the

laboration

Institution,

a

census

new

as

who

the

Co.

Trust

&

fices

The

and

These

present

earlier

disclosed

this

month that the Exchange,

a

reported

$80,000,000.

would

County

would

resources

than

more

stockholders.

Exchange,

unanimously

by the directors of the

with

an

Keith Funston, President of the

institutions,

unit

of

account

"The bank merger,
two

of

"to

owns

"The

with

in col¬
Brookings

undertaking

was

a
the question of
American
industry."

answer

Results will be published within a
year.

of¬

The Com¬

accomplish this

within two weeks.

of

added:

approved

included in the census.

Advisory
Committee,
composed
representatives of the financial
community and of industry, to
assist in taking a national census

meeting
the Paterson
bank,
advices
to
the
Newark
"Sunday News" of Oct. 21 by a
Paterson

Brookings to decide the most
practical and efficient methods of
securing needed data. One of the
first jobs will be to request spe¬

mittee expects to

a year.

formation

announced

and

estimated 5,000 corporations to be

In¬

The New York Stock Exchange
has

stockholders'

will

Exchange

cific information from each of the

Results of nation-wide

to be made within

Committee

the

Preliminary

the Peoples Bank

& Trust Co. of Passaic will be de¬

cided

Advisory

in work in

collaboration with Brookings

*

Advisory
with

work

of Stockholders

was
associated with the former
Franklin National
Bank, Nutley,

which

The

NYSE Joins in Census

Cashier.

(1563)

conversations

al¬

United

Steel' Cdrp.,
for
companies; Henry
S.
Wingate, Vice-President and
Secretary,
International
Nickel
Co., for international companies;
Martin K. Keena, Vice-President,
New York Curb Exchange; George
B. Soule, National Association of
Securities Dealers;
Theodore L.
Turney, Executive Director, Amer¬
United

States

States

ican Society of Corporate Secre¬
taries; John M. Sheffey, Executive

Hugh Johnson Go.
Reynolds Corresponds
Hugh Johnson & Company, Inc.,
Rand Building, Buffalo, announce
that the firm has been admitted
to

membership

on

the

Simultaneously, Reynolds & Co.,
Broadway, New York City,

120

Secretary, National Association of members of the New York Stock
Companies; Harry K. Exchange, announce that Hugh
Exchanges respecting the census.* Smith, partner of Shearson, Ham- Johnson & Company, Inc. have
mill & Co., for Stock Exchange become their correspondents.
In
Members of the Committee and
member firms; Arthur B. Dougall addition to headquarters in Buf¬
their affiliations are: Joseph E.
and C. W. McKay, Stewart Dou¬ falo, the J o h n s o n organization
Williams, Vice-President, Chase
maintains offices in Cleveland, O.,
National
Bank,
and Chairman, gall & Associates, Inc., sampling
New York Stock Transfer Asso¬ survey firm; William Boyle and Bradford, Pa., and Cooperstown,
R. V. Sentler, International Busi¬
Gowanda and Westfield in N. Y.
ciation, for Bank Transfer Agents;
Harold P. Gundersdorf and J. F. ness Machines Corp., on compiling
and
tabulating procedures;
Dr.
Rath, Assistant Vice-Presidents,
T. R. Smith Opens
Lewis
H.
Kimmel,
Director of
Bankers Trust Co., for Bank Trust
Thomas R. Smith is engaging in
& Custodian Departments; Harvey Study, The Brookings Institution;
John Haskell, Vice-President, and the securities business from of¬
W.... Roscoe,
Assistant Treasurer,
W. R. Satterfield, New York Stock fices
at 25
Vanderbilt Avenue,
American Telephone & Telegraph
New York City.
Co., and W. A. Brown, Secretary, Exchange.

ready have been held by the New

York Stock Exchange and regional

Investment

main

at

30th

Street

21st Avenue in

Paterson, the

ent

office

Passaic

663

Main

of the

Avenue,

its

and

INDUSTRY

and
pres¬

bank

at

two

branch offices at 50 Monroe Ave¬
and

nue

"In

tion

405

terest

FOLLOWS

Van Houten Avenue.

1947, the
purchased

Paterson

institu¬

controlling

a

in¬

in

the Passaic bank, with
intentions of eventually
joining the two organizations."

THE RIVERS

reported

*

>

«

^

Two Norfolk, Va. civic leaders
have been elected members of the

Advisory Board
Virginia
Robert

in

E.

of The

that

Bank

of

y

city.

They are:
Vice-President

Garris,

•

of Fred

P. Gaskell Co., Inc., for¬
eign forwarders, and Treasurer of
Old Dominion Stevedoring Corp.,
and James R. Peake,. Jr., who is

associated with the Equitable Life
Assurance Society of the United

States.
the

Mr. Garris is

Board

Norfolk
the

of

member of

a

of-Governors

Rotary

Club,

of * the

member

a

Norfolk-Portsmouth

Traf¬

fic Club, etc. Mr. Peake is Presi¬
dent of the Norfolk Rotary Club, a
member of the Mayor's Committee
for

Service

active

in

Man's

other

Club,

civic

y; $

:j:

is

and

affairs.

tjs

-

A stock dividend of

$25,000 has
to increase the capital of

served

the First National Bank

of

Cald¬

well, Ohio, from $75,000 to $100,-

000, effective Sept. 24.
*

*

of

the

v

...

Enlargement
the

Industrial

capital

of

Bank

of

National

Detroit, Mich., from $1,500,000 to

$1,750,000,

brought about

sale of $250,000 of new

effective

came
■'

Oct.

■*

■

stock, be¬

1, 1951.

An addition of $400,000

made

the

to

Gables

y

T'

*

*

the

by

has been

capital of the Coral
National
Bank, of

First

9

Coral

Gables, Fla., by the sale of
amount, where¬

it. In the 29,000 square

by the capital has been increased
to

$1,000,000,

fective

Oct.

$600,000,

ef¬

Penn Electric in five states are two

*

which

*

*

The capital of the First National
of Port Arthur,

Bank

increased

Texas,

000 to $500.0#6 by a

if

if

;

the

sult

of

that

amount

larging

of

stock dividend

sale

the

■

territory,
y;

if

$40,WM)
of

as

stock

new

has resulted

capital

of

in

and

re¬

a

t'i

■/

;

with

Mitchum,

the

greater needs of the future will require constant expan¬

Information
ations

may

regarding West Penn Electric's oper¬

be obtained at the Company's office, 50

Broad Street, New York 4, N.

Y.

manu¬

products of West Penn Electric's

THE

customers. It is used for many purposes

est Penn

growing chemical industry, and does

myriad jobs essential to goods
of

production for the world
.floats great barges

Electric

today. The Ohio river system

which

ANGELES, Calif.—Joel D.
become

from its generating stations,

largest of which are located at coal mines. The even

part of the territory have

form the basis of a

Mifchum, Tully & Co.
has

the

in steel
mills, cleans coal, dissolves rock salt deep underground
and brings to the surface concentrated salt brines which

Joel D. Middlefon With

Middleton

r.

attracted commerce
industry since the days of the first settlers.

power

L'

LOS

navigable tributaries, the Al¬

of the
and the Potomac river and its branches in the

facture of countless

effective

"

t,

sion of facilities.

unfailing source of water.

Today water from these rivers enters into

en¬

First
National Bank of Bellevue, Wash.,
Sept. !25.

'

asset with electric power

of

the

from $100,000 to $140,000,

an

legheny and the Monongahela, in the western part
eastern

increase

An

provide

The Ohio river with its

was

of Oct. 9 from $100,-

^

Of $400,000.

■f

major river systems

10.

:

:

from

and plenty of
mile territory served by West

Industries, like people, need fresh water

stock of that

new

move

Company

mountains of coal from mine to mill and

manufactured goods to distant

distribution centers.

(INCORPORATED)

associated

& Co., 650
He was for¬
officer of First California
Tully

West

Penh Electric supplements this great industrial

South Spring Street.

merly

an

Company.




Midwest

Stock Exchange.

office of the Paterson bank at 129
Market Street, a new office under

construction

13

"v

Principal operating subsidiaries:

Monongahela Power Company

The Potomac Edison

Company

•

Wesf Penn Power Company

20." (1564)

The Commercial and Financial Chronicle

To Such

It is difficult to overestimate the .British
influence of

return

a

of

British

a

the

economic

scheme, despite

that the

fact

Dominion

is by

Conservative government on An- .far the most prosperous member
#ilo-Canadian relations. Following of the British Commonwealth of
*the advent of the Labor adminis¬ .Nations. It is logical therefore that

tration

the

Mother

Country

links

between

and

the

Dominion have been progressively
"weakened.
The Socialist govern¬
ment in Britain failed

envision

to

the

Britain, with Winston Churchill
the

British

tained

guiding

the

closest

as

force, main¬
political and

-eeonomic ties with the Dominion,

tliis

close

cooperation

The

eco¬

the

difference

of

constitutes

a
certain impediment
incorporation of Canada in
the British exchange system but
this obstacle is by no means in¬
superable. Undoubtedly p matter

tion

the

on

part

a

non-Labor

the postwar period.

preliminary

step

towards

fuller

convertibility.
In this way the
During the war Canada's ex¬ barrier between sterling and the
traordinary efforts in support of hard currencies could be elimin¬
Britain in
the shape of
mutual ated. With the removal of the
aid, loans, and low cost provision currency difficulty Anglo-Cana¬
of essential

.

foods and

.

raw

.

,

...

mate¬

rials played an invaluable part in

Britain's

struggle

With

cessation

the

for
of

dian trade would receive
mediate stimulus.

an

im¬

cies

Canada's

ship

with

wealth

the

British

relation¬

Common¬

of Nations has become

in¬

creasingly
the

remote.
Consequently
pattern of Canadian foreign

commerce

ing

has undergone

change.

a

strik¬

Principally

due to
restrictions,

In

this

connection,

Canada,

the event of the advent of

servative

a

selling to Britain

on

the

.

E.

state
a

F.

McDonald
Pollock

&
Company; Wm. E.
Co., Inc.; Roosevelt &

&

Cross Incorporated; F. S. Smithers
&

Co.; William R.

Stroud

Chas.

&

E.

Staats

&

Co.;

Company Incorporated;
Weigold & Co. Incorpo¬

rated;

Dean Witter &
Wood, Struthers & Co.

Co.;

and

Stone Named to Head

Rocky Ml, IBA Group
DENVER, Colo.—The following

underprivileged peoples

are

of

officers

for

sented

has

been

pre¬

the

Rocky Mountain
Group of the Investment Bankers

re¬

regime of self-determination and dis¬

Association

«

of

America:

Chairman,
Ernest

$109,511,000 New Housing Authority Bonds

E.

Stone, Stone,
Moore

Co.

&

Vice-Chair¬

Publicly Offered by Investment Bankers

Alexan¬

man:

der W. For¬

in

.Obligations purchased,at competitive bidding by syndicate,

Con¬

syth. Calvin

principal.managers of which are Phelps, Fenn & Co., Lehman
Bros, and BIyth & Co., Inc. Award comprised issues aggregat¬

government,
w o u 1 d
take the initiative in

probably

Hutton & Company;
Co.; Kean, Taylor
& Co.; Laurence M. Marks & Co.;

soon identifies the silent towers
the colossus of the industrial age,

regard of contracts.

survival. restrictions governing the use of
hostilities sterling following measures taken

economic

a

duced under

The removal of

the
opportunity
to
consolidate to restore confidence in the cur¬
Anglo-Canadian relations on the rency would also encourage for¬
intimate basis formed during the
eign customers of Britain to hold
war was allowed to
lapse. As a sterling balances instead of seek¬
xcsuit of Labor government poli¬
ing immediate conversion.

Co.;

slate

such

du-

-W. E. Hutton &

dent Michael Clark.
To

I.

Francis

&

Co.; Eldredge & Co. In¬
corporated; Folger, Nolan Incor¬
porated; Paul Frederick
&
Company;
Geo. B.
Gibbons
&
Company Incorporated; Hirsch &

century B. C.
•
"Upon entering Abadan a visitor passes between
neat rows of prim but comfortable bungalows with
tightly shuttered windows. The lawns and hedges
.lovingly attended until a fortnight ago already are
turning brown under the pitiless Persian Gulf sun.
Almost every vista ends against the fantastic sky¬
line of the world's largest refinery."—Abadan dis¬
patch in the New York "Times" from its correspon¬

primary atten¬

of

as

Co.; A. G. Becker &

Incorporated;

Pont

not of the fifth

rapidly government would be the
strength«ening of the basis of sterling as a

taded when the Labor government
assumed the direction of affairs in

Stevenson &
Co.

gleaming metal

of idle Abadan

-currencies

to the

that would receive

Co.; L. F. Rothschild & Co.;
Tucker, Anthony & Co.; Bacon,

a strik¬
ing resemblance to the still standing remains of
King Xerxes's Apadana and Hall of a Hundred Col¬
umns at Persepolis.
But as a traveler draws nearer

nomic orbit.
:

John

fifty-odd steel chimneys of the refinery bear

objectives of a
that would

government

lamentably of Canada within the British

the world as a whole.
during the war years,

Whereas

first

the

think in terms of British progress
and solidarity would be the return

growing

impor¬
tance of Canada, not only in the
British community of nations but

also. in

of

one

British

Senior

her

(Incorporated); Ira Haupt & Co.;
Nuveen & Co.; Reynolds &

"Travelers to southern Iran may on consecutive
days visit two sites that stir emotions with almost
equal force — the ruins of monuments erected at
Persepolis by the Achaemenid Kings of Persia long
ago and the giant Abadan refinery lately abandoned
by the British who built it. :
"When seen from a distance, across the plain, the

WILLIAM J. McKAY

By

Thursday, October 25, 1951

.

Company Incorporated; First of
Michigan Corporation; Hallgarten
"& Co.; Harris, Hall & Company

State!

a

.

.

Bullock.

•

Treasurer:

ing $111,920,000, of which $2,409,000 were placed privately.

basis of

payment in sterling that would
not be
immediately liquidated. As

•

Secretary-

;

Donald

F.

1.00% for the 1952 maturity to Brown, Boettgovernment
r
matters now stand it is a reflec¬ with Phelps, Fenn & Co., Lehman 2.10% for the 1985-1987 maturities. cher & Co.
British outlets for Canadian ex¬
The Group's
Bonds of the following authori¬
tion on British Commonwealth co¬ Brothers and Blyth & Co., Inc. as
ports have been drastically re¬
Ernest E. Stone
operation and solidarity that one principal managers, was the suc¬ ties are priced to yield from 1.00% annual elec¬
duced and despite. Dominion ef¬
Dominion, Australia, is a holder cessful bidder for $111,920,000 of for the 1952 maturities to 2.175% tion meeting
forts to absorb a larger proportion
of
for the 1986-1992 maturities: is being held Oct. 25.
Nomina¬
enormous
sterling
balances, a total of $162,787,000 new Hous¬
of British exports the overall vol¬
tion for office is considered tanta¬
while another
Dominion, Canada, ing Authority Bonds offered on Phoenix, Ariz.; Fort Smith and
ume of Anglo-Canadian trade has
mount to election.
with far greater resources main¬ Oct. 23 by 83 Local Pu b 1 ic Little Rock, Ark.; County of Kern,
fallen sharply. In the normal
way tains
Members
of
the
nominating
only a nominal interest in Agencies located in 23 states and Calif.;
Albany,
Brunswick and
there would have been mutual ef¬
sterling. From the British point of in Puerto Rico. The group, which Rome, Ga.; Massac County, 111.; committee were Paul Youmans,
forts at a high level to correct this
view
therefore the inclusion of did not submit bids for issues ag¬ Monroe, La.; River Rouge, Mich.; Bosworth, Sullivan & Co., -Chair¬
undesirable trend. Unfortunately,
Canada irr the sterling
exchange gregating $5,457,000 principal Bayonne, New Brunswick, Perth man; Karl L. Mayer, J. A. Hogle
however, the attitude of the vari¬
system, could have a revolutionary amount, was the high bidder for Amboy, Rahway, South Amboy &
Co.; and George S. Writer,
ous British ministerial visitors to
influence on the
exchange posi¬ 63 of the issues for which it and Union City, N. J.; Goldsboro, Peters, Writer & Christensen, Inc.
Canada
Labor

banking group,

investment

An

*

-

,

has

not

sympathetic

contributed

settlement

to

of

a

the

tion

of

would

the

pound.

entail

Although this

short-term

a

competed.

difficult issues involved.

world.

,

bonds

During the week the external
the bond market was
again slightly lower
principally as
section of

result of persistent
offerings of
Canadian Nationals. The
recorded
internals were marked
up in sym¬
pathy with the strength of the
Canadian dollar which
touched a
new
recent high point of
41/8%.
Stocks were lower in
sympathy
with the sharp
drop in New York
with
the
industrials and senior
golds bearing the brunt of "the
a

CANADIAN BONDS
Government
Provincial
Municipal

Corporation

selling

pressure.

and

base-metal
affected and met

'■■■•

NY

To
Freeman &

1-1045

way,
that

New

Boston 0, Mass.




Rejoin Firm
Company, 61 Broad¬

York

City, announce
Harvey S. Rent.on, Jr. has
joined the firm as manager of 'its
municipal bond department. The
firm also

Fifty Coiigreas Street

pal managers, six other firms are
of the group: Goldman,

managers

Sachs &

to

Co.;

G.

announces

Patterson

ganization
ager of
ment.

on

will

that Howard

rejoin

Nov. 1, 1951

its railroad bond

Harriman Ripley

Annual

an

Housing

INCORPORATED

4-2400

,

In addition to the three princi¬

able

Harvey Recifon With
Freeman; Patterson

New York 5, N.Y.

2.25%,

v

CANADIAN STOCKS

WORTH

yield-scale groups: Scale B, 1.00%
to
2.10%; Scale C, 1.00% to
2.175%; and Scale D, 1.00% to

Contract

A.E. Ames&Co.

C.; Puerto Rico; Providence,
I.; Kingsport, Tenn.; and Ever¬
ett, Wash.
Bonds of the following authori¬
ties are priced to yield from 1.00%
R.

the

or¬

as man¬

Local

the

Administration

Public

and

the

Public

bonds,

Agency issuing the
the opinions of bond

in

of the Local Public

contribu¬

Agency avail¬

able for the purpose, will be suf¬
ficient to pay the principal of and

interest
The
of

on

United

1937,

faith

of

as

the

bonds

when

due.

States Housing Act
amended, pledges the

the

United

States

to

the

payment of the annual contribu¬
tions

by the Public Housing Ad¬

ministration pursuant to said An¬

Contributions

Bonds

authority

of

<the

are

Contracts.

New York
City
priced to yield from

Rocky Moun¬

Ala.; Mesa, Ariz.; tain Group. • • • '
North Little Rock, Ark.; Calexico,
Holtville, Port Hueneme, Riverbank,
San Buenaventura
and
"County of Yolo; Calif.-; Daytona
Beach, Key West,' Miami Beach i
and
Sanford, Fla.; Hartwell,
Halsey, Stuart & Co. Inc. are of¬
Lavonia,
McRae,
Rockm art,
fering $3,500,000 first mortgage
Waynesboro and West "Point, Ga.;
bonds, 3%% series due 1981 of
Canton
and
West
Point, Miss.;
Wisconsin Michigan Power Co. at
Bonham, Brownwood, Del Rio,
102.31%
and
accrued
interest;
Eagle Pas?, Electra, Ennis, GladeAward of the bonds was made at
water, Hamilton, Haskell, Hearne,
competitive sale on Monday on a
Henderson, Honey Grove, Jeffer¬
as per,

,

Halsey, Stuart Offers

•

Wise. Mich. Pow. Bds.

'

son,

and

Texas.

In

addition

agers,

the

to

the

nine

underwriting

man¬

group

of

bid

101.66%.

Net

proceeds from

ditional

company

of

cost

&

Co.;

Alex.

Brown

&

Sons; Coffin & Burr Incorporated;
Hemphill, Noyes,
Graham, Parsons
Co.; Hornblower & Weeks; Lee Higginson
Corporation; F. S. Moseley & Co.;
Paine, Webber, Jackson & Curtis;

to retire

promissory

(proceeds

which

program

$1,000,000

not^s held

from' the $He

used

were

the

gram),

Stearns

construction

banks which mature Feb.

1952

be

to be applied toward the

its

short-term

Dillon &

Corporation;
White, Weld & Co.; A. C. Allyn
and Company Incorporated; Bear,

will

general funds of the

through 1952,
by

stock

common

to the

added

part

Securities

the sale of

the bonds and from the sale of ad¬

comprises: Drexel & Co.; Eastman,

Webster

annual

in¬

an¬

ent Chairman of the

and' J

which, together with other funds

The

be

fqr the .1952 maturities to 2.25%

Co.; Equitable Securities
Corporation;
Merrill
Lynch,
Pierce, Fenner & Beane; Stone &

counsel.

will

for the 1988-1992 maturities: Boaz

tions will be payable in an amount

nual

depart¬

between

as

nual convention of the Investment

&

Contributions

officers

of the close of the

new

stalled

Bankers Association in Holly¬
wood, Fla., Nov. 25-30. Walter J.'
Coughlin, Coughlin & Co. is pres¬

McKinney, Mission, Olney,
Seymour and Sweetwater, Texas;
Co. Incorporated; Smith, Barney
and Clallam County, Wash.
& Co.; Shields & Company; The
Bonds of the following authori¬
First Boston Corporation; and R.
ties are being offered by states
W.. Pressprich & Co.
as a group: New Jersey; Alabama;
The bonds of each issue will
The Western oil
California, except County of Kern;
be secured by a pledge of annual
issues were less
Florida; Georgia, except Albany,
contributions unconditionally pay¬ Brunswick and
with
Rome; Mississippi;
steady sup¬

port at the lower levels.

Two Wall Street

being reoffered in three

are

The

N.

':

•

sacri¬

Coupon rates of 2% and 2Vs%
fice on the part of
Canada, in the for the tax exempt bonds, most
There is little doubt that a Con¬
long run the benefits of greatly of which mature
serially; from
servative or Coalition government
expanded trade with the
sterling. 1953 to 1992, inclusive, were sped-,
headed
by
Winston
Churchill area would far
outweigh the ini¬ fied by the group. Some of the
would view this vitally important tial
disadvantages. The fuller em¬ issues offered, however, have an
question
in
a
totally different ployment of the economic
strength initial -maturityJn 1952 and a few
light. Visionary statesmanship and of
the
British
Commonwealth have final maturities'in 1987, 1989,
imaginative planning would re¬ would also do much
to relieve 1990
and 1991.
place
the
previous apathy
and the burden of
responsibility of
The group placed privately
thinking in terms of restrictions. this country in its
struggle for $2,409,000 Mercer County, Pa.
At the present time Canada is al¬
economic stability of the Western
bonds. The remaining $109,511,000
most
wholly divorced from the
many

1951

the

and

to

finance

construction

balance

available for other

15*
of

in.

pro¬

will

be

corporate pur¬

poses.
•v.

Regular

bonds

redemption
be

may

made

the

at^,'prices

ranging
from
105.31%
fo
par.
Special redemption prices declined
,

from

Estabrook & Co.;

102.32%

Wisconsin

is

engaged

to par.

Michigan Power

in

the

Co.

generation,

transmission

and

electric

in Wisconsin and
peninsula of Michi¬

in

the

distribution

of

energy
upper

Schoellkopf, Hutton. & Pomeroy, gan. The company furnishes di¬
Inc.; American Securities Corpo¬ rectly electric service in 167 com¬
ration; Braun, Bosworth & Co. munities having an estimated pop¬
Incorporated; R. S. Dickson & ulation of 188.000.

.Volume 174

Number 5058

Continued

from first

.

The Commercial and Financial Chronicle

.

.

t

11

(1565)

not advocate

selling more than a
fcmall part of investment
holdings,

page

Stock Holdings Should
Not Be Distuibed!

I've given up

My

Of Investment Bankers Association

thying to help them.v

experience

them

Joseph Johnson Nominated for President

in-and-out traders,

As for the

j

prefer

is

to

that

rather than to make

of

many

have

their

CHICAGO, 111.—Joseph T. Johnson, President, The Milwaukee
Company, investment banking house of Milwaukee, Wise., has

fun.,

serious ef¬

a

been nominated

fort to accumulate wealth.

Association of
other

In

in 1937. The "half" time

was

1937, when
stocks were
"high," the top price-earnings ra-

in 1946, when the more specu¬
lative stocks were a sale but the
was

good

(

ones

A few that

the

are
was

"false

alarm'! of

1923

thing"),

in

any

outbreak of

was

investors

1933,

August

in Korea.

when

The real

suffered

war

who

minor

these

late

not

times

the

in

14

drop

any

through

was

Gethsemanes,

announced by Laurence M. Marks,

was

Share

a

t.

yield at

cent

par

-value

stock

common

j

;

of

Gearko Inc?

at $1 per share.
present 5%% in
Of the proceeds to be received
years.except 1933,
from the sale of these
6%; 1937, when -it
shares, the

}

was

7.2%; 1941 and 1942, when it
above 7%; and in 1948, 1949

company proposes to use approxi¬

mately $45,000 to
debtedness.

'•

1950.

and

the next President of the Investment Bankers

as

America, it

.

Gearhart, Kinnard & Otis, Inc.
are
offering 200,000 shares of 1-

ended

years

the

as

it

-

.

Offered at $1

;

earnings at

The dividend

recent

of
1939, the Truman election, and the

of

summer

9.3

1946.

high

as

-

(|G3rkO lltC* SlOCK

the low of the Tear has not been

the
the

was

break

the

with

(I

than

time

any

did

ratio

lower

"false

to mind

come

at the time, it

sure,

"real

many

.

^

times.

17

was

The

Oh, there have been
alarms."

tio

not.

were

21

'

current in¬

pay

The

balance

will

be

how¬
'Remember that we are not deal¬ used, as received, for the acquisi¬
ever,
found glory stored up for
them in bigger profits than were ing in the same equities we traded tion of additional oil properties
and the drilling of eight wells on
realized by the "smarter" people 20 years ago, 10 years -ago, 5 years
two additional leaseholds adjacent
who avoided the temporary dis¬ ago, or even a year ago. Dividend
Joseph
.to the company's Gamm lease, and
tress but lost their positions.
payout in recent years has been
for
working
capital and
other .
low; and book values, which are
Monday Morning Quarterbacking as much understated as they were corporate purposes- The purchase '<■
.

Boles

Ewing Thomas

Laurence M. Marks

T. Johnson

Walter W. Craigie

.

Difficult

As

^

overstated 30 years ^go,

Monday morning quarter¬
back, it looks easy to profit from

increasing.

a

how

all

You

know,

of

too,

provides

that

no

shares

stock

will

be

until

shares

50,000
have

common.w...stock

of

been

the broker commissions "out" and

purbalance
chased.
sheets.
Some plants are insured
at two, three and even four times I - Gearko-- Inc.; was * incorporated
In New York on Feb. 4, 1949.
Ib
the carrying cost. - ""
April, of this year, the company
Bopk value of the Dow back in
1937 was only $90 a share.; At the acquired its first oil leasehold and

commissions "back

end of 1951 it will be not far from

10%

a-

or

15%

a

decline

in

is

the

;.Not all stocks behave alike. You
don't

sell

the

at

top.

You

dividends.

Worst

in."
of

don't

You pay
You

all,

lose

if

valuation ,in

plant

.....

Dow, but in practice it is different.

buy back at the bottom.

in

$205

you

share.'

a

how

Look

since

that time

has acquired

fur-

ther

oil-producing properties. The
company has acquired oil, gas and

has

it

W dm

•.

v

.

•_

~

<:

•
>

been going up:
1942, $116; 1943,
you pay an unnec¬
mineral
leaseholds ° covering
an .•
capital gains tax—often at $121; 1944, $127; 1945, $130; 1946,
aggregate
of
approximately
96
$138; 1947, $150; 1948, $164; 1949,
the higher short-term rate.
acres located in Caddo Parish, La.
I
$174; and 1950, $192.
We people who have a lot of
As of Sept. 30, 1951, it had com- 1

have

profits,

WSr^L

issued

common.

-and;; sold

there

understatement

much

.contract

have been

essary

Norman

Walter A. Schmidt

George W. Davis

P.

Smith

_

investor customers know that the
clients
run

who

do

the

are

in

best

who

ones

the

T Good Industrial Shares Best

long

.If

quality "growth" stocks and trade
We also know

least.

that the

ents who try to "beat, "thel
rather than invest make

comparative showing.
in

this

you go

us,

■?

buy

oil

and

people are
stocks today,

frequently

when, they

1932 to

"historically''

1929

"new

this .is

time

a

extreme.
that

it

era,"
to

overlook

me

expect, neither

Ipdeed, it

the

to

seems

to me
showing a

Wholesome] inclination to make
path right down through the

cen¬

.

-

lot

a

high

stocks

is

added

that
assets

TORONTO, Ont., Canada

-for

are

1951-52:

the

following officers

Honorary President:

and

Honorary

Vice-President: Wil¬
A. E. Ames & Co.

relatively

who

People

do

much

a

than I do

mating this year's earnings
Dow

at

$27

or

$28

a

dend

payout at

i

the

a

and

share.

This

means

the

recehtly has been selling

not

at

far from

9V2 to 10 times earnings

to return-

roughly 5%%..

:

find that in

we

1930, the last time the Dow sold
at

270,

times

and

15.7

the

1929,

earnings
11.0

ranged

between

29.4

times

earnings to
return yield 2x/2% to 4.7%.

offer
In

it

ratio

low,

tween

a

range

and

of the

was

yield

19.7

price-

high

ranged

high of 3V2% and

'

of 1.9%.




a

Rails,] and cOuld

sometime

to
be¬
low

.

31.

and

in 1929 and served the new company as Vice-President until
his election to his present position in 1934. The Milwaukee Com-i

t

95

to

100

j:

KITCHENER,
Winners

be realized
1

-tournament
Waterloo

and

I would not give a

hoot,

Dec.

between

in

the

of-

Group

the

Canada.— ;
annual* golf

;

Kitchener- *

of* the

and

secondmajor

of the airplane he has been a flying
enthusiast and has followed closely the development of commer¬
cial aviation.
In 1939 he was elected to the Board pf Northwest
Airlines.
He has been an unusually active director of that com¬
Since the early days

and has flown on every inaugural flight as
its routes in this country and abroad.

Northwest ex¬

tended

Recently Mr. Johnson was elected a director of National

his

Throughout

Group!

Ont.,
first

Madison,

Paul,

•■•Next to investment banking Mr. Johnson has a
interest;

business

'

in

St.

Midwest Stock Exchange.

Thrift

Committee, Inc.

IDAG Kitchener- j
Waterloo

Chicago,

in

Wausau and is a member of the

pany

:

offices

has .branch

pany

'

G.

\

established The Milwaukee Com¬

In association with others he

-

Industrials

Jan.

that the Dow at 263

Looking back,

.

the

share for dividends.

Earnings and Dividend YieldsV

D.

to

pany

r

.

My projection, subject to cor¬
rection as" the pattern fills itself
out, is that the immediate price
objectives could be 290 to 300 in

share for earnings and at $14 to
a

Company, Milwaukee, and
the time of its merger

McAlpine,

Co.;

Golf Winners in

Immediate Price Objectives

mates run at between $24 and $25
$14.50

D.

&

Simpson; Midland Securities Ltd.

share after

between $15

W.

Cathers

continued with that organization up
with the First Wisconsin National Bank.

*

B.'Tindale, Walwyn, Fisher & •
Seagram, Bank of *

Brawley,

issues led
This time the leadership
has
been
seized' by the
"blue
chips;"
*
I

Looking ahead to
next' year, their preliminary esti¬
a

Washington Univer¬

.

..

<

the way.

esti¬

on

At that time the

speculative low-priced

higher taxes. They place the divi¬
$15!5.0

H.

had in 1943-1946.

more

are

-

investment banking business?;
Wofford College, Spartanburg,' South :
the

in

Carolina, the state of his birth, and George

Co. Ltd.; M. H.

10% in dividends.

5 This rise in stocks has been Nova Scotia.
Ex
Officio:
quite different from the one we

inexpensive

They look high
.only in relation to the era of unusually To w appraisal through
which we have so recently passed.
scientific job

attended

He

1923.

been

the Holly¬

»

.

,

to return 7% to

stocks

rather than dear.

'

since

has

Johnson

Mr.

Robson,

stocks sell at 4 to 7 times earnings

By all time-worn bench marks of
are

scheduled for November 25-30 at

Hotel, Hollywood, Florida.

per

,

still

wood Beach

J. Lindsay

anything, the precedent shat¬
The price-earnings ratios, yields
tering confusions and perpetual
Secretary:- J.
B. MacFarlane,
crises of this dynamic and fasci¬ and asset values I have given have Wood, Gundy & Co. Ltd.
' ' ]
Treasurer: D. E. Morrison, Royal
nating period of world evolution been based on the Dow Jones Av¬
and revolution tend to bring about erage, which is heavily weighted Securities Corp. Ltd.
undervaluation rather than over¬ with "blue chips" and stocks of
Committee:
T. H. Baker, Ross,
valuation of common stocks.
"institutional" quality. The Dow Knowles & Co.; R. J. Trow, W. C.
Average type of stock is higher Pitfield & Co". Ltd.; B. A. Mallon,
Stocks Still Cheap
than- the
market,
Run-of-mine McLeod, Young, Weir & Co. Ltd.;
measurements,

k
,

Graham, J. L. Graham & Co. Ltd.
liam

;

New York.

its annual convention

•

they

Smith,

Nominations, made by the Board of Governors, are considered
tantamount to election in the IBA, which will act on the ticket at

.

If

traditional

Norman

-

elected

?

Poole & Co., Philadelphia.
Merrill Lynch, Pierce, Fenner & Beane,

Walter A. Schmidt, Schmidt,

*

has

Skaggs & Co., San Francisco.

George W. Davis, Davis,
.

The

—

-

Columbus.
Craigie, F. W. Craigie & Co., Richmond.

Ewing T. Boles, The Ohio Company,

Officers 1951-1952

people fall for

that

say

the

get

!-

.

Walter W.

Toronto Bond Traders Association

you

■-

of the Association.

following nominees for Vice- ;

Johnson are the

Mr.

with

President:

-

getting too. far to the
the'Tight.
;

or

'

Co., New York, President

Laurence M. Marks &
Named

'

Ltd.; Clifford G. Beatty, Beatty,
sity; and upon completion of his education in 1915 he entered the
share than "they ever Webster & Co. Ltd.
service of the United States Treasury Department as internal
did before—so they must sell for
President:
C. G. Lee, Bache & ] revenue agent. He was shortly assigned to the Milwaukee office
many more dollars per share or Company.
and in 1920 was made agent in charge of the Wisconsin Division.
they are. cheaper than in former i". Vice-President: J. L. Hayman,
Three years later he entered the investment banking business
years. * ,
*
Goulding, Rose & Co. Ltd.
as manager of the bond department of the Second Ward Securities,.
assets

a

ter without

left

producing

>

added eariiing power in' equities.
Stocks : represent more earnings,
more dividends and more physical

seems

is

market

additional

■

Toronto Bond Traders

if

- r

-The fallacy that

swings from fear of
anticipation 6f a new 1928-

two

oil wells since that date.

prospects, as so
doing. When you

for your money.-

While I recognize that sentiment

producing oil wells on
leaseholds, and has com¬

buy these good
than you: are

shares

many

-

13

out and buy undetermined

mining

exhibit

can

prove-that point.
i

industrial

human guinea pigs to

as

really want; a property
against inflation you are

much safer if you

sorry

a

Some of

profession,

ourselves

cli¬

pleted

you

hedge

market"

these

Inflation Hedge

T

:

the

own

pleted

Ontario ;

District of the Investment Dealers t

Mr.

29-year

Johnson

has

career

given

in

the

investment banking
toward

generously of his time

advancing the interests of the securities industry.
industry-wide Investment Bankers Conference
and

in

the

intervening

years

national committees of the IBA.
sented

has served

on

various group and

From 1945 through 1948 he repre¬

the Central States Group on the IBA

and was elected

He was on the

Committee in 1934

Board of Governors

Vice-President of the Association in each year

a

] t since 1948.
<■
market com¬ Association of Canada were: !
>:;'v
■:X-\
unwilling to j Low Gross —Jack Pequegnat,,|
During more recent years Mr. Johnson has given particular
change his mind. Stubbornness in Cochran, Murray & Co. Limited. K'-v
attention to the public relations aspects of the securities business,
Low Net—John MacAvity, W. C.
this matter of market forecasting
according to President Marks, who pointed out that Mr. Johnson
& Company Limited. '
can make a man "(Consistent" with¬ JPitfield
Second Low Gross—Bill Meikle, ; was Chairman of a special committee in 1948 that recommended
out making him' "right";
and it
incidentally,

mentator

can

fish

make

I

don't

stood,
300

is

I

a

is

fellow who lives in

a

bowl

terribly

as

for

who

uncomfortable

as

a

wrong.

want
am

to

not

be

misunder¬

predicting that
bull market

the top of the

Osier & Hammond.

well |

r

a

High Gross—Bill Stewart, Mid¬

land Securities Limited.
;

■

-

With Townsend, Dabney
(Special to The Financial Chronicle)

of the 1950's,
BOSTON,
Mass. — Ernest
F.
I simply think it
might be the approximate peak of George has become affiliated with
a phase.of the rise.
If I knew the Townsend, Dabney & Tyson, 30
"correction" would carry us back State Street, members of the New
to 240, or 20% from 300, I would York and Boston Stock Exchanges.

of

a

Public

Education

Committee,

Johnson has been Chairman for the past

/

This led to the

public education program for the Association.

establishment

"Through the Public Education Committee,"

;

"member

signed

firms

have

to 'improve

been

stimulated to

public understanding

Johnson and his committee have done a

cult

of

which Mr.

four years.

Mr. Marks added,

join the compaign de-

of our business.

Mr.

splendid job with a diffi¬

assignment, and we can expect an extension of the progress

made under his

leadership in the forthcoming year."

J

P2

The Commercial and Financial Chronicle

(1566)

Now Sole
t

MUTUAL

Proprietor

FUND

.

.

.

Thursday, October 25, 1951

CHANGES

PORTFOLIO

No. of

(Special to The Financial Chronicle)

Mutual Funds

WORCESTER, Mass.—G. Wayne
is now sole proprietor of
Gibbs & Coe, 507 Main Street.

Gibbs

Stock-

■i

Shares

By ROBERT R. RICH

Period

Fund-

New Portfolio

Holdings

Allied Chemical

J

THE IRANIAN

jNational

the oil industry,

1

SECURITIES

Account

Details and

Prospectus
upon

industry.
"If it were not

petroleum

Open

Investment

SERIES

request

it is pointed out

by Calvin Bullock, in its current
"Perspective," which analyzes the

Program
An

the current outlook for

factors in

Investment

i

and

shadows

<4

development over¬
obscures all other

The firm stated,
for

the

Iran

industry might be
facing a condition of somewhat
over-ample inventories."
After
noting
various
bullish
factors in the oil outlook, the firm
notes in
its current study that,
"on the basis of the

SECURITIES &

NATIONAL

RESEARCH CORPORATION
120 Broadway, New

York 5, N. Y,

look
tious

cau¬

more

a

oil

the

toward

attitude

shares

term out¬

near

believe that

we

is

justified at this time.
be emphasized that
this viewpoint should not be con¬
strued as indicating extreme pes¬
should

"It

simism but rather that the indus¬

try

WELLINGTON

does

not

the

present

same

degree of attraction to the investor
it did last year.

as

For the longer

term, the oil shares still represent
a participation in
one of the pre¬
mier

industries

growth

in

our

"The effect of the Iranian shut¬
down

ilL
from

prospectus
your

investment dealer
Of
'-'fovr:"'

PHILADELPHIA

7, FA.

months of

this year.
"Of
more
basic
consequence,
the outlook is for a lower level
of

automobile

due

to

production

and

reduced

residential

con¬

demand

although

probably

not

of too great a significance in
the
over-all
picture.
In
short,
there

present elements in the

are

petroleum

highly

outlook

bearish

which

should

if

at

not

least

engender caution."
"As regards the course of earn¬

ings next year," Bullock's Per¬
spective stated, "it is difficult to

your

investment dealer

visualize

or

CALVIN BULLOCK
Established 1394
New York

One Wall Street

on

the basis of the indus¬

"Dividends represent

a

low pay¬

on
earnings but in view of
increased capital investments
that must be made by the
industry

it is

v'.'V;

.

difficult to

see

any

substan¬

tial increase in present rates even
if earnings continue high."

Concerning the
deficiency
by the Iranian shutdown,
Calvin Bullock points out that the
chief difficulty lies not in replac¬
ing the Iranian crude, but in findadequate refining facilities.

caused

Custodian Funds

heavy

or

be

particu¬

Putnam

Anderson-Prichard

7,500

LOUIS

H.

President

WHITEHEAD

and

member

Committee of
& Research

series

a

of

Policy

Securities

Corporation, is making

of

York

New

National

Vice-

lectures
the

on

in

upstate

subject "Infla¬

His

talk

includes

appraisal

an

of the current economic situation.

He has

already appeared

as

prin¬

cipal speaker at. the Rotary Clubs
of

Binghamton and Horseheads,
New York; at the Kiwanis Clubs
of
Elmira
and
Waverly,
New
York; and at the Foreman's Club
of Elmira, New York.

Whitehead,

lecturer and

an

experienced

former member of

a

New

York

Institute

of

Finance,

to the New York

successor

Stock

Exchange Institute, on the sub¬
jects of "Current Economic De¬
velopments
Affecting Invest¬

Gas Industries

8,000

Mullins Mfg. Co.
N. Y., Chic. & St. L.
Rhinelander Paper

United

Putnam

Qtr. end. Sep. 30

2,500

Putnam

Qtr. end. Sep. 30

Mfrs.

&

October

Growth Cos.

Additions to
*«.

—

—

September

Portfolio Holdings
October

Growth Cos.

—

Selected Amer.

1,000

Canada Dry
mm

mm

mm mm

mm

September
Wk. end. Oct. 15

Delaware

'

Selected Amer.

Ekco Products

General Foods

Delaware

mm mm mm.

Gulf Oil

mm

Hydro-Elec.

pfd.
Tel.

&

September
September

Growth Cos.

mm m. mm

mm mm mm

Wk. end. Oct. 6

Wk. end. Oct. 15

Growth Cos.

mm mm mm mm

Haloid

September

Delaware

rnmmmmmmrn.

General Foods

September

Growth Cos.

2,000

Tel.

October

Growth Cos.

mm

mm.

Crown Cork & Seal

mm

Growth Cos.

m

—

Cooper Bessemer

mm+m

September
Wk. end. Oct. 6

Delaware

Cities Service

Internat'l

September

Growth Cos.

Wk. end. Oct. 6

Delaware

mm

Selected Amer.

1,000

Iowa-Illinois Gas & Elec.

September
Wk. end. Oct. 6

Delaware

Koppers Co.

Growth Cos.

Koppers Co.
Montgomery Ward
Radio Corp. of America

September
October

Growth Cos.

'nmrnmmmmm

100

Dreyfus

September

500

;

September

Growth Cos.

September

.mm

A. O. Smith

Selected Amer.

mmrnmrnmrnm

H. H. Robertson

Growth Cos.

September

Union Tank Car

mm

mm

mm

Speere Carbon

mm

mm

mm

mm.

mm

mm

mm

United Aircraft

mm

mm

Growth Cos.

October

Delaware

Wk. end. Oct. 15

Delaware

U. S. Foil "B"

mm.mm.

U. S. Gypsum

mm

mm

mm

mm

Wk. end. Oct. 15

Growth Cos.

September

Growth Cos.

mmm

September

Growth Cos.

mm

■'mmmmmmmm

U. S. Plywood

Wk. end. Oct. 6

Delaware

mm mm

United Aircraft

CLOSED-END REPORTS
Tri-Continental
final

dividend

will

be

the

15

for

American Natural Gas

Corporation's

September

on

stock

common

considerably

the

cents

larger than
share declared

per

third quarter, its
third
report anticipates.
The
will be determined in

quarter
dividend

December and net investment in¬
come
is normally larger in the

dency

for

special

Gross

assets

or

extra

of

Tri-Continental

the

nine

months

ended

Sept.

30 and compare with
$140,464,729
three months earlier.

Net

$20.85

Grayson Robinson

Growth Cos.

Supply

United Fruit

1,900
Eliminated

September

Selected Amer.

200

September

Dreyfus

1,000

September

Selected Amer.

.

National Gypsum

September

September

From Portfolios

American Can

100

Dreyfus

Amer. Sugar

200

Dreyfus

Refining

Consolidated Gas Utilities

September
September

Selected Amer.

equivalent to

were

share of

common

stock

September
'

Growth Cos.

Copper Range
du Pont de Nemours

200

September.

'Dreyfus

September

Growth Cos.

Elliott Co.
Firestone Tire & Rubber

100

October

Dreyfus

September

Grayson Robinson

Growth Cos.

Gulf Oil

assets
per

October

Selected Amer.

1,000

divi¬

in that period.

September

Growth Cos.

Crucible Steel

fourth quarter because of the ten¬

dends to be paid

Selected Amer.

3,200

Carrier

National

October

Growth Cos.

Baltimore & Ohio, com.

Delaware

Iowa-Illinois Gas & Elec.

600

October

Wk. end. Oct. 15

Dreyfus

September

on

Sept. 30, compared with $18.12

Louisville & Nashv. RR.

Selected Amer.

September

on

June 30 and $17.08 at the be¬

McBee

Growth Cos.

September

ginning of the
ages

Asset

year.

$314.33

were

cover¬

share

per

on

383,703 shares of preferred. stock

Continued

on

page

23

McKesson & Robbins

J

L*—

Putnam Fund

Qtr. end. Sep. 30

National Supply

Selected Amer.

Pacific Mills

Putnam Fund

Qtr. end. Sep. 30

Pantepec Oil of Venezuela

Delaware

Wk. end. Oct. 15

/•>''

;

ywVv

U. S. Plywood, 3% B

pfd.

100

September

Dreyfus

»

September *

.

Participation in

fycK

investing tkeir capital in

Fundamental Investors, Inc«

BONDS

-

Selected Amer.

ments," and "Mutual Funds."

INVESTMENT FUNDS

,

f,ooo

American Cyanamid
Baltimore & Ohio, pfd.

Int'l

September

6,000

RR.

Corp.

Merch.

July

Growth Cos.

Robbins Mills

Ultrasonics

October

Cos.

•rtTSTo*

Certificates of

.

September

Qtr. end. Sep. 30

Putnam

Growth

Gulf Oil Corp.

Deere

tion—What to do About It."

>

Qtr. end. Sep. 30

Durez Plastics & Chem.

larly affected as Iran is an impor¬
tant producer of this product."

for

the

eystone

will

try's outlook any material im-i
Corporation rose by $13,431,992 in
provement in profits at best, and
the three months ended
Sept. 30
it is possible for weakness in re¬
fined product price to cause an according to Francis F. Randolph,
Chairman of the Board and Presi¬
appreciable, but not a major, de¬
dent. Gross assets are $153,896,721
cline in earnings.
out

*

residual

market

5,000

Reductions in Portfolio Holdings

indeterminate decline in mili¬

tary

Prospectus from

:The

oil

Selected Amer.

Smelting

struction.

an

A Mutual Investment Fund

now

its apex
seasonally high first quarter

1952.

of

fuel

"Finally, if a truce should be
effected in Korea there would be

SHARES

into
become

sumption advanced rapidly in the the faculty of Syracuse University,
final half of 1950 and that the College of Business Administra¬
rate of gain shown by the industry tion, for the
past ten years has
will taper off rapidly in the final conducted lecture courses at the

smaller installations of oil burners

DIVIDEND

but

dig

to

with the squeeze reaching
in the

Mr.
con¬

immediately

ability
it has

definite factor in the oil market

a

economy.

"It should be recalled that

of

stocks,

felt

not

was

because

1,000

American

I

I

STOCK FUND

(Series B1-B2-B3-B4)

PREFERRED STOCKS

Bank Group Shares

(Series K1-K2)

COMMON STOCKS

50

Congress Street, Boston 9, Mass.

your
ten

me

prospectuses

Insurance Group Shares

(Mutual

describing

v.;v;

Investment

■--'i'

N

Institutional

Shares,

Ltd.

a

rived

Stock

from

net

HARE'S
19

RECTOR

by

LTD.

de¬

dividend
per

income,

same

meeting, the Directors

declared

a

fifty-three

cents per share derived

from

special

dividend

of

D15

Diversified Common Stock Fund

security profits realized during
fiscal

year,

also payable

to shareholders

of record October 16,

H. K.

PROSPECTUSES

AVAILABLE

ON

THESE

MUTUAL

FUNDS

Bradford, President

STREET

6,

48 Wall Street

N. Y.

Prospectus may be obtained from

State




YORK

Diversified Preferred Stock Fund

shareholders of record October 16.

...

NEW

Diversified Investment Fund

of

share de¬

dividend

October 30, 1951
Distributed

Fund, Inc.,

regular

payable October 30, 1951, to

the past

Funds,

Address

Investors

clared

At the

Organization and the shares of your

Name

City
J

Funds)'

01

Manhattan Bond Fund, Inc*

On October 15,1951, the Directors
of

Stock and Bond Group
Shares

Keystone Company

Please send

Notice of 25th

Consecutive Quarterly Dividend

twenty-three cents

(Series S1-S2-S3-S4)

The

Aviation Group Shares

the above or local dealer.

STOCK

FUND

Hugh \V. Long

hleu> York 5

and

Company

Incorporated

Minneapolis, Minnesota
New York

Chicago

Los Angeles

yolume 174

Number 5058

.

.

.

The Commercial and Financial Chronicle

.

Continued from
page 22
and

$8,132

Continued

Changing Investment Policies
Of Mutual Savings Banks

cents

cordance
sion

declared

was

with

in

earlier

an

to

place the
quarterly dividend

ac¬

conclu¬

common

on

a

basis.
Total dividends declared for the
year 1951 are 45 cents per share,
amount

an

expected

the

first

nine

months,

the

were

no

major

distribution

nental

of

tween

common

changes

A

assets

be¬

Sept.

Common

30,

stocks,

represented

gross assets less current

corporate

bonds

a

liabilities;

dicated

ond

of

to

of

trustee

Long-term marketable

$80.98

large insur¬
step out of the
market, as they did

is not

govern¬

when their out¬

summer

commitments

mortgage

especially heavy, the yield
tends

to

ings

banks

find

again

of

stock

common

bonds attractive.

Municipal'and other tax-exempt
have

attractive

not

as

as

rule

a

class

a

with

compares

net

asset

been

banks
for

income

tax

stock

common

a

U.

S.

International

&

Securities'

and second preferred stocks in
total
amount
of
$39,408,333,

In

of

the
to

appreciation,

dividends

considered.

the

approximately 99% of

owns

second

80% of the

preferred

and
stock of U. S.

common

stock

types

For example,

mort¬

a

consider¬

a

able burden of expense, and only
the net return to the bank after
such expense is

with

the

FHA

give

fairly comparable

yield

ministrative

V

governments,

on

a

minimum of ad¬

expense.

insured

mortgages now
return, after servicing costs,

a

3.75%

pared

Corp.

return

incurred in making

portfolio creates

gage

dividends.

Securities

net

alternative

to

differential

3.90%,

of

with

a

yield

perhaps 1%

com¬

or

governments

after

allowance for expense factors.
small part of this

difference

be put

reserve

aside

of

costs

as

a

foreclosure

in

the

In

comparing

several

tion

For

of

tax

default

and

on

Sept. 30 had net assets of $9,-

561,483

before

deducting

funded

debt, compared with $8,462,759
Pec.

31

and $8,117,301

on

Sept

on

30, 1950.
assets

Net
were

equal

principal

$193.81

to

$8,314

amount

stock, $36.46

of

share

per

per

stock, and $4.21
B stock.

Sept.

on

30,
per

1951,
$1,000

debentures,

of

preferred

share of Class A
share of Class

per

On Dec. 31 asset values

face

value

held,

is

were

ly,

$31.10 and $2.84, respective¬

and

jvere

on

Sept.

30,

1950,

they

$29.41 and $2.41, respectively.

3/eon^e

,

PUTNAM

ited

4%

of

to

the

loan

guarantee,
per

is

covered

reserve

a

ton

50 State

Street, Boston

Li f f t » »»»»»»» »




as

the

of 1%

desir¬

able.

Conventional

mortgages

attractive,

more

with

from

the

signifi¬

that por¬
a 52%

on

subject to

and

more

taxable

bonds

of

com¬

Consideration

would have to be given, however,
to
the fact that investment
in

long-term

tax-empt

tion

reduced

in

Federal

a

bonds

in¬

risk of market deprecia¬
should income tax rates be
a

the
tax

banks endure

the

of

future, or should

on mutual savings
only for the period

national

emergency,

or

should the supply of tax-exempts
be

increased

greatly

so

in

the

future that such bonds would tend
to

sell

a

reserve

yield levels closer to
those offered by comparable qual¬
ity taxable bonds.

than 1 %

over

them

to

This

of

is

a

comparable maturity.
differential than

wider

available

insurance
for all the

derived

from

ance

their portfolios by
small percentage of
equities, as life insur¬

companies in most states

down the dif¬

a

differential of less than 50

more

against risk assets and of surplus
deposits, should ac¬
complish the twin purposes of

funds against

safeguarding the strength of the

I

think

return

a

to

savings

banking

system

moderately higher dividend

pay¬

ments to encourage

such

over,

thrift. More¬
prospective asset

a

distribution spells increased serv¬
ice on the part of mutual savings
banks to the

all-important private
enterprise segment of our national
economy.

saver.

Conclusion
it

time

National Securities

Expands Personnel

Rather, asset
In recognition of the need for
bound to change additional
manpower to service an

is

to

conditions

time

with

economic

national

and

bank

policies.

expanding business, Henry
Simonson, Jr., President of Na¬

ever

J.

tional Securities & Research

Corp.,

investment

policy
the sound objectives

pursue

of

securing adequate safety and
liquidity, reasonable market sta¬

bility,

and

yield

the

highest

consistent

average

with these

other

aims.
The

mutual

savings

of

banks

the country today hold almost $22
billion in loans and investments.

Government

obligations
as
the
single classification, ap¬
proximate $10 billion; mortgage

largest
loans

over
$9 billion, and bonds
other than governments $2.5 bil¬

lion.

In the

loans

gage

because

period ahead, mort¬

of the

taking

D.

T.

Gillmor, Jr.

I. Gardner Jones, Jr.,

increase

bound to

are

of out¬

up

standing commitments and the
making of new loans, while the
proportion of. government security
holdings is likely to decline over
the longer run.

The

distribution

present

of

assets still reflects the preoccupa¬
tion with Treasury financing dur¬

authorized to do.

now

The

yield available from the

age

The defense program may tempo¬

rarily

aver¬

com¬

interrupt

this

trend; with
peace, it should soon be resumed.
Over the longer
as

government

may expect

secur¬

ity holdings to form a declining
York Stock Exchange
today is proportion of portfolios until they
are
only perhaps a quarter of
over 6%.
Corporations as a whole
currently distribute as dividends earning assets, while mortgage
less

so
a

listed

stocks

mon

than

on

their

half

the

net

New

income,

that prevailing dividends have
cushion of protection against a

decline in profits.

run, moreover,

the

Massachusetts

past.

author¬

izes

equity investment by mutual
savings
banks,
although such
purchases are limited to bank
I believe that it would be

all mutual savings

banks to invest in common stocks
in

amounts

half

of

divided
the

not

their

exceeding "one-

surplus

and

un¬

profits

average

accounts, to raise
rate of return real¬

loans

should

of

such

equity

financing with equity,
as against borrowed, capital.
Intercorporate dividends
are
taxable only to the extent of 15%
corporate

tual

savings bank is subject to an

actual

tax

rate

of

7.8%, whereas
taxable interest income is subject
to a tax rate of 52%.
In view of

men,

selling

in

terri¬

below.

These V

all experienced in re¬
of mutual funds, Mr

Simonson

stated, will work with
officers of the company who have
been

handling the wholesale dis¬

at

of

sayings

speaking,

become

Generally

banks,

bonds

corporate

tribution

National

of

funds

for

David T. Gillmor, Jr., with res¬

are

northern

Los

Gatos, Calif., will
Rufus

L*

likely to be bought actively only

dence
will

savings banks
about

60

those

to

mon

ings

can

obtain yields of

basis

75

available

points

from

long-term

governments.

stocks

will

over

Com¬

probably

be

limited scale by sav¬
in most, if not all

on a

banks

investment

laws

af¬

equity
purchases
brought into line with those

ap¬

once

plicable

to

panies.
equities

will

only for
mutual

life

a

insurance

most,

At

com¬

however,

provide

an

part of the

savings banks.

are

outlet

funds of
Buying of

.

California.

at

Rochester,

in

Jones

the northeastern

Benjamin J. Kerr, Jr., with res¬
will

assist Vice-President L. L. Moor¬
in

man

the

that mutual

sav¬

of

Texas/ Ar¬

western Tennessee.

John

M.

residence

assist

Smith

the

in

own

California;

Jr., with
Pa., will

G.

Sellers

territory.

eastern

Affiliations—Mr.

formerly

of his

Morton,

Pittsburgh,

Vice-President

Former
mor

R.

at

was

retail

Mr.

Gill¬

sole proprietor
organization in

Jones,

Jr.,

with F. L. Putnam of Boston;
had

Southwest;

required to pay a

States

kansas, Louisiana, Mississippi and

ties has become very

are

Ira

states.

idence at San Antonio, Texas,

Kerr

now

York*

New

Vice-President

assist

both tax-exempt bonds and equi¬

much more

•

I. Gardner Jones, Jr., with resi¬

when insurance company demand
is less aggressive so that mutual

ings banks

con¬

indicated

as

distribu¬

funds

larger percentage of assets, say
Carter in the wholesale distribu¬
15-20%.
However, holdings of
tion of National Securities Series
corporates could form a lower
in
the
States
of New
Mexico,
percentage, if tax-exempt bonds
should replace them in the favor Colorado, Utah, Nevada, Idaho and

attractive,

law,

new

tail

National

Vice-President

will probably

a

mitting mutual savings banks to

tax

tories

wholesale

the

in
of

assist

sideration should be given to per¬

the

-joined

tion

idence

also

the

position of dividend

under

have

bonds

difference in safety, liquidity and

income

New York City,
following men
the organization to

Broadway,

announced that the

many years:

expand

they will

adequate

favored

120

to a point
again constitute
more than half the total of savings
bank assets.
Corporate and other
where

marketable

'

J. M. R. Morton, Jr.

Benjamin J. Kerr, Jr.

assist

term, therefore,

savings banks continue to grow,

we

the

for

ef¬

more

adequate rate of

the

basis points between governments
and
high-quality corporates in-,

compensation

even

.

encouraging savings by offering

are

a
year ago, when
companies eagerly bid of their amount. This means that
high quality corporates taxable dividend income to a mu¬

ferential to around 30 basis points
at that time.
Most savings banks

de¬

their
basic
economic
function of stimulating thrift and

states,
fecting

ments

pay

This will enable

perform

fectively

basis

govern¬

place

ing the World War II period.
With the passage of time, the mu¬
subject to Federal
tual
savings banks may be
taxation, the case for equity in¬
vestment by these institutions is expected to devote a larger pro¬
portion of their resources to the
stronger than ever.
financing of private enterprise,
Mutual savings banks would be
rather than government deficits.
able to step up the average yield

Authorization

than

will

position
to
higher rates of dividends to

bought

more

banks

in

positors in time.

Corporate bonds of high quality investment would also conform to
yield over 3% now, or about 50 the national policy of encouraging
points

liberation, and accompanied by
the further building up of reserves

become

the yield ized.

governments.

a

de¬

Now that mutual savings banks

have

sound to permit

of lk of 1%

savings

themselves

at

the

against possible future losses, the
return is close to 4%, or consider¬

over

careful

while paving the way for eventual

must

yields

quality.

stocks.

lending rate rising to 5%
in many communities.
After ex¬
penses

from

parable

are

home

find
Putnam Fond Distributors. Inc.

by

of xk

is regarded

annum

available and held

cf

government

with

mutual

savings

Over the long
the retained earn¬
interest rate is lim¬ ings should make possible divi¬
and, since only part dend increases, as they have in

The

was

FUND

FHA

over

bonds.

on

3/e

the

reserve

considered

differential

ably

,

of

of

A

mortgages
adequate by
many bankers.
Mortgages guar¬
anteed by the Veterans Admin¬
istration give a
narrower
yield

even

of the Class A and Class B stocks

invocation

provisions.

gradually

time

a

in

of 1/20 of 1% per annum,
tp accu¬
mulate a total reserve of 1% of

insurance

rate,

resources

& International.

of

national policies prevail, however,

example,

income

may

Capital Administration Company,

period

earnings

on

tual

of

become

types of investments, the

a

event

accomplished

tax

By increasing the rate of return
derived from their portfolios, mu¬

Whatever economic conditions and

obligations

investing

of

such

tax-

great interest to them.

A

against

had

expenses,

and

exempt

volves

administering them must be

of

Foreign

the

from

expenses

and

future realized investment profits
as are distributed as capital
gain
&

that

return

2.50%.

comparing

which involve

both corporations are "regulated"

issues

market

investment, with yields avail¬
on
government obligations,

the

as

investment companies and expect
to be relieved of that tax on such

S.

market

able

r-,

unrealized

the

nearer

available

No allowance has been made for

U.

greater

term

-

bring

down to

per share of common stock
outstanding. This compares with
net assets on Sept. 30,
1950 of
$46,836,777, equivalent to $234.18
per share of first preferred stock
and $2.85 per share of common

Stock.

shorter

would

$9.17

on

secure

savings bank would have to hold

some

Sept. 30 net assets of $62,189,005
were
equivalent to $310.95 per
share of first preferred stock out¬
standing and, after deducting the
value in liquidation of the first

tax

To

stability by spacing of maturities,

long

after

4%

share of

per

have

insurance

earnings

on

rise.

$54.52

outstanding.

Life

authority.

been made subject,
from
time, to the Federal

depreciation should interest rates

market

stocks.

common

distribution

have

the first

volve

of

should be

apart from any authority to invest
a limited amount of their funds in

income

savings bank assets.

Now that mutual savings

share of first preferred stock and

risk

preferred stock in¬

a

authorization

gations.

cant.

limited

Such

is apparent in the
light of history, that there can be
no
single ideal
distribution
of

yield of 2%
from
municipal or public housing bonds
is equivalent to a return of about

Sept.

on

tests,

bonds.

vestment

savings banks.
Other investors,
subject to high and rising income
tax rates, bid up prices and de¬
press yields of tax-exempt obli¬

30, 1950 of $68,698,156, equivalent to $686.98 per

value

in

after dividends and expenses.
These shifts in asset
distribution,

meeting speci¬
lieu of corporate

mutual

to

return after taxes is most

approximately 2.60%.
Such
bonds provide the highest
degree
of safety and
liquidity, and in¬

sav¬

corporate

ment bonds now provide a return

out¬

50

exceed

basis points and some mutual

bonds

The yield on government securi¬
ties provides a yardstick
by which
all other yields can be judged.

standing.
This

A

the

of

share

per

$15,000,000, to

invest¬

where necessary to realize a rea¬
sonable rate of return on savings.

preferred stocks in the total

amount

bonds.

ernment

$94,760,869,
$947.61 per share
of first preferred stock outstand¬
ing and, after deducting the value
in liquidation of the first and sec¬
equivalent

from

in
assuming risk
for
risk's sake, without adequate com¬
pensation.
Risk is justified only

in¬

an

derived

justified

Foreign

Sept. 30 had

on

value

whenever

How¬

companies

differential

consider

point would hardly be justified in
holding anything other than gov¬

preferred
stocks, 19.74%; and net cash and
U.
S.
Government
securities,
1.14%.
Securities

must

Were it not for the yield
factor,
savings bank from its own view¬

of

and

Net assets of U, S. and

yield

bank

formulating its portfolio policy.

on

79.12%

ever,

corporate

standing

ments, as well as their safety,
liquidity and market stability, in

stocks, senior se¬
during the third

curities and cash

quarter.

savings

the

stability involved.

ance

were

stocks

companies

market

early last

Relative Yields From Savings
Bank Investments

Tri-Conti-

Corporation's

is

trend.

after

idend.
There

growth

by restrictive ceilings on
dividend rates, savings bank de¬
posits will continued their upward

providing for preferred stock div¬

in

unless

arrested

roughly equal to the

company's net investment income
for

that,

Federal

guaranteed

fied

idend from net investment income
15

23

invest in high-grade preferred and

14

page

$1,000

per

principal
amount of debentures
outstanding.
During the third quarter, a div¬
of

from

(1567)

with

active

been

and

Mr.

Hornblower

Philadelphia.

&

in

was

Mr.
the

Morton was
Weeks

ol!

&

Chronicle

The Commercial and Financial

,(1568)
Continued

from first

.

.

Thursday, October 25, 1951

.

(currency and demand deposits in
banks).

page

(3) Gold serves as a means of
adjusting international balances.

.

Does Our Gold

Policy
Make Any Sense?

Illinois Central

that

discussing years have averaged $12.33 and
St. Louis-San Francisco we stated
last year soared to $22.33.
ine
that the stock was on a regular 1950 results, however, were dis$3 annual dividend basis. This was torted by
extraordinary credits
in error, or perhaps wishful think- and there can hardly be any hope
ing—the rate is only $2.50. This of their duplication. On the other
does not change our opinion of hand, it does appear reasonable to
the shares.
Since we wrote our expect that the earnings this year
column on the road the stock of will run between $13 and $15. If
the controlled New Mexico and so, the management could well afArizona
Land
Company, which ford, in the opinion of most anahad been very buoyant on vague lysts, to pay out more than $3 a
rumors of important mineral disshare without danger of being accoveries,
has
retreated
quite cused of abandoning sound finansharply.
Partly in reflection of cial
policies.
Common
share
that, and partly in sympathy with earnings of' $15 would be equivageneral
market
considerations, lent, after meeting the preferred
Frisco common has also declined, dividend requirement, to over $20
Two

weeks

the

States

and

chosen

wrong
_

of our policies on other countries
we try to offset by gifts and socalled economic aid.

had

Britain

Great

gold

w

parities

-

°ur «0,d Policy

for

With all

very day the economists
First let us see what he says
wori^ disagree on the about money. He does not clearly
causes 0f the "great depression" distinguish between money and
and particularly on the reasons for credit. To Allan Sproul "Money
jts intensity and duration.
Most is a convenience devised by man

0f

<p0
^he

There is another railroad whose

Chicago. Prudential
Insurance Co', has already contracted for the purchase of air
rights over part of the tract. Now
that the ice has been broken it
is expected that other sales should

planation

to facilitate his economic life.
It
is a standard of value and a me-

of the economists think that the
1929 depression was an ordinary
business-recession,
only
exceptionally severe. I rather share the

viewed

is

having

as

ties.

d i

i d end

v

policies are being
with particular interest

watched

by followers of railroad securities,
That is Illinois Central.
It had
been

anticipated in some quarters
on
the Jan. 2, 1952
nent
quarterly disbursement might be
that

action

week.

last

taken
will

November

Presumably

decided

be

not

meeting.

of the last of the

until

on

This

it
the

was one

major railroads

to resume dividends after the de-

pression
the

on

year

on a

$3 annual basis

still

prevails.

rate

Illinois

Central

had

the

for

reasons

plenty

should

high.

debt

It had

structure

the

trend

a

maturity

for

and

Malcolm Saunders

all

of

Raymond Partner

them.

For

this

policies

may

year

(and it is known that

have

these

of

have

been

some

retired

been

mK-iwu

this

u

i

in

non-equipment debt by $176
since
the beginning of
cut

a

of

than

more

50%.

under $29 million

questionably
that

there

and

lower

are

I

nothing but serial
until 1963. In com¬
company

July 31

on

had cash and equivalent of

round¬

ly $55 million.
...

The road
ficient

ticular

one

is

to

....

.

„

traditionally
operate, with

reputation for

an

ef-

a par-

being

able

to control costs rapidly in any periods of stress. Share earnings on

the

Saunders

Mass. —Malcolm

has

been

in

common

during the past ten

level

of

in

order

of

prices

submit

if

that

14Q

admitted

Raymond

q+q+o

Mr

RAILROAD

&

had

with depression

we

Be Given at McMaster
HAMILTON, ONT., Canada—In
cooperation with investment deal¬
ers

located

in Hamilton,

McMaster

commenced

—-

Lecturers
F,

in the

Baker,

c.

course

Oct.
are

2.

P. J.

Wood,

Gundy & Co.,
A. Main, Nesbitt, Thorn& Co., Ltd.
I. C. Heggie W

Ltd.;
SOn

the first
Course on

University

Investment

H.~

Pitfield

Co

&

Ltd*

r'

return to the

does not

Investment Course lo

N

steiner, A. E. Ames & Co., Ltd;;
R. R. Labatt, Cochran, Murray &
Co. Ltd.. and T. H. L. Gallagher,
Ltd., and T. H. L. Gallagher,
Dominion Securities Corpn. Ltd.

Spencer Frank to Be
Faroll Co. Partner
Spencer
the

W.
,

New

If $).

New York 4, N. Y.

Telephone BOwlIng: Green 9-6400
Members Nat'l Assn. Securities Dealers, Inc.

Frank, member of
.
--

York

will become




we

.

.

of general

■

of °ur hfioney supply.
to

seems

think

that

"paper

'

probably
says

that

noticed

money
a

is

that

a

stand-

medium of

ex-

without mentioning that

it must be able to

serve

as

store

a

by

which

I

suppose

he

it seems to

me

have revealed

the

tary

matters,

must

inspire'

people.

in-

Referring to a higher price ;fofr
gold requested by the gold minj"g industry in order to increase
supply -of. gold,Mr.S;prqul obr
seDLe,s: '
2
'
"There is no lack of monetary
■

„

,

.

of carrying on the business
country nor is-there likely
*° ^e- ^
economics-of perP.etual inflation to argue that a
means

of wealth.

war.

an

In>m his_remarks before the
*r0.m his remarks
^mer*c3n ®an^ors Association?,

that if

our

anything in
it is that

money

the

rise *n the commodity price-level

serve prop-

should be followed by an arbin¬

confidence

Money cannot

times

mone-

to

erly even
change if

as

a

to

Co.,

a

SECURITIES
Selected Situations at all Times

25 Broad Street

attribute

prices.

on

change,

sane-

of

by Americans
.,

and defla- -many

economists in

our

w"ateyer tuJ'r

iwUPP?£

country

Q.j,,r,rWo

use

gold standard.

Stock

Exchange,

partner in the Exchange member firm of Faroll &
a

them

matter to

as

gold,

money

history, it seems unrealistic to me
to deny the importance of money

It

whether

newly
covering

on

Nov. 1st.

Mr.

„

store of wealth. This fact is
particularly obvious-in countries
which have suffered from serious
monetary
mismanagement,
like
France and Italy. Experience

as a

or

paper-money

budgetary

deficits,

.

credit exThey believe

or

panded by banks.

c

.

•

,

trust our currency, or other evils

deniable that

an

international cur-

tary .authority. •

Mr. ^prmai-

iso

would ensue- They advocate a rency must necessarily be a mer- ^/"ed to say that it the gold
P°licy of paper-money and credit chandise universally desired, as is coverage oi our ^iienc> ana aeinflation without

any

the

consequences

world.

We

convertibility

on

regard as to the case of gold. In the final anthe

profess

rest

to

of

favor

stability and free

of

currencies,

and

the freedom of international trade.
Yet

domestic

monetary and
economic policies are such that we
are

our

pushing the other free

tries

into

policies.

nationalistic

Ever since

couneconomic

we

have

is

our

alysis, international balances

to

believe

that

it

come

dollar

P°slts with the Fedeial Reserve
seems more

can

be settled only with a merchandise acceptable to and desired by
the creditor.
:

than adequate,

it is simply due to the tact that in
Congress arbitrarily redqeed
the gold coverage to ?o% from
^

have examined the

40% °n currency, and 3o% on de-

concept of money held by Sproul
and most other economists, let us

P°slts as provided in the federal
B^serve Act. If the gold coverage
bad n°t been reduced, even our
huge amount of gold would-soon
prove inadequate. • Furthermore,

Now that

see

what

we

our

gold policy is: y

(1) We maintain

gold bullion

an

standard

internation

by buying
selling gold freely at a fixed
Frank, which gives value to gold we are price of $35 a fine ounce in transwho will withdraw from partnerpursuing
nationalistic
monetary actions with foreign governments
ship in Garfield & Co., Oct. 31st, policies, and we expect the rest and central banks,
will
make
his
headquarters at of the world to get in line with'
(1) Gold serves as the moneFaroll &
Company's New York our
actions
and
their
consetary reserve of the country as a
office, 67 Wall Street.
quences.
Some of the ill-effects backing for*our money supply

Company

f1

(debt) is complete,
Sproul seenis to forget that

'J3

the rise irt-the ^comi^oaity price
^ i
1S
em.ng fs
*rhe result of paper money
we can play God once more as we
.£101? whicn_. s®rY.e : J°+Uc0^er
tried in the 1920s with such dis- .shows that the more the Govern- budgetary deficits of the toovernmal failure.
Our modern wizards ment controls the printing-presses l.n*en': during the war. He is atraid
think
they can devise policies, of money, the more people want
3n inJ^.ea®® in *
f
reserve
mainly inflationary, so as to have gold as money.
base, while he. accepts a ,discrea constantly rising level of prices
Even if one admits that an iso-' t10nary control of the reserve basp
without ever reaching the" state lated country might get along.
when either our people would dis- with a paper-money, it seems ungoveinmem
d Iuul'e.-

created

and further the

1 * CO

a

ard of value and

reached

the

.

nutshell":

Sproul

have

to

inflation

the

the

Specialists in

JB.Jt&faimi

use

supreme

You

1929

devalued
the

tified

partnership

is

equipments
parison, the

the

gold held
,

prin¬

confis^-

medium of ex- trary increase in the pi ice or gold
and hence
in the reserve base,
people are not convinced that the purchasing power ^Us. Permitting and perhaps pro.of the present day economic fal- of the money will remain stable ^oting additional deposit expanlacies would not enjoy the credit during a relatively long period of -slon ancl 3 further-upward "movethey do. One of the most dam- time.
Since 1918 the people 01
prices. We have been
aging consequences of
the
in- most
European
countries
were Plagueci,
it anytning, witn an
adequate diagnosis of the 1929 de- concerned mainly with the prob- ,over~supp/^.
TTn^?n?yCfin. iece™
pression is the distrust of the gold lem of the monetary stability of yfars> and tPe United States gold
L.
standard. It has come to be identheir incomes and wealth.
Too stock, at the present price, is large

Malcolm L. Saunders

BOSTON,

we

effect

telligent, intelligible and realistic
diagnosis of the 1929 depression,
and of the 1937 recession, many

un¬

After

now.

of

the

mT11933?

government

our

Gold, paper-money means bank notes, has the subank-notes', credit, all are inter- Pr®roe attribute of general acceptchangeable, one as good money as abhity. Why then should he be
the other, and I assume all hav- £0 worried about people in the
ing the same short- and long-term United States hoarding gold?

a

the intensity and dura-

could

cate

of what moral

name

So here you have the theory in

depression.
I
only to emphasize my con-

because

More¬

the 1952-1955 maturities had
been pared by the end of last year

over,

to

we

the

ciple did

3 backing

in

that

In

Bon. Our modern wizards dream dealing with monetary issues take .tiier gr0
,ln, ?e mone^ £upp£
148 State Street. Mr. Saunders £ a worldi or at least of our coun- for granted the element: of conneeded for years ahe9d^
170 - has been with the firm for many t
jn
,erpetual boom fed by fidence in the currency. Keeping
This is indeed an extraordinary
1941, years in charge of trading.
inflation, and of course without in mind the lessons of monetary statement. The confusion between

1951) the company has wriuMd its
390

of

monetary means during

and

made

rise

prohibit

governments

people to hold gold merely be¬
they have a bad conscience.

cause

acceptance."

1929

been

in order.

that

concomitant

the

tion

Disregarding any open market
purchases of 1952-1955 maturities

on our

ion

the

depression if in
1925 the dollar and the pound-had

liberal dividend

more

are now

huge

the

tion

so long
there has de¬
feeling
in
financial

a

complete disregard
monetary inflation

a

are

Sproul appears not to see
much use for gold domestically as

pound,^ which were

avoided

because stockholders went

circles that

„

viction

without any return,

veloped

the

want

be¬

reason,

with

causes

practical
now

mainly to

due

domes-

internationally.
internationally,
internal busi
busi-

more

people

paper-money (and '
bank deposit accounts) which has

ness

prices during the war and the period immediately after the war.
This is not the time to discuss the

All avail¬

this problem is

purposes

hind

For

in

expressed

as

was

of the

and

and

working

reduction.

dollars,

fixed

needs,
therefore, had to be dedicated to
debt

prices,

tically, and
but to carry
but to

...

able cash not needed for the prop¬

erties

gold

of

Is

of

'

schedule

during the early 1950s.

The fundamental downward

that

same time the governments confiscate it to their own advantage,
.
While I am prepared not to insist on gold coin convertibility, I
think that people should be free
to buy, sell, import or export gold
under whatever shape or form,
At the origin of all national currencies there is a metal currency,
If people are deprived of the right
and habit of holding gold, the gold
standard gives the impression of
an artificial device, which it is
not. Besides, free transactions in
gold make it easier for the average citizen to discern inflation in
the early stages. I believe that
Professor Rist is right in his opin-

I suppose that it is by mere
chance that gold serves as money.
What does Sproul say about gold:
"in this country we still retain

gold

avail¬

deny to our people the right to
hold gold under the pretext that
people misuse „.
gold, while at the
_
_ .

-

attachment to

is

fact

be

not

purposes.

Our people
did
not
board gold in the 1920's even at
the peak of inflation in 1929. We

apparently money does not
be a valuable merchan-

.some

should

hoarding

currency.

dise.

economic

and

it is generally acceptable."
So

need to

$100 million, wrong gold parities of the dollar

burdensome
particularly

a

and

debt

onerous

lars.

the development,

even

were

at least

get

as
:

policies followed during and after

In-

Central

Illinois

that

opinion

though earnings dur¬
ing the major part of the period
lapse,

credit

monetary,

to

lean

estimates

formed

dividend

long

most plausible ex-

of the
1929 depression is that an ordinary business-cycle, and readjustments made necessary by the

be.

will

value

ultimate

the

dium of exchange. Almost anything will serve as money so long

of the severity

forthcoming. It is impossible the war, were superposed on a
id of
to
estimate just how fast this fundamental downward trend of
-dolproject may develop or just what prices as expressed in gold-dol-

payments

Last

resumed

this

1932-1949,

view that the

be

paid and perhaps $150 million, out of

was

from

common

inclusive.
were

and

Nothing

cuts.

in

property

supposed
_ _

are

we

.

million.
Another highly favorable aspect
of the Illinois Central picture is
the start of the development of
some of its Lake Front real estate

disregarding

that,

their currencies when, starting in
1924, the European countries de- to have a gold policy. Let us first
cided one after another to return see what this policy is. To deto the gold - standard. In other scribe it, I shall follow mainly the
words, a wrong price for gold had famous speech of Allan Sproul,
been chosen in the middle of the President of the Federal Reserve
1920s when a great- number of Bank of New York, which he gave
countries decided to return to the before the American Bankers Asgold standard.
sociation in November, 1949.

the equity in
Frisco common
by most rail analysts
interesting potentiali-

Even

the Land company

The

United

cause

Gold

anxious to hoard gold only if they
lose confidence in their national

of
its real

devastating deflation

the .years 1929 to 1933 had
in the fact that the

in

ago

(4)

able for

what

and

mean
.

Mr. -Sproul

does

exactly

when he states:

"That

the

United-

States

has

large gold reserves (My note, ar¬

tificially increased by decreasing
the

gold

coverage

since

1945)

which could form the basis of an

Volume 174

additional
needed
He

money

it?"

can

that

Number 5058

.

.

.

supply,' if

The Commercial and Financial Chronicle

only either that
credit
(debt) can be

bank

monetized

that banks have the

or

possibility to expand

credit

(debt). Does Mr. Sproul not think
that there is
enough paper money
in our
monetary system backed by
government bonds? Does he
think
that bank ciedit
(debt) can be
expanded indefinitely without
serious dangers to

economy?

As

our

the

money and

"Walk

should

we

•

mean

devalue

our

in

currency

Carter

terms of gold. The other currencies will meanwhile have been left

free to find

realistic level in

a

lation to the dollar.
the view that

period

a

I do not share

Bank and Insurance Stocks
By

depression

severe

in order to change the gold value
of the dollar (and necessarily of
the other currencies).
Our aim
must be to prevent

severe

a

of

the

Great

Depression

Journal"

H.

E.

JOHNSON

This Week—Insurance Stocks
Insurance stocks

and

as

a

group

have, acted

,

well in the recent

very

decline in the equity market.

prolonged depression like the one
which began in 1929. The lesson

Street

25

Corbrey Joins

Oscar F. Kraft Co.

re-

should wait for

we

of

(1569)

reaction

The

cluded most

of

stock

the

past week has been substantial and in¬

Of course, some stocks show declines
greater than the averages.
On Oct. 15, 1951. the Dow-Jones In¬
dustrial Average of 30 stocks was at 275.74. At the close on Oct.
23, 1951, the average had declined to 263.50 or a decline of 12.24

seems

recently rightfully said, clear to me. By avoiding abuses
there may be such a
thing as easy of credit, by right wage and farm
money, but there is no such
thing policies, and by devaluing the
as easy debt.
I am rather of the main currencies
(and mainly the
opinion that already the
money dollar) in terms of gold, we may
supply, created by credit (debt) still have an
ordinary business
expansion is too large. Gold is the cycle, but we can avoid a severe
only
increase in money
supply depression. Haying permitted our
and
money
reserve
which
does price level to rise by 120% above
not
present any danger.
Mr. 1939
as
a
result mainly of the

groups.

.

Sproul takes exactly the opposite

view.

:

At

Most

Corbrey

ANGELES,

Calif.—Carter
——

Qscar

Kraft

F

&

national

that it is

chandise

value,

COm

530

serve

why

should

our

timing

ls

important.

The devalua-

ducers

should
:

gold pro- tion^ would be merely a sanction
selling gold at the of the fallan the purchasing powthey can get, and why er ®t, the dollar. A change in the

from
the

people of

the

any sense.

How to Restore
-

The

fact

is

that

tion

and

have

we

country the most

streamlined

infla-

engine in the world,

will

play havoc with

Z°l%
(2)

,

.

f

rountries would
The foreign countries wouia
have perhaps in excess of $2 b 1-

•

Monetary Order

mounted in this

powerful

"*

M

maA\ currencies would r
A Increase the production Ot

which

lion

(depending
am°unt of devaluation)

thl

freedom and that of
of the world.

year

deflclts Jn
tional payments.

thaP, giSis^
( )

welfare

our

and

a

.

be

result °f the

the

currency and
Further increase of

lead to chaos.
«=uunlv
.upply

-monev
TTioney

hv
by

evnan«?inn
expansion

nf
of

hank-credit (debt) has its natural
limitation and is
becoming in¬

is

lurnpik
neeme(J Attractive From

of

eredit,

™orId' A?

losses.
the

a

There

theTaLe oflrade

lon/ as monetary order
|re

ls not restored and exchange controls an(J import quotas
not

eradicated, large swings in inter-

h

™

res^oJp thpCnnnrfnC!

dollar

Keen

M'Ma

*m.

in

mind

hnw

have'accus"- j£alle

n

exceptionally

^^ht

revenues

make

the

ston

®Meanwhile

Boston Insurance

62

Camden

20

continue,

our

Let

me

now

the^gold

standard

the

nresent

skeleton-

^thTse^S^ouKS
...

to

us

...

*

the restoration of monetarv
monetary

Fidelity-Phenix

681/2

723/4

-41/4

78

Fire

57

59

—2

621/2-

49%

53

-31/2

22

22

58i,422%-

-1%
%
1/2

591/4,36%34

-

31

—2

142

-

-122

north-south, will extend ini-

tolly''the
ironv r
Ualiy

order.

dom

in

a

our
t

-

We

should
i

ii

■f"

As

soon

permit,

period.

as

return

rearranged
to

the world conditions

assuming

should

and

severely limit

™

*

as

naner

'credit"exciansion'rfnrine'thp
V
P "
during the

rearmament

limit

the

—
mone#

lt

/w p°h«es'and by restoring the
as
soon
as
world

da
dVU1Q^mriner paper goi^ standard

money inflation and

bank

t

wis-

xet

avoid further

4-

,

and

,
and

----economic

J

*

to

in

no

a

issue

man

economies

all

over

the

Fund

Fireman's

t(J

Ins.

341/2

351/4

Hanover

321/2

n e r

of currency

expansion of bank credit

Fire

Hartford

Fire

baoc
cage

of the
tnw

Pennsylvania
engineering

kjx.

a

the

says

firsmA. c?.m? A1!??

—a

hiehwavs

Zi*

heavy grades and

world,

McAndrew & Co. in
New Enlarged Quarters

126

*

case

on

the
,

should

all

exercised

on

European

main

countries

to

£0V<LeXC?ange control.s

their

uuuuium

state

to

their

currencies
restore

and

"a"

at

emu
and

the

apd re-

<u
at

a

stability

the

ment (and

Stopped

of

eir-

paper

a

of

ui

money
us

that

govern^

ticm

Is

of^the^trading

and

aprnnitfna

imnrmm +h*
improve the efficiency of tho
the

eration

and to

provide office

nn_

opac-

covering Northern California.

inflation,
we

Mark C.

should

resumption in the down¬
prices. xnui too umg a
Not tuu long

time after the downtrend of
prices
will
have
become

obvious,




tbeir offices at

?nnn
space

highways

ginia Turnpike. In the latter case
are many steep grades which

there

we

Mark
Mark
jviarK

C.

C.

Steinberg,

aieinoerg
Steinberg

e*
&

head
u-o.,
Co.,

are narrow

and tortuous,

The Turnpike forms a part of a
central trunk line system which

even'tually
mont

of North and

Vz

373/4-

%

731/2-

303/4

341/4

62

351/4

-21/4

381/2— 231/4

Z —1
—2

New Hampshire Fire__

391/2
751/4

—

.

37%
4OV2

Phoenix

771/4

Fire

Union

Insurance

St.

S. Fire

______

Westchester Fire

ance

42

; >

—

62

55%
38

841/4— 74

30%— 263/4

%

261/2

263/4
31

30%
383/4

30%
391/2

%

411/4— 34%

211/4

y4

221/4— 193/4

331/4— 28%

34%— 311/4

one

the favored groups in the stock market in recent months.

In contrast to such issues as the

shares have

vulnerable to

oils, metals and chemicals, insur¬
Thus, they were not

attracted little attention.

/ // r

sharp decline.

a

automobile

Operating difficulties such as increasing losses on
and fire lines have not been
move

particularly favorable for an upward

in insurance stocks. At the same time,

increasing investment

gives assurance that dividend payments will .be

income
so

-

of the reasons for the market action of insur¬
stocks in the past week is that these stocks have not been

among

ance

-

-

-

31

_

Fire & Marine..

Paul

-

21

Providence-Washington

there

was

reason

no

sufficiently

outlook for investment earnings is

fact, the

In

maintained,

for investors to sell their holdings.

in a number of instances.
month two companies, Fireman's Insurance of

favorable to justify larger payments
the

Within

last

Newark and U. S. Fire, have increased

their distributions. /

Fireman's Insurance of Newark increased its
ment from 35 cents to

to bring

semi-annual pay¬

40 cents and U. S. Fire paid a 10 cent extra

payments up to a rate of $1.50 a share.

During the next three months many of

the other insurance

companies will be considering dividend payments

payments over those of last year
creases are

a

reduction in

and some further modest in¬

definite possibility.

The above considerations are
extent

including year-

It is not expected there will be any

end and extras.

undoubtedly responsible to some

recent market action

for the

of INDIA. LIMITED
Bankers to the Government in

of insurance stocks.

ANALYSIS

Office:

26,

London,

Carolina and Georgia with the in¬

dustrial

districts

Toledo,

the

Colony, Kericho,

between

Cleveland

1

east

,

from

south

the
,

,

and

Paid-up

and

f

northwest and from

Available

Kenya, and Aden

Capital.

£2,000,000

Capital
Fund

£4,000,000

October 8

-

£2,500,000

Laird, Bissell & Meeds
Members New York Stock Exchange
Members

New

Bank conducts every description of
bonking and exchange business

York

Curb

Exchange

120 BROADWAY, NEW YORK 5, N. T.

Telephone:

a

south-

west to north and northeast.

Third Quarter 1951

Bishopsgate,
E. C.

and Zanzibar'

Subscribed

The

route

City

Bank Stocks

Branches ln India, Burma, Ceylon, Kenya

Central

area

of

embracing the

17 N. Y.

Kenya Colony and Uganda
Head

South

Pittsburgh. It also forms part of

Louis, passed away Oct. 21 at the
age of 70.

-

193/4
52

—1

Reserve

of

-

47

59

National

will connect the Pied-

section

Detroit,

St.
ot.

-

-

NATIONAL BANK

north

Steinberg

52%

58

which compete with the West Vir¬

lciui uismxig

commodations for retail salesmen

mainly ours) will have

history teaches
expect

principal

liav,=

'of department's'1haw been'made'to

la
laier
later

exchanges.

When

trend
ixwiu

our

be

■

■

651/4

Insurance

COMPARISON &

Furthermore
influence

65

-

343/4

have

saved is less and the limiting
effect of the grades on loads is
less than is the

-

75

•

»

but the total mile-

cuitous routes

33
128

-

641/2

operating

*

—

•

341/4

U.

The West Virginia Turnpike is
estimated to carry a higher proportion of motor truck traffic than

PnrV,nptin^

------

Security Insurance

compares

relatively

641/2

-

National Fire

oi the

Jn the
All
UlC

78

Ins. Co. of North Amer.__

Home

—

firm

~

56V4

Great American _____*

than any ot tne otnei tnree xurxi
pikes (Pennsylvania, Maine, New
Hampshire) now in operation, according to Coverdale & Colpitts,
consulting engineers. This latter
firm has recently completed an
exhaustive one and one-half year

Turnpike

(Newark)

Glens Falls Insurance.543/4

The West Virginia Turnpike of-

Ly; ofrthejpresently
turnpikes,

Phila

of

age

we

gold standard,

a

such

the

war,

conditions will permit. The alterwmuuontfwiu,permit me auernative
is
regimented
and
controlled

Assoc.

Fireman's

,

Qf g6 miles>

g

'Turnpfke'0which

present gold

Mow restraint

w

20 3/8

The Proposed turnpike which will

con-

festope the Roundness of our doliar' Bafrlng;war, the .future of the
£ee ^orld ?s mainly ln our hands-

.

54

89

briPpCCmiTpfl
had returned to

221/2-

191/4
-

—11/2

v.

after most countries

623/4-

—

88

-

s

22%-

86%

Possibly

and until world

68

%

—

-

Federal Insurance

with 63% of the total
Onr erext nhiprtiv^ mncf u*
bullion standard and permit the from the Pennsylvania Turnpike,
.pctnro (hp vrxia
restore the gold standard interna¬ free purchase and sale of gold as Coverdale & Colpitts went on to
well as the importation and exsay, however, that this figure reptionally as soon as the situation
portation of gold. The U. S. Trfcas- resented percentage of revenue,
in the world will make
such res¬
ur,y should be
permitted, at its rather than percentage of vehicles
toration possible.
We must also
be careful that the return to the discretion, to sell or buy gold, at using
the Turnpike.
Estimates
a^A
K
per ounce
in the free gold show that approximately 62% of
Iti + should be done with market.
the users of the Turnpike will be
tn
flvnid
Hpfiafilfn
f
Sa ^
The greatest service we can passenger cars, while 38% will be
lhf
render the free world is for us to trucks

in the 1920

Fire

75

201/4
723/4

.« «*

should maintain

^

61%

49

1/2

—

69

^

?

.

21%

611/4-

%
%
—33/4

68V2

Price Range

—31/4

4.

SBgs TStft"Jx S ass™.,
tionsmcrlate?Su°sf J^and

Change

55i/2

Agricultural Insurance
/; 68
Amer. Insur; (Newark)21 %

pro-

1951

Market
Oct. 15, 1951

52%

Continental Insurance

.

with vigilance

J®

issues did not decline at all.

Bid

anc* the -gold reserves need be
much higher than they otherwise
would have to be- °ne way to
economize, gold is to restore free study of the estimated traffic and

our

of the

Frice

estiheavy

The greatest girt wo pan maim
±ne
ereatest
gift we can make
to the free world is to stnn infla
tion and
nf
•

the following tabulation are those listed
— Continental
Insurance and Fidelity-

Exchange

Some

Aetna Insurance Co.

engineering

an

national

'

interesting to note that the two issues which show

Stock

Current

ing highways or railroads corn-

creasingly dangerous.

will

leading' fire insurance shares show declines of
A number of stocks, of course, experienced larger

declines in

largest
the

on

outstandinf in the fers rrv°truCk traff\cgfn particular'

payments

is

run

gold

inflation.

the

of

It

scarcity of adequate compet-

that all countries need

and

Most

only fractions.

Qtanrlnnint
Investment Standpoint
^

„

,

war

enced

which took place in other stock groups.

ed
$90,000,000 West Virginia
sounder Turnpike particularly interesting
from
an
investment
standpoint,

been i™Pail"edas

tmdge°^ry drficUsm°wUl,Z^es"rov "^ tat ctL
in

(This

to

more

international

rest

.Substantia1 further paper
money

confidence

-

the

on

decline

Monday.

The following table shows the current price, market on Oct.
15, 1951, the change between the two periods and the price range
so far this year for 26 fire insurance stocks:

#

West Virginia

parities (devaluation) of the
y

United

States not be free to buy and hold
gold? It is clear, I hope, that our
present gold policy does not
make

#

the

and

Phenix.

government prevent our

best price

259.76

as

During this period insurance stocks, although they experi¬
some declines, did not participate in the
general liquidation

-----

following severe deflation of prices due to
Wegt gixth street> Mr. Corbrey
chiefly the stoppage of inflation. This can
formeriy conducted his own inbalancing inter- best be accomplished by devaluaccounts, which means *n§ the dollar (and other curren- vestment business, Carter H. Cor^
Qhicago and Los
used mainly for its mer- cies)
in terms of gold, but the "
*

question: If gold is to
as a medium for

low

as

Average.

occurred during the trading of Friday,
Leading stocks in these three sessions
showed declines of several points. The market steadied on Tues¬
day and showed some recovery in the next trading session.

£0rkrey has become associated

I wish also to ask the

j

H.

Carter

LOS

inflation during the
should try to avoid a

we

of

Saturday

paper money

war,

time during the reaction the market sold

one

in the Dow-Jones

Bell

BArclay

Teletype—NY

7-3500

1-1248-49

(L. A. Gibbs, Manager Trading Dept.)
-

Trusteeships and Executorships
also undertaken

Specitdists in Bank Stockt

Chronicle

The Commercial and Financial

26

Continued from page

Is the

Salesman's Corner

Securities

and thanked him for
nice interview he had granted

the telephone

the proprietor of a
ladies apparel store and a buxom
female stalked into your estab¬
If you were

the

cub salesman. Then he
lishment, and you could easily dis¬ suggested that if the prospect, or
his wife, or any one in his family
cern that she weighed
well over
owned any securities, possibly he
two hundred on the hoof, and she
could
have
them carefully re¬
asked
you
to show her some
viewed without any charge or ob¬
-dresses, you wouldn't take her to
That suggestion imme¬
the rack where you kept your size ligation.
diately disclosed that the prospect
twelves, would you? You would
had some investments which he
tactfully guide her over to the
had made years ago, and he was
place where she would find her
not very happy about them.
An
exact size, without any discussion
on
your part.
You would know appointment was made, and as a
at a glance (if you understood your result, a reinvestment in other sit¬

have

to

the
she

decoration

of

amount

about

just

business)

the

for

use

the young

right

that

discussed

I heard recently that a
young

adjacent town

an

chance

have a better
a
speculative

might
make

to

He told the second sales¬
that he was not interested in

savings plan, or any slow in¬

he wanted to do with the money

certain

man

make
lost

of

was to try and
profit out of it. If he

invested

had

he

into

course

a

All

producing investments.

come

sell Mutual

to

He had taken

he

where

*V, Knowing Your Customer

Funds.

held, and put it to work

items he

any

very

some

all,

most of it, he was will¬

or

The reason for his

ing/to do so.

so
fortified,
the preference for speculative stocks
fellow took up his was that he had a guaranteed pen¬
headquarters in a new community sion for his old age, and that his

training

brave

and,

young

and went to work.. He lasted about

month.

don't

and social se¬

program

to

the home office.

he went back to

I

insurance

Discouraged and with no curity provided all he desired as
show for-his efforts to retirement income.. He wanted

business

what

know

him but I

to

to

happened

speculate, but he needed some

better -vehicles

than

the

he

ones

that his held; for-the purpose. ' X
putting -gome - people- -can usfe savings
him through such an experience.
plans, some need income; some de¬
I have some idea why he failed sire
X to - speculate, some -should
and, for the record, I can give you have a combination of safety, in¬
right here and now the actual case come and capital gains, some need
history of one of his calls. It was competent counsel and someone
can

assure

firm did him

you

favor by

no

si

yearUbyonds:::::2:000

10

to

Each bond drive

was

acterized

.

.

by

previous
case

as

one

World

in

not char-

than
usually

higher rate

a

was

The

I.

War

highest rate of all was 2.9% on
the E or savings bonds when held
their

maturity. From
viewpoint this consistently low pattern of rates kept
to

10-year

the Treasury's

119924537680

service cost of govern-

the

down

finally

broke

the vicious circle.

ment securities.

^e^grew

somXng

-executive who

-of age.

Bank

Reserve

in

This

had two children

man

college, and owned his home.

But

his
an

high
nose

expenses
to the

and taxes kept

grindstone to such

TORONTO, ONT., Canada—The
University
Course

of

Toronto

"How

to

Money" began

on

Extension

Invest

Your

extent that

all\ejcould do, re¬
garding his savings, w&^ to keep
his life insurance. Tlie young

ijp

salesman had

a

pleasant interview.

He told this prospect about diver¬

sification, about supervision, about
fair return

on

his money, about

the way Mutual Funds would re¬
lieve him of investment worries;
and

all

in

all, he presented his
proposition ably and well.
The
business

executive

and told

know

thanked

ment and if

such

a

given by
P. J.

Dec.
a

Oct. 10 and will
The

12.

course

is

Young,

L.

E.

Weir

Coyne,

Barlow,

&

Co.,

Deacon

Ltd.;

Findley

ion Securities Corpn.

glad to

P.

Coyne

invest¬

Ltd.

~

Co.,

Reserve

finally

System

tious for taking

to

came

propi-

that the time was

beiieve

acti0n. A $3 bil-

budgetary surplus made the

lion

TreaSury less resistant. Still, both
the

and

Treasury

President

the

rise in interest rates

a

X X' '

C The
a

Korean

War

be near-

may

settlement. The Iranian in-'

an

over.

card

and

experienced

BOSTON,

salesman

He picked up this same
decided to try and see

Mass.

Sides, Morse &

for himself what the real situation

Washington

might be.

the Boston Stock

He called the

man

on

—

Marilyn

B.

Lewis has been added to the staff
of

forced

which

down,

in

more

government securi-

one

or

depart.

even

It

President
men

more

two

Co., Inc.,

Street,

members

Exchange.

Prompt Wire Service

seems

Truman

of

Gold

to

year.

Currency

Demand Deposits
;

(1)

,

refinancing

SPOKANE

•

Outside Banks

DENVER

and

other

50 BROADWAY
Tel.:

New

WHitehallfe-6700




this
on

a

199
of

of

(l)to(2)

$11,600,000,000
11,400,000,000
13,800,000,000

SALT

•

LAKE

CITY

Exchange

NEW

YORK 4,

N. Y.

Teletype NY 1-1858

tion, but they fear that there will
be

more.

The

15.7

25,500,000,000

16.5

4,100,000,000
3,900,000,000
4,000,000,000

26,400,000,000
26,700,000,000
2-3,400,000,000

15.5
14.6
15.1

4,300,000,000

24,600,000,000

17.5

4,300,000,000

21,900,000,000

4,200,000,000

20,400,000,000

19.6
20.6 (high)

(Gold standard suspended. Resumed in 1934

following 41% devaluation.)
10,100,000,000
27,000,000,000
42,300,000,000

1945

20,100,000,000

106,000,000,000

24,200,000,000
22,700,000,000

111,600,000,000
117,700,000,000

As millions

bonds.

ful of

their savings bonds apd

that

dollars

much

cash in

get back,

buy only 55 to
that

those

as

in

they

70%
in¬

and
Con¬
gressional and Treasury permis¬
sion to keep their funds invested
in savings bonds at 2.9% is not

vested

1942,

1941,

1943,

mounts.

distrust

that

1944,

likely for long to allay that fear.
If

people

are

to continue to buy

bonds, something better than that
must be offered. Something must
be

done

rehabilitate

to

ernment's credit
not

have

age

so

gov¬

to

levels

unquestionably discour¬

productivity, and

ther

the

that taxes will

raised

be

to

that will

so

that fur¬

creation of money and bank

credit

be

can

avoided,

at least

or

limited.

Suggested Solutions
Last

Professor
Sumner
University

year

Slichter

of

Harvard

suggested that the Treasury issue
a bond bearing a Treasury
guar¬
antee to return to the

holder the

great flaw in this outwardly

Governors, Banking and Monetary

proposition is that such

speed
or

37.4
52.0
19.0
21.6
19.4

19.0
16.35

Statistics,
pp.
34,
536; Federal Reserve Bulletin.
Gold figures are for
December unless otherwise indicated; currency and deposit fig¬
ures
are
for June, 1914-22, thereafter for December.
Devalua¬
tion in 1933-34 increased our dollar holdings of gold by 69% and
tremendously stimulated gold mining; for it assured gold pro¬
ducers $35 an ounce instead of $20.67.

monetization of

up

cause

heavy losses to

institutions

holding the

unprivileged bonds. So also would
a

resurrection

of

Civil

the

War

plan of making government bonds
payable, interest and principal, in

gold dollars of the present weight
and fineness. Likewise blanket in¬

in

creases

interest

rates

all

on

government securities would cause
sizable readjustments in

'

kets

What

then

habilitate
nation

the

mar¬

all other securities.

for

the

has

can

be

bond

had

done

,

to

market?

considerable

X

re¬

The
ex¬

perience with war bonds since the
Civil War. Why not draw on that

experience? Why not learn some¬
thing from the advantages of the
methods used in three great wars,
and

yet avoid the disadvantages of

those

same

methods

as

much

as

possible?
The chief advantage
War

of

,

public is growing distrust¬

financial

26,100,000,000

Board

inflation. They

War II

World

sophisticated about price con¬
trols. They want no more infla¬
are

the debt

24,600,000,000

22,000,000,000

SOURCE:

Principal Exchanges

People still have vivid memories
price controls and of

of the OPA
the

would

11.0 (low)
16.3
16.8
17.5
17.1

1951, June 21,800,000,000
114,500,000,000
Avg. Ratio for gold standard years 1914-32..

1915

York Stock

work

to

inflation.

tity, would force down the value
of other unprivileged bonds. That

12.9%
17.0
18.9

4,200,000,000

1929__

now,

bonds, if issued in any great quan¬

4,100,000,000

.•

incentives

curbs

and leads to

attractive
Ratio

Demand Deposits Adjusted

>

right

any

tends

The

4,200,000,000

1935___:_.

J. A. HOGLE & CO.
ESTABLISHED

con-

and

Currency Outside Ranks and

Holdings

$1,500,000,000
2,000,000,000
1916——12,600,000,000

1950

Members

do

the

rate

tax

large-scale hostilities,
is as high as it was on the aver¬
age over World War II. It is above
the rate (25%) which the Austra¬
lian tax expert, Colin Clark, con¬
before

purchasing power in dollars
that the original investor put up.

(2)

Gold

great

a

same

1948

•

to

Either it must be all

1940—.a.

To Western Markets in
ANGELES

with

Adjusted, 1914-1951 X

:—

against

pitted

This

come.

probable that
will appoint

sympathetic

Treasury view. There is also
siderable

also

TABLE 4

1933-1934

FOR BROKERS AND DEALERS
LOS

others may

(Gold standard suspended.)
1920___—
2,600,000,000
23,700,000,000
1921—____
3,400,000,000
20,800,000,000
1922..
3,600,000,000
21,400,000,000
4,000,000,000
22,900,000,000

(Special to The Financial Chronicle)

is

weak

is

that

nation

dustrial

as

-

1917-1919

some

prospect—no money.

prices

That

Year—

Ltd.; and W.

Wilder, Wood, Gundy &

price level
on
in-

pressure

rise.

to

Ratio

Limited; T. P. N. Jaffray, Domin¬

was

been

obliged the Federal Reserve

buy

L.

B

back to the sales manager marked

took

to

McLeod,

Sides, Morse Adds

Then

turn

put

rates

security

panel of five lecturers:

day he had some
-extra money he would keep it in
mind. The prospect card was sent
—no

terest

have

When the

off.

that

rose,

Anderson, A. E. Ames & Co.

Limited;

fine

him that he

about

him

until

run

drawn

should

in¬
militarily

Civil War. Once again a great

local, state and Federal taxes take
almost 30%
of the national in¬

some

Board of Governors of the

^securities- at pegged jng

it

of

some

lives and died since the

out their

idea of the caUse. The
Federal

public

gave

prices; if there Were no other buy--cident may not prove so serious
ers.. This, pegging of government
as at first appeared. But Russia is

University

Investment Course

about 48 years

was

born and many persons

the

protested

F eder al

have been
have lived

generations

the

Newspapers

Reserye System. The'New-' main improved?:

boughL the

Bonds

Present-Day
Three

,

-

Toronto

situation.

inflati0n.

security prices was probably the very likely to create other situamost conspicuous feature of World tions. Therefore the big armament
War II securities. It was also their program must go ahead. It will
later followed by an experienced with whom
they can discuss their worsts And this pegging continued
really get under way this autumn,
salesman from the same firm who investments. Others
just want you after the war and was still prac- Meanwhile the
membership of the
reworked the leads.
X
to take their orders and wait until ticed as late as
early 1951. True, present seven-man Board of GovThe young salesman went out they call upon you. You can't sell the pattern of rates was allowed
ernors
of
the
Federal
Reserve
a size 12 when they want a 44.
with his prospect cards and he had
to rise somewhat.
System which mustered the courlearned a sales talk. So he called,
Federal Reserve Bank support- age to raise interest rates is due
and he talked, and he didn't sell.
purchases of government securi- for further changes. Marriner EcIt so happened on one of his calls
ties pumped bank credit into cir- cles has resigned, ]\J. S. Szymczak
that he
interviewed
a
business
culation just at the time when is\ contemplating
resigning, and
-

That is the background
against which World War III or
the big armament program must
be financed. It is still an explosive
higher.

would have to be done to stop

War I, people were and a removal of the bond "pegs."
urged to save by buying bonds. These protests served to highlight
It was even hinted that spending the controversy. On March 3 an
these savings after the war would agreement to remove the pegs on
prevent a depression. Partly to bonds was announced. Since then
remove any fear of not being able
bond prices have fallen and in¬
to market the bonds favorably, as terest rates have risen. Actually,
had been the case in 1920-22, the that is two ways of saying the
price was virtually -guaranteed, same thing. All this reflects an
That was essential; too, to main- - improved situation for the time
tain the "pattern of rates."..It was being. But is it sufficiently, imdone by the cooperation of the proved and how long will it reYork

rates

lower

are

agricultural nation that is mili¬
tarily strong. Again our financial
health is not good. Taxes are high;

that

y; As in World

Federal

prices

difference that bond
and
interest

only

in the

of 1950. This greatiy disturbed the

2.500

......

porarily "made"? We might read¬
ily find ourselves back on a longterm bond-support basis, with the

combination of circumwinter of 1950-51

a

1% a month during the latter part

875

Treasnrv rtU

Long-term bonds

the

man

a

vp/r

1

Only

The price level rose as much as

375

90-day Treasury bills

all this man de¬

unattractive speculative

out of the

stances.

firm sent

Interest rate

or

not understand it.
stances

Issue

sired to do was to take the money

circum¬ profit.

such

under

following

the

tabulation:

the

At best,

Funds.

long ago that there
things better left un¬

you

certain

are

Essentially, this was an account
had
no
need for Mutual

/

ing and the rest.
But her size,
that, you would keep out of the
discussion. Experience would have
taught

in

shown

of

"Pattern

wartime

Rates,"

better future

a

money

famous

would outlook were used to replace the
of unattractive holdings.

materials, cut, styl¬

her choice of

had

financed by

was

war

and bank credit
(about 10%) than of World War

creating

solves

which

basis,

the Federal Reserve must
temporarily "make a market" for
the longer issues. Sooner or later
there must be some longer issues.
Can we be sure that the market
that is then "made" is only tem¬
little,

ties to protect the government
security price level that the Treasury wanted maintained. And that
j
put more demand deposits into
One peculiar feature of World circulation and paved the way for
War II securities was that all is- a
second round of the same,
sues
of the same term had the process. The process was so subtle,
same interest rates. This was the
however, that most laymen did
this

less of

purpose

corpus.
You
be decided by

would let the sale

that

uations

her ample

covering

a

Thursday, October 25, 1951

.

short-term

7

Cycle of War Bond
Selling Completed?

DUTTON

By JOHN

a

.

.

(1570)

were

of the Civil

system was that the bonds
redeemable,
interest
and

principal, in gold and hence the
believed that his pur¬
chasing power was protected. The
chief disadvantage, of course, was

purchaser

Volume 174

Number 5058

.

The Commercial and Financial Chronicle

.

.

(1571)
permitting such bonds to be
chased

with

depreciated

backs.

tory. By the time

chief

advantage

War I bonds
did

of

World

and

much

worry

about

their market price. The major dis-

advantages

two: namely, that
sold to banks, and

were

too many were

that

the

market

for, their resale

temporarily very poor in the
depression of 1920-19^5.
The

chief

advantage

War II bonds
ment made

What
sell

unsuccessful,
them

to

market

back to

price.

not

Their

the

was

the

combine

most

Such

vantages.

cited

vajue>

a

they

in

the

who

a

like World War

the

need

As

.

said

was

to avoid

more

before,

and

if

more

fijnd

substitute

a

the

that

sup-

faVorites
next

it

takes

an

I

Sound

158,000

for

their

decade,

vestment

shares

company

firms

which

Co. 5%

offered

redeemable

preferred stock ($25
at $25.50 per share.
*•
Proceeds from the

and

with

a

sale

first

value)

par

added to treasury funds
as

will

a

investment values,

when

they

customers,

con¬

struction

program

esti¬

mated

cost

last

to

five

which

is

$65,000,000 for the

months

of

1951

$450,000,000 during the

Pnrfn<ir

Tlllw

PjrU,er'

15 times estimated earnings.

f|ons
n0

other

no

qualities

"r

Pacific

tax-

the

and

years 1952-

and

showing

counties
"

Yield—

V. •'•••"--l

'•

1983

______

r„nt.„

in

1987

Berkeley. Gross

3.50%—
-

2005

rived 69%

The maturities mentioned
above

well

obligations.
that

It

is

likely

savings

corporation

a

banks

tax-exempt

could

bonds

tax

give

special

a

at¬

public
Utility District
chelan County, Washingbeing the most attractive

and

central

revenues

from the

sale

are

de¬

of elec¬

operation, including

predecessor companies.
Giving effect to this financing,
outstanding preferred stock will
amount to

as

tractiveness to such institutions.

11,284,825 shares.

Consolidated
revenues for

gross

operating

the 12 months ended

July 31, 1951 amounted to $260,202,085, and net income was

$36,273,356.

0£

i 0f

forlj

as

tax

at

this time in
c o

a

mparable

rating class.
This
of

Complete Air America Offering

exempt

-

offering

put in place- of these bond sup-* chemicals, electronics, atomic en-:
ports that will give the public- ergy, petrochemicals, plastics, syn-:
lpore
confidence in'vthe-bonds?: thetic fibres, electronic business:
The best feature of the Civil War machines,
air
conditioning, I air
bond, gold; payments; should be transportation -and
television.;

V

issue

$33,600,000

adopted. We may do this simply': While there are many deserving
by making money .-and demand: issues that could be included in:
deposits again redeemable in gold, a portfolio for conservative in-'

the

Passage of the Reed, bill,

funds for rais¬

fore
on

be-

:

Congress would put us back
gold coin, standard. Making
moneys," redeemable in gold

of

vestors, the following would give
broad representation in a few of,

are

selling

their

they fear

more:

and

who

those

because

to

same reason.

all'1 securities

put

Plywood,
International
Business" 'Machines,
Remington
Rand, Celanese, Food Machinery

inflation

-

hesitating

are

huy bonds for, the
would

bonds

serious

on

It

S.

for

purpose

providing

ing the height

the better established companies:
all
du Pont, Pfizer, Corning Glass,
coin would not guarantee the dol- Minneapolis-Honeywell,
Radio
lar's purchasing power, complete-' Corporation,;
Sperry,; Westing-:
ly, hut it would help considerably,: house, Firestone,
Johns-Manyille,
a

It would reassure both Those who -U.

sold

was

of

the

ing

Is¬

dam

on

land
Robt.

N.

the

Tuller

Columbia

River

and

in¬

stalling
an
kva. of rated

,

additional

exist¬

Rock

150,000

capacity.

& Chemical,
Eastern
Airlines,
These bonds were brought to
Mathicson ,Chemical; and Davison«market on May 7, 1951, and were
Chemical,
'
favorably received.
The longer
.

;

the

^

same.basis.and*remove the problem of market- readjustments. Ad-

-

.

;

fliit^dly/ .there .piight-be*

Where

a greater degree of risk
bonds were marked up by dealers
.be* assumed and -where good -at that time.
Recent dullness in
diversification can be maintained, the tax-exempt market has made
can

in-

-

gold
to share the burden of reassuring

.

the

i

even

some

terest rate increases but, with
•

profit

possibilities

could

greater ■/ in :f some'

of

be

these bonds available at the orig-

the

inal

Corpora-

and

offering prices which reprey the public against, inflation, intetr -smaller Companies; such as Con- sented substantial value,
est rates .would probably, not
rise'solidated-' Engineering,
Collins
T ' thought
this
issue
soundly
as .much.,
*R&did. Ultrasonic/ American Re- conceived at
the time of issuance,
-

The

•

question

whether

there'is

arises

as

to

enough gold to

do this.-There* is. In the period of
the gold coin standard,

■

search

&

Development

tion, Fansteel.-Tracerlab, Haloid,
National Research, and Beryllium,

believe

which

The

so.

impressed

main

me

are

these:
< '
'
1914-32, These issues look like - healthy
There exists a real need for
we had less
gold back of^our cur- ^speculative acorns-.* and at least ^be
power which this project will
rency and demand deposits than ;Some of them should, in time, desupply not only presently because
we have
today-. The average then velop* into profitable - investment q£
^be war emergency, but in the
was ,$16.35 per
$100 as compared oaks.
normal peacetime pursuits of this
witn $19.00 today. (See Table 4.) v
Investors who feel unqualified
growing area.
The project has
Ourt.vpresent gold reserve is one To judge, the outlook for indi- been given the highest priority
of our greatest and one of our vidua! companies or who do not status
by the defense agencies,
least.ysjed assets. We should.use it. have sufficient;, funds :To obtain
(2) It appears iikely that this
Gold
convertibility, would/stem good .diversification, might well
proiectwill
-

,

.

still

points

,

(because of its unique

h

rehabilitate
Both

lnfnati0Kar!f it wcjyy consider the shares of investment
the
bjmd

; results

would

market,

necessarily

lighten the tax burden.
Tf there

■

.

justification in
1933-341 for abandoning the gold
c°i*

was

any

^ndard because of the de-

doubt°thatntherTewaP^rertainly

companies

growth

.

that

and

specialize

scientific

Among these

are

Fund,

Chemical

Drug

Shares,

companies.

United Science
Industry

Chemical

chemical Series,

in

p0sition in building onto previous
low-cost construction)
be in a

Series,

Shares,

Chemical Fund,

...

eiir^w

™

'

Q+

Posltl°n to supply power at a unit
cost per kw. lower or as low as
any

competitive

Northwest.

v

source

in

the

\

Television and Electronic Indus-

(3) The contracts with Alumi-

longer ap- .tries.
An
investment in such
of prosperity stocks
would
provide
a
part
and full employment. A condition
ownership in a broad list of lead-

Sound Power and Light Company

shch.^justification

plies in today's

no

era

aTethrrTto ttegolcTcoin

standard

but cries out the need for it.

Conclusion
The original title for this article
was

"This is

father

came

where

great-grand-

in." Continuous shows




num

Company of America, Puget

and the Distribution

ing scientific research companies, District give
and would place the problem of

all

firm

selecting the most deserving • se- service

-

curities in the hands of the man- maintain
agers

of these

discoveries

are

funds.

.

at
a

so

fast

bonds.

-

System of the

assured outlet for

power

Scientific 1.35' times

being made

an

produced

at

a

cost rate which will

constant coverage of
debt

service

of

the

Edward V. Otis

handing

a

(left) of Gearhart, Kinnard & Otis, is shown
check for $261,000 to Theodore A. Colombo, trust officer;

Colonial Trust Co., as Fred A. Miller, President of Air America.
Inc., looks on. The check represents payment of the proceeds of
an
offering of Air America, Inc., Equipment Trust Certificates sold
by Gearhart, Kinnard & Otis on behalf of the air line.
The equipment trust type of financing has been used success¬
fully by the railroads for buying rolling stock for more than
50

years and its adaptation to the aircraft industry which has been
pioneered by Gearhart, Kinnard & Otis, has been watched closely
by the financial community.

Under the plan the trustee retains title to the
planes purchased
until the certificates

are

ment is turned

to the air line.

delphia Plan.

over
,

That this type of
is shown

matter of

fully paid.

V

Thereupon title to the equip¬
This is known

r*

few hours.

as

the Phila¬

1

financing for airlines is becoming accepted

by the fact that this entire issue
a

is

gas and 1% from
water. The company is now in its
55th year of

on

these

Co.

tricity, 30% from

should certainly command the in¬

>

Electric

northern

3.40%

buyers of so-called businessman's

A

&

California, including the cities of
San
Francisco, Oakland, Sacra¬
mento, Fresno, Richmond and

Maturity

3.35%______

Gas

second

largest public utility
in the country. It
supplies elec¬
tricity to 1,371,265 customers and
gas to 1,058,991 customers in 46

in the bank

V'.

risk

Members New York Stock Exchange

companies, trust funds, insurance

find

can

terest of insurance companies and

ROBERT N. TULLER

over 12

supports seem less necessary, and.. companies,
and pension funds
something that will reduce the durlng bear markets.
chances that the Treasury will inIndustries where respresentasist on them again. What can we tion should be sought are drugs,

now*

be

and will

help finance the company's

ap¬

exempt yields of:
V

are

small compared with the ad vantages of having specialists who
can best judge the
influence of
scientific developments on future

so

available at prices not

Electric

popula¬

Power

revenue bond

described

expert to evalu-

to new peaks in future bull mar- Public Utility District No. 1 of
kets and
should be popular
Chelan County, Washington
for accumulation by investment
j would nominate the
obliga-

ports. We need something to supplement
higher
interest
rates,
something that will make" bond

service

rating class possessing the above-

ate the future for individual cornpanies. The premiums that have
to be paid for acquiring such in-

average,

They are candidates for inclusion
*11 a *lst
stocks that should rise

must

bond

for

we

Puget

proximately

an(j earnings should make them

monetiza-

tion of the national debt

as

deserveci rest, but the outL
look for continued growth of sales

are':™1

we

by

202

publicly on Oct. 24 an issue of
1,500,000 shares of Pacific Gas &

represented,
over 11,000 cus¬

well-managed utility

(5)

planning

are

for

ing

is

Light Company is regarded

most likely

seems

Blyth & Co., Inc. heads an in¬
banking group compris¬

vestment

54 inclusive.

been
enthusiastically during
^ past two years that they may

Gold Coin Standard ; are

a

system

Blyfh Group Offers

fol¬

ties.

much

as

attractive,' especially
^Return to

gold coin standard
supplement our
freer
bond
a

to accomplish this.

Some of these stocks have

^would * not.
market declines. be immune

irom

(c)

dollars,

tax

the

after sale of its Seattle
proper¬

industrial

are

havebought

having such

although,
bonds, it

to

as

Distribution System

District

tomers, and a
tion of 36,000.

encourage bond

stretch

The

presently,

need

——

twice

or

peopie

Ke-

paragon^ of a bond. We.
close to

pne,.

We

Security I Like Best

D0W_j0nes

^>uldT PartlclPaia as ldUe

such

but they should

and

.

The

be

sales

r eaerai

possible. is it possible to

pan, come

course,

—:

pr0grams

serve

as.

through

wnicn ine

expect the results to be

buyers,

dollars.

of

Pac. Gas & El. Stock

the

exempt

sold to banks, and its value should

in

tax

by such facts

(b)
of

system that will reduce

market

be

payabie m .goid. it 'Snouid not

established

a

takers

are repre¬

The Aluminum Company
of America plant investment is
estimated at $58,000,000.

Continued from page 2

purchasable with currency that is
ahd woukibe,

pe

the

instead

main

project

(a)

ad¬

riot, depreciating

markets

dilutes

bond

to

not

-

of

bond would

a

we
are

resem-

War.

ever

think

even

faults. It inflates the currency,

Return

perfect, of

and

the

ous

inflation,

:

of

closely
Civil

three

lowing:

support system has too many seri-

and

of the

The

have

of reviving this method. The bond-

buyers,

'

disadvantages just

will

if

passed,

existed. We should not

currency

that

(4)
sented

supports
indeed
they

must

to

chief

most

and

the

conditions

bond

learn from the experiences our
country has had since then. We

For the present situation a bond

is needed that will avoid

cycle

take

we

method.The

justifying

us

guaranteed

,

bonds,

war

a

if

power from the

II

discourages

situation

a

than

Let

bling

some-

effort

banks.

disadvantage
1

apparent, if

of

In the matter of

World

of

true

have completed

that the govern-

was

an

is

better

War

new

to be this time.

was

'

that

be

chance of reverting to the World

history, too.
So the cynic says, "The chief thing
that we learn from history is that
we
do not learn from history."
That is too often true, but it is
not always true and does not have

that the govern-

was

not

does his-

so

show repeats

a

itself most of the audience is

«

The

ment

repeat themselves and

pur-

green-

27

was

oversubscribed in

a

28

The Commercial and Financial Chronicle

(1572)

Continued

from

Thursday, October 25, 1951

.

procedure

tary

3

page

.

.

mended

ing):

Our

Reporter

li

'

t

•

•_

"

•

Governments

on

1

■

■

'

'

..•

'■

:

Visible Factors in Easiness

•

its greatest demand and
activity concentrated in the short-term end of the list. The 144day tax anticipation bill is still a focal point of interest, along with
the 91-day Treasury bills and certificates. The latter two issues,
because of the liquidity preference among commercial banks, are
being bought as an offset to expanding loans. There is consider¬
able switching from the long to the short bills, with the former
being taken up by corporations at substantially better yields than
would have been obtained at the average subscription rate. The
intermediate- and longer-term obligations have been in another
one of those minor up and down trends, on light volume.
There
seems to be only very moderate interest in these securities from
The

both the

buy and sell side.

Helps Market

stepped

increase these loans,

banks

will

the need to keep

attached to them, there will be

funds in the riskless securities such
cates.
care

ury

The

of

as

»

obligations. This would seem to augur well for the near-term
,

,

1

'

Non-Governments
The

other

sectors

much in the forefront

filling with

an

scheme of
work

only

There

as

Attracting Attention
government

market, while not as

the shorts, again have been

uncertain tone prevailing.

things.
as

the

of

volume and more than a

Buyers

are

cautious and

are

business is

more

Business is,

still

more

attractive

of

avenues

liking because the return is

what

lack of

largest

course,

next June business
directly receive
about 53

ending

year

will

cents out of every

dollar the gov¬
spending. The men in

ernment is

uniform will get

holders
ance

including

new

Commercial banks

conscious

as

or

as

strong

as

dependent upon

government securities, except for the shorts, which

quired for liquidity purposes as

marketable

attractive than

more

really making hay with the demand for loans
This does not make them

13 cents, bond-'
banks, insur¬

companies and corporations

will

get about 9
something
like

veterans
the

cents,
7

cents,

farmers less than 3 cents, and

those

all

social

security and old
age relief less than 2 cents. See
on

Table II.

-

These

expenditures, it should
further be noted, are bound to
occur unless Congress quickly re¬
verses actions it has j ust taken—
that is, cuts existing authoriza¬
tions and appropriations. Actually
steps have been taken to get a
140-air group under way instead
These will

programs.

additional

likely to account for 70% and
more of the Federal budget in the

billions

mean

of

many

dollars.

♦

five

next

Interest

years.

the

on

public debt and veterans' benefits
account for

short,

additional 16%. In

an

of all

86%

about

Federal

outlays will go for wars, past and
future.
these

lion's

the

And

share

outlays will

enormous

of

go to

a

political axiom, especially

in years

divisible by four (usually
by curious political

characterized

goings-on) that legislators resist
or vote against tax increases and
foster

increases

for

vote

or

appropriations.
The
promises
to
provide

no

in

1952

year

unex¬

pected exception.
Federal receipts seem

likely on
the basis of recent tax legislation
to

fail

more

to

administra¬

next June,

budget
short

come

are

being

ac¬

each

The

of

Federal

two

next

the

which

debt

billion
years.

is

now

war, should
appropriation
unless and until adequate Federal
tax
revenues
are
definitely in
sight. In a long period of heavy

make

There has been and still

seems

to be

some

spotty but not siz¬

able liquidation of the tap bonds by savings banks.
these
this

institutions

is

no

next 30 months.

There
of

balanced

a

unless
a

See Table III.

is, therefore, no prospect

two

out achieved in

1956

done: first,
and spacing

are

reduction

drastic

until

budget

things

military expendi¬

tures; secondly, more taxes raised.

over

doubt

responsible for this action.

is not

a

point of great

concern

When

because it

likely to reach substantial proportions. However, the change

in the tax status of these institutions has

Pension funds, as a

whole,

are

still

on

the sidelines

come.

save

for

somewhat enlarged
also

been

in the Vies
scale

interest in the short-term obligations.

making

some

stead,

less than $6

There appears to

be

able at the moment.
The longer

partials have been

a

bit

more

reports^ even though quotations have given

quoting
appears

down.

•'<

/,

cowardice.

lays

spending

for

the

Committee

Economic
down

as

in

its

the
Report of

report

mous

unani¬

President's

on

1951,

etc

civilian
agencies—should be limited to a
figure not in excess of 20% of
national

all-out
that

Building contractors
State and Federal public works

1.6

Atomic

1.5
1.2

Raw

industry

material

suppliers, "stockpiling

Subsidies to newspapers, magazines,

shipping firms, etc.

0.7

to business

$37.0

.

Payments to holders of U. S. bonds, to a substantial extent
banks, life insurance companies, etc
Payments to men in uniform—pay allowances




for

willing to raise in taxes."

are

Similarly,
non-military
penditures

wherever

possible,

governmental
ex¬
be held down,

-

must

annual

report

the

on

Presidents

Economic Report, while involving
about 50 actions by the Congress,
would .seem to
be a minimum.
there

Total

cuts

effect

an

nearly

10%

of

economy

civilian

in

would

outlined

over-all

items.

:

afford

ing

operations

essential

to be inadequate by

such

the financing
capital to

as

supplying

business, etc.
the

On

other

the

of

hand,

curtail¬

normal

needed

cannot

we

indiscriminate

mental functions.

govern¬

During the 10-

15-year period of two-way pre¬

or

and preparedness for allthis country cannot tol¬
erate the reduction in productive
efficiency nor increase in military

peace

rejects which would
indiscriminate

cuts

in

or

result from
in
school

development

of

completion of
works. Gov¬
ernmental deficits, if held down to
moderate size, are less of an evil
than restricted productive capacity
sources,

in the

or

long-needed

which

public

the

constitutes

ably less of

industrial

Security and old

assistance

government, including
postal services, etc.

1.3

.

retired

Federal

Total probable Federal

V /;/

>;.

,

"

workers,

such

5.6

expenditures

$68.9

Gross National

Administrative

Expenditures

Product

Budget Receipts

$285.0

87.3

*335.0

Federal

84.0

*365.0

f77.0

—_

of

June, 1951.

out¬

inflation, especially since

these outlays and deficits are tak¬
a

all

manpower

available

time when nearly

capacity

are

tAssuming tax laws

as

Let

no

be

one

and

being

deceived

sented

for

the

most

Administrative

Surplus

f73.0

as

military

tapering off of wholesale
that began last March. It

$37.0

1953

♦Prices

astronomical

pro¬

fully

utilized.

Debt, 1950-1954.

Federal

1954

Inflation

lays and continuing deficits is, of

ductive

TABLE III

Federal

$40.2

Specter

ing place at
Government

Federal

1950

of

of

almost inevitable result of

course,
-

(Billions of Dollars)
Year

effectiveness

The

Federal Expenditures, Gross National Product, Federal Receipts,
and

military
youth.
The

12.5
1.6

age

General

evil than limitation

an

the

6.0
4.9

ground, mainly

-

recommend
military

soon,, we

appropriations

defense be limited to the amounts

our

Payments to veterans
Payments to farmers..

—

48.1

*

there

might of this nation and consider¬

f65.0

that

Until

.

.

basic power and other natural re¬

315.3

"

war

.

imminent danger of

more

budgets,

*340.0

•

income.

seems a

5.0
2.0
1.9

68.4

one

non-civilian, programs

if administered by

—even

7.3

44.6

v

defense, including
military items but
aid, atomic energy*

out war)

1952

The 1960/65 issue has, again been the

foreign
other

and

its bills. In¬
Government

pay

laid paredness ahead (preparedness for

highly necessary and salu¬

a

1951

to have the greatest tax shelter appea*

only

also

time for fiscal

military out¬
concerned, the Joint Eco¬

are

nomic

no

So far

active, according to

some

to

Supplies of uniforms, food, etc.—
Firms with foreign aid orders

a

appears to be quite flexible and not too siz¬

much

Aircraft makers

demand, for the highest yielding issues, from the pension

funds, but the scale

-how

see

Federal

not

small

billion.

Clearly this is

$15.8

limited commitments, nonetheless,

but only on price weakness.

total

On the,other hand, instead of to carry on
raising an additional $10 billion now deemed
in taxes, the measures thus far Government,
enacted will increase revenues by of housing,

Billions

a

They

and

in order

row

for?

Makers of guns, tanks,

v

have

around

the Government will need to bor¬

Furthermore, a long range pro¬
both respects. Scheduled military gram for controlling such Federal
appropriations have been raised, expenditures must be developed.
not lowered.
Instead of limiting Instead of a piecemeal attack upon
military expenditures to $55 bil¬ the problem of outgo, considera¬
lion, as so wisely advocated by tion should be given to such pol¬
as
Senator Flanders of Vermont, Con¬ icies
putting direct govern¬
gress has now appropriated over mental services as nearly as pos¬
$61 billion. The time is overdue sible on a fee basis adequate to
for rigid and scrupulous scrutiny cover the costs, limiting grants-inof all military outlays. What kind aid to the States, and encouraging
of an emergency are we preparing and developing private enterprises

probably removed them

buyers of long Treasury obligations for quite some time to

there does not exist the
to spend first and then

us,

Congress thus far has failed in

Payments to business firms:

Social

selling will be

is not

as

The taxing of

military

no

defense expenditures such as now

face

of

Savings Banks Alter Policy

short of all-out

gress,

The cuts summarized by the Joint
$257 billion seems bound to
Economic Committee in their 1951
rise to $290 billion or more in the

TABLE II

Total payments

ments in commercial loans.

revenue

with care the
be done, Con¬

over

offset to the larger comipit-

an

Measuring
things that must

and may:

to/15

12

by

put

to

It feels that the defense gar¬

cloth.

we

tive

in

or

Federal

the

balance

billion

3

by

emphatically

proposition

pay-as-you-go

a

ment should be cut to the

look

Large and Persistent Government
Deficits
It is

the

on

urgency

business.

Who Gets the $68.9 Billion in 1951-2?

forv

investment

securities. Nonbank

get on government obligations.

can

less obvious.

or

by far the
beneficiary. In the fiscal
of

it is necessary in order to get income.

are

issues to their

ever.

a

during the

on

of the Korean War. '
impact of military expendi¬
of
such
magnitude
upon

putting funds to

Irayers continue to find private placements and

they

backing and

There is still

carried

severe

of 95 and to expand atomic energy

passing amount of professionalism in the

most of the institutions other than government

are

more and more

Treasury bills and certifi¬

adequately by keeping funds invested in short-term Treas¬

.

less

substantially

that

The

tures

liquidity and riskless phase of the picture can be taken

obligations.

active

that

(6)

first year

element of risk

an

be

than

Then, again, as the commer¬

which have

and

up;

be

not

fighting though more or less con¬
tinuous during the next five years

There is the time element to be considered and that is how long
the higher rate be maintained?

will

hardware

other

the short-term- market.

upon

not

piling and for delivery of muni¬
tions, tanks, planes, guns, and

bank rate from ;2%% to 2%% should

not have an unfavorable influence

our
exceed

(5) that present schedules for in¬

on

The rise in the prime

will

forces

of

size

the

that

(3)

creasing plant capacity, for stock¬

that tax day.' Because of the ticklish
international situation the Treasury is not in a position to draw
down its balances.
The 144-day bills went at a rate that should
not be distasteful to the Treasury. Also by the time this security
is due, there will be quite a bit of water over the dam, and the
monetary authorities should be in a position to again tailor their
offerings to meet the prevailing conditions. A breather like this
should not have an adverse effect upon the money markets.

cial

beyond the level reached last

cently increased 10% by Congres¬
sional action, thus adding over a
billion dollars to military costs);

This borrowing by the Treasury should clear the decks, until
March, and it should ease the strain

can

up

divisions, an airforce of 95
air wings, an active fleet of 1,100
ships and a fleet marine of 2xk
divisions;
(4) that the military
pay scale will remain at about the
level of last March
(it was re¬

at least the middle of next

markets

prices of articles purchased by the
Defense Department will not go

army

bills went at an average yield of 1.55%,
which was a mild surprise to many money market followers. To
be sure, the commercial banks went in for the kill in these bills,
because of the attractiveness of this security to them from the
standpoint of Treasury special deposits that were created on their
books. As long as these deposits remain with the banks, only the
normal reserve requirement will have to be set up. This is a
cheap way to get funds that can be used to add to the revenues of
the deposit institutions. Even though some of the tax bills were
sold in the open market at yields that were higher than the aver¬
age of 1.55%, it is believed there.will still be considerable benefits
that will accrue to the selling banks, because of the importance
to them of the Treasury deposits that were brought into being
through the subscription to the 144-day tax anticipation bills, v

the money

1956; (2) that average

to June 30,

present planned levels of 3,500,000 men,
the equivalent of 24

The tax anticipation

«n

estimates

assumptions are un¬
avoidable, among them (1) that
there will be no major war prior

armed

whole, appear to have eyes only for
the shorts, aside from the partially-exempts, which seem to be
able to find a home whenever they are available. A few of the
longest maturities came out of hiding the past week. Pension funds
have been very modest buyers of the longest tap issues, but this
took place largely on a scale down basis.

making these

several major

April;

Commercial banks, as a

..

in

For

ther.

are

$10 billion.

recom¬

basis.
It, in fact, would wish to go fur¬

Thus national security programs

by possibly as much as

low

are

it

■

Committee

endorses

Outlook for Next Five Yeats

government market again finds

New Bill Issue

:

"This

defense

By JOHN T. CHIPPENDALE, JR.

when

(three members dissent¬

of October, 1951.

or

Deficit

2.8
3.5

—

3.4

—14.3
—

7.0

a

correction

of

the

by the
prices
repre¬

part merely
excesses

of

hysterical consumer and business
buying last winter and may, I am
sorry

to say,

soon

quarter of this

penditures
$208.2

reached

billion

savings

end. In the first

year consumer ex¬

were

a

high

of

(annual;.rate), and
only $9.2 billion.

[Volume 174

Number 5058

.

.

.

The Commercial and Financial Chronicle

(1573)
During the third quarter, despite chemicals, new textiles, anti-bioan increase of $8.2 billion in dis¬
tics, light metals, atomic energy,
posable income, consumers spent kybernetics, and new applications
$4.2 billion less, and saved $21.7 of the techniques of
psychology
billion. A savings ratio of 91/2% and the humanities to
industrial,,
not

can

be

expected

to

in¬

last

racial, and international relations.

definitely.
While

The

manufacturers'

inven¬

tories in August of this year were

38% higher than

a year

ago, prac¬

tically all of the recent rise has
been
orders

now

fill

to

necessary

being

placed

rate of $1 billion a week.

ment

store

have

gone

and

defense

at

the

Depart¬

retail inventories

down

steadily

since

The

has

long

delayed

"big

pinch"

in civilian supplies with

come

drastic cutbacks in the early 1952
allocations of steel, copper, alumi¬
other vital defense

and

num

terials.

A

corresponding

ma¬

cut

in

the supplies of consumer durables

is coming

the

precisely at a time when
prices of steel, copper, auto¬

mobiles and other goods are being

raised, when
cise taxes

new

and higher ex¬

becoming effective,
and when labor unions are
getting
ready to demand and obtain sub¬
are

stantial wage boosts.

Moreover, Congress has virtually

of such

vast

revolu¬

in

man-hour

business
the

men

real

rose

output

1951

three
it

as

creased
In

years

did

Yet

years.

this

in

total

in

much

as

from

the

tively?

that

economy

third

a

Few

to realize

of

than

more

the

productivity.
seem

1948

previous

to

20

being

provided

by

private

ductivity

words, man-hour

in¬

pro¬

recently to have
per year, twice the

seems

risen 6%

more

long

run

average

(3%

age

and

by trade unions.

tion

cor¬

of consumption are chang¬
ing, in what direction? What im¬
provement is in the offing in their

vocational, economic, social, and
political skills? These are some of

formance

government."

the

as

nation's

quantitative
qualitative will to progress.

During
10

years

The American

the next five years to
there
will
be
rather

manufacturing and 2% marked changes in the number
as a whole). In¬ and
character of
the
American
deed, in the three-year period 1948 population. An upward
surge in

for the

to 1951

economy

the Federal Reserve index

factory

output rose
man-hours rose 7%..
Such

increases

in

17%

while

the

birth

has

been

last

*

rate

and

survival

rate

taking place during the
decade.
Not
only will our

productivity population increase by 10 to 12
million, which means an addition¬

result primarily, of
course, from
the $110 billion spent for improved
plant and equipment since 1945,

al

home market

a

boom which has reached

both business

and

roughly equal to

a

„

This
and

Revolution

brings me to the sixth, last,
important
item
that

most
to

seems
•

to loom

me

business

horizon

spread

of

American

—

large in the

namely,

those

ideals

and

or

contained if business

government

mobilize

every

tenance

possible bit of economic wisdom

may

and statesmanship.

or

and

obsolescence

that

domestic private investment

gross

stay

at levels of $40 billion
This, to be sure, is con¬
siderably less than the $63.5 bil¬
More Rapid Technological Change
lion peak reached in the second
Perhaps the most startling fac¬ quarter of this year, but a third
tor upsetting business plans and
higher than in
1947, and four
calling for new business tech¬ times higher than in 1939.
niques in the near future is tech¬
nology. The Industrial Revolution The Quantitative and Qualitative
far from being over is

ning.

Dozens

discoveries

stages

of

of

Will to Progress

only begin¬

inventions

and

are
merely in early
development: plastics,




up

over.

As had
mous

Adam

classic

Smith in

in

their

togetherness describe what Amer¬
icans

mean

"The

Wealth

of

tions," the eminent Swedish

Na¬

econ¬

a

important revolution¬
causing political' and

and

business system.

onstrated
of

tha

over

today and likely to continue
is the American
political

so

It has dem¬

through the unleashing

individual

energy that science
technology can create in¬
opportunity and abund¬

and

creased

for the

ance

common

man

every¬

where. Its "know how" and "show
how" are a perpetual

challenge to
all regimes where
tyranny, hun¬
ger, and poverty exist.

where

for higher levels of con¬
sumption and for more useful and

productive

by democracy.
'
group of American busi¬

lives.

Every

new

so¬

cial

creed—whether Nazism, Fas¬
cism, or Communism—has had to

promise
has

abundant life and

a more

made

that its

its

followers

program would

believo

raise per

.

To

a

ness

the

men

fact

needs

not

be

labored that the most precious of
all our ideals is individual free¬
dom based

full

on

recognition of
the integrity and
dignity of the
individual
irrespective
of
his
birth, creed, race, or financial
standing.
We Americans
"hold
these

truths

that

all

that

they

to

men

Creator

be

self-evident:

created

are

endowed

are

with

certain

among

rights,

equal,

by

capita incomes closer to American
levels.
Probably the most dis¬
rupting of all international statis¬
tics

incomes in the UnitedL
States not merely two or three or
10
times but indeed 50 and 60
times that in many other coun¬
tries.

them

life, liberty
happiness, that
rights governments

The

masses

demanding an
rulers—why?
In

their

inalienable

comparisons which show

are

average

the

everywhere aro
from their

answer

that

measure

by

we

our

deeds give our citizens these free¬
doms and increasing standards ot

and the pursuit of

living,

to

elsewhere will intensify their de¬
mands for
similar freedom and

these

secure

instituted

are

ing

their

among

just

deriv¬

men

from the
consent of the governed."
And, as the American Federa¬
powers

tion of Labor editorially observes
in
its
publication
"Labo r's

in

that

in

geometric

standards

of

1951:

freedoms

ratio

are

are

may

September,
economic
rights

"Certain

safeguarded so that
have full freedom

everyone

to

carry

this desire: the right to own
property, to choose one's job, to
engage in any business and earn
out

fair

peoples

measure

prosperity. In Asia, in the Near
East, in Africa, in Latin America
there is an awakening, a' chal¬
lenge, an unrest that it growing

Monthly Survey" for

higher

as

living

and

greater

achieved

in

the

American economy.
Foreign ten¬
sions
and
economic
upheavals
abroad

therefore likely to be

are

and more

more severe

frequent in

the period ahead than they were
even in the 20s and 30s,
/:
:

profit, to organize a union
bargain collectively for wages
If this outlook for the future
and benefits, to organize a busi¬
seems to you full of hazards—and
ness association; the
right of busi¬ it is—may I note in closing that
ness
concerns
to compete freely at least two of the most ominous*
a

and

with
the

each

other

and

above

all

right of each person to use his
judgment and make his own

own

decisions.
basis
and

These
the

of

rights

individual

the

are

initiative

responsibility
which
progress."

build

economic

Freedom

for

broadened

and

challenge

to

deepened. It is
tyrannical

is

a

of

same

continuous

initiative

pursuing

that

each

possibilities
enjoy in
carefully se¬

observers

some

in

see

the

pro¬

obscurity

that

blankets the future have not been

mentioned—namely,

catastrophic

depression

occurred

such

as

1932 and World War III.
do

believe

not

likely

to

occur

five years.

I

am

that

in

Frankly
either

L>

during the next
sure that we alt

devoutly hope, at least in that
particular, that the account I have
tried to give of what may lie im¬
mediately ahead may be correct.
'

.4'

..

Guy Gadbois Joins
Wagenseller & Durst

ours

his

to

totali¬

tarianisms whether of the right or
of the left to give to their citizens
the

shapes that
fess

I

therefore,

us,

not merely a heritage to be de¬
fended, it is a weapon to be used
in
increasing economic produce
tivity. It is a way of life to be

; (Special

lected but self-chosen path toward

LOS

to The Financial Chronicle)

ANGELES,

full and balanced development of
his creative abilities. It is a pro¬

Gadbois

test

Calif. —Guy

with

by

John

Citizen against
being pushed around by political
commissars, by special privilege
or by pressure groups of any kind.
Q.

Since the beginning of our his¬
tory this nation has meant to the

patient,
world

toiling

what

bolized

is

masses
so

of

superbly

the
sym¬

by the

in New York

Statue of Liberty
Harbor: respect for

has

become

associated

Wagenseller &, Durst, Inc.*
626 South Spring Street, members
of
the
Los
Angeles Stock Ex¬
change.
Mr. Gadbois, who hay
been

for

in

the

many

with

investment

years,

Douglass

thereto

was an

&

was

Co.

business

formerly
and prior

officer of Atlas Se¬

curities, Inc.

Joins Neary, Purcell
man, recognition;
quality of all peo¬
(Special to The financial Chronicle) -'
ples; freedom of speech, press,
LOS
ANGELES,
Calif.—
there seems little doubt that this thought and worship; selection of
Fletcher Purinton has become as¬
generation of young people will public servants and public pol¬ sociated with
Neary, Purcell &•
far exceed in competence any that icies
by vote of the people; scru¬ Co., 210 West Seventh Street. He
has preceded it. Most of them will pulous observance of the bill of
was formerly with Barbour, Smitht
have
had
the
benefit
of
high rights, trial by jury, protection of & Company,
school, and many of them due to person, family and home against
the GI Bill of Rights (which in violence
by secret police; a gov¬
With C. G. McDonald
m,y judgment will almost certainly ernment of law continuously re¬
(Special to The Financial Chronicle)
be
extended
in
some
form
or
sponsive and responsible to the
other) will have had even more will of the people; the exercise of
DETROIT, Mich. —Herbert L.
advanced

vocational

and

civic

the

dignity

wise have gone through the rapid

from

more

of

becoming mature and
which results

experienced

.

political or economic power solely
on

process

of

.

.

of the essential

training. Most of them will like¬
his fa¬

to do

the

.

be offset

world

red-blooded

which

servant

American business has intensi¬
fied and drive by peoples
every¬

and

for

rate of increase

from

the

economic disturbances all

young

levels

government

people, not the master;

force

ary

reaching maturity will,
hope, make fewer mistakes

short, there will be more
people in our population,
better
trained, better informed,
more
skilled,
more
productive,
creating rising levels of living, de¬
manding higher standards of per¬

the

The most

The genera¬

now

In

occuring,
If goals or

are

groups?

of

maximum of home rule and
localcreative voluntaryism.

porations, by government service,

the facts which Cassel referred to

employment

only 4%.

other

If increases

what

schools;

Many will have the additional
leadership training which is now

fecting business is the human fac¬
tor.
No analysis of basic trends
can
possibly ignore considering

the State of California, but during
peak* the* next five years the number
this year without parallel in under 15
years of age will increase
ing expanded $170 million during
American economic history. Pri¬ relatively the most.
August in the third and largest
vate
investment
is
now
Sometime after 1960 will come
taking
monthly^ increase in 1951. Bank
place at the rate of nearly $25 a considerable increase in the
pro¬
loans
rose
$600 million during billion a
year, a third higher than portion of those over 60 years of
August to exceed the previous allin 1950, five times the level of age but that is a
different story
time record high reached in June.
1939, three times that of 1929. It which I shall not go into here.
Privately-held deposits and cur¬
represents 19.1% of gross national
Already the crop of postwar
rency have expanded without in¬
product, the highest ratio ever babies, 40% larger than normal,
terruption by $4.5 billion in the recorded.
is beginning to overcrowd the kin¬
five months from March to August
New basic expansion in over-all dergarten and first
grade rooms
of this year.
/ ■>. -.
v,
productive capacity together with in the schools.
Cities are even
It is reasonably certain that the the
rapid increase in man-hour now
crying for
steel
for
new
enforcement of price and wage
productivity
not
only
provides school buildings. It is, therefore,
controls, gutted by Capehart and the broad base of industrial readily understandable
why the
other
amendments, will become strength requisite for military ef¬ retail sales of some items in 1951
steadily less efficient. In the ab¬ fectiveness but promises a
supply should considerably exceed 1950
sence
of some overriding emer¬ both of consumer
goods and arma¬ levels.
gency
there will be increasing ment that will greatly alleviate
On the West Coast, for
example,
debate about the wisdom of such the
stringencies of expanding de¬ the sales this fall
compared with
measures during the months
and fense requirements.
a
year ago are higher for child¬
years ahead which is likely to re¬
However, there is a > long run ren's shoes and infants' wear
by
sult in their virtual if not express exhilaration effect that should not
10%, low-priced dresses up to 3%
abolition soon.
be ignored. The steady rise in in¬
to 11%, toys up 4%, and books and
In addition to the cost-push of dustrial
research, the increasingly magazines up 12%.
Despite lower
higher wages and materials on rapid replacement of equipment sales
of
household
appliances
prices, there will be the booming due to faster technological obso¬
(—45%), radios and television sets
impact on the prices of our im¬ lescence, the new products, new
(—21%), and rugs and floor cov¬
ports and on our economy of gal¬ outlets, and expanded markets— erings
(—33%) the total sales of
loping inflation throughout the all these factors mean increased West Coast
Department stores are
rest of the free nations of the stimulus
to
business
expansion up 4% over the boom
period of
world.
Wholesale prices in most and new investment opportunities 1950.
European countries have increased for new business*
This baby crop will soon be pro¬
In addition, during a consider¬
by more than twice as much as
gressing from the primary grades
ours
have.
In Japan, the- Near able part of the next five years,
into the grammar schools and
high
and
substantial " en¬
East, Latin America and other continuous
schools. Teachers there will be as
couragement to
areas prices since 1949 have gone
private invest¬
hard
to
get as primary school
ment wil be afforded by various
up more than three times as much
teachers are now.
Communities
defense
policies of the Federal
as in the United States.
will need larger educational facil¬
Several of these countries are Government, both directly and in¬
ities, roads, more recreational fa¬
'
✓
,
not only incurring large budget directly.
cilities.
Municipal tax rates and
As direct aids to business fi¬
deficits but their scheduled pro¬
debt may readily rise.
Moreover,
nance, one might mention govern¬
grams of industrial reconstruction,
GI's
who
have
thus
far
been
ment purchase
contracts to buy
military rearmament, and eco¬
happy with two bedrooms will in¬
the total output of new or expand¬
nomic development, in part in¬
ed plant, prepayments on govern¬ creasingly be in the market for
duced by expanded military and
three and four bedroom houses.
ment contracts,
direct financing
economic aid from us are likely
As any experienced group of
to accentuate world-wide ^ short¬ through Navy V loans and govern¬
boy-growers and girl-growers can
ment guarantee oL loans.
More¬
ages of vital materials and accel¬
tell you, the young, especially the
erate spiraling world-wide infla¬ over, the granting of certificates
teen-agers, are the ones who con¬
of necessity,
the encouragement
tion.
sume
food
in
almost
limitless
of plant dispersal, high priorities
In short, the specter of inflation
quantities, wear out shoes and
in
allocations
of
materials, to¬
will continue to haunt the council
clothing in no time, and rapidly
gether with permission to depre¬
use up
tables of governments, of business ciate
books, sportswear, recrea¬
plant tax-wise in five years
tional facilities, and the like. The
firms, and of individual house¬ will assure continued high-level
need for farm products and fibers
holders all over the world. ;; Of investment in basic
industries such
is therefore likely to increase in
course^ no one need inecessarily as
steel,
aluminum,
fuel,
the
the near future.
The food indus¬
expect that prices during the next mineral
industries,
power
and
tries, the clothing manufacturers
five years will rise at any such
transport.
and merchants, farm owners and
rapid clip (17% in nine months)
In short,
the next five years
as
they did from June, 1950 to seem likely to be years of such operators on good locations ought
to do right well.
:
March of 1951. But there will be high expenditures not
only for
So far as occupational and cit¬
a
persistent
upward
thrust
in plant and equipment, but for resi¬
world price levels which can only dential construction, and for main¬ izenship
skills
are
concerned,

emasculated price and credit con¬
trols.
Consumer credit outstand¬

from service in the armed forces.

tionary developments is likely to the human stuff that constitutes let us
be both
anti-inflationary and in¬ the fundamental strength and re¬ in business and finance, in funda¬
flationary.
The most important sources of a nation.
mental economics, in national
pol¬
What is happening to the popu¬ icies and in world affairs.
anti-inflationary
effect
will,
of
They
course, result from rapid increases lation quantitatively and qualita¬
will have to.

in

April.

effect

omist, Gustav Cassel, in his "book
Theory of Social Economy"
repeatedly emphasized that the
most important of all forces af¬
"The

2D

the

basis

of

consent

secured

the

governed; tolerence of
minorities and protection against
majority

tyranny;

free

public

Waller has become affiliated witht
C. G. McDonald & Co., Penobscot
Building, members of the Detroit
Stock Exchange.
In the past ha
was

with Baker, Simonds &

Co.

30

The Commercial and Financial Chronicle

(1574)

As

We See

It

good policy—but somehow, somewhere leaders to produce
the aroused public must emerge.
1
Of course,

really aroused public could bring this
speedy end, but it needs leadership—
leadership to point up the real issues; leadership to expose
the smooth buncombe of the professional politician; leader¬
ship to make clear the nature of the claims and the de¬
mands of the so-called pressure groups; leadership to lay
a

state of affairs to

spurious

for ills, real and imaginary, which plague the
individual voter; and leadership to point the way to sound
panaceas

statesmanship. Such leadership obviously could begin
with a very simple but carefully camouflaged state of
affairs which cries to heaven for correction. We refer, as
careful observers may

Federal

harp

is

now so

the matter of

not

on

these would

a

naturally

outlays. Here is a subject which has been very lightly
passed over, thanks probably to the insidious propaganda
to the effect that most of the
budget is "fixed" and irre¬
ducible. A few legislators, such, for example, as Senators
Byrd and Douglas, have had a good deal to say about ex¬
travagance, and in one degree or another have come for¬
ward with specific suggestions for
reducing expenditures.
Congress (and, we may add, the President) regularly
ignore them. In the abstract, as it were, they gain some
applause from the general public which seems in a vague,
general sort of way to be ready to regard them as coura¬
geous, able men, but that is about all.
Now the fact of the matter is that real reductions in

Federal

outlays

ible (in every

perfectly possible and perfectly feas¬
sense, at least, except possibly the political
are

sense), reductions which would make a real impression
upon the staggering outlays to which both Congress and
the American
as

a

public have become accustomed. It would,
fact, be quite possible for the Federal Gov¬

matter of

ernment to do all that it is now
doing and still make ap¬
preciable reductions in annual outlays, but, of course, real
economy must rest upon a reduction in the functions

which the Federal Government

past two decades.
of these
on

new

has

assumed

during the

The trouble is that each and every one

burdens the central government has taken

has created

a new and
usually large vested interest in
largesse—and these vested interests, just as other vested
interests of past decades, control votes. It is for this rea¬

son

that fiscal issues touch

virtually all other issues.

Some Day!

if it employs an

is

that

irredeemable cur¬
can be avoided,

when

all

bank-

could

In the days

of irresponsibility on

employs it.

Discriminate

We

Against Our People and in
Favor

of Foreign Central

Banks

and

Our

provide
silver, the
minor coins, paper,
statutes

in

dollars

for

Governments?

monetary

metals of

our

gold,

and bank deposits.

of logic

may

materials

est

By what proc-

our

of

and

while

places

the

made of the

ernments the dollars

material

valuable

most

These

gol d?

—

different
materials, can be equal in exchangeability and as stores of
value only if freely exchangeable
at the parity rate with the dollars
dollars,

made of the most
rial.

With

the

expensive mate-

gold dollar as our

standard monetary

all

other
-•-*

venient

forms

unit, dollars in
merely con-

are

....

-

substitutes;

not equal

of

of

made

but they are

ers

that
politician that we

an

incredible

shall have to

we
are

"veterans'"

scandal.

along with 'the
heartily in favor of doing what is
say

right by the boys we draft and send into the field of
battle where
they must risk their lives, although we
should hope that the reader would assume such to be the
fact.

At any rate, we

deplore the practice of catching the
votes of veterans
by all sorts of extremely costly pam¬
pering of the veterans of our fighting forces even when
they have never seen a battlefield or when they come
back2 from the

wars in better
health, better trained, and
in every way much better able to look after their own
affairs than they would have been had
they been left at
home; Some day someone will take the trouble to add

together and to publish all the bounty; Federal, State and
local, heaped on the veterans—and if it is well done, that
may be the day when the rank and file may awake to the
extent to which
they are being, taxed to pay political hom¬
age to the veterans. At least, we hope that
something of
the sort will occur, for otherwise this load bids fair
to

grow until it may

be all but unbearable.

Another field in which
few, or indeed almost none,
appear willing to tread is that which has to do with mili¬

tary expenditures. Here again it is easy for the political
cry holy, holy when it comes to military
matters and the
budget. There never has been a military
force in the
history of the world which was anything like
as
expensive as ours is. And we are not here referring

demagogue to

to the fact that

our

than those of other




men

are

more

abundantly equipped
fighting forces; we refer merely to

dollars. All other holddollars pay a pregold, thus revealing the

mium for

of discount at which our

degree

non-gold dollars are accepted be-

government's unwillingness to' make all our dollars
redeemable at par for all holders

cause

of

our

anywhere, any time.

Redemption

f0r some but not for

others is the

principle of this policy; and it has
defense.

valid

n0

Rpcirlps

our

government's failure

throroolfsteps

totake the pioper steps to extend
to take
to extend
tQ all the benefits we have been

foreign

accorcjing

central

banks

discrimi¬
those who may ob¬
valuable variety of

nation among
tain the most

proposals, advanced by gold-mine
interests, that we go in the oppo¬

and

be

any

being subjected to

are

dollars for

any

one

ard rate of $35 per

other
we

at the stand¬

fine

ounce.

In

words, the proposal is that

scuttle that

portion of

a

gold

people.
main¬

standard and redeemable currency

redeemability for our peo¬
ple and discriminated against the

gold by reducing it to the status
of a non-monetary metal, to be

foreigner.

bought and sold like any other
non-monetary commodity, and to

During

against

we

site direction and not redeem any

that

dollars,

and

Only in our

^dgovinSs .since Jan.
governments sinceJanSl!

to

World

own

our

War

I,

we

that

tained

Since 1933

versed the process.

While

under

of

serves

banks, in

have re¬

-

law

our

the

we

the

we

demonetize

have,

now

plunge ourselves into a thorough-

re¬

Reserve

Federal

the form of gold

a

make progress.

0f non-gold

1934,
is

there

our

redeemable

unless

in it.
If

gold,

As

commodity it
would be of equal value. On such '
a
basis, business could plan and ;
as

<

.

#

proposal of the gold-mine

The

- J
only discount being

wjth gold

in value to the standard

unit

gold

dollars

our

in

,

demonetized.

be

and

money

government's dealings with fore}gn central banks and governments do our dollars pass at parity

for

takes

it

at

of

them

not

would

before March, 1933,

holders

gold at parity rates.

disposal
foreign central banks and gov-

itself

t

parity everywhere, interests, if made effective, would
that in- +u~
throw us into a thorough-going volving the costs of conversion system of irredeemable currency
into gold at parity rates. -Today —the
worst system known to;
our
non-gold dollar, like other man. A purpose, apparently the ;
irredeemable currencies, has fallen central purpose, of their recomto
a
low estate and
is hawked mendation is to obtain a higher
product, though
about over the face of the globe price for their
often, if not usually, other rea¬
at various rates of discount that
sons are given as excuses for their
have no relation to conversion into

government
properly compel our people to accept the dollars made of the cheap-

ess

a

in principle at
the

Should

Why

the Universal

dollars, regardless of type, passed

the government that

part of

of

redeem

moral

of

evidence

ruptcy and
the

it

when

rency,

Question

Goodness of Our Dollar.

and that

bankrupt,

ers

grown into

vs.

The

avoided, that nation is

be

cannot

economically

has

suppose

gold market, which ac¬

redeemable currency,

Some day, we believe, the American
public will awake
to the fact that what used to be termed the
pension abuse
now

.

to

gold standard and a
would mean,
simply, in our case, that gold could
be bought and sold freely at the
fixed price of $35 per fine ounce.
Stability in our standard mone¬
tary unit and in foreign exchange *
rates, in so far as our dollars are *
involved, would be the result. Gold ^

12

page

Irredeemable Currency

our

i

•

it

gambling.

discrimination
surely should be in favor of our
own people and against foreigners
rather than in favor of the foreign¬

We

enter

The free

begin with taxation

*
,

great uncertainty and risk to
business enterprise and for
be reduced to the status of

for

companies

from

'

parity fixed in terms of gold;

no

next year.

Continued

of the same
made of gold; ;

tuate

tion of these matters characterize the

elections

;

foreign exchange rates to fluewidely, since there would be

for

encouraging it would be should realistic considera¬
preparations for the

How

dollars

of

amount

.

cannot

currency

value

the

equal

promptly bring into consideration much of
now
carried on by the Federal Government.

customary, nor would he merely

balanced budget. Such subjects
come in for appropriate atten¬
tion when the time for it arrived, but first and foremost,
or so we think, he would
bring up the matter of Federal

as

irredeemable

action would

work

currency

depreciate and to fluctuate
widely in Value against gold; for
the price of gold to rise, since an

economizers.

the

the tendency

case,

irredeemable

an

>
»

to

which usually are left severely alone by the
There are dozens of others, and effective

agement

for

facets of fiscal man¬

but two of the many

are

The Gold Standard

Outlays

would

statesman
as

These

the former

is

for circumstances to force us into it.

not wait

did

In

accompanies a
a redeemable
different thing.

is a very

currency

How much better it would be

reasonably efficient.

we

gold market which
gold standard and

well surmise, to the Federal fiscal

situation.

The real

if

a

bare the true inwardness of the immense mass of

and inflation

agement, and want of interest in maintaining forces at
something approaching a minimum cost. The time may
come, should we remain in this fighting business on the
scale that has obtained in recent years, when we, like all
the other nations of the world, shall be obliged, to be at
least

1951

Thursday, October 25,

.

thorough-going irredeemable cur¬
rency is one thing and that a Tree

simply wasted by carelessness, faulty man¬

that which is

tontinued from first page

.

.

Undermining

Insidious

The

In¬

of Our Irredeemable

fluences

Currency.
is

It

well-established

a

fact

.

.

experienced monetary
economists that the great mass of
people do not understand the insidious undermining influences of
an irredeemable currency until
much too late, if at all. One of its
major characteristics is its tendency to depreciate in value. For
example, after redemption of our

among

<

,

■

•
...

currency in gold was suspended in
tllis country in March, 1933, our;

non-gold dollars depreciated 36%
in

o£

terms

the

goId

by.'

dollar

Sept. 20, 1933. In 1864, our green- .
backs, following suspension of re-deemability in 1861, had depreci¬
ated 65%
in terms of the gold
dollar.

.

Depreciation
currencies

in

services

and

of

power

also

all

of

terms

goods

reached the lowest level on record

since

?

proceeds apace..

our

\erms

in

of

v

* /
f
irredeemable

1951, the purchasing'
dollar, as measured,
of; wholesale
prices, 1

March,

By

,

,

establishment

the

of

„

our

Federal Reserve System.
This unprecedented

depreciation

v

„the rmrch^ingpower o£ our
o?mLev^anagers who have in-'
sisted that, if freed from

tern

cer-

gold program.,

Jhis proposal comes irom

re-i

the

requirements;

tg

gold-mine interests in South AtrPHpmntinn
th^v
rnnld
and
rica, France, England, Canada, and
with a
held against all deposits in Fed- this
country.
It is generally
era! Reserve banks, Federal Re¬ wrapped in a deceptive package, currency naving greaier sxaDiiuy .
labeled "free gold market," and in* 1?1 purcjiasing power than we ever,
serve notes, and some other varie¬
ties of our paper money, in prac¬ a larger deceptive package labeled
d under a redeemable cur-;

tificates, and the gold reserves of
the United States Treasury, are

"advancement of free private en-

tice these gold reserves are at the

disposal

of

only

banks and governments.
,7

.

,,,

monetary

be

all

dollars would

our

!

interchangeable at the parity
our

same

rights

as

do foreign central

banks and governments in decid¬

method by which to test

the true value of gold.
s

t

an

people would have the fine

rate;

again, and that it is the

proper

d

a r

ounce

ing what variety
prefer to

use;

of dollar they

and

the

gold

re-

d

rate

Our present
$35
per

of

of gold is said by these

people to be artificial.
contentions

ertheless;
of

a

are

All these

indefensible. Nev¬

considerable number

good people, not at home in

the

field

of monetary

principles,

Reserve

have been persuaded by these en-

banks and United States Treasury

ticing labels and arguments to

serves

of

the

Federal

'

,

would

be

people

as

at

,,

,.

the

well

as

.

our

of foreign cen-

tral banks and governments.

their support to the proposal
those gold-mine interests..

give

.

disposal of

Q^
4

it

'That

is
a

Despite
dence

that it pro-

gold standard, that it is a. means

hands

rency.

this

by which to place gold in people's

IT our currency were made re-

deemable,

of

vides the quickest way back to a

.

domestically.

use

advocates

program also claim

Our peo-

pie cannot touch those reserves for

The

terprise.

central

foreign

important to understand
free gold market under a

has

wrong in

the fact that the evi- j
already proved them i

their contentions,

as

they.

should have known, from'the start,J
would, be the "case; they still cling'

powers!hrid'f&ii 'to fnfornoL
people-that their! major con->

to their

the

tentions

have

refuted*-

been

facts and principle were
these

men

If;

respected,,

would explain what-

has'

happened, resign, and ask: that a;

be instituted'
depreciation of our cur-^

redeemable currency

lest the
rency

become

even

more

nounced.
;

There

pro¬

*

is

no

valid defense for'

scheme of monetary manage-^
provides no effectivebrakes to control the money man-;

any

ment which

agers.

such

World

experiences

management

teach

with:

lessons>

Volume 174

Number 5053

.

The Commercial and Financial Chronicle

.

.

(1575)

tions.

should profit.

erates

currency

gen¬

the

strains, many of them conflicting.
It poisons the bloodstream of the

redeemable

never

chills, induces

the appearance of

health,
there

a flush having
abnormally good

bloats

causes

that

look

common

a

course

like

here

real

in

tors

and

of

use

credit

of itself
is

It

abuse

other fac¬

or

of

danger that cause mone¬
problems. An irredeemable

tary

growth

trouble.

causes

the

and
they attempt to weigh ■ all
pertinent aspects of their picture.
Our tendency today is to com¬

to

ment

8.6%

favorably

upon

our

deemable

to

have

the

purchasing

of

power

our

to

life

total

learn

appeared in this country, we may
an old lesson the hard
way.

the

As

1939.

toms,

and,

if

it

becomes

ciently virulent, it
nation
The

to

tory

have

we

65

months

that

severe

had

in

against

as

of

It
45

1929-1933.

his¬

that

inviting

are

proof

that

high

new

he is operating on
level, that his assets

are

greater, that his prosperity is
unusual. All these things
may be
true.
But sensible people offset
their debts
against their assets,

revolu¬

a

good

in

1932

in

effect

is

people's

savings,

able

61

'.it

■

.

'

.

.i.

.•

Utility Securities

-iV

.

...

'

'•*

.*"._V

'

'

•''4

■.'!

i.

'•

..'

i

.

'

'

•

.

By OWEN ELY

$1,901^000,000

by depositors in suspended banks

■b

P.^Guercken of Ebasco
Services, Inc. recently prepared
brochure on the "Comparative Analysis of Labor

fL.^?-Pa§e
Utilization

.

;

1

-

<

:

-

in

the

Electric

Utility Industry."

His general eonclu-,:
sion is Li at the electric
utility industry, together with some other
segments of American industry, has not been able to
match its
technological progress in the use of labor as an offset to the inflation which has been imposed on the
national economy.
While the
output per employee has increased along with the installation of
modern generating
equipment, etc., the increase has been rela¬
tively slow, amounting to 3.12% per annum from 1930 to 1940 and
2*13% per annum from 1940 to 1950.
In

the

periods weekly salaries increased at the rate of
6.70% per annum, respectively. Because of
the latter change, the effective
utilization of the payroll dollar

'

1.10% per

*

showed

same

annum and

drastic

a

in

the

last

decade

compared to the
period. While during 1930-40 the coefficient of labor
utilization per dollar of weekly wages showed a
satisfactory inas

previous

v

crease

-

of

2%

per

decline of 4.40%

■

results

*

reversal

are

during

annum,

compounded.

per annum

obtained

1940-50

when

manhours

this

ratio

showed

Substantially the
instead

used

are

a

same

of

em-

ployees, in making calculations.
Comparing labor costs with "wages of capital" Mr. Guercken

*

points out that "the

.{■

same

employees have shared to an increasing
extent in the total wages of both
capital and labor, their participation increasing from 29.0% in 1933 to
51.0% in 1950, or a relative

:

-

increase

.

of

76.0%.

In

the

period

same

the

total

wages

of labor

increased 242%, while the wages of
capital rose only 45.9% and
its participation in the total
wages of both capital and labor de7 clined from 71.0% to 49.0%, or a relative decrease of 31.0%."
-

•

\

The

greater

a

study

security

indicated

that

the

average

of employment than

utility

workers

worker

has

in

manufacturing
plants or the railroads; the chances of continuous
employment in
the utility industry ranged from one and
two-thirds to twice that
7 in other industries.
As regards utility salaries, both the
long.

*

-

term level and the relative

?

general average.

"

stability
'

were

considerably above the
,

While the utility industry has made considerable
progress in
use of manpower through
installing larger items of equipment, using gas and oil as fuels, installing automatic devices and

better

,

f

improved

.

efforts

managerial

techniques,

it

is

obvious

that

additional

are

necessary through better control of operations and
careful evaluation of the economic purpose and
necessity of each
job. It should then be determined whether each job is being done

.

,

;

by the right person at the right time, in the correct manner and
the right place. Also careful analyses should be made of the
effect of larger operating units with
respect to labor savings.
The brochure points out that the
sharp rise in electric operatj. ing expenses has been principally due to increases in taxes^
pay¬
-roll and fuel costs, with the wages of labor now occupying the
second position slightly below taxes.
The following table shows
: the. percentages
of operating revenues of major expense items
:

V. in

.

the

1943

1947

1948

■V

17.5%

14.7%'

21.6%

21.0%

20.6%

16.4

24.1

18.9

19.3

21.0

Fuel

7.9

Operating Income
These

,

17.3

17.2

17.1

10.9

9.8

9.5

9.8

34.3'

25.0

22.4

21.9

'

*':v

*

12.9

11.6

.Depreciation

„

•

figures

important

_

indicate

that

payroll

costs

are

21.5
now

virtually

capital costs (operating income above) although
1939 they were only about half as important.
The efficient
utilization of personnel is one of the most important sources in
which to obtain additional economies and improvement in earn¬
ings. Since no major changes can be expected in hourly rates of
pay (except as they may reflect changes in purchasing power of
the dollar) the industry's only hope is to plan greater mechaniza¬
tion and more careful job analysis. Very important savings might
as
in

as

be effected by such studies, Mr. Guercken

believes.

The detailed

^tables and charts shown in the brochure should be of considerable
interest to utility executives.




and

dollar

of

the

that

be

can

means

As

look at

we

dustrial

Na¬

Monetary

on

have

redeemability,

led

the

fight
compelled

are

is at last too late?

Senators

and

only hope for

Congressmen

currency

Continued

into

That is

from

redeem¬

a

inseparable.

page

production,

ourselves

the
to

perform
The

should

afford them either

the

or

opportunity

similar

a

their fellow

index of in¬

we

incentive

service

prosperity

progress.

re¬

rests

upon

hoax

ment, upon destruction and dissi¬
pation of our real wealth by war
and by giving it away, and upon

business grows
small business.
a

the blood of

people

boys, and that

a

of

all—the

idea

suc¬

upon

that

big

only by crushing

They tell us that
employing 499

certain company

large portion of all that prosperity

that

is deceptive because it is measured
in terms of a sharply depreciated

but

is

a

is

good for the country;

it

if

small

that

business,

hires

company

and
one

they classify it as a
currency.
•
big business, and insist that no
Although the figure for gross small business can ever hope to
national product in 1950 was 124% compete successfully against it.
Well, I guess they never heard
above that of 1941, gross public
130% above
credit was
approximately 130% above that
for 1941; the purchasing power of
the dollar had declined 46%; the
real value of current savings, with¬
was

adjustment

basis,

to

These

samples of important

are

that

we

generally neglect to

and scrutinize

mention

as

we

There

stand out

And

mind

let

us

ourselves

a

as

not

forget to

re¬

with emphasis as

tend to speak or

named

man

Charles

M.

born right here
He learned the
steel business under Carnegie, and
was

to create the United
Corporation. <;
Now when it was put together,

he

helped

Steel

States

fifty

United States
the biggest corporation

was

had

that

ago,

years

country

been

ever

—

seen

anywhere

or

that matter.

It

was

in

else,

this

for

five times as

as the next largest company
America, and a great many
here
that
people had never suffered from a
warning to
midget complex before were thor¬

elements

are

should

we

a

in Blair County.

re¬

gard our activity and prosperity.

us.

of

Steel

40%.

data

man,

Schwab, who

capita

per

a

approximately

down

was

more

,

.

that of 1941; consumer

out

think

approv¬

big

in

oughly frightened by it. They said
it
would crush
its competitors,
corner
the
steel market, and

so-called prosperity
gouge the consumer forever and
that much of it rests upon the
a day.
1
blood of our boys and upon re¬
Yes, almost everybody was
ingly of

our

lated waste and destruction.
Shall We Return to

a

afraid

Redeemable

basic

The

body,

it

of

.

.

that is,

Schwab.

He

U.

...

almost every¬

except Charles M.
the President

Steel,

of

Time?

about

S.

its

was

and he knew all
so-called
monopoly

is
power—but it didn't scare him at
enough
all.
In fact, he left the corpora¬
intelligent leadership to institute
tion and decided to go into busi¬
a redeemable currency in this na¬
ness for himself, as a competitor.

whether

tion

we

while

to money
or

the

here

muster

ratio

of

our

gold

and deposits is adequate,

whether

until

question

can

we

institution

will

delay action

of

So

he

purchased

a

little

called Bethlehem Steel.
have heard of it

outfit

You may

somewhere.

To¬

redeemability
day it is the second largest steel
dol¬
producer on earth; it pours almost
lar is devalued again or there is
as much tonnage as all the
com¬
an enforced and sharp contraction
panies in Britain put together;
in the supply of non-gold money
and if you'll glance at its latest
and deposits.
annual report, you'll notice that it
Our margin of safety is growing hasn't
been crushed perceptibly

becomes impossible unless the

and could

disappear.
According to latest available fig¬
narrow

ures,

the ratio of

Such

well

manage

with

the

thus

has

have

we

when
brakes

best

far

a

not

able

been

to

endeavor does not

an

fall within the limits of
we

of

worthy

prudence;
being prudent.
generation are

not

are

we

this

of

the

march

us

will bring

we

into

heritage

great

handed down to

by

our ances¬

system of

our

and

currency

our

government dictator¬
end in the very near

ship to

an

future.

Surely

past

did not work and

generations

and invest,
develop and fight and die, to

and
pass

to

on

us

save

great

a

patrimony

squandered and

dissipated by

an

unworthy generation.

soon

our

which

compete against
day in the year.

us

every

No, the truth is that size in itself

given any business the
to crush its competitors. If

never

power

it

scarcities fostered by our govern¬

private debt

equipped

has

men.

Calamity Johns have made

the American public the greatest

and

that
to

we

solve

without brakes

run

able

man

for

so-called

,

been

to

—Large and Small

They have never quite
ceeded; however, in foisting

,

attempt to

able

We should not

10

mind ourselves that much of our

.

far been

satisfaction.

locomotive

cur¬

credit has

We Need New Business Ventures

depreciation.

our

our

cur¬

and freedom merely to have them

success.

are

redeemable

problems than

more

thus

our

irredeemable

who

Human freedom and

on

of currency

to

tors,

able

national income
pushed to any height by

figures

Economists'

govern¬

of

boast

remind

to

have

devise.
in

re¬

irredeemable

we

as

situation

Committee

the
great increase in our national in¬
come, we neglect to emphasize the
effects on it of our depreciating
nomic theories
Similarly,

the

presented

If

our

by its insidious influences.

1950

Taxes

,

of

Currency While There Is Yet

Payroll
•

have traveled

currency.

to act before it is too late.

and how intoxicated we

currency
are

r.compared with operating income.
1939

we

world

dream

institute

a

people

redeemable

a

management of

rency,

and

ential

The former,

of how far

to

Time is running out on us in
this country. Each of us needs to
do all he can to persuade influ¬

should jar us into some realization

Potential Labor Savings in Electric
Utility Operations

government

our

we

to state that it

which, is 61
times greater, is discussed, if dis¬
cussed at all, in terms of innocu¬
ous
platitudes. This phenomenon

■'

not

is

The

against

a

with

Even

League,

during the years 1921-1933.
We
greatly agitated over the lat¬

'*

dis¬

is

there

rency.

should fall be¬

for

times the- esti¬
of

loss

our

be

,

is

The

7%

is

there

Policy and of the Gold Standard

as compared with 1941
(using the index of prices
at wholesale), amounted to $116,»
565,524,000. This huge loss, hardly

total

reasonably

to

induced

will

members

1950 dollars

ter loss.

i'

be

country if

tional

1941-1951, in

dollars

mated

in¬

if

currency.

dictatorship and disaster only

when

low the 7 % apparent limit and the

were

Public

not

What
this

banks, and E, F, and G savings

recognized,

be

success.

10.4%

redeemability of

the average value of life
insurance policies, time deposits
years

a

conditions

could

the

on

for the

could

only

protection

ment

of

was 24.6%,
highest in our history since
1914; yet under those most favor¬

because of the depreciation of our

in

limit

the

,in

the loss,

little known that

lowest

resumption

chance of
from

will

we

great. In 1941, the ratio

and

read much of the

we

the

which

tance

of the $101,-

in effect

in

increase

fact

had

V

bonds

a

below that

Although

in

this

seem

7%

gold
payments
stituted
with

in terms of 1926

$111,651,000,000

dollar,

as

barked upon a period of
recovery.
Other nations have
gone from ir¬
to

we

that

state
power,

559,000,000

spends freely and wrecklessly, and
points to his increase in activity

months

pression of 1873-1878, we resumed
gold payments in 1879 and em¬

currencies

stand,

not

dollars,

behaving much like the
prodigal spendthrift and waster
who, having borrowed to the limit,

business recession and de¬

redeemable

matters

general,

an

lasted

After

'

John Sherman has yet

are,

our

currency.

'

•

As part of our widespread con¬
fusion and gullibility, we

con¬

in 1873-1878 under

came

irredeemable

is

that result.

prostration.

longest period of business

traction

for

suffi¬

reduce the

can

state "of

a

symp¬

hand,

reached

within

in effect

insurance

approximately

have

Institute of Life Insurance reports
that

would

indicate that when the ratio falls

cur¬

For example, although the

rency.

which

redeem¬

a

A nation's banking
perform its functions

can

Evidence

to

on

system

10.9%.

depreciation in

does

attacks

only if there is

able currency.

debt and the great

it

government

forced

properly

purchasing

other

'

no

of

to

itself the seeds of trouble.

Since

ratio

average

for the years 1915-1932, dur¬

Government economy can be en¬

of

dishonest practices in a multitude
of ways, creates
doubts,

fears, and
distress, invites and generally leads

com¬

period the range
ratios was from 6.7

August, 1951, was $243 billion,

'

This

ing

in

k

an

yearly

born of trouble and carries within

the

10.4%.

ently relatively great activity and

currency,

on

and deposits is

money

with

pares

appar¬

size, makes possible quick ac¬
cumulation of fortunes, generates

in

non-gold

approximately

to ignore our large and mounting

currency.

A redeemable currency

national economy, brings on fever
and

is

statesman appears, as

did
Sherman in this country in
1870s, to lead the people into
area of safety
provided by a

the

multitude of stresses and

a

a

John

An irredeemable

-

That

unless

uniformly unpleasant, from which
we

31

right,
more than

by anybody! It is doing all

thank you, and so are
gold stock 200 other iron and steel companies

had,
the National
Radiator
Company wouldn't even be here,
in all probability.
Ever
since
the

it

day

was

started,
National
Radiator
has
always competed against compa¬
nies much larger than itself; and
that it has branched out into

now

fields, it has challenged some
of the very biggest enterprises in
new

our
::

country.

Some

-

started

to

produce

unit that put it

in fact, it
condensing

ago,

years

a

squarely into

com¬

petition with all the big steel
companies in the United States—
including
these
take

If it could sell
successfully, it would
our market for thou¬

ours.

units
away

sands of tons of steel

pipe; but it
just the same. It even

them

sold

had the brass to try to sell some
of them to us for use in our own

And what do

plants.

think

you

happened?
Well, we bought them.
We
bought them because they were
better

than

the

equipment that
—and

did

so

companies.
tional

old, steel-pipe
had been using
lot of other steel

we

a

that's how Na¬

And

Radiator

from

took

the

us

the world that
we could
have prevented it from
getting—United States Steel, it¬
self.
"\s';
r:
only customer in

that surprise

Does

Well,

you?

shouldn't, for it happens all the
time.
Some of America's biggest

it

who

companies,

their

facture
have

the

buy

used

to

iron

own

manu¬

powder,

gone out of that branch of
business
completely.
They

it

Ra¬

National

from

now

diator, becaues they can get it
cheaper, or better, or more con¬
veniently.
And

that's how it always is in
The

America.

nothing
product

at

and

the

customer

the

wants

best—the

the

but

best

customer

is

alone determines which

price

best
.

.

.

king.
He
companies

big or small; and which
or die.
He is the jury

shall

be

shall

live

and
last

judge and the court of
appeal; and all the Calamity
the

Johns

in

the

his decision.

world

cannot

alter

32

The Commercial and Financial Chronicle

(1576)

viduals.

Continued from page 13

viduals

Wnat Have We Leaned from

rate

Om Experience With Inflation?
in these regions
part of

tural production

said made countries in this

at about $6

billion

The net

a year.

cannot be

of the reduction

effect

in¬

accurately estimated. The cuts in

they had
been before the war. As a result
of these conditions, foodstuffs and
jraw
materials, which had risen
more than prices in general dur¬
ing the war, continued to increase
at a substantial rate for over two

income tax undoubt¬
edly
increased
expeditures for
consumption goods. The repeal of
the excess profits tax undoubtedly

the

ifhporters of food

world

stead

of

exporters

as

the personal

increased
but

corporate expenditures,

probably

actly when it

(3) The rise in wages: The in¬
fluence
of
rising
wages
upon

prices

particularly great prior

was

1946 because during this

to June,

period

wages

than

prices.

1939

and

rising faster

were

Between
October,
October,
1945,
the

"urban

so-called

rates,"

wage

fairly close approxi¬
mation
of
the
price of labor,
rose 38%.
Since there was much
which

are

a

of labor in
this period, the rise in the price
of labor is perhaps more accurate¬
fictitious

upgrading

ly indicated by the change in
straight-time hourly earnings

weighted by constant distribution
of employment. These rose from
47% between 1939 and October,
1945.

1939

Between

and

October,

1945, the index of wholesale prices
rose about 37%. Between October,
1945

and

June, 1946,

wages

less than the
saving. The tax

by

amount of the tax

reduction of 1948

after the war.

years

almost

came

was

ex¬

needed to help

limit deflation.

(5) The drop in the balances of
the Federal Government: Between
the

end

1947

of

the

1945

the

and

balances

of

end

of

thev Federal

government dropped by $24.2 bil¬
lion.
About $22.1 billion of the

during

occurred

drop

1946

and

$2.1 billion

during 1947. The drop
in spite of a substantial

occurred

increase in the cash surplus of the
Federal government.

balances of

the

the

and

ernment

The drop in
Federal

the

gov¬

cash

surplus of
the government enabled the gov¬
ernment

reduce

to

the

Federal

held

debt

by the public from
$251.7 billion in December 1945 to
billion

$222.6

in

December

1947.

The reduction in the Federal debt
out of the

Treasury balance either
to increase the public's

helped

con¬

holdings of cash and demand de¬
posits or, in case the debt repaid
time hourly earnings in manu¬ was
held by banks, reduced the
facturing rose 11.2%, the con¬ earning assets of the banks and
sumers' price index less than 1%, increased their interest in
making
and wholesale, prices 6.6%. The loans.1
To the extent that the
tinued to outrun prices. Straight-

rise

in

Business

soon

concerns

started to spend their deposits and
cash at pre-war rates, but indi¬

between October,
1945 and June, 1946 is particularly

cash

because
it occurred
while consumer goods prices were

debt,

wages

significant

surplus
used

was

of

reduce

to

the

the

surplus

government
the

Federal

not

have

at

which

yet raised the
they spend their

than

individuals?

are

on

concerns,

I

think

several reasons. One

the

hand,

other

spend for productive
purposes.
Consequently, they are less in¬
clined than individuals to limit
their

spending by their incomes.

strikes.
It

desirable

note

to

how

a

upward

rise in costs may be

to

limit

ment.

to

on

were

demand

meant that

not

increase the
prices be¬
too low in rela¬

tended
pressure

prices

cause

It

a

the

for

goods.

This

rise in payrolls
volume

tended

to

of

producing

did

employ¬

increase

consumer demand for

out

the

goods with¬

offsetting drop

an

in the business demand for goods.

Indeed, during the postwar infla¬
the rise in wages did
not
limit business spending at all. It
increased the tendency for enter¬

tion

prises to finance part of their de¬
mand for

capital goods either by
banks
or
by

borrowing from
■drawing on idle

bank deposits.
Thus the rise in wages was an in¬
dependent influence (1) in ac¬
celerating the increase in the voliime

averted

of money, and (2)

in increas¬

ing the rate at which money was
«pent This was particularly true,
as I
have just said, during the
period when wages were rising
ahead of prices. Even after June,

1946, when prices for most of the
time

rose earlier than wages, the
.short lag of wages behind prices
tended to limit the ability of busi¬

enterprises to finance, ex¬
penditures out of profits rather

ness

than by borrowing or drawing on
deposits.
Had the lag of
•wages behind prices been greater,

idle

the increase in

prices would have

been smaller.

<

;

(4) The reduction in taxes ef¬
fective January 1946: This reduc¬
tion occurred at

time when most

a

people expected

a

tion rather than

a

postwar defla¬

postwar infla¬
tion; The reduction was estimated




decreases

of

in

cash

the

were

and

inflationary to the
public's holdings
were increased or the

that

money

the

desire

banks'

■deflationary rather than infla¬
tionary. The rise in costs during
the
war
and
postwar inflation,

however,

that

holdings

a

rise in costs may accelerate a rise
in prices because under some cir¬
cumstances

extent

extent
of

is

tion

the

to

lend

was

in¬

IV

Why Did Not Prices Rise Faster
Between 1945 and 1948?

Why did not prices rise faster
and

higher than they actually did

between

1945 and 1948?

the

war

would

depression:

net foreign investment; the sec¬
ond, the end of the rise in agri¬
cultural prices; the third was the
increasing
accumulation of in¬
ventories; the fourth was a rise in
the rate of personal saving; and
the fifth was a continuation of a

large cash surplus in the Federal
budget.
(1) The drop in net foreign in¬
Throughout 1947 net

vestment:

foreign investment had been high
and was $8.9 billion for the year.
It

dropped, however, from an an¬
rate of $7.8 billion in the
fourth quarter of 1947 to $3.8 bil¬
lion in the first quarter of 1948,
and $3.0 billion in the second, and
nual

in the second half of 1948

it vir¬

tually disappeared.
(2) The end of the rise in the
of agricultural products:

prices

be

The fol¬

followed by

Many people

and
and

comes,

a

remem¬

bered the difficulties of 1921. Fur¬

and the fact that they did

indicates

that

consumers

were

spending quite vigorously. Never¬

accumulation

of

inventories.

In

1948, however, the recovery of in¬
dustrial and agricultural produc¬

might have tion was sufficient to permit an
vigorously. accumulation first at a moderate
This is shown by the fact that rate and then at a
rapid rate. In
outlays for consumer goods in the first quarter the annual rate of
1946 and 1947 were substantially
change in business inventories was
lower in relation to personal hold¬
$2.0 billion; in the second quarter,
ings of cash and demand deposits $4.9 billion; in the third quarter,
than in 1939.
$7.1 billion;
and in the fourth
(7)
Substantial repayment of quarter, $8.0 billion. Inventories
loans for carrying or purchasing did not become large, but, as they
securities: Between 1945 and 1947 increased in size, goods were bid
loans
by commercial banks for for less eagerly.
carrying or purchasing securities
(4) The increase in the rate of
were reduced from $6.8 billion to
personal saving and the accom¬
$2.0 billion.

theless,

consumers

even

more

panying limit to the demand for

(8) The substantial surpluses of

consumer goods: As the more ur¬
thermore, their painful experience
the Federal Government: The cash
in the depression of the thirties
gent needs that had accumulated
surplus
of
the
government
in during the war were met, in¬
made them "depression-minded."

Both

creased.

about $2.9

Thursday, October 25, 1951

.

that between 1945

spent

from

public's

were

.

Agricultural prices had been ris¬
1946, and again between 1946 ing rapidly in 1947. They reached
1947, the rise in expenditures a peak in January, 1948, when
reason is that individuals have the
for consumer goods considerably the index touched 199.2.
There¬
habit, much more than do busi¬ exceeded the
growth in personal after they moved more or less
ness concerns,
of adjusting their
incomes, so that the volume of horizontally until July, when the
rate of spending to their incomes.
personal savings dropped as in¬ index was 196.0. After July the
Although many individuals spend comes rose.
Between
1945
apd drop was rapid—to 183.5 in Octo¬
more than their incomes, they do
1946, for example, when personal ber and 178.0 in December. The
not as a rule push their spending
incomes increased by 5.8 billion, levelling off and eventual drop
substantially above their incomes
personal consumption outlays rose in the prices of farm products was
without compelling reason.
The
by $23.8 billion; between 1946 and confined to the United States and
fact that individuals buy largely
1947, when personal incomes in¬ is attributable to conditions here.
consumer goods limits both their
creased by $13.3 billion, personal In other countries prices of agri¬
willingness to finance their pur¬
consumption expenditures rose by cultural
products
continued
to
chases by borrowing and the will¬
$19.3 billion. It is unusual for ex¬ rise throughout 1948.
:• r
j
ingness of banks or retailers to penditures
on
consumption
to
(3) The accumulation of inven¬
extend credit to them.
Business
grow
faster
than
personal
in¬ tories: In 1947 there had been no
more

that there

lowing are the principal influ¬
reducing the public's hold¬
ences that have limited the rise
rising only
rather slowly
and ings of money. Ali of this was
in prices:
while there was still general ex¬ either inflationary or at least anti(1) The very general fear that
pectation of postwar deflation. deflationary—anti-deflationary to

Furthermore, the most important
wage increases (in the petroleum,
automobile, steel, and coal indus¬
tries) were achieved only after

when these sales

holdings of cash and demand de¬ billion.
posits to the rate of 1939. Thus
(5) The substantial increase in
the large growth in the holdings personal holdings of cash and de¬
of cash and demand deposits by mand
deposits in 1946 and 1947:
individuals during
the war has In 1946, personal holdings of cash
turned out to be much less infla¬ and demand
deposits increased by
tionary than the increase in the $4.5 billion: in 1947, by $1.1 bil¬
holdings of cash and demand de¬ lion. This increase in personal as-1
posits by corporations. This is im¬ sets held in the form of cash or
portant because the personal hold¬ demand deposits helped, of course,
ings of cash and demand deposits to limit the demand for goods.
quadrupled
between
1939
and
(6) The moderate increase in
1945, whereas in the same period the rate of
spending by consumers:
the holdings of cash and demand
I have pointed out that in the
deposits by corporations did not
postwar
years
individuals have
quite double.
not been spending their cash and
Why have corporations increased demand
deposits as rapidly as in
their rate of spending so much
1939. It is true

prevented

was

(4) Sales of government surplus
property:
The. sale
of
surplus
property was particularly impor¬
tant in the fiscal year
1946-47

.

individuals

and

enterprises

1946

was $0.2 billion, and in 1947,
$5.7 billion. Part of the anti-in¬

creases

in

personal incomes were

in
producing in¬
consumption expend¬
partly in expectation
of commercial banks:
Be¬
de¬ itures. After the first quarter of
that goods would later be obtain¬
tween the end of 1945 and the end
crease
the
Federal debt
in the
1948 a fairly rapid rise in personal
able at lower prices and partly as
of 1947, the loans of all commer¬
hands of the public.
This pre¬ incomes
produced virtually no rise
protection against a possible drop
cial banks increased nearly 50%—
vented it from reducing the pub¬
in personal consumption expend¬
in income.
from $25.8 billion to $37.6 billion.
lic's holdings of cash and demand
itures after seasonal adjustment.
(2) The great efficiency of agri¬
This rapid expansion meant that
deposits.
Nevertheless, the sur¬ The annual rate of
personal sav¬
culture and the rapid technologi¬
some persons and businesses were
plus did mean that the disposable
ing, which had been $3.9 billion
cal progress in agriculture: In 1947
able to spend more than their in¬
income of individuals and corpo¬
in 1937, jumped to $10.5 billion in
the physical output of agriculture
comes without reducing the abil¬
rations was smaller than it would
the second quarter of 1948, $12.8
was 22% above the 1939 average,
been
if
taxes
had
been
have
ity of other persons or businesses
billion in the third quarter, and
but
employment in agriculture lower.
to spend.
The rise was particu¬
Since the volume of ex¬
$14.8 billion in the fourth quarter.
was 14% below 1939.
Agricultural
larly large in commercial loans
penditures is determined by re¬
Thus, expanding productive ca¬
prices, it is true, rose more than cent incomes more than
which increased by $8.5
billion
by the
pacity had a chance to catch up
Nevertheless, size of
between the end of 1945 and the prices in general.
holdings of cash and de¬ with the demand for consumer
the advance in agricultural prices
end of 1947. Real estate loans in¬
mand deposits (especially in the
goods.
would
have
been
greater
had case of
:
'
creased by $5.2 billion and loans
individuals), the taxes that
farmers not done such a remark¬
It is important to notice that the
to
consumers
limited
only $1.4 billion.
personal
incomes
and
able job of increasing output while
rise in personal saving in 1948
Consumers obtained most of their
made possible the surplus did lim¬
farm employment was dropping.
was
accompanied by an increase
credit from business enterprises
it the volume of spending.
Part of the gain in farm output,
over 1947
in purchases of houses
because
the
total expansion
of
to be sure, was obtained by using
and plant and equipment by in¬
consumer credit between the end
dividuals and unincorporated en¬
The number
of 1945 and the end of 1947 was more factory labor.
Brought
the Inflationary
of tractors on the farms, for ex¬ What
terprises. Hence, it was the de¬
$6.2 billion.
v
Movement to a Halt in 1948?
mand
for
consumer
ample, more than doubled.
goods, not
(7) The rise in the turnover of
What brought the inflationary goods in general, that was lim¬
(3) The high rate of corporate
money:
The velocity of demand
movement to a halt at the begin¬ ited by the rise in personaT sav¬
deposits in the principal cities savings: In the two years 1946 and
This is an impor¬ ing. But the check to the. demand
1947 corporations ploughed back ning of 1948?
outside New York increased about
into their businesses about $20.2 tant question.
Indeed, it is sur¬ for consumer goods soon limited
14% between 1945 and 1947. Such
that
the
inflationary the willingness of enterprises tp
billion of profits. This was anti- prising
an
increase was, of course, in¬
movement did come to a halt be¬ spend on plant and equipment, as
evitable because during the war, inflationary partly because it re¬
duced the necessity of corpora¬ cause many conditions were still a comparison of 1948 and 1949 will
when goods were scarce and the
'■
;•>'
•<
Credit show.
tions' financing expenditures by favorable for expansion.
money supply was growing, the
was
cheap and plentiful, there
turnover, of money sank to ab¬ borrowing from banks or drawing
(5) The continuation of the slurstill large and unsatisfied
On idle deposits and partly be¬ were
normally low levels. The drop in
plus in the 'cash budget of the
demands for housing and auto¬
cause it limited the dividend re¬
Federal Government: The surplus
velocity during the war meant
Federal corporate and
ceipts of the owners of corpora¬ mobiles.
that much of the inflationary ef¬
in the cash budget; of the Fed¬
taxes
were
reduced
in
tions and hence the ability of the income
fect of the wartime increase in
eral Government, whiich h!ad been
government expend¬
owners to buy consumer goods. 1948,' and
an important restraint on 'the rise
money was not felt until after the
for
goods and services,
The purchasing power of corpo¬ itures
war.
I have pointed out,
in
prices in 1947 continued in
however,
which had been falling for sev¬
that there was an important dif¬ rate dividend disbursements failed
1948. Indeed, it was even larger
eral years, were rising
(though
ference in the postwar behavior by a large margin to keep pace
in 1948 than in 1947, rising from
with the growing output of indus¬ slowly) throughout 1947, and were
of.. business enterprises and indi¬
$5.7 billion to about $8 billion.
try: In 1947, the total dividend rising quite rapidly throughout
1948.
11"
Nevertheless, the inflation
:
vi
V-' :
view °f the policy: of supporting disbursements of c o rp or at ions
the prices of
did come to a halt.
government securities that were'
f $7.0
billion, as compared
was
in effect at this time, the
The Resumption of'Inflation ini
repay¬
with $3.8 billion in 1939—a rise
Five principal influences seem
ment of part of the government debt held
1950 and the Halt in the Spring
by the banks cannot strictly be .said, to of only
12% in the purchasing to* have brought about the halt.
have increased the banks'
of 1951
power to lend.
power of dividends.
In the same These influences all began to
The,, banks were always in a position. to
Why" did inflation resume i n
increase
period the physical output of the make themselves felt early in
their reserves by
.selling part
of their government securities.
1948.
The first was the drop in 1950? Until the outbreak of the
economy increased 64%.
were

The substantial rise in the

(6)

loans

inclined

resources

to

husband

their

flationary effect of the cash
plus was lost by its use to

sur¬

less

effective

creases

in

.

•

•

<

Volume 174

Number 5058

.

.

.

The Commercial and Financial Chronicle

(1577)
fighting
sale
of

in

Korea

the

inflation

quite mild. The rise in whole¬

was

prices

1950

during

the

first

attributable

was

half

almost

entirely to advances in the prices
of farm products—a

result of the

growing demand for such products
industrial

as

the

world

The

output
raised.

was

effect

throughout

the

of

world

crisis

second

quarters of 1951 expends

tures

nondurable

on

goods

(exclusive

dropped

lays

consumer

of

services)

only 1.8%, whereas out¬
durable

on

goods
The larger
down payments required were un¬
consumer

halt

in

March,

1951.

This

was

the month in which the wholesale

price level reached
halt to inflation is

peak.

a

even

This

more

sur¬

it

cause

in

occurred

the

face

of

personal

incomes, of ex¬
panding government expenditures,
and

of

growing outlays by busi¬
plant
and
equipment.
Furthermore, the halt to inflation
began at almost the precise time
on

ness

that the cash surplus of the Fed¬
eral
Government
changed to a
cash deficit and when the gov¬
ernment

balance

began

to

drop

rapidly.
The

a

drop in the

of

causes

in

1951

(1)

orders received

new

business concerns and (2) a
drop in expenditures by individ¬
uals for consumption.
How are
by

these two immediate

halt to inflation

of the

causes

to be

explained?

The drop in new orders may be

to

begin

Actually,

ary

during the hectie

buying of

scare

the first quarter of 1951, the phys^
ical
volume
of
inventories was

growing at

Why

fairly rapid rate.
it possible for inven¬

a

was

tories to grow in the face of such

strong

no

of

ume

inventories
the

ductivity
in

retail

in

retail

rise

a

pro¬

industry.

result of the rise

is,

the

of

inflation itself. The rise

(about 11%)

greater

for

the

found

orders.

drop

in

than

first

the

only

was

in

about

1950.

The

people purchased, helped industry
produce faster than goods were

being sold.
Thus/ rising prices
helped bring inflation to a halt.

inventories.

in

orders
increase

new

the

These

increased

is
in
in

physical volume at the annual rate
of $11.8 billion in the last quarter
of 1950, and $9.3 billion in the
first

quarter

1951—a

of

rise

of

roughly 10% in physical volume.
Far more' important than the in¬
in

crease

the

large

inventories

in

rise

growth of

The

increase

meant

halting

unfilled

orders.

unfilled

orders

in

which they could

on

delivery >for 2 many
Between July, 1950 and

expect

months.

March,

i

1951,

the

unfilled

of manufacturers

the

had

risen

circumstances

surprising that the
manufacturers

uals

from

it

the

tax

as

of

their

billion

$5.8
of

rate

incomes

of

1951

accompanied

was

in

rise
of $3.5 billion in the seasonally
adjusted annual rate of personal
tax liability.
A second reason is
that the profits tax liability of
corporations grew rapidly—it in¬
by

a

creased

by $6 billion as an annual
rate between the last quarter of
1950 and the first

quarter of 1951.
is that corporations

A third reason
do not

promptly pay out increases

in profits in the form of dividends.
Dividend
first

disbursements

quarter of 1951

erably below
of

1950.

!

in

the

consid¬

were

the fourth

quarter

:

.

.

drop mod¬
erately. Between March and July,

How has

the

the

strong

goods

infla¬

or

force;
57.5%.
bor
to

dustries

continued

increased

from

to

in¬

goods
rise.

They
billion in

$44.3

March to $49.9 billion in July.
/

:>2

Why did personal consumption

particular inflation would be the
effects of

a^l inflations. Neverthe¬

less, the effects (or, in some cases,
the apparent lack of effects) are
worth

noting.

expenditures drop in the face of

effects

rising

effects of the

incomes

personal

taxes?

There

One':is

sons.

were

that

after

several

in

the

rea¬

third

quarter of 1950, after the begin¬
ning of the Korean War, and in
the first quarter of 1951, after the
entrance of

the

Chinese

into

the

of

In

discussing the

inflation,

I

mean

the

tinction between the effects of this

of

1950 ^and * the

:third

last

quarters

quarter

1950 ahd (the first quarter of

the

rise

in

personal

of

1951,

consumption

particularly helpful
because

workers

older

of

force.

workers

In

the

in

labor

1940, about 42% of males

65 years of age or more were
the labor force; in 1950, 4he

of

in

proportion
One

ask

whether

it

low levels.

Is it not sufficient that

ducing

rise in prices?

a

If demand

exceeds the "full employment de¬

mand," does it not simply raise
prices without adding to produc¬
tion?

Unfortunately, the problem

is not

as

simple

might suggest.

these questions
The supply curves
as

for various types of

goods are ris¬
ing curves because various enter¬
prises have different costs. Hence,
the volume of production depends

the

upon

relationship

and

costs.

to

volume

and

men

a

.

As

costs,

between

prices

pressed that inflation will retard
the

accumulation, of

capital.

In

this may happen, as
when the rise in prices is so rapid

expenditure? ,vyfas
considerably
greater than the rise in personal

becomes

flation

in

advanta¬

employment of both

capital increases. There
sharp dividing point be¬

increases

in

that

demand

produce only increases in the vol¬
of

ume

output and the increases

in demand that
in

produce only rises

prices.

.

.'

.

//-y

(3) The high level of operations
industry that has accompanied

of

inflation

has

been

profits:

methods

for

good

Under

the

after taxes.

In

the

first

be

capital expenditures cannot
carefully planned or when in¬
is

period, when the annual rate of
personal incomes after taxes rose

insecurity

by $9.6 billion,
penditures rose

of

in

the

annual

after

second
rate

taxes

of

consumption ex¬
by $13.8 billion;
period, when the
personal

incomes

the

result

and

of

when

political

savers

en¬

deavor to transfer their assets out

the

the

country.

real

source

In this last
of

the

case,

difficulty,

of course, is the political insecu¬
rity, not the inflation.

byfl $2.3 billion,
During most of the postwar pe¬
personal
consumption
expendi¬ riod of inflation, business capital
tures rose by $9.8 billion. A sec¬ formation
has been going on at a
ond important cause for the drop
high rate. For the five years 1946in personal c.opspmption expendi¬ 1950
inclusive, expenditures on
tures was thie tightening of con¬
plant and equipment (including
rose

credit.

This is indicated by
the fact that between the first and
sumer




agriculture)
gross

in

the

product

1929

of

years

trolled, but

infla¬

control

as they had been
they were 8.6% of

when

the gross national product.

(4)

of

accounting used by
most
(but not all) corporations,
profits have been overstated by

when

of

were

10.2%

national product.

of

the

This

was

3.2%
is

of

public

pensions

to

the

when

end

the

59%,

rose

of

the

pension paid

1947,

profits

the

pension

however,

the

in

of

is

policies of
that

individuals:
institutional

some

such

It

investors,

college endowments and
pension funds, have been showing
a
growing interest in common
stocks

ings

in recent years.

banks

panies

right

Even sav¬
insurance com¬

and

have been

to

invest

their assets in

asking for the
small part of

a

stock. This

common

interest

in

common

stocks, however, seems to be due
more
to the higher return that
they )pay
in comparison
with
rather

bonds

inflation.

large

than to

There

has

increase

in

the

the

civilian

labor

force.

in

the

monthly labor market sur¬
veys since 1940.
Furthermore, the higher
unemployment
rates I in
postwar
years
may
a

mean

that

the

labor

force

contains

relatively large

number (by historical
persons
who are loosely

standards)

of

attached

the labor market.

3 In

to

years

1949,- profits
the

amount

replacing
1949.

the

drop in
inventories—$2.2

the

cost

billion

as

by
of
in

When proper accounting methods
used, it appears that 1949 was the
most
profitable year in the history of
American corporations.

;

consumers

'

have

been

powerful stabilizing element in
community. There have beea.

a

the

exceptions to this rule (the third
quarter of 1950 and the first quar¬
ter

of

1951)

their

but in general

con¬

have been slow to increase

sumers

They have been
periods of recession
spending. On the

spending.
in

inclined

to maintain their

occasions when

they bought vigor¬
ously, they have not kept up this
behavior very long.
The war and postwar inflations
do not sustain the

a

frequently ex¬
view that "controls will

pressed

personal

better

most

prices

vestment trusts have

ing

rapidly,

but

been

not

been

moved)

grow¬

of

dividuals

the

have

in¬

years

there

in

has

the

their

been

moderate

a

drop

holdings of E bonds, but

civilian

the

main

to' the

prices.

policies
their

and

assets

their

to

investment

decide

whether

properly divided
between inflation hedges and nonare

inflation

hedges. The increase in

follows:

as

Demand

retard

They

-

S.

Dec., 1945

$4.2

$20.8

deposits

'

7.2

24.9

24.1

-

44.4

Government securities

VIII

•'

,,

,

.

Recent

Experience With Inflation I
What

can

we

learn

recent

from

t

the

experience with inflation?

Recent experience reminds us that
the demand for goods is deter¬

mined

in

large

by the
is spent as

measure

rate

at

which

well

as

by the volume of

This

is

not

Recent

minds

us

money

exactly

new

the

rate

at

a

more

be-

$19.7yj?
29.6-"..

,

53.1

;

gross

ro i

13.1
50.1

/

y

149.8

101.9

tween the

looks

41.6

■

77.2

the

Dec., 1959;V

•

quantity of money and
national product over¬

changes in the distribution
supply. The war riot

of the money

only greatly increased the money
supply, but also changed its dis¬
The share of privately
owned cash and demand deposits
tribution.

held

by

corporations

(the

fast

money.

spenders) dropped from 38.2% in

knowl¬

1939

experience also

that

is

6.9...

5.7

Ordinary life insurance in force

Conclusions from

in

in¬

(In Billions)

Dec., 1939

Savings and loan shares..3.9
U.

rise

less

or

"normal" relationship

less

—

Time deposits
;

the

more

view that there

The
or

!.

Currency

Between

definitely limited the rise in prices
by permitting the restoration of
pre-war relationships between the
supply of money and the gross
national
product to be brought
about partly by an increase' in
production. '«■■■,,
1;
•
;'
"

personal holdings of assets of the

none-hedge has been

gross

entirely
1946 and.

goods, price controls did

than

more

review

the

physical output of the
American
economy
increased
nearly 14%. By holding down
prices until the economy was
ready to increase its output of

to have been limited in

to

in

the

1948,

seems

need

rise

this

rise.

price

a

this

larger holders.
Quite obviously, most individuals

re¬

national product was not

continued

rapidly
holdings of the
very type of assets that lose pur¬
chasing power during periods of
inflation.
During the last year
increase

to

1939/ But

the

12

last

(when

were

as large in relation to
demand deposits
and
outside of banks as in

currency

inflation

controls

almost

was

rapidly

through

increase."*

1948, the gross na¬
tional product increased until it

number of stockholders in Ameri¬

Right

to

and

adjusted

industry.

allowed

price

enough to raise substantially the
can

prevent a rise in
the volume of money

once

It is true that between 1946

housing than of a search for
protection against inflation. In¬

edge.

of railing prices, such
have been understated
of

ac¬

period,

•*'.

that

has

This

any of the postwar years.
figure for 1929 demands an ex¬
planation.
The
estimate
of
the
unem¬
ployed in 1929 was, of course, not com¬
parable to the estimates that have been

this

In

1946

great

and postwar inflations

increase has been primarily a re¬
sult
of
a
desire for
more
and

the

for

of

not permanently

low

based

show

of

been

in

even

it has been in recent

as

•.

war

holdings of real estate (a good
hedge against inflation), but this

unemployment averaged only

the

fear

also

•'/.

The

true

as

Some
of

is

true

period

needs.

limited

as

years.

investment

the

not always be counted upon to be

cies—particularly

the

needs,

willingness to draw on large re¬
cent acquisitions of liquid assets
was quite limited. Perhaps it can¬

1950

little effect upon investment poli¬

quite

was

made

a

1947,

cumulated

purchasing

(6) Inflation has had surprising

was

and

increased

scheme

pre-war

accumulated

lays. This

Old

was

of

course,

the vol¬

as

size of personal consumption out¬

primary
Age

the

of pensions.;

power

over¬

of $5 billion dur¬
those years.
Even

correction

infla¬

only about 10%. The amendments
restored

of

are,

expectations, and the size
of individual holdings of cash, de¬
mand deposits or other liquid as¬
sets. Nevertheless, the volume of
recent income seems to be by far
the principal determinant of the

price index

average

under

and Survivors Plan

to

There

influences, such

ume

pension scheme

consumers'

people

state of

revised in 1950. Between 1941

and

which

other

The Federal

was

years

less than in

The

lacking to

are

at

by the volume of recent

incomes.

(5) There has been a consider¬
lag in the adjustment of the

size

rate

goods is determined in

consumer

years

excess

1929

con¬

-

the main

consumption

overstatement of profits, however,
corporations did well in most of
2 In

and

be

can

flation shows that the demand for

-

replacing inventories in
rising prices.3 In several
(1946, 1947 and 1950), the

large—in
ing each

money

The recent experience with in¬

in the community.

the amount of the rise in the cost

statement

of

ways

the

money.

The high level of employ¬

cor¬

faulty

that

incomes

cases

rise

production

of

,

was

demand be large enough to pro¬
duce full employment without pro¬

of

extreme

Even

growing

about 45%.

was

may

necessary to have inflation in or¬
der to reduce unemployment to

it created.

<

has

it

to the postponement of re¬
tirements and has increased by a
moderate amount the proportion

strong demand and the specific
effects of the rise in prices which

•

second!'.and

in the labor

were

led

strong demand for porate

goods that produced the inflation
—I do not attempt to make a dis¬

(l)The inflation has not pre¬
fighting, -individuals spent at an
abnormally ohigh • rate. ♦ This is vented a rapid accumulation of
shown by:the fact that between capital: Fears are sometimes ex¬
the

over

has been

older

tween

durable

for.

proportion

1947, 56.5%; in 1950,
The strong demand for la¬

is not

the

demand

the

in

affected

in

but

war,

age

the economy? It would be wrong
to assume that the effects of this

orders

force

of

tion

years

labor

dropping to prewar levels.
1940, 55.2% of persons 14 years

they dropped from $28.6 bil¬

12

postwar

geous and the

substantial

the

In

to

$21.0 billion. Even in the
face of falling new orders, unfilled

in

compensa¬

from

1951

the last

in

prevented

lion

of

1939

brought about by the

larger

the Economy?

.

adults

relative

How Has Inflation Affected

should

In

labor force in contrast with 17.2%
1939.2 The rise in the propor¬

prices

VII

not

as

in

in¬

personal

between the fourth quarter
1950 and the first quarter of

orders of

new

annual

that the

was

liability of individ¬

rise

keeping their
fast as prices—

labor force.
During most of the
postwar years unemployment has
been less than 5% of the civilian

of

volume

changes in the rate of spending
by changes in the quantity of

In

well

has

comes

Un¬

is

One

increased

orders

$27.0 billion to $51.9 billion.
der

the

was

that many enterprises had

placed orders
not

in

orders

new

personal

reason

rose—the

in

partly

The

as

the

tional

group

The greatest benefit that inflation
has
conferred
on
wage
earners

was

prices, therefore, by lim¬
iting the physical quantities that

reasons.

4.7% as
the gross national prod¬

choose to spend their money. And
it
is
not
practicable to offset

a

of

tion

in

three

large

both

only

were

employees was 52.9% as ment and
production that has ac¬
large as the gross national prod¬
companied inflation has meant, of
uct; in 1945, 57.2%; and in the sec¬
course, greater abundance of goods
ond quarter of 1951, 54.5% as
large. and a higher level of

was

sales

1951

of

the volume of income

profits

uct.

employees:

physical vol¬

that the

so

retail

of

quarter
•y.3%

remarkable

prices

sufficient

1939

tion:

prices—that

process of

munity to control the level of
prices. There are ways in which

as

tion, however, profits did become
as large relative to the
gross na^-

as

though there have been great dif¬
ferences among different groups
tion

an
important limita¬
capacity of the com¬

the

on

approximately 25%.

incomes rising

of

indicates

tion

large as the gross
national product; in 1948, 7.3%; in
1949, 7.4%. On the other hand, in

the proportion of the adult
popu¬
lation who are members of the

growth

American

But it was also

done

it

earners

was

Wage

have

This is important because

money.

able

the

of

(2)

5.5%

were

partly a result of
physical output—

was

increase in

tribute to

a

1950

of

of inflation. In 1947,
(corrected for changes in
the cost of replacing inventories)
years

been to keep the rate of un¬
employment low and to increase

The

after

new

expansion of plant and equip¬
ment
(including agriculture) be¬

the

profits

of

demand?

new

to March was really one of
significant change in the vol¬

Between

1929, expenditures On plant
and equipment were 10.6% of the
gross national product. The phys¬

for the

But why did not rising prices
March, 1951.
raise incomes sufficiently to cause
orders in January,
1951 were slightly larger than in buying power to keep pace with
physical production? There were
March, but the period from Janu¬

said

during the

as

'twenties.

tween the end of 1945 and the end

the

were

large

doubtedly especially effective in
limiting purcnases. A third cause

ume

immediate

halt to inflation

the

of

1922 to

ical

prising than the halt of 1948 be¬
rising

as

boom

decreased nearly 18%.

drop in consumer demand
precipitated by the Korean War was
undoubtedly the growing
upon the demand for goods and abundance of goods.
This dimin¬
upon prices requires no discussion. ished fears of immediate scarci¬
I turn, therefore, to the question ties
and
of
higher prices.
The
of why this second postwar in¬
growing abundance of goods is
flationary movement came to a reflected by the fact that even
.

virtually

S3

re¬

which

is spent is subject to con¬
siderable change and that changes
in prices may be due more to

shares
•

<

in

26.8%

to

held
Vf

by

1945

individuals

Continued

on

the

and

(the

page

34

money

are

changes in the
than to

rate

of

spending

changes in the quantity of

4 The
quoted
phrase
is
from
the
Twenty-First Annual Report of the Bank
of
International
Settlements,
"Federal
Reserve
Bulletin," September, 1951, „p«

1121.

,

'

The Commercial and

34

.

.

Thursday, October 25, 1951

.

through the propa¬
ganda that is dominating our
daily lives. Forget the ram¬

Markets
Walter

|

ifications;

Whyte

peeks at the market and
determine from those what
take

—By WALTER WHYTE=

*

jje

ly in your hands when the
market whipped around, ske¬
daddled like a frightened rab¬
bit and started looking for
holes to hide in. I pointed out
that
the market was high

'

#

thing.

Dow theories are one

committed

nation

A

to

an

of cannons and less

economy

butter is another.

If

you agree

then it
defense industry

that the latter is true

that

means

The
enough to make a reaction
major fly in the ointment is
highly dangerous. The fact
taxes. If too much taxes are
will continue to prosper.

that the reaction came so soon

taken off the
after I wrote this piece was a
revelation but should not have perity evident

the pros¬

top

in earnings re¬
surprising to readers of ports will seldom be seen in

been

the balance sheets.

this corner.

*

*

#

.

*

*

*

,

I also wrote that

though I

The

taxes

new

aren't sur¬

prising. They were expected.
expected the market to go
The reaction also wasn't sur¬
higher, I didn't think it was
wise to get aboard on strong prising. It, too, was expected.
But the time to take advan¬
days; I preferred buying on
tage of situations is when
sell-offs.
Well, you got the
sell-offs and that was the time everybody is rushing to sell.
[The views expressed in this
to get in.
article do not necessarily at any
*

*

*

stories

all kinds of

are

now

current explain¬

ing the most recent reaction.
I won't bother repeating all
or even most of them, because

little
in the stock market.
circu¬

widely

most

the

with

those

those

ence

is that recent experi¬

reason

that the public

indicates

prepared

support

to

restraint

strict

is

now

and

but

in the

that

will

Continued

recent

It

GREENVILLE, S. C.

—

J oel E.

of the
Greenville office of R. S. Dickson
is

Martin

manager

now

are

in a position

to discuss it, or even make
sense out of it. But all I know
I read in the papers

and any¬

body ^lse who can read has
to the same papers.

access

#

#

#

I don't for a minute

believe

that any "cease fire" talksvwill
end in more than a nervous

We have been spend¬
ing and arming too much to.
pull away, in the foreseeable

peace.

Our entire economy is

future.
now

tied to

cold war, look¬

a

ing toward a hot war, and in¬
flation is the order of the day.
Whether

our

Whittington Mgr. for
Varnedoe, Chisholm

Burnett

&

Co.

of

New

York

for many years as head
the cashier's department. *
City

of

Paul Gardiner Opens
(Special to The Financial Chronicle)

BELMONT,

Calif.— Paul
H.
in the secu¬

Gardiner is engaging

rities business from offices at 888
El

Camino Real.

PUT

OPTIONS

Per 100 Shares

@56% Dec. 21 $287.50
@61% Jan. 25 300.00
Is..@46% Jan. 25 300.00

Northern Pac..

Southern Pac..

Southern
Am.

Rwy.@53%Nov. 26

Cyanam.@114

Dec. 13

Zenith Radio.. @65

Nov. 23

United

Securities

Aire...@33%Dec.

7

300.00

875.00
275.00
287.50

Jones

&Laugh.@25% Dec. 15 200.00
Derby Oil
@22% Dec. 15 162.50
....

Executed

Orders

Amer. Woolen.

on

Admiral

Pacific Coast Exchanges

Established

1919

v

SECURITIES

Members

v

New

York

Stock

Exchange

York Curb

Exchange (Associate)
San Francisco Stock Exchange

New

Dec.

3

100.00

Corp..@26%Dec. 24 350.00
137.50

mos.

@17% Dec. 31
Sug.@21% Dec. 22
Republic Steel @42
Jan. 25
U. S. Steel...@41%Dec. 26
St. L. San Fr..@29
Dec. 7
Chi Mil St P pfd@45
Dec. 26
Chrysler .....@70
Mar. 22
Radio Corp.... @22% Dec. 14

Magnavox

INVESTMENT

@37

Loews, Inc.... @18% 5

Schwabacher & Co.

...

Vertientes

187.50
125.00
150.00

137.50
200.00

325.00
362.50
125.00

Chicago Board of Trade
New York

Cotton

14 Wall Street

COrtlandt 7-4150

Exchange

Private Wires to Principal Offices

Stun

Subject to prior sale or price change
Explanatory

New York 5, N. Y.

Teletype NY 1-928

Francisco—San ta

Fresno—Santa. Rosa.




ing.

the

grains.

in

afternoon.

learned late last week that the

on

nation's railroads peti¬

Commission to reconsider its past •

freight rate increases and grant the full 15%
.

j

.

requested

,

,* ]•

permits for September was

seasonally!

in August, but showed a

*

y

City alone, plans filed during September fell *
$30,673,613 last year, and 67.3% below
previous month with $76,505,151..
;
.

' ?

-

,

J;; " .'•

-

Steel Output

*

'iv V'

-

y'

"•

■

'

■

The Current Week
'

,

Steel allotments for first quarter

.

s

y1 t

generally ;will .be smaller,

"Steel," the weekly magazine of

says

*

J.'"

Scheduled for Further-Mild Improvement *
•>

-

4

metalworking." Tonnage,
Production*
and allot-;

grants for the period are appearing as the National
Authority completes screening consumer applications,

far, for the most part, are below the volume requested.
especially true in plates, bars and shapes. Freight car and"
shipbuilding are among defense-support production lines that'
appear to have received cutbacks.
Further reductions in supplies"
for civilian goods also are indicated.
On the other hand, stepping]
ments

so

This is

up

grams

slow

combat tanks, aircraft, guns, atomic energy *
requirements, and certain other prime military pro-(

of allocations for

and electronic

econo¬
a

Industry;

in cotton and five
But short covering brought partial

For New York

danger of

because many
believe that, after

5

is seen, it adds.
steel supply and demand is likely;
magazine asserts. Supplies will be no-,

A better balance between

prices has continued for a

in

few years,

it will develop into a
galloping rise. The two recent in¬

first

quarter,' "Steel"

plentiful, but steelmakers say more realistic

more

allotting by the,

in; "NPA encourages hope for increased orderliness in distribution,
under the Controlled Materials Plan.
No sharp change in supply
1948 and the second in 1951, indi¬
is looked for over rest of the current quarter.
Cancellations ascate that the economy contains
result of NPA's regulation ordering consumers to charge thirdvarious arrangements and charac¬
quarter carryover tonnage against their fourth-quarter allotments^
teristics that prevent upward (or
have not been heavy.
Most of the cancellations to date appear to
downward)
spirals from lasting';
be in sheets, largely reflecting slowing down in consumer durable1
very long before being reversed.
goods.'
•
/" v-y* • v. v"*-":;*
Upward spirals are limited by the
Government restrictions on building are holding down struc¬
stiff personal income tax which
takes a growing proportion of ris-,
tural steel awards, the magazine continues.
Fabricators are more:
concerned with getting steel for approved work on their books
ing incomes, by the social security

terruptions

to

inflation,

one

pamphlet

on

request

by the stiff corporate in¬
tax, by the well-established,
practice of corporations financing
a
large part of their capital re¬

they are over limitations on new business. Cutbacks in the,
ship building program may release some plate tonnage earmarked
for December rolling.
It is not likely to satisfy more than a small.
than

taxes,
come

-

■-t

quirements by plowing back earn¬
ings, by the lag between increased
in corporate profits and increases
in
dividend
disbursements,
by
limited
concerns

willingness
to

a

quarter.
The railroads are placing 1952 rail requirements, the,
Pennsylvania Railroad last week ordering 100,000 tons, divided

Sheets are under somewhat less pressure.;
resulting in some order cancella-,
tions.
Tight supply is indicated through first quarter, but steel¬
makers think there will be * noticeable, easing in second quarter;,
when additional rolling facilities are scheduled to come into pro-'
duction. '
;
V y-\V
r-v'..
:
*
among

business

rising prices,

limited willingness of indi¬

viduals to increase their indebted¬
ness

(especially

short-term

three producers.

Cutbacks in civilian goods are.

increase their inven-,

tories in response to

by

of

percentage of unplaced business.
Bar producers had substantial
carryover from third quarter and expect an overflow into the first-

.

in¬

.

.

presents an increasingly serious threat
t to continued high-level steel operations, this trade journal detations of higher prices
or
in-;
clares.
Some encouraging results are reported from the collection
creases in their own incomes.
drives under way, but over-all supplies still are not gaining.
In;
All of this points to the conclu¬
fact, some steelworks are operating on virtually a day-to-day.
The shortage of scrap

debtedness) in response to expec-'

;■

sion that the movement of

prices

Unless a substantial increase in the flow of material
in the weeks immediately ahead, steelmakers say
curtailment in open-hearth operations is inevitable.
>

inventory.

is experienced

THOMAS, HAAB & BOTTS
Members Put & Calls Brokers & Dealers

Barbara

Monterey—Oakland—Sacramento

be

.

SPECIAL

Chic. Rock

Pacific Coast

mists
rise in

higher and
supply will

wages

money

18.4% to $25,034,632, from

This evidence is

States is remote.

costs

reported higher- permit valuations than in Sep-;
tember last year.
New England, up 58.4%, showed the best ad-;
vance, followed by West Central, up 34.9%; and East Central, up*
1.8%;
The largest declines appeared in the Middle Atlantic and j
Mountain groups; with losses of about 16.0%.

inflation in the United

important

Eastern

Far

policy is at fault I'm not pre¬
pared to say. But I can read
the handwriting as well as the
next man. What this will do

that the

evidence

and

Three regions

did in 1948 and
Technological progress will

runaway

and

'

probably not be sufficiently rapid;
to prevent a rise in costs. Hence,
the price level will have to adjust
itself to a slowly rising level of

a

hand

and

down

August'valuation figure of $437,636,400.
.

raise

to

page

cession—as they

sive

one

$411,796,992 last month, or a gain of 0.9% above the $408,266,993;
for September a year ago. - There was a drop of 5.9% from the1

SAVANNAH, Ga--Henry Whit¬
tington
has
become
associated
with Varnedoe, Chisholm & Co.,
costs.
Inc.,
Savannah Bank & Trust
Finally, the experience of the
Building, as office manager.
Mr.
Whittington was formerly with W. last twelve years provides impres¬
E.

sort of com¬

rise over the corresponding:
1950 month, for the first time since last January.
Permits issued .
in 215 cities reporting to Dun &; Bradstreet, Inc., amounted to;

and insurance benefits even
in periods of price stability or re¬
1949.5

the

a

managers

higher.
ad¬
justed to make possible a high
level of employment at the level
of
costs
fixed
by technological
progress and, collective bargain¬
The

But

The volume of building

based upon an

likely

was

lower than

wages

I wish I w^re

the longlevel will

y
%
y
The increase sought would approximate an advance in present >
levels of about 7.2% for the country as a whole.
The Commis¬
sion last August approved a temporary 9% freight-boost in the '
eastern territory and a 6% increase in other territories.
Special-'
increases were also allowed on certain commodities.

improvement factor. Other unions
will insist that the wages of their
members *<rise about as rapidly as

unions

bushel

decision

to

wages

changes in the consumer price in¬
dex with a three months' lag. .In
addition, these contracts provide

that

Bache & Co.

*:

*

*

hold

raise

"by the* carriers last March.

is that an early & Co., Inc., People's National
"cease-fire" in Korea is the Bank Building. Mr. Martin was the wages of men working under
chief reason for the sharp formerly in the firm's Charlotte the escalator clause contracts. In
office and prior thereto was with addition, recent experience shows
break.

lated yarn

and

price

engineers striving
by increasing
output per m a n h o u r and the
unions constantly endeavoring to

to

prices

costs.

tioned the Interstate Commerce

that

contracts

for wage increases

'

the other hand—the

a

for expecting

adjust

from

recoveries in the

experience

under

re¬

Mid-day losses ranged up to $1.30 a bale

periods of boom they are likely to

work

on

cents

in prices is
indicates
that unions will probably be able
to raise wages and insurance bene¬
fits rapidly enough to produce a
slow rise in labor costs. During
that

boom,

than

on

tion.

slow long-run rise

a

of

by

between

The State of Trade and

of money.

reason

faster

rise

that

is

there

turnover

The second

periods

During

determined

managers

price

The

the

the unions

level, either with or without some
help from public
policies, will

powerful
political
opposition
from quite
diverse parts of the" community
to really vigorous credit or fiscal
policies. The conclusion follows
that, while credit and fiscal poli¬
cies will be an important restraint
on the rise in prices, they will not
prevent moderate advances dur¬
ing booms. The advances will also
be increased by some cyclical rise
cies,

likely.

will, acting in

costs,

of

engineers

aggressive than

be less

to

appears

1951. But

influences

halt the contraction.

of

trend

petition

moderately adjust itself to slowly rising costs.

credit

on

unions

moderately restrictive fiscal poli¬

automatically

Dickson Branch

be

jerky—as

The

conclusion.

this

for

reasons

first

of

experience

rise

level

run

the last 12
years strongly
suggests (though
it does not prove)
that a slow
upward — unless technological
rise in prices over the long run
progress turns out to be faster or
is to be expected. There are two

now

Martin to Manage

the

is likely to

States

same

Thus prices will oscillate around

it has been in the
last five years, and, in fact, as it
always has been. The underlying
movement of costs will be slowly

1945.

in 1939 to 53.3% in

United

in
be

from 43.4%

rose

Chronicle.

post mortems serve very
purpose
But the

spenders)

the

verse, soon

With Inflation?

of the push up wages about as rapidly
They are presented as as the rise in the consumer price
of the author only.]
index.
About 3 million workers

coincide

time

There

slow

The

lies ahead.

piece was hard¬

Last week's

All I can do is

clear them up.

Says—

Qui Experience

be interrupted,

soon

in 1948 and in

was

halted the

What Have We Learned bom

can't

I

anyway

it

as

much

rip

can

the rise will

from page 33

anybody who

is also clear to

Tomorrow's

Continued

and our economy

to business

./

Financial Chronicle

(1578)

Association, Inc.
50

Broadway, N. Y. 4, Tel. BO 9-8470

years from January 1948
1950, when the consumers'
showed virtually no change
and wholesale prices dropped nearly 9%,
straight-time hourly earnings in manu¬
facturing increased over 9 %.

5 In

the

two

severe

to
January
price index

The American Iron

that

the

operating

rate

and Steel Institute announced this week

having. 93% of. the
industry will be 102.9% of

of steel companies

steel-making capacity for the entire

Volume 174

Number 5058

.

The Commercial and Financial Chronicle

.

.

(1579)

,

capacity, for the week beginning Oct. 22, 1951,

.

of

0.8

point from

a

This week's
steel

ingots

102.1%,

or

month

a

and

week ago.

a

castings

2,041,000 tons

ago.

or

an

increase of

^

reports of holding in the South and the possibility of a high Goveminent loan rate for 1952.
Reported sales in the ten spot markets

-

operating rate is equivalent to .2,057,000 tons of

and

A

amounted

,

to

for

the

entire

industry,

a

moderately to 357,100 bales last week, from 316,700 the
preceding week, and compared with 258,200 in the corresponding

;

week ago, and 102.1%, or 2,041,000 tons

ago

year

increased

to

compared

it stood at 102.6% of the old capacity

week

."v-,".'.' ;//.■

Previous Week

.;.../

-

•••.

Government loan

'• ..r"

800 bales.

distributed by the electric light
and power industry for the week ended Oct. 20, 1951, was esti¬
mated at 7,149,458,000 kwh., according to
the Edison Electric
'Institute.
"4. * '
Output

,*■>

J"

in

the

and declined

course

latest

reporting

reversed

week

its

moderately.
V
■
was 10,922,000 kwh. above that of the

ceding week; 646,918,000 kwh.,
the week ended Oct.

the output reported for the corresponding

/

■.

cars,

the
••

increase of 9,933

an

preceding week.

cars,

or

1.2%

'

-

rose

to

an

'

.

week
•

V

Business Failures

week,

Dun

^casualties

Inc.,

reports,

/

Despite

this

IFailures involving liabilities of $5,000

"V- from 94 in the previous week and
when

127 of this size occurred.

among

i;

were

A

or more

almost

Store promotions were
week for

-

A

•

of 4%

■*'

small casualties.

from

page

ter

department,

savings
over

.1,000,000,000 bushels.

•
.

r

Cash

.

•

of

to

markets

corn

firm, reflecting smaller

active domestic demand, and a

•

*•

The

offerings,
reduction in production estimates.

is currently estimated at 3,105,000,000 bushels, a
.'. decline of 2-3,000,000 bushels from the Sept. 1 estimate, due principally to frost damage, in- late September. ./• Trading in grain futures
on the Chicago
Board of Trade last week dropped sharply to a
new

crop

daily average of about 28,000,000 bushels, from 42,000,000 bushels
the ^previous week,- but were above the average of 20,000,000
bushels in the like week
'

*

"•

a

year

most

Cocoa values declined

moderately in fairly
active trading.; Coffee was firm with demand stimulated by re¬
ports of further restrictions of exports from Rio.
Lard prices
moved lower under the -influence of heavy hog marketings.
Hog
values broke sharply last week
the

•

o

-

following the unseasonal rise of

preceding three weeks.

--

*

$123

after

shown
was

the

sharp

in-the

advance

f

which

Government's

attributed

followed

Oct.. 1

crop

the unexpected drop
forecast.
The easiness

mostly to profit taking and increased hedge selling,
were moderated to some degree by price-fixing
foreign and domestic account and by buying influenced by

besides

able

be

ex

pei

an
no

re¬

to

feel

He

should

what

that

has

he

recognition of the value of in¬

a

centive.

We must devise and make

effective incentives for saving the

taxpayers'
centives

should have full authority for all

expenditures

for

tain

of

tion money received

administra¬

from the sale

publications and documents

similar
down

services,
we
could
amounts the

ing

is

a

is by

understandable.

or

I

would

percentage cut is necessary, let

distribute this cut throughout his

department
decide

he

as

where

sees

the

fit. Let him

cut

should

be

made.

Economies

appropriations.

difficulty of carry¬
ing out these suggestions. Mem¬
bers of Congress themselves have
definite ideas as to where
should be spent. Further¬

very

money

If

he

'
•

saved, it would furnish
powerful incentive for economy.

-

j

had

he

I

am

convinced that

weakness

in

the

an

present

a

inherent

Federal

more,
they face continued and
vigorous appeals from constituents

for the

financing of various proj¬
a department
head which would adversely affect
a
particular project would meet
with prompt and loud objection in
ects.

Any action by

budget system is the tendency for

some

the

that

these

The

appropriation

Congress to make

arate

many

sep¬

appropriations for separate

functions

in

single department.

a

example, the appropriations in

my

department are made separate¬

ly

to

executive

felt

had

the

Coast

and

so

if the

Geodetic

and

forth.

It would be helpful

Congress

several

were

matter

overall

that he,
operation within

of

for

the

so

budget, could

agency was

sible

to make the

appropriations to the head

department,

a

Survey,

see

a

his

that the

spent in the best

manner.

as

department head to do

a

that

pos¬

bet¬

committees of

expenditures.
the

If

they

administrative

head

been

arbitrary, frivolous or
unwise, they could make their
own
suggestions
for
the
next
budget. I am certain that the ex¬
ecutive head would give preferred
attention to these suggestions.

Another
with

one

point should be made

reference

these

This would permit

Nonetheless, I know
are sound.

suggestions

still, of course,
exercise final authority over the

Aeronautics Ad¬

Civil

quarter.

the Congress could

ministration, the Weather Bureau,

the

effort to protect the civ

an

and

remedy the

evils

<

so-called

treat

employees

robots and

or

automatic

as

which

u.

do not

>

a-

quately

recognize the differe.
quality of service which t
ployees render. In spite of %
years of contact with governimin

procedures, I am not yet acc
tomed to hearing an employee i
ferred to, not by his name, 1
"that GS-12

other

grade.

or

16"—referred

words,/by

'

his

sala.

-

-1 realize the

re¬

could spend as he chose on agency
activities even a part of the money

to

the more ef
to get ri 1

"spoils system" v
have created a body of practio
precedents and laws which tench

in

v-//V'//

,

for

In

as

Difficulties in Effecting

incentive

great

no

Civil Service Delinquencies

exhib¬

it permit the department head to

cut

by these

quests

they have

retain and encourage

ficient employees and
of the opposite kind.

department.

like, however, to make this sug¬
gestion: If the Congress feels that

permitted to re¬

purposes

his

be forced to save money

can

spending
were

in

There has recently been

instead of in¬
it.
If the ,//?;

money,

for

head

agency

of

sible

"across-the-board" cuts. This feel¬

laudable, but

praise.

head is to be fully respon¬
for running his agency, he

Since the department head anc

the bureau head do not at present
receive credit for savings made,

the

brings some reward
to his particular agency. We need

but the declines




between a capital
which is theoretically
manent, or semi-permanent,
operating expense which is

thousand

accomplished

of

-

Domestic cotton prices drifted mildly downward in the week

♦

difference

service

For

prices were steady with domestic bookings spotty as
large users continued to draw on their balances.
Export

demand remained dull.
'

/

ago.

Flour

and maintain continually th.

up

the only way the Executive Branch

ductions in printing costs alone.

thing

:

were

•

gov¬

the

the agency head should get some¬

yield has fallen below

...

is not only proper,
but in my
judgment highly desirable to set

ited in the Congress a feeling that

brought about through

were

-to sales under the International Wheat Agreement.
The latest
/official crop estimate placed the total wheat production this year
at 994,000,000 bushels.

:

.

appraising its value, writing oi
in a way similar to that done b„
private business. Furthermore, a

management job by holding
a minimum.
If a depart¬

ment

of the smaller bureaus in my

ernment

.

crop

an

to

costs to

one

■'{ '.

drop of 6,000,000 bushels from the Sept. 1 forecast,

such

as

good accounting practices applie J

.:

Commerce, for instance, over
$3 million was saved through im¬
provements in operation — in
streamlining of organization and
management. In the Patent Office,

the, past week. • The ^daily wholesale commodity, price '
index, compiled by Dun & Bradstreet, Inc., finished at 304.90 on
earlier, and with.J290.44 on
-V'--1-i-.;'
Grain, prices at Chicago were mostly steady: to slightly firmer
the past week with fluctuations holding within a narrow range;
Marketings of Spring wheat in the Northwest continued in heavy
volume although below that of recent weeks.
There was a fairly
active domestic demand, but export business was confined largely

was a

Government

should not be treated

In the pre¬

year.

why capital invest

reason

no

ment of the Federal

6

of

;

Oct. 16, .comparing with .303.54 a week
the corresponding date of last year.

This

is

the past

measure

a

Administration of the Department

,andrthe. first !time since 1944 that the

from appropriating for
operating expenditure. There

an

Too Much Waste in Government

1,during

.5

.different

recoverable.

/
Wholesale Commodity Price Index Makes Further
i-C-Gains in Week
^

.

count.
When Congress is appro¬
priating money for capital expen¬
diture it is doing something quite

a decrease of 5% was registered below the similar
For the four weeks ended Oct. 13, 1951, a decrease

These savings are

.

13,.

J'

recorded below that of

was

Continued

with last year

The-general.level of wholesale prices remained quite steady

,/A

desirable

pense,

slight increase also took place

general, trend of food .prices at the wholesale level.

r

Oct.

helpful

many

change in the
Federal bookkeeping and budgetmaking would be a separation of
/the capital from the operating ac¬

taken from

year ago, and for the year to
date volume advanced 5% from the like period of last
year.

'

-

as

ended

bring about

One

com¬

Wholesale Food Price Index Declines to 1951 Low

/

responsible in large

change from the like period of last

no

ceding week

<

r

week

which

economies.

According to Federal Reserve Board's index, department store
weekly period ended Oct. 13, 1951,

week of 1950.

A decline of two cents last week brought the Dun & Bradstreet wholesale food price index for Oct. 16 to $6.77, duplicating.
the year's low point touched a month ago.
This represents a rise
Of 4.5% over last year's index of $6.48, but it shows a drop of
;-7.4% from the 1951 high of $7.31 recorded on Feb. 20.
■
i "The index represents the sum
.total of the price per pound
of 31 foods in general use and its chief function is to show the

;

would

sales in New York City for the
showed

,

'

the

I'm well

difficulties

a

against it; but the arguments in
its favor outweigh those against
it, and I'm certain that adoption

lifting the level of retail trade, despite the prevailing

weather.

warm

climbed to 123

even

for

managed

.

parable weeks of 1950 and 1949, and they were down sharply, 43%,
from the prewar level of 277 in 1939.
v

country-wide basis,

index

the

plan would present and the
arguments which might be made

increase,

below the 165 and 181 which occurred in the

were

such

1951, increased 5% from the like period of last year.
In the pre¬
ceding week a decrease of 2% was registered below the like 1950
week, but an increase of 1% was registered for the four weeks
ended Oct. 13, 1951.
For the year to date, department store sales
registered an advance of 3%.
c,
// c

Register Pronounced Increase

Bradstreet,

&

on a

economically

of

aware

filling in popularly selling merchan¬

Board's

is

and the one which is not.

,

appreciable margin.

an

the Federal Reserve

Commercial and industrial failures, after a four-week decline, /
rose to 157 in the week ended Oct. 18 from
126 in the preceding
-

by

Department store sales

/

/

Total output for the current week was made up of 90,388 cars
and 24,393 trucks built in the United States, against 91,130 cars
and 23.303 trucks last week and 154,311 cars and 26,010 trucks in
the comparable 1950 week.
/
*■%

;;

which

dise, the tempo of new order placement assumed a more rapid
pace the past week and the total dollar value of bookings, includ¬
ing military commitments, surpassed that of the comparable 1950

In the like
■

the

in

as

made, it woulc,
reduce, although it woulc
probably not eliminate, the dis
crepancy between the department

estimated to be from 2%

fine their ordering largely to

estimated 114,781

.

volume

certain per¬

a

tend to

£•/• While the majority of civilian goods buyers continued to con¬

below the like •'

units from last week's revised total of 114,433 units.
week of last year output totaled 180,321 units.

,
"

retail

was

authorized

were

flat cut of

a

the cuts should be

+2 to +6; East and Midwest —3 to +1; South
+2; Northwest —1 to +3; Southwest 0 to —4, and Pacific
-f*l.to ~j~5.

Coast

Output Shows Steadiness in Latest Week

For the United States, total output

;r

spending for durable

more

New England

above

/T

not

are

expendi¬

somewhat

was

.

'

week of last year.

1

economy will
operations while

own

to where

—2 to

about 1% under the previous week and about 41%

»'

is

centage in the over-all

Although there

period ended on Wednesday of
below to 2% above a year
Regional estimates varied from 1950 levels by the following
percentages:
: ;
'

/A'v/ Combined motor vehicle production in the United States the,
past week, according to "Ward's Automotive Reports," advanced
; to 114,781 units, compared with the previous week's total of 114,433 (revised) units, and 180,321 units in the like week of 1950.
; ' •
Passenger car production last week in the United States was

;

economize

tures, with discretion

corresponding week in 1950, but

Auto

to

If the President

ago.

decrease of 20,206 cars, or 2.3%
an increase of 284,735
cars, or 48;8% above the comparable period of 1949, when loadings
were reduced by strikes in the coal and steel industries.
below the

is

to make

The week's total represented a

i"

same

Intensified promotions spurred store patrons to increased buying in * the period ended on Wednesday as the dollar volume of
consumer purchases edged
slightly above high 1950 levels in most

last week

freight for the week ended Oct. 13, 1951,
according to the Association of American

Railroads, representing

The

a

others benefit, or at least
similarly penalized.

Bradstreet, Inc., in its latest summary of trade.

period two years ago.

revenue

868,683

it.

economical; that his
penalize his

;

Total

totaled

87,700
through Oct. 4 to 369,-

,

goods in the week, a smaller portion of the shopper's dollar went
into hard goods purchases than at this time last
year, states Dun &

,

of

Carloadings Show Decline from Previous Week
Loading of

not
per¬

regions.

<

pre-

excess

ended Oct. 4 totaled

season

improve

wish

sincere

Trade Volume Rises With Increased Store Promotions

;

9.9% above the total output for

or

21, 1950, and 5,430,338,000 kwh. in

week

•

would

except

.halted continually by the feeling
that others are not being equally

,»•

upward

The current total

for the

bales, bringing total entries for the

,

The amount of electric energy

,

stock

to

budget

operation,

department
which had been rigidly econom¬
ical. The department head whose

year ago,,
Domestic mill demand and export buying con¬
light with inquiries mostly for prompt delivery. Farmers
selling more freely in some sections, but the holding move¬
continued greater than usual.
Entries of cotton into the 1951

ment

'

haps

a

were

Moderately Downward in

its

would not be true of

tinued

1,978,900 tons.

Electric Output Turns

department's
affect

35

to

the

impact of

"across-the-board"

department has been

cuts.
run

If
ex¬

travagantly, spending much more
than

was

necessary,

a

cut in that

If

government service is

to 4

improved and the taxpayer is
get more for his money, certain
things in the field of government
employment must be accorr plished. First of all, the prospec •
tive

employee and his

must

proceed

the

on

employ
basis

employment by the Federal Gdv
ernment

right.
the

is

Many

a

privilege—not >
to labor un£,

concept that

vested interest in

the

Federal

last

an

.

seem

a

citizen has

employments
or

right

to

V

a

Government,

inherent

j

once obtained.
In judging an e
ployee, recognition must not or"/
be given to his loyalty and he

esty, but to his competence.
not sufficient to get

It

/

only qualifi

employees; it is essential to

[

the best qualified available with.
the present pay scales.

This lea

"

to vesting in the department hee

greater responsibility in the selec
tion of
mere

employees than the presei
drawing of names from ;

so-called eligible list.
sary

to

It is

recognize that

Continued

neces¬

while

on

page

all

2

The Commercial and Financial Chronicle

36

Continued

biggest item in our budget. These
foreign aid activities are carried

from page 35

by

on

men

equal they

be created

may

rapidly develop differences. Some
are alert—some sluggish; some in¬

prominence

There is a limit to
number of government activi¬

the

at least not promote,
those who are second rate.
In connection with the budgets
rid

of,

which

or

presented to me period¬

are

ically, one of the always-recurring
items is "within-grade salary in¬
creases." This means in effect that
automatically,

since

now

almost

rated "Satisfac¬
tory," the employee gets an ad¬

undertake.

abandoned?

to be

bearable drain upon the taxpayers.

to keep out of this
distressing dilemma is not to add
One

way

"We

Aside

which might

arguments

other

from

properly be brought

cies, commissions,

Almost

vance.

no

We have a

mania for new agen¬

and study is to give away money. We don't
groups. When a new problem con¬ need a Santa Claus Department.
necessary to prove an "Unsatis¬
Santa Claus should operate as a
fronts us, it is common practice
factory" rating or to make the to suggest that some outstanding private—not a public—enterprise.
decision which would prevent the
In connection with the problem
man of great ability (the theoreti¬
automatic raise.

cal

It should be easier than at pres¬

ent to eliminate incompetents.

An
in¬

American

citizen has

certain

alienable

rights,

guaranteed

but

employment by the Federal Gov¬
ernment is not one of them. Every

is always

man

of great

one

involved in curtailing the

agencies
which we already have, we must
begin with the realization that we
are
not dividing the sheep from

Thursday, October 25, 1951

.

years

crash through all the maze of pro¬
cedures and gradations

been

established

and

which have
moves

un¬

enthusiastically with the current.
It

~

or

lowed

prejudice, should be al¬

without

interminable

ap¬

peals, some of them outside the
agency—at least in the important
policy-making positions.
On the other hand, there are

the

in

public

service, just as there
are in business or elsewhere, those
employees, devoted to their work,
who will try in every possible
way to do a superior job and give
everything they have to the pub¬
lic service.

To encourage and pro¬

mote and

adequately reward such
employees is of the utmost impor¬
tance.

Here, as elsewhere, the
question boils down to one of real

incentive.

The importance of this

concept cannot be overlooked

or

minimized.
I

have

discussed

some

possible

methods by which government ex¬

penditures

can

be cut down.

Excessive Government Activities
The

real

solution

to

mounting

government expenditures and

per¬

haps the only solution is, however,
wholly different. It is drastic but

of

reau

his problems, and has
with a new agency. It is

sidering
come

up

called

be

to

Plants
law

Small

the

Administration,

Defense

the

and

specifically provides that

shall not be affiliated with
within

any

other

agency

or

or

it
be

this

It

has

been

proposed that

be given a total of
$50 million to spend. The admin¬
agency

istrator is to receive

his

and

two

$17,500 salary
deputies are to be

paid at the rate of $15,000 each.
While I shall, of course, do every¬

thing in
out the

my power to help carry
wishes of the Congress, I

feel, as I have stated before sev¬
eral
Congressional
committees,
the

that

could

work

have

is the cut to be made?

and

been

military

expense

of

research

I

undertaking in

thing required

any one

is

certain

a

com¬

munity of approach by the Legis¬
lative

of

Offerings

not

am

And Pfd. Stk. Offered

us.

Executive

and

is, however,

branches.

to be

no reason

3%%
at

$15,000,000

due

debentures

Oct.

15,

197-3

100%% and accrued interest, and

104,533 shares of $4.25 cumulative
second

preferred stock at $102

share

of

Inc.,

are

25).

Continental

Sachs

that

is
the

offering

the

stock

its

to

company

the
is

preferred

second
one

and

Co.

underwrit¬

offering

common

ratio of

the

&

an

and

group

debentures

in

Co.,

being made today (Oct.

Goldman,

Lehman Bros, head

ing

per

Can

stockholders

share

of

new

preferred stock for each 30 shares
of common stock held of record
on

Oct. 24, 1951.

The transferable

discouraged, and if the American subscription warrants will expire
Shares of the
people mean business the savings on Nov. 7, 1951.
new
second
can be accomplished.
preferred stock not
subscribed for by common stock¬
capitalistic holders will be purchased by the
system is government credit. Lenin underwriters.
The backbone of

once

said

destroy

our

the

that

surest

way

to

capitalist regime is

a

to

The

debentures

are

to

entitled

sinking fund providing for the
That is still retirement of not less than $450,suggest that we 000 nor more than $900,000 of the
a

debauch its currency.
true.

I

must

at

do

not

times

all

and

all

under

circumstances balance the budget.

debentures
1954

for each of the years

through 1975.

They

are

re¬

The failure to recognize an emer¬

the

since

other

for

to the

out

was

amount

was

passed

potato growers of this

country the
This

there

sum

of $190 million.
than

more

that

spent

the

year

total

in

my

department for the Weather Bu¬
the Coast and Geodetic Sur¬

reau,

vey,

the Patent Office, the Bureau

of the
ness

Census, the Office of Busi¬
Economics, all the field of¬

fices of the Bureau of

Foreign and
Domestic Commerce, and the Of¬

being

added

to

the

old

I

in

constructing

give

you

a

second illus¬

military

It

is, aside from

expenditures,.. the

million for

raw

materials to be used in European

Street, Salt Lake City 1, Utah. Also available
analysis of Equity Oil and Utah Southern Oil.

Nekoosa-Edwards Paper Company—Analysis—Loewi & Co., 225
East Mason Street.

Milwaukee 2, Wis.

Also available" is

industries—a total of $1.2 billion.
connection

was

with

national

de¬

during the past year there
committed

a

billion

dollars

an

analysis of Texas Eastern Transmission Corporation.
Service Co.—Analysis—Ira Haupt & Co.,

New England Public
Ill

New
52

Oak

Broadway, New York 6, N. Y.
Central

York

Wall

Co.—Analysis—Van Alstyne, Noel & Co.,

Street New York 5, N. Y.
Fairman

Co.—Analysis—Sills,

Manufacturing

&

Harris,

Inc., 209 South La Salle Street, Chicago 4, 111.
Ohio

New

Oil—Data—Stanley Heller & Co., 30 Pine Street,
5, N. Y.

Also available is a brief bulletin on Stude-

Power

Light Co.—Bulletin—Pacific

York
baker.

Pacific

&

Northwest Co.,

Exchange Building, Seattle 4, Wash.

Pennsylvania Railroad Co.

vs.

Southern Pacific Co.—Bulletin

(No. 73)—Smith, Barney & Co., 14 Wall Street, New York 5,
N. Y.
Also available is a memorandum on Columbian Car¬
bon Co.

Placer

R. Lewis, Inc.,

Limited—Analysis—John

Development

Second Avenue,

1006

York

Seattle 4, Wash.
Co., 120 Broadway, New

5, N. Y.

Stout &

Co., 50 Broadway, New York 4, N. Y.
Company—Card

Cement

Libaire,
,

,

memorandum—Lerner

&

Co., 10 Post Office Square, Boston 9, Mass. Also available is
a memorandum on Gear Grinding Machine Co. and on Seneca
Falls Machine Co.

■

.
.

Seneca Oil Company—Analysis—Genesee
Powers

Valley Securities Co.,

Building, Rochester 14, N. Y.

Snap-On Tools Corp.—Memorandum—Swift, Henke & Co., 135
South La Salle Street,

Chicago 3, 111.

Wall

Soya

•

=

Y;

review—John H. Lewis & Co., *63

Solar Aircraft Co.—Special

Street, New York 5, N. Y.

Corp.

of America—Analysis—W. C. Doehler & Co., 15

Exchange Place, Jersey City 2, N. J.

•

& Co., 135 South La

Inc.—Memorandum—Hirsch

Technicolor,

&

Co.,

25

Broad

Street, New York 4, N. Y.
Texas Gulf
way,
on

Producing—Review—Ira Haupt & Co., Ill Broad¬

Also available is a memorandum

New York 6, N. Y.

the Lehman Corp.

Union

Oil Co. of

California—Review—Dean Witter & Co., 14

Wall Street, New York 5,

N. Y.

Control—Data—Raymond & Co., 148 State Street,
9, Mass. Also available is information on Thermo

U. S. Thermo
Boston

our

dollars.

rebuilding its

or

plants and $817

will

are

Supply—Analysis—Edward L. Burton & Co., 160

Main

South

Oil Ccrp.—Analysis—Dempsey
Salle Street, Chicago 3, 111.

Last
by existing agencies effec¬
year
the United States,
tively and with great saving of through the Economic Cooperation
the taxpayers' money.
Here, as Administration, provided western
elsewhere, the creation of a new
Europe with $374 million for ma¬
agency to supplant a number of
old ones results only in the new chinery and equipment to be used

ones.

Mountain Fuel

Sunray

fice of International Trade.

done

agency

Dealer-Broker Investment

Riverside

Two years ago

be




The ques¬

of Defense.

lions of

un¬

confronts

Rieke Metal Products Corp.—Bulletin—Eisele & King,

lining of government service will
substitute for facing this

was

agencies, chiefly the Department

fense

a

Continental Can Debs.

facilities in the United
States. Here a possible alternative
porting

amount

In

No amount of stream¬

addi¬

an

Pure Oil Co.—Review—Sutro Bros. &

World War II spent on foreign aid
of one kind or another many bil¬

do.

and

Standards, outside of its
regular appropriation, does a vast

tration of my point. We have since

we can

it

Bureau of

ment that there is

limit to what

since

tion is not simply between civilians

de¬

partment of the Federal Govern¬
ment.

■■

simple. It is embodied in the state¬
a

Standards

has given particular Organized 50 years ago. The typi¬
attention to the small business¬ cal
question, therefore, would be:
man's problems and is making If
appropriations for research and
great efforts to help him solve development are to be cut, where
locates them,

seems to me that
greater ad¬ them.
.Yv -Y';:
;Y.,YY >
••v
ministrative discretion, with pro¬
g The Congress has also been con¬
tection
of
the
individual
from

Whim

plants

deemable otherwise than by oper¬
Washington
gency may be just as fatal as the ation of the sinking fund at prices
to head up a new commission or
failure to recognize the end of an scaled
down
from
103%%
to
agency to handle the problem. He
We
cannot
avoid, 100% in the last year.
If. re¬
is usually given a large amount the goats.
We are not retaining emergency.
of money to operate with. I will only those activities which are however, the unpleasant task of deemed by operation of the sink¬
beneficial and eliminating those self-discipline which is involved ing fund the redemption prices
give you two illustrations.
in meeting this problem of econ¬ are scaled from 100%.% to 100%
One of the objects of solicitude which are useless. In almost every
omy. There is a limit to what we in the last year. ; Each share of
of many both in and out of public case we will be forced to a de¬
can
do.
We should be making the new preferred stock is con¬
cision to retain or abandon activi¬
office, and one of the matters de¬
choices
continually.
Eventually vertible into 2.3 shares of common
ties which are in varying degrees
serving close and continued atten¬
we must make some drastic ones.
stock prior to Nov. 1, 1961.
beneficial. Obviously, this presents
tion, is the situation and in some
a difficult problem and will prove
cases the plight of the small busi¬
to be a very unpopular job.
nessman. It is, of course, not true,
Continued from page 8

ability) be brought to

head has learned over the
that any effort to remove an
employee is fraught with a most
annoying and disappointing, if not
disastrous result. It is, of course,
obvious
that
the
agency
head
jtihould not from whim or caprice
be able to discharge an employee.
as some claim, that the small busi¬
We are faced initially with the
He should, however, have more
nessman has been or is being com¬
question of the relative impor¬
leeway than he has at the present
pletely crushed out in this country. tance of government activities; in
time. In all fairness, it can be
Until recently the growth in the
fact, that is the fundamental ques¬
said that the regulations and pro¬
number of business
enterprises tion. Let us
take, for instance, the
cedures and the philosophy back
has been steady and great. There matter of research.
The oldest
of them are designed primarily to
are now slightly over four million
and certainly the most eminent
keep the employee in his job. business
enterprises, most of them governmental research authority
Frequently the trial of an em¬ small. About 300 thousand are
in the country is the National Bu¬
ployee for incompetence results manufacturers. At this time, how¬
reau of Standards, of the Depart¬
Instead in the trial of the agency
ever, the small businessman does ment of Commerce.
The Bureau
head for prejudice or intolerance
have
his
problems— plenty of was appropriated about $8.5 mil¬
or
worse.
I recognize there is
them.
There are in the govern¬ lion for its
operation this past
some
risk involved in granting
ment,
and have been, several year. In contrast, the annual ap¬
greater latitude to the agency
agencies which are undertaking to propriation for the Department of
head to discharge or demote an
be of help to the small business¬
Defense
currently for research
employee, but in my opinion he man. This is true in the General
and development is $1.4 billion.
should have such latitude.
Services Administration, the vari¬ The Office of the
Secretary of
Many an agency head has finally ous branches of the, Armed Ser¬
Defense alone is given $90 million
come
to the conclusion that he
vices, the Reconstruction Finance for these purposes. This latter fig¬
will leave incompetents on the
Corporation, the Department of ure itself is about the equivalent
payroll rather than go through the Commerce, and others. Within the
of all the money which has been
unpleasant ordeal of trying to get Department of Commerce the Na¬
appropriated for res ear ch and
rid of them.
Having learned his tional Production Authority, which
development in the National Bu¬
lesson, he gives up his attempt to handles critical materials and al¬
agency

defense

There

against this suggestion, one is, in
my judgment, unanswerable., No
department at Cabinet level
should be created whose function

to kill an old one.

supervisor will
face the risk of time and effort

Santa Claus

a

Department"

where it can be
avoided; new agencies which must
later
painfully be endured or
liquidated. It is easier to prevent
the creation of a new agency than

all employees are

Need

Don't

agencies

new

organizations of

and

for

tional $1.1 billion for defense sup¬

importance, to create a new super, of these cases to
suggest which
agency to handle foreign aid. The
of the contrasted appropriations is
recent
Act
of Congress dealing
more important.
The answer may
with foreign aid discloses disturb¬
be clear to you.
It is clear that
ing progress along this line. In my when we talk about
economy and
opinion, as I said recently in a mean
it, we are facing a very
letter to Senator Connally, this
tough problem.
We really must
would create serious if not insol¬
answer
the question — "the $64
uble
administrative and foreign
question"—or shall I say the $64
relations
problems, and in the billion
question: What do we elim¬
long run would produce an un¬ inate? It seems clear that the first

When we
dustrious—some lazy; some bril¬ face this fact and move on from
liant—some
stupid.
We should there we immediately confront al¬
make a more determined effort most insuperable but not really
than has so far been made to dis¬ insuperable difficulties — for the
tinguish between a person's real question then is: What things can
be eliminated? Which among the
qualifications and a paper record
laudable and worthwhile
of achievements and to reward many
those who are efficient and get undertakings of government are
can

we

has

lately, supported by many men of

pleasant fact.
ties

government agencies.
been a growing move

many

There

Too Mnch Waste in Government

+K-.

.

.

(1580)

King Railway.
West End
way,

•Star

Chemical—Circular—F. Reilly & Co., Inc., 61 Broad¬

Also available is a circular on Lone

New York 6, N. Y.
Steel.

...

-

.

•.

,

.

...

<

..

.

•

„

,

yolume 174

Number 5058

.

.

The Commercial and Financial Chronicle

.

(1581)

The

Indications of Current
Business Activity
AMERICAN IRON AND
Indicated

steel

operations
to—

Equivalent
Steel

STEEL

of

month ended

or

Latest

Month

Week

capacity)

Previous

Week

Ago

Oct. 28

102.9

102.1

on

PETROLEUM

oil

and

that date,

Oct. 28

daily

(bbls.

average

of

gallons each)
to

runs

102.6

AMERICAN

2,057,000

2,041,000

2,041,000

Total

1,978,900

42

'

PETROLEUM

domestic

(bbls.)

average

Oct. 13

output

(bbls.)

;

*

6,329,150
116,426,000

6,337,600

6,282,200

6,536,000

6,544,000

6,124,000

21,330,000

21,446,000

21,720,000
2,558,000

20,090,000

8,833,000

8,874,000

8,598,000

8,472,000

Oct. 13

Distillate fuel oil output (bbls.)
I_Oct. 13
Residual fuel oil output (bbls.)
;
Oct. 13
Stocks at refineries, at bulk terminals, in transit and in
pipe lines—
Finished and unfinished gasoline
(bbls.) at
Oct. 13
Kerosene (bbls.) at

2,437,000

oil

Residual fuel

oil

9,329,000
8,330,000

8,396,000
112,000,000

Oct. 13

112,703,000

(bbls.) at
(bbls.) at

I

103,807,000

t

Refined

products

BANKERS'

CONSTRUCTION

ENGINEERING

—

a

Private

*
-

Public

49,139,000

47,966,000

47,972,000

42,910,00C

Imports

$195,220,000

"$220,702,000

$232,381,000

124,169,000

*108,463,000

63,843,000

Oct. 18
Oct. 18

71,051,000

112,239,000

warehouse

Bituminous

coal

BUREAU

and

lignite

Pennsylvania

anthracite

Beehive

86,234,000

168,538,000
101,345,000

26,005,000

67,193,000

4,826,000

$260,750,000
183,265,000

Oct. 13

STORE

SALES

10,965,000

10,865,000

10,860,000

1,020,000

981,000

784,000

of

INDEX—FEDERAL

England

Middle

and

—

100

(COMMERCIAL

RESERVE

132,600

*139,900

.

■

•

318

339

STREET, INC.

,

7,149,458

7,160,380

7,013,950

___:

United

.

126

157

160

States

ENGINEERING

U.

COMPOSITE

Finished steel

Pig

iron

165

Scrap steel (per gross ton!

4.131c

4.131c

4.131c

3.837c

COMMERCIAL

$52.69

$52.69

$49.36

ERAL

Oct. 16

$43.00

$43.00

$43.00

$40.67

.

PRICES

Electrolytic

(E.

&

M.

J.

-

QUOTATIONS):

of

As

copper—

1989

at
Export refinery at—
Straits tin (New York) at
Lead (New York) at
Lead

(St.

Louis

(East St.

)

Oct. 17

_Oct. 17

IIIIII!

27.425c

27.425c

.-i-w^—Oct. 17'

24.200c

4

24.200c

24.200c

27.425C

=

24.425c

at

103.000c

19.000c

19.000c

Oct. 17

18.800c

18.800c

16\800c

19.500c

19.500c

17.500c

17.500c

\

103.000c

112.500c
C

17.000c

•

16.000c

Average corporate

__

'Baa

——

111.62

114.85

115.63

116.41

23

113.89

114.66

115.43

Oct. 23

109.42

109.97

110.34

104.14

105.00

107.09

107.80

108.30

110.15

110.70

111.25

115.82

23

114.08

114.46

115.43

II'IIIIIIIIIIIIIIIIIIIOct"
Group

IIIIIIIIII Oct'
I
Hoct.

115.24

U.

S.

YIELD

DAILY

of

2.63

3.15

3.12

3.08

Number

2.91

2.87

2.83

2.96

2.92

2.88

2.73

V

2.58

PLANTS

3.17

3.15

23

3.52

3.50

3.45

IN

;

3.29

3.26

3.10

Oct. 23

3.16

3.13

Oct. 23

_

,v

2.95

'

2.93

Oct. 23

_

2.91

459.0

3.10

U.

Percentage of activity

lOct.

Unfilled orders (tons) at end of period

13

90

Oct. 13

;

S.

457.3

LOT

DEALERS

AND

SPECIALISTS

EXCHANGE—SECURITIES
Odd-lot

)

sales

ODD-LOT ACCOUNT

EXCHANGE

by dealers (customers'

Number of

YORK
of

.

Dollar

Y.

Cash

222,702

237,498

88

.

94

528,885

538,949

752,556

148.9

148.9

149.5

customers'

extended

hand

on

29,815

39,121)

25,553

1,054,653

867,872

754,988

$37,739,448

$33,031,337

Oct.

Oct.

1111

31,256

Oct.

1

181

907,734

26,625

•

24,588

,

149

166

V

26,476
753,464

.

24,422

-

706,004

.(;i-

314

42,234

1,233,440

Oct.

6,453

5,046

5,840

901,281

748,418

700,164

1,221,429

$35,613,509,

$30,723,051

$28,476,518

$48,142,457

Oct.

_

by dealers—

$1,290,056

sales

1

—Oct.
t

of

borrowings

122,233
338,655

balances—

843,090

816,311

738,698

108,911,371

108,306,539

88,673,390

97,924,892

99,271,015

118,860,724

59,558

61,697

204,162

667,237

643,941

678,754

$909,944,607

$816,811,659

$889,796,085

700,651,363

683,823,556

77.00%

83.72%

—.—

bonds

of

other

on

EARNINGS

1926 = 100:
All commodities

237,170

2Y6I0OO

V

216,000

237,170

Oct.

RRS.)—

August:
revenues

operating

expenses

ratio

—

Oct.

SERIES

U.

—

S.

DEPT.

OF

222,380

396,460

222,380

,

6

399,260

,

320,350

266,030

379,880

*177.4

176.4

195.3

*193.1

188.6

177.0

189.0

185.1

180.2

163.0

Oct. 16

than

farm

and

products

lighting materials

;

_

Metals and metal products

Chemicals

*Revised.

17,000;000

96,000,000

$2,807,800

$4,651,000

$5,617,500)

$1,189,700

899,400

893,300

$275,000,000

$275,000,000

$275,000,000

$257,352,895

$256,644,152

$257,215,671

32,404

19,8654

$256,676,556

$257,235,533

673,257

675,208

714,013

$256,001,347

$256,521,520

18,287,050

18,998,652

18,478,479

17,570

17r98'i

15,870

19,542

15,262

14,571

SECURITIES

purchases
STATES

BUREAU

—

______—-

OF

EXPORTS

AND

CENSUS

Month

—

IMPORTS-

of

August

omitted):

(000's
Imports

——-—

'

,,
■"

$911,000
857,864

STATUTORY DEBT LIMITATION

U. s. GOVT.
Total

of

September 30

Total

(000's omitted):

that

amount

face

may

time—

any

gross

*

.

'

"

be outstanding
_______

.'

.

public debt-—
obligations not

:

owned

by

the

285.1

280.0

240.9

165.1

165.0

165.4

*157.1

163.2

138.9

138.6

135.4

190.9

190.9

__

andfallied products
^Includes




410,000

barrels of

,189.4

178.3

Oct. 16

223.2

*223.2

222.0

219.7

Oct. 16

^

_

;

not

and

guaranteed

subject

to

public debt obli¬
debt limitation

162.9

138.8

gations

debt

outstanding

Deduct—other

161.4

157.1

344.5

*344.5

341.0

—Oct. 16

:

—

:j.Not available,

283.0

_Oct. 16

'

public

gross

172.4

Oct. 16

.

222.8

187.9

Oct. 16

—

—

256.7

*191.2

Oct. 16

foods

—

257.2

191.6

—Oct. 16

...

257.4

Oct. 16

Meats

Building materials

55,000,000

IN DI¬

.'

168.9

Oct. 16

Foods

Lumber

122,343,180

A.—Month of September:

Net

UNITED

TRANSACTIONS

GUARANTEED

AND

S.

U.

sales

Total
177.7

Oct. 16

other

41,934,985

$256,712,949

RECT
OF

-396,460

.

Livestock

and

80,881,476

$257,336,206

MARKET

Net

at

'

Oct. 16

Grains

commodities

$126,197,664

•

.

1

$73,139,048

,263,800

railway operating income before charges
income after charges (est.)

LABOR—

'

Fuel

626,264,865
70.38%

$110,726,003

Outstanding—

Farm products

Textile

;

ROADS

I

AMERICAN

OF

1

collateral

CLASS

—

operating

Guaranteed

NEW

$1,285,016

41,079

370,710

shares

listed
listed

As

Oct.

»

by dealers—
——.1

WHOLESALE PRICES,

$1,260,404

387,670

.

1

Number of shares

£7,825,009

S.___—

U.

12,011

Oct.

purchases

£6,465,000

40,558

in

credit

free

of

42,548

sales—

Round-lot

£15,524,000

Sept.

borrowings on U. S. Govt, issues—

TREASURY

.

31,437

Sales

Other sales

f

of

balances

banks

Total

$52,921,967

Oct.

.>

All

debt

net

in

customers'

of

Member

1,182,139

$45,273,573

other

Number of shares—Total
Short sales

457

33,311

35,600

short

Round-let sales

665

customers

to

and

value

Net

Customers'
value

134,884

783

BRITAIN-

TftXCS

Customers'
Dollar

682,782

(000's omitted):
carrying margin accounts—

firms

RAILROAD

137.8

Oct.

.

—

sales

818,123

381,407

102

Oct.

"

Number of shares—Total

*492,316
*110,244

EXCHANGE—

value

Net

'

sales

549,708

426,932

—i\——

GREAT

Total

Oct.

•

other

August:

LTD.—Month

BANK,

STOCK

of

Member

COMMISSION:

„_

Customers'

44,087,312

)

purchases)—

Odd-lot purchases by dealers (customers'
sales)—
Number of orders—Customers' total sales™
■> . Customers' short sales
<

45,919,171

31—

FROM
MANU¬

of

cars

ISSUES IN

Market

231,419

215,312
-

201,011

STOCK

;

value

46,066,441

22,636,887

Sept. 31

Total

ODD-

orders—

Number of shares
•

N.

THE

ON

OF

July

coaches

of

Operating
FOR THE

at

SALES

$412,436,800

121,993

motor

Member

468.0

287,590

486,887

Oct. 19

STOCK TRANSACTIONS

*

25,716,567
$456,313,300

trucks

As

I; <2.70

INDEX —1926-36

100

331

25,663,089

(AUTOMOBILE

motor

Month

PRICE

329

*267

of

vehicles—.

(ASSOCIATION

=

REPORTER

*319

consumers—

ASSN.)—Month
of

passenger

MIDLAND

2.86

2.88

464.8

171,817
211,413

Oct. 13

DRUG

customers

FACTORY

Market

Oct. 13

Production (tons)

AVERAGE

312

omitted)

customers—month

of

NEW

ASSOCIATION:

(tons)

2,771,959

323

ultimate

to

(000's

of

NEW CAPITAL

'

-

5,467,911

RE¬

3.23

3.33

IIIIIIIII—IIII—IIIIIIIIII—Illlllllllloct!

INDEX

sales

number

Total

AND

(FEDERAL

Number
Nurhber

2.39

V

Oct. 23

3.20

PAINT

SALES

ultimate

of

Credit

OIL,

325.2

2.68

Oct. 23

f

PAPERBOARD

*333.7

(1935-

INSTITUTE:

VEHICLE

MOTOR

2.89

Oct. 23

Orders received

328.0

COMMODITIES

Number
2.64

Aa

NATIONAL

OF

$457,799,100

_

COMMODITY

$308,009

(000's omitted)-

ultimate

-

Oct. 23

Aaa

MOODY'S

$368,000

YORK—

adjustment

July

from

FACTURERS

Oct. 23

Baa

seasonal

Month

Total

corporate

Railroad Group
Public Utilities Group
Industrials Group

NEW

OF

SYSTEM)—(1935-39 Average=100)
September:
for seasonal variations

Kilowatt-hour

AVERAGES:

Government Bonds

Average

41,754

590,643

of

Revenue

Q

BOND

167,373

:

$959,539

OUTSTANDING—FED¬

STORE

EDISON ELECTRIC

119.00

.

—

Industrials Group

MOODY'S

156,701

111.25

23

327,128

.__

BRADSTREET,
INC.
100)—Month
of September

=

Month

108.88

23

368,882

376,887

304,805

114.85

103.80

544,260

i

;.

BANK

PURCHASES

SERVE

118.40

—Oct, 23

PAPER

DEPARTMENT

119.41

HIIIIIII~IIII"II—IIIIIIIIIIIIIIIIOct."

—

________

Utilities

110.88

101.39

.

110.34

——

Railroad Group
Public

98.81

23

_.

"H

A

97.98

~Oct!

—„

Aa

97.86

$1,145,715
601,455

of

____^

&

Without,

■'.^net. 23

,

455,652

EN¬

-—

September 30

Adjusted

MOODY'S BOND PRICES DAILY
AVERAGES:
U.16. Government-.Bonds

$917,158

$377,000

—

COTtON GINNING (DEPT. OF COMMERCE):
Running bales (excl. of linters) to Oct. 1

15.800c

Oct. 17

.

L03.000C

Oct. 17

I_"
I__I

at

Louis)

24.200c

76,505,151

361,161,249

'

municipal

RESERVE

—DUN

Domestic refinery

30,673,613
377,593,389

25,034,632

461,506

CONSTRUCTION

——

$52.69

CONSUMER

METAL

Zinc

and

Oct. 16

.

$408,266,993

construction

—Oct. 16

:
—

70,488,249

$437,666,400

386,762,360

NEWS-RECORD —Month

Federal

.

15,938,679

53,556,281

—-.

construction

Public

PRICES:

(per lb.)_
gross ton)

(per

74,086,205
29,289,999

11,533,904

,

;

construction

S.

State

IRON AGE

62,566,795
25,745,212

13,381,945

$411,796,992

:____

City—■_______:—__—„
New York City_______i_.

of

Private

'

Oct. 18

64,278,712
41,685,633
94,648,731

39,506,703

__

:__

York

Total

96,812,345

70,032,298
■___—.

—

GINEERING

6,502,540

34,420,897

69,442,081

Total
New

$17,850,803

111,643,528

96,322,803

.

$41,387,438

53,804,845

41,026,632

—

Pacific I

BRAD-

&

—___'

„

$397,132,000

CITIES—Month

______

Central

CIVIL

Oct. 20

INDUSTRIAL)—DUN

$384,321,000

&

!

Mountain

322

329

YI;''' I

..

DUN

—

Central

West

v

—Oct. 13

—

INC.—215

—

Central

South

147,900

137,600

,

SYS-

~

AND

23,137,000

$28,279,685

VALUATION

September (000's omitted):
FAILURES

2,268,000

26,408,000

Atlantic

Outside

ELECTRIC INSTITUTE:
Electric output (in 000 kwh.)_

11,497,000
17,532,000

5,651,000

shipped between

Atlantic

'

EDISON

13,199,000

September:

New

11,573,000
1,073,000

Oct. 13

Oct. 13

TEM—1935-39 AVERAGE

;

;

PERMIT

BRADSTREET,

72,659,000

East

(tons)

(tons).,

78,549,000

12,099,000

countries

BUILDING

V

MINES):

(tons)

coke

DEPARTMENT
:

OF

$264,149,000

109,211,000

credits___

exchange
Based on goods stored

South

S.

$217,753,000

16,504,000

i

;

shipments

77,485,000

52,682,000

18,369,000

(U.

$210,083,000
103,662,000

OUT¬
BANK

September 30:

'Total—-

municipal

OUTPUT

201,514,000
8,481,000

Dollar

727,715

Oct. 18

Federal

COAL

15,260,000

export

RESERVE

of

YORK—As

Domestic

888,889

Oct. 18

construction
and

210,844,000

,

NEWS-

construction

construction

State

;

9,900,000

3,338,000

OF

NEW

and

ACCEPTANCES

STANDING—FEDERAL

RECORD:
S.

9,385,000

$374,563,000

DOLLAR

foreign

U.

7,500,000

-

_

28.555.000

670,779

14,985,000
17,000
15,076,000

12,281,000

consumption domestic
(bbls,)
Increase—all stocks (bbls.)__

80.959.001

709,524

16,889,000

L,

Indicated

32,945,000

694,738

12,000

218,888,000

(bbls.):

92,528,000

850,812

170,017,000

15,920,000

10,214,000

imports

33,704,000

858,750

185,019.000

183,898,000

16,357,000

16,940,000

98,198,000

868,683

199,830,000

190,362,000
10,000

33,632,000

Oct. 13
'

'

ENGINEERING

Ago

gal¬

(bbls.)—_

100,190,000

__Oct. 13

42

(bbls.)

output

output

Domestic

Revenue freight received from connections (number
of cars)

Total

Year

Month

30,702,000

gasoline

Exports

ASSOCIATION OF AMERICAN RAILROADS:
Revenue freight loaded (number of cars)

CIVIL

Previous

206,729,000
oil

crude

13

I_Oct.

of

output (bbls.)
oil imports (bbls.)

Crude

2,366,000

114,318,000

(bbls.

Oct. 13

•

Distillate fuel

2,656,000

8,799,000

production

Benzol

5,851,75C

Oct. 13

;

Gasoline output (bbls.)

Kerosene

of that date:

INSTITUTE—Month

each)

Natural

Oct. 13

stills—daily

are as

Month

Ago

102.1

either for the

are

Latest

Domestic

—

of quotations,

cases

Year

INSTITUTE:

output

in

or,

of July:

(net tons)

condensate

production and other figures for the

cover

Dates shown in first column

lons

AMERICAN

Crude

month available.

or

.

ingots and castings

Crude

week

INSTITUTE:

(percent

following statistical tabulations

latest week

37

141.2

140.9

140.4

foreign crude

runs.

,

t

132.4

Balance
able
ZINC

face

under

QXIDE

of 'July:
Production

of obligations,
authority

amount

above

(BUREAU
(short

OF

issu¬

><—Month

',.1 I

tons)—J2_—

—

Shipments (short tons.hl—_'u;c—-u——_
Stocks at end of month (short tons)
—

•■"Revised

figure.

16,618
15,084

16,796

1

38

The Commercial and Financial Chronicle

(1582)

■

Mass.
Oct. 18 (letter of notification) 6,200 shares of common
stock (par $2). Price—At market (about $16 per share).
Underwriter—None. Proceeds—To F. William Harder of
New York.

Street, Springfield, Mass.

Office—Main

American Cladmetals Co., Carnegie, Pa. (10/29)
Oct. 18 (letter of notification) 40,000 shares of common

Underwriters
Graham, Ross &
Co., Inc., New York. Proceeds—For working capital.
Arcum Pharmaceutical Corp., Washington, D. C.
Oct. 16 (letter of notification) 100 shares of 7% cumula¬
tive preferred stock.
Price—At par ($100 per share).

stock

Price—$2.12% per share.

(par $1).

—Graham

Co., Pittsburgh, Pa., and

&

Proceeds—For clinical research for

Underwriter—None.

medicinal and other such products.
sin Ave.,

Office—1204 Wiscon¬

.

Badger Telephone Co., Inc., Webster, Wis.*®
15 (letter of notification)
390 shares of common
stock.
Price—At par ($25 per share).
Underwriter—
Oct.

Proceeds—For

lines

new

to

and

install

new

equipment.
Blakeslee Forging Co., Plantsville, Conn.
Oct. 15 (letter of notification) 12,000 shares of 5% cumu¬
lative

preferred stock
Price—At par ($25 per share).
Underwriter—None.
Proceeds—For working capital and
plant improvements.
Buhner Fertilizer

Oct. 49
lative
of

convertible
share

($100

per

for

preferred
each

share).

two

stock

(convertible at rate
shares). Price—At

common

Underwriter—City Securities Corp.,

Indianapolis, Ind.

Proceeds—To repay bank loan and
for working capital. Office—First National Bank Bldg.,
Seymour, Ind.
Canadian

Atlantic Oil

Co., Ltd. (11/14)
Oct. 19 filed 1,350,000 shares of common stock (par $2—
Canadian), of which 700,000 shares are for the account
of the company and 650,000 shares for Pacific Petroleums
Ltd. of Calgary, Alberta, Canada.
Price—To be supplied
by amendment.
Underwriters—In United States: Reyn¬
olds & Co. and
date

Bear, Stearns & Co.

Proceeds—To liqui¬

Beane, Washington, D. C. Proceeds—To Doran S. Weinstein, the selling stockholder.
Office—36th and M Sts.,
Washington 7, D. C.
Consolidated

Tungsten

Mines,

Arizona
Oct. 15

Inc.,

(letter of notification) 10,000 shares of common
par ($10 per share).
Underwriter—

None.

Proceeds—For

15 So.

equipment for mines.
First Ave., Phoenix, Ariz.

Office—

Dobeckmun Co., Cleveland, O.
Oct. 24 filed 90,000 shares of common stock
(par $1).
Price—To be supplied by amendment.
Underwriter—

Blyth & Co., Inc., New York and Cleveland.

Proceeds—

To repay loans and for general
corporate purposes.

Fedders-Quigan Corp., L. I., N. Y.

Oct. 19 filed 62,041 shares of 5% cumulative preferred
stock, series A (par $50—convertible into common stock

prior to Nov. 1, 1961) to be offered for subscription by
common

stockholders

of

record

preferred share for each 20

Nov.

8

at

rate

common shares held.

of

Price—

supplied by amendment.
Underwriter—Allen &
Co., New York.
Proceeds—To retire short-term bank

Oct.

18

filed

Nov. 1, 1981.

$10,000,000 of first mortgage bonds,

Co.

Inc.; Kuhn, Loeb & CO. &nd A. C. Allyn & Co. Inc.
(jointly); Stone & Webster Securities Corp.; Merrill
Lynch, Pierce, Fenner & Beane and White, Weld & Co.
(jointly); Salomon Bros. & Hutzler and Union Securities
COrp. (jointly); Lehman Brothers; Carl M. Loeb, Rhoades
& Co. and Lee Higginson
Corp. (jointly). Proceeds—To

Pillsbury Mills, Inc., Minneapolis, Minn.
18 (letter of notification) 3,000 shares of common
(par $25) to be offered to employees under a pay¬
roll deduction plan.
Price—At market (approximately
$38 ner share). Underwriter—None.

products.

Philadelphia

San Francisco

Private fVtres




to

all

offices

Cleveland

r

*

Preferred Pressroom

Oct.

Real

Box 1588, Las

Address—Highway 91 at Vegas Park Way,
Vegas, Nev.

Lockheed

Aircraft

Underwriter—None.

(par $1).

Proceeds—For

'

Fresh Milk,

Inc., Beverly Hills, Calif.

*

'

-

'

i

25,000 shares of 6% cu¬
mulative preferred stock (par $10) and 40,000 shares of ....
common stock
(par $1). Price—At par. Underwriter— :
None. Proceeds—For plant construction and equipment.
Office—424 South Beverly Drive, Beverly Hills, Calif.
Oct.

(letter of

stockholder.

market.

investment.

(no par).

None.

Fund, Inc., Boston, Mass.
200,000 shares of capital stock

filed

23

Price—At

Vegas Thoroughbred Racing Association
notification) 7,500 shares of common
Price — $5 per share.
Underwriter —
Proceeds—To Frances Adkins Smoot, the selling

8

stock

Office—90 Jenness Street, Lynn, Mass.

Puritan

Proceeds—For investment.

Oct.

Proceeds—For research and development of new

None.

Keystone Custodian Funds,-Inc., Boston, Mass.
Oct. 22 filed 250,000 shares of series B-3; 450,000 shares
of series B-4; 1,915,000 shares of series K-l; 25,000 shares
of series S-l; and 100,000 shares of series S-4.
Price—
At the market.
Underwriter—Keystone Co. of Boston.

(letter of notification)

18

Seattle Steam Corp.,
Oct.

12

stock.

Corp.

Seattle, Wash.

(letter of notification) 3,000 shares of class B
Price—At par ($100 per share).
Underwriter—
Proceeds — To pay part of purchase price of

Oct. 17 filed 27,000 shares of capital stock (par $1), issu¬
able upon exercise of certain options granted to a selected

None.

officers and employees of company and its sub¬
sidiaries, together with 19,370 shares previously regis¬
tered and issuable upon exercise of options heretofore
granted to officers and employees.
Price — $19.35 per

Office—1411 Fourth Ave., Seattle, Wash.

Seattle steam

group of

Underwriter—None.

share.

:

of

Proceeds—For general cor¬

Oct.

19

stock

Gas

filed

(which

Co.,

Lowell,

Mass.

heating properties and for working capital. '

Sherwood & Roberts,

Inc., Walla Waila, Wash.

(letter of notification) $300,000 of notes in units

Oct. 12

$100

Price—At

thereof.

and multiples

writer—None.

porate purposes.

par.

Proceeds—For working capital.

Under¬
Business

—Mortgage loan and finance business. Office—First Na¬
tional Bank Building, Walla Walla, Wash.

(11/8)

30,000 shares of 6% cumulative preferred
had been offered to holders of the out¬

Sicks'

Seattle

Brewing & Malting Co.,

Seattle,

standing 12,000 shares of preferred stock at rate of 2%
shares for each share held by them with rights expiring
Oct. 5, 1951): none subscribed for.
Price—At par ($25
per share). Underwriter—To be disclosed by amendment.
Proceeds—To retire outstanding preferred stock and to

Washington
Oct. 12 (letter of notification) 70,000 shares of common
stock (par $1) to be offered in exchange for 44,125 shares
of preferred and
183,421 shares of common stock of
Sicks' Brewing Co. (Ore.) at rate of one share of Sicks*
Seattle stock for each three shares of Sicks' (Ore.) stock.

reduce construction notes.

Underwriter—None.

McDonough Foundry & Machine Co.,
18

(letter of notification)

debentures
at rate

stock,

to

of

be

issued

under

$10 of debentures for each $10

stock and

None.

10%

for cash.

share

par

of

Underwriter—

Standard Oil Co.

Proceeds—To reduce mortgage debt.

cents

Oct.
to

(R. D.)

per

Oct.

19

(letter

of

16,000

Underwriter—Graham

Proceeds—For

installation

and for
nue,

working capital.
Pittsburgh 6, Pa.

Murmax

of

on or

&

new

Co.,

($10

v

.

(par $100)

and 250 shares of

common

Underwriters-^-To

be

Royalty Corp., Tulsa, Okla.

(letter of notification)

(par 70

cents).

i Toklan Royalty Corp., Tulsa, Okla.
11 (letter of notification) 2o.OOO shares of common

Stock

stock

<

Oct.

*■

common

'

10,000 shares of common
Price—At market (estimated a$
$6.75 per share)
-Underwriter—None.
Proceeds—To
Curtis
F.
Bryan, Presicent, the selling stockholder.
Office—635-644 Kennedy Building, Tulsa, Okla.
:

Under¬
Proceeds—To drill five wild cat oil wells

Wyoming.\

10

stock

Drilling Co., Inc., Pocatello, Ida.

writer—None.

:

Toklan

Oct.

Office^-6504 Frankstown Ave¬

Oct. 15 (letter Of notification) 1,000,000 shares of
stock (par 10 cents}.
Price—25 cents per'share.

in

Pa.
systems

Price—To be supplied by 5

Sterling, Inc., New York
Oct. 22 (letter of notification) 10,000 shares of commoti
stock (par $1).- Price—At market (approximately $4.50
per share). Underwriter—Merrill Lynch, Pierce, Fenner
& Beane, Chicago, 111.
Proceeds—To David S. Berry,
Vice-President, who is the selling stockholder.

per

Pittsburgh,

TV antenna

share for each 10 shares

one

capital.

before Jan. 1, 1962
par

Nov. 7 at rate of

Underwriter—F. S. Moseley & Co., Boston*
Proceeds—For capital expenditures and working

Mass.

shares of 5%
Convertible into

Price—At

364,727 shares of common stock (par $10)
be offered for subscription by common stockholders *

amendment.

Co., Inc., Pittsburgh, Pa.
notification)

(Ohio) -(11/7)

filed

held; rights to expire Nov. 21.

(10/29)
cumulative convertible preferred stock.

18

of record

share.
Underwriter—Louis
Payne, Spokane, Wash.
Proceeds—To explore and de.velop mining claims.
Offices — 507 Bank St., Wallace,
Idaho, and 612 Chronicle Bldg., Spokane, Wash.
Morrow

Office—80 Pliny

Street, Hartford, Conn.

Mines Management, Inc., Wallace, Ida.
>
Oct. 17 (letter of notification) 40,000 shares of common
Price—60

Proceeds—For working capital.

None.

will be issued for

Price—At par.

-

Hartford, Conn.
Oct. 19 (letter of notification) 53,750 shares of common
stock (no par), to be offered for subscription by com¬
mon stockholders.
Price—$5 per share. Vnderwriter—

$100,000 of 6% 15-year
plan of recapitalization

It is estimated that about 90%

v

<

Silex Co.,

McDonOugh, Ga.
Oct.

1981.

Chicago

-

Oct.

(par 70 cents).
Price—$4.50 per share. « Under¬
Proceeds—To purchase for investment

writer—None.

450,000 shares of capital stock of Palmer Stend el Oil Co.
Kennedy Building, Tulsa, Okla.
n

Off ice—635-644

(no

equipment of the Home Office
Building. Tulsa, Okla.

determined

by competitive
bidding. Probable bidders: Halsey, Stuart & Co. vine.;
Morgan Stanley & Co.; Lehman Brothers and Union Se¬
curities Corp. (jointly); White, Weld & Co.
Proceeds—
To repay bank loans and for new construction.
Bids—
Expected to be received on Nov. 20.
Pacific Telephone & Telegraph Co.
Oct. 19 filed 633,274 shares of common stock to be offered
for subscription by common and preferred stockholders

,

Tulsa* Okla.
i '
Oct. 18 (letter of notification) $300,000 of second mort¬
gage bonds on real estate in Tulsa {in denominations #
of $1,000, $500 and $250 each).
Price—At par.
Underwriter—None.. Proceeds-^-To pay for construction and
Tulsa Chamber of Commerce,

par) to be offered in units of one share of each. Price
—$1,000 per unit.
Underwriter—None.
Proceeds—For
working capital. Office—207-208 Times Building, Port¬
land 4, Ore.
.
Pacific Telephone & Telegraph Co. (11/20)
Oct. 19 filed $30,000,000 30-year debentures due Nov. 15,

"

Underwriter—

Co., New York; and Bell & Farrell, Inc., Madison, Wis.
general corporate-Jpurposes.

stock

Pittsburgh

share.

stock

National»Credit Card, Inc., Portland, Ore.

Boston

per

ganizational expenses for formation of new company to
manufacture, process and fabricate metal products. Office *
—7662 Hollywood Blvd., Los Angeles 46, Calif.

Oct. 19 (letter of notification) 250 shares of 6% cumula¬
tive preferred stock (par $1,000), 250 shares of; common

New York

Nov. 21.

Price—$30

on

Proceeds—For working capital.

(Robert R.), Los Angeles, Calif.
Oct. 16 (letter of notification) 15,000 shares of common
stock (par $10). Underwriter—None. Proceeds—For or¬

Proceeds—For

share).

dub

owns

Phillips

(letter of notification)

stock, share for share,
(redeemable at $12 per share).

Underwriters—To be determined by com¬
petitive bidding.
Probable bidders: Halsey, Stuart &

Corp.

(Transamerica

100,000 shares outstanding); rights wilj

Products, Inc., Lynn, Mass.
Oct. 19 (letter of notification) 500 shares of common
stock (par $10).
Price—$40 per share. Underwriter—

18

common

loans and for general corporate purposes.
Gulf States Utilities Co. (11/19)

(11/1)

Mfg. Co., Fort Atkinson, Wis.
12,900 shares of common
stock (par $5). Price—$23.25 per share. Underwriters—
Loewi & Co., Milwaukee, Wis.; Shearson, Hammill &

one

To be

held.

shares

out of

None.

James

Oct.

stock.

(11/8)

Co., N. Y.

Insurance

expire

Airport Way, Seattle, Wash.

Phoenix,

Price—At

v

$10) to be offered for subscription by stock¬
Oct. 31 at rate of one rtew share for>

two

91,674%

Inc., Seattle, Wash.
10,000 shares of common
stock
(no par).
Price—$5 per share.
Underwriter—
None.
Proceeds — For working capital.
Office — 4617

\

stock.

each

(letter of notification.)

Lowell

N. W.,

Price—

holders of record

Trenton, N. Y.
Oct. 22
(letter of notification) 30,000 shares of 5%
cumulative convertible preferred stock. Price—At par
($10 per share).
Underwriter—None.
Proceeds—For
redemption of outstanding preferred stock ($41,900) and
working capital (a maximum of $258,100).

outstanding bank loan.

Capital Transit Co., Washington, D. C.
Oct. 18 (letter of notification) 300 shares of capital stock
(par $100).
Price — At market (estimated at $54 per
share). Underwriter—Merrill Lynch, Pierce, Fenner &

share of common stock for each nine

(letter of notification) 50,000 shares of common k

stock (par

Homasote Co.,

12

WfcEK

ADDITIONS

and/or preferred stock held.

Paramount Fire
Oct. 23

Waukesha, Wis.
Oct. 15 (letter of notification) 9,190 shares of common
stock (par $3).
Price—At market (approximately $10.50
per share). Underwriters—Northern Trust Co., Chicago,
111., and The Marshall Co., Milwaukee, Wis. Proceeds—
To E. G. Bach, Executor of the Estate of I. Hadcock.

Oct.

one

common

INDICATES

At par ($100 per share).
Underwriter—None. Proceeds
—To reduce bank loans ahd for plant improvements.

Hein-Werner Corp.,

Las

Inc., Seymour, Ind.

(letter of notification) 3,000 shares of 5% cumu¬

one

par

Co.,

shares of

Invalift,

N. W., Washington, D. C.

Augusta Chemical Co., Augusta, Ga.
Oct. 19 (letter of notification) 100,000 shares of common
stock.
Price—At par
($1 per share).
Underwriter—
Graham, Ross & Co., Inc., New York. Proceeds—For
working capital. Office—Glass Factory Avenue, Augusta,
Georgia.

None.

in the ratio of

to provide the company
forward its current construction pro¬
gram to the Spring of 1952, at which time company .ex¬
pects to undertake additional financing. Bids—Expected
to be opened at noon (EST) on Nov. 19.

1951

Thursday, October 25,
1

Registration

with funds to carry

American Bosch Corp., Springfield,

.

•

off short-term loans and

pay

Registrations and Filings

.

ic REVISIONS THIS

Securities Now in
New

.

y

.

Building. * Office—Tulsa
.

,

Viking Plywood & Lumber Corp., Seattle, Wash.
Oct. 23 tiled 22,500 shares of common stock (no par} to
be offered to employee-stockholders in minimum units
of 125 shares per unit.
Price—$20 per share.
Underwriter—None.
Proceeds—To purchase 50% of capital
stock of Snellstrom Lumber Co.
Vulcan Iron

Oct. 17 (letter

Works, Wilkes-Barre, Pa.

*

of notification) not to exceed 17,000 shares

-

Volume 174

Number 5058

.

.

The Commercial and Financial Chronicle

.

(1583)
of

stock

(par 50 cents). Price—At the market
$2 to
per share).
Underwriter—
None, but Eaton & Co., New York, will handle sales on
common

Gearhart, Kinnard & Otis, Inc., New York. Proceeds—

(approximately

the

over-the-counter

market.

Proceeds—To

John

For

NEW ISSUE CALENDAR

A.

Crown

October

Previous Registrations and

Filings

Common

^Preference

_

Common
Preferred

__

Sharon Steel Corp—___.
Utah Power & Light

to the

public. Price—To employees, $3.08 per share ana
to public $3.50 per share.
Underwriters—Stoetzer, Faulk¬
ner
& Co. and Wm. C. Roney &
Co., both of Detroit,
Mich.
Proceeds—To Estate of Roy C. Weatherwax, the
selling stockholder.
';
V

Common

__

Co.,

noon

.(EST)__

Bonds

October

Commonwealth

30,

Edison

Goodall-Sanford, Inc.

Air Reduction Co., Inc., N. Y. (11/2)
10 filed 248,805 shares of cumulative

Ohio Power

Oct.

preferred
stock, 1951 series (par $100) to be offered for subscrip¬
tion by common stockholders of record Nov. 2 at rate of
one preferred
share for each 11 common shares held;
rights to expire about Nov. 19.
Price—To be supplied
by amendment.
Underwriters—Morgan Stanley & Co.

1951
....Preferred

West Texas Utilities

of

preferred

stock

(par $100)

stock from

common

and/or

Allegheny Ludlum
Southwestern
'

stockholders of record Oct.
preferred share for each 20 shares

31

at

of

common

York.

rate

of

1951

-

Corp.____T.

States Telephone

Paramount Fire

Preferred

Co.___„_Common

1,

;•

/

•' ;

'

1951

Ry

___Equip. Trust Ctfs.

Insurance Co

Ritchie Associates

one

Finance

Common

Corp

November 2,
Air Reduction

Debentures

1951

Co., Inc.—

Rio

Grande

Preferred

7,

1951

Western

>
Bonds

(Ohio)

Common

November

8,

Lowell

Gas

Co.

to

general funds.

.

Parker Penn

$25), being offered

in

Domestic

Detroit Edison

shares; the offer to expire'
on Oct. 25.
Dealer-Managers
Kidder, Peabody & Co..
New York, and Alex. Brown &
Sons, Baltimore, Md
Bell & Gossett

stocky (par
$26.25

Co., Morton Grove, III.

(letter of notification)

$5).

Metals

1,000 shares of

common

Silver

Price — At market (approximately
Underwriter—Ames, Emerich & Co.,

share).
Inc., Chicago, 111.
per

Proceeds—To

Clarence

E.

Bonds

(EST)

Bonds

Equip. Trust Ctfs.

November 15,
&

Gulf States Utilties

Common

19,

interests

noon

Co.,

(EST)

November 20,
Pacific

Bonds

New York Central

21,

Central

Illinois

RR

Debentures

Texas &

Equip. Trust Ctfs.

Pacific

6,

1951

Bottling Co. of St. Louis

Sept. 26 (letter of ^notification)

Ry

common

(approximately $30

share).

Underwriter—G. H. Walker & Co. and Wm..
F. Dowdall & Co., both of St.
Louis, Mo. Proceeds—To
Willard Cox, the
selling stockholder. Office—2950 No.
Market St., St. Louis, Mo.
per

Commonwealth Edison Co.,
Chicago, III.
Oct. 10 filed 1,716,500 shares of cumulative

(10/30)

convertible

preferred stock (par $25) to be offered first for
subscrip¬
tion
by common stockholders of record Oct. 30 on
basis

of

shares
To

be

one

share

of

preferred for each eight common
to expire on Nov.' 14.
Price

held; rights
supplied by amendment.

—

Underwriters—Glore,
Corp., New York.

Forgan & Co. and The First Boston
Proceeds—For

new

construction and to repay bank loans.




three

shares

Sub¬

subscribed

working capital.

&

Beane

and

G.

H.

Walker

&

bank loans and

Co., New York.

commercial paper.

share). Underwriter—Dunne & Co., New York. Pro¬
To J. D.

—

Cleland, President, the selling stock¬

holder.

10

Power &

filed

Light Co.

(11/14)

$10,000,000

of first mortgage bonds due
Underwriter—To be determined by com¬

1981.

petitive

bidding.
Probable bidders: Halsey, Stuart &
Inc.; Carl M. Loeb, Rhoades & Co. and Bear, Stearns
& Co. (jointly); The First Boston Corp.; Harriman Rip¬
ley & Co., Inc.; Shields & Co.; White, Weld & Co.; Leh¬
Brothers.

man

Proceeds

—

For

new

construction

equipment.
on

Bids—Expected to be received
Nov. 14.

and

at 12 noon

Sept. 28 filed $5,000,000
bentures

due

Oct.

1,

10-year 3^2% sinking fund de¬
1961. Price — To be supplied by
—

*

Fuse

common shares held.^ Price—At par ($5 per
Underwriter—None.
Proceeds—For expansion

/;>'/'•

December

10,

working capital.

share

new

of

preferred stock for each share held and

share of class A common stock for each seven com¬
shares

oversubscription privilege.
Price—Of class A com¬
share and of preferred, $100 per share.
with

held,

Power Co., Jackson, Mich.
Sept. 20 filed 561,517 shares of common stock (no par),
being offered for subscription by common stockholders

Underwriter—None.

of record Oct. 17 at rate of

in

on

be offered employees of
Michigan Gas Storage Co.

bidding

to

was

Lehman

Unsubscribed

shares

and its subsidiary,
Price—$32 per share.
Un¬

company

awarded

Brothers.

additions and improvements.

it Continental Can Co.,

share for each 10 shares

Nov. 2.

to

on

Oct. 17 at competitive

Proceeds—For property
Statement effective Oct. 9.

Inc.

rate

of

one

common

share

for

stockholders of record
each

30

shares

of

Oct.

common

24

at

stock

held; rights to expire on Nov. 7. Price—$102 per share.
Underwriters
Goldman, Sachs & Co. and Lehman
Brothers, New York.
Proceeds—For plant and equip¬
ment replacements, and working capital.
—

Continental

Car-Nar-Var Corp., Brazil, Ind.
(letter of notification) 150,000 shares of com¬
(voting) stock (par $1). Price—$2 per share. Under¬

March 5
mon

writers—Sills,

Fairman

&

Harris,

Inc.,

Chicago,

and

an

Rights will expire on Nov. 15.
mon,

$13.50

per

Whitehead

capital.

Proceeds—To increase stock interest

Brothers

Rubber

Co.

and

for

working

Office-Whitehead Road, Trenton 4, N. J.

it Goodall-Sanford, Inc. (10/30)
Oct. 5 filed 80,000 shares of preference stock (par $50)
—convertible up to and including Nov. 1, 1961.
Price
To be supplied by amendment.
Underwriters — Union
Securities Corp. and W. C. Langley & Co., New York.
Proceeds—From sale of

Oct. 5 filed 104,533 shares of $4.25 cumulative convertible
second preferred stock (no par) being offered for sub¬

scription by

Offering—Date not set.

Rubber

holders

Bonds

mon

held; rights to expire

V

Montreal, Canada

preferred stock (par $100) being offered to stock¬
of,record Oct. 15 on the following basis: One

tive

1951

one

one

Ltd.,

Mines

Co., Trenton, N. J.
Oct. 4 (letter of notification) 13,500 shares of class A
common stock (par $5)
and 1,000 shares of 5% cumula¬

-Equip. Trust Ctfs.

Virginia Electric & Power Co

derwriter—Issue

2,500 shares of

stock (par SI). Price—At the market

each

shares for each

stock held.

* Family Finance Corp. (10/29-30)
Oct. 9 filed 80,000 shares of cumulative convertible pref¬
erence stock, series B (par $50).:
Price—To be supplied
by amendment.
Underwriters—Merrill Lynch, Pierce,

Goodall

Office—2305 East Belt St., San Diego 2,

construction.

two

April 9 filed 750,000 shares of common stock. Price—
At par ($1 per share).
Underwriter—George F. Breen,
.New York. Proceeds—For drilling expenses, repayment

Bonds

it Consumers

new

for

of

common

a warrant to purchase one additional share at $1.25
share—Canadian—within 18 months. Price—55 cents
share—Canadian.
Underwriter—None.
Proceeds—

of advances and

Packing Corp., San Diego, Calif.
(letter of notification) $300,000 of 6% convertible
sinking fund debentures due Oct. 1, 1966. Underwriter—
Wahler, White & Co., Kansas City, Mo. Proceeds—For
general corporate purposes.
Price—At 100%
and ac¬

Coca-Cola

receive

basis

on

value

par

program.

1951

Light Co

December

California Tuna

for

will

share).

Oct. 4

Calif.

14.

for each 12

-Equip. Trust Ctfs.

Erie RR.

Underwriter—Kidder,;■ Peabody
&
Co.,
New
York.
Proceeds—For additions and improvements to
plant and
equipment. Offering date postponed;

it California Water & Telephone Co. (11/1)
Oct. 15 filed 50,000 shares of common stock
(par $25).
Price—To be supplied by amendment.
Underwriter—
Blyth & Co., Inc. Proceeds—To pay off bank loans and

Bids—

Noc.

Corp., South River, N. J.
Oct. 15 (letter of notification) 50,000 shares of 5%%
convertible preferred stock to be offered for subscription

1951

November 27,

5 filed 300,000 shares of convertible
preference
(par $100). Price—To be supplied by amendment.

interest.

for,

stockholders

Golconda

Burlington Mills Corp.

crued

on

by common stockholders at rate of one preferred share
November

oil property.

March

(EST)

a.m.

poses.

1951

Telephone & Telegraph Co

(1952

fund) in amounts of $15,000 or more
Underwriter—None. Proceeds—To acquire and develop

stock

to

shares of $1

General

Oklahoma City, Okla.,
and Davidson,
Hartz, Hyde & Dewey, Inc.,
Madison, N. J.
Sept. 27 filed $2,000,000 of contributions in oil property

11

Underwriter
Paine, Webber, Jackson &
Curtis, New York. Proceeds — To prepay senior notes
and other borrowings and for general corporate pur¬

Blackwood & Nichols Co.,

;

offered

amendment.

1951

Pullum.

Vice-President, who is the selling stockholder.

Common

Mining Co
November

at

opened

it General Acceptance Corp.

1951

Chemicals Corp

Buckie

be

filed

(EST)

Statement effective Sept. 5.
;

Proceeds—For construction program.

to

Co.

Common

(EST)

a.m.

Pittsburgh & Lake Erie RR

—

Sept. 27

Co., 11

„

Corp., Ltd., Toronto, Canada
4,312,404 shares of common stock (par 25
cents—Canadian), of which 3,234,303 shares are to be
9

Nov. 1,

Preferred

Florida Power & Light Co., noon

common

Of¬

Eureka

Oct.

Oct.

>

Canadian Atlantic Oil Co., Ltd-

exchange for common stock of Domestic Finance'
Corp., Chicago, 111. on basis of one American share for
each five

1951

(EST)

a.m.

Under¬

Inc., Dallas, Tex.
Oct. 11 filed 187,500 shares of common stock (par 500).
price—To be supplied by amendment.
UnderwriterReynolds & Co., New York. Proceeds—For general cor¬
porate purposes. Offering—Expected today.

ceeds

Associated Telephone &
Telegraph Co.
11

common

it Dresser Industries,

per

1951

14,

New

operating expenses.
Fidelity Building, Oklahoma City, Okla.

Florida

November

Inc.,

Sept. 26

Co.__—__________________Common

_

American Investment Co. of Illinois
Aug. 16 filed 167,105 shares of $1.25 cumulative convert¬
ible preference stock, series A
(par

Co.,

Fidelity Electric Co., Inc., Lancaster, Pa.
(letter of notification) 2,000 shares of common
stock (par $1). Price—At market (approximately $3.50

Preferred

November 13,

&

Proceeds—For

Proceeds—To reduce

Preferred

Seaboard Air Line RR., noon
(EST)__Eqp. Tr. Ctfs.

through

$200,000 of 5% subordi¬
Price—At princi¬

1, 1982.

17 filed

Fenner

1951

.

a
stock purchase plan.
Price—To be not greater thar
the market price on the date of the
offering, or no less
than 85% of such price.
Underwriter—None. Proceeds

March

Co., Detroit, Mich. (11/14)
$40,000,000 of general and refunding mort¬
gage bonds, series K, due Nov. 25, 1976.
Underwriter—
To be determined by competitive
bidding. Probable bid¬
ders:
Halsey, Stuart & Co. Inc.; Collin & Burr, Inc. and
Spencer, Trask & Co. (jointly); Morgan Stanley & Co.;
The First Boston Corp.;
Dillon, Read & Co. Inc.; Kuhn,
Oct.

For

RR

Fedders-Quigan Corp.

working capital

Co., Inc., New York

Underwriter—Hodson

writer—None.

per

Rockland Light & Power
Co., 11 a.m. (EST)-Bonds

Standard Oil Co.

purposes.

Deardorf Oil Corp., Oklahoma City, Okla.
Sept. 24 (letter of notification) 175,000 shares of
stock (par 10 cents). Price—40 cents
per share.

per

Denver &

corporate

York. Proceeds—To reduce debt and for
expansion, etc.
Office—165 Broadway, New York 6, N. Y.

scribers

Proceeds—For

American Brake Shoe Co.
June 29 filed 50,000 shares of common
stock (no par) tc
be offered to certain officers and
key employees

be added

amount.

three

stock

share for each 10 shares
held;
rights to expire on Nov. 8. Price —$65
(Canadian) per
share. Dealer-Managers — The
First Boston Corp. and
A. E. Ames &
Co., Ltd. Proceeds
For

—To

pal

Finance

Expected

California Water & Telephone
Co.——-Common

one new

to be available for
expansion program.

(CST)__Bonds

.

Northern Pacific

Sept. 21 filed 372,205 shares of capital stock
(no par)
being offered for subscription by stockholders of record

.

Steel

November

—

1 -Preferred
a.m.

,

Aluminium, Ltd., Montreal, Canada

.

'

31,

November

held; rights to expire Nov. 14. Price—To be supplied
by amendment.
Underwriters—The First Boston Corp.
and Smith, Barney &
Co., New
expansion of plant facilities.

'

.

(10/31)

common

Oct. 19 at rate of

•"

increasing

Oct. 11 filed 81,347 shares of cumulative
convertible preferred stock (no par) to be offered for
subscription by

Bonds & Notes

_

Co., 1.1:30

general

(letter of notification)

Loeb & Co.

3,000,000 to 5,000,000 shs.

Allegheny Ludlum Steel Corp.

(EST)

October

Ripley & Co., both of New York. Proceeds
—For expansion program.
Meeting—Stockholders will
vote Nov. 1 on creating an authorized issue of
500,000
authorized

_________________Preference

a.m.

and

^Detroit Edison

Co

Shellmar Products Corp

and Harriman

shares

Co., 11

capital

debentures due

fice—219

,

-

10

nated

Family Finance Corp._

and 10,000 shares

company

Oct.

1951

Maracaibo Oil Exploration
Corp.____
Morrow (R. D.) Co. Inc

Industries, Inc., Jackson, Mich.
Sept. 12 (letter of notification) 14,840 shares of common
stock (par $1), of which 4,840 shares are to be offered
employees of

29,

American Cladmetals Co.__

Acme

to officers and

working

Temporarily deferred.

Roberts, Chairman, who is the selling stockholder.

.

39

be

received

from

stock, together with $3,000,000 to

private placement of 15-year deben¬

tures, will be used to provide additional working capital
required in connection with increased volume of busi¬
ness,

and to reduce short-term loans.

Grand

Union Co.,

New York

_

Aug. 7 filed 64,000 shares of common stock (par $10)
to be issued pursuant to an "employees' restricted stock
option plan." Price —To be supplied by amendment.
Underwriter—None.
Proceeds—For general
corporate
purposes.

Office—50 Church St., New York.
Continued

on

page

40

40

The Commercial and Financial Chronicle

(1584)

.

.

Thursday, October 25,

.

v< 'I1

shares for each ordinary share of

Continued from page 39

ft Gulf Sulphur Corp., Washington, D. C.
Oct. 12 (letter of notification) 29y,999 shares of common
stock (par 10 cents). Price—$1 per share. Underwriter
—Peter Morgan & Co., New York.
Proceeds—To pur¬
chase all outstanding stocks of Compania de Azufre Vera
Cruz, S. A., and for working capital. Office—1346 Con¬
necticut Avenue, N. W., Washington, D, C.
Offering—
Expected at

Oil Exploration Corp. (10/29)
Sept. 20 filed 49,500 shares of capital stock to be offered
to stockholders at rate of one share for each nine shares
^ Maracaibo

held

Oct.

17.

—

-

.

York.

selling stockholder. Offering—Indefinite.

C. Walker, the

Inland

Steel

of con¬

National

Oct.

Offering—

To be

poses.

company's proposed stock option plan. Price—
of current fair market value of the stock.

.

Oct. 5 filed 79,048 shares of common stock (par $15) re¬
served for conversion of 39,524 shares of 5%% con¬

Oct.

Boston Corp., New York.

record Oct.

com¬

for money expended for redemption of unconverted
,

p

*

Key Oil & Gas Co., Ltd., Calgary, Canada
Price—At
par ($1 per share).
Underwriter—None, but sales will
Nelson, promoter and a director of
of Longview, Wash.
Proceeds—To drill well,
for lease acquisitions and properties held pending devel¬
company,

i

ft Kimberly-Clark Corp.
XOct. 5; filed 102,424 shares of 4 % cumulative convertible

(par $100), to be offered in exchange

for

outstanding 4 % % cumulative preferred stock on a
share-for-share basis, plus cash payment of 37 Vz cents
.

15, with rights expiring Nov. 10.

per

retire

share).

notes

and

Underwriter—None.
for

expansion

Price—At
Proceeds—

program.

Ohio

Power Co.

Co.

Las

Vegas Thoroughbred Racing Association
Sept. 14 (letter of notification) 20,000 shares of common
stock

(no

None.

par).

Price—$5

Proceeds—To

stockholder.

share.

per

William

A.

Underwriter—

Albury,

the

selling

Address—Highway 91 at Vegas Park High¬

Las Vegas, Nev.

way,

Lawyers Title Insurance Corp., Richmond, Va.
Oct. 16 filed 60,000 shares of capital stock;
(par $5), to
be offered to stockholders at rate of

nine shares held.

writer—None.
vestment.

Price—At par

($5

one

share for each

share).

per

Under¬

Proceeds—To enlarge capital and for in¬

v-

•Xv;/:;

vx.

,•••

by competitive bidding.' Probable bidders: Blyth & Co.,
Inc., and First Boston Corp. (jointly); Kidder, Peabody
& Co.; Harriman Ripley & Co.
Inc.; Smith, Barney &
Co.; W. C. Langley & Co. and Glore, Forgan & Co.
(jointly). Proceeds—From sale of preferred stock, to¬
gether with proceeds from proposed sale of about
$25,<100,000 of first mortgage bonds in
December, 1951, will
to

iaries,

pay

$14,493,400 of bonds

off

bank

loans,

of former subsid¬

and

for

construction

program.

Long Island Lighting Co.
Oct. 3- filed 524,949 shares of

to

11

York 8,

new

construction.
on

Estabrook

(jointly);

■ *:

on

Bids—To be received up

,,

«

.

toeing offered ^or subscription by
Oct. 24, 1951, at rate of

accord

shares

seven

share.

term

Corp., New York.

loans

Loven

Oct

8

AJnn

X
South
'

borrowed

Chemical

stockholders of
share for each

Price—$13 per
Co., Inc. and The First
Proceeds—To reduce short&

for construction.
of

200,000 shares

of

capital

pnce~At Par ($1 per share). Underwriter—
Pro<Xeeds ~ For working capital. Office —244
Pine
St., Newhall, Calif.
(H. R.)

J-1-'

Export Co.,

■

<

•

Ltd.? } 3

Vancouver, B. C.

■.

»ept. 26 filed 2,281,582 shares of class B
capital stock
«^
i °h
Stewart & Welch,

Ti^ ln e*change for
on the

Ltd.




Phoenix
tional

Industries

Phoenix

Corp. (name to be changed to Na¬
Industries, Inc.) for each N. P. & L.

share held.
Price—To be supplied by amend¬
Underwriter—Reynolds & Co., New York.
Pro¬
ceeds—To pay expenses of existing business, to
pay final
common

ment.

California

(letter of notification)

MacMilfan
1

new

held; rights expire Nov. 8.

Underwriters-Blyth

Boston

common
one

(no par)

stock of Bloedel

following basis: 44.54596

instalment of purchase price on shares of
Nedick's, Inc.,
and for acquisition of other businesses.
-

Pittsburgh Plate Glass Co.
/June 27 filed 450,000 shares of common
.

to

expire

Sharon Steel

31.

Oct.

on

Price—$15.75

per

V

Ccrp.

(1Q/29)

174,137 shares of common stock (no par).
Price—To be supplied by amendment.
Underwriter—

Oct.

9

filed

The First Boston

Corp., New York.

Proceeds—For ex¬

pansion program and working capital,

ft Shellmar Products Corp. (10/30)
Oct. 9 filed 100,000 shares of cumulative preferred stock
(par $50), convertible into common stock on or before
Dec. 31, 1966.
Price—To be supplied by amendment.
Underwriter—Glore, Forgan & Co., New York. Proceeds
—To retire 43A% preferred stock and for additional cap¬
ital expenditures.
\
Silver Buckie

Mining Co., Wallace, Ida. (11/15)!
(letter of notification) ..290,000 shares of com¬
mon stock
(par 10 cents). Price—32Vz cents per share.
Underwriter—Standard Securities Corp., Spokane, Wash.,
Sept. 25

.

Phoenix; Industries Corp., N. Y. :
Oct. 12 filed 1,465,167 shares of common stock (par 100)
to be offered to holders of outstanding common stock of
National Power & Light Co. at rate of one-half share of

loans and

Underwriters—Coburn & Middlebrook, Inc., Hart¬

Middletown, Conn.

Phoenix-Campbell Corp.,

ing capital.
\

stock

common

bank

Bids—Expected to be received
7 at 11 a.m. (EST). "

ford, Conn., and Granbery, Marache & Co., New York.
Proceeds—For working capital. Office—400 E. Main St.,

160,000 shares of 5^%

.

rights

held;

''

Morris Cohon & Co., New York.
Proceeds—To acquire
an interest in so-called
"special situations" and for work¬

reduce

Proceeds—To

Co.

about Nov.

or

share.

Calif.

N. Y.
Sept. 20 filed 203,000 shares of capital stock (par $1)
and 100,000 warrants. Of the 203,000 shares, 100,000 will
be reserved against the warrants and 3,000 shares have
been purchased
by the promoters.
Price—For stock,
$10 per share; for warrants, 5 cents each. Underwriter—

&

ft Russell Manufacturing: Co., Middletown, Conn.
Oct. 4 (letter of notification) 13,321 shares of common
stock (no par) being offered to common stockholders of
record Oct. 17 at rate of one share for each 10 shares

prior preferred
Price—To be supplied by amendment.
Underwriter—A. C. Allyn & Co., Inc., Chicago, 111. Pro¬
ceeds—For construction program. Offering—Indefinitely
-

/

& Power Co.

for construction program.

(par $25).

postponed.

'

(11/7).
Sept. 21 filed $6,000,000 of first mortgage bonds, series D,
due 1981.
Underwriters—To be determined by competi¬
tive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; The First Boston Corp.; Merrill Lynch, Pierce, Fenner & Beane, Kidder, Peabody &
Co.; Union Securities
Corp. and White, Weld & Co. (jointly); Lehman Brothers
and A. C. Allyn & Co. (jointly); Stone & Webster Se¬
curities Corp.; Carl M. Loeb, Rhoades & Co. and Equit¬
able Securities Corp. (jointly); W. C. Langley & Co.;

Peabody Coal Co.
filed

16.

Rockland Light

Co., Las Vegas, Nev. /
Jan. 24 filed 200,000 shares of common stock. Price—At
Par ($1 per share). Underwriter—None. Proceeds—To
purchase machinery and equipment, to construct a mill
in Mexico and for general corporate purposes.
State¬
ment fully effective Aug. 29, 1951.
26

Frederick, Md.

effective Oct.

Office—

Sept. 14 (letter of notification) 59,000 shares of common
stock (par 10 cents). Price—50 cents per share. Under¬
writer—Gearhart, Kinnard & Otis, Inc., New York. Pro¬
ceeds—For working capital.
Office—1337 Mission St.,

itock

15-year

^ Robbins Mills, Inc., New York
Sept. 25 filed 166,864 shares of series A 4.50% cumulative
convertible preferred stock (par $50) being offered for
subscription by common stockholders of record Oct. 15 at
rate of one share of preferred stock for each five shares
of common stock held; rights to expire on Oct. 30. Price
—$50 per share. Underwriter—Dillon, Read & Co. Inc.,
New York.
Proceeds—For working capital.
Statement

N. Y.

San Francisco, Calif.
;
Pan American Milling

(letter of notification) $200,000 of 6%

Church St.,

Oct. 30 at 30 Church Street, New

Pacific Telecoin Corp., San Francisco,

•

(11/1)

debentures, dated July 1, 1951, to be issued in multiples
of $100. Underwriter—Cohu & Co., New York.
Proceeds
—To retire debts and purchase building. Office—2 East

1,700,000 shares of common stock to
Co.) to retire $14,000,000 bank

of

(EST)

a.m.

March

Oct. 3 filed 100,000 shares of cumulative
preferred stock,
aeries A (par $100).
Underwriters—To be determined

sale

loans and for

'• vXr;'•.

Long Island Lighting Co.

be used to retire

from

.

•

Finance Corp.

Ritchie Associates

Equitable Securities Corp.; Kuhn, Loeb & Co. Proceeds
sale of bonds and notes (together with $8,000,000

v

Co.,

—

American Gas & Electric

Underwriters have agreed to purchase a
maximum of 37,424 shares of 4% preferred
stock, pro¬
viding! at least 65,000 shares of 4
preferred stock
accept exchange offer. Expected to become effective
today (Oct. 25).

Insurance

Bldg., Providence 1, R. I.

—From

ferred stock.

Corp.

cumulative preferred

Providence, R. I.
Oct. 9 (letter of notification) 2,000 shares of capital stock
(par $25).
Priee—$75 per share.
Underwriter—None.
Proceeds
For working capital.
Office — Turks Head
Life

Puritan

(10/30)

& Webster Securities

Stone

and

Gas Co.
of

Offering—Postponed.

term debt.

;$500,000 annually 1957 through 1960; and $750,000 an¬
nually 1961 through 1966. X Underwriters—To be deter¬
mined by competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; Morgan Stanley & Co.; The First
Boston Corp.; Glore, Forgan & Co.; White Weld & Co.
and Union Securities Corp. (jointly); Harriman Ripley
&

11.

supplied by amendment.
& Co., Drexel & Co. and
Glore, Forgan & Co. Proceeds—For plant additions and
improvements and to reimburse treasury for expendi¬
tures made for such purposes and for retirement of long-

Sept. 28 filed $15,000,000 of first mortgage bonds due
? 1981
and $7,000,000 of serial notes to mature annually on
'Oct. 1 as follows: $250,000 annually in 1955 and 1956;

share; the offer to expire on Nov. 9. Price—To be
supplied by amendment. Underwriter—Blyth & Co., Inc.,
New York; Proceeds—To retire unexchanged 4 Vz% pre¬
per

Underwriter—

Service in gen¬
Business—To prospect for oil and gas. State¬

ft Public Service Electric &
Sept. 26 filed 249,942 shares
stock (par $100). Price—To be
Underwriters—Morgan Stanley

South Road Street, Elizabeth City, N. C.

Oct. 3 filed 500,000 shares of common stock.
be made by James H.

Telephone & Telegraph Co.

11

($100

Price—At par ($1 per share).
Proceeds—To be used by Public

1951.

Sept. 18

(letter of notification) 2,000 shares of common
stock to be offered for subscription by stockholders of
par

1,

None.

pur¬

V

Ltd., Toronto/Canada

Norfolk & Carolina

To

1

opment 'work, and for other corporate purposes.

corporate

(Canadian funds).
Underwriter—None. Proceeds—To
repay loans from Cliff Petroleum Co. and for expansion
program/ Business — To acquire, explore and develop
mining properties in Canada.

preferred stock which will be called for re¬
demption. Starts.on Oct. 24 and ends Nov. 23. Price—
To be supplied by amendment. Underwriter—The First

;

general

3J/2%

Under¬

500,000 shares of common stock (no par) to
be offered for subscription by stockholders at rate of one
share for each five shares held. Price—$2.25 per share.

vertible

preferred stock

Proceeds—For

Price—100%.

Office—79 Cliff Street, New York, N. Y.

Nickel Offsets,

ft Iowa Southern Utilities Co.

portion of 5%% preferred stock.

1971.

1,

Oct. 8 filed

working capital.

Proceeds—To reimburse

Oct.

due

notes

writers—None.

Co.

85%

Proceeds—For

Plumbing Stores Corp.

(letter of notification) $123,500 of 20-year

15

income

Aug. 27 filed 250,000 shares of capital stock (no par)
to be issuable upon exercise of stock option issuable
tinder the

Co., Inc.

Sept. 26 (letter of notification) 3,200 shares of common
stock (par $1). Price—$31.25 per share.
Underwriter—
Blyth & Co., Inc., Los Angeles, Calif. Proceeds—To Lloyd
A. Johnson, President, who is the selling stockholder.

Proceeds—To purchase

East Orange, N. J.

Ind.

Laboratories, Inc., Elkhart,

(letter of notification) 2,000 shares of common
(par $2). Price—$16.75 per share. Underwriter —
W. F. Martin, Inc., Elkhart, Ind. Proceeds—To Georgia

payable and for other corporate purposes.
Korth Arlington Avenue,
Now being made.

31, 1955 at rale of one share of Pubco Development for
each Public Service common share held of record Oct.

eral fund.

Sept. 5

Price—50 cents

(par five cents).

ft Pubco Development, Inc., Albuquerque, N. M.
Sept. 18 filed 605,978 shares of common stock being
offered for subscription by stockholders of Public Serv¬
ice Co. of New Mexico between Jan. 1, 1955 and March

ment effective Oct.

(par $2).

stock

Underwriter—Stanley, Pelz & Co., Inc., New
equipment, to repay notes
Office—545

share.

properties

new

Statement effective,

Laboratories,

National Motor Bearing

vertible class A stock

acquire

(letter of notification)

12

Miles

Office—412 W. 39th St., Kansas City,

ft Hydrocarb Corp., East Orange, N. J.
Oct. 5
(letter of notification) 599,880 shares

To

Proceeds—To develop properties and retire in¬
Office—907 Kennedy Bldg., Tulsa 3, Okla.

agent.

debtedness.

Estate of Rachel B. Miles.

'

pany

Proceeds

Prugh Petroleum Co., Tulsa, Okla.
(letter of notification) 60,000 snares of common
stock being offered for subscription by stockholders of
record Oct. 1, on basis of any number of shares not to
exceed present holdings; rights to expire Nov. 15. Price
—At par ($5 per share). Underwriter—None, but Prugh,
Combest & Land, Inc., Kansas City, Mo., will act as

Sept. 25

Inc., Elkhart, Ind.
6,000 shares of common
Price—Maximum, $18 per share; mini¬
mum, $16.50 per share.
Underwriter—Albert McGann
Securities
Co., Inc., South Bend, Ind.
Proceeds—To
Oct.

stock

Foods, Inc., Kansas City, Mo.
Aug. 1 (letter of notification) 89 shares of 6% cumula¬
tive preferred stock (par $100) and 424 shares of com¬
mon stock
(no par). Price—For preferred, at par; and
to common, at $20 per share. Underwriter — Prugh,
Combest & Land, Inc., Kansas City, Mo., will act as
dealer. Proceeds—For plant improvements and general

per

oversubscription privilege;
Price—$9 per share. Under¬

an

general corporate purposes.

Miles

Hex

Mo.

with

24,

writer— None.
and for

working capital.

corporate purposes.

Oct.

on

rights to expire Nov. 21/

Hathaway (C. F.) Co., Waterville, Me.
Oct. 2
(letter of notification) 12,000 shares of 5.8%
cumulative preferred stock (par $25), with common stock
purchase warrants attached. Price—Expected at par.
Underwriter—H. M. Payson & Co., Portland, Me. Pro¬
ceeds—For

of Bloedel.

tive Oct. 17.

time.

any

Bloedel; two-fifths of

Following
such acquisition, name of MacMillan Export will be
changed to MacMillan & Bloedel, Ltd. Statement effec¬
share for each preference share

a

and
;

Kellogg, Idaho. Proceeds — To six selling stockAddress—Box 469, Wallace, Idaho.;
5 )
•'

holders.

Southwestern Associated

Telephone Co.

V

June

15, filed 17,500 shares of $5.50 cumulative pre¬
ferred stock (no par). Price—To be supplied by amend¬
ment.
Underwriters—Paine, Webber, Jackson & Curtis
and Stone & Webster Securities Corp., both of New

York, and Rauscher, Pierce & Co., Inc., Dallas, 'Texas.
Proceeds—To retire $1,500,000 of bank * loans and the
balance

added

to

general corporate funds. Offering

'

Postponed.

—

V

f7\"

^Southwestern States Telephone Co. (10/31)
Oct. 15 filed 70,000 shares of common stock (par $1).
Price—To be supplied by amendment.
Underwriter—•
Central Republic Co., Inc., Chicago, 111.
Proceeds—For
construction program.

Specialized Products Corp.,

Birmingham, Ala.

Sept. 26 (letter of notification) 50,000 shares of common
Price—$1 per share. Underwriter—Carlson & Co.,

stock

Birmingham, Ala.

Proceeds—For operating capital and

to

advertising costs.

its

ham 9, Ala.

Office—2807 Central Ave., Birming¬
" "
'
'
'

stock (par $10)
bb. offered to certain employees of the company and
subsidiaries under a stock option plan.
Price—At
85% of the market price on the New York Stock Ex¬
change at time options are granted. Underwriter—None.
Proceeds—For working capital.

Texas

,

Southeastern

Gas

May 16 (letter of notification)
stock

to

be

offered

to

Co.,

Bellville,

Tex.

.

19,434 shares of common
stockholders through

common

Volume 174

Number 5058

.

.

The Commercial and Financial Chronicle

(1585)
transferable

warrants.,

Price—At

($5 per share).

par

Underwriter-^None.' Proceeds—For working capital.

1

Touratne

<

Apartments, Inc., Phila., Pa.
(letter of notification) 100,000 shares of

Oct. 16
stock

(par $1)

to

be

Oct. 5 at rate of five

rights expire

on

or

offered

to

common

shares for each 67 shares held;
about Nov. 7. Price—$2 per share.
Proceeds—For

working,

capital.

Street, Philadelphia 2, Pa.

United Canadian Oil Corp., Washington, D. C.
July 31 filed 1,000,000 shares of common stock (par 10
cents. • Price—$1 per share.-. Underwriter—None.
Pro¬

effective Oct..8.
U.

drilling activities.' Statement

Central

Oct. 19 it

New York
Sept. 28 filed 120,650 shares of common stock (par $1).
Price
To be supplied by amendment. Underwriters—<
Allen & Co. and Blair, Rollins & Co., Inc., both of New
York.
Proceeds—To repay $1,000,000 loan from insur¬
ance
firm and $700,000 bank borrowings, with the re¬
mainder added to working capital to be used for expan¬
sion program and other corporate purposes.
—

be

determined

by

ney

& Co. (jointly).

(EST)

noon

Proceeds—To

competitive

bank loans and

Bids—To be received up to
Statement effective Sept. 5.

opened

Osplack, the selling stockholder.
Highway, Detroit 28, Mich.
Utilities

Office—9111 Schaefer
\

'

Co.

(10/30) * :'
Sept. 24 filed $8,000,000 of first mortgage bonds, series C,
1, 1981. Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Hemphill, Noyes, Graham, Parsons & Co.
and Drexel & Co. (jointly); The First Boston Corp.; Kid¬
der, Peabody & Co.; W. C. Langley & Co.; Union Securi¬
ties Corp.; Equitable Securities Corp.; Harriman Ripley
& Co.; Kuhn, Loeb & Co. and Lehman Brothers (jointly);
Glore, Forgan & Co.; Merrill Lynch, Pierce, Fenner &
due Nov.

Beane. Proceeds—To retire bank loans and for construc¬
tion

received up to 11:30 a.m.
Oct.; 30 at 20 No. Wacker Drive, Chicago 6, 111.
Bids—To

program.

(CST)

on

be

Western Air Lines, Inc., Los Angeles, Calif.
*
Sept. 17 filed 25,000 shares of capital stock (par $1) under
option at $9.37 % per share since Dec. 10, 1946 to T. C.
Drink water,- President. Agreement provides that, upon
request of Mr. Drinkwater, the company agrees to regis¬
ter the optioned shares to the end that he may be in
a position
promptly to exercise his rights under the op¬
tion and to transfer and dispose of any of the shares ac¬
quired thereunder which he may wish to dispose of. (The
stock sold

at

$14.50 per share on Sept. 17 on the New
York Stock Exchange.) Underwriter—None. Proceeds—
For working capital. ($9.37J/2 per share).

Wilcox-Gay Corp., Charlotte, Mich.
Sept. 13 (letter of notification) 165,250 shares of common
stock (of which 82,625 shares represent stock to be issued
on exercise of
stock purchase warrants issued in con¬
nection with sale of 110,000 shares on or about Oct.
24).
Price—At par ($1 per share). Underwriter—None. Pro¬

ceeds—For working

Capital.

'

-

,

1

,

Aug. 1, 1966, with non-detachable common share
purchase warrants for the purchase of 154,000 shares of
Price—To

be

supplied

by amendment.

Underwriter—Blair, Rollins & Co., Inc., New York.
Proceeds-rTo pay off outstanding indebtedness and for
other corporate purposes.
drawn on Oct. 15.

,

was

approving

13

an

Underwriter—A.

G.

Becker

Proceeds—For expansion

&

Co.

for

public offering of about 100,000 shares of
Underwriters
Probably Blyth & Co.,
Hoffman & Goodwin and Shields & Co.
—

common

stock.

Inc., Walston,
(Del.)

'(*1/14)
by the

be received

Office

of

up

to

11

a.m.

(EST)

on

Nov.

14

Alien

Property, 120 Broadway, New
Y., for the purchase from it of 5,201 shares of
$6 cumulative first preferred stock (no par), being 17.4%
of that issue outstanding.
York 5, N.

Atlantic Coast Line RR.

Sept. 14 it

was

stated that the company may refund its

outstanding $22,388,000 first cortfsolidated mortgage 4%
bonds due July 1, 1952. Probable bidders:
Halsey, Stuart
& Co. Inc.; Morgan
Stanley & Co.; Kuhn, Loeb & Co.;
The First Boston

Corp. Offering expected

November.




some

time in

Gas

&

Co. Inc.,

New York.

Co.

on

it

(11/27)

was

that

announced

company is considering
of equipment trust certifi¬
cates, maturing semi-annually over a 10-year period, in

Nov. 27 of $5,400,000

order to finance about 80% of the cost of
acquiring new
diesel locomotives and gondola cars to cost about
$6,915,000. Probable bidders:

Halsey, Stuart & Co Inc.; Salomon
(Inc.).

Bros. & Hutzler; Harris, Hall & Co.
Granite City Steel Co.

Oct.

15,

it was announced company plans to offer to
stockholders for subscription the latter
part of
November an initial series of 100,000 shares of convert¬
ible preferred stock (par
common

Merril

authority to offer

$100). Underwriter—Probably
Lynch, Pierce, Fenner & Beane, New York. Pro¬

ceeds—From sale of stock together with proceeds from
contemplated sale to insurance companies of $25,000,000

of first mortgage
of the company,

bonds, will be added to general funds
for use in connection with company's
production expansion program.
SEC Registration
—Expected near end of this month. Meeting—Stock¬
steel

holders will vote Nov. 14

on approving authorized
issue
200,000 shares of preferred stock, issuable in series,
and on mortgaging the company's assets.

of

V

of

Hahn Aviation Products, Inc.
Aug. 24 it was announced company proposes to offer
12,500 additional common stock (par $1), in addition to
17,500 shares recently offered. Underwriter
None.

due

Proceeds

June

2

it

reported company expects to be in the
market late this year or early in 1952 with a new issue
was

approximately $70,000,000 of first mortgage bonds,
1981, of which about $65,000,000 will be sold ini¬
tially. Price—Not less than par. Underwriter—To be

—

Telephone & Telegraph

for

Sept. 11 it
class B

mill at

tion

November.
New

•

linglaw, Bolger & Co., both of Chicago, 111.
•

Oct.

23

it

announced bids will be received by the
including Nov. 7 for the purchase from it
of $5,200,000 principal amount of first mortgage 4%
series A bonds due Jan. 1, 1993. The agencies of the RFC
are located at 143
Liberty St., New York 6, N.. Y., and
811 Vermont Ave., N. W., Washington 25, D. C.
-a.
was

RFC up to and

Diamond Alkali

Oct. 16 it

financing

was

in

Co.

reported company is planning some new
connection with purchase of additional

the

..

was

»•

.

v

v-.v-'

reported company expects to sell $1,875,000

equipment trust certificates. Probable bidders: Halsey,
Stuart & Co., Inc.; Salomon Bros. & Hutzler. Expected
late November or early in December.
>
Lehmann

(J. M.)

Co.

(N. J.)

?

f

Sept. 1 it was reported that the Office of Alien Property
expects to call for bids in October on all of the out¬
standing stock of this corporation.
:

Cott Beverage Corp.,

(11/7)

for

Proceeds—

Lehigh & New England RR.

Oct. 17 it

V"

Denver & Rio Grande Western RR.

bidders

For working capital.

C. Allyn & Co., Inc., New York.
Proceeds—To expand
output of company's eight divisions.

•

probable

Jacobsen Manufacturing Co., Racine, Wis.
Sept. 21 it was stated that company plans to issue, and
approximately 120,000 additional shares of common
stock. Underwriters—A. C. Allyn & Co., Inc. and Shil-

plans issuance and sale of
of preferred stock.
Underwriter—A.

New Haven, Conn.
Aug. 22 it was stated that the company plans issuance
and sale of 30,000 shares of preferred stock (par
$10),
each share to carry a bonus of common stock.
Under¬
writer—Ira Haupt & Co., New York. Proceeds—For ex¬
pansion program.

as

call

stated company

$10,000,000

mentioned

Proceeds from the sale of the

on March 30).
Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stu¬
art & Co. Inc.; Morgan Stanley &
Co.; The First BostoD
Corp.; Merrill Lynch, Pierce, Fenner & Beane and White,
Weld
&
Co. (jointly).
Proceeds — To redeem a liki
amount of Westchester Lighting Co. 3J/2%
general mort¬
gage bonds due 1967. Offering—Postponed.

was

those

to

bonds, with the exception of Halsey, Stuart & Co. Inc.
preferred stock or deben¬
tures (probably late this year) will be used to retire a
$6,000,000 bank loan used to finance, in part, the com¬
pany's construction program.
* ,?

York, Inc.

refunding mortgage bonds, series H, due May 1,
(in addition to $40,000,000 series G bonds filed with

Consolidated Grocers Corp.

announced that the company contemplates
sale over the next three years of about

Corp. and White, Weld & Co. (jointly); Equit-'
Corp.; Glore, Forgan & Co.; Harris, Hall
& Co. (Inc.); Lehman Brothers; Blyth & Co.; The First
Boston Corp.; Smith, Barney & Co. The following may
bid for preferred stock: Blyth & Co., Inc.; Merrill Lynch,
Pierce. Fenner & Beane; Kidder, Peabody & Co., in addi-*

Co.

of

and

able Securities

v:

was

Edison Co.

Under¬

Securities

approv¬

reported that the holdings of the Union
Securities Corp. group of stock of Colorado Interstate
(531,250 shares) will probably be sold publicly in Octo¬
or

been

60,000 shares of preferred stock (par $100) or $6,000,000
in debentures; also an issue of about
$12,000,000 in first
mortgage bonds. Underwriters—For bonds, to be deter¬
mined by competitive bidding. Probable bidders:
Halsey,
Stuart & Co. Inc.; Harriman Ripley & Co.,
Inc., Union

$14,-

Consolidated

was

issuance

367,500 of outstanding first mortgage 4% bonds and the

ber

Co.

reported that the sale of 38,433 shares of

Iowa-Illinois Gas & Electric Co.

Oct. 8 it

The former issue may be placed privately and
the latter issue offered publicly through Allen &
Co.,
New York. The proceeds are to be used to redeem

Interstate Gas

was

stock has

temporarily postponed.
writer—White, Weld & Co., New York.

bentures.

Colorado

announced that thi*

99.31% owned by American
Co.) plans issuance and sale,

construction.

new

Interstate Petroleum

Sept. 26, Charles Allen, Jr., Chairman, announced that the
company plans to issue and sell $30,000,000 of 4%% first
mortgage bonds due 1972 and $10,000,000 of 15-year de¬

Aug. 20 it

1

sometime before the end of the year, of
682,454 addi¬
tional shares of capital stock to its stockholders. Under¬
writer—None. Proceeds—To repay short-term loans and.

Colorado Fuel & Iron Corp.

on

(approximately

company

■

Pueblo, Colo. Stockholders will vote Nov. 14
ing financing program.
v'.

/

Illinois Bell Telephone Co.
June 27 W. V.= Kahler, President,

Curtis; Kidder, Peabody & Co.
Proceeds—To refund
$49,988,000 of 4% non-callable consolidated first mort¬
gage bonds due July 1, 1952, and to redeem $13,747,000
first and refunding mortgage 4y4%
bonds, series D| due
Sept. 1, 1962.
The remainder will go towards property
improvements, etc. >■<'.. '
'Vt, ••

new

engineering, acquisition of machinery

St., Philadelphia 33, Pa.

son

by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.; Lee
Higginson Corp.; Harris, Hall & Co. (Inc.); Drexel &
Co.; Kuhn, Loeb & Co. and Salomon Bros. & Hutzler
(jointly); Harriman Ripley & Co., Inc.; First Boston
Corp.; Lehman Brothers; Paine,; Webber, Jackson &

a

For

—

and other corporate purposes. Office—2636 No. Hutchin¬

determined

about
a

8

sale

Chicago & Western Indiana RR.

Oct. 8 it

shortly be

Associated Telephone & Telegraph Co.

Bids will

<

J. Arthur Warner

Natural

Erie RR.

determined

construction.

new

Paso

Oct.

by competitive bid¬
ding. Probable bidders: Blyth & Co., Inc., and Kidder,
Peabody & Co. (jointly); Coffin & Burr, Inc.; Harriman
Ripley & Co. Inc.
Proceeds—To repay bank loans and

Inc.,

program.

American Consolidated Freightways
Sept. 14 it was reported that there may

•

be

El

1946*
$157,000,000 to $300,000,00. Traditional Underwriter
—White, Weld & Co., New York.

Co.

for

underwriter:

from

•

SEC

ers,

3,800,000 to

the SEC

announced stockholders will vote Nov.

later.

Power

applied to

Underwriters—To

1981

issue of 106,851 shares of 4% cumula¬
preferred stock (par $100), convertible
prior to Jan. 1, 1962, to be initially offered for subscrip¬
tion by common stockholders at rate of 1
preferred share
for each 35 common shares held.
Price—To be deter-

Chicago, 111-

Maine

company

500,000 shares, of which 420,000 shares are out-*
Additional shares may be issued to stockhold¬
and the proceeds use4 for expansion.
Traditional,

5,000,000 shares; also authorized an increase in the ag¬
gregate principal amount of bonds issuable under thecompany's indenture of mortgage, dated June 1,

315,146 shares of common stock (par $10) for subscrip¬
tion by holders of 6% preferred and common
stock, with
exception of New England Public Service Co., which owns
48.46% of the presently outstanding common stock.

and

tive convertible

ftiined

5

from

standing.

18 stockholders approved an increase in the au¬
thorized first preferred stock from
100,000 to 300,000
the second preferred stock from 200,000 to
300,000 shares and the common stock from

Proceeds—To repay bank loans.

Central

Corp.:

stockholders will vote Oct. 25

shares,

Corp., W. C. Langley & Co. and Carl M. Loeb, Rhoades
& Co. (jointly).

Oct.

Steel

announced

was

Sept.

be

March 23 company applied to New York P. S. Commis¬
sion for authority to issue and sell $25,000,000 of first

Abbott Laboratories

Oct.' 10 it
on

Bids—Scheduled to

Nov. 27.

on

writers—To be determined by competitive
bidding. Prob¬
able bidders: Halsey, Stuart & Co.
Inc.; Lee Higginson

Withdrawal—Statement with¬

Prospective Offerings
.

26.

Regis¬

Central Louisiana Electric
Co., Inc.
10 it was reported company plans in November to
issue and sell $4,000,000 of debentures due 1971.
Under¬

due

stock.

Oct.

construction.

remainder used to pay for construction of

.

it Wilson Brothers, Chicago, III.
Aug. 3 filed $2,200,000 of 5% sinking fund debentures

common

on

new

Oct.

Inc.

it Vinco Corp., Detroit, Mich.
Oct. 11 (letter of notification) 8,973 shares of common,
stock (par $1).
Price—$10.50 per share. UnderwriterReynolds & Co., New York.
Proceeds—To Joseph J.

West Texas

Proceeds—For

it

increasing authorized capital stock to 750,000 shares

on

authority to issue and sell
$7,000,000 first and general mortgage bonds, series T,
due Nov. 1,
1981., Underwrite?—To be determined by
competitive bidding.
Probable bidders:
Halsey, Stuart
& Co. Inc.; Coffin &
Burr, Inc., and The First Boston
Corp. (jointly); Merrill Lynch, Pierce, Fenner & Beane
and White,
Weld &" Co. (jointly); Salomon Bros. &
Hutzler; Blyth & Co., Inc., and Kidder, Peabody & Co.
(jointly); Lee Higginson Corp.; Harriman Ripley & Co.

program.

Oct. 29.

on

repay

sell $8,000,000

Oct. 5 company sought SEC

bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Kidder, Peabody & Co.; Lehman Brothers, and Bear,
Stearns & Co. (jointly); White, Weld & Co.; Salomon
Bros. & Hutzler; First Boston Corp., and Blyth & Co.,
Inc. (jointly); Union Securities Corp., and Smith, Bar¬
for construction

& Beane.

Central Maine Power Co.

Light Co. (10/29)
Aug. 9 filed $9,000,000 first mortgage bonds, due Oct. 1,
Underwriters—To

Oct. 8

mortgage bonds, due 1981. ,Underwriters—To be»
by competitive bidding.
Probable bidders:.*
Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co.; Morgan
Stanley & Co.; Lehman Brothers; First Boston Corp.;
Equitable Securities Corp.; Merrill Lynch, Pierce, Fen¬
ner

outstanding $8,000,000 of bank

,

(11/27)

announced company plans to

was

are

Eastern Stainless

Light Co.

of first

Utah Power &

1981.

Illinois

tration—Expected

...

,

Vitamin Corp.,

S.

•

There

Traditional underwriter: The First Boston
Corp^
who handled private placement of
$2,500,000 of notes in
1948"

determined

t

ceeds—For exploration and

equipment.
loans.

writer: Lehman Brothers.

new

Underwriter-—None.
Office—1520 Spruce

common

stockholders

,,
Bing & Bing, Inc.
;
Aug. 30 it was reported company is contemplating sale
of
additional
common
stock
following approval of
3-for-l stock split (approved Sept.
5.) Traditional under¬

41

Long Island Lighting Co.
Oct. 3 it
-

in

was

announced company plans to issue and sell

December about

$25,000,000 of first mortgage bonds.

Underwriters—To be determined by competitive bidding.
bidders:
Halsey, Stuart & Co. Inc.; Blyth &

Probable

Co., Inc.; Lehman Brothers; Kidder, Peabody & Co.; The
Boston Corp.; Union Securities Corp.; Equitable

First

Securities

Corp^; White, Weld & .Co.; Proceeds—From

sale of bonds,' together

with proceeds from sale of 100,preferred stock (par $100), will be used to
retire $14,493,400 of bonds of former subsidiaries, to re¬
pay bank loans and for construction program. Additional
000 shares of

Continued

on

page

42

42

The Commercial and Financial Chronicle

(1586)

Continued

from

will re¬
quire approximately $100,000,000 additional to complete
the construction program
•

Mathieson

Oct. 25 it

with

was

into

and

through 1954.

Corp.
w
announced that following proposed merger

Mathieson Hydrocarbon

Corp., it is the intention of the company to
portion of 250,000 shares of new pre¬
ferred stock on terms to be set at a later date. The pro¬
Chemical

sell

substantial

a

will

ceeds

be

and

research

added

working

to

used for

capital and

product development.

McKesson

&

approved

stockholders

23

Mengel Co.
Aug. 10, Alvan A. Voit, President, stated that the com¬
,

plans to spend from $15,000,000 to $20,000,000 for
expansion, but that plans for financing have not yet
been completed. Traditional underwriter—F. S. Moseley
& Co.

was

announced stockholders

will yote

Jan. 15,

approving the creation of an authorized issue ot
100,000 shares of convertible preferred stock (par $50).
Underwriter—Carl M. Loeb, Rhoades & Co. Proceeds
For

Oct.

it

11

on

about $25,000,000

and

bentures.

•

.

stockholders will vote

announced

was

convertible

new

preferred stock (about 820,000,000)
of new 20-year sinking fund de-:
Underwriter—Paine, Webber, Jackson & Cur-'
tis.
Proceeds-r-To retire $17,200,000 of 3Y4% debentures,to finance expansion program to cost more than $18,000,000 and for working capital.
Meeting—Stockholders-

company

if Pittsburgh Steel Co.

Dec. 5

will

increasing authorized 5^2% prior preferred stock,
first series,
from 225,927 to 400,000 shares and the
authorized
common
stock from
1,500,000 to 2,500,000
shares. Traditional Underwriters—Kuhn, Loeb & Co.

vote

Nov.

19

approving financing program.

on

on

Sept.

it

25,

comomn

•

•

Hampshire

150,000 to 200,000 shares of additional
Kidder, Peabody & Co.

Public Service Co. of North

Carolina, Inc.

the

was

In

Fall.

Sept.

:

Pacific

Co.,

Ry.

(12/6)

year,

in

was

Utilities

24 it

around

$1,200,000 of bonds were
placed privately with two institutional investors.
July* last

&

17 it

Texas

announced company plans to issue and
sell several million dollars of first mortgage bonds in
12 it

Gas

reported company plans sale of $2,900,000
equipment trust certificates, series N. Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler.
Bids—Expected to be received Dec. 6.

Harriman

July

Texas

Oct.

stock. Probable bidders:

Blyth & Co., Inc. (jointly); The First Boston Corp.;
Ripley & Co. Inc.

and

Texas-Ohio

Houston, Tex.
;
Oct.17 company applied to FPC for authority to con¬
struct a 1,350-mile natural gas transmission line extend¬
ing from Texas into West Virginia. The project is esti->
mated to cost $184,989,683.
;/

reported company may issue and sell

was

late in November

Co.

reported

company

400,000 additional shares of

1952.

Blyth

was

Probable bidders:

&

Co.,

The

issue

may

sell-

and

stock early

common

First

Boston

Corp. and

Inc.

(jointly); Union Securities Corp.;
(jointly);
Oct. 25 stockholders will vote on increasing authorized f Lehman Brothers and Bear, Stearns & Co.
Goldman, Sachs & Co. and Harriman Ripley & Co. Inc.
common
stock to 1,000,000 shares from 500,000 shares.
(jointly); Kidder, Peabody & Co. and Merrill Lynch,
Traditional underwriters: Blyth & Co., Inc., New York;
Pierce, Fenner & Beane (jointly).
William R. Staats & Co.,. Inc., Los Angeles, Calif.
•

it Merritt-Chapman & Scott Corp.
1952

bidders:

X1

pany

Oct. 23 it

reported

was

Public Service Co. of New
a

stock by 500,000 shares

common

of

plans issuance and
certificates. Probable
Halsey, Stuart & Co. Inc.; Salomon Bros. &
Bids—Expected to be received on Nov. 14.

it

17

Hutzler.

Inc.

Robbins,

proposal to increase
to 2,500,000
shares.
No immediate financing contemplated.
Prob¬
able underwriter: Goldman, Sachs & Co., New York.
Oct.

authorized

(11/14)

Pittsburgh & Lake Erie RR.

Thursday, October 25, 1951

.

Oct. 10, it was announced that the company contem¬
plates issuance and sale of not more than 200,000 shares

sale of $6,435,000 equipment trust

Chemical

this company of

•

Oct.

.

Sylvania Electric Products, Inc.

000, and will require expenditures of about $365,000,000
more in the years 1951
to 1956.

41

page

Financing—It is further estimated that company

.

Purex

Corp., Ltd,

Tide Water Power Co.

expansion program.

Metals & Chemicals Corp., Dallas, Tex. (11/15)
was stated company plans issue and sale of 100,share. Under¬
writers—Beer & Co. and Binford, Dunlap & Reed, both
i

Oct. 3 it

000 shares of common stock. Price—$3 per

Texas, and Stuart M. Wyeth Co. of Phila¬
delphia, Pa. Proceeds—For working capital, etc. *

of Dallas,

Rochester Gas & Electric Corp.
Sept. 17 it was reported company has applied to the:
Aug. 1 it was announced that company expects to issue
North Carolina Utilities Commission for permission to;
$5,000,000 additional first mortgage bonds and additional
borrow $1,500,000 on 3% notes.
These notes would be
debt securities or preferred or common stocks, bank
refunded through the sale of common or preferred stock.'
borrowings, or some combination thereof, in connection
Traditional underwriters: Union Securities Corp. and'
with its construction program. The method of obtaining
W. C. Langley & Co., New York. Proceeds from notes
such additional cash requirement has not been deter¬
to;
\ be used to pay for construction costs. 1
mined. Previous bond financing was done privately.
United Gas Corp.
July 18, it was reported that the company expects to
raise money through the sale of some preferred stock
Aug. 1, N. C. McGowan, President, announced that "it"
.

.

New

England Power Co.
1
Sept. 6 it was reported that company plans to

sell^ about

50,000 shares of preferred stock this Fall. Underwriters—
competitive bidding. Probable bid¬

To be determined by
Lehman

Brothers; Equitable Securities Corp. and
Carl M. Loeb, Rhoades & Co. (jointly); The First Boston

ders:

Corp.; Merill Lynch, Pierce, Fenner & Beane; Kidder,
Peabody & Co.; The First Boston Corp.; W. C. Langley
&

Co.; Harriman Ripley & Co., Inc. Proceeds—To repay
bank loans and for construction program.
•

New York Central RR.

Oct. 17 it

was

(11/21)

reported company plans sale of $8,100,000

equipment trust certificates. Probable bidders^ Halsey,
Stuart & Co. Inc.; Salomon Bros. & Hutzler. Bids—Ex¬
pected to be received Nov. 21.
Northern

Oct. 4 it

Indiana
stated

was

increasing

on

Public

Service

Co.

that stockholders will

authorized

common

stock

stock (par $25).

The

common

new preference

stockholders.

to

Oct. 25

4,500,000

stock will be first

Probable underwriters

—Central Republic Co. Inc.; Blyth & Co., Inc.;
rill Lynch, Pierce, Fenner & Beane.
•

Northern Pacific Ry.

and Mer¬

(11/1)

was reported
company expects to issue $3,420,equipment trust certificates. Probable bidders: Hal¬

Stuart & Co.. Inc.; Salomon Bros. & Hutzler., BidsExpected to be received Nov. 1.
sey,

•

Oxford

Paper Co.

Oct. 16 it was reported
company may issue and sell late
in November about 100,000 shares of capital stock. Under¬
writer—The First Boston Corp., New York.

Parker Pen Co.
Oct. 9 it

(11/13)

was

reported that sale of from 90,000 to 100,000
shares of class B common stock (par $2) is
contemplated
on

or

about

Nov.

Underwriters—A.

13.
G.

Price—To

be

announced

later.

Becker

& Co. Inc., Chicago, 111.,
Co., Milwaukee, Wis.
Proceeds

and Robert W. Baird &

will be necessary to arrange for an additional
$50,000,000
to complete the total financing, and it is presently antici-r
pated this will be done by the sale of first mortgage and -

for the next two years.

collateral trust bonds

„

during the latter part of the year." '
Underwriters—To be determined by competitive bidding. *

Ryan Aeronautical Co.* San Diego* Calif.
Aug.

it

4

announced

plans to increase
its authorized capital stock (par $1) from 500,000 to
1,000,000 shares in order to place it in a position to
do appropriate financing of some form of its own securi¬
ties if and when advantageous to the company. The new
financing may take the form of a general offering for
y
sale to the public or granting of rights to
stockholders;
or

the

was

reservation for

—To selling stockholders.

company

conversion

of long-term indebt¬
with provision for con¬

tire

which

common

could

stock

be

issued

issue

(440,000 shares)

not

was

sell

i;

ex¬

from

the

8 by
Gallag¬

bidders:

&

Co.

Inc.;

South

J

Stone

of

company

Control, Inc.

from

Penn

Electric

Switch

Registration—Expected

Co.

to

Penn

soon.

Pennsylvania Water & Power Co.

Eari

Smith,

President,

bond issue of

more

than

announced

company

are

>

due before the end of the year.

announced

company

have to raise

July 25, stockholders approved issuance of 78,507 shares
of cumulative preferred stock
(par $100). Proceeds will
be used for expansion program.

include

imminent.

Philadelphia Electric Co.
Sept. 30 company announced that about $200,000,000 will
have to be raised through the sale of additional secur¬
ities, spaced at intervals, and in amounts which will
permit ready absorption by the investment market. The

,

overall construction program has
already cost $217,000,-




company indicated it would this year be in
the market with $18,000,000 of senior
securities.
Prob¬

able bidders:

Halsey, Stuart & Co. Inc.; Blyth & CoM
Inc.; White, Weld & Co.:. Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane and Harris, Hall & Co.
(Inc.) (jointly).
Offering—Expected in the Fall.
Gas Co.

has filed

applica¬
permission to construct additional
estimated $13,641,000, of which ap¬
proximately $9,187,000 is expected to be spent in 1951,
tion

with

FPC

facilities to cost

for
an

an

*

.

issue and

sell'$20,000,000 of first /

Webster

Securities

Corp.;

Union

"
••

Securities

/

construction •*'
on

or

about

.

v

was

Westinghouse Electric Corp.
Sept. 26, it was announced stockholders will vote Dec. 14
on'
increasing authorized indebtedness to $500,000,000
from $150,000,000 in connection with a
$296,000,000 exrities

April 4, the

was announced company

*

common stock will soon be offered to
pubPriee—In the neighborhood of $11 per share.
Un-

pansion

may

temporary bank loans.

Southern California Gas Cok

Southern Natural

;

by competitive bidding.
Probable bidders:
Halsey,"Stuart & Co. Inc.; Kuhn, Loeb & Co.;. Morgan
Stanley & Co.; Salomon Bros. & Hutzler.
4

now

July 31 it

'

tetmined

be determined, and will depend in part on
market conditions existing from time to time and

Aug. 7, it was reported company may issue and sell
$8,000,000 to $10,000,000 of first mortgage bonds. Prob¬
able bidders may include:
Halsey, Stuart & Co. Inc.;
Lehman Brothers; White, Weld & Co. Proceeds will be
used for expansion program.
Financing not considered

vV

reported company plans issuance and sale ■
of about $15,000,000 of new bonds to refund the out>
standing first mortgage 4% bonds due in October, 1952 ■£
($15,865,866 at Dec. 31, 1950).„ Underwriters—To be de- -(

Probable bidders for bonds: Halsey, Stuart & Co.
Inc.; Kuhn, Loeb & Co.; Blyth & Co., Inc.; The First
Boston Corp. and Harris, Hall & Co., Inc.
(jointly). These
bankers bid for the $30,000,000 issue of
3V8% first and
refunding mortgage bonds which were sold last week.
The nature, amounts and
timing of the new financing

(

to

proposes

• Western Maryland Ry.

gram.

cannot

lie.

Oct. 16 it

may

one

derwriters—Probably Morgan Stanley & Co.; Carl M.
Loeb, Rhoades & Co., and A. E. Ames & Co., Ltd. Pro¬
ceeds—To Dome Mines, Ltd., the parent.
Registration—
Expected early next month.
* y^

..

Southern California Edison Co.
was

of

000 shares of

$8,000,000 by fall of

year. s

bank notes which

rate

'.Cr-'"; '
'
.Western Leaseholds, Ltd.."(Canada)
r /
.»
Oct. 8 it was reported that between
1,000,000 and-1,200,- >

approximately $49,900,000 more through additional fi¬
nancing to take care of its 1951-1952 construction pro¬

a

&

:t Dec. 10.

Aug. 29 it

this

at

Price—At par ($6.50 per

refunding mortgage bonds. Underwriter—To be determined by competitive bidding. Probable bidders;
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;

Jersey Gas Co.

Sept. 21 it was reported that company plans to issue and
sell 100,000 additional shares of common stock.
Under¬
writer—F. S. Moseley & Co.,

24

plans

stockholders

Corp.; White, Weld & Co. Proceeds—For
Salomon 'i program; /Bids—Expected to be
opened

i( Penn Control, Inc., Goshen, Ind.

April

present

Proceeds—For working capital.

company

company

Halsey, Stuart

share).

-

of

and

of $8,070,000 equipment
trust certificates, series K, to be dated Nov.
15, 1951 and
to mature serially in 30
equal semi-annual instalments.
Probable

to

Virginia Electric & Power Co. (12/10)
Sept. 25, Jack G. Holtzclaw, President, announced the

5, N. Y., for the

purchase

stock

share for each two shares held.
2-

Nov.

on

authorizing the sale of 481,307 additional shares

common

Dillon, Read & Co.; F. S. Moseley & Co.; Riter & Co.
(EST)

Vertientes-Camaquey Sugar Co*

on

•

the company at the office of Willkie Owen Farr
her & Walton, 15 Broad
St., New York

>

,

Oct. 22, it was announced stockholders will vote Nov. 27

& Co.; F. Eberstadt &
Co.; Allen & Co.; new company
formed by United States & International Securities
Corp.,

Seaboard Air Line RR. (11/8)
Bids will be received up to noon

Paine, Webber, Jackson & Curtis, Boston, Mass. Proceeds
working capital.
■(/.,
1
•

Underwriters—May be determined by com-*
petitive bidding.
Probable bidders: Halsey, Stuart &
Co. Inc.; Lehman Brothers; Blyth & Co., Inc. Proceeds—
To refund the presently
outstanding $4,000,000 of 4%%
first mortgage bonds and repay
outstanding short-term

on

18

to

—For

(Inc.), Union Se¬
curities Corp. and Ladenburg, Thalmann & Co.
(jointly);
Merrill Lynch, Pierce, Fenner &
Beane; Kidder, Peabody

Aug. 1 A. Sidney Knowles, Chairman and President, an¬
nounced that the directors have approved in
principle a
plan to offer a modest amount (not exceeding $300,000);
of common stock for subscription
by common stockhold¬
ers.
This may involve the issuance of 24,700 additional
shares on a one-for-eight basis. There are
presently out¬
standing 197,600 shares of $1 par value. Probable Under¬
writer—H. M. Byllesby &
Co., Chicago, 111. Proceeds—
For working capital.
V
"

Name—Stockholders

rate purposes.
'
• Van Norman Co.
Oct.

Probable bidders: A. G. Becker & Co.

Bros. & Hutzler.

Boston, Mass. Proceeds—
working capital. Change in
Oct. 19 approved change in name

an issue of like amount sold on
July 24 were Halsey, Stuart & Co.. Inc.; Morgan Stanley & Co., White,
Weld & Co. and Equitable Securities
Corp. (jointly);
The First Boston Corp., Harriman
Ripley & Co., Inc., and '
Goldman, Sachs & Co. (jointly). Proceeds—For expansion program of United Gas
System and for other corpo-

it was announced company
plans to issue and
public $2,500,000 of 20-year convertible deben-"1:
vertibility into common stock. The company presently
tures to bear interest at a rate between. 3%% and 4
*4 % *
has outstanding 439,193 shares of
capital stock, of which
| per annum. Stockholders will vote Nov. 15 on increas- C
45,350 shares are held by the wholly owned subsidiary,
v ing authorized
common stock by an additional
200,000
Ryan School of Aeronautics.
yj shares of common stock and on authorizing issuance of i.
Sobering Corp.
all or any part of such increased shares
by the directors *
Oct 3 it was reported that the sale of the
without prior offering to stockholders.
company's en¬
Underwriter— r

Parkersburg Rig & Reel Co.

For expansion program and

,

Bidders for

pected for at least two months. The sale will be made
to the highest bidder by the Office of Alien
Property*

Oct. 17 it
000

Underwriter—Probably The First Boston
Corp., New York. Proceeds—To finance, in part, a $10,000,000 construction program the company has budgeted

edness

vote

shares from 4,000,000 shares and on approving the crea¬
tion of 240,000 shares of new cumulative preference
offered to

later this year.

,

Company

program.

the type

plans

sale

and amount of which

of

debt

/

»

i
■

secu¬

undetermined

-

(may be private). Traditional underwriter: Kuhn, Loeb
& Co., New York.
^
'
.

;

are

.

Wisconsin Public Service Corp.
Sept. 4 C. E. Kohlepp, President, announced

company

>

a $12,000,000 steam turbine
power plant
County, Wis. Method of permanent financ-

J

plans to build
in Marathon

ing has not yet been
bidders may include:

determined.

If bonds, .probable
Halsey, Stuart & Co. Inc.; The
Boston Corp.; Harris, Hall & Co.
(Inc.);. Kidder,
Peabody & Co.; Carl M. Loeb, Rhoades & Co.; Salomon
Bros. & Hutzler; Union Securities
Corp.; Merrill Lynch,
Pierce, Fenner & Beane; Shields & Co.

.

<

First

.

'

;

Volume

174

.Number 5058

.

The Commercial and Financial Chronicle

.

.

(1587)
founded
to

judging by the

the

opening

books.

of

response., stock

subscription

of the

Commonwealth Edi¬

of Chicago, which ex¬
pects to raise upward of $40,000,-

_

000 via this route.

Continental

Can

DIVIDEND NOTICES

Co.,

son

A

<

Continental

Can

Co.'s

$15,000,-

000 of 25-year

debentures,

ing

coupon,

3V4%

a

schedule

for

unforeseen
In

this

that
The corporate new issue market
is

moment.

ondary
about

Uncertainty in the
market

has

not

in

sec¬

making

the

rank

and

file

and

just what they want to

whereas

fine

certain

a

basis

countering

and

are

Meanwhile

this

week's

emission

second

housing
bonds, under the auspices of the

Public

.

Housing
Administration,
tended to bring about a
stiffening
of spines and prices in the tax-

The

"split-deal,"

share

taking
the

of

sorted

the

$162,000,000

issues,

with

lion's

of

as¬

marked

nicipal

few

and

withdraw

the

on

price

the

of

104,625

shares

and

wait

and proceeded to mark
up

price
-

inventories
was

on

theory
by the

commanded

ranges

quota¬

the

justified

.

by

the

housing securities.
Big

Crowell, Weedon

par

pre¬

ferred stock, with bankers
agree¬
ing to take up any unsubscribed
*.

.
,

yr

pany, at a

ber

•

,

convertible

par

COMPANY

(Special

meeting held

the

on

to The

Financial

Octo¬

a

stock

payable

close

cents

210

was

West

the

of

Com¬

of business

6,

November

on

;

with

>

Union Carbide
AND CARBON CORPORATION

JAEGER, Treasurer

Atlanta, Georgia

ucc

Chronicle)

Seventh

formerly

Helser Co.

Broadway, New York 4, N. Y.

per

December

on

5, 1951.

Co.

One

A

SOCONY-VACUUM

Street.

J.

OIL COMPANY

Henry

dividend

of Fifty cents
share on the outstanding
capital stock of this Corporation
has been declared, payable Dec. 1,
per

1951

stockholders of record

to

KENNETH
Dividend

H. HANNAN,
Secretary

Oct. 23,

No. 163

1951

of Directors today'
quarterly dividend of
40per share and an extra divi¬
dend of 304 per share on the
outstanding capital stock of this
Company, both payable Decem¬
ber 10, 1951, to stockholders of

The

OIL

CORPORATION
Common Stock Dividend No. 84
At

a

meeting of the Board of Directors

The Gamewell
Company, held to¬
day, Friday, October 19, 1951, a divi¬
dend

of

25c

payable

share

November

on

declared

15,

15,

1951,

to

C.

1951

close of

stockholders of record at the close of
business on November 5, 1951.
W.

CORPORATION
60 E. 42nd Street, New York

the close of business

to

stockholders of record

Wilt be mailed.
•

'

.

■

R c

of

has

declared

issuer

Southern

DIVIDEND

NO.

of

has

Board

declared

President

payable

v.

Company

bankers handling the huge Pacific
Gas
&
Electric
preferred stock
concerned

with

the

recent

On the contrary

involving

preferred

par

shares

stock

utility, went through
with

the

$25.50

offering

share for

a

Steam (fata#

that operation,

1,500,000

of
as

$25

the

SALEM,

big
at

yield basis of

Board

■v.

4.90%.

held

Preliminary

dicated
be

demand

had

in¬

that this operation would

of
on

holders

big

these

and presumably

success

calculations

will

1951

November
record

Trust

mail

declared
a

23

DECLARED

the

close

1951.

Company,

of

—

,

A

25* per share

sha

Payable November 15,1951 to stock¬

a

share

1951

13,

($1.25)

share

per

holders of record November 1, 1951.

to
of

R. GOULD

Old

MOREHEAD,

Eoston,

Treasurer

checks.

October 22, 1951

the

on

dividend
e

of

One

ent

Preferred

per

also
of

rate

to

December

intention

of

the

authorize

to

of 50<l

next

per

share to 75f

share.

October

($1.00)

the

Directors

Louis P.

195,1.

dollar

1951.

payable

quarterly
dividend, which will be declared
in January, 1952, from the pres¬

1951.

twenty-five

Stock of Southern
Railway Company has
today been declared, payable December 15,
1951, to stockholders of record at the close
of business November 15,

23,

at

November

23,

Cardani, Treasurer
1951

per

1,298,200 shares of Common Stock

on

without par value of Southern Railway Com¬

has

pany

surplus
the

today

of

fiscal

been

declared

out

of

n^t profits of the Company,
year

ended December 31,

the

for

1950,

payable December 15, 1951, to stockholders
of record at the close of business November

15, 1951.

,

>

X

V.
J.

J.

MAHER, Secretary.

RUDOLPH C. DICK

well-

were

24,

QUARTERLY

NO.

Common Stock

of

Fifty Cents (.50)

of

business

Colony
a

Directors

October

on

dividend

>

of

DIVIDEND

•

24,1951

Naumkeag
Steam Cotton Company at a
meeting

payable

around

REGULAR

234

October

The

set

No.

A dividend of One dollar and
cents

famftOHtj,

MASSACHUSETTS

DIVIDEND

scheduled

price

a

of

New York, October 23,

•

GAS CORPORATION

15,

record

increase in the

an

be¬

haviour of the market.

is

Board

NOTICE

of

share,

per

are

1951.

It

_

DIVIDEND

SUBURBAN PROPANE

dividends

25

also

dividend, 4>f

($1 00)

December

on

stockholders

1,

Directors
extra

an.

dollar

one

BECK, Treasurer.

underwriting appeared deeply

24

this

regular quar^
terly dividend of fifty cents (50(t)
per share, payable on December
15, 1951.

The

•

the

nor

Directors

the

.

SPENCER

-

Board

COMMON

the

at

Nov. 15, 1951. Checks

on

NO.

The

Bickham, Secretary

DIVIDEND

day

W. D.

Oct. 11, 1951 declared from the

business

17, N. Y.

COMMON

Surplus of the Corporation a quar¬
terly dividend of fifty cents ($.50) and an
extra
dividend of
fifty cents (8.50) per
share on the Common Stock,
payable Dec.

special

a

was

the Common Stock of the

on

Company

per

on

at

WEST INDIES SUGAR

November 2, 1951.

The Board of Directors of Sinclair Oil Cor¬

poration

a

Earned

share and

per

dividend of 25c

record

& Extra Common Stock Dividend

of

Board

declared

SINCLAIR

Both

the

President and Treasurer
PEQUOT
pay

dividend notices

SHEETS

&

PILLOW

CASES

<

daily dividends of luxurious and

restful sleep.

"The

Nation Sleeps

on

PEQUOT SHEETS

Southern

international
harvester

;

56

Church

,

:

per

share

on

147

the

of

stock payable

January 15,1952, to stockholders of
cord at the close of business

on

GERARD J.

HOLDERS
A

dividend

funds
re¬

Decem¬

ber 15, 1951.
-

NOTICE TO SHAREHOLDERS

fifty cents (50f)

common

EGER, Secretary

has

shares
1951.

ber

of

company

No.

133

of

one

dollar

and

seventy-five cents ($1.75) per share
the preferred stock payable Dec.

currencies

at

1951, to stockholders of record
close of business

on

GERARD

at

1,
the

Nov. 5, 1951.

J. EGER, Secretary




the

rate

prevailing

OATH

I

advantages are
holders, who

not available to
bearer
have
to rely
for such

a

published

advertisements.
Such
conversion can be effected by sending
bearer
warrants
with
covering letter of direction bv
registered or insured mail to the Secretary's
Department
of
the
Company at 56
Church
on

Montreal

or

to the Co-tmnsfer

Agents,

Trust

Company, 511 Place d'Arrnts,
1, or the Bankers Truet CcmDanv,
16
Wall
Street. New York,
15.
There
is
no
charge
by
the
Company
or
the Co-transfer
Agents for this service.

Montreal,

BY

ORDER

OF

THE

BOARD

COLIN D. CRICHTON, General
Secretary.

October

18,

1951.

1,

i

1951,

to

WOOD

stockholders

of

ll-

D. L. BARNES, JR.
„

authorized the payment of the

The

has

declared

dividend

a

seventy-five
(75?) per share on the

Stock, payable

November
Financing the Consumer through
tion-wide subsidiaries

—

na¬

principally

Public Loan Corporation

Loan Service Corporation
Ohio Finance Company

quarterly

of

15,

stockholders

of

1951

to

record

at

j

the close of business Oc¬
tober 26,1951.

v;

R. L. LINGELBACH

General Public Loan

October 25,1951

share

on

the

Stock,

4.08% Series;
:

30V2

cents per

share

Cumulative Preferred

on

the

Stock,'

4.88% Series.
The above dividends

are

pay¬

able November 30, 1951, to
stockholders of record Novem¬
ber 5, 1951. Chech will be

mailed from the Company's
office in Los Angeles, Novem¬

ber 30, mi.
%

Secretary

Corporation

cents per

Cumulative Preferred

Board of Directors

Common

October 18,1951

'

Board of Directors has

following quarterly dividends:

COMMON DIVIDEND

cents

Treasurer

.

The

25VS

If
fi¬

SERIES

DIVIDEND NO. 16

m

record November 15, 1951.

fl

CUMULATIVE PREFERRED STOCK
4.88%

PURIFIED

cents

share, payable December

per

II

OF HIGHLY

m-<

II

STOCK

SERIES

DIVIDEND NO. 7

CELLULOSE

reguiarquarterly dividend on

the Common Stock of 40

II

is

1
i

DIVIDEND

The Board of Directors d ecla red

%

II

I

4.08%

ON COMMON STOCK

il

CUMULATIVE PREFERRED

PRODUCER

CONSECUTIVE

°^

on

presentation.
Holders
of
bearer
share
warrants
are
re¬
minded
that they have the right to convert
their
bearer
warrants
Into
share
certificates
registered in their names,
Dividend cheques,
annual and interim reports, notices of
meetings,
and other information
affecting the Companv
will
then
be
sent
direct to
the shareholder.

Street, Toronto, 1.
on

B
m

of

information

Company have declared quarterly

Canadian

outstanding

in

the

the

warrant

dividend

WARRANTS

share
on

1951 will receive dividends by cheque.
Dividends in respect of share warrants will be
paid on or
after
December
1,
1951
by The
Royal
Bank
of
Canada
on
presentation
of
coupon number 77.
Transfer books will not be closed.
Dividends
payable to non-residents may be converted into

These

The Directors of International Harvest¬

per

1,

date

harvester

SHARE

35c

declared

rr vomeR

OF ILLINOIS

Wi

AND

Company payable December 1,
Registered shareholders of record Novem¬

foreign

international

OF

of

been

Company

DIVIDENDS

INVESTMENT COMPANY

Company have declared quarterly

dividend No.

California

Street

Toronto 1, Ontario.

The Directors of International Harvest¬

er

Edison

Imperial Oil Limited

company

er

at

the close of business Nov. 2, 1951.

INCORPORATED

:

.

cash

(50c)

dividend notices

preferred

dividend notices

Offering Made

Neither

1951 who

regularly issued Com¬

Stock ($1.00 par) of this Company.
CHAS. F. BRADLEY, Secretary

quar¬

1951 to holders of record at the

ANGELES, Calif.—John P.
Masterson has joined the staff of
Standard Investment Co. of Cali¬
He

that date hold

outstanding shares

common

pany,

on

LOS

fornia,

Stock of record November 23,
on

1951, declared

terly dividend of 20

Next week's major
undertaking
will embrace
1,716,500 shares of

$25

22,

share
of

.

With Standard Inv.

con¬

no

cumulative

balance.

SOUTHERN

of a quarterly dividend of
fifty cents ($.50) per share payable De¬
cember 7, 1951 to holders of Common

Directors of The Southern Com¬

ANGELES, Calif.—Arthur

to

housing bonds,
incidentally, gave indica¬
tion of being a fast operation.
Others were disposed to antici¬
pate
just
such
a
development

this

the payment

next

L. H.

for

which,

on

The Board of Directors has authorized

made

the

THE

Co.

lic offering of the

tions

be

within

L.

issue

second

of

an

DIVIDEND

date, price

will

(Special to The Financial Chronicle)

i'.

-

Stock

HOPKINS, Treasurer
Philadelphia, Pa.

mon

With

the market's response to the
pub¬

that

JOHNS

October 23, 1951

is of¬

company

Common

(INCORPORATED)

issue

3.21%.:.'f;Y

vertible,

mu¬

inclined

were

offerings

record

as

details

probably

LOS

Company

1951.

THE UNITED GAS IMPROVEMENT CO.

days.

situation.

Many dealers

ber 21,

bankers'

a

influence

rate

fering to its stockholders

absorbing the balance, had

group

other

public

the

Commonwealth Edison

large dealer

a

down

eight shares

.V

Meanwhile the

exempt market generally.
syndicate

details

and

United States Lines

on

declared, payable December
15, 1951, to stockholders of record Novem¬

share

one

divi¬

share

per

held.

common

such

ideas,

since

of

extra

an

15c

Capital Stock, par value
$13.50 per share, have been

placed in regis¬

was

'

around

en¬

of

conditions

ratio

of

the

Calude has joined the staff of
Crowell, Weedon & Co., 650 South
unchanged, the price being fixed: Spring Street, members of the Los
at 100 %, but the
edging up of the Angeles Stock Exchange. He was
company rate fixed the yield at previously with Lester, Ryons &

was

good bit of haggling.

a

gigantic

dealers

modified

were

the

A banking
group has agreed to
underwrite the offering on which

understood

at a slight • premium. The latter
phase of the operation remained

do

10 days-ago, now the picture

changed

of

reflection of the change

a

market

interest

stitutional investors fidgety to say
the
least.
They don't seem
to
know

any

obstacle.

original

in

of preferred for each

Reports had it that originally it
been planned to fix a 3 Vs %

in¬

of

is

holders

on

had

—But events of the last fortnight
have certainly had the effect of

a

terms

tration.

any

it

from

undertaking

brought

wholesale tendency to
defer prospective new
financing.

has

the

barring

minute

case,

slightly

"touch-and-go" affair at the doubtless

a

today,

last

carry¬

were

share and

dend

Here again the offering will be
made initially to common stock¬
,

dividend notices

quarterly dividend of 35c

per

Issues

43

P. c. hale, Treasurer

October 19,1951

The Commercial and Financial Chronicle

44

.

.

Thursday, October 25, 1951

.

(1588)

BUSINESS BUZZ

Business
OTL

•

#

•

Man's

S. SHYSTER

A

Behind-the-Scene Interpretation*
from the Nation'*

WASHINGTON, D. C.—The

against the government spending
classes is simply this: The House
leaders fell down on

their routine

job of "leading" in a boner com¬
parable to that of the captain of a
ship sleeping while a junior of¬
ficer ran the vessel aground in
dangerous waters.

Re¬

Everybody knew what some

going to do and

publicans were
what

CIO Democrats were

some

going to do.
Republican

m/ /\|i

diction

legislation.
The background

Bookshelf

retirement

railroad

over

BOOKING AGENT

A. \JwAj

jlJL § w\A/

Capital

story behind the temporary House
victory of the taxpaying masses

gJ

-y*

Enterprise Association,

American

York

Inc., 4 East 41st Street, New

17, N. Y.—paper—$1.00.
Expanding Your Income

The

—

know-how and know-when of in¬

vesting for income and capital
growth — Dept. 6, David McKay
Co., Inc., 225 Park Avenue, New
York 17, N. Y.—$2.00.
Office

Library of

Relations

\

/

Antitrust

Economic Approach to

Problems, An—Clare E. Griffin-

this is that
initially
the
powerful railroad
unions
got themselves a superduper special old-age pension pro¬
gram,
very
roughly, and only
roughly, almost twice as good as
that provided under the general
Federal
contributory plan.
The
payroll taxes are also very much
higher. The total payroll take is
currently 12% and on Jan. 1 it
goes up to 12.5%, divided equally
between the company and the em¬
on

Industrial

an

Executive, The—Indus¬

ployee.
strategy is to use
However, by its Social Security
high taxes as a campaign argu-i Act changes in 1950, Congress in;
ment against the Truman Admin¬
many types of cases, provided a
istration. This must be done, how¬
relatively more attractive deal, es¬
ever, without at the same time
pecially for those only a couple
giving the Trumanites
a good' of years or so away from retire¬
counter argument, to wit, that Re¬
ment, than is obtainable under

trial

publicans killed the tax

retirement

Metal Mines—Ontario Mining As¬

This has got the railroad
boys anxious for some of the bet¬
ter features of the general plan,

sociation, 320 Bay Street, Toronto,

bill and

helped to contribute to the Fed¬
eral deficit which, in due course,
multiple of the reve¬
which would be raised by the

will be
nue

some

tax bill.

<

'

-

;

The ClO-inclined Democrats, on

whilst not desert¬
ing their President, wanted to reg¬
ister
a
protest - for the record

worked less than 10 years on

walking delegates.

i,

:

-

for Republi¬
cans to record a protest and the
left-wingers also to record a pro¬
■

So the set-up was

test.

,

The

77;^;;;!'; -.^;^77';:

' \

'

had

have

should

captain

-

in chains sounding

the leadsman

port

(m
O*"

Inc.,

think

"I

dollar

a

would

it

be

out of the

a

air worth

tried

latter

to limit

the

it were, in¬

that about a company of top

trols and with more advances into

workers will

security,

social

than $800 per individual,

the theory that this

on

class

legislation

the

ever,

would give

the

brass would be deprived of an ag¬

opposition will do.

there is

that they would pass the con¬

sure

ference

final version of the tax

or

bill, that they made no attempt
to take soundings.
If they had,
they simply would have laid it on
the line to enough of the leftwingers needed to secure passage,
and told them to go down there
and back up

their Harry.

Old

present, it seems fairly safe

At

asked

next

best

the

this

in

little

bill

tax

was

the Trumanites can't

passed,

say

the Republicans killed it and are

that

"killed" the tax

they

bill in the House but Truman pres¬
sure

Democrats

upon

House

there

switch

to

taxes

on

and

caused

levy

you'se

the

them

taxpaying

hiked for this

will

instead

*

the

on

tion

cover

trust

of

general

So the word "integra¬

will

a

legal (because

misapplica¬

collected

funds

for

other purposes.
8jc

*

Put down for
one

as

by

of

the

time in 1952

certain

your

as a

new and
taxpayer,

provision of $832 million an¬

nually for
and

a

raise in
of

allowances

pay,

10%

quarters,
for

all

a

bill

was

Services Committee.

reported
It

was

have

tirement picture.

felt that

about 15% in

for retired workers, 33%

pensions
for

sur¬

sum pay¬

ments.

The real
out

next

tricky stuff will

year

as

a

come

result of this

It

was

consider it.

a

adjournment

to

,

New

Bookstore,

Place, i: New

,f

N. Y.—spiral

—

binding,

18

York,

paper cover*

With Westheimer
,.

(Special to The Financial Chronicle)

i

—

Earl

J.

Carson has become associated with

He

hectic

inflation
deficit financing will ever set¬
problems

of

(Special to The Financial Chronicle)

MEDFORD,

Ore. —Collier

''

H.

any
stable pattern Buffington is now connected with
atmosphere requisite Stephenson, Leydecker & Co. of
to setting any fundamental and
Oakland, Cal.
long-run
changes
in
monetary

tle

to

down

which is

an

laws.

;-v;
.

y

National
one

*

*

sji

Robert

A.

-

For

Taft,

in his1

Press Club speech, slew

of the

ancient shibboleths

Large

of

Appreciation Potential
WE SUGGEST

political writing, the "independent
vote" and its so-called paramount

Patman, is the
\ ''

importance.

Since about half the

people don't ordinarily vote, Sen¬
ator Taft said that what he wanted

long-

to

for the Patman in¬

interest

was

the

".indifferent

RIVERSIDE CEMENT CO,
CLASS B
A

in

leading

(common) STOCK
producer

fast-growing

of

cement

Southern

vote," the millions who don't read

California.

voiced by Chairman

about

Analysis of this Company and

of the

don't

the belief,
Wm. Martin
Board, that such a review

quiry

and

is

based

upon

part, it is also motivated by
cat-and-dog

the desire to escape a

between

Patman

and

the

Board.
It is

study

possible that

may

a more

issues

to.

This,

and

usually

the

Senator

said, is of far greater significance,

analysis is long overdue.

fight

public
care

sober

be made, but from this

distance it appears doubtful.

The

or

could

be,

than

the

dent" vote.

"indepen¬

review of the Cement Indus¬

try available on request.

Priced about

$13.00

per

share

■

(This column is intended to

re¬

flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may

a

not coincide with
the "Chronicle's" own views.)

LERNER & CO.
Investment

Securities

10 Post Office Square, Boston

9, Mass.

Tel. HUbbard 2-1990

Allied Electric Products

FOREIGN

SECURITIES

taxpayers might be

little^sensitive to having a mili¬

raise considered almost
simultaneously with a new tax
bill, a raise in pay for postal em¬
ployees, and a raise in pay for all

tary

FIRM TRADING MARKETS

Kingwood Oil
Standard Cable

Also, certain members

some

PARL MARKS & P.O. INC,

TexasEngineering Cr Mfg.

pay

other Federal tax eaters.

Republicans and Democrats, Con¬

and Senate committees with

gress




University

Washington

Otto

A.

Kreger

the patience to

delayed because it would

postponed

"study" by a joint committee com¬
posed of members of the House

juris¬

Erich

Randall

out

joint House-Senate study of
changes in the whole railroad re¬

vivors, and 25% in lump

or

inten¬

for

were

and

subcommittee of the Congres¬
Committee,
which the
Reserve
System's

tionally delayed until next year.

The immediate

\
Cor¬

military personnel.

the railroad retirement set-up just
before closing, Congress provided
a

to have

circumstances

the

unanimously by the House Armed

While raising the benefits under

boosts

the

a

look approach

H.

York

CINCINNATI,1 ' Ohio

horizon which would indicate that

sional Joint Economic

Part of the motive for this

of the Banking

members

either the time

is to be conducted

vehement foe, Rep.

Practices; in

was
formerly with Russell,
Long & Burkholder of Lexington,
go into what, for politicians, are Ky. 7.
largely theoretical questions.
Finally, there is nothing on any With Stephenson Leydecker

under

go

the

and

Westheimer &
Co., 326 Walnut
ing Committees who comprise the
bulk of the membership of the Street, members of the New York
JEC Committee. They are unlikely and Cincinnati Stock Exchanges.

it?

System

the

Senator

The inquiry

In

*

some

additional liabilities

Such
*

be

The raid

deal.

enacted by Congress)

suckers.
*

does

Chairman.

Sinee the tax bill passed, the Re¬
world

be

•

amended

have

New

Avenue,

Starkweather,

and

Most of these

And it is members of the Bank¬

here?

lay of about $300 million will not

responsible for mounting deficits.
publicans will be able to tell the

Where

of

tion"

out

(2)

who

dough for railroad workers' retire¬
ment.
Their present annual out¬

lias

Since

not

to kick in more

year

trust fund.

come

will

railroads

the

that

those

of

State.

Welfare

Committees.

the plans both of its framers and

from

coincidence, it is the GOP which
comedy.

the railroad

for

more

Trust'

workers.

be

Curiously enough, and by sheer

still

Fund

Survivors'

and

.

'

by

.

point in not raising the

no

Age

an

nostrums will have to be handled

things not available under

System matched

-*,-,•••

the leaders were so

case

always

is

year

On the

plan.

general

the

hand,

,

In this

P.

Congress playing with more con¬

on"

and

Principles and Techniques—Louis

election

Presidential

a

popularity.

more

,

the

of

session

raises to

The Committee pointed out, how¬

railroad

However, the bill

is backed by

and the Administration. The

.

porate Finance: An application of

Fifty Cents!"

Thus, for example, the older, near"thrown

f

Ontario

in

N. Y—paper—$3.00.

Policies

intensely hot
political session.
The President
may be expected to try to keep

be

r

-

better act

other gregate of $450,000, and threw out
this gimmick. The Administration
stead of taking a siesta in the sack.
the general plan, such as disability accepted it and is for the bill,
f
In this case the Democratic lead¬
benefits, but which are now avail¬
ers, and to some extent the Repub¬ able to the railroad workers, will
Behind the drive of Rep. Wright
licans as well, were hitting the
be retained.
;
>
Patman (D., Tex.) to lambast the
sack.
\
This, of course, will throw a Federal Reserve System for its
One "of the routine things the
greater financial burden on the alleged independence of the Ad¬
leaders do before votes on major,
general plan's so-called reserves. ministration,
there
is
another
pieces of legislation is to take a However, the thinking in Con4 movement. That is to turn the
poll to see how many votes they
gress is that since the Administrai forthcoming Patman inquiry into
can count upon.
When you know tion
by the 1950 revision, in fact a sober, scholarly, careful review
there is going to be a protest vote
if not in name, abandoned the of the 39 years of the Federal Re¬
and you are a leader you canvas
self-supporting theory of the 1935 serve System.
your own boys
in private, put general act, and is- prepared to
fIdea of the latter movement is
them on the spot, and by guessing
abandon its solvency still more to to answer the question: (1) How
and/or political espionage, try to
provide "health insurance" at "no has the actual development of the
figure out as near as you can what extra cost" for pensioners, then
Federal Reserve
these shoal waters, as

if you could pull;
100 Cents instead of

Madison

400

York 17,

not

retirement

•'

—Dr. Worth Wade—Chemonomics,

benefits
available in any given class of cir¬
cumstances,
under
either plan.

the railroad boys the best

.'

Patents for Technical Personnel

the

to give

.

1950-1951

Prevention

Ont., Canada—paper.

grating" the railroad retirement
scheme with the general contribu¬
tory plan. The idea will be

Directors

of

Accident

"inte¬

study is for the purpose of

"•

...

Ontario Mining Association, Re¬

Congressional

proposed

the

Social

Princeton, N. J.—paper—$1.00.

railroad.
So

Depart¬

•

and

Institutions, Princeton University,

have

who

those

for

especially

Section,

Economics

of

ment

plan.

the other hand,

against the bill because it didn't
"soak the rich" enough to suit the

railroad

special

the

Relations

-

FOREIGN SECURITIES SPECIALISTS

50 BROAD STREET...NEW YORK 4, N. Y.

TEL. HANOVER 2-0050... TELETYPE: NY 1-971

Hill, Thompson & Co., Inc.
Trading Department

70 WALL

STREET, N. Y. 5

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