The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
IS.
ADM.
)
-4
194$\
NOV 1
jUBRARY
Final Edition
ESTABLISHED
In 2 Sections-Section
1
Keg. U. S. Pat. Office
.Volume 164
Number 4538
New
York, N. Y., Thursday, October 31, 1946
Price 60 Cents
Copy
a
*
Forces and the FRB
Has New
Planning Been A Success?
By MARRINER S. ECCLES*
Chairman, Board of Governors of Federal Reserve System
By BENJAMIN M. ANDERSON, Ph.D.
I
Asserting "past experience has demonstrated that maintenance of
stable and prosperous conditions cannot be assured by exclusive
Dr; Anderson contends governmental economic planning to create full
employment began with cheap
money policy of 1924 and became intensified in 1933 under Democratic New Deal.
Traces statis¬
j
reliance
tically effects of New Deal policies and concludes unemployment was not cured and technical progress
retarded through impaired capital equipment.
Holds sharp rise in American industry in 1939,
compared with 1914, was due to larger slack in use of industrial potentiality in latter year, and con¬
cludes that, judged statistically, government economic
planning may be condemned as robbing us,
year after year, of production we might have had and consumption which we might have
enjoyed.
i
upon the free play of market forces," FRB Chairman holds
inflationary potentials continue, and in view of decontrols, nation
must now rely
primarily upon self-imposed restraint of manage¬
ment, labor and agriculture.
I
was
Holds Federal interest rates should
not rise, and lays stock market decline to wage-price maladjust-
j
ments and
uncertainty of business profits.
,
/
.
The New Deal, in the sense of governmental economic
planning designed to create
employment, began, as a conscious and deliberate matter, in< 1924, when the Federal
Reserve Banks bought several hundred millions of
government securities, manipulating
'
full
It is ten years since I had the privilege of meeting with
you at a
bank management conference of the New England Council. The Axis
••••-■/•c loud
waL<^then' just be-
ginning
blacken
skies
Interest Rates and
the
and
Orient.
Few
tion of
Federal Reserve
aware"-
ominous
tent.
gling
were
strug¬
up from
<>
Bank executive contends because low interest
fiscal
the
deepest
depression in
history.
Marriner
S.
Eccles
decade
and
businessmen
the
No
•
ade.
of
then
After
all
could
events
the
wars,
of
the
next
*An
devastating
find ourselves
address by
Mr. Eccles be¬
New England
Management
Conference,
Boston, Mass., Oct. 25, 1946.
the
The
dec¬
today with a gross national debt
of $265 billions, or nearly eight
(Continued on page 2229)
fore
Sixteenth
Bank
encouraging banks to convert
as
since
fluctuations
the
first
of
in
this
long-term
year
and
Havana Litho. Co.*
on
The
(Continued
*27tis article
Washington have created
(Continued
<
a
number of
New
Deal's
is
Effect
,
England Bank Man¬
2234)
on page
I
For
:
INDEX
detailed
contents
see
index
page
of
2203
Slate and
GULF, MOBILE
request
i
STATE
& OHIO RR.
Sf
Ms
AND
on
BONDS
request
Municipal
MUNICIPAL
COMMON STOCK
Analysis
i
wr
'..Y
.iv:i
Hirsch & Co.
Successors to
,
New
York
Stock
Established
.
"<
64 Wall
Troy
THE NATIONAL CITY BANK
Street, New York S
BOSTON
HAnover
PHILADELPHIA
Buffalo
Syracuss
Dallas
Washington, D. C.
Chicago
,
Teletype NT 1-210
Cleveland
Geneva
London
(Representative)
Baltimore
Pittsburgh
Springfield
Scranton
Wilkes-Barre
New Haven
Woonsocket
Bond
90c
V
Bull, holden & c°
14 WALL ST.. NEW YORK 5, N. Y.
1
TELEPHONE-RECTOR 2-6300
i,./-
-r«•.;-•
%
y
'•
.*vi
.
«•»»
-
Company
INCORPORATED
Members N. Y.
Security Dealers Ats'n.
45 Nassau Street
Tel.
REctor
3-3600
Philadelphia Telephone:
New York 5
Teletype N. V. 1-676
Enterprise
V
#016
HAnover 2-0986
New York
Montreal
NATIONAL BANK
OF
Toronto
Alloys, Ind.
Conv. Preferred
Bond
on
Service
Broadway, New York 5, N. Y.
Telephone:
Appraisal of
'
Values
available upon request
and Dealers
ira haupt & co.
Hardy & Co.
Members New York Stock Exchange
Members New York Curb Exchange
30 Broad St.
New York 4
Tel.
Tele. NY 1-733
REctoi* 2-8600
Teletype NY 1-635
CITY OF NEW YORK
Public Service Co.
for Banks, Brokers
.
Members New York Stock Exchange
THE
New England
Brokerage
request
Reynolds & Co.
Bell
N. T.
Bell Teletype NY 1-395 '•
Conv. Preferred
*Prospectus
120
Security Dealert Attn.
WILLIAM ST.,
*Twin Coach Company
,
&
52
Solar Aircraft Company
MARKETS
Gearhart
New York
*Detroit Harvester Co. Com.
SECONDARY
BROKERS
:
Dept. Teletype: NY 1-708
Conv. Preferred
v
MEMBERS NEW YORK STOCK EXCHANGE
•
THE CHASE
Membert
Acme Aluminum
FINANCE
HART SMITH & CO.
>
OF NEW YORK
Albany
CORPORATE
BOND
-.1
Bond Department
t
S5 Broad St., New York4,N.Y.
2-0600
')
>"&;•;v
1927
INVESTMENT SECURITIES
Exchange
and other Exchanges
iil Bonds
R. H. Johnson & Co.
HIRSCH, LILIENTHAL ft CO.
Members
2227)
on page
.
Corp.*
Prospectus
goods-in.
a
chapter on ((A Statistical Evaluation of the
Upon Employment and the Utilization of Our
National Productive Powers" from Dr. Anderson's
J. H. Riddle
forthcoming book
;
a'reexamination of the factors affecting the fu¬
on financial history from 1914 to 1946. Dr. Anderson is Connell Pro¬
ture trend of interest rates.
During the early
part of this year the Treasury frequently stressed the benefits of low fessor of Banking at the University of California, Los Angeles, and
money rates and, together with the Federal Reserve System, followed Consulting Economist of the Capital Research Co., Los Angeles. He
was
formerly Economist of the Chase National Bank. He is a mem¬
policies which forced rates lower and lower.
Rumor had it that the
Treasury would continue to refinance maturities with certificates ber of the Executive Committee of the Economists' National Com¬
mittee on Monetary Policy..at %%, or even
•
lower, and would issue no more long-term bonds.
moods in
Vacuum Concrete
•
export
our
cided with the Dawes
yields
changing
questions in the minds of investors and warrant
*An address by Mr. Riddle before the New
;
*
bond
the
agement Conference, Boston, Mass., Oct. 25, 1946.
Aerovox
she could not
buy
adequate volume.1
Anderson
no
have fore¬
most
we
business
severe
early government longrefunding issue and criticizes Federal freezing
of short-term rates
un¬
reached nearly $34 bil¬
one
the
but decries fear of
Looks for
cheap money policy of 1924 coin¬
Plan, which restored the confidence
holdings into long-term issues and as causing undue of American investors in
Europe and made possible a great
credit expansion.
Analyzes FRB proposals for
placement of foreign bonds in the United States amounting
greater credit controls, and expresses doubts as to
to approximately a billion dollars, most of which came in
their merits.
■"
debt, the
lions.
seen
a
sharp break in early 1924.
Europe could not J sell manufactured
goods to us in adequate volume to pay her
debts and to purchase our
export goods,
If
term
budget and the danger
inflation. The gross national
debt had
measure,
depression.
balanced
of
ucts had had
worried
were
Federal
ary
A
ago
export trade, and par¬
our
bankers
most
about
rates are required by
policy and because there is large amount of idle capital, they will
remain low for an extended period.
Sees possibil-;
ity of still lower interest rates as an anti-inflation¬
■
economic
in 1921 and 1922 had made
grave
ticularly for the export trade in agricul¬
tural products.
The prices of farm prod¬
Vice President, Bankers Trust Company, New York
por¬
We
still
early 1924. The high tariffs which
come
.difficulties for
By J. n. riddle*
its
of
had
Policy
were
our
the money market for the
purpose of mak¬
ing cheap money, and for the purpose of
-reversing the rather sharp business reac¬
over
Europe
the
—
to
Dlgby 4,7800
Members New
and
111
other
York Stock Exchange
Principal Exchanges
Broadway
New York 6
REctor
10 Post Office Sq.
.
2-3100
~
Boston 9
Hancock 37S0
Tele. NY 1-2708
Direct
Private
Wire to
Boston
THE COMMERCIAL &
2202
f [Thursday,1 October 31, 1946
FINANCIAL CHRONICLE
7rr
Trading Markets ins
SmMWfom Highi Are .Prices
Standard 0 & E Com.
*With
counsel analyzes price level to weigh
Investment
than
(3) current prices are very low compared
advance will not
Z
Prospectus
rather than highness or
SECURITIES CORP.
Established
of Labor Statistics
Bureau
The
1920
of foods
up
t
c o n
NY 1-423
BBX.Ii TBLETYPB
r
decline
^
with the post-World War L period;, and h>nce concludes r/
was
artifi
one
^Automatic Fire Alarm
—
i
c
1
a
em¬
as
phasized by
s u
that
fact
the
Kaiser
p p
of
lies
meat immedi¬
^Standard Screw
have, had
we
Members New York Stock Exchange
25 Broad St.,
New Orleans,
Direct wires to
Exchange
Baltimore Stock
Members
Broadway, N.Y. 5
2-4230
120
'
•
d
W.
Emerson
Axe
encountered
American Gas & Power
during the
Birmingham Electric
Some observers, however,
posed.
past
Northern; Indiana P.S,
(Continued on page 2252)
particularly dur¬
Scranton Elec. Com^
%!^;index of the prices of
vance.
compute has been rising
at
Electric Ferries
moderate
a
close of last
& Preferred
the
Sayoy Plaza-3/Gs,
as
the
by!'
many
Cleveland Trust Company
follows:
"We
.Class "A"
7777;;I'
have
York Curb Exchange
easy
on
Street, New York 5
terms
for
almost any
constructive enterprise that
entire shock of market
What
Telephone
COrtlandt 7-4070
'
needs
.
Teletype NY 1-1548
:
credit.
We
"*
:
willingly iv ac
accumulated shortages of many
goods, and large num¬
of eager buyers competing
to
opportunities
.for
"in
Stock
in
4: of their shares,
Raf ter having
Byrndun Corporation
Common
kind"
the retirement
the
buy
¬
payment
cept
kinds of
bers
\/•
Central States Elec.
have
on
rights" theory of a few years
in the unscrambling of utility
holding
companies?, These are
some
of the questions currently
bothering holding company offi¬
cials and security analysts.
ago
That alterations in the
Utilities Assoc.
.Convertible .Stocks
vi,;-:-...
tion
holders
'American Overseas
panies will be necessary under
changed market conditons seems
obvious.
Excluding offerings of
full
Airlines
Wells
Struthers
to
Bought—Sold—Quoted
20 Pine Street, New
NY
Teletype
New
1-1843
120
York
Curb
„
.
BROADWAY, NEW YORK 5
Tel. REctor 2-7815
>
publicly distributed during
months are, as shown
in the accompanying tabulation,
now
selling at
an
average
of
about 17^ % under original of*
of effort
holding ■'companies or
subsidiaries would,
have received some $407/s million
less for their shares at existing
120
expenses,
Commission "revert" to its "bundle
for
placement
levels
blocks
large
Hanover 2-4850
Teletypes—NY 1-1126 & 1127
37 Wall St.,
Bell
sired ends,
N. Y. 5
,
Telephone BArclay 7-0100
>
published Findings and Opin¬
it was not the SEC
but the holding companies and
their
bankers
who disregarded
•
A low
priced speculation—
For Banks,
Keynote
Recordings, Inc.
Manufacturer
of
"bundle
its
ions. Actually,
Teletype NY 1-672
,
to
(Continued on page 2248)
Member
.
WALL
ST.,
NEW
YORK'
TEL. HANOVER 2-9612
A
«
Complete
Brokerage Service
for
COMPANY
Banks aificlDealers
C. L de Willers & Co.
Members New York Security Dealers Assn.
120 Broadway, N. Y. 5, N. Y.
REctor 2-7630
Teletype NY 1-2361
Western Union Leased
Line Stocks
-##7
International Ocean Telegraph Co.
Finch Telecommunications "■
Common
of
Pacific & Atlantic Telegraph Co.
Phonograph Records
Southern & Atlantic Tele. Co.
Stock
Common
Assoc.
;
.
SCRANTON ELECTRIC
Brokers & Dealers
Stock Exchange
Exch.
.
its
NEW YORK 6, N. Y. 7
-i*
.7 *
suggestion that the SEC
•
^
rights" theory bespeaks a lack of
familiarity with the philosophy of
the Commission as expressed in
Members N. Y. Stock Exchange and Other Principal Exchanges
115 BROADWAY
v-'
"revert"
must
Securities Dept.
Goodbody & Co.
5reeuemiGompan^
Y. Security Dealers Assn.
to
But any
Canadian
would have been
accomplish the de¬
levels
sufficient
of
Over-the-Counter Stocks and Bonds.
Members N.
distributions at present
these
Yorlf
Curb
York Co]fee A Sugar Exchange
whethejr the proceeds
therefore,
Dominion of Canada Internal Bonds
It
New
York
New
actually ac¬
is doubtful,
than
them.
to
market
the accumulation
of
or
S* FUNDS for
of
Department
Is maintained
We Maintain Active Markets in U.
Alegre Sugar
FARR & CO.
Members
their operating
crued
*
NEW YORK 0
HAnover 2-9470
Quotations Upon Request
fering 7 prices. >'• Disregarding
bankers' discounts and incidental
..Our
''Special Situations''
Punta
New
market
<••%'■■■■
'
Haytian Corp.
Will the Securities and Exchange
Exchange
York Curb Exchange
Members New
64 WALL ST.
Teletype NY 1-1140
holding com¬
many
ties
After
years
Frank C.Masterson & Co.
work, must pres¬
ent integration plans be revised
to reflect lower market values?
:
•
the past six
and costly legal
Members
^- Neio York Stock Exchange
ar-
the
year?
Ernest R. Abrams
McpONNELL&fo.
WHitehall 3-1223
Telephone:
Bell
York 5
Commodore Hotel, Inc.
stocks'of 13 operating utili¬
mon
rearages
in
plans of
less than 100,000 shares, the com¬
and
dividend
earlier
H. G. BRUNS & CO.
in
call
prices
.
re¬
cover
both
Stock
Common
cash
ceive
,
integra¬
preferred
Eastern
(Va.j
Aspinook Corp.
public
of
other
seen
,
Common Stock
now£-
holders
<
Brook Water
.
Wilt* preferred stock-*
utility holding company integration plans?
great
have
com-
declines;
effect will recent stock market declines
1-1010
Scranton Spring
committed to program of selling assets and retirement
preferred claims in cash, common stockholders will haye to bear
of
.
Bell 8ystem
holding
NY1
York 4, N. Y.
v
;\ panies are
productive
great
System Teletype
e New
plans will have to be. re vised L
instances, present integration
reflect lower market values. Holds in cases where
to
capacity. We have more work¬
ers employed than ever before.
There is ample credit available
Vanderhoef & Robinson
Members New
Leonard
Bulletin"
of the
1956
Savoy Plaza '
31 Nassau
late
Ayres in his "Business
marized
Preferred
WHitehall 4-8120
50 Broadway
panies will be necessary under the changed market conditions,
Reviews opinions of SEC with reference to "bundle of rights
theory" in allotting values and in distributing assets to senior and
subordinate securities of holding companies and concludes that in
February.
paradox of the present sit¬
uation has been very well sum¬
->
Members New York Curb Exchange
Author Holds alterations'jnintegration plana of many holding com¬
The
Rogers Peet
Common &
Members New York Stock Exchange
Bell
steadily
since
pace
Edward JL Pureed & Co.
By ERNEST R ABRAMS
I
which
commodities
industrial
Common
Marked
Company Integration Plans
con¬
:
South Carolina Elec. Gas
Stock
tinued7 to ad¬
NY 1-1227
Teletype
but
1 ine
instead
V
WOrth
Bell
e c
branch offices
oar
.
com¬
flection of this
NY 1-1557
.
La.-Birmingham, Ala.
a
modity groups
Mitclicll & Company
New York 4, N. Y.'
HAnover 2-8700
*
has
no re¬
Request
on
Steiner,Rouse&Co.
is no question that the labor dif¬
collapse of1 ficulties are an important deter¬
/ security prices."
/ ! rent to full business expansion, but
it is to be, expected that Congress
Prices versus Demand
will revise labor legislation and
The difficulties which business that some restraints will be im¬
that
year, and more
showed
I
Bought—$ old—Quoted
pects for profits pre so dubious
following it.
Other
7^;7.v{vNy(:^
;>
wholesale commodity price index dropped rather sharply between
ately dried up
Request
**
'"'J'
Analysis
things they want. It is prepos¬ ing the past two quarters, are
terous that under this combi-: chiefly a matter of price controls,
nation of conditions the pros-' strikes and labor efficiency. There
the
consequently
an
*Memorandum on
.
ols on^>
and
meat
May, McEwen &
V
:V 7"
entirely as a result of the decline in the'price
the' middle of September which has continued
The decline in foods and farm products was the result of the reimposition of
time.
to the present
Rockwell 77
Manufacturing Co.
(1) prices since 1939 have risen less in U. S.
materials are appreciably below world prices;
August and the middle of September,
and farm products.. A recovery set in around
the third"week in
Dealers Assn.
4at'l Ass'n of Securities Dealers, Inc.
tO Bxchango PI.. N.Y. 5 HA 2-2778
Members N. Y. Security
.
.
choke demand. Holds that disequilibrium between prices,
lowness of the composite level, is harmful, ; '
further moderate price
KING & KING
..7 f^V;-y7
justification for prevalent fear that higher prices will
and curtail business. Holds that
abroad; (2) prices of important individual raw
check consumption
Higgins, Inc*
,
: •; ;• •- - ' ;•%
.
Expreso Aereo
Taca Airways*
*
7 By EMERSON w. AXE
i;
Drug Products*
Trading Market
BOUGHT—SOLD—QUOTED
Empire & Eay States Teleg. Co.
Currently selling around 2%
•Prospectus
on
Request
Simons, Linburn & Co.
Members
New
25 Broad St.,
York
Stock
Member New
Tele. NY 1-2908
J-G-White 8 Company
INCORPORATED
.
York Security Dealers Association
74 Trinity Place, New
Exchange
New York 4, N. Y.
HAnover 2-4771
bought
Troster, Currie & Summers
37 WALL
York 6, N. Y.
,
-
n ••••.*•
•••••!
11'
,
ir
-A"
->.V.
.
i.
.!
i- i
■
*-
.■
i- f.
J
;J
1-
i
Tele. NY 1-1815
2-9300
J
»•
•
i
<
.
' >• f
' '
•
quoted
INC.
New York
30 Broad St.
ESTABLISHED 1890
Tel. HAnoyer
sold
Arnhold and S. Bleichroeder
NEW YORK 5
STREET
"
Telephone HAnover 2-2400
7,
Teletype 1-376-377-378
Private Wires to
Buffalo—Cleveland—Detroit—Pittsburgh—St. Loals
-
WHitehall
3-9200
'f. i
Teletype
NY
1-51
^
COMMERCIAL & FINANCIAL CHRONICLE
Volume 164 "- Number 4538
Articles and
Diagnosing the Dip
News
•—-Benjamin Hi Anderson
Jill
Inflationary .Forces and' Federal" Reserve Board
'•''
*
| Market analyst ascribes drastic stock market break
to public's de¬
layed and exaggerated reaction to reconversion troubles. Predicts
'rise when public comprehends favorable
position of many indus¬
tries, coupled with underlying inflationary stimula. ' He lists diver¬
'
.2--^i--Cover ££
Eccles
AND COMPANY
Senior Partner, Benjamin, Hill & Co.
Cover
~
iviarriner S.
Lichtokiii
"
>■ By MAURICE S. BENJAMIN
Has New Deal Planning Been A Success?
/
i
Interest Rates and Federal Reserve Policy—J. H. Riddle Cover
'
How Align Are Prices?—Emerson W. Axe
2202"':—
Stock Market Break and Holding Company Integration 1
•'
Plans—-Ernest K. Abrams J
il..-—2202
MONROE HAD
A DOCTRINE
first U. S. reference
—perhaps the
-
gent
Diagnosing the /Dip—-Maurice S. Ben jamin.-.C-—- ^-2203
Margin Trading Prohibition and Disorderly Markets
r-
f;:„WWymond Cabell
Slump
-.-——2204
—2204
Ahead!—Stacy May
Postwar
of
itoie
mistness
b.
inventories—u.
Murray
■
Banns and
five years.
tions
y
Wiiiiama____—
bonds—Kusseil T.
W.
——™
Averell Harriman
What Future- for bank
-
,
~
.™™..
Settlements'
international
of
f
* "
.
;
/
|
Two Conceptions of the IntT Monetary Fund—Paul Bareau
Common
The
and
Sense
Progress-^-J; Penfield
Road to Abundance—-Dr.
Turn.- Right1.-—-William Hurd
Zay "Jeffries
—
—
Bureaucracy; A National Menace—-Senator Wherry——-.-2213,v
Dept.
Justice
oi
rinus
The battle of
50%-60%
s
li.l
the
Telephone: WHitehall 4-6551
of
*
were
stock
this
after the
came
market
REAL
break
Distribution—A
.
SECURITIES
first year follow¬
GOLDWATER, FRANK & 0GDEN
39
_
and
industries
aheadj,
.
r -. *>_.f , - Maurice S. Benjamin
pros-
.
fear
<.
:
y
pects;
This
is
widespread
electric
" power
Jay immediate 1 y
well as the recon¬
as
struction - necessitated by the war.
Now again, the growth situations
are
numerous,
investors, and economists
among them
Broadway, New York, N. Y.
HAiiover 2-8970
Caffrey's Red Herring Plan 2203
British
Proposals for International Full Employment-—-2206
British Official Calls on U. S. to Increase Imports
'
Gaitskell *
—Hugh
—
5
Underwriters
Sees Trend Toward Better Business Halted
—George E. Price, Jr.
Advocates End
of Closed
Shop
Philip Murray Predicts Another Steel Wage Demand
New Deal in Railroad Management Demanded
?
—~E., E. Rogers
Js
2209
Annual Convention! Dec.
——
Anglo-Swiss-Monetary
The
———2219.
P—6———
Leonard P. Ayres Is Dead'
Agreement —;
—2219:
;—————2264«-.,
—
Regular Features
bank
Insurance
and
Get
Can't
"Britain
'/ —Paul
Stocks
Boek&helf
Securities
Canadian
2205
—2211
2264
2220
Items
.
Man's
Business
'j——
2210
Recommendations
Funds
Mutual
NSTA
Notes
2218
2211
—2205
—
—
Observations—A
Wilfred
Governments U-282t
on
Reporter's
Real
Securities
Estate
;_2214
Securities
May
Salesman's
Securities
Now
Tomotrow's
Whyte
in
had
be
(Walter
The
f
.'¥
z,
COMMERCIAL and
FINANCIAL CHRONICLE
I*
Reg, U. 8.
t**
"WILLIAM B. DANA
Patent Office
f 1 <»
COMPANY, Publishers
25 Park Place, New
-
York 8, N. Y.
York, N.
*1879.
SEIBERT,
President
Every
vertising
Thursday (general news and ad¬
issue) and every Monday (com-
i
i»lete statistical issue — market quotation
arecords, corporation news, bank clearings,
<«tate and city news, etc.)
Other Offices: 135 S. La Salle St., Chi-
;
of
March
I
f
in
$26.00
Dominion
of
Canada,
Other Countries, $33.00
\ Other
Bank
and
Monthly
question, we- shall
to print such other com¬
be
raie
oi
made
ary
25,
1942,
per
$29.00
"per
year;
the
post
office
per
Bond & Mtge. Guar. Co.
N. Y. Title & Mtge. Co.
Mr.
red-herring prospectus
Caffrey suggests the
might conceivably
industry
use
;
O&y.
provide.
It has taken the SEC 21
days to get out its deficiency let¬
ter.
In such an instance, distri¬
bution of a red-herring prospectus
of any type within" the 20-day
(Continued on page 2216)
Hi MalU Wto.
Members New York Security Dealers Assn.
WOrtfc 2-0300
no Broadway
Bell System
Teletype NY 1-84
Haytian Corporation
Punta
Alegre Sugar
Eastern
Quotation
We
interested in
are
.$ugar. Assoc.
Lea Fabrics
offerings of
U. S. Sugar
Record—Monthly,
High Grade Public Utility and Industrial
(Foreign postage extra.)
Earnings
Record —
Mnnr.hiy.
Commodore Hotel
^Fidelity Electric Co.
PREFERRED STOCKS
(Foreign postage extra.)
remittances
exenange,
in
New
York
lor
Class A Common Stock
Susquehanna Mills
for¬
'sy
Spencer Trask & Co.
funds.
25
York Stock
New
Broad
Tel.:
Exchange
Members New York 'Curb Exchange
Street, New York 4
135 S. L>a Salle St., Chicago 3
Tel.: Andover 4690
HAnover 2-4300
Teletype—NY 1-5Glens Falls
Boston
Albany
-i
"
request
on
DUNNE & CO.
Members New York
Security Dealers Assn.
25 Broad St., New York 4, N. Y.
,
v^i^heneetady
*Prospectus
:Worcester
WHitehall 3-0272—Teletype NY 1-958
Vy-y^y private
Wire to Boston
Newburger, Loeb & Co.
York Stock Exchange
WHitehall 4-6330
Macfadden
Publications, Inc.
J. P. Stevens & Co., Inc.
Oneida, Ltd.
1
'.y-v
»
-
vy;y.:^ryy'-y:{5?
■
STRAUSSBROS.
Members
N.
Y.
Security
Broadway
CHICAGO 4
..
.
City—Los
"
t
*
;
-74
HoixRsse^Trsster
Angeles
-
Analysis
-
-
upon
Request
C. E. Unterberg & Co.
Members
Trinity Place, New York 6, N. Y.
Issues
& Trust Co.
f,Xy~
J
'•
Established 1914
Teletype CO 12»
York—Chicago—St. Louis
Kansas
5.'*'
Harrison 2075
.
Direct Wire Service
New
•'
Assn
Board of Trade Bldg.
NEW YORK 4
Teletype NY 1-832. 834
Dealers
J,:'
All
♦Public National Bank
Bought—Sold—Quoted.
DIgby 4-8640
new-type
Mohawk Rubber
32
Prudence Co.
St, N.Y. 5
any?
practically nulli¬
" advantage
which
the
Latrobe Elec. StL
Lawyers Mortgage Co.
Lawyers Title & Guar. Co.
Bell Teletype NY 1-2033
Products
•
ter of comment
at New
CERTIFICATES
15 Broad
wish
Shops
Laclede-Christy Clay
year.
-
Crowell-Collier
TITLE COMPANY
Members New
may
All communica-
National Shirt
year.
Publications A
Macfadden Pubs.
second-class matter Febru-
at
Thidkol Corp.
present, Mr.
is
not
very
S.
Members
,
as
underwriters
as
to forward to us.
eign subscriptions and advertisements must
Copyright .1946 by William B. Dana
<;
Company ;
r:A ■ ./ Reentered
in the general dis¬
TRADING MARKETS
Note—On account of the fluctuations in
the
</o Edwards & Smith.
t
at
$25.00 per year.
3, 111.
(Telephone: State 0613); I
Drapers' Gardons, London, E. C., England,
.
stands
Chicago
.
ieago
1
the
Reilly & Co., inc.
New York
of
Union,
$25.00 per year.
Thursday, October 31, 1946
Act
Pan-American
WILLIAM D. RIGGS, Business Manager
*
f
DANA
the
Subscription Rates
REctor 2-9570 to 9576
,
dSERBERT D. SEIBERT, Editor & Publisher
WILLIAM
under
the
cussion of the
Subscriptions
in
United
States,
U.
Possessions, Territories
and Members
j
,
y.,
from
To aid
icle.",
—2254
ment
Published Twice Weekly
it
which
be glad
K
to how
J. F.
and
as
following
opinions advanced to the "Chron¬
2222
Says)
as
own
■itiiPllS
Comment No. 7
As
fies
can
Registration >.2250
Markets
short step," and,"
a
2212
Corner
The
Commercial
Chronicle,
25
Place, New York 8, N. Y,
•
i
addressed to the
Editor,
Caffrey's proposal
another practical;
The mere fact that it
put it,
"but it doesn't go far generally takes 16 days or more
for the SEC to get out its first let¬
enough."
The underwriters have
lis
Longine-Wittnauer
Financial
what is in the underwriters' minds
Security Offerings __22G3
Utility Securities
L
2208
Railroad
tions should be
red-herring prospectus should be
handled.
Some
conception
of
Prospective
Public
studied replies
the leading houses
industry.
f
The ' general -/reaction to Mr.
Caffrey's proposal^'is, > in the very
words of many underwriters, that
("it is a step in the right direc¬
tion," but, as one of them said, "it
ideas of their
_2263
Report
securities
Investment
Dealer-Broker
Our Reporter
Our
Einzig
Personnel
Broker-Dealer
—;_221G
It"
with
covered
from many of
at least in the
I&
.Explains Excess Profits Tax Settlements—Peter Guy Evans 2217
SEC Orders NASD to Admit Firm
2218
investment Bankers Association to Hold Thirty-Fifth, •
—
known to be responding to the appeal of James
heading of Proposed Rule 131 regarding the possible
methods which may be used to secure the widest possible distribution
of .the red-herring prospectus in new
security offerings, It is likely
that by now Mr. Caffrey's desk<S>-
.—^——--^--.--^—2214 "
——•—
are
rated under the
~
2209
„"
Assn.
Bought—Sold—Quoted,
Proposals Don't Go Far Enough
J. Caffrey, new Chairman of the Securities* and Exchange Commisision; for a statement of opinion on the suggestions he has incorpo¬
NYSE Governors.to Act on Permissive Incorporation
Next Week
——————-2208
Senator Ball
.
I
2207
1
End Impasse with NYSE—---2207
Union Suggests Method to
Tell "Chronicle" Commission's
-2207
-
York Security Dealers
New
National Assn. of Security Dealers, Ino.
radar, television,
(Continued on page 2247)
Calfrey's Red-Herring Plan
Conference Making Rapid Progress. .2205
International Trade
Member of
v.,
being
jet
electronics,
Underwriters^ Encouraged by
——.2219
Underwriters Encouraged by
Teletype NY 1-1203
'
General Machinery
Key to Full Employment
E. Taylor
—Amos
ESTATE
mobile;
t;.? besides
shrinkage■!
:
security
values, is - the '
panic psychol¬
2217
2217
—
Specialists in
ing World War I foretell the big¬
gest industrial boom in the his¬
tory of- this country?
Obviously
not.
The expansion of the auto¬
of
ness
-
Free Enterprise and Anti-Trust Laws
—Attorney General Ciark
Advertising—Roger W. Babson
securities.
WALL STREET, NEW YORK
99
insure bad business? Did the sim¬
ilar stock market situation which
among
-2215
Industry—Lt. Col. Ralph Strassman
Does
■*
d'e str oy e d.
The y| bad * re-
i
..2215
Future of Textile Decontrol—John D, Small
situa-
where
ing future bus-
2214
2215
Are Violating Anti-Trust Daws—-Edmour Germain;
Status of Savings Bond Program—Secretary Snyder
obsolete
for
depression.
ogy^ vconcerh-t
Lunicuit to Prove Uiiderwriiers
it
tions
^.-„2212
—2213
~;
Speaks''—-Donald M. Nelson
EBusiness
-
Seiberlihg —^-2211
..'--1-2212-.'.
Hilly er 1—
Way." We
doctrine—to pay you the
a
prices
nearly all lending support to
it, so that the | public is made
thoroughly aware of the predicted
y were
values
Richberg__2209
2210
Collective bargaining With A Club—Donald R.
best
American
are
25%)
critical
Bratter ——2209.
Herbert' M.
was the severest in nearly
break remained in close propor¬
average
rec¬
there
^----.-2208;^-
.
past
/
mately
..-.—2208
Cripps
i
—
Our Economic Responsibilities In the World Today
"South
also have
those
.
IWriiauunai Regulations of World Trade
Stafford
of
Although the
to
ords (approxi¬
Uegal Aspects of Bretton Woods Agreement—Charles Taft 2207
—Sir
The recent decline in the stock market
•
,..k;
-2206
Uovernment
the
to
Obsolete Securities Dept.
wiison—
Shields
mar¬
ket's decline since last February, and predicts (hat similar selec¬
tivity will dominate the coming bull market.
~
Prosperity—We Can Have It If We Want It
•
performances of representative issues during the general
y;
Telephone:?;,
^.
Teletypes:
BOwling Green 9-7400
-
NY 1-375 & NY 1-2751
\
N.
Y.
Security
61 Broadway, New
Dealers
Ass'n
York 6, N. Y.
Telephone BOwling Green 9-3565
Teletype NY 1-1666
THE COMMERCIAL & FINANCIAL CHRONICLE
Thursday, October 31, 1946
Margin Trading Prohibition
And Disorderly Markets
V
By WYMOND CABELL*
President, Association of Stock Exchange Firms
Partner, Branch, Cabell & Co., Richmond, Va.
Mr. Cabell
scores
orderliness
and
". '
,
prohibition of margin trading as causing market disdiscriminating against listed securities.
Contends
restriction
paralyzes
right
arm
of
all
industry.
Air Cargo
which will be
hampered because of investors' in¬
ability to absorb new issues by cash purchases.
Says freezing of debit balances in margin accounts
Art Metal Const.
Amer. Window Glass*
Com.
&
Pfd.
destroys flexibility of investment, and concludes
government interference in flow of capital creates
not only panicky stock markets but also industrial
depression.
In Chicago address, Mr. Cabell calls
a Points to ne d of much new corporate financing,
Automatic Instrument
Barcalo Mfg. Co.*
Cinecolor
,,
securities
Old
industry "the whipping boy" of politi¬
urges all elements in it unite to aid
and to restore our economy to health.
cians, and
Chicago R. I. & Pac.
vestors
Pfd.
Diebold Inc.
In
District Theatrest
Cabell
September
the
stock
market
collapsed.
Larger declines occurred in the value of
'
secur¬
ities
Wymond
which
changed hands than at
Douglas Shoe*
relation
in
to
number of shares
the
other time in the history of the organized
any
4 *An address by Mr. Cabell before the San Francisco Stock Ex¬
change, San Francisco, Cal., Oct. 28, 1946, and part of another address
before Chicago Association, of Stock Exchange Firms, Chicago, 111
Oct. 24, 1946.
(Continued on page 2238) J
Expreso Aereo
Gt. Amer. Industries :
Hartford-Empire Co.*
Higgins Inc.
Jack & Heintz
Slump Ahead!
Lanova*
Former Director,
Mr. May
,
^
Mohawk Rubber*
,
N.Y. New Hav. & Hart f
Old
Pfd.
4;
Purolator Prod.*
Planning and Statistics Div., War Production Board
facing
we are
Despite
•
At
a
are relied on for
recession, but of smaller magnitude
current favorable elements, he
re¬
directions, one<^
must vbe bold that adds
to
Tenn. Products
the
point
of
rec
kless-
to
ness
even
attempt
reading
of
them.-
Upson Corp.*
U. S. Air Conditioning
is
then,
United Drill & Tool "B"
a
It
wonder
small
that
most commen¬
tators
Vacuum Concrete
their
Alabama Mills*
the
on
subject,
and
number
the
hand and deflation
one
on
procedure is relatively
prophet—he always
can
point,? retroactively, to that
part of his warning which has
been
proved to -be appropriate.
But it is not very helpful to his
readers.
In fact, the attempt to
ride dual positions can be posi¬
tively dangerous when, as was
(Continued on page 2222)
legion,
re¬
double-
of
talk
May
or
"gob¬
ble-de-gook,"
*An address by
Textile
Mr. May before
Institute,
New
York City, Oct. 23, 1946. ^
American Hardware
Pfaudler Company
Republic Natural Gas Co.
Cen. Pub.
Utility 5%s, 52
Southeastern Corp.
*
-
Prospectus available
on
TProspectus Upon Request
or
Circular upon
ending of the
<
war were:
(1) Settlement
the
essentially'the filling of
production pipelines and the
stocking up of newly produced
goods.
Manufacturers in particu¬
lar had to fill large deficits in
fnany, types of civilian ipvpptories
and the demand for goods stem¬
ming from this source was a sig¬
upon
contract
ter¬
-
produc
of
civil
finisheu
p
%&5hv
-
nificant factor in the level of and
*
character of industrial output dur¬
.JfolMr
\
H
ing the past
The
min-
a
a'*-
year.
inventory accumulation has
been large throughout the transi¬
'
tion,
goods
-were
d
Members TV. Y. Stock Exchange and Other Principal Exchanges
Broadway, New York
105 West Adams St., Chicago
Telephone BArclay 7-0100
Bulletin
peak
Hi—US.
and the
recent acceleration
(Continued
on page
2242)
'
unavailable
Goodbody & Co.
115
new
important immediate problems which many
goods
new
r
*
more
imum stock of
Request
a
fleeted
which
Southwest Natural Gas
•
of the
goods, and (3)
accumulating
Spec. Part.
Standard Gas Elec.
Three
for and dispo¬
sal
of
"war"
ian
Quoted
at
low and manufacturers'; supplies are
are
business firms faced with the
at least
Bought - Sold
are
Says buying for inventory
accumulation cannot go on indefinitely, and stability depends on
whether sales will increase and consumers' demands expand to
offset deflationary effects of reduced inventory buying.: '
tion
*United Printers & Pub.
war
deficient in many important respects.
the
Buda Co.
of
however,, composition .of inventories is unbalanced,
out,
since distributors' stocks
pipelines
*Crowell-Collier Pub.
Art Metals Construction
,
not yet excessive, in view of high rate of sales.
are
minations; (2)
filling the
American Gas & Pow.
Derby Gas & Elec.
New England P. S. Com.
Pnget S'nd P. & L. Com.
Points
the
Cotton
:
and
a
for
* '
tories have increased since end
the
level, they
Such
Economics, Dept. of Commerce
although business inven¬
other.
safe
Business
of
Commerce Department analyst notes that
to a warning that we
must be prepared for inflation on
sort to a form
Aspinook Corp.*
Cent States Elec., Com.
By D. STEVENS WILSON*
Office
up
~
is
Stacy
Business Inventories
business forecasts, so conspicuously point in diverse
Taylor-Wharton*
Wrnts/& Pfd.
a
some
time when the available indices, of the sort that generally
Richardson Co.
Textron
,'
gards following destructive notes as controlling: (1) Decline in
commodity markets; (2) Slackening of consumer appetite for soft
goods and luxury items, which has provided main support
boom; (3) Fading of housing demand; (4) Work stoppages
through strikes; (5) Limitation of markets through cost rigidities;
and (6) Delay in dismantling government controls.
Fears we lack |
collective wisdom to solve our immediate problems.
Missouri Pac.
,:'i.
holds
than 1920-'21.
Michigan Chemical
'
•
Director of Economic Intelligence, RCA International Division
Majestic Radio & Tel.
Mastic Asphalt
Old Pfd.-
BySTACY MAY*'
^
U r
i
n
t h e
g
war.
Dr. D. S. Wilson
f
•,
The
-
'
•
♦Reprinted
.
i
inventory trend since the
end of the
war
in manufacturing,
Teletype NY 1-672
request
retailing and wholesaling have re¬
from
the
October
issue of "Current Business," pub¬
lished by the United States De¬
partment of Commerce, Washing¬
ton, D. C.
ACTIVE MARKETS ss====
Ward & Co.
V
EST.
1926
^District Theatres
.Members N. V. Security Dealers Assn.
120 BROADWAY, N. Y. 5
REctor 28700
N.Y. 1-1286-1287-1288
Direct Wires To
Chicago, Phlla. & Los Angeles
ENTERPRISE PHONES
Hartf'd 6111
Buff, mi
Bos.2100
moving
*The FR Corporation I) ?Hungerford Plastics
^Stratford Pen
*
U. S. Finishing Com. &
LeRoi Company
.
New
York
.
.
■
•
' -v.:.
■
,■
J. P. Stevens
Pfd.
•
•
.-i
•
Glenmore Distilleries
^Prospectus on request
Prospectus Available
FIRST COLONY CORPORATION
Members
Soya Corp.
•
Aeronca Aircraft
^Princess Vogue Shops *Metal Forming Corp.
*Loew Drug Co., Inc.
Corp.
♦Capital Records
J.K.Rice,Jr.&Co.
Security Dealers Association
VakI>
K
U
Established 1908
V
Members
N.
REctor
Bell
Y.
Security
2-4500—120
Dealers Assn.
Broadway
System Teletype N. Y. 1-714
SIEGEL & CO.
89 Broadway, N. Y. 6
DIgby 4-2879
Teletype NY 1-1942
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4538
Volume 164
2205
Kebbon, McCormick Add
International Trade Conference
(Special to The Financial Chronicle)
(n't*,**,.
if1 V»v
V
CHICAGO, ' ILL.
Harvey
—
Hawkins Orndorff has been added
to
;
American
zation.
policy
silver viewed
on
•
•
-
,
UN Is Big Business
.•
South
Salle
La
,
-f1.-
■
-'v
'
'
•
-1'
•
-
i—MM—wn
The Public's Reaction
—
McCorf
Kebbon,
Co., 231
|
With Riter in Chicago
Perhaps the public's "complacency" over the General Assembly's
session, concerning which high UN officials are recurrently com¬
(Special to The Financial Chronicle)
7'
plaining, is primarily founded on the American public's indifference
CHICAGO, ILL. — William M.
to institutions as compared with personalities. But the intensifica¬
Brennan and Sherwin C. Thieie
tion of public apathy, ranging even to hostility, is avoidable. To this
are with Riter &
Co., 134 South
writer it reflects a bad "public relations job" by the Organization
La Salle Street.
in
repeatedly highlighting the bigness of its
:
'"7 ■
proceedings, expenses and physical requirements;
and in its general fanfare. This is particularly so
when its pageantry is coupled with the past and
present publicity about its dramatic disagree¬
|
,
>.'
ments
LONDON, ENGLAND, Oct. 30—Commenting to the "Chronicle"
regarding preparatory trade discussions here, Clair Wilcox, head of
and failures.
'
•
Public criticism has stemmed from the demands
for
site, initially set at forty square miles—
greatly exceeding the spacious Geneva territory
to project of writing the constitution
"occupied by the League of Nations—and now
the
Interna¬ of an International Trade Organ¬
centering about New York City's offer of Flush¬
tional
Trade ization is already well advanced."
ing Meadows entailing a building cost of $65
Two main issues confront the
and Employ¬
millions. Probably more than the officials real¬
ment
Confer¬ conference: The demands of in¬
ize, the public has been looking askance at the
ence
and di¬ dustrially
young
countries ; for
seemingly.r duplicate expenses arising from the;
rector
of the freedom to protect infant indus¬
temporary status of the space arrangements fol¬
State Depart¬ tries and secondly, agreement on
lowed thus far. For exampler Secretary-General
ment's Office the definition of a transition pe¬
A. Wilfred May
Lie has just disclosed plans for constructing an
o f
Interna¬ riod during which member coun¬
office building to implement the temporary head¬
tional Trade tries may retain quantitative im¬
quarters at Lake Success—at a cost not less than $5,000,000. This new
Policy, said: port controls. The former is much
construction will be additional to 100,000 square feet of other office
"The
Confer- on the mind of India, Australia,
space now being converted at Lake Success, and to two offices plus
e n c e
has New
Zealand, China, Lebanon,
64,000 square feet in the Empire State Building in New York City, all
made
Latin
more
Americas, France and
being used* by the Secretariat.
* •
'
rapid progress Czechoslovakia. Underlying these
In addition to the construction requirements for the Secretariat,
Clair Wilcox
than
we
had questions is the general awareness
much publicity has been given to the accommodations and service
'
any
right
to of instability of any organization
being provided for the 2500 individuals composing the delegations,
expect before it convened. built
upon
the permanent eco¬
their staffs and secretariats, the foreign press,' radio, and film cor¬
There are some
difficult prob¬ nomic stability in America and
lems still
awaiting solution, the wish for an American com¬ respondents. As a harassed public sees it, they are lifting 1600 hotel
rooms out. of an already sorely-crowded city.
but the
*
>
atmosphere in this mitment to buy heavily abroad or
The transportation facilities likewise are on a grand scale. In the
third week of the
meeting is one invest abroad in slack times.
first place, constant shuttle services have to be provided between
of cordial
cooperation, and the
(Continued on page 2250)
Flushing Meadows and Lake Success which houses the Secretariat.
Additionally there is a large car pool Jo handle local transportation.
100 U. S. Navy and 150 U. S. Army cars and drivers from all over
the United States are being used, the expense being borne by UN.
American®*-
the
of
'
By Special Cable to the "Chronicle"
;;
&
f-
hastening its demoneti¬
as
staff
Street.
-
preference for subsidies in lieu of tariffs and quotas.
Our lend-lease
micfc
=By A. WILFRED MAY=
Wilcox, head of American delegation, reports Conference's
surprising success to the "Chronicle." Two main issues confront¬
ing conferees are: (a) demands of industrially young countries to
protect infant industries; and (b) definition of transition period for
retention of import controls.
British insist American prosperity
and imports are crucial.
Compromise needed between proposal by
Australians for international industrialization commission, and
Clair
the
a
delegation
DOMINION OF CANADA
3% 1955
.
'
•
3%
1960
3%
1966
Abitibi Pr. &
Paper 5s, 1965
Aldred Investment Trust
7
4'/as, 1967'
'
Brown
Company 5s, 1959
Canadian Pac. Ry. 4s, 1949
International Hydro-Electric
'
1944
6s,
International Power Securities
■
,
"Britain Can't Get It"
•'
1
.""'V1,
v (Continued
on page
2252)
By PAUL EINZIG
products
are
still unavailable to domestic
consumers,
and
ex¬
-?
turnstiles
and Albert
the
ret
was
oasis.
lively cele¬
more
bration of the
Even
so,
many
people
are
clined
to
lieve
in¬
be¬
that
was
a
psychological
on
the part
of
the
govern¬
ment
to
have
this
arranged
1
exhibition
at
this stage. For
;
the
reactions
British
on
opinion
are
anything but favorable from
the government's point of view.
Admittedly,
the
hundreds
the
of
thousands
of visitors thoroughly
the sight of goods which
have long ceased to be visible in
•the
shop windows. Amidst the
ioration
war
ized
and
that
——
all-round
characterizes
Museum
is indeed
an
It is
gratifying to see once
goods that are not shoddy
war
considerable
some
provements
Rutland
Denver & Rio Grande West.
St.
Louis-San Francisco
Duluth, So. Shore & Atlantic
St.
Louis
Railroad/
;
at
Toronto
&
Com.
Ptd.
//.
Jonas & Naumburg
Southwestern
Seaboard Air Line
Missouri Pacific
Sulphur
Lake
Jefferson
,
N. Y., New Haven
Lane; Cotton Mills, Corp.
have
The trouble is that most of the
goods
which
exhibited
are
Street, New York 5, N. Y.
/Sfi
Teletype NY 1-609
WHitehall 4-4970
?•
T. 1. FEIBLEMAN & CO.
Afembers New
70 Pine
S/S
&
Pfd. c' 7
&
Com.
G. A. Saxton & Co., Inc.
im¬
Fruit
Standard
Wisconsin Central
N. Y,t Ontario & Western >/
achieved
been
Western Pacific
& Hartford
New Orleans 12, La.
Carondelet Bldg.
St, '
Broad
41
Exchange
Orleans Stock
York 4. N. Y.
New
Bo. 9-4432
'/•'-•K-/
.
Bell Tel.—NY-1-493
are
utterly unobtainable by the Brit¬
ish
consumer.
it
stances
them
see
told that
country
is
In
circum¬
the
most
tantalizing
to
exhibited, and to be
ordinary mortals in this
Railroad
not likely tQ:bq;able
to buy them for at least a year or
two,
if
the
are
not
show
more.
has
I^i ■'
I
Accordingly,
.
been
V *
vW.' A'*! i/'-L:
V.
*
.
Employees Corp.
-'I-1--!
•<
•
*
«•„<
*
*
ft-■
1
•<:•■•■•■■■,
•'.•
►
- .v-
r
t
*Air Products, Inc. Com.
it
%
*5
r
& WA"
<
*Raytheon Manufacturing Co.;
Analysis Upon Request
$2.40
Conv. Preferred
>•.
•
nicknamed
*Universal
"Britain Can't Get It" Exhibition.
•
»
tf.
*. ». . ... i •• -•
I
Winding Co. Com.
After years of wartime austerity
was
*Prospectus
hoped that various articles
(Continued
on page
2221)
.
State Tower
40 Exchange Place
Bldg.
Reynolds & Exchange
Co.
Members
deter¬
New York
Syracuse 2, N. Y.
5, N. Y.
Stock
York
New
Broadway, New York 5, N.
120
Bought—Sold—Quoted
post¬
request
on
L. JOHNSON & CO.
*
Bell
Y.
REctor 2-8600
Telephone:
London, the skillfully organ¬
exhibition
1-395
Montreal
Galveston Houston
Old Colony Railroad
by civilian industries.
enjoy
shabbiness
IIAnover 2-0980
Teletype NY
New York
Chi., Rock Island & Pacific
quality, and it must give
satisfaction to see that in spite of
it
gross
miscalculation
Einzig
7.7
5»/2s, 1957
wartime
event.
Paul
Steep Rock Iron Mines
7^/77:'-77
Bell
Chi., Milw., St. Paul & Pac.
!
LONDON, ENG.—The "Britain Can Make It" Exhibition enjoys
deserved popularity among the British public and when the
500,000th
visitor crossed——
1957
Preferreds & Commons
.
the
y
IN
iltfite "old"
Says, despite American loan, policy is to
divert goods to export markets and, in view of
inability to satisfy
export demands for years, home markets will suffer.
Sees revival
of pressure to divert more goods to home market.
>,
&
1952
7s,
,
62 WILLIAM ST., N. Y. 5
TRADING MARKETS
hibition is ill-timed.
,
;
•
Shawinigan Water & Power
3s, 1961 & 1971; 3'/2s, 1970
HART SMITE & CO.
observer, calling attention to exhibition in London of goods
British manufacture, called "Britain Can Make It," points out
most
;
1
7
London
of
6'/2s, 1955
International Power Securities
NY 1-635
Teletype:
Victoria
the
R.
Philippine
SSg^C-lilSi
:
Dravo
•'
•'*"
.
Statistical data
**. '".1
vvV"
*'V
'
(RICHMOND CEDAR WORKS)
'•
..."
..7,
Brokers
"7ft
&
Dealers
Investment
Securities
New York 5, N. Y.
Telephone
WHitehall
Teletype
4-2422
Branch
113
Hudson
,
-
NY
1-2613
H. D. Knox & Co., Inc.
Broadway, N. T. 4
Tel.
Tele. NT 1-86
—
•'
''
* "
;;H777 77
-S'
t
Sold —Quoted
.
;.
'•
Tele. BS 169
N.
Y.
'
J
4J.
• •
7
r
;
7;;. ;
r."_
I
*'
i
5
\
r'\
'
"7
'■
'-7.' V'"- v
7
Wall
Street,
New
1888
SECURITY DEALERS
1926
83
:•
Securities
MICHAEL HEANEY, Mgr.
WALTER
KANE, Asst. Mgr.
Joseph McManus & Co.
Members
Established
MEMBERS
Established
•
Bought
Tel. Capitol 8950
7"
'
FREDERIC H. HATCH & CO., INC.
27 State St., Boston -9
DIgby 4-1388
.
* Prospectus on request
Office
St., Jersey City, N. J.
■'
/
II
Common
-■
•
MAHER & HULSEBOSCH
'•.
American Maize ProdfCo.
upon request
-
Curb and Unlisted
"•
Mining Issues
62 William St.
Corp/
York 5, N. Y.
New
Chicago
ASSOCIATION
Bell Teletype NY 1-897
39 Broadway
Digby 4-3122
York Curb Exchange
Stock Exchange
New York 6
Teletype NY 1-1610
2206
THE COMMERCIAL & FINANCIAL CHRONICLE
Thursday, October 31, 1946
BALTIMORE
British Proposals lor
S 2
Full Employment
Bayway Terminal
Davis Coal & Coke
National
►
i
-
•
Preferred
>
,<■•
.
Weight
V'
Members New York & Baltimore Stock
Exchanges and other leading exchanges
United Nations agencies.
Bell Teletype BA <303
r '
New York Telephone REotor 2-3327
London:
The
maintenance
policy
The Parker
of
of tube coup¬
valves
for
the
transmission of hydraulics, has suc¬
cessfully reconverted 'to normal peace
time operation.
tive
At
Outlook for industries
indicates
substantial
earning power.
prospec-"
':® ®.
v
.
current
quotations, common stock
isy available at approximately -one-
in
and
at less
position,, at
of
indicated
than net
share.
per
*■
basic
50%
Circular
available
United
Govern¬
Kingdom.
well be frustrated unless all
major industrial and trad¬
ing nations are likewise maintain¬
ing full employment.
ty's
Government
His Majes¬
therefore
fully
support the proposition that this
subject is one on which inter¬
-
national action is necessary.
It is, moreover, the view of His
Majesty's Government that unless
LOUISVILLE
j
and
j
steps
end the results
reduction
of
hoped for from the
trade
be .fulfilled
not
hold
that
American
Turf
Consider H.
request
the
reduction
to
raising standards
tion
wish,
that
international
therefore,
toy suggest
action
The
to
choice
pro
of
"Operation-Prosperity"
inspiration for
it is
clear
now
that,
NS>-
We
while
this
possesses
c a p
the
icies. Without these
la¬
i t al
we
to
cov
form
of
face
in
great
that
propose
convention
a
we
in which event
fail
employment and the period,® o f
be
takenV if 1 some prosperity, we
countries are unable to maintaih shall not have
full employment cover a range of that :
prosper¬
subjects far more comprehensive ity unless we
than that contemplated for
the do more conInternational Trade Organization; s c i e n t i ous,
careful
if
changes "Op¬
is likely to
eration-Prosperity"
-
a
prosperity
it, but we have to want it
enough to make some long over¬
due changes in our economic pol¬
technical
"know
how"
for
have
can
want
nation
our
we may have
of the greatest crises
one
history.
The choice thus
be between prosperity
well
may
to
and crisis. The greatest
industrial
of the world is threatened
power
not
simply by another depressioh
and
(Continued on page 2235)
t
but by deep-seated economic
y
>:■
Murray
Shields
p r a .c
international
the central theme for
as
the 1946 meeting of the Associated Industries of Massachusetts is an
full
mote
measures
employment
policy which might either take the
Ass'n
-
f/,®;.i bor,
Kingdom. Delega¬ and
United
The
inventory policies; (c) Fix financial programs on a
Jong-term basis in anticipation of higher interest rates; and (d)
Drastically reduce production costs.
of resources,
living;£."&:■■■ ,® T ®",\
and
tica1
«
planning toward that end than
*An address by Mr. Shields be-?
fore the Annual Meeting of the
we
have in the pgst year.
Associated Industries of
Boston, Oct. 24, 1946.
Mass., in
v
:
.
,•
separate convention
(signed at the same time and by
Willett
the
Girdler
They
equally. '
of trade barriers full employment
will not make its maximum con¬
ering
American Air Filter
;
working capital
"!®
will
barriers
without
tribution
-conservative
taken to thi^
are
(4)' A price level higher than prewar,7 Consequently advises
^business to: (a) Re-examine production-programs; (b) Follow
®":1
' yV;y:;®:y
.
Accordingly;
value
PRICED ABOUT 8
-
y;
there should be
approxi¬
book
upon
em¬
other
imprQve-
ment
full
Majesty's
The
third less than original
offering price
in 1940, despite tremendous
mately
of
vital element in the
a
His
in
may
served
-®®®
The objective of maintaining full
employment in any one country
Appliance Company
Mr. Shields expects post-reconversion period to embrace: ;(1)
(Production materially higher than in last decade; (2) Intensified
domestic and foreign competition; (3) Instability in the economy;
*
,
ment
and
y ®
: y/;
„
ployment is
fittings
^
-
Memorandum of United Kingdom^
Delegation
adequate
BOSTON
leading manufacturer
'
By MURRAY SHIELDS*
Economist and Vico-yPresidenL Bank of the Manhattan Company
LONDON, ENG.', Oct. 30.—The following is the text of a memo-!
randurh of the British
delegation to the Preparatory Commission of
the forthcoming International Trade
Organization now meeting in
CALVERT ST., BALTIMORE 2
lings,
V
-
\
j
by British delegation to Preparatory
Commission of. International Trade Organization in London. Holds
full employment is international problem land recommends separate convention
covering employment policy in coordination with
STEIN BROS. & BOYCE
A
,
Text of document submitted
.*•./. r'-;
Noxzema Chemical
« S.
.
®||
•2,A v2::2:A-,v'
We Want It
(By Special Cable to the "Chronicle")
;
.
Sash
Prosperity—We Can Have It II
Corporation
same
of
Murphy^ Chair Company
a
the
countries
Trade
the articles
as
.Organization)^
Banks and Government Bonds
or.
dii
&
Lovett
BOSTON
9, MASS.
N.
Y.
1st
Telephone CAnal 6-8100
Incorporated
\
'
;s
4'.
Insurance
Stocks
Memos
Members
77 Franklin
Boston
Liberty
2,.'Also
Exchange
New
Member
York
1420 Walnut
2340
Providence
New
York, Philadelphia
Los Angeles Stock Exchanges
Street, Boston 10, Mass.
Tel.
Portland
Stock
Curb
of
a
RICHMOND, VIRGINIA
Bell System Teletype:
Private
DES MOINES
Wire System
11
V*iV
volume of new corporate fi¬
nancing and of large Federal def¬
icits, Treasury operations have
the
money
market. While the Federal
Reserve authorities have indicated
deficit
®
has
they
become
a
reduced
dominant factor
now
and
we
in
been
drastically
hope soon to be
ST. LOUIS
between
the
is still confronted
refunding billions
of dollars of maturing obligations.
Both the Treasury and the Federal
RH 83 & 84
Telephone 3-9137
Los Angeles
Treasury
with the task of
the
necessity to change
pattern estab¬
during the war financing.
see
spokane. wash.
no
present
lished
Philadelphia, New York and Los Angeles
rate
You will recall
statements
WHEELOCK & CUMMINS
General Manifold &
offerings
■
-
(Established
of
.
Sole
Municipal
Labor-Saving
509
Capitalization:
90,390
shares
Request
on
EQUITABLE
DES
BUILDING
MOINES
Phone 4-7159
Stock
Telephone
on
on
r -® 2
■
']■' ®
-
-'
CORPORATION
®i
v-
Members
Exchange '
Brokers
-
1
"
Exchange V.
Spokane
Dealers
-
.
-
PH 73
v
for
.
••
'
''
'
*•
'■
•
••
:
Southern
I
'•
®
,
''
"
'( .'
'
Colorado
Power Co.
Utica & Mohawk
Cotton
:
UTAH
Mills, Inc.
MINING
STOCKS
on
request
Common Stocks
Established
Mercier, McDowell
& Dolphyn
Members
Buhl
Detroit
Stock
Exchange
Bldg., Detroit 26
Cadillac 5752
Tele. DE 507
1898
MOHAWK VALLEY
BOENNING & CO.
W.H. CHILD, INC.
Members Salt Lake Stock Exchange
INVESTING COMPANY
BROKERS
INC.
Private
Phone
COrtlandt
to
PH 30
N. Y. C.
7-1202
Stock Exchange Building
Salt Lake City, Utah
Teletype 6U 67
Phone 5-8172
238 Genesee St.
Tel. 4-3195-6-7
that
•<»
the manage¬
national debt, we ex¬
the potentiali¬
controlling inflationary
and
Tele. UT 16
of
interest
securities
at about present levels is, at this
time, essential for the mainten¬
ance
of stability in the govern¬
ment bond market upon which, to
government
considerable
degree,
•?
business
confidence depends.
By issuing securities to meet in¬
needs, it is expected the
vestors
issues,
if
would
there
bring out new
is a speculative
(Continued on page 2251)
*An
Utica 2, N. Y.
repeated his statement
continuance
a
before
address
by
Mr.
Williams
Group 9 of Illinois Bankers
Association, Waterloo, 111., Oct. 24,
1946.
that it is
was
an eye on
for
Treasury
1606 Walnut St., Philadelphia 3
PEnnypacker 5-8200
keeping
a
BOUGHT—SOLD—QUOTED
Circular
request
our
forces. He
:
im¬
people to under¬
He also said that in
rates
TRADING MARKETS
BROKERS and DEALERS
our
important to achieve a substantial
surplus of taxes over expendi¬
tures to apply to debt reduction.
ties
SALT LAKE CITY
MARKETS
New.
interesting to
4, speaking be¬
York
Financial
pect to continue issuing securities
to
meet investors'
needs, while;
_
Kellogg, Idaho and Yakima, Wn.
Oct
One of these
ment of
Underwriters
Building, Spokane
on
portant for
Branches at
Teletype
v
Standard Stock
Convention
cies which he feels it is very
at
STANDARD SECURITIES
Peyton
Bausch & Lomb Optical Co.
Manufacturing Corp.
Report furnished
Sp-82
the
stand.
OFFICE
;
TRADING
request
Shelter
:
-2®
American
the
Writers, he restated certain poli¬
UTICA. N.Y.
Electromaster, Inc.
Prospectus furnished
Time:
that
fore
Floor
11:30
STREET
Members St. Louis Stock
DETROIT
t
Std.
on
10:45.to
other hours.
Exchange Bldg. Phila. 2
RIttenhouse 6-3717
-»
Pac.
from
of
Byllesby & Company
PHILADELPHIA
IOWA
9,
Bell Tele. DM 184
A.M.,
St. Louis 1,Mo#
>
-
".
H. M.
OLIVE
Quotes call TWX Sp-43
Exchange
note
Execution of Orders
common
-
Bulletin
Bonds
j
INVESTMENT SECURITIES
Forms of all Kinds
.■
or
1901)
of
Prodiices
Iowa
Stix & Co.
For Immediate
Secretary Snyder's
at
Association
in Chicago and it is
SECURITIES
Printing Co.
We invite
Bankers
NORTHWEST MINING
INCORPORATED
on
am
low
Pittsburgh, Pa.
Hagerstown, Md.
N. Y. Telephone—WHitehall 3-7253
.
I
range
%% and 2l/z% and prices will
glad to be here today to talk to you on U, S. Government
securities. We are going through a period unprecedented in the his¬
tory of our National Debt.
Dur-«
ing the past 15 years of relatively operating with a balanced budget,
CRAIGIE&CO.
Exchange
,
increase, but Treasury will keep interest
be stable.
•F. W.and
to
government securities between
'
Street, Philadelphia 2
New York
Springfield
SOUTH®
-
"
.
BUCKLEY BROTHERS
Securities
F. L. PUTNAM 4 CO., INC.
Members
NORTH and
continue
®
Request 2.
on
~
issues Be avoided.Holds commercial and real estate loans will
MUNICIPAL BONOS
■■2-2®2
Inactive
Dealers in
Son, Inc.
Industrials-—Utilities
.
-
CAROLINA
Bird &
and
Forecasting continuation of present pattern of interest rates, Mr.
Williams cautions banks that, despite larger commercial lending,
they must continue to hold large volume of government securities
and must keep an eye on liquidity of portfolios rather than higher
income return. Sees no reason, however, why banks should npt
have part of assets in long-term issues, but warns that maturities
of issues should be properly spaced and that speculation in various
,
VIRGINIA—WEST VIRGINIA
Eastern Corporation
i
Secondary Distributions
Bank
specific Articles,
as
RICHMOND, VA.
Bell Tele. LS 186
Northern Indiana Public Serv.
Coverage
-V-
•
•
submit
PHILADELPHIA
New England Markets
New England
We
Floor, Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY
Long Distance 238-9
Retail
the
organization.'
Anpex A draft
(Continued on page 2253)
BANKERS BOND £2-
V'-'.®®®'
® Teletype BS 424
contain
of Agreement of that
the
MILK STREET
HANcock 8200
Asst. Vice-President and Manager, St. Louis Office, C. F. Childs & Co.
and
Pont, Homsey Co.
31
•••<
Grocery-
By RUSSELL T. WILLIAMS*
International Trade Organization,
Winn
form part of .a general convention
which would also establish the
•
.Volume 164
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4538
Legal Aspects of Brellon
!
Woods Agreements
1'
^
,
j
By CHARLES P. TAFT*
Chairman,
.
Sub-Committee
.
Suggests Means
Impasse in
Better Business Halted
NYSE Negotiations
Purchasing; Agents'
under
has
ton Woods
Agreements
status of both
maintains
that, although Fund
United Finan¬
need for revision of state laws
ligations
-
between the two parties for a new
contract to replace the one which
cannot be sued without own con¬
have this immunity.
not
expired
Sees
regarding investments if Bank's ob-
throughout nation, and lauds cooperinterests, government and professional, in advancing
J;;objectives of the new international financial institution's, ^
The
sential
ments
reconstruction
ele¬
the
for
world
foundly affected by" international
exchange and available credit. In¬
ternational exchange may well
depend in the immediate postwar
years upon stabilization loans, as
espe¬
those
well
concerned
with
banks,
P.Taft
companies, in-
-
...
,
.
trustees, and foreign
trade.
..
i». The
restoration
of
the
normal
*A paper read by Mr. Taft be¬
:
fore the meeting of the Corpora¬
tion Banking and Mercantile Law
Section* American' Bar Associa¬
tion
and
•
stabilization
*
will
needed
be
the
is
International
That some progress was made
this last week in the negotiations
two
organizations
(Continued
on
2251)
page
change
need
union
and
the
Ex¬
evident from
the
fact
that the discussions have proceed¬
-
ed
the no-strike clause
Exchange wanted in¬
corporated in the contract to the
subject of wage increases.
on
beyond
the
Another
U. S. to Increase Imports
Hugh Gaitskell, Parliamentary Secretary of the Ministry of Fuel
Power, points out traditional one-sidedness of Anglo-American
trade.
Declares U. S., Britain and the other great
trading countries
must pay for import balances from one
country out of exports io
Co.
development
of
par¬
ticular interest to Wall Street dur¬
ing
the
las
of
take
Akron,
buyers
ally concerned
tion
has ap¬
parently
George E. Price, Jr.
brighter
a
;
"Industrial
to better busin e s s
on
aspect.
that "the trend
of
lieved
been
over
the
commitments.
there
are
is
'
stances;, to date, there is
the general
great
no
>
"Anglo-American trade has for
long been very one sided" began
Mr.Gaitskell. "In 1938
.
"Even
,
before the
so
trade restrictions were
and
war
still appears to be on the increase.
cancel out these commitments will
Employment
accelerate.
is
at
high level,
and further increases in
produc¬
tion volume are limited
only by
the shortage of basic materials and
operating supplies. Retail
sales
are generally continuing at a
high
for
Car
a
have,
The
that
general
opinion is veryindustrial
buyers
or will shortly, scale
ideas on buying too
their
down
much
and too far ahead.
\
shortages
the
;
,
.
'
cases, are so fantastic that pur¬
chases cannot be justified. Buying
at any
price, to keep a plant run¬
ning may be, approaching an end.
due to
the
basic
"Where
raw
materials.
prices
permitted,
.
tice.
ings. OPA continues to give
ground. It is interesting to note
that reports indicate some decon¬
seriously trolled items advance only slight¬
strikes and
the
U.
S.
"In the
past we met this deficit
partly through dividends from in¬
vestments in U.S.A." he
*but
continued,
owing to sales of in¬
now,
vestments
income
early
this
from
than what
we
in
pay
the
war,
our
is
source
less
in dividends to
investors;, in ^ British
American
not live
Gaitskell.
and
visible
to
see
exports
revive.
which
we
us
*
p.m.
was
the
at
ployees
Board
Guild,
will
State
the
conduct
an
no use
pretending that the
on page
-v
*
'
4
t
v
V".«
t
■
J
"
'
.v.-
Kingdom 4s, 1960-90
Bought
'%
Labor
4
Sold
—
'
—
Quoted
',
man
2255); V
p.m.
& Co.
on
Goodbody & Co.
today from 3:30 to 4:30
Members N. Y. Stock Exchange and Other
Principal Exchanges
NEW YORK 6, N. Y.
115 BROADWAY
Teletype NY 1-672
Telephone BArclay 7-0100
the premises of the firm.
hope
sur¬
balance of . payments
Arden Farms
SiiiitYpwa^
±43
A. S.
x=i
SJEHBERC&Co.;
2=
Members NiY. Seewity Dealer*
~
-ManutacturersoftheNationallyKnotvn
-\''z'
i... ■
:
•
-
^ prospectus
on
:
request
•
-
BOUGHT
Telephone: WHitehall 3-7830
—
SOLD
Analysis
F. H. KOLLER & CO., Inc.
'
Street, New York 5
Cainplieli Co., Inc.
-
■
Members N. Y. Security Dealers Ass*n
111
*r
;
-
QUOTED
.
.
.
on
request
New York Hanseatic Corporation.
'
BROADWAY, NEW YORK 6, N. Y. :'
fiArc]ay 7-0570
—
Corp.
\
in all Unlisted Securities for
Banks and Dealers
Company
Metal & Thermil
Ass'ft
) We render 0 brokerage service ;
60 Wall
i.;
'
'y*"'
election
...,
(Continued
-/'
United
Pulitzer
largely attended. At
,
back.
"It is
5
at
',-v
called for last Fri¬
only have
the
maintenance
em¬
borrow, but can also among
ployees of Brown Brothers Harri■ 1
'
\
:
to
■
the request of the Financial Em¬
out of
not
we
•
i
;And finally—most
important—we converted the
plus in vour
need
pay
=
day
forever," said Mr. Building
"It is to help
position when
no
Street banks
difficulties caused by the war,
we
have got to get into a
our
-
business. We also met it from in¬
this
on
BRITISH SECURITIES
Professional Workers of America,
CIO, reported that a meeting of
messengers and
guards of Wall
we imported
nearly six times closed only by increasing Amer¬
ican investments over here*
as much as she imported from us.
Today the discrepancy is even ;; "Today we have, of course, the
greater. : - ■y
j?:%} -v:-i great American loan, but we can¬
from
*
However#> the Financial
Emoloyees Guild, United Office and
transfers difficult,
we Were short of dollars from all
these sources, and the gap was
con¬
tinue to break through OP A ceil¬
by the V State Labor material
shortages are
that, at the. request of ihe
affecting the pay-income of in¬ ly, while some advances granted
Finkn&ar Employees, it
dustrial workers, and a drop in
by OPA are substantial. •
>y;
will peermit argument on the evi¬
buyers' and consumers' demands
"Buyers generally feel that we
dence in the union's case against
is bound to result.
are in the last wave of increases,
Harris, Upham & Co. at 2:30 p.m.
"The profit angle still continue? although there are indications of
Friday,; November 8.
Notices to
another
upward
surge.
If this
this effect will be placed in the to worry many in business. Profits
mail by the State Labor Board to¬ do not appear to be in the per- 04 (Continued on page 2241)
nouncement
numerous
currency
;
Commodity Prices
1
preholiday season.
"While
the > general
trend of
are
beginning to
become very serious. Coal and ore commodity prices continues up¬
min^s are having to curtail opera¬ ward, there is, for the second suc¬
tions because of this shortage, and cessive month, a decrease in the
more
industries will be affected number of reports from industrial
shortly unless the situation- im¬ buyers indicating -higher prices.
There are no reports of lower
proves.
^
®&
prices. ■
V- * f • •
- •
;;
"Reports from many areas indi¬
"Price
advances
appear
more
cate we may be approaching what
conspicuous in the semifabricated
might be termed an industrial and
processed goods field than in
buyers' strike. Prices, in many
"Shutdowns
the. grounds of unfair labor prac¬
when
ex¬
feeling is pessimistic. Neverthe¬ pected, however, that a point has
less, the backlog of unfilled orders been reached where the trend to
LONDON, ENGLAND—Speaking at a lunch given here Oct. 23
by the U. S. Chamber of Commerce, Mr. Hugh Gaitskell, Parliamen¬ day. The union is seeking to have
the results of the. election among
tary Secretary of the Ministry of^
the employees of Harris, Upham
Fuel and Power, made a strong with
certain other countries into &
Co., which it lost, set aside on
plea to the United States to co¬
dollars.
in¬
evidence of cancellations. It is
.
operate in promoting multi-later¬
al trade.
be¬
such
many
j
duplica¬
It
United
employment and national income prerequisites
-
.
gener¬
are
halted and
Board
and
Terms full
the
is
and sound. Many con¬
struggling with the prob¬
cerns are
and Rubber
rate
.
Union's insistence
between
British Official Calls
to multi-lateral trade.
including
Sur¬
Commit¬ lem of cost because of material
tee, headed by scarcities and a lack of proper
George
E. productive co-operation by labor.
Price, Jr., \ "With the return to
production
Purchasin g
of two of the large steel • plants
Agent of the in
Canada, general business con¬
Goodyear Tire ditions there
con¬
the
of
which
others.
"Street"
the
t
These
tion, Atlantic City* N. JV
in
—
vey
-
a
The controversy arose out of the
on considering
the brokerage industry as a moreor-less indivisible whole.
most
depend in large part upon
operation of the Monetary
Fund.
'
>
ber firm.
Thereafter, the continued
stability of exchange relations
the
' /
■
might be thrown in
Exchange by the
striking employees of some mem¬
front
Bank.
will
attractive
which
one
Such loans may be
available in part from private
capital, but the maj or source for
countries where the reconstruct
surance
yestment by
reconstruction
for
centage required to make business
Association's
any
where
Specifically.
Charles
1n
loans
as
report re
leased by the
No¬
time such a member
might get into an argument with
the ■union.' The union, on its part,
has made it equally clear that it
would iiot sign a contract which
would
compel its members to
cross
its own picket line any¬
foreign country
involved, but they also. are pro¬
tions for law-
cially
union
States and in any
They will un¬
doubtedly
have
impor¬
tant implica¬
was
to
Exchange in the embarrassing po¬
sition of being forced to put pres¬
sure
on
any member of the Ex¬
change to do business with the
only on production in the United
peace.
yers,
exchange
of purchasing agents who comprise the Na¬
Purchasing Agents indicates, according to a
of
"
'•..:
tract with the union as meaning¬
less which could, in effect, put the
These two general func¬
tions, which will rapidly be in¬
distinguishable, are dependent not
the
in
^ A composite opinion
tional Association
The Exchange has made it quite
of goods.
organization
of
the
and
deliveries,
making forward commitments.
Business
cfK$
>
;
but
15
extended
clear that it would consider
involves both
trade
of
in
thirty-day notice by either
a
on
party.
national
channels
keeping
or
'
produc-
Holds industrial buyers are
using more caution in
inventories in balance with demand, supply and
is willing now to
cancellation of contract
a
general feeling is pessimistic,
and further increases in
tion volume.
union
permit
The Bretton Woods Agreements for the creation of the Interna¬
tional Bank for Reconstruction and
Development, and of the Inter-
Monetary
Fund, are es¬
survey reports
despite backlog of unfilled orders
vember 15.
to be marketable
are
October
on
automatically
of all
ation
pro¬
Employees which might pos¬
sibly serve as a way out of the
impasse that has been threaten¬
ing to develop in the negotiations
International Monetary Fund and" World Bank, and
sent, the International Bank does
a
cial
Outlines legal
legal profession.
concern
Exchange
consideration
posal made by the
Prominent attorney, after recounting need for international cooper¬
ation in restoration of trade and
business, points out how the Bret-
Sees Trend Toward
To Resolve
The New York Stock
Agreements
American Bar Association
■
.
'
Woods
Brett on
on
Union
2207,
120
;;•
NY 1-1026
Telephone:
BROADWAY, NEW YORK 5, N. Y.
BArclay 7-B660
Teletype! NY 1-E83
:
T
<|.N'
2208
THE COMMERCIAL & FINANCIAL CHRONICLE
ThuirsSay,^^ Octbber
NYSE Governors to
Regulation oi
Act oil Permissive
Incorp. Next Week
A Poll
Holding Company Stocks
on
Interest in the
;
subject
among
of the New York Society
of Security Analysts a round table discussion of the utility holding
company stocks was preceded by a poll of market sentiment on these
issues. In order to make allowance for background market psychol¬
ogy, a vote was also taken on the general market arid on utility
holding company stocks as a class. Following are the statistical
results of what was designated a«<^
firms
'■
By SIR STAFFORD CRIPPS*
President of the Board of Trade, Great Britain
the
members of Exchange seen
At
a
recent luncheon forum meeting
"long
Comments of three
faded.
brokers,
more
in world trade
pretty
to
seem
pull"
possible
vote
countries
;
.
■
[t\>
40
for
1
Allowance for inaccuracies
should be made because the poll
was
taken by
instead
also
little
a
company
stocks
as
a
whole
were
the
favorable
issue and bearish for only
three stocks. It was also obvious
that the woting was quite uneven
in character, with many of the
large number present withholding
individual
issues
or
to
his views
on
of
on
member
pointed
out
ings ratio of 18; it is now becom¬
ing the practice to go to the other
extreme and use a ratio of only 10.
He felt that the safest method Was
the general
First
Another
?
that while early this year it was
the practice to use a price-earn¬
holding company sub¬
sidiary stocks with similar issues
already in the hands of the public.
One speaker stressed the fol¬
lowing favorable aspects of the
utility picture: (1) Capital struc¬
tures of both operating and hold¬
ing companies have been greatly
improved in recent years, and the
holding companies have retired a
substantial amount of their senior
securities.
(2)
Earnings should
hold up well in 1947 regardless of
any letdown in general business,
to compare
market.
William Amos
to
stock.
the entire list. Only one consist¬
ently bearish voter was observed
and when asked to comment on
his position he stated that it was
due
entitled
Boston
Corp. gave a general discussion
pf the subject. He called attention
tp the wide variations in estimates
of the value of Standard Gas &
Electric second preferred stock,
ranging from 8 to 80. These vari¬
ations seemed largely due to dif¬
ferent valuations placed on Phila¬
delphia Co; common stock, the lat¬
ter being taken at the current
market price around 11 in one in¬
stance,
and
at
an
estimated
"break-up" figure of 24 in the
other extreme case. ;
Mr, Amos stressed the analyti¬
cal
difficulties •: in
appraising
will
hfeak-up values, due to (1) the
shifting
market
of
yardstick
price-earnings ratios for ooerating Company stocks; (2) SEC and
court delays in approving final
Political conditions reflect a
the right" with respect
to the utilities, and this trend may
ke accentuated by the results of
the forthcoming election.
'
'"v
*
because
crease
of the current rapid in¬
in
use
of
Interest rates are
electricity. ; (3)
still low, despite
arid
permit additional refunding.
the recent securities decline,
(4)
"turn to
*
vide any
Broker
I
as
29
to
ardent
partisans
seems
his mind
&
Co.
the matter.
on
Some of
lieve them of
some
of the finan¬
cial
responsibility they now must
bear.
If, as has been frequently
reported in the press, there is the
possibility that the partnership
may be given some tax privileges
it
does
not
now
enjoy, there
could, of course, be no possible
advantage to incorporation. Even
for instance if the tax
on
partner¬
to be figured on a basis
of 50%- as compared with the 38%
rate for corporations, it would still
ships
be
were
advantageous as far
I
as
of preventing wars,
I
I
and
I
that
its
liber
hope
tip
a
the
ns
tax
to
lems
full
wise actions.
may
pre¬
pare
the
way
for
reaching
nomic
which
will
hold
,
out
more
prosperous
Rockwell Manufacturing Co.
"Tennessee Gas & Transmission
Secretary of Commerce
houses
period of uncertainty there is one thing sure.
preservation of peace on earth is dependent on the estab¬
lishment and ^
the
maintenNow, we are a nation of 140
million people, and although that
ance
of
a
is only about 6% of the population
sound and ex¬
panding world
All the arts
diplomacy
*
Prospectus
U. S. Potash
on
v
free-
us
from
dom
fear unless at
time
the
we
W. Averell Harriman
same
develop
way
a
to attain
freedom from
Request
lems and to solve them.
The solution of world
economic
at
a
policy arid if
Paine, Webber, Jackson & Curtis
ESTABLISHED
1879
firm
can
continue in
existence if it adopts a long-term
son
carries
on
do not, in fact, consider the ques¬
of permissive incorporation
tion
important at all at this time.
am
be
our
of
own
no
firesides or we shall
help to ourselves or to
men in other lands.
fellow
¥
where
father left off in the business. We
as
our
war
was
about 30%
op
world and is
of the
certainly greater now. We are
a great force that we have
great power for good or for harm
such
in
the
lives
dependent
on
of
how
other
we
nations,
handle our
affairs both at home and abroad.
Are We Prepared for
Responsibility?
presents
a
tremendous
problem in which the vast major¬
ity of the people of the world are
looking to us for leadership. But
we have developed the ability in
this country to face great prob¬
not
We
the
income
the
where in the world.
problems must begin right here at
home. There must be prosperity
know that
industrial
This
business.
Our industrial production
world.
is perhaps more
want—freedom from want every¬
feel either that the corporate form
of organization is necessary to the
the
tremendous
percentage of the business of the
fore
give
continuity of
Liberty A.ircraft Products
a
force will not
Com¬
do
are
of military
all the
manifestations
isn't their
business and they would only be
We
we
than half of the
production
of
the
world. Our national income be¬
and
only^ in
We were originally in favor of
incorporation but now we feel
differently about it. We do not
think that incorporation should be
adopted for tax reasons alone. Tax
inequities have a way of adjusting
vast eco¬
nomic power doing a
of
just
time.
of the world
economy.
the,
Broker No. 48
'
*
In the present
The
that
,
be¬
no
Secretary of Commerce declares preservation of peace
dependent on sound and expanding world economy. Advocates
we make large but wise capital investments to develop industry and
agriculture in world's backward areas and that we expand oar
imports. Expressing full faith in American free enterprise, he Js ;v
optimistic over our ability to handle our business problems, with government assisting in "adjustments." Is confident of settlement
of management-labor differences. Stresses role of production.
me
;•
field.
never
is
car¬
on
communities.
in
international
realize—as
fore—that there is
,
Our New
these companies < would
more business to the
Exchange. Many of these compa¬
themselves
"Thomas Steel
the
they
political
By W. AVERELL HARRIMAN*
any
business
in
now
upon
Responsibilities
In the Worid Today
not agree
smaller
events
We do
which
Ou Economic
Exchange would increase but I do
the
necessity exert
the
to
life.
nations
between
influence
.
only important reason
incorporation but the experts
are not sure there is any such tax
advantage. Some argue that in¬
corporated companies now outside
the Exchange would buy seats un¬
der permissive incorporation and
thus bring new business to the
floor of the Exchange.
I agree
mission
of
the
economic, political, and I would
"An
address by Sir
Stafford add, religious questions, and it is
Cripps at the opening session of to that end that the United Na¬
the Preparatory Committee of the tions have determined to work
International Trade and Employ¬ and have set up their Organiza¬
ment
Conference, London, Oct. tion.
(Continued on page 2254)
15, 1946.*
the years. The
of
then,
security in
peace unless we can deal inter¬
perienced the sequel to the First nationally with the major social,
for
number
not
was
I am sure that all of us who ex¬
the
the
,
relations
of
nor
happier
prospects
people of all lands of a
and
There
think, the same universal recog¬
nition, as there now is, of the im¬
portant part played by the eco¬
Sir Stafford Cripps
agree-
ment
much
so
I
interna¬
a n
not
was
nally failed to translate them into
ious countries,
tional
it
the achievement that
as
then lacking. The world was
of good intentions but sig^-
was
var¬
predeces¬
our
well, however, to re¬
as
the desire
type of business
over
is
It
member that
which
safer and
policies into
channels than
complex eco¬
prob¬
beset our
determined
be
lies to steer world
us
then did.
sors
most
must
in
as
economic
am
advantage would seem to
be
united policy in
same
War
far
saner
nomic
in the way that has proved
on
successful
so
so
understanding
of
opposed to incorporation.
just old-fashioned enough
do should continue to be
we
ried
World
de-
Broker No. 47
to think that the
and calls for
led to United Nations victory.
may achieve a
fuller
mutual
am
am
as
1
'
On behalf of His
Majesty's-Government in the United Kingdom I
a most cordial
welcome to all the Delegates to this Preparatory
Commit tee,
—
—
the part¬
nership form of. organization.
.
'
extend
concerned, to preserve
looking for leads to prospective
purchasers of the securities they
can
and do sell at higher profit
Chicago
Trading Marlcets in Common Stocks
"Crowell-Collier
to be able to make up
big houses—because of the
large
investment
they " makeprobably favor incorporation for
the single reason that it would re¬
•
Bausch & Lomb Optical Co.
no
the
rates.
"Bates Manufacturing Co.
either side,
on
means
drawing on the prestige which
membership
in
the
Exchange
would bring them, particularly in
BROADWAY, NEW YORK 6. N. Y.
Direct Wira to
fog on this question
whole Street itself
be.
Except for a few
as
economic affairs
46
a
;
basis for healthy and expanding world trade* but
one
country should not be expanded at expense
of others. Urges international regulation of "economic armaments"
and
the
as
seems
one
No.
nies would be interested
Bonds & Pfd.
Gilbert J. Postley
in
am
just
bring
Portland Electric Power
per¬
advantages whatever.
would actively seek seats
New England Public Service Pfds.
■
that
missive incorporation would pro¬
that
Midland Utilities Common
convinced
be
to
seem
company common
nevertheless
potential future earning power.
Moreover, he thought that current
earnings (figured without respect
to preferred arrears) could be es¬
timated in the neighborhood of
$3-$5 a share on the common
pn one
on
holding
is
on
fpr nine out of 13 stocks, neutral
votes
common
consideration because of its claim
was
on
con¬
equity might be temporarily
a
stock
holding
slightly adverse, the votes
Individual issues
that
inconsistent
on
if the
even
He
"in the red," the courts had ruled
showing of hands
of by written ballot.
It
seems
stock.
common
tended that
stock
a
that, while the vote
the
them to be prepared to give up
regulating their foreign com¬
/holds trade of
—
JJnited Lt. & Railways
urges
merce.^ Stresses: importance; of assuring full employment in all
be convinced that
it
(though
long enough,
old national methods of
protecting or
plans; (3) the difficulties of esti¬
permissive incorporation would
seems
that some mem-? mating 1946 earnings and "normal"
provide any advantages whatever
foers voted more in accord with earnings due to such factors as
The issues of permissive incor¬
their views on the near-term mar¬ (a) amortization of plant account;
ket outlook).
(b) accelerated depreciation; (c) poration which is scheduled to
Bearish
Bullish
excess profits taxes for the 1945
come up next Thursday before the
23
General market
35
portion of interim earnings re¬ Board of Governors of the New
Utility holding co. stocks,
25
23
York Exchange is considered by
American & Foreign Pwr.
ports, etc.
second preferred——,
2
24
':iV Truslow Hyde of Josephthal & most of the partners of the various
American Power <& Light,
15
16
Co. took a generally bearish view NYSE firms to be pretty much of
American Water Works23
15
of the outlook due to rising wages, a dead issue. It is apparent now
Commonwealth & South'n
27
8
k'ectric Bond and Share,, 14
■'V. 9
etc., However, he disagreed with all around that interest in the
12
8
Electric Power & Light,—
views * on
American
Power
& subject has run out, so to speak.
38
Engineers Public Servicerr:3\
General Public Utilities,— .42
4
Light expressed by another mem¬ Printed below are the comments
6
tyftddle West—
29
ber to the effect that, with a "10 of three more brokers on the sub¬
Niagara Hudson Power,—
33
2
times" earnings multiplier, there ject. They run very much like the
Fuhlic Service of N. j
16
16
would be little or no equity left others we have printed. Very few
Standard Gas 2d pfd——
24
9
a
-V,'-
♦
British cabinet officer, asserting nations have had chaotic conditions
much like the
others previously reported, are
given below. Very few member
running
31, 1946
Last year, when the war
;V
'!^
ended,
question which I was
asked everywhere in my travels
in different parts of the world,—
"Is the United States prepared to
take her share of responsibility
in world problems,
or^ will she
return to the isolationist policy
there
was a
which she adopted
war?"
As
it
result
after the last
of the clear
positions taken by President Tru¬
and Secretary Byrnes, with
man
bi-partisan support, the question
no longer in the minds of the
people of other countries as far
as
political settlements are con—
(Continued on page 2253) ■/
is
"An
before
by, Mr. Harriman
New York "Herald-
address
the
Tribune" Forum, Oct.
30, 1946.
4
I
Volume !64
Number 4538
THE COMMERCIAL & FINANCIAL CHRONICLE
SCHENLEY DISTILLERS CORPORATION
NOTE—From time to time, in this space,
there will appear an advertisement which
hope will be of interest to our fellow
Americans. This is number 145 of a series.
we
V /
SCHENLEY DISTILLERS CORP.
Survivors
INVESTMENT TRUST SHARES
Y
PRIMARY TRADING MARKETS C
Affiliated Fund
j
American Business Shs.
>
Institutional Shares
Manhattan Bond Fund
Broad Street Investing
Mass. Investors Trust
Mass. Investors 2nd Fd.
;
Mutual Investors Fund
Consol. Investment Tr. f Nationwide Balance ^
Diversified C-&-D
National Investors
Dividend Shares
National Securities
Century Shares
Chemical Fund
Group Securities '
FundamentaUnvestors
Incorporated Investors
,
New York Stocks
State Street Inv.
Wellington Fund
1
All others traded
Our
"1
own
"
direct private telephones connect
jffeie York, Philadelphia, Boston and Hartford,'
Direct private teire to Los Angeles,
J';
J; Arthur Warner & Co
Incorporated
Members of Nat'I Ass'n of Security Dealers, Inc,
120
^
Broadway
New York 5
Telephone COrtlandt 7-9400
~
TWX-NY 1-1950-2 and NY 1-2837-9
s.
^
r
89 Devonshire St., Boston 9
y
LAfayette 3300
TWX-BS 208-9
Recommendations and Jjiterature
will he pleased
following literature:
*
~
interested parties the
to send
4, 111.
•
>
,
Columbia
Buhl
Building, De¬
V";
^3
••
TJhiversal Zonolite Insulation
Analysis
JCo.i '31 Milk 'Street,. Bpstoit. 9,
Mass.V %
•—
3,
tive
if..*
analysis—du
Pont,
Homsey
South
La
Also
.
Caswell
—
&
Co., 120
Street, Chicago
Salle
available
is
circular
a
on
Chicago Hardware Foundry Co.
Study of the situation—Edward
A. Purcell & Co., 50 Broadway,
Over discussion of establishment of tax New York 4, N. Y.
;'
5%—A list of 15 common stocks loss available to dealers — Kaiser
& Co., Russ Building; San Fran¬
Columbia Gas & Electric Corp.
yielding over 5% at current price
cisco 4, Calif..,
.
levels, which also offer price ap¬
—Analysis — L. F. Rothschild &
Also available is the current is¬
preciation possibilities — Brand,
Co., 120 Broadway, New York 5,
Grumet
&
Ross,
55 Broadway, sue of Ideas for Dealers, contain¬
Pettibone Mullikph G©rp.—BuIt
letin—Doyle, O'Connor & Co.,
Inci, 135 South La $alle Street.
Chicago 3, I1L
Yielding
Stock
Common
Dolphyn,
g Parker Appliance Co.—Descrip¬
Electric-
&
Gas
"
I'/V
.
']•«;1111'vV;y/i.'.1
-
troit 26, Mich.
Chicago
Gas
cago
It is understood that the firms mentioned
&
209 South La Salle Street,
Pfd. — Comprehensive
study and analysis in brochure
form—Fred W. Fairman & Co.,
208 South La Salle Street, Chf^
and
Dealer-Broker Investment
~
and
'52
$tudy—Sills, Minton & Co.,' Inc.,
Public
Utility • 5W
Consolidated Electrh
Central
of
Thursday, October. 31, 1943
FINANCIAL CHRONICLE
THE COMMERCIAL &
2210
Utah Southern QU Co.
Meni-^
orandum-r^Amos C. Sudier & Co.,
National
First
Bank
Denver 2, Colo^
Building,
""
""""
.
New York 6,
N. Y.
Reil-
Long Term Forecast—J. F.
Doe
John
Co.;
American Phencrfic Corp.;
Letter;
:
"
Ay;':
:
Steel Industry Earnings Outlook
—Discussion of improving situa¬
|
&
Adams
Tornga,
Bank
Grand
Building,
Rapids
Grand
To Head Slate of Stock
Rapids 2, Mich.
Machinery Corp.;'Golden
tion—H. Hentz & Co., 60 Beaver
Co.; Silver Creek
'Street, New York 4, N. Y.
Precision Corp.; Plastics Materials
Mining
Highlights of
Street; O'Sullivan Rubber Co.
Corp.; Higgins, Inc.;
■
Street, Chi?
Salle
South La
231
tRailroad Employees' Corp..
Analysis—L; Johnson &
Manufacturing Co.—De¬
Decker
cago 4, 111.
Also available
Association
the
tailed Analysis—Comstock & Co.,
of!
presidency
N. Y.
Street, New York 4, N. Y.
General
Crown
e
—
&
National
Exchange Firms Ass'n
Barcalo
Co.;
Stamping
and
-
Circular
—
*>.<•>?
Shear¬
Us That; The Commercial
Co.
ing
Light¬
&
James F. Burns Named
Young
Situ¬
Peck, 63 Wall Street, New York 5,
ation and Earnings Outlook—Fu¬
N. Y.
Public National Bank & Trust
ture of rails discussed—Delafield
James F. Burns; Jr., partner oil
^
/Twf
*v
Cp.—Analysis—C. E. Unterberg
& :De!afield, 14 Wall Street, New
| Consolidated Edison Co.—Anal¬ & Co., 61 Broadway, New York b, Harris, Upham & Co., New York,1
York 5-, N. Y,
ysis—Hirsch & Co., 25
Broad
is slated for the
ly & Co., Inc., 40 Exchange Place,
Y. Also available
are the following: Executives Tell
Manufacturing
memorandum—De
Larson
Railway
Connecticut
Railroad
the
of
Review
:
New York 5, N.
ing
tailed
of interest¬
ing data on a number
ing situations.
•
V
Fred B. Prophet Company—De¬
■
.—
;of
Stock -Exchange
40 nominated
Firihs^! He ; was
the
for
at Pebble
-
u*
governors'
office
Exchange Place,, New York 5, N. Y.
meeting of the board of
;
York'
New
at
Beach, California; where
^Rockweu Manufacturing Co.—
Securities-fpiscussibn of
are analyses of
the'association is vin, conveptibn.f
! AnalysiSr4^einet7' Rouse & Co;
strong
basic position—Eisele & Hydraulic Press
Manufacturing !
Tkere ivere no other nopainatipns.1
25 Brpad Street, .New York 4
King, Libaire, Stout & 'Co.,- 50
Co.; Long Bell Lumber Co., and
Missouri
Utilities Co. — Card Broadway, New," York 4, N.Y.
; Mr. Btirns. is being returned
'N.Y,
Miller Manufacturing Co.
memorandum—G. A. Saxton &
the office from which he resigned
Co., IncM 70 Pine Street, New
Tax Items of Interest—In the
Schenley Distillers Corporation in
Equity Oil Co. and the Rangely
September, 4942 when he joined;
York 5, N. Y. ;.
current Newsletter of the Associa¬
—Brochure of articles tney
Oil Field—New up-to-date circu¬
the XJSAAF. He will sucpeed Wy-fc
tion
of Stock Exchange Firms,
leen
"Wall
Sugar
,
,
.
lar—Forbes & Co., First National
Opportunities for Tax Saving in New York, N. Y; - Bank Building, Denver 2, £olo. ;
Market—Analysis and
Transportation Statistics ■—i ICC
Federal Machine and Welder
Monthly comment—Vilas & HickCo.—Study
of prewar position,
ey, 49 Wall Street, New York 5,
CARTER
wqr effort, and postwar develop¬
N. Y.
Member, National Association
ment—J. G. White. & Co., Vlnc.v
the Present
running in the Ghrohicle^
to "Mark Merit, int care c
Arrite
Distillers
Schenley
Fifth
150
Avenue,
mond
Corporation
New York
I
Dealers
Securities
37 Wall
A|>itibi Power & Paper Co.—
Circular—'•Ernst & Co., 120 Broad.way, New York 5, N. Y.
Wholesale Distributors
Middle West
Pacific Coast
—
For
;
Broad¬
Acro-Chemical Co.—New mem¬
LOS ANGELES 14
CHICAGO 3
650 S.
135 La Salle St.
Spring St.
State 6502
Michigan 4181
CG 99
LA 255
orandum—Greenfield, Lax & Co.,
40
Exchange
5, N. Y.
Inc.,
York
Mr. Burns became active in
.
randum
United Utilities
on
cialty Corp.
Snap-On Tools Corp., Com.
Chicago 4, I1L
available arie iiqemoranda
The Chicago Corp. and The-
-
available
Also
and
Campbell
S.
A.
Thermit.
Established
J916
Members Principal Stock Exchanges
Chicago Board of Trade
ation
—
South
3
10 So. La Salle St., Chicago
Teletype CG 405
Tel. Franklin 8622
Indianapolis, Ind.
Rockford, 111.
-
Cleveland, Ohio
available
Also
Salle'
La
—
Chicago
Street,
&
Prepare#—Conference Invited
Guenther Law;
Incorporated
~
New York 6, N. Y.
131 Cedar Street
5, N. Y.
available
memoranda
are
Nathan J§trau$-DuparqueV Ino.
—Bulletirl—Luckhurst & Co., Inc.,
V
\}°
/* r"v;
,
,v
Ban*
meeting of Governors at Savan¬
nah last March. It would, how¬
R e co n-
or
add
and
hawk Rubber; and
tive
premature
be
ever,
to claim for
b'cU
that it had
institution
either
Go.
England "■ Public^ Service
has
Northern
Automatic
Fire
Alarm—Anal¬
ysis—Mitchell & Co., 120 Broadwai^, New' Yo^k §,
Y.
Bausch
&
Optical Co.—
Lomb
—
Indiana
Public
Memorandum
—
Also
available
inc.
'V.
;
are;
Salle
Pan
Street, Chicago 4, 111.
;
ous
memoranda
American Airways Corp.r—
the
mc e
engaged
formally
of
an¬
commence^
Paul Bareau
as::
agreement,
,•
the?
of
however,
inaugural
inaugural
ordered
article in -''Journal of: the
Institute of- Bankers;"
London,
'
-
/'
•
which must pre-f
reasonable.
meeting
that
the
It is
that the
af" Savannah
prints; of
blue
the Bretton Woods agreements be
*An
1946.
moye
less than six months ago
in
defined
some
are,
by ;"
a
by
weeks the effective?
start of operations. These delays
articles,
October,
has
day
for payment
cede
'..'Ay"...
.
the
rencies,
session",
course *
inter^
operations and has; made
of 10% of the
capital'. subscriptions.;
The Fund has oni# recently sent
its member nations a request to.
nbtifyl^the parities of their cur^
calls
"continu¬
-
in
members'
May
demanded
the
of-
Circular—Adams & Co., 231 South
La
of
Ser¬
and Bird & Son,
r' : •
^\ •
i
Bank
the
nounced
in the process
Street,
•
Eastern Coyp.
been
Buckley
1420.
Walnut
Philadelphia 2, Pa. • !
Brothers,
s
influence
ment of
each
early
—
Haloid;
bama
that
ex¬
ecutive direc-r
of
live
a
national f.'nancial affairs. It is true,
The
of
board
Appraisal of values r-. Ira
Haupt & Co., Ill Broadway, New
American Window Glass; Puro- York 6, N.Y.
"w,
^ ..v
lator Products; Upson Corp.; Ala¬
Iron & Steel; Barcalo;
on
come
ac¬
Wash¬
m
ington.;
Tors
New
on
(mmwuiiiiniiuiiimi.'iiiiiHiimiiitiiii;
Place, New York ;5,
n;-:y
Hart¬
Telephone COrtlandt ,7'5C60
Boston Chicago Philadelphia San Francisco
^'*f
,
11;
r-
vice
-
f
struction
40 Exchange
Empire; Lanova Corp.; Mo¬
Taylor Whart¬
ford
Branches
Broadway,
120
Co.,
W. L. Douglas Shoe Co.;
on
ADVERTISING
Albert Frank
—
y/'.%
v
the two institutions conceived at the Bretton
conference, the International Monetary Fund and the Inter¬
.
Also
Plans
Circular
—^
\
/'
i
'
New York
Its
London Terrace
alive
FINANCIAL
1
^.f
national
;
v-
Aspinook Corporation—Circular
All
'
Foi* several months
Seligman, Lubetkin & Co., Inc.,
Tennessee Products and Wellman
44 Broad Street, Ne^ York 4, N. Y; Development,
Engineering
.1
' )')
f.'-L v'r'1 '<*AJ 'J'.'
hav.e
beep
1
L"
1
*' r1
—Ward
In
'
t
Woods
Queen Anne Candy Co.
acted upon
and gave these orig-
(Continued on page ^31);:
;
I SINCE 1Q08
Fred.W. FairmanCo.
;
our
analyzing
208
SOUTH
CHICAGO
new
these
LA
SALLE ST.
4, ILLINOIS
Randolph 4068
Direct Private Wire to New York
Bell
System
/*:*Prospectus
Brochure
Bonds.
Telephone
•
Common
,.
CG
537
Stock'"-,,'.
on
-
We Maintain Active Markets in
'
DEEP ROCK OIL CORP. Common
*
:
v
Request
*
H. M.
SILLS, MINTON & COMPANY
Byllesby and Company
Incorporated
1
INCORPORATED
f.-
_
Members Chicago
Telephone Dearborn 1421
Direct
Private
Wire
-
Telephone State
CHICAGO i, ILL.
Teletype CG 864
to—Jr €L WHITE & CO., New
Street, Chicago 3
135 So. La Salle
Stock Exchange
209 SO. LA SALLE ST..
>
NORTHERN STATES POWER CO. 6% & 7% Preferreds
$1.05 Convertible Preferred*
5V2's of '52
*
INTERSTATE BAKERIES CORP. Common & Preferred
$2.10 Cumulative Prior Preferred*
r
*
;
Maryland Casually; Conipany
Utility
Write for
,
Primary Markets
1
Central Public
*
aims.
•'
available is a circular on
Also
circulars on
are
,
conflict between American and British con¬
about degree of its political foundation. Holds
British view it^ along lines of former Tri-Parlite Agreement, at a
non-political club of central bankers. Contrastingly, in United
States' view institution is inter-governmental rather than intercentra! bank; it being thus portrayed in Morgenthau's statements,
In the choice of Washington ac its site, and in personnel regulations^
Predicts Britishers' full cooperation, despite emasculation" of their
*
Argo Oil
n. y.
.
•
Savannah Meeting of
British official reports
on
4, 111.
Corp.—Descriptive cir¬
cular—Seligman, Lubetkin & Co.,
[nc., 41 Broad Street, New York 4,
Fund
BAREAU*;^tS-l|l\.v:;-v.!;
Fund and Bank Governors
interesting situ¬
Brailsford & Co., 208
Memorandum
.
Products Co.
Steel
Indiana
of
MetaL &
analyses
are
PAUL
Advisor to U. K. Delegation to
Gulf, Mobile & Ohio Railroad-rH. Johnson & Co.,
64 Wall Street, New York 5, N. Y.
Broadway, New York 5, N. Y.
Woodward Govenor Co., Com.
Paul H.Davis & Go.
IIBy
cepts of Fund center
Farms Co.—AnalysisYork Hanseatic Corp., 120
New
•Prospectus Available on Request.
South La
Analysis—R.
Arden
Cribben & Sexton Inc., Com.
Corporation—Circu-!
Two Conceplions of the
International Monetary
Spe¬
v-
r
Building
Muter-Co.
Co., Com.
*Wells-Gardner &
oi^anization" ihi'1941.
Printing
Also
.
_
tb$
association; at the. time of its re-
t
rpnnrt—Mcroier,
Salle Street,
on
'
Sheller ManuiAciuring Corp,"
N. Y.
Byllesby &
lar—Hicks & Price, 231
New
Place,
-
.
Also available is a new memo¬
& ;
M.
Co., Stock Exchange
Philadelphia 2, Pa. '
Greyhoundi
DISTRIBUTION
.
Manifold
General
Co.—Bulletin—H.
N.-Y.";
New York 4,
way,
32
Barken,
dum—Peter
MARKET
SECONDARY
;
Insulator—Memoran¬
American
UNDERWRITERS
Street, New. York 5,
one-half years.
two and
H.C0RBREY&C0.
of
Cabell, who has been the
.
association's president for the pasf
York
-
"
New York..
.
...
8711
Philadelphia
;
.
"
-
Teletype CG 273
Pittsburgh
Minneapolis
1;
.Volume 164:
THE COMMERCIAL & FINANCIAL
Number 4538
Members
y
slate
of
the
Nominating
■/;'
are:
CHRONICLE
Committee
which
°r j:;;- V
Richard F.
presented
the
Personnel Items
.:l:v.. ••;
..
Abbe, Chairman, Van Tuyl & Abbe.; Walter V. Ken¬
(Special
nedy, Coffin & Burr, Inc.; Leslie Barbief, G. A. Saxton & Co.; Frank
E. Mulligan, E. H. Rollins &
Sons; Alfrdd F. Tisch, Fitzgerald & Co.
NSTA Notes
TWIN CITY BOND TRADERS CLUB
;
|j .At the annual election and: dinner meeting of the Twin City Bond
Traders
Club held
Oct. 3,
on
elected to take office
194&, the following
new
officers
were
imihediately:
(Special to
Co.,
Club
Bond
fall party on NOy, 5, at
Club.
The
luncheon,
guests
are
plans
call
and
etc.
a
expected to
will hold
the. Glen Lakes Country
for
golf,
number
Jesse A*
Chairman;
on
Cartwrlght^
O.
to
(Special
arrangements
Court
The
Financial
N.
Chronicle)
C.—Earl
F.
with Southeastern
now
to
The
Financial
CHICAGO,
Jacobs
is
ILL.
South La
&
Chronicle)
Patterson,
Kendall,
Salle
L.
Ralph
—
with
now
Copeland
Inc.,
231
Street.
National Bank in Dallas; James F. Jacques,
(Special
:|*irst §6pthwesf Co., and Rogers Ray, Rauscher,
i&ECURITY
Day &
at
Securities, Independence Building.
Pierce, Penner &' Beanei; Robert R. Gilbert, Jr.,
to
The
; DETROIT,
Pierce &C pO>
iJetat -Ak Sanders. Ji;.
A.
,V
Merrill _Lyncki
First
Damon W-
Washington
Inc.,
Stedman is
S^n^ers, Jr., Sanders & Newsomr>
K
Chronicle)
—
with Chas
now
(Special
out-of-town
of
Financial
CHARLOTTE,
party',
attend.^
Members, of the committee
ara.
cocktail
The
Street.
annual
its
Chronicle)
has
Hall is
The Dallas
Financial
MASS.—Joseph
BOSTON, MASS.
;
DALLAS BOND CLUB
The
Wjoined the staff of
Clayton Securities
Corp., 82 Dev¬
onshire Street.
Gallant
.
_
to
BOSTON,
B.
Kermit
TRADERS ASSOCIATION' OF NEW YORK
Sorum
Robert S.
McNaghtenj
Paul' E. MAtschfc
Martinson
' Martin
ipre^ident^—Kermit B.'SorumTAllison-Williams Company, Minne¬
il I T^e Nominating-Committee of the Security Traders Association apolis.
.;
[
New York, Inc. has presented the following slate for 1947.
Vice-President--Robert S, .McNaghteri, Williams-McNaghten Co.,
Financial
MICH.
Chronicle)
Leonard
—
W. Cornell and Armour N. Doyle
are with C.
G. McDonald & Co.r
Guardian
Building.
.
.
■
-
,
Minneapolis.
'Secretary—Paul E. Matsche, Paine, Webber, Jackson & Curtis,
St."j
"™
(Special to The Financial
|
&
Harbrecht
(Special
Minneapolis.
Charles Rieger of Jamieson
Company :made a report to the
club, eqyering the Seattle Convention and pther meetings in the West.
J.
is
FLA.
with
to
The
Financial
-K
Cohift
Torrey, Blount Building.
/ TrCasprer—Martin G. Martinson, First National |Jgnk, Sk Raul.
National Committeeman—William J.
Lau, C. S? Ashmun Co.,
,
Chronicl^)
FT. '-LAUDERDALE,
John
:
'
~
Chronicle)
MIAMI, FLA.
— Phillip Brooks
joined the staff of Frank IK
has
Newman &
Build-
Co., Ingraham
Common Sense and Progress
By J. PENFIELDj SEIBERLING*
President, Seiberling Rubber Co.
Industrial executive,
A.
Louis
Michael J. Heaney
Frank
Gibbs
A.
asserting
commonsense: more
Pavis
necessary
lion to
neyer
before in nation's history
was
in solution of prpblem$," calls itten-
NewDeaf.failures an<j contends instead of
life, there is disillusionment and
a more abundant
Says passing laws to
make the stupid person
Confusion.
redistribute wealth and income does
not
intelligent, the lazy industrious, o)r the profligate &nfty, and that
i i peace cannot be legislated. Holds ordered society is essential to
j; progress and there (pan, l?e no progress when a small group of labor
|
leaders are permitted to defy tb.ei Constitution. Sees standard of;
i
-
4
giving declining: because of -big^-y^ge-Iess wqrk policy.
1
i
I have come here this
evening' to address" you W the subject of
"Common Boh^and Progress.'?-; ! have chbseri this subject because I
believe
t h
a
t<£
never
was
there
time
a
in
T, Geoffrey
Horsfieldf
Wellington
of
Hunter
when
President—Michael J. Heaney, Joseph McManus & Co.
1st Vice-Presidents-Louis A. Gibbs, Laird, Bissell & Meeds.
M'
(two year term):
f;
.
"
Abraham Strauss, Strauss Brothers;
John
Merrill
Mayer,
Bausch &• Lomb
of
jected for too many years,
t
Furthermore, I am convinced
Sense
was
that* until Common Sense truly
more
neces¬
manifests itself in - the; Nation's
sary to effect
thinking there.can be no sound
a
solution to progress in solving our
major
our;,; national
problems, and working pur way
-
M.
ap¬
;
Common
Pavis, Charles E. Quincey & Co.
•Secretary—T. Geoffrey Horsfield, Wm. J. Mericka & Co., Inc.
Treasurer—Wellingtpn Hunter, Hunter & Co. ;
Directors
the
Active Trading Market In
general thinking would be more
helpful in ending the nonsense to
which*' the Nation has been sub¬
Nation
plication
2nd Vice-President—Frank A.
.
our
Doubly 7h^k, tb^re neyer was a
time,, when Comipop Sense In the
the history
jLynch, Fierce, Fenner & Beane; Lester T. Doyle, Hardy & Co,
and
tional
Trustees of Gratuity Fund (two year; term) :e j ■
William K. Porter, Hemphill, Noyes,& Co.;: Richard H. Goodman,
Cohu & Torrey.
|
"
:
' '
"
i
lems
National Committeemen:
P.
Seiberling
also
out of the
prob¬
than
I
evils
at
am
present.
J.
'
interna¬
morass
into
which
;
:
•
•
have
'
*
■
•'**
'
Common Stock
\
>A
^ '
v
y
:•
c
of accumulated
we
!
Optical Cq.
;
.'vS/
V "'.A.'-'i
V.
been
Circular
:
..
t
\„W
j?
(
' !"
'*
<&L-
v(
Request
on
stupidly and at times deceitfully
led, step by step, for quite some
'
persuad¬ time.
.
*
-Charles, M. Zingraf, Laurence M. Marks & Co>.; Carl Stolle, G. A.
^axton & Co., Inc.; Stanley Roggenburg^Hoggenburg & Co;
:
National Committeemen Alternates:
that
ed
in
Think back with me, if you will,
to1 those' days when the peoples'
an
of fine-spun theories and po¬
litical and economic Humbug and
era
including the - Forgotten
directed to that prom¬
hopes,
Man,
Tho^
were
Greehberg^C,;;E, ynterbet^ :& Co.T
I * An address by Mr. Seiberling ised land of the more abundant
^Tames D. Cleland & Co.; Elmer E. Myers, EL W. Pizzini & Co., Inc.4,
before, the Associated Industries life that was to supply security
James F. Musson, B. J. Van Ingen & Co,, Inc.; Stanley C. Eaton,
of
Alabama, Birmingham, Ala;, from the cradle to the grave, with
33endix, Lutweiler & Co.
Oct.* 17, 1946.
(Continued on page 2244)
Nominating Committee (four to be ejected):
Harold J. Burke, Auchincloss, Parker
Bedpath; George; Y.
.
>::'5lunt^:it§ta''5kw
j
& pa;. James, T,
TELETYPE CG
*TK£ MEYERCORD
NORTHERN
LA
CO.
SALLE STREET
361
PHONE
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Aeronca Aircraft Corp.
*
Decker
BOOTH FISHERIES CORP.
.W.
Common
t-
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yhyix/pii-ij'-irc'*
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Conv.
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Hydraulic Press Mfg. Co.
Old Ben Coal
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Mastic
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Seven-Up Texas
BOVGmr±;W
i
Asphalt Co.
-
Miller Manufacturing Co.
INDIANA PUBLIC SERVICE
FEDERAL MACHINE & WELDER 5fs W.W.
Corporation"
Long-Bell Lumber Company
..
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Manufacturing Co.
Howard Industries, Inc. *
*
McGivney, Horiiblower & Weeks.
PETTIBONE
SOUTH
CHICAGO 4* ILLINOIS
<& Co.? Milton Van Hiper, !Mackubin, Legg &
^
'
231
.
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«Co.; Apdrew^^ R.^; Steven, Jr^ Bond & Goodwin, Inc.; Walter-Murphy,
.Jr., Walter Murphy, Jr. & Co.; Walter E. Sullivan, Elder, Wheeler 8c
•Co.; Irving Manney, Eisele & King, Libaire, Stout & Co.; Salvatore
J. Rappa, F. S. Moseley & Co.; Thomas W. Gleason, Kirchofer &c
.Arnold, Inc.; Jules Bean, Luckhurst & Co., Inc.; Otto A. Berwald,
3erwajid
"6-
!ADAMS
Loiiis
St.
Public
Corp.
Seryice po.
'
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^Prospectusavailable
upon request
«.
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v.:..'
Prospectus
••
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upon
Trailmobile Company
-J
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request
,
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.
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*Detailed analysis available on
DOYLE, O'CONNOR & CO.
INCQHPORATED
.
135 SOUTH LA SALLE STREET
,
-
ACAIiyN«®COMEANy
Telephone: Dearborn 6101-;
..
Teletype: CG
1200
NekrYork
^'Boston
^-
Mil^SU^eQ,
Minneapolis
Qmaha
••
•
CHICAGO 4
231
Chicago
'•
request.
COMSTOCK & CO.
--r;
CHICAGO 3, ILLINOIS
*
So. La Salle St.
Dearbori> 1501
Teletype CG 955
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THE COMMERCIAL & FINANCIAL CHRONICLE —-
John
Co.,
Faison, Bankers Bond
D.
-
.
analysis of the accompanying income and
statement
expense
reveals that for the first five months of the current fiscal year, the
London, Terrace Corporation earned 4% on the outstanding First
Mortgage Bonds and in .addition had a surplus of $93,229.52 available
sinking fund'purposes! At the present rate of earnings, the com¬
pany will be able to liquidate its sinking fund deficiency within a
year's time, at which point the corporation's income will be distrib¬
for
uted
follows:
as
-Y;
Earnings for five months ended Aug. 31, 1946——
$177,956
Earnings projected arithmetically to March 31, 1946—————
427,092
Interest requirement at 4% on $4,800,000 par value of bonds
1
which it may be assumed will be outstanding after liquidation
VY
of sinking fund deficiency—-————
_———_—Y\ 192,000
——
•
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John D. Faison
Building,
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55,000 t:
Y '
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Balance: (to be distributed'as follows
—$180,092
V1 ' '
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H: :V'VfV*V i w'.V
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;—•——
25% to additional interest—
———
•
$45,023
25% to additional sinking fund—45,023
50% to corporation, including stock dividends.—Y . 90,046
.
a
Y
'
$235,092
.
:Y;,i"/#.«
This distribution will permit
f
•"
—...——;
Primary sinking fund————
Y"
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.
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purposes./ • Y
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,
Stores
.
Other
V'
.
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payment of approximately 5%
sinking fund
and
1945
*
Five Months tQ Aug. 31,
1946
1945
$59,336.35
$301,395.01
7,787.08
7,310.94
3,574.23
43,860.64
$296,179.60
37,710.86
8,533.75
10,720.78
concessions-
income—
Total
1946
3,468.34
,
—
.
Y
income——
Deductions:
11,646.00
Operating expenses.!———
Heating
,
■■■■3
Furniture
912.41
56,664.78
.
52,109.11
6,616.45
6,279.85
12,026.67
11,091.99
6,826.68
4,955.20
5,771.32
•
.
———»———:
3,426.33
V
4,768.96
1,597.79
567.83
1,381.99
2,653.67
6,783.34
7,141.39
7,412.11
40,737.81
44,028.61
$25,514.44
Y"
$27,918.11
$129,655.73
$124,236.08
$42,303.41
$224,133.67
46,177.50
$220,375.16
——
Administrative
expenses.
G^oss operating profit.
estate taxes-.—.
9,235.50
9,530.25
;
47,651.25
interest
at
service for
full
a
all
passen¬
the Queen Eliza¬
board
on
Midland
beth when she sailed
on
her first
liner on
Oct. 13.-; Atlantic branches were
voyage
as
passenger
a
inaugurated by the bank in 1920,
being first established on the
Mauretania, the Aquitania and
the Berengaria.
The bank states
facilities
similar
later
were
provided on the Queen Mary from
her first voyage.
By the outbreak
of
the
war
branches
bank
had
just over 1,500 transatlantic
crossings. The branches on board
were
the less
none
on
British ter¬
ritory/ thus continuing this bank's
policy of confining branch repre¬
Fis;ed interest at 3%
Income
the
of
provided
made
$46,273.91
Real
offices
Limited
gers
that
?
(Apartments———_iY.
.Buildings
10,572.97
Y
1,350.90
—
Repairs and maintenance:
Three
banking
$60,532.93
,
Supplied by British Bk.
Bank
'—Month of August—«
<.
rentals——
died
Presi¬
Ocean Bank Service
8y4Y:
,
-Apartment
was
Club of Louis-
Ville^Y^YYY^
STATEMENT OF INCOME AND EXPENSE"
Income:
Ky.,
Faison
dent of the Bond
•
.
the bonds, with a surplus of $100,000 available for
on
Louisville,
suddenly. Mr.
sentation to Great Britain.
4,408.75
bank also says:
21,'l81.65
$20,093.08 Y $15,138.16
$93,229.52
1%————.
4,236.33
"When
Available for sinking
fund..;.—.—Y-
The
•
tions
Sinking fund deficiency Aug. 31, 1946 (giving effect to $95,000 payment to
sinking fund in October, 1946), approximately
;
war
of
broke out the opera¬
Atlantic
branches
bank
suspended but
were
civilian
as
the liners
On
,
return
Slay ton & Co. Staff
(Special to
The
CHICAGO,
Financial
ILL.
—
Galloway
become
with
&
has
Slayton
Inc.,
transport,
V.
135
the
ages
lems
of
these
all
on
SECURITIES
control,
exchange
as
upon
banking matters
REAL ESTATE
branches will
Atlantic
have to contend with all the prob¬
uppjn
South La Salle Street.
and
other
all
full service for
a
be
will
passengers
available
Included among
every voyage.
members of the Atlantic staff are
several
lantic
who
made
crossings
as
scores
of
BOUGHT
OFFERINGS WANTED
SOLD
Ambassador Hotel L. A. 5s '50 W. S.
QUOTED
Beacon Hotel 2s
1958 W.
S.C
Hotel
Cuba 6s
New York A. C. 2s
1959 W. S
1955
New York Majestic 4s 1956 W. S.
Eastern Ambassador Hotels Units
Grant
Hotels Statler Common
National
Brooklyn Fox 3s 1957 W. S.
Chanin Bldg. 1st 4s 1945
Bldg. 2%s 1957 W. S.
Pittsburgh Hotels Common YYrY' ^Y
Roosevelt Hotel 5s 1964
Hotel Lexington. Units
Hotel St,
-
Savoy Plaza Class "A"
Savoy; Plaza- 3-6s;1956 YY/Y'Y
George 4s 1950
SHASKAN & CO
/Members New York Stock Exchange
|
Dtsby 4-4950
150 Broadway
Mhhtypo NY 1-953
New York
Tel. BArclay 7-4880
!Firm
Trading Markets:
i
■
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'
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EXbrook 8515
Upon Request
Seligman, Lubetkin & Co
Incorporated
Montgomery St., San Francisco 4
-
7, N.Y.
Teletype NY 1-588
3-4s, 1952 with stock
Circular
Real Estate Issues
Tela. BF 61 8s 62-
:
■.
-■
J. S. Strauss & Co.
158
\
London Terrace
California & New York
i
Co
Amottt Baker
Members New York Curb Exchango
40 EXCHANGE PI., N Y.
Members New York
41 Broad
I
Security Dealers Association
Street, New York 4
At¬
bank officials
in prewar years.
£
the
During thd postwar voy¬
Mary.
connected
Co.,
resuming activities* on the
Queen Elizabeth and on the Queen
Chronicle)
James
to
bank is
HAnover 2-2100
7 -"
,
>
"V
The Road to Abundance
London Terrace First Fee and General Mortgage 3-4%
Bonds with Equity Stock Outstanding/ $5,083,600
An
i
Thursday, October 31, 1946
Homec Life
Kentucky.
Inc.,
VY-^
Turn
Right!
Volume 164
Number 4538
THE COMMERCIAL & FINANCIAL CHRONICLE
Ohio IBA Group
Elects Officeri^ j ||
"Business Speaks
Boieaucrac
By DONALD M. NELSON*
•
CINCINNATI, OHIO—Ewing T.
Boles, President of the Ohio Com¬
pany, Columbus, Ohio, has been
President, Society of Independent Motion Picture
v
Producers
Asserting bureaucracy in Federal
Former War Production Board head points out
of American Business, which
restored prestige
war
7
self interest for
r
■
employers is to
maximum
pay
and for
wages
Valley
Group
Bankers
of the
Association
the
for
Ohio
a
leadership,
swell
America,
from
dating
to
Black
October,
1929.
discredited
with
is
not
a
personal opin¬
ion
but
a
fact
supported
12
b y
years of
ballot-casting
by the Amer¬
ican people.
H
when
Wm. J.
DaleF, Linch
of
cers
took place
Investment
at
Coniiffe
er,
the
nation turned to business. I know
offi¬
I
to
you
already
1 •
'
are
;
<
alert
and
of
destroy
of
fore
the
York
New
Board
of built
Trade, New York City,- Oct.
1946.
mask.
Down
which is still
return to
'
,
'
*
n
m
'
L i
\
an
.
'
free
our
The
basic
representative
/
issues
-
involved
these
decisions
stood
by bandying about such
cannot
be
members
of
the
Ohio
*
\
*•
*
's
-
-
';
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,
T
-
litical catch-words and phrases as
boys
not
lay
progress
did
down
ism
their
;
Wherry
versus
socialism
111.,
Oct.
These
internationalism,
capital¬
versus
the stock-in-trade
are
catch-words of propagandists,
whose sole purpose is to confuse
the
American
mind
the
to
point:
of frustration and chaos.
These
economic
and
planners
propagandists,
themselves
the
blackest reactionaries, claim to be
the greatest liberals, the greatest
champions of liberty, the greatest
humanitarians, the self-anointed
saviours, the men of peace. Their.
chorus
now
of
self-acclamation
become
pandemonium.
people
17,
1946.
The
in such
are
(Continued
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or a
*
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•
American
state of
a
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tj
*
Marion H. Cardwell, of J. J. B.
Hilliard & Co., .Louisville, VicePresident; John G. Heimerdinger,
•of Walter, Woody & Heimerdinger,
Cincinnati, Vice President; Dale
F. Linch, of Berwin T. Moore Co.,
Louisville, Secretary-Treasurer.
In addition to the officers, the
following members of the execu¬
tive committee were chosen; t..,
J.
#
,
1
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^
Coniiffe,
Standard Brands
7
*
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s {
Bond
Co., Louisville, is governor
of the
(without
investment
in
firms
central
southern
■,
Price $98 per
v
<
share
plus accrued dividends from September 15, 1946
'*
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Ohio and northern Kentucky. /;
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value)
This Stock is being offered by the Company in exchange for its
outstanding $4.50 Cumulative Preferred Stock.
f.
banking %
and
par
.
Ohip Valley Group, which
includes
Incorporated
$3.50 Cumulative Preferred Stock
of Merrill
Thomas Graham of the Bankers
,
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Copies of the prosptdusmay be obtainedjrom such of the undersigned {who are
-
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■*!M
1
1
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-
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the under-r '
writers named in the prospectus) as may legally.ojjer these securities under applicable securities laws.
-.
among
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y,
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-
•
Air Transport Meeting
j Airline
countries
representatives
were
of
scheduled
35
to
gather at Cairo, Egypt, from Oct.
29 through Nov. 2 for the Second
Annual
Meeting
national
tion,
it
Air
was
the
-of
Inter¬
Transport Associa¬
announced by the
IATA Head Office at Montreal. The
IATA
roster
every
airline in the, world inter¬
ested
in
comprises
scheduled
Dillon, Read & Co. Inc.
'A''-/?-',
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the
airline
largest meeting
operators
ever
of
V,
Smith, Barney & Co.
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world
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W E. Hutton
held.
i.ii»
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-Stone & Webster Securities Corporation
Securities Corporation
f
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Kidder, Peabody & Co.
»
-
(
Incorporated
''
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i'T*--.
,<rr
'
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Lazard Freres & Co.
Union
-
r<
Harriman Ripley & Co.
.-'iV" *
■*
Blyth & Co., Inc.
!
r
<.
Goldman,.Sachs & Co.
virtually
international
1
air transport and the session will
be
1
,
Lynch, Pierce, Fenner & Beane,
Louisville; Lyman Greer, of Fifth- ^
Third Union Trust Co., Cincin¬
nati; Harry R. Niehoff, of Well,
Both & Irving, Cincinnati; J. Ed;v£
ward Sohn, - Jr., of Lincoln Na¬
tional Bank, Cincinnati.
.
t
?
October.25, 1946
Other officers of the group are:
William
"j
t
*
*
ji.
*
Co.
con-
2232) \
on page
solicitation of an offer to buy securities.
220,000 Shares
has-
meaningless chant.
a
Logical discussions become lost in
Paper Trade As¬
Chicago,
evon
ism.
by Sen. Wherry be¬
fore the National
sociation,
versus
or
Sen. K. S.
blood to help
i
America go totalitarian.' If
*An adress
reaction, liberal¬
conservatism, isola¬
versus
tionism
lives and pour
out their
•
"
po¬
agreed
our
V
Valley
Group in Cincinnati.
in
under¬
that
2226)
..
re¬
are
offer of securities for sale
New Issue
to
public.
Thomas Ghiham *-■
X Edf#ard Sohnp Jr.
the
free economic
a
•
This announcement is riot
be¬
open
constitutional
and
enterprise
system.
- - •/;'
Surely
we
war
on page
a
-
lurking
system, free institutions, free la¬
bor, and the restoration of our
starting 1 almost
American industry
(Continued
>
■
resentative
planes, 100,000
tanks, 2,400,000 trucks and other
23,
e
government,
Dem¬
years
scratch,
300,000
modern
a
lies
us,
rep¬
not
three
tyranny
other road,
consti¬
our
—:——
ancient
hind
remains
tutional
an
from
by Mr. Nelson be¬
r
7.
This is the danger
which I shall speak.
about
an
going to oppress you and the final surrender of our
When President Roosevelt made with a lot of figures but I like traditional liberties to an insidious
the announcement to the world to remember that within a period totalitarian power, which is only
♦An address
•
menace.
«
■
threatens
what
American
am
are
«
national
a
oversimplification to say
we are
business, groggy to secure for
the future our Amer¬
from the onslaughts of every hotican way of government,
economy,
eyed demagogue physically, able and
society, we must now mobilize
to climb on a soap-box, changed
Americanism.
the course bf world history. This
is a fact recognized and stated
America is at the crossroads. At
everywhere on the planet. It is the end of the road we are travel¬
the solidest fact of the war; It ing, lies further concentration of
cannot be denied.
power in the Federal Government,
that
Nelson
perhaps better than any man alive
meeting of how business -responded to this
appeal.
Banker
a
M.
chips were down and our lives,
our liberties
and our substance
were
riding on every chip, the
It has been announced. The elec¬
tion
is not
Donald
society
'
now
the result staggered civilization. It
o w e v
treaty making
our
>
to-which
tion^ everyone including the Ger¬
mans—especially the Germansthought that this was a piece of
outrageous and transparent ef¬
frontery. But business and indus¬
try, got together. and underwrote
this
grandiloquent promise and
the public and
this
of
"Arsenal
i
i
Bureaucracy has become
ocracy" and that we were going
to produce 50,000 planes, 10,000,000
tons' of shipping and other
paraphernalia of war in propor¬
American
business
become the
Calls growth of bureaus appalling, and
instrument in maintaining bureaucratic
as
whole internal economy and
our
*
leadership.
going
was
vf
our
?
Bureaucracy
that the United States
to,
to by external commitments to
foreign countries.
Warns
forces of tyranny have been set in
motion, and calls for a new
v-v
• av
The ground
Investment
of
7"!f
■
menace
dictated
em¬
we as businessmen must acknowledge that
decade prior to the war, business has lost its
assurance, its poise,
its
,J„(G. Heimerdinger
serious
a
Contends Congress has surrendered its
and that
powers
wrongly,
or
controls.
;
Depression and the Businessmen's Prestige
Rightly;
republican government.
| attacks deficit spending
ployees to give maximum production, and calls upon Americans to
cease babbling about
dangers of Communism and work for world
economic unity. >
Chairman of
\ ^y.V
:• "
.
political ideas, Senator
Wherry points to retention by Administration of wartime powers as
indicating aim is to: centralize power in Executive and destroy
-
Calls present collective bargaining, "collective bullying,"
and asserts no single group can seize an
unequitable amount of
power without disturbing the entire economy.
Holds enlightened
government is
freedom and economy and perverts
our
'
assur¬
grace.
re-elected
"U. S. Senator from Nebraska
:•?'
Formerly, Chairman of War Production Board
ance, poise, and leadership.
Says we are now in a postwar period
of uncertainty and confusion both in domestic and
foreign affairs,
and present strife between labor and management is a national dis-
.Ewing rT^ Boles
A National Menace
HON. KENNETH S. WHERRY *
injprevious decade had lost its
;
2213
'
i-fi.
2214
THE COMMERCIAL & FINANCIAL CHRONICLE
why it should be further
Se¬
originally x allocated to
no reason
$650
in
reduced by these retirements.
and
$550
curities
bonds.
these retired claims should be
first
new
in
mortgage 3^s
series
'
First
re¬
Thursday, October 31, 1946
•
■
"A"
y
.
mortgage
bonds
of
the
controlled New
remain outstanding.
Mexico are to be offered their
back interest in cash and
par for
it
Securities
come
of Missouri Pacific
and its affiliated
companies have
a substantial amount of
speculative interest during the
This interest has extended all the way from the highest
bonds in the system down to the old stocks of Missouri
in for
past week.
ranking
Pacific
which
in
reorganization
approved by the
Commerce Commission have been eliminated as having no
The
equity in the properties.
been made
that
of
Abitibi Power
&
5s, 1965
in
Chicago Railways
- Cons. "A" 5s, 1927
g
It has long been recognized by
parties interested in the Missouri
that the plan
has
been
become
was
laws
MEMBERS
y
reor¬
new
such /
I the
as
When the bill
by the President, how¬
-
Commission
Commerce
-
...
The most obvious
necessity for
change in the plan arises from
the fact that in the interim since
was
senior
drawn up
claims, including the Iron
Mountain bonds and the bank and
Universal Match Corp.
Dixie Home Stores
Berkshire Fine
RFC
loans.
It
is
contended, and
with considerable
logic, that inas¬
as the
capitalization origi¬
nally set up by the Commission
was thoroughly "sound there was
much
y
of the bonds
amount
to
.
72 WALL STREET
of
their
income
the
new capitalization for
partici¬
pation of the old Missouri Pacific
stocks, presumably through issu-i
ance
to both the preferred and
of
common
claim
income bonds.
bond
in $1,500
Presumably
would
rank
New Deal in Railroad
charges above the
ing the fixed
new
class "B" stock. It
is expedted that the full details
the
new
plan
may
proposed
be made public
shortly,!
Management Demanded S
.
allow
of
far
more
liberal treatment
old. securities
all. of. the
•
in
a
revised
plan.
Talks along this
well as discussions as to
the feasibility of utilizing addi¬
tional ; cash. further
to
reduce
claims bjr palls for tenders of out¬
standing bonds,
were
started
among the major, bondholder in¬
terests of the Missouri Pacific,
"line,
;as
International-Great Northern and
tern has been set up.
Apparently
it has definitely been decided that
a 3%'%-coupon will be put on the
new
first mortgage
bonds and,
presidents of the New York Central and Illinois Central and
President of the. Pennsylvania.
In the
pression
we
were
by railway officials that volume of traffic
problems. Now, it appears, their problems havO
more
than kent pace with their<t>—
-i
kept Pace with their^
traffic, and the greatest volume of
Still
another
disadvantage of
business
in all
history - cannot the roads is that the chief
exec¬
produce
holder.
profit for the
a
stock¬
*
tion
their
claim
for
interest.
usually have but little fi*
.
.
riancial
It is a rule in other
important
industries that when a chief exec¬
younger man
who
can
well
the
as
believes
and
the
see
opportunities
-as
difficulties, and who
he
solve
can
the
realize the former.
,•
latter
pessimistic
might be adopted by the railways
with good results.; Another dis¬
advantage of the rails is that the
in the
men
as
the
of
some
old
havd
railway business
been.
This plan
expected, as in; the chief positions."
plan, to compromise a por¬
of
utives
interest in the properties
they manage, and lack the person-^
al incentive that ownership
af-t
utive cannot solve the problems of fords. No man with an
important
his company he is retired or asked
financial stake in his
business
to resign by the directors, and his
could
possibly
be
so
publicly
place is taken by a
.
be
will
5s
de?'
told
would solve all their
President is usually quite old; it
also, that the new fixed charges has taken most of his life waiting
will be kept within the limits pro¬ for; other men to
_die; while with
posed- bj^ihe ICC in its reorgani¬ Industrial corporations, younger
zation plan. Holders of the Mis¬ men who show conspicuous abil¬
souri Pacific first and refunding ity are often advanced
rapidly to
earlier
Vice-
a
"days of the Roosevelt
\
Perhaps
merce
its
the
Interstate
Com-i
Commission should
extendi
jurisdiction
insist
on
the
still furtherj
retirement
railway president when he
to be
optimist
an
on
of
the railway
business.
E. E. ROGERS.
■
'
•
-
arid
-
•
Dept. of Justice Finds II Is Not Easy to Prove
Underwriters Are Violating Anti-Trust Law
$100 in;, crish,
refunding.: 5s
By EDMOUR GERMAIN
& fox
■H.
Investigators themselves may 'haVe own ideas on subject* but find
it difficult to gather kind of evidence to bolster their position that
will stand up in court. Department has spent years trying to build
up an airtight 'case against Certain alleged monopolistic practices*
! V
Analyses On Request:'
D. L. & W.-M. & E. 4-6s 2042
Howell
Southern
Electric
3%
Motors Co.
Situations
at
All
Member: New
61
Broadway
York Stock Exchange
;
|
,
.
Teletype—NY 1-310
Times
"
t
&.
Denver & Rio Grande
St. Louis-San Francisco
1
Western Railroad Co.
believcjs to be highly restrictive price*
fixing, throughout underwriting industry. Grand Jury now assisting
in investigation. Now appears 'earliest Department can come to any
decision regarding what it should do /-regarding practices in the
underwriting field is around first of year.
1
The AntLTrust Division of the
New York 6
Bell
Telephone—DIgby 4-4933
Harris-Seybold Co.
Selected
PFLUGFELDER, BAMPT0N & RUST
Stock
field.
Railway Company
GUARANTEED
V
Broad
STOCKS-BONDS
Gulf* Mobile and Ohio
New York 4, N. Y.
Railroad Company
RAILROAD
Street
Telephone BOwling Green 9-6400
Teletype NY 1-1063
> '
;
It
'
is
«
plainly evident
though' the ' investigators
themselves may have their own
notions on the subject, it is riot
at all easy for them to gather the
kind of evidence to bolster th£ir
position that will stand up >ln
court. The Justice Department has
spent years trying to build, up fan
airtight case against certain al¬
leged monopolistic practices, cen¬
tering around what it believes rto
be highly restrictive price-fixirtg,
throughout
the
underwritirig
fieicl. < Patience is one thing cer¬
Chicago, Rock Islarid &
Pacific Railway Co.
*
When issued profits discounted
4
When issued
iosses
assumed
SUTRO BROS. & CO.
:'j EST.
S
1896
■
J
Members New York Stock Exchange
Connecticut
120
BROADWAY, NEW YORK 5, N. Y.
.
Telephone REctor 2-7340
i1,
.
Ry. & Ltg. Co.
Common Stock
Circular upon request
tainly
DENVER, SALT LAKE
;
Income 6s-60
"
♦
becoming
that
V
*Prospectus
Adams & Peck
Wall
Street, New York 5
BOwling Green 9-8120
Boston
Philadelphia
Tele. NY 1-724
Hartford
on
request
Members New
-
.
;
63
Department
the
victim
or ^victims
of its action
undoubtedly have to face a
heavy legal barrage which will
probably include a lot of the ir-.
relevant along with ithe relevant.:
will
After
all, much that transpires in
banking field is
subject to a wide latitude of in¬
terpretation.
As
yet,
however,;
there are no clear signs the De-i
the
investment
partment of Justice has made any
appreciable headway in its work
on
Wall
Street
and
other
writing circles.
"
The
investigation
(Continued
has
now
iTn^
re&c1:"4
-of
v;
frork
stage
on page
Stock Exchange
BOND BROKERAGE SERVICE
i
'
co.
Member of National Association
of Securities
Dealers, Inc.
TEL.
52
wall
HAnover
street
2-9072
n.
y. c.
:
NEW YORK S
ONE WALL STREET
1. h. rothchild &
TELETYPE NY 1-2151
HANOVER 2-1355
5
Tele. NY 1-1293
•
Specializing in Railroad Securities
^y.x'y: •••'".
Philadelphia
Telephone
—
under¬
.,
Mclaughlin, reuss & co.
f|
LONG ISLAND AIRLINES*
-
Department of Justice is pains¬
Trading Markets in—
:,--l
;
takingly gathering a mountain of evidence on the practices of the
underwriting fraternity in an ef-#fort
to
discover,
if
possible, Justice has in great abundance
whether monopoly in any of its and, if ever it feels itself able
phases exists anywhere in the to 5 institute
suit,
the
unhappy
that
25
.
j
.
centering around what it
V
any
ceases
Redwood City, Calif.
Letter to the Editor:
NY 1-.1499
'
and
Present 'plans hre to offer the first
Teletype
Canada
of'
compromise
:
Adding to this the securities re¬ Editor, "Commercial & Financial Chronicle":
leased by- payment
in cash of
As a stockholder in several railways, I was much concerned with
senior obligations would naturally the extremely pessimistic
views recently expressed publicly by the
Railroad Bonds and Slocks
YORK 5
HA 2-6622
Pacific
junior to the income bonds to be
&
Van Tuyl & Abbe
NEW
new
this
Tennessee Gas & Trans.
Telephone
Missouri
(secured
expected to be offered $200 in
and
practically all of the
balance
of
Spinning
*■
By this method of
allocation of securities it is antici¬
pated that room will be found in
old
.
the company has
paid off in cash a number of the
y) Armstrong Rubber Co. J'y
Magazine Repeating Razor Co.
face
the
cash
substantially greater
a
it convenes,
plan.
it
TRADING MARKETS—-
are
*
coupon
presented in the
terstate
a
St., Chicago 4, 111.
of
bution
5^4s
by New
Orleans, Texas & Mexico stock)
first mortgage
new
of
secured
rate
bonds
would naturally allow the distri¬
the
on
Orleans, Texas & Mexico
new Congress New
it became ap¬ some time ,6g0.
%y
parent that some steps would have ;The -details of the discussion
to be taken independently in the have not as
yet been made public.
case
of Missouri Pacific to give
Nevertheless, it is an opensecret
recognition to the many changes that
considerableprogress lias
that had taken place subsequent been made in these negotiations
to formulation of the present Inr and that at least a general pat¬
be
Stock
LaSalle
whole
academic
and even ^though it is ex¬
that a substitute bill will
When
420 Broadway, New York 5,14. Y.
So.
It
obsolete.
pected
Exchange land "other
leading Security and Commodity Exchs.
231
vetoed
ever,
4s, 4y>s, 5s :;y
•"
in the
now
hoped -that the
ganization
Saskatchewan
Holders
class
new
common.
,,,
Wheeler-Reed bill.
York
-
thing
would
become
through enactment of
Province of
,
.
stock and 6V2 shares of
"A"
of the
level considered sound by the ICC.
courts
4y2s, 1956
A reduction in the
.
_
interest
Probably
speculative
securities.
plan is under discussion.
had
Manitoba
.
important,; however, have
the reports that a revised
system
Pacific
Province of
coupons.
Pacific general 4s would be alio-'
cated 7.%- shares of new preferred
of principal in a serial issue
new blanket first
mortgaee.
par
not justified on the new
bonds. Other roads
first mortgage
13%
Orleans, Texas &
security holders without increas¬
reawakened
been
New
appeals had
approval
no
the court
payment of interest on the va¬
more
;
an¬
rious senior mortgage bonds was
in part responsible for the recent
Paper
1st
on
pon was
cou¬
emerging
from reorganization
Interstate 'with 4% first mortgage bonds had
value nor been able to refund them with
plans
nouncement
Furthermore,
obvious in view of general
was
market conditions that a 4%
first
refunding 5s. According to
recent reports the Missouri
and
most
.
allocated to the claims which still
•
[offered"'the Missouri Pacific
income
y,
,
Lombard 900&
2249)
.Volume
164
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4538
Johnson President of
Stains of Savings Bond Program
By hon. John w. snyder*
Secretary of the Treasurer
Dime
J
•'
1
'
1
At
Treasury Secretary, after outlining, objectives of savings bond pro*
gram as:
(1) a wider distribution of the public debt and (2) as an
aid against inflation, states thai although in first
three-quarters of
£ Bonds
fell
short
Trustees
Bank
of
of
r. ■ Johnson
The
employment,-and
emphasis
urges more
elected to the Office
was
•
the
press
sin-
my
„
__„K
tion
Mr.
of
z
j
t i
a
o
which
n
S;
has
;
•
been
"The
istic
f.
ness
as¬
.'We all have
>
served
aspect of
in
"y'y V~ \1
human
ment.
for
of
com-
-j' national 'problems.
P
are
'Hi
'
-
t~\
Treasury
j
,
,
;|
.
^Department has ?
m?m Objectives in promoting |
.s.
first is
!
to
sav-
continue
and, if
They
^The s.ec«ndK
objective of
In™ mm£ Pfn tSJn1S t?
f ^ in combatmg... inflation. It
a
does this by drawing purchasing
power off the market at a time
when goods are scarce—saving it
for a time When .they will be
abundant. The purchase of sav-
possi-J jngs
bonds
defers spending from
4° ftj^ker the wide distribu-J fbe present, when
in the
tion
•
savings bonds.
0
*4
the
,
performing a patri-f
-otid service and, at the same
time,
•are doing their
employees a real?
-favor
|
The
Keeping
ac"Jve Payro^l, the major objectives of .thb
Often at consider-] jngS bond program;
to themselves, these|
•able expense
*
citizenship and for a
thoughtful consideration of
munity which ownership of the
public debt wideare
continuing;, jy distributed is,, therefore, one of
John W.Snyder
-concerns
this
better
it would
con-
ownership of the pub-1 tribute to inflationary pressures;
1 to the future, when it will help
♦An address by gecY Snyder at f to maintain full employment.
^Savings Bond Rally for industrial!
Buying bonds now is like storAvorkers, St. Louis, Mo., Oct. 23,? dng up the waters. of a spring
'
■
-
-
..
.
J1946.
s,yK'
r
iC'
~
\
(Continued
i',
.
s
►
.
,
«
<
«
.
-
■
-
,
,T
' -j
,
..
v
t
(
.T i '..7
7>
2247)
on page
- ■■
•
,
,
#
i
-
,
Future of Textile Decontrol
W&KSI/
-
O f
does
has
si nee
and
a
of the
circles
Board
The Long Island
and is
as
for
of
Chairman
Memorial
Sees
of state
Regents of
for
tance bf the
must
humatt
impor¬
element are
directly responsible for many of
past
and present troubles.
What we.do about it now is going
to determine the fact of the free
competitive system, and therefore
the fate of individual ahd politi¬
a
cal liberties in America.
Since I have spent
York, and has held various other
chairmanships
banking
and
real estate circles.
in
exceed
The
dent
,
Seeking inor¬
reappointment
Truman
by
giving information and stimulatr
ing the wish to buy. In the same
way, institutional or goodwill ad¬
vertising has influenced human
attitudes and beliefs.
the
Business
Itself
Sell
our
—what
it
has, to date, made little use
this trustworthy instrument to
of
sell itself to the public. The
tribution
the
and
Young as a member of the Civil
Aeronautics Board was announced
of
the
has
and what
done
me
industry.
hardly need
age
family—must be presented so
The
,•
can
understand.
of
science
*:
economics
and
what we
call
goods
ideas
the
operations
the
profit system are intimately
of
associated with human realities—
*An address
by Col. Strassman
in Washington on Oct. 24, accord¬
ing to advices from the Associated
the Institute of, Internal Auditors,
Press.
New York,
the getting of a
at the Fifth Annual Conference of
ing of
Oct. 7* 1946.
.
a
living, the found¬
home, the educating of
(Continued oh page 2239)
I
no
to speak on
My position
the future of controls in the
that subject is
on
so
securities.
well known
«>-
i
\
I
''
1
matters from the
heartedly
groups
relaxing
trols
| fast
just
sible
"tent
"
as
cons s-
of
tion made
| the nation. So
the
f long as I am
Administrator
least
bf
CPA, that
will T bey my
"aim.
r-
Thisyeryy"
•f'i.
Vevoking.iqthe;
D.
Small
style/•:>
order, L-85. You cafi rest assured
that the othef textile controls
are
being 1 cdntinuc>usly{- re-examined
fo that" riohe of them will be
::' y;«;.■>y•
coitrse,
Of
about what
need"
you
; i.■
we
this
means.
might
farmer
c
in
Pittsburgh,
not
Pmay
disagree
"point of actual
What
be
Kansas,
or
i.i\
li
v
^1
'
'
A i
'v\l\C"v
-
•
\ ''i1.1
v
v-v a""'* -/
Y'S&iii
v
*
>• \r^k
1
1
'
$25,000,000
Pacific Gas and Electric
by
our
First: and Refunding
consultants from
in
Order L-99
has
Series P,
been
Company
Mortgage Bonds
£%%, due June 1, 1981
Dated June l j
a
is
useful to
useful- to
a
1946
;
•
j
V':
y'
Background -of. Controls Vk y
Lei
fore Cotton Textile Institute, New
Vork Cityj Oct. 23, 1946.
me
/sketch bTief iy the< back¬
ground of the controls-which
affeef your industry: v L-99,
now
the
freeze^ first came into being
in April of 1942 when shortages
loom
of .specific
first
ously.
cesses
drop
y*An address bv Mr.'Small be¬
with
Price
tOOi$Q%and dctrued interest
soohy.-
uses
m
concerned
concrete action will be taken vefy
a
workman in
housewife
agencies
te^lilfe problems, and I hope that
:
-
•
make
textile industry for at
partial lifting .of the loom
rnent,
re¬
tained beyond the point of actual
/
and
solicitation of any offer to buy these
or a
,
are
4 heed.
' r<''* * |
i *
receiving careful study.
A pro-4
posal outlining, their recommen¬
dations is circulating this week
among the various other govern-,
women's■
;
nation
cotton
controls
,
Vveek; we"
the
I'm glad to be able to tell you,
however, that the. recommenda¬
the
well-being
in
*
offer to sell
standpoint of all
according to the oest
interests of the largest number of
people.
pos- ■
with
CPA must consider these
an
The offering is made only by the Prospectus.
its decisions
con¬
•; as
>
Peoria.
in
?
.
'
repeat it. I be¬
lieve whole¬
The
in
in
resulted,
to
fabrics.for
began to
be
Far
East,
v
»
}■ I
'i(
*
>■
r
;
/
•
forced
the
its
(Continued
first
*
'
■
be obtained in
.
any
'
r
,
<\<
•
/"T
v"ir
IT
State in Which ihi& ahnbhrtbeiiieht
"A
--
UrculUted
'w,
lawfully offer these securities in
'
HALSEY, STUART & tO. INC.
seri¬
and
suc¬
production
2241)
'
OTIS & CO.
the
government
on page
■
from only such of the undersigned dtid'othkt dealets as rriuy
;,x'
WM.
burlap shipments which
establish
>,
(iht IProspectus mufy
military
felt
early Japanese
the
::
■QpK
.'October 29, 1946
it
do in the future for the aver¬
which
tangible
intangible
story
business system works
can
production and dis¬
This announcement is not
You have asked
bus¬
It is ironical that American
basisifor business slump in future and
concludes best way to convince people controls are no
longer
Heeded is to produce and sell a maximum of fabrics
mostly heeded.
cotton textile
to
Public
of how
ble .the mass
M.
-
Should
phases of business activity., Pub¬
Presi¬
purchasing
iness
CAB
Clarence
of
markets. There
mass
successive and economical tool for
licity is not iherely the icing on
$440,000,the (business csjte—it is the basic
on
mass
be
plus a widespread knowl¬
edge of and desire for more and
better goods and services. Product
advertising has proved to be a
than $385,000,000.
more
also
piques of these operations with all
Bank
of
Brooklyn, is the largest savings
bank in Brooklyn, and the fourth
largest in the United States, serv¬
ing over 260,000 despositors with
tooj
distributive
latipn, to .economic theory, and. bus¬
iness practice, and to feel the
necessity for integrating the tech-
Savings
a
power
conscious of Iruman realities in fe^
life
as
development of production
techniques alone
and
the
self-ad¬
ef¬
own
party.
or
cannot create
most of my
editorial, advertising
and public relations fields, it,: is
natural for me to be especially
in
free man—not
a
understanding
our
Brook¬
and
as
The
of
Group V of the Savings Bank
Association of the State of New
resources
mind, is the idea of
my
forts
C6l. Strassman
other
impor¬
more
the individual's right to aspire to
to and lack of
Lt.
Director of the New York Congre¬
gational Home for the Aged:
He is a former Chairman of
Dime
even
of
self-improvement
andvancement through his
many
Clinic
Young to Stay
dinate profits because of shortages, and defends textile
exports in
'face of domestic sbdrtages, on ground they obtain fojr us needed
foreign materials.
tant, ..to
But
sharply
Americans
and file
rank
countries.
Indifference
.
The
the
ingredient which has made possi¬ that all
production conirols will be relaxed jiist as fast
as
possible,- consistent witb well-being of nation. Contends* al¬
though textile production has been oil upgrade, there is still short¬
ages both in industrial and consumers' goods, and heavy demands
Warns producers against
from
which
.average
timately af¬
lyn of the United Hospital Cam-paign.
He is Treasurer of ^ the
Polhemus
or
differentiate
loss statement,
but which in¬
a
College Hospital
Administrator,
for textile will continue.
as
serving at the present time
General
sheet
profit and
^civic, philanthropic
financial
Total
By JOlIN D. SMALL^
Civilian Production Administration
served
years, Mr. Johnson now is Execu¬
tive Vice President and a mem¬
ber
bal¬
inclined to visualize this
conveniences
fects them.
also
in
ap¬
ance.
January 1932.
Active
not
are
p*
the
in terms of the material comforts
and
is
pear on a
member: of the Board of Trustees
deposits of
CPA chief asserts
•
Johnson
We
ele¬
This
item which
an
v
more
eco¬
:—
*
make up what we thing of as
American standard of living.
nomics—the
offi¬
positions
including that
George C. Johnson
fundamental
a
cial
"
^
like to make to your thinking'
of American business deals
primarily with <?>-
,
1917,
Secretary
represent arefrom July, 1929 to
January, 1932,
doing to for-' strong, enduring tie to those al-j Treasurer from
January 1932 to
lyard ihis. pto-i ready existing^;'It gives us an-1 June,"j; 1946, and
Executive Vice
gram}J O'nd to other common interest." It makes .President since June 1946.
Mr.
.
iness concerns:
'
•
has
various
us
thank the bus¬
"
about the present and future problems
Dime"
and
hardships produced either by abnormal conditions or unrealgovernment policies.
Defends past and present record of busiand concludes industry must battle against ignorance.
The contribution which I would
with
since
.
of us are voters. Many of us have
fought as soldiers. When we" are
also bondholders'it adds another
you
Philip A.
Mr. Johnson
many ties linking
with our country. We are citth<
tneorgan-j izens and we are taxpayers. Most
and
i
what
our economy.
and
Benson.
tain an important element of sta-
people |
•you
;»
Asserting indifference and lack of understanding are responsible
for many past and present troubles, Col. Strassman
urges business
should sell itself to the public, and not be
merely satisfied with
making and selling things. Attacks rule-or-ruin trade-union policy
.and promotion of class and group dissensions that stifle individual
initiative, and contends business has been blamed for dislocations
'
loss of the late
to shifts in
In doing this, we main-
cere;apprecia-j. bility in
by
sudden
sociated
lic debt.
ex¬
va¬
recent¬
ly created
i
But, first, 15^
to
President
cancy
The savings bond program of the Treasury Department is very
close to my heart. It is a
program that I am always happy to discuss.
want
f
o
payroll plan.
on
Savings
George C.
to. fill the
redemption by about $800 millions due
mainly to liquidation by small denomination holders. Ascribes
Vice-President, Ward Wheelock Company
Dime
Brooklyn,
of
declines in sale of E Bonds to disturbed conditions and
By LT. COL. RALPH K. STRASSMAN*
meeting of the Board of
a
purchases exceeded redemptions by $900 millions, sale of
year
The Battle of Industry
Savings Bank
*
1
.
E.
'
POLLOCK
■
-
&
BLAIR & CO., INC.1
CO., INC.
.
r
*
a.-;/,,.*#.
higher, but
By E.
A.
VAN
As
we
rowings, which net mOre profit to
DEUSEN!
approach the close of 1946 it is of interest to examine the
trend of significant bank
assets and other bank figures during the
first three-quarters of this year and to compare them with similar fig¬
ures during the same period last year.
In Table I aggregate
figures for a group of 15 leading New York
City banks, as reported on their quarterly statements of condition for
1945 and 1946, are presented.
■"""■!table
Fifteen
i
York
New
.
'
,
.
Loans &
$25,155
Discounts
26,514
24,599
Quarterly
1945____'
average:
$5,416
15,967
14,947
4,541
4,664
$22,399
6,878
24,362
16,003
4,587
;
23,990
22,034
,
$5,547
$15,472
28.163
21,120
6,629
5,534
,/•'
$4,678
$22,451
4,608
15,195
:■?.
$24,996
I
12-31-1945__-___
"borrowings.", For example, in
1945 governments held by the 15
banks represented 69% of their
total earning assets,
while this
year they represent 64.5%; loans
and discounts, on the other hand,
.represented 24.3% in 1945, com¬
pared with 28.5% this year.
Turning to the member banks,
moved from $3,433,000,000 to $3,-
it
that
found
is
in
1945 govern¬
represented 69.5% of total
loans and investments, and 66.5%
ments
1946; commercial loans repre¬
574,000,000
on
Oct. 23, 1946.
The 15 banks used in this study
are:
Bank of Manhattan, Bank of
New
York, Bankers Trust, Cen¬
Hanover,
Chase
National,
tral
Chemical Bank & Trust, Corn Ex¬
York
Trust, Public National and
United
States
Trust.
3-31-1946_______:
25,790 1
9^-30-1946
_
14,232
$4,618
•
<
23,468 %
4,569
6,2611
21,762
6,086
13,133
5,836
20,514
5,599
$6,439
$22,526
$5,645
.
$25,930
Per
+
,
—5.6%
+ 3.7%
16.1%
+
0.6%
+
+
22.2%
of
1945,
their
year, which!
banks
have
would imply that the
not
been
quite
as
fully invested as in 1945. This im¬
plication is substantiated by the
higher than was the case in 1945, fact that average total earning as¬
The decline in government hold¬ sets represented 89.6% of average
ings this year has been uninter¬ deposits in 1945, whereas thus far
rupted, and has resulted in a in 1946 the ratio of these averages
quarterly average 5.6% below last has been 86.9%.
Further study of the compara¬
year. This loss, however, has been
offset by an increase in loans, as tive position. of the banks this
is indicated by average loans and year vs. 1945 is afforded by Table
discounts being 16.1% higher, and II, which presents figures as re¬
this has carried through to total ported by New York City Member
earning assets, which are 0.6% Banks, on dates nearest to the
higher. Cash also is higher this even quarterly dates.
quarterly
average
volume thus far in
1946
is
3.7%
TABLE II
New
York
.
City Reporting Member Banks
Date—
Government
!
2,241
.
20,524
22,824
Quarterly average:
1945—
$15,078
,
1Z-26-1945—
■3-27-1946
waiting
period
meaningless.
6^2$-1946.
We would like the, SEC to grant
the underwriters permission to is-
Per
cent
1946
average:
:
change—
gOkvernment holdings
are
3.6% be¬
low- 1945, compared with —5.6%
fqn
the
loans
are
loans"
15? banks. ! Commercial
29.5% higher, hut "all
-16-4% higher, which
with the 16.1% of the
are
compares
15 banks for loans and discounts.
Total
loans
and
investments
are
tained in the original registration
immediately on registra¬
use of the
document mentioned by Mr. Caffrey for the purpose outlined by
papers,
tion.
We would make
him but
we
do not think it neces¬
to attempt to reach all per¬
sons who might possibly have re¬
ceived a copy of the red-herring
prospectuts. In
the very first
place, there is no way of knowing
really just who did actually get
the
red-herring
prospectus.
A
red-herring prospectus can have
sary
23,817
22,765
served
5,845
-
21,182
;
5,657
$3,02?-
■
is?
+
29.5%
1,4%
.
\
V
-
-
$6,284
+16.0%
19,940
v
$21,926
;'v
person
Higher
being solicited
to buy
or
by
attempting
to
get
copies of the document except to
those who are actually interested
in
buying.
in that each of the various mem¬
information aboot
stock issues to pros¬
pective customers. A summary is
too much in the "twilight zone" to
+1.4%
compared with
0.6% for total earning assets of
the 15 banks./,
•
\ ?
as
One would conclude from these
figures that net operating earn¬
ings of New York City banks
should, in most cases, be at least
as favorable in 1946 as they were
in 1945. Operating expenses are
It
is
sible
also
inconsistent for
insist
on
the
the widest pos¬
distribution
the
of
red-
then
far
be
new
anything
definite. Under¬
writers should be able to reply to
business questions of their cus¬
tomers without the necessity of
first having the text approved by
the SEC.
think that, just as the IB A sug¬
gested to a Congressional commit¬
tee
five
years
SECURITIES
STOCKS
Mi>m)x>n
New York
Stock
Exchange
Bell
1891
18 Clinton St., Newark
BArelay 7-3500
Teletype—NY
Rippel & Co.
Established
.
Telephone:
;
1-1248-49
(L. A. Olbbe. Manager Tradine Denartnwot'
proposal is a short
step in the right direction. As I
see it, by the time the SEC for¬
wards its first letter of comment,
little opportunity remains to
the
distribute
red-herring
pros¬
pectus in the thoroughgoing;man~
ner Mr. Caffrey would like to see
Our Boston office is pre¬
it done.
paring
a
.
for instance, do not become avail¬
question and to make recommen¬
able to the man
dations
doesn't hear about it in time. And
Firms which neglect to give con¬
sideration to this matter now will
who, being some
distance from the active market,
hearing about it involves receiv¬
ing a copy of the prospectus!
Many investors are literally fro¬
out
zen
make
desirable
of
this way.
markets
their
from
basis
little
have
experience.
for
complaint
later.
\
in
The thing just doesn't
sense.
The
had
SEC has
herring prospectus, as Mr. Caffrey numerous complaints from these
and at the same time to investors and so understands the
prohibit an underwriter or dealer situation thoroughly.,
from soliciting business. The wid¬
Just as the IB A argued before
est possible distribution of a redthe Congressional committee, I,
herring can only be interpreted too, feel that any company whose
solicitation.
as
securities
ness
are
financial
listed
on
Ex¬
an
change should not be required to
state
undertakes and the numerous re¬
.
Comment No. 10
Mr. Caffrey's
Comment No. 1J.
.
anew
the nature of its busi¬
to divulge details of its
condition. % The £ SEC
and
Stating
my
I want to say
isn't
position as a dealer,
that the public just
in
interested
prospectus.
a
2, N. J.
MArket 3-3430
N. Y. Phone—REctor 2-4383
and
ports it issues from time to time
without Congressional order.
<
data
investors
can
obtain
all
the
they want from them now.
Besides, just who does read all
We feel that the part of Mr. the statistics put out by any relia¬
Caffrey's proposal pertaining to ble company floating a new issue?
the possible use of a summary Investors just take it for granted
should be dropped altogether.
A that their business affairs are all
!;y
summary
is
something
about in order.
•
which there should be
tion. Just what is
a
no
legisla¬
summary, any¬
way?
It was not the intent of
Congress to prevent the use by
underwriters of "other means" of
WHOLESALE MARKETS IN
BANK and INSURANCE STOCKS
on the good judgment and integ¬
rity of the dealers. The dealers
themselves, of course, should have
such information
as
the customers
want, but it is not easy for
even
the dealers,
despite their
store of knowledge of the busi4
ness, to interpret the data in the
average prospectus.
Ideally, the
waiting period should begin with
the day the red-herring prospect
may
It doesn't appear
to me that'Mr.
Caffrey was too serious in sug¬
gesting the possible use of a
summary
in connection with a
red-herring prospectus since he
about
a
coming offering.
How-f
this is impractical because
conditions
can
change,
sometimes over night.
Perhaps
the summary idea makes more
sense.
The chief difficulty in this
whole matter, however, is that in¬
vestors disregard
even
the un¬
ever,
market
favorable data- that is made very
plain to them. A recent prospec¬
tus gave the book value of the
security of the company as near
$2. The issue sold at $5 a share
practically answers his own ques¬
tion
in the negative by citing
Bankers
67
WHITEHALL 3-0782
^
CHICAGO 4
BOSTON 9
JO Post Office Square'
331 S.
MUbbaro O0SO
franklin 7538
VSr2<ft
PRIVATE
CaSatU Street
CG-/OJ
WIRE
Wall Street
Head
NY 1-2879
West Sixth Street
MIchioan 2837
LA-toSb
the
Government in
BAN FRANCISCO 4
Puss
sr-aJ
'
:
SYSTEM
26, Bishopsgate,
London, E. C.
Subscribed Capital——£4,000,000
Paid>Up Capital
Reserve
The
Bank
£2,000,000
.£2,200,000
Fund___
conducts
banking and
every
exchange
description
business
TELEPHONES TO:
Providence, Enterprise 7008
•
Portland, Enterprise 7008
Trusteeing .and Fv*r.utor6hips
also undertaken
shortly afterward to around
$8.
Now it is down to $2.50.
the
of
use
fye red-herring
■
of
>\
pros¬
pectus as suggested by Mr. Caf¬
frey—or in * some other modified
form-^-withput
In India. Burma. n*vlnri. Kenya
Colony and Aden and Zanzibar
^
•uttcb 6867
*
Office:
Branches
Building
CONNECTING: NEW YORK, BOSTON,' CHICAGO,
CLEVELAND, PHILADELPHIA, LOS ANGELES, SAN FRANCISCO
-JCartford, Enterprise 6011
r
Kenya' Colony and Uganda
LOS ANGELES 14
4t2
tn
ket
employment. I believe the
SEC has the/legal right to permit
to its
of INDIA, LIMITED
INCORPORATED
and jumped in value on the mar¬
what he thinks are disadvantages
NATIONAL BANE
GEYRR & GO.
new york 5:
•
Consequently, I can't see just howMr. Caffrey's proposal makes a
particle of difference one way. or
the other. Customers tend to rely
early distribution of the red- pointed out at that time that a re¬
herring prospectus. Congress has vised + statement was ? necessary
saddled upon the SEC the resnon- because the business conditions of
sibility of administering six Con¬ a company can change with the
gressional Acts. But the SEC does years.
However, most if not all tus comes out.
In this way the
make its job more difficult than it these
companies
issue
regular customer wpuld haye Brpplq op-,
}
needs to by the various surveys it statements of firiancial condition'
portunity to learn all the details
NEW JERSEY
U« BROADWAY, NEW YORK 5, N. X.
ready to pass out.
ago,
an
and
Laird, Bissell & Meeds
red-herring prospectus which it Is
very
Mr. Caffrey's proposal is a' very
definite step in the right direction
but it does not go far enough.
I
first letter of comment in time for
J. S.
#
Comment No. 8
that it is
not always the SEC's fault if de¬
lays develop in getting out the
INSURANCE
a
know
very
proposes,
We realize, of course,
BANK
syndicate group would
in advance just how
it should go in distributing the
disseminating
•
■
SEC to
;
should permit syndi¬
letter to Mr. Caffrey in
underwriters which, among other things, the
should be permitted to discuss a desirability of permitting the use
new
issue with any one of the of a summary in advance of a
customers
they feel
would be red-herring prospectus is pointed
a
circulation
unknown
to
the interested—short of
This
summary,
we
executing any out.
feel,
underwriting house. Persons who aqtual contract or sale—anytime should be distributed at the time
receive a red-herring prospectus within the
20-day waiting period, of registration. In general, though
pass it on to others and trace of t" As the
system works now, out- the proposition advanced by Mr.
it is lost.
Underwriters should
of-town investors especially / get Caffrey does not go as far as we
very definitely have the responsi¬ little if
any chance at all to par¬ would - like, we hre>* inclined? tcr
bility of making sure that a copy ticipate in new offerings. Issues go along with it. This is the time
of
the document reaches every
that are sold out in 15 minutes, for all underwriters to study the
6,838
-
2,865
It. will be observed that average
con¬
6,796.
2,971
3,433
':-—3.6%:
prospectus,
information
the
on
who himself seeks to make a pur¬
chase.
No
practical
point
is
14,289
$14,529
red-herring
a
based
21,434
.
•
Comment No. 9
SEC
bers of
coming
course,
$21,626
■
Quarterly
of
$5,398
13,108
"
is,
5,361
2,838
15,849
/14,869
—
underwriters
the
*
specific ar¬
regarding the exact
participation which all houses are
to take in any new issue once it
is registered.
This has a bearing
on what Mr. Caffrey is proposing
(Continued from page 2203)
:
2,301
f
...
which
themselves must bear.;
rangements
by
Caffrey's Red-Herring Plan
$2,338
14,824
-
.
.
$21,724
6,247
v
9-2$-1945_:
■
Investments
(000,000 Omitted)
$2,464
$5,521
2,346
4,463
14,948
15,481
;
6-2T-1945_w:-_^:,-..—
All Loans
Loans
$15,060
3-28-1945
Total Loans
Commercial
u. s.
among
is
higher than
Washington. All
that Washington has been' able to
see is the spread, representing the■
so-called profit, of our business.
Washington has thought that just
no effort at all had to be expend¬
ed to get this money.
In its cal- f
culations, it did not give sufficient
consideration * to
the
frequent
!
Underwriters Encouraged
use
It will be noted that, despite the
decline in deposits since the end
underwriters
cate managers to make
6,151
•
$14,600
23,960
;
6,953
+
15,033
25,808
'i
6-30-1946_____..
the
the average for
'•••■
•
'
■
..
known the average level of mor¬
change, First National, Guaranty
Trust, Irving Trust, Manufacturers
losses
Trust, National City Bank, New
Cash
(OOO1,000 Omitted)
23,717
note further
1946, commer¬ ality in business conduct
cial loans of member banks have
The
ing Assets
$15,780
6-30-1945.
It is. pertinent to
that since Sept. 25,
is something that can not be leg¬
islated.
But if the truth were
Total Earn¬
'
U. S. Govts.
3-31-1945.
in 1945, but repre¬
this year.
government
in
•
Deposits
9-30-1945-
do
10.8%
'City Banks
:
v
Date——
than
banks
the
Bank Stocks
—
sent 13.8 %
a greater proportion:
earning assets this year are
represented by commercial bor¬
Bank and Insurance Stocks
This Week
sented
of
law.
'
'
•
•
■
any
change in the
in
,
a
prospectus is readily avail¬
able in better form elsewhere.
is
-
did think that event¬
ually the SEC would change its
attitude toward the underwriters.
For too long now, there have been
too many people in Washington
and Government circles generally
who thought that the underwrit¬
ers were a lot of crooks.
Morality
I always
So
often all the information covered
a
difficult
to
in
gauge
public's interest in
issue.
Our
shelves
It
advance
any
are
given,
full
of
prospectuses which people never
asked
for and
hand,
we
calls
for
that have
keep
yet,
on
the other-
getting repeated
prospectuses
of
issues
long been sold out.
,
Volume 164
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4538
.time
Free Enterprise and
and
gives
considera¬
more
tion to the advertisements.
not
that
say
times
seven
weekly
valuable
as
I will
papers
are
Explains Excess Profits
daily
as
of the
same circulation, but
they have some advan¬
tages. No one reads a daily paper
the day after it is issued, but the
papers
By H0N- TOM cP
U; S. Attorney General
'
>
.
weeklies
In defending and extolling free enterprise, Atty. Gen. Clark points
out anti-trust laws were enacted to protect our system.
Attacks pri¬
;
vate
monopolistic practices and cites recent instances such
as sup-
In
not there is
tion
;
and
small
of
govern¬
the
building
best
of
up
the
One
investments
today
a
small town daily, or
weekly, paper in a self-contained
agricultural community.
r
v
market will not
rigged against him and that
his competitors will not be per¬
mitted to combine to destroy him.
be
This
the
should be
expect that the
■
Freedom of
opportunity is
great Ameri¬
can heritage.
or
World War III, the
a
interior communities.
your
life.
maxi¬
a
Whether
Federal Government must prepare
for it by encouraging decentraliza¬
heritage of freedom stems from the Pil¬
grims who rebelled at restraint. And in my State of Texas, the
plain smen
<§>
he also has the further right to
knew the free
Massachusetts,
population.
is
deep-rooted-American
Evans, member of Excess Profits Tax Council, tells of
work of reviewing upwards of 40,000 claims for refunds.
Urges
taxpayers check carefully amounts of relief claimed and
pleads
more and sincere cooperation with the Council, v ;
w
.
Free enterprise is the American way.
;.v
in
mum
the trend towards concentration of economic power." Concludes
American businessman who plays game according to American
rules has nothing to fear, and, with removal of price controls, it is
expected business will not substitute private controls for
ment regulation.
;v:
large cities have reached
Peter Guy
•
seven
Small town papers will become
more-and-more important.
Many
agreements and other cartel arrangements. Holds, however, most
businessmen play game squarely, but insists "we must untrack
.
during
days.
g pression of inventions, illegal patent licenses, division-of-territory
f.-\
read
are
Advertising and Taxes
>
Notwithstanding the importance
of
advertising in keeping up em¬
ployment, statistics show that em¬
ployers spend the largest sums for
Tax Settlements
n
surely
% for
The newly established Excess Profits .Tax
Council consisting of
fifteen highly
pects to lunction in such a
manner
Cases.
to
as
reduce
qualified attorneys, accountants, and economists,
be
need¬
settling
cases
should be withdrawn in order
own
p r o c e
devote
dure,
Peter
Guy
Evans,
ber
1
t
e c
Where
not be
the
Council,
u rer
ast
down
when
thereis
stated
to
the
can¬
pro¬
appearance
Council.
in
step
This
the
is
the consideration
the
ternal
rsity,
Peter
Guy
Evans
Revenue,
course,
Columbia
U
ive
to
agreement
taxpayer's
the
claims within
at
ment is not
n
effort
on
advertising
when more employ¬
needed, while they cut
advertising v expenditures
field
a
for
before
and
Finance
and
reached, procedure is
vided
and
Taxation
time
meritorious and qualifying claims.
mem¬
of
will
opportunity to cor¬
complete claims already
an
filed in rough and skeleton form.
Groundless
claims,
he
urged,
by
under its
However,' taxpayers
given
rect and
less Tax Court
litigation
ex-
where
agree
Oct. 24
still
much
with
a
he
of
of
In¬
advised.
Of
taxpayer does not
Council's
take its
can
Bureau
decision,
case
to
it
Tax
the
unemploy¬ at the Fifth Annual Institute on
Court.
\
• ' 3 ■ ■
ment.
The
average
employer Federal Taxation of Rhode Island
enterprise
privilege; to guard and to defend
seems to. do the
He stressed the fact that the
wrong thing, at State College at The Providence
it*.
system, every
Council will make every effort
the wrong time, when spending Plantations Club.
We Americans believe that the
man
has
the
to
settle
claims
on
reasonable
The Council, said Mr. Evans, is
free enterprise system is the best money for advertising.
right to start
One of the best ways to avoid entrusted with the gigantic task grounds, so as to avoid unneces¬
his own busi¬
way to encourage and to develop
sary time-consuming litigation.
new
ness.
He has
industries, to advance art the "boom or bust" policy would of reviewing the countless issues
He urged all taxpayers to re¬
and science, to raise the Ameri¬ be for the government to allow a contained in some 40,000 claims
the - right
to
can
standard of living, to dis¬ special tax reduction on five-year already filed by 18,000 taxpayers. consider their claims and to reput his ideas
check
the
amounts
of
relief
tribute. the
most
and money to¬
goods to the contracts for advertising expen¬ With claims yet to be filed, he
Tom C. Clark
Where a claim is un¬
greatest number of people at the ditures. Then, instead of spending predicted that their total may claimed.
gether, to take ■
reasonable and inflated, it should
lowest cost,
a
chance
on
^
60,000
or
perhaps even
and to assure the their surplus on advertising this reach
be
adjusted
accordingly.
Tax¬
making money or losing it. He is preservation of our democratic one year, with very little left for 75,000.
form
of
lean years, the advertising appro¬
limited only by his imagination,
government. We have
An administrative and technical payers want the Council to be
both reasonable and liberal. The
his industry and his daring. But never waivered in this belief.
priations would be spent over a body, the Council has full author¬
Council is asking the field com¬
The antithesis of free enterprise five-year period.
This would do ity to interpret the law, to recom¬
In
tradition.
our
is
It
duty,
our
our
■
■
•
•Address by Att. Gen. Clark
Associated
Industries
leads
be¬
of
fore
of
have
much to prevent a
ing the next few
depression dur¬
years.
CINCINNATI,
A.
Advertising
,v*;'
V--.*1';'*•
>'•-
-V
.
<■
'•
<v,
as
\r'"r ''5.'•:?'}
'
'•
culation may
be better advertising mediums than large dailies, and
advocates special tax reduction on five-year advertising contracts
as one means of keeping advertising constant and preventing de¬
»
pressions. *§0]
corporation. 4 Officers
a
im-<S>-
economic
In
Therefore, although I see no rem¬
fact, it has be¬ edy for the situation, advertising
come
a
part is probably directly responsible
of the employ¬ for many labor troubles and un¬
ment
cycle necessary strikes.
portance.
which,
n
for
previously partners
were
about the circulation of the
in which they place adver¬
papers
number
em¬
small
ployed
that
turn,
hold up, or
Roger W. Babson
so
they willcbuy
keep
and
'
the
ball
Labor Troubles
The above economic theory has,
however,
largely responsible for many labor
.troubles today. In order to have
Craig tiallum Inc. Formed
things
which they
Thte
have.
families
must
have
do
requires
more
not
that
money
in order to fulfill their desires.
to
papers
culation.
this
is
who
I
are
than
get
given
a
In
the
to
advertisers
employing the agencies.
large city
with his wages;
children have' so
more
that
of
-
money
he
has
been, satisfied
have
lingske
that
24,
Tidende"
Count
Bent
reported
an
agitators.
small
engaging
Robinson, president and treasur¬
made
to
rious
and
er
and
Mr.
J.
M.
Robinson, secretary.
Robinson
nected
with
was
Louis
formerly
H.
con¬
Whitehead
lax
relief
processed
:tases4V'34
and
He
being
will be
provisions.
now
refunds
claimants
with
qualifying
merito¬
relief
tax
fe-343:;;^
The Council will not, Mr. Evans
warned, consider poorly prepared
This advertisement appears as a matter
\,
"4
M
n M
cial
adviser
to
the
Danish
second
from
1924 to 1942 by
& Co, Inc., in New
J.
P, Morgan
York City."
,
'
The "Sun" added:
"Count Ahlefeldt-Laurvigen left
the
Morgan
company
become
financial
Danish
Minister
in
1942
attache
-J to
the
of record only and is under
no
The
circumstances to be construed as an offering
offering is made only by the Prospectus.
New Issue
130,000 Shares
Rheem
Manufacturing Company
Common Stock
Par Value $1 Per Share
Price $21.75 per
share
Copies of the Prospectus may be obtainedfrom the undersigned only by persons to whofh
undersigned may legally offer these securities under applicable securities laws.
the
■».
,
j
Remember the Weekly
Newspapers
''
October
<
Statistics show that the reader
of
small
Blyth S,Co., Inc
available
,
city
papers
has
-,
more
25,1946.
to
to
the
United
States."
advertiser to
the
Gov¬
"Ahlefeldt-Laurvigen had been
employed
°f t^se Sharesfor sale, or as an offer to buy, or as a solicitation of an offer to buy, any of such Shares.
day which readers have.
........
today
Ahlefeldt-Laur-
ernment in the United Stated.
hope
to attain as close an approxima¬
tion as is possible to the intent
of Congress in enacting the spe¬
added, that claims are
with the
paper
Asso¬
vigen had been appointed finan¬
agencies • and newspapers
performed wonderful feats,
they have not increased by
time each
but his wife and
prodded him for
labor
promoting good rela¬
tions ? and
better
understanding
between the
taxpayers and the
tising
to buy more things
been an easy prey
unprincipled
Oct.
"Sun" said; "The newspaper 'Ber-
of
cial
does not give sufficient considera¬
tion to the advertisements. Adver¬
one
has
of
circulation.
It is better for
worker
often
date
distribute his products over a large
number of cities rather than con¬
studies which I have made,
himself
Under
ciated Press advices from Copen¬
cir¬
insist, however, that
unfair
one
same
but
it is evident that the wage
Danish Fin. Aid in U. S.
'
oJ;
the \ settlement
in the securities business from of¬
attractive to make centrate on one city. Also, the small
people buy and thereby hold up papers are read more thoroughly.
employment, this advertising must The average large city newspaper
make
people - dissatisfied
with has so many pages that the reader
what they now have as well as goes through them hurriedly and
want
coopera¬
The Council is most
fices at 156 East 52nd Street, New
York City.
Officers are John P.
advertising
now
sincere
tising.
difficulty which is
one
desirous
and
hagen published in the New York
in
role
these claims.
fine
tion," he pleaded.
mittees, made up of local revenue
agents with highly specialized ex¬
perience,
qualified " background
and training in excess profits tax
relief cases, will play an impor¬
tant
your
com¬
committees, he asserted.
Twenty small city papers may be
worth Jo an advertiser far more
i
vs.
the
f He pointed out that field
mittees to cooperate. "We ask you
to be reasonable and to continue
4 It is the Council's earnest
news¬
will
increase, the
in
in
firm.
establish
to
Circulation Not Everything
Of course, it is very much
easier for an advertising agency to
bill each month one large
city
newspaper
than to bill twenty
which,
goods
t Advertising
president;
and
There is
g
a
cause
demand :
.
Hinsch,
Emery Eyler, first vice-president
secretary; and Neil Ransick,
vice-president and treasurer. All
a tendency among ad¬
appropriations vertising agents to talk too much
adver tis i
to
rules and procedures, Mr.
declared,
re¬
quires greater
goods
rolling. 4
A.
are
and
Craig -Hallum Inc. Is
Advertising which started in a very simple manner "(largely 'hy
patent medicine manufacturers) has become of great national and
more
&
4^
mand, calls attention to its responsibility for many labor troubles '
and unnecessary strikes.
Holds weeklies and papers of small cir-
Incorporates
OHIO —Charles
Co., Union Trust
is now doing business
Charles
3/-A"*'- .v'*\• !• *•'
Mr. Babson, in pointing out function of advertising as creating de¬
'
Hinsch
Building,
ROGER W. BABSON
:•••*
changes,
own
Evans
2224)
on page
Hinsch & Co.
By
mend
its
?J
of this.
(Continued
,
domination
seen tragic
government
examoles
Massachusetts, Boston, Mass., Oct.
24, 1946.
to
business. We
4
THE COMMERCIAL & FINANCIAL CHRONICLE
Thursday, October 31, 1946
Appointee) Branch Mgj\ for
Royal Bank of Canada
.
The
Royal
(Montreal)
of
Bank
Canada
tHe
announces
ap¬
pointment of W. A.
Hyndman as
manager of the Edmonton branch
following the retirement of J. G.
Nickerson who has held the post
since
1939.
Mr.
Hyndman
had
been
assistantmanager
at
the
Halifax
Branch
for
four: years
until 1944 and for the past year
-lias been located at the head office.
A PROSPECTUS ON REQUEST FROM
V
YOUR INVESTMENT DEALER OR
Distributors
V: ;.
63 Wall Street
:
Group, Incorporated
New York 5, N. Y
'-Vr?*'-'
Prospectus
your
upon
request from
investment dealer,
NATIONAL
RESEARCH
or
from
SECURITIES
&
First Colony Dorp.
Offers Dumont
CORPORATION
120 BROADWAY, NEW
Jos. J. Gatz
YORK 5, N. Y.
troit,
At
quite
Russell
H.
time
that
Hastings
there
was
cleavage b^tweeif the soman
apd brpker or
man. ; But
that, ov,er the
a
called
stock
Electric Oorp^ Slock
bond
:
An
underwriting group headed
by First Colony Corp.; on Oct.y 23
offered 94,000 shares of„10c par
value
common
stock
Dumont
of
Electric
Corp. - The- stock
was
priced to the public at $6.; per
share. Other underwriters iprlude
B. y. Christie & Co., and J.. H,
JDrass & Co.. I he.
The company will use the pro¬
-
ceeds
from
the
sale
of
25,000
shares. of the stock for the
pur¬
chase of property and equipment,
and the remainder, if any, Will
.be added to general working capi¬
tal.''. The balance of 69,000 shares
is being sold, for the account of
Jones
B.
Shannon
Prospectus from your Investment Dealer or
William Siler
J.
-l •:* 1' J- *";£•
/..•
;
^
pjumont Electric
partnershipv~-
Co.,
a
limited
years,, ha? disappeared; and, most
|r> ■>- Dumont Electric Corp. has no
financial I houses ■ pfvtb^ayare funded debt or bank loans. The
active
in;/both- phases of the outstanding capitalization of the
business.
HUGH W.LONG SCO.
INCOffOOa AUD
48
WALL
lOi
STRfcEl.
NEW
YORK
5, N Y
CHI'.AO-O
ANC.fUS
-r A
are
'.JrV;' .company, upon completion of this
dumber - of phafter members financing,^witl consist of 345,000
a.ctive
still
the: financial
in
field, ampng; them being Carlton
M. Higbie,-J. E. J. Keane, John W>
shares of
stockV out
issue
10c par value common
of- a total authorized
of. 500,000 shares.
Wathng, iyUliam Q. Lerchen, McThe company was incorporated
Pherson Browning, Leslie Allfngin New York on Jan. 12, 1Q46, as
jton, Fred FprcJ, Frank Nicol and
successor to Dumont. Electric Co.,
Stanley "JVilkinspn. Other names
which come to fmind as having a. limited ' partnership.
Dumont
been
particularly J active in the Electric Cprp. believes that it \s
formation ana the management of presently one. of the largest man?
the Club's affairs in the early days
are
Charles
Gordon,
D.
ufacturers of .capacitors, also com¬
jf\, Frarik
Bendi'x,/ Sidney monly referred tp
Hull;
Ernest
as
electric conf
Matthew
Finn,
Julius densers, for use in-fluorescent
Peter, Win. L. Davis, Harry M. starting switches and heating aid
Tingle, W. T. McFawn, A. J. Hood, devices. '
"
~
Kirck
G.
Bumpus, Herbert Ely
For the period from Jan.
21',
and J. A.' McLaughlin, father of
Russ McLaughlin,
the Dramatip 1946 to June 30, 1946, the com¬
and Musical Critic, who undoubt¬
pany reports a npt profit, after all
edly inherited from his genial
charges and taxes, pf $136,325.;
father some pf his flare f.Pr color¬
Small,
-
Prospectus
from
your
The
map
be obtained
local investment dealer
ful
or
Keystone Company
of Boston
50
Congress Street, Boston 9, Mass.
and
articulate
Semi-monthly
Two With J? A. Hpgle
held followed
were
dresses
'
by brief ad¬
among v the
early
and
speakers were
and
expression.
noon; luncheons ;
Abner
E. Larned
Edgar A. Guest.
For
years
more
than
30
consecutive
(Special
■
to
The
Financial
DENVER, COLO.
•.
Chronicle)
—
Garald D.
Bachar and Paul p.- Quammen are
now
connected with J.
A. Hogip,
the Club has been active in & Co., Equitable Building.
Volume 164
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4538
Southeastern
To Full
Employment
AMOS E. TAYLOR*
,N
.;////// /' /':¥:;
Economics, Department of Commerce ":
Director, Office of Business
Commerce Department economist contends with completion of reconversion and with increased production, Jther.e will be dynamic
?•■■■■■
ii, icies fo promote
an
increase in consumption.
The industrial and
turies have given
f or$>—
making a livmg and for
achieving and
"
*
■■
"
maintaining
a
of
of more than >$200 billion a year
by the second quarter of 1945 was
an unprecedented achievement. It
basic to
was
our
winning this
war
and to making it
possible for our
allies to contribute their share to
the outcome. We must remember,
This'
constantly ris¬
ing standard
life.
however, that equally impressive
was .the expeditious and efficient
to substitute transport of goods to the places
for the appli¬ where they were needed.
For more than a year we have
cation of mus¬
cular energy been in what we call the recon
the ^utilization version or transitional period. The;
main
of
objective of reconversion
.energy
t a ken
from policy has been the replacement;
of output for government use by
.J hp earth,!
Jrbin1: the £ea,j production for private purchasers.;
ati//rYbt://tiur; Some industries which made ma¬
m
e,c
h anism
has enabled us
*
Amos E. Taylor
experience with this mechanism!
has also brought home to us the?
;iact that the more intricate ft be-j
•comes the greater
is the danger;
of its complete breakdown if one'
or twp of Its wheels
^suddenly fail
fupc,t;our
J
;
Sunday,
been made:
'
Robert Garrett & Son6,
Md. i
the
larly
case
in shipbuilding/ in'
ordnance plants, and in maiiy of;
facilities for air/1
expanded
goods and services has
$een plated ip bold relief by our
producing consumer durables, .the {
task pf physical ^reconversion thti
wartime p^eriebce. The total oujt- volved delays and difficulties. On
jput 0 goods apd fjeryjcea'ai a rate the other hand, in siich industries:
as
meat: :packipgi Sprinting
and1
1 jfAxi * addres by; pr. Taylor at publishing, qnd /,dairy products
the ^megricah Marketing •Associa¬ manufacfure 'the physical-' recon¬
tion Convention, Detroit,- Mich;, version problems -were relatively:
(Continued on page 2225) '-%k
^/?4,1946.
Vice
Chairman:
Lemon,
and
ratf
Washington, D. C.
^
Secretary-Treasurer: Joseph W.
■•Sender/- Mackubin, Legg
.Com-
papy/Baltimojire1,
There hav.e been nominated for
election to the Bxecutive Commit
tee, in addition to the above offi
Julien H. Colli as
cers:
:,-W... F.eyton
Hey,
.
investment
,
Corporation of N.orfolk, Norfolk,
^a./Xfor ,3 years).,
•-V John:
<
Jr.,
Baker,
Watts :&-Co.'r Baltimore,' Md. (for
one
Redwood,
year) ex-officio;
Members
Committee were:'
:
Wm.
J.
Price,
.
Nominating
the
of
^
- •
3rd,
Chairman,
Alex/!
son, Rohrbaugh & Lukens, Wash¬
ington, D; C. : A';'■ >
'V t4
JHt. B. Dewar
The
Wm. Vaughan
•
William
Dead
#-
Hied of
a
This rate
(2)
to
as
pf ■ seventy-four,
;
,
,
Vice-Presidents—R
.
o
j?e r X
newsworthy.
W.
Baird', The Wisconsin Co.," IVtil- ^The; Palm Bea,ch Btitmore wiR
be the headquarters hotel','.'and' tne
WSukee; Julieri H! ,,Cpti,ihs, Julleh
.Collins A 1 [Cb., ChicagoHal" H. Whitehall, f which Is <a short-walk
Dewar, DeWar/ ftphertson &' Pan- away, jvill also he ayaiiable ^
fcpasf/' $'arii Ahtphrbi^ jMbert '#• needed "to accommbdate any over¬
Whitehall should he
flow.'-If the
Richards/^ Co., Los Angeles.
-y[
'
An
especially large attendance
are
assigned
there will take their lunehm
and dinners at the Biltmore.
rooms
eons
expected : qt the /cpnyjention, /.The Convention Program wiU
which it Is believed will tie the provide' for Convention Sessions
or open meetings of the Board
•Street. Both were formerly offi¬ most
qC
importapt' one since 1941.
cers .of Rayinond, BHss,
(Continued on page 2223)
/
^ere /are
•'
j^tatp
is
.
required $>y
WtMhouncfmmfisvotmtferto sell ora solicttatiqppf an offer tobuy these securities,
Tke
of
(hereinafter re¬
official rate")'
"the
shell not: be yaried by: eithey of
Contracting Gbvernmerrts 'ex¬
3E|pas<|i:itetdc Company:
the
ah obligation by each' con¬ cept after giving to the other, as
tracting party to furnish the other much notice as may be practicaWith its currency, provided it is
First
used' domestically
in, the : (3) In all territories where they
with¬ have jurisdiction the Contracting
in. "the exchange regulations" in Governments shall enforce the use
force in that iarea.'
Like other of the official rate as the basis of
agreements made since the Bret- all transactions involving a rela¬
ton Woqds Conference, there is a tionship between the two current
be
will jthe industry, such as prospective
the foreign financing, management of
This; the national debt, securities regu¬
Governor^
convention
Gordon, Kidder,' Peabody & Cpi, 1
:New ^ork; Carey B. ' Hip, ;Hiti used, members who
Leith, 30
&
sand
to
of
the
-
heart attack at fhe age
\On March 12, the Government of the United. Kingdom of Great
ferred
'
President—Edward Hopkinson,| it is felt that the deliberatidhs
NeV YP.rk §tock
ai the cpnvention will Jae par¬
tpe past fifty years Jr./ prexel & Co./ Philadelphia. / ' ticularly
membier. ;of {the
Exchange for
^Britain and Northern Ireland and the Swiss Government entered
into a monetary agreement prac-#-?—
—~~
tically identical to similar agree- sterling shell be Swiss francs
:
jne'nts already negotiated by Great 17.35±f £i:
Britain with other countries out¬
ride the Sterling Area.
ft pro¬
vides for an official exchange rate
•of 17.35 ;Swiss francs to the £,
to
S
Yaugtian,^C°.> t. 50
B^dwayy ^ew^ Ypijk City; f}$ a
%
'
Board
submit
Carey S. Hill
Vaughmi, /senior regqiar ticket for 1943-47.
ticket will he/ voled on at thfej lation, and the outlook for th<A
final session on Friday, Dec. 6,. Jiew capital markets. Coming soon
and will :be as " foBoWsr > ' ; v
!
after the .Congressional election^,
W.
partner of
with Burgess
keeping transactions within sjcope bf their respective polici^.: ^
in event it is
>
Mjortgage Ponds, 2M% Series due 1976
•country requesting it and is
proviso for
an
a review of the treaty
the event it is required by an
international
^ment,
v
1
monetary
-
agree-
-
The full text of the
agreement
follows:
Hes^
(4)
; .;,v
■
^'a^'
Due October
Dated October J, 194,6
Price
■"?:
-
1,1976
10D/s% and accrued interest
The Bank of England and
the National Bank of, Switzerland,
as agents of their respective Gov¬
ernments, shall fix by mutual
agreeineht the maximum spread
above or beJLow the official rate
which will be authorized on the
JVIone.tary Agreement Between the
Government of the United Kingmarkets which.they control'.
;
dom
of
Great
Britain
and
■The Prospectus may be obtained in any State in which this announcement is circulatedfrom only such
^•^••ttowndmigned-md other dealers as may lawfully ofer'the'st^curitieiinUfuh.SUUe,-
>
Northern Ireland and the Swiss
*
Government.
-
•
"
'
Londdrij 12th March, 1946
*
The Government of
Kingdom
of
Great
-
the
United
Britain
and
Northern Ireland, of the one part,
and the Swiss
Government, of the
other, have agreed as follows:
■\'J:',*,.::
(l
-
:
■:*
,
,!
Article Z :f--
'
/"(I) The Bank of England (act¬
ing .as -agents of the United King¬
dom
ling
Government) shall sell ster¬
to
the
Switzerland
National
(acting
as
the Swiss Government)
Bank
of
OTIS &, CO,
(incorporated)
Wl LLIAM BLAI R & COMPANY
-;
if; :yy
JULJEN COLLIfjis &
agents of
ns may
'
HALSEY, STUART & CO. Inc.
■.
COMPLY
y^::
required
for V payments
which
residents
of
(i) The rate of .exchange be¬
tween the Swiss franc and the £
•the exchange regulations in force
(Continued
on page
2249)
,
THOMAS & COMPANY
;
THE ILLINOIS COMPANY
■
V
"
V i '■ V,
PATTERSON, C.OPELANP &. KENDALL
October 29, 1946.
.N
MULLANEY, ROSS & COMPANY
F.
S.
YANTIS
incorporated
under
Switzerland,
V'v.-;-
be
incorporated
Article 1
on
H.
Itaymond and Raymond p. Bunt"
ihgton have become associate^
places usual exchange restrictions on payments in Sterling Area;
Both countries agree to cooperate with view to assjstiag each other
•.
ending
Co.,
WithBurgesaLeith
in
and
Baltimore.
James
-;-V
;
1,
:,v:''
\
Lemon &
Johnston,
.
•
■ ■
''
of
JWarA W,
Dec.
yy -,.
Md.
Th,e inte^-relationship between plane production; Jn many other
the
production and the distribu¬ cases, ' notably * plants hbrhially i
//
'y-:-■
...Chairman: Shirley C. Morgan.
Frank B. Cahn & Co., Baltimore.:
I
tion
v-:;./
J|rojfe^&'vJ$pns,. j3qi^mQrpt:
jor contributions to wartime out¬
Md.
'
put could not be used or r eadily I
/>;John "i: C..V Hagan,/ Jrv MasonH
converted to production for ci¬
•Hagan, Inc., Richmond, Va.
vilian purposes, "phis was
particuJ s Charles P. Liikens, Jr., Robin¬
the
' "•*
the
of
business
y
The 1946 Annual Convention of the Association will be held in
Palm Beach, Fla.j beginning 6h
*
;
—•-—--—-———....
,
meeting
Officers and Transact Other Important
Vjce Chairman: George D. List.
increasingly efficient but complicated mech-
.v•:"» anism
annual
Tp Elect
Group, on Oct. 31.
'
: ; Friday,• Dec. j6.
The following nominations have
^
technological revolutions of the past two cen¬
us an
:g;^irt)HFiWi Ammi IhNiyentijNi Decemkor 1-6
_
The Southeastern Group, of the
-Investment Bankers Association
of America will hold the twenty-
seventh
shifts and distortions in consumers' expenditures. .Sees buyers'
/J; market approaching despite continued rise in consumer purchas- ing, and urges more attention be given to selling and other .distrifoution problems.
Says government is prepared to readjust its pol- V
Investment Bankers Association to Hold
Group
Of IBA io Hold
Annual Meeting
CO.
'
"
'
'
ROTAN MOSLE AND MORELAND
?'f.'"i
;atr»?'kiX-'X'
r/.'.to'iii't;■
-"vTiTHE COMMERCIAL & FINANCIAL CHRONICLE
,".t
2220
interest
concern
and the
By WILLIAM McKAY
Garson K. C., there is indeed
worthy likely successor to Prime
Minister MacKenzie King.
;
;V
During the week the securities
market again showed no disposi¬
ipowever, superbly led by that consummate artist in parliamentary
procedure, Prime Minister Mackenzie King, the Canadian Liberals
tion
trend.
Liberal
veteran
of the
leader
party "now hinge
continues
Power &
major
Paper
parties,
the
dull
At best
lending
parties. Also it is difficult to con¬
ceive the
possibility of either the
Conservatives
or the CCF gaining
independent majority.
The tide of popular reaction on
innate
conservatism
k
Markets
maintained
Likewise
the
ancient
undersurf-
free
with
••
MacKenzie
DaKttnox Securities
Orporatioti
King
irregularly
following
differences
between
in
&
French
in
New York 5, N.Y,
Teletype NY 1-702-3
•
.
•
v.. ';.;••••
"
v
':
.
; '
••
*
;/
.
'
•
tive
unity
as
manager of
the B u y i n g
state of construc¬
a
between the
Department.
hitherto
Mr.
who
Kountz,
is
well
known
banking field,
qualified
'
.
-
•'
•••
'Vv-•
GOVERNMENT
f
t
Blaine
Co.
first and
and accrued interest.
were
from the District, and the terms of
office of James Currie, Jr.,
A.
James Eckert, Wilbur G. Hoye,
re¬
The
<
The bonds;
awarded Oct. 28.
company
plans to
the
use
net
proceeds to finance, in part,
its proposed construction program
and Richard L.
bers
of
the
District
reason
also
of
task
have
to
carry
MacKenzie
tified with the
bus in
of the
Hon. J. L.
Ilsley. Now it is rumored that he
shortly leave the Ministry of
Finance for the Justice Depart¬
PROVINCIAL
will
C>''
MUNICIPAL
CORPORATION
i
the greai
King? There
on
many recent sugges¬
tions foremost among whichr has
name
the
has been iden¬
supremacy.
been
been the
in
invest ment
the
ess
Cincinnati
n
income
taxes was $67,These figures represent
increases
over the corresponding
figures for 1944, 1943 and 1942.
The Series P Bonds are subject
to semi-annual cash sinking fund
payment at least equal to the
amount by which % of 1% of the
Mu¬
Ohio
This explains the long tenure of
power of the Liberal Administra¬
CANADIAN BONDS
....
Electric
Federal
nicipal Bonds,
and
But who in the Liberal ranks is
■
Walter F.
Company, Union Central Build¬
ing, specialists
English speaking Canada, but has
tunity to maintain its
': •?-
Truster
CINCINNATI, OHIO—An¬
Liberal party still has the oppor¬
>
&
328,444.
tion and for this
»
Oliver J.
nouncement is made that George
H. Kountz has joined J. A. White
irreconcilable elements.
BeU System
Gas
funding mortgage bonds, Series P,
2%%, due June 1, 1981, at 100%%
some
temporary politicians, proved it
possible not only to compose the
also achieved
';
oscil¬
and' 4Vs%.
were
J. A. White 1 Go.
the footsteps of Wilfred Laurier,
has alone among Canadian con¬
!
funds
3%%
George Kountz With
religious differences and part¬
ly on incompatibility of tempera¬
ment, renders the prospects of na¬
tional predominance of the Con¬
servatives almost hopeless.
;
Direct Private Wires to Buffalo,
40 Exchange Place,
and
stocks
.
feud between the provinces of
Ontario and Quebec, based partly
on,
Toronto and Montreal
underwriting
by Halsey, Stuart
& Co. Inc. on Oct. 29 made a pub¬
lic offering of $25,000,000 Pacific
headed
'
ace
all the above securities
on
lull
nationwide
:
the
of
people
will
militate
strongly against the chances of
progress of the CCF.
The un¬
yielding bulwark against extrem¬
ism of the Province of Quebec is
in itself an insuperable obstacle.
$1.50 Pfd. Stock
Active
A
group
'
the
Canadian
Common Stock
from
of the recent favorable strike set¬
the North American continent and
$2.50 Prior Pfd. Stock
Nationwide Syndicate
Offers Pac« Gas&EI. Bds
Kennedy, as mem¬ which is designed to meet the
Committee, prospective increases in the de- :
expire on Jan. 15, 1947.
One ad¬ mand for gas and electricity serv- j
tlements throughout the Domin¬
ditional vacancy on the Commit¬ ice in its system.
ion, should not be of long dura¬ tee is occasioned by nomination to
The Series P Bonds are to rank
tion;
the Board of T. Jerrold Bryce, equally as to lien and security
With the abatement of labor
with the bonds of other series, of
troubles both here and in Canada
which
an
aggregate
principals
there is reason to anticipate a
amount of $297,001,000 was out¬
short period at least of freer in¬
standing at July 31, 1946, exclud- *
dustrial activity
with resultant
ing $1,284,000 principal amount in
benefit to the security markets.
the treasury.
1
'
Gross operating revenues for
1945 amounted to $160,269,446, and
gross income before interest and
an
5% First Mortgage Bonds
down
come
strength in the
declines in
papers. The recent unsatisfactory
performance of the paper stocks
despite the boost in the price of
newsprint can be explained by
labor difficulties, which in view
tained between the three
Company, Ltd.
increased de¬
base metals offset by
balance could be main¬
uneasy
to
between
Internal
Progressive
Conservate and the CCF.
an
recent
lated
other
the
Harry W. Beebe and Robert S. utors Group, Incorporated; James
as members of the Board J. Lee, Lee Higginson Corpora¬
Governors of the Association tion; Ranald H.
Macdonald, D6minick & Dominick; Clarence E.
Unterberg, C. E. Unterberg & Co.;
Walter W. Wilson, Morgan Stan¬
ley & Co.
ample volume. Spora¬
dic buying of Dominion interna)
bonds was again evident after the
precarious supremacy of the
Liberals will be hard put to resist
of
of
Canada in
the
encroachment
of
Morris,
pronounced
any
was an
District No. 13 of the National
Members
of
the
Nominating
Association of Securities Dealers, Committee were:
Inc., announces the terms of office
Herbert R. Anderson, Distrib¬
improved only fractionally to 99%
owing to Canadian tax selling
popularity as a medium of
arbitrage ; exchange,
this 1 bond
competent hand at the helm
the
NASD District No.-13 Committee Nominations
and its
the emergence of a strong sue-'
cessor.
In the absence of a strong
■
develop
There
J. Thursday,' October 31,1946
r
as,
the
on
Abitibi
to
;
mand for Abitibi 5s of 1965 which
;ship of state on a steady coursed
Now looking to the inevitable
despite the onslaughts of extrem¬
ism from Eight and Left.
passing from the political scene of
and
neighboring states in this
S.
have pursued a policy of modernization that has kept the Dominion
fortunes
of
a
,
the
matters
his province
,to
country. If added to all this is
his experienced legal background,
in the person of the Hon. Stuart
The strong trend towards political change in this country is
having its repercussions in Canada. The reign of the Dominion" Lib¬
erals has been even longer than that of the Administration here,
•o
economic
in
mutual
■
Richard F.
Abbe
Col. R. Parker Kubn
total
indebtedness
bonded
out¬
standing exceeds the total amount
of payments in cash or bonds by
the Company and its subsidiaries
fore, to elect a member to fill each
in satisfaction of any sinking fund
of said vacancies.
and
by resignation of George
J. Leness. It is necessary, there¬
one
or other similiar provision of un¬
been derlying mortgages.
The bonds may be redeemed in
T. Jerrold Bryce, Clark, Dodge
whole or in part, at their princi¬
& Co., New York, N.Y.,.to succeed
pal amount and accrued interest,
Harry W. Beebe, Harriman Rip¬ plus a premium of 4% if redeemed
ley &
Co., Incorporated, New on or before June 1, 1948.
The
York, N. Y.
premium gradually decreases un¬
Wilbur
G., Hoye,
Chas.
W. til it is %% during the period
Scranton & Co., New Haven, Conn., June
Tj 1977 to June 1, 1980,bafter
to succeed Robert S. Morris, Rob¬ which there is no
premium. %
ertS. Morris & Company, Hart¬
Pacific Gas and Electric oper¬
The
following
has
slate
| presented:
■
,,
and New York
«
.
::j.v,i
.
since
"■
1922.
Prior to the
he was a ford, Conn.
partner in the firm of Seufferle &
The following have been nom¬
Kountz, and before that was Vice inated as the regular candidates
Geo.
H.
Kountz f
,v;>.war
ates
throughout
northern
large part of
a
central
and
California.
•
It serves gas and electricity or
the Board: *
ment. With this discussed change Company.
Oliver J. Troster, Troster, Cur¬ gas only in 23 cities each of which
is linked the name of Premier
Mr. Kountz served in France rie & Summers, New York,N. Y., in 1940 had a population of 10,006
Stuart Garson of Manitoba as the and
succeed James Currie, Jr., or more, including San Francisco,
Belgium in World War I with to
new Minister of Finance.
the 147th Infantry, and received Troster, Currie & Summers, New
Oakland, Sacramento, Berkeley,
As it has been evident for the the Silver Star, Purple Heart and York, N. Y.
San Jose, Fresno, and Stockton.
past few years the Prime Min¬ Verdun Medal, In World War II
Charles P. Cooley, Jr., Cooley &
ister and Treasurer of Manitoba he was assigned to the Military
Among its electric properties are
Company, Hartford,,Conn., to suc¬
tby sheer weight of ability has Intelligence Division, War De¬ ceed' A. James Eckert, Mohawk 53 hydro-electric generating
thrust himself on the Federal po¬ partment, and when relieved from
Valley Investing Company, Inc., plants with a total installed rated
litical stage.
Through the diffi¬ active duty last year, held the Utica, N. Y.
capacity of 1,458,364 horsepower,
cult depression years he success¬ rank of Lt. Colonel, General Staff
Walter
F.' Blaine,
Goldman, and 13 steam-electric plants with
fully led his province to. sound Corps.
Sachs & Co., New York, N. Y., to
a rated capacity of 853,384.
:
prosperity, not as a figure-head
succeed Wilbur G. Hoye, Chas W.
President of Charles A. Hinsch &
for membership on
,
CANADIAN STOCKS
A. E. AMES & CO.
INCORPORATED
TWO WALL STREET
;
-
NEW YORK 5, N. Y.
but as a strong capable executive
His energies were not confined to
NY-1-1045
Dudley, Jr. With
Merrill Lynch in Boston
tation of the recommendations of
the Sirois Report, he was the na¬
BOSTON, MASS. — Earle S.
Dudley, Jr. has become asso¬
ciated with Merrill Lynch, Pierce,
Fenner & Beane. In the past he
voice
tional
RECTOR 2-7231
Earle S.
provincial affairs, but as the lead¬
ing protagonist of the implemen¬
for
the
moderniza¬
tion of the Canadian Federal sys¬
tem. Moreover this has not pre¬
vented him from taking a
lively
(Special to The Financial Chronicle)
was an
of
officer of E. A. Straw,
Manchester, N. H.
Non-Callablt
TAYLOR, DEALE
&
COMPANY
64 Wall Street,
WHitehall
/■:
■"
■
3%
.
Pacific RIy. Co.
Price_ to yield 2.44%
Government
Provincial
Corporate
14 Wall
Toronto
Montreal
Vancot
;er
F.
Merrill
Lynch,
London
candidates
inations
District
;
.
^
London, England
to
be
New York
New
York
nounce
Adds to Staff
City, members of the
Stock
that
-
Exchange,
George
Louis J.. D'Elia, and
Jadick
have
H.
an¬
Adams,
M. Theodore
become
with the firm as
associated
registered repre¬
partment.
James Giblin With Roney
(Special to The Financial Chronicle)
Pierce,
may
be
nominated by members of the As¬
sociation in the District, as pro¬
vided in the by-laws.
Goodbody
Goodbody & Co., 115 Broadway*
sentatives in the Investment De¬
Wark, Merrill Lynch,
Additional
or
"
Street, New York 5
Winnipeg
Co., New York, N. Y,
Fenner & Beane, New York, N. Y.
Incorporated
Municipal
Abbe, Van Tuyl &
Abbe, New York, N. Y., for one
year to fill the unexpired term of
T. Jerrold Bryce, Clark, Dodge
Leness,
Wood, Gundy & Co.
SECURITIES
Richard F.
,
Bonds, due January 1, 1962
Principahand interest payable in New York, Canada
CANADIAN
New York.'■■(■■■
Pierce, Fenner & Beane, New
York, N. Y., for one year to fill the
unexpired
term
of George J.
Dominion of Canada Guaranteed
3-1874
Kuhn, The First Bos¬
ton Corporation, New York, N. Y.,
to succeed Richard ,L. Kennedy,
Harris, Uphaitf & Co., New York,
John
($48,600)
Grand Trunk
New York 5
Conn.
R. Parker
&
v.'-
£10,000
■■
Inc.
Scranton & Co., New Haven,
DETROIT, MICH.—James Gib¬
lin
has
become
Wm. C. Roney
affiliated
with
& Co., Buhl Build¬
Such nom¬ ing, members of the New York
by the and Detroit Stock Exchanges. Mr,
or before Giblin has recently been with the
received
Committee
Nov. 12, 1946, and
dressed to Frank L.
on
should be ad¬ Army Air. Forces. In the past he
Scheffey, Sec-
was
associated
retary^District No. 13, 111 Broad¬
Smith & Co.
way, New York 6, N. Y.
with,
Whitlock,
.
■
•Volume
Number 4538
164
"'3
THE COMMERCIAL & FINANCIAL CHRONICLE
cession,
rates
decline.
"
Our
Reporter on
Predicting what
jority of guesses
,
good tone,
.
.
limits, which has given the market an invest¬
ment appearance, and this stability should continue unless there
are to be wild inflationary developments.
For the present, the
partially exempt issues appear to be holding the spotlight as the
narrow
.
.
commercial banks
.,
.
banks.
cause
of the
of
the
decline
.
issues
in
.
.
This
.
the
given
was
the
as
larly
longest eligible
taxable
The
mercial
issue
during
one
.
.
might still be
not
be
sizable cash pay¬
a
interested
in
turning
banks
and
held in
are
Federal
the
that the
so
largest amounts by com¬
If holders of the Dec.
...
.
1
.
.
...
EYE
EYE
TO
'
f
'
'
1
However, the demand for the longest bank eligible 2V2S
strong enough to make up this small decline in very short order.
was
Federal Reserve Board Chairman Eccles seems to be in complete
agreement with Secretary of the Treasury Snyder on debt manage¬
ment, rate pattern, financing, and especially as regards an offering
.
.
,
INCOME FACTOR
There
tention to income and
that
giving much
are
long-term obligations by the government.
The fact that the
money managers see no need of long-term financing for the present,
and when it does come, it should be a non-negotiatble
issue, should
at¬
more
this is creating a demand for issues at prices
about in line with present market levels. .;.. There is no fear
are
now
of
indications that institutions
are
of prices
running
.
.
h^ve a beneficial effect on outstanding obligations.
and buyers have the attitude that if the
away
.
obligations cannot be bought today at yields they want, then they
wait until
these issues approach levels they consider at¬
In
to
•
and
prices, while in others firm orders have
given to pick up these issues at levels that are set in the
mitment.
of
elementary comfort would be¬
come
good tone, and
a
signposts of
are
an
soon
the
proceeds of the
American loan than is absolutely
inevitable.
to
import
.
.
obtainable
more
once
of
more
after the reconversion of industry
giving the market
improving technical position.
are
.
peacetime production. But
a
few
And
With the price appreciation factor and
classification, there
trading profits seemingly
issues are no doubt contributing
Also the feeling seems to be develop¬
the government bond market settles down and becomes
ing that
real
a
as
development..
investment
require
new
narrower
personnel
with
necessary
.V.,-
there will be
a
boom
bust
ana
not
diverted
to 1 be
pay
and better manufactures.
the
British
told that, once the
was
granted,
brought to
the
cycle is still for the
an
was
American loan
austerity would be
end. But even after
ratification
to be
public
of the
loan
there
effect upon the economy. / .
Higher wages and higher prices could
result in a spiral that would have a most unfavorable effect on the
newspapers,
seems
of
.
5
V'
over..
While these conditions, ate not expected by most
ernment's
is
few
policy
not
This
.
kinds
to
Bulletin
,
to
return
a
this
year.
low.
the
the
as
into
more
market.
As
it
buyers'
a
is,
in
low
some
levels
that
tended effect
firming in
foreign would-be
only result will be
foreign orders will
have to be turned away. For, even
though the; goods. are diverted
abroad, only a fraction Of the al¬
buyers,
that
the
even more
unlimited
most
foreign
be satisfied.
can
The
Conditions in
.
.
England
not
are
Whereas
.
comparable to
wartime
controls are
those
in
by the time British indus¬
really in a position to
satisfy the demand at home and
away
are
:
to
finance
more
cheaply.
.
.
.
much
insult
exhibition
It
injury.
to
not to be able to get
But
;
worse.;
us
makes it
the
to
ex¬
favorably impressed
by the display, their, secondary
reactions, and those of millions
who
have
only
read
heard
or
about the
exhibition, are any¬
thing but friendly. Beyond doubt,
the
of
one
.
results of
tion has been
pressure
divert
on1
more
markets.
as
Mr,
at
the
broker-t
Building.
Scott
entered
business
age
would interfere
tions that
There are
in
1927
with' Dom-
exhibi¬
the
the revival
of the
the; government
goods
to
the
to
home
as
a
margin
clerk
and
with government
statistician
for
Company. He
the
comes
Ford
exchange
in
the
United States.
.
.
,
no
Company from Mercier, McDow¬
ell & Dolphyn where he was As¬
sistant Cashier.
•Mr.
Davis
C.
Faust
F.
was
form
These
there., is an immense purchasing
power., in this country that can¬
wanis
;;It is: difficult to understand the
government's tim¬
ing of the exhibition. At present
community affairs and is a
president of the Strathmoor
Club.•.
is not
an
offer to sell
nor a
solicitation of
an
made only by the
offer
to
buy
prospectus.
«■
;-'i- pv",;
■
' ■< ;1 .■ -v..
94,000 Shares 1ft
,
STOCK
(Par Value lOtf Per Share)
Price: $6.00 Per
Share
1
exchange
A copy
of the prospectus
may
be obtained jrom the undersigned
re¬
strictions do not encourage the free flow of capital between countries.
.
„
.
There seems to be such
the United
States
and
a
wide difference in conditions between
pressing of interest rates in Britain will have
upon money
interest
rates in
rates in
in evidence for
our
England
some
country,
seems
.
Unless there is
pattern of
time, that cheap
a
rates
money
'
...
•
.
are
still the pol¬
v'"\
boom and bust in the United States
.
.
.
With
Colony Corporation
noticeable effect
Nevertheless, this lowering of
%% to 2 Mi % will remain.
any
to confirm the trend that has been
icy of the leading nations of the world.
-
First
England that it is not believed that the de¬
a
our
business
rate
re-
(
1928 to
the
motives of the
.
COMMON
on
of the
Company
manager
Furniture
for nine years leaving in
"
...
restrictions
Motor
to Chapin .&
being rapidly
financing.
book¬
keeper following which he was in
the banking business, and later a
control private flota¬
exchange controls in England with
ad4
in the
of new
608-610
partners
occupancy
offices
larger
Penobscot
the
announced
Davis Furniture Com¬
pany from which he recently re-i<
tired. He has been a leader iri
It
/
1
inick and Dominick of Cincinnati-
„
visitors
are
Davis
Fred
unob¬
dangle
to
goods before
the
has
Capital market regulations
or
?.
Scott and Davis
.
enable the British Government to limit
re¬
peated again in a year or two. Its
stimulating effect will have worn
change,
the
the^goods.
®;.
ing and subsidies.
.
American capital markets are free and
large private financing has a restricting influence on the govern¬
.
be
and
at
bad enough
;4;>
abandoned here, England still has wage and price ceilings, ration-
1
-
cannot
(A New York Corporation)
.
the
demand
•
exhibition
was
adding
announcement
rates they still
our
far
on
witnessed
were
so
exhibition achieves its in¬
...
United States.
foreign
two, by which
firm, and the
are
.
extreme
Despite
V.
.
a
much
purpose
Dumont Electric Corporation
.
indicates quite clearly that we
definitely committed to
mean
ment
of
spend
policy of low interest rates.
,
However, this policy of low money rates in the United States does
v
this
year or
.
of the Federal Reserve
also very
very
a
.
.
earlier
export trade, it would
served
securities
offering long-term 2y2%
a
the
was
without
the securities mentioned herein. The offering is
England will have on our money markets.
It is certain that the
lower coupon rate for the. British obligations pneans Jhgt the monpy
managers in England do not intend to abandon low interest rates in
that country.
"t Moreover, the review of money market conditions
in the United States by the Federal Reserve Board in the latest issue
are
for
evi¬
fixed maturity, in exchange for called 3% obligations. .
.
This raises the question as to what effect this cheapening of rates in
not
of
up
If the ex¬
arranged
market
more
BRITAIN AND UNITED STATES
Government
a
tinlies
.
British
was
..
money
experts, they cannot be dismissed entirely until there is
dence of greater stability in the economic picture, ♦
.
The
hibition
booked
are
come.
bring uncertainty into
the government bond market until the boom is
without
and
But/birthd<whole; austertty^&on*
to prevail. It is the gov¬
'
This would result in the abandoning of present rate patterns
and low money rates, which would again
no
the
goods have admittedly reappeared.
that the monetary authorities
mean
...
time to
factures
hibition
more
•
...
markets, because it would
industries
some
mission of Walter J. Scott and W.
satisfaction of its craving for
sign of any change
policy of diverting the
goods
to
the
export
markets.
There is more newsprint for the
would have to stop the inflation,
for
disappointment,
the display of high-quality manu¬
goods, the
do
After this latest
While
take
future to decide, the now all important element seemingly being the
labor factor.
Further tie-up of production caused by strikes in
the coal mines and the automobile industry would have an adverse
money
British
DETROIT, MIC H.—Roy F.
Chapin of Chapin & Company,
tainable
the
inflation in the United States, with the English according to press
reports, being disturbed about the prospect of such a development.
Whether
-still
for vitally
imports. Food and raw
everything
ov& the dangers of
to be considerable concern
seems
seem very sensible.
The
same
is true
concerning
foreign demand. Day after day
big orders have to be refused, for
members of the Detroit Stock Ex--
precedence over
else, and the public
Then
There still
the
satis¬
con¬
must
submitted to the postponement of
price movements, it will
a trained
knowledge of
*
,
^
has
materials
the money markets in order to meet the competitive conditions that
seem to be in the making. •
r
INFLATION
were
abroad, in order to
..
market with
experienced
more
bottles
industries
.
ing charges and the absence of
factors to this
water
forthcoming, the British public was
told that the output of civilian
dealers, with reports of abandonment of the government bond
business by smaller houses and combination firms.
.Higher carry¬
among
must
we
manufactures.
hot
indications of retrenchment
are
be
postwar
sumer
tilities, when the silk stockings and
DEFECTIONS
since
essential
months after the termination of hos¬
in the uncertain
stimulate
cannot
Chapin & Co. Admits
(Continued from page 2205)
been
com-
.
.
.
These so-called under the market orders
when it
waited
has be¬
abroad. '
instances indications have been made to dealers as
some
amounts
goods
"Britain Can't Get It"
'
*
...
demand
tries
will
tractive.
for
to slacken. To
gun
once
retiring of this issue would
deposits and bank-held debt.
government
time the world would have turned
...
certificates should ask for large cash payments there might be a
partial refunding of the l^s.
The debt reduction program seems
to be coming to an end for the time being.
-
of the
of
lack
for
fied does not
better in
the
in
the
demand
have
since other investors, particu¬
%% certificates for another certificate issue.
15
if
until
benefit
there
might
1V2S due Dec.
decrease
was
j
***,•*
-
....
.
other hand
corporations,
December
be¬
for the minor price
reason
the
ment of the December certificates
.
reported large shifts in holdings last week
trading sessions.
r
.
these
.
On
2i/2% due Sept. 15, 1967/72, into the 2%% due Dec.
15, 1960/65.
«:
toward
high premium is disappearing.
One of the
out
prejudice
.
tion of these certificates.
.
.
the
of
.
...
.
are
considerable
take place is
now
Country banks, Reserve City Banks and the New York
City Banks are the largest bank-holders of this issue.
There would
not be a large reduction in deposits as a result of the cash redemp¬
.
that
seems
may
exercised
,
...
going from the eligible taxables in these secur¬
The tax-free yield is still attractive and the sale of the
longest eligible bond to purchase the 2%% due 1960/65, and other
partially exempts results in a shortening of maturity. ;
Also it
ities.
be
goods.
It
may" well
be
asked
whether it would not have been
a favorite pastime, with the ma¬
favoring the opinion that the 7/s% certificates
due Dec. I will be rolled over and the l^s will be paid off in cash.
It is being pointed out that the % % certificates are owned largely
by other investors, with only a small amount held by the commercial
shifts in holdings among institutions seem to be getting under way
and this is making for greater
selectivity in trading.
Prices have
.
not
should
loans
bank
wiser
as
moved within
if
One of the most important topics of discussion in the financial
district is what will be done witn tne maturing i^2S on juec. id. . v.
By JOHN T. CHIPPENDALE, JK.
a
slightly
^
.
CASH OR NEW SECURITIES
"
The government bond market continues firm with
decrease
may
2221
B.V. Christie & Co.
J. H. Drass & Co., Inc.
pas|
Ki|
;ji.
2222
THE COMMERCIAL & FINANCIAL CHRONICLE
(Continued from
done by. the: present.Adtninistration in Washington, .it is made an
excuse
for
actively; ,promoting
DUTTON*
JOHN
strife.
While over-all corporate
profits have been high, they have
Slump Ahead
Securities Salesman's Corner
By
Thursday, October 31, 1940
page
beCri:geriejriliy{/.upgatlsfaclorywiii-;'
the important metal-mariufacturir
ing group, and the picture would
2204)
audience, the commodity markets
registered the steepest three-day
price break'since the Dow-Jones
have
.
.
.
.
,
Work
habits
like any other bad habit
to do it.
taking it
are
breeds
idleness.
trouble
.
.
with
that
"is,-that
you
are
J.
Here
are
trying to instill
ON
OFFICE
some
{rules .that you
pep
LOAFERS.
into
If
your
can
men
that
counting for
who pretends less than a fourth of that lost from
give an authori¬ this cause last winter and
abnormally
spring,
high, and
are exerting a paralyzing Ef¬
fect in important industrial com¬
elec¬
an
still
are
they
tion year—is probably a charlatan
munities; arid
—whethbr Subsequent events hap¬
have to do nothing,
strikes,
anyone
and their Government in
you
stoppages
while now ac¬
direct time loss of
through
one
to. be able to
the only one you tative forecast :of the prospebtive
behavior of 140,000,000 people—
j
• •
•.
^ -
follow to advantage if
your
as
conviction, with the obser¬
vation
sales organization. PUT A BAN
of
some
present my conclusions
man's
.
fooling when you do it.
are
I
Loafing^is
a
easy.
The
Idleness
the more you do it, the more you want
good producer has lost his edge for business through
The easiest thing for any man to do is to rest on hiS
Many
laurels;
lost."
be
can
New
pen to'prove hirn right or wrong,
export trade.
upon
Atrt^
which, if they materialize, will ef¬
fectively throttle the limping re¬
tell them to do it somewhere else!There is
nothing worse for; the
other members of your, organization than to have one or two
men :.
,{Facing a. Recession:
It is my. conviction that we a re conversion of durable gobds pro¬
duction and construction.
If they
git around and kill time with idle talk. They o'hly disturb others who facing; the prospect of a business
are avoided
through further wide¬
recession,
probably
within
the
wish to work. They are like a couple of rotten
apples in a barrel
next few months, and not later spread wage increases, the result
pretty sodn your whole1 sales organization will be infected.
will be either to set off an infla¬
than: next spying.
It shpuld not
HOLD SOME INTERESTING SALES MEETINGS.
price", spir&l
Give your be a recession approaching the tionary
or, - more
likely, to price important durable
men some inspirational ideas. Have a dinner some
evening at a good magnitude or duration of,, that items out of
.the demand market.
which, .folloiying the first World
restaurant for your men. Get your partners down
there, and have, a*
Wab, Commenced in the late ;/':^y;'-Kones£ ear uttuned to the
guest speaker who has somethirig; to say that will be helpful. Let
spring of I920;and lasted through hum; of
must find the wailing dirge bf the
your organization know that you are going to keep on
doing business, 1921. But it! can be serious enough,
increase your sales; and brodden your clientele.' Show
nevertheless; and -if, a sufficient bagpipes at least as insistent as
your men by
number, of mistakes, are made, tb the - dulcet notes bf the wood¬
your actions that everyone of them has an opportunity to make more
prevent the unquestionably, fa¬ winds. * Tb my ear, the bagpipe'
money by building sblidly for NEXT YEAR, arid the years ahead.
vorable ifactors in the present; sit? strains Are dominant. ; \
.
.
.
,
,
'
■■■
Inaugurate,
a
SALES- CbNTEST.
abiiityi;
their
lew
A chntest mdy bh a
joke to
some but
a
there
uationfromexerthig .their, influ¬
ence, it might set us back for a
pride in
considerable, period. '', JL Shall J try
are
very
who don't inwardly enjoy a test of their skill.
men
it a'fair cohtest Wherein all iriembers of
ah even break.
Try to make
the organization will have
One of the best mediums for this
purpose is a NEW
much
blacker
had
it
repeal.
Iri short, I
afraid that cbst
am
.
rigidities which Will bb slow
ef
adjustment at»best, will result iri
durable goods prides thai will
severely limit the size of the markefs despite large poterifial. de¬
,
mands at any reasonable price. ;:
A similar situation obtains' iri
the !
construction
field.
Unless
present exorbitant costs are cutcosts
which
reflect
not
only in-?
creased wages and materials bills
but a competitive black market
scramble for
items—I
scarce
sus¬
pect that many builders will hesi¬
tate
to
make. new
commitments,
after; their. present ' ones!; ares
brought to completion. And I feel
very sure that the present exorb¬
itant building Costs will severely
limit business capital expansion,
particularly in those fieidk/hf
whlpft{ the - profit outlook already
is
cloudy.
-
.
.
-
-
...
pti top; of ali triis, I iiaye
many
misgivings as to the promptness
arid; /wisdom^
maining .Gqvernment 'cbritrois are
likfeiy .to be dismantled, .and. I
believe that there will a further
doWriward thrtiist' from an
.
evitable fall in the
towering prides
in the
face of huge crops and falling ex-^
port-relief demands.
I shall Mmmarize my coriclusioris in this Irifm: ; {{:,; :.; ;; v ;v.
agtidtiltutal prdducts
Of
,
Put "some incentive into your
organization besides the money angle. Most salesmen have
been
not
tbeen {for .the carryback priviliges following excess profits tax
in
.
Keeping morale high in a sales organization is one of the most controls that operate in both di¬
futures index was
compiled
important duties of a competent sales manager. Many {/firms have rections
simultaneously, with dis? 1933. j Increasingly, I there Are : refound that their best
producers have been slackening up in their ef¬ astfbus confusion
& result,
ports ol a slackening in. tbe con¬
forts during the past few months.
Heavy income tax payments that
So; in, talking about the", busi? sumer"
appetite for soft goqds .aiid
penalize those in the higher brackets have been one factor that has ness
outlook, and attempting to luxury items at current prices.
contributed to this let down in sales
activity. The recent market de¬ review the conflicting eyidericeVI
Even the starved field, of hous¬
cline has also affected
many salesmen adversely. They have, become, shall avoid*, the. safe but', unsatis¬
ing.: construction, with its soaring
market experts. The market is
going to tell them what to do
so
fying course of ambiguity, in favor costs compounded,
by the black
they think. Some sales organizations that were beehives of activity •of the; reckless;
path bf giving my market scramble for short-supply
last spring have now become a
loafing place for those who have reading of: the presently visible items, shows
signs of some fading
been losing their
economic signs.A Needless to say, of its lush
capacity for work.
•
•
♦
•
j
v"
bloom. Work
-
to
outline the basis for my pes¬
simism.
,
First, let ,me, list sdme of the
many
influencesvthat should
Pessimistic Conclusions
As, I view, it, there is{ riothlri^
1, shall try to StateL why., my
inherent, in the present ecoridmic
weighing of the C'onflicting factors
scene
that precludes the possi-?
hi {the imrriediate outlook is dis¬
bility of an orderly transition front
mal."
(1'
: {' ;
lfAs I See it, we have been rid¬
.
.
#
:
con¬
an
ending
soft-goods
boom
to
a
beginning hard-goods boom, witft
healthy j eco¬ ing, a bopni essentially supported
ACCOUNT CONTEST. Put a iriifiimum limit on the size of the order.
by the extraordinary activity of the., divergent trends finally1.
nomic situation,^
*
and
stabilized/ iritd d.
Distribute your, leads fairly. Set up a time limit. Make your
the soft-goods trades, both on the merged
The year following the end of
prizes
production
and
merchandising healthy prosperity;
"worth while. If sonie of your old timers don't
go for it, get one of World War JI, with all its trials,
It • could be {done ii therb wbre
presented a record of transition sides, arid of the services. In spite
them started and it wohL be
tribute
tbward '
a
,
You
can
have
some real
something
first {prize
.
lohg belo're evefyohe will be pitching.
to
a
peacetime
economy,
especially if you make your smoother than that which
fun out of this,
worth fighting for; A trip for
a
husband AND
were
able
to
far
^ye for
achieve in the year
WIFE, with all expenses paid from soup tomuts,
may eat-up some of following the*, first World War*
profits on your initial sales. but yoii will be well repaid ;in the And this time ;the{{task was far
greater, since ' thp{ proportion bf
long run by additional business'that will come in as a result of such
pur economy dedicated tothe war
a contest, but thejrlike them
they are like spices in food because dwarfed the earlier effort.
they make what we do every day: just that more palatable.
Civilian employment is at a
your
.
;
.
.
'If you have any soreheads or Complairiers in your organization record high—higher even than at
the peak of the war effort; and
have become chronic cases thai cannot be cured, the best
thing unemployment is minimal. Never
do is to let them gp. A sales
Organization is like a football team. in our history has the total of in¬
who
to
It
can
go
stale from overwork
knows his
tion
from
men.
or
underwork.
A good sales manager
He watches each individual and
slipping into bad work habits.
keeps his organiza¬
come? of. individuals matched CUT"
rent levels.
Farmers have never
been in
so
A slump is only natural
prosperous br
liquid
a
a
prolonged period of high activity.
Reserve
Common Stock
Prospectus
on
request
fact' that wanted durables simply
were not available.
of Industrial Pro¬
The percentage of consumer in¬
comes^ spent for food dnd nondurables was entirely out of line
with past expenditure patterns
and Cannot possibly be maintained
for
sustained period.
a
pletions
new
are
crops
As the de¬
made/ Up, as record
are
marketed, arid
as
the competition of durables in¬
176, higher than
creases; there is bbtind to be a
at any former peacetime period.
falling, off • iri the prbpbrtibri, bf
Retail trade generally
has] en¬
joyed phenomenal and unprece¬ income^Available for soft; itferris.
dented volume and profits, and Despite the formidable levels of
there has been a general Mom, current, expenditures in this field,
I think that alrfeady there are
iirif
too, in the; non-durable produc¬
tion industries.
On ton of all bf mistakablc signs of a; recession Iri
the non-durable field. >
this, we have a huge backlog bf
2. There / is d clerif demand po¬
demand for consumers' and pro¬
duction
Mary Lee Candies, Inc.
Index
those
producing and selling
non-durables. This boom market
has been provided by the high
current income levels, and by the
pent-up demands of civilian
stocks depleted by war-bred shbrtages.
It. was pushed to record
heights by the added demand of
10,000,000 men;. and women re¬
turning from the services and in.
need of new outfitting,, and by the
■:
position, and industrial produc¬
But good sales organiza¬ tion,.even - in the strike-harassed
tions do not continue in a rut for a protracted
period*. Strong lead¬ reconversion. period during ' / the
first half bf 194-3 equalled the
ership at the helm is the way to overcome this condition.
previous record peacetime / levels
of 1941.
|n August, the Federal
after
of mounting costs, it has been .a
period of exceptional profitability
stood at
"
r.
;/;//;
v//.
"vf^
tential
Herrick,Waddell
&
Co., Inc.
85 LIBERTY STREET, NEW YORK
5, N. Y.
for
demand
stered
come
for
durables
-
is bol¬
both
by present high: in¬
levels .and by savings in the
ahead
without; any slump.
My
doubts stem from the weighing of
what {seem/to me{ to. be very for?
are esti¬
imagination-stagger¬ ^midabiq difficulties in the, way of
a
prompt and steady augmenting
ing total of $225 billions. /
of production iri thbse three cateRising Notes of Gloom j ;
gories/ /-{:/
:/•
rkrkkkkkfkk
It seems almost perverse, in the
The output of durable goods—midst of such a symphony of opti¬ both consumer and
.capital—has
mism to sound a note of discord¬ been hobbled
by work stoppages,
ant gloom.
Yet such notes are rising labor costs/ and by mateform of liauid assets that
mated at the
.
For 33 Years
making
themselves" heard
persistent
dissonance, not
NATIONAL QUOTATION BUREAU, Inc.
Established 1913
46 Front Street, New York
Chicago
..
4, N. Y.
San Francisco-
management,
labor,
agricultural
groups to re¬
thorny problems in¬
volved in such a transition.
Government
and'
solve
thb
My pessimisiri stems frorii
a
laclc
of conviction that we can mobilize
such wisdom.
I hbhe I'm.
wrong.
But I have expressed a genuinelyheld doubt that we shall be able
to avoid a repetition of many of
the ; same mistakes, that { have
marked our transition tor dath
from
to peace, or even escape
war
devising
some
new errors.
Hence,
I expect
that the formidable dif¬
ficulties iri the way of a srriooth
transition
the next phase will
to
be effected the hard
a
way—through
business recession.
Unless
blunder
we
badly-—arid
may—the recession should not
deep, for I rec¬
ognize, and have listed an im¬
pressive catalog of plusses in our
we
be too long or too
situation that
To
those
should
bail
us
out.
I .have
mentioned, ; I:
might add that the price floorson
commodities
too
violent
should
prevent
collapse of agricul¬
tural prices which is a major haz-;
ard.
Further,/, I should like t£
a
make it clear that I do not think
it practicable
nor
desirable to ef¬
absorbing- briy Auch
ducers' durables and construction,
fect the vitally necessary realiza¬
accumulated over the war years slack through increased expendi¬
tion of a workably; stable, and ten-r
when incomes were high and the ture^ fob eonSunier durables;- fbr
able price level through an at¬
industries producing such items industrial,- capital ; expenditures,
arid for consumer housing, x If it tempted bn&laiight bri wage .rrites.
were devoted to war output. Cur¬
could be realized, we should go WC; can / supportpriesent, wage
rent
Over-the-Counter Quotation Services
sufficient collective wisdom in the!
with
ials and component shortages to¬
only ward
from the tongues of-
all
pf which inept govern¬
controls.-have importantly
prbphets, but
from the hum of the market place.
Since last May, the stock mar¬
ket has registered losses in secur¬
ity values of $15 billions, with
and; I doubt that we have devel¬
only slight recent recoveries. LaSt
week, as I need not remind this
avoid
ment
cbntributed.
culties
The
shortage diffi¬
being slowly remedied,
are
but costs oromise to remain- high
oped
.
the
y
collective wisdom to
crippling
labor
further
rates, if
we can
eliminate existing
iriipridirrientS to; high prdductidn.
Ultimately, I am convinced that
wri riiust
prinbinle
that
move
of
towrird
wage
a
rational
deterrhiriation
links
creased
wage advances tb' in¬
productivity and thus pro-1
vides labor with
a direct incentive
rtiovirig
in
what
every One'
agrefes to be thb necessary direc¬
for
tion.
{/{/'g-v"A{
! '{"
v
Perhaps the healthiest factor in
our
economy is the considerable
and
growing recognition that
cession is
re¬
probably the most im¬
mediate hazard to be faced.
If my
gloom has helped to sharpen that'
recognition it may have served
useful purpose.
/■
a
,V
/
Volume
•
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4538
164
ST. LOUIS
Investment
BankersAssociation|o;MoId
FRIDAY, NOV. 29:
Lv. Si Louis
Governors
tharged for each delegate and al¬
each morning from
on
at dinner
one
on
for wives or members of the press.
should
scheduled
.
after¬
the
Y Y Y YYHotel Reservations
ij
reservations
All
v
r-'~'Y-'
v.
for
for
rooms
They will be left free for
Railroad tickets should be pur¬
hfter dinner.v;
dancing will
\
the
are
their * hotel
of
best
to the form of ticket
as
suited
individual
to
needs.
The individuals in charge of
route.
en
York .and
with
Chicago to West Palm
bbiivehtioh.
It will therefore, be
Beach ahd feturn.
In addition;
impossible to Comply With requests
to: take guests tO the convention^ special cars wili be operated from
other than members Of the, im¬ Detroit and St. Louis. They will
•
•
mediate family of
alternate.
A
Or be attached to the Chicago
•£
'
Cohvhhfioii
~
a delegate
Tfaih^ifroute;The
these drains, and
Registration FfeS
$
follows:
registration fee of $30 will be
will be
as
1
NEW YORK SPECIAL TRAIN
.
Eastern
Lv. Newark 'S Y^YYYYYC'Y Y"Y
'Lv^ North Philadelphia
Penna.R.R.
Wilmington
Lv. Baltimore
12:38
'
.
thOt ;the?rettiffi'rtftifes
special
oi the
spe¬
cial; trains diffef from the going
routes." It should further be rioted
that round-trip" fares do not'^ ordi-
apply wheri the Seaboard
Railway IS tiSed In v0ne direotion
afid the^ Florida East Coast Rail¬
will
be
on
notice
New York Special Trains—Pull¬
man
reservations for the going
trip should be made through the
New York Group Transportation
Committee, of which E, Jansen
Hunt, White, Weld & Co.', New
York, is Chairman. The blue form
which
accompanies
the
should be used for this purpose.
Drawing
■
bedrooms will > bC available,
Drawing rooms and compartments
will
not
be
,assigned for, single
occupancy unless it, develops at
tfrg jast tribute that there, will be
unused space available; When the
supply pf drawirig foofns has been
exhausted, it will be necessary to
assign compartments to those re-
questipg drawing
When
rooms,
the
Lv. Washington ; i
Lv. Richmond (Main St. Sta;)
Lv.' Raleigh*
?
,v
:
*
20.99
31.28
19.78
; 1B.57
37.20v
29.27
33.24
26.57
Raleigh —:
8:50' P.M.
Seaboard Ry.
1 person
32,60
-
Richmond
6:00 P.M.
.
*
$35.88v:;;'-y $22.77
32:60
WtiM2O:90'i^:
.
41.23
32.53
27.^5
Washington
r
3:00 P.M.
R.F. & P.R.R."
Seaboard Ry/r
2 persons
41.23
i
Baltimore
2:18 P.M.
,
$45.20
,
Wilmington
•-
1:18 PM;
-
Penna. R.R.
""
York
is
$41.2$
50.49
40.6*3
.
,
i
16.79
22.60 .;
should
\
"
be
made
through
Harry
Theis, Albert Theis & Sons, Inc.,
410 Olive St.,: St. Louis 2, Mo.
Drawing rooms and compartments
will be avaialble. They will not be
assigned for single occupancy un¬
develops at the last minute
less it
that
there
will
be
unused
space
available. One-way Pullman fares
(including
federal
tax)
Palm Beach will be
to
Drawing
Compart-
Room
ment
2 persons
St. Louis
—
Return
$42.55
West
follows:
as
2
persons
$33.93
?
Pullman:, reservations
should be made at Palm
Beach, at
Headquarters in
Transportation
the
Palm
Beach
Biltmore.
It
is
important that this be attended to
early in the Conventibn so that
the railroads will have ample time
to provide the proper equipment,
Hotel representatives
will travel
special trains and will fur¬
bish passengers with baggage tags
r
on
the
filled
with
out
their
and
names
hotel room numbers; One of these
shbuld be attached to each
hand baggage. * Then,
arrival in West Palm Beach,
bll strch baggage will be trans¬
ported immediately from the stdtion
by - truck
and • distributed
promptly
to
the • proper
hotel
tags
piece ' of
upon
v
Eedroom
Compartment
2 persons
; * Philadelphia
men;
2 perse
$51.81
—-
Toledo
compartments
rooms,
and
Drawing ROorh
New
Room
2 persons
■
bulletin
supply of bedrooms lias been
exhausted, it will be necessary to
way in the other. Accordingly, to
assign those requesting bedrooms
provide fof those traveling on the a compartment .arid a rpOmmate.
Convention Special Trains, a speOne-way Pullman fares -,(ineiaPfanff^effect under cluding Federal ; tax) to. West
which round-trip fares will apply. Palm Beach will be as follows:
P.M.
-V
i'
,
should be rioted in this connection
imi P.M:
Philadelphia (30th Street)
Lv.
„
the-
Of
question, as Set
above1 schedules;
it
in
;
'"/Penna. R.R.y..
routes
Car
A.M.
Penna. R.R.
Lv.
or
A.M;
11:20
Penna. R.R.
Penna. R.R.
(Perina. Sta.)
agents
12:30 A.M.
4:30 A.M.
7:20 A.M.
.
"time
11:05
SATURDAY, NOV. 30:
Lv. New York
the
train
to conform
as
Special riarily -
schedules;^
cars
•
•
V&tGoing %>.:
Specify that their railroad
operated from New fprth M
be
will
tion
definitely eligible under
fey-JawS may attend ah anntial
cars
or
tickets be routed s6
Special trains for the conven¬
tn£trAssOciati6nthafc:brity; those
.who
numbers
room
•
advised
be
Ticket
I"/
,
chased, from local ticket agents. Concerning this special tariff.
They will b'e 'able' to advise aS to
Compart-
Drawing
v
Palm
West
St. Louis Special Car- -Pullmad
for
the
going trip
111. Cent. Syst.
111. Cent; Syst.
Ar. St; Louis
to
follows:
as
reservations
Chicago Special
a;:
;
Lv. Carboridale
■'
day f ana there will be
A.M.
Returning
SUNDAY, DEC. 8:
Ar; C^rbdhdale;
fares and
tax)
P.M.
P.M.
12:55
Chicago' Special
Pulbthe
convention
must
be
made
man reservations {see below) will
golf, tennis, bathing, fishing, etc.
through the Office of the Asso¬ not;
be able to supply "railroad
The same will be true of Sunday.
ciation in Chicago.
\
\
tickets;.
/'a'
A general get-together party will
Those traveling to Palm peach
It is important that those plan¬
be held before dinner each, eve-'
jiing from Sunday through Thurs¬ ori tho Convention Special Trains ning to'travel prf the, speciai tf.ainS
noons.
6:00
10:45
•v
Detroit
Lv. Indianapolis
•
With this
for
Association
with' the white form which
accompanies the bulletin.
exception, no business session
be
Indianapolis
SATURDAY, NOV. 30:
cago
^Monday, and also in the .early
will
to tJOe
in Chi¬
and forwarded
the
of
office
"Committee meetings will be held
at
breakfast and lunchedn on
one
be
association
of the evenings.
afternoon of that day.
covering registration fees
made payable to; the
Checks
federal
Central Time
No fee will be required
ternate.
Monday through Friday. Promi¬
nent .speakers will address j the
jCohventloii Sessions, and there
I Will also' be d profnirifent speaker
ing
Beach will be
V^v
;v
■■
>N.y. Cent. Syst.
'n.y. Cent. Syst.
Ar.
2219)
(Continued from page
SPECIAL CAR
Going
Thirty-Fifth Annual Convention December 1-6
2223
robms.
New Yorkers iri Posts of
:
NatL Savings Loan League
J Several savings and loan execqtiVes of: ■ New:;York h&vfc been
:
14.38
named
to
important committee
posts in the National Savings and
;
SUNDAY, DECAl; /-. /
Ar.
-
West Palm BeacH
-
"!
v
•
J
Seaboard Ry.
-
membersxtravelmg
regulation Pullman tickets. Cer¬
tificates will be mailed if appli¬
form which accompanies the bul¬
letin should be used ior this
pur¬
pose,
11:05
,
*Will'stOpat Raleigh ohly upon:request of
■
,Certificates cob bring Pullrrian
spUbb. Will' be; issued iri lieu of
R.
A.M.
.
to the convention who wish to board the train there.
%
v
•
cations
;
Returning
Eastern Time
FRIDAY, DEC. 6:
Lv. West Palm Beach
prior
7:00 P.M.
Fla. E.C. Ry.
are
received
promptly.
Otherwise they may be picked up
at the Office of ;.E. Jarisfen Hunt
to
5:00-
Nov.. 29.;
P.M.
On
Friday,
;
•, /
,
,y 1
_
:•
.•
The
^ •?
SATURDAY, DEC. 7:
Ar. Florence j'
Ar. Richmond
Lv. Richmond
Ar.
Atl. Coast Line
Atl.
•
:
Ar." Newark
Ar. New York
(Penna. Sta.)
I
5:27
P.M.
5:36
P.M.
6:50
P.M.
Penna. R R.
Philadelphia (30th Street)
Ar. North Philadelphia-
P.M.
Penna. R.R.
.
4:57
Penna. R.R.
,
3:55 P.M.
Penna. R.R.
Penna. R.R.
,y..
P.M.
P.M.
Penna. R.R.
Ar. Wilmington
2:55
3:10
be
7:05 P.M.
th^ railroads will have ample time
provide the proper equipment.
to
Chicago
Special
Train—Pull¬
man
reservations for,the going
trip should be ihade through the
.
Central
States GrOupi. Transporta¬
tion Committee, of which Charles
CHICAGO
SPECIAL TitAIN
9:00 P.M.—C.T.
Saturday, nov. so:
Lv. Chattanooga
12:55
jJ.Y. CeritSysi
(Terminal Sta. )
Lv; Atlanta (Terminal
Sta.)
A.M.—C.T.
j
4:45 AM—E.T.
Southern Ry. '
Southern Ry.
Southern Ry.
l:25vAJW[^
Seaboard Ry.
8:15 A.M.- -e;t.
-E.T.
■■
4t:
SATtlRUAY, DEC. 7: ^,'f'
Lv.Jacksonville•.(■ s:\-\-r ' \
Ar» Birmingham
iLv. -Birmingham
* ■
.
^
3:15 A.M.—E.T.
1:40
'
111. Cent. Syst. V.
■;
'l
;
■
^ Cofng
'
>
Lv. Detroit (Mich. Central Sta.)
Lv. Toledo (Union Sta.) " V "
Ar.
Cincinnati
/ ;
"
SATURDAY, NOV. 30:
Lv. Cincinnati
;
,
a
roommate.
Beach will be as
Compartment
2 persons
State
Associa¬
•
8:30
and
of
Standards
Association,
Loaft
Constructions
the
Philip
Committee;
'
-
'
•
Federal Savings
and Loan Asso¬
ciation of Ridgewood, Vice Chair¬
Advertising Committee
man
of the
and
follows:
member; of the" Membership
Committee
Bedroom
1 person
coe,
and
President of
Andrew
S.
25.24
19.95
12.59
lems Committee.
lyn Savings and Loan
Asssociation,
.
Piillrhaii
iip
T'his 63Vertis?ment. Is not, and is imder ho circu'instanges td toe construed as,
an offering of the following securities for sale or as & solicitation
of
an
.offet; to buy any of • such5 securities.
The
"
offering is made onlj i by the Prospectus.
.
-
•
on
Friday, Nov.
90,000 .Shaf€$
They
Beach^Biitmore;1 ^
.
*
t;_r
.
It: Is
Sharot
-
May Co, Inc.
,V-v'•;
p-..'.-
important, that this be attended toearly in- the Convention so that
•;
L
;
A.M!—C ;T. ! to provide ther proper equipment;
'
B. & O. R.R.
B. & O. R.R.
M
Detroit
Special.
'
r:;
^
Chicago Special
3
;
'•
t
jV4 <,
r
4:40
P.M.
compartments
will
be
available.
..
They
AM.
will
single
^
A special car will not be operated to Detroit ori the" return trip.
Detroit members may return via the Special Trains to
Washington
or Chicago, and thence by regular train to Detroit.
r
■ v
v -- r
.
$3 Phr Stiafe
Haii rz
troit, 26, Mich. Drawing rooms and
9:35 P.M.
-4:45
Price
Car—Piiliman
be
made
Fordon, Inc., Penobscot Bldg., De¬
3:15 PM.
<
B. & O. R.R. yyY
\
v
through Ralph Fordon, Watkins &
Eastern Time
'
s
Ros-
tke South Brook¬
Chairman of the Personnel Prob¬
ireserVajdpns
,
"
M.
Burkard, President of the Home
14.38
*•,
P.M.—C:T.
■
and
President
Vice
Executive
Secretary of the Colonial Federal
22.60
Ceftificafe§. YpbvbHng
occupancy
ops
.
compartment and.
One-way Pullman fares (includ¬
ing federal tax) to West Palm
Sayings,
and
the
27.95
-
1:20 P.M.—C.T.
DfeTRdiT SPECIAL CAR
FRIDAY, NOV. 29:
a
of
Committee; Frank A. Nolan,
$23.92
20.99
the "Pakrt^
i
V
Chairman
the; railrbada wilt naveVampje iime-
SUNDAY, DEC/ 8: V. ; : Ar.I Chicago (Central Sta.)
;
Home-Building
tions
32.60
j^anspp^iiewn^ ^^quartersn in
6:30 AM.—C.T.
111. Genf/Systi"
;
'
drawing rooms.
When
the supply of bedrooms has been
exhausted, it Will be necessary to
assign those requesting. bedrooms
The Committee will not handle
Cent. Of Ga. Ry.
Cent, of Ga. Ry.
a m J, D w y e r. Presi¬
the Franklin Society for
$37.20
return Pullman resbrvatipriS.
9:00 pm.—e.t;
Atl. CoastLihe;
of
at the office of Charles R. Perrigo
;
Fla.E.C. Ry.,
;
has been
29.' :
;"
:
rooms
W i 11 i
41.23
prior to 5:00 P.M.
FRlbAY, DEC. 6:
supply of drawing
\
dent
$46.52
Otherwise' th£y may bb picked
Returning
Lv; West Palm Beach
oc¬
cupancy unless it develops at the
last minute that there will be un¬
used space available.
When the
ficates Will be mailed if applications J are / refceiVed
promptly;
SUNDAY, DEC. 1:
Seaboard Ry.
assigned for single
regulation Pullman tickets. Certi¬
4:40 P.M.—E.T.
Lv; Hampton
available,
dpace will ^^bd isSUed iii lieu of
11:55 A.M.-^C.T>
Ar. West Palm Beach
be
and compartments
P. Harold of the League has made
the following appointments:
Chicago
Indianapolis
Atlanta
Lv. Indianapolis
Lv. Cinoinnati:
rooms
League, it was announced
recently
at
League" offices
in
Washington. "Presidentu Raymond
Chattanooga
'
■
N.Y. Cent. Syst.
compartments,
rooms,
bedrooms will
Drawing
2 persons
FRIDAY, NOV. 29:
''
and
Drawing Room
Going
Lv. Chicago (Central Sta.)
Drawing
Loan
exhausted, it will be necessary to
portant that this be attended 16 assign
Savings
compartments to those re¬
eafly in the CohVentiOn so that questing
member
12:10 P.M.
R.F. & P.R.R.
Reservations, They
made at Palm: Beach,
at Transportation Headquarters in
the Palm Beach Biltmore. It is im¬
6:Q0 A.M.
Penna. R.R;
Ar. Baltimore
should
12:01 P.M.
R.F. & P.R.R.
'
Washington
Lv. Washington
Ar.
Coast Line
Atl. Coast Line
;.
Committee Will not handle
return Pullman'
12:01* AM.
;
"
will not be
.
•
Lv. Jacksonville
Perrigo, Hornblower & Webks,
Chicago, is Chairman. The yellow
not
be
assigned
57
unused
space
Engel
William Street, New York
at the last minute that there
be
&
Itork Curb Exchange
for
unless it devel¬
'
will
Members New
available.
One-way' Pullman fares ;(includ-,
October 29, 1946
5, N. Y.
BOwling Green 9-8193
THE COMMERCIAL & FINANCIAL CHRONICLE
m4
Thursday* October 31, 1946
gressional intent in enacting the
Free Enterprise and Anti-Trust Laws
(Continued from page 2217)
Rigid control and^ sanction of
C&ftelization were, the forerunners
of Hitler.
■•/■-''' -/ v./-/
Powerful business combinations
heeded
by small groups needed
bhly indoctrination to become the
tion engineered in secret to
the
*
•
The monopoly tax is levied by
the
private government of the
monopolist. It has no legal sanc¬
tion and the unfortunate taxpayer
has
Nazi
the
of
war
ma¬
chine.
By reason of their long
practice of stifling free enter¬
prise they were ready for and
grasped the evil Nazi philosophy.
Mussolini
Fascist
his
erected
corporate state upon the founda¬
tion of
giant industrial combina¬
tions.
These alien philosophies are ab¬
us. Yet they arose in
countries which had operated on a
horrent to
right of appeal.
no
^
^
This monopoly tax has been re¬
-
backbone
mulct
public.
estimated
to reach many
billions of dollars annually.
It is
money which could have bought
more radios and clothing, automo¬
biles and housing.
Many times, it
is money which could have bought
food. //// V////' />/./' //;' i''/■:••:'/
The price fixing agreement is
sometimes clothed in the garment
of
illegal patent-license agree¬
ment.
It may also appear in the
liably
.
ket.
think
monopolist
allowing such a
of
match to reach the
consumer.
might be benefited but
be drastically
consumer
match sales would
lighting
was
retarded. Here,
pow¬
stake.
company revenue was at
:
Again, so that more electric
lamps could be sold, the manu¬
facturers built them with shorter
life.
other economic phi¬
are
of
deteriorate. We must not allow it
is known
the poor and
is
rickets
who
due
with
children
to
suffer
malfor¬
from
defective
to
Rickets
metabolism.
from
Vitamin
the lame.
boon
a
mation
with
prevalent
poor
bone
the
most
are
poor.
are
-
•
,
j
.
lower
scuttle
would
life. These
who
those
are
of
our .way1
gfeedy men clamor loudest for
free enterprise and opportunity.
Actually, they mean freedom for
their
activities
own
agreement.
—
This
.
Free Enterprise
There
tory
freedom
prices to the
and
Accordingly,
they cut the pie neatly into por¬
tions.5 Each conspirator then gets
a piece for his very own.
In this
piece or exclusive area, only he
can produce and sell.
His con¬
spirators have agreed to stay out
of this area and he, of course, has
agreed to stay out of their areas;
Each trading area is then at the
complete mercy of the monopolist
consumer
less profits to them.
foundation
The
the division-of-terri¬
as
is ' the
scheme of two or more conspira¬
its blessings. Assaults upon it by
tors.
They see no advantage in
the selfish must be withstood.
•;
• •
.....• ;•v. .v;t.. v.-,-;
5>">/*..
■.'
;
fighting for the ; whole market
since such a fight may result in
Some Greedy Men Clamor for
vitality and of
denied licenses
irradiating oleomargarine with
vitamin D to manufacturers of
for
oleomargarine because the patent
was
as the inventor, said,
holder
unsympathetic to oleomargarine.
Monopolists think of their prof¬
its first and of the people last. >
These
are
but
a
few of the prac¬
tices engaged in by the monopo¬
lists who /would tear down our
enterprise system while they
declare their love for the Ameri¬
free
of life.
Fortunately these men are in
the minority.
I wasn't always Attorney Gen¬
profits and safe markets with
eral Clark.; Once I was just At¬
hone of the risks inherent in our
who controls it.
The consumer torney Clark, one of the lawyers
capitalistic system. They would
have freedom to
insulate
their finds no competition between pro¬ in the Department of Justice.
In later years, it was my privi¬
business from the uncertainties of ducers and is compelled to pay
whatever
price the
monopolist lege to be Assistant Attorney Gen¬
competition and freedom to gorge
cares to charge.
This always in¬ eral in charge of the Antitrust
themselves
w i-t h
monopolistic
cludes the monopoly tax.
Division, I speak, therefore, from
profits.
The evil of division of markets first-hand experience in antitrust
These are not the freedoms to
work when I say that these men
foster and protect in America. also embraces our foreign trade.
are in the minority.
ThOy are not freedoms at all. Industry after industry is subject
to
: drive
competitors from the
market place. These men would
have
freedom
for
guaranteed
can
way
-
-
They
only license—license
to Carry a business blackjack in
a Community where other citizens
go Unarmed..
mean
,
.
These
would play the game
men
&£ restrictive
agreements, agree¬
ments
which fix arbitrary and
unreasonable prices for the goods
Which they sell, agreements which
divide
goods
markets
in
which
their
sold, agreements which
are
divide
fields- of
production
and
raid; and agreements which
sup¬
technological advance and
products.,
Let me tell you just how their
press
new
system operates./
;
,.
TfUst-Buster" Title Well Earned
The
who
story
corners
of the monopolist
the market is an old
pfie; it is.farpiliar to yop all. The,
Department of Justice has fought
the oil trust, the tobacco trust and
the railroad trust and has recently
t/Oii the
lUih
battle
trust.
against the alumThe
title
"Trust-
fttfster" is well earned.
But
teeks
the. monopolist
methods
new
markets.
of
Cornering
constantly
tying up
and
con¬
trolling
markets, • production,
prices
and
inventions
are
no
longer done openly. Secret agree¬
ment
is
Phone
now
the
device.
conversations
luncheons
have
and
replaced
ments and memoranda
,
Standing.
Price
Teleclub
agree¬
of under-
agreements
by
which goods are sold at artificial
and exorbitant prices are com¬
mon.
Housewives;
Wholesalers
turers
and
storekeepers.
even
forced
to
manufac¬
tribute
to producers of goods and hoard¬
ers
of
are
materials
who
export restraint.
pay
have
con¬
Whole con¬
tinents have been delivered
marketing areas.
These
cartelists, and we can so dignify
the monopolists when they act in
combination and in concert with
others,
have
erected.: super-gov¬
-They refer to their re¬
strictive agreements as treaties.
There is no senate, no representa¬
tive of the consumers, to approve
ments which divide fields of pro¬
duction and sale.
By these de¬
vices, the conspirators divided the
oie not
geographically but accord¬
to product.
They may all
ing
operate in the
strict
same
themselves
erations
or
area
but
re¬
to
specific op¬
products. No one dares
enter the field granted to another.
Such
was
the
industry.
ators
created
which
each
in the
glass¬
Here, the conspir¬
case
exclusive
acquired
a
fields
in
monopo¬
listic and noncompetitive position
in the production and sale of a
the
monopolist, the extra charge
tial
position,
a
preferential posi¬
nopoly and price control by the
f / maintenance of competition."
/
America, of which this associa¬
is
tion
the
representative, play
squarely. /They give
very
game
acted in violation of the antitrust
laws.
have
amply demonstrated the wisdom
and' foresight
of the
Congress
this charter of
which wrote
nomic freedom.
astounded
An
our
'
eco¬
'
world
watched
industrial machine pour forth
the
goods
which
materiel
and
world
government
our system of free enterprise
free opportunity and would
Many nations in
look for
and
and
to
succor
emulate
a weary
our
has
which
that
brought
to
us the greatest standard of liv¬
ing known to any people of the
Power
I
have
just
returned from a
Europe sick from many ailments.
Very apparent is the disease that
comes
industrial
from
combina¬
wards
is
hateful
a
which
disease
us. Our job at the
Department of Justice is to pro¬
economy from
must not infect
tect the American
contagion.
Function of Justice Department
The Department
of Justice must
economic freedoms
preserve our
and the civil
rights which flow
by enforcement of the
from them
Sherman Act.
Department of Justice is
It is the law
department of the greatest clients
in the world—the United States
/
The
the public protector.
Many
antitrust
actions start
from the people.
Complaints are
received by the/Department of
Justice every day.
One may be from the machine
his
who
manufacturer
ail
finds
suppliers
of ball bearings
lined up / against him offering
bearings at identical prices.
Another may be from the to¬
farmer
bacco
himself
finds
who
with
confronted
the
prices
same
and
buying conditions from all
the big tobacco companies.
;
Another may be from a munic¬
ipality which is planning to build
•
,
school
but
that
finds
economic
'
,
.
The Smaller War Plants Corpo¬
ration recently issued a report to
the
Senate
mittee.
Small
The
Business
report
Com¬
decries
the
trend toward mergers and acqui¬
sitions which was accelerated dur¬
ing the
which must
and
war
be
prevented and reduced in stature.
The report concludes that anti¬
trust, small-business and surplusdisposal programs are the reme¬
dies
indicated.
The
Antitrust
Department
of
Division
Justice
of
has
the
long
maintained separate sections deal¬
ing with small-business problems
and surplus property disposal.
I
should
like
to
make
another
point clear about the Sherman Act
and its enforcement.
We know that
because
of the
broad
language of the Sherman
Act, violation of its terms is some¬
times unpredictable although the
Supreme Court is making clearer
and clearer the bounds of proper
activity.
Nevertheless, should a
specific program be contemplated
and should the
iul
it
that
planners be fearthe law, the
violates
Department of Justice is prepared
to discuss it,
:
American/ business
The/
who
wants to
man
play the game ac¬
to American/rules has;
nothing to fear.
We are now going back to the
cording
of America and its people.
tool
concentration of
power.
tion and cartelization.
It
.
We must untrack the trend to¬
world.
:
/■' /v'.:': -/ .•ri.i
,/./- •■;'■-i. '/
/Hits Concentration of Economic
The events of recent years
a
On the whole, the business men
the other fellow a chance and are
all
con¬
tractors operate
through a bid de¬
pository and decide, among them¬
selves who shall be the successful
bidder and at what price the sucr
old
rule
For
book.
five
weary
business has complained of
OPA and price control.
It
years,
the
has
begged for the return to the
supply and demand.
economies of
Well, it is
just about here. Bus!-?
ness
will be on its own. ;
will
be
There-
government to whip
It is expected that
business will accept the responsi¬
bility of the free market.
It is
expected that business will not
substitute private price control
for government regulation.
The
average American —the elevator
operator as well as the apartment
building owner, the shoe store,
no
and to blame.
salesman and the chain store op¬
cessful bid shall be made. •;
And still another complainant
protected from
been
erator—has
runaway
,
Sherman
The
known
Act is rightfully
the Magna Charta of
as
enterprise system and
Bill of Rights of business. , }
free
Sherman
The
enterprise
have
the
and
asserts
Act
principle that in a
the
the
the
free market,
initiative / shall
opportunity to compete
without fear of restraint
by
com¬
bination, and without fear of re¬
Sherman
asserts
Act
You
about
have
also
heard
stories
the
the
could
its
miracle
light
but which
and
new
market
You know about the match trust
and
by freedom of opportunity to in¬
troduce
one
never
match
which
thousand
reached the
times
mar¬
new
ideas,
new
goods,
basic economic'law.
of the antitrust
.
Large fines do not correct the
situation which has already be¬
come fixed.
In such cases, we ask
the
equity courts to order relief
which
will
complained
of
exists,
is
its
■
dissolved
this
wrong
dissipate
and
effects.
ture
the
remove
illegal business struc¬
ask that it be
we may
if
the
it
indicated
is
way
to
that
remedy
the
wrong.
Where
a
corporation
subsidiaries,
divisions,
uses
or
its
plants
services, and to enter the
in violation of the antitrust laws,
we
compete
on
equal
may
ask
for
language is known
In the famous Trenton Potteries
This
means
what
as
or
legal
divestiture,
separating
the Court found the Con¬ sidiary, division
in
the
sub¬
plant from its
law?.
out,
like you to
then,
to business
///• //■';/■
-continued,
support and assistance in enforc¬
ing our basic economic law that
men
tain affirmative relief.
call
We
to ob¬
and
terms.
case,
our
The civil action is used
Where an
prisal by monopoly methods.
The
tion of
'
principle that the ultimate inter¬
particular type of glassware. The*
ests of the entire economy and of
buyer found a complete absence
all the people will be best served
of competition in each field.
coveries.
which the monopolist takes unto
himself by reason of his preferen¬
mo-
,
prices include the
of
public interest is best
■
suppression of inven¬
tions and the smothering of dis¬
tax
Squarely
Game
'
of
the
prices undfr government
control.
They are entitled to ex¬
willing to pass on a reasonable
portion of their gains to the buy¬ may bewail the fact that over¬ pect fair and reasonable treatment
with the removal of government
ing public.
stocked suppliers have agreed to
control.
L
•
That is the way the fair Ameri¬ withhold their
these treaties.
The cartelists are
goods from the
This is now the obligation/of,
can
shoe manufacturer and the market to create a
scarcity with
sovereign in themselves and owe
business.
To shirk this obligation,
fair American textile machinery
consequent higher prices or to put
allegiance only to their profits.
is to betray a trust imposed on
manufacturer operate.
:
him out of business.
"
'
They know only the diplomacy of
business by the removal of con¬
It is the way laid down by the
the dollar.
If, after investigation, it is de¬
founders of this country.
It is the termined that the Complaint is trol, It is to shirk a responsibility
Their policies are planned to
to the public and to the free en¬
way crystallized by the provisions well-founded, the Department of
withstand the effects of the rise
terprise system.
of the Sherman Act.
Justice moves swiftly.
■ / '
and fall of nations. This is clearly
In giving us the Sherman Act, a
The removal of price control
Where it is plain that the of¬
revealed in cases brought by the
Congress more than fifty years fender clearly intended to violate places the free enterprise system
Department
of
Justice
against
The American business
ago reaffirmed by statutory en¬ the antitrust laws, criminal in¬ on trial.
American
companies in league
actment the American principle of dictment is immediately sought. / man ha? a perspnal and vital in¬
with the German dye-trust, T. G.'
freedom of opportunity irv a com¬
Let me say very clearly that terest in the preservation of t*1®
Farbenindustrie. Nations conquer
petitive system. Since the begin¬ the Department of Justice does American system of free enter¬
or are vanquished but the monop¬
ning of the century, the Demo¬ not seek to punish for the sake of prise, free opportunity and free
oly profits of the private economic
cratic and Republican party plat¬ punishment.
It does not carry on men. His future as an independent
empires continue*
forms
have
repeatedly pledged a vendetta with the businessman. business man depends upon vig¬
There are also the secret agree¬
adherence to these principles.
It seeks only to deter the viola¬ orous, night and day enforcement
ernments.
spired in secret to make helpless
buyers pay monopoly prices. These
unseen
Most Business, Men Play
as ex¬
clusive
ware
;
fixing
to
that
*
been kept
,
fcr be robbed of its
based upon the assumption place of the single structure which
.
overwhelmed the enemy.
Vitamins have
The
also the largest consu¬
mers of oleomargarine.
,
losophies which differ from ours.
Some years ago, patents for pro¬
Hut the world is large and we
The1 American people demand ducing vitamin D by ultra violet
Can all live in peace together as
that these vultures be stamped put ray came into the hands of a uni¬
United. Nations.
/
of the market place.
versity foundation located in a
Our own path is plain. We must
butter producing area.
The sole
ftot permit the economic system / The secret agreement has also
been employed to parcel out ex¬ right to use this artificial method
in which we believe, our system
of producing' vitamin D in foods
of free enterprise and opportunity clusive areas for the production
and sale of foods. This agreement belonged to the foundation.
With its attendant civil rights, to
There
trademark
agreement.
But it must be recognized as the
same purse-bleeding agreement of
the same price fixers.*'
guise
competitive system basis.
/
protected from the evils of
The
reduced. /
////:- /■//
The introduction of fluorescent
D
competitive units will appear in
'%.
No conventional
would
er
parents towards the end that two
Sherman Act to be:
it
For
is' with; your,
the American
remain
help us.
free
business scene will
from
enterprise and
open
for opportunity.
//,/
i
/
/h/Z
I■,»'■■■
Funk & White Formed
In San Antonio, Tex.
ANTONIO, TEXAS—Funk
being formed with of¬
fices in the Frost National Bank
SAN
& White is
Building to continue the invest¬
ment
business
of
Creston
H.
Funk.
Partners
Mr.
are
White.
of the
new
firm
L.
Smiley.
Mr. White has been trust
Funk
and
officer of the Frost National Bank
of
San
Mtfht
Antonio
vpars.
for
the
past
'
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4538
Yolume 164
2225
trade at home
Above all
Distribution--ft Key io Full Employment
:
however, because of short sup¬
plies of goods, price controls, ra¬
tioning, and the desire on the part
of individuals to save more, the
(Continued from page 2219)
simple.
experienced
These
no
drop in demand for their products
as the government moved out of
the market as the principal buyer.
volume
of
trade
retail
below
in the total
expenditures maintained the pre¬
war pace with the much higher
reconversion
which
of
end
under way,
the value of the
gross
national product was ap¬
proximately $197 billion. Of this
total,
government
expenditures
accounted for $83 billion, private
gross capital formation (residen¬
tial and other construction, pro¬
ducers'
million
sumers' expenditures of goods and
services amounted to slightly less
than
$105 billion.
Even though
government expenditures began to
drop sharply after V-J Day they
averaged for the year as a whole
mote than 40% of all the goods
If
we
produced.
look
now
at
these
•
same
figures for the second quarter of
1946 we will note that some sig¬
nificant
developments
occurred
between
the surrender
of Japan
in August 1945 and
the end of the
first half of the present calendar
The value of the gross na¬
output of goods and ser¬
vices was now running at an an¬
nual rate of $185 billion. This an¬
nual rate.consisted of government
expenditures amounting to $38
billion; private capital formation,
§25 billion; and consumers' ex¬
penditures,
$122
billion.
Thus
year.
tional
while the annual rate of total out¬
put had fallen by 6%, the share
represented by government out¬
lays had fallen by nearly 55%;
the amount represented by pri¬
vate investment in plant, capital
equipment, construction, net ex¬
ports, net change in inventories,
etc., had risen by 166%; while
expenditures showed
consumers'
increase of 16%.
an
In general, these figures
the kind
shift that
of
was
reflect
to be
As government expen¬
ditures declined, private capital
formation and consumers' expen¬
expected.
ditures
that
la x
It
rose.
was
to be expected
wartime requirements red, much - needed capital
as
e
and
in
order to meet peacetime needs,
and
that
depleted
inventories
would be built up. In view of the
exceedingly low volume of output
of
consumer
it was
war
the
durables during the
to be expected that
buying public would
be in
automobiles,
for
market
the
radios, household appliances, and
a host of similar products as soon
as
they were available.
figures
carefully, however, we find
As
.
more
a
examine
we
these
number of interesting problems.
One of these relates to the nature,
distinguished from total ^alue,
consumer expenditures. Since,
as is implied in the title of my
talk tonight, distribution has an
important role in achieving and
maintaining a high volume of pro¬
duction
and
employment, it is
well that we examine the cur¬
as
of
,
rent trends in consumer expendi¬
tures,
as
reflected by the sales at
retail stores.
Changes in Retail Expenditures
During the period between the
two world
tail
was
the volume of
wars
trade
incomes.
consumer
In other words,
of retail business
entirely dependent
on
the vol¬
was
almost
the aggre¬
gate incomes which consumers
ceived
re¬
closely asso¬
very
ciated with the level of
ume
re¬
period in which
the economy experienced a wide
variety of changes and dynamic
during
shifts.
4
During
comes.
be
replaced,
industrial
con¬
struction would get under way
a
;-></:•<
the recent
war
years,
tion
of
their
incomes
than
has
Thus, while retail sales moved
peak levels- during the course
to
of
the Current year, running at
about 25% over the corresponding
period of 1945, and while in the
aggregate they
in approxi¬
incomes, the
were
mate balance with
current pattern of consumer buy¬
ing raises a number of pertinent
questions.
For
example,
will consumers
tend to curtail their purchases at
non-durable goods stores as the
flow
of
consumer
to
a
In
other
durables
rises
substantially
sumer
higher level?
will total con¬
words,
spending continue to be in
line with incomes by shifting pur¬
chases from the nondurable goods
stores
more
to
the
durable
stores
as
supplies of durables becomes
available?
If
this
should
happen
the
prospects for many retailers
now engaged in selling nondurables may not be very bright. The
reason
for
this
is
that
assuming
that nondurable goods expendi¬
tures are brought into approximate
balance with prewar relationship
to income, the current high level
of sales at nondurable goods stores
could be maintained only if con¬
sumer
incomes
increased
very
substantially from present levels
—by more than one-fifth—an in¬
crease
which
probably
eventuate in the
The other
the
curtail
will
not
term.:
alternative, assuming
maintenance
comes,
near
is that
of
present
consumers
significantly
in¬
will not
their
pur¬
those
basis
more
there
to
forth.; However,
two factors which may
are
lead
greater
propensity to
consume.
First, the total liquid
assets held by individuals is much
higher than ever before. Although
a
of
goods in¬
of the unfilled
consumer
and many
creases
demands
consumer
have
been
satisfied, distributors will then
face a buyers' market.
At that
time, if not before, it will be nec¬
essary to initiate measures aimed
at maintaining and increasing the
total; sales volume. . Distributors
,
can
of
distributors
assist in this process directly
by taking such measures as more
enlightening
advertising,
better
window
on
a
Monetary Fund and the
distribution,
tional
and
than
ployed
7.5
in
trade,
million
while
million
time of the conclusion of the An¬
employed
and
industries.
glo-American
retail
ternational
3.1
by
service
employed*
10 million.
In
the
and
haps not
4
exert
in
the change-over to peacetime
production and distribution? Out¬
put has. increased in
a number of
industries. With military require¬
ments continuing to decline it has
been possible for some time to di¬
business
expenditures
equipment is per¬
vert
rent
so
important influence
investment opportunities.
an
In
the
to, customers,
demand
in
other
lines
of
cur¬
the
developments of recent
things stand out. The
first is the continued rise in
sumer
Domestic Activity and Foreign
Trade
We
increasing share
an
output into civilian channels.
months two
on
ther
con¬
purchasing, despite the fur¬
drop in income payments to
individuals.
The
second
is
the
have
heard a great deal rapid rate of expansion of priva'e
during recent years of the close capital
expenditures,
notwith¬
relationship between our domes¬ standing the various, bottlenecks
tic level of business activity and that have had to be overcome or
the volume of imports and ex¬ that we still need to cope with.
ports. I want to call attention
In appraising the
longer-range
therefore
to
the
international outlook it is
perhaps appropriate
aspects of production, distribution, and timely that I quote from the
and employment. As early as 1941 recent
report of the Director of
certain broad principles of post¬ War
Mobilization and Reconver¬
war
ated
reconstruction
in
3942
the
the
when
enunci¬
were
Atlantic
Charter.
United
sion:
In
.
"At the present
States
time, the high
levels of business investment and
signed the Mutual-Aid Agreement
with Great Britain, we gave of¬
consumer
expenditures are still
strong inflationary pressures. De¬
ficial expression to the view that
mand in general is greater than
postwar expansion of the produc¬
supply. But as the nation's industrial
tion, exchange and utilization of machine becomes
fully organized
material
goods
throughout the
for peacetime production, business
world depended
upon
interna¬
spending for inventory accumu¬
tional cooperative action. Article
lation will decline.
The increased
7 of the Master Lend-Lease
Agree¬ flow of consumer durable
goods,
especially at present' high price
sion, by appropriate international
levels, will
ments
declared that "the expan¬
require
and
to
consumers
domestic measures, of pro¬
increase their total expenditures
duction, employment, and the ex¬ far above even-their current
high
change of consumption goods" levels if the
goods are to be sold.
was
tions
of the material founda¬
one
of
ples. It
the
welfare
of
all
policies
certain, however, that
these principles would have to be
implemented by concrete steps
designed to produce results,; It
was
was' also
vigorous action be taken
the
commercial*
monetary,
are
government
coordinated and di¬
present,
rected toward
increasing produc¬
tion On the one hand and reduc¬
total demand
ing
that positive
necessary
and
the
"For
peo¬
hand.
in
ter,
the
on
other
But if consumer spending
business spending
or
and
general economic field by reduc¬
ing unnecessary trade barriers, by
displays, additional ser¬
refusing to
eliminating inequitable trade ar¬
merchandise poor quality prod¬
rangements, by cooperating in the
ucts, adjusting prices, etc. In this
development of productive ca¬
way a weakening demand in one
pacity,
and by
establishing
a
area might be offset by increasing
sound
system of financial and
vices
What about the overall progress
k
pronounced but, un¬
certain
conditions, it may
der
has
Progress of Conversion
have, as we
know, contributed effectively
to the maintenance of
production
and employment.
The degree to
which marketing
efficiency and
techniques influence the aggregate
and
now
To
tion, employment, and consump¬
tion, all to expand together,"-
of new markets often
of
meaning:i
the propen¬
on
products,
desires through advertising
selling, and the development
plant
clear
production are
greatest that the world
known.
well
on
their
of
The marketing
the creation of
consume.
volume
on
bring them into play
requires agreement on principles
on
exchange
and
distribution
which will permit trade, produc¬
of
new
new
in
"Powers
the
enced by its effect
of
of
In submitting
tives
approximately
marketing and
distribution the level of employ¬
ment may
be materially influ¬
sity to
organization
Nov.
proposals
1, 1945,
W. L. Clayton, then Assistant Sec¬
retary of State, stated the objec¬
in¬
v
field
trade
these
dustries, many of which closely
integrated with the distributive
trades,
arrange¬
the United Nations.
the
communica¬
The
financial
ments, have been made the basis
of a suggested charter for an in¬
em¬
approximately
were
transportation
tions
and
Interna¬
Reconstruction
employment,
which
were
an¬
nounced in December,
1945, at the
194Q,
were
wholesale
for
and
example, out of approximately
million
employed
persons,
45
Bank
Development. The proposals
for expansion of world trade and
interdependent.
are
tribution to employment. In
until
able goods comes
Some of these ideas have now
found concrete expression in the
establishment of the International
First of all the distributive trades
make an important direct con¬
for
much larger flow of dur¬
various nations.
of mutual helpfulness.
alternatives will actually eventu¬
ate. It will not be possible to know
duction
t
with
employment
Propensity to Consume
monetary relationships among the
made
Production,
At the present time, there is no
evidence as to which of the two
a
effort
by manufac¬
turers to integrate their interests
been the case in the past.
the pressure for
there is no conclusive statistical
saving a large part of consumer
evidence that this factor tends to
income was gone, prices increased,
increase the propensity to con¬
more goods began to flow into ci¬
sume
permanently, we know it
vilian markets, and as a conse¬
has at least a temporary influence
quence
consumers accelerated
on
raising the level of current
their rate of expenditures at re¬
that indi¬
tail stores to the point where by consumption beyond
cated by the prewar; relationship
the middle of this year they were
of safes to income." Second, the
virtually in line with the prewar
developments during the war and
relationship of sales to incomes.
since the end of the war have
In other words, 12 months, 12
tended to narrow the dispersion
months after V-J Day, the dollar
volume of consumers' spending among the various income groups.
and savings had been adjusted to The effect of this development is
also to increase the propensity to
the normal peacetime relationship.
consume, although not to a con¬
In this process, however, sig¬
siderable degree.
nificant distortions in the buying
What are the implications of
pattern resulted. In the first place, these trends with
respect to the
many types of goods were still
problem of the role which dis¬
unavailable, such as low price tribution can
play in the main¬
shirts and other articles of ap¬
tenance of a high level of employ¬
parel, automobiles, refrigerators,
ment? The maintenance of a high
etc. As a consequence consumers
level of employment depends on
shifted
their
purchases to the continued
high purchases of dur¬
items that were more plentiful;
able goods as well as all types of
primarily nondurable goods or soft nondurable
goods and services-—
lines.
Second, millions of demo¬ in other
words, on a stable high
bilized persons formerly in the
level
of
private
expenditures.
armed forces had to outfit them¬
Since the purchase of most dur¬
selves and
therefore created a
able goods eventually will depend
temporary demand not only for on
replacement demands plus an
many nondurable goods but also
increment
reflecting population
to a large degree for house fur
growth, it is not likely that such
nishings and furniture. These two
purchases can be sustained indef¬
factors resulted in a sharp distor
initely at high levels. In other
tion in the character of consumer
words, this is the' area which in
buying in the sense that purchases the
past has been most unstable
in the nondurable goods stores*
and has contributed to booms and
such as food stores, department
busts. Thus, to offset a slackening
stores, drug stores, eating .and demand for durables
ways must
drinking places, and apparel stores be found to increase the
propen¬
were excessively high in relation
sity to consume in other areas. It
to the amount that could have
is at this point that businessmen
been expected on the basis of the
ban make their greatest contribu¬
prewar relation to income.
On
tion to the maintenance of a high
the other hand, sales at durable
level of sales and employment.
goods stores, particularly motor
vehicle
dealers
and
household
A Buyers' Market Coming
appliance and radio stores, were
Right now retailers are facing
greatly deficient in relation to in¬ a sellers' market. But as the pro¬
would
equipment
residential
in retail stores than
more
After V-J Day
equipment, etc.)
aggregated $9.4 billion, and con¬
Distribution of Gross Annual
Output W
had
they actually did.
durable
and services we
bought
1945, if consumers could have
bought in accordance with the
same pattern as the prewar years,
they would have spent almost $20
during which wartime out¬
put reached" its peak but before
was
have
This implies that consumers
will save a much smaller propor¬
con¬
Even in the first half of
incomes.
a year
the
would
sumers
expenditures compris¬
ing the nation's total output of
goods and services. During 1945,
which
amount
able.
far
was
Tne significance of this shift is
reflected in the past year's changes
the
active
well as abroad.
there must be an
as
else
due
to
should fal¬
continued price in¬
creases, declines in the stock mar¬
or psychological factors, the
government must be prepared to
ket,
readjust its policies to promote
an
increase, in consumption."
and
thus help to maintain employment
and incomes and in turn sales and
profits.
Newport News
Shipbuilding and Dry Dock Company
.
Thus, businessmen have a ser¬
vice to perform not only in their
self interest but also for the
tional
interest
na-^
adopting sales
and marketing policies which will
promote increasing demands for
goods and the lifting of the level
of consumption to a point consis¬
tent with a high volume of em¬
ployment. "
The
problems
of the postwar
the need for a
more scientific appraisal of mar¬
kets for our products.
There is
also a need for careful adjustment
of the productive capacities of our
period
magnify
industrial plants to
quirements.
Statement of Recorded Cost of Work Performed During the Thirteen
by
and
I'.
Weeks
Thirty-nine Weeks Ended September 30,1946, and September 24,1945
y.1,
jl'1;
y.
.
u-.
.
' 0'
* 1X1,1. ,1
j
'*
Jt-'
%
"
r.
t
*. •
Thirteen Weeks Ended
September
September
-
30,1946
New
;
j 24,1945
Thirty-nine Weeks Ended
September
September
30,1946 :
24,1945
$ 8,431,000
$20,864,000
743,000
$74,678,000
$25,446,000
4,761,000
Ship Construction
7,373,000
Ship Repairs and Recon*
-
versions
Hydraulic
Turbines
Accessories
and
and
2*387,000
*
<
Other
2,051,000
1,414,000
3,674,000
3,417,000
$15,243,000
Work
$23,021,000
$36,493,000
$80,482,000
.fj
Totals
l":
t.
ii
V
consumer re¬
The effective recon¬
By Order of the Board of Directors
version
of our plants for peace¬
time production will facilitate the
chases at nondurable goods stores
development
of, intelligent
and
as
more
durables become avail¬ workable
programs for conducting
.
(Subject to year-end audit, charges and adjustments)
R.T. FLETCHER
October 23, 1946
Comptroller
1
2226
.
V
*
If
*>
«
•*.»
THE COMMERCIAL & FINANCIAL CHRONICLE
*-r*
^Business
Speaks
1/
1
hundreds
of
thousands
(Continued from page 2213)
smallest
bolt
to
the
i
'
source.
and
not
smallest dislocation
!
.
platitude
'
turesque,
.
,
whose
income
living standards
of
an
in
terms
of
equal to that
was
American executive of equal
in
America
but
so can labor be
tough and so
the world be and is
tough. But
I have heard
very, few business¬
funda¬
a
and
one
contraverts it because forced labor
is
unthinkable.
We
didn't
And,
Following
every
great
War,
been a period of un¬
people
in China who
national
existence
resort
depended
^bargaining has broken
learned
are
friendly to the
object to the payment of high United
States,
who
need
our
wages they thought possible after know-how and
guidance in order
averaging the natural rights of to assume a
Worthy position in
their customers, their workers and
the. world.
to forced labor even in war when
paid
^
self
to
accept collective bar¬
deprived of liberty of ac¬ gaining but resents—and I believe
tion, of speech and of thought; the rightly—collective bullying.
mainspring of our incentive meth¬
/Right now in ffollywoOd a vi¬
odology is liberty—freedom ojf cious strike is
going on between
choice. Most of us wouldv rather
two
*
do not need
we
men
more
cost.
"'.*k
The
in
in
paying high
-J- f'\!' •'
1
the
practical
economic
unity
to
way
which
world
is
quite
essential
as
more
world
political
arid less: Unity arid both are.
indispensable
if We expect to
majority
preponderant
*
A' 7.'V
•
This, in my opinion, is the real
and
as
producing
goods at less
of
-V
Must Have World Economic
Unity
have > ail equally practical
interest
and
not be
Postwar Uncertainty
Confusion
living but
need to be "raised. There are more
than four hundred million
can
no
down, American management has
The American demands and will
*
.
right to strike is
on production and we shall not in
their stockholders.
They know it
peace but the right to strike coil-,
notes the responsibility of not is to their enlightened self interest
to pay maximum
wages if the
striking until honest and sincere;
people to Whom those Wages are
collective
capitalism; under responsibility^
enterprise^—of
democracy.
-
The
mental
our
ager
greatest peril. It happened in
system of free and uncoerced
ard of
other
every
of living and prestige. I visited at
the home of a Soviet plant man^
happened in a free society and in
society that remained free des¬
pite the pressures and travails of
a
a
does
as
Any one who planned to des¬ group but a considerable part of to do so; The job can be handled
troy our, country and its way of the denunciation which it sus* by manufacturing in the countries
doing things could scarcely have tains daily is illogical, and irfe^- whose living
standards,,by all that
sponsible. Business can be
adopted a sounder formula.
tough is kind arid human and decent
The rewards are better standards
I like to remember that all this
its
"Thursday, October 31, 1946
but
parts
by no means all of it. I do household
appliances and so oh
beg to be pardoried for this for suCh
pepples^-not I to compete
which
is
celebrated with our own
industries—but to
of these routines can throw out of more
by utterance than by obedi¬ sell to
countries which by reason
gear large continuities of produc¬ ence. No busift^
of low Wage scales
Cannot noW
tion^ Yet with both national and unless it
produces its' goods Ot buy the'
products of American
international well-being looking services at the
lowest possible factories and American
workers.
toward American * production for prices consistent with
the quality We do not want to
reach theSe
help; there has been interference that people require. Business has markets
of more than a billion
from
almost
every
imaginable its faults, some of theril
very pic¬ people at a cost to otir own stand¬
down
rivet and the
military vehicles, 41 billion rounds have learned through bitter ex¬
of amunition, four hundred and perience
and cruel frustrations
thirty million tons of steel, to that incentives are : necessary to
mention only a few categories of the individual if the individual
war-like merchandise. This pro¬ is to produce for himself and for
duction dwarfed the most extrava¬ society at his maximum capacity.
gant hopes of the President and They have, consequently, refined
our Allies and
drove Herr Hitler the application of fee speed-up
into the arms of a whole platoon beyond any degree I have wit¬
of psychiatrists. It, in literal
truth, nessed in this country and they
demolished the deadliest military have developed an incentive sys¬
coalition of all time and the Ger¬ tem which is spurred* by every
many, the Italy and the Japan of imaginable impulse including fear.
the Berlin-Home-Tokyo Axis are Factory workers are pitted against
now
only dimming and foolish each other and against workers
in comparable plants elsewhere.
memories
of
arrange
modern' businessmen
believe' without
wages because
high
world
a
war.
A world with
war will be, I
am
wages are the fuel which drives
unions-r^both members of the
afraid, no world at all. Let us
otir Whole
system—but they be¬ riot admit even
paid less- for doing what we AFL^-who cannot
certainty and confusion, some¬
the possibility of
agree on the lieve in
paying them for w6rk war. At the risk of
times amounting to chaos. That want to do than be paid more for classification of
only 350 workers.
being repeti¬
produced and—I must emphasize tive I
period is now upon us and we doing what-someone ordejrs us Many, thousands of others are
should like to re-emphasize
again—for work produced.
»" ... who were invincible in war are to do.
the
t,i
r
folly of saber-rattling and
partly or wholly out of work as
A new World is
somehow
a result of this
paltry
and
petty
in
cdmirig although" swashbuckling about Russia and
purely inter-union
Responsibilities of1 Our Freedom:
I would not like to
peace. Where we were once strong
go on record the menace of Communism.
dispute in/which, management is
Using
But freedom doesn't come free.
as
in our unity, we now quibble over
diagnosing the condition of its ordinary country horse-sense, we
only a helpless bystander. They
It involves* responsibilities as well
liver
or
its
senseless
trivialities.
basal
We hedge
metabolism. are bound to see that there is noth-"
are
breaking opeii each other's
What emerges from the war is ing in Communism that
and haggle over the smoking ruins as rights. Production volume—su¬ heads in the
streets and spreading
would ever
of a blasted world. We blind our¬ perior to our industrial triumphs terror and
preordained to be .different from appeal to the American
intimidation. The pro¬
Tempera¬
that which existed before the war. ment. It offers
selves to realities ? which "every in the peacetime past—is needed ducers are
nothing that we
trying feebly to coop¬
If business wants to assume
school boy in the next generation to restore our economy and make erate toward a
don't already have and we
its
settlement although
gain
will be able to see with crystal our system of life meet its creed they ard
threatened by both sides just position in tpe composite of nothing by throwing the word
there
has
be
„
clarity. What
realities?
some
of
and
its pledge.
We must have
houses for the veterans back from
these
the
That
have
are
1
because
war
our
of the argument. This strike went
for nine months last
on
debt to. them
unless
nothing matters unless we
is incalculable. We need automo¬
enough to establish
biles in order to re-mobilize our
peace
as
a
permanent and
economic
processes.
We need
the
Government steps in
brings the strikers to their
senses, it may go on for another
and
brains
world
year, and
re¬
influences and forces Which wilT Communist around
as.
shape
and
of
relationship to the rest
the world and its
relationship
to
us,
a
hand full of mud
a
business
will " have
capture the leadership it
to
re¬
once ex¬
erted and show that it
if
it
were
we
were
gang of small boys.
our
As I said I've talked
intimately
with Communists on their
home
nine months while the
recognizes grounds from the small
producers
fry to fee
frigerators, washing machines, all and the
that our concept of economic free¬
head man and I didn't either feel
employees of the industry
That we can't serve world unity
kinds of electrical and mechanical
dom prescribes
suffer to the extent of millions of
bringing the great¬ poisoned or that
unless
we
they have any¬
develop some u,nity appliances which are coefficients
est good to the greatest number.
dollars. ;
•
,.
here at home."
thing to teach us. After touring
of
the
American
standard
of
We need business
I doubt if there is a
statesmanship Russia with my eyes wide
logician in
open
living.
<"
now Us never before
Russia as a Competitor
existence Who
arid in the I found little that
immutable condition.
.
.
;
That
for
the
first
time
But
since
shortly after the Civil War, we
a
mighty industrial com¬
have
haps
We
^ppiild ferretj out the
we
have; a parallel and per¬ flimsiest excuse for ferismctibrial same • sense, we need labor states¬
responsibility. strikes of ^ this febrjt, \ Nor "could manship and above all we need
deliverance from the kind of fam¬
produce to restore the most labor leaders* as
they them¬
an even graver
must
economies
of
the
world.
No, if selves admit,
~r
,
to say that -American man
strength is potentially as great as
age me n t has
what happens to the rest of the
our own, whose resources
learned-fbut apparently American
may be
world is no concern of ours. We
labor has not—that our
greater.
people
1 have seen at close focus the said it once and withdrew. into will simply not stand for
too much
our continental paradise and with¬
concentration of power in
industry of the Soviet Union and
any one
in less than a quarter of a century
I
know that
man or
the
Russians
are
any one group. It offends
we again collide with
catastrophe. all
building in the image of Ameri¬
;of our traditions and it Was
It we say it again it may be our
can
industrial technology.
against
such
They
concentrations
of
last catastrophe. We can't sit at
have studied and are
power
that our forefathers re¬
beginning to
a feast and look out the window
understand mass production and
belled when
they immigrated to
at starving and desolatd peoplO.
this country.
they have decided that they can
Nothing more arouses
Unless we accept the leadership
beat us at our own game.
the wrath of public
They
opinion than
intend to make more steel, more imposed upon us by our victory the
usurpation of too much power
at arms; that leadership will
be. by any Single "set' of
machines, more tools, bigger, bet¬
interests.
lost forever.
ter and more factories;
they in¬
V We are all attached more or
tend
to
I. do not believe, that the world less to
develop their vast re¬
special interests and many
sources more effectively than we is poking to^us*
of us to more than one
group on
have
developed ours. This was though it might well do'so because interests
because; they tend to
made perfectly
clear to me' by it is a bleeding, wounded and, des¬
Overlap. But no single groupconversations I had with people perate world* fcess fortunate
peo* business, labor,
agriculture, poli¬
all over Russia from soldiers and pies who have been shattered
by tical bureaucracy, the
professions
unskilled factory workers
war merely ask us to
up to
help wrirk —can seize an inequitable
amount:
plant managers and even Com¬ out methods fori doing. business- of
poWer Without
petitor—a nation whose industrial
missars.
The
}
world
■
-
,
today
■
\
is
watching
two diametrically different
politi¬
:
cal systems at work—the Soviet
"system and the American system.
The
competition between them
can
and must be a
competition of
and progress not the com¬
petition of war and destruction.
peace
The Soviet
won't" do
any
more,
on
to
their
our
benefit.
own, as well
standard of living although it has
given them the kind of free¬
dom we cherish.
and
no
very
dignity
stage of world history.
Such
that
we
in the United States give
across the
roar
country from time
pic¬
Strife
.•
.■
Between
:
?
checks
Labor
Management
And
and
The -strife between management
labor since the end of the
a
and
balances
which
have
with
and
natural
re¬
great
and
energy
intelligence. I
them and I confess I have
like
solid
a
.
•
statesmanship so sorely needed fallen back on that, grand. old
throughout the world is that' I American device of using incen¬
have seen American businessmen tives in order to get results. Ari
achieve miracles—miracles whose incentive is an incentive no mat¬
ter what
impact shook the world.
During the course of my duties
at Washington, I travelled around
the world three times and visited
practically
had
joined
every
with
country which
us to
sink the
Axis. I know how these countries
feel
about- American
business.
Some of them haven't learned to
tom
of the economic
heap unless
is a place in the world
today for business missionaries to
There
supplement the religious mission¬
aries which have spread their gos¬
pel
throughout the
American
business
world.can
expand
language is used to de¬
scribe and glorify it.
Don't
Babble
About Communism
Suppose. We call, a moratoriiftn
on the gairie; of dragging
imagi¬
nary Communists out from under
the bed, yelling for the police and
screaming insults at our late gal¬
lant and honored ally. If we insist
oft
our'
own
•
freedom •' Of
feoicd
opihion. let's
arid freedom of
knowledge that Our fellow meirif
bers
of the United Nations have
the,same right and lets quit this
infantile babbling that CotrimCinism; and Democracy carinot lite
and
WOrk
toge„thet in the
same
world.
We've
lived
in
the
world
same
Prussianism
and
with" Czarisfri,
free, hUnd ter¬
rorism
a
without wanting to
fight. We've lived in the
start
same
world with every breed and blend
of autocracy, did business with its
exponents
way
and
while
expense
let them
we
to their
went
or
go
ours
our
pleasure. We've lived in the
world
their
at
profit
no
or
same
with
polygamy, cannabalcountry a goirig concern its " opportunities
by
producing
growing concern for nearly foods, for example, in a country ism, anarchy and ardent tribesmen
like China. To accomplish this it who believed that their mission in
century and three quarters.
life was to destroy their mothersis not necessary or desirable to
kept"
; ■; ./
and
industry
considerable
unity which respect and -even affection for
is necessary for the whole world some of their
leaders but that
if peace is to be preserved.
does riot mean that I have the
The reason I am certain that- slightest inclination for their sys¬
business can contribute to the tem, } except insofar as they have
tor time—I do not believe that we they are able to develop a pro¬
shall ever be in danger of a dic¬ gram of intensive industrialization.
own
people—any ope
are developing
that they
see
same
~
To
can
sources
statesmanship demands
evidence of the
mire the Russian
omindus their
as
ayune bickering, we must banish
tatorship of either the Left or
thing close to absolute distator- all temptations which lead us to
Right/This escape from the pos¬
ship even if it is called "dictator- the chauvinism which is as out¬
sibility of authoritarian "control
chip of the proletariat," whatever moded in thef atomic age as the was
the aim of the founders when
that means. It is repugnant to us
chariot and the catapult.
they set up the ; constitutional
in principle yet we should reflect
not
new
-
some¬
that as far as we can
tell, it is
bringing mass education to the
Russians, is trying to raise their
this
'seriously, dis¬ admire our political doctrines; in
turbing the balance of the entire fact, many: feel that theirs <are
They want us
economy. From the. very begin¬ superior. But they have a whole¬
to divide goods for the reconstruc¬
ning of our cotmtry, history has some respect for our ability to
tion of their transportation and in¬
shown that when any one
group produce, Our ability to raise living
dustrial systems. They:
wantf, ,1 gets too big or too
grasping, pub¬ standards and they want' us to.
think, certain spiritual strength. lic
opinions-fee opinion; of fee show them how we did it;
They, want us to help them help
Nations like China which have,
whole—cracks down on 'it, dis¬
themselves,
r
-v
;
ciplines it and sometimes all but in the past, been from 85 to 90%
If we do not meet this
appeal smashes it; That is Why^despite agricultural have come to realize
we in America of 1946
may .be the the frenzies
arid furores which that they will remain at the bot¬
with them to.
system is presumably
good for the Russians. The Ameri¬ generation
of
the
damned.
can system is
undeniably good for meet it we must conquer Our
us,
as
witness the results. The disunity
we must end our
.Russian system is based
ily squabbles that have
in
Karl
Marx
would have described as his brand
Of Socialism. I respect and, ad*
our
a
Business Must Serve Useful
in-law. There was a time in the
disgrace. If it
exploit the Chinese; we have no
Function
\t.. v.;,■;
talent for this sort of exploitation history of the human race when
pace,' it
We should also remember that can seriously disrupt our econom¬
who
had
conscientious
No business can long exist un¬ as the record shows. We can ex¬ people
ic processes, and it might conceiv¬ less it serves a useful social and
scruples against the use of fire
it has, in less than three
pand our textile business,
our
decades,
wanted to butcher everyone who
ably, wreck them. Full production economic
function—and
money automobile tire business. We can
moved a long,
long way from the in America is
dependent upon the making, pleasant as it may be,, is build trucks, railroad equipment, cooked his Victuals. What a terMarxian concept.
The Russians manufacture and the
assembling of a component part of that function machines and tools, innumerable rible world this would be if we
war
is
a
national
'
continues
at
its
♦
present
•
•
-
..
Number 45.33;
^Volume; 164
felt, called upon
THE COMMERCIAL & FINANCIAL CHRONICLE
'
to liquidate peo-
^b^:Wbb^didrt'tr'ftappert to; agree
•
with
us.
Constant vigilance over our own
immortal way of living—the best
conceived
ever
planet-Trover
by
our
this
liberties,
man
on
own
(Continued from first page)
boom and
the second half year.
This gave a great lift to the export
trade and to farm prices-.
We would not allow Europe to
the dollars which she
jneeded if she were to buy
goods, but" we cheerfully lent her - the dollars needed
constant effort to preserve- peace for that
purposesBy a fortuitous circumstance the wheat,
in a world where a breach of
crop in Canada was not good; in 1924,. and our own wheat
peace will mean the end of all
crop was abundant.
The position of our farmers was radi¬
things.
For those freedoms and this cally lifted.
Prices rose rapidly, and we passed into an era
heritage we must be willing to of prosperity; sustained by additional doses of cheap money,
work and we must .be willing to
particularly in 1927, which lasted until the stock market
risk everything if
our
over
is f our
priceless
own
heritage
chief concern---That - plus
crisis,
serious setback
had reached
we
came.
new
highs before another
«•
earn
§
our
Percentage of Unemployment
7
The
revival of 1935-37
extreme
of
percentage
unemployment,
never
depression
got
of 1921.
year
low
as
in
moreover,
the
it had been in the
as
■
■
.
but
necessary,
will
it
be
is
that
labor
labor
a
bound
John Stuart Mill
looking at
of
love
to
and
a
might have been
today when he said:
us
"A
people may prefer a. free
government but if from ignorance
cowardice
Or
spirit,
they
of
want
or
public
unequal
are
crash of 1929.
succeed.
/
.
•
-
<
,
,
on
a
.
came
diluted
by the artifices used
to cheat them out of it; if by mo-
meiitary discouragement
panic,
porary
or tem¬
fit of enthusiasm
or
railroads and labor to urge
prices,
that there be
no
into the
reduction of
all
less unfit for
these
they
cases,
reduction of wages, no slackening of the pace, and
further that additional capital outlays be made by
are
<
"The
the
serves
that
is
name
of
pre¬
serving our own good in our own
way so long as we do not attempt
to deprive othersxof theirs, or im¬
pede their efforts to obtain it."
j
I
think
that;, all
Americans
should
paste these remarks in
their hats.
Redeem Certain Indian
we
had the AAA—-the
Agricultural Adjustment
Administration; - we had the NRA—-the National Recovery
Administration—the one trying to raise farm prices relative
to manufacturing prices, and the other raising manufactur¬
ing prices arid wage rates relative to agricultural prices;
We had also the appalling currency experiments and the
debasement of the dollar, first in thd Thomas Amendment
to the
Agricultural Adjustment Act, then in the gold buying
policy in the Autumn of 1933; then- in the definite debase¬
Currency Notes
Announcement was made. on
Oct. 21 by Allan Sproul, President
V
ment* of the gold dollar in the Gold Reserve Act of 1934.
The policy, of spending for spending^ sake was announced
of the Federal Reserve Bank: of
New York, that the Reserve Bank by- the President in early January of 1934, to make employ¬
of India has made arrangements ment.
We had a great intensification of the cheap money
whereby, up
to and including
policy for the same purpose. Acting on the theory that the
Dec, 31,* 1946, Indian ctirrency
;
notes, issued "by either' the Cenr buying power of. the workers! creates prosperity, and that
tral Government or the Reserve High wage rates create prosperity, we forced up wage rates
Bank of India in denominations and shortened "hours under NRA,
And acting, in part, on
of 500-, 1,000 and H),000 rupees
the theory that the rich and well-to-do save instead of spend¬
lield in the United States may be
forwarded to the New York Re¬ ing, we imposed unprecedently high taxes on the rich and
■
Bank for redemption.
serve
der
Un¬
well-to-do.
ordinance promulgated by
an
Acting
the Governor General of India on
Jan.
to
12, 1946, these notes ceased
be legal tender after that date
and
withdrawn from
were
circu¬
cause;
-;rPJ
on
the theory that corporate savings were-the
of depression, we adopted in 1936 the imdistributed
profits; tax on corporations—which we abandoned with a
sigh, of relief in 1938, over the Presidents plaintive
lation; In its announcement the great
Ifew York Reserve Bank
protest, but not until it had done great mischief,
says:
Bank of
receive and hold
New York will
all such notes
Reserve Bank
new
imposed such
securities and upon
and 1934 that
we
cation
largely paralyzedithe. machinery whereby
receipt
the
to
Reserve
Bank
35,631
1908
36,580
37,454
1910....
1912.
38,133
38,668
39,089
1913
39,500
1911......
,
;
•
40,083
1916......
,
40,314
1917.
1919......
41,088
41,159
1920.—..
41,897
1921
1922:..:..
42,445
42,966
1923.:.—
43,760
1924...
37,728
40,127
42,685
44,187
42,029
41,339
37,691
,
40,752
1918:.-L.-w
34,875
34,284
36,735
37,580
37,097
38,169
44,549
1925.
1926
1931.:::..;
:
;
1
50,830
51,402
1935
51,879
1936—...
52,382
53,011
53,699
1938
—
1939.—:.
756
21
6.3
;;; 719
1.9
553
;
1.5
1,571
4.1
;
920
v
-
2.4
1,018
2.6
■
1
5.6
2,214
2,355
187
5.9
'
0.5
-*1,933
-*3,099
*870
-
558
4,754 '
- -
2,917'
749
2,034
817
;
''464 :
1,620
B 1,857
:
47,925
45,216
41,551 V
37,704
429
3,809
8,113
12,478:
12,744
10,400
9,522
38,086
54,393
*Sueh negative
1.8
2,296
46,057
;
.
49,664
50,182
1934..—..
1933-.—.
621
*143
45,498
45,319
-;
;
,
1932....—
1,430
'
44,192
46;939
1928:..^
,47,914
1929—.."..
' 48,354
1930..:... & -49,025
1.6
4.8
43,011
45,009
45,962
—
5.7
„
4.4
42,515
1927...^.
5.7
1,523
40.049.
Percent of
Labor Force
500
38,482 '
37,575
'
1914—39,789
1915......
;
.
27,378
28,233
1
30,405
30,31931,175
33,032
34,790 •
as
ployment
1,647
1,721
41,002
42,357
44,783
46,639
43,600
45,314
7,599
6,372
10,099
9,080
unemployment arises statistically from the fact'
that persons: are drawn into the labor force during periods of in-;
creased labor demand who are not reckoned as members of the labor
-
This
is
particularly true
in. agriculture.
The
increases
in
restrictions upon the issue of employment in agriculture in May, June and September, 1929, are
stock market transactions in 1933 largely, if riot entirely, responsible for the negative unemployment;
severe
apd, will investors' savings are put at the disposal of active busi¬
transmit the accompanying appli¬ nesses.
We passed labor legislation which made it increas¬
a
holder
(the
;
for account of the
of India, will give
We
:
r
34,647
force.
~
"The Federal Reserve
1937—
"
32,605
33,653
1907.,..:.:
1933, under the Democratic New Deal, we began a
series; of intensified interferences by the government with
markets:
1904..:...
1905..
In
freedom which de¬
only
Employment
,
1906
;;
Coming of Democratic New Deal
Unem-
1901.—29,959
30,905
fl903H-i.i •
31,842;
,1902......
~
He also said:
:•
1909......
more
liberty."
the years
Unemployment
'Total
Labor Force
1900.—...
29,025
railroads and; industries and by the States and municipal¬
duced to lay their liberties at the
ities.
We manipulated the money market again in 1930,
feet of even a great man or trust
and we raised the tariffs again.
We then went into the
him with powers which enable
him to subvert their institutions— appalling depression of 1931 and 1932.
in
covers
(In thousands)
;
Average
for ah individual they can be in¬
or
It
The follow-
studies of the
Total Unemployment in the Labor Force
Annual
no
to urge
its worst.
1900 to 1939, inclusive.
The figures are taken from the
"Conference Board Economic
Record," March 20, 1940.
market, buying grain and cotton to hold up their prices.
exertions necessary for preserv¬
Late in 1929, after the crash, the President of the United
ing it; if they will not fight for
it and directly attack; if they can States called together the leaders in business and banking,
be
or
National Industrial Conference Board.
appeared to be highly successful until the grand smash
in 1929, Then other governmental interferences with
came
The Federal Farm, Board,
free to do its best
was
ing table is borrowed from the authoritative
.the
to
for
cure
enterprise
effort at, governmental economic planning,
vast expansion of debt, foreign and domestic,
markets followed.
a
unemployment, it is entirely obvious on
the record that the era of
managed economy has been a
total failure, as
compared with preceding periods when the
government was letting things largely alone, and private
The first
based
As
.
^
in these months,.
^
,
*
In the period
World
of
.covered by- this table before - the first
War, the worst percentage of unemployment was in
ingly difficult for labor and enterprise to get together on the year 1908, following the Panic of 1907* Unemployment:
Xpdia. It is our understanding that
in that year averaged 6.3% of the labor force.
There were
}ii the Reserve Bank of India is mutually advantageous terms.1 In this; going partly on the
theory that high wage rates would make prosperity, we 2,298*000 workers unemployed. in that year. In 1906, the
satisfied that the notes are genpassed legislation fixing minimum wages and limiting'.the year before the panic, there was actual negative unemploy¬
: tline arid that they were acquired
hours of labor. '
ment, meaning that persons were drawn into the labor force
legitimately, -the. holder will .be
What follows is an effort to measure statistically the who did not ordinarily belong - there, due to increased de¬
paid therefor in United States
In 1910 unemployment was reckoned, a
dollars at the rate of $30.12 per effects of these governmental policies' upon the volume of mand for labor.
100 rupees.
employment, the application of new technology to industry, little over 500,000 men, or 1.5% of the labor force. In the
' f'The notes and accompanying
and the extent of slack in the utilization of our industrial crisis,; unprecedented in gravity, in 1921, which followed
the collapse of the. postwar boom, unemployment reached
Application should be sent to resources.
"Federal Reserve Bank of New
We had, following the unprecedented
depression of 11.2%, the heaviest in our history to that date, but the figure
Yfork, Foreign Department, Fed¬ 1932 and early 1933, a very modest
1926
recovery which, how¬ dropped rapidly to : 1.7%'two years-later, in 1923.
eral Reserve P. O. Station," New;
shows unemployment of only 1% of the labor force.,. |,,
ever, did not grow strong until after the Supreme Court's
■
.
.
•
.
-
York 7, N. Y., at the expense and
Tisk of the holder and they may
sent
Ixolder's bank.
•
Authorized
to
After Dec. 21,
;iri
an
later
or -
through
The
the
Federal Re¬
Bank of New York is not
serve
receive
warded
Dec.
by
a
notes
any
1946, unless mailed
postmarked not
envelope
than
1946,
21,
or
bank with
a
for¬
state¬
ment to the effect that they were
Teceived
;i946.":
v
before
or
on
"
decisipn knocking out NRA at the end of May in 1935. Then
had; a vigorous recovery running from, the summer of
1935 to August and September of 1937.
But this recovery,
we
direct
'
-
Dec.
•
-
21,
P
at its
high
best, did not bring levels in industrial production as
those of 1929—seven years before.
The Federal
as
Reserve Index of Industrial Production
(1923 = 10Q) reached
a
high of 125 in 1929, while its peak in the 1935-37 revival
(reached in late 1936)
was
121.
Reserve Index of Production.
eral Reserve
Index of
our
past history.
use
This had
Always in
here the old Federal
I do not trust the
Production, for
cated later in the article.)
in
(I
our
reasons
never
new
Fed¬
to be indi¬
happened before
past, following a major
|?:A 2% unemployment is really full employment, when
allow for seasonal unemployment, sickness, shifting of
jobs, and that very considerable part of our population which
is
unwilling to work all. the time, and prefers to rove occa*
we
sionally.
'■"V.
or
v
\r
shows unemployment of 3,809,000,
7.8% of the labor force. The years 1931 and 1932 were
The bad year, 1930,
years
of extreme depression, with the percentage
of unem¬
ployment running 16.3% and 24.9%, respectively. ;
;
Prior to 1924 we had not regarded it as a Federal Gov.
ernment function to make
employment.
Continued
on
page
2228)
Employment was
THE COMMERCIAL &
2228
Monasterio Head of
(Continued from
announced officially on
Oct. 15, by Luis Montes de Oca,
was
Chairman of the Board of Credito
Internacional, S. A. and of Banco
Internacional, S. A. of Mexico
City that Juan M. O. Monasterio
has been elected President, Di¬
rector and Chairman of the Exec¬
utive Committee of Credito Inter¬
a member of
the board of directors 6f the Ban¬
nacional, S. A., and
International, S. A.
co
Mr.
Monasterio
of
been Vice-President
now
has
the Mer¬
cantile-Commerce Bank and Trust
Company of St. Louis, Mo., VicePresident of the Bankers' Associ¬
ation
Foreign
,
.......
protection of the sound gold dollar,
the people solved the problem of employment themselves
amazingly well. When the Federal Government took over
and undertook to solve the problem for them, grave dis¬
asters followed.
Trade
States
But the deterioration from 1930 to 1940 is
very great.
Slack in American
Industry: 1914
versus
trial
production which we ought to have had between 1929
1939, the year 1939, as shown by the Federal Reserve
Index of production (1923-1925=100), stands well below
Unemployment Not Cured
terrific volume of un¬
1929.
There
was
immense slack in American
(Jhamber 'of Com¬ employment. He did not cure it.
merce, Washington,
and of the
National Foreign Trade Council of worse than the figures for 1932.
He is
New York.
recognized
authority
leading
on
tional trade - and finance.
as a
interna¬
He was.
of the
early advocates in 5the
where
he has
lived 30 years, of intimate and re¬
ciprocal cooperation of a lasting
and permanent nature with the
Spanish American Republics, not
only in the field of business and
finance, but in governmental and
one
United
States,
cultural
relations
Prior
well.
as
to his residence in St. Louis, he
outbreak of World War II did the
for
these two years,
an
leans, La., and a factor in the de¬
velopment of that port as one of
for
arteries
the
designed to promote employment, is
by the historical and statistical record.
economic policy
condemned
main
Retarded Technological Progress
world
the
industrialization
Mexico
of
and in the
financing of enterprises
in that country. He has traveled
extensively through the Western
Hemisphere and in Europe to par¬
ticipate in many international
financial and trade conferences.
;
f The 'International" group with
affiliated
financial
institutions
throughout Mexico, is headed by
Luis Montes de Oca, former Sec¬
retary of the Treasury of that
country and former Director Gen.eral of the Bank of
Mexico, S. A.
The addition of Mr. Monasterio to
the
'Tnternacional"
will
group
bring to it an intimate personal
relationship with the banking, in¬
dustrial, and public life of the
United States.
Mr. Monasterio is
expected to arrive in Mexico City
about Nov,
1
to
his
assume
new
duties.
Dutch Postpone Sale of
Dollar Bonds
i
Under date of
Oct.
from Amsterdam
22
advices
(ANETA) pub¬
lished in the New York "Journal
of Commerce" said: "Sale on the
Stock
Exchange here
States dollar
be resumed
United
of
bonds, scheduled to
Friday under
a
gen¬
eral license issued
by the Nether¬
lands
Bank,
postponed
cause
some
was
Dutch
dollar bonds
stolen
were
be¬
whose
owners
or
other¬
and Impaired
Capital Equipment
trade of the United States. Durr
ing the last few years, Mr. Mon^sf
terio has cooperated actively in
our
labor force, as compared with 11.2% War gave us unlimited demand and strained our productive
of extreme depression, 1921. resources to the limit. It is possible to measure the extent
The historical record is damning.
The New Deal, viewed of the slack in industrial capacity in 1914, as compared with
as
the
greater than
which is 12% of the
National
Or¬
trial potentialities are supposed to be far
best of industrial achievements. This was not true in the years
namely 1937, the figure stood at 6,372,000, preceding governmental economic planning. The first World
of the labor force in the year
nia
New
annual average figure
unemployment get below 8,000,000. And in the
Vice-President of the Hiberof
industry in
The figure for 1933 are 1939, an immense amount of unused capacity in manpower,
The years 1933 to 1939, in technological knowledge, and in idle money.
We have had from the Technocrats and from others the
inclusive, show unemployment exceeding 10,000,000 for
three years, including 1938, and show unemployment ex¬ proposition that there could be an incredibly great increase
ceeding 9,000,000 for five years out of the seven. In only in industrial activity and in the volume of production, if
two years of the Democratic New Deal period prior to the only production were not limited by demand.
Our indus¬
was
Bank
1939
Instead of the 3% to 4% per annum increase in indus¬
and
President Roosevelt inherited a
-
United
2227)
(Percentage, of Metal Working Equipment Over 10 Years
matter for the
of the
United States, and a member of
the Board of Directors of the
for
page
Old)
people themselves to work out. Beginning
Year
Percent Year
Percent
with the Federal Reserve purchases of government securi¬
44
1935
65
ties in 1924, we have had government policy directed in¬ 1930—
48
1940^.—............
1^.222^2.^.2 ..y §2:70 §t£
creasingly toward making employment. The explanation of
It may be said, with
respect to these figures, that the
the good figures for employment prior to 1924, and of the
year 1925 perhaps represents a somewhat better than nor¬
desperately bad figures for employment which followed mal situation inasmuch as there
had been, in the years
1929 is, in my judgment, to be found in precisely this fact.
1921-23, an immense spurt in the utilization of new tech¬
Under an old-fashioned Federal Government which, in
nological. ideas and in the installation of new machinery.
financial matters, was concerned primarily with its own
a
solvency and with the
to
up
Thursday, October 31, 1946
Has New Deal PlamungBeenA Success ?
Banco Infarnacional
Jt
FINANCIAL CHRONICLE
From the
ductive
1916 when the coui^ry was working at full
capacity, and
straining its capacity, in response to unlimited war demands
from Europe. The figures which follow are taken from a
careful study by Frederick C. Mills.
'
Physical Volume of Production and Construction 2
standpoint of the full utilization of the pro¬
be tested by two other sets of very significant
The degree of unemployment does not tell the full
story.
The amount of slack in the industriaF situation is
partly a matter of unused labor, but is also a matter" of
unused capital and unused technological knowledge.
The
New Deal policy, as we have seen, had made capital timid
in the extreme and had greatly retarded the application of
new technology. Obsolescence in American industrial equip¬
ment had grown to a startling extent in the great depres¬
sion and in the early years of the New Deal.
I quote the
following from H. G. Moulton as descriptive of the situation
1914-1922
v
capacities of the American people, the contrast
unregulated economy and the New Deal
Total Volume
between the old,
Total Volume
of Production
Year
of Construction
economy may
1914.
100
figures.
1915.
113.7
1916.
120.6
111.3
1917.
125.5
93.8
1918.
124.5
1919.
116.7
88.7
1920.
124.5
48.5
1921.
103.9
91.8
1922.
121.6
139.2
2
New
100
97.9
-
64.9
Frederick C. Mills, "Economic Tendencies in the United States,'*
York, 1932, pages 188 and 191—Bases changed from 1913 to 1914.
The year 1914 was not a good year because we had a
sharp shock at the outbreak of the War in August, but in
"In many lines of industry there has been an enormous that year, the slack as shown in Mills* figures was relatively
amount of 'deferred maintenance* in equipment, and there low. Production increased 20.6% in the two years following,
has been a steadily increasing obsolescence. The 'American and construction 11.3 %.
I rest the case primarily upon the
Machinist* has made three 'Inventory and Obsolescence Sur¬ year 1916.
It was, without interruption, a year when de¬
in 1935:
veys,* at five-year intervals, in the field of metal working mand was pressing us to the limit of our power to produce.
equipment. On the basis of a survey covering 1,345,447 major The years 1917 and 1918 are complicated by the withdrawal
items of machine tools, presses; forging machines and weld¬ of the soldiers. The years 1919 and 1920 are complicated by
ing equipment, the following trends are revealed: In 1925 the depression in early 1919 and by the crisis in the latter
the amount of such equipment over 10 years of age, and
part of 1920. But the year 1916 has no such complication.
hence defined as virtually obsolete, was 44%; in 1930 the It stands 20.6
% in production above 1914, There was no
figure was 48%, and in 1935 it was 65%.
slack in production in 1916.
But this, does not mean that
expansion of new plant, there was'in the bad year, 1914, 20.6% of slack, because in
and there has been comparatively little replacement of worn- two years we would normally expect a substantial growth
out, and obsolescent capital structures.
The amount of new in productive capacity amounting to 3% or 4% per annum.
capital issues for the purposes of financing new plant and The amount of slack in the subnormal year 1914 was thus
equipment declined from $3,446,000,000 in 1930 to $262,- not over 14%.
In contrast, the slack in 1939, the year in which World
000,000 in 1933. The data with reference to the decrease
in the production of goods destined for capital equip¬ War II broke out, was appalling.
If we accept the new Fed¬
eral Reserve Index of physical volume of production
ment
also definitely point in the same direction.**1
The revival of 1935 promised to improve this, but the (1935-1939=100) we get an increase between 1939 and the
undistributed profits tax of 1936 proved a powerful deter¬ peak year of production, 1943, from 109 to 239, or 119%.
rent. American cornorations paid out in dividends more Subtract 3 % per annum from this for the four years (repre¬
than their total profits in 1936 and 1937, while the acute senting normal growth for the four years), we would still
"There has been almost
.
no
...
wise
illegally taken' from theni
during
the
German
occupation
have notified the U. S. companies
which
issued
sider
the
the
bonds
to
con¬
bonds
Tost.'
It
was
have
learned yesterday,
v.-
"While
after the repeal of the undistrib¬
profits tax, greatly reduced incentives to make large
depression of 1938,
according
to
advices
from NeW York, U. S. purchasers
of Dutch-owned dollar bonds are
uted
them
by
'good
delivery,'
the
Netherlands
it
was
Bank
pointed
der
some
as
lost might un¬
circumstances
shown
"Efforts
arrange
are
now
blocking
by the foregoing table, with 9,080,000 men unem¬
ployed, on the average, in the year 1939.
The
receive
bank certification.
heavy obsolescence, a large body of unused
technological ideas, and a great deal of idle capital, and, as
out that bonds notified to the is¬
suing companies
a
figures from the "American
still in the year
1940.
Machinist" look worse
The following table shows the trend:
being made to
of
such
.
bonds."
'lost'
the year
H. G. Moulton,
"Income and
Institution, 1935, pages 23-24.
Economic Progress," The Brookings
increase of
our
107%.
This would
utilization of
our
mean
industrial
a
slack of
resources
in
1939.
It may
son
be observed, moreover, in making this compari¬
between 1914-16 and 1939-43, that the base year 1939
radically improved by the outbreak of the war, the
showing a sharp acceleration in pro¬
was
latter months of 1939
duction, whereas the base year 1914 was sharply deterio¬
rating after the outbreak of the war, the latter months of
1914 showing a real depression.
\ . ;
;
,
I do not think that the contrast between the two
periods
great as these figures would indicate.
I accept the
criticisms which Gen. Leonard P. Ayres and others have
is
i
an
50% in
over
We came into the period of the second
capital outlays.
willing to consider certification of World War with
even
as
Volume
164^'Number 4538
made of the
as
it is in
How
Federal Reserve Index of
new
part
2229
production, based
hours rather than physical output.
difference there is between production
which we might have enjoyed had we had the old flexible
unregulated economy.
V*
hours and
logical ideas
on man
great
measured in
THE COMMERCIAL & FINANCIAL CHRONICLE
a
man
production measured in phy¬
sical output is
strikingly shown in an address by Andrew
T. Court before the National Industrial Conference Board
In 1939
had idle men,
we
by
far the most important basic
is the insufficiency of pro¬
duction as yet in relation to the
idle money, and idle techno¬
existing
Since
The war set them to
money supply.
appalling scale.;
on an
work, but it took the
war
to do it.
on
crease
the
new
Federal Reserve Index
of
Mr. Court, criticizing
Industrial
Production,
that according to this computation, July 1946 automo¬
bile production was 78% above the* 1935-39
average. The
actual production in
July was about 300,000 cars and trucks
compared with
period,
or
ment's
and
trucks
on
actually manufactured.
on
employer
I
average
production index is not based
estimated
the
of 335,000 units for the '35-'39
down 10% rather than up 78%.
The Govern¬
an
the number of
Rather
the
cars
index
is
use it.
I use instead General Ay res' figures
presented in the long chart, "American Business Activity
Since 1790," 17th edition
March, 1944, published by the
Cleveland Trust
Company. This series has the advantage
giving me comparable figures for 1914-1916 and 19391943.
In the figures which
accompany this chart, General
Ayres gives monthly figures for percentage fluctuations
above or below an estimated normal. I have
averaged these
monthly fluctuations to get the percentage, plus or minus,
for the year. The
year 1914 shows an average of -—5.25%.
The year 1916 shows an
average of +13.75%, making an
increase of
approximately 19%, from the bad year 1914
to the year of unlimited demand and full
production, 1916.
As General Ayres'
figures make allowance for estimated
normal growth, it is not
necessary to make any adjustment
to allow for this
factor, as we have done for Mill's figures
,
of
Federal Reserve Index, above.
For the year 1939 General
Ayres' figures show an aver¬
age of —12%, and for 1943 an average of +38%, with re¬
spect to the estimated normal. This tyould mean an increase
of 57 % in
and
we no
10 years
was
longer have
a
production with respect to normal between 1939
1943, indicating
do
cannot
have
accumulated
wants- and
needs beyond all past
experience.
of currency, bank deposits
and government securities is from
three to four times
1936,
are
at
$170
billions
a
a* rate
of
nance
year,
or
conditions
than double the highest pre¬
peaks of 1929 and 1940.
inflationary
The
potential
thus con¬
tinues to be great—and wartime
controls intended to keep the flood
of
in check until produc¬
money
tion could catch up with
demand
have been largely abandoned.
If
to avoid
Then
the
increase
would
be
24%,
and
ture.
Responsibility for maintain¬
ing
orderly
economic progress,
which will prevent a further in¬
flationary development that would
inevitably be followed by a de¬
cline has now largely shifted from
government to labor and manage¬
ment. - 1
Three
significant sets of figures thus converge in the
condemnation of governmental economic
planning: (1) the
table for employment and
unemployment, from 1900 to
1939, inclusive; (2) the figures showing the rapidly growing
percentage of metal working equipment over 10 years old;
and (3) the figures
showing. Jio w little slack; there -was in?
the utilization of
our
still domi¬
Fiscal policy and scattered
are
about all that
remain to the government as pro¬
tective measures, but these, too,
duction which
as
we
3
The only figures I find which suggest that the
expansion of
not markedly exceed the ex¬
pansion in World War I, are those of Geoffrey H. Moore, "The
Production of Industrial Materials in World War I and II,"
'"'■'•".i
production in World War II did
.v
^National
Bureau of Economic Research, Occasional Paper 18,
March, 1944.; His study, however, is concerned with the output
of industrial materials, rather than with total industrial
produc¬
tion (materials and finished products). His figures show a^rise
*r
A between
1914
economic groups is the
blood of
a
lifeprogressive democracy.
this
But
democratic
should not
cial
own
be
a
freedom
license for spe¬
interest groups to seek their
ends without regard for the
life, since the end of the
we
.
,
V
i
fully we must find means of set¬
tling conflicts of interest by law¬
ful and peaceful democratic proc¬
esses, without disrupting economic
stability and progress.
We
examples of conflicting
interests on all sides-. For instance,
cattlemen
most
of
see
changes in the output of
industrial materials and in total industrial production, but that
is not easy to say how close this
relationship is in wartime.
"Hence, it is uncertain in what degree our conclusions concern¬
ing the production of industrial materials apply also to total
His figures makes
no
allowance for
the
very much greater elaboration in the working up of raw ma¬
terials for war purposes than is necessary in
peacetime. I think
that
the
revised
hours
man
;
between
Federal Reserve index series, with its use of
greatly exaggerates this point. On the other hand,
I think that Moore's figures cannot be used as an
index of total
industrial production. The estimates which I give in the text for
World War II are intermediate between Moore's figures and those
of the revised Federal Reserve index. It is to be observed, more¬
over,
two
that the
periods,
chosen by Moore, as representative of the
different from those used in the text.
years
are
object to control
but want the
livestock prices,
terfere
correspondence
the basis of what is
on
interest
whole.
It
want
of
is
the
in
to
government
strike
if
with
products;
ceilings
stop a railroad
it
threatens
distribution
most
to
of
.farmers'
or
in¬
their
opnose
con¬
no
real
as
a
want
tive
For
as
in
conflict,
and
have
only
about
us
to look
today to
the
as
introduce
pro¬
outlined
Board
at the
realize
uncertainties
which
market
from
term issues.
would
shifting
into
longer
The fact is that there
types
large
volume
securities
of
that
—
mature
monthly.
If a policy were
permitting
short-term
adopted
rates
rise without setting an
limit, the Treasury would
difficulty in refunding its
maturities, since banks and other
to
upper
have
capitalism^ which we want
preserve in tlffe* country. The
^
challenge to
^
v
our system can and I
investors would be likely to with
be met by providing a sus¬
hold funds awaiting-even higher
must
high 'level
and. employment.
shall
of production
Otherwise we
inevitably
drift
towards
and more government in¬
tervention and controls until
has
system
our
but
been. replaced
other
only
area
and
affect
left
some
term
of
an
increase
•
rates
in
as
a
combating inflation.
As
the Board pointed out in its An¬
nual Report for 1945, there is no
reason to suppose that even if the
short-term rate
were
for
banks.
an
It
;
has
issue would
because
it
the
arguments that might be
against putting out such an
made
issue at"this time a¥e th&t it wbuld
mcrease
bank
credit
insur¬
and
companies and savings banks
would not only use accumulated
ance
funds
for .such
investment but in
addition would
issues
to
sell
banks
in
bank-eligible
order
to
raise
funds with which to subscribe, or
Companies and others have
•
were
marketable securities
anti-inflationary
of
'
Various bankers, dealers, insur¬
interest
ra tes
sharply
there
pressure to drive
rates un.
This would
eligible
be
Treas¬
Government Financing
recommended '
some
natural
no
would absorb savings which could
be used to retire bank debt. Some
the Board has regulated'consumer
credit. Let m e discuss these three
Short-term
rise
been said that such
the Executive Order under which
1.
is
short-term
2 Vi %
■
not
certificates; (2) at the Board's
fixing of margin requirements at
160%; and (3) at continuation of
\
There
pegged
or
has been much discus¬
about the issuance of long-
sion
ury
.
1 lk%,
.
aimed particularly at three points:
(1) At the Reserve System's sup¬
subjects briefly,
be
should
or
There
re¬
on
not
rate
also, be
long-term
be exercised by the
government.
Criticism has been
%ths rate
is
jeopardize t^e savings bond sales
program and cause wholesale re¬
demptions.
:
straint may
port of the
If
level..
the
where
it
level.
would
credit
about
then
short-^rm
1Va%
permitted, to
social dis¬
fiscal
whether
1%.
at
With most other inflation curbs
on
question
the
(
should be pegged at % % or per¬
mitted #to fluctuate uo and down,
order! under rour- dwn system.
more
The
rates.
whether,
by
something akin to the other two—
not because our people deliber¬
ately choose it but because they
would be likely to consider it the
only alternative to widespread
ance
the
into
discourage
could be very little uncertainty as
to short-term rates in view of the
ocratic
to
em¬
that a flex¬
policy permitting some in¬
crease
in shprt-term rates would
broadly speaking,
of economic
communism,
socialism
which, in greater or lesser degree,
prevails in England and through¬
out western Europe, and the dem¬
general
order
be
ible
I
that there are,
three
debt
the
its
banks
We
world
of
should
it
It has been argued
I
national interests.
our
banks
report as possible alterna¬
tives for Congress to consider.
»•;
enough to minimize destruc¬
economic
tect
my
part,
possible—but
increasing the short-term
discouraging
such
ures
country
question
a
little
as
means
coal
close
a
issues
political system function success¬
and 1917 of about 32% and from 1939 to 1942 of
about 35%. He states that in peacetime over short
periods there
industrial production."
og;
to make our
are
war.
If
economic and
reduce
phasized that the Treasury's debt
retirement program has been an.
effective means of accomplishing
this desirable objective, and post¬
poning need for more direct meas¬
agent
must be, in effect, the
matters \which
and
it
monrtization
the
by
collective
and
is
>
free
of
Certainly freedom of ex¬
pression and the interplay of the
point of view of manifold social
It would have
further
gone,
attention—and criticismwill no doubt be centered more
war.
would
As for
The gov¬
Popular revulsion against direct
controls and other restraints, of
course, is natural in the aftermath
industrial
robbing us, year after year, of the pro¬
might have had and the consumption
the
the
upon
economic "distress and
by
car¬
rate with the idea of
by
increasing contro¬
versy' and are likewise dependent
Upon majority will.
beset
are
capacity in the year 1914 as public good. This spirit of unen¬
degree of slack in the year 1939. All of lightened self-interest has in¬
creasingly pervaded our national
these figures justify condemnation of
governmental eco¬
planning
assured
umpire between contending pres¬
sure
groups,
deciding important
more
contrasted with the
nomic
as
of all of us,
wages,
profits and prices that
prudent policy in the national in¬
terest seemed to require while ;nwere
the cost of
ties could be increased sufficiently
to deter this private borrowing.
has
prosperous
be
reliance
ernment,
tained
credit controls
private index
long term growth, would
show 1914 at 4.2%. below normal and 1916 at
13.6% above
normal, giving a percentage increase of 18.6% between 1914
and 1916.
The same index shows*1939 at 8.5 % below nor¬
mal and 1943 at 48.6% above normal,
making an increase
during the four years of 62.4%.3
a
and
cannot
play of market forces.
to hasten the victory, is gone, and
with it public support of the di¬
rect
controls
over
materials,
forces
to
hour—nor
mainte¬
intervention.
painful period of readjustment
distortions in the wage-price
structure, we must now rely pri¬
marily upon self-imposed restraint
on the part of > powerful conflict¬
ing groups in management and
business, in labor and in agricul¬
nant.
Yet another computation, taken from
of industrial activity,
adjusted for
stable
the
of
the flationary
increase for 1939-1943 would be 59%.
experience
that
a
an
1914-1916
of
exclusive
the
going through
add
sumption.
economy
of the
degree of governmental action and
we are
would
the
considered. .Past
demonstrated
running
ments
about
war
in
great as in
income pay¬
as
the
of
rate
bank
bearing as an anti-inflationary
long run aU
We have been witnessing
the expense of another. Prosper¬ factor.
a rapid rise in business,
ous
consumer
economic
conditions
which
It is hardly
will benefit all groups can be se¬ and mortgage credit.
reasonable to "suppose that shortcured
only if the requirements
of the economy as a whole are term rates on government securi¬
gain
current
and
more
sector
one
to
production—the basic need of the
in this highly in¬
interdependent age
ever
dustrialized,
that
appalling slack in 1939.
The unity
of purpose, which
A very able statistician has
supplied me with figures enabled us to achieve a miracle
based on the methods of the old Federal Reserve Index of of production for war and thus
production (1923-25=100), which show for the years 191416 an increase of 30% and for the
years 1939-43 an increase
of 71%.
Here again we must make allowance for normal
growth. Assume this to be 3% per annum for each period.
than
more
great slack of unemployment. We
form
Federal Reserve Index
as
new
Today
ago.'
it
short-term
the
rying the public debt.
It would
not
reduce
the
existing money
supply.
It would add nothing'to
(Continued from first page)
„
as
pays.
and T do not
and the
V
much
as
The backlog of savings, available
to individuals and business in the
new
add
It
Reserve Board Credit Policies
times
short-term
tne
earnings,
which are still at very high levels
due to government bona noldings.
Inflationary Forces and Federal
the basis of the. number of hours for which
thoroughly distrust the
in
would
says
of
most
debt, outs.de of the Reserve Sysr
tern, is held by the banks, an in¬
Sept. 26, 1946, published in the "Commercial and Financial
Chronicle" of Oct. 3, 1946,
page 1677.
:
cause,
increased to
Such
would borrow from banks.
would
issues
crease
the
are
not
serve
to /.in?
savings of individuals who
from
most
the
important
inflat'on y
group
standpoints
Series
E, F and G Savings Bonds
already offer aftractive invest?
ment
If
outlets to
it
should
in the future to
this
group.
•
desirable
provide an addi¬
appear
\Vi% it would be of
tional investment outlet for funds
combating inflationary
o£. insurance; companies and sav4
dangers which have arisen from
two primary causes, neither." of ipgs banks it would be preferable
as
high
value
as
in
prices of their
to™ do."this through the offering
which
would
be
corrected
by
but want price floors;
of Tong-term non-marketable sehigher rates.
One cause is the
general, labor unions object to
curjt'es the y'eld on which would
volume of money already created,
wage controls, tut want the gov¬
be 2V2% if held to maturity. This
which cannot be rapidly reduced
ernment to control prices; most
w^'ild avoid the danger of future
—and in fact can only be continu¬
businessmen favor curbs on wages
additions to long-term
holdings
ously reduced by having a budget¬
but not on profits; bankers want
of banks and it would protect the
ary cash surplus sufficient to con¬
the
government to balance the
Treasury against investors who
tinue the program of debt retire¬
lcng-ter^
securities
for
budget, but many also advocate ment. This can come either from buy
c^ovt_term holding, .thus getting
higher interest rates on the pub¬ taxes or from the sale on balance ol
2!A%, plus the premium as ma¬
lic debt ostensibly to combat in¬ non-marketable bonds to the pub¬
turity is reached, on what in ef¬
flation. And so it goes.
lic, using the proceeds to pay off fect is demand
rrpnev s^
as
on
the
products,
in
We
must
recognize
the
fact
bank-held
debt.
The
other,
and
(Continued
on page
2230)
2230
THE COMMERCIAL & FINANCIAL
CHRONICLE
would
to
Reserve Board Credit Policies
(Continued from page 2229)
2Vz%
rate
is
maintained.
In
opinion this long-term rate
should not be permitted to
go
been
up,
and, if heed be, the market must
be supported
by the Federal Re¬
serve.
Otherwise the cost of car-
the
public
increased,
ings
debt
would
tions
under
would
and prevent
ent
which
pres¬
should
debt to
the
ease
refund
into
further,
short to
short-
the
;
ings of longer term securities and
commercial
bank
As
a
There is
matter
a
see
.
earnings would
be relatively higher.
need for the issu¬
of additional long-term mar¬
no
of fact,
ance
holdings
ketable securities at this time, as
the government does not need
to the extent that private
investors continue to expand their
the
and
of
E,
F
proceeds
G
and
Bonds,
new
applied to
retiring maturing bank-held debt,
the result is
into
a
are
refunding of short
holdings, rj This
banks
the
general
extent
into
and
that
the hands
public.
the
Also
to
Treasury
plenty
used
largely to reduce short-term
1947—it
bank-held
likewise
can
debt.
be
A
With commercial banks
ties out of
.
of $182 billions, a large amount of
the debt should be in
short-term
issues. Monthly
refundings create
no
problem. ; The argument that
the Treasury is now faced with a
'.large volume of demand obliga¬
tions is not persuasive.
2,
present conditions, the
entire debt is in effect a demand
.
obligation since the Federal Re¬
serve assures the Treasury at all
times
of
a
offerings
the
ready market for its
on
a
basis
certificates and
longest
bonds.
of
7/s %
2l/z%
With
on
the
on
the
public
large as it is today—twice
the
entire
private debt & of the
; country—a free market is' out of
debt
the
as
question
mean an
; market.
if
that
is
taken
to
unmanaged, unsupported
The public interest re¬
quires
"
a
stable market for government securities, and this is
the
responsibility of the Federal
Re¬
| and will
continue to work in close
cooperation with the Treasury.
.
or
will be
an
>
The credit policy of the Fed¬
Reserve System, in all its
eral
aspects, should be adjusted to the
general credit situation of the
country. We are not justified, for
.
example,
in
fixing
margin
re¬
quirements exclusively by refer¬
the
to
ence
prices,
movement
of
stock
as some
people have sug¬
The general credit situa¬
gested .'
tion must be the main
this in turn is an
criterion,
and
integral
part of the general business situ¬
ation. When margin requirements
fixed
were
at
100%,
credit situation
tionary
because
of
the
hands
general
stocks
up
Indeed,
cash
very
without credit, if
say,
had
prospect
and
immense
power in
investors and the
of
of
the
of
purchasing
public.
plenty
the general
highly infla¬
was
volume
more
for
there is
today to drive
high,
entirely
investors, let us
the
over
profits
in
to
enter upon
a
borrowing, but
program
retirement by drawing
upon cash
accumulated balances. Since
then,
and
including the projected
re¬
tirement of $2 billions for Nov.
1,
the
Treasury redeemed
for
that
it will
tend
the
This
possibilities
balance
a
When
not
a
of
further
pressure.
one-way
the situation
level of stock market credit.
credit
it
will
street.
changes, and
use
purchasing securities,
be time
to
in
consider
margin J^tuirements.
low¬
This
field.
been
credit.
It
has been felt for some
time by the Reserve Board that
the present regulation could be
greatly improved administratively
de¬
a
Taxes
should
n6t
under present
It is desirable to in¬
conditions.
tax
crease
without
revenues,
in¬
creasing tax rates; by increasing
the national income
yesult $f
as a
gether
with
decreased
Federal
expenditures, will bring about ;a
budgetary surplus which will
make possible tax reductions later
on.
•
"Speaking of the general credit
situation, thefe is no reasori ud¬
der present conditions for deduc¬
cidedly unstabilizing influence in
credit restraints
consumer
dur¬
on
goods in short sup¬
ply. ;Credit, should be provided
for productive
purposes, but not
consumer
for speculation.
Nor is there jus¬
tification for increasing interest
which would greatly com¬
rates
plicate the Government's problem
of managing the
public debt end
increase the .cost of carrying it,
without the offsetting advantage
of preventing inflation.
"At best, Government price or
can only be a
stop¬
gap, and fiscal policy can deal
credit controls
It could be
accomplished, in my
opinion- by focusing regulation
primarily on the major durable
goods customarily sold on the in¬
stallment plan. They compose the
great dollar; bulk: of consumer
con-
50 years the
have
a
moderating these excesses, so far
as
possible, in the consumer credit
making for greater
market
There is
very strong; case to be madefor
of
upswings and downswings of the
stock
to deal with the
for undoubtedly. the
—
downturns in the past.
instability.
or
body
expansion arid contraction of this
type of credit Jhave greatly accen¬
tuated
economic
upswings and
Current
forced
liquidation
of
credit would also have gone much
Over the last 40
retirement. Continued efforts
should be made to reduce public
able
mental
further and the Sub¬
thus
^
"The situation calls for a budg¬
etary surplus and continued debt
ing margin requirements on stock
market- trading; or for relaxing
problem
stringent credit regulations the
speculative upward movement of
prices would undoubtedly hav£
further,
experience
regulation
gress to the desirability of plac¬
ing authority in some govern¬
as compared with something
like $3 billions at the prewar
peak
of stock prices in' 1937
and; more
a
from
.
report stated that serious consid¬
eration should be given
by Con¬
Such
,
had
wartime
drawn
taking on this additional
load, feel as the Board's annual
the
than $12 billions at the
peak
1929.
Without the-" existence
having
the
crave
general neighborhood
gone much
Congress to
be
greater productivity,; Such an
crease in the national
income, to-?
economy is one
determine.
The
decision; one way or the other.
I, for one, while I certainly do not
outstanding is in the
of $1
bilf
now
our
a
;
One of the fortunate aspects- cf
the; situation has; been' the low
only with the money side of the
inflation
problem.
The
over¬
whelmingly vital need now is for
work
more
increased
the
on
more
goods—for
Whether
.
stable economic
a
depends
progress
now
and
productivity.
to have,
we are
fundamentally
industrial
front, on
management,- on in¬
creasing output by increasing ef¬
ficiency, eliminating bottlenecks
and restrictive rules and
practices,
including those in the construc¬
tion
industry, and by avoiding
labor
and
by focusing it on the; major dur¬
ables,; eliminating the major part
single payment loans and
influence, particularly as it is
charge accounts from its scope,
connected with the use of
credit;
that Congress in' 1934 vested in together with the soft goods and
less important durables that were strikes and shutdowns.
We all
the Reserve Board responsibility
included when the regulation was know that in our interdependent
for fixing margin requirements on
listed securities but not on un¬ originally drawn as an anti-infla¬ economy a strike in one key in-?
dustry paralyzes others—strikes
tionary device in warto
listed securities. In the late
1920s,
even
by a comparatively few
The Board for some time has
when .there were no Federal mar¬
workers in plants
that supply
been studying the
gin
requirements,
the
advisability of others can
upward
throw many thousands
movement iri stock prices caused thus revising the existing regula¬
out of work.
them to increase by more thari tion with a view to making it ad¬
the national economy.;
It was in
order to reduce* this
unstabilizing
of
*
200 %
1929
as
the
and
sharp
decline
ir)
than twice as rapid
that which took place during
was more
recent months,
The recent;gyra¬
tions in the
Cotton market, which
advanced very rapidly last; sum?
mer and then
slumped by nearly
20% in
few days' are an; Indi¬
cation of what can be expected in
a
speculative markets which are not
subject to any effective control
over the use of credit.
of
One
quences
the
interestirig
conse¬
of the Board's margin re¬
has been an almost
quirements
cluding the reduction during the
vancing—which
pened before.-
.
had
was
never
There
were.-
ad¬
hap*
to be
inequities and irpper*
some
fections
as
in
margin
requirements
regulatory' instrument, in4
eluding the failure of the law to
a
cover
non-listed securities.;
Con¬
considered the question of
whether unlisted securities should
also be covered
by the law but
gress
concluded
that
it
was
not
prac¬
tical.
"More
ministratively
more workable,
It
is felt that this can be done with¬
out
material
a
effectiveness
as
weakening of its
a restraining in¬
fluence at this time.
tionary
When infla¬
have passed,
pressures
it
would need to be revised
further,
assumirig that Congress decides to
retain
it
ment
It
of
is
as
a
permanent
credit
instru¬
regulation.
important,
of course, to
that these selective
bear in mind
controls; relating to listed stocks
and consumer credit, can at best
play only a relatively minor role
in assuring stability in our eco¬
nomic life. : Likewise, monetary
policy is even
more limited in its
influence under present day con¬
ditions
than
ever
before.
Over¬
the
are
work
basic
purchasing power of all wages
savings.
Further wage in¬
and
for
creases
self-defeating. It will be far bet¬
ter
to
crease
real
hold
prices down and in¬
productivity—to Increase
wages—than to have further
wage
and
swing that culminated - last May,
nor
the
subsequent
have gone to the
they would have
downswing
lengths to which
gone if there.had
that
shadowing all of these aspects of
governmental policy are national,
fiscal and budgetary measures, to¬
gether'with other broad policies
relating to business, labor and
long-term commitments, there¬
precipitating a recession, the
severity of which would depend
mainly on how long it would lake
agriculture."
most
to correct the
laissez-faire
adjustments. '
Not
even
advocate/of
ardent
the
would
all
by
that we abandon
regulations. It is,
let me say again, a question of
degree—of doing through the me¬
ings
dium
ard of
propose
all Government
to
of
Government what
done
be
no
Since
margin
be viewed with
increases
finally result in public re-,
sistance. ; For. this^ In turn,, would
uoset * business
calculations,, and
I have
to
more
this
is
contribute
needs
a
sought to
to
banking group,
cover
three spe¬
cific questions in which you
a
particular interest.
sion,
I would like to
moment
to
the
situation
as
I
eco¬
have
In conclu¬
turn
for
a
general economic
see
it at this
time.
distortions and mal¬
Only
by
keeping
prices down and maintaining the
buying
power
can we
/"We have
of
of wages and
have
living.
ments
can
price
would
manpower,
Neither the long up¬
of
on
than that.
requirements
amount
prices.
Increased wages
that result in increased prices afe
sure
and progress—and
satisfaction.
same
and
output would serve
only to intensify the upwa rd pre?-*
doing
of
the
work
nomic stability
use
goods
more
cures
pay increases it has received.
It
is the only way to safeguard the
the market for unlisted securities.
whole, the
and
for inflation.
That is the only way in which la¬
bor can keep the gains from the
Moreover, it is evident that
control of listed securities
greatly
influences the use of credit and
On the
there is need to stimulate the
of credit for
in
legislation
re¬
of favor¬
be further reduced
of
if it failed to call the attention
of
Congress to the need for making
down the timing of not
absolutely
urgent capital expenditures and
to
task
aimed specifically at the inflation
target, would be remiss, I think,
slow
middle of last year in the amount
of" stock market credit in use, in¬
labor, it would only add
inflationary
is
to
the
should
expenditures.
The Reserve
seek
permanent
credit in
with
-
prospects; arid a lessening Of thf
inflationary psychology, to th§
extent
.
for
alarming 'symp¬
sure,
rials and
of
do mot
readjustment rei
sober appraisal of
more
a
some
contrary,; to the .'ex* Board,
this
should be. opened now in the mar¬
ket .in order to finance new
.pro¬
cashi ering
fleets
I
period when the market
to
not
covering this important segment
their -high
wage-price maladjustments.
-It
can
hardly, be contended, ■. with
reason,
that
trie
credit
gates
of debt
did
question of whether there should
war,
business
■
greatly reduced defi¬
that
an
the
uninterrupted reduction since the
in
The public interest requires the
closest teamwork. The Federal ductive
enterprise
and < private
Reserve is in complete agreement
employment. There was a very
'with the Treasury's debt
manage- large volume of undigested offer¬
) ment program, as well as the gen¬ ings in the stock
market, only a
eral fiscal policy, as outlined on
part of which was for new financ¬
several
occasions
by
But in any case this -is not
Secretary ing,
Snyder.
a time for
v;-;
encouraging new issues
Beginning in March, as you even for productive purposes be¬
know, it became possible not only cause
with the scarcity of mate¬
to meet the
below
spring.
On the
tent
of
the
confidence
,
cit without further
tom.
.
industry and less uncertainty
serve.
The Federal Reserve has
worked
of last
consider this
invest
Margin Requirements
■
Under
to
*
holding
total marketable debt
a
Bank securities,
'.
$75 billions of government securi¬
opportunity
increasing opportunity to invest
in mortgages and
qther long-term
investments,
including
World
surplus—and it may possibly
$4 to $6 billions in the first
of
of
yields. Also there is
cash
be
about 20%
end
sequent price decline with
existing long-term issues at
present
favorable
prices
and
a
the
point
in the
of
half
indi¬
banks and other institu¬
tions have surplus funds there is
the
has
I have
as
savings
accomplishes the desirable objec¬
tive of shifting the debt out of
the
and,
money
cated, expects to have a cash sur¬
plus.
If
insurance
companies,
long-term
Board
eco¬
Without
able ot unfavorable factors,
I.will
merely quote the conclusions that
think
them:
be
at
tef lion,
Commercial bank hold¬
nomic stabilization.
economy.
suiting increase in. yield has been
altogether satisfactory as has been
the, general stability of; security
prices.
ity to the Treasury in managing
program for
situation.-
I
administering this regulation. The
contribute
securities.
further.rate reduction. The
decline in the price of longer term
issues since spring; arid -the
see
this would result in an increased
interest cost and in less flexibil¬
the debt.
discouraged
at
this time, neither would I like to
Treasury. Compared
to refunding in short-term
issues,
on
recently. in-r
While I would not like to
ah increase in interest rates
lem and avoid the demand liabil¬
ity
have
.
refunding prob¬
1
Consumer Credit
ment's wartime
fouri
a
this
1
As for consumer credit
regula¬
tion, -it was, as you may
recall,
the seventh point in the Govern¬
shifting; by banks ; from inventory
accumulations, it will
medium and long-term
government
longer term
3.
reg¬
with
agree
-
rise which increased values
by 150%, has now experienced a
decline, bringing prices down to
or
bank
on
rapidly,
at: least " temporarily
It has also been argued that the
securities
The stock market, after
would
viewpoint)
year
re¬
security
loans
have declined and, as I have indi?
cated, the retirement program has
eligibles.
term
credit
sumer
creased
holdings, particularly the bank
Treasury
and
While commercial loans and con¬
only for
switching from
halted
By imposing a drain
the in¬
accumulated funds
of
been
reserves, the retirement program
has also exerted some brake
upon
further expansion of bank credit.
subscrip¬
formula
some
provide
vestment
limit
to
necessary
adversely affected by
ulation
■
,
versed.
gov¬
'would
counting that appraisal
security
is
ness
the level
has
year
vanish. If long-term nop-marketable issues were offered, it might
be
in
$102 billions hi February of this
by holders of out¬
market' bonds.
Confi¬
dence in the stability of the
time
1946
Speaking recently at the National
Outlook Conference of the De¬
partment of Agriculture, I under¬
took to. assess in a. general,
way
the good and bad
aspects of our
current
.
same
will not be to add to in¬
flationary forces which are al-f
ready strong but to combat ;<le*
flatioriary. forces in the general
economy.
* *": - - - - ;1 J
war years
i
business who feel that their busi¬
of
securities,
at
one
r
public strongly ap¬
proves of 'this regulation.
It is
not to be expected
that some of
those iri the
brokerage or
effect
■'
been
/
be
v
The general
which, in
cbntrast to the present time, the
and which raised the
money sup-jnlv from $39 billions in 1940 to
incurred
market
had
will
ments
monetary
enormous
which
encouragement
issues of corporate
Thursday, October 31,
Federal margin* require¬
no
ments;
prospect of declining production
declining employment. The
time to lower the margin require¬
pressures cn
throughout the
process
standing
bond
the
been
seems
and
in
'
it
a
v
,
.
help
monetary side,
expansion
invested in the
higher-yield mar¬
ket issues, and
heavy losses would
ernment
considerable
program
would be cashed in and the funds
be
'
,
the
as
provided there is at the
.As., a .result of- the .retirement
be
outstanding jav4
yielding lower rates
many
bonds
of
checking inflationary
the
■
rying
.
.
justify
new
Hose to $20 billions, of securities.
This debt retirement program has
my
■
■
.
a-time,
to
me, when there will be sufficient
supplies of materials and labor
Inflationary Forces and Federal
the
be
.
all
*
/
,
the
tangible ele¬
sustained prosperityraw
materials,
supply, coupled with
a
still
money
vast back¬
log of needs and wants.
tangibles,
sav¬
higher stand¬
a
The in¬
needed,
include
self-restraint, enlightened self-in¬
terest,
the
will
and
wisdom
translate the tangibles into
a
to
last¬
ing, higher standard of living."
>.
Volume
164
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4538v
only be, but appear, that their ap¬
proach to every problem is abso¬
■;;
lutely objective and oecumenical,
Keynes' View
■:;,Vr
+
U ...111
i~
xL_
operations it will break little newi to the two original schemes, the
The British conception of the without prejudice or favor.
"I am asking and hoping, you
ground other than developing the "proposals for an International International Monetary Fund and
above-mentioned principle of dis¬ Clearing Union" (Cmd. 6437) of of the dangers that would, attend will see a great deal.
associating the provision of capital I which tne late Lord Keynes was a more political view bf the char¬ vci'l hope that Mr. Kelchner has
tor
and
the acter and functions of that insti¬ not made any mistake and that
£ its
international:* ventures the principle author
~
j
there is no malicious fairy, no Cafrom the distribution of ultimate American proposals for "a United tution cannot be better
illustrated
responsibility for them. The Bank arid Associated Nations Stabiliza^ than bv a speech which the late rabosse, whom he has overlooked
will deal in large
figures; it will tion Fund" (reprinted by H. M. Lord Keynes made at the opening and forgotten to ask to the party.
For if so, the curses which that
be subject to tremendous
political Stationery Office, 1943) for which of the Savannah meeting, a char¬
bad fairy will pronounce will, I
wire pulling from potential bor
acteristic
Two Conceptions of the International Monetary Fund
/T'i-iv.+iv.nnA
«nrt«
001A\
I
(Continued from page 2210)
inal agreements greater precision
and definition.
passed has. been filled by
further preparatory work, among
institutions and staffs with which
no
x
1
institutions.,- :
v
t
.
which that of finding sites for the
them has proved
1
inaugural meeting of governors of
both
,
The time that has
since
to fill
2231
mean
undertaking,
\
In addition* there can be little
product of his wit and
4oubt that beneath the outward rowers and their backers. But its
wisdom which for - some unac¬
was primarily responreserve and reticence of the two*
sible. These two plans were mar¬ countable reason does not
policies^ are unlikely to arouse
appear
ried in the Bretton Woods agree- to have been
organizations (welcome virtues to Geological .conflict.
published in this
find in the Washington environ¬
The Fund, on the other hanri
ment of July 1944 (Cmd. 6546).
country. For a full understanding
The contrasts between the two of this
ment)
much
preparatory work
speech two explanatory
<
Tr^a?aFF Whitc» of the uTs:
5?uihy
,
!
has.
been
of
done
organization
The
Bank
fore it
a
financial
the
on
and', operations.
known
is
problems
to
have
be¬
long list of claimants for
assistance. It would be
surprising if some work had not
been done already in 'vetting'
these
; propositions. \ Moreover
solid
constructive
done
the
the
on
work
problem
has been
of
raising
that
resources
confMctaadyrfbeen tbe cause of such'
future Thf pro.mlses more in the
is that Thf
31a. reason for this
r
it the
+£
n
•
main
Funds concern rests
with matters that
are
original contributions should not
be stressed too far. Lord Keynes'
was
a
^veTnf Jealously autonomv.preguarded the
of national
purely
lelationships of
ope
currency
to
bone^h-^Qies.a?1(3' byof
^Plica¬
tion, the determination
mone-
would
technical
provide
that
of
quantum of in-
a
.The
pommerce.
was
be
An unofficial committee of United
States
bankers
and
officials
has
been
studying the problem of
marketing the bonds issued by
or
through the Bank
on' the
American capital market.
It is
proper-that this problem be con¬
sidered by an ail-American team
since it may be assumed that the
^utonomy appeared to be willing-
investors in
the United States.
It is, therefore, primarily for that
country to determine such ques¬
tions as whether the assistance
external^forces
WWd to
be explained
qan
bulk, and, at first, the whole,
of the issues made through the the
agency of the Bank will be made This
than
by the imner-
inlr?nd+aujomatic nature of
standard mechanism.
c1? rlsm Was no more
P
Wwg+nallng syste™> indicatrfcU hnt °H^Pr?nd' wherit0 C°P-
toe
i-
or
otherwise
spen^. abroad
State De¬
U. S.
the secretary gen¬
sued the
many
ope/at,on the world that
throughout the
part of
greater
g eater
vast
to
so
Mr.
the
a
mat
the
was
that
explain
in
found
control of domestie
ing.
much
as
as they earned
abroad) should be
penalized and that all adjustments
ibna in mternational
payments should, as
hoi*
q
balances of
is¬
invitations to the meet¬
This
is what Lord
Keynes
sure,
two
brats
ticians;
,
"Like several others here pres¬
ent, I have been intimately con¬
cerned with what will, I think,
always be known as the Bretton
Woods plans. The gestation has
been long; the lusty twins are
long overdue; they will have put
on, I hope, as a result
a weight
and strength which will do credit
their
to
mixed
and
collective
tar
as
possible, be remedied by parentage. At any rate it is a
bringing the smaller side of such privilege I would not have readily
accounts up to
the larger. Dr. foregone to be present at the hour
Harry White's scheme was far of birth, in some capacity, whether
run as follows:
shall grow up
everything
'You
poli¬
thought and
every
your
act shall have
arriere pensee;
an
own
sake
thing else.
its
•
"If this should
best
happen, then, the
befall—and
could
that
tor
children
the
eternal
*hat
out—would
is how it might turn
be
on
or
merits but because of some¬
own
an
shall
determine
you
not be for its
fall
to
slumber,
into
never
to
of
heard
again in
the courts' and markets of man¬
waken
kind.
; :
said:
a
wci
to
eral of the conference and had
cur¬
ef
is
The
the
.
quired for the Bank's operations.
second
Savannah.
of
essence
to
of
trees
partment
witKin each
tbe operation of
this volume of international
refiafdedyflPOliCy has ?lways been rency should be controlled with
slfve
S an unquestioned pre- persistent bias towards expansion,
faet that ?nr6S
awtenomy- The that countries accumulating and
for
derarloc
was'^n Whieht.the gold standard' (hppf,11?g they did not import
(because .jptornatiopal currency
country. The
The
the
Kelchner of
actual requirements; of world
pe
scheme
wte
character"
The reference
long beards of this grey fungus
Which droop profusely from many
Jernational currency governed by
erves
needed.
are
to the "Spanish moss" was to the
broadly conceived scheme
central institution
"of? a
a
tor
notes
feel
be
or
?
gentlemen,
and
ladies
"Well,
fairies
fairies, this looks like
being a very pleasant party and
a
happy christening and let the
omens be good."
't
To get the full flavor of this
speech it should be realized hat
it followed a long succession of
the customary vapid, oratorical,
or no
•
effusions
insincere
that
are
the
inaugural sessions
normal fare at
of international conferences, i^ord
Keynes' fanciful but pointed, re¬
his
amused
marks
audience
but
of it and Inere
his hearers—evi¬
also shocked part
were
of
some
by issues of the Bank's anism h
whether the borrowers ever Tn
should approach the capital mar-, •ubstitoW3
or governess,
along
midwives, nurses, doc¬ dently those with bad consciences
quite falsely*
tors and parsons ready to cbrisp®n -—who imagined,
that they had been cast for the
(and I shall always hold to the
role of Carabosse.
view that the christening has been
Cc;;
r oJ' 4
Lord Keynes' scheme, bqt con¬
The Morgenthau Protest
bady done and that the names of
ceived in the same general
To get a comparable picture of
spirit the twins should have been re-
^et direct, but aided by the
of expansionism. After much dis¬
provided by the Bank; should take
the form of direct loans financed
in
turn
bonds,
antee
or
of
the
Bank.
the
decision,
consequential
guar¬
Whatever be
is evident .that
adjustments
will
in the legisla¬
tion dealing with the eligibility of
the bonds issued by the, Bank or
guaranteed by it as investments
have
to
be
it
made
ZZG Frecise> expressed in legalfi dlctatl°n
or eveh guid- mimtil1?5, placmg on member
^ountries access to the resources
authoritvmTK°re supranational of the proposed Stabilization Fund
anre
Jc -'T a automatic mechPf d' Probably forP ace there is being
by ^"t^ a new system operated
Fnnri
nieruational Monetary
o
re^liSlS?/hich.-c°iJscl,,usIy
d°mestic monetary
though a matter of domSSf nce^n.' cannot fail to affect
the valuennfneS: that a change in
ter thit
° a currency is a matthat
not only the
estin
of both Bank and Fund
essentially organ¬
izational' or technical character,
enough has been done and suffi¬
cient time has passed to justify a
review of the
great financial
concerns
Z mm* the jnitia-
tive
P7.? other countries that
have dealings with it and whose
currencies, therefore,
~
with matters of
is
,
1C
rer
a
bers
will be mainly concerned with the
Fund because it is on the subject
•of this institution that the greatest
differences of views have arisen
and about whose future such dif¬
ferences continue to prevail. The
Fund Symbolizes a new philosophy
pf international currency relations
and for that reason the spirit jn
Which it is being launched and
the
principles that are being
applied to its operations are of
greater moment and significance
than the policy and activities Of
the Bank, though the latter may
a
J. adherence to a code of hon-
x0rderly monetary con-
Si" ''toagreement with this
assert ibat there is
unanimous
fundamental
objective
the
of
r<Jlnivtlar+lr0m theresame equal
the is thing
saying
that
«*s
ofach?eWngnithe ^ a"d means
on
^na^af °f t]ie F"nd 3re those that
from thepaAn
c?ntrast the British
the
nroKi
aPPr°aches to
wnnM
umu, These differences
Ultn InW
be foujnd t0 smk
with ttfn
'5a—e if C0mPared
those that separate the West-
that will crystallize the work of
international - reconstruction •... far
more
ciple that is almost
v
.
&tion
•
'%$
•
>>r
(..
-.
-
■
-
from
the
;
s
.though !
-
,
itn^
.
:'-v:
..
^the Presenit dead"foundation
adherence
;be expected to.
prove an active
spreadrthin hnis '• axperiment to
wl]t$at*?Jhllp&0Vhy: o£ |ree and
yestor without exacting from the
would-be borrower an altogether
iv.xiv.i.ca.
renci.es. At
best, Russia, given her
given ner
present economic system,'will albrrn...
■"*'
prohibitive rate of interest.
The ways be the odd
man, the eccen¬
Bank will thus inherit; and,"'it is tric
member in the Bretton Woods
to
be
hoped,
Nations
1 J
11.
.
greatly?? improve Iclub,
ppon, the tradition of the League
of
XI
Financial
The British artd American
Committee..
It will have impressive
resources
With which to operate, but in its
1
crystSuzed°in
agreements
ap-
ttm BrettorxWoods
can
be
traced
of the Inter¬
national Monetary Fund one can¬
do better than quote
letter which Mr. Henry Morgen¬
concep tionjs
Master Fund and Miss Bank?
from a
ting in an appearance
at the thau, * ex-Secretary to the U. S.
christening, carrying appropriate Treasury and" the Chairman of
the U. S. delegation at the Bretton
were successfully welded at Bret¬ gifts. What gifts and blessings are
ton
Woods.
But
the
welding likely to be most serviceable to "Woods conference, sent last March
tbbugb
technically
satisfactory' the twins, whom (rightly, or to Mr. Vinson, then Secretary of
still left some basic differences of
wrongly) we have decided to call the U. S. Treasury. Mr. Morgen¬
unreconciled.
"The first fairy should bring, l
thau had learned that it was pro¬
posed to appoint Mr. Lewis Dou¬
glas, head of the Mutual Lite In¬
surance
Company of New York,
Joseph's coat, a manyto be worn by
to the presidency of the Interna¬
as a perpetual re¬
a
minder that they belong to the tional Bank for Reconstruction
Mr. Morgen¬
whole world and that their sole al¬ 'and Development.
legiance is to the general good, thau protested against this sug¬
tween the United Kingdom, the without fear or favor to
gestion because of Mr. Douglas^
any par¬
.United States and France, an ticular interest. Pious words ex¬ connection
with 'big
business
'Wall
Street finance
and
agreement qf which the Nether¬ ceedingly difficult to fulfil. There and
was
suggest,
a
colored
raiment
these
children
Belgium became signa¬ is scarcely any enduringly success¬
1936. Under ful experience yet of an interna¬
this agreement the exchange af¬ tional
body which has fulfilled the
fairs of most of the countries that
hopes of its progenitors. Either
mattered
in.
international com¬ an institution has become diverted
merce were regulated by day-toto be the instrument of a limited
clay
technical collaboration be¬ group, or it has been a puppet ot
lands and
tories
in
November
minimum
of publicity, legalistic
political interfer¬
ence, the monetary affairs of the
or
sawdust through whjch the breath
of life does not blow. Every in¬
cident
and
adjunct of our new¬
born institutions must.be best ,caisettled, with remark¬ culated to emptasize and. main¬
able expedition and efficiency, by tain their truly international char¬
Lr?QUent telephonic conversations acter, and purpose.
'
"
x„
between London, NewYork, Paris
"The second fairy, being up to
world were
&dd6(ii
i
•'
ii*
t
r''
y
"Under the leadership
^
of Presi¬
Roosevelt,«I sought, for a pe¬
of twelve years, as Secre¬
dent
riod
tary of the Treasury, to move the
financial center of the world from
Street to the
Treasury and to
Wall
London
and
United
States
create a new concept between na¬
tions on international finance.
"Bretton Woods was the crys¬
,
tallization
of
that program.
We
sought to create the Bank ana the
Fund as the instrumentalities of
.
Amsterdam
British
viewed
The
Brussels.
and
the
Fund
rather
that light, as a club of central
bankers in which all decisions
in
could he made and taken with the
denlings nf -the Bank of England
With
ers;
,^ts eentral -banking custom¬
►
prevailed
the. .United
in
,
i^tat®s- There ijt was* Tfgarcjed ;ps
on
straightforward' long-term'invest^ member; terms")} she can hardly
beards
that the usual fairies will be put¬
\1.A -.very, different, yiew of ■« the
line -w
tor
"Hidden behind veils br
of "Soanish moss," I do not doubt
member by: the
.Fund:
b.
•
a
agreements0? -k^ F<;?ton Woods
greements,.. has declined up to
providesthe -ic.ash/ ?In
they will represent risks too great
to :be< borrie by the 'private in-
helpful
^und. 3uti,this really basic *ulgi1uJ ^nonymily. and discretion
that have alwayg characterized the
country * which
pient t propositions, characterized
only by the common attribute that
>
-
to inters
.essence, * howeyer, the "Bank will
to -a
lajrge/, extent
engage jip
.
V'
<;
.
' actually
^
.
new
the ultimate risk for a loan oper-:
-
-
conception
of^ho°vv
M
Rational financeT-r-that of divesting
>^
,.
particularly
(Tentative draft proposals of Can¬
adian Experts for an International
Exchange Union) the two schemes
restriction
mdifforenpes the view
what may be termed of phi-
business and handle propositions
|3ankwill,iir^
and
the American view
versed).
not
a
Approaches
the
intervention by Canadian experts
tween; their central banks. With
The American $nd British
far larger turnover of
clearly and specifically than
jany work done by the "Fund ^ The
its mem-
ariWS
dultf
deal with
rmv
ex¬
governor
.
cussion
^val of THr.Fartite view of the
Agreement
The general British
XCHT' T+he basic
Fnnrf-t to make its members
Ihternational Monetary International Monetary Fund
of
to ensure that'no that
revival, on a much
bioader basis, of the Tripartite
Jesuit J =Paroief ls made as the agreement of September 1936 beuit Of
unilateral decision, in
Fund
as
with
r,estrieti°ns than did
affected
are
of
periment that was launched with
their inauguration. This review
•
u
~
tei
Long-TermKeview Justified
concern
+vf
oolirv
available for banks and insurance
companies in the United States.
In spite of this almost exclusive
so without any
sovereign governments and not of j
(date, ?will bring perhaps a box: of private financial interests. Brexto
mixed vitamins, A, B, £,Uand all Woods breathed the spirit of mu
the rest of the alphabets The chil¬
assistance
tual
between
gover
faithfully .wear their ments to bring about financial sta¬
many-colored raiment, yet them¬ bility in the world and /recon¬
selves show pale, delicate ,fac.es. struction and development m the
Energy and a fearless sPirit <which interests of economic. security.does not shelvq and avoid oiiti-: Bretton Woods tried to get away
icultissues, but welcomes .them .from the concept of profit-making
and-ie determined to solve them, that dominated ihternationaUfi-jis what>we; JbtiM demand from our mknee and from the concent of
the control: of international fi¬
fairy perhapSv much nance and from the concept of the
oilier and not nearly so up-to-date 'control of international finance
dren
may
l^^Th^toird
.
an
int^r-^overnmental and not
as
like -the Pope -with his car-r
Idinals, close the lips of the chil;
may,
(qon.^Eyerj" since the days of the Idren with her hand and then open
.them again, invoking a spirit of
jNew Deal the financial center of
wisdom, patience and grave d
cretion, so that, as they
they will be the
respected^and
Washington and it is notable that ■safe recipients of confidences,
no
troubles and of perplexities a re¬
bankers^/not; eyen the semiliable
and -prudent
supportto
political bankers of the Federal
:gravity of the,-United States had
*
...
tt.
i
i
/
,
•
been shifting from New York to
!l
Rese"r"ve"
•_
took
_
X
_
1-1
_
X.1
X
+r.J
^ frue
at
that' the
those "who need them in all times
any
effecr.
jtive part tn launching: the Fund
back .land--the. Bank-at
private .financiers who were
not accountable tp the people.
r
/ Mr.
Morgenthau'S was • perhaps
an exaggerated expression of the
American, point of yiew:. b
unmistakably indicates
nature.' It must certainly have in¬
terested those who had been mem¬
bers of the British
deiegatjon
Bretton Woods to learn m Marcm
by
th£; Savannan
1946
ot^difficulty..If these institutions
to winV tuU confidence o
signed at the end of that conferance was intended, among other
are
the suspicious world,
it must-pox
-agrement.?-^
(Continued on page 2234}
.
:
2232
'
f;V •
THE COMMERCIAL & FINANCIAL CHRONICLE
■'
for
Two
Conceptions of the
International Monetary Fund
(Continued from page 2231)
things,
"to
the
move
financial
center of the world from London
to the United States
tors
clash
be
these
.ween
two
conceptions of the Bretton Woods
institutions
occurred
the
at
The
first
the
was
the
functions
the
-
and
choice
their
alternates.
have
the
in
the
two
The
States
Bretton
at
Fund
and
oil
But
if
in
the
the
institutions
capital.
in the
end
they
alone
sion
struck
same
function
the atmosphere
the
British
of the
sense
eral
term.
Bank
the
from
and
it
whatsoever
in
no
complete
,
oracHce.
This
act
meant
t'es
in
their
the
to
ence
was
be full-time
Fund,
primarily
countries
could
their
even
though they were
which
them
and
of
the
nominated
though
or
they
be *be tvpe of inter¬
ciwl
managing
employees of
reoresentatives
never
national
alternates
servant
director
which
and
his
difference
intended to become.
In the ^r't'sVv'ew the
require¬
American
what
be
and
of
the
out,
the
Fund,
full meeting
These
page 2213)
do not know whom
they
what to believe.
or
The
most
of
the
It
war?
time to
million
130
was
war-time
a
a peace¬
in
economy
the
short space of three years.
They made possible miracles of
organization and production which
enabled
America
and at the
tributions
to
take
the
of¬
same
time to furnish
a
of all
And, now,
the other
allies
after the
a year
war,
is financing morel than
70% of all the relief for the whole
sities
sensible, democratic and
ative
tion
directors
on
of
this issue
views
the part
on
Fund,
of Britain.
it stands today,
as
accord
being fol¬
with
the
The
not
may
earlier
British
conception of it; but it remains
instrument
of
international
an
col¬
view
quality
is
evident
the
of
appointed
-
co-oper¬
from
British
I.
the
executive
both
to
the
Fund and the Bank and from the
extent
which
to
the
staffing
of
both institutions has made calls
on
British
be
personnel that
can
ill
spared from this country today.
".
We have returned the designed to curb the
usurption of
control of the Federal Govern¬ power by any one branch of
gov¬
.
■
paid
ton.*
of
these
tremendous
contribu¬
fought the Revolu¬
tionary War believed in, struggled
for, suffered for, and sacrificed
for our unequalled American sys¬
tem of free government,
free econ¬
society, in short,
liberty of the individual.
Have we forgotten so soon that
those pioneers who came to these
the
nearer
and
omy,
free
for the
shores
British
at
original
ideas
of
braved
"In 34 months
up
unknown
an
possibility of
burden
of
scale
an an
around
$350,000 plus taxes (which for a
time must be paid by the
Fund)
the
of
public
hands
of
a
people's government this power
wholesome and proper. But
is
in
the
hands of political pup¬
pets of an economic autocracy
such
power
would
provide
they wanted, to preserve to pos¬
There was no doubt in
terity.
their
the
minds
powers ;
preservation
to
as
that
of
the
nature
threatened
such
a
of
the
govern¬
ment.
shackles for the liberties of the
The Preamble to the Constitu¬
tion states : in unequivocal lan¬
people."
guage the
Now the
autocracy
they
puppets of a political
have the control and
with those
are,
new
"We the People of the United
States, in Order to form a more
perfect Union, establish Justice,
instru¬
ments of public power,
the liberties of the
There is ho
the
mind
Texas!
of
shackling
people.
doubt about this in
Hatton
Chairman
Judiciary
nounced
Sumners
of
the
Committee,
that
he
insure
domestic
Tranquility,
provide for the common defense,
promote the general Welfare,
of
House
who
an¬
not
seek
would
reelection after 33 years in Con¬
gress, because he terms the pres¬
ent Federal Government:
clear objectives of its
authors:
;
r
and
secure
the
Blessings of
Liberty to ourselves and our
Posterity, do ordain and establish this Constitution;^ for the
United States of America."
It is significant that the authors
an
instrumentality of
favoritism, tyranny, oppression,
and corruption."
Of
Think^ of that,
of the most
political
history in the Constitutional Con¬
vention, warned that:
"The
Accumulation
of
all
.
.
a
Democratic
veteran in the public service feels
he is effectively prevented from
properly representing his people,
and must give up an elected office
our Constitution regarded as
the gravest threat to its continued
existence, lust for
James Madison,
highly informed
in order to help free them.
If a shadow of doubt still
power.
one
men
on
legislative, executive,
judiciary in. the
same'
powers,
and
re¬
mains in your
hands whether of one, a
from
many,
June 15, 1946:
"We
have
the
same
propa¬
few,
or
and whether hereditary,
self-appointed, or elective may
justly be pronounced the very
definition of tyranny."
ganda campaigns, the same lies
and distortions intended to in¬
Thomas Jefferson said:
timidate faithful American pub¬
lic servants, and the same ap¬
peals to cupidity, unthinking
the
.for..."
idealism, and fears."
Farewell Address:
"An elective despotism is not
government
we
fought
% George Washington said in his
'
And again from Tom
important
that
the
thinking in a free
country should inspire caution k
habits
torney
General
of
the
United
States, who on June 21st of this
year
con¬
stated in
a
of
in those entrusted with its administration to confine them¬
Chicago:'
"We know that there is
is
"It
Clark, At¬
na¬
Independence.
human heart is sufficient to sat¬
selves
querable faith that
forever
Abuses of Power
Let
again, look at that im¬
us
mortal
three
document
and
grievances
abuses of power
1. The
read
against
of
the
by the king:
Legislative.
posing with manly firmness his
invasions on the rights of the
people."
2. The
r-
Judiciary.
"He has
dent
tenure
of
amount
The
swarms
What
to
create, whatever the form of
government, a real despotism. A
just estimate of that love»of
power, and proneness to abuse
it, which predominates in the
In
193J
should be
curse
offices
themselves in power.
most
luxuries
ever
achieved by any people in any
period of time.
It has been this
p
multitude
tradition of freedom, and "nothing
else, that made possible our mar.velous progress and contributions
to the winning of the war.
To
safe-guard these liberties
sent
hither
of officers to harass
eat
out
their
our
sub¬
•
striking
the nation
was
told:
city,
systems, the
high
;
and
of the truth of this posi¬
only for the duration of the war
emergency, these economic plan¬
ners
took advantage of the war
to consolidate and to perpetuate
most magnificent productive capa¬
<• -
us
tion."
tyranny. In this faith, our Ameri¬
can
system of government, and
our American society, are rooted.
They are the most liberal ever
conceived by the mind of man.
This is our heritage.
Under this
system, in the course of 160 years,
America has achieved the greatest
degree of personal, religious, and
political ' liberty,
the
highest
standard
of
living, the highest
wages and working conditions, the
finest
educational
systems,
the
finest transportation
of
isfy
of
the
similiarity to
the abuses of power by the bu¬
reaucrats today!
;
^
;
Ja
the
the
alone
has erected
new
we
for
will
Executive.
"He
of
judges depen¬
from
their offices and
and ' payment
salaries."
3.
.
made
his
on
free
within
constitutional
,
stance."
this
In
power.
.
people and
of
have built
we
instruments
new
ernment. There were rio ambiguli
J
ties in the minds of the framers *
of the Constitution as to what *
their respective
spheres. The
spirit of encroachment tends ta
consolidate the powers of all
the departments in one and thus
do not give their full time to the
fixing
city of Washing¬
I
;
to escape from the; petty
tional
and
international
con¬
tyrannies and the brutal despot¬
spiracy to divide our people, to
isms which, with a monotonous
discredit our institutions, and to
regularity robbed men of their
bring about disrespect for our
liberties, their possessions, and f; government."
their very lives?
The American Revolution was
:
The choice confronting our fore¬ not a
negative revolt. It was the
fathers, and now confronting Us? affirmation of a belief in the
was
made for all liberty-loving
^dignity and rights of men. It was
posterity in the Declaration of the victorious fruit of an uncon¬
$11,500
tax .free for the alternates,
but with proportionate reductions
where the individuals in question
the
.
tinent
alternates.
fixed
to
.
.
on
to* executive
their
.
that
the
year
salary
such set-backs
minds, let me quote
Adolph Berle, one of the
original "brain-trusters" who said
was
on
for executive directors and
nual
of
life, which only we are
capable of furnishing to a war
stricken and suffering humanity.
These propagandists for economic
planning would have us forget
was.
The
sus¬
Fund, that is b
withholding the
for
reason
When so much is at stake
the wide objectives of the Fund
and Bank there can be no
ques¬
propaganda peddled to the Ameri¬
seemly and justified,
namely at $17,000 a year tax free
a
were
no
fullest British participation, if on¬
ly to remedy as much as possible
voting.
ment
pernicious of all the
"He has dissolved representa¬
tive Houses for repeatedly op¬
ultimately
than
opens up the
-
ment of the Bretton Woods
agree-
to
directors
defeats
mative period of the
as
(Continued from
fusion
Salaries
the
the
capable of achieving
If in British eyes mis¬
great good.
Bureaucracy: A National Menace
Fund.
the
staff
were
hammered
Another aspect
were
Mso
ican proposals at the
of the Board of Governors.
:
much
but
elected.
-
levels
view
that not merely the executive di¬
the
Fund.":
salaries
American
cognizance
the
These
The
should
was
of
policy if their
own coun¬
be
Americans, however, took
and
experi
gained in the formulation of
rectors,
executive
knowledge and
monetarv
tries.
was
terests ""require,
and,
between
them, to be continuously available
the principal
offices of the
board
moe+inffs tho eroqt, benefits of their
practical
This last argu¬
rector and his alternate to devote
all the time and attention to
the
business of the Fund that its in¬
the
countries
bring
na-
agreed at
Savannah, providing that "it shall
be the duty of an executive di¬
British
monetarv authori
own
would
of the Fund.
view
But
laboration
takes have been made in the for-,
of the damage that may have been
done. That Britain has taken this
ancestors who
of
.
who
had
England been
streng h of the British arguments
to abandon a. proposal that all
executive directors be debarred
from holding other office. A com¬
promise between the two points
who, presumably, would hold high
and responsible office with the
or
vote against the Amer¬
a
America's door, asking for neces¬
become
and, perhaps, his alter¬
also, serve as full-time offi¬
by-laws
after his return from Savan¬
nah.
tions ; were possible during and
since the war because our pioneer
The
executive directors would be parttime officers of the Fund, men
o«vr>trpl
point of
had
("incidentally,
sufficient
Keynes
lowed by sulking and non-cooper¬
international
of
relations
would
Lord
the
ation
banking experience, that
support was never carried to the
wide world. The nations of Europe
and Asia
are
lined up before
more a matter'of inter-gov¬
ernmental than of central bank¬
The
that
conduct
relations
of
and
tained after truly democratic pro¬
cedure of debate, compromise and
America
countered
compelled to
so far as it
lay with:n their power to do so.
board
a
as
it
death
shock
a
national
be
follow suit in
responsibility
for
the
conduct and general policy of the
normal
vital
by "rights,
Americans
countries
ultimate
in
to it and from
director of great
(as they have done in the
person of Dr. Harry White), other
directors, in this view, would have
would
difficulties, and that
come
the
ime
entirely to .the Fund, and .to. no
other authority."
The executive
but
bruited
-aliber
in the words of the Bretton Woods
final act "shall owe their duty
director*
be
and
decisive, for if the
Americans were to appoint a full-
paging director and bis staff who,
of/
to
that
ment
British view was that the Fund
should be administered by a man-
Fund,
of
banking complete conversion from
secrets
far
cers
central banking and political ap¬
proaches quite so obviouslv as did
1he clash between the New York¬
Washingtonians.
defeated.
nate
were
and the
point
Though
British
the
was
soon
as
had the support of many delega¬
tions from countries with inter¬
director
the stage.
probably of greater im¬
portance
than'; those concerned
with the site, though they did not
symbolize the issue between the
ers
view
issues,
is
ionalized?") and that, as far as
they were concerned they would
Insist on having their executive
in Tschaikowsky's
had un¬
The differences of views on the
functions of the executive, direc¬
tors
therefore,
crucial
two
combined.
ing
The Choice of Executives
,
these
not the Bank of
Slewmirx? ,Prinoe*s ballet,
on
inter-central
in
monetary
nolitical organism.
The curse of Carabosse may not
have fallen at that moment; bu*
the evil fairy, in her coach drawn
mistakably appeared
these
On
constantly increasing stream of
material, greater than the con¬
that
of
a
as
that
that
by
arguing that times had changed,
those who wished the Fund to be
by baboons
of
new
The
The site decision sig¬
nalized
victory
be
difficulties
should,
performed by it.
of the Fund.
the
com¬
should
direction
the
of
those
work
Savannah that the New York Fed¬
say
to
able
organization
would
thereby be cutting itself off from
a
great deal of information that
at
eral Reserve Bank would have
be
::
prospect,
the
was
proceedings
of
were
by
at the New York Fed¬
Reserve
clear
the
which
income
made
Fund
the advice of the fensive in two wars at once, in
Fund would not always be sought the Atlantic and in the
Pacific,
approach
to
the
species to be found in the United
are
Fund. If the
not by a staff
there
*
if
the
nearest
States
the
se¬
no
be
yet
can
will' normally
mand.
be¬
run
difficulties
is essentially
In that
city there are no central bankers
in
of
estimate
as
came
It
among twenty-four or more na¬
tional representatives?
The Brit¬
ish feared that if this were to be
and exclusively political.
The
rious
well-contrasted
'ntercourse
foundation of the British concep¬
tion of the Fund, for in Washing¬
ton
untimely
disquieting
more
liberty-loving
Americans, .who
spontaneously answered the call
normal fare* and most useful to arms.
They made possible the
the
whole
the
at
would
discussion
That deci¬
won.
the
discreet, confidential sharing and
Washington and
wanted
reasons,
help to raise the outgoings of the
Fund to a level which seems all
resulting sense of frustration and
disappointment may well have
played ; its part in hastening the
also
wholly independent, obj ective,
chance
The
Americans, for precisely, the
defeats
will
alone.
can
people by these apostles of
in session at totalitarianism is that it was-their
the offices in Washington, owing genius alone which made
possible
allegiance primarily to the coun¬ America's tremendous contribu¬
tries they represented, the Fund tion to the
winning of the war.
would inevitably become an esWho did make possible Amer¬
-entially political institution. What ica's contribution to the winning
United
political
and
This
executive
alternates
nates, continuously
cial contacts, and not in Washing¬
the
be
Fund.
international civil servants, but
by twelve or more executive di¬
rectors and twelve or more alter¬
States,
the British view was that they
should
be
established
in, New
York, with its international finan¬
ton,
the
issue
two
was to
of
differences
the
the
the
this
conceptions of the
before the Savannah
be
to
were
appeared
offices
that
seen
tween
erally conceded that the issue had
meeting.
be
crystalized
to
though the British delegation at
that conference had made a reser¬
vation on this point, it was gen¬
been settled
it
leave, or traveling
on
business of
the
on
will
been
Woods
what
the
at
Fund unless
located
had
contnuous
directors
the
their
that
meant
available
and
decision
institutions
United
taken
directors
in
to say, namely that the executive
directors
should
normally
be
remuneration
executive
meant
session"
of the site of both Bank and Fund;
the second, the determination of
of
function
direc¬
In the American view "continuous
Sa¬
vannah inaugural meeting of Gov¬
ernors.
It-- centered around two
issues.
executive
they should
be liable to attend meetings at
any time at very short notice and
not at specified, regular, intervals.
The Clash at Savannah
The
shall
session"
Treasury."
the
*
mac
Thursday, October 31, 1946
and
the
rights,
the
authors
of
the
Constitution set up an instrument
of
government which provided a
system-
of
checks
and
balances
We Surrendered Safeguards
Against Abuses
When
us
World
War
II
,
broke
on
in all its
those
fury we surrendered
safeguards
against
the
abuse of power. Now it turns out
that
while
we
surrendered
them
They are now raising a hue and
that the postwar world emergency is even graver
than the
war emergency. They are shouting
from
the
housetops that their
philosophy of regimentation, re¬
strictions, government by execu¬
tive order, and a controlled econ¬
omy has become indispensable ta
a peacetime America. What these :
bureaucrats do not say is that the
emergency in which we now find
cry
ourselves has been manufactured
[Volume 164
by them, and the legislation they
are now demanding is merely the
extension of government controls,
which they have been exercising
for the past 14 years.
It has dawned
the American
on
people that this bureaucracy can¬
not possibly restore our
tradi¬
tional free economy and constitu¬
tional
government without
de¬
stroying itself.
here
Is there
naive
so
they have
anyone
believe
to
as
that
such intention? V ;
any
These bureaucrats have had
consistent
more
Mrs:
Eleanor
Roosevelt.
Mrs.
Koosevelt recently said:
"It has been
?
a
long fight to
the
put our economic system in
hands of the government."
,
I
The President has told the Con¬
gress that the New Deal does not
intend
surrender
to
of
any
its
said:
Ipowers. He
"It is the
policy of this Ad-
i
ministration
]
wartime
V
point at which it is
not
to
exercise
beyond
-powers
the
necessary to
,' exercise them.... A program of
winding
I
wartime
up
agencies
and
distributing their functions
peacetime basis is now
!
toeing pursued under the powers
K "vested in the President by title
$ T of the First War Powers. Act.
)
en
a
"Therefore,
I urge that the
do not yet adopt a
resolution proclaiming the ter¬
Congress
mination of the
1
mination
of
war or
the
the ter-
emergency
or
the cessation of hostilities. Such
resolution would automatical¬
i
a
ly
the death of many war
and wartime agencies
cause
powers
before we
are
ready."
At this very moment, the man
in
the
White
House,
who is
nominal head of the
the
Democratic
Party, is the doctrinal prisoner of
the
political
strategists
of
the
The
President's 18-point pro¬
embodies
legislation de¬
signed to increase centralized gov¬
gram
ernment controls and extend them
ever-increasing degree into
daily lives. Would not the
an
our
of
passage
Dingell
the
Bill
Wagner-Murray-
affect
doctors
in
carrying on their profession?
Would not the Federal Aid to
Education
Plan
local
your
affect
and
you
communities?
The
bureaucrats who administer Fed¬
eral Aid to education will
in¬
variably
trol
of
maneuver
the
toward
curriculum
public schools,
versities.,
in
con¬
your
colleges and uni¬
You businessmen, you who are
manufacturers,
processing,
fab¬
ricating, and selling commodities
and
goods,
especially
lumber
dealers, and home builders,- are
vitally affected by the so-called
"Emergency Housing Act."
A
large part of such business
lias already been turned over to
Mr. Wyatt. The next step will be
a
demand by the newly-created
Federal Housing Bureau for the
power to "go take" your lumber,'
your building material and equip¬
ment,
build
and
houses
National Housing
Under
are
not
the
a
Deal program,
what they
New
farmers
under
Authority.:fy
told
produce, how much they can
produce, and what the price is to
can
be?
•
of the
legislative
proposals
that
the
President has presented to
the
79th Congress as "must" legisla¬
tion. The passage of this legisla¬
These"
tion
was
that
only
are
considered
the
a
purge
dared to oppose it.
imperative,
the PAC
so
and
President
demanded
few
a
of those who
The purge has
already started in Missouri,
by the President himself.
Those of
the
thick
this
of
On the 10th day of Sept., 1946,
order was issued by the De¬
partment of Agriculture limiting
the sugar beet acreage for 1947 to
the acreage grown in. 1946, and
the price of sugar beets has been
set at $13.50 a ton.
an
In
the
face
of
present/ sugar
shortages this order is ridiculous.
We have 250,000 acres of sugar
beet land in this country that will
have to
next ;
produce
year.
This
beet land that
duced
some
year
was
other crop
the sugar
restricted pro¬
potatoes, and thousands of
of them are rotting on
bushels
the ground,
while
across
the
coun¬
with1
up
tion of Independence:
that
people
and
substance."
to
not
of
its will by executive decree.
Con¬
continually asking our¬
are
bureaus
piled
bureaus; there
bureaus within bureaus; their
are
power
and
on
of reproduction is inherent
endless.
When
the
Bureaucracy is a government by
license. It begets paternalism.
1. The
one
relations. with
day,« they literally open for busi¬
ness
the next morning under a
new label, but with the same old
management.
Let us take the State Depart¬
ment.
Shortly after V-J Day the
Foreign Economic Administration,
the Office of War Information,
the Surplus Property Administra¬
business
dealings of An¬
drew J. May and his shocking
Congress
closes them out at the end of
the
Garsson
Brothers, is only the beginning
of revelation of the license, the
corruption, the favoritism, and
the paternalism of bureaucratic
government.
2. The pampering of the Interna¬
tional Latex Corp. is another
case
in point.
Mr. Abraham N.
Spanel, President of this corpo¬
ration, writing in a Collier's
Magazine article, is quoted as
Services, which Congress was told
had all been liquidated, turned
saying:
in the very middle of the State
Department. The personnel of the
State
Department now exceeds
up
The government
chine.
It
is
isn't
Now, it not only admin¬
isters our foreign policy but it has
assumed unlimited jurisdiction in
many fields of our domestic econ¬
y we
this field
of
present fiscal situation
a most
faced with
as
have knowledge, not subemitted to the.Senate.' This ten¬
dency warns that we of the
V Senate must assert our rights in
re¬
''
"If
serious one,
We are
continued substan¬
shall be guilty
we
or
acquiescence in their loss.;.
the
State
Department's
by
run
conception of executive author¬
ity prevails, if the Senate yields
fiscal year.
>
thereto, then the Senate aband¬
a
deficit in the present
Even those Federal
expenditures which are most
necessary have the effect of in¬
creasing inflationary pressures
in
the
national
total
right
to
;
*
effective
of doing this is
to reduce Federal expenditures."
means
Truman done?
The
repudiation of the execu¬
agreements entered into by
Acheson, Under Secretary of
State, by which we became party
\
Dean
He asked for
and^ will add over
our
$15,000,000,000
present national debt.
Do you
know what
expend¬
iture" of
$46,000,00,000
means?
For the entire country it is $130,000,000 each day for 1946, and a
dollar
a < day
for every man,
woman
an
and child in America.
To
Mr. Manufacturer, to you,
Waige-Earner, to you, Mr.
Farmer, with a wife and two
children, that means $4 a day of
your money. This is inflation and
nothing else but inflation, and the
you,
Mr,
governm ent is the guilty party.
.
The
President's
most
recent
statement, that the deficit for the
fiscal year would be only a billion
and a half, was made by him with
the full knowledge that it would
take all the funds recaptured from
the sale of surplus property, to
port Agreements is the most hu¬
miliating loss of prestige in our
diplomatic history.
The Under
Secretary
deliberately deceived
Senate Committees in executing
these
pressure
that
the;/Senate
to our interest and se¬
curity implicit in these treaties,
dangers
and forced their
bright spot in our foreign
relations is the highly satisfactory
manner
in
which
that the New
the
$46,000,000,000
Deal will spend in
Mac-
the
of
Japanese people and our
Yet, it is this
relations with them.
Dean Acheson who attempt¬
same
ed
Mac Arthur1
force-General
to
out of Japan.
This abuse of executive powers
makes
clear to
it
arbitrary
treaty-making
of
hands
of us that
all
exercise
the
of
in:
powers
executive
the
our
the
branch
leaves the American people at the
'of the 45,000 paid public¬
mercy
of a New Deal Bu¬
which has taken com¬
pletely out of our hands any
influence in our future dealings
ity
agents
reaucracy
other
versed
The
nations.
have
the
completely
basic
bu¬
re¬
premises upon
found¬
which this government was
ed.
this fiscal year.
General
Arthur has handled the problems
reaucrats
and
repudiation.
One
with
revenue
It was only
had been exerted
discovered the,
agreements.
when
the
up the difference between
income, from all sources of
Trans¬
Air
International
the
to
$36,000,000,000 for his first peace¬
time budget.
This is nearly four
times greater than the last peace¬
time
high of $9,000,000,000 for
1940. Since his budget was sub¬
mitted it has been increased by
the President to
$46,000,000,000,
to
solemn
most
tive
But, here again we find contra¬
diction instead of logic. What has
Mr.
the
of
character."
everything within
power to reduce inflation¬
pressures. One of the most
ary
consent or to refuse
to foreign commit-.
to
consent
ments
economy.
We must do
our
to the executive branch its
ons
make
a ma¬
human
beings, and you have got to
get to the right ones."
27,000.
a
Senate
the
to
tial budget
government of
law.
It imposes
a
Our Constitution
was
framed
recaptured funds do not by men who believed that this
belong to
this Administration. experiment in freedom could only
The Senate Small Business Com¬
omy including commerce, censor¬
They belong to the taxpayers of succeed if 'this nation kept its In¬
mittee
recently uncovered the
ship, information, and the sale and
this country and should go into ternal affairs paramount in its
distribution of surplus property, i consequences of such New Deal
dealings with all other nations.
the United States Treasury, apd
This same tenacity and lust for practices. New Deal favoritism in be used
only to redyce our Na¬ Today our whole internal econ¬
power
characterizes all of the placing war contracts, has had a tional debt. As far back as .1944, I omy and society, indeed, our very
terrific impact on small business.
bureaus. - It is; especially true of
offered an amendment to apply all
government itself, are all being
From Sept. 30, 1941, to June 30,
the
Department of Commerce,
the money recaptured from the dictated to by our external rela¬
which has now absorbed the per¬ 1943, approximately 553,000 small sale of
tions and commitments to foreign
surplus property on the
businesses were forced to close,
sonnel of such agencies
as the
countries. At home and abroad the
war debt. ■ It paissed the Senate,
In 1945, alone, 550 small business
Smaller War Plants Corporation,
same sinister design, the same vi¬
but was taken out in Conference.
houses
closed
their
doors
each
among others, and whose person¬
Fellow Americans, how much cious
technique, and practices,
nel now numbers nearly 40,000. day. These small business houses
longer do you think the produc¬ haye set in motion/ forces of
This Department has been the closed principally because of the tive forces of our
economy can
tyranny which too long have gone
foremost promoter of the sale of controls imposed upon them and
support these economic leeches, unchecked. Even while I speak, st
the Gestapo methods used in their
surplus
electronic
and
radar
these subvertocrats that control mighty chorus of angry protest is
enforcement. The Administration
equipment to Russia, sales that
us?
'
rising from a liberty-loving people
amount
to
nothing
more
than surely knows of the testimony ad¬
across this land.
>.
Foreign Affairs
duced by
our
Senate Business
gifts. Along with those sales went
This is not a demand, that we
Now let us examine the record
Committee hearings.
enough of our secrets to enable
abroad. Can we any better afford turn our backs on progress. This
Russia to set up assembly lines for
From one witness, and I quote:
to allow bureaucracy to shape our is not a demand, that we abandon
the production of electronic and
"Take the government off our
(tfye war-shattered peoples and na-'
foreign relatiqns?tj,
t,,
radar equipment comparable to
backs
and
we'll
take
our
The American people'are just
tions of the earth to a terrible
our bwri.
'
chances."
awakening in the bleak dawn of fate. This is not a demand, that
; Turning
our attention now to
From another witness, and I the postwar world to discover the we turn this government over
OPA. This bureau extends- most
from New Deal Democrats to New
same policies and practices being
quote:
directly into all fields of our
"We're just plain tired of be¬ followed abroad. Bureaucratic Deal Republicans.
This is not a
It reaches the farmer,
economy.
ing pushed around."
propagandists deceived and mis¬ demand, that we transfer the
the laborer, the businessman, the
led the American people.
Com¬ present powers '■ of. government,,
And, from another witness, and
manufacturer, the distributor, and
pletely bewildered they permitted from one ideology to another.
I quote:
These
Bureaucratic > Favoritism
.
.
the
consumer.
All of
us
are
now
caught in the thousands of arbi¬
trary and conflicting orders and
regulations issued by the Office of
Price Administration.
^
Why
the
was
OPA revived. Because
survive
on
the philosophy of maximum pro¬
duction.
It exists only
on
an
economy
:
Let
me
of scarcity.
illustrate:
meat.
Afterx June
30, without
OPA, meat of ail kinds and cuts,
could be bought
|n the legitimate
market places.
1
.-*>.,<■
Now,
the
against
Ms
Administration
trolled meat
controls
own
has
wishes,
decon¬
because the
policies
change if
W
Bureaucracy
Spending
can
only / through
Tyrannies of the New World have
spending.
Bureaucratic government and def¬
icit
spending
hand in hand. The
theory that the government could
continue deficit spending indef¬
initely, because they claim we
owe the money to ourselves, was
go
has not had
The
finance itself
deficit
cursed
Colonial Fathers.
must
hope to restore our
American economy to something
like sanity.
Would not the President's draft
our
Small
we
Deficit
14
a
Mr.
of
Wallace
This nation
balanced budget for
years, and
stands at
now
Because
of
bureaucrats.
the
over
the
national debt
$270 billions.
waste,
these
alien-minded
minority
to force through a New
Deal
Congress measures which
surrendered to the Executive, the
groups
the
toward
choice.
Tyrannies of the Old World
govern-
&
spoiling because there is no sugar
for canning.
•
<s?.
The
our
■
Businessmen of the country
Before June
30, under OPA, we had little or
no
V;
The Administration knows that
its
Deal cannot
New
"We're afraid of
./■: ment."
brain-child
"Our
Men
the
labor bill have destroyed the un¬
as
submitted
against 256 agreements, of which
propa¬
clamoring for
are
$ is
the
.
conditions
such
Haven't you had enough?
and
their
■
Aug. 1, to the heads of executive
departments, he stated:
Bureaucracy-^-A Government of
men
of
some
there have been but 38 treaties
fis¬
grave
In President Truman's letter of
and
are
going
fusion, contradiction, waste, red
selves: "What else do these bu¬
tape, and the deliberate violation,
reaucrats mean to do as they seek
perversion, distortion, and evasion
of the will of Congress are the
more and more power?"
natural by-products of the abuse
The answer to this question can
of their power.
From March 14,
only be made in the light of their
1936, to Nov. 5, 1945, there have
record at home and abroad dur¬
been 167,138 executive orders, di¬
ing the past 14 years.
At home this bureaucracy has rectives, grants, permissions, and
proven
it
cannot
exist except prohibitions issued by the bureau¬
crats
in Washington.
To print
through ever-expanding bureaus.
It feeds on sprawling; bureau¬ these executive orders required
more than 62,000 pages and 93,000,cratic
power
administered
by
thousands of little dictators, who C00 words. These orders might not
have been so disastrous if they
claim to be a law unto themselves
answerable to no one, political had been issued by men who
puppets who do not stand for knew their business. The end is
not yet.
To keep up with the
election.
ever-increasing regulations over
Growth of Bureaus Appalling
40,000 pages will have to be print¬
The growth of bureaus in Wash¬ ed
annually
in
the
Federal
;
ington is appalling.
There are Register.
ington
even
our
so
duction in Federal expenditures.
their
are you
longer
tolerate
these?
out
spendthrifts,
budget has become
gandists
harass
...
eat
,
How much
requirements for production and
public
opinion
left
no
other
try'thousands of tons of fruit
./"/
"Swarms of officers
our
Bureaucracy is
fight in Wash¬
bureaucratic
Again
us.
cal
led
who have been in
us
caught
now
hear those words of the Declara¬
tion, and the Office of Strategic
PAC.
to.
infringed principle of free 'labor
in this country today?
no
spokesman than
a
2233
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4538
by
these
Constitutional prerogatives
of the
Legislative Branch in the han¬
dling of our foreign relations.
Congress has surrendered its
treaty-making
powers.
Senator
Elbert Thomas, Chairman of the
Senate Military Affairs Commit¬
tee and a Member of the Senate
Committee
on
Foreign Relations,
just bitterly complained that
he nor the Senate have
been
consulted
on
the
treaty-
has
neither
making matters
in
now
in progress
1946, • the. Senior
Maine,
Wallace
White, stated in a Minority Re¬
port to the Senate Committee on
Foreign Relations that:
..
On
protest
rising
May
15,
from
"From 1940 to
1944, inclusive,
from
the
Congress return the powers sur¬
rendered to the Executive to the
government to which
belong. •' This-'is a demand,
for a' leadership - that - will lead
America out of the state of confu¬
branches of
they
sion and the state of
We
fear in which
find "ourselves,
that will lead us out
Paris..
Senator
This
grassroots is not a negative re¬
volt; It is an affirmative demand
to end the reten of' bureaucracy,
to drive the little dictators out of
the temple, to stop paternalism,
to balance the budget and stabil¬
ize the dollar. It is a demand that
a
ness
of the night, up
tain
side
to
the moun¬
the dawn of a new
day, the light of
pray
leadership
of the dark¬
which I hope and
will bring peace, confidence,
stability, and happiness to all.
^Thursday, October 31, 1946
2234
time and, under prosperous con*
ditions,
those
figures will
be
larger. But, even if they should
be twice as large, they*" would
tion, i. e., that we are not on the already noted that since the break
probably be within the volume of
threshold
of
a
long
upward in the stock market and the threat
national
savings.
Furthermore,
the
trend in long-term interest rates? of some business recession,
only a part of the total increase
It seems unlikely that the rate on fear
of deflation is probably
in debt obligations will be of a
Government issues will rise above stronger than the. fear of infla¬
quality suitable, for life insurance
2y2%, at least as far ahead as we tion. For the time being, there¬
companies, savings banks, and
can now see.
You are all familiar fore, Iboth the question of further
similar investors.
with the problems that might be long-term issues and the question
The contention that life insur¬
created by a rising trend in rates of changes in short-term rates are
and the reasons why$ our fiscal held in abeyance. If a business re¬ ance companies and savings bank?
and monetary authorities wish to cession should materialize and be haye had' ample outlets for their
funds in recent months, even with¬
avoid
such
an
upward
trend. accompanied by declining com¬
Among these are the increasing modity prices, it is possible that out additional Government issues,
cost of the huge public debt, the the Federal Reserve System would needs some examination. There is
Interest Rates and Federal Reserve
(Continued from first page)
and
speculators were
Investors
competing for outstanding issues,
and bond prices continued to rise.
Beginning about March, ' how¬
ever, there were certain develop¬
ments, including some changes in
policy and in Treasury thinking,
caused
which
a
reversal
in
the
trend of bond
yields and led to a
stiffening in short-term money
rates.
The Treasury,, let ? it. be
known that it was not interested
in
driving irlterest rates lower, but
impact on the banking system, and
the possible disturbance to finan¬
pattern of rates; meaning %% for
cial markets generally.
one-year certificates and 2*/2% for
You are equally familiar with
long-term bonds. The belief slow¬
the methods used to stabilize rates
ly developed that at the end of
prevent
them from rising
the present debt-retirement pro¬ and
gram
the Treasury might offer during the war. The efficacy of
our improved monetary and bank¬
more long-term securities.
There
developed a gradual but persistent ing mechanisms has been amply
demonstrated.
There
may
be
selling of Governments by tem¬
sharp differences of opinion as to
porary holders and also some sell¬
the ultimate consequences if low
ing by Government trust funds.
rates
are
maintained
through
The
debt-retirement
program
was
with
satisfied
wartime
the
Policy
adopt an easier credit policy as an
antideflationary
measure.
This
encourage the further ac¬
cumulation of securities by banks
might
to
reason
been
in
that
there
issues
the
has
accumulation of funds
some
the
term
believe
term rates tended to decline. The.
banks could sell .their; short-term:
form
cash
of
Governments
and
short-
awaiting
the
,
.
and result in another
period of de¬ opportunity for
clining bond yields.
Whatever may be the immedi¬
-
ate
investment.
It
more
permanent
isjtrue that the
recent decline in
the price of Vic¬
of events, however, my tory 2%'s may have afforded in¬
conviction is that any busi¬ vestors an opportunity to pur¬
course
own
in March, accom¬
panied by a somewhat-. firmer
open-market policy, has resulted
in a slightly tighter reserve posi¬
tion.
In April the Federal re¬
moved the preferential discount
rate of V% % on short-term Gov¬
ernment securities, whicjh made
the minimum borrowing rate 1%
for
member
banks.
During the
summer following that action the
rates on
loans
to brokers and
began
monetary controls, but I doubt if
there is much disagreement either
as
to the determination or the
now growing at the rate of about
fluctuating rather widely, dropped tal in the form of idle money.
below
102 in the early part
Capital demands of the country $4 billions per^ear, and savings
of
when business is good may run as deposits in mutual savings banks
September.
high as $28 or $30 billion per year, and commercial banks are grow¬
;
At about that
time, however, the
market
began
to
break
badly and another change
in thinking on money market mat¬
ters
took
place in Washington.
The fear of a possible deflationary
but this would be
no
strain
on
the
porate borrowingJiecessary. State
qnd local governments may also
gradually liquidate some of their
holdings, but in neither case are
ing at the rate of $6 to $7 billions thp amounts likely to be large
per year. The rate of increase in enough to supply investment de¬
savings deposits is declining, but mands very long. My opinion is
the growth in the assets of life that a few months hence noninsurance companies will continue bank investors "could and would
supply if the above assumptions
regarding
savings
are
correct.
Several years of prosperity, end¬
ing in a boom of major propor¬
might
cause
capital de¬ to increase. Furthermore, the an¬
movement rather than a continua¬ tions,
mands to outrun supply, hut this nual volume of maturities and
tion of the Inflationary trend be?is not an immediate prospect. In amortizations in these institutions
gan to color the thinking of the
case
of a business recession, of has become quite large. If we con¬
policy makers. The talk of unpeg¬
course savings would fajl short of
sider growth plus maturities and
ging the bill rate ceased rather
the above estimates, but the de¬ amortizations, the funds available
abruptly and Treasury officials
mand
for
capital funds would for investment by life insurance
began to emphasize once more the
disadvantage of a rise in inter¬ probably decline even faster. This companies and mutual savings
situation seems to me to warrant banks alone will probably aggre¬
est rates.
rather
New doubts began to be raised
as
to
the f possibility
of
the
the conclusion that
we
face
an ex¬
tended
gate $6 to $7 billions per year. In
addition, savings and loan asso¬
period
of low interest
rates, even without the influence ciations, trusf accounts, endowed
institutions, and in many cases in¬
term securities.
It was suggested of monetary management.
in some quarters that the outlets
Another
question
is whether dividuals, are competitors for the
for the funds of institutional in¬ long-term rates may be stabilized kind of assets held by these in¬
Treasury's* issuing
further
long-
.
vestors probably have been better
than was anticipated earlier. Fur¬
thermore, with the Victory 2% s
down to around
felt
that
102, it is probably
institutional
investors,
at
around, present
levels
or
whether, after all the flurry we
have had in recent months, they
will be permitted to drift lower
again. Will the price of Victory
21/£s remain around 102 or a little
lower, or will it rise again to 104
or 105, .or
higher? This, of course,
depends very^largely upon Washe
ingtpn policies; If the/Treasury
should, issue additional: long-term
absorb
as
life
insurance
companies
savings banks, can purchase
in the market enough
Jong-term
bonds to meet their portfolio re¬
quirements.
The questions we face now, are:
additional
however,'
by the debt-re¬
and other fac¬
tors.
program
Furthermore, if
a
business;
recession materializes, the author-ities
not be concerned about
may
this
of
influences
inflationary
character.
question, however; is;
whether, after these adjustmentsare
over, we may not again face|
the credit problems discussed in
the Board's report. If short-term
rates continue to be pegged by
the Federal, will the same infla-.
tionary influences and downward
pressures on medium and long-;
term rates begin to operate again?^
The
.
for
"vigorous attack on the' basic
inflationary pressures.
of
causes
This
turn. requires
in
that
the
Government stop and reverse, if
possible, the process whereby it
has created bank credit." U
If the Board's diagnosis of the
situation is correct, i.e., that the
frozen
pattern of rates produces
excessive credit expansion and ex¬
erts
downw ard pressure on
a
yields, the solution would seem to
be quite simple. Unfreezing the
pattern of rates, especially the
certificate rate, would introduce,
more
flexibility
into the
rate:
structure and keep alive a healthy
uncertainty regarding rates.
If
seems
obvious that the existing,
market forces are trying to bring
long-term and short-term rates
closer together because the basic
reason
for the wide spread be¬
tween them no longer exists. This
pattern of rates is now a highly,
artificial thing. The natural tend¬
ency is for short-term rates < to
rise in order to reduce the
but they are
of
Federal
spread,'
held down by the use
Reserve
Con-,
credit.
sequently, if the spread is reduced
it can be only by a decline in
longer term rates. Unfreezing the;
structure, followed by a narrow-?,
ing of the spread between long-;
term and shorf-term rates, would f,
remove
the incentive for dump¬
ing short-term securities into the
Federal and investing the pro¬
ceeds in longer term securities.
*
after
enough,
Surprisingly
a
simple and obvious remedy?
Because the Board has given as¬
problems surance to the Treasury that the
in¬ rate of : %% on one-year certifi- .
will be maintained. Why
terest rates, debt refunding, and cates
this
assurance
given? Be¬
commercial bankfjoldings of Gov¬ was
cause
if the rate were permitted
ernment1 sefcurit jes: are closely op¬
iated to FederakReserve policies, to rise, it would increase the cost
to the Government of carrying
especially policies r e g a r d i n g
short-term inter^|Tates. TheA ef¬ the public debt < and the "Board
fect of the frozen rate structure does not. favor a higher level of
In
of
a
the
was
It is not
policy, says the Board, cajils
Public
that
estimate with
.
convic-<
months,
suppressed
tirement
Government
measure
these
stability of" long-term
stitutions.; There is a tendency for
an
increasing proportion of the
country's savings to seek the se¬ which was maintained during the
curity
provided by high-grade war and which^cpntinues to be
maintained in the postwar period
obligations.
s
.
some
been
Effect of Frozen Short-Term Rates
.
^vhich I feel
recent
long-term securities at the rate of splendid diagnosis, the Board has
refused to adopt the one simples
$4 or $5 billion^ per year, even
under conditions that would pre¬ remedy that lies within its powers
vent them from " selling existing i.e., the unfreezing of short-term,
rates. Why the refusal to adopt
holdings to banks..",.
of a lengthy dis¬
possible, of course,' to
cussion in ihe anapal report of the
any degree, of ac¬
Board of Governors; of the Fed¬
curacy what the volume of higheral Reserve System for the year
grade bonds and mortgages may
1945 which was-released in June
be, but a glance at the prosperous
of this year. The Board points out
decade of the twenties may offer
of the
...What will be the trend of rates securities
and
if
the
Federal some help. . During., the *< ten-year quite < clearly Jhow v some
procedures: foil owed,, in financing
from here; will the Treasury;offer should; unfreeze short-term rates
period 1920-1929, the average an¬
the war and .in maintaining the
new medium- or long-term
long-term
a nual-increase-in tjie
issues; and y supply... bankreserves
will
our
institutional investors little less freely, we might achieve corporate debt was only $1,600 structure of interggt. rates have
have sufficient outlets, for their comparative stability in long-term millions.'For the same period the resulted in large increases in bank
funds, without new .Government rates and prevent a renewed de¬ average annual increase*in urban holdings of Government securities
and excessive credit expansion...
real estate
issues; and, will the Federal con¬ cline in yields.
mortgages - was only
The maintenance of the wide
tinue to peg short-term rates?
We have beep told repeatedly $2,200 millions, and in the state
It
js difficult, of course, to be dog¬ that neither the- Secretary of the apd local debt only $800 million?. differential between short-term
matic about these questions, be¬ Treasury nor the Board of Gov¬ If we add together the average and long-term rates was conducive
of
the
Federal
cause the answers depend, in part ernors
Reserve annual increase during that dec¬ to bank credit expansion, says the
at least, upon Treasury ahd Fed¬ System desires to see further de¬ ade in long-term corporate debt, Board. Federal Reserve support of
eral Reserve policies.
clines in interest rates.
That, state and local debt, urban real the' market prevented short-term
from
rising
and when
however, was during the period estate mortgages, and farm mort¬ yields
Outlook for bong-Term Rates
when the threat of inflation was gages,: we get a figure of only banks and other investors began
shift
from
short-term
into
There is one issue, however, uppermost in the minds of the $4,700 millions. To-be sure, our to
term
issues, the
about
Washington authorities. We have economy has grown since that
such
■and
In
these inflationary influences have
In June, when its report.was
recession which may come chase a substantial amount of
during 1947 will be neither very these securities in the market. The sued, the Board; of Governors was
obviously
concerned about the.
deep nor long-drawn out, and will market supply, however, has been
be followed by several years of increased by the sales of specula¬ possibility of such a developjnent.
•
-stock
created,,
they could expand loans and se-.
purities by more than six times"
the newly acquired reserves* -■
reserves
ness
vigorous business activity.
The tive and other temporary holders.
issues of credit control which While it is not possible to esti¬
were under consideration by the mate with any degree of accuracy
the volume of sales by speculative
ability of our fiscal and monetary Treasury and the Board until
authorities to continue such con- a few weeks ago have merely holders, this is reflected in part
in the decline in^ommercial bank
trpls, at least for some years to been postponed and will have to
be faced again at a- later date, loans to others for the purpose of.
corns.
purchasing or carrying Govern¬
However, there Is another and probably not too far away.
Even though the decision re¬ ment securitie&^That figure for
more fundamental reason why in¬
terest rates are likely to remain garding the issuance of further weekly reporting member banks
securities
has
been has declined OYer $1.5 billions
low for some time. T refer to the long-term
high rate of current savings in temporarily deferred, my own be¬ since the beginning of this year,
lief is that sooner or later ' the and over $500 millions since the
dealers, commercial paper rates, this country, supplemented at the
third of July. In; addition, nonand rates on bankers acceptances present time by the large volume Treasury will adopt some such re¬
financial
corporations had pur¬
accumulated
liquid savings. funding policy. I believe such is¬
all advanced.
The rate for call of
substantial
amounts
of
With the economy operating at a sues are desirable both for the chased
money
was
increased to iy2%
from the 1% rate which had pre¬ high level of activity, individual purpose of supplying an outlet to long-term Governments for tem¬
institutional investors and also for porary investment and no doubt
vailed for 10 years.
There was savings will probably run 10 to
some of these have been coming
also further talk to the effect that 12% of national income, or even the purpose of refunding some of
the short-dated debt and thereby into the market in recent months.
the Federal might unpeg the bill higher. Jn the second quarter of
to
the
investing The Government Bife Insurance
rate or even permit the certificate this year individual savings were redistributing
Fund has turned Joose over $400
rate to rise. In August and early running at an annual rate of more public some of the debt now held
millions pf marketable bonds since
September the indications were than $20 billion, or roughly 12% by banks.
I do not agree with the con¬ May in exchange for special issues.
even
stronger that a new 2%% of national income. Business re¬
These
sources tof
serves and
undistributed corpo¬ tention in some quarters that in¬
supply are
bond might be offered later.
The yields on medium and long- rate profits will probably aggre¬ vestment outlets will be adequate nonrecurrent and in some cases
are
being drained off fairly rap¬
term
nonbank
bonds,
which gate from $10 to $14 billion per without further long-term Gov¬
turned upward iri April, have now year, when business is operating ernment securities and that the idly. Nonfinancfial corporations
still liave
long-term
moved a substantial part of the at around the current or a higher market would probably not absorb doubtless
level of activity. These figures of additional long-term Governments Government
boffds which they
way back to the regular wartime
pattern
of
rates.
The
Victory savings do not take into consider¬ except at rising rates. The assets may sell gradually, but these sales
2V2% bonds, for example, after ation the potential supply of capi¬ of life insurance.'companies are will reduce the ^amount of cor¬
which
with/
and
Federal
the
to
additional
the subject
interest
rates
ment is now
■
than
Govern-?
the
paying."
.
*
\yillv sRov?
interest cosf
>.A< little- calculation
additional
the
that
that would result irom
.unfreezing;,
be come
the certificate rate, would
paratively small. It seems a pity
that this great ze$l for .econ.ojny
is not applied to other Govern^
savings
ment expenditures where
might'really be large and wher4<
they
would
help; ratherthari
hinder a sound monetary policy. ; The Board's position raises, a
fundamental question as tq
very
the Federal Re-?:
functions of
the
System. I have always been;
under
the ■ impression
that, its
serve
principal function was
tain
a
prevent
sion
main¬
to
sound credit structure and
excessive
credit
expan4
possible. In fact,
the general un¬
whenever
that seems, to be
derstanding. Nowhere does the law
impose upon the Federal Reserve
System
..1
the
duty to
regulate or
;>y '-,i •-'••y
..'"'.y'.-'K'':y
1.
l r-
i ■i
yj
•<- f-
<
.
"r : i
.YT' Y.i
;Yr
IS
Number 4538
Volume 164
determine the cost of the public create
i
•debt, especially if that is done, at
.the expense of a sound monetary
policy. About the only power that
•
.the Board had to correct a par-
ticular, situation
Jias been, sur¬
pursuit. of an ob4
jective which has not been placed
; within
its province by law. The
"
rendered
:
in
.
Board
made
limit
•time
of
mention
no
any
its promise to the
on
the
.Treasury could release the Board
from its promise, but for the time
being the Board seems to be with¬
out power to deal with the situ¬
Treasury.
The
of
Secretary
Credit Control
did suggest for the
of
Congress
new
Board
consideration
of credit control. In giv¬
measures
ing up the powers it had,
jBoard clearly attempted to
the
put
Congress the responsibility
dealing
with
a
situation
i created by its own policies. Con¬
gress should ask how well the
.Board has lived up to its own rd»sponsibilities and how wisely it
has used the powers it already
upon
Board
the
not
has
first
asked
for
additional
-powers to control a particular
•uation
before
exhausting
sit*
the
already had. You will
.recall thai back In the beginning
powers
of
it
1941
the
sent
Board
Congress
to
.the volume of
de¬
reserves
clined
rapidly. The Board not only
failed to use the powers it had
also
but
forces
-were
failed
to
increasing excess reserves
already spent. Consequent¬
ly, it asked for
-did
the
that
see
not
need
now
commercial
•against
its
net
wants
bank
three
demand
deposits,
tight credit policy and limit the
deposits funds available to banks, it would
reach
will
ments
large
propor¬
there has been very
little inflow of gold since the end
of the war and currency in circu¬
lation is still higher than it was
a
year ago.
Furthermore, the Fed¬
still has $23
eral Reserve System
billions of Government securities
which it
sell
can
as
an
offset to
tendency for reserves to rise
the result of gold imports or a
any
as
decline in currency in circulation.
Most of these securities were ac¬
peace,
add
deposits
against which further
"first place, there are three separate cash and security reserves would
.but overlapping
proposals, each have to be provided. The cumula¬
designed to accomplish the same tive effect of this enforced pur¬
.general objective. In the second chase of Government securities
would be that for every, dollar
place, all three proposals are pre
.sented in the barest outline, with increase in loans, deposits might
aspects of these proposals. In the
details
or
expand two -'of three times that
h t,- "depending upon the
achieve amount of ""reserves required. One
Does this mean result of this would be to force
illustrations
the need sought.
that the Board is
.own
mind
as
as
to
or f how
unclear
in
its
to. how effective any
a m o u
more
and
more
Government se¬
periods
curities into the banks in
of loan expansion when the banks
be,
'but is offering the three proposals ought to be liquidating their Gov¬
securities in order to
in the hope that by trial it might ernment
find one, or a combination of the supply loan demands and in order
to prevent excessive" deposit ex¬
fthree, that will prove effective?
If the Board had a strong convic¬ pansion.
- ■
'
one
of
these
measures
tion as to the
would
the
three
.it
not
concentrate
banking,
Reserve
like
the
of
which
has
been contemplated in
Socialist Britain."
even
never
In
the
and
advancement in the
standard
of
tion
ever
has
living that any na¬
known.
Make
no
mistake about it, this is a period
of decision for the United States.
It is certain that if, as seems in¬
evitable,
we make available to
other nations the techniques, ma¬
chinery and resources
our
which
on
economic greatness rests, they
will make full
of them; and if
use
quired
Federal
be
a
were
one-way
time
never
intended, to
affair. During war¬
expansion
per¬
suasive arguments were offered in
favor of using open-market op¬
erations rather than lowering re¬
serve requirements to supply the
necessary reserves for expansion.
It
was
a
asserted
some
that
very
the
former
much more flexible instru¬
monetary structure
perience
We live in a
ous
tight, is one way of
moving gradually toward a 100%
reserve requirement.
In any appraisal of the Board's
proposals, one is constantly con¬
fronted with the question whether
the objective of restraining credit
expansion is compatible with the
premise that the interest rate
structure must remain frozen, and
in particular that short-term rates
must be kept from rising. To my
mind
these two objectives are
contradictory. It is, of course, pos¬
sible for the Federal, if equipped
with broad powers over bank op¬
erations, to restrain bank credit
the
at
the
same
time
that
we ex¬
booms
and
and,
in
a
turbulent, danger¬
sense, unfriendly
world and it is idle to believe that
we
become
and
so
of
peace.
ment securities when reserves tend
to
series
a
busts, we shall stand the risk of
losing something more than the
prescribe
kinds and amounts of securi¬
It is apparent that both the
efficacy of any one
ties the banks are to hold. If banks
proposals,, why did Bond Limitation Plan and the were forced to hold a large vol¬
on
that plan Security Reserve Plan would af¬
ume of short-term
securities, the
and reinforce its suggestion with fect different banks quite differ¬
Government
could
keep
these
more explicit details? As it
stands, ently. The Board • suggests that rates down and, in fact, could
Congress certainly has been pre¬ some administrative flexibility
pay as low a rate as it pleased.
sented with a very complex issue should be authorized in connec¬
However, it must be realized that
,£ind a confusing set of proposals. tion with either of these meas¬
such measures would completely
•••;, There
are serious reservations ures in order to meet differences
isolate bank holdings of Govern¬
to all three plans. The first one, among banks. It is not' stated just
ments from the rest of the mar¬
.limiting the size of a bank's long- how much flexibility would be
term portfolio to a percentage of necessary and how it would be ket. The stabilizing influence of |
its net demand deposits,
would applied, what the difficulties of the banking system upon the mar-1
Vof
Federal
trol of American commercial
a
progress and
loans to the
,
no
the
submitting for the consideration
of Congress proposals for the con-
final and dismal chapter to
the most glorious period of social
with the extension of
banks' customers. If, ment, adaptable to constant mar¬
ket changes, but that the latter
on
the other hand, the Federal
operated crudely in that it sup¬
centage of Treasury bilXi and cer
should grant the credits necessary
plied the reserves in bulk and
tificates
as
secondary
reserves to meet the new loatt demands, it
could not be adjusted to the fre¬
against net demand deposit (the would mean that this particular
•Security Reserve Plan); (3) the proposal would be highly infla¬ quent and quick changes in mar¬
ket conditions. These arguments
power
to raise reserve require
tionary in operation because it
are equally persuasive in reverse.
•ments
against net demand de¬ would dause bank deposits to in¬
The urge of the Federal to raise
posits above the regular limits crease at an accelerated rate.
reserve
requirements
whenever
now
provided (Primary Reserve When making loans, the purchase
reserves are abundant, but on the
of
the necessary additional re¬
:Plan).
other hand to purchase Govern¬
There are a number of puzzling serve securities would create new
(2) interfere
the power to require commercial
banks to hold a specified per¬
'how* they, would work
;they could be. made to
of
ernors
System that the highest banking
authority in the United States is
of monetary control. Any
measures
tions. In fact,
was
*
(the Bond Limitation Plan);
a
pansion which are inherent in the
American enterprise system.
The
plan which I submit for your con¬
sideration involves
four
simple
steps.
Step 1. Terminate the War
Emergency 3,'
When
we
entered World War II
the Congress conveyed to the ex¬
ecutive in the First and Second
War Powers Acts broad
over
personal
our
and
authority
business
•
hold
could
as
during the war in the we continue to shackle our own
lives, which, however necessary it
mands for
further loans. They process of creating reserves in
production by persistent labor may have been in wartime, is in
might meet the new loan demands order to prevent tight credit. They
strife, to dry. up the sources of peacetime inconsistent with our
by disposing of nonreserve secur¬ could be sold in order to absorb capital for industry by confisca^ democratic
institutions.
These
ities if they had any and if the excess reserves, if necessary, and
tory taxation and by needless powers were required during the
market Or the Federal would ab¬ present credit from becoming too
regulation, to bog enterprise down war emergency to enable the
U V §r
sorb them. Otherwise banks would easy. •
"
with red tape add unworkable President^ to • reorganize the ex-*
Open-market operations of the controls- and to
have to borrow funds from the
mismanage our ecutive agencies to meet the ne¬
reserve
Board
comes
We Want It
not only to cover cash
requirements for the new
but also to purchase
from the Treasury or from nonnew measures of credit control
:(1) th'e power to fix the maximum bank holders the required amount
amount
of long-term securities, of new reserve securities.
both public and private, that any
If the Federal should follow a
.not granted.
The
"It
surprise to learn from the thirtysecond annual report of the Gov¬
Prosperity—We Can Have It Ii
which it
which were Federal,
powers
and
24, 1946, re¬
proposals, which
.
for
excess
of Aug.
these
follows:
as
portion Of loans and-a small pro¬ purpose could be accomplished
portion of Governments would be by forcing securities out of com¬
mercial banks into Federal Re¬
especially hard hit. Banks most
active in lending operations and serve banks except, of course, to
in serving their local communities reduce commercial bank earnings.
One reason given for the re¬
would have the greatest difficulty
in meeting the new requirements. quest for higher reserve require¬
It is true that in connection ments is that this power could be
(Continued from page 2206)
with
this
proposal the Board used to offset : an increase in re¬ social maladies which, if un¬ world and the most efficient in¬
would permit banks to hold ad¬ serves that might arise from the
checked, could in time reduce dustrial organization ever known.
ditional cash or excess reserves inflow of gold and the return flow
this nation to a second-rate eco¬ This plan involves nothing more
in lieu of Government securities; of currency; There is no evidence
nomic power, weaken its political than
the
revitalization
of
the
as yet, of course, that these move¬
However, a bank would get some
influence for world
basic incentives to economic ex¬
a
strong return from its security reserves
additional but no income from cash reserves.
powers to raise reserve require¬ Therefore,
the probabilities are
ments in order,to take care of that the banks would carry se¬
the rising volume of excess re¬ curities rather than
additional
serves. It has been estimated that cash or balances with the Federal.
when that request was made the The
problem would be how to
Board still had powers sufficient secure funds for the purchase of
.to reduce excess reserves by $2 the new1 securities. Let us assume
.or
$3 billions. Furthermore, the that banks, operating under the
-peak of excess reserves had al4 new security reserve requirement,
iready been reached, the inflow have expanded up to the limit
-of. gold had .about stopped, and of their existing reserves but; are
r
during the next two or three years still faced with legitimate de¬
•plea
runs
2235
view of the complexity of
proposed measures and the
effort to administer such meas¬ new problems which their adop¬
securities from commercial banks ures would probably raise many tion would create, one is entitled
day problems of adjusting reserve
to reserve banks.. The commercial new and difficult problems and to ask why the Board does not
positions and shifting assets in
would have
to
liquidate create substantial inequities. They use the simple remedies at hand
order to meet these new and inf banks
would extend governmental con¬ before involving the banking sys¬
tricate
provisions. Furthermore, some of their assets and, in order
prevent interest rates from trols over the details of bank man¬ tem in a mass of new controls of
the new reserve requirements, if to
agement and bank policies to an doubtful merit. I submit that the
uniform, would. create far more rising, the Federal would have
extent never before dreamed of great need of the moment is not
difficulties for some banks, than to purchase sufficient securities
in this country. You may have more
powers
but more under¬
for others and create many in¬ to provide the additional reserves.
It is very difficult to see what read the comment in the "London standing.
equities. Banks with a large pro¬
requirements,
and would increase in reserve requirements
involve them in complex day-to¬ would be a shift of Government
the
time
banks
serve
had..
is
all
.
garding
0
.
for
This
to
:
Economist"
fair and equitable ket would be removed, and the re¬
which the banking sult would most probably be a
business
can
rely are obvious. much greater degree of uncer¬
Full flexibility might mean the tainty about market rates of in¬
terest outside the banking system.
power to fix requirements for each
institution, with all that that could In fact, one can easily imagine
involve in the. way of favoritism a condition under which, if such
proposals were adopted, market
or discrimination,
problems of ad¬ achieving a
application of policy upon
to
fc
,
"
:
-
particular groups of .banks
would force many institutions to
liquidate some of their long-term
holdings and would raise very im¬
portant questions as to the equity
fluctuations would become more
of enforced losses,~ i.e., losses of
The third proposal was that the
violent and control much more
earnings as well as. losses on se¬ Board should be given power to
difficult.
n c r e a s e member-bank reserve
curities acquired at, premiums.
After examining the three pro¬
The Security Reserve Plan ap¬ requirements against demand de¬
posals of the Board, one is left
pears to be the most complicated posits. However, the Board itself
with
grave
doubts as to their
of
the
three." It would
compel admits that under present condi¬
merits or their effectiveness as
banks to operate under two re¬ tions the principal effects of an
Board's New Proposals for!
The
.
The
limitations
uniform
or
ation.
i
difficult
ministration.
FINANCIAL CHRONICLE
THE COMMERCIAL &
canprotect
way
democratic
our
of life from both internal and
external
secrate
dangers unless we con¬
effort to the
tasfe11 of building the economic
strength and health of this nation,
its industry and its people.
The
our
every
road to strength lies not in easy
panaceas such as more pay for
less work, "spread the work" re¬
strictions on
the
use
of more
efficient
machinery,
strikes
the adoption of policies
or
-
paralyzing
which prevent industry from ex¬
panding. -Rather it lies in hard
work, in high productivity and in
policies which encourage saving
and
investment in
proved productive
new
and
capacity.
im¬
We
cessities
of
war,
provide
to
the
essential basis for the making and
revision of contracts and to con¬
trol
trading
with
the
enemy.
Emergency powers with respect
to transportation also had to be
made ready for use in case they
necessary;
the
military
needed to have power, to take im¬
mediate possession
of, the real
were
property of citizens and corpora¬
tions
if
such
action
were
neces¬
to: defend the nation; and,
finally, it was essential to grant
sary
priority, rationing and allocation
to the Government in or¬
der to chahnelbvery possible re¬
source
to the sole job of pro¬
powers
ducing war equipment.
No one
probably would question the ap¬
propriateness of the two War
Powers
Acts
for
the
war
emer¬
But the war has been over
than a year and, while I
would not want to quarrel with
gency.
for
more
anyone
tion is
who insisted that this na¬
another type of emer¬
in
it is clear that it is not a
dare not be weak and there is no
war emergency;
and I submit to
other road by which this nation
you that it is time for the Presi¬
can be made strong except through
the
full
use
of
our
material, dent to give up those war powers.
This action is essential because the
human and technical resources.,. s' «■
special powers granted to the ex¬
A Program for Prosperity
3 ecutive were for the purpose of
gency,
•
.
controlling and restricting peace¬
policies which are time production of goods for civil¬
ian consumption,
whereas what
necessary if we are to have pros¬
perity. Fortunately such a pro¬ we need today is to free industry
to produce, without limit or con¬
gram is not impossible of realiza¬
tion. It can be, and I think it may trol, the peacetime goods which
our
people need. If our people
soon turn out to be, politically ac¬
want some of the controls which
ceptable to our people. It involves
nothing spectacularly new. It re¬ we used in war-time to be con¬
tinued into the peace then Con¬
quires no radical reforms. It needs
for its success no vast and com¬ gress ought to authorize each one
of them affirmatively after thor¬
plex and expensive Government
secretariat, bureau, board or de¬ ough consideration by the appro¬
Let
me
set out briefly the basic
changes in
our
partment. Rather, this program
represents only a return to de¬
vices which have worked in the
priate Congressional Committees.
It is out of character with our
democratic traditions for the government
to
blanket
into
our'
spectacular success—a
which peacetime life all the broad grants
of power which were hurriedly
this country the
(Continued on page 2236) *.
highe^atandard of living in the
past
with
return
to
produced
the environment
in
2236
praisal
Prosperity—We Can Have It If We Want It
(Continued from page 2235)
to the executive when
war
emergency
was
real.
"
conveyed
*
the
Moreover,
this
•
/
well
as
is
at
of eliminating pow-
the duration of
long past,/it might
declare an
end to the
ers
granted
emergencies
-
Congress
while
uusmess
for
banking emergency of 1933 which,
ridiculously enough, has never
officially terminated,
been
Step 2. Stop Labor Union Abuse
of the Right to Strike.
If
we
we are
embattled
labor,
on
to have full
prosperity,
need to demobilize some of the
of
elements
which
organized
carrying
warfare against
have
intermittent
been
industrial management
by periodicaLy blockading key bottleneck
points in our economic organiza¬
tion. Such actions is necessary be¬
;
of>'• theCpost-reconversion
business outlook.,,
No
than
these
materially above what it was a <;
lew years ago. And finally, for¬
are
in the midst of a dynamic eign competition can assuredly be
raise the
revolution in industrial technol¬ expected to reassert itself in time.
bulk of such new capital must
ogy. As a result of the war. many On the whole, it appears that the
come
from the security markets
technical advances were precipi¬ post-reconversion period will be
and when they are unable readily of frustration will in time pass. I
tated that might otherwise have marked
by rugged competition,
to absorb a volume of new issues am convinced that the great ma¬
taken years to emerge from our relatively low profit margins and
jority of the American people be-^
only a fraction of that necessary
scientific laboratories.
And far a high rate of business mortality,
for
full
prosperity, something lieve in and want to perpetuate from
being just isolated develop¬ in which event business risk may
the
private
enterprise
system;
clearly is wrong. We need, it
ments in the broad scope of pro¬ be a much more significant factor
that they are guided by a sense of
seems to me, to revise the SEC re¬
ductive enterprises, these discoy-* than it was during the period of
strictions on new security issues fair play which will enable us in
eries should find wide application easy war-time profits.
and on the securities markets so time to arrive at a basis for solv¬
in American industry during the
that new capital can be supplied ing; our labor problems without
3. A High Degree of Instability. r
years ahead. New methods, ma¬
where
it is
needed.
The
SEC long strikes which are costly alike
While a period of high level
to labor and business; that they terials and machines capable of
seems to sense that this is the case
creating entirely new industries activity appears in prospect it i3
for it has asked for suggestions as recognize that industry must have
and of revolutionizing costs and probable that a considerable de¬
prices sufficient to permit profit¬
to what changes should be made.
standards of quality in others are gree of instability will be characable operation; that they are con¬
That is a wise step for it is ur¬
teristic of our post-reconversion
scious and proud of the fact that awaiting development and this in
vide
jobs
gently
workers and
standard of living. The
for
our
necessary
disruptive elements; in
labor-management relations?
My
feeling is that we are justified in
assuming that the present phase
tion of the
that the needed
changes be made promptly so that
industry can obtain th,e new funds
required to translate into reality
the vast potentials for prosperity
which now exist. Finally it is im¬
American business and labor pro¬
duced
us
the
goods
which
enabled
to win two World Wars and to
lift the American standard of liv¬
new
less
important
markets is
the fact
that
we
period economy/Some of the markets to
activity which reference. has been made
For
in prospect could are more or less temporary.
well be a prolonged rather than a example, the backlog of deferred
consumption demands resulting
temporary one.
Another factor which suggests from the war and those segments
turn should mean that the
of ' high-level
which appears
business
ing to a point where it is the envy
limitation on
of the whole world, and that the
in or¬ perative that Federal Reserve
instinct toward productiveness is that the stage is being set for a
ganized labor, we face the threat margin regulations' be relaxed. It
so great in this country that our
period of high-level activity in
of industrial paralysis. We have is anomalouy that at a time when
the post-reconversion period
is
reached a point where the tur¬ credit is made available on spec¬ people will not for long tolerate
that many of the influences which
moil and strife of the past year tacularly generous terms for the policies which keep the nation's
economic organization in low gear caused business to remain de¬
must be ended 'and labor organi¬ purchase of homes, not a dollar
and hold back its economic prog¬ pressed in the decade of the 30s
zations must be prevented from of credit is permitted to those who
seem likely to be less effective in
ress. I believe, furthermore, that
ignoring the public interest by wish to become part owners of
the mortar, bricks and machinery the peole of this country are not the.future. Then our Government
/ repeatedly calling out their mem¬
had a severely anti-business com¬
major
industrial
concerns economically illiterate and that
bers a t the key points in our .pro- our
we shall before long see
legisla- plex, we were in a period of rapid
duct'on, transportation and dis¬ need if they are to expand pro¬
economic, social and political re¬
duction. Borrowing on securities is tive evidence of that fact.
tribution systems.
not always for speculative pur
This is the basis for my assump¬ form,/ which droye capital into
It will be said, of course, that
the storm cellar, we were plagued
poses and I am persuaded that tion that iii time we shall com¬
anyone who proposes to change
there is hardly a more productive plete the process of reconversion with under-investment and over¬
present labor legislation is un¬
and be ready for a period of high saving, which is highly deflation¬
use for credit in the broader sense
friendly to American labor. But
than by investors who wish to buy production and improved operat¬ ary in its effects on business, and
the enthusiasm of American la¬
the hew securities of corporations ing efficiency. W6 may have a the clouds of war were gathering.
boring men and women for the
Today the outlook is far from
status quo must have'suffered of whose expansion is necessary if long and" rocky roadvto travel be¬
fore we arrive at that state of af¬ clear but many of the militant re¬
we are to have full employment.
cause,
the
.
without
some
irresponsible
late.
groups
workers: haye
Many
lost
prepared to be¬ formers have been cast out of our
durfng the
Step 4. Balance the Budget at a lieve that we shall get there Government, the term radical is
strikes than they will regain in a
Low
Level
of Expendi- eventually. While the immediate coming into disrepute, the urge
long while. And, workers - who rv:-K
tures..■ ..,///.•
outlook for production, prices and for reform is on the wane, and
want to work and need the in¬
We need to curtail expenditures employment must remain obscure new investment in capital equip¬
come
have been thrown out of
so that we can reduce the tax bur¬
untii the process of reconversion ment, community facilities and
employment because of wild-cat
den on productive initiative and, has been completed, the outlook housing promises to expand vig¬
strikes in other industries.
They
in turn,
develop the surpluses for the post-reconversion period orously/ which should in time re¬
have
not
gained anything and
which will enable us to reduce seems to me to offer somewhat move the threat of "over-saving."
"know it, Furthermore, a paralysis
And while the international pic¬
our
presently bloated national clearer guides for policy.
of industry by a few unions in
ture leaves much to be desired, in
debt. A balanced budget has be¬
possession of the bottlenecks in
Dominant Characteristics o£ the
many respects it is not so ominous
come essential because the sound¬
our industry will be nothing short
Post-Reconversion Period
as it was in the prewar period.
ness of our money depends on the
of disastrous for millions of our
Government's ■ fiscal probity, be¬
We are thus justified in expect¬
If, as I am prepared to assume,
workers.
cause it is one of the best safe¬
"Operation-Prosperity" turns out ing the level of production on the
The legislation we need should
guards against inflation and be¬ ultimately to be a success, what average in the postZ-reconversion
be to the advantage of the worker.
will be the dominant characteris¬ period to be materially higher
cause we "need to accumulate re¬
It is to his as well as the nation's
serves of borrowing power for use
tics of the post-reconversion pe¬ than it was in the dismal 30s.
interest that those who wield such
if we experience another serious riod?
power over our economic lives economic
2. Intense Competition.
emergency.
•«
•
shall haye beenpopularly elected
l.A High Level of Production.
The
post-reconversion period
Lower taxes on individuals and
by their, union members, It is-just
That we shall, when reconver¬ probably will be marked by in¬
corporations are now required be¬
common sense, that unions should
sion has been completed, witness tensely keen competition. In the
cause
present rates represent a
be required to live up to their
a period of high-level business ac¬
course
of time, we are sure to
towering obstacle to,the accumu¬
contracts, All of bur workers need
lation of venture funds by indi¬ tivity as compared with the 30s is move out of the condition of scar¬
to be protected against the possi¬
viduals and to their use by in¬ strongly suggested by the fact city which has prevailed during
bility of extortion by an unscrup¬
that American business has sev¬ recent years in many lines of
ulous minority acting under cover dustry in providing more people
with, well-paying jobs producing eral vast new markets to develop. goods, out of the lush period of
of the broad
grants of power
These markets are the outgrowth indiscriminate buying almost irthe goods we need.
which
Congress has
made to
of a combination of circumstances resppcdve of quality or price, to
Let no one tell you that a lower
unic ns in the past few years. The
largely associated with the war— a condition of easier supply and
whole country needs to be sure level of Federal expenditures is
the deferred demands of consu¬ multiple choices among qualities
/ that trumpedrup meetings, un¬ impossible for many experienced mers everywhere which assumu- and prices of goods and services—
representative runjon, .committees tax experts have suggested budg¬ iated during the war, period; the in
short, from a sellers' to a buy¬
ets* * capable of adefquoitely ' sup-5
and fake elections will not be used
fact of accelerated family forma¬ ers' market.
i
porting essential government
to force a strike by a union, the
tion, which provides a solid and
Reinforcing the normal tenden¬
services,
of from one-third to
maiority of whose members do
substantial market for housing cies in this direction will be the
not want
to
leave
their jobs. One-half the so-called minimum
and furnishings and
community many and highly significant tech¬
Legislation to bring about these budgets advocated by many gov¬
facilities; and the needs of great nical developments which have
officials.
Unnecessary
reforms would be neither anti¬ ernment
sections of the world not only for come out of the war period. New
Government operations should be
union nor anti-labor but it would
relief and rehabilitation but what industries mean new competition
smooth
the
way
to
less labor promptly eliminated and it is
is more important, tp rebuild, to for the consumer's dollar;
New
/, strife. Finally, we cannot afford to time to put a stop to those loan,
improve, to extend and to mod¬ techniques, materials and methods
; permit misguided labor leadership relief, subsidy and public works ernize their
productive facilities. mean new low costs for those who
disbursements which are justifi¬
to feather-bed our industry to a
Another circumstance of massive take advantage- of them and new
point where it will be unable to able only in time of deep depres¬
significance to the markets of the price competition for those who
use for the nation's advancement sion. With a debt of over a quarter
future is the fact that millions of do not do so. Presaging a period
the
technological improvements of a trillion dollars it is time for
our people who were completely
of sharp competition from still an¬
wh'.ch science has made available. a return to fiscal conservatism.
or
partially unemployed during other direction: is -the tendency
[ The luxury of inefficiency may
the depressed
30s, were raised apparent in many instances for
This program, let me repeat, is
well be disastrous in a world such
abruptly to the middle income business concerns to widen their
as that in which we live.
; >
not spectacular, complex or diffi¬
class during the war years. These fields
of
endeavor by entering
cult to understand. It is in essence
Step 3. Free the Security Markets a recommendation that our Gov¬ people now have a considerable lines of production, merchandis¬
stake in cash deposits and War ing or service heretofore outside
to Supply New Funds for ernment
stop doing the things
Bonds, in addition to the prospect their spheres of activities, which
;
Business Expansion.
which
have prevented
us
from
means
that they are or will be
In the past few months we have having prosperity and start fol¬ of continued employment at least
new
competitors of the old-line
experienced an acute case of in¬ lowing the policies which eco¬ during the next few years; hence,
companies. In some fields of in¬
digestion in our security markets nomic history teaches us are sure they are in a position to transform
dustry, the war period brought an
following the offering of a rela¬ to produce that desirable condi- their wants into effective demand
expansion of facilities to a point
;
tively small volume of new issues. tion.
in the markets of the country. much beyond anticipated peace¬
The Outlook
Some individuals may view a de¬
Such demands are not likely to time needs and doubtless present
cline in the stock market as not'nWill we be able to elimina+e
ambitious plans call for more ex¬
.Jng more than iust redistribution these blocks to prosperity or shall become effective until the costpansion in some lines than later
for speculators, but such is a nar¬ we
accept the view held by Some price readjustments of the re¬ demands
will
actually support.
row
and shallow view,, for new
that we shall never achieve full conversion period have been comMoreover, * it has been a fairly
more
city does not exist, to find that
break-even
point has risen
the
,
fairs, but I
dollars iri income
am
.
.
•
t
.
.
v
-v
demand representing
of. foreign
relief
and
needs
importance,
rehabilitation
will in time decline in
with first one industry and then
another
For
affected.
being
a
period, we undoubtedly face very
heavy
capital expenditures by
business concerns, individuals and
state and local governments, but
these expenditures are likely to
vary considerably from year to
year.
The problem of correcting
internal maladjustments in the
wage, price and cost structures
and of obtaining better relation¬
ship between them is neither
likely to be solved quickly nor
without obstructions to produc¬
tion which at times may assume
proportions.
serious
Furthermore, it is to be ex¬
pected that the Government itself
will at times contribute to insta¬
bility in our economy. Although
the concept of "compensatory fis¬
policies" by the Government
is; designed theoretically to offset
irregularities in privately spon¬
sored business activity, we know
cal
practice political as well
that in
considerations
economic
as
will
frequently be the determining in¬
Government expenpolicies also are like¬
in
fluence
ditures. Tax
have
ly to
They
disturbing effect.
a
cumbersome control
device, for the effects of atax
reduction or a tax increase on the
budget and on business are likely
to be considerably delayed beyond •.
the need for such actionw^ijn;/the /
field
of debt management and
monetary controls, the Govern¬
ment's often enunciated objective
of keeping interest rates low is
apt to find itself frequently in •
conflict with the problem of curb¬
ing speculative fervor and pre¬
venting
inflation.
Government
policy is likely to be determined
a
are
first
by
then
one
consideration and
other
the
is, I
consequent
with
aberrations in policy.
Government
afraid, likely- to remain
am
for instability
and with the
level of expenditures as high as it
promises to be, fluctuations in ex¬
penditures and shifts from deficits
to 'surpluses and vice versa tend
to have a magnified effect on the
making
factor
a
.
rather than stability,
economy as a
whole.
V Other factors, such .as changes
in inventory policy by,, business,
waves of speculative elatiori and
pessimism,, and rapid and wide
changes in the climate of interna¬
tional affairs are likely
to add to
instability
which probably ,
will mark the .post-reconversion /
the
years.
4. A 'High Level of Prices,
Inflation
is already present' ih
and in a broad, over-*
'
our. markets
the upward pressures
on
the general price level* are
still so powerful that, whatever Ui
may happen in the reconversion
all
sense,
_
capital must be had
if it is to
by industry
expand production, pro¬
M
.
reconversion,
decontrol
time restrictions and
of
war-,
pleted,
but
they
demobiliza- enough to justify an
are
large
optimistic ap~
common
experience of American
business, even where excess capa¬
*No
index of the general
of prices
cept
can
any
is
level
V
is available but the con¬
important/for inflation
itself in the orice of
or all of the following:
°
express
one
Commodities,
erty or
wages,
securities.
V">;. 1 'vl *#'*'"•
real
prop¬
''h
r
rnmrnmHmm»mim'V^'-rm~' J. WXfttth' ■
municipal and cor¬
in the
post-reconversion years to remain porate securities is likely to be
substantial.
Furthermore, "J the
substantially above that of the
ever-prdsent threat of inflation
prewar period. We have in or¬
ganized labor a powerful agency
lor raising wages in first one area
and then in others. Here the spiral
perfection, for each suc¬
cessive increase in the wage struc¬
ture means a rise in costs and
provides the basis for further
labor demands. And the monetary
structure puts
no
limit on the
process; in fact, the policy of com¬
pensatory spending by the Gov¬
ernment
is
inflationary
in its
works to
-
while
upward with credit terms less
liberal than they were when the
demand for credit was light and
the Federal Reserve was flooding
the banks with unlendable funds.
be
times.. I
I
"
•
re¬
submitted
ments may
'
,
n
.
abroad
transforms
foreigners from consumers of
bilitation
•
our production to competitors
with us in the world markets.
J
basic
advances in farm tech¬
nology
should
reduce farm
costs gradually in the affected
commodities. But, for a consid¬
erable period ahead, agricultural prices seem likely to re¬
main
on
higher levels than
they
prewar
were
reason
for
ports are likely to
5% loan.
policies
conservative
to the
and
should
closely
be
ad¬
justed to the sort of long range
financial
which
budgeting
,
concerns have found in¬
dispensable. We face probably
a significant change in the supply and demand relationships
for credit. It is good advice all
of the time, but particularly
many
for
the
nancial
which
to
our
•,
government-guaranteed,
should
policies
that
and
flourishing
their
many
theorems
husks
pulled
other once
are
having
off
their
and
be
Turn
all of
achieve
us
the
to
and
persons
will find
it
increas¬
necessary to
borrow.
De¬
spite flamboyant statistics, real
wages—the effective sums which
the average working
family has to
spend—are down $5
a
and
levels.
almost
are
week since
to
pre-war
Already the finance
panies
and
the
various
in
com-
,
de¬
loan
partments of banks report
sharp
a
insides exposed, not by
cogent reasoning but by the disas¬
trous impact of experience.
The
damage thus far wrought is terri¬
rise
has been n'ot less than 100 billion
controls
dollars;
other commodities will encounter :
unsound
able
volume.
goods
want of
held
dur¬
for
back
trifling part
some
of
reason
Consumer
now
by
or
labor
disputes will be
released in quantity next year and
fic,
Exclusive
pf war expenses,
will be bought largely on the in¬
the cost to our citizens of experi¬
menting with these
absurdities stallment plan as soon as credit
and
to complete their
demolition will require many bil¬
lions
see
highest
at least
er's
are
a
Gigantic Mess
The
mand.
As much
few weeks
a
or
fall due in
more
and
normal amount of buy¬
resistance.
reappear
a
These
Competition will
price adjustments
will be necessary. The accent in.
more.
Clearing Up
lifted.
months.. Present
and
the business credo will
revert
to
the great word, "sales."
You, gentlemen, to whom that
a world
in itself, must
presently revive all that was best
word is
in
salesmanship and add
something uniquely con¬
atmosphere of to¬
morrow.
Our "independent man"
prewar
thereto
sonant with the
Treasury policies contemplate in¬ of mid-19th-century Georgia may
creasing rather than diminishing lend us a clue.
The individual—he who thinks
the Government's quick liabilities.
decides for himself rather
cost concerns should be the ones The avowed intent is to keep and
which profit handsomely in the down fixed charges by borrowing than as one of a group—is reasMass opinion,
good years ahead and survive on short time at low interest in¬ suming his sway.
the depressions.
stead of funding for say 20 years shaped by shibboleths, will losff
much of its potency in 1947 arid
at 2V2 %; yet Mr. Snyder is about
to whoop up the sale of E bonds, subsequent years. Sales effort di¬
which bear nearly 3% interest and rected to the independent cogitaare
redeemable
on
demand. tor will prove most effective—ex¬
lowest
.
icy to be closely geared to the
remain.
we
on
"light
assume
standards of efficiency and the
likely to; be quite erratic and
my impression is that it will
be far better for inventory pol¬
the
time
proportions,
ingly
1943
These
possible cost of production and distribution.Thelow
Right!
destined
(Continued from page 2212)
to
move
upward under the followed his native custom and the offspring of a leftish economy.
is
impetus of pressure from^or¬ turned left,—"as they do through¬ He
distinctly
an
American
ganized labor, with only minor out the entire Continent," he pro¬ product. We'll come back to him
and infrequent setbacks during claimed.
/
presently, because he has an in¬
2. Prices
good,
period ahead, that fi¬
policies be conserv¬
is incumbent
reasonably conservative. Price
fluctuations in commodities 'are
Government. sup¬
that
or
a
3., Financial
production programstare geH'ed.
Also,
•
estimates
2. Inventory
'
4
farmer is at the mercy of
the banks and that all he needs is
man
n6
at
corporations
clearing up of so gigantic a
ative.
mess will be a tougher problem
4. The prime objective should be than most people realize, because
ly justified by the conditions
the achievement of a low cost more than $65 billion of Govern-we may have to face. My point
position with respect to one's men obligations, including Fed¬
here is simply that it will be
competitors.
In a period of eral Reserve notes and U. S. Sav¬
well for us to re-examine the
broad technological progress it ings Bonds, are payable on de¬
probable;
Agricultural prices are due for
a
decline when demands for
our domestic products fall off,
as they must when the reha-
•
creasing prices; that the business
costly.
30s, the variation between in¬
dustries will be quite large and
some
of the highly optimistic
forecasts seem to me to be hard¬
broad tendencies appear
1.
will
money"
is per se vicious
big labor and big govern¬
ment are uniformly benign; that
wages can be raised without in¬
aggressively as possible and to
avoid going into the business of
inventory
speculation
which
generally has proved to be
postwar volumes will be con¬
siderably above those of the
the areas of
general to stay in the
that big business
while
ing goods as efficiently and as
geared to very careful thorough
skeptical analyses of post¬
war markets.
While in general
uncertainty
and the possibilities of misjudgment
are
great, the following
While
in
ness
achieved
spending;
business of producing and sell¬
and
,
the
by
Federal the impending shift from a seller's
that inflation and its market to a buyer's market in all
effects can be sidestepped without sections of our economy. Interest
balancing the budget; that capital rates may prove a temporary, ex¬
can be created in the printing of¬
ception due to shrinkage of loan¬
fice or on loose-leaf ledger pages; able funds. While the contraction
be
can
'
conditions I have outlined:
1. Production schedules should be
that at least
downward readjust¬
occur in the course of
*
appropriate
as
hard
the
that it will be better for busi¬
picture of the post-re¬
to be
correct, what does it imply as to
business policy? The following are
suggest
lationships
temporary
time.
structure where
demand-supply
prospective
this
learned
us
early' post-World
War I years that it is dangerous
to expand inventories unduly
in periods of inflation because
"'/we gain less when prices are
rising than we lose when prices
collapse.
The times suggest
in
way
conversion period turns out
,
however, some areas
There are,
Within the price
If
of
Most
inflation.
of general
sumption
Policy
we
deficits in emergency
periods there is little or nothing
in the way of surpluses in good
get heavy
com¬
modities rather than to the as¬
Conclusions Regarding Business
for
range
implications
under actual practice
longer
probably forces the monetary
and
banking authorities in the
end to restrict the amount of re¬
serve
credit
available
to
the
banks. Under such conditions the
trend of interest rates is likely to
will
conditions in individual
/
from
funds
phase, the level is likely
2237
^FINANCIAL CHRONICLE
THE COMMERCIAL
Number 4538
164
Volume
of labor seem
,
currently
Though
when labor
Then he caught something in stant lesson for all who sell or
and increased my eye which made him thought¬ who plan and manage sales.
efficiency are likely to reduce ful.^;
We Are Turning to the Right
actual labor costs even though
"Possibly," he added, "that's
labor rates remain unchanged. what's the matter with Europe:
If, on the eve o^ an election,
may seem to talk politics, that is
3. Prices of non-agricultural raw turning too long to the left!"
because
politics and economics
materials may well trend ir¬
America Instinctively Turns to
are
unsevered
Siamese
twins.
regularly upward because of
Right
When I tell you that there are
increased labor costs, or reWhether he was correct or not plain signs of this country's turn¬
duction in the richest or most
convenient sources of supply is immaterial to our present dis¬ ing to the right and ask you to
trace with me the implications of
l< •- and:; probable
increases
" cussion. The point is that we in
America, ever since the Boston such a trend, rest assured that we
transportation costs,
Tea
Party,
have
instinctively are'not going to touch upon par¬
4. Prices of finished goods should
turned to the right. We properly tisanship or political parties.
when OPA restrictions are
First of all, we'll' sound brief
lifted—rise to compensate for identify the word with the indi¬
vidual's right to live his own life requiems over the fallacies of yes¬
increasing
labor
and
raw
and pursue his own ends, suffer¬ teryear. Lustiest of these while it
material costs; thereafter what
ing meanwhile the least possible lasted was the notion that "ex¬
happens will depend on the
interference from the State and a cess
purchasing
power"
was
5:- outcome of
the race between
minimum
mulcting by way of something to be "sopped up" or
organized labor to raise wage
taxes. That's been the American "siphoned off" by excessive taxa¬
costs and the scientists of in¬
method from the outset, and it tion. You don't hear much of this
dustry to increase efficiency.
reclassification
.
are
cept, perhaps,
on
the purely hyp¬
levels
of jfive-and-dimfe
E bonds as notic
Men who sell
they are buying, the Secretary is consumer goods.
endeavoring
to
reduce interest will do a wise thing for them¬
while promoting the sale of his selves and their country if they
henceforward spread the gospel of
highest interest rate bonds
cashing about
business recessions
people
.
As
as many
further
a
indication of the
the
one-man
brain.
Encourage
your' customers to think clearly
prevailing in officia
quarters, much is made of the so- for themselves and, if your prod¬
called reduction since last Febru¬ uct Is right, no power can take,
them away from you.
ary of $12,000,000,000 in the out¬
A hillbilly friend from Guyanstanding Federal interest-bearing
debt, — purely
a
bookkeeping dotte, West Virginia, tells a true
transaction, consummated through story that may comfort us some¬
unrealism
<
corresponding
a
withdrawal
of
what in these uncertain times.
Ed
■
•
the
Government's bank
balances.
Simpson had come to town look¬
•
•
—
•
25. In
the
of real property,
case
•
?
*
%
'
The more they
any one theory nowadays.
By way of siphoned and sopped, the bigger
the inflation — $23,000,000,000 of
illustration:
When Grandpa Junius Hillyer surplus currency and still mount¬
of Walton County, Georgia, was ing—for the money was poured
about to succeed Howell Cobb in right back into circulation in the
Congress—that was back in 1851— form of equally excessive Gov¬
never
was
.
!
to
prices of urban housing, especially Of older houses, are like¬
ly to decline from present inflated
levels
when building
activity increases and current
shortages become less acute,
he overheard a street-corner re¬ ernment expenses.
but with the level higher than
This
mark
at
"purchasing power" fal¬
Athens, the principal
it was in the 30s. Great varia¬
town of his district. A husby fel¬ lacy, was shared by many bank¬
tions are likely to be evident,
low in homespun, manifestly
a ers and industrialists and was it¬
however, from one area to annon
slave
owning farmer, was self the offshoot of a still wide¬
other and in different types of
spread error which mistakes the
boasting to a knot of listeners:
properties.
5
1
effects of inflation for its cause.
-
:
confined
section of the country.
Under these
conditions, it woulc
"I'm
-
as
inner-pennant
a
man—"
He paused,
looked 'round for a
subject, caught sight of Grandpa,
•quite wide fluctuations in the at that time a judge and a large
broader price indexes as well as
plantation owner.
V;
in the prices of individual com¬
"I'm as inner-pennant a man as
modities, but, to repeat, the level Jonas
Hilary or any other inneris likely, on the average, to re¬
pennant man!"
>
; main substantially above that of
That
declaration
crystallized
the prewar years.
Grandpa's public career. Thence¬
forward he championed the inde¬
5. A Rising Trend of Interest Rates
pendent men
of Georgia, who
The
be surprising
if we failed to have
post-reconversion period is
to be marked by a shift
Trom a buyers' market for credit
-which has now lasted almost 12
likely
owned
bread
no
slaves but earned their
and kept their self
respect
—a
group hitherto without ade¬
quate representation at the na¬
years, to a sellers' market for
tional capital. In so doing, Grand¬
long as well as short-term accom¬
pa turned to the right, for the in¬
modation. With production and
dependent man, who thinks and
prices as high as they promise
speaks as he pleases, and who
to be, savings are likely to be re¬
acts as he pleases so long as he
duced and the demand for bank
loans, mortgage money
and new
does not harm his
fellows, is not
Inflation is the act of
much
not
money,
which
flow
<
printing too
the
results
that
from
money
being in circulation. Ypu can't
stop the bullet after the gun is
fired.
•
,
•
/•
Interwoven with these two
mis¬
conceptions is the whole theory
of
price control,—a fascinating
sophistry so deeply planted that
not until nearly a year after V-J
with
Day,
whelmed by
city,
was
the
country over¬
well-contrived scar¬
any
effective
voice
against it. Now it is un¬
questionably on its way out. Price
control, except as ,to rents, is
being sped into limbo.
raised
Time will not permit enumeration of related
tion
fatuities.
only a few: That
After the
$5,000,000,000 remainder ing for
of such balances in excess, of curr
somebody to
roof of his sawmill.
repair the
He had made
been no progress, because what he
the wanted patched was the steep side
river and
national debt, together with an that hung over the
equal sum from - Federal trust everybody knew that the shingles
rent
working
drawn
down
funds
has
and applied
on
real test will come on that half were moss-covered
actual reduction. The and very slippery. At last he en¬
outcome will depend upon how countered old man Eli Ledbetter,
far
the
Government's expendi¬ a run-down bookkeeper who did
tures can be pared below its in¬ odd jobs to pick up money for his
toddies—two or three of which
come. Here we encounter contra¬
funds,
the
respecting
dictions
on
the
highest official Eli was carrying on this occasion.
of the Treas¬ Thus emboldened, he undertook
the task without hesitation, think¬
levels. The Secretary
that he'll wind up
and ing only of the perfectly safe
roadside-fronting roof.
the President predicts a deficit.
Nevertheless, the mere fact that
Quite a crowd gathered at the
budget-balancing is seriously pro¬ mill to watch Eli fulfill his fool¬
posed and that the national debt hardy contract. Armed with the
is going down even on paper, be¬ usual
shingling' implement and,
tokens a right turn in every sense having climbed the near side of
of the word. It is my opinion that the roof without trouble, he stood
this
liquidating
tendency
will teetering on the ridgepole, sur¬
gather momentum until the public veying with surprise the danger¬
debt is stabilized around $200 bil¬ ous
prospect
before him.
Re¬
lion. Any attempt to drive it much started to assume a sitting posture
below that figure, under foresee¬ but he slipped and down he slid
able conditions, might involve a on his bottom, announcing in a
perilous course between the cliffs loud voice:
of
"Goin' to hell, I reckon!"
oversteep
taxation and the
downward gyre of a deflationary
With
this
downward journey
more
than
half • finished, ; the
whirlpool.
i
hook-end of the shingling tool ac¬
Effect on Selling and Sales
cidentally caught in a hole in the
Campaigns
What
does
this
background roof and swung him around three
times. When he came to a halt he
mean in terms of selling and sales
nodded to the crowd and clamly
campaigns? To begin with let us
remember that any debt-expand¬ proclaimed:
"Saved by a miracle, by God!
ed regime or nation must sooner
Maybe that's what will happen
or later turn to the right in order
to us here in the United States.
to avoid ruin and that such a turn
We are
unquestionably on our
inevitably
means
contraction.
Therefore
we
cannot expect a way to hell, but we can be saved
ury assures us
the fiscal year with a surplus
„
.
of boom times. The by* a miracle—the miracle
downslide on the New individuals thinking and
continuance
To men- current
prosperity ] York Stock Exchange prefigures
independently.
of free
acting
:
THE COMMERCIAL & FINANCIAL CHRONICLE
2238
'••■v..
.
;:■'. ;:
.
'■ v:
v;
Thursday, October 31, 1946
..
combined with the good sense of
investment con trihutipns of every
be relied ^poq. to.
town^ vand^ hamlet,• ?<make'
better job in this connection themselves felt in
constructive en*
than can be expected from gov¬
ernment officials.
When it is re¬
Directive Guides of Nation's
torted that brokers' loans were
,
w a
ing merely an anomaly in con-security' collateral, the Federa
(Continued from page 2204)
Excnanges.
Securities
markets nection with the handiwork of Reserve regulations present one
our national
are supposed to be the barometer
planners, which the outstanding
curiosity. Accounts
of business. They should merely plebeian minds of our business having debit balances, built up in
reflect conditions in the economic
We
world.
witnessed
have
the
spectacle of many quoted values
decreasing by more than one-half
in the course of a few weeks. This
men
cannot
fathom.
We
must
recognize it as a tourniquet which
is paralyzing the right arm of
industry, and fraught
with grave danger to Our nation
American
strict
accord
the
thereof have
been
deprived of their freedom of
action, and the exercise of their
investment judgment. A security
held inysuch an account, may no
it necessary to determine as a whole.
V 'jt:■. ,Vv / -V^vr
%•' y'•;
whethpr the fault lies in the mar¬
Reconversion Requires Additional
be sold for the purpose of replac¬
kets themselves, or in regulations
Corporate Capital
which prevent the markets from
ing it with a more desirable is¬
All
competent students knew sue.
This is true not only when
being merely the mirror of busi¬
that the reconversion period no additional credit need be ex¬
ness
conditions, and which may
makes
••
business
of
recession
Grave losses have been sus¬
sion.
Business sentiment today
tained.
New proj¬
is uncertain and timid.
will
which
ects
-
depress
or
give
em-
more
ployment to our people and more
goods for their enjoyment are being postponed or abandoned. It is
.with respect to this inability of
our markets to absorb liquidation
would involve extensive financial
tended.
that corporations would
require additional capital to make
transform them into a cause
even
transaction would result in
programs;
from
their
stockholders.
own
Many others 'went to the public
capital markets with new: issues
the securities markets. Never be¬
fore has it been concluded that
pansion within the United States,
which, with the single exception
speak.
•>
,
prohibited from
activating the expansion of pur
national economy.
Yet, in effect,
this has been the edict of the Fed¬
Credit
must
be
In January,
eral Reserve Board.
1946, it decreed that listed securi¬
ties could not be purchased by
pledging other listed securities as
collateral, nor by the deposit in
cash of a reasonable percentage
of the value of the listed security
So-called mar¬
to be purchased.
gin trading, in other words, was
a
the
of
decade
characterized
The
of
our
the
1930s, has
entire history.
American
Telephone &
Telegraph Company is one of our
premier institutions. With its nat¬
ural expansion deferred by war,
American Telephone now needs to
raise huge sums of new capital.
As
usual, it turned to its own
stockholders. For years they have
not only furnished such capital,
but
have: benefited both them¬
selves and our country by so do¬
It is
dismissed by the Chairman of
Federal Reserve Board with
are
the
the
,
conditions
that
observation
through*the
elimination of speculative factors
in our economy*
He professes to
gain "encouragement" from the
large declines in values. He states
have been "bettered"
•
that
"because
of
their
prudent
policy, forced selling has
practically
non-existent."
Whether
the
selling has been
forced or voluntary, I confess my¬
self unable to gain much "en¬
couragement" from it.
credit
been
.
;
:Securities ;;;;/-Z/l/
Strangely enough, it is true that
and for
any purpose by banks, though not
by brokers, on securities which
are
not listed on any organized
Exchange.
Unlisted stocks may
be employed as collateral for the
purchase of other unlisted securi¬
ties, but may not be so employed
to purchase listed securities. And,
as though for the express purpose
of emphasizing the inequity, loans
on listed securities are permitted
for the purpose of purchasing un¬
listed securities. ' Such provisions
loans may be made freely
represent a gross discrimination
as between listed and unlisted se¬
curities.
-
;
/
The securities which
are
listed
for trading on our
resent
the company has failed to
use
Exchanges rep¬
ownership in those com¬
of
their
securities
as
a
basis for credit, is; to erect a bar¬
in the path of those units
rier
within
industrial
o ur
which have
been
the
ability and efficiency.
dismiss
such
a
system
leaders
in
We cannot
condition
as
be-
was
We
Netherlands
because
all
tulip craze in 1720*
recognize that while
produces beneficial effects
credit
a
when; properly employed,
susceptible to abuse.
it
also
those
who
interested
are
development of
is
But
in
the
productively
the
vast
capital which, in the
but in
trol
as
credit
con¬
applied to the securities
.'
market..'.
Aside
This is
collapse.
from
the
-
on
hope that the rules and
directives
and
more
rather
tity.
we
an
fair
which
emanate
regulatory bodies
our
than
from
may become
of a constructive,
more
destructive
a
quan¬
More importantly, however,
have imposed upon ourselves
increasingly high standard of
dealing and business conduct,
which is not exceeded by the re¬
quirements of any other business
profession.
or#
fore, have
made
Of
.
what,
there¬
to bs afraid?
we
It is
Of the world.
The flexibility
market progressively -higher, and
rendered it more vulnerable.
No
possible justification for: such
provision can be offered, and it
should be repealed immediately.
forget that credit, when prop¬
erly used, creates capital, and that
the
amount
of
capital in any
country, together with its pro¬
ductive
application,
determines
the standard of living.
The
Progress Due to Credit
No
great
credit.
Many of
our
early settlers
indentured servants who had
to work out their passage money.
To
a
substantial
roads
were
extent
built
of
the
Federal
Re¬
rail¬
our
by credit from
the base of farm and home own¬
Thus, the restrictions
imposed by the Federal Reserve
economy*
the
use
of collateral for
obtaining funds for investment in
listed securities may not only give
the country a stock market panic
but
an
well.
be
industrial
depression
have
as
A reasonable conclusion to
drawn from the
recently
spectacle
witnessed
is
we
that
government interference with the
flow, of capital is bound to be in¬
the
members
of
our,
the
highest
ards of any
bankers and
the. Exchanges,
living stands
nation, and which has
the envy and the marvel
us
We ard the agents
of those whose savings have madd
possible thi$ state of well-being*
We
can
do no
less than fight
strongly in their behalf.' While
we may fight under a
handicap,
there is no true man who does Pot
welcome the thrill of a handicap,
the
and
disastrous
failure.
"
During the last few months the
millions of stockholders have al¬
securities markets of our country
have been saying that something
ready been huge.
Losses
challenge to his capacity
to
a
A poor market
exists whether
and
one wishes to buy
Many who wish to save
discouraged,
many who wish to obtain
new
capital funds
or
sell.
and invest have been
can no
longer
forward with their plans for
expansion.
Lower
production,
go
lower
living standards, and pos¬
sibly lower employment cannot
fail to follow any break in the
stream of savings and investment.
It
is
time
credit
re-examine
to
these
regulations and restrictions
have
contributed so
di¬
which
rectly
to
the
the market.
recent
collapse
of
This re-examination
possess
on
people
which it presents.
beeij
ership.
Board
life which has brought to our
of
market on a cash basis has
involved
were
action
privilege to uphold free en¬
terprise in America—that system
our
serve Board in putting the stock
exaggeration would
in stating that the
United States has been built on
be
prohibitions The judgment of
(against the extension of credit
to
reason
ion in connection with it. We must
out
ept at best and disastrous at worst.
.
ernmental
not
sell
-
rection
recognize the propriety of gov¬
regulation.
We have
we
unwillingness of investors to sel
under such conditions drove the
He has been told either
.
the fine,, ripe fruit of
the directive guides of
the wealth of America.
As such,
are
of his, investment
program has been destroyed; The
for cash.
to hold what he has or
,
stock market resulted not in cor¬
We
country and
in the welfare of our population
must be seriously concerned when
a valuable
asset, such- as credit,
is thrown; aside because a few
people have acted in foolish fash¬
our
Comparatively few people should be undertaken not in a
the financial skill and the spirit of recrimination, and cer¬
past, have been obtained from its self-discipline to .Accumulate suf¬ tainly not as a witch hunt, but in
own stockholders.
It is because ficient savings^ to
purchase for order to promote the welfare of
of government restrictions on the cash
expensive; items such as our country and to remove all
use
as
collateral of shares now homes, farms and
automobiles. obstacles which impede its wel¬
owned by stockholders.
As a re- Yet the possession of these de¬ fare and prosperity.
sult, many of the 684,000 stock¬ sirable durable and semi-durable
holders of American Telephone goods increases the stability and
In an address before the Chi¬
cannot obtain the ready cash to efficiency of their
owners
and
cago rAssoci^ioij ^bfc Stock; Ex^
purchase the additional securities thus contributes directly to the change Firms in
Chicago, on Oct.
which the company intends to of¬ prosperity of our country.
Had 24, Mr. Cabell
urged a united se¬
fer, The price of American Tele¬ not credit been available to peo¬ curities
industry to aid in the
phone fell abruptly by about 25 ple; of honesty land; energy, ;• the cause of free enterprise.
In this
points, representing a loss in mar¬ standards of, living; in the United address, Mr. Cabell stated:
much
ket valuation of some 500 million States would have been
This system of free enterprise
wealth would
have
dollars to the owners of this com¬ lower and
and equal opportunity—this way
pany alone.
In the past the right been concentrated in fewer hands. of life which has enabled us as a
to purchase additional American Yet this credit device, which is
nation
to,
reach. unparalleled
Telephone securities has been a useful in so many directions has,
heights amongst all the nations of
valuable perquisite to the owners by the action of the Federal Re¬ the world —
has long been and
of the company. Under prevailing serve Board, been; eliminated in
continues to be under subtle, in¬
conditions
the
rights
deriving the purchase of investment secur¬ sidious and malevolent attack. To
from the proposed new financing ities. Such action effectively pre¬
you, I do not need to amplify this
plan have had a diametrically op¬ vents the small investor from
charge. You know that it is true.
posite effect. And all because of making maximum financial prog¬ But what are we in the securities
ress.
If he .waits to accumulate
a single restriction on the use of
industry doing about it?. Are we
credit
by the Federal Reserve the cash necessary for-the pur¬ sounding the bells of alarm in the
chase of securities, other demands
Board, even when such ; credit
ears of those to whom we owe our
would have been employed in the frequently arise and the securities
responsibility?
Are we calling,
most conservative and construc¬ are never purchased.
The stimu¬ not
only on securities holders, but
lus of systematic saving and in¬
tive fashion
on those millions who own homes,
vestment has been gravely
im¬
Congestion in New; Security Issues paired. ~ Of equal importance < to farms, insurance policies, and sav¬
ings accounts, to rise up for the
There has been congestion in the welfare of our nation is the
protection of those - things for
the market for new security is¬ fact, already recited, that corpora¬
which they have toiled and prac¬
sues, ; This
congestion has been tions with the most promising ticed self-denial?
Are we doing
one of the major reasons for the
prospects can - no longer: obtain all which lies within our
power
the capital which is essential,to
decline
in security values.
It
to
point out the inevitable fate
the maintenance of a vigorous
stemmed largely from the veto
which awaits them unless the un¬
utilize
amounts of
panies which are vital to the wel¬
fare and prosperity of our coun¬ by the Federal Reserve Board of
the use of existing listed stocks
try.
The continued growth and
expansion of these corporations as collateral for obtaining funds
Strictly
not only add progressively to our to absorb new securities.
national welfare, but provide in¬ cash resources became impaired
creasing employment for our peo¬ and, since credit was not availple. To stifle their ability to ob¬ abley the minor uneasiness which
tain new capital by prohibiting had previously prevailed in the
the
with
.
Discrimination Against Listed
®
cause
the
in
there
de¬
my
its effects on our recovery efforts
in connection
regulation prohibiting tulip cul¬
ture
when the
Farm ownership, home
No longer, however, may abroad.
contention ing.
that this prohibition of the use of owners of American Telephone ownership, the purchase of auto¬
credit for the purchase of listed borrow against their existing hold¬ mobiles, and the, acquisition of
securities has been the : primary ings of stock to obtain part of the household equipment have been
funds for purchasing the new se¬ vastly extended by making credit
cause of the disorderliness of the
decline in our markets.
We had curities of this same company. available to prospective purchas¬
ers.
Government agencies have
been told that disorderly markets And why? Not because this com¬
been established to supply credit
were
no
longer possible, once pany, by rendering the best tele¬
for purchasing farms and homes,
they had been placed on a cash phone service in the world, has
basis. Now that disorderliness has shown an inability to earn and because of the social importance
Not be¬ of broadening as far9 as possible
ensued in its most refined form, pay suitable dividends.
*eliminated, i
a
deficiencies, enlarge their ready involved.
Not until the
businesses, and introduce the new owner of the account has com¬
products and processes which have pletely extinguished his previ¬
recently been developed.
Many ously created indebtedness, may
corporations sought new capital he purchase another security save
Credit has been banished from
orderly fashion that I wish
an
to
even
credit
securities because of 1929,
is about as sensible as would be
of the amount of credit al¬
crease
of
listed
up war
of stocks and bonds. ; All. of this
is normal and desirable.
It rep¬
resents the resumption of that ex¬
in
It is true
use
Wealth
element
leading to
aftermath,
the reply may be made that this
was a unique
phenomenon in the
history of our country.
There is
no sound reason for
anticipating
its recurrence.
To prohibit the
prior re¬
Board,
are
of
The
disturbing
1929 and its disastrous
the
owners
quirements
frozen.
with
.
a
ceasing
assaults
Com¬
of
our
are
restrained?
is wrong.
They have been saying
a national income* of
that despite
$160
billions, despite 57 million
people gainfully employed, de¬
spite record bank deposits and
currency circulation, despite the
overwhelming demand for goods
arid services of all kinds, there is
a
loose somewhere.
screw
commentators
assert
that
know
what
have
the
it
is
The Chairman of
Many
hastened
market
does
talking
our
to
not
about.
Federal Re¬
Board is reported as
having
blandly asserted that the collapse
in9 security values- "encourages
hope that we may be able to
squeeze out the speculative fac¬
serve
tors
in the economy and correct
the distortions that exist in somd
lines, and maintain production
t employment at
high levels.";
and
Mr.
Eccles
apparently belongs to
thought which feels
that school of
that security values create eco¬
nomic conditions rather than re¬
flect them.
*
;
<" *
!
1
Eccles' View Attacked
„
.
=•
1 /.
^
If Mr, Ecicles is.of the opinion
that the decrease in the value of
American securities represents a
constructive factor in our reha¬
bilitation, he is the first presumed/
representative
voice such
at
least:
of capitalism
to
thought. His views
a
the /virtue
possess
of
originality.
Rarely do we witness
such a collapse in values without
there being economic reasons, en¬
tirely apart from internal market
conditions, which
sooner
or
later
to light as being the basic,/;
motivating cause for the occur-/:
come
fence.
I do
not pose as an ecqn-
•
omist, and I shall not attempt to
delineate all of the
have been cited as
reasons
which,
contributing to
the collapse which we have wit¬
nessed.
I
would
hazard
the
thought, however;; that brie/of thef;
primary
causes of the decline may.
be summed up in the
phrase, "loss Z
of
investor
confidence." ; Z Fori
months after the fall of Japan the
market forged steadily ahead de¬
spite
trial's/* ofreconversion,
disturbances, governmental,
Are we doings our full share in ineptitude, and the myriad
hand-;
upholding the arms of those of icaps of every character imposed 5
our
representatives in Congress tipon industry.
The investors of
who challenge these elements? We Our land were saying they pos- i
are not.
And why not? / Is it be¬ sessed confidence that the nation
cause we have been for years the
which had girded itself so amaz¬
whipping boys for so-called lib¬ ingly and so rapidly for total war,;
eral politicians?
Rabble rousers would perform a similar miracle/
still seek, applause from the un¬ in preparing for the fruits of
thinking, • by inveighing against' peace.
Almost a year passed.
munistic elements
the
labor
-
Wall Street and La Salle Street.
Doubts
The old Wall Street and .La Salle
selves.-
Street,
of
;he
They are today
through which the
are gone.
channels
the
began
There
to manifest, them¬
arose the specter
division and distrust between
victor
nations,
rath§r
than
Volume
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4538
164
spirit of amity and good will
would
assure ja
stable
that
which
But darker still appeared
world.
overhanging
clouds
the
mestic
do¬
strife,
our
Industrial
scene.
instead of
diminishing,
ominous.
The restraining hand of
grew more
what I advocate is
I know that
nothing
it has
You may well
new.
tried
been
organized
cannot be
Well, if it
aroused.
or
has
been
tried
not
tried
it.
•
without
before
investors
success—that
before,
And
say
is
it
have
we
who
we
its
operations which the public
possessed, and judging by some of
its later efforts to present its
case,
it underestimated the public intel¬
ligence. / The mistake was also
made of
underestimating the zeal,
tenacity and propaganda skill of
lighter.
possess the closest contact both, the government - run - everything
with management and with stock¬ school of thought which was quick
holders.
If we, the members of to make the most of its opportun¬
clogged and stifled.
the
bureaucratic
red
tape and inter¬
ference grew heavier rather than
Production lines became
Our political
leadership has appeared confused,
bewildered, and without a guiding purpose. The voices of those
tvho pay tribute to a collectivist
than
rather
have
State
democratic
a
louder,
Uncertainty
has replaced confidence, and this
uncertainty is beginning to reflect
fear for the continuation of pri¬
enterprise,
vate
.•
;
grown
Urges
Collective
.Exchanges,
Bankers
Investment
Association, the National
well
as
Securities Dealers,
the American Bankers
as
Association, will properly organ¬
ize
Fortunately, there are still those
the
for
ourselves
economic
original
task,
the
political
and
tives
in
finest
the
sense
our
it.
would
the
of
But
Their
they need help.
adversaries are active and vocal,
while those who have most to lose
sit
have
do
endeavor.
the
not "seek
leadership,
position of
not: shirk
would
we
it, and most assuredly would, we
is anathema.
'
•
'
(The
"Chroiiicle"
invites com*
mistake about
no
state-socialism
the
of
devotees
great many
American people. And no matter
how much they may protest their
allegiance to democratic princi¬
ear
ples, they
group
conserve
nation as our fathers founded
it—these
Though
an
_
they
And make
which
of
be preserved.
pledge our wholehearted and Un¬
who are prepared
to fight for swerving cooperation. Surely, we
their heritage and for ours.- And know that our cause- is just. «We
these men are not restrained by ask
pnly to perpetuate the spirit
political tags or by party em¬ of our nation's Constitution and
blems.
They are the conserva¬ its Bill of Rights, and to prevent
tives of both I parties—conserva¬ its overthrow
by those to whom it
word—for
ity.
our country can
The Association of
Stock
Exchange
Firms
would
welcome the opportunity of join¬
fundamentals
we
in high places who have become
aroused to our internal dangers—
r:
Association of
ing in such
Strength
the
a
advocating policies
destroy the American
are
can
system.
The
creeping
paralysis which
results from promoting class and
dissensions
vidual initiative
can
can
just
stifle indi¬
as
violent revolution.
surely
as
This may
deliberate in¬
tent, but it will be the inevitable
may not be their
or
result
of
the
subject.
When the financial crash of 1921)
the following
depression fo¬
cused
public
attention
shortcomings of many
practices, there
was
no
on
the
business
organized
effort to prevent
Even when the late
gency
war
emer¬
gave
•
(Continued from page 2215)
children and security lor old age.
These
are
universal problems, and
the average man thinks and acts
in terms of their ramifications.
;Economic principles have evolved
through man's long struggle for
survival, his gradual mastery over
material forces, and the sloW rea¬
lization of the inter-dependence of
human beings. This inter-depend¬
ence
has been obscured by the
complexities of industrial growth.
where
tator
anu
how
an
economic dic¬
permitted.
to
spreading of the
power
dividual freedom.
States is to assert
If the
a
United
moral leader¬
ship in behalf of the fundamental
rights of man, its own citizens
must believe in the system which
the nation great.
And
to do
grotip depends
-on
of
one
the prosperity
of
Capital and management lost
sight of this, principle in the pe¬
riod When they pursued the shortrange policy of reaping the quick¬
est
monetary rewards for the
smallest possible outlay. And their
fingers have been well burned in
the past 15 years by the occasional
•public opposition which this pol¬
that,: they must be told more
about that system.
Without simple, factual infor¬
mation on such subjects as how
Policy
i The fair-mindedness and native
when union leaders embarked
on
rule-or-ruin
policy of forcing
wage concessions which were not
justified • by production records
a
are
sufficient to guarantee an
equitable hearing for the case of
Organized labor lost sight of it,
the necessity for
in¬
doing something
a
is
compqtitivqipystem. But
curious defeatism 'persists. This
difficult to understand, in view
of the record—and the techniques
available for publiciz¬
ing it.
It is late, to be sure—very
Much time has been wasted
misdirected
arid
will not avail.
our
business if it is put to him reason¬
ably and factually. We have no
right to 'blame the "stupidity", of
Voters
in
supporting* economic
nonsense at the polls. We should
a
half million
un¬
Rights, many of whom are
yet actively in the labor mar¬
see
that
our
the
end
duty
ends
than likely to
of the free
competi¬
of its public relations that a
large
proportion of people actually do
tive system as we have known it.
not know how it functions?
To be sure, we would probably be
allowed to work, but only
First, American industry
when,
estimated
the
information
over¬
about
support
when
announced
with
duced
much
and
his
goal of 60 million
peactime jobs, as a daring chal¬
lenge to American business?
We
have
now
women
four
58
in
million
civilian
million
When
and
men
than
in
done.
bat
calamity
insisted
was a
to be
was
is
needed
is
now
in
to the
coopera¬
a
other
groups, the will
to work more and
produce more,
with profits for all ift the
shape
and better
more
arid
sporadic
last chance.
Here
we
are.
luding the ' public! With the
same
old promises.
Since the end of the -war, busi¬
ness
has been tagged with the
in
which
structure
wage
the unnecessary
prolongation
shortages and black markets,
of
enemies
of
an
expanding
T946.
The figures
to
in
date
our
16av6
that, with labor
doubt
peace
machinery, 1947 Will
see the mir¬
acles of peak wartime
production
equalled in
an
unparal¬
and
bring all
cessful
has
locations and delays in the fields
which industry could control. This
demonstration of efficiency arid
indeed
have
a
we
have to its
accomplishment.
ahead, and the real
enemy
is
ignorance. When we
have accepted the challenger and
won this
battle, the way will be
clear for unlimited progress and
creative
world
leadership
»
for
and plenty;
peace
disappointing to those who
had declared the free
competitive
system an outmoded one, incapa¬
ble of handling the
Wage Increase By
and
NY Reserve Bank
employment
production problems of a
brave, new postwar world.
Industry has already done much
to
correct
past
mistakes
and
some
■
to
plan realistically for the future,
but there are many factors in the
present situation which will
tinue
to
retard
con¬
unless
progress
they are recognized and corrected
through the force of an aroused
and directed public
In spite
opinion.
of high employment,
>
record national
income, vast for-,
eign and domestic markets eager
for
farm
our
and
manufactured
products, arid all the other Out¬
ward signs of
An increase of 10%, retroactive
Oct. 1, to all employees and
to
Factors Retarding Progress
prosperity, there is
eral
junior officers of the Fed¬
Reserve Bank of New York
disclosed during the week.
The increase is the second during
the current year—a 10%
wage rise
to all employees having occurred
was
in
January. In addition, over the
period beginning early in 1941 to
Jan. 1, of the current year, it was
noted
in the New York
"Journal
of Commerce" of Oct.
Bank
serve
in
gave
a
22, the Re¬
total of 15%
supplemental compensation on
the
first
$3,000 • iri wages to its
These
supplemental '*•
•
employees.
pointingwith-alarm at similarities between
It is further noted that the
conditions
age
by the
spring of 1946—remember?
And
only
an
enormous
made-work
program could avoid a collapse of
purchasing
power.
Instead, we
have a continuing labor shortage,
suc¬
Indus'ry
widespread uneasiness about the
to ten million unemployed
-
battle
achievements soft-pedalled or en¬
tirely denied. 'Business has been
*
abun¬
more
war-profiteer label, its shortcom¬
ings blazoned to the world and its
hampered by unwarranted strikes,
be
make
or over-confidence
on
the part of business. We can
drift,
or we can face
up to a hard job
Problems of
reconversion have been dealt with
must
produce
to
to
This is not the time for either
resourcefulness.
been
do
we
pessimism
In the brief period since the end
of the war, American
industry has
amply demonstrated its vitality
adaptability
system
going
are
pose, and the education of Americans to a strong belief in them¬
selves and in their system of life.
leled flow of civilian goods to the
markets of the
riations
of
the
world.
and
we
dantly
for
ourselves
and
the
world, and this can be accom¬
plished only through unity of pur¬
and a frees flow of materials and
more than
.
judged by what
an
record
unrelated
productivity of labor.
worst
production
in¬
and ah increase in the!
uncertainty
and
confusion
which
are
the
goods, services
industry has made
ap¬
A short-range guess instead of
long-range analysis has resulted
in
opportunities.
materials,
ex¬
pressures
spife of the crippling labor economy.
stoppages and shortages of basic
Finally,
and
effort
conditions
In
late.
But this may well
reconversion
rapidly than
existed—had
the effect of
forcing prices higher
and saddling
industry with an ar¬
tificial
from
0^'y
a
-
materialize—when
to
flationary
1946.
tion
more
to
plied
"must"
averted
keep
The policy designed to com¬
deflationary situation which
a
failed
original Full
Employment Bill, which its pro¬
once
to
prices.
on
pected, unemployment did not de¬
velop, but the damage had been
the
out the benefit of the
ponents
time
same
industrial
proceeded
employment—
more
the
at
rigid ceiling
summer of 1945—with the
armed
forces accounting for the remain¬
ing two million. And all this with¬
no
'
high hourly wage rates
weekly earnings were re¬
by shorter working hours,
when
ex-Secretary
fanfare
of
Therefore,! it be¬
policy of government to
organized labor in de¬
mands for
Remember
Wallace
if
income.
the
came
ket.
future.
There
now
is
much
and
those
which
resulted in the sharp deflationary
rather blame ourselves for their
victimized by inter-union quar¬
price of the goods workers lack of information. We have not rels in which it had no part, period of 1919720, but little em¬
phasis is placed on the differences
must: buy.
And their arrogance made them understand that the shackled
by
unworkable
price
which make the present outlook
of
industrial
workers,
will undoubtedly provoke a simi¬ welfare
regulations, blamed for continuing more
hopeful, such as more balfarmers, investors, distributors— shortages of consumer
lar public reaction.
goods and
arice between the Wage-price struc¬
in fact, the welfare of all groups—
accused of an all-consuming greed
Politicians lost sight of it when
ture and a sounder financial set¬
is interdependent, and that gains
for profits. In short, business has
they yielded to demands of pres¬
by one group at the expense of been blamed for all the disloca¬ up less dependent on sharp fluc¬
sure groups and ignored the best
tuations of money markets abroad.
others only mean dislocations that
tions and hardships resulting from
interes ts
of
large,
unorganized
To those men who think that
harm everyone in the end.
abnormal conditions and from the
segments of the tax-paying popu¬
economics cannot be made simple
unrealistic methods employed by
lation.
Courses of Failure in Public
and still be sound, and indeed to
government
in
its attempts to
We, as business men, are losing
Relations
everyone interested in promoting
cope with them.
sight of this principle when we
a clear
Likewise, we haven't made
understanding of business
are satisfied to attend to our im¬
these voters understand that the The Rost-War Record of Business principles, I would like to quote
mediate jobs, giving no thought or
a
three-line definition which re¬
validity of a policy can be judged
Let's take a brief' look at the
effort to the basic project of tell¬
only by its long-range—not by its
cently came to my attention: ' v 7
ing the public what the free com¬ immediate—effect. The "shot-in- high spots of the record business
"The art of economics consists
has made, in this first postwar
petitive system is, how it works, the-arm"
psychology produced by year, in the light of some of the
in looking not merely at the
and why it is the only system of
carefully timed deficit spending dire
immediate, but at the longer ef¬
prophecies made by Wash¬
making a living which offers op¬ is a
big help in keeping politicians
fects of any act or policy; it
ington sages in their efforts to re¬
portunity for both material prog¬ in
office, but the whole country tain their wartime controls in¬
consists in tracing the conse¬
ress and personal freedom.
suffers eventually from the result¬
quences of that policy not mere¬
definitely.
If we are satisfied only to go on
ing hangover. Why has business
ly for one group, but* for all
According to these gentlemen,
making and selling things, in the made suclT an outstanding failure
groups."
we are going to have from eight
we are more
tional
Bill of
not
the
conviction
short-range view of im¬
mediate postwar problems.
\
Their forecast was for a
sharp
deflation'
immediately after V-J
Day, and for a quick drop in na¬
than
more
and which have been reflected in
there,
took the
haven't
employed, including veterans
drawing allowances under the GI
change public attitudes toward
and skills
be
locate
to
about two arid
the free
job-making machinery works a. little more than a -year after a
and what determines prices- they smashing
military victory was
have fallen easy victims to the op¬ achieved
through American pr6portunist school of pseudo-eco¬ duction and organisation* submit¬
nomists, who dress up attractive ting tamely to the same old push¬
theories With magnificent disre¬
ing around by the same old bogusgard for facts and figures.
economics crowd who are still de¬
can
A Rule-or-Ruin
last, business and
the
shrewdness of the average Ameri¬
icy has earned-for them.
At long
continuous
of the state and the stifling of in¬
statisticians
swiftly, with the minimum of dis¬
dustrial leaders are awakening to
the
the welfare
cooperation for the hard road
ahead.
has made
that
found business without
organized plan on a scale nec¬
essary to re-win public confidence
an
This may seem a gloomy and
exaggerated view, but we are liv¬
ing in an era characterized by the
We have far too often overlooked
fact
h otvever,
and
able
impressive
industry a chance to
again perform its miracles of pro¬
mon to their aid the investors and
Chronicle," 25- Park Place, New
duction, the same curious blind¬
property owners of this nation. York
8, N. Y, Identity of the cor¬ ness kept business : leaders' from
Properly aroused, they have a col¬
fully informing the nation of their
lective strength which can restore respondent wilt; if requested, not
achievements. To be sure, the
be revealed.) W/0-pyour economy to a state of health.
years saw outstanding individual
examples of effective institutional
advertising. The end of hostilities,
The Battle of Industry
been
What
Voting of American citizens.
Letters uaisv
by
supinely if. not com¬
should be addressed to Editor,
placently. We of the securities
industry can help. We can sum¬ "Commercial a n d F inane l a 1
government
Our free competitive system has
hold and increase
proved that it can make the jobs.
over the thinking and
the public from
merits on the proposals advanced
blaming the whole capitalistic
by Mf. CabelFor On any related system for the errors of individphases
and the most assiduous efforts of
if they
their power
and
2239
-
In
the
light of this
definition,
rises
of
of
made
a
early
were
wages
in
these
airi'ounts
in
permanent part
1946 as well.
several
aver¬
advances
the
aggregate to
proximately 37^2%.
Cotton
The
Spinning for Sept.
Bureau
nounced
ap¬
on
of the
Oct.
21
Census
an¬
that, accord¬
ing to preliminary figures, 23,876,286 cotton spindles were iri place
in
the United States on Sept. 30,
1946, of which 21,638,738 were in
operation the last working day of
the month, compared with 21,463,133 in August, 1946, and 21,359,866 in September, 1945.
The ag¬
gregate number of active cotton
spindle hours reported for the
month was 9,037,485,750, an aver¬
age of 379 per spindle in place,
compared with 9,448,813,582 an'average of 396 per spindle in place
for August, 1946, and 8,368,963,824,
an
average of 352 per spindle in
place for September, 1945. Based
on
an
activity of 80 hours per
week,
cotton
spindles
in
the
United States
were
operated dur¬
it is easy to attribute the present
ing September at 114.4% capacity.
inflated
price
The percent on
guessing
on
situation
to
the part of the
bad
so-
called government economists who
basis
was
the
same
activity
112.4 for August, 1946,
and 111.8 for September,
1945.
*
THE COMMERCIAL & FINANCIAL CHRONICLE
2240
that, whereas it had been reported chasing power for 20
years. We
that property was
selling for five would borrow money for a while
The Road "to Abundance
(Continued from page 2212)
1
How
-1
could
JO
AT~
^
in itself. The safe planned? No one knew in 1849
about airplanes, radios, automo¬
experience was aban¬
doned for paper schemes. Some biles, central station electric cur¬
sort
of
planned economy, part rent, telephones, the open hearth
and Bessemer processes for mak¬
socialized and part private enter¬
ing steel, a practical process for
prise, the latter rigidly controlled
aluminum, thousands
to bend to the will of the all-wise producing
thing
wrong
road
of
planners, is one substitute
for the American system,
offered
a
sys¬
produced the high¬
living the world
known. We need to look
tem which has
est
has
ever
of
standard
critically
unproved
plan which is
any
on
changes
may
results.
larger
units have evolved
taken
can
one
no
of
to
our
,
Let us
-
The
because that is what it has
when
slight
a
compounds and a host of other
things that comprise much of our
business today.
provide abundance. We liked
larger business
enterprises
they helped to make Amer¬
change. Major
have devastating ica the Arsenal of Democracy.
We couldn't have been the Arsenal
because
foresee all of the consequences
even
synthetic. chemical
the newer
of
begin by saying that our
system is not perfect and it never
will be. You will have an oppor¬
tunity to improve it, and you will
improve it as the years go by.
But it does represent the tem¬
end point of thousands of
of experience. It has been
changing rapidly during the last
hundred
years.
These
changes
have been mostly evolutionary, as
porary
years
of
times what it
such'progress1Q/1Q1 other facilities to give one person
be! a
—
Democracy
without
large
our
mass-producing units;
nor • our
m a s s-producing
k n 6 w - h 0 w.
Neither could we have been the
Arsenal
of
Democracy
without
small business. When big business
prospers, small business does also.
In depressions they both suffer.
Large business is the best custo¬
mer
of many small enterprises.
We couldn't be America without
both large and
better
large
should be. Changes for the
can
go on indefinitely if
we
analyze accurately and act
wisely.
But we should not forget
that the system can be changed to
the point of complete ruination if
surely
separate businesses.
broader sense there are about
running
are
In
who
farmers
of
millions
a
75,000,000 separate businesses here
because each person with money
he pleases runs a busi¬
These people de¬
termine what shall be made, and
how much, and at what times, and
who can remain in business, and
what businesses shall grow and
at what rate. Even a child soon
to
spend
of hi»
ness
own.
learns, or did in my time, to buy
at a store where he can get six
for a cent if other
five. He also must
jelly beans
stores give
choose
between
he has
a
five
or
six
jelly
stick of gum. Maybe
beans and a
yen
for
mouth organ
until he has
Or maybe he
a
and is willing to save
enough to buy one.
likes the feel which the
possession
gives him and he puts
in a savings bank. In any
of money
some
case,
When
he is part of our economy.
he
is a
little older, he
spends or saves -n i c k e l s and
quarters and still later he deals
in larger amounts. Regardless of
the amounts, the.' principles are
the same. The lesson here is that
the customers determine the mag¬
nitude and variety and distribu¬
tion of our business. Of course,
it is considered fair game to try
to, influence the potential buyers,
but I shall not dwell further on
,
this.
■
^0
Big Business Does Not Hamper
Development
j
It is
is held back because
America
in
big business
enterprises. Holding back reminds
one of the way China attacked
Japan. China hit Japan in the
have
we
...
charged that advancement
with
fist
too
many
her
Hoyr did our
eye.
business come about? Cer¬
tainly it was not planned this way.
Our
business
structure evolved
under a set of laws and rules. No
big
person
could
a
nor
of persons
any group
have
structure
planned
as
we
so
now
complex
have. Too
between
business.
big and small
experts on the
so-called
Some
subject who talk a lot about it
say anything over $500,000 sales
have result¬
ed only in limitations. In 1849 the
investment in the average plant
practically
was
horsepower
each
6.4
worker
no
is
year
big
had
at
his disposal
horsepower. *
it
job in industry. In order for our
to be healthy, industry We all know how that boom col¬ carded
but
they were thickly
grow, mechanism must be lapsed. People were buying Flor¬ smeared.
^
i
r,
ida property for no other reason
more, not less, and capital must
When things didn't work out as
be fed into the system continu¬ than to sell to some one else at
planned, still other things were
ously and in large amounts. To a handsome profit. This condition
tried., Little pigs were killed to
induce this capital to go to work, in itself should have warned peo¬
raise the price of hogs, corn and;
the promise of profits must
be ple that the structure was built on cotton
crops were
partially1
J
commensurate with the risks in¬ sand.
plowed under, farmers were paid!
volved.
<
The same general situation de¬
by the Federal Government for
veloped in the stock market in not raising pigs, not
Wages and Prices Must
planting corn,
1928 and 1929. The public
Balance with Profits
bought wheats etc.
Various
kinds
of
There are two other factors that stocks, not to hold for income, subsidies were created to provide
but solely to sell to others for a
what was termed "a gentle rain
must be delicately balanced with
the profits. These are wages and hoped-for big profit. Good busi¬ of checks" all over the country.
ness health was mistaken for im¬
Government agencies and relief
prices. When profits are too low,
mortality. Investment trusts were operated to take around a million
capital ceases to go to work and
formed and they bid up stocks
domestic workers out of homes.
our system
goes relatively down
too high by competing ::
hill. If wages are too low, there already
Prosperity, however, didn't re¬
with one another and with the
is not enough purchasing power
turn. In the past the United States
public. Large sums were borrowed
to buy the products and services
had nearly always led the world
to put into the stock market and
of industry, and the workers may
out of depressions but this time
to help feed the flames, some
lack incentive to put forth their
at least 17 other countries showed
corporations placed cash in the
best efforts.
If
wages
are
too
more
rapid recovery. We had £
call market. Buyers paid from 8
high, prices may be forced so
around 10,000,000 or more unemto
12% on call money to buy
high that the consumers will not
ployed at all times. We haven't
stocks that wereF then earning as
buy in sufficient volume to keep
even
yet balanced our national
low' as 1 % on their selling prices.
the workers employed. If prices
budget in spite of many promises
People bought everything up to
are too high, certainly the volume
to
do
so.
Our
national
debt
houses and yachts on their paper
of goods will be low and, after all,
mounted to staggering figures.
profits and then their paper prof¬
it is the quantity of goods and
This calls to mind the story ot
its not only were not realized but
economy
the approaching winter in Alaska
that this struc¬ while the Alcan highway was be«*
ture collapsed also? Is it surpris¬ ing constructed. To prepare for
the winter, many workers were
ing that the collapse brought in
its wake the terrible dislocations diverted from road building to
of the early 1930's? Is it not prob¬ cut wood. Progress in road build-*
able that timely adjustments in ing was so impaired that the boss*
desiring to not overdo the wood '
wages, salaries and prices would
have prevented the last stages of cutting job, sought expert advice
on the probable severity of the^:
the
stock
market
boom
and,
from the path, either it must be
hence, the intolerable, abuse of coming winter. He was eventually
brought back into .line or the
led
to
an
old Indian with at
credit?
others must be adjusted to restore
record as a weatherr
The depression following the splendid
health. The recent
attempt to
prophet. Said he to the Indian*
control prices without controlling collapse was so deep and long
"Will it be a short, warm winter
that there was a tendency to dis¬
wages has already had its near
credit the American system. Peo¬ or a long, cold winter?"
they turned into large real losses.
Is it any wonder
,
which is co-existent with the in¬
business.
through many depressions. There
largest business in this creased power {of the Federal is no
proof that we c&n advance
country is the government, and it Government.
over
long periods except by a
promises to remain so as far
stepped process consisting of ups
Industrial Phases in Last
ahead as we can see. The smallest
and downs. The good times are
Two Decades
businesses are most of the 75,always abused in one way or an¬
Let us try briefly to
outline other and
000,000:individuals mentioned
depressions have been
earlier, In other words, the larg¬ some of the high spots of each
salutary purges serving to cor¬
est is the people collectively and of these phases. Business manage¬
rect abuses, to show us that there
the smallest, the people individ¬ ment was short-sighted during the
is no easy way and to test the
ually. So let us not deceive our¬ late stages of the prosperous
strength of our institutions and
selves into thinking we could be 1920's. The depression could prob¬
our
system. New upward surges
the America we are, or the Amer¬ ably not have been prevented by
have carried us to new heights
ica we hope to be without a wide anything management could have
and over a long period there has
range in the sizes of the business done because it was world-wide been
great progress. On the con¬
and because the people can't stand
units.
trary, there is no record in his¬
The Profit Motive
prosperity for a long period any¬
tory
of
continuous
prosperity.
It seems strange, in view of the way without abusing it. But, in
Furthermore, the old time depres¬
my opinion, the severity of
the sion was
record, that profits must be justi¬
pretty well understood
fied or defended. Ours is a profit depression could have been and it was known that a
depres¬
greatly softened if, say, in 1927, sion set the
system, or as some one has said,
stage for better times,
1928 and 1929 wages and salaries
a
hope of profit system. Com¬
much as the abuses in a period of
panies are formed for the purpose had been increased and prices re¬ prosperity set the stage for de¬
of making profits. If profits are duced. Profits were relatively too
pression. Even so, we don't like
Increased wages and sal¬
not made a business must fold up. high.
depressions and one of the major
Only
the
profitable
companies aries and reduced prices would future problems is to find ways
The
survive
and
the
survivors
are
few in
mechanical potentiality for profit. Profits are
in 1849, hut in 1939
that
was
or $500,000 investment
business. If so, then we
couldn't have low price pig iron, disastrous results.
ple did not blame themselves for
In your lifetime you have wit¬
one of our most basic commodities,
their follies but were, in general,
three
without having big business. If a nessed
very
interesting
willing to find some one else or
blast furnace these days has a phases in the industrial history
something else to blame. The
capacity of much less than 1,000 of the United States. The first was finest automobile can be
brought
tons of pig iron a day, it can't the late 1920's and the early 1930's
to a dead stop by cutting one wire.
compete in cost.; Even at: prewar when I We 4 enjoyed ■ the greatest If its trouble is accurately ana¬
prosperity * this or any country
prices, this is over $6,000,000
lyzed and the proper steps taken,
had ever seen, and suffered our
year.
A large locomotive or
the car can be readily repaired.
large turbine can't be built at all greatest depression. The second
If, however, the diagnosis of the
without
massive and
expensive phase was the acquisition and ad¬
trouble is wrong,
the car may
equipment. Nor could we have ministration of great power by our be
partially wrecked in trying to
hundreds of everyday items in the Federal Government. This began
correct non-existent troubles.. The
quantities they are consumed if in the early 1930's and is still with same is true of our
economy*
we did riot have mass production.
us. The third phase is the rise of
There is little doubt that in the
It
is ridiculous to assume
that labor unions to such power that
middle 1920's we had the most
we
could enjoy such things as they can turn on and shut off the
healthy economy in history. The
railroads, telephones, automobiles, production and services of the fact
that we were headed for a
as
an
individual
can
radios, refrigerators, electrical en¬ country
depression in the early thirties
a
water faucet. We shouldn't in itself have caused
ergy, etc., on any other basis. We manipulate
must have both large and small are now in the union power stage,
undue
alarm.
We
had
been
per
comparison to the ones that
fall by the wayside. It is only in
this way that efficiency is main¬
tained. It is only in this way that
was
$4,000 and there were eight
we
can
be
sure
that business
workers per plant. In 1939—ninety
serves
the public. Fortunately, a
years later—the average invest¬
concern can't make profits over a
ment per plant was $270,000 and
the number of workers was 35. long period without rendering val¬
uable service. Also, the more val¬
Each worker earned 4V2 times as
uable the service, the more is the
much in 1939 as in 1849. There
much planning would
was
worth, my opin¬ and then pay it back with the
was
selling for profits created by its spending.
only four times what it was worth. The old ways were not
only dis¬
ion
must
small business. All
business was once small
consumed
that
and many small businesses are services
deter¬
striving to be large and some will mines the standard of living. Also,
if prices are too high, there may
succeed. This also is America.
A short time ago a certain com¬ be temporary increases in profits,
we are sufficiently unwise.
leading to unhealthy stock market
pany observed its twenty-fifth an¬
There are around 2,000,000 sep¬
booms. Therefore, a healthy econ¬
niversary. In 1921 it was but an
arate business enterprises in the
ambitious group of three persons. omy demands fair profits, fair
United States. Many of these are In 1945 it had sales of around wages and fair prices. The fair
one man affairs, but that is Amer¬
$50,000,000—definitely big busi¬ patn is straight and narrow, When
ica. This figure does not include
any one of these factors deviates
ness. But there is no dividing line
they
Thursday, October 31, 1946
the
rightful wages of capital.
More
than $6,000 capital
quired to provide the
is re¬
plant and
have
caused
physical
which
real
an
given
of
have
standard
have
of
more
the
production,
increased
living,
the
would
employment—
index of business health—and
would have removed
causes
Florida
boom.
of the
some
of the stock market boom.
About
my
in
increase
an
volume
would
1924
I
during
When
I
made
the
real
returned,
friends wanted
trip
a
my
to
estate
some
of
make
to
shorter
and
the early
In
1930's it
was
pro¬
to cure the depression by
methods. The Executive
posed
new
branch
charge
of
our
took
government
of legislation for a time.
Federal power was immensely in¬
creased.. Bureaus
were" formed
appraisal with law-making functions. There
were
the earlier reports of real
we
estate
to be jobs for every one
were
inflation had been exaggerated— which
to
have
a
new
Boss:
"Long, cold winter/-
"Are you sure?"
.
Indian:
"Very sure."
"How
Boss:
"The
Indian:
"What
Boss:
do you
signs."
are
"White
Indian:
<
know?'*"
;
the signs?'?
chop*
man
much wood."
Some of the prophecies on the?
debt must have been as
national
profound as that of the Indian*
example, it was prophesied
that a national debt of $55,000,^
For
-
would still be safe, but
the danger point. At that
000,000
near
seemed
it
time
tain
that
new
reasonably cer¬
borrowing up to
$50,000,000,000 would be neces¬
sary, but that it would not be nec¬
essary to go beyond $55,000,000,000 and hence the
latter
the
"prophecy" that
was still safe*
the people were
figure
minds
The
of
thus conditioned for the new loan>
to
be announced somewhat later.
Only the defense program and the
war
brought back full employ¬
ment
"seeming"
and
prosperity,
"seeming" prosperity be¬
cause it was generated entirely or*
vast borrowing out of all propor¬
tion to anything heretofore
dreamed of. We have yet to paw
1 call it
'
debt.
the
'
Unions Have Become
Too
During the
Labor
Act
then the
\
J
1
Powerful
1930's the Wagnef"
passed and since-
was
unions have become toe-
for the good of labor,,
or' for
the
country*. 4
Union leaders are in a position to
demand and receive more than a
powerful
industry
fair
wage
have,
for the workers. They
the
wage-price-
thrown
profit relationship out of balance*
less
Our
economy
is now sick.' Al¬
though
this partly caused by >
Attempts to Cure 1930 Depression
of that situation. I told them that
v
them
devastating.
Indian:
'
government controls, we can see
an end to these and with the en<$ >
is the hope
control
to
But
has
no
been
of the
that the troubles due
be taken care of*.
can
significant legislation
passed to correct some
glaring deficiencies of the
Wagner Act under the protection:
of which the unions are operat¬
ing. A union can call a strike
and which would shut off the lights
in the middle of a critical surgical
dollar
>vould not change in: pur¬ operation. A, union can do
vio-
*•'* '''.• il•'
...nunawwix*• f >f.
THE COMMERCIAL & FINANCIAL
CHRONICLE
lence
to
or'
farmer
a
Laws have been
.
!
years to prevent
forming monopolies.
recently as 1935 a law
business from
Yet,
as
enacted
was
makes
effect,
in
which,
labor monopoly legal. It-
a
has been against the law for more
than
fifty
business
for
years
and
un-American
the
•
ele¬
surance, would
•' real purchasing
••
Our System Is Sound
market.;
be
decreased
power.
in
Sees Trend Toward
Also, the
higher the levels, the longer will
bring about the neces¬
sary adjustments,
it take to
the books for
on
than fifty
more
sible
his< ments; /i;
driving
of produce to
truck load
to
violence
threaten
peaceably
2241s
trials^and
The
of
tribulations
business during the past 15 years
have revealed
a
startling but wel¬
Our
-
Finally,
come
conclusion.
much
stronger and sounder than leges
even
the
optimists
weathered
has
is sands
system
thought.
the
most
It
severe
to
the
have hope be¬
yourselves and thou¬
you can
of
cause
more
trained
in
universities..
and
still
more
our
and
(Continued from
thousands
that
will follow from year to year.
tendency
another
sound
sixty
the
An
restrained
be
can
it
days,
doom
of
for
well
may
fear
the
and
possibilities of outright inflation.
depression in a hundred or more individual
grows
old, becomes
can and
"While the trend of price is still
years; it even financed the de¬ weak
and
eventually
dies.
A
completely. It is
pression by borrowing and from business organization can grow upward, it is * not at the rate of
unions were too
the past few months, and indica¬
surplus to the extent of billions of old but retain its youth and
weak in the late 1920's, but there
vigor
dollars; it has been subjected to and it need not die of old age, tions are that prices may now
is no doubt at all that they are
level off for a few months, after
one
unsound measure after an¬
This is accomplished by bringing
too strong now. It is not good for
other;
it has
been prosecuted, in young people every year. You which declines may show up.
either labor or business to have
"Canadian reports indicate that
smeared
and
heavy taxes have are needed to help
keep the busi¬
too much power.
•
ceilings
are
still
been laid upon it—yet when the
holding
and
ness organizations yOung and vig¬
It is the experience of most em¬
price changes are negligible.
war came, it performed the great¬
orous.
You have great opportun¬
ployers that over 90% of the est production and engineering
"West Coast buyers report prices
ities ;but : also great responsibil¬
workers want to be fair, want to
continue to rise in that area, but
miracles
of all time.
In many ities. Each of
you is more, much
Work and are loyal citizens. Many
ways
it
strengthened
itself more, than one two- billionth of they are of the opinion that more
of their leaders, however, do not
and
more
opposition to higher
through adversity. We have bet¬ the world manpower.
You are
truly represent them. I quote ; a ter prOoi* today of the funda¬
prices is developing.
among the select few and you
recent
statement
by
the: FBI mental soundness of the principles
can ana will exert great influence
Inventories
Chief, J. Edgar Hoover: "The av¬ on which our American economy
in providing better industrial soil
erage American workman is loyal, has been built than at
"Reports received indicate a
any time and environment."
<.
j
patriotic
and
law-abiding.
He in history. We have found that it
slight (but very slight) drop in
•Wants security for his family and
the over-all inventory situation.
does not depend for its life on any
Limself. But in some unions the
Deliveries are not improving, and
kind of special favor. It does not
rank and file find themselves beinability to get suitable deliveries
depend on any political party.
It
restrain trade. Yet unions
,
2207)
page
col¬
Yes,
Better Business Halted
do
stop trade
probable that
M feet.
per
"A
rise of
10% is reported for
goods. Some higher priced
textiles are somewhat easier.
« •
"Electrical
equipment
is
up
cotton
12% to 15%; batteries, up
5%; in¬
sulators, 5%; and large mechanical
equipment, generally up 9%.
"Paper continues to be very
tight.
"Ceilings
coated
such
have
as
1
"Acetone,
castor
and
butyl
ash,
caustic
«
tfcween
communist
a
pincers, must function whether the Demo*
manipulated by a few leaders who crats or
Republicans are in office.
ihave hoodwinked and browbeaten
Even a strong and healthy tree
them into submission.
The
must have the proper soil to har¬
Communist party in this country
bor its complex and delicate root
is not working for the general
system, and it must have water
.
.
.
Welfare of all our people.
It
knows no rules of decency.
its unprincipled converts would
.
.
.
.
sell
.
.
America
short if it would
help their cause of furthering an
alien way of life, conceived in
darkness and motivated by greed
for power, whose ultimate aim is
the destruction of our cherished
Pittsburgh Bond Club
To Hold Meeting
The union leaders
have
been responsible for our high
pro¬
duction. We had high production
before they became
soda
and phenol are
higher in the chem¬
oil;'is very
all .reported
tends
now
scarce,
the hard
know the way to
we
abundance.
It
has
been
evolved
and it has taken
way
a
long time.
ous
It involves the gener¬
of science and engineer¬
use
ing,
an
per
worker,
investment of
wise
management
for each
$6,000
over
and
efficient
many
and
failures
It requires mil¬
lions of workers with many skills,
There
success.
should
be
incentives
for
reduce
quality,
the
to
the
business
must
be
done
at
a
profit.
Business Needs Proper Soil and
Environment
much
know
we
that
are
to
soon
tant part.
take
Can
impor¬
face the future
a
you
First,
can.
the
fact
There
and
on
that
are
the
we
plus
won
many
new
technological
side,
the
is
war.
products
improvements.
Our plants are intact and we have
all the ingredients for a great ad¬
vance in the standard of
living if
we
can
only
bring
the
needs
proper
vast
for production.
leaders
realize
fundamental
labor and
ployer
all.
Also,
our
that
a
there
between
or
employee—that
team
These
of
is
that
labor
curbing
no
between
em¬
they
build
can
leaders
It
friendly and helpful gov¬
ernment—a government that be¬
needs
John R.
Kliim
G. Clifford Bodell
a
the
as
will
one
irrespon¬
and
China.
Oil
to
arrivals from
lower, du$
are
China.
/
"Cast iron scrap is up $5.00 per
ton;
gross
malleable
scrap,
$2.00:
ton.
gross
per
ago.
'
s
'
i
.
»
"Employment in the Pittsburgh
was drastically reduced, due
"Many buyers report that in¬
to the effect of the power strike.
ventory reduction is their number
; "In general, the critical labor
one
problem, and is receiving
shortage has not yet been satismajor attention.
"In this connection, it is inter- fied/Tn most areas, there are very
dating back
only needs to be balanced but
of the
enterprise. -Otherwise pri¬
enterprise and individuals
must
carry
the whole tax burden
and there is grave
danger that
they can't stand up under | the
load. We can't operate long, half
government and half private.
We
operate
can
best,
throughout history
private basis.
Given
have
what
proves,
to
be
strong
no
put in its
the
wages,
way.
You
delicate
can
balance
a
can
will
matter
may
profits and prices will be
trend
too
our
in
following
the dinner and entertainment.
made.
being
are
Tho
itrnrlr
4/\
want
The
work.
to
for
more
rlrvmov^rl
demand
than
skilled
for
"ICS1
is
un¬
and learn how very
cancellations
situation
back-order
this
serious
really is.
Policy
Buying
■
industrial
buyers is more and more one of
caution. A (general policy would
"The buying policy of
seem
to be about
three months'
a
with variations in dif¬
the goal being to
try to keep inventories in balance
with
demand, supply and de¬
position,
ferent
items,
of the committee in charge of the
event?:';.vg-;S;^>- %
;>•£
#
A. G. Heim
Heim is
business
Ninth
Opens
"Many
forward
G.
engaging in the securities
from
Avenue.
offices
In
the
at
1390
Heim
was
connected
past
Swane.y & Co.
with
Mr.
Lynn
acceleration
other
of
decontrol
of
products, has sparked con¬
siderable optimism. This Speed¬
ing up of decontrols, buyers be¬
lieve, will expedite the reconver¬
sion of the material and 'supplymarkets from their wartime basis.
It may
result in a flurry of higher
prices, but these should bring out
higher production, and, the resist¬
ance of consumers to higher prices
should result in stabilization at a
somewhat lower level."
deferring
buyers
are
commitments
1947
for
the first quarter, await¬
clarification of the situation.
Nat'l Rockland Bank
beyond
ing
a
Opens Bond Dept.
Specific Commodity Changes
constant change in
"The
though
necessary,i even
no-
restriction
on
the
there
MASS.—The ] Na¬
BOSTON,
com?
is
tional
announced
has
a
Rockland Bank of Boston
bond
State
formation of
the
department
to
deal
municipal bonds.
and
in
The
main office of the bank is located
at 30
Congress Street.
of the
use
desired,, ^materials. Little improve^
ment
is
expected
are
balanced
IO W A.»—August
recent
liveries.
terials
MARION,
;
action of #the gov¬
ernment in the decontrol of meat
"The
Many vendors may be in for quite
a
surprise as they receive such and
"In
in
a
John H. Campbell,
midst ]
of
advancing
prices one item, fuel oil, is lower.
No.
6 Grade fuel oil has been re¬
duced HH&c per
mills
has
advanced
Jr., is conduct¬
ing an investment business under
firm
the
from
ing.
barrel.
"Spruce lumber from the Can¬
adian
CHARLESTON, W. VA.—
more
supply.
the
Campbell Co.
until raw ma¬
produced
wages
far, because
past savings, including life in¬
vei^ Jaw remaining unemployed who
modity prices and situations con¬
John
R. Klima,
Johnson and tinues to make more difficult the
Company, Chairman; G. Clifford smooth
operation of industrial bus¬
Bodell, Young and Company; Jo¬
iness. Frequently, substitutions are
seph Buffington, Jr., Young and
among
other proved road to abun¬
dance.
It would be a pity if the
upward
prices goes
usual facilities for cards
be sure
no
and
will be given; There
will be a reception at 6 p.m. fol¬
lowed by dinner at 7, and the
be
found and followed because there
is
Door prizes
Company, and Franklin Maroney,
Blair and Company, are members
*
things you
that this system
temporary obstacles
that
on
;,
these
faith
continue
experience
as
'
months, when coming 'buyers' market.'
many
deliveries
no
government debt
vate
(*
being checked; and, those of long
General
standing are. either, being can¬
"In the sense that there is a
celed outright; or, as; soon as trav¬
eling: expediters lpcate the mate¬ good demand, business generally
rial or supplies elsewhere for near¬ may be said to be good. The pic¬
by delivery, the order is canceled; ture,' however, is clouded by gen¬
There appears little value to the eral disappointment in. production
purchasing department in having and the tendency to price infla¬
orders on so-called standard items tion.
There is much talk; of a
stay put for a while.
They need to be so clearly stated
that at least TaWyers and courts
should be retired from the income
■
skilled.
and rules that
be
:*'V
*
but umpires. It needs to have laws
should
shipment.
esting to note the policy of a
government that does not manage
not
time ' of
at
large buyer in one of our major
industries.
Every open order is
lieves in the American system—a
current
welcome better labor laws
means
labor
many
conflict
capital
and
constitute
for
use
facilities and know-how
Brazil
from
area
laws and rules, in¬
cluding those relating to labor.
essential
elements into balance and
piles at
;
good, for business too. It needs
proper soil and environment. It
more
with hope? Notwithstanding what
I have said, I feel certain that you
inventories.
balance
or
prevailing
is
system work, ef¬
reduction—not
more
increases.
fectively, the wages should be as The
Jos. Buffington, Jr.
budget should be balanced at
high as possible, consistent with
a level low enough to avoid backadequate profits and fair prices.
members of the Bond Club who
breaking taxes. This can only be
Increases
in
wages
beyond the
were in the Armed Forces during
accomplished by greatly reducing
fair figure
must necessarily be
the late war.
President Stephen
government expense,
reflected in higher prices, which
W. Steinecke, S. K. Cunningham
We don't want too much gov¬
may lead to unwelcome and well
and Company, Inc., will preside
known damage to our economy. ernment in business. Government and Howard E.
Reed, State Di¬
We have now experienced such competition with,.private enters rector of the Bank and Invest¬
prise should be kept to a mini¬
damage and the end seems to be
ment Division, United States Bond
mum and where it is authorized
not in sight.
Where arid when it
Division, will act as toastmaster,
some
special reason, taxes and the
will stop, no one can tell for the for
boys who were in the
should be paid by the competing
power to do damage is great and
service will be given an oppor¬
unit the same as if it were private.
many of the union leaders are ir¬
tunity to tell some of their ex¬
responsible and others have un- Also, the competing unit should periences—amusing or otherwise.
be required to pay the interest on
American objectives.
There will also
be professional
the invested money and the debt
Such is the world in
musical and vocal entertainment.
which you
exports
of cassia and anise
•
Well,
there
To make this
in
unbalance
to
stock
limited
.
can understand what they mean.
forth his best Not
only do we want the right laws,
must be ac¬ but we want
government by law
customers as to
and not by men.
We need sound
and. price, and
governmental finance. The budget
service
•
inventories
and
short. Menthol is stronger, due to
limited
'The machine tool industry re-^
tendency is accelerated be¬
ports more applications for work,
cause
higher prices are meeting
probably due to the fact that Win¬
resistance: for the first time since
ter is approaching. Unrest in the
the warPThere is also a very def¬
present labor situation: continues
inite policy of resistance to longto slow up production.
term commitments with the price
each worker to put
effort.
The output
ceptable
plants
Linseed
This
At
present they are interfering
With the great production ma¬
chine. Although many things are
to; * reduce
some
field.
butanol
chlorine, soda
PITTSBURGH, PA.—The Bond
i "Roller bearings are up 12% to
"Work-in-process inventories
Club of Pittsburgh will hold; a
20%, depending upon size.
are
becoming very difficult to
get-together dinner and smoker
\
Monday evening, Nov. 4, at the control, due to the short supply
Employment
and sunshine and the ingredients University Club, in honor of the of many items necessary to the
"The gain in employment in the
completion of the finished prod¬
of the air; No one would expect a
industrial field is slowing down.
uct. Little change in this picture
tree to thrive if it were trans¬
There is a slight increase in the
is expected for the balance of this
planted every -few months with
number of reports showing lower
year, at least.
perhaps the frantic hope that one
employment. Generally; the pic¬
"Industrial buyers are practic¬
of the transplantings would pro¬
ture is about the same as a month
duce magic results.
ally unanimous in their desire to
No one sug¬
powerful.
as
.
them in - others.
gests that we deprive a tree of
water, light and air to promote
health.
Why? Because we think
not we know what is good for a tree.
freedom."
,
oil,
acetate,
j
ical,
on
Rubber
goods,
belting and hose, have ad¬
vanced.
;
increased
abrasives.
a
name
offices
in
of
Campbell
Co.
the Union Build¬
Mr. Campbell was formerly
partner
in
$4.00 michael & Co.
Campbell,
Car-
2242
.THE COMMERCIAL & FINANCIAL CHRONICLE
Thursday, October 31, 1946
actual; movement
Post-Wdf Rde of Business lnventories
(Continued from
this
of
page 2204).
has been the
movement
subject Of conjectiire and concern
as to its significance with regard
to
future
economic
tendencies.
Specifically,
basic
several
to the
8.)
liquidations a large volume of War
goods was transferred from busi¬
cumulation oii record tor any 12month period.
inventories.'
ness
ative to production
that
must
of demand
the
period (see Table 2).
place
over
of
measure
necessary to compare the in¬
ventory, accuriiulation of the past
with earlier experience and
to evaluate over-all inventory to¬
tals.
Table
(Billions
^
i
;
shows
that:
;■
<
Mfg.
W'sale
9.8
End of Month :
1939—August
1940—August
1941—August
1942—August
1943—August
5.0
11.3
3.7
4.9
_
13.9:
4.3
5.8
_
lt.4
4.3
7.7
17.6
3.9
18.2
19.0
6.6
_
_
4.0
17.3
16.2
3.7
24.0
29.4
.
28.1
27.8
6.5
3.8
16.3
,
26.6
0.5
A.4-
16.3 m:3.6:/:
dbdut
0
in 12
months, representing rin inCrease of 15%, was divided about
.equally between the manufactur¬
ing and distributive trades;
,
Gross
3rd
6.6
1945:
4.5
4.6
7.5
8.0
31.2
in
Business Inventories
Civilian
its
cburse
that
so
a
tlse >
4-6
Com¬
1946
Book
fcrross Change in BiiSihesS
'
inventories
bined
value
.
However, the net accumulation
of $4 billion, i.e., the change in
bpok value of inventories shown
by the firms' records, does not
of
total
inventories;-,
marked
the'
,
Beginning of period 26.8
of
End
26.4
28.8
acceleration
+2.4
+2.2
■
;
.
Net change
fstimatesiderived^from
; sources.
The
manufacturing
ddta; are
tased
on
reports
to • the
Department's
monthly "Industry Survey" by a represen¬
tative grb'up currently comprising over 2,500
.
detailed description of the
method'used; see this "Survey" September,
J.940.
Tbe. .data on wholesale inventories
> firms.
For
based
are
a
d sample of wholesale firms
on
reporting- monthly inventory Changes to
4he Bqreau of the Census; tests for repre¬
sentation and for reliability of estimates
were made by comparison with the Census
of Wholesale Trade for. 1935 and 1939;, all
wholesale establishments;,were, combined
into four homogeneous
for
each
of
which
groups,
the sample
provided fairly reliable
results on
the basis of the Census move¬
ment frorii 1935. to 1930; the Census value
inventories
on
for
Jhas
1939
been
8,005
7,761
4,336
4,846
7,726
8,149
4,985
4,441
7,189
5,201
17,574
.6,641;
5,809
7,185
7,324
5,133
17,677
17,3,04
5,162
17,206
7,604
5,510
16,937
3.0
•
change
+
1.5
4.5
2.8
+ 3.9
4 8.7
t Exclude s:iriventorles
retained
or
/
;
7,174
8,141
4,996
7,835
7,744
4,909
7,907
7,481
4,932
9.027,
7,910
7,445.
4,741
7,444
16,378
8,760
9,751
8,564
3,923
5,681
16,288
7*908
3,344
5,569
16,369
7,938
2,791
5,372
16,590
3,619
4,010
5,888
16,829 ;
5,946
16,837
8,422
4,089
5,989
8,545
4,041
5,661:
4,303
5,729
16,934 ;,
17,175
18,026
4,805
6,416
18,430
9,275
9,604
8/913 /
JLL'j&ZJ 8,163*'
9,507
^ June :iiLLL.;a" '9,702:
;\'July
10,032
Aug.
11,221
>Ihventoriei fQr l939-44
the
of
as
7,618
.7,366
4,793
4,751
4,495,
7,416
7,353
4,393
7,800
.
7,507
8,380
7,940
8,431
;7,975
3,563
8,082
8,508
8.043
3,648
8,452
8,073
-
4,204
3,550
•8,37,7
3,852
,
4,517
4,421
4,653
end
of
each
;
.
4,798
4,|ii
'
4,899
8,415
8,107
3,904
4,904
4,826
' 6,389
8,003
4,013.
4,918
8 ,'777
8,398
9,015
'
are
4,651
-
-
<
•.Mar.._'L——_
y
4,534
4,500
9,469
9,299
9,703
16,167
16,364 :
'/'AprA Tiit: .9,956
May
10,058
of
trend,,
9,011
8,020
8,491
4,316
5,219
9,155
8,770
4,300
5,360
•
4,131
5,024
;arevl3-montkyAverages; inventorieV. foh'1945* And! 1946
quarter or month.
ished- goods was extreme, and not
-
of
•
tome^'gobdl
the
early
,
reached
on
overrall
ceiling
was
inventories because of
.actual
supply shortages. Critical
materials Were placed on an allo¬
cation .basis early in, 1942;. As a
offsetting; througK
v
/ :
matter^ of
Shipments
than in1
January 1942i
then 50% largeir
were
early 1942,
.
The significance of this adjust-?
ment should hot -be. lost * sight of ■
when viewing the present accu¬
mulationwhich stems from the:
same basic conditions, and must of
likewise
necessity be
character.
temporary
the
rfiariy
tributive
use
fact,
in manufacturing,
was
,
war
July 1945 to June 1946, therefore
considerably uriderstates the gross
change, or actual inventory ac¬
cumulation, which would be over
$5 billion.
The book value -of
manufacturers' inventories at the
re¬
purchased by contractors.
Includes an undetermihed amount of Inventory' held for
iri
supply contracts had been let
were beating the
and contractors
bushes
for materials
tion i for
in
large' war
prepara¬
production.
in
/ When
goods through productive and dis¬
channels again obtains,"
somewhat paraliel reductibh ia
a
inventories'can be
■■■f
■■
'
I
"
t
•••'".
^
*,
expected/"
*■;'?..
^
»
,
•'*...,
:; *'
■
®
Inventories by Degree of
inventories were excessive¬
Fabrication
y.
ly high in relation to shipments
qOntractorS book-value1 figures; The esti¬
mated
total
was
derived from reports
The internal composition of in¬
in, that initial war production
issued by the War and Navy Departments
end of August was $18.4 billion,
also : shifted
rapidly
period is evident from the; rapid ventories
on
the
inventory; turned over to.^ them
$500:ttoiUfoht abbvevtoe^Wartime drop which. occurred throughout during the 1939-46 period (SbS
through termination claims and are not,
peak reached in late 1943 when 1944 and up to June l945 while Chart 2).
therefore,/ strictly
comparable with the
The classification iil
figures ; taken from+business; Accounting
nearly half of the production total
fixed-fee management type con¬
tracts; some of Which did not appear in
use
,
records,
-
was
of
war
That
.
.
Chart
goods.
1
The great bulk of the liquida¬
tion
of
War
inventories in
busi¬
Viewed iri the perspective
the
historical
relation
of
s^M/;/MANUIACTUHERS^
of
carried
invei^toriss,
2
by; stages, of FABRICATION
inven¬
ness hiands took place in the year
tories
to sal£s, - the position
of
inventories
was
period July 1945 to June 1946. manufacturers'
During this period, the liquidation approximately in line with aggre¬
fey the sample for eacl+ of the groups.
amounted to $4.5 billion.
There¬ gate sales at the end of June,
Estimates
of retail
inventories
t^re per¬
haps somewhat less reliable than manu¬ fore, to secure a reported net in¬ while the distributors' inventories
facturers' and wholesales' because Of the
crease in book inventories in the
were still low,
In addition/ in¬
more limited availability of current data;
12 mbriths following July 1945, the ventories of both manufacturers
for details of sources
and methods see
this "Survey" March 1944, pp. 18-20. /•
gross! rise of inventories of goods and distributors were unbalanced
as to composition as will be evi¬
Chart 1
dent from the discussion which
MANUFACTURERS1 INVENTORIES" LIQUIDATED THROUGH WAR
follows. / While
manufacturers'
CONTRACT TERMINATION i/
shipments have risen since June,
the more rapid advance in inven¬
tories has,' in • the thirds 'quarter;
BILLIONS OF DOLLARS
raised manufacturers' stocks some¬
of
forward
8,938
9,848
.
Grdss
1 Thesd Sre
16,943
4,310
'
rise in manufacturers' stocks from
termination
11
during4 period t
represent all of the accumulation
';
r a
3,193
bottlenecks to present output arc
bvercomfe^^ehd A smooth /floyy'df ;
vilian
dated through coht
2,161 '
5,721
there was: com¬
paratively little increase in total
where the bulk Of the wart con¬ hnaqufacturing stocks after late
tracts was held. The billion dollar, 1942
by which time the bulk of
War inventories liqui;
->
1,679
4,545 >
5,888
5,971 i
Feb.
in
GoodjS
3,980
5,447
4th Quarter-
■
>
Fin;'.
•
5,316
5,794
7,292
■.
liquidation of war inventories by
the accumulation of stocks tor ci¬
y
;
movement
•
Most of
28.8
-.2
4,703
4.653
5,072
'
through distributive channels.
26.6
26.4
period
Quarter. 13,332
13,263
Quartern 10,519
1946:
or
,
•t"
.
in
Process
6,934 r. 6,480
discounting the effects of the' indicative bf, a/normal:or
peace¬
price rise of the summer months time
production period.
arid the resulting irregularity of
An
(Billions of dollars)
1945
.5,386
Goods
Mat'ls
13,414
3,934
2nd Quarter-
even
7rl2
2;80l v : 9,969
3,019
11,180
•
-v;;
Mfrs.
-
,
•TAriiiri AY'V
Change
'.'// for
rim
Mfrs.
3rd
had
,
Mfrs.
July Wa$ $1.3 billioh and in AU- •teache&a
p>eak:ihato^l94$,^f ully shipments were maintained at
gust. $ U billion, an average of 18. months
before the peak month peak levels.
With improved con¬
$1.2 billion per months M
of shipments.
The time lag. bef trols.and production in high gear,
precedentiy large annual' rate^qf' tween the
high point in inven¬ inventories were reduced by ihidover $14 biilion.
There has been tories and in shipments of fin¬ 1945 to the level of
28.8
30.1
4.8
17.2
-tfrar. iriventbries
Mfrs.
Raw
yy.y.
1st
quarter it is a negligi¬
ble factor.
The reported, or net
accumulation, is again a measure
of the dctual change.
The' rise in
;-26.7
12.0
of
Quarter- 12,486
4th Quarter- 13,114
i
thfe current
26.4
•
18.4
^
datioh
Quarteh 11,641
i2,3l8
1st
2nd Quarter.
By mid-year 6f 1946 the lidui-;
Retail Total
3.4
_
ah annual rate of
'
;
—12;390
•1944::-, -
for the first
$4 billion,
$8 billion.
2,463
5,407
^
Goods
3,849
1943
of Dollars)
_
.
business inventories
half year was over
Inventories
the
1944—August
book yalue of inventories held by
1945^-Jdne /lv.
manufacturers, wholesalers and
July
x
retailors was $31 billion at the 'A'.v August"/
1946—June
end of August of. this year, comJuly
pared with $27 billion a year ago.*
•August^
The net accuriiiilatlon of
$4 billion
1
1
Business
appraise the current position
is
into
5,482
•
able
Goods
"
::,\J v;.*
All Manufacturers—
Nondur-
aible
All
>,'
Mfrs.
' 7,783
—
Dur-
Goods
47414(0,939 ?
1940
1941
virtually Stopped by June
1946, it was a Continuing signifi¬
cant factor during the first half of
this year.
The" net increase of
$2.6 billion plus the $1.5 billion
required to offset the liquidation
meant that the gross increase in
Which
flowed
TABLE
of inventories, relative to sales it
year
extent to
the
1939
Nondur-
-
/.Goods
Mfrs. 1:
and had
inventories in the postwar period.
RCcoixL High
To
liquidation
All
.
facturing industries."; Though thd
liquidation movement reached a
peak late in 1945 (see Chart 1)
actually
The latter is the real
production
current
»•-/^rv-tifihhle.
and in the so-called "war" manu¬
net accumulation is the gross ac¬
cumulation.
Dur-
6f this took
place in the Second; halt of 1943
The value
of civilian goods offsetting
the
"war" goods liquidated, plus the
stops?
Business Inventories at
accumulation
net
a
took
come; after the pipelines
been filled and this source
have
1939-1916
.
The riiajb'r portion
accumulated aditibnal amounts sb
Is
recent rapid rate of inventory
accumulation. a
danger sigrial?
What
are; the
implications
of
changes in inventory policy which
.
Business firms
only replaced the total amount
of "war" goods liquidated bttt also
V the
■
Estimated V®luft„of,.S,hiiiments and Inventories ior All Manufacturers
(Millions pf DollatS)..-; v .^yy ^^,
Avg.' Mon thly Shipments
Avg. Inventories'1'
'
ques-
sales?
panded quite regularly from 1939
early months of 1945. (Tabid
Total inventories, however,
in
not
or
recession and then the impetus of
the war and war production; ex^
rei
in the civilian market was
v
,
ail stages of fabricatibri for use
aboiit
$7 billion. This is the largest ac¬
inventory
*
shinments.
since the end of the war.
As a
result of contract terminations and
of civilian goods which took place
tions have been asked in this con¬
nection.
What is the position of
the current inventory volume rel-
v
of
holdings.
Manufacturers'^
BtUIONS
OF
DOLLAflS
BILLIONS
OF
10
-
OOLLAfli
10
the basis of the changes shown
EN0 OF.MONTH
'
v
'
»
»■
t
-v.-
1.0
what
above
derived
level
indicated
the
from
the
past
sales-in-
Ventbry relationships.
Wartiine Relation of Maniifafc++
ttirers' Shipments
.8
-
'
to Inventories
To
appraise the significance of
this record level bf manufacturers'
inventories
in* relation
to
ship¬
ments it is bf interest to examine
the
pattern Of this relation since
During the 1939-46 period
1940
1939
1939.
.6
there
have
been
several
Sourc* of dat«;
|(94!
U( S. Departa«nt
distinct
of
Cocunarce.
inventory
movements, 4 a - faet the chart is nof'precise as an abmeasurl ; of
which prevents any uniform treat¬ solute
degree of
ment of the relationships which' fabrication. Hallier, it represents
existed: between
inventories
and
an
aggregation ^ffiridlvidual cbm-
designatidpk; Many com¬
ously; changes ift inventories are panies consider^; any purchased
manufacturers' shipments.;
associated: With
2
pany
as ;>ra^. materials irre¬
spective of the' amount bf process-
supplies
changes iri ship¬
ments/ though not always by apy;
fixed amount- or ratio: Obviously,
'also, inventory: changes anticipate
sales fluctuations •« to the extent
that it impossible to project;;them
with reasonable accuracy, though
hot always by the same> time lag;
f
A variety of factors such as
price .and material, controls op¬
erated throughout the war to in¬
fluence management decisions and
the ability to
carry them out, so
that
no
pattern is discernible
-
46-6it
1/ See footnote, table Z»
y Sources:
the U«
Obvi¬
S*
U; S.
\:y~::'
Department of Commerce,
War and Navy Departments*
-
hase<! iipoia (laid of
Which
consistent
with
•material
stocks
aboVe the War
to
af
peak.
poirit,;Weil
(See Table!
3
iy InvehtorieA bf
gbods-in-prpeess'
al§d iricfeased aS the
war
prbduc^
advariced. The high
the finished goods, of one
company point bf thfe* fito. hbwever, was ribt
reached riritil late in 1943, tome'
are often the raw material bf varibthbA 4 Thete i| rhbrg unifbrmity time after the peak in raw ma¬
within the
goodsf in-prbces§ cate¬ terials; The drbp Which charac¬
ihg whicH
may
|have beeri done—
gory,
but rib virdy of determining
hbw
elbsely
the
they .Approach
finished
stagb or whether the riltin¬
mate' market is thb Corisumef or
ariothbr manufacturer.
Haw material
increase
iri
iriitiatiori of the deferise
the
f
•
.hfMdingS begari to
fnid-I$40
with
the
program
prewar shipment-inventory rela¬ and reached a peak/at the end of
After
tionships.
period of relative
However, the shifting 1942.
importance of the more pertinent stability, they decliried uritil June
factors is clearly evident from the 1945, from which poirit they have
WaS
again risen quite Steadily.
The"
sharp rise of the past two months
carried the dollar value of rbw.
'
tiori progrbm
terized the Arid
6f the war pro¬
duction period began
and
continued
Until
iri late 1944'
the Arid bf
1945, reflecting the. liquidritidh bf;
war
inventories;
The Value bf.
work-in-process has risen steadily;
throughout 1946 as Civilian output;
has expanded, but the total is still
considerably Short of the 1943»
levels.
There
..•.
has
been
some
feeling.
lilts
Volui
ume 164
mulations
Number 4538
COMMERCIAL
THE
& FINANCIAL' CHRONICLE
(raw
materials
and
goods-inprocess) of durable manufacturers
durable goods can meet expecta¬
tion without disturbing sales of
the
in-process
tire 1939-46 period, work-in-proc¬
(Chart 4)
war¬
nondurable goods, the present in¬
rapid
were
ess
ventory position is not excessive.
to
are
involuntary,
certain extent
a
representing
which manufacturers
unable to complete as ship¬
ping stocks because
■
ponent
ing
was
that
reason¬
current
the
with
geared rather closely to
shipments.
The normal rate of
thought
than
shipments
when
sharply, and while this
bring
may
a
market,
only
limited degree.:
a
end
:
,
The rise in
,
goods-in-prOcess
since
the
year-
low
has been only about
$1
billion, or less than half the rise
in total inventories, and has not
J>een
more than could be expected
4 in face of the $2 billion increase
In shipments.
; v Finished
goOds stocks, in
iriarked contrast to the movement
of other types of
inventories, have
remained quite constant
through;but the entire period.
There*was
ia
slight increase early in 1942 re¬
flecting the finishing off of the
civilian, goods before production
.
; was prohibited! or curtailed, and a
rising tendency has been evident
since Jrinq 1945.
However; the
Aggregate is .now less than 20%
higher .than .the dollar value In
1939, or less than the average price
ri^e
over
this period.
Manufac¬
turer^ appear to be handling a
foliar volume .of;shipments 130%
above
1939; with shipping Stocks
which
undoubtedly represent a
lower physical
quantity of finish-
hd goods.
|
(
;
;
;.
"J
...
.
Ard Inventories Too* High?
f
still below the
are
increase in stocks is much slower
temporary rush of goods to
to
en¬
or com-
•it would also cut down stocks. To
some extent this is
true, but
'
the chart,
on
time peak and are considerably in
excess of requirements
based on
supply difficulties are
Adjusted, output and shipments of
^finished
goods
would
increase
;
relationship pictured
indicates that throughout the
part
This
a
missing.
continues
;
work-
'
§
The gross rate at which business
inventories, were; being ac¬
;
cumulated
in the year
following
VE-day, July 1945 to June 1946,
was
that
of
shipments, as the
slope of the regression line shows
-r-a rise of $2 billion in shipments
is
associated
with
an
increase
of
and
are
shipments.
However,
also relatively low,
are
expected to rise consider¬
ably as output reaches more nor¬
mal proportions.
In light of ex¬
less
than) one y billion )in inven¬ pected shipments, therefore, work¬
The July-August figures ing stocks are! riot too high, but
past thq extended time lag is marked.
The durable goods picture
experience.
is
Inventories of raw materials, on pointed up in the lower half of
the other hand, having achieved a Chart 4
relating to the transpor¬
new
peak, with shipments still tation equipment
industry, in¬
tories.
not out offline in light of
are
A
below the high, stand well above
the line of relationship shown oil
Shipments
have been held down by the dif¬
Chart 3.
ficulties of automobile production,
and a sharp rise from the levels
be
Manufacturers appear to
anticipating
level
a
ments equal to or
in
of
ship¬
excess
of the
wartime peak; in terms of present
hold true—lack of balance in in¬
ventories which prevents smooth
production is a big factor in the
present low output arid low- pro¬
ductivityof labor.r Apparently,
the* lag in production time be¬
tween raw materials and finished
goods haS been extended to allovr
In
nOhdurable
the
industries,
conversely, both inventories arid
shipments
ous
high—above previ¬
peak levels.
However, there
are
the
liquidated
.fast
inventories
war
as
(See Chart 5.)
In
the
.
lower
half
of .Chart
5
the
of
developed.
as
possible and to further
.Augment them to support the
; higher potential production.
This rise, however, has been
accented by an even more rapid
Goods Industries
in
the
tops parts of Chart
4 and 5. Combined
working stocks
Chart
amount.
There
methods
a
good part of the value
arises from cost of labor and
di¬
overhead
goods
goods
-
applicable to the
in - process
and
finished
which
may
not
have
changed
materially
over
the
period.
A third unknown is the
high
in
interval
converting
iriaterials
chased
into
pur¬
finished
shipments — the inventory
period. There is no way
to ascertain how much of the in¬
ventory was replaced during this
period.
From
the
standpoint of the
analysis of the current iriventory
position as related to shipments,
however, the price problem makes
.
little difference.
prices
Any increase in
affects inventories
Which
very
level
of
ured
objectively against sales.
However, the conditions are not
uniform and would
process
As pointed out above, distribu¬
inventories are below the
level of adequacy in view of pres¬
tive
ent sales.
The same holds true of
finished
goods
facturers.
stocks
The
lack
to price
Implications of the Recent
Accumulation
There
raised
are
quate—is
or
manu¬
balance
ther Increase
are
as
parts deficiencies
overcome,-. How much invent
tory will be added and in what
period of time
are imponderables;
certainly, the gap could be filled
rather quickly at the July-August
rate, but this pace is not expected
to continue.
The major problem
in
this
rise
connection
in
sales
the
concerns
which
must
accom^
pany the increased stocks if the
present over-all balsinde is to be
maintained.
*
In the rerilrii of economic sig¬
nificance,. the danger inherent in
a period
involving an increase iri
inventories is that it leads almost
ihevitably to a subsequent lower¬
ing of the level of output. When-ever
a
part of current production
is
Channeled'
reduced.
ward
into
This
stocks,
the
consumption:
exerts
an
up^
prices because
of
the relatively
short
supply
Situation created, and on output iti
an
effort to increase the supply.
When inventories stop rising, the
pressure
is removed and unless
pressure
on
outside forces act to increase
con¬
distinct questions sumption,
the present inventory
One, are stocks ade¬
the existing level too
by
situation.
high
two
of
of
within the working stocks of man¬
ufacturers also presages some fur¬
amount available for
terms without reference
to indi¬
inventory incre¬
take place merely irl
of achieving balance.
is
The question of in¬
ventory adequacy—afe stocks low
or high in relation to shipments—
Can be, judged in current price
^
output quickly becomes
adequate and prices less firm. &
The real damage in the past has
been that in this adjustment, proe-
too low and what will be
both
(Continued on page 2244)
,
Chart 4 t*
i&IATICNSKIP BETWEEN MANUFACTURERSf
3
seem
cate that further
of shipments.
ship¬
ments and stocks. If shipments of
a
.),
v.-,.
will be reflected also in the value
changed
influences.
tured
the
several
are
turnover
In general,, working stocks held
by manufacturers must be weighed
The sales-inventory situation as in terms of the varying sales-in¬
excessive;
it was prompted by
compulsion between industries and industry ventory relationships. In the dura¬
for speedy reconversion. In order
groups is not uniform.
The dif¬ ble industries, inventories obvi¬
to achieve an approximate balance
ference in pattern. during
the ously anticipate larger shipments.
between civilian stocks and out¬ 1939-46
period between the dura¬ In the nondurable industries there
put it was necessary to replace ble and nondurable
groups is pic¬ is an approximate balance, but at
:
Un¬
goods
Durable vsi Nondurable
extreme in any terms in the
light of past experience. However;
It can. not be considered
to determine
time
sales
-
the
as yet no marked
disparity evi¬
dent; in the relationship r. existing
working stocks.
'
The current level of inventories
is not unwarranted when meas¬
■
ments will
definite answer.
no
doubtedly some of the rise was
purely price, but it is impossible
between sales and
is
Despite the recent in¬
ventory accumulations hare, the
business expected
for the first relationships dri not appear far
part of next year. However should out of line with
past experience;
shipfrietits volume fail:to ihateri- however, the present shipments
alize, trouble could quickly develop level is
"very high. ; it should be
particularly since the time lagdias noted that; the data for this group
become unusually long to hedge
are presented on. a 4-quarter aver¬
against production uncertainties.
age basis to eliminate seasonal
was
was
INVENTORIES ALT)
'
SELECTED STAGES OF FABRICATION,
INVENTORIES, BY
AMD SEIHEHTS 1/
RAW
all-time peak, the natural re¬
question the level—
fire inventories toO high, or has
an
MATERIALS
,;if"
,
.'
'
"i~
GOODS
is..■;£.
INDUSTRIES
/
1943
1942
accumulation
merely
»Succeeded in filling pipelines nec¬
essary- to high level peacetime
business?
r
.
rr
DURABLE
action is to
the postwar
ALL'DURABLE GOODS INDUSTRIES
AND TRANSPORTATION EqUIBSEHT 1/
,
1
of inventories at the end of June.
With total inventory holdings at
,
SHIPMENTS j
RELATIONSHIP BETWEEN MANUFACTURERSf.
increase in the months Of July and
August when manufacturers alone
fidded $1.2 billions to the. value
IT>»
Vy'
.
1942•
/942^
3
V
y>*3/
'As previously pointed out, only
manufacturers' holdings are
J
iv
S
S
/
...
k4;v;:'V
T
.,.
the
fibove earlier peaks but it is only
recently that they have moved
above
the historical
tionship.
still
line
of
while there was
ventory bulge at
V
1942, and
obvious in¬
that
f;
time,
•
^
•
L
■_•••...
■
)v
l/Vl
:;'V;
5*
WlXD
,
v<-.\
ki
:
a>—
the
1940^
present levels reflect a sizable
price increase and probably repre¬
sent
X
are
of
an
\$45
1*
_.
rela¬
Stocks of retailers
below the level
ff
I
)'
.
lower
physical. volume,*
Meanwhile, dollar sales at retail
in
a
1946
running
are
•those of 1942.
60%
abdve
yfl^/939
Much of the same
■-[ %
situation applies in the wholesale
fields.
That is, in the distributive
Inventories, the current
i
••
Sales
would
indicate
leVel
that
into
of
accumulations,
over-all,
be needed to bring stocks
line) with normal relation¬
ships. <
,
•
/
£5$
i;<. Within the manufacturing field,
-there is less uniformity. As point¬
ed
:
!
i\
i
i
4
6
8
2
/
GOODS
IN
)-3
TRANSPORTATION
PROCESS
some
EQUIPMENT, INCL
AUTOMOBILES
further
Will
\
:)v)) 2)':
o
despite recent additions to
areas,
out
above,
Xcc
4
finished
stocks of
goods have not risen sufficiently
to reflect the
doubtedly
be expected,
in
higher prices.
some
Un¬
further rise is to
although movements
shipping stock figures
are never
of very great magnitude.
f;
The
levels
of
goods-in-process
6
inventory, when related to ship'•••
ments,
shows
SHIPMENTS,
••
an
-
approximate
8
j
.
k
10 . ,
monthly average for quarter
(BILLIONS OF
12
o
balance
even
after
the
recent
(See Chart 3.)v The
Source
of dates
for prewar years.
.U. S. Department of Comneroe.
j*..
.....
4
^
MONTHLY AVERAGE FOR QUARTER
'
•
y Linee of regression were fitted to date
i
-
.
■:SHIPMENTS;
OOLLARS)
"
,
...sharp rise.
,
^
*
(BILLIONS OF DOLLARS)
i/ Linei of regression were fitted to data-lor prewur yeara.
;
.
-
:
a
inventory accumu¬
lation, particularly with respect to
any slowing or reversing of this
there is
rect
,
not
increase
thermore,
during the first part of
develop rapidly, which
would bring working stocks into
textile, apparel; and
contingencies such as strikes, leather products group are related
shortages
and
price to working stocks.
It is in this
changes. ' '
~ ' ; J1 group in the past that weakness in
On; ari
over-all
basis,
total the output-price situation has first
are
inventory
is
of
price arid how much represented
larger physical stocks?
To this,
1946 could
f6r
excessive in view of the volume of
ofthe
rate
rate?
existing
automobiles.
material
mamufacturers' inventories
Rise
During July and August when
inventories were rising rapidly,
prices also advanced.
The most
persistent question is: how much
presently
used by business
accounting to
value the inventory, each of which
might yield a different average
price for existing stocks.
Fur¬
cluding
shipments volume, however/overall holdings are high.
Witfi re-1 balance.
spect to certain components and
critical materials, this does not
thC Pricfe
Inventories and
future trend?
Two, what
the' economic
significance of
Source
of dstas-
It. 3. .Department of Commerce.
.
10
THE COMMERCIAL & FINANCIAL CHRONICLE
factors which must
Post-War Role of
account
Business Inventories
(Continued from page 2243)
in
current output is usually dis¬
more than adequate
ess,
however,
case,
any
for inventories
covered to be
can
buying
not go on in¬
inventory building subsides.
Hence, prices drop in an attempt
to move output into consumption,
definitely^ At some time in the
future, a time which is not now
predictable, the pipelines will be
considered
filled and inventories will be suf¬
when
and" inventories
once
ficient
suspect or
A recession
in ouiput, employment and in¬
come normally ensues.
A further danger is that some
time during the process the in¬
crease
in inventories may shift
inadequate
may
are
now
or
than sufficient to
more
support the current high volume
of shipments.; At such time buy¬
too high.
prove
ing for inventories will be cut at
least to
problem
absorb
replacement basis.
a
will
the
then
added
The
what will
shifted
be
output
quickly from a voluntary to an to consumption channels when in¬
involuntary accumulation because ventory accumulation stops or is
buying slackens, or increases less reversed.
While
Increased buying may
than anticipated. Under these cir¬
cumstances much the same eco¬ come from any of a number; of
nomic reaction described above sources, it may be well to exam¬
ine the possibilities of ^ a few of
develops, but perhaps to a more
striking degree.
Thus, in any the more important ones. Gov¬
period of rising inventories, par¬ ernment expenditures, for exam¬
ticularly one of a rapid increase, ple, have been a large balancing
.
"to
factor
problem is one of attempting
the
capital outlays, construction, ex¬
ports and consumer expenditures.
With these, two problems arise.
The rate of consumption in these
areas is already high and will be
higher when the peak of inventory
building
is
reached.
Although
further expansion can not be ruled
out as an off setting; factor, it is
pertinent to question the timing.
Will the offset be gauged so as to
bring particular
into balance and to com¬
areas
plete
ness
to
busi¬
pipelines,
filling the
inventories
can
rise moder¬
three to six
being ; excessive
relative
to
sales or shipments.
Further sharp increases, however,
of the kind experienced in July
would soon bring over-all inven¬
ately
another
for
without
months
neatly
out
and would
of
balance
with
ary
sales
counteract
considerations
These
inevitably be followed
the
by a serious readj ustment.;
Chart
deflation¬
any
impact?
,
tories
tendencies
present
toward curbing these' outlays.
Other central forces are business
Summary
order
current
indicate
tendencies
and
the
S
Common Sense and Progress
the effects
a
in
the third
;
(Continued from page 2211).
:.
'1
Freedom, from Fear; and Freedom, characteristics in
varying degrees
quarter of this year
billion per year
contributed: at
least
$7
billion
when adjusted for price advances
at the rate of $14
from Want and provide a new era
of
industrial
labor
and
racial
$190#and $195 billion.
quated
stead
Unless the
the
INVENTORIES AND
SHIPMENTS,
ALL NONDURABLE GOODS INDUSTRIES,
TgCIILKS, APPARSL AND LEATHER i/
government sectors must be found
an
aggregate increase in demand
inventory de¬
be in addition
GOODS
INDUSTRIES
provide
and
Halsey, Stuart & Go.
a
all Qf the
?
\
■*
rt t
<
1^
1.*('
.
.
1
1
1
ginning to
abundant
in¬
was
approxi-^
distance south¬
same
from
Paso
El
to
Van
in
communities in Texas
and
communities., in
Mexico
New
districts, have
combined
a
which
of
182,000
El
area
furnishes
Compania
The
Paso.
company
supply
power
to
Productora
Mexicana
a:
O) Z
which-serves
de Luz y Fuerza
z<
population
adjacents
in
62,500
of
to
El
a
be¬
are
abundant
is
life
the
front
home
is
further
away
Mexico.
Earl
must
decontrol, that the
up,
and that
leisure provided in
is
greater
the
pot.
working les§
chiefly consumed by, standing
queques waiting for that which
in
is not
there—now
that
such pre¬
vails, great is the disillusionment
of the people and great is their
confusion, a confusion that even
President
the
lately remarked
might well become chaos.
There is an old saying that "It's
better to light a candle than curse
the darkness," and also another
old saying that "One candle may
well light ten thousand others,"
and so tonight I am going to try
to light, a ,few candles of common
sense* in th/j hope they in turn
may light many others until the
terrible
ment
confusion
and
disillusion¬
of
darkness
is
and
Lambuth
Sitkoff
great Nation of ours re¬
turns to the Path of Progress that
it has lost awhile—the path that
for, 150
from
or
years
wilderness
a
brought us
to the greatest
so
nation in the world.
(BILLIONS OF
2/ Deta'plotted
data
ror
are
inventories
were
have
People '■:&?>''Ti-ffil&'r
•J
begin at the beginning
us
world's, greatest problem, namely,
People.
'
trite, but nevertheless true,
to say that if there were no peo¬
ple there would be no problems.
v
formed
Morris
Lambuth
T.
&
If
such
sense
is the
would
case
then
common
conclude that basic¬
■676
DOLLARS)
data;
U.
4-quarter moving averages oentered at tbe tblrd quarter.
Basic
for the end cf mid-month In each quarter and for shipments era
'
3.
Lepartuent of Coouarcs.
..
,••••'
*'
•
lated
Street,
Mr.
Co.,
for
manager
..
New
York
City,
to
•'
ment!
the securities business.
Lambuth
partner
are
t
of
ally all of our problems are re¬
engage in
AVERAGE
monthly average for quarter.
Jourca
should give others our
we
won't
distrust
never
occurs
they
so
intentions.
our
to
not have
them
It
our
little brown
our
Japan, and to re¬
fortifying Pacific mili¬
tary bases, because
did not do
we
to continue
us
in
frain from
if
fool¬
same
iron, oil and other
scrap
materials to
"brothers"
good in¬
same
this
was
Harbor that caused
war
that others'
so
them to.mistrust
we
told
were
it would
cause
Now
it
good inten¬
our
the
because
seems
"do-gooders" haven't yet learned
the lesson, we've got to listen to
the
in
old
same
the
arguments all
clouds
their heads
the
and
just
over
in
clouds
never seem some¬
that in this life, you have to deal
with people as they are rather
than
they ought to be from
idea of ought, and that
passing: laws
to
redistribute
as
your own
wealth and national income is not
going to make the stupid person
intelligent, the lazy industrious,
the profligate thrifty, or the irre¬
sponsible responsible.
And that's
such
persons
are
one-third
or
of the
population or whether they
white, black, yellow or brown.
Outside of sheer compassion there
,
tells
Sense
mon
human
that
us
beings being what they are means
that we cannot legislate peace and
abnegation of war into the hearts
of men, or virtue, character and
economic
sufficiency
into
our
own
or
other
peoples.
Oliver
Cromwell's edict of "trusting in
God and keeping the
still makes
sense
to
powder dry"'
me, as
well as
the observation of the Good Book,
"The
with
shall
ye
poor,
ever
have
ye."
Necessity of an Ordered Society
let
Now
to
come
us
Common
Number Two—The
Candle
Sense
Necessity for an Ordered Society.
The problem of how to get order
long
been
of
one
the
principal
problems of mankind.
Most of
us have only to look into our own
lives to appreciate the scope and
size of the problem that has ex¬
isted since the beginning of the
human race—that erf getting first
things first and everything else iri
its proper order. ■ Common Sense
tells
us
that order is the first pre¬
requisite of progress, and that na¬
tional order must precede world
if the
that is
order;
holds
true
proposition
that the whole
to
human
still
view
human
merely the sum of its parts.
later
sooner 'or
whether
one-tenth, one-fifth
is
1.6
I.4
fitted to deta for prewar years.
■
*
so
bombs and atomic secrets
in the affairs of human beings hast
liam
1/ Line* of regression
anyone, they as¬
will feel
likewise,,
dispelled,
and this
Company with offices at 76 Wil¬
SHIPMENTS, 4-QUARTER MOVING
and
on
others
sume
is ever only one excuse for ex¬
tending help to the other person
or
peoples and that is to help
them help themselves. j£ If they
are unable or unwilling to do that*
no amount of help, no matter howextended, will accomplish any-*
thing of a constructive nature.
I submit, therefore, that Com¬
now
standard of living is going down,
and apply common sense to a con¬
of our, as well as the
Formed in New York
I-2
dropping;
atomic bombs
are
It is
I.O
their premises.
Because" they ab¬
hor
the
thought
of
so many that even- the controllers
have become lost in their controls,
Let
Lambulli & Company Is
o
the "bleeding
hearts," the "one-worlders," etc.,
generally
overlook
in
forming
their viewpoints and
establishing-
true
sideration
< 3
"do-gooders,"
the promised few
controls of the nqw instruments
of public-power have grown into
than ever, that
Mexico
< ID
a.
people
are
including
Paso,
the City of Juarez,
2
perform
how to learn the elementary facts
of life.
Common sense dictates,
largely in the things that we have
not, that security is. chiefly com¬
posed of insecurity, that freedom
from fear is a myth, that peace on
,
o
Sofe I.6
K
of
also
a><t.
children
our pater¬
It's this last point that the
and
Co.
Electric
Paso
125,000 reside in the metropolitan
2
or
home to roost,
finding that
come
the
the
population of
LEATHER ^
AND
itself,
things.,
and
rural
no
hundreds
we
again regarding the atomic bomb
and other military secrets. People
who continually have their heads
fear
was
Now that the chickens
which, together with surrounding
TEXTILES, APPAREL,
way
of
tion.
of the company
office
equipment and supplies, etc. They
an annual sinking fund be¬
20
I
freedom
our
of
have
14
MONTHLY AVERAGE FOR QUARTER (BILLIONS OF DOLLARS)
•i
form
Results of New Deal
plies electric energy at retail in
?
preservation of
of
Horn, Texas. The company sup¬
<?
no
be
infrequently belies
nity.
shipping
was
subject to minor qualifications, on
substantially all present physical
easterly
:>
that.
as
he was
dubbed, a reactionary, a prince of
privilege or a bloated plutocrat
and laughed off accordingly as of
no consequence in the new scheme
mately the
SHIPMENTS,
being.- The think¬
unrealistic and
as
company's first mortgage bonds,
Series "A" 3V4%, due Nov. 1,1970,
now outstanding in the principal
amount of $6,500,000.
The new bonds are a first lien,
Dam in New Mexico and
6
not
be
can
to fear
ditional amount from the general
funds of the company, will. be
erly from El Paso to the Caballo
5
millions
can
there
government, costly
beyond our means, arid certain to
fail—he was told not tp fear but
to have faith, that the only thing
<oa
4
of
there
also
Bible
reasoning prior to Pearl
and
corporated in Texas in 1901. It
generates and purchases electric
energy and distributes and sells it
in El Paso, Texas and in an area
in the Rio Grande Valley in Texas
and New Mexico extending ap¬
proximately 100 miles northwest¬
5*3
that
doubt that the
The
"children of
ish line of
just
was
tical, impossible of attainment by
the means suggested, dangerous to
bid
Proceeds, together with an ad¬
electric properties
Of
doubt—but
all
are
It
bold enough to
express the fear that all or any
part of the picture was imprac¬
of 100.279.
El
O
un¬
God."
we
tentions.
the
used to redeem at 108%
picture of
a
who would pass the laws
If anyone
accrued
on
What
together.
race
that
says
may
naive
awarded
were
Oct. 28
living,
today that it was desirable
possible and could be had
man
ing
of El Paso Elec¬
The bonds
the bankers
to
of
of
work, ana
hours of leisure in
more
to bring it into
Halsey, Stuart & Co. Inc. headed
group of underwriters that made
a
public offering Oct. 29 of $6,000,000 first mortgage bonds, 2%%
interest.
standard
hours
human
the
a
and
money
that is the thin thread of brother¬
and
kinship that ties the
hood
merely by developing' enough' en¬
ergy to go to the polls and elect
Offers El Paso El. Bonds
1976
con¬
alloyed joy and bliss that was—
yet millions believed and still be¬
lieve
at 100% %
the
in
to
earth.
on
ments.
due
few
a
drive
result
enjoy the milk and
honey of this new alleged Heaven
higher output which
in the present level of
inventories when related to ship¬
is implied
100%.
3
the
which
bonds retired
by release moneys, etc., if $500,000
or more.
They are redeemable in
whole or part on 30 days' notice
at the regular redemption prices
ranging from 103%% to
100%
and
at
the
special redemption
prices ranging from 100% % to
1946
<-
the
reduce
to absorb the
Co.
to
ginning Sept. 30, 1947 calling for
deposit of an amount equal to 1 %
of the total issued new bonds,
AND
/' I
NONDURABLE
needed
crease
to the increased demand necessary
Series
only
in¬
public
up
of
to
were
of
and
changers from the temple, to re¬
distribute the national income, in¬
after deducting new
I
placing
trols
to offset the loss in
tric
which
anti¬
horse
intruments
new
power,
is not to suffer a setback
when
inventory building stops,
somewhere in the private and
This must
with
buggy days and building
economy
mand.
by dispensing
laws of the
peace
the annual ra^e of output of
goods and services (gross national
product)
estimated at between
to
other than motor vehicles,
RELATIONSHIP BETWEEN MANUFACTURERS •
.
years.
are
subsequent decline, and to de¬
termine, insofar as possible, the
timing of the downtown. ^
In
of
nurtiber
a
the
However,
severity of the
the
moderate
for
in appraising
cessation in inventory aqcumulation. Inventory accumulation
of
Thursday, October 31, 1946
be taken into
in
was
James
which
of
the
D.
When
we
formerly
'a
beings
Cleland
&
pressed by their infinite variety,
Mr., Sitkoff
trading
;v
beings.
' '
was
depart¬
'
no
we
are
immediately
two of which,
im¬
like snowflakes,
tory teaches that order in the af¬
fairs
of
when
men
there
has
was
business
it
being precisely the same, and yet
whose
all
regulate and order.
having certain similar general
His¬
only
one
was
obtained
authority
to
rule,
In past ages
A
V/ t"'' •)»' ■ V • > \)
Volume
;,,■
ri'V.
:r[1 ■ 4."'' '
Number 4538
164
Later it became absolute
monarchies headed by Kings and
Emperors,
what is at stake—for if they did,
feel sure that the overwhelm¬
1
ing
would
would rise and as
say to constituted au¬
thority, "Stand by your oath—De¬
fend, Preserve and Uphold the
said person in time be-
tyrant, and the price of
order became slavery, I So only
731 years ago at Runnymede the
came
what is
known
now
the Limited
as
1
'i'.
i1
The
1
v>
•'»'
.
*
*' \-1' 11
^
Constitution—Supreme
government
own
our
went to
work, howover, they had had enough of even
constitutional monarchy, with its
King George III, so they estab¬
lished
a
new
its
matter
relation
Living/
for
to
is
the
Work is
and
Standard
of
of the oldest
one
activity and yet
today there is probably no subject
is
that
misunderstood
more
or
fallaciously regarded. Most
people regard work as a curse
rather than as a blessing.
That is
is
lazy
as
average per¬
he dares be—or
as
has failed to learn that work
be
fun
and
provide
satisfaction
beyond almost any other
of
the
human
race.
can
where the supreme authority was
to be, not a person or group of
pride in its
persons, but a body of broad basic
laws which they termed the Con¬
Creator. intended that the human
Common
accomplishment; for
Sense
tells
us
that
the
race should live by toil and effort,
stitution of the United States, to
and that
most
of
our
waking
which every official of the govern¬ hours shall be devoted to our
ment was to swear allegiance to
work.
uphold, preserve and defend. Thus
There was a time when to be a
Was
conceived, for the first time
in history,' a central authority
•consisting of "laws and ; not of
men," so that those who lived
under such authority could enjoy
both the blessings of an ordered
.society, and freedom from the
•danger of a tyrant or any form of
tyranny.
The Fifth Amendment
of the Constitution of the United
States
reads
"No
shall be
person
deprived of life, liberty or prop¬
erty without due process of law."
And yet for a number of years we
have read of goon squads and or¬
ganized mobs working with im¬
punity, beating Up people,- over¬
turning cars, smashing windows;
of people desiring to work turned
hack at the gates by strong armed
pickets; property owners denied
admittance to their own property;
traffic stopped by barricades, and
all of the rest of the disgraceful
•defiance of Article V of the Con¬
stitution that .were
I to detail it
Would take the rest of the eve-;
•••'-■'As 'orie
eSitor recently put it—
good worker merited one the re¬
spect and admiration of his fellow
men and I might add parenthetic¬
ally, increased the value of one's
services, but in these past fifteen
years when millions of persons
had
have
dinned
into
their
ears
by leaders in high places and
others that the hours of labor
should be reduced and that penal¬
ties should be imposed for Over¬
time, and that limitations of pro¬
ductive effort
were
desirable pro¬
vided the take-home pay was pre¬
served by higher
hourly rates, the
emphasis has shifted to glorifying
the inferior and indifferent work¬
er.
The good worker, told to slow
down or else, has become the ob¬
jection of derision, suspicion and
scorn.
/What the purposes were; in ad^vocating
change
and insisting upon this
of attitude toward work
is perfectly clear
but need not be
into here.
What is more
important is whether the change
has > Redounded to the benefit of
gone
the country and the worker him¬
self. The answer to that question
pickets can de¬ Common Sense tells, and experi¬
prive 50,000 workers from earn¬ ence is
showing, to be clearly in
ing their livelihood, and cause the
negative.
iifty million dollars of property
The
explanation why is ex¬
to lie idle, merely because some
tremely simple.
All of us have
union boss says "close her up"—
only our productive effort to ex¬
while the law enforcing agencies
change with each other.
If our
look the other way and the aver¬
production is X percentage less
age citizen reading about it in the
than it was, we have X percentage
•paper merely yawns and turns to
less to exchange with each other
the sport pages or the "funnies."
and hence less, to enjoy.
fWhatis happening to this nation,
when
?,
handful of
a
Well, I'll tell you what .■ Com¬
mon
Sense tells
what is hap¬
me
pening, and that is that the great
idea
of
the
stitution, of
Con¬
of the
Framers
government of laws
/and not of men—is dying, first,
because those public officials who
?have sworn to uphold, preserve
a
••and defend the Constitution of the
"United
States
have
their
broken
•oath, and disregarded their duty,
and, secondly, because the citizens
of this nation have permitted them
t.o do
so
without material protest.
Tf We
// .//
,
thereby exchange our
production for compara¬
bly more production of the other
fellows, we thereby increase the
cost of our production for the
pay
and
this
sense
also tells
nation
can
me
have
an
society, whether it be
through the central authority of
the Supreme Laws of the Land or
through the personal predilection
of a King or Dictator, we as a
nation
are
headed
where
indeed
progress
into
a
is im¬
possible, for without order, noth¬
ing constructive can be accom¬
plished,
and
the
Liberty
and
Property of persons will be tenu¬
ous
,
indeed.
'
'
■
I cannot believe that-the citi¬
zens
what
of
is
this
nation
taking
realize,
place,
in
precisely
and
as
we
increase
the standard of
Jiving for the other fellow. If the
other
fellow
pursues
the same
tactics, the exchange ratio returns
to its former status, only now both
parties have less to exchange with
reduce
we
other
In
that
ordered
condition
fellow
other
cost,
and
the
standard
living is lower for both.
'V
''Impossible
Common
unless
Progress Is
compensate
production by increasing
lessened
each
Without Order
endeavotf to
for less
other
Sense
tells
words,
us
as
.
;v
of
* '
Common
nothing is economically unsound
and that in the long run most of us
only get out about what we put in,
so even
the Politician and Worker
discovering that there is no
royal road to a higher standard of
living that it is not paved with
increased
production
at
lower
are
cost.
>
of the
tion
in
Reconversion
to
President of the United States
these significant words, the
the
are
mean¬
ing of which I trust Mr. Walter
Reuther, Mr. Philip Murray, and
leaders of
T
.
be
>
.
real
in
reversed.
however caused,
necessarily
reduce
real
of the workers of this
>
wages
Country."
•
Better Economic Life From Pro¬
ductive Work at Lower Cost
What
after
some
nomic
all
it
the
humbug
realize
that
four
make
the
shock
a
must
two
and
that
abundant
more
eco¬
hokum
and
and
of
years
to
be
to
still
two
if
want
we
life,
can't
we
get it by reducing hours of work,
producing; less
for
each
hour
worked, raising costs, and rais¬
ing pay., Common Sense andV.exr
perience at last are teaching. us
all that
better economic life has
a
to be earned by
better,
more pro¬
ductive work at lower cost. There
is
other way.
I come to
no
So
last
candle
intend
to
of
the
Fourth
Common
and
Sense
light tonight.
It
tains to the human spirit.
One of the tragedies
I
per¬
of
our
times is that the phrase "the more
abundant life" in the way it was
used and the connotation it
came
to have In the minds of millions
was
of
perversion of the thought
Originator.
Jesus said "I
a
its
that ye might have life and
came
have
it
abundantly."
He
talking about life—not things;
was
more
.
And yet the words
tiful
thought
twisted
to
of that beau¬
conception
in
mean
these
were
latter
days the abundance of things. We
to have
were
as
result of every¬
a
thing but
our own efforts, more
things, so that the mass
of the people were persuaded that
and
more
the abundant life
was
in
of
abundance
an
though
the
the human
"Life;
Good
race
doth
abundance
Book
has
told
for centuries that
consist
not
of
to be found
things—even
of.
an
things."
Common
Sense confirms that truth beyond
all question,
because we know
this
;
2245
ment, the ideal of endeavoring to
make
trend
production,
must
nation
under
God
the
hope and inspiration of all
kind.
again
J. S. Fasseti Maker Sir.
man¬
When
such
ideals
dominate the thinking of the peo¬
ple of America,
then will the
hearts and souls be filled with
Of Plastics Wire
J.
&
S.
Fassett Maher,
Ccijt.
of Pu
aspirations and urgings above the
Conn., has been elected
level
of
ber
boxes
and
furs
and
motor
fineries,
ice
less work
and more pay, and will be direct¬
ed instead to building character
and integrity
and decency
and
cars,
sound purpose and
ism into their
of
their
own
children
practical ideal¬
lives, the lives
and
the
life
of
this
of
&
Cable
Maher,
tive
how¬
a
mem¬
directors
of
•
na¬
Hor-
nell, N. Y. and
a
graduate of
the University
vania,
nation
of
Mr.
a
of
ple
no
board
Cor¬
poration.
of P
and
the
Plastic Wire
great and glorious nation.
Where there is no vision, the peo ¬
perish,
nam
Co., 6 Central Row, Hartford,
was as¬
ever great can
long endure unless
its people possess in their hearts
and minds Idealism,
Integrity of
sociated
purpose, and moral; Stamina,
Trust
the
C
yl-
e n n s
with
Hartfordecticut
o n n
Com-
and
Guaranty
p a n y
Blytk & Co. Offers
Trust
Rheem
York
A
new
Mfg. Slock
issue of 130,000 shares of
stock
common
($1 par) was of¬
public Oct. 23 at
$21.75 per share by Blyth & Co.,
Inc., and was quickly oversub¬
fered
to
the
scribed. In connection with public
offering of the 130,000 shares of
stock, the company will offer 70,000
additional shares i to
Bethle¬
hem Steel Co. at the initial
public
New
Proceeds from
the
sale
of
the
200,000 shares will be used to
re¬
outstanding short-term bank
totaling $2,511,069; to com¬
loans
plete the construction of buildings
at the company's plants in Illinois
and
Maryland; to complete
purchase of equipment and
chinery required to increase
J. S. Fasscit Maher
,
before
joining Putnam & Co., in 1939 as
analyst for the /Syndicate and
Buying Departments.
Plastic Wire & Cable Corpora¬
tion is a manufacturer of electri¬
..
cords, wires and cables insiM
with vinyl chloride, • poly¬
ethylene, nylon and other thermo¬
plastic materials. Its plant is lo¬
cated in Jewett City, Conn. Other
directors of the corporation are
cal
lated
President and Marvin
L. W. Lord,
offering price.
pay
Com¬
of
pany
Vice-President and
Norwich, Conn.; Paul
H. Hershey, Girard L. Clemons
and Harry C. Powley, Jr., Ansonia, Conn.; and George C. Con¬
way of Guilford, Conn.
• i
H.
Phillips,
Treasurer,
,
the
ma¬
pro¬
duction in the present manufac¬
turing lines at various plants; the
balance, if any, will be used to
Billon Read & Co. Offers
Standard Brands Ffd.
Dillon,
augment
Read
&
Co.
Inc.
and
working
capital.
The
$2,511,069 bank loans were ob¬
tained by the company to fulfill
prior commitments in the inaugu¬
Blyth & Co., Inc., headed an in¬
vestment banking
group
which
underwrote the exchange offer by
ration of its program of expansion.
the
The
company
-
of 220,000 shares of
its
$3.50 / cumulative preferred:
(no par).
1
that it does not follow that he
The exchange offer, which ex¬
plants
located
throughout
the
who has the most possessions is
country, manufacturers and sells pired at 3 p.m. Oct. 29, afforded
necessarily the happiest or most gas-fired, electric and
oil-burning holders of the company's existing
contented or the; best off.
Not water
heaters,
automatic
coal $4.50 preferred stock the privi¬
infrequently it is exactly the Re¬ stokers, drums,. barrels and other lege of exchanging such stock Tar
verse.
steel containers. The company has shares of a new issue of $3.50 pre¬
two
stock.
The
number, of
wholly-owned subsidiaries: ferred
A Theory of Devastating
Rheem
Research
Products
Inc., shares of $3.50 preferred stock is¬
Materialism
engaged in the manufacture and suable to a stockholder surrender¬
In* the repeated emphasis that sale of
"Iridite," a solution for the ing shares of the old preferred
has been placed on a more abun¬ coating of metals to
prevent cor¬ stock, was determined by valuing
dant life of things, however, the
rosion, and Rheem Manufacturing the old preferred at $110 per share
people of this nation,
without Co. of Brazil, Inc. The
company which is. the redemption price,
sensing it, have been led into a has interests in Rheem Manufac¬ and valuing the new $3.50 pre¬
philosophy of devastating materi¬ turing Co;
(Australia) Proprie¬ ferred stock at $98 per share.
alism akin to that of the com¬
No fractional shares of new pre¬
tary, Limited, arid in Rheemi; de
munists
and
fascists
and their Mexico S. A. both
of which manu¬ ferred stock are to be issued in
like.
All the signs point, how¬
facture steel shipping containers exchange; instead the company is
ever, to the fact that in the great¬ and household
products in their to pay the exchanging stockholder
est buying binge of, our history
a
cash adjustment based on the
respective countries.
the people at long last are becom¬
Net
sales
for
the
12
months foregoing valuations plus a cash
ing aware that happiness and' con¬ ended Dec.
For exam¬
31, 1945, totaled $91,- dividend adjustment.
tentment and the r abundant life
309,854 and for the eight months ple a stockholder exchanging 1<*
are not to be found in the
acqui¬ ended Aug. 31, 1946, totaled $21,- shares of old stock would receive
sition of things.
At least the rec¬ 030)688. Profit for the
11 shares of new stock and $215
year 1945
ords of the divorce courts, juve¬
carried to earned surplus was
$1,- cash for his fractional share, and
nile
courts
and
social
service
stockholder
exchanging
100
498,414 and for the eight-month a
agencies indicate a new all-time
period this year the company re¬ shares of old stock would receive
high, of human frustration and
112 shares of new stock and $24
ported loss of $137,950,
heartache
and
broken
homes.
In
Capitalization of the company, cash for his fractional share.
Verily, man cannot live by bread
adjusted to give effect to the addition, in each case the stock¬
b
alone,
;
ft
-•
Experience
we
Sense
greatness
this
and
of life
in
pursuit of the
things and that
our
of
American
Idealism
of
the
past, the idealism that made and
preserved
a
nation—the ideals
of freedom and
justice for the in¬
us
dividual set forth so eloquently in
the Declaration of
Independence
and confirmed in the Constitution
of the United
States, the ideal of
self-reliance
the ideal
most
and
independence,
of freedom
person
of
opportu¬
to make the
of his talent and
who
accomplish much for
themselves and their fellow men,
the ideal of Liberty under the law
to enjoy the fruits of one's labor,
and
be
principal
Francisco
and
present financing, will consist of
$1,850,000
unsecured 'instalment
note; 30,000 shares of 4J/2%
cumu¬
lative preferred stock and $1,000,000 shares of common stock, $1
par
Ijrank Doyle & Co. in NYC
Frank
New
Doyle,
York
form
York
at
City,
member
of
the
Stock
Exchange, will
Doyle & Co., with
Frank
offices
stock
120
Broadway,
New
dend
adjustment.
cash
The
.
sale of unexchanged
shares of new
will be applied,
together/with . treasury funds to
the extent required, to redeem at
$110 per share plus accrued divi¬
dends all unexchanged shares of
stock
old
$4.50 preferred stock.
The
ferred
new
$3.50 cumulative pre¬
; stock will be
partners.
deemed
redeemable
Sept. 15, 1947, and at
be
as
a
'
;
at
$102.50 per share on or before
on
Gearhart
sau
Street,
nounces
&
Company, 45 Nas¬
New York City, an¬
and after Sept. 16,1951.
that Jacques
Scholle has
protected in that enjoy¬ rejoined their organization.
outstanding
company
will consist of the 220,-
3,174,527
stock.
financing,
capitalization of the
000 shares of $3.50
and
prices de¬
$100 per share if re¬
clining to
Giving effect to this
Rejoins Gearhart & Co.
be re¬
from the
to
proceeds
ceived by the company
of Nov. 7. Mr. Doyle
general partner in the
firm, with J. Norman Lewis and
George F. Bauerdorf as limited
will
cash divi¬
holder would receive a
preferred
value.
capacities,
the ideal of reward and honor for
those
offices
with
company,
in
San
need to do is turn back
we
the
r
is
fineness
Country in
what
to
is
teaching /and
telling us that
have strayed from the way to
Common
nity for each
Report, just released,
Director of War Mobiliza¬
and
should
wages
"
In the 8th
downward
materialism
that something for
all
Basically the only cure lies in the
output of more finished goods and
services.
Any significant decline
activity
person who has never
government, that he learned to love to to. take
form of
"This
I
pity the
found work
Lewis and
labor will understand:
Common
Work
forms of human
son
the framers of
third
consideration
probably because the
Authority
When
The
Sense
more
Constitutional: Monarchy.
or
Work and Standard of Living
a
system of a central authority lim¬
ited by law came into being with
the signing of the Magna Carta,
which
developed
in
time
into
John L.
majority
one
and in/ very recent
Constitution of the United States
years by dictators of the Hitler,
Mussolini,
Stalin,
Franco type. —the guardian of my Liberty and
The human race found out, how¬ all I hold dear—Do that or else."
one
loves Freedom and
ever, that great absolute authority If
our
and power centralized in one per¬ American Way of
Life—just plain
son was generally more than one
Common Sense would so order.
.person could stand, and as a corisequence
.a,'
THE COMMERCIAL & FINANCIAL CHRONICLE
the
authority was generally a
military conqueror such as Han¬
nibal, Alexander the Great or
Caesar.
vv.'*• if'iryw
&ii'il. U-J ,U *A *
>ri r*:T
■
£Lu.l
<«
preferred stock
shares of. common
2246
THE COMMERCIAL & FINANCIAL CHRONICLE
been
getting from India ;because
mdii'tical "frbuble^*famine;'/and
transportation difficulties. As a
result,
the demand- for cotton
bagging may go up rather/than
Future of Textile Decontrol
(Continued from page 2215)
j
to assure enough osnaburgs
and
sheetings for
bags.
Other shortages soon developed
in lighter weight sheetings and
plain print cloths. Gradually L-99
point for the entire
controls
The
less than two weeks ago
duction
of
some
should
fabrics
demand, 'I
am
kinds
of 1946.
which
told
year
consultants
cotton
You
us
that pro¬
of
find
still
fewer
of
down.
these products if the government
did not make export commitments.
cotton
The
you
do
serious harm to
the
econ-
pmy.M
The best possible
way you
Department of Agri¬
Within
by the extent to which
show 4hat" decontrol will
can;
not
can
convince the American
people and
their government that textile
coii-
culture recently forecast that the
grain crop this year will be the
soon be meeting
Npt .oniy js there an overall
only too happy to wprld shprtage Pf eottqh textiles, biggest In history.
1946
decontrol
Pf
require hard-to-get metals.
would
Thursday, October 31,
•
trolg
four
are
longer needed is to>
no^
produce
and
sell
maximum
a
to six
importantmpnths. .most .of that mam¬ amount of fabrics we need
most.
cotton looms were
I am aware that a sizable in¬ some of the most basic fabrics are moth grain crop will be milled, Production
and proper distribur
control.
still very hard to get.
ut
arid milled' graip mus t have a
Th.e latest
tion is the
ventory of cotton goods has ac¬
only real answer to
As
shortages spread, controls cumulated at some points in the available figures for production textile container. CPA would be the
shortages that have plagued
over
distribution were : also put pipeline and that if' these goods this year show that combed broad¬ falling down on its job if it did us- since the
.early war days. And
into effect.
Three important ones were to be released at one
cloth—essential to shirt manufac¬ not ' make reasonably. gyre that it is
time,
the surest and quickest
way
remain.
They are M-317C, which it might make a substantial dif¬ turers— is 60% below 1939 pro¬ these bags can. be made.
to get rid of government controls^
directs the distribution of yarn; ference in "
We must mak.e sure no major
today's cotton fabric duction. Class C sheetings under
Sees No Need for
M-317A, which controls the dis¬ picture/ There can be no doubt 42 inches in width are down al¬ industry gets so little of the in¬
Slump f)))
most 50%.
tribution of fabrics, and M-328B, that the
Plain print cloths are dustrial fabric it needs that it
There is a
industry is entering a
extended
was
until
virtually all
brought under
see
this'development.
bujt—what
is
rnpre
-
which channels some'of the cotton
more
period during which a down almost 30%.
I don't have to tell you men
relationship between
of low-cost clothing.
C_ i buyers and sellers should come how important these particular
These controls were worked out about.
The recent break in cot¬ fabrics are for .certain uses.
Th,e
in every case with the advice and ton
prices is *a significant devel¬ man on the street may ; npt know
assistance of people from your in¬
a poplin from an osnaburg, but
opment, and X want to assure you
dustry. Throughout the war years, that we are watching the piarket he does know that he must tramp
there was
ho serious question, closely.
through many stores before he
about their need.
I appreciate the fact that it can find a shirt at anywhere near
essential types
more
normal
•
1 As
problems-,:which first takes weeks - to make large-scale
on production
changes in your looms. If, as you
the.
called
distribution of cotton fabrics
and
diminish,' there
sistence
growing
is
ning to weaken for
we
some
fabrics,
carefully in consultation with yoju
demands, and in general are and plan a reduction of our orders
sympathetic to them. As a mat¬ so that the industry can deal with
ter of fact, the loom freeze is by: new market
conditions without
no
means
as
broad today as it;
was
during, the ' war.
As for;
Believe me, CPA's desire is to
M-317A, it is a far cry from /the!, help industry and not to hinder
day when there were even alloca- it. We certainly do not want any
tions for horse and cow blankets.) mill to be caught with large quart- !
these
•
tities of goods it
cause
of CPA
Viewpoint of CPA
.
you are
';
being
qyibble
few weeks ago—one by our own
one by a private re¬
search agency hired by the cotton
industry itself—both showed that
the demand for low-cost clothing
Continued high and that there was
as
yet no substantial "backing
up."
Recently, buyer resistance
-
v
to
low-quality goods shows signs
,of increasing.
'
I wish
.
,
could see the floo.d
,of letters which crosses my desk
daily, complaining about the lack
of yard goods, of shirts, of diapers,
of baby clothes, of bed sheets, and
of
good
quality,
inexpensive
dresses.
I believe that unless the
you
manufacturers
price
themselves
out of the
market, they can ..con¬
tinue to sell your goods on a -scale
never
before possible in peace¬
time.
' -', ■
When it
j
to
comes
decontrol, the
question
which
CPA
simply this: iHow far
fast should
tion
go? That is
help and advice.
to tell you what
your
ing is
on
are
look
I
first
fabrics
has been
the
an
third
on
at
in
riod
last
.
•
the
positive
Production of
months
the upgrade.
During
quarter,
rate
170,000,000 yards
of
you'll
recent
estimated
crease
know
10%
a
over
output
of
at
than
was
more
Moreover,
goods
year.
Gentlemen,
will be
threw people out of work.
That
,
Unless
year.
X) riecpgnize
ypurs
perfectly
well th^t produce
has been a feastrandrfamine
industry,
Producers might refuse to
years.
*
pie
sell
and
need
most
:
the
things peo*4
* those
because
that there is the things
: not! always
the most
Strongest urge toI make a goqd profitable^at the moment.
Such
"profit while you can. ' I know* ihat:
shortsighted doctrine of scarcity
apd
powerful 'incentive to the
a
duction
of
fancy
would"! fprce
pro¬
higher
than
rather
priced /higher y and
repeated
higher wages;
The
demands for
stapl^lahrics; ;)Algp);| '^aWzje liiati
^;
and
encourage
inevitable result wduld be
dis*-
a
cqnditipns which1 existed a - astrous bust for pvery'.one.
3hpt)idpntipql tp pqse!
But these things need not
hap¬
jt.oday.
pen) We have today all the rn^
]Neyertiipless«
grediehts tieeded
year
.
CQqtrqls,ra
o.ur.
year
-for^/Iphgvpe^
practi- riod of
ago,
ppsperi
if we -only- use -•
•■
") ?
pave relatively full employ¬
ment.- Fifty-eight million
peooI^!
they couldn't get^enqugh -qpt^on
have jobs)/ -Since y-«T DaF ihb
textiles for their
caljy.eyery. indqstryfn the United
States
restraint.
down to Washington
and wept on my shoulder because
came
'
,.
:'
We
/
;
hoh * workers !haye been added * to
figajn.
' •
'
;
It is logical to assume that most
muff "the^all
we
recent
)ppnh^»isit had dropped/
to
products. I want iears
rpfppsbyayrpn^pl^^
'demand ;to be reasonably sure today that
were ipfoyph' falgp ehd-.SP^h^il^
10 billion that situation does not ■ develop
or
11 billion yards of cotton fabric
or
a
there^wei^^hen.
we>Moh'f need
about
fop 9 billion
payrolls
.des.trpy qur chanee^^f^prosr^ mills wiU produce fancy fabrics
perity/ the extra) :money iri the So long jts there will be .^ Strpng
in
pierce,
and
pockets of the American
will call for more ^oods
export of cotton
India has taken
a
ness,
we
it is
have
::
r
industry
and/cbm-^
■'
)
^qll pro^tipii
people
United
States
cotton
fabric pro¬
duction 'are abnormally heavy. "
Sometimes people ask, "If cot¬
ton goods are so
export
any
short, why do we
of them?" The answer
to that is—we export cotton
goods
because we have to. In many parts
of the world
today,
than
money
cotton
is less
fabrics
in
adequate supply and
distribution
of
certain
anything, but he will work gladly
for something he needs and wants.
Not
and
a
only
rubber
number
materials
from
of
but
other
also
tin
critical
come
to us today. be¬
export certain commodi¬
this
country.
Perhaps
some
of you fellows have been
having trouble getting tires for
your
car,
electrical appliances
or
■3./T
t
/
i
Some
of
these
are
the
mentioned a moment ago
Which are not being produced in
normal volume.
Now CPA is not opposed to in¬
tegration
stand
nied
as
But it
me.
that
such; don't misunder¬
the
tion has meant
in
is
cannot
distribution
a
which
at
there will be inevitable
(1) certain
agricultural fabrics such as iobacr
co, seedbed covers, and bag mate¬
rials
including* A
and B sheet¬
ings; (2) apparel fabrics such as
broadcloths and print cloths, cov¬
eting
work clothing, and pock¬
drills and
industrial
twills;- and
fabrics
such
(3)
80-
as
present
indirectly restrained by CPA's
has
concerned:
de¬
widespread shift
distribution controls.
been
be
of integra¬
spread
general,
there are three
classes pf fabrics in which UFA
In
stimulating production. We need
rubber.
The
Malayan
rubber
erts for
worker doesn't want to work for
cash if that money won't
buy him
absolutely essential that
an
sharp dr,op—as in the case of bur¬
proper
lap-—because- pf political unrest.
fabrics.
Thus
the
export demands jon ones I
cause .we
in
the
from
ties
pe¬
instant
an
recommend
,
the
During the last
September,
estimated
production reached the highest
week
v
week—an in¬
same
short.
.
be
of many basic materials.
Steel
demand for thos.e fabrics, andwjll
production is close;: to r practical
There are t^yo propositions w.e
thdn^yoq shift to other goods only when
ever thought of
cannot ignore.
producing In any they np J.onger can sell the )ones capacity. Electric power is at ihe
The first is that
That's what is which ^re now go profitabiev highest level ever achieved at this
while production unquestionably peacetime year.
P^oduotion
When will th^t demand fall off? period'/pf /the yeajr.
is jmprbving, cottop) textiles in Important.
;
To asyume that ,demand will be There are some signs that it is pf .cpal and petroleum are at pealc
general are; still in shp#;supply
;
and will continue tp be short "for no" greater than" )jt was before the beginning to drop .off, but I don't rate?;
■i
Output of many buiiding mate-;
some time to come.
Th'e world \var, and to plan production on think ft has dropped substantially
such a'pessimistfc basis) would
rials/sucH as asphalt roofing, gyp^)
J>e yet//::);)^^
shortage brought about by the desum board, and
bricks, is at rec¬
mapds/of "jv^r has npt yet been ope of the sufest ways of helping
to destroy the nation's
ord. levels.
The Integration Problem
The same is true of,
overcome.
prosperity
and your own
There is also the integration many finished products—washing
jprofits.
Prewar exporters of cotton tex¬
problem to consider.
With the machines, vacuum cleaners,' elec¬
tiles — Belgium,
France,
Italy,
What Will Happen After
great growth of vertical integra¬ tric) ranges,' table-type
radios;
Germany, $nd japan^ha Ye ;b£en
Decontrols?
tion in recent years, there ia a trucks and
pi
'
put of the market for years. £ros?
The se,cond proposition I want strong
/ Put Light
possibility that many ,of the
pects
of
substantial
epaplbympht aqd high)
shipments to examine is
little fellows who do not have
what will happen
from these countries in the near
production together y/ith. bigi"
when controls are lifted.; 1 From connections
may be left out in the
future
are
still
discouraging. how until CPA
pyrchasing power,' and yre have
goes out pf busi¬ cold/ •
.effective
attention.
my
side of the picture.
cotton
Today, I
think¬
our
facts which I
any
overlooked,
.bring them to
Let's
a ques¬
the matter.
there
have
is
how
will, have to decide with
we
want
If
we
faces
and
fabrics ) yyould
I would not hesitate for
cannot sell be¬ .down a year or two from mow,;,
will still buy youn goods.
.
people and
year.
Such talk,
is* selling America
•
.
The two surveys made a
next
to me,,
lifting those con¬ s<V,t of thing could
quickly be'-'
immediately.
However,
I cpmo
coqtagious, A wave of fear
cannot help
How solid is this demand for
recalling ^what hap¬ —already started
by the drop of
clothing and other scarce. textile; pened. lust sifter ^-J. Day when the stock
market and some of the'
products? Occasionally - Cs^meohe1 we did curtail)!^
commodity markets—could quickexpresses the fear that it is tem¬
Yqu know what/happen,ed. Im¬
ly/^w^ep the country; and; destroy;
porary. Some people feel .that it mediately there was production
of the prosperity ahead, of us.
' *!
is unsafe to base future producr- mountains of chenile
bedspreads,
Or it eould 'cpme Jn/another
tion plans on any higher demand upholstery fabrics,
shower, cur.- way,
If producer^
than we had before the 'war.
tains, draperies-^e very thing .ex¬ •take
advantage .of shortages and
I disagree.
Present demand is cept Tow-price ^rint cloths arid squeeze
put the last drop of profit,?
inflated, yes. Butv^yvbite^eustom- other staple fabrics. So CPA was they can
compound the problems
ers
may
not knock your door fprced tp reinsjtote some pf the which
have faced us! in
But don't forget that your
The
American, people? have
view-j. don't intend to keep regulations
point and burs cannot always be; on the books'
^
longer than learned to enjay a. ;higher stand¬
exactly the same. 5 You men are) they are needed.
ard of living than they ever had
"
*
looking, after your own interests/
before.
They can afford to con¬
That is only natural. Our job, on)
Final Decisions Compromises
tinue this higher standard, and
|he other papd, is to try to keep;
But there is another side to this they intend to do so.-- *
the boat from rocking during
Consider these facts:
National
re-) picture, and I w^nt to outline it
conversion—to look after the vet¬ for
you in some detail.
So long income has more thah doubled
eran
who wants a new suit of) as iCPA is
in/existence, |t has ;.a; since the war began. Even when
clothes, the mother who can't buyf
you take into account the higher
diapers and infant clothes, the seeing that certain of the essential prices we'are now paying Amer-s
workman who needs overalls and
requirements of the nation are ican
work gloves, and the miller who met.
I have already mentioned ly 50% more purchasing power'
needs feed sacks.
such things as diapers, shirts, work than they had six years ago. And
t
Recently some of you havb ex¬ blothing; yard goodsandindus¬ because of ^population increases)!!
In /reducing -our there are 1$ million more ^cus¬
pressed
fear that there is* too; trial iabrics;
tomers" than
much low-cost clothing. - You
say, orders, therefore, we must walk a
threat.
seems
trols
rjejgiUatioiis.-:-.:-..We: they
worried about the market) fine line. We consider the interglutted "with
garments ests and needs of the textile inwhich formerly were scarce. -The dustry itself, but we also have to
changing cotton market and other consider the needs of other in¬
conditions are altering the pic-; dustries, as well as of the eon-!
ture, but it seems to me that the sumers of this country. The final
indications we have received so decision
must
inevitably be " a
far donat yet'/shpw a s,erioug compromise.
.these basic needs
agricultural,^ industrial,
time
some
it
and: | - A slump could come so -soon- If
met producers themselves, because of
without any government
controls, Xear,
curtailed production and
to
want to Watch those changes
recognize
We
also.
for
apparel
IjUgh Textile Demands to Continue
have told us, the market is begin¬
in¬
that these regulations be
diminished
If I knew that
reasonable price/
a
for-controls
great deal of talk
these days about a so-called
"in¬
evitable" slump or recession
which
is
supposed
to
hit
this
nation
can't function.: Ours is a
highly
integrated economy in which no
industry can long prosper if other
major industries' are losing pro¬
duction for lack't>f a little fabric.;
transition
fabrics to the
controls
are
-
When
those
certain
amount
ment also may
If
of
unemploy¬
follow.
' ' r" A
CPA
opportunity of
years to come.
pros¬
If the
Americap peoplp rr industrialists,
laborers, and consumers—do not
lose their heads
cal
pipnjhs ahead,
to Realize that
'
'
-
■*""
'
'
'
''
*
during the criti¬
we
cannot fail
opportunity.
,
'
//''
.-Vv
scramble,
Liquidation pf controls will be
painful under "the best of cir¬
cumstances.
golden
perity for
lifted, therefore, there
by consumers for new fabric re¬
sources, and in the resulting mixup business will suffer for a time.
A
.the
reduce
can
print cloths and medical, the pain by relaxing the controls
surgical and hospital cloths. Far-' gradually instead of abruptly, it
mer's, millers, hospitals, apparel ought to be so.
manufacturers, and other users of
I ask you as an industry to ex¬
With R.
(Special
to
The
J^ay & Co.
Financial
)
Chronicle)
BOSTON, MASS.
Harry V.
Keefe, Jr. and Clair C. Pontius
—
are now
&
associated with R.. L. Day
Co!, Ill Devonshire Street.
Pontius
in
the
past
was
Mr.
with
Hotchkin Co,
square
these fabrics still
they
where
In
are
worried that
won't get enough—or
near
the
face the
any¬
their fair sha're.
case
of
even
imports of burlap than
we
special effort to protect
discussed, and
give CPA a maximum of co¬
operation.
Let's -work together
a
o
bag fabrics,
prospects of
ert
these needs I have
we
lower
have
With Wahler, White & Co.
(Special to The Financial Chronicle)
/, KANSAS CITY, MO.
—
Foltz has become associated .with
Wahler,
White
&
Company,
Dwight Building. Xfe was pre7
viQusly w,ith B. C. Christopher &
thing right up to the fin¬ Company and
Prugh, Combest &
ish line, You yourselves can speed Land.
'
v
v.:
on
1
.
John A.
this
;
-V--';
/
i
{ )
i. '
■
Volume
Number .4538
164
<
industries to convince the public
that the postwar world is resting
on enough dynamite to cause' an
explosion of unprecedented,
/: The six months' financial state¬
(Continued from page 2203)
propulsion,
plastics, ; drugs
and ments supplied the realism to this
atQmic energy.
The world has change. All the automobile com¬
liever faced such a need for re¬ panies, electrical equipments, avia¬
and
building—houses, factories, power tion manufacturers
many
plants and railroads. The need for other contractors and subcontrac-r
consumer
goods is of equal pro¬ fofs reported /■'defjcit$.+/Railroad
portions.' In this country there is earnings collapsed with N. Y. Cen¬
an unsatisfied demand for nearly
tral
and
Pennsylvania
showing
everything. Ten years of building huge losses. The public started to
will not fill the need for residen¬ unload.
The re.conyje£sion period
tial
construction.
Automobile of business became a reality. Al¬
production
has
not
caught
up though one year on the way to
with the current rate of scrapping. postwar
rebuilding, those pros¬
The railroads need rehabilitation pects were forgotten when faced
and new equipment to make up with the inevitable facts of the
not only for the complete lack of liquidation of our war effort.
reconditioning for five
war
The
years
but also in order to compete with
other fast growing means of trans¬
portation. Farm machinery^ office
equipment, and household fur¬
nishings are wanted' to fill the
five-year gap when> hone were,
available.
Our
participation
in
two world wars has taught us a
fore
stock
market
f1',j::
T*1?
'
•
'v*y,
i
:
)*
*'
•.
*
A Starved for; American
Goods
"
Not only- does the whole
including
our
goods,
but)there
been
since
loans
and
extended.
have
Our
own
^continue
"97
.. .•
a73
.
\'43
•+154
Airlines
35
old
80
American
Can/V.--.
Home
blO
100
American
107
Products.
American Safety Razor__.__...
American Telephone...
cl5
—
(45)
9
±1?
173
83
49
52
48;.,.
56
+ 17
38
20
—47"
r
29 /
;i_
;
25
>
,18
4
+ 6
—63
79
17
50
—44
47
k
44
Continental
15
Deere
industry^ Thefe^ is no dqubt
Baking-4
+
•
.
41
:y
—
..
.
analysis
intelligent
'this
determine
can
rather than over-all
generalities.
General
:
7
....
sold
them
the stocks and continued to
the
demand?
For
there
all
1
—37
;!
175
—14
t
39
—20
16
33
6
—62
37
+ 12
62
65
+
.—
Gulf Oil
Hayes
Glass'.—
d31
138 old
—"
55
Mining——...—.
Motors—
Lockheed /
7
15
Manufacturing—:
Hazel-Atlas
43
•
.
,
42;
78
22
:
—
supply Montgomery" Ward
a
Murray Corporation——.—
.
Radio
the
M
peace-time
demand
of
United Aircraft 'i:----u.
U.
or
more
The big
to reconvert and
reach
S.
decline
inflexible-; set-up
in
"volume,
of
6
—11 /
~r50
-20
t—42.
58
balanced
ac¬
are
cash
dollar
on a
additional
raise by the sale of sav¬
we
ings bonds, therefore, makes pos¬
the
sible
dollar of
retirement
of
another
bank-ljeld debt.
.,
Cash sales of all series
bonds in the first nine
months of this year amounted to
goojd.
very
of savings
/'
bonds
E.
\
69
by institutional investors
and by individuals with ]high in¬
the most in the terms of either
pf
: TT-55
rrr47 ;
inflation
combating
maintaining
ship pf thp
Our
a
of
that
of
widespread owner¬
pu'bHc debt/
which
causes
of
after
But there
are
you
something about. A major
labor
turnover.'
When
a
changes jobs, his old pay¬
roll savings allotment is automat¬
ically
cancelled.
It
requires
a
man
conscious effort—and often
sales job—to get him back
real
a
on
the
payroll savings plan at his new
place of employment. This is one
of the ways in which
you are now
helping the most, and in which, I
am
sure, you will help.
There
are
plenty of
based
why
" "•
•
reasons,
legitimate self-interest,
on
every worker should want to
get
the
on
payroll
savings plan,
to increase his allotment if he
is already a participant.
/ \
or
.
The most powerful of these
rea¬
most'
common
reason
.given
for
buying savings bonds is still, "to
provide for a rainy day." ' ' / ; * C
But savings bonds provide more
than security; they also provide
opportunity,
'
\ * "
•'',/
greater variety
+ 5
-+ 1
immedL
worth
"
buying bonds for.-/+; "" '+!
conclusion, I leave this mes¬
In
with you.' The savings bond
sage
of the
public debt. Naturally, we
better. We want to in¬
small bond sales—to bring
crease
in
mpre
more
of thqse hard-
dollars, /vyhjch
powerful instrument
" \ .T "
payrool sayings plan.,
ment~-and^*yoi|'-arje' doing
most
Experience hag demonstrated that
people
save
can
money
PlPftth pply, if they,
participate in some type q£.regu¬
lar
sayings plan. ■; The payroll
sayings
and
to-get
nionth aftpP
r4r ,4
and. for
late delivery. We shall
be able" to
get what we want when we want
it: This is worth saving fori
It is
most.
plan prqyides the most
+U
convenient method of buying say¬
108
93
—14
sures"
—50
of
—44
goods.
to the
:
'
bond is
one
good
invest/
fqvor
a
you urge to buy. You
contributing
are
a
count th£
7'
the "future
to
well-being of the individual, and
to the economic stability of our
Nation.
^ /;
The experience pf the war pe¬
riod, and the period that lies be¬
V-J
tween
Day and the present
ings bonds—and, in addition, as¬
,
+36'
20
their/ purchase in advance partment that it pan always rely
on your
group fpr fine, effective
on consumers'
expenditures
+5
108
/1
cooperation. For the good deeds of
.
-
+22
56
'
think that you will be inter¬
ested in
some
of the results of an
60
;
63
+ 5
analysis which
52
19
—63
the
24 m
--38
savings
—60
in the
/
39
£
#
1
25
39
-
%
y
10 '
/
43
%
+10
of
we
have made of
present status of the payroll
■
,
the
past, and for
tend my
thanks
In
plan has fallen from a high
your
about
Total
27,000,000 persons dur¬
your
efforts in the future,
participation
plpn.
and fixed rates,
ing the war to about 7,500,000 at
64 •
—12
+ 73
rapidity
deteriorating
the present time; but the average
/ 42 /
20
—52
Many small businesses thriving on Zenith Radio
deduction has continued about the
war
contracts would revert to
a 2 for 1 split, b 5 for 1 split, c 3 for 1 split, d5 for 1 split, e 2 for
their former unexciting and me¬ 1
split, f'adjusted for stock rites worth about 5, g 2 for 1 split and same, amounting now to around
diocre status.
h 10 for 7 split.
..."
$18.50 a month. This means that
.costs
important
The E
most
+50/ ""/. '
:
expected
war.
par¬
decrease,
want to do
—45
Sqpply-.
—
be
smaller
of
22
-
-
.'46
high Woodward Iron..—
to show
Youngstown Sheet & Tube....
.income.
sharp
program, backed so unselfishly by
denomination you people, is doing well. It'is
bonds have fallen ,off more than having
its effect in the battle
the over-all figures, and it is the against inflation, and is
helping to
sales of these bonds which count maintain a
widespread ownership,
Sales
50.
S. Plywood:
a
Westinghouse Electric.
under Willys-Overland
A
i
40
45
116
Union—.—
causes
They provide family opportune
Cash sales of E bonds
ity—opportunity to provide a re¬
the first nine months of serve for educating our children,
the year amounted to $3,500,000,- or for
purchasing a home or a
000, and fell short of redemption farm.1+/'// /■;+:
by about $800,000,000—a record
They provide individual oppor/
which I consider remarkably good, tunity —•
opportunity to accumu¬
Especially in view of the period late the capital necessary to go
which we have been through, and into business for
one's self, or for
of thp predictions^ which alU of further education or travel.
!
you heard, about the flood of sav¬
Savings bonds represent the
ings
bond
redemptions
which ideal way of
holding purchasing
would follow the end pf the war.
power in reserve. Today we are
But I should like to go further confronted
with
shortages
on
than
the
fine/ over-all
record, every side: But in the
years to
which has been built up, in large
come, goods will be available in
'
Western Auto
many
series.
vestor is the
42
-
ticipation.
fpf
10
.•37 V... '
h62 (]620)
•
been
during
+45
"28
,
with
objectives; and, almost without sons is also the most general one.
exception, it is the hard-to-get A/ reserve accumulated in the
money which is the most impor¬ form of Series E savings
bonds,
tant. That is why we need sales¬
payable ,cn demand, gives protec¬
men and sales promotion.
That is tion, so far as it can b(e provided
why it is taking, and why it will financially, against misfortune in
continue to take, plenty of hjird whatever
form
it
may
strike.
work to
maintain
our
savings Every person has greater
peace of
mind when he knows that he
bqnd ifecond."/ V
has,
;
The over-all record pf sayings or is accumulating, such a reserve.
bond
sales and redemptions is Every survey has shown that the
23
•68
The railroads needed but
small
their
States
—53
(
g3i (6^)
120 (84Q)
Gypsum.
.capacity operations,
Westerp
only under, which profits are, pos¬
sible.
United
jnore than
basis.
Every
which
deficit.. The
a
the
'
production industries would need
year
—
~r45
U.
a
—43
investors, faking ad-
mass
then
—17
13
! AO
former
+ 2V
.
(73)
16
Cofp. of America.—
vantage©! the/wild scfambje sub¬
sequently sell ouf? " It "was pbvir Standard Oil of N.
bus to thpm that Uncle Sam,'the
Steying^Dfug^l^^E:-.--^
$100 billion a year customer for ^Jvai^ih^Electnc"^^ Products::^
75% of America's business, would ijnioh
parhide--.----r-^r-T--practically disappear. The $25 bil¬ United -AirUnes--j_------i---.:
lion aviation .industry would face
a
1
—50
i 27
less than $1 billion.
of
39
Sharp' & Dohme.—a..!,-——
+
•
-
—
of which they Remington Rand——_——__.
making)"and fell Sche'nIey""-ir^^-C-::i—*
tips they generated.
finance
counts
now
have
course, was to
the end of the
comes.
+
■
course
What made
■
"is
part,
.
—46
;
;45::
127
44
was
—55
e42 (84)
154: v-;
—
—27
/.^i
23
;
83 old
There
one
help
employees
fpr the decrease in employee
do
by the continued high sales of
$1,000 denomination E bond?—
which are bought, for the most
+ 12
"
15
out
can
know, the govern¬
ment no longer needs the net pro¬
ceeds of savings bond sales to
you
the
deductions have
dropped
of the plan
altogether.
V
also
As
part, by high sales of series F and
G bonds. It has also been helped
5
—53
.
(155)
40
..
33
-
Jpbritiriued- the Trend,
for
•
—14
Philip -Morrisr:.2.i jJ...
Pressed Sfeel Car—
were
25
—37
59
ps'ual jumped on. the band wagon
after the event materialized.. They
(the
&v
46
.
themselves
■
■
50
seller, for every"; buyer.
Intelli¬ N. Y. Central...:.....——
| 34.;,/
gent
and 'far-seeirtg
investors Paramount:
-------; 70 old
knew for some time that the 'war Pennv *Ceptfal" Air|iaes-i:/l--.::
; 40
would end
eventually, and had Pennsylvania RR„.
47
Pfizer (Chas.)—v- 46:
vbeen" accumulating^
for several years.
'"
The /'public as Philco Radio.—————.——
charts
4.
38
80
———
Who
—15
m3l
51
nomic situation? The public's emo¬ Indiana Rayon..
tional victory Celebration ■ iri buy¬ International Paper.:.
ing stocks indiscriminately is an¬ Johns-Manville
matter.
39
49
•
the hear I term business and eco-f Illinois Central....
other
—50
69
Hudson
forceast
to
—14
.'
Goodyear
Graham Paige——
how
it
greener.
smaller
■
'
69
Gimbel Brothers—
Homestake
was
the
the
of
debt.
all
2
204
.i.
Motors.
break? When one analyzes
the known facts, the mystery is
easily dispelled. When World War
11 came to an end in August, 1945,
difficult'
-
>
46
+ If the above facts-are more than
^assumptions why did' tha stock Greyhound
market
even
and exceeded re¬
about $900,000,000.
only, the record is
aiso good; but not as good as for
11^(,
:
69
—12
.......
"and
fields in
will make
2216)
page
many
purchase of savings bonds
helps to combat inflation by
making possible the retirement of
additional amounts of bank-held
For
+27
48//
Packing
Curtis-Wright U...—
capacity operations in some Delaware & Hudson
lines may be profitless while in DuPont
others profits will break all rec-. General ^Electric.....'
Specific
.19
24
V
Cudahy
that
6rds.
they
$5,900,000,000,
demptions by
—~6
32
46
Container Corporation
Continental Motors II1—
Corn Products...'
+
50"
.
34
,
;
—15
26
140
Consolidated Natural Gas..—_
bach
—15
„.
•
14
;•//•/.
payments;
The. problem is one pf produc¬
tion and/profits.
The delay in
production is merely a postponed
Ineht. The factor of profits lies in
management and :■ the * nature of
+21
64
:
6
—44//
;
95
.
75.
'
7
—52
32/
112
;
...
+
52
57
Steel.....
—
,14
.
43
-
Aviation...
Certainteed
—18
97 ;
38 old
•
Bethlehem
(50)
82
*
.
plowed
These, then, are the two primary
objectives of the saving^ bond
% Change program: to maintain a widespread
distribution of the public debt,
+ 50
and to aid in our fight against in¬
+ 16/
flation.
Some dollars, I think ypu
—35
will agree/are much more impor¬
—37
tant than others in attaining these
194
.
surance
market,
J 89
American Woolen
Bendix
(146)
'
37 "
\
former prosperous peri/ Chi<^gp;;;MUWaqk6d;iS5:;$t. Paul
;
©d. Besides this, there is the sol¬ Chrysler
diers bonus which may amount to Colgate Palmolive Peet
nearly $10 billion, pur expanded Commonwealth Edison..:
security,; pensions and in¬
the
Oct. 24,1946
"614
any
Social
in
•
thLe^bove-^mentioned con¬
structive economic factors becom¬
Feb. 4,1946
savings,", bank deposits* Caterpillar Tractor.
high iarm income and'wage ?seale Celotex
are^far above anything that exist-
It seems evi¬
that such divergencies
me
companies with
record
t ed in
current/166).
will
Anderson Clayton
Foreign customers have Baldwin Locomotive
enough dollars and gold accumu¬ Baltimore & Ohio......
lated during the war. In addition, Barber Asphalt
credit
the
inevi¬
to pay.
sufficient
bare
How long will it take for ing.' fully, reflected in the equities
satisfactory results of other ©Lmany industries.
has been such wherewithal
never
instead
irrigation dam;
of washing out
also
varying effects of business
profits and losses on specific com¬
panies aire indicated in the follow¬
ing table, showing the divergent
amounts by which they respective¬
ly declined from their prices on
Feb.; 4 last, when the Dow-Jones
Average, was 210 (contrasted with
dent to
population; AmpricartTobacco
own
need; American
wbfld?
Selectivity
period.
the
the
springtime,
The
had to suffer in the reconversion
American
prior peace-time period.
Past and Future
there¬
table losses that
many
that,
so
an
The
reflected the
largely
(Continued from
freshet behind
fields of the summer
*
.
break
Abbott* Laboratories-..:.,...
lesson in prep^edness /qnd / our Acme Steel Company
A1
armament program: dwarfs that of
any
though selective; prosperity?
Stains of Savings Bond Program
personal thanks and the
of your Government
your
own
your
plants,
.
through
connections,
business
through
continuing
I again ex¬
and
influence in wide¬
spread communities, I know I can
count on you to
us
again work with
in this renewed bond
particularly
in
drive—
promoting
payroll savings plan.
.
the
,
■
THE COMMERCIAL
2248
Thursday, October 31, 1946
& FINANCIAL CHRONICLE
Plans
Stock Maiket Break and Holding
expedient
more
pursue
dures.
theory to
rights"
of
"bundle
:
•
•
.
proce¬
>,'•
<
difficulty confronting
holding companies and the
in the integration of utility
The major
both
SEC
aggregations has been the deter¬
of
an
equitable and
mination
elimin¬
workable formula for the
liquidation prefer¬
ences of senior stocks, and it was
for the fair satisfaction of these
claims that the "bundle of rights"
of
ation
the
it did not
theory was evolved. But
the mind of
consideration and
from
Athena
like
and
Commission
the
of
the minds
its staff,
full-born from
jump
Serious
Zeus.
deep
analysis
years
were
over
period of
a
devoted to the prob¬
lem and it was
further, developed
series of Findings and
Opinions dealing with specific
cases.
For that reason, an ac¬
through
Delaware was comprised of 391,must not
that 077 shares of $100 par value 7%
interest through the operation preferred, 391,099 shares of $100
par
value 6% preferred, 341,of the statutory mandate."
551 shares of $25 par value Class
Then, after reciting the intent
A common and 729,166 l/s shares
of the Holding Company Act to
of no par Class B common.
Un¬
correct certain evils, and stating
der the plan before the Commis¬
that
the
elimination of United
sion, the Delaware Company was
Light and Power was an imporL
to pay from cash on hand divi¬
tant move in that direction, since
dends of $3.50 and $3, respec¬
it would place the Power stock¬
tively, on the 7% and 6% pre¬
holders one layer closer to actual
ferred stocks; the Minnesota Com¬
operations, the SEC continued:
pany was to reclassify its common
Page 10—"This process of im¬ shares, and the Delaware Com¬
provement of position must not pany was to distribute the new
be
permitted to destroy any shares to its stockholders in the
legitimate interests of the com- following proportions:
$ mon stock, or present a wind¬
47.60% to the Delaware 7%
fall to any senior security."
preferred.
!
I
Page 12—"It is our conclusion
42.84% to the Delaware 6%
that we must judge the fairness
preferred. • , < f
• • \ v. r \
'•
of the 'plan- according t<* legiti¬
8.32% to the Delaware Class
mate investment values exist¬
A common,
,
ing apart from the duty of liq¬
1.24% to the Delaware Class
tion
(Continued from page 2202)
the
a
quaintance with those opinions
necessary to an understanding
is
of
Company Act
Holding
liquidat¬
ing value of $100 a share and on
which
dividend
arrearages
of
$64.50 a share existed as of Dec.
31, 1942. In addition, there were
outstanding
2,421,192 shares of
Class A and 1,055,576 shares of
Class B common stock, both with a
stated value of $4 a share. But the.
only. major asset of Power was
1,000,000 shares of United Light
& Railways common stock, so the
problem
confronting the
SEC,
which had previously held that
"
the
corporate
how to equitably dis¬
holding
set-up, was
company
Railways
the
tribute
entitle
the preferred stock not only to
face
pense
*
the
theory to
said the
the SEC
problem,
following. (To aid those who would
like to examine these
connection
remarks in
those
with
preceding
following them, page numbers
multigraphed releases will
of the
precede, these excerpts.)
Page 9—".
.
.
precedents to conclude
that in reorganizations and liquidations to comply with Sec¬
tion
11, stockholders affected
should be/given participations
according to their contractual
or
other rights determined as
equity
,
<
though in a continuing enter¬
prise, and that the purpose of
compliance with
the
statute
should not be permitted to ma¬
ture liquidation preferences." •'
■r:V; Page 10—". . . if a class of
by
Page 19—"That improvement
be shared by the com¬
should
absent the maturing of
tion preferences and a propor¬
tionately greater interest upon
the maturity thereof, it would
not be fair or equitable under
the
to
.
■+
statute
the
expense
the
from
preferred,
and the process of securing im¬
provement in compliance with
the Act should not be permitted
to destroy existing investment
values."
The
give recognition
if
stock.
the
And
Light
and
Power
opinion has been quoted at con¬
siderable length not only because
it
is
the
of
first
the
rather full
Commission's
expose
"bundle
of
rights" theory but also, because it
was upheld by the U. S. Supreme
Court in
a
case
in which the dis¬
tribution formula of the SEC
was
Although' not in chronological
order,
the
SEC's Findings and
Opinion of April 26, 1945—Hold¬
ing Company Act Release No. 5745
Northern
the
—in
States
Power
common
stock
the
as
to mature
ferred arrearages were of meager
Electric
: stock
Of' Northern
stock,
in¬
by a
case
this
Preferred Stockholders'
Since 69.9%
Committee.
of the
voting power was vested in the
senior shares and Minnesota laws
...
shares
Electric
22—"The fact is that
being proposed
not by the preferred for the
purpose of maturing liquidation
preferences but by the manage¬
ment as a step necessary for
compliance with Section 11 (b)
(2),' and we believe that the
rights
of
the - representative
standards
be
governed by
we
should
classes
the
have aoplied
where the re¬
quirements of the Act motivate
elimination
of
corporate
a
entity from the holding
pany
com^
structure."
:
Probably because the preferred
arrearages were of modest pro¬
receive
9.56%
of
the
Minnesota
ful
Railways common to be given
whereas it had cut the
of
United Light
>
United
Dec.
of
31,
1943, the capi¬
somewhat
Northern
States
of
in the plan
&
the
and Power common
stockholders from 8.8%
A
Light
to 5%. ;
analogous
set vof
circumstances confronted the
ings.
of
new
Oklahoma Gas
common
to
senior
operating
stockholders., At
market
of
of
stocks to their
common
existing
levels, sale to the public
operating
equities
holding companies
company
would provide
with ample cash for preferred re¬
tirements and
to the
reserve
stockholders
mon
com¬
substantially
a
larger
participation
in
future
earnings than was possible under
plans proposed by the three hold¬
ing
companies herein examined.
There was, however, one fly in
the new brand of ointment. As
indicated
by the foregoing ex¬
cerpts from Findings and Opin¬
ions, the SEC has consistently
held that a distribution of port¬
folio
tion in
ner
essentially the
before
as
and
same man¬
the various
rights of the senior stockholders,1
recognized in the security distri¬
butions, are largely preserved. But
where a holding company chooses
to^ ignore the privilege of satis¬
fying senior stock claims through
the
distribution
sets
in
a
of portfolio as¬
proportion and manner
approved by the, SEC, and seeks
to eliminate these claims with
this
ference
of
§EC
submitted for approval
by Standard Gas &. Electric Com¬
r
£
>
"The liquidation
the Prior Pre¬
shares, in the amount
59
preference
the liquidation is
common,
confronting
&
distribution
proceeds arising from sale to the
public of a part of its assets, it
class of stockholders;
thereby matures the liquidations
9 shares for each share of $6 preferences
of senior stocks by
Prior
Preference
stock, plus terminating their continuing par¬
dividend accumulations, or 18% ticipation in the enterprise. Ac¬
of the new common to this class cordingly, it must satisfy * these
of stockholders;
matured liquidation preferences.
Vs share for each share of $4 This may be seen in the refusal
Preferred, plus dividend ac¬ of the SEC's utility staff to ap¬
cumulations, or 5% of the new prove the retirement of holding
common to this class of stock¬ company preferred stocks at their
the
Page
Page
'
proportion
problem
Gas
the
on
company
common
.
Company; that; a
earlier, before granting
to the preferred its dominant vot¬
ing position, it held only a minor¬
ity of the votes. So the SEC said.:
few years
Delaware
the
Pacific
of
common
holding companies as a
longer looked with favor
provided that a two-thirds ma¬
jority vote might dissolve a cor¬
poration, the preferred stockhold¬
ers contended that they had the
holders.
requisite power to mature their
face values and its insistence that
liquidation preferences.- But the
call prices must be paid.
In commenting
on
the con¬
SEC pointed out that this ma¬
It becomes apparent, then, that
templated distribution of the new
jority of voting power was purely
common
stock among the three the device of selling a part of the
a product of one of its interme¬
classes of senior stockholders, the portfolio assets and of satisfying
diary steps in the elimination of SEC stated;
the liquidation preferences of the
States Power Company, of .Minne¬
sota. And having decided that the
Company served no use¬
purpose and
should be dis¬
exist¬
utility
group no
assets in mandatory, com¬
pliance with Section 11 of the
5 shares of California Oregon Holding Company Act does notf
operate to mature liquidation pref¬
Power common
of
senior
stocks, since
2 shares of Mountain States erences
the enterprise continues to func¬
Power common
12
&
liquidating
.
of
shares
3
Hold¬
proportions,
totaling
$4,776,374,
and were partly erased by cash
portions and were largely ex¬
before any distribution of port¬
tinguished with cash, the SEC
folio assets was made.
Moreover,
oractically the" sole asset''of the permitted the Northern States of
Delaware Company-rCbttsisted of Delaware common stockholders to
common
or
company witness — would
left no eqiuty for "the $4
a
have
of
the
As
their intrinsic
worth, while application of
the
highest appraisal presented
to the SEC — $123 millions made
ences)."
similarity to the United Light and
case. Again, no debt securi¬
ties were
involved, while pre¬
Power
solved,
to
after repeal of the Federal excess*
profits tax by Congress, earnings*
themselves
increased sharply,
re¬
no
f
was
earnings. ratio fixed by investors
not only continued to rise
but,
ing
in previous cases
maturing of liquida¬ talization
so
Company of Delaware case should
be considered next, because of its
con¬
measurable interest apart
lation
thefDelaware
United
interest at the the SEC again was the equitable
and to the detriment of distribution of the portfolio hold¬
common
a
the
as
greater
versely,
has
to
well
as
mon
by Section 11 of the
of
SEC said:
assets bore
Standard's
been
Standard Gas alone in
attitude. Since the times-;
this
the book value
Unfortunately,
of
had
organization plan.
.
A confusing element, was
statute but rather in
the. situation termi¬ jected during the hearings in
the
terms
preferred stock has a measur¬
able interest in an enterprise
the
liquida¬
-
■
situation created
the
of
attacked.
it is not incon¬
2,162,607 shares of no par
Fin// addition^. dividend
arrearages on the $7 Prior Prefer¬
ence
were
$27,159,526, those on
the $6 Prior Preference amounted
to
$6,320,000 and accumulations
on the $4 Prefererd were $34,589,851, or combined arrearages of
$68,069,377. r
which
denied participation under the re-;
.
if
.
sistent with the bankruptcy and
.v
ex¬
claimants
all the
to
terms
;
tribution,, and that all they were
to was 5 %. In applying
of rights"
and
common.
equity for the
some
shares
common
•
v
their rights are measured not in
^entitled
or
the
at
par
no
$100
task here js
to measure the present value
of the respective rights in the
18 shares of Wisconsin Pub¬
enterprise held by the several
lic Service common.
classes of Delaware stockhold¬
ers. To reach a fair result, we
In addition, Standard Gas pro¬
believe we must measure the posed to reclassify its outstanding
stock
into
6
million
rights on a going-concern basis common
without regard to the conse¬ shares of new common of $10 par
quences flowing, from Section value and to issue 5,202,135 shares
11, giving proper emphasis to of that stock, to be distributed
immediately
operative rights as follows:
(such as rights to current divi¬
10.5 shares for each share of
dends) as against inchoate rights
$7 Prior Preference stock, plus
(such
as
liquidation prefer¬
dividend accumulations, or 77%
clearly be to en¬
preferred
of the commonUnder
circumstances,
fair
and
given
2.67% to the
Class B common. But the SEC de¬
cided that the two classes of com¬
mon
stock
would
receive too
liberal treatment under this dis¬
"bundle
//Nor
As in that case, our
equitable compensation will be
Class A common and
this
the
rich
the
to
value, 757,442 shares of no par $4
Preferred of $50 liquidating value
Opinion, the
preferences of a preferred
v
to
stock—would
satisfaction of their liquida¬
6.13%
ate
also in per¬
Again, after noting the possi¬
bility of improved future earnings
for United Light & Railways, the
preferences,
stocks, leave
of
ence
ing Company Act, the require¬
ments of Section 11 do not oper¬
the entire earning
power of those assets—apportion
of which would otherwise have
been applicable to the common
petuity
,
„
$7 Prior Prefer¬
liquidating value,
100,000 shares of no par $6 Prior
Preference
of
$100
liquidating
shares of
cash, \ along
loan,;,
retire the debt securities, and,,
after taking care of the senior
said:
sary
to
as
nated by it—i.e;, as though no
liquidation were to take place."
\
proposed to give 91.20% of the
Railways common to the Class A
Preferred holders of Bower in
its
so
plan before the Commission
The
tion
amount,
all the assets but
common
the stockholders
Power.
its
by
.
13—"To accelerate the
Page
of
shares among
full
its
arrearages and translate them
into matured claims at their full
a
unnecessarily complicated
Power
affecting
and common stocks."
United Light and
•the existence of
to
As of July 31, 1944, Stand¬
$59 million of Notes
outstanding, while
stocks
consisted
of
3-38,348
Preferred, let alone the common
stock. In the light of this situa¬
Page 21—"The question pre¬
tion, the Standard Gas plan pro¬
sented
is
thus .substantially
posed to discharge its Notes and
similar to that in United Light
Debentures by the distribution to
and Power Company
.
where each
$1,000 of debt the following:
we held that, in reorganizations
$304.95 in cash
and liquidations made neces¬
itself, however, will not be permitted to operate so as to be
conclusive in the division of
assets between "the preferred
*
Although no debt securities were
involved, United Light and Power
bad outstanding 600,000 shares of
with
with the proceeds of a bank
,
In its Findings and
SEC
The preference
value.
normal
4215—of April 1, 1943.
Class A Preferred
and
stock
ferred
B common.
the
of
existence
The
ute.
though incom¬
discussion of the "bundle
—
imposed by the stat^
liquidation preference does, of
course, enter into the-"question
as it is
one of the bundle
of
rights belonging to the pre¬
ences.
opinion
produce * sufficient
and Debentures
,
/The first lucid,
Release No.
pany.
ard Gas had
.
uidation
philosophy of the Commission
with regard to liquidation prefer¬
plete,
of rights" theory appeared in the
United Light and Power Company
we
•
the
'
preferences,
sanction the destruction of
more
senior
—
of
than
$80,300,000 as of
can
in
be
stock with
the proceeds
successfully employed only
market
a
in
which; investors
common
bid the
stocks of operat¬
ing utilities to a sufficiently high
July 31, 1944, substantially extimes-earnings level. And con-;
ceedsVvthe, value of the , new.
versely, it is obvious that when1
Common stock of Standard Gas.
the
times-earnings
valuation
Nevertheless, viewing the en¬
drops to too low a level to pro¬
terprise as a continuing one
vide sufficient cash from the sale
apart from the requirements of
of a part, of the portfolio assets
Section 11, we think it would
to retire senior stocks, portfolio!
be unfair to allocate all future
assets must again be distributed
earnings to the Prior Preference
to all stockholders according to
stock in perpetuity. This class
the existing investment values of
is obviously entitled to
the great
bulk of the.new Common stock
and future earnings applicable
thereto, but to give .it 100%
would be to confer a windfall
it at the expense of the
junior Preferred stockholders
who, at the end of a term of
years
in the foreseeable fulure, have a prospect of par¬
ticipating in earnings of a sub¬
stantial amount."
:
upon
each
class.
But
;
when
„
this
,
t.
.
condition
- •
.
t'
pre¬
vails, it cannot be truthfully said
that
the SEC has reverted to its
"bundle
of rights"
theory. Actually, it never has departed from:
that theory; it has held it in abey¬
ance
while holding companies and
their bankers have enjoyed a
field
day, but it is still there, awaiting
the pleasure or need of the hold¬
ing companies. And unless the
SEC had approved market does an about-face
and
and its fairness had been returns to at least the levels of
confirmed by the U. S. District last
June, numerous holding com¬
Court, Standard Gas decided it
panies may again be employing
would "not be advantageous -to
the "bundle of rights" device.
adopt
it. : Since
the investing
To be sure, recent market drops
public was bidding for the com¬
do not necessarily mean that all
mon stocks of operating utilities
on
a
substantially higher - times- holding company integration plans
earnings basis than when the plan must be revised. As a
part of its
was devised, it had become possi¬
plan for compliance with the Act,
ble to sell portfolio holdings to
the public at -prices that would Commonwealth & Southern has
After
this plan
the
,
-
"
Nuftiberi 4538
LVolume 164
■
proposed -the sale by Consumers
Company of a sufficient
number of its common shares to
Power
provide the Sum of $20 millions,
while The Southern Company, its
new holding company to own its
southern
operating subsidiaries,
will sell to the public sufficient
common stock to provide $10 mil¬
lions. Obviously, at lower levels
than prevailed when these dis¬
tributions
'■'f'
i;
'i
THE COMMERCIAL & FINANCIAL
"S"5
nicely into a retreat to the "bun-r Of residents of Switzerland for
die of rights" theory; both re-* making—
serve the right to distribute port^
(a),transfers to other residents
folio holdings to preferred stock¬
of'Switzerland; -
will require a greater number of
common
shares to produce the
the management
.
serted
market
has
as¬
that, despite i the recent
declines, it intends to pro¬
with its program for the fi¬
ceed
nancing of Consumers Power and
The Southern Company "
r
•
Fortunately, both the Common¬
wealth & Southern and the Elec¬
tric Bond
tain
Share plans con¬
and
provisions which
escape
fit
cases
lieu
in
where
cash.
of
in
But
holding > companies,
a
(c) transfers
payment in kind. Yet,
unless the SEC will be willing to
market
rises
the June'
to
United
Transit
(b) payments
JEcranton
Pacific Gas
Power
^
r
ling
Public Service ol
Central
Maine
200,000
15
*10%
22 %
31
t40%
177,000
133,142
373,832
28
744,455
53%
147,000
1,530,000
169,636
204,153
8-22
2,040,000
40 1
35%
13%
41%
26
6-7
6-10
&
Light__;
Electric
-Ohio Edison
Cincinnati
—;
Gas
Average
—
Power—
&
Electric
prices
„
;—
_
*Over-the-Counter.
*34
*22
; t40%
'
*31
+32%
'
+10%
+33%
+27
31.46
-
+New York
Stock
be
Exchange.
$New
York
Curb
25.90
Exchange.
authorized
Anglo-Swiss
Monetary Agreement
(Continued from
that
permitted to
make to residents of the sterling
area,
are
page
j
v
*
of
England's
No. 1 Account with the Na¬
tional Bank of Switzerland,
provided that the balance
standing to the credit of
that Account is not thereby
|
:
f
*
-
3ank
-
increased above
v
of 86,750,000 Swiss francs,
-
.
maximum
a
or
(b) if the balance standing to
5
the
credit
the
of
Bank
of
England's No. 1 Account
With the National Bank of
Switzerland amounts to 86, 750,000 Swiss francs against
gold to be set aside in the
4
|
)
'
-
Bank of England's name at
the National Bank of Switzerland, Berne.
(2) The National Bank of Swit¬
zerland (acting as agents of the
million, plus the additional
referred
in the
credited at the official rate
5...
,
.
the
under
make
tory within the sterling area of
by the Swiss Government are to
considered as transactions ent—v
tered ihto by a resident of that
area
or
of Switzerland, respec¬
tively.
' :
be
use Swiss
disposal to
payments of a current
to
their
Article IX
nature to residents of the
.
'
\
and
at
sterling
The
Agreement, which
shall be subject to review and
adjustment after mutual consul¬
tation, shall come into force oil
the day of its signature.
At any
area.
(4) Notwithstanding that each
of the Contracting Governments
shall be alone responsible for its
monetary relations with third par¬
ties, they shall maintain contact
wherever the monetary relations
of the
time
Swiss
Agreement
intention
its
to
shall
cease
to
have
mean
wise.
ancf have
ment
to
.
whereof, the Under¬
signed, being duly authorized by
their
respective Governments,
have signed the present Agree¬
'the
are
,
In witness
the
and
It shall terminate
after the date of its
coming into force, unless the Con¬
tracting Governments agree other¬
expression
shall
Switzerland
affixed
thereto
their seals.
Done
'
in
duplicate in London,
this twelfth day of March, 1946,
in English and French, both texts
being equally authoritative.
be
transaction between
as
Contract¬
give notice
three years
the
Bank of England and the .National
of
may
of
of such notice.
Principality of Liechtenstein,
(2) Transactions between
Bank
either
terminate the Agreement and the
■
Confederation
considered
other
effect three months after the date
the;
and
thereafter
the
to
,;:;{{... Article 10
Kingdom;
present
ing Government
affect the interests of
one
the other. •{>;
2249*
the
sterling area and Switzerland.
(3) Transactions entered into
by the Government of any terri¬
'•
in
to
sub-
tional
quires
Bank
of
sterling
Switzerland
area
re¬
currencies,
other than sterling, for the pur¬
pose
of providing for payments
in
the countries where such
ERNEST BEVIN.
(L.S.)l PAUL RUEGGER.
purchase them through the Bank
of England against payment in
sterling.
The
/-
two
Contracting Govern¬
ments shall cooperate with a view
to assisting each other in keeping
capital transactions within the
scope of their respective policies,
and in particular with a view to
preventing transfers between the
sterling area
and
Switzerland
which do not
serve
direct and
Dept. of Justice Finds It Is Not Easy to Prove
Underwriters Are Violating Anti-Trust Law
(Continued from
cur¬
rencies are legal tender, the Na¬
tional Bank of Switzerland shall
use¬
ful economic or commercial pur¬
poses.
of the National
name
(L.S.)
Article 6
To the extent to which the Na¬
paragraph : (a)i above,
against gold to be set aside
(a) against Swiss francs to be
^
2219)
sum
area—.
.
by
hereof.
Article 7
The
in
Switzerland
Government
*16%
39
5-10
6-20
Electric-
5-9
6-25
Ohio
Dayton
Power
.
1,214,000
142,967
Tucson Gas Electirc Light'& Power-—
California
u
5-23
Power—_™™™__™„
zerland,
francs
,
v '
t26
44
5-2
Columbus & Southern
and
arrangements contem¬
plated j in
Article
9
(3)
*16%
5-8
New Hampshire™™—
area
the
Price
19%
use
1 nature to residents.of Swit-
"Switzerland"
to
residents
of
countries outside the ster¬
Oct. 19
Price
5-9
Light
&
& Electric
of
or
(c) transfers
may
4-26
Electric iw
Indianapolis
residents
to
Switzerland;
other
484,444
{
(1) For the purposes of the
strict the availability
of Swiss
present Agreement the expression
francs at the disposal of residents
"the sterling area" shall have the
of the sterling area for making-— ;
meaning from time to time assign¬
(a) transfers to other residents ed to it by the exchange control
of the sterling area;
regulations in force in the United
the.
4-9
™™,
United
to the extent to which these
Offering
Shares '
Offered
,r
Transmission
&
the
Subject to the provisions of
Article 2 of this Agreement, the
S\yiss Government shall not re¬
Swiss
Date
Stocks—
Common
of
under
(2)
the problem.
to
area
the
ar¬
rangements contemplated in
Article 9 (3) hereof.
>
solution
sterling
be authorized by the
Kingdom,
levels,
there would appear to be no
and
Government
inte¬
postpone holding company
grations until such' time as
the
may
Distributed During the Past Six Months
'Tennessee Gas
'
of ^
Switzer¬
to the extent to which these
;
In many
must accept
outside
land
shock of stock market declines.
m^ny preferred stockholders
doubtless will fuss because they
residents
to
countries
and Switzerland to
r—
'
,
(b) payments to residents of the
'
sterling area; or *
•>*
•/ ;
j
Offering and Present Market Prices of Operating Utility Common Stocks
.Va
.
.
holders
instances, the present
fixed number of dollars required. integration plans of holding com¬
panies will have to be revised to
Yet, according to Holding Comr
lower
market
values,
pany Act Release No. 6930, page reflect
13, covering an October 4th hear¬ which will mean not only added
ing on one phase of the plan, the work for utility executives and
further
SEC said:
costly. legal work, but
.
area
r-
sterling at their disposal to
make payments of a current
.
^
are
committed to a program of
selling portfolio assets and the re¬
tirement of preferred liquidation
claims in cash, the common stock¬
holders of these companies will
first proposed, it be called upon to bear the entire
were
CHRONICLE
which
.
up every
possible clue
no. stone
unturned, as it
in its
—
to leave
were
|
—.
attempt to ferret out what- j
of monopoly or monopolistic
practices' they believe can be
ever
found
in*the investment banking
field.
observers
Some
have
felt
that
the
launching of the Grand Jury
part of the investigation at least
timed to influence the
was
election
contests.
diversified elements
Bank of Switzerland at the
page 2214)
the
Depart-. writers are 'entitled only to a
ment of Justice now desires oral wholesaler's profit.
r;
>
evidence to substantiate or to sup- J
To float some new issue, art.
plement its other findings or its underwriting house may merely
suspicions. There is no doubt the borrow a sum of capital—though
Justice; officials intend to follow -admittedly perhaps a very large
rent
Article 8
that
means
That
,
sum, running sometimes into the
tens of millions—from some bank
for
a few hours, at least one official
sauce
contends.
Through,
dealer
arrangements
built
up
through the years, the underwriting house then quickly shifts
any
risk it
the
venture
may
have taken
over
to
on m
others
and.
cur¬
the money is returned to the bank
without delay, he says. In effect,
such
all
this
merely
means,
he feels,
thought they
that a bank writes out a check
Na¬ could make political capital out of which it
Bank of England, London.
gives to the underwrittional Bank of Switzerland shall
the Grand Jury's work at this {ing house heading a syndicate or
(3) The National Bank of Swit¬
be held arid invested only as may
time is in itself perhaps a reliable acting as agent for a group of
zerland shall at all times main¬
be agreed by the Bank of Eng¬
tain on their No. 1 Account with
indication that very little political dealers in the -morning and reland, and any Swiss francs held
the Bank of England a* minimum
capital exists in the situation1 ceives another check in payment
by the Bank of { England shall be either
way or that such political * for the first from the same under-^
balance, the amount~ of which
shall be determined in agreement held, and invested only as may be capital as may exist is of a very writing house in the afternoon.
agreed by the National Bank of doubtful
with the Bank of England,*
quality. The Justice of¬ For this, the underwriter receives
f
Switzerland* '
j '
' ; ;
ficials themselves
have a one- very good pay, he states.
:
(4) .The Bank of England shall
Article 9 .li-''■•*{{
track mind on the question of
Of course, it could be pointe#
at all times maintain on their No.
(1) If
the
two
Contracting monopoly in the underwriting in¬ out here that underwriting prac-*
1 Account with the National Bank
Governments adhere to a general dustry. They are probably not un¬ tice is as it is today very largely
of Switzerland a minimum bal¬
Any sterling held by the
.
,
.
ance; the amount of which shall
be determined in agreement
with
the National Bank of Switzerland.
international monetary agreement
or
if either Government changes
mindful of the fact the elections
its
is
monetary policy in such
a way
just around the corner but it
questionable whether they have
are
because
that the provisions of the present
(1) The Bank of England shall
concentrated much attention upon
Agreement would be affected, the
Article 3
.
them. It is probably true that the
ward
two Governments shall review the
initiative lor
to
{Capitalizing {on the
Agreement with a view to mak¬ Grand Jury investigation most
ing any amendments that may be likely has come from sources out¬
of
the
twenty-day incu¬
bation period required of all new
issues by the SEC. Formerly, an
underwriter
might
actually
for¬
substantial amount
issuer at the initial stags^
cash in
some
of
an underwriting venture, tak-*
ing his chances on his ability td
side the Department of Justice,
raise the remainder of the* money
land,. against all or part pi the required. In any event, they agree
To 'the charge the "current in*
later through the traditional un¬
Sterling 'balances - held1 by that to meet for the purpose of mak¬
Bank, either Swiss francs at the ing such a review not later than vestigation is "secret," it can be derwriting channels, including the
official rate or gold to be set aside twelves months after the date of replied of course that all Grand public offering. This did consti¬
investigations are secret. tute true underwriting in the real
at the Bank of England in London. the coming into force of the pres¬ Jury
Thus, there are or can be no hid* sense of the term. But it is the
ent Agreement.
.
(2) The National Bank of Swit~
den implications to the fact the
SEC and the laws giving rise to
(2) While the present Agree¬
zerland will have the right a any
Justice Department is not public¬
the SEC and not the underwriterstime to sell to the Bank of Eng¬ ment; remains in force the Con¬
izing th6{ details of its Investiga¬ who have changed all that.
land, against all or part of the tracting Governments shall coop¬
tion.
Swiss franc balances held by that erate to apply it with the neces¬
The
Justice
officals are also
From what can be learned, the
known
to
be {concerned
over
Bank, either sterling at the-offi¬ sary flexibility according to cir¬
The Bank of Eng¬ price-fixing practices of the un¬ what
cial rate or gold to be set aside at cumstances.
they call the "family rela~ >
derwriting group are indeed re¬
the National Bank of Switzerland land and the National Bank of
tionships" that 'have developed
ceiving the closest scrutiny of the
in Berne,
Switzerland, as agents of their
between underwriting houses, se¬
'
investigators. The Justice officials,
respective; { Governments,
Article 4
w ill
curity dealers and issuers. The
maintain contact on all technical in fact, raise the question of just
officials are understood, too,
(1) Gold set aside in Berne in
Questions arising out of the Agree¬ exactly what constitutes the un¬ to
be
taking the view, that
accordance with the provisions of
derwriting function. It probably
ment*
the Wa k e-,u p ot | Underwriting;
Articles 2 and 3 of this Agreement
would be correct to say that some
shall be at the Bank of England's
(3) As opportunity offers, the of the
con¬
investigators at least are syndicates* follow - certain
Governments % shall inclined to take the view that sistent patterns not sp muck
free disposal and may be exported.' Contracting
have the right at any time to sell
to the National Bank of Switzer¬
.
.
Swiss
Government)
shall
sell
Swiss francs to the Bank of Eng¬
land
(acting as agents of the
United Kingdom Government)
may
be
required
tions
in
force
as
for
payments
which residents of the sterling
area, under the exchange regula¬
in
that
area,
are
permitted to make to residents of
Switzerland—/
■
?,
(a) against sterling to be credited at the official
.
*
rate
zerland's No. 1 Account with
a
.
the Bank of England,
v
vided
a;
*
that
)
'
r
.
above
V
5
•
'
.
;
'
}•
-
of
£5
million,
plus
sum as may
be determined by the Con-
'*[■'
•
mum
maxi-
a
such additional
f;
,
pro-
balance
the
standing to the credit of
that Account is not thereby
increased
^
*
to
the National Bank of Swit-
tracting Governments in the
light of the estimated balance of payments between
the sterling area and Swit-
zerland,;or
;>v
.
_
,
the
credit of
the
National
Bank of Switzerland's No. 1
b-
Account
I,
England
with
the Bank
amounts
to
of
£5
,
>
(2) Gold set aside in Lbiidon in
accordance with the
Articles
ment
2
and
shall
be
3
provisions of
of this Agree¬
at
the
seek with the consent of the other
interested parties—
: ;
National
'
'
Bank of Switzerland's free dispo¬
sal and may be exported.
;
underwriters
as a
group are
little
better than wholesalers of securi¬
.
(a) to make Swiss francs at the
disposal of residents of the
sterling area and sterling
at the disposal of residents
The underwriters, by
ties.
adopt¬
language of their own—like
the lawyers and the doctors—have
surrounded their activities with
ing
a
of Switzerland available for
riV. Article 5
;{y
.
a
Article 2
of
this Agreement,
the
Government of the United King¬
dom shall not restrict the avail¬
ability of sterling at the disposal
•
;
V
and
payments of
>;r>
• ■,
(b) if the balance, standing to ,--V: (1) Sub j ect to the provisions of
•;
,
definitely should not, do not have,
they hold. As wholesalers, under¬
writers
are
no
different
than
ture
tries
area
to
a
current na-
residents
of
coun-
'outside the sterling
Switzerland;.and
and
air
of
mystery
which
they
•
wholesalers
of
any
that could be named,
(b) to enable residents of coun¬
tries
outside
the
sterling Consequently,
they
according to
risk,' but to
divide the available business be¬
to
divide
risk
the ability to assume
tween a
few firms in a more-or-
less closed
Justice
circle. In a sense,
Department
the
the
question of family relationships
syndicate formation to pricesince it feels that syn¬
dicates so constituted can elim¬
inate
competition
by
steering
in
fixing,
commodity
they believe. business along
hold under-
links
nels.
very
definite chan¬
:
2250
«*»i
THE COMMERCIAL & FINANCIAL CHRONICLE
Thursday, October 31, 1946
n
over
Collective Bargaining With
(Continued from page 2209)
sabotaged their deienses. You
and
remember
how
the » President
marched up the Hill to demand a
law to protect the
economic
States
the
for
tolerated
down the Hill to veto the law
that
relations.
regulation of function
On
tyranny
until
economic
the
you
gloom of
a
factual report
quires
imagination.
the optimism of the
It
calls
man
re¬
erties.
tate
Nd Crippling of Labor Unions
who, at
An
advance their selfish aims.
court.
a
automobile
knocks
down
Agreements
a
between
or
even
the function
agreements. But it
of government to
provide the
ways and means and
orderly surroundings in which
the
free
to
may freely bargain; and
men
provide
assurances
tracts Once made
It is the
thait
con¬
be enforced.
can
neglected task of
our gov¬
ernment to fulfill its ancient
to
its
their
force
assure
citizens
duty
that
lives shall not be ruled by
and fraud and fear.
,
It is the duty of the government
to establish freedom of collective
compulsory arbitration—the bind¬ to force and violence in Order to
"
<
ing decision of
for
/not': the
government .'to, dic¬
tdvtry to shape the
of
terms of these
is
monopolies, until they
an
A man and wife separate; and must be primarily to make avail¬
angry, frightened Congress had monopolized in the name of labor.
able orderly procedures for the
■passed. Y:r /•
But the tyranny of a labor boss or custody of the children becomes
■ • • ■;
What you want to know
the most precious and priceless just settlement of labor disputes,
today, a labor monopolist is just as de¬
and what about a hundred mil¬ structive of liberty as any other desire in the world—far more im¬ to require all parties to use those
peaceful procedures, and to pre*
lion
other
Americans
want, to tyranny. It is the duty of a gov¬ portant than any wage increase.
know, is: How long is this thing ernment of free people to stop or But neither father nor mother is vent the disruption of peace by
those who, because of
ignorance,
going to last?
To
answer
this to destroy every newly-rising pri¬ legally free to settle their dispute
vate force that menaces their lib¬ by force. They must submit to a brutality or malice, would resort
question without imposing on
the
competitive
truly
a
industrial
an
to
break
it.
But,
even
contrary,
the object of new labor
legislation
though my livelihood and every¬
must be to free
management and
thing dear to me depend upon
getting you to agree with me, 1 labor from dictatorial controls, by
labor leaders, by large
cannot
use
employ¬
force* intimidation
and extortion as the means to save ers eh by government.
The object of new labor laws
myself.
1
long
of organized mobs,
they organized in the name
of labor; The United States never
people and their
and then
marched tolerated for long the tyranny of
government;
labor
of Federal
gotiation, in
new
legislation must not • be
increase
ment
The United
monopolies.
never
Club
a
again that the object of
labor
bargaining without intimidation,
and dictation, to insure, collective
-
employer
bargaining with open hapds.and
the duty of our pedestrian who may be crippled and employees Upon the terms of
voluntary
cooperation, to put an end to collective bar¬
to cripple or to de¬ for life. But the law does not per¬ their
shining." It
mit the Injured - man to collect should be the product of free ne¬ gaining-with a fclub.
calls for the almost offensive
good stroy labor unions simply because
cheei? of one whof in November the powers ■ of organized
labor damages with a gun, or to be¬
burbles:
"If. winter comes i can have been abused. It is not the siege the driver's home and in-;
spring be far behind?" In short, duty of our government to re¬ timidate him Jnto" a v; settieme^
it calls for the report of one
who* establish the powers of property There is a compuisory-arbitfatioife
the start of the
-"Soon the
,
sun
rainy
it
But
season, says:
not
is
government
will be
to dictate required by law through which
one man may be
compelled to pay,
■j. heart,
a . boy scout—wanting to wages and conditions of employ¬
Vderve God and country and to help ment to wage earners: Let us not or another may be denied, com-other .people to do the things they forget that those powers were also pensation for a ruined life.
*•?
V'< -''v'.
l',
S"*
\'A
S'\U'
V {
abused. It is the duty of our gov¬
don't want to do.
Compulsory Arbitrationernment to maintain a democratic
though bald and gray, is still, at
International Trade Conference
and managers
owners
hostess
,
(Continued from
-
fV.
Selfish Interests
Must
Be
j balance of power between eco¬
nomic interests, and to maintain h j
fey the misfortune of being horfl really competitive and free econ¬
24 years
This balance of power is
before the Boy Scout omy.
Movement was born, I have never frequently Upset by laws, either
been art authentic boy scout, feut well-intended or deliberately de¬
in 42 years of law practice I have signed to favor some special in¬
Subordinated
>
spent several thousand hours trying to persuade my clients to do
terest.
things they do not want to do, be¬
cause that way they might serve
tect
ing \
God and country as well as themSo perhaps there has al¬
•
expense
selves.
•
be intended to
pro¬
of
liv¬
standard
national
a
or they mOy be designed to
favor a iew manufacturers at the
of. the rest of the people.
my
meddler,
I
as
private
a
have been trying to
convince tough labor unions
hard-boiled
selfish
must
be
subor¬
the instruments of oppres¬
'
compelling
Immunity
from
disputes
allowed
himself
frequently
the
•
and the flouters of law
peace
and
to
a
pay
will
be
confined
largely
to
the fighters, and little public dis¬
devised.1*
recent
demand
utterances
that
I
It is
no
ish desires and low selfishness of
their savage'ancestors. When such
answer' to
a
nationwide
industrial
for
world's trade
hangs
on
American
imports..
While current discussions stem
from the Atlantic Charter, Lend
comfort or hardship will result.
anti-monopoly We need not strain ourselves in an
effort to become wholly civilized, Lease, Brettori Woods and state¬
ments
attending announcements
all at once.
reaching and vicious monopolies
ever
me. I only think that labor
leaders, like all other citizens,
immunities
should
cripple the unions.
stand
labor,
to
peace*
unions,
or
merely to enact repressive laws to
By
will
March
be
the
ready for
under the
persons
not
come
in
it
conflict
may
be
hocent
neighbors.
It
is
always
recognizes that ultimate outlaw¬
ing of exchange restrictions could
be circumvented by
trade con¬
trols. Similarly, establishment of
world
a
Food
food
board
the
under
and
Agriculture Organiza¬
of British ,and French loans,/ in tion would greatly interest the In¬
which latter the borrowers af¬ ternational
Trade
Organizations
firmed agreement with the gen¬ The Bank of England is directly
eral c principles of the American interested in three aspects of the
trade proposals, the current Lon¬ current conference, namely Indus¬
don. gathering has before it not trialization,
Buffer
States ' dnd
those proposals but instead a sug- Employment.
It wants to protect
gester charter to which not even its absolute independence so that
the United States is committed.
International
can commit
the Bank to any policy,
in this
Conference, for instance, there
have been proposals that national
ization have observers here who
Because coordination is indis¬
altogether wrong to let
that all labor leaders should be either merely to repeal the laws
them «lug it out, So long as they pensable, the Fund and Bank and
put in jail. You would misunder¬ granting special privileges
and don't disturb or harass their in- the Food and Agriculture Organ¬
believed
States
bilateral
,
license to force the public Ind try to / talk its: language; but
tribute to the most far- who, underneath, have the brut¬
order, in harsh artd even rude
.language. You might think from
attainable.
i United
,
laws may be granted in order to
free labor from undue restraints
life*
how
.
xi--
.
upoii concerted action; and this
Sometimes it seems that there
But, the boy scout has been get¬ immunity may
be transformed are; several million persons in the
ting old and intolerant of stupid¬ into a license to monopolize the United States today who only
ity, treachery and greed. He has production of the necessities of wear the clothes of * civilization
Of
j-
2205)
and
dinated to the public welfare.
luxury of denouncing the enemies
uTke Ameriqan draft of the proposed International Trade Organi
i
ization charter has been made the
page
negotiations
basis of the current discussions. trade agreements' authority with
forbidding all
countries comprising the preparaConsidering
demands
already
strikes*/that law would simply ex- :
voiced by others* it will
emerge tory committee now sitting here.
tend an essential process of civ¬
with
various
not, unimportant The March meeting therefore will
ilization into the one remaining
modifications and escape clauses. be "the proof of the pudding,v
field Of social conflict wherein
But American
delegates express while the geheral International
men are now permitted to settle,
Trade Conference called later w
their differences by force and vio- optimism at' the outlook.
British, in public and private 1947 to adopt the International
lance.
Trade Organization promise*-to
But it is not necessary to ad-; comment, lead in emphasizing the
subordinateness of any Interna- be anticlimactic.
iV-£i
vocate such a law
We can tol¬
tidrial Trade Organization to the
The World Bank is very anx¬
erate economic battles and even
maintenance of prosperity within ious that the International Mone¬
physical violence within limited
America, because so much of the tary Fund be strong and the Fund
areas wherein losses and suffer¬
bor
sion by organized labor.
and
employers that their
interests
come
.
the arbitration of all unsettled la¬
recent .years
lic official artd then
y
If there were a law
Labor laws may be intended to
a boy-scoutish quality
thinking, particularly in .prevent the oppression of unor¬
when, first as a pub¬ ganized labor; and they may be¬ ing
been
ways
in
Tariffs may
"
no agency like the
Trade Organization
directors
the
of
Fund
Bank
and
participate in discussions.
should pursue their policies based
While Indians and some ethers
signed to require; men and women
on
home employment conditions
laws and to keep the peace—or answer for the
government to to behave better than they are would like a
perfectly free hand and the like.
However, the Bank
«lse be put in jail,
stand aside and let organized la¬
willing to behave.
to protect growing industries arid
is jealous of its function to judge
S There is just one reason why bor and organized employers fight
It is, however, practical to re¬ therefore registered blanket ob¬ cases on
their merits and feels that
industrial warfare has disgraced out their disagreements, while the
quire by law that all persons con¬ jection to certain features of the the sale of its securities would be
strength of the nation is exhaust¬ form to the
Pur nation, ruined our
minimum standards of proposed Charter,- the Australians,
economy,
impaired by any such interagency
ed in civil warfare*
and stifled our
prosperity in the
good conduct whifch a strong ma¬ who also seek industrial growth, tie-in. It has explained this viewr
last year, That reason is
that, as
jority opinion approves. And so, came with concrete suggestions point here and so blocked the
Time for Government Positive
a
people, we haven't had the com¬
for modifying the American Char¬
I believe
Action
ijt is practical how to
proposals mentioned.
be
notified
to
obey
the
and political
courage to
write ; laws n providing
peaceful
; ways for the just settlement of lavbor disputes and
requiring both
Nor is it
mon sense
:
■
i
employers and, employeesi to obey
those laws.
,
Law Permits Force to Be
:
You and I have
no
right to
demn labor unions and their lead¬
for using force to win their
battles,
land
long as the law of the
only permits force, but
so
not
take
positive
evils
that
its
a
action
have
unwise
to
time when
Government
been
actions
to
must
undo
the
wrought by
and
its
timid
inaction in the past. It is time to
the supremacy of the
reestablish
all
con¬
ers
...
come
Federal.
public interest in the settlement of
Arbitrator
\
We have
the
conflicts
of
private
difficult
to
enforce
any
law de¬
an
interest
that have serious effects upon the
general welfare.
if you are one bf those sloganruled persons who shudder and
enact laws which will
peaceful
settlement
require the
nomic conflicts which
all
eco¬
ity Of the organized
have
come
to
wage earners
realize that
wide¬
selves far more than any gains
they may achieve* even by hn ap¬
parent victory, in the end.
It is
a
..
.
means
a
law
controls.
and
order—which
rule of public force for
But I
ize
am
not
permitted to
-
v ;
0^:
an
Need
More
The Silver Situation Being
Critically Examined
^
Explaining Britain's silver LendU
Lease repayment plans to Pariia-f
ment on Oct. 15, Chancellor of
quotas can meet underdeveloped the
Exchequer Dalton, observing
countries' needs. Some compro¬
that
sliver
has
now
become
toa /
views
expensive to be used, any longeip
as a means of currency, added!
Empire preference naturally is "We and India cannot possibly
the big issue between the United buy this silver in: the market."
States and the British Empire.
It Mr. Lokanathan, a member Of
will be remembered that imperial India's delegation here, discussing
discussions preceded the present the foregoing;"with the "Chron¬
meeting. / Clearly the British and icle," today stated that there is
Dominions won't surrender any rio •'
present advantages without alter¬
native benefits on the barrelhead.
This firm position held by public
opinion
was;
clearly revealed in
the Bretton Woods debates. ./
•
A
The present conference is now
expected to conclude sometime in
November instead of December as
was
earlier thought. i Before its
next meeting in March, probably
in Geneva, an interim drafting
subcommittee will carry on
organ¬
Federal Regulation
gang to compel you to sell
the protection of thd public inter¬ to
of Labor Relations t
me, or to prevent you from sell¬
est, and the outlawing of any rule ing to anyone else. If I have a
These fadical and reactionary
of private force for private
gain. contract right I can sue you. -If oppositions must be overcome be¬
No government worthy of re- there is
fore progressive and truly liberal
competition I can deal
Ispect can tolerate the tyranny of i with others. If you have a
mohop- laws can be enacted. That is why
orgahized mobs or the tyranny of1 oly I can call upon the govern¬ it should be
emphasized ovei: and
a
propose
of these different
spread and prolonged stoppages of mise,
production cost the workers them¬ therefore must emerge.
,
of
Australians
International
speedily decided in order to avoid ative and permissive functions.
serious injury to the public, Fur¬ The Americans, however, feel that
thermore I believe that a major¬ subsidies rather than tariffs and
healthy sign that We have
the
at
words
"com¬
.actually makes force the final ar- shrivel
at least begun a national debate
biter of labor conflicts.-, But I do pulsory arbitration," just relieve
over
what kind of Federal daw
condemn labor leaders and busi- your ; tremors ; b^. advocating an
wouid move us; forward; toward
"administration Of justice under
; ness leaders who oppose
any ef¬
industrial peace.
Those who do
This
is
th£~ sweetfort to establish by law the ways the law."
not want peace, those who believe
and means of peaceful settlement SoUhding description of that com¬
they profit by continual warfare,
and to place a legal duty
disputes
upon pulsory" arbitration: ■ of
will, of course, find plausible rea¬
both management and
labor to which has been accepted for cen¬
sons
; to.
oppose
any
legislative
give peaceful methods a fair trial turies as. essential to the mainte*
program.
Others, exasperated by
before they begin to make war on nance of a civilized society.'
years of expanding bureaucracies
each other.
You and t may have a violent
and political interferences, with
i / Private armies and private wars
disagreement * over whether you individual
liberty, will protest
are not private business. The
pub¬ will sell me goods that I need ur¬ against more laws and more
po¬
lic has a right to insist
upon a gently at a price that I can pay. litical
rule
The
ter.
Industrialization
ought to be Commission, with certain affirm¬
of
where
leaves
off. That
committee
will
be
this
interim
much
smaller
than
the
pres¬
quired" India to treat silver any
differently from any other Lend-*
Lease goods; * Although India has
used the silver for coinage which
can
now
"If
one,
we
recovered* as in the-
Mr. Lokanathan
have to acquire the"
silver for return at
a higher price
when- we got it,:
shan't consider it very- fair." v
than
we
prevailed
Doubtless
silver
Senators
in
for ounce repay¬
ment thought they were repeating *
the Pittman Act, which subsidized
the market by
Treasury, buying.:
Actually
by
the
Lend-Le^se
clause they have pushed silver •
another long step into demonetisecuring
will prepare language
to carry out-the decisions reached
here, and-will draft further suggestions' where. ,no agreement' is zation.'
ent
be
United Kingdom,
said:
'
ounce
.
[Volume 164
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4538
have
Legal Aspects of Bretion
Woods Agreements
f
i
.
.
to be placed in the
(Continued from page 2207)
proper organs attempt to promote, but in the
iptional setting. The
tions
provided
and
Social
had
far
for
United Na¬
the Economic
Council,
too
which
emphasis.
little
work will be most essential in
the
expects
quite interested in the avail¬
ability of these
they will find in
iary
the
agencies,
of
Which the Bank and the Fund
two of the most
important.
of the great fears of
tries
in
foreign
of trade and
One
coun¬
cooperating for the
toration
are
res¬
business
is
the
possible development of de¬
pression
and
unemployment in
the United States. A
high level of
the
use
Purchasers in the tJriited States
are
coordination of all of the subsid¬
international
to
second method.
has
Its
it
meantime
of
statutes
securities,
but
that
many cases
various
the
states
exchange controls which
of
the
agreement,
courts
will
contracts
not
that
United States
enforce exchange
violate such con¬
trols.
Your committee has had
driubt
some
to the extent of the in¬
as
terest of lawyers and therefore of
the Association in the activities of
the Bretton Woods organizations.
yet permit certain kinds
ment bankers are much interested
this
intermediaries in
as
tion.
connec¬
Insurance
companies
are
very possible market.
lii the State ;Of New York [the
and
tions
be
peace. The
organiza¬
interested will
principally
the
International
Labor
Or¬
ganization, the proposed Interna¬
tional Trade
Bank
and
Organization, and the
the
Fund.
The
trade
already been amended to permit
Statutes
these
two
organizations
the financial
underpinning for the
operations of the other two.
The bank
Forty-four nations set up the
Bank and the Fund,
and, after a
vigorous debate, they were both
have -been
be
concerned
with
the
years, a successful form Of foreign
of the
arid it is
most
world ^economy,
cur
countries,
which
has
Especially in the last 25
to
insure
thoroughly integrated and uni¬
foreign • policy in this field
of activity. This
council is made
form
Securities
The
a
and
Exchange
in the
are
position' iihat England CCctfpied a
ago and mole, as
himdfed yekrs
by
some
areas,
the threat-Of War. Their
war or
Wide
Estabiii^mOht, howeve^End
among the nations of the world,
become
can
guarantees
financeHthe
expansion of
trade.
of *our
one
of
surest
In this 're¬
peace.
Olemerifs which deserve the 'sym¬
Secretary of the Treas¬ the
chairman, the Secretary of A technical committee advises the
State, Secretary of Commerce, the National Advisory Council, and
op of the
ury as
chairman
of
of
ernors
the
the
Board
of
Gov¬
Federal
Reserve
and the chairman of the
System,
Board of Directors of the
ExportImport Bank. The present holders
of
those
offices
make' an
ex¬
tremely strong committee: Messrs.
Snyder, Byrnes, Harriman. Eccles,
Martin
(former head of the New
York Stock
•
Two
provisions
of
the statute instruct the American
of the Bank and
representatives
the Fund to
which
clear
secure
would
that
interpretations
make
the
it
Bank
author¬
ized to make
major stabilization
loans and that the Fund was
not,
but would be restricted to
current
operations
other
covering seasonal and
similar
influences
on
ex¬
change rates, as well as possible
sudden 'emergencies. With these
amendmen s,
passed with
ties
in
the
statute
comfortable
was
majori¬
both Houses.
The Bank got into
operation last
May, and the Fund became
tive
at
the
end
of
the
its subcommittee
[ac¬
summer.
on
investment is
Fund
directors
,
have
as
yet
not
so.
The first item which is of
tern
to
lawyers is the
fact
that
the Bank is
now laying the
ground
work for the issuance of its de
bentures.
It
struction
Securities
and
Exchange
-
Legal
Status of Fund and Bank
Litigation may develop in con¬
nection with
operations of the
Bank, as it has occasionally for
stitutions,
and
the
of any
venue
statute fixes
such actions in
the
the District Courts of the United
removal
authorizes
and
States,
from State courts.
finance
Fund is of
12
some
'Section
interest.
of the Act
gives force and ef¬
fect within the United States, its
territories andtpossessions to cer¬
provisions of "the articles of
tain
tures
.
method is the
one
which it will
Additional
these
maturities
time
one
and
other
will
may
month maturities.
this
year
$46.3
As
were
outstanding. Jlowever,
and
people expect these
many
be
rolled
over
upon
1953-51
to
Specific
your
Issues that
ten
issues
prefer¬
own
apparently
right
and
are
the 2s
now are
1954-52.
These
the issues pushed
by the
Treasury Department :during the
War Loan Drives for
attracting
Dank funds. They are large
issues,
widely-' held and experience a
broad
market. -As
holders
of
time
goes
earlier
on
maturity
the pre-r
secure
rhium they have on them it is
likely they will look toward the
2y4% bonds of 1959-56. Trying to
guess
whether
the - market
is
lower or will return to
ligher prices does riot appear to
be part of investing on a continu¬
ing basis for, income. If you keep
well
maturities
spaced
always
take
have
funds
advantage
and at the
into
another
of
bank
held
securities
be
in this issue.
the
any
pay
it
is
off to
Some holders of
higher
to
rates
sacrifice income gambling on buy¬
ing at the bottom.
•;
However, I know
terested
in
are
in¬
outlook
the
you
for
the
future. It appears to us the future
of the money market is dependent
the demand for loans, the
policies of the banks concerning
their investments and the policy
of the Treasury Department. It
seems generally agreed that com-
upon
merical and real estate loans will
continue to increase. Opinions of
banks
as
expressed to us
are
vailed.
A
Chicago
the market cannot
banker
move
up
feels
much
under present conditions. He
exy
pects money to be tight agaiti
early in November arid mid-De¬
cember.
One
New
banket*
York
long term bonds Will be ap*
preciably higher next six months.
says
A
western
Pennsylvania
banker
the Treasury io go the
limit to keep rates low on governriiehts. A/Kansas City, bank be¬
lieves
governments
will
move
expects
municipal and
of
will
you
available
time you will not
same
gradually
logical to expect
One
Some
■
along
owe r
savings
2V2
feel
others
the
defi¬
think the
under 102,
buy
a
is
everything.
banks
are
with
issues.
corporate
bearish von
nitely
long
1
York banker
New
is
market
in
a
notes, expecting at the
most a refunding into a %% cer¬
tificate, are doing their own re¬
funding now by purchasing in the
market outstanding issues that are
acceptable .to them.
of
billions
banks
are mostly held by com¬
mercial banks and if the Treasury
wants to concentrate on reduction
offered to refund
certificates of indebtedness and .90
notes
depend
most popular
hand,
maturing issues. Since that time
all refunding has been done with
13
maturities.
certificate. The notes, on the other
long
flexible "policy. In this connec¬
tion, Dec. 1944, was the last time
anything except 7/8% certificates
28,
than
insurance companies and for this
a
or
investors
reason
funding operations would call for
was
are
ex¬
be offered to in¬
companies and savings
;90 notes
this
due
cates due Dec.
banks at another time to take up
some of their funds.
Normal re¬
12
maturities, and y3 in five
year
,
buying range now. We have seen
many banks giving up there cer¬
The official [pattern fprtliis mar¬
ket has been consistently repeated
and the Treasury has, perhaps,
that bother each month,
iy2%
been
tificates
short notes for
and
1950
of
2%
and
iy2s
Rather
issues.
than wait until the certificates are
refunded
partially
extending
the
having
and
portion
they
are
feel
they
they will continue to hold. The
policy of the Treasury Depart¬
ment has bben pretty well com¬
Treasury will continue indefinite¬
ly refunding with only 7/s % cer¬
maintain what it considers de¬
sirable. The tact that the corpor-. mented upon. The % to 2% range
seems
assured. I do not believe
ate and
ality; thb ability 10 Contract, to
acquire and dispose of property,
and to
assets
from
sue
arid
in our Courts.
Their
archives will be free
interference; their commit¬
tees will be treated with the same
respect as
those of foreign gov¬
employees will 'have
on
'their
countries.
own
protected
tory taxation,
other
diplomatic
Salaries
The
in
pay
their
The securities will
against discrimina¬
but will have ho
special tax privilege.
Fund Immune from
Bank
differ in
tachment
ohe
and
the
respect:
Suits
Fund
the
except
to
When
other
tificates.
will
Fund
execute;
a
cash
countries
now
to
of¬
fer suitable investments has been
pointed
out
by Federal Reserve
and Treasttfy officials When they
say they do not see Why long
obtained by
the Treasury
largely through the heavy sub-;
term investors should call iipon
scriptions to the Victory Loan
the Treasury to issue acceptable
Drive to reduce
the debt. The
bonds. The Treasury is not now
debt reached its
peak figure of
seeking new money, and they be¬
practically $280 billions on FebJ
lieve these funds should go to in-;
28.
This was the peak after a
steady "increase from a mere $16 dustry rather than rely upon gov¬
billions at the 'end of 1930. Our ernment financing.
Treasury or Federal Reserve
Officials, however, want to see a
to the high prices estab¬
the
return
lished
,
$200 bil¬
and $80
savings bonds and notes,
guaranteed and bther special is¬
sues.
The subsequent pay offs of
maturing and called issues will
lions
marketable
issues
billions
ably interested in the adjustment
or
maintainence Of your 'portfolio
to provide the
liquidity. It is
generally felt that in spite of the
-outstanding
Treasury certificates to $30.5 bil¬
that
they
lions after the Nov.
into
the
is
the
1
transaction
completed, other Treasury notes
have
been
reduced
$1.2 billions
Treasury bonds about $2.3 bil¬
lions. During
the same period,
and
however, savings bonds and
so
a
net increase
that the actual debt reduction
as some
making
will
getting back
business and
commercial
loans,
you
are
to
hold
large amounts
reason
or
be
three
year
time
compara¬
Of
market
to keep it
orderly. Under present conditions
WO see no reason fdr' losing con-*
said it does not make the
but
simply
serves
the gov*
fidence in !the stability of
ernmerit bond [market.
your
govern¬
certificates
or
bonds. At the
it does not
New ^Chi. Exch.r
'CHICAGO,
seem
con¬
ILL.
MfcniberJ
^--Hempstead
Weshburne, Secretary of Harris,
Hall & Company, 111 West Mon¬
roe
Street,
was
bership in the
change
by
.
elected to mem¬
Chicago Stock Fx*
the; Board
govern-' ernors, it was
According^, there is
why all
should
ments
same
now
banking
ment bonds.
two
bankers have told us
continue
tively
no
spe¬
largest iricome re-!
turn and necessary
fact
reduced
early this year; The Open
times
Market Commitee has many
Viewbflallthis ybuareprob-
In
debt consisted of almost
cial-issues have had
member
?powerful
more
municipal market
The important development this
year has been the use of surplus
have
judgment,
>
at
of
maturities
$3,768 millions certifi
1, and $3,261 mil¬
lions notes due Dec. 15. $3 billions
of the
certificates are held by
year
term bonds may
Feb.
of
never
Bank
will-
the consent of that
country; or,
by guaranteeing the loans made
by private' investors. The latter
different
offered
surance
20%
Fund will have legal person¬
the
be
be
combination
of
is
it should not be expected that the
the
be immune from suit unless
or, by using the funds
by the sale of its deben¬ iit consents to be sued, and its
in a member country with
property will not be subject to at¬
paid in;
raised
a
bank
and
Both
agreement.
recon¬
development
through the direct lending of the
Currencies or gold in which [the
first 10% 'of its capital has been
hand, if a re¬
develop the Treas¬
would probably offer bank
eligible issues to ^expand the credit
base. It is entirely(4ikely that un¬
less conditions run away on either
side, actual Treasury policies will
or
The status of the Bank and the
and
can
vember pay-off the cash balance
will be about $6 billions.
ury
sues
takes
con-
low
tremes. As outstanding issues ma¬
ture or become callable, bank is¬
the
Commission.;-
immunity, though they must
Of Concern to Lawyers
V-
current
of
The
-appropriate
interpretation
just referred to has now been ernments; they will be immune
adopted by the Bank, but the from taxation. Their 'officials arid
had time to do
at
be
perfectly
was
lend
headed bv Mr. Walter La^chheim,
similar international financial in¬
Exchange).
additional
to
cession should
debentures under
Securities and Exchange Act.
sized
deposits in cash, with investments
divided about % in one
year ma¬
turities, % in two "to four year
,
rates. On the other
its
spaced
income.
more
by a banker of acpercentage for an average
moderate
2% issues want to
seriotrsly threatened and
perhaps prevented in
perhaps fhe Only spect, the International Bank End
major creditor nation which can the Monetary Fund are essential
since the Bank aoparently expects
qualify
provide
One suggestion
ual
and
are
the greatest rind
Commission is directly concerned,
to
be
Especially itapoitant for En appropriate-division 'Of labor; going
the Uriited States. We
willing
to
Additional-
could
investment. Of course such enter¬
Banks and
Government
sufficient.
prises
consulting with various represen¬ We have the same opportunity pathetic interest " and -attention of
tatives of these groups. .Thein- wbiclh
ilriglarid seized to raise the the AmericanBat Astfo'datidn.
surance 'companies, for instahbe,
approved and supported
by Con¬
have been looking into5 the 'mat¬
gress at its last session. As a
re-,
Suit
of
this
debate,
certain ter, and ;a giottp of New York
changes were made in the original commercial batiks- f$ :giving>seri-.
plans, although they will prob¬ 'ous study to the problem;
The
Bankers
Association,
ably not require any amendment American
(Continued frorh page 2206)
Of the agreements. For
through their general counsel, is boom in business, to draw in cur¬ is not quite as
large as the $19.5
instance,
a .National
Advisory Council on in close touch with developments rent income of savings banks and billions paid off, but will be
International monetary and finan¬ in Washington. Investment bank¬ insurance companies and use the about $18 billions.^
Treasury cash
ers
have offered their services
cial problems was set
proceeds to pay off maturing bank at the beginnirig of -this ^program
up by the
and appointed two special com¬ obligations. In this way the na¬ Was about
Bretton Woods
statute, which pro¬
$26 billions, of which
vides for the first time a
formal mittees through their President, tional credit base Would be re¬ $24 billions was in War Loan Ac¬
duced and banks would not be so counts of banks. After the No¬
coordinating body in the United O. S. Garland, of Baltimore.
States
be
were
com¬
pleted membership
deposit
or
large loan in¬
creases, monthly certificates ma¬
turities te provide needed funds
of
proven,
recon¬
officials
.•
will
American busi¬
more
foreign
foreign
have not
we
anticipate
withdrawals
ences.
-
More and
ness
securities
com¬
to
or
why
impOitarit element in the
they have become automatically
eligible in these cases.
*
foreign
trade.
is
struction of
Organization will include cooper¬ in any securities which are rec¬
regulating cartels, in set¬ ognized as eligible for the secur¬
ting i up commodity
United
States deposits.
agreements, ing of
and 'in
reducing trade barriers. Since the Treasury has recognized
>The Bank and the Fund constitute these debentures for that purpose,
here.
of
investment
This
that
ation in
considered by'
Exchange Com¬
establishment 'of branch plants in
greatly; certain
vary
provide
hire being seriously
the Securities and
investment
if their business is concerned with
a
of
certain kinds
of financial concerns may invest
them
international
registration
international investment is
the inclusion, of these debentures.
longer
this
panding the opportunities for the
statute with reference to the in-! mittee for the moment.
vestments o*f savings banks has
This is especially true because
zation
of
concerned
essentially
restoration, stabili¬
investments
priate
also
on
would
the world. The business features
tatives of the Bank to the appro¬
of
servative to hold
only long term
bonds. If you
countries, and at the same
time to profit ourselves in an in¬
creasing standard of living here
through the import of necessary
and desirable goods from all over
through sev¬ mission and: by the New York
eralu of our iriembers in' facilitate Stock
Exchange. These two 'or¬
ing «the approach of the/represen¬
ganization^ are Cooperating in ex¬
employment is the universal goal
of all governments. This
depends
a
ward
We have cooperated
legislators who would be
with any modifications
of investors to handle these bonds.
of the statutes. I am perfectly sat¬
Possible investors are Commercial
isfied that there will be increasing
or
savings
banks, trustees, or
interest of lawyers in the opera¬
private individuals, ;and invest¬
tions
do not as
standard of living of many back¬
are
consistent with the Fund articles
2251
of
Gov¬
announced.
With the election of Mr. Wash-
burne,
comes
Harris,
Hall
&
Co.,
be¬
the 33rd member corpora¬
tion of the
exchange.
2252
THE COMMERCIAL & FINANCIAL CHRONICLE
:
%
.
375
How
Observations Slill
v
soldiers
and
sailors
also
has
been
cars.
getting de luxe service at least
as
far
as
* %
*
case
the
on
<
the-one
1939; equals
other of-1914
}00, and in the
equals 100.
(August
1946
The
1A
Thus
the
advance up to date
only a little over half
been
hap¬
what
Bureau of Labor's wholesale com¬
modity
.
August 1946«1
1—
167 4
November 1919-..—212.1
has
1914-20?
or
shows
following
pened in the two periods in the
corre¬
sponds to November 1919.)
tov 1914-19
relative
of
base
November
farm
excluding
groups,
and food products: '
1919
/
;
(1914=100)_211.1
August 1946 (1939=100)..—140.4:
August 1920 (1914=100)—*262.3;,
„
that of 1914-1919.
;/*Peak of 1920 advance.
,
Luxury Dinner
12-Cent
A
To
should
it
with,
begin
important
influence. It
is when different types of prices
is
itself
by
not
an
business-depressing
get out of adjustment with each
Re¬
other that business contracts.
*
cently
Such
large-scale operations and expenses (epitomized in the
$25 million annual budget), are unfortunately coupled in the public
mind with net results that have been
cumulatively negative. In the
first place, the public is
getting the impression that the UN organiza¬
tion and machinery are
being used by some Powers mainly as a
sounding board for propagandizing for their own nationalistic politi¬
cal aims. Whether the: stage has been set at UN
meetings in Lon¬
called
to
has
attention
my
been
amusing; price list
Restaurant in
an
from
Delmonico's
1834.
Porkv chops
4
were
cents,
roast beef or mutton 5; cents and
complete dinner 12 cents. Prices
at any time during the last sev¬
a
decades
eral
don, at Peace Conference sessions in Paris, at Security Council meet¬
ings at Hunter College in the Bronx, or now at the Assembly session
been
have
Non-Agricultural
;;
be
noted that, as a general principle,
the highness or lowness of prices
graphed documents and other surplus, alone amounts to a half-ton,
each day; the removal of which
together with the other waste, oc¬
cupies the services of 80 porters, matrons, and technicians.
f'-//A:-;'-*:-*
level to try to
of ;this
in
prices-expressed
ty
soundness
the
argument.
Printing represents another gargantuan process. In addition to
turning out a daily Journal, the printing-plant is on a round-theclock basis, producing over a million
mimeographed pages each day.
According to officially-disclosed statistics, the "over-run" of mimeo¬
;
the price
of
tion
determine
/
,
.
because
.
attending UN on business—all the clerical
and stenographic
staffs, since the start of the proceedings at Hunter
College, have been taxied to and from their homes and work by
special
cannot' expand
business
prices are bound to rise and that
this
will
check
demand.
We
should like to examine this ques¬
and others
press
of
-
-
transportation is concerned. As at San Francisco—in contrast to the
^working
with some, im¬
labor conditions,
even
provement
Despite general squawking by the rank and file of foreigners in
the Secretariat, it has appeared to
many local observers that such
personnel
that,
argue
maintaining this pool, with a complete
mobile repair unit constantly
patrolling the roads between New York,
Lake Success and Flushing.
'
*
are
»
High Are Prices?
M (Continued from page 2202) ^
(Continued from.page 2205)
Thursday, October 31, 1946
The advance in
Prices
commodities has
Relatively Low
a
This, moreover,, is not the whole
story.
Agricultural and related
products
much
The
following- table' gives
similar
than
have
commodities.
The
a;
of
advanced
since
other types of
only about
quarter of that of 1914-20.
very
have
more
nonagricultural
been
1939
number
important individual commodi¬
ties. In this case prices in Octo¬
comparison for
advance in these groups has actu¬
ber
ally been greater than it was in
the period 1914-1919
(129% as
compared witlv 113% jn. 1914-J9).
a
numbers
From the standpoint of industrial
activity
the
the
level
prices;
important
of
How
have
is
thing
manufactured
goods
these
moved
1946;; (expressed / as - index.
on
a
1939
base) are
compared with prices in the cor¬
responding ' postwar " month
of •
World War I, January 1920, and
with peak prices in 1920 (with the
prices expressed as index
bers based on 1914).
num¬
October 1946
many
(Index Numbers
January 1920
Peak 1920
prevailing in 1834, but
1939—100)
U
(Index Numbers 1914—100)
this has not resulted in depres¬
132.8
303.7
371,6 r
Pig iron
in Flushing
Meadow,r the common themes of U. S.-in-China, British- sion. On the contrary the general
117.0
242.6
244.7
in-Greece, Franco-Spain, recur and recur; phonogrkph-like and with¬ level of business per capita and Heavy -melting steel scrap,.-128.8
;;-,l
142.8
166.8
Copper
1-.—.--*
out decision. And the public is beginning to realize
that,, at least in the general standard of living
165.3
222.5
238.8
"the General Assembly, no definite or important decisions are
pos¬ have been many times those of
126.5
204.1
265.3
Hides
sible. For example, in the case of the VETO,
concerning whose fatal 1834. So that the fact that the
381.0
331.9
357.6
Cotton
—l—
implications the public has gradually become awakened since San general price level is much higher
Francisco, it is rather generally realized that the Assembly is wholly today than it was 50 or 120 years
ing the very high-priced agri¬
Cotton, it will be seen, is at a
without power to effect a binding solution. Even if the delegates at
cultural commodities).
level, but the industrial
ago is not of itself important as high
the Assembly should (which is highly unlikely) be able,to com¬
commodities are all much lower 2. Prices of important individual
a factor making for depression or
promise on a reform of the veto privilege, it could only make recom¬
relative to prewar than they were
raw materials are appreciably/
prosperity.
mendations to the Security Council, where the privilege has
in 1920.
already
below world prices.
been hopelessly manhandled, and where any of the Big Five has the
Comparative Price Levels
Another comparison that throws
3. Between 1939 and August 1946
right by its single vote to decide that consideration of any question—'
some light upon the question of
; But if prices of some types of
prices had advanced far- less
including the very one of the veto—is itself veto-able, Amendment goods rise
whether prices of industrial com¬
sharply and in such a
than they had in the corre-,
of the Charter is impossible, as all amendments
require both a two- manner that important sections modities are high and whether an
sponding period in World War,
thirds vote of all the member countries, and affirmation
by each one of business cannot make a profit, advance Would be likely to check
I,
If we exclude agricultural
of the Big Five. Thus, all that it is possible for the
Assembly to do on a business recession is certain to demand ^ Is that with the low
items (w-hich have advanced a
the vital question is to formulate a declaration for the
public, which occur. The chief question at the point reached in the depression
little more than they did in/
probably would be either vague, and so recognized; or else an in¬ present time is whether the
The following figures
price of 1921.
1914-20) the remaining 'com¬
comprehensible restatement of the current status—neither being very
level has advanced an unreason¬ compare the Bureau of Labor Sta¬
modities have advanced only a>*
inspiring to the layman or to the expert UN observer.
able amount and is so high that tistics inde^x excluding foods and
quarter as much as in 1914-20.
demand
.Rightly or wrongly—it at any rate appears that the public's the
for
manufactured farm products at the depression
The present price level of nonapathy and resentment toward UN are being intensified by the fan¬ goods will be curtailed. Let us low of August 1921 (index num¬
agricultural commodities is ac-;
fare, and seeming extravagance in combination with the
disappoint¬ examine the level of commodity bers based on 1914 as 100) with
tually a few per cent lower,;
ing results. This is true to such ah extent that the man'in the street prices, therefore, in relation to: the present level of this index
relative to prewar, than at the
almost desires the elimination of all its pageantry, and
perhaps might (1) the price level of foreign (index numbers based on 1939 as
nadir of the 1921 depression.
;
even visualize a procedure of
singly representatives from each coun¬ countries, and (2) the prewar 100).
;
,
4. Nonagricultural commodities at
try locking themselves in a hotel room, getting down to shirt-sleeves, level. Let us* also observe which
August 1921—
145.6
their peak in 1920 were 162%
and coming forth with one or two concrete decisions. Meanwhile he of the
maj or groups of prices are
August 1946
140.4
above 1914. If they were to rise
resents the attribution of sacrosanctity to the Organization or to its highest.
correspondingly now they would
individual participants.
Prices of industrial commodities
The
following
table
shows
almost double—and the factors:
are
thus. actually a little below
prices in the United States com¬
Public's Interest Tied to Molotov's Daily Diary
making for an advance are far
the low 1921 level, a really ex¬
pared with those in four foreign
stronger today than they were
The American public's pjedeliction for personalities in
.lieu: of countries whose currencies are traordinary condition.
in 1919.
•
seemingly-drab/ institutions is being continually! denioristratOd • by
somewhat stable (in many other
Prices and Production Costs ;
the close correlation of UN
In view of these facts is it at all?
j interest With 'the day-to-day • rate*'of important countries if; is difficult
| activity of 1VL Molotov/ 'This motivation of successive quickOriihg ^ahd' to
Another comparison is that be¬ sensible to argue that a rise iw
get price indexes that mean
decline of public attention to the Assembly's
proceedings is clearly much because the currencies are tween
prices
and
production commodity prices would check
reflected in the frantic activities of photographers, in his lionization at
so bad).
The figures show prices costs. General Ayres has made an demand, particularly when we
cocktail parties, and is quantitatively measurable
by devotion of as of
June, 1946, in relation to interesting study of this point in take into account the extraordi¬
newspaper headlines and space when he is "on the stage" in any ca¬
which he estimates the rise in
1939, which is taken as 100.
nary size of the shortages that
pacity. An official certification of the Russian's promotion to full
labor costs per unit of output in
have
stardom was furnished this week by the
accumulated, the 1 arge
exception uniquely made United States
.-146.4 those leading industries in which
regarding the delivery of his speech, in setting for him, but for no Canada
-145.3 there is a satisfactory unit for amount of purchasing power ac¬
other delegate, the time for his appearance 24 hours in advance.
United; Kingdom
169.0 measuring physical production. He cumulated, and the extreme ease
times those
...........
,
5
—
.
.
•
-
,
'
;
—.
Sweden
A good example of the mis-emphasis and
over-emphasis which
theL newspapers, devote to^. JVIplotov, is to,be noted in
th,e full-page
spread headlines hailing his hour-long speech as purporting to
"URGE
UN
MOVE
TO
CUT
WORLD
ARMAMENTS."
For
in¬
the
ference that his talk constituted a realistic and decisive
plea for peace
omitted
recognition of many important accompanying elements
thereof, namely; (1) Absence of an offer to make the disarmament
plan effective; (2) His accompanying baseless attack on the U, S.
atomic energy
policy; (3) Insistence
assuredly is inconsistent with
any
retention of the VETO, which
constructive world disarmament
on
(4)
Repeated charges against the capitalistic West of at¬
tempts at "world domination"; and (5) A general attack on the United
program;
Rtates Ohtjll conceivable counts. ' '.'
f
;
-
N
.*
j
*
-
v
'
'l
'
plea for
more
Unions, advanced in
power
this
speech to the General
sembly, M. Molotov unwittingly uncovered another fundamental
flict
with
basic
fundamental
UN
policy.
disagreement
For
with
the
the
aims
of
World
sought
current
by
barrier
our
new
to
the
world
International
elimination,
are
wide
labor
assuredly
are
As¬
con¬
are
in
Nevertheless,
Conference
aims
to
in
the
efforts
London,
of
for
as
being
an
the
cartel
being opposed by trade unions. Union labor is
maining "pro-cartel"
re¬
important instrument of "central
planning" for full and steady employment. As is reported in
a
special
dispatch appearing elsewhere in this issue, in line with the UN spirit,
the United States and
Canada
are
now
^elimination of both cartels and tariffs.
XfS
There has been-
American
if
191.9
v: y
prices
the
take
we
of
161.9, prices
in
relation
an
advance in
since June,
agitating in London for the
4.;
but
September figure
are still not higli,
foreign countries
to
assuming there has been
even
estimates
unit
These figures
case
of
United
Kingdom,
show that
(which has risen 67.4% if
be
are
unreasonably high in relation
In
this
connection
esting to
compare
modities.
The
it
is
On
individual
following
com¬
table
shows domestic and world prices
of four leading commodities:
^
Copper
commodity
prices (75 and 62 respectively as
against 40). The advance in labor
has
costs
but
it
is
substantial one,
been
a
not
by
any
means
so
33i/? :
14%
—
Lead
ll1/zx
ly have $ further advance and still
IOV4
be far below 1920 levels.
8%
.
Zinc
91/4
j
us
also
World
war
and
see
compares
with
the
close
Following
is
The
that
1. Since 1939
during
World
Bureau
and
War
of
I.
La¬
bor index of wholesale commodi¬
;
comparisons
above
that:
of
,
.
'•
%*.
:
■
A.
*
-
vV
38th annual dinner
of the't
Railway Business Association will'
be
held
at
the
Waldorf-Astoria
Hotel, New York City,
day, Nov. 21.
on
Thurso'
The Association, in ';
announcing this
on
Sept. 14, said; '
"It is expected that the total at¬
tendance will be about 1,800.
members of the
Association
will
-
the
Presidents
guests
The
Railway Business
entertain
as;
and
other leading executives of all the
10V4
principal
present
how the advance
the
The
is certainly negative.
their
Conclusions
compare
The
great that it
prices with those at the start of
after
industrial
the
than
more
15y2
Hides
the
of
risen
could not be com¬
pensated.for by a moderate rise in
prices—and we have shown that
nonagricultural prices could easi¬
Domestic
Let
have
costs
a *.
Business Assn. Dinner V?
cy.-A.r.y-',,,.
!
weekly: earnings and unit labor
level
inter¬
both
that
but
whether
likely to choke demand.
answer
■
whole),
to the question
take
we
is
a
v
-i"*/'
show
■
prices have advanced
leading foreign countries (even
the basis of
an
index includ-
railway
systems.
*
The
President of the Railway Business'
Association is Harry A. Wheeler, ;
and the Executive
less in this country than in most
on
•
,
moderate advance in prices would
Weekly
dex
as
not arguing that a
We merely wish to find an
soon.
answer
the Bureau of Labor Statistics in¬
no
are
(rapidi advance is? likely, to, toqevr ?
have
where
July was 172.0). Thus there
reason to believe that prices
We
rates?
advanced a little
than the general price level
more
the
of credit and low level of money
.
no
the
1946
to
ings since 1939 has been substan¬
tially greater than this, having
amounted to about 75%. •
are
in
1939
dustries have advanced 62%. The
June
only
from
advance in average weekly earn¬
earnings
available
that
production costs in these in¬
advance there. (Figures later than
the most
international trade which is
being
bodies.
Trade
union
Organization's
establish and expand free world trade. Cartels
troublesome
-
V ,:.v
foreign countries.
the contrary, they are low.
for the World Federation of Trade
week's major
.
to levels in
Unions Vis-A-Vis UN
In his
•
»,
4-
•
>161.9
__
,
Switzerland
'
is
P.
Vice-President,
Harvey Middleton,
Chicago.
both oL
.'.••Y.*.'v.'mV|
i
..
-I-
■
■
,f.
,
.\C.
k;"i .Ti i•
J. if
J
'
.
*v".T*~*LTv-tv" !££ 1 afiP
.Volume 164
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4538
ment but unless
Oni Economic Responsibilities
In the Woild Today
(Continued from page 2208)
The
cerned.
people of the world
accept as a fact that the United
States will support the United Na¬
tions organization and the princi¬
of its Charter on
that require settlement
ples
with
determination
;
•
the
in
now
to
all issues
wherever
of
ment in the fact that both the in¬
dustrial
labor
and
with
leaders
whom I have recently
talked are
necessity of
finding constructive and peaceful
means
of working out their re¬
lationship.
fully
":-
In the economic field,
however,
I have found that our policies are
not yet clearly understood. People
abrdad accept the fact that we
have abandoned political isola¬
If
of
aware
Other countries
are
the
difficulties that
the
sees
one
are
facing
for international economic cooper¬
shortages,
we
midst
abundance.
There
isolationism.
We
fear
is
that
There is fear also
that we will not stabilize our own
economy
in such a way as to
problems.
own
avoid the "boom and bust" of the
past decades, which would spell
them, too. They were
of the factors that led to our
disaster to
aware
4'bust" of 1929, contributing to the
world
depression, which
was
found
among
of
fears
these
who
those
it?
are
Of first importance
which
will
well-being of
far
does
in
They
have been filled.
war
loans
to
many
the
our
not
and I
ism
have" the
to handle
unreasoning defeat¬
on
am
convinced that we
ability
knowledge and
our
affairs in such
a way
to maintain a high level of
employment with an expanding
economy. Naturally, there must be
certain periods of adjustment in
Specific products and, at times,
periods of general readjustment.
But government, industry, labor
leaders and farm groups have far
as
greater knowledge ■ and under¬
standing than ever before. Gov¬
ernment can 'adopt policies which
will
ad¬
directly assist in these
justments.
Thus
■
government has an
policy of international
cooperation.
We
are
our
established
economic
ready to cooperate with all coun¬
tries that are willing to work with
us in this field. The requirement
Enterprise
...Unrivalled
understanding both of our own
self-interest and of the needs of
other countries.
•
ourselves can expand our
economy to the'fullest degree only
We
if there is
an
expanding economy
and
countries
the
centuries-old
the
populations
low that it is only by large
backwardness of other areas,
The achievements of
our
Amer¬
ican free enterprise have been unTivalled both in peace and in war.
economic life of vast
is
so
copy
Capital. investments in the de¬
velopment of industry and > of
agriculture
that freedom from
want can be attained. We have a
even
tremendous
It is the ambition of other indus¬
trial
nations
to
learn
from
and
American industrial methods,
though they may have dif¬
ferent economic concepts. It is no
concern
of ours how the people
of other countries choose freely
to
live.
Butv we Americans are
to maintain our free
;
opportunity and I be¬
responsibility to assist in
financing
these
developments.
This
financing
must
be
done
lieve
wiseiy
—
hot recklessly,/, as was
the last war, but in
determined
done
enterprise system the strength
and vitality of which have been
proved under fire. The incredible
those directions which will assist
scientific
We
and
technical
advances
made during the war and in¬
calculably to
our
opportunities in
peace.
,<
?
Why should we fear our ability
to direct the energies of free en¬
terprise for the vast> expanding
needs of
course
our common
there
are
welfare? Of
today problems
resulting primarily from the tre¬
mendous job we did in the war.
We can lick ar.y problem we have
if all groups will face it together
to
to
travel
the
see
tre¬
security and prosperity
unless the world is prosperious.
This may be called "idealism" or
it may be called "realism." I, for
one,
do not believe that these
idealism
The
people
of
the
United States have
because
in
no
program
can
two words
both with
incompatible. Thus,
understanding of the
are
an
realis¬
tic policy I am confident that we
a great oppor¬
tunity to show economic states¬
manship. I speak of the people
will accept our great
after
succeed
our
thereby," expand
both through
exports and'imports, to add to
the security and prosperity of our
years.
our
own
We
own
will
responsibility in the de¬
velopment
this
country without the full
understanding and support of the
people as a whole.
the
of
human
prosper
in
world
a
which
in
people.
Too
much
live
can
and
has
British
agencies
,
Economic
Social Council and the
concerned
and!
specialized
with
com-:
merce..
commodities,
restrictive
practices, finance, investment and
labor
to
within
make
their
re¬
spective spheres and consistently
with
their
other
responsibilites
io the
what contribution they can
attainment of these aims by means
such
||.\|
as:
(1)
cases
The
of
IIt
promotion
national
suitable
in
international
or
arrangements to promote due sta¬
bility in the incomes of t.ie
pro¬
hav¬
tries;
Proposals for
International Full
Employment
(Continued from page 2206)
employment for
clusion, in such a convention.
passages
The
principal undertaking
gested may be summarized
tions depend;.
(2) To the full realization of the
fol¬ economic and social objectives of
sug¬
as
w
lows:
the
To
take
action
designed
achieve and maintain full
na¬
United
Nations
specialized
to
and
agencies
of
the
concerned
with
em¬
ployment within each country;
Not to maintain employment
by means which are inconsis¬
commerce, commodities, re¬
strictive practices, finance, invest¬
ment and
labor, and therefore
(rt
4
-
■
The
timing to the'extent
which may be
appropriate : and
practicable in the interests of em¬
ployment policy of capital expen¬
diture
of
prosperity of these and other
in¬
on
1
(2)
projects which
on
an
either
are
character
international
or
internationally financed;
are
(3) The promotion under ap¬
propriate safeguards of an inter¬
national flow of capital
in pe¬
riods of world depression to those
countries
whose
of
balance
pay¬
ments needs temporary support
order to enable
domestic
in
them to maintain
policies for full employ¬
(3) To the preservation of world ment; and
and security;
(4) To exercise of the powers
(C) International action to pro¬ granted to them under their basic
obligations;
To
correct
a
fundamental mote full employment cannot be instrument to assist countries to
the responsibility of any one spe¬
disequilibrium in the balance of
safeguard their domestic policies
cialized agency, but will call for for full
payments which; by creating
employment which might,
close cooperation and concerted otherwise be
balance, of payments difficulties
endangered by bal¬
action under the general coordi¬
for other countries prejudices
ance of payments difficulties.
v
with
tent
other
international
peace
nation
them in the maintenance of full
of
the
United
Nations
of
the specialized agencies concerned
employment; and r
:
To participate in appropriate with commerce, commodities, re¬
international action of a posi¬ strictive practices, finance, invest¬
tive character to promote full ment, and labor, as defined in
their
employment.
These
clude
draft
passages also in¬
invitation to the Eco¬
an
nomic and Social Council and the
various
consider
tions
specialized agencies to
what positive contribu¬
they can make to the main¬
of full ^employment in¬
tenance
ternationally.
In
basic
instruments
recognized
in
their
and
as
agreements
with the United Nations;
(D) Domestic programs to ex¬
pand employment should be con¬
sistent with the realization of the
of
purposes
the
and, of
concerned
United Nations
specialized agencies
the
With
commerce,
com¬
modities, restrictive practices, fi¬
the
hope that it may assist nance, investment, and labor, and
the members of the Preparatory with the economic well-being of
Committee we submit as Annex other nations;
(The governments on whose be-s
is signed ire-,
quest the United Nations ac'ing*
through the machinery of the
half this agreement
Economic
and
Social
Council
to
accept the obligation of giving an
opinion, if the International Trade
Organization so requests and aft-1,
er consultation with the other spe¬
cialized
(A)
agencies concerned:
Whether inability of a country or
group
of / countries to carry out
fhe policies contemplated in thisr
agreement is making it difficult
for another country or group of
countries to maintain a high level
(B) if so
interna¬
agreements to which the
an
attempt; to explain in
country or1 countries so affected
the
considerations
which have
tries^ to CQrrept maladjustments in are parties provide adequate op¬
guided us in formulating these their' balance of payments by
portunity
for
remedial
action
draft passages for inclusion in a measures
compatible
with
the without a
temporary release from
convention covering employment maintenance of domestic employ¬
obligations under the Interna-'
policy.
ment; and
tional Trade Organization.) ■
our
analysis of the problem in
(E) International .arrangements
detail should. b,e ;such; as tq enable coun-
ment
in
policy is confronted with se¬
difficulties
rious
as
a
result
(F) A fundamental disequilib¬
in; a country's balance of
payments may create balance of
payments difficulties for; other
countries and so prejudice them
of
the
maintenance
ployment.
ments
Each
of
of
the
full
em¬
govern¬
whose behalf this agree¬
countries, inability to main¬
their, . purchasing, .power. ment is signed (1) Undertakes to
such a clause is neces¬ take action designed to achieve
sary
or
desirable will depend and maintain full employment
upon the' I. T, O, provisions as within its own jurisdiction through
they are ultimately agreed to. At measures appropriate to its politi¬
this stage all we have in mind is cal and economic institutions; (2)
to reserve the point whether such Agrees not to seek to maintain
a clause will be required or not.
employment
through
measures
Annex A draft passages on em¬ which are incompatible with its
international undertakings or with
ployment for inclusion in a con¬
other
tain
on
j
Whether
international employ¬ the purposes of the International
Trade
Organization; (3) Agrees
policy, follow:
Whereas (A)
the members of to take action through measures
the United Nations have pledged appropriate to its political and
in the Charter of the United Na¬ economic institutions to correct a
tions to take joint and separate fundamental disequilibrium in its
action in cooperation with that balance of payments which per¬
organization to achieve the eco¬ sistently creates balance of pay¬
nomic and social purposes of the ments difficulties for other coun¬
United Nations, including higher tries and so prejudices them in
standards of living, full employ- the maintenance of full employ¬
menty and conditions of economic ment; (4) Undertakes to partici¬
and social progress and develop¬ pate in arrangements under the
vention
of
ment and trade
"< "
''
employment
ment;
(B)
'
main
condition
tions
and
its
for
the
is
mainte¬
maintenance
on
a
reasonably assured basis are es¬
" ;:.vII
Il-I-'
sential :.
•
formation
on
national income and
the level of demand;
>
and
Relief Group to
(b) For the coordination of the
End
Early discontinuance of n"i:"ities by Emergency Food Collec¬
tions, Inc., of which Henry A.
Wallace,
former
Secretary of
Commerce, is Chairman, was an¬
nounced from the organization's;
national
headquarters
in New
York,
York
advices to the New
stated on Oct. 11.
In a
"Times"
report to national, State and local
committees and cooperating or-,
ganizations,
relief
the
stated that:
-
group
-
"Since last May, when the or¬
ganization began to function, it
$3,078,000 in cash contri¬
butions and 308,432 cases of food
received
$1,335,510. Warehouse
packing, transportation,
etc., amounted to $278,000 and the
rest of the cash collected, amount¬
valued
at
expense,
ing to $2,800,000, will be
uted
and
tion
distrib¬
b,y the United Nations Relief
r Rehabilitation
Administra-;
of which F. H. LaGuardia is
Director
General,"
"Times"
The
added:
"Administrative expenses of the
Emergency
Food
Collection was
provided by UNRRA throueh an
appropriation of $300,000. Of this
amount, $205,000 has been spent.
Although there are
bills to be
a
administrative
paid before liquidation
substantial
amount
of the re¬
action of the various international
(1) To the expansion of interna- specialized agencies in the field
trade on which the full I of employment policy; and
Jtional
employment;
tional
sponsorship of the United Nations
*.
1
major industrial and trading na¬
Full
of
whether the terms of the
rium
been
given historically in this country
to the value of exports alone. No
one makes himself rich by simply
divesting himself of property. It
is true that exports give employ-.
the
ing regard equally to the interests
of consuming and producing coun¬
^v
::
emphasis
Invites
ducers of primary produc s,
race
peace.
;|
;;■>:l
the for:
(a) The collection, analysis and
nance of satisfactory levels of liv¬
exchange of information on doproblems,
ing and in particular the attain¬ m e st i c employment
ment of full employment by the trends, and policies, including in¬
commerce,
(d)
opportunity
,
people to help themselves and .to
expand their commerce in such a
way that they, can repay these
investments
over
a
period :' of
special conferences; and
.
and
now is that
we implement these
It contemplates special provi¬
policies with wisdom and under¬ sion for the release of a country
standing. It will be by bur acts from certain of its obligations un¬
that we will encourage hope and der the International Trade Or¬
confidence. We must have a clear ganization if its own full employ¬
of the devastation of war in many
Free
have
world
the
a
B
in the world as a whole. Because
American
improve
people.
and in the fulfillment of
coun¬
Cooperation
(c) for consultations on em¬
ployment problems including
where necessary the holding of
as
true nature of American
replenish
to
.
these fears
I fell strongly that
are based
we
themselves.
generously to
already made
U. S. Committed to International
seem
treconciled to disaster ahead,
that
have
and
opportunity
there
is
through application of American
genius in agriculture and indus¬
try to assist other people to help
have
the demands backed up by the
as
learned
cannot
not attain
the
in
We
in our pro¬
production. It is only
teral trade ad commerce. If these
more production that we
can: bring a more secure and bet¬
proposals are accepted they will
ter life to all of the people of our tend
to
reduce
artificial trade
and
allow the freest
country. rfOf course, production barriers
must be directed in such a way as practicable
flow of goods and
to meet the requirements of our services
between
natjpns.^ We
have played a leading part in es¬
people and of our exports and to
avoid
unmanageable
surpluses. tablishing the International Mone¬
This requires careful analysis of tary Fund to assist in stabilizing
potential markets at home and currencies and in establishing the
abroad and careful planning by International Bank, to make loans
the producers. It requires careful to those countries needing capital.
planning and action by the gov¬ We have the instrumentality of
ernment
as
well.
Many people the Export-Import Bank to make
In this country seem to feel that loans, if we consider it wise, sup¬
We are doomed somehow to face plementing
private and other
another great "bust," just as soon media of finance.
is
through
have
individuals
things
their working
capital to rehabilitate their econ¬
omy. We are now making trade
proposals to encourage multila¬
gram
losers.
security
prosperity unless our country
as
a whole is
prosperous. In the
same way the United States can¬
doing about
we
We have
substantial
tries
its great accomplishments.
\
fear
find
subscribed
We
UNRRA,
respect
admire the United States for
and
what
Now
even
us
most
one
I have
of the causes of the war.
of
everything that we need to meet
our problems—the wealth and the
ability—but there is one raw ma¬
terial that is absolutely essential
and that is faith. People the world
over
are looking to thea United
States not merely for help but for
leadership. This leadership can,
and I believe will, come from a
confident and healthy America.
too preoccupied with our
are
the
Therefore,
emphasis
should
be
given to the expansion of our im¬
ports from all countries of those
try, although there are temporary
ation, they still fear that we have
not yet fully abandoned economic
our
•
our own
seen people
in fear* and misery
resulting from want. In this coun¬
plans
We
get something
are
dwarfed. In my travels I have
but despite the many
government has made
tionism,
we
we
.
mendous
throes
settling management and labor
differences, but I take encourage¬
they appear. The vast majority of
the people of the world rejoice
in this. It gives reassurance and
hope for the future.
are
return
One
mutual
find the solution;
We
in
2253
maining $95,000 wil lbe returned
to UNRRA."
||r'
•
'
'
•
I'V
THE. COMMERQiAt 4 FlN ANQIAt vCHRQJ^IGIE
2254
Thursday,: October'31, 1946
;
that the averages would have
to. hold above the 170 level (I
made it 169 for added insur¬
Markets
Walter
Says—5
=By WALTER WHYTE==
the face of this
ance), if the position it gained
from the recent rally was not
to be dissipated.
In the past
few tlays the 169-170: range
was eaten into, through a se¬
ries of dull draggy days.
It
is too bad that such days are
Tomorrow's
through of the 169-170 range
it now points to about 160. In
hold
stocks.
It
least not
worse
than the
If
mar¬
[The
views
article do
time
not
coincide
expressed
this
in
necessarily, at
with
those
rally which started on
| such dullness should be given
lifting, of meat controls, is. more
thought than it gets,
over.
As other controls are
j A dullness which leaves the
removed there may be more
market
untouched., is rare.
slight rallies. 1 doubt, how¬ Either certain stocks decline
ever, if these will be as strong
further' than the averages, or
rs the one which carried, the
move up against th# trend.
It
averages up some 15 points.
is: tbese small things which
of
Chronicle.
as
*
*4
%
| frequently point to events to
Industry profits are still
! coihe. Right now we have, a
high and will probably main- dullness that has a
lulling ef¬
t^in their pace for af least; the fect. But
during this period
next quarter.;: But it would
we
saw
the
/.
or~
United
new
-
themselves to particular forms of
page;
existing 1
upon
-
be assured that alternative outlets
will be provided for that trade:
If
we
trade
going
are
of
to
expand
countries
some
the
,
must
it
not. be. at the cost of diminishing
220.8)
the trade for others/
V
In the existing postwar circum¬
trade, provided,
of
course, others, too,; are prepared
Economic
relying
provisions in their domestic laws,
they will not, of course, be willing
to-make a change unless they can
our
Nations
,
to
1
trading,
Regulation of
(Continued from
the
accustomed
Where two countries or a group i
of
countries
have
accustomed •
World Trade
by
from
;
'
tru
They are presented
those of the author only.\ /
broken.
ganized
to attempt to
directions—to divert
the flow.
ana
penetration
the
going
-
So advice is to hold on
until at least the .stops are
the
are
trade
ket.
International
we
change those
17, stop 15; Gulf, Mobile and channels or to introduce new trade
Ohio, at 12, stop 10; Interna¬ into old channels—we must be
tional Paper at 43, stop 38, very certain that we create the
new channel or widen the old at'
and Boeing at 23,
stop at 2L
th^same time as we are diverting
z
you
is
these, however, that act bet¬
ter than the market, or at
of resist¬ disregarded by the maj orifjT
ance
points indicate gradual of traders. Because the mar¬
decline.
Some stocks keep, ket did nothing, there is a
gains in face of general de¬ feeling that there is nothing
to worry about.
A/; current
cline.
dullness, it is too frequently
To all intents and purposes
felt, will continue. Actually
Lazy
possibility
certain
Stocks and stops are as fol¬
Dresser Industries at
lows :
stances
are
all anxious about
and Social Council is a [to do the
same.
And this process
the. future of our; trade. We know
recognition of that fact, and. it is of
accommodating our national
an
the history of" the past and the
essential part of the work of economies
to
the
interest
of
the
United
Nations
we
unnatural conditions
in Z their
of the
pres¬
'others, as well as of ourselves,
that does not consist in looking round ent, but it is very difficult to
forecast the future. .It is
should achieve an - agree¬ i to find Put
easy,
something which is of
ment as to the manner in which
therefore, to be fearful of. the
no value to us. and then
offering futureand; to be. unready to try/
they can cooperate for the promo¬ ! to give it
away.
It means that
tion of the highest level of em¬
new experiments/
whehvthere ■ is!/
| each one of us can best serve our
[so much, doubt in the air.
ployment and the maintenance of truest.
We
national. Interest ^-by/icon^
sometimes seem to see the mirage
demand; and can bring some de¬ sidering what it is that
of safety in the leaden
gree
of regulation
into
World which is inimical
atmosphere
endeavor
to
stabilize
peace,
■
the
tpj^^interasts
doing of others winch we. ;caiv give up of inactivity; and of the lack of ^
courage to.■;make a .change/:
few by way of exchadie
;; v
tfpr things
be naive to hope that business
But we must take risks if we
trate fheir resistance levels restraints as possible upon indi¬ which they do and; Which adverse¬
are
' to.
vidual nations and
can maintain the pace indef¬
accomplish
something trading con¬ ly ■ affect' us,
without any fan-fare."
This cerns, while, at the same time,
There, is no? h^d/fbV any of us really/ new/ and unless We» doj.,
initely. The maj or obstacle lis not
achieve startlingly better results/
good.
safeguarding each from the dam¬ to be ashamed of
bding stout
for the diseernable future is
aging
effects which may flow champions of our own national in the future than after the last
the strike potential.
war we know bnly.tob
I
Yet during the same time from the acts of others. :
W^lthe/di//
cause, that is indeed our function
rection of disaster in which devel¬
We know that in the period be¬ at such a
! various
stocks continue to
meeting as this, but
r
tween the two wars, when there
oping-events will force us to pro:
AU kinds of things have !
though we are stout champions we
point higher. It is the action was substantially no provision for need
ceed./^/. \'
/
•
j
not be
selfishly stubborn
been said and written about of the entire market which
St We- want
to
world economic cooperation and
anticipate those
champions as, well/ The whole
strikes and their effect on the
prevents them from cashing no rules of international conduct success or failure of our efforts events and to prevent the begin¬
national economy.
The fact 'in on their indications.
By in matters of Trade and Com¬ will depend upon what each of us ning of that restrictionism which
was so fatal after the last war.
.
remains, however, that, as i the same token, holders of merce, we, all of us, suffered from is prepared to give up, always, of
'';>•••.
one another's acts. '
i course, on the basis that we get
controls are lifted, strikes be-, these
The U. S. Proposals
stocks,; seeing a- draggy
;in
averages
pene¬
Trade
this
and
Commerce.
to
want
we
In,
impose
as
j
,
.
•
•
•
-
.
LobQ^ shh? market, sell out in disgust.
*
*
*
ply cannot buy the goods it
There is no hard and fast
produces "with its present
buying power. And when rule to apply to trading,
such a condition arises, it will ;
Every day's action tells a
certainly try to get more story, each day being suffi¬
cient in itself.
money.
1
<
t
But a general
icome inevitable.
that millions upon millions of our
suffered
poverty,
benefited
some
suffered less
ories of
If
they should be held.
cer¬
tain stocks decline lower than
right and wrong. It
what facts it has or can the market, they should be
foresee, and reacts accord¬ discarded; if not right away,
then on the first rally.
ingly.
assays
:;; ■■/// /;///?/ * ' :-:i/
*
The
Last week this column said
*
*
*
same
principle applies
to advances;.
If certain stocks
market
stand still while the
Established
H. Hentz & Co.
Members
York
New
York
New
Commodity
New
Exchange
Curb
Exchange,
Orleans
And
Exchange
of
.
Inc.
Trade
Cotton Exchange
other
Exchanges
N. Y. Cotton Exchange
DETROIT
GENEVA,
than
is
sensitive
most
buy
markets and sell weak stocks
in
Vvv
^
,
our
are
own
all
po¬
form of planned economy at home
doubtful
are
their
about
interests
ters
the
on
the
risks
planning
international
materials
own
of
and
are
to
mat¬
scale.
producers
alike
control and
of
jealous of
are
anxious,
they can, to get the best of both
worlds, freedom from all restraint
and interference
and
on
the
the
on
the
one
hand,
other protection from
greater difficulties of
ex¬
treme
»!*
.
to
as
we
of
litical sovereignty. Even those na¬
tions
who
have
adopted
some
all
strong markets.
•''•/{-j l"
that
field
if
in weak
stocks
strong
perhaps
at different
or
in this
economic matters
raw
The ideal combination is to
'■
To get
back to the current
problem. The market doesn't
look good. By its weak fade-
Bldg.
competition.
1
if we are going to set out
seriously and with determination
to ensure a prolonged period of
peace for the peoples of the world
But
must face up to the
unlimited freedom does
we
fact that
not,
ac¬
cording to our actual experience,
give any but a very, very few the
PITTSBURGH
best of both worlds—in the
Securities
'
Orders Executed
LAMBORN & CO.
pacific
on
We
have
experimented
long enough in the chaotic condi¬
tion of world trade, such as en¬
Coast Exchanges
99 WALL STREET
5, N. Y.
our
Schwabacher & Co.
Members
.
Hew
SUGAR
Exports—Imports—Futures
New
Exchange (Associate),
Chicago Board of- Tradp
14 Wall Street
Private
San
'
starting
point
the
New York 5, N. Y.
Teletype NY H928
Wires to
Francisco
Monterey
<
-'
for
Principal Offices
—
Santa
Oakland
—
Fresno--
-
Barbara
Sacramento
~
Must Give Up Some National
//••:■/:' .'Restrictions
J,
maximum
of
freedom
con¬
good of the
peoples of the world.
At its very root lies the concep¬
tion that it must be the policy and
the duty of each separate nation
to take every possible step within
its own borders to provide full
employment for its people.
We
know from our experience be¬
tween the two wars how mass un¬
or; regpL-?
of
restrictive
practices7 in the ^fields in which they have f
flourished; iii the past. Their de4 V
tail/is of necessity complicated7|/
many
and I have np doubt many points
will be discovered which are pof/
fully covered and which will form
the subject of prolonged discus¬
sion. •
'7' " ~
• :
'
■
But
is not
it
so
important.
is
that
the
devise
some
acceptable to
ail
trading nations which
ensure a degree of order in
international economic sphere
main
so
will
Is1
What is important
should
we
that
detail
methods
the
remove
employment not only deprives the otherwise
world
of consuming
power but barking
prevent
fear
the
will"
the;
and
tjhat will'
from em^
expansionist'
also influences individual nations policy for world trade.
Just as in the political sphere
to adopt restrictive measures that
we seek soine form of c&fporate/
are aimed at exporting their own
troubles to other countries.
security for the world, so in the
Once this vicious circle of ex¬ economic field we need to regu-7 {
porting unemployment starts it late the use of ecdnojhic a'rniai-^
has its repercussions throughout ments. Thus we can diminish the
the world upon industrial coun¬ risks of external adverse effecta
tries and upon primary producers upon national, trade, which so eas¬
as well.
ily lead to and justify restriction-/,
If we can do our best kto assure ist policies.
We " are
full
following 7 the " lead
employment—each
in our
upon
us
an
.
—
own
country
then we can pro¬ given by the Atlantic Charter and
own
mutual aid agreement
a basis for a healthy and ex¬ our
with the United States of Amer-'*
panding world trade.;
'
But as I have indicated, -some ica—-putting forward to the world
measure of protection- against ex-? jthrpugh this meeting a new con-^/
ported unemployment is neces¬ ceptipn of national responsibility
vide
Changing TrUde Channels
in economic matters.
has
considered
been
Hitherto it",
sufficient
each nation regulated its
these
in
accordance?
in
matters
if
conduct
with the bilateral Treaties it has
entered into. It was no one else's!
concern
as
to what those Treaties
full
employment
is
expansionist policy for contained, or how they would af¬
fect others, and beyond' that it
world trade
it is impossible to
was
accepted that'-each country
disregard altogether the . factual
could do as it liked with its owii
basis upon which world trade has
market.
' \
//,■'. ' \
hitherto operated. That trad? has
\ ft was that accepted attitude to
been giverr
Though
basic to an
.
,
..
direction by a-whole
complex: of national laws and has
and been developed in
And if we accept that as a basis its reliance, upon the -continuance
for
our
efforts then.;-it foliows of that pattern of direction. Whole
that we must each be prepare^ to industries, and schemes of agricul¬
'give up., some ofour. national tural and mineral development
method? of protecting
•\i
need
organization, some rules and
regulations as between the nations
relating to their conduct of trade.
some
York Curb
COrtlandt 7^4150
Dlgby 4-2727
•
York Stock Exchange
the
sistent with the future
surely
sured after the last war, to take as
NEW YORK
United King^
great
majority of cases, and this cer¬
tainly rules so far as the gener¬ sary if we are to prevent the in¬
ality of the people are concerned cidents of unemployment in one
it means we get the worst of both i country from spreading round the
worlds.
world.
V
Pacific Coast
SWITZERLAND
Government- of "the
unem¬
others.
their
slim.
though
probably
ing money in them is
'///ft/Z'/ ■' *
*
* '
NEW YORK 4, N. Y.
CHICAGO
It
Manufacturers
Exchange
Board
Chicago
->
Stock
Cotton
York
New
times
advances, the chances of mak¬
1856
..
equally
idom expressed their assent in all
ployment an$. frustration. ..."Pov¬ its broad principles. It is. a very
erty in the midst of Plenty" be¬ genuine attempt to lay a founda¬
came
a
catch phrase of the wid¬ tion dor the organization of in¬
est practical application.
No na¬ ternational trade upon the basis of
peoples
tion
a
...
You are all of'you familiar iyitfe
worth while.
That I believe, was the basis^of the general scope of the proposals
result, by piling restric¬
tion upon restriction, we most ser¬ the dpcument which; was put out put forward by the- Government'
iously blocked the channels of by the Government of the United of the U. S. A. last year which at-!
world trade with the consequence States last year and to which the tempt to prevent the employment
concerned with abstract the¬
The market is
something
V
In the
principle can be applied! If
cold im¬ certain
stocks
stand still
passive medium and it is not while the market declines,
v
exchange
Restrictions Have Piled Up.;,
♦
•
grown up:
\ have* been
KniU-
TYrkrtW
*
rj
-c'-'
fl rV:.
international trade Which
into
.the
disastrous
inter-war years,
led
chaos- of
'
' _;
-
Security in International Trade
-
•
It
is
to
basis,
-
1
i f-
\ f
/
-
elupiwaie the danger of
:+*aST«
.l/;:rrr*r-r
usi
the
•/
|
•
) if
J
*
) V
g.-
Volume. 164
Number :4538
of affairs that it is
to
introduce
that
what
regulate its
of
the
each
own
all
now
new
THi: COMMERCIAL & FINANCIAL CHRONICLE
proposed those evil days, of suffering and these investments
conception
country does to
trade is the con¬
other
unemployment.
.-M.t,
were
made
ex¬
clusively in the period 1030-31
apd were the result of the explicit
obligations laid upon the Bank for
International Settlements by the
*
We cannot let it be said of our
Twentieth
-Century -civilization
stigmatizing
of
the
BIS
during
the war came at a time
when the Bretton Woods program
in
was
evolution.
The
American
who that it is only in times of war that
today is the people; can be given full em¬
tantamount to -saying all pther ployment, or that pnly in such cir¬
countries.
So the methods used cumstances of acute^ danger will
for regulating national trade be- Allies cooperate to organize and
copi#': - matters
of
international order their economic life to. the
concern, and the only way, of atr mutual benefit pf their countries.
twining economic security with Certainly it was true of the war
which to buttress political secur¬ period,
we
then succeeded in
Treasury then saw the existence
Hague Agreements in the interest of the BIS as a threat to that
pro¬
of the coun ries which were the
gram's adoption. It will be recalled
creditors of Germany under those that the ABA and
leading indi¬
Agreements.
Under
the
said vidual bankers took
the positipn
Agreements (together with va¬ that there: was no need for a new
rious subsidiary conventions) cer-* World Bank but
that any plans in
tain rights and privileges were that
direction; should
be
built
ity isbyorganizing at least,
national
cern
with
trade
it—and
countries
public
2255
that
a achieving the
accorded
closest integration
to
the
Bank
for
Inter¬
around
expansion of the BIS. In
Settlements; but after
the Hoover Moratorium in
1931,
that was the foundation which involved a cessation of pay¬
; * Our
conception of that mini- upon, which we laid our eventual ments, no definite settlement of
ipum, security is illustrated by the victory and in no other way could these questions affecting the Bank
provisions of the document cir¬ we have emerged victorious from was arrived at before the war
culated last year by the United the second world war. The com¬ broke out.
States of America to which I have pelling sense of danger and the
"Obviously, it was not possible
end, pf course, the bankers'
suggestion was rejected by the
Congress.
"v
:
fear of defeat drove us inexor¬
referred,
|
:
.am, .convinced that this Pre¬ ably to that course of action, and
paratory Committee and the full to mobilize effectively all our re¬
>
international gathering that will sources of manpower,.,
Are we to admit that it only the
follow- it are pregnant with the
greatest and most hopeful pos¬ dangers and fears pf war that can
sibilities vfdr the peoples of the Induce: us'tn jtreate full employ¬
world, but these possibilities will ment or to cooperate one with
only materialize, X am sure, in another on economic matters?
-I trust that the outcome of this
terms; of happiness and prosper^
ity if we constantly remind our¬ meeting will be to show that great
selves of .the tragic conditions of ideals and a genuine desire to ease
thie lot of the cpmmpn men and
so many of our people in the pe¬
riod between the two wars. We WPtnen of the wprtd are as pow¬
are gathered here to devise plans
erful incentives
the
ipinlinum of security in the field
of
of international trade.
benefit,
economies for
our
our
mutual
during the
which
war to
had
settle questions
previously
remained
unsolved.
As a result, the Bank
has only, been able to take safe¬
guarding pleasures, with a view
to maintaining
and securing its
rights and privileges, in the inter¬
est of all the parties
concerned,
especially
As
the creditor
indicated
oti
countries.
page 154 of the
report of this
the
Originally
of
the
would
BIS
of the creators
many
had
emerge
in
as
mind
that
it
great world¬
a
wide organization to settle
mone¬
tary problems of the
which
World
settle.
Fund
The BIS,
develop
in
that
is
sort
supposed
to
way.
After
as
participated,
a
since
Poland,
Yugoslavia
and
members of ' the Fund and
Bank. The argument is based on
the belief that the world could
have a broader contact between
i
;
?
East and West
through the con¬
tinuance of the BIS tnan
through
the Fund and Bank alone.
Whether anything
at the recent
ton
decided
was
meeting in Washing¬
of Fund and
Bank governors
concerning the future of the BIS
writing ascertainable
is not at this
in Switzerland. Whatever becomes
of
the
BIS,
interested
however, will be of
not
only in Basle, but
throughout
this
little
country,
which has sheltered numerous in¬
ternational economic, political and
financial organizations.
the
although the
served
self-evident,
Czechoslovakia
are
however, did not
end of reparations its activities
became very modest. Its work was
confined to Europe,,
Japanese
this reasoning has much merit is
not
and
it
technical organization
for central bankers
ropean continent.
of
British Officii Calk
U. S. to Incr,
on
Imports
(Continued from page 2207)
the Eu¬
increase in your tariffs in 1930
.
.
did
not
hit us hard, and
despite
the 1938 Trade
Agreement there
Bank, the net assets of the Bank ticipated in the work of the
BIS, are
many classes of goods where
on
thq American, British and there was no assistance the BIS
your tariff is too high to give us
Swiss markets, held in gold, dol¬ could give ta Britain, *
and of
any
chance of competition. We
lars or Swiss francs, rose on' the
coqrse
none
the USA heeded,
towards; wise and aggregate
by more than 117 mil¬ Therefore, the BIS worked to help therefore welcome the U.S. Gov*
\yhich can be put into action that
coordinated " action as ^th§ ^pmbs lion Swiss
will make it most unlikely that
gold francs (the equiv¬ primarily the smaller countries of ernment's initiative towards re¬
and guns of destruction.
ducing tariff barriers in all coun¬
alent of nearly $40 million) be
we need ever fear a repetition of
"
Eastern and central" Europe. As
tries, including their own..
tween Aug. 31, 1939 and March its
» '
history shows, the BIS in ac¬
"Even, however, with the possi* '
31, 1945 (during which period the tuality was and is no rival to the
bility of substantial reductions in
total assets of the Bank declined World Fund or World
Bank,
fifteenth ; annual
While the Bank of
England
par¬
-
What Future for Bank of
~
from
International Settlements
attitude of "neutrality"
which is set forth in its 1940 an¬
adopted
an
is
mation available is that in the BIS
annual
on
reports. A detailed report
the wartime activities still
re¬
mains to be compiled. Some day it
nual report as foilowsi -r.
"The outbreak of: hostilities has" Certainly will be done. Meanwhile,
brought to an end business be¬ the only official BIS explanation
tween countries at war with each has been that contained injts last
other.
with the
Trading
Enemy
Acts and the various other meas¬
ures for waging economic warfare
annual report, that^for
the fiscal
1946. Since the BIS reports
do hot receive wide circulation in
year
announced by the belligerent the United States, there is quoted
below "the passage ^ of the last re¬
nations have curtailed or stopped
business in many other directions. port which deals with this matter.
The policy of the Bank for Inter¬
Report of the BIS on Its
national Settlements has been and
Wartime Activities
»;
ig ia confine its activities strictly
"Since this is the:.first- report
to transactions whereby no ques¬
tion can possibly arise of confer¬ covering a financial year'of wnich
ring economic or financial advan¬ the greater part'felf^outside the
tages on any, belligerent nation* period of hostilities, it is of some
A letter setting out 'the principles interest to give a summarized re-^
which the Bank felt itself Under vuew of thewbusiness of the Bank
obligation to observe was directed during the war, i.e. from Sept. 1,
to all clients in December and has 1939 to Aug. 15,T945.- In this con¬
Received general approval as giv¬ nection I wish to reaffirm what
ing expression to a scrupulous. I have said in previous annual re¬
"Jtfow that warfare has ceased, it
has
taken
and
as
the annual
neutrality.
; "The
Bank
.
.
.
for
.
International
Settlements maintain business re¬
lations with most central banks.
place during the
war
genera! meetings
member
of
resident
on
rope or
the
board—whether
the continent of Eu¬
plsewhere-—has regularly
received
all-the accounts, and
other
documents
which would
have been remitted to him if the
board had met in the normal way;
and
the
members
have always
been
kept fully informed of the
business of the Bank.
"Moreover, no attempt has been
made from any quarter to influ¬
ence dn anfeincorrect manner the
ports; that the Bank for Interna¬
tional Settlements in its activities management of the Bank id the
during the
war
a
central bankers'
more.
bank, nothing
,
.
Since the BIS: was created
the U.S. tariff, it looks as
though
we shall continue to have a
deficit
central bankers today that Europe
This
'
be
can
met
by exporting to
who, in their turn,
the U.S.A. Indeed, as;
other countries
export
to
world
trade
against
with
the
is
have
now
developing,
unfavourable balance
our
U.S.A.
large countries,
and
other
some
we shall
probably
substantial favourable bal¬
with the rest of the world.
a
ance
Thus the
triangle of payments can
only be completed by the U.S.A.
importing not only from
from
us
but,
the rest of the world. The
successful conduct of world trade
needs such an institution, as the
BIS as a meeting place - where
depends oh the continued
central bankers
ness
of the
Continent
conformed to the principles yvhiqh
it adoptedatjthe. beginning of the
wfliih^
Britain, America and the
confer with each other and other great trading countries tob
technical problems.
Al¬
P9y for import balances} from one
though centra! banks are under
government dominance, they are country put of export balance to
may
discuss
still
their
not
entirely unhampered
in
technical
others. This;
operations.
In
Britain, for example, it is pointed
sence
out that the4 nationalization of the
is, of
Dependence
Bank of England does not mean
that the British Treasury fells the
Reverting
bank how
it
shall
carry put its
The game, ft is main¬
tained, is true in greater or lesser
These relationships make it im¬
they can
perative that the Bank should un^ hostilities in Europe and which ly #dopted*at,- the; beginning'of the meet alone, without the presence
dertake only such *operatipnSi;.as were specifically set out in a dec¬
pr- participation of Treasury pffi~
laration pf *Decir>l
are irreproachable fronv the point
939^##*^^ "^fA^pmprehensive study of the cials.
of view j both:;of ifbe ^^belligerent, all the-Bank's correspbnd^htsv'Tix^ d^aakV-business during the war,
reevering the problems with which Could World Bank Utilize BIS?
and of other countries. In Decern : •that declaration, the:Bank*
ber 1939 certain rules}of conduct' rtemational S ettlementsf'in ^busi-* it had to contend, the solutions
If there is a will to utilize the
which the Bank had, as
matte** •taesfereiations with almost all cen- adopted and the results obtained
BIB in Europe ais ail adjunct or
(once the questions still in sus¬
of fact^ observed since the'month: -traT banks, explicitly stated as its
branch of the World Bank, there
of September-were codified and poiicy^that it would limit itself to pense havp- been salved 1, is per¬
are no
insoluable legal harriers
Brought- W the knowledge of Its operations which would stand as tain to be of interest not only as to such a
development,
even
'above reproach from the
clients."
point part of the record of an excep¬
though there would be problems.
Prior to the outbreak of war in of view both of belligerents and tional period but also in view of
The BIS was federally chartered
the experience gained as to the
September4 1939* of course,- the neutrals,*of an international by the Swiss, subject to public
BIS as is well known delivered to ciple,-the'Bank has very consider¬ functioning
referendum.
But where there is
theReichsbank, Czechoslovak gold ably reduced the volume of its technical organization in very difa will there is a way, and it is to
which the BIS had in London. At business.
It has, however, been ficulf circumstances.";
be -hoped that the world will not
that time Germany was not at able, to fender valuable services
The Allied Attitude in 1939.
toss oyerboard thp experience,
war with
Britain or France and to a great number of central banks
Skills and information which have
the BIS had no legal excuse for and especially to those in coun¬
At the war's outbreakdBritain
been assembled at the BIS over
doin<* otherwise than comply with tries which .were ultimately drawn and France had to decide whether
the years.;
; :
the Reirhsbank's demand for the into the conflict and which sought they wanted the BIS to continue
^As a branch of the World Bank
gold. The Western powers had at the beginning of the war to in business or pot. They decided
the BIS could play a part in the
recognized,
de facto, certainly, safeguard their reserves by ex¬ that it would be in their best in¬
interim financing of needy Eu¬
the German absorption of Czecho¬ change * operations pr gpld
ship¬ terest to have the BIS collect what
ropean borrowers and could help
slovakia and the BIS was in no ments to overseas centers.
'
it could from Germany as long as
in
supervising the expenditure
"One of the chief
the
course,
es-^
of multi-lateralism.
on
National income
to
domestic
factors*
Mr. Gaitskell said:
functions.
degree of any central bank. There¬
carrying-out of its affairs or to in¬ fore, it is believed, central bankers
duce it to depart from the prin¬
continue to qeed-^at any rate in
ciples which had been unanimous¬ Europe—a place where
has scrupulously
of
"The
we
level of U.S. imports—if
to
are
governed
judge by the past—
predominantly
by
the
level, of U.S. national income. If
you
can
maintain
full
employ*,
ment in
AmeriC4,;*then the pros*;
for
multi-lateralism, for
,
-
trade balance with the U.S.
on our
there
.
have all been held by' proxyv At
the same time, however, every
*
•
francs).
is
possible to mention that the have been marked changes affect¬
Bank: has been able to safeguard
ing central banks everywhere.
all the deposits placed in its hands,
Such institutions have become
and especially those of countries
more and more governmental in¬
which were occupied in the course
strumentalities.
Formerly people
/>f hostilities, and that this has
feared that central banks would
beemthe case even when the asbecome too big and powerful.
fetsdn^qtiestibri (for instance, gold Row, according to European cen¬
bars) have been physically held tral banking
views, there is no
pn the continent in Europe.
such thing as a too-strong central
"In conformity with a decision bank.
adopted in the autumn of 1939, no
So far as the writer can gather,
meeting of the board: uf directors it is the opinion among European
22091;
(Continued from page
'.The.BIS at the outbreak of war
it
about 510 million to about
460 million Swiss gold
pects
from trad# restrictions,
expanding world trade, are
freedom)
for
bright. But should you' fail in this
objective,
from
should hot disguise
we
ourselves
must
which
the great
threaten
-
projects. It is
danger
'all
these
fallacy to assume;
a
that a return tq freer
tyade nec-'
essarily involves full employment
or
protection from slumps Bqoma
.
position to declare war ' pn Ger¬
many.
..
What
then
-
were
the
wartime
Berlin?
Detailed records are available in
p>e Bank of all its transactions and
decisions.
As one officer put it,
tvere is hardly a thoughtrin the
BIS that is not committed to pa¬
relations of the BIS with
per.-
lic
of
the
a
part, as possible of the Bank's
assets, and it has proved possible
tp obtain substantial reimburse¬
ments
of
credits
granted before
various countries- on
the
war
the
continent
gards
in
the
pub¬
concerned, the only infor¬ Germany,
So far as the American
is
preoccupa¬
management of the
Bank has been to realize as
large
tions
of Europe.
As
Bank's investments
re¬
in
it should be noted that
possible and to preserve the BIS
and servicing of World Bank loans
for postwar use.
On the other
in this part of the world.
hand, it is stated, the Germans,
An advantage of the BIS with
and
'especially the;;Reichsbank.
not knowing how the war would
end continued to honor their,.-ob¬
ligations to the BIS.
Why The Opposition to BIS?
It may not be without significance that the White-Morgenthau
relation
to
certain countries
now
under the USSR's influence is that
and
slumps
may
come,
and
whatever trade agreements
iff policy may be.
of
supreme
It is therefore
as
on
much of its time to agree¬
international policy for full;
employment
ters
op^rade
Employment should devote at
least
ing
gd
tar*
importance that the
International; Conference
and
or
which
to the other mat*
as
it
was
.'summoned to-
discuss. It is not too much to say
that
on
its
suCces& in handling;
they may find it easier to belong this greatest question of all—sta-i
to a non-political organization like
bility of employment and high
the BIS than to
and
the World Fund
Bank, should those
two
national
incomes
in¬
—
depend
the:
stitutions continue to be boycotted
hopes $£ a large part of the civ*
by the Russians, it is said. Whether
ilized world."
*
THE COMMERCIAL & FINANCIAL CHRONICLE
2256
A
I
..
,
t
.....
i
■
'•
,
,•
Acme Electric Corp.,
Cuba, N. Y.
132,740
Acme-Hamilton
Aug.
filed
29
shares
Mfg.
par)
.
N. J.
American Telephone &
5%-cumulative preferred
6
Bedford, Mass.
will
ord
Estimated
(Jointly).
and
>
F in
Nov.
on
common
(no par)
stated value $1 a share. Price—$5 a share. No
underwriting. For expansion of operations and opening
of additional offices.
ratio of
the
Broadcasting Co.* Inc., N. Y.
unit of
per
one
the public.
July 8 filed 196,500 units comprising 196,500 shares of
voting common stock ($1 par) and 589,500 shares of non¬
voting common stock ($1 par), each unit consisting of
1 share of voting common and 3 shares of non-voting
common.
Underwriters—None—the company intends to
stock directly to the public. Offer¬
unit.
Proceeds—Net proceeds esti¬
will be used to pay a mortgage on
plant, pay accounts payable, purchase equipment, for
building alterations and working capital. > ;
per
Colortype Co., Clifton, N. J.
*
$
—SPECIALISTS IN
:
,
•
Pittsburgh
48 WALL
Chicago
Chicago
*
☆
-.un,
& Co. Inc., New York;
20 decided to withhold action at this time.
ing—Of the total, the company is selling 100,000 shares
and six
stockholders, including Harry Scherman, Presi¬
dent, and Meredith Wood, Vice-President, are selling
the remaining 200,000 shares.
Price by amendment.
Proceeds—Company will use its net proceeds for work¬
ing capital to be used for expansion of inventories
and other raw materials
paper
Boston Store of
of
and book inventories.
Business—Selling books by mail.
|
'
Chicago, Inc.
Sept. 10 filed 30,000'shares ($50 par) 5% cumulative!
preferred and 500,000 shares ($1 par) common. Under¬
H. Davis & Co. and Stroud & Co., Inc.
writers—Paul
Offering—Preferred
-
•
■
Cincinnati
&
;
have
will
non-detachable
stock
St. Louis
•
•
HAnover 2-2727
of
Corporate and Municipal
Securities
\
Kidder,Peabody ©Co.
v
Philadelphia
•
|
,
CO.
INC;
ST., NEW YORK 5, N. Y.
Boston
.
Municipal Bonds
C. J. DEVINE
and other cities
(Sidney)
Underwriters and Distributors
#
r.
.
•
,
Blumenthal
—
United States Government Securities
.
-
Unsub¬
☆
me
FIRST BOSTON
New York
of
share
one
,
State and
•
of
purchase warrants for purchase of 30,000 shares of com¬
mon stock of the total common, 375,000 shares will be
stock will be offered publicly.
The 1,355,240 shares of
offered for sale for cash. 30,000 shares are reserved for
common
will be offered for subscription to common - issuance upon exercise of warrants attached to preferred!
stockholders of the company in the ratio of one-third
and 95,000 shares are reserved for issuance upon exer¬
of a new share for each common share held.
Unsub- v cise of outstanding warrants. Price—By. amendment.
scribed shares of common will be purchased by the > Proceeds—Net
proceeds, together with other funds, will
underwriters.
Price—Public offering prices by amend¬
be used to pay the company's 2% subordinated note i»
ment.
Proceeds—Net proceeds will be used to retire all
the principal amount of $5,268,750 and accrued interest.
unexchanged shares of $6 prior stock and to redeem its
Offering date indefinite..
/'
,
.
outstanding 7% preferred stock. Temporarily postponed.
J
Boston
basis
Aug. 30 filed 119,706 shares (no par) common; and sub*
scription^ warrants relating to 30,000 shares thereof.
Underwriting — None. Proceeds—For reimbursement
of company's
treasury for funds expended in re-»
demption of 3,907 ; shares of ; 7% v cumulative pre¬
ferred on April 1, and for funds deposited in trust for
redemption on Oct. 1 of remaining preferred shares. Al¬
though it was proposed to offer the stock for subscrip¬
tion to stockholders at $10 per share, company on Sept.
Shares are being sold
Price by amendment.
}
CORPORATION
the
nine shares held.
common
&
-----
on
each
of first preference not issued in exchange will be sold
to underwriters. The 300,000 shares of second preference
mated at $1,179,000
Corporate and Public Financing
stockholders
common
(letter of notification) 41,000 shares of 5%j
preferred. Offering price.
$6 a share. Underwriter—Estes, Snyder & Co., .Topeka,
Kans. To pay outstanding indebtedness and expenses and
to open five additional stores in Kansas City, Mo.. Offer-*
ing postponed indefinitely.
'
J
Offering—Stock will be offered to
Rollins & Sons Inc.
Co., of Pittsburgh
Offering date indefinite.
Underwriter—Smith, Barney & Co., New
Offering—Stock' will be offered for subscription
•
Book-of«tfte-month Club, Inc.^ New iYbrk
stock (par $5).
Oct. 28 filed 300,000 shares ($1.25 par) capital stock.
Underwriters—Rauscher, Pierce & Co. Inc., and E. H. ; Underwriter—Eastman, Dillon & Co., New York. Offer¬
of
Armour and Co., Chicago
July 12 filed 350,000 shares (no par) cumulative first
preference stock, Series A; 300,000 shares of convertible
second preference stock, Series A, and 1,355,240 shares
common stock
(par $5).
Underwriter—Kuhn, Loeb &
Co., New York.
Offering—The 350,000 shares of first
preference stock will be offered in exchange to holders
of its 532,996 shares of $6 cumulative convertible prior
preferred stock at the rate of 1.4 shares of first prefer¬
ence stock for each share of $6 prior preferred.
Shares
pates it will use the funds for its building and expansion
cumulative pref*
stock.
cumulative convertible $6 par
share
capital.
program.
Philadelphia
Sept. 12
by six stockholders.
by amendment. / Proceeds—Net proceeds initially will
be added to general funds, however, the company antici¬
equipment
and
Berbiglia, Inc., Kansas City, Mo.
additional share for
quire radio station WXYZ, to construct broadcast trans¬
mitter for station KGO at San Francisco and for working
American
machinery
Arkansas Western Gas Co.
notes payable to ac¬
Aug. 12 filed 30,000 shares ($100 par) cumulative pre¬
ferred stock.'
Underwriter—White, Weld & >Co-;; Price
additional
$1,200,000. Offering date indefinite.
being sold by St. Regis Paper Co., New York, and the
remaining 40,000 shares are being sold by I. Rogosin,
President of Beaunit Mills, Inc.
'
\
and one share of common. Prices—
share of preferred and one share of
retire bank loans of approx¬
one
June 5 filed 33,639 shares
•
$2,300,000 will be used by
of
off bank notes of about $1,100,000
Sept. 27 filed 180,000 shares ($2.50 par) common. Under¬
writer— White, Weld & Co., New York. Price — By
amendment. Proceeds—Of the total, 140,000 shares are
r.
Proceeds—To
to persons, firms, or corporations with whom the
corporation had network affiliation agreements on March
31. The remainder will be offered publicly.
Price by
$6
purchase
remaining 50,000
reoffer it to the public.
imately $100,000, to purchase wood-working machinery
capital. Temporary postponed.
pany
ing—Price
pay
The
—A maximum of
and for working
common
common.
scribed shares will be sold to the underwriters who will
16.
Proceeds—Working capital.
950,000 shares ($1 par) common Stock.
Underwriter—Dillon, Read & Co. Inc., New York. Offer¬
ing—A maximum of 100,000 shares may be sold by com¬
filed
distribute its
reserved for issu¬
being sold by three stockholders.
proceeds
to
preference -stock for
compa¬
stock to be sold to underwriter at 5c per
of preferred
share
$7
common.
American Cladmetals
net
of
are
Atlantic Refining Co.,
York.
to
warrant and exercisable through Oct. 1, 1951 for pur¬
chase of common at $1 per share. Underwriter — Amos
Treat & Co. Offering—To the public in units of one
,.
common,
prepay
•
erence
Aug. 29 filed 70,000 shares of Class A cumulative con¬
vertible preferred stock ($5 par) and 70,000 shares of
common
(50c par) and warrants for 50,000 shares of
they will be made by Frederick
To complete plant and equip¬
to provide working capital.
amendment. Proceeds—To
common
Oct. 29 filed 291,000 shares ($100 par)
Ansley Radio Corp., Trenton, N. J.
C, Adams & Co., Boston.
27
to
in the amount of
Offering—Price to public
.
Price—By amendment.
in the State of Maine,
June
shares
common
the company
The subscription offier wilt expire on Nov. 21.
Unsubscribed shares will be offered
for subscription to officers and directors of the company.
Lanes, Inc., Portland, Me.
American
Dec.
100,00
shares of
bach twoshares held.
postponed.
A I S, Inc., Jackson Heights, New York
Oct. 24 (letter of notification) 20,450 shares
and
American Zinc, Lead & Smelting Co., St. Louis
(letter of notification) 15,000 shares each of pre¬
ferred and common.
Offering price, $10 a preferred
share and 1 cent a common share.
If offerings are made
•
expire
shares of
covers
conversion of preferred. Underwriter—New-
burger & Hano, Philadelphia. Price—$25.50 a preferred
share and $12 a common share. Proceeds—Company will
receive proceeds from the sale of all of the preferred
Sept. 6 filed 336,550 shares common stock (par $1), Un¬
derwriting—No underwriting.
Offering—Stock will be
offered for subscription to common stockholders of rec¬
Oct. 9
ment and
will
Rights
by amendment.
$1,025,000 of proceeds of debs, for payment of an
Indebtedness to Bankers Trust Co., New York. Balance,
Air
held.
stock
First Boston Corp,
use
will be added to working capital. Offering
of
upon
,
of the com¬
Price—Debentures at 98. Proceeds—Company
shares
Proceeds—To provide subsidiary and associated
Aug. 22 filed $1,500,000 of 5 % sinking fund debentures,
due 1961, and 50,000 shares ($1 par) common stock.
Underwriter—Ames, Emerich & Co., Inc., and Dempsey
& Co., Chicago. Offering—The debentures will be of¬
fered publicly. The common shares will be issuable upon
the exercise of stock purchase warrants for purchase of
common stock at $2 a share above the bid price of such
common on the effective date of the registration.
Com¬
pany will sell warrants for 25,000 common shares to the
underwriters at 10 cents a warrant. The remaining war¬
pany.
Telegraph Co., New York
It also
ance
Price by amendment. Proceeds
$15,540,000 of the net proceeds will be
nies with- funds for extensions; additions and improve¬
applied to redemption of the company's cumulative pre-*
ments to plants, etc.
ferred stock, convertible 4% Series A, at $105 a share.
^
The balance will be added to general funds fori corporate
American Water Works Co., Inc., N. Y.
purposes including repayment of obligations, acquisition
of additional production, and expansion of refining,
March 30 filed 2,343,105 shares of common (par $5) plus
an additional number determinable only after the re¬
transportation and marketing facilities.
Business—En¬
sults of competitive bidding are known. Underwriters— $ gaged
in substantially all branches of
petroleum
business.
To be filed by amendment.
Probable bidders include
<
f
• 9r
Dillon, Read & Co. Inc., White Weld & Co., and Shields
Beaunit Mills, Inc., New York
& Co. (jointly), and W. C, Langley & Co. and The
share for the common. Proceeds—Company will'
proceeds to fully discharge secured demand
notes,v mortgage notes and partial discharge of * de¬
benture indebtedness. Offering temporarily postponed.
a
rants will be sold to officers and employees
mon.
j
2%% convertible de¬
bentures, due 1961, and 3,503,773 shares of common issu¬
able upon conversion of the debentures. - Underwriting—
No underwritng.
Offering—Debentures will be offered
for subscripton to stockholders of record Nov. 8 in the
ratio of a $100 principal amount of debentures for each
Offering—Company is offering the
Corp.,
■
Oct. 17 filed $350,377,300 15-year
shares of preferred, while the 82,000 shares of
common are being sold for the account of certain stock¬
holders.
Prices—$20 a share for the preferred, and
Aerovox
:
July 18 filed 100,000 shares each of $100 par prior pre¬
ferred stock and $100 par convertible second preferred
stock. Underwriting—Union Securities Corp., New York.
Price by amendment.
Proceeds—Net proceeds, with
other funds, will be used to redeem $20,000,000 of 7%
cumulative preferred stock at $115 a share plus accrued
dividends. Indefinitely postponed.
50,000
$11.50
apply
,
American Locomotive Co., New York
($20 par) and 82,000 shares ($1 par) common
stock.
Underwriters.—G. L. Ohrstrom .& Co. and S. R.
Livingstone & Co.
Offering date indefinite.
•'
Artcraft Hosiery Co.*Philadelphia
President. Price—By
for account of Harry Bloomberg,
amendment.
stock
(
Sept. 27 filed 53,648 shares ($25 par) 4^2% cumulative
convertible preferred and 150,000 shares ($1 par) com¬
Sept. 25 filed 75,000 shares of common stock (par $1).
Underwriter—Riter & Co. Proceeds—Stock being sold
common
Corp., Trenton,
shares
50,000
($1
American Limoges China Corp., New York
v
stock.
Underwriters—Herrick, Waddell & Co., Inc., and First
Colony Corp.
Offering—To be offered publicly at $5
a share.
Proceeds—Company will receive proceeds from
the sale of 68,880 shares and four selling stockholders
the proceeds from the sale of 63,860 shares.
Company
also will receive proceeds from the sale of 20,000 war¬
rants for common stock to underwriters at an aggregate
price of $200.
Of the net proceeds ($292,940) $50,000
will be used to pay current bank loans; about $20,000
will be used for machinery and equipment, and the re¬
mainder for working capital.
J ■
filed
26
>:
.
INDICATES ADDITIONS SINCE PREVIOUS ISSUE
•
June
• •
•
.
inRegistration
Now
Securities
I
•
.
.
Thursday, October 31," 1946
"
''Members
p
New York
Pittsburgh * Cleveland
San Francisco
☆
Founded 1865
...
.
.
.
.
-j
of the New York and Boston Stock Exchanges
'
Boston
Philadelphia
Chicago
iVolume 164
Number 4538
•v ,t
THE
>
(Showing probable- date of offering)
Zatso
Food
...-Preferred
November
Americ£^$;^^^
'jrX
.
Felt & Tarrant Mfg. Co.
Debentures
....Common
;i>'November 7,.
1946^^/^5-^
Chesapeake & Ohio Ry._—Equip. Trust Ctfs.
Chicago & North Western Ry. •
Equip. Trust Ctfs.
(CST)_
Espey Manufacturing Co
Maltine
Common
Co
Preferred
Milk-O-Mat
1
Corp.
November 8,
Common
1946
Great Northern Ry._._ConditionaI Sales Agreements
November 13,
Inc., Philadelphia
holders who will receive proceeds.
(Harry), Inc., Wilmington, Del.
Sept. 25 filed 12,500 shares ($25 par) 4 % % cumulative
•convertible preferred stock and 50,000 shares (200 par)
^common stock. Underwriter
C. K. Pistell & Co., Inc.,
—
3New York. Price
sa
share
sare
for
being
—
$25
common.
sold
by
share for preferred and $11
a
•
Callahan Zinc-Lead
Oct.
23
such
or
-1
at offices of Middle West Service
Chicago 6, Illinois,
Oct. 31.
;;
:
■
-
number
of
28,000
shares
shares of $1 par
will aggregate
as
Proceeds—7,000 preferred shares
the remaining 5,500 pre¬
common are Keing sold by
company,
<pffering date indefinite.
Briggs & Stratton Corp., Milwaukee
Aug. 9 filed 76,000 shares (no par) capital stock. Under*
writers—A. G. Becker & Co., Inc., Chicago!" Price by
^amendment.
Proceeds—Shares
Underwriters
Forgan
(letter of notfication) 60,000 shares of common.
Offering—Price $2 a share. Underwriter—R. A. Keppler*
& Co., Inc., New York.
Proceeds—To demonstrate the
Cameron Engine by flight tests in company-owned plane.
(N. Y.)
Corp. and First Boston Corp. (jointly). Price by amend¬
ment.
Grand Haven, Mich.
IVIay 3 filed 70,000 shares of cumulative preferred stock
{$100 par). Underwriters—To be filed by amendment.
Bids Rejected—Company July 23 rejected two bids re¬
ceived for the stock.
Blyth & Co., Inc., and F. S. MoseSey & Co. and associates submitted a bid of 100.06 for a
4.30%
dividend.
Harriman
Securities Corp. bid
Ripley
100.779 for
&
Co. and Mellon
4.40% dividend.
In¬
a
Central Soya
writers
Proceeds—Net proceeds will be used to redeem the out¬
standing Class A common shares of American Gas and
Canadian Admiral
to
Buffonta Mines Ltd.,
Sept.
12
filed
1,000,000
shares
rency) common. Underwriting
Inc., Buffalo, N. Y. Price—$1
$1
—
a
par
(Canadian
cur¬
George F. Jones Co.;
share, American cur¬
rency. The
cents
a
underwriting commission will amount to 20
share. Proceeds—For development of gold min¬
ing^properties.
•
mv-n-**
-
<
' - ::
Burgess-Norton Mfg. Co., Geneva, III.
Sept. 23 filed 10,000 shares ($50 par) 5% cumulative
preferred and 120,000 shares ($2.50 par) common. Under¬
writer—H. M. Byllesby and Co. (Inc.), Chicago. Offer¬
ing—Of the common, 110,000 shares are being sold by
stockholders. The remaining 10,000 shares are reserved
for
issuance
upon the exercise of warrants attached to
preferred. Price, by amendment. Proceeds—To re¬
imburse treasury for purchase of machinery and equip¬
ment at a cost of $98,386 and payment for new building
feeing constructed at estimated cost of $223,700,; balance
the
(no par) common. Under*
Forgan & Co., Chicago. Offering —
initially will be offered for subscription
held.
capital, etc.
Chase
at
rate
Unsubscribed
of
share
one
shares
will
be
for
each
sold
to
Price by amendment. Proceeds—Working
Offering indefinitely postponed.
Candy Co., St. Joseph, Mo.
Sept. 12 filed $2,500,000 of 4% sinking fund debentures^
1961; 100,000 shares ($20 par) 5% convertible cumu¬
Corp. Ltd., Toronto
lative
preferred, and 170,000 shares ($1 par) common.
F. S. Yantis & Co., Inc. and H. M.
Byllesby and Co. (Inc.), Chicago, and Herrick WaddeU
& Co., Inc., New York. Offering—Common will be of¬
fered for subscription at $10 a share to common stock¬
Underwriters
holders
will
for
Mines, Ltd., of Toronto,
underwriter
by post-effective amendment.
Offering—
at $1 a share in Canadian funds. Proceeds
variety of purposes in connection with explora¬
tion, sinking of shafts, diamond drilling and working
capital.
—For
public
a
'A
v'--.-1
'-A-"v■|v,vv;3 j?:'
offered
be
share
one
for each
two
held
shares
not subscribed
common
for
officers,
Price—The
directors
employees will be sold to the
proceeds, estimated at $5,-
and
underwriters. Proceeds—Net
856,125, will be used to pay the balance of the purchase
acquisition of the
operated by Clinton In¬
dustries, Inc., as its national candy division with plants
in St. Louis; Mo., and Chicago. The balance will be used
amounting
price,
•
to
$5,150,000, for
candy manufacturing business
May 29 filed 35,000 shares of $2 cumulative preferred
stock, series A (no par), but with a stated value of $50 a
share, and 175,000 shares of common stock (par $1).
Underwriter—Paine, Webber, Jackson & Curtis, Chi¬
to
its
redeem
4%
working capital.
Offering—The stocks will be offered to the public
prices to be supplied by amendment.
Proceeds—To
pay off $3,000,000 loan from First National Bank Chi¬
cago and Harris Trust and Savines Bank. Chicago, bal¬
cago.
•
at
ance
of
Oct. 19. Shares of
on
sale to officers, directors and
debentures will be offered at
100 and the preferred at $20 a share. The common will
be offered to stockholders at $10 a share. Pursuant to the
common
stock subscription rights, F. S. Yantis & Co*
will purchase 100,000 shares of the 170,000 shares of
common
for investment. Any of the remaining 79,006
shares which are not subscribed for by stockholders and
June 24 filed 400,000 shares of common stock.
Under¬
writer—Registrant will supply name of an American
To the
—
rate
at
of record
employees.
serial
debentures and for additional
Offering indefinitely postponed.
.China Motor Corp., New York
Oct'
($100 par) Class A stock, en¬
preferential 'dividends, cumulative from
24 filed 7,500 shares.
titled
to
6%
July 1, 1947, and to participating dividends. Underwriter
Offering—Company expects to sell the stock
working capital. Offering deferred indefinitely.
—None.
•
Illinois
Central
Electric
&
Gas
Co.,
largely
Rockford,
subscription to
for
each
of
Chinese
five
shares ($15 par) common.
Under¬
Offering—Shares will be offered for.
common stockholders at rate of one share
shares, held.
It will determine after the
The
Illinois Public Service Co.,
(io/3i)
Springfield,
petitive bidding. Probable bidders include Dillon, Read
& Co., Inc.; Smith, Barney & Co., White, Weld & Co.;
Glore, Forgan & Co.; Lehman Brothers and Lazard,
Freres & Co. (jointly).
Offering—New preferred stock
will be offered on a share for share exchange basis to
Pro¬
purpose
of the company is to serve as a United
the development of Chinese industries.
The cpmpany said it jnf^nd^ ^9 a^ap^t .^American ma¬
chinery and equipment for use in China, to train Chinese
industrial personnel in the United States, and to export
machinery and equipment to China and import mer—
chandise to the United States.
Los Angeles
Clary Multiplier Corp.,
;
Aug. 14 filed 150,000 shares ($100 par) cumulative pre¬
ferred stock.
Underwriter—To be determined by com¬
the
in
proceeds,
States base for
'
Central
communities
Price—$101 a share.
estimated at about $748,500, are
expected to be applied as additional working capital,
payment of indebtedness and to provide capital to aid
in establishing a branch plant in Canton, China. Business—Manufacture of condenser units at Linden, N. J., plant.
ceeds—Net
expiration of the stock purchase warrants whether there
will be any public offering of the unsubscribed shares.
Price—$15 a share.
Proceeds—Proceeds, estimated at
$1,200,000*, si will be held iby the company as a construc¬
tion fund to be used for its present and contemplated
Construction program.
Business—Public utility.
in.
members
to
United States and elsewhere.
HI.
writer—None.
Toronto, Can.
shares
underwriters.
Oct. 24 filed 80,000
-
Co., Inc., Fort Wayne, Ind.
stockholders
common
7V3
8 filed 150,000 shares ($1 par) common stock.
Underwriter—Dempsey & Co. Offering—Stock initially
will be offered to common stockholders of Admiral Corp.
at $3 a share.
Proceeds—$75,000 is earmarked for pur¬
chase of machinery and equipment, and tools, jigs,, dies
and fixtures: balance will be available for corporate
purposes. Indefinitely delayed.
the outstanding preferred stock of Brunner.
'
'
Glore
—
Common shares
Central Electric & Gas Co., Sioux Falls, S. D*
.
A
,
Aug. 21 filed 90,000 shares
July
definitely postponed.
Brunner Manufacturing
Co., lltica, N. Y.
Sept. 13 filed 180,185 shares ($1 par), common. Under¬
writers—George R. Cobley & Co., Inc., Albany, N., Y.,
and Mohawk Valley Investing Co., Inc.,
Utipa. Offering—
Of the total, 110,000 shares will be offered
publicly and
the remaining 70,185 shares will be offered in exchange
-Jor 23,395 shares of Class B common of American Gas
IMachine Co., of Albert Lea, Minn., on the basis of three
shares for each Class B share.
Price—$10.25 a share.
\
due
Carscor Porcupine Gold
Ontario
Union Gas Co.
by amendment.
Possible bidders: Glore,
Co.; Lehman Brothers-Lazard Freres & Co.
&
(jointly); Smith, Barney & Co.-Harriman, Ripley & Co.
(jointly); Blyth & Co., Inc., Stone & Webster Securities
July 29 filed 220,000 shares ($1 par) common stock. Un¬
derwriters—Gearhart & Co., Inc. Offering—Of the shares
registered, 100,000 are issued and outstanding and will
be sold to the underwriters by three stockholders at
$4.50 a share for their own, account. The remaining
120,000 shares are being offered by the company. Price
$4.50 a share. Proceeds—Company's share to pay rene¬
gotiation refund ih amount of $180,000 ito;theU.S,
Government, and for additional working capital. Offer¬
ing date indefinite.
holders. Temporarily postponed.
Brooklyn
constituted
upon consummation of n
into the issuer of American Public
Co., to provide funds for retiring the preference
shares of the issuer and American Public Service Co.*
not exchanged for shares of the merged corporation.
being sold by stock¬
are
be
merger
Service
ferred shares and all of the
^present stockholders. Net proceeds to the company, es¬
timated at $147,500, will be used to prepay to the ex¬
tent possible outstanding $149,300 mortgage liabilities;
will
same
proposed
2
Camfield Mfg. Co.,
Corp., 20 North Wacker
11:30 a.m. (CST), on.
Central & South West Utilities Co.
^
as
$100,000 on behalf of Harrison White, Inc., New York,
who purchased the shares from the issuer in July, 1938,
as underwriter.
Price—At market.
Proceeds go to Har¬
rison White, Inc.
Oct.
to
up
Jt 1
Aug. 30 filed its ($5 par) capital stock. Company's name
is to be changed by post effective amendment to Central
& South West Corp. (Del.)
Prospectus will be issued
in connection with the public, invitation for sealed bids
for the purchase of a sufficient number of such shares
Co., New York
(letter of notification)
common-
,
more than 150,000 shares of old,
preferred stock are de^
posited for exchange the number of shares to be ex*changed'will be pro rated. Shares of new preferred not
issued in exchange will be sold to underwriters.
Bids
Invited—Company has asked for bids for services in con»nection with the exchange offer and the
purchase of
any unexchanged shares.
All proposals will be received
Drive,
Cameron Aero Engine Corp., New York
...Common
Sept. 27 filed 268,875 shares ($1 par) common. Under¬
writer—Van Alstyne, Noel & Co., New York. Price—By
amendment. Proceeds—Stock is being sold by share¬
Braunsteln
when market conditions improve.
1946
Consumers Power Co..
Bowman Gum,
^
.
6, 1946
Dow Chemical Co..
Noon
'
May 24 filed 312,000 shares of common stock (no par).
through competitive bidding. Under¬
writers—Names by amendment.
Probable bidders in¬
clude Blyth & Co., Inc.; The First Boston Corp.; Harri¬
man
Ripley & Co.
Offering—Stock is being sold by
Standard Gas and Electric Co., parent, of * California.
Bids Rejected—Standard Gas & Electric Co. rejected
June 25 two bids for the purchase of the stock as un¬
satisfactory. Blyth & Co., Inc., and First Boston Corp.
bid of $28.33 a share, and Harriman Ripley & Co. bid
of $24,031 a share.
Stock will again be put up for sale
Stock will be sold
Corp.™...
Crucible Steel Co. of
/
1, 1946
zzn
holders of its old preferred stocks other than the Middle
West Corp. which holds 38,564 shares of £uch stock.
H
for purchase of additional machine tool equipment.
Of¬
fering indefinitely postponed. .* :*'• VC*. c'
r. * •<0.
• = I?• v".•
"K 1
California Oregon Power Co.
^
NEW ISSUE CALENDAR
November
COMMERCIAL & FINANCIAL CHRONICLE
Sept. 3 filed 150,000 shares
5V2% cumulative convertible
preferred stock (par $5). Underwriting—Maxwell, Mbr~
shall & Co., Los Angeles. Price—$5.25 a share. Proceed#
proceeds, estimated at $650,000, will be used to
a $90,000 bank loan, to construct a factory and
Net
repay
'J/v
~ - V' *•
(Continued on page 2258)
Underwriters
Distributors
•
Municipal—Railroad
/
Public
Utility—Industrial Securities
Direct contact with Marketa in
principal financial eentera.
E. H. Rollins & Sons
Incorporated
;•
NewTork
I
40 Wall Street,
•
Boston
-
New York 5, N. Y.
Philadelphia
•
Chicafo
-
Sap Franciaco
V
2258
{THE COMMERCIAL'
(Continued from page 2257)
Cooper Tire & Rubber Co., Findlay, Ohio
July 17 filed 60,000 shares ($25 par) 4^% cumulative
convertible preferred.
Underwriters—Otis & Co, and
Prescott & Co., Inc.
Offering—To (he public. Price—
$25 a share. Proceeds—Estimated net proceeds of $1,356,200 will be used to redeem its outstanding 4% deben¬
tures, due 1967, to pay certain debts and for additional
equipment, manufacturing space and working capitaL
Offeririg date indefinite. . \
v
:
office
building at San Gabriel, Calif., at a cost of about
$250,000, and to purchase additional equipment, esti¬
mated at $250,000.
The balance will be added to work¬
ing capital. Offering temporarily postponed*
Climax
Aug. 28
,
preferred
standing
Industries, Inc., Chicago
filed 150,000 shares 5%
($10 par)
convertible cumulative
and 250,000 shares ($1 par) out¬
Underwriter—Brailsford & Co,
share; price of common $4 per share. Proceeds of
preferred to pay company's indebtedness to General
Finance Corp., purchase equipment and real estate and
per
for working capital. Indefinitely
•
postponed.
Colonial Airlines, Inc., New York
Oct. 25 filed 150,000 shares ($1 par) capital stock. Under¬
Parker & Redpath, Washington,
D. C.
Price by amendment.
Proceeds-—Net proceeds
will be used,to pay off a $550,000 loan to (he Continental
Bank & Trust Co. of New York; purchase equipment
and development expenses of Bermuda route. The bal¬
ance will be used to increase working capital.
Business
y'Duluth (Minn.) Airlines, Inc.
(letter of notification) 12,000 shares ($5 pari
common
and 8,000 shairCs ($5 par) Class B
common.
Offering—Price $5 a unit.
No underwriting.
Oct.
15
Aug.
For purchase of additional flight
^pitairndvqtte^
Durasite
filed
9
Creameries of America, Inc.,
$5
Los Angelas
17 filed
f;
116,986 shares ($1 par) common.
Underwriters—Kidder, Peabody & Co., New York; and Mitchum, Tully & Co., Los Angeles.
Price by amendment.
Proceeds—Of net proceeds, $1,000,000 will be used for
additions and improvements to company's plants and
for purchase of additional machinery and equipment,
and $900,000 will be applied to the payment of outstand¬
ing "bank loans. Theremainder will be added to work¬
ing capital.
Y.I
Crucible Steel Co. of
Oct. 18 filed
.
New York.
1
Colorado Milling & Elevator Co., Denver, Colo.
Aug. 20 filed 70,000 shares ($50 par) cumulative con¬
America, N. Y.
Empire Millwork Corp., New York
;
>
by a short term bank loan. Proceeds from the sale of
preferred, together with other funds, will be used to
*
on or
stock which will be used to increase
Offering—Of the total 56,420 shares
are
a trust agreement in satis¬
Of funds loaned by the trust to the company;
10,500 shares are to be issued to satisfy options, 2,300
shares will be sold to employees and it is expected that
faction
the remaining 20,360 shares will be sold to persons under
the trust agreement
Price—$7.25 a share. ! Proceeds-*—
For purchase of machinery and inventory.
Business-
Manufacturing parts for automobile industry.
Commonwealth Telephone
1
fering temporarily postponed.
Equitable Life & Casualty Insurance Co.,
Co., Madison, Wis.
(letter of notification) 90,000 shares of common;
policyholders at the rate of 11 shares
per $1,000 of insurance at $2 a share.
No underwriting;
To raise capital and surplus required by law to qualify i
an old line legal reserve capital stock life insurance com¬
pany.
'•
'
•
;•
'
•
•
Oct. 16
company's $12,217,000 of 15-year 3%% sinking fund de¬
bentures, due 1955, at 102. The balance will be used for
purchase or construction of property additions or rear¬
To
/
be
of preferred and all of the
common
are
Ben Weingart, President and director.
add the proceeds to working capital.
being sold by
Company will
Ero
May 31 filed 500,000 shares of common stock (par $1).
Underwriters—Sabiston-Hughes, Ltd., Toronto.
Offer¬
ing—Shares will be offered to the public at 75 cents a
share.
Proceeds—Net proceeds, estimated at $300,000,
will be used for mining operations.
-
Aug. 9 filed
Delta Chenille
105,000 shares common stock (par $1K
Underwriter—Straus & Blosser, Chicago.
Price—$11.50
a share*
Proceeds — Shares are being sold by stock¬
(11/13)
unspecified number of shares (no par)
common' stock.
Underwriters—To be determined by
competitive bidding.
Probable bidders include Morgan
Stanley & Co.; Lehman Brothers; Shields & Co.; Harrian
Ripley & Co. and The First Boston Corp. (jointly).
Price by amendment.
Bids Invited—Company intends
to issue bids for the sale of additional
common stock
in the amount Of
$20,000,000.^ Under tentative schedule
man
bids are to; be advertised Nov. 7 to be received
up. to;
Nov. 13 at office: of Commonwealth Southern Corpl'
20 Pine StreetNfew YOrk.
\
; V
Continental MotorcCdrp-> Muskegon, Mich.
II;
July 8 filed 250,000 shares 4y*% cumulative convertible
■
preferred stocky Series A ($50 par). < Underwriters—Van
Alstyne, Noel & CoU Offering—Price by amendment.
Proceeds—For rearrangement and expansion of the com*
pany's manufacturing plants, acquisition of additional
tools and.facilities* and/for additional
working> capital
.
requirements. Offering temporarily postponed..;
i
Chemicals
Oct. 28
(letter of notification) 10,009 shares of class A
20,000 shares of common. Prlce~$i0 a unit,
consisting of one share Of class A and two shares of
common.
Underwriter—General Stock & Bond Corp.,
stock and
Boston.
For working
capital.
writers—Aronson, Hall & Co. Price
Inc.
common; Under¬
$8.25
share.
Proceeds—To repay demand loans and for general funds.
(Originally company filed for 80,000 preferred shares
par $25 and 350,000 common shares.)
•
per
($1 ■ par)
offering. Offering—Price $5 a common share and 5 cents
a
warrant.
Underwriting—B. G. Cantor & Co., New
York.
For payment of debt and working
Fatk Mercantile Co., Ltd.,«Boise,
capital.
Ida.
21;r(letter of notification) 3,000 shares of 4Vi% pre*
($100 par).: Price—$100 a share. Underwriter-*
Childs, Boise, Idaho. Proceeds
Richard Meade Dunlevy
to retire debentures and for
,
(A. B.)
Farquhar
expansion purposes.
*
Co., York, Pa.
Sept. 26 filed 30,000 shares ($25 par) cumulative con-:
vertible preferred; 45,000 shares ($5 par) common; and;
an unspecified number of common shares to permit con¬
version of the preferred. Underwriter—Stroud &. Co.,
Philadelphia. Price—By amendment. Proceeds —*
$355,350 4%% sinking
fund mortgage bonds, due Aug. 1,
1957, to pay off
certain Contracts and chattel mortgages of $72,000 and
Inc.,
Proceeds will be used to redeem
$800,000 to reduce principal on outstanding
Inc.,-Boston,'Mass.
(11/74)^
59,500 shares
(letter of notification)
stock purchase warrants, 40,000; the under-*
writer to designate who shall subscribe to 22,500 and thes
company to designate who shall subscribe to 17,500; not
exercisable until the expiration of one year after pubiid;
bank loans;
Fashion Frocks, Inc.
—
Devonshire
14
common;
ferred
Mich.
($1 par) common. Under¬
writer
C. G. McDonald & Co., Detroit Price — $5.59
a share. Proceeds — Stock is
being sold by six share-
c
July 24 filed 200,000 shares ($1 par) common stock.
Underwriter—Van Alstyne, NOel & Co. Offering—Offer¬
ing does not constitute new financing but is a sale of
currently outstanding shares owned by members of the
Meyers family, owner of all outstanding stock. Aftef *
giving effect to the sale and assuming exercise of certain
Meyers family will retain
of the. common stocky'
;
;;
?
warrants and an option^ the
ownership of approximately 58%
Offering temporarily postponed..
.
Dobbs Houses, Inc., Memphis, Tenn.
fe:s:Foil:A:TaiTant,M
Co.•.(11/6-1$) ^;
<
Sept. 27 filed 75,000 shares', ($1 par) comihon; Under^ >> Septir25 filed 251,340 stores Of comthon stock (par $5)*
Lee Higginson C(Mp. and Kidderr Peawriter^Emanuel, Deetjen & Co^ New^Ybrfc; PHcerrSY1! Underwriters
toehdfneiit.' Proceeds^Net proceeds^ will be used' foil
body & Co.; Offering v-rr Shares are being sold by share¬
expansion of business Consisting' of airline catering and/ holders after consummation of proposed changes in com4
*
Restaurant and coffee shop operations: Date of offeringv' l^any's capitalization and lbs
Comptometer Co. Price by amendment;^;,
;J v ■ I
indefinite. '
:cv
:
/.
^
Dow Chemical
Co^ Mldland/ Mich^
/
.
tll/G-T)'
Oct.
-
j
•; -"V/
Fiduciary
,
l|aii8gem6nt,ii«e^JerB^ City, N. Jj
867,420 shares <$25 -pat)^common. UnderH,
17 filed $30,000',000 is'-year debentures; due 1961;-<■' Sept. 27 filed
Writer—No underwriting.» Offering—^Stock will "be of4
Underwriter—Smith, Barney &■ Co^ ' New York. Price
fey amendment. Proceeds—To be added to cash funds
f6red for subscription .i to common vstockholders on; the
t6 be expended for general corporate purposes;
-
•
Price—$3
Drayer-Hanson; Inc., Los Angeles
Aug. 12 filed 80,529 shares ($1 par) class A stock;
vertible into
common
>stOck
(par $1).
heldl
Increase capital so
basis of four additional shares for-each cme share
1
*
_
Continental-United Industries Co*,
Aug. 2 filed 150,000 shares ($1 par)
Oct.
Sept. 25 filed 70,920 shares
6
;r
Espey Manufacturing Co^ Inc., N. Y.
Oct.
Co., Inc., Jackson, Miss.
Oct. 2 filed 300,000 shares
Detroit Typesetting Co., Detroit,
'r/'V;':
holders.
•
(20# par) common. Under-;
writers—Names by amendment. Price, $8 a share. Pro¬
ceeds—Of total, company is selling 150,000 shares and
remaining 150,000 shares are being sold by Apponaug
Manufacturing Co., Inc. Principal stockholder estimated
net proceeds to company of $1,007,913 will be added
to general funds to be applied for corporate purpose.
Company anticipates expenditures of $300,000 in 1946
and $300,000 in 1947 for equipping and absorbing costs
of starting operations of four plants, two of which al¬
ready have been contracted for. The balance will be
added to working capital.
Manufacturing Co., Chicago
Sept. 5" filed
Danly Machine Specialties, Inc., Cicero, III.
July 26 filed 62,000 shares ($25 par) 5% cumulative
convertible preferred stock and 71,950 shares (par $2)
common stock 40,000 by company and 31,950 by certain
stockholders. Underwriters—Paul H. Davis & Co., and §
Shillinglaw, Bolger 8$ Co.. Chicago. Price by amend¬
ment. Proceeds—Company"Svill use proceeds, together
with a $1,000,000 bank loan, to purchase .machinery,
buildings and to retire bank indebtedness. Offering date
holders who will receive proceeds.
Consumers Power CO., Jackson, Mich.
offered to
.
Cyprus Mines, Ltd., Montreal, Canada
:
Sept. 23 filed 16,071 shares
Consolidated Hotels, Inc., Los Angeles
Aug. 9 filed 97,368 shares ($25 par) 4^% convertible
preferred stock and 150,000 shares (50c par) common.
Underwriter—Lester & Co., Los Angeles. Price—$25 a
share of preferred and $9 a share of common. Proceeds
•—Of the total, the company will receive
proceeds from
the sale of 851 shares of preferred. The
remaining shares
6al|
Lake City
:4ndefinite./g/g;l|^^
($100 par) $4 cumulative
preferred. Underwriters — Paine, Webber, Jackson &
Curtis and Stone & Webster Securities Corp. Offering—
Shares will be offered for exchange for $5 cumulative
preferred, on a share for share basis, plus cash adjust¬
ment. Shares not exchanged will be sold to underwriters.
Price by amendment. Proceeds—To redeem at $110 a
share, plus diVs., all unexchanged Old shares.
productive capacity,
business. Thb
lines of products and expand the
new
Under¬
to be issued to persons under
;
remaining 100,000 shares of common stock and the pre*ferred shares will be sold- by present stockholders; Of¬
(11/6-11)
<
> a;
c^eds from the issuance of 50,000 shares of the common
add
before Dec. 31, 1946,
rangement Of /existing facilities/ or for
demption of the bonds presently offered.
/
Aug. 28 filed 50,900 shares of $1.25 cumulative converti¬
ble preferred stock, (par $25) and 150,060 shares of
common
stock (par $1), Underwriters—Van Alstyne^
Noel & Co. Proceeds—Corporation will receive the pror
$25,000,000 of first mortgage sinking fund
Underwriter—The First Boston Corp.,
Price by amendment.
Proceeds-^-Net pro¬
ceeds will be used to redeem
ferred stock for redemption at $55 a share plus accrued
dividends.
Funds for the redemption will be supplied
writing—None.
.
share.
a
bonds, due 1966.
P Columbia Axle Co., Cleveland, Ohio
Oct. 28 filed 89,580 shares ($5 par) common.
-
Chicago, are offering to purchase the shares of comqiori
to be recived "by stockholders accepting this option at-
stockholders. Offering date indefinite.
selling
August 15 filed 300,000 shares ($1 par) common stock.
Underwriters—Emanuel, Deetjen & Co., New York. Price
by amendment. Proceeds-^-Company will receive pro¬
ceeds from the sale of 150,000 shares and Generoso Pope,
President of company, who is selling the remaining 150,000 shares will receive proceeds from these shares. The
company will use its proceeds for payment of mortgage
notes, open account indebtedness and for purchase of
additional equipment. Any balance will be added to
working capital. Indefinitely postponed.
4
repay the bank loan. Indefinitely postponed,
v
Corp., Clearwater, Fla.
rently, holders of prior preference .are given option to
surrender their stock and receive $25 in cash and one
share of common in exchange. Mullaney, Ross & Co.^;
300,000
*
Oct.
preferred stock.
Underwriter—Union Securities Corp., New York.
Price by amendment. Proceeds
—Prior to the proposed issue of preferred stock, the
company plans to call its $3 cumulative convertible pre¬
and servicing equip*
iment, payment of deferred salary balances, for working
:
shares ($5 par) common stock.
Underwriters—First Boston Corp., New York.
Price by
amendment.
Proceeds—Go to Joseph Levy, President,
>—Air
vertible
A
Class
Clothes, Inc., L. I. City, N. Y.
writer—Auchincloss,
Colonial Sand & Stone Co., Inc., N.
.Thursday, October 31, 1946
Oct. 11 (letter of notification) 99,000 shares of common
Copco Steel &\ErigineerirtgCj>-» Detroit '
and purchase warrants covering 50,000 shares of com¬
Aug. 19 filed 115,000 shares ($1 parf common. Under¬
mon. Offering—Price $3 a common share and five cents
writer—E. H. Rollins & Son, Inc., New York.
Price
a warrant.
Underwriter—Amos Treat & Co., New York,
by amendment. Proceeds—Of the shares being offered
^or; machinery, plant renovation and working capital..
company is selling 100,000 shares and 15,000 shares are
^Offering date indefinite.
being sold by a stockholder. The company will use its
proceeds to provide additional factory space and pur- ;
Elgin (III.) Sweeper Co.
chase machinery and equipment and to construct a new
Oct. 16 (letter of notification) 57,462 shares (no par)
office building. The balance will be added to working
common.
To be offered in exchange for outstanding
capital. Offering date indefinite.
prior preference stock (no par) en basis of 6 shares of
common for
each share of prior preference. Concuft
Crawford
common stock.
.Offering— company is offering the preferred and Gen¬
eral Finance Corp., issuer's sole stockholder, is offering
the common for its own account. Price of preferred $10
.
FINANCIAL CHRONICLE
&
conr
Underwriters-*
Maxwell, Marshall & Co., Los Angeles. Pricc^-To public:
$10.25 a share.
Proceeds—Net proceeds, estimated at
$694,761, will be used to pay off loans and accounts pay-;
able. Offering temporarily postponed.
d
share.1 Proceeds—To
OOmpany may Rxpand operations in the
ment and reorganization financing.
;
.
r •
r,":■"=:
Films Inc.,
f
"
■
-
I"few York
June 25, filed 100,000 shares
P
■
*-'•
v..v
field of develop*
>
•.
* ' *:
:
■>
($5 par) class A stock
an£
300,000 shares (10 cent par) common stock, of whick
200,000 shares reserved for conversion of class A. Each
■
Volume
164
Number 4538
share
class
A
of
chares of
dell
common
stock
THE COMMERCIAL & FINANCIAL CHRONICLE
is
&
Co., Inc., New York. Offering—To be offered
publicly at $8.10 a unit consisting of one share of class A
stock and one share of common stock.
Proceeds—$201,©00 for retirement of 2,010 shares
($100 par) preferred
stock at $100 a
share; remaining proceeds, together with
other funds, will be used for
production of educational
•
-of
,
•
\
"
,*•
,,
't
VI,
"
' '
■
-
standing
(preferred,
discharge
y
a
share; com¬
cumulative
Offering tem¬
a
of
v
mate dissolution.
Remaining funds will be used as work¬
ing capital. Business—The company's business consists
of banking operations, small loan operations, consumer
installment finance operations, insurance operations and
approximately 200,000 shares have agreed to waive
Offering date indefinite.
income from investment securities.
;
Thorndike, Inc., New York. Price, $4.50 a share. Pro¬
ceeds—For purchase of all the
outstanding stock of the
Benton Stores, Inc. and its affiliates from William Book¬
man and Maurice
Hoppin pursuant to terms of a con¬
dends.
It also will
'
v*
a
use
approximately $402,000 toward
'
•"
*v"
C
!
*
'
'
.'
'•
'
,
'
(
w-'
June 27 filed
100,000
shares
($1 par)
Nov. 3. Any unsubscribed
shares will be purchased by
Chicago Title & Trust Co., a stockholder. No under¬
writing. For expansion of building and plant facilities.
Keystone .Custodian Funds Inc., Boston
"Oct.
of
M
'
29 filed certificates of
Keystone Custodian Fund, series S-l. Underwriter—
Co. of Boston.
Price—At market.
Pro¬
common
ceeds—For investment.
stock.
Underwriters—Van Alstyne, Noel & Co., New York, and
Johnston, Lemon & Co., Washington, D. C.
Offering—
To be offered to the public at
$8 a share.
ProceedsCompany is selling 60,000 shares and stockholders are
selling 40,000 shares.
The company will use its proceeds
to pay the costs of opening additional stores and to ex¬
»Oct. 25r filed 119,431 shares ($5 par) common. Under¬
writer by amendment.; Price by amendment. Proceeds—
Shares are being sold by three
stockholders, including
J. G. White & Co., Inc.; New York, which is
selling all
of its holdings of such stock.
Following the sale of its
; holdings J. G. White will no longer be parent of Frontier.
.Company will receive none of the proceeds. Business-r
public utility.
of Keystone Custodian
pand merchandise in its existing stores. Offering tem¬
porarily postponed.
Trinidad, Colo.
•
•
185,000 shares of
common
stock
.
Oct. 21 filed 50,000 shares ($10 par) 5% cumulative con¬
vertible preferred and 100,000 shares
($2 par) common.
Underwriters—Dempsey, Tegeler & Co., and J. W. Brady
& Co., St. Louis.
Price—$10 a preferred share and $5 a
common share. 'Proceeds—Net
proceeds, estimated at
($2 par).
are
Helicopter Air Transport, Inc.,r Camden, N. J^
18 (letter of
notification) 50,000 shares of capital
stock (p*ar 10c). Underwriter—Putnam & Co. as to 5,500
shares; issuer plans sale of 44,500 shares for its own
account. Price, $3 per share. Proceeds—For acquisition
of
conditioning unit) .and other
additional
helicopters and related
29
filed
$5)
Glencair Mining Co. Ltd.,
Toronto, Can,
Oct. 16 (letter of
Proceeds—For
•
capital. Price, $3
Glensder Textile Corp., New York
Aug. 28 filed 355,000 shares ($1 par) common, of which
55,000 shares are reserved for issuance upon the exer¬
_
a
share. No underwriting contract, how¬
Co., Tucson, Ariz.; J. Earle May & Co., Palo Alto, Calif.
Holt (Henry)
purchase warrants.
Underwriter
Van
Alstyne, Noel & Co. Offering—The 300,000 shares are
.Issued and outstanding and being sold for the account
—
& Co., Inc., New York
June 28,1946 filed 20,000 shares of 4ty2% ($25 par) cumu¬
lative convertible preferred stock and 33,884 shares
ot certain stockholders.
Company has also issued 55,000
purchase warrants to the selling stockholders at
.10 cents a share entitling them to purchase up to Aug.
1,
1949, common stock of the company at $11 a share. Price
by amendment. Offering temporarily postponed.
stock
.
>;
Grand Canyon-Boulder Dam
Tours, lnc„ Boulder
■'..y.y city, Nev. ■.ytyyyyyy
($1 par) common stock. Underwriters—Otis & Co.,-Cleve¬
land, Ohio. Offering—Company is selling the preferred
shares and stockholders are selling the common shares.
Price—$25 a share of preferred. Price for the common
by amendment. Proceeds—Net proceeds will be added
to general funds. Offering date indefinite.
•
Household Finance Corp., Chicago
Oct. 29 filed
60,000 shares (no par) common.
UnderSept. 3 filed 636,500 shares ($5 par) capital stock. Under-;
Offering—Stock will be offered for
writing—There will be no underwriting but Everett N. y- writing—None.
subscription to certain employees and officers of the
.Crosby, President and James Manoil, Treasurer, will act
company and its subsidiaries.
Price—$20.50-!a share.
as selling agents. Offering—Of the
total 500,000 shares"
Proceeds—Estimated proceeds of $1,210,000, after* ex¬
will be offered to the public and the
remaining 136,500
penses, will be added to working capital.
Business—
shares will be reserved for issuance
partly in paymentEngaged in small loan business.
1
"
of an indebtedness. Partly as a commission
\
to the selling
agents and partly on exercise of options.
Illinois Power Co., Decatur, III.
Price—$5 a
;
share. Proceeds—For
refinancing of company and for
June 17, filed 200,000 shares ($50 par) cumulative pre¬
"•working capital and funds for development and construc¬
ferred stock and 966,870 shares (no par) common stock.
tion program.
'
■v-y ;\TV;,yyyyyi::';"Underwriters—By competitive bidding. Probable bid¬
ders include Blyth & Co., Inc. and Mellon Securities
Griggs, Cooper & Co., St. Paul, Minn.
Corp. (jointly) and Morgan Stanley & Co. and W. E.
Sept. 3 (letter of notification) 12,000 shares
Hutton & Co. (jointly). Proceeds—Net proceeds from the
($1 par)
common.
Underwriters—Kalman & Co., Inc., St. Paul.
sale of preferred will be used to reimburse the com¬
Price—$25 a share.
Proceeds
For improvement and
pany's treasury for construction expenditures. Net pro¬
~
.
—
500,000
investment.
> *
^
_
Keystone Custodian Funds Inc., Boston
Oct.
29
filed
certificates
of
400,000
UnderPrice—At market,
participation
for
shares of Keystone Custodian Fund, series B-3.
writer*-The Keystone Co. of Boston.
(Proceeds—For investment.--" * " •
•
Keystone Custodian
Oct.
29
filed
Funds
certificates
'I?
common
for
of
'
common
will be
applied for re¬
' '
'
750,000
Under-
Price—At market.
■
^
';
for
Fund, series B-4.
-r.,
'
VI"
100,000 shares
($1 par)
Underwriter—Keane
Offering—Price $2.50
&
share.
Proceeds
for working capital to enable issuer to produce its prod¬
a
uct, an automatic dishwashing machine in commercial
quantities. Offering delayed due to market conditions.
L^
Co. Inc., New York
lOct.
3 (letter of notification) 39,000 shares ($4 par) con¬
vertible Class A stock and 19,500 shares (10c par) com¬
on behalf of the company and 19,000 shares of ($4
par) Class A and 9,500 shares of the common on behalf
of Carl C. Langevin, President of the Company. Offering
—Price $5,125 a unit consisting of one share of Class A
stock and one-half share of common.
3,000 units are
reserved for sale to certain officers and employees of
mon
Underwriter—Hill, Thompson & Co., Inc.,
indebtedness and
the company.
Proceeds—For payment of
New York.
to increase working capital,
Leader
Sept. 26
Enterprises,
v
Inc., New York
(letter of notification)
150,000 shares of (100
par) common and 57,000 shares ($5 par) 6% cumulative
convertible preferred, Series A. Price—10 cents a com¬
mon
share and $5 a preferred share. Underwriter—
Gearhart & Co., Inc., New York. Proceeds—-To replace
working capital used to promote new publication called
Fashion Trades
and
to provide
additional working
capital.
•
,
Petroleum
Madison
Co., Basin, Wyo.
(letter of notification) 150,000 shares common
stock (par $1) on behalf of company and 25,000 shares
each on behalf of A. R. Griffith, C. W. Mills, A. J. ChisOct.
21
holm, Jr. and C. M. Spicer, all officers and
Mills, Denver.
Macco
Sept.
25
Corp.,
filed
Underwriter
By
directors of
W.
Price—$1 a share.
Underwriter—C.
For equipment and working capital.
.the company.
—
Clearwater, Calif.
100,000 shares ($1 par) capital stock.
Dean Witter & Co., Los Angeles. Price-
amendment. Proceeds
—
To pay off
outstanding
bank loans.
•
ceeds from the sale of
Inc., Boston
participation
benefit of issuer.
Co., Detroit.
»
notification) 119,500 shares of ($1 par)
ever, 55,000 shares to be issued to or through H. R. O'Neil
of Buckley Bros., Los Angeles, will be sold by one or
more of the following firms:
Buckley Bros.; Durand &
development.
Offering indefinitely postponed.
{
for
participation
Aug. 27 (letter of notification)
and
HollywoodXolorfilm Corp., Burbank, Calif.
Oct. 2 filed 300,000 shares ($1
par) stock. UnderwriterMark Daniels & Co., Toronto. Price—40 cents
a share
modernization program.
/
J;: Lake State Products, Inc., Jackson, Mich.
•
(par
Offering temporarily postponed.
stock
•
notification) 10,000 shares of preferred
10,000 shares of common stock
$1). Underwriter—Frank P. Hunt, 42 East Ave.,
Rochester, N. Y. Price—$6 per unit of one share of each.
Proceeds—Purchase of machinery, paper and working
capital. Business—Publishing.
ble preferred stock series A
($20 par) and 150,000 shares
f 10c par) common, all issued and outstanding and being
-sold by eight selling stockholders.
Underwriters—Van
Alstyne Noel & Co. Price by amendment.
Proceeds—
(To selling stockholders.
of
of
Proceeds—For investment.
Oct. 15 (letter of
stock
(par
*
cise
certificates
writeri—The Keystone Co. of Boston.
equipment and
Helicopter Digest Publishing :Co.f Inc. V
Inc., Milwaukee, Wis.
Proceeds—For mine
•
<
shares of Kejrstone Custodian
working capital.
-
.July 31 filed 50,000 shares of $1.25 cumulative converti¬
Funds).
^
Keystone Custodian Funds Inc., Boston
a'
'(Canadian
5,000,000 shs.
Oct.
-used to finance the company's new
product, the "Gem-co" space cooler (an air
Industries
(
shares of Keystone Custodian Fund, series K-l.
Under; writer—The
Keystone Co. of Boston. Price—At market.
amendment.
'$893,000, will be added to working capital arid will be
Glen
(
Fund, series S-4. Underwriter—
Price*—At market.
Pro¬
ceeds—For investment.
being sold by certain stockholders.
Stock
acquired by selling stockholders in exchange for 432,000
shares of common stock (par
$3) of American Engineer¬
ing Co. Underwriter—By amendment. Offering—Price by
General Engineering and Manufacturing Co.,
St. Louis, Mo.
/
>
The Keystone Co. of Boston.
(Oct.
Shares
'
Keystone Custodian Funds Inc., Boston
Oct. 29 filed certificates of participation for
HayCs Manufacturing Corp-, Gr. Rapids, Mich.
Feb. 27 filed
..vv.;
participation for 50,000 shares
The Keystone
Hartfield Stores, Inc., Los Angeles
■
Kane County Title Co., Geneva, III.
•
manufacturing plant in Chicago; bal-
for working capital. Offering date indefinite.
proceeds.
receive
will
for subscription at $30 a share at the rate of one share
for each two shares held. Subscription rights terminate
:
Proceeds—Net proceeds will be used to redeem
the purchase of
:ance
Aug. 28 filed 140,000 shares of common stock (par $1).
Offering—Price $10 per share.
/;'•
outstanding 6% cumulative preferred stock at an
estimated cost of $213,258, exclusive of accrued divi¬
is selling 350,000 shares and two stockholders,
Roland E. Fulmer and Louis H.
Newkirk, Jr., are selling
<the remaining 100,000 shares. Price—$6 a share. Proceeds
.-^-For purchase of sweet potatoes, plant expansion, addi¬
tional storage facilities, research and
development work
rand working capital. "
Offering date indefinite.
v
Sept. 25 (letter of notification) 4,000 shares of common.
Offering—To be offered to stockholders of record Oct. 4
its
company
York
Underwriter—Otis & Co.
Proceeds—Selling stockholders
Offering date indefinite.
;,Hammond Instrument Co., Chicago
Aug. 8 filed 80;000 shares ($1 par) common.
Underwriter: Paul H. Davies & Co.,
Chicago. Price by amendment.
.>
.
International Dress Co., Inc., New
tract/entered into lastAugust 15.
•
will be sold in such man¬
or
the board of directors shall determine. Price—$20
the sum of $760,000 for payment of a loan and
$703,930 for retirement of Industrial's first and second
preferred stocks in order to prepare for the latter's ulti¬
-&
c
expiration of the
be purchased by
pany,
Oct. 23 filed 100,000 shares
(50c par) common. Under-?
% writers—E. F. Gillespie & Co., Inc., and Childs Jeffries
share for share
may
share.
Halliday Stores Corp., New York
•
At the
Proceeds—Of the proceeds, the company will
advance to Industrial Credit Corp., its sub-holding com¬
a
their preemptive rights.
•
stockholders
common
ner as
$6
loan.
Offering—Shares will be
stockholders in the ratio of one
share for each five shares held.
(par $1).
Fresh Dry Foods, Inc.,
Columbia, $• C«
Aug. 30 filed 450,000 shares (10^ par) common. Under¬
writer—Newkirk & Banks, Inc. Offering—Of the total
•corporate purposes.
notes,
pay
retire
^
common
subscription period, shares hot sold
other
Underwriters—Blair & Co. Offering—Stock is being of¬
fered to present shareholders at
$3 per share.
Holders
Proceeds—Approximately
$1,060,950 for redemption of class A preferred; balance
Jor expansion, working
capital, etc. Dividend rate and
price Iby amendment. Offering temporarily postponed.
.
Proceeds—To
/ "'
'
'
St. Louis, Mo.
Under¬
offered for
writing—None.
Gulf Atlantic Transport'n
Co., Jacksonville, Fla.
Jan. 17 filed 270,000 shares of common stock
Foster & Kfeiser Co., San Francisco
July 29 filed 100,000 shares of $1.25 cumulative con¬
vertible preferred stock (par $25). Underwriter—Blyth
& Co., Inc. Offering—Underwriters are
making exchange
,
Prices, preferred $100
share.
■'«
Bancshares Corp.,
subscription to
;
Temporarily postponed.
Frontier Power Co.,
a
porarily postponed.
..■Foreman Fabrics Corp., New York
July 29 filed 110,000 shares ($1 par) common stock, all
ioutstanding. Underwriters—Cohu & Torrey. Price by
.amendment. Offering date,; indefinite.
'•
common.
V ■'
Industrial
Oct. 29 filed 100,000 shares of ($4 par) common.
Graham, Jr., 100,000 shares of issued and out¬
$14
mon
.Balance will be added
on
'■
■
.
and J. C.
Inc., Philadelphia
.offer to holders of Class A preferred
basis plus a cash adjustment.
'
•
Byllesby and Co., Inc.
Offering—Underwriters to
purchase from the company 18,500 shares of preferred
and 20,000 shares of
common; and from Fred P. Murphy
'
Aug. 5 filed 60,000 shares ($15 par) cumulative preferred
stock.
Underwriters—Eastman, Dillon & Co. Price by
amendment.
Proceeds—To be used to redeem 15-year
'3%% sinking fund debentures, due 1959; and $2.50 cumillative preferred at $53 a share.
to working capital.
time 64,750
IM.
'
jpayinent of debt and working capital. -p.
.
any
common stock at
$16 a share at the ratio of 3%
shares for each preferred share held; and 120,000 shares of $1 par common stock.
Underwriters—H.
Oct. 28 (letter of
notification) 400,000 shares (5c. par)
'common. Price—5. cents a share. No underwriters. For
Food Fair Stores,
$4.25 preferred to purchase at
■common
Flagstaff Bonanza MiningCo., Park City,Utah
•
the
demption of 5% cumulative convertible preferred stock
not converted into common prior to the redemption
date.
The balance will be added to treasury funds.
Company has asked the SEC to defer action on its fi¬
nancing program because of present market conditions.
shares of
'films.:'
4.
Grolier Society, Inc., New York
July 29 filed 18,500 shares at $4.25 cumulative preferred
stock ($100 par),
with non-detachable common stock
purchase warrants entitling registered holders of shares
initially convertible into 2
Underwriters—Herrick, Wad-
stock.
2259
(Continued
on
page
2260)
;_J
THE COMMERCIAL & FINANCIAL
2260
(Continued from page 2259)
Mada Yellowknife Gold
*■
June
-
-
Mines, Ltd., Toronto
per
,
;
July 11 filed $22,500,000 20-year collateral trust sinking
fund Series A bonds, and a maximum of 1,568,980 com¬
For
•
Milk-O-Mat
(11/7)
Corp., New York
Oct. 28
company, -j Price to public, $5 per share.
Net proceeds
will be used for advancement of necessary funds for
the Canadian corporation
June
25
filed
Service
Co., Preque Isle, Me.
shares
($10
Mississippi Fire, Casualty & Surety Corp.
determined
be
working capital and general
approved by the SEC, on June 24, 1946, which among
other things provides for the elimination of all out¬
standing debentures and preferred and common stocks,
and for the issuance of $22,500,000 of bonds and 2,300,000
of new common shares. The SEC has extended to Nov.
corporate expenses.
par) capital stock.
through competitive
bidding.
Probable bidders include. The First Boston
Corp.; Kidder, Peabody & Co., and Blyth & Co., Inc.
(Jointly); Harriman Ripley & Co; Coffin & Burr and
Merrill Lynch, Pierce, Fenner & Beane. Proceeds—The
shares are being sold by Consolidated Electric and Gas
Co., parent of Maine Public Service, in compliance with
geographic integration provisions of the Public Utility
Holding Company Act.
150,000
Underwriters—To
only), Bear, Stearns & Co. (stock only), First Boston
Corp., White, Weld&Co.-Kidder, Peabody & Co. (jointly).
Offering—Bonds and common stock are being offered in
connection with a
compromise recapitalization plan
(letter of notification) 59,500 shares of common
To be sold by certain employees of the
stock (par $1).
company.
par).
Underwriters—By amendment.
Halsey, Stuart & Co. Inc. (bonds
($5
Bidders may include
—
Maine Public
shares
mon
250,000 shares of capital stock (par 40c).
Underwriters
Names to be supplied by amendment.
Offering—Stock will be offered publicly in the U. S. at
4oc: a share
(Canadian money).
Proceeds—Proceeds,
estimated at $75,000, will be used in operation of the
Electric Association-
New England Gas and
Underwriter—Boettcher and
unit.
Co., Denver, and Hutchinson & Co., Pueblo, Colo.
retirement of debt and for working capital.
filed
7
than 98*;>
more
; i
Thursday, October 31, 1946
CHRONICLE
:
August 19 (letter of notification) 14,000 shares ($10 par)
common stock, offering price $20 a share..Underwriter—
Clany M. Seay, Jackson, Miss, will undertake to obtain
signatures authorizing subscriptions for the stock to
create capital and surplus for - operation of business.
30
which refinancing may be
time within
for
the
withdrawn
were
Aug. 12.
Sale postponed
Company is to be organized in Mississippi.
•
Mountain
States
Power
carried out.
purchase of the bonds and the common
stock which were to be received by the company Aug. 13
Bids
New
Co.
N.
Electric
State
York
Gas
&
indefinitely.
Corp.,
Ithaca
Y.
Oct 30 filed $13,000,000 first mortgage bonds, due 1976,
(no par).
competitive bidding. >; and 150,000 shares of ($100 par) cumulative preferred.
Underwriters—To be determined by competitive bidding.
Probable bidders include Blyth & Co. and Smith, Barney
& Co. (jointly); First Boston Corp. and Glore,.Forgan &
Ripley & Co.; The First Boston Corp. Offering—Shares,
are owned by
Co. (jointly) and Halsey, Stuart & Co. Inc. (bonds only)'.
Standard Gas & Electric Co. and con¬
stitute 56.39% of the company's outstanding common.
Proceeds—Estimated proceeds of $28,000,000, together
June 6 filed 140,614 shares of common stock
Maltine
(11/7)
Co., New York
Underwriters—To be determined by
Probable bidders include Blyth & Co., Inc.; Kuhn, Loeb
& Co. and Smith Barney & Co. (jointly); Harriman,
Oct. 15 (letter of
notification) 2,900 shares of 4%% con¬
stock (par $100). Underwriter—East¬
Dillon & Co.
Price—$100 and dividend.
Stock¬
vertible preferred
man,
holders of record Oct. 9 given right to subscribe at par
ratio of one share for each 10 shares held. Rights
'•;Y expire Nov. 6. Proceeds, together with funds from loans,
will be applied to construction cost of new plantiand
in
laboratories at Morris
«
Max
Factor &
Plains, N. Y.
;
sale has been temporarily postponed.
..
,
Muehlebach
Co., Hollywood, Calif.
amendment.
,.x
-.
Business—Manufacture of make-up and
cosmetic products..
.
'
"
"
"
1
*
•
.
Kansas
Co.,
Sept. 25 filed 41,327 shares ($25 par) 5% cumul. par¬
ticipating preferred and 40,000 shares ($1 par) common.
Underwriters
Headed by Stern Brothers & Co., Kan¬
sas
City. Offering — Preferred and 20,000 shares of
common
will be offered publicly.
Remaining 20,000
—
shares
common
will be offered to officers and key em¬
ployees at $4.75 each. Price—Preferred $25 per share
and common $5.75 per share. Proceeds—Of shares of¬
May McEwen Kaiser Co., Burlington, N. C.
fered to public. 6,500 share of preferred and 20,000 shares
Aug. 22 filed 175,418 shares ($1 par) common stock.
Underwriters—Goldman, Sachs & Co., and Hemphill, ■/ of common are being sold by the company. Proceeds— %
Proceeds together with other funds, will be used to pay
Noyes & Co. Price—By amendment. Proceeds—Net pro¬
off $181,909 balance of note held by Schroder Trust Co.,
ceeds go to 11 shareholders who are selling-the stock
New York; to finance a proposed expansion program
being registered. Offering temporarily postponed.
and to increase working capital.
•
Meili-Blumberg Corp., New Holstein, Wis.
'
Oct. 23
common.
'
(letter of notification)
Price—$150 a share.
working capital.
1,000 shares (no par)
No underwriting.
For
V.„.
.
Factors
Merchants
'
Corp., New York
■Oct. 21
(letter of notification) 2,877xk shares 7% cumu¬
participating preferred stock (par $100). Un¬
at present but company may employ
individuals to promote the sale of the stock. Price,
some
^
Murphy (G. C.) Co., McKeesport, Pa.
shares of common stock (par $1).
Underwriter—Smith, Barney & Co. Price by amend¬
ment.
Proceeds—Redemption of outstanding 4%% pre¬
ferred stock at $109 a share plus dividends. Indefinitely
postponed.
-
•
Mutual Telephone
Oct.
28
filed
Underwriting
$100 per share. Purpose, working capital.
Metalite
Corp., Las Vegas, N©v.
share
—
Co., Honolulu, Hawaii
shares
150,000
•
None.
($10 par)
Offering
—
For
common
for
each
four
shares
held
of
stock.
to
ratio of one
subscription
stockholders at $10 a share in the
common
•
record
Nov.
on
1.
Oct. 16
Unsubscribed
and two shares of common.
bidder. Price—$10 a share. Proceeds—Pro¬
estimated at $1,485,610, will be used to repay
short-term bank loans and to finance plant replacements
(letter of notification) 500 shares ($100 par) 7%
cumulative preferred and 1,000 shares (10c par) common.
Price—$100.20 a unit consisting of one share of preferred
No
underwriting.
For pur¬
chase of equipment.
shares
will
-
be
sold at public
auction to
improvements.
service.
Business — Furnishing
telephone
§2|YYYY Lamaiy Colo,
.v/.:'
■,
Yr;-/
June 28 filed 28,960 shares of 4^% cumulative preferred
-stock ($100 par), 250,000 shares of common stock ($1
bidding.
Probable bidders include Bly.h & Co., Inc.; Kidder, Peapar) and warrants for 28,960 common shares (attached
body & Co.; The First Boston Corp.; Harris, Hall & Co.
to preferred stock).
Underwriters—Stone & Webster
(Inc.); Merrill Lynch, Pierce, Fenner & Beane, and Ira
Securities Corp., and Bosworth, Chanute, Loughridge &
Haupt & Co.
Offering—New preferred will be offered
Co.
Price by amendment.
Proceeds—Shares are out¬
on a share for share exchange basis to holders of its
standing and are being sold by stockholders. Tempora¬
outstanding 7% prior lien, $6 no-par prior lien, 6%
rily postponed.
Y'Y'YY
preterred and $6 (no par) preferred.
Of the common
stock being registered, company is selling 40,000 shares, Y
National Aluminate Corp., Chicago
Middle West is selling 57,226 shares and Halsey, Stuart
Sept. 27 filed an unspecified number ($2.50 par) com¬
& Co. Inc., New York, is selling 22,774 shares.
Proceeds
mon shares. Underwriters—First Boston Corp., New York,
—Michigan will.yse.net proceeds from bonds to redeem
*and Lee Higginsort* C0i$., Chicago/ Price—By airierid$3,500,()00 33A% series A first mortgage bonds, due 1972,
% ment. Proceeds—The stock is issued and outstanding and
at 106.75 and interest.
Net proceeds from sale of com¬
is being sold by shareholders. Names of the selling
mon and from shares of new preferred not issued in ex¬
stockholders and the number of shares to be sold by each
change will be used to redeem $375,000 3 %% serial de¬
will be supplied by amendment.
bentures, due 1951, at 101.2 and interest.
It also will
c
•
r
redeem
at
105
determined
and
accrued
shares of prior lien and
by
competitive
dividends
all
unexchanged
preferred stocks.
■
:j<r
-
Michigan Steel Casting Co., Detroit :
-
.
27 filed 100,000 shares ($1 par) common stock.
Underwriters—Cray, McFawn & Co., Detroit. Offering—
June
To be offered
publicly at $8.25
chase additional
share.
a
Proceeds—Pur¬
facilities, expansion, etc.
National Manufacture and Stores Corp., Atlanta
8,500 shares of common
share.
Underwriters—
Clement A. Evans & Co., Inc. Proceeds—For redemp¬
tion of outstanding $2.50 class A non-cumulative stock.
June 12 (letter of notification)
stock.
Offering price, $35 a
Postponed indefinitely.
r
Y'i definitely postponed.
Yellowknife
Gold Mines Ltd.,
Toronto,
7
Anderson, Ind.
shares of common
as shares will be
offered under competitive bidding. Probable bidders in¬
clude Blyth & Co., Inc.; The First Boston Corp.; Stone
& Webster Securities Corp., and Harriman Ripley &
Co., Inc. (jointly). Of the shares registered, 182,667 are
being sold by Midland Realization Co.; 54,426 by Mid¬
land-Utilities Co., and 146,923 by Middle West Corp.
fc
of notification)
(letter
50,000
shares
($1
par)
Offering to stockholders for subscription at the
stock.
85,000 shares ($1 par)
Underwriters—Newburger & Hano, and
.rate of l share for each 2V2 shares held.
Price—By
.amendment.
No underwriting.
For additional working
($1 par) common. Under¬
writer—R. J, Hale, East Aurora, N. Y. OfferingY/Of the. .capital.
v'A;Y •>
•
*/' .'■ ■
'->-Yv
total company is selling $1,000,000 shares and. the re¬
>
maining 250,000 shares are being sold for the account of
^ Newburgh Steel Co., Inc., Detroit
; the principal underwriter, brokers and dealers, which
Aug. 2 filed 30,000 shares of 6% cumulative convertible
.shares they will receive as additional compensation on
preferred (par $10), and 30,000 common shares ($1 par).
the.* basis of 250 shares for every 1,000 shares sold for
Underwriters—Names by amendment. Offering—Shares
the
Price—60 cents
share. The underwriters
a
a
discount
on
the
1,000,000 shares of 15 cents
are
and
issued
outstanding
Cohen 'and
.each. Proceeds—For exploration; and mine development
Maurice
.work.
and Secretary-Treasurer,
®
Oct.
'4''
1
Middlekamp
Building Corp.,
Pueblo,
23
(letter of notification) $95,000 4%
mortgage sinking fund bo ids, due 1960.
.
Colo.
first closed
Price—Not
'
and
Samuel
.
are
being
Friedman,
sold
a
by
President
respectively, each selling 15.0^0
shares of preferred and 15,000 shares of common.
—$10
filed
M
1.
Price
share for the preferred and $6 a share for the
common.
\
stock,
Ohio Associated Telephone Co.
Sept. 11 filed $3,250,000 of first mortgage bonds, 2%%'
series, due 1976; and 35,000 shares (no par) $2 cumulative
Bonds to be sold privately.
Underwriters—*
by the company
sold by General
amendment. Proceeds—Net
proceeds to the company will be used to redeem its
$1,770,000 of 3Vz°Io first mortgage bonds, due 1970, at
107V2%; to repay $1,450,000 in bank loans; to pay Gen¬
eral Telephone Corp. $937,518 in retirement of its 6%
cumulative preferred owned by General and to reim¬
being registered, 21,000 are being sold
the remaining 14,000 are being
-and
Telephone Corp. Price—By
funds previously
burse its treasury for
Old Town Ribbon &
Sept.
shares
—The
expended. YJ/Y; Y"
Carbon Co. Inc.,
Brooklyn
($5 par) common. The
are being sold by three stockholders. Underwriter
First Boston Corp., New York. Price—By amend¬
filed
19
140,900
shares
ment.
Qrange-Crush de Cuba, S. A.,
Havana, Cuba
r/YY
($1 par) common and 40,000
warrants.
Underwriter—Floyd D. Cerf Co., Inc., Chicago.
Offering—Price $4.75 a share.
Proceeds—Of the total
company is selling 37,500 shares and stockholders are
selling 87,500 shares. The company will use its proceeds
for equipment and working capital.
Y
V Y.v.v
;J■
1
Oxford Radio Corp., Chicago VY;;:'v Y':.
Y ?
July 22 filed 125,000 shares
60,000 shares ($1 par)
share.
UnderwriterFloyd D. Cerf Co., Inc., Chicago.
For payment of note,
purchase of machine tools and testing equipment and
for general corporate purposes.
Offering date indefinite.
11
(letter of notification)
Offering—Price $5 a
Portland, Ore.
Pacific Power & Light Co.,
July 10 filed 100,000 shares ($100 par) preferred stock.
Underwriters—By amendment. Probable bidders include
Blyth & Co., Inc., White, Weld & Co. and Smith, Barney &
(jointly); The First Boston Corp., W. C. Langley & Co.;
Harriman Ripley & Co.
Offering—Company proposes to
issue the 100,000 shares of new preferred for the pur¬
Co.
pose
)
,
V"
r >
i.t
lJ
dividend rate the 67,009
of refinancing at a lower
outstanding preferred
shares of Pacific and the
47,800
preferred shares of Northern Electric Co., in connection
with the proposed merger of Northwestern into Pacific.
In connection with the merger, the outstanding preferred
stocks of Pacific and Northwestern will be exchanged
share for share, with cash adjustments, for the new pre-
b..
i
York ]
common
.
.
company.
21
Kobbe, Gearhart
& Co., Inc.
Price, $6.75 a share. Proceeds—Net pro¬
ceeds to the company from 62,000 shares, estimated at
$350,200, will be applied as follows: About $111,300 for
retirement of outstanding preferred stock; $41,649 to
purchase 100% of the stock of two affiliates, and bal-ance $197,000 for other corporate purposes.
The proiceeds from the other 3,000 shares will go to selling
stockholders. Offering temporarily postponed.
Oct. 21 filed 1,250,000 shares
will receive
Inc., New
NugenUs National Stores,
June
common.
Canada
'
Public* Service Co.
Indiana
28 filed maximum of 384,016
stock. Underwriters by amendment
.
Y National Tile & Mfg. Co.,
Oct.
Midas
Northern
Aug.
Oct.
Offering in-
Wis*
shares
70,000
Paine, Webber,* Jackson & Curtis and Stone &;Webster
Securities, both of New York. Offering—Of the preferred
Dehydrating & Milling Co.,
stuck and
be
29Y filed
preferred.
,
.
National Alfalfa
June 24 filed
derwriters—To
Mfg. Co., La Crosse,
($2 par) common stock.
Underwriter—Cruttenden & Co.
Offering—All shares
are issued and outstanding and being sold for the account
of present holders.
Price—$16 a share. Proceeds—To
selling stockholders.
Indefinitely postponed.
ceeds,
and
$3,500,000 /of series A first mortgage bonds,
1976; 14,000 shares;($100 par) cumulative preferred
120,000 shares ($10 par) common stock.
Un¬
Northern Engraving &
Aug.
the highest
Michigan Gas & Elec. Co., Ashland, Wis.
due
constructions.
June 13 filed 250,000
lative and
derwriter—None
$6,000,000 contribution from
a
Co., parent, will be used for
:
Brewing
(George)
with
Sept. 4, but the
City, Mo.
Oct. 25 filed 600,000 shares
($1 par) common.
Under¬
writer—Goldman, Sachs & Co., New York.
OfferingShares are being sold by stockholders.
Of the total,
550,000 will be sold to the public and 50,000 will be sold
to employees (latter shares not underwritten). Price by
NY PA NJ Utilities
redemption of $13,000,000
$ of 3%% bonds, due 1964, and 120,000 shares ($100 par)
5-10% cumulative serial preferred and to finance new
Sale Postponed—Standard Gas & Electric Co. asked for
bids for the purchase of the stock on
•nr.
•
•
•
v .•
-v
•
'•"!
■
■
:r
•Via:
Volume 164
Number 4538
EHCOMMERCIAL
T^t""'
ferred stock of Pacific, the surviving, corporation. Offer¬
ing price-r-To be supplied by amendment. "tl>
k
& FINANCIAL CHRONICLE
sold by four stockholders of the
company who will re¬
ceive proceeds. The registration showed that the com¬
ing fund gold bonds, 4%% series due
1979, at 102%,
Business—Operation of Safe Harbor (Pa.) Hydroelectric
Project.
/ :
v
changed its authorized .capital from 4,000 shares
($100 par) common to 400,000 shares ($1 par). Each
shares of $100 par common was
changed into 100 shares
of $1 par
common, which exchange, was consummated
Sept. 23.
pany
Pal Blade Co., Inc., New York v;
y-
June 28, 1946 filed 227,500 shares
($1 par) capital stock.
Underwriters
F. Eberstadt & Co., Inc.
Offering —
,
—
225,000 shares
outstanding and
are
stockholders, and 2,500 shares
Marlman
to
all salaried
employees. Indefinitely
'
poned. f
Palmetto
August
stock.
being sold by 10
being sold by A. L.
are
are
16
Fibre
filed
4,000,000
shares
&
(100 par) preference
Co., New York. Price
velopment purposes and the
operating capital.
•
.
■
•'
.
balance
will
be
used
•"
•
'
Passaic, N. J.
July
writer—Underwriting
arrangements will be supplied by
is. contemplated that Van. Alstyne,
Noel & Co., New
York, may be one of the underwriters.
Offering—Company is making an exchange offer to
'amendment, but it
baler
of acquiring the controlling in¬
Randall
publicly
company will be applied to make loans to Textileather
and Pantasote for various corporate
purposes.
of
pari-mutuel
<
machines
Montreal, Canada
machinery
and
other
^
.f
.
J
|
f
"5 v
Pharis Tire & Rubber Co.,
f
-
Newark, O.
not
options which it
proposes
For
thereafter
r
a
and
before
the
.
Plastic
;
t.
Molded
,
\
.
Arts,
.
Herrick,
Waddell
&
Co.,
offering the preferred
common
is
(par 50c),
Inc.
stock
the
a
share; common, $4
is
public, while the
pay
share.
($1 par).
Price—$2
a
\
.
.
common
Price—$10.01
a
New York
Hayden, Stone & Co.
own
account.
date indefinite
share.
No
•
underwriting.
Sept. 27 filed 110,000 shares
writers—Brailsford
&
Co.,
($1 par)
and
common.
Shillinglaw,
Under¬
Bolger
Co., Chicago. Offering—Of the total 100,000 shares
&
will
25 filed
be offered to the public and 10,000 to employees of the
company.
Price—Price to public $6.50
employees $5,525
a
a
share. Price to
share. Proceeds—Shares
are
being
the
Proceeds—Offering is part
company's refinancing
program
which
the issue and sale of $5,000,000 10-year serial
ing interest at 1.75%.
includes
notes, bear¬
Proceeds, together with treasury
funds, will be used to redeem $19,131,000 1st mtge. sink¬
,
$1.12% cumulative con¬
preferred stock, series A (par $20).
Under¬
writers—Van Alstyne, Noel & Co.
Price by amendment.
Proceeds—Net proceeds will be applied for the redemp¬
tion of outstanding series A convertible preferred stock
which are not converted into common stock. Such pro¬
vertible
J
Corp., Baltimore, McL
Halsey, Stuart & Co. Inc.; Dil¬
lon, Read & Co. Inc.; Harriman Ripley & Co.; Blyth &
Co., Inc.; Lee Higginson Corp.; Alex. Brown & Sons and
of
•
June 14 filed 80,000 shares of
Offering
$14,000,000 1st mortgage bonds, due 1981.
Underwriting—To be determined by competitive bidding.
White, Weld & Co. (jointly).
•
,
Solar Manufacturing Corp.
Pav?* ;;'v-
,
Probable bidders include
Industries, Inc., Chicago
Shatterproof Glass Corp., Detroit, Mich.
stock. Underwriters
Price, by amendment.
Safe Harbor Water Power
Oct.
right to bottle and sell 7-Up in
and outstanding and are being sold by William B.
Chase,
President, and members of his family or trusts created
by Chase or his wife.
Price—At market. ' Business—
/Operation of ; laminated glass division and Michigan
Offering—The selling stockhold¬
'/:vL ^:::;1 N.
Under¬
Oct. 28 filed 280,000 shares ($1 par) common.
Under¬
writing—None/- To be sold through brokers on over-;
the-counter market.
Offering—The shares are issued
who include Robert Z. Greene, President, are offer¬
ing the shares to the public through the underwriters,
for their
common
underwriters
broach division.
common
V?':
Class A
common.
are
company has exclusive
28 Texas counties.
unit consist¬
of debt and working capital.
Rowe Corp.,
71,141 shares (45c par)
(45c par) Class B
,
share of each. No underwriting. For payment
July 29 filed 100,000 shares
(par $1)
who
are
also the
selling
Dempsey-Tegeler Co., St. Louis, Mo.;
Dittmar & Co., San Antonio, Tex.; Stifel, Nicolaus &
Co., Inc., St. Louis, Mo.; and Rauscher, Pierce & Co.,
Tne.:, Dallas^ Tex. Price by amendmeht.1 Business—The
(letter of notification) 7,500 shares each of pre¬
stocks.
registration
stock
common
shares
stockholders
Laboratories, Inc. Edmonds, Wash.
one
28 filed
writing—The
-
,
The
7-Up Texas Corp., Houston, Texas
and 35.441
ferred and
of Class A-
For working capital.
Portis Style
•
Oct.
underwriting.
Philadelphia
(letter of notification) 150,000 shares
common
25
Prices—
Proceeds—
bank loans, and other corporate purposes.
Pocmot Hotels Corp.,
Oct. 23
No
ers,
a
Proceeds from sale 6f preferred will be used to purchase
equipment,
Ridd
Underwriter—)
being sold by certain stockholders.
Preferred, $10
*
selling 244,000 shares
share.
postponed.
Offering—Terms by amendment. Proceeds
-
are
a
Underwriters—Van Alstyne, Noel &
Co., and Johnston.
Lemon & Co.
Offering—Certain stockholders are selling 140,000 issued and outstanding shares.
Company is
•
•
Oct
.
Offering—Company
to
share.
a
$5
Offering temporarily
ing of
.
Aug. 27 filed 60,000 shares of preferred stock ($10 par)
•
capital.
at
Inc., New York
and 75,000 shares of common
cents
at
offering 100,000 shares.
Price by amendment. Proceeds
—From company's 100,000 shares proceeds will be used
to reduce outstanding bank loans and commercial
paper
and for other corporate reasons.
—Net proceeds to the
company will be added to working
share. No underwriting. For exploitation of its
(business.
t
mining and development work.
amendment.
share within 18 months and
expiration of the option,
Price—50
underwriters
Aug. 29 filed 240,000 shares of
,
Reynolds Pen Co., Chicago
of two years and six months and provide that the stock
a
?
May 4 filed 400,000 shares of common stock (no par),
of which 100,000 shares are
being sold by company and
300,000 < by
stockholders. •
Underwriters—Names
by
shares to take
ment for past services, the options to run over a period
be purchased at $10
be underwritten.
common.
give to, manage¬
to
184,821
share for each five held. Issue will
one
share and stockholders
Seaboard Finance Co^V Washington, D. G.
covered
Reymert Extension Silver Mines, Superior, Ariz.
Oct. 21 (letter of notification)
350,000 shares (50c par)
present stockholders on the basis of one share for each
share held. Price not disclosed although it is stated that
of
a
the
Company will
Offering
.f
(letter of notification) 14,164 shares of $5 par
Offering—To be offered for subscription to
wishes to have available 6,000
31
Ga.
use its proceeds for
general corporate purposes.
date Indefinite.
Sept.
5 to the extent of
Phillips & Benjamin Co., Waterbury, Conn.
company
July
as underwriters.
Company has decided to
issue 454,465 shares of common stock only, which will be
offered for subscription to stockholders of record
working capital expended in purchase of building from
RFC and to complete construction of a
building.
common.
filed
are
effective date of the registration for sale to
employees,
officers and directors at $5 a share.
The company also
is selling 200,000 stock purchase warrants to
executives
of the company at 50 cents a warrant.
com¬
Grace & Co.
Co. and G. L. Ohrstrom & Co., New York.
Price—$20 a
share. Proceeds—For payment of loans and to
replace
Sept. 23
originally
possible
remaining 20,000 shares
24,000 of the 244,000 shares of common are
being reserved for a period of four days following the
Sterling,
'Sept.127 filed 100,000 shares ($20 par) cumulative con¬
preferred. Underwriter—Van Alstyne, Noel &
$15
pre¬
shares of $1 cumulative convertible preferred
($10 par)
and 277,231 shares (50c par) common stock, with
*
for
before April 30, 1947,
or
stated that
Republic Pictures Corp., New York
vertible
may
to
Underwriters—Hayden, Stone & Co., and
Registration
,
care
convertible
reserved
are
on
Aug. 7 filed 25,000 shares ($10 par) 5% cumul. converti¬
ble preferred stock and 244,000 shares
($1 par) common
stock. Underwriters—Clement A. Evans &
Co., Inc., At¬
lanta. Price of preferred $10/75 per
share; price of com¬
mon, $5,625 per share.
Proceeds—Company is selling
the 25,000 shares of preferred to the
underwriters at
18
v J> i
9,524 shares
being sold by two stockholders. Price to the public $12
per share. Proceeds—Working
capital, purchase equip¬
ment and plant, etc. Registration
may be withdrawn.
pany; intends to, acquire and its large backlog of peace¬
time business.
(letter of notification) 50,000 shares ($10 par)
Price, $10 a share. No underwriting. Manu¬
facture retail wearing apparel.
>
par)
which
.
% Scripto, Inc., Atlantd,
in view of the additional facilities that
necessary
equipment.
common.
<•
($50
of
sale to F. G. and P. F. Searle
at $10.50 per share and the
Kidder, Peabody & Co.
Price—By amendment.
Pro¬
ceeds—Proceeds, together with bank loans, will be used
to increase working capital.
Such funds are deemed
People's Service Corp., Philadelphia
Oct.
shares
Co., Bridgeport, Conn.
100,000 shares
ferred stock.
common (par $1). Under¬
writer—Sabiston Hughes, Ltd., Toronto, Canada. Price—
a share.
Proceeds—Net proceeds will be used to
drilling
filed
.•
Corp., New York
May 29 filed 1J5,000 shares of capital stock (no
par):
Underwriter—George F. Breen, New York. Offering—
Of the total being offered
company is selling 155,000
$10
9
Offering date indefinite.
Sardik Food Products
Republic Aviation Corp., Farmingdale,; N. Yi
,
Sept. 3 filed 600,000 shares of
;
holders.
for
and
60 cents
purchase
Chicago
shares
by stockholders who will receive proceeds.
Business—
injection molding machines.
*
Oil Corp., Ltd.,
York v;
July 24 filed 80,000 shares ($1 par) common stock.
Un¬
derwriters—Dunne & Co., New York.
Offering—Price
by amendment.
Proceeds—Nat E. Heit, President and
director, and Harry Preston, board Chairman, Secretary
and Treasurer, will receive
net proceeds as
selling snck-
Production of plastic
man¬
v
.Jggfc San-Nap-Pak Mfg. Co. Inc., New
—By amendment.
Oct.
■lie] Peninsular
(D. M.)
25,000 shares.
,
Underwriter—Tucker, Anthony & Co., New York. Price
Proceeds—The shares are being
sqld
New York
totalizing
Products Corp.,
company will apply $2,675,000 of the
advances to Alabama Pulp and
Paper Co., of
stock the company owns
as
common
The balance of proceeds will be
used to restore working
capital.
•' '
' : -
Reed-Prentice Corp., Worcester, Mass.
(letter of notification) 75,000 shares of common
(10 par).
Offering price—$2.75 a share.
Underwriting
ufacture
whose
Oct. 11 filed 120,300 shares of common stock
(par $2.50).
Oct. 17
other corporate purposes.
Graphite
filed J.00,000
addition, the
proceeds
Sept. 27 filed 100,000 shares (250 par) common. Underwriter—Van Alstyne, Noel & Co., New York. PriceBy amendment. Proceeds—Estimated net proceeds of
$476,362 will be used to pay off a loan from the Marine
Midland Trust Co., New 'York.
received under the exchange offer) are to be
purchased
from selling stockholders. Proceeds — Proceeds to the
For
15
Read
and
Howell/'Porter & McGiffin, Inc., New York.
In
convertible
($1 par) common. Under¬
writer—White, Noble & Co. and Smith, Hague & Co.,
Detroit. Price—$3.50 a share.
Proceeds—Net proceeds
go. to selling stockholders. Business—Graphite bronze
bushings and other products.
^
common, and 12 shares of its common for
each shares of Astra common. It is
proposed that under¬
Pari-Mutuel Totalizer Corp.,
Arbor, Mich.
cumulative
plant, and the balance will be deposited with gen¬
Offering temporarily postponed.
'
Oct.
a maximum of 60,000 shares
250,000 shares of common, of which
12,853 shares of preferred and 50,000 shares of common
are to be purchased
by the underwriters from the com¬
pany and the balance (which are part of the shares to be
.
Ann
5%
eral funds.
Pantasote
preferred
of
economy
of the companies. Pantasote Plastics will offer
three shares of its
common, plus % of a share of pre¬
ferred, for each share of Textileather common. It will
offer two shares of its common for one share of
writers will offer
Co.
75,000 shares
preferred stock ($10 par).
terests
of
Parts
filed
reimburse treasury for sums spent in
acquisition of the
electrical division plant of the company, $30,000 for con¬
struction of space for executive offices in the
stockholders of Textileather Corp.,
Toledo, O.; The
Pantasote Co., Passaic, N.
J.; and Astra Realty Co., New
,
5
company's 5% cumulative
prior preferred stocks and an unspecified amount will be
advanced to Taggart Corp., a
subsidiary, for redemption
of its $2.50 cumulative
preferred. Both securities ar£
redeemable at $52.50 a share
plus accrued dividends.
Underwriter—Van Alstyne,
Noel & Co. and associates.
Price by amendment.
Pro¬
ceeds—Of the net proceeds, $250,000 will be used to
pay
3% notes held by National Bank of Detroit, $75,000 to
Sept. 27 filed 60,000 shares ($25 par) 4%% cumulative
preferred and 1,352,677 shares ($1 par) common. Under¬
purpose
ceeds will be used to redeem
as
Precision
*7;
Pantasote Plastics Inc.,
York, for the
—
Scherck, Richter & Co.; Weeden & Co.; Allen & Co., and
Rauscher, Pierce & Co. Offering price, preferred $26.50
per share; common, $7.50 per share.
/
V-.
St. Regis Paper
Co., New York
Sept. 27 filed 150,000 shares ($100 par) first preferred.
Underwriter—To be supplied by amendment. Probable
underwriter, White, Weld & Co. Offering—Terms of
offering and price by amendment. Proceeds—Net pro¬
undertermined number of cpmmon shares for conversion
preferred. Underwriters,
First
California
Co.;
of
,
For general corporate
purposes.
Co.
(as amended) 60,000 shares of 5% cumu¬
lative convertible preferred stock
(par $25) and 300,000
common stock, of which
80,000 shares will be
sold to Pacific Associates Inc. at
$6 per share, also an
mated net proceeds of $1,473,000 for
purchase of a new
factory near Punta Gorda, Florida, at a cost of about
:$951,928. It will set aside $150,000 for research and de¬
v
Transit
.
Seagren Products, Inc.; Brooklyn, N. Y.
1 1
Oct, 23 (letter of
notification) 20,000 shares of $1 par
Class A stock.
Price—$10 a share.
No underwriting.
shares of
share. Proceeds—The company will use esti¬
a
(Ore.)
.
•
June 14 filed
Corp., Washington, D. C.
Underwriting—Tellier
50 cents
Portland
post¬
'
I
ceeds
also
will
be
used
for
additional
manufacturing
facilities in the amount of $600,000; for additional invent
tory amounting to $400,000, and for additional working
capital. Offering temporarily postponed.
Soss
Manufacturing Co., Detroit, Mich.
Sept 3 filed 40,000 shares ($25 par) 5% cumulative
vertible
con¬
preferred. Underwriter—Ames, Emerich & Co.,
Inc., Chicago. Offering—To be offered to
holders for
subscription at $25
(Continued
on
a
common stock¬
share in
page
2262^
the ratio of
FINANCIAL CHRONICLE
THE COMMERCIAL &
2262
(Continued from page 2261)
•
•
;
■
the
preferred share for each five shares of common held
unsubscribed shares will be sold to underwriters at same
shares of the issued and outstanding
by them. They are also selling to Hallgarten & Co.,; for $1,500, plus $360 as a contribution
toward the expenses of issuance, options to purchase an
additional 18,000 shares of the issued and outstanding
facilities
—
for
and
additional
'
postponed.
'
capital.
working
owned
common
Offering
v
i
18,000
purchase
Public offering price of. unsubscribed
shares by amendment. Proceeds—For expansion of plant
Price
price.
Oct.
16
filed
cumulative
(Mo.)
preferred.
Co., Portland Me. and The Moody Investment Co.,
Springfield. Offering—Stock will be offered for ex¬
change to holders of series C 6% preferred and series D
5% preferred on the following basis: For each share
of series C stock one share of new preferred plus 50c
in cash and for each share of series D stock one share
of
new
a view to entering the Frequency Modulation and Television fields at an advantageous time. Of¬
capital, with
shares ($100 par) series E 4%%
Underwriters—H. M. Payson &
8,827
preferred plus $1 in cash and a $1.25
;
(letter
of notification)
2,000
behalf of the estate
on
common
$35
t
York. Proceeds go to the
Toledo
•
shares
($5
•
March 27
selling stockholder.
capital stock (par $1),
Offering—Price to public by
Proceeds—Net proceeds will be added to
Westinghouse Electric Corp.
Aug.
14 ;• filed, 1,647,037 shares? ($12.50 par): commoru
Underwriter—Kuhn, Loeb & Co. Offering—Stock will.be
offered for subscription to holders of outstanding
jire?
(bonds only); Blyth & Co., Inc.; and
Underwriters—Otis & Co.
Stuart & Co. Inc.
amendment.
Smith, Barney & Co. Price to be determined by. competi¬
tive bidding. Proceeds—Net proceeds together/with $4,-
general
the general funds and will be available for
corporate purposes. Offering date indefinite.
Pictures Corp.,
Stereo
500,000 bank load and if necessary, the $5,000,000 to be
contributed by its parent, Cities Service Ccf., will be used
to redeem outstanding debt and preferred stock, involv¬
New York
14..(leter of notification) 2.985 units of stock, each
consisting of one share of $6 cumulative (no par)
Oct.
unit
ing
payment of $51,906,590, exclusive
a
dividends. Business—Public
shares will be sold to underwriters.
"
ment;
.
Wheeler, Osgood Co.,
Oct. 7 filed 80,000 shares
vertible
offering
is
Company
51,000 shares and selling
stock¬
disposing of 140,000 issued and outstanding
shares.
Price by amendment. Proceeds—Proceeds from
the sale of 51,000 shares by the company will be used to
reimburse treasury for funds spent on June 26 to retire
holders
are
Offering tem¬
5,000 shares of preferred stock, $100 par.
porarily postponed. ~
$30 a share. Proceeds— The
company stated that $500,000 of the $1,495,000 proceeds,
will constitute the capital of the company, and after
deducting $5,000 estimated expenses, it will classify
$995,000 as surplus.
writing
—
None. Price
—
.
UnitedStates Shoe
V
Stix, Baer & Fuller Co.,
St. Louis
stock (par $5),;
filed 102,759 shares
common
Underwriter—Goldman, Sachs & Co.
Aug.
•
.
28
,
($10 par), common. Under*
50,000 shares
Oct; 7: filed
Co./ pmaha, Neb.
'
"
'*
'
Inc.
July 17 filed 197,500 shares of common stock.
writers—Glore, Forgan & Co.
Offering—The
represents a part of the holdings
holders. Indefinitely postponed.
1
•
Swain
(R. L.)
Tobacco Co., Inc., Danville,
(letter of notification) $100,000 of
interest at 5%.
Price—$950 and $475,
through brokers or dealers.
plant improvements and
Swern
Va.
notes bearing
To be sold
For payment of notes, for,
working capital.
& Co., Trenton, N.
i.'
f
registrant
Velvet: Freeze,
has
an
Conn.
Straus & Blosser. Offering—
be sold through the
underwriting group at $8.50 a share, and; .3,500, shares
will be offered to certain employees at/ $7.50 a share.
Sherck, Richter & Co., and
Of the
total, 200,000 shares will
Oct.
8
Offering—Price $6 a share for
preferred and 75 cents a share for common.. Underwriter
—Amos Treat & Co.
Proceeds—For payment of notes,
mortgages and for general corporate purposes.
Offering
temporarily postponed.
Apartments, Inc./ Red Bank, N.
stock]
J.
J., will act as selling
agent.
Purpose—To acquire all of the equity in War¬
wick Gardens, Inc., which owns certain improved real
JRay H. Stillman, Eatontown, N.
estate at Red
Bank, N. J.
Weatherhead
from
$3,000,000 of serial debentures, due
Inc., Chicago.
net
Price by amendment.
note
funds.
Proceeds—Of the
$900,000 for pay¬
in that amount to The National City
Bank of Cleveland.
eral
serially
Underwriter—Halsey, Stuart & Co.
proceeds, the company will
ment of its
use
The balance will -be added to gen¬
Business—Manufacture
fittings,
are
registered. Eleven
selling 135,000 issued and outstanding
,'
.
?
\
-
($20 par) and 50,000 shares common.
(par $1).
Underwriters—First Colony Corp. and
Childs, Jeffries & Tborndike, Inc.
Offering—Company
is
of
offering 75,000 shares of preferred; the* 50,000 shared
common are outstanding and being sold by four in-*
dividuals for their own account.
Price by amendment.Proceeds—Proceeds from the sale of the preferred stock
sidiary, retire loans from banks and from /White's ]5m-
ployees Profit Sharing Trust, and for additional "working
capital. Offering date indefinite;
Winters & Crampton Corp.,
Aug. 28 filed 119^337 shares of
Underwriter—E.^H.
Rollins
Grandville, Mich* ^
stock (par $l)*
common
&
Sons, rinc.
Offering— 1
>
Company is initially offering the stock to its common
holders at the rate of
share for each two shares held.
one
Price by amendment.
Proceeds—To retire a conditional
sales contract obligation held
by the Reconstruction
Finance Corp., pay off bank loans oL $600,000, and, lor
Working capital. Offering date indefinite. -
Wisconsin Power & Light Coi, Madison; Wis.
'
May 21 filed 550,000 shares ($10 par) coihmon stock to
be
sold
at
competitive
bidding.'
Underwriters—By
amendment.
of
stock (par $1).
waukee.
which
will
distributed
be
Yolande Corp.; New
York
upon
Co.
|
the
r
'
-
par)
($1
them
to
Utilities
17 filed 50,000 shares
Sept.
common
stock;
Underwriters—Headed by E. F. Gillespie & Co./and in¬
cludes
Childs, Jeffries & Tborndike, Inc.; New York;.
Courts & Co., Atlanta; Irving
Rice & Cd.,*St. Paul,'and.
a
Proceeds-^Estimated net proceeds
share.
of $400,000, together with $87,125 from the sale of 10,25$additional
common
President, at $8.50
purchase
shares to J. William Anchell, Vice-'
a
share, will be used partly for the
of 10,995' shares; of
capital stock of Island'
Needlework, Inc., of Puerto Rico, out of a total of 11,00Q}
high
and
low
of
Herbert
Racine, Wis.
shares of com¬
Underwriting'—Loewi & Co., Mil¬
Offering—The shares are being sold both by
a
$220,522 from Mrs. Gertrude S. Korsh, sister
L.
Miskend,
and
President
Treasurer of
Yolande Corp.., Of the remaining proceeds, $68,750, plua
dividends, will be used to redeem at $110
share the,
a
company's 625 shares of $100 par 6% cumulative pre¬
ferred
the
stock.
The
balance
will
used
be
to
reimburse
company's treasury for previous expenditure and for
additional working
capital.
Zatso Food Corp.,
/
Philadelphia
;
(11/1)
.
r
cumulative
preferred stock (par $100) with common stock as bonus.
Oct.
Sept. 3 filed an unspecified number of
mon
stockholders of North West Utilities Co., parent
dissolution of North West
valves, 'carburetor parts, drain and
Webster Electric Co.,
stock (par 50
Underwriters—Hirsch & Co. ' Offering—Com¬
stockholders
-
outstanding shares.> The shares will be purchased for
New York
is offering, 75,000 of the shares
*
stock
.
pany
* 11
preferred stock
total price of
Co., Cleveland, Ohio
1952 to 1966.
pressure
Aug. 1 filed 210,000 shares of common
«■.
n
-
Price—$10
39,948 shares of capital
Offering price, $3.45 it share;
Underwriter—
shut-off cocks, etc.
cents).
'
Maxwell, Marshall & Co., Los Angeles and New York]
(letter of notification)
Oct. 29 filed
July, 12 (letter of notification) 44,300 shares of ($5 par)
cumulative convertible preferred stock and 44,300 shares
Tele-Tone Radio Corp.,
1''
Aug. 29 filed 75,000 shares $1 cumulative convertible
common
Offering date indefinite.
stock (par 50c).
'
!
of Wisconsin, who elect to sell such shares of Wisconsin
Jnc*
July 24 filed 203,500 shares of stock which are to be sold
for the account of certain stockholders.
Underwriters-^-
•
common
the
Warwick
eight selling stock¬
holders are disposing of the remaining 150,000 shares.
Price—$10.50 a share.
Proceeds—From 45,000 shares
sold by company will be applied to working capital
Taylor-Graves, Inc., Saybrook,
'
erence
customers of the Herbert A.
whom
J.
is selling 45,000 shares, and
initially.
>
White's Auto Stores, Inc.
Templeton Lumber Co. with
exclusive sales contract
whereby all the lumber produced by the registrant will
be sold to Templeton.
Price—$100 a share for each class
sale to customers and former
Offering postponed indefinitely.
Aug. 28 filed 195,000 shares common stock (par $1).
Underwriter—C. K. Pistell & Co., Inc.
Offering—Com¬
pany
100,000 shares ($1 par*
by amendment. Price
Proceedsb—Will? be used: to redeem
Names
Probable bidders include Merrill Lynch*
Pierce, Fenner & Beane; White, Weld & Co.; Glore^
Forgan & Co., and Harriman Ripley & Co. (jointly); /
The Wisconsin Co., and Dillon, Read & Co.
Proceeds—
Part of the shares are to be sold by Middle West Corp.,
top holding company of the System, and part by pref¬
Stocks will be offered for
Under-::
offering
of the present stock¬
•
*
Oct. 21
and
—
of stock.
interest, for discharge of its
10-year 6% debentures.
Any balance will be added to
working capital.
Business—Manufacture of corrugated
500, together with accrued
Street & Smith Publications,
stock
Underwriter
will be used to provide funds lor a wholly-owned sub-*
Corp.; Cincinnati, Ohio
Aug. 25 filed 24,000 shares ($4 par) common; Under¬
writer—Benj. D. Bartlett & Co., Cincinnati. OfferingShares will be offered to the public by seven stock¬
Offering—Eight
selling stockholders are disposing of 62,000 shares, and
holders, who will receive the entire net proceeds;
the company will offer 40,759 shares initially to its pre¬
Price by amendment. Offering postponedrindefinitely.
ferred and common stockholders.; Price by amendment /:.
Upper Michigan Power & Light Co., Escanaba,
Proceeds—Net proceeds from the sale of the company's
Mich*
shares will be added to its "building construction and
July 18 (letter of notification) 5,500 shares of 4%% first
improvement fund." Offering date indefinite.
preferred stock series B ($50 par). Offering price, $50
•
Stone Container Corp., Chicago
a share.
Underwriter—First of Michigan Corp., Detroit.
Oct. 24 filed 300,000 shares of ($1 par) common.
Under¬ / Proceeds—For enlargements and improvements of power//
plant facilities; Offering date indeterminable at presents
writer— Hornblower & Weeks, Chicago. Offering —Of
the total, company is selling 200,000 shares and stockValsetz Lumber Co., Portland, Ore.
holders are selling the remaining 100,000 shares. Price:
Oct. 4 filed 14,000 shares ($100 par 2% cumulative Class
by amendment. Proceeds—Of net proceeds, company will
A preferred and 2,000 shares ($100 par) 2% cumulative
use $1,225,000, plus a premium of $12,250, together with
Class B preferred. Underwriters — None. Offering —
accrued interest, for payment of a bank loan, and $493,-
containers.
Tacoma, Wash.
($5 par) 50c cumulative con-*
by amendment.
$625,000 4% bonds and $638,600 first and second deben¬
tures; balance for working capital.
♦
.
development of pre reserves.
United Benefit Fire Insurance
preferred
common.
,
>
Price—By /amend¬
Proceeds—To reduce bank loans. Offering tem4
porarily postponed.
of interest and
utility.
preferred stock and one *
•
share of common stock (par 50c). Underwriter—Ayres;
Triumph Gold Mines lnc;, Oatman, Ariz.
Barley & Associates, Inc., (165 Broadway, Suite 1717) < Oct; 21 (letter of notification) 1,000,000 shares of stock;
New York. Price — $100 per unit. Proceeds—lor working | Underwriters—Triumph Gold Mines Inc.; James R. Mc«?
capital, machinery, equipment, etc.
Carthy, President; Gilbert Phillips, Secretary-Treasurer;
C. C. Bollinger, Director.
Price—10c per share. For
Stern & Stern Textiles, Inc., New York
'A
Aug. 29 filed 191,000 shares of common stock ($1 par).
Underwriter—Carl M. Loeb, Rhoades & Co. - Offering—
'
ferred stock and common stock in ratio of
share fof
each share of common or preferred held. Unsubscribed!
non-convertible,
non-voting,
Aug. 6 filed 46,400 shares (no par) common.
Under¬
writer—Shea &
Co., Boston/ Price, by amendment. '
Proceeds-~Shea & Co. is selling 26,400 shares for its own
account and the remaining 20,000 shares are being solcf
by Allen & Co., New York, with Shea as underwriter*
$32,000,000 first mortgage bonds, due 1976,
160,000 shares of ($100 par) cumulative preferred.
Underwriters—To be determined by competitive bidding.
Probable bidders include The First Boston. Corp.; Halsey,
filed 500.000 shares of
West Virginia Water Service Co.
.
I
Edison Co.
(O.)
Oct. 25 filed
Ontario
be?/
par)
and
Steep Rock Iron Mines Ltd.,
will
balance
The
—
of Frank A. .Smythe,
share. Underwriter—Smith, Barney & Co., New
a
dividends.
West
Chauncey B. Smythe, Alan W. Smythe and
The National City Bank of Cleveland, executors/ Price,.
dividend
accrued
Coast Airlines/ IncJ/: Seattle, Wash. /
Sept. 2 filed 245,000 shares ($1 par) common. Underwriter
Auchincloss, Parker & Redpath, Washington;
D. C. Price—$7 a share. Proceeds—Will be used for pay¬
ment of various expenses, repayment of bank loans,
purchase of equipment and for working capital.'
/
.
deceased;
\
.
18
and
be
added to general corporate funds.
Thew Shovel Co., Lorain, Ohio
Oct.
„
stock at $105
plus dividends and series D
stock at $103
share
fering date postponed.
payable Jan. 1, 1947. Shares not issued in exchange will
be sold to underwriters for public offering at $104 a
share. Proceeds—Will be used to retire the series C
plus dividends.
,
pany's 75,000 shares will be used for increasing working
City Water Co.
will
Proceeds—Net proceeds for the sale of com¬
common.
Springfield
31^1946
[ThursdaysOctober
company
amounts
.
one
f
and by shareholders.
The;/respective//
supplied by amendment./ Price by
amendment.
Proceeds—Company will use about $210,?
000 of its net proceeds to redeem 645 shares of its prior
preference stock at $110 a share and accrued dividends,
and 1,386 shares of second preference stock at $100 a -4
shares, for their own account.
Offering—Price $6.75 a
share.
Options—Selling stockholders are also selling to 4
the underwriters at 7 cents per option warrant options to
•
/
<
18
(letter of notification)r$100,000 5%
Price, $100 per unit. For purchase of raw
for
general conduct
of business.
Sehroeder, 1614 Cambridge St.,
materials and
Underwriter—Ludolf
Philadelphia!
*.
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:, »"■,_. '..;• .r 4,'
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4538
Volume 164
226$
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YET
(NOT
IN REGISTRATION)
INDICATES ADDITIONS SINCE PREVIOUS ISSUE
•
(1)
changing
name
to finance
to'Botany Mills; ( 2) on swtipli-
an estimated $1,896,717.
Probable bidder?
Halsey, Stuart & Co. Inc.; Salomon Bros. &
Hutzler; Harris, Hall & Co. (Inc.), and commercial banks.
226,887 shares class A stock (par $5) for pew common
pn share for share basis, (c) ana 50,000 class B. shares
Chicago & North Western Ry,
favorable, 200*000 of the common shares.
Products Corp..
'
18 common stockholders will vote on creating a
jiew issue of 50,000 shares of 4 V4%; cumulative prior
preference stock (par $100).
•
Chesapeake & Ohio Ry.
$1,500,000 equipment trust certificates.:
29 it
Ry.
(11/8)
agreements company will pay 30% of the purchase price
and the balance is payable in 60
equal monthly instal¬
the
financing, which
imminent in view of the indicated continued
appears
The certificates,
stated that the 4-for^l; split-up of
was
Great Northern
office, St. Paul, Minn., for lowest interest rate at which
bidders will provide $2,800,000 to finance about 70%
of cost of new-equipment.
Under the conditional sale
stock is to accommodate future
common
the purchase of
,
•
Bids will be received up to (noon) Nov. 8 at company's
Deerfteld Packing Corp.
*
Oct,
(117)
Nov. 7 company will receive bids for
on authorizing the issu¬
of $1,000,000 preferred stock, of which company
intends to offer $500,000 in immediate future.
Common
stockholders will be given preference in subscribing to
the new stock.
ance
for
ler; Harris, Hall & Co. (Inc.); Halsey, Stuart & Co. Inc.,
and Middle West banks.
> ^
'
Nov.
Duro Test Carp.
Nov. 27 stockholders, \vill vote
\
(11/7)'
the purchase of $10,140,000 equipment trust
certificates, to be dated Dec. 1, 1946, and due serially in
equal annual instalments, will be received at company's
office 400 West Madison St., Chicago, up to 12 noon CST
Nov. 7. Dividend rates to be specified in bids. Prob¬
able bidders, include Otis & Co.; Salomon Bros. & Hutz¬
Bids
new common on basis of four new for each
B share.
Company plans to offer, when market
Certain-teed
•
•
"
(p£^ $1) for
are
a
include
($10 par) $1.25 cumulative preferred on share-for-share
basis for new 5% cumulative preferred (par $25); (b)
conditions
1, 1947 to Dec. 1, 1956, are designed
part of the purchase price of new equip¬
costing
ment
fying Capital structure by exchanging (a) 134,733 shares
class
in consumer demand for quick-frozen vege¬
tables, fruits and precooked foods, all of which are
processed by the company. Probable underwriters, E. H.
Rollins & Sons* Inc., and A. C. Allyn & Co., Inc.
ments from Dec.
6 stockholders of Botany Worsted Mills will vote
on
increase
dated Dec. 1,1946, and maturing in equal annual instal¬
Botany Mills
i)eq.-
ments
beginning Dec. 16, 1949.
;
-
•Haloid Co..
Nov. 27 stockholders will vote
United States Government,
on creating an issue of
10,000 shares of 4% preferred stock, proceeds to be used
plant and to retire bank loans.
to modernize
First California Company
State, Municipal and
•
INCORPORATED
Corporate Securities
Underwriters and Distributors
v.
''
-
new
Our Sixteen
Co.
Blair
Serve
V'■<
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:
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,
BUFFALO
BOSTON
CHICAQO
\ PITTSBURGH
FHlLADELPHiA
•>
M
s
"""STeLOUlC"^
-
"
with:
that
Our
an
the
Reporter's
Report
If,
:
with
The
fthe investment banking business
to have fizzled.
rate next Tuesday is
I Election Day and thus far the.
appears
'
now
;
;
*
,
gotiated deal, is
come
Service Co.,
to provide
slated
now
the market
on
going
out
and
whole distance
the
reports
are
current that j
they may seize upon the munic- j
ipai underwriting fraternity as
offering opportunitly for some
sort of action.
'
SITUATIONS WANTED
brought
and much
Their sale on Monday
three
bids
hanking
comment, ; with
the
successful
syndicate paying the company
a price of 100.05 for the
issue.
The two other bidders offered
to
pay
99.891
and 99.5799 re¬
syndicate proceed¬
ed with reoffering,
pricing the
bonds at 100V2 to the public for
an indicated spread
of less than
The winning
over-the-counter
Experienced
desires-
lished
Underwriters
are
beginning
to watch the. spread a
closely
and
it
was
i
V.
>;:
October SSt 1946
V
v
IICORPOHATCe
Fifth Avenue
] 1 i
The Board of Directors
Y.
? r'; of Eaton Manufacturing
Company ba$ declared a dividend of
Seventy-five Cents (75c) per share on
165th Common Dividend
A
regular;- diiddend' of
(75^)
Seventy-five Cent$
share has. been, declared
per
Stock
American
and
Common
Tobacco
upon
Stock
Company,
the
the
stock of the
common
of business November 6, 1946.
pay¬
with
connection
well
change.
H. C. STUESSY
of. record^ at the close of business
,
15 years', experience
in Listed and
Unlisted Securities. Registered Rep¬
resentative presently employed, seeks
trader
estab¬
Married, 33 year#, old.
Box L 1017, Commercial & Financial
Chronicle; 25 Park Place, New York
,
October 25,
1946
:•
,;
Edmund A, Har,ve\v$ treasurer
Box K 1031, Commercial A;
-Chronicle, 25 Park Place,
'
'
1
-
LEE RUBBER & TIRE J
Financial.
.
New ,York (8; N, Yi
s, N.-'Y..
Secretary GrTreasurer
Qctobcr 29; 1946
THE ATLANTIC REFINING C0«
>
COMMON
.
REPUBLIC RUBBER
NUMBER
165
CORPORATION
INDUSTRIAL RUBBER PRODUCTS
;
Younsstown, Ohio
High-Class Confidential Executive Secretary
At
a
meeting of the Board of Directors
held October 28/1946, a
—
v'.-.
.
,
'
;
-
AVAILABLE
V
By
"
-•
.
-"V
,
of making
and is
an
^ -.*r V•
i."'
^
t"-X•'V;
and lighten the business burdens of
over
dividend of
thirty-seven and one-half cents (37%c)
per share was declared on the Common
Stock of the Company, payable Decem¬
ber 16, 1946; to stockholders of record
at the close of business November 21,
—
.
'
Ready and able to take
large affairs.
matters
:
.."i (,;(;.;v'" tlf ;'-\\\
man' of
Capable
'.*■=■(
-.i
any
,
„
satisfactory 4ecisi°ns on* important
correspondent..
prompt, and
excellent
TIRES, TUBES & SUNDRIES
long years of experience in the Securities business,'
is fully capable of successfully making satisfactory adjustments of
Stocks, Bonds and Real Estate investments.
:
October 28,1946
.
day declared
an
of $1.00 per
share
extra
dividend
the out¬
standing capital stock of the cor¬
on
poration, payable December 16,
Secretary
,
...
Th^ Board of Directors has this
RICHARD ROLLINS
:
;
Conshohocken, Pa.
1946. Checks will be mailed.
of
reason
LEE TIRE B RUBBER CO. of N.Y., Inc.
Has been Executive head of important financial enterprises.
1946, to stockholders of record
Alert mind,
at
Has
had
abstainer, and trust-worthy in
valuable
advanced
is
thereto.
-
-
in
experience
:as
an
modern business
every
respect.
administrator
methods
and
and
THE BUCKEYE PIPE LINE
pertaining
";
■■
COMPANY
Agreeable
personality, with training and ability to handle difficult
problems, and placate diversified minds and individual desires.
-
^
■'
*'•
any
a
clean
and
.circumstances.
orderly
life
and
can
be
depended
under
upon
'
.
personal interview, please write Box S 1016 Com¬
mercial & Financial Chronicle; 25 Park, Place New York. 8..
Y
.
.
.
.
N. Y;, October 29,
day
5. i;)
j.
i .'.--Vi-J.Ui 11
..
•
THE
The
v.i ih.;i
f;
*•
• y •..it
UNITED
STATES
LEATHER
CO.
of Directors at a meeting held
1946, declared a dividend of 50 cents
per share on the Class A stock, payable De¬
cember
16,
1946,
to
stockholders
of
record
Board
October 30,
November 15,
1946.
C. OA**WRON,
New
i?_i-1
A, S. POUCHOT
Treasurer
1946.
Directors of this Company has
declared a dividend of Twenty (20)
Cents
per
share on «the outstanding capital
stock, payable December 14,
1946 to share¬
holders
of
record, at the. close of business
November 15, 1946.
C. O. BELL, Secretary.
The Beard of
this
a
October 24,1946
,80 Broad 'Street
New York,
^
Leads
the close of business December
2,1946. Books will not be closed.
coordinator
details
evidently
outstanding
Company, payable November25,1946,
to shareholders of record at the close
of
3
November 9, 1946. Checks will be mailed.
bit more
l C
>
PXYIPENP NO. 87
New York 3, N,
*
The
TRADER
firm.
If interested in
Vz point.
;v
holders
and
spectively.
Edwin O. Wack
;
!
Secretary
>
,
?> Cleveland, Ohio
t-.-i-
SITUATIONS WANTED
Trader $vai!able '
'the $25,000,000
=
Checks will
<
v
A
,
DIVIDEND
?
be maded.
able in cash, on December 2, 1946,. to stock¬
Pacific'Gas. $ Electric
The only large corporate issue
to reach market this week was
in 25 years.
banking
running for
EATON MANUFACTURING COMPANY
j
of 2%% first and
refunding mortgage bonds of the
Pacific "Gas & Electric Co., due
business October 31,1946.
formidable
DIVIDEND NOTICES
Common
handle the business pf un.derwriting corporate securities. - •
But there are indications that
.
<
this business.
funds for
necessary
( who
,4he Federal people are not giv- ?
five
groups will be in the
to
Nov. 13,
on
over
;ing up"their undertaking with- ;
per
Present indications are that at
least
change in present plans.
Crucible Steel Co.'s projected
sale of $25,000,000 of new first
mortgage, 20-year bonds, a ne-
made, investment bankers do not
appear to be greatly concerned
the' matter., That is,, those
regular quarterly dividend pf One Dol¬
a half cents
($1.12)4)
share on
Cumulative Preferred
Stock, 4%% Series,"and a dividend of
Twenty 5 ve cents (25c) per share on Com¬
mon Stoolc, both
payable December 1,
1946, tp holders of record at the close of
lar and twelve and
was
market
-
D
The Board of Directors has declared the
a
Central "Illinois Public
on 150,000 shares of
by
of
"
BUTLER BROTHERS
t
stock
common
a
unless something happens to cause
Central Illinois"Pub. Service
day
Power Co.
boil and should
reach; market within a fortnight
coming to
are
Co.]
i_ Bids were, due tobe opened to¬
i
day bankers are
enough Con¬
for
postponed
because
conditions.,",1
Impending New Issues
other' large undertakings
^dded to general funds.
not yet .turned up anything that
*
looks like Pay dirf.. ^
From ' response
to
inquiries
bid
tap several months back but
Two
cumulative converti¬
ble preferred series A at 105 a
share with any balance to be
Federal Grand Jury which^ is
reported to have been delving
into the matter evidently has
DIVIDEND NOTICES
to provide the firm with $20,000,000 of new capital for construc¬
tion purposes.
This deal was on
parent company, ( Middle
is excluded from the
exchange
offer.
The
company
proposes to redeem- any of the
outstanding preferred which is
not exchanged.
hanking group for
public offering.
h proceeds will be used to retire
Goodwin, Inc.
same
to
sumers
The
a
the
slated
;
exchange.
unsubscribed
to any
as
(portion by
new issue of 16,000
shares 5% cumulative preferred stock (par $50) and
increased authorized common from 500,000 to 1,000,000
shares. -Probable underwriter of preferred, Bond &
redemption of $12^17,900
3i4s, due 19.55 and for con¬
On
been pre-
have
West Corp.,
outstanding, will be under¬
written
pre¬
enter bids for this
business
which
involves the
public offering of any of the
new stock which is not taken in
new
one
to
| Monmouth Perk Jockey Club
struction purposes.
to
paring
the! preferred
to
known
are
$14,800,000
Al any
>
of
rate
outstanding
of
At least three hanking groups
stock, subordinate in
new
respects
all
tion season, the search of the anti¬
trust division of the Department
(of Justice into the operations of
the
at
of
ferred stock for exchange.
'
current elec¬
the
set
share for each nine shares held. ;
political
dove-tail
groups
holders
to
Subject to approval' of a new
issue of 650,000 shares of pre¬
ferred stock by shareholders to¬
morrow, Atlantic Refining Co., is
planning to offer $26,000,000 of
the new issue to common stock¬
many/suspect* its aims
and designed to
as
other
two
the
par
cumulative preferred
stock which is to be offered first
$100
to getting % $>.;■ hitT
working margin,
Atlahticilefining
holders
were
or
their respective figures,
1
J
eye -
-
profit;
more
The purpose of the financing will be to raise
working capital.; Company manufactures carpets,
Oct. 30 stockholders voted creation of
■,
Head Office: San Francisco
CLEVELAND
"
*
„
'
California and Nevada
NEW YORK
-
Offices
(James.) & Sons Co.
month.
:
*(
Lees
Oct. 24 reported company will offer $3,000,000 of
pre¬
ferred stock and $3,000,000 pf common some time nekt
i
York, October 30, 1946.
t
.i
i
Treasurer,
J
THE
Thursday, October 31, 1946
CHRONICLE
COMMERCIAL & FINANCIAL
French
Henry Wallace to
Business
Announcement
||MaFt's|
The
Md.—Cloth.
Grimes, Baltimore,
Our
Credit
William H.
—
Kampf—Our Campaign to
Peace—A Socio-Economic
Levitan—
D.
Approach—Joseph
The
William-Frederick Press, New
Y.—Condensed Version,
York, N.
special
edition—paper—$1.00.
on
A. Wallace,
Commerce,
for
be imposed
can never
long
-
aramament
dangerous
Peace
race.
unilateral
by
Peace will
accepted
the 'N6w Repub¬
"As editor of
Win the
of
this
ping
made
forces.
if all nations are
come
the i editorship of
the
"New
Republic," and had willing to practice mutual under¬
stated that he regarded it as an standing and good will."
opportunity to reach liberals in
the United States and the world
"on behalf of peace and
rising
standards of living."
v,
;
had
Commercial
of
Story
Company,
Henry
Secretary
former
Bookshelf
that
12
Oct.
was
of ' the
whole world to the need of stop¬
Republic"
Edit "New
the
in fact
and
people,
liberally-minded ' people
lic,' " Mr. Wallace said, according
to
advices
to
the New York
"Times" on Oct. 13, "I shall do
I
everything
can '
people,
American
the
British
to "arouse
the
the Russian people, •
people,
Old
Reorganization
Rails
Pfds. A,,
: .;Commons &
v,;
.rnmmmmmmm
*
v
the
"-V
..."
NEW ISSUES
FOREIGN SECURITIES
Trading Markets in
,l.
,
/A.V'Vr
•.
^*
'
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•
•
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l1,
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7
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A' '. i.& ;
Laboratories
Jefferson-Travis Corp.
Allen B. DuMont
ESTABLISHED
1919
4P Exchange PJ., N. Y. 5
HA.
A' Teletype' N. Y. 1-1897
Lear, Inc.
Majestic Radio & Television Corp
Radio & Television, Inc.
Wilcox-Gay Corporation
Gearhart & Company
INCORPORATED
.
Members New York Security
45 NASSAU STREET,
Dealers Association
148 State St.,
Tel. CAP. 0485
NEW YORK 5
Boston 9, Mass.
z.
S
Teletype BS 259
N. Y» Telephone HAnover 2-7914
'
bell teletype
Enterprise 601s Av- new york 1-576
philadelphia telephone
telephone
REctor 2-3600
Quincy Market Cold Storage
'
& Warehouse Co.
Monolith Port. Midwest pfd.
Thompson's Spa Inc.
Airplane
& Marine
Schoellkopf, Ilutton & Pomeroy
Worcester Trans. Assoc.
,/
Boston Ground Rent Trust
Ralph F. Carr & Co., Inc,
31
<'
Milk Street, Boston 0, Mast.
Boston
New York
Teletype
Hanover 2-7913
BS 328
^
Hubbard 6442
I
W* tpecialize in all
*>\
Insurance and Bank Stock*
•
|
Industrial Issues
Investment Trust Issues
Public
HAnover
Securities with
\
'V
Specializing in Yin lis teel
'
FOREIGN SECURITIES
SPECIALISTS
"
i;
-
Tel. HANcock 8715
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;
New York 4, N. Y.
*
•
$A-
Public
'
.
Sunshine
Consolidated
Mastic Asphalt
The
.
.
S »
Company 'is
Utility—Industrial—Real Estate
'
•
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a
■
'
•
Bell Teletype
7-0744
NY 1-866
5
Engineering Co.
Amos Treat & Co
40 Wall St.
BO 9-4613
Empire Steel Corp.
^Prospectus
Signal Corp.
REMER,
MITCHELL 8c REITZEL,
LA SALLE ST.,
WESTERN UNION
Telephone COrtlandt
and Common Stocks
consolidation of
208 SOUTH
New York
Seaboard Fruit Co., Inc,
'Susquehanna Mills
Bonds, Preferred
>
Eastern
120 Broadway
Tele. BOston 29
General Products Corp,
BOUGHT-SOLD-QUOTED
Automatic
;
Delhi Oil
!
Traded l"WI" A
V,- ' "
Gerotor-May
,
^
Bank — Insurance
Industries, Inc.
Eastern
"
i
-
MARKS & CO. Inc. CHICAGO
Grinnell
Specialists in
England Unlisted Securitiet
24 FEDERAL STREET. BOSTON 10
Securities
Lumber & Timber
>
Marked
Established in 1922
iiij
Y*!arl marks & ro. inc.
,
New
:0W:
All Issues
,
New Eng.
Frederick C. Adams & Co.
FOREIGN SECURITIES
AFFILIATE: CARL
a
Markets
Firm Trading
50 Broad Street
f
TEXTILE SECURITIES
Teletype—N. Y. 1-971
2-0050
J
Utility Stocks and Bondt
New York 5, N. Y.
Tele. NY
|-1448
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Tel. REctor 2-2028
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@FedFRASER