Full text of Commercial and Financial Chronicle : October 5, 1950, Vol. 172, No. 4948

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AMERICAN BANKERS ASSOCIATION CONVENTION ISSUE

wsgggff
OCT 9

Commercial and
Chronicle

1950

£

mms
limit

Reg. U. S

Volume 172

New

Number 4948

EDITORIAL

We See It

By A. L. M. WIGGINS*

Two

when

come

good

we

Former

^

son

must review and recon¬

elements in our foreign policy.
cries are already being heard

The other is

the

to

of

burden

taxation

as

has

reduced

,

Any

some

other overt

move

of the Kremlin, of course,

order
ments

these

as

in the

are

rather

by

or

union wage

Bankers

Association

Moreover,

there is

the

politely, the politician just

rected

desirous of

courting popular favor.

the

page

MORE

Royal Bank of Scotland

Bankers

Association

held

its

An¬

the

of

President on

American
Sept. 26,

the hand of government.
question was whether or

possible to preserve a pro¬
competitive society and at
time achieve the degree

same

cooperation, one with another,
was
required by the changing
We were also con¬
fronted with a world that had di¬
minished in size but had multiplied

James

that

order of society.

dependence of one nation
another for a higher degree of
cooperation than ever before.
When I addressed you three years
the

in

A. L. M. Wiggins
*An address

Anniversary
York

ago

on

Paterson, N. J.
dent and

of

Bankers

American

on

page

E.

IN

THIS

President

SHELTON,

Shelton,
the incoming President of the
American Bankers Association, who was advanced from

Continued

36

material on the cover page,
addresses made during the course of
Anniversary Convention of the American Bankers Association.

ARTICLES

Emmons

E.

City, Sept. 26, 1950.

Continued

L.

C. Francis Cocke was elected Vice-Presi¬

JAMES
James

of Diamond
Association, New

by Mr. Wiggins at First General Session

Convention

Glenn

Cocke

Francis

Glenn L. Emmons was re-elected Treasurer.

1, 1947, we had diseov-

Oct.

C.

Shelton

E.

journment, elected James E. Shelton, President of the
Security First National Bank of Los Angeles, Cal., as
President to succeed F. Raymond Peterson, Chairman
of the Board of the First National Bank & Trust Co., of

upon

39

ABA

American

Convention, marking its Diamond Anniversary
meeting, at the Waldorf-Astoria Hotel in New York
City from Sept. 25 through Sept. 27, and, before ad-

of

specially

on

The
nual

was

ductive

The tempta-

Continued

by

second

not it

at the

ever-present

now

retiring

as

A

danger of the demagogue, or, let us say rather
more

Chicago to be site of 1951 Convention.

opportunity could be preserved in a
society largely controlled and di¬

days immediately ahead in the event that

sort.

membership now comprises 98.1% of
over 99% of nation's bank resources.

1944, exactly six years ago today, two questions were
uppermost in our minds. One was whether or not the
freedoms of individual action and

politicians to resist much popular feeling of

this

Convention

the

addressed

I

nothing of the sort occurs, and it will not be easy
for

Association's

nation's banks and

cial bankers.,
When

in force

grow

Ad¬

demands. Stresses responsibility of commer¬

but such senti¬

likely to

Glenn L. Emmons re-elected Treasurer.

by A. L. M. Wiggins, Robert M. Hanes, Marcus
Nadler, M. S. Szymczak, and others, given herein.

dresses

by effective utilization of labor supply and in¬
but warns against excessive trade

all of this could be basically altered

or

President, and C. Francis Cocke becomes Vice-

as

President.

creased mechanization,

planned. Some are also inquiring whether there
is any longer much point in the regulations and
controls which liad been planned in the expecta¬
tion of a protracted struggle in Korea.
Others
nqay well presently ask whether we need to in¬
crease our ready military strength in any great
degree now that the immediate danger is over.

overnight by

it affects American

stresses importance

been

,

as

of proper management of
public debt in maintaining integrity of nation's financial
life.
Condemns present
heavy government civilian
spending and warns, though public sentiment demands
additional taxes, large incomes are already over-heavily
taxed and effectiveness of excess profits taxes is doubt¬
ful. Says our excise taxes require re-examination and
credit controls must be imposed. Holds inflation can be
economy,

One of them is: "Unconditional Surren¬
reported from Korea and it
has its counterpart in this country.
In Asia it
takes the form of the question from the American
soldiers: "When do we go home?" In this country,
it is already being asked whether in light of re¬
cent developments it is now really necessary to
add

Sept. 27. James E. Shelton succeeds F. Raymond Peter¬

Prominent Southern banker and industrialist, in review¬

again.
der!"

Meeting held in New York City from Sept. 25 through

President, American Bankers Association

ing current international situation

many

familiar

Anniversary Convention

Chairman, Atlantic Coast Line Railroad

so

completely altered the situation in that section
of the world almost overnight that few have had
time to readjust their thinking to the new state
of affairs. It is evident enough, however, that the
a

Copy

a

ABA Holds Diamond

Chairman, Bank of Hartsville, S. C.

A bold and successful stroke in Korea has

sider

Price 30 Cents

York, N. Y., Thursday, October 5, 1950

Oar Current National Scene

As

time has

Pat. Office

on

page

32

ISSUE—In addition to the

present in this issue, starting on page 14, other

we

the
Incorporated by Royal Charter 1727

recent Diamond

State and

*

OFFICE—Edinburgh

HEAD

throughout Scotland

Branches

3
8

49

Franklin

OFFICES:

LONDON

Bishopsgate, E. C. 2

West

Funds,

Bonds

inc.

Smithfield, E. C. 1

Charing Cross, S. W. 1

THE NATIONAL CITY BANK

UTILITIES FUND
INCOME (BALANCED; FUND

Associated Banks:

OF NEW YORK

Prospectus sent Jree on request

Glyn, Mills & Co.

FRANKLIN DISTRIBUTORS, Inc.

Williams Deacon's Bank, Ltd.

64 Wall Street, New

York 5

^CanadianBank
4@ommmce
Head

Bond

Dept. Teletype: NY 1-708

dloe

Underwriters and

OF

BOSTON

BOSTON

Angeles




MILES

SHOES

DEPARTMENT

&

Co.

ESTABLISHED 1891

1899

MEMBERS NEW YORK STOCK

Domduoh Securities
Grporahom

EXCH.

40 Exchange

CLEVELAND
Chicago

Los

CANADIAN

(Incorporated)
Established

CITY OF NEW YORK

issues

Goodbody

OTIS & CO.

Devonshire Street

New York

THE

COMMON

or

VANCK, SANDKRS K CO.
Ill

OF

Los Angeles

and

Corporate Securities
Prospectus from authorized dealers

internal

20 Exchange PL

Portland, Ore. San Francisco

bonds & stocks

of Canada

Municipal

NATIONAL BANK

CANADIAN

Government

Distributors of

THE CHASE

Office: Toronto

J\etc York Agency:
Seattle

Bond Fund

Bond Department

BOND FUND

ASSETS

£ 156,628,838

upon request

PREFERRED STOCK FUND
I

TOTAL

Canada

Monthly Commercial Letter

COMMON STOCK FUND

Bond Street, W. 1

fir

across

A Mutual Fund

Burlington Gardens, W. 1
64 A

Municipal

Custodian

115 BROADWAY

New York

Chicago

Denver

Dallas

Cincinnati

Columbus

Toledo

Buffalo

NEW

YORK

105 W. ADAMS

CHICAGO

Place, New York 5, N. Y.

ST,

IRA HAUPT&CO.
and

other

111 Broadway,
WOrth 4-6000

Teletype NY 1-702-3

WHitehall 4-8161

York Stock Exchange
Principal Exchanges

Members New

Boston

N. Y. 6

Teletype NY 1-2708

Telephone: Enterprise

1820

2

».:■

(1286)

TRADING MARKETS

The

IN

Safeway Stores
El Paso Natural Gas

The Commercial and Financial Chronicle

Security I Like Best

This
Forum

week, a different group of experts
and advisory field from all sections of the country

A continuous forum in which, each
in the investment

Dayton Power & Light

participate and give their reasons for favoring a particular security.

Northern Natural Gas

nor

PRICES

AT NET

are

they to be regarded,

as

Winn

Hanseatic
Corporation
Established

120 Broadway, New

Partner,

Cohu

Rights & Scrip
Since 1917

Members

of
I

York

'

.

Curb

Tel. REctor

and

best

the

of

a

of

r

an

as

example.

or

this

even

are

a

few

Common

BANKERS BOND

fairly ob¬

I favor:

office

Kentucky Home Life Bldg.

LOUISVILLE 2, KENTUCKY

Bell Tele. LB 186

try.

■

....

City

in

the

loss

and

mid-30s,

enviable

rec¬

in

recent

at

since

years,

Mills)—Wil¬

Rolling

A.

Fine,

&

Co.,

W.

Partner,

York

New

A.

City

Mass.

(Page 54).

outlook

for

the

their

meet

needs,

each

units

plus

year,

sales of present units as

stockholders.

In

conclusion,
price of around

the present
$15 to $16 per
at

Ala.

branch offices

our

i

outstanding

an

has been to produce the best pos¬
sible

grades

special

of

owned

operating

subsidiairy

Bates

purpose,

high quality steels. As a result of
that
early challenge a wholly46

Manufacturing

plants in this country and Canada,

clude

patented type of pre-fab
which can be used for

a

garages,

for

NY 1-1557

metallurgical development. Since
then the basic policy of Armco

sometime to
opening new

assured for
Plans

HAnover 2-0700

Mobile, Ala.

building

appears

York Curb Exchange

St., New York 4, N. Y.

Direct wires to

Winn & Lovett Grocery Company

come.

York Stock Exchange

New

25 Broad

New Orleans, La. - Birmingham,

has grown to be the largest manu¬
stock has been
held
by public
facturer of steel drainage products.
stockholders, dividend payments
Nationwide
building
of
new
have been equally consistent and
payments of from % to % of net highways and roads will keep at
a high
level the demand for this
income are a reasonable expecta¬
division's products which also in¬
tion.
favorable

New

Members

Company—John P. Mur¬

Investment Counsel, Boston,

ray,

Steiner, Rouse & Co!
Members

(Page 2).
Pittston

Louisiana Securities

(formerly

Corp.

Fine

are

space,

farm

day

construction sheds, small
To¬
Armco
Drainage & Metal
buildings and the like.

Bought

—

Sold

Quoted

—

J. B. Mogniie & Co., Inc.
Members

Nat'l

of

Assn.

Securities

Dealers

Ins.

75 Federal St., Boston 10, Mass.
Tele. BS 142

Tel. HUbbard 2-5500

Portland, Me.

Enterprise 2904

Hartford, Conn.

Enterprise 6800

Open End Phone to New York Canal 6-1613

Products accounts for about 20%-

25% of the company's profits.
After

many

planning

of

years

experimentation, Armco

and

per¬

fected in 1924 the first continuous

sheet-rolling mill in the world—a
large, complicated piece of ma¬
chinery about

Mexican

white

hot

quarter of a mile

a

steel

it

rolls

and

slab

out

as

at

Common

thin,

a

end

one

Light &

Power Co., Ltd.

long which takes 10,000 pounds of

strip of steel at the other.

Record of consistent earn¬

(6)

York

New

liam

the
surrounded

having operated

never

common

(5) Basic and expanding indus¬

Incorporated

Co.—

Partner,

Bought—Sold—Quoted

American

old-

expanding
the econ¬
omy of
the South continues to
(1) Growth trend—sales, earn¬ out-grow the nation as a whole,
ings, net worth.
plus the ever growing popularity
of
super-markets,
well
imply
(2) Sound financial condition.
increasing
sales
and
(3) Able and aggressive man¬ steadily
earnings providing fodder for in¬
agement.
creasing values for the equity of
(4) Modest capitalization.

Consider H. Willett

238-9

afternoon.

vious characteristics

Capital Stock

Long Distance

of

A

how¬

Herewith

Churchill-Downs Inc.

let Floor.

Charles A. Bianchi

ever, that the selection might be
different next month, next week,

Co.

Common

m

I

should

I

affirm,

American Air Filter

a

s e-

lections

feel

ord

Co.,

Steel

Armco

now

the

the company has the

like
pick

current

2-7815

assumed

secu¬

numbe

Exchange

BROADWAY, NEW YORK 5
*

rity
one

New

120

the
so

small units lo¬
cated in restricted shopping cen¬
ters.
The handwriting is already

attempt

define

type

York Stock Exchange

stores

myriad of variants
affecting the appeal of a security
are
complicated
by
the
many on the wall so far as other
types
types of investors, the difficulty of
merchandising units are con¬
0 f
selecting
cerned
with many, if not most,
one individual
super-markets purveying a vari¬
item
a pety
of
products
besides
food
proaches
the
items.
Here, indeed, is .a basic
1 m p o ssible.
and expanding industry.
However,
I
Since the present management
to

New

eliminate

retail unit,

superseding

the

When

will

frft: ppNNELL & Co

grocery

super-markets
ample parking

with

(Winn & Lovett Grocery Co.)

Specialists in

<

fashioned

huge

York 5

of small

to

tended

Co.,

&

Y. S. E.

Members of N.

Teletype NY 1-583

BArclay 7-5660

A.

1929

the chain

BIANCHI

CHARLES

Grocery

Bianchi,

(Page 2).

discussed.)

New York

A.

&

Cohu

offer to sell the securities

an

Alabama &

and

Selections

Lovett

&

Charles

Thursday, October 5, 1950

Week's

Participants

Their

(The articles contained in this forum are not intended to he,

...

Preferred

wide

Its de¬

share, I find the stock of this fa¬
vorably
situated
super-market velopment helped Armco to grow
food chain qualifies in every re¬ to be a large producer of steel
spect as the type of security I sheets. As the automobile and ap¬
As an example, I might cite the
like best.
pliance industries are large users
Winn
&
Lovett
Grocery Com¬
of these
sheets, an all-out war
pany of Jacksonville, Fla.
economy would force conversion
WILLIAM A. FINE
Since 1941' sales have increased
to less profitable items in some of
Partner, W. A. Fine & Co.
from $16,600,000 to an estimated
its plants.

Bought

—

Sold

—

Quoted

'

ings and dividends.
(7) Favorable outlook.

v.

/

U. S. THERMO

CONTROL
Analysis

$150,000,000 for the fiscal year
June 24, 1951; earnings
have increased from $251,000 to

Members of

ending

Request

Stock

York

New

Sheffield

Exchange

plants

★

★

★

Formerly American Rolling Mills)

which

As

June

of

24,

1950, the com¬

pany showed net current
in excess of $4,000,000, and

common

148 State St., Boston 9, Mass.
let OA. 7-0425
^

:

Teletype BS 259

:

N. Y. Telephone WOrth 4-5000

/

The

of

Scranton Spring

Brook Water

Tide Water Power

Toledo Edison

V0GELL & CO., Inc.
37

Wall Street, New

York 5

WHitehall 4-2530 Teletype NY 1-3568

testament

par

produces

Armco's

lib¬
with

products

rods,

—

division

This

built

has

wire,

on

a

50-50 basis with A. O. Smith Corp.,

pipe

$5,000,000

new

plant

the

re¬

to

Texas,

completion
the

meet

pipe in this,
operations.

con¬

cern.

for

costing

future

growth

will

-turn

out

its

10,000

and

Thursday issues of the

"Chronicle"

will

give

ideas galore and pay

you

liberal

dividends.

to

of

of

Commercial &

Financial Chronicle
New York 8,

25 Park Place

N. Y.

REctor 2-9570

plate mill

$6,000,000
to
its 5iSJ5i5J5J5f51BI5i51S1510Bi5ISiSIBl^f519l®I?
operations to meet the

about

Houston

was

tons

month

first

Sheffield is adding a

The pattern

debt, 20,000 shares of
preferred stock and 1,of common stock.

full year's

pipe
line, it has just started operations
and

steel

time

of

a

subscription to the Monday

urgent needs of a

ed

shares

ahead

INVESTED in

at

with an annual
capacity of 400,000 tons. Rushed
Houston,

$45

about

tonnage.

plate—serve different mar¬
kets than the parent company.

search-mind¬

long-term
350.000

of

and

this

Teletype BS 328

Missouri;

a

to

to

ability and aggressiveness.
At the present time the capi¬
talization consists of $5,000,000 of
$50

which

one-third

the

average,
we
call
attention

time

as

City,

possibilities
above

Street, Boston 9

Corp., operating

appreciation

extraordinary growth and
effective

a

subsidiary
Sheffield's

dividend

eral

return

Milk

Oklahoma', is another fully-owned

our

under

confronting

present management as¬
office in 1934 and the rec¬

an

company

assets country, whose stock offers

sumed

is

a

well

do

now

of $5,200,000.

consistent earnings since that

Puget Sound Power & Light

conditions

about $3,000,000.

ord

Federal Water & Gas

seeking

should

longSale of
stock recently has added

debt

term

those

For

31

Tel. HUbbard 2-6442

Houston,' Texas, and Sand Springs,

(Armco Steel Corporation—

$2,332,000 for the year ending
June 24, 1950, net worth advanced
comparably to attain about $8,000,000.

on

Steel

Kansas

at

Ralph F. Carr & Co., Inc.

drawn
as
steadily mounting demand coming
Hence, present sales exceed $100
early as 1907, from the nearby oil fields for steel
per share per year and the mod¬
William A. Fine
wh en road plates to make pipe.
erate capitalization provides con¬
While Armco does not own large
builders came
siderable
earnings
leverage on
to it seeking a metal for culverts iron ore reserves of its own, it
future growth.
that wouldn't rust. Armco
was holds interests in ore mining com¬
The phenomenal growth of the
then a small one-mill operation panies which, plus purchase con¬
super-market in the United States
Middletown, Ohio. Commer¬ tracts, assure it sufficient ore for
has been an. outstanding feature at
its
maximum
requirements for
in the food distributing business cially pure iron made in an open

buy
u.

s.

savings

.

during the past two decades.

Afe

hearth

furnace

was

developed to

Continued

on

page

bonds

54

jnimiMiiiiiiiimmiiimiiMimiiiiiir
Trading Markets

Primary Markets In

Stix & Co.

Alabama-Tennessee
Over-The-Counter

Natural Gas Co.

Securities

Dan River Mills

INVESTMENT

SECURITIES

500 OLIVE

STREET

MEMBERS

NEW YORK STOCK EXCHANGE
NEW YORK CURS EXCHANGE

40 EXCHANGE PL., NEW YORK 5, N. Y.
Phone DIgby 4-4950

Teletype NY 1-953




Income
,

need

you

your

to

Tax

properly

<

St. Louis 1,Mo.

answer to your

Over-the-Counter

Exempt

balance

portfolio?

Investment

Municipal Bonds

Rich., Fred. & Pot. D. 0.

Shaskan & Co.

INVESTORS!
Do

be the

may

Quotation Services
for 37 Years

tax problems.

.

Scott, Horner &
Mason, Inc.

Securities Co.
TELEPHONE:

Lynchburg, Va.

TELETYPE:

Tele.

LY

83

LD

33

Charmer

MEMBERS
MIDWEST STOCK EXCHANGE

GARFIELD

0514
SL-80

Incorporated
Established 1913

39

South

La

Salle

CHICAGO
Phone

dllllllllllllllllllllllllllllllllllllllllllll

National Quotation Bureau

RAndolph

Street
3

6-3900

46 Front Street
CHICAGO

New York 4,
SAN

N.Y.

FRANCISCO

"T-'

inMjW t"*"-

Volume 172

Number 4948

.

.

.

The Commercial and Financial Chronicle

(1287)

An Anti-Inflation

INDEX

Piogram

Articles and News

By ROY BLOUGH*

Member, Council of Economic Advisers

Our Current National

Recently appointed member of President Truman's economic
defense problems and stresses impor¬
tance of maintaining economic stability.
Says problem is one
of keeping balance between civilian supply and civilian de¬
mand. Favors higher taxes as inflation curb, but warns taxes

An Anti-Inflation

council outlines major

should

be such

to

as

economic incentives.

investment and not

encourage

Contends higher taxes

nomic burden and taxation

can

now

—A.

repress

W.

orders,

much

Cullom

Social

Retain

tant, although

to

Well
it!

Stocks

Davis

6

;

for

.

they

.

both

didn't

make

game!

.

.

.

Security' Cost

of

we

still

But

by

Subsidizing

Canadian Dollar—Franz

plenty

pay

not

for

them

Dodgers!).

8
to

Employers

WALL

STREET, NEW YORK

Telephone: WHitehall 4-6551
9

Pick

11

14

Problems

Confronting Banks—Marcus Nadler

16

doing

furnish the

can

.

They're out of the

(obsoletes,

Escape—Roger W. Babson__

Monetary Policy Today—M. S. Szymczak

are

necessary,

lack of tax

a

would not

nue

4

Older Workers—Sumner H. Slichter

"Liberation"

money, which is obviously impor¬

economic

our

BROOKLYN DODGERS?
Wright

priorities

with

are

Taxation

4

09

indicated

methods

the job.

larger
proportion of

resources

these

the

■*

a

combined

where

requires

devoting

Insurance

OBSOLETES

we're such devoted fans at this office

American

the preservation of American val¬

for

Run-Down Farms as Bombing

public has come military production. Fiscal policy
reluctantly to the conclusion that can do little directly to expand
the only road open to peace and military production. Government
ues

WHY ARE

LIKE THE
■

Outlook

—Shelby

Reduce

The

3

Zelomek

Near-Term

be inflationary.

may

Cover

Program—Roy Blough

The Outlook for Interest Rates—Ivan

provide defense outlays. Warns,

however, tax shifting

Page

Scene—A. L. M. Wiggins

The Business Outlook During Warm
Wartime

not eco¬

are

B

The

European

Problem—Robert

M.

Hanes

reve¬

likely stand in the

building up
military
than

useful purpose in facilitating nec¬

have

been

Spencer Chemical

22

way

strength

Freedom Doesn't Come Free—J. L. Robertson

-

TIME, Inc.

18

we

of spending for defense. Ac¬
celerated depreciation can serve a

plant

essary

its

devoting dur¬
ing the past

although

—Claude

■

inequities

to be used

expansion

Dangers of Liberalized Mortgage Lending—Jules I. Bogen___ 24
Preserve and

are

such that it needs

sparingly.

E.

Bennett

The

years.

The

uncertain

character
the

..

raised

program

of

is

productive

threat

presents

economic

major

problem

interna¬

tional

second

by

the

increase

to

whole
Production and the ca¬

economy.

settlement

general

achieved

might

be

defense

production.

In

Association

*

Holds

Portsmouth

;";VV."'

•'

Diamond

:

Steel

Anniversary
Cover

5

Keyserling Places Output Above Controls

7

Bought
Labor Unions

-

Too!

i

(Boxed)

F. Raymond Peterson

George F. Shaskan, Jr., Announces New Course

great reduction in scale war the military require¬
military spending. Or, ments on the one hand and the
there might be a long period of immediate demands for
consump¬
high defense expenditures without tion on the other would so absorb

Sold

on

Incorporated

61

"Investment

Planning for Women"..

open war.

My
the

on

that

the

remarks
third
face

we

tonight

are

whole

that

based

little

national

if

tion

Broadway, New York 6

•

48

BO 9-5133

.

level

fense expenditures extending over

full-scale

This

war.

scale

assumption

for

power,

But

example,

investment

creased

this

fense program. About all that can
be said is that the total increase

to capital

(Editorial)

Cover

Stocks..

Insurance

and

Business

•

36

...

Man's Bookshelf

i

TECO, Inc.

54

■?;

(PHONEVISION)

through in¬

and

A

Canadian

research.

Securities

34

Prospectus

Request

on

production

in

Bank

however, there is op¬
to expand productive

war,

portunity

helps to set the background; un¬
fortunately it does not indicate
the probable magnitude of the de¬

expenditure
the levels of full-

below

Philadelphia

Regular Features
As We See It

defense

of

greatly

long period of time, but without

to

I

provide new investment
productive growth. With the

and

Teletype NY 1-3370

Phone

55

remain to

assumption, namely,
a
high level of de¬

Direct

Says Treasury Balks Infla¬

Controls.

production
would

.

a

Reserve Bank

residue

any

Quoted

J.F.Reilly&Co.

44

the level of

New York Federal

—

31

Inflation Control Discussed by

with

—

•

George C. Johnson Protests Mortgage Credit Restrictions—___ 35

full-

a

Bankers

r-

30 Finance Experts to Participate in Investment Course

Roy Blough

the

*

v

Convention

the total

the

of

power

pacity to produce are basic sources
possibility of
of
both
military power and a
three alternative lines of future
strong
civilian
economy.. The
development.
The
international larger
the
productivity
of
the
tension
might
erupt
into full- economy, the less the impairment
scale open war.
Or, the interna¬ of the civilian standard of living
tional tension might subside, and
required to achieve the necessary
a

American

.

defense

26

_

y<\:

■

.

few

Newport Steel

Strengthen Dual Banking System

annual

defense

likely

expenditures

Coming Events in the Investment Field

the

Dealer-Broker Investment Recommendations

goods—a diversion that

Einzig—"Is Dollar

civilian

assuring

level of living while
higher level for the fu¬

a

Tax

policy

help the

can

Indications

econ¬

in a period of heavy
economy
and
the
stronger the defense expenditure by avoiding
measures that are required to suc¬
repression of economic incentives,
cessfully bear that strain.
by encouraging investment, and
by
discouraging
consumption.
Three Major Economic Problems
Taxes
which
encourage
invest¬
The defense program poses for ment are
likely to be at the ex¬
us
three major economic prob¬ pense of consumption, which raises
omy

The first is to

tdward

achieving

duction- of

move quickly
adequate pro¬

materiel

required

acute
of

Mutual

this is

Problem

presses

of

for the

Balancing

Supply
1'

The

and

Our

max¬

Reporter

Public

Demand

Securities

since the

lem is essentially one of maintain¬

The

ing

plants, and labor from civilian to

balance

a

.

supply

will

address

by Dr. Blough before the
Tax
Executives
Institute,
Inc.,
Lake
Placid, N. Y., .Sept. 26, 1950.

May

between

of

civilian

have

to';, be

Continued

on

48

page

in

offerings of '
i

'

'

and

High Grade Public Utility and Industrial

WII11 AM
WILLIAM
-

-

U. S.

R
B.

Park

25

preferred STOCKS

,,

(Walter Whyte Says).

HAnover

New York 4

Members New

York Curb Exchange

2-4300

Hubbard 2-8200

•

Teletype—NY

„„„„„

WILLIAM
tl

1

Chicago




-

Glens Falfs

1-5
-

Schenectady

-

Worcester

York Stock

Exchange

Telephone
' •
BOwling Green 9-7027

13

Teletype
NY 1-61

56

COMPANY
COMPANY,

'

£

Publishers
Publishers

j
j

SEIBERT,

D.

RIGGS,
j

rv

.

1942,

at

Hungerford Plastics

Possessions,

United

Territories

Pan-American
Dominion

in

0ft

Union,

and

States,

U.

Members of

$45.00 per year,

Canada,

■

,

.

.

c$48.00

per

in

Bought—Sold—Quoted

year.

°ther Countries, $52.00 per year.

*
-

,

,

Hoving

S.,

>

'
;
Other Publications
Thursday (general news and ad- •
!
issue) and every Monday (comBank and Quotation Record — Monthly,,
plete statistical issue —' market quotation -,$30.00 per year. (Foreign postage extra.)
records, corporation news, bank clearings, "
Note—On account of the fluctuations in
_

Di-Noc

the post office at New
the Act of March 8,

Subscription Rates
Subscriptions

Manager

e

Air Products

under

Y.,

t

President

Business
u

;

1879;
■

„

'

Dan.

Company
h.

SEIBERT, Editor & Publisher
DANA

wul[ain B

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j

9576

to

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London,

Gardens,

Edwards & Smith.

c/o

Reentered as second-class ma,tter Febru-

Office

Patent

T)A\TA
DANA

Drapers'

land

and

Thursday, October 5, 1950

.

THEODORE YOUNG &

vertising

state
-

New

71 Broadway, New York (6)

Every

50 Congress Street, Boston 8
,

Albany

—

---

CHRONICLE

REctor 2-9570

WILLIAM

Members New York Stock Exchange

Members

5

You

Place, New York 8, N. Y.,

HERBERT D.

25 Broad Street,

Hay, Fales & Co.

2

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Twice Weekly

FINANCIAL
Reg.

„

Bought—Sold—Quoted

50

Registration

COMMERCIAL

The

■

Spencer Trask & Co.

Corp.

40
;

'1,

i

35

l

Security I Like Best—;

Washington

;

Exchange PL, N.Y.&

of America

27

Salesman's Corner

Tomorrow's Markets

re-

'

,

\

40

Lithium

43

Securities

•*"

interested

2-0270

52

Offerings

Security

Published

We are

■t

8

55

Governments

The State of Trade and Industry...

\

commodities

some

certainly

Quoted }

5

i

Report....

Securities Now in

supply and civilian demand. Civil¬
ian

*An

—

11

Securities

economic stability. This
is an immediately urgent and im¬
mensely difficult task. The prob¬

materials,

Bankers. J-...-.

Wilfred

on

Utility

taining

raw

—

-

third

In part, it
is a matter of reopening plants
which have been kept in reserve

diverting

Sold

Singer, Bean
& MACKIE, Inc.

Civilian

irt plants already engaged in pro¬

matter of

-

Reporter's

Our

ducing military goods.

part, it is a

12

-t

-

-

Observations—A.

Railroad

And in

—

Teletype NY 1-1825 & NY 1-1826

major problem of a
defense program is that of main¬

war.

49

Funds

Notes

News About Banks and

problems if the great body

consumers

a

production

up

7

Business Activity

of

Prospective

tary, naval, and air forces, and for
In part,

Bought

25

HAnover

NSTA

for imum current consumption.
-

civilian defense.

to

grow

the arming and expansion of mili¬

problem of stepping

i»

8

Scarcity Ending?"

From Washington Ahead of the News—Carlisle Bargeron

ture.

propriation recently passed. The
larger the program the greater the
strain
which
is
placed on the

lems.

8

-

intensifies immediate pressure on

be

to

substantially
more than the $17 billion provided
in the supplemental defense ap¬
seems

requires a diversion of
from consumer goods

and

Other

city news,

Offices:

Chicago 3,

111.

135

etc.).
South

(Telephone:

^e
La

State

Salle

St.,

2-0613);

fate-of exchange,

remittances for for-

'eign subscriptions and advertisements must
be made in New York funds.

40

CO.,

Exchange Place, New Yerk 5, N.Y^,

WHitehall 4-2250

Teletype NY 1-3236

k

4

(1288)

The Commercial and Financial Chronicle

cost, both in

The Business Outlook

During Warm Wartime

The Outlook for Interest Rates

Mr. Zelomek

states

through

carry

and

money

his prime

as

on

assumption certainty

manpower.

will

we

be

You

tion

the

call

can

what

will

war

economy—are

tion.

It

first

thing

I

will

A

war

up

production
And

But

1

it

would

we

to

be

think

keep

it is

along

our

our

eyes

are

normally, not
worrying

think

we

about

have

open

world that

a

place in.

we

now

have

I don't think
will

we

have

to

defense

and
A.

W. Zelomek

inflation.

and

So

I

is the best

warm

thing to call

it, since that allows
we

others

when

will

expect

and

war

still

can

we

see

think

we

being strong enough
just the things that

are

will have to do if

we

prevent

expect

peaceful settlements.

that being ready

see

to fight, and

for alterna- to fight,

tions of hot and cold; short periods
when

place. But I
clearly that we, will
our

fight if we just drift
along, trusting to diplomacy and
good-will alone.

and

higher taxes

fight to hold

general

a

want to

we

TJ>

s.

is

a

the

total

war was

about

amounts

few

months, at least
billion will have to

a

$10

the

defense

have

inflation

virifVt

4A«,y.

term,

with

iufi/\

little

na-

short-term
short-term

'deflation
deflation

from

to

they

time
are

develoninf
developing

time.

Or

maybe

making different assump-

tions about what is going to happen

the

to

1
effort.

war

L J
We have

«

assumptions,
about

intelligence.
the
iij

1

x

to

make

before

future

the defense

and

It is

,

ft

i

,

merely

can

talk

.

the

experts

„

will

.

confuse

you

a
...

„

when

they
J

aie going to

Qther
tell

they

supposed

are

But

now

strength to

we

back

have

We will

will

up

tQ

no

con-

aggres-

have

these

the

offers

*aceopinion, is the

my

one

decisive an(* predictable factor,
which

count with

can

we

^

,

.

a
.

sonable degree of certainty.
;11

T

t

i

<.

•

will, I feel certain,
our

defense
going-

effort.

to

have

abnor¬

means

surpluses

Counting
only
the
additions
since June, plus another $10 bil¬

loanable funds
and

lion

terest

quested

will

probably

within

the

be

re¬

next

total

than

more

around

$12

billion.

Ivan

in

low

in¬

rate

pay-as-you-go,
will cover

war,

50%

of the

short-term outlook.
The

long-term outlook is infla¬

velop

government

Because of the increase in

personal

nicipal bonds,
all

bonds

incomes,

revenue

which

mu¬

bonds and

tax

are

exempt
or
partially tax exempt should
enjoy an increased demand from

have

investors
brackets.

The spread in the yield between
high grade bonds, medium grade

t i

a

and

o n

In

nance.

earning

other

words, both the
and the purchasing

power

of

have

money

declined

bonds

in

and

vestment
and

high

the

in

rowed

income

dividends

grade

tax

the

bull

in¬

on

preferred

stocks

stocks has been

common

slowly.

on

rea,ir

have

And
a

that

rising

the

contrary,

the

Korean

market

nar¬

of

the

spending have made it clear that
deficit spending and inflation will

from

increase.

The

Treasury

has

government's
hold

down

Secretary of
indicated that

policy

interest

will

rates

ernment securities.

the
the

be

on

lation

supply

to income.

tories, I

have

we

Business inven¬

suspect, will show

some

pretty fair increases in the
few

next

months.

Even

in

terms

rather

of

outlook

term

near

is

than

the

deficits will be

gov¬

While interest

rates have firmed this

summer

Federal

reverse.

few

next

years.

the high level of income and

will

a

retroactive

ex¬

in

be

that

period

than

it

taking in.

A slow period like this was
pre¬

The feverish

activity generated by the invasion
of Korea
out in

This

a

was

the

began

or

wear

itseli

two, and it has.

already developing be¬

was

fore

bound to

month

battle

to

take

news

such

from
a

Korea

favorable

BONDS, STOCKS, COMMODITIES
Phone LD-T59

some

of

the

heaviest

pressure

But
one

I

want

you

thing.

These

deflationary trends won't

have nearly as much of

Continued

to

inflation with

rising prices could

considerable

cause

be further

The prospects of further

vestment

funds

flight

into

on

an

effect

page

44

of

stocks,
things.

in¬

real

estate

operate with the government in a
national emergency.
The conclu¬

stable

inevitable.

seems

the

part of private

for

example, in the

Already

borrowers,

as

and

proved

lenders
and
new
housing
projects. Capital for industry may
soon
be
both
more
costly and
ment

tangible

economic

and

needs
In

or

are

other

rated

Europe

and

South

America

could

the

available funds will

bring

inflation,
controls

taxes

and

become

too

government

discouraging

in the United States.

Government

Financing Policies—
Determining Factors

The

From the standpoint of national

monetary policies for the best in-

Continued

on

page

45

essential.

as

words,

Im¬

financial

about considerable export of capi¬
tal from this country if the fear of

of instal¬

case

supply

of

be somewhat

and

steady

rise

in

loans

during

the

past

six

LAMBORN & CO., Inc.
99

WALL

STREET

NEW YORK 5, N. Y.

pre¬

The

business

to

months

SUGAR

may

culminate. Loans abroad will

probably take

on

fense" nature

The

of

exports

exceeded
recent

a

months

increased

as

Raw

—

Refined

—

Liquid

loans.

which have

billion
will

de¬

a

business

gold

half

of

more

than

dollars

probably

Exports—Imports—-Futures

in

be
DIgby 4-2727

the dollar gap is re¬

duced

through our imports of for¬
eign goods and defense supplies.
While

economic

forces

are

at

work

affecting the supply and de¬
mand
of loanable funds, money
rates and the supply and demand
for funds will

control and
for

ernment

continue under the

guidance of the
the

duration

of

gov¬

Established

The

government

control

any

long period of time.

The gov¬

ernment's

and

the

Members

channeling of funds into

New

York

New

York
York

New

address by

Municipal

Bond
iq Kn

Dr. Wright before the
Forum, New York City,

Stock

Chicago
New

Exchange
Exchange

Exchange,
Board

Orleans
And

Exchange

Curb

Cotton

Commodity

of

Cotton

other

N. Y. Cotton

Exchange

Exchange Bldg.

DETROIT

GENEVA,

Inc.
Trade

Exchanges

NEW YORK 4,
CHICAGO

*An

1856

H. Hentz & Co,

the

policy will undoubtedly
be determined
by conditions as
to remember they arise. The control of money
rates, however, by the government

speculative markets that they
have felt for many months.
on

this gap

cause

conditions in the British Common¬
wealth of Nations, Western

Naturally, this good news had a
psychological effect. It encouraged of both the supply and demand
every one to stop and think, to sides of the money market makes
take a second look, to become a it extremely hazardous to venture
little more cautious.
And it led any opinion about money rates for
to

edly

reduced.

markets, both the banks and
industry can be expected to co¬

ration.

Exchange and Other Leading Exchanges

pos¬

medium grade bonds will undoubt¬

threatened war-emergency prepa¬

turn.

bonds.

makes

most

soon

dictable in advance.

UNDERWRITERS AND DISTRIBUTORS OF
INVESTMENT SECURITIES

in

which

speculative capital gains
investment
in
stocks
and

money, the more difficult to obtain unless the
deflationary industries are serving the defense

getting bigger and

the

over

economy

BANKERS

to

the government has taken steps to
curb the demand for money on

Retail sales have drop¬
a normal level in re¬

grade

some

biggest

had.

medium

sible

trol of the government and that
interest rates will remain low and

ever

and

inflation

ings are still small.
Production
has been pushed up to high
levels,
and we are getting just about the
civilian

stocks

The

sion that the Money Markets will
come
under more complete con¬

We

through

On

War and the necessities of defense

The economy is still
primarily a
civilian economy.
Military tak¬

During the first quarter of 1951,
Treasury will be operating
with a cash surplus.
This is de¬
flationary. The Treasury will be
taking more money out of the




the

f 1

Wright

prices
phases of industry and fi¬

all

power

the

•

Prices

of

past year, but the spread is still
as if sharply, and the end of the decline
in the value of
money is not in sufficiently wide to attract private
as applied to the
investors
sight.
to
investment
more than about
grade

profits, and (d)
cess
profits tax.

Home Office: Atlanta

of

rising

Taxes, on the other hand, in¬
cluding next year's tax bill, will

demands

stimulated inDi.

billion.

not

These

policies

few

months, the additions to defense
spending already add up to $26

(c)

•

result

a

billion for fiscal 1952.

which

the

or

Bond

As

taxes upon

next

during the next few months,
channeled
into
government
Treasury will get the benefit
defense needs at the present
of
(a) higher tax rates, (b) a
vailing low interest rates.
speed-up in corporation payments,

Private Wires

relaxed

have

the

BROKERS OF

are

private capital financing break
through the controls.

future.

bigger

Members New York Stock

some

trols
for

funds.

increases

up

policies no great change in the
created excess prices of high grade bonds or their
supplies of yields is to be expected in the near

that there will have

further

cover

deficit financing until
future date when these con¬

loanable

still

may

inflation which will

result from

year—probably another $15 to $25

be

But

INVESTMENT

necessities

enormous

as

policies

which

year.

This

defense

the

Treasury's debt

on

emergency.

result of in¬

flation

annual rate of spending of
between
$50 and $60' billion a

,

carry

New
is

for

terest rates

an

ped back to

That, in

had

call

to

tiy it the tionary, but the inflation may de¬

continue
we

tinue, through the United Nations,
sion.

demand

mally low in¬

.,

4° °"er suP?°rt to1.otlier, nations

effort

1950.

wm
that

determined

are

and

a

.AliW

..

who become the victims of

in

Institute,

26,

world

aggressive designs.

2**2 ad,dre"
Mr' Ze,omek be*ore
the
Textile
Distributors
Sept.

Wg

way

the

rates

supply

have recently turned in their es¬
timates of needs. At present price

doubt

no
,
r

York

City,

,

.

that

any

and it is

x,

when

these

...

T

...

period when

a

experts disagree,
.

fienoa

\T

with

we

prospects

,T

Now I think there is

t~\i*

oi

good,

any

the

over

periods

the

funds in the various compartments
of the Money Market.
For many

heads

some

will

we
iamrt

long

Interest

by

watch

a

policy in present

management

years we

Moreover,

war.

peace-loving

this

Advocates adoption of inflation controls recommended
by

Federal Reserve Board and advises

in

now

expenditures.
situation, we have to ^on
kas helped with world re¬
This, of course, simply means a
assumptions.
Some construction as an aid to
peace,
growing deficit on a long-term
people now are talking about the jj. has
supported the institutions basis.
And that means a further
possibility of a deflation, of an through which a
peaceful world accumulation
of
inflationary
easing of prices in many markets, government
may
eventually de- forces.
Others are talking about inflation,
velop. It has reduced its military
of a continued advance in prices
Slow Periods May Develop
strength, rapidly and consistently,
that will lead quickly to the lmever
since
the
last war
ended,
Now we must distinguish be¬
position of general price controls. s0 that no other nation
need fear
tween
the
long-term
and
the
Maybe they are both right. Maybe us gut none of that did
In

make

cies.

At this rate, it doesn't look

j don>t think any of us like this

The

change in prices of high-grade bonds in near future, but holds
long-term outlook will depend on Government financing poli¬

be requested.

defense ef¬

our

inevitable that

to

war

another

to

to the kind of

isn't cold, or

going

on

fort.

vilian produc¬
tion.

through

carry

ci¬

on

alone,

-

Within

for

My basic assumption is very
simple.
It is simply that we will

cutting

down

Assumption

as

did in 1942.

we

Basic

Dr. Wright, in pointing out prevalent
inflationary forces, lays
low interest rates to Government's
policies. Looks for no great

levels,

about the economic future.

would be step¬

ping

lion.

tell

is the basic assumption 1 make
whenever I try to form any view

or we

inflation

sight,
including
more
aid
for
Europe, add up to about $16 bil¬

you

isn't

hot, yet,

the

So

good descrip-

a

further

defense

Additional

refuse to tell you what their asthink sumptions are.

I

to.

Consulting Economist

$14 billion.'

present situa-

want

you

that

before the Korean

prove

personally that the words—warm

far,

so

required.

For

Government expenditures. Forecasts
profitable for textile-apparel
trades, bpt in its late period rather than in the earlier stage.
defense "economy

also

me

afraid you will have to

Do not under-estimate the mag¬
nitude of the new funds that will

half of prospective

cover

with

agree

am

is inevitable.

defense effort, with rising costs in
Pi edicts pay-as-you-go basis wont

our

you

agree

By A. W. ZELOMEK*

Is Inevitable

By IVAN WRIGHT*

If

then 1

Economist, International Statistical Bureau, Inc.

Thursday, October 5, 1950

.

.

man¬

power.

Further Inflation

''

and in

money

.

N. Y.
PITTSBURGH

SWITZERLAND

Volume 172

Number 4948

.

.

The Commercial and Financial Chronicle

.

Steel

The

Output

Carloadings
Retail

State of Trade

Trade

Industry

Price

Auto

and

Investment Course

Commodity Price Index
Food

Production

Business

slight

duction

increase

last

week,

above that of the
made for

vance

a

in

occurred

nation-wide

pro¬

postwar high record and resulted in total

claims for unemployment insurance dropping in the latest report¬
ing week to a new low point for the year.
This

week,

the

American

Iron and Steel Institute reports,
weekly record for the industry by

steel will top its all-time high

9,700 tons of steel ingots and castings.
The pressure of increasing military orders, it is reported,
though still relatively small percentage-wise, plus the continued
heavy demand from non-military consumers, has spurred the
nation's

mills to high-level production

steel

this year and to an
almost certain annual production record in the vicinity of 95,000,000 tons.

This week steelmakers enter fourth quarter with books so
heavily loaded with orders virtually no openings in rolling sched¬
ules in any products are in prospect for the period, says "Steel,"
the nation's authority on metalworking.
Carryover third quarter
tonnage is so large a substantial portion of output in the closing
months of the year will be required to care for the overflow. The
mills, seeking to become current on most products by year-end,
are not booking new orders for fourth quarter.
They are turning
away customers' requests wholesale, sticking rigidly to established

Co., William W.
Thalmann & Co., and John W. Spurdle
of
Dominick
&
Dominick, are
among
the 30 specialists in fi¬
nance
who
will
take
part
in
Cumberland

Peace

or

automotive
to

industry production last week was slightly

decline caused by Studebaker's closing for model

a

changeover, labor trouble at Hudson and reduced Ford truck out¬
put because of a shortage of cabs. However, from a longer-range
view, "Ward's Automotive Reports" asserts that the six millionth
vehicle of the year for United States plants was completed on
Friday of last week, with no indication of a coming letdown in the
record production pace.
the

In

electric

light

and

industry

power

the

amount

of

electrical
an

fnergy distributed in the week ended Sept. 30, reached
all-time historical high of 6,503,008,000 kilowatts.
This total

\fith 5,521,238,000 kwh. distributed in the weekly period

compares

Oct.! it

ended

1949.

in

this

connection

should

it

pointed out

be

that in the comparable week a year ago the country was suffering
from the effects of a two-week-old coal strike involving close to

380,000

responsible in part for mining the greater bulk of the

men

nation's
fronted

industrial

with

coal.
The country at the same time was con¬
impending strike called by half a million steel

an

workers.
i

Hall.

encouraging news to the businessman was the report
of August was a period wherein manufacturers'
sales and new orders set fresh records, according to the Depart¬
ment of Commerce. The extent of the improvement is readily ap¬
parent when such sales in excess of $24,000,000,000 in August are
compared with the total of $20,000,000,000 in July. New orders in
August, the Department points out, rose to $27,800,000,000, up 15%
from July.
On the other hand, manufacturers' inventories at the
close of August totaled $31,500,000,000, or a $200,000,000 drop dur¬
the

month

ing the month.

Most of the decline by the way was in "soft" goods.
*

«

Figures
American

now

sj:

three

speakers

leader.
to the

All

figure for

himself to

the

tune

of

an

credit was reached a month
controls to slow down instalment-

consumer

be

The inflation threat confronts the investor

with

Geyer

&

Co.,

curity

Inc.

the

of

Dealers

make

will
will

panel

Which

"In

Se¬

Industry Shall

"How

to

Read

Financial

a

Re¬

port."
Other speakers include
fred

May,

Executive

"Commercial

the

and

A. Wil¬
Editor of
Financial

Chronicle," Louis Loss, associate
general counsel, Securities & Ex¬
change Commission, and Sydney
J. Weinberg of Goldman Sachs &
Co.

former

and

Governor

May

New York Stock

process

preciation
semi-war

Morgan Stanley Group
Offers Southern

he

economy;

the money supply
long-term

of

politically-promoted monetary

carry strongly counterbalancing offsets—in war
times by the miscellany of government controls

v

Level

Even assuming the correctness of a forecast of general infla¬
tion, its translation into presumption of a stock price rise raises'
basic doubts.
Actually, equity shares are not commodities with,
inherent value, nor are they tied automatically to prices. Rathet,
are they correlated with profits and the shareholder's "net-net"—
after corporate and individual income tax—take-home pay.
The
fact that so many stocks of well-managed companies consistently
sell below their book and replacement values throughout infla¬

the general price
rather than plant^
equipment reproduction costs. Even in the celebrated Germari,
inflation after World War I, the real rise in common stocks oc-:
curred only after the drastic collapse of the monetary unit in'

tionary periods proves that they are not tied to
level.

Stock

prices reflect gain-able earnings

and

'

192L

.\

1

European Experience

The

;

experience of European countries, as'
France, Germany, Austria, and Italy, constitute a useful laboratory
for scrutinizing the process
of large-scale inflation.
In their
panickly flight from the currency, the citizens of moderate means
sought commodities and physical goods.
In France, wholesale
commodity prices climbed to eight times their 1913 level. In Italy,
post-World

rose

War

I

while

six-fold,

in

they stood at

1922

by

Germany

of their 1913 figure, and by 1923 the increase was 15
trillion to 1.
The wealthier possessors of capital tried to protect
themselves by buying securities.
This has always proved more
147,500%

Morgan Stanley & Co., Kidder,
Peabody & Co. and Merrill Lynch,
Pierce, Fenner & Beane, together

per

awarded

share.

to

000,000 df the over-all total,

accounted for $13,015,-

alone

and stood at

a

new

high itself

as

a

result of the rush for war-enhanced goods.

the

consumer

petitive

sale
per

Proceeds
will

be

credit jumped $614,000,000 in August after

Continued

on

page

42

The

stock

at

group

Oct. 3
share.

Continued

on

page

on

on

has become associated with

additional

stock of two of

-Company's subsid¬
iary
public
uitility
operating
companies to help finance con¬
struction programs. Prior to the
end of this year,

tends

W. R. Grace

Among Those

M. A. Hanna

Currently in Favor
Corp.

American Enka

Hugoton Production

the

proceeds

present

invest

sale

together

of

with

company

common

in¬
the

STUYVESANT F. MORRIS JR. & CO.
40 Exchange

Place, New York City 5, N. Y.

Teletype NY 1-3416

Telephone: WHitehall 4-7290

of
stock,

funds to
required, as follows:
$6,000,000
for
Alabama
Power
Company shares and $6,000,000
for shares of Georgia Power Com¬
the

us.

financing

Southern

to

pleased to announce that

of

buy

to

common

are

MR. GEORGE NELSON

com¬

bid

a

We

was

the

from

used

shares of

The

treasury

extent

WE ARE

PLEASED TO ANNOUNCE THAT

pany.

Transcontinental

^Mississippi River Fuel

Gas

Pipeline

^Tennessee Gas Transmission
Texas Eastern Transmission

public util¬
incorpo¬
rated in 1945, owns all of the out¬
standing common stocks of four

holding

Henry Evans Gray

Mr.

The Southern Co., a

ities

company

ASSOCIATED

NOW

IS
AND

EFFECTIVE

WITH

OCTOBER

1,

US
1950.

operating public utility companies

Texas Gas Transmission

Primary Markets

Tucson Gas & Electric

Weyerhaeuser Timber

which
the

on

74

N.

Y.

request

Security Dealers Association

-

Denver




-

Detroit

-

all

stock
of

stock

electric
-

Pittsburgh

RESIDENT

MANAGER

OF OUR

MID-CONTINENT PETROLEUM

of

the
of

The

TELEPHONE:

BACIIE & CO.

Southern

outstanding

Founded 187 9

com¬

Birmingham

CORP. BLDG.

5-9211

Elec¬

MEMBERS

NEW

YORK

LEADING

STOCK a CURB

EXCHANGES

AND

STOCK AND COMMODIT" EXCHANGES

tric Co. which sells and distributes

to

Philadelphia

Co.

BE

TULSA, OKLAHOMA, OFFICE

OTHER

Teletype NY 1-316; 377; 378

Private wires

Cleveland

WILL

in

Georgia

common

mon

Trinity Place, New York 6, N. Y.

Telephone: HA 2-2400.

service

Power
Co.,
Gulf
Power Co. and Mississippi Power
Co.
An exchange offer is pres¬
ently underway to acquire for

TR0STER, CURRIE & SUMMERS
Members:

electric

of

Alabama, Georgia,
Florida
and
Mississippi.
These
companies are: Alabama Power

Co.,

"Prospectus

furnish

States

-

St. Louis

energy

in

Birmingham,

Ala., and several adjoining com¬
munities.

de¬
and
and

rising taxation.

ever

Stocks Not Tied to the General Price

they

Company Stock

$11.25

must'
and

taxation; and in peacetime by deflationary factors like the nation's'
enormous
plant capacity, potential industrial and agricultural

The

Exchange.

First,
the

and other facets of the world-wide

the

of

in

remember that expansion of
A. Wilfred

Mr.

Spurdle, who is President
of the New York Security Ana¬
lysts, will join Janet A. Kapelsohn
Messing, C.P.A. and Hunter Col¬
lege lecturer, and Pierre Bretey,
railroad
analyst
with
Baker,
Weeks & Harden, in discussing

dilemma.

occurrence

Deciding the net residual preponderance'
economy's inflationary or deflationary
elements surely is difficult enough.
We must

overproduction and

Invest?"

its

of the

former

York

Association,
which

the

up

and

New

two-fold

second, he must translate his economic inter¬
pretation into intelligent investment policy.

public.

President

a

forecast

open

Mr. Loeb and Mr. Cumberland,
with George Geyer, President of

$10.9501

on

by time-buying

incurred

Discount

casting of "dollar-depreciation-ahead."
Nevertheless the investor has important
and continuing need for policy dealing both
with potential inflation
and deflation—conv
tinuingly and wholly irrespective of moment
tary changes in the degree of war temperature.

discussion

all-time

extended

government put

Over-all

a

will

the

Oct. 4 offered to the pubile 1,000,-

buying.
D.£t)t

pounded the New Era

000 shares of $5 par value common
stock
of
The
Southern
Co.
at

consumer

record

and

sessions

is being grossly oversold.
taxi-driver, barber and cook ex¬
precept "good stocks are cheap at any price,"

1920s

today the tyro cites to the exact decimal point the rise in the
consumers' price index to support his fore¬

have

at hand relative to consumer credit show that the

high of $20,979,000,000 in August, the Federal Reserve Board dis¬
on Monday of this week.

before the

will

with 29 other investment firms

closed

The

session

Each

■ :

Further

that

late

The course, which has been de¬
signed to help build personal and
family financial defense programs
against inflation, will consist of
10 weekly sessions from 4:00 to
5:30 p.m. on Tuesdays at Town

I

In the

investment

true that "inflation"

course

Hall, 113 West 43rd Street, next
Tuesday,
Oct.
10,
it
was
an¬
nounced today.

cutbacks

as military orders develop, all the signs point to increas¬
ing supply stringency as the weeks pass.

Economy,"

It is of

Whereas in the

scheduled to open at Town

course

discuss

lower due

Should Stocks Be Bought As An
Inflation Hedge?

of Ladenburg,

"You and Your Dollars In A War

quotas. With- consumer allotments reduced and subject to further
v

Loeb, senior partner

of E. F. Hutton &

Failures

industrial

Gerald M.

-

sustaining total output at a level noticeably
comparable week in 1949. This continued ad¬

new

By A. WILFRED MAY

Index

J
A

5

30 Finance Experts
To Participate in

Production

Electric

(1289)

MAIN

OFFICE: 36

WALL

STREET, NJIW YORK 5, N. Y.

46

,

The Commercial and Financial Chronicle

(1290)

overtime

Near-Teim Outlook

and

Foi Insurance Stocks

in

Shelby Cullom Davis & Co., Members N. Y. S. E.

Superintendent of Insurance, N. Y. State

Former Deputy

Insurance

Korea impact in following

Fatal

t i

in an

in¬

of

o n

surance

stocks

time

that

at

for

was

or

short

formed
as

for

last

Favorable

months

six

the

place,

stand

March

has

the

as

out

borne

our

Companies

writing for some time.
At the
same
time, the results thus far
in 1950 have been by no means

filed

J

Insurance

unfavorable.

Departments

the country
in

their

the

at

all

over

up

the finest statements

entire

underwriting

history

results

far

as
were

as

con¬

cerned. The highest

underwriting
profits in insurance history were

revealed.

profits
of

These

far

the

on

down about

what

underwriting

most

executives

ratios
points on

Loss

age.

three

and

Actually,

possible

windstorms

not

only

had

"straight" underwriting been ex¬
tremely favorable, but there had
been

virtual

a

dearth

of

catas¬

trophes.
In

anticipation of these

lent

statements

the

share market had for
than

more

22

period of

a

months

forming better than

excel¬

insurance
been

per¬

other of

any

show

it

Middle'

spring. One

of

superior

After this

market

per¬

Middle

the

storm in

West

produced
something
like
400,000 claims which are costly to
investigate as well as to settle.
Then there

the famous South

was

Afnboy explosion, a real catas¬
trophe in insurance history al¬
though by no means as extensive

months of this year

better than the

West

in the Panhandle during the

and

would

period

the Texas City disaster of three

before.

these

or

claims

that

looks

during

good
is

if

as

and

fire

actually have

as

and

Had it not been for

windstorms

trophic

structure

catas¬

ahead.

had

the

the

greatest

figures,

been

better

company

released

reductions

nies

to

just

rates

in 1947.

yesterday

It

seemed

almost

therefore, that
diate

term

near

holders

inevitable,

and interme¬
of

when

insurance

shares

thus

re¬

previously slightly

un¬

favorable loss trend for the prior
five months.

insurance

stocks, those who had purchased
their shares during the dark days
of 1947 and the
early part of 1948

As

far

as

casualty is concerned

workmen's
rience

has

compensation
worsened

decreases and

al-

were

1949,

that

erage.

expe¬

to

due

broadening of

rate
cov¬

Massachusetts has been

a

prime

Analysts, N. Y. City, Sept. 20, 1950.

Furthermore, there has been less

of

the

and

that

of

some

of the

tion

that in face

pending inflationary situa¬
they
think
the insurance

companies
little fat.

entitled to put

are

This is

a

on a

positive factor

improvement.

of

(2)

Talk

of

ceased almost

business

commission

a

around

companies

to

and

the

meet

plenty

therefore

incentive

amount

for

the

demands

to

roughly

of the operating expenses of

insurance company

after

pay¬

ment of losses and adjustment ex¬

this quieting of fears

commission
as

war

as

to

be regarded
factor of im¬

can

positive

a

provement.

dropped

an

atom

bomb would be

New York and other

on

latter.

has

large cities in the east and the in¬

that

of

tential

cheap

can

investment

problem

become—how

self

in

these

to

to¬

protect

inflationary

proven; satisfactory
because
although income remains stable
from interest, it loses
purchasing
power as commodity prices rise.
So this primarily "bond" money
in the hands of not only
wealthy
individuals and trustees but small
<

value.

from

during

Members

Neio

York

Stock

Co.

ried

pe¬
investors expect prices

about

of

power

such

insurance

as

dividends
interest

are

stocks

covered

received

from

whose

largely bybonds

and

which in addition promise growth
and. some protection against ad¬

vancing commodity prices.
insurance

stocks

might

Many
cited

be

future

the

their

cash, U. S.

INSURANCE
Oldest Specialists

at

discount

a

recent

Stocks.

Serving

Dealers

and

Institutions

bond

received

interest, and

from

obligations
these

U.

S.

alone.

insurance

interest

Government

Not

stocks

only

net

WILLIAM

stock

'IN

THE

HEART

OF




THE

.

since

Teletype NY

INSURANCE

have

field

asset

indicated,

liquidating
does have an

value

or

market price.

effect

I believe sim¬
under way

ilar developments are
the

in

insurance

field

stock

and

that they will be beneficial to in¬
surance

share prices.

Dividend

sion

point in

the

of

We

have

do
that

coming

when
companies

year

insurance

of

inter¬

oi

are

of the

season

directors

this discus¬

near-term

mediate outlook.
into the

Ahead

Increases

final

One

begin to consider the possibility of
dividends

dividend

or

in¬

Since investment income

has been

running from 10 to 15%

higher than a year
quite possible that
increased

it

ago

investment

seems

this

of

some

income

as

well

perhaps as some of the sub¬
stantial underwriting profits may
be

along

passed

stockholders.

to

dividends

investment
could

income

well

be

in

well

are

and

order.

be¬

80% of

or

rise

a

Further¬

insurance company manage¬

more

have

ments

that

tive to placate some of their "blue

the

return
more

is

very

secure.

than do bonds in

promise

substantial

additional

an

chip" stockholders such

sity

endowments,

growth, growth due to the plow-

trust

funds

back

and

missionaries

of

of

excess

investment

in¬

dividends paid out, plus
underwriting profits. The rec¬

funds, all of which

all

owners

ord

of

testifies

growth.

insurance

our
as

to

Such

stocks in

the

companies

reality

vehicles
a

sense

as

of

this

permit the

too.

have

been

income.

crying

for

the

spectacle

two

of

of

the
our

foreign
respec¬

majority which
insurance

of

if

may

insurance

divi¬

so

that

stocks

with

are

yields

be obtained from otner
So insurance company

and

increase

their

increased

commensurate'

securities,

of

proud

But they may

them

not

are

yields from
more

years

additional

rightly

are

some

dends

few

Insurance company man¬

agements

lose

and

stocks

past

these stockholders.

"Big stock" money has also been
going into insurance stocks. Dur¬
ing the past month we have wit¬
nessed

the

during

insur¬

investor to have his cake and eat
it

who

hospital

substantial

are

insurance

funds,

ministers

and

come over

of

univer¬

as

pension

retired

for

incen¬

have

the

the

both

wherewithall

dividends

this

in¬
to

autumn

and I believe that some good news
may

be expected.

INSURANCE STOCKS

Scudder, Stevens
1927.

STREET, NEW YORK 7, N. Y.

Telephone BEekman 3-0626

absurdly cheap.
in the

seem

important characteristic of bonds

Cehjttehdeh U Co.

in Insurance

nu erd fl,»
110

in

developments

low their traditional 75

by

STOCKS

(With Predecessor Firm)

assets

Governments and the

ly

THE MIDWEST MARKET PLACE

and

to

purchasing

dollars,

Insurance

of

BANK

on

highest grade securities available

extra

FOR

in

seern

may

deflationary

a

along these lines
Underwriters and Dealers

Discounts

lower and hence hang

creases.

as well, has
been turn¬
vehicles for investments

to

purchasing

Exchange

like

almost

pond.

their dollars/ But during a period
when prices are expected to rise
and investors are obviously wor¬

investors

control

war

sub¬

a

its "break¬

seems
a

stock

at

liquidating value

tenable

centive

&

bought

It

managements

Shelby Cui.lom Davis

insurance

an

be

shooting fish in

ing

tively,

Korean

to

anxious to

are

conditions. Fixed Obligations have

sold

the

po¬

wish

not

stantial discount from

who

as

They

than

wiiich

one

buy

do

fundamentally cheap. What
more
fundamentally

bank

not

assume

seem

upon

does

to

inflationary

an

in investments which

place them
seem
can

has

ten years ago. The

stocks, I be¬

going

investors

eventually

it did

as

of

hold dollars.

who

every

is

greater importance in the future,
in the face

dollar

the

one's

insurance

it

As

interests, Italian and Swiss

on

hap¬

sell¬

governing factor in the

a

lieve

ten

the

companies would be there¬
fore the hardest hit by such catastrophies, insurance shares were,

heavily

of

75 and in

or

ing at discounts of 25, 30 and even
as
high as 40% from liquidating
value. Although I do not believe
that net asset or liquidating value

not

ance

(3) Because some investors
jumped to the immediate conclu¬
sion that

One

student

a

person

E bond,

producers in some areas They offer
higher
commissions.
Since that
they

also

pri¬
been

stocks.

what

during

some

commissions

an

war

overnight. It seemed

less

was

has

com¬

100 years are now

some cases

whose dividend is covered entire¬

obvious that there would be
of

continuously for 50

savings account, realizes

a

primary
has

the

these commissioners and

I believe it fair to say

be

realize

an

day

upwards

Insurance commissioners

considered

to

known

panies which have paid dividends

to go

Money

money

Every

much

of

surance

•Remarks of Mr. Davis before luncheon
meeting
of
N. Y. Society
of
Security

example

relief

Stocks of well

tors.

riod when

past

has had

insurance

raised

flow¬

power

bought

in

vise

Stock

been

need

dollar

years.

1944.

do not want to put the companies
in another such squeeze.
I know

a

reveal

for

again

were

ter

.

the

the

to

commissioners

penses

burnings,

August,

in

work.

the

Eventually they had

back

come

August, 1950, was somewhat bet¬
a

caught

costs.

history.

than

of

shares than American inves¬

ance

up"
money

to

pened to the purchasing

result

a

as

put

insurance

to

money

five

ordered

summer

has

not

does

when

the

and

"bond"

going into

experience

for

were

and

were

for

versing

What

have

1945

Bond

marily

results, of course, were dis¬
astrous and the insurance compa¬

underwriting earnings in their

The Transfer to Other Securities

of
in

war

The

It, there

record.

a

underwriting profits in

August

favorable

spring

50%

revealed

and

ending 1943 and

rate

ing thus far and the most recent

companies

1944

Underwriting

been

years

experience

the first six
as last year—

almost

insurance

in

be

is

Flowing In

commodity prices started to jump

af¬

What
be

Both

pause.

what

well

forded than after insurance stock

order.

would

of

deflation

outlook, then this

should

If

wars.

ing into insurance stocks.

They recall only too
happened to the rate

for

only natural

in

time

was

natural

advent

than

post¬

always

were

reductions during the fall
With

and

the

has

previous

A

war.

Two kinds of this money are

a

commissioners

history.
Certainly they have been gratify¬

rest

a

Rate studies

eye.

is

were

given

fire

that
more

commissioners

of

to be the

a

insurance

of

seemed

secret that

open

Korea and the inauguration of an

1950 might well be the second in

it

an

lowered rates/and higher replace¬

done nearly 25%

formance

rather

in a number of states
might well have produced

1950.

which

inflation

money

past

waiting for

idle,

deflation

war

around,

the

after

the

eyeing the rate structure with

rate

is

during

occurred

was

number

know how much

there

ment

better-than-average market per¬
formance the insurance stocks had
whole.

been

it

years

Underwriting
profits
so
ample during 1949

structure.

that

We all

10

or

rate

from

the

over

investors are
stores of value for their

3, 5

lying

lifted

had

situation

created

almost imme¬

was

pending

a

money

favorably

years

a

diately

canny,

been willing to pay far

market for

with

good deal of tnis money has been

disastrous

the

in

Faced

for

for

been

as

as

Pressure

than six months

seeking

insurance stocks.

(1)

are

in¬

or

outlook

more

even

not

keep records, with one excep¬
tion, the finance companies.
During this almost two years of

averages

around
in fire

up

are

average

the 45 groups of stocks on which
we

are

aver¬

points also in casualty.
the fire
experience

■

would

had

on

or

investment income is
12% to 15% on aver¬

around

had considered possible earlier in
the year. They had been made

because

profits

15% to 20%

while

age,

2%

around

underwriting

3%,

up

Premium volume is

average

an

underwriting three

surpassed

near

term

rest

money.

1949 results would inflationary potential rather than
pinnacle of under¬ a deflationary one, many of the

that

thought

insurance
Shelby Cullom Davis

next

rela¬

a

the

to

This is the most important

outlook.

been

uninteresting

termediate

which

companies during these past

ance

two¬

first

per¬

averages

Meanwhile the record of insur¬

opinion
In

(4)

Korea

had

as

change and positive factor of im¬
is always
provement in the insurance share

under way

reasons

fold:

the

tively

skeptical

Results

1950

The

were

has

market

than

whole.

a

intermediate
term.
this

to

selling from these hold¬
these months the

worse

what

respects

such

earlier.

on

year.

of

relative

that

is

far cneaper

now

acci¬

to alter in four important

served

During

ers.

to

opposed

the

withstand

a good

of the

some

of the market insurance shares

The events of June 26, 1950, the
outbreak of the war in
Korea,

had

has

market

share

result

cross

speeds.

inllationary

ing the past six months the insur¬
ance

having

as

industries

steels, oils, rails, and textiles. The

ever

automobile

in

Impact

think

should

friendless,

insurance share

the long term,
as

most

of

high

at

rapid

as

favored

war

up

also

of
address
before the
Financial transferring their funds perhaps
to greener pastures.
And this is
Analysts' Society in Philadelphia
I stated that the primary attrac- exactly what has happened.
Dur¬
months ago

six

Nearly

deal

great

a

than

road

been

not

six

more

from a
the
whole, the casualty companies are

early liberalization of dividends more commensurate with
assets and earnings.

sees

the

been

around 11%
Nevertheless,

are

which

been

have

higher prices for American insur¬

first

the

have

driving

ago.

interests,

foreign

plished. The rebound of insurance

on

year

pressure

These

traditionally

stocks from their Korean lows has

deaths

dents

ways:

against rate structure; (2)
abrogation of commission price-war threat; (3) improvement
of technical position of insurance shares after previous drop
caused by unwarranted war-induced fears; and (4) enhance¬
ment of their attractiveness as anti-inflation instrument. Fore¬
(1) lifting of regulatory

two

unfavorable line

an

during

and

country

nearly

better than average
performance was accom¬

companies and at prices only 10
15% respectively lrom their
net
asset
or
liquidating values.

and

have thus

There

cars

before

1950 underwriting results will
history, approaching 1949's record. Fore¬

favorable outgrowth of

sees

new

authority predicts

be second best in

casualty

months.

after

to

of far

market

or

seven

entitled

was

years

Thursday, October 5, 1950

.

.

Automobile liability

eight years.
has also been

By SHELBY CULLOM DAVIS*

as well under
during booms

as

during the past

as

which the insurance share market

compensation

usually does not do
these conditions
such

Hence the technical reaction

news.

unemploy¬

some

Workmen's

ment.

.

yj, Si ocL Cxclarujt anil Other Principal CrchantjeS

announced

.

1-384

DISTRICT'

Admit Two Partners
Scudder, Stevens & Clark have

209 South La Salle Street.

CHICAGO 4, ILLINOIS

Omaha, Nebraska

Tel. DEarborn 2-0500

Lincoln, Nebraska

Hamilton

the

M.

Lawrence

as

resident

New

in

admissions

Chase

and

general
York.

of

James F.

partners,

Volume 172

Number 4948

.The Commercial and Financial Chronicle

.

(1291)

he has been gotten rid of.

Keyserling Places
Output Above Controls
Chief

Presidential

ad¬

economic

viser looks for five years

From

of heavy

taxation

and

There is
Former

Addressing the American Man¬

more

than meets the eye

i

s e r

s,

tended

I told him

not

for five to

ten years

"at the most

hopeful," the emphasis in meeting
military needs must be primarily
production.

on

"But," he

added,

"random actions at certain strate¬

gic

points

agement

segments

by

labor

and

of

man¬

those of

us

who thought we could

hold off

on

controls very

not

were

dictated

by

economic

gap

by

be

must

and

closed

strict

by

credit

taxation

curbs—con¬

trols do not take the place of these

he said, since they do
not reduce the purchasing power
measures,

available to buy
ian output.
Over

he

the

be

In

placed

last

however,
stress

the

on

the

next

a

five years, jt will

national

As far

as

than

ter

now

it

was

were

IVz

gain of

But

in

men

was

the

million

forces, for

y

„
.
(>Dr>
p+>ev Truma" had directly asked Baruch to do
Byrnes and Baruch have long been close friends.

is

not

upon Stalin
spending of billions of dollars to "contain" him in Europe,
Asia, stepping up the Voice of America radio program,
and feeding the American people daily stories about Stalin's hav¬
ing the atomic bomb and how, at his command, it will destroy us.

but not in

However, what I have

attack

0

ail

»nH

because of

then

wf

ve

campaign.
snem

~nd

Stalin has taken over Eastspending billions of dollars
our boys are in Korea—

this earlier

Truman

would now have us believe that he, himself,
"appeasement," that his was a hard-boiled, two-fisted
attitude, but he was, in effect, double-crossed.
Naturally, he
can't be held personally responsible for Teheran, Cairo and Yalta
not for

that went

not

ture

on

before his ascendancy to the

Presidency, and things

certainly have been different in his administration had it

been

thus:

for

Byrnes.

got him

never been able to understand is, just
did at that winter meeting in Moscow

ill-favor.

in such

Stalin's

troops

That leaves

Louis Johnson

was

certain
House

satellite
and

governments had

to

be approved

by the White

United States Senate.

the

The

plain fact is that it was not until the American people
began to wake up to the fact that in World War II they had been *
hoodwinked again, had succeeded in exchanging Hitler for
Staling
that Truman switched from what it called "appeasement" to a
policy of bellicosity which had cost plenty of money, and is to
cost

plenty
I

morning

more.

much

am

interested in

an Associated Press dispatch in the
of Oct. 3 telling of a speech by John M. Hancock
Sulphur Springs, W. Va.

papers

at White

Mr. Hancock
the

Board

United

the

political propaganda pic¬
mess of- Korea,

whose

of

is

partner in Lehman Brothers, Chairman of
former U. S. representative on the

a

Lever

Nations

Bros.,

Atomic

Energy Commission, and has served in
positions in "Washington. He is certainly a man '
words should carry weight. He was represented as saying

that he did not believe Russia
is

no

can make atomic bombs, that there
why we should have any "undue fear" and "every
why we should maintain poise."
He was further repre¬

reason

reason

sented

the

as

best

telling his audience that the best military minds with
possible information believe that Russia is a "second*
with a third-rate army."

class power

This has been my/information all along.

responsible for the

This announcement is neither

an

The

offer to sell

nor a

solicitation of

an

offer to buy

any

of these Shares,

offer is made only by the Prospectus.

1,000,000 Shares

unem¬

unem¬

million

12

into

the

armed

he said,

Thus

armed

forces

The Southern

Company

force

of

Par Value $5 per

Share

size

that

contemplated;

now

Common Stock

a

situation—

manpower

armed

we

men

have

to

How¬

he believes, hours will have
to be steoned un to get the pro¬
ever,

duction
Mr.

need.

we

Kevserling

he

was

hopeful that World War III

may

be

smd

"The

averted.

in

men

Price

the

$11.25a Share

Kremlin." he said,
cruel

"while they are
lacking in our stand¬

and

ards, have done nothing that indi¬
cates

that

term

is

the

they

contrary,

calculating.
tant

to

are

commonly

they

crazy

the

the

On

cold

and

are

They will

take

as

utilized.

risk

be
if

Copies of the Prospectus

he obtained from only such of the undersigned as may legally offer
compliance with the securities laws of the respective States,

may

these Shares in

reluc¬
we

are

well prepared."

MORGAN STANLEY & CO.

Titus-Miller Branch
LANSING,
&

KIDDER, PEABODY & CO.

GOLDMAN, SACHS & CO.

Company, members of the De¬

troit

and

changes,
a

Mich.—Titus-Miller

branch

Building.

Midwest

announce

office

the

D.

Iiollister

Bogue

William L. Black have become
sociated

with

Ex¬

MERRILL LYNCH, PIERCE, FENNER & BEANE

q

LAURENCE M. MARKS & CO.

them

as

I

'

THE ROBINSON-HUMPHREY COMPANY

representatives.




as¬

CENTRAL REPUBLIC COMPANY
(Incorporated)

W. C. LANGLEY & CO.

CLARK, DODGE & CO.

and

registered

COURTS & CO.

HORNBLO.WER & WEEKS

the opening of

in

Beulah

Stock

were

Eastern

several important

by Truman.
Well

was

that Byrnes

that

Europe and Germany.
They were not there
through any of Jimmy's doing.
It was not for him to talk hardboiled with Stalin when the war had just ended and everything
was sweetness and
light. The recognition that was extended to

are

"appeasement," first by Roosevelt and

was

astride

is to

him, the Reds have China and

it

1945-46

net loss of 6 million

a

comparable
an

behind Truman's

get the onus of appeasing Stalin, in the months immediately
following the end of the war, off his shoulders. This is an impor¬
•

Ever since, the
pursuing that hard-boiled, realistic atti¬

down to IV2 million.

to the economy.

and

re¬

Byrnes out of the State Secretaryship in January, 1947, a
after the Moscow conference, but he undoubtedly credits
Byrnes with influencing Barney Baruch not to help him financially

to check

hard-boiled, real¬

mean

would have to draw 8 million
th**

of the attack is

making

uoon.

meantime
drawn

were

into

unless

This refers to Byrnes'

issue in the current

a

him.

he said,

6 million when

ployment

an¬

year

tant

towards

pursued

is actually bet¬
in 1939.
Then

ployed to be drawn
a

At

established along democratic lines,
and recognized them.

purpose

be

tude, if by that is meant the heaping of denunciations

that he

Byrnes went ahead

not-so-apparent

to

product of $350 billion.
manpower goes

the situation

there

saying

eased

The

was

economy.

out,
increased 75%, and if
only one-third as well in

do

disillusioned with Stalin and thenceforth
attitude

pointed

he

production
we

as

out on him "when I
lack of active support in
Truman's 1948 campaign for reelection.
That he expected any
warmth from Byrnes at that time is rather amazing because he had

,

before he went out, Byrnes himself along with
Administration generally, let it be known they

to be met with

are

war,

quoted

The primary purpose
vealed in Truman's complaint that Byrnes ran

so.

the

production, if

on

strain

least

the

pull,

primary

were

and

Administration has been

of

but

needed him most."

would

the

military needs
the

the smaller civil¬

long

believes

must

Bargeron

-

Primarily, Mr. Keyserling be¬
lieves,* the immediate inflationary

is

1947.

campaign against Byrnes through
planting stories with columnists that Byrnes was

months

But
Truman

what

they
Carlisle

'

necessity."

them to be published.

he

January,

and the

"attack" because Tru¬

an

knew his statements were to be published

place

in

the usual Washington

on

istic

street."

he wanted

resigned

were

quoted as saying:

as

Moscow, until he

the way out because he had appeased Stalin.

nize the Eastern European governments

worried.

Some wage increases and some
price increases have occurred that

from

man most responsible for it, in
the crowd around Truman,
Admiral Leahy, then Truman's Chief of Staff, and who had
acted in a similar capacity for Roosevelt.
For months Leahy

told Stalin at Potsdam that he wouldn't recog¬

made

have

that

policy was not appeasement and

one-way

other

infla¬

interna¬

our

describe it

and

the

likely to continue

is also

a

man

effective

since

is

telling "Daniels
in Moscow."

as

nerve

I

He stated that

Keyserling

crisis

quoted

"Byrnes got the real riot act after Moscow.

price controls.
H.

is

Truman

tionary gap
than wage and

Leon

returned

on

important and

tional

feeling that Byrnes, at

he

was

the medium of

"Byrnes lost his

more

current

expressions of regard, under criticism of having "ap¬
The criticism continued for a year, from the time

The

ernment of

that

filling

a
true picture.
It is a fact that Byrnes went
office, giving ill health as the reason and with Truman's

of

carried

Truman

higher taxes

in

his appointees.
not

ing Russian positions with regard to the gov¬
Bulgaria and other satellite states."

of

responsible tor tne earlier

peased" Stalin.

in President Truman's attack

as

is

the winter of 1945-46, "went too far in accept¬

increased pro¬
duction
and

more

it

the Moscow conference of Foreign Ministers in

con¬

were

out

State

thoritatively represents the President

Economic Adv

of

Secretary

City on Oct. 2, Leon H. Keyser¬
ling, Chairman of the President's
Council

of the News

Byrnes through the medium of
Jonathan Daniels' book "The Man of Independence." Daniels au¬
on

agement Association, in New York

were

But

By CARLISLE BARGERON

curbs.

credit

strict

Johnson

tenderest

military outlays, and favors clos¬
ing inflationary gap by heavy

was

"appeasement" policy of the Truman administration which greased
road to Korea, he has gone.
Everything is now hunkydory.
On its face, it is not a justification of Trum,?n because
Byrnes and

the

Washington

Ahead

Byrnes

Octoberl!)o0.

7

.

8

The Commercial and Financial Chronicle

(1292)

.

ical

Run-down Farms

La Salle

Escape

NSTA

Notes

ROGER W. BABSON

would not be investment but

move

In view of the Korean situation

wish

which

to

have

I

some

live

who

those

for

written

not

advice
given before. It is

repeat

self-

small

in

sustaining
cities

or

rural

communities.

Rather, I am
writing for
in

those
New

York,

Chicago,
Philadelphia,
Detroit,
Los

Missed many of you last week at the
Beach when I gave two reports.

now.

C 1

eve

11 i

a

St.

land,
m o

re,

Louis,

investment any

some

of

one

Such

relatives

or

come,

some

one

II cities may

or

of these

more

suffer

terrible loss

a

of life.

West

are

have

nothing to fear. You

for

Farms

This

has

similar safe,

some

and

is

attractive

productive

sections.

Readers

The

tives

for

those

herited

such

on

has

been

building

a

from

people
farm.

Harold

as

also

for

I believe that

120

buy
20

few of such

a

to

miles

60

each

should

house

be

an

be

|

1320 du Pont

have

and

several

which

building

for

use

nearby

could

we

brick

offices

homes

house

a

in

limited

number of executives. We believe

that

many

business

more

and

War

bombed.
not

Old

the

maintain

cities

should

do

the

10:00

way

a.m.

our

not

plant

provide

or

an

6:00 p.m.
7:30 p.m.

COMING

our

to

which

the

employees could

families
move.

These

are

from

our

Emergency Plant at New

ton,
be

one

of

Bos¬

covered

with

a

horse

and

wagon if no gasoline is available!

Such

farm

houses

with all modern conveniences and
be bought for one-quarter of
to

build them

today.

In

Investment

The authorities
be

tell

me

one

that

should

to
be

about 60 miles away from
any of
the above big cities. It also is im¬

portant to be in

locality where

a

there is
a
bountiful
supply of
water, food and fuel which makes
it independent of railroad trans¬

rules out

good

for
not

are

prefer
land*

a

This
many

last

requirement
places which are

summer

residences

self-contained.
small

which—in

acreage

Oct. 12,

1950

(Dallas, Tex.)

I

umbus

emergency—
could support a
family. If it now
has a house on it, so much the
better.
I

that property in these
large cities will decline in price
and small
surrounding farms will
am

in

price

until

peace




is

Pictures

—

available

on

a

memoran¬

Coal

Co.

Engineering Company

Analysis

—

is

Alden

Glen

Bond,

—

Richman

&

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

Boatride and luncheon at Quarterdeck Club.
Cocktails.
Banquet—Guest Speaker.

understood that

It is

wood Club.

Nov.

send

to

3-4, 1950

Florida
ciation

Wells-Gardner

&

Bulletin—Rogers

&

120

South

interested

Security Dealers Asso¬
Meeting at the

1950

America's
Prices

Hotel.

(Hollywood

Fla.)

of

Gold

Losses

Foreign

and

the

Securities

—

the

Holly¬

Dec. 8, 1950
New York

Security Dealers As¬

sociation Silver
ner

at

Department
Review

Anniversary Din¬

Investment Dealers Association
of Canada Annual Convention.

Gude, Winmill
Gude,

Winmill

&

Co.,

1

admit
W.

Dorothy

Duffey,

B.

Wall

Exchange,

brief

Television

W.

Bulletin

Baker,
Building,

—

Buhl

&

Company—

Protection—Industries

companies
&

— Analysis—DelaDelafield, 14 Wall Street,

New York

of

resumes

brochure
26

♦

Bank of

Analysis

York

The

—

First

Over-the-Counter Index—Book¬

5, N. Y.

Wash.

Northwest

Building,

Broad

showing an up-to-date com¬
between the thirty listed

five

Averages and the thirtyover-the-counter
industrial

Co.,
4,

Co.—Memo¬

&

Stern,
30
Street, New York 4, N. Y.

Eastern

Parker

&

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

Also
randum

available
on

Chronicle)

HENDERSONVILLE,
Ronald

A. Beaton has

sociated

with

N.

C.

become

Merrill

—

as¬

Lynch,

Pierce, Fenner & Beane.

With McKee & Jaeckels
(Special to The Financial Chronicle)

MANITOWOC, WIS. —Thomas
B. Inglis is now associated with
McKee
&
Jaeckels, Inc., Irving
Zuelke

Building, Appleton, Wis.
formerly with Aim &
Company of Oshkosh.
He

was

Joins Draper,

is

Scoville

a

memo¬

Sears Co.

(Special to The Financial Chronicle)

BOSTON, Mass.
Corp.—Memorandum—

Auchincloss,
52

Seattle

*

Cluett, Peabody &

parison

industrial stocks used in the Dow-

New

Bates Manufacturing Co.—Mem¬

Exchange

has become

Lynch

(Special to The Financial

Boston

100 Broadway,

orandum—Pacific

Co.

the

*

America, N. T. & S; A.

Corporation,

5, N. Y.

Oil Well Equipment Companies

let

companies.—

♦

&

with

formerly with

with

Lynch, Pierce, Fenner &
Beane, 70 Pine Street, New York
5, N. Y.

—

field

Equities

Salomon,

Joins Merrill

Pic¬

Motion

-

Merrill

Street, Chicago 4, 111.

Winmill, Jones

Josephine

-

Manufactur¬
stocks used in the National Quo¬
Phyllis B. Tremaine to tation Bureau
Averages, both as ing Co.
limited partnership on Oct. 11.
to yield and market performance
International Minerals & Chem¬

Austin and

Inc.,
Chi¬

Foreign De¬
partment of UNO Equities, Inc.,
30 Pine Street, New York City.

Street, New York 4, N. Y.

Radio

randum—Herzfeld

Street, New York City, members
of the New York Stock

S.

Sutro Brothers

eleven-year peribd—Na¬
Quotation Bureau, Inc., 46

—

—Analysis—Bache & Co., 36 Wall
Street, New York 5, N. Y.

Admit

Front

Hicks & Price, 231 South La Salle

and

11-14, 1951
(Jasper Park
Lodge, Alberta, Canada)

Viola

Business

special reference to
Crowley-Milner, Gimbel Brothers,

Inflation

Roof)

June

will

Store

with

the Waldorf Astoria Hotel

Starlight

W.

an

tures—Illustrated

and Marshall Field

(New York City)

over

tional

roeder, Inc., 30 Broad Street, New

mves+ment Bankers Association
at

—

&

Co.,
Detroit 26, Mich.

firms mentioned will be pleased
parties the following literature:

York 4, N. Y.

Convention

Company

associated

Annual

26-Dec. 1,

Salle

the

Analysis—Arnhold and S. BleichMov.

La

Company—

Tracy,
Street,

3, 111.

Simonds

(Miami, Fla.)

MacFadden-Deauville

sure

increase

Brothers

With UNO

Day Outing at the North-

fertile

an

Y.—

Recommendations and Literature

Dallas Bond Club Annual Col¬

but

Hence,
of

N.

Yankee Fibre Tile Manufactur¬

Away?

absolutely safe

portation.

Election of Officers.

Field

wood Beach Hotel
Far

Monticello,

70 Pine Street. New York 5,

Also

ing

Annual
How

of

Bulletin—Newburger & Company,
1342 Walnut Street, Philadelphia

dum

EVENTS

can

what it would cost

Control—Analysia
&
Co.,
148
State
Street, Boston 9, Mass.

cago

well-built

are

—

U. S. Thermo

Wellman

to three miles from

distance which could easily

a

Memorandum

7, Pa.

con¬

only this. Hence, I have
picking up some old farm

been

houses

Sight¬

Dealer-Broker Investment

tent to do

—

Co., 488 Madison Ave¬
New York 22, N. Y.

Warner

afternoon is open for:

emergency

I, however, have not been

Steel

—Raymond

Meeting of entire group.

Dance.

offices.

emergency,

Film

Selection of 1951 Convention City.
12:00 p.m.

summer places to which
they per¬
sonally could flee, but such places

do

Fox

Final Business Meeting.

clients. Most employers have

to

:S.

nue,

Saturday, Nov. 4—

thing.

and

it

owe

-

N. Y.

versity of Miami Football Game.

buy

customers

same

all

Century

Meeting of Board of Directors.
The

in each of these vulnerable

We

U.

Bus leaves for Georgetown University versus Uni¬

refuge, should be protected in this
by their employers. Time to
buy such farms is now.

&

Bos¬

Roberts &

pany,

^9:00 a.m. to 11:00 a.m. Registration.

it

of

Lerner

Square,

9, Mass.

Village

5:30 p.m.

places

10 Post Office

Company—
—

Building, Miami.

7:00 p.m.

such

memorandum

Twentieth

Annual

employees,
to

,

Cement

Bulletin—Paul Frederick & Com¬

con¬

cerns

Riverside

Street,

Southern

on

&
Co.,
50
Broadway, New York 4, N. Y.

Broadway, New York 5, N.Y.

cities

money

Broad

Also available

Sylvania Electric Products, Inc.

Friday, Nov. 3—

four

When

above

25

4, N. Y.

—Analysis—Dreyfus

swimming, golf.
seeing and shopping for the ladies.
Cocktail-Buffet.

III.

the

Co.—Memorandum—

Co.,

Railway Co.

Program scheduled is as follows:

a.m.

of

Phila¬

Street,

memorandum

a

Advertising Committee

including the ticket to the game will be $5.00 per person.
Registration fee and $5.00 for football ticket should be mailed
with reservation as soon as possible to B. J. Van Ingen & Co.,

11:00

some

&

New York

ton

The football game and transportation to and from the

urday night.

a.m.

World

Oil

Pure

Hirsch

Co.,

Chairman

SMITH,

Hotel

9:30

a

Broad

N. Y.

kit¬

comes

South

123

Corp—Analysis—H. Hentz & Co.,
60 Beaver Street,
New York 4,

1950

I repeat:
Whatever hap¬
in Korea, there someday will

pens

Corp.—Memo¬

Steel

delphia 9, Pa.

Card

$15.00 per person and includes the cocktail-buffet Friday evening,
boat trip and luncheon Saturday, cocktail party and banquet Sat¬

their

in

—

Newport

randum—Penington, Colket & Co.,

pleasing and help¬

furnished

could

re¬

&

Beach, Fla., Nov. 3 and 4. Special rates have been obtained of $5.00
single rooms and $8 for double rooms. The registration fee is

plant. These farms should be fair¬

They

Ward—Brief

Haupt

Co.,
Ill
Broadway, New York 6, N. Y.

for

farms

ly close together; they should be
expected to pay only enough to
compensate for maintenance and

Memoran¬

Meeting of the Florida Security Dealers
Association will be held at the MacFadden-Deauville Hotel, Miami
The

key

of

—

Staats

R.

Montgomery
view—Ira

FLORIDA SECURITY DEALERS ASSOCIATION

corporations

more

most

B.

Company

Co., 640
Spring Street, Los Angeles
14, Calif.

can you

were

NSTA

in¬

or

their

Aircraft

committee and their

your

Pershing & Co.

an

but

who

old

regional associations giv¬

our

gratifying,

members

execu¬

saved

memo¬

a

South

is

summer

employees and families.

be

an

of

HAROLD

nest egg. This,
appeal that medi¬
um-sized corporations provide not
only for their owners and the

will

could

gross

So long and good luck!

modest

a

however, is

We bought
we

so

commuting distance,
have

Kellogg

dum—William

ful.

B. Smith

would

useful

who

branch here at New Boston, N. H.
use in case of World War III.

which

in

project what co¬
operation of all of our 29 affiliates would mean
in the way of an enlarged treasury bank bal¬

chen).
ganization

11

ing real support to

a

emergency — take care of
families
(with one central

for

Also we are
business.
done by Philadel¬

were

over

It's been fun ad libbing and,the comments

employers and

within

so

Done

basic

year.

year

probably
disappointment.
Such

are

homes

or

living

a

in

very thankful. With the above in¬

What I Have

last

results

recommendation

a

experiment

taxes.

For sometime my Statistical Or¬

against four last

With

Insurance

as

not

try to get

who live in such places should be

troduction I will sail ahead.

their

phia, Cleveland and San Francisco affiliates.
Quotas were exceeded greatly with corporate
advertising.

excellent in¬

an

that educated young or old

within

safest in time of war" of any part
S. Probably every state

it

exceeded

ance?

should

of the U.

a

time

same

affiliates

Outstanding jobs

family

a

spent

is
policy.

surance

in

are

24%

on a city job
times as much
on this farm—but
employees who work in a

of peace and

in time

as

three

pay

large city,

especially fortunate and

"the richest

ingly,
about

if expended

business,

Readers who live in the Central

in¬

give

interesting points of the reports

11

investment.

an

Convention at Virginia

quotas, and will participate financially accord¬

than

an

would

energy

would
as

that

were

an

more

existence. The

meager

and

end

has

reader

every

farm

a

farms

friends. When World War III does

purchase

wholly dependent thereon only

Boston,

ton, D. C. In
these cities almost

The

is

policy

surance

Pittsburgh,
and Washing¬

Roger W. Babson

Russia.

of such need not be considered

Angeles,

B

with

made

is

Lockheed

on

LIBBING

The most

I

Stores—

Corp.
AD

excellent insurance

an

Department

available

Also
randum

located in large metropolitan areas make arrangements
shift to country districts, in event World War III comes.

policy. Concludes time to buy run-down farms is

Street, Chicago 4, 111.

Memorandum—Shearson, Hammill
& Co., 14 Wall Street. New York
5, N. Y.

persons

Says

Memorandum—Keb-

—

Interstate

Repeating previous advice, Mr. Babson recommends firms and
for

Corp.

bon, McCormick & Co., 231 South

As Bombing
By

Thursday, October 5, 1950

.

.

McDonald

Draper,

has

Sears

—

Cornelius L.

joined the staff of
&
Co., 53
State

Street, members of the New York
and
was

Boston

Stock

formerly

Warner

Homsey

&

Exchanges. He
with
J.
Arthur

Co., Inc. and du Pont,

Co.

Volume 172

Number 4948

.

.

The Commercial and Financial Chronicle

.

(1293)

i

prices.

Reduce Social

Security Cost
By Subsidizing Employers

1940 and
1949,
prices
of
consumer
increased by about 70%,

the

average pension paid under
old-age and survivors insur¬
plan increased about 15%.

the

ance

usual

of 62

the

trouble

of retirement has been

age

63

or

competition

74%

If

rapidly. In 1890 about
of the males of 65 years of

with

employers

younger

Yakima that will permit immedi¬
ate execution of orders, fast quo¬

be

slowly

to

and

men.

age.

in

were

the

labor force. At

dropped

The drop in

:
~

usual

i'
Fewer Jobs

'Would

not

encouraging
em¬
retain
more
older

retirement has

ployers

to

occurred;at

workers

simply

the volition of

for younger workers?
ment

ployees.
who

in

*

health

usually prefer
their customary

dt

employment

Men

are

good

Prof. S. H. Slichter

-

jobs to retirement, even on liberal
pensions. The great majority of
who retire of their

men

lition

do

The

because

so

loss

own

of ill

vo¬

health.

of

production from
retirements is one of

premature

the size of the labor force.
size

the

population

of

65

of age could be raised to the

years

ratio of 1890,
about

employment would be

1.5 million larger than it is

and the national

about

$5

product would be

billion

a

it

from

raising the usual

is.

This

larger

year

than

gain

in

output

age

of

to

about

million

59

paid

retired

to

pensions

A

Subsidy

Plan

can

employers
couraged from retiring
still

are

capable

considerable

prefer
plan

work

to

retire?

A

be

be

dis¬
who

men

producing
and

rather

simple

wTould

ployer

of

amount

a

who

than

to

and

effective

give

to

the

em¬

subsidy for each worker
he retains beyond the age of 65.

The
or

a

subsidy might be one-fourth

one-fifth

of

the

annual

ings of the worker.
of

workers

would
and

would

be

not

of 65

pension

scheme,
employed
drawing pensions.

who

men

age

to the old age

money

survivors'

since

earn¬

The retention

beyond the

save

Hence,

the

should

be

were

cost

paid

of

subsidies

the

to

increases

1,000,000

a

by about 600,000
year.
Output per

in

and

in productivity

creases

that

way

supply

in¬

the

in such a
rises at

employment

about the same rate that the labor

other

In

this

plan would probably be about the
same

the cost of pensions alone

as

under

plan that gave the em¬
ployer no incentive to keep work¬
ers

sion

a

beyond the age of 65. A
plan that discouraged

retirement of

capable
because

the

of

and

were

the
still

it

producing would be
the entire community
would

eliminate

loss

present

caused

who

pen¬

of

for

good

men

raise

the

most

of

output
retirements

by premature

would

consumption

the

of

country by several billion
dollars a year. In addition, a pen¬
sion

plan that gave employers

incentive to employ
the

age

men

tute,

before

an

the

address
American

Chicago, 111., Oct. 2,

men

by Professor
Meat

1950.




that

Insti¬

period.

For

will

be

that

event

made

the

only

in

consumers'

since June

1950

or

since

the

last annual adjustment.

country

seems

to

Since the
prefer policies

a

slow rise in the price

force

from

retirement
back

the

rise

a

would

rise

new
supply
employed.

in

situated

York, and among
those which

are

Seattle

E.

in

Yakima, in
Building.
This

Larson

than

firm

in

Yakima

decade.

a

in

The

The Yakima

office will include Alan C. Ewing
and Carl T. Knapp.
Mr.

Ewing is

Bellingham.

Yaiur.office

equipped

witn

various

„

\vhl

labor

ima, attended local schools, grad¬ staff of research experts located
uated -• from
the
University of in New York, San Francisco arid
Washington, - - and- . spent several Los Angeles, and periodicals.
years..in .the A-ir Force'during the.
war..-During: the pastcyear. he has
Gibbs & Coe Formed
.

,

been

associated

office-1 of

with

the

Seattle

Walston,, Hoffman

Goodwin 'and

is

registered

a

&

;

rep¬

Vv:'<V v'"*; v'- I •'?/
Associated .with Mr."Ewing will

be

Mr..

Knapp.,

Carter Hanna

associated with General Elec¬

Company
years,

business

ing the

in

in

Portland

for

was
in the finance
Wenatchee, and dur¬
Civilian Property

war was

Officer

associated

cific Car &

with

the

Pa¬

Opens

BURBANK, Ohio —Carter M.
engaging in a securities

.

Hanna is

business.

Vernon

Wright is

the

Charles G. Kuhn Opens

will

be

office

secretary.

(Special to The Financial Chronicle)

CLEVELAND, Ohio — Charles
G. Kuhn is engaging in a securi¬
ties business from offices at West

25th Street & Lorain Avenue.

to

an

The

be

in

policy.

affect

stimulate

to

employment.

that

agrees

the

ac¬

If

Consumers Power Company

a

public

volume

an

Common Stock
(without

in¬

bit

more

or

than

policies

value)

can

of

their

recent

SUBSCRIPTION OFFER

in¬

can encourage

they

par

Everyone

spending—
they can either discourage the
tendency of men to spend a little
comes,

solicitation of an offer to buy any of these Shares.

quite rapidly under

occur

modified

nor a

510,470 Shares

circumstances that produced an
appreciable rise in unemployment,
public policies would undoubtedly
crease

offer to sell

offer is made only by the Prospectus.

increased

public

by

This announcement is neither

this

mailing to its stockholders of record at
evidencing the right
share for 510,470 shares of Common Stock of

Consumers Power Company is

the close of business on October 3,1950 Warrants

tendency.
public
Furthermore,
policies are likely to be affected
by the volume of employment and

to subscribe at

unemployment.

Warrants expire at 3

The

larger

$28.00

the Company as set

the

a

forth in the Prospectus dated October 3,1950. The
P.M., Eastern Standard Time, October 19, 1950.

volume

of
unemployment,
the
vigorous and persistent are

more

likely to be the efforts to stimu¬
late

increase

an

system,
to

employment.

therefore, is likely to be
the
makers
of
public

entered into an agreement with the Company
undersigned will organize the activities of securities
dealers in obtaining subscriptions for the shares of Common Stock.
Such Soliciting Dealers may, under certain conditions, offer and sell
shares of Common Stock as more fully set forth in the Prospectus.
The undersigned has

cause

cause
a

in

incentive pension

an

to

raise

them to

their

whereby the

sights—to

endeavor to create

larger volume

of employment.
if the labor force,

In other words,

a result of an incentive pension
system, has 65.5 million members

as

rather
one

than

may

million

64

for

1.5

million

otherwise
for

this

more

would

do.

conclusion

main determinant of

will

be

members,

expect that public policy

will endeavor to create

the

demand

a

jobs than it
The

is

reason

that

the

Copies of the Prospectus may be obtained from the undersigned only in States
which the undersigned is legally authorized to act as a dealer in securities
and in which such Prospectus may be legally distributed.

public policy

volume

of

un¬

employment.
Problem

of

MORGAN STANLEY & CO.

Maintaining

Purchasing Power
A

problem that has become of

great importance in recent months
is the problem of how to main¬
tain the purchasing power of pen¬
sions

during

a

period

of

rising

October L

1950.

asso¬

ciated with him.

Foundry Company at

During the past four
he operated Knapp's, Inc. in

Yakima

&

(Special to The Financial Chronicle)

Renton.
years

Mass.—Gibbs

at 119 Monadnock Road to engage
in a securities business.

Mr.

Knapp at¬
tended the University of Oregon,
tric

(Special to The Financial Chronicle)

WORCESTER,

Coe has been formed with offices

resentative.

until the
had been

of

be

statistical

manuals, corporation reports pre¬
pared
by
the company's large

native of Yak¬

a

and

hold

to

are

in

Exchange

A.

more

of their benefits.

of

age

tend

wages

of

Absorption

the

in

from

will be the first New York Stock

office,

highly probable, it is only Yakima. He is well known in the
fair that the old-age and survivors community and is well versed in
insurance plan protect pensioners investment and brokerage busi¬
Mrs.
Robert
Heath
of
against a drop in the purchasing ness.
power

New

words,

force
(subject to cyclical
fluctuations)
remains employed.
The gain in the size of the labor

an

of 65 would improve the

♦Summary of

during

open

Hoffman & Goodwin
in
1930, has three

its 32 offices

opened

be

p.m.

founded

offices in

Walston,

will
5:00

labor

beyond

employment opportunities of

Slichter

living

to

proportion of the

same

policy

under

32nd

—

has

level

sions

subsidies

than the

price index

The

Wages adjust themselves to these

.

and

more

consumer

Goodwin

was

v

tardy.

that make

The effect of

the

being

since 1940. The adjustment of pen¬
sions to this rise has been very

manhour also increases each year.

old-age
and survivors' pension plan.
The total money costs of pen¬

by

little bit

a

in the

rise in the usual age of retirement

workers.

now

5%

were

How

benefits

or

it

ent

re¬

now

the

crease

more

celerated

the

automatically, increased
as prices rise.
Recent changes in
the Social Security Act will in¬
are

price index has risen by at least

supply of labor might also be

all

in

of labor is rising
less constantly. At pres¬

tirement would be far larger than
of

pen¬

The supply

the

cost

steps

Wash.

&

a.m.

Philadelphia, Pitts¬
burgh, Hartford, San Francisco,
Los Angeles, Oakland, Portland,

the

1910

the

to

sions

that

see

their
the

1950.

about

over

slowly rising price level,

should be taken to

YAKIMA,
Hoffman

and market news.

office

Walston,

New Branch in Yakima

in

featherbed

or

prevented.

world

7:00

Walston, Hoffman Opens

nine

increases.

If the ratio of em¬
ployed workers of 65 years of age

the

grows.

— ,

The

justments

force

in the country.

on

It increased from about 35 million

employment

Mr.

tations and the latest information

was

of

11.

direct pri¬

a

Walston, Hoffman

Edmonds.

administrative simplicity it might
be desirable to provide that ad¬

volume

increases

rules of all the unions

As the

of the labor force grows,

principal wastes in the econ¬
omy.
Indeed, the loss of output
from
premature
retirements
is
greater than the loss from all the

the

be

base and benefit payments by the
amount of the rise in the cost of

is :"No."

em

prices

no strong
country that

the

The volume of employ¬
adjusts itself to changes in

lo yers,

p

not

The

Oct.

on

vate wire from

commodities.

acquire the Exchange mem¬
bership of the late William E.

The

wages.

to feel

seem

from

If the country is going to have
a

P. Schmeil

will

taxes,
spending,

on

over

answer

fewer jobs

mean

nership

in

SocialSecurity Act
should be promptly amended to
revise once a year both the tax

of

e m

-

rising

rise

For Younger Men

of

age

taxes

controls

This is
Would Not Mean
/

increases

paid to pensioners by about 77%.

to

less than 50%.
'

the country evidently
slowly rising price level

demand

proportion has

'•

level

of
a

politicians

a

more

price

the

particularly

present the

or

the

upward for some
At any rate, the

come.

substantial

subsidy for keeping men beyond
the age of 65, they would be much
more
willing to hire men who
were
slightly below 65 years of

age

of

steps necessary to prevent
it, such as strict controls on credit,

able to obtain

were

Exchange stocks and

Schmeil

obtaining employment in

dropping

securities and

& Goodwin's Wall Street Office to

to

who often have

64

or

Stock

other

to part¬

prefer

only reduce pension costs, but would also keep up
employment of younger men.
Recommends cost-of-living
basis for pensions.
years

York

will admit B.

movement

years

would not

60

Admit
Carlisle &

The office will have

people

last

equipped
with
a
stock
quotation board carrying quota¬
tions on approximately 150 New

Jacquelin, 120 Broad¬
way, New York City, members of
the New York Stock Exchange,

will

University Professor, Harvard University

calling attention to rising costs of social insurance due to
earKer-age retirements, Dr. Slichter advocates encouraging employers to retain older workers through subsidies. Says this

the

com¬

pletely

the

In

During

The Yakima office will be.

Jacquelin

The quickening conflict with Rus¬
sia makes it highly probable that

By SUMNER H. SLICHTER*

'

Carlisle

the

goods

To Retain Older Workers
Lamont

Between

when

9

in

i

10

The Commercial and Financial Chronicle

(1294)

.

Thursday, October 5, 1950

.

.

V

Pittsburgh Rwys. Distribution
Distribution of over $17,000,000
In

centificates

interim

and

cash

and

cates

Exporting and foreign market¬

tificates

cer¬

transferable and

are

gotiable

stock

temporary

and

ne¬

actively

being

are

representing new bonds and stock
traded, as are the new bonds, the
"in"
the
reorganized
Pittsburgh
latter on a "when issued" basis.
Railways Co. system began last
Philadelphia
Company, which
Monday in conformance with an
formerly
controlled
Pittsburgh
order issued
by Federal Judge
Railways Co. through 100% stock
Owen
M.
Burns
of Pittsburgh.
ownership, is scheduled to re¬
The action validates the revised

•reorganization plan adopted over
e year
ago and which has been
subsequently approved
by Se¬
curities and Exchange Commis¬
sion,
the
Pennsylvania
Public
Utility Commission and the firm's

of the

ceive 50.9%

of

satisfaction

in

stock

common

company

new

However, Philadelphia

its claims.

Company is under SEC order to
divest itself of its traction com¬

holdings.
Thus,
in
due
its interest in the new
Pittsburgh Railways Co. must be
creditors.
liquidated. Many financial anal¬
Capitalization of the new com¬ ysts believe the most logical av¬
pany will consist of $6,000,000, or enue of disposal is by sale and
less, of 5% first mortgage bonds the most logical buyer is the City
and 1,076,096 shares of common of
Pittsburgh.
Indicated
book
stock.
Outstanding car trust cer¬ value of the new common stock
tificates are undisturbed. Decem¬ is about $37 per share.
ber 31 has been set as the effec¬
*
*
*
tive date of

will

Thus

and

claims

whose

companies

cross-claims, individual securities

sub¬

leases,

contracts,

issues,

in reconciling

problems

with

rights

contractual

feasible

procedure.
Present holders

of former "un¬

Pennsylvania Utility Com¬
mission postponed, from Sept. 14
to Dec. 14, the effective date of
an
increase
in
fares
originally

will have no tax¬

isting fares it

Whether

1950.

for

income

able

the basis of ex¬

on

operations for the year will be in
the black will depend upon traf¬

guaranteed" bonds of the system fic during the last half
receiving $500 in cash and amount
of
anticipated

and the
Federal

Certifi¬

Bond

Interim

in

temporary stock cer¬
tificates for the number of shares

cates

plus

the

At

plan.

scheduled

under

later date

the Interim Bond Cer¬

will

tificates

bonds

new

amount of

small

the

exchanged

be

and

probably

for

some

additional cash,

depending

latter

upon

a

tions

were

suspended

by

crip¬

a

pling 10-day strike.
schedule

The

examina¬

under

tion seeks to raise the present 10-

It

to 13 cents, or two

for 25

cents, with certain

in transfer charges.
possible that a final order
be forthcoming from the

is

may

Wilbur-Suchard Chocolate
American Pulley

General Manifold & Printing

HERBERT H. BLIZZARD & CO.
STREET

LOcust 7-6619

Adding to the troubled outlook
this week

the announcement

was

different

The union will seek

next Feb. 1.

higher wages on the basis of inT
creased living costs.
The com¬
capacity

to

be¬

pay,

Pennsylvania Water

negotiations

bogged down with
that

sues

cussed

& Power Co.

ing

Common Stock

said.

Free of Penna. Personal Property Tax

and'selling close to its 1932 low.

.

not

a

time

and

has

al¬

in

and

in the previous

hours
of

working

and

our

con¬

We

members.

are

finance committee for PTC."

such
the

1952

Lippincott Units
Co., Common

Transportation Co.
Issues

Central RR. of N. J. Int. Ctfs.

and

trademarks

them."

Counsel

for

consent

a

of

said

but

law

entered

company

violation

admit

not

the

any

the

in

did
anti¬

company

"spirit of

a

cooperation with the government."
L.

Batt,

stated

dent,
most
that

Allentown

SKF

the

continue

well

40

years.

It

that

recently announced

was

company's productive facil¬
ities at its ball-bearing and roller
plant

be expanded

will

here

of

construction

providing

addition

an

than 40,000 square

more

feet of floor

by

N. Y. Phone
COrtlandt 7-6814

any
car

American railway
manufacturer.

Stock

$22

Splits

four

was

&

prior

consent

The contemplated

two-for-one split will bring pres¬

officials, "make the
readily marketable."

of

in

the

reflects

Philco's
1940

to

for Oct.

17, 24, 31 and Nov.

They will be held in the audi¬

Joining in this year's spon¬

store.

sorship

Association of
Firms,
Invest¬

the

are

Stock

Exchange

ment

Bankers

and

Association

Association

National

the

Wanamaker

John

the

of

of

Se¬

curities Dealers.

lecture series
Hopkinson,

the

at

Speakers
will

Edward

include

been
an

Treasurer, Bell Telephone Co. of

on

num¬

William Balder-

President, said the
the
growth
in
$52,311,000

in

Penna.;

Boyer,
Smith,
Laboratories; E.

Francis

Kline

French

&

S.

Banks, financial editor, the
Philadelphia "Inquirer,"
and J.

A.

editor,

financial

Livingston,

the

Philadelphia

$300,000,000

estimated

an

held

under

Jr., partner, Drexel & Co.; Courtnay Pitt, Vice-President-finance,
Philco
Corp.;
R.
S.
Tannehill,
Vice-President,
Secretary
and

shares from 2,500,-

from

sales

stock
meet¬

has
vote

to

authorized

5,000,000.

company

step

in

28

Nov.

common

to

ston,

Corp.

Philco
for

increase

000

stockholders'

special

ing

theme

Commerce, has been sched¬

ber of

000,000 common shares and have
approved giving directors power
to issue any or all of authorized
but unissued shares at any time

called

"Evening

Bul¬

letin."

1950.

Director

*

*

Stores

Co., through Lehman
Brothers, has concluded arrange¬
ments for the sale to an insurance

in

$10,000,000

of

colmpany

Half

notes.

3%

will

amount

the

be

purchased prior to Dec. 31, 1950;
the remainder any time prior to
June

The financing is
sim¬
privately in 1947.
mature Aug.
1, 1967,

1951.

30,

in addition
ilar

to $15,000,000 in

notes

amortization pro¬
beginning
Aug.
4,
1954,

subject

to

gram

•■t

an

principal amount.

in

far

1950,

its

reduced

debentures by

Pittston

Co.

and

col¬

income

approximately $1,-

Totals

500,000.

outstanding

now

$4,669,000 and $1,712,000,

are

fund

*

$500,000 building in
about
May,
1951.

two-story

structure,

Next

payments

total about

re¬

sinking
expected to

year's

are

com¬

100,000
square
feet
of
floor space will house district of¬
prising

fices,

distribution center and a

a

retail

store.
*'

Aetna

Standard

-

Engineering

manufacturing plants
are located at
Warren, Ohio, and
Ellwood City, Pa., is moving its

J.

Arthur

Warner

whose

Co.,

offices

and

engineer¬

from Youngsto Ellwood City and Pitts¬

J.

Warner

Arthur

elected

a

been

Eastern

Corporation, Bal¬

Steel

Stainless

has
of

director

departments

town

outstanding

bonds

trust

lateral

new

Philadelphia

executive

Pittston Reduces Debt

has

a

cupy

The

ing

Thus

- *

■

The B. F. Goodrich Co. will oc¬

sold

notes

timore, Md.

burgh.
*

*

PHILADELPHIA

*

—

The

Phila¬

Co.
and
Motor Parts Co., together holding
exclusive
distributing rights for
delphia

Servel

Works

Gas

gas

refrigerators in Phila¬

delphia and 14 nearby Pennsyl¬
counties, have been charged
with violating the Sherman AntiTrust Law by conspiring
to fix

H. W. Armington

Co.

(Special to The Financial Chronicle)

BOSTON,
Armington

Mass.

has

Armington &
79 Milk Street

—

Henry

W.

H.

W.

formed

Co. with offices at
to engage

in

a

curities business. He
with Amott,

was

formerly

Baker & Co., Inc.

Stockholder's Suit Fizzles
PHILADELPHIA

John

1948,

shares

100

—

On

Kroese,

E.

the

of

eral

Sept. 9,

holder of

100,000

out¬

Active

Steel

Castings Corp. filed
compel the company to
pay
preferred stockholders $5,850,000 in accumulated dividends.
Mr. Kroese alleged that the com¬
suit

Trading Markets

to

withholding the
its

expand
of

its

facilities

common

Maintained in

money

for

MUNICIPALS

the

stockhold¬

EQUIPMENTS

ers.

Last

month,

the

suit

dis¬

was

len

plaintiff. In the meantime, Kroese

ley

granted

Transit

creases

Co.,

which,

will increase
per

year.

Lehigh

Allentown,

it

is

revenues

The basic

schedules

in¬

estimated,
by

zone

$83,000
fare

10 cents remains unchanged.
new

Val¬

became

of

missed

had
of

*

by

about

CORPORATES

the

payments

representing

accumulated

$

$

ar¬

$

Locomotive

road

Indus¬

anti¬

bearings, has consented to
decree

the

half

Cul-

of

STROUD & COMPANY

Orders

Baldwin Locomotive Works has

Consent Decree

anti-trust

dividend

share,

per

The

*

PHILADELPHIA—SKF

an

request

rearages.

effective

tries, Inc., manufacturer of
friction

at the

received

$27

received
SKF

Federal Judge J.

Ganey

entered

in

Co.

an

locomotives,
ceived

•

from

PHILADELPHIA 9

eight diesel-electric

the
the

third
Erie

order
this

re¬

year.

Baldwin also reports an order for
six

Incorporated

order from Erie Rail¬

for

all-service

se¬

vania

$1,000,000.

establishing a
transfers, the Public Utility Com¬
has

of

series

A

the topic of a forum

year

torium

A

Scheduled
—

America"

in

"Invest

that

of

stock.

further developing

lectures,

the

pay

«

Series

Lecture

ized increase from 1,000,000 to 2,-

more

*

Cas¬
the

to

to 100%

up

PHILADELPHIA

uled

pany

for

*

7.

obtaining

14

Aug.

the Reading company's

French Laboratories have author¬

without

under

Co.

of

share

per

and

Accident

offer

the sponsorship
of
the
Philadelphia - Baltimore
Stock Exchange and the
Cham¬

Stockholders of Smith, Kline

of stockholders.

of
by

Insurance

last

*

it

it

90% of the out¬
of American Cas¬
Reading has been

space.

mission

Samuel K. Phillips & Co.
Stock Exchange

passenger

ber of

the

the

with

year

its

States

for

known

to

to

trademark,

favorably

and

benefit

token fare and
2-cent charge for

♦

Packard Bldg. Philadelphia

bana

Brazil, for 51 stainless steel rail¬
way cars, believed to be the larg¬
est order of its kind placed this

590, which, in the opinion of com¬

United

the

in

customers

Vice-President

ently outstanding shares to 1,614,-

was

Co.

latter's

Presi¬

its products

sell

and

under

shall

firm

the

make

the

stipulation

important

Cars

decree's

SKF

that

51

Co., has announced re¬
of an order from SorocaRailway Co. of Sao Paulo,

ceipt

than

acquired

are

reasonably anticipated
export demands, and to sell such
bearings
to
persons
desiring

trust

Coward,

A.

in

carry

Build

to

quantities of bearings

new

ualty

v

Budd

of

needed for

Sept. 17.




out¬
must

company

"manufacture

also

to

Cambridge Bldg. 3s 1953

375

The

abroad.

pany was

*

*

HARRISBURG—By discontinu¬

PH

to devel¬

independent distribution

op

lets

ing the 8%-cent

Teletype

best efforts

More

standing stock

standing preferred shares of Gen¬

year.

union, we should
only with the

as a

*

Phila.-Balt.

its

use

dis¬

discuss¬
losses of the

Fares Increased in

Members

ex¬

bearings in foreign markets

own

table,"

Philadelphia 3, Pa.

Phila.

its

for

of is¬

be

ourselves

concern

wages,
ditions

BOENNING & CO.

"Much

"Actually,

been

score

bargaining

gains

the

a

consumed

been

company
t

the

have

should

never

at

Kaelin
ways

Pratt Read

trademark

and

new

port products and to advertise its

spectively.

"Too often in the past our con¬

tract

Leeds &

H.

judgment requires
a

de¬

ualty
Budd

trade.

to adopt

*

*

to

scheduled to retire 4x/2% annually

Transport

he
lieves, is beside the point.

Leeds & Lippincott 3V2S

consent

the company

was

of the

Workers
Union
(CIO), that the union is
preparing its demands for fur¬
ther wage increases and benefits
to become effective upon the ex¬
piration of its present contract
234,

pany's

!

international

restrain
The

which

of

for

Italian

an

by Andrew J. Kaelin, President of

Bearings Co. of America

*

effect

and

Local

A. B. Farquhar

CHESTNUT

the

firm

All

PUC before Dec. 14.

E. & G. Brooke Iron

1421

Swedish

a

locomotives,

$3,000,000,

a

adjustments

in

about

cost

livery early next year.

of

months

reported

company

tokens

We solicit inquiries

to

Sylvania Electric Products Co.
is building a new plant in War¬
American
Stores to Borrow
profit
ren,
Pa., for the production of
of $236,980 compared with a loss
In order to provide funds for
plastic and plastic-metal parts for
of $1,314,497 in the like 1949 pe¬ additional
facilities
and to
in¬ radio, television and lighting in¬
riod.
In February, 1949, opera¬ crease working capital, American dustries.
1950,

cent cash fare

final accounting.

with

*

six

first

the

For

the

following

available

amount

a

returns.

tax

African

Reading Co. has ordered 20 new
diesel road switching

ing into illegal cartel agreements

William

month

PHILADELPHIA—Last
the

estimates that

of enter¬

accused

was

Dim

aure

$500

SKF

with

leases and guarantees have pre¬
scheduled by Philadelphia Trans¬
cipitated two extensive periods of
portation Co. to have become ef¬
receivership
the
unraveling of
fective last March.
The company
which has posed extremely com¬

plicated

suit.

stock

P. T. C. Hopes

underlying

were the target of
Department's
civil

Justice

pany

from existence

pass

the

course,

consummation.

'component

52

some

general

and

holders

-security

North

Railway.

ing practices

the Interim Bond Certifi¬

Both

from

urday.

Pennsylvania Brevities

French

the

U. S. District Court here last Sat¬

diesel-electrics

ALLENTOWN

•

PITTSBURGH

NEW YORK

SCRANTON

•

LANCASTER

Volume 172

Number 4948

..

The Commercial and Financial Chronicle

.

(1295)

acid

News About Banks

international Monetary

CONSOLIDATIONS

of

CAPITALIZATIONS

ations in currency or securities.

Trust

Company
the

announces

of

appoint¬

the

latest

released

statement

of

the

Predicts "wait-and-see" policy
further up-valuation of

'i,..!

1, depositors num¬
Donald B. Anthony, as a ber
307,228
and
deposits
total
Vice-President, Robert H.» $600,977,733.
*
*
*
Blake as Assistant Manager, ParisJames Waller Hole, a Trust Of¬
office, and
Gerard
Hallock
as
Assistant Treasurer. Mr. Anthony ficer of the Bankers Trust Com¬
Trust

Assistant

Officer

associated

Estate

becomes

now

the

banking

Mr.. Blake

the

de¬

continues

Paris

office, where he
Assistant Secretary. Mr.

has been

Hallock
of the

Real

and

with

partment.
with

also

becomes

officer

an

banking department.
*

The

Board

New

thur

York

J.

has

Morris,

President

appointed

Financial

Ar¬

Vice-

of

bank,

25

will be

Morris

Savings Bank of New York

its

Rockefeller

the

At

with

Trust

Ful-4

for

h

of

the

York,

held

Virginian

elected

been

ad

New

of

for

on

also

Director.,

a

Director

a

Railway,
Mr.

was

when the Fulton Trust Co. merged
with the New York Trust Co. on

Sept. 12,

President

15

over

of

Since the merger

1949.
the

Emigrant

and is

the

Vice-Presi¬

a

York

New

Mr. Morris has been

the

Morris

years

Mr. Morris has been
dent

J.

Trust

Loup
Land

Estate

June, 1941,
Executive,

and

Co.

Trustees.

20, and is repeated for

page

published
thur

not

was

Morris"

J,

of the

referred

"Ar¬
in

to

*

100th

resources-

U.

2,135,910,161

and

from

S.

Govt,

curity

619,939,730

_

864,942,694 1,005,984,915

bills

discounted

662,977,764

580.363 892

36,452,372

34,992,899

of

New

which

York,

Sept.

1850,

30,

HANOVER

COMPANY,

marked

dinner for its
entire per¬
sonnel at the Hotel Biltmore, ac¬
cording to an announcement made
by John T. Madden, President.
Sept.

on

28

Mr.

by

a

officers

trustees,

Madden

the

address

Michael
of

A.

Morrissey,

of

resources-

the

ject,

U.

1,409,518,387

S.

American

Thomas I.

able Life Assurance Society of the
States

and

Govt,

the

also

Emigrant, spoke

a

Surplus

&

on

result

of

51

later.

board

of

trustees

was

composed of 18 merchants and its
was Gregory Dil¬
one

of

the founders

resources-

Deposits
Cash

and

from
S.

Emigrant

century mark, in 1900, deposits
increased to more than $57,089,000
and

represented

88,076

the

depositors.




cur¬

in

Commitments

internal

loans

also

showed only small profit-taking.

What Are the Further Chances

'

of Such Speculations?
At

this

it

moment

seems

not

dollar,

bank¬

American,

would

up to
parity with the U. S. dollar.

Finance Minister Abbott may fol¬
low a
rather prudent policy to

Canada's

pursuing such
lative

in

a

S.

In

policy, the

elements

and

Frank J.

specu¬

city.

;

Mr. Donadio
the

New

and

Strauss

Margin Transactions

Abbott

Purchase of Canadian dol¬
lars for 30, 60 or 90 day delivery
in New York at a premium of Vz
to 1% per month.
(B)

Purchase

Canadian se¬
New
York,

of

listed

in

national

Nickel,

Dome

Mines,

Mines,

ternal

Bra¬

such

3s

of

rency

to

solidify

rate.

the

as

;

•.

..

formerly with
Hanseatic *' Corpu

Bros.

Reopens Branch

hurst
new

periodically by fractions only, if
when

and

the

speculative
fies

such

recent

dollar,

foreign
step.

a

Canada's

inflow

of

justi¬

citizens, in spite of the
of
their

"up-valuation"
are

foreign

non-

capital

yet

not

currencies,

free
or

long

Canadian

as

1959-1956, and

is

not

granted

the

Priscilla

under

the

Seofiold

management

of Thomas C. Darst, Jr.

The Lum-

berton,

has

N.

office

C.

been

closed.

MacDonald-Hoornaert
LOS

ANGELES, Calif .—Don-Id
hold
invest MacDonald and John F. Hoornacri

to

Can¬

ada's

banks advanced about 90% of the

population, the present cur¬
reform
remains
a
noncompleted measure. We will have

purchasing price to the buyer.

to wait

her 3s of 1966-61, for which many

Building,

to

to

Therefore, as
complete liberty of capital

transfers

in

cur¬

He could also raise it

their assets abroad.

Purchase of Canadian "in¬
loans"

v,

was

York

PINEHURST, N. C.—Reynolds
& Co., members of the New York
Ottawa's dollar could take place.
Stock Exchange, announce the re¬
This could spread over a number
of months and would ehable Mr. opening of their branch in Pi.ie-

(A)

curities

Joseph P„

the Trading

"hot

their

Uruguayan
banks

and

Department of J. F. Reilly & Co.,
Inc.,
61
Broadway, New
York

Mexican, Venezuelan
or money" might soon give up their
funds
in
Canadian commitments in Canadian dollars
or
on
special
Canadian or securities, and a more normal
accounts of
international development of the "free rate" of

Swiss,

Ronan

Donadio have joined

the

$0.95.

currency

neighborhood of U.

Joseph F. Donadio

if

as

plan to bring its dollar

Government

have formed

in

gage

a

a

partnership to

en¬

securities business with

offices at 315 West 9th Street.

rency

.

E. C.

for the moment in which

a

McManaway Opens

(Special to The Financial Chronicle)

(3)

Arbitrage

Transactions

freely convertible Canadian dol¬

lar

The

American

speculator

or

becomes

international

acquired

for

"switch-

convertible not

foreigners, but

nationals

as

well.'

only

for Canadian

Only then, the

ASHLAND,

Ohio

—

E.

Manaway is engaging in
ties

business

from

C.

Mc¬

securi¬

a

offices

,

at

Sandusky Street.

378,773,423

hldgs—

402,419,942

432,702,298

15,919,950

TRUST COMPANY, NEW YORK

S.

Loans

savings

According

of
to

to

buy,

be considered

any

or an

means

pffer to buy,

or a

solicitation

of the Prospectus;

American-Canadian Uranium Co., Inc.

■

Common Stock

311,956,317

342,544,894

436,218,284

486,150,266

405.488,334

14,764,650

14,113,398

($.10 PAR VALUE)

se¬

hldgs.„
biUs

prof.

Price $3.50 Per Share
EXCHANGE

PANY,

BANK

NEW

TRUST

COM¬

YORK

Sept. 30,'50 June 30,'50
$
Total

resources

'

795,925,689 792,224,893

Deposits

745,405,655 742.473,531

Cash and due

Loans &

Copies of the Prospectus

may

be obtained within

any state

from such dealers

regularly distribute the Prospectus within such state.

from

banks

227,588,047

216,565,724

U. S. Govt, security

holdings

-

500,000 shares

1,205,513,499

310,751,144

discounted

CORN

;

OCTOBER 3, 1950

NEW ISSUE

due

Govt,

and

offering of these Securities for sale,

June 30, '50

$

1,207,324,358

banks—

Undivided

an

of such Securities. The offer is made only by

1,060,832,938 1,068,961,562

and

curity

to

15,081,250

$

U.

offer

480,140,109

prof.

resources-

from

circumstances
an

511,288,433

535,862,281

—

Deposits
Cash

of

bills

and

Sept. 30, '50

Total

no

se¬

discounted

IRVING

This is under

due

banks—

Govt,

curity

S

1,533,839,422 1,552,253,850
1,377,983,667 1,390,485,051

of the

Society.
Twenty
depositors entrusted a
total of
$3,009 to the new bank the first
day it was opened for business.
By I860, depositors had grown to
more
than 8,487, while deposits
exceeded $2,172,000.
At the half
Irish

"up-valuation" for

COMPANY,

June 30, '50

the

first President

lon,

TRUST

$
Total

its present main

Its

although they
, additional

small

a

YORK

Sept. 30, '50

by the Irish Emigrant

office at
Chambers Street, five months
of

&

NEW

the

1850, and began operations on the
site

113,243,780

un¬

CHEMICAL BANK

"Tra¬

financial wellbeing of the tides 'of emigrants
flowing into New York in the midnineteenth century, the new bank
received its charter on April 10,
for

Society

649,504,735

422,762,644

113,769,108

—

prof-

Undivided

felt

concern

Ca¬
have

to

full

pounds" in New York in order to

Loans

a

as

526,930,236

520,547,548

bills

and

discounted

trustee

ditions of Thrift."
i Established

388,075,342

j. F. Rtilh &

a

se¬

hldgs._

curity
Loans

U.

of

1,399,854,442

411,363,312

banks—

by

Parkinson President of the Equit¬
United

of

only

in

seemed

deals,

Canadian

of

deposit

or

to

been

operators

currency

following:

Purchase

positions

reasons.

keep

notes

Ronan, Donadio Wilh

unit

have

Canadian

Fully Paid Transactions

(1)

Ca¬

came

the

Canadian

the

on

Government

S

. .

due

and

from

trustee

a

Heritage."

"Our

recent

the

were

(C)

1,562,484,722 1,551,777,211

Deposits
Cash

of
bank, who took for his sub¬
Company and

based

re¬

be

Chairman

the

of

Board

the

News

followed

was

international

and

the

Canadian

•

patterns followed by Amer¬

these

rency

in

TRUST

June 30, '50

$

and

made

and

AND

YORK

Sept. 30, '50
Total

divided

welcome

BANK

NEW

its

opened

was

than

Less

meager.

Mclntyre Porcupine
zilian Traction, etc.

*

*

Emigrant Industrial Savings Bank
doors

results

especially Canadian Pacific, Inter¬

—

prof.

Undivided

the

542,796,848

se¬

hldgs._

and

*

of

2,100,793,828

due

banks.

Loans

$

2,320,044,595 2,271,810,894

Deposits
Cash

*

anniversary

June 30, '50

$

CENTRAL

The

in

Ca¬

-sXY:'-

The

(2)

YORK

Sept. 30, '50

the article.—Editor.]
*

tions.

could

official

currency

maintained,

chance of

in

profits, for
complicated transac¬

very

of

•

the

and

received

was

ican

*

speculations

rather

were

.

.

lost about 6% td 8% in value over
the week-end.
;

the

its

to

securities

offered

dollars

dollar

NEW

that the picture then

reason

been
Franz Pick

MANUFACTURERS TRUST COMPANY,

Total

| The foregoing item appeared
in the "Chronicle" of Sept. 28,
on

Wyoming

Co.

ment Committees of the Board of

the

and

Invest¬

the

nadian

nadian

had

invested

currency

seemed

Most

►

banks with Canadian affiliations.

member of the

a

Real

Creek

the

of

Trustee of

a

since

Co.

Director

and

it

in many kinds
of

I

sfr

gold markets

liquidated with small profits.

is

Coe

the

of

Brooklyn
Union Gas Company, Long Island
Lighting Co.; and Trustee of East
River
Savings Bank, and Vice-

Arthur

been

Farmers

VicePresident, Treasurer and Director

and

President

the

Bank

Oct. 3, William Rogers Coe,

Co.

many

years

Co.

of

City

tracts

of

dollars

:!:

Oct. 2, and on Tuesday, Oct.
3, nearly one-fourth of such con¬

of

millions

often

*

of

Hundreds4

Ottawa's

;

bills disct.

Undivided profits

441,792,953 464,294,184

90,078,003

78,816,164

7,658,428

7,359,706

Continued

on

page

47

\

gan

lar, was rather
disappointed.

4%

regular meeting

Directors

the

office,
Plaza,

commemoration of this year's

a

V

was

Trust

Center

Balzac Centennial.

associated

ton

of

works

exhibit at the East

on

Mr.

t.

the

"Droll Stories" by Honore de Bal¬

in

Madden, Prese n

of

Oc¬

Felix, portrait painter, book
designer and
illustrator
of
the

50th Street and Rockefeller

by John T.

i d

of

month

of

from

have

Liquidation of forward
positions in Canadian dollars be¬

dol¬

S.

freeing

r

standstill.

with

par

ster¬

*

mentioned transactions

l

of

Canada's

the U.

of

*

*

to U. S. $0.95, most of the above-

monetary unit

*

the

dollar

ation"

"up-

an

to

v

many

ed

*

who

expected—
with a heavy decline of prices, o?
gold bars and gold coins, which

and the moderate "up-valu¬

peg,

weeks expect¬

was

Franz

in

for

merger

Si!

the

After
nadian

which

Sept. 21 issue,

The

our

choice

a

River

Sept.

on

in

Throughout

an

announcement

made

to

*

on Monday, Oct. 2. World¬
specula¬

speculators,

acted—as

buy Canadian securities in
ling, in the London market.

$0.95

wide

the

1105.

tober

zac,

ac¬

cording to

at

with

post

Lawyers Trust.
referred

the

of

V

in New York, could only be bought

valuation"

similar

a

on

dollar, which sold

Monday, Oct. 2. World-

on

held

*

Trustees

$0.95

tion,

*

of

at

Sept. 24.
Before the merger on Sept. 18 of
the Lawyers Trust Company with
the Bankers Trust, Mr. Hole had

of New York died

pany

page

Emigrant Industrial Savings Bank

the

The Canadian

of

been

currency
remain
not very attrac¬

Canada's free

July

Second

of

Canadian currency.

bank,

for

better opportunities in Wall Street!
than in Toronto or Montreal.

of Canadian government and doubts

has

meantime, profit chances
exchange speculations

Canada's

tive

Currency expert, analyzing U. S. "hot money" in Canada,
asserts speculators gained negligible results from their
oper¬

and

REVISED

ment

.

currency

rather small and

NEW OFFICERS, ETC.

Guaranty

Ottawa's

foreign

in

Economist

of

be completed.

In the

NEW BRANCHES

New York

test

will

By FRANZ PICK

I

.

.

"Liberation" of Canadian Dollar

11

First International Securities Co., Inc.
50 BROAD STREET

.

NEW YORK 4, N. Y.

as may

831

n

The Commercial and Financial Chronicle

(1296)

Stock and Bond Group

Jules J. Vatable
^

Jules J. Vatable, who

associated

with

H.

Mutual Funds

Co.,

&

Hentz

The

securities

NASD Releases

Clarifying Letter
Association

National

The

of

Dealers, Inc. released
this week the first

Securities

to its members

clarifying letter on the Securities
Exchange
Commission's
Statement of Policy of Aug. 14.
and

your

request

investment dealer, or

from
from

RESEARCH

SECURITIES

&

CORPORATION

120 broadway, new york 5, n. y.

stated that

The clarifying letter

institutional

in

ad¬

newspapers

typically

small,

vertisements

NATIONAL

and

magazines need not, for the time
being, include a statement relat¬
ing to the sales charge, unless the
sales
literature
undertakes
to
give

general description of in¬
companies,
in
which

a

vestment

mention of

case

The

letter

return

percentage

THE LOW

should

ures

of

erature

ad¬

in

used

general sales lit¬
institutional type,

or

an

information

such

since

fig¬

yield

or

be

not

vertisements

PRICED

sales charge, in

a

terms, is suggested.
further noted that

general

can

be

given, under the Statement of
Policy, only with respect to spe¬
cific companies.

STOCK FUND
of

Group Securities, inc.

last.

The

on

request

from your investment dealer

Distributors
63 Wall

Group,Incorporated

Street, New York 5, N. Y.

re¬

was

this
Fund

bond

Canadian

its

listed

follows—$716,000 Ca¬
nadian National Ry. 4V2S, 1951—
$649,000 -Dominion of Canada 3s,

holdings

May

as

nadian

Pacific

3V8S,

Ry.

1970

—

Imperial Oil 3s, 1969—
$94,000 Bell Telephone of Canada
$183,000

3V4S, 1973—$91,000 Bell Telephone
of
Canada
3s,
1977 — $47,000
Shawinigan Water & Power 3V2S,
1970
and
$71,000
Shawinigan
Water & Power 3V2S, 1973.
The
Fund's holdings of Canadian com¬
mon
stocks
included — 30,000

It

greatest

fund's

experience
which

should

assets

shareholder

is

of

the

has

manage¬

be

indeed, to realize that, during this
period of wartime stress on our
in

the

investments

been

years,

consequent

Canada

Technical
Technical

Fund

Files

Fund,

market, his
being managed by
valued
experience
in

gained

peace

years

other

war

and uncertain

How wrong the investor can

-

Inc.,

who

San

on

filed

Francisco,

registration

Sept.

on

28

with

statement

a

manages

the

basis

market

the

of

"rules of thumb"
in

Securities and Exchange Commis¬

ticle of

1945.

sion

covering 680,375 shares of $1

larly timely

par

value

sold

at

price
value

market

rities.
nical

The

of

or,

now,

a

is

well-

"Brevits"

when

specula¬

at least, speculative talk

Continued

on

page

secu¬

is

Distributors,

advertise¬
reader

Tech¬

Inc.

MUTUAL
FUND

of

Power.

to

boston

^ Inc.
balanced fund

Keystone at Peak
Combined

net

be filed in

quested that material

of the ten

assets

and

your

on

request

investment dealer

or

Louis H. Whitehead Co.

number of shareholders of the ten

Exchange

Commission's study of general ad¬

from

on

funds totaled 52,368.

duplicate and be dated.
Securities

Keystone Funds

Prospectus

Net

assets

Pre¬

Income

the

of

Stock

ferred

to

increased

Fund

and sales literature is $38,872,595 on Aug. 31, 1950, equal
completed. Pending com¬ to $16.44 per share. This compares
pletion, all general
advertising with net assets of $32,182,527 on

vertising

EATON & HOWARD

EATON & HOWARD

BALANCED FUND

STOCK FUND

not yet

and sales literature must meet the

set forth

standards

in

the.State¬

ment.

For Best Annual Report
the final ratings of an

inde¬

of judges for the

board

pendent

"Financial World" Annual Report

from

*prospectus
your

investment

debler

or

PHILADELPHIA

2, PA.

ft

of

sets

equal

seventh consecutive year.
The bronze "Oscar of Industry"

tional Securities & Research Cor¬

poration

at

the

Banquet

in

the

Annual Awards
Grand Ballroom

Hotel Statler in New York

of the

to

$16.09
from

increased
ago,

BY REQUEST TO

on

YOUR INVESTMENT DEALER OR TO

EATON & HOWARD
INCORPORATED

shown,
share.
The

were

per

BOSTON

2,195,473

year

a

333

24 Federal Street

and

Feb. 28
Aug. 31, 1950.
on

Nation-Wide Gains
On

1950, total net as¬
Securities

Aug. 31,

Nation-Wide

of

sets

Company, Inc., amounted to $15,217,559, equal to $14.50 per share
on

American Business

1,049,261 outstanding shares.
compared with $13,604,986,
$13.97 a share on Dec. 31, 1949,

These
or
on

eystone

30, 1950.

More than 4,500 corporation an¬

Inc.

973,838 shares.

Custodian

reports

selections

Certificates of Participation in

Professor

The

by
investing their capital
IN

BONDS
(Series B1-B2-B3-B4)

(Series K1-K2)

COMMON STOCKS
(Series S1-S2-S3-S4)

may

be obtained from

Denny

Keystone Company
of Boston

the

Lewis

New

assisted

Editor

"Public




of

Percentages
invested

and curities

|

Lord, Abbett & Co.
New

York

—

Chicago

—

Atlanta

—

Los Angeles

as

net

total

various classes

in

of Aug. 31,

assets
of

se¬

1950, were:

Elmer

Press Financial

rector

of

the

American

Accountants; John H.

Watson,

III, of the Division of Business
Practices, National Industrial Con¬
ference Board; Guy Fry, President
the

of

National

Society

of

Art

Directors.
President

Smith, Executive Viceof

"Financial

World"

originator of the annual

re¬

port surveys, has advised that the
National Securities Series Annual

Report is in the running

m 1111

Hi

Institute

for the

Congress Street

Boston 9, Massachusetts

used for

request

Relations

silver and gold oscars.
50

was

upon

Haney, to stockholders.
at

was

Griswold,
of

funds

Prospectus

COj

Investment Managers

the

Economics

He

reserve

final selected common stock purchases,"
Chair¬ according to the quarterly letter

|

common stocks, 46.44%; preferred
Walzer,
United stocks, 21.82%; U. S. Government
Editor; Carman G. bonds,
10.65%;
other
bonds,
Blough, C. P.A. and Research Di¬ 18.21%; cash, etc., 2.88%.

News";

and

Tke

Dr.

University.

Weston
Prospectus

of

Publisher

of

PREFERRED STOCKS

.

of

made

under

was

manship
York

who

jury

LORD, ABBETT 8

were

tion of

Funds

INVESTMENT FUNDS

"During the first half of 1950 up
the time of the Korean crisis,

survey,

awards.
1

to

submitted in the company decreased the per¬
the tenth in centage of assets invested in com¬
the series, and these were judged mon
stocks, but,' following the
in one hundred industrial classifi¬ sharp break in the market in June
cations
for
"Best
of
Industry" which culminated in July, a por¬

nual

this national

Montgomery Street

SAN FRANCISCO.

BOSTON

.

Oct.

on

/

TWENTY-FIVE YEARS OF INVESTMENT MANAGEMENT

outstanding also

2,318,405

to

2,364,403

the

trophy will be presented to Henry
J. Simonson, Jr., President of Na¬

$37,304,533

number of shares

Survey, National Securities Series
was
judged as having the best
annual report of investment funds
for

BE OBTAINED

report as of, Feb. 28, 1950, net as¬

Nat'l Securities Wins Oscar

In

PROSPECTUSES OF THESE TWO MANAGED INVESTMENT FUNDS MAT

Aug. 31, 1949, equal to $14.66 per
share.
In the Fund's semi-annual

Wellington Canadian
Holdings Over $3 Million

Affiliated Fund
Affiliated
per

of Sept.

with

Fund

reports
of $4.59

ins

a
as

15, 1950, which compares

$3.81

earlier.

Reports

Inc.

share asset value

Net

per

share

assets

at

the

a

year

end

of

the latest period were $108,371,619
diversified as follows:
Automo¬

tive, 0.79%; aviation, 1.68%; build¬
ing, 2.30%; chemical, 5.33%; ma¬
chinery, 2.29%; motion picture,
1.65%; nonferrous metal, 6.19%;
oil, 30.18%; railroad and railroad
equipment, 6.56%;
retail trade,

5.27%;
textile,
1.98%;
tobacco,
5.19%; utility, 18.79%; miscellan¬

Wellington Fund reported to¬ eous, 6.10%, and/cash and receiv¬
day that its holdings of Canadian ables, 5.70%.
' /•
: .*•
..

ji Diversified Investment Company
Prospectus

be obtained from

your local
Corporation,
200 Berkeley St., Boston
16, Mass.
may

investment dealer

fr:w £ n

rr;- jp

or

i|fy h

ar¬

It is particu¬

on

portfolio

underwriter

Fund

tion,

be

based

share

per

to

stock,

common

July,

be

his own portfolio
"logic" and stock

demonstrated

shares

10,000

—

re¬

stock

are

whose

men

has

its

and

economy

flection

years.

of

Nickel

International

shares

a

is

working for him.
comfort
for
him,

—

Aug. 31, 1950,
that such objectives
will neces¬ reached a new high of $215,193,200, it is disclosed by the annual
sarily be achieved.
The
Association reiterated its report
of
Keystone
Fund
Kl,
earlier statement that it will be made
public today.
This total
glad to assist any underwriter or compares with $176,559,400 at the
dealer in interpreting any section close of August last year.
As of
of the Statement of Policy.
It re¬ the date of the present report, the

The

that, at the close of the same pe¬
riod, the Dow, Jones Industrial
Average was 0.76%
below the
June 12 high.

Ca¬

1957—54—$288,000

1,

high on Sept. 22, E.
S. Hare, President of the Fund,
reported. The market price was
$14.69 on June 12, 1950, compared
with $15.57 on Sept. 22, for a gain
of $0.88.
Mr. Hare pointed out

Wellington

week-end.

past

the

12

the

of

mutual

ment

June

Hudson
Bay Mining & Smelting — and
5,700 shares Shawinigan Water &

of guidance only and should
that there is no assurance

pose

it

said

Fund

$3,774,725
Sept. 29,

leasing the figures in advance of
report
for
the
September
quarter because of a substantial
public interest in the figures fol¬
lowing
the
Canadian
Govern¬
ment's action in placing its cur¬
rency
on
a free
exchange basis

sought is for the pur¬

formation

state

to

business

of

the

objectives
should make it clear that the in¬

prospectus

One

and

Stock

investment

his

state

amounted

close

or

invites

that

the

at

the

literature

Any
ment

a

of

the

By ROBERT R. RICH

upon

value

Bond Group Shares was 6% above

died, it has been announced.

Prospectus

share

Thursday, October 5, 1950

.

.

The Value of Experience

6% Over June High

had been

.

The Parker

an mi vers art

yeajT

47

Volume 172

Number 4948

...

ponderous articles about buy

than
rate

Tomorrow's

ion

By WALTER WHYTE=

going to be

repeat

a

columns

written

backs

few

next

days,

weeks.
%

as

I stress

rail

specific

likewise refrain¬

utility stocks. It is the group
*

*

*

Incidentally, if you'd like
some

insurance, consider the

lows of last
as

❖

am

Just

ing from mentioning specific

say

in the

*

*

I

in that will advance.

In es¬
the market
is going higher even though
there may be some minor set¬
it will

rails.

mention

stocks, I

past few weeks.

sence

or

about

didn't

of last week's column and of

the

*

*

might mention that these
A number of weeks ago I lows are equally important in
commented in the same fash¬ other stocks (non-utilities). I

Says—

similar

utilities here, watch
*

*

Walter

This is

any

structures, excess profits, the lows of that date.

etc.

Markets

=

(1297)

The Commercial and Financial Chronicle

these

figures because
day when stocks
looked as if they had reacted
from an impenetrable object.
The previous day (Monday)
they closed hesitatingly.
Tuesday they went down. But
Wednesday, the day they
looked like they would break,
they curled up and then—up
again.
that

was

*

Tuesday, Sept. 26,

the support zone.

If

the

*

Si!

This rise is much

you

dent in individual stocks than short, as engaged in by pro¬
in the Dow averages. At this fessional traders. I'd like to

writing the latter are in what add that in these days of taxes
chartists
call "double top" and higher commissions, the
zones.
But individual issues, method is hardly suitable for
e.
g., General Motors, DuPont, tyros.
Steel, etc., have gone through
[The vipws expressed in ythis
their top figures and are now article do not
necessarily at) any
headed, or seemingly headed, time coincide with those of the
to higher levels. In fact, based Chronicle. They are presented as
those of the author only.]
|
on
recent market action, it
would not be at all surprising
With I. M. Simon Co.
to see a 10% rise in the gen¬
(Special to The Financial Chronicle)
eral averages before any re¬
ST.
LOUIS,
Mo. —Floyd
E.
action worthy of the name
Dixon, Sr., has become connected
came

about.

with I. M. Simon & Co., 315

Sj!

week

I

Fourth

*S«

❖

New

Last
more

13

evi¬ method of

outlined

one

trading, long and

Street,

York

Exchanges.
with

members

and

Midwest'

-

He

was

North

Of' the

Stock

previously

Slayton & Co., Inc.

*

Oddly enough, the utilities,
friendless group about
which everybody shakes their
heads
dolefully, now look
higher. It's no secret that the
utilities, tied to rate struc¬
that

tures
regulated by munic¬
ipalities, State and Federal
bodies, are behind the eight
ball during inflationary spi¬
rals. One thing in their favor
is
that, as regulated com¬
panies, they are not permitted
to earn excess profits.
It is
virtually a certainty that Con¬
gress will take that into con¬

sideration when it gets
to

dreaming

around

an

excess

profits tax law. In

any

event,

there's been

interesting

up

some

buying going
for the past

which in my
more

on

in this

group

few days; buying,

I'm

opinion is much

indicative of the future

Pacific Coast

Securities
Orders Executed

TEXAS RANCH PRODUCES ALUMINUM PIGS

on

Pacific Coast Exchanges

On

Schwabacher & Co.

June 24

day before the Korean invasion

—

source

—

of Texas.

the

combustion

Members

York

New

New

Stock

Exchange
(Associate)

York Curb Exchange

—

Francisco

San

Chicago

Exchange

New York 5, N. Y.

7-4150

Teletype NY 1-928

Private Wires to Principal

San

opening of its Point Comfort Reduction Works
first

Texas'

and

Offices

Francisco—Santa Barbara

Monterey—-Oakland—Sacramento

Richfield

Oil.

Shares Plus Tax

@ 45% hec.

Cyanam. @ 68% Dec.
7
Corn Prod'ts. @ 63% Dec. 11
Ohio Oil
@ 39% Nov. 30
....

S.

Steel.. @40

Radio Corp.

Dec.

•

2 $350.00

Am.

U.

aluminum-

amounts

8

450.00
462.50
262.50

Works, which has

a

on

a

tract

near

first

of former Texas ranchland

Power

at

for

Mata¬

engines, this

the

of the

Company's plant at Mobile,
to

peace-time

num,

In

be made into

gas

means

is converted to the large

required for aluminum

gas

marks the

by Alcoa of electricity generated

than water

power to

produce alumi¬

period in the earliest days

production since last February, the huge

Comfort

supply of

a

Works

in

is

effectively using Southern

a new way to

critical material in

a

increase the nation's
critical period.

250.00

@ 17% Dec. 9 312.50
Southern Pac. @ 62
Nov. 29 237.50
Atch,T&StFe@ 133%Nov.18 625.00
Southern Ry. @
% Nov. 20 275.00
Seab'd Airlines@38% Dec. 16 287.50
Illinois Cent. @ 50% Dec.
1 400.00
Mission Corp. @ 65
Nov. 30 375.00
Sta'dOil(Cal.)@ 77% Nov. 24 287.50
Bohn Alum.
@ 30
Jan.
2 225.00
Studebaker
@ 33% Nov. 29 287.50
.

This is another advertisement

in the series

published for more than ten years by Equitable

commercial concerns in the
contribute to the further
development of the South by supplying capital funds to sound enterprises.

Securities

Corporation featuring outstanding industrial and

Southern

states.

economic

Equitable

will

welcome

opportunities

to

.

..

@ 9% 6 Mos.
@ 30% Nov. 25
Dist'ng @ 46% Nov. 24

Pepsi-Cola

..

Sinclair Oil
Amer.

Subject

to

..

prior

sale

or

price

162.50
212.50
250.00
change

"NASHVILLE
DALLAS

KNOXVILLE

NEW

EQUITABLE

ORLEANS

MEMPHIS

Securities

THOMAS, HAAB & BOTTS
Members Put

&

Calls

Dealers Assn.,

50

Brokers

ATLANTA

&

Corporation

Brownlee O. Currey,

AND

JACKSON. MISS;

President

Inc.

Broadway, N. Y. 4, Tel. BO 9-8470




YORK

HARTFORD

GREENSBORO

BIRMINGHAM
NEW

pro¬

industry.

power resources

operation at Point Comfort has its

use

except for a brief

actual

Point

pigs.
the

fields

of generators driven by internal

of electric power

by other

produced, is refined from South

shipped to Point Comfort

aluminum

on

Port Lavaca, Texas. Alumina, from

American bauxite

Ala., and

means

Operation of this plant using natural

capacity to

produce 114,000,000 pounds of aluminum yearly, is

which aluminum is

SPECIAL CALL OFFERINGS
100

newest

By

duction.

The Point Comfort

gorda Bay

Per

nation's

producing plant.

located

Fresno—Santa Rosa

•

the

Board of Trade

14 Wall Street

COrtlandt

Stock

in the on-shore and off-shore natural gas

ALUMINUM COMPANY OF AMERICA celebrated

322 UNION STREET,

NASHVILLE 3.

TWO WALL STREET, NEW YORK 5,

ii

The Commercial and Financial Chronicle

14

.

Thursday, October 5, 1950

;

.

(1298)

Monetary Policy Today
have

•

•

months ago

Six

Federal

business

business recovery, and a
boom.

Member, Board

recession,

business

seen

recovery

concerned in

preserving purchasing

con¬

tinue.

Since

June

25

the

need for checks

serious

S.

the

tionary threat

Szymczak

would

be

to

misinterpret
economic

recent

developments.

True, immediate plans call for

a

smaller diversion of gross national

defense

product to the
and

diverted

for

of

Korea

the

than

rearmament

mum

maxi¬

World

II.

War

Unlike the situation in

1941, how¬
ever, there is much less slack in
the economy at the present time.
Our productive capacity is now
much closer to being fully utilized
tor
the
satisfaction
of
private
demands

consumer

when

only is

it

World

entered

we

Not

than

was

War

productive

our

II.
ca¬

pacity more fully utilized, but the
purchasing power of consumers is
substantially greater today than it

ing the first half of 1950 had been
slightly below those of
the same period in 1949, jumped
running

21%

in

July

this

unprecedented

an

—

for

increase

sudden

While

month.

one

in consumer

upsurge

demand, more commonly referred
to

buying," has subsided
recent weeks, de¬

"scare

as

in

somewhat

partment store sales are continu¬
ing at
last

level from 5 to 10% above
The reaction of busi¬

a

year's.

ness

be

can

men

in

rise

orders

in

seen

in

and

sharp

a

heavy

the

primary commodities.

demand for

individ¬

of

demands

Increased

uals, businesses, and the Govern¬
ment resulting from the Korean
and

war

accelerated

an

rearma¬

have also been re¬
flected in higher prices, increased
industrial production, and declin¬
ment program

^unemployment.

ing

mid-

By

September prices of 28 basic com¬
modities
had
risen
25%, while

has

wholesale

doubled, liquid asset holdings

prices of all commodi¬
8%, from their end-

of individuals have

ties

and

of-June levels. Industrial produc¬

the

system

nearly tripled,
of the financial

ability
to

expand

credit

is

very

large.; Should the supply of con¬
sumer goods
be reduced without
a corresponding reduction in peo¬
ple's capacity to purchase them,

competitive bidding for goods and
services

would

inevitably lead to

inflation.

Savings bankers, as guardians of
individuals' savings deposits, are
vitally concerned with preventing
further erosion of the purchasing

of

power

than

these

that,

deposits.

they

More

vitally

are

con¬

cerned with the prevention of in¬

flationary booms and unsound
credit
way

expansion

the

pave

for future economic collapse.

That is
cuss

that

why I should like to dis¬

with you the need for mone¬

tary

and

further

credit

action

to

curb

inflation, and the effects

of such action

tion,

up

measured by the Board's

as

commercial

Immediately prior to the out¬
break of

war in
Korea, economic
activity and employment were at
very high levels.
Industrial pro¬

duction in May exceeded the rec¬
ord postwar level reached during

1948, unemployment had declined
sharply from the February peak,
and

wholesale

prices

had

edged
1949 level.

back

to

New

housing units started

50%

their

early

were

greater during the first five

months

of

1950

than

in

the

cor¬

that

the

recent

However, in view of these devel¬

increase during
July in outstanding consumer in¬
opments,

and an

stalment credit that

of

1950, it

ary

forces

pressing

were

on

the

economy.

Korea

war

in

to

intensify existing
inflationary forces, and to add
new
ones.
Many consumers and
business men, whose memories of
wartime shortages and rationing
were

up

was

%still

goods

vivid,

as

fast

started
as

to
possible.

buy
De¬

partment stoie sales, which dur¬

dwindle

Address by Gov. Szymczak before the

Savings

and

American

Mortgage

Bankers

Division

Association

of

the

Diamond

Anniversary

Convention, New York City,
Sept. 25, 1950.




the

over

it's

and

not

past

that

one

let

ping it at

our

years,

can

af¬

unchallenged

pass

have the

10

we

means

of stop¬

disposal.

and

than

the extent

act

man¬

which

to

taken by re¬

course

inflation.

In
addition
to
monetary and
On Aug. 18, in announcing its
I shall merely remind you credit action by the Federal Re¬ approval of the New York Bank's
that they are difficult and cum¬ serve to curb further expansion of increase in rediscount rales from
bersome to administer and that bank credit, there are other finan¬ 1%% to 1%%, the Board pointed
they attack the effects, rather than cial measures necessary for at¬ to the fact that during the pre¬

basic causes, of inflation. In¬ tacking the basic causes of infla¬
stead, I'd like to spend a few min¬ tion. In the field of fiscal or bud¬
utes discussing the ways in which getary policy it is possible for the
the banking system and the Fed¬ Federal Government to finance a
eral Government can strike at the large part of its increased defense
the

ceding six weeks' period loans and
holdings of corporate securities at
banks

in

leading

cities

had

panded by $1.5 billion:—an
sive

in

amount,

view of

ex¬

exces¬

existing

causes
of inflation, and the re¬ expenditures on
a
"pay-as-you- conditions.
The
Board
further
sponsibilities of the Federal Re¬ go" basis by means of higher in¬ emphasized the fact that while ef¬
and
serve
System in an inflationary dividual
corporate income fective restraint of inflation must
taxes.
In retrospect, the gravest ultimately depend on the willing¬
period.
mistake
we
made
in
financing ness of the American people to
Since ours is primarily a credit
World
War II, and the mistake tax themselves
adeq ately to meet
rather than a cash economy, one

of the surest

ways

This

of credit.

flow

in any one of a
or

to curb infla¬

is to diminish

tionary forces

ways,

By rais¬

the Fed¬

the rediscount rate

ing

the

be done

can

number of

combinations of ways.

which

left

the

to

ure

left

mark

deepest

on

us

economy,

was

ernment debt and tremendous po¬

tentialities

inflation.

for

As

a

experienced
eral Reserve makes it more ex¬
pensive for member banks to bor¬ great difficulty in maintaining fi¬
nancial
stability in the postwar
row
on
eligible paper.
This in¬
creased

ally passed
in

borrowing is

cost of

to bank customers
higher interest

on

form

the

usu¬

of

w e

period.
The

longer it takes to increase
substantially, the smaller

taxes

personal and business the increase in taxes relative to
loans.
Thus, by making Reserve government expenditures, and the
the
Bank credit more expensive, the more
government
borrows
System may discourage credit ex¬ from banks, as contrasted with

charges

on

with

Federal

Banks.

which

serve

may

credit

bank

strain further credit expansion.
if

Even

contract the basis of
expansion. Theoreti¬

of

area

policy

are

monetary

needed if ef¬

fective restraint is to be achieved.

Throughout the postwar period,
yields on government secu¬
rities, together with the lcrge and
low

growing volume of short-term se¬
curities outstanding and held by
banks and
savings
institutions,
have

these

prompted

shift

to

their

yielding

institutions
to
higher
In so do¬

funds

investments.

tures

were

would

it

taxation,

by

lem of

government expendi¬
almost fully covered

highly

be

government

of member banks, the Federal Re¬

the

in

public and

desirable under present and

open

curbs

and credit

nonbanking insti¬ ing, they have made real estate
tutions, the greater the need for and other credit readily available
monetary and credit action to re¬ to private borrowers. The prob¬

the

pros¬
market
securities, pective conditions for the govern¬
reduce the reserve balances ment to siphon off as large a vol¬

Through

of

sales

Reserve

the government's needs on a "pay-

fail¬ as-you-go" basis, taxation alone
tax enough. This
failure would not do the job.
On the
with a huge burden of gov¬ contrary,
prompt
and
parallel

American

the

consequence,

of

ume

investment

excess

funds

by tapping real sav¬
borrowing additional
when refunding secur¬

possible
when

as

ings

restricting such credit ex¬
pansion has been further compli¬
cated

ing

policy of maintain¬
orderly market for gov¬

by the

an

which

ernment securities

at

assured

refunding

cost

financing

new

In

low

order to

from

by

rates

the

and

Treasury.

keep short-term rates

rising, the Federal Reserve
to
purchase
substantial

had

amounts of short-term securities.
any one of these methods funds or
purchases
created
addi¬
Moreover, me These
be used to curb further credit ities that mature.
expansion or to contract the total government should take advan¬ tional bank reserves.

cally,

may

tage of every opportunity to sell
In an effort to curtail
exten¬
it, but in practice they need to be securities to nonbank investors sion of credit to private borrow¬
employed
in
some
appropriate and to retire public debt held by ers, the Board of Governors and
the banking system. Sales of bonds the Federal
combination.
Open Market Com¬
In addition to the general cred¬ to individuals,
corporations, and mittee initiated a new phase of
it instruments which I have been nonbank
financial
institutions open market operations on Aug.
discussing—instruments which af¬ would absorb money that might 18. On that date they seated that
volume of outstanding bank cred¬

be
volume but not the otherwise
spent
on
current
they were prepared to use all the
particular type of credit extended consumption or new private in¬ means at their command to re¬
or outstanding — the Federal
Re¬ vestment, and using the proceeds strain further expansion ,of bank
to retire securities held by banks credit
serve now has authority to restrict
consistent with the policy
specific types of credit.
At the would reduce bank liquidity and of main aining orderly conditions

present time the Federal Reserve
may,

Curbs

Several
tion

courses

ac¬

On

the

price,

the

proponents

rationing,
to

hand,

and

hand, we
of
direct
wage

con¬

immediate re¬
the regimented economy

arguing for

the

one

last
we

an

war.

hear

On

the

the

other

somewhat

These

credit.

selective

but

be extended

they

do

credit

hence affect

agency

ing,

is

or

outstanding,

the terms on
available,
and

ability and will¬
individuals to utilize
as

the

as

nance

credit

ing

broaden the

to

government

for

powers

expedit¬

and curbing" in¬
On July 18 the President

rearmament

flation.

Federal

directed
cerned

witn

real

agencies

con¬

estate

financing
restrict their lending activities:

on

July 19 he requested additional

of the government charged control, allocation, and credit

responsibility for contribut¬

best it

can,

to the mainte¬

of monetary and credit con¬

ditions

the

of

to

Reserve,

and

consistent

with

the

needs

of economic

stability, is obligated
exercise its monetary and cred¬

re¬

striction authority from Congress;

and,

on

July 25, he asked that in¬

dividual
taxes

be

ditional
the

costs

and

of

income

help

ad¬

cover

briefly the ma¬
of
the
Defense

ver.v

provisions

Production

to

rearmament.

Reviewing

jor

corporate

increased to provide
revenues

Act

of

1950, we find
higher therefore, as to whether the Fed¬
it
taxes, and debt management.
eral Reserve should take action to that
grants authority to the
I shall not take the time today curb
President to (1) establish prior¬
inflation:
the
ouestion
is
to discuss the relative merits and
simply when and in what form it ities and allocations covering the
demerits of rationing and direct snouid be taken.
use of scarce or critical materials;

control,

securities

of the

test

new

mar¬

open

and

policy was provided by
Treasury refunding of bonds
certificates maturing Sept. 15

and

Oct.

the

credit

first

The

market

Developments

in¬

the

Federal

The

with

alter

in the govemmenc
ket.

such

for

credit

calmer, if less audible, proponents to
of
monetary and fiscal policies it powers in curbing inflationary
arguing for curbing inflation by forces.
There
is
no
question,
of

bank

private borrowers.

During the weeks immediately
following the Korean invasion,
steps were taken to reduce the
struments,
unlike
the
general
credit instruments, do not directly expansion
of
certain
types
of
individuals

of

demand

which

of

to

Recent Monetary and Credit

instalment, and real es¬
tate construction loans, affect the

curbing inflation have ingness of
widely discussed in recent such credit.

hear

turn

Inflation

on

possible

offset expansion of

to

purchase,

consumer

for

been

trols

.

help

by establishing certain terms credit

and conditions for stock

may

of

rather

cases

this

used will depend largely

are

the future

on

affect the volume of credit which

Monetary, Credit, and Fiscal

means
*

datory,

in

fect the total

months.

The immediate effect of

facing to¬

Inflation, if uncurbed by mone¬
tary,
credit, debt management,
and fiscal policies, can creep upon
us
month by month and year by
year until suddenly we find our¬
selves prostrate in its grasp.
It's
not a. particularly pleasant pros¬
pect for us who have watched the
purchasing power of the dollar

of exceptionally good busi¬

and that renewed inflation¬

ness,

are

tion.

of June that the year 1950 would
one

seems
we

and healthy
prosperity but the threat of infla¬

was
expanding rapidly.
It was
readily apparent by the early part

be

the first
fairly ob¬

not vigorous

day is

we

inventories

2V2 times

was

the monthly average for

when

and

consumer

buying and industrial production
might be looked upon merely as
of increased prosperity.

business investment in

equipment

in

increase

evidence

to

plant

permissive

conferred

estate

all

controls of production, prices, and

tained

continue to rise,

prices

ford

and

are

Federal Reserve's

powers

In

wages.

ex¬

panded by $2.5 billion since June
and

responding period of 1949, while
new

have

loans

bank

vious that what
Recent Economic Developments

extended.

the

they

index, had already reached a rec¬
ord postwar level of 199 in June;
since then, it has risen to 207 irc
pansion to some extent.
r
August and is expected to reach
By increasing reserve require¬
211 in September. Unemployment
has declined sharply since June, ments, the Federal Reserve can
and is now about one-third less reduce the amount of credit which
member banks may extend on the
than this time last year.
basis of deposit
balances main¬
Were it not for the fact that

half

savings banks.

on

were

subcon¬

leal

and

consumer
are

armament and

During the past nine
years disposable personal income

in 1941.

was

which

loans

likely

infla¬

and

trol the terms and conditions upon

anti-inflation efforts.

become?"
To ignore

M.

Stresses

credit.

contractors

war

(4) establish wage and
price controls and rationing under
certain conditions; and
(5) con¬

of their deposits, reviews inflation¬

gradual retirement of bank-held Federal debt to supplement

present

present

(3)

tractors;

Urges higher taxes and measures for

in these fields.

inflation ary
threat

power

to

vitally

are

and real estate credit, and reveals plans of Fed¬

consumer

on

eral Reserve System

mindshas been

to

contracts;

expedite the
supply
through guaranteeing bank loans

threat arising from rising prices and expansion of bank

ary

question
on.
most
people's

the

ment

System

pointing out why savings institutions

Federal Reserve Governor, in

busi¬

could

is

Reserve

expansion of capacity and

wondering
how long

"How

of Governors,

were

we

ness

(2) requisition productive capa¬
city essential to fulfilling rearma¬

By M. S. SZYMCZAK*

and a half

Within the past year
v/e

months'
was

of

rate

which

the

rate

estab¬

than

lower

lished

1%% notes of 13

with

1

maturity—a
the

in

market

discontinuance

Reserve of the

the

result

a

policy of prevent¬

ing fates from rising.
assure

as

by the Federal

success

of

In order to
the

Treas¬

refunding, the Federal Re¬
serve bought ihe
maturing issues.
At
the same time, however, to
prevent a growth in bank re¬
serves, the Federal Reserve sold
other outstanding issues at some¬
what higher yields.
As a result,
the average
yield on short-term
government
securities has risen
during the past month.
Federal
Reserve
purchases so far have
ury

somewhat
bank

pansion

hoped

exceeded

credit and bank

has

that

continued,

with

and

sales
reserve

but

termination

Continued

on

ex¬

it

page

is
of

34

l/i Wu

Volume 172

Number 4948

.

.

.

i

,

.

U"r

1-

4 »U«»tp

,

jl -.|lW, '-' MS

r

Jt4

(.

K*Hur

,.

"1.,'Wa*

twi* v

The Commercial and Financial Chronicle

ATPr i

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t>nmm*KiMui»

15

(1299)

i

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so

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16

Problems Confronting
cannot
stract
of

Professor

in

They
be

must

the

con¬

tionary

frame¬
of

gen¬

litical

po¬

cial

power

bank

eco¬

zation of

iields and activities.

dur¬

changes

intervention

decades, and this

ing the last two
has had

profound effect on Con¬

a

widening and embracing new

are

Nadler

Marcus

in

is

Government

pronounced

more

It

sectors than in others.

some

is

especially strong in the fields of
credit and banking, housing, and
ment
utilities. In these spheres, a type
providing greater economic secu¬ of dualism has developed—the co¬
rity and better housing and health existence of private institutions
facilities, and
preventing large regulated by supervisory and reg¬
scale unemployment and a sharp
ulatory authorities, and of govern¬
decline in farm income. This in¬ ment
agencies operating with tax¬
volves not only increased power
payers' money or based on the
and influence of government over
credit of the Federal Government.
business in general, but also con¬
Under these conditions, the par¬
tinued intervention in periods of
amount
questions are: How far
declining business activity, large
will these trends go?
Where will
Federal expenditures, and mount¬
they end? The answers to these
ing
lending
and
guaranteeing
questions will depend on what the
operations by government agen¬
people want. So long as we en¬
cies.
The change of thinking in the joy political freedom—and so far
our
freedoms are not threatened
international political sphere has
—trends will go as far as the peo¬
been equally great. The policy of
The mass
isolation so pronounced during the ple desire them to go.
of legislation passed
during the
twenties is a thing of the past.

The

actions.

gressional

govern¬
is committed to the goals of

last two decades and

We

the

momen¬

now are committed to a policy
tous changes in our domestic and
containing the Soviet Union, of
stopping communist aggression—if foreign policies were not the work
of one man or one party.
They
need be by force of arms—and of
were
based on
the will of the
giving economic and military aid
majority of the voters
of
the
to the noncommunistic "nations. In
country. 'v
many respects, the United States

of

the

assumed

formerly rested
and

on

other

nations.

This

hence

Great Britain

-

type

of

implies

continued

how

far

accentuation of the

forces

which

began

early in the

economic

and

political

changes of the past years are not
temporary
manifestations;
they
as

permanent

nobody

yet

character; and

in

tell

can

what the

In

spite of these developments
and the possibility of new govern¬
ment controls, it is unrealistic to
that

we

socialism and

are

headed

ascertain

the

happened in

some

countries of

when the rearmament program is
bound to cause serious dislocations
lead

the

powers

to

further increase in

a

of

Under these

the

government.

conditions, it is dou¬

bly important that each
group recognizes that

of

the

country

group,

of

powerful,

cial

institutions,

and

planned

a

economy. Nothing of this sort is
in
the
making
in
the
United
States.
Even in labor circles—at
least

the

among

unions—there is
tionalize

There is

the
no

powerful

labor

desire to

no

basic

na¬

industries.

movement

on

foot to

nationalize the commercial banks
and

insurance

the

present

companies. Unless
international emer¬

gency becomes considerably

more

serious, we are not headed for
planned economy.

Nevertheless, a new form of so¬
ciety is evolving in the United
society

are

the

still

pillars
the

this

of

system

of

competitive private enterprise and
political freedom, the power of
government to

regulate economic

activity is growing; and the
nomic

functions

of

eco¬

government

*An address by Dr. Nadler before the
Second General Session of Diamond Anni¬
versary

Convention

Bankers
Association,
Sept. 27, 1950.

of

the

New




American

York

the

individual groups.

how

No

large

or

if

the

ceives

are

at

run

can

country

as

a

the

whole.

The welfare

of

the

the maintenance of

entire

goods

population depends

our

is

a

constant¬

economy to produce

essential

security

of the

expense

to

the

and

our

military

maintenance

of

high standard of living. This
strongest guaranty against

the

socialism

and

the

against

weapon

most

effective

communistic

ag¬

gression.
The

principal

front
crisis

the
are

strength

tasks

nation

that

con¬

in

the

bank

excess

to increase

our

at

rapidly

as

the

mament

City,

based

same

ultimate

on

to

an

economy

inflation does not

assure

victory; and "business

as

usual."

disregarding the serious
international situation, means
building

every

on

effort

quicksand.
must

be

While

made

to

strengthen our security, those in
charge of this program must take
into consideration
of

the

the

seriousness

inflationary

threat, the
huge public debt, and the heavy

burden

The

the

damage

of

taxation.

circumstances,

waste

Under

and

these

ineffi¬

ciency will not only harm the

re¬

but also cause
the economy.

to

will

*

the

from and what
expenditures and

come

effects the huge

diversion

the

de¬

where

consider

must

money

national

for

dollars

of

fense

of

materials,

raw

manufacturing capacity, and labor
the

from

production

civilian

of

goods to rearmament will have on
the

it is
easy
to borrow and difficult to
tax, particularly the people in the
Politically,

economy.

and middle-income

lower-

ets who constitute the

the

largest

share
Yet

come.

an

either

leads

visible tax
of

who

and

voters

of the national in¬
unsound tax policy
in¬

inflation—an

to

on

carrying

brack¬

majority of
receive the

those least capable

regimenta¬

it—or to

As

is

result

II.

War

rearmament

expanded

ex¬

meet

increased

an

inventories.

of

Already the volume of such loans
has increased considerably.
banks freely meet

If the

the requests of

the

government, as they will since
are
the residual buyers of
government obligations not ab¬

they

sorbed by ultimate investors,
at

the

time

same

of

deficit

create

financing
bank

new

de¬

sell

obligations

government

individuals, thereby sipnoning

purchasing

excess

It

power.

effort, however,
and particularly by the banks, to
stimulate
the
sale
of
Savings
Bonds to individuals who,
after
having bought large amounts of
Series E Bonds during and after

the war, find

that while the rate

of return

satisfactory and the

was

securities carry no

demands

their

of

and

freely meet all
customers,

the

principal,

vestors will be more interested in

acquiring mortgages, particularly
those guaranteed or insured by a
Federal agency.
Only after the
curtailment
and

the

institutional

other

market

the

to

inflationary

much

more

the

was

their

the

dangerous
in

case

1941,

be
than

can

now

partly

be¬

need

look

bond

important outlet for
Hence,
if
in
the

an

as

investors

government

funds.

meantime

trend

inflationary

reduction in

a

companies,

quite considerably, thus supplying
fuel

credit

mortgage

cause

activity will insurance
savings
banks,
and

building

toward

forces.

of

shortage of certain basic

commodities

volume of deposits could increase

An

World

and

accumulation

the

merely postpones the day of reck¬
oning, as was clearly demonstrated

after

of

sale

risk of loss in
they have been hard
hit by the decline in the purchas¬
demand for credit from
private
ing power of the dollar.
sources, brought about partly by
So long as building activity is
higher prices of commodities and at a high level and the supply of
partly by anticipatory buying and mortgages is large, institutional in¬
securities

more

and

the

the

will require great

penditures by the Federal Gov¬
ernment, the banks may have to
purchase
additional government

tion, which, while it may tempo¬
rarily stem the tide of inflation,

during

the

of

and

not

to

off

Advocates sterili¬

a

through

are

The safest and soundestj
method of financing the Federal
deficit in an inflationary period

Looks also for higher

program

deficits

If the

posits.

reserves.

legislators who vote the bil¬

lions

the

Treasury

should

funds, at least a portion
may have to be obtained from the
commercial banks; and this wiil
new

liquid savings lead to an undesirable increase in
in the hands of the people is much deposits.
Should a material in¬
Unless the Korean fighting
larger than ever before and partly crease in the volume of deposits
spreads and the international sit¬ because, in contrast to 1941, there take place, the Reserve authori¬
uation becomes much more grave, is
ties will adopt credit restrictive
very little unemployment and
the
productive capacity of the idle plant capacity. Furthermore, measures, primarily in the form
country is so great that we can the people's experience with tne of raising reserve requirements.
attain military preparedness with¬
sharp
postwar
price
rise
has Since the threat of inflation is
out too serious dislocation of the
taught them that it is not always real and the fear of inflation more
civilian economy and without se¬ desirable
or
sound
to postpone pronounced now than during the
rious
inflation.
This
can
take
purchases. Thus, the problem that war, the Board, under these cir¬
place, however, only if the rear¬ may confront the banks in the cumstances, may find it necessary
mament program is financed as not distant future will be that of to
ask
Congress
far
greater
far as possible on a pay-as-you-go
formulating lending and investing powers over the money market
basis, if all other government ex¬ policies to prevent a further rapid and the banks than is now con¬
penditures are reduced, if any expansion in the volume of bank templated. •*deficit that may develop is fi¬
What can the banks do to pre¬
deposits.
the supply of

cause

Productive Capacity vs.

outside

nanced

Inflation

commercial

the

further

vent

Curtailment

Credit

of

banking system, and if the banks
adopt a
strong anti-inflationary
policy.
The
imposition
of
the

is

large rearmament program on an

prevent the use of credit for spec¬

costs, and at

operating practically at
capacity places on government the
duty to siphon off the excess pur¬
chasing power which the rear¬
mament will generate, on indus-i
try and labor to increase produc¬
tion and efficiency, on the banks
to curb the expansion of credit,
and on the public to practice re¬
straint in purchasing and to save
and economize. Only in this man¬

ulative

tribute

economy

ner

we

can

avoid

serious infla¬

a

tion—which history proves is one
of the

greatest menaces to

free

a

society.

problems

as

the

result

a

of

the rearmament program can best

understood

influence
cise

in

which

the

economic

on

increase

relation

to

banks

the

exer¬

conditions.

An

in loans and investments

by the commercial banks—except
in

transactions

Reserve
and

Banks—leads

in

crease

the

with

the

to

volume

expanded

to
of

Federal
an

in¬

deposits

purchasing

Furthermore, lending and
investing policies of the commer¬

power.

cial

banks

fluence

have

a

not

only

business

considerable

business psychology.
ent

in

conditions,
the

volume

directly

conditions

influence

Under

in¬
but
on

pres¬

material increase

a

of

must be avoided.

bank

deposits

designed

to

purposes

or

could

the other hand,

adopt

the banks should
liberal lending policy to¬

a

who

borrowers

wards

the

use

their rates

increase

commercial

terest

on

terest

rates

too

are

of in¬

In^

loans.

low;

in

fact,

and

reserve

re¬

quirements, which would depress
period of rising

the same time con¬
fight against the

the

to

This

forces?

inflationary

is

a

which
the
banks
immediate considera¬
tion.
It has many facets and is
rather complicated.
The follow¬

problem

to

should give

ing obiectives must be sought:
(1)

The time is at hand when banks

should

regimentation
higher

their earnings in a

proceeds to increase production.

should

Means

permit

an

found to

be

increase in commercial
affecting

rates of interest without

prices

materially

and

yields

government obligations.
in

on

Wiiile

an

rates

is

commercial

they

increase

war,

certainly desirable, it is doubtful
whether the Treasury will permit

are
lower than before the
when the purchasing power
the dollar was twice as high as

rates

confronting

banks

policies

for purposes
hamper the rearma¬
ment program or lead to an in¬
crease
in commodity prices.
On
which

able

The

commercial

adopt

An

today.

the

Emergency

be

to

and

control

before the banks

The first task

of

The Role of the Banks in

as

time

program

on

serious

military

possible,
prevent
the imposition of the huge rear¬
and

armament program

present

operating at near capacity from
creating
a
serious
inflationary
spiral. These tasks are closely in¬
tertwined. Military preparedness

Growing

While

before

benefit in the long
special benefits it re¬

a

Government Economic Power

States.

economic

the welfare

comes

matter

no

Europe. Socialism implies govern¬
ly expanding
ment ownership
of basic indus¬
tries, nationalization of the finan¬

and

functions

the
government
to
expand.
This problem is of particular im¬
portance in the present emergency

on

has

what

desire

we

of

for

repetition of what

a

to

want

we

benefits

ultimate outcome will be.

assume

is

economy

and

\

present year.

are

nation

European

to reassert themselves

The

the

Western

an

inflationary

The real problem that confronts

which

burdens

on

large scale military preparedness
and larger Federal expenditures
and

does

United

States has un-

suffi¬

budget.

expect that

may

method

this

is siphoned off by government. Stresses role of banks

and expects continued Treasury deficits.

so¬

dergonev great

has

(3) huge public debt;

programs;

requirements that will depress bank earnings.

reserve

thinking

the

of

the

obligations to ultimate investors,
they are not inflationary, because

to

in emergency

tion.

nomic and

one

deficit.

a

financed

(2) infla¬

productive capacity is increased and banks curb credit expansion while

purchasing

excess

situa¬

The

resulting from rearmament

pressures

nation's

developments
and the inter¬

national

with

(4) heavy burden of taxation. Says serious inflation can be avoided if

and

economic

eral

of government, especially in fields of credit and banking;

power

sidered within

work

expenditures

balance

to

Hence,

Among problems confronting banks, Dr. Nadler lists: (1) growing economic

banks

the

alone.

ciently

Treasury will continue to operate

of view

the point

from

nor

non-essential

Finance, New York University

of

Thursday, October 5, 1950

.

Banks

By MARCUS NADLER*

problems
confroting the
the present emergency
be considered in the ab¬

The
banks

Financial Chronicle

The Commercial and

(1300)

but

as

it

increase

loans

on

a

is

money

only desir¬
against inflation,

curb

would

in

not

also

diminish

the

the banks to seek
loans aggressively in order to in¬
crease their earnings and to meet
the increased cost of operations.
pressure

on

Banks must always
that without

an

bear in mind

expansion

in the

any

material increase in yields

government

on

obligations.

(2) It is necessary to find ways
the sale of govern¬

of increasing
ment

securities

order

to

chasing
had

a

siphon
power.

to

individuals

in

off

excess

pur¬

The

banks

have

great deal of experience in

the sale and redemption of Series
E

bonds.

They know the attitude
public to these obligations,
and hence are in a position to ad¬
sale,
there can be no
serious vise the Treasury in the formula¬
threat of inflation.
tion of plans which would induce
more individuals to buy and
dis¬
Financing the Government
courage the redemption of gov¬
How large the expenditures of ernment securities.

means

of

payment, in relation to

of the

the volume of goods available for

the

Federal

Government

will

be

during the current and succeeding
fiscal years is impossible to state.
It is certain, however, that they
will be very large.
Moreover, it
is

doubtful whether the Congress

will

levy

new

taxes

and

reduce

(3) It is advisable to find
to

sterilize newly created

balances

without

ways

reserve

reducing

the

earning assets of the commercial
banks.

This problem will become

Continued

on

page

20

Waller

Chrysler's original tool chest—on display in the Chrysler Automobile Salon, New York

The tools that money couldn't buy
it with high-compression engines, 4-wheel hydraulic brakes, all-steel bodies, new ways of dis-

Walter

Chrysler made them himself. He was 17,
working in a railroad roundhouse. His mechanic's
fingers itched for a kit of tools of his own. So
young Walter got steel and made his own.

tributing weight for better riding . . . many
originations the entire automobile industry

eventually followed.

As he

shaped them, he shaped a dream as well.
special American kind of dream—freeranging imagination anchored to solid things
like common sense, working a little harder, making things a little better. And asking no odds of
It

was a

As Chrysler Corporation this year observes
its 25th anniversary, it is fitting that the cornpany he founded should pay this tribute to
Walter Chrysler and his creative genius.

.

And the tools of his earlier mechanic's days?

anyone.

It led Walter

in railroad-

house. It was long after he had asked me to work
with him. He brought the tools back from Kansas,
A few of them needed fixing and he asked me to

Chrysler to

success

ing when he
build better
more

cars

than any

known—nimbler, safer,

fix them. It

comfortable, handsomer.

was a

compliment I have

not

with

a

merely material things; he inspired
to
carry on his splendid ideals.

zeal

Chrysler Corporation is still young enough to
his inspiration. He wished this company
always to be a producer of fine automobiles of
great value.

feel

And those of

who

privileged to work
Plymouth, Dodge,
Chrysler automobiles live up to
us

were

with him believe that the

De Soto and

new

his tradition.

I remember when he found them in his mother's

was young. It led him to study the
automobiles of the day. Why couldn't a man

He built
men

It is

a

tradition

uniquely American—to live
finding better ways
people want.
.
.
.
;

and work with the idea of
to

make what

..

never

forgotten,

Chrysler introduced
the first Chrysler car. What he did changed the
whole pattern of American motoring. He changed
So, 25 years ago, Walter

The qualities Mr. Chrysler put into his own
tools still mark the great organization he founded.

CORPORATION

CHRYSLER
-

Fine Automobiles of Great Value

PLYMOUTH

•

DODGE

DE SOTO

.

•

CHRYSLER

"

.

,

.

.

•
.

I

>

.

.

"

.

'
•
.

_

Airtemp Cooling, Heating, Refrigeration




'

•

.

•

-

Chryd* Marine & Industrial Engines '

•

•

Dodge Job-Rated Trucks

.

•

.

,

f

•

.

Oilite Powdered Metal Products

h

;

•

Mop* Parts & Accessories

9

Vfr-

■

Cyclewiti

>

*

»

,18

The Commercial and Financial Chronicle

(1302)

The
World

the

left

II

War

its wake

in

destruction of
property the world has

hnd

Witnessed.

Western

Chief of ECA for Germany

dom,

zation

13

lion

Former ABA President,
its achievements

though admitting ECA has made mistakes, contends

unparaUeled>^Cites increased European production, now
level, and points oti^ dollar deficit has been greatly reduced.

25% above

property dam¬
age
of $122
billion; and in

the

improvements in its industrial techniques. Stresses need for European economic

prewar

capita

sjpent $505 foil-

urges

direct costs of
net

Robert M. Hanes

We must do more, however, to
help solve the European economic

Western Europe Not "Out of the
Woods"

there

who have lived under three occu-

Belgium and Lux-

that

pations;

embourg have been overrun twice
In

generation and Holland, Nor-

a

Way, and

the

Denmark once each; that
Kingdom has given

United

profusely of its men and money
twice in 25 years; and that Ger-

for these,

to pay

it must export

With 20 million

0ut of the woods.

planning and execution. I believe,

portion of these monies would, of will have to

from modern-

come

for Communist ization of methods and plants,
many lost 8.5 million men in the is outstanding, and its achieve- Party
activities in those very Compared with our standards, Eutwo world wars—we can under- ments unparalleled.
Let us ex- countries.
rope's equipment and techniques
jftand to some extent their appar- amine briefly some of the more
It is estimated that in order to are, on the whole, antiquated,
ent

are

necessary,

in the present

istered

threatening situation, to prepare
a strong defense.

commercial

ot the

structures and

relationships of most
of the world, the

the

and goverhment of
States undertook the

United

fiponsibility
nations

of

re-

assisting wartorn
just as we had

in peace

supported our allies in war. Secxetary of State George G. Marishall

expression

gave

to

this

in

bring Europe's dollar deficit into

After

industrial

our
purchases
fr0m Europe by approximately $1

Europe, I am convinced that, except where handwork is a large

billion. It may mean that of our
total purchases from Europe we
will have to accept $1 to $11A billion of competitive goods and services; but this, with our annual

factor, our industries have little
to fear from European competition.

Prewar Level
Although it took Western Euregain prewar
levels after the first World War,
in the first two years of the Marshall Plan, industrial production
in Western Europe increased, in
terms of constant values, to a level
25% above that existing before
World
War II.
Intra-European
trade and agricultural production
are each at prewar level. Hunger
has been banished; currencies have
rope seven years to

production of

pronouncements received
immediate

and

acceptance

and

shortly

became

the

Marshall

Plan.

was

implemented by Congress in

1948

with

economic

tration,

the

known
This

creation

Cooperation

which

"^ITaddress

by

Second

of

Session

to

as

plan

the

of

Adminis-

has

date

dis-

Mr. Hanes before the
the

Diamond

Anniver-

Convention of the American Bankers
Association, N. Y. City, Sept. 27, 1950,

more

lion of goods, and

than $140 bil-

a gross

viewed as serious. When
taxpayers cease our aid,

over

the

we

as

we

as

must retain our responsibilities. Either we help the
consumers

western

Europeans

.

ag

to

continent, has sj[st

think

that

m0re

than

50

to

soft

currency

increasing

exports, Western

Europe's

that the benefits of high produc-

dollar tivity may be spread
dollar

and so that

areas,

,

$5

billion

over

over

our

wider

American

new

tates

P«*St three years.

where the old

thought

of

narrow

had been, with

line

flow

or

the

^eg wjp not

aione

give Western

nationalism.

restricted, protected, national eco¬
nomic

striving for
self-sufficiency, can never realize
their maximum potentialities for
units,

each

security.

and

must

be

Trade
and

discarded;

a part

so

99

that

production

can

be sched¬

uled, not for small, circumscribed
national groups, but for the 270
million people of Western Europe

exports to the rest of the
world. The possibilities of an in¬
tegration program are evident
and for

are

>

of

this

exceed

one

substantial

billion

old

com¬

dollars, and

invested in every state in the Union.

Many banks, in serving their deposi¬

tors, play
gram

a

...

part in

our

by calling

investment pro¬
us

longer term loans'than the bank wishes
grant alone.

We welcome such

col¬

laboration.




For better life

insurance

service,

we

maintain, from coast to coast, 1,000 field

when

we

national

representatives who

are

trained in put¬

ting life insurance to work to meet
sonal and business needs.

per¬

These Career

in when the

credit needs of their depositors involve

to

the

crease

the

saw

con¬

lower

costs

number

of

in¬

and

possible

buyers.
The

small, inefficient, protected

economies that

by

the

exist will al¬

now

be menaced

ways

the

on

competition

hand

one

of

ef¬

more

ficient methods, and on the other

Underwriters appreciate their close re¬

lationship
working

with many
together

problems of

our

to

trust

officers

solve

the

in

estate

mutual clients.

remember that the gross

Trade

liberalization

and

convertibility are,

First Mutual

Life Insurance Company of Boston
Life Insurance Company Chartered in America—1835

under

maximum

contribution

and

money,

equipment

command, is of para¬
importance if Western Eu¬

one

mount
rope

hopes

sion.

Ten

withstand

to

15

or

aggres¬

relatively small

military forces built without
ordinated

plan,

changeable
with

a

without

equipment,

different idea

as

cessfully

co¬

a

inter¬
each

and

to defense

plans and procedures, cannot
stop

suc¬

a

Question of European Economic
Union
The choice is not whether West¬

Europe will unite, but rather
kind
of
union, and how
quickly
will
it
be
formed.
If
ern

what

through

indecision,

and

timidity,

neglect it fails to act affirmatively
and

soon,
the piecemeal disin¬
tegration of the whole of Western

Europe will eventually occur; and
Europe will then become united
in another form

lice

as

a

series of po¬

States, completely

subservient

to the Kremlin.

Changes in national habits and
procedures
fact

that

slowly;

come

the

Europeans

but the
co¬

are

operating in the Brussels Pact, the
Council of Europe, the United Na¬
tions, the North Atlantic Treaty,
the
Organization
for
European
Economic

Cooperation, and the
Union gives
hope that the commercial, finan¬
cial, and military integration of
Europe may not be too far off.
European

Payments

Indeed, Korea points up, dra¬
matically, that integration cannot
be postponed. The ruthless, cruel,
un-Godly, lying enemy we in the
free

world

face

makes

fatal

any

delay in realizing all-out

ECA.

in

fact,

the

system,

will

of offsets,

a

States

new

This Union, operat¬

ing somewhat like

Therefore, if

cur¬

European countries with the help
of the

I

its

men,

courting destruction.

in Western Europe.

European Payments Union which
has been created by the Western

MUTUAL

European

make
in

further

product

the two cardinal points of

ENGLAND

A

to which each country will

of the United
preparedness. The time -for wish-;
States, with 150 million people,
ful thinking, appeasement, com¬
was
in 1949, $260 billion, while
Western Europe with 270 million promises, and sugar-coating of the
disagreeable truths is over. Our
people had a gross national prod¬
enemy is bending his every energy
uct of only $160 billion. Express¬
to the destruction of the free na¬
ing this differently, the per capita
tions.
We and our Allies can no
production in the United States is
longer take half measures without
approximately $2,000 against $500

rency

The NEW

defensively.

army,

Europe the sound, expanding, vir-

monies must be made convertible

investment program

our

ones

of

and

placed exactly

were

elimination of waste motions.
d
ofUthea^ndivfdual6^un¬

barriers

in

oJd foundations.

^

Qn

machines

be

..

"Many banks... play

would

excluded ile economy which is necessary to
the from foreign markets by the die- ins^r.e
future. Eignteen small,

deficit in trade has been cut aP- Products maV nat
proximately

one

re-

completely redesigned

been

built

must in-

we

policies and practices, in order

purchases
and by

visited

have

prosperity

pany

which would

plant,'which was
years' old, would

the

^^01^0^00^
areas,

I

jn dojng this,

p|ng ^

lateral, nondiscriminatory trade no

Mfury

Assets

removed. If

are

whole, there would be

a

ruthless, strong,
centiy a verv large plant in West- and well equipped aggressor oper¬
ern
Europe which was 75% de- ating under a single command.
stroyed during t h e war.
The World War II gave sufficient proof
I
management has spent over $20 of this.
mini0n in rebuilding and reequip-

been stopped in its tracks.
ring

illustration,

f°r the most efficient operation.
Not at all—each building was re-

the acceptance of multi-

on

scores of
all kinds in

of

plants

continue

'

,

por

visited

having

self-sup-

taxpayers

where apparent; and communism, to support tnem.
which unquestionably would have
At the same time,

spread

national

product of $260 billion, cannot be

Jus historic ten-minute speech at been stabilized; better living and
Jlarvard University on June 5, working conditions are every1947. His
wide

increase

further

European Production 25% Above

nations

people

the aid admin-

used

be

course,

manageable proportions we must

of

by E.C.A.
f

Against this background of mass
Stilling
and
destruction, widespread poverty, chaos, and disrup-

fion of economic

that the record of E.C.A.

however

the sacrifices obvious results

apathy toward

that

as

manufactured goods. Unless we more people to feed, clothe, and by the demoralizing capacity of
n0 one connected with E.C.A. wish to drive Europe to seek these employ, there is a crying need for the Russian prison state to foment
would claim that mistakes have essentials from the Eastern coun- much greater production in order internal revolution and create ex¬
not been made. Mistakes are in- tries, we must agree to substantial to lift the standards of living of ternal tensions.
herent
in any mammoth under- imports from Europe.
Russia is the masses from the present low
As necessary as it is for Western
taking where an organization must today offering to sell Western Eu- levels. This will depend, in large Europe to integrate
commercially,
be recruited quickly and where rope wheat and to take local cur- degree, on greater productivity in it is even more
compelling that it
circumstances dictate haste in rencies in payment. A substantial agriculture
and industry which unite

people in France today

are

This aid, on the whole, has

brought positive results.

that

remembered

is

it

not

great; yet there is a wide
improvement if present

fewer items, and to produce them
in much larger quantities—all of

Western

lion.

per

is

power

European producers

as

disappeared.
When

for

tinent

jri
addition to
this, the Army, problem.
Of necessity, Western
Because of the generally
imwell as its through relief funds, has invested Europe imports huge quantities of proved conditions I have menInvisible exports, such as shipping, $2 billion in Germany, bringing grains, commodities, and raw ma- tioned, I would not lead you to
banking, and insurance, virtually the total aid since 1948 to $12 bil- terials from the dollar areas; and believe that Western Europe is

annually,

so

or raw

the

possess;

Cites economic gains in West Germany and

and better integration.

aid of almost $10 billion
European countries,

pensed
to

we

trade obstructions

the

Investment income of Western Europe, over $1

not have

does

less Allied industrial restraints and greater police force for that region.

direct and in¬

billion

of trade,

real incentives to modernize plants
and procedures, to concentrate on

more

on

tion for the

Europe

purchasing

nearly

insist

unity and cooperation, and holds U. S., if its aid is to continue, must

date

The

payments and

coal, iron, farm lands,

area

ajddition, they

war.

of

materials that

Warns, however, Western Europe is not "out of the woods," and sees need for

fighting

re¬

Union.

integration.

are

t^iey sustained

to

and

the

big step toward liberali¬

a

Western

mil¬

people;

liave

group

througn

to

which in turn will, foster European

al¬

lost

most

This is

N. C.

the

available

sources

President, Wachovia Bank and Trust Company, Winston-Salem,

in¬

cluding the
pnited King¬

in

settlements

arrange

ever

Europe,

other countries

By ROBERT M. HANES*

life

greatest

Thursday, October 5, 1950

.

.

European Problem

*

v

.

bank clearing

we in the United
to continue to aid West¬

are

Europe,

ern

ter

and

we

more

must insist on bet¬
wholehearted co¬

operation toward integration.

We

must demand that
and

delaying tactics
position trading be discarded.

We must be convinced that there
is

greater

determination

on

the

calculate, by means part of Western Europe to defend

periodic balances owed

by Western European countries to

itself

than

is

apparent

Continued

on

in

some

page

28

Volume 172

Number 4948




.

.

.The Commercial and Financial Chronicle

(1303)

Iff I

II

•

-it*.'.

*meztc&sc K4P0C&

*

THE HOME *

Home Office: 59 Maiden Lane, New

York 8, N. Y.

'

(

•

.

v

'

.

to

FIRE

•

THE

AUTOMOBILE

HOME

INDEMNITY

Casualty Insurance

•

MARINE

COMPANY

Fidelity and Surety Bonds

19

20

The Commercial and Financial Chronicle

(1304)

increase

.

Thursday, October 5, 1950

.

.

from

banks will witness

reduction

a

Consumer loans and

when the

on,

in

interest

of

banks

to

deposits

on

cline in mortgage loans and at the

the

problem

notably

increased

of

sum

the government
meeting its deficit, particularly
that portion not covered by the
Federal

of

desirable

the

obligations to ul¬

time

to

prevent

volume

increase

an

increase

in

deposits and a de¬
cline in bank earnings at a time

the

solution

problems is not

old

difficult, if not impossible, to
bring about an increase in short-

easy.

term commercial rates without af¬

Balances

Since

one.

Act

of

for

such

action

achieved

the

fecting

it

arose,

primarily

short-term

on

A solution

problem will become im¬
portant if the Treasury is com¬

pelled

of securities

mercial

of reserve requirements.
instrument of credit control

to

amount

the

raising
This

yield

this

to

was

through

the

government securities.

is

Banking
the need

whenever

1935,

It is quite

be

This method of credit control
an

oppo¬

evident, however, that unless spe¬
measures are adopted, it will

The Sterilization of Excess
Reserve

sell

banks.

considerable

a

the

to

com¬

clumsy, however; and whenever
applied, it not only jolts the
banking system but also re¬
duces the earning powers of the
banks, Since they are required to
keep a larger proportion of their

for

the

Treasury to finance that
of the deficit which has

it is

portion

entire

to be absorbed

idle.

raise

If

the

should

ernors

reserve

Board of

for

ask

Gov¬

power

to

requirements beyond

the present maximum, it would be
advisable to recommend the estab¬

lishment
reserve

ber

as

of

special

a

certificate

to be maintained by mem¬

well

Whenever

as

non-member banks.

the

volume

of

by the commercial
banks through the sale of special

certificates eligible for purchase
by commercial banks only. These
certificates

could

be

allotted

their

of

objective

deposits. The same
could
be achieved

the
adoption
of
the
"Treasury Deposit Receipts" used

in Great Britain.

is

The first meth¬

flexible

more

and

or

to

fear

of

A

possible

lem
a

is

for

new

turn in

bonds

such

a

certificate

reserve

more

principle.

districts

or

on

~

the various

In

view

of

the

desirability of

A

banks, depend¬ financing the government deficit
their geographical location. through the sale of obligations to
simpler method of achieving ultimate investors, particularly in¬

on

the

same objective would be for
the Congress to authorize the He-

de¬

gets
duce

under
the

way

and

banks

the

their

redeemed

bonds.

are

icy, then

Treasury.
There is,
precedent of Treasury
policy which offers the possibility

banks, in order to

many

meet the increased

of

costs, may seek

loans

and other investments

aggressively than
contribute

the

of

a

solution.

a

curities

commercial

even

Before

investors

to

banks,

issuing
other

the

examines

carefully

and

inflation

to

now,

in¬

needs

and

of

the

the

individuals to

courage

to

buy

ter

what

adopts,

war.

en¬

ST OF PATERSON.

more

bonds than has been the

new

• «

case

No mat¬

policy
the
Treasury
is imperative that the

it

banks do their utmost, even more
than during the war, to help the

finance

government

deficit

any

through the sale of obligations to
ultimate

investors.

ST IN

SERVICE

Debt Management and the Banks

the policies

The effectiveness of
of

the

in

banks

combating

the
strong inflationary forces will to
large extent depend on the debt

a

management policy of the Treas¬
ury.

Because of the sharp increase

posits

the

of

ratio

deposits, and be¬
capital to de¬

of

banks

many

is

today

smaller than before the war, manybanks prefer to invest primarily

government securities in order
reduce

the

element

of

their funds. If, however, the debt
policy of the Treasury leads to a

reduction in

the

volume

high-coupon bonds and notes and

medium

term

and

...

Largest national bank in New Jersey,

1st National Bank and Trust

risk.

the banks find in the government
bond market a suitable outiet for

constant

of Paterson is staffed and

r area.

Our contacts

to

on

new

always been

cooperate

opportunity
to

are

nation-wide...
can

enterprises in

region.

It has

to

Securities

sound,

knowledge of local conditions

referral business

Municipal

to

fast-growing business and industrial

Corporate
and

equipped

relatively

this

DEALERS

Company

handle referral business in this

be invaluable

UNDERWRITERS

our

on a

policy

to treat

reciprocal basis...

promptly when there is

to

bring profitable business

you.

F. RAYMOND PETERSON

Chairman

Corporate & Municipal Issues

of the Board of Directors

BENJAMIN P. RIAL
President

Dean Witter
MEMBERS
NEW YORK STOCK EXCHANGE
and

other

&

-

.

Co.
-

•

SAN




FRANCISCO

•

LOS

AND

ANGELES

•

SEATTLE

of

•

PORTLAND

SEVEN CONVENIENT OFFICES IN

•

HONOLULU

COMPANY

TRUST

leading Stock Exchanges

14 WALL STREET. NEW YORK 5, N. Y.
BOSTON

PATERSON: Ellison ol Washington

fatorton

PATERSON AND CLIFTON

• Market at

Colt • Broadway at Madison

431 Union Avenue • Straight at

Direct

Private

Wires

BANK

NATIONAL

...

SAN FRANCISCO STOCK EXCHANGE

se¬
than

Treasury

Park

CLIFTON: Main at Clifton ♦ Parker at
MEMBER FEDERAL DEPOSIT INSURANCE

Center

CORPORATION

position

purchasers and

Similarly,

necessary

billion of Series E bonds.are out*

Pacific Coast

those

however,

to this prob¬

of

Inquiries invited

of

as

operation increases. If the
Treasury continues its present pol¬

war

dividuals, the fact that nearly $35

DISTRIBUTORS

difficult to coordinate the policies
the
Reserve authorities with

re¬

supply of mortgages

our

.

Admittedly, the solution of this
problem is not easy. It is even

program

controls

influence

more

This, however, is possible only if

classes of member

ing

the

to

rearmament

considerable

a

the lending and investing pol¬

on

icies of the banks.

even

obligation with a coupon
This would tend to

an

inducements

in

Sale of

Series E Bonds

•

importance
the

of

prevent redemption before matur¬
ity and induce owners to exchange

to

the entire system or in individual
reserve

problems of detail rather than

The Redemption and

on

become

rate of 2.90%,

obligations

vary

will

exchange for matured Se¬

lems in regard to such

of

problem of finding suitable

ries E Bonds; or it may be advis¬
able to offer holders of matured

would have to be solved; but these
are

exercise

The

investments

man¬

vailing economic trends, it can,
through its refunding operations,

Treasury to offer
security with a higher re¬

to

to

inflation

answer

cause

and

earn¬

increased

meet

combating it. If, however,

the

some prob¬

reserve

what

on

demand

than during

pronounced

ing system. Naturally,

a

better
a

period.

increases, the Board of
Governors should have the power
impose such

to

thus

the

in the volume of

increase or-decrease it, depending
on
conditions. The Board should
have the power to impose and

obtain

can

but primarily because the
living is today much higher

adaptable to the American bank*-

excess

reserves

increase their

order

costs.

to

through

od

outlet for their funds

to

more

and

banks in accordance with the vol¬
ume

of 2%

tantamount

since the end of the

In that case, it may be advisable

is

assets

return

posit,

Treasury
the

encounter

cial

these

of

short-term

sition of the Treasury.

when costs are bound to increase.

Obviously,

in

would

rates

of

on

banks

many

cost of

cost of

At

material

a

return of 2.9%

a

stead of

of

well as of consumer loans and the

a

reasons.

floating Federal debt,

timate investors; and at the same
the

various

for

While

supply

ten-year bond seemed highly
desirable during the war, it may
not look so attractive today, part¬

increase

time, in view of the huge

same

in

ings

the

yield,

an

elsewhere

in

ly because individuals

commercial rates is

in short-term

in

a

of

low

will seek

when

is
an

preventing

means

a

Short-Term Rates

before,

1951

in

the careful attention of the

greater

-

program; to assist

sale

the

cial Money Rates and Treasury

As indicated

due

come

$1

bonds.

Differentiation Between Commer¬

aid the rearmament

to

are

worth

over

an

large scale re¬
outstanding obliga¬
tions and the cashing of matured

whenever necessary.

lems before the commercial banks

today

vary

and

that

and

nearly $4 billion in 1952, de¬

demption

such

reserves

the pressing prob¬

up,

keep

amount

the rise in the cost of living.
To

to

excess

costs,

brought about by

wages,

banks

all

order

to

agement policy to the needs of
the commercial banks and the pre¬

of

The Board should have the power

time will be confronted with

same

atively

holders,

banks. It is essential to find

beyond the required cash reserves.

a

the Treasury adjusts its debt

serves

de¬

possibly

short-term obligations with a rel¬

and

Banks to pay a certain rate

serve

to

billion

Confronting Banks

important later

more

16

page

Problems

standing (as of July 31, 1950) and
can be redeemed at the option of
their

Continued

Number 4948

Volume 172

.

.

then tailors its securities to meet
their requirements. The same

icy

with the se¬
be acquired by the com¬

curities to

So far

mercial banks.

the vol¬

as

of bank deposits is concerned,

ume

it

pol¬

be followed

can

makes

the

banks

medium

whether

difference

no

buy

bills or

Treasury

long-term government

or

policies of the

investment

commercial
affected by

will

banks

also

be

the movement of prices

of government

obligations. Should
uncertain international

the highly

military strength of the country.
It also imposes on the Adminis¬
tration
the obligation of giving
the

country

this

liquidity

widen.

It

under

the

assumed,

be

may

that

lar

present crisis imposes
Treasury the obligation

adopt
the

the

long

run

purchasing power
benefits
nobody.

destroys
backbone

country,

the
of

and

a

decline in
of the dol¬

merely
middle class,
the
every
democratic

hence

It

undermines

pillars on which free society

will

only

as

a

the

interest

of

whole and not

principle that
interest paid by the

on

the

of sound

and

serve

aid

policies by the Re¬ tuated since the outbreak of the

authorities will be of great

preventing

rapid

a

in

This in turn will lead

increase

in

further

the volume of deposits.
If

the

proper

continue.

will

incident

Korean

banks

commercial

the

to

measures

are

either to

a

sharp reduction in the
purchasing power of the dollar

or

to drastic controls and regimen¬

the distribution of government se¬

Neither is desirable. In¬
is guided primarily flation would undermine the eco¬
by patriotic and not selfish mo¬ nomic security of many millions
tives, the tremendous productive of Americans living on fixed in¬
capacity of the country, which is comes—and their number is rap¬
still increasing, will enable the idly
growing
because
of
the
United States to spend anywhere broadening of pensions. Controls
once imposed may not be easy to
from $30 to $40 billion on military
preparedness without too serious repeal for a long time to come.
The tasks confronting the peo¬
dislocation of the civilian econ¬

curities among ultimate investors,

omy.

notably .individuals,

individual

the

of

rate

government should remain indefi¬
nitely at extreme low levels, irre¬

spective of the inflationary dan¬
gers that lurk in the background
It

imposes an obligation on the
to utilize all their knowl¬

banks

edge

and

tension

vent
ume

an

of

experience in the
productive credit

and

to

ex¬

in

pre¬

undue incerase in the vol¬

of

through
Adoption
agement

rests.

in

be

economy

based

to

debt management policy

a

which

on

bank

loans
of

a

policy

deposits
and

investments.

sound

by

created

debt

the

man¬

Treasury

taken, and if the attitude of indi¬

tation.

vidual groups

its

If,

own

on

the other hand, each
considers only-

group

tive of the ultimate effects

country,

then

the

on

the

indeed

increase

in

in early

that

great.

the

It

is

be

hoped

people

and

their leaders in government, busi¬

labor

in the

ness,

and

their

will

tremendous

set

to

American

and has been greatly accen¬

prices which
year

ple of the United States today are

selfish interests, irrespec¬

live

up-to

responsibilities.

wiil

preference

and the spread between
and long-term yields

prevail;

short-term

will

the

in

The
the

21,

other high grade obliga¬

ment or

tions;

govern¬

con¬

spiral between
prices and wages. The labor mar¬
ket will be tight, and labor will
be in a strong position to demand
and obtain higher wages. But this
in turn will lead to higher prices,

the

term

and

prevent a new

doned, the banks will not be eager

longer

concern

imposes on industry and labor
the duty to increase production as
much as is humanly possible and

and

acquire

period of

leadership in

It

political situation create fear that
prices of government obligations
may decline sharply, and particu¬
larly that the support of the gov¬
ernment bond market by the Re¬
serve
authorities may be aban¬
to

strong

fusion.

to

obligations.
The

(1305)

The Commercial and Financial Chronicle

.

however,

conditions will the

no

monetary authorities

In

BOMBAY

give up

support of the government
bond market and leave prices of

obligations

whim of the market.

SEW YORK

ANYWHERE IN
OR

the

government

«

THE

WORLD

the

to

The protec¬

tion of the government bond mar¬
ket is necessary, not only

because

is confronted with
of refunding billions of

the

Treasury

the

task

ob¬

dollars of matured and called

borrowing new
money to finance deficits, which
are likely
to increase, but in tiie
ligations

and

of

interests

of

the

whole.

economy

as

a

A

sharp break in govern¬
obligations could set in mo¬

ment

forces which could do untoiu

tion

harm to the economy. Under these

circumstances,

the

arguments

so

often presented for restoring free¬

dom in the government bond mar¬

eliminating the influence

ket and

the market
In

the

are

of

long-ter.Ai

securities

government

Banks

and
trie
short-term

increase

moderate

Treasury

rates,

maintaining
not

the

in

in

the broad policy
low money rates

nearly

adopted
has

over

hardly realistic.

spite of the recent sales by
Reserve

of

authorities

Reserve

the

of

two

undergone

a

decades ago
change. As

J

S

in the future, the
purchase of government bonds in¬
past, so

volves

risks

no

become

not

if

holders do

the

panicky and sell when
A well

the market is weak.

man¬

age:! bank has its portfolio so ar¬

ranged
has

to

The National

to maturity that it never
sell medium or long-term

as

obligations

to

its

meet

cash

re¬

quirements.

is

City Bank of New York

equipped to render its
CORRESPONDENT BANKS

Conclusion
The

problems that confront the
United States today are in many
respects

more

serious than those
the

confronted

which

!

<■

in

around the World

system of private enterprise
the freedom of individuals

the
and

all

I

It is to destroy

is well known.

ers

nation

The aim of the Soviet lead¬

1942.

;

EXCEPTIONAL SERVICE

The principal

the world.

over

before

task

the United States to¬

day is to strengthen our military

preparedness and at the same time
keep our economy sound and our
financial structure healthy.
Mil¬
itary

preparedness, if it leads

inflation,

does

offer

not

to

security

ultimate victory.

or

The

problems

created

by

the

international developments

recent

obligations

impose

on

all

of

us.

They impose on the Congress the
duty

of

military

possible

financing the increased
expenditures as far as
out
of
current
taxes.

Taxation should have two aims: it
should

produce

revenue

to

cover

the
the

necessary

increased

expenditures, and it should siphon
off excess purchasing power. Un¬
less
a
satisfactory
tax
bill
is

the

passed,

danger

of

inflation

will become more serious than

at

present.
The natFaripl emergency imposes
on

to

the

government the obligation
nonmilitary expendi¬

curtail

tures to

the utmost and to

see

to

it that the^miluary appropriations
are

used

wis'ely in increasing the




22

(1306)

The Commercial and Financial Chronicle

.

Thursday, October 5, 1950

.

.

Freedom Doesn't Come Free
Today the leaders of the Amer¬

-

ican

unique

group

p

ma¬

such

general welfare.
American

that

prise.

product

of
Robertson

country? Nature has been
lavish in her gifts of natural rebut

sources;

and

mines, our forfertile soils can be

our

our

elsewhere

in

the

enter-

century of

for

Protec¬

The

free

used so

of

and

enternrise

catch

that

complexities

highly

a

ard of living.

meeting

tend

them

with

dreads

measures

world,

mouth

it

without

No

values

one

highly

more

the

more

limited

supply, and on the basis
judgment to purchase and
hold the commodity in expecta¬
tion of a rise in price and conse¬
quent profit. Nor is it justifiable

than

our

I,

damage

or

which

to

store

ties

of

in

the

think

cause

may

be

upon us a choice ol evils, and we

year

from

we

basement

and

soap

could follow unwise, tampering
with it. But the times are forcing

considering

this

tnat

of this

strains nation, with

of

out

grown

longer is it

that metal will be the

or

decide

subject of increasing demand and

world's most powerful industrial
an unequaled stand-

and

mechanized industrialization, and system

it has

we

difference

our recognition of the ecor

that have

svstem

phrases,

much

lies in
nomic

words

spoken

essential

No

to

chemical

inflation.

on

welfare.

justifiable

enlightened selfishness, governed
by law, which has made us the

country's independ-

our

based upon essentially American
its real meaning. Perhaps I should
principles—particularly the prindefine
the
term,
as
I
use
it. ciple of checks and balances.
Bluntly speaking, free enterprise
.The Founding Fathers' recogis a system of economic selfish- rrized the value of balanced and.
ness.
But it is a selfishness that, interacting forces in government,
to
borrow
from
Lincoln,
has anc* some instinctive wisdom—pe-

our

ests,

the

many

to

ac'n ievements

matched

free

millions
written

been
L.

J.

economic

of

been

Like

amazing

of

ence.

suppose

ahouf

are

causes

the

Reveals banker's part hi fight

'

I

.

What

the

system

have

unparal¬

leled

Renunciation

general

contends in present situation there is need for private renunciation to protect

-distribution of

are

economic

Today, free enterprise calls for
something more.
It calls for a
willing renunciation, where nec¬
essary, of immediate personal ad¬
vantage in order to protect the

the

d

a n

personal

tion of General Welfare

always respected and approved enlightened selfishness governed by law, but

good purposes
that its prod¬
uct

of economic selfishness, the Deputy

system

a

Says initiative is mainspring of free enterprise, and American tradition has

eco-

c

as

Comptroller holds it differs greatly from "laissez faire" economic philosophy.

to operate the

to

Willing

Defining free enterprise

—have proven

nomi

our

/

their ability
American

in

thinking.

Deputy Comptroller of the Currency

difficulty.

the

chine

and

By J. L. ROBERTSON*

of

task

a

Those men —
bankers make up a large part

•and
-of

face

economy

.

that

must have the courage and wisdom to make that choice and not

pair

bring catastrophe upon ourselves
by default by failure to act.

Communist

be¬

staples
expensive a

Such

now.

fish

these

and

scarce

times like these

quanti¬

canned

actions

in

seriously im¬
economic strength. There
many reasons to believe that
can

our

are

Russia

is

today

more
interested
in
having our
culiarly American, apparently—
Most cf us were born and grew
and
intelligent, but so are the fire of American genius—a self- h.as lecl us to apply the same prin- up during the years when Amer- economic strength sapped than in
workers of many other nations. I ishness
that, in a not very mys- ciple to our economy. As large ica was still geographically iso- losing face or battles in Korea.
The perils on our economic front
beiieve sincerely that the catalytic terious manner, has done more to scale business developed, we ree- lated—when
thousands of miles of

The

American

worker

is

trained

added

agent which has caused these ele-

raise

the

the

fuel

of

interest to

economic

standards

the

ognized

of

the

dangerous

trend

insulated

ocean

from the trou-

us

wnich in other countries has led bles of the rest of the world, in
(h.n
4h«
aii
♦l-.nV
economic altruism ever devised.
to cartelization and monopoly; and a militaiy sense at least. Perhaps
greater man me sum or an men
American free enterprise is a we adopted and enforced a series it is for this reason that we find
separate parts is the peculiar^ far
cry from the laissez faire ec0of anti-trust laws. Those laws it difficult'to see and believe the
nomic philosophy of Adam Smith, have not been perfect; at times fac-ts of our
present international
♦An address by Mr. Robertson before
wuiflu fi0,,rjched dnrinf? ihp
their administration has .been situation. Perhaps, having been
the Annual Meeting °f the National Bank
w
h
ments

to

produce

f

results

far

mankind than has

system

any

of

ciation,
Mew

v

as

of

the

American

Bankers

Asso-

Diamond Anniversay Convention,
r~„..
City, Sept. 25, 1950.

....

York

? followed
"
during the cen

that

fUTV
,

the

,

y™

his

Writing

of

,

Wealth of Nations

—the first

■

clumsy
hut

impr0perly motivated;

or

fhov

nrocnr.mH

„

.»

but they have Preserved for us a
competitive economy, with its immeasurable

benefits of efficiency,

inventiveness, acceptance of new
ideas, and, above all, initiative.
In

another

respect, American
enterprise
differs
funda-

free

mentally from the laissez faire
policy which worked pretty well

a

mnimeicfffi

frm/c

hundred

a

rate

years

industry

corpo-

in

magnitude
relative positioh

and

power, the
of labor became

As

ago.

grew

increasingly inse-

brought
•

rock

This ^was,another
which
free
enterprise

on

might have foundered, but again
somewhat blundering wisdom

u°

lished

•

the

enactment of laws
I0™ me.asJjre reestabbalance between
labor,

of

cne

most

our

„

Nebraska—I

am

capped than

respect.

today

even

most

in that

you

fact that

a

engaged in

we are

handi-

more

of

But it remains

broad,

a

deep conflict that is worldwide—
a struggle which could last for the
rest

of

rible

our

lives

until

or

conflagration of

decision.

a

This

is

the

ter-

forces

war

harsh

a

and

painful truth, but not as harsh or
painful as the consequences of
turning our back to it.
jn

this

struggle, we have many
advantages over the enemy; but
there

disadvantages

are

our

u-

in

up

j

inland communities—Broken Bow,

and weak.

cure

1

Qne of these is the

which

is

strength.
every

In

man

freedom

very

the

also

well,

as

of

source

our

totalitarian state,
and every productive
a

management, assuredv effort is shackled—shackled
by
the benefits of our productive cafear 0f secret police and by the
pacity to millions of industrial
interminable
regulations
of
an
workers and their families, and
enormous

a

avoided

j

possible

a

breakdown

of

bureaucracy. That is not
the situation in America. The mil-

economy due to failure of dis- itary

tribution.

The

same

general

occurred and is

parts of

needs for the defense of

existence

occurring in other

national

our

has

process

life—in ag-

plied,

must

and

we

have

but
for

means

will

be

our

sup-

choice

a

accomplishing

of

this,

riculture, in education, in providing homes for American families,

I

we't/t/h eldebt

ment regulation

Perfect

me

There is a choice between detailed, irritating, wasteful govern¬
and comrol through

balance

for—it

would

cannot

be

the

be

hoped

mark

of

a

fif/c

ifetin

other.
and

threatening defects show
strive to correct them, and

as

up, we
to

keep the American system one
which every
worthy element
has its place and has free
scope
in

to make its greatest possible contribution to the general welfare.
.

.

Mainspring of
Enterprise

Free

LAND TITLE
AND

TRUST

COMPANY

.

Broad and Chestnut

Fifth arid Chest nut
TITLE

5228 Chestnut
18 If

est

OFFICES:.'

Street, Philadelphia

Chelten Avenue.

7059 Castor Avenue,

Philadelphia

2802 South Broad Street,
6908 Market

Philadelphia

Philadelphia

Street, Upper Darby

Homestead and Colt man
Streets, Jenhintotvn
501 Swede Street. Norristoiai

Southwest Comer Market &
Iligli Streets, West Chester

do

buy

and

Americans

sell,

to

in

ourselves

to

choose the path of restraint and
self-control, we will be able to
supply all

defense needs, keep
our economy strong and dynamic,
save
ourselves from the annoyour

and

ances

waste

of

monstrous

a

same

world

a

that

js

free

are

change

their

to invent and

vertise and

have
each

knows

the

rewards for

Two

book

the

greater
will

greater

man

of

Sumner

this

liberty

when
as

"the

powers

own

status

by
ex-

our

has al-

respected and approved the

action

that

or

will

business interests

own

our

market, will

it strengthen our competitive

will

it

result

statement

sheet?

There

with these

they
that

cient.

and
But

hour in
,

,,

po-

better

a

balance

is

nothing wrong
considerations, in ordi-

have

strong

in
and

times—quite
are the very

nary

own

welfare."

The American tradition
ways

his

de-

who is guaranteed

for his

proposed

benefit

income

stated

he

institutions the

this

—will it broaden

sition,

Man,"

Graham

thinking has always re¬
volved about the question whether

his

himself and his fam-

''Forgotten

business

the

be

in

civil

of the

that

because

the

essence

fined

greatly

us

generations ago,

on

William
the

market; and all of

benefited

efforts,
ily.

new
businesses,
manufacture, to aa-

elusive employment of all his




faith

time demonstrate to

jobs and to start

law and civil

MEMBER FEDERAL DEPOSIT INSURANCE
CORPORATION

the

on

have the good sense

we

watching our every move the
The mainspring of the effective
power
of democratic capitalism,
activity of
our
free enterprise To do this will be one of the hardsystem is initiative; and, as I said est jobs we have ever done,
before, that
initiatiye stems from
Heretofore the best American
self-interest.

PH I LAD ELPHIA

in-

own

self-discipline

If

the

hand,

one

our

network of rules, and at the

.

Initiative the

BANK

telligent

static rather than dynamic nation,

But

the

on

the

considerations

made

our

expanding
the

economy

and

necessities

history, when
,

contrary;

,

as

efli-

of

this

General
,

•

Marshall has warned
are

down,"

changes in

us, the chips
demand definite

our

business thinking

as

Remember

CM.™

ppn-

Division

real and as foreboding
military dangers we face.

are

any

after Korea

authorities
the

what happened just
Day when responsible
sought to warn us of

dangers

ahead:

how

people

throughout
jumped to act in their

jittery

the

land

own

indi¬

vidual interest, without regard for
the common good; how many men
and

who

women,

selves

them¬

regard

intelligent

as

and

morally

upright citizens, found tnemselves
propelled headlong into a race of

self-interest; how many of them
pushed their way to the counters
to buy unneeded suits and nylons,
refrigerators and televisions!
In

free

a

there

will

land

such

always

principled

be

as

who

persons

ours,

few

a

un¬

have

no

regard for the public welfare, and
who

in

time

of

crisis

will

jump

into the lifeboat and cut the ropes
before anyone else can get aboard.
But the great majority of those

who

rush

to

advance

their

own

immediate self-interest at the

of the rest of

pense
of

thoughtlessness.

do

us

They

ex¬

out

so

confuse

freedom

with license, being too
shortsighted to see the long-range
evil of a given act.
It is much
easier to close one's eyes and jus¬

tify the acquisition of
essary

article

than

terms of the effect
of

thousands

or

one

unnec¬

think

to

in

the economy

011

millions

even

of

similar acts.
I

firmly believe this element of

weakness in

national make-up
through strengthf
ening leadership. Today we know
our

can

be corrected

too

much

about

psychology
panic or

mass

to doubt that if, through

fear,

thoughtlessness

ness, we try
vidual
selves

"each

in

for

man

selfish¬

or

enrich

to

our

indi¬

attitude

an

himself

of

the

and

devil

take the hindmost," so will
neighbor. The persuasive force

our

of

example is surprisingly strong;

the

of action of

course

a

few

com¬

munity leaders is often enough to
keep community morality on a

high—or

low—plane.

a

Application to

Bankers

The

application of all of this to
bankers is plain enough. The time
has

arrived

when

certain

aspects

of the individual freedom
sess

for

must

a

time

tarily

subordinated

nomic

welfare

understood,
ever

of

of

more

be

It

so

eco¬

must

now

before, first, that

pos¬

volun¬

the

to

all.

we

our

be

than

system

deposit

signed

banking was not de¬
solely to provide banks

with relatively free funds to use
exclusively for proiit; second, that
banks must be regarded and re¬
spected
as
quasi-public institu¬

tions, trusteed in

your hands; and,
consequently, that it is the func¬

tion of
of

banks to channel the flow

credit

will

with

assure

a

the

sound

wisdom

that

economy

as

Volume 172

Number 4948

.

The Commercial and Financial Chronicle

.

.

well

be

for

of

as
a
firm military defense
democracy. Failure to perform

made

easier

few

banks

by the example
striving to do a

(1307)

and faced and

unceasingly fought,

nately,

those poles are not com¬
pletely divergent. The course be¬

business

keeping always in mind the fact
that if American bankers apply to

beyond their capital capacity.

this task the full measure of their

with

thought and ability, if they con¬

future

duct their institutions with

full

tion

realization of the conflicting needs

loss

bankers, the

profits than
soundness, who have been lulled
into a false sense of safety by the

dreadful consequences if we should

relative absence of losses in recent

years,

tem, and the dangers to both in
stressing too much the absolute
requirements of either, they can

through the democratic

permit this jinni-like creature to
get out of hand—which is not un¬

face their consciences with

must

this function will wreck much that
hold precious.

we

and

age

It will

nourish

that

encour¬

diabolical

creature

called
inflation, which
already shattered some of our

has

defenses.

It

spell out

likely

is

to you, as

if

remain

we

continue

and

else to

to

unnecessary

to

complacent

rely

someone

on

class of

any one group or

persons

has been inflation's

tenance.

We

that

all

and

the

excep

must

admit

have

it,

banking fraternity is

no

The blame rests largely

on.

far

There

nonessential

of

are

a

bankers

few

be thankful there
are

more

are

so

(let

us

few) who

anxious for

as well as the belief that
government can't afford to let
them fail.
That thinking has too

often

extravagantly lib¬
of depositors' funds

brought
lending

and the counterpart refusal to risk
more

of

stockholders'

funds

in

sus¬

frankly

courted

croups

volume

eral

keep it under control.

You and I cannot honestly blame
for what

a

building
ture

for

an

adequate capital struc¬

their

expanding

insti¬

this must

be

acknowledged

war-mobilized

a

economy

and

and

the American free enterprise sys¬

and

ance

pride.

assur¬

As Emerson said:

"Nothing is at last sacred but the
integrity of our own mind."
Yes,

you

and the other leaders

of the American economy are fac¬

If

the

two

skill

and

must

be

steered

if the
path of American civiliza¬

is

to

of

be

more

courage,

traversed

and

more

without
freedom

independence.
problems

our

are

to be solved

process of
intelligent, self-disciplined action
by our people as a whole, there
be

leaders

in

thought and
action to whom the people can
look for both precept and example.
You bankers fit that role—by set¬
ting a true standard for others to
follow,

you

can

reorient the atti¬

Bernard

Shaw

once

cynically said: "Liberty means re¬
sponsibility.
That is why most
it."

dread

men

people,
those

The

American

the

under

best

suited

leadership of
by training and

position to lead, can and must
prove themselves worthy
of lib¬
erty in accomplishing and dis¬
charging
t h e ir
responsibilities.
Only in this way can we preserve
the fundamentals of the

free,

un-

regimented economic system that
has been the wonder of the world.

Only
to

a

in

this

way

can

prove

we

watching world that although

freedom doesn't

come

people

do pay the price

free,

a

free

tude of American business and the

ing
the

tutions.
All

of

a

tween

George

23

a

task of unique difficulty, for

compass

drawn

needle will

toward

two

now

poles.

be

Fortu¬

American

people with respect to
economic goals and economic con¬
duct.

with

can

and

intelligence,

courage,

and

self-discipline.

the inertia of all groups, based
in too many cases on the hope of
on

getting
and

something

the

belief

ultimateW

■*\

government

.

bag."
The

three

tors which
all

and

(1)

most

important
evils

attendant

spending

by

J

fac¬

inflation

work toward

its

v

"hold the

will

and

can

nothing,

for

that

;1

are:

in

government

**

exces;

(2)

intake from the people;

cu

spending

business
and

in

k

individuals

by

and
of real needs;

excess

(3) creation of credit beyond

what is essential for defense pur¬
poses

and minimum civilian needs.

Let theie

be

mistake about it,

no

notwithstanding
difficulties
trend in
be

the

tremendous

involved,

the

present

all three categories must

checked

diately.
vanced

a

imme¬

already

ad¬

far that correction

so

call for

reversed

and

will

They

have

strong dose of

very

very

unplea ant medicine—to be taken
voluntarily,

as

involuntarily.
the

I

am

If

prescription

work

for

suggesting,
fail to

we

fervently
peace, it

and
and

stability

or

heed

will become apparent all too soon
that what has

happened elsewhere

happen here.

can

Banker's

Inflation

in

Part

Struggle
The

banker's

ficult.

It

does

this

pre¬

especially dif¬

not call

simpl.y for

the role of the upright

assuming
servant

in

part

scribed treatment is

of

duty, sternly and un¬
selfishly refusing loan after loan.
It calls for the utmost in public
duty coupled with judgment

and

controlled

can

by it.

The banker

longer think only of the com¬
mercial integrity of his customer,
no

the

business

soundness

of

the

the ade¬
quacy of collateral.
He must also
weigh more difficult and intangi¬
ble
considerations; for example,
whether
the proposed
inventory
increase is reasonably needed for
expansion,

proposeu

or

i

the customer's maximum contribu¬
tion

the

to

military

and

civilian

whether
a
thousand
homes in the community should
have new refrigerators or should
struggle along another year with
the old.
He must gauge over-all
economy;

quantity

as

possible, require others to do like¬
wise
oy
refusing to
buy such
from dealers
companies, merchants
or manufacturers.
In addition, he
must scrutinize closely every loan
paper

sight

application, with

a

BANK

FOR

NEW

YORK,

THE

NATION,

Frankfurt/Main
Heidelberg

AND

THE

WORLD

Stuttgart
Tokyo

view to weed¬

ing out those which smack of
speculation—in securities or com¬
modities, in real estate or non¬
essential inventories, or any "get-

rich-quick", category,

Osaka

The Chase

provides its correspondent hanks with services

Havana
San Juan

covering

every

possible point of need. Through Chase branches,

Panama

Colon

:v These are not easy decisions to
Inevitably there will be

representatives and correspondents here and abroad,

mistakes; inevitably there will be
misunderstanding and conflict and

there is

make.

antagonism.
Even

cult

continue
of

which

to

his

so

making these diffi¬

the

maintain
own

the

bank cannot reach.

Offices of

Representatives

Cwor(d^wide

BANKING

Mexico, D. F.
Buenos Aires

upon

Rome

much depends—tne well-

the

nation.

This

demands

for

by stock¬

ever

higher wages

or

more

THE

CHASE

NATIONAL

BANK

Cairo

task

OF

THE

CITY

OF

NEW

Bombay

YORK

higher

dividends, and employee demands
for

that your

sound¬

institution,

will not be made easier

holder

commercially important place in the world

must

banker

being of the community and, col¬
lectively,

Cristobal
Balboa

no

'

while

decisions,

ness

BRANCHES

London

A

unseen

finance

or

OVERSEAS

well as quality in con¬
and, to the extent

credit

sumer

THE
Member Federal Deposit Insurance Corporation

CHASE

BANK

Paris

liberal
*

pensions, even in the face of re¬
ducing net income; and it will not




Hong Kong

24

The Commercial and Financial Chronicle

(1308)

.

Thursday, October 5, 1950

.

.

Dangers of Liberalized Mortgage Lending
The
the

Korean

midst

broke

war

the

of

residential

building
American history.
Until

in

out

Professor of Finance, New York

in

boom

on

lending and mortgage guarantees, Dr. Bogen

year

istration curb activities and return to its

937,000 dwell¬
ing units were
1949,

tion.

In

in midst of unprecedented building boom,

we are

t.us

700,000.
We
starting

I.

Jules

Dr.

Bogen

were

in

this country

was

year

ficial

unns

fixianced

were

with

mortgages guaranteed by the Vet¬
Administration

insured

or

being overstimulated

overwhelming.

is

Of¬

the

that

are

net

in Ue

event of default tney cauld trans¬

form

bond

ernment

eU'ect

into either

loan

the

or

gov¬

in

Being

casn.

homes'in

the

literal

sense

of

thus increasing

more

boims

t'is

to

The Council
was

should

lor

aim

Home

building
What

a

Over-liberalization of Mortgage

the

War

II, the condi¬

mortgages by Federal

guaranty o

uli to home building

eralized.

The Housing Act of

the latest

of

these

further

had

was

the

of

the

building

so

that veterans could

ings and Mortgage Division of the Ameri¬

Sept. 25,

Convention,

New

York

cause

If

conditions.

of

Holders

guaranteed

in¬

mortgages

There is every

them.

tect

reason

to

are

guaranties would be honored; else,

expect that

the insurance and

the

could

will

to

new

tivity by their means?

stimulate

hope

government

housing

construction
In

our

at

later

some

managed

economy,

more

likely to step in to sustain
the level of building through fur¬
ther liberalization and expansion
of insurance and guaranties, and

without

1950,

programs.

initial

cash

a

Housing

Act

1949

of

year

under

lic

135,000

housing

many as

pay¬

up

in

dent's

spread

a

dwelling

of

erec¬

units

a

federally aided pub¬

while

program,

as

200,000 units could be put

one

the

with

year

long period of

a

narcing

Anni¬

this
a

basis

it and the

less

than

makes

"free gift" to

veteran, since he pays

City,

1950.

on

virtually

Fi-

years.

approval.

Presi¬

if

public

But

no

housing is to become

rent

he

a

maintaining employment and

perity,

cash for

has

means

a

instead

of

a

future

Government

building

ac¬

But these

of

no

of

tell¬

well

as

lenders

expected

closure

of

mortgages

agencies

by

Fed¬

be curtailed

may

or

by order of the Presi¬

It

is

too

and

will

be

early

how

long

curtailed

as

how far,

say

as

that is

activity
result

a

and the

war

rearmament
cur

to

building

of

intensive:

bound

to

oc¬

result of this evidence of

a

the aggressive intentions of Com¬

munist
curbs

Russia.

Not

only

direct

mortgage credit, but also

on

for

as

general

uncertainty will reduce
activity.
It is not un¬

building

reasonable to conclude that when'

projects launcned befoie June 25
have

been

completed,

housing
below the 1,000,000-dwelling-unit level.
With a

starts

will drop

limited war,
siderable

we

have

may

volume of

a

con¬

building, but

proceedings,

of

bring fore¬ it will probably be attuned mucfr
and holders closer to the rate of new family
conventional mortgages formation than was the case in the

many

then find

could

to

themselves in

an

unenviable position.
In

overstimulated

the

War,

wards

trend

overbuilding
than

homes,
govern¬

private

credit

in mortgage lending, and eventual
resort to public

housing to sustain
a time when the

employment at

At

to¬

was

of

upon

reliance

rather

ment

building

boom

of

the first half of this year.

brief, at the outbreak of the

Korean

the

Crossroads

The international crisis precipi¬
tated by the communist invasion
of South Korea has thus

given this

country an opportunity to reap¬
praise recent building and mort¬

policies, to weigh the dan¬
to which they pointed, and to

gage

inventory of homes would already

gers

have become excessive because of

consider

overstimulation

avoided for the future.

Federal

of

insurance

building

and

by

guaranties

of mortgages.

pros¬

method

eradicating slums, there is

The

Changed

Communist
Korea

for

South

of

The road

we

were

best be

following

un¬

til June 25 pointed to the progres¬
sive substitution
of
government

Situation

invasion

these could

how

private

in

credit

construction.

home

financing
More

and

has

radically affected the more, mortgage loans were being
ing to what lengths it could be outlook for home building and made in reliance upon Federal,
mortgage lending.
rather than private, credit. Where
expanded. Public housing projects,
Instead
of
stimulating
home lenders did not want to take gov¬
building to sustain employment, ernment-insured
loans
because

monthly service is often
the

a

eral

wholesale

already authorized the

tion

down

purchase

The

projects

on

of

noon

say,

discourage

tnat will

emerge

and

we

homes than
of

de¬

loans

revived

restrictions

look to tne rising costs, shortages of materials
insurance and guaranties to pro¬ and labor in some
areas, and the

i.ow

surplus

of

number

would, needless to

ilies,

a

the

mortgage loans and fore¬

on

such

required to house American fam¬

privileges,

ment and with amortization

home

Diamond

a

instability.

use

'Address by Dr. Bogen before the Sav¬
Association

Overbuilding is

economic

build many more

and expanded

insurance and guaranty

Federal Gov¬

ernment to finance home

dangers involved in this
overstimulated building boom are

liberalizations,

reduced

payments required

over

of the credit of the

The

agencies had been repeatedly lib¬ above all through public housing

house

versary

Obviously,

closures would rise sharply under
sured

than

tions governing the insurance and

way

causes

stim¬

however, the government is

Credit

in the United

were

whereas

a

construction.

home

new

providing

artificial

powerful

to

date.

clearly be¬

was

government

dollars,

new

Most important among the stim¬

Bankers

to

the Korean

Lsues.

1,509,000
as

ulus

obvious.

interest;

4y4%

billion

of

this overstimulation?

can

existing housing.

building in future yeais, leading contingent obligations would con¬
to a sharp drop in the volume of stitute a real
problem for the Fed¬

employment.

ing overstimulated
States.

o:

suggesting

dwelling units annually
to assure full

than

Since World

becoming
high level of

was

home construction

we

bought by the Federal
Mortgage Association

threaten

the

These

dent.

sur¬

space and fur¬
values and rents of

Treasury bonds yielded less than
2V2% even for the longest term

than

Economic Advisers

that

National

guarantee^

and

tne mortgages carried

the growth in the

as

economy

habituated

since

and

-t

number of families.
Our

lenders

mai.y

The inventory of hous¬

fast

have been

obligations,

government
insured

a

mortgages were more attractive to

as

ther

features,

iurther

country

was

they

unattractive

Oiner

tne

to

of dwelling

attractive to the lenders, for

home

is now around
600,000. Only about 50,000 dwell¬
ing units are demolished or de¬
stroyed in the course of an aver¬
age year, so that there is only a
negligible
replacement
demand

twice

plus

(Fannie May) to tne tune of sev¬ faults

these

that term.

or

eral

estimates

this

would then contribute

because of the low interest rate

by the Federal Housing Adminis¬

that

employment

paying. Where loans have not been
absorbed by institutional lenders

tration. Sucn mortgages were very

evidence

sustain

to

can

estate

Aug. 3. At
time, the insurance and

same

eral

launched

now

real

of

under

after

guaranties

40% higher

increase in the number of families

ing

the

market.

uuri-g the first half

than in the record year j.949.

building

700,000 dwelling

the first six months of

in

year

erans

of the year at a rate
Statistical

apply

may

Holds Korean crisis furnishes opportunity for return to

instability.

extremely liberal credit terms.

Half of the

started

year,1

homes

credit

sumer

Regu'ation W.

of

cause

System

down payments and1

terms

suspended
on

of

months

lor

fertile

of

construction loans, just as on con¬

started

units

this

in

a

pre¬

mortgage lending.
Governors of the

over

Reserve

maximum

any

providing for direct

set minimum

should be limited to slum eradica¬

programs

sound mortgage

and in the first

this

Federal Housing Admin¬

begun;

were

new

public housing

1,-

over

000,000

six

Says

economic

some¬

what'

Holds

surance.

urges

in

Board

Federal

original status of mutual mortgage in¬

was

when

started.

The

Warning against over-stimulating of home building by government liberalized

the

record

1925,

law

controls

greatest home

building

gone much further than

University

vious

last

year,

The Defense Production Act has

By JULES I. BOGEN*

intensive

most

been

„

Federal

the

avowedly
struction
tion.

Government

is

now

seeking to curb con¬
activity to combat infla¬

The

government

plans

to

double its military expenditure by
the end of the current fiscal year,

they doubted their intrinsic sound¬
gage

Association

sorb

the

increase such outlays

to

ther in the years

fur¬

Since

to come.

only

a gradual expansion of total
production is to be expected be¬
cause
the economy was already
operating very close to capacity
pre-Korea, a coniraction of civil¬

ian

spending
the

offset

is

sought to
military

being

of

Because

spending.'

expansion

government

stimulation played

so

important

a

part in expanding new home con¬
much to reduce

do

As

early

July 18, the Presi¬

as

dent

directed

eral

agencies

down

the

of

Fed¬

to

cut

insurance

They

mortgages.

increases

in

construction

following July 1, to step

down

payments

up

the
home, and to reduce
the maximum mortgage on singleby

5%

of

value of the

family
ur
o

Western

better

serve

California,




that

could

be

in¬

The

additional insurance authorization

Oregon, Washingtor
points West.

ona,

all

homes

sured from $16,000 to $14,000.

correspondent

of

the FHA under the

ing act
the
FOURTH

AT

MAIN

Member Federal

•

LOS ANGELES

(54)

was

could further weaken the position
of

hous¬

made $650 million by

the law.

ing

goal

30,000 units.

1950

to

than

rather

less,

of

more,

building and financing.
With

a

reduced volume of

construction
ment

will

during

period,

faults

on

be

the

the

danger

outstanding

new

rearma¬

of

greatly reduced.

the

duce

face

gages, to be

de¬

mortgages

Rather,

there will be time in which to
amounts

of

re¬

mort¬

better prepared for

a

possible decline in values in later
years.

The

curtailment

insurance

and

of

government

guaranty activities

mortgage-buying

operations

during this emergency should

go

of

have the option of tak¬

government intervention in home

limited the starts under their pro¬

last half

we

different road towards the

a

made

the

through;

owner

acding to the supply of dwellings
when a surplus already exists.
;

Federal public housing authorities

in

mortgage lender and

estate

real

President, instead of the $1,- and

gram

the

both

the

*

new

250 million authorized by

Deposit Insurance Corporation

ing program.
In future depress
sions, especially if accompanied
by a low level of private build-i
ing, large public housing projects
designed to sustain employment

and

told to ignore in their valua¬

tions
costs

to

concerned

Federal

on

guaranties
were

letters

Looming ominously in the back¬

can now

building.

new

was there to ab¬
rejected as sub¬

ground has been the public hous¬

Now

struction, the government

loans

standard.
-.

and

the Federal National Mort¬

ness,

permanent.

be

We should not

back, even when the interna¬

tional situation will permit, to the
unrestrained

overstimulation

of

Volume 172

first

half

substituting
The

deal

Is Dollar

this

return
of FHA as

the

for

program

by

mutual
mortgage fund, with reasonable
safeguards against wholesale fu¬
ture defaults.
Above all, public

wave

their
,

ited

of

indirectly—for the

or

a

of

purpose

eliminating breeding places of dis¬
ease
and crime.
They must not
be used as a means of sustaining

depend

income

housing"
further

for

cuse

role

of

have an
expanding

to

factor

can

role.

But many

Dr.

modify and readjust their own

thinking with this end in view.

They

to

seek

will

want to
conventional

sound

regarded
trends

gap

as to lessen the pres¬
Washington to liberal¬
insurance and guaranties by

goverment.

so

long time.

is

projects,
so
that pressure
group demands for public housing
will have less justification.

a

does not

position.

words, the job of mort¬

ered

lenders is to make govern¬

building
have0

industries

Other
that

the

best

For

un¬

possible.

as

found

to combat so¬
cialism is to solve their problems
the

within

way

industry

that gov¬

so

ernment intervention is no

demanded.

out

mean,

this

pluses to the dollar area

until

and

assistance

of financing the import of essential goods from

sterling area.

result in an increase of the British gold

Britain

is

able to

experiments

beyond the

for her to indulge iiu

for

As

of sterling to $3

considered seriously in official
because
reason

>the government is not

or

above, it is not

circles. The rumors are welcomed,

they tend to strengthen

nate the rumors.

the

confidence in sterling.

But it has not the slightest

intention to weaken

its present level, under¬
in the changed circumstances. Realism is the

position of sterling by raising it from

valued as it may

be

keynote of the official
for the sake of

policy, and no risks are likely to be

misplaced considerations of prestige.

powerful support for the so-

called Plumb Plan for government

ownership of the railroads to as¬

Connecticut's

adequate service to shippers
travelers.

railroads

when the
job that

Today,
doing

are

a

Oldest

gives general satisfaction, we do
not hear government ownership
mentioned
in
any
responsible

Trust

quarter.

not
job, many
people believed; and there de¬
veloped powerful support for the
Mortgage

doing

good

a

movement

lenders
enough

were

the

have

to

Company

govern¬

expand its role in this field.
a good deal of the

ment

WITH

We know that

liberalization of in¬
and guaranties came right
for

support
surance

the lenders

from
But

we

have

themselves.

CONVENIENTLY
,

to

have

LOCATED

fortunate

been
seen

OFFICES

THROUGHOUT THE STATE

★

this
path of reliance upon
government insurance and guar¬

enough

FOURTEEN

where

primrose
anties

time,

was

leading.

In the nick of

John B. Byrne

have been given the op¬

we

President

portunity to get off the road that
leads
ment

to

more

in

intervention

and home
the

and

more

road

govern¬

mortgage

building, and to get on
that leads to a sound,

Lester E.

Shippee

Executive Vice-President

healthy mortgage market and a
home building industry that de¬

pends primarily on private enter¬

prise, not

government credit.

on

It would be

a

pity if this

get back
road is missed. Let

tunity

of

to

on
us

oppor¬

the

right

THE

HARTFORD-CONNECTICUT TRUST COt
760

do this job

eleventh hour.




ST., HARTFORD

Member Federal Reserve

salvaging private enterprise in

housing and home financing that
fate
has
made
possible at the

MAIN

>

Member Federal Deposit

For this

likely to go out of its way to elimi¬

longer

and

has
r

revaluation

the

Following World War

sure

of the

degree to which it

I, for example, when the railroads
were
in very
bad shape, there
was

the

result of Marshall aid. Unlesa
manage without external financial1,

already been adopted.

with the British dollar

to be satisfactory.

to bear in mind that the increase

there would be no justification

convertibility

scarcity in the sterling area as a whole

may appear

countries which have earned it

moral right to claim it for themselves for

It is also necessary

Britain's dollar deficit is still very large, and it is cov¬
of the dollar surplus of other sterling area countries.

the moment

purpose

every

gold reserve has been largely the

tin,
rising sharply. The combined effect

however, that all is well

large proportion of the gold is merely

dollar area.

But it must
be borne in mind that there is a tendency on the part of these
countries with dollar surpluses to use more of the dollars they
earn.
For the present they are content to accept sterling in pay¬
ment for their dollars, so that the proceeds of their export sur¬

ment intervention in the mortgage

far

the

product been stepped up by rearma¬

substantial influx of dollars to the
The cessation of dollar

bear in mind that a very

and which have

remain in existence for

business boom but the prices of wool,

rubber, etc., have also been

ing

market and in home

we

The improvement in the British gold reserve

ment, stockpiling and

slum clearance and low-cost hous¬

necessary so

is still in existence and is likely to

Nevertheless, the safety

inadequate, especially if

held in trust for the sterling area

Britain and Europe are concerned, the dollar

American demand for their

They will want to help finance

gage

as

they are not keen

It is true, in the meantime Britain has

succeeded in improving her trade balance.

have

As far

risking its repetition.

margin of her gold reserve is still highly

be

is due
almost entirely to the favorable change in the trade balances of
raw
material producing sterling area countries.
Not only has

a

upon

In other

must

sterling resulted in heavy losses of dollars,,

is still fresh in the minds of most people, and
on

its

The lesson of 1947, when the premature restora¬

tion of convertibility of

considerably during
optimism

position of sterling will have to become much stronger

the British Government could even think of restoring

full convertibility.

being grossly exaggerated.
So are similar optimistic
become noticeable in other Western European

as

that

countries.

mortgage

the

The

before

reserve

Beyond doubt, the situation has improved
months.
Nevertheless this wave of

out

ize

gold

recent

aggressively and go as far
liberalizing terms as prudence

sure

nomenon

and feel that most of the

loans

permits,

Although that market is not very important, the phe¬
is well worth bearing in mind, if only in order to
counteract unwarranted optimism.

market.

optimism is that in many

convertibility of sterling and in favor of its
upward revaluation to $3 or above. The opti¬
mists envisage
a
continued increase of the

Einzig

sterling area holdings of sterling
depreciation of "transferable sterling" in the
In spite of persistent talk about the possi¬

ings of sterling area countries has managed somehow to circum¬
vent exchange control and
found its way to the New York,

and an improvement of the trade balance,
country's postwar troubles in the sphere
of international trade and exchanges are now coming to an end.

British

seek safety
by the careful selection of mort¬
gages and by setting up reserves
out of income for future losses,
rather than by reliance upon the
sweet drug of government insur¬
ance
and guaranties.
They will want

Paul

maintain

area.

bility of an upward revaluation of sterling, and in spite of the
premium on forward sterling, the quotation of transferable ster¬
ling has declined to a discount of some 7V2%. This is believed
to be due to the fact that some of the increased sterling hold¬

quarters in Britain views have been expressed
in favor of an early restoration of the full

lenders will have

a

market.

York

New

been, however, the decline of the
reserve in recent months.

States gold

The result of this

where

dollar

The result of the increase of

balances has been

main

turned.

enterprise, rather than
will play the major

sale of gold or dollars to the British gold reserve.

and increase exports to the

the last six months or so has conveyed
impression that the tide has now definitely

the

government,

in

order

ing requirements of rearmament and by the efforts to

many

ing

do much
help assure that the nation
will choose the road to a healthy
private

The

optimism.

the export surpluses of other sterling area countries
present. The situation could be remedied
countries should increase materially,
to offset the increase of their sterling balances arising

present, however, the capacity of British industries to produce
for additional exports to the sterling area is limited by the grow¬

years the flow of gold has been
incessantly in the direction of the
United States. The reversal of that flow dur¬
For

to

home and mortgage market

this

\

ideal state of affairs that Britain should

At

almost

construction.

Mortgage lenders

has

United

ex¬

the
residential

government in

towards

tributed

an

exports to these

through the

ican industries with rearmament have all con¬

for

need

Certainly, we do
not
start subsidizing "middle

want to

to

British

in

wave

additional

housing.

are

on

if

through the rise in the price of sterling area
raw materials, and the preoccupation of Amer¬

economic

governments

to the extent she does at

employment, regardless of the

full

Their

of dollars from the British reserve to which

larger amounts

It is therefore not

LONDON, Eng.—There has been developing lately in Britain
of optimism about the prospects of a termination of the
dollar scarcity.
The increase of the British gold reserve since
the devaluation of sterling, the improvement of the terms of trade
between the sterling area and the dollar area

must be lim¬
eradication directly

States.

from /the United

imports

they have contributed substantially.

for influx of dollars is not ideal state of affairs.

programs

slum

to

countries to hold sterling.

likely to be exposed to growing pressure to insist on the allocation

"

housing

of these

the part

on

time, however, they are anxious to proceed with their

same

urgent development schemes, and this necessitates an increase of

Einzig, though stating position of sterling has consider¬

of optimism
regarding probable return to sterling convertibility is not
warranted.
Looks for long continuance of dollar gap, and
maintains dependence of Britain on sterling area countries

government-operated

a

At the

ably improved in recent months, contends

actuarially

insurance of mortgages

sound

Dr.

should

We

good.

to the original concept

ing willingness

PAUL EINZIG

great

a

a

balances held by sterling area

Scarcity Ending?

By

25

corresponding increase of the amount of sterling
countries. Fortunately, confidence
in sterling is on the increase, and for this reason there is a grow¬
and

reserve

that

of

original FHA did

of

(1309)

The Commercial and Financial Chronicle

.

.

credit.

vate

a

.

prevailed
year, by
government for pri¬

lending

mortgage
in the

Number 4948

System

Insurance Corp.

>

taken

i

26

The Commercial and Financial Chronicle

(1310)

Preserve and Strengthen
strengthen the
has been the
battle cry of the State Bank Divi¬
sion during the past 11 months;

Mr. Bennett, in urging

national

ing system, contends it

tran¬

preserves

first,
of the

spired:
Bank

tion of

Bill; and sec¬
the de¬

ond,

No.

Plan

1

independence
of
E.

the

Office

of

Bennett

the

Comp¬

troller

Currency.
been

has

the

of

The Bank Merger Bill
characterized

of

one

as

the most important

in

enacted

ures

banking meas¬
recent years.
It

gives added strength to the dual
banking system by placing the
conversion or merger of national
banks into state banks on a parity
with the conversion or merger of
into

banks

state

banks.

national

a national bank
convert or
merge

be

in

used

bank

liquidate

it

under a
required to

was

its

lose

corporate
identity. This created problems of
taxation and other disadvantages.
The

and

legislation

overcome

It

took

almost

these

was
designed
disadvantages.

three

nearly

continuous

complish

to

of

elfort

to

ac¬

this

result, and hence¬
forth it will require the combined
energies of both the state and the
national
systems
to
consolidate
thfe gains we have made in this
effort to strengthen tne dual sys-

te,?v;
*

v;

.With

this

.

:/

..

legislation

into

state

a

or

bank

bank
with

merge

a

state

without

necessity

of

least

five

proval

states

by the state

partment before

require

now

a

banking

ap¬

de¬

state bank may

transfer to the national bank sys¬

tem.

They include Colorado, Idaho,
Michigan, Missouri, and Washing¬

On

conversion
state

a

national into

a

from

bank,
a

or

Par.

2

the

address

State

Bank

by

Mr.

Division

Bankers
Association,
Sept. 25, 1950.

Bennett
of

New

before

the American

York

City,

you

for their broad understanding
and interpretation of this legis¬

legislation

national

liquidated in

bank
a

had

conform

to

its

to

the

new

corporate

version

identity

into

or

should

and

meeting.

I

all to start a
state at once to

bill?"

strengthen the dual banking sys¬

the

the

full

benefit

of

this

National and State Banks

the

there

years

degree

some

a

are

now

between

dependence
Office

ob¬

closer together than ever

in

the

history of banking.
It is signficant that many prom¬

follow

in the effort to secure the passage

resulting

were

tity"
that
bank

the

as

should

also

national

in

a

to

It

national

shall

banking

of

be

is

system

the

best

one

component

depends

upon

the strength

of the other, and that

both have

reference to the state

bank.

common

a

cause

in the

preservation of the system.

Every

state

ing laws'on
ence

the

banking (■ system
in
the
world.
They recognized that the strength

provision

a.,

document

any

considered

bank.

the

repeat

reference

a

Bank Merger
Bill. They
guided by the belief that the

dual

en¬

association

should

model act

as

should

own

I

bank¬

these points. Refer¬
also

be

made

to

the

the

to bank merger and

let

cannot

without

the

occasion

pass

paying special tribute to

Office

of the

the Currency, and

we

action
clouds

particularly to

in¬

Comptroller's

the

of

threatened

was

sys¬

the

without

treme

utive Committee of the State Bank

Division

unanimous in oppos¬

was

ing the approval of the Plan. With
the

of

concurrence

Division testified
ate

the

the

Executive

officers

the

Committee,

of

your

before the Sen¬

Committee, protesting against
proposed abolition of the in¬
of

dependence

Office

This

Office.

of

test

time.

Comptroller's

the

It

has

has

the

stood

been

never

of

accused

political maneuvering.
It
has
maintained
its
dignity
throughout 86 years. Therefore, I
am pleased to report that the part
of
Reorganization
Plan
No.
1
which related to the Comptroller's

the

defeated.

was

ticularly

gratifying
of

course

plan,

the

is

It

that

testimony

the

John

Honorable

on

W.

bruise.

by

it

do

that

a

vigorous

try.

It

maker
tem

only

not

the

for

but

acts

state

also

as

a

pace¬

banking sys¬
to
provide

serves

fected

increases

I

like

would

to

you

a

adapted

wish

as

their

to

achieve

and

acceptahce,

the

to

ing gradual
in

ment

but

the

improve¬

steady

aims

and

practices

by
single centralized
government
without
danger
of
grave injury in the event of fail¬
country with

In

often

a

recent

decades,
panels

we

both

seen

of

have
this

picture.
"The operation

of this principle
outstanding merits

is

one

of

of

our

'dual'—it

the

should

'multiple'—banking

be

called

system.

Un¬

less it is guided by self-discipline
and adherence to sound precepts,
it

be

perniciously destructive
the 'race of laxity' in
the chartering of banks during the
can

—witness

1920s. But I

guaged

am

sure

that

a

broad-

appraisal

judges

by
qualified
establish
beyond

would

doubt that the beneficial

any

pects

of

Consultants
A

on

competition
(for
basically, that is what it is) among
the several units of

our 'multiple'
banking system completely over¬

shadow
nate

its

occasionally

unfortu¬

effects.

"Furthermore, there is much to
be gained from

this type of com¬
petition between bank supervisory

authorities;
but

frank

not
and

The

be.

of

one

organizations

the better the

the

vicious

friendly

better

rest

organization

hope

us

wants

represents to

best in the

cerely

field; and I sin¬
that continues to be

the case."

Advantages of Dual System
The

dual

system

banks

operation

has

almost

of

state

now

century.

a

Consultants

on

planning

Municipalities

Municipal Finance
service

governmental units.
assistance

in

reorganization

OTIS

&

the

CO.

ESTABLISHED

of

existing

States

relations.

SECURITIES.
cial

We

WE
are

institutions and

DO

and

a

con¬

other

includes experienced

plans

debt

render

we

for

financing,

new

structures,

financing of self-liquidating projects,

public

1899

Cities,

This service

development
of

for

NOT

BUY

and

planning
financial

OR

SELL

pleased to cooperate with finan¬

investment houses.

CLEVELAND
NEW

YORK '

CINCINNATI




CHICAGO
TOLEDO

*

DENVER

DALLAS

COLUMBUS

BUFFALO

Wainwright, Ramsey & Lancaster
70 Pine Street

New York 5, N. Y.

Telephone WHitehall 4-3540

I

and

been

Municipal Finance

Constructive Service to

structive

re¬

strive to

must

he

our

becomes,

Undoubtedly, each of

be the

rivalry,
competi¬

Securities
As

as¬

this

of

State, Municipal and Corporate

to
up

of government cannot be used

national

quote

taken

benefit of all. For obvious reasons,
this beneficial process for achiev¬

their strength as

it increases its own."

Underwriters and Distributors

proves

be

can

gradually,

nationwide

competition for those systems, and
hence

ex¬

particular needs. By this process,
worthwhile proposals can be per¬

spective

conviction

idea

an

and

so,

system when he stated: "It is

national banking system is essen¬
tial to the economy of this coun¬

pro¬

and

other states

many

tion.

firm

tried

if

as

to

And

merit,

have

Snyder, Secretary of the Treasury,
paid a strong tribute to the dual
my

and

quite

seem

tested;
and if they fail, the nation can
easily recover from the localized

par¬

during

Ideas

may

be

can

jeopardizing

social welfare of

or

nation.

posals which

Re¬

under

organization Plan No. 1, the Exec¬

Office

Comptroller of

banking
when

government

possible the testing
within a single
permits bold experi¬

This

entire

a

joint

example,

and- the

servation is that the two Divisions

a

will

system

when

either

over

For

tem.

rivalry

my

that

taken

be

"It

was,

bill

this

is the
preserve."

believe

should

reply

that

of

idea

new

economy

ure.

existed

but

The

that

system

of

bank

state

has

national bank system,

con¬

corporate

to

We

hover
For

of

"the

merger,

and

tem,
wish

legislation.

sion

business and

asked, "Why is it that the Comp¬
troller's
Office
does
not
object
belief

inent national bankers cooperated

same

their

was

ing Committee. The question was

this

the provisions of Public Law 706,
which provides that, on conver¬
or

coopqration

this

before

legislation

their

Additional copies

at

Closer Relationship Between

state bank.

State

of

testimony before the Senate Bank¬

our

be

with

merger

this

But

system.

is

receive

changed
principle

upon

banking

fear I do not share. Characteristic

that

national bank does not lose

a

tional

of the na¬

to

merger or conver¬

sion. State laws should be

the membership

each

and

laws amended, so
banking fraternity will

is

to

Leg sla-

Legislative

ABA

movement in your

based largely on the principle that

the

State

the

one

hard-won
state

A

son,

have your state

Law

Congress), which speci¬

Present

State

on

secretary.

urge

H.R.

on

Public

(now

of

available

are

of

state bank, state

legislation should be based
1161,

state

national

merger

Code.

Banking

the

and

Council

a

a

check the status of its
*An

ABA

supervisor, each member of

tion

ap¬

proval by state authority.

into

State

Committee

the

provided by the Federal

as

statute

convert
national

to

a

Model

state bank shall be considered the

the job is oqly partially done. At

the

in

J. L. Robert¬

Preston Delano and

ing" have been forwarded to each

.

enacted,

chapter

based

pointed out that

system

the

permit

that

years

Holmes

mentation,

lation, which some bankers feared
would
have
a
tendency to de¬

operating

charter,

factor in community de¬

crease

upon

fies the procedure for such action.

a

of

of this and reprint of an
explanatory article from "Bank¬

undertook
into

is

draft

dual

makes

state.

copy

706—81st

state

that it

where such
approval is necessary. Therefore,
it will be necessary in those states
to
enact
legislation which will
state

any

Heretofore, when
to

This

conversion.

law cannot

Federal

new

the

the greatest advantages of

the
ton. The

October/ It

what

composed of 48 sovereign states is

as

the

it affected

Claude

as

Currency, 'in

last

clearly

Federal

a

excessive concentra¬

velopment and safeguard against Kremlin type of control of banking business.

portion of Reorganization

of

one

Warns against bureaucratic political centralization of

power.

the

by

Deputy

means:

Wendell

states' rights and balanced relationship be¬

banking in Washington, and upholds unit banks

that

of

feat

banking

speech

a

First

"Some years ago, Justice Oliver

dual bank¬

state banks to preserve

as

State and Federal governments and this prevents

tween

Merger

well

as

of

Nevada,

illustrates

system

outstanding

passage

Robertson,

Reno,

of

importa nee
have

L.

Comptroller

President, State Bank Division, ABA

from

sentences

J.

President, Tioga County Savings and Trust Co., Wellsboro, Pa.

andtothisend,
events

Dual Banking System

By CLAUDE E. BENNETT*

dual banking system

Thursday, October 5, 1950

.

.

few

To preserve and

two

.

in

The

Number 4948

Volume 172

development

banking

of

.

history

shows that both state and nation¬

those prin¬

al banks have adopted

which make for sounder
banking, for a better servicing of
the financial requirements of the
ciples

of
depositors; and this has been the
outcome, regardless of whether
the
suggestions
have emanated
country, and for the protection

from the state

It

is

national systems.

or

of the

one

reasons

between state nations, salaries of state bank su¬
permits great¬ pervisors, the selection of such
er adaptation of banking laws
to supervisors on a nonpolitical basis,
and reserve requirements.
economic needs of the state.
The
question was thoroughly
(6) The country is too large, and
discussed at two meetings of state
too widely diversified, to expect
secretaries, and the conclusion was
one banking system to be so ver¬
reached that the ABA should not
satile as to deal with so complex a
enter any state and urge a change
situation effectively.
in the laws which would parallel
(7) It gives greater assurance the laws of other
states, because
for the continued existence of unit
Competition

(5)

and national banks

'

why far-

which have

banks,

have

factor

in

which

have

bankers

sociation in its efforts to preserve
the dual banking system.

of

system of banking are:
(1)
of

a

of
spirit

It preserves the doctrine

states'

rights

which the

in

relationship

balanced

tween the state

be¬

and Federal Gov¬

ernments is maintained.

played

and

record

sized

who

Division

Bank

cent

vital

a

and

important

development

inviting criticism

members

some

cent

an

country.

our

At the risk of

by

been

communities

their

role in the economic

dual

Arguments in favor of the

of

the

are

State

compla¬

to rely upon the
accomplishment in re¬

prone

of

years,

that

it

should

state

be

bankers

empha¬
must be

preventing con¬ constantly alert to the need for
centration of banking power.
legislative changes which strength¬
(3) Decentralization under the en and protect the dual banking
dual system preserves the country system in their respective states.
(2)

It aids

against

a

in

in

political

bureaucratic

centralization

of

banking

control

Washington.

which

At

the

Spring

Meeting

an

invasion of states' rights. Also,

has

passed

by

State

Committee

The

on

Legislation of the ABA has

worked out

a

model code for state

are

available

to

you

the

important respects each one of the

operating experience of the corpo¬
ration, these dividend credits
amount to about $68 million annu¬

as the
deposit in¬

ally, equivalent to a reduction of
55%
in the present assessment

8,653

Federal Deposit In¬
It

banks,

state

surance

well

as

for a large
deposit insur¬

account

of the
membership.

percentage
would

I

many

system. These state banks

numerically
ance

in

affects

national banks, in the

like

four points

(1) The

ments

to

discuss

briefly

in this legislation:

A

for

are now

to be based

on

the

of

deposits.

In

corporation

rience,

years

has

the

in which the

favorable

banks

expe¬

legislation

of

piece

ment which

The

first

dividend

credit

will be applied on July 15, 1951.

(2) Payment to the Treasury pf

approximately $80 million interest
on
the
capital which was adr
vanced to the corporation at its
organization and was later

repaid.

Simplification ' of the for¬
mula in computing deposit insur¬
(3)

ance

(4)
ance

assessments.

■

Increase in deposit insur¬
coverage from $5,000 to $10,-

000 per

The

receive

will

dividend credits against the assess¬

state.
second

new

of deposits.

costs.

loss experience of the corporation,
rather than on a fixed percentage

guidance in drafting legislation for
your

at the rate of l/12th
Under currprit

Act.

banking laws. The results of their
study

pay

surance

such changes in law can hard¬

appointees.

to

S; 2822,

law makes a fun¬
ly be advocated by banking super¬ damental change in the assessment
visors because they are political burden on the banks. The assess¬
any

have

of 1%

sX

account.
capital

advanced

Treasury and the

by

the

12 Federal'Re-

Continued

they normally would

on

page

3d

in

the Executive Com¬
mittee of the State Bank Division

French Lick,

Sotf, AND

innovations requested the American Bankers
Association to urge the adoption
which have become
recognized
as
being based
on of more uniform laws among the
various states regarding examisound principles.
(4) It has permitted

in

been

just

27

Congress after, years of effort is

such action would be construed as

Joined the American Bankers As¬

national

sighted

(1311)

Financial Chronicle

The Commercial and

.

.

banking

TOYS Today!
AMAflflllEC

uay

IWUFMiVI AND lwlJRAi^to|nlvlRHEi3Ai

Tomorrow!

Western Pacific
Western Pacific has been

rolling along at a great pace so

far

this year, beginning to justify the high hopes that had been held
out for it when it came out of reorganization a number of years

Fundamentally, Western Pacific had been considered by
analysts to have about the best potentialities of any of the
roads that had succumbed during the depression years. It was felt
that the full traffic potentialities of the territorial growth and the
new
extension into northern California to connect with Great

ago.

many

...

\ Northern had never been fully realized. Also, it was expected
that property rehabilitation, and rehabilitation of the connecting
Denver & Rio Grande Western, would bring substantial earnings
-

'

benefits.

Unfortunately, these

hopes were not realized as we

entered

In particular, it was noted that the company was
having difficulty in getting its costs under control. Also, revenues
were
not holding up as well as had been expected, and many
analysts began to fear for the $3 dividend—only $3.59 was earned
on the stock in
1948 and that was before sinking and other reserve
funds.
Following a change in top management there was a de¬
cided change for the better in the company's affairs.
It was found
that even the vast sums spent on the property during trusteeship
had not been sufficient to bring it to its top potential efficiency.
the postwar era.

"

Obviously this condition has now been corrected.
There are many elements of basic strength

in the Western

property. One important factor is the growth characteris¬
tics of the territory. This is found not only in the trend toward
industrialization of parts of the service area but, also, in the siz¬

Pacific

able

expansion in farming activity

along the company's lines.

This

growth has by means even yet run its full course. Secondly, the
company gets an unusually long average haul for its size. Gener¬
ally speaking long haul traffic, with terminal costs relatively
of a burden, is the most profitable to the railroads.
Finally,

western carrier.
The company has a very sound financial structure. It emerged
from bankruptcy with only $10,000,000 of 1st 4s of 1974, and
$21,218,000 of income 4V2s, 2014. The Incomes are convertible into
common
at the rate of two shares per $100 of bonds.
Through
retirements and conversions the amount of Income bonds had been
reduced to S6.287.000 by the end of last year. The full $10,000,000
of 1st 4s was still outstanding. It is now proposed to do some re¬
road has quite a

!

less
the

heavy freight derrsity for a

emphatically

It's natural for him to say

...

"T^ieu

me

THy

this, and he's the capitalist of tomorrow...

He may decide to be tomorrow's farmer or clerk
or scientist or almost anything he wants to be.

or business executive or mechanic
But that's not the most important

thought right

7

now

...

mm

This is...
He

can

capitalist of tomorrow because our competitive enterprise system
to save, to invest, to spend.
of satisfaction. He will save
self-interest, but that helps everybody. He may.invest to his own ad¬

be the

says he will be free to work where and when he will,
He will choose his work for his own particular kind
for his

own

and that makes work for others. For there is now, and must continue to be,
that creates.. . that helps produce more.
We at Minneapolis-Moline hope to do business with this young American. We
hope to help him grow i.. and in turn his growth will help our growth ... and our
growth will again create more and better opportunities for more people.
This is the chain reaction of good living that the competitive incentive system
brings out. . . And our competitive enterprise system is the incentive system . . . the
American way . . . WHERE ability and the willingness to work and to produce,
still earn a deserved dividend
WHERE competition stirs everyone to do his

|pf
■MM
mm

vantage

funding.

months, to sell at
competitive bidding $22,000,000 of new 1st 3s. Proceeds would be
used to retire the present 1st 4s and Income 4JAs.
While this will
increase the amount of debt outstanding it will result in a modest'
reduction in the annual charges. The operation will also remove
the threat of future dilution of the common stock by conversion of
income bonds.
Finally, it will give the company additional cash
of between $5 and $6 million for property outlays, etc.
Stock capitalization consists of 318,502 shares of $5 participat¬
ing preferred (cumulative only to the extent earned) and 408,437
shares of common. After the common receives $3 a share in divi¬
dends in any one year the preferred participates equally, share for
share, in any additional dividends paid in that year. It is con¬
sidered likely that, because of the participation feature, the com¬
pany will eventually make every effort to refinance the present
The

This little fellow says

company

plans, within the next few

preferred also.
Western

Pacific has been staging a

strong recovery in the cur¬

little short of phenomenal. Gross in¬
earlier without appreciable rise in
transportation costs. As a result, the transportation ratio dipped
almost 10 points to 24.6% and the overall operating ratio was less
than 52%-. The transportation ratio for the full eight months was
held to 31.1%, one of the best showings in the industry. Net in¬
come for the eight months, before sinking and other reserve funds,
amounted to $3,972,445 compared with only $1,728,996 a year
earlier. Before funds, and allowing for the participating provisions
of the preferred, earnings on the common for the full year 1950
rent year.

August by itself was

incentive! An incentive that is realistic,..

.




$9

or

$10 a share.

.

never known a better system or plan of progress for all mankind.
guard this way of life . . . our American Heritage. It's been mighty good
to a lot of people—and if we take care of it, the best is yet to come. The most import¬
ant thing about America is that it is the land of hope, of promise, and of progress

The world has

,

Let's

for

our

children.

Our part

in the American parade of progress is the manufacture of a complete
Visionlined Tractors and Power Units for modern

line of Modern Farm Machines,

farming and industry.
Sold and Serviced

creased almost 60% from a year

could well run to

.

level best.

by MM Dealers and Distributers Everywhere

INNEAPOLISMINNEAPOLIS
MO of«

N

M*

CHI

1,

Mo

LINE

MINNESOTA

,

Nl«'

ffwiiiltwl

mm
■

ps&i
mMi

28

(1312)

The Commercial and Financial Chronicle

Continued from page 18

The

export of strategic

products,
way

tools

and

do.

as we

materials,

in

the

same

We must have

understanding

that

an

business-as-

The

the part of all are neces-

that

realistic

and

well

fairly distributed
be substituted for

xounded,
programs

tax
the

ily

possible,

as

European army

a

sufficient

be

organized under

size

and
a

equipment
single com-

mand.
For

that
with
and

part,

our

are

we

we

in

must

death

a

realize

struggle

uncompromising enemy,
must accept the same sac-

an
we

rifices

and

exhibit

termination that

the

we

same

de-

expect of our

Allies. We should

participate fully
firmly in the planning and
Implementing organizations which
and

Jiave been established to carry on
this fight lor freedom. Two world
and

wars

South
United

proved
or

and

today's

Korean

not,

defense

of

the

Republic

Nations

have

by the
definitely

today

—

the

problem

posed

by

West Germany. In order to achieve
objectives in Western Europe,
the greatest effort has yet to be

is

liberalized.

are

this

true

ceiling

if

that

we

are

"our

brothers'

an

active part in

-the North Atlantic
Treaty and in
jny opinion we should expand this

participation

to

other

Western

production

increased,

West

speed.

The
on

German
as

These

all

are

en-

economic
facts,
and
the political trends in

Germany

The

and

has

equally

are

is

most

hearteningA currency

to

resume

in

manner

Federal

free

a

by

Germany

have undergone,

mans

of

their acts

convinced

en-

Republic

of

as

that

there

is

the

government,
and democratic

Before

recovery.

this

there

ancj

citizens

of

that

West

stampeded

into

of

the

High

Commission

For

like most

A

of thelr bellef

....

ln

June

has

This

the

a

policy

period,

monthly.

is well

many

on

regaining of its position
itor nation in Europe.
.'

Financially
,

.

West
,

as a

Germany
,

.

cially-long-term

cred-

is

,

capital.

espe-

the

being passed limiting the number

time of currency reform, deposits,

0f

,

„

,.

men
„

and

trades
,

.

...

..

,

trade—a practice by

or

,

tal is

.

will

be

used

for

The counter-

dollars

put up

by the

coalmining

has

pub-

steel and

and'

communications

'

'
,,

anKs ana tne central bank, which
W1U nelp materially in stabilizing
and expanding the

tierman

econ-

omy.

Agricultural
.

..

production

,

while
.

„

Pract ca y oacK to prewar, is tar
short

of

reason

was

because

population,

by

of the refugees and expel-

.

lees,

requirements

Germany's
.

....

million larger than it

is nine

before the

methods

Agricultural

war.

be

must

Farms

.

modernized.

about' twenty-

average

.

insurance

and mort-

great.

very

it

.

Pe°Ple> a11
way from pharma- institutions,
such
as
cists to chimney sweeps. Appli- companies and building

profession

fertil-

corn

^er.mar} authorities on the reorsan|zation oi the c o m mer c,1.alJ

capital and the assets of financial

professional

A.

aie n,?w working with the

,

At

C.

w

West

short of capital, and

very

are

the

grains

0ne-fifth.

our

housing.

has

to

way

The

E.

great range of other industries

Ger-

West

the

in

come

through

1950

transport

The doliar

year.
same

in

Rc utilities

been reduced from $90 million to

.

Laws

trade!

this

of

in

$30 million

restrictive and

procedures.

this

back

foreign

Germans in Deutsche marks
been invested in
agriculture,

unfavorable foreign trade balance,
averaging $65 million per month
in 1948, to $33 million per month

deficit,

buy

than

par^ of

our

ernment of the Federal Republic,
and has resulted in changing an

in

to'

iess

has been championed by the Gov-

Europeans, retain much
■.

of

will

States

before

the

wbiie

been given in West Germany's
leadership in the liberalization of

instance, the Germans,

.

demonstration

international

character

it'paid

and seas°™d. the function and efforts to bring this about.
powers

pro-

leather machinery and tobacco
In
1948
for almost two-thirds
0f
ap * West
German
imports

hope

relinquishing

be

petroleum products ' cotton
non-ferrous metals
hide's skins'

must not be

we

certain

will

Germany has to build

of

used

a

West

eral concepts, but

ago.

year

under

come
largely from earnings and
savings> American aid has been

Germany is
turning
from reactionary principles to lib-

As
this
young government becomes tested
a

pro-

invest-

Army relief funds has
assisted with $3 billion- but additional capital needs will have to

many

government

the

year,

foreign

which

investments

result

a

jot

United

reform in June, cants must appear before a board gage associations, were practically
did much to speed West Ger- composed of those already in the
wiped out. The need for new capi-

man

a

car-

aggression, have jzer

them

this

lifted

was

West

non-com-

The public expressions of
officials
give

responsible

a

elected

pronounce-

points

wish

of

against

gressively relinquished,

different and better way of life.

German

the protective

capacity,

to tonnage

recent

these

to

up

ments

Centuries of

couraging.

and

shippassenger
and

is

building,
both
freight, is permitted

ments

We have taken

of

many

Particularly fields.

steel

which

petitive status through huge
tels and holding companies.

June

restrictions

by the big businesses of Germany,
such as coal, steel, and chemicals,

Currency

wm be gradually turned over to
duction in West Germany, still it so that the will of the German
less than the average of European people will have free and cornproduction, has made enormous piete expression.
gains. Whereas in 1947 West Gerit is hoped that the
principles
many's production was only 33% 0f
democracy,
that have
been
of 1938, while other European enunciated and demonstrated so
countries had reached an average consistently by the Allies
during
of 103%, West Germany's produc- the past five years, have made
tion is now 104% of 1938, while their impress on the minds of the
the European average is about German
people. I think we have
130%.
•/.
'
done a good job; but
certainly we
These gains can become much cannot claim complete success.
more impressive when the present old modes of
thought are stiil
industrial restrictions and limita- evident in political and economic

tions

In

Thursday, October 5, 1950

.

.

hibition

lives and property which the Ger-

to par.

couraging

our

that, whether we like it present West
we live in
"one world," without hmits

keeper"

exchange.

,

accepted

most up

ern

antiquated, ineffectual, unrealistic
that presently prevail; that made in West Germany.
tax
evasion,
now
notoriously
Any one who has been in West
prevalent in many European coun- Germany for any length of time
tries, be eliminated so that the cannot but be impressed by the
JEuropean taxpayer bears his just rapid and substantial strides it is
part of the burden; that each dol- making in almost all directions.
Jar we put into the defense of
Gains in West Germany
Western Europe be matched by a
uains m wesi ueniuiiy
substantially larger amount from
The recovery of industrial pro-

-of

of

the

was

which competition is kept to a
minimum and opportunity limited
to a relative few.
Much the same idea is expressed

habit, thought, and
precedence cannot be changed in
a short time; but it is hoped that
the suffering and terrific losses in

ones

the Europeans; and that, as speed-

the

been kept in short
supply, thereby
driving its open market rate al-

most complex problem in Europe

on

in

Europe organizations. We do not reform
replaced
the
watered
pretend to have all the answers; Reichsmark with the new Deutsche
but certainly our leadership can mark at a rate of 16 to 1, and rebe most helpful in making the im- stored
full
confidence
in
West
portant decisions that face West- German money. The mark
has
Europe today.
I would now like to turn to the

sary;

confidence

cigarette

medium

usual is over, and that real sacrilices

of

Reichsmark, desperate commodity
and inventory shortages, low productivity, and high absenteeism.

European Problem

countries today; and certainly we
must insist that our Allies control
the

lack

was

.

five

are

small parcels,
to spend

going
Milk

•

and

acres

forcing the farmer

good part of his time

a

from
cows

split into many

one

and

plot to

oxen

are

another.
the prin-

CREATORS OF FERTILE FARMLANDS
Bananas

are

temperamental. The luscious Gros Michel, for instance,

rich silts and bottom lands of Middle

America...

.

.

not

craves

the

the higher regions, culti¬

vated and inhabited for centuries.
To

give the banana the land it loves,

from dense

jungle.

.

be created.
So it goes.
creates new

>

"

.

'/

As banana

80 Federal
•

COLOMBIA




•

COSTA RICA

•

CUBA

•

DOMINICAN

REPUBLIC

•

ECUADOR

Land

plantations

—

acres

must

of

plantations

tillable, productive land

come

into being,

Through scientific cultivation

must

be carved

be cleared,
stagnant water drained

of

so

—

must

do inhabitable

actually
areas.

wastelands, the banana industry

fertile farms for Middle America.

UNITED
BRITISH HONDURAS

Thick underbrush

from impenetrable
swamps.

....

vast

FRUIT

COMPANY

Street, Boston 10, Mass.
•

EL SALVADOR

•

GUATEMALA

•

HONDURAS

•

JAMAICA, B.W.I.

•

NICARAGUA

•

PANAMA'CANAL ZONE

Volume 172

Number 4948

.

.

The Commercial and Financial Chronicle

.

(1313)
cipal

draft

animals

which results in loss
low milk

of time

production.

land plots make

chinery

practice

a

—

The

and

small

of farm

ma¬

therefore,

the

use

perienced in Europe. Their mayor,
Ernst Reuter, a superior man in
intelligence and courage, is typi¬

be

found

only in its integration the compelling necessity of build¬
European family ing a strong, democratic, self-sup¬
of nations.
\
porting and self-defending West¬
The West Germans have ex¬ ern
Knowing that
Europe. They must demand

cal of West Berlin.

into the Western

,

greater

part

of

planting,

culti¬

vating, and harvesting is done
by

hand.

Under
much

American

has

been

done

influence,
to

improve

total agricultural
production
setting up extension

by
services; by
assisting in the organizing of in¬

stitutes for home economics
where

human

nutrition, home

ment

and

taught;
herds

child

by

80%

tuberculosis;

of

the

and

have

cows

milk

no

can

of meadow and
grass lands.

West

Since

to

and

recovery,

is

throw

of

the

pressed

earnest

an

desire

to

be¬

real partner with the other
of
Western
Europe.

countries

no

less of the West Germans.

The
a

events

in

great impact

Korea

have

had

behind

Iron

the

Curtain, Berlin is the show

window of all free people, and as
such is the greatest source of an¬
noyance

aimed

at

to

the Russians.

the

Allies

and

may

increasing

forcing

Conse¬

expect

pressure,

them

with¬

to

solution

of

the

not

be

Western

countenanced

Allies.

West

by

Ger¬

is extremely important to
Western Europe, but the reverse
many

is

equally true.

ful and

Since

a

success¬

lasting partnership cannot

be built

on

sharp trading and ad¬

vantage-taking

North Korea

trol;
ment

to

each has

South

of

the

many

can

cooperation, forgetting the past in

many

in good faith and complete

puppet

to

its

force

a

West

native

Korean,
at

all;

no

has

insufficient, and subject

Communists by radio,
newspaper,

A few

indulge in sail trimming.
astounding cases as

We have such

govern¬

leading

Communist
in

industrialists

the

Communist

same

pecuniary
save

the

their

nesses

military

firearms except

advertising

press,

if

contributions
skins

the

"comrades"

Continued

on

on
:vX£>:

Problems Pressing for Solution

However, there

are many

Unemployment,
8.7%

or

has

of

been

greatest
to

prove

this is
of

the

one

prob¬

of

1.3 million

now

total

labor

West

force,

Germany's

problems. This may now
be a real asset because
cf

one

unused

to which

the few

workers

we

large pools

in

the

world

turn for the

can

essary, enlarged defense
tion.
Many of these

nec¬

produc¬

people

.skilled

workers

who

are

start

can

producing needed articles imme¬

diately;
would

and

their
employment
only lessen the finan¬

not

cial

burden
on
West
Germany,
but their production would mate¬

rially

increase

'trade

and

West

expellees

from

.countries

Tenge:

are

their

many, and
rate

the

a

Iron

of-

chal-

into West

way

20,000

.quartered

in

month.

per

of

in

Ap¬

them

and

camps,

living

are

Ger¬

still coming at the

are

proximately 250,000
lion

Curtain

continuing

Nine million of these have

found

•:

Germany's

commerce.

Displaced persons, refugees, and

.

are

mil-

a

overcrowded

conditions in private homes. Com¬

ing with no equipment or money,
.they have always posed;a tre¬
mendous
social,
economic,
and
political

problem on which the
West German government, and the

^
"

..Allied
<"

authorities

(ously
At

spent

,

continu-

effort.

present, E. C. A. is financing

•/'an-American

'

have

considerable

housing,

team

finance,

of

experts

and

in

economics,

J

jto-be matched by
.Germans,

who

a team of West
study
this

will

problem and,
•in

we hope,
solution. -. ; ';

its
A

•

whole

cluster

of

will assist

J'
difficulties

w' ;is presented by Berlin. With 30%
?

its

.of

working population

unenj-

Uployed; with continual harassment
W.by the Russians of incoming and
outgoing people, freight, and par¬
cel post;' with a city budget and

{

badly

trade
'with

80%

of balance;

its

and

productive

out

of

ma-

tchinery lost through bombing and
Russian removal, continued
must

tance

be

given

ern

stricted

chanics
cut

West¬

Allies did not demand written
of

assurances

off

access

of

free

from

and

to Berlin.

aiding
the

a

city

unre¬

The

me¬

entirely

Western

World

by the Soviet barrier surrounding
it

are

not

simple

The air lift,

-

money

as

timony

well

of

those

against

a

magnificent

as

tes¬

determination

our

assist

who

power

stand

to

firm

which would de¬

them.

With
Russian

-

this

ables

of time-

saving advantages—never

before combined

on

one

machine—en¬

National

new

Accounting
machine to cut
accounting costs so
sharply that the savings often pay for the
entire equipment within a
year! Savings
then run on,
year after year, as hand¬
some
profit.
2. It also

formation

fact,

the

inexpensive.

1. An exclusive combination
and

with its terrific cost,

ample demonstration of this

gave

vour

or

NATIONAL MECHANIZED ACCOUNTING PROFITS YOU IN TWO IMPORTANT WAYS

assis¬

it.

It is unfortunate that the

all

their

suffering

harassment

staunch

spirit

Berliners is the most

from

and bullying,

of. the

West

inspiring and

heartening thing which I have




ex¬

most

but

gives

business

money-making in¬

your

business—facts

have
always wanted,
had. Employee relations

men

many never

THE

more

about

NATIONAL

are

improved. There's

A small

or

saving in station¬
up-to-the-minute.

a

ery costs. Records are

medium-size business

Get this FREE

20-page booklet

can

from

handle a//its

accounting on one National
Multiple-Duty model. Larger concerns

use

our

local

representative,
i

batteries of these machines to handle

\

specific jobs at minimum cost—and,
during peak-load periods, shift jobs be¬
tween machines to cut
costly overtime.

J

or

write to the

Company at
Dayton 9, Ohio.

Let
our: representative check your
accounting set-up, and show you how
much National Mechanized
Accounting

will

save.

CASH

REGISTER

COMPANY

large

page

mitted to
continue, in peace, will
almost
self-supporting with
the ending of E C. A.
in 1952.

lems pressing for solution.

busi¬

arrived

be

.

would

their

and

to communize the Ruhr. One

a

limited number of hunting weap¬

if per¬

appar¬

ently in the strange hope that these

and

unlike
no

is

on a

word of
mouth, and posters, he
finds himself groping for a solu¬
tion to his worries.

military force.

German,

safety

to the incessant
propaganda of the

con¬

intensive, lying propaganda;
The

any

Germany

West

servile

a

masters; in each prevails the

member,

by

has

each

therefore

and

is dependent
pitifully small
body of Allied troops. Unable to
protect himself, knowing that the
present strength of the Western

contiguous to the

are

vast land masses under Soviet

the Allies must accept West Ger¬

draw from Berlin.
The

should

ons;

for his

Allies

West Germany.
all too frighten-

on

Korea, there are, however, The parallel is
Russians and their East German increasing
signs that some Ger¬
ingly clear between North and
puppets and denounces them for mans wish to play the game of
South Korea and East and West
their crimes.
"hard
to
get," a game which
Germany. Both East Germany and
Situated
as
it
is

problems

Germany in all lines

stone's

a

be

drunk,
safely,
without
boiling;
and by
improving the productivity

the road

come a

improving animal quently,
dairying—this is vital constant

and

because

manage¬
will
be

care

if the Russians ever
occupy his
city, his head will be the first to
fall,
he
stands,
magnificently,

within

difficult;

29

O/fStUmal
ACCOUNTING MACHINES
CASH REGISTERS*ADDING MACHINES

30

30

The Commercial and Financial Chronicle

(1314)

Continued

from

page

aggression.

29

Allies have antheir intention.

The

nounced this

as

Continued

from

.

Thursday, October 5, 1950

.

.

27

page

(5) Insist on the creation of an

The European

Problem

to

ment

industrialist,
E.C.A.

who

counterpart

which

had borrowed
funds with
his plant,

rehabilitate

to

himself for his

excused

in

vertisement

page ad-

German

West

a

not a rearmed West Germany
would be dangerous. It does invite
dangers in the light of the
past, and one could wish there
were no necessity of raising the
some

by saying he
would be run
only in the papers of East Germany.
Others have withdrawn
from politics completely, hoping
that neutrality will gain for them

question at all. The rearming of
East Germany, however, and the
Communist use of force in Korea
also raise dangers which compel
us to weigh other alternatives,

enmity of neither the democracies nor the Communists.
The

Steps to Be Taken Regarding

Communist

paper

promised

was

it

majority

vast

of West Germans,
however, are clearly anxious to
stay with the free world, and have
no hesitation in so declaring themselves.

They would much

their

tie

future

to

ours

that

Allies than they would to
Soviets', and we must give
them every encouragement m this

of

our

the

e^re'
If

to

are

.,

.

.

*

we

.

,.

retain their

active

support .we must give them concrete
assurances
of
successful
not, merely, a lot
double-talk and
meaningless

defense
of

phrases.

and

One tank

fairs

permitted production of

ships

carg0

lies

persuasive than
The Alenough troops in

of proposed plans.

must

Western

cluding

put

Europe to defend it, in¬

West

Germany;

and the

West Germans must assist

of
restrictions

production

without

fQr

„r

(3) Permit West Germany to

fo^m a" increased police force for

internal use to keep law and order
so
to

as

the

the declarations

meet

Communists

of

subversive

warfare in the Western

Zones.

The time has past

(4) Increase the number of Al¬
divisions in Europe to give
substance to their promises of de-

for the

aca-

to whether or fending

as

It is

these

For

time to liqui¬

now

the traces of this aggression

date

in every form, and do

everything

possible to prevent another.
In any

integral

an

Germany

the time for

Therefore,

be

must

substantial

and

part.

the West Germans

We must meet

the

the council table, and

will

will

loss

experi¬

together

voir for

Western

Europe

Europe.

The decisions taken by the

three

earlier

this

against

new

a

in the

era

re¬

themselves, which have advanced
from $6.4 billion
in 1934 to al¬
most
I

billion in 1950.

$13

hope

These decisions

the

of

rec¬

a

confidence

which

dependence

are

the

and

Western

Having been an active partici¬
pant in the First World War, I

ONE SOURCE

have

illusions

no

the

to

as

inclination

natural

mans'

Ger¬

to

ac¬

cept leadership rather than to
sume

interest

for Many Markets

will lead

wars

as¬

better

ercise

them to

judgment

ex¬

their

in

the

by

should

it

the future.

i1

✓

✓

/

*

:

t

.

ing

Co.,

merce

RAILROAD

U. S. GOVERNMENT

✓

✓

t

/

STATE AND MUNICIPAL

FOREIGN

Inc., Chamber of Com¬
Building. He has recently

tion
sored

agencies

As far

It

is

will

CANADIAN

AND

H.

Delaney is affiliated with Harold
E.
/

BANK AND INSURANCE

/

Co.,

First

National

Bank Bldg.

Broad

coverage

offers distinct
tions

within

one

advantages to portfolio

managers.

involving varied types of securities in large

blocks

are

facilitated. Because of

daily contact with

many

our

or

small

to The

Financial

LOS ANGELES,
J.

has

Haims

staff of

would

a

repay

payment

hope that this

my

prompt other agencies using

the

from
The

taxpayers.

simplification of the

com¬

putation of the assessment was a
reform.

should

much

needed

prove

advantageous to the many

It

which

have
cum¬

state

the

banks

there

believe

are

the

has

progress

met

the

increased

to

the

which

comprises 9,573 banks, of
Reserve

System. On the
San Francisco
Convention a year ago, an official
of the Federal Reserve System,
platform

at

the

while

admitting the dangers of
compulsory membership in that
banks

a

which

term

which

is

"free

as

is

among: Federal
and

the
nonriders,"

characterized

member

in

common

Let's look at the

banks..

record.

,-j '

I and II,
the government found that nonmember
banks
joined all'"other
banks in support of the govern¬
ment bond
program.
They, took
pride in helping their communi¬
ties to meet their quotas of; bond
subscriptions. Non-member banks
were included in the.prai.se given
by
both
the President / of \ the
United/States and the Secretary
of the Treasury for the help, they
gave without remuneration.-NonDuring

World

Wars

member banks welcomed

Simply

coverage

While I

$10,000 coverage

/

share

vided

by

a

in

non-member

protection pro¬
policy felt necessary
a

maintain

the

market

ment bonds is

no

member

banks

out

class

as

they

a

resist
of

for

the
their

the

to

The

for

criticism

reserve

Federal

beneficiaries

Board.

crease

of

Chronicle)

lest

the

further

in¬

function

original

protecting the large majority of

ber banks but
tional
has

or

,

also

to

the

added

every

net

are

assured. We

prices in each of

categories of securities

UNDERWRITERS

With Paine, Webber

—

DISTRIBUTORS

DEALERS

E.

F.

Hutton

PUBLIC UTILITY,

RAILROAD

INDUSTRIAL

with

MUNICIPAL

&

Company.

With Trowbridge Co.

and

SECURITIES

(Special to The Financial Chronicle)

The

BATTLE

C.

FIRST BOSTON

Walt

&

Co.,

Bldg.

CORPORATION
New York
Philadelphia




Boston*

'' Pittsburgh

Cleveland

is

CREEK,
now

the

Mich.—Roy

with Trowbridge

Michigan
In

National

past

he

Bank

was

with

Silas C. Coleman.

Chicago

San* Francisco

W. C.

Robert Bowers Adds

Langley & Co.

Members New York Siock

Exchange

(Special to The Financial Chronicle)

DENVER,
Nielsen

has

Colo.—Charles

been

staff of Robert D.

Cooper Building.

C.

added

to

the

Bowers

&

Co.,

115 Broadway

New York 6, N. Y.

Tel. BArclay 7-8800

institu¬
who

investor

E.

formerly

this

non-bank

LOS

ANGELES, Calif.—Capel
Kelly has joined the staff of
Paine, Webber, Jackson & Curtis,
626 South Spring Street.
He was

of

market.

Grand Avenue.

(Special to The Financial Chronicle)

Reserve

bond

the

the

to

give

require¬

non-mem¬

Calif.—Martin

been

when

to

individual investor

access

Certainly

be

demand

policy include not only

careful

govern¬

why nonsingled

reason

should

by purchasing power of the dollar,

guard against any

op¬

by the Federal Reserve Board to

ments

be

the

,

because

banks

control

must

use

officials;
derogatory, unde¬
Reserve

served, and resented by all nonmember

original coverage when measured

we

in

7,700 do not belong to the

Federal

program.

$10,000.

a

greater
than

Membership of the State Bank
Division

bankers

intention

that

demand

the

portunity to cooperate in the war

of the
framers of the original FDIC leg¬
islation, which was to protect the
small depositors, there has been
fully

made

been

bank¬
to

that un¬

other nation.

coverage

many

$5,000

beneficial

be

economy; despite the fact
der our existing system

Floyd A. Allen & Co., Inc.,

650 South

classes of buyers and sellers

dealers and maintain markets at

the above

Transac¬

to

well-

Many

sizable volume and

throughout the country, accurate markets
are

(Special

organization pf all these markets

so

I know,

payment of interest on such funds
in order to eliminate a subsidy

to

Floyd Allen Adds

nations

these

nevertheless

&

Wood

from welcom¬

cen¬

coun¬

intentioned people have advanced

today is about equal to the $5,000

Minn.—Frank

PAUL,

by

ever

recognize that

(Special to The Financial Chronicle)

ST.

interest on
the Treasury

pay

government funds to consider the

be

/

is

It

banking

subsidized

be

us

as

agency

some

With Harold E. Wood

V

of

action which is

While

been with Morgan & Co.

✓

banks.

basically
the Fed¬
Deposit Insurance Corpora¬
is the first Federally spon¬

an

eral

who

ANGELES, Calif.—Dick R.
Linch has rejoined King Merritt
&

✓

not

advanced

sound.

(Special to The Financial Chronicle)

LOS

V

$289

present method
bersome and expensive.

Rejoins King Merritt
'

the

as

tradition

it

miserable failure

a

dragged

socialization.

by government funds. Whether or system,
not other

found

/

of

use

Reserve

that

small

V

approve

capital to the
Treasury and the

the

responsibility. We hope their
experiences
of
two

selection of leaders in

INDUSTRIAL

the

for

Federal

12

disastrous

world

belief that
the
million

my

generally

Treasury investment with interest.

place in West Germany.

powers

has

toward

any

retroactive payment of $80

should not deter

ognition

PUBLIC UTILITY

share

you

bankers

funds

the
way for cooperative action of all
Western 'powers
in the defense
pave

and

other

17

ing

lationships of the Western Allies
Germans, and

tries has been

such

that

control in

arguments that centralized

up
the primary protection
depositors represented by the

with

the

historical fact

for

within

Ministers

It will serve to

the

tralized

back

FDIC

Foreign

reser¬

protection of the deposit

insurance system.

as

equipment, in the defense of West¬
ern

long

present pattern,

important

million advanced

they will accept
their share in men, money, and

effort.

>

the

years

banking system, entirely ignoring

as

an

few

past

per

million

bill

provide

the

authority have been advo¬
cating centralized control :of the

new

follows

ence

During

at

grow

corporation's

the

as

the

to

$70

over

under

returned

This fund,

year.

continue

of

rate

year

incrimi¬

name-calling is past.

and

which

the

on

capital funds of the insured banks

defense plan for Western
West

Europe,

month open

lied

demic argument

people have been

conflicts.

worldwide

by

in this

defense.

German

guilty of starting two aggressive,

.

~

,

Failed

high

a

interest

decide what part
.,

Has

Control

by the end of the

and institutions, for
democratic state will stand
firm against a communistic state.
government

at

passenger

Centralized

has been evident that the planners
in Washington and some others in

strictions

cargo and

of

guaranty

a

million

nations

on

become

credit.

capital during the second half of
this year, but its surplus neverthe¬
less will approximate $1.3 billion

export
in my opinion, we
sh0uld go further and lift all re-

more

are

reams

the

and

bank

banks was paid two years
The corporation will be re¬
quired to pay half of the $80

Continue to aid the West
Germans in developing democratic
(8)

received.

^2) implement immediately the
porejgn Ministers' decision to increase the
raw
steej

make its contribu¬

can

depositors

ago.

tion to the defense effort.

af-

quickly as the Germans
their dependability.

prove

industry

acts, they reserve the condemna¬
tion of the world, which they have

as

ands of promises, and a few
sions

that it

so

serve

German

Organize

the

and withdraw from
of German internal

worth thous- skipS
divi/ox'

is

units to such an army.

(7)

The

Accept West Germany as a

(i)

rather control

and

(6) Allow the West Germans to
a
substantial number

West Germany
In my opinion, the Allies should
immediately:
partner

Strengthen
Dual Banking System

stop any aggressor.

contribute
of

only

the

Preseive and

army for the defense of Europe
with enough manpower and equip¬

Volume 172

Number 4948

.

has not been labeled "free

The Commercial and Financial Chronicle

.

.

rider'

but

cases;

merely because he has been able

member

to

of

out

the 7,700

non-

in

avail

himself

of

Federal

Re¬

market support.

serve

Control
reserve

non-member bank

over

Board

strikes at the

heart of the principles of the dual
system of banking. It is a basic

principle that
be

state bank should

a

subject

5,577

located

are

communities having only one
bank; and, therefore, this supposed
competition is negligible.

requirements by the Fed¬

eral Reserve

banks,

As

national banker

a

state non-member

a

fully

well

as

as

banker, I

am

of the vital importance

aware

of the Federal Reserve System in

economic life.

our

In reply to the

(1315)

stimulate defense production by is the product of the birth and
giving needed technical advice and growth of millions of little inde¬

There is no reason to believe
that those communities would now

financial

pendent businesses resulting from

be

the

the thousands of banking institu¬
tions were to be lodged in the
hands of a single individual or

assistance.

sound fiscal

ination
tures

of

unnecessary

governmental

by

Stress the

meeting
further

Advocate

policies and the elim¬

expendi¬ of progressive and free men—men
bodies. who cherished the right of indi¬

importance of currently
costs to
avoid

defense

inflation

vision, ambition, and industry

through

vidual

initiative

dreams

come

Alongside

deficit

financing.

to

their

make

true.

the

cf

story

the

these pathfinder? is the
state banking sys¬
was able to recognize
provide the particular type

Joint Economic Subcommittee, the
Federal
Reserve
Board
frankly

serious thought.

tem, which

a

states its belief in the dual bank¬

ration for

war

and

membership
in
a
Federal instrumentality. The im¬
position of Federal Reserve re¬

ing system, and does not advocate

therefore,

we

compulsory membership in' the
System. Characterizing non-mem¬

to

that

Federal

which

it

voluntarily willing to accept
condition

as

of

quirements, superseding the

power

exercised by the state bank super¬
visors with respect to non-mem¬
ber banks, would represent a vio¬
lation of the
sanctity of this

bers

for

is

no

claim

a

strong

that

foundation

lack

of non-member bank

of

control

reserves

can

jeopardize effective control of the
monetary structure of our econ¬

is

destroy real values;
must be prepared

for that destruction.

mean

sacrifice

on

This

the part of

the

not

States' Rights Principle
The

basic

every one

of

eral

record

of

the

financial

their

service

communities

local banks
ated

us.

of

by

were

men

needed
because

owned

with

an

ana

in

the

oper¬

intimate

knowledge of those needs.

in

agency

some

dual

safeguard

if the control of

distant center.

banking

system

Deposit

Insurance

Kremlin type of control over
banking and business. Let us be

sure

it is preserved, and

that

the

created
banks
come

to
are

agencies
be

never

allowed

their masters.

Eternal

demand
which
were

the servants of the

vigilance

4

must

watchword

Fed¬

Corpora¬

tion in their relationships to stateof

the

was a

recognition

principle of states' rights.

It provided for voluntary member¬

omy.
Only a small proportion of
the total commercial bank deposits

ship

is

and the Federal Deposit Insurance

in

the

which
have

non-member

under

to

quirements

laws

state

maintain

banks,
already

the

reserve

prescribed

by

re¬

state

statutes and supervisors.

The dif¬

ference between

held

der these

reserves

requirements,

to

invalidate

the

present

member

un¬

against
imposed by

which

might be
the Federal Reserve, is
any

as

small

so

the

argument
position of the

banks

as

that
non-

ity of nonbank investors to have
through
is

Federal

to

access

market

open

certainly much

likewise,

the

member

ments,
matter

more

bank

operations
of

from

is

a

non-

require¬

reserve

banks,

credit

significant;

existence

different

member

Reserve

those

of

small

very

towards the control of in¬

the part of state banks in
Federal

the

Corporation.

ciple

of

both

Insurance
As

the

interest

peace.

in

requirements is unfair

reserve

competition is

more

real.

be

It

ar¬

banks

may

apparent than

true

isolated

Labor
"As I

efforts
in

habit.

Unless

the

expand,

or

use

borrowed
or

Found Wherever Fine Cars Travel

in
our

by

defense

doing, dis¬

so

of customers'

use

own

facilities.

Advise

of customers'

borrowed funds

beyond
either

speculating.

cus¬

savings

capital to construct,
modernize industrial

commercial

ments,,

their

national

would be served
courage

Encourage

increase

goods

between

communities,

our

soundness

these:

as

to

make sense.

non-member

of

tomers

against the

differences

the
Re¬

Such efforts could be along

lines such

through
various
governmental
loaning agencies. It just does not
Furthermore, the

by

Federal

our

Sports Car by Kurtis, los Angeles, California

nation's economy and in providing
the security necessary for world

or

and

in

devote

American

This prin¬

legislation.

leaders

should

we

the

Act and the Federal Deposit

serve

the credit structure of the country

that

of

concept

a

recognized

was

framers

or

gument

Such

effectiveness of either.

flation compared to the $23 billion
the government has pumped into

member

Reserve System

voluntary participation is the only
basis on which the dual banking
system
can
survive.
Voluntary
membership will not impair the

prevents effective

credit monetary control. The abil¬

on

both

to

normal
for

own

accumulate

require¬

hoarding

or

customers

Assist

in

understanding and complying with
new

to

regulations

credit

in

control.

laws

relating

Encourage and

Unions, Too?

pointed out in

my State of the Union mes¬
in January, 1947, during the last war the
long-standing tendency toward economic concentra¬
tion was accelerated.
Partial mobilization, in the
absence of protective measures,

sage

.

may
to

again

this

expose our economy
threat and thereby im-

peril the very system we are
seeking to protect. In numerous
provisions of the Defense Production Act of 1950, the Congress indicated its concern over
this danger to free competitive
enterprise.

M
■ yffr

I ^ JpjSmm
"

"In

order that
this danger
be minimized, it is requested
that,
in
performing

.

may

those functions

delegated to or
vested in you by Executive Or¬
der 10161, you consult with the

President

Attorney General

and the Chairman of the Federal Trade Commission

for the purpose

of determining and, to the extent
principal objectives of the Act
impairing the defense effort, of elim¬

consistent with the
and without

inating any factors which may tend to suppress
competition unduly, create or strengthen monop¬
olies, injure small business, or otherwise promote
undue concentration
"I

am

of economic power.

requesting the Attorney General and the

Chairman of the Federal Trade Commission to

sult with you as

con¬

the occasion requires and to report
to me from time to time concerning the progress
that is being made in carrying out this policy."—
President Truman to Federal agencies.
Does all this

apply to labor unions, too?




THE PETROLEUM INDUSTRY
IS

A PROGRESSIVE

INDUSTRY

DEDICATED TO SERVE MANKIND
FAITHFULLY AND WElt

a

the

System and the Fed¬

chartered banks

is

the growth of

against

Upheld

the

concept of

eral Reserve

There

riders"

pay

will

situation requires
War and prepa¬

present

The development of our country

prin¬

ciple.

"free

as

to induce them to join.

way

The

better served

The

progess of

is

only to
legislation

banking

31

to

be¬

be

the

:

32

The Commercial and Financial Chronicle

(1316)

Continued from

.

Thursday, October 5, 1950

.

.

first page

American Bankers Assn. Holds

Convention

Diamond Anniversary
the

post of Vice-President, is a
native of California, having been
born at Colusa. He attended ele¬

school

mentary

in

Bankers Association, including

the

Presidency in 1948-49.
In the American Bankers

high

Fresno,

school in San Jose, and was grad¬

the Virginia

number of offices in

ciation,

has

Cocke

Mr.

Asso¬

been

a
University in member of the Committee on Fed¬
A.B. In eral Legislation since 1941 and has
graduated from the served as Chairman of that Com¬

uated from Stanford
1910

1912

he

was

Stanford

School

Law

with

the

Mr.

Shelton

Los
and

served

practiced law in
from 1912 to 1917

Angeles

trust

as

counsel

for

the Title Insurance and Trust Co.
of Los Angeles from 1917 to

he

term

of

to a three-year
the Association's Execu¬

on

tive Council.

the

1946

Executive Committee.

he

was

President of

elected

the bank.
Mr. Shelton has long been

active
affairs, in those of the

in bankers'

California

Association

Bankers

First

the

State

Bank

at

Mr. Emmons is a native

of At-

a

a

the fact that he left

the

and

FRANCIS

C.

COCKE

Trust

of

Louisville, Ky., was
elected President of the State As¬
sociation

Section,

an

organization

The ABA has members in every
state in the Union and in Alaska,

Bermuda, Brazil, Canada, Cuba,
France,
Great
Britain,
Guam,
Hawaii,
India,
Japan,
Mexico,
Philippine Islands, Puerto Rico,
and the

Virgin Islands.

Fontaine

Ralph

which

lay in this provision, and
Congress amended the plan to
exempt the Office of the Comp¬
troller and maintain his independ¬
This

ence.

was

exceedingly

an

difficult

piece of legislation, be¬
cause there was a general public
misunderstanding that economy
and efficiency in government op¬
eration would be served by the
bill just as it was drawn.
We
pointed out that the Comptroller's
Office has always been

supported

banks, that it constitutes
Retiring President's Report
no
burden
whatever
upon
the
In his report to the Convention, taxpayers, and it has always been
F. Raymond Peterson, the retiring an efficient office of government
President, stated that the past in maintaining and safeguarding
year was a successful and progres¬ the national banking system. How¬
by

sive

for
and

year

banking

sociation.

for
c

Membership Continues to Rise

Raymond H. Trott

Delaware, Florida, Georgia,
Idaho, Iowa, Louisiana, Michigan,
Montana, Neveda, New Mexico,
North
Carolina, North Dakota,
Oregon, Utah, Vermont, Virginia,
Washington, and Wyoming.
sas,

within the American Bankers As¬

college dur¬

ing his senior year to enter the
Army in World War I, serving as
a Lieutenant in the Air Corps.

American Bankers Association.

President
and

Association,

versity of New Mexico except for

Reserve

Bankers

Bank

Western

Ralph Fontaine, Executive Sec¬
of the Kentucky Bankers

product of the public
would
graduate of the Uni¬

and in those of the Association of

City

the

retary

schools in Albuquerque and
have been

President of the State

President of the Trust Division.

more, Ala., but has resided in New
Mexico since he was nine years
He is

as

Division.

Bank

Cincinnati,
Ohio, as
the
Savings and
Mortgage Division.
Raymond H. Trott, President of
the Rhode Island Hospital Trust
Company, Providence, R. I., as

Gallup, Gallup, N. M.

old.

Texas,

President

who was re¬
elected ABA Treasurer, is Presi¬
of

President of

Company,

Glenn L. Emmons,

dent

John Q. McAdams,

the Winters State Bank, Winters,

William A. Reckman,

Treasurer

In

President of the Na¬

as

tional Bank Division.

of

GLENN L. EMMONS

the

bank, in 1921 Vice-President and
Secretary, and in 1934 Chairman

the Federal

of

elected

was

1919.

Security-First
National
Bank of Los Angeles in 1919.
In
1920 he became Secretary of the

been

Legis¬
lative Council since 1946. In 1949

He became Assistant Trust Officer
of

has

He

1946.

since

mittee

Chairman

degree of J.D.

nati, O.,

William A. Reckman

John Q. McAdams

L. C. Bucher

with the degree of

i

a

the
t i

ever,

of

we

the

favored

course

other provisions of the bill, which

Asso-

brought about further efficiencies
in the Treasury Department. Our
position with respect to the Comp¬
troller's
independence
would

"It

o n.

the

could not have

that
It was reported by T. J. O'Brien, been
have been to no avail had we
During the war, Mr. Emmons's Chairman of the ABA's Organiza¬ kind of year
not had the support of the Secre¬
tion Committee, that on Aug. 31, without the
C.
Francis
Cocke, the newly family moved from Albuquerque
California, where he joined 1950, 98.1 % of the banks of the hard
work,
tary of the Treasury."
elected Vice-President of the ABA, to
loyalty,
is President of the First National them upon his discharge from the United States were members of the
Commenting on the recently
the Association, the highest per¬ and the will¬
enacted Defense Production Act,
Exchange Bank, Roanoke, Va. He Army, later to return to Gallup
an
employee of the Gallup centage in its 75-year history. Mr. ing support of
is a native of Roanoke, Va., and as
Mr. Peterson stated:
State Bank. When the First Na¬ O'Brien is Vice-President of the these men,
was graduated from the Univer¬
"The
Defense Production
Act
tional Bank of Gallup was organ¬ Second National
Bank, Houston, their commit¬
sity of Virginia in 1908 and sub¬
passed by Congrfess two and a
ized in 1921, Mr. Emmons joined Texas.
;
tees, and the
sequently attended the University
half weeks ago contains three pro¬
it as Assistant Cashier, becoming
varied parts
Law School.
During the past year, the ABA
visions of very direct interest to
of the banking
successively Cashier
and Vice- enrolled 113 new
Mr. Cocke was admitted to the
members, bring¬
banking. The first of these pro¬
F. Raymond Peterson
President.
Upon organization of
industry
ing the membership to
Virginia bar in 1910 and later be¬
14,331
visions restores regulation of con¬
the First State Bank in January,
which
they
came a senior partner in the law
banks, 2,062 branches, and 163
sumer
and
instalment
credit*
1934, Mr. Emmons became't asso¬ members in
firm
of
foreign countries, a represent," Mr. Peterson added.
Cocke,
Hazlegrove
& ciated with
Through the years, we have op¬
it, becoming President
Reporting briefly on the nature
total
of *16,556.
Shackelford. During World War I,
In addition to
posed this selective credit con¬
and Chairman of its board of di¬
and outcome of some of the more
he was a Second Lieutenant, Air
being 98.1% of the nation's banks,
rectors iq 1935.
trol; yet when the nation is at
legislation
affecting
the figure represents over 99% important
Service Aeronautics; and in 1919
war, we must acquiesce to enact¬
was
of the banking resources in the banking that this session of Con¬
elected
First
Department

Vice-President

Commander of the American Le¬

NEW DIVISION PRESIDENTS
The

gion in Virginia.
Mr.

Cocke

was

elected

Vice-

President and director of the First
National
and

was

dency

Exchange Bank in 1927
elevated

in

to

He

1938.

the

Presidents
of

held

a

the

of

elected

were

Bankers

Columbia,

Asso¬

ber of the

L.

states,
C.

Bucher, President of the

Lincoln

National

Cincin¬

Bank,

that

stated

the District of

bank is

every

a

mem¬

six

bank

one

The

membership

states

are

is

a

with

non-

100%

Arizona, Arkan¬

areas

to

concern

Federal

of

been of interest
members of the

legislation have
and

Association; and in four Association.

only

member.

has considered, Mr. Peterson

gress

States.

In 20 states and

Divisions

the Four

American

United

as

ciation:

Presi¬

has

following

These

legislative

areas were:

a

(1) Reduction of the FDIC as¬
increase

and

sessment

'

:

'

<

-

dependence

'

.

'

'

;

1

'

'

npHE LIST of customers which Eaton Manufacturing Company is privi¬
leged to
o

practically

serve

every

includes the best-known and most respected names in
basic industry—leading manufacturers of automobiles,

trucks, tractors, airplanes, Diesel engines, domestic appliances, machine
tools, farm machinery, construction equipment. Every major railroad, public

utility, and communications system in
These

are

materials. To
which
of

Eaton

them is in itself

makes, and

to

a

testimonial

this company's

to

the

quality of products

dependability

as

EATON PRODUCTS—Sodium Cooled Valves

Engine Parts

•

Hydraulic Valve Lifters

Permanent Mold Gray Iron Castings
Cold

Drawn

Wire

•

•

•

Poppet Valves

•

Valve Seat Inserts

Rotor Pumps

Heater-Defroster Units

•

•

de¬

source

Free Valves

•

•

Tappets

•

Motor Truck Axles

•

Spring Lock Washers

Stampings

•

•

Snap Rings

Leaf and Coil Springs

•

•

Dynamatic Drives, Brakes, and Dynamometers

and

responsi¬

direct

General Officest CLEVELAND 10, OHIO
•

MASSILL0N




•

DETROIT

SAGINAW

•

BATTLE CREEK

•

MARSHALL

•

VASSAR

•

KENOSHA

•

LONDON, ONTARIO

urging
with

banks

them

the

to

The
does
that

has

communication

a

cooperate

Federal

Reserve

fully
in

the

of

Regulation W.
second provision of the bill
mortgage credit. The law

not

provide all of the steps
to maintain a

are

necessary

sound, anti-inflationary mortgage
credit situation; but we are hope¬
ful that the administration of the
law

may

(6) The Defense Production Act
by Congress two and a

eventually
produce
significant tight¬
the government's. easy
more

during World War II. The Asso¬

passed

ciation

half weeks ago.

make

"I

pleased to report to

am

the

of

outcome

almost

you

all

this legislation has been decidedly
satisfactory," Mr.
Peterson
re¬
marked.

"Some

acted

have

of

the

laws

that

contributed

to

the

strength and soundness of bank¬
ing.
Congress
amended
other
legislation before it was enacted
this

session

so

that

it would

jeopardize

the strength
banking system."
"Last

of

spring," Mr. Peterson

not

the

re¬

endangered the welfare of
banks through
Comptroller's

the 5,000 national
its effect
on
the

has

to defense

of

urged

every

bank to

loan it possibly
industries, without

every

can
use

the

government's
guaranty.
You will recall that during World
War II

the banks made

duction
totaled

loans

than

more

is to the

estimated

war

pro¬

to

have

$20 billion.

It

credit of the banks that

only about half of this amount
guaranteed

by

the

was

government.

Careful appraisal of the risk in¬
volved, and of the ability of these
industrial
concerns
to
produce
and fulfill their government con¬

tracts, is the essential step in this
type of lending."
Concluding

his

report,

Mr.

Peterson commented:
"I

for

feel

confident

that I speak
banker in the country
say that America's tre¬

every

when

I

threat mendous industrial capacity, com¬
to the security of the dual banking bined with the will and determi¬
system. We were invited by the nation of free men, can bring vic¬
Senate
Committee
on
Expendi¬ tory for this nation in its struggle
tures
in the Executive Depart¬ with the growing aggression of
ments to offer testimony on this the Communist empire. We, like
bill. We pointed out the dangers everyone else in this country, had
Office. It

CLEVELAND

the

measures

Association

The

ening of
mortgage
money
policy.
The
(4) Agricultural legislation con¬ third item in the Defense Produc¬
cerning Banks for Cooperatives tion Act in which we are
directly
and the Commodity Credit Cor¬
interested
provides
government
poration.
guaranty of loans to producers
(5) A bill amending Section and suppliers of war material,
60A of the Bankruptcy Act.
similar to the V-Loan program

have

Plants:

all

somewhat

organization Plan No. 1. It would

COMPANY

sent

housing

ported, "the ABA took exception
to a provision in Government Re¬

MANUFACTURING

effort.

concerns

Congress, in its wisdom, has en¬
a

war

program.

that

Eaton products.

supply.

Jet

•

some way uses

companies which demand the finest parts, equipment, and

serve

its

of

bility to Congress.
(3) The government's

Wide Range of Industries

of the

some

government believes will aid the

administration

posit insurance coverage.
(2) Government Reorganization
Plan No.
1, which would have
stripped the Office of the Comp¬
troller of the Currency of its in¬

Eaton Products Serve

ment of

i

was

also

a

grave

Volume 172

Number 4048

.

The Commercial and Financial Chronicle

.

.

hoped until the conflict began in
Korea tnat open warfare could be
avoided.
the
be

It

brougnt to

there

still

is

hope that

our

lords of communism may

war

is

reason.

Failing this,
nation,

choice for this

no

for

industry, for banking, or for
American people but to
do
their part in the defense of this
country. I am certain also that I
speak for all bankers when I

the

voice

again

Convention
do

all

here

Annual

our

determination

our

that

at

we

aid

to

can

to

this

in

World

War

II, and

as

Secretary Snyder Honored
First General Session of

the Convention

on

Sept. 26, Secre¬

of the Treasury, John W.
Snyder was presented with an
engrossed and illuminated testi¬
tary

monial

tion.
now

behalf of

on

The

Associa¬

the

then

Vice-President,
President of the Association,

James E. Sheiton, read the follow¬
ing tribute to Secretary Snyder:

"Upon

this

occasion,

the

be

to

cele¬

a

served witn distinction in the high

It calls not alone for

ojfice of Secretary of the Treas¬
ury.
This department is one of

military strength but for that

the oldest in the Federal Govern¬
Never before in the Treas¬

ment.

such

difjicult

and

complex

problems.

approached

extends

poise, patient re¬
keen mind, a spirit de¬
voted to the welfare of his coun¬
search,

a

"During his administration of
the Treasury, he has always wel¬
comed suggestions

of the first World War,
he volunteered for army duty and
served in combat forces overseas.

in which
the

he

turned

institutions

Following

to

"A few

United

of

this,

private life

cial of one of our

death

posts,

helped to strengthen

economic

country.

the

govern¬

important

years

the

States

as

of

the

he

offi¬

larger banks.

later, the sudden
President

made

it

of

the

necessary




omy.

more.

"The
we

primary economic danger
is inflation which impairs

face

of other countries have confidence

has

sacrifice.

inspired

confidence

among

many millions of Americans who
own bonds representing their faith
in

America.
"To

John

W.

Snyder

services

his

as

offer

we

citizen,

a

a

public servant."

is

effective

an

Communism

Before

the

Convention

ad¬

journed, the Resolutions Commit¬
tee

it

submitted

upheld

the

preserve peace

world

to

national

and

Communist
outlined

resisting inflation.

im¬

policy

a

According

present

Communist
new

lems.

struggle

far,

it

is

new
a

kind of conflict from the
trated

against

imperialism is taking

form and poses

Thus

all-out

we

against
not

must

efforts

prob¬

different

this

believe

time

is

ernment

and

the

full

of bank credit.
nize

a

The banks recog¬
their responsibility to avoid

uses

support

beginning has been
resisting inflation, and
further action is necessary on the
part of national, state and local
governments, and on the part of
the people themselves.
"Only

rpade

of credit which

are unneces¬

to the national effort and in¬
deed would impair it through in¬
sary

in

creasing inflationary
"It is

our

pressure.

faith and belief that

the people of this country, work¬
government ing together and with their gov¬
should set an example by cutting ernment, have the resources, phys¬
back non-defense expenditures at ical and moral, to meet this new
confi¬
least to the levels of 1948, which emergency with courage,
would mean a saving of about dence, energy and self-control so
that our way of life, with eco¬
$6 billion a year. To avoid infla¬
political,
and
spiritual
tionary borrowing by the govern¬ nomic,
will demonstrate once
ment from the banks, the Treas¬ freedom,
more to the world that it is the
ury should seek to distribute the
national debt more widely among best for human welfare.
the people. The bankers of the
"If we will do these things we
Nation again pledge their aid in shall weaken the power of Com¬
the campaign for the sale of sav¬ munism to disturb the peace and
ings bonds. The government can freedom of the world."
sell savings bonds to the people
1951 Convention to Be Held
more readily and with better con¬
At Chicago
science when
government itself
has taken more adequate measures
It was announced at the closing
"The

this emergency
or

at

With

action by the gov¬

by the

country has the

flation

inflation

that

unnecessary.

common-sense

people, this

resources

to meet

without either in¬

detailed

national

have

steps

preserve

the integrity of the dol¬

lar. One such step was

passage by
for

the Congress of

increased

is

step

of

credit

taxes.

restraints
and

the prompt

The

on

housing

an

act

credit,

and

and

for

need

direct

sive taxation

long-range

as

a

this

A.

to

own

affairs

so

will produce more, spend

Savings Bank, is Chair¬
Chairman

of

for

Committee

Vice-President

ton,

National

less, and

call

for

added

President

First

Chicago.

The

Committee

of

the

City

National

Bank and Trust Co.

pairs of shoes

a year—more

than 10% of all the shoes

for sale

Ex¬

Con¬

will be William H. Miller, Vice-

uses

50 million

the

the

of The

of

Bank

Vice-Chairman of the

foregoing principles apply

will

Clearing

vention itself will be John J. An¬

that they

banking policies. Increased pro-

duction

The

ecutive

more.

"The
to

the

by

Brown, President of the Harris

man.

sound

encourage

Chicago has been

Committee, of which Mark

Trust and

pro¬

government policies and to man¬

save

behalf of the Chicago

House

House

the people themselves have

their

on

Clearing

of the country

anti-inflationary

duty both

age

in

extended

con¬

to produce.
"In

1951

Convention

would impair the

power

invitation to hold the

The

mone¬

trols and the need for such exces¬

second

consumer

the

reduce

gram,

desirable

"Some

fiscal

"Courageous

tary policies of these sorts would

regimentation

of the economy.

concen¬

two

have

The

been taken to resist inflation and

the resolution:
"The

a

in which
effort to

report

and freedom in the

against

perialism
for

a

weapon

which

will

of members of this Association.

parallel danger is to insure against the decline in session of the organization's
that regimentation, excessive con¬ the
buying power of the dollar. Diamond Anniversary Convention
trols, and
too drastic taxation
"In the area of monetary policy on Sept. 27 by James E. Sheiton,
may endanger the very freedoms
the
principle should be clearly newly^ elected President of the
and the
economic strengths we
recognized that flexibility of in¬ ABA, that the 1951 convention
seek to preserve. This would play
will
be
held
in Chicago.
The
terest rates is effective in influ¬
directly into the hands of the
date of the Convention will be
encing the volume of credit and
Communists.
Sept. 30 to Oct. 3, 1951.
the amount of savings.
"We

re¬

an

pro¬

econ¬

from all groups
pub¬
finance. When the times for de¬
cision have arrived, he has moved
with
courage
and dispatch.
He

In

the crisis

several

to

lic

Regarding Inflation

in

is

sound

a

and individuals interested in

Resolution

ment

for

the value of money. A sound dol¬
lar in which we and the people

a

early 1930's, he served the

and

arms

people

to .fill the double need

save

with

banker, and

of

duty of the govern¬

the

But something more is re¬
quired—we can meet the military
needs only by -spending less on
other things. We must therefore
produce more, spend less, and

problems

W. Snyder. His career is a living
demonstration of patriotism ana

crisis

for

these

*

first

and
more

its respects to The Honorable John

economic

"The

duce

of these

un¬

tary power.
ment

the solution

long-rangfe '
which can be

pace

derlying
economic
and
social
strength basic to long-term mili¬

na¬

Our guest of honor has

may

calls fdr

and

financing

tional and international

of

the

decades

ury's long history have there been

ican Bankers Association

In

long-range
last
for

a

policies, for

this testimonial of our admiration

service.

which

maintained.

the seventy-fifth anni¬
versary of its founding, the Amer¬

public

This is

wars.

conflict

bration of

conscientious

world

Again, tae government
called Mr. Snyder to Washington.
For
nearly five years, he has

world.

we

have done in peace."

At the

Administration

new

a

formed.

try and to the interests of a free

nation throughout the war, as we
did

for"

33

(1317)

produced in the United Statesand children.

to men, women,

i-

•

i
r

„

34,000

people in 59 shoe factories, 14 sales

branches, 9 tanneries,
than 30 other

a

rubber plant, cotton mill, and mo*0

supply plants and warehouses needed to

provide materials for shoe manufacture and

to effect the

Company's world-wide distribution.

200 million dollars worth of shoes
to

28,000 retailers,

annually

large and .small, located in all the 48

states, in U. S. territories,

and in foreign countries.

(ywmr/...
by

more

with

than 11,000 individuals and institutions—

no one

person or

the 3,400,000

organization holding

much

(

as

52 <of

shares of Company stock issued—and

maintaining for its stockholders an
dividend payments

ST.

as

for 37

unbroken record of
^

years.

LOUlS-Roberts, Johnson & Rand, Peters, Friedman-

Shelby, "Continental Shoemakers, Pennant Shoe Co.,
Accent Shoe Co.,

Vitality Shoe Co., Queen Quality Shoe Co,

Dorothy Dodd Shoe Co., Winthrop Shoe Co.,

C

Conformal Footwear Co.

MANCHESTER, N. Il.-Sundial Shoe Co., Great Northern
Shoe Co., Metro-Craft Shoe Co.

.

■

34

(1318)

The Commercial and Financial Chronicle

Continued jrom page

N. S. Greene Joins

.

Thursday, October 5, 1950

.

.

14

»

Canadian Securities

Townsend, Graff & Go.

Monetary Policy Today
the

By WILLIAM J. McKAY
As

anticipated, the fundamental
strength and
undervaluation of
the Canadian dollar became

vious,
ficial

that

despite

ob-

Whether
example is

of-

fixed exchange level had perforce
to
be abandoned. The Canadian
authorities

can

mended

their

for

linquish

be

com-

decision

efforts

the

world-wide

only

to

The

of the spectacular

as

on

The

pressure

dollar,

curbing

Nathaniel S. Greene

Townsend,
Broad

Graff

Street

members

of

Exchange,

Stock

announced

that

thaniel S. Greene has become
sociated
listed

with

the

firm

in

again the truth of

its

as-

Mr

Guardian

Securities

old

foreign exchange maxim that
exchange control can
indefinitely withstand the presforeign

no

sure

of natural

demonstrated.

forces,

was

^

3
r

Schwabacher & Go.

Thus the success of the appar- '
SAN
FRANCISCO, Calif.
ently reluctant action taken by •
the Canadian monetary author!--Frank Hu
nationally known

Dr.

.

In this instance the

decision to permit the exchange to
seek its own level is an acknowl-

Dr. Frank Hu Joins

narrow market in New York for
free funds.

clearly

open

ft-

to

prove

be

.

™Lviren'u?rpmpnt«

"

«nSwW

increased

from

22 to

26%

of

de¬

mand

deposits; those of reserve
city banks, from 1$ to 20%; and
to

been achieved. If U. S. speculation

and^wfde-which'arelif'a Sm3

tion to be directed to the obvious

hcshateto1 take 1 s°tep that appears
to be inevitable in ^he lbng run

dollar. " can now be said that it Assistant Professor of Economics quiredto hold some percentage of
has made a notable contribution at Seton Hall College
South

trarilv pegged levels of exchange

.

slightly

totaled

1950

than $9 billion—an

more

annual

during the first

of

rate of

almost S14

billion,',

compared with roughly $11 bil¬

lion

in

each

the

past three
Residential mortgage debt,

years.

outstanding,

01

which

Dec.

on

31,..

1949 totaled

$37 billion, increased-

at

rate

record

a

during

the first

eight months of 1950, reflecting a
rapid increase in new debt
in

retirement

of

previously
Aug. 31,mortgage loans outstanding on one'
to
four-family
houses
totaled
debt.

As

of

about

$41 billion, an increase of
nearly $4 billion since the first of:

of

the
ine

arbi-

months

14%;

rectfon

that

fact

eight

resi¬

small

on

country banks from 12 the year, as compared with an in¬
while reserves against crease of less th2n $4. billion dur¬
time depsits could be increased ing the entire 12 months of 1949.
'
from 5 to 6%
To argue, as some
responsible
eunr+
^
As long as short-term interest individuals have, that real estate
rates are rigidly kept down and mortgage lending based on expan¬
those

inevitably become the target of
speculative
attack
with
every
change of the economic trend,

the

of

*

made

dential properties

than

ties, which according to the some- nancial analyst, has joinedSchwawhat petulant official comments bacher & Co. in their head offices
was
virtually dictated by U. S. J"
San Francisco, 600 Market
speculators, has probably exceeded Street, as a registered represenall expectations. With regard to tative and research authority.
the implied criticism of undue
Hu, holder of a Ph.D. in kspeculation on the part of U. S. nance and economics from the

edgement

credit.

contracted

—

has

supported

more

Lj,hi

Corp.

ac-j

in large
by, and.
rapid,

housing

been

measure

as

steps

,,

business

This de-.

New loans

Reser^r^^^nnt trfvnkPd®i?
A WpLlSir

un-

of

re¬

as general credit con-

,

trading department.
Greene was formerly witfiJ

First

only through the medium of the

an

+

Na-

a

Once

credit in

by

hacG *° be taken*

City,

New York

the

York

these

levels

for

expansion in real estate mortgage

inadequate, further action might

jj.

Co.,

&

New

Should

high

ac¬

and

Reserve

inflation

consumers

in turn has contributed to, a

seeking to
reduce the
availability of reserves.

SKS'lnM Son^l'SpiKv^dT; and Simo"s' Linburn & Co—
previously contemplated dead- the Dominion could be effected
liner

cent

market and rediscount rate
actions,
are first
steps in the direction of

met

and espebold initiative in

upward

Canadian

of

housing has been one of the.
major factors contributing to re¬

in¬

loans,

bank

Federal

with

bankers'

on

security

to

sponse

demand

for

mand

coupled

of

the

ments,

tivity and employment.

short-term govern¬

rates

other forms

with world-wide approval,
simultaneous announcement
cially for their
of the removal of all remaining
setting the pattern for exchange import restrictions on consumer
freedom. It had been hoped that goods at the end of the year will
the United Kingdom and the Do- further
stimulate the already
minions would have agreed at the booming
U.
S.-Canaaian
trade.
Commonwealth meeting in London Furthermore, investor confidence
to
take
concerted
action
along in the Dominion cannot fail to be
these lines in order to prevent dis- strengthened as a result of greater
turbance of inter-Imperial trade exchange
freedom and the fact
relationships.
that the external holder of a CaIt is possible, however, that the nadian investment
i^ow has an inoverwhelming foreign demand for terest in a currency with a comthe

in

creases

that has

move

in

yields,

ceptances,

result

a

rise

ment

little

lar has been enhanced

re-

resist

to

is

ef¬

Policy

question that the
Dominion's financial prestige and
the standing of the Canadian dol-

there

the

Future Monetary and Fiscal

the Canadian
followed elsewhere
not

or

operation,

fects of the Federal Reserve's
pol¬
icy will be more restrictive.

be
unconnected
with
Canada's
striking action in the field of l'oreign exchange,

arbitrarily

the

reluctance,

so

apparent

refunding

banks have

an abundance of short-

sion

of

bank

term securities, the effectiveness

tionary,

oi

tion

requirement

reserve

increases

of

credit

is

infla¬

not

seems to me in contradic-»

the facts.

Not

only is the

limited. In the event existing volume of money in circulation
authority over reserve require- increased by the expansion of
ments should prove inadequate credit, but its turnover is quick¬
Failure to adjust
the exchange interests, it should be borne in University of Illinois, will divide Congress may decide to expand ened by the chain of transactions
rate in conformity with natural mind that without the strong con-,, bis
time between research and this authority to permit further involved in building. More than
economic forces can only lead to fidence on the part of U. S. capital contact work.
.
increases in reserve requirements, that, private building operations
the perpetuation of artificial con-1 in the higli destinies of the DoIn addition to his studies at U It may even be necessary, in my increase competitive bidding for
trols and restrictions.
minion, the dynamic Canadian of Illinois Hu did post-doctoral opinion
particularly if large- labor and materials needed for
Nriw
ihni
Panada
has
heer,
economic expansion of the past work at Columbia in economic scale deficit financing would the defense effort and thus induce
inow
rnai
^anaaa nas deen
decades
would
never
have analysis,
money
and
banking,, necessitate some Treasury bor- price rises.
•
;

exchange6 freedom6
excnange iieeaom,

or
of

recuori

aau

oweaen,

wnicn

are

in

a

indeed

sim

comDel

undervaluation

It
it

might
mignt

well
wen

verv
very

Canaciian dollar
in

watched

so

in

London and Canberra

particular,

its

monetary

United
o

e vident

authorities

Kingdom

have

sponsor

TWing

the

week

in

attention

left

it

and
to

the

ol

Australia
Canada

which

movement

a

by

corporation finance, investments, rowing from banks,
Public financing, business fluctu-

mjnjon

internals

which

were

nronortion

I he

to

markedI up in Proportion to
use in the new and

he

fundamentally

stronger Canadian dollar. Liquida-

to

^Qn

jor

profit-taking

con-

surnrisinelv

business

visit

to

and

light

and

shock
dian

the

U

f

^

.v

freedom the

of

dollar

tain the

China>

Cana-

should eventually

at-

logical goal of parity with
S

dollar

"n„„r4

,

tion

were

Stocks

lost

groUnd.

The

a

most

of

the

issues

paper

Municipal

Assistant.

cipal

losses

but

maintained

xu

as

the $3.50 cut
d

hptw

j

the

fj

golds
the

at

the

University

Economic Research

gs

He became

Chungking

jn ^45 jju

a

acting PrinHigh

School

re-

plan

a

might

be

re-

debits,
reserves,

to

present
in the form of Treasury bills, certificates and notes, or cash and
cash items.

Such

supplementary

ments could
a

certain

and

retain

be

percentage

the

as

by law to

of

they

had

couW

of

earn-

now

hold,

or

the

basis

in

16%,

the aver-'

on

in 1949, which was still
very
and

were

the

case

high,
continuing to climb. In

of

some

ponents, such
price increases
more

plays
able
in

as

building

com¬

millwork,

have

been

the
even

pronounced.

Real

estate

a

mortgage
credit
important and desir¬

very

role

of

credit expansion currently and
the future,

advanced

age, from the lowest level reached

demand

Banks

volume

same

ings assets

require-

limited

^eposits 6

time

to

growth

and

United

States

development

on

restoration
now

ards

the

would

'■

living,

of

education

production

facil-

"know.-how*'

,

restrict

-

in

our

economic

system

normal

In

Credit

accordance

with

authority

granted by Congress in the De¬
fense Production Act of 1950, the

Federal Reserve implemented,
restrictions

as
on

operations and functions.
Dr.

Beta

Hu

is

a

Gamma

Phi

Sigma

consumer credit. In general, these
Kappa, restrictions
call
for
somewhat
and Sigma larger down payments and shorter

Beta

Iota EPsilon-

maturities

on
consumer
ment loans than prevailed

William D, Scranton
William

^D.

time
Thus,

,

Scranton,

senior

new

the
for

w

'

Haven> Conn., died at

example,

automobiles

£artn£r of £harles W- Scranton & only be
the

regulation

was

instalthe

at

issued,

purchases

credit

on

such

of
can

made with

a minimum
down payment of one-third of the

financing

be of greatest value, it is im¬
portant that it be used most fully
well

Regulation—
the

in order that

ever,
may

when the construction

Selective Credit Instruments
Consumer

and the nation's various financial of Sept. 18, certain

Of

in

with

reference to United State's stand-

.

before

ment

sent by his gov-

was

the

scholarship to work for his Ph.D.

well

were

places them

nncitinn

of

ernment

d

.

Corporation

yegrs

imme-

'

recovered

continued

twQ

inclined to sag but sub-

sequently

Provincial

University
of
Following graduation

banks

addition

m

supplementary

Under such

commercial

Central

Chungking.

he

J°imn&

Tungtai,
Kiangsu,
a
graduate of Na-

]s

he

tional

t0

was

and to studY progressive methods
" in use to promote the country's

r.

diately following dollar revaluaGovernment

in

He

management.

Washington m0st
and Ottawa of the Acting Chief of
vestment at the new higher prices,
the British Treasury can hardly
having happily survived the inv

of

During
the
past
12
months
prices of most building materials
have been advancing
steadily—by
the beginning of September
they

times. Without such
in 1941 and during his four years perhaps more, but at the same
credit, widespread home owner¬
the there was in charge of the school's time the supplementary requireti e financial
ship would not be possible. How¬

m this direction was alentirely offset by fresh in-

CANADIAN BONDS

organization.

~rang<r'
J-' Pnor
Schwabacher & Co.

ternational Monetaiy Fund. The volume
^Pending

sort

to institute

purposes

light

surprisingly

was

some

ftio.ns, statistics, marketing and quirement

Born

success

flicts with the precepts of the In>

the" Canadian

to Canadian progress and prestige.

the guinea-pig

far would suggest emulation

the

w

the
tne

Df

atten-

experiment, the the bond market was naturally
which are ueing closel>
concentrated on the recorded Do-

results of

in

is

that
inat

be
oe

official

exchange

an

is

a

as

industry

all other industries

are

as

in

position to meet demands with¬

out

inflating prices and otherwise
damaging the whole economy.

When
industry in general is
running at capacity and increased
needs for national defense
a

substantial

and

materials

the
will

diversion
from

require

of

labof

civilian

use,
expansion of mortgage credit
only add fuel to the fires of

inflation.

If
mortgage credit is
appropriately limited now, it will

be iti a better position to play its
essential role when more produce
tive
capacity becomes available

A. G. Ames & Co.

age

of 75 after

an

illness

several weeks.

Government of Canada

of

purchase price, the balance to be
off within 21
months; of
stoves, radios;
dishwashers, re¬

to meet consumer demands.

frigerators, and
equipment, with

CANADIAN STOCKS

freeing of the dollar.

ant thereto provide for the
regu¬
lation of private real estate con¬

paid

other
a

household

minimum down

payment of 15%, the balance to be
paid within 18 months.
The
down

of

purpose

larger

Two

Wall Street

New York 5* N. Y.

WORTH

4-2400

ny

1-1045

payment

purchases

household

McMASTER HUTCHINSON 6- CO.
Midwest Stock Exchange
New York Curb

Boston R. Mass.




ma¬
con¬

sumer

Members

Fifty Congress Street

shorter

turity provisions is to curtail

Internal Bonds

INCORPORATED

105 So. LaSalle Street

(Associate)

CHICAGO 3

Tel. Financial 6-4646

and

these

of

automobiles,

appliances,

and

other

durable goods, particularly where
recent
expansion
of such
pur¬

chases has occurred largely in re¬
sponse to progressively more lib¬
eral terms.

The

1950

Defense Production Act

and

struction

credit

by

Reserve, with the
the

of

executive orders pursu¬

the

Federal

concurrence

of

Housing

and Home Finance
Administrator. Government guar¬
anteed

real

regulated

estate

by

Home Finance

the

credit

coordinated

tions

imposed

While

with
on

regulations

Control of Real Estate Credit—
As I mentioned previously, in dis¬

private real estate

cussing current economic develop¬

general

have

not

yet been

intent

be

and

Administrator, and

to the greatest extent

be

will

Housing

and

possible will
the

private

restric¬

credit.

implementing
cerdit

control

published, thd
form

of

such

^Volume 172

control

Number 4948

will

.

.

The Commercial and Financial Chronicle

.

probably be about

savingse

as

deposits

■follows:

tain

Restrictions will be imposed on
credit (whether or not secured
by
a
mortgage) granted for new con¬

compete

struction,

and

and

will

sus¬

largest

who

of

those

savings deposits. In an
which savings banks must

in

era

confidence

with

other

institutions

nonagricultural

industry

the way for a
economic depression. Fur¬

severe

thermore, such steps
discussed

at

high

as

savings of individuals, this in it¬

garded

self is of great importance to the

dustrial and commercial

socialization of

our

savings banker.

before

being

are

levels

including major addi¬
tions and improvements to exist¬
ing structures, and may cover in¬

of

gov¬

Securities Salesman's Corner

been

residential
rates

properties.

will

not

be

well

as

as

If

Interest

regulated,

dential
is

properties.

Consideration

to

also

being given to maximum
maturity and/or minimum rate of

repayment

Unlike

have

we

many

In

credit

knotty

effort to deal

an

with

Federal

the

of

field

has

problems.

has

elicited

recognized
real

of

invited

who

extend

real

Whatever

credit,
cooperation

estate

has

establish

it

re¬

toward

move

necessary to
stringent mortgage credit

regulations, and it is not

necessary

today."

higher
they did

as

the

ultimate

savings

others

bankers

country

credit.

will

their

work

Elects New Officers

the

been
discussing will have their
effects,
directly
or
indirectly,
upon savings banks.
To the ex¬

tent that

these

measures

are

be

pre¬

for

the

serve

purchasing

of

and

the

authoritarian

rationing and other direct

con¬

,

George

C.

Brooklyn,
Lberal

Johnson,
says

they

President

credit

mortgage

of

Dime

Savings

when

sound,

is

actually

a

weapon

Criticizing the Federal Reserve

.

that

Board, government economists and

other

segments

industry for
sively strin¬
gent curbs

the

of

banking

advocating

5%

ments

exces¬

is

the

complishing

certain

this

aim,

increase

in

ac¬

surely

an¬

down

on

pay¬
men

be absorbed

can

mort-

"Home

credit,
George
C.

gage

greatest

building

is

producing and
creating real wealth that we have.
Purchase of homes provides em¬

Johnson,
President

and

Dime

Savings
of

Bank

largest

institution

house

itself

,

MacArthur

nite

of

This

is

in

distinct

government deficit

Johnson

statement
sued

is¬

George C. Johnson

mortgage
strictions

re¬

"unreasonable

unnecessary."

and

Government's defi¬

cit

financing is the real

the

nation's

root

of

inflationary troubles,

he added.

"We

.

by

the

Federal

Board, government eco¬
nomic advisers and a few bankers
that the proposed stringent mort¬

credit

gage

requirements

in

"This

is

decidedly not the

to meet the

"Liberal

credit, applied in
on

mortgage

a sound manner

the borrower's

is actually

pay,

way

problem," the banker

Continued.

based

rowing.

a

ability to

weapon

against

inflation."

"When

buys

new

a

savings that have been
for

this

purpose.

ac¬

The

mortgage mcney that is provided

lender also

a

ings

and

total

from
increase

comes

sav¬

money

does

not

the

supply of the coun¬
try. Then more money is imme¬
diately taken out of the inflation¬
each

stream

ary

home

buyer

month

makes

as

payments

of his mortgage.

"Recent

the

number

cm

mort¬

probably will reduce
of

and by bor¬

difference

to

press

turn

It achieves the

rency.

out

same

nothing

"The most dangerous and infla¬

tionary aspect
ment

financing
of

with

ment

that

home

spending
and

govern¬

virtually
spending

wealth, such

salaries for its
racy,

is

government's

creates new
case

deficit

of

as

buying.
goes

is the

Govern¬

largely

articles

into

bureauc¬

enormous

into

modities that

homes

built

next

by the 30% suggested by
building industry and certain
government agencies. If it is evi¬

and

out or destroyed.
tainly not productive.--

a

The Bond Club of Detroit elected
the
following officers
and
di¬
the

1950-51, be¬

year

It is

inspired
govern¬

favors

apparently

an

in¬

creasingly higher

wage level.
If
the production of things for work¬
to

buy

homes

and

ers

is

limited,

especially

home

equipment, this
add dangerously to the infla¬

will

tion

spiral.

or




four

of

known
I

am

as

are

basic

well

are

economic

factors,

extremely surprised that the

advocating

payments
Mr.

ful

the

&

for

Johnson

excessive
home

of

unduly

in their plans,

down

purchases,"

concluded.

man

and spent in

after leaving some liter¬

on

Two days later who showed

attendant and his wife.

into

This salesman

case:

conversation

a

are

exception

the

to

rule.

who

wouldn't

Dhooge of Blyth & Co.

following committee chair¬

was

no

dinner

placed

an

work

that is somewhat like any other habit.

will find that it is

a

needed it.

I know

They won't do

Dhooge,

men

hoe than

to

row

who

are

man

working it is

of

a

a

a

you

workers.

Saturday and

on

early in the day to get started.

pleasure, although there
a

Once

Sunday

you

times when

are

boost.

start

even

That is when

a

the

short

change will do the trick.
any

man

is engaged in

consistently,

even

when things

enjoy selling enough to

day.

a

line of

enjoy. A salesman who likes what he is doing

see

are

slow.

Any

man

who

the people, might try and find

another kind of work where he will feel like

hours

steady

a

all, if he could only plan enough work ahead and

Frankly, it is too bad when

doesn't

hit

But the in and outer is often

most consistant salesmen has to have
or

you

excellent five day

thing about working

a

if

good rest in between if

a

They produce good results.

will work

Chairman of the Publicity Com¬
mittee: Merle J.
Bowyer, Braun,

If you get into the habit of
will do it that way; and you

you

though.

Michigan Corp.

Blyth & Co.

harder

some

work that he doesn't

P.

jerks,

day after day pace, and then took

rest

appointed:

and

spasms

Chairman of the Program Com¬
mittee: Frank P. Meyer, First of

Victor

that

true

beaters.

the best

Committee:

is

unless they needed money—then
they were
They could have been twice as successful if they
had put into every week at least half the effort
they made on those
days when they felt like working. There is something about work

world

then force himself

Kenowar, MacArthur
B. Kelly, Jr. of
Stuart & Co.; Victor P.

were

It

trains and boats, and this
a
pleasant two hours and

Now both of these instances are rare.
They don't happen often
But the point is that you have to see the
people. You can't sell
them unless you expose yourself to business. I have seen

Ernest

The

on

After

the train and he got

on

passenger.

up a good account and
initial order for about
$10,000 worth of securities.

of

Halsey,

riding

was

fellow

a

together, this salesman opened

Arthur

Co.;

with

friendly

more

working in

Co.; Gilbert S. Currie
& Co.; Reginald Mac-

Crouse

It is just possible that he is

a

working at least eight
square peg

in

a

round

hole and doesn't know it.

Bosworth & Co.

Chairman

of

Committee:

the

John

Membership

K.

Roney,

W.

C. Roney & Co.

Chairman of the Finance
mittee:

Gilbert

S.

Since 1871,

Aiding in the Development

Com¬

of Canada

Curtis, Crouse

& Co.

Garry Investmenl
Story to Businessmen
DETROIT, Mich.—The invest¬
industry is carrying their

ment

story to other business

men

Metropolitan

area

members

"If

Detroit

of

clubs

eon

number

a

will

the

excessive

are success¬

they will force
closing down of the nation's

listen

of

to

in the

when
lunch¬

reasons

why they should "Invest in Amer¬
A

tatives

joint

of

public

made

the

relations

of

up

Detroit

represen¬

Stock

Ex¬

change, Securities Traders, Invest¬
ment
Bankers, Bond Club and
Investors'

Brokers is sponsoring
they hope will further
develop a positive philosophy of
our free
enterprise system which
calls
for
voluntary investments
ranging from government bonds

the

plan

Make this Bank Your

are

Bureau, from
for

and

speakers

Assisting
Crouse

of

William
worth

in

the

which
are

requests

Chairman

and
and

of

of

Charles

B.

and

Co., are
Braun, Bos¬

Crouse

and

Co.;

Raymond Laude of Goodbody
Co.

in

are

are

available to

invited

Canada,

49

you

regarding

agents,

WALL

W. RICE, Agent
R. G.

HOGG, Asst. Agent

and

Currie

trade

NEW YORK AGENCY:

Co.; Charles Bechtel
of Watling, Lerchen and Co.; Gil¬
bert

Inquiries

plant

STREET

being filled.

Crouse

Adams

clients.

locations, Foreign Exchange regulations.

Speakers'

all

your

Export-Import

firms and investment houses
included

Correspondent in Canada

Complete modern banking facilities

to the furnishing of venture cap¬
ital.
Members of local
broker¬
age

"Although these facts

proponents

three

Roney

cer¬

-

ment

MacArthur

Frank
P.
Meyer of
Michigan Corp.; Merle J.
Bowyer of Braun, Bosworth &
Co.; John K. Roney of W. C.

committee
up,

*-

"Another government

He drove

The sales¬

money.

balanced fund with the young

good men

Reginald

Halsey, Stuart & Co.

com¬

inflationary trend is that

mortgage credit curbs

another

Meyer

meeting
held Sept. 6,
1950, the directors of

ica."

quickly used

are

a

cur¬

than I.O.U.s.

more

over

result

in reality

are

year

in

be¬

by issuing bonds, 91-day bills and
other forms of what

the

dent

a

Federal Reserve Board and others

restrictions

credit

by

fiat money is that
government does not resort to the

that

against the principal and interest

gage

done

worn

family

a

cumulated

by

The only

mone¬

tween this and

home," Mr. Johnson explained, "it
uses up

is

cre¬

which

money

process

none

tion," Mr. Johnson said.

simply

more

This

bookkeeping

the

form of extremely high down
pay¬
ments is necessary to halt infla¬
<"

stream.

printing
told

are

Reserve

r

is poured into the nation's

tary

as

to

financing, Mr.

financing

ates billions of

severe

of

defi¬

a

contrast

asserted.

"Deficit

Sept. 29,

termed

P.

/ Chairman of the Entertainment

world,

a

way

value."

its kind in the

in

Frank

DETROIT, Mich.—At

persons

constitutes

something tangible in the
wealth; something that has

Brooklyn,

fourth

'the

went

people

men

ployment for millions of

of

The

the

of

one

of

means

They started talking about saving

&

industries.

war

'

home

a casual talk with the young man at
The station attendant asked him his business and he

pump.

Second
Reginald

First of

fully

should release all the

and materials that

on

not

routine trip to a small town

a

up at the door but the filling
They decided that they wanted to
invest a thousand dollars.
Small sale, yes—but worth 15 minutes'
time—I think so, don't you?

Directors:

mcnths

on

ature.

Jr. of

against inflation.

was

station

Kenowar, MacArthur & Co.;
Vice-President, Frank P. Meyer of
First of Michigan Corp.;
Secre¬
tary-Treasurer, Ernest B. Kelly,

of

because of

different time and place.

all about 15 minutes' time.

President,

Holds

without much

was

his office.

man

of

Bank

unreasonable and unnecessary.

are

a

This salesman

case:

told him.

ginning Sept. 1:

Mortgage Credit Restrictions

your

fellow, became engaged in
the

rectors for

Protest

fact, if you will

you

Business had been slow, but he went out anyway.
stopped for gasoline at a filling station and being a friendly

in¬

harness

In

to

to prove the point
though, last week I heard of two
where being alert and exposing oneself to business
brought
two orders.
Both were from entirely different types of indi¬

He

the

enterprise

trols.

of

power

free

our

it.

came

Just

near

the less need there will

economy,

em¬

ployed successfully, they will

of

old friend

an

way

part, you will remember that it
past efforts that you got today's orders.

One

whole¬

existing framework

stitutions

good salesmen know

the times that business

on

upon

your

in

accomplish by means of monetary,
credit, and fiscal policies within

obviously, the measures
curbing inflation which I have

for

up

viduals, and at

hearted support to the prevention
inflation.
The
more
we
can

Quite

v

that is the

cases

of

Conclusion

DUTTON

make contacts,"

of mine used to say it.
"You have to see the people."
That is
the only way you are going to do business.
It won't come to you
without work and effort.
I don't think there is much argument
check

Delroit Bond Club

effects

throughout

lend

"You have to

about this and most

somewhat

rates

JOHN

By

country. Never

present monetary, credit, and
fiscal policies may be on the earn¬
ings and investment prospects of
savings banks, I am confident that

the

estate

the

at

present

another

as

be

can

of

experts

advice of bankers and

and

in

policy making

able to savings banks. This should
strengthen
market
demand
for
long-term Government securities.

presents

equitably and
problems, the

these

Reserve

assistance

and

and

new

wisely

in

estate

succeed

extension may reduce the
supply of such investments avail¬

experience to draw upon, restric¬
tion of real

controls

ernment

credit

extensive

an

the

during World War II. At the same
time,
reduction
of
real
estate

credit regula¬

consumer

credit

increase

than

requirements.

tion, where

for

deferring consumer expenditures,
savings deposits may be expected

resi¬

on

media

instalment and real

consumer

estate

but

minimum down payment
require¬
ments will be established

investment

35

and thus will pave

maintain

the

(1319)

A.

E. A. QUACKENBUSH, Asst. Agent'

HEAD OFFICE—TORONTO
Branches

Throughout Canada and in London, England

Private wire connects New York, Montreal and Toronto

offices

36

The Commercial and Financial Chronicle

(1320)

Continued

from first

.

E.

Our Current National Scene
ered

Week—Bank Stocks

Statements of New York City banks for the period ending
Sept. 30, 1950, published so far reveal a substantial expansion in
the loans outstanding as compared with the totals at the end ot
June and those of a year ago.

_

that

Increase

June to

Sept.

fr. June

1950

1949

to Sept.

$466,677

Manhattan.,

of

$427,795

$451,217
113,701
484,887
482,255
45,853
69,340
186.620

$38,882
8.520
97,785
55,722
13,108
11,262
—10.388

6.7
23.1
11.6
28.9
14.3

135,034
520.548

126,514
422,763

535.862

480,140

&

Commercial
Corn

90,078

155,154

992,079
486.150

982,767
405,488

956,427
381,683

9,312
80,662

0.9
19.9

Trust-

662.978

580.364

555,237

82,614

14.2

213,928

Bank-

1,501,446

180,924
1,337,790

194.538
1,347,435

33,004
163,656

18.2
12.2

250,814

243,719

239,441

243,436

193,541

148.753

45,267

52,799

49,044

7,095
44,945
—7,532

2.9
22.6
—14.3

Trust

Manufacturers

J.

Morgan,
•National

P

City

York

New

Trust.

National

Public
S.

U.

78,816

144,766

Bank..

Guaranty Trust
Irving

lean

the

of

banks

showed

portfolios during

the

4.7
63.7
—7.7

In

table

day

presented below

Bank

of

Manhattan—
NY

Sept. 30

J.

•National
New

York

Public
U.

1,102,808

337,340

1,069,344
396,005

free

368,402

93,882

99,128

171,175

183,461

179,007

464.294

471,958

745,406

742.474

739,968

315,478

349,552

1,079,906

1,102.405

436,218

458.345

1,060,833

1,068,962

998,900

2.135,910

2,100,794

253,330

627,937

658,647

2,312,110 2,335,397

2,315,253

620.992

349,571

593,305

567,026

4,688,598

314.962

272,096

668,186

687,472

156,454

220,334

471,514

465,476

475,248

63,963

59.091

58,507

115,354

115,740

113,236

an

increase

the

Federal

Golf

Hay-

Tournament

Baltusrol

took

second

and

spectively,
and

with

stability
the

of

and

national

to

Individual
score

went

Dominick

&




effort

of

economy

influenced

by the

welfare

of

the

man

occupies that position.

This

than fortunate that

more

who

one

carries

that

respon¬

who enjoys the well earned

man

net

of
a

our

contest

that

the

determine
destiny of mankind.
This

may

faces

nation

the

erable

body of opinion which be¬

lieves that profits of corporations,
as reflected by their rate of earn¬

ings

during

large

a

the

few

past

years,

"excessive" and,

are

if continued,
should go to the

share

government.
For the years

1946-49, inclusive,
earnings before taxes

corporate
were

than

more

large

five

during the

as

times

as

1936-39,

years

income after taxes

Net

Secretary

all,

of

the

that the

be managed

standing

the

Honorable

So long

he is

as

Treasury,

the
as¬

public debt wiil

not only with under¬

and

without fear

competence,
favor.

or

but

It will also

be managed in the interest of the
welfare

of

the

American

tion

for

people

rather than for any special bene¬
fit of any group or class.

such

proportions as to become a
increased tax reve¬
In
formulating any addi¬

nue.

tional

Spending

may

profits

ent

confronted

with

the

pres¬

large current expenditures of
Now arises the prac¬

government.
tical

necessity

of making addi¬
outlays for national defense

tional

that

may

billion

soon
more

or

to

run

per

corporations,

of

$20

some

year.

ample, the ratio of net income to
net assets of "leading manufac¬
turing corporations" averaged
13.8%. However, the average rate
of

receipts

in

1940

year

—

increase

an

of

about

groups

high as
even greater

to

30.8%, and with an

as

individual

between

variation

cor¬

porations. The average rate of re¬
turn

in
mining
and
trade
above 13% in 1949,
the

corpora¬

finance and in
9.4%; in public util¬

was

the

in

to

return

engaged

in

railroads, 8.7%;

ities, other than
and

of corporations

net assets

on

engaged

Class

of

case

rail¬

I

These figures reflect
the difficulty of developing any
equitable formula by which socalled
"excessive" corporate in¬
roads, 3.2%.

might

come

taxed

be

at

rela¬

a

tively high rate.

Raising

1950 of $37 billion,
compared with net budget re¬

3.3%

bom

The

idea of

its

budget

various

of

return

ranged

produced

net

In 1949, for ex¬

past four years.

obnoxious

as

fact

that all

corporations have not shared alike
in
increased
income during the

this money through Federal taxes
will not be easy.
Federal taxes
the fiscal year

the

not be overlooked

snould

service

na¬

to tax what the
consider "excessive"

program

public

tions

In addition to the necessities of
is

in-

fair target for

whereas

tion

large

corporate earnings, but

averaged

Present Heavy Government

managing the public debt, the

these

of

some

in

ci eases

profiteering is

war

the

to

American

peo¬

ple. The demand is that such prof¬
be

if possible;

prevented

and

if

not, that they be taken by the
government through some plan of
taxation. However, the machinery

objective

by which such

may

be

receipts.

dinate

must be to subor¬

move

economic

our

social

and

pared with the most prodigious
productive machine that the world

Dominick.

nimity of opinion that extra prof¬
attributable
to
the
military
program should be diverted to the
Treasury. There is also a consid¬
its

ing needs of the world situation.
The first

Dominick

&

there

revenue,

to

Cohu & Co., who tied
apiece." The "Kicker's
Handicap" prize this year was
awarded to George Hamilton of
75

addition to
is una¬

In

program.
for

taxes

achieved without serious injustice

Snow, of
a

fense

the balance

needed for the de¬

revenue

ernment

be

with

is required to provide
of the

600%. In both of these years, gov¬

adequacy.

Peck,

of

ceipts of $5.4 billion in the fiscal

difficult

of
Clark, Dodge & Co., and Charles

gross

per¬

ahead with varying degrees
of adequacy to meet the compell¬
years

Jr.,

Low

confidence

to

fellowmen and

life

Andrew

participated in this year's match.

with

hordes

strength and our
weaknesses, and prepare to mul¬
tiply our effectiveness to win a

re¬

low

Kremlin-

their

own

to

honors

to

firms

their

Nations

of the

in

Korea

evaluate

316

Osborne

Dominick

went

securities

for

James

Club, Springfield, N. J. Scoring
a
winning low net score of 315,
Sayer,
Captain,
John
Humm,
George Stanley and J. Sedlmavr.

of

the United

It is in this setting that we ex¬
amine the national scene, that we

tax

place

scores

honors

to

68.

composed of Caryl

third

disposable

Another and larger tax program

of total corporate income has reached

sibility in these difficult times is
a

have provided military

Asia.

317.

of

30

government

Fi¬

destroy this outpost of freedom in

Teams representing Clark, Dodge
& Co. and Dominick & Dominick

score

from

income

the

by

Communism.

of

Communist

conquer

Golf

Teams

financial

of the nation is

throughout
barriers to

erecting

the onrush

North

stand

our

peoples

in

we

inspired

provision most of the banks show earnings
favorably with previous periods. I

the 22nd Charles

the

in

free

advance

stop

610,394

109,251

of

world

nally,

4,611,284

280,473

golf team representing Mer¬
Lynch,
Pierce,
Fenner
&

was

of many

recovery

taken

support to

717,180

1,939,757 4,923,117

have

the

2,094,367

Merrill Lynch Team
Wins Golf Tourney

team

stabilize international

countries.

side

1,060,925

1,005.985

allowance for

the

cur¬

Through the Marshall
have contributed to the

the

figures of City Bank Farmers Trust Co.

at

realign

Through the ap¬
plication of the Truman doctrine,

378,398

after this

28

to

we

197,154

Memorial

The

ury.

surance

finance

1,361,688

151,341

the
same

man¬

American people have the full

1,327,825

161,453

the

sonal income.

is not inclusive.

John W. Snyder.

1,399,855

Even

Sept.

chal¬

1,390,495

made

den

size

It is the

national

1,040,504

864,943

National

won

its

and

constructive contribution by in¬
itiating steps in the field of inter¬

regard to the earnings reports, those issued so far indicate
modest gain in the per share results.
Some of the institutions

Eeane

this

answered

1.409,518

rate.

rill

have

1,377,984

have

A

debt,

concern.

nation is

556,049

•

Bank— 1,800.638 1,949,981

which compare

chief

our

service

to

character, the integrity, the capa¬
the city, the courage, and the devotion

a

In

a

freedom

and

494,257

Trust—

S.

323,432

342,545
Trust—

Trust

•Includes

the

who

Plan, we
rapid economic

993,379

_—_

P

City

conflict

lives and fortunes to

our

exchange.

84.792

Irving Trust
Morgan.

government

lenge by taking positive action on
fronts. This nation has made

1949

309,126

Manufacturers

of

debt is the Secretary of the Treas¬

clear, and to¬
choice but to de¬

no

rencies and

1950

441,793

Trust

it is

as

for the management of the public

649,505

National—

National

Guaranty

Supported

of

become

find

we

The

Sept. 30

June 30

1950

1949

in

tragic

world

a

511.288

149,533

Exchange

First

for

526,930

Av.

Bank

Corn

for

Constructive Contribution of U. S.

Deposits

Sept. 30

1950

288,276

Hanover

Commercial

era

432,703

5th

&

long

a

the

(000s Omitted)

Central

citizen

the American people in the ability

destroy it.

With only one

show the holdings of U. S.

we

June 30

1950

Chemical

but of every

every

many

Sept. 30

.

of

and

this country depends upon the in¬

preservation of freedom and to
combating the forces that would

little changed for the period and no major

U. S. Government Securities

of

business

manage

slavery

have

vote

Government securities and the deposit totals at the end of the last
two quarters and September, 1949.

Bank

living for

irrepressible

an

between

since

in evidence.

the

and

men

of

cooperation.

of

We
were

peo¬

happiness

mankind

of

facts

1949.

was

among

and

•

reduces

it

from

At

were

peaceful

in

required for the additional loans were provided, in

Deposit totals

we

not

standards

progress

program.

was more than four times as large
the evil designs of a agement of the debt that is of
in comparing these two periods.
powerful nation bent upon world prime importance. Many, varied,
In some cases, indications are that
conquest and the subjugation of and intricate are the considera¬
corporate earnings in 1950 will be
all free peoples to the dictates of tions for its proper management.
higher than for any one of the
a supreme police State.
At Yalta, They include the greatest degree
preceding four years.
*
Teheran, and Potsdam, and even of skill, the keenest knowledge of
at San Francisco, we could not effects, and the highest concept of Corporate Incomes—A Target for
make ourselves believe that the public interest.
The chief officer
Revenue
door was closing on the aspira¬ charged
with the responsibility
There
is substantial
justifica¬

exception, holdings of such securities showed a decline during the
quarter and were generally lower as compared with September,

trend

years,

Lurking in the shadows of those

favorable.

part, from the sale of U. S. Government securities.

integrity

by the productive capacity of this
nation and by the confidence of

years

Irving Trust, J. P. Morgan, and Public Na¬
tional all reported gains in excess of 15% from June to September.
In a number of cases the comparison with a year earlier was even
The funds

these

mankind lay ahead.

Commercial National,

more

financial

public

tegrity of debt.

of

Central Hanover,

periods.

two

The

debt.

the

of

only of government

all

all, with the hope that

10.0
11.4

increases

despotism

be subordinated to

considerations

peace

tions

impressive

rather

ground¬

the

improved

19.4
,

the

in

ples everywhere the ultimate ob¬

figures of City Bank Farmers Trust Co.

Several

their

—

Trust

♦Includes

45.404

58.512

National.

Exchange
National

first

other facts

jective of

3.7
27.4

5th Av.

Hanover...—

Chemical Bank

all

the

laid

sought for ourselves and for

—22.4

NY

Central

overshadow

nation's financial life. Every other
financial
consideration
in
the
economy must

had

Through

27.6
29.9

—6.7

Bank of

friend¬

of Communism.

3.4%
18.8
7.4
11.1

9.1%

act of generosity,

as an

the best guaranty that free¬

work for the rise of the

1950

1950

as

co¬

starvation

to Sept.

Sept. 30,

1950
Bank

resulting

defense

peoples

free

ly countries where bankruptcy and

Sept.'49

June 30,

the

dom would return to many

Percentage Gain

in Loans

merely

but

(000s Omitted)

Loans and Discounts

sacrificial

the

of

not

the City for the last
three months have indicated that a material expansion in loan
volume was taking place. The figures released this week by the
individual banks confirm it. The gain has been fairly general with
all but one or two banks showing improvement in the loan total.
In the following table we show the loans outstanding as ot
Sept. 30, 1950, compared with those at June 30, 1950 and Sept. 30,
1949, for the principal banks in New York City. Also shown are
the percentage changes between the different dates.
weekly reports of member banks in

Sept. 30,

corporations

prior to World War II. Thus, the
of enlarged defense program starts
with an increased Federal debt of
the earth had become a practical
necessity. This nation was then $206 billion, as compared with
dividing an inadequate supply of 1940. The size, the character, the
goods with a hungry and bank¬ ownership, the cost of carrying,
rupt world.
We were doing this and the management of that debt

I

The

some

time,

JOHNSON

operation

THs

capture for
of the in¬

and

government

creased income of individuals and

Bank and Insurance Stocks
II.

quickly

revenue

page

the

By

Thursday, October 5, 1950

.

.

the

to

demands

of

military

Whatever the military

needs may be,

they must and will
The American peo¬
ple will be satisfied with no less
provided.

By contrast, during that

has

is

well

pre¬

than

to
as

175%.

increased
much

known and with vast po¬
tentialities
as
yet unrealized.
ever

Geared to the demands of

a

conflict

the

directed

and

to

world

de¬

what

increased

more
as

than

less

three

times

income has increased.

immediate

extent

tional

the

outlay

question

projected

should

be

is

to

addi¬

of

additional defense outlays
the
fullest
extent
possible.

cost
to

after calling for addi¬
military outlays, the Presi¬

of

dent

the

United

States

quested

tions,

we

portion of these outlays, with

On

the

as

financial

well

Federal

debt,

Treasury,
pares

of

with

of
a

less

the

in

billion

net debt,
on

we

are

The present

cash

$252.4

$46.6 billion

preceding

front,

situated.

less cash,

June 30,

defense

the
com¬

1940,

program

We

law.

the

government
taxes

due

should

also

of

avoid any

stimulation of wasteful

practices

that

Unless such

result in
tax, revenue.

would

substantial losses
a

of

structure is most

tice will result; and the damage to

strongly demands that addi¬

tional taxes be levied to cover the

On the score of productive capa¬
city in competition with other na¬

not

amount

ment

tional

have little to fear.

the

to

to

and

taxpayers

under

covered

Promptly

the rest of the world.

experience

carefully designed, serious injus¬

put of food and goods and services
surpass

design.

by additional taxes. Public senti¬

fense of freedom, the nation's out¬

can

difficult to

Thus, the tax burden has

income

personal

have

The

States

taxpayers is

pay¬

total

ments

answer.

The United

other

We should profit by the
of
the
last
excess
profits
tax
law
and
eliminate
some
of the areas of uncertainty

period, gross na¬
product, national income,

tional

as

exceeded

ten-year

same

and

expenditures

tional

tain

levy

addi¬

cover

follow.

been

Congress

An

It

cer¬
as

which

with

tax
takes

bill
an

this

.

Large Incomes Already Heavily
Taxed
In

the field of personal income

problem

tax, the
for the

are,
to

reason

is also difficult

that large incomes

already taxed at what seems
many

rates.

erant

ceived

to

be

excessively

high

Furthermore, the prepond¬

portion of total income

individuals

is

lower income brackets.

In

by

in
a

re¬

the

chart

in¬

filed by the Treasury Department

produce additional

with the Senate Finance Commit-

bite

will

acted

"interim"

enacted

immediate
come.

a

possible and with others

as

dispatch.
has

to

promptly to

in

structure

corporate

country will be severe.

re¬

levies to become effective

quickly
to

Congress

taxes

the

out

of

1950

Volume 172

tee

Aug. 2, 1950, it

on

that

Number 4948

of

the

total

;.

shown

was

in¬

net

surtax

The Commercial and Financial Chronicle

.

received by all taxpayers at
1950 level of income, 88% is

come

the

with

which

as

government,

It

is

evident, therefore, that any
large increase in revenue from
personal income tax must come in

rates of tax on

all groups.
the

practical

are

personal income of

At best, such increases
heavy sacrifices on

involve

part of most taxpayers.

gift tax laws

Present estate and

These tax

should be re-examined.

reasonable
nor can they

laws do not produce a
of

amount

revenue,

equitably.

administered

be

A

integrated and revised
gift tax program offers

properly

is

all

of

This constitutes the most
with which

area

to deal, because here
flicts with
some
of

have

we

arise

the

self-interest

itself

individualism

of

on

should seek to increase his income

through additional

that the

wages,

farmer

should

income

his

increase

excise taxes

The entire field of

re-examination. Many
adjustments of rates are indicated.
Under

bill, a few
and there

recent tax

the

items have been added;

a

should carry

be others that

may

There

share of the tax burden.

some
cases
in
higher excise tax rate
would not only produce additional
are,

doubt,

no

which

a

would
serve
the purpose of restricting
civilian
purchases
of
material
at this time,

but,

revenue

needed in the defense program.

There

presently

some

are

empt commercial and

business op¬

erations that should be

but

also

taxed not

revenue produced
insure that all enter¬

the

for

only

to

prise operated for profit and in
competition with tax paying busi¬
ness will carry a fair share of the
tax burden.
Although I am op¬
posed to the further encroachment
of
Federal Government on the

local govern¬
ments, it would seem that there
is no justification of the exemp¬

rights of states and

from

tion

Federal income tax of
further

from

income

municipial securities.
It is clear that we
fronted with the

ing more and
to

issues

of

Every tax

are

con¬

necessity of add¬

heavier tax burdens
overloaded.

should be ex¬

avenue

plored.
At the same time, -the
greatest eare should be exercised
that the burden should not be¬
come

so

great as to destroy en¬

the incentive
to work and produce and to save
and invest.
The task of evolving
such a program will require skill
of a high order and should com¬
mand a full degree of cooperation
between government on the one
hand and taxpayers on the other,
i
The financial requirements for
itself

terprise

and

possible
military action constitute a great
adequate defense and for

unknown as to amount

of money

period over
demands will be
moment, it would

required and as to the
which

heavy

made.

At

the

that for some years ahead
such additional requirements may

appear

exceed $20

ing

billion

moderate

a

a year.

Assum¬

increase in the
and a sub¬

volume of production
stantial decrease in

Federal spend¬

and

mands

present military de¬

operate

on

a

pay-as-

basis will not be too great
economy to
stand, pro¬
vided there is an equitable distri¬
bution of the load.
However, in
the event of an all-out war, mili¬
you-go

for

our

would likely re¬
expenditures beyond pos¬
current revenues. This would
demands

tary

quire
sible
raise

new

problems of deficit fi¬

nancing.
Control

Inflation

Out of the increased

production

required for the enlarged defense

one

of

others

large extent, inflationary
pressures
may
be contained on
the

and

financial

front.

Several actions have already been
taken in these fields and there are

action

In

one

the

credit field,
recognized that

sible

U.

and

is

here

yet

stern hand of

The

under
as

other

conditions.

S.

Government

Continued

government control.

Congress has recognized the

CHASE

THE

vast
powers, far
beyond
immediately needed, to take
steps necessary to contain infla¬

those

tionary pressures.
This

actions of

by physical
and effect, but is

cause

BANK

NATIONAL

is

action

human

of

area

controlled not merely

The wide¬
buying by consum¬

largely psychological.

OF

OF NEW YORK

CITY

THE

following the Korean outbreak
arose from
no
shortage of goods,
ers

but from
of

fear that

a

experience

The

thought

very

shortage of
of

SEPTEMBER 30, 1950

II.
possible
War

a

item sends masses

an

hysterical

into

people

of

STATEMENT OF CONDITION,

product

was a

World

in

RESOURCES

buying
The

beyond their current needs.

of
increased prices
speculators
into the

expectancy
the

sends

for

not
but on which they hope to
exceptional profits. Part of

markets

need
reap

they

goods

$1,302,922,651.36

do

the task, therefore, is one of edu¬
cation and persuasion. To the full¬
est

Cash and Due from Banks

possible extent, voluntary con¬

U. S. Government
State and

Obligations

Municipal Securities

1,492,793,271.86

....

.

.

.

.

only to exercise self-restraint

not

but

known to

make

to

that

and out Of the financing
expenditures involved arise
the most difficult problems




everyone

178,285,802.00

.

Other Securities

196,809,183.17

of

purchases

unnecessary

38,121,660.03

Mortgages
Loans

1,587,141,192.98

.............

goods and services create the dis¬
astrous conditions that we seek to

Accrued Interest Receivable

Fortunately, the American
people have accumulated during

Customers'

unusual
supply of durable consumer goods;

Banking Houses

avoid.

the

four

past

and

in

reduction

reasonable

a

an

years

;

Acceptance Liability

of

supply
incur

not

need

Other Assets

10,032,348.95
26,037,521.16

....

28,915,076.94
3,357,299.09

.

goods
widespread
hardship. The nation is fortunate
available

such

14,864,416,007.54

any

supply

of food¬

stuffs and in the greatly

increased

abundant

its

in

capacity to multiply food produc¬
tion through the intelligent use of
commercial fertilizers and
good

The goods needed

farm practices.

present defense effort can

for the

the
production that is avail¬

for the most part, from

come,

increased

able from the better utilization

the labor supply, and through

mechanization

creased

of

in¬

effi¬

and

ciency in production methods. The

requirements of the current situa¬
tion

ahead

production
the

only
the

for

diversion

moderate

civilian

of

from

goods

to

military.
threat to maximum
come from ill-

could

advised and unwarranted demands
on

the part of the

ganized
either in

an

that

labor

or

a

tion,

.

....

Other Liabilities

2,960,000.00

.

.

16,740,369.20

.

......

32,586,003.78

.

.

...

.

.

.

.

.

16,710,006.57

4,496,226.57

Portfolio

Capital Funds:

Capital Stock.

.

.

.

$111,000,000.00

leaders of or¬
might result

Surplus.

.

.

.

Undivided Profits

189,000,000.00

51,750,814.04

351,750,814.04

inflation of labor costs

stoppage of essential produc¬

both.

or

.

Expenses.

Acceptances Outstanding
Less: In

.

Payable November 1, 1950.

Reserves—Taxes and

t,448,165,040.52

...

(7,400,000 Shares-$ 15 Par)

A* possible

production

Dividend

....

time

be needed

will

there

some

that

indicate

LIABILITIES

Deposits

$4,864,416,007.54

Any evaluation of

realis¬
recognize that the greatest

the national economy to be
tic must

concentration

of

economic

power

United States Government and other securities carried at $335,954,818.00 were

pledged

in this nation is now in the hands
of

the leaders of

organized labor.

of them

tion

or

power
even

can

single

so

one

great as to challenge

government itself. The Presi¬

dent

called

of
on

the

public and trust deposits and for other purposes as required or

paralyze the produc¬

distribution of goods. Such

is

to secure

United

labor

and

States

has

management

Member Federal

So

securities, for

an

States

our

the commercial banks have

.faim BANKING^

necessity for such controls and has
given the President of the United

of

which, in the public interest, an

be used to dampen in¬

may

realities

41% of their assets in the form of

it

an
effective control of loans to busi¬

ness

is less freedom of

the

large national debt, and
its ownership, than would be pos¬

long

general

has long been

under

present

follow.

to

a

credit

in which there

means

of the
most serious present inflationary
pressures. We look to government
to set the example that it asks
reduce

to

in which the objective of re¬

program
of the

Controls

its

within

has

and

power

distasteful to the Ameri-.

are

At the nod of a head, a

of

Credit
To

the

straining inflationary forces can¬
not be achieved except through the

a

for nonmilitary purposes as
compared with fiscal year 1950,
the
additional tax burden that
will enable the Federal Govern¬

ing

ment to meet

conditions."

credit

trols should be used. There is need

structure already

a

under

profit on the
Government con¬

people,

spread panic

ex¬

something

afford

of

area

requires

present

are

cannot

through

profits

wider

can

Require

industries

simply

through higher prices, and

trols

Taxes

vital

we

an

that the businessman should want
to

tional revenue.

Re-examination

wage

try to increase his

possibilities for substantial addi¬

Excise

avoid

would lead to

con¬

every front. It
is but natural that the individual
expresses

to

basic

the

springs of human action in which

margins
goods he sells.

estate and

in

the

of

essential

accomplishment
difficult

further increases in the

the

ob¬

obligation

of banking, and of
The preservation of a

dollar

sound

middle income groups.

It is clear that there

will

the public.

jectives.

from

measure

lower and

limits to

primary

a

the

substantial

to

other

tegrity of the value of the dollar

net

37

increases that further opportunities. The present flationary pressures. Speculative
inflationary spi¬ housing boom can be cooled off loans and other loans to finance
ral and to join in the further con¬ rapidly by restrictions of credit unneeded material and
supplies
solidation of industrial peace. In for housing, including increased have no place in an inflationary
his economic message to Congress down-payments on new housing. economy. Increasing interest rates
on July 26,
1950, transmitting the Here is an area in which govern¬ on loans has long been regarded
midyear economic report, the ment itself is directly and indi¬ as a deterrent to excessive bor¬
President said: "Work stoppages rectly
the largest
dispenser of rowing. However, this is an area

namely, the control of inflation. I
regard the protection of the in¬

received by those having a surtax

income of less than $6,000.

confronted;

are

we

(1321)

Deposit Insurance Corporation

permitted by law.

on

page

38

38

The Commercial and Financial Chronicle

(1322)

Continued

jrom

bankers

ers,

37

page

conditions
difficult

do much to avoid

can

that

the

will

task

make

of

the

opportunity for achievement and

more

Federal

the satisfactions
ard

of

living.

of

They should not people willing to sacrifice some of
unwittingly give support to those the comforts of easy living and
who believe that the independence part of their opportunities for the
orderly market must be main¬ mand for loans "by business and of the Federal Reserve System accumulation of wealth as the
industry.
should
be
taken
tained, there is a severe limita¬
away
through price
of
creating
the
national
tion on any action that may be
The controlling fact is that open government ownership and oper¬ strength needed to overcome the
market operations cannot be di¬ ation
taken
and
that the Government forces
that
would
by the Treasury Depart¬
enslave
the
vorced from public debt manage¬ should be
ment or by the Federal Reserve
financed, without inter¬ world?
ment. There snould be the great¬ est, by its own Central bank.
System to raise interest rates.
Perhaps we must now discover
est degree of harmony between the
We should not overlook the fact
In his radio message on Satur¬ how much of our individual free¬
that under the conditions of the two even though the objectives day night, Sept. 9, President Tru¬ doms we can surrender in a com¬
size, the nature, and the maturi¬ may be somewhat different; and man called on the American peo¬ mon effort, without losing them;
ties of the Federal debt,

securities and

ernment

all

extent

other

control

of

on
a

the

United

the

neces¬

ple

is

power

States

the

under

not

or

ties, including the Federal Reserve
System. It is unlikely that in the

tions of the size of the public debt
and the substantial ownership of

foreseeable
be

can

there

future
return

a

to

will

mercial

The

enable that system to
full

System has three principal powers
with which to fulfill these duties.
them

of

is

determine

to

com¬

responsibilities of credit

con¬

trol.
Under

re¬

recent

legislation,

Federal Reserve System has

given

relatively

small

control powers,

rediscount

rates

banks serves little

serve

raising

Federal

certain

ulation of

Re¬

more

which

discharge its

discount rates. Under present con¬

volume,

the

mild

than

additional

been
credit

including the

consumer

restraints

the

reg¬

credit. Rather

have

been

now

and

save a

to

the

in such

a

under

the hour

of

needs

larger

Here is

formula

simple

be met, and met

pow¬

ditions, with bank rediscounts in
by

brief

of

living, and to

part of current income.

the

as

position

ards of

of the Federal Reserve System

ers

cer¬

One

by

well

as

banking system, the present

System is

charged under the law with
tain duties of credit control.

banks,
financial

strong

free

money market.
The Federal Reserve

securities

government

be

so-called

a

self-restraint,

how

far

can

a way as

to minimize the needs for govern¬
ment control and at the

same

time

The
that

If the American

people could be
induced to tighten their belts and

men.

agency of government. The extent

ice

the

to which this power

since.

commercial

Reserve
to

bank

signed

banks

Banks.

reserves

for

the Federal

to

Present

as

de¬

not

were

financial

a

laws

structure

is

that has changed to a large extent
since their enactment and, there¬

cised

fore, produce

mains to be

mula

for

the

inequitable for¬

an

setting

up

reserve

the

volume

re¬

of

the

will be

effect

in

most

exer¬

reducing

construction

mar¬

In

ket operations of the Federal Re¬

the

current

income

it

the

of

The

before

greatest progress and de¬

are

needs

greater

be

nership

for

increasing
than

now

ever

in particular, for in¬
purchases of Government

and,

can

and

tion

a

&

may

seem

and

these is

governments

world

under

the

ANTONIO,

organized

ness

with

again render outstanding
public service in this field, as was

On

and

Sept.

in the

business.

same

18 the following per¬

officers

ensuing

were

elected

for

year:

President—Mrs.

Pauline

John¬

integrity

in, and from

capital

any

or

under ston, Volz, Carswell & Co.
with
First Vice-President—Miss Olga
move freely to, Kocurek,
Rauscher, Pierce & Co.
nation without
Second
Vice-President
Miss

and

"know-how" may
risk to life

friendship and
through
association

women

the

international

Texas —The

past

and to further

cooperation

of

maximum

national

this

May for the
purpose
of
broadening
their
knowledge of the investment busi¬

peace

throughout

for
is

Mr. Stephens

Investment Women of San Antonio

manent

incentives

11.

San Antonio Elect

provide

The third

and

will

Manager of the Trading

as

democracy that will release the
springs of individual action and
effort.

Oct.

on

SAN

toward

freedoms

York

formerly with Paul H. Davis

Co.

to

The second is the organiza¬
of

New

Exchanges,

Investment Women of

three condi¬

goodwill

the

Department.

dream, but its reali¬

The first of

which

grave re¬

was

the

of

Stephens

admit Donald B. Stephens to part¬

In the present world

requires only

earth

on

benefit

this vision

merely

zation

stream,
tions.
inflationary

current

race.

conflict,

the

to

done during World War II.

com¬

new

shortest

should

situation,
a

more

spending

Savings Bonds. The ABA

Bankers'

cur¬

throughout World War II and

creased

mercial bankers have

withdraw

and

the

from

savings

re¬

Responsibility
open

larger portion of their

a

most

seen.

Commercial

quirements.
The effectiveness of

ana

presently

Stock

human

inflationary field in size and vol¬ problems would be solved. This is
ume,
credit
for
housing.
This a field in which the bankers of the
power is shared with an executive country performed a notable serv¬

what

of

Midwest

potentials

transfer

with

members

the

of

the

impossible
vision

B.

CHICAGO, 111.—Cruttenden &
Co., 209 South La Salle Street,

period of time in
yield the most in the preservation the history of man. The potentials
of our freedom of individual ac¬ of production have
yielded many
tion. Here again, and particularly secrets unknown to man until re¬
in reducing non-military expendi¬ cent years, and the
atomic age
tures, we look to government to that lies ahead beckons the in¬
set the example for all to follow. genuity of man to
multiply those

rent

deals

power

make

the

Donald

century is
Communist

velopment in human welfare with¬
in

if

Another

would

of

and

the

ing reserve requirements of banks
accomplishes little more than to

from

democratic

of the peoples of the earth

hope
for

the

of

designs

dictators

save

needed.

tragedy

the

of realization

imposed in this highly inflationary
field, but they can be increased

a

earning assets

bend

we

of opposing nations.

warning gesture. Likewise,
under existing conditions, increas¬

as

can

increase

condi¬ penditures to actual needs, to ac¬
cept some reduction in our stand¬

present

government and its instrumentali¬

or

exercise

to

;

without
production by working processes
destroying
and managing its debt must, in harder and longer
hours, to avoid them. The unquenchable forces of
the greater public interest, take increases in prices and profits, to
liberty and freedom are far more
precedence.
limit wage demands to any rise in effective
in
destroying Russian
We may well question whether the cost of
living, to reduce ex¬ Communism than the armed might

large

rates

the stern

sities of financing the government

gov¬

to

interest

almost completely under
and

if conflict arises,

the deter¬

mination of interest rates

Stephens to

Be Gruttenden Partner

Reserve System.

Oar Current National Scene

Thursday, October 5, 1950

.

.

DonaSd

a high stand¬
the Aiyierican

Are

.

people

—

property. Mankind
up that dream, no

Eithel

Evans, Columbian Secu¬
the
Corp.
As we are beginning to move matter through what valleys of
erations of the size and rates of
Recording Secretary—Miss Lopossible, through individual and into a semi-war economy, under blood and sacrifice it must fight raine
interest of the Federal debt, the
Hislop, Bache & Company.
to achieve the mountain tops be¬
distribution of its ownership, and voluntary action in making loans. the threat to the survival of free¬
Corresponding Secretary — Mrs.
The American Bankers Associa¬ dom
throughout the world, with a yond. The goal is there. To reach Marion Walker, Dittmar & Com¬
the continuous necessity for re¬
tion as well as bank
supervisory- prospective reduction in the vol¬ it is the challenge of the ages. I pany.
funding a large part of it. At most,
agencies have urged that- this be ume of civilian goods, with a sub¬ believe that the people of this
Treasurer—Mrs. Virgie Elkins,
only minor rate changes can be done. The ABA
might well repeat stantially heavier tax burden, and country, under God's direction, M. E. Allison & Company.
made.
Such small changes, how¬ its fine performance of 1948 when with our
will shoulder the burdens of this
young men and women
serve

is

because

also

severely
practical

of

ever, may have

sions
ations

on

debt

limited

it

producing

Not

Easy

must

not

give

a

slight effect in reducing the de¬

rities

Misses

being called into military service,

hour and, with other friendly na¬

the road ahead is not fair

tribute to inflation.

oper¬

only

conducted

Ahead

paign for the voluntary reduction
of loans by banks that might con¬

serious repercus¬

management

while

Road

sponsibility, of containing infla¬
consid¬
tionary credit to the fullest extent

ple

tions,
preserve
and
strengthen
liberty
and
justice
under
law
throughout the world.

an

effective

cam¬

Comes

Through the

judicious exercise of credit

now

the test of

a

nor

easy.

free peo¬

who have enjoyed the bless¬
ings of democratic government, of

pow¬

Texas
Ann

AS

OF

SEPTEMBER

30,

RESOURCES
Cash and Due from Banks $
73,289,978.47

Deposits.

large to

.

George Nelson has become

...........

Unearned Discount

.$274,236,374:35

#

.

3,626,100.03

.....

$179,277,888.43

Accrued Taxes, Interest, etc.
Reserve lor Dividend

Securities

2,089,909.50

1,115,592.18

&

serve

on

the

.

.

Acceptances Executed

11,223,513.86

.

21,355,305.34
....

Time Collateral Loans

Co., 40 Exchange Place, New
City, brokers and dealers in

unlisted securities.

Co.

years

and

was

for

Mr. Nelson for

Lynch, Pierce, Fenner &
Edward D. Muir of Russ

&

Company; Edward T. Volz of
Volz, Carswell & Co.; Elmer A.
Dittmar
Louis

of

J.

Dittmar

Kocurek

&

Co.,

Rauscher,
Pierce & Company have accepted

with George Nelson an invitation to assist the newly
the past five years ventured club and to act in an

advisory capacity.

156,406.25

Bills Discounted

.

.

.

$4,802,766.14

64,190,838.09

3,278,677.29

7,938,101.98

1,524,088.85

Trading Markets in

CapitalStock$5,687,500.00

Corporation Bonds

(Par $20.00)

94,595,748.93

Banking Houses

3,074,045.99

Liability under Acceptances

1,474,022.49

Accrued Interest Receivable

Other Resources




Surplus

10,312,50000 16,000,000.00

Undivided Profits

*

463,225.39
172,117.08

.

3,369,215.20

Reserves

Save for Your

Preferred and Unlisted Common Stocks
19,369,215.20

State and

1,920,767.32

$300,412,353.65

Municipal Bonds

$300,412,353.65

Independence—Buy U.S. Saving Bonds

KIDDER, PEABODY
FOUNDED

zMembers

CO.

1865

EN^ew York and Boston Stock Exchanges

and

EN^ew York Qurb Exchange

Alert

New York

Boston

Friendly
Efficient

Sales

Albany

Altoona

Providence

CORPORATION

and

Baltimore

Reading

Correspondent Wires to:

NSURANCE

and

of

Acceptances Held in

Portfolio

22,466,808.86

.

Less:

.

Com¬

Executive

10,131,791.48

Other Securities

Customers'

Merrill

Beane;

asso¬

with Schwabacher & Co.

Payable Oct. 2,1950

Russ

H. H. Dewar of Dewar, Robert¬
& Pancoast; John M. Crane of

ciated with Stuyvesant F. Morris,
Jr. &

20

Slate,CountyandMunicipal

Demand Loans

.

of

the

and

son

S. F. Morris, Jr. Go.

York

U.S.GovernrnentAgencies
Securities

1950

(Includes United States Deposits $7,762,067.22)

of

Board.

LIABILITIES

U.S.GovernmentSecurities 102,361,{109.93

Lagleder

Guinn

Corporation

pany were elected as members-at-

George Nelson With
STATEMENT

Mildred

National

Philadelphia
Branch

Lowell

Scranton

-

Chicago

Offices
New

Springfield

Bedford

*

Newport

Wilkes-Barre

Dallas, Seattle, Atlanta, Washington, D. C., Buffalo

Volume 172

Continued

Number 4948

from first

.

.

.

The Commercial and Financial Chronicle

(1323)

tion is not

page

likely, if not

soon

remedied, to have untoward

Auchincloss, Parker

consequences.

We See

As

tion for him

will, of

World War II.

course,

It
be much what it

He will want to head

after

was

movement to

False Notions
We shall not undertake

today to say what ought to
premises. That is a tough question. Its
answer should be based upon a
good deal of information
which the American public does not have. What we feel

be done in

no

the

hesitancy in saying is that this is the time for

rid ourselves of

of the false notions which

some

so

us

betrayed us five years ago, and which tend to cling per¬
sistently to life. The idea that somehow the philosophy
of the Kremlin was more closely akin to ours than that
of the Hitlers, the Mussolinis and the Japanese, is now
not

widely held, so far as we can see. We should
that this particular type of nonsense would
scarcely be due for revival at this time regardless of the
developments during the next few months.
There are a number of misconceptions, however,
which cling to us. Recent developments may even have
strengthened some of them. There can be no doubt that
the events of the past few weeks in Korea have cost the
Kremlin much prestige in Asia.
It could scarcely be
otherwise. It is possible that ours has risen in proportion.
If there is anyone who supposes, however, that because
of this the teeming millions of Asia have now become more
enamoured of what we call democracy and individual free¬
dom, and more willing, not to say eager, to apply it to
their own affairs, he is indulging in wishful thinking. The
fact is that most of these peoples have not the faintest
conception of what it is that we preach (and practice more
or less)
in the name of democracy, and if they had any
such idea they probably could not at present at least

WASHINGTON, D. C.—Auchin¬
closs, Parker & Redpath, 729 15th
Street, N. W., members of the New
York

sors.

Western

powers?

conditions
as

were

of

sort

some

11

the Asiatics do

this

on

The time has

Oct.
Ed¬

Gilbert,

Naylor,

Parsons,
Millard

F.

West, Jr.

their

and

Jr.,

Messrs. Gil¬

very

suppose

make much

headway in adapting it to their

The fact of the

matter

is, of

course,

needs.

own

that much the

is true of many

other lands. In some of these the
trend of thought is very definitely toward an economic
system which is much more like the Communist (sans
Kremlin) concept. Great Britain, for so long a leading
exponent of individualism, is leaning very definitely in
that direction. We should have a little difficulty in build¬
ing a purely logical defense of our support if we had to
base it upon the claim that we were trying to save "de¬
mocracy" as we have known it and preached it for a
century and three-quarters.
Germany, of course, has
never been able to make
democracy work very well, and
;at heart does not believe in it. And so the story goes.
We would do very much better to consider ourselves as
struggling to stem the tide of Kremlinism and Kremlin
aggression, so far as trying to win the "minds of men"
same

THE NATIONAL CITY BANK OF NEW YORK

Condition

of September 30, 1950

as

LIABILITIES

ASSETS

Cash, Gold

and

Due

Banks

from

U. S. Government Obligations
Obligations

.

,

$1,300,558,046

deposits

1,711,027,802

Liability

.

Accept¬
Bills

Municipal Securities

and

Other Securities

Loans

Real Estate Loans

.

and

Customers' Liability

1,500,435,838

.

.

Securities

Portfolio

Stock

of

7,000,000

.

.

Bank Premises
in

27,183,139

Transit

Branches

with

.

11,403,306

....

29,848,685
2,635,000

Dividend
.

.

Other

and

Interest, Taxes, Other Accrued
Expenses, etc. . . ....

International

Banking Corporation

Items

23,762,831
7,500,000

.

8,881,200

.

for:

Unearned Discount

Unearned Income

Federal Reserve Bank

in

Reserves

for

£

26,355,424

13,043,293

Foreign Central Banks '

to

(In Foreign Currencies)

2,603,320

Acceptances

Ownership

Due

118,533,917

.

Discounts

and

428,310,003

.

$39,398,717

.

Less: Own Accept¬

49,801,599

ances in

State

$4,823,894,308

.

on

ances and

Other Federal

of

Agencies

28,895,944

.

Other Assets

3,485,375

Capital
.

Figures of Overseas branches

$124,000,000

(6,300,000 Shares—$20 Par)

Surplus

.

.

.

.

I',

Undivided Profits

$5^209,097,814

Total

126,000,000

are as

306,079,891

56,079,891

.

Total

.

.

.

,

$5,209,097,814

of September 25, 1950.

$326,276,856 of United States Government Obligations and $10,873,400
to secure $250,528,785 of Public and Trust Deposits and for other purposes

of other assets are deposited
required or permitted by law.

(member federal deposit insurance corporation)

■

in other countries of the world is concerned.

OJfice: 55 Wall Street, New York

Condensed Statement of

Chairman

Chairman

of the Board
Jr.

President

of the Executive Committee

Howard C. Sheperd

W. Randolph Burgess

Wm. Gage Brady,

Facts Are Facts

Another

plain truth that we should tell ourselves
{without blinking is that we must face the world as it is,
.and not try to pretend that facts are not facts. When the
Bolsheviki took over in Russia and for years thereafter,
'most of the rest of the world, and in particular the United
States, insisted upon ignoring the fact that this group of
revolutionaries had firmly and permanently (or as per¬
manently as anything in history is) placed themselves in
control in that vast sprawling land. After long years we
and the other peoples of the world came to the conclusion
that such a policy was ostrich-like, and changed it—at
{least in outward form.

There

can

these years of foolishness are in
'current attitude of the Kremlin.
For
.

•

same

sort

Let there
tion

t

a

more

for

doubt that

communism,

than

we

had

or

no

matter where it

is found—no

have for Hitlerism,

"isms" of the past decade

little idea how well

anyone

with the Communist leaders

Head

or

any

of the

Condensed Statement of

or

two.

We have

in China.

It would appear

and

Due

from

least.

But what

dealings with them difficult, to
we

will be in the control of any
our

or

other element.

rather unrealistic attitude




again

State

and

of

We wonder
on

this ques¬

.

Condition

and

of September 30, 1950

as

.

Deposits

Reserves
.

1,548,508

Municipal Securities

.

.

$ 99,223,220

'.

.

.

.

.

.

.

.

.

.

3,361,863

(Includes Reservefor Dividend $155,295)

10,812,849

.

.

.

Advances

.

Real Estate Loans and
in

separate

functions

89,610,125

Other Federal

...

Other Securities
Loans

$ 22,448,822

.

.

.

.

.

.

Securities

Federal Reserve Bank

,

1,892,570

.

Capital

....

$10,000,000

Surplus

....

10,000,000

1,010,771

.

.

1
600,000

Bank Premises

2,845,042

Other Assets

Undivided Profits

10,640,671

30,640,671

2,457,066

Total

•

$7,769,402

of United

$133,225,754

Total

.

.

f. $133,225,754

.

States Government Obligations are deposited to

$2,258,698 of Public Deposits and forpther purposes

the

soon

trust

LIABILITIES

....

.,

Agencies

required

or

secure

permitted by law.

(member federal deposit insurance corporation)

do wonder about is just what do we

gain by pretending that China either is
also whether

say

Banks

U. S. Government Obligations.

highly probable that their rather long Kremlin tutelage
would make any

Bank of New York for

ASSETS
Cash

Stock

could "do business"

Office: 22 William Street, New York
administration of

Obligations

good while now we have been doing much the
of thing with respect to Communist China.
be no misunderstanding. We have no admira¬

other strange
very

be little

part responsible for the

CITY BANK FARMERS TRUST COMPANY
Affiliate of The National Qty

Chairman

of the Board

W. Randolph Burgess

in

will
the

office; Mr. Nay¬

lor in Baltimore.

Head

Robert

Parsons

headquarters

firm's New York

f

K.

McGeary,

D.

Sullivan, Jr., and

Mark

McGeary

bert,

plain thinking and plain speak¬

P.

Joseph

Jr.,

John

make

ing about these things.

on

Finkenstaedt,

R.

Lawrence

bondage by the

score.

for

come

H.

Exchanges,

other

partnership

McCammon,

should not feel just about

we

Edward

ward

We sometimes wonder whether, if the

reversed,

Washington Stock Ex¬
and

will admit to

But what about the Asiatics who for centuries have

all too often been held in

and

changes,

them, in order to defend ourselves from Asiatic aggres<

to

badly

To Admit Partners

Finally, we cannot afford to dismiss lightly or to
ignore the suspicion that many foreign peoples have of
our intentions as
respects their territory or their affairs.
We may, ourselves, know in our own heart that we do not
covet any of the territory of Asia, or wish to obtain any
"concessions," or any of the rest that goes with colonial¬
ism. We doubtless are fully convinced of our own sincerity
when we insist that we must
keep possession of the Pa¬
cific islands, or at the very least have
strong bases on

"get
our
boys back home" not only from Korea, but from train¬
ing camps and all the rest. It is the more modern form
of a return to "normalcy" which swept the country in
Harding's day.
v
a

39

President
Lindsay Bradford

40

The Commercial and Financial Chronicle

(1324)

.

Thursday, October 5, 1050

.

.

i

Continued

from

page

It is

3

imperative, therefore, that
the
strongest possible

there

be

within

resolve

An Anti-Inflation
stricted,
ties

example,

for

made

of

copper,

increased

re¬

the rate of growth of tne

productive
Thus,

power of

the economy.

Three

Preventing

in

Ways

Price

Rises
There

would

They

effort.

trols, including wage controls. In¬
creases
in the prices of products

which, in the ab¬
preventive measures, is
In the sec¬
ond
place, if consumers expect
shortages or rising prices, they
may seek to use their savings as
a source
of spending power, and
to borrow for the purpose of buy¬

fixed

ing

organizations would face a dis¬
couraging exaggeration of the tre¬
mendous problems which wartime
and postwar inflation have placed
upon
them.
The
distortion
of
incomes caused by inflation would
channel production into unusual
and unsustainable patterns, thus
sowing the seeds for later depres¬

of

durable

consumer

goods

and

housing. Businessmen, anticipat¬
ing the increase in governmental
and

private buying, seek to ex¬
pand their inventories and en¬
large their facilities. All of these
elements

combined

de¬
mands
for
civilian
goods
and
services substantially in excess of
supply. In the absence of preven¬
point

to

incomes

of

assets

own

or

performed by price

the factors

fixed money

and

of

increases

value. The members
armed forces, millions of

the

persons

living

on

and

pensions

rising.

Public

morale

would

the

In

market forces

and

Educational and charitable

sion.

production
incomes

Direct

con¬

controls

of

supply

that

way

of

damage^

process,
are

may

of

the

inflationary

tools

in

case,

be done- to the

methods

A second method of

forestalling

inflationary price rises is to pre¬
vent current
incomes, past sav¬
ings, and newly created
credit

generally, which, in turn, would
lead

to

still

'further

higher prices, and

demand,
There is

so. on.

confidence
the

dollar,

in

the

with

sequences.

;■

delayed—public

people that it is in
.of. their interest and the public in¬

future

disastrous

is very important also

It

to persuade the

terest to

con¬

But

..

save more

and spend less.

forestalling inflationary price

preventing

purposes

of

the

defense

pro¬

through

un¬

infla¬

through
been

of

inflation

compared

burdens

has

sometimes

favorably

to

the

distribution of burdens by certain
forms of taxation. There is this

difference.

important
be

reduced

can

the

But

Taxes
need

for

the

and cost structure has

become in¬

higher

a

effort to

any

price

achieve

lower price

level

likely
to
result
in
unemployment and
depression, causing greater social
losses than the social gains which
lower prices would
confer. The

only

to

way

inflation is to

cure an

prevent it.
Higher Taxes Now No Economic

preventing infla¬
rises on which I

price

wish to concentrate is that of in¬

creasing taxes.
again that
time

a

any

like

Let

this

does

economic

new

emphasize

me

increase of taxes in

an

not

create

burdens.

The

defense program has created them

already.
do

is

All that the higher taxes

to

distribute

burden at

the

and

financial

Cash and Due from Banks
U. S. Government

.

Obligations

$1,479,958.26

finally.

Tax¬

ation is superior to other methods

The

Obligations of U. S. Government
Agencies
.

State and

I.

Capital Stock of
Hospital National Bank

It

10,000,000.00

burden at the

same

time the

must

inevitably be

.

Mortgages

.

.

.

Profits

.

15,238,739.76

.

2,900,000.00

497,187.52

......

It

of the

it

Other Time

62,500,811.36

Deposits.

.

.

24,962.16

.

Treasury Tax and Loan Account

1,221,913.93

Deposits

4,012,500.00

on

Securities Loaned

.

and

too.

.

.

.

.

$87,869,398.07

Statement, June 30, 1950

U. S. Government

Obligations

..

total cost of the

should

Obligations of U. S. Government
Agencies

2,207,353.00

State and

Municipal Obligations

Other Bonds

.

Surplus

.

.

•

$5,000,000.00

.

To

Stock in

Federal

Other Assets




2,303,154.33 $12,303,154.33

.

.

Reserve

.

.

Bank

45,245,097.61
300,000.00

333,781.87

as

to

.

.

....

Treasury Tax and Loan Account

124,731,893.80
3,918,129.99

$141,800,400.76
15 Westminster Street,

847,222.64

$141,800,400.76
Providence, R. I.

believe that

to

we

to face is

seem

superboom
there

economic

^the-

exceed

What

in

economy

should

and

can

limit.

kind of

a

which

be

sub¬

a

stantial

surplus of revenues over
expenditures in order to hold
down

total

which

private

being

are

well

as

by

as

expenditures,
by savings

fed

incomes.

current

This is perhaps a counsel of per¬
'

.

.

At this

point you may have two
questions in mind: First, whether
it is proper to talk of higher taxes

without

also

seeking

to

nondefense

tures and second,

reduce

expendi¬

why it is

neces¬

to labor the point about pay-

finance since everyone
to agree with it.

as-you-go

Of

course,

should

we

make

effort to reduce government
expenditures. There is no excuse
every

for

inefficiency in government at
time. Efficiently run govern¬
programs may be worth
what they cost;' more than they
cost, or less than they cost. The
last, of course, should not be un¬
any

ment

But
determining the
governmental programs

of

to various

is

segments of the public

economic and

an

even

sophical problem of
mensions.

It will be agreed, how¬

that

ever,

some

of relaxed peace may

when

way

the

have to give
on
the

pressure

it is rising today.

as

period

a

of defense requirements

economy

rises

which

programs

clearly worthwhile in

are

philo¬

a

small di¬

no

I do not

recall
not

effective

an

measure.

If

go,

out

that

it
to

are

trines that economists

the

narrow

The

of
we

is

of

accept

any

doc¬

universally
of them.

one

war,

it

was

by price

con¬

of

raising
quick re¬

one

recent

action of the public in demanding

general price controls at the out¬
of

We

the

Korean

crisis

continuation

a

may

recall

controversy
and

also

over

1948,

reduce
ment

The

of

may

re¬

that view.

some

that

in

the

members

believe.

may

grams

pro¬

not spawned by a few

are

willful

Government

ap¬

you

They

men.

result

from

pressures

adapted

do

not

effort

such

to

reduce

expenditures which
the
productive

promote
and

defense
we

resisting

to

The

government

public

morale

of

a

is laudable, but

economy

should not expect too much to
from it.

come

The general acceptance

today ol
paying for the defense effort
through current taxes represents
a

great

ment
ago.

advance
that

over

In 1940

in public senti¬
existing 10 years

small defense
financed by borrow¬

a very

program was

ing which was to be repaid over
a five-year period.
I hope the ad¬
vance

represents

gain. Thd
phasis
go

reason

permanent

a

I place great

em¬

the desirability of pay¬
the defense effort as we

on

ing for

is that I

fear that while gen¬

eral agreement on this

desirable

very
may

not

be

policy is a
development, it

rooted

in

very

deep

earth.

Borrowing

of

rather

than

de¬

from

those

war.

The volume of government¬

period

of major

vs.

Taxes

Almost everyone is for pay-as-

The test is whether you
I will still be for
pay-as-you-go

you-go.
or

financing problems of the
emergency are different
a

low

a

more

tax reduction in

defense

of

have

widely
preciated in Washington than

Congress maintained that taxation
was inflationary
flationary.

that

programs

priority will be

pressures.

ariti-inflationary

was

am

well

first

there

I

are.

the

go,

we

programs

anything you can do to
expenditures on govern¬

reasons,

view

necessary

as

certain
that

for

economic belief that taxation

1947

Other Liabilities L

opinion,

my

to

the level of taxes required to bal¬
ance the
budget will be so high as

power

course

flect
.

In

reason

the

we

this

pay

set

Deposits

no

In

funds

defense program

paid

hold

revenue.

5,000,000.00

.

Undivided Profits

effort,

by large groups of the
public. Our political system is not

revenue.

should

was

334,033.56

Loans and Discounts

normal

trol and that the function of taxes

Capital

2,390,000.00

......

be

a

for

pay

the

providing

fight inflation

LIABILITIES

61,979,532.04

fighting

maintained by many people, in¬
cluding some members of Con¬
gress, that the appropriate way to

RESOURCES

$29,010,602.68

of

and

forces from

is

believe, this is surely
Yet, during the last

[Member Federal Deposit Insurance Corporation]

.

armed

eco¬

men

government expenditures.

is

.

the

protects

absence of very good

the

Rhode Island Hospital National Bank

financial

coming home to

method

1,393,803.81

.

the

Taxation

current

Other Liabilities

the

the ironic unfairness of
war

$87,869,398.07

Cash and Due from Banks

burden

women

3,715,406.81 $18,715,406.81

.

.

1,500,000.00

.

distributes

borne.

Savings Deposits
9,984,000.00

Banking Houses
Other Assets

$5,000,000.00

.

523,979.58

in

Loans and Discounts

Real Estate

.

and Undivided

1,594,944.60

defense

likely to place far

seems

economy.

there is

tant

.

Guaranty Fund

high enough to

less than full wartime pressure on
the

sure

.

.

820,449.72

.

........

Investment
R.

408,334.58

....

Municipal Obligations

Other Bonds

Stocks

.

Capital
Surplus

limit

economic

been

prospective

however,

It does not pre¬

nomic

.

war.

much

knowing anyone who does
recognize this effect of chang¬
of
preventing inflationary pries ing times on the importance of
rises in important respects. It does governmental programs. Of course,
not interfere with the operation
opinions diffex about how impor¬
once

of market forces.

LIABILITIES

52,921,804.05

.

been

permit balancing the budget then.

sent the threat of future inflation.

RESOURCES

large

so

the

winning
have

the

if

have

worth

The method of

tionary

Statement, June 30, 1950

doubt

would

dertaken.

Burden

Rhode Island Hospital Trust Company

I

level,

is

the full

pay

higher during World War II, but

substan¬

a

with

should

seems

at

of

Taxes in

risks, and to manage might have
been so impaired as to seriously

sary

price

to

war

fraction

that incentives to produce, to take

government

once

when

them declines.

stances.

been long

price

major

a^

cost would have had to be

fection.

there might be a failure of

usually

forestalling
rises have as

distribution

The

has

danger that eventually

production.

of

tion.

—fortunately, in other countries it

be

that

being enlarged

total

distributed

wage demands and larger incomes

is

and

time

from being cruelly and

likely become a price spiral, since
higher prices would lead to higher

It

in

their

fairly

other

pro¬

goods

same

are

methods

burden

gram

fail.

be

of

one

interfered with

thgt'must'be kept ready

hand

increases

the

ture.

of

the

at

incomes

money

by

Still, the method has worked
in the past, apd is one of the kit

creates

defense

production of .civilian
services

The three

course,

methods

the

be withdrawn from the

manpower

tially

inflation.

pre¬

That burden rises from the
requirement that resources and

Allocations and rationing way also
be
used
in appropriate. circum¬

price

to

gram.

would

be

devised

the
of

the

functioning of the economic struc¬

at

of

burden

the kind of price rise that would

evitably

in¬

be

can

none

the

tegrated

would

down

inflationary price rises from
occurring. It should be stressed

being spent.
Controls on
credit help to achieve this result.

result

cut

ability to spend.
It may require all three of these
general methods applied in every

from

the

steps,

thus

also

their

deeply shaken by the shock of a
declining value of money. There

tive

they

revenue,

and

are

prices prevent those incomes from

ceiving salaries and wages that
move slowly would be particularly
hurt.

of

the

in

sellers.

and other millions re¬

insurance,

only

that

three general ways of

are

function

institutions which have relatively

amount

interfere
Taxes

a

tion is reflected in

sence

suificient

businesses

be

must

preventing inflationary price rises.
The first is to
prevent incomes
from rising.
This is the principal

available for spending.

lowered.

are

The third method of

in

large

very

the total national effort.

withdraw funds from persons and

change the distribution of wealth
Civilian demand on the other and incomes. They would impair
hand may be expected to increase.. the relative and absolute economic
Each dollar of- increased produce positions
of' those . persons and
dollar of in¬

to

-

vent

ing and after World

-

a

spending

barriers

the

before. And
willingness for

grimmer picture of hard realities.

price increases dur¬

the

of

heels

defense

income

when

a

preventing
inflationary price rises is by in¬
creasing taxes. Higher taxes not

Any large or continuing rise of business, agriculture, and labor to
see
the
rosy
outlook of
rising
prices would be a major blow,
especially coming so soon on the money incomes fade out into the

increase, and is likely to show de¬

creased

flation

expenditures

there

Further Inflation

of

Dangers

War II. In¬
flationary price rises would in¬
crease
the
money
cost of the

creases.

absorbs

threat of future in¬

a

why they happened

has al¬

total increases in
production,
the
civilian supply
cannot be expected to show much
despite

in the

al

ing presents

Congress, and by the public that
inflationary price rises
shall
not
happen- again;
There
must be better understanding of

extensive

commodi¬
aluminum, ready started.

quirements of defense production
exceed

branch of the Government,

Program

evidence that this process

steel, rubber, and so on. Civilian
supply in general also may have'
to be reduced if the

executive

the

rises through prevention of spend¬

when

that

we

will

see

be

that result.
Revenue

the taxes and

required

As I

Bill

of

to

rates

achieve

recall, when the
1943

was

under

Number 4948

Volume 172

.

.

.

single im¬ industries, which, in turn, would
business¬ produce a lack of balance among
men, farmers, or workers was in wages and tend to lead to general
favor of higher taxes, despite the wage increases throughout indus¬
It is accordingly desirable
fact that in the fiscal year that try.
had just ended, budget receipts that price increases on commodi¬
consideration,

not

a

portant organization of

than

less

were

expendi¬

of

30%

I fear that when the Amer¬

tures.

ties in short supply go not to pri¬
vate

persons

business

or

to

but

government.
Heavy excise taxes
sufficiently high so that resulting
price rises would absorb excess
tial groups which will
discover demand are a possible method of
that
there
are
other,
"better"' achieving this result. Such taxes
were
proposed in 1941 and 1942,
ways of financing the defense ef¬

ican public sees what

is involved

in paying for

the defense program
through taxes, there are influen¬

and minor

fort, i.e., borrowing.
Even
noninflationary

borrow¬

the total
economic
burden;
it
postpones
only the allocation of the financial
burden.
Postponement of the fi¬
ing

does

postpone

not

nancial burden

future

higher taxes or in¬
extract
the
price

either

flation

will

which

avoided during the de¬

was

fense

Borrowing is ap¬
propriate in a short and intense
period of all-out effort. But for
the long pull at a level consider¬
ably less than that of all-out war,
there seems little sense in trying
period.

burden
Psychologic¬
ally there is some value in the
mirage of postponement;
when
taxes pass some very high point,
it may be necessary to resort to
to

postpone the financial

to still

longer

a

this

mirage.

use

it unless

run.

But
it

should

we

becomes

not

would

in

period

of

be

The

special

taxes

someone

will

else

But

bear

the pub¬

we,

whole, will either bear the
the

bear

or

better

inflation.

the

bite

to

It

bullet

while the threat is upon

is

now,

The
long pull, whether it lasts five
years or a generation, is not the
kind of .time to be piling up even
a
noninflationary type of debt.
simply

some

pay

two

or

us.

not mean
time within a

does

Pay-as-you-go

three.

or

literally collecting the

It

means

not
later than the time it is spent. In¬
money

deed, since inflationary pressures

ahead of increased
expenditures, the use of taxes to
fight inflation calls for the largest
practicable tax increase at the
earliest possible moment, even if
collections
exceed
expenditures.
running

The

which

law

tax

passed

was

signed last week is

lent start.

excess

special

is to

purpose

pur¬

Its

usefulness in

and shar¬

ing in the sacrifices and

There

sider

is

time

no

the

pros

here

and

to

cons

various kinds of taxes.

of

con¬

the

Two forms

taxation, however, deserve spe¬
attention
because
they do

cial

withdraw

than

more

purchasing
from the private sector of

power

tions and

are

we

restric¬

with

the logic

of

In

a

democracy, the people

We

want

to efficient and

tion.
the

low-cost

Willingness to give
efforts, to work over¬
avoid work stoppages—
important

an

bearing

production and productive effi¬

on

ciency.

The

become

bol

the

munity

profits tax has

excess

widely recognized

a

of

sym¬

sincerity of the

effort

to

prevent

com¬

few

a

and businesses from prof¬

persons

iting unduly out of the

certain
be

cause raw

were

commodities

unusually
materials

or

which

be¬
plant facil¬
scarce

diverted to the defense

of

ment

high level of
of willingness

a

morale and

part

of

work

millions

the

on

to

persons

sacrifice

and

of

an

requires the
excess profits tax.

can

be

no

passage

There

designing of
tax is an

but

of

doubt

fair

a

Fifth

OFFICE

AVE.

Ave.

44th

at

140

Madison

if

design is not a
complete
success,
the
economic
benefits to be expected from such
a tax
outweigh the drawbacks in

Rockefeller Plaza at 50th St.

a

war

or

defense

a

Condensed Statement of

Cash

If taxation is to be successful

anti-inflationary

effects

of

result

in

tax

increases

must

compensatory

U. S. Government

589,402,961.78
993,379,420.24

Obligations

Loans and Bills Purchased

.

.

.

.

Stock of Federal Reserve Bank

.

.

.

Credits Granted

.

$103,051,470.12
9,000,000.00
19,806,636.41
11,984,803.23

.

Other Securities and

.

.

Obligations
Acceptances

on

Accrued Interest and Accounts
Receivable

7,921,412.96

....

Real Estate Bonds and
Items in Transit with

Mortgages.

17,377,908.03
612,660.16

.

Foreign Branches

169,754,890.91
Bank Premises

»■•■.

.

Other Real Estate

s»

,

.

.

.

5,046,451.52

.

16,777.40

•

.

$2,749,679,129.00

Total Resources

LIABILITIES

Capital
Surplus Fund

not

Other¬

wise the tax would fail to achieve

its

anti-inflationary goal since it
would not reduce spending. This
principle has various applications:
for example, in measuring wages
contracts

Total

than

.

.

.

.

....

.

Capital Funds
.

.

.

.

.

.

.

.

$100,000,000.00
200,000,000.00

.

."ft

/ T

.

75,111,115.77

? T

.

.

.

.

.

.

.
.

.

./

,

375,111,115.77
2,312,110,133.81
225,000.00

$ 17,781,541.85

.

7

^

$

.

.

.........

.

.

Investment

4,063,537.29
$ 13,718,004.56

Dividend

Payable October 16, 1950
Payable, Reserve for
Expenses, Taxes, etc.

."

3,000,000.00

Accounts

45,514,874.86
62,232,879.42

*"

—

Total Liabilities

which

living, if this principle is
plied, the gross wage would
rather

.

Deposits.
:
Foreign Funds Borrowed
.
.
Acceptances
v
.
...
.
Less: Own Acceptances Held for

base wage
increases in the cost

on

.

.

Undivided Profits.

ap¬

*3

r-i

$2,749,679,129.00
Statement are pledged to qualify for
required by law. and for other purposes.

Securities carried at $120,082,242.15 in the above

be

fiduciary

powers, to secure

public

moneys as

take-home

the

after deducting income tax

Similarly tax increases

which enter into the cost of

would

be

excluded

dex of cost of

living

when

J.

living

the

LUTHER

KLEITZ

L.

President

computed

was

WILLIAM

CLEVELAND

Chairman of the Board

in¬

DIRECTORS

for the purpose

of applying wage
The principle also

agreements.

applies in the calculation of

Chairman of the Board,
Duke Power Company

ALLEN

G.

GEORGE

par¬

enter

into

plications

the

Under the

President, American
Cyanamid Company

BELL

B.

WILLIAM

computations

of

by farmers. The im¬
the principle are

of

the

ex¬

profits tax. Measurements of
excess profits would be
based on

cess

profits

before

taxes

rather

than

on

as

W.

tax increases

The

are

concerned.

problem of what

to

J. LUTHER CLEVELAND

program is
ant

course,

It

largely

alternatives.

will

one

PALEN

are,

of

CORNELIUS F. KELLEY

CHARLES

COOPER

P.

W. KELLOGG

Chairman of the Board,

The M. W. Kellogg

L.

CHARLES

S. MUNSON

C.

Chairman of the Board,

Air Reduction

Presbyterian Hospital in the City of New York
WINTHROP

M.

STUART

CRANE, JR.
President,
Crane & Co., Inc., Dalton, Mass.

GEORGE

E.

President,

CARROL

M.

CROCKER

M.

The Columbia Gas

JOHN

W.

System, Inc.

of Davis Polk Ward well

DAVIS

Sunderland fit Kiendl
CHARLES

E.

DUNLAP

GANO

President, Berwind-

President, The J. G.

DUNN

White Engineering
WALTER

S.

FRANKLIN
The

ROOSEVELT
SHANKS

STETSON

President,
Company of America
Chairman, Executive

Chairman of the Board,
International Business Machines Corporation

CHARLES

J.

E.

WATSON

WILSON

President, General
Electric

Corporation

President,
Pennsylvania Railroad Company

Retired
of Roosevelt fit Son

Committee, Illinois Central Railroad Company
THOMAS

White Coal Mining Company

not altogether alternatives.

W.

Company, Inc.

POTTER

The Prudential Insurance

EUGENE

Company
President

KLEITZ

WILLIAM

President, The

Chairman of the Board,

Anaconda Copper Mining Company
MORRIS

Chairman of the Board

CONWAY

of unpleas¬

They

GAWTRY

JOHN A. HARTFORD
Chairman of the Board,
The Great Atlantic 8t Pacific Tea Company

WILLIAM

W.

do in

the face of the prospective defense

LEWIS

Chairman, Executive

CHARSKE

Committee, Union Pacific Railroad Company

profits after taxes, at least so

far

F.

enlarge




992,078,627.15

.

whom

undoubtedly be necessary
price in¬
profits to use in some degree all or nearly
all the methods available to fight
without
justificatiop, and these
profits would perform no useful inflation. It is important to un¬
economic function.
Indeed, they derstand that the higher taxes are
would be an invitation to demands raised the less necessary it is to
for wage increases in particular resort to the other, less desirable,

such

.

Public Securities

increases
on

the tax is intended to fall.

used

Hand, in Federal Reserve Bank, and Due from

.

as

the

measure,

in the incomes of those

under

on

Banks and Bankers.

.

Dangers of Tax Shifting

an

Condition, September 30, 1950

RESOURCES

emergency

clear also with respect to

But

BRUSSELS

PARIS

LONDON

period.

duced

would

60th St.

the

prices paid

supply.

at

ROCKEFELLER CENTER OFFICE

extremely difficult task,

even

production of civilian goods con¬
taining these materials were re¬

creases

AVE. OFFICE

Ave.

profits

ity prices for farmers.

and

will

minimum.

MADISON

Broadway

St.

principle, tax increases would not

would, of course, equalize demand

economy

a

the

that

excess

rubber, aluminum, and copper, for
example, are in this group. If the

practically
zero,
the
problem could be met as it was
in World War II by means of ra¬
tioning and by allowing shelves to
become bare.
But with relatively
large amounts still being pro¬
duced, there will be shortages, but
not sufficiently severe
shortages
to permit the problem to be hand¬
led in these ways. Price increases

defense

duced to

a

public

effort. Commodities made of steel,

to

in

living

of

even

it di¬

rectly falls, recognize that achieve¬

increases.

would

a

levels

accustomed

al¬

assume

MAIN OFFICE
FIFTH

common

emergency.
I believe that
most businessmen, on whom

wage

main

gov¬

way,

produc¬

question.

eral

completely solved through taxa¬
tion or otherwise, there would re¬

that

to

protected

But there is another side to

bilization, that of especially scarce
goods. Even if the problem of gen¬
were

it

exists, the problem of achieving
economic stability and growth in

be

Guaranty Trust Company of New York

theory might conclude that
is no place in the tax sys¬
tem
at any
time for an excess
profits tax. Very high marginal
tax rates undoubtedly impair in¬
centives, especially the incentive

increases

pressures

damaging in¬

flation.

ern.

ficing as much—these are marks
of maturity. If maturity generally

must

econ¬

of

inflationary

avoid

to

no

sory

there

can

ities

if

is

that they
against sacri¬

going

are

omic

the economy.

Special excise taxes
play a part in meeting a par¬
ticular problem of economic sta¬

a

deprivations and burdens

tions of the emergency. An econ¬
omist reasoning from the assump¬

fight¬

this law must be
followed up with other tax in¬
creases as soon as Congress is in a
position to consider them.
inflation,

have, and

there

public in more than its
practices.
If
important
of the American public

buying
segments

great deal of willingness to accept
onerous

then

controls. A calm view of the
situation, a better understanding
of
the
economics
involved,
a
readiness to accept sacrifices even
though someone else on the eco¬
nomic landscape may not be sacri¬

strained

It will take all of the un¬
derstanding that we have, all of
gram.

we

declines,

remedy except to impose compul¬

sufficiently high to maintain their

strains of the coming defense pro¬

self-restraint

tion

a

fice, if they insist that their in¬
comes after taxes must
be kept

economy

the

have

we

responsible public. A responsible
public at this time is a self-restrained public.
It is a self-re¬

royal road for bringing the
safely
through
the

no

unless

work

not

gen¬

secure

excel¬

an

will

they

profits tax.

eral public cooperation

If taxation is to achieve

its maximum

ing

with

tax

is the

poses

have

that

There

the

by

41

period when total civilian produc¬

headaches.
people

means many

government

rearm¬

Excess Profits Tax

Another

to

live forever hopeful

But

ament.

these

as a

are

a

ceed their economic limits.

is

though it

to the point where taxes ex¬

up

them

than

time,

the .taxes later.

of

useful

methods of preventing inflation—

best

we

year

then made

war

less

one's

somehow

and

all-out

made of them.

relatively

impera¬

until later
and

was

use

Putting off the financial load
eases the present pain,

tive.

lic

The

that in the

means

(1325)

The Commercial and Financial Chronicle

ROBERT

Member Federal Deposit Insurance

W. WOODRUFF

Company

Chairman, Executive

Committee, The Coca-Cola Company

Corporation

be

re¬

The Commercial and Financial Chronicle

42

.

Thursday, Octobei 5, 1950

.

.

(1326)

will

Continued

from

5

page

The State oi Trade and Industry
source

same

of

11

casualties

period

Monday of this week, free from
controls,
moved
5%
higher in
terms of the United States dollar.
on

Over the past

were

below the compar¬

While

number of casualties

the

the aggregate
current liabilities involved dipped

al^s

rise

much

as

P"^.?M^l'^evised). units ah# J60,731'
^&^^year ago.f '

$6 to

as

stabilization^

f

...

...

will

board

authority states.
Another
compelling

trade

factor

to

dication of a coming letdown in
the record production pace, Ward's

steel firms earnings up is s*1"dian Government announced that to $18,448,000, reflecting a con¬ that
only from them can the inTotal output for the current
it was removing controls from its siderable decline in large casual¬
dustry get the major part of funds week was made up of
152,083
dollar to allow it to find its own ties
l?oth
from
the
preceding needed to expand by almost 10 cars and 24,286 trucks built in the
level in the money markets of the montlVand the comparable month
million tons by the end of 1952.
United States and a total of 6,744
keep

,

world.

1949.

of

or

daily

a

of

average

com¬

othe? 8i
^i.^/tJI'totaled

Even the wage

ton.

increased in August,

week-end the Cana¬

bushels,

27,700,000 bushels, the latter

recognize labor and"
The six millionth vehicle of the.
dollar able 1949 total they exceeded any material increases as demanding
ar
H'.j '' l
^Lls cojn"
other August since 1941.
a
compensating price rise, this P|eted on Friday last, with no in-

a

Canadian

the

years

in

time

first

comparable

rpnnrik0t ^her^are^ ^lumhum

a

the

the

Steel firms already have ab- Aut0 Output Exceeds Six Million paring with 25,000,000 the previ¬
ous
week, and 34,300,000 in the
sorbed heavy cost increases which
Units for 1950
same
week last
year.
Domestic
Combined motor vehicle pro- and export demand for cash wheat
pnSnPr 1p-iH vinc soriD oie iron' duction in the United States and remained slow. Rapid progress
was reported in the harvesting of
Daoer
and
ems Canada the past week,
paper,
alloys
and
otner
items tQ «Ward,s Aut0motive according
Reports,"
Spring wheat, while seeding of
which make up toe
- 185,529 units, compared tyinter wheat was said to be mov¬
labor wins a husky increase
foe previous week's; total of
ing along favorably.
last one was in 1948) steel

reporting on
an unprecedented
$66,000,000 in¬
crease in July.
Instalment credit business failures points out that
increased $411,000,000 in August, such casualties increased 13% in
compared with July's $500,000,000 August to 787, but did not return
to the high level of the first five
record.
might
#
#
*
months
of
this year.
Although
The

For

4.2% below
period of 1948.

steel or

raising

without

go

prices.

Flour
prices
were
steady to
slightly lower in moderately ac¬
tive trading.
A somewhat better
volume developed in Spring wheat
flours

as a

ings of

result of

some

cheaper offer¬

mills.

Export

buy¬

ing of flour remained dull. ManU-r
facturer

demand

for

was

cocoa

slow.

A downward trend in prices
reflected the re-entry of British
West

to

Africa

as

seller

a

of

cocoa

this market and favorable

war

and 2,416 trucks built in news from Korea which resulted
all defense orders.
in considerable liquidation at the
Canada.
failures took place during August orities will not tell clearly which
Monday last, it brought 95 cents
For the United States, output close. Coffee prices in both spot,
in United States currency, against in manufacturing,
retailing, and order comes first. Appointment of was 176,369 units, and in the like and futures markets turned easier
91 cents on Friday of the previous construction.
a steel
division head in the NPA week of last year 144,285 units,
as
demand slackened and offer¬
week. Varied repercussions on the
will help some. But this is a far
ings from Brazil increased. Roast¬
gusjness Failures Drop for Fifth
Canadian economy are looked for Steel Output to Top All-Time
ed
coffee
cry from the modified controlled
prices were stronger,
Consecutive Week Below 1949
At

as

the

the

toward

close

dollar

Canadian

parity

business

of

High Weekly Record

moves

United

the

with

Priorities

the steel
.'1 *

*

materials plan which

This week it looked certain that

States dollar.
*

being given
But these pri-

now

are

Mild increases in the number of

on

industry faced a wage in¬
a price increase.
Even

and

crease

when

business in¬

new

if

corporations in the United States
during August reached a total of
7,303, only slightly above the 7,191
(revised) for July, according to
the latest tabulation by Dun •&
Bradstreet, Inc. Last month's ag¬
gregate of 7,303 compared with
6,828 in August a year ago, or an

it

finally

finding board in steel Phil Mur¬
ray
will press for a substantial
raise in steel wages, according to
"The Iron Age," national metalworking weekly. He is expected

'

s

that

Privately say
percentage for de-

MAIN OFFICE:

26 Broad Street

New York

Brooklyn 2, N. Y.

■

-

,

4, N. Y.

' 'i'

*

*

*

,

$

Hand and Due from Federal

Reserve Bank and Other Banks

*

___$ 66,777,975.69

State and Municipal Bonds

17,475,115.80

_

*5,080,574.38

_

„

J
4*

,

K*

••

____

,1^650,000.00.

—

~
^

Other Resources

1,000.00

583,683.46

r_

'_

$242,539,105.57

LIABILITIES

Capital—

$

8,200,000.00

6,000,000.00

Undivided Profits

1,986,944.51

Contingencies

950,492.13

Taxes, Expenses, etc

730,499.13

J

,

143,564.53

—

to

resulted

ago

from

a

steel

_

appreciable

first

before

the

throes

,

_

„

_

the

carried

deposits

at

Government

$29,135,261.09

and

for

other

and

State

and

pledged

are

purposes,

as

Municipal bonds
to

secure

required

public

by

law.

by

the

electric

I

of

two-week

a

strike

coal

an

week

for the

1,054,454

ended

kwh.

sale

level

prices at the whole-

'
.

„

_

_

apparel

the

weather

trend Qf food

in

sponding period two years ago.

^

tLn^two

ended

the Association of American Railan

Member

Federal

Deposit

Insurance




The

increase of 3,989

Corporation

total

the

for

the

greatest for

cars, or

latest
any

week

,

^

c

.

1Q

„

-+Vl

Per,od ended Sept" 19' and wlth
245.14 a year ago.
Grain

weekly Board

prices

Association notes.

after

The week's total represented an
increase of 208,728 cars, or 31.6%
the corresponding week in

1949, but

a

as

cold
the

of

slacks and footwear.
Housewives purchased about the

of

Trade

fluctuating

finished

with

within

narrow

'

™
Trading was up slightly over a

decrease of 38,396 cars, week

same

in

amount of food

the

week

last week

before;

volume for the nation
above the level of

a

dollar
was

frozen fruit
was a

was

as

sales

slightly

year ago.

Chicago fairly high interest in fresh

the

on

period since November, 1948, the moderate net losses for the week

above

parts

price index, compiled by Dun & apparel,
haberdashery
was
in
Bradstreet, Inc., moved in a nar- prominent demand; also sold in
increased quantities were sports

years on Friday of the preceding
Sept. 23, 1950, week, closing at 290.08 on Sept. 26.
totaled 870,196 cars, according to
This compared with 289.88 in the

roads,

week,

.

Greatest §mce November 1948
week

past
many

country helped to stimulate inter¬

Wholesale Commodity Price Index est in suits and coats. While the
^ JVIayes Downward After Regj dollar volume of dresses was not
lsterpig New_Two-Year High appreciably modified, requests for
Oct. 1, 1949,
formal models were slightly more
Level-.
in excess of
The daUy. .Wh9l®sa^ eommodity numerous than formerly. In male

the output reported for the corre-

was

New York Clearing House Association and Federal Reserve
System

<

consumer

lignjt $6.67

0.5% above the preceding week.
One of the Oldest Trust Companies in the United States

1951.

Volume Off Slightly as Buyr

Trade

Loadings of revenue freight for

States

with

_

impending steel strike.
It was 45,978,000 kwh. higher
than the figure reported for the
previous week, 981,770,000 kwfc^,
or
17.8% above the total output

the
United

active

and

the second quarter of

drop

of

start

firm

sales declined in some
the week before. It comwith $5.67 on the corre- areas. The aggregate dollar voL
ume
continued to be moderately
ended Sept. 30 was estimated at sponding date a year ago, or a
above the level for the compar¬
6,503,008,000 kwh., a new historic rise of 16.6%.
able
week
a
year
ago,
Dun &
caltoigh record for the industry,
The index represents the sum
according to the Edisori Electric total of foe price per pound of 31 Bradstreet, Inc., reports in its cur¬
rent summary of trade.
Institute. In the comparable week
foods in general use and its chief
a year ago the country was in the
Shoppers bought slightly more
function is to show the general

distributed

$242,539,105.57

_____

the

In
since

*

^

.

Carloadings for Latest Week
Total

continued

substantial bookings reported into

Food Price Index Registers
The low output
Sharpest Drop in 3 Months

and-"power industry for the week pared

and

224,527,605.27

—

Other Liabilities

compared

151,000 tons.

year

and

Surplus

which have retarded harvesting in
areas
of the
belt.
Cotton

some

ing Declines in Some Areas
Korean War, the wholesale food
Electric Output Reaches New AllRetail buying dipped slightly in
prjce index, compiled by Dun &
Time High Point
the period ended on Wednesday of
Bradstreet, Inc., fell 6 cents last
The amount of electrical energy week to $6.61 on Sept. 26, from last week, as the high level of

1,000.00

Other Real Estate

Atlantic,

the Middle

based on the smaller capacity
prevailing, it stood at 8.2%

.

*

•

and

industry,

strike.

36,847,422,53

Bonds and Mortgages

is last year in

then

a

Loans and Bills Purchased

rate

J;ons of Pacific and Mountain States, but
casting^ for the sharp declines took place in all

and

114,122,333!7rff *

_

Spot
with

week slightly

1,951,900

to

ingots

ago,

Government Securities———

Deposits

A

spindles during August were op¬
1,- other regions. New England cas- erated at the record high rate of
942,200 tons a week ago. A month uaities dropped to one-half their 140% of capacity, based on a fiveago, based
on new capacity, the 1949 total and East North Central day, 80-hour week. This compared
with 111% in July, and 103% in
rate
was
98% and production and West South Central to oneAugust a year ago. Cotton textiles
amounted to 1,890,100 tons; a year third,
steel

^

RESOURCES

Reserves for

below 1949 when 181

of

rate

operating

week's

equivalent
entire

Reserve for

COnsecutive week, casualties were

only group to exceed a year ago. shown in other commodities.
Steel While
retail
casualties
dipped market
activity
increased

and

this

announced

?

September 30, 19S0

.

Iron

operating

the

This
f.

*

Condensed Statement of Condition,

Total-

selling forced
Output of lard

prices lower.

continued to expand,

from
1949, other
lines sales in the ten spot markets re¬
steel showed a more marked decline, v ported at |326,900 bales for the
companies
having
94%
of
the
East North Central States cas- week, compared with 253,100 the
week before, and 381,4UU in the
steel-making capacity for the en- uaities
dropped to 11, their lowest
tire industry will be
101.2% of number since 1948; the Middle At-' corresponding week a year ago.
Domestic mill buying showed im¬
capacity for the week beginning i^ntic, New
England and West
Oct. 2, 1950, compared to 100.7% South
Central: States also show provement and there was a strong
demand
from
a week ago, or a rise of 0.5 point,
foreign
sources.
declines.
In
the
Pacific
States
Production of raw steel is set
failures rose to 48 from 32.
In Farmers were offering quite free¬
the current week to exceed the
ly for this time of year but the
0foer areas,
casualties increased
movement into trade channels was
high record attained in the preby one or remained unchanged,
vious week.
slowed by rains and wet weather
More failures were reported than
that

NEW YORK OFFICE:

Montague Street

Buildings

Commission house
lard

and his steel cut off.

American

Institute

'

Bank

may

,

COMPANY

Other Securities

For the fifth

Inc.

Bradstreet,

^

however, with many roasters an¬
nouncing an upward adjustment
of 3 cents a pound.

Manufacturing failures dropped

BROOKLYN TRUST

U. S.

defense

indirect

and

fense

The

on

,

.

f. Pe°P*e
flat-rolled

flat-footed

Cash

.

.

deZhn?dl° ,148 in, ^he. w<*k

ended bept. 28 from 155 in the
preceding week, according to Dun

Aee"

Iron

.

.

aided by in¬
creasing market receipts of hogs.
occurred, but
The latter also trended lower as
reach 40 to 45% of the total by
foey remained above
the
1948
next May or Junedid fresh pork prices.
total of 112. Concerns failing were
Cattle receipts in Chicago were
'.?m, Washington belittling the
jegs nurnerdus than the 264
to turn down a 5c or 6c offer effect of defense on steel produc- 0£ the
the largest of the year with prices
prewar 1939 week.
can
be accented, this trade paper
,
.
.
holding fairly steady throughout
which has been set as the maxi¬
asserts, with several pinches of ,
the week.
r1'
mum which some large steel firms
nnlitipnl
t
to 26, the lowest level this year,
p
Domestic cotton prices trendecl
while
retailing
and
commercial
Steel companies are not fooling
servjce ajso declined.
Casualties generally upward last week, al¬
about stamping out the gray maramong wholesalers and construc- though
some
irreguljai:ityf .devel¬
ket.
One Pittsburgh steel
con- tjon contractors rose in the week, oped at the close due to. the fav¬
sumer
has already been caught Construction
failures
were
the orable war news and the easiness

increase of 7.0%.

*177

.

Commercial and industrial fail-

present one falls on its
face from confusion, declares "The

another fact¬

means

will emerge

the

.

The number of

cars

The
and

maintained. There

moderate dip in some types

of canned food.

The

over-all

dollar

volume

of

,

ago,

totaling

house-furnishings decreased

166,030,000 slightly

the

past

week;

it

very
was

olume 172

Number 4948

The Commercial and Financial Chronicle

...

oderately above the level for the
imiiar 1949 period, however.

Department

eagerly sought

sales

on

a

dex

for the

by shoppers.

week ended

Sept. 23,

1950, rose
10%
from
the like
period of last year. An increase
'or lamps, tableware, and diningof 17% was recorded for the pre¬
There

was

decline in

a

call

the

furniture in scattered locali¬

•oom

ses.

There

vious

week

from

that

of

a

year

a slight
seasonal ago.
For the "four weeks ended
buying of children's Sept.
23, 1950, sales showed a rise
loys and indoor games.
*.
of
10% from the corresponding
Total retail dollar volume in the period a year ago and for the
year

ise

in

ended

week

ast

5

rom

f

was

the

period

a

9%

above

from

to

the

to

of

of

be

last

year's

volume

level

registered

advance

an

5%.

week

trade

in

reflected

York

New

little

from recently

by restrictions.

last
ef¬

adverse

England and Pacific Coast wise, the increase

+ 5 to +9; East +6 to +10; South

was

over a year ago

west

+3

+2

+7

to

to

+6;

Mid¬

Southwest

and

little

.of

volume

during the past week.
lar volume

rose

the

of

level

in

week
of

centers

the

various

dipped

week ago,

Total dol-

weekly

period

from

For

Sept. 23,

a

the

in

than

the

similar

Long Beach station has settled

23,

would

cost

million,

$5

some

accrued in the 1950 calendar year

(to be expended

longer period.
a

about $9

over

volume
the

like

week

weeks

the

for

showed

year

Gas &
—and

period of last

Construction
company

is

expects

costing

to spend

serves

about $39 million

area

an

about

of

18,000

oil production and refining,' the

movies," steel, furni¬

In addition the tourist and resort business is important.
in

1949

were

divided

as

residential 32%, rural

follows:

In

is

pany

the

and

year

directing its exploration
in the Goldfields and

program

1951

Fond-du-,Lac

Saskatchewan,
for

uranium,

areas

of

northern

Canada, primarily
and if justified by

the results of such exploration, in¬
tends to develop those properties

future.

indicating

President
the
year

New

Mullendore, who recently made an address before
York Society of Security Analysts, estimates calendar

earnings for 1950 at about $3 after adjustment to

42%

a

Sept.

on

tax

and

basis and after deduction of the

$2 million charge for "subsidence"
(without current benefit of tax savings).

economic

The corporation

I

20,

possibilities.

was

organized

in

Delaware

1949

presently has issued and out¬

standing 2,416,666 shares of
stock.

mon

MANUFACTURERS
TRUST

COMPANY

of Condition

as at

close of business September 30, 1950

$

U. S. Government Securities

.

.

U. S. Government Insured F.H.A.
State and

.

.

.

Mortgages

619,939,730.28

864,942,693.71

.

.

.

64,477,359.87

.

Municipal Bonds

44,971,121.05

Stock of Federal Reserve Bank

Other Securities

3,150,000.00
21,256,503.17

.

Loans, Bills Purchased and Bankers' Acceptances

662,977,763.90

Mortgages

13,177,033.13

Banking Houses

10,907,217.39
'

Other Heal Estate
Customers'

Equities.

262,630.16

.

Liability for Acceptances

8,213,366.90

....

Accrued Interest and Other Resources

.

.

5,769,125.21

.

.

9%, commercial 21%, industrial 22%, and wholesale and miscel¬
laneous

;

16%.

"In 1949 the

$2,320,044,594.77

;y-V

.

LI A 111 LIT I IiS

produced about 30% of its power require¬

company

ments from

25%

hydro plants and 43% from steam; it also purchased
hydro power from the Hoover Dam (with which it has a

long-standing contract) and 2% was purchased elsewhere. Steam
power is now more important to the company than previously—in
1945 it supplied only 10% of the total power, compared with 43%
last year.

The

company's capital structure

follows

was as

as

of Aug. 31:

Millions

Mortgage

bonds

Preferred

stocks

—

"Common

stock

(ccnv. into

and

43%

$203
90

________

Preference stocks

Percent.

19

52

*27

Cap'lal

$45,000,000.00

Surplus

60,000,000.00

Undivided Profits

.

\

.

.

.

Reserves for Taxes, Unearned

Dividend

7

.

.

Discount, Interest, etc.

Endorser

as

Cash held

.

.

15,224,912.79

...

.

.

1,350,000.00
9,191,379.24

2,871,225.19

Acceptances and Foreign Bills

on

Collateral

as

stock)

Deposits

or

in Escrow

•

»

...

.

141,452,371.76

.

.

.

Payable October 16, 1950.

Outstanding Acceptances
Liability

$

36,452,371.76

.

.

14,044,545.10

11

126

common

surplus

•

»

..

...

2,135,910,160.69

...

$2,320,044,594.77
100%

$471
^Elimination

The

of intangibles

United States Government and other securities carried at $97,625,369.06 are

would reduce the common stock equity to 25%.

public funds and trust deposits and for other

as

required

pledged

to secure

permitted by law.

or

..

Dividends

Earned

1950

(12 months ended Aug. 31)

EDGAR

*$2.00

$2.92

S.

_

OSWALD L.

___

1948

1.75

3.19
2.03

____i

_

1946

____•

...

LOU

V

R.

1.68

1.50

1.44

1.50

1942

1.59

1.75

1941

2.38

1.75

1940

2.27

1.90

_

1943

.____

KENNETH

Corporation

A.

C.

^Current

annual

principal

years was

DANA

year

the amount charged

was

was

000, equivalent after potential tax savings to about $1.83

VAN

BOMEL

President, Emigrant Industrial

President, National Dairy

Savings Bank

Products

JOHN P. MAGUIRE

GUY

President, John P. Maguire & Co.,Inc.
C. R.

Corporation

W. VAUGHAN

Director, Western Electric Co., Inc.

PALMER

HENRY

C. VON

EJLM

President

Director, Cluett Peabody & Co., Inc.

GERI.I

President, Gerli & Co., Inc.

GEORGE J. PATTERSON

ALBERT N.

WILLIAMS

President, Scranton & Lehigh

President, Westinglwuse

Coal Co.

GRETSCH

Chairman, Lincoln Savings Bank

Air Brake

company's tax books and this fact
a

Head Office: 55 Broad Street, New York

may serve

Company

a

HANKING

OFFICES

IN

GHEATEH

City

NEW

YOIIK

European Representative Office: 1, Cornhill, London, E. C. 3

$11,230,-

Far Eastern Representative

share).
Member Federal

Reserve

System

Office: Naka 7 Building, 3-chome, Marunouchi, Tokyo

Member New York Clearing House Association

Member Federul Deposit Insurance Corporation

the company in good

heavy charge might greatly reduce




»0

finally

have not yet been completely written off on the

when

Chairman
Finance Committee
L. A.

FLANIGAN

for the depressed share earnings of recent

completed in 1948 (in that

stead next year,

SMITH

STAUFFEN

rate.

reason

the change-over in cycle frequency which

These heavy costs

ERNEST

MacLELLAN

of America

FRANKLIN

FREDERICK

F.

President, United Biscuit Company

President, UnitedStulesIAnesCompany
PAOLIN'O

City

V.

President, Home Insurance Co.

JOHN T. MADDEN

Chairman, Board of Directors
JOHN M.

HAROLD

KILPATRICK

C.

.

Chairman, Dana Corporation
HORACE

1914

>•'

CRANDALL

CHARLES

1.50

New York

Executive Vice-President

President, George A. Fuller Company

1.50

1.94
1.72

——

Products

1.50

HARRY

\

Chairman, American Home

1.50

2.05

HAROLD C. RICHARD

JOHNSTON

Simpson Thacher & Bartlett

Lines

i

BRUSH

Vice President

Director, Lambert Company

BLOOM

Chairman, Atlantic, Gulf and

ALVIN C.

.WILLIAM G. RABE

JOHN L. JOHNSTON

BEINECKE

J.

Wast Indies Steamship

1949

1945

EDWIN

Chairman, ThcSpcrry& IlutchinsonCo.

Paid

Per Share

Calendar Years:

1947

IftlltECTOIIS

Poor's) has been somewhat irregular in recent years:

Year:

The

purposes

company's earnings and dividend record (as reported by

Standard &

excess

which

100,000 kw. units (there is no definite time schedule for
construction). No financing appears necessary over the near-term

power

ture, airplane manufacturing, oil tool equipment'and automobile
Revenues

on

it*: sou it ces

territory includes the main farming and citrus fruit region, and a
large amount of electricity is sold for irrigation pumping, refrig¬
eration plants, packing houses and canneries.
Other important

assembly.

lands

company's

there have been indications of the

Cash and Due from Banks

(served jointly

are

this

about $50 million next year.

Condensed Statement

wholesale to other utilities—Pacific
Electric, San Diego Gas & Electric, California Electric Power
a number of municipalities. Some of the largest cities served

industries

explore, prospect and develop

the

still

they will add 84,000 kw. in new steam capacity. They have also
acquired a site for another steam plant near the Kaiser Steel Com¬
pany adjacent to San Bernardino, which eventually will have

year.

Long Beach, Santa Monica, Alhambra, and San Bernardino
with California Electric Power). The company's

are

are

existence of pitchblends. The com¬

to

miles in 10 counties of central and southern California
(excluding Los Angeles), with a population of about 3,000,000.
also sells

they

so

"ahead of the game."

change

square

The company

to

The company has grossed $16 million and netted

million from the oil fields, it is reported,

share.

The net proceeds are to be used

may

of

Southern California Ed'scn Company
Edison

American-Canadian Uranium Co.,
Ltd. at $3.50 per

be spread over a
The present $2 million charge+3 equal to about

share.

Securities

ended

no

Shr.

Co., Inc., New York, on Oct. 3,
publicly offered 500,000 shares of
common stock
(par 10 cents) of

of which $2 million is being
while the remaining $3 million

the next two years)

International

regis¬

was

Utility Securities

California

First

(one 22 feet in diameter) used for water cooling and dis¬
charge must be moved in order to ease the underground pressure.
This

a

feet in the last 12 years as a probable result of the re¬

10

By OWEN ELY

Southern

Offered at $3.50

"subsided"

or

43

Am.rCan. Uranium Stk.

increase of 6%

an

and

date

1949

period.

Public

Sept.

similar

four

1950,

noted

was

from

higher

Re¬

In the preced¬

year.

the

from

1949.

slightly

was

to

rise of 9%

a

tered

wholesale

slightly

attendance

ing week

number

are

' ++>',

has to contend with another special cost

now

The important

'v."

duits

department

index,

1950, advanced 13% from the like

corresponding

While

at

buyers

ordering the

moderately above period of last

the

1949.

Federal

the

to

Board's

change in. the store sales in New York City for

..wholesale

about

company

the unamortized balance

on

three

serve

was

previous

the

under

According

+ 7 to +11.
There

slightly

However, figures
V

moval of oil and gas, the station being almost at the center of the
oil field. The management has finally decided that the large con¬

character¬

week.

Northwest

item.

imposed credit

Activity

ized retail buying, but percentage¬

and

The

47 cents

Retail

he following percentages:
New

date

Regional estimates fect

year ago.

aried

estimated

was

to

Wednesday

on

profits taxes.
not available.

-

Both large and small appliances
were

store

countrywide basis, as taken from
the .Federal Reserve Board's in-i

(1327)

-

SAVE

FOR

YOUR

INDEPENDENCE —BUY

U.

S.

SAVINGS

BONDS

com¬

44

The Commercial and Financial Chronicle

(1328)

out the debt, it must

Inflation Control
F. Raymond Peterson says taxes must be
conducted

far

as

if additional

funds

increased and

are

on

war

In

the

on

eve

Anniversary
American
New

Convention

Bankers

by A. L. M. Wiggins, one-of
speakers at the convention.
(Full text of Mr. Wiggins' speech

the

of

Association in

starts

F.

Since it stands to reason that the

retiring

mounting

President
of the

the

of

the

tant

Pat-

he

needed,

are

to

institu¬

other

and

investors and, most impor¬

all, from individuals who

of

hold

to

much

as

debt

ment

that should be
to

addition

in

should be encouraged to

N.
J.,
outlined steps
taken

funds

If

revenues

tional

erson,

.

expenses,

corporations,

and
Com¬

of

by reduction
Mr. Peterson

added, the government raise such
funds*'from
nonbank
investors,

National

pany

other

tax

First

Bank

counterbalanced

asserted.

Board

Trust

expenditures should

in

and

Chairman
of

war

be

organi-

zation

page.—Editor.)

nonmilitary
ex¬
penditures should be reduced,

d Peter¬

son,

cover

on

it

as

buy and

the

of

is

govern¬

possible

spread out among them.

con¬

F. Raymond Peterson

to

This is

sound

According to Mr. Peterson,
should pay for the

war

on

a

we

pay-

financing, he declared, be¬

cause

trol inflation.

it educates millions of citi¬

in

zens

what

is

debt

sound

financial

that

same

is

possible.

prompt

Taxes
he

and

be

must

lauded

enactment of the

the

interim

tax bill.

"one

such

means

levy

a

of

business

would

in

the

market

and

force

which

called

attention

to

rates,

ex¬

Mr.

question

Peterson

of

interest

said, that the

procedure for preventing

inflation

is to raise interest rates.

has

ment

He

to

finance

war

be discussed in .deT

credit

Mr.

erate

taken

soldiers

organized

of

ments

farther.

govern¬

possible,

as

so

it is

a

diffi¬

He

contended

that

if

ernment is to succeed in

the

gov¬

spreading

in time of

anties
the

and

government guar¬
lending are cut back,

on

volume

such

of

step

a

their

and

use of

also

credit.

applies

July

17,"

tion

Mr.

"On

said,

Peterson

asking
them
to
appraise the credit needs of every
of their customers to be

that

sure

they are taking care of all
needs for production credit
the other hand, to make

real

and,

on

sure

that bank credit is not used

to

mal

stimulate

inflationary

an

asking
more

ket

dertook

credit

a

of

program

control in
The

1948

un¬

voluntary
with

great

were

banks

by the

con¬

President

self-discipline.

of

it

and

They can

again."

credit,
argued by the retiring ABA

was

consumer

within

the

operating
prescribed

are

terms

it

a

"We have

pledged

our

Reserve

week

ago.

the

lenders

in

its

regulation.

the Federal Re¬

that

Board

serve

the

in

Board

this

re-

to

cooperation

We have assured

educate

was

will

we

public

regard

again
other

and

the regula¬

to

tions."

378,773,422.70
432,702,297.87
158,653,758.53
5,204,702.94
535,862,281.11

State, Municipal and Public Securities
Other Bonds and Investments
Loans and Discounts

.

Banking Houses—

418,292.35

Other Real Estate
on

2,229,031.84
14,468,264.96

Acceptances

Accrued Interest and Accounts

Receivable

.

'

Other Assets—

4,056,343.82
1,471,026.20

$1,533,839,422.32

Peterson

continued, "that this con¬
instalment credit regulation

sumer

be

can

double-edged sword.

a

is introduced
measure

does

tend
of

Undivided Profits

Reserve

to

forContingencies

4,606,401.39
4,478,742.29
1,125,000.00

Acceptances Outstanding $21,839,932.55
(Less
,

v

own

held in portfolio)

17,631,029.52

12,094,632.82
l

,377,983:666.76

$1,533,839,422.32

poorer

man

more

with

for

a

can

still buy, while the man

without

one-third

that

time

from

it

not

With a
Regulation
W
World

In

effective.

that

goods

were

be

buying.

war,

was

will

cash

are

not made.

The

sold

There

on

were

automobiles^ refrigerators, and

no
so

much

down-pay¬

ineffective.

be

II

to buy."

on

Regarding
black

4,208,903.03

the

The

man.

price

controls,

Mr.

they usually lead to

markets.

If

purchasing

could be siphoned off by
taxation, thrift and sustained sav¬
ing to the extent that the pres¬
power

prices would be relieved
prices would not rise, the
problem would be solved.
The

sure

on

and

Securities carried

563,256,496.27 m the foregoing
statement are deposited to secure
public funds
and for other purposes required by law.
at

question of wage controls, he ad¬
ded, is related to the question
about

off
we

Charter Member New York Clearing House Association




tighter,

get

cases

Member Federal Reserve
System
Member Federal Deposit Insurance
Corporation

be

soon

and

labor

to rise. Buyers

a

But sellers have

little

a

are

orders, and

big backlog of
no immedi¬

worried.

under

are

to make sales.

pressure

price controls.

purchasing
do

and

not

then

tionary

power

siphon

destroy

effect

of

Siphoning-

the General

Textiles
inflation

will

benefit

income

of

Economy
the

from

and

demand

during the present defense period,
as they
did during the last
But it will be

war.

that

action

by

permitting upward spiral of sal¬
aries

and

wages.

to me that the
to ask wage

It would

country has

a

seem

right

and salary earners at

B(|

j

show very little change.
But

production

fabrics

has

of

ij |

yarns

continued

an

risi §

to

There is not much doubt that

tiles at the moment

they

have

|
consumed]

rising again

are

doubt that many

no

will

more

being

are

experience

andjii

yell

of

anxiou

some

between

moments

tex]

being pre 5,
rapid*

are

somewhat

Inventories

and

now

nex ;

spring.

time yet

some

■V

frankly, H
tha^ the position of til A
will be ratner uncom |
that

During

before growing scarcities of auto¬

am

mobiles and appliances will cause

converter

the average family to spend more
of its income for textiles and ap¬

period,

fortable.

parel.
During the last
consumers'

production
goods was

war,

durable

completely for sev¬
Income, however, kept
going up. And so did the sales

eral years.
on

of

afraid

Your

customers

sensationally

textiles,

items

that

apparel

and

still

were

other

available.

Supplies of textiles and apparel,
in unit volume, were also limited

military demands; and there
price controls. But produc¬
moved

up
to higher price
lines, and dollar sales reached ab¬

tail

expands,

economy

isn't

there

But

war.

a

happen right

even

it

if

won't

It won't hap¬
and it probably

away.

this year,
happen in the first half of

pen

there

it

By midyear, however,
likely that the time will

year.

seems

when

near

textiles

will

be

helped by reduced output of other
items.

in

other
So

most

I emphasized

defense

of

mament

was

sharply

and

rear¬

the

six

next

I believe this to be true.
must

we

propriations

remember

for

that

ap¬

go

up

defense

rapidly than actual spending
for defense; that production lags
behind orders, and that orders lag
behind appropriations.
Under present

fense

total

is taking

output.
next

late

10

or

an

more

year,

de¬

than 5%

barring

before this

of

is

another

raised to

15 %. But the percentage

earlier

that

before

yet

It will probably be

higher in

run

schedules, it will

months

some

we

being

particularly f

good business.

Moreover,

they

quoting prices

are

on

will
industries at

some

date.

may

And

I

suspect

sight of

be in

Your

therefore,

customers,

industries

in the first half of

tomers.

They will continue to filL

orders out of present fabric stocks
as

long

have

buy

have

prices.

they

then

as

to

can.

more

to

And

raise

probably

will

happens,
some"

meet

resistance from retailers.

Meanwhile, you,
to buy from
in

a

10

the

a

being,
position.

The

mills,

the strongest*
that is, for;

market

time

weak

converters,?

as

have

in

a

somewhat J

generally,

some

1951.

At

of

money

be

spent

that
in

some

would

durable

fourth quarter, and to a; moderate
into the first quarter of

next year. There is no chance of
price reductions at the mill level,

which

would

help

trades with their
in

the next two

the. garment
pricing problems

Textile Supplies Big

and

the mills' know
how important it is for the con¬

Furthermore,

verter to

"keep his positions." Al¬

them

or

announced

are

leave them.

items

is

hardly

you
a

take

You may feel

can't sell those

reasonable

in the next few months.

profit

But you

have the practical problem of as¬

most

important consideration.

As

the

I

implied

present

above, I believe
defense period as a
a profitable one for

whole will be

sensational.

should

retail volume

at

by' the
can

verters will decide that this is the

then,

how¬
the retail sales outlook for
apparel

>ihonths.

three

or

suring yourselves a supply of fab¬
rics, and I believe that most con¬

goods markets.

now

a

extent

strongly that

will begin to get

in

are

strong position.
? .;
They are well sold through the

allotments

There

|

When they^
fabrics, they^
their selling;

this

when

that point or a little later, textiles

textile

are,:

slower to buy than their cus-1

even

and apparel

ever,

J

cold now
|
sell them the same fabrics, if you
J
are to make any profit at all.
• |
you

mill, and the converter

goods

Between

re4*
And

price is lower than *

average

price at which

durable

otherwise

to

the average price I

lotments

overflow

cusii

your

have paid for fabrics.

that
the

.

of

many

tailers based

irh.f

not,

are

having

cases,

mosj £

carefuj ji
iii'd

customers

to 20% curtailment in some of the

time

fevj j£

on

very

departments.

element

more

be

havij}
a

due to be stepped up

during

months.
But

production

and

run,

are

your

will
A few minutes ago

the fact that the present schedule

a

was

hardlines,

won't
next

for

Except

items, there was no run of panij U
on textiles.
And reailerd |
having extended their commit} fments (heavily
on
items when j$

tomers

fense

-

buying

income.

Something like this will happen
again if there is a war. It may
happen sooner or later as the de¬

departments

slow.

hac

not

business. Re |
of the import

many

apparel

been

have

good

sales in

tant

normally high levels in relation lo

implies that

anti-infla¬

trend.

rising

a

gains
will
probably
modest,
at
least through nej |
Spring. And if allowance is mad J
for the general increase in textile
apparel prices, unit volume wi.f

duced

just

it off by taxes

the

shows

come

than

Textiles in

incident,

Peterson said

acceptances

Qther Liabilities—
Deposits

deprive

it

cash

durable

Reserves for Taxes, Expenses, etc
Dividend Payable October 1, 1950

anti-inflation

ment

could

115,919,949.54

an

rights enjoyed by the

prosperous

War

15,919,949.54 $

as

It

to protect all of us, but

prevented

$25,000,000.00
75,000,000.00

should realize," Mr.

we

large-scale

LIABILITIES

i

...

heavy commitments, and in

some

be

"I think

man
'

;

Capital Stock.
Surplus

will

tion

Federal

ASSETS

ay
as

opportunity to plunge in and g
theirs, wage and price contrc.'
will become as necessary to
sag
the country economically as tu,
army is necessary to save it mill
tarily."

were

Credit

imposed

Cash and Due from Banks
U. S. Government Obligations

nor¬

money and for
The labor mar¬

more

costs will continue

by

Consumer

administration of

Credits Granted

for

manpower.

have

will

government

of

We

response.

in Regulation W when

of business September 30, 1950

a

cut off almost

well

CONDENSED STATEMENT OF CONDITION

the Korean War

these

tendency Or to finance speculative
purchases.
My letter met with a

it

Broadway, New York

At the close

they would in

as

period.

The

"I

associa¬

our

members

President that banks

Founded 1824

home

at

groups

use

4

page

business

to

letter to all

a

In the field of

TRUST COMPANY

always

are

going to

During Warm Wartime
prices

on

ate

credit, Mr. Peterson added.
wrote

be

prepared to

are

part in reducing the in¬

flationary
This

will

lending

The banks will welcome

reduced.

About

.

the

own

The Business Outlook

a

If down-payments are

increased

do

time when men
may
be required

materials

and

elsewhere.

Chemical,

165

from

Mortgage lending is still

buying homes at

do

.

There

war.

Continued

It should go

stimulated by guaranties.
It
is
inflationary to encourage
more and more people to bid com¬
petitively against each other in

tion

6c

pre¬

at home who seize upon war

many

the Congress on their demonstra¬

.

to

"Unfortunately," the ABA Pres¬
concluded, "it seems to be
chiefly the soldier that gives all

being

success.

bank

is

away

own

mod¬

only

homes 5%.

on

gratulated

■

while

the purchasing power of

serve

in this field to the
increasing down-pay¬

steps

extent

extremely

The

terms.

has

ment

made

has

as

cult conflict to resolve.
'

lending,

of

opportunity to
impro
position and lift th<
standards of living.
If

an

their

ident

particularly the

as

who go to foreign lands to fight.
The biggest favor we can do the

wholehearted

cheaply

fact

that the subject of an excess
prof¬

its tax would

the

to

But he cautioned that the govern¬

may

the

As

fields

agreed,

itselt

easy

one

classical

be

siphoning off

income

result of the war."

accrue as a

then

flow

profits

tax,
Mr.
Peterson
stated
that
should the Korean War be of long

cess

which might otherwise

power

prices upward.

With respect to an excess

duration

ing

housekeeping.
At the
time, it siphons off purchas¬

less than it asks of those

no

Thursday, October 5, 19

.

.

housing field where the govern¬

management and good government

a,'5-you-go basis, to the extent that

increased,

certain

in

Peterson

ment

Government

Hay-

dollar.
Credit Controls

the

to

home

dollar.

There should be credit controls

tail

issued

York

City,
mo n

the

of the Diamond

statement

a

it

that

public

the

pay-as-you-go

nonbank investors.

press

first convince

is exercising
economy and taking all of the
anti-inflationary steps it can to
preserve the purchasing power of

basis. Says,
needed, bonds should be taken by

possible

as

the

.

be

some

in most of

gain
the

in

tex¬

tile-apparel departments, since in¬

the

textile-apparel

that

will

be

true

trades.

rather

for

But
the

later part of this period than it is

>lume 172

Number 4948

.

.

The Commercial and Financial Chronicle

.

(1329)
And for the converter. I

)w.

am

Continued

from

mkly
afraid
that
it
will
be
dher tough going in the next

[w months,
II

would

like

fe

converters making the
lowing
during
the
next
ionths will be those who

are

[ert to these changes.
'For example, the high price of
tool

is

obviously
the

going

demand

iportunities

there

other

of

spun

There

for

con-

prof-

business

the

such

as

fabrics.

fess

Even

in

departments

such

as

|ress fabrics, however, there will
great variations in results.

At

itail, higher price lines had

be-

|un

before

even

Korea

to

make

somewhat better showing.

This

[as continued since, and I think
is not much doubt that trend

lere

all be extended further.

Now,

I

recognize

is

lere

not

the

fact

that

the higher priced
[•ess lines.
But in other departlents, too, there is more activity

In

Ihat

in

lines

some

than

others,

and

is what you must try to rec¬

ognize

and turn to

tage.

The Outlook for Interest Rates

advan¬

your

been

costs

as

result

a

inflation

rising prices and

The
has

be

to

Sucii

raised

war

the

recognize fully

[he inflexibilities of
iroduction?

-

yarn

What

and

[or high-tenacity

of

ichinery become

a

of

and mill
will

of other
demand

increases?

yarn

types

some

effects

on the supply
and fabrics as the

what

back

the

calendar

wipe out

1945

to

and

large part of the un¬
expansion of instalment
a

inflation

World

of

been

excess

War

absorbed

by

II

the

supply

of money

and

of the dollar.

flationary practices now will hit
many businesses hard and create

tion

war

from

levels.

To

finance

economy with

these

infla¬

high levels could

will

fabrics

limiting fac¬

What influence

the

will

va¬

riation

unforseen

To restrict these in¬

maladjustments.

With¬

be disastrous to the American dol¬

out firm and careful control of the

lar

money

well

as

as

whole economic

our

system of private enterprise. The
Federal Reserve Board is entirely

will

right

markets, these restrictions

money

in

its

Committee

the

to

memo

Joint

Economic

on

Report

when it advises the curtailment of
civilian spending, drastic restric¬
on

credit

and commercial

consumer

and

national

the

financing

defense

of

program

basis.

pay-as-you-go

the

on

Taxes

■

a

will

help to curb inflation.
But the
largest beneficiaries of the defense
program are the workers who pay

inflation

A

large

from

measure

the

defense

spending cannot be restrained
less the taxes

un¬

all classes and

cover

broad excise tax

a

sales

or

tax.

If the government must bor¬
to

the

finance

the

gram,
from

the

the

defense

borrowing
investors

banks.

This

pro¬

should

and

a

would

be

forced

be

from

not

method

of

bor¬

rowing perhaps will require
sort of

tax

our

baum

has

been

floor

Proskauer

active

as

some

saving system.

possible

finance

to

It
the

government's needs by high taxes,
covering all earnings and expendi¬

may

money rates to rise and

cause

black markets in

create

have

market.

I

think

practical

some

we

the
may

lessons

in

values, business interrela¬

money

tions and the psychology of people.
The
Federal
Reserve
Board's
idea

of

control

money

market policy and

this

at

time

summarized

Szymczak,

seems

to

Mr.

M.

by

me

S.

forts should be made to sell

non-

The New York Stock Exchange

marketable bonds and tax savings
notes

to

individuals,

non-bank

and

businesses

financial

tions, thus absorbing
would

has announced the

institu¬

that

money

otherwise be spent on cur¬

rent consumption or on new pri¬
vate investment. Such a program
would not only absorb redundent

immediate

inflationary situation
is to adopt a coordinated program
of monetary

policy, fiscal and debt
management policies, and a sys¬

tem

of selective priorities and

locations

of

strategic

The cornerstone of
tion

our

al¬

materials.

ernment

Transfer of the Exchange mem¬

bership

board

must be bold fiscal
including
across-the-

increases

in

personal

and

non-bank

borrowers,

possible that money will
scarce

if

be considered

tend

rise

to

Tom

It

on

seems

make

to

become

Manager

tive excise

taxes,^nd taxes on

profits and speculation.

115 Broadway, New

Stock

turned

Exchange,

to his desk after

for support.

lemand,

possibly

and

some

scar¬

cities, for individual fabrics.
Your job, I feel strongly, is to

;

seek all

these

possible advantages from

shifts

in

demand,

to

have

constantly before you questions of
the type I have raised here, and
to search constantly
ind unbiased

in

which

ties

The

Quebec, Canada.
the fish

Reports

uncertain¬

real, accuracy of the in¬
formation
you
have about the
are

complex facets of your own
dustry will have great vaiue.

in¬

expensive

taxation

is

war

Financing

do

well

policies

the

government's

most

obligation is to keep

follow

to

of

Byron R. Forster, of Shields &

the

carefully the
Treasury as they

Co., New York City, died at the
age of

60, following

a

heart attack.

lar and increase the

important

buying

cause

sharp increase in
causing a flight

a

rates

by

The Federal Reserve Board

pointed

out

the

to

an

arsenal for

unless

cor¬

maintain

the

strength.

cannot

haVe

tion at home
enemy as

Without

the other.

can

be

Both

deadly

as

The

success

for

memo

to

rectly opposite U.&.Trcaiury.

Economic

inquiries cordially invited.

should

How

ago.

time

to

nomic

NATIONAL

BANK

of WASHINGTON, D. C.
FOUNDED

1836

the




is

been

or

and

favor
we
we

gency.

its

BERNARD S.

years

after

non-essential
It

certainly
in

the

(including Shares
of Morgan Grenfell 4' Co. Limited and
Morgan 4' Cie. Incorporated)

CARTER

President

Morgan & Cie.
Incorporated

them

17,458,958.88

Loans and Bills Purchased

CHARLES S. CUES TON
JOHN L. COLLYER

213,927,039.73

Accrued Interest, Accounts Receivable, etc..

2,240,725.35

Banking House

-

Chairman and President
The B. F. Goodrich

H. P.

;

Company

3,000,000.00

..

Liability of Customers

on

Letters

of Credit and Acceptances

DA VISON

12,182,088.27

..."..

1

$671,822,030.20

'•

Vice-President

CHARLES D.DICICEY

.

LIABILITIES

*V. D. JAY

■

.

much

so

debt

now

me

should
the last

without

postwar

and

to

seems

in

this

.

.

Chairman Morgan & Cie.

Deposits: U. S. Government

Incorporated

All Other

DEFEREUX C. JOSEPHS
President New York Life
Insurance Company

Accounts

THOMAS S.

LAMONT

Vice-President

....

..

L. F. McCOLLUM

Company
G US TA V ME T Z.MAN

.

..

|

$ 43,727,749.51
541,345,018.84

Official Checks Outstanding

,

8,232,385.05

$593,305,153.40

Payable, Reserve for Taxes, etc....

,

4,466,175.86

Acceptances Outstanding and Letters of
Credit Issued

12,297,481.81

Ca pital

20,000,000.00

"...

Surplus
Undivided

30,000,000.00
Profits

'

Railroad Company

,

,

'

11,753,219.13

$671,822,030.20

JUNIUS S; MORGAN

Vice-President
ALFRED P. SLOAN, JR.

eco¬

limit

period.

must work with conditions
find

1,500,000.00

of the Federal Reserve Bank

short

monetary and

credit?

59,060,398.16

Municipal Bonds and Notes......

President Nero York Central
on

but

sound

can we return in a

conditions

of

in

applied

policy advocated

war

as

JNSl'RANCE CORP.

Report

have been applied during

But

MEMBER

ffpEfUL RESERVE SYSTEM • FEDERAL DEPOSIT

abuse

outlined

the Joint Committee

sound

inflation,

RIGGS

as

have

197,154,588.36

.

Other Bonds and Securities

both

on

require sacrifices of

Board

di.

Stock

Investment Corporation

policy of the Federal Re¬

serve

century

C.CAJ30T

President State Street

President Continental Oil

experience, facilities. Locate J
a

State and
PAUL

an

all of us."
re»ource*.

$165f297,631.45

from Banks

United, Stales Government Securities

our

one,
Infla¬

the armed enemy abroad.

We have to assure

fronts.

Hand and Due

Vice-President

it is to provide for

as

military
we

tlian

I. C. R. AT KIN

on

do¬

our

mestic economy. It is as impera¬
tive
to
maintain
our
economic

more

Cash

the United Na¬

we

strength and integrity of

strength

ASSETS

Executive Vice-President

Joint

cannot successfully discharge its
great responsibility of world lead¬
ership, it cannot fulfill its function
as

Condensed, Statement of Condition September 30,1950

HENRYC. ALEXANDER

from the dollar.

tions

YORK

Vice-President

the government policies.
More inflation through bank credit

could

1

President

on

money

j;

GEOR GE IFHI TXE Y

The outlook for money rates de¬

pends

NEW

AR TIIURM. ANDERSON

power

Committee that "the United States

in

INCORPORATED

Chairman

of that dollar.

rectly

FOREMOST

J. P. MORGAN & CO.

sound dol¬

a

emer¬

We cannot undo the mis¬

that

Byron Forster

unfold.

C. LEFFINGWELL

inflation.

everyone

Next to the national defense itself

for intelligent
In a period

outside

hits

are

plentiful.

were

Chairman Executive Committee

most

which

answers.

the

appeal to the working classes

re¬

fishing"

rates and debt

•

must

But even during this
period, there will be active

has
a

trip to the Laurentian Mountains,

gency and those of you who have
be guided by money rates will

•

It.

good politics for those who

slow

the

Goott-

management policy for the emer¬

DIRECTORS

slow

converters.

of

for

City, members of the New

York

But

too

Desk

at

to

corporate income tax rates, selec¬

We

recognize that the present but this will require
management,
period may continue for a tax policies, and savings-invest¬
time, and that there are difficult ment policies which would not

W.

Oct. 11.

Department

body & Co.,
York

that the Treasury

me

money

Larkin,

Trading

much, a
little inflation of the supply could
be applied and the rates eased.
will

George

Tom Larkin Back

is

it

and interest rates rise.

rates

late

deflation

a

policy. After
far too much
inflation, deflation
usually brings lower interest rates.

from

the

of

Carpenter to Joseph Mindell will

financing through banks,
highly inflationary."

is

This is

anti-infla¬

program

measures

of the late Hurlbert C.¬
Elmore to Harry D. Diamond wiH
be considered Oct. 11.

member of the Board,
But in this case, if the govern¬
in an address Aug. 29, when he
ment's large needs are financed by
said:
"It is my belief
that the
taxes and the absorption of funds
proper method of dealing with our
a

Transfer of the Exchange mem¬

bership

funds but would also make it pos¬
sible to reduce the volume of gov¬
which

following firm,

changes:

tures and by forced savings with¬
out resort to more bank credit in¬

make

in¬

Messrs.

Russhon

in
profit
margins, and
changing labor cost factors, have flation and at the same time re¬
)n the
supply of different fabrics? strain interest rates from rising,

iperating problems, especially for

an

broker.

&

healthy
were
m
flatier*.
financing, the easy credit policy
"In addition to higher taxes, the partnership under the firm name
of Proskauer & Russhon.
financing housing, and the arti¬ government should
make
every
ficially
controlled
money
rates
attempt in its debt management
which have contributed so largely
policies to tap as large a volume
N. Y. Stock Exchange
to
the
present high prices and of available
private investment
shrinkage of the purchasing power funds as
Weekly Firm Changes
possible. Concerted ef¬

credit has kept money rates at ab¬
another

present,

changes must be designed pri¬
dividual
marily to meet the danger of in-

in

row

[here be
'arns

pent-up

resulting from the

not

include

have

inswered.
Do you

the

present high prices and costs, and

[he types of fabrics in use?

you

juestions

of

financing.

of

tor?

steady decline in the

of money,

fully recognized trie
fhift of demand to casual garlents, and what this implies for

^or

of

one

value

the lowest taxes.

Have

& Russhon Is Formed
Francis F. Rosenbaum, Richman

as

of the

terest

business for tions

enough

[11 converters

Rosenbaum, Proskauer

wealthy individuals and busi¬
ness enterprises if it is to be useful

normally low

departmens,

budget

of

are

the

more

jrter, which shoud be
ible than much

help

to

for

mixtures.

lyons ' and

military

limited to the taxation

an
effective
anti-inflationary
measure.
It must restrict spend¬ Proskauer, and George Russhon,
all
members of the New York
country, World War takes of the past or the recent ing, and most
spending is done by
II
was
Stock Exchange, formed the
unnecessarily expensive, postwar period which make the the vast number of
part¬
individuals
and a much larger percent of the present task of
nership of Rosenbaum, Proskauer
monetary manage¬ and families with low and
middle
costs should have been paid by ment and defense financing dou¬
& Russhon,
best
160 Broadway, New
bracket incomes. In an emergency
The
York City, on Oct. 1. Mr. Rosen¬
postwar
few taxes.
period has bly difficult. If we could only set situation like the

[scussion by pointing out the
[eat importance at the moment
[ demand trends. I daresay that

tcrease

be

this

conclude

to

expanded

cannot

through the Spring

or

iriod.

the

4

page

45

Chairman General Motors

Corporation

United States Government securities carried at $62,464,731.81 in the above
statement

are pledged to
qualify for fiduciary pozvers, to secure
public monies as required by law, and for other purposes.

JAMES L. THOMSON

Chairman Finance
Committee Hartford Fire
Insurance

Company

.JOHN S. ZINSSER

Chairman Sharp & Dolime Inc.

Member Federal Reserve System
Member Federal Deposit Insurance Corporation

46

The Commercial and Financial Chronicle

(1330)

Continued

from

thereby been able to retrieve 66% of
living costs.
Britain, between 1938 and the present, while the
cost of living has risen by 92% and the wage-earner has gained
in real income, consols stand unchanged, while stocks have risen

Observations..

Great

Since 1945 and the subsequent advent of the Labor
plus a devaluation, the equity shareholder has suf¬
fered a 10% shrinkage in his capital, while his cost of living has
risen by 25%.
Following is the comparative performance of inflation in the
economy and the concurrent course of fixed interest and equity
prices, in various countries from 1938-1950:
32%.

by

than

operating in tangible goods.
Not only the holder
of bonds, on whom inflations have wrought havoc in the form of
both capital shrinkage and loss of purchasing power,
but the
shareholder as well has found the difficulties insuperable.
In

Government

the overall

picture, stocks have given much better protection than
bonds or cash, but have lagged far behind the concurrent rises in
commodity prices, or the degrees of currency depreciation. Thus,
in France, at the time of the currency stabilization of 192-3, stock
prices had risen to only 250% of their 1913 prewar level against
800% for wholesale prices; in Germany, from 1913 to 1923 stock
prices offset only one-fifth of the commodity price rise.
In other
words, in France the stockholder's position deteriorated by about

Monetary Expansion, Cost of Living, and Security Price Changes

of Cost-of-

Money
Supply,

Italy
it

in

France

wide

the

tion

by

European

rounding World
government

—a

17-fold
him

a

similar

increase

War

equities

France

in

90%.

common

+

160

+22

+

450

—

5

+

45

+

200

+

92

—

4

+

32

35

+

200

+

67

—23

+

12

18

poorly than the

more

+

225

+

68

+

4

+

21

+

73

+

2

+

50

market

land

occurring in the face of

place.

the

the

The Public National Bank

have

stationary commodity price level.
stock

been

in the past

12-month stock rise, stock prices
considerably less than the cost of living, 50% versus

Similar divergence occurred during shorter periods. Between
1937 and 1942 an appreciable expansion in the
money supply was

of NEW YORK

accompanied by a 50% decline in share prices.

Post-OPA, when

inflation

really took hold in the economy, stock prices broke
sharply and remained depressed. Between June, 1946 and 1948,
wholesale prices rose 40% and the cost of living 30%, but the

Main Office, 37 Broad Street

stock

fell by 10%

averages

No

STATEMENT

net.

the behavior of neither the

has

kind

September 30,1950

Rather has

further

Cash and Due from Banks

109,251,250.22
.

.

.

•

,

Other Securities

F. H. A. Insured

.

•

the

1949

same

Germany,

France and
British situation,

the

dollar

devaluation.

At

short-

most

depreciation,

is

of

(In

cushion the

potential effects of adverse business and political forces, it must
be

clearly evident that today's investor in

ing

premium

no

whatever

Ilence,

irrespective of its

ponent

may

for

anti-inflation

their

pay¬

protection.

shortcomings, that

demonstrated

be considered

stocks is

common

com¬

added gift whose "price is right."

an
*

*

*

LIABILITIES
'Hence, the answer to the question posed in the head of this

Capital

article—namely, whether the investor should buy stocks as a
hedge against inflation—is that he should indeed put part of his

«$10,587,500.00

♦

Surplus

13,412,500.00

funds

Dividend

Payable October 2,1950

$32,324,087.52

Acceptances.
Less: Own in Portfolio

3,603,002.93

.

>

.

.

weapon

a

combat

to

1,183,197.52

471,514,164.09

$513,358,224.83
Government Securities carried

at $15,783,987.51
public and trust deposits, and for other
as required or permitted by law.

secure

purposes

MEMBER: N. Y. CLEARING HOUSE ASSOCIATION

FEDERAL DEPOSIT INSURANCE CORPORATION

25 Offices Located

Throughout Greater New York

Among

them

are

218

women.

Long in Service

members of the Loan De¬

Freismuth

Max

partment,

beeij

of

firm

the

Sfelj

•

y.

Consumers Power Stk,

Offered at $28
The

Oct.

Consumers

offered

4

stockholders

$28

Co.

0+

shares

its

to

0!

commor

for

subscription al;
share at the rate of one',

per

share

510,470

stock

common

Share

a

Power

for

each

stockholders

shares

10

of

held

by

,

Oct. > 3:

record

1950.

;

Warrants are being mailed to
stockholders, and carry the privi-:'
lege of over-subscription at the
same price
per share, subject to
The

warrants

to

are

the New York Stock;

on

Exchange. They expire at 3 p.mi
(EST) Oct. 19. The shares issued
in

this

next

offering

will

receive

the.

quarterly dividend of 50c;
share, payable Nov. 20 to

per

stockholders

of

Oct.

record

27;

,

Morgan Stanley & Co. is acting

Dealer-Manager,
purchase rights and

and

may

offer

stock

as

dealers during the subscription

to

period
not

and

dealers
for

pay

75c

over

receive

will

shares

commission of
Soliciting

a

share.

a

taken

40c

a

share

under rights

up

through

or

where

no

the

wtill be hosts and speakers at the

ice of

1,250

of

of

the

the

1,469

staff

of

Chase National Bank with

25

more

women

of service attended

years

dinner

in

their

honor

Oct.

4,

dinner, which will be followed by
a program of entertainment.
this

Attending
dinner

for

the

members

reached

their

versary

in

1,469,

time

the

25th

1950.

which

sixth

first
of

annual
will

staff

service

be

who

anni¬

Of the total of

represents

almost

20% of the staff, 1,388 are in New
York

and

81

are

over

in

overseas

the

Three

women.

bank's

brothers

-

subscription

stockholder

the

indicated

the subscrip¬

It is provided, however, that
soliciting dealer will be paid

$400 with respect
single warrant holder.
over

will

Proceeds

acquisition

of

be

used

any

the I

for
the current construc¬
tion program which includes the
addition
of 350,000
kilowatts in
new steam generating capacity, of
which 180,000 kilowatts are now
in
operation, and an additional
170,000 kilowatts will be installed

carrying

in two

property

to
for

on

units at the

Whiting Plant
used

bank

and

on

to

Justin R.

Proceeds will also

off temporary
the
principal
$7,500,000 incurred for
pay

loans

of

new

Lake Erie, near

in

such purposes.

:

and

Peter

Winthrop
W.
Aldrich, Chairman, and Percy J.
Ebbott, President of the bank,

or

a

he has

year

with

-

amount

1950 in the grand ballroom of the

the

than

and

173
FEDERAL RESERVE SYSTEM

j

past

Monroe, Mich.
branches.

Waldorf-Astoria.

More
men

612,840.99

Deposits




as

S.
Roggeman, "Assistant
Cashier, have the longest service
records at 49 years and 48 years,
respectively. Berhardina Jehli of
the
Addressograph
Department,
in her 41st year in the bank, has
the longest service record among

5,749,144.32

$4,786,200.45

Other Liabilities

pledged to

but not primarily

Two

Staff

1,672,290.39

Reserved for Interest,Taxes, Contingencies

United States

equities,

Chase Dinner Honors

302,500.00

....

the

vage
&
Lee,
New
York
am
Washington consultants in indus j
trial public relations.
'

be

8,324,087.52

....

Unearned Discount

are

into

potential inflation.

24,000,000.00
Undivided Profits

,j

advertising and pub

tion.

low

have consistently yielded 3-4%.)

With such earnings and asset margins existing to

$513,358,224.83

po

relations.

the dealers solicited

France and England good stocks

280,301.59

Sheehan

J.

William

1946, he resigned from this

associated

sought to suit their policies to anticipation of

comprising the Dow-Jones Index are selling at the
price-earnings ratio of 7.8 and a dividend yield of 5.6%.

734,894.49

•••••

Boston.

shares

720,000.00

Other Assets

in

situation resembled

after

of the

currency,

all

2,261,249.15

.

Accrued Interest Receivable

obtained

and

Associ¬

dividend-paying listed companies, so many of which are
selling at less than their net-quick-liquidating as well as book
values, are at a level yielding over 7%.
Even the "blue chippy"

999,479.26

.

Stock of the Federal Reserve Bank

Banking Houses

praisal
of

2,387,773.59

Customers'Liability for Acceptances.

the

fear-of-the-currency as a stock market deter¬
quantitatively demonstrable by the reasonable
equities based on the ordinary standards of ap¬
existing now, even after the 50% rise.
The
shares
here

valuation

243,485,537.44

Mortgages

the non-investing public

nor

of

The absence of
minant

20,401,294.07
7,096,479.12

Loans and Discounts

fear

East¬

Gas

be traded

usually (as now) by way of
rationalizing their speculation after exciting market rises; while
the lay community has griped about the "high cost of living."

$125,739,965.90

U. S. Government Securities

investing

real

have

our

term investors have
some

Municipal Securities

by

which

dempnslrated

as

State and

degree

or

Italy.

RESOURCES

motivated

been

for

allotment.

Flight From the Currency Here

The basic conclusion is to be drawn that in the United States

CONDITION

relations
advertis¬

of

73%.

AND TRUST COMPANY

c

market expansions

stock market) wholesale prices rose by 100%
living by 71%; yet stocks, via the Dow-Jones
Average, rose only by 16%. Over the entire period

risen

1935

he became di¬

For

has been evidenced

bull

cost

which takes

date

in

lie

But since 1938 the traditional divergence has

current

Industrial
to

a

& Com¬

pany

consultant in

during both short and long periods. Over the period
(terminating before the start of the 50% advance of

constant,

and

OF

Leaving Do¬
remus

sition to open his own office as

States Experience

consistent correlation

mid-1930s concurrent credit and

the

an¬

ates,

monetary expansion and commodity price increases on
and common stock price rises on the other.
In
fact, in the late 1920s the converse occurred; the wildest bull stock

In

Jr.,

President,

In

68

no

William

Long,

Doremus

Fuel

hand,

one

1939-1948

CONDENSED

H.

ern

31

250

country

thji

Con|

the agency

Vice-Presi¬

a

dent,

ing

between

the

stocks,

of rural

owners

2

—

+

The United

this

form^
in

work

has rejoined

pany,

and

24

j 1938-'49
|1938-'50

Sheehan,

Boston office of Doremus &

1 i

280

190

took

faring considerably

31

+

In

the rentier has been ruined

of

78

610

Experience

The holder

+

+

250

+

J.

creative

of

rector of pub-

35%
56

+ 340

U.S.A.

price

over

+1665%
+1000

—40

Sweden

decline of 40% combined with a
his cost of living has in effect inflicted on

capital levy of

5%

+

Stock Rise,

United Kingdom

inadequate inflation-protec¬
existed during the period sur¬

has

In

+4800%
+1800

Prices,

India

pattern of

War II.

bond

World

Percent

Offset by

Argentina

companies, chemicals, oil producers, textiles, and
casualty and fire insurance companies, generally did comparatively
well in Germany, Italy and France.
Europe's Second

of Living,

Stock

270

hand, mining

somewhat

Prices,

+

Belgium

A

Living Rise

Cost

+5100%
+1200

—

diversity of their behavior, whose
specifications were unpredictable, that common stocks presented
their major difficulty.
The equities of public utilities, railroads,
banks, steel and automobile companies acted poorly. On the other
was

head

Proportion
Bond

45%, and in Germany by 35%.

But

of Doremus & Co
William

nounced.

1938-1950

Unpredictable Selectivity

Thursday, October 5, 19

.

.

Sheehan Vice-Pres.

the concurrent rise in his
In

intricate

has nevertheless

gold,

or

5

page

.

on

Webb Richards Joins

Denaul! Go. Staff
(Special to The Financial Chronicle)

SAN

FRANCISCO,
Richards

Webb

has

CALIF.

become

—

asso¬

staff, Elmer, Franklin ciated with Denault & Co., Russ
Merz, have total serv¬ Building. Mr. Richards was for¬
years.
merly a partner in Pearson-Rich¬

and Samuel

Of

106
the

687

retired

employees ards & Co. and prior thereto was

now

with

Chase

Leydecker & Co.

receiving pensions under the
plan, the longest service
record is held by Joseph E. Sillinow 86 years old, who was
the
staff
52
years.
Oldest
living retired employee is John A.

man,

Mason

Bros.

&

Stephenson,

F. I. du Pont Adds

on

old. The pres¬
of the 687 pen¬

Petersen, 98

years

ent

age

average

sioners is 70, with
average

period

(Special to The Financial Chronicle)

LOS

ANGELES, CALIF.

—

Charles A. Baggott has become af¬
filiated with Francis I. duPont &

26 years as the
Co., 722 South Spring Street.
of service.

*

Volume 172

Number 4948

Continued

from

page

.

.

The Commercial and Financial Chronicle

.

Continued

12

from

(1331)

11

page

tivities
lace

Mutual Funds
about "war-babies" is

News About Banks and Bankers

particularly
THE

PUBLIC

TRUST

inany of whom certainly lack the
judgment, ability and reserves for
^in-out"
operations.
"Brevits"

Total

Said:

NATIONAL

COMPANY,

Deposits

V

"A good illustration of the prob¬
lems in September, 1939, faced by

investors is given in the following
shows that while the

$

Cash

and

due

for

30%

over

United

Aircraft

to

125,739,966 119,740,706

Undivided

Loew's, Inc.

THE

profits—

TRUST

National Distillers

Oil

General

of

Eastman

25.9
+ 23.7

Calif

Motors

International

-j__-j__-jJersey__-j-j-

Harvester

Kodak

Stand. Oil. of New

Wool worth

Westinghouse
Chrysler Corp.
Texas

+
-f

Company

American

+

& Tel

Tel.

+

General Foods
Corn

+

&

12.7
10-6
8.5
8.8
45
2.1
-3
3.7

—

General Electric

National

19.4
15.1
13.2

—

Products

Procter

34.7

-j-

Johns-Manville

4.9

—

11.8

*

14.0

J.

—

28.2

—

•

curious-

"A

above

thing
is the

figures

an

investor had tried

of

cold

the
fact that if
on

the basis

which might be expected to

bene¬

conditions, he

have

would

almost

been

Surp.

South

Salle

La

Street,

the

New York

Stock

&

bills

Total

COMPANY,

33,841,319

Loans

22,220,945

U. S. Govt,

&

7,862,946

6,029,472

2,768,754

CLINTON

TRUST

COMPANY, NEW YORK

$27,322,177 $27,189,610

25,300,754

25,175,833

6,287,327

5,879,951

12,305,936

' '
13,624,992

6,866,727

5,821,158

945,365

936,203

due from

and

banks

U. S. Govt, security

.

holdings
bills

&

dis¬

counted

Surp.

undivided

&

profits
*

!(!

CITY

NATIONAL

*

BANK

OF

NEW

Sept. 30/50

5,209,097,814 4,966,232,069

resources-

S.

Lowndes
Officers

bills

and

due

banks

from

231,290,929

—

holdings

203,501,987

Loans and bills dis¬

questions

one

paper

183,973,649

150,786,256

12,238,165

11,812,564

—

Hi

for
The

HI

Hubbard

Vice-President

a

as

■

of

election

Buckner

hav¬

ville,

Ky.,

reported

was

in

Louisville "Courier-Journal" in its

that

the

nancial Editor,

Mr.

Buckner, who has been President

Sept. 16 issue, by that paper's Fi¬

note
is

here

indebted

to

of

Mayham for articles prepared for

published in

our

the

Sol. Schulman. Mr.

Public

Louisville

Continued

publication.

on

Ware-

page

1,500,435,838 1,333,230,909

—

56,079,891
;f.

BANK

Three

54,411,829

of

the

NEW

Vice-President

$

95,071,485

and

hi

TRUST

Loans

&

114,122,333
disct.

36,847,422
1,986,944

ISLAND

BANK

BANK

OF

OF

$

51,750,814
*

PROVIDENCE,

61,979,532
45,245,0.98

2,234,868

❖

ISLAND

*

Cash

and due

TRUST

R.

I.

THE

resources.

569,365,278

993,379,420 1,079,906,759

—

982,767,057

75,111,116

73,969,698

He

MANHATTAN

COMPANY,

YORK

June 30,'50
$

1,209,120,087 1,170,652,037

1,102,807,978 1,069,344,043

—

prof.

Profits
.

Certified and Cashier's Checks
Less Own

..

.

Outstanding

.

7,838,126.84
101,838,127.08

..

3,537,808.80

.

4,042,429.24

.

Acceptances in Portfolio

Reserve for

I

1,838,126.84

Deposits*

<#*■:

3,000,000.00

3,713,409.20

329,020.04

720,176.51

Contingencies, Interest, Expense, etc.

$117,647,648.43
♦Includes U. S. Government Deposits aggregating $5,179,356.30

52,921,804

57,510,736

16,738,740

13,582,282

3,715,407

3,651,314

The board

of West

Co., of Newark, N. J.,
on

27, at the
Country Club, in

the evening of

Green Brook
honor of the

three senior officers of the

bank,

Ray E. Mayham, Chairman of the
Board of Directors and President,
C.

Wallace,

Executive

Vice-President, and Morrison J.
Feldman, Vice-President, who are
completing 30 years of service

332,315,176

303,361,292

288,276,360

323,431,804

with

466,677,007

427,794,657

15,418,411

14,914,091

an

a

copy

President,
C. R. Black, Jr., Corporation

Hugh

a

resolution adopted by

the directors.

F. G. Kingsley
Chairman of the Board,

J. Chisholm

Mercantile Stores

Company, Inc.

President, Oxford Paper Co.

Clark H. Minor

J. Cuddihy

Vice-President and Treasurer,
Funk & Wagnalls Company

Honorary President,
International General Electric

Co., Inc.

Chester R. Dewey

David Dows

,

A review of the

ac-

Vice-President
General Foods

Robert E. Dwyer

Corporation

Executive Vice-President
Anaconda

Copper Mining Company

Harold J. Roic
Director

John C. Griswold

W. R. Grace

Co.

President,
Griswold and Company,

Incorporated

Cletus Keating
Keating

Frank C. Walker

D. C. Keefe

Chairman, Executive Committee,
Comcrford Theatres, Inc.

President,

Ingersoll-Rand Company
The Grace

name

has been identified with domestic and international

banking and
MEMBER

James H. Sharp
Vice-President

Kirlin, Campbell, Hickox

engraved silver bowl and

of

Company

William M. Robbins

of directors

dinner

a

President,
The Cuban-American Sugar

President

hi

Side Trust

David M. Keiser

C. R. Black, Jr.

Robert

undivided •profits

gave

DIRECTORS
Robert F. C. Benkiser

4,776,162

Guaranty fund and

bills

discounted

66,538,274^ 69,990,705

with the bank this year.
Each of
the guests of honor was presented

se¬

hldgs._

—

disct.

Sept.
992.078,627

*

.

$92,215,553

Govt, security

2,749,679,129 2,764,198,625

due

banks..

from

Dec. 31/49

$87,869,398

1,479,958

holdings

$

prof.

Deppsits

Undivided

HOSPITAL

banks

Loans & bills

bills
—

Undivided

$3,000,000.00
.

Vice-President

PROVIDENCE,

resources

se¬

hldgS—

member

285,509.30

35,113,421

2,303,154

Deposits

OF

June 30/50

589,402,962

Capital Stock
Surplus

80,876,492

disct.

June 30/50

Total

2,312,110,134 2,335,396,908

and

3,499,068.42
•

30,583,759

profits._

COMPANY,

U. S.

COMPANY

$

Loans

.

from

*

due

Govt,

.

.

180,000.00

,

.

$

151,536,770
135,396,167

29,010,603

Loans & bills

49,795,882

YORK

Sept, 30, '50

S.

.

$117,647,648.43

I.

124,731,894
due

Thomas

curity

R.

Dec. 31/49

141,800,401

banks

Undivided

*

TRUST

NEW

from

.

,

U. S. Govt, security

June 30/50

1,492,793,271 1,671,781,138

Hi

U.

NATIONAL

$

THE

YORK

1,587,141,192 1,404,655,407

„

banks—

and

5,500,358.67
200,506.00
27,157,343.68

LIABILITIES

hi

HOSPITAL

resources

RHODE

Deposits

Cash

.

Liability for Acceptances

Acceptances

1,302,922,651 1,199,628,369

resources-

OF

4

,

.

Stock of Federal Reserve Bank

1,839,584

4,864,416,007 4,697,749,012

prof.

and

2,300,000.00

43,931,183.82

.....

State, Municipal and other Public Securities

36,085,870

profits—:

Cash and

bills

discounted

$ 34,593,678.54

•<

.

Other Bonds

124,045,701

Deposits

$

Undivided

.

Loans and Discounts

62,180,383

i(i

10,558,459

*

NEW

OF

hldgs._

Govt,

...

$

se¬

and

.

Brokers, Secured

Y.

66,777,975

bills

RHODE

due

and

to

U. S. Government Securities

from
-

Undivided

10,640,671

Sept. 30/50

Total

Demand Loans

Accrued Interest and Other Assets

4,443,165,040 4,298,936,909

Govt,

BANK

Cash in Vault and with Banks

224,527,605 226,091,750

and due

Cash

Total

Hi

NEW

-

RESOURCES

of

COMPANY,
N.

of Condition, September 30,1930

242,539,105 244,069,821

Deposits

89,036,314
4,559,056

NATIONAL

banks—

Loans

Statement

Customers'

$
resources

1,010,771

profits—

and

curity

Ernest

hi

June 30/50

disct.

GUARANTY

eeclly oppoiitc U.S.Treatury.

—

Treasurer

hi

BROOKLYN,

17,285,468

89,610,125

bills

resources-

S.

HANOVER SQUARE, NEW YORK

presided.

bank, holds the club's service
record, having been with the bank
for
46
years.
Other
members
with long service records include
Carl Cordes, Assistant Vice-Pres¬
ident, 43 years, and Frank P.
Austin, 44 years.

holdings

from

*

U.

OF NEW YORK

James T. Lee,

bank,

the

YORK

99,223,220

due

CHASE

from

GRACE NATIONAL BANK

Lu-

U. S. Govt, security

TRUST

22,448,822

and

Cash

at

Irving Moritz — received
gold
membership pins and $50 Savings
Bonds.
Otto Strippel, a Trustee,

133,225,754 128,824,274

—

Undivided

facilities. Located

4

members

new

banks

$

Total

Club of
in the

Stadelmann, Arthur J. Edison and

*

FARMERS

resources

Deposits

S.

an¬

company.

Oct.

on

the

the

hi

Century

of

for

regularly

Assistant

be

to

G.

the First National Bank of Louis¬

past 13 years."
may

—

profits—

counted

Undivided

bank¬

on

255,959,310 313,510,950

—

Savings Bank

dinner

President

Total

prof.

discounted




Cash

Sept. 30/50 June 30/50

Sept, 30/50 June 30/50

curity

insurance corp.

708,682,154 692,136,835

Deposits

and

City of New York held its fourth

1,300,558,046 1,164,389,432

COMPANY,

Loans

federal'deposit

$

appoint¬

Fields

N.

hi

Quarter

Central

York,

the

3

of the

se¬

and

&

New

hldgs._ 1,711,027,802 1,860,934,857

CITY

U.

•

June 30/50

779,159,477 762,882,245

resources

hi

Dozier

BROOKLYN

banks—
Govt,

Total

hi

hi

due

Etricl

from

utoeral rescrvb system

appeared

4,823,894,308 4,593,527,436

Deposits
from

YORK

June 30/50
$

$
Total

Cash

FOUNDED 1836

4,738,283

chow's Restaurant.

*

Sept. 30/50 June 30/50

Cash

Lloyd

2,762,906

*

resources

Deposits

of WASHINGTON', D. C.

28,784,102

Oct.

on

of

annual

%

Total

BANK

PA.

$

Total

and financial publica¬

financial review of

and

holdings

RIGGS

44,002,982

27,157,344

Broadway,

ments

The

$

NATIONAL

NATIONAL BANK,

Sept. 30/50

and

business

"Chronicle"

disct.

PHILADELPHIA

,

im¬

committees,

3,247,836

*

Charles J. Stewart, President of

the

undivided

&

profits

banks

Inquiries cordially invited.

number of

a

banking

and

34,649,242

undivided

23,047,683

counted

Surp.

H.

di.

98,799,874

43,931,184

bills

THE

79,903,943

3,369,215
*

PHILADELPHIA,

has frequently complied with re¬

We

hi

security

holdings

Sept. 30/50

century

portant

ing

$

118,119,254

profits

Trust

Loans and bills dis¬

CITY

a

YORK

4,838,127

&

94,595,749

profits—
hi

a

tions, his articles for the annual

U. S. Govt, security

9,163,239

from

banks

THE

than

of

newspapers

34,593,678

nounced

8,554,050

due

*

more

Chairman

as

53,892,839
14,045,284

hi

117,647,648

banks

as

Banking Advisory Board on
appointment
by
the
Governor.
Among Mr. Mayham's many other

ing

from

due

bills disct.

Undivided

U. S. Govt, security

101,838,127

and

102,361,810 109,557,044

sey

59,029,511

NEW

&

68,794,034

security

County

also

quests to write articles

OF

Govt,

member of the State of New Jer¬

51,555,421

NATIONAL BANK

resources

100

34,203,809

and

Undivided

for

Association,

73,289,978

—

holdings
Loans

<r

from

The New York Trust Company, at

$39,714,463 $39,357,989

resources

Deposits
Cash

*

resources,

Essex

s

14,065,284

Deposits

3,512,917

*

YORK

holdings

in

the

and

Sept. 30/50 June 30/50

47,203,371

Sept. 30/50 June 30/50

Loans

FOREMOST

ciation

U. S.

$

274,236,374 262,712,761
due

and

banks

President of

as

200,662,027

h:

Cash

Clearing House Asso¬

70,001,824

disct.

U. S. Govt, security

experience,

has served

50,072,585

8,532,101

TRUST

NEW

Cash

west

7,634,645

*

SCHRODER

discounted

mem¬

61,915,375

3,518,213

Undivided

and Mid¬

"He

&

PA.

300,412,354 288,613,830

resources-

Deposits

banking activities, he has served

security

Capital and surplus

Cash

12,177,646

*

Exchanges.

of

YORK

from

holdings

Stanton is with Cruttenden & Co.,

bers

CO.,

$

$

55,399,713

(Special to The Financial Chronicle)

209

Loans

undivided

&

Loans

j,

Company,
and in its sketch of
Mayham's banking career it
states in part:

1920-1950,"

56,297,596

due

U. S. Govt,

88,947,406

profits

curity

111.—Thomas

&

$
Total

Mr.

the Newark

BANK

PHILADELPHIA,

Sept. 30/50 June 30/50

Trust

209,959,297

and

Surp.

counted

U.

CHICAGO,

Deposits
Cash

Side

NATIONAL

COMPANY,

Loans and bills dis¬

100%

With Cruttenden Co.

HARRIMAN

247,654,523 237,106,734

resources

Total

10,245,248

holdings

o&sit

wrong."

BROTHERS,

COR¬

YORK

security

logic to select the stocks

fit the most by war

BANKING

NEW

103,580,005

banks

hi

$

from

due

U. S. Govt,

152.58

about

*

Sept. 30/50 June 30/50

GRACE

75,243,056

and

Loans

Dow, Jones Ind. Av. 152.57

*

SCHRODER

Deposits
Cash

30.5

Steel

11,358,897

14,649,602

14,729,007
*

Deposits

United Aircraft

45,403,942

$

25.2

(Bethlehem

11,753,219

*

resources

—

28.2

93,882,108

Sept. 30/50 June 30/50
Total

Total

—

58,687,492

58,511,509

PORATION,

22.7

Smelting

profits—

holdings

21.7

American

180,923,758

undivided

HENRY

—

Nickel

213,927,640

*

Total

84,791,679

*

—

International

disct.

banks

profits

19.4

Chemical

West

Bankers
197,154,588 253,330,511

bills

Undivided

from

14.6

Steel

$

48,530,544

&

—

S.

&

NEW

171,175,453 183,460,534
due

holdings

—

U.

141,583,768

Govt, security

Loans

U. S. Govt, security

American
♦Allied

U. S.

165,297,631

^

YORK

NEW

208,069,584 214,791,343

banks

American Tobacco B
Can

YORK

Sfc

COMPANY,

resources

Cash and

Union Carbide & Carbon__— 12.4
—

NEW

With

from

7,964,967

$

3.9

—

Gamble

Steel

duPont

,

8,324,088

-f 59.2
-f

due

Sept. 30,'50 June 30,'50

79.0

Sears, Roebuck

Cash and

COMMERCIAL NATIONAL BANK

AND

-f 142.7
-f-

INC.,

671,822,030 642,224,470
593,305,153 567,026,334

resources

Deposits

BROWN

%

Goodyear

CO.

&

holdings

*

Surp.

Change 9/22/39 to 1/2/45

Standard

EXCHANGE

TRUST

booklet issued by the bank un¬
der the title "30 Years in Banking

•

109,251,250 156,453,757
Loans & bills disct. 243,485,537 198,541,284

Loans & discounts-

*

Total

$

holdings

gain of 142.7% for Loew's, Inc.

a

MORGAN

banks

Deposits

comprise the
a
loss of

from

P.

Sept. 30/50 June 30/50

from

banks

dual

which

J.

U. S. Govt, security

Total

varied

AND

513,358,225 506,777,840
471,514,164 465,475,550

resources

Jones Industrial Average
changed only one cent in the ag¬
gregate from September, 1939, to
January, 1945, the percent change
in the price of each of the indivi¬
stocks

BANK

NEW YORK

Sept. 30,'50 June 30/50

D6w,

average

CORN

Mayham, Wal¬

Feldman is contained in

a

rampant among average investors,

table which

of Messrs.

and

47

FEDERAL

commerce

DEPOSIT

for almost

a century.

INSURANCE

CORPORATION

48

48

The Commercial and Financial Chronicle

(1332)

Continued

Housing Securities
Formed As Clearing
House for

Our

the

broaden

varying

problems,
the
inability

acute

as

been

faced with
but none so

have

find

to

mortgagees

anxious

were

good

in¬
buy

to

mortgage companies
to sell; but to date

loans;

were

their

of

steady

a

Investment in¬

market.

vestment
stitutions

the

throughout

builders

Home

country

eager

there has been no common meet¬

The. decisive turn of events in Korea, which brought

Securities,

Housing

clearing house.
vate

is in¬

Inc.

provide such a national

tended to

venture,

A completely pri¬
Housing Securities

the National Association of Home

Builders

and

afe

limited

to

50

.shares of non-negotiable stock, so
that

person c or

no

the

control

shall
is also

group

It

company.

felt that this will insure the con¬

tinuation of the corporation as an

stabilize the market for

•agency to

insured

Governmental

and

guar¬

anteed mortgages.

Officers and directors are: Pres¬

ident, Thomas P. Coogan, Miami,

Fla.; First Vice-President, Nathan
Manilow,
Chicago,
111.; Second
Vice-President,

S.

George

Good¬

Charlotte, N. C.; Vice-Presi¬
dent, Spencer F. Williams; Secre¬
tary,
Joseph
Meyerhoff,
Balti¬
more,
Md.;
Treasurer,
R.
G.
Hughes, Pampa, Texas.

year,

David

Directors:

D.

Bohannon,

San Mateo,

Calif.; Alan E. Brockbank,
Salt
Lake
City,
Utah;
Franklin L. Burns, Denver, Colo.;
"W. W. Caruth,

Henry

Emanuel M.

wick,

Detroit

V.

Seattle, Wash.

Stringfellow,

O.
"

•

Counsel

General

Mich.;

Spiegel, New Bruns¬

J.;

N.

Jr., Dallas, Texas;

Fett,

F.

a

feeling that the inflation may not gain momentum, has had
favorable effect upon the government market. Also the refund¬

going to continue to tighten the money markets and there is to
be no upping of reserves, the government market has, it/ seems,
The

is

Herbert

S.

Wall Street, New

York

Stock

other

leading exchanges, announce that

with

Van

F.

Paine,

Curtis, is

Vranken,

Webber,

now

issues

bank

long

There

formerly

Jackson

&

associated with the

firm.

The

that the most liquid obligation in the government
the bills on out) is the Victory Loan issue. The
shorter end of the market has been more stable, but it is being
again

(from

watched

closely for clues as to the future course of interest

very

rates.

Treasury Bills Most Popular
The

This

continue

issues

bank

attributed

is

the

to

the

hold

to

the

stage.

which accompanied

activity

great

of

center

the

by Federal's stiffening of interest rates.
The eligible list
into two parts, with the shorts, due to their important

created

switching and swopping about in bills, certificates and notes with
the Central Banks the focal point in these exchanges.
With the

suc¬

ceeds J. S.

Baughman, who recent¬
ly became President of the Fed¬
eral National Mortgage Associa¬
if

Citizens

The

in

being will be most popular among the liquid-conscious

the time

buyers.

Intermediates

ples

City

Pa.

The

National

Bank

Bank

of

McKeesport,

Citizens

the

to

troller of the

Currency, had

a cap¬

of $50,000.

(common)
*

260.

page

*

"Investment
Women"
two

the

Bank

American

and

Trust

Na¬

Company

of Chicago on

Sept. 27 authorized
a
33%% stock dividend, which
would increase the bank's capital

giving

securities

in volume,

market a fillip

the

about

move

far

as

although

quotations

as

are

times these

at

concerned without

issues changing hands. The 1956 maturities
have been under pressure because there has been sizable liquida¬
tion in these securities by large life insurance companies.
This
too

of thase

many

selling appears to be about over, which accounts in some measure
for the improved market action of these obligations.
However,
the all-important
to be

factor

action of the

future
a

far

as

the 1956s

as

Central Banks

on

are concerned is the
short-term rates.
If it is

1%% yearly rate, these issues are attractive.

On the other

hand, if the 12 months' rate is to go to IV2%, and there is to be
an accompanying increase
in reserve requirements, the 1956/58s
and the 1956/59s are in a vulnerable position at prevailing prices.

also

been

a

this issue.

was

the

case

in

banks, the large life insurance companies have been getting out
of the September 1967/72s. Whether this liquidation is over or
has

just subsided for the time being is

market.

question in the

open

an

Nonetheless, there is not likely to be many more of these

which will be sold by non-bank investors, because from
available figures, the bottom of the barrel is more than in sight.

bonds,

As to the buyers,

according to informed sources, the Central Banks
have been in there keeping the market in the September 1967/72s
orderly.
How many may have been bought by Federal is a
matter of considerable conjecture.
Yet the opinion in some finan¬
is

quarters

the

that

Central

have

Banks

the
of

factor

in

acquired

quite

a

issue in the recent market unsettlement.

support of the most distant bank

out-of-town
this

been

commercial

security.

active

in

banks

The large
either

the

middle

obligation with

by far the leading acquirers

or

the

longs,

short-term end of the list is where the

special meet¬
ing on Oct. 11, provides for the
issuance of 10,000 shares of com¬
stock

The funds for the

date.
would

series

will

given

on

and
in

W

Oct.

starting

18.

of

$100

bank's

at

because

are

under the

least,

are

Banks'

In

& Co.

The

bank

November from

aside

G.

*

Vies,

the

Central

There is

large

amounts

of

the other

companies and savings banks,
change

in

this

are

The

almost

Banks.

These

of

mo¬

ineligibles

than Treasury

obligations.. A

more

regimented

seems

non-bank

are

Townsend,

has

who

at Chicago, 111.,

President

as

more

economy
n

in

statements

earnings
sheets.

balance

will

investment

completion

Proven

rules

laid down.

be

lectures
have a
of the
workings of Wall Street and

Upon
those

of the
should

attending

understanding

basic

good
inner

investments generally. A previous
lecture series
the

under

The

held last Spring

was

sponsorship.
will be given

same

courses

by

George F. Shaskan, Jr., partner of
the

New

firm

Stock

York

Shaskan

of

Exchange

&

Co.,
special guest lecturers.

by

and

With Sutro & Co.
to The Financial Chronicle)

(Special

CALIF.

HILLS,

—

E. Campbell has become

associated

with

Sutro

&

Co., 275

North

Canon

Drive.

He

was

for¬

merly

with

Shields

&

Co.

and

La Salle
National Bank of Chicago as VicePresident

In the past he
Castera &

Buckley Brothers.
Co.

since

joined

1933,

Oct.

and

In

2.

Trust

associates

Company

have

Officer

taking this step,
joins
others
of

Townsend
Trust

the

to

moved

La

Salle's

on

was

an

Mr.
his
who

officer of Fox,

With Merrill

Lynch

(Special to The Financial Chronicle)

trust

LOS

department during the process of
liquidation of The Trust Company
of Chicago. The major portion of

filiated

successor

Townsend

former

the

La

Salle

joins the group of

now

officials

of

the

ANGELES, CALIF.

Conrad

E. Jaman

has

—

become af¬

Merrill

with

Lynch,

to

owners

attractive

is

(Special to The Financial Chronicle)

of these accounts.

Townsend

graduate

a

College and Harvard

school

as

President of

association.

Bar

of

Law

A

its

member

Illinois

Associations,

and

Mr.

alumni
the

of

Chicago

trust

business.
if

5j!

SAN
Carl

FRANCISCO,

Morton

has

CALIF.

been

added

—

to

the staff of Dean Witter &

Montgomery
the

Street,

New York and

Stock

Co., 45
members of

San Francisco

Exchanges.

Townsend

practiced law before entering the

Join Kennethi E.

Goodman

(Special to The Financial Chronicle)

*

Effective Sept. 13, the

First Na¬

SHEBOYGAN, WIS.

—

Magnus

tional Bank in Dodge City, Kansas,

Brinkman and Walter R.

increased its capital from $150,000

have become associated with Ken¬

to

neth E. Goodman &

$200,000 by a stock dividend of
$50,000.
Through

a

*

dividend

stock

of

Peoples National Bank of Green¬

ville,
from

S.

C.,

$200,000

has

to

if

The

Rogers

*

Schmidt

Co., 6-7 North

Eighth Street.

if

$100,000, the capital stock of the

which is

in the future.

Joins Dean Witter Staff

company

in the handling

been

enlarged

$300,000,

as

of

Sept. 20.

definitely in the making could alter this conditic

figures

Kenneth

#

served The Trust Company of Chi¬

American,

sellers/" There

position

how to get at finan¬

facts, how to understand the

Sixth Street.

buyers, the life insur¬

they have other commitments which

They will show the av¬

trustee and Mr.

been

the

initiated.

erage woman

cial

Geo. F. Shaskan, Jr.

un¬

as

This has been proved in the past, it is being
are

in¬

the

bank

question about the

no

form

BEVERLY

School and has served the former

have

in¬

and

the

Buying in the tap issues, according to reports, is principally

immediate

last

$4,000,000 to $5,-

$

cago,

terest

de¬

to

from

sponsorship of Federal and, for the

with the Central Banks because

no

account

increased

million.

mately $240

be

signed

Pierce, Fenner & Beane, 523 West

companies.

because

par

With the completion of
proposed additional increase
in capital stock, the capital, sur¬
plus and undivided profits will be
in excess of $10,000,000.
Deposits
of the bank now total approxi¬

Harold

will

to

INCORPORATED

be

surplus

was

if

ance

5,000
at

share, increasing the
capital from $2,000,000 to

the

language and

been moved

yet to be sold by non-bank owners, mainly the large life insur¬
ance

and

in

be

technical

-

the trust accounts of this company

deposit banks have been

the

by

support

There

stockholders

lectures

have

Vacuum

a

especially

being pegged.

now.

dividend

per

ability to hold the restricted issues at whatever

they desire.
again

of

a

$3,000,000.
of

All

and

to

as

sold

were

sday

n e

8 to 9

of

when

on

evenings from

American

1946

the V"

*12

d

e

2 V

from

other

undivided

5,000 shares of common stock was
issued

be

12

and

3

to

from

November,

for

*-<■

not

moving about of the intermediate and longer

bonds,

that

on

dividend

National's last capital increase oc¬
curred

lec¬

Barbizon

One

women.

reserves.

taken

be

profits

held

shares

by stockholders of record

Beloit

tap

three

new

one

Mr.

Restricteds

the

each

for

a

the basis of

on

of

courses

Hotel

have

center institutions

money

at

the

intermediate maturities of the

the

The plan, to be submitted

000,000.

significant but not telling amount of short selling in

As

approval of stockholders
and the Comptroller of the Cur¬
to

to stockholders

subject* of

Tuesday after- '•" *

Stern, President, the

of

directors

the

be

the

at

for

Planning

will

elementary

tures

if

special meeting called by

a

Planning

For Women

noons

At

share

of the eligible group is still

our

of

National, ac¬
Sept. 25 issue of
the Bulletin issued by the Comp¬

mon

May Be Vulnerable

The intermediate and longer end

the capital were
issue of July 20,

of

enlargement

given

a

if

Bentleyville, Pa., was placed in
voluntary liquidation on Sept. 19,
having been absorbed by the Peo¬

ital

15.

by

became

Investment

tion.

Bank

$2,000,000 stock
effective Sept.
Details of the plans for the

dividend,

rency.

proved




he

capital of

National

States

$10,000,000

happen to the near-term rates, before they get too enthusiastic
about making sizable commitments in certificates and notes.
It
seems
as
though Treasury bills will be the security which for

level

BOSTON 9

United

that

*

*

$12,000,000

new

will

Central

HAncock 6-6463

Sept. 19.

on

stated

as

Home

announced

non

ment

YORK 5

advices

the

ject

securities

NEW

noted in these
14, page 1010.

Portland, Ore., increased from

from $3,000,000 to $4,000,000, sub¬

motionless,

WHitehall 3-1200

of
was

charter for which

a

was

United

Treasury's refunding out of the way, it would not be surprising
if there were a let-down in the short-term end of the list. Quite
a
few investors are inclined to wait and see what is going to

In contrast to the

45 Milk Street

Washington

Press

tional

eligibles,

Street

at

Manager

Corporation

Loan

place in the fall refunding, accounting for most of the volume
in the market recently.
There has been and still is considerable ;

SECURITIES

Broad

Newark, N. J., lawyer,

a
General

Lawrence F.

doing most of their business.

15

Kelly,

of

in

on

of Jefferson,

Bank

*

The

the

appointment of Francis R.

is divided

partially exempt 2%s, which still have appeal to these banks.

Aubrey G. Lanston

The

refunding operation, and the uncertainty which has been

sizable

tant

MUNICIPAL

22

ViceTrust

Co., it is stated.

cording

According to advices, scale buying has been the next most impor¬

STATE and

was formerly a
of the Louisville

£

been as steady as the "old gray mare,"
guiding hand of the Central Banks.
It is now being

few of the longest bank

TREASURY

Co.,

President

tap bonds have

the

under

said

cial

U. S.

house

week, than has been the case for some time.

bond has not been without more than a
passing amount of liquidation from non-bank investors. There has

City, members of the New

John

and

to indicate that some operators believe this could happen.
has been better buying of the banks' issues, in the last

The longest taxable

York

and

intermediate

the

to this point.

up

Longest Taxables Being Liquidated

With Riter & Co..

Exchange

of

action

market

place

appears

Colton, Washington, D. C.

Riter & Co., 40

what has taken

discounted

well

pretty

recruited from

.stockholders were

with it

the

market

ing place or clearing house.

been

National

Aug.

on

placed

was

Sept. 18,
succeeded by the

columns Sept.

opinion in some quarters is there may not be an immediate
change in reserve requirements.
If the Central Banks are not

Avenue, New York City.

First

And Bankers

By JOHN T. CHIPPENDALE, JK.

at 250 Park

headquarters are

Texas,

the issuance of

ing has been taken care of, without too many casualties, and the

VA

having

News About Banks

Governments

on

loans.

and

FHA

for

market
Its

and

liquidity

Reporter

Mtg Loans

Securities, Inc. is a
corporation formed to pro¬

vide

Jefferson,

47

page

Thursday, October 5, 1950

.

.

voluntary liquidation

Housing
new

from

.

LOUISVILLE,
Hoeck, Jr. is

now

Wilson-Trinkle

if

National

Joins Wilson-Trinkle
(Special to The Financial Chronicle)

Bank

of

Trust Building.

Ky. —Louis

F.

associated with

Co.,

Louisville

Volume 172

Number 4948

.

.

The Commercial and Financial Ch onicle

.

The

Indications of Current
Business
IRON

Indicated

steel

week

Activity
Week

INSTITUTE:

STEEL

AND

101.2

Oct. 8

capacity)

(percent of

operations

following statistical tabulations

latest week

Latest

AMERICAN

(1333)

or

or

month available.

month ended

on

Previous

Month

Year

Week

Ago

Ago

(BUREAU OF MINES):
Production of primary aluminum in the U.
S.
(in short tons)—Month of

July

Stock

Equivalent to—
Steel

ingots

and

castings

tons)

(net

Oct. 8

1,951,900

151,000

1,890,100

1,942,200

of

(short tons)

PERMIT

VALUATION

BUILDING

Crude

INSTITUTE:

PETROLEUM

oil

and

condensate

output

Gasoline

daily

average

(bbls. of

5,894,050

5,938,330

5,699,480

23

115,982,000

5,983,000

6,197,000

4,932,550
5,377,000

Sept. 23

19,726,000
2,355,000

19,628,000

20,263,000

18,152,000

2,175,000

2,272,000

1,910,000

South

oil,

and

fuel

7,816,000

8,314,000

7,559,000

6,555,000

8,356,000

8,160,000

7,419,000

Stocks

-Sept. 23

104,739,000

104,305,000

Sept. 23

75,079,000

74,136,000

65,841,000

81,414,000

New

Sept. 23

42,319,000

42,208,000

41,697,000

68,143,000

Outside

oil output (bbls.)
Sept. 23
output (bbls.)
Sept. 23
refineries, at bulk terminals, in transit and in pipe lines—

at

Finished

and

Kerosene

unfinished

(bbls.)

gasoline

(bbls.)

at

Gas, oil,

and distillate fuel oil (bbls.)

Residual

fuel

ASSOCIATION

oil

OF

at

(bbls.)

at

at

__

AMERICAN

26,577,000

Middle

East

870,196

866,207

♦838,429

725,840

696,740

*692,683

ENGINEERING

CONSTRUCTION

Private

and

S.

(U.

$163,897,000

items

130,015,000

144,425,000

222,705,000

94,216,006

$525,578,358

Beehive coke

INDEX

FOR

IN

114,796,000

94,474,000
85,998,000

119,781,000

.

INDEX—FEDERAL

SALES

STORE

RESERVE

10,414,000

8,476,000

22,424,000

69,681,000
63,388,000
6,293,000

97,357,000

of

August

15:
173.0

foods

Dairy

and

products

products

Fats

and

kwh.)

000

steel

(per

iron

INDUSTRIAL)

AND

—

DUN

&

127,100

•152,700

143,800

4,700

Clothing

185.9

184.7

187.4

Rent

124.8

124.4

120.8

139.5

135.8

292

288

*367

and

sweets

'

electricity

Gas
321

and

and

140.9

refrigerators.

electricity

97.0

luels

6,503,008

6,459,386

6,457,030

In

of

(tons

Refined

PRICES:

189.3

Sept. 26

.

3.837c

3.837c

3.837c

U.

2,000
of

(tons

$48.80

$46.61

$46.61

$45.88

$40.67

$40.75

$40.92

S.

Lead

Zinc

tin

(New

York)

(New
(St.

A.

Sept. 27
Sept. 27
Sept. 27
Sept. 27

—

at

of

2,000

AND

S.

at

Average

LINTERS

i

Baa

Public

Utilities

Group

Industrials Group

U.

:

676,397

Linters—Consumed month of August———

149,279

112,358

137,412

151,425

207,170

228,433

137,119

163,701

47,549

20,540,000

20,525,000

19,745

104.000c

103.000c

In

consuming establishments

16.000c

14.000c

14.750c

In

public storage

15.800c

15.800c

13.800c

14.600c

Cotton

17.500c

17.500c

15.000c

10.000c

102.17

GINNING

115.43

116.22

Average corporate

Bonds

119.82

120.02

120.84

118.60

118.60

119.61

119.00

115.04

115.04

115.63

114.08

109.06

109.06

109.24

106.56

111.62

111.81

.112.00

109.42

116.22

116.02

116.80

116.22

119*00

119.00

120.02

119.41

Oct. 3
Oct. 3

_—

2.38

2.37

2.34

2.21

2.88

2.88

2.84

2.65

2.61

2.61

Oct. 3

—

-—_—Oct. 3

—

2.72

2.72

2.67

Oct. 3

2.90

2.90

2.87

A

-

COTTON

MOODY'S

Orders

Production

2.70
'

2.95

of

(tons)

23,407,000

19,747,000
8,267,000

Active

spindle hours per spindle in place Aug.

516.7

408

377

335

362

283

281

282

238

spindles active

DEPARTMENT

SERVE

PAINT

AND

REPORTER

DRUG

AVERAGE—100

STORE

Without

seasonal

Kilowatt-hour
Month

LOT

EXCHANGE—SECURITIES

Odd-lot sales
of

orders

Number

of

shares—Customers'

value

ON

EXCHANGE

by dealers (customers'

Number

Dollar

ODD-LOT

SPECIALISTS

AND

DEALERS

THE

FOR

2.84

2.85

2.81

2.84

2.70

2.70

2.65

of

466.2

Number

342.9

469.5

468.6

short

sales

Customers'

other

219,191

207,785

211,075

192,289

229,731

23
23

231,325

228,119

202,374

23

101

100

100

91

23

700,166

714,466

645,496

356,741

OF

137.0

128.0

132.2

136.4

of

total

30,825

20,147

24,254

19.828

Sept. 16

946,453

592,738

739,100

595,563

Sept. 16

$42,115,213

$26,141,879

$32,232,118

$23,482,936

Sept. 16

35,401

21,884

25,672

23,865

451

294

138

218

All

sales

34,950

21,590
612,186

25,534

23,647

729,705

661,842

Sept. 16

1,024.499

short

sales

Sept. 16

16,032

10,832

4,855

7,754

Customers'

other

sales

Sept. 16

1,008,467

601,354

724,850

654,088

$39,598,731

$23,424,479

$27,433,501

$22,057,937

344,910

201,450

223,030

247,300

value

Round-lot

Sept. 16

sales

Number

Sept. 16

.

sales

Sept. 16

sales

Sept. 16

Other

—

344,910

201,450

247,300

223,030

purchases by dealers—

Number

shares

of

WHOLESALE

Sept. 16

PRICES

NEW

SERIES

—

U.

S.

DEPT.

OF

293,560

202,020

219,630

271,430

Farm

Sept. 26

169.4

*169.8

167.2

152.4

Sept. 26

180.2

181.3

179.5

160.2

Sept. 26

165.3

166.0

167.7

158.4

—-———————.—Sept. 26

233.5

235.3

249.4

199.1

products
.

Livestock

——.

Foods

All

Fuel

Metals

other

farm

and

Building

manufacturing

metal

and

figure,

allied

—

^Includes 549,000 barrels of

closed




7,255.000

6,502,000

250,910

*272,514

98,953

*140,864

183,868

*$59.21

$54.68

(AMERI¬

August:

(tonnage)—estimated

EARNINGS AND HOURS—WEEKLY

AVERAGE

ESTIMATE

LABOR—Month

of

—

U.

S.

DEPT.

OF

August:

Earnings—
All

manufacturing

Durable

goods

Nondurable

—-

64.09

*63.05

57.74

u

———

55.78

*54.65

51.31

goods

Hours—-

manufacturing

Durable

goods

41.2

—

39.1

*41.1

39.2

40.6

*39.8

38.9

$1,463

—

Hourly earnings—

*40.5

41.7

————______—

goods

*$1,462

$1,398

\

i

manufacturing

1.537

*1.534

1.473

1.374

*1.373

1.319

Factory sales of washers (units)
Factory sales of ironers (units)

381,452

282,261

323,789

42,700

25,100

32,300

(units)

32,318

23,588

5.526

Durable

goods

Nondurable

——

goods

———r~—

WASHERS
SIZE

IRONERS

AND

(AMERICAN

MANUFACTURERS'

LAUNDRY

—

HOME

ASSOCIA¬

TION)—Month of August:

Factory

sales

ol

dryers

176.5

158.9

263.8

220.8

159.4

159.2

155.4

162.2

161.1

149.6

138.0

134.9

134.9

134.5

130.6

176.4

176.0

174.8

168.5

Number of passenger cars—

221.3

221.8

216.1

190.0

Number

of

motor

trucks—.

*128.6

124.0

116.2

Number

of

motor

coaches—

129.2

13,757,000

*7,968.000

*6,699,000

CONSTRUC¬

(tonnage)—estimated—.

179.0

runs.

*14,667,000

7,976.000

173,053

STEEL

STEEL

OF

of

259.9

Sept. 26

foreign crude

312.8

6,787,000

—

Sept. 26
Sept. 26
Sept. 26

products—.

136.9

*361.9

$60.28

STRUCTURAL

INSTITUTE

Contracts

.

—

177.4

145.3

*147.5

367.2

goods —

TION—-Month

Shipments

—

goods

257.5

,

5.896.000

5,316,000

14,763,000

—

Sept. 26

foods

materials—
products—

materials

Chemicals
•Revised

and

1—

lighting

11,212,000

*6,598,000

*5,472,000

148.2

Sept. 26

than

products

and

*12,070,000

6.592.000

Sept. 26

commodities

Textile

12,140,000

of

workers)

5,548,000

Sept. 26

——

Meats

41,954,866

of employees in manufac¬
industries—

STANDARD

Grains

43,923,668

number

HOUSEHOLD

LABOR—

1926=100:
All commodities

44,087,312

31

indexes—

turing

All

Round-lot

19,948,627
$375,372,300

DEPT.

goods

Nondurable

'

Short

S.

SERIES—Month

(production

manufacturing

All

by dealers—
sales

shares—Total

of

at July

manufacturing

Payroll

FACTORY

sales)—

sales

Customers'

Dollar

22,694,422
$414,734,400

Employment indexes—

CAN

——

shares—Customers'

22,636,887
of

goods

FABRICATED

Sept. 16

customers

LABOR—REVISED

Nondurable

COMMISSION?

sales

Number

consumers—

customers—month

PAYROLLS—U.

manufacturing

All

ACCOUNT OF ODDTHE
N.
Y.
STOCK

———

AND

Nondurable

All

Sept. 16

total

ultimate

to

(000's omitted)

July:

Sept. 16

(customers'

Customers'

sales

ultimate

of

Estimated

——

Odd-lot purchases by dealers
Number of orders—Customers'

:

INSTITUTE:

July

EMPLOYMENT

INDEX—1926-36

sales—-

adjustment

2.68

——

total

Average=100)

July

purchases)—

—

—

RE¬

$412,436,800

3.36
3.20

—

TRANSACTIONS

(FEDERAL

variation—

from ultimate

Durable

ETOCK

SALES

seasonal

ELECTRIC

EDISON

3.06

Sept. 29

PRICE

Aug. 26

August:

for

3.21

1
OIL,

on

on

(000's omitted)

SYSTEM— (1935-39

of

Durable

at

26—:

7,284,000

3.22

Sept.
Sept,
—Sept.
Sept.

activity

orders

Aug.

23,007,000

3.07

ASSOCIATION:

(tons)

Percentage
Unfil.ed

1,247,576

COMMERCE):

20,525,000

Oct. 3

(tons)

OF

9,711,000

3.22

INDEX

PAPERBOARD

received

863,633
(DEPT.

23,031,000
20,540,0C0

All
NATIONAL

to

August-

3.08

Group

COMMODITY

prior

spindle hours

Oct. 3

Group

linters

of

Spinning spindles in place

Oct. 3
—Oct. 3

Group

Utilities

Industrials

COMMERCE):

Active

Spinning

Oct. 3

Public

OF

(exclusive

SPINNING

Revenue

Baa

Railroad

(DEFT.

26

2.91

2.66

Aaa

Aa

of Aug.

as

26

23

1)

Adjusted

j.

of Aug.

as

Aug.

114.85
120.84

bales

of

as

spindles active

September

103.93

115.43

663,008
3,946,465

102.500c

101.65

610,555

1,307,560
4,847,009

16.000c

101.64

807,840
1,144,250

103.750c

AVERAGES:

YIELD DAILY

BOND

Government

S.

217,167

4,568,889

In

Month

MOODY'S

48,266

COM¬

August

17.550c

Oct. 3
Oct. 3
Oct. 3

Group

of

24.425c

Oct. 3

_

Railroad

90,739

BALES:

month

24.425c

Oct. 3
Oct. 3

-

_

85,577

95,983

period

OF

DEPT.

—

24.425c

Oct. 3

Aaa

of

end

17.325c

'

corporate

at

lbs.)

22.225c

Oct* 3
Oct. 3

Bonds

Aa
A

lbs.)

22.700c

DAILY AVERAGES:

PRICES

BOND

Government

2,000

22.575c

Running
U.

96,734

consuming establishments as of Aug. 26
public storage as of Aug. 26

COTTON

MOODY'S

♦85,378

112,083

lbs.)

stocks

copper

(tons
COTTON

Sept. 27
Sept. 27

:

Louis)

St.

62,279

89,207

L08.465

50,952

of

(tons

Lint—Consumed

at

at

Louis)

(East

lbs.)—

2,000

'

QUOTATIONS):

at

at
York)

154.8

August:

$27.92

In

refinery

Export reiinery
Lead

J.

or

184.8

156.2

customers—

to

Refined

3.705c

Sept. 26
Sept. 26

copper—

Domestic
Straits

M.

&

Month

For

—

186.4

'

gross

(E.

141.1

production in U. S. A.—

Crude

181

143

155

183.1

146.6

158.1

INSTITUTE

Copper
148

97.1

190.9
'

furnishings

Miscellaneous

5,521,238

97.0

194.4

147.4

Other

BRAD-

(per lb.)

PRICES

Electrolytic

176.5

Sugar

MERCE—RUNNING
METAL

144.0

176.0

37,000

Sept. 30

—

ton)
(per gross ton)

Scrap steel

208.8

141.3

959,000

Sept. 28

COMPOSITE

Pig

201.9

304.4

187.7

oils

,

923,000

—Sept. 23

INC.

Finished

222.2

194.7

1,984,000

INSTITUTE:

(in

(COMMERCIAL

AGE

184.9

164.3

220.8

158.9

vegetables

10,980,000

Deliveries

IRON

239.5

179.5

'11,275,000

COPPER

STREET

169.4

256.0

11,410,000
956,000

House

,

202.6

171.3

328.8

and

Ice

FAILURES

168.8

210.0

175.5

182.7

bakery

172.5

209.0

—

183.1

SYS¬

A VERA G E=100

output

6,828

CITIES

Meats

104,382,000

'■

All

Fuel,

ELECTRIC

*7,191

MODERATE

LARGE

Sept. 23
Sept.23

(tons)

Electric

306,068,680

THE

Sept. 23

Pennsylvania

EDISON

$347,409,808
41,341,128

488,454,817

7,303

IN

37,123,541

513,139,021

Beverages

and

TEM—1935-39

54,741,047

August—

100—As

=

Cereals

Sept. 28

lignite (tons)—;
anthracite (tons)

DEPARTMENT

7,639,760

83,655,330

257.5

$342,486,000

MINES):

OF

13,793,625

—

$238,899,000

Sept. 28

BUREAU

53,695,92).
23,193,921

19,413,134
91,5S6,462

City

FAMILIES

Fruits

coal

of

PRICE

Sept. 28

—

-

OUTPUT

47,404,159

37,858,882
York

INC.—Month

1935-1939

municipal

Bituminous

35,749,481

States

New

Sept. 28

Federal

COAL

82,925,164

99,571,771

City

of

$244,811,000

Sept. 28

construction

State

118,101,739

101,389,778

'

NEWS-

construction

construction

Public

31,569,172

124,262,683

BRADSTREET,

:.

All

S.

$18,591,131
75,053,692

44,119,420

560,917

RECORD:
U.

$31,662,778

Ago
95,777
53,809

87,269,536

_

United

York

INCOME

ENGINEERING

14,500

$550,997,973

„_

Central

CONSUMER

Total

15,529

Year

ZZ
Z_ZZ

Central

Total

661.468

Sept. 23

cars)

60,400

Z_Z_ZZZZZZZZ
Z_Z_ZZZZ

™

.

Sept. 23

of

Month

63,518

94,483,711

_Z_ZZ

Atlantic

BUSINESS INCORPORATIONS (NEW)
UNITED STATES—DUN &

freight loaded (number of carsj__
Revenue freight received*from connections (number

Previous

Month

49,473,698

Atlantic

South

26,615,000

Latest

&

Pacific

RAILROADS:

Revenue

CIVIL

DUN

—

103,262,000

27,632,000

105,793,000
24,829,000

Sept. 23

—

of that date:

are as

CITIES—Month

Mountain

oil

Gas,

output

of July

end

;

West Central

8,543,000

Sept".

___,

_

(bbls.)
distillate fuel

Residual

(bbls.)

average

—

INC.—213

New England

42

Sept. 23

daily
(bbls.)

output

Kerosene

—

.

stills

to

runs

either for the

August:

Sept. 23

gallons each)
Crude

of

are

$34,639,026

aluminum

BRADSTREET,
AMERICAN

of quotations,

cases

ALUMINUM

8.2

98.0

100.7

production and other figures for the

cover

Dates shown in first column

that date, or, in

49

MOTOR

VEHICLE

.PLANTS

IN

U.

FACTORY
S.

SALES

(AUTOMOBILE

FACTURERS' ASSOC.)—Month
•Total

number

♦Revised.

of

vehicles—

FROM
MANU¬

of August:

:

—

818,092

706,672

657.664

682,782

595,067

557,370

134,853

—

111.208

99,850

457

397

444

50

The Commercial and Financial Chronicle

(1334)

•

Securities Now in Registration
•

Activated

Fertilizer

assessable class A

common

Proceeds—For plant expansion and gen¬
Office—737 Peyton Building, Spokane,

($1 per share).
eral

of Washington
100,000 shares of non¬
capital stock. Price—At par

Corp.

(letter of notification)

Sept. 28

exDenses.

Wash,
Alabama

Power

(10/24)

Co.

100,000 shares of preferred stock (par
Underwriter—To be determined by competitive

Sept.

22

$100).

filed

Probable bidders: Morgan Stanley & Co.; Blyth
& Co., Inc.; Union Securities Corp. and Equitable Secur¬
ities Corp. (jointly); First Boston Corp. Proceeds — For
construction program. Bids—Expected to be opened Oct.
bidding.

writers

Power

Alabama

Co.f

Birmingham,

Ala.

28 filed 64,000 shares of 4.20% preferred stock
(par $100) offered in exchange for a like number of out¬
standing 4.20% preferred shares of Birmingham Electric
Co. No underwriter.
Offer expires Oct. 20 (extended
from

Arkansas Power & Light Co.
May 23 filed 155,000 shares of cumulative preferred stock
(par $100). Proceeds—To be applied to (a) redemption

Aug. 1, 1950, at $110 per share plus dividend ac¬
cruals, of all the 47,609 shares of outstanding $7 pre¬
ferred and 45,891 shares of outstanding $6 preferred;
and (b) the carrying forward of the company's construc¬
on

tion

competitive

by

stock.

Franklin
two
and

share

Simon

shares

Manager—W.

rnoter

Inc.,

each

two

expires

Hutton

E.

effective Aug.

for

Offer

&

shares

common

Oct.

on

Co., New

16.

a

color, Inc.) Price—At
and for

writer—Julien

reached.

Associated Mercantile Co., Chicago, III.
Sept. 18 (letter of notification) 2,970 shares of preferred
stock (par $100) and 2,970 shares of common stock (par
$1).
Price—At par. Underwriter—None. Proceeds—To
establish wholesale mercantile business.
Address—c/o
Louis E. Cohen, 120 West 29th

St., Chicago, 111.

Associated Telephone Co., Ltd.
(10/17)
Sept. 14 filed $6,000,000 of 27/s% 1st mtge. bonds, series
F, due Nov. 1, 1979. Underwriter—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
&

Co.

Kuhn, Loeb &
(jointly); Lehman

Inc.;

Hutzler

Jackson & Curtis and Stone

Co.

Salomon Bros.

and

Brothers;

Paine,

&

Webber,

& Webster Securities Corp.

(jointly);; White, Weld & Co., Kidder, Peabody & Co.
and Shuman-Agnew & Co. (jointly); Equitable Secur¬
ities Corp. and Harris, Hall & Co. (Inc.) (jointly). Pro¬
ceeds—To

repay

bank loans and

Bids—Expected to be opened

for

new

•

Big West Oil & Gas Co., Dallas, Tex.
Sept 5 filed $1,760,000 of 5% sinking fund debentures

•

Aug. 8

(letter of notification)

15,000 shares of capital
(approximately $2.75 per share).
Underwriter—First California Corp., San Francisco, Cal.
Proceeds—To Virgil D. Dardi, President,
the selling

stock. Price—At market

stockholder.

26

stock

(par $1)

Brager-Eisenberg, Inc., Baltimore, Md.
Oct. 2 (letter of notification) 6,032 shares of common
stock (par $1) to be offered to stockholders. Price—$22
share.

more,

Underwriter—None.

Proceeds—For corporate

Office—Eutaw

purposes.

Saratoga

and

Streets,

Balti¬

Md.

•
C. B. Supply Co., Odessa, Wash.
Sept. 29 (letter of notification) 5,000 shares of common
stock (par $25), 500 shares of preferred stock, series

A
B

(par $100)
(par

and 1,000 shares of preferred stock, series
Price — At par.
Underwriter — None.

$100).

Proceeds—To pay notes and loans and for

working

cap¬

California

Electric

Co.

fiied $4,000,000

of 27/s% first mortgage bonds
due 1980. Underwriters—To be determined by competi¬
tive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.;
Kidder. Peabody & Co. Proceeds—For construction pro¬
gram.

Bids—To be opened at 10:30

at Bankers Trust

a.m. (EST) on Oct. 24
Co., 16 Wall St., New York, N. Y.

Power

Co.

Harrison

10 shares held,
oversubscription privilege; rights to expire Oct.
1950. Price—$28 per share. ■ Dealer-Manager—Mor¬
Stanley & Co. Proceeds—For construction program.

Continental Refrigeration Corp.,

and

for

commercialization

of

patent.




to

all

offices

Chicago

common

pre-

,v

stock "

Gas Co.

-

&

supplied

by amendment.

(par $1.25).?*
Underwriters-^-

Co., and Walston, Hoffman & Goodwin, of
Proceeds—To

selling stockholder.

a

lease

New

to be

Holding Corp.,

of

Price—To be supplied by amendment.

Under-,;
McCormick & Co., Chicago, 111. Proceeds—To company will be used to pay an $800,000 bank,
debt, to retire the $78,000 outstanding second mortgage j
writer—Kebbon,

Ithaca,

4%

reduce

bank

debt.

Underwriter—None.

Hamilton

Oct.

v

Business-

for

2

Fire

Insurance

notification) 64,000 shares of capital's
Price—$4.50 per share. Underwriter—
Jenks, Kirkland & Co., Philadelphia, Pa. Proceeds—To
increase capital and surplus in order to offer additional
lines of insurance, including automobile casualty and
stock

of

(letter

(par $5).

y

Telephone & Telegraph Co. of Virginia
Sept. 14, (letter of notification) 57,600 shares of capital
stocklPrice—At par ($5 per share). Underwriter—None.

Proceeds—To develop and
Office—902 Seaboard Build¬

Proceeds—To

pay

bank loans and for

used, in

part,

for

Aug.
due

&

for

and

Dickson

& Co.,

lative preferred stock
common

class B

stock

(par $100), 8,000 shares of voting
(par $10) and 1,000 shares of non-voting

stock (par $10). Price—At market. Un¬
derwriter—None. Proceeds—For working capital. Office
common

Wilder

Price—In

1970.

Building, Charlotte, N. C.

Neb.

excess

of

102%.

Underwriter—

Proceeds—To retire:

Hub Loan

Co., Jersey City,

N. J.

4;

Sept. 18 (letter of notification) 100,000 shares of 18 cents'
cumulative convertible

(R. S.)

Hooper,

temporary loans.

con¬

Co., Detroit.
Proceeds—To expand
working capital.
Office—1320
Mt.

construction.

fl8 (letter of notification) $30,000 of 334% bonds

Wach6b Bender Corp., Omaha, Neb.

program.

McDonald

new

Office—Emporia, Va.

Dayton Power & Light Co.
Sept. 13 filed 50,000 shares of common stock (par $7)
to be sold to employees.
Price—To be set each sixmonth period by subtracting 15% from the
average price
for the preceding 12 months.
Underwriter—None. Pro¬
and

(10/9)

Home

ing, Seattle 1, Wash.

funds

<j

,

Co., Phila.

liability coverage.

•

operate mining properties.

notes and for working capital.

•

Cordillera Corp., Seattle, Wash.
Sept. 28 (letter of notification) 100,000 shares of fullypaid and non-assessable> common stock.
Price—$1 per

general

,

stcokholders and the balance for the company's

seven

account.

York

Proceeds—To

Office—55

acquired.

Co., Chicago, III. (10/10)
Sept. 22 filed 300,000 shares of common stock (par $1),
of which 150,000 shares are to be offered for the account i

Sept. 28 filed 25,000 shares of 4% cumulative preferred
stock to be sold to patrons of Grand
League Federation
Exchange. Price—At par ($100 per share). Underwriter

share.

or

company,

Hallicrafters

Cooperative Grange League Federation
Exchange, Inc., Ithaca, N. Y.
Sept. 28 filed 500,000 shares of common stock to be sold
to cooperative members.
Price—At.par ($5 per share).
Underwriter—None. Proceeds—To reduce obligation to
Cooperative G.L.F. Holding Corp. Business—Farm co¬
operative.
Cooperative G. L. F.

the

to

Liberty Street, New York 5, N.Y.

•

—701

the

,

Office—50

Inc., Charlotte, N. C.
Sept. 29 (letter of notification) 250 shares of 5% cumu¬
Cleveland

on

Mines,-Inc.
'
Sept. 19 (letter of notification) 100,000 shares of common
capital stock
(par 25 cents) offered ..to stockholders);,
of record Sept. 22 on basis of one share for each 14;
shares held; rights to expire Oct. 20.
Price—$1.50 perl"
share. "Underwriter—None.
Proceeds—For exploration,,
development and mining of various properties located*.?
principally in Arizona and New Mexico, at present under

vestors Service, New York. Proceeds—To pay expenses
incurred in prosecuting infringement actions under pa¬

•

31

Haile

N. Y."

Elliott Avenue, Detroit, Mich.

Private Wires

be

Philadelphia, Pa.

(letter of notification) $250,000 of 6% 5-year
income notes dated June 1, 1950 in multiples of $1,000.
Price—At 100 and interest.
Underwriter—National In¬

G.

Oct.

record

an

facilities

Pittsburgh

(Md.)

Hooper Telephone Co.,
Under-

of

each share

for

(no par) and 9,777 shares of

Hagerstown

Price—To

July 28

C.

San Francisco

stockholders

Sept. 28 filed 32,000 shares of common stock

Detroit Hardware Manufacturing Co.
Aug. 4 (letter of notification) 100,000 shares of common
stock
(par $1).
Price—$3 per share.
Underwriter—

Boston

to

share

one

ferred stock

Oct. 3, 1950 at rate of one share for each

struction

Philadelphia

offered
of

Employees Corp., Washington, D.C.
shares of capital stock (par $5),

30,000

Greenwich Gas Co., Greenwich, Conn.
Sept. 1 (letter of notification) 8,000 shares of $1.50

Sept. 22 filed (by amendment) 510,470 shares of common
stock (no par) offered to common stockholders of record

ceeds—For

NewYork.

filed

mobile financing.

•

California Electric Power Co.
(10/24)
Sept. 28 filed $2,000,000 of debentures due 1960.

Offering postponed.

Co., Inc.

(no par), to be offered first to stockholders. Price—Of/;
preferred, $25 per share, and common $10 per share.;
exercise of option by
Underwriter—F. L, Putnam & Co., Boston, Mass.
Proshare. Proceeds—For work- ! ceeds—To retire bank loan and for
working capital.

holding and financing instrumentality
G.L.F. Exchange, farm cooperative.

(10/24)

;

upon

Property
Power

working capital.

-

held; rights to expire
Nov. 20. Price—$10 per share. Underwriter—None. Pro- ./
ceeds—For additional capital funds. Business — Auto¬
f1 r

•

Consumers

—None.

ital.

Sept. 25

basis

ing capital.

•

26

be

to

Broadway, New York, N. Y.

•

per

to be issued

H. J. Boucher. Price—$5 per

tent

;

}

preferred

Engineering Corp.
(Calif.)
(letter of notification) 200 shares of common

Sept.

gan

for additional

Government

Engineering Corp.
(Calif.)
(letter of notification) 200 shares of common
stock (par $1) to be issued upon exercise of stock op¬
tion. Price—$5 per share. Proceeds—For working capital.

19,

share for

one

Underwriter—Smith, Barney
Co., New York. Proceeds—To pay promissory note,
complete purchase of a new plant at El Monte, Calif.,

Sept.

28

Consolidated

■

_

to be offered to com-.

May 3 filed 170,000 shares of common stock (par 250)
Price—$3 per share. Proceeds—For plant and warehouse,
advertising research, working capital, etc. Temporarily
postponed. Amendment may be filed.

Proceeds—

Consolidated

•

basis

|

,

con-

Price—To be filed by amendment,

on

General Radiant Heater

Portsmouth Gas Co.

shares for each $1,000 of debentures).

Holdings Corp.

of

to

Price—$10.25 per share. Underwriters—
Scott & Stringfellow, Richmond, Va., and others.
Pro¬
ceeds—To purchase shares of common stock (par $50) of

with

Blair

stockholders

12 shares held.

&

(par $5).

Sept.

«

along with dividend rate.

Natural Gas Corp.
(Va.)
Sept. 22 (letter of notification) 28,800 shares of common
stock

;

commercial paper.

and

(par $50)

and

Co., Chicago, 111.

loans

mon

working capital.

due 1965 (convertible into common stock on basis of 200

Price—To be filed
by amendment. Underwriter—H. M. Byllesby & Co., Inc.,
Chicago, 111. Proceeds — For drilling and development
expenses and for working capital.

|

Commonwealth

construction.

Oct. 17.

on

For

&

j)

each

vard, Los Angeles 34, Calif.

Collins

J

^

(par $1 )•>,.;

by amendment.

vertible preferred stock

Office—9200 Exposition Boule¬

decision

June 19, but rejected.

-

Fedders-Quigan Corp.
103,402 shares of series A cumulative

•
Commercial Discount Corp., Chicago, III.
Sept. 22 (letter of notification) 2,630 shares of $3.50 prior
preferred stock. Price—At par ($50 per share). Under¬

on

;

'J.

.

June 21 filed

mem¬

Bids—Received by company up to noon
Only one bid was made
of $100,003 per share, with a $4.95 dividend from Lehman
Brothers, Equitable Securities Corp. and White, Weld &
Co. (jointly).
Statement effective June 12. No further
program.

(EDT)

East

bank

par

working capital.

Office—1210

Underwriters—Mer-»
rill Lynch, Pierce, Fenner & Beane and G. H. Walker &
Co., of New York. Proceeds — To reduce outstanding

($5 per share). Underwriter—
Proceeds—To complete purchase of Thomascolor

None.

capital.

I

\|

organiza-'s

Proceeds—For

company.

working

and

Price—To be filed

exchange for assets of Thomas-

syndicate in

proposed

Street, Seattle, Wash.

common

(10,600 shares to be issued to Harold Less and 38
of

of

expenses

Family Finance Corp. (10/9)
Sept. 19 filed 200,000 shares of common stock

of

Dealer-

stock, with sale to be limited to former stockholders of
Richard Thomas Enterprises, Inc. and Thomascolor, Inc.
bers

Pro-,,?

Underwriter—None.

preferred stock, with subscription A

01

75th

16.

Colorvision, Inc., Los Angeles, Calif.
Sept. 28 (letter of notification) 54,000 shares of

share

one

tion

Statement

York.

share.

per

plant improvements.

of not less than 100 shares of preferred and 1,000 shares.
of
common.
Price—$51 per unit.
Underwriter—Pro-

at&the following
Collins common
Franklin Simon preferred

each

for

share

one

Simon.

Franklin

Co.,

&

stock and

shares for each Oppenheim,

IV2

ADDITIONS

•
Equity Discount Corp., Seattle, Wash.
f!
Sept. 26 (letter of notification) 2,000 shares of preferred 1 {
stock (par $50) and 20,000 shares of common stock (par I
10 cents) to be offered in units of 10 shares of common
\

City Stores Co.
17 filed 149,317 shares of common stock (par $5)
offered in exchange for common stock (par $10) of Oppenheim, Collins & Co., Inc., and for the 4%% convert¬
ible preferred stock (par $50) and common stock (par
of

Price—$40

ceeds—For

company

July

$1)

INDICATES

SINCE PREVIOUS ISSUE

•

Proceeds—To finance, in part, construction
and its subsidiary, Interstate Tele¬
graph Co. for 1950 and 1951. Bids—To be opened at 10:30
a.m. (EST) on Oct. 24 at Bankers Trust Co., 16 Wall St.,
New York, N. Y.
of

Thursday, October 5, 1950

.

.

Emmart Packing Co., Louisville, Ky.
Sept. 28 (letter of notification) 3,249 shares of common,!

bidding.

•

Statement effective Aug. 29.

Sept. 22).

determined

body & Co.

program

share;

July

be

Probable bidders: Halsey, Stuart & Co. Inc.; Kidder, Pea¬

ratios:

24.

To

—

.

$3

per

share.

preferred stock (par $2).

Price—

Underwriter—Dansker Brothers & Co., 17
Proceeds—For working capital.
*

Inc., New York City.
James
|

Manufacturing

Co.

(10/10)

4

Sept. 6 (letter of notification) 15,973 shares of common r
stock (par $5) to be offered first to common stockholders:t
on

the basis of one share for each 10 shares held.

Price—

$18.75 per share.

Underwriters—Loewi & Co., Shearson,
Hammill & Co. and Bell & Farrell, Inc. Proceeds—For,i;
working capital.
•

Kaiser Steel

Corp., Fontana, Calif. (10/24)
shares of preferred stock (no "
par) and 800,000 shares of common stock (par SI) to be
offered in units of one preferred share and one-half
Sept.

29

filed

1,600,000

olume 172

of

are

ent.

Number 4948

.

The Commercial and Financial Chronicle

.

Price—To

stock.

common

.

filed by amend-

be

0,000

to

received

be

of first mortgage

sue

00,000 from

from

and

together with $60,-

private

placement

of

an

3%% bonds due 1970, and $25,$91,082,990

October 6, 1950

Hamilton

Fire

October

Hallicrafters
James

leased

Underwriter—John Edward Stuler of
hoenix, Ariz. Proceeds—To develop oil lands. Office
Fulton-Fresno Bldg., Fresno, Calif. This offering is to
eplace fourth offering of $57,600 of units, which has

orking capital.

Common

11:30

Office—620 Fifth Avenue, New York

Louisiana Power &

October

Light Co.
Alabama

accruals, the 59,422 shares of outstanding $6
referred stock, and for construction and other purposes
ids—Received by company up to noon

but

'nion

rejected.

Three

Securities

dividend;

Blyth

bids

were

(EDT)

made

10:30

June
follows:

10:30

a

85.80 dividend.

Statement effective June

12.

Chemical of

Marken

RR.

-».

-

31, 1950

over-the-counter.

November

offered

November

to

common

stockholders

record

Middle South Utilities,

Inc.

June 1 filed 400,000 shares of common stock

(no par) to

be offered to preferred stockholders of three subsidiaries
—Arkansas Power & Light Co., Louisiana Power & Light
Co. and Mississippi Power & Light Co. Underwriter-

Equitable Securities Corp will serve as "dealer-man¬
ager." (See also listings of Arkansas, Louisiana and
Mississippi companies elsewhere in these columns.)
Middlesex Water Co., Newark, N. J.
Feb. 9 (letter of notification) 5,200 shares of common
stock offered to common stockholders at $50 per share
Co.

one-for-five basis.

/

Underwriter—Clark, Dodge &

Proceeds—To pay notes and for additional working

Indefinitely postponed.

capital.

Mffler ^(Waltar

It.)

Co.,

Inc.

March es

(letter of notification) 1,000 shares of 6%
'cumulative preferred stock at par ($100 per share). Un¬
derwriter—George D. B. Bonbright & Co., Binghamton
N Y. Proceeds—To assist in acquisition of 1216 share*
ft* company's common stock.
■

•

Oct.

Milwaukee Gas Light Co.

2

(10/31)

filed

$27,000,000 of first mortgage bonds, series
due 1975. and $6,000,000 of sinking fund debentures due
'Nov. 1, 1970. Underwriters—To be determined by com-

petitive'bidding. Probable bidders: Halsey, Stuart & Co.

program.
31

Mission

(EST)

on

Oct.

Hawthorne, Calif.

Mississippi Power & Light Co.
May 23 filed 85,000 shares of cumulative preferred stock
(par 100). Proceeds—To be used to redeem at $110 per
share plus dividends, the outstanding 44,476 shares of $6
preferred stock and for construction and other corpo¬
rate purposes. Bids—Received by company up to noon
(EDT) on June 19 but rejected. Four bids were made
as
follows:
Union Securities Corp., $100.10 per share
with a $4.80 dividend; Lehman Brothers, $100,551 with
a $4.85 div.; W. C. Langley & Co. and First Boston Corp
(jointly), $100.30 with a $4.90 dividend; and Blyth & Co.,
Inc., Equitable Securities Corp., Shields & Co., White,
Weld & Co. and Kidder, Peabody & Co. (jointly), $100.19
with a $4.90 dividend. Statement effective June 12. No
r

(

Radio & Television Corp.

(10/16)

Inc.; Glore, Forgan & Co.; and Lehman Brothers (joint.

Sept. 8 (letter of notification) 600,000 shares of common

ly); Kidder, Peabody & Co.; Harriman Ripley & Co.; Otis
& Co.; Smith, Barney & Co., Kuhn, Loeb & Co. and
Blyth & Co., Inc. (jointly). Proceeds — From sale of
bonds and debentures, together with $3,000,000 to be re¬

Under¬
Martin Co., New York.
Purpose—
For expansion and working capital.
Office—2430 At¬
lantic Avenue, Brooklyn 7, N. Y.
Expected week of

ceived

from

sale

of

new

common

stock

to

American

Natural Gas Co., the parent, will be used to pay off $13,-

334,000 outstanding 4J/2% first mortgage bonds due 1967
and $4,050,000 of 23/4%-3% serial notes and $6,100,000 of
bank loan

notes;

to retire $2,000,000

of

7%

cumulative

preferred stock, series A (par $100); and for construction




stock

(par 5 cents).

Price—50 cents per share.

writer—George J.

Oct.

16.

Montana

Power

Co.

(10/30)

Sept. 25 filed $10,000,000 of 25-year sinking fund deben¬
tures due Oct. 1, 1975. Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co.

(letter

stock

Vice-President of

the company.

Underwriter—Faroll

& Tracy and Shields & Co., Chicago.

27

Power Co.

(10/24)

filed

Ohio

(10/11)

Sept. 15 filed 396,571 additional shares of common stock
(par $8) to be offered to common stockholders of record
Oct. 11, 1950 at rate of one share for each 10 shares held,
with an oversubscription privilege; rights to expire on
Oct. 30, 1950. Underwriters—To be determined by com¬
petitive

bidding

for,purchase of unsubscribed shares,

plus such number—not in excess of 39,657—of additional
shares, if any, to stabilize market.
Probable bidders.

Morgan Stanley & Co. and White, Weld & Co. (jointly);
Lehman Brothers and Bear, Stearns

First Boston Corp.;

(jointly); Merrill Lynch, Pierce, Fenner & Beane
Kidder, Peabody & Co. (jointly); Glore, Forgan &

& Co.
and

Proceeds—For construction program and to increase
investment in common stock of Pennsylvania Power Co.,

Co.

a

subsidiary. Bids—To be received up to 11 a.m. (EST)

on

Oct.

11.

„

Ohio Oil & Gas Co.

May 5
stock

(letter of notification)

now

1,100 shares of common

held in treasury.
Price—50 cents per share.
To be offered through Preston,

Underwriter—None.
Watt

and

Schoyer.

Proceeds—Toward repayment of

bank loans.

Orchards Telephone Co.,

Orchards, Wash.
(letter of notification) 500 shares of common
Price—At par ($100 per share). Underwriter—
Proceeds—To modernize plant.

March 16
stock.

None.

•

•
Modern Gold Dredging Co., Spokane, Wash.
Sept. 15 (letter of notification) 1,000,000 shs. of common
stock. Price—At par (10 cents per share). Underwriter—
None.
Proceeds—For placer operation.
Office—922 W.
Riverside Ave., Spokane, Wash.

Monarch

;

Illinois Coal

Ohio Edison Co., Akron,

July 24 filed 50,000 shares of 6% cumulative convertible
preferred stock. Price—At par ($20 per share). Under¬
writer—Lester & Co., Los Angeles, Calif. Proceeds—To
retire bank loans and install machinery and equipment
in a proposed new plant to be located east of the Rocky
Mountains. Business—Manufacturer of gas and electric
water and space heaters.

further decision reached.

proposes

scheduled to be opened Oct. 24.

Common

165 Broadway, New York, N. Y.

Appliance Corp.,

(owner of
to purchase

Association

Electric

—

1950

a.m.

&

175,000 shares of cumulative preferred
stock (no par).
Underwriters—To be determined by
competitive bidding. Probable bidders—Lehman Broth¬
ers
and Riter & Co. (jointly); Smith, Barney & Co.
Proceeds
For new construction. Bids — Tentatively

1950

Bids—To be opened at 11

at office of parent,

(par $25)

stockholders of record June 14,

share for each 25 shares then held.

Northern States

common

of

10

Sept.

Bonds

4,

one

Gas

22.

& CO., Rogers

1950

Minnesota Power & Light Co.—

Canton, O.

a

December

other

C.
par.) To
$1,000,000 at $5,000
per share. No underwriter. Proceeds to be used to ex¬
plore and develop oil and mineral leases. Statement ef¬

a

Preferred

27,

and

Corp., Chilagd
of notification) up to 2,000 shares of
(no par) to be sold at the market price
(between $20 and $22 per share) by T. Howard Green,

Bonds

Kansas Gas & Electric Co

Proceeds—To five selling

Sept. 25 at rate of one share for each five shares held;
rights to expire Oct. 21.
Price—At par ($4 per share).
Underwriter—None. Proceeds—To pay promissory notes
and
for
plant improvement.
Office—Renkert Bldg.,

on

20,

common

of the outstanding stock)

common

1950

Lfluisiana Power & Light Co

Kansas Gas & Electric Co

stockholders.

stock

14,

Anahist

of

shares not subscribed for by others: Price—$67.50
share. Proceeds—To finance property additions.

May
Common

November
^

■

Metropolitan Brick, Inc., Canton, Ohio
Aug. 29 (letter of notification) 50,820 shares of

England

fective May

1950

Kansas Gas & Electric Co

Underwriter—Brokers and/or

dealers may be underwriters:

13,

Production

—

Offering—Expected week of Oct. 16.

basis of

Northern

November

Proceeds—To

offer only sufficient shares to raise

Milwaukee Gas Light Co., 11 a.m. (EST)Debentures
Milwaukee Gas Light Co., 11 a.m. (EST)
.Bonds

&

Minn.

March 28 filed 600 shares of capital stock (no

Debentures

October

Minneapolis,

Norlina Oil Development Co., Washington, D.

30, 1950

Montana Power Co

California, Newhall, Calif.

McDonnell Aircraft Corp., St. Louis, Mo.
Sept. 27 filed 40,000 shares of common fctock (par $1).
Price—At market (estimated at $35.50 per share) to be
.offered

any

per

Equip. Trust Ctfs.

October

Co.,

Business

on

New

25, 1950

I

No

Bielfield, Inc., Frederick, Md.
Sept. 22 (letter of notification) 2,250 shares of common
stock (par $10). Price — $15 per share/Underwriter—
None.
Proceeds—rTo purchase printing- equipment and***
pay bank loans. Office—West Seventh Street, Frederick,
Maryland.

1950

Preferred

Co

October
Wabash

&

Daift

Investment Co.

97.37%

May 31 (letter of notification) 282,250 shares of capital
Price—At par ($1 per share). Underwriter—Floyd
A. Allen & Co., Inc., Los Angeles, Calif. Proceeds—To
buy land, build a plant and equip it to produce so-called
"impact" plastics. Office—244 S. Pine St., Newhall, Calif.
•

M.

to be offered to

Debentures
Preferred & Common

(EST)

a.m.

one

Minn.

New Bedford Gas & Edison Light Co.
Sept. 14 filed 10,631 shares of common stock

Bonds

stock.

•

Co.,

(EST)

a.m.

further decision reached.
Loven

Preferred

Power

Kaiser Steel Corp
Northern States Power

Corp., $100.40 per share with a $4.65
Co., Inc., and Equitable Securities

&

Corp. (jointly), $100.10 with a $4.65 dividend; and W. C
Langley & Co. and First Boston Corp. (jointly), $100.30
with

Common

,

24, 1950

Co

Electric

of

New Bedford Gas & Edison Light Co.
(10/17)
Sept. 14 filed $3,750,000 of 25-year notes, series B, due
Oct. 1, 1975. Underwriter—To be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; Coffin & Burr and F. S. Moseley & Co. (jointly);
Kidder* Peabody & Co.; Harriman Ripley & Co., Inc.;
First Boston Corp.; Whiting, Weeks & Stubbs. Proceeds
—To repay bank loans.
Bids—To be received up to
11:30 a.m. (EST) on Oct. 17.

California Electric Power Co.,

on

as

Power

California

vidend

Co., Minneapolis,

pharmaceuticals.

23, 1950

October

rate

(letter of notification) 3,000 shares of common
Price—From $17 to $20 per share. Underwriter—

holders.

Equip. Trust Ctfs.

Tide Water Power Co

ay 23 filed 90,000 shares of preferred stock (par $100),
roceeds—To be used to redeem, at $110 per shart plus

19,

Notes

Chicago, Milwaukee, St. Paul &
Pacific RR., noon (CST)
Equip. Trust Ctfs.
Standard Railway Equipment Mfg. Co.—.Common

Co., Portland, Ore.
(letter of notification) 500 shares of common
Price—At par ($100 per share).
Underwriter—
Proceeds—For working capital. Office—622 S. E.
Avenue, Portland 14, Ore.

at

Nepera Chemical Co. (10/16-21)
Sept. 28 filed 490,000 shares of common stock (par $2).
Price—To be filed by amendment.
Underwriter—Rey¬
nolds & Co., New York. Proceeds—To five selling stocks

Bonds

1950

Chesapeake & Ohio Ry

(par $5),

stock

common

stockholders

•

(EST)

a.m.

October 18,

Loc-Bloc Machine

rand

J.

1950

Associated Telephone Co., Ltd.—
New Bedford Gas & Edison Light Co.,

Proceeds—For

common

Nash-Finch
stock.

Common

[par $2] and 50 cents in cash for each

to

Sept. 11

___Common

(N. Y.) Telephone Corp.
October 17,

ept. 28
'one.

Common

Finch

0, N. Y.

tock.

(EST)

Rochester

$2.50) to be offered to common stockholders of
ecord Sept. 6, with rights expiring Oct. 15.
Price—
2.50 per share (payable as to 64,321 shares at rate of
Underwriter—None.

11, 1950

a.m.

Nepera Chemical Co

par

share

11

offered

Multnomah Plywood Corp., Portland, Ore.
Sept. 18 filed 160 shares of common stock.
Price—At
par ($2,500 per share). Underwriter—None.
Proceeds—
For costs involved in completion and expansion of plant
and for working capital.

Common

Monarch Radio & Television Corp

ept. 7 (letter of notification) 100,000 shares of 6% cuulative
(if earned) and convertible preferred stock

share.

Common

Co.__

October 16, 1950

withdrawn.

eferred

Bonds

10, 1950

October
Ohio Edison Co.,

Lancaster Processes, Inc., N. Y. City

ne common

Common

(EST)

noon

Co.

Manufacturing

the Syndicate.

een

Co._—

Co.,

be

held, with an oversubscription
privilege. Price—At par. Underwriter—None. Proceeds
—To invest proceeds in its wholly-owned subsidiary,
National Industrial Credit Corp., which will use the
funds to discharge an indebtedness to American General
Corp.
I

Calif.

interest in mineral rights in Arizona property

y

to

Common

Insurance

Utah Power & Light

America, New York

Sept. 21 filed 389,449 shares of
share for each four shares

Family Finance Corp

pt. 25 (letter of notification) $131,200 of units (64 of
1,000 each and 48 of $1,400 each), each unit representing
n

Common
debentures

October 9, 1950

;

—

Morris Plan of

Pacific Power & Light Co.—
Vanadium Corp. of America

Kaye-Halbert Corp., Culver City, Calif.
uly 28 filed 100,000 shares of class A common stock
par $1). Price—$5 per share. Underwriter—Sills, Fairan &
Harris, Inc., Chicago, 111. Proceeds—For working
apital.
'"'V'.;'
"
,/v]; '■

Fresno,

Smith, Barney & Co. (jointly); Lehman Brothers.
To repay bank loans and for expansion and
extension of gas and electric properties. Bids—To be in¬
vited Oct. 20 and opened Oct. 30.

Proceeds

NEW ISSUE CALENDAR

banks, will be used to retire
FC loans and for expansion program.

Kipling Syndicate,

51

Lynch, Pierce, Fenner & Beane; Kidder, Peabody & Co.

Underwriter—The First Boston Corp., New York,

roceeds—From the sale of the units,

(1335)

V

Inc.; Blyth & Co.; Union Securities Corp.; Merrill

Pacific Power & Light

Co.

(10/6)

Aug. 30 filed 1,750,000 shares of common stock (no

par),

representing all of the outstanding shares of the company
to be sold by a group of 16 stockholders headed by A. C.
Allyn & Co., Inc. and Bear, Stearns & Co. (Oct. 2, it was
announced amount involved will be 1,078,754, as certain
stockholders have decided not to sell their holdings).
Underwriters—Lehman Brothers, Union Securities

Corp.,

handling books, and Dean Witter & Co. Price — To be
filed by amendment.
A public offering price is antici¬
pated of $14 per share. Offering—Expected tomorrow
(Oct. 6).
Packard-Bell

Sept.

Co., Los Angeles,

Calif.

20 filed 135,666 shares of capital stock (par 50
Price—To be filed by amendment. Underwriters

cents).

—Hill, Richards & Co., Los Angeles, Calif.

Continued

Proceeds—
52

on paqe

\

52

The Commercial and Financial Chronicle

(1336)

Continued

from

stock.

51

page

selling stockholders. Business — Manufacturing
of television, radio and phonograph combina¬

To two

sale

and

tions.

Perlite Mines

Co., Denver, Colo.

$150,000 of 5V2% de¬
benture certificates due 1955 (in denominations of $500
each) and 30,000 shares of common stock (no par).
Price—For certificates,
$400 each; for stock, $1 per
share
Underwriter—Robert D. Bowers & Co., Denver.
Proceeds—For working capital.
10

Aug.

(letter

of

notification)

Moore

•

Philadelphia Dressed Beef Co.
18 (letter of notification) $100,000 of 10-year 6%
■debentures, series W, and 20,000 shares of 7 % cumulative
preferred stock (par $10).
Price—At par. Underwriter
—None.
Proceeds—For working capital, plant expan¬
and

sion

Prudential

Fire

Co., Los Angeles, Calif.
Sept. 25 (letter of notification) 7,000 shares of common
stock to be offered to employees of company.
Price—
$6.50 per share. Underwriter — None. Proceeds — For
working capital. Office—4510 Colorado Blvd., Los An¬
geles, Calif.

Insurance

Co.

Aug. 30 (letter of notification) 50,000 shares of common
two-for-one

rights

basis,

expiring

oversubscription privilege;
Price—$6 per share. Under¬

with

an

13.

Oct.

writer—None/Proceeds—To

multiple line

increase

capital to become

Office—Braniff Bldg., Oklahoma

company.

City, Okla.

I

Quaker City Fire & Marine Insurance Co.
Aug. 2 (letter of notification) 10,000 shares of capital
stock (par $20) to be offered on a one-for-four basis to
stockholders of record Oct. 20, 1950, with the rights
expiring Dec. 4, 1950.
Price—$25 per share.
Under¬
writer— Unsubscribed
shares
to
be
offered
publicly
through Burton, Cluett and Dana, 120 Broadway, New
York, N. Y.
Proceeds—For working capital.
Office—
■

4*

226 Walnut

Street, Philadelphia 6, Pa.

Ramie Products Corp.
Sept. 21 (letter of notification) 25,000 shares of common
stock
(par $1).
Price—$3 per share.
Underwriter—
Smith, Talbott & Sharpe, Pittsburgh, Pa.
Proceeds—
For

purchase of additional machinery and equipment and
working capital.
Office—507 Liberty Avenue, Pitts¬
burgh 22, Pa.
•

Reliance

Electrical

common

stock (par $5) to be sold to employees under an Em¬
ployees Stock Option Plan. Price—At the market, less a
Ivanhoe

Proceeds—For working capital.
Road, N. E., Cleveland, O.

Rochester
June 29 filed

(N. Y.)

common

(10/16)

stock

to be offered to present stockholders at rate of one new

Price—To be filed by amend¬
Underwriter—The First Boston Corp., New York.
Proceeds—For general corporate purposes, including con¬

ment.

struction and repayment of a loan.

Rocky Mountain Textile Mills, Inc.
July 11 (letter of notification) $150,000 of 5% convert¬
ible sinking fund debentures, due 1960, and 15,000 shares
of common stock (par $10), to be sold separately or in
units of one $1,000 debenture and 100 shares of stock.

Price—Separately, at par, and in units, at $2,000 each.
Underwriters—Boettcher & Co. and Peters, Writer &
Christensen, Inc., Denver, Col. Proceeds—For new ma¬
chinery, equipment and working capital. May be placed
semi-privately.
Safeway Stores, Inc.
12 (by amendment)

filed

110,000

shares

of

4%

preferred stock (par $100) and 257,064 shares of common
(par $5), the latter issue to be offered for sub¬
scription by common stockholders of record Sept. 21 at
.stock

<)

the rate of

one

share for each

10

shares

expire Oct. 5. Price—For preferred, $100
accrued

dividends and

for

$28

common,

share and

per

share Un¬

per

repay

$20,000,000 term bank loans. Statement effective Sept. 21.
Seneca Oil

Co., Oklahoma City, Okla.
April 27 (letter of notification) 225,782 shares of class A
<ssock (par 500).
Price—$1.25 per share. Underwriter—
•Genesee Valley Securities
Co., Rochester, N. Y. Proceeds
—To acquire properties and for
working capital.
•

Shakespeare Co., Kalamazoo, Mich.
Sept. 27 (letter of notification) 3,083 9/10 shares of
common stock
(par $5). Price—$16.25 per share.
Un¬
derwriter—Smith, Hague & Co., Detroit, Mich. Proceeds
—To Johh W. Shakespeare of
Centralia, 111., the selling

Southern

Sierra

;

Pacific

Power

common

shares

writers—For
were

Oct.

1,

$15), the

being offered

pro rata to

held;

preferred and

on

one

basis of
share

rights to expire Oct.

debentures:

awarded this issue

one

com¬

share

for each

19.

12

Under¬

Kidder, Peabody & Co.,. who

on

Oct. 3

on

their bid of 100 791

Underwriter for stock: Stone & Webster Securities
Corp.
Dean Witter & Co. Price—For

and

Proceeds

struction.

stock, $21 per share.
bank loans and to finance new con¬
Statement effective Sept. 25.
To

pay

Simmel-Meservey Television
June 29 (letter of
stock
(par $1).

Koellmer &

Productions,

Inc.

notification) 150,000 shares of common
Price—$2 per share.
Underwriter—
Gunther, Newark, N. J. Proceeds—To com¬

plete films in progress and for general corporate pur¬
poses.
Office—321 So. Beverly Drive, Beverly Hills
Calif.
•

Corp.
Sept. 28 (letter of notification) 20,000 shares of

(extended from

20

Oct.

tal.

Office—220
Standard

loans

.

Oct. 3 it

for

and

working capi¬

Healey Bldg., Atlanta, Ga.

Railway Equipment Mfg. Co.

Sept. 27 filed 160,000 shares of

(10/18)
(par $1).
Underwriters—Smith,
stock

common

Price—To be filed by amendment.

Barney & Co., New York, and The Illinois Co., Chicago.
Proceeds—To six selling stockholders.
•
Technical Fund, Inc., San Francisco, Calif.
Sept. 28 filed 680,375 shares of common stock (par $1).
Price—To be based on market value of portfolio secur¬
ities.
Underwriter—Technical Fund Distributors. Busi¬

ness—Investment trust.

Tennessee Gas Transmission Co., Houston, Tex.

Aug. 28 filed 133,334 shares of common stock (par $5) to
be issued in exchange for 80,000 shares of common stock
of Sterling Oil & Gas Co., and for 10-year subscription
warrants to purchase 133,333 shares of Sterling common
stock. The rate of exchange is as follows:
Tennessee

stock

for

Ws

shares of

each

Tennessee share for each

Sterling share; and one-fifth
warrant. Offer to expire Oct. 6,

unless extended. Exchange Agent—The National Bank of

Commerce of Houston, Tex.
Tide

Water

Statement effective Sept. 22.

Power Co.

Price—To be filed by amendment.
Securities Corp. and W. C. Langley
construction

Oct.

& Co.

of

share

for

common

each

three

stock (par $4), to
shares

held, with

oversubscription privilege. Price—To be filed by amend¬
ment.

Underwriter—McDonald-Moore

Co., Detroit. Pro¬
general corporate purposes. Expected early

ceeds—For

this

month.

Bender Corp., Omaha, Neb. Proceeds—For dial conver¬
sion and other corporate purposes.

United States Plywood
Corp.
19 filed 60,000 shares of series B cumulative con¬
vertible preferred stock (par $100). Underwriter—East¬

June

Dillon &

Co., New York. Price—To be filed by
amendment along with dividend rate. Proceeds—To in¬
crease working capital and for other
corporate purposes
including the erection of a new plant at Anderson. Calif
Application to withdraw this statement was filed Sept.
28.

In

interim

the

arrangements

have

been

place privately with a group of insurance
$3,000,000 of 3% 15-year debentures.
Utah

Aug.

2

made

to

companies

& Light Co.
(10/9)
$8,000,000 first mortgage bonds

Brothers and Bear, Stearns & Co.
(jointly); Union Secur¬
ities Corp. and Smith, Barney & Co. (jointly); First Bos¬
ton

Corp. and Blyth & Co., Inc.; Harriman Ripley & Co.,
Inc.; Kidder, Peabody & Co.; White, We^c&^Qo.'; Salo¬
Bros.

&

Hutzler.

Proceeds—For

Bids—To be received

gram.

up

to

construction

noon

(EST)

on

pro¬

Oct. 9

by company at Room

1854, No. 2 Rector St., New York
Statement effective Aug. 30.

6, N. Y.
•

Vanadium-Alloys Steel Co.
Sept. 28 (letter of notification) 2,500 shares of capital
stock

$38.50

(no par) to be offered to employees. Price—About
per share.
Proceeds—For working capital.
14 filed

Oct. 1

1965.

of America

(10/6)

$5,000,000 of convertible debentures, due

Price—To be supplied by amendment.

derwriter—Kidder, Peabody & Co., New York.

Un¬

Proceeds

Vieh

Co., Columbus, Ohio
(letter of notification) 19,500 shares of commoD
stock at $10 per share. Underwriter—The Ohio Co. Pro¬
ceeds—To buy the assets of Brodhead-Garrett Co. and
for working capital.
May 8

Western

Sept. 22 filed

Natural

100,000

Gas

Chicago, Milw., St. Paul & Pacific RR. (10/18|
was announced company will issue $5,430,000
(j
equipment trust certificates, series MM, to be dated Nof
1, 1950 and mature in semi-annual instalments of $181/
000 each from May 1, 1951 to Nov. 1, 1965, inclusive
Probable bidders: Halsey, Stuart & Co. Inc.; Salomo/
Bros. & Hutzler; Harris, Hall & Co.
(Inc.)/ Harrimai
Ripley & Co., Inc. and Lehman Brothers (jointly). Bid
—To be opened at noon (CST) on Oct. 18 at company!;

office, Room 744, Union Station Building, Chicago 6, II
Cleveland

Aug. 1 it

Proceeds—To

corporate

shares of

common

stock

(par $1)

retire

bank

loans

and

for

general

Woodland Chemical Corp., New York
Sept. 28 (letter of notification) 240,000 shares

Price—$1

amendment.

New

of

York, N. Y.

*

'

stock, of which

495,01
shares of no par value are presently available, stock
holders on April 25 having increased the authorize/
amount to

The

750,000 shares from 500,000 shares.

pro

to be used for construction program.

Probabl
underwriter: Dillon, Read & Co. Inc. if negotiated salt

ceeds

are

Colorado

Fuel

&

Iron

Corp.

announced company has purchased a 179
tract of land adjoining its Wickwire Spencer Stee

Sept. 22 it
acre

division

was

plant at Buffalo, N. Y., for the purpose of ex¬

pansion. Traditional underwriter: Allen & Co., New York
Edison

Co.

New

of

will

York,

Inc.

i

require approximately $90,000,000 of "new money!

through the sale of securities. No permanent financing
contemplated before this fall, however, and current ex

penditures are being financed by short-term loans, d
which $16,000,000 are now outstanding.
It is anticipated
that $257,000,000 will be needed for

the construction pro ¬
the next four years. Probable bidders: Hal
sey,
Stuart & Co. Iqc.; Morgan Stanley & Co.; Firs/
Boston Corp.
■ /
'
;
over

.

Consolidated

Lobster

Co.,

Inc.

was stated that company plans to offer addij
capital stock (no par) for subscription by stock/
holders. At April 30, 1950 there were outstanding 34,<
393 shares out of 47,000 shares authorized.

Aug. 11 it
tional

Dostal

Foundry & Machine Co.

Sept. 12 it was reported company plans to sell in mid<;
October 84,000 shares of common stock.
Underwriters—;

Smith, Hague & Co.; George McDowell & Co.; and R. H
Johnson & Co.
•

Eastern

Sept.

Gas

SEC

7

and

Fuel

authorized

Associates

Koppers

Co.,

acquire

to

Inc.,

563,347 382/1,000 shares of new common stock pf Eastern

latter's plan of recapitalization
sever

its

relation^

ship with Eastern'and its subsidiaries by disposing of all"
shares of the new common stock of Eastern. Sale report/
ed not imminent. Latter's financial adviser is The Firsi
.

Boston

El

Corp.
Electric

Paso

Co.

Sept. 19, F. C. Womack, President, announced company

plans to sell $4,500,000 of first mortgage bonds. Under¬
writers
To be determined by competitive bidding.
—

bidders:

Probable

Halsey,

Webster Securities

and

&

Co.

Stone

Inc.;

&

Salomon Bros. & Hutzler.' Proceeds — To
of 3V2% bonds due 1978 and for

Beane;

redeem

Stuart

Corp.; Merrill Lynch, Pierce, Fenner

$1,000,000

construction program.

Florida

Offering—Expected in November,

Power &

Light Co.
approved creation of 50,000 shares
$4.50 cumulative preferred stock (par $100). Th
shares are soon expected to be offered to finance part
construction program which is expected to require ap
proximately $25,000,000 new capital through 1952.

June 9 stockholders

Georgia Natural Gas Co., Albany, Ga.
Aug. 2 filed new application with FPC for authority to
a
335-mile pipeline system in Georgia an'

construct

Florida

to

nanced

through

about

cost

bonds

and
was

the

$5,100,000, which would be fi¬
of first mortgage /pipe-line

issuance

sale

of

common

stock.

withdrawn.

Previous
;

.

Georgia Power Co.
Sept. 14 it was learned that
the

SEC

company

appli¬
,

f

*

has discussed with

the

possibility of refunding its ,433,869 shares
of $6 cumulative preferred stock and 14,570 shares of $5
Probable bidders: Blyth &

per

Harriman

(par

10

share.; Underwriter—To be named

Proceeds—For

program

Illuminating Co.

preferred

cumulative preferred stock with a new lower cost issue.

purposes.

•

cents).

issue

an

Houston, Tex.

to be offered to holders of present
outstanding common
stock. Price—To be filed by amendment. Underwriter—
None.

sell

and

Electric

reported that company this fall may issu<

was

cation

Co.,

|

•

Oct. 2 it

of

—For plant modernization.

by

Harris, Hall & Co. (Inc.); Salomon Bros. & Hutzler. '

subject to the condition that Koppers
1980

due

Underwriters—To be determined by competitive bidding
Probable bidders: Halsey, Stuart & Co. Inc.; Lehman

mon

was

Gas (21.8%), pursuant to

Power

filed

prograr/

(10/18)
|
reported company is expected to se
about Oct.
18 an issue of $7,950,000 equipment trui
certificates. Probable bidders: Halsey, Stuart & Co. Inc
it

25

gram

•
Union Telephone Co., Blair, Neb.
Sept. 25 (letter of notification) $100,000 of first mortgage
3%% bonds.
Price—At 103%.
Underwriter—Wachob-

man,

Proceeds will be used for expansion

May 15, Ralph H. Tapscott, Chairman, said the company

(Mich.)

stockholders of record Sept. 29 at

common

one

f

reported that this company will be in tl

was

Consolidated

rate

'

Light Co.

Chesapeake & Ohio Ry.

23.

Union Investment Co. of Detroit

the

Proceeds—

Offering—Expected week of

program.

&

Power

market, probably in December, with an offering of $15
000.000 of new bonds. Previous debt financing plac<

•

(10/23-28)
Sept. 27 filed 150,000 shares of common stock

For

shares,

45,000,000

Carolina

Sept.

bank

and

merchandising and ad¬
working capital.
Business —

Manufacturers of toiletries.
common

debentures

increase in authorized capital stock fro;

an

to

privately.

vertising

Skiatron




35,000,000

Atlanta, Ga.
Sept. 18 (letter of notification) $191,500 of 5% subordin¬
debentures, series E. Price—At par. Underwriter—
For $100,000 of debentures, Allen &
Co., Lakeland, Fla.

Sept.

Co.

mon, stockholders of record
Oct. 3
for each six preferred shares and

on

Discount Co.,

Vanadium Corp.

1 filed $2,500,000 of 3%% debentures due
and 24,716 shares of common stock
(par

latter issue

expire

ated

stockholder.

1975

to

Sept. 22). Statement effective Aug. 29.

held; rights to

derwriter—Merrill Lynch, Pierce, Fenner & Beane. Pro¬
ceeds—Together with other funds, will be used to

Sept.

holders) and

vote_ No/

issue of not to exceed $435,000;
(to be offered to stoc|

a new

•

Offer

be offered to

$10)

(par

announced stockholders will

convertible

of

derwriter.

Sept. 11 filed 55,865 shares of

■share for each four held.

Sept.

000

July 28 filed 818,415 shares of common stock (par $5)
offered in exchange for 545,610 shares of common stock
of Birmingham Electric Co. on a iy2-for-l basis. No un¬

Office—1088

Telephone Corp.

125,000 shares of

Telephone & Telegraph Co.

was

approving

on

3,000,000 shares of tf
employees of the com¬
pany and its subsidiaries. Financing expected some tirr
during the first six months of 1951. Proceeds—For ei
pansion program.
*
.I f

(no par).
Underwriters—Union

&

Engineering Co.
Sept. 26 (letter of notification) 20,000 shares of

discount.

15

additional stock to be offered to

Southern Co.

(par $4) offered first to present stockholders on a

stock

Sept. 20 it

Proceeds—To reduce

Street, Phila¬

Office—114 Moore

equipment.
delphia 48, Pa.

19}

Prospective Offerings
American

Smart & Final

.

Sept.

Thursday, October 5,

.

.

Price—75

cents per share.
Underwriter—Frank
Co., New York. Proceeds—To Arthur Levey,
President, the selling stockholder.
C.

.

Office—69 West 46th Street,

•

Gulf

Oct.

2

and

sell

Co., Inc.; First Boston Corp/
Ripley & Co., Inc.

Power

company

Co.

requested

lative

SEC

authorization

to

issue

exchange 11,026 shares of new preferred
11,026 outstanding shares of $6 cumu-i
preferred stock (no par) at a lower dividend
or

stock td refund the

lume 172

Number 4948

.

.

The Commercial and Financial Chronicle

.

Light Co., which was authorized by SEC on Sept. 7.
Initially
it
is planned
to sell $800,000
stock
and
$1,500,000 of bonds. Underwriter for Stock—Equitable
Securities Corp., T. J. Raney & Sons and Womeldorff &
Lindsay.

te, and to issue and sell an additional 40,000 shares of
w preferred stock to provide a portion of the funds
quired for its expansion program. Underwriters—To
determined by competitive bidding. Probable bidders:
yth & Co., Inc.; Kidder, Peabody & Co. and White,
eld & Co. (jointly); Salomon Bros. & Hutzler; Harrin Ripley & Co., Inc.
Expected before end of year.
Gulf States

•

stock

Utilities Co.

First Boston Corp. and Blyth & Co.,
(jointly); White, Weld & Co.; Kidder, Peabody &
Co.; Lehman Brothers. Proceeds—For construction pro¬
Inc.

ihber, subject to approval of stockholders and FPC.
bable bidders:
Stone & Webster Securities Corp.;

gram.

hman Brothers and Equitable Securities Corp. (joint-

Mountain

); Union Securities Corp.; First Boston Corp.; Blyth &
Inc.; Glore, Forgan & Co. and W. C. Langley & Co.
ointly); Carl M. Loeb, Rhoades & Co., and Lee Hignson Corp. (jointly).
ct.

Hussman Refrigerator Co.
6 stockholders will vote on

creating $1,600,000

to take

of

Mountain

o.

Utilities Co.

said to plan sale of first mortgage
$3,200,000 construction pro-

company

nds to finance part of its

Probable underwriter:

for 1950.

am

Johansen

Brothers Shoe Co.

11

proposal to issue and

on

Lynch, Pierce, Fenner
Langley & Co.

(11/13-20-27)

public of 75,000 shares of new

to
preferred stock (par

100), of 45,000 additional shares of

common

•

stock (no

) and $5,000,000 of first mortgage bonds. The divion the preferred stock has not yet been deUnderwriters—To

be

determined

by

com-

titive

bidding.
Probable bidders: (1) For all three
ues: Blyth & Co., Inc. and First Boston Corp. (jointly);
nion Securities Corp.; Merrill Lynch, Pierce, Fenner
d

nd the

and

bonds

Kidder,

on

Peabody &

27th.

the

-.'Louisiana

Power

&

Light Co.

*

(11/14)

was

Louisville Gas

&

Electric

Co.

ion

Gas & Electric
shares of comstock (no par) of Louisville Gas & Electric Co., and
the proceeds to retire $2,250,000 of bank notes,

se

'robable

bidders:

Lehman

Brothers

and

Blyth

&

Co.,

(jointly); First Boston Corp.; Glore, Forgan & Co.
W. C. Langley & Co.
(jointly); Merrill Lynch,
'ierce; Fenner & Beane, White, Weld & Co. and Union
iecurities Corp. (jointly). Expected in near future.

nc.

nd

Michigan Consolidated Gas Co.
Lug. 7 it was announced company contemplates pernanent financing will be consummated before maturity
Feb. 20,1951) of proposed $25,000,000 bank loans which
dll include, during 1950, $20,000,000 of first mortgage
>onds and $6,000,000 of common stock, and the sale, in
.951, of about $10,000,000 of preferred stock. Under¬
writers: For bonds and preferred to be determined by

bidders (1) For both
Halsey, Stuart & Co. Inc.; White, Weld & Co.
ind Lehman Brothers (jointly); Smith, Barney & Co.
jd Blyth & Co., Inc. (jointly). (2) For bonds only:
lalsey, Stuart & Co. Inc. Proceeds—To pay off shortjerm bank loans and for new construction costs. The ad¬
ditional common stock will be sold to American Natural
as Co., parent.
Bonds expected this morith and pre¬
ferred early in November.
ompetitive

bidding.

Probable

lasses:

Michigan-Wisconsin Pipe Line Co.
July 25 company received SEC authority to borrow not
jiore than $20,000,000 from banks. A permanent financprogram provides for the elimination of these bank
oans prior to their maturity, July 1, 1951, and such pro¬
gram will include the issuance and sale of $12,000,000
idditional bonds and $3,000,000 of additional common
itock. Previous debt financing was placed privately.
-

MidSouth

July 31

Gas Co.

it was announced that this newly

company may




(par $10). Probable underwriter: Glore, Forgan
Co., New York. The proceeds are to be used for car
rebuilding program.
&

North

Sept.

it

25

Gas

Penn

financing

announced

was

following

sidiaries

merger

plans permanent
the Pennsylvania sub¬
& Electric Corp., the

company

of

of

Pennsylvania Gas
parent. Proceeds—To retire, in part, proposed bank loans
of

$3,000,000.
Oklahoma

Gas

&

Electric

Co.

filed with the SEC, which provides,
in part, for the refunding of the outstanding $6,500,000
514% cumulative preferred stock (par $100) with an
equal par amount of preferred stock having a lower
Sept. 28

dividend

a

plan

rate

was

"as

soon

as

the transaction

becomes

eco¬

nomically sound," and to finance part of the company's
construction program by the issuance and sale of addi¬
tional common stock.
Stockholders will vote early in
November on changing each of the 1,076,900 shares of
$20 common stock now outstanding to two shares of
common stock, $10 par each; and on changing the 825,000
shares of authorized but unallotted shares, $20 par, of
4% cumulative preferred stock to 165,000 shares of $100
par cumulative preferred stock.
An underwriting syn¬
dicate headed by Harriman Ripley & Co., Inc. in April,
1948, offered publicly the 514% preferred stock issue.
Potomac

up

an

cost

time.

South Carolina Electric & Gas Co.

Aug. 17, S. C. McMeekin, President, said the company
expects to issue and sell later this year $3,000,000 ct
new bonds (in addition to
private placement of $3,000,000
of 4.60% cumulative preferred stock,, par
$50), the pro¬
finance

construction program.
Probable- bid¬
Halsey, Stuart & Co. Inc.; The First
Boston Corp. and Lehman Brothers
(jointly); Kidder,
Peabody & Co.; Union Securities Corp.
ders

to

for

bonds:

Southern California Petroleum

Corp.

Sept. 1, Tyler F. Woodward, President, announced that
stockholders should be given the opportunity of subscrib¬
ing for additional capital stock, the proceeds to be used
to develop the company's Cuyama Valley
holdings. Tb<T
offering would be underwritten.
South Georgia Natural Gas Co.,
Atlanta, Ga.
Aug. 23 company applied with FPC an amended applica¬
tion for authority to build a 526.9 miles pipe line in
Georgia and Florida which, it is estimated, will cost be¬
tween $10,500,000 and $12,080,000 to be financed
by sale
of first mortgage bonds and the issuance of junior secur¬

ities.

Probable underwriter: Courts & Co.

Southern

California

Edison Co.

Sept.

27, W. C. Mullendore, President, announced that
company will have to raise $50,000,000 in new capital
within the next
tion

18 months to finance its

Total financing

1951 construc¬

involve $55,000,000
in new bonds. Probable bidders: Halsey, Stuart & Co.
Inc.; Blyth & Co., Inc.; .The First Boston Corp. and
Harris, Hall & Co. (Inc.) (jointly); Shields & Co.
program.

may

Southern Natural Gas Co.

July 31 it

reported proposed financing on

was

a

perma¬

basis has been increased from $10,000,000 to $24,-

nent

000,000

first mortgage

bonds, although company may
decide to take this in two pieces, viz: $10,000,000 to $12,000,000 initially and the balance later on. On June 21
SEC approved temporary bank borrowings of up to $20,000,000 to mature July 1, 1951, the proceeds to be used
for construction program which is estimated to cost
$32,520,000 for
1950-1951.
Probable bidders: Halsey,
Stuart & Co. Inc.; Blyth & Co., Inc. and Kidder,
Peabody
&
Co.
(jointly); First Boston Corp.
Illinois Natural Gas Pipeline Co.
15 company applied to the FPC for authority t©
construct approximately 72 miles of new line in Texas
at an estimated cost of $11,581,800. It is planned to issue
first mortgage bonds for 75% of the required capital
and to raise the remaining 25% through the sale of com¬
Texas

underwriters—White, Weld &

Glore, Forgan & Co.

>

United Gas

Pipe Line Co.
July 25 filed with FPC for authority to build 1,130 miles
of new lines in Texas, Louisiana and Mississippi at a
cost of about $110,000,000, including new facilities. It :1s
probable that the bulk of this new capital will be raised
through the public sale of new securities,
e

United

States

Pipe Line Co.

(Del.)

Sept. 25, it was announced that this company had been
formed to

build, own and operate a petroleum products
pipeline from the Texas Gulf Coast to St. Louis, Chicago
and other midwest markets to operate as a "common
carrier."
Adequate financing has been arranged for, it
was said.
E. Holley Poe
apd Paul Ryan, of 70 Pine St,
New York, N. Y., are the principal officers of the cor¬
poration.
•

Wabash

Oct. 2

was

RR.

(10/25)

announced company is planning to issue $3,-

255,000 equipment trust certificates, to mature annually
on June 1 from 1951 to 1965, inclusive.
Probable bidders:

Co. Inc.; Harirs, Hall & Co. (Inc.);
and Lee Higginson Corp. (jointly);
Salomon Bros. & Hutzler. Bids—To be opened on Oct, 25.
Halsey,

Stuart

&

Brothers

Lehman

Warner-Hudnut, Inc.

was

$10,000,000.

Probable

stock.

mon

Edison Co.

announced company has decided to speed
expansion program, which, it is estimated, will

Sept. 20 it

at any

and

Co.

s

Public Service Electric & Gas Co.

17 stockholders approved the issuance of $90,000,000 new bonds for the purpose of refunding $50,000000 3y8% bonds due 1965; $10,000,000 314% bonds due
1968; $15,000,000 3% bonds due 1970 and $15,000,000
bonds due 1972.
Probable bidders: Halsey Stuart & Co.
Inc.; Morgan Stanley & Co. and Drexel & Co. (jointly);

April

change

July 20

&

Warner

in

company's

name

from

William 3L

Inc. was approved, but no action was
taken on proposed recapitalization plan, due to market
conditions. It is planned to file a registration with the
SEC

Co.,

covering the sale of approximately 325,000 shares

of the

proposed new common stock (par $1) to the pub¬

lic through a

nation-wide group of underwriters headed& Co., Inc.

by F. Eberstadt

Washington Water Power Co.

Kuhn, Loeb & Co. and Lehman Brothers (jointly); First

Sept. 8 it was announced that company plans issuance
of a new preferred stock issue and to carry out a con¬

Boston Corp.

struction

Roosevelt

Mills, Inc., Manchester, Conn.
July 20 company was reported to be negotiating with a
group of underwriters for a public stock offering of
about $150,000 of additional capital stock at $1 or $2
per share. There are presently outstanding 1,381 shares
are

closely held.

organized

issue and sell publicly $2,800,000 of com¬

stock and place privately with

Aug. 15 it was reported that the company is to issue and
sell publicly not exceeding 40,000 shares of common

'

con¬

Sept.

stock

of stock, which

institutional investors
$6900,000 of 20-year 3%% first mortgage bonds, the
proceeds to be used in connection with the acquisition
jfthe gas distribution properties of Arkansas Power &
mon

North American Car Corp.

Proceeds would go toward

Smith, Kline & French Laboratories.
Sept. 13 stockholders increased authorized common stock
from
1,000,000
shares
(no par)
to, 2,000,000
shares
(par $1).
Following split up of present outstanding
807,295 shares on a two-for-one basis/there will remain
unissued 385,410 shares of the new stock. The directors
were empowered to issue all or
part of the latter shares

•

New

•

.ug. 29, SEC was notified that Standard
!o. plans to sell its holdings of 137,857

preferred:

Oct. 1, 1980. Underwriters — To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Morgan Stanley & Co.; Kuhn, Loeb & Co.;
First Boston Corp. Proceeds-j-To pay off $20,000,000 of
bank loans, to refund $15,689,000 of Niagara Falls Power
Co. first and refunding mortgage bonds, V/z% series due
1966 (latter dependent upon approval of merger of two
companies by SEC and FPC), and for construction addi¬
tions and betterments.
Expected in November.

ex¬

reported the company is expected to be
the market for about $10,000,000 of bonds around midovember. Underwriters — To be determined by cometitive bidding. Probable bidders: Halsey, Stuart & Co.
ric.; Merrill Lynch, Pierce, Fenner & Beane and Kidder,
eabody & Co. (jointly); Kuhn, Loeb & Co. and Lehman
rothers (jointly); Blyth & Co., Inc.; Harriman, Ripley
Co., Inc.; Shields & Co. and White, Weld & Co. (joint); Salomon Bros. & Hutzler; W. C. Langley & Co., The
irst Boston Corp. and Glore, Forgan & Co. (jointly),
roceeds—For construction program. Bids—Expected to
e received up to noon ((EST) on Nov. 14.
Registration
Expected Oct. 10.

for

due

erted to be filed soon.
ept. 12 it

(3)

Niagara Mohawk Power Corp.
Sept. 28 company applied to SEC for authority to issue
and sell $40,000,000 of general mortgage bonds, series

Co.

Registration statement

Beane;

•

(jointly); (2)
n
preferred and common: Lehman Brothers; (3) on
mmon stock only:
Glore, Forgan & Co.; (4) on prerred stock only: White, Weld & Co. and Shields & Co.
jointly); (5) On bonds only: Halsey, Stuart & Co. Inc.
roceeds—To pay construction costs, amounting to about
19,500,000 through 1952.
Offering—Expected in Noexnber, the common on the 13th; preferred on the 20th
Beane

&

Hampshire Electric Co.
Sept. 7 company applied for authority to issue 15,000
shares of $4.50 preferred stock (par $100) and 140,000
shares of common stock (no par) which are to be ex¬
changed for presently outstanding 150,000 shares of com¬
mon stock (no par) held by New England Gas & Electric
Association.
Latter plans to dispose of this investment
prior to Sept. 1, 1951.

end rate

rmined.

Probable bidders: (1) For

W. C.

ept. 21 the directors tentatively approved tne sale
e

preferred stock.

bonds—Halsey, Stuart & Co., Inc. (2) for bonds and pre¬
ferred: Harriman Ripley & Co. Inc.; Lehman Brothers;
Kidder, Peabody & Co.; First Boston Corp.; Merrill

icolaus & Co.
Kansas Gas & Electric Co.

was

000 shares of

sinking fund debentures due 1960.
3*4% debentures and for
corporate purposes. Traditional underwriter: Stifel,

$350,000 of 4%

roceeds to retire outstanding
her

it

New England Power Co.
April 24 it was estimated that about $37,000,000 new
financing will be required to pay construction costs
estimated at $40,000,000 for 1950 to 1952. Present plans
are to issue this Fall $10,000,000 bonds and 70,000 to 80,-

The First Boston

rp.

ct. 25 stockholders will vote

23

& Hutzler.

Bros.

struction program.

ceeds

States Power Co.

reported that company is considering
issuance of additional preferred stock (par $50), of which
there are authorized and unissued 77,007 shares. Under¬
writer—May be Merrill Lynch, Pierce, Fenner & Beane.
Proceeds—To retire $1,250,000 bank loans maturing Oct.
3, 1950, and for expansion program.

Aug.

may handle financing. If competitive, probable
bidders are: Blyth & Co., Inc.; Lehman Brothers and
Bear, Stearns & Co. (jointly); First Boston Corp.; White.
Weld & Co. and Shields & Co. (jointly); Merrill
Lynch,
Pierce, Fenner & Beane; Union Securities Corp.; Salo¬

its exploration and development of natural

over

and oil operations. It will be financed, in part,
through public sale by the new unit of 1,000,000 shares of
capital stock (par $8). Financing plan submitted by First
Boston Corp. Expected this Fall.

tstanding shares of $2.25 cumulative preferred stock,
par value, and for general corporate purposes. To be
aced privately at par with Penn Mutual Life Insurance

pril 26

of Utah

gas

efererd stock. Proceeds will be used to redeem 14,840

Iowa Southern

Fuel Supply Co.

June 6 company announced plans to create a new firm

53

Co., Inc.,

mon

(12/4)

Probable bidders:

at competitive bidding in No-

(par $100)

Minnesota Power & Light Co.

Oct. 3 company announced it plans to issue and sell early
in December, 150,000 additional shares of common stock.
Underwriters—To be determined by competitive bidding.

pt. 26, Roy S. Nelson, President, said company plans
issue and sell 70,000 shares of a new series of prefred

(1337)

San Diego Gas & Electric Co.
July 31 it was reported that the company's original plan
to issue between $8,000,000 and
$10,000,000 of bonds
late this

pending

year
upon

may be changed to preferred stock, de¬
market conditions. If negotiated, Blyth &

loans.

program

involving $11,000,000 of short-term
would be used to redeem out¬

Part of proceeds

standing 35,000 shares of $6 preferred stock on a date
to be set after the SEC and the Washington State P.S.
Commission issue their approval.
•

Western

Pacific

RR.

Sept. 5 it was announced company plans issuance and
sale of $22,000,000 3% first mortgage bonds. Probable
bidders:
man

Halsey, Stuart & Co. Inc.; Blyth & Co. Inc.; Leh¬
(jointly); Union

Brothers and Bear, Stearns & Co.

Securities

Corp.

and

Glore,

Forgan (& vCo. (jointly).
Continued on page 54

,

54

The Commercial and Financial Chronicle

(1338)

Continued

from

Harris, Hall & Co. (Inc.).

53

page

Standard Gas

and

•

Service

Public

Wisconsin

Corp.

applied to Wisconsin P. S. Commis¬
sion for authority to issue and sell $4,000,000 first mort¬
gage 30-year bonds and $2,250,000 additional common
27

company

bonds

Underwriters—For

stock.

determined

be

to

to acquire

by

share.
for

and

is

en¬

14%,

mines;

Security I Like Best

Otis.

Proceeds—For

working

capitc

j

was

with this company of seven other sul
England Electric System, followir

merger
of

New

County

companies

bidders:

participating

Halsey,

Stuart

issue and sell $12

proposes to

000,000 of first mortgage bonds to

&

in

retire bank

f

loans

the

Probab

Inc.;

Co.

merger.

Lehman

Brother

Merrill

Lynch, Pierce, Fenner & Beane; Kidder, Peabori
Co.; First Boston Corp.; Harriman Ripley & Co., In

&

1948.

and,

coal; operation

The

plan

a

the

the

through subsidiaries,

&

which Worcester

July 14 it was announced that in connection with acqui¬
sition by Wilcox-Gay Corp. of Garod Radio Corp. and
Majestic Radio & Television, Inc., Wilcox-Gay-Majestic

2

page

Kinnard

sidiaries

construction.

gaged in the mining of bituminous

from

plans public offering of 500,0<
(par $1). Underwriter—Gea

Worcester

for

16,227 V3

Wilcox-Gay-Majestic Corp.

(jointly); Kidder, Peabody & Co.; Union Securities
Corp.; Equitable Securities Corp.; Otis & Co.; Merrill
Lynch, Pierce, Fenner & Beane; Salomon Bros. & Hutzler; A. G. Becker & Co.; Carl M. Loeb, Rhoades & Co.;
Co.

stock

common

County Electric Co.
filed with the SEC, the FPC and tl
Massachusetts Department of Public Utilities providil

shares and any shares not
by minority stockholders. Price—$35 per
Proceeds—To repay bank loans and advances

proposes

bidding.
Probable bidders: Halsey, Stuart
Co. Inc.; First Boston Corp. and Robert W. Baird &

Continued

•

of

Sept. 25

subscribed for

competitive
&

new company

Thursday, October 5, 19

.

.

Expected in October.

hart

Weymouth Light & Power Co.
Sept. 18 company applied to SEC for authority to issue
and sell 16,298 shares of capital stock (par $25) to its
stockholders.
New England Electric System, the parent,

dle of November.

Sept.

Corp., the
shares

program.

first mortgage 4% bonds
$6,133,000 convertible income 4^2% bonds due 2014,
over $5,000,000 "new money."
Expected about mid¬

and

Common stock will be sold to

Electric

&

Co., the parent. Proceeds—To
repay $3,300,000 bank loans and to finance construction

Proceeds—To retire $10,000,000

.

of retail stores at

wholesaling

of anthracite and

retailing

and

bituminous coal

comparing

Marked

last

earnings

has been shown

improvement
the last few

over

In 1945, only $1.15

years.

witn

year

share

a

and other fuels; general trucking was reported; in
1946, $1.05; but
A 10% interest is held 400,000 tons by the end of the year —through the former U. S. Dis¬ in 1947 earnings climbed to $4.60
in the
company
developing the by additions to its main Middle- tributing Corp.—and warehousing. and in 1948 were $5.51 a share.
Its retail coal subsidiaries own In the latter year, dividends to¬
large ore deposits recently dis¬ town plant costing about $12,000,-

many years.

in

covered

expected

which
producing

Labrador,

to

start

The company is

1956.

in

000.

It

in

cost

producer

strong

a

position in regard to coal reserves.
The present capacity of Armco's
ten steel plants is now 3,800,000

this will

but

tons,

increased

be

considered

are

is

the

lowest

stainless

of

steels

and has about 20% of the nation's

Profit margins

capacity.

compare

favorably with the industry

aver¬

age.

retail

coal

yards in

equip¬
U.
S.

trailers,

tractors,

service $1.25

armed

passenger cars.
It also has
nine garages in and around New
York
City, two
leased in fee,

Net Working

Earned

Common

six

Sales

Capital

Per Share

Dividend

leased

Millions of Dollars

taled $3.30 a share.
For
1949, however,

reflecting
labor difficulties and lower coal
subsidiary,
Trucking Corp., consists of ap¬ prices, results were only $1.95 a
proximately 700 units of trucks, share while dividends paid totaled
its

and

STATISTICS

Assets

of

of

ment

Net

Total

—

number

a

New York and Boston. The

leased, and one owned on
land; and nine leased ter¬

minals—seven

in

New

York

City

of

share.

a

this

the

For

first

in the

months of last

same

during

the

half

current

of

316.2

382.6

112.5

7.96

2.00*

falo.

flection in dividends than the 50-

248.8

311.7

76.8

6.20

1.66

But, to me, the reason for fa¬
voring Pittston, and its principal
attraction, is its subsidiary, Clinchfield Coal Corp. At their present

cent

1946

227.1

231.9

82.6

4.47

1.04

1941

189.1

169.2

55.8

2.68

1.16

1940

157.0

112.4

49.5

1.63

.21

each in

one

Boston and Buf¬

relative

-Plus 20%

Pittston

stock dividend.
1950

prices
appears

to

obtain

an

to

way

EARNINGS

the

Clinchfield Coal.

$2.98

1st quarter
2nd

quarter

3.48

Six

months

poration

$6.46

has

purchase of
be a cheap
interest
in

This latter

outstanding

cor¬

750,000

ings are estimated at $10.60 on a
45% normal tax basis. If an excess

profits tax is enacted, using aver¬
postwar
earnings,
Armco

age

able

be

should

maintain

to

its

$3 annual dividend and
earnings which would be
large in relation to its present
selling price.

present
report

relations

Labor

have

friendly and in the recent
operations carried on
at 53% of capacity.
Despite expenditures of nearly
$100,000,000
on
plant improve¬
the

convertible

to

Common stock

As

it

disclosed

cause

a

1949

(Cash items, $59,100,000)

At the risk of seeming offensive

48,000,000

Net working capital $107,200,000
Earned
surplus — income re¬

say

one

business—stood

at

$80,554,000.

Armco will appeal to

those able

extraordinary capital gain possi¬
bilities "and higher dividend in¬
It

is

the

type commonly
called "businessman's risk" (Fitch
venture

into

such

a

ownership in

a

much

of

Under

an

extended

the

of

is

expansion

earn

as

high

a

The earnings of the past

testify to its ability to

well under peacetime condi¬




mineable

mer¬

Company
me

ing

marked

a

P.

Murray

The
was

to

previous peaks for the company;
it is in

a

position to benefit from

interest

in substantial

natural

which to date

In

con¬
un¬

physical

re¬

$11,500,000

was

additions

and

im¬

for

opening

of

produced.

were

tons

Last

were

year,

produced.

estimated
duction

that

would

rate of 5,000,000

at

be

capacity,
at

an

pro¬

for

it has

terial

tremendous

resources

raw

ma¬

its

sub¬

through

sidiaries.

Pittston

annual

primarily

a

holding

coal

owned

approximately

50%

by Alleghany Corporation,

approximately 28%, while

the sales of
and

company,

and

re¬

wells

are

total

a

rived

"No

will

revenue

from

the

...

of

sale

be

is

with

Fla.

is evidently proceeding
drillings at an accelerated
with the report for the first

pace,

half of

Inc. of Kansas City, Mo.

last year.

Another factor adding
to the
speculative attraction of this com¬
pany

is that

leading

MIAMI,

Fla. —Claude

Master

is

Gordon

Graves

associated

now

&

to

determine

location for

proposed new $50,000,000 plant

and there is

good

reason

to believe

that location finally will
tract

of

mean

much

be

outlet

for

natural

All

Clinchfield

both

coal

its

t

f

j

has become connected with Frank
D.

Newman

&

Ingraham

Co.,

Building.

With Merrill

Lynch Firm
j

(Special to The Financial Chronicle)-

ST.

Fla.—Paul

PETERSBURG,

J. Sullivan has

Merrill

joined the staff of

Lynch, Pierce, Fenner &
568

Beane,

Central Avenue.

.

a

on

as

and

its

Joins Waddell & Reed
(Special to The Financial Chronicle)

an

gas.

WEST

PALM

Manuel

BEACH,

Dittenheimer

Waddell

&

in

ered natural gas, and

ther

possibilities

-

Fla.with

is

Reed, Inc., of Kansas

City.

one

the better known

outstanding companies in the

bituminous
Creek

With Waddell Reed Staff
(Special to The Financial Chronicle)

FT.

WAYNE, Ind.—Wilfred H.

finally, fur¬

for

expanded

With C. H. Wagner Co.

Bryant
dell &

is

associated

with

Wad¬

Reed, Inc., of Kansas City,

Missouri.

'
.

i

J.

■

Joins A. G. Becker Co.
*

(Special to The Financial Chronicle) *"

(Special to The Financial Chronicle)

ORLEANS,

La.—Luther

INDIANAPOLIS, Ind.—Karl A.

A. Brewer is now associated with

Stegemeier has become affiliated

C. H. Wagner Investment

with

Co., 126

Carondelef Street.

A.

G.

Becker

&

porated, Circle Tower.

coal

industry,

Coal, showed

a

Island

decline of

With Stone & Webster

Co.

'

'

Incor¬
•

With Waddell & Reed

(Special to The Financial Chronicle)

BOSTON,
Tranchin
with

has

Stone

&

Mass. —Robert

(Special to The Financial Chronicle)

F.

become

affiliated

Webster

Securities

Corporation, 49 Federal Street.

i

MIAMI, Fla.—Howard Williams

acres

to

with

Co., Shoreland

.

in Russell
County, Virginia* on land owned
by Clinchfield Coal.
This could
2,000

;

Me-;

(Special to The Financial Chronicle)

chemical

survey

F.

With F. D. Newman Co. ;

companies re¬
completed
a
nationwide

a

Chronicle)^'

(Special to The Financial

-

of the country's

one

*

Joins Gordon Graves
-

1950

showing drilling ex¬
penses
at $159,000 against only
$81,000 for the same period of

<

'\

Mont , J.
& Reed,

—

Waddell

de¬

until

gas

HOMESTEAD,
Baker

ap¬

company

with

ar<

(Special to The Financial Chronicle)

now

of

proximately 20 wells should be
completed by the end of the cur¬
rent year."
The 1949 annual report further
stated:

Jones

from

1948, although total
production in the U. S. de¬

clined
is

additional

drilled

E.

Reed, Inc., Bark-1
' '

With Waddell & Reed

been

annual

tons.

5.3%

an

1949

However, there were only 158 earnings should the chemical com¬
working days in unionized coal pany actually locate on Clinchmines in 1949, out of a total of field's land.
298 possible working days.
It is

not)

and,

"Seven

Maude

ley Building.

port, dated March 25, 1950, stated:

NEW

have

rather than

had

wells

The

and

with Waddell &

By March of

In

those fearful of
immediate inflation (the writer is

expense

five

year,

completed.

new

A tribute to the high order of
managerial ability is furnished by
the fact that last (year Clinchfield's
production declined only

reserves

share.

a

all, the stock of this
1945, produc¬ growing coal company is quite at¬
only 1,940,000 tons but tractive, on a speculative basis, in
since
increased
materially. anticipation of improved results
coal
peak
thus
far
reached from
operations, increased
in
1948
when
3,156,000 earnings from its recently discov¬

has
John

diner

Last year, such expendi¬

28 cents

»

LINCOLN, NEB.—L. Jay Gaf<

was

tons

an

Over

for

operations.

tion

to

appears

reserves.

mines and modernization of exist¬

that Pittston

(Special to The Financial Chronicle)

The company began drilling
properties for natural gas

1948.

this

Eas

Two With Waddell & Reec

natural

cently

and

reserves.

its tremendous

equipment,

time,

therefore, and
at present rel¬
ative
prices,

gas

rate of profits as permitted by the

tions.

bi¬

provements to property, plant and

the

at

asset

three years

operates

Coal

of

expended

be

tax laws.

tons

habilitation.

It

national rearmament it should
under

that

tuminous coal mines in southwest

vestment

proven an

operate

at

and

time Pittston sold at 46 V2.

dergone

in-

of

to

51

as

trol, since which time it has

manage¬

ment

period

able

ex¬

1944, Pittston Corp. obtained

rapidly

and modernization.
-

high

as

hold unusual merit on a specusituation, lative basis.
The stock is de¬ 2,989,000

quality has been improved by its
program

For

spite

has

flated, at approximately one-half
its price of two years ago; earngrowing enterprise with aggres- ings are
increasing and
could
sive management. Its investment prove substantial in relation to

postwar

to

chantable coal in

per¬

But for"those willing

rating B).
offers

up

lion

secu¬

a

present

prudent risk to obtain

assume a

Both stocks fluc¬

together.

closely

ite

as

only
Investment Status

come.

ties of Pittston.

Until recent years, this company
had a very mediocre record de¬

rity

from

tures—which incidentally are tax
deductible—amounted to $210,000
or

22

paper—20c.

its

on

in

earnings

or

Virginia and West Virginia and
counselors,
owns approximately
300,000 acres
analysts,, I would
estimated to contain over one bil¬
that in my opinion

who

anyone

gas.

Jr.—Publi

Inc.,

Street, New York 16, N. Y.-

nothing addi¬ to produce a quantity of gas suf¬
Arcade Building.
tional
it is possible to
buy an ficient to permit negotiation of
sales
contracts."
equity in the many other activi¬ favorable
The

funds.

the

in

Pittston

investment

many

larger

mid-20's, it is obvious enough wells have been completed

little

for

Clinchfield

to learn about

tained

in the

that

common

manent favor¬

$155,200,000

Current liabilities

at present mar¬

38th

re¬

recently declared.
Clinchfield also holds promise

of

Schlesinger,

Committee,

extra

being

608,957 shares of Pittston
now
outstanding.
With
now

59.6%,

or

ample, in 1948, Clinchfield reached

(Pittston Company)

has

tion:
Current assets___

of

Investment Counsel, Boston, Mass.

balance sheet
strong financial posi¬

31,

above

JOHN P. MURRAY

to

shares,
stock.

approximately
which
is
equal
to
share in terms of the

about $25 a

tuate

to

the

sells

conversion

preferred, which is redeemable at $103.50 through July 15,
1950; $103 afterwards.

like

of

3,909,352 shs.

the

security

end

200.000 shs.

common

will

war,

the

now

($10 par)

the

39%

1952,

approxi¬

owns

worth

are

$15,000,000

2.55 shs.

108)

at

and

since

Dec.

into

selling

447,000

These holdings

kets

($100 par,

of common

strike

ments

$64,200,000

preferred

always

been

steel

mately

which

stock,

common

Pittston

30's,

of this common

$*.5o cumulative convert
ible

Full year earn¬

shares sell at 93.

debt

Funded

the New York Curb in the

on

low

Capitalization

These

of

sells

half-year earnings are
the highest reported for any steel
company with
the exception of
Youngstown Sheet & Tube, whose

shares

should find further

and

year

M.

Affairs

tne

1047

it

thur

should

1948

to

What About Communism?—Ar

Results from coal operations
be much more profitable

year.

107.2

and

0

.

share

341.4

$2.50

Ropke—University

have Chicago Press, 5750 Ellis Aveniu
amounted to $1.18 against $1.30 a Chicago 37, 111.—cloth—$3.50.
;

314.7

$7.68

Crisis of Our Time, Th

earnings

year,

1949

to

Social

—Wilhelm

half

RICHMOND,

Ind. —Robert

A.

Crye has joined the staff of Wad¬
dell & Reed, Inc.

lume 172 " Number 4948 i".

The Commercial and Financial Chronicle

.

WJLth
of

overall total of $125,000

an

new

(1339)

wilLgo

seftlbg

institutions.

to

at work

nqw

companies

in

s

there

it devel-

ahead.

At

is

in

bsence of

side,

in

hich

of

ends

loose

in

slow

were

of

moving

the

months

Co.

be

Stock

biggest stock deals
to

came

when

this

market

Southern

d

Co.,

or¬

the

the southern

over

Southern

Corp., sold

shares of

new common

out

Five

Since

groups

million

one

to bankers.

sought the

shares,

of

ge

But the pas-

for weeks.

teadily

the

reating

for

demand

a

xempts,
re

fact

&

market

close

is

connected

with

for

erved

Wad-

of

parlance of the trade, and has
been reaching down through the
the

into

August

fields

of

bank

expansion

credit.

-

Thftmac

in

ing

dollars

of

monetary

period,

narrowing the
yields - on
long-term
Treasury

between

short

and

issues

and

the

increasing the cost

Dodson

Waddeil

&

Treasury

securities

of funds.
of

and securities produced
sharp fluctuations in the System's
holdings of Government se¬

total

curities and

in

tions

member

a ^60

-

'

"

,

,

_

cities,

offer

endangered.

not

was

•!

fered

sure

|

has

there

that

been

£

...

security market.

can

be

next

elections

expected

little

month,

volved

-

far

so

the

as

find

can

since

But

a common

both

LOUIS,

Knauss

has

work

more

STOCK

COMMON

added

On
of

September 26, 19S0 a quarterly dividend
per share was declared on
Stock of this Company, payable

seventy-five cents

the

Common

November 15, 1950 to Stockholders of record at
the close of business October 26, 1950. Transfer
books will remain open. Checks will be mailed.

408

Olive

R.

or

New
The

Street.

ATCHISON,

SANTA

Company, Inc.,

The

George
cently

Corporate

nnrted

new

t

the

^rrmaSs

the

of

J. W. Kirkner Opens

Up

issues
un

are rethat is

recent

P*tANGE,

undJ-

cleaning

be

to

takings.
The situation here has
been helped by the hiatus in new

FE

Kirkner

J.

Board

of

°«*es

Octtber

27,

N.

72 North

Common

able

out

Long

Established

seeks

an

lished

Dept.

_

1950,

over-the-counter

experienced

clientele.

and

Trader

Our

research

with

funds

selves

icomb
ities
the

available

more

the
to-

new

nothing

of

list

fill

in the

forced

existing

their

issue

way

of

THE SOUTHERN

meeting held on Octo¬
declared a quar¬
terly dividend of 20 cents per
share
of

of this Company

complete

The next

really substantial

portion of this will
public offering stage.

reach

be

has




on

of the

Com¬

December 6,

1950 to holders of record at the

6, 1950.

of

per share on all shares of
outstanding as of the close

business

L. H.

business on October 13, 1950.

By order

on

November

Jaeger, Treasurer

Atlanta, Georgia

of the Board of Directors.
JOHN J.

O'BRIEN, Secretary

NATIONAL DISTILLERS

this day declared

be

will

this

at

mailed

to

CORPORATION

$150

K

105,

DIVIDEND

office.

NOTICE

Dividend Notice

of Directors has

Board

clared

de¬

quarterly dividend of

a

50c per

share

Common

ENGINEERING-

of record

on

the outstanding

Stock, payable

vember 1,

SUPERHEATER, INC.

on

No¬

1950, to stockholders

on

October 11, 1950.

of

75c

In

September 28, 1950.

on

at

close

the

of

business

on

October

1950.

MHMIIHIIIItllliiilllllHKHIHIIIIIIIHIIIIIIItlillllllllllllllUIIIIHIIIIIIIIIIIIIIS
W.

STRAUSS,

present

undersigned

claims
at

said

for

New England Gas
I and Electric Association
|
I

on

Common Stock

An extra dividend of $1.00 per

COMMON DIVIDEND NO. 14

1

payment

to

the

Bank.

1950.

mailed.

be

O.

B.

September

BRAND, Secretary,

25,

1950.

,„v

goodAear
NOTICE

The

and IXTRA DIVIDEND

Directors

Trustees

have

declared

dividend of

|

the regular quarterly

I

|

twenty-two and one-half cents
(22Per share, and an extra

g

dividend of two

at

declared

on

the Common Stock

FINANCIAL

the

close

of

1950. The transfer books

business

October

FRED W. HAUTAU, Treasurer

September 28, 1950.

and one-half

per

share for the fourth

of 1950

Preferred Stock,

upon

of record

at

the $5

payable De¬

stockhold¬

the close of

business November 15, 1950.

$1.00

per

Common

share
upon
the
payable De¬

Stock,

cember 15, 1950 to
ers

stockhold¬

of record at the close of

business November 15, 1950.

25,

will not close. Checks

will be mailed.

today the fol¬

lowing dividends:
$1.25

quarter

ers

share in cash
of

T.

has declared

cember 15, 1950 to

CORPORATION,

been

I.

record

located

ROBERTS,
Liquidating Agent.

Dated August 18,

will

DIVIDEND

Financial

Bank,

F. I.

p.

Treasurer.

I

„

he'reb^^ified
to

payable November 10,
stockholders of record at 3:00
m.,
October 31, 1950.
Checks

Corporation,
to

Treasurer

Engineering-Superheater, Inc., pay¬
October 30,
1950, to stockholders of

Extra Dividend

the State of Connecticut,

new

the

1950,
o'clock

per

payable November 15, 1950, to stockholders of

National

of

a

declared

was

THOS. A. CLARK
dividend

C.

Thomaston

today,

share

the Board of Directors
dividend of fifty cents per
on the common stock

meeting of

a

Dated

share, No. 185, has
been declared for the quarter ending September
30, 1950 on the outstanding capital stock of
A

has

at Thomaston,

At
held

The transfer books will not close.

Dividend Notice

weekly

commission.

Commercial &

Lexington Avenue, New York 17

420

holders

C.I.T. FINANCIAL CORPORATION
liberal

America

of

PRODUCTS

who have filed suit¬

at

LIQUIDATION NOTICE

the

stock

payable

pany,

Vanadium Corporation

Trading

will

ma¬

financing due on the market is
now
being put together for the
Kaiser Steel Corp., and only a

the outstanding shares

on

common

house

since

Next

1950,

3,

close of

1950

estab¬

Chronicle, 25 Park Place, New York 7.

The

Steel

against

Box

terial immediately in sight.
Kaiser

COMPANY

Directors of The Southern Com¬

The Board of

reveals

new

the

Goorto A. Morroll, V. P. I Treat

Ottumwa, Iowa

of busi¬

WILSON, Assistant Treasurer.
Broadway, New York 5, N. Y,

Replies will be held in strictest confidence.

to

secur¬

needs

calendar

'

them¬

find

less

or

investors

with

facilities

Drawing account

potential

shown on the books of

as

Company.

LOUIS

C.

120

able

disposal.

of all concerned..

Meanwhile,

One-Half Cents

($0,125) per share on
the capital stock of
John Morrell & Co.
will In;
paid October 28, 1950, to
stockholders of record October 10,

ber

Trader-Wanted

your

;l

dividend of Twelve

A

and

1950.

OTTO

the

to

CO.

October

The
D.

16,

few recent offerings,
itself

&

DIVIDEND NO. 85

COMPANY
,

Capital Stock
therefor

orders

record

;by and large, the picture has been
satisfaction

MORRELL

JOHN

Combustion

HELP WANTED

While it is still possible to pick

straightening

re¬

Car-

&

DIVIDEND NOTICES

COMPANY

of Directors

Board

Secretary

Y., September 26,

Directors

checks

Dividend
of

securities

Munn Avenue-

and, in some cases, shading
of original offering prices.

a

Goffe

1016

has

December

payable

JohirW.

1S engaging in a

urys

lots of

with

been

Co.,

He

kener, Inc.

AND

TOPEKA

RAILWAY

York,

COMBUSTION

issues, the steadier tone in Treas-

up

Avenue.

common

ness

difficulties.

1

&

Baum

K.

Baltimore

1, 1950 to holders of
said Common Capital Stock registered on
the
books of the Company at the close of business
both

to The Financial Chronicle)

LINCOLN, NEB.
Virginia
L,.
has been suggested Glantz and Mary F. Tous have
that perhaps the national Legis- been
added to the staff of the
lature should step into the situ- First Trust Company of Lincoln,
ation and seek to iron out1 the Trust Building,

Corporate^ Cleaning

Mo. —Joseph

CITY,

M. Crowe has rejoined the staff of

13, 1950, such dividend to be
payable October 19, 1950, to the holders of
record of shares of said stock at the close

Cents

stock

a quarterly dividend of Two Dollars
($2.00) per
share, being Dividend No. 151, on the Common
Capital Stock of the Company, and an extra
dividend of Two Dollars ($2.00)
per share on
the Common Capital
Stock of the Company,

With First Trust Co.
(Special

THE

the

to

it

Congress,

of

(Special to The Financial Chronicle)

September 20, 1950, authorized the pay¬
ment of
a
dividend of Twenty-five (25<0

EDMUND HOFFMAN,

Mo.—Austin

been

staff of Slayton &

ground.

less directly under the hand of

bank

volume

'

THE MINNEAPOLIS & ST.

COMPANY

CAN

imbroglio

Reserve

the

on

pany, at a

Slayton Co. Adds

is
concerned unless the agencies in¬

Treasury

of

(Special to The Financial Chronicle)

ST.

With Congress away until after

.

the

maintenance

pres¬

KANSAS

NOTICE

DIVIDEND

AMERICAN

a

the

anti-inflationary

Rejoins Geo. K. Baum

DIVIDEND NOTICES

Reed,

BOSTON, Mass.—James N. McNamara has been added to the

settling down in the government

City.

reserves."

operations in connection with the
Treasury's refinancing was a very

DIVIDEND NOTICES

"meeting of the minds" between staff of Edward E. Mathews Co.,
the Treasury and the Federal Re- 53 State Street.
serve
as
well-founded, the fact
i-emains

with

sustained

E.

(Special to the financial chronicle)

Although high quarters are not
to accept reports
of a

New York

These fluctuations at times inter¬

on

inclined

banks, par¬
the larger

Associated with the System's

RAILWAY

•

in

banks

including

posi¬

reserve

(INCORPORATED)

E. E. Mathews Adds

Treasury's Narrower

of

the

million dollar increase in

««Acc

„

and the Treasury's refund-

prices

ing

„

the

thp latter nart of Aumist

wide and sharp movements of

no

of

ticularly

member banks alone, on top of

com-

The irregular movement

funds

themselves in subsequent weeks.
a Portion of the increased
Federal Reserve credit has been
absorbed in the added reserve
balances required as a result of
the new credit extended by the

maintained in the Govern.

and

investors, and in part
lags in the reinvestment

to

be expected to reverse

may

security markets; there were

were

jnc~

cations

also

three statement weeks of September for the weekly reporting

Reserve

t>f *

nonbank

banking system—one billion doltars of increased loans in the first

se-

a

Ky. —William

is with

of

in

sales

by
banks
outside
the
financial centers and by

largest

800

At the same

Federal

(Special to The Financial Chronicle)

MURRAY,

of

measure

sporadic

maturing issues to the ~

or

System

se¬

related

was-

part - to

called

during the
million

another

whieh

resources

were added to the

Federal

attaining its objectives,

this

spread

ment

-

in

curities

commercial

of

Thus,

month

past

decisions

the

by

certain

a

classifi-

revenue

the

time, despite a great deal
of
churning about, orderly conditions

With Waddeil & Reed

has

blocks

the

success

v

/

tax-exempts

unicipals "off the Street," in the

list

of

for

which

T. K. Fulcher Opens

—

large

Federal Reserve

use

money

the further

on

policy
and debt management,
and the
continuance of inflationary conditions
in
the economy.
Since
Aug.
18, when these
decisions
were
announced, the System has

in

(Special to The Financial Chronicle)

observers

and

take

to

the

past

mercial bank credit.

rtiiu

market.

the

Demand

in
the

Reserve System and the Treasury

utting down of the large unsold curities business. He was formeracklog that had been hanging ly with R. H. Johnson & Co.
ver

on

quarter of a
billion dollar increase in the Systern's holdings that occurred in
the latter part of August. True,
the entire expansion during September came in the final week of
the month and reflected temporai7 money market conditions

Reed, Inc., of Kansas City,

WA^HTNrTON
d
r
week has wit-',
'
suusidiuwi
substantial K. Fulcher is engaging
xv.
ruicner
is

that this
a
*
steady
mcrtujr

port
essed
coocu

during

in

taken

both

of that situation.

In

dell

taken

have

to

appears

jective of restraint

"Monthly Review":

out of the effects of the

JUNTA, COLO.—James M.

McBeth

Act, Mo.
tax-

Revenue

new

LA

mounting

been

had

list"

maturing

or

out

carry

Short-term money rates rose dur-

(Special to The Financial Chronicle)

so-called

the

where

market

al

'blue

by

month
reflected, in addition to seasonal
influences, the partial working

With Waddeil & Reed

improvement

the

then

ities called

achieved

spread rapidly to the munici-

as

to purchase Treasury secur-

ness

the

of

published

to

"Developments

quickly.

up

issue

Review"

System

market

share to dealers.

fire"

"caught

suddenly
taken

was

Furthermore, the System's readi-

money

contained

its demptions for cash will within the
limits of the Treasury's existing
balances. However, the success of
expansion of bank credit to the
security
operations
was
Treasury's low interest rate policy these
as
exemplified in its recent re¬ achieved at the expense of the
other and
major ob¬
funding operations. According to System's

with the winning syndicate paying the company $10.9501 a share
ff a
with
the
next
bidder
offering
and
Electric Illuminating
Co. s $10,842. The winning group reew
issue, which had given all priced the stock at $11.25 a share
dications
of
being
a
"slow- for public offering, less 20 cents

over,"

October

the

Reserve

improvement was touched
fortnight ago when Cleve-

The

the

September,

major function of restraining the

formerly held by the
liquidated
Commonwealth
&

holders.

ultimate

one-half

would

properties

issues

recent

and

ganized to take

the

issues is providing

new

five

Southern
One

opportunity for the marketing

n

in

in

kept the volume of Sept. 15 re-

week

since

probably

of

review

York, ascribes the failure of the

the

good

debentures,

The
market

"Monthly

Meanwhile, this condition is not
its

in

the Federal Reserve Bank of New

ndertaking in the cards.

ithout

and

$25,000,000

years.

of large-scale corporate debt

ay

$60,-

some

mortgages,

about

balance

the

nothing

weeks

the

insurance

recent.

through the sale of $40,000,000 of
equities, consisting of units of
preferred and new common stock.

foundation for the resump-

oment

"Monthly
Treasury's refunding
operations was achieved at expense of Federal Reserve's major
objective to curb expansion of commercial credit.
of

success

raised

to

The

ferings is tending to build up a
of such financing as

October issue of New York Federal Reserve Bank's

~Review",, contends

~

Sept.
15 and Oct. 1, and to accept the
new
notes
issued
in
exchange,

three

on

take

long

in

short-term

The current dearth of new debt

rmer

that

are

will

"fhe- banks
.

Coast,

the deal.

up.

Indications

000,000

-

Bankers

the

on

.

large

bul^ $f this or some $85,000,000
KT&re

heavy churning of funds and

Says Treasury Balks Inflation Controls

being aimed at, the

money

55

of

the

I cents (lYzt) per share, on the
COMMON

SHARES

The Goodyear

Tire & Rubber Co.

Association, both payable

By W. D. Shilts, Secretary

g

October 16,1950 to shareholders

Akron, Ohio, October 2, 1950

|

of record at the close of business

|

September 30, 1950.

|

H. C. MOORE, JR., Treasurer
September 28, 1950.

g

The

Greatest
Name
in

Rubber

56

The Commercial and Financial Chronicle

(1340)

.

Thursday, October 5, 195(

.

.

contract*
avoic

initial careful pricing of

BUSINESS BUZZ

expansion in

the inflationary

that

Washington...

profits" by renegotiation can prer
vent.

At the

Behind-the-Scene Interpretation!
from the Nation's

/■

V/lff

fw

same

fair
to

the

to

the

time the directivt

close pricing must be

insists that

JL %J It/

jljL tl/U/

Capital

cost^

"excessive

of

recapture

no

will

it

worked out,

be

can

contractor

ai

well

as

government.

(This column is intended to re¬

is why the Adminis¬

the year

from crow¬

refrained

has

tration

mysteries

political

first-rate

the
of

C.—One of

D.

WASHINGTON,

ing from the housetops, on the TV
and national radio hook-ups, and

facet of the press, about
astoundingly brilliant char¬
of the Inchon invasion.

in every
the

acter
In

by
one

as

to

of the most brilliant

S.

history.

so

complete

in

has

provide

to

On

news.

that,

other

the

that

possible

just

has

taking

about
advantage, then

modesty

about.

crow

the Administration

false

a

political
indeed, is
it

hand,

have

to

military background

deliverance
have given

the

comprehend

their military officers

t

is

the

of

some

tumblers in the government
not sufficient

as

the

for

"natural"

a

Administration
Cf

Its

U.

been

operations
success

re¬

military

high-placed

garded
men

is

invasion

this

brief,

them.

>

There

this

several

are

operation

brilliant.
was carried

was

In the first place,

out with

why

reasons

it

speed which very few
believed possible.
It

a

would have

may be doubted that the most in¬
formed, even in military quarters,
would
have
seriously
believed

such

that

invasion

an

could

be

pulled and pulled successfully if
they were told about it, say, as
recently as the middle of July.
"

operation

military

Any

nor¬

mally requires weeks to plan, and
weeks to assemble the thou¬

more

diverse

of

sands

of

stores

ma¬

,of
ship
Usually,
also,
it
requires
some
special
training of the troops to be com¬
arranging

the

terials,

schedules,

and

on.

so

mitted.

this invasion

Yet

pulled in

was

September, when U. S. forces had
engaged only a little over

been

two months in

Hence the

Korea.

whole

planning of the invasion,
the assembling of men and ma¬
terials, and its launching must
have

and

less than

in

done

been

months.

Actually, it

just about three
weeks, something virtually with¬

.

out

The best dope is that this spec¬

tacular operation was the work of

In

the defense forces

of

field."

the

always

this

was

cation

in

Of

the

fication"

there

course,

practical

field

Mr. Truman got

unifi¬

long

mule-set

the

departments

but

Democratic

trouble

selling
trade

moron

the

that

somehow

was

would

idea

no

to

the

operation

to

due

in
po¬

have

this

Mr.

Tru¬

man's unification.
•

the

spectacular

Inchon

None

of

beachhead

affair

the

aspect
its

was

of

risk.

from

reports

the

indicate that the U. S.

forces went there with the whole
range

of paraphernalia of

vasion,

with

sortment

the

of

in¬

an

variegated

materials

as¬

such

as

employed against danger¬
ously hostile beachheads in the
were

last stages of

the Pacific War.

taken that

the beachhead

defended

not

which
most

could

part

lacked

beyond
be

by

was

opposition

reduced

naval

for

the

surface

aircraft bombardment.

into this vital opera¬
the
training
they

held

was

has

with

available for this additional oper¬

behind

ation

lines

S.

U.

and

small

forces,

from

southern

the

eliminate

to

turn

and

the

upon

invading

relatively,

John

If the Administration ballyhooed

operation it might be

York

this Inchon

ineptitude
with

everyone

in

so

which
struck
much pessimism

earlier stages

the

"—And it's equipped with an

for Inchon.

While
could

Truman

his

and

this

about

crow

speech

abridged

and

sharply to
show the main points as follows:

cohorts

thing, Re¬

If this ad¬

.

Current

(1)

profits

large

for

heavy reliance

its") will be taxed.

level

there

upon

the Air Force

bomb

atom

have

would

defense,
fewer

been

Navy ships and fewer Marines to
do the

job.

on

*

and

"anti-commie"

the

in fact

oldest

capital's

similar
asked whether, in his

was

opinion,

(2)

Profits

military

(3)

a

good bill

or

bill
poor

a

bill.

attributable

program

The

railroads
shared

and

in

utilities,

the

profits

last

few years as fully as other
activities, and returns vary from
one

any

company

to

another

force

might

shore

without

not

faulty legislation and many of the

complaints
Truman

made
well

are

of

it

Mr.

by

"But

taken.

to

this

understand

bill,"
he
ex¬
plained, "you've got
to realize
that it was written by Congress
with none of the cooperation Con¬
gress should have had from the
Executive departments in

drafting

"In

a

sense," said this observer,

who wants to remain

Since 88% of the income is

earned

by

persons

in

garded

come

tax

garded
come

the

as

been

which for

aware

that

18

the

tax increases will have to hit
and

lower

but

frustration

of

efforts

the

assessment

the

enemy

of

inland.




of

the

If

risk

these

upon

from

years

the

ian

(5) Some presently tax-exempt
(presumably
cooper¬
atives, savings and loan associa¬
tions,
mutual
savings
banks)
businesses

this

sales

presumably
restrict civil¬
of materials needed by the

use

U. S.
Television

Finishing
Equipment Corp.

Trad Television

military effort.

Video

There is no justification for
exemption of income from future
(7)

Corp. of America
Eagle Oil

Mexican

issues of municipal securities.

State and gift taxes should

(8)

reexamined

be

offer

and

Cinema Television B

"some

Scophony-Baird Ltd.

possiblities" of aditional revenues.
| See cover page for full text of
Mr. Wiggins' address.—Ed. J
if

if

■

if

M. S. WlEN & Co.

"Close

pricing" and re-pricing
on
military contracts will be en¬
forced upon all procurement of¬
ficials of the

A

backs

1919

HA. 2-8780

Teletype N. Y. 1-1397

up

the

out

officials
the Board

by

For

character to

of this

procurement

worked

Exchange PI., N. Y. 5

Board:

directive

all

ESTABLISHED
40

Defense Depart¬

new

hierarchy

Munitions

was

Large Appreciation Potential

just

WE SUGGEST

about the time of the

shake-up in
Department.
The
Board has
authority to enforce
such a policy, provided it has the
firm backing of the Secretary of
the

Defense

Defense.

fort will be made

to

a

greater ef¬

utilize fixed

price contracts without-'escalator
or

re-determination clauses. Where

the

initially is high there
provision where practi¬

price

will

be

for

re-pricing.

CLASS B (common) STOCK
A

avoid

the

ation.

It

theory

that

is

agonies of renegoti¬
based

to

the

leading producer of cement
fast-growing

Southern

California.

Analysis of this Company and
a

review of the Cement Induo-

try available on request.

Selling about

$9.50

LERNER & CO.

This policy is designed not only
to

RIVERSIDE CEMENT CO.

in

Under this policy

cable

groups.

Orleans.

will be necessary to

also

on

extent

HAnover 2-0050

sabotage
commies."

Teletype—NY 1-971

the

IxiTMtm.nt

S.cruriti..

19 Post Office Square, Boston 2
T«l.

HUbbard

Most

2-1990

that

Allied Electric Products
Baker

Firm Trading Markets

FOREIGN SECURITIES
All Issues

•

Lithium
Taca

Admin¬

to

Raulang

Jack Cr Heintz

has

open scorn

Committee

to

coVert

fjarl marks &

Airways

Inc.

FOREIGN SECURITIES

restrictions

Corp.

SPECIALISTS

Hill, Thompson & Co., Inc.
Trading Department

*

of

had

Dies

the

was

forces

income

III

Merrill Lynch,

& Beane, 608

a

Communists

istration, varying from

to

element

in¬

already are re¬
excessive, personal in¬

middle

diminish

$6,000

rates

re¬

reflex action from

a

as

Congress

forward

Another

the

with

rates

anonymous,

"the anti-commie bill must be

damage

impair its prospect of moving
promptly
enough
and
taking its interior land objectives.

Lynch Firm

legislation.

reached

have

sufficient

within

industry.

(4)

for 18 years, have run into nothing

risk

have
the

of

raise

Even though higher excise
on
some
items
will

(6)
tax

care¬

types of business,

and less brackets and personal

main, he said, it is rather

proved to be wrong, the invasion

of the

"excess

not only to

ner

ment
or

profits" tax must be framed
many

the

to

(i.e., "war prof¬

profits

war

fully since
not

the laws of citizen¬

immigration

matters

was

*

this

authorities

ship,

taxation.

like
*

of

One

around!"

When A. Lee
of

the

Atlantic

*

50 Broad Street

Wiggins, chairman
Coast

Line

Rail¬

;

has become associated
Pierce, Fenrevenue but because they operate
Edwards Street.^
He
was
for
formerly an officer of;
profit in competition with
Wheeler & Woolfolk, Inc., in New
tax-paying businesses.
should be taxed

business

pretty much fair game

are

publicans and conservative Demo¬
conversely could note that
but
for
their
opposition to so
high

Merrill

.

Rives,

the UN forces heading

on

120
in

SHREVEPORT, LA.—Claude G.

road, and chairman of the Bank
this superb oper¬ of Hartsville, S. C., spoke last
ation obviously caught the Reds
week before the American Bank¬
without their breeches.
It hap¬
ers
Association, he discussed in¬
pened so fast that the Russians flation and credit and taxes.
probably had no time to think
His
views
on
taxes
take
on
about how to counter it, thinking
added significance, however, and
their problem all along was what
were largely overlooked,
because
to do
sometime later when the
so
few people
realize that Mr.
Red Koreans were driven to the
Wiggins, a former Under Secre¬
38th parallel. It also happened so
tary of the Treasury, is advising
fast that it was a success, even
and assisting Treasury Secretary
though the enemy had received
Snyder as a consultant in drafting
advance intelligence
shortly be¬
the new tax program.
fore the operation and apparently
In
order
to
list Mr. Wiggins'
could do
little more
than send
Russian submarines to follow and views, these are briefed from the
report

Corporation,

(Special to The Financial Chronicle)

case

any

adjustable line that can be

bent down when the income tax inspector comes

available with utmost cunning.
In

Hanseatic

New

C. G. Rives III With

the cam-

of

Administration
might use the Inchon affair to
argue
that it really was not as
poorly prepared as it appeared to
be, but was disposing its troops
the

Or,

paign..

j

be¬

has
the

Broadway,

and

unpreparedness

of

pearance
gross

with

New York
City,
their Unlisted Trading Dept.

of the ap¬

dissolve much

Corp.

Canavan

James

associated

come

able to

\

Adds to Staff 5

Inchon.

within must be stopped, but who,

assessment

Glore, Forgan & Co.

N. Y. Hanseatic

Reds had been

the meantime the
able

the

if in

lines

Red

the

with

associated

become

municipal bond department of the
firm.
Mr. Nimmo formerly was

It would have availed little
commit the limited troops then

to

Corporation,

Broadway, New York City, an¬
nounced
that Alfred
L. Nimmo

precari¬

apparently

so

Securities

Union
65

ously.

had

vance

*

Nimmo to Staff

normally be given.
Finally, the greatest risk of all
was in withholding troops for this
endeavor when the southern front
would

So, presumably the risk had to
be

sent

troops
tion

In the

Another

Union Securities Adds

suggested by stories from Korea,
to the
effect that many of the

"uni¬

of

bigwigs

I

another element of risk is

before

on

Washington,
litical

disaster.

a

Still

crats

military precedent.

"unification

been

two

in

begun

insufficient, and there would have

planned

was

pretation from the nation's Capitai
and may or may not coincide with
the "Chronicle's" own views.)
j

been

have

would

landed

forces

flect the "behind the scene" inter¬

the

gauged,

than

bigger

been

New York 4, N. Y.

70 WALL
Tel.

STREET, N. Y. 5

WHitehall 4-4540