Full text of Commercial and Financial Chronicle : October 6, 1949, Vol. 170, No. 4844

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1549

OCT 7
ESTABLISHED 1S39

BUS-

•

LIBRARY

Volume

New

Number 4844

170

rep¬

New York

coming Con¬
victory, con¬

barring

servative

Election

trols will be increased.

f;
I

,

•

LONDON, OCT. 5—The work¬
man in this Welfare-State labora¬

country's crises
while sunning

his

of

accounts

himself

the

on

at

beach

at

length

\

may

\

sured
"If

To begin with,
months taken
Not

a

it can be said that business has in the last two
August figures show this clearly.

turn for the better.

only did industrial production increase, but factory employment

gained

little.

a

Factory orders rose, notably those for machine tools
a nd
p a p e r-<S>
—

this

have

it."

work,

country's

ties

and

problems

budgetary

balance

of

-

of

assuredly none of his concern.
(Such apathy, of course, goes right
to the root of the difficulty
of

keeping Welfare-Statism and the
Spoils - system technique from
both sides of

on

the Atlantic.)
Hence

correspondent

was

that there is
of

in the

war

pears

on page

39)

Pipe Line Corporation

have

one

can

say

hope and some¬
confidence. The fear
future has been

near

Socialism

ap¬

to be losing out in this coun¬

try and there is some reason for

Thus

us.

we

i-

.

may

(Continued

financial

Due

May

1,

ex

*An

address

34th

Federal

*

start

quest

our

on page

34)

^sitated

by

a

cure.

It

was

neces-

by

facts.
im-

most

of

t h

of

e

s

e,

course, was

the

growing

imbalance be-

Several of the "liberal" candidates fop office this year,

notably Ex-Governor Lehman in New York State, and some
who expect to be candidates next year have been of late
screaming from the house tops that they will not permit
allegations of "statism" to cause them to swerve from their
headlong course.: It is a fact that they do not appear dis¬
mayed by pointed attacks upon the soundness of their pol¬
icies, their philosophies and their programs. Indeed it must
with deep regret be admitted that in more than one instance
those who make the charges do not seem much inclined to
permit their allegations to prevent them from sponsoring
programs deeply tinged with this same statism.
But, however all this may be, the thoughtful ob¬
scarcely fail to take careful and disturbing

note of

of the current fruits of the statism which

some

has for the past

by

Dr. Haney at
Meeting of the
Druggists As¬

Annual

sociation,

Atlantic

City,

Oct.

1949.

decade and

a

half pervaded the thinking

t

w e e n

pro¬

duction

costs

North

in

America

and

Europe.
F

the

o

1 lowing

war,

the

States

United

economy

re¬

fun¬

mained

Lewis

H. Brown

damentally
V
one of private enterprise. We con¬
tinued
to
increase productivity
and reduce or at least hold down
(Continued on page 29)
*A~n address by Mr. Brown, be¬
fore

American

sociation

Management

Personnel

As¬

Division

Planning Council, New York City,

Sept. 28, 1949.

indeed in State and local seats.
of these

One of the most glaring

examples is found in the current labor situation.
(Continued

5,

on page

State and

34)

.

Franklin Custodian

Funds,

STATE

and

MUNICIPAL

of

Preferred Stock

across

Canada%

Bonds

Monthly Commercial Letter

BONDS

A Mutual Fund

Sold

Municipal
■f >

inc.

•

delivery

sterling and other currencies was an
more sound international trade and
things depend upon deeper factors.

server'can

Wholesale

Stock)

at maturity

Payable

these

and the actions of the Government at Washington and

Reg'd.

1951.

Common

toward

But

550 Branches

INTERIM NOTES

(Stamped

relations.

We should not feel that devaluation in itself is

COMMON STOCK

6%

of the pound

forward

Some Current Fruits of New Deal and Fair Deal Statism

less fear that organized labor will

the

Transcontinental Gas

v1

Radical

reduced.

'and

more

what greater

quite surprised over the results of
his one-man opinion poll which

(Continued

Both

recently risen.
C e rtainly

Haney

dominate

this

seasonal

bdnds

'

t

more

stocks

Lewis

step

| See

some-

a

what

difficul¬

Devaluation
essential

portant

sales

gain.

and

election victories

made

less

proposes as remedies:
(1) lower European production costs; (2) overhauling of our tariff
system to permit larger European imports, and (3) lifting of Euro¬
pean immigration barriers. Hails pound devaluation as good start.

De-

m e n

store

payments

-

t

than

academic, theoretical,

as

metals.
pa r

he has
viewing

been

(1) rise of

as.:

Hemisphere because of latter's growing self-

hard

on-ferrous

than

for

and

his

all

in Western

The

and

n

before

checks

May."

scrap

p a y-

-ever

:;

more

EDITORIAL

steel

Getting

higher

sell

in¬

cluding

let's

more

prices

advanced

-

be

by

means

of unfavorable European situation

Sensi-

board.

tive

thought:

crisis,

A. Wilfred

as

-

causes

socialism;

be caught between the devil of the "Welfare State"
and deep blue sea of currency inflation.

with

self

Listing

Johns-Manville Corp.

sufficiency, prominent U. S. industrialist

Brighton, has
typically
the

.

business recession has been interrupted and although an upswing
may be expected for year or two, many maladjustments remain to
be corrected and inflation marches on. Therefore, he holds business

been

reacting

V

(2) excessively high production costs; (3) disruptions
of East-West trade; (4) loss of colonial trade, and (5) inability to

newspaper's

his

perusing

tory,

.•-':-

.

-

Haney forecasts favorable near-term business conditions and
some further improvement in next three or four months.
Says real

confidence in Labor Government.

Predicts,

;

University

Chairman of the Board,

Dr.

his

undermining

man,

Business Administration,

Professor of Economics, Graduate School of

international reversal to

resents

working

By LEWIS H. BROWN*

By LEWIS H. HANEY* :

By A. WILFRED MAY

devaluation

Copy

The American Economy

Long-term Business Outlook

Devaluation
Mr. May notes

a

Contrasts of Near-term and

England Undei
j

Price 30 Cents

York, N. Y., Thursday, October 6, 1949

COMMON STOCK FUND

upon request
Bought

Quoted

*

Prospectus available'on request.

Street, New York 5

40 Wall
Boston

Exchange

Chicago

Philadelphia Providence

UTILITIES FUND

,Prospectus

on

THE NATIONAL CITY BANK
OF NEW YORK

OF COMMERCE

request

Head Office: Toronto
FRANKLIN DISTRIBUTORS, Inc.

Bond Dept.

PACIFIC

to

London, E. C.

.

.

I

Colony, Kericho, Kenya, and Aden
and

■

Zanzibar

£4,000,000

Paid-up

£2,000,000

Reserve

!;
v

Capita]
Fund

,

L,

Corporate Securities

Dean Witter
Members

Established

1899

Lot
%

(Incorporated)

The Bank conducts every description of
banking an<J exchange business

Trusteeships and Executorships

New York

also undertaken

Cincinnati

Chicago
Columbus

Denver
Toledo

14

San

Dallas
Buffalo

York

&

Stock

Stock

Stock

Angeles Stock

WALL

BArclay

CLEVELAND

.

New

Francisco

Honolulu

OTIS & CO.

£2,500,000




bonds & stocks

England

Public Service Co.
ALL ISSUES

and

San

Subscribed Capital

CITY OF NEW YORK

New

CANADIAN

SECURITIES

THE

San Francisco Los Angeles

Distributors of Municipal

Branches in India, Burma, Ceylon, Kenya

*

Underwriters and

NATIONAL BANK

Agency: 20 Exchange PL

Portland, Ore.

COAST

the Government in

Kenya Colony and Uganda
Head Office: 26, Bishopsgate,

THE CHASE

OF

ISetc York
Seattle

of INDIA. LIMITED
Bankers

Teletype: NY 1-708

New York 5

NATIONAL BANK
i
I

Bond Department

CANADIAN BANK

INCOME (BALANCED) FUND

64 Wall Street,

Amsterdam

London

#

BOND FUND

White,Weld&Co.
Members New York Stock

THE

PREFERRED STOCK FUND

Co.,

Exchange

Exchange

Dominion Securities

Exchange

Exchange

(ORPORATIOT!

STREET, NEW YORK

7-4300

Teletype NY
Los

Francisco

1-579
Angeles

40 Exchange Place,

New York 5, N.Y.

Direct

Wires

Members New York Stock Exchange
and other Principal Exchanges

111

Broadway, N. Y. 6

WOrth 4-6000

Honolulu

Seattle

IRAHAUPT&CO.

Teletype NY 1-702-3

WHitehall 4-8161

Boston

Teletype NY 1-2708

Telephone: Enterprise 1820

2

&

COMMERCIAL

THE

(1350)

FINANCIAL

CHRONICLE

Thursday, October 6, 1949

i

TRADING

Detenenls to American Foreign Investment

IN

MARKETS

By EUGENE HOLMAN*

Ohio Edison
Southern

Company

Leading oil executive tells Congressional Committee of prospects and problems of American capital
Cites experience of Standard 0.1 Company and lists as two most important deter¬

(1) increasing difficulty in trading

rents:

cies; and (2) nationalistic tendency of

*

Corporation

convertibility of curren¬
or otber foreigners to

on

governments not to allow Americans

Expresses concern over worsening of investment climate abroad. ;
Jersey Standard is an American company which has engaged actively in business in
United States and in many other parts of the world for many years. Since the end of
war, Jersey Standard and its affiliates have spent for capital purposes amounts equiva¬

the

120 Broadway, New York 5

nations due to restrictions

among

some

the

Teletype NY 1-583

lent

to

ap-3>

proximately
and

one

h

one-

billion

1 f

a

dollars

Specialists in

ig

e

basis
e x

for-

coun¬

n

tries.

Rights & Scrip

here

in

and

the

On

wide

of

i ence
recognize

p e r

——

used

:

:

;

fields

must
be
found. We know there is enough

sections

Oil

from

up,

in

to

new

the

but

come,

sider

world

for

generations
would not con¬

we

ourselves

obligations unless
effort

meeting

as

made every

we

continue

to

our

locate

to

been placed

by Nature in

of

the

the

globe,

main

We have to

Not

in-

all the good ideas in the business.
When one of our competitors puts

York

Stock

Exchange

New

I

e

York

Curb

Exchange

Eugene

REctor

s

n

t

g

nts.

m e

Holmao

factors

oil.

are

liar

p e c u

120 BROADWAY, NEW YORK 5
Tel.

t i

to

Our product,

for example, js
requiring heavy capital out¬
lay just to find. And its discov¬
ery is only the beginning of the
need for capital investment. Many

2-7815

one

of the factors I shall
mention,
however, apply to all American
enterprises conducting business at

Continental Radiant
Glass Heating Corp.
Common

home

Of

Stock

new

electrical radiant

fundamental

investment

of

is

the

mak¬

ing of profits. Profits both create
and

glass heating system.

attract

the

are

It

Bought—Sold—Quoted

seems

the

on

MERCER HICKS CORPORATION
72 Wall Street, New York 5, N. Y.
Teletype NT 1-2813

capital
of

source

well-being

TeUphsna DIgby 4-5700.

the

course,

basis
The

abroad.

or

funds

capital funds.
These funds make jobs for those
who build productive equipment.
They make jobs for those who
operate the equipment and who
products

to

con¬

to,

do

we

have

not

idea into practice, we often
make

heavy investments to
meet the new competition. Con¬

versely, when we develop some¬
thing new, our competitors must
also invest to meet our advantage.
characteristic

This

of

American

industry is not found to
a
degree anywhere else
world.

it

believe

We

high
the

so

in

accounts

nation's industrial
The highly competi¬
tive nature of the oil industry is
one of the great stimulants to its
large capital outlays.
largely for
leadership.

our

provide

The need to

..(5)

products

plain that >economic
is directly dependent

the

like

new

must

which

investments.

flow.; of

distribute

-

a

new

services developed by

or

is

research—Petroleum

com¬

a

material. Our company
is always looking for—and some¬
times finds—useful new products
which can be made economically
from it. Large new sums must be
plex

raw

tribute

such

a

product,

new

And they give consumers
better goods. Invest¬

sumers.

ment

American Air Filter Co.

less

Common

Common

creates both

important
to

power

Black Star Coal Corp.

—

Must

:

,

'

in

establish¬

ed businesses—must be

Preferred

continuous. What

relatively

the

are

behind the need for

a

reasons

continuing

flow of investment funds into

m

economy? There

BANKERS BOND £°i

which

Incorporated
1st

I

(1)

keep

demand

pace

calls for

Trading Markets

—

=

American Furniture Co.

Moore-Handley Hdwe. Co.

E

Dan River Mills

E

tive

capacity

This

rising

E

''

Scott, Horner &.

Mason, Inc.

EE
=

LD

1

1

Lynchburg, Va.
Tele. LY 83

increased.

consumer

To

demand

capital investment
produc¬
can be
built.

additional

continuing
consumer

need

meet
demand has been
to

ing

my
company's decisions to
make
unusually heavy
invest¬

for productive facilities

in

the

greatest capital expenditures
program in its history. The mag¬
of

its
undertakings
is
by the fact that from
1945 through
1949, the industry
will have spent for additions to
property, plant and equipment in
measured

the

United

$11

billion, equal to about twoof
the
industry's
entire

a

investment

gross

at the end of

total of

I

in this

over

country

1944.

gather that this committee is

interested

the

in

specific as well
principles influenc¬
investment policies, and I

the

as

ing

broad

think

it

will

be

of

tomers in

interest

to

gentlemen to have a descrip¬
some points considered by
our
Board when
contemplating
a
possible investment. Many of

affiliate

considerations apply to do¬
investments. But, because

mestic

Subcommittee

areas

where affiliates of

pany

I

61%
*

Firm

Trading Markets

COLOMBIA
BOLIVIA
All

Issues

operate

did

in

on

abroad, they

and

In

com¬

want
v."

(2) The replacement of

worn-

obsolete

-equipment —
Even apart from the growth of
consumer demand, there is a need
for
investment just
to replace
worn-out plants. It is a case of

having to

just to stand still.

run

The insurance of adequate

(3)

material

raw

aware

effort

request

our

more.

of

the

supplies—you

\ime,

required

money,

find

to

get it into the hands of

New study

1938.

As

ers.

oil from

a

oil

are

and
and

consum¬

given field is

mainly

Foreign

208 South La Salle St.,
Chicago 4
RAndolph 6-4696

Tel. CG 451




the

Investment

on

the

SWITZERLAND

INVESTMENT SECURITIES
V

.

.rV':

509 OLIVE

Board in

our

This involves
factors

studying

a

pro¬

•"£

which

overseas.

Members St. Louis Stock Exchange

To

large extent, the oil sold over¬
seas is produced and refined out¬

a

the

United

States.

JSJSI5I5JSJ5J^f5JSM5I515MSJ5IS15J5J5I5I5l5I5

Conse¬

quently the problem of getting
paid for oil sold abroad is vital
Today

us.

v.'

St.Louis l.Mo*

seems

about half are made

side

'

••

large number of

a

including

the
level
of
likely for our
products
and
getting
paid
for
those sales. Of Jersey's total sales
sales

to

STREET

'

for

of

one

main

our

$35

wor¬

ries is caused by the difficulties—
actual and prospective—in getting

INVESTED in

paid

subscription to the Monday

for

which

we

use

can

convert

can

goods in

our

into

currencies
which

or

useful

and

This problem is not new but it
has grown much worse during the
years

or

sterling is

vertible

into

no

mainly be¬
longer con¬

dollars. Foreigners

would

like

United

States

to

buy
from
generally far

than Americans

buying

so,

year's

the

Thursday issues of the

"Chronicle"
ideas

will

galore and

give
pay

yon

liberal

dividends.

more

interested in

are

them.

from

full

a

we

funds.

Because

of

results, for¬

American company

to sell its

Commercial & Financial Chronicle
25 Park Place

goods freely, to arrange for pay¬

ECA

in¬

economic

New

York 8, N. Y.

exactly the opposite o'f the sound

af¬

country and

filiate

abroad.

stances,
back

the

sent to the
In still other

affiliate

plow

may

its

own
earnings, or funds
be
raised
abroad
either
through loans or by selling stock

may

to

local

investors.

Often

of methods is

In the oil

business,

a

com¬

we must

D.

of

our

One

reason

is the

ment

freely,

invest freely.
foreign affiliate
often not be convertible to

may

dollars

or

These

lations
tional

of

nature

supplies. Oil deposits have

REctor 2-9570

to

or

Dividends from

a

MisMaiaiiaaaeai®

only in limited amount.

exchange
are

control

regu¬

interna¬
tendency is

strangling

trade.

Their

purpose

to

health

restore
by

world

stimulating

and

freeing the flow of goods. Not
only is the well-being of a par¬
ticular country lowered by to¬
day's operation of exchange con¬
trols, but the effects spread out
to the rest

used.

necessity make large investments

Economic

Report,
Washington,
Sept. 27, 1949.

N. Y.
PITTSBURGH

Stix & Co.

Profits, Prime Consideration
The most obvious consideration

this

abroad.

C.,

investment

Subcommit¬

tee of the Joint Committee

problems

DETROIT

GENEVA,

to 110,000 bar¬
Jersey Standard and Angloare
jointly making a
$150,000,000 investment in this re¬
finery expansion.

by Jersey
Standard
and
its
affiliates,
in
some cases, involves placing dol¬
lar funds in a foreign affiliate.
Such dollars, of course, eventually
find their way back to the United
States
to
pay
for
exports
of
American goods. In other eases,
equipment may be purchased in

^Statement by Mr. Holman be¬
fore

CHICAGO

Exchange Bldg.

YORK 4,

American

an

bination

zippin & company

investment

of

abroad.

Cotton

NEW

Exchanges

of crude per day,

eign nations have set up a com¬
plex network of regulations. In
most countries it is impossible for

they

presently
interested
in
the
opinions of those companies ac¬

other

rels.

tive in foreign areas, I shall speak

than

N. Y.

Inc.
Trade

of

Cottpn Exchange

of

the unbalance which

now

And

Asia.

or

Exchange,

Board

Jersey Standard.
The Fawley refinery is presently
undergoing expansion from its
previous capacity of 18,000 barrels

cause

this

Chicago

development at Fawley, England,
by Anglo-American Oil Company,
an

past ten

understand

Europe, Africa

Exchange
Exchange

New Orleans

A

tion of

I

:

Exchange

Curb

Cotton

Commodity
.

bring¬

good example of this kind of
activity is the present refinery

York

York

New

ing crude from Eastern Hemis¬
phere sources, refining it, and
shipping the products back to cus¬

you

these

mean

Stock

York

New

spective investment,. of course, is
whether it will make a profit.

oil industry in the post¬
period has been engaged in

States

New

are

inefficient. It would

The

nitude

Members

sources of

crude, our
building increased
refining capacity in Europe. Ex¬
panding United States refineries
to supply these markets would be
affiliates

is

out

Tele.

Middle East

1856,

H. Hentz & Co.

the

United States, for example, want
86%
more
petroleum
products

E
33

ftiiiiiiimiiiiiiiiimiiimiiiiiimmiiitif

f

as

Industry's Capital

example, as
rising European de¬
development of

of

and

the recent past. Consumers in the

fn ■

|

among

these

of the main factors influenc¬

one

ments
SB
=

more

which

=

is

with

with

S

E

name

A

Expenditure

war

result

a

mand

f

thirds

.living

sumer

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£

are many,

rise of consumer de¬
populations grow and
standards
rise,
con¬

The

mand—As

Bell Tele. LS 186

as

C

would

our

important:

Floor, Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY

Long Distance 238-9

,r

Continuous

Be

Investment—even
5%

Oil

goods and—no
the purchasing

buy goods.

Investment

Kentucky Stone Co.

;V

and

Established

by the location of crude
supplies in relation to the mar¬

dis¬

invested to manufacture and
'

more

branch offices

our

business but' in refining
also, the place of investment is af¬

kets for products. For

Some of these

Mew

wires to

only in the producing end

would

v

Members

■

Mobile, Ala.
Direct

of;.the

'

a'f-

e c

NY 1-1557

•

New Orleans, La. - Birmingham, Ala.

areas.

fluences
f

Exchange

York 4, N. Y.

Hflnover 2-0700

far
use.

these scattered

ciples and in¬

'

of

invest money to find

dustry has been characterized by
great technical vigor. Much as.we

prin¬

Stick

York

New

25 Broad St., New

fected

certain

jfePONNELL&fO.

Members

many

often

centers

and produce from

this

oil.

Steiner, Rouse & Co.

—

(4) The necessity to meet com¬
petition—The American oil in¬

we

Since 1917

Bought—Sold—Quoted

business.

in domestic

participate

New York Hanseatic

I

Louisiana Securities

investments abroad.

AT NET PKICES

Arclay 7-5660

Alabama &

President, Standard Oil Company (New Jersey)

Commonw'lth & Southern

k

■

of the world. Western

Over-the-Counter

Quotation Services
for 36 Years

National Quotation Bureau

European customers, for example,
cannof

import

petroleum
cause

as

they

today

as

they would like be¬
cannot pay for it.

(Continued

on page

Incorporated

much

25)

Established

46 Front Street
CHICAGO

1913

New

York4, N.Y.

8 AN FRANOISOO

Volume 170

Number 4844

;

f

THE COMMERCIAL & FINANCIAL CHRONICLE

The

I N D E X
Contrasts

of

—Lewis

Near-Term

H.

Haney

Page;

Business

Long-Term

and

—Lewis H. Brown

.

selling

a

Muddies

ment.

i

.

issues and is

the expiration of

group at

the

distinctions

between

field where the underwriters should control.
England Under Devaluation—A. Wilfred May__

—Cover

Investment—Eugene Holman

'

4

Gloomy Foreign Trade Prospects—Louis Ware__—

5

Subject to Starvation Regulation?

—F. A. Dawson______:

.6

—

-

Appraising the Business Outlook—Henry J. Simonson, Jr

;9

The Securities Business-—Foundation Stone of Free Enterprise
—Leslie Gould

11

__—

_

-J*

ft

.

S,

*'.•

V

•

C.

:-v

:

.

■

■{'

:

' ..■]

'{■

./

The Halsey, Stuart Case (Editorial)

3

C. II. Greenewalt Defends Big Business

'York

Stock

Exchange—

ities.

.

Threshold of New Peacetime Growth, Asserts

on

John

W.

It raises a serious

14

:\:ji

15

.___

an

is

.

Says Leland Rex Robinson:,,

16

Rukeyser Sees Cripps Killing British Incentive

;

contracting
wherein

Regular Features

•£'

Securities

on a

j

'Liv..

V

TV,

"There

14'

ll_'

to

8

Dealer-Broker-—Investment Recommendations'

.8 i

\Einzig-—"Consequences of BritisH Devaluation".
From

Indications of Business Activity.,—_
Mutual

Funds

NSTA Notes

-

-

|

authorized

\
;j

16

'

Prospective
Publio

—21'!
u——38 !

Security Offerings.

Now

in

9

the

.

Royal Bank of Scotland

'

;

<

Incorporated by Rpyal Charter 1727
HEAD OFFICE—Edinburgh

Branches throughout Scotland

,

to raise the price so as

was

and such

raise

" "

LONDON

-

1

.

.

'

of

49

has been denied.:

purpose

3

Smithfield, E. C: 1

Charing Cross, S. W. 1

Burlington Gardens, W. 1

,

64 New Bond

mo-,

.

TOTAL

reconcile this-

the market

'

ASSETS
^

Associated Banks:

t

a

Williams

Deacon's

Bank, Ltd.

Glyn, Mills & Co.

-

,

Street, W. 1

£155,175,898

specifically;
as

OFFICES:

Bishopsgate, E. C. 2

8 West

compelling inference of

a

support

.

values?

36

——

j

.

the

Is

-

,

r;.\-l :*

.

it become improper

for business

by taking legal protective

in which they have

or wares

con^,

measures^
an

by

interest

considered-to be below their intrinsic

stabilization

of,such markets through the

buying, and selling operations of dealers to

cease'

and

are

their economic functions to be nullified because such dealers

5

Says)

f

to avoid losses

seek to avoid losses

30

or

Economists have

40

dealers
on

with

when the prices are

]

Industry—

Washington and-:

See article

;v

v

,

whether the pur¬

was

raise the market."

buying commodities

i

19-

Tomorrow's Market (Walter Whyte
.

case

case

Since when has

cerns

i

18

— _——

Registration

State of Trade and

.

v

difficult, for example, to

T-vv:^- :ra ';v;

Governments.J;

Securities—

Securities

BONDS

find refuge in

by the SEC! in the Kaiser-Frazer offering

activities?

\ Securities " Salesman's^ Corneri..

The

SAVINGS.

Assuming the "compelling inference" is correct, is there

—j..—39 \

—i.—u.

Utility- Securities.

Railroad

S;

U.

anything wrong, anything criminal:; or fraudulent in these

v

Our Reporter on

be

primary issue.

Obseryations^-Av Wilfred May
Our'" Reporter's Report...

would

observation

10

—■

—

News'About Banks and Bankers—*—

BUY

subjective evidence of purpose

course, no

manipulate in this

It

L_ 32 ;
——__VI

isj of

tive to support or

7

.——

————————:—

DIgby 4-2727

best efforts basis, but how about, those issues

But the facts of the

9

Washington Ahead of the News^Carlisle Bargeron

'

:.V;V

can

buy and constituted a fraud.
SEC:
" ' >/' r' V *

Said the

Coming Events in Investment Field
?

Liquid

-,

to induce others to

t

Lu

—

Exports—Imports—Futures

of trading in the syndicated bonds by Halsey, after the

30

•__

'3l

competitive bidding is mandatory?

—18

Business Man's Book shelf.

Canadian

Refined

—

primary becomes

a

,

be urged that underwriters

expiration of the underwriting,

,>

—Cover'.:

.Bank and Insurance Stocks.—u-j.-_.l-_---

SUGAR
Raw

*

27

pose
v

NEW YORK 5, N. Y.

the flow of capital into trade and in

The issue before the Commission

I

!

free, unhampered and liquid market,

L-vvV-V.

It may

19

See It (Editwial)..

99 WALL STREET ;

t

dustry.

dr' IS

New Stock Issue1 and Transfer Tax Booklet Compiled.

As We

NEW YORK

;

question of when

a

will it promote

17

(Boxed^

'';

'l!

contribution to

Vv,7.;V;A:.v

dering and Bad Labor Tactics, Holds Henry IL Heimann

Europe's' Problem

obsoletes.

LAMB0RN & CO., Inc.

underwriting syndicate will be left holding the bag. This
no

nor

16

_

_

your

WALL STREET,

Here definitely is a set-up wherein the participants in

Serious Depression Can Come Only From Government Blun¬

World Bank. Grants Another Loan to India———

-

secondary offering.

.,j

Snyder__

Purchasing Agents Cite Business Uptrend--

buy

Telephone: WHitehall 4-6551

the price of the secur¬

upon

'

promulgated thereunder.
a

Secy.

Devaluations Make Iihperative Gold Standard Restoration,

for

you can

of the Securities Acts of 1933 and 1934 and the SEC Rules

-—13;;

4-'

won't

Better get all the

pf certain pertinent fraud ahtf ahtwhidnipulation^^previsions;

Congress Alone Can Devalue Dollar, Says Walter E. Spahr_^. 14
U. S.

99

Failure to do all this is determined to be in violation

New

on

activity is having

"

;

j

Rep. Charles A. Eaton Says SEC Impedes Invests, in Canada.. 13.
■

cash

dime

a

seat!

a

6 \

___'

Survey Indicates No Adverse Effect of Mutual Funds

you

considerable*

their market
,

Yeah—but

a

undermine

to

are

—*:*,! ;

______

Tends

The nub and implications of the Commission's
findings
that, irrespective of,the period of time that has elapsed
since the expiration of a: syndicate
agreement, the members
of a syndicate and a
selling group who are left with an in¬
ventory of the bonds must, if they choose to sell, do so via
prospectuses and apprise their customers of the effect which

We Must Advertise to Reach New Classes of Investors

f —Louis Engel

10c SERIES?

delay and contrary ,tov the recom¬
mendation of the hearing examiner, the Securities and Ex¬
change Commission recently filed its opinion in which
Halsey, Stuart & Co. Inc., a prominent securities under¬
writing concern, is rebuked for market manipulation and the
sale of bonds unaccompanied
by prospectuses.-.

|

'

-

—Joseph Stagg Lawrence__._i._-—

Should Rails Be

After

4

Will Sterling Devaluation Take Britain, Off Our Back?

agree¬

and secondary

system of free enterprise.

2

How the Salesman Should Analyze Himself—Kelso Sutton

AND COMPANY

;
our

Deterrents to American Foreign

syndicate

a

primary

bureaucratic substitution of business judgment in

a

Cover

-—

_

'

_Cover |

European Recovery and the American Economy

'

trading in securities remaining in the inventory of

members of

3

LiCHTtnsTtm

"

Opinion

circumscribes

Outlook

-

__

Halsey, Siuait Case

Hearing examiner's recommendation by-passed by5 SEG.

tv

Articles and News

(1351)

a

hope to gain profits?

universally ascribed to merchants and

NATIONAL READERSHIP

price stabilizing function,; whereby through their

operations, they

prevent

disturbances ,in

the

balance

or

it counts most

V where
.

cpver page.

1

"/•->*'

.

"

"•

.;

•

-J,.

•'.

,*v.''y~ )'•

<.;

."J; i

''

"

v.
Published

Twice

Weekly

1

•

..

Drapers'

land,

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COMMERCIAL

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Gardens,

E.

London,
Smith,

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Copyright 1949 by William B, Dana
i Company

t

CHRONICLE

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•

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>

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How the Salesman Should

FINANCIAL

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Analyze Himself

1

\

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COMMERCIAL

THE

(1352)

4

Thursday, October 6, 1949

Sterling Devaluation Take

By KELSO SUTTON*

Britain Off Oar Back?

Stressing value of self-analysis in salesmanship, Mr. Sutton recommends salesmen gain knowledge of

Demonstrates ways of adjusting one's self to selling career and urges
himself equal to his customer and overcome timidity. Stresses real selling begins

their strone and weak points.

salesman consider

By JOSEPH STAGG LAWRENCE*

Vice-President, Empire Trust Co., New York

steady and persistent performance is required of salesman. Holds
work, remain cheerful, and forget bad treatment and "turn downs."
Outlines personality requirements in salesmanship.

with opposition

of buyer, and

a

Bank economist, contending far-reaching effects of
sterling devalua¬
tion will not be apparent for six months or
year, says move was

salesman must have sincerity in his
v-

-

inevitable, and resulted from British deficit financing and efforts to

going to continue with our discussion of the most important factor in selling,
salesman, himself.
Everything in selling begins and ends with the salesman's own

We

the

thrive

on red ink.
Cites as causes of Britain's economic plight:
(1) loss of capital; (2) socialism; (3) loss of competitive incen¬
tives; (4) loss of technical skill; and (5) over-valuation of British

are

effort and

We

ability.

going to discuss, in a very practical way, some of the things

are

sales-^
do to

man can

himself

help

sell securities.

first

The

point
any

is that
salesman

should

learn

while

You

attending

are
a

is

he

selling.
school

here

is

that

con¬

centrated

of sales prin¬
ciples, but you
can
probably

Sutton

Kelso

',[y

learn

out

and

on

discussion

the

about

more

made

sheet"

far as selling
concerned. What

yourselves,
tivities

"balance

a

as,

are

of
ac¬
can

put down on the asset side
what, very frankly, should

you

and

down

put

you

an

side.
If

the liability
v:

know precisely what
your strong points are then you
will have a better objective point
of view to cash in on. Suppose
you

good. You
educational
the
company
you
worked for really put you
through the paces in learning that
material, and you've got it all
had

Now, that doesn't always hap¬
with every call you make, so
afterward you should reflect, and
to

say

yourself, "Just how did I

happen to do
Just

what

If you

so

did

well in this case?
I

do?"

will stop for just

a

few

minutes, after you have made that
kind of a call, and just jot down
somewhere the fact that you

made

particular selling point which
believe impressed the pros¬
pect. ■»* Maybe that point was the
a

you

turning point of the whole solici¬
tation.
5r. "This

that
•for

point went

over

well with

buyer maybe it's something

me

to remember and

use

as

I

along, in other places."
Maybe you . made- a-'i different
kind of an approach to the; chap,
go

b

and it impressed him very much.
All right, that is on the good
,

side.

But

call

and

You

made a
did not do so well.

suppose

you

lost

the

Well, you
analyze, just the same as
first

prospecting
never

in

incorrectly?

error

prospect."
That is
matter.

do

was

my

Maybe
that

on

have

may

thinking that he

in

I

should have called

My

man.

"Did

case:

a

been

good

:

)

one

place to analyze the

analyzing

your

say, or

solicitation,
what didn't I

say?
Was there
any
particular
statement I made that hit him al-f

together

out,

as

and just put me
that call was con¬

wrong

far

as

cerned?"
1

If you would spend just a little
of
time
in
analyzing your
as you

along, from day to
will gain from that

go

day, then you
daily study certain points that
Will help you in your work. Don't
he

like

the

salesman, who, after
Selling for ten years, is no more
efficient in his selling work than
the day he started.
fy

'

,

1

.

i

Know Something About Yourself

}[ The next point is that if you are
gbing to work with people you've
got to
know
something about
yourself. A salesman must know
has

own strong points, and he also
has to know his weak points,

v

Just consider for

-f^Stenographic

a moment

and

report of lecture

given' by Mr. Sutton, third in
series on Investment Salesman¬
ship sponsored bv the Investment
Association

of

New

>fork City, Sept. 29,
X

the

liability side of the
balance
sheet, just
look
over
what
you
have
written
down
there. Maybe you have a poor
approach. You don't know how to

ii)t6 a fellow's office and
shake^ ftpnds with him and start

come

conversation

the

don't

know

going,

or

you

just where to sit,

.

..

/

York,
1949.
.




New
,

,

So,

one important point, as far
the salesman is concerned in

as

boss
about it.
Tell him
frankly,' "I feel that I am doing all
right, but here is a week point
that I have hit. I wonder if you
have observed enough about my
a

little
A

out

it."

on

lot

me

of

how

you can control yourself so
that you can control, other people,

in

order

have

to

them "do

want them to do,

what

namely, to

have to sell then).

you

Adjustment to Selling Career ;
We

this

going to continue with

are

discussioin

himself,

of

the

salesman,

by
taking ? up certain
the subject of the ad¬

points on
justment of

a

to

man

the

career

of

selling.
You remember we
talked about the aches and pains

of the
not

job, and the fact that it

too easy.

A lot of

this job too early.
before they give

too

much pride to go to their boss for
help. After all, that's what he is
getting paid for. He has had
more
experience than you have

had, and there is no reason in the
world why you shouldn't use the
boss, in a selfish way, to help
yourself.

of

every

on-red-ink,
John
Maynard
Keynes, was a distinguished Eng¬

com¬

lishman.

men

I'm going to talk for

carefuly

gregated

by

mony

de-

will

have a direct bearing
his day-to-day work.
The

the

ments

Wars,
Jos. Stagg

Lawrence

Exchequer, stood be¬
of

made

all

Parlia¬

-

statement

a

full

in

field of business and

the

eco¬

nomics

by.engaging in this busi¬
ness of going out and
getting peo¬
ple to buy things.

don't

have

time

go
into
the
particular reasons
should feel that selling
demands the respect of, everyone
in this country. I'll just give one
you

illustration.
.

a

■

V'':/'

v;

On my way over
here, I passed
little store a few blocks away
was having a sale for ten
.Everything in the window

days.

terms of

trade, the basis

nations

dealt

would

have

with
to

other,
changed in

be

•

favor of Great Britain.

longer

no

pound
The

i.

officially

was

verdict

of

the

British

devalued.

market,

open

that sterling was not worth
$4.03 in American money; that, in
fact, it was worth jgss than $3.00,
was
finally recognized.' This was
e.,

accomplished by pn official re¬
duction in the nominal gold con¬
tent

of

the

pound.

Prior

to

Cripps announcement, each

me

if

as

it

had

meant

that

-

the

henceforth
money
was

deliberate

He

wants

tried to open them.

3oy2%.

he

does

would

pound

equivalent

won't bring up subjects like that.

It was
dusty and the doors looked as if
they would come right off if you

the

sales

manager

to, but he feels that if
the

salesmen

may

not

take it the

right way. But if you
will go to him very frankly and
ask him
about a certain point

might find out that he will
give a great deal of help on it.
If you have too many

points on
the liability side of the balance
sheet, consider that a person is
a
free agent and he can direct
his own way in life, that success
depends mostly upon will power
and
hard
work.
If
you
really
want to be

successful

as

a

sales¬

if you put enough hard work
into it, and if you have used your
will power to overcome your weak
points and
capitalize on 4 your
strong points, you are going to
improve in your work from day
man,

to

day.

«

salesman, if you don't
know yourself, and if you can not
control your own operations, your
own

ever

as

ment

you

should be in

a manage¬

position, how could
to. control other

expect

can't do

it.

that this radio had not had

deal

around

It

was

or

was

use

piece of inventory

a

never

been sold.

pathetic to

...

r

good

year

old

now

it stand¬

see

and

whether that retailer is

I

a

doubt

ever

go¬

ing to get somebody to buy it as
long as a person can get a newer
model.
At the

same

time, it has func¬

tional value

and for all the time
that thing has been
sitting around

his store

as

a

dead

inventory item

it could have been in

home

some

bringing

a
certain
amount
of
pleasure to people. But it wasn't

doing that, and the reason; it
wasn't is that the function of sell¬
had never operated
particular product.
It

is

the

sale

of

an

on

that

American

an

of

$2.80.

This

devaluation

of

Why Devaluation
be

the effects?

-

-

This official action

-

merely

was

recognition by the British Gov¬

of

its

it has

none.

income, plus the in¬

shipping, banking and

long
the

-

no

which

longer conceal

the
or

internal

state

de¬

could

deny. Such
in England,

depreciation
as
in every other country where
it has taken place, is the result
of a great increase in the sup¬
ply of money. It does not matter

...

.

,

j

place,
/ j

So,' the salesman is valuable ^
(Continued

on page

22)

the

has

capital

(2) The urge for paradise on
earth, i.e., socialism, has removed
from English life that discipline
which forces

The

weak

food

and

pend

on

men

to do their best.

protected.

are

security

no

Their

longer de¬

their efforts. The able get

dividends

for

their

foresight,

abstinence.

and

energy

The

tax

returns for 1948 show that

only 70
Britons
have
an
income, after
taxes, of more than $24,000. Sav¬
ings have, practically ceased. In
1948 only 6 million, pounds of net
savings Remained, v, after capital
taxes, out of total personal exr
pendable income of 8.224 million

sterling, less than 1/10 of 1%. In
a
healthy society such savings
amount to not less than 10%, and
at: times to as much as 20% of
total income.

:/•

The ' lack

(3).

of competition
for security and

-

the passion

and

stability

have
caused
English
production
to
move

of

costs

sharply upward. Prices have be¬
come
so high that English
goods
find the going tough, not only in
foreign markets but even at home.
Before the

war

standard council

a

in

England cost the aver¬
age
worker
the
wages
(after
taxes) of 112 weeks. Now that

same

house takes the wages of 213
As long as a seller's mar¬

weeks.

choose

-

income

it has been consumed.
The need for the income remains.

not

internal

The

because

yielding

of-an

since
result

preciation

lost

ket

prevailed, these high costs did
bar full production. This has

changed.

Buyers

can
pick and
they go where they
buy cheap. This is not Eng¬

can

and

land.

*

V

'

"

The English businessman
has been practicing feather-bed¬
ding on a national scale for a half
(4)

century.
laws
are

in

There
Great

are

no

anti-trust

Britain. Industries

"organized," with market al¬
and prices fixed to per¬

whether this increase takes place
under the leadership of a John

located

Law

mit the least efficient to survive.

the

or a
Stafford Cripps. When
supply of money becomes ex¬

cessive

its

way

value 'declines

in

the

that the value of wheat

falls when there is too much of it.

Until that takes

the

War,

on which
annual income of $1.5

England is the home of deficit
financing. The great apostle of

living-on-debt

*

and

flourishing-

Newcomers are discouraged.
Technology has been dragging its
feet.
There
are
exceptions, of
course.

But

note:

*A paoer by Dr. Lawrence read

to

at the Consumer Bankers AssocL
ation
; Convention,
Edgewater

i

Park,

-

Miss.

r

:

/

The

average

shovel used in English strip min¬

ing is

three-quarter yard shoveL
country it is an eightyard shovel.
•*
♦:
5 :
In

a

this

.

use-value.

At

investments

overseas

reinvestments

decline in the value

a

money

that

brings the use-value to that item.
After a thing is sold to the person
who is going" to use it, then it has

vital

insurance, paid for the difference
between what she bought and sold
a comfortable margin for

which had, in fact,
taken place. It was

ernment of

same

item

an

This

from

come

house

Why did this happen and what
will

a

ing there, because this piece is

have

;v;

a

knocking

or

anything of that sort.

just

that had
It

of

you ever

people?
...."

a

.

great

a

life, how in the world do you
expect to control a buyer?

Or, if

see

Yet you could

ing

This business of knowing your¬

self,

the

ounce

on sale, and among the items
of gold contained
approximately
display in the window was a 8.7 pounds sterling. After the an¬
radio-phonograph unit, a big job. nouncement, each ounce of gold
Well, that merchandise has been contained 12.5 pounds. Since each
on
$,ale, or is going to be on sale ounce, in turn, was worth $35
for ten days, and that particular at the American
Treasury, this

to

billion.

no

The

news.

been neglected for* years.

Sometimes

which

on

each

was

looked

accumulated.

England had

been

appreciate.
He
confessed
that Great Britain could no
longer

on

radio

of

aggregating $20 billion,
she had

could

are

of

some

why

i century

a

and left

The bare bones of the statement

to

had

meaning only those
steeped in the history of nations

play under the prevailing rules of
international trade. The going had
first one is that you must respect become too
tough. It was more
the profession of selling. You must than the British
Empire — what
feel that you are doing good work was left of
it—could bear. The
upon

which

outbreak of the First World

mother

and

whose

of

Englishmen, after the Napoleonic

the

obvious

fore

case

(1) England has lost the patri¬

event and ask

the

the

degenerative process
definite symptoms.

a

group.
me

In

senility .and
poison of socialism have ag¬

marked. by

Let

seductive

England,, economic

every
mem¬
ber
of
this

,

his

sides of the At¬

succumbed.

the

cellor of the

utes about certain mental adjust¬
ments that a salesman can make

that

yet

ness, it should
be v" weighed

quit

few min¬

a

look for busi¬

scribe

sold

both

on

lantic; With more wealth, greater
vitality and youth, we have not

fects the out^

was

They quit it

He

>

theories

questions.
•>, On the evening of Sept.
18 Sir
Stafford Cripps, the British Chan¬

themselves a
good chance to become successful.

which
have

salesmen

the

.

I

your

on

ness

i

u s

preparation to move to a munity in this
higher position in the selling field, country.
In¬
is to know your own assets. KnoW sofar as
it af¬

is where you are weak, put a lit¬
tle work into that, or go and ask

help

b

his

Functional Value of Salesman

work around here to

reaching effects on the American and world economies which will
fully apparent for six months or a year. It will have some

\

something like that. Well, if that

You
,

oearing

\,

•

or

you

bit

work

strong point as far as per¬

very

On

The other place would be

"What did I

of an expert as far
subject is concerned.
On the other hand, if you have
this

suasive conversation is concerned,
know that point, and use it.

order.

should

I

a

you

in

the

as

of getting "British off

means

not.be

sponsibilities.

and

pretty much

as

backs."

The event of
overriding importance which has occurred during
the last month is the devaluation of the British
pound. This has far-

himself and to control

good

a

job every
day if you maintain a perspective
to analyze how you do on calls.'
>
Unless you do that you won't
improve your own methods of j °ver some other fellows. Now, if
sales work. You may have made t*13* is °Pe. of y°}*r strong points,
a
call and feel that you did a y°u
certainly should go overparticularly good job.
You not' board in_using it in your solicionly made a sale but you feel that tations. Talk in such a way that
the person you are selling will
you have made a very close con¬
immediately know that you are
tact that will continue.
pen

to control

buy what

really

are

you

our

that operation, his boss certainly
is not going to expand his re¬

that

have

Applauds devaluation

currency.

particular dis¬

a

or handling a certain num¬
ber of accounts, if he can not learn

you

as

in

out

trict,

know, for instance, that as
knowledge of finance and
of securities in the market, and
that sort of thing is concerned,
you

far

background

the

on

A man

ask yourselves whether you have
ever

.

,

(5)

Currency-wise, the English
have been living in a world- of
make-believe since the end of the

.L, ..(Continued

on page

20),

.

^

Volume

170

Number

THE

4844

/f

£ v''

•

■

,

■

.

v1.

1

COMMERCIAL

The

Electric Output

President, International Minerals & Chemical Corporation

Trade

Retail

Commodity ft-ice Index
Food Price

Index

Industry

Predicting foreign trade will play smaller Tole in America's business than in past, large chemical concern
executive points to unstable conditions abroad, socialization of industries, and inability of foreign producers to compete with U. S. producers, as creating abnormal foreign trade situation. Says
activities of-ECA has hurt some American industries and opposes tariff changes.
Hold devaluation
will have little effect on U.- S. imports and decries putting "guarantees" on capital invested abroad.

I

,r"

:

Auto Production

and

Business Failures
:

J
production for the country at large hampered by
labor-management disputes dropped fractionally last week and con¬
tinued to be somewhat below the high level of a year ago.
Total industrial

The

yet to deliver its deadly blow to
productive effort and hence was not reflected in

impending steel strike

much of the nation's
any

The

'

subject which has been assigned today, "Meeting the Return to Normal Economy,"
some
degree of optimism in this organization. The word "nor¬
a
good word," we like it, and most often it carries the thought of the good old days

would indicate that there is
mal" is

was

or

effects

The

of

two-week-old

a

close

involving

this

i)t ions

loads

d

were

to

-

when

co n

strike

coal

pe-^

some

riod

great drop in the past week's total output.

pleasant,

school

of

students

however,

workers, forcing the closing of the country's steel and iron mills froih
coast to coast, cannot fail to seriously disrupt the nation's economy.

tinuously
changing and
that

our

world

10, total claims for unemployment insur¬

In the week ended Sept.

me

is

con-

is

true

the similar
1948 level, while initial claims declined almost 9% to the lowest level
since November, 1948.
This was the fifth consecutive drop in initial

especially

claims.

considers

dropped 8%, but continued to be noticeably above

ance

ousmessecon-

omy

and

change what with the nation now confronted with two major strikes
in two basic industries.
The return to work on last Monday of some

picture, the situation continues very serious.

000,000 in wages.
Companies have lost $100,000,000 in sales and the
nation's coal-carrying railroads have laid off about 35,000 employees.
"

•

Based

averaging $66 a

the weekly earnings of steel workers

on

approximately $70 for coal miners, reports place the loss in
wages alone at approximately $61,000,000 a week, while losses in coal
that would have been sold already are estimated at more than
$100,000,000.
:
•;
week and

•

.

Pennsylvania Railroad reports that it has lost $11,000,000 in
already during the two-week coal shutdown.
It estimates
that the steel strike will result in a $10,000,000 revenue loss if it
The

revenue

lasts

a

month.

>

.

,

,

'

„

.

.

»

,

,

Computed in dollars and cents the loss to other industries, con¬
sumers, stockholders and workers is difficult to determine.
,

Almost all types

•

of

consumer

credit continued to expand during

August, the Federal Reserve Board reported.

y

;

the
war

the great
po¬

litical and
cial

upheaval

that
think

so¬

during

has

recent

oc¬

I

years.

all agree that if we are

we

to return to

normal, that "normal"
is not likely to be at all like the
one we formerly knew. So, at the
start
we
must
agreei that this
title is one pot well defined and
not

we

are

the

time

all

at

will

we

certain
return

to

as

sales,

indefinitely described condition.
hope I will not be considered
pessimistic if I say at the very
beginning, that in my opinion, it
be

different, and so in¬
definite, that it could best * be
stated by saying I don't think we
are ever going to return.
so

investment people, mort¬
bankers and insurance ex¬
ecutives are quite well aware of
The

This the many recent changes that
Was an increase of $265,000,000 from the previous month and $1,636,have taken place that> effect to-,
G00,000 over a year ago.
1*
V
>
::
day's business economy. Before
Total

credit hit

instalment

a

high for the postwar period

new

of

$9,613,000,000, up $282,000,000 for the month and up
for the year ended Aug. 31.
'
'
v

$1,641,000,000

,

Instalment sales accounted for most of the rise

over

July and

last year.
r

,

Charge accounts were the only form of consumer credit which

during the month.i ; They totaled $3,064,000,000, down
$59,000,000 from July to August and down $66,000,000 from a year
ago. Vv.
•••'• '■■■■£
/'
■
;■

•,

v

STEEL OPERATIONS FOR CURRENT WEEK OFF
RESULT OF NATION-WIDE

~X:.

•': /c-

..

90.3% AS

A

STEEL STRIKE

week

Phillip Murray

and

John L.

emerged from a critical adjustment period in a healthy state.
Settlement of
the steel strike
alone would only provide a

had just

the past war there
have been great economic adjust¬
ments, the growth of trade union¬
ism has been rapid and the gov¬

ernments of most all nations have

industry. The
Mr. Murray has
threatened to call a strike of another 500,000 workers in steel fab¬
rication and processing plants as their contracts expire, if the strike
has

strike

already idled about 500,000

men.

in basic steel isn't settled to his satisfaction.

considers
business from the foreign trade
viewpoint, that has been even
business

uncertain

on page

today

is

on

33)

a

quite

basis.

healthy

business,

'with
growth.
the visits of

need,

we

as

people to foreign lands and
traveling
here,
all
help

their

toward

the

better

Italy,
Greece, France,
Switzer¬
land, Germany and Belgium. Two
years
ago, I was in Europe, at
that time visiting Norway. Swe¬
Denmark,

and

Switzerland.

visit, I

France

England,

den,

After

can say

this

think
hold

we

responsible
should

for

the

of

study the
and conditions
and

economic changes

Americans

there.

-

welcome in

are

and
are
treated
most
friendly.
Travel conditions are
good
and
getting
better,
and
Europe

above

like the dollar
healthy business;
the traveling Americans leave the
they

all,

credits.

is

It

dollars

the

and

,

a

only

thing they
usually
souvenirs and bum

take out of the country is
some

poor

snapshots.
I

find

Europe
a

upon

learning

by

answer

from

returns

one

place

such

some

friend

meets

abroad,- he
things
over

and

here, most often,
you
have
been

will

ask:
"How's
there?"
I
usually
saying: "Things are

bad." That short report will most

suffice .and the subject
is immediately switched to mat¬
ters more nearly at home. I real¬
always

ize, however, Such
will

hardly

and

we

more

do

must

a

for

terse remark
this meeting

along/to

get

the

serious discussion of foreign

business

as

I

it. This

see

can

be

businessman's report,
and it must be recognized there
is much difference of opinion to¬
only

one

Abnormal Factors Affecting

here

in

the

many abnor¬
affecting
foreign
trade during the recent years and

which will continue for
in the future.

To

heavy military commitments bofh
in
Europe and elsewhere that
will continue for many years. We
have the task of maintaining large
and expensive military establish¬
ments at home. Much of Europe
and other parts of the world have
destruction

ing through
After
made

nations

later

and

war,

Lease

im

has

the

these

had

totaled

dollars.

billion

normal

to

"TOUR-ISM."

suspected of living in

we

at¬

an

to

give fair consideration to the
International complex prob¬
lems that exist today. I think that
is somewhat unfair and perhaps

many

exaggerated. We might be for¬
given if we feel a little closer to
American

solid

view¬

point. I try hard to be an Inter¬
nationalist, but as I travel about

today, I usually come home with
even more pride in being a citi¬
zen
of this great nation. We all

in

ciation

by Mr.

and

military

now

Sept.

} We
have
bought
large
quantities of gold so that our
hoard, today is the largest held
by any nation in history. There is
the
Import-Export
Bank,
the

World

Bank

other

and

Interna¬

tional monetary funds, the United
Nations has been established and
are

affairs.

have

trols
the

that

trade

developed
have

a greater ex¬
Currency con¬
established and

been

of

would

we

world

like

commerce

to

see

/

We

are

the

1949.

All of the

foregoing, which in¬
outpouring of large
dollar credits to many nations of
volved

the

give

the

world, has been necessary to
a near balance to our for¬

eign trade. In other words, if the
(Continued

on page

pleased to

announce

appointment of

/

Mr. Charles L. Churchill
as

Manager of the

Municipal Bond Department

;

Whether It's Hot

to

sure

read

Emmett F.

umn

every

Report"

120

Connely

our

Broadway

....

Telephone COrtland 7-8640

"Our
HAS BEEN

Reporter's

of

New York Office

Or Gold
Be

■'

WE TAKE PLEASURE IN ANNOUNCING THAT

ELECTED AS OUR PRESIDENT

col¬

OTIS & CO.

week in the

(Incorporated)

"Chronicle"

.those
,

going.

new

i

see

how

issues

are

to

t




:

American Securities

NEW YORK 4, N. Y.

25 BROAD STREET

•.
(

.•s,

X"!

'

V-

.in.-;

y

nv.q do j

1899

CLEVELAND
New

York

Cincinnati

Denver

.Chicago-

Dallas

"

Columbus
;Kl;

yy

Toledo
♦

*

'

.'iZi'J

Established

Corporation

„

just

doesn't exist.

Europe

be¬

and

agreements

to

before.

freedom

barriers

trade

New

than

tent

International

affected

bi-lateral

the

changes

other

many

have

is

Convention, Chicago, 111.,

20,

aid

European Recovery Pro¬

many

Ware

date

gram.

recognize we now have new obli-

fore the Mortgage Bankers Asso¬
-

;

address

In

Lend-

After the

sum¬

that

were

were

to

there is one

and

There

go¬

UNRRA, the Inter¬

was

Aid,

and

first

we

there

war

are

cancelled.

and

which

50

over

of

most

unpaid

this

and

of rebuilding.
the first World War, we
large loans to help other
years

phase of foreign relations that is
back

time

some

begin with, the

world is not at peace and we have

that

Midwest,

mosphere of Nationalism and fail

more

been

have

factors

mal

there

'

are

There

s

%

Trade

Foreign

,

day.
Out

but
I
still

and

a

all, keep our own country good
and healthy and strong if we are
to be of help to other nations and
the general world economy.

suffered

when
or

that

good:degree of Mid¬
west Nationalism. We must, above

many

all men
businesses

large

abroad

go

affairs,

do

can

to

on

understanding and

solution

future

International

m

mutual problems. I think

the

just returned from a trip
to Europe, during which I visited

*An

points

>,

.

(Continued

of

I have

mer's

tourist

very

continuous

of

one

college

usual

gations and great responsibilities

since most of these

out early next month, the trade paper

run

the import-export

and

true

American businessmen

This would be like shooting a dead horse,
labor contracts

form of social¬

recent years. When one

plants will already be closed for lack of steel by the time their
out.

some

on

istic planning. Thus, the regular
change that always goes on, has
been
greatly accelerated during

Lack of coal would eventually throttle the

breather.

steel

during

more

Lewis have: a double
strangle hold on the nation's economy, and, states "The Iron Age,"
national metalworking weekly, in its current release, even if one of
them relinquishes his hold the other can still bring the wheels of
industry to a grinding halt by choking their lifeline—steel. The next
30 days will be critical, this trade authority notes, unless both the
strikes in steel and coal are settled and only a miracle can prevent
serious dislocation of the nation's economy—this at a time when it
This

.

and

embarked

dropped

It is

too

gage

| On Aug. 31, consumers owed $16,452,000,000 on instalment
charge accounts, service advances and loans for retail buying.

teachers,
one

import-export

this

to

I

will

is

This

bus

were

Ware

Louis

curred-

According to press reports, the coal strike has cost miners $30,-

(

one

economic

80,000 anthracite miners and some 22,000 soft coal workers was not
without its good effect on the nation's householder, but in the over¬
all

when

recent

considerable

However, in two weeks the picture has undergone

.

of

traffic.

the

and

promise

men

there

and

summer

who mine the greater bulk of the nation's industrial coal
and the strike called last Friday at midnight by half a million steel

380,000

5

(1353)'

By LOUIS WARE*

Carloadings

Staie of Trade

1

CHRONICLE

FINANCIAL

Gloomy Foreign Trade Prospects

/

■

Steel Production

.V-'.

&

Buffalo

26)

G

THE

(1354)

CHRONICLE

COMMERCIAL & FINANCIAL

,

Should Rails Be Subject to Starvation

Regulation? Gieenewait Defends Big Business

By F. A. DAWSON*

^

Vice-President, New York Central Railroad

V President of du Pont Company tells National Press Club big busi¬
ness is not inimical to public interest and that growth of an indus¬

trial enterprise indicates

Reciting financial difficulties of the railroads, Mr. Dawson ascribes them largely to regulation, merely

"

for sake of

regulation and not for accomplishing constructive results. Points to low earnings of rails in
comparison with otber industries, and contends, because rails are now subject to competition of other

logical reason for over-regulating them. Says rail service could be
improved if fair returns could be assured them. ;

transportation facilities, there is

Thursday, October 6, 1949

no

*

It

inauguration
Sept. 1 of the

and

40-hour

would like to say that we are not

This method is to compare
profit with book net assets. This

insensible

method

for

all

the

common

age.

tends

to

em¬

present-day values.

hand,

-V,'

ployees out of
five, or
a total, na-

general level of railroad

tionally,

'

r>'\.

not too

But

every

too

of

I

do

high.

believe

not

that

the

rates

I know that rates

is

are

the

profit percentage, in these
times,
because the amounts at

plorations.

four

over-state

true

thing. It is our policy to ex¬
plore all situations where the net
effect of a change will be bene¬
ficial to revenues, and we are ac¬
tively proceeding with such ex¬

non-

railroad

I

the Central,

for

doing

sense

operating em¬
ployees. This
affects

to

which assets

companies'

are

carried

books

are

on

far

On the other

this

method is perfectly
valid as a rough guide for com¬
paring the differences in profits
made by different types of indus¬
tries.

The National

nearlyone

high, in terms of railroad
earnings, whether looked at by

million

themselves

tions

City Bank of

New York makes

em¬

ployees.

much-higher

Fred A. Dawson

It is true

in

or

industries.

relation

earnings

to

of

the

other

.

And I know they are

not, in terms of the value of the

be¬ goods transported. For example:
1. The esti¬
Interstate Commerce Commis¬
mates of the Interstate Commerce. sion
figures show that in 1939,
Commission are that the increased railroad
freight revenues repre¬
freight rates will bring in about: sented slightly under 8V2% of the
ditional freight rate increases

effective Sept.

came

$293 million, whereas the 40-hour
week, even at today's reduced
levels of employment, will cost
about $398 million. Thus by the
ICC's own figures these increased
rates will fall more than
$100

wholesale value at destination of
all

commodities

rail.

But

transported
wtih

even

the

by

newest

increases, ,this ^ratio will be

only about 6% ,of the wholesale*

value,

or

considerably below any;
for which calcula¬

prewar

pancial gap

tions have been made.

hour week

—

and at

time when

a

difficulty in merely breaking

mg

had gone

you

in.the continuous process

-—even

industries

such

had

week

the

as

steel

-

the

Thus

chemicals.

and

five-day;

become- inevitable

railroad

in

industry. But at the

time, the suddenness with
which the change had to be made,;
ip conformance with the recom¬
mendations
of - a
presidential
same

board,

emergency

the

makes'

switchover quite severe and quite

expensive.

""

r'

\

Your industries had three years

-

to absorb the change,

going from

48

to

and finally

to

40

44, then to 42,

hours, in successive years.
Those also were years when, by
and large, industry was not work¬
ing even 40 hours. In contrast, the
entire burden of adjusting from
48 to 40 hours has fallen upon

in

us

fell swoop, and the finan¬

one

cial impact also is accentuated by

the.

fact

that,

dollarwise, wage
higher in

rates have become much

the interim.

"

Effect of 40-Hour Week

The required

example, that
work

have

change

for

rates for shop

our

been

means,

farced

up

ap¬

proximately 26%

in less than a
During that time, the aver¬
age of railroad freight rates, how¬
ever, has increased only slightly
above 9%.
Frankly, it pains us
jqst as much as it pains you when
year.

our

rates must be increased.

tfiat is

one

must be

that

the

of

the

prices

But

which

paid because of the fact
railroads

have

become

an

over-regulated
industry
over-regulated in the wages they
must pay; over-regulated in their
ability to properly price their

...

services; over-regulated in being
required to continue unprofitable,
unneeded operations
,*
overregulated in all respects.
.

•With

these

newest

.

increases,

ate railroad freight rates too
high?
We are, of course, regularly told

that they are.

In

some

be,

in

that

ipay

and

cases,

they

connection

July, the ^.latest
napnth for which figures are avail-:

-




showed

the following profit per¬

centages for 1948:

—

cessful

99%

were

who

us

manage¬

thoroughly and painful¬

ly

that that

address,

about

G

Mr.

stated:

"I

Should

think

we

gether

desire for
nomic

want

a

been

called

trial

empire'

prog¬

all

strong¬

will lose
will

else

the

and far
C.

H.

Greenewalt

'du. Pont

far

more

outside

indus¬

quickly

more

attack,"

devastating than

any

prosper¬

even

live.
the

maintain¬

we

someone

America—

ous
an

in

fail

ever

and

And that, gentlemen, will
bring about a breakup of what has

America—a

er

more

comes

gain it.

eco-

We

ress.

business

the

on

we

ing that acceptance,

all get to¬

can

success

through public acceptance
of the goods and services we offer.

eenewalt

r

aware

better place

We have

won

in which to

for ourselves

highest living standard in the

Heavy Enrollment In
Inv. Banking Course

Mining and quarrying, 20.5%; world, and the benefits of our
CHICAGO,
ILL. — Thirty-two
manufacturing, ;■ 18.9%; trade, economy are spread among all our
18.1%; amusements, services,r etc., people, perhaps not so widely as employees of Chicago investment
10.5%; electric power, gas, etc., we would like, but nevertheless banking houses and commercial
9%;
telephone
and "telegraph, more widely than in any other banks have enrolled for the eighth
7.3%; the total of regulated pub¬ country. ,-V• • training course in fundamentals
lic utilities 8.4%;- and of course, I "As a nation we are not content of investment banking, sponsored
by the Central States Group of
at the bottom of the list, the rail-,
to stay put.: We are eager to push
the Investment Bankers Associa¬
roads at 5.4%.
\...
v.".. ••
ahead—to reach ever higher—to
tion of America
in .cooperation
In
other
words, mining
and spread the benefits of our produc¬
with the School of Commerce of
quarrying v showed
nearly, four tive genius, ever farther. ;
Northwestern
times the profit percentage last
University.
The
."The quarrel comes not in what
course will be taught by Warren
year as did the railroads; manu¬ we want to accomplish but how
Browne,
Assistant
Professor
of
facturing as a group showed more best we can get at it.
!'■•:" "
than three times the profit; trade
Finance, under the supervision of
" "That is where the problem of
Harold ■; W.
also showed more than three times
Torgerson,
Acting
bigness in business first rears its
the profit; and even the regulated head.
"Department
of
Fi¬
We have big business—we Chairman,
,

*

above

the

year

r

...

much

larger, "comparatively,
for the railroads than for
industry
in general..

for railroad

purposes,

is to

used
com¬

the net railway
income with the
pare

operating
depreciated prop¬
erty
investment.
Net
railway
operating .income is not profit,
of

but is

course,
fixed

;Over

the

vestment

cess

years,

increased

in the railroads

has

in¬
re¬

duced the cost of producing trans¬

better.method, which is

far
more
than
the
charges upon the additional capi¬
tal invested! From 1911 through
1948, the investment of the Class
portation

One railroads'increased

while

their

output

of

by 101%,
units

of

figure before
charges, leased line rentals,
and the. like.
On this basis, the

freight "service increased by 156%.
Thus, the increase in service out¬

railroad's

the

rate

a

of

return

for

the

months ending July 31 was
2.6%., and for the eastern

railroads, it
There

is

was

still

put
In

was

half

increase
the

again

as much
investments.

in

same

is

at the

achieved.
lists

training in the basic fundamentals
of investment banking to enable
inexperienced men better to co¬
ordinate

theory with on-the-job
and practical field ex¬
perience.
The
class
meets
for

training

thiee

you

larg-j

in this

country year by year since the be¬
ginning of the century you will
that success in

sessions

for

than

More
member

200

houses

have

courses

in" these

enrolled

since

their inception shortly after World
War
II, according to David .J.

Harris,

Sills, Fairman & Harris,
Chairman
of
the Central

Inc.,
States
tee.

Group Education Commit¬

Members of the I. B. A. who

have

employees

enrolled

Number of

I.
A.

B.

L.

G.

&

Co.,

Becker

Central

Coffin

&

Blair

Ellis

Blunt

Co.,

&

&

Bank

Burr,

First

—'

Co

Inc

:

Illinois

and

Inc

Co

Simmons___

Republic
&

Continental

;■

National

Trust

Co..

National

Bank

of

cago

Chi¬
—

Harris,

Hall

Harris

Trust

Hornblower

Kebbon,

&

Co

and

&

Peabody

Higginson

Merrill

Savings

Lynch,

Bank

Weeks..

McCormick

Kidder.
Lee

4

Inc

Whipple & Co.—l—

William

The

Registrants
Inc.——

Co.,

Emerich

Bacon,
A.

Member

A

Allyn &

Ames,

&

&

Co,_____

Co

Corporation

Pierce.

Fenner .&

Beane

Mullaney, Wells & Co
f aine, Webber/ Jackson & Curtis
Shields
&
Company

—.

H.

C.

The

Speer -& Sens

Whits-Phillips

Similar

by

more

sities

in

country,
cation

Co..

_____

Co.__

courses

have been

given

than 20 leading univer¬
various sections of the

and

the

National

Edu¬

Committee of the I.

B.

other

generation
that

that

is

led

ago

because

to

their

ever

existed,

the

decision

downfall

the

in

present course are:

of

a

of

Chicago

again be made available this

and

"21

employees

in

business, as in
any other endeavor, is indeed a
fugitive thing.
Most of us have
forgotten that some of-the leaders
see

that

expects

to

member

such

firms

financial

in

the

centers

nation..

A.

will

courses

year

various
of

the
;

.

or

Frank E. Adams Opens

the railroad

ful body in this country—the cus¬

COLUMBUS,

shrinkage

was

tomers

with

hands

searching

another

mine largely the railroad rates of

lower

on

If

the

two-hour

■weeks, until March 17, 1950.

taken, not by gov¬
ernment, but by the most power¬

.

investments

(Continued

of

est industrial corporations

of .today,
and
the
savings they make possible, deter¬

method

University.

The class is designed to provide a
broad
perspective and intensive

as

•

way,

look

it

once

will

only '2.4%'.

calculating the profit percent¬

Northwestern

nance,

.

even

.

of

its

ment are

„

only

Those of

for

opening
portion of his

including the ef¬
pf the pewest increases, the
railroad revenue per ton-mile will

A

big,, and in say¬
merely reciting

am

responsible

are

public utilities showed more than have always had it.
:
.' ': 1
half-again as much profit,." The ] "But many people now seem to
newest
poll of national public regard "big business as in
"some
opinion of the railroad industry way inimical to the public inter¬
be less than 41% above 1939.
In
shows that although the average est.
They look upon large corpo¬
other
words,
the
increase
in
person
mistakenly believes "the rations as 'monopolies,' 'concen¬
wholesale'prices in the/last ten railroads are
making about 10%, trations of economic power,' self¬
years is about 2V2 times as much
the average person likewise be¬ ish and
heartless,
seeking eco¬
as
the increase in the railroads'
lieves that they are entitled to nomic
aggrandizement for them¬
ton-mile revenues. I think, there¬
about 8%.
"'
'
selves at the expense of the rest
"■"
fore, that the increases in freight
of the people. Believing that, it is
rates have been extremely rea¬
Rails Over-Regulated
»
a natural consequence to favor the
sonable; I know that they have
Once again, I can come only to use of
political power to restrict
been absolutely essential.
the conclusion that the railroads
corporate activities, to bring their
are
over-regulated, and that in operations under the control of
Rail Profits Low
many
respects, they "are being the
government,
and
in. some
Are railroad profits too
high,
regulated tpday for the sake of cases to break them, up.
on
the average?
No, they def¬
regulation, rather than for the
"Any one who has studied the
initely are not. There are several
sake
of
accomplishing anything economic problems of the nation
ways to figure the profit percent¬
constructive by such regulation.
must
know that these -premises
age.-." 'V
•.
Please get me right: I am not are wrong. ; A business, whether
One way, often used
by indus¬
it be big or little, to be successful
try in general, is to compare your complaining "about your profits,
for profits make the wheels go must serve the public interest; and
profit—or call it net income if
round. But I am concerned about if a business grows it does so be¬
you prefer—with your total busi¬
the vunrealistically low level of cause the quality and price of its
ness
volume, which commonly is
the railroad industry's profits — products win public
confidence.
called total or
gross, sales or rev¬
for we must have a fair level of Its ultimate size is then dictated
enues.
On this basis, the nation's
profits to make the wheels go only by the aggregate demand of
Class I railroads made only 3.9%
around }... . in your service. The its satisfied customers. There is a
for the seven months
ending July
clear difference between protect¬
same principles of sound business
31.
The eastern
railroads, who
competition
and
protecting
have been hit by heavy increases which apply to other industries ing
in terminal expenses and other apply with equal force to the rail¬ competitors, and true and lasting
economic progress lies in encour¬
factors, made only 2.2% for the roads. That is why the railroad in¬
seven months ended with
dustry urgently requires a sub¬ aging the most efficient producers
July.
so that all people may have more
The limitation of the method stantially higher average annual
and better things for.their mon^y.
of
comparing your net income return in order to continue to
"Actually growth in an indus¬
with the dollar volume of your progress
and fully servg
your
trial enterprise has only one con¬
needs. It is only through a fair
business to obtain a profit
per¬
notation—and that is success in
centage is that, as far as the rail¬ return of at least 6% on our de¬
pleasing three groups of people—
roads are
property
investment
concerned, it does not preciated
its customers, its employees, and
reflect the heavy investment in that we can obtain the funds nec¬
its stockholders. That is no
easy
plant and rolling stock required essary to constantly increase our
task.
The record also shows that
to do that business.
and
thus
This invest¬ efficiency,
keep
our
there is nothing static in that sue,
ment in capital
equipment must rates relatively low.

1939, but

be

I,

and effect.

cause

In

it is

and

ing, that

fect

seven

! *An address by Mr. Dawson be¬
fore the New England Shippers
Advisory Board, Bretton Woods,
N. H., Sept. 29, 1949.

whole-'

prices .>in

'{ able,

Virtually all of

i

to the five-day week long before

year

To state it another way:

most railroads already were find-- sale
even.

regular tabula¬
this particular basis. The
available
tabulation

last

its

■ v

■

■

-

rate

million short of covering the

fi-j
imposed by the 4G-!

on

bank's

■

.

as being in the public interest, and
huge industrial corporations, particularly the E. I. du Pont

the

many

below

"

•

Co." defended large businesses

denied

sorbing it.

speaking

•

t',;| Addressing the National Press Club in Washington on Sept. 29,
Crqwford H. Greenewalt, President of E. I. du Pont de Nemours &

undoubtedly is not news to you that, this year, while the railroads are still rolling,
Co., were sti¬
they are not rolling in money., Many of us, particularly in the east, have been having diffi¬ fling competi¬
culty in "breaking even/' Great additional problems have been imposed by the unavoidable tion.. by ab¬

week

in pleasing three groups:
and its stockholders.

;

de Nemours &

With virtually
48 hours' pay

:success

customers; its employees;

.

page

20)

costs

"The du

dollars

and

Pont

in

their

hot

OHIO—Frank

E.

Adams will engage in a securities

eternally
for
business from
better quality.
Company is sue- i Gay Street. '

offices

at

22

East

170

Volume

J

THE

Number 4844

COMMERCIAL

&

FINANCIAL

CHRONICLE

•(1355)

1

on
By LOUIS ENGEL*

Advertising Manager, Merrill Lynch, Pierce, Fenner & Beane

Ahead

of the News

By CARLISLE
A

half

million

Mr. Engel, in pointing out stock brokers

can no longer
depend for business on handful of rich and fman-'
cially literate, but must reach great mass of middle income
people who have idle funds, urges adver¬
tising securities "in same way you advertise breakfast foods and automobiles." Stresses
changed mar¬

BARGERON

steelworkers went

strike

on

over

ket for securities because of redistribution of income in
U. S. and

the weekend.

is

their babies could have milk?
So that their wives could have better than flimsy garments?
So that

For what?

For increased wages so that

John L. Lewis once dramatically put it, for
their shrinking bellies? No!
«.
It was none of these things. As a matter of
fact they went on strike for nothing that would
give any immediate benefit or any benefit in
they could have food,

as

.

the

distant

unusual
gone

future to

90%

of them.

It is

most

a

on

their

of

demands.

But

there

gotten

privation

similarity

a

/•
■
V. \,
-j " . . ^,
steelworkers went

.

.

when

the

*

.

.

ities,

income

the loss in wages they

have

with ' many

talked

Governments. In

of

in later years,

against the more immediate earnings they will
lose, completely defies the understanding. - * : <
j
T
Frankly if the proposition were put to me in one of these mass
industry plants as to whether I wanted to participate in a contribujtory pension plan or have the company pay it all, I should prefer the
first.

Because in this instance, a trust fund would have to be set up
and in the event the company for which I was working went bank¬
rupt, this fund would be inviolate. I would have my stake in it.
The question of whether I got a pension at my retirement age

in¬

find

in

1

the

union

could

could

to

cease

easily

have

its

one

Then

hold.

reason otr

United

another

States

Stee;

that pensions must be suspended on account
of things.
L .' |
The point here is that the workers of
Steel, in my opinion
would be much better off with a contributory plan.
%';■
Be that as it may, they went on strike for a noncontributory
plan. They stand everything to lose, nothing to gain. A capitulation
on
the part of Steel would mean what?
Not a penny increase to
partly compensate for the days or the weeks and weeks of wages los ;
very

the

on

say

part of the workers.

To

the

overwhelming majority of the

strikers, it means something 10 or 15 or 20 years from now. And this
inevitably would have been worked out in a year or so.
Probably not in all the history of organized labor has there
been

crazier strike.

a

.

\

Then why did it
great competition

„

in

latter

of

whom

come

about?

We

with John L.

V

told that Phil Murray is
and Walter Reuther, .the

are

Lewis

his

wants

job. And insofar as Lewis' desires are
concerned, he having no hope, we assume, of getting back the CIO,
he simply wanted to embarrass Murray because after
having been
responsible for Murray's career, it annoys him to see Murray's name
in the headlines
One

this

weren't because
are

bound
I

opinion, in
not

seems

is

strike

with

no

considerable
called."

was

immediate

funds

selves

thus familiarize

and

a

a

level

own

re¬

could

more

or

some

amount

of

afford

sponsibilities of security owner¬
To avoid this, it is economf.
ically/and socially desirable that
securities
dealers
revise
their

were

of

to

that

means

Bill

and

Smith,

Ours

cause

and

in

bonds

There's

y you

m

j*

The most

the most obvious
with

swer

can't

respect to

unin¬

an

business.

We

undeveloped

are

1946

on

Board

the

advertising

which

or more a year

of

those

people
is

Here

them

Survey

ownership

of

to a broker, the man
supposed to know most

go

thought

it

was

balance

were

"a

"

:

owner¬

ignorance. After all,

was

no

likes to

curities
no

were

informed

said
,

in

as

or
who
equally un¬
who frankly

gamble

were

those

Survey

Roper
made

further

in

,

1943

that this
provides

documentation

?

of

the

point. This Survey was conducted
among people with the top 30%
incomes in the country. 55% of

*Ari address by Mr. Engel be¬
the Washington Advertising

them

C., Oct. 4,

time

1949.

had
or

owned

other.

stocks

But

most

at

some

among the steel
be surprised if there
issue involved' these men

confronts

us.

This announcement appears for purposes of

an

for

several

know

what

in

the

name
of goodness he has asked
They have been on part time work
they are on full time strike and they

NEW

didn't

know

even

stocks

months

and

now

slightest idea what' they are striking about.
are
striking for something which they are
bound to consider of the future, not
involving take-home pay. The
future something they've given little or no
thought to in the past.
i
The question seriously arises as to whether these Big Shots—
Murray and Lewis—have not overshot their strength. It will be
The

something about the operations of
the Exchange, 31

% did not know

how prices were arrived at. Most
of them thought they were
set

fixed

or

than

An

by

arrived
process.

at

brokers,
rather
through an auc¬

,

,jV

interesting to

i

see

how they

come

; Public ignorance is always ah
appalling thing when you en¬

counter it for the first time.

Paine, Webber Co. Adds

Ogden Edwards Joins
Bear, Stearns Staff
Stearns

Bear,

&

Co.,* 1

(Special

j
Wall

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

that Ogden E. Edwards

announce

is

now

Exchange,

associated with them.

Edwards

was

Mr.

LOS

The

Financial

Chronicle)

(Continued

on page

placed privately

being offered to the public. >■

<

Slinkard, Jr.* has become
with
Paine, Webber
Jackson
&
Curtis,
626
South
Spring Street. He was previously

-

with Pacific

48

Dated October 1,

1949

PRICE

Company of Calif or
"

nia.

Due October 1,

1974

■

100*4% AND ACCRUED INTEREST

'y,~.

Joins Hill Co. Staff
(Special

Chilson, Newbery

Chilson, Newbery and Company,

Inc.,

Twenty-Five Year 2.85% Sinking Fund Debentures

connected

to

The

Financial

Chronicle)

CINCINNATI,- OHIO—John
-

•;!5

formerly with Barf

Corp.

With

§

ANGELES, CALIF.—Wil

liam J.

Brothers & Co. and Union Securi¬
ties

to

Main

Street,

& Co.,

resent them in Sullivan County.

the

Carew Tower, members of

New

Stock

Kuhn, Loeb & Co.

H.

joined the staff of Hill

announce

that Franklin W. Brooks will rep¬




Ferris has

York

Exchanges.

and

Cincinnati

October 4, 1949.

But

lest you be too discouraged by it,
let me point out how common-

Richfield Oil Corporation

out.

;

Example of Public Ignorance

record only. These securities were

$25,000,000

;

steelworkers

were

sold there. Of those who did know

ISSUE

can't have the

are

significantly in the intervening
At that time 34% of those
questioned did mot know a thing
about the Stock Exchange. They

signifi¬

through the undersigned, and have not been and are not

These

survey

years.

would

about.

j

which Mr.
Roper made for the New York
Stock Exchange in 1945, and there
is not much reason for believing
the findings have
been altered

tion

they didn't know.',

The

firm

con-

a

reason

business,

me

another

from

classi¬

not

■

let

lem that

own

answer:

securities

the

Now

making

did not

their

is

about

would

a

had

im¬

made

friend, and only 25% said they

would

admit his ignorance
subject, and it is altogether
probable that those who said se¬
of

faced with

of

the

ship
one

market

Washington, D.

a

that

Actually, from these/figures it
be assumed that the princi¬

fore

Club,

agency

pal deterrent to securities

pressive proportions. The Federal
Reserve

an

may

to an4

that
question involves, first of all, an
appreciation of the enormity of
the sales problem that confronts
this

breakdown

fiable.

answer\ to

adequate

the

why

and

is—"Why Advertise?"
An

of the dozen

give you just two
other facts to dramatize the prob¬

;

one

any one

Finally, when Mr. Roper asked
they would go for help in
buying securities, 31% said they
would go to a banker, 28% to

another 31%: had "no
reason"; 24% said that they didn't
know anything about securities;

same

£•

identify

brokerage houses/ Their names
absolutely nothing. "
*■

gamble";

>: ^
basic question and at
,

of

meant

,

in

25%

who

31%

advertise breakfast foods

nd automobiles.

once

you

the

largely

asked

we

securities.

about stocks

why

securities

also

$5,000

language that they
understand

reason

no

is

show

wives

their

-

Smith

and

non-owners

special

they're going to have

Jones -and

to

conducted the survey for the Fed¬
eral Reserve Board to give us a

forget financial lingo and talk

to

varied

was

othei*

formed market. We know this be¬

and

to

list

where

business with

do

to

got

Jones

dozen leading brok¬

that

best known regionally—50%

the

not

An Uninformed Market

marketing methods. Brokers can
no longer depend
on doing busi-*
ness
with just a handful of the
rich
and
financially
'literate.
John

of the

those who owned securities could

ship.

They've

from

take cognizance of the names that

securities!

The big question is why the
49% didn't own them.

list

ers—and

$7,500 income and up, 51% of
people owned securities. Ob¬

year

fact

these workers to strike about.

.

-

the

at

impressive

couple of weeks ago that John L. Lewis was,.in my
awful hole with his workers. Their dictatorial boss

a

to

And

respon¬

securities

the Survey. When presented with

or vir¬
tually all of them making $7,500

them¬

and

the-rewards

with

Another

$5,000-$7,500 income per
22% of .i all
the families
stocks.

the

by

ownership.

the

viously, all of the people

••;j

invest''idle

to

At

entailed

grumbling
I

wage

to wonder what it is all

wrote

Louis Engel

fj#' ■>•/;>;■<

classifications.

about

informed

much."

so

hears* there

workers that

the

induced

be

now ;

can

e

advertise

depression days and for

of

income

e

well

sibilities

of

year,
owned

mid-

money

upon the
I had paid in and the money he had been required to lay aside
I suppose United States Steel will be with us
forMa Jong time

level

fu¬

great

p e o p

at all. They had only
bought them and put them away.
Obviously, they were
not
too

is

income

unless

of

own

years,

securities

particularly interesting to
the question of securi¬
ties ownership in terms of various

capi¬

and

upon

It

the
mass

people owned
homes and 78% owned

years,

5

con¬

the

of those who owned
not
bought any in
37% hadn't sold any in
and 27% had never sold

had

5

consider

it-

the

stocks

life insurance.

may

not rest upon the solvency of my employer at the time.
It
would not rest upon his whim or whether the union had been able
to maintain a contract with him that long.
It" would rest

would

run

their

ture

percentage of tne workers at this time. Next year, some other workers,
of course, and next year some others after that. But for half a million
workers to go out on strike now for something that' might benefit

But it could

to

cantly, 58%

bonds,

or

48%

new

d 1

stocks

than

tal

time labor
leaders, men who, as they approach their graves, question what all
their fight has been about, question whether, when the .time and
the wages lost in a long strike are figured, the
organized workerls
have ever gained a thing.;;
v ^:-j|v-v'!v
;/r;W But in this instance, there is no possibility of their gaining a
thing; well, not more than. 3% of those who went on strike.
No pension plan can possibly affect more than a very small

them

country owned

self- starved

old

showed .that" only
spending units in the

trast,

for

Carlisle Bargeron

the

of

other

leads

well

suffered.

assets

9%

in

American

- ■

forthcoming.

I point to the changed market for secur¬

country,

dustry

nothing they could immediately gain.
No increase in wages to wipe out after a year
I

sumer

the

the threat that

of

not be

»3>

resulted

was

or so

the brokers themselves.

on

which

las

i;hat

strike

on

to be blamed

measure

this

into debt and occasionally after weeks

months

unless greater mass of public

warns

for nation's industries will

generally to invest in stocks during the past three years, when
hey have been selling at bargain levels and returning record
yields of 7 or 8%, is in good

of

to

and gone

stocks, needed equity capital

redistribution

They have suffered tremendous priva¬
get this, they have lived on soup lines,
their wives have suckled the youngsters closer
to their breasts, they have pawned their furniture

or

to

Failure of the public

from

strike, indeed.
Heretofore men have
strike for a 10% increase, an immediate

benefit.
tions

attracted

31)

.

COMMERCIAL

THE

(1356)

ft

FINANCIAL CHRONICLE

&

deed, the main
considerable

in

of the devaluation will

to come.

the

British

the

remain

present wage ceiling, wages
likely to follow the cost of
living. Demands for higher wages
bound

are

devaluation

to

lead

industrial

to

more,
Paul

Dr.

suspended.

Einzif

as

is less

these

far

so

as

30%

than

full

cut ahead of it.

even

has not been

important than to ascertain

the rights and wrongs of

extent

work

prices of British goods in terms
sterling are certain to rise to

of

harder

difficult

will

than

it

devaluation.

the pres¬
ent decision is to try to foresee its
consequences,
the following are
some of the questions which call

British goods are quoted in terms

be;

even

more

as

for

countries

before

was

Nor

is

the

go

out

the

way

of the currencies of the

answer:

V'.

'

A

'V

(1) Is the devaluation likely to
or
substantially moderate
the drain on the British gold re¬
arrest

serve?

extent.

some

(2)

it

Is

likely

■

stimulate

to

(3) Is it likely to
rise

stantial
of

prices,

in

the

cost

sub¬

cause a

British

level

living,

of

and

wages?

(4) Is it likely to stimulate
increase

(5)

of

British

an

productivity?

What will be the effect

on

the economy of the United States?
There

the

be

can

little

devaluation

doubt

will

slow

that

down

the outflow of gold to a consider¬

able
is

extent.

Its

immediate

effect

that
importers ' of
British
goods in the United States and
elsewhere, who have for months
been deferring their sterling pay¬
ments, will not pay up, and this
v

should

alone

go

long way to¬

a

wards checking and possibly even

reversing
outflow

of

while

In

British

been

tion

short

a

gold.

for

orders
have

for
of

goods

witnheld

the

addition,

in

anticipa¬
now

be placed,
so
that, apart alto¬
gether from the stimulating effect

©£

the

lower

British

sterling

exports,

rate

on

this

temporary
factor should in itself go a
long
way towards improving the Brit¬
ish balance of payments.
On the other hand, the time
lag
will provide a temoorary factor
in the opposite direction. The
post¬

the

orders

valuation

months

placed
will

after

result

before

the

in

de¬

actual

consideration

gold

by

reserve will not benefit

the

temporary effects

devaluation until the

of 1950.

fully
the

of

first-quarter

V

.

of

devaluation

serve

on

on

British

In this

respect there
unwarranted

have

to

need

no

to

be

in

increase

the




vol¬

The devaluation of
number

a

to date—Registrar &
Company, 2 Rector St.,
6, N. Y.

devalua¬

reserve.

<

sterling and

which

well-es¬

ican

there, unless the
British exporters want to try to
expand their markets by quoting
lower dollar prices. In very few

lose

have

already

a

tablished market

instances
valuation

by

cutting
42%.

the

In

dollar

any

case

be

not

extent.

volume of

much

The

than

enable Britain
lars

than

chances

she

42%

to

in

earn

did

are,

are

Britain

exports

only

will

Hirsch

Companies

&

Co.,

New York

25

review—

—

Broad

from

to

the

—A.

by

enabled

orders

be

South
diverted

to

area

increase

an

to

the

of

United

natural

be

area

in

better

a

goods

in

and

other

British

States.

should

position

to

devalued

there will be

decline

terms

of

sterling

British

and

Last

sterling
but by no

means

least, the very substantial
leakages resulting from the heavy
on

sterling in black

kets abroad will

of

longer be

cheap

mar¬

stop. It will
possible for conti¬
now

sterling

bought

in

the

black market, and to re-sell it for
in
the
United
States,

dollars

thereby depriving the British dol¬
lar

reserve

these

devalued

mittedly,
wards

all

the

currencies.

this

will

Ad¬

help

tween the dollar

area

of the world.

is

liable

But the adjustment
be fairly painful for

to

American business.

Fireman's Fund Insurance Com¬

available

randa

brief

are

of

sterling

the
area

General

on

memo¬

Motors

Studebaker Corp.

and

proceeds

exports.

of

In¬

York 5, N. Y.

the

^

American

News & Views—leaflet of
ket notes—Bache

-

Co., Chrysler
Building, New York, N. Y. -

Over

Stock

the

-

Index

-

Counter

—

Industrial

Booklet

recording

10-year performance of 35 indus¬
Quotation
Bureau, Inc., 46 Front Street, New
York 4, N.
trial * stocks—National

General

study

Annual

Railroad

favorable

Outlook

factors

—

H.

—

study

of

Hentz

&

Co., 60 Beaver Street, New York
4, N. Y.

;:'r;Vv

*

at

Corporation—

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

Indiana
Limestone
Company,
Inc.—analysis—Ferris & Co., First
National Bank

Building, Dallas 1,

Texas.

*

Leonard Refineries, Inc.

*

:

-

spe¬

—

Abitibi
pany—

Company,
Penobscot
Detroit 26, Mich.
Longhorn

Power & Paper Com¬
bulletin—Hill Richards &

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

Company,

Power

&

Light

—

memorandum—Dreyfus & Co., 50
Broadway, New York 4, N. Y. ,•
American

.

Portland

Cement

Inc.,

Vitrified

Products—

Alamo, National

Building, San Antonio 5, Texas.
McLouth Steel Corp.

—Andrew
American

Building,
V

Company—new analysis—Russ &

C.

Reid

circular

—

&

Co.,
Building, Detroit 26, Mich.

Ford
: ,v

New Orleans Public Service Co.

—Analysis—Ira Haupt & Co., Ill
Broadway, New York 6, N. Y. f

New

analysis—Zippin & Co., Inc.,
208 South La Salle Street, Chicago

Oregon Portland Cement—Lato
data—Lerner &

Co., 10 Post Office
Square, Boston 9, Mass.
>
-

Baltimore

Ohio

&

Railroad

Company—analysis of First Mort¬
gage

4s of 1975—Vilas & Hickey,
Street, New York 5, N. Y.
S. A.

14

5, N. Y.

Cincinnati Milling Machine

Convention

Capital

cial memorandum—A. H. Vogel &

Petroleum

Heat

Schuster

Ed.

&

ing Co.

available

circulars

are

on

ern

Pacific Railway

Co., and The

Texas Co.

Co., Inc.—spe¬

Milwaukee 2, Wis.

available

current

Also

—

cial report—Loewi & Co., 225 East

Co.

MacAndrews & Forbes Co., North¬

Power

&

memorandum—Goodbody & Co.,
115 Broadway, New York 6, N. Y.

Mason Street,

—circular—Fahnestock

sociation

Com¬

Ira

—

Also

5-9, 1949 (Colorado Springs,
Colo.)
National Security Traders As¬

Insurance

mar¬

&

—circular—Blyth & Co., Inc.,

Oct.

analysis of

an

pany.

Wall Street, New York

Field

{

.

Also available is

Corp.

& Co., 65
Broadway, New York 6, N. Y.

Investment

Wall

1

pany—analysis—First Boston Cor¬
poration,
100
Broadway, New

Bank of America N. T. &

In

Co.,

esting—Eastman, Dillon & Co., 15
Broad Street, New York 5, N. Y.

49 Wail

COMING

&

Low Price Speculative Stocks—

to¬

and the rest

Kidder

list of stocks which appear inter¬

balancing of trade be¬

news

on

is

of

bulletin

a

the Pabst Brew-,

V-.v"' -M'

•

.

Southern Advance Bag & Paper

Co., Inc.

analytical

—

memoran¬

dum—Boenning & Co., 1606 Wal¬
nut Street,

Philadelphia 3, Pa.

The Broadmoor Hotel.
Citizens Utilities Company—an¬

Oct.

11-13,

1949

(Atlantic

City,

N. J.)

Fall

meeting

Governors
Stock
HaH.

of

of

the

the Board
Association

of
of

Exchange Firms at Haddon
:

/

,■

,

Oct. 12, 1949

[

Cleveland Security Traders As¬
sociation

Fall

Party at the
grin Valley Country Club.

alysis—G. A. Saxton & Co., Inc.,
70 Pine Street, New York 5, N. Y.
Also available is

discussion of

a

the Retail Industry in the current
issue of

Saxton's "Monthly

Cha¬

.y

Zippin & Co., 208 South La Salle
Street, Chicago 4, 111.

:

.

(St. Louis, Mo.)

-Annual meeting and election of
officers of Security Traders Club
of St. Louis.

i

of

Stock

!

Investment Bankers Association
Annual Convention at the
Holly-

sociation

a

Bank

.

Security Dealers As¬

24th

Annual

Dinner; at

the Hotel Pierre Grand Ballroom

Chronicle)

gage

Chase

O.

have

partnership with offices
Street, to

en¬

in the securities business.

Hope & Co. Adds
(Special

&

Trust

Illinois
Co.

of

National

Chicago

—

staff

The Financial

to

Chronicle)

;

DIEGO, CALIF.—John H.

of

been

has

Hope

Trust and

&

added

Co.,

to

San

the

Diego

Savings Building.

.

circular—Swift, Henke & Co., 135
South La Salle

Hotel.

(New York City);

Leon

at 242 South Beaver

Goodwin

Continental,

Street, Chicago 3,

111.
New York

formed

analysis—Coffin, Betz &

Exchange

Dec. 4-9, 1949 'Hollywood. F»a.t

Dec. 9, 1949

to The Financial

and

adelphia 9, Pa.

(New York City)

Association

New

Berry and Chase
(Special

SAN

Nov. 15, 1949

Street,

Consolidated Engineering Corpo¬
ration—

Co., 123 South Broad Street, Phil¬

firms annual meeting and election.

Wall

5, N. Y.

WOOSTER, OHIO—Edward

Colombia Bolivia—New study—

Dallas Bond Club Annual Fall
Field Day at Northwood Country
Club.
'
-<>>; '
'; •

vood Beach

York

52

Stock

tive figures on listed and unlisted
stocks.

Auchincloss, Parker &

—

Redpath,

Berry

Oct. 12, 1949 (Dallas, Tex.)

Oct. 20, 1949

Virginia Electric & Power Co.-—
circular

Digest," which contains compara¬

(Cleveland, Ohio)

,

currencies,
tendency towards

a

of

purchases.

area

compete
more
American do¬

the

Britain.

exports of

rubber

area

a

to

in

the

materials to the United States
also likely to increase. For

now

able

exporters

which

by

many

will

dollar

as

instance,

most

dollar

since South Africa pays in
gold, this change would be fully
as
beneficial to the British gold

are

be

vigorously

other

de¬

And

raw

will

and

M.

Street, New York 5, N. Y.

EVENTS
the

means

be

pounds,

the

reserve

British

mar¬

Elliott Company—memorandum

Street,

4, N. Y.

to

to

position. Owing to the increase of
American prices in terms of South
African

kets.

dol¬

devaluation to improve her dollar

African

expected

are

of their foreign

many

*

the

area

order

more

before

valuation.
Nor

exporters

British exports to the
will have to be very

area

less

expected to fall. Amer¬

mestic market. The dollar will be

therefore, that the increase in the
dollar

are

grossly overvalued in relation to

done, for, as
stated above, the sterling price of
British goods is likely to rise to
some

Prices

necessary

prices by full
could

be

currencies

advantage of the de¬

to take full

this

it

would

of other

Distillers Corp.-Seargrams, Ltd.
—circular—Sutro Bros. & Co., 120

Broadway, New York 5, N. Y. 1
Finance

reduce

unfavorably on
economy of the United States.

the

nental firms to buy
Malaya rubber
or
Australian wool with the aid

seems

that

now

depletion of the gold

whatever for any reduction of the
dollar
price
of
British
goods

not

Britain. The popular argument is
th&t, in oider to be as well off as
before
the
devaluation, Britain
would

is

are

pessimism

or

temporarily obviated the
danger of unemployment through

of

There

no

months.

productivity

is bound to react

States.

re¬

some

its

of

to apply unpopular measures,
they, are. needed in order to

good in respect of exports to the

gold

exports

likely to be felt for
much

the

to

United

discount

Likewise, the permanent effects

likely

consumption,:

holds

owing to the high prices of dollar

January. Possibly the

ernment

a

also

to

short positions in sterling will be
able to prevent a sharp fall in
the
quarterly
gold
figures
of
October and

in terms

covering of

whether the

seen

no

compete with synthetic rubber in
the'American market. In addition,

payments. It remains therefore
be

be

question appreciated
of sterling.

Moreover, sterling

some

importing

in

goods during the last two or three
months is yet to produce its full
adverse effect on the gold reserve.
take

as

gov¬

,

tion has

will

exports

will

far

so

for a lowering of these prices in
proportion to which the currencies

there

ponement of purchases of British

It

in

increase

which

the devaluation will

And

need

This

British and sterling area exports,
ia particular to the dollar area?

anniversary edition of book¬

revised

New York

It is

improvement

.

more

50th
let

Transfer

placency, and the government's
task in persuading the workers to

the

between

-

.

Davidson Bros.—circular—Wat-

Also

of

to

necessary

'

1

ling, Lerchen & Co., Ford Build¬
ing, Detroit 26, Mich.

•

for the better.

to be feared that the

.k

,

Origi¬

to win in most instances. Because

in the gold position resulting from
the ^devaluation will breed com¬

be

the devaluation of sterling and of
the currencies concerned. For the

What is much

Stock

and owing to full em¬
ployment the workers are likely

export
but not in proportion to the

would

difference

was

interested

prospects through the devaluation

it

and
that of 1931,

send

Federal and State

disputes,

of

'

•

firms mentioned will he pleased
parties the following literature:

nal Issue & Transfer Tax Rates—

are

From the point of view of Brit¬
ish productivity, the change of the

far

countries to increase. In

restored,

•

>r

the

may

the

was

it

will

volume of British exports to

when

gold

when

goods

they also
devalued their currencies by full
30% there is no need for the

policy

standard

British

increase in the cost of living, and

a

;

on

large number of

thing,'

one

1

It is understood that the

pro¬

ish example. In so

against the
of 1925,

devaluation

employment, wages arc
likely to follow very closely the

For

and

for

the

living and cost of

countries have followed the Brit¬

\W'i

still argu¬

ing

~~~

exports by 42%, and it
is only if she is able to increase it
by more than 42% that her bal¬
ance of payments would
benefit.
This argument is entirely false.

against

policy of 1949,
as
they
had
argued,
and
are

of

competitive.

of her

ume

British

the

effect

case

*

for

i

Sir Stafford Cripps
unduly optimistic about

duction, the full effect is not ex¬
pected to .exceed 10%, in which

remain the subject of heated controversy for
Economists and politicians will argue in the

and

Recommendations and Literature

lose

to

•

Notwithstanding the
decision
government's ef forts to maintain
pound, of the timing of that decision, and of the extent

to devalue the

Dealer-Broker Investment

market

after

not

the cost of

of sterling black
favorable effect of devaluation on

LONDON, ENG.—In all probability the wisdom of the

and

black

no

Although

British productivity.

'sixties

sterling

has been

imports from U. S. to Britain; and (4) cessation

'fifties

be

to

Einzig lists among probable effects of devaluation of sterling:
a lowering of drain on British gold reserve; (2) a slow but
eventual increase in British exports; (3) diversion of South African
(1)

years

the

devaluation, in
more
gold
through such leaks.

Dr.

many

should

there

order

By PAUL EINZIG

no

that

is

extent

government wanted to ensure that

British Devaluation

Foresees

why ster¬

reason

ling has been devalued to such a

Consequences of

market leakages.

Thursday, October 6, 1949

(Special

Also

First

Joins Ford Weber Staff

available

National

circulars

are

Bank

and Northern Trust

of

on

Chicago

Company.

to

The

TOLEDO,
Szabo has

Financial

Chronicle)

OHIO—Nicholas

V.

joined the staff of Ford

R. Weber &

Co., Spitzer Building.

•'

Volume 470

Number* 4844

Public

THE

,*

COMMERCIAL -&

-

FINANCIAL

President, National Securities and Research Corporation

By OWEN ELY

Picturing present business situation as one of progressive readjustment, in which supply and demand
is coming into balance, Mr. Simonson furnishes data as to current industrial
production, gross national
product, consumer income and spending, employment and wages, etc., as compared with previous

'

in

reDort

"Wall

the

Journal"

Street

9

By HENRY J. SIMONSON, JR.**

Standard Gas & Electric
recent

(1357)

Appraising the Business Outlook

Utility Securities

,

A

CHRONICLE

indicated

that

Standard Gas & Electric might issue an "outline plan" of dissolution
in the next month or so, since former plans are now considered obso¬

periods. Looks for continued decline in wholesale prices and estimates current farm income at
2ff/%
times 1941 rate. Finds, statistically, business on
relatively high level with prospect for its continuation
recently "cleared the decks" for a new plan
by selling 250,000 shares of Louisville Gas & Electric—the proceeds
i
through current year and into 1950.
being nearly sufficient to retire the bank loan. While it was said
As we all know, our present
that the new plan would not contain any definite allocation of assets
economy is extremely complex. Events of great magni¬
among the four classes of stock (since such allocation will depend tude happen suddenly and frequently without advance
warning. Therefore, while I am
on
the outcome of reorganization plans for Philadelphia Company
going to speak on the general business outlook, I want to make it clear that the opinions
and Pittsburgh Railways), there have been a recurring crop of Street
e x p r e ssed,
•3>rumors that favorable developments are pending for the $4
second while repre¬
inflationary, and the recommen¬ high last year of 195 in October
preferred.
*
dations of Chairman McCabe of and
senting
the
November, the Index of In¬
The $4 preferred has always been more volatile than the prior
the Federal Reserve Board for a
compos i t e
dustrial
Production
dropped to
preference issues: in 1945-6 for example, when conditions were less views of our
more
favorable
162 in July of this
attitude toward
year but in
favorable than at present, the stock after fluctuating in a low range staff of econbusiness.
Accompanying
these August it advanced for the first
for some years suddenly shot up from 2% to 60%. Later it dropped o mis t s and
were
the elimination of some of month this year, the rise
being 8
to 17 % and has since been fluctuating in an annual range of about
the
threats
that
concerned
the
analysts,
are
points from the July figure of 162
18-30.
Recently it advanced sharply, making a three-year high n ec essarily
businessman
such
as
increased
to 170.
We believe this Index

lete

the

and

company

of 39%.

r-:.;'-'.

The

$4 preferred

is non-callable

and

it

is

''

,

subject

rather unlikely

seems

that call premiums will be recognized on the prior preference stocks.
Claims would therefore be as follows:
Shares

Par

(000)

\

368

Value

<•

$7 Prior Preference

100

$6 Prior Preference

468

Total

757

or

"

The bank loan has
are

v'/';

as

■..

sions

$94

t

.

*" '

V

.

.' ;

'"'

,

'

,

-

-

*

No. of

Recent

Shares

Price

Company
Philadelphia

;

5,024,000
550,000
1,375 000
133,000

(Millions)
$80

16

Company

Oklahoma Gas & Electric.
Wisconsin

Value About

Public

Service

38

_

_

4

months ago.

some

use

statistics, I

try to indicate to
are

in

now

that
year

of official gov¬

level

our

going to

am

you

where

in Eng¬

U. S. hardware that sold

land for

one

pound before devalu¬

v

;

Industrial

we

and how

economy

with

compares

and with other

last

in the

years

and at past. In concluding, I am
the same time, although increas¬ going to give you our views
•' /
ing competition for American in¬ the year 1950.
dustry, it should bring long-term
might add that as a result of
devaluation of the English pound,

*14

was

much stronger

now

step likely to help Europe

advantages to America; however,

21

/

♦10
30

-

Louisville Gas & Electric

it

is

Through the
ernment

ture;

$178

"

fluctuations, industrial production
through the balance of the year

also
as

to

First, as to industrial produc¬
tion, as measured by the Federal
Reserve

Board

1935-1939

Index

period

=

with

100.

the

From

the

level,

1935-1939

figure represents a decline of on¬
ly about 10% from the 1948 aver¬
of 192 and it actually means
industrial
production
will

age

that

continue
rate

at

which

prosperous

the

favorable

very

prevailed
year 1946.

during

the

Our

gross national product for
this year is estimated at $251 bil¬
lion compared with
$262.4 bil¬

lion

Production

approximately its
namely, up 72%
average. This

average

from

future

than

(2) the devaluation of for¬
eign currencies was a necessary

;

trend

current

H. J. Simonson, Jr.

upon

(1) we will not be engaged in a
foreign war in the foreseeable fu¬

84

business

the

the

beliefs:

hese

will

in

stopped in July and confidence in

are

based

been almost retired, and principal assets

now

follows:

v

,

>

111

events.

new

currently at about 172 and it is
our opinion
that, subject to minor

decline

and

Our conclu-

19

:

$200

50

appraisal

$75

188

averages

Total all Preferreds...

>

V."

corporate and personal
taxes, the repeal of the
Taft-Hartley Act and the devalu¬
ation of foreign currencies.
The
income

re¬

change with
the unfolding
of

(Millions)

$203

100 ;

^

Total Claim

Arrears

$100

$4 Preferred

:

Par &

Federal

to

constant

last

National

year.

income

this year is estimated at $218 bil¬
lion
compared with $226.2 bil¬
lion

last

Personal

year.

income

this year is estimated to $210 bil*

(Continued

a

on page

28)

ation, when the pound was $4.03,

$119

will

now

cost almost one and one-

♦Estimated value.

half
pounds with the English
pound at $2.80; (3) governmental
holding company dissolutions, and unless some
military spending will continue at
entirely new idea is being developed, the portfolio will eventually
about the $15 billion rate and (4)
be allocated between the four classes of stock. The two prior prefer¬
the 81st Congress before adjourn¬
ence stocks can be considered as a unit and the common would receive
Based

past

on

only nominal participation,

for practical

so

Possible

Allocation

Allocations

of

<

Prior Pfd.

80-20

$95

75-25

89

70-30

$24
30

,

36^:^'/;,y

77

♦The $7

190

-

...

42;

'%■-

La3t year

unlikely

very

that

the

allocation

basis

and the $6

would

be

as

favorable for the $4 preferred as 65-35, which would mean that the

prior preference stocks would average only about 82% of their claims

(excluding redemption premiums) while the $4 preferred would get
about

50%

of its claim.

The 75-25 ratio

would

seem,

logical

more

giving the prior preference 95% of claims and the $4 preferred 35%
y

There have recently been some favorable rumors
regarding the

possible

proceeds of the

proposed

sale

of

Philadelphia Company's

properties although the last official word

gas

was

that negotiations

with Columbia Gas and other companies had been broken off.

time ago Duff & Phelps, the well-known

issued
on

a

the future potential value of Duquesne

appraise the
separate

study;

For

brevity,

eventually have

may

approximate the

a

Light.

might

we

and

would

be

about

million, bringing it

up

as

more

On this

a

business down to

industries such

for
are

have

with

a

these

65

to

allow

although this

for

may

ard Gas before the

signed

preferred

nominal

should

participation

probably be
of

the

reduced

common

stoc

be offset through accumulation of cash by Stand

plan becomes operative.




of

developments

cushion

to

business.

were

reserve

F. S.

Drexel & Co.

the

Moseley & Co.

state¬

by

the

A. C.

Blair & Co., Inc.

Allyn and Company

Central Republic Company

declining

Included

in

(Incorporated)

Baker, Weeks &

Harden

A. G. Becker & Co.
Incorporated

Incorporated

Hallgarten & Co.

j
if,

Swiss American Corporation

;

the lowering of bank

requirements

and

redis¬

R. L.

Day & Co.

Francis I. duPont& Co.

Kebbon, McCormick & Co.

rates, the expiration of the

instalment

$4

number

Kidder, Peabody & Co. \

Blyth & Co., Inc.

there

Reserve

in

count

the

a

months

Board, the Ad¬
ministration and the Congress de¬

192

for

recent

and

Federal

49

ratios,

their adjust¬
emerging

now

favorable outlook. ,/

been

trend

65-35

offer these securities under applicable securities laws.

autos and steel,

gone through
period and are

56

the

as

ment

46

for

signed only by persons to whom the undersigned may legally

example, nevertheless there
signs that many industries

90

values

Copies of the Prospectus may be obtained from the under-

Although the readjustment has
heavy

not been effected in certain

207

except

on

confidence for

the future.

222

claims)

Price 100.75% and accrued interest

been taking

solid base

a

to establish

which

42

total

September 1,1969

place has really been very healthy
for our economy as it is bringing
farm
and
industrial prices and

35

give them almost their entire claim and leave $65 for
the $4 preferred.

Due

September 1, 1949

The business re¬

adjustment that has

97

(exceeding

Dated

Supply and demand are now al¬
most in balance.

104

stocks

Bonds, 2%% Series due 1969

Balancing of Supply and Demand

$237

$4 Pfd.
$37

First Mortgage

with back¬

buyer's market.

$28

which would

slightly

a

ments

Dollars per Share

The above allocations would be too favorable for the
prior prefer

All

to

have

♦See note above.

ence

The Gas Service Company

serious reces¬

logs, the filling up of inventories
and the transition from a seller's

$111

65-35

circumstances to

$18,000,000

the

normal expectation following

♦Prior Pfd.

y

no

or as an

Oft'

beliefs

discuss

industries catching up

$4 Pfd,

75-25

■

offering of these Securities for sale,

per¬

sion but rather we should view it

During

Allocations of $139,000,000

Prior Pfd.

80-20

70-30

it

This would

one-quarter

^

of record only and is under

offer to buyy
a solicitation of an offer to buy, any of such Securities.
The offering is made only by the Prospectus.

as an

business was at such

cline this year as a

follows:

Millions

""

a

that

assume

to $139 million.

*

Basis

mean

It would increase the Standard Gas portfolio

Possible

Allocation

But to attempt to

arbitrarily

basis, allocations would work out

generous

optimistic figures

maximum break up value of $20.

1946 high,

than the recent high.
value by about $20

some

stock of Philadelphia Company would

common

Some

Chicago engineering firm

lengthy report in which they derived

or as

\

high level that we should not
judge a 10% or even a 15% de¬

as

seems

'

a

about $10 less, than these average figures.
It

those

I will
business situation.

55

more

With

taxes.

established,

47

164

prior preferred might receive about $3

cise

39

177

■/

Federal corporate or

be construed

sonal income taxes or reduce ex¬

$4Pfd.
$32

$203

'

.

ing will not repeal the Taft-HartAct, pass the Bragnon Agri-*
cultural Price Program Bill or in¬

lef

crease

_

*PriorPfd.

83

y:

65-35

-

Dollars per Share

$4Pfd.
y

'id

$119,000,000

Millions

Basis

the following

purposes

theoretical allocations might bfe considered:

This advertisement appears as a matter

credit

restrictions

of

Watling, Lerchen & Co.

DeHaven & Townsend, Crouter & Bodine

Regulation W, the announcement

by the President of a policy indi¬
cating deficit financing, which is

Newburger, Loeb & Co.
Arthurs, Lestrange & Co.

♦An

at

address

by

Mr.

Scott & Stringfellow

Simonson

of National Contract
Association
and
the
Society of Architectural
Consultants, New York

meeting

Hardware

American
Hardware

City, Oct. 3, 1949.

October 6, 1949

Harrison & Company

Richard W. Clarke Corporation

-

10

increases

if

"Thar's Gold in Them Hills

ing the interest of three Philadelphia sponsors.
Lynch, Pierce, Fenner

Beane,

which

started Sept.
heavy that the firm has

so

were

announced
to

&<$
28,

section

overflow

an

Advisory

$31,000,000 compared with $35,-

6.

The

Philadelphia-Baltimore

Stock Exchange, in

Consumers

the

of

Council

Philadelphia

the

Chamber of Commerce, has an¬
nounced

women's investment

a

forum

12.

Oct.

held

be

to

Speakers will include Harry A.
SEC Commissioner;

McDonald,

Madeira, President of
Bank & Trust Co.;

Percy C.

Title

Land

W.

Norbert

Smith,

Markus,

Co.;
Edgar Scott,
Montgomery, Scott & Co., and
Mrs. Richard Pollock, Chairman
of
the
Council.
William
K.
Barney

President of the
Baltimore
ex¬

Jr.,

Philadelphia

moderator.
that joint
being devised to offer
act

will

change,

as

The two groups stated
are

series of weekly lectures, un¬

a

"Invest

der the general heading
In

America,"

open

will

which

be

to both men and women.

planning to repeat
course

office

women's lec¬

a

investment

on

pro¬

cedure which met with substantial
last

success

to

equal

spring. Five weekly
Will be held, starting

meetings

dividends.

year's

.

the

In

pany

fiscal year the com¬
reported income of $1,996,-

741,

equivalent

previous

share.

to ; $7.87

per

132-year-

Association of Philadel¬

Fire

phia will vote at a special meet¬
ing Nov. 17 on the proposed mer¬
ger of three affiliated units into

■'

i started

proposed capital in¬
from $2,400,000 to $3,600,a

which, if approved, will per¬
the parent * company to ac¬
quire the affiliates and declare a
20% stock dividend on Fire As¬
.*

%

S.':-

ent

Build

*

*

"

*

13c

will

The

shops

steam

Sale

locomotive

eventually doubling

afford

and

500

ployed

straight
hard¬

a

studies

of

new

effect upon

based

he

sis

:

/■

rate

Not

Recent

to

price

net

sales

reductions
and

the

quarter,
on

profits

of

of

Pa.

seventh

the

offer

a

has

failed

to

earn

Blizzard, Herbert H. Blizzard & Co., Philadelphia, will

resolution

passing

Co.

his

the

flf. E. Walnut & Juniper Common
Phila. Warwick Common

For

the

deficit

Gillen

current

was

the

said.

Relief

Mr.

has

been

sought through a schedule of rate

term

This will be
ous

just j

(three ' quarters
be

$60,000,000

over

in

$53,153,594

against

SECURITY TRADERS ASSOCIATION

>

Association is holding its Fall Party

Columbus Day, Oct. 12, 1949, at the

on

first nine months of

will

ended
as

of office.

prizes.

Association

a

clam-bake with golf,

with E. F. Ehrhardt, The

First of Cleveland Corp., Cleveland, Ohio.

the

,1948 period.
..

.

I

pointed
of

if

,

'■ v";

if

if

.

Ray H. Timmons has been ap¬

manufacturing
products,

industrial

house

manager

Westing-

Electric Corp.
*

i

,

a

;•

Lewis C. Davis, Sales Manager

&

Oct.

Harry Davis Now With Ass'n of Exchange I
Daniel F. Rice & Go.

Firms Get Slate

: CHICAGO, ILL.—Harry Davis,
until recently a partner of Farroll
-'ivV,
& Co. in Chi¬

the Association of Stock Exchange

has be-

cago,

Co., Cleveland, has

come

Bonwit

asso-

ciated

Co., Philadelphia, effec¬

D

1.

a n

i t h

w

i

1

e

F.

Company,
Board

Goldman, Sachs Adds
Hill

has

become

ing,

associated

of

members

of the N

with the Philadelphia
office of
Goldman, Sachs & Co., members
of the New York Stock Exchange,

e w

York and Chi¬

Stock

cago

Ex.cha

1416 Chestnut Street.

n

ge s,

firm

the

an¬

nounced.

Davis

Mr.
Harry

Transportation Co.

has been with

Davis

Farroll

Issues

since

1924

has

and

been

&

Co.

promi¬

nent in La Salle Street for a quar¬

Commonwealth of Pennsylvania

Members

Phila.-Bait.

BIdg.,

Stock

Teletype

2

ter of a century.

Turnpike System 2.90% Revenue Bonds

(Special

to

The

DAYTON,

Atlantic City Elec.
Power

—

Sold

—

Quoted

Com.

been

Merchants Distilling Com.

the

Phila.

Transp. Com. & Pfd.
Richmond Cedar Wks. Com.
(AlaH)

Financial

offices

in

the

be

Charles

with

Howard

L.

A.

partment of J. R. Woodhull & Co.

Two With Dean Witter

STROUD & COMPANY

Incorporated

(Special

SAN

Incorporated
PHILADELPHIA 9

Turner

1528 Walnut St., Philadelphia 2
Boston

Chicago




Douglas

to The Financial

Chronicle)

become

connected

with Dean Witter & Co., 45 Mont¬
ALLENTOWN

•

PITTSBURGH

NEW YORK

SCRANTON

•

LANCASTER

gomery

Street,

held

on

G. Bonner,

Bonner &

Mass.; W. D. Gradison,
Co., Cincinnati,
Ohio; Roscoe C. Ingalls, Ingalls &
Snyder, New York City; Walter
Maynard, Shearson, Hammill &
Boston,

W. D. Gradison &

Co., New York City; Edward P.
Prescott, Prescott & Co., Cleve¬
land, Ohio; William F. Van De-

of

members

New

York

Stock

Exchanges.

and'

San
-

the

Francisco
♦

Serve

One Year

Goodbody, Goodbody
Co., New York City.

Renominated to Serve 3 Years
Albert

■-

,

Farwell, Farwell, Chap¬

&

Co., Chicago; Wilbur G»
Chas. W. Scranton & Co.,
New
Haven, Conn.;
Robert A.
Magowan, Merrill Lynch, Pierce,
Fenner & Beane, New York City.
man

Hoye,

Nominating Committee for 1950

M. Purves, Hemphill,
Graham, Parsons & Co.r
City; Richard P. Dunn,
Auchincloss, Parker & Redpath,
Washington, D.
C.; M. Donald
Grant, Fahnestock & Co., New
York City; Jacob Stone, Asiel &
Co., New York City; Edgar Scott,.
Montgomery,; Scott & Co., Phila¬
delphia.
New York

FRANCISCO,
CALIF.—
Phillips and David L.

have

be

Gregory, New York City; H. H.
Dewar, Dewar, Robertson & Pancoast, San Antonio, Texas; Horace
W. Frost, Tucker, Anthony & Co.,

Noyes,

William R.

PEnnypacker 5-0100

the

FOR BOARD OF GOVERNORS

'George

Wood Steel Pfd.

E. H. Rollins & Sons

to

at

Nominated to Serve Three Years

&

Third

Associated

firm will
and

Association

on

Election of

C.

Miller,
both formerly in the trading de¬

JBoUght—Sold—Quoted

New York

new

voted

and

Harold P.

Chronicle)

OHIO—Charles

dissolved.

Newell

Wood Steel Common

(Alan)

with

be

Nominated to

National Building, as successor to
J. R. Woodhull & Co., which has

Com.

Co.

Co.

&

to

Meeting

Wednesday, Nov. 5, as follows:

Ohio

McCune has formed C. C. McCune

Bought
Interstate

the

'

COrtlandt 7-6814

offices

venter, Laidlaw & Co., New York
City.

Formed in Dayton,

N. Y. Phone

PH 37S

for

Annual

C. C. McCune & Co.

Exchange

Philadelphia

Firms has announced its nominees

Build¬

Trade

PHILADELPHIA, PA.—William
P.

Nominating Committee of

The

and

Rice

John B. Stetson Common & Pfd.

Packard

National Security Traders

cordially invited to attend. Reservations may be made

.Phila. Suburban Water Com.

Samuel K. Philli

Chagrin Valley County Club.
baseball, horseshoes and vari¬

Out-of-town members o^the
are

,

Phila.

the

title and custody of the docu¬

It will be further provided that possession of the

Cleveland Security Traders

Dow-Jones estimates sales
the

for,

re¬

quarter,

$1,144,000,

the floor of the convention providing that

on

years.

CLEVELAND

results recorded by Scott Paper

duced dividend of $1.50 per share
dent.

Cambridge BIdg. 3s 1953

which

Daggy's suggestion,

ment, which, it is felt, assumes increasing historic significance with
the

ficiency and greater production
are credited with the favorable

tive

according to W. D. Gillen, Presi¬

the document has re¬

of Philadelphia, third

At Mr.

contents.

National Association officially accept

ments resulting in increased ef¬

Co.

its

its

composed

consecutive

Bell Telephone

Daggy

capital improve¬

been elected President of

Earned

Gentry

of J.

custody

and

H.

Herbert

10 days' notice.

Scott Paper
-

Teller

Dividend

Bell

the

original be lodged with each National Association President during

em¬

v:riz

-

-

President of the Association and Chairman of the Committee

be put into

may

in

assembled

transfers.

of

of Halle Bros.

*

play

on

avail

riders

bus

and

car

individually

and

Association will be on dis¬
before delegates and members attending the current NSTA Con¬

mained

traffic, it ap¬
approximately 32%

themselves

Traders Association at

hand-lettered

original

the

1936,

in

Since the date of its adoption 13 years ago

1948

that

Angeles

vention at Colorado Springs.

a

According to

400

completion.

#

For

Due

will

workers

upon

Los

and adoption at the Third

of the National Security

Convention

Annual

signed Constitution and By-Laws of the
•• r

fare

a

rendered.

The

For the first time since its presentation

power.

Lee Rubber & Tire Co.

tires,

to

service

of

for

present proposals
nearest practicable

the

approach

pears

,

the

■/

Between

;v;vv ■■'•■.vp-;

COLORADO

NSTA CONSTITUTION TO
:

on

added

an

inflict

pres¬

pany,

production.

at

to diesel

It
com¬

Western

&

acres

cost

produce grey iron castings

ent

Delaware, Lacka¬
RR., covering
Scranton, Pa., will be
put up for sale as a result of the
railroad's progress in converting
15

to

$1,500,000.

the

of

wanna

that

1949,

for other divisions of the

repair

:-'v-

NSTA Notes

the single ride patrons

on

and

fare

retained

be

would

fare

ship

Plant

Philadelphia

Northeast

approximately

,

Repair Shops for

will

"straight" rides with
charge for transfers.

,Vs'

Warr^jt H. Farr, Vice-Presisock," bank¬
; dent of Budd Co., announced
ers, in vestment^ Sealers and stock
last week that ground will be
exchange members are united in
broken in October for the con¬
encouraging a concerted effort to
struction of a new foundry in
'

ond.

Co.

remain at

to

token

25c

for

two

buses

viction that "the hand that rocks

knowl¬

is

fare

Single transfers are to cost
31/3C (three tokens for 10c) and
multiple transfers 5c. The pres¬

the cradle holds the

fundamental

.

basic

The

Co. in
Budd to

Davis,

company's rev¬
'
-.'v;

the

enues.

'
*

V

Co., his seventh,

&

a

$5,000,000 to

mit

■

Miller

Rambo, Close & Kerner, his sec¬

Johnson

H.

R.

partner for
v

resi¬

somewhat complicated
of increases which, it is
estimated, will add $4,600,000 to
proved

000

assigned to them."
Subscribing to the growing con¬

&

Patriarch

of

and late-starter Edmund J.

v

\

C.

R.

sta¬

:

pattern

has

risks into single pol¬
icy coverage. The three affiliates
are
Lumbermen's Insurance, Re¬
liance Insurance and Philadelphia
National
Insurance
companies.
The November meeting will also
on

dent

fare

department..
Smith was formerly

expectant father¬

1950,

Benjamin A. Brooks, Jr., E. W. &

Sales Manager and

as

early

hoods,

the
may

sought by Philadelphia
Transportation
Company,
the
Pennsylvania
Public Utilities
Commission
last
Monday
ap

automobile

insurance is

the

basic

13c

the

to

Mr.

Increase

Fare

Pen-

the

been

have

asso¬

L.

of A.

for

census

schedule

casualty, fire, marine and

sociation shares.

broaden

tistical

the

announce

them

Perry, member of

Henry C.

*

*

v,..,-

with

nock Smith

Ending the nine months'dispute
relative

scope

permissible

now

in their hands and 80% of all life

edge of women investors.

*

P.T.C.

trend toward consolida¬

a

tion of

broadened

The

year.

activity

ciation

1

sylvania insurance laws enacted
by the state legislature earlier
this

Philadelphia,
k

Philadel¬

headquarters

as

forthcoming national

New

in personnel.

..'■ .'..-t.

the parent firm. The action comes
-y'WU'V'-'V'Ui1; *
as the result of a change in Penn¬
S-; The PUC held that

crease

Oct.

the

of

Stockholders

well, Sulzberger & Co., members
York Stock Exchange, S. E.
Corner Broad & Chestnut Streets,

selection of

the

in

tor

phia

10c.

Fire Assn. of Philadelphia

old

If

change

-

-

Pollock, in her address at
12 forum, will cite sta¬
tistics showing that "60% of sav¬
ings accounts are in women's
names, 70% of private wealth, is

Mrs.

•

•

vote

Oct. 19.

the

than

more

share and ample to cover

per

the

of

of
Reynolds & Co., members of the
New
York
Stock
Exchange,
is
Philadelphia

The

ture

net

$1,300,000,
$5

This should
income of about

a year ago.

produce

&

Barclay,

plans

the

702,493

out

of

pected to be well below those

cooperation

similar series Oct.

a

Con¬

—

tributing but not controlling fac¬

PHILADELPHIA, PA. —Hallo-

approval

holders.

ex¬

are

&

has

Co.

of DeWalt stock¬
approved, DeWalt
facilities will be operated with¬
the

by

preceding fiscal year ending
Oct.
31,
according
to
DowJones estimate.
It is indicated
that sales will be approximately

begin

with

Co.

Lee Rubber & Tire

Machine

arranged for
the acquisition of DeWalt, Inc.,
of
Lancaster,
Pa.
subject to

-

series of four weekly lectures arranged

Merrill

PHILADELPHIA, PA.

Hallowed, Sulzberger

if

if

American

The

Foundry

potentialities of women as a class becoming increasingly
interested in investment securities is a topic which is currently spark¬
a

Hold That Census

A. L. P. Smith With

mission.

The

Registrations for

pending before the

now

Pennsylvania Public Utility Com¬

Pennsylvania Brevities

Thursday, October 6, 1949

& FINANCIAL CHRONICLE

COMMERCIAL

THE

(1358)

Volume

THE

Number 4844

170

COMMERCIAL

&

FINANCIAL

CHRONICLE

5%

The Securities Business—Foundation

(1359)

might be

should

sell

will

it,

like

more

driven

be

out

who
They

it.

of

Stone of Free
T^'-Vv"*-'

kind of paper if
commission in it.
make a mistake,
but when a firm dumps on the
public a whole string of such is¬
sues,
it hardly is coincidental.

.

---^/xxvX.,x-'v;

x

Financial Editor, New York "Journal-American"

/

-

Enterprise System

By Leslie GOULD*

■'

attaclusmears - against

<

any

I

public and

.

SEC

isn't

$24 million.

doing' anything

take
c

1

Foreign

doesn't

a

i

fields

new

voyant

r

this

and

is

—

offers

the

coun¬

country is go¬

form

And it should come in the
of risk and venture capital

ing

from

the

if

-that

this

ahead

private citizen, instead

of handouts from the U. S. Treas¬

the

under

via Marshall Funds, etc. -X.

private enter¬

ury

prise

So, there should be plenty of
opportunities
in "the
securities
business for a young man of to¬

system,
securities

the

business is

going

to

ex¬

day:

pand.
;

fact, the

ance

is business and

senior

system—that

industry privately

owned and

privately operated—is
to have widespread public owner¬

ship of securities.

-

owning se¬
curities, the less chance there is
of changing our system into some
people

more

form of Communism

State So¬

or

cialism. It "is unfortunate that our

political leaders,
not

our

our

this

see

.the way

57.

the * average
age of the Exchange member was
441/2 and the partners a couple
of

securities.

might

other"

That

will

there

means

be

op¬

mentioned

I

instead

I

have

more

vited

me

than

to this

in

G.

vise its customers

Byron Brooke Forms

The

on

list—to

outside

an

which it has

ATLANTA, GA.—Byron Brooke;

charge. 'Anything

trust

X;

much

academic in¬

Black in¬

criticism,
4

to

the load
couldn't
this

and

4y2%: for

firm and its sales staff.
In, addition to
is

the

about

the load, there
management fee, usually
V2 of 1% up to a certain

amount of the asset value.
all

of

result

net

iree

securities1

ness

busi-<

be the tail to the dog,!

may

does, in effect, "wag" the dog.!

it

well>

horse

as "

think

I

have

a

very

definite

sellers

Some

have

opinion.

of

trusts

the

ball

and

races

Differences

games.

been

switching
into

of

and'

for

buyers

from

shares

of
trust
to a

guilty
one

another

its

21/2%

sales¬

to

Southern Bank Building to act as;
dealers in municipal bonds.
Mr;

Exchange
the

trader

service

It's

who
a/good

beyond

the

and

com¬

revised.

customer

Brooke

Frank

more; for

suit than for

a

a

is

low

and

be

to

more
see

(Special

and

the

For

me,-

I

medium

and

duty
and

of

attacks on Wall
public con¬
fidence in the securities markets.
the

smear

Street—to undermine

attacks have suc¬
ceeded to a considerable extent,
it has not been because of any
While

;

these

logic but more to the failure of
the- business to fight back and

services

properly merchandise its
and

of arguments

You hear all sorts

;

the securities business has
fallen to its present low state, but

of why

you

that
ers

go

sell
in

can't get away from the fact
when the brokers and bank¬
out and merchandise, they

securities. The current boom

end investment trust
that,

the open

shares

proves

No longer- can a

v

salesman or a

partner sit at a desk in a com¬
air-conditioned
office

fortable
and

wait

for

some

to

customer

Large Amount of

v

To

1

consideration, with management

Be

New Capital

This

announcement is not to

with the least

of

salesmen

Some

the

on

risks

the

than

this.

and

plenty of

will

-*A talk by

York,

Mr. Gould before the
Association of New

New York

City,

1949.




Sept. 28,

,

Mfrs.- Trust Promotes

•]

Manufacturers
nounces

that

Trust

Leo

Co.,

Mendel,

an¬
;

in

charge of the bank's Government
and Municipal Bond

partment, has

Trading De¬

been promoted to

Assistant Vice-President.
After having spent a
years-

Mr.

in

the brokerage business,

Mendel

1927, and

j.

number of

came

was

to the

made

an

bank in

Assistant

Secretary in 1938.

There are

1

X XX v'*--'

."-'X

-jyycx.

-v-../*

-

as

in

.

any

think there' is
danger in the present
rapid expansion of the trusts. X.
(4) The possible future effect
stocks.
a

Frankly,

*V!* A" 'V.'" ' -AXv-'v • f-

Ax".

them in in¬

stocks

| j

Emerson Radio & Phonograph Corporation

go

.

/X-X w-i

Capital Stock

X.!

;•

X>:'

$5 Par Value-

I

c.

,

that concentration of listed stocks
in

open-end

trusts

will have on

the

liquidity of the market,
j ;
There are
three
other points
to

related
a

the

last

great similiarity

one.

Price $15.50 per

to

on

share

There is

in the invest¬
Copies of the Prospectus may be obtained from the undersigned only
in states in which the undersigned is qualified to act as a dealer in
securities and in which the Prospectus may legally be distributed.*

out of a particular
given day?
Another point is that the trusts

for

get
a

seasoned issues.

when
way

M.I.T.'s

man¬

F. Eberstadt & Co. Inc.

it

joined in a very modest
in sponsoring the American

Research

and

Develooment

Co.

is
another point. Would it be better.

....

XX:; '

:

of

lot

agement recognized this weakness

•

V«

.

235,000 Shares

tell

,•'

Investment

•;
v.:

Harvey D. Gibson, President of

provide little if. any new equity
capital. The mutual funds-go in

r

'£>•*'

,'

risks.1

even

Time

of risk.

matter

vestment- trust

stock

v

"j.

the
Pa¬

\
•

in

in

the

to

way

stocks

buy

Industry is going to need some-

* XXX

was
on

as an offer to sell or as an offer to buy the securities herein mentioned.
offering is made only by the Prospectus.
j

The

'(3) The building up of a false
inves¬

-$40 to $50 billion in new capital
'•over the next few years—maybe
more.
Most of this-'should
be

equity "capital.

he

business

be construed

-

feeling of security in the
tor's mind that this is the

tries

Marketed

thereto

cific Coast.

giving of recip¬

and i the investor's
needs of secondary consideration.

performance

ments^ of these trusts. And what
will happen when more than one

telephone in.

Prior

business to the firm being the No.

further

its wares.

Swift, Henke &

Chicago, and

Hi

H.

Co., First Securities Co.

1

open-end, trust

boom. This is~ the

with

formerly

was

&

investment

;
Before sitting down I want to
mention what I think is a danger¬

this

(

Co.

portfolio's full market value
plus a load of 8% to 9%.

of

Chronicle)

Financial

Chicago Stock Exchanges, Mr.

Hentz

the

part

to The

rather

would

the

:hind.

i

joined the staff of Crut¬
209 South La Salle

Wilson

If the

raise

,

Street, members of the New York

shares-in a closed-end
discount of 12%
to 25% of the portfolio's market
value and pay the regular,. Stock
Exchange commission <th'tgi buy
the shares in an open-end trust at

ous

associated

tenden & Co.,

-

best

has

son

this

the

buy

be

will

CHICAGO, ILL.—Arthur J. Wil¬

the

brackets

income

reached

money.

in

this business of invest¬

find

value;

Burt

Cruttenden Go. Staff

ready-to-wear. one.

investors—those

of

to

partner in

Arthur J. Wilson Joins

tailor-made

Times have changed and a new

As I

a

the firm.

with

who

and analysis
commission. Rogers Peet

same

charges

costs

formerly

was

Brooke, Tindall & Co.

research job

a

—have

Brooke

Byron

3%

place in the investment
eight months
rocal. businesss- to -a firm equal to
securities business can't field and certainly a little fellow year after the initial sale? There
the
dollar
amount of
sales of
will do- better in an investment: is no excuse for that. It is work¬
capital needed for in¬
dustry, then Government will do trust stock than in a Bendix Heli¬ ing a racket; I am "told this has trust shares. The firm thus gets
the job. And that will mean the
copter, a Higgins Boat or a Ca¬ happened more in the Mid-West not
only fits share of the 5%1 to
nadian gold mine.
than in the East.
end cf our system of private own¬
6%
commission - on' the
trust
I am critical of the 'open-end
ership "where the individual can
To digress from the trusts for a'
shares
sold, but: also gets .the
choose his investment;; The Gov¬ trusts on four points..*
moment, there is an element in
(1) The size of the.--"load."
ernment, v will > do
it
for
him,;
comthe securities business, which I do regular ;Stock • Exchange
(2) The way some are being
jsiphoning off his excess, funds via
not think is-more than 10% and mission on the
reciprocal busisold—the size of the commission
taxes. /
'
h X
"
I, That's really, what has been be- and the amount; of reciprocal

j

&

out

trust selling at a

this

trust

are

and

ing. the public's money the

business — to gested I confine my remarks to
thfr. investor is that he* must hold
• £XX:
mind—is the foundation stone* that."
on
for at least two /years to be
of the free enterprise system. The
Some of the things I have writ¬
even. I wonder how many buyers
securities
business
can't
exist ten
recently
have
not
always
of trust shares realize that? And
without! our" system"- of . private pleased
those
in
the industry.
whether they are told?
ownership and that system can't That's what make
markets, as:
a

the

the

luncheon, he sug¬

So the securities

without

wants

middle

leave

go

be

charge

no

If

there

Stock

execution

over

my

exist

wants

firm

should

to

nuts

7y2%- is

6%

Citizens

the

has

sponsors.

missions

field

high.

in

commission
can't

You

another

think

I

I personally

to

Byron Brooke & Co.;

offices-

for the wholesalers and

more

is questionable.

The

market. While the securities

plus

that

down

the

for

the

business say they can justify

7V2%

field

trust

Exchange
1%.

>

their invest¬

control.

with

ring doorbells and follow up
1 on
that. So,
the boys

and

organization

no

has; formed

purpose

Commissions-

and

Stock

around

sion

E.

the load. My friends in

on

!

Own Investment 60.

about

gift-wrap the same securities and
sell them at a 5% to 6% commis¬

trust,

a

ments. Then it is turning over one
of its major assets—its customers'

so

something you

investor's!

business

shares is saying it hasn't the
nor the judgement to ad¬

would

an

is

research

a

maiden

a

get

.

men,

be

When Grady

in.

himself

Exchange firm that
goes all out in selling the. open-

the

f

back to the matter of
loads and commissions. The aver¬

individual

the

held

turn

Investment1

is

To

Stock

Shares'

the

gather,

that,

if

stock

owned

investment

Loading

.

'stock¬

consider

than

company,

were

growth of the ;
open-end
trusts
and

so-called

terest

vi*

}

y.;V'N

trusts?

G.. E.

maybe
a
more
militant
voice
against political attacks on " that

over

reali

a

not the*

are

fringe, too.

feel

other line of work.

any

its

and

end

have

they

•

The

age

A

a

I do not know,
provide a few good

than

jobs. ;

part of the G. E. family, a buyer
and a booster of its products, and

Now,

portunities for promotion into the
senior spots much sooner than in

few

a

individual

holder

that.

above

years

road blocks in

the■; distribution of

average

Prewar,

Trust"

ing it a political whipping boy,
•they should be doing everything

The

around 51 and for partners

now

around

Marketing

of the business and mak¬

.to; encourage

positions.

do

makers

looking

man

of those in the

age

accordingly.

and act

of putting

Instead

is

young

attrac¬

of Stock Exchange members

age

educational

law

and

.leaders

the

is the

ahead

keeping
the free enterprise

X The

for

tive

Gould

Leslie

have

we

of

should

field

securities

the

make

assur¬

that

condition

Another

best

The

which: in

'

In

stockholders than

money.

in

port¬

trust

latter serves,

the

public and' customer relations for,
say a company like General Elec¬
tric,
to
have
more
individual

try that will have to supply that

to see

powers

once-

•

certain

becomes

peace

any

investment

economic

What

Dealers;

Government.
It

to

situations of this kind. Nor is the

Most of you have gone into the securities business after war service.

,

of

trusts

that

answers

which the public is

on

out around

now

Your specific
reasons
may vary, but your general one is the same. A belief in the American free enter¬
prise system and its future. Otherwise you probably would) have latched onto a job in
-

the

but

prayers,

National Association of Securities

*.

think

place,

can

$34 million in cheap issues to the

"Wall Street. Gtes need of marketing $40 to $50 billion in new capital over*
plenty of opportunity for young man in securities business. Warns against limiting
; ;
v
sales activities to investment trust shares./. t X.!X XXX -V';;. ■:

few years as

next

lies

here

There is that firm that sold some

Asserting frea enterprise system cannot exist without free securities market, prominent financial editor
,

danger

churning

folios.

there is enough

'Any house

The

ness.

possible

lit

For

the

corporations

October 4, 1949

there

MOM

an

ftnavctm

COMMEPrTAf

THE

(1360)

12

rvfvnwri y

through

investment program based upon the family head's whims,

an

his fears

Thursday, October 6, 1949

his fancies.,

or

"But in those

f

-v

(

where

cases

mutual investment fund is employed,

a

the institution, private estate, or families of average investors, forge

NATIO

a

head because their plans are welded by men who lay down broad,

impersonal investment policies.

inv
An

By HENRY HUNT

SIMENT PROGRAM

ien
Open Inve«tnTFrff Asccount

Details

of

are

and

program

prospectus

request

upon

'

SECURITIES

120

&

CORPORATION

RESEARCH

BROADWAY, NEW YORK 5, N. Y.

small stockholders.
"No one—no individual,

company or

institution—owns

tisement

Actually, however, it represents excerpts from an adver¬
the American Telephone and Telegraph Co. with the

of

,

der

an

,

as

A PROSPECTUS ON

important service to the American investor, both large and
W

Effective

REQUEST

from your investment dealer or

Street, New Yorlt 5, N. Y.

A

to do so."

Oct.

:

Based

-Inquire about=

Diversified

on

,

Investment

'

their present volume of sales,

"Fully"
Distributors

Seven Selected Stocks

vs.

has

v

>

expensively
prepared sales piece comparing the performance record of Fully
Administered Shares with the following seven "Big Board" issues:
American Can, American Tel. & Tel., American Tobacco, Consoli¬
dated Edison, General Electric, International Nickel and Woolworth.

Fund
A Series

Group

of

prepared

an

unusual

and

Withohka^justing for cash dividend* paid, simbe its, inception in 1938
"Fully'* has outperformed each of these selected issues.

Niw Yo*k
Stocks:InK'

•"

'

:

*'
*

A

Investing by Whimsy
and

other

descriptive

material available from your local
.investment dealer,
■

»

,

;■'>*

or

front

v

..

'Sl\

■.

Huch Wv Long

and

Company

48 Wall

'

[

INCORPORATED

"Investing by whimsy—which is to say that a man invests entirely
upon his own hunches, superstitions, financial fallacies, what others
tell him, insufficient or erroneous information—or upon a score or
morelof other failings, physical or mental—is not so uncommon as we
may often think.
'
y.,; y;.y
Vy ■
j; y
"Many

-

a

man's family

are

,

investors

private

obtain

the

advantages

same

"The

of the

success

mutual

investment fund

is

likewise

between
one

an investment program which makes
steady progress, and
which has become lost in a forest of
uncertainty."—from George

Putnam's "Prudent Investor."

•

"I place economy among the first and most important virtues, and
public debt as the greatest of dangers to be feared.
To preserve
our independence, we must not let our rulers load
us with perpetual

.

.

debt.
or

.

.

We must make

.

"If

we

drink, in

into such

run

.

.

the labors of the

If

.

we

j

.

debts,

necessities and

our

amusements.

will be

.

.

.

choice between economy.and liberty

our

profusion and servitude.

.

^

we must be taxed in our meat and

comforts, in our labors and in ouF
prevent the Government from wasting

our

can

people, under the pretense of caring for them, they

happy."—Thomas Jefferson.

Tax Reduction

Possibility

.

.

The quarterly report of Massachusetts Investors Second Fund be¬
ing sent to shareholders this week contains the following comments
on the
possibility of a reduction in Federal taxes which could be of
great benefit to the American economy:
t-Vrl "-.'Wr;■>v"
"The recession in business
activity/ which has found reflection

this year in the widely used and
publicized indices compiled by the
various government bureaus, as well as by private
agencies, has ap¬
parently created a favorable atmosphere for the consideration during
the next year of proposals to lighten the
heavy Federal tax burden
on
the American economy.
There is some reason for cautious op¬
timism in this respect in the fact that these
proposals have been intro¬
duced by political and other leaders of
prominence. It is a matter of
encouragement to see publicly recorded by such responsible sources

(Continued

v

s

Bhgh

on page 13)

-<3>

TT

on

Vacation '

Godfrey Bligh, President of R.
M. Smyth & Co., Inc., New York
City, will leave on Oct. 9 for sev¬
eral weeks vacation at the Home¬

stead, Hot Springs. Ark.

dependent, and subsequently suffer,

Street, New York 5

CKICACO

LOS

ANGELES

American Business

t

w",sl

•»

Shares, Inc.
Prospectus

mwiaic®4
stt

upon request

"prospectus from

Keystone

your

INVESTMENT COMPANIES

2500 Rus«

dealer

investment
or

PHILADELPHIA 2. PA.

Custodian

Lord, Abbett & Co.
New York

Chicago

—

—

Los

Funds

Angeles

Certificate.? of Parttcijvatlon in

INVESTMENT FUNDS

A

investing their capital

We

Diversified Investment Company

are

pleased to

the election of

announce

IN

Donald

BONDS
(Series B1-B2-B3-IM)' ,e,

PREFERRED STOCKS

Treasurer, American Telephone-# Telegraph Co.

v

i

I- "

r

■-

'

>■

•

\

..

COMMON STOCKS
v

Pronpectus

may

?

as a

-

-

be obtained front.

„

.

?

v

^

J..

•**.':

-

(Series K1-K2)

<S*rU* Sl-S2±S5S4)

R. Belcher

■
-

1

'

»■.:

•

■

'

.-*v

"

-•

:

/"

•

~.

i

*.

1.

■

:.

\

Director of

,

GROUP

Tke Keystone? Company?
of ..Boston
'
V

2

Prospectus

may

be obtained from

X-

.

SECURITIES,: INC.

A MUTUAL FUND

..,"V;

,.

.

50
.

based

this ability to make cold, calculated, unemotional decisions—
judgments based on carefully developed facts. It means the difference

Motto for Congressmen and President Truman

1, the

Lord,.Abbett is in effect
reducing the annual cost of their shares to the public by $360,000
—out of their own pocket. It also represents a voluntary 40% reduc¬
tion in their sales profit.
We believe that this action is unprece¬
dented in the history of investment companies and of rare occurrence
in American industry. Hats off to Harry Prankard and Bert Hughes.

t! 4

large

upon

-•

sales load on Affiliated Fund, Inc., and
American Business Shares, Inc., was? reduced from approximately
8%% .to, lVz% of the offering price, but the concession to-dealers
will remain at 6%.
.</, Vvy
To quote from a recent bulletin:
/ J
C
"This reduction is in furtherance of our program of reducing
costs to investors in our Funds whenever it is practicable to do so.
When, for example, the assets of Affiliated Fund, Inc., reached $50,000,000, it appeared to us that we would be able to reduce the man¬
agement fee on the assets in excess of that amount from % of 1% to
% of 1% per annum, and we did so. We believe that When the assets
of American Business Shares, Inc., increase from their present size of
approximately $34,000,000 to $50,000,000, we will be able to make a
similar reduction in the management fee of that Fund, and we plan

Distributors Group, Incorporated

Prospectus

"Some

Lord, Abbett Cuts Load bat Not Dealer's Commission

Group Securities, inc.

♦

'

v

.H

r;.;

*.

?

f

your

local : investment dealer;

or

>

Congress Street

Boston 9,

Massachusetts




"

•

.

through the services of private professional investment counsel—and
the fees paid for this type of service are testimony enough that value
is received.

.

small.

OF

63 Wall

Mutual funds

well as "Telephone," America's widest held equity, each have some
800,000 shareholders today.
The same kind of people who own Telephone stock are the most
frequent buyers of mutual funds. Just as. A. T. & T. provides an
essential service for the American economy, so do mutual funds ren¬

SHARES

/

y

"It is upon these same

words "mutual funds" substituted for "A. T. & T."

ADMINISTERED

to the scrap heap.

much

as

principles of 'unpainted' facts that banks
"The people who own mutual funds come from all walks of life and insurance companies invest their millions. The employment of
throughout the cities; towns and countryside of America. One in expert analysts to sift every available fact—and weigh it against un¬
derlying conditions in the development of an investment program—is
every 60 families in the United States owns shares in mutual funds.
"The fair and regular return on the money these stockholders an essential for these investors. But likewise of importance is their
adequacy of knowledge as to when and how their opinions should be
have invested is an important factor. ..."
The above reads like an accurate commentary on mutual funds changed—and to be in a position to take quick action when needed.
and it is.

FULLY

are based upon 'unpainted' facts, not personal prefer¬
'Tips' or so-called 'inside information' have no place. Overenthusiasm, misinformation or fleeting hunches are quickly relegated

ence.

% of 1% of mutual fund shares.

as

NATIONAL

"Decisions

"Eight hundred thousand people own mutual funds. Most of them

THE

PARKER CORPORATION
St, BOSTON 16, MASS;

200 BERKELEY

Gite Exchange

Place, Jersey City 2, N. J.

Volume

170

Number 4844

THE

COMMERCIAL

CHRONICLE

Donald Belcher Dir.

Mutual! Funds

:

&-FINANCIAL

(Continued from page 12)

-

recognition of the serious nature of
the-problems created throughout

Of

Congressman Charles A. Eaton, ranking Republican member of
House Foreign Affairs
Committee, writes Secretary of State ,)!
Acheson, SEC policies and practices do not conform with non- '?

R.

Beicher, Treasurer,
industry by the present lax structure which*Very much hampers, capi- American
Telephone & Telegraph
tal
formation, vitally essential to business prosperity.
V:'. ; Co., has been elected
to the

"Any real relief in the form of reduced taxes would favorably
affect the whole enterprise
economy of the nation and particularly
those companies whose
growth potentialities would permit the con¬
structive use of additional funds in
expanding their business activi¬
ties.
Thus because of the Fund's policy of investing in
companies
which appear to possess
better-than-average growth characteristics
any developments as to tax relief should be
especially beneficial to
.

the stockholders of

the Fund."

I

«

of

Directors of Group

Inc.

Mr. Bel-"

cher

is

known

Chicago "Journal of Commerce"

lowing article appeared:

"I

have

now

"The

-

still have

bate Act.

Illinois, I reported,

was

letter from the Illinois Barlking
Department which
in the absence of any specific legal word on the
a

reports that,
the state considers
man'rule.

subject,
'prudent

investment shares allowable under the

/:!,:>V

prudent

man

we

Chicago.

&

Funds

>

New York Stock

on

Exchange

funds

ment

listed

are

New York Stock and Curb

on

to

ago,

discharge

D.

R.

He

during
through

rose

and

research

Treasurer in 1944.
War

Chief

as

was

II, Mr. Belcher
Planning and

of

i awarded

the

Dis¬

tinguished Civilian Service Medal
by the Secretary of the Navy and
Presidential

Certificate

.r/: *

City and

f

Salaries
as a

of

V.. ■'

■

in

New

York

member of the New

Jersey Pension Survey Commis¬
sion, as well as several philan¬
thropic and business research or¬

by the National Association of Investment Companies,
covering tne
activities of the companies hold-<^
ing 98% of the money invested in side the North Atlantic Seaboard
open-end funds.
The

States, while only 31%

can

member

of

survey,

Investment

1940,

but

also

Company Act

the

volume

of

in
se¬

sales

made

since

1940,

He is

prises.

a

and

fur¬

thermore, would indicate approxi¬

120

Broadway,

&

New

reflect

sales.

1946-48
from-

In

the

three

the

broad

ment

appeal

companies.

of

the

invest¬

Treat

years

transactions

Co.

and

funds

these

aggregated

his

own

U. S. Government bonds, on June

Porteous Pres. of

issues.
was

million

in

Of
in

this

total,

stocks

bonds.

and

$990
$168

rector

At
our

of

was

executed

is

the

m o n w

ing

business

exclusive
and

new

of

the

or

total

more

than $1

transactions.

billion

More

half of this off-board business
transacted

graphical

the

survey,

breakdown

a

shows

officer

with

as

an

a

was

geo¬

that

i

*

J*

+5

»v.

sales have, been in the

'

shares"
f

J

area




;

of

one

editorial

Canada's

"The

Dean

Acheson,
The Secretary of State,

leading

Globe

and

Department of State.

of which I enclose,

copy

which deals with barriers
placed
by a branch of our Government

;

Cbas. Churchill

against American investment in
meritorious ' Canadian business

enterprises.
One of

Otis

cardinal non-par¬
policies is to encourage

tisan

field

L.

Churchill

the

Cohu

York

prises.

office

of

Otis

&

Canada is the largest and best
of the United States,

but

Canada

dollars

to

needs

for

pay

its

American purchases.

American
investments in Canadian enter¬

no

circumstances to be construed

offer to buy,

or as a

solicitation of

offer is made only by

an

in

means

as

an

Wainwright & Co. and
in

ner

Churchill

&

Churchill, Sims & Co.

offering of securities for sale,
any

of the Prospectus.

:

securities.
' ~ "

G

•'

■

f

i-.

(

?

f

,

v,a man

;

$4.25 per Share
Copies of the Prospectus

ma)

be obta'nied from the undersigned

through

your

Brothers, Philadelphia, is

broker.

-ft. «**

^

out¬

The First Guardian Securities1 Corporation

now

on

20 Pine

trading desk of Hecker & Co.,

BuHdjngpmeigbers

otthe-New York Stock Exchange..

4

Street, New York 5f N. Y.

-•
vm* **

*.r. i

New

York

having been

of the Bond Department of

H. C.

offer to buy,

nirrp

an

Irving

Mr.

Manager of Shields & Co., Man¬
ager

prises furnish dollars, aid in the
development of Canada's vast
resources, which frequently fur¬
nish
important raw materials

business

bond

for the past 15 years,

huge

Corpora¬

—

<

Churchill has been in the munici¬

pal

American

With Hecker & Go.
PHILADELPHIA, PA.

120

7

customer

was

Renneisen, formerly with Buckley

been)

Co.,

Broadway, .it; is announced.

Tel-Aviv, Israel

•

!

has

appointed Manager of the Munici¬
pal Bond Department of the New

fund

and

Beads;

Dept. in NYC

Charles

our

the investment of private Amer¬
ican
funds in
foreign enter¬

in

;; trp

?

'

*

Irving Renneisen Now

Liberty Trust

"trust

J

M.C.

from

an

'

rec¬

au¬

United

The Honorable

Por¬

ognized
mutual

in

■

yours,

Palestine Cotton Mills, Ltd.

thority in the

Y|

CHARLES A. EATON,
"

1

appears

or

mutual

or

and

%

tion, New York City.

the

-fund,

:■

ing, there

"

un-j

way

of tne

300,000 Common Shares

ealth

formerly

in the past three years, 69% of all
-

policies

Sincerely

•

-

than

through member firms.

Concluding

leadership

Jsorne

States?

provid¬

V;

This constitutes less than

3^>% of the

tor

cooperation in developing
world-wide economic well-be¬

&

The

Com-

Mr.

teous is

board,

secondaries, specials,

American

Corporation
Ltd.

first

subscriptions, totaled $33

million.

of

off

official

■

'

executed

Foreign Affairs Com¬
program

not

and!

as

which the practices of the SEC
can be made to conform to
the

when

considering President

Truman's

conducted

This advertisement is under

International

time in the survey. During the 18
months ended June 30, 1949, vol- i
ume of transactions
in blocks of
Douglas K. Porteous
listed
stocks
involving at least

$50,000,

is

"

slander;

men

dishonest.

even

In¬

of

of

sors

floor of the

for

House

mittee

moment

ited, Montreal,
Canada,spon¬

transactions

off the

shown

very

there

de-y
car-

publicity]

to

enterprises

vestment Dis¬

by the funds in listed stocks which

Exchange

the

their

sound; yes,
Is

City.

tributors Lim¬

relatively small portion of
volume

Cohen

.

My dear Mr. Secretary:

Managing Di¬

Corresponding

;

total

investment

President and

bonds.
The

Morris

.

Inv. Distributors

figures for the New York Curb
Exchange show a total of $98 mil¬
lion, of which $85 million was in
equities and $13 million was in

the

with

continuous

a

brand

Chestnut Street. Mr.

prior thereto

New York

30, 1949, discloses that $1,158 mil¬
MONTREAL, QUE., CANADA
lion, or 83% of the $1,392 million —Douglas K. Porteous has been
then held, were in "Big Board"
appointed
million

was

such

alone,

$2,172 million.
The distribution
of security holdings, other than

listed

1421

on

The text of Congressman Eaton's
letter follows:

located at the firm's Philadelphia

office,
;

tape and endless
The Commission also

ries

designed

announce that Warren A.
resulting from mately the distribution of mutual
shares
growth,i as well- as
from fund
outstanding today. Amos S. Treat and Albert /S.
Branin
have
become
associated
changes in security holdings.
The significance lies in the fact
;
with the firm in its sales depart¬
During
this
period, portfolio that the North Atlantic States
ment.
■ '■
\V\.
transactions by mutual funds, ex¬
were
and are the source of most
Mr.
Casey, yformerly Manager
cluding those in U. S. Government
financial business other than that of the wholesale
department for
bonds, totaled $4,469 million, the
survey
discloses.
Of this total, in Mutual Funds, thus indicating Buckley Securities Corp., will be

curities transactions

red

lays.

business

/

Inc.,
City,
Casey,

with

does

Canadian

this

$2,642 million represent purchases
by the funds, while $1,827 million

of

>

Co.,

York

.,

campaign

J.A, Warner Co. Adds
Warner

and

an arm of

it can to block the
CNrmdian securities in the

Mail,"

Arthur

Securities

United States.

director of the National Bu¬

Three to Sales Staff

impeding th
registration of Canadian securi-i
and their .qualification
fpp
sale in the American markets

ties

everything
<5iip

Government,;

it power to block the sale
Canadian
securities in th
United States by
of

enter¬

Government,

newspapers,

J.

in foreign

the,

Federal

our

of Science, a member
other scientific societies,

of Economic Research.

reau

funds

Yet

Federal

our

uses

Exchange Commission,

vancement

and

of

Charles A. Eaton

said,

American

con-i

siderations, the Securities and!
Exchange Commission, an arm;

House

"One of our cardinal
non-partisan policies is to encour¬
age
the
investment of
private

Fellow of the

a

the

pelling, mutually desirable

Foreign Af¬
fairs Commit¬

American Association for the Ad¬
of many

rank¬

Republi¬

from

came

which formed the within that area.
Although the
basis for a report to Governors of prior years were not included in
the Exchange, shows not only the this phase of the survey, it is be¬
steady growth of these open-end lieved that this proportion would
companies since the passage of substantially
hold
true
for. all
the

ganizations.

importance in!
economic and military de¬

our

'

For the first time in
history, authoritative figures reflecting the
effects of the growing open-end funds on
the business of the New
York Stock Exchange have been made
public in a survey conducted

Can-;;

and will continue to;

now

be of the utmost

fense against armed
aggression.;
Yet in the face of these
eom-jj

tee.

;

,

Statistics of the U. S. Navy De¬
partment in 1942-43, and subse¬

quently

stands

grim fact that under present

ada is

Secre¬

ing

statistical

World

^

considerations

Eaton,

Belcher

served

posts, culminating in his appoint¬
as

..

beyond these im¬

menacing world .conditions

of State,
Congressman

from the U. S.

various

the

con-

"Globe

point3 out.

Above and

en¬

the

as

tary

Army, in which he
I.

and Mail"

in

letter

a

States and

solidarity,

tne

In

30

War

and

American

,

United

tributes to nemispheric goodwill

Canadian

after

Teachers'

Exchanges.

for the

of

terprises."

Mr. Belcher's civic activities in¬
clude
acting1 as
Consultant
on

Sludy conducted under auspices of National Association of Investment Compan.es reveals bulk of securities held
by open-end invest¬

;

T.

shortly

Merit.

$>-

portant

A.

years

the

Survey Indicates No Adverse Effect ot Mutual

by

n

merit/orious

and

T.

In

sta es under the prudent man
rule would be followed in this state'."
-<--from "Selections" issued
by Selected Investments Co. of

1

a

served

Sept.

remove

citizens

f

capital, in

(R., N. J.) has released
30, calling upon Secretary of State Dean G.
"the barriers placed
by the Securities and

investments

va¬

private

Eaton

.

joined

ment

to

of

5*

Charles .A.

Commission

pri¬

He

his

dated

investment

foreign enterprises.

Congressman

in the way

civil bodies.

investments.'

"'We have always been of the
opinion in Illinois that there is
prohibition in the statute regarding investment shares and until
get a decision in this state, we feel that the decisions from other

rio

t

encouraging

on

Exchange

govern-

World

letter, from Mr. Chris Stolfa, trust examiner, says: 'We
a legal list for
guardians and conservators under the Pro¬
However, trustees, in the absence of directions in the instru¬

ment, are permitted to invest in

letter,
Acheson

industry

rious

S.

a

and

and for

in e n

"Some weeks ago, in
discussing investment companies, I reported
that 21 states had taken action of one
kind or another to make invest¬
shares legal investments for trustees.
not one of these.

for

in

vate

of Aug.

30, 1949, in the
column entitled "The Round
Table," by Austin Kipiinger, toe fol¬

ment

U.

re-

rch

sea

stand
**

organization,

:

Trust Funds in Illinois
In the

partisan

his work in

boin

-

Board

Securities,

"

well

statistical

IX

Says SEC Impedes Investments in Canada

Group Securities

Donald

/

(1361)

Co.

part?
and

\

14

THE

(1362)

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, October 6, 1949
country has had to seek the

Congress Alone Can

Canadian Securities
economic

indeterminate

Commonwealth

the

on

United

States

the other

on

indefinitely. Linked neither to the one nor
positive fashion the Dominion's economic situation,
while deprived of any benefit re- »>
with

sterling

or

areas,

suffers nevertheless from any ad¬
trend that develops in either

verse

of the two areas.

the

During and since

Canada

war

had

has

many

opportunities to commit herself
irrevocably in one direction or the
far

as

it

Now

other.

would

that
the United Kingdom is

as

concerned Canada is

appear

dollar

a

country, but without
economic agreement

area

obtain

more

less

or

economic security was

during

enabled

its

operation had
Dominion to bridge

the

traditional

the

gap

balance

Canadian

in the
of

hostilities

of

cessa¬

Canada's

ex¬

change reserves were at an almost
embarrassing high level. Conse¬
quently this was not the time to
endeavor to perpetuate the war¬
time measure. Subsequently when
economic

the

rated

situation

deterio¬

following the upward reval¬

uation

of

the

Canadian

dollar

in

political considerations in¬
duced
hesitancy to pursue the
question with the necessary vigor.
1946,

Recollections

of

the

1911

episode when

trade

reciprocity
by

arranged
ernment

one

far-reaching

a

agreement

Canadian

was

gov¬

and

rejected by another
the
present
Liberal

influenced

Administration
come

unfortunate

to

await

the

out¬

of the recent election before

making any further approach on
this question.
* y
v
.

*

It would

ditions

appear that con¬
longer favorable for

now

are no

the initiation of negotiations along
these
lines.
Domestic
economic

conditions have dictated

even

the

curtailment of ECA offshore pur¬
chases in Canada, and the BuyAmerica Act of 1933 would
appear
debar U. S. purchases of arms

to

which

exercise

can

in

the

arms

aid

bill

recently
placed before Congress. The pas¬
sage of the Reciprocal Trade Art
although offering hopes of ulti¬
mate economic benefit will doubt-

a r

'

the

During
of

section

tinued
in

week

the

firm

with

nals

market

con¬

special,activity

issues.

The

the

demand

connection with

the

public of¬
fering of $7V2 million Interprovincial Pipe Line convertible deben¬
tures which attracted considerable
U.

S.:

buying.
The corporatearbitrage
rate
was;
steady
at
1.2%% ==12% and arbitraging of
C*';P.

R.'s

from

counted for.

ac¬

irregular and earlier

were

strength in Western oils, following
discovery by Imperial Oil of
a
possible new field in the Red-

the

water district of

Alberta, was dis¬
profit-taking in later
Despite London selling

sipated

by

sessions.

there

the world

changing

on

of

1943.

of

The

alter the

Section

5

of

the

Participation Act
1945, which specifies
our

participation in

International

Monetary Fund

International
and

Bank

for

Re¬

Development, it

'Unless Congress
authorizes such action,

law
"

or

the'

President

or

Dr. Walter

E.

Spahr

the United

agree to any

value

said

not

or

ap¬

question

.

.

none

of

cials

can

into

people in the United
be

7.

""It' would seem,

to

as

Article

another

therefore, that

Administrative

our

lead

the

offi¬

United

States

'devaluation

with¬

out

Congressional1 approval; and,
cent about unconstitutional pro¬ if the majority of Congress has
cedures. Fortunately, if Constitu-' sufficient wisdom, such approval
tional and statute law is to be re¬ will not be given."
spected here, no one but a major¬
"The sole issue," Dr. Spahr con¬
ity
of
Congress can alter the cluded, "is whether the United
weight
of
our
standard
gold States is to have a thorough-go¬
dollar.
ing gold standard at the present
"It is true that the Gold Re¬
rate of $35 per fine ounce with
serve
Act of
1934 still permits all non-gold
dollars redeemable
the
Secretary of the Treasury, in gold on demand at that rate.
with the approval of the Presi¬
Redeemability on this basis, as
dent (in Section 8), and without proposed in H.R.
3262, is the only;
his approval
(in Section 9), to target at which our people need
change the dollar price of an to aim in their efforts to have re¬
ounce of gold. In the interests of
established in the United States
safety, those sections should have an honest and sound monetary

just

compla¬

as

-

been

repealed

when

the

Presi¬

unit."

first

eight

month?

Western

»■

oil-lands

however

the

sulted in

principal
^ t

bull factors in this situation.

means

serious

no

greater

recent

economic

Association

of

Stock

change firms will hold
Atlantic

13.

A

City from Oct.

feature

will

be

optimism

on

sociation

and

of

the

prog-f>

we

"have

j/in lithe

made

have

past century,"

serious

Secretary

~

Snyder
"does

York

not
that

mean

\ 1

said,

America

has

slowdown

in

the

rate

of

activity.
For the most
part, they have been of the type
which
we
might expect in the
course

of

our

American

of

that

the

ness

has

in

an

of

risk

The
to

a

means

are

he

on a

to

final

the

restore

John W. Snyder

-

Schram, President

of the New York Stock
Exchange,
will address the closing luncheon.

Ralph Starkie Now With

,

WALL

STREET

WORTH

YORK

4^2400

5,

N.

NY

Y.

1-1045




"And here in the United States
is

awaiting
have

we

the

greatest

known.

ever

incomes

market

Consumer

continuing at nearPeople
in
this iearning money
at a rate of nearly $210 billion a.
year.
And /behind these current;
are

record

levels.

country

are

incomes

is

now

also

a

record

volume

of

savings—$200 billion—in the
form of checking accounts, savings
accounts,
government
securities
and currency.
The possession of
adequate
savings 'has and will
continue to encourage liberal
spending
from
current * income.

Financial-Chronicle)

our

in

as

"Each

their storm

Weeks

lor & Co.

was

&

Stubbs

them
as

far

Others occurred in

for
and

with Kean, Tay¬

occurred,
our

high level.

there

citizens

economic
strike.

a

time

of

Whiting,

of

noticeable

were

1946.

the staff of Robert Hawkins & Co.
of Boston.
Mr. Starkie was for¬

prior thereto

Some

economy.

fact,

continued at

Starkie has become associated with

representative

v

Further, our standard of living, is
rising and our population is. in¬
creasing.
"Not only do

we

have this tre¬
market, but

consumers'

mendous

equipment
are
construction
and.
equipment of plants continue at a
high level; and, today, the Amer¬
ican industrial plant is the most
modern and best equipped in the
world.
It is ready to make full
our

plant

and

New

ready.

of

wealth

the

and

of

new

methods

> new

mate¬
which

made available.

And

levels.

opportunities, are

here,

them with vigor

if

and

enthusiasm, we can continue
forward to new heights;

we

grasp

to

move

of

achievement

in the years...

ahead."

James

With A. G.

AIlyn & Go.

MASS. — James F.
McCormick, Jr., has become assoBOSTON,

gemm

have

been

have

was

locali¬

pact of the adjustments far
than

others—New

more

England,

I
know, is one of them.
And I
fully appreciate that the over-all
picture is of little comfort to the
out of

man

devote

of

ever

it

cern

of

the
area

job. All of us must
effort to easing the

a

every

unemployment

strikes.
the

The

con¬

Administration

employment
is

wher-,

recent

situation

with

in

this

ful attitude which

we

must main¬

tain

if

omy

we

are

to

keep

our

econ¬

should welcome, not fear,

the return to competitive business

Our

free

an

to

have

ket.

competition.
such

as

A sellers'

we

have

run

greatest

bad

for business.

progress

has

the

ment of A. C.

trading depart¬
Allyn & Co., 30 Fed¬

Mr.

Street.

McCormick

was

formerly Manager of the trading
department for Mixter & Co.

,

With A.*B. Morrison Co.

mar¬

-known

during and since the war, is in the

long

F. McCormick, Jr.

with

enterprise

out

for

ciated

eral

sound and healthy.

"We

J.

example of the watch¬

an

system could not thrive long with¬

about

we

and

felt the im¬

course,

have

As yet, however, the va¬

rious adjustments which

industries

of

some

run

cellars, certain that

tornado

ties have,

conditions.

adjustments
who

conditions.'

"Certain

impact

"It is true that lately we have
undergoing adjustments in

1947, and in 1948.
This year, we
experienced further adjust¬
ments in some
areas; in others,
activity has turned upward or has

Robert Hawkins Co.

local

opportu¬

been

merly

NEW

will

have

HARTFORD, CONN.—Ralph A.
TWO

growth

bring , us even greater
nities for the future.

back

to The

peace¬

time

flow
.

business session of the Asso¬

(Special

a

are

day will be devoted

Emil

we

the

on

/'Which
...

top

threshold of

nation-wide scale

capital.

ciation.

that

new

effort

~

been

reached.; It

C.

developing

INCORPORATED

our

ful supplies and competitive busi¬

will outline a program which
and other business executives

A. E. AMES & CO.

a
competitive,
rapidly recalling
talents in salesmanship.
\
" V

plenti¬

of age—

Enos, President of the
Standard Steel Spring Company,

CANADIAN STOCKS

to

return to the normal

environment

come

Robert

CORPORATION

return

a

economy, we are

and

ing will be held the ^second day
night at a dinner meeting,

MUNICIPAL

they could be turned out.

as

With

over-all

that

PROVINCIAL

fast

"The

*

to

Exchange.

substan-.

tiall,y unchanged since before our
entry into the war were sel ing as

re¬

Scheduled for the first day are
business sessions. The joint meet¬

GOVERNMENT

Products

fol¬

did not,

we

equipment, the net working cap¬
ital of "corporations continues at

been
experiencing, industry by
industry, have not resulted in a

joint

11

New

adjustments

demand and further business expansion.

"The
ress

meeting of the boards of the As¬
Stock

immediately
years,

the business outlook and continued industrial expansion.

Ex¬

a

sell.

to

despite these outlays on plant and

Speaking at the dedication ceremonies of the John Hancock Mu¬
tual Life Insurance Company's new home office
building in Boston
on
Sept. 29, Secretary of the Treasury John W. Snyder expressed

meeting

a

"During and
lowing the war
have

ment; have

slowdown, and return of competitive market

consumer

'

The

lesson

record

Treasury Secretary holds

still

Exchange Firms
To Hold Meeting
y:

Threshold of New

or

Peacetime Growth: Secretary Snyder

Consolidated Smelters and po¬
tential profit from extensive hold¬

of

first'

wartime discoveries and develop¬

United States

earnings for the

in

constitute

American- home. It was our
in retail selling on a;

every

national scale.

rials

of the year;
the railroad's controlling interest

ings

Mississippi, from Canada to the
They put the workshops of
England in touch with almost

Gulf.
New

use

•

strong undertone in
C. P. R.'s following the announce¬
was. a

ment of healthier

markets for their i4

They set up routes and "
canvassed practically every home from Long Island Sound ta .the"

par

dollar

general change in
values under Article IV, Sec¬

tion

devalu¬

arises

propose

.

approve any

par

connec¬

these

.

.

change in the

IV, Section 5, or
Article XX, Section 4, of the Ar¬
ticles of Agreement of the Fund,

by legislative
of Constitu-;
does

of

States

any

behalf

on

of the United States

under

> was

nor

shall

agency

of

any

our

Com¬

terms of

person

matter

would

in

July 31,

by

:•.,

States

National

Woods

neither

ations.

whether

'

;

but, instead, went out
new

is provided that

be mentioned in

with

"The

customers,
and found

weight
gold dollar was
expire on June 30,

to

construction

government

to

of

what could

of gold is

standard

But

and

apparently,

pear

m

accomplished by salesmanship.
They refused to sit and wait for

the

about authorization

tion

lesson

a

be

the

g o vernment.'.

bodies,

to

power

our

Bretton

'the

Nothing,

Economists'

•

permitted

gen¬

as

of

dent's

refer¬

to

peddlers

wagon

currencies

ounce

an

us—paiticularly not new
businessmen.

tinware

century ago were giving us-and

a

on-

'

still

London

large proportion of

a

the volume of business transacted.

Stocks

at

CANADIAN BONDS

Vice-President

or

or

erally,
red

inter¬

also steady in sympathy
for Free funds

were

with

external

the

bond

Alberta

the

ministers

often,

to

New ■" England

Your

'

y

cabinets,

tional

control.

no

in

Canada

in

Canada, as an escape clause in
the original act no longer appears

Executive
on

t

>

S.¬

payments.

Immediately following the
tion

U.

Spahr,
on e

developments therefore
Policy, said
that Canada will , be
in a statement
obliged to adopt a more independ¬
released
on
ent economic policy. Canada's eco¬
Oct. 3.
nomic relationship with the United
"D e v aluaKingdom and the other British
tions in other
Dominions has become increasing¬
c ou n t r
ies,"
ly remote. On the other hand it
Dr.
Sp a h r
would appear to be futile to place
says,
"were
too much reliance on special ef¬
a p
patently
forts on the part of the United
instituted
by
States to safeguard the Dominion's

over

to'

Congress," Dr. .Walter products.

mittee

Recent

by failure to keep alive the have placed the Dominion at the
wartime
Hyde Park Agreement mercy of external developments

Committee

out constitutional limitations

suggest

pass

which

E.
M

serve
Canadian
interests
permanent better
allowed to than the previous policies that

National

now, regardless of debasement of other
not be undertaken
except by act of

and could

now
preclude any U.-S.Canadian negotiations for a bilat¬
eral trade pact.

binding
with the
United States, the Dominion is un¬
able
to
compensate its loss of
markets in the sterling area by
economy come what may.
At the
means of increased exports to this
present youthful stage of develop¬
country.
ment moreover >there is no ques¬
Canada's greatest opportunity to tion that virile independence will
any

Economists7

Spahr

legally prohibited1

association lessly

outright

dollar

the

of

"Devaluation of dollar to less than l/35th of

to the other in any

suiting from

"Certainly, salesmanship is not
new

weight of standard gold dollar. '

v

maintained

be

not

can

Vice-President

Monetary Policy points

position vis-a-vis the British

hand and the

one

Executive

cus¬

' !/ ''

^

Devalue Dollar:

By WILLIAM J. McKAY i
Canada's

tomer.

Our

stemmed

from the fact that business in this

(Special

to

The

Financial

Chronicle)

MIAMI,-FLA.—Perry L. Smith
has become

Morrison &

associated with A.

B.

Co., Alfred I. du Pont

Building. He was previously with
O'Connor, Weller & Co.
,
.
:

Volume 170

THE

Number 4844

Cite Business Uptrend
A composite opinion of members
of National Association of Pur-

■

chasing Agents indicates business
gains in August have continued
in September, though overshad¬
owed by threatened strikes.
The

composite opinion

of

pur¬

Agents Business Survey Commit¬
tee, whose Chairman is Robert C.

substantial improvement.

employment
balance

Buying Policy
further

A

vailing

of

policy

a

few

the

pre¬

months

still 90 days and

There has been some ex¬

ration, Division of Olin Industries,

tension

IN e w

.inc.,

Haven, Conn.,
is

indicating

"were
for

' commitment

a

limited

it

not

the

shad¬

ows

of

over

very

view

close

of

the

to

recent

the

coal

Edward

Seventy-seven

ing to

a

per

cent

direct question

and

du

Pont, Homsey & Co., 31 Milk
Street, members of the Boston
Stock Exchange. Mr, Herlihy was

formerly

proprietor

Edward

of

reply¬

on

Herlihy & Co.

_

from barely notice¬

ranges

Firm

^

labor

able to substantial betterment.

of

to

Frank

ILL. —G.

Cleve is

New York

Van "the

H.

it

Shakespeare,

engaging in a securities firm

business from offices at 1226 Far-

of

Inc.,

City, of which he was

The

stockholder.
A.

Leroy

•Company

has

close the firm of

Strasburger,

principal

Strasburger &

continue

will

72nd

Street

branch

general
ness

by

.

coverage

well

is evident and in keep¬

Street.

.

'

here¬

as

simultaneously with the branch's
silver anniversary. Mr. Mc¬
Gee opened the branch as Man¬
ager on Oct. 6, 1924. It was orig¬
inally a unit of Farmers Loan and
Trust Co,, affiliated with National
City in 1929.

Appointment of E. B. Mclnerney
to the Board of Directors of The
Royal Bank of Canada is an¬
nounced.

Mr. Mjclnerney has been
Manager of the London, England,

branch

of

the

bank since

Assistant Manager

of

the

busi¬

present

possibility
others, the

September

of

; survey
Pure

hasing
Agents' opin¬

Robert C. Swanton

ion

rated

could

be

optimistic, for the important

factors of-business reported—pro¬

duction;

order
bookings;
price
inventory
position
and

trends;

•

employment—fully
confirm
the
improving conditions they found
August."

~

in

Fifty

of the reports
production sched¬

cent

per

show increased

ules, compared to 10% indicating
declines—which
in that respect

is

the

best trend

since last October.

New orders

continued to advance

at the same
•

rate

are

previous

J firmed

August—45%

as

while 39%

up

are

backlogs.

maintaining
Prices have

for the second

con-r
with only- 8%
showing further declines while, at
the low point of the recent trend,
79% reported lower quotations in
up

secutive

month,

•

Inventories

June.
duced

-

being

are

reT

further; turnovers are im¬

proving; employment.is up,
though still lagging behind pro^
duction increases.
Improved

-

MINING THE WEALTH OF A TREASURE ISLAND
Once the

Hiding place for the booty of pirate Jean

worker

productivity is reported.
.Buying policy is short-range: 86%
report covering with 60 days as
the limit, but there is a-^slight
movement from 30 days toward 60
days

within
While

spread.

have

devaluations

belief

dominant

to

effect

on

caused

speculation,

pessimistic
early

that
commitment
foreign currency

the

prer

is

it

that

is

.some

too

the probable
business and prices.
determine

Despite the many indications of
business improvement, a cautious

"be-ready-for-anything"
remain

will

while

so

duction
with
,an

JEFFERSON ISLAND SALT COMPANY sank the
largest round shaft in the world there in 1920, mak¬
ing the salt treasure:accessible.

v-

as

trend

company

SOF-T-SALT, the most popular meat

curing salt in the country, Jefferson Island produces
flake types

and

ter

many

in the United States east of the Rockies.

is

threatened
In fact,

put

of salt for such diverse

flour

uses,

purposes as

few

"--

a

most

modern and efficient combined

evaporated salt plant in the country

was

into operation at Jefferson Island in 1941, after

fire

completely destroyed the old plant the year

before.

j

,

:

-

rock

including canning and pharmaceutical,

salt

for

such

different

processes

pickle

as

ing of artificial rubber and manufacturing of ethyl
gasoline.
A

few

.

years

back, Jefferson Island shipped

hundreds of thousands of tons of salt lor
time

industries, and

carton

Jefferson Island ships salt to 33 states, covering all

taking

Of

stability.

an

upward

furnishes

use

many

in

This is another advertisement in the series

cent

table

salt

that

"really brings out

the flavor" for millions of American housewives.

is

keen.

devaluation

monetary

reported

in

-

heavy

stales.

economic

development of the South

Equitable

will

welcome ropportunities

goods

increased

to

the further

is; yielding

lower

NEW

NASHVILLE

EQUITABLE

DALLAS
V I

LLE

GREENSBORO

ORLEANS

are

AND

oration

MEMPHIS

Purchased inventories

YORK

HARTFORD

CHATTANOOGA

BIRM INGHAM

Inventories

increasing

contribute

indus¬

NEW

has

to

by supplying .capital funds to sound enterprises.

being

is

profits.

decrease

by Equitable

Southern

K N.OX

again in September.

years

Much inquiry

Several .reports indicate

volume

than ten

of

tries, but few orders being placed.

sales

more

Corporation featuring outstanding industrial and commercial concerns in the

effect

The

patched carefully.

published for

Securities

Competi¬

freight increases.

JACKSON. MISS,

down

The rate of

Lessened,

.uBrownlee O. Currey, President

:v

reflecting

production

s

demands

which also expand new orders for




322 UNION STREET,

NASHVILLE 3.

war¬

today its famous HEXAGON

the

course,

most of them were reflecting re¬

tion

but¬

manufacturing, evaporated types for

August's

confirming

toward

a

farm

and

Prices showed more strength in

September,

f

such

Besides

of salt for household

tremendous volume
uses,

territory and the Eastern

foreign countries.

ten

manufacturing, water softening, meat capping, mak¬

and

Commodity Prices

to

Kentucky, Jefferson Island is the fourth largest salt

rock

tective purposes.

and

seaboard,

and

basic pro¬

unmeasurable amount of cur¬
production may be for pro¬

and Midwestern

Southern

Organized in 1919, with headquarters in Louisville,

rent

\

five-milerdeep mushroom of purest salt—

largest,

disturbance.

Jefferson, and all

Jefferson Island, off the Gull Coast of Louisiana.

The

industry

labor

that's

a

our

of

much

attitude

the while

influence

major

a

Lafitte, Jater the,home of Joseph

a

of the London

strikes and
the

1929,

post he will relinquish on Oct. 31.
He will be succeeded by B. Strath,

picture

.

The

York;

own

branch since 1948.

tofore.

.

of

Royal Bank Appoints
illness

.been decided to

City;

McGee, Jr., celef
anniversary as

25th

National City Bank of New

Close

of the extended

J.

Because

R.

his

15

Manager of the Madison Avenue

BOSTON, MASS.—Edward Her¬
lihy has become associated with

productivity indicate the improve¬

CHICAGO,
t

George
brates

(Special to The Financial Chronicle)

Shakespeare. &

future

25 Years With Nat'l

Herlihy With
du Pont, Homsey Co.

gloom

cast

possible delivery interruptions.
A

due

(1363)

strike.

against

protection

reflect

not

of

The fig¬

G. H. iVan Cleve Opens

though not shown by the reports,
as

one-half

range,

ported

r e

as

of

are

do

unemployment

ment

98%

under.-

in

September reports.

ures

of "hand-to-mouth to 3(1
days," occurred in September —•
70% in July, 64% in August, 57%
in September.
A corresponding
increase in the 60-da.y column is

figures are not in
the production in¬

with

recorded

creases

the

from

drop

noted.

,

pro¬

,

erally reported to be satisfactory
One-third of those surveyed re¬
over the past several months, are
considerably better in September.! port employment gains, with 19%
further declines.
Re¬
83% of those reporting indicate a showing

Director of Purchases,
Winchester Repeating Arms Corpo¬
;

CHRONICLE

Employment

Swanton,

.

FINANCIAL

duction schedules.

ally in tune with demand.
Turn¬
over rates, which have been gen¬

back,

chasing agents who comprise the
National Association of Purchasing

&

ing with the short range of

Supply is gener¬

replenishment.

Purchasing Agents

COMMERCIAL

TWO WALL STREET, NEW YORK 5.

THE

(1364)

16

Devaluations Make

Gold Standard Restoration
Vice-President of Economists' National Com¬
mittee on Monetary Policy, contends gold convertibility of dollar is
"needed to back America's efforts toward world recovery."
"The

imperative

Committee
of

Chamber

firm anchorage in gold for our money. When the dust
the dollar, because of its unchanged

a

of current devaluations settles,

United

States

an

ounce,

remain

one

of

store of value and uni¬

as a

more

versally trusted medium of inter-

ognizable ele-

j national payments. This will not

increase, but lessen the hoarding
devastatedof gold.
It will store up confiforeign
ex- dence
throughout the world by
change
land¬ putting some terra firma, in the
form of a dependable dollar, un¬
scape."
Observing der the world's competitively de¬
'hat chaos and teriorating exchanges. It will fa¬
demoraliza¬ cilitate
arriving at new, more
tion

in settle-

Leland Rex Robinton

only

can

made

be

avoided

if

gold

unconditionally and
available at fixed

where

for

return

Robinson,

sta¬

more

ble

every¬

rates

National

"Restoring to holders of Ameri¬

is
in

dollars, Leland Rex
Vice-President of the

Economists'

therefore

realistic and

quotations among currencies
which are quoted in dollars but
or the world's
have no directly asserted parity
commerce and
'"vstment in gold.
•
terms

nent

Committee

£

from
U.

dollars

can

home

at

abroad

and

their historic right to demand and
to handle

gold will actually cause

STERLING

COMPANY,

Loans

Cash
June

372,489,073

443,979,908

12,160,291

O'Shea,

for

U.

in charge of business de¬
velopment at the Bank of Mon¬
years

treal's

York

New

been named
Business

this

p

1

a n e

which—by the way—is

eight
times our own. The paper dollars
paid for this rapidly growing and
immobilized

hoard

over

of

monetary

gold carry no assurance that they
be

can

the

turned

rate,

same

for

back

gold

at

in fact that they

or

be turned back for gold at all.
"This
dog-in-the-manger atti¬

can

tude which

since

have been nursing
dollar was deliberately

the

we

depreciated
able

in

lessened

as

is

the

and

pound

made

and

1933

not

irredeem¬

going

to

be

cheapening of the

other

'soft

so-called

currencies' enhances production

gold

in

South

Africa

of

else¬

and

the

fixed

rate

$35

of

the

health-giving
oroductive capital

from the rising tide of ship¬
to our shores to
be im¬

ments

pounded at Fort Knox.
"Make

ible

dollars

into

Montreal. His

successor

E.

Assistant

* V'": *

*

■J.

V— v

American monetary gold were re¬

quired to fortify new exchange
parities
and
undergird
foreign
if participation

in them by private banking insti¬
tutions is to be encouraged, this

debt to

us

needs to be

in dollars of

essential

expressed

Dr.

Robinson

until

leave

some

conditions

recovery, bound up

for

gratifying

Failure

part,"

to

so

from
through¬

act

vert

much

toward

of

concluded

Deposits
Cash

U.

S.

curity
Loans

998,899,704

30,860,436

COMPANY,

from
U.

S.

banks—

Loans

June 30/49

$789,026,858

739,902,018

215,601,272

and

69,340,304

5,844,681

*

COMMERCIAL

TRUST

NATIONAL BANK

COMPANY

resources.

OF

NEW

from

June

U.

S.

Govt,

curity
Loans

CONSOLIDATIONS

Undivid.

Bankers

and

45,852,596

Total

New York

Company

of

the appoint¬

announces

of Elie Delville

Manager
and Henry B. Dyke as Secretary
of its
Brussels Office, effective
Oct. 1. As Manager at Brussels
Mr.

Delville

Claiborne,
30

years'

pany,

as

succeeds

who

is

service

Omer

retiring
with

the

com¬

principally in Brussels.

the company at its Brussels Office

has

and

served

officer of that branch since
Mr.

Dyke

rejoined

the

as

an

he

war

for

company

had

been

with

the

12"years,

and Brussels Offices.

Guaranty
New York
ment

of

formerly

Trust

Company

announces

Alfred

W.

Assistant

with

Office,

Vice-President

the

banking

as

a

at




S.

curity

TRUST
NEW

COMPANY

Undivid.

YORK

Sept. 30,-49
resources.

«

and

from

U.

S.

Govt,

and

581,726,047

1,102,405,251 1,072,285,192
956,427,340 1,061,252,254
71,661,565
70,295,434
*

Cash

and

S.

Govt,

curity
Loans

*

and

cents

Oct.

on

4

per

will

and

payment will

Trust

Company

$1.60

share

per

in

$1.80

the

corn-

share

per

in

to continue

per annum

(in¬

City
Company)

Trust

CITY

BANK

NEW

OF

Cash
from

U.

due

Burbank, President
of Rockwood &
Co., to the Ad¬
visory Board of the Brooklyn

Govt,

S.

curity
Loans

1,194,580,598

1,411,285,601

bills

and

1,346,355,859 1,367,519,727

—

profits

-

Burbank

is

a

Total

46,570,600

44,568,623

Cash

U.

S.

Govt,

Executive

Com¬

mittee of the East
Brooklyn Sav¬

Loans

Cash

$119,148,643

85,125,189

85,962,411

14,303,795

20,255,553

——

and

due

hold'gs

and

Govt,

S.

curity
Loans

se-

.

hold'gs

Undivid,

profits

June 30 *49

$513,408,102

$529,999,509

86,492,340

'

78,397,363

profits

6,727,793

<

9,988,260

**

*

9,756,569

;

Almost

and

1,200

*

women

.' Z

York

on

Savings
addition

an

Flatbush

office

at

McDonald

and

Avenues,
Brooklyn,
N.
Y.
adding
4,000
square feet of banking space.

Harold

G.

Parker, President of

the Flushing Savings Bank, Flush¬

Dobson, Inc., investment con¬
sultants, of
Flushing,
died
on
Sept. 30. His age was 60.
Vs
£

Edwin Flint
The

£

it

Metcalf, Director of

National

on

Bank

of

died

on

attended
238,859,057

139,927.766
8,494,639

Y.

Auburn,

the

of

bank

Vice-President

a

the

in

the

Hotel
Oct.?

a

Chase National

dinner

grand

in

their

ballroom

Waldorf-Astoria
5.

Winthrop

the

13th

since

1905

from

1920-

£

*

HANOVER

COMPANY,

BANK

NEW

&

TRUST

YORK

Sept. 30/49

.

/

•' '■

■

Total

$

,

Deposits
Cash

-

and

from

U.

S.

Loans

$

due

banks
Govt,

curity

Bank

W.

honor

of

last

June 30/49

•

1,507,113,320 1,495,176,255
1,361,687,694 1,550,499,537

resources-

380,648,839

419,803,128

556,043,290

581,317,155

484,887,391

422,896,181

111,126,795

110,601,548

se¬

hold'gs
bills

and

discounted

/

*

*

'

%

•

Z;

0

Elwyn G. Preston, Jr. of the
Wellington Sears organization was
elected

Slate

Street

Director

a

Trust

of

the

Company,

Boston, Mass. Mr. Preston is As¬
Treasurer

of

the

West

Point

Manufacturing
Company
Dixie Mills, Inc., also Treas¬
of the

Equinox Mill.
-

•

*

N

*

the

of New York for 25 years or more

220,333,546

and

1,387 men

who have been

staff of

143,752.856

Director

urer

of the

124,714,304

.

Correc¬

>Z;

that construction

started

bank's

Church

and

492,168,048

r

been

the

to

New

announces

sistant
1,079,215

113,117,907

8,352,382

Greater

Bank,

.

bills

and

bills
_

of

Z;\

■ >

•

Bernard F. Hogan, President of

today

from banks—

YORK"

Sspt. 20/49

se¬

discounted

V;
'

■■

June 30/49

due
__

State Commission
"

YORK

NEW

475/247,889

and

curity

the

AND

TRUST

FARMERS

$118,190,283

resources-

Deposits

12,393.372

NEW

the

Surplus and undivided profits

Sept. 30/49

382,972.979

12,927,697

resources.

from banks

and

BANK

COMPANY,

451,101,729

381,682,980

Deposits

•

Trustee

CITY

U.

;

Indemnity Insurance
Company and a Commissioner of

$

se¬

discounted

'334,720,315

458,345,593

COMPANY,

.

the

boro Mutual

June 30/49

hold'gs 1,853,265,018 1,721,538,249

Undivid.
TRUST

pany,

,

banks—

1,205,668,130

BANK

of

1948.

4,897,643,284 4,945,372,474
4,526,158,895 4,579,501,332

——

and

1,075,448,137

NATIONAL

director

a

Packing Com¬
Inc., director of the Inter-

CENTRAL

resources.

Deposits

bills

PUBLIC

is

Trunz

Greater New York

YORK

"

discounted
THE

re¬

Savings Bank of Brooklyn, N. Y.

bring

dividends from

any

Farmers

$

306,338,691

__

and

of September. Mr. Metcalf was a

$1.80

Total

profits

the

of

,

packers

Auburn, N.

Total

se¬

discounted

Jackson,

•

•

1,193,241,901

hold'gs

Undivid.

Baxter

Member of

20

conditions permit,

June 30/49

,

Inc.,

*

due

H. Russell

Mr.

of

capital stock of The

with

Undivid.

1,060,924,525

from banks—
U.

Chemical Bank & Trust Company,
New York announces the election
of

resources-

Deposits

bills

discounted—.
profits

Undivid.

N.

$
Total

598,809,362

se¬

hold'gs

878,771

Sept. 30/49
$

#

Sept. 30/49

Trunz,

the

IRVING TRUST COMPANY, NEW YORK

2,315,252,599 2,391,694,550

V

tailers of meat products, has been
elected a Trustee of the Lincoln

;p: 5,500,857

885,073

2,749,862,758 P.fm.pco oiq

due

banks—

curity
Loans

——

5,157,392

the

*

55,913,519

fc

in

one

—

Bellaire.

Mr. Charles M. Trunz, President
of

11,351,612

hereafter to be paid quarterly.

570,009,752

56,440,166

profits

11,604,025

un¬

NATIONAL

542,627,129

540,975,782

■

>epo£its

432,304,612

532,789,300

—

23,681,474

in

ing, Queens, N. Y. and of Parker

$.

bills

June 30,'49
$

Total

hold'gs

and

Queens
one

tion.

This

14.

Bank

June 30/49

362,130,920

in

;

dis¬

on

cluding
■;

se¬

discounted

OF

-,

—

two

of

due

Govt,

Loans
GUARANTY

Office of the bank.

Spindler,
Treasurer at

and

from banks

the main office.

of

the appoint¬
C.

Cash
U.

and

Jamaica and

dividends of the bank at the rate

1,513,701,497 1,620,504,826
1,316,710,746 1,416,974,201

resources.

Deposits

associated

department

Brussels

serving
successively in the London, Ant¬
werp

Second

Avenue

1928.

staff in 1946 after five years' serv¬
ice with the British Navy. Before
the

Madison

Cash

Delville, a
native
of
Belgium, has been associated with
1919

its

V.

after

Mr.

since

14,602,042

Sept. 30/49
$ ••

company

fice and 20 branches in Brooklyn,
one
branch office in Manhattan,

1948. It is the present intention of
the directors of the
bank, provid¬

BANKERS TRUST COMPANY, NEW YORK
u

ment

42,811,746

14,399,067

1

the

&

ed

.

Trust

99,054,664

-v

CAPITALIZATIONS

Guaranty

53,236,724

99,127,627

profits

7,521,062

—

pared

bills

discounted

NEW BRANCHES

174,359,930

se¬

hold'gs

and

6,460,246

calendar year 1949 to

$203,631,116

53,274,381

—

of

operates its main of¬

now

Farmers

30/49

$210,932,840

which

office

paid by the bank and City Bank

&

due

banks

$25,567,524

—

declared

Oct.

YORK

179,006,904

and

June 30/49

$24,665,946
22,766,007

the amount of dividends per share

*

office will be the 25fch

new

Mr.

be paid on Nov. 1, to shareholders
of record at the close of business

69,984,293

6,258,676

__

profits

The

banking

*

COMPANY, NEW YORK

dividend

was

472,575,324

*

Cash

$

National City Bank of New York

bills

discounted

Deposits

OFFICERS, ETC.

A

share

220,303,315

471,957,695

office will open for business

has

Z/i•••,

se-

hold'gs

Undivid.

11,697,949
5,674,404
V.VHZ V
V Z
3,297,565
2,632,189

YORK

NEW

due

Govt,

17,246,361

due

and

Banking Depart¬

within the next few weeks.

10,506,745

divided prolits

739,967,802

curity

8,903,196

__

banks

Company,

29,006,36/
V
'H

41,005,869

TRUST

counts

Sept. 30/49

and

$74,472,168

S. Govt.„ ^se¬
curity hold vs

TRUST

&

$788,041,337

resources.

Deposits

June 30/49V

*

and

Loans

*

BANK

"F

COMPANY,

YORK

Zz-

resources-

from

U.

%

J"V'-

*

$34,337,016

Deposits

577,362,541

EXCHANGE

3,294,985

TRUST

Trust

Queens Boulevard, Kew Gardens,
Queens. It is expected that the

12,547,691

3,297,565

un-

Surplus and
CORN

Cash

11,697,949

Sept. 30/49

bills

profits

i

*

65,968,363

*

branch office at 116-22 and 116-24

44,831,275

.

bills

■'

V„.

988,407,905

32,093,716

!

67.643, 596

Brooklyn, N. Y. has been author¬

new

se¬

and

Cash

555,237,010

hold'gs

Undivid.

Total

41,005,869

hold'gs

CLINTON

755,927*142

608,089,065

;

;■

v

se¬

and

10,446,959

due

Govt,

Total

discounted

THE

News About Banks

S.

'

v

Govt,

65,560,443
/

29,043,066

Surplus and

due

banks

1,317,800, 673 1,382,631,244
profits

ized by the State

8,903,196

'

2,094,366,917 2,234,645,610

.

and

from

dis¬

and

ment to open and maintain a new

June 30/49

$88,816,979

Divided prolits

$

CORP.,

$78,372,420

—

curity

2,268,280,156 2,407,481,056

resources-

1,099,289, 314 1,291,193,008

se¬

Brooklyn

*

YORK

from banks—

■»

new

June 30,'49

$

Total

even per¬

peace."

and

*

* /■';

and

$

$

resources-

Cash

.

Total

NEW

he

COMPANY,

Sept. 30/49

REVISED

Total

THE

30/49

4,366,208

Sept. 30/49

national effort

our

recovery

TRUST

Loans

4,444,470

—

June

due

counts

.

OF

YORK

hold'gs 1,760,469, 739 1,723,449,125

Undivid.

NEW

YORK

Sept. 30/49

45,306,584

24,368,292

un-

discounted

world.

America'*

on

45,272,403

SCHROEDER

Deposits

BANK

NEW

4,507,112 ,607 4,677,221,4044,106,109 ,735 4,283,944,130

banks

22,959,144

bills

Z./'

■

U.

NEW

and

Govt,

S.

curity

divided profits

Porto Rico.

MANUFACTURERS

OF

resources-

from

hold'gs

and

Loans

economic

response

U.

se-

discounted

;

con¬

with freer cir¬

Robinson

Dr.

his

up

NATIONAL

Sept. 30, '49

Cash

59,882,041

curity

i

Oct.

when

14

take

to

duties in Ponce,

of these

culation of gold and dollars, will

bring

Oct.

CHASE

$

due

Surplus and

the New York office of the Banco

*

unchanging gold

Fulfillment of

tent.

on

THE

YORK

SCHROEDER BANKING

Govt,

record, almost

years.

29,067,627

banks—

Loans

I.

Pro Agent of the
Credit Bank, New York
Agency, Mr. Bateman will be at

greatly encour¬
Furthermore, if loans of

central banks, and

announced

S.

Formerly

Ponce

40

88,707,620

profits

Prague

de

the longest service

bilis

and

Fries-

completed his 48th
the bank. Among the
Bernhardina
Jehli
has

in

year

Total

Deposits

point of

Puckhafer,

Max

whom has

of

Deposits

—

Oldest

department, each

June 30/49

resources-

Cash

Assistant to the Presi¬

was

NEW

in

muth of the loan

CITY

Sept. 30,'49
Total

...

4,

entire staff.

and

$105,655,567

hold'gs

HENRY

from

appointment of Samuel

Porto Rico

Charles F.

*

BANK,

NEW

head¬

Toronto

bank's

as

are

15%

over

members

$103,415,287

*

J.

quarters since 1945.

boundaries will be

aged.

837,153

Superin¬

The

bank's

staff

se¬

and

divided

tendent of Business Development,

,'K'zV

represents

of the

27,148,221

is Joseph

the

which

387,

active

Surplus and un¬

ounce,

an

"may largely negate or

readily convert¬

gold."

at

movement of
across national

where, and sends into overseas workers and consumers
hoarding much of what is left out the whole of the free
over

are

Govt,

curity

ment at the bank's head office in

at

reached
their
25th
anniversary this year, in¬
creasing the 25-year group to 1,-

due

discounted

Superintendent of the
Depart¬

will

dollars

and

interchangeable

S.

Loans

has

Agency,

down which flows to

gold

910,016

banks

Development

McCully,

employees

89,068,930

and

from

many

dent of the Banco de Ponce, Ponce,

freely

24,752,489

NATIONAL

the dinner,

service

women,

resources-

and
were

followed by a program
entertainment. A total of 172

Sept. 30/49
Total

Cash

P.

Bateman

"When

78,500,623

Deposits

continued rush for redemption
but it will spike rumors of further

made

68,784,340

se¬

bills

profits

GRACE

bills

profits

Howard

no

underground

38,636,087

*

Monetary Policy, urged imme¬ dollar devaluation in cold and pu'
passage of H.R. 3262 which an end to the often substantial and
would establish convertibility of fluctuating premiums
at which
oiar paper money into gold at the
gold is quoted in terms of dollars,
rate set by Congress in 1934.
in the 'natural state' in our coun¬
"As things stand today," Dr. try, and in such so-called 'free
RObinson pointed out, "we have markets' as exist beyond our bor¬
pretty much a one-way street ders.
;'v.
/ v-.\ "vc.y
country the bulk of
t's gold production,

35,170,582

482,100,262

12,935,931

Undivid.

Board,
President,

was

466,237,326

diate

our

June 30/49

$143,283,955
135,529,536

hold'gs

and

the

Vice-President,

32,856,330

Govt,

S.

Loans

which

service

131,002,623

__

of

hosts and speakers at

due

banks

curity

1,516,621,319

on

vaults in

and

from

30/49

494,256,596

discounted

TRUST

&

YORK

$139,028,509

i-

—

se¬

and

BANK

NEW

OF

discounted

hold'gs

Undivid.

*

NATIONAL

resources-

Deposits

YORK

482,255,261

Govt,

1,814,351

COMPANY

due

banks

S.

curity

52,962,994

1,887,322

profits

*

1,327,824,775 1,366,195,960

and

49,043,773

bills

discounted

Undivid.

U.

Cash

65,960,493

hold'gs

Sept. 30/49

TRUST

1,479,365,504

resources-

Deposits

58,507,332

Chairman

Percy J. Ebbott,

of

*

Sept. 30/49
Total

27,234,961

se¬

and

Total
BANK

CHEMICAL

the

in

ments

curity
Loans

of

Director

a

*

urges,

rec-

few

tize

and

*

18,209,871

due

the

of

Commerce

NEW

"as an effective means of
will establishing our money unit once

gold of $35

and

130,095,775

banks
Govt,

S.

$163,054,281

113,236,077

-

and

from

U.

Brooklyn Cancer Committee.

the

nominal value
in

Cash

the
the

of
of

Member

States;

}

,

June 30,'49

$146,405,714

resources-

Deposits

Manufactures of the

Chocolate

Policy

currencies

other

Total

Labor Relations Committee of the

plunge of the British pound and more than a
in terms of the American dollar makes

downward

of

score

a

mittee of the Association of Cocoa
&

• t

Sept. 30/49

Com¬

Executive

the

of

United

Leland Rex Robinson,

Vice-President and

also

is

He

Member

YORK

NEW

OF

COMPANY

TRUST

STATES

UNITED

ings Bank and is President of the
Brooklyn Chamber of Commerce.

Imperative

Thursday, October 6, 1949

CHRONICLE

FINANCIAL

&

COMMERCIAL

the

night,
Aldrich,

Public

Affairs

Director

Miller

of Irvington and Roger F. Lan¬
caster, Newark attorney, Sept. 27
were

named

directors

of

to

the

(Continued

the

board

Irvington
on page

of

Trust

38)

-Volume. 170-

THE

Number 4844

COMMERCIAL

This

Rukeyser Sees Gripps Killing British Incentive
British exporters is

on

ment's goal

a

business

more

The

climate.

the

tax

centives"

impedi¬

an

ment

in¬

to

of

crease

British

ex¬

ports.
; "In order to

near

difficult problems which must be

mark the

solved before

approach to sound money values.
Of course, if labor continues to
concentrate its efforts 'upon the
dollar rather than upon the pur¬
chasing power of the dollar by
demanding
inflationary
wages

period

cater

dem-

to

o.goguery,"

British

Mr.

of the window

Rukeyser,

state

d,: "Sir

make
do

motivation, namely the
of

rewards

cialists

we

can

find that we

lems

arise

of

out

benefits

other

and

adjustment has not
course."

then
as

the.

yet

run

Tobey & Kirk Admit
Gordon & Gocdney
The

Wall

52

Street,

Exchange
Exchange,

as

futile

a

others

and

and

is

New

errant economic nonsense

jective

by

taxation

too

executives in

the state and industry,

influence

to

who want

and

George D. Gordon.

inspirit, them
with rewards. But Sir Stafford,
who through devaluation gave the
British workingman a concealed
wage cut, doesn't want, the union
leaders to chide, him for letting
stated

goal,

can

exporters increase

by helping to end

with

remarks,
Rukeyser contended that:
"Sir ; Stafford
irrational

falfa. After four days of

pro¬

the

posal, which steps up the punitive
business profit tax from up to as
much as 65% of profits, defeats
the

British need

farmer who

of the

that

ar¬

gued that if he put green tinted
spectacles on his cow she would
eat straw as beneficially as al¬

Mr.

his

Continuing

STATEMENT OF- CONDITION, SEPTEMBER 30, 1949

office in

like

v

f

they inherited when they
1945. This alibi is

which

before

com¬

cow

Cash and Due from Banks

y;;,v>-'■#

.,

U. S. Government

i

State and

•

the

following

Atlantic

can't

very

it.

permit

to

factors

•

way.

view

of

head

to

a

check

You

f

,

f

area

in

;

Acceptance Liability

-V

an

ment;

•

'

;;

in

decreased

a

farming

the

Other

credit

business

or

business

the farm and
general ;are reason¬

in

-

torious loans

national

y;

and »■

international

we.

"i
i,

must be fac-

tua.l and;realize that when; the
number, nf employed are consid.

.

.

.

7,950,000.00

.

?y

.

•

.

•

$4,106,109,735.30

.

.

.•

.

.

.....

Contingencies

.

'

.

-

17,035,840.10

' 20,059,402.39

<•

Surplus.

.

..

.

•

$111,000,000.00

.

. ;

.

■

'

■' ;-:v

Capital Stock..
-

.

17,153,798.11

...

•' 1,999,207.85

.

.2,960,000.00
11,145,235.20

.

i.

154,000,000.00

,

- - •

•

v.«The business

of unemployed,

:
■

Taxes, Interest,"etc.

Capital Funds:

eagerly sought.

are

; "There is also the fact that both
our

industry, and every effor^ should
be made to reduce the number

-

.

LIABILITIES

y;.y

Liabilities; '. "

Reserve for

ably free of debt. You do not face
credit stringency for the con¬
sumer or for business when meri¬

lion unemployed is a challenge to

-

.

16,141,151.57

.

4,889,642.90

Less Amount in Portfolio

a

•

„

.

Acceptances Outstanding $, 19,035,047.95

crisis

Undivided Profits

to be

r

.

Payable November 1,1949

Reserve for

going

readjustment was needs are so far from being satis^
expected," he declared. "We fied that it. will take tremendQus
and
distribution to
would be in more serious diffi¬ production
culty in the years ahead if it had replenish barren stocks and ward¬
r ^
' I^
not- taken place. While' Live mil- robes,

*

Dividend

when the consumer,

the

readjust-

^W;';-

,

for

plan

volume

when the farmers are

dividual

upward movement in industry

to. first suffer from the;
•

.

.

29,756,291.03

Deposits.-.

nevertheless very
profitable. You can't have an in¬

upturn; the maintenance of, high
construction .volume, the stabilization of stocks and bonds, and

v:, K

28,203,359.23

attractive.

are

time levels, are

and

on

are

13,263,185.07

...

i,507,112,606.87

experience a general level of
prices which, though not at war¬

that the

ence

.

.

Other Assets

to

some, evi-

industries,

consumer

don't

business

durable

tries
Heimann

H.

values

believes

-

goods•indusHenry

.

/

Banking Houses

$100 billion dollars, some of which
he will expend the moment he

the

the decline in
the

'.V,

•

tail-

into

the

wide
credit organi¬
zation pointed
nation,

go

.

spin when the consumer has over

support

this

well

of

,

...

.

,

its

on

In

.

.

You

a

.

Stock of Federal Reserve Bank

H. Hei¬
Association of Credit Men,
in the past few weeks to believe

able

well

is

war

1,317,800,673.14

Customers'

injudicious labor leadership ; to
plunge us into a serious depres¬
sion. There are too many .favor¬

readjust¬
ment
period

y.

Mortgages

Executive Manager of the National

said there have been many reasons
that the firsts

103,278,968.84
:i26,070,281.37,

Accrued Interest Receivable.

Henry H. Heimann, Executive Manager of National Association, of j
Credit Men, tells Middle Atlantic Wholesalers these are only j
unfavorable factors against business uptrend.

mann,

1,760,469,739.38

.

Loans, Discounts and Bankers' Acceptances

Depression Can Come Only From
Blundering and Bad Labor Tactics

Talking to delegates to the convention of the Middle
Wholesalers Association in Atlantic City on Sept. 27, Henry

Obligations

Municipal Securities

Other Securities

Holds Serious
Government

11,099,289,314.34

.

.

died

could complete the. ex¬

we

periment."'

to acquire more

the

bad

'Too

RESOURCES;

such diet,

farmer

The

died.

cow

mented:

CITY OF NEW YORK

OF THE

-

nothing to do

economic crisis,

current

the

took

Britain's eco¬

crisis.

Socialists have

the

their earnings

nomic

NATIONAt BANK

fruits;, of venturesomeness
and
the expenditure of human effort.
"But the propagandists of the
British
Labor Party argue that

to achieve a

people

absorbing
through
large ,a ratio of the

.

^red,: the ratio;©! unemployed .is
smsdji
also ;h£^eningf to

•^nOte

being

unemployment;;is

ecked.•

>"

■r- *

•*

*
"*'
de^t of

'* *

would take a great

■

"

government blundering:and




much

~

executives realize th^t

"Credit

business in the year ahead
much
at

present

are

collect and

more

failures

•

332,648,595.77;

;':--;;:;y;y!>,:$4,507,112,606.87

will be

difficult to
are

67,648,595.77

■:;'/■:

competitive. Accounts

more

.

increas¬

United States Government
secure

and other securities carried at $322,415,992.00 are pledged to.

public and trust deposits and for other purposes as required or

The outlook- of credit exec¬
utives can be
characterized by
ing.

•

the statement that they
a

,

return

time

to

anticipate

normal peace¬
with a greater

more

conditions

competition than that which they
had to face during the war yejrs.

:;r

"

City,
Stock

Curb

Oth$r

O'Keefe, William A. Brindley

C.

costs,

CHASE

THE

harder

work

to

efficiently. Then. they
turn around and defeat their ob¬

York

announced.

al¬

more

York

New

partners in the firm are. Thomas

inflationary factors

labor

S.
as

members of the New York

in transportation, excise taxes on

high

Robert

Goodney

general partners in Tobey & Kirk,

.

transportation,

of

Gordon and Benjamin

its

.,...

fruit ..because

admissions

re¬

"Presently,"
Mr.
Hermann
pointed out, "the dark spot in the
agricultural situation is in the
fruit farming belt. Farmers are
unable" to market their crops of

the., confusion

exhorting businessmen, work¬

ers

looks the fact that

•

-I.

sys¬

and

of

pay¬

realistic

incentives.

and

introduce

and emotional economics. It over¬

;

parity

ternative the cheer leader method

resents

v.

given

ments."

out

perately needs exports. This rep¬

-

production; Fruit farm¬
not

mainstring to hu¬

foreign trade advantages opened
up by. devaluation of the pound,
despite the fact that England des¬

>

unprofitable fepr
beyond a limited

Backing away from the profit
motive, the visonary British So¬

that, enterprising, men
profit from exploiting the

sure

not

throws

Party

tem

to :

s

Labor

man

Merryle S. Rukeyser

Stafford
want

of

employees.
rejecting the profit idea, the

"In

a

17

.

We can't continue
much longer diverting one-fourth
to one-third of our production to

of labor

beginning of

it

made

them to market

are

range

expenditures.

hours

values.
step in this

ers

longer

dollars, but it may have been a
propagandists necessity in vi^w
of the widely circulated Marxian, the
purpose of government. Sec¬
j fallacy about class warfare be¬ ondly, we must; plan now to try
tween
capital
and
labor.
The. and develop normal markets, to
truth, which the Socialists con-, replace
the
artificial
markets
ceal, is that, instead of being in presently suporting business ac¬
conflict
with
the
wbrkers, the tivities. Third, the world must
British exporters, if they succeed
recognize the need of a sound
in augmenting foreign sales, will
act as the star salesman of the money. Most of the world's prob¬

and

a

area

V-

on

have

monetary

influence will depend upon many
other
factors,
devaluation does

the

Merryle Stanley Rukeyser, financial writer and economic com¬ are in a safe trend towards the
for International News Service, in an address at Denison restoration of a normal
economy.
University, Granville, Ohio, on Sept'. 29, sharply criticized the action First,
there
must
be
greater
taken by Sir Stafford Cripps, British Chancellor of the Exchequer, concern
about
our v government

profits,; - calli n g
it
"a
blueprint for
destroying in¬

in

devaluation, is

of time, there are, of course, many

frustrating Labor Govern¬

for increased exports.

increasing

(1365)

directipn and though its favorable

"Over

mentator

in

chaos

and

nearly normal

they believe will provide

healthier and

Economic commentator for International News Service points out
increase of tax

CHRONICLE

FINANCIAL

&

Aiapiier Faecal Deposit lnsurance Corporation

permitted by law.

-

>

18

(1366)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE,

Thursday, October 6, 1949

Leone & Pollack Are

Bank and Insurance Stocks

Opening in New York
George V. Leone and Harold J.

By H. E. JOHNSON

Pollack

are forming the partner¬
ship of Leone & Pollack with of-

Texas & Pacific
One of the smaller roads that has been
itself this year
souri

is Texas & Pacific.

a

companies^, calls attention,
this

Pacific

through ownership of all of the 237,030 shares of
preferred stock outstanding and close to 60% of the 387,550 shares
of common.
Naturally with the small number of shares outstanding

payments
On

had

A

very

a substantial bulge in the company's business in the
In large measure this traffic was subsequently
pipe lines, only to be recaptured during the war years
when the heavy demand for petroleum products taxed to the utmost
all existing transportation facilities.
In 1947 and 1948, the company
also benefited from extraordinary crude oil movement, but new
pipe line construction has since taken up this traffic.
Of greater
long-term significance, the company has received a large volume
of fruit and vegetable traffic as a result of the expansion in agri¬

its

service

\

in

and

area

''

■

-

George V. Leone

fices at 40

v,

<

The

Harold

J.

Pollack

firm will act
and brokers in public

3647.

Both

Frank

C.

20

over

were

in

Pollack

<

its transportation costs.

over

there

was

and for

cut

a

of

more

For the eight months

than

August alone the cut

Tax accruals

of; equipment

down

were

was

a

was

point* in

through August
transportation ratio

the

wider.

even

substantially and the net debit for hire

reduced almost $1 million.

As

result, the decline
fiet income was held to, $987,549 from $4,260,884 in 1948 to $3,273,335
in the current interim. .After
deducting preferred dividend require¬
ments, common share earnings amounted to $6.41 for the
eight months
a

of

1949

compared with $8.96
maintenance expenditures,

a

year

earlier.

particularly

curtailed

in

then, could

the

closing months
close

come

to

$12

a

of

It

and structures

way

the

Full year's

year.

share,

three

or

likely that

appears

times

will

be

earnings,

the

current

dividend rate.

Powell

resigned as Director and
Vice-President of Pio¬

his

e r s

his

open

led

With

Powell

George

B.

Powell

funds and
has

had

twelve years of experience in the
and is well qualified in this

field

investments.

He

says

that the public is more than

ever

from the speculative

field of investments and

more

in¬

building through
funds plus insurance where they
"and in
mand

tries

Los Angeles Exch.
LOS

ANGELES, CALIF.

—Ed¬

Harbach, partner in the
brokerage firm of Hopkins, Har¬
bach & Co., will head the observ¬
committee for

the

niversary celebration

50th

of

an¬

the

Los

Angeles Stock Erchange, Nov. 15
through Dec. 15. according to W.
G. Paul, Exchange President.
The

Exchange's actual anniver¬

sary date is Dec. 7—Pearl Harbor

Day.
In

accepting the appointment
Harbach said, "although the theme
of the observance
orate

'50

years

brokerage
California

will

of

is

commem¬

progress,'

industry

of

era

its
op¬

He pointed out that California
has gained 40% of the
nation's
new population since
1940, nearly
half of which has settled in
and
around Los Angeles
county.

"We

are

industry to

now

-

hundreds

citizens
new

in the greater Los

indus¬

from

'

of

else¬

opportunities

Angeles

com¬

munity."*
Harbach

graduated

from

Har¬

vard

Military School in 1921 and
University of California at
Berkeley in 1925. He entered the

the

securities

field

1928 became

a

in

1926,

and

in

member of the Los

Angeles Stock Exchange.
Long active in civic and wel¬
fare affairs

locally, Harbach

was

general fund
campaign Chairman
for Los Angeles
Chapter *of the
Red Cross in 1948, and is a mem¬
ber of the Better
Business Bureau
and the Los
Angeles Chamber

of

Commerce.

-

»

■

the

.

that lies

just ahead—and era ripe with
portunity for us all."

.

attract
of

the de¬

new

developing

the

support this astound¬

ing population growth," he
said,




better

assured

than

haying

industries
than

well

as

many

as

obtain

S. Wells

are

now

Alstyne, Noel

Street, members
Stock*

Exchange

& Co., 52 Wall

of the New York

in

the

tional

department, it is

Both

were

institu¬

announced.

formerly partners

Charles H. Drew &
Co*.

in

-

•/

•

in

capital funds arising from the great

on

prices following the
expansion in the

sharp

a

insurance

war

volume

of

within

a

number of

companies raised additional capital

shareholders

to

purchase

stock.

more

Others

most

important
however, was the

:

*

as

,

a

native of Norfolk and Nansemond

underwriting gaihs.

conditions

a

continue

record

dividend increases
of

the

are
likely over the next few months.
cbmpanies which will meet for dividend action

the

next

two

months

are

.

■

listed

below

.

Current
Annual Div.

Rate

Agricultural

Fireman's
Glens

Insurance

together with

Invest-

Per-

Approximate

ment

centage

Income

Paid Out

$3.00

$5.21

0.50

Next Div.

Meeting

North

River Insurance.—.
Phoenix Insurance

19

1.72

29.1

Oct.

10

2.50

80.0

1.30

Falls

Great American

Nov.

2.00

(Newark)

57.6%

2.43

53.5

Dec.

3

Dec.

;

2

8

1.54

77.9

Nov.

4.97

60.4

Nov. 30

2.25

4.40

51.1

Oct.

17-

Security Insurance
Springfield Fire & Marine

1.40

2.45

57.1

Oct.

7

1.90

2.55

74.5

U. S. Fire

/

1.20
3.00

St. Paul Fire & Marine

Nov. 24

2.40

3.43

70.0

Oct.

,

County and well known among
the business circles of Tidewater
He

is

a

class

graduate
of

1923

of

with

B.S. degree in Business Admini¬

NEW

ORLEANS,

LA.

—

The

13"

Helen G.
Slane, of the Milbank
Fund, is Secretary.

Wall Street Riders

New directors elected

Elect New Officers
Miss

Now W. D. Kingston & Co.

other

1948

■
.

Lt. Comdr.

Norfolk, Virginia office. He is

to very favorable

pertinent information.

management
investments.

the

com¬

business

is

Considering the recent action of various companies in declaring
dividends, other institutions may do likewise. In any event

of

Alslyne, Noel t Co.
Sheldon
associated with

<

_■

stock

the

in

to be

it is not believed
likely that a disbursement of between 75% and
80% of investment income will be made
immediately, over a period
of years it could be attained.

USN,, World War II, and
prior to that he was with the In¬
vestors Syndicate of Minneapolis,
Minn., as District Manager of the

a

Philip A. Knight and

shares

investment

funds

Some

Mr. Powell served
in

of

year of fire insurance earnings is in
prospect.
Under these conditions, it seems reasonable
to expect that over
a
period of time a gradual restoration of a historical
relationship
between investment income and
dividend payments will be made.
In order for this to be
accomplished a general increase in divi¬
dend payments of between
25% and 30% would have to occur. While

better

can

stration.

Van
Van

as

favorable

income and protect

diversification
well

;

In many cases the results
for the first six months of the current
year
were the
best on record. As the fundamental

the many management
companies he represents in New
York, Boston and Philadelphia.
He will be able to give his clients
as

capital is

Within the past
year, however, premium volume has been level¬
ing off and the capital position of the various companies has been
improved. At the same time, the large
underwriting losses of 1946

through

a

larger number

by public sale of securities. The
of additional capital for most
companies,

numerous

one

average

security and
income. By
in

diversified

the purchasing power of the dol¬
lar.
This can
be accomplished

V.P.I,

KnigU, Wells With

average

companies

many

of

dollar

a

Virginia.

Southern

rededicating

energies to the great

will

great

where to seek

L.

ance

more years

those

thousands

Anniversary Committee
win

few

a

of

•

be

As it

and ,1947 have been
converted

in investment company
insured
savings.
He

can

in

1

Another deterrent to larger cash
payments was the unfavorable
statutory underwriting results experienced.
Many companies had
sizable losses in this division of the
business.

will specialize

away

of

retention of earnings.

million

getting

increase

experienced

source

and

of

the

by issuing rights to

dollars of

phase

i';

....

level

was the pressure
increases in premium volume.

obtained

Virginia
with nearly

Mr.

increase

position.

West

two

the

on

•'

.

the

Because of this

other

a

the

necessary to maintain a certain relationship be¬
tween capital and premium
writings many companies found them¬
selves limited in the amount of
additional business they could handle
because of their capital

offices in Vir-

gin i

past

tant of these

panies

lead-

all

'

;

the

available.

last
the Nor¬
Office

folk

If

would be paid.

There have been several factors which have
prevented a larger
distribution of earnings
during recent years. One of the most impor¬

h i p

year

$3,600,000.

•

Resident

der

to

income was the primary
determinant of dividend payments. For the
past several years only
about 60% of / such income has been
distributed to shareholders.
Historically, it has been normal for companies to
pay out between
75%-80% of investment
income^ using the balance and any under¬
writing earnings to augment capital funds and provide for the normal
growth of the business.
!

George B.

—

terested in estate

Harback to Head

such

.

^

In

1

produ ction.

iri;

to

prospective

earnings.

George B. Powell
Opens Own Office

.

Earnings on the stock last year amounted to $15.06 a share.
With the loss of the
extraordinary 1947-1948 petroleum traffic and
the decline in business
generally, revenue§*ihis year have been run¬
ning quite substantially below the level of a year ago.
Moreover,
maintenance outlays have been kept at a
high level.
On the favor¬
able side, the management has been able
to exercise strict control

subject

A

*

.

to

number of other fire
companies have increased their dividend
payments during the past year. \
Nevertheless, present disbursement
for practically all are still low in relation
to present and

spe¬

mortgage' company securities.

neer
ings reached $20.18 a share.
In the poorest year,
Enterprises, Inc. to
1939, there were
own
office as
no earnings for the junior
equity, the company having failed by a
broker-dealer
slight margin to cover the preferred dividend requirement. ' It is
at Room 102,
pertinent to note, however, that in the meantime fixed charges have
105
been reduced by more than a million dollars to an
Brooke
indicated level of
under $2,900,000.
Un¬
This reduction was accomplished despite the fact Avenue.

company was hampered by the non-callable feature of its
long-term first mortgage bonds.

earlier

.

stock dividend of 20%

a

likely to be maintained
outstanding.*

securities
in real estate and

NORFOLK, VA.

that the

declared

was

In each of these cases the
present annual cash dividend payments

are

industrial

and Mr. Leone

this enviable record.
Over the past ten years earnings on the common have
averaged
a share.
In the best year of that period, 1942, the earn¬

utility, in¬

formerly with
& Co., for

Mr.

years,

cializing

result of this favorable operating
status, the road was one of the
minority in the industry that was able to cover its fixed charges in
full and report net earnings in every year of the
depression decade.
There is nothing in the picture that would be calculated to alter

close to $10

voted

$16,000,000.

of

capital from $2,400,000
approved

dealers

as

Masterson

■

balance, the company's long-term traffic trend, even with
of petroleum traffic, has compared favorably with
that of the industry and with that of other roads
operating in the
same
general territory.
Also, and particularly important to the
investor, the company has always been an efficient operation. As a

dividend

a proposed
merger of its three subsidiaries into the
parent company.
At the same time shareholders will
vote on a proposed increase in

en¬

dustrial, railroad and real estate
securities. Teletype will be NY 1-

diversion

:

Exchange Place, to

new

On

the

stock

Another of the major groups, Fire Association of Philadelphia
has called a special
meeting of stockholders for Nov. 17 to vote on

in the investment business.

gage

territory served by connecting

-

an

,

brought about

in

on

33%%
approval by stockholders.

lost to the

culture

Company of North

Stockholders of Hartford Fire Insurance on
Sept. 22
increase the capital of the
company from $12,000,000 to

middle and late 1920s.

carriers.

•

Insurance

amount to

favorable long-term earnings record.
Traffic-wise, there have been particularly wide fluctuations in the
company's fortunes back over the years. Important oil discoveries
a

vote

the

of

additional share for each five shares held. This
would, in other words,
a stock dividend of
20%.

appeal for potential appreciation and for yield.
In
dividends have been paid at the rate of $4 per annum
and this rate is well protected by earnings.
has

stockholders

at that

considerable

road

25

will

again, to the favorable position of
of possible increases in dividend

once

standpoint

the next several months.

over

Nov.

the

increase in the authorized
capital stock
$15,000,000 to $30,000,000. If the increase in capital is
approved,
lime, directors will declare a stock dividend in the ratio of one

from

recent years

The

from

group

America

with the public, the stock is pretty inactive and seldom attracts any
widespread speculative interest. Nevertheless, at recent price levels
in the low 40s the stock, in the opinion of many rail analysts, has

3

This Week—Insurance Stocks

w

t- •

Recent changes in dividend policies of three
major fire insurance

good account of
The road is controlled by Mis¬

giving

Adele

Marie

R.
Cambridge of
Union Securities Corp. was elected
President of the Wall Street Rid¬

were

Miss

Lotz, of J. & W. Seligman,

and Albert

Lawrence, of the

Ma¬

rine Midland Trust Co.
On Friday, Oct.

7, the club will

ing Club at the club's annual begin its 15th consecutive ride
Kingston
season
at the Split Rock
Riding
has been changed to W. D. King¬ meeting for election of officers,
held on Sept. 30.
Re-elected to Academy in Pelham Manor, New
ston & Co.
Walter D. Kingston,
the offices of Vice-President and York, where formation rides will
member of
firm name of Lamar and

the New Orleans Stock

Exchange, is sole proprietor of the
tirm Which is located in the Cana

Building.

Treasurer were, respectively, Mrs.

Mildred
Reuss

Butler, of McLaughlin,
&
Co., and
Francis
X.

Hoart, of Moore & Schley.

Miss

be held every

Miss

Friday at 9

Cambridge

p.m.

announced

active fall and winter season
rides and social activities.

an

of

Volume 170

THE

Number 4844

COMMERCIAL

FINANCIAL

&

CHRONICLE

loan

World Bank Grants

Sept.

within

up

where

on

there is

their

new

for

the

such thing as
first time have

for

one

reason

no

another become dissatisfied.

or

29

granted

the reclamation

of lands

The loan is for

advice and assistance.
One

PHILADELPHIA,
Lowber

announce

addition

this

to

new

jungle

Stokes

man

with

today by Eugene R. Black, Presi¬

Grooms

dent,

with

bullying

anyone

securities.'

The

investor and

does not

mean

accepting any preconceived ideas regarding
understanding and cooperation between the
or broker is too often hidden behind a fog

into

to

road

his

This

IT.

LIKE

After being previously approved

is

ment,

allocated

reserve

fund.

ments,

to

calculated

the

special

its

Amortization pay¬

Loan

Agreement

behalf

on

Bank

tional

of

Chester

Interna¬

the

in

firm

Messrs.

signed

was

the

its

trading de¬

partment.

Reconstruction

for

the admission of S. Grey

general partners.

as

with the Bank's Articles of Agree¬

HIM

MAKING

Hackman,

C.

Wurts

S.

Dayton

the part of both the investor and
out a course of
action for your client you must first impress upon him that it is just
as important for him to understand why certain securities are good
for him and some are not. It is only once in a while that you will
hear of someone telling his architect how to build his house, or his
doctor how to cut out his appendix, or his lawyer how to draw up
clarity

on

the firm with whom he deals.

&

delphia, the former

Co.,
as

a

his

doesn't

retire

to

and

the

Development; and by Vijaya

partner.

how to

orders

a

for

and the

fellow

the

invest

dealer is

his

own

bird.

rare

who

than

money

think

any

he

stock

knows

broker

more

or

THE NATIONAL CITY BANK OF NEW YORK

about

Head

securities

Office: 55 Wall Street, New York

Too often, the salesman in this business takes

securities

reason

that

he

that he does

knows

are

not

suitable

for his

client

Condensed Statement

is that his customer is in the driver's

so

oj Condition

as

of September 30, 1949

Including Domestic and Foreign Branches

seat and he is the order taker.

It is not always

tomer,

possible to control every situation or every cus¬
Everyone knows a certain number of people who will act

(IN

like cantankerous everyday human beings no matter what he is sell¬

ASSETS

ing.

No matter how tactful, forceful or inspiring you may be there
when you must take orders instead of give them.
But
when you have an opportunity to open up and show your customer
how important it is to HIM that he has a plan and a definite objec¬
times

are

tive in

Cash, Gold
(Direct

operations by all means go to it. The cus¬
plan, and no one that is helping him to work that
plan, is the customer that shops around. He is never satisfied with
his broker. He doesn't know what he is doing or why he is doing it,
so
when a particular security proves unsatisfactory he looks for
someone

only the type of investment that will

are

A

WHOLE

AND
AND

THEIR

PARTICULAR '■ INDIVIDUAL

OWN

Stock

and

have

constructed

an

.

Investing

a

,

1,853,265,018

Liability

ances and

,

.

i

,

.

,

,

,

93,043,867

.

able to get the facts.

ment

dealer

been

and

.

.

,

information which he

Total

.

.

a

investment situation, let

program

develop

as

we

go

us

out

is

to

.

14,565,300

in

Transit

.

650,435

7,692,524

.

.Branches

with

,7,309,396

for:

Expenses,
Dividend

V

,

,

.

,

.

,

,

7,000,000

etc.
*

.

•

2,325,000

....

$124,000,000

Surplus

....

126,000,000

Undivided Profits

3,328,979
.

26,415,010

-s"'

,

Capital

27,108,201

,

•

.

.

.

.

>

,

.

.

Interest, Taxes, Other Accrued

7,500,000

,

International

Other

and

Total

$4,897,643,284

Figures of Foreign Branches

.

,

.

.

of September 25,; 1949.

are as

296,570,600

46,570,600

,

1

* '!

$4,897,643,284

*-:■ ft-

Upon sound information

$14,7i9,5C0 of ether assets dfe deposited
secure $247,603,951 of Public and Trust Deposits and for other purposes requii ed or permitted by law.
federal deposit insurance

corporation)

wise investor who goes to

plan

a program

along." The only

way

good job of investing is to know what he needs.
find

16,606,559

9,518,"84

1325,353,'085 of United States Government Obligation's and

his investment dealer and says, "Let us sit down together and talk
over my

Portfolio

Foreign Central Banks

Reserves

15,489,125

,

(member

It is

$4,526,158,895

•

Unearned Income

.

,

to

command today.

can

;

Items

,

OrHF.R Assets

job for amateurs—but the task

.

.

$26,125,343

.

Unearned Discount
*

/

Banking Corporation

bring before his clients the vast fund of

good investment judgment rests.

to

.

1,346,355,859

Securities

for

Never before has the conscientious invest¬

able to

Due

326,714,715

,

.

^

.

is less complicated than at any time in our history because
today we
are

Bills.

ances in

22,606,487

".

Accept¬

Less: Own Accept-

»

of

v.
on

(In Foreign Currencies)
.

...

Bank Premises

edifice for every one of your cus¬

today is not

money

Deposits

'

tomers that will stand up and prove satisfactory to them.
,

$1,194,580,598

,

.

Federal Reserve Bank

in

Ownership

RE¬

QUIREMENTS AS INVESTORS, then you have eliminated shopping
around

.

Discounts

and

Acceptances

SITUATION IN THE NATION AS

FINANCIAL

.

,

Customers' Liability

stocks, or speculations and that the percentages which
represented by each group are geared to the PREVAILING
common

ECONOMIC

.

Real Estate Loans

of their funds invested in high grade bonds and preferred stocks, or

LIABILITIES

.

Municipal'Securities

and

Loans

'

:

Other Federal

Other Securities

up in price and increase the income that he receives from
But if your customers realize that they have a certain percentage

good

of

Agencies

State

always go
it.

:

Banks

from

OMITTED)

DOLLARS only—cents

Fully Guaranteed)

or

Obligations

no

else who will sell him

Due

and

U. S. Government Obligations

his investment

tomer who has

Chairman

and watch that

anyone

The

can

do

Chairman

of the Board

Wm. Gage Brady, Jr.

of the Executive Committee

W. Randolph Burgess

President

,

Howard C. Sheperd '

•

a

best way to

bring all the facts into the daylight and start from

there.

CITY BANK FARMERS TRUST COMPANY

Europe's Problem

Head

"Europe's problem is a fundamental one which
can
actually be solved only by a complete change
"Europe's population and scale of living both
adjusted over a period of many years to the
growing overseas wealth of its nations. Europe

(IN

were

had the internal

Cash

from adventurous

Obligations

resources to

resources over a

(Direct

Agencies

long period of

State

.$ 14,303,795

,

of

,

enormous

portions of that inherited wealth

were

lost

Loans

spent in two world wars, and other portions
a

./■>'

.

.

indepen¬
why the teeming
millions of Europe can no longer live within their
joint income."—Owen J. Roberts, formerly U. S.
Supreme Court Justice.

dence in colonial

areas.

Advances

and

.

.

.

.

and

Stock

in

,

.

8,126,215

Other Assets

Total

„

.

,

justice




1,079,215

«

.

Capital ,111

•

.

.

'

„

3,076,834

\7

$10,000,000

.

.,

:

.

-

Surplus

10,000,000
..

-i

*

■

Undivided Profits

$118,190,283

•

.

,

.

.

.

.

.$ 85,125,189

.

,

:

aaa

2*306*321

.

.

(;v"
.

.

.

,

1,081,390
2 949 193

of United States Government

.

Total

Obligations

9,588,260

.

\

.

$2,313,334 of Public Deposits and for other purposes

means

by "a complete change in world relations," but we
are quite clear in our own minds that this
situation,
which only in part is accurately described by the
justice, can not be cured in the absence of a vast
increase in European productiveness. • V
^y-A 7
•

.

,

.........

.

.

.

207,943

........

$7,810,373

We do not know what the learned

...

Securities

Federal Reserve Bank

Bank Premises

.

1,043,871

/aa

That is

.

. v,

86,492,340

,

.......

Real Estate Loans

result of the movement for

,

Other Federal

....

Municipal Securities

and

.

■

were

as

LIABILITIES
.

Deposits

Reserves

.

Fully Guaranteed)

or

Other Securities

"But

Banks

from

U. S. Government Obligations

explorers and businessmen who

those

and

September 30. 1949

OMITTED)

DOLLARS ONLY—CENTS

'ASSETS;.
Due

support all its
people in the style of before and after World War I.
It depended on the external resources inherited
had built up
time.

Office: 22 William Street, New York

Condensed Statement oj Condition as oj

,

in world economic relations.

never

Phila¬

limited
f

Before you can map

But

and

formerly associated

were

dealer

of indecision and lack of

will.

Edw.

Locust

M/Grooms has become associated

already in progress.

by the Bank's Executive Directors,

and

—

1708

Dayton, Jr., and Elmer E. Hack-

it this way, "This business is nothing years and carries an interest rate
keeping people satisfied and happy. In a way he was of 2M>%, plus commission at the
right, but we would go farther. The building of a substantial clien¬
rate of 1%, which, in accordance
tele in the securities business begins with understanding what your
needs

PA.

Co.,

phia-Baltimore Stock Exchanges,

at

loan to finance this project are

a

seven

securities dealer put

customer

!■

Street, members of the Philadel¬

Bokaro, in the Damodar
River Valley, and negotiations for

than

more

y
>

Admits New Partners

ect

kans grass,

term of

a

—MB——1

1

loan,
the World Bank has completed
technical investigations of an
electric power development proj¬

In

infested

of

1

Edw. Lowber Stokes

On

struction and development of the
Indian Railways.

million to India for the

existing situation in the
with a weed known as
securities business. In matters of health, the law, or finance people
and for the
clearing
shop around. It is because these vital affairs loom so large in every¬
lands.
one's life that it is only natural for all of us to seek the best possible
the legal profession and it is certainly the

period of six weeks.

a

18, 1949, the Bank made a
loan of $34 million for the recon¬

loan

a

behalf of India.

on

111

Aug.

of $10
improve¬
ment of agricultural production.
The proceeds of the loan will be
used to finance part of the cost of
This is often tnxe of agricultural machinery needed for

who have checked
patients or clients come from, claim that
a "new account." People who go to a doctor
usually been to several other doctors and

Pandit, Ambassador for

India,

by the International Bank to India

The International Bank for Re¬

Professional men, such as doctors and lawyers,

19

Lakshmi

on

This is the second loan granted

construction and Development on

By JOHN BUTTON

maturity, will start

June 1, 1952.

Another Loan to India

Securities Salesman's Corner

by

(1367)

29,988,260

*
•

•

are

required

•

*

.

.$118,190,283

deposited to m-ure
or permitted by law.

(member federal deposit insurance corporation)

Chairman

President

of the Board
•

jW. Randolph,.Burgess
„
__

,,i.

a
tt

)

-jt.

.

11

i»;

..h:„

»

<n

.v

.

.

..

'•

~

^

Lindsay Bradford

COMMERCIAL

THE

.(1368)

20

Monetary-

The International

Fund, 'organized under English
leadership and inspiration, set a

now

six shillings

the Englishman

will

eight shillings. De¬
will encourage British

cost

which valuation
in the exports, will strengthen the com¬
tnidst of war. For five years the petitive position of English prod¬
ucts in world markets. It will dis¬
English Government has been in¬
scale,of

values

currency

prevailed

1944

July,

in

that a $2.80 pound was
worth
$4.03. That
government
tried to maintain a rigged world
market for sterling under which
sisting

the importation of Amer¬
ican goods and weaken the com¬

courage

possibly, right into your own
business. I urge you to keep this

official rate. However,
constant leaks. The

the

there

were

its

sterling area continued to lose

gold and dollar reserves in spite
lend-lease a
$3,750 million
American and a $1,250 million
Canadian ^'loan"
in
1946, and
Marshall Plan aid of $1,239 mil¬
lion in 1948 and $962 million in
1949. It was the imminent exhaus¬
tion
of
sterling
area
reserves
which caused the SOS from Lon¬
don

early

the

in

problem

The

goods. This is a

cial

producers who have so far
been able to ignore English com¬

petition in this country.
matter Americans

this

In

ish

to

goods,

does

that, devaluation will have
failed.
Only by permitting the

legerdemain. Another major
transfusion could only be

English to sell to us, only by per¬
mitting them to take some of our
foreign customers away from us,

plore

simple cure.
One of the required steps, long

be

a

recognized by all but the leaders
of the English Labor Party, was
a
correction of the sterling-dol¬
lar fatio. This was finally under¬
stood
and
admitted by Cripps.
The action of the 18th, devaluing
the pound,
this need.

will it do?

will

It

While

can

ing

a

them..

be

of all

priced at 500 sterling before
l8th cost the American $2,000.
Now it vyill cost less than $1,500.
On the other hand, a pound of
was

Because

in

the

all of

terms, this event warns

in

careful

to

be

in

the

future

than

in

the

past.

'

long

invest¬

such

make

more

we

us

risks

our

have been

'

\

help but hurt
The

level

be

than

would

otherwise

possible.

have

in

hurt

us, we

cannot

,

fully

are

aware

only

one

year

and

in
only one
in the last two decades

—and then would demand in turn

give

we

you

what you want.

little wrong with
with railroad
service, that couldn't be remedied
There are other, and often un¬
by a fair feturn, and by the im¬
appreciated, advantages to you in provements in equipment, service
seeing that the railroads are per¬ and
personnel that a fair return
mitted a fair rate of return. The
todulH inake possible. The attrac¬
late Leonard P. Ayres, a native
tive part is that this return'coulc
For there is very

the

Englander who become

one

leading economists,
fond of refferring to the rail¬

roads

try."

"America's

as

I

said 20%,

5%!

expense

ally

purchased

and

of

20%

our

ment

consumed

fuel

timber,, and of
output. Thus our

oil

chases, and
as

well, have

upon

the

economy,

of

our

tor

ar.d of

business.

help

us,

a

the

large
of

our

pur¬

rate

your

Thus, the
more

we

more

help




in the

after

increases, in

amuse¬

we

<

"crack

a

period when
climb¬

of

Drifting

You

I

way

local freights,

cars, on

our

also; have improved our

we

carload service through the elim¬
ination of many

of the time-tak¬
ing operations ; of way-freight
trains.
; :
:
; /
.

This

truck

LCL

tri-state

new

6%

or

more

at

least

cn

• •

with

better one which will

a

times with

legal loads—are leased from pri¬
vate trucking firms and
are^nd^r
our
control and direction at all

of this
vividly
service standpoint,
the only sound method 'of oper¬
ating a coordinated service is un¬
der one management and control.:

times.- The

great

success

demonstrates

these

Using

to*the'-*south.

facilities, we have proceeded so
rapidly with Dieselization during
the l&st" two" years that approxi¬

Dieselized.

is

which

streamliners

completed in June at

were

have

that

interest

.

.

roads

ern

points.

Massachusetts. Our

equipment
serving
cities

the

on

passenger

in 12 trains
and other key

Boston

consists

and

new

now runs

Boston
of

54

&

Albany*
latest

the

of

type of cars, in addition to other
modern, streamlined cars which
placed in service just before

were

the recent
_

")•'

war.

April

25

New

York

Central's

Freight

of

Service,

this

the

year,

Pacemaker

which

speeds

le'ss-thari-carload merchandise

on

train schedules, has been
linking Boston and other New
England cities with cities in New

passenger

York

State

with

and, by connection
freight trains beyond

fast

Buffalo, with leading cities in
Ohio, Michigan and Indiana. The
New England Pacemaker, which

operates

simultaneously

bound and

eastbound,

they

/<,

regulation.

were

//

,"

As I said before, for

months

the seven
July 31, the rail¬

ended

earned

a

return

on

depre¬

of
only 2.6%; over the entire last
quarter - century, the railroads
ciated

a

return of only 3.6%.

If it is true, as we

often hear, that

competition of trucks, buses,

the

over

in the United
Railroads, therefore, should
the most-regulated indus¬

in

should

United States; "they
be the least-regulated in¬
the

dustry. In particular, it seems un¬
wise to have one so-calied fact¬
level of wages,

establishing the
and another com¬

mission—often

after

finding

has
a

board

much

time

elapsed—passing judgment on
level to offset the added

rate

have

been

told

time

time again that the railroads

and

and
ur¬

to

Buffalo.

pick

made

up

at

Intermediate

and drop off

Worcester,

stops

cars

are

Springfield

,

today,

heed

well

tomorrow's

tomorrow v/ill be¬
all too soon. Let us
advice

immortal

this

Abraham

from

"You

Lincoln:

the responsibility of
by evading it today."

can't escape
tomorrow

instead, cooperate fully in

Let us,

solving this great problem/for the
sake of a better tomorrow for all.

Almon Hutchinson Is

With Cohu & Co., NYC
Almon L. Hutchinson, formerly
with

the

Trading Department of
& Co., Inc., in
Philadelphia, has become associM.

H.

Byllesby

V.

with

ated

Cohu & Co., 1
N

w

City,
bers

.

York

mem-,
of
the ;
York 1

Ex-,

Stock

change. Mr.
Hutch inson ;

his5

began
P h

the '

in

career

iladelphia

office of E. H.
Rollins

Sons,
and
a

s

was
s

o c

Trading

&

Inc.,
later

Almon L. Hutchinson

i ated

the

with

York

Regulation Complicated

Regulation is

a

.

-

Street, :

e

of Buckley

Department

City.

.

,

_

and New

" '

.

long and com¬

/ Applegate Partner

plicated subject, and there is not
time to discuss it tonight. I would

PITTSBURGH, PA.—Arthur F.

how¬

Humphrey, Jr. has been admitted

to

quote Very briefly,

ever,

Coming Crisis in Transportation."
This
is

an

magazine — which certainly
independent source — says

partnership with Arthur : L.
in Geo. G. Applegate
& Co., Commonwealth Building.
Mr. Humphrey was formerly with
to

Applegate

the First Boston Corp.

:»

■

Twentieth

Brothers in Philadelphia

costs.

from. a recent article in
"Fortune" magazine, entitled "The

freight between Boston

for

come

New

try

some

freedoms,

morrow,

logically follows that the railroads
more
competition than any

have

not be

for

personal freedoms, all depend on
it. In the pressure of doing busi¬
ness today,
let us not forget to¬

Wall

like

LCL

business

planes, waterways and pipelines is
actually what keeps the railroads
from earning enough to maintain
their
financial * health,
then it

States.

the

is

something must be done.

time

Century thinking ;and Twentieth
Century statesmanship. To the ex¬
tent that you help us, in the long
run you help yourself. Tomorrow's
rates
and
service,- tomorrow's

investment

property

have earned

west

moves as ;

solid train to provide a new

if

make

answer,, or

step

other

the shackles of over-

other large industry

Also of interest is the fact that

since

improvements
other railroads

which the rail¬

and

.

would

roads

Chicago and other midwestAltogether, the Cen¬
tral has spent approximately $8,000,000 for postwar passenger cars
and
locomotives
now
serving

and

the

and

we

the

would like to make in our-mutual

freed from

$2,000,000

Central

they are only

even so,

of

fraction

a

each, and
which
provide
fast
overnight
service each way between Boston
and
other Massachusetts points,
of

cost

York

New

new

improvements
which: I
been citing are very sub¬

stantial, but

steel

* stainless

These

service

is

ac¬

purpose—and
,-.■;/
.W

this is the

some

answer,

It.

same

.

Whether

Whether

companies,

operation

consecutive

,

truck routes in our Big Four dis¬

•

investment

the

three

quires no regulatory,, protection
against — an industry which is
profiting at less than 6%, If this
expedient is not acceptable, then
somebody had better come up

trict. These trucks—which, unlike
will be operated at all

Anti¬

being gouged by—and hence re¬

entire New York Central ter¬
that, from a
ritory from Buffalo to the east

dnd

...

The public is certainly not

years.

is

those of some trucking

The

Act,

for

for

Into

Government Ownership

you

con¬

substi¬

of

subject

making the restrictive
provisions of those measures ap¬
plicable to the railroads only when
railroad earnings have averaged
trust

night delivery in both directions
Danger

level

you;

fijfed expenses

ing.

national

own

business,

say

all types of expenses were

influence

our

our

they

operate all through the war aric
until
1946
without
any
freight

employment level

state

as

nut." Indeed, it was this fac¬
that enabled the railroads to

our

bituminous

our

meet

we

or

...

coal production, our iron and steel

output,

ratio becomes quite low

after,

This

Is because the railroads tradition¬
around

or

increase in revenues, because our

indus¬

20%

Not

railroads,

be, achieved on a relatively small

of the nation's

but

Qur,

a

you.

approached

other year

of Return

was

follow it day
by day, the rapidity of this process

new

railroads

achieved

that

General Advantages of Fair Rate

New

excep¬

no

to"

starvation.

state Commerce Act and the

LCL service by one or more days,

Diesels now are
pulling such trains as the New
England States Limiteds, our twin

constant need for service
profits, tomorrow's rates actually improvements. I don't know that
depend, to a.large extent, on to¬ we ever will achieve perfection,
day's profits. If you will act in because there is no such thing.
that knowledge today, and refuse But we Would welcome it if
you
to be misled by superficially at¬ would
help us to reach' a modest
tractive but momentary advan¬
6%
return — which we have
tages when you are deciding how
to ship, you will benefit greatly
tomorrow through a much lower

result

a

only have quickened

not

we

Our passenger

of your

rate

a

tion. ,Byt unless you

now

and when you

which

credit
depends on

As

be¬

tuting tractor-trailers for so-called

mately 90% of our freight train
mileage on the Boston & Albany

6)

page

ments only through a good

standing

stations.

At West Springfield, Mass., we
country* isun process of. eco¬
it may have established modern Diesel
to aggravate and accelerate, shops Where we are concentrating
adjustment.
In
practical all heavy servicing of Diesels for

that

LCL

freight
tween strategically located
centration points and smaller

4

(Continued from
can

is

Central

York

New

Should Rails Be Subject
To Starvation
we

■

of

movement

the

suggested that.
v.'/.;
"Perhaps the easiest way out
of this fatal absurdity would be
to insert a
clause in the Inter¬

motor truck service for the

new

a

services

wjll/be under pressure./Qc-f

the

run

coupled this new
in Ohio,
Indiana and Illinois this year with

serve

exported English products in dol¬
lar? areas. The English car which

certain

to

.

We also have

nomic adjustment anyway,

V

cost

testimonial!

a

them

not

but

necessary,

t

price struc¬

keener,

enterprising

an

railroads, which provide

.

tures

this

with

competitor. They must be set free
to fight. ..."
The function of regulation
of

Pacemaker LCL service

..'•[/ /

>/

,

engaged in a death

now

operated over '2,600 complish the
As you well know, the railroads
little harder, the^Competi-' are rapidly Dieselizing, and the daily route-miles,/and includes 37 'fast.,

will

tion

..

.

.

are

struggle

magazine "Railway Age" recently

of

alms¬

international

rails

that

is

the best kind

sistently, which is

higher return, we of the railroads
are not sitting idly by and merely

Ameri¬
businessman will find the < go¬

*

/,

■

the

reduce

tomorrow.

require

urgently

we

point

on

"peddler"

curring as it does on the reverse
slope" of a business IcycW when' is quite surprising.
Effects

.

.

the railroads'
position has changed. Owing to
trucks, it is not at all what it'was
when the ICC was invented. The
real

only true common carrier service,
should be to discipline them, if

Rail Improvements

Ail this means that the

7

Devaluation
What

-

and

the

deploring things as they now arel
house, which they do not wish to- Rather, we are constantly making
improvements, to the extent of
occupy, and which we have be¬
our
financial
ability
to
make
come tired of supporting.
the

of

out

recognition of

a

was

•>'••

^

we

windings of
protocol. .
.The

intricate

its

with

restriction

the fast and dependable
England
and
New
York
Pacemakers, and this traffic has
been increasing regularly and con¬
ing

and nourish it with

deeds.

Such a transfusion,
furthermore, was politically im¬ only by cutting'the amount of
possible on this side of the Atlan¬ American merchandise sold in the
area
can
the /['dollar
tic. The cure would have to be sterling
devised by Englishmen and ap¬ shortage" be relieved. Only in
this way can the English be taken
plied by Englishmen. It would not
palliative.

a

Act, which for a half century has
hog-tied and hamstrung the rails

Central's

York

abandon hope¬

quickly and boldly. . . .This means
nothing less than a radical revi¬
sion of the Interstate Commerce

New

words, and

socialism with
around

New

the

of

they

that

means

unprofitable operations. It
means they
must be allowed to
market their product—to set rates

lessly

are

20%

with atomic bombs when you

turn

that

It

are.

must be allowed to

entire LCL tonnage now is mov¬

integrity. You are playing
de¬

future

by any finan¬

dollar

their

they threaten the
integrity of the railroads, and in
so doing, they threaten your own

not do

which

competitors

these

of

longer

changing the gear ratios
of some of our freight Dieselelectrics to permit increasing our
maximum speeds from the present
65 to 75 miles an hour. More than

subsidies,

oy

degree, will re¬

a

on

popular

I

quote, "as the monopoly they no

midwestern points,

so

proven

now

spheres of usefulness.
But when these spheres are ex¬
tended to
uneconomical lengths
have

and

cake

live

All

taxes.

can¬

eat it
too. We want the British to-g6t off
our backs. They want to get off.
Devaluation will mean that Brit¬
their

have

not

place American goods. If it
one

constant trans¬
fusions from the public purse; and
whose expenses to a large degree
actually are coming from your
own pockets and your companies'
pockets, in the form of increased

Ameri¬

will be felt by all

But it

to

who

ice;

can

and
Bevin to

was

could not be solved

administration
will open our
to / .British
mattter of degree.

by this country, it
domestic
markets

summer

brought Cripps
and
Washington last week.

resort to our subsi¬
dized competitors, whose rates do
not reflect the true costs of serv¬

changes in customs

of

has

uppermost in mind when you are
tempted

freight

number of key

government and labor must

stop treating the railroads, and

movements between Boston and a

very

petitive position of American ex¬
ports in world markets.
•
Together
with
promised
tione.of it could be traded at less
than

The

that

Pacemakers
are
Diesel-powered, and shipments
That's Still true; it's truer today
are fully protected through use of
than
ever
before. " Government,
ownership would mean that you a pool of 1,000 specially built red
and gray box cars, all equipped
would be told when and how to
ship; would be told the service with high-speed trucks, cushioned
draft
gears,
and easy-riding
you could have, and the service
you
couldn't have. Government springs, to permit passenger train
This new service—which
ownership wouldn't end with the speeds.
railroads alone: it would stretch provides first-morning arrival
each way for cities between Bos¬
its initiative-stifling, dead hand
ton
and
Buffalo,
and
secondinto all other types of transporta¬
arrival
each
way
on
tion; into steel; into mining; and morning

American tobacco which formerly

cost

Syra¬

and Rochester.

cuse

ownership.

government

into

ing

(Continued from page 4)
war.

Utica,

Albany,

Pittsfield,

gently require a reasonable rate
of return Jn order, to avoid [drift¬

Will Sterling Devaluation Take
Britain OH Onr Back?

Thursday, October 6, 1949

FINANCIAL CHRONICLE

&

•

-

*

.It-"'"

rolume 170

Number 4844

COMMERCIAL &

THE

FINANCIAL

Dean Witter
Our

Reporter

Govextiments

on

CHRONICLE

Intercoast

Government securities continue lo

in

move

LOS

Nriw

Stock

Yprk

ANGELES, CALIF.

Exchange

vard

tb

AdmifR. V.V.MiUer

Granbery, Maraclie & Co., 52
securities Broadway, New York City, mem¬

Wilshire Boule¬

in

engage

a

bers of the New York Stock Ex¬

Officers are William L.

business.

and

6367

at

In¬

—

has been

Inc.

Finance,

formed

PORTLAND, ORE. — Dean
Witter & Co., members of the

trading range, al¬

a

FmANmLlCttRomcii)

tercoast

(Spehal to The Financial Chrontcle)

21

Finance, Inc.

(Special to TU*

Go/Opens

Branch in Portland

By JOHN T. CHIPPENDALE,'JR.

(1369)

though there has been evidence of a greater interest in these obliga¬ other
leading
exchanges,
has Irwin, President, [ arid Frank S. change, will admit Raymond V. V.
tions on the part of commercial banks as well as non-bank investors. opened a branch office in the
Halvorsen,
Vice-President
and Miller to partnership on Oct. 17.
: So far thb somewhat enlarged demand for Treasury obligations
Equitable Building.
Associated Treasurer. Mr. Irwin Was pre¬ Mr. Miller was formerly a partner
ias not been sizable enough-to indicate a reversal of policy On the
with the new office are William
>art of many of these institutions.
A cautious attitude stili seems B. Boone and William W. Rosen- viously with G. Brashears & Co. in Cohu & Co. and Cohu & Torrey
\o be in vogue at this time.
,1 Filling in of maturities" and switches feld, both formerly with Blyth & Mr. Halvorsen was with' Johh B. arid in the past Wris h'principal of
las taken some of the play away from the professionals Who Still
Dunbar & Co..
Robinson, Miller &Co.
.

.

to dominate

seem

and not-too-active market.

narrow

a

.

.

.

.

Co., Inc..

v.

.

y

y:

changes in handling operations in the
money markets, such as the reestablishing of the preferential
discount rate, had a tendency to increase the interest in nearTalk of administrative'

term Treasuries.... Economic conditions

being watched very

are

closely for effects upon the government market.
Many
believe long strikes in key industries would strengthen prices
of Treasury obligations....
.

'RICE STALEMATE INDICATED

.

.

MAIN OFFICE

government

.

eral

change in the economic pattern

Madison Ave. at 60th St.

ROCKEFELLER CENTER OFFICE
Rockefeller Plaza at 50th St.

.

prolonged labor disturbances.)

or

LONDON

commercial

rhile

banks

to

put funds into the government market.
in some .localities may not be experiencing the
loanable funds as those in other sections, there

institutions
demand

ime

been

for

BRUSSELS

y,

and

.

Condensed Statement of Condition,

'Also there is

4

increase

an

tions which "is taking funds
market.

v

.

September 30,1049

most

likely will continue to be a brisk need for
>rrpwings in order to finance the seasonable business pick-up of
le country as a whole..
yyy
:7'
;

PARIS

»

The seasonal increase in loans is taking the pressure off the

.

is

JVTADISON AVE. OFFICE

Broadway

Fifth Ave. at 44th St.

market seems to be under the influence of
forces which are likely to keep prices of Treasury obligations from
moving too iar in either direction.
.
(This is assuming ho gen¬

The

:

140

FIFTH AVE. OFFICE

■

,

■

away

'

investors,

more

on

■

,

will make them attractive to non-bank

Hand, in Federal Reserve Bank, and Due from
$ 581,726,047.22
*
y Banks and Bankers.
.%■ •
1,102,405,250.90
U. S. Government Obligations • ,
,
«
1
, V
v • • ♦
956,427,339.70
Loans and Bills Purchased
•y
*' •: .*♦,
*
% ♦
$
68,482,159.51
Public Securities
V.-'«
9,000,000.00
Stock of Federal Reserve Bank
«
7,214,957.10
Other Securities and Obligations ,
8,428,729.88
Credits Granted on Acceptances *
Accrued Interest and Accounts
8,161,870.59
Receivable
:
;
#
•y
2,936,827.13
Real Estate Bonds and Mortgages

Cash

municipal -obliga¬
from the government bond
brought out at levels which

As these securities are

.

RESOURCES

in tax-exempt

funds of

.

..

•

.

•

•

•

•

•.

%

•

^

■

......

.

Rousing securities vrill be coming into the market in the not too

•

•

.

insurance companies will he put to work in these obligations.

•

.

.

[distant future arid "these obligations will attract funds that would

ordinarily be invested in Treasury 'obligations.
For the time
being, but for a temporary period it seems as though the demand
for loans and the supply of securities other than
governments, will
tend to reipove the urgent need to put funds tb work in
Treasury
obligations, i. This will rio doubt tend to retard the upward progress
.

.

.

.

y

.

.

*

On the other haiid, credit will continue easy and this should
act Jhean any sizable liquidation of Treasuries in order to meet
Other Commitments by either .the deposit institutions or non-bank
investors.

Bank Premises

Because Pf the forces 'operating on both sides. p|
the .'equation it is/not expected prices of government securities
will, move very far in either direction from recently established y
trading areas.
y[>7 ■y7: y'
*' :-yy
.

v.

Out-of-town deposit banks continue to be the major buyers of
securities, although the large money center institutions have
been giving them more-competition than in the recent
past.
.

.

these

.

Certain

•

V

Other Real Estate

•

.

1

•'

•

•

t

t

1 V

•

.

«

♦

4

•

til V

Vv
1

f

4

•

v,
4

#

•

4- ♦

4

4

•

•

104,224,544.21
5,043,563:00
36,012.78

4

•

A 4

4

$2,749,862,757.81

«

♦

♦

Total Resources

>

•

4.

I.

'

> !

-J?

LIABILITIES

MARKET TRENDS

r A
somewhat larger, although riot too sizable demand, has been
appearing in the market for the longest 2s and 2%S due 9/15/67-72.
.

.

...

.

.

CURRENT

.

.

.

[of prices of government securities.

New

York

.

.

City banks which have been buyers of shorts

Almost exclusively for

long time have been making comrriitments
eligible issues.
This seems to indicate a
change in investment policy of these deposit banks.
a

in the aforementioned

.

.

.

.

.

.

^ Savings banks are still the all-important force in the re¬

stricted issues, albeit

not such

on

large scale

a

as

previously.

..

.

The demand for Vies recently has been more sizable from these

institutions than

for the

earlier eligible tap

switching has been going

on

from

is&iiies.

the 1952

and

.

.

1953

.

Capital

7 vT 7 T

.

.

Surplus Fund

.

.

Undivided Profits.
Total

Deposits

•

4! V

.

4

V

4

.

♦ v

4

•

»

\

•

* 'V
J 4!

v

V V
•

4

$ 100,000,000.00
200,000,000.00

v

1

4

Treasurer's Checks Outstanding ^

j

.

.

.

.

Total Deposits

.

»

•

.

■»

%

.

»

.

•

•

4! .7

•

*

$

Acceptances . . . ; . . . . .; • 4! '4;
Less: Own Acceptances Held for
Investment
•
? T
•

•

«

•

♦

»

#

restricted bonds into the 214s due June arid December 1967/72.
•'It has been quite a while since that type of swap has been

y -

$ 371,661,565.29

*

•

*

*

•

•

■

2,315,252,598.57

13,248,391.01
4,440,167.96

#

Dividend Payable October 1, 1949 , 7
Items in Transit with Foreign Branches

8,808,223.05
3,000,000.00
389,188.09

Payable, Reserve for *gefcfey*
Expenses, Taxes, etc,, f t j 1 % £

50,751,182.81

Some

eligible

^.7.

.

$2,280,719,746.78
34,532,851.79

4

.

.

71,661,565.29

v

Capital Funds .V

.

In style with the savings banks.
Life insurance companies as
a whole
continue to assume a passive role in the government
.

market.

.

.

These institutions, along with the fire and casualty
companies, are beginning to make fairly substantial purchases of
municipal obligations When the yield appears to be attractive

such

as

BRIEFS
•

.

.

Accounts

m

62,948,593.95

.

the

recent

issue of Pennsylvania Turnfrike

' :

bonds.

total Liabilities 7 7 7 7 T 7 7 t 7 777 7 7

...

[short end of the market in order to prepare it for increased offerings
*of this type.
Although many money market followers do not see
[the need for .such a development at this time, there would be no great
surprise if a measure like this one were put in operation by the

J. LUTHER CLEVELAND
Chairman of the Board

:

.

.

.

.

Although the partially-exempts have been moving with the
trend of the market, the 2%s and 2%s which have come in for
sale have been quickly snapped up, some of them at
prices
that were above the quoted market.
World Bank bonds,
especially the longest issues, have been well bought by non.

.

.

bahking institutions.

GEORGE G. ALLEN
Director, BritishAmerican Tobacco Company, Limited, and
Chairman of the Board, Duke Power Company

luin

Wurts, Dulles

PHILADELPHIA,

PA. —
Wurts, Jr. and
ohn Wister Wurts, formerly, conucting the partnership of C. S.
harles

Stewart

Cunningham With
Goldman, Sachs & Co.

CHICAGO,
ILL. — Goldman,
& Co., 208 South La Salle
Street, members of the New York

Co., are now associated
ith "Wurts, Dulles & Co., merri-

Stock

ers

ew

New

York

York

Stock

Curb

Exchange,
Exchange and

hiladelphia-Baltimore Stock Ex¬
change, 1416 Chestnut Street.




Exchange,
J.

Bernard

CLEVELAND Chairman of the Board

WINTHROP M. CRANE, JR.
President,
Crane & Co., Inc., Dalton, Mass.
STUART M. CROCKER

with

the

retail

-

■

The Columbia Gas

Sunderland & Kiendl

CHARLES E. DUNLAP

ham

department.
was

Price.

'

Mr.

GANO DUNN

President,

Berwind-

President, The J. G.

pofporation

Cunning¬

formerly with Hicks &
'

Chairman of the Board,
Kellogg Company

The M. W.

President

Chairman of the Board,
Air Reduction Company, Inc.

CHARLES S. MUNSON

Member Federal Deposit

Retired

WILLIAM C. POTTER
GEORGE E. ROOSEVELT

of Roosevelt & Son

EUGENE W. STETSON
Chairman, Executive
Committee, Illinois Central Railroad Company
THOMAS J. WATSON
Chairman of the Board,
International Business Machines Corporation
CHARLES E, WILSON

President, General
Company

Electric

White Coal Mining Company

White Engineering

sales

President,
System, Inc.

of Davis Polk Wardwell

JOHN W. DAVIS

MORRIS W. KELLOGG

WILLIAM L. KLEITZ

President, The
Presbyterian Hospital in the City of New York

Cunningham has be¬

associated

come

that

announces

.

CORNELIUS F. KELLEY Chairman of the Board,
Anaconda Copper Mining Company

Committee, Union Pacific Railroad Company
J. LUTHER

WALTER S. FRANKLIN
President*
The Pennsylvania Railroad Company
LEWIS GAWTRY

Chairman, Executive

F. W. CHTARSKE

Sachs

urts &

.

JOHN A. HARTFORD
* Chairman of the Board,
The Great Atlantic & Pacific Tea Company

CHARLES P. COOPER

B. J.

WILLIAM L. KLEITZ
President

President, American
Cyanamid Company

WILLIAM B. BELL

W. PALEN CONWAY

Chas. and John Wurts

■

DIRECTORS

.

monetary authorities.

$2,749,862,757.81

fiduciary powers, to secure public moneys as

There is considerable talk about the
reinstituling of a preferential discount rate, which would probably be done to bolster the

.

.

above Statement are pledged to qualify for
required by law, and for other purposes.

Securities carried at $164,378,843.32 in the

;'y

.

>

ROBERT W. WOODRUFF
Chairman, Executive
Committee, The Coca-Cola Company

Insurance Corporation

'SA"'-

22

COMMERCIAL

THE

(1370)

FINANCIAL

&

CHRONICLE

that would just

cause

How the Salesman Should
People

(Continued from page 4)

are

in

Analyze Himself

rut, and they
do things, and it is
a

ar.d

out

puts

too

on

unhappiness.
So, if you

strong

and

too

Thursday, October 6, 1949

cheerful

as

add to his

not friendly and

are

around to see
people, you can be just another
spot of gloom during their work¬
ing day.
you

go

heavy a canvass. Well, just
society, through the function he don't want to
the line
is going
to be
up to the salesman to go and im¬ where
performs.
drawn
between - them is
deter¬
You should consider yourself pel them to take action. But their
On the other hand, if you are
mined by your own self.
the equal of every prospect you first reaction to your solicitation
But I will say that selling in a person who is very friendly and
call ore Regardless of the position is going to be "No."
of the person you contact, there
You must expect that when you most cases today usually is over¬ enthusiastic and alert and cheer¬
is no reason for you not to think start in the morning.
When you whelmingly on the light side. ful, and you come in and see this
that you are an equal of that per¬ plan your sales solicitations you've There is not enough strong solici¬ executive and spend 15 minutes
with him and during the course
son in the business world.
got to expect that the fellow is tation work being done today.
There is another consideration of the interview you brighten his
When you visit the president going to say "No," that he doesn't
of a large bank, there is no reason want what you have to sell, and on this same point.
There are life up a little bit, certainly, he
for you to think that he is on any then you've got to know what to different levels in every sales oc¬ is going to look forward to seeing
When your name is an¬
better level in business than you say after that to overcome that cupation, and where are you, as you.
first "No" that you meet with.
far as these levels are concerned? nounced, he'll say, "Send him in,"
■are, because selling is a two-way
because here is going to be a little
I'll
street.
You
sell something
give you one little hint
Suppose that you are in a job
and

somebody buys it from you. One
participant in the transaction is
lower

not

business

other

the

the

on

scale.

There

ship in

than

is

host-guest relation¬

a

sales interview,

any

Usu¬

the

guest,
need not
feel yourself any lower than the
man you went in to see, because
if you do it is going to be reflected
in your whole attitude in your
ally,

the

as

is

salesman

the

and

guest

you

^aies solicitation.

|. The

next point is that you have

become

to

with

imbued

will

the

tp go out and sell. If you are the
kind of person who needs the boss
to start you out

i#

selling, then there
adjustment that you've got
You have got to want

an

to

make.

to

do

the

work.

like

must

You

fear

this

about

If

business.

you

find that it bothers you too

much
thinking
about yourself too much. It's like
an actor who gets stage fright. He
isn't thinking about the role he
has to play, sufficiently, or about
the play.
He is thinking about
that means that you

are

that

is too

haps

.your

heavy for

Per¬

you

his

who

will

It

advancement

at the end of a

opposite

your

and

because

that

of

you.

dollars worth of business
bring in? And if that is

many

did you
and

a

lot of differ¬

your

pay

advancement is meas¬
ured, then you certainly should
direct your time to seeing that the
your

figures look right.
Do

Not

Maybe

Ape Other Salesmen

lot of

a

when you started

you

in at

salesmen,

work,
assigned to travel with one
the older salesmen, or you ob¬
your

were

you

still

are

a

week or two.

that,

doing

If

please

not

are

out contacting very small

accounts and yet you are the kind
of a person who should be han¬

ence.

In the

remember

work

you

working right.
you are

Now, that makes

level

Your

half, by the figures
sales record. How

served him for

own

working

are

is

how your progress and

of

above your

up

to get
nowhere.

judged
pretty
much, at the end of a quarter, or
,

fice.

point defeats

very

are

going
you

that you

Remember

Well, that
You

is

get

for your own advancement.

He is

day.

fellow

boss has got you con¬
tacting accounts now that are too
big for you to handle at this time.

you.

On the other hand, suppose that

will externalize
your thinking and think
objec¬
tively and forget about yourself,
you will find that you lose that
timidity and do a lot better job.
if

in

the

stuck.

going to
talk with someone who is
going
to bring an atmosphere of friend¬
liness and happiness into that of¬

himself.

Now,

oasis

rands and do things that won't
produce business for you, you are

you

should not ape
him, that you have to be an origi¬
nal, and not a carbon copy, and
that you've got to develop your
own selling style.
He mayF have
a
lot of good
points, or that other fellow sitting
next to your desk is getting more

course of your daily
probably see a lot of
men
going around who are sup¬
posed to be selling, and they look
unhappy and gloomy, and I won¬

that

is,

he

good

how

matter

no

you

der how they ever get any busi¬
dling the heavier work.
The lit¬ ness. Maybe they don't because
tle, trifling business has no chal¬ they surely don't add any thing
lenge for you. It is not interest¬ to the pleasure of a man's life.
A Steady Performance Required
ing enough for you, because it is But if you go in and bring with business than you, and you won¬
Another
factor: The salesman below the weight that .you can you a little bit of friendliness, der how he does it. Don't
try to
has to sustain a steady perform¬ pull.
Therefore, the solicitation your prospect will be much more copy him.
ance
from day to day. This up that you give to these small peo¬ apt to want to do business with
If he has certain good points,
and down business in selling is ple,. or
these
small
accounts, you.;;
■
—^/v'.
you can use them, adapt them to
not right." * * * * ' * *
rather, is too light.
your own work. But do not try to
Ask Yourself "What Am I Doing?"
If yoil find yourself being tem¬
Let's go away from the invest¬
ape anybody, and to imitate them,
Those are some of the points on
peramental about it, it means that ment business for a minute and
because you are not going to get
the subject of adjusting your own
you have not made the right kind, say that a fellow gets a job in a
away with it.
of an adjustment to the demands store somewhere and he is selling self to some of these
demands
There is another point in selling
.

'

selling enough to want to start
yourself out selling every day.

| A lot of people sit at their desks
the

night

and

they have planned

ful

sales

they

before

out,

start

campaign.

wonder¬
They have

been dreaming it up.
time the reality of

And by the
the working

a

cjay hits

them, they simply leave

all

stuff

that

don't

get

Would

be

the

in

dream

moving

to

like the

and

all.

at

It

concert singer

■who

foolishly leaves the best of

iier

concert

in* her

back

hotel

by vocalizing there too much
before she arrived at the concert

room

ball.

.

In

,

.

selling there is

difference

a

between

getting/ out there,
just dreaming about it.
t-

•

.

'

.

and
/

■

•'

'

of selling.

Selling

Monday,
Thursday,
Friday, you have got to be out on
the job looking for business, and
selling new. business, and develop-,
ing
more
business
from
your
means

.Wednesday,

Tuesday,

item

some

the

over

counter

yet he is executive material.

haps he just landed in

and

Per¬

city

a new

salesmen.

upon

Still

on

the sub¬

ject of the salesman for his

own

that has to do with the impersonal
A salesman

factor.

really has two

sake, you have got to emphasize
the
point that every salesman
must maintain a clear perspective

entities.

tives spend too much time

dency for it to deflate your own
ego, and when that happens your
selling aggressiveness is ruined

personal
and he
self, and standing somewhere
took on, this job to pay his ex¬
alongside that is his entity as an
penses for a while until he could of what he is doing.
Just what investment salesman.
are you doing?
present accounts. If you are not get a better job. Here he is fid¬
They are two distinct entities,
When you get down to the of¬ from
dling with some work that a very
doing that, something is wrong.
your point of view. You call
You ^moy* say, «"Well, * I* get unintelligent clerk could do. You fice in the morning, what is your
on a buyer late in the afternoon,
doq't think that he is going to put job? You are being paid for bring¬ and you get tossed right out of
moody,'? or "My work rhythms run,
into
that
that way," and I say never mind much
job,
do
you? ing in a profitable sales volume his office. Now. how do you feel
that kihd * of talk. The TaOts that There isn't enough there to chal¬ to your firm.
That is what you about a thing like that? He prac¬
lenge him, to make him work are being paid for; that is what tically insults you.
you are moody or have such
a
He told you
rhythm in your work, are very hard. He is in the wrong level you have to keep in mind.
he didn't want to do any business
As far as you are concerned— with
personalized matters that you can and therefore the weight of any
you, and with the firm that
solicitation he would give would and it is
control if you really wish.to.
you that we are talking
you represent.
be wrong. '
about—what are you doing? You
* VY.
I must bring up one. other pomt,
Well, if you let that affect you,
k.'' *
»■/;'*
I.*,. •'
K
are
in discussion of the salesman, the
earning your living, and the personally, you're crazy. There is
Are You Working at the
living for your family. You are a personification of a salesman
matter of emotional security." A
Correct Level?
lot of men in selling are- emotion¬
earning your way through life by that you represent in some calls,
In adjusting
yourself to your selling. A lot of salesmen seem to and that element is not you, and
ally unbalanced, or ^emotionally
selling career, ask yourself, some¬ forget that. They get into a lot when the fellow threw you out,
immature.
They
are
having
trouble with their giii, or trouble time, at what level you are work¬ of nonproductive overhead things or would not talk to you, or ran
at home,; or trouble' with their ing. Is it the right level for your to do and they forget that what your firm down, he didn't do it
present capacity. If you find thkt they really get paid off on, in the personally.
There was none of
boss, or something like that but
it is not, do something about it.
the salesman, if he is going to be
long run, is how much profitable your personal character involved
If you are working too high, in¬
in that, and therefore you should
business they do.
a
really successful person in his
crease
your own stature to han¬
So, when you start out on your set up a detached defense against
field, has got to learn to control
dle the job, I would say.
If you job, the thing for you to say to that sort of occurrence.
his own emotions, and to stabilize
are
working too low, do some¬ yourself is, "Where am I going to
If you get treated badly in an
them.
i
thing about getting better ac¬ get some business?" That is the office, forget it.
It doesn't mean
; If you can not accomplish that, counts, because the weight of
If you let it bother you
question to ask yourself. "What a thing.
it is going to eat into your selling
your
selling work itself is de¬ am I going to do to get business?" personally, then perhaps the rest
time, and into your selling atti¬ termined
by the relationship of Always keep your mind on that of your day is ruined. You develop
tudes, and you are going "to lose
your own
capacity top the chal¬ point, that what you are getting this emotional off-balance that I
an awful lot of
business, so in this lenge of the job, and 'if it is in¬
paid-for is to go oyt and write was talking about* a while ago,
fcm^lyzing of, ypuijsejf,,of,your own,
consistent, your work is not going orders, to sell shares and bonds and when you get off balance that
selling operations, just consider to fit into that level.
and things like that, and keep that way you just don't do a good sell¬
whether
extraneous
emotionalWe
have
also
the matter
of foremost
in
your
mind.
When ing job.
things are upsetting your work,
sincerity in your work.
You've you do that you will forget a lot
You must learn to take slams
and if that is so, you should take
got to have it, or you are going to of these nonessential things that like that in an impersonal man¬
some steps to correct the situation.
be out of luck.
There is a direct
Don't even allow your mind
you may be spending your time ner.
relationship between the sincerity on.
"How Hard Should I Sell?"
to contemplate the incident, be¬
you invest in your business and
I think a lot of account execu¬
cause
if you do there is a ten¬
broke,

for

reason,

some

He has his own

*

_

I
Overcoming Timidity
j Another point, a salesman has

got to overcome any timidity he
lias about the job of selling. There
are two kinds of timidity that we
apeet with.

The first is very com¬
the young fellow just

It is

mon.

starting out, and afraid to make
bis first
have

call.

.

,

.

Probably, we"

all experienced

emotions.

of his

some

You walk by the

door

"two or three times before you can

get
;

enough courage

up

and

to

That is

in

tempqrary stage and

a

I, won't talk about it for

long; the

pther kind of timidity is
thing of which you may
quite

so

well

going with

solicitation after the

Now,

how

many

some¬

not

be

That is the

aware.

fear to keep
1

go

talk.

a

man

of

strong

says no.

you

men

Suit interested? Is says no signal
when a buyer that
he is
ot
a

that your selling canvass is over,

that you should look up somebody
else who might be interested?
No,
it isn't.

1 No

real

buyer
say

selling begins until the
Because, if he didn't

says no.

no,

we

salesmen.

wouldn't

You

need

could

the office boy over,
could ask questions,
send

t

Your real
meet

you

any

then

just

and he

opposition

the

on

part of your buyer, and that is the
.place where this second type of
fear

is

up.

demonstrated

by a great
They just fold
They give up, reach for their

many

-

,•

salesmen.

hat and leave.

At

hard

adjustment

between

There

is

are

doing

se¬

curities.

It is putting a new idea
into their minds that they ought
to be doing something with their
wealth, in the ■nature of investing

it.
^




t

an

positive

a

In

to

other

much pressure

use

when I

selling

these

am

stocks

Where do I quit?

put the

bee

words,
I

going
going out and
am

and

bonds?

How hard do I

these, people?"

on

all

you-

many

do,

you

orders.

won't
If

the

If
be

your

solicitation is too light, there are

sales

of

number

that

you

make.'

*}

.

board

Insincerity is easily spotted by
your
prospects
and
your
ac¬

go

counts, and if they don't believe
that you are sincerely interested

you.

in

your

are

else

soon

to

work and in them, they
going to find somebody
their

handle

business

for

them.

The next point is the matter of
friendliness.

Well, I'll say that, certainly sell¬
ing is not going out and making
timid
inquiries
as
to
whether
people want to buy securities.

pecially true in the selling of

_

question is
"Well, just how

sell?"

consequences.,

getting

_

I

drive to get business and a
nega¬
tive restraint, ^because, of social

that is

you

the

come up,

should

that,

if

time

some

going to

you've got to get over it. Remem¬
ber that selling is overcoming the
indolence of people. That is es¬

Now,

.

.

*

"How

selling begins when

the

'V.••

.

Consider

the

situa¬

tion where you might find a

who

works

who

invests

them.

for

all

their

funds

He's got an inside job.

sitting behind
there

are

a

a

lot

in the

man

big institution,

a

for

He's

desk, and maybe
of

things that
of

the

go

day.
There is a lot of unpleasantness
that may happen to him during
wrong

course

in the
watching the figures
Why? Somebody else can

room

by.

handle

a

but

lot
an

of

service

calls

for

account executive is

really paid to develop and service
a profitable sales volume, and his
attention
that

as

should

be

directed

to

hours of the day as

many

possible, and all these other over¬
head
things, nonproductive er¬
rands should be assigned to some¬
body else.
If you are the fellow who is
stuck

lot of those little
extras around your office, it would
be well for you to get somebody
else to do it.
Let George do it,

doing

not

a

for
you

while, so if somebody tells
to get out of the office in a

a

discourteous manner, just get out
and forget about it.
What do you
care?
It doesn't mean anything
to you.

marks
you

this

else

More than likely, the re¬
were

not

directed

against
just
of somebody

personally at all.

personification
that

came

something at a
time, that's all.
There
emotional

is

in

It

to

was

him

sell

particularly

bad

such a thing as an
transference, and this
.

prospect,

10

minutes

before

you

protect came into his office, his wife
your own time. If you don't pro¬ called and told him that his son
If you don't
give a pretty strong
tect your own productive selling had just taken the Buick out and
canvass, you are* going to miss an the course of a business day.
On time, no one else is going to pro¬ smashed it all
up.
He just heard
awful lot of
business, because of top of those unavoidable unpleas¬ tect it for you, because if you get about
that, and it is still in his
your weak presentations. There is ant
occurrences, he certainly does the reputation in your office of mind.
He hung up the
telephone
the very1 weak
want
to
entertain
presentatibri and Pot
any
being the kind of a fellow thai without being otherwise thazi nice
then there is the man
who goes grouchy, unfriendly salesman, be¬ will run these
to his, wife, and then all of » snHnonproductive^ er¬

too many misses.

and

you.

You

must

Volume 170

Number 4844

den you come into the

THE

office, and

you are the-one who gets it.

your associates.

doesn't

some
skill in get¬
with people, in han¬
dling human relations, the human

ting

A

relations

cream

girl

cone

wail

will
the

on

and

drop

sidewalk

and

cry,

ice

her

and

when

the

doesn't

stop

There is

crying

immediately.

emotional carry-over.

an

patched up.
And it's the same
story in adult life.
Perhaps the
fellow had a terrible scrap the
night before, at home, a terrific
wrangle, and he carries that over
into the next day.
He isn't

pleasant to get along
keeps out of
his way, and she warns
everybody
with.

in

,

so

His secretary

the

office

But

way.

to

stay out of his
have the 10 o'clock

you

appointment, and you bounce in
feeling fine. What happens?

there

He takes it out of you.

:

-

So, for your own protection,
just let that sort of thing slip off

-

back.

your

because
from

Don't let it get you,

.

then

it

will

take

away

along

man.

You have got to

ity

;.

~

-

; There are two more points on
this subject of the impersonal fac-

'

~
-

'

tor in

selling that I think will be
interest to you. The first one is
that you should forget the turn-

of

downs.

You

can't sell

You go in and make

solicitation

and

a

find

that

aren't getting anywhere.

another

thing that

you

There's

shouldn't

you

take personally. Let it go. There
is no salesman in the world who
sell everyone.
The second point is this:

lose

to you and respond to
and want to do business with

is

everything

When

order, be a sport about
it. Sometimes, at the close of
your
interview, if you have done a
really good job and a long job,
but your buyer doesn't see
eye to
eye with you, you really feel that
he

should

chase,

have

the

made

pur¬

mind making those
innuendoes or wisecracks,
never

little

the very end.
None of that
business of just biting into him a
at

little bit.

That
and
man

does you

any

good

although you didn't sell the
that day, next week or next

month you might sell him.
you

But if

have

him,

or

made a wisecrack at
said anything that ques¬
tions his judgment in
turning you

down,

you may have ruined your¬
self in that account. So

flock around

thing.

More

himself:
sonal

the

There

have.

certain

are

attributes

should

salesman, for

that

a

per¬

salesman

it's people who
buy securi¬
is
nothing to the
securities themselves,
from this

cause

ties.

There

aspect,

but it is

the

the people who

handling cf
going to buy
important.

are

a

who thinks.

person

person

who thinks for him¬

is

person

the

who

is

doing constructive things,
plishing things, and that
kind

of

a

ship with the people that
to

after

do
all

business
in

really putting
to

let

they

a

lot of faith in

you

their

programs,
salesmen you in

job

of

gaining

that

so

of

all

their

is

excellent

back

to

the

other

of the

some

of

have

them relied

on

of

adjust¬

chooses

veloped from

;

taking
man

initiative

your

have. got
telling and

the

thinking for
them

to handle with kid

gloves because

and

if

work

believe

makes

is

he

sick

in

lot

a

to be
are

don't

your

the last done.

going

to

be

is going

order not to have to do the

Your orders

the

last

his

reaction

the

to

to duck away

orders

the

accounts.

your

will

about

respond

and

you,

faith and confidence

—

to

you,

their

put

and, inci¬

dentally, their orders—with you.
Another way of getting people
to

respond to you is simply by
being very cordial. You don't like
to

person

hands
fish"

come

with

up

with

you

handshake,

shake

and

"dead

a

that when
you get your hand back you feel
that you want to wash it, be¬
so

that is

exemplary of being
cold and very uncordial. :
«
In

contrast

warmth

of

with

friendship,

that,
the
of social

acceptance, a mutpal relationship
that
is
very
friendly
between
people is what draws people to
one another, and that is what you
must put forward as a salesman.
You've

got to go overboard, to

particularly gracious and cor¬
and, if you will, to exert a

dial

certain

amount

do

expend
a

charm

client.

your

To

social

of

a

that, you have got to
great deal of effort. I

minute

ago that

you

have

to go overboard in doing it.
You must exaggerate a little. Not

got

where

ier

of¬
just to the point
accomplishes the best

but
it

getting

business

any

is

con¬

You

get paid off on your
ability to handle human relations,
how you can influence
people
to do what you want them to do.
A salesman should have a
an

prefer¬

for

ence

That's

If

people

why

you

things,

you

or

could

you

where
that

are

wanted

you

and

to

could be
to

go

.things.
in this job.

over

work

with

engineer,
plant some¬

an

a

work

would

be

on
product, and
quite easy, han¬

I mentioned in

lectures

make

sales

a

of the earl¬

one

that

every

time

solicitation

should consider it

as

you
you

problem

was

from it and feigning

a strong type of person
who extracts admiration and re¬

friendly,

Condensed Statement

of Condition

close oj business September 30, 1949

as at

RESOURCES
Cash and Due from Banks
.

,

*

.

U. S. Government Insured F. H. A.
State and

Municipal Bonds

.

.

.

.

.

998,899,704.33

.

•

36,272,271.33
.

jk.,*

3,150,000.00

«*•

17,566,121.87

4.

Loans, Bills Purchased and Bankers' Acceptances

Mortgages V

.

.

Other Real Estate

Customers'

V

.

Banking Houses

.

555,237,009.89

•14,431,852.68-

,

10,179,102.03

.

Equities

-

*

■>

450,815.40

i

4,016,079.69

Liability for Acceptances

Accrued Interest and Other Resources
■iff vr.

io"o:

(!:/>

Wh

,C'

i

I '

JY

1 tj

I

,

f«

I

J

lil

A tl I

VV. '. '.

Capital

Surplus

"J

...

Undivided Profits

6,547,518.02

$2,268,280,156.47

'.

Vi'.l

*

L I TIES

.'

.

.

60,000,000.00

.

.

/

$45,000,000.00

.

4.505.491.12

Reserves for Taxes, Unearned

Dividend

Discount, Interest,

Payable October 15, 1949

etc.

8,905,314.01

.

1,350,000.00

.

Outstanding Acceptances

Liability

as

Cash held

Deposits

Endorser

as

•

4,552,297.88
2,584,796.63

Acceptances and Foreign Bills

on

Collateral

in Escrow

or

•

«

•

.

.

.

14,921,623.15

;•

....

•

•

•

•

•

2,094,366,917.21

.

$2,268,280,156.47

do

that

person

successfully

the person who has a lot of

is

Getting Along With People
All
with

day
your

long you are talking
clients, with your ac¬

counts, with your bosses,.and with




trust

deposits and for other

to you.

Now,

gentlemen,

I

don't

a

These

very

things

successful

I'm

salesman.
talking about
got

must be worked at. You have
to

extend

yourself.

$91,091,645.40

required

as

are

or

pledged to

secure

permitted by law.

J.

BEINECKE

FREDERICK GRETSCH

Chairman, The Sperry & Hutchinson Co.
EDGAR

S.

BLOOM

Chairman, Atlantic, Gulf and
West Indies
ALVIN G.

LOU R.

Corporation

ERNEST STAUFFEN

Savings Bunk

<

.

.

Products Corporation
GUY W. VAUGHAN

.

.

JOHN P.. MACUIRE

Board
-

'

Chairman, Wright Aeronautical

President, John P. Maguire & Co., Inc.
.

President, United States Lines Company

C. R. PALMER

Chairman of the Board
ALBERT N.

GEORGE J. PATTERSON

President, Getli & Co., Inc.

Corporation
HENRY C. VON ELM

Director, Cluett Peabody & Co., Inc.

PAOLINO GERLI

Chairman, Trust Committee
L. A. VAN BOMEL

President, National Dairy

■

President, Emigrant Industrial

Chairman, Dana Corporation

-

MacLELLAN-

JOHN T. MADDEN

SMITH

HAROLD V.

President, Home Insurance Co*

President, United Biscuit Company
of America

CRANDALL

President, George A. Fuller Compan}

Vice-Chairman of the.

■'

Simpson Thacher & Bartlett

KENNETH F.

JOHN M. FRANKLIN

hlew York City

OSWALD L. JOHNSTON
-

RARE

Vice President
HAROLD C. RICHARD

Director, Lambert Company

Steamship Lines

BRUSH

Chairman, American Home
Products

WILLIAM G.

President, Lincoln Savings Bank
JOHN L. JOHNSTON

WILLIAMS

President, Scranton & Lehigh

President

President, Westinghouae

Coal Co.

HARVEY D. GIBSON

Air Brake

Company

ex¬

get you business, that will make
you

at

purposes

DIRECTORS

-

EDWIN

HORACE C. FLA NIG AN

aggerate on this. I am talking
about personal attributes that will

can

the

United States Government and other securities carried

public funds and

CHARLES A. DANA

ing power. And if there is any¬
body in the world dealing with
humanity it is the salesman.

who

and

137,093,716.47

$

32,093,716.47

.

Reserve for Contingencies

that gets you business.
You've got to make these people
the thing

earn¬

handling people,

13,440,616.36

Mortgages

.

Stock of Federal Reserve Bank

Other Securities

608,089,064.87

$

U. S. Government Securities

spect from your account. That is

come

on page

TRUST COMPANY

a

You have got to be
a
strong personality.
When you enter the offices of
these people, you must make them
realize
that
something good is
coming into their lives.

dling inanimate objects. But the
toughest job
in
the
world
is

(Continued

-

your oppor¬

perfect performance,
like
a
great actor going on a
stage and putting on something
that is really worthwhile. Now,
your sales
solicitation is where
you,
yourself,
extend
yourself
with effort to make yourself very
tunity for

in.

personality. But if

to the point where it becomes

fensive,

He

strength to your selling
you duck away
from them and find various and

v^ork,

MANUFACTURERS

lot

a

of

and

add

you

you

sales¬

a

do

do people's thinking for

they

group

as

to

action.

road

said that in

you

The person in your organization
who is the smartest of all in
prod¬

as

of

right

The latter pre¬
'
r

I

a

.

of

the first lecture

an.

who has

Now, the principle is true in
selling that if you respond cor¬
rectly to certain sales situations

day in life. The child, for instance,
some activity

result.

cerned.

courses

the

are

those securities that is

uct-knowledge may be the most
stupid person in the world as far

person

doing lha;; he adds strength to his
personality.

learned response
to the incidents you meet every
a

who is thwarted in

How

in

said

kind

the

A

personality has the proper
integration, based on his ability
to
discriminate wisely
between

make to life. It is de¬

you

get to do work for your ac¬
counts, all those people, you have

talking now about skill
handling human relations, and

to

alternate

of

Personality is controllable by

doing their
many

was

good

ment

that

that

life.

of¬

in

a

individual.

festation

you

other person

some

to do it for them?

of

every¬

and

there.

thinking, and how

dominate.

in

worked

the people
of them were

We

is

his personality

thinking for them.

some

own

accom¬

place

isn't

of

part

ality that you do use and manifest
in your selling work.
Personality is really the mani¬

your boss,
the girl at the
switchboard, the girl who writes
your orders up, the person up in

research

it

but

various

weakened
by a continuation cf
the wrong kind of an adjustment
to a barrier that he met with in

portance of the amount of person¬

confidence

your potential market
but also to all the people behind

market

personality. We

thing in selling. You can't get
along just on personality, but that
does not take away from the im¬

That

the

important

.

the psychic illnesses that he can't
control when he meets with diffi¬
cult problems. That represents a

difficult

a

that

to

that becomes part of
personality and later on in
life he might very
easily develop

have already committed ourselves
to the proposition that personality

particular must
an

subject is

It is that of

one.

invest¬

next

repeats

if he

response

his

Salesman's Personality

The

are

case

handle

you

The

because

Now,

problems,

call

you

with,

your

illness.

particular

who

person

23

to for decisions, and
person
to do some

that

many

busy

that

person *

come

you

You

gentlemen are
selling securities, but your essen¬
tial job is
handling people, be¬

a

you,

self

be

about

are

The

forego that

sort of

we

Now,
what
will
make
the
people come to you and respond
to you? Well, the first
suggestion
along that line is that people

cause

never

that

talking about.

If you

an

glad

that at

mean

be

represent

can

you

must

you

you
you

everyone.

very strong

but

attracted

be

(1371)

that are acknowledged. Whemyou
all,' make yoiir calls you are going to
hang on the switchboard until
manifests a great deal of cordial¬
somebody else gets through talk¬
ity, sincerity, interest and friend¬ ing.

hander, I don't

a

and their

sale.

a

get the people to

you

fices

"Turn-Downs"

be

CHRONICLE

friendship.
applies not only to all
those people in front of you who

How

Think

the

get people to re¬
the easier it is for

can

to make

you

yourself.
Forget

to

be most careful to do

you

spond to you

get

.

have

easier

their

protect

don't

FINANCIAL

ment

to

and

capac¬

make people respond to
People who buy investments

of

it,

a

&

from you respond to
your sugges¬
tions and
your
ideas, and the

objective

about

have

to

you.

people

your

You

on

sales operation.
You
don't really mean to allow it to do
that, but that can happen, so be

•

factors,

he isn't going
to be very successful as a sales¬

mother buys her another one, she

You continue to cry after it's been

salesman

a

have

It just happened that way, that's
all. It had nothing to do with you.
little

So, if

COMMERCIAL

Head Office: 55 Broad Street^
MORE

THAN

75

BANKING

OFFICES

New York City
IN

GREATER

NEW

YORK

-European Representative Office: 1, Cornhill, London, E. C. 3
Member Federal Reserve

System

•

Member Hew York Clearing House Association ».Member Federal Deposit Insurance Corporation
I

'

--viU

24)

'

THE

(1372)

24

sundry

neglecting

for
certain

excuses

tough ac¬
count, or handling a certain diffi¬
cult problem, then you are doing
something to weaken the integra¬
tion of your own personality into
calling

a

on

a

a

The next

wife says to you, to¬
you get home—you
long day of working
and you have come over here and
listened to this lecture and missed
your regular train, and you get
home late and dinner is late, and
after dinner she says, "1 have an
awful lot of dishes and pots and
pans in the sink, will you help
your

pose

night,

after

have had a

with them?"

me

Well, your attitude

toward that

job is certainly not enthusiastic.
If you're a Good Joe, you may
help her.
Or, say that on a very cold
winter day you've got to go way
out back and empty the garbage
can
some
50 yards from your
Well,

house.

don't look with

you

great deal of enthusiasm toward
that job either, but on the other
hand, you are sitting in your of¬
fice and the telephone rings and,
a

how are you?"

Joe,

"Oh,

hello,

"I'm

fine."

Joe,

"Say,

we

are

have a bathing beauty
contest down our way next week
and there will be maybe 75 or
;&0 girls competing to be chosen as
the beauty queen of our beach,
and we would like to have you
as one of the judges." Now, there
is a different kind of assignment"
that you might look at a little bit
differently than the dishwashing
assignment.
going to

Every job or piece of work elic¬
its a certain response on the part
of

a

Either you .don't like
out of it or, on
other hand, you do like it and
person.

it and try to duck
the

it.

do

to

want

Now,

ask'

you

yourself, sometime, what is the
of

nature

to the
have chosen to be
response

your

work that you

your life's work.
That is a pretty
to dwell

time know where you are

overall

like to come

like

to

-

a

out selling?

go

j[ike to call

V;

Do you

and

get them to buy investments
securities?

Well,

in the
and

of the canvass

you are going as soon as
particular point is completed.

where

that

I think

you

have all been

wit¬

bogged
while when you go
particu¬
That's working.
That is real of that na£ure that will turn your
man to invest a million dollars.
lar
sales point and then, when
work.
"
accounts away from you because
Also
concerning the health
that is over, silence. They don't
Perhaps the best way for you certainly if you are good in every¬
know where to go.
They've for¬ topic, in order to have the energy to determine your own attributes thing else you should not allow
and the strength to keep going
some small characteristic ruin you.
as a salesman is to measure how
gotten where they were.
Were
continually in selling, you must
they at the beginning of the in¬
you
stand with your customers.
have good health and plenty of
That is what.-you are trying to
terview, or were they about to
energy, if you are going to sell.
quote a price, or about to take a
accomplish, to stand so well with
If you are not in good health,
syllabus, out and show them?
your customers that you get their
Where
are
they?
They're lost. you can't give and take with a business.
customer in such a way that "the
They got sidetracked.
Now, what we have been talk¬
Establishment of a new invest¬
You
can't
let
that
happen. strength remains on your side* ing about last time and today are
getting

salesmen

to

ness

and involved in

down

a

,

Smith, Barney Opens
New Investment Div,

again,' is this business of
a -split personality.
You

Here,

being

become; very

to

nave

much en¬

interested in any par¬
point under discussion, but

gaged and(
ticular

remember still that when
over,

where

that is

what you are going to do,
you are in the course of

if you
are going to lose con¬
of the interview and once
lose control of that inter¬
because

solicitation,

that

don't you

trol
you

view most

to

likely you are going
;

particular dis¬
will call
for your attention. You are a part
of it, and yet you are not a part
A

part of every

reflected

in

your

business.

Avoid excessive

fatigue, and be
careful about dissipation.
I have
seen

lot of fellows allow drink

a

to

lick them.

of

men

I have

seen

to

You

it.

what

division

and
'

•

'

*

programs

are

we

tofore

in

Still

the

■<

"Personal

on

knowledge

and the

of

Attributes,"

your

knowledge of

product,

prices.
If
don't you're out of luck and
your

You have to know your stuff.
you

maintain in your

in

with

stand
If

.

H

a

,

Part¬

York

C i t y, mem¬
bers
of
the
Charles

B.

Harding

IN.

Stock

Y.

•■Exchange.
set up a specialized
•*.

Decision to

Don't Force Your Prospects!
There is

B.
g

of Smith,

New

deteriorates

that happens it
your selling style.

n

Barney & Co.,
14 Wall Street,

and

as.

?

-

by

d i

Senior,

mind increases, and

doubt in your

a r

ner

as the
number of lost sales increases this

work,

n

a

Charles

make quite a few calls
and make no sales, you gradually
begin to doubt the efficiency of

selling

vestors—

n

-nounced

you

yoiif

i

was

accounts.

those

gener¬

available
only to large

ally

and it
We all

manner.

a

—

service " here¬

work, and if you are weak

your

in

specialize

to

small investors to plan
supervise, their investment

making a certain type of solicit
tation, all these : other personal
is just sorrowful to see.
attributes will strengthen you in
know
that
drink
can
be used the eyes of your prospects.
either in a correct or an incorrect
So, sometime, analyze how you
damaged that

detached

are

see,

basic factors thaL will aid

the

plenty

way,

You

;

assisting

working along with right now are

enough lose your accounts. * If you have
authoritative
knowledge
of
mind what is an
happening all along, that you are what you are selling you get the
slowly driving that fellow toward reputation of being an expert with
a
purchase, and you've got to your clients, and that is just ex¬
keep that in your mind all the actly what you want, that when
of

division in its Planned Investment

cumulative effect that

Department to "make possible the
a
salesman absorbs from going
■Vy v-,'• V'-'...4
y; they think of investing money the
application of sound planning to
bell rings in their heads and it's quite some time without getting
Everything that happens, you
even the smallest
investment ac¬
have to influence, to lead that your name, and perhaps one of business. The longer he goes the
counts—from $1,000 to $50,000—
prospect over to, buying, No mat¬ the best ways to register yourself harder it is* for him to get busi¬ followed upon a survey among
ter what the subject is, if there is with them, as far as investments ness, because he begins to ques¬
small and medium investors," Mr.

time.

concerned, is to impress them,

a

point of controversy, or if you
particular agreement on a
point, you still can't get so in¬
volved that you let him take the
interview and cancel it out when

are

aredn

in

he wants to.

first place,

Persistency is the next subject.

long-term- work- on snagging a
new account.
Yoq. must be per¬

the business,
persistent that you be¬
come
a
pain
to the
account.
You've got to gauge it very care¬

sistent enough to get
but not so

have chosen it as your

is

condition

things that help you ingratiate
yourself with your accounts so
firmly that it helps you to get

mental aggressiveness.

i;;

cussion in the interview

ment

Otherwise, he will just wear you
down
too
soon.
Your physical

■

lose the sale.

You've .got to gauge your persist¬
Do you ency, as far as individual can¬
Do you. vasses "are concerned, and also

people and try to

on

course

serious question

while.
in to work?

for

on

in specific points with
customer but at the same

engage

your

sales character.

point is the attitude of
salesman toward his work. Sup¬

ficiently detached perspective on
what is transpiring so that you
can

everything you've got in the book. looking at things on your cus¬
Otherwise, what's the good of go¬ tomer's desk. : Don't do it. Whfeh
ing?
There is no use at all in you come in to sit down, fix your
a
solicitation, and chair in such a way that you can't
It is necessary that a salesman making half
that is frequently what is done. A see what is on his desk. That may
keep in good health. In the first
lot of people go in and talk a little be just the one thing that will
place, people want to do business
about this and that,
in a very cause him to want to get rid of
with
a
healthy
person.
They
weak way, and what they expect you fast.
;
don't want to do business with a
to accomplish I don't know.
So, check yourself constantly
If
cadaverous individual who is go¬
you are going to go in and try against things like that. What are
ing to kick off next week during
to get a bit of business, say to your characteristics?
Maybe you
the
course
of an important in¬
yourself, "I'm going to give this can even ask your friend, or per¬
vestment transaction, so try to
buyer everything I've got in the haps you could ask your wife.
look as if you are going to live a
book."
Don't be nervous or do anything
in to get

Himself

How the Salesman Should
(Continued from page 23)

Thursday, October 6, 1949

FINANCIAL CHRONICLE

&

COMMERCIAL

.diplomatic way,
know your finance.
very

you

a

tion himself and his own methods,

sb
you've got to have enough
long^tejftn confidence in yourself
There is a wrong way to use and what you are selling, and the
great deal of knowledge. In the house you are working for to be
a

if

t

that

shark in
all this business, don't use it to
win the little, petty arguments. It
won't do you any good that way.
We
have covered that already,
but don't use it, either to flaunt
your superior knowledge arourjd
everywhere you go.
That turns
people against you.
Use all this
information you have at the right
you are

a

-

able

take

to

day,

one

sales, and still
are selling

days of no

three

two days,
.

realize that what you

okay and that you, yourself,
are okay.
There, again, it is part
is

of

adjustment to the work.

your

As yoq talk to

continually

customers, don't

force

them.

Some

salesmen have that habit of forc¬

Harding
done

to

said.
The survey, was
during the summer mohths

ascertain whether there was a

and

need

service.

.for ■ such, a
market research,
its kind

demand
The

believed to be the first of

based
practice of the

financial field,, was

in

the

on

the established

consumer-goods industries to pre¬

the poten¬
product

determine by surveys
tial
"The

market

for

a

new

survey," Mr. Harding con¬

tinued, "disclosed a broad' interest
in
the
new
service*
We
also

ing their prospects. It's no good. learned how to adapt; policies and
time and in the right place.
!
Let up on the buyer.
:
procedures -which
have -proved
The next point is that if you
attitude toward fully.
::; 'V
V;
Try for a closing if you can successful in the management of
are going to sell anything success¬
make it. If you can't make it, let
your job is going to determine to
"Don"t Be a Pest!"
the firm's large, investment ac¬
fully you've got to work. You've
a
certain extent the success of
up for a little bit and work on
Don't be a pest, but don't give
counts to the needs of the small
got to pay the price of success by him some
your work.
If your attitude is
more, but don't con¬
investor." 'si-PPP•}'.''■
up too
soon.
Lots of sales are working hard. Now, I don't know
wrong, it is going to be spotted
tinually force him.
\
made on the fifth or sixth or 20th what
The services of the Planned In¬
you men consider hard work
by your associates and by your
Now,the subject of sales barriers
call. I was talking with a sales in
vestment Department to the. in¬
your business.
customers, and you are not going
that a salesman unwittingly, un¬
manager a while ago and he said
vestor, Mr. Harding said,- meet
to get along well.
Selling Work Is Hard V^U intentionally, sets up against him¬ his four
that they worked on an account
principal problems,
■! Most of the people who get
self. There are certain things that
for 10 years before they finally
Everyone has his own interpre¬
namely:
fired from their jobs don't get
you

life's work and you've got to

it, because

can't

they

do

the

They get fired because of
character weaknesses, hecause of
their attitudes toward their work.

Try to think of some of the peo¬

ple who have been let out of your
organization and
ask yourself,
"Well, why was that fellow dis¬
missed?" It certainly was not be¬
cause
he couldn't do the work,

worked there
and he had done

because he probably
for five

years,

her.

But

got

fired,

in
at

satisfactory mamthe same time, he

a

usually

and

Hred

because of

tude

toward

he

gets

the wrong atti¬

his

work.

He was

lazy, or indifferent, or shiftless, or
something Uke that, so that this
factor of how you regard your

to a great de¬
whether you are going to be
successful in the work, and re¬
garded as successful by your su¬
periors and by your customers.

Work determines
gree

*

.

..

work.

his work

•

your

because

fired

like

•

■

■

"Control That Interview"

salesmen
inadvertently do that
of what work means, but
makes customers turn away from
selling work is hard. It does not
them. In psychology, it is the dif¬
mean
sistence, and gauge it correctly.
coming in and sitting at ference between the adidem drive
Your
personal
appearance: your desk and waiting for some¬
and avoidance reaction. Let's say
When I look out in front of me,
body to call you up, or waiting
that you are sitting at home, in
I arrive at the conclusion that it
for something to happen.
That
your arm chair1 and
the kitten
isn't
necessary
to spend much certainly is not work.
comes
alongside your chair and
time about personal appearance,
Selling work is creative, con¬
you reach down and stroke the
as. far as you gentlemen are con¬ tacting people, talking with peo¬
kitten.
As
you
do,
the kitten
cerned.
Just bear in mind this ple, trying to get things done.
.•
moves
closer against your arm.
There is also another angle to
fact, that from the time ypu are
He wants you, to continue.;. He
in
the
this business of work.
We have

got that account.
Be aware of the factor of per¬

presence

everything

said

of. your

and

buyer

everything

been talking about overall work.

in

Now, let's think just for a minute
of work during the course qf one

determining point
whether, he is going to buy
seen

is

a

or

is something
about your personal appearance
that doesn't hit that man right, or
if it detracts from, his attention;
then you
should do, something
not

If there

buy.

old Bostonian, I lean
toward thq conservative side in
dress, and, L think as far as selling
is concerned that I may be right.
If you go overboard in your dress
while you are selling, your taste
an

point is the control might not hit your prospect right,
perspective during the whereas, if you are conservative
it won't hurt anyone one way or
course of an interview, while you
the other.Ilf you dress too loudly,
are in theie talking, ? You have
it might distract; attention either
got tq be able to control that in¬
terview from the beginning to the cme way or the other from your
The

of

next

your

"

close.

Yon must maintain a




suf¬

"

After all, that's where

interview.

really work. That is when
productive • work/ begins,
when you start talking to a per¬

you

your

the telephone, or
How much work do
you really put in when you are
trying to make a sale?
Every
time you make a call you-should.
make a complete, canvass.don't
you've
already - predeter¬
mined in your own mind that you

son

in

about your appearance..

Beipg

tation

either

over

person.

are

not

going to sell anything:

what. is. the

use

of doing it?

^

likes

it,

a

pleasing

reaction,

an

adidem drive.
On the other hand,
the

kitten,

avoids

you.

if you pinch

he runs away.
He
Avoidance . reaction.

He does not like it.

P?

>

Everything you say or do dur¬

ing
two

a

sales solicitation has one of
It draws the person

(1) Determination
vestment

of

the in¬

objectives.

(2) Decision on the broad

poli¬

attain the
objectives, such as the types, of
securities and the timing of their

cies to be followed to

,.. • '
•• • •
.... j
(3)' Selection of specific securi¬

purchase.

ties best suited to

the

objectives.)

(4) Analysis- of development
affecting security values so that
appropriate changes inholdinj
will be made when warranted.

Charles Springer

J^|i

E. H. Rollins, Chicago

effects.

CHICAGO, ILL. — Cha r 1 es;
or. he reacts away Springer has joined E* H. Rollins;
trying to avoid you.
& Sons; Inc.;-. in the municipal,
.Now, that, is very important, so department of the firm's- Chicago'
^do "not unwittingly set up barriers
office;* 135 Sottth- La; Salle Street.j
that will drive, your
customers
Mr. Springer has beem in- the
away from, you,7 -We have talked
investment field for thq past. 21
about some of. these barriers al¬
So,
No ready; *-being toor long - winded, years and was recently wit*
towards

you,

from you,

your.head, picking your Francis I. duPont & Co.* and pre
rteeth, buttoning and unbuttoning
viously has been withMei
time,
••
-<•
1'n?i' your clothes, opening and closing,
Lynch, Pierce, Fenner & Beane
If you are going to go up to books continually, beip& neryoiw
the
chair, jumping afbtma* for eight years.
make a sale, give him the works, in

use.

and

You have

you

wasted

have wasted

his time;* scratching

your

Volume

170

Number 4844

THE

COMMERCIAL

CHRONICLE

FINANCIAL

&

(1373)

when the costs of what

(Continued from page 2)
countries have set up im¬
port
restrictions
and
exchange

country. The country's economic
problems
probably
cannot
be

controls.

provided by oil. Yet the absence

Their

Obviously this hindrance

to sales reduces the

make

willingness to

of

not used

are

cases
simply as an aid to
rationing of petroleum or the

conservation
tain

disadvantage

a

foreign

example,

nies

cer¬

com¬

companies.

American

unable

are

In

operation of ex¬
places American

control

companies at
pared
with
For

dollars.

the

cases

change

of

compa¬

sell

to

oil

for

sterling today.
Some
countries,
though unable or unwilling to pay
dollars for petroleum, would be
able and willing to pay American
companies in sterling. We on our
side would be willing to accept
sterling
payment
provided
we
were
able to put these funds to
We

use.

do

believe that per¬

not

mitting

us

would

occasion

dollar drain
We

dom.

sterling
important

to operate

in

any

the United

on

hope

the

that

King¬

current

prevents develop¬
resources.

In contrast with such

genwernen

you

current

oie

dian

oil

of

aware

development of Cana¬

resources

terprise.

situation,

a

ail

are

Imperial

by private en¬
Oil
Limited,

affiliate in that country, spent

our

million

$20

over

oil. But oil
rial

before

found

was

and

contemplates

now

finding

an

Impe¬
addi¬

to

develop

been

located.

will be

development

economy.

the two most im¬
portant deterrents to Jersey's in¬
summary,

vestment

abroad

nowadays

are:

first, increasing difficulty in trad¬
ing among nations which arises
from restrictions

convertibility
currencies, and second, the na¬

of

on

work out with

in

oil

companies
British

the

tion to

can

government

1

;

other

the

oil

ing

Question
will

consider

ments

in

be

may

Board

continuity of government
so
completely broken

that contracts

entered

government

gated under
whether

a

into

under

be

abro¬

may

succeeding one,

there

or

be danger of
expropriation.
;;

actual
To

Risk

our

studying invest¬
political ■ risk—

concerns

whether

one

Political

of

question

give

may

illustration, an affil¬
iate of Jersey Standard had beep
active in Hungary since 1934. It
discovered and produced the only
petroleum ever found in commer¬
cial quantities in that country. It
paid substantial royalties to the
Hungarian
government.
During
the war the property was severely
damaged. Last year our affiliate
was expropriated by the Commu¬
nist
government
of
Hungary,
which tried to justify its action
by false accusations. At the time
of the seizure of our properties,
an

affiliate

this

amounts

with

$20,000,000

but

not

dividends from its

invest¬

might be the fixing by

unrealistic

price

wage

or

part

living

standards offer
where investments

to

as

inclined

is

where it
this

is most welcome.

in

invest

to

where

passing

mean

may

chance

investment

make

to

Often

the

up

country

a

exchange problems
where

taxes

where

respect to the latter, we all know

government attempting to
increase
its
revenue
by higher
a

and

higher
its

decrease

arise

revenue

upon

levied.

are

burdens

The

actually
by weaken¬

may

enterprises

the

ing

taxes

taxes

from

which

*

I

refer

ideological

to

is

mate

are

is

favorable

more

to

capi¬

tal investment.

Where Shall We Get the Money?
Even

when

investment

an

op¬

portunity, whether domestic or
loreign, looks good, there is still
the question: Where shall we get
the

money?

As you
avenues

It

to

open

sell

can

several

are

corporation

a

have

time

needed.
used

its

assets.

earnings.

It

We

no

the

at

of

some

retained

use

can

all

when

Since

the

the

money

war

we

is

have

these methods. In recent

when the oil industry has

been

level

favorable

a

of

earn¬

ings. These earnings have helped
productivity and employment. In
addition to reinvesting earnings,

provided four-fifths of the private
investment made by American in¬
terests abroad last
one
we

may

causes,

or

year—totalling

and one-half billion dollars—
disturbed

are

by the

worsen¬

ing of the investment climate in

countries.

that such factors

It
as

seems

to

us

the inconver¬

ment.

they will obviously discourage in¬
vestment. Also, such burdens may

Speaking
specifically

actually in existence

controls

taxes

and

but
case,

bur¬
may

wholly prevent investment, it

certainly

will act

factor.

retarding

i

Then

a

is

the

problem

monopoly.

Some

of

of

the nations of Latin America fur¬

nish
the

oilmen, we are
concerned
by
the
world-wide problems of "dollar"
oil and "sterling" oil. We know
that part of the solution is up to
us,

illustrations.

government

For

may

example,

forbid pri¬
explore

but the final solution can only
with the cooperation of the

involved.

governments
solution

does

not

If

this

provide

full protection to

We feel that

by

the

U.

actions

gently

salutary action

some

S.

Government

is

ur¬

if

needed

companies like
ours are going to be able to con¬
tinue foreign investment—if other
companies are going to be at¬
tracted

to

to

needed

a

great

discouraging prospect in¬
deed. We strongly support a U. S.
Government

policy

which will
private investment

of

American

funds

expan¬

normal

of

similar

oil

work

situation

companies.

on

the

omy,

ing
in

be

to

Jersey

as

Standard

an

upward trend far
Under

future.

this

cir¬

Jersey Standard and its af¬
continue invest¬

on a very substantial scale
productive facilities here and

We believe that such in¬

overseas.

faced

will

vestment

Materials

to

be

of

real

benefit

society.

prices
high. Yet the industry felt
obliged to embark on major capi¬

were

tal

projects
To

wants.

to

meet

have

Meissner Asst. Cashier

consumers'

deferred

BROOKLYN, N. Y.—Arthur W.

invest¬

Spolander, President of The Peo¬

ment in the hope of lower

would

prices
imposed hardship on

have

ple's National Bank of Brooklyn,
rectors had

Finally,
have said

let

earlier

what

repeat

me

Meissner has been with the bank.

continuing

a

—

appointed Jeromus E.
Meissner, Assistant Cashier.
Mr.

I

flow of investment funds is basic

health

to

the

is

vital

that the Board of Di¬

announced

consumers.

to

of

our

It

economy.

employment,

23

years,

America

in

that

serving in various

produc¬

Stephens Retires

have

we

BEVERLY

proved that the system of private
many

and

economy,

initiative,

from

HILLS,

CALIF.—

Stephens

firm

of

Daniel

30.

Stock

re¬

retired

partnership in the New York

Reeves & Co. on Sept.

judgment,

and

offering the incentive of

E.

Raymond

providing
different centers of imagi¬

nation,

Exchange

and
.

decision

our

invest¬

concerning

"no."

If

could

it

would not be the

•

>k\

i

i

t

.

.

,

.'

.i

.

,

of NEW YORK

be, investment
complex subject

affecting

Avhich

the

investor

has

by *othdr

■v«

no

OF

decision

investment

is

taken

change in a way that is en¬
tirely unforseeable. In such cir¬
cumstances, an investment may
may

in

CONDITION

com¬

business.

depressing

STATEMENT

CONDENSED

investments

September 30,1949

wars, changes in tax rates,
imposition
of
controls
which
while
perhaps well-intentioned,
may have the result of actually

RESOURCES
Cash and Due from Banks

$113,117,907.38

U. S. Government Securities

(includes $12,577,000 pledged to
and trust

•

.

.

secure

.

.

.

deposits, etc.)

State and Municipal Securities

.

.

.

.

•

Other Securities

.

•

.

•

.

.

.

Loans and Discounts

.

.

•

.

.

.

.

I should like
emphasize that the profit ex¬

pected from an investment cannot

precisely known in advance.
instances, an investment

some

may

.

was

Banking Houses
Other Assets.

•

expected,

1,084,051.13
225,569.17

«•«««•*•

$513,408,102.06

be less than
longer in arriving.

or

660,000.00
2,294,306.85

......

Accrued Interest Receivable

anticipated. In oth¬

the return

512,542.03

.

.

turn out to be more profit¬

able than
ers,

7,571,943.52

.

Stock of the Federal Reserve Bank

Ej

In this connection,

be

18,855,379.33

148,752,856.64

Customers'Liability for Acceptances.

In

220,333,546.01

public

loss.

Profits Are Uncertain

to

;

Main
Office, 37 Broad Street

control—actions

result

.

AND TRUST COMPANY

Naturaily,
we
try
to
make
every investment a good one. But
being human, we sometimes make
mistakes. Further, there are con¬
over

;

or

that it is.

ditions

.

The Public National Bank

an¬

may

LIABILITIES

In still

others, the investment may
prove to be a losing proposition.
A successful investment policy is
one

on

which

under

losses

sustain

the whole.

Plainly,

we

but

a

company

make

can

Capital

••«•••••

•

Surplus.

.

.

.

...

.

.

;

$9,625,000.00
12,375,000.00
22,000,000.00

profit

a

* Undivided

Profits

.

.

.

.

8,853,981.61

$30,853,981.61

should like nothing

better than to be able to read the

Dividend

future

275,000.00

Unearned Discount

clearly that every

so

in¬

possible

greatest

stockholders, our
employees,
and

Payable Oct 3,1949

932,933.71

realistic.

not

only to the "where" of

investment

but

"when."

should

better

We

than

to

it will strike

words,

at

tive

minimize

American
abroad

for, or produce, petroleum in the

realize,

hard blow against

private

and.
one

as

you

investment
gentlemen

of the most important

would

also

periods when

buy

the most

to

like

make

ment at

a

Less: Own in Portfolio

Deposits

our

.

5,133,280.68

$1,923,228.29
624,929.40

1,298,298.89

«.«»*.

•

•

•

•

.

340,087.77

•

475,247,888.89
$513,408,102.06

Profits
ment

$1,500,000.00 transferred in March, 1949, from
as

a

Plan)

Undivided

for such purposes (including Employee Retire¬
Directors may from time to time authorize.

reserve

as

the

nothing
invest¬

MEMBER: N. Y. CLEARING HOUSE

ASSOCIATION

FEDERAL RESERVE SYSTEM

,

our money
—

in other

of low pricelevels. Under the profit system,
managements have every incen¬
to

Acceptances.......

♦Reflects

The matter of careful study re¬

lates

*Reserved for Interest,Taxes, Contingencies

Other Liabilities

times

capital

outlays

ca¬

pacities.

tion, and the creation of purchas¬
ing power. It is my earnest con¬

techniques.
Upon the assessment by Jersey
Standard's Board of the many fac¬
tors I have mentioned depends on

is

filiates expect to

hard to get then, and

were

competitive

presents

now

very

abroad

A

which

and

for
the

backlog

by far the
investment

assure

cumstance, and while we continue
to operate in a free private econ¬

investments

of

far

continue
into

to

and

care

to

concerned, I can say that we be¬
lieve that people's use of oil will

growth in civilian demand. Thus,
at the end of the war, there was

viction

which

encourage

take

policy of foreign in¬
is
so
badly

a

vestment

American com¬
panies but results in substantial
losses in their foreign business,

vate business concerns to




as

come

final

there

government

as

such

benefit of our
customers, our
society
as
a
whole. But in this world, risk is
inevitable.
It
is, perhaps, what
makes
life
human.
By careful
study, we do our best to mini¬
mize risk, but to think we could
eliminate it entirely would be un¬

through. In either case, however,

densome

that

normal

replacement

sion

able

not

were

is

success,

vestment decision would be to the

—

parent) solutions to economic dif¬
which a nation is going

not

know

greatly increase our inter¬
est in putting money to work in
other countries, to the benefit not
only of those nations but our own.

particu¬

of currencies

ficulties

be

We
would

larly the pound sterling—and the

tibility

growth of restrictive controls on
private
enterprise are
steadily
working against private invest¬

not

abroad.
This
would
help
to
strengthen friendly nations and to
their social and political

the

world, an important
factor in providing the enormous
amounts of capital required has
over

undertake

American

investment

So

foresee,
control,

no

Jersey Standard and

war

affiliates

for

has

for
way

flow.

factors

company cannot

it

low.

are

many

into play. For example, dur¬

come

ing the
its

again,

which

over

other

had to meet tremendous demands
all

or

and

such costs

here
a

done.

private

high

are

panies,

know, there

seeking funds. It can use equity
financing or issue notes or bonds.

many

they may be expedients adopted
as apparent (and I emphasize ap¬

merely threatened. In this
although the possibility of

and

ally each question cannot be
swered
by a straight "yes"

nationalism

or

rampant. Instead, we will pick a
nation where the economic cli¬

As members of an industry that

that

arrangements

government

too

complex,

high,

profit; import or

a

for

ment of stockholders' funds. Usu¬

export barriers; high taxes. With

operate at

is

this

too

are

however, we have issued notes
and bonds, and increased our out¬
standing stock, and sold assets.

levels, thus making it impossible
to

best

But

which

others to insure fair treatment for

a

will be made. Our Board, like the
board
of any U.
S. enterprise,

years,

vestment unattractive. Such

of

the

between

One

program.

an

question
will
be
whether a particular nation, even
though it does not break contracts
nor
seize property, may impose
so many burdens and restrictions
upon an enterprise as to make in¬

law

of

Four"

under

choose the method most desirable

pro¬

Another

measures

"Point

suggested

rigid idea about how our
company should be financed, but

' :

ments.

the

been

of

duced—and had taken only $206,000 in

have

ones

the

value

including

not

—

discovered

crude

capital.

We believe
that in our company we have able
men who make as good forecasts
as
any
that can be made. But
the conditions existing at the time

invested

had

book

a

take

business.

their

choices

Another

foreigners to

Countries in the process of rais¬

solu¬

a

these problems.

investment

opinion, other actions by

our

the United States Government can
aid in improving the foreign in¬
vestment
climate.
Many
good

have

This

great contribution to the

a

Canadian
In

find.

reserves

Already substantial

its

or

which

on

through the outward flow

American
In

best

position

problems.

amount

American

basis

a

of

that

lish

of

the

lessen

tionalistic tendency of some gov¬
ernments not to allow Americans

discussions

is

areas

tional investment of several times

financial aspects of oil will estab¬

intergovernmental

balancing

ward

maximize

buy

them when

between the dollar and non-dollar

atmosphere healthy to free

an

ment of its oil

all

the

without the liquid energy

investment

investments."

Exchange controls
in

solved

of

means

they have

to

Deterrents to American Foreign Investment

25

FEDERAL DEPOSIT INSURANCE CORPORATION

25 Offices Located

Throughout Greater New York

'26

panded to where it is almost twice
what
it
was
pre-war.
At the

Gloomy Foreign Trade Prospects
iy25, the large potash ore
reserve
we
now
have was dis¬
covered in New Mexico and since
that date the domestic industry
nas been
developed. Even at the

ope. In

(Continued from page 5)
credits

-dollar

had

not

al¬

been

lowed, the foreign nations would
have

not

beerv-aple to buy our

goods at the raw which they did.
for

war

aid

to

or

in

the

would

ations

foreign trade
this artificially
.supported atmosphere for many
years and if in considering ''nor¬
mal"
we
think of a period
of
world peace,

vhat

have

In

considering the possiomties
foreign trade, we must
start with the first basic princi¬

That is

troubles

of the

one

in

today and the reason we hear so '
much about the dollar shortage.
nations

Other

and

need

want

to

we

unionization

projects.

Also,

socialization
aftermaths
much

of

higher

rates

production

The

of

costs

getting for
example of

and
is

producers

an

..Likewise, we have built nitro¬
plants in this country for the

fixation
that

of

nitrogen from air so
no
longer require
quantities of nitrogen

will

we

large

as

their

from the rest of the world. Under

are,
therefore,
heavily
burdened
with high taxes and

have

other industries
expanded and with

of

pressure

war,

been

governmental charges which sup¬
the stimulas of
port these social projects. There
businesses have
Is no longer cheap labor in Eur- I
with }■ pre-war,
jand that, together with ,the taxes
#nd government assessments is
making their production costs un¬
usually high. One industrialist in
[Belgium told me this Summer,
Jfor example, that he had to pay
il8% wage tax on his labor bill
for social security, and that the
compared

as

workers

themselves'had

to

I

pay

another 8%, or a total of 26% for

the

United

much

made

States

greater

in

progress

has

manufacturer

forced to

vices

been

attractive

fore.

market

cheap

New

you
perhaps hear
I do, foreigners
United States and
upon
their
arrival,
prices seem to them

Chicago.

here do seem cheap and
cheap to many people coming
from other lands, even though
you and I are somewhat surprised
to hear it.
This trend toward

ficiency is all
ment

and

a

our

self-suf¬

natural develop¬

one

own

be

•the

inter-nation

again recaptured it.
course, certain spe¬
cialties, craftmanship articles, etc.,
Which we will always need and
:buy from abroad; also certain

be

to

expected*

materials;

but

the
as

point

this

I

coun¬

try has grown, it has become less

[dependent

foreign trade. Any
department
store -in
our
on

[cities imported
centage of the
[carried two

or

a sizeable per¬
merchandise « it

three decades ago,
imports have been

pride in one's

own

coun¬

try is entirely objectionable. Each
country
should
make
all
the
things it can advantageously, us¬
ing its
its

own

employing

resources,

people and developing its
technique. If one thing can

own

better

made

part

one

of

and

cheaper in
world, or if a

the

country has raw materials an¬
other country does not have, in-

Danger

never

twould make is that

trade

will

of Tariff

follow.

Changes

There is much discussion today
about our removing some tariffs
as a stimulus to foreign trade. It is
just not possible to take off long
imposed' duties without hurting

our own

invested

and
plants built with
protection as well as jobs
may<be destroyed by hurried and

such

,

ill-considered
I

do not

tariff

mean

to

changes.
say

that for¬

eign trade is dying. We will al¬
ways
have much foreign trade,
but the point I would make is
that
these
changed
conditions

im¬

have been such that I believe the

import-export business of
this
country in the future will be less

until

is

it

most

[below 1%.
Take

as

an

example

one

portant
(Use

swhich I

the

;little

am

familiar. At the time

First

or

no

World

potash

[this country
.

used

was

and

War,

we

had

production in

almost

all

that

imported fiom Eur¬




well to guide his

do

developments more toward

future

business here
Now

it

at home.

is

realized, of course,
too, much Nationalism and

that

lack

of

friendly trade can be un¬
and
dangerous.
Aiso,

desirable

agreements and high tariff
are unhealthy when car¬

trade

barriers
ried

has

United

The

far.

too

assumed

position

new

a

States

than

before.

be true after
away

have
think

dollar
in

That

will

especially
the relief and give¬
programs

operation

the

of

leadership in world affairs and we
are
doing everything possible to
help get world commerce moving
toward
normal
again.
No one
would like to predict a failure or

in my opinion, plan

realistic and
for

be

must

businessmen

American

but

efforts,

such

discourage

markets.
There

interest

much

is

often

most

in

the

Recovery Pro¬

the ERP or ECA as we

gram, or

it called abroad.

hear

undoubtedly the most altru¬

istic, unselfish, magnanimous give¬
away plan any nation in history
has ever carried out. In traveling
through Europe, it is thrilling to
American

an

to

how

see

our

ex¬

this
help
is
applied
restoring homes, factories

tending
toward

building up the economies of
countries. I had opportunity

and

the

operations in

to observe its

many

countries this summer. There are

capable personnel in the ECA
organizations and I was impressed
with
the good
they are doing.
Some returning American
busi¬
nessmen
have referred to there
being

[many

too

bureaucrats
and say we should

abroad in ECA
have

businessmen

more

the

on

job. I would wager, however, if
they were to undertake that as¬

signment

try.

are

have

well

like

about

staff

a

there.

is

there

where

The program

planned and controls

American

we

There

of course, mistakes being
made; but as a whole, from the
observation of one traveling busi¬
I would say our ECA is
being well operated.

nessman,

The purpose
gram,

you

as

of this present pro¬
know, is to aid in
and

reconstruction
lishment of

I would say we

the

us.

If

have been some¬
planning

over-ambitious in

what

build

to

with

and

criticize the operation

to

were

among

commerce

various countries
I

re-estab-

the

their industries and

up

efficiencies at the rates and in the

We

established. '

now

manner

should

recall, however, that in
the
beginning,
the
"Marshall
Plan" as it was first called, was
established on a trial basis, de¬

this
they
will have much greater tonnages
beyond

in

sell

to

reason,

world

the

of

because

years

fair

not fear

does

competition from the

facturers
makes
mass

of

manu¬

countries.

other

products

who

producer

abroad

goods

quality,

high

of

He

produced, well packaged, to
cheaply, and he gives good

delivery

performance

service. He

competition.

socialized

where

good

and

hold his markets

can

fair

against

But

industries

have

been

greatly expanded by aid
from their governments and later
have to sell this large production

against American firms, they
resort

or

socialized govern¬
depending on votes from

dumping.
ment

The

industrial

one

subsidies

unfair

to

may

in

self

to

rather

than

such

approve

those

see

impaired

and

I

think

there.

be

would

office

likely

sustain

to

area

manufacturers

it¬

most

methods
industries

unemployment
many
American
,

[can

expect,

to

extent, to meet this situa¬
tion in the years ahead.

large

and had charge of a
mining
plant
employing

many

people.

lesson.

I

there

If

There has just occurred a gen¬
eral

devaluation

eign

currencies.

these

several

of

for¬

Devaluation

in

monies

relation

of
the

to

the

lowers

ly

their
It

dollars and corresponding¬

our

is

drastic

a

the

of

buying

One
who

France

of

areas.

their prices

in

cut

they sell to dollar
manufacturer
in

goods

people.

power

the dollar

in

money

complained

to me
high and
for that reason he was unable,
today, to sell in the United States,
hopefully stated that if the dollarfranc-exchange
was
raised
to
380, he would then be able to
sell his goods in the U. S. That
is
true
of
many
manufactured
his

that

cost

items and
land and
and

spurt

materials

in

Eng¬

the Continent today,

because

valuation

too

was

raw

on

of

this

de¬

general

will

there

follow

in foreign trade. Such

a

ad¬

The

again

and

the

Many

own
more

the

Of

course

desire

businessmen

business

difficult

markets

make

of

hurt

and

will

for

them

to

aid,
have
very

their

is

been

production

now

can

one

of

in

them

can

our

build

understand

ECA represen¬

up

any

industry

those, countries to
self-sustaining.

more

business

for
likelihood

no

foreseeable

that it will end in the

When

American busi¬

an

actually

nessman

Germany

sees

and talks to our military
civil representatives there, he

today
and

feeling of that commitment
sobering than in any
other way.
A look at the "Iron
Curtain" also adds to the feeling
about our holding the line in Ger¬
gets

a

that is more

'
I visited a potash
north border of
the U. S. Zone in Germany. - The

many.

month,

Last

mine at the very

tends -over

line

district there ex¬

mining

potash

many

the

between

Russian
it.

the plan
When I

inspected
boundary.

and

surface

right through

property of the mine
went underground and

I

where

miles and the
American and

cuts

zones

The

•

is

along
to

came

the
the

for lunch

started

we

that day, the German mine mana¬

pointed out this boundary and
the build¬

ger

the red flags flying on

that

ings in

desire to

ly

the line

close¬

more

asked what * I
do about it, I suggested
he

when

and

I expressed a

area.

see

wanted to

drive toward the frontier

we

until

we were

sian

guards

stopped by the Rus¬

I wanted ,to *see
like. He took me
his property to a point
as

what they were
down past

where the

road, which paralleled
up
to the (line.
a
bridge over this
creek
and
as
we
approached *T
could
see toe
g uards
on [the
bridge. The line was marked by
a
fence and we stopped our car,

a

creek,

There

came

was

got out, walked up to this fence
As we did, to

and looked over iL

-surprise the guards on ' the
bridge -came running at double
time
and, [slinging
their guns
from
their
shoulders,
leveled
them
at
us ;4n
firing
position

our

andyelled £ "Go
will shoot."

It

or

away

we

impressive to
me that
in a time of peace, just
to walk up to the line and look
would bring a threat against one's
life.
Needless to say, we did go
was

The incident has probably
reported to Moscow.
should recognize that if it

away.

been
We

of peace,

hold

this

for

not

were

kind

so-called

and the commitment to
in

line

our

Germany,

we

would not be in Europe as we are

ECA

The

today.

aid

to

set up with a definite

was

established in

nation

Europe
termi¬

1952.

much good has been done,

While

it is.my

opinion we should start now and
continue to lessen the outlay
a

view toward getting out,

for

commitment

our

in

There is much

that time.

with

except

Germany;

talk

today of the need to
continue beyond
1952 and there
will be great pressure to keep 'it
Europe

tries.

especially in some coun
The need for relief in some

areas'

will, of

going,

exist after

course,

this program and America will, as
it has in the past, always continue
meet

to

its

responsibility in that

f

respect.

;;

being envis¬
aged to help give Europe needed
capital goods is that of setting up
some
plan to make it attractive

ECA

hold

had

war-damaged
plants
rebuilt, which is all

has

way

is

There

example.

reestablised
but
expanded to great proportions, it
will only serve to unbalance the
previous conditions and former
trade. Likewise, the shortage of
dollars which basically is caused
by the fact that America is not
buying
the
foreign - produced
goods which they would like to
have us buy, puts pressure on our

it

good, but in addition, their

to

extent that their former

in 'the
past. I can cite two examples in
my
own company. First, in >the
potash industry in France. Pro¬
duction of potash there before the
war
was
400,000 to 500,000 tons
per year. Largely with our dollar
they -have

sound

But, where it is done to such an

our

their

make

The

ahead. Take our mili¬

tary commitment in Germany,

in

they

activities

made, those two factors will
undoubtedly
be
dominant
for

been

at

S. Business

have

Europe

where the
is impeded.

price their goods down is to
efficiency of produc¬
tion and have lowered labor, taxes
and other charges.
the

American

found

in

goods

result.

same

tatives

have

While

increase the

ours.

How ECA Hurts U.

shown by recent
Italy and Germany.
much
good progress has
in

elections

to

accustomed to one
living and one way of
working that is quite different

from

of

It has been done before and with

of

way

prices to

movement

long been

so

raise

one

living

in

learned

by

was

working abroad, it was that one
cannot expect to make too rapid
and extensive changes in coun¬
tries and with peoples that have

well known that
Communism has

It is also
spread of

the

that

Effects

Devaluation

the up-trend of other costs.
loading of costs and high
labor charges can in a short time

few years

of

have,

been the main compelling
items in our foreign plans.
Now
the
threat
of
immediate
war
seems much less than a few years

course,

some

mands for labor which is followed

a

Another War

Communism

of

spread

future.

American

The

sell

than

market

before.

ever

I lived in South America for

ago,

A

success.

Fear of

The fear of another war and the

many years

later

expansion

number of years

mate

normal trade.

more

In

the cooperation of
the
participating
nations
and
with some question as to its ulti¬
upon

of

phosphate mines of North Africa
for rebuilding
and modernizing.
Large gifts are now also planned
for the
development of potash
production in the Red Sea area.

justments, however, are often of
temporary value. The costs and
prices within a nation which de¬
values usually rise and inflation¬
ary reaction results in higher de¬

pendent

of this

some

been lessened, as

of

are,

While

areas.

be helpful, it is all further
destroying the established lines

may

ago.

headquarters
that
reasonable and workable.

seem

dollar

ket, millions have been given to
the
competing
French - owned

dollarYaises the purchasing power

now

industrialist

phosphate industry,
selLjn the world mar¬

have been established at the var¬

finished. I

we

,

personnel

recruit

and

end

seems

*

Also in the

this country, they would in

from
the

they will further expand another
50%, mainly by modernizing and
getting the latest American ma¬
chinery which we have developed
in- the potash, mines in this coun¬

sells

present European

It is

present time, more millions have
been
granted the industry and

future with lessened export

a

aid

often

today its

foreign

on

Dollars already

economy.

raw material which we
in large quantities and with

ibut

[lessened

.we

or' in

are

and at such prices that
foreign-produced goods are
no longer attractive ,to American
buyers. You will recall at the end
qf the first war how we developed

.of

be¬

as

York

quality

,

did

fact

In

frequently,
visiting the
exclaiming

[the

'large

he

as

But I don't think Nationalism and

of

dependent

ious

promptly. Our factor¬

are,

would

for, their owners will not give up
the domestic market. The foreign
seller will never again enjoy this

Sure it tends toward Nationalism!

dye industry in .this country
sand the European chemical pro¬

trade

that

intense

traw

so

for

need

ies,
therefore, produce
more
[Cheaply. 'Moreover, our country
has become steadily more selfsufficient. Many 'things we for¬
merly imported are now success¬
fully made in this country of such

[There

started

adopt labor-saving de¬

more

ducers

been

new

Prices

have

we

flhe application of new inventions
and modernizing the technique of
production. We have always had
highly paid labor and the Amer¬
ican

the

prices,

war

too

foreign goods
is now not so great. Once those
plants have been built and paid

in

U. S. Produces More Cheaply
In

that

how

social security.
;

theirs.
busi¬

gen

goods

ppe

a

were

ently to the foreign countries.

they have
of taxation.

war,

a

was

which has been lost perman¬

ness

the

of

because

and

there

about hqlf that

price

a

foreign

asking

the

of

by

this

of

at

There

socialized

because

when

War,

which

have with

we
and

World

Coast

price which we will buy in suf¬
quantities to even nearly
offset their purchases here.
In
most cases, other countries have

farther than

position

stronger

material, the
we are now selling for
$30 a ton sold for as high as $500
to $600 per ton. Also, during the
past few years, we have sold the
product to users even on the East

ficient

gone
trade

now

naving these resources and this
new
industry. During the First
shortage
product

have to offer
and they are buying them even
beyond that which they can af¬
ford. They, however, are nottoaking things and offering goods to
us that,are of a kind, quality and

ivbuy the things

much

a

regain

Our country is

market.

this

exist unless there is import busi¬
ness.

busi¬

the

again

to

producers

eign

business cannot

export

in

invested

been

The operators and our labor

who enjoy the good jobs that have
been created will not permit for¬

of future

that

potash

cheapest

built and millions of dollars

ness.

ple,

in

progress

being produced and sold
world. Our plants have

the

been

stopped.

are

is

the

farmer

in

these

after

occur

stimulants

have made steady

ican

the "normal" as re¬

would

which

American

expanded and

been

chemical industry and the Amer¬

gards export business which we
would hope to achieve is that
various

used.

we

the

time

has

importing

improving the mining practice
and refining methods. Today we
uie
able
to sell
the American

in

operated

that

we

to an end. So,

come

has

potash

business

to

expected

be

still

the

half

Since

after wars. Unless
another war, such oper¬

is

were

we

about

readjustment
there

of

War

thes^projects have been

Most of

either

World

Second

the

beginning

now

Thursday, October 6, 1949

FINANCIAL CHRONICLE

COMMERCIAL &

THE

(1374)

we

not

only

representatives

to

curtail

dollar spending and to push those

been .ex¬ i countries toward buying in non¬

Problem of Private Foreign

;

Investment

»'

One

program

for investment

ital

in

many,

plan

many

now

of

American

countries.

in the Bizone

are

is

In

area,

cap¬

Ger¬

where

responsible, some sueh
In the other

necessary.

countries, to

a

relatively small ex-

Volume

170

THE

Number 4844

tent, it might be desirable, but as
a
whole, it is unsound and un¬
workable.

The

there

not

does

is

reason

exist

Erwin Stuebner

phere which will be attractive to

(1375)

CHRONICLE

FINANCIAL

&

The

that

atmos¬

an.

COMMERCIAL

Col. Sol P. Fink In

Halsey, Stuart Case

Transfers to Chicago

Public Relations Post

(Continued from page 3)

In this way, there is
ILL.—Kidder, Pea- equilibrium of supply and demand.
capital. I mean politi¬
cally and as regards labor, taxes' body & Co., nationwide invest¬ created and maintained an orderly and continuous market¬
and governmental regulations. We ment bankers, announce That, 3Er-t
ing whereby values offered for sale are kept relatively
hear a lot about Socialism and win A. Steubner, formerly gen¬
stable. This is particularly true of securities dealers whose
the difficulties in England, but in eral partner
markets are thm, narrow and unsteady in comparison with
most all of the countries outside in the firm's

Colonel

CHICAGO,

risk

new

Committee
&

gressed

States,

and

;

it

*

to

exists

a

pro¬

office, has be¬

-

greater extent than here.. For

our.

to put guarantees on

government

capital and

provide a guar¬
antee for
recovering in dollars a
portion of the income against the
many
dangers and
obstructions
which

even

under

Would

attract

ever

hot sound.

came

o

f f i

;be

Grimm

sirable, but the controlling and
keeping relatively small is a great
undertaking. Once started it may
grow beyond reason and result in

Manager

greater dollar losses than

We need

pected.
in

our

realize

As

ever ex¬

that

the

continue

•,

extent.

Summarizing,

abnormal
recited

y-V./Vo'

I think

In

been

in

the course of my talk
will agree that tjiere is
not likely to be an early normal¬
ity in foreign trade. I don't think
that you

this

is

other

the

altogether

an

outlook.

The

more

nations

more

States.

we

With

modern

their

and

of

sees

troubles,
truly

realizes how

one

fortunate

pessimistic

one

in these

are

United

great resources,
and the

our

manufacturers,

firm

The

it

that

announced

plans

to

its

investment career

an

back To

many

have

conditions

so

dating

Stuebner

Mr.

1927,

Assistant

been

has

of

The

Sales

-,

.n

have another

of

a

Depart¬
a

new

departure

for

this

heavy

and

industrial

con

struction

company,

ac¬

cording to Mr.
Scott, w h 0

:

we

estab¬

ment is

example of bureaucratic audacity.

Col.

Col.

S.

Fink

P.

that

stated

DULCongress vest in the SEC authority to guide the busi¬

Fink

has

been

specifically

judgment of security dealers and direct when they charged with the further develop¬
shall sell or buy?
Is an investment banking house to be ment of industrial and building
ness

compelled to liquidate its existing inventory of a certain

construction.

security before it is permitted to make additional purchases?

the

Treasurer

if the

As

investment

an

Fink

implications in this revolutionary decision take

Guaranty Trust Co. of New York,
Vice-President of The Philadel¬

has

Col.

broker,

been active

in

Merritt-

Chapman & Scott's affairs for the

permanent root then, certainly, we will be fast approaching
the./end of our. private enterprise system.
phia National Co., Assistant Man¬
ager of Kidder, Peabody's Phila¬
;
This attempted circumscribing of an underwriter who
delphia
office
and
Vice-Pres¬
ide n t
of
the
Fidelity - Phila¬ buys the same securities as those already in his inventory

past several

years

tiring

his

from

Hirsch

&

Co.,

members

New York Stock

species of bureaucratic reaching for power which may
eventually have a disastrous effect on the flotation
of new issues and hence,on the flow of capital into trade

and is

now

association

re¬

with

of

the

Exchange, to de¬

delphia Trust Co. vTn'1947 he re¬

is

joined the Philadelphia office of
Kidder, Peabody as.* a--.general

well

business.

and industry.

Omnibus Corporation, and is com¬

partner.
is

Stueber

Mr.

,

-fr ff-'N-:.-NNf':

of

director

a

finest

Rohm & Haas Co. of
and for many years

has been ac¬

a

Philadelphia

and

skilled labor in the world,
possessing the greatest mar¬
kets, we can and will go ahead
to a good normal, even with less¬
ened foreign trade.
/
'M. :,

a nn ounces.

of

is,

Here
.>

present organization
and facilities in Chicago, which
were established in 1938.

the give-away programs

an

bonds.

Erwin A. Stuebner

respectively.

enlarge

United States is not big enough to
to such

-

lishment

i stant

s

also

I think

even

as

and

Manager

risk capital

new,

country, too.

own

must

we

continue

and

Scott,
Chairman,

course, true," says the opinion, "that bond
generally rising during this period, but, under
the circumstances, it cannot be asserted that Halsey trans¬
actions did not contribute to the rise in the prices of NIPS

W.
who

Hibben,

Merritt-Chapman

tions, Thomas

prices were

Joseph

of

director

Executive

A.

"It

and

the

rela¬

incthf bond market and therefore profits resulted. Admitting
this improvement, the SEC attempts to belittle its influence.

Street.

assisted by.
Willard T.

be de¬

may

judgment had Halsey suffered a loss from their
trading operations, no action would have been taken
by the Commission. It happened, however, that their trad¬
ing operations coincided with a general upward movement

.La

will

sales

public

our

Fink,

of

envision

a

of

widely used commodities and wares.

instant

135

e,

Salle

capital, is jusi

that kind

c

S outh

A controlled and smah

program of

'In

manag¬

ing partner of
the
Chicago

other "condition* .He

no

the .markets of

Philadelphia

much

.has*

P.

Scott, has also been named head

of

-

United.

*

Sol

Chairman

and

.

the

27

affairs.

interested in civic

tively

Needless to say,
for

such

an

vote

Col.

State rather than

a

time

Fink

manding

eventuality is devoutly hoped

to

is

the

also

officer

a

of

company's
director

the

of

1586th

Signal Corps Replacement Train¬

by those in official positions who favor Socialism and

the Omnipotent

full

ing

continuance of the demo¬

Center.

He

served

on

the

Mexican Border from 1912 to 1915

,

.

I

remined

am

that

about

man

he

asked

was

a

wanted

of

me

said

He

had

advice.

been

giving a lot of-thought to
where he might live and make an
interesting
and useful
life for
himself

and

plained

that

his

independent
abroad

and

had

;

might

• r

country.
in

lived

;

Knowing -1
America, he

South

MASS. — Lgmont &
Inc.i,.has been formed with
State

have

and

the

that

in

rities,
and

the

would be identical and the

same:

Go to the U. S. A.

Everywhere,
this

sume

endeavors

our

even

looks to
country and

everyone

freedom-loving

recognizes

-

more

than

to

our

.

.

,

that

we

carries

have

great

realize

us

that

although

we

are

big, there is a limit even to what
this great country can do.

f i

Executive Vice-President

Cash

Nicholas

I. C. R. AT KIN

La-/
and

Andrew J, Milslead

Investment

{Special to The Financial Chronicle)

Andrew J.
become associated

Merrill Lynch, Pierce, Fen& Beane, 23 North Pryor St.

formerly an of¬
ficer of Stockton Broome & Co.
Mr.'Milstead

was

17,605,193.29

•;/. 1,200,000.00

of the Federal Reserve Bank. *•,y>

{including Shares

Grenfell
Co. Limited and
Morgan fy Cie. Incorporated).............
Loans and Bills Purchased..

|

.Company /

Accrued Interest, Accounts

.......

.........

Receivable, etc...

13,161.487.07
194,537,715.09
2,472.689.90

3,000,000.00

Banking House

Liability of Customers on Letters
9,593,880.72

of Credit and Acceptances
H.P.DAVISON

Transfer Tax Booklet

$795,965,137.94

Vice-President

Registrar

and

Co.,

Transfer

CHARLES D. DICKEY

2

Vice-President

Rector

Street, New York City, has
announced its fiftieth anniversary
edition of its handy booklet con¬
taining the current Federal .and
State
Stock
Original Issue and

.

revised

Rates

Tax

RALPH W. GALLAGHER

Chairman Morgan & Cie.

DEVEREUX C. JOSEPHS

The booklet sets forth in digest

...

,v; -

President New York Life
c.111 sura nee Com pa ny / ;

form, the various states which im¬

par

these rates, together with the
as it applies to no
value
of

THOMAS S. LA MONT
J"*'•'/■'

booklet

is

that

contains

the

Federal

rates

GUSTA V METZMAN
President Netv York Central

it

Railroad Company

; from

This

new

to

brokers

New

York

and

Corporation
JAMES L. THOMSON

obligation.

without any cost or
7-

$717,179,681.31
8,577,943.36

Acceptances Outstanding and Letters of
y Credit

9,593,880.72

Issued..

20.000,000.00

Capital
Surplus

20:000,000.00

....

20,613,632.55

Undivided Profits...

$795 965,137.94

United States Government securities carried at $204,900,607.88, in the above
statement are pledged to qualify for fiduciary*powers, to secure

public monies

as

required' by law, and for other purposes.

Chairman finance
Committee Hartford Fire

The tax booklet has in the pas'

Transfer Co.

19,005,005.47

Chairman General Motors

New

wide
reception
among
ALBANY, N. Y.—John F. Burns found
corporation -executives
in a securities brokers,
business from offices at 74 Brook- and attorneys, and may be ob—
from
tbfe
Registrar - and
[ine Avenue.
Mr. Burns was in tained
the investment business for many

505,456,246.65

Payable, Reserve for Taxes, etc...

Official Checks Outstanding
Accounts

$192,718,429.19

ALFRED P. SLOAN, JR.

and

corporations of dual transfer agent
in

.,..

Vice-President

edition also describes

advantages

All Other

JUNIUS S. MORGAN

July 1, 1898 to date.
the

Vice-President

:

particular

A

stock.
the

Deposits: U. S. Government

Incorporated

';:v;VV.'

feature

LIABILITIES

N. D.JAY

to

will shortly engage




349,571,087.38

Municipal Bonds and Notes

of Morgan

President The B. p. Goodrich

J

/

Jersey.

JohirF. Burns to Open

in the past.

$204,820,084.49

Government Securities......

States

Other Bonds and Securities

Incorporated

JOHN L. COLLYER

facilities

years

Corporation

CHARLES S. CHEST ON

—

with
ner

Stock

President Morgan & Cie,

T//-/'

Cannon, Inc.

amount of tax

has

:

Hand and Due from Banks........

CABOT

BERNARD S. CARTER

Corcoran, Secretary. Mr. Lamont was formerly with May...&

pose

Milstead

United

and Lawrence^

New Stock Issue

on

State and
PAUL C.

^Treasurer

»-v

1949
"

-■

Vice-President

Presi-

E.

date.

GA.

vMM'#//qy- assets

President State Street
Lament,

" '

;'.V

.^HENM c ALEXANDER

are

c e r s

dent

Transfer

ATLANTA,

v /"

'

re¬

sponsibility. We must be truly
appreciative and thankful for the
role we have. But in helping let

;

President

Of-'

mont,

Nicholas

YORK

Condensed Statement of Condition September SO,

GEORGE WHITNEY

bank

as¬

share

responsibilities.
But living here and enjoying all

NEW

Chairman Executive Committee

international

of

INCORPORATED

Cltai rman

ARTHUR M. ANDERSON

vestment trust

an¬

swers

1*. '•

insurance

issues.

greatest

world,

•/ '• *"

in¬

stocks and in-,

,

N

J. P. MORGAN & CO.
R. C. LEFFiNG WELL

dustrial secu¬

had
men¬

my

the

jfo.

World Wars and has

been awarded the Legion of

DIRECTORS

public

and

road

-

for¬

•

of

in

real
estate, ' ndil-

v

opinion if that
question were to be asked of busi¬
nessmen
today in all the other
countries

Street

utility,

go

opportunity for this useful inter¬
esting life? I answered by telling
him

:

to act as deal¬

bilities. But his question was-alL:
inclusive: Where could he go in
world

at

ers

and in both

89

offices

tioned that seemed to have possi¬

the

government under which America has become

mightiest nation and its principal benefactor.

BOSTON,

Co.,

invest in and develop
some

world's

Own Inv. Firm in Boston

he

like, to

business for himself in

eign

that

cratic form of
the

He ex¬
sizeable

a

means v and

thought: he
a

family.

he

Nicholaslamont Forms

young

a

ago,>He

.year

some

question

a

by

Insurance Company

Member Federal Reserve
«

~

MOHN S. ZINSSER

Chairman Sharp & Doltme Inc.

System

Member Federal Deposit Insurance

Corporation

Merit.

We believe this Index will decline

(Continued from page 9)

compared to $211,9 billion
In order that you may
liave some prospective as to the
current level, I want to call at¬
tention to the fact that in 1941
last year.

personal income was $95 billion
and in 1939 it was $72 billion.

Thus, the 1949 rate is about three
times

the

1939 rate and

prewar

twice the 1941 rate.

over

spending last year
billion. In the
first six months of 1949, supposed
to be the recession period, con¬
sumer spending
continued at an
annual rate of $178.1 billion. We
estimate that for the year 1949
consumer spending will aggregate
$178.5 billion or approximately!
the rate that prevailed last year.
Again, in order that we may have
some prospective as to the magni¬
tude of these figures, it is inter¬
esting
to
note
that consumer
spending in 1929 was $79 billion,
in 1939 it was $67.5 billion and
in 1947 $166.9 billion.
Thus, our
1949 rate of $178 billion is over
Consumer

twice

the

1929

almost

and

rate

1939 rate, and 7%
above the 1947 rate.
our

,

to

As

would

I

employment,

ber

was

civilian
million.

million

59.411
labor

out

a

63

about

of

force

of

We

expect employment
to remain at about the 60 million

level between

and the year-

now

end although there will be minor

seasonal fluctuations. In 1948 the
average number of persons em¬

ployed

pcre
ahd

61.4 million; in 1929

was.

were 47.6 million employed
1939—45.8 million. Thus

in

ciirrent

employment

1929 and 30%

over

is

25%

up

above 1939.

Actually employment now is off
only about 3% from the very
prosperous year of 1948. Unem¬
ployment, last reported at 3.351
million in September, is not ex¬
pected to exceed 4 million at any
time this year.

'

A

.

■

i From employment we go to the
subject of wages. I would like to

attention

call

the

to

that

fact

all manufac¬
reported
at
$54.60. This is compared with the
high of last year of $55.01. In
1939: weekly wages of all manu¬
facturers were $23.86 and back in
1929' weekly wages were $25.03.
Thus, we have currently a week¬
ly wage that is about 129% higher
than that which prevailed in 1939
Weekly
turers

and

118%

that

is

1943

of

wages

last

were

above

less

1929,

than

and

one

below

1 %

the

Products

last

was

of
re¬

141

about

to

The Index

the year-end.

Wholesale

142

Prices

Ma¬

Raw

of

of

|ndex
"we

A

(1935-39=100)

expect

a

168 8,

at

slight deline to about

end

153.

about

to

In

giving you
the last reported and year-ena
ngures, you will observe that it
is our opinion that
declines in
prices of farm products, manu¬
factured products, semi-manufac¬
tured products and raw materials
will

be

small

between

and

now

the year-end.
of
wholesale

As to the over-all
commodity prices,
taking the Bureau of Labor Sta¬
tistics

Index

of

900

Series

with

last reported at 154.1,
expect a decline to about 151
by the year-end. In 1948 this In¬
dex averaged 165, the high being
1926=100

we

the low 161.0.

169.8 and
Of

great
importance
hardware manufacturer

to

the

are

the

non-ferrous metals.

of

So

far in the present year, we have

lead and zinc sell at record

seen

high

prices

have

and

witnessed

copper selling at the second high¬
est price in history. These were the

March peaks. From March to May

experienced the most precipi¬
price decline in these metals

we

tous

that

in

occurred

ever

equal
receded

an

period of time. Copper
7.50 or 33% from its high price
of 23.50.
Lead reacted 9.50 or
44%

from

its

high

of 21.50 and
zinc fell 49% from 17.50 to 90.
At the time these price declines
in severity those of all
other commodities.

exceeded

Fearing

further

price declines
in a period of adverse market
sentiih£ht, fabricators b o ug h t
sparingly and invaded invento¬
ries as the monthly figures for
metal sales in comparison with
production clearly show.
Since

in

ery

June

moderate

a

prices set in,

metal

base

recov¬

rising about 10% from its
low, lead 30% " and zinc < 11%.
Military stock piling was credited
by some for helping to arrest
the price decline, but the proba¬

copper

that

inventory
reduction had been overdone, es¬
pecially in light of present-day
are

costs.

pound

per

13

and from

cents for

lead

and

11 cents
zinc.

to

The

a small decline in the
host of living this year as com¬
pared with last year. In order
that you may have a statistical
picture as to the increase in the

of

post of living,

determined by
the Bureau of Labor Statistics,
Consumer Price Index, I would

The rest of the world has
probably suffered more inflation
than we have,
In any event, costs

like to mention that in

of

at

99.4,

in

1939

1941

the

at

105.2 and in 1944 at 125.5, as com¬

pared to the
lire
.

last reported fig-

of 168.8.

Cost of Living and Price Trends

The cpst of living discussion
leads to the matter of price trends.
I

am

going to give

you a

few fig¬

decline

inated

has already elim¬
estimated 400,000 tons

an

copper production from mar¬
ginal- mines in the United States
and

throughout the world.

Increases in
been

not

mining costs have

confined

ta

this

coun¬

try.

mining

oh

are

up

world-wide

a

have risen

-

least £0 %

at

basis

and

may

higher in Mexico
possibility
of
cheap foreign copper, lead or zinc
undermining domestic producers

and

even

Chile.

The

therefore does
as

tenable

fore..

.

a

not

to be
hereto¬

appear

position

as

7-7

A further

element of strength
present situation is stock

from the Department of Comr
merce Indexes of Whole Prices-/,of

in the

Which 1926=100. The Index of
Wholesale* Prices of Fariri Prod¬

While

ucts

metals, it is estimated that by the

ures

was

*last

reported




at

162.4

of
be

of

Purchases

serve.

are

copper

apparently being made at the rate
of 10,000 to 15,000 tons monthly.
The situation in lead was

rather

tight until very recently. The re¬
held
by ' the
Munitions
Board
is
believed
to
be quite

serve

With

believed

is

tween now

supplies now

larger

the
Exports

revert

to

in zinc is far dif¬

Last year

the government

bought some 300,000 tons of zinc
slab and a large quantity of con¬
centrate:
Having this now, it is
that zinc will be stocked

during the remainder of the

year

much lower rate than either

at a

copper or lead.
Monthly rate of
purchases for zinc will probably
be confined to 4,000 or 5 000 tons,

although in this case, as in the
others, special circumstances will
probably dictate government pol¬
icy.
Prices for copper, lead and zinc
appear to
be stabilized for the
present, the decline in prices ap¬
parently
eliminating
enough
marginal
production
to
keep
available supply
for all three
metals
in
fair
alignment with
production demands. On the other
hand, but moderate improvement
in recent demand might conceiv¬
ably cause some firming of prices.
Foreign currency devaluation is
likely to have little immediate
effect on prices since the nonferrous metal-producing countries
in the sterling area have already
raised their prices to approximate
the

level

same

lars

that

in

existed

downward

terms

prior

adjustment

.

o&

to
in

dpi*
the
ex¬

.

change rates.

I I

turn

now

farm

income.

the

to

'

;

question of

is interesting; to
note that in the first seven months

of

It

the farmer's income was

1949

slightly from

down

the

to about $12 billion.

year

that all of you men

sure

interested

construction.

in

dollar volume

The

of U. S.

con-

1.7 % for the first

sti uction was up

eight months of this year as com¬
pared to the first eight months
of last year.
Total U. S. con¬
should

struction

somewhat

rise

during the balance of the year
and, in our opinion, set a new
dollar
record
of
approximately
$19 billion for the entire year as
compared to $18.8 in 1948.
An
important factor in the increased
volume will be an approximate
25% increase in public building,
that is, schools,

hospitals and in¬
while residential and

stitutions,

business construction

briefly comment

tal

inventories

billion

have

is expected

to be somewhat lower.

Owing to

the

importance of this subject to
I am going to give you a
breakdown of some figures that

interest.

of

be

Total

new

construction the first nine months
of

this

is reported at $14.1
$13.8
year.
Here are the
types of this new construction for
the first eight months.
Taking
private construction first: in this
group we have residential nonfarm—the first eight months of
1949, $4,230 billion as compared
to $4,684 billion for the first eight
months of last year; none-resi¬
year

billion

as

billion

about

decline

a

of

$4.1 billion since the first
of the year—this is made up in
round figures by a decline of $2.5
about

billion

in

manufacturers'

inven¬

inventories and

$1

tail inventories.

We expect prac¬

tically

no

last

compared .with

billion* in

re¬

further change in total
now and the

inventories between

year-end.

The Manufacturers

New Orders Index

last reported

it to

pect

1939=100

192 and

at

advance

at the year-end.

was

we

ex¬

about

to

201

As to the

manu¬

facturers'

shipments, we would
rate of shipments to
correspond to a large degree with
the

expect

the trend of

piling

-pf -strategic 'materials.
official figures are pub¬

no

lished" for any of the

non-ferrous

'

orders.

new

Government Budget and Debt
No discussion of business

or our

economy could be complete with¬
out a brief comment on the gov¬
ernment

budget and debt.
U. S.
expenditures for the fiscal year

ending

June

mated

ai

you,

may

them. To¬
$49.6

on

now

shown

tories, $600 million in wholesale'

Construction
am

to

30,

1950, are esti¬
$46 billion and
$41
billion;

about

revenues

at

thus,

believe

about

total

expendi¬
by
upward to $5 billion.
The gov¬
ernment debt is currently (Sept.
20, 1949) $256,291 billion, and this,
of course, would increase through
we

will

tures

exceed

revenues

government deficit financing dur¬

ing the fiscal

year.

to

a

as

give

debt.

you

who

to

I would like
brief breakdown
this

owns

gdvernment

Last reported figures show
the commercial banks held

that

billion

$63.2

the

of

government

debt whereas their 1940 holdings
pon-farm — first
eight,
were $16.1
billion. The Federal
months Of 1949; $2,129 billion in.
Reserve banks in 1949 held $19.3
comparison with
$2,290
billion
during the same period last year; billion, which, compares to $2.466.
in 1940. Insurance companies held
farm
construction
first
eight
months 1949, $295 million against $20.9 billion of government debt
in 1949 in comparison with $6.5
$363 million the first eight months
dential

.

—

Farm Income

:

be

previous

I

The situation

believed

will

are

may

be up slightly

imports will

about $7,150 billion and exports

to

which the

purchases of around 7,500 tons of
lead monthly.
ferent.

that

purchases be¬
and the year-end may

Board

Munitions

same

were $7.u70 Bil. and exports were
$12,614 Bil. Our 1949 estimate is

that

reach 175,000 tons, after

compared

as

in

off

only 9% as compared to the
same period in 1948. We estimate

of

public

1948;

utility

construc¬

tion—first eight months 1949 was

$2,264 billion in comparison with
$2,059 billion for the same period
last

billion in 1940.
ment

held

The U. S. Govern¬

agencies and Trust Funds;
$38,274 billion of the gov- ;

ernment debt in 1949 in
son

with

compari-'

billion

$7,080

1940.

in

about $28 billion as
compared to $31.3
billion
last
year.
This is a decline of about

These figures for theIndividuals
and
unincorporated
first
eight months show slight
declines in residential, non-resi¬ businesses held $68.8 biliion in
1949 compared to $10.3 billion in
dential and farm construction and
a
10% increase in public utility 1940; mutual savings banks held
The
total private $11.6 billion in 1949 compared to
construction.

10%

bilities

is for only

stood

We

that 1,000,000 tons each
copper, lead and zinc would
considered an
adequate re¬

available from foreign sources, it

price

Index

200,000

in "reserve.

copper

small.

the year-

at

165 by the year-end. The average
in 1943 was 171.2, thus, our view

as

of

about

believe will decline

fourth

general

have

terials, last reported at 161.3, we

Mining engineers tell us that
^■sound of wage increases is not replacement costs of mining ma¬
and
equipment
have
Expected this year, however, the chinery
Settlement of wage disputes will nearly doubled. Labor costs are
ho doubt result in fringe benefits, up 106% on a straight-time basis
Such as social insurance and pen¬ since 1939 and with fringe bene¬
nons as a pattern for the future fits they have advanced 126%.
that will mean increased costs to Wages are roughly about 50-60%
Employers in most of the large in¬ of mining costs. With increased
dustrial corporations, while small¬ taxes (local and national) frozen
er companies may be able to set¬
into the cost, there are few pro¬
tle for a small wage increase only. ducers in this country today that
As to the cost of living, last re¬ can mine
copper
profitably at
ported on the Consumers Price prices under 15 cents to 17 cents
high.

year

suspect

We believe this

decline

will

was

of Semi-Manu¬

ported at 147.9.
index

tons

The Index

Wholesale Prices
factured

of
last

about

to

year-end.

the

by

decline

will

Index

Board

Munitions

the

the
will

of

end

The

We believe this

reported at 149.5.

point out that the number of peo¬ prices
ple currently employed in Septem¬

Products

Manufactured

by

amounted to $178.8

2% times

by the year-end to about 155.
Index
of "Wholesale
Prices

-

to $4,058 total figures of private and public ;
period last construction that I have given add '
year.
during the first up to our 1949 estimate of all new
construction to be at a new high
seven months were $7,507 billion
as compared with
$7,575 billion of approximately $19 billion as
in the same period Jast year.
It compared to last year's total of
is expected that the rate of im¬ $18,775 billion.
77'7 77 7;'.. •;
ports will increase during the re¬
77' Inventories 7'''7:'":'77- "
mainder of the year stimulated
As no doubt you men are in¬
by foreign currency devaluation.
terested in inventories, new or¬
Exports are expected to decline
ders and shipments, I would like '
very
slightly.
Irt 1948 imports
billion

billion

lion

Thursday, October 6, 1949

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

(1376)'

28

construction

that

income

farm

in

1949

will

aggregate

of

from the peak farm income

all

last

get

time which

was

registered

year.
However, in order to
the current rate into proper

prospective, I would like to call
attention to the fact that in

farm income
in 1941 it

was

1939

$8^ billion and

$11.7 billion.

Thus,
our currently estimated 1949 farm
income- of $28
billion is over

three

was

times

the

farm

income

of

1939 and about 2Vz times the 1941
rate.

Again I emphasize that we
high

year.

in comparison
for
For

the

first

the

residential and
and

a

year

in

feel

that

we

1948.

farm construction

utility construction as com¬
pared to 1948.
Our total for pri¬
vate construction for 1949 is esti¬
mated at $13,825 billion as com¬
to

not

of

we

lic

entire

should

months

1949

substantial increase in pub¬

pared

we

with $9,396 billion

expect a
continuation of the slightly de¬
clining trend in residential, non¬

1948 to a plateau that is so
much higher than we have had in
most of the years prior to 1948
that

the first eight
$8,918 billion

was

8

year

have declined from the peak

qf

for

months of 1949

$14,563 billion for the
1948. Continuing on
subject of new construction
I am going to breakdown public
construction:
the first eight
months of 1949 as compared to
the same period
in 1948—resi¬

the

$3.1

billion

in

1940;

State and
$8.2 bil¬
lion in 1949 compared to $0.4 bil¬
local

lion

governments held

in

1940; and other corpora¬
- associations
held $22.5
billion in 1949 compared to $2.5
tions

and

billion in 1940.
ernment

shows

The current gov¬

debt

an

billion from

Money

of

increase
our

in

billion

$256
of

over

$200

1940 debt.

circulation

at

the

present time aggregates $27.4 bil¬

lion,

believe there will
be little change in this between
now and the year-end.
An inter¬
esting comparison of money in
and

circulation

we

of

is to be found

$27.4
when

billioh
we

at

that so-called prosperous
less a depression.
year, when the money in circu¬
lation was $4.5 billion; 10 years
;
As to the subject of retail trade, dential, $111 million as compared
later, in 1939. money in circu¬
to $57 million; military and naval
I would advise that in the first
eight months of this year retail $67 million against $95 million; lation was $7.6 billion.
From money we turn to the.
non-residential
trade- was off less than 1%
public construc¬
as
compared to last year; in fact, the tion, $1,058 billion compared to gold stock in this country. The
decline was 9/10ths of 1%. Retail $607 million; highways, $1,068 bil¬ U. S. gold stock has had a con¬
increase over the past
trade for the entire year 1949 is lion compared to $985 million last tinuous
several years. It was last reported
expected to be about $125 billion, year; all other public construction.
as
billion
as
compared to at a new high of $24,691 billioh.
compared with an all-time $1,033
We believe that this gold stock
peak of $129.9 billion which pre¬ $827 million for the same period
vailed last year. The year 1949 last year. Thus, we have a com¬ will continue to increase during
will be higher than any year prior bined public construction total for the remainder of the year but at
to 1948.
In 1941 retail trade was the first eight months of this year a much slower rate than during
$55.15 billion and in 1945 it was of $3,337 billion compared to last year. In 1929 the U. S. gold
$76.6 billion. Thus, our estimated $2,571 billion for the same period stock was $3,997 billion and. in
1949 r retail - trade
last year. For the year as a whole, 1939 it was $17,644 billion as com¬
is « over
2
times the 1941 retail trade and we believe all types of public pared to our 1949 figure of $24,691
billion. We have frequently been
63% higher than retail trade ; in construction will show a-substan¬
1945.
<
tial.. increase over last year, per¬ asked if we expect, a change -in-A
few. words - about foreign haps
price of gold* This has
25% up, the total being the U..
trade, Imports during the first about $5,175 billion in cpmparison come p> ?especially, since-; pe; der
"seven months of 1949.were $3,846 with $4,212 billion last year. The valua'tioh"! of foreign currencies#are

a

severe

recession, much

1929,

now

look

.

t

'

At this lime
that

state

will be

there

$35

means

This

in

change

the

200

U.

Stocks, last reported at 6 Vz %
with
many" good
common
stocks selling at less than 10 times

earnings,

U. S. price of gold

and

mean

a

there

seek

in the of¬
market price of

of

Further

the

on

wealth

the

in

like to say a
savings of in¬

from

Speaking now in terms
of personal savings, that is, cur¬
rency in the banks, demand de¬
posits, time deposits, savings and
loan shares, and U. S. securites
held by individuals; the total last
reported at the end of 1948 was

1948.

I

country,

would

words

few

the

on

holders

dividuals.

15%

evel

show

will

last

decline

a

20%

this

far,

investors

the

about

namely, $7,932

a

will

I

have

However, even a 20% decline in
earnings from the peak of 1948
would

of

total 1949 business.
will

doubt

bring net earnings down
only to about $17 billion or twice

no

those

now

what

about

of

Europe's

v

place, Europe's

eco¬

nomic system has changed drasti¬

cally. Before the war, all Europe
except Russia was capitalistic in

purse.

low production costs. As a
away

solution

lem

of

is

goods
Europe's

our

to

no

Europe

prob¬

its

It impover¬
putting her on
her feet. In fact, it merely post¬
ishes

You

become

to

I

Dollar

materials.

Today, however, very few Eu¬
countries can be correctlyas
genuinely capitalis¬

ropean

described
tic.

Symptom of

Shortage

plentiful supply of foreign
pay for her food and

a

raw

self-supporting.

-

result,
little trouble selling
abroad. This insured

exchange to

are

again

had

output

her

without

the making of adjustments
inescapable if Europe is

pones

that

insolvency.

us

say

1950?

changes which

causes

shortage.

In the first

Santa

bottomless

a

root

opposition

will

O.K.—but

if Uncle

as

list these

me

the

dollar

prod¬

our

external

some

with

man

Giving

the

probably

of charge,

real

continue at for the
balance of the year.
I have en¬
deavored to point out the high
level

away

revision.

may

economy

Let
are

in Congress to its economics. In spite of
cartels,
program was the first clear
it was by and large an area of
warning that the idea needs sharp intense competition and therefore

en¬

to what level business and

as

wide.

be

foregoing

giving

were

So

has largely con¬

29

this

statistically to prove to
business has been at a

that

situation.

the

Claus and the American taxpayer

hign level during the
first eight months of this year. I
have also given you our forecast

of

of

Sam

paid out to share¬

year,

handle

to

ucts, free

same

(1377)

our program

sisted

year,

relatively

$21,174 billion earned in
Variations as to industries

corporations

the

By

of

and

ideas

total

of

net- earnings

The

deavored
you

from the peak

20%

to

was

CHRONICLE

billion.

-

speaking of stocks and bonds,
just like to briefly state
it is our opinion that net

1949

spite

American

to

aggregate
as

earnings of all U. S. corporations

of

in

to

up

amount

would

that

Savings of Individuals-

stock.

that

off

will

well

FINANCIAL

corporations

dividends

bad

a

estabcorporations
to
for

S.

being

capital through the sale

new

ccmmon

In
I

gold in foreign countries.

time

business

isned

change

black

or

that

not

be

believe this

we

costly

&

belief

our

and

future, which
through next year, at least.

not

ficial

believe

not

foreseeable

does

will

emphatically

do

any

ounce

per

for the

can

we
we

COMMERCIAL

THE

Number 4844

Volume 170

Most

them

of

socialistic

are

in varying degree.

They are ham¬
speaking of
We only begin to solve a prob¬ strung with every sort of restric¬
$174.8 billion. We would estimate earnings, I would like to comment
tion
to
free
competitive enter¬
lem when we isolate and attack
that savings will show an increase about dividends. Dividends of all
prise. They are taxed almost to
of about $4 billion for the year U. S. corporations last year only ican business, not as high as 1948 the causes instead of' doctoring
death
and regulated
and domi¬
1949. These are the personal sav¬ aggregated 37.4% of net earnings. but
approximately as good as the symptoms. The huge dollar neered
by swollen bureaucracies.
ings of individuals (exclusive of This, of course, was largely due 1949. We therefore feel that busi¬ shortage of Europe is a symptom. In almost
every case they are de¬
unincorporated businesses) and in to the fact that many corporations nessmen can look forward to 1950 Before the war, she was wholly
voted, not to full production but
last year were plowing most of with confidence, especially those self-supporting.
What,, 7therefore,
order to give you a better idea of
to
full
employment
at
much
their earnings back into the plant interested in the construction in¬ are the causes that have changed
what they consist of, I am going
higher wages and shorter hours
and
to give you the breakdown as re¬
expansion programs. These dustry, which is expected to con¬ this prewar situation so drasti¬
than before the war. And their
* •' t-;- ':~.l
ported at the end of 1948 com¬ expenditures are not expected to tinue at a rate nearly as high as cally? <r social services extend from the
Europe has* become insolvent
pared to 1939:
Currency (these be so heavy this year and it ..is the all-time peak rate of 1949.
cradle to the grave. Since Europe
and a pensioner of North America
are the savings by individuals) in
cannot
afford
all
these things,
because of the profound changes
1948, $20 billion; -1939, $4.2 bil¬
(Continued on page 30) ;V
produced by the war. <■;<
lion; demand deposits, 1948, $30.8
billion; 1939, $8.4 billion; time de¬
posits, 1948, $52.6 billion; 1939,
$24.3
billion; savings and loan
shares, 1948, $10.5 billion; 1939,
$3.9 billion; U. S. Government se¬
(Continued from first page)
curities, 1948, $60.9 billion; 1939,
unit
production costs. The re¬ in Britain and other countries?
$8.8 billion.
Thus, we have at
of

In

1945.

Insolvency

briefly state that it is our
considered opinion that the year
1950 will be a good one for Amer¬

.

.

.

the American

the

1948

of

end

totaly" savings

of

individuals of $174.8 billion com¬

pared to total savings at the end
of 1939 of $49.6 billion.
In other

words,
viduals

are

savings

current

such

of

indi¬

of

3^2 times the amount

In

savings in 1939.

happened

verse

when

rope

loaded

came

world
ed to

period ahead it is a very reason¬
able expectation that a large pro¬

and

portion of these savings of indi¬
viduals will find Their way into
the gross income account of those
manufacturers
of
products and
services needed by the family, the
housewife, the farmer, the wagq
earner and the businessman. ~'
to

as

our

recent bank¬

ing figures. Total earnings assets
of banks, that is, their loans and
investments
last reported as of

$66.5 bil¬
lion.
We expect a slight rise in
these earnings assets of banks be¬
tween now and the year-end. For
comparison, I might mention that
the earnings assets of banks at
the 1948 year-end were $62,751
billion or about $3.7 billion less
than they are currently.
In 1941
Sept.

.

amounted

21,

to

the earnings assets of banks

were

$30,085 billion, so we have cur¬
rently earnings assets of banks
(loans
and
investments)
more
than twice as great as prevailed
,

in

1941.

nized

as

debits

Bank
a

are

recog¬

good indicator of sales

and financial

activity as they rep¬
resent
checks
charged
against
bank
balances.
The first eight

months

1949

of

amounted

to

debits

bank

$810,135

billion

in

with $812,573 billion
for the first eight months of 1948.
comparison
total

The

■

debits

bank

for

1948

trillion, an all-time
high, and we estimate that 1949
will be approximately the same

were

In 1945 bank debits

1948.

as

)

$1,249

were

$974,102 billion and in 1942 they
were $641,778 billion.
•Money Rates and Bond Yields

|:

As
to

money rates and bone
which may be of interest
financial executives, it is

to

I - yields,
you

opinion' that
short - term
money rates which recently had
a decline
will remain practically
our

i

r
-

r

during the remainder
of the year.
Long-term money
rates
are
expected
to
decline
unchanged

slightly.

We

expect -municipa

firm and
high-grade corporate bond yields

bond

*

during the remainder of the year.
In

our

lent
~

opinion, this is an excel¬

time

for

corporate

borrow-

ing through the sale of bonds.
the

:

remain

not expected to change much

are
-

yields to

other

hand,

with

On

common

stock -yields in terms - of -Moody's




inflation

result

a

be¬
the

What effect will devaluation have

us? What will the now widely
prevalent bilateral agreements of
foreign countries do to markets,

on

increasingly turn¬ sources of supply, living stand¬
,'.v: ards, and prices the world over?
agricultural surpluses
this situation, Britain With our
other countries an¬ mounting to unprecedented levels,

meet

price

A word

with

As

Eu¬

costs

markets
us.

To

of

most

down

Socialism.

and

the

in

production

many

nounced

30%

a

across-the-board

will

Europe be able to

means.

Substitute

But

for

devaluation

substitute

be

cannot

dollars

the

afford

lowering European
is still' the 1tir§t re¬

devaluating nation
today allows rising wages and
prices to develop an inflationary
spiral that further increases pro¬
duction

it

of

will

the

have

lost

of

talk. I

bare

devaluation.

in 1947,1

situation. Perhaps I

in

now

something of

a

which,

First World War. In this recession,

10%.
has

have
fallen
only
about
The decline in production

been

about 17%

piecemeal

and

only

in total.

businessman

American'

and

have become convinced

consumer

that the price decline has
its

low

point

-

reached
that the next

and

major move of prices is upwards
or at least horizontal.

There is still a pronounced at¬
mosphere of uncertainty. Part of
,

it

stems

artificiality of

the

from

Government price

supports,

sub¬

they are to domestic poli¬
tics. By no means, an important
ject

as

part of the uneasiness is the re¬
sult of the impact of the many

panding,

How

armament
us?

bills

What

of

much

Europe

will

amount

devaluation

will

to?

really cost

defense
As a result of
inflation- -recur

our

will

the re¬

Russia.

of Western

can

Loans

state

Western

If

empire

We

Europe

as

a

Reserve

potential
em¬

from

But

■

.

Profits

Undivided

We

.

shall

Plan

on

and

,

could

pull

that

own

out.

♦Includes

.

.

.

A

,

.

a

But

Contingencies, Interest, Expense,

U.

S. Government Deposits aggregating

rr ;■*

so

.

.

,

President,

President,

F. G. Kingsley

Corporation

\> Mercantile Stores Company, Inc.

President, Oxford Paper Co.

Robert

_

Chairman of the Board,

•

it

Sugar Company

■ -

C. R. Black, Jr.,

-

Clark H. Minor

J. Cuddihy

Vice-President and Treasurer,

con¬

that

today

Honorary President,
International General Electric

"r/Jl Funk & WagnalU Company
t

Co., Inc.

••Chester R. Dewey

;

President

*

*

.

.

1

,

•;/.

'^'William M. Robbins

we

; /

David.Dows

there

New York

.

- *

a

Vice-President,
-

General Foods Corporation

Robert E. Dwyer
"

Harold

Execu ive Vice-President,

Anaconda Copper Mining Company

John C. Griswold

J. Roig

Vicc-Chairman,
W. R. Grace y-Co.

"

'

."Prcs dent,
'
■

a

Griswold and Company. Ineorporated

James H. Sharp
Vice-President

Cletus Keating
-Kill n, Campbell, Hickox ^ Keating
*

Frank C. Walker

Prcs.dent.

Europe, has threatened to become

Chairman, Executive Committee,

Jnscrsoil-ftand Company

dollar
shortage,
the insolvency of

chronic and permanent.

Jl.l 18,840.69

Jr.

D. C. Keefe
measures

585,008.12

David M. Keiser

"

C Hugh J. Chisholm

payer.

which

2,082,688.93

etc.

The Cuban-American

C. R. Black,

to dawn
that, unless we introduce
drastically new policies, our sub¬
sidization of Europe may run on
and on, year after year,,at ex¬
cessive and perhaps even increas¬
ing expense to the American tax¬
the

7,444,469.80

$103,415,286.95

Vice-President

us

fact,

.

2,508,450.23
v 425,761.30

.

year

ago,

could

feet

.

Acceptances in Portfolio

Robert F. C. Benkiser

without.

year

we

.

...

.

.

DIRECTORS

is far less conviction that this will

In

$

:

happen. It is beginning
on

•

1,444,469.80

.

,

...

3,000,000.00

.

.

penetra¬

than

more

alone.

her

401,007.12

.

4,234,189.65

Less Own

fidently look forward to decreas¬
ing subsidies each year until 1953
when Europe would be able to
stand

.

,

.

imperialism.

within

assumed

was

.

.

$5 billion through the Mar¬

over

1,938,254:45

89,068,930.45

Reserve for

to spend our

Communist

for

180,000.00

.

,

.

.

Acceptances

annual rate of considerably

an

.

.

,

.

Certified and Cashier's Checks Outstanding

:

at

Bank

.

Western

standards

202,123.00

22,959,143.99

.

Deposits*

Europe is becom¬
extremely expensive to us.
have
supported her living

ing

4,329,129.85

.$3,000,000.00
.

living standards to sink to levels
invite

.

LIABILITIES

It
bil¬
lions to arm the rampart of West¬
ern
Europe while allowing her
that

.

,

Communist
sense

Federal

Capital Stock
Surplus
A

we

no

.•>

.

of

alone, without allies
abroad may ultimately face a hos¬
tile Eastern Hemisphere controlled
makes

.

.

45,272,408.00

-

.

.

$103,415,286^95

Europe's living
standards
decline
severely, the
rampart may cave in.

by

.

.

985,000.00

'

Discounts

and

Stock of

.

.

.

$ 27,148,220.54

.

,

.

.

Customers' Liability for Acceptances
Accrued Interest and Other Assets .

conceive

and that

us

.v.

Brokers, Secured

to

.

.

rampart between

.

peace?

Other Bonds

•//'■'.A',',!""

police-state

Communist

uncertainties of Europe.
Will the Atlantic Pact keep the

Loans

.

Western Europe is. important tp
us from a survival standpoint. We
are
in a cold war with the ex¬

tion

Recently, there has been a bet¬
ter tone to business and inventory
replenishment is raising the level
of production.
But, so far, be¬
cause the drop in prices has been
so
slight, many people still feel
uneasy.
We cannot say that the
recession has struck bottom until
the

'

RESOURCES

U.° S. Government Securities
'
State, Municipal and other Public Securities

deal here only with the
of the Euro¬

was

however, is still
a very mild affair compared with
what
we
experienced after the
prices

Situation

can

^

Cash in Vault and with .Banks

fundamentals

pire.

of Condition, September 30, 1949

v

European

Obviously, I cannot discuss all
these questions in this brief

Then

are

W

NEW YORK

we

Demand

pean

in
Europe, making a report on Ger¬
many at the request of General
Lucius D. Clay. Since that time
I have been following closely the
developments not only in Ger¬
many but also throughout West¬
ern
Europe and England. How
these
developments
affect
the
American economy is of primary
importance to all of us.
We

Statement

can¬

can

give them away?

to

them as follows:

Two years ago,

recession

if she

longer

a

costs,

benefits

all

And

much

Fundamentals of
...

quirement. If

OF NEW YORK
HANOVER SQUARE,

suf¬

earn

take

to

war?

how

not,
a

GRACE NATIONAL BANK

enough of
these surpluses off our hands as

for

That

costs.

Costs

Lower

ficient

before

slash, for that is what the

devaluation
No

Economy

Comcrford Theatres, Inc.

Ti

We must

.

e

Grace

*.

:■

name

has been identified with domestic and

hanking and

commerce

international

for almost a century.

own

do

some

heavy

thinking

and

evolve entirely new- concepts and

EMBER

■lis:

FEDERAL

DEPOSIT

IN.SURANCB

CORPORATION
=F

COMMERCIAL

THE

(1378)

30

Well, the setback came. A
stocks lost some points.

The averages even

Markets
Walter

Whyte

would

reaction

the

which

carry them.
But slowly, a
firm resistance appeared and

Says—

prices gradually began climb¬

By WALTER WHYTE=

=

got within

touching distance of the 175
level, the figure I thought at

ing back.
//

bad

down

on

off

good

on

If I miss

■

news.

I'll

But

move.

still

wait.

Meanwhile you

have a list of
abundance of strike news or stocks to buy, when, as and
the foreign complications has if, they get down to what I
had much of an effect on the consider to be buying levels.

A

Such

market.

stock

the

neither

Apparently

a

#

com¬

*

*

application of this

reverse

a

won't go

the

included

list

A market that Illinois Central 25-26, stop at

down

bad news, 24, and Republic Steel 17 to
down 18 with a stop at 16.

on

turn around and go

can

//::

good news.

on

of

Rest

probably have to
There's a philosophy be¬ gnaw your fingers waiting for
some of these.
I prefer short
hind
this
reasoning, even
finger nails to short balances.
though it is a minority inter¬
More next Thursday.
pretation. Potential sellers—
and the market always has
—Walter Whyte.
them—wait for good news to
[The views expressed in this
sell.
Once given ^this, they article do not necessarily at any
feel they'll have a bidders' time coincide with those of the
market on which to dispose of Chronicle. They are presented a*
their stocks.

•

the author only.]

is being
by the American tax¬

shouldered

The result of

Europe's socialism
and repressed inflations is exces¬

sively high production costs. This
makes it increasingly difficult for
her to sell her goods in the dol¬
lar countries,
well,
except
such

and elsewhere as
under
umbrellas,

bilateral agreements.

the

as

A second change

brought by the
is the cutting of Europe in

war

half

is

Iron Curtain; There
little today of that large,

by the

very

free, exchange of goods that took
before the war
between
Eastern and Western Europe. The
place

reasons

or

buy on good news,' and
either get frightened or, sell

out

bad

on

side

Russian

Western

Curtain

and

about

15%

only

deficient.

food

But

present-day

Germany with its

lation swollen

popu¬

by 10,000,000 refu¬

from her Eastern provinces,
food deficient. She

gees

is

the

of

' therefore

was

about 50%

therefore

must

import

far

a

greater amount of food per capita
from
the
Western
Hemisphere
than the old Germany of 1938.
:
third change brought by the
has been the loss, or threat¬

A
war

lost

has

Dutch

India

Two weeks ago I felt stocks
would go down. They did, but
not as much as I expected.
But because the
was

it

picture

news

The

The

chance

to

French

hold

Asiatic

these

little

have

Indo-China.

Yet

countries, be¬

fore the war, poured an unending
flood of raw materials and other

covered with clouds I felt
time to

was

market

the

der

put bids in un¬
to

take

ad-

buy—inci¬

dentally the first such list in
weeks—and

recent

to await what I

almost

a

back

sat

thought

was

certainty.

Farm

Companies, 1945-1947—R. J.

ance

Saulnier

has

a

brought by the

the

been

Europe from

conversion

creditor to

a

of

debtor

Before the war, Europe, and

area.

in

both

North

National

—

of

Bureau

Research, 1819 Broad¬
New York 23, N. Y.—paper

\

'

Inviting the
Batchelor—21
from

the

New

Undertaker—C.
cartoons

D.

reprinted

York

editorial

pages of the
"Daily
News"—Na¬
tional
Foremen's
Institute, Inc.,
New London, Conn.—paper—150;
100 in quantity.

(Special

Pacific Coast

Orders Executed

to The

BEVERLY

Financial

Chronicle)

HILLS,

CALIF.—

Willard W. Penry has become af¬
filiated with
Waddell
&
Reed,

Inc., 8943 Wilshire Boulevard. Mr.

Securities

Penry was formerly La Jolla man¬
ager for Wesley Hall & Co. and
prior thereto was with Pacific

on

Pacific Coast Exchanges

Company of California.
■

Hill

Members
New

York Stock

'

New

York Curb

Exchange

(Associate)
San Francisco Stock Exchange
Chicago Board of Trade

14 Wall Street

New York 5,

COrtlandt 7-4150

Private

Wires

Principal

Offices

Ssua Francisco——Santa Barbara

Monterey—Oakland—-Sacramento
Fresno—-Santa Rosa




to

The

Financial

Chronicle)

SAN
FRANCISCO, CALIF.—
Roy A. Lynne, George A. McQuil-

with

At

had

But the

the

Western

the

vast

220

Merritt

of

devoured, these' in¬

Europe—in«-North

America, South America and Asia.

They were thrown on the market
for cash to purchase raw materi¬
als and equipment and supplies
for

the

war

machines.

investments

were

When the
very

gone,

Co.,

&

Inc.,

Montgomery Street.

not

rope,

give

our

were run

so

Oriental

countries

who

are

not

given to that genial idosyncracy of ours.
Today, India, in¬
stead

of

being

England's

heavy

debtor as in prewar days, is

Brit¬

ain's creditor to the tune of over

$5 billion in sterling.
A fifth change brought by the
war

is the greatly increased

self-

sufficiency of the Western.Hemi¬
sphere, particularly- the. United
In

the

enormous

of Europeans, the
self-sufficiency of North

America

is

eyes

the

greatest obstacle

With Dean Witter
to

The

Financial

Chronicle)

FRESNO, CALIF.—Maris R. At¬
kinson is with Dean Witter & Co.,

Patterson Blag.

self-sufficient

materials.

of

in¬

us

We'

part

of

in

raw

replaced a large
natural rubber im¬

our

lars.

earning of sufficient dol¬
English, particularly,
right in reminding >us that

well-balanced trade between in¬

dollars

where

countries

industries

our

can

it.

stand
For

example,

plan might be
a generalized

a

developed to permit

single item is costing the sterling

quota of iipports duty free up to

$200 million

silk

We replaced

with prewar.

pared

with

nylon

for Japan

com¬

year as

a

other

and

syn¬

to earn dollars to pay
cotton
and
other

American

for

5% of the physical quantities
American
industry now having a protective
or prohibitive tariff.
In my opin¬
ion such a plan would not en¬
danger either the price structure

say,

of the production of any

partially replaced or wage rates of any American
'
of jute from India industry.
There are other ways for for¬
with other forms of packaging.
During the war, we grew our own eign nations to earn more dollars.
We

imports.

made

burlap

oil

tung

in

our

Southern

own

states.

-

"fe ' other words, it has become

;

more
difficult for the
world to sell us, not merely man¬

steadily

ufactured

Many ideas have been advocated.
Some of them may have merit
while others may be of doubtful
value,

'

which

from

them.

r

S. Foreign

of U.

Question

goods, but even the raw

materials

Investments

/

make

to

It

'

1

has

been

make

can

that we

suggested

.

investments

large

L-h^ve- briefly outlined the basic abroad, thereby suppling thedolthat make it much more
lars that in a safer, saner world

causes

for

Europe to earn dol¬

before the

war.

could

be

nation.

of a creditor
granting that such
public,
private,

expected

But,

investments

What Can Be Done?

—

government-guaranteed — are
forthcoming in Europe, Africa, or
it possible for her to earn more
the Near East, they can only be
in the face of the realities that I
repaid if we ultimately import
have, outlined?
'
' '
more goods and services than we:
It is apparent that the Iron Cur¬
export.
//'--?///,'
1 '
or

What then

tain

be done to make

can

moved

be

cannot

into Russia without
be

empire, nor

given
into

remade

be

backward

war.

a

back
can

Europe

her lost
she now

creditor

a

area.

But there is one important obsta¬

cle

that'Europe

she

and

tion to do it.

determina¬
///,./ J".

Europe can do something about
her

production costs that
prices too high for com¬
petitive marketing in many lines
high

make her

in

this

and

other

countries.

The

"Economist," perhaps the

London

Should

consider¬

stockpile

we

ably more foreign raw materials;
at perhaps guaranteed
dollar"

prices
them

distribute

gradually

and
to

industries?

our

""

Should

if

overcome

can

will

the

has

icans

we

give far more Amer¬
The^

chance to see Europe?

a

is one of Europe's'
\ "A
yf-'j

tourist industry

greatest dollar producers.
"

Finally,

important-source

a very

of dollars to some European coun¬

tries

the

in

remittances

the dollar
foreign immi¬

past
that

was

States sent

to the United

grants

in
riodical, in a recent article, sug¬ this country a definite and chronic
gested among other things that shortage of certain kinds of labor,
the British Government take steps such as household and farm work¬
to
create
the
greatest possible ers. This kind of labor increases

world's outstanding economic pe¬

measure

to

cut

of competitive conditions,

government costs and

re¬

to lift price con¬
trols and other restrictive meas¬

duce^

taxation,

to..abandon a cheap money
policy and- let interest rates find
ures^

their

level

even

to

unemployment,

moderate

tolerate

if nec¬

to get full value for wages

essary,

paid..

and

„/•//

^

policies were followed
be in a far better

If these

Britain

would

position to solve her crisis.
We should expect Europe to put
her house in order. Yet this does
not relieve us from responsibilities
of

our

us

Europe

cannot

own.

goods and services unless
are
also prepared to accept

we

can

we

country and the

the wealth of our

standard of living

of

citizens.

our

Europe swarms with people eager
and willing to come to America
and do work of this sort. Should
allow

we

a

restricted

considerable: number

immigrants

selected

of

for

time

a

to
to

-

enter,
certain

occupations, paid good American
wages, part of which would be in
dollar remittances to their fami¬
These

lies?

people could receive

passports/permitting
stay for a few years* or,

temporary
to

them
in

showed

they

case

themselves

desirable material for citizenship,

'

zens.'

will

You

do now to provide

all

with

culties

them.

What

We have

to their folks.

home

sell they could become permanent citi¬

her

'

'/•

,*

:

diffi¬
of the ideas I
certain

see

each

I see therm very

have mentioned.

Europe with new opportunities to
earn dollars?
I have no pat solu¬

clearly myself. But I also see the
imperative necessity of drawing

tion for the problem.

It does not
quack medicines,
or
snapv decisions.*
It -calls for
thought, debate, and above all
ideas.
What possibilities do we
have for increasing the opportu¬

on

call for panaceas,

in solving a problem

nities of

foreign nations to

earn

our

each

come

The
in

American

problem

one

from

The least we

can

do is to thor¬

oughly overhaul our tariff system.
Congress has set up a
for

reducing

our

pressing.

be summarized
Play Santa Claus

become

or

isolated

that will be¬

more

can

sentence:

forever

portunity to
Overhaul Our Tariff System
-

year

resourcefulness

the

economically

world

or

give

foreign, nations the maximum op¬

dollars from us?

The

this is not the 19th century when
a

foreign

providing

with greater opportunities to earn

ports with synthetic rubber. This

the

to

dustrialized Britain and still pre¬
(Special

made

—

up by Eu¬
much with us. (we
goods away) but with

heavy debts

are

King

war

vestments

are

N. Y.

Teletype NY 1-928
to

(Special

lister and Edward L. Silveria

Exchange

from

States.

King Merritt Co. Adds

Schwabacher & Co,

purchase of food and

materials

the

Penry With Waddell, Reed

detail with the deliberate purpose

creasingly

and

the United States, for making
burlap bags. Egypt was likewise
a
heavy debtor and paid largely
in. terms of cotton used by the
mills of England.
V vr r

Economic

Vantage of any sell-off. In line -$1.
with this reasoning I gave you
list of stocks to

on

Mortgage Lending by Life Insur¬

way,

a

Returns

ered to examine our rates in close

has-, also

war

Asiatic

A fourth change
war

in
and

The

cannot

products.

wnole"

a

earn

to

,

hold

independence of the East

Indies.
from

her

and

same
time,
investments in
Asia. India, for instance, before
the war, was a heavy debtor of
Great Britain and paid in such
products as jute, readily saleable

Costs

us

Brit¬

almost reconciled

now

are

the

to

market.

is very tenuous.

Malaya

on

Hemisphere.

sjs

selling

goods.

difficult

American

much about the tariff "as

manufactured

world

the

for

lars than

Europe

:|s

*

difficult
dollars by

most of the dollars needed to buy

the

tariff level as

our

practically back to 1914
but this is speaking in generali¬
ties.
We have been talking too

and failed to

loss, by Europe of her em¬
pire in Asia. Before the war this
empire in Asia supplied her with
in

It is said that
whole is

a

get down to the brass
a^ea.
We are able - to
pour
out surpluses of manufac¬ tacks-o£ particular products* item
tured goods far beyond the ca¬ by item. I suggest tnat a commis¬
pacity of any other area. It has sion of government officials and
therefore
become
steadily more American businessmen be empow¬
trialized

ened

raw

news.

same time is
developed indus¬

the most hignly

thetic fibres. That makes it harder

used for the

will

ducer

most of its food from its
Eastern
provinces now on the

interest, payments on
these in¬
vestments could be immediately

It

that basis.

on

today, North America is
the world's greatest pro¬
of food and raw material

far

area

South America. The dividend and

public seldom operates

But

suffers most from
this cleavage of Europe is West¬
ern
Germany. Prewar Germany
that

country

investments

The

-

by

surpluses and at the

England in particular, held huge

'

.

1

29)

page

expense

payer.

ain

You'll

those of

from

the

of

got

Here
is
the
plete disregard of bad news
list, buying
gives the impression that the points and stops: American
natural trend of the market is
Smelters, originally given as
up; a condition which is now 35-36, stop 34. This was a tenapparently being shared by point error. Figures should
more and more people.
have been 45-46, stop 44. The
others were: Bethlehem Steel,
y:
*
*
*
It is a market truism that 24-25, stop 23; Celanese 24-25,
stop 23; Denver Rio Grande
a market that won't go down
on
bad news will go up on 22-23, stop 21. Latter came
into the list just under 23.
good news. There is, however,

market cliche.

(Continued
much

I'll

simply sit
back and wait. It is possible
slip
that I have missed part of the

can

news,

,

market I won't

a

ranks.
chase stocks.
doesn't
go

which

Market

bad

bull

increases

news

of

face

in

Advance

Thursday, October 6, 1949

CHRONICLE

European Recovery and the American Economy

few

Tomorrow's

FINANCIAL

&

I

think

made.

Washington

mechanism spirit

tariffs and

has

earn

dollars:

good start
The
economic
a

were

has

been
in

talks

conducted, in a

of harmony and

earnestness.

The

joint communique issued by
the representatives of the United

President power to
important reduc¬ States, Canada and Great Britain
Has everything been done gave, every indication of an at>lacked food and raw materials. tions.
preciation of the vastness of the
We still lacked manufactured here that should be done? I doubt
it very much.
problems involved and a sincere
goods.
dominantly
was

natural

agricultural America
and
easy.
Britain

given

the

make large and

c

|

olume

THE

Number 4844

170

COMMERCIAL

CHRONICLE

FINANCIAL

&

villingness to approach these
roblems realistically.
If these problems are not ap¬

sterling*

utterly extraneous to the subject

broker and

the

with which it deals.

number and

proached

bull

(.1379)

ite

realistically and if defi-

steps

not

are

taken

ealities, particularly those I have
entioned in this brief outline,
for

trouble

that

disaster.

o

with which the pound

is by citing two
in other fields,
years after the

ignorance
examples
and

wo

half

a

Nations

was

born

rancisco—two

and

a

Tnited

San

at

half

years

organization's name had
ppeared almost daily in the front
age of newspapers—30%
of the

fter that

Cincinnati

of

-esidents

un¬

were

able to tell interviewers what the

conception of it.

no

Four

in

have been

victimized by the tra¬

you'll have 20 instantaneous and

dition

of

emphatic reactions.
What makes a good ad?
what makes a good play or

publicizing

stocks.

That goes back to the pre-

it

measures,

if

well be

can

turning point to mark

era

in European recovery.

The offer

6,000

played

a new

words of text. It wasn't
up at all. And yet in the

week

nonths after prices were

put un¬

or

ad

that

after

so

analysis,

noteworthy than

mere

the kind of response

contained

ters

of the let¬

comment

some

."

other than "Please send me.

couldn't

this ad away for the
children. I don't expect to see it

into

go

retail store

any

without

seeing the sign "our ceil¬
price.
And yet, four

ing

.

.

months

all

after

this

i began,

intensive at¬
tempt-to
educate
the
public
through every known medium,
50% of the people in Indianapolis
could not tell you what was meant
by the phrase "ceiling price."
despite

you see what 'we're up
against when we attempt to regis¬
ter even

a

few simple facts about

business

securities

the

consciousness.

cite

I
the

public

On

these

facts

of
the situation, but rather to show
the necessity for advertising —
consistent, insistent, simple ad¬
vertising.
not

show

to

hopelessness

Why Advertise?

other

any

to do the job. If
personal sales¬

way

had to rely on

manship

or even on

the mailings

of literature to do the mass educa¬

tional job which must be done on
millions of prospects, it would be
like

trying

Canal

with

There is

in

factor

give

can

that

to

our

a

the

dig

the Panama
kid's toy shovel.
•
extremely hopeful

one

situation,

that

one

the courage to believe
advertising will be effec¬
us

tive. And

I

but

in

really

never

■

We have
tisement in
response

the

same

used this adver¬

now

dozen cities, and

a

a

factor that eludes

science

and

an

somehow

in each.

In this

Should

let's

Nov/

look

first

a

Be

right to reprint the advertisement
as an article.
Since then, General

They write it off as
"not dignified."
In part this is a

Motors has

asked

for 100,000 re¬

prints of the article to distribute
among its employees, and it has
used

been

in

At

major companies.

sider themselves

that

ad¬

the

all

is

affliction

to

There

I

don't
about

blind

a

was

one

went

beggar

blind

man

to

up

received.

the

beggar

That's advertising.

ness," first published in the New
York
"Times" last October. At

or

cannot

to find out how well the ad

astonishment

as

well

as

-

I It's
a business - of selling
sizzle rather than the steak.

our

own,

a

single ad

will
To

know.

it,

I

there

the

than

we

ad itself in

of

that

purported

just

a* poster.

last few lines of that

tisement

our

offered

to
In

adver¬

a copy

reprint form

that there

do.

So

With Courts & Co.

I

(Special

of the

or a copy

booklet "How To

Invest."




to The

Financial Chronicle)

ROME, GA.—James L. IJender-

should say

son

has joined the

staff of Courts

& Co., 4 East Second

Avejiue.

LIABILITIES

RESOURCES

.

U.S. Government Securities

.

118,661,123.45

...

4,574,751.24

U.S. Government

Securities

(Includes United States Deposits

Unearned Discount

Agencies

.....

$184,203,295.70

,

Securities

Acceptances Executed

v.

7,886,044.55

......

13,100,943.18

.

Reserve for Dividend

Less:

$8,902,789.08)

....

.

.

Accrued Taxes, Interest, etc.

State, County and Municipal

Other Securities

$259,664,767.89

Deposits.

$ 60,967,421.01

Cash and Due from Banks.

.

......

.

.

.

/

.

Payable Oct. 1,1949
.

...

.......

Time Collateral Loans....
Bills Discounted

......

1,870,479.34

.

1,020,725.42

.

142,187.50

$ 2,477,171.99

Acceptances Held in

2,155,221.18

Portfolio

20,986,987.73
Demand Loans

321,950.81

16,849,421.98
5,029,597.86

Capital Stock.

52,803,256.34
3,049,489.86

Customers' Liability under Acceptances
Accrued Interest Receivable

.

.

.

Surplus

.

.

.

10,312,500.00

Undivided Profits,

.

.

.

.

.

270,972.15

16,000,000.00
2,863,910.53

2,226,891.46'

Reserves.

$284,110,912.95

$284,110,912.95

>

„

18,863,910.53

723,570.70
194,320.63

Other Resources

$ 5,687,500.00

(Par $20.00)

74,682,276.18
Banking Houses

the
It's

Friendly

was no

Efficient

Obviously

relationship between

beggar's blindness and the fact
was spring, but the adver¬
tising man knew that by hooking
them up he could create a power¬
ful appeal to the better instincts
of the passersby.
Advertising' is
not a study in logic.
It is often
the

that it

compounded

of

factors

thaL'are

Etlabliilied 1858

MEMBER

FEDERAL

Philadelphia

DEPOSIT

to

'V

■

blunt

more

I

just isn't any other way

reach the people we've got

whole

accomplish.

supose

also rest on one

reach, to,4o the job we've got to

advance

or any

be

business, faith in

other factor—the stark knowledge

simply v&ay
in

this

in

And

advertising can

to

me

rising sales

business of appealing to emotion

highest degree of readership and
recollection value that they had
ever encountered in checking any
more

and successfully, have
curves.

Alert

their

rather than to reason.

be"

and Sapolio, that once

household names, fell by

were

the Steak

To

was

they found that it had about the

advertisement

Pear's Soap

Selling the Sizzle Rather Than

the Newell-Emmett Ad¬

remembered.

successful big company whose se¬
curities we
sell.
Products like

copy

prove

vertising Agency made a survey
and

garded as a vital weapon in the
sales
strategy
of almost every

and

the

so

factor—the

one

STATEMENT AS OF SEPTEMBER 30, 1949

The beggar
and

on

knowledge that advertising is re¬

in

said, "Look here, you're not do¬
ing too well. I am an advertising
man and I think I can help you- if
you'll simply let me change your
sign a little bit."
lose

you

day with his tin

cup,
wearing
the conventional
sign, "I Am Blind." A man stand¬
ing by noticed how few contribu¬

he

advertising

story.

a

didn't have much to
advertising man
about our business — about se¬ wrote a few words on his sign and
curities. That fact it attested by left.
Later that afternoon, out of
some curiosity,
the enthusiasm with which our
he returned. The
announcements of special schools
beggar was obviously doing much
better.
As
he
for women on the subject of in¬
approached, the
vestment have been greeted
in blind man recognized his foot¬
the dozens of cities where such
steps and turned to him and said,
classes have been held,
"My friend, what have you done
to help me? I've never had a day
i
Again, it is also demonstrated
like this.
What did you put on
by the almost "unbelievable re¬
sults which we have had to the my sign?"
The advertising man
full page
said, "I
advertisement, "What
Everybody Ought to Know. . . , wrote just three words on it—Tt's
springtime and—I am blind.'"
About This Stock and Bond Busi¬

read

rest

can

that are scattered over our news¬
question, "What Is
that I can't prove what any ad or
The
best way I paper financial pages — ads that
answer that question is simply
provide the name of the any campaign we ever publish can

Central Park

tions the

in

In our business, that faith

pays.

service.

our

too campaign

of card ads

the

in terms of

that

have to have faith that advertising

second

what any

vertising. Whatever the cause, the
of

The

Lynch, Pierce, Fenner &

Tn'suihmary, let

professional men

evident in the plague

sell

to

tion, for brokers in England con¬

fact

to do.

job. These adver¬
tisements are designed to build
confidence in Merrill Lynch and

tradi¬

like doctors, and hence above

advertisement

some

Strategy

job is to make people want

do the

,this point it is appropriate

raise

to

different

dozen

a

house organs of

from the British

of

Admittedly

dled a particular problem for a
particular client or prospect and
offering to send exact copies of
the correspondence, is an excel¬
lent illustration of how we try to

use

carry-over

terest in the

this

customers on our

many

Advertising

of

business, advertising has

advertisement

misplaced sense of dig¬

Digest," realizing the public in¬
subject, asked for the

of

it

the
such as our
wayside when they stopped ad~recent ad "Why Buy Stocks?" Our
series
of
letter
advertisements vertising. Products that are ad¬
telling the story of how we han¬ vertised aggressively, ingeniously,

at

Many brokers, even those
advertising, don't be¬

who

put

me

they read.

discharged
—making people want to buy se¬
curities—I can cite our full-page

of securities adver¬
tising—what it is and what it
should be. Let me say first of all
that I think the biggest deterrent
to
effective advertising in this
a

Let

Conversely, I doubt if

have

tue

first obligation can be

the question

field is

Job

two-fold job

Merrill

Advertising

specifically

accounts we get from

along the line, maybe years ago,
influenced to come to us by vir¬

Beane. As an example of how the

Securities

What

basic

a

ex¬

them

concerned

Advertising—A Weapon of Sales
Two-Fold

craft.;

"Everybody's

editors

it is not adver¬

an

of

not

books who were not at some point

Promotion Department.

lieve in it.

The

this firm.
we

to buy securities. And the second
inexact job is to make them want to buy
inexact' art and or sell those securities through

out

I'm

any

product.

any

wholly and solely by itself ever
created a single new customer for

It's the adver¬

fashion

and

I can't believe, except in
situations, that advertising

rare

word.

of the

these

influence

tnat

buy

why

many

way:

ing

no

tising man's job to take

substantially nity.

been

has

the

sense

For my money,

the quotient of art in advertising
—in both the copy and the art

understood

happen again in their lifetime or
mine."
'

real

to

advertising.

.

college

"I've put

how

dollar

advertising man
he's right by any
empirical standards. He can sim¬
ply say, "In my judgment .
.
this is good or this is bad."
For

'

it's simply this: People

want to know. They want to know

that time,

today.

of

with figures that purport to show

he spends
But that isn't advertising
half

every

in the

prove

and bonds before."

stocks

That's

expects
on

factors

the

decision

securities is> the job of the
Sales Division, aided by the Sales

workable

economics

took

"I

know

Why advertise? There just isn't

we

to my

of

broker

a

hap¬
product in a

a

other factors. It would be
impossible for you to sort out all

tising's job to sell securities. Sell¬

act measurement.

whole family."

When

the

But in

because you just

it's

many

advertising such as this, he
51 cents back tomorrow

uses

many

other advertisement.

work—is

this aloud

read

have

the

analyze

because a friend*
experience with

window—all

store

Advertising?"

'

,

.

"Why didn't somebody tell me
about this before?"

the i most

jSo

.

They said things like:

"I

advertised; it's
has
had
good

to

sold—quoted."

a

you've seen these products

cause

individual

prior sale so manj
shares of X Company at X price5
or
just "X Company—bought—

experience,
by
consistently
checking the results on a given
advertisement and attempting to

ever

10%

Brokers

issue was
broker's ob

every

smoke

drive

Chevrolet, or why do you own a
G. E. refrigerator?' It's partly be¬

"trading ad"—"We offer

subject

by

can

had. At least

and

you

do you

pened to see such

only one way in which an adver¬
tising man can improve his judg¬
ment and that's by trial and error,

last

was

field.

why

or

them;

judgment has to be good —cer¬
tainly better than average. There's

quence.
more

securities

the

instance, why do

launched

factors which
account for the good showing of
one
and the bad showing of an¬

But

also

any

SEC days when a new

good

received over 5,000
requests — many of them on com¬
pany letterheads or on fine per¬
sonal stationery, coming obviously
from people of means and conse¬
we

during
the war, OPA made a survey in
Indianapolis to find out hew well
informed the public was about its
operations.
During
those
four
months, newspaper stories had
discussed
ceiling
prices
daily.
Furthermore, the phrase ceiling
price was sprinkled all through
the ■■ advertising.
Finally,
you
government; control

der

Well,
a

which

photograph or a good movie? Even jective was to sell as many shares
recognized critics will differ in of that
particular stock as lie
their opinions.
But by and large could before the market was
pre¬
the critic's judgment is good—on
empted by others. This tradition
the averages and over the long
persists today in the form of the
-run.
And an advertising man's
so-called

literally buried in

was

appeared,

we

Luckies,

show any advertisement to 20 dif¬

numbers

Or consider another case.

For

for

ferent people, and the chances are

mental

simply

Jnited Nations was. They
lad

the

by other and 'more funda¬

lowed

first

in

factor

fol¬

uncertainty.

had

picture

And
probably no¬
field of business.

in

can

accounts

another

And

growing daily.

that

(Continued from page 7)
ther

is

There

body

It lifted the

tension

a

New Classes of Investors
place

good ad? Nobody

a

address.

advertising's lack of effectiveness

broke

move

Must Adveitise to Reach

e

What makes

the

accomplish.

perhaps his telephone

knows, and yet, everybody knows.
If
you
don't believe that, just

of

veil

take

This

the

A start has been made.

The speed

to

horns.

the

by

been

lead

well

can

determination

a

alone

the United States are

urope and
n

of

face

to

was
devalued following
Washington talks is evidence

31

INSURANCE

^

CORPORATION

32

COMMERCIAL

THE

(1380)

Thursday, October 6, -1949

FINANCIAL CHRONICLE

&

Indications of Current Business Activity
statistical tabulations cover production and other figures for the latest week or month available (dates
either for the week or month ended on that date, or, in cases of quotations, are as of that date):

The following

shown in first column are

Latest

Previous

Year

Month

Month

Ago

•

Latest

? Year

Ago

84.6

8.2

,

'

•••.

Ago
97.5

84.2

CONSTRUCTION PERMIT VALUAURBAN AREAS OF THE
U. S.

BUILDING

IN

TION

Equivalent to-

U.

—

Oct, 9

and castings (net tons)

Steel ingots

Month

Week

—Oct. 9

(percent of capacity)

Indicated steel operations

Previous

Week

STEEL INSTITUTE:

AND

IRON

AMERICAN

151,000

1,757,400

1,552,200

1,559,600

DEPT.

8.

$583,118

►$748,046

331.582
168,829

•389,443

339,070

♦259,474

223,311

82,707

♦99,124

95,824

236.3

296.2

304.9

62,569
85,577

*62,449

89.165

35,638

102,798

90,739

45,316

107,493

period (tons
—217,167

212,817

79,597

All

PETROLEUM INSTITUTE:
output—daily average (bbls. of 42
Crude runs to stills—daily average (bbls.)
Gasoline output (bbls.)
Kerosene output
(bbls.)

AMERICAN
Crude

^

—Sept. 24

4,875,400

4,845,300

—Sept. 24

115,377,000

5,306,000

18,152,000

-Sept. 24

1,910,000

17,845,000
1,759,000

18,180,000
1,585,000

(bbls.)
—_
—
Sept. 24
Stocks at relineries, at bulk terminals, In trdusit and In pipe linesFinished and unfinished gasoline (bbls.) at
.Sept. 24
oil

fuel

(bbls.)

Kerosene

oil (bbls.) at

Sept. 24

—

alterations,

etc.-

1

6,667,000

6,491,000

6,656,000

7,597,000

103,331,000

106,280,000

PURCHA8ES OF COMMODITIES-

CONSUMER

7,876,000
90,410,000

25,719,000
71,428,000
57,745,000

25,804,000

26,615,000
81,414,000

26,436,000

80,114,000

74,718,000

68,143,000

68,527,000

68,394,000

DUN

month

in U. S.

Copper production
Crude

of

(tons

A.—
;

lbs.)

2,000

CONSTRUCTION

ENGINEERING

CIVIL

—

908,592

531,829

718.309

:—

S.

A.

2,000

of

(tons

Sept. 29

63,388,000

64,267,000

55,425.000

Sept. 29

6,293,000

28,719,000

40,752,000

20,589,000

$188,659,000

$155,191,000

95,673,000

59,014.000

92,986,000

96,177,000

lbs.)—

lbs.)———„

2,000

LINTERS

AND

Lint—Consumed
In

-

DEPT.

—

of

month

Linters—Consumed

664,133
679,983
3,954,662
136,366
228.290
47,645
19,747,000

August

consuming establishments
pubiic storage as of Aug.

In

COM¬

OF

BALES:

MERCE— RUNNING

$128,139,000
59,530,000
68,609,000
48,020,000

and municipal

Federal

Of

:

'

Refined copper stocks at end of

COTTON

$163,897,000
Sept. 29 / 94,216,000
69,681,000
Sept. 29

construction

State

746,912

8570,575

Sept. 29

construction

Public

8743,022

8562,510

ENGINEERING NEWS-

U. S. construction

Private

S661.472

——Sept. 24
(number of cars)
Sept. 24

RECORD:

Total

U.

In

RAILROADS:

freight loaded (number of cars)
Revenue freight received from connections
Revenue

August:

of

lbs,i_

2,000

of

(tons

Reiined

—

August—

of

INSTITUTE—For

COPPER

< 1935-193!)

INC.

BRADSTREET,

&

100)—Month

Deliveries to customers—

ASSOCIATION OF AMERICAN

cf

month

of Aug. 31
31_
.
August
as

consuming establishments as of Aug. 31 v

In
In

public storage as of Aug. 31
spindles active as of Aug. 31

Cotton

OUTPUT (U. S. BUREAU OF
Bituminous coal and lignite (tons)

COAL

•

12,218,000
1,202,000
148,200

7,910,000

*8,435,000
944,000

921,000

*10,700

37,000

Sept. 24

9,900

9,3G0

Sept. 24

(tons)

coke

1,950,000

Sept. 24

—

(tons)

anthracite

Pennsylvania
Beehive

MINES):

GINNING

COTTON

<

RESERVE SY8-

SALES INDEX—FEDERAL
AVERAGE=100

STORE

TEM—1935-39

.Oct.

5,448,554

5,543,913

5,555,641

5,521,238

1

IRON AGE COMPOSITE PRICES:
Finished steel

Pig

iron

gross

t3.705c

3.705c

Sept. 27
Sept. 27

ton)
(per gross ton)

(per

steel

Scrap

Sept. 27

(per lb.).

$45.88

$45.88

$45.91

$45.07

$27.92

$27.42

$23.33

(E. &

Domestic
•

tin

Straits

at

Sept. 28

17.550c

17.550c

17.550c

23.425c

York)

(New

Lead

(New

Lead

(St.

Zinc

(East St.

July:
All manufacturing

23.200c

17.325c

17.325c

17.325c

Sept. 28

at

rennery

Sept. 28

96.000c

103.000c

103.000c

103.000c

Sept. 28

14.750c

15.125c

15.125c

19.500c

Sept. 28

14.550c

14.925c

14.925c

19.300c

Sept. 28

10.000c

10.000c

10.000c

15.000c

refinery

Export

York)

Louis)

at

at

—

at——

Louis)

at.

•

Durable

All

U.

8.

Oct.

4

103.85

103.93

Oct.

4

114.85

115.04

114.85

Oct.
-Oct.
Oct.
Oct.

4

120.84

120.84-

121.04

4

119.00

119.20

119.20

114.27

4

114.27

114.27

114.08

110.70

4

106.39

106.39

106.21

104.66

Oct.

4

109.42

109.60

109.42

107.09

Oct.

4 '■

116.41

116.22

116.02

112.00

Oct.

4

119.41

119.41

119.41

115.24

Aa

-

A
Baa

;

Railroad

Group

Utilities

Public

Group

Industrials Group

<—

BOND

DAILY

YIELD

All

Average

2.21

Oct.

2.91

2.90

2.91

2.61

2.61

2.60

2.70

2.69

2.69

2.94

2.94

2.95

3.37

3.37

3.38

3.20

3.19

3.20

All

2.83

2.84

2.85

3.06

„

Baa

•

Public

Group

Utilities

Industrials

Group

Oct.

Group

2.68

2.68

COMMODITY

Oct.

INDEX

Orders

PAPERBOARD

received

Production

All

3.47

Percentage of
Unfilled

PAINT

(tons)

AND

197,591

173,980

165.103

Matured

Disability

188,146

Sept. 24

AVERAGE—100

PRICE

91

92

86

94

356,741

128.0

129.1

129.3

LOT

DEALERS

FOR THE

AND

Odd-lot sales by dealers
Number of orders
Number
Dollar

of

ODD-LOT ACCOUNT

SPECIALISTS

EXCHANGE—SECURITIES

(customers'

THE

ON

EXCHANGE

N.

ODD-

OF

Y.

purchases)—

short

Number

short

Customers' other

total

sales

.■**"-■■

sales

17

595,563

351,896

.470,419

$14,312,271

$18,312,782

$21,923,552

SeDt

value

II__Z_Sept!

Round-lot sales by dealers—

23,865

'•

119'

17

23,647

15,022

17

661,842

389,619

17

7,754

17

17

•"

of

shares—Total sales

Short

sales

Other

2

•

I

Round-lot purchases by dealers—
Number of shares^—.

WHOLESALE

PRICES

NEW

2

3

.

.

gept

.

r

SERIES—U.

S.

firms

$12,680,631

$16,102,928

DEPT.

OF

17

\y

'

*

219,630.

.

.

117,330.

$304,428,000

$253,440,000

$699,149
74,697
288,130
547,657
68,667,723
133,642,800

$689,611

$572,784

I

,175,520

listed

of

in U. S

balances—

shares

bonds

71.3%

12-31-24= 100—
U. S. Govt, issues—

index.

borrowings

ESTATE

on

Savings

70.862,046
77.7%

$318,643

$83,814

$170,383

$305,563
79,352
193.910
62,343

associations
companies

;

371,332

239,675

••

$319,534

88,399

84,479

202,634

222,673
73,550

160,655

61,913
170,973

184,270

151,692

158,358

139,817

$953,520

$1,000,920

$1,024,323

$61,263,278

$57,595,284

$124 972,864

—

Miscellaneous

131,610,120

70.1%

SAVINGS

banks—

Individuals

67,279,033
132,812,944

(000's omitted):

Loan
Trust

551,393

CORPORATION

INSURANCE

companies

and

343,111

530,254

NON-FARM

IN

S. —FEDERAL

U.

54,395

76,619
281,841

$144,381
393,318

collateral——

other

FINANCING

OF

LOAN

Mutual

LABOR—

accounts—

borrowings on

Savings and

218,900

of

balances—_

credit

free

of listed

Banks

•

debit

in banks

value

price

Insurance

161",300

188,550

,

36.569,000
40,555,000

customers——

customers'

of

—Month of June

161,300

As

—

margin

net

to

hand and

on

AND

*

188,550

l"62",960

extended

AREAS

$18,454,276

247.300

carrying

customers'

of

value

REAL

7,552

$22,057,937

»■

20.337.000

51,571,000
56,118.000

46,979,000

(000's omitted):

31

18,584
525,682
518,130

■'

....

.1

18,020
-5,355

162,960*

EXCHANGE

STOCK

Member

484,824

247,300*

7,711,000

20,868,000

42,990,000

Member

178

490,179
•

18,762

384,859

Sept. 17
gept 17

~~

-

147

654,088

Sept. 17

.

sales

'

,

'

4,760-

*

Number

'

32,185,000

8,347,000

July:

—

Market
Stock

18,167

15,141

218

$116,083,000

42,636,000

TO

LIFE

—

Market

•

"

17

$124,888,000

-V} •.'• k

•••

OF

values

YORK

Total

566,045

$23,482,936

Isept!
Isept.
Sept!
™Sept

sales

Dollar

19,791

17

Sept. 17

sales

of shares—Customers'

Customers'

16,043

Sept

Customers' other sales

:

'

Isept!

i

Customers'

■

$115,810,000
34,227,000

;

$267,451,000

Cash

12,586 '

1.432
1.262

dividends

Credit

20.147

$1,349

•1.474

payments

Member

gept

value

;.

PAYMENTS

INSTITUTE

—

endowments

Total

Odd-lot purchases by dealers (customers' sales)—
Number of orders—Customers' total sales

1

.•

benefits

Aug.

~

STOCK

COMMISSION:

shares

39.5

*$1,409

143.9
NEW

■TOCK TRANSACTIONS

.

Total

Sept. 30

40.7

*38.8

•1.332

——
•

.

INSURANCE—Month of

Surrender

INDEX —1926-36

—

40.1

*33.8

7,475,000
19,970,000

goods

Annuity payments

358,586

294,327

369,573

'

r

i.

goods

INSURANCE—BENEFIT

403.5

184,605

Sept. 24

REPORTER

L_—.—_

goods

POLICYHOLDERS

344.0

205,128

at__

DRUG

49.80

38.8

■

—

.

t

Policy

OH*

'

manufacturing

Durable

345.0

202,374

-

58.34

♦51.68

2.89

2.68

-Sept. 24

activity

orders

$54.12

*57.35

$1,400
1.474
1.320

—

goods

Nondurable

Death

(tons)

•$54.67

39.1
38.9

/F* *

manufacturing

192,289

Sept. 24

$54.60
57.63
51.35

V

I

—

——

goods

Nondurable

ASSOCIATION:

(tons)

8,232,000

6,923,000

OF

\

341.4

4

7,396,000

Hourly earnings—

t
NATIONAL

DEPT.

S.

goods

Durable

LIFE

MOODY'S

5,314,000

39.0

manufacturing

All

"

Railroad

6,021,000

6,489,000

6,500,000

HOURS—WEEKLY

AND

Hours—

3.33

Oct.

-

*243

Earnings—

3.13

Oct.

A

*243

LABOR—Month of August:

2.94

Oct.

Aa

15,155,000

*—--

——

ESTIMATE —U.

AVERAGE

2.84

;

s_

—

2.22

—

FACTORY EARNINGS

3.10

Oct.

corporate

Aaa

2.22

;

Nondurable goods

2.45

Oct.

Bonds

Government

13,885,000

*257

213

employees in manufac¬

of

goods v

Nondurable

Oct.

S.

315.8

—-—

.

manufacturing

Durable

AVERAGES:

—Oct.

U.

153.5

346.5

*188

189

.

number

Durable

MOODY'S

138.4

13,755,000
7,255,000

-

manufacturing

116.22

103.97

11,335,000

155
222

turing industries-

111.25

.

—
1

-

—

*191

136.8

:

Payroll indexes—

100.70

—

Bonds,

Government

Aaa

152

y

(production workers)

goods

manufacturing

All

Average corporate

181
171
234
204
204

"

.

<

Employment indexes—

DAILY AVERAGES:

PRICES

BOND

421

S. DEPT.
SERIES—Month of

goods

Nonduralbe

Estimated

MOODY'S

9,384,000

255

11,206,000
5,891,000
5,315,000

August:

of

23,805,000

PAYROLLS—U.

LABOR—REVISED

OF

M. J. QUOTATIONS):

Electrolytic copper—

2,864,277

FED¬

$43.16
EMPLOYMENT AND

METAL PRICES

69.448

21,556,000

21,352,000

—

monthly), unadjusted—
Sales (average dally), unadjusted
.
Sales (average daily), seasonally adjusted—
Stocks, unadjusted as of July 31
Stocks seasonally adjusted as of July 31

3.720c

3.705c

146,245

19,012,000

5,637,000

FEDERAL
1935-39

Y.

N.

OF

100—Month

=

105,210

76,661

19,012,000

(average

Sales

103,143

237,131

23,500,000

23,407,000
19,747,000
8,267,000
377

place, Aug.

DISTRICT,

BANK

AVERAGE

112

174

169

181

Sept. 29

1,727,335

2,683,033

16)_

SALES—SECOND

RESERVE

RESERVE

BRAD-

INC.

STREET,

.

&

STORE

DEPARTMENT
ERAL

INDUSTRIAL)—DUN

AND

(COMMERCIAL

FAILURES

1.245,561

312.9

hours per spindle in

Active spindle

INSTITUTE:
Electric output (in 000 kwh.)

KDISON ELECTRIC

728,863

884,175

(DEPT. OF COMMERCE):

Spinning spindles in place on Aug. 31
Spinning spindles active on Aug. 31—
Active spindle hours (000's omitted) August

319

252

315

292

Sept. 24

455,106

4,143,183

OF COMMERCE):

(DEPT.

Running bales (excl. of linters to Sept.
COTTON SPINNING

DEPARTMENT

$658,205

2,209,000

7,485,000

103,262,000

^4
Sept. 24

at

Gas, oil, and distillate fuel
Residual fuel oil (bbls.) at

.

nonresidential

Additions,

16,705,000

7,419,000

output

residential

New

5,285,000

6.555,000

■

Sept. 24

GaroVand'distillate fuel oil output (bbls.)
Residual

New

5,343,100

4,717,350
5,215,000

—Sept. 24

gallons each)

oil

of

LABOR —Month

OF

July (OCO's omitted):
building construction—.——,—

f'

lending

institutions—

Total

——

y

-1

1926—100:

,

All

commodities

Farm

SeDt

products

I-I

—

_II

Textile
Fuel

than farm

and

Zsept!

metal

./

products

materials

154.1

152.4

158.9

SELECTED INCOME ITEMS

167.8

II!

other

187.7

162.1

166.3

161.9

185.3

27

145.5

145.9

144.9

153.3

Net

97

140.0

141.1

140.1

147.7

Other

~gept]

27

131.4

131.0

130.0

136.9

Sept. 27
Sept. 27

"""

161.6

27

Sept"

H

162.4

S6pt

foods.
__

lighting materials

and

Building
All

other

products

and

Metals

II

■

commodities

152.4

SeDt

FOOuS
All

97

168.9

169.3

167.9

172.0

190.2

190.2

188.8

203.7

27

Sept. 27

123.9

124.7

124.2

EYS.

Income

Sept. 27

Livestock
Meats

•Revised

Ism

1941

to

199.1

.Sept. 27

220.8

208.1
230.1

—

Hides and skins_.

years

155.1

to

1948

figure.

The^ffht^nd'!? abarr,?ls
Inclusive.
mi&S
date




.Sept. 27

foreiSn crude ™ps.

198.9

198.9

.

.

170.<

203.5
225.7

198.6

Commission)—

income

—

deductions

available

after

for

fixed

—

14

934,404

82,089,225
45,505,179

69,629,578
35,189,721

134

603,598

3,029,253
42,475,926

—

—

2,980,682

income

Dividend
On

94

33.818.847

31 050,032

23,749,206

20.565.848

52 ,253,433

28,478,263

11,029,522

1,055,752

projects——__

32,209,039

12,844,577

equip.)—

taxes

common

stock

preferred
of

3 180,253

9,516,454

2,261,056

2.24

2.02

3.64

1,373,441

j

1

425,246
371,679

appropriations:

On

Ratio

97, 605,499

34.029,070
1,372,995

income

Federal
.

209.5

3,186,305

'

279.)

fThe weighted finished steel composite was revised for the
,or the 7 years 1937 t0 1940 incluslve and

149, 538,002

2,582,771

charges—

-

iAmortization of defense

{s

263.<

'

24 565,138

72,815,883

income

charges

fixed

deductions

from

15,220,599

84,671,995

^

Depreciation (way & structures &

152.9

.

23,408,718

income

Income

Net

158.4

;

June:

Miscellaneous

135.3

Commerce

I

income

Total

Special Indexes—
Sept. 27

of

railway operating

Other

Grains

(Interstate

Month

U. S. CLASS

OF

income

—

—

—

stock—
to

•Revised figure.

fixed

charges—
,

-

]

Volume

Number 4844

170

THE

COMMERCIAL

fears

The State of Trade and

Industry

of the
of

auto makers

steel

hand

on

thus have

and

at

Most

minimum of about 45 days' supply
of the Big Three have 60 days'

a

least

two

supply of steel. The steel pinch will be felt first by the parts makers
who supply these firms.
The appliance industry has also bought a lot of steel in recent
But, unlike the auto makers, this industry went through
period of severe inventory correction early in the year when the
its products became glutted.
The recent revival of de¬

market for
mand

for

appliances, plus the threat of a steel strike, caused them
buying. However, much of their steel has been going into
production as soon as it was received, this trade paper asserts.

to

start

The American Iron and
that

the

operating

rate

of

Steel Institute announced this week

steel

companies

94% of the
steel-making capacity of the industry will be 8.2% of capacity
for the week beginning Oct. 3, 1949, as against 84.6% in the
preceding week, or a decrease of 90.3%, or 76.4 points.

r

seed oil and

a

week's

steel

operating

is equivalent to

week

a

and

1,757,400

tons,

and

1,281,210

tons

entire

84.2%
old capacity
or

month

All classes of livestock continued to

workers.

steel

rate

Domestic cotton markets
low

with

total

operating

were

as

Farmers

ing week.
the

It represented

a

a

below the preced¬

decrease of 276,482 cars, or

for the

week

5,521,238,000 kwh. according
represented

72,684,000

to

ended

Oct.

Mill demand
aided

the Edison

kwh.

stood at $6.70.

Overland and Hudson.

year

a

ago

'

was

the U.

S.

was

and

>>;:
made up of 124,457

4,787

cars

and

2,433

121,475 units and, in the like period of

1941, 76,820 units.

/

Commercial and industrial failures rebounded to 181 in the week

Sept. 29 from the preceding week's 169, Dun & Bradstreet,
Inc., reports.
Considerably more casualties occurred than in the
comparable weeks of 1948 and 1947 with 112 and 77 failures, re¬
However, they remained far below the 264 in the

vious
of

85,000

or

more

increased

a
year ago.
Those with
liabilities under $5,000, remained at 41 for the third consecutive

same

week of 1948.

Retail, wholesale and construction casualties were higher, while
manufacturing and commercial - service failures fell the past week.
Retail and construction failures ;r«ma|tered almost twice those of a
ago.

year

Casualties
and

West

to 44

were

South

higher iri-^he New^England, East North Central
states? fwhile''?$diddle Atlantic failures fell

Central

and Pacific Stales

from 53

failures than last year in
states.
'
WHOLESALE

remained

alFgeographlh
•

at

areas

The daily wholesale

There

were

more

except the Mountain

273.88

on

as

a

date

same

£omrt^i^/j>rice index, compiled by Dun &

a

yearihgo.

markets continued

result

of

currencies.

to .he unsettled last week, largely
liquidation; ^induced by devaluation of foreign
,

earfy in, the period but cash wheat held
quite steady, aided by -government pjir^hases of the cash article which
has been stepped

u^^^fe^st:|^i^Weeks.

The

trend

in

corn

prices

was^dwer,

receipts add Increased" offerings of




f

influenced
new

corn,

raw

;

.

.

.

.

cotton in the United

added to working capi*

or

,

The

company, incorporated
and the second largest of

1941

kind

in
its

in

Israel, is engaged prt^
marily in the business of spinning
raw

by expanding

coupled with

into spun

cotton

The

yarns.

'h>vy

Israel,

past, Palestine Cotton Mills,
part of its own
production by weaving into
converted

SI. '/
price

-v;

pound of 31

per

year leased 40 looms
it to another company.

Spindles now owned by
total 11,300 which

was

of the rise

of recent weeks was

weather and to

unsettled

generally

labor conditions

buying of apparel slackened

consumer

with

week

the

unit volume

aggregate

pounds of

lessened

interest

in

coats

company's productive capacity to
yarn per annum.

The company
in 1942.

eated

continuing to

of

a

and
year

total

earlier.

discernible

in

did

plant is bl¬
the outskirts bf Tel-Aviy

on

in the suburb of Ramat Gan.

Upon completion of the finaiic*
ing there will be outstanding in-

sportswear remained high

suits.

Retailers

continued

:
as

not

^

in the preceding
considerably from that

much

vary

as

Consumer resistance to expensive meat cuts

was

localities, but poultry* and dairy foods gained

some

oper¬

Its

The sales volume
Promotions of men's suits drew

dipped slightly.

dollar volume

commenced

debtedness of $148,263, payable in
three annual instalments ; begin¬

and

Retail, food merchants sold about
week

The act-

approximately 3 million pounds of

ations

some¬

housedresses than they did a year ago.
wear

annually.

yarn

to

The demand for women's dresses and

more

are

ditional spindles to be purchased,
it is estimated, will increase the

UNFAVORABLE WEATHER AND

hold slightly below that of the comparable 1948 week.

with

the

company

continued

tempo of

last

by

*

•

sections.

some

owned

period ended on- Wed¬
virtually unchanged from that of the pre¬
to be moderately below the high level
Dun & Bradstreet, Inc., reports in its latest summary

BY

unfavorable

ning July 1, 1951; 2,380 shares of
5% preference stock- with a pqr
£10 per share; and 600,*

value of

000 shares of
a

£1

a

stock

witit

share.

common

value of

par

1

in

popularity. Housewives bought more canned goods than they did
a year ago.
Bakery products were in increased demand.
^i Consumer buying of furniture and household goods continued
at a moderately high level the past week.
The sales volume of inci¬
dental

furniture,

housewares

and

floor

coverings

Interest in television sets continued to rise.
ment

were

sought by

mated to

mates

varied

from

centages:
New

below that of
of

a

large.

,

period ended

levels

the

remained

year

a

ago

by the following per¬

ATLANTA, GA.—J. W. TindaJl
has

Co.

fices
Bank

in

England and Pacific Coast —3 to —7; East —2 to —6;

a

'

"

sales remained

week

a

decrease of 7% in the

year

ago.

preceding week.

Sept. 24, 1949, sales registered

ing period

a

For the four weeks ended

decrease of 6% from the correspond¬

and for the year to date

a year ago

improvement and sales volume made
comparable period

a

decline of 5%.

a

year ago

a

better showing with the

than in the preceding week,

r

„

1

<

Board's index, department
store sales in New York City for the weekly period to Sept. 24, 1949,
decreased by "11% from the same period last year.
In the preceding
week a decrease of 5% was registered below the similar week of
1948.
For the four weeks ended Sept, 24, 1949, a decrease of 6% was
reported under that of last year.
For the year to date volume de¬
creased by 7 %.
- :
According

to

the

Federal " Reserve

another

of this issue the reader will find the
of business and industrial statistics
showing the latest week, previous week, latest month, previous year,
etc., comparisons foe determining the week-to-week trends of condi¬
tions, by referring to "Indications of Current Business Activity,"' a
most

comprehensive

&

with

of¬

Southern

in

the

Partners

are

engage

business.

Tindall, James B. Dean,
Austin and Eugene F.
Willis.
All
were
formerly with
Brooke, Tindall & Co., of which
Mr. Tindall was a partner. J. D,
Chesnut, Marie O. White and Car*

moderately below the figures for
Inventories for most durable roll E.
goods were affixed to immediate consumer demand with spot order¬ firm.
ing much in evidence. The unclear labor situation and the uncertain
results of the foreign currency devaluation were held somewhat
responsible for present declines in buyer commitments in some lines
Department store sales on a country-wide basis, as taken from
the Federal Reserve Board's index for the week ended Sept. 24, 1949,
decreased by 8% from the like period of last year and compared with
dollar

comparable

formed

Citizens

Building to

securities

Jerome

Nationwide wholesale buying increased slightly during the week.
the

been

the

Julian W.

South and Southwest -r-4 to —8; Midwest —5 to —9; and North¬

Aggregate

■

Formed in Atlanta
&

Wednesday was esti¬
year ago.
Regional esti¬
on

■

west —1 to —5.

J. W. Tindall S Co.

Fuel and heating equip¬

many consumers.

be from 3 to 7%

NOTE—On

Wheat futures declined

market

States

STRIKES

and

year ago,

what

.

remained^ bomparatively steady last week following
preceding.
The index closed
Sept. 27, conff33T^,with 243.38 a week earlier and with

the

Grain

week

The

DISPLAYED A

WEEK

the downward movement of the week
on

purchase
tal.

Retail trade in New York last week reflected greater seasonal

Bradstreet Inc.,
et,
at 245.14

a

^4

COMMODTi^BRICE T&DEX

STEADY TONE THE BAST

39.

financing

purchase 3,000
spindles and auxiliary

expected to produce henceforth at
the
rate
of
about
2V2
million

to

corre¬

to 140 from 128 and exceeded the 96 of

week, comparing with 16 in the

stock

":v,, ;Y;'v:1.

The abatement

sponding week of 1939.
involving liabilities of

loan

the

to

equipment; for the acquisition of
140 automatic
weaving looms; anA
to pay off secured indebtedness
of
approximately $92,500. Any re-*
maining balance will be used to

Ltd.

Total retail volume in the

ended

Casualties

government

The dollar volume of retail trade in the

•

.

,

BUSINESS FAILURES ADVANCE IN LATEST WEEK

spectively.

1949

from

used

^

nesday of last week

of children's

trucks in Canada.

Output

the
;

.

AFFECTED

sell

by Kaiser-Frazer, Willys-

output for the current week
in

into

favorable response in some areas, v

DEALER STOCKS MOUNT

19,360 trucks built

cotton

/ //., :-Y;. -V*
The index represents the sum total of the

Institute.' This

According to "Ward's Automotive Reports" for the past week,
motor vehicle production of the United States and Canada declined
to an estimated 151,037 units from 158,007 units
(revised) in the
previous period, caused by a slight cutback in General Motors' over¬

and

of

low level.

a

be

Continuing the decline of a week ago, the wholesale food price yam
index, compiled by Dun & Bradstreet, Inc., fell to $5.67 on Sept. 27, cloth and will resume that phase
only slightly above the year's low of $5.66 recorded on three other of the business upon installation
occasions this year.
The current figure of $5.67 compares with $5.72 of the automatic looms. In antici¬
the previous week and with $5.85 two weeks
ago, or a decline of pation of the purchase of the new
3.1% in the two-week period.
At.this time a year ago the index looms the company earlier this

at

reported for the corresponding period two years ago.

The total

active rate aided by

an

recent strong demand for textiles.
The average consumption
working day during August was 28,900 bales, a rise of 25% over
the July daily rate, but 13% less than the 33,100 bales for August,

in

1.3% higher than the figure reported for the
2, 1948 and 586,387,000 kwh. in excess of the output

time work and the suspension of assemblies

easily absorbed,

light

AUTOMOTIVE OUTPUT REFLECTS A LOWER TREND AS

cars

were

per

Entries

share.

Proceeds

by the current low level of mill stocks,

year.

for 300,000 shares, erf
stock of Palestine Cotton

Mills, Ltd. (Tel-Aviv, Israel). The
stock is being offered at $4.25 a

will

the

or

week ended Oct.

fairly good and offerings

was

certificates
common

holding
govern¬

but

by The

Guardian Securities Corp.
offering consists of American

additional

attributed

1, was estimated

Electric

considerable

prices moved closer to

Consumption of the staple continued at

v.

decrease of 34,403,000 kwh. below the preceding week,

a

freely,
as

ment support levels.

of trade.

The amount of electrical energy distributed by the electric

industry

sell

RETAIL AND WHOLESALE TRADE VOLUME ADVERSELY

<

ELECTRIC OUTPUT RECEDES FURTHER THE PAST WEEK

power

to

sections

some

formally recog*
State of Israel last

new

was made Oct. 4

In the

decrease of 247,120 cars, or 27.2% below

corresponding week in 1948, and

markets

YEAR'S LOW .LEVEL

29.5% under the similar period in 1947.

and

continued

reported in

was

foods in general use.

decrease of 81,550 cars, or 11%

a

10

fairly steady at cur¬
continued to increase

ago were

markets

spot

aggregating 381,400 bales during
the latest week, as compared with 344,400 a week earlier and with
215,800 in the corresponding week a year ago.
1

Loadings of revenue freight for the week ended Sept. 24, 1949,
totaled 661,472 cars, according to the Association of American Rail¬
was

in the

sales

The

week

a

in

the United States

nized the

'

time was 5.5% of capacity with
Only a minute number of steel pro¬
the walkout suspended more than 90% of

CARLOADINGS DECLINE BY 11% IN LATEST WEEK

This

Activity

public offerings

WHOLESALE FOOD PRICE INDEX IN LATEST WEEK CLOSE TO

the country's total steel production.

roads.

levels.

One of the first

in the American market of securi*
t^es of an Israeli corporation since

First

increasing market receipts.

rent

ago,

output placed at 96,000 tons.
ducers

lower under pres¬

Market

on

By First Guardian Sec.

January

•

that

at

move

Stock Placed

yarns are marketed within

r

:v'C

The

of

sure

,

or 97.5% of the
one year ago
for the average week in 1940, highest pre¬

year,

.

season through Sept.
12, as reported by the CCC,
only 20,959 bales, as compared with 215,200 bales reported
during the same period a year ago.
" ;

The date announced by the

-

although total volume was only fair as buyers
small lots for immediate or nearby shipment.

Entries for the

'■
i'.-.V
-i'r)
Institute is the lowest since Feb. 11,
1946, when the steel mills were also closed by a strike of the steel-war

slight increase in bookings of hard wheat bakery

a

to

compared
a

33

Iiil6 SciiwS iulils

of

151,000 tons

industry,

1,552,200 tons,

ago,

grains.
seeding of

those

the

Volume of business in cotton textiles remained at a relatively
high level although demand for* cotton gray goods appeared to taper
off somewhat as the week closed.V
'
V'
!; / :

nation-wide steel strike called

castings for;the

ingots and

1,559,600 tons

.•,

rate

of

for

totaled

last Friday at midnight by the CIO United Steelworkers.
This

favorable

The decline was induced by weakness in cotton¬
sharp break in hogs and fresh pork.,
:-• *.

a

remained at

The sharp drop in the scheduled rate of steel operations was

due to the immediate effects of

importations

were

the government.

last

having

Canadian
week

Spot coffee prices remained firm but futures were easier with final
quotations well below a week ago.
The trend in cocoa prices, both
actuals and futures, was downward throughout the week.
Liquida¬
tion and selling depressed lard prices despite heavy purchases by

any

-

was

flours the past week
held commitments to

Virtual collapse of steel mill interests in scrap failed to produce

sharp price changes this week, except at Chicago where the price
of No. 1 scrap fell $3 a ton. This lowered "The Iron Age" steel scrap
composite price to $26.92 per gross ton. Large tonnages of steelmaking scrap are on the ground—in yards of dealers and brokers and at
Great Lakes docks.. The only heavy open market buying of the past
few weeks was by mills that are not now
struck, concludes "The
Iron Age."

last

(1381)

Winter wheat in most sections of the belt.

weeks.
a

conditions

There

uncertain market for their products.

an

CHRONICLE

FINANCIAL

competition ' of

Weather

(Continued from page 5)

During the past several weeks the automobile industry had been
buying steel frantically. Pressure for delivery became intense, "The
Iron Age" notes. In addition, auto makers, with an assured market
for their cars, didn't cut back inventories severely, as did some other
industries which faced

of

&

page

coverage

regular feature in every Thursday's issue of the "Chronicle."

'

H.

Banks
:

are
.

also

:

with

the

34

Thursday ( October 6, 194

THE COMMERCIAL & FINANCIAL CHRONICLE

<j-

(1332)

or that type of State control, directly or indirectly, over
farming in this country that is costing the nation literally
billions of dollars every year. Apart from robbing urban
Peter to pay farming Paul, it has steadily stimulated or en¬
couraged many men to devote much energy and capital to
the production of goods no one in the world wants badly
enough to pay for. Indeed, it is certain for all practical pur¬
poses, that it has succeeded in having goods produced in
this country which no one would have in such quantities
at any price, and which no one abroad would have even
at the price of shipment to them.
.

this

As We See It
page)

(Continued from first

fact of common observation that organ¬
been demanding—and getting—more and

It is, of course, a
ized labor has
more

while past.

for less and less work for. a long

wages

definitely under way even during the
war, although glossed over by the politicians and ob¬
scured by various special factors present at the time#
The process was

7\77'X.y;:77. Higher and Higher
there has been

of hostilities,

end

Since the

one

The

con¬

higher and higher wages. When shorter
explicitly—and even when

tinuous demand for

of the Fair Deal is

answer

please the producer by paying him to produce. In effect,
it would guarantee the producer prices he wants and
the consumer abundance at prices he demands. Doubt¬
less the Fair Deal managers hope that no one will be
too curious about who pays the inevitable bills.
Here
is a bit of statism which is not only economically hope¬
less and even silly, but tremendously expensive..7

business conditions began to give
concern to many in public and private life.
To many the
economic merrymaking seemed to be coming rapidly to
an end.
Much more sober thought about where we were
really headed

in order. For

was

a

(Continued from first page)

And,

the

so

There

some

farm

New Deal

of
government to control and direct the policies of business
enterprises.u
^
;-;7; 7:;^-777; »,> ■

v

legislation) and the extra legal

"Fourth

But the unions had
ceeded

in

in

some

in

one

,

industries,

But this is not the whole story by any means. How
does it happen that one union—we had almost said, one

by

a

nod of his head?

as

well say,

or

influence?

turing industry,, or

down at the order of
of

Much the

men.

one

same

of other industries.

a

management is concerned. It is obviously all

a

Turn

now

as

a

result

of

overall

costly

agricultural
one.

Of

operations

course,

program

behalf

this is but

a

of

we

have

an.

for

soothsaying

my

After all, it is not, and
be, so much what an
economist's general opinion con¬
not

cerning the business outlook is,
the

reasons

that

is

in

are

sons

he

has

him.

the

for

Briefly,

as

faith
rea¬

my

follows:

as

I.

The

in trade

holiday expan¬

and

to be with us

seem

tend¬
ing to the conclusion that the rest
of 1949 is "in the

bag."
(6) I will add merely that the
stock market seems to be going
in

a

;

*

clusion.

;

thought that you
gentlemen will do well to count
on
a
high level of general busi¬
ness and further improvement, for
the next three
II.

four months.

or

The

February:

that),

the

that

is

it

will,

reces¬

at

least

carry

gust

business

as

was

even

part of the

effort to exert

turned

up¬

after due allowance for
~

sea*

7-'. 7

7

f

(3) Particularly notable, how7
ever, is the fairly well-sustained
level of building activity. ^Such
activity is at a sufficiently high
level to help sustain business and
warrant

some

(4) This

brings

us

small

part

activity

1

recovery.

condition

of

f i

building

at once to the factor of

government

of

a

have

spending; for no
the high building

of

represents

various. kinds.

public

works

far

peak
rate

middle

am

such point as next
not so sure, and

therefore,
seem

at once em¬
in the situa¬
the

be

to

shipped

This

stalled.

usual

is

th
were

in

and
in

booi

Since that time, the un
hqv
a
large recession.
Soor
recession

this

began,

more

Now the number installe

orders.

also

has

off

fallen

sharply,

anc

have

got back into line with th
declining
unfilled orders.
Both
are

falling

now

This

condition

least

the- first

been

off

slowly

but

that

indicates

big

a

ha

recession

closely; re,
in early 1938
on since abou

completed.

It

sembles the position
What

the

has

gone

middle

of

1948, is, I think,
adjustments ir.

series of corrective
various industries.

First

alligator

clubs,
Then

cession

in

and

nigh

automobile

etc.

the dike

followed by

soon

was

as

handbags,

radios

came

This

recently,

more

the

tires,

bers

of

the

re¬
anc

Stih

refrigerators' and

electrical appliances
house-cleaning. The
have

th

came

recession in luxuries such

have

had

latest mem-i

recessionary group
non-ferrous

been

rayon,

metals, and heavy petroleum and
its products, notably fuel oil. In
each

of

these
cases,
there, has
overproduction,
excessive
stocks, price reductions, and. a
gradual restoration of some meas¬
been

of stability.

ure

Now the outlook;

for cotton textiles has

greatly im~)

The prices of

non-ferrous1

metals

have

rebounded

with

in¬

creased demand.

It
may
be that
one
of the
strongest
indications is factory
employment. I know of no single

gives
picture of the business
cycle and which is less erratic and
fluctuating in its movement than

basis

truer

such employment.

with

great interest.

velop.

'

Therefore, the

upturn in August is to be watched
sustained

"A"

o

with

locomotives

actually

being

line

of

out

which

at

will

for

If it is to be

another

month

,

it

strongly confirm the hypoth¬
am here presenting.

First, I am going to put the
hypothesis that we have been un¬
dergoing a real business recession

esis

which I

(Of

course, due allowance must
for seasonal variation in

which has been either interrupted

judging the figures.)

stopped

or

at

bot¬
therefore

upswing may
reasonably expected to carry
on for the usual period of a cycle,
say for a year or two, possibly to
most

1952.

This, I regard as a
important point. M,y whole

reasoning hinges on the idea that
an upturn in business at this time
is more important than it would
be

at

times

other

not be called

We

when

it could

to

be corrected

the

of

top

the recession

and

that began in 1948 was
I

call

the

your

corrective.
attention to the fact

it is the

that

in

same

declines

first recession since

which

there

occurred

time large and
not

market; but

only

■

in

in

also

:

The

reasons

for

at

sustained
the ' stock

commodity

markets and in industrial

tion.

produc¬

this

were:

farm

prices were too high as a
working basis for business.
Pro¬
duction was too high to be dis¬
posed of through sales at the
then existing prices.
(This was
clearly the case in the textile in¬
dustry.)
The cost per man hour
of labor to produce the average
commodity was
too
high.
All
these things have been somewhat
corrected during
the past year.
Farm prices are down and so are
textile
prices.
Production
has

Government
spending has been stepped up and been reduced
is
being used more effectively the .modified

to

a

level which at

prices

What

is

in

line

I

have

said

777 77:7"
far

thus

ap¬

plies to the ordinary 40-month
cycle for business in general.
In

addition,

note that I

find

a

ten-;

dency toward a two-year cycle in
textiles,
notably
cotton
manu¬

facturing.

In my judgment, there

is very good reason to believe that
the
bottom
of such a
two-year
textile

cycle

reached.
in

cyclical.

from

start

be made

sort of

some

An

1937

already mentioned. Au¬
statistically an up-month,

sonal variation.

the

the fol¬

Certain important barome¬

of

ward

are

the

1948, the unfilled orders for loco
to a very hjg

for any opinion that one may de¬

re¬

upward for several

By

on

cycl

business measurement which

Long-Term

some

which

about

truly cyclical, and that it has

of

I

as

business

motives had risen

a

Beyond

pictur

me

industry

the

clearly.

very

proved.

Thus it is my

be

Near-Term

believe

to

this con¬

favprable to

way

tom.

to the period between

as

and next

ters

part

of the Fair Deal, but it is

Add it all up, and




in

per¬

pose.

should

(2)

Costly Example

its

much

So

optimism
lowing points:

agriculture—another source of millions of votes. The
Commodity Credit Corporation has recently announced that
it has another loss to report — this time
running to $600
—

upturn

sion

this year, and this is a factor

tion

short-term

con¬

in

000,000

and

of

The usual

noted.

phasize the factors

likely to

from labor and labor unions to the situation

farmers of this country.

be

for at least another year,

months before the recession might
be resumed.
The reasons for this

and parcel of the modern trend toward statism.
Another

to

February, I

haps until about 1952.

.

return

the
bounding,
after
a
considerable
preceding boom which was that of
amount of correction, and under
immediate
postwar
prosperity.
the
existing
conditions
seems
There were many maladjustments

of New Deal and Fair Deal managers which
for years have been fostering this
monopoly in American
industry at the same time that they thunder in the index
against what they elect to term "restraint of trade," so
as

is

scene

sibility that, if the current recov¬
ery lasts till February, it will go

sequence

far

the

too,

Fall

that it is my furth'er opinion
that there is at least a good pos¬

sure

is closed

situation which is

Then,

seasonal variation to the statistical

once

was

small group
thing might be said of dozens
a

1950.
Beyond that point, the visibility
becomes poorer.
But I will say at

hit bottom recently.
If it has not
hit bottom (and one can not be

man, or one very

Here is

the
the

sion that began about a year ago

The automobile manufacor

I do not know, but
opinion that there is a

and possibly tp about Feb¬

reason

might almost

unit in it, operates

any

and

swing left

(1) I think that there is good

industry of

the courts of the United States—are help¬

less to control
-

we

upturn

now

How is it that the

States—and

President

the

probability that
will carry through

First,

coal mines of the country can be closed, opened, put on
short rations, or in virtually any other way controlled
or restricted
by one cantankerous figure which even the

President of the United

Will

ruary,

being able to say with a show of truth.that
employers have said "no" to the President of the United
States. If their further allegation that the employers have
also said "no" to the American people is not wholly true
that is no fault of the Fair Deal managers who have con¬
trived to give the American people the impression, or, at
the very least have permitted the unions to give the im¬
pression, that the Washington Administration is quite in
sympathy with proposals which the steel companies have
been obliged to refuse.

the nation

diffi¬

my

year,

case

man—is able to shut down the entire steel

about

labor

reasonable

powers

other

is

it

Round"

closed down

large

before long?

such

have

and

of

What

his advisers do another

friends, and they have suc¬
obtaining important "fourth round" concessions

instances

face

other

and

culties?

•

;

The

the

currencies?

strikes

lieve (at least for political purposes) in intervention in
their behalf—that is, in the use of the legal (pursuant

diffi¬

of

Can prices be

surpluses and devalued for¬

eign

surely) in the business outlook, had it not been for the
fact that the unions had friends in high places who be-

to

number

a

in

maintained

recent improvement in
the business situation and possibly (though by no means

/

are

case.

(I will return to this point.)
(5)

concrete, let

reflects

that

textiles, notably the latter.

than has sometimes been the

one

culties and doubts.

of events might well have

course

the

this way: Is the recent
that
represents
a
major move—will it be sustained?
upturn

concessions, appeared to be very nearly out of the ques¬

shaped themselves despite

putting

by

answer

question

time another "round,"

this time the "fourth round" of wage increases and other
tion.

the

for

be

To

the, locomotive

installations becoming relatively
high compared with the unfille

long-term Business Outlook

year

hav

costs

the number installed by th
railways rose to a sharp peak, the

'

last

labor

extent

some

over,

Contrasts of Near-term and

Late

productiv

been reduced.

after

Recent increases in unemployment and the
spread of joblessness may have resulted in
some improvement in the Willingness of men to give a full
day's work for a full day's pay, but any improvement which
ALL WE CAN SAY IS THAT WE HOPE THAT IF
may have occurred leaves the situation far behind what it
was even in 1939 after a half decade or more of pampering by
THE FAIR DEAL CANDIDATES DO NOT PERMIT THE
the Roosevelt New Deal policies. There has been much talk CHARGES OF "STATISM" TO INFLUENCE THEM, THE
of "rounds" of wage increases and the like, and it is true, PUBLIC WILL.
:r
of course, that these matters appear to develop in waves as
it were, but throughout all the months since the war, cer¬
tainly until the end or near the end of 1948, wages were
on the rise and special "benefits" more and more granted.
amount of pay.

threat of further

to

shown

by having the taxpayers shoulder the cost burden, and

they have, in many instances—there have been liberalized
vacation privileges and other provisions of labor contracts
which shortened the number of hours of work for a given

The

filled orders for locomotives

consumer

hours have not been uenianded

sales.

ity of labor has improved so tha

periods.

proposal which

a

would relieve it of the condemnation of the

retail

with

has

just

been

Cotton mill consumption

July

hit the lowest point in
and then rebounded sharply
in August.
This move,, aa usual
followed a sharp decline in the
margins made by cotton manu¬
years,

facturers

in

converting a pound
a pound of yarn or
cloth. These margins fell with ex¬
traordinary sharpness from Feb¬
ruary 1948 to June this year, and
into

of cotton

have

been

now

months.

rising

for' two

The

situation is fclosely
parallel to that found in the lat¬
ter part of 1938 which you will
recall
was - the 7 beginning
of ; a

rise in the business cycle.
I

would

many

the

say

clear that

so

dence

goes,

might

occur

all

that

there

are

so

parallels between 1938 and

present

time
far
a

as

as

to

make

it

empirical evi¬

cyclical

recovery

at this time. Despite

the

difficulties, uncertainties:
maladjustments, the thing is

and

possible.

7

Phases of Minor Recession

As

an

situation
a

economist, I analyze the
as follows:
We have had

minor recession in the shape

of

Volume 170

Number 4844

hat is sometimes called the
mary postwar

pri¬

recession. This has

rices

two phases: First,
reduced and volume

were

hereby maintained.
ion

began

948.

in

Then

the

This condi-

latter

of

part

more

recently the secnd ph&se has developed in which
roduction and the quantity of
pods pold has declined while prices
Ave been better

has

eason

maintained. The

been

narrower profit
rgins. " While wages have been

aintained.

hours

of

have

work

shortened. The less efficient

een

rginal

see

ncreasing
mall

have

concerns

We

own.

this not

number

closed

only in the

of

relatively

business

failures, but also
layoffs, reduced hours, less
vertime work, etc.

n

As

result; sufficient curtail-

a

ent

and

inventory

to allow the

occurred

ave

reduction
more

ffieient and better-financed

con-

to hold its own or expand

em

perations
ost

cases,

its

at a level which, in
allows a reasonable

profit.
want

to

ext couple

it

that

say

is

my

of years is not good

-ill-financed

ill-managed
concerns, or those of a speculative
character.
I
believe,
however,
that any well-established, wellorganized, and soundly-financed
enterprise,
conducted on what
may
be
called
an
investment
basis, has little to fear.,
or

Conditions Working for Recovery
Such
dence

statistical evi¬

being the
related

as

to

the

.

business

cycle, it is well to ask next, what
are the conditions which at this

for'

working

are

recovery

and to what extent are they off¬
set by unfavorable condition -for unfavorable conditions
like
the poor, we always have with us.

First, let

us sum up

the construc¬

tive conditions that favor an up¬

swing. These I would list as fol¬
lows:

.

*

(1)

Commodity;; prices

have

shown

signs of stabilization, and
have recently been declining less

rapidly.

The

statistician

eye

can

of the

see

in

trained

the

com¬

modity price curve indications of
what is sometimes called "bottom¬

ing but." Moreover, certain sensi¬
tive commodities, which represent

tiie" forces of demand and supply
working in free markets,

relatively
upward.

only,

case

with

not
but have
is notably

low*
This

turned
the

one

of

are

the

most

sensitive of all, namely the price
of steel scrap. The same condition

a

by improvement in bonds, which
lends support to this

thought?
(3) Building activity is an im¬
portant factor which on the whole
is, tending to maintain the volume
of business. Building permits in¬
in

creased

August. So .did the
engineering construc¬

of

tion contracts/ Total

put in place was not only
larger
than
in
the
preceding

Public;

social

radieal

reform

mod¬

erated

(or at least allowed to
wait), the Brannan farm ,program
shelved, etc. .Clearly at a good

points Congress has shown
a
surprising degree of political
independence. Personally, it is my
many

observation that the performance
of our British cousins with their

Laborism, Socialism, and dollar
shortage has had the effect of dis¬
illusioning the average American

construction

* was

I suspect that even a good many

18%

above the preceding year, and
road repairs and construction well
afford

a

vast

for

market

laborers

the

continuance

how

wondered

of

their taxes

lieve

building materials in many
States. Unfortunately this is not
the result of free economic forces,
but does anyone doubt that we
count

have

much

labor

and

the

austerity

goes

to re¬

practiced

by

British laborers.
One thing of which I am reason¬

ably

is

sure

that

the

persistent

and sustained rise in the average

of

price of public utility stocks which
has gone on this year is pretty
definite
evidence
of
increased
(4) Automobile sales are high. confidence in American private
Unquestionably,
there
will
be .enterprise.

can

on

the government spending that will
this heavy building activity?

<

seasonal

some

relation

the

to

commodities

as

as

low
of

average

it

did

in

the

bottom year 1938.
*

This

is

to

nothing of the
artificial price supporting forces
such as government farm-price
pegging, stock piling of war ma¬
terials, and the operations of ECA,
(However
little
we
may
like
these, things, and however bad
say

,

be

for the

of
economic life in America, the
may

businessman

'with them

still

has

during the

future

to

reckon

next

few

years.)

£urned upward, such as orders for
machine tools and for paperboard.

indexes of department
stores have shown some improve

JThe sales

ment. Business loans have turned

bit. I would call attention
iparticularly to the fact that the
a

jratio of bank debits to commercial
Joans has shown an irregular but

persistent recovery for several
months. This

means

that the vol¬

In this connection, one element
should be mentioned, al¬
.

in the

demanding low-priced basic cars
without ehrom ium and gadgets.

ance,

The

months the volume of instalment

plaindact is that the relative¬
large
incomes
received
by
farmers

laborers and

are

now

a

so-much-larger proportion of the
total income that the number of

people who are able and desire
buy cars today, is larger than

shape of consumer resist¬
it appears that in recent

business

is

"Vrising' to

new

,high

levels. Certainly there are many
among us who are not .worrying
too much about the future.

(1.0) The two foregoing points,
government spending and business
confidence, lead directly to the
;
(5) I will give a distinct place next point which is one of the
to the improvement in the cotton two or three .mpst important, it
textile situation. This great indus¬ is that inflation marches on.
I
,

to

before.

ever

try

has gone through its

period

not

only in England, France,
Brazil, but in the U. S. A.

mean

of

at

was

high level

a

com¬

(§) The housing shortage
rapidly being reduced.

is

(6)
The
industrial
postwar
plant construction program is well
along, and heavy industries in
general are cutting back their
programs.

(7) The automobile demand has
shown some signs of at least sea¬
(8) Exports are down and are
likely to be reduced in some
cases
by the devaluation of the,
foreign currencies.
(9) 'Taxes remain both heavy
and discriminatory^ notably in the
case of corporation profits.
(10)
Some signs - of overexpanded
credit appear first of
course
in
the shape
of public
debt, but second, also in the shape
of home mortgage loans regarded
as a percentage of the disposable
personal income of the people,
(11) Bank credit fundamentals
have begun to tighten up a little
bit inasmuch as the earning as¬
sets of the banks (their total loans
and investments) are growing' in
comparison with their total de¬
posits.
Such is the Benjamin Franklin
balance sheet. The points in num¬
ber ;are 13 to 11, 13 for expansion
to 11 for recession.
(Or if you
rather avoid an unlucky number,
we

reduce it to 12 to 11 and

can

still have

working majority for
the
optimistic .-side.)
Probably
any open-minded appraisal of this
Benjamin Franklin balance sheet
will

a

favorable

draw

Be that

conclusions.

it may, it seems to me

as

is

hypothesis that our
somewhat like that

near

the bottom of the re¬

to support my

position
found

'effective
in
pre-,
cipifating
business
recessions.
(Perhaps speculation in housing
and other real estate ventures will
become the villian
in
the plot
particularly

later on.)

(7)
Business corporations in
general ;are in
good
financial
position. Evidently they are well
heeled in the
way
of working
capital.
(8)

;

Large and probably effec¬
credit shots are being ad¬
Deficit

beiiig stepped
This

up

by

spending is
and is not being
increased

taxa¬

nancing and the increased volume
expenditures for non-produc¬
tive purposes such as; supporting
farm prices, expanding so-called
social security,
maintaining na¬
tional defense, and the ECA pro¬
gram. These things may be neces¬
sary, but they mean
increasing
billions of paper dollars without
any economic basis for their re¬
demption or retirement.
V
(11) There has been sufficient
of

.

correction

of

of

some

the

more

acute

maladjustments to allow a
cyclical upswing, aided as it is by
government spending and infla¬
tion. Inventories have been much

is

significant. Perhaps reduced. Certain industries have
even more significant is the rela¬
'gone through a sort of wringer as
tively recent move to make money already indicated. Even the atti¬
rates easier.
The
"easy money tude of labor has been somewhat
policy" is still with us. A number modified.
of measures, have combined to in¬
f: <12) Now the declines are slow¬
the excess reserves of the
ing up, and certain advances have
banks upon
which in the last occurred, as in 1938.
analysis loans must depend. Re¬
(13) These fit in with the hy¬
serve requirements have been re¬
pothesis
of
periodic
business
duced.
Open-market
operations cycles, indicating that recovery is
have' been adjusted ; to
produce near..

crease

easier conditions. There has been

Conditions Working Against

manifest in general a

tendency on
the part of our bank credit man¬
agers to do their managing in a
way calculated
to restore some
of

business

confidence.

Less tendency exists to adjust the.

Recovery
Such

recovery.

buttal to
*"

credit

policy merely to support
the government bond market.

is

to

the

case

cessions which

business

said in re¬
the foregoing 13 points—
It

may

be

(1) Commodity prices according
some averages have not risen.

Some

raw

material

prices

are

(9) As intimated in the fore¬
relatively high. Huge supplies of
going point, the credit shots are certain farm products such as
being administered with, at least corn and flaxseed are pressing
,

the attitude of the
patient. This I would emphasize
as
a
distinct point—a condition
making for what is usually called
"business confidence." One thing
that the managers of
our cur¬
one

eye

on

down

on

markets.

And with for¬

eign demand interfered with «by
devaluation, the outlook for prices
a demand and supply basis is
not too bright.

on

came

in

1938 and

Certainly not ail the maladjust¬
ments that have arisen during the
New Deal and war periods have
yet been corrected.
It' is quite
probable that we will have more
trouble later on.
It is a part of

products, and (3) the price
government bonds, or rather
artificially low money rates
maintained by the deficit finan¬
ciers.
And why do we have such
low money rates or high bond
prices?
Why, the reason is to
of

maintain the other two maladjust¬
ments, namely, the high price of
labor and the high price of farm

products.
facets

These

of

the

are

financial

our

three

inflation.

And how do they affect you and
on
our
side of the -business

fence?

Why, they affect us most
strikingly through taxation. They
are maintained by double taxa¬
tion and
business

confiscatory taxation of
profits, particularly when

business is in the corporate form.

They affect

us in the confiscatory
large incomes laid on
of progressivism.
These things can not go on for¬

taxation

on

in

name

the

You can not milk a cow all
time and still keep the cow
producing milk.
The time will

ever.

the

this

when

come

shell

game of
only to take
it away from them in taxes or
under the guise of investments in
savings bonds, will be exposed.

giving people

My

money

is that

guess

will have

we

effective inflation and

postwar

ary

second¬

a

boom much

of the

time between now and 1952.

As

long

as the average American cit¬
izen accepts paper dollars without

question

and considers govern¬
bonds an investment, the

ment

,

debt

managers

squander

us

continue to
condition of

can

into

a

apparent prosperity.
But by not
later than 1952 either the average
American

will

come

to

see

jthe

inflation in his paper and to real¬

ize

that

government bonds are
but government debt
in such inflated paper
or the burden of taxation
will become so intolerable that
the secondary postwar adjustment
will become inevitable. I,am in¬

nothing
payable
dollars,

clined to think that

we

will "en¬

joy" inflation/for a while before
we are caught by either tbe devil
of the welfare
state
(with its
crushing taxes and business con¬
trols) or by the deep blue sea of
currency depreciation.
us

So, for the next year or two, let
eat, drink, and be merry!

Richfield Oil Corp.

Sells

.

hypothesis that if

my

we

have re¬

covery, however, it will lead to a
second postwar boom, and be fol*
lowed by the inevitable secondary

postwar recession. In this connec¬
tion, I am reminded of the story
of Zeke, the lank Kentucky back¬
woodsman, entering the general
store

which

observed

served

as

the

his section.
He
be wearing an

porium of

to

em¬

was
un¬

happy expression. Said the store¬
keeper, "What's the matter with
you, Zeke?" "Aw, that danged old
mule
did

mine

of

again,"

balked

on

me

Richfield

$25,000,000 principal
amount of its 2,8.5% sinking fund
debentures, maturing on Oct. 1,
1974, at a price of 100^4* plus ac¬
crued

asked the man behind the
"Yep," said Zeke, "I did
But the ornery critter moved

jist fqr enough to pull the danged
wagon over the fire and bUrn it

My

may seem

to

1952

or

point is that the fire
pretty hot as we move
thereabouts.

They always call economics the
dismal

science.

This

doubtless

in the fact that I find just
13 points—13—on the biill side of
the situation. It is clinched,* how¬

appears

ever,
that

Interest.

Proceeds of

the

arrangement, negotiated through
Kuhn, Loeb & Co. will be added
to

funds

general

of

the

corpo¬

ration.

Emerson Radio Clock

Zeke's reply. "Well,
build a fire under him

counter.
so.

Insurance Co., for

investment,

was

you

to,"

Oil Corp. has sold to

New York Life

and make him move as I told you

by my next point which is
eventually,
sometime be¬

tween now and

1952, our danged
old business wagon will be pulled
over the fire.
Sometime within

A group

of investment bankers,

headed by F. Eberstadt & Co., Inc.,
offered as a secondary distribu¬

tion on Oct. 3, 1949, an issue of
235,000 shares of the capital stock,
par value $5, of Emerson Radio &

Phonograph
share.

the

The

New

Co.

York

$15.50

at

shares

are

per

listed

on

Stock

Exchange.
announced Oct. 4,

The

issue, it

was

oversubscribed.

was

With JL F. Hutton & Co.
(Special to The Financial Chronicle)
*

LOS

ANGELES, CALIF.—Mrs.
Virginia L. Greene has become As¬
sociated with E. F. Hutton &, Co.,
623

South

Street.

Mrs.

previously

with

Spring

the next couple of years we are

Greene

going to find mot only too many

Crowell, Weedon & Co.

cars on

(2) Not all business barometers
point, up. Railway freight traffic
has been backward, and is rela¬
tively low compared with produc¬

farm

the

Maladjustments Not Corrected

up."
for

33

me

sonal reaction.

postwar
readjustment
and or
,1946. Therefore, unless some un¬
promises to expand, to the par¬ T mean also that the much-talkedforeseen development occurs in
ticular benefit of New England of devaluation of the pound and
international affairs or in \ do¬
and the South.
other:foreign currencies is not de¬ mestic labor
^
relations, one should
(6) The negative point is to be flationary, but is nearly part of keep an open mind to the pos¬
made that there has beep little the general progress- toward big¬ sibility that recovery lies ahead.
speculation in securities. In the ger and better inflation. "This is At the least, one should not yet
past, such speculation has been- seen in the return of deficit fi¬ sell America short.

measure

(2) Various tried and more or
Jess
trusty
"barometers"
have
5 •

.

which

the

tion.

compute has fallen about

auto¬

reason,

such sensitive commodities which

copper

in

Winter. There is little though with less fervor than the
-however, to - look for a preceding, is the expansion of consustained cyclical decline. I find s urn e r c r e d i t and instalment
no indication that people are yet
sales. After an apparent reaction
ing

counteracted

as

let-down

mobile sales and production dur¬

tioned; also hides. An average of

.up

,abandoned,

month; but was: almost as large as citizen with reference to the to
at the high rate 4n August, 1948. the beauties of f the welfare state,

tive

our

construc¬

new

tion

ministered.

they

strike

pared with the industrial produc¬
tion average,as is often the case
in periods of maladjustment.

measures

and zinc. Print
cloth and wool tops may be men¬

all

ment, in

fairly well-sustained rise in,the t

volume

(1383)

management at

move

stock market accompanied of late, .schemes- for

has developed in such non-ferrous

with

CHRONICLE

Need I add that there has been

metals

I

FINANCIAL

the technique of credit
Was hi n g t o ri.
Moreover, we find extreme tax

ly

time

that began

&

cause

thought that the outlook for the
for

it resembles the

in the Spring of 1938.

through

one

I

THE-COMMERCIAL

the road to be paid for but

was

buildings, each one with
ume of checks drawn, represent¬
Frank Newjnan jCo. Adds
too many television antennae. The
dimly
(Special to The Financial Chronicle)
be easier to manage an economy
big distortions or maladjustments
ing business activity, has gainerj
which have been building up in
MIAMI, FLA.—James D. Piatt,
im business indebtedness, repre¬ in which the businessman and tbe tion.
our economy ever since say 1934
investor are scared out of their
Jr. has been added to the staff of
senting in large rpart inventories. wits, but it does not get results
(3) Labor troubles exist, e. g., still remain. What are they: They
Frank ,D. Newman & Co., IngraThis is the first sustained increase in the
the coal and steel strike.
are (1) the price of labor power
way of tax money, and may
ham Building.
r[
in the ratio since 1945, and - again lose votes. We find some improve¬
(4) Steel production before the per effective unit, (2) the price of




rency

(and our economy)
are
perceiving is that it may

,

too many

.

36

THE

(1384)

COMMERCIAL

Securities
•

•

Actors

Sept.

Hobby Market, Beverly Hills, Calif.
of notification) 2,025 shares of non¬
common stock ($10 par).
Price, par. No un¬
To operate a store and mail order business.

assessable

American

Gas

Electric

&

(10/6)

Co.

;

7 filed 498,081 shares ($10 par) common stock.
Offering:—To be offered for subscription by present
-stockholders of record Oct. 7 on basis of one new share

.Sept.

ior each nine shares held.

Any unpurchased shares will

stockholders desiring to acquire
original allotment.
The offer expires
Underwriters—Underwriters will be invited to

Ue allotted among other
more

their

than

Oct. 24.

stockholders. Probable
Corp.; The First Boston Corp.;
"Dillon, Read & Co. Inc.; Blyth & Co., Inc. and Goldman,
Sachs & Co. (jointly). Proceeds—For general funds, to
be invested in subsid. operating companies, incl. Ap¬
palachian Electric Co. Bids—Bids for purchase of such
•of the stock as shall not be issuable pursuant to sub¬
scriptions will be received at company's office, 30 Church
Street, New York, up to 11:30 a.m. (EST), Oct. 6.
laid for any shares not taken by
bidders: Union Securities

*

American

Dickson &

Genera!

Corp., New York
•Sept. 8 filed 111,153 shares of $2 dividend series of
cumulative convertible preferred stock
($1 par) and
206,422 shares (10c par) common stock.
Offering—All
of the $2 preferred and 170,500 shares of common are
cwned by Equity Corp. and will be offered in exchange
Tor shares of $3 convertible preferred stock and 20-cent
"dividend
preferred
of
Equity.
Underwriters — None
named, but a flat fee will be paid NASD members and
securities exchanges assisting stockholders in tendering
•

exchange.

Anchor

Mines, Inc., Los Angeles, Calif.
Sept. 26 (letter of notification) 296,000 shares (25c par)
common stock.
Price—$1 each. Underwriter—Hunter &
Co., New York. To rehabilitate mill and mill machinery
and
•

to

pay

current indebtedness.

Animal

Medical & Hospital Insurance Co.,
Bronx, N. Y.
Sept. 30 (letter of notification) 1,000 shares 5%

non-

cumulative preferred stock

(par $100) and 750 common
shares (100 par). To be offered in units of 16 preferred
shares and 12 common shares at $2,401.20 per unit.
No
underwriting. To provide hospital and veterinary serv¬
ice to
v

owners

of dogs

Oil

rate purposes. Bids—Bids for
purchase of bonds will be
received up to noon (EST), Oct.
11, at Room 1852, 2 Rec¬
tor Street, New York.
\
•

Birmingham (Ala.) Fire Insurance Co.
"/ 1
Sept. 28 (letter of notification) 10,000 shares ($10 par)
common
stock.
Price—$20. Underwriter—Sterne, Agee
& Leach, Birmingham, Ala. To
enlarge insurance business.

\
Blackstone Valley Gas & Electric Co. (10/18)
Sept. 16 filed 35,000 shares of preferred stock, cumu¬
lative ($100 par).
Underwriter—To be determined by
competitive bidding.
Probable bidders: Estabrook &

,/Co. and Stone & Webster Securities Corp. (jointly); Kid¬
der, Peabody & Co.; Salomon Bros. & Hutzier; W. C.
I^angley & Co.; Lehman Brothers; Harriman Ripley &
Co.

Offering—Of the total 1,430 shares will be reserved
ior common stockholders
(other than Eastern Utili¬
ties
Associates
which
owns
99%
of
common
and
of

one

for

each

its rights)

common

to subscribe to at the rate

share

held, and 12,942 shares
will be offered to holders of
outstanding 6% preferred
stock in a share-for-share
exchange, plus a cash ad¬
justment and the balance will bfe publicly offered. Pro¬
ceeds—To
retire
the remaining
6%
preferred stock
and for construction
purposes.
Bids—Bids will be re¬
ceived up to 11 a.m.
(EST) Oct. 18, at 49 Federal Street,

Boston, Mass.

Bradshaw Mining Co.,
Tonopah, Nev, f
1948 (letter of notification) 1,500,000 shares
(50
par) common stock. Price—200 per share. Underwriter
Batkin & Co., New York.
To repair and renovate mine
of company and to exercise
option to purchase
Oct. 8,

gnill

and

move

and

processing

erect

such

mill

on

the

Corp.,

Spokane,

company's

property and for working capital.

raw

Atlantic Transportation
Florida

Gulf

May 31 filed 620,000 shares of class A participating ($1
par) stock and 270,000 shares (25c par) common stock.
Offering—135,000 shares of common will be offered for

Paulsen

subscription by holders

public at
for

par

oil

land

Bldg., Spokane, Wash.

,

,

Mining Corp., Ltd., Vancouver, B. C.
Aug. 29 filed 1,000,000 shares of no. par value common
stock. Price—800,000 shares to be offered publicly at 80
cents per share; the remainder are registered as "bonus
shares." Underwriter—Israel and Co., New York, N. Y.
Proceeds—To develop mineral resources.
'

Carolina

Telephone & Telegraph Co.,

North

two

shares

new

for

five

held

indebtedness

at

$100

per

•

Centra!

Maine

Probable

Power

bidders:

Co.,

Augusta,

(Wis.)

filed

be

funds.

376,250 shares

ment.

York.

per

the

Proceeds—To develop

common

mining properties.

at

$1.50

and additional

a

share.

stock.

Tem¬

funds

Pasadena,

No underwriter.

To

buy

•

San Francisco.




to

all

}

offices

Cleveland

assist with the

No underwriter.

San
:

y

,

Francisco,

■-

F.

Hutton

&

Co., San Francisco.

added

to

the

pay

premiums.

Expected

.

about

_

19.

Industrial

Insurance

Co., of Florida, Miami, Fla.
(letter of notification) 12,000 shares ($10 par)
stock.
Price—$25 each.
Underwriter—Atwill
& Co., Miami Beach. To complete formation of a stock
common

insurance company.
Fla.

Office, 139 N. E. 1st Street, Miami,

cover

expenses.

Empire District Electric Co. (10/18)
Sept. 29 filed 100,000 shares of common stock.
Boston

Corp. and G. H.

outstanding $6 preferred stock at $110

•

Javmar

Construction &

Under¬

Reinsurance Corp., New York
185,210 shares ($10 par) capital stock,
American General Corp.
Offering—These

dend series, $2.50 dividend series and
$2 dividend series
convertible preferred stock of American
General, on an

exchange basis.
will

be

Underwriter—None named, but a flat
NASD members and securities ex¬

paid

changes assisting stockholders who tender their shares
exchange, y »-p '■ •••:
;
<

for

.

share.

Bids expected Oct. 25.

Supply Co.,

Inc., N. Y.
Sept. 30 (letter of notification) 250 shares first preferred
6% cumulative stock (par $100) and 15,000 common

Walker &

filed

a

Electric Co.

distribution facilities construction.

I

Jl.l II I

If

V1

Farmers Tool

8

&

(10/25)
Sept. 23 filed $10,000,000 of first mortgage
bonds, due
1979;
Underwriter—To be decided under competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Blyth & Co., Inc.; Glore, Forgan & Co.; Harris, Hall &.
Co. (Inc.); Lehman
Brothers; Harriman Ripley & Co.;
Union Securities Corp., and
White, Weld & Co. (jointly);
Equitable Securities Corp.; The First Boston Corp.;
Smith, Barney & Co. Proceeds—For electric and gas

Ex¬

stock.

of

Iowa-Illinois Gas

■'.."VV

First

(letter

To redeem

tional construction and general corporate
purposes.
pected about Oct. 18.

Telephone

Co., Spokane, Wash.
notification) 1,321 shares of $5.50
preferred voting stock ($100 par). Under¬
writers—Pacific Northwest Co.; Paine, Rice & Co.; Mur¬
phy Favre, Inc., and Richards & Blum., Spokane, Wash.
26

cumulative

incorporation of Davis Motorcar Co.

To

Interstate

Sept.

Duquesne Light Co., Pittsburgh (10/18)
Sept. 16 filed $15,000,000 of first mortgage bonds, due
1979.
Underwriter—To be determined by competitive
bidding.
Probable bidders:
The First Boston Corp.;
Kuhn, Loeb & Co.; Smith, Barney & Co.; A. C. All.vn &
Co. (jointly); Halsey, Stuart & Co.
Inc.; White, Weld &
Co.; Harriman Ripley & Co.; Drexel & Co. and Equitable
Securities Corp. (jointly); Glore, Forgan & Co.
Proceeds
—To repay bank loans for construction and for addi¬

fee

r

Corp.,

Sept. 7

Motorcar Co., Los Angeles, Calif.
(letter of notification) $25,000 face amount of
securities by Davis Dealers and Distributors Committee.

owned
by
shares, together with 35,922 common shares of American
General Corp., will be offered to holders of
$3 divi¬

Private Wires

Mines

stock, of which 50,000 shares will be sold by
Mayne and 16,000 shares by Harold E. Mayne.
Underwriter—Baker, Simonds & Co., Detroit.

new

General

Philadelphia

:•

Inc.,

common

Office, 740 Wilson Bldg., Dallas,

& Supply Corp.,
Denver, Colo.
(letter of notification) 37,000 shares ($1 par)
Price—$4 each.
No underwriter.
For
working capital.

;

Enterprises,

.

common

Chicago

corporate

Helen G.

Davis

Sept.

other

Stamping & Machinery Co., Detroit,
Michigan
';i^////;/'
////
,
Sept. 27 (letter of notification) 66,000 shares ($1 par);

Sept. 30
To

for

:.■•••<.

.."TV"''.

•

•

used

carry merchan¬
replenish treasury

Indianapolis Power & Light Co. (10/19)
Sept. 16 filed $40,000,000 of first mortgage bonds, due
1979.
Underwriter—To be determined by competitive
bidding.
Probable bidders: Halsey, Stuart & Co. Inc.;;
Blyth & Co., Inc.; W. C. Langley & Co.; White, Weld &
Co., and Shields & Co.; (jointly); Lehman Brothers,"
Goldman, Sachs & Co. and The First Boston Corp. .
(jointly). Union Securities Corp. Proceeds—To redeem
$40,000,000 of./outstanding bonds, with other company,,

'

royalties.

be

to

'; ■ ■ :;;'y!

Underwriter—E.

Royalty Co., Dallas, Texas
(letter of notification) 50,000 shares ($1 par)
stock.
Offering—To be offered present stock¬

Texas.

Maryland

Calif.

Continental

common

would

construction.

or

Sept. 2 (letter of notification) 10,000 shares of common
stock.
Price—$2 each.
To be sold by Errol MacBoyle.

at $5 each.
Mr. Bradburn plans to resell 250 shares
through Hopkins, Harbach & Co., Los Angeles, at the
market price, $13.50 a share. For working capital. <

holders

balance

or

Idaho

Oct.

Engineering Corp.,

promissory notes and to

balance for related purposes.

'

California

•

working

common stock (par
Price—$100 per share. Underwriter—None. Pro¬
ceeds—$600,000 to be used for spectator grandstand and

Sept. 28 (letter of notification) 500 shares ($1 par) com¬
mon stock, to be sold to J. R.
Bradburn, Altadena, Calif.,

Sept. 26

provide

to

$100).

share.

Consolidated

and

June 25 filed 5,000 shares of class B

underwriter at

porarily postponed.
•

obligations,

Heidelberg Sports
Pittsburgh, Pa.

Mines, Inc.

(no par)

The

purposes

An additional 50,000 shares, will
$1 per share for invest¬
Underwriter—William L. Burton & Co., New

sold to

complete

dock and terminal facilities,

dise inventories and receivables

Paper Co.

Consolidated Caribou Silver
30

Proceeds—To

$5.

common.

.

off short-term

Halsey,

Co., New York. Proceeds—Offering by stockholders
by company.

Price—$2.50

135,000

new

preferred; unsubscribed common will be sold either at
public auction or to the underwriters. Proceeds—To pay

Me.

Sept. 28 filed 50,000 shares of class A common stock ($1
par). Underwriter—Hemphill, Noyes, Graham, Parsons

March

A

the

l-for-3 rate and common will be offered to common
stockholders at l-for-9 rate. Underwriters—Dillon, Read
& Co. Inc. .and Dean Witter & Co. will
buy unsubscribed

(jointly); Otis & Co.; Shields & Co.

Combined Locks

class

remaining

of

at

con¬

,

Oil & Gas Co., Alamosa, Colo.
Aug. 30 (letter of notification) 250,000 shares ($1 par)
common stock, of which
200,000 will be sold for com¬
pany and 50,000 shares for N. O, Yeakley, a controlling
stockholder, at $1 each. Underwriter—W. C. Hitchman
Co., New York. To lease properties, drill wells, and for
working capital.
* "v-y
;1

of

terry, to finance

current

the

Hawaiian Electric Co., Ltd., Honolulu
June 21 filed 150,000 shares of series E cumulative
($20
par) preferred and 50,000 shares of ($20 par) common.
Offering—Preferred will be offered to preferred holders

Colorado

•

pay

buy
shares

capital.

Stuart & Co. Inc.;
Coffin & Burr and The First Boston Corp. (jointly);
Blyth & Co., Inc. and Kidder, Peabody & Co. (jointly);
White, Weld & Co., and Merrill Lynch, Pierce, Fenner
& Beane

ocean

to

Oct. 5 filed $5,000,000 first and general mortgage bonds,
due 1979.
Underwriter—To be decided by competitive

bidding.

price

an

will

unsubscribed

plus

.Offering

share.

resulting from

struction and for general corporate purposes.

Sept. 28

'*

at

one-for-two

v<

each

reduce

Underwriters

snares

Carolina

Proceeds—To

Co.

&

Sept. 28 filed 29,750 shares ($100 par) common capital
stock.
Offering—To be sold to stockholders at rate of

•

Pittsburgh

basis of

share. Underwriters—Names by amendment,
include John J. Bergen & Co. and A. M. Kidder

and may

Tarboro,

Proceeds—To raise additional capital to assist com¬
pany in completing construction program.

Boston

the

on

25 cents per
Canam

Co.

•

Co., Jacksonville,

and 400,000 are to be issued in pay¬
lease options.
No underwriter. To
drill for gas and oil in Alberta, Canada.
Office, Lobby

the

ment

writers—The

New York.

materials, and labor.

Wash.

_

Sept. 8 filed $8,700,000 first mortgage bonds, due 1979.
Underwriter—Competitive bidding.
Probable bidders:
; Halsey Stuart & Co.
Inc.; The First Boston Corp.; White,
Weld & Co.; Lehman Brothers and Stone & Webster
.Securities Corp.
(jointly); Equitable Securities Corp.
and Central Republic Co.
(jointly); Union Securities
Corp.
Proceeds—For construction and general corpo¬

which will waive

Lifetime Super Lubricant Co.,
Phoenix, Ariz.
Sept. 28 (letter of notification) 25,000 shares of common
stock (no par).
Price—$10 each. No underwriter. For

and not

(10/131)

Gold-O-Lite

Sept. 19 (letter of notification) 1,200,000 shares (25c par)
common stock of which 800,000 shares are to be sold to

&

and cats,

Arkansas Power & Light Co.

•

Co., Charlotte, N. C. Proceeds to underwriter.

Canadian-American

-

ISSUE

PREVIOUS

equipment,

•

.

their securities for

Thursday, October 4V; 1949

Registration

SINCE

Inc., Atlanta, Ga.
(letter of notification) 10,000 shares ($1 par)
stock. Price—$6 per share. Underwriter—R. S.

common

,

ADDITIONS

Butler's,

Sept. 26

(letter

30

derwriter.

'

•

in

Now

INDICATES

CHRONICLE

FINANCIAL

&

■■-

1——

•

Volume 170

Number 4844

noon

Bonds

(EST)

October

11, 1949
Arkansas Power & Light Co. noon (EST)—Bonds
Erie RR. noon (EST)—.
—Equip. Trust Ctfs.
Keller Motors Corp.——————

-Common

October

13, 1949
Kansas City Southern Ry. noon—Equip. Trust: Ctfs.
October

1949
Equip Trust Ctfs.

14,

Northern Pacific Ry

*

October

1949

17,

18, 1949
Blackstone Valley Gas & Electric Co.
11 a.m. (EST)
—Preferred
Duquesne L ight Co.——:
————-Bonds
Empire District Electric Co
Common
New York Chicago & St. Louis RR.
noon
-Equip. Trust Ctfs/

; October 19, 1949 1: 7 /

Chesapeake & Ohio Ry
-Equip. Trust Ctfs.
Grande West. RR.-Equip. Trust Ctfs.
Indianapolis Power & Light Co
-Bonds
Denver & Rio

Public Service Electric & Gas Co.——Preferred

October 24,

1949

Resort Airlines, Inc. ————-

Common

October 25, 1949
Electric Co

Iowa-Illinois Gas &

stock at the rate of

share held

held.

offered

are

same

one

the

six shares of

■

Bonds

—

November 1, 1949

• ■

Interstate Power Co.———

shares

(par $1).

shares

and

150

underwriter.

-Common

To be sold in units of 2lk preferred
shares at $400 per unit.
No

common

Purchase

of

Office, 505

equipment, etc.
Fifth Avenue, New York City.

share for each preferred

time, holders of $2 preferred stock
to exchange these shares for

chance

common

Keller Motors

•

(letter of notification) 3,000 shares ($10 par)
Price, market (about $19.75). Underwriter—Hall- :
garten & Co., Chicago. Proceeds—To selling stockholder.
r Mutual

Fund of Boston, Inc., Boston

the

capital. Statement effective Oct. 3.

<

of indebtedness.

per

•

stock and
25,600 shares of 4%% cumulative preferred stock ($100
par). Common stock will be offered for subscription by
stockholders and employees at $10 a share and will not
be* underwritten; Underwriter
For preferred: To be
determined under competitive bidding. Probable bidders:
Kidder, Peabody & Co.; Union Securities Corp.; Salomon
Bros. & Hutzler; White, Weld & Co. Proceeds—For con¬
common

—

struction.

TV-

Kittanning (Pa.) Telephone Co.
Sept. 14 (letter of notification) 3,000 shares of capital
stock (par $25). Price, $45 per share. Stock will be of¬
fered Oct. 1 to stockholders of record Sept. 17 in ratio
of one-for-eight. Rights expire Nov. 1, after which shares
not subscribed for will be offered to employees and un¬
area

in which

gram.
•

shares

L.

will

be

company

offered

serves.

8

to

public in
Finance expansion pro¬

'

No underwriting.
B.

Nov.

H.

Manufacturing Co., Inc., Philadelphia
Sept. 27 (letter of notification) 650 shares of capital
stock.
Price—$50 per share. To finance manufacture of
games and toys.
Underwriting—None.

Richmond, Va.

Sept. 9 filed 55,000 shares ($10 par) common stock.
Offering—To be offered at $10 each to holders of 110,000
outstanding common stock shares. Underwriter—None.
Proceeds—To increase capital.
•;1'
V
,

•

Layne Foundations, Inc., West Warwick, R. I.;
Sept. 27 (letter of notification) $100,000 10-year 5% reg¬
istered (subordinated) debentures. No underwriter. To

expand plant facilities and inventory.
St., West Warwick, R. I. •
•

Office, Sheldon

•
Lewis (Alfred M.), Inc., Riverside, Calif.
Sept. 29 (letter of notification) 1,000 shares of class B
.

common

stock.

No underwriter.

To

be

For

sold

to

customers at $100

capital account.

*

each.

V<

.

Lucky Stores, Inc., Oakland, Calif.
June 27 filed 400,000 shares ($1.25 par) common stock.
Underwriter—Names by amendment. Proceeds—Shares
being offered* on behalf of Blair Holdings Corp.
•
McAleer Manufacturing Co., Rochester, Mich.
Sept. 29, (letter of notification) 1,000 shares ($1 par)
common stock.
To be sold at the market ($4 each) by

Carlton M.

Higbie, President of the company., No under¬

writer.

(10/17)

subscription. Unsubscribed shares and preferred will he
taken by

underwriters.

Proceeds—For construction;




Mail pre¬

N. Y. City

holders.

Electric

&

Gas

Co.

and Middle

.

Utah Power & Light Co. (19/10)
; '
July 28 filed $3,000,000 first mortgage bonds, due 1979.
Underwriters—Competitive bidding. Probable biddersc
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Salo¬
mon
Bros.
& Hutzler;
Lehman Brothers and Bear,
Stearns & Co. (jointly); Kidder, Peabody & Go^ Equi¬
table Securities Corp.; Union Securities Corp. and Smith;
Barney & Co. (jointly); Carl M. Loeb, Rhodes & Co., and
E. H. Rollins & Sons (jointly). Proceeds—For construc¬
tion purposes.
Bids—Bids for purchase of bonds will:

,

"

be

Olamoht Mining Co., Butte, Mont.
Sept. 19 (letter of notification) 85,000 shares ($1 par)
common stock.
Price, par. No underwriter. To develop

received

2 Rector

up

to

noon

(EST), Oct. 10, at Room 2033,

Street, New York.

,

Western Arkansas Telephone

,

.

Co.,

Russellvilje, Ark.
Aug. 16 (letter of notification)

34 mining claims in Beaverhead County,
Office, First Natiqnal Bank Bldg., Butte, Mont. -

operate

1,009 shares of 6% cu¬
non-participating preferred stock (par $109
per share).
Underwriter—Lewis W. Cherry Co., Little
Rock, Ark. Proceeds—To pay indebtedness for equip¬
ment and supplies.

mulative

•

Olympic National Life Insurance Co., Seattle,
Washington
^7'7-^V77:/7:7'■/.//
Sept. 26 (letter of notification) 3,457.5 shares ($10 par)
common stock.
Price—$20 a unit. No underwriter. Cap¬
ital and surplus for

V

•

insurance business.

Orbisonia Water Co.,

Harrisburg, Pa.

14

outstanding $9,500 of mortgage bonds and improve prop¬
erties..
Power Petroleum Ltd., Toronto Canada
April 25 filed 1,150,000 shares ($1 par) common of which
1,000,000 on behalf of company and 150,000 by New York
Co., Ltd,
Price—50 cents per share.
Underwriters—
S. G. Cranwell & Co., New York. Proceeds—For admin¬
istration expenses and
drilling.
Statement effective
.June 27.

.

•

Public Service Co. of

Indiana, Inc.
Sept. 12 filed 81,744 shares of common stock (no par).
Offering—To be offered to stockholders of Southeast¬
ern
Indiana Power Co. in exchange for 5Vz% cumu¬
lative preferred stock (par $100) and common stock
(par $10) on basis of 4% shares common Public Service
for one preferred share Southeastern and 1% shares
Public Service for one common share Southeastern.
Underwriter—None.

Ni J.

■_

Corp., Spokane,vWash. ?

•

Wiskit, Inc., Seattle, Wash.
(letter of notification) 150 shares ($100 par)
common stock;
Price, par. No underwriter. To manu¬
facture Wiskit rackets and establish the game of Wiskit/
Office, Lloyd Bldg., Seattle, Wash.
!

Newark,

(10/19)

York- (Pa.)

Sept. 29 filed 250,000 shares ($100 par) cumulative pre¬
stock.
Underwriters — Morgan Stanley & Co.,
Drexel & Co., and Glore, F.organ & Co., New York. Proceeds-^Tp be added to general funds to finance construc¬

County Gas Co.

" I

Sept. 23 (letter of notification) 6,000 shares of common;
stock

(par $20). To be offered for subscription by stock¬

holders of record Oct. 14 in ratio of l/5th of
for

;

each

Nov/1.

Regional Finance Co., Inc., Bethesda, Md.

Sept. 23 (letter of notification) 2,450 shares of non-vot¬
ing preferred stock and 500 shares (no par) common

Petroleum

Sept. 27

ferred

tion.

Wewoka

Sept. 19 (letter of notification) 600,000 shares capital
Stock (25c par). Price—50 cents. Underwriter — Binabaum & Co., New York. To retire outstanding oil pay¬
ments and notes, drill additional wells, and provide
working capital.
(
,
4

.

Public Service Electric & Gas Co.,

,

Western Oil Fields, lncn Denver, Colo.
May 19 (letter of notification) 800,000 shares of common
capital.
Price, 250 per share.
Underwriter—John CL
Perry & Co., Denver, Colo.
For working capital and
drilling of wells.

,77\';7...

:

Western Chemical & Refining Co., Salt Lake.

City,. Utah- V
7.
Sept. 26 (letter of notification) 200,000 shares of class A
($1 par) common stock and 200,000 shares of class B
(10c par) comifton stock. Offered in units of one share
of class A and one share of class B for $1 a unit. No un¬
derwriter.
For general funds to conduct research in,
treatment of Utah coal. Office, 521 Felt Bldg., Salt Lake
City, Utah.
;
;
r"

(10/10)

(letter of notification) $21,000 4%% closed
first mortgage serial bonds. Price, par. UnderwriterWarren W. York & Co., Inc., Harrisburg. To pay off
Sept.

/•<

Consolidated

spectively.

•

'

1

West Corp. will sell 120,000 shares and 34,000 shares, re¬

Price—At par (50)

Northern Ohio

and

Proceeds—For construction.

Upper Peninsula Power Co.
Sept. 28 filed 154,000 shares of common stock (par $9).
Underwriters—SEC has granted exemption from com»
petitive bidding. An investment banking group man¬
aged by Kidder, Peabody & Co.; Merrill Lynch,. Pierce,
Fenner & Beane, and Paine, Webber, Jackson &
Curtis;
may be underwriters. Proceeds—Will go to selling stock¬

No underwriting.

Co., Ashland, Ohio.

!

••• ;•

July 27 (letter of notification) 270,000 shares of common
stock. Price—$1 each. Underwriter—Edward W.
Ackley
& Co., Boston. For development of mining properties.

.;7.7';

Telphone Co., Bellevue, Ohio
cumulative preferred
stock ($100 par). Underwriters—Lawrence Cook; & Co.
and Cunningham & Co., Cleveland.
Price, par.' Pro¬
ceeds—To reimburse company for funds spent to byy
22,574 shares Of common capital stock of Star Telephone1

;

United Minerals Reserve Corp., Chicago

Sept. 23 filed 13,575 shares 4V2%

•

Sept. 27 filed 30,000 shares (par $20) preferred stock
and 25,000 shares common, stock (par $10), Underwrit¬
ers-—Merril Lynch, Pierce, Fenner & Beane and Kidder,
Peabody & Co. Offering—Common stock will .be of¬
fered for subscription by stockholders of record (about)
Oct. 17 on a one-for-six ratio with provision for over-

thers.

to Telecoin Corp. stockhold¬
ers of record Sept. 6, 1949, on a pro rata share-for-share
basis.
Rights expire Oct. 6.
Underwriter—None. Pro¬
ceeds—To be added to working capital.
Office—12 East
44th Street, New York, N. Y.
7/
1

•

Maine Public Service Co.

shares of Cuba

Electric Co. of Missouri

30 filed 150,000 shares of cumulative: preferred
stock (no par). Underwriter—To be determined under
competitive bidding.. Probable bidders: Dilloh, Read &c
Co. Inc.; Blyth & Co., Inc.; White, Weld & Co. and Shields
& Co. (jointly); The First Boston Corp.; Lehman Bro¬
Sept.

Aug. 26 (letter of notification) 1,100,000 shares of class B
-stock.

Mont.

Lawyers Title Insurance Corp.,

for three

:

share (U. S. funds)/ Underwriting—None. Proceeds
equipment;
construction, exploration and development. - ■

/•- 'Union

Steamship, New York

New York Telecoin Corp.,

Kentucky Utilities Co., Lexington, Ky.

subscribed

share

working capital

road

($25 par) stock, Which Atlantic Gulf and West Indies
Steamship Lines is offering in exchange for its own
preferred (5% non-cumulative $100 par) at the rate of

$25 in cash.

For

,

■—Funds will; be .applied to the purchase of

June 17 filed 190,125 shares of 5.6% cumulative preferred

Atlantic

,

Sudore Gold Mines Ltd., Toronto, Canada
^
June 7 filed 375,000 shares of common stock; Priee-r-$l

through competitive Mdding* Probable bidders: Kidder,
Peabody & Co.; Smith, Barney & Co.; W. C. Langley &
Co.; Lehman Brothers. Proceeds—Will be applied to the
payment of the cost of, or in reimbursement of payments
made for, construction of additions and betterments sub¬
sequent to April 30, 1949. ?j Sale deferred until later this

ferred plus

No underwriter.

and investment purposes.;

New Jersey Power & Light Co. 7.
77 7;:4 *
9 filed 20,000 shares ($100 par) cumulative pre¬
ferred stock.
Underwriters—Names to be determined

one

firm commitment basis to

•
Security Investment So. of Riverside (Calif.)
Sept. 29 (letter of notification) $256,000 of .'.certificates

Nazareth (Pa.) Cement Co.
Sept/ 7 (letter of notification) 3,059 shares of common
stock./ Price at: market (about $12) to be sold by the
Alden M. Young Co., Pine Orchard, Conn., through Day,
Stoddard & Williams/ New Haven, Conn.; Byllesby &
Co., Philadelphia; Warren W. York & Co., Allentown,
and H. B. Robeson, Nazareth.
;
/
f;

'7.77'.

on a

Ohio

Co., Columbus. To purchase new equipment
and provide additional working capital.
f
:

Sept. 28 filed 100,000 shares of capital stock. Underwrit¬
Co., New York and Russell Berg
& Co., Boston. Price at market.
:
V-

77/'

common

ferred stock will be sold

!

ers—Louis H. Whitehead

New York & Cuba Mail

May 10 filed 5,000,000 shares (30 par) common. Under¬
writer—Greenfield, Lax & Co., Inc., New York. Price—
$1 per share. Proceeds — To purchase additional plant
facilities, tools, dies, jigs, etc.; the balance for working

Oct. 4 filed 165,500 shares ($10 par)

Scott

(0» MO & Sons Co-, ManrysviHe, Ohio
(letter of notification) 532 shares ($100 par)
stock, 422 shares of class B ($1Q0 par)
common stock and 1,500 shares.of 5%
cumulative pre¬
ferred; stock ""($100 par). Price—$125 for each the com¬
mon and $100.25 each for the preferred shares.
The pre¬

stock.

Corp., Huntsviile, Ala.

(10/10-11)

Road, Norwood, Ohio.

Sept. 26

Morris Paper Mills, Chicago

year.

Ohio

Inc. (10/24)
(letter of notification) 54,000 shares ($1 par)
common stock, of which 50,000 shares offered by com¬
pany and 4,000 shares by George B. Wilkinson, Charlotte,.
N. C.
Underwriter—Marx-& Co., New York.
Price—
$5 per share. To be used for equipment and additional
working capital in connection with the company's air
cruise service.
Expected Week of Oct. 24.

Sept. 23

f

Inc., Norwood,

July 27

stock. Underwriters—Paine^ Web¬
ber, Jackson & Curtis; The First Boston Corp,, and
White, Weld & Co. Proceeds—To increase working cap¬
ital and reimburse the treasury for construction ex¬

•

Finance Co.,

Resort Airlines,

June

3'v7

Reliable

gomery

and one share for each five common shares

At the

To oper¬

small loan company.

a

class A

October

v/7.

Sept. 21 filed 120,000 shares of cumulative prior prefer¬
stock and 360,000 shares (10c par) common stock,
to be reserved for conversion. Offering — Of the total
prior preference shares, 116,440 will be reserved for
subscription by holders of $2 preferred stock and com¬
mon

with the

27 (letter of notification) $100,000 series B 6%
cumulative preferred stock. Price — $100 a share. No
underwriter. For additional capital. Office, 4628 Mont¬

penditures.

Maine Public Service Co.——————Preferred

7V7

•

37

Sep.

ence

1949

10,

Orbisonia Water Co.——Bonds

"vy:-':

ate

Minute Maid Corp., New York

—-.---Common
October

(1385)
stock, with one share of common to go along
sale of 10 shares of preferred. No underwriter.

6, 1949

(EST)

Light Co.,

FINANCIAL CHRONICLE

*

American Gas & Electric Co. 11:30 a.m.;

Utah Power &

&

Mercantile Acceptance Corp. of California
Sept. 8 (letter* of notification) $100,000 4% 10-year de¬
bentures.
Underwrite r-rGuarcUan Securities Corp., J3an
Francisco. For general corporate purposes.

NEW ISSUE CALENDAR
October

COMMERCIAL

THE

a new

share?

Rights expire^
For improvements, extensions, etc*
Not' under¬
share

held, at $50

per

share.

written.
•

■

L

7

(Continued

on page

38)

r,' V
-

.

*■' ft
ursrt f-„

38

THE

(1386)

COMMERCIAL

Detroit Edison

(Continued from page 37)-

Sept.

27

CHRONICLE

FINANCIAL

&

Co.

planned to sell this
addition

announced that it is preparing for
further financing of its construction program.
Subject

Prospective Offerings
•

American Natural

Gas

Co.

basis of

It is expected

of 276,805 shares of common stock.

pany

that this additional

ible

will be offered first for sub¬

stock

Aug. 11 requested

Erie Railroad

Stone

(jointly); White Weld &
Corp. (jointly);

Gulf

Sept.

W. C. Langley & Co.;
& Co.; Halsey, Stuart

Harriman, Ripley-& Co.; Shields
& Co. Inc.; Equitable Securities
Offering expected in November.

Corp.; Otis & Co.
•

Central

South

&

West

•

issue

The

corn

stockholders |

present

basis.

o

Probabl

Lynch, Pierce, Fenner & Bean

Kidder, Peabody & Co..
Missouri

;:V'- ]

/'//'.

Proceeds would

for

be

include

common

Stock will be offefec

one-for-ten*ratio

a

on

construction.

Probable bidder,

Merrill

Lynch, Pierce, Fenner 1 &
Beane; Kidder, Peabody & Co. and White, Weld & Co
(jointly); Harriman Ripley & Co. and Goldman, Saeh
& Co. (jointly);
Blyth & Co., Inc.
I

I'

New York, Chicago & St. Louis RR.
(10/18)1
Company will receive bids up to noon, Oct. 16, for th
purchase from it of $3,450,000 equipment trust
certifi

asked the FPC for authority to]
$12,000,000 in first mortgage bonds:
The

to

stockholders

for

/

/

$5,000,000 in debentures.

has

cates

dated

Oct.

15,

1950-Oct. 15, 1964.
Co.

1949, due semi-annually April 15
Probable bidders: Halsey, Stuart; &

Inc.; Salomon Bros. & Hutzler; Harris, Hall & Co
(Inc.); Harriman Ripley & Co., and Lehman Brother.'!
indenture to be: dated about ?'„■ (jointly).
'
...
^
,
*
Nov. 1, 1949. The issue would be disposed of by private !
•
Northern Pacific Ry. (10/14)
~
offering and direct sale. Proceeds would be used in a |
Company will receive bids Oct. 14 for the sale by i.
construction and improvement program.
f of
$3,975,000 equipment trust certificates, dated Nov/ 1
•
Illinois Bell Telephone Co.
1949, and due annually Nov. t, 1950-1964.- Probable-bid
Sept. 28; G. K. McCorkle, President, said company must " ders:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutz¬
obtain financing in the near future of approximately ler; Harris, Hall & Co. <Inc.); Harriman Ripley & Co'
$100,000,000 to replace short-term loans used to finance
and Lehman Brothers
(jointly).
its
by

fifth

a

supplemental

V
,

Chicago Rock Island & Pacific Ry.
17 company may possibly refund its $25,772,850
bonds and $34,488,542 of income 4%s
through sale of a new issue. Asked about the financing
an official of the road said, "There has been some dis¬
cussion but no plans."
Probable bidders: Halsey, Stuart
Sept.

first mortgage 4%

current

bidders:

'

•

construction

If

program.

bonds,

probable

•

Morgan Stanley & Co.; Halsey-, Stuart & Co. Inc.

Illinois

Ohio Edison Co.

Sept. 30 directors

Power Co.

Oct; 3 company plans to file with the SEC a registration
statement covering 239,601 shares of common stock for

.

few

offering to

Illuminating Co.
Sept. 28 company has arranged a bank credit of $15,000,000 to finance construction costs.. Long-term financing
of either bonds or preferred will be undertaken later,
depending' upon market conditions.
Probable bidders

program.

stockholders at the rate of

common

share for each

one

Glore, Forgan & Co. and W. C. Langley & Co.
(jointly); Blyth & Co., Inc.; Halsey, Stuart & Co. Inc.;
White, Weld & Co.

a

new

tional

eight owned.

Interstate

,

•
Cuba, Republic of
Sept. 30 reported a $100,000,000 bond issue by Cuba;
negotiations for which were broken *off in August is
once
more
in the advanced stage and will reach the

Power

Co.

expected to decide within the

are

the nature-of

on

the

next

nex-

financing to be

company's 1950 constructor
The management is desirous of
selling addi¬

common

or

preferred stock, if market condition.'

at the time are favorable.

headed

group

months

done in connection with the

Company intends to nego¬
by The First Boston Corp.
and Merrill Lynch, Pierce, Fenner & Beane to under¬
write the offering. ?
' 1
tiate with

bonds:

market in November. Cuban

•

stock and

2%% series due Feb. 1, 1977, or (2) as a new 2%% series |
of 30-year bonds due Nov. 1, 1979, to be provided for

.

.

;

Co.

stoc

common

$7,365,000 convertible preferred

to present common

would be issued either (1) under!
indenture to its Oct. 1, 1937,1
mortgage and deed of trust as additional bonds of its

Chesapeake & Ohio Ry. (10/19) '
Company will receive bids up to Oct.-10 for the pur¬
chase from it of $3,600,000 equipment trust certificates,
to be dated Nov. 1, 1949, and due semi-annually May
1, 1950-Nov. 1, 1964.
Probable bidders: Halsey, Stuart
& Co. Inc.; Harris Hall & Co.'(Inc.); Salomon Bros. &
Hutzler; Harriman Ripley & Co. and Lehman Brothers
(jointly).
■'
.; !.'*-■

Electric

Power

company

up

this year of 669 508 additional shares of
the sale in 1951 of

and

plans sale in October ' of;
bonds.
Probable bidders: *
Salomon Bros. & Hutzler;
Lynch, Pierce, Fenner &
Co, and White, Weld & Co.
Securities Corp.; The First]

company

company said the bonds
the third supplemental

•

on

Idaho

Sept. 29

able underwriter: Lehman Brothers.

Cleveland

Merrill

to

one-for-six

a

.

Co.

Utilities

reported

first mortgage
Stuart & Co. Inc.;
Lehman
Brothers; Merrill
Beane; Kidder, Peabody &
(jointly); Stone & Webster
Boston Corp. .';

competitive bidding, the*successful bidder
acquire shares not purchased by stockholders. Prob¬

•

States

27

Halsey,

determined by

& Co; Inc.

on

Power & Light Co.
V
Aug. 9 reported the company will probably sell abou
$2,000,000 bonds and $2,000,000 preferred stock later thi
year.
Probable -bidders:
Halsey, Stuart & Co. In.
(bonds only); The First Boston Corp.; Glore, Forgani I

Halsey,

(10/11)

$10,000,000

Corp.
Sept. 30 asked SEC permission to issue and sell 725,567
common shares, to be offered for prior subscription by
stockholders on a one for 10 basis. Offering price to be
to

17

Co.; White, Weld & Co. and Shields & Co; (jointly)
)■. Kidder, Peabody & Co. (bonds only);
Equitable Securi
office, Cleveland, for the purchase from it of
ties Corp. (bonds only); W. C.
Langley & Co.; Harrimar
$4,300,000 equipment trust certificates, maturing in one-1
Ripley & Co.; Salomon Bros. & Hutzler (preferred only)
to ten years. Probable bidders: Halsey, Stuart & Co. Inc.;!
New England Electric
Salomon Bros. & Hutzler; Harris, Hall & Co. (Inc.);!
System
Sept. 26 company advised the SEC that it plans the sal
Harriman Ripley & Co. and Lehman Brothers (jointly).'

Securities

Webster

&

debentures:

for

approximately $300,000.

offered

be

Oct.

its

at

SEC authorization to issue and sell

Drexel & Co. and Stroud & Co.

and

•

for approximately $600,000, i
common stock
(par $10

shares-of

The company will receive bids up to noon (EST) Oct. 11

Electric Corp.

&

$6,000,000 of convertible debentures. Probable bidders:
Union Securities Corp, Salomon Bros. & Hutzler and
Spencer Trask & Co. (jointly); The First Boston Corp.;
Co.

and
*

(jointly); The First Boston Corp.; Dillon, Read & Co. Inc. V

Co., Inc.; Lehman Brothers.
Gas

bidders

will

about

underwriters:

•

Stuart &
Co. Inc.; Coffin & Burr, Inc. and Spencer Trask & Co.

Light & Traction Co. Probable bidders include: Blyth &
Hudson

to stockholders at par on the
each 10 shares held.
It is also

for

record

debentures.

Probable

scription by shareholders in the ratio of one for 10 held.
American Natural Gas was formerly known as American

Central

share

one

year

25,000

stock

mon

r

planned to issue approximately $40,000,000 non-convert-

compete for the underwriting of an offering by com¬

to

which will be sold for

by the Michigan P. S. Commission, the
an offering of additional stock

financing will include
(about 700,000 shares)

firms have been forming into groups

Investment banking
to

company

to authorization

Thursday, October 6, 194

~ *

Pennsylvania Electric

•-1

-

.

■»

•

Co.

I

,

Sept. 15 company has asked SEC
authority to issue and
competitively $11,000,000 fifst mortgage bonds and
70,000 shares preferred stock. Probable bidders for

(11/1)

sell

Sept. 27 company filed with SEC an application to sell >
pre¬
300,000 additional common shares (par $3.5QX. It is ex- j: ferred:
Kuhn, Loeb & Co.; Kidder, Peabody & Co.
pected that the proposed offering will go into registration /
Smith, Barney & Co.; White, Weld & Co.; W. C.
Langley
by Oct. 10 and that competitive bids for it will be taken - & Co.; For
bonds:, Halsey, Stuart & Co. Inc.; Harriman
about Nov. 1.
Proceeds from the sale will be used to <
Ripley & Co.;* The First Boston Corp.; Equitable Secu¬
finance the utility's construction program.
rities Corp.
;
'
.
;
•
Kansas City Southern Ry. (10/13)
Western Light & Telephone
Bids for purchase of $1,200,000 equipment trust certifiCo., Inc., Kansas
City, Kansas
..^; v :
cates series J, dated Nov. 1, 1949 and due semi-annually
Sept. 23 Arthur L. Mullergren, President, announced that
to Nov. 1, 1964, will be received up to
noon, Oct. 13 at
company contemplates to offer
approximately 15 000
company's office, Kansas City. Probable bidders: Halsey, ?
shares of common
stock, which will first be offered to
Stuart & Co. Inc.; Harris, Hall & Co. (Inc.); Salomon 1!
the present common
stockholders, and first mortgage
Bros. & Hutzler.

bankers, it is said, will take

front $38 to $40 million of the total, with American in¬
vestment bankers, Jieaded by The First Boston Corp.,

f

,

handling the balance.

.

■

•

Denver &

Rio

Grande Western

RR.

(10/19)
Company has issued invitations for bids to be received
Oct. 19 for $2,250,000 in equipment trust certificates to
be dated Dec. 1, 1949, and to mature semi-annually June.

1, 1950-Dec, 1, 1964. Probable bidders: Halsey, Stuart &

-

Co. Inc.; Salomon Bros. & Hutzler; Harriman Ripley &

Maine

Co., and Lehman Brothers (jointly); Harris,-Hall & Co.
(Inc.).

Oct.

13

Co., Irvington, N. J., it
nounced by

was

an¬

John R. Franke, bank

Pa.

Managers

Philadalphia

of
Sept. 27 which
They will fill vacancies
by the deaths of Oscar

caused

Schraft^ and
Schraft
Zacher
bile

Otto

died

in

July

killed

was

accident

in

Zacher/
in

automo¬

Montville,

Sep*

tember 10.
♦

-

,

Ralph Richards,
dent

and

a

Vice-Presi¬
of

the

Director of

a

Total resources.

Deposits

259,664,768

$271,654,827
247,923,053

60,967,421

from banks—

S.

Govt;

€7,652,716

Loans

se¬

118,661,123

hold'gs

and

discounted

Undivid.

74,682,276

67,197,690

2,863,911

2,712,490

profits

:Je

v

Walter

A.

New York

Richmond,

book

♦:

THE

publishers, died
65 years old.

was
^

PHILADELPHIA

*

NATIONAL

PHILADELPHIA,
Total resources-

Deposits
Cash

645,852,065

and

U.

S.

Govt,

curity

__

211,260,756

219,170,792

292,488,427

288,439,928

profits

Henderson

Stewart

join

Va.,

for

Oct.

Newport

1

local

as

News

and

Portsmouth, Rowland A. Radford,
Vice-President in charge of oper¬
ations, has announced.
*

*

137,112,903

132,234,797

10,700,988

10,322,310

Rauch,

Jr.,

Phila¬

tinger,
mon

N.

D.

capital

increased

stock

on

its

com¬

Sept.

19

$50,000 to $75,000 by a stock
dividend, according to the Sept.

26 bulletin from the office of the

R.

Stewart

*

*

Rauch,

Jr.,

Vice-

Fund

Girard

has been elected to the Board of

Philadelphia,




the

Bank of Atlanta.

First

Announcement

of this was made by the President
the First National, R, Clyde

Williams,

Sept. 13.

on

Mr.

Pike

has

Indicating

held

his

post

with the Federal Reserve Bank of

Atlanta

since

1947, the Atlanta
"Constitution" of Sept. 14 stated
that he began his business career
as

a

Junior Cost Accountant with
H.

&

W.

B.

Drew

tional

Co.

and

Continuing,

a

few months later.

the

"Constitution"

said in part:

"Mr.
eral
at

Pike

'
moved

sev¬

positions to Assistant Cashier

the

Jacksonville

FRB

branch,

He

came

to

Atlanta

as

He

President of the Jackson*

was

Acting Auditor in 1943.

ville Chapter of the American In*
stitute of
two

is

Operation

and

take

to

creased

as

President

Conference

of

of:
the

the
Na*

from

post in the First Na¬
Oct. 1.

new
on

William

C.

Adamson,

cf

;

the

H

National Bank, Aug.
8, 1914, the Atlanta "Constitution"

$100,000- it

of

Sept. 15 added:

of

ier in

January, 1926, Vice-Presi¬

dent in

1931

and

Cashier in

Atlanta

Vice-President

April, 1946.

"He had been

Clearing House Associa¬
was

currently

representing Georgia banks
member of the Bank

Commission

of

Rotan,

the

By

from

Bank

bulletin

oi

$50,000

reported

was

..

from

in

its

tc
the

-

office

the

of

Cur:

^

.

*

*

*

"

stock dividend of $40,000
the common capital stock of the
a

National

Texas

was

Bank

increased

of

Sequin

on?

Sept. 22

from

$60,000 to $100,000/ accord¬
ing to the Sept. 26 bulletin from
the

the

,

VI' -

capital stock

Comotroller

reney. ;
•:/.;/;: y-/,'

Management

as

£

Sept. 21 In¬

National

Texas

Sept.- 26

a

the

First

Nolte

Secretary of the

tion since 1932 and

the

.

elected Assistant Cash¬

- by

t
on

creased the common

the

:

,-v

£

A stock dividend

-

of

V

$125,000

Comptroller of the Cur¬
'■-/"l:/«/•-'' 1

rency. .'/■■■
■ .,V .V;n

of

t

in¬

capital stock

and further
in¬
it to $150,000 by the sak

age.
Stating that Mr. Adamson
entered the employ of the old At¬
lanta National
Bank, predecessor

First

21

new
stock, it is reported in the
Sept. 26 bulletin from the office

and

Secretary
of
the
Atlanta
Clearing House Association, died
on
Sept. 14. He was 52 years of

to

Bank

-

Sept.

on

common

of

Vice-

President and Cashier of the First
National
Bank
of Atlanta,
Ga„

was

to

dividend

creased

*

National

Texas
its

$100,000

stock

•

*

Lemesa

Lamesa,

office

of

the

*

-

*

*

An increase of

Bankers Association."

Comptroller oi

Currency.

American

•

'

,

*/

i:

$25,000

Sept*

on

19 in the common capital stock of

Banking in 1941; served

terms

The

*

~

scheduled

„

and

;

through

and

*

joined the Federal Reserve Bank /"He
at Jacksonville

Pike

his

up

used

Traditional

Lincoln, Neb.

Money and Banking."
Mr.

be

(Inc.) and FirSFTrust

Co. of

Organization

a'Vice-

National

of

that

•

^Bank

of Atlanta has been elected

of

issue

•The Sept.
office

of

26 bulletin from the

the

Comptroller of the

the First National Bank of Asper-

mont, Texas by a stock dividepd
is reported in the Sept. 26 bulletin;

tional Association of Bank Audi¬

to the Board of Managers of the

Society,

■>,/;'/v'- v;1;

Winslow E. Pike, General Audi¬
of the Federal Reserve

Nashville

Comptroller of the Currency.

President of Philadelphia

Co.,

*

the Nashville branch.

delphia lawyer, has been elected

Trust

*

to

which it is

Co.,

then became Assistant Cashier at

*

The First National Bank, Hot-

♦

K.

will

from

bills

discounted

TJndivld.

$709,317,124
643,380,386

se¬

hold'gs

and

auditor

(par. $20),

tor

the

*

staff of the Bank of Virginia,

June 30/49

due

from banks

Loans

BANK,

PA.

Sept. 30/49
$721,736,297

111,935,722

bills

the

Oet. 2. He

AND

due

and

*"

President

.

\ /

June 30/49

$284,110,913

—

Cash

the Thomas Y. Crowell Company,

on

.

PHILADELPHIA, PA.

Fidelity Union Trust Company of

Newark, N. J. and

;
" ;■

.

*

Sept. 30/49

curity

Officer

Trust

TRUST COMPANY,

U.

*

*

Bulletin"

•
*

CORN EXCHANGE NATIONAL BANK

Mr.

Mr.

and

an

"Evening

*

proposal

a

Girard /Trust

of

*

-

of Sept. 30.

News"

addedf

on

the *late
John
A.
Stevenson. :,;■/://Vy

replace the late John A.
Stevenson, it was reported in the

ark

vote

succeeding

to

President according to the "New¬

will

30,000 shares of preferred stock

.

bonds and debentures.
Net proceeds will
finance construction progranri
through 1950.
underwriters: Harris, Hall & Co.

Service Co.

stockholders

News About Banks and Bankers
(Continued from page 16)

Public

Saving

Philadelphia,

Pa*

Currency reported that

tors and Comptrollers, as a mem¬

National Bank in Childress,
Texas,

of

increased

raises the capital from $25,000 ,tr>

ber of the Nashville

Board

of

Chapter, AIB,

Governors, and

structor-in

its

courses

on

an

in¬

Bank

capital

on

stock

$150,000 by

a

The First

Sept, 21 its
from

common

from the office of the
the

Currency.

$50,000.
$100,000

stock dividend.

to
/

The

•

-

■

*'

Comptroller
The addition

•

common

*•

..

capital

•,/

|

.

-j

,

.

stock

of

\

lume 170

First
xico

Number 4844

National

was

m

$159,000

ck

New

An

Sept. 19

from

Bank,

increased

THE COMMERCIAL &

on

dividend

$300,000 by a
according to the
pt. 26 bulletin from the office
the

to

Comptroller

of

the

Cur-

cy.

Associated

San

Press

Francisco

reports the appointment of Louis
B. Lundborg, Vice-President of
Stanford University, to become
Vice-President of the Bank of
America, San Francisco, on Oct.JL.

*

-

*

*

On Sept. 21 The First National
lik of Las Cruces, New Mexico,
stock

dividend increased its
on Sept. 21
m
$50,000 to $100,000 accord*to the Sept. 20 issue of the
a

rrimon capital stock

ljetin

from

the

office

of

the

mptrolier of the Currency.
"

,0

J/,

*

*■

*

,

he board of directors, of Citi-

National

s

Trust

Savings

&

*

greater controls lies in the export

promotion of Eldwar4~L.
Johnson to Assistant Secretary of
California

Trust

Co.

of

field, to divert exports from the
"unrequited" and other soft-cur¬
rency countries to the dollar are
—by some kind of subsidies or

Los

Angeles, has been announced by
Frank
L.
King, President. Mr.
Johnson joined the trust com¬

pany's

in

staff

definite compulsion, possibly by a
re-institution of stringent export

February,

1946,
after serving several years in the
Navy as legal officer with the
rank
He

of

Lieutenant

formerly

practiced

in

ard,

licensing.

law

difficult—partly

announced

was

on

the

finance

pt. 22.

*

*

*

*

in

Farmers & Merchants National
k of Los Angeles, on
nounced

*

engaged

business

in

Sept. 20

the election of Ernest

Bryant, Jr., cattle rancher,

as

member of the board of direc-

succeeding Frank H. Powell,
cently deceased, according _to
Los Angeles "Times" of Sepber 21.
*'/■*
' '
• s,

office

profits when they

force is

directly engaged in pro¬
duction for export.

the United States Na¬

when asked in last week's

"What

tional Bank of Portland, Portland,

are

the

debate,

safeguards

for

a

free pound?" replied, "Control of

Oregon.

present instance we see that in
the face of the most Watertight,
complex, and efficient exchange
controls in history, an inflexible

England Under Devaluation
(Continued from first page)

conducted, following tradition,
a London "Pub" a few nights
o. Two of these "ppll-ees," one
ex-convict
briated

and

the

other

an

truck-driver,

opened
conversation with your visitYank

with

bitter

a

tirade

ainst their present government,
ey

mentioned

the

Immediate

the

devaluation

cause

of their

ipe.

This included Criticism of
of the sterling cut, but
iefly and significantly reflected
size

e

eir broad realization that some-

ing real has

wrong with
The details of
e baiance-of-payments problem
i of course, not at all grasped
the man-in-the-Pub (as they
gone

eir government.

hot be even by the Cariiidge%economists), but the fact of
'exnal difficulty concretely eviced by the forced devaluation
ve has sharply awakened him
y

the, fact

that

something

very

rious has "Gone wrong in Den-

rk."

This follows their previ-

major "peeve" against their
bor Government when it was
emed to
ask alms from the
ited States in the form of Mars

2%%

which

coupon

only four cents

was

per

$1,- balance to reimburse its treasury
for previous construction expen¬

000 below the tender of the run¬

ditures and to

ners' up.

Inquiry, prior to the bidding,
is

said

to

potential

have

indicated
on

basis of 2.85 to 2.89%.
basis

of

the

was

price

the

company

that

be

buyers would

terested in the bonds

in¬

yield

a

On the

paid to

reoffering

the

price

set at 100-M to yield 2.825%.

provide for further

additions and improvements to its

properties.
Capitalization
to

the

of

company

be

outstanding at the conclu¬
sion of the financing consists of
the $18,000,000 of 2%% first mort¬
gage bonds and 850,000 shares of
common

stock.

The company is engaged in the
prospective
buyers distribution and sale of
natural gas
were .not especially
interested at in an area embracing portions of
that level so dealers in the win¬ the
States of Missouri, Kansas,
ning group now figure they have Oklahoma and

Well

the

Nebraska, On June
their hands which 30,
1949, the company had 361,083
keep the next few
customers, most of whom were
days from proving tpQ dull.
residential and commercial.

something
will

at

on

least

exchange rate has not held.

market merchandise discount has

This of course is not to suggest
up.) This course of con¬
Schachtian
trols naturally largely depends on that
export - control
the results of the next election. techniques will be at all success¬
Should
the
Conservatives
Germany could apply its
gain ful.
power, or if a Coalition be formed)1 watertight controls in a very nar¬
present controls would be some- row sphere, whereas the area of
vwhat relaxed, particularly af sterling restrictions is spread all
started

the world.

home. Should, however, the pres¬
Labor Government
be
re-£

:

effects.

their task at the moment.

They are reported to be doing
plenty of "looking hut very lit¬
tle
buying"
at
the moment.
"Moreover, if current discussion
is
well-based, some of these

showing a revival of
Interest in private deals.
people

are

With Stephenson, Leydecker
(Special to Th$ Financial Chronicle)

OAKLAND, CALIF.—Arthur V.
Holmlund

is

with

Stephenson,
1404 Franklin

Leydecker & Co.,
Street.

As the story goes there are sev¬
eral of the latter approaching the

DIVIDEND NOTICES

stage where the news should
break in a short time. Meanwhile
the details

are

being

very

AMERICAN

closely

guarded.

CAN

Big "Standby" Ready
Bankers

were busy this week
the finishing touches to

v

COMMON

COMPANY

STOCK

On September 27, 1949 a quarterly dividend
pf seventy-five cents per share was declared on

Harold

over

putting

the Common Stock of this Company, payable
In the field of imports, restric¬
their plans for bidding oh Ameri¬
November-15/1949 to Stockholders of record at
turned with anything more .than tive practices are also growing.
can Gas & Electric Co.'s proposal
the close of business October 20, 1949. Transfer
a
bare majority, ■ there will be Even the much-heralded relaxa¬
to underwrite its offering pf 498,- books yilji remain open. Checks will be mailed.
more planning and controls piled tion of import controls announced
EDMUND HOFFMAN, Secretary.
081 shares of additional common
on to combat devaluation's after-* last week by Minister of Trade
stock to its junipr holders.

ent

.

This will
of various

sions.

As

be

so

partly because

inflationary
Mr.

Bevin

repercus¬

freeljL^hd

cheerfully admitted in a conver¬
sation with your correspondent
here

today:

"We

can't

possibly

Wilson really comprised
discriminatory action against the
hard-currency countries. The
newest Argentine
currency
de¬
valuations are merely the coun¬
terpart and continuation of what

Britain has initiated.

••

Proposals

were

opened just before

slated
noon

to be
today,

the company having announced
earlier in the week that the

price at which the shares would '
be offered had been fixed at

Also, if all does not go too well,
devaluation?
Stockholders of record at the
there will have to be a real re¬
But if things go wrong, of bourse
duction in capital investment, by close on Oct. 7 will be eligible to
we will increase the controls.".
subscribe at that price in the ratio
And
in
his speech before the private interests and public bodies
foresee the results of

..

Commons

Sir

essence

of

alike—which constitutes another of one new share for. each nine
Gripps
requirement for more government held, plus additional stock subject
"It is of the:

Stafford

quite frankly said:

the continuous

tiveness of this drastic action that,

As

,

The

clared

the atchison, topeka and
santa fe railway company
New York, N. Y.,' September 27, 1949
Board of Directors has this day de¬

the

usual

quarterly

dividend

of

of

the

Company, and an extra dividend
of Two Dollars ($2.00) per share on the Com¬
mon Capital Stpck Of the
Company, both pay¬
able
December
1,
1949
to
holders' of
said
Common Capital-Stock, registered on the books
of
the
Company
at
the
close of
business
Ocfob"r
28,
1949.
Dividend checks will be mailed to holders
of Common Capital Stock who have filed suit¬
able

orders

therefor at this

office.

*

*

D, C, WILSON, Assistant Treasurer.
120 Broadway, New York 5, N. Y.

a

COMBUSTION ENGINEERING-

SUPERHEATER, INC.
Dividend No. 181
•

•

•

*

•

•

A

quarterly dividend of fifty cents (50c) per
on
all
the
outstanding stock of the
Company has been declared payable October
31," 1949 to stockholders of record at the close
of business October 17, 1949.
share

OTTO ,w. STRAUSS,

JOHN MORRELL

Treasurer.

&* CO.

DIVIDEND NO. 81

A

dividend pf Twelve

pn4 One-Half Cent*
($0,125)
the

per

capital

share

Placed

.

=

,

...

.

.

on

stock pf

John Morrell & Co. will
be

paid Oct. 29, 1949, to stockholders

pf record Oct. 7, 1949,

as

sho wn

on

the

books of the

Company,

Ottumwa, lowi.

Etorgs L Morrill, flu Frit. I Treat.

''

Gas Service Go. Bonds

...

One

gollar andno:* l4T;~on'($1.50) Common Capital
Fifty Cents the per share; being
ividend *
Stock

to allotment.

controls.

effec¬

keynote to the potentiali¬
No Immediate Change
ties for planning and controls it
we
should not flinch from the
From a look at the new pros¬
should be noted that, similar to
necessary economic rest ru i n t s
the United States, a great part of pects calendar it appears that at
which it imposes on us."'
11 Aid.
the power therefor exists through least another week must pass be¬
In a way, such reactions to the
Controls
will
be
callecp for general
enabling acts passed by fore things really begin to pick up
mprehended international mon- mainly because of various facets Parliament, with the administra¬ in the new issue field.
of the inflationary repercussions
ary happenings operates sometive provisions broadly delegated.
There are a few small offerings
*ng~ like the psychological de¬ from devaluation. The dire need Hence it is not too difficult to due up in the week ahead includ¬
nts of gold standard operation. for linking greater production to
sidetrack the legislative body.
ing $3,000,000 bonds of Utah Pow¬
devaluation is not merely a "plati¬
*
* *
*
In addition to the public alarm
er & Light Co., on Monday;
$8,tude, but must be effected—if nec¬
oused by the external factors of
of Arkansas Power &
Hence it must be concluded that 700,000
essary by strong-arm methods-^valuation, the ethical elements
devaluations may prove to be one Light bonds and equipment cer¬
ve antagonized
the populace— before the nation goes bankrupt. more major step in this country's tificates issues for several roads
Also there will be the necessity-pi
road to ever-greater planning, if oh Tuesday, Thursday and Friday.
rticularly in view of the Chanllor's past recurrent protesta- dealing with new wage demands* not to
The following week will bring
actual collectivism!
As pointed out by Professor JUawns of the "impossibility" Of deout three large new issues, topped
trey, it will be maintained that
luatipn. Thtis it is that our
by $40,000,000 bonds for Indian¬
without a rise in wages, those
en-of-the-Pub
want .Anthony
apolis Power & Light, at compete
'en back to head up a Coalition producing dollar exports will-be
tive bidding, and $25,000,00,0 of
the
excess
profits
overnment.
Mr. Eden, having securing
pew
preferred stock of Public
yielded by a market in which the
Service Electric ,& Gas Co. by
splayed his intestinal fortitude
sterling equivalent of a dollar
resigning from the Chambernegotiated deal on Oct. 19.
"
price has risen by 44%. And
in Cabinet on a matter of deep
hence
labor
will
contend
that
inciple, apparently portrays inwages should rise by that amount.grity—more so than does Mr.
The governmental lid that may be
urchill. ;':v
needed to prevent that, is fore¬
on
fhe writer has discussed with shadowed by the present French?
yeral Conservative members of crisis.
Alternatively, for placatiom
Blyth & Co., and Kidder, Pearliament facing an election test, of the unions a broad institution?
The current dearth of new busi¬
body & Co. are joint managers of
eir line of campaign midst and of
price controls may be required. ness is starting to get under the an
investment
banking
group
ainst Welfare-Statism. To them
And who will predict that Sir skins of those bankers and deal¬ which is offering publicly today
their need for un-academic inStafford's intention to withhold ers who normally find enough to (Oct. 5) a new issue of $18,000,000
ctment ot the profligate spoils
do to keep them busy by way of 2% % first mortgage bonds of The
a bread-price
subsidy will hold?.
stem and the
pay-more-thanIn the absence of price controls' to assisting industry With its task of Gas Service Co., a public utility
u-can-afford procedure, the decounteract the effects of rising securing new working capital or subsidiary of Cities Service Co.,
luation has come as a political
raw* material import prices, sub¬ refinancing existing debts.
distributing natural gas in Kan¬
d-send.
sidies to importers may possible
sas
City and surrounding area
Momentarily these interests
be used.
are irked* to put it mildly, by
having an estimated population of
The Effect on Planning
the wave of ultra-selectivity
1,500,000? The securities are priced
It must be realized that the
vital aftermath of devalua¬
at
100.75 and accrued
interest,
which appears to have gripped
Labor ranks are badly split, be,te weigh is whether, it will
the general investment market.
yielding 2.825% to the maturity
tween the T. U. G. upper-echelon
to higher degrees of planning
date of Sept. 1, 1969.
That buyers are firmly back in
controls, tp combat the.after- and the rank-and-file who regard
the "driver's seat" was indicated
General redemption prices on
the former as in cahoots with the
ts assuming that they are unby the experience of those who
the new bonds range from 103.75%
actory. (Already a black- government. It is the rank-and- took on this week's offering of if redeemed on;or prior to Aug.




31, 1950, to par after Aug. 31, J968.
Sinking fund redemption prices
are scaled from 101.10 on Sept.
1,
1950, to par on Sept. 1, 1968.
The company wijl use the pro¬
ceeds from the sale to prepay out¬
standing notes aggregating ap¬
proximately $15,000,000 and the

any

sending large sums abroad.
AH
this was applied in 1931." In the

.

20-year first mortgage bonds.

39

Gross operating revenues for the
Looking at Private Heals
12 months ended June 30,
1949,
event, more not less ex¬
Institutional buyers with money totaled
$28,198,259 and net income
port controls and compulsions are
available for investment are plain¬ amounted to
$3,074,946.
in the offing. Even Mr. Churchill,
ly in no great haste to get on with

,;Jn

capital of $50,000 went into
as

available.

industries.
In
England
only 2 to 2% million of the labor

voluntary liquidation, haying been
absorbed

are

export

of ihe

Comptroller of the
Currency reported that effective
Sept. 15 The First National Bank
of Monmouth, Oregon with a com¬
mon

because

Now in France there is agitation
for forcefully diverting labor into

*

The Sept. 26 bulletin from the

Victor H. Kossetti, President of

I

loan

voluntary

of the
income-tax factor which nullifies
the net effect of greater gross

Indianapolis, Ind.

it

was

Otherwise,

diversion of increased production
to effective exports will be very

Commander.

Cleveland and later

nk of Los Angeles has elected
rlE. Baker as a member of the

'$18,000,000 of Gas Service Co.'s

Six groups bid in competition
like Sir Stafford's 5% rise in for
.this issue, the first sizable, un¬
the distributed profits tax.
dertaking to come to market in
several weeks.
And the winning
Export-Import Controls
group paid the company a price
Another'quite possible field for of 100.099 for a

The

the

(1387)

sop

>

$

CHRONICLE

file that will have to be pleased,
arid with something as drastic as
price control rather than a mere

dispatch
Sept. 22

on

FINANCIAL

Market

CONSOLIDATED
NATURAL

GAS

COMPANY
30

Rockefeller Plaza

rNew York 20, N. Y.
Dividend No. 12

The

board of directors

has this day declared a regular
semi-annual cash dividend of
One Dollar

($1.00) per share
stock of the Com¬
payable on Noyember IS,
1949, to stockholders of record
at "the close pf business Octo¬
ber 15,1949.
on

the capital

pany,

E. E. Duvall, Secretary
October 5,1949

FINANCIAL

&

COMMERCIAL

THE

(1388)

•40

CHRONICLE

Thursday, October 6, 1949
the

under

BUSINESS BUZZ

June
On

•

'

push
total

**1 \/r|| m

wlMs

JLJLm

out

the

of

finance

Treasury Secretary Snyder has been try¬

House
closed
had
similar closed meetings
with
the foreign affairs committees
before,

ago

the
in

that it

ed

which

Following the meeting with the
Banking
committee the

House

not

Kentucky, ex¬
plained that as a "gesture of good
will," the Secretary appeared to
report the progress of foreign

of weeks

of

loans. It was claimed to be a good

will

the

after

because

gesture

British loan agreement was work¬
ed
out the Banking committee
lost to the House Foreign Affairs

foreign loans.
what

explained,
did was to

was

Snyder

Mr.

of the

members

the

ask

to

over

-

it

Actually,

mittee

jurisdiction

the

committee

com¬

"for

tolerant

be

a

temporary
period"
of
any
seeming breaches by
the British of the non-discrimi¬
further

the

of

section

nation

loan

agreement.'.'.-.;.
Members of the committee got
impression that Mr. Snyder
•definitely expected the British in

the

make some
further breaches of the non-dis•crimination section. However, the
the

future

near

to

get

This

is

the session.

in

777-V

'49.

Thus,- it
t h

t

a

the

welcome

mendations

the rocks of

on

a

President's recom¬
that
tax incentives

has

already

taken

the

calling for such variety
revision as will spur busi¬
to invest so as to maintain

lead

in

ness

American

the

economy

on

the

.high level of the postwar era or
"better. Should the Administration

through with
proposals for general tax legisla¬
tion carrying the characteristic
pitch against either business or
businessmen, it is presumed that
the Georgia senator will fight this
approach and work to get his
alternative of business incentive
next January come

tying at least
to

an

the Act's

admitted

they

If
it

the

President

to

desirable

is

what

the

impact

foreign

Upon

admits that
ease

of

"cut"

ideological

taxes

ment,

to

the

the

burden

it

invest¬

domestic

upon

where

such

of

a

much

greater stake is involved.
It is still unknown

the

ever,

whether the President will

propose any

What

tax legislation,

character.

or

of

Conservatives




fore which

pro¬

intervention

the

of

on

White

House

this

year pass its version
security expansion, but
they backed down.

of social

It looks

,

as
though Mr. Tru¬
in keeping the boys long

man,

the

this legislation will

be heard. He has not

which

that

considering

portedly
plifying

for
prospectuses, 7

its

of

some

been ad¬

of legislation
agency
is
re¬

SEC

by

restrictions

sim¬
a n

d

upon

the advertising of securities is¬

■'.7
777777

7.7■ 77

sues.

had'

of

Senate Banking committee, be¬

an¬

guaranty under Point IV, but
the

subcommittee

SEC

the

of

duced sin atomic explosion, but
it was on the way to defeat be¬
fore that report.

*

■.

*

*

7".' 77'

77 77/

Those

public
housing
"pro¬
gram reservations" flowing in at
a rapid rate, are taken here with
dash

a

of

salt.

So

far

the

Pub¬

lic

Housing Administration has
tentatively around 200,000 of the 810,000 units of the sixyear program to some 90 munici¬
palities. '7'-',;:7-7;7
7:77"; ,7'7
allotted

This would lead to the conclu¬

sion

that

the

is travel¬
ing at a great rate and that in
nothing flat the bricks and mor¬
tar might start falling into place.
program

Actually, what PHA is doing
is

that the largesse is
be optioned, and sug¬

saying

here

to

school,
has
developed
something new in American po¬

gesting that everybody come
and get it. Cities were asked
to state how many
of these

litical

housing units they could handle

after

bers
so

management. The'mem¬

resent

being kept around

long, and

sullen and har¬

are

ried, except those who have lit
off

in

a

ask

two-year program, and to
effect for an option on

in

that number of units.

Since these public housing units
in fact,

are

although not in form,

least 90%

at

gifts from the Fed¬

COLO.

DENVER,
has

Denison
with

Peters,

—

J.

Frank

become

associated

Writer &

Christen-

1

Inc., U. S. National Bank
Building, members of the Chicago
Stock Exchanged Mr. Denison fo
many 7 years
was
with
Calv*
Bullock.
sen,

eral

government, it was not sur¬
prising that there was enthusiasm

the cities when the hous¬
ing angel blew his trumpet.
7
among

will

It

be

different

a

volume when the

time

story

comes

on

for

with cleared sites,
architectural drawings, and the

proving

up

hundred

and

technical

one

de¬

tails that must clear to the satis¬
faction

angels.
grams

of

is

to

not

say

that

the

program will be slow after it
has

been

or

operating

for

year

a

and the grooves between

so

cities and PHA have been well
worn

defined. It is only

and

question

of

the

or

a

beyond

program

fiscal

This

of

housing

units
than

placed still at not more
units and many projects

will be-classified

when

and

a

been

as

started at the

plans

architectural

if

firm

tive.

as
.

a

associated

Wood

with

the

registered representa¬

77 7 ,,777;

Waddell & Reed Adds
(Special to The Financial Chronicle)

COLORADO

SPRINGS, COLO.

—Claude R. Blue is with Waddell
& Reed,

Inc., 1012 Baltimore Ave.,

Kansas City, Mo.

Cement Stocks:
Spokane Portland Cement
Oregon Portland Cement

Coplay Cement Mfg.
Glens Falls Portland Cement

construction contract have

approved.

■

;

Consequently there will be lit¬
tle

become

Riverside Cement

however,

year,

public

50,000
stage

has

so

original 810,000 units.

"starts"
are

the

that Kenneth H.

announce

a

be¬
clamor for

year

a

fore there will be

boosting

& Co., 40 Wall
Street, New York City, members
of the New York Stock Exchange,

Public

the

Housing
Many of the
city's pro¬
will be cut back.

That

C. Bradford

With J.

J. C. Bradford

any

call

upon

ment trade to sell

authority bonds

the

invest¬

public housing

on

new

projects

LERNER & CO.
Investment

10 Post Office

Securities

Square, Boston 9, Mass.

Telephone HUbbard 2-1990

7 Teletype B8 69

foreign junkets. Yet the
Congressmen are apathetic. In a
on

kind

of

weary

they

are

of the

bored way

and

letting

slip

through
things Mr. Truman

HAnover 2-0050

wants. '
*

Despite his
of

the

and

bill

regulation,

act's

sections

Exchange

to

subject

under

12, 13,

corporations
of

endorsement

warm

SEC

more

that

with

assets,

the

proposition

the

14,
.

year

TeL WHitehaU 4-4540

HARL MARKS & PA INC;

16,

FOREIGN SECURITIES

Senator

on

will

this

be

Offices

70 WALL STREET

SEC

and

Executive A Underwriting

All Issues

$3,000,000

etc.,

hearings

next

NEW YORK S

FOREIGN SECURITIES

to

J. Allen Frear of Delaware
prom¬

ises

Hill, Thompson & Co., Inc.

#

Securities

Commission's

or

Teletype—NY 1-971
Firm Trading Markets

*

all

here, how¬

Senator Frear is Chairman of

can

time

after
Russia

nouncement

taxation

investments,

lessen

time for every¬
body to propose modifications.

than

extension

at

failed

some¬

will be argued that it is equally

valid

wide open, with

publication, but they failed. The
foreign
arms
aid
so-called

some

enacted.

taxes

:

vertised

House, the Senate committee re¬
provided for private invest¬ ported it unanimously, and it may
ments in foreign countries—-but as be approved by the House com¬
an
argument for tax incentives mittee. A while back House lead¬
ers
were
upon domestic investments.
saying they would be
Senator Walter F. George of doggoned if they would let7the

•Georgia

play, make it the Bronx Zoo-—instead of the ballet, make if
Coney Island!" 7'7'

a bill. Op¬
ponents of reciprocal trade ex¬
tension were more confident of

on

'.7. 77;. •' 7,'

•

Peters, Writer Firm
"Cut it down just a trifle, Pettingill—instead of taking buyers
to the Stork Club., make it Nedick's—in place of a Broadway

and be held up, yet both

be

ot tax

securi¬

In the past he was

Frank J. Denison With

of its cov¬

Neither Banking committee was
enthusiastic about the investment

*

*

*

-

the scope

over

Co., Inc.

Houses have passed

departure, the Secretary is re¬

Conservatives in Congress will

MD. — Ross F.
offices at Ce-

open

McDonald &
Co. of Kansas City, Mo., and prior
thereto was with Taussig, Day &

7"; ;.77-77'.

expected widely
hour legislation

was

wage

would smash

temporary

ported to have indicated.

will

Collins

77;7":;7;77y 7-'7

Some of the most experienced
politicians in Congress, politicians
incidentally
more
experienced
than Mr. Truman, were a few
months ago saying that with re¬
spect to a number of things the
President wanted, he would get
little or nowhere with Congress

the forth¬

a

Annapolis

en

ANNAPOLIS,

tive program either enacted or
pushed farther on the road toward
enactment, directly as a result of
his
insistence
upon
prolonging

that course in a

are

Ross F. Collins to

that

President of Collins,

forthcoming

deals

coming

views.)

ties business.

non-discrimi¬
nation
section,
however, the
TJ. S. after a short period will
learn
that
Britain
has
not
abandoned multilateralism, hut

which

own

theless succeeded in getting sub¬
elements of his legisla¬

the

of

"Chronicle's"

the

couple

stantial

most adversely.

Is returning to

re¬

leaders

the

darundel to engage in the

erage,

program

(This column is intended to

flect the "behind the scene" inter¬
pretation from the nation's Capita
and may or may not coincide wit

Open

such bilateral
agreements or what U. S. export
commodities
might be affected
these

would

as

rate, or 2%%, but probably
yielding much less because of it
tax exemption.

Harry Truman,
even though he has kept an un¬
willing Congress here long be¬
yond the fatigue point, has never¬

ain might announce

of

terms

ment

been talking with a "hope
springs
eternal"
attitude,
one
thing is said to, stand out sharply.

row

Despite

same

have

Secretary reportedly did not dis¬
close with what countries Brit¬

breaches

of

'■

.

project under the new act,
with a top coupon rate not to ex¬
ceed the then long-term Govern¬

level

another

in

some

as

re¬

a new

activity.

away

Govern¬

taxes

of

wary

the

::7; '77'.

<

will bear the

Whether Congress does or does

chairman of that committee, Rep.

Spence

was

might depress the

of business

public housing

to the market ta

However, the issue in question

mid-year Economic
Report, the White House show¬

of the two Houses,

Brent

■act.

its

in

most

place temporary financing On
old public housing projects, or
those put up under the old 1937

On the other hand, it is noted

that

is said

get long-term financing to

ing to ease Britain's relations with the U. S. Congress by preparing
the path in advance, as it were, for the British to announce some
more trade deals of a bilateral character which discriminate against
American merchandise in seeming'^
violation of the non-discrimina- generally feel that the logic of a
-tion clause of the British loan deficit of $5 billion for this year
agreement of 1940, Capitol Hill and probably more for next year,
demands a plea for budget-bal¬
sources report.
ancing tax increases.
Mr. Snyder appeared a few
days

new

Instead

will go

ment

Banking' committee

issue

$100
million. Its purpose will not be

projects.

session. He is said to have

is out to

year

#

tentatively, to be around

JL fJlw

to

WASHINGTON, D.

next

l&tfe cf public
authority bonds. The

-housing

yl

Capital

from the Nation's

•

before

the other hand, PHA ex¬

pects before the

Washington
Behind-the-Scene InterjjrjU^n*

act,

new

30.

Trading Department

SPECIALISTS

120

50 Broad Street
——

New York 4, N. Y.

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