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ESTABLISHED 1S39
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Section If
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Reg. U. 8. Pet. Offloe
Volume 178
Number 5262
New York 7,
N. Y., Thursday, October 8, 1953
Price 40 Cents
a
Copy
EDITORIAL
What Are
SeeWe
It
As
At least two
groups are now
intensively study¬
ing our foreign economic relations, which means
for the most part our
gifts to foreign peoples and
our tariffs
imposed upon the goods they would
sell us. Precisely what these
study groups will
accomplish remains to be seen. Such organiza¬
tions often
a
are
the
some course
authorities
Mr. Bratter calls attention to criticisms in
some
Market analyst believes market will continue in "consoli¬
monetary history and notes
our
at present
as
dating period," to be followed by dynamic phase of
surpass 1929 peaks and
eventually achieve doubling of present D-J average. As
long-term advance which will
agitation for
is "nothing
in
new
bullish factors he lists:
Washington."
(1) Market's technical posi¬
of statistically-demonstrated
value; (3) Nation's tremendous further consumption
potential; (4) Increase in money supply and shift in
its control;; (5) Increasing population, and (6) Favor¬
viewers, subscribers to the ''Democratic Digest,"
readers
of
the
CIO's
publication
and—above
all—
investors, bankers and other members of the financial
community have lately become aware of the "to-do" in
the Congress over interest rate pol¬
icies
it is well that these subjects hav¬
ing to do with our economic relations with the re¬
of
the
Eisenhower
able
Admin¬
tive, with growth stocks
and instituted the Republican "sound
money" policy, interest rates have
risen, the Government bond market
has experienced some sharp declines
and some leading Democrats have
been making dire predictions as to
what this is going to do to business.
The
,
Administration's
money
v.
week
we
next
month.
I
am
talking
am
.
I believe
the start of a longin the price of com¬
ably above the levels reached in 1929.
ous
Herbert M. Bratter
sordid, cruel, damaging,
economic murder.
It is, say some
Senators, a bankers' policy, a policy designed to line Wall
Street's pockets at the expense of the rest of us. It is,
we are told, part of the "Cadillac
crusade"; the rich man
against the little fellow; - the city slicker against the
as
farmer.
The
.
charges
depression
have
'thirties,
Before this
what
when
the
Democrats
drove
1920s, during the post-World War I deflation,
as
earlier political fights over
a
the
of
the
age,
CONVENTION
ISSUE
OUT TODAY—Section
on
Two
of
witnessed
half
a
trading
Dow-Jones
Since
In
area.
terms
Industrial'
aver¬
and
for
240
little
low.'
I
to
average
expect
hold
further period
a
reason
to
change
in
the
Edmund
W.
a
of six to
my
trading
"Chronicle"
Tabell
this
nine months.
forecast
made
on
I
see
in
Continued
that 1953 would be
area
36
today's
the
over
years.
the range has been between 295
Industrial
well,
page
and
broad
high
"the money question."
Continued
36
as
be
February, 1951, the market has held
the
recall
They
may
irregularity similar to
have
we
two
past
in
ring.
happens, there
further
some
.
familiar
a
advance
stocks that will bring the vari¬
stock market averages consider¬
area
an unsatisfactory outcome.
jFirst of all, of course, we are unfortunately not
However, I
very near
described
but lead to
-
recently
averages
low territory for the past two years, my
new
or
are
mon
"money changers out of the temple" and put FDR in the
stitutes
market
term
White House. They recall the money debate of the early
NSTA
stock
about the next few years.
pro¬
our
page
various
title may seem to you a bit premature.
not
talking about tomorrow, next
part to take the entire setting into account could
on
the
-
say its opponents, spells de¬
flation, depression, catastrophe. In
Congress and elsewhere it is being
inquiries, the public of¬
ficials and legislators who have set the projects
in motion or yet the rest of us who stand by and
watch what is going on—let none of us lose the
fact to sight that the terms of reference under
which these bodies are working limit them to but
a
part of a situation which far transcends tariff
Continued
With
reaching
gram,
selected to conduct these
on
of Republican Administration, including
Expects market's rise to be selec¬
and investment favorites the
early leaders, speculative cyclical issues joining in later.
Secretary George M.
Humphrey took over the Treasury
portfolio in the Eisenhower Cabinet
good airing. There
is great need for more careful and more dispas¬
sionate thought about all of them. Few subjects
are more the victims of
prejudice, concealed or
semi-concealed self-interest, and of all sorts and
varieties of misconceptions^, And, we might add,
fesw are more bedeviled with politics. By all
means let us have
thorough, open-minded, realis¬
tic study of all aspects and facets of them.
Let us, none of us, either the individuals
policies
-
rational tax program.
istration. Since
a
Its foundation
(2)
tion;
TV
In any event,
Failure
of
inflation in the 1930s
find
set in advance, to
and "unilateral transfers."
General Partner, Walston & Co., Members N. Y. S. E.
Congress and
scribes Treasury's reaction to this opposition. Reviews
political pressures
threatening to become unbearable, or to seek real
solutions for problems which either
politically or
otherwise appear difficult.
rates
In Common Stocks
By EDMUND W. TABELL
elsewhere of the Administration's money program. De¬
of
mainder of the world have
Coming Advance
By HERBERT M. BRATTEK
used for various purposes—to
justification for
relieve
The
They Doing to
Our Money in Washington?
January
between 300 high and
page
30
con¬
Special Supplement devoted to the Annual Convention of the
NATIONAL SECURITY TRADERS ASSOCIATION at SUN VALLEY, IDAHO
an
80-page
State and
II. S. Government,
State and
Municipal
WESTERN
NATIONAL BANK
Securities
Bankers
to
the
Government
telephone:
HAnover 2-3700
Office:
Bishopsgate,
London, E. C. 2
Branches
Chemical
In
26,
Pakistan,
India,
Direct Private Wires
Coast to Coast
Ceylon,
Aden, Kenya, Tanganyika,
Uganda, Zanzibar, and Somali-
Burma,
land
BANK & TRUST
Capital
Capital
Paid-up
Fund
Reserve
£4,562,500
£2,281,250
THE NATIONAL CITY BANK
ESTABLISHED
50
The Bank conducts every description of
banking
and
exchange
V
business.
also undertaken
Bond Dept. Teletype: NY 1-708
Active
Net
.99
WALL
Listed and Unlisted
To
Dealers,
Inquiries
invited
T. L. WATSON &. CO.
—
Refined
—
New
Liquid
York
Stock
Broadway, New York 4, N. Y.
Telephone WHitehall 4-6500
Teletype NY 1-1843
DIgby 4-2727
PERTH AMBOY
DEPARTMENT
WIRES TO MONTREAL AND TORONTO
MEMBERS
NEW YORK
Central Vermont
Public Service Co.
COMMON
Booklet available
&
Co.
STOCK EXCHANGE
DoMMioTf Securities
Grporatioti
1 NORTH LA SALLE ST.
40 Exchange Place,
New York 5, N.Y*
CHICAGO
Teletype NY 1-702-3
WHitehall 4-8161
upon
request
IRAHAUPT&CO.
Members
111
Boston
York Stock Exchange
Principal Exchanges
New
and other
Broadway, n. y. 6
WOrth 4-6000
BROADWAY
NEW YORK
YORK
Orders Executed On All
Goodbody
115
BRIDGEPORT
Brokers
Teletype N Y 1-2270-X
DIRECT
50
BANK
OF NEW
Maintained
and
BONDS & STOCKS
CANADIAN
Exchange
CITY
Western Cities
Canadian Exchanges at Regular Rates
American Stock Exchange
Exports—Imports—Futures
10 other
Preferred and Common Stocks
members
Raw
and
CHASE
NATIONAL
OF THE
CANADIAN
Commission
SUGAR
Banks
THE
Spokane
Light & Power
SECURITIES
5, N. Y.
Markets
Denver
^
A
Mexican
STREET
NEW YORK
Salt Late City
Los Angeles
'
Trusteeships and Executorships
1915
Principal Exchanges
BROADWAY • NEW YORK CITY
Members of All
£3,675,000
.
Bond Department'
J. A. H0GLE & CO.
Protectorate.
Authorised
COMPANY
LAMB0RN & co., Inc.
Bonds
SECURITIES
in
Kenya Colony and Uganda
Head
Municipal
OIL & MINING
of INDIA. LIMITED
Teletype NY 1-2708
Telephone:
Enterprise
1820
2
The Commercial and Financial Chronicle
(1322)
Thursday, October 8, 1953
...
i
The
WE POSITION and
IN
TRADE
Security I Like Best
This
Forum
A continuous forum in which, each week,
a different group of experts
advisory field from all sections of the country
in the investment and
American Maize Products
participate and give their
Central Hudson Gas & Electric
reasons
for favoring
Their
Continental
neering
Central Public
(The articles contained in this forum
Utility
they to be regarded,
are
Gulf
Interstate Gas
GEORGE
Units, Notes & Common
J.
as an
offer
DeMARTINI
intended
not
are
be,
to
nor
&
monson
and
Engi¬
'
Alabama &
I
.4
•
Louisiana Securities
Partner, Cohen, Si¬
Co., N. Y. City.(P. 2)
*
r
Bought—Sold—Quoted
North American Cement Company
Herbert E. Greene, Resident
of engines for three models
source
Aviation
Corporation—George J.
DeMartini,
,
sell the securities discussed.)
to
Selections
r
particular security.
a
Week's
Participants and
—
Partner, Cohen, Simonson & Co.,
:■* New
York City
Metal and Thermit
Michigan Gas & Electric
and American Stock
Corporation
Continental Aviation
helicopter "which
with outstanding success.
major redesign program has
of
Oct.
the
efficiency
ing
its
chase.
R-975 and step up
The
16, 1952, at
its output from
horsepower.
research
division
of
the
developed
has
company
New York Hanseatic
time
mental
pur¬
the
Standard
1920
ty factor
selling at
12, and the
preferred
Stock Exchange
Broadway, New York 5
of
Sept. 30,
ard
Rights & Scrip
at
George
J.
DeMartini
is
and
18,
preferred
at
I still think Standard Pack-
aging holds promise of being one
of the most dynamic situations on
either
Since 1917,
been
of
completed.
Roads
least
has
billion
four
dollars
will have to be spent on
for
several
event of
years,
a
year
in
that
the
com¬
substantial amount of
a
Exchange during the
ing 18 months
com¬
engine
is
year earnings should exceed 600,
and
for
the
should be in
This
coming
situation
year
of $2 per share.
excess
fits
the coming civil
fiscal
directly
to
branch
our
offices
building contracts, intensified
highway construction could take
new
Interest
much of the slack.
up
The
following
tabulation
from
exempt
Federal
indi¬
Income
present
Taxes
cates the approximate distribution
and
of cement:
uses
Water systems,
$100,000
bridges, etc._ 18%
Rural
consumption
Pwr. projects & flood control
9
Commonwealth of
'*
15'
25
33
Massachusetts
almost certain de¬
an
cline in building
construction,
Registered
we
feel that the increased demand for
in
utility
construction,
bridges, together with the pent
demand
will
than
offset
the
of cement for
use
tial and industrial
Price 78
easing
and
interest
residen¬
building.
The
history of this
uninteresting until
was
1% Dec. 1, 1970
up
forj highways and roads
more
of the
into
defense program
NY 1-1557
Mobile, Ala.
Direct wires
flood control, power projects, and
jet
St., New York 4, N. Y.
New Orleans, La. - Birmingham, Ala.
continued downtrend in
a
cement
its
on
Exchange
the
production
scheduled for early 1954.
It is in¬
dicated that for the current fiscal
Exchanae
Stock
York
HAnover 2-0760
at
highways
that
so
25 Broad
Bureau
that
constantly seeking Highways and Roads___
their operating mar¬ Building construction
understood
has
The
estimated
unfilled orders and that full scale
Stand¬
selling
is
pany
Packaging
26V\.
has
Admitting
It
at
common
capac¬
New
Members American Stock
are
improve
Steiner, Rouse & Co.
Members
gins.
Jones
264.77,
Specialists in
relatively
additional load
or
riers which
to
1953, with the
Averages
at
This should be especially in¬
teresting to the air-freight car¬
•
Dow
planes.
ity.
stock at 22. As
Teletype NY 1 -583
improved
stantially
was
Associate Member
transport
low cost, providing an added safe¬
stock
common
for large
power
Take-off performance can be sub¬
Packaging
Corporation
of
source
commercial
At that
Partner, Coburn & Middlebrook,
Inc., New York City. (P. 2)
the
of
Averages were selling at groundwork for the future growth
267.12,1 wrote an article on Stand- o£ th<; company.
Tests have been
completed indicating the efficacy
ard Packaging
of adding jet turbines as a supple¬
recommend¬
<$>
,
cently been completed which will
increase
Engineering
,
re¬
trial
Western Natural Gas
BArclay 7-5660
Exchange
which time the Dow-Jones Indus-
Stromberg-Carlson
American
Piasecki
550 to 600
Under date
Republic Natural Gas
120
A
Corp.
Puget Sound Power & Light
Established
&
the
has. met
Members, New York Stock Exchange
New York State Electric & Gas
Polaroid
of
Yield to maturity 2.60
company
1946.
In¬
anjJ should attract the attention of corporated in Delaware Aug. 15,
a growing number of those seek1925, as a consolidation of three
Engineering Corporation in£ participation in this most dy- predecessor
companies, it found
offers comparable opportunity for
asPec*
*he whole power itself in difficulties during the
appreciation over the near and lield*
early thirties and emerged from
intermediate term.
As far as I
The stock is presently traded at
bankruptcy in 1933, heavily in¬
know this
is the only situation about 6% on the American Stock
debted at high interest rates. Ma¬
where a person can acquire par- Exchange.
There are 530,000
chinery became obsolete and man¬
ticipation directly in the jet en- shares outstanding, of which 270,ufacturing costs rose, so that it
gine field without having his com- 000 shares are owned by Contiwas
virtually impossible to op¬
mitment
diluted
excessively by nental Motors Corporation,
erate profitably on the gross rev¬
extraneous, less promising, activi¬
Additionally, I believe that the
frfe PONNELL & CO.
Members
York
New
Stock
American
120
Stock
Exchange
Exchange
BROADWAY, NEW YORK 5
Tel.
REctor
2-7815
Pertinent
Continental
neering
American Furniture
Camp Manufacturing
Commonwealth Natural Gas
Life Insurance Co. of Va.
bines developed by the Societe'
Turbomeca of Bordes, France, un¬
der the sponsorship of the French
possess
STRADER,TAYLOR & CO., Inc.
Lynchburg, Va.
TWX LY 77
unusual
make
use
weight ratio 100%
than
is
Industries
only for
Apco Mossberg
Billings & Spencer
Boorum & Pease
Bright Star Battery
Chicago Dock & Canal
designed not
in aircraft by trans¬
use
through conven¬
reaction, but also for
use in both
stationary and mobile
applications as
auxiliary power
for turrets and guns or
prime mo¬
tive
power
for
rotary
drilling
equipment, air conditioning units,
etc.,
by transmission of power
through a shaft.
The
Previews Inc.
Roch. & Pitts. Coal Com.-Pfd.
*J. B. Williams Com. Pfd. Bds.
on
are
mission of power
tional jet
American Wringer
*Letter
favor-
in piston
unusually small
are
These turbines
.
more
power
in relation to the power
generated.
INACTIVE STOCKS
Ambrook
a
obtainable
and
Request
is
company
presently engaged in two major activities, research and development on both
civilian and military
projects, and
the manufacture of the
company's
"R-975" 9 cylinder radial
engine
military helicopters. This en¬
gine was developed from the basic
for
OBSOLETE SECURITIES
engine
DEPARTMENT
power
Try this department when
fail
to
where.
find
Our
market
a
you
else¬
slogan: A bid for
anything of slightest value.
that
the
motive
during World
War II.
The company at the prestime
manufactures
replaceparts which are sold to the
Ordinance
Department
and
the
ment
countries
of
the
North
Atlantic
Treaty Organization for the main-
George A. Rogers & Co., Inc.
Our 26th
120
Broadway, N. Y.
5
Year
W0rth-4-6930
tenance
of
the
tanks
which
are
kept available for emergency
use.
The
used
per Shr.
R-975
engine
is
currently
in Piasecki and Kaman heliThe company is the sole
copters.
21/2
0.39
affairs
268,993
0.51
1951
of
6,083,200
122,566
—
3,390,232
68,454
0.13
4
million
the
Telephone
WHitehall
''Nine
months
tFiscal
n.a.
changed
World
thirties
This
net
31.
state
of
income
M.
with
as
we
encing,
it
Manager
Middlebrook, Inc.,
N. Y.
1949, Mr.
acquired the
interest
set
of
ernization.
Company
During this four
1949-1952,
stock
little under
present
an
down.
Such
back
vehicle
is
interest
stock
the
450,000.
North
and
Ce
,
.
,
for new highways, thruturnpikes, new schools,
electrification programs and other
Public works, and a further pofecial demand if the St. Lawrence
Waterway project is finally
approved.
In view of the
neglect
of highrehabilitation during the past
20 years, together with the
sharp
gain in population and the in-
way
creased numbers of cars and
trucks, hardly 50% of the necessary
New York 6, N. Y.
WHitehall
3-0066
of
a
the
on
Investment Opportunities
in Japan
capital
Call
for
funds
at
our
on
Debt
substantially
publications
Japanese securities
YAMAICHI
was
lower
SECURITIES CO., LTD.
rates, and working capital
from $1,750,000 to $3,At the close of 1952, cash
securities
or
write
plowed
were
$3,764,000,
or
current
Established
seven
Home
alone
times
the $512,000 reported at the end of
1946.
Office
Brokers
111
Tokyo
1897
—
Branches
48
Investment
&
Bankets
Broadway,N.Y.6 COrtlandt7-5680
sub¬
stantial demand for cement, which
will continue for a
long time to
,
shares
government
totalled
Herbert E. Greene
seems
a
just
share
increased
ment Co.
be
per
into the business.
refunded
a
capital
$6,0000,000,
$20
310,000
preciation
headed
to
Broadway
Telephone
for
expended
was
for
Laminates, Inc.
S. D. FULLER & CO.
39
all of the earnings and excess de¬
production, al¬
ready
mere
present
During this period no dividends
paid on the capital stock, as
trend
the
the
on
year
were
of industrial
American
Lunn
stock.
is apt to coun¬
the
Underwriters
it
$3,750,000
over
share
per
approximately
a
industry which
ter
com¬
uncertainty property additions. This amount
currently experi- plus the $2,200,000 expended dur¬
well to hitch your ing 1946, 1947 and 1948 amounts to
is
rity of
in
rebuild
new
sportscar, "Corvette"
are
company en¬
gaged
the
to
about
"Fiberglas"
Chevrolet's
a
period,
or
$12
capital
wagon to a secu
body;,for
In
In times of financial
such
Manufacturer of the
comprehensive program of
expansion, rehabilitation and mod¬
New York,
North American Cement
LUNN LAMINATES, INC.
from 1946 to
years
Andreas
and
pany
Resident
Coburn &
II.
tripled.
controlling
HERBERT E. GREENE
conclusion
inclusive, sales doubled, and
Albert
available.
at the
War
In the seven
1952
ending July 31.
ending October
years
Not
a.
3-2840
dollars
middle
forties.
Gordon Graves & Co.
30 Broad Street, New York 4
0.23
1950
to
in
early
$208,021
n.
•
come'
for the majority of all the ways>
provided
medium tanks built
ent
Earns.
and
$9,261,589
tl952__L
particularly
in long range
that these jet motors have
engines
*1953
of
sustained
Net
characteristics
guided missiles, as well as in util¬
ity aircraft, helicopters, target and
training planes, and many com¬
mercial applications. It is claimed
able
Net
Sales
them
adaptable for
to
*
enues
Statistics
Net
Engi¬
for the production of the gas tur¬
which
I
&
Air Ministry. These turbines
range
from 200 to 1700 horsepower and
Dan River Mills
LD 39
Aviation
through its parent, Con¬
Motors, has a sub-license
tinental
Bassett Furniture Industries
★
&
ties.
Trading Interest In
—
stock of Continental Avi-
common
ation
work needed in catching
up
This year the plant in
Security,
Maryland had increased its
city by
rels,
will
the
an
and
be
capa¬
additional 300,000 bar¬
another 300,000 barrels
added
Howe
later
Cave
New Yofk.
this
plant
in
year
at
central
Over-the-Counter
Quotation Services
for 40 Years
•
Thus at the year end the com¬
bined annual capacity of the three
plants, Catskill, Howe Caves and
Security will be 5,100,000 barrels,
about
17
barrels
share
per
of
National Quotation Bureau
Incorporated
stock.
Established 1913
The company
in
the
summer
was
of
recapitalized
1952
Continued
and
divi-
46 Front Street
CHICAGO
on
page
35
New York4,N.Y.
SAN
FRANCISCO
Volume 178
Number 5262
The Commercial and Financial Chronicle
...
\
Articles and News
Unnecessary Controls
The Coming Advance
—Edmund
By HON. GEORGE M. HUMPHREY*
W.
llCHTtnSTEIf!
"
1
page
in Common Stocks
AND COMPANY
1
Tabell
Cover
'
What Are They
Secretary of the Treasury
—Herbert
Speaking at the New York Clearing House Centennial Dinner,
Secy. Humphrey asserts nation is now freer from Washington
Business
interference than it has been in
U.
avoid inflation without
ment
spending, but
many
Holds
years.
Points
recession.
a
we
reduced govern- *
to
Bratter
Free
;
Cover
From
Unnecessary Control's
Humphrey
George M.
S. and
The
Doing to Our Money in Washington?
M.
Now
—Hon.
can
Outlook for Business—Sumner H.
New
4
Mild Recession!—Douglas H. Bellemore—
a
Tax and
Aircraft Profit Altitudes—Ira U.
This
dinner
tonight
best interests of all
marking
the
100th
Anniversary of
the
founding of the New York Clear¬
ing House is really
free
its
at
It
to
establish
New
the
Clearing
took
cour¬
In
ing House
today
25
this
to
prac¬
one
the
prin¬
need
tice
ciples
founded the
need the
age to
even
try
Clearing House.
Market
The
have
we
founding
as
a
method
business and money
our
am
sure,
forward to more
things than we have
banking
factor
known.
the
of
Commonwealth
on
E. Wormser..
12
Exchanges—Martin J. Keena
Keta Oil & Gas
13
Mortgage Problems—Frederick W# Jackson
Overseas Investment
14
in
Three States Natural
1®
Gas
16
Underdeveloped Countries
North American
.17
Trends—Roger W. Babson
between
institutions
in
Traders
the
Royalties
20
Two
good example of what free lead¬
230
States,
Members New York Stock
"Chronicle," devoted to the^
of the National Security \
Sun Valley, Idaho,
includes \
Association
at
JOHN F. REILLY,
Unlisted
Financing—Sidney M. Ruffin..
because
of
the
America and
so
influence
the
the
on
market
money
country.
exerts
volve
in
men
room
that
leaders in this money cen¬
nation you would do
as
of
ter
well
☆
6
15 Broad
7
Telephone
Teletype
8
DIgby 4-1400
NY 1-3370
—H. L. Hoffman
9
Sources of America's Strength—Dr. Harry L. Dillin......
10
Bates
Paying Premium for Mythical Liquidity—Harold J. King. 11
Which Investment Fund to Buy?—Homer Fahrner
13
you
panic
have
ago
betterment
of
paid
a
to
in
everyone
personal
or
the
and
crash
are
friends,
achievements I congratulate
100th birthday. Yours
fine heritage.
is
a
York
is
of
I
have
mentioned
leadership today.
talk
for
it
need
leader¬
value to the Treasury in supply¬
which
ing valued information and
coun¬
ence
the huge volume of
been
its operations as our fiscal agent.
the
The fact is that the financial
in
I
why
think
we
that
is
freer
a
of
nation
interfer¬
Washington than it has
years.
Soon after
many
fice
ficers
of
your
Washington get
New
York
a
of¬
Government
in
great deal from
City, which is in the
new
Administration
the
address
by
Secy.
Humphrey
at
100th Anniversary Dinner of the New
York
York
Clearing
House
Association,
took
of¬
in January,
almost all re¬
maining controls were lifted. They
were
that
lifted
the
on
ity,
could
to
the
calculated risk
American
its leaders, .if
*An
economy and
given the opportun¬
operate
There
excesses.
City, Oct. 5, 1953.
22
See
It
Business
Canadian
without
has
going
been
48
Securities
Coming Events
on
10
in Investment Field
Recommendations
Einzig—"New Financial Facilities in
PREFERRED STOCKS
New York
London"
Mutual
•
&
•
Chicago
•
Nashville
•
TELETYPE N. Y. 1-5
Glens Falls
•
Schenectady
•
Worcester
Teletype
40
NY
Exchange PI., N. Y. 3
1-1825
&
NY
1-1826
40
10
Funds
16
News About Banks and Bankers
Notes
47
—
Observations—A. Wilfred May...
Our Reporter's Report
5
46
Our Reporter on Governments
18
Prospective Security Offerings
44
Public Utility Securities
22
Railroad Securities
29
Securities
Salesman's
The Market
The
.
.
.
and
Capitol Records, Inc.
Commonwealth Oil Co.
Empire State Oil
38
Corner
Securities Now in Registration
42
You—By Wallace Streete
8
Security I Like Best
2
The State of Trade and Industry
Johnston Oil & Gas Co.
4
Washington and You
48
—
Keta Gas & Oil
When Distributed
*See article "U. S. and Canadian Outlook in '54" on page 4.
Drapers' Gardens, London,
land, c/o Edwards & Smith.
1
COMMERCIAL and
COMPANY, Publishers
Place, New York 7, N. Y.
WILLIAM DANA SEIBERT, President
1953
Every Thursday (general news and ad¬
issue) and every Monday (com¬
plete statistical issue —t market quotation
records, corporation news, bank clearings,
vertising
state
and
city news,
Offices:
Chicago 3,
111.
135
etc.).
South
Sterling Oil of
Oklahoma, Inc.
as
second-class matter
Febru¬
at the post office at New
York, N. Y„ under the Act of March 8,1879.
ary
25,
1942,
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$51.00 per
year.
Other Countries, $55.00 per year.
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St.,
(Telephone STate 2-0613);
and
Quotation
$33.00 per year.
Note—On
rate
Record
—
Monthly,
(Foreign postage extra.)
account
of
the fluctuations In
of
exchange, remittances for for¬
eign subscriptions and advertisements must
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funds.
WM V. FRANKEL & CO.
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39
%
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the
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Thursday, October 8,
C.,
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Reentered
B. DANA
E.
Copyright 1953 by William B. Dana
CHRONICLE
Reg. U. S. Patent Office
WILLIAM
Other
l
MACKIE, Inc.
HA 2-0270
39
ST., NEW YORK 4, N. Y.
Boston
Manchester, N. H.
19
News—Carlisle Bargeron
Indications of Current Business Activity
Stock Exchange
TELEPHONE HAnover 2-4300
•
8
From Washington Ahead of the
38
Spencer Trask & Co.
Albany
Singer, Bean
*
REctor 2-9570 to 9576
BROAD
26
_
no
page
Cover
Stocks
Bookshelf
Dealer-Broker Investment
25 Park
25
Ultra Sonic Corp.
♦
(Editorial).—
Man's
FINANCIAL
Members
Republic Natural Gas
22
_
Regular Features
As We
Published Twice Weekly
specialized in
Johnston Oil and Gas Co.
Guaranty
National City Bank "Letter" Cites Easing of Credit by
Federal Reserve
The
have
Great American Industries
New
Continued
For many years we
avers
_._.i
Good—As Far As It Goes! (Boxed)
NSTA
today
much
from
of that
do.
can
nation
is
about
what
and
more
I should like to
minute
a
leadership
The
as
the
need
we
in
inestimable
well
"Survey"
18
20
Foreign Aid Hindering Convertibility,
Bank and Insurance
The Need for Leadership Today
of
many
either
S.
Trust
many
ship which brought the Clearing
House
into
being one hundred
this years ago. I have also mentioned
in the great New York
U.
John P.
say
of
the
The Federal Reserve Bank
New
as
1857
that I think
Here in New York
business
sel
in
hundred
off
great nation.
in
of
Industry Has Returned to "Normalcy,"
Stevens, Jr., and Andrew J. Sokel.
Your daily
$$,800,000,000.
average
Empire State Oil
Textile
you on your
v
ership and enterprise of
banks.
figures
of
Mfg. Co.
Commonwealth Oil
1929. For this growth and for your
think of your future
plans to recall how well the lead¬
my
keeping
Street, New York 5
Electronics Industry—Billion Dollar Infant
in¬
the
as
years
operations
your
You have survived and grown un¬
der some serious strains, like the
this
tonight have a position of
leadership and with it great re¬
sponsibility.
That is why I am
impelled tonight to suggest to you
the
clearings
life of
economic
You
clearing houses in the United
and
Manager
Trading Dept.
Clearing
your
the trillions of dollars.
of
powerful
a
Today
economy.
Exchange
☆
following articles:*
—W. T. Nightingale
develop¬
ership
today's
Convention
House is the largest of more than
heart
.»
BURNHAM AND COMPANY
Why Sales Are Lost—Frank M. Cryan
vital
a
Section
in
Rocky Mountain Area's Natural Gas Reserves
individual
the
of
Current Trends in School
banking
was
speeding
TWO
Annual
recent
Clearing
handling"
Articles
More
essen¬
The founding of the New York
Clearing House is an especially
do. It is symbolic today
New York
is still the
Oil
11
...
Social Security—E. H. O'Connor
SECTION
ment of all lines of the American
can
Specialize in:
10
was
progressive
more
of
transactions
we can go
of
development of
healthy economic life.
a
The
the part of the
Money
—Sir Benegal Rama Rau.
the
House
ago.
on
Mortgage
was
people have confidence is
If
better
ever
of
tial to
years
leaders of
founded the popu¬
Association, I
things in America
today than we did a
leadership
and
We
Home
Our Economic Dilemma—And Its Politics—Paul E. Anderson._
find them today This is so be¬
cause
a
sound money in which
cour¬
We
of
Listing of Securities
Private
we
new
more
world,
Humphrey
leadership and the
hundred
that
George
the
who
men
The
key factors which
helped the nation develop in its
agriculture, commerce and trans¬
portation to the high levels where
which
motivated
and
newspapers
was
million.
we
'
8
only 800,people, and that of the.nation
000
America
WALL STREET, NEW YORK
9
Shortage
The Threat of Hodgepodge Trade Pacts—Felix
Solution
the
lation of New York
and character.
can!
Telephone: WHitehall 4-6551
Process, Prospects and Policy
(Second of two articles)—Walter W. Heller.
Too Much
in
thinking of the leadership that I
mjentioned, that when this Clear¬
foresight
we
are
magazines in recent days. It only
seems
significant to me, when
York
House in 1853.
age,
for
detail
took
leadership
Need
all more familiar than I
and which has been described in
you
7
Federal Taxes:
the history of the New
Clearing House, with which
York
Cobleigh
—Ben H. Hazen___
„
reciting
my
tonight
enter¬
prise
best.
anniversary
an
the people of
point in
no
But
Obsolete Securities Dept.
99
C. Andreae
—H.
No
the nation.
There is
cash again.
The Market and Dow-Jones Industrial Forecasts
Praises work of New York bankers.
enterprise.
6
General Impediments to Private Foreign Investment
—Sir Jeremy Raisman—
competitive enterprise to function and remain both free and
It
6
Pillars of Sound Money—W. Randolph
Burgess
permitting a 10% reduction in individual income tax, I
but reveals 52% corporate tax will continue
beyond present
expiration date. Holds bankers have responsibility of aiding ;
ALL THE KING'S MEN
Couldn't change obsoletes into
5
Slichter___
Reiterates Administration is committed to ending Excess Profits
of
3
Canadian Outlook in '$4—J. Douglas Gibson
Expect Only
heavy defense outlays must continue.
says
3
INDEX
Business Now Free
From
(1323)
Direct
Teletype NY 1-2390
Wire
to
PLEDGER & COMPANY
LOS ANGELES
1N&,
4
The Commercial and Financial Chronicle...
(1324)
Thursday, October 8, 1953
tivity is quite likely in 1954 on
U. S. and Canadian Outlook in '54
of the business outlook, Canadian
review
S., the former's
economist
lation and in
is
resources
a
sufficient
of
same
be
should
1954
good
pretty
a
of three years, our economy
space
from
times
the
quite
never
are
course,
Conditions,
to me now.
It is not a even produce some surpluses, we
forecast, for much could happen cannot fail to be impressed with
to upset its basis in the interna- its productive powers.
It is true
tional sphere and elsewhere, and that this is partly good fortune,
my evaluation of present tenden- for we have been trading on facies may be faulty. None of us, in- vorable terms with the rest of the
eluding economists, can foretell world and nature has been bountiappear
the future and the best
is
examine
to
the
we can
of
facts
do
ful
But
our
it
in
particularly
reflects
also
Prairies,
the
the influence
position and assess the
tendencies as they appear to be
of sustained high capital expenditures, good and improved organi-
developing,
experience
zation, and effective work,
present
and drawing on our
and
understanding
make the best judgment we can.
When
this year,
it
the
to
come
we
we
the Canadian record.
that
with
the
nomic
affairs.
in
It
our
eco-
is
likely to be
of record national income
year
and
say
has passed and since
momentum in
a
can
of assur-"
three-quarters
nearly
year
there is
One
degree
some
since
ance
a
of
shall probably find
have been the best year in
to
of
end
production both in dollar and
real
physical terms. Mr. Abbudget forecast of a gross
national
product of $24 billion
bott's
looks pretty solid and might
now
be
slightly
exceeded.
The
^
_
A.
,
Questions About the Outlook
as we approach the end of
the ye?r' a !?umber of questions
are being raised about the outl°?k. Businessmen have been indined to be a bit skeptical about
^be state of prosperity in the postwar Period, perhaps because so
marW stm have vivid recollections
of the depression. To date this
skepticism has not been well
founded though it may have stood
us in g°od stead in checking excesses and preventing the adoption °f "new era" thinking. The
90rt of questions that are arising
now are:
total
period
one
good
of
another, and social and
political influences today appear
to make for a more inflationary
downturn in
likely to be tbe United States? Is a significant
people in 1953 are
moderately higher than
and
with
has
the
1952.
should
quite
income
®ask
high
a
good
year
££
rrom
of
hogs
have
particularly
thus far
has
automobiles, for-the
and
come
to
77"
♦An
Annual
of
large
very
reflect
..
address
Meeting
for
national
of
economic climate. The more ques¬
tioning attitude of the business
community is also in contrast to
the "new era" approach of the
'twenties.
But, though there are
differences, there are similarities
There is
well.
as
the
on
and
concentration
a
production of capital goods
durable goods and
consumer
the market for
this
of
some
pro¬
duction has been supported by an
volume
of credit.
Credit to support the demand for
increasing
housing and house¬
appliances
has
increased
automobiles,
hold
quite
rapidly
has
the
in
been
of
opment
past year.
downturn in
a
and the devel¬
U. S. farm income
And
surplus.
grain
a
When
„
by
of
Mr.
Gibson
lems
in
of
economic
world
in
prob-
which
we
what
discuss
I
be
Edmonton,
Alt*.,
begin
to
comments
some
to
do
these
of
1954, there is the possi¬
bility of a decline in the demand
and
production of durable con¬
There are some in¬
already in cut¬
goods.
of
is
by making
about
the
U.
S.
picture which is perhaps the most
•
,
.
,.
,
in
backs
there
is
good
for
deal
evidence
of
dur¬
consumer
filled in the United
States, and the further expansion
their
in
pended
sales
ac-
volume
of
has de¬
year
a rising
credit. •" It
consumer
of the
rise
outstanding
cline in
that
observed
tye
credit
this
increasingly .on
cessation
decline in U. S. business
benefits, it
a
weeks.
i
in
a
even
consumer
implies
de¬
a
sales unless those people
as
workers returned to school.
young
AugUSt.
-
credit
also
Industrial
a
but
by
;
&
Co.
of Canada
STREET, TORONTO, CANADA
the
the
of
fourth
though
pected
,1952.
Department
expects
rate
a
of
to be
as
in
expenditures
\ quarter of this
1953
Com¬
slight decline
these
a
even
The nation's
result of decreased steel and auto output.
at 234% of the 1935-39 average, the
This
two points lower than
was
whole
in
year,
is
ex¬
higher than in
There has been
Continued
a
on
huge
4
September,
index figure and compared with 228% in
when many industries were still affected by
1952,
September,
strike-caused
steel shortages.
Consumers, it is reported, slowed
instalment buying of auto¬
mobiles, household appliances and other goods
$204,000,000
only
increase
smallest
amounted
credit
five
in
to
rise
of
instalment
in auto
gain
The
months.
$159,000,000, the narrowest in
instalment debt of all types
12-month
in August adding
their debt on purchases of this kind, the
to
year.
a
^
$4,300,000,000.
steel stockpiles to
Detroit automakers' determination to hold
deliveries,
manageable levels has brought a slump in auto steel
.
Automotive
inventories
this week.
high
as
run
as
90 working days for
low as 30 days for Big Three producers still maintain¬
some,, as
There has been a rush to cancel October, Novem¬
ing hot output.
and even December orders as steel inventories
ber,
>But
totaled $21,000,000,000 on Aug. 31—a
declares this
'
trade weekly.
Seasonal auto
cutbacks and the General Motors
transmission
considerable, loosen¬
plant fire came almost simultaneously with a
ing of steel supply.
reared up,
•
Operating for many months on a hand-to-
inventory basis, some automakers found steel stocks sud¬
mouth
While production was reduced, steel sup¬
denly spiralling upward.
ply grew in vitality. Duplicate orders, issued as insurance against
shortage, stood out like sore thumbs, this trade authority reports.
'
maintaining high production, Big Three automakers are >
Still
not
afflicted with topheavy inventories.
so
Consolation to the steel
industry is that the largest producers have reduced shipments the
For the others
least.
some
sured late this year, or
semblance of buying order seems as¬
early next
off, notes this trade journal.
'fhe
scrap
bottom of a
as
the correction period tapers
-
iron and steel market seemed to have touched the
long downward trail. Significant was the. fact that this
"The Iron Age" steel
scrap
composite dropped only 17c to
Although this is the 10th successive week of decline, tap¬
$31.33.
ering off of the current dip
showed
up
*"
/
•
glint of hope in-the
a
.
■
Competition from steel-glutted Europe is nicking American
on
the East Coast.
carbon
Europeans
proving their need
are
by underselling American steel plants
on
rods, nails, barbed wire, and even on seamless tubing.-
s
Meanwhile, specters of more substantial competition for the
<
plant and equipment in 1954.
S.
'
Federal Reserve Board estimated.
probably
decline in business outlays on
U.
the correspond¬
during
slightly
off
fell
production
mines and factories operated
the August
J
The proportion of
ing periods in 1950 and 1951.
chiefly as
/
•
jobholders in
industrial activity is
noted.
department
reaction,
a
/
Members: The Toronto Stock
Exchange
and The Investment Dealers' Association
a
There is also the possibility
(3)
merce
BAY
by
overbuying.
result, of
'•
r
.
weekly, it added, "equalled or exceeded" that for
consumer
influenced
restrictions
the
The
330
of
new
available
Ross, Knowles
wave
doubt
no
:
in factory jobs who worked more than 40 hours
earners
wage
the
maintained,"
"being
steelmakers
partly
Monthly Bulletin "The State of Business"
now
It should
numbers.
followed
was
V-1
-
There is "evidence" that the pace of
level.
for dollars and markets
of
is
buying
first
:
62,300,000, slightly above the year-earlier
September numbered
durables since Korea and that the
investments
■
;
Despite the decline from the preceding month,
market.
If you are, our
long experience with Canadian
might be of timely assistance
to you. You will
find, also, that the services
of our Research Department can be of real
help. Why not write us to-day? There is no
obligation.
•
greater
ond
Unemployment was esti¬
"practically unchanged" from the post-World War II Tow set in
in consider¬
the market
also be noted that this is the sec¬
CANADIAN SECURITIES?
Our
enter
ably
.
the United States Department of Commerce at 1,246,000,
mated by
week
to
Holding:
September
Employment decreased by mqre than 1,000,000 in
who have cash in the bank decide
Are You
pointed out, were more numerous than
was
This trend has been prevalent for the past several
ago.
year
farm
unemployment
equipment factories among others. New claims for
insurance
that
employment front, reports the current week note
On the
layoffs occurred in coal mining, textile plants, appliances and
well
should
view,
durables have been
consumer
pretty
near-term prospects. In
.some
and
industries
certain
a
linP0rtant question mark in-OUT
my
from the
virtually unchanged
was
this
ables, including automobiles, have
increased significantly. -After all,
to accumulated backlogs of demand
questions
week
able 1952 level.
United
the
in
downturn
some
States in
necessarily indica-
propose
some
of last
preceding week and continued to run slightly above the compar¬
more
why there might
reasons
pessimistic cast of mind,
a
briefly and
the
>
healthy sign of
a
the
of
the
in
tive of
Cham-
September 16, 1953.
is
are
live and is not
the Canadian
Commerce,
are
production in the period ended
of total industrial
The trend
Wednesday
on
"The Iron Age," national metalworking weekly, states
down to the
Getting
a
S.
that inventories of
we
at
questions
(2)
specific
been
Downturn
Some
in U.
sumer
they
awareness
that in the short
.
other
for
Reasons
has
there
recently
more
dications
an.
program
and
comPetition
V
another
is
boom
mech¬
anisms, particularly in the sphere
of fiscal and monetary policy, de¬
signed in part to - influence the
that
fur-
a
increase -'in
investment.
capital
ber
output,
significant
already
credit-supported
a
development
frequently discussed and the fact
been
increase
other countries?
These
in
hoqsing, household appliances, and
ther
of
market
striking difference, as is also the
Are inventories beexcessive?
Is industry
to continue with such big
investment expenditures?
How
^bout 9ur overseas export mar-
level
notable for its high production of
defense
lack
stock
impending?
?°ming
be
For the farmer,
production
affected
a
social security programs.
of
The
favor¬
a
is the develop¬
so
bect? Is the public oversold on rash of commercial building in¬
automobiles?
Are surpluses of cluding a
crop of new skyscrapers.
?on?e raw materials and foodstuffs
though lower prices for cattle and
lower
ment
and
from
Canadians
been
able factor,
decline <?f defense outlays in pros-
somewhat, above
it
distribution of income is
concessions
some
in
example, from an economic
of view the much wider
1952,
a
comparatively stable cost of living, the average real income of
reached
For
point
in
the Federal tax collector and with
individual
be
Failures
Business
earlier booms.
There
there
WiU
personal incomes of the Canadian
Industry
to
in Canada but probably not has been able to take in its stride
as good as this year which proma large defense program, to go
ises to be the most prosperous in ahead with a capital development
background than that which ex¬
our
history.
This is merely an program even bigger than that in isted prior to war and, of course,
opinion based on tendencies in the progress before Korea, to provide prior to the depression. There are
business picture in this country for a
higher standard of livng, other differences between current
and in the United States as they and
to overcome shortages and U. S. conditions and the peaks of
year
Index
Auto Production
and
examine
to
reason
the picture with care.
Index
Commodity Price
Food Price
"tired boom"
though it is still quite lively. In
itself, this is not any conclusive
reason
why the boom should be
approaching its end though it is
a
Retail Trade
State of Trade
U. S. economic history.
It has been called the
and lists unsettled
Electric Output
Carioadings
in modern
closely linked to
rapid rate of growth in popu¬
stronger sustaining factor.
more
Steel Production
The
This has been the longest
period of sustained high activity
Holds though Canada's situation is
that of U.
e
(1)
questions which affect the business future. Gives reasons for
some downturn in U. S. business, and lists
some. sustaining
factors.
that there is no
the international
follows:
as
Supervisor, Economics Department,
The Bank of Nova Scotia, Toronto, Ont.
In his
assumption
political situation. My reasons are
By J. DOUGLAS GIBSON*
links Canadian situation with that of U. S.,
the
radical change in
ex-
page
23
steel
industry converged from another two directions.
wagon
known
fact
of
rising
competition
official
policies of selective freight absorption.
to
In
band¬
a
movement the bulk of the steel industry made the already
"The
Iron
Age"
indicated
price
by
announcing
sales
On another front, reports
cutting
on
stainless
steels,
paring of pig iron prices.
Automotive output will
slow down to permit
decline this week
as more car
makers
their dealers to work off heavy stocks prior
to introduction of 1954 models.
Even. Ford
division, which has ignored the slower industry
Continued
on
page
33
Volume 178
Number 5262... The Commercial and Financial Chronicle
*
"
'
no
By SUMNER H. SLICHTER*
sustained
sumer
Professor
Slichter states
his
as
principal points:
(1) both
Housing construction will be kept
high (even if slightly below the
checking drop in production and employment; (2) that de¬
crease in production is not
likely to be large; (3) that despite
this, business and government should prepare for it; and
(4)
the steps that should be taken are:
(a) encourage more spend¬
ing both for consumption and capital purposes; (b) increase
You and Your Adviser
of
the
most
for advice and guidance assuredly remains
go
nettlesome
problems
one
plaguing the non-professional
investor, undermining his emotional
even
than his financial
more
security.
corporate
Typifying the predicament in which the
lay capitalist finds himself, is a letter just
to hand from
come
"... I
a
penses.
architect, employed at a
reasonably high rate by the government. My
education
its salt.
The
be desired.
name
is
on
months
—,i
mailing list
every
country, and as a result, 1
get-rich-quick material.
I
.
Wilfred
drop
service
myself who
recommend for a person
you
such
reply
would
be
you
in advance
two-fold, within
the
check
cline
for
nurse-girling
whatever
between
and
knowledge
is
general
escapism.
comprehensible
The
should
(1) affirmative constructive principles
be
on
psychological illusions of the market place,
He
...
learn much of
can
debunking, through
and where
the
to
feasible, attending
good
a
sequent
following
process.
While only
its
of
the subject.
course on
devotion of part of his capital to
over,
the
as
operations,
will
at
prepare
a con¬
ment
a
contraction
the
investing
in
one
thousand
a
instrument
"by
ear,"
the
layman
idends, and the most effective step
that
that
enough to avoid major trouble.
aovernmont
government
expenses
P
more
important to
our
f,i,„
.on
t.
take
can
is
son
Son
to
not
up,
that he
or
the possession of his broker
of
a
proper
decisions
must
confine
values in lieu of
whole.
his
trying to
He must preserve
manage
Whoever is making the investment
attitude
guess
to
the
the behavior of the market-as-a-
respective issues.
By testing his broker
uncertainty
viser
himself
from
refrain
from
of
tific lines.
addition
to
the
which
the
prevents
ad¬
new
his
One of my
to
act
professional
along non-speculative
and
cannot resist the
the
of
'
pestering
their
for
counsel
capital
gains
saw
over-activity in trying to "beat the market," too often force him to
the Hobson's Choice
action
else
or
The
of
either
appeasing the client with
losing him.
all
too
unwise
not
forced
J You-cannot avoid
.
have' himself
and
your
stocks
a
good adviser.
wilt behave
if
is
business
Paul Kempton Opens
;
Ariz.
Everett J.
PASADENA, Calif. — Paul O
engaging in a-securities Kempton is engaging in a securifrom
—
offices
at
1133
G
Avenue.
ties
business
from
offices
at
North Euclid Avenue.
15
.
•
it
LI
J
A-
*
tunc rturnbiad Upens
(Special to
The Financial
SEATTLE,
blad
has
offices
~
Hmaat
Forty-sixth Avenue, N. E„ to
gage in a securities business.
•
i
.
~
6857
en-
BERKELEY
M
^
Calif —Claude
^
^
all.
over
at
°l
a
about
For the calendar year
1954 the cash receipts of the Fed¬
eral Government will be about $2
$3 billion below receipts
present fiscal
unless
there
are
sending;
government
dar
show
cash
a
* r mo^
sustain
year.
further
in
the calen-
contrast to
the
'm
of 1953-54, will
deficit
The
Hence,
cuts
of
deficit
business.
Any
business will tend
$2
billion
will help
drop
in
to increase
reasons.
rise
a
in
inventories
< at
occur;
In
the
second
on page
Federal Income Taxes
Priced to Yield
(When
,
Authority
2V2% Bonds
Due,October 1, 1975
In
.;
2.45%
Issued)
$250,000
the
New Jersey Highway Authority
State Guaranteed 3 °/o Bonds (Callable)
Due
*
place,
January 1,- 1974
Priced to Yield
2.60%
made
high level of spending
possible a more rapid
in indebtedness than ' is
.
corporate
indebtedness
■
t
,.
.
,
....
..
T
'
A'!].
"
;'t
.was
*
'
,
j
January 1,11985
Price
a
103%
v
RAND
&
CO.
ONE WALL STREET, NEW YORK 5, N.
WHitchall 4-3432
Oct. 2, 1953.
;►
Jersey Turnpike Authority
Due
lhe
^Agents, Buffalo, N.
September j, 1961 -"
3^4% Bonds (Callable)
; same J
A
Authority of Georgia
4oj0 Revenue.Bonds.
$250,000
New
,
' also below the
5
:
Priced to Yield 2.90%
idential; building in July- were
above a year ago, these awards
ust
;; $200,000
Due
by
The high
rate of borrowing has continued
during the present year. In the
thirdr place,:- investmentr in
^ new
housing shows signs of dropping.
Although contract awards for resi
...
;
,
State School Building
during May, June, July, and Aug- ]
m a
present
State Guaranteed
'
<rfflces
Continued
$100,000
;
recent
.
securities business.
cuts
OFFER:
part of the recent
.
2519 Cedar Street to engage
tax
at
year
is estimated
year
New York State Thru way
R
X "
Lmdquist Opens Office
v
cbxonklk)
Wash.-Eric
opened
several
Exempt from all
AND
assert 'that
dunng the second quarter were;
well, below? last year, and the 1
number of(dwelling units started
,
r
I
OWN
$18.6 billion, or 11.7%.
In Securities Business
DOUGLAS
are
first place,
and
you
behave yourself!
Jones
do
WE
likely to be sustained much longer.
In the year ending Dec/ 31, 1952,
-non-corporate1 indebtedness in¬
creased by $14.9 billion, or 12.4%,
He will be¬
themselves,
Interest
indications
has been well-
a drop in produc¬
employment? »•'. -
and
growth
all responsibility!
* Give your adviser a chance to be
why
has
by the customer
into behavior contradicting his better judgment.
•••:
economy
the
often
scheduled
of the year,
seasonal decline in inventories did
•
broker likewise is
present fiscal
$8 billion.
government
civilian
seasonally adjusted annual rate of
$8.8 billion. During July'there was
no further increase, but the usual
other
or
the
high rate of output has been made
possible by a rise in inventories.
The second quarter of the' year
sneak."
Clients
the
There
the
scien¬
the side
on
of
preventing
tion
friends who recognizes the need of employ¬
temptation of doing a little gambling
the
* in immediate prospect
indicating that the
is operating at capacity.
balanced,
A most glaring example of ruinous inter¬
efforts
the
whole
none at all), recent large
contract awards for residen—
business and government will soon
be confronted with the problem
client
investment counsellor to handle his portfolio, nevertheless
an
.
in
But
that
frequently exists with the investment counsel, in the ob¬
struction
"on
choice.
behavior
acting properly.
ference
ing
surrounding his
behaving properly, it is equally important that the
in
force,
2%
economy
In view of the several
of
area
around
labor
other adviser with these and similar
or
corporate income tax
April 1 will not affect revenues
■
in
taxes
nH
the
in
been
Wall Street's Trouble Is the Investor
logic and realistic principles, the layman will minimize the
on
rea-
drop
excise
,„ni
there
but
He must diversify:—between fixed interest securities and
equities,
and in turn between the
the
1
year,
has been no significant
during the fourth quarter are, as
Although any drop in business
change in the index of industrial I have pointed out, only about 5%
that may develop is quite likely
production since February, both below the third quarter,
the wholesale and retail price levThe period begirihing about next
els have remained
virtually un- January is much more uncertain, ,would be f°olhardy for business
changed, and unemployment has but even after the first
seeking of individual
long-term attitude toward the market.
a
only half of the fiscal
in
of
Jan.
on
tial building assure no substantial
deficit, and this in itself will help
fairly well-balanced condition, immediate drop in that field, and
to halt the decline in business.
The balance, as I shall point out planned
expenditures of business
presently, has not been perfect, concerns on plant and equipment
to recognize in
other adviser, is the maintenance
or
overall attitude.
can
Profits Tax
i
in¬
tluarter the the flscal year> and the
of
cut in
large
a
on
termination
for the
that
...
edge which he picks
the
falls into several parts.
"felk^nto s^Wal'parts "no dar year 1954, in
VTf X
No
Present fiscal year
(perhaps
The economy as a whole during
r
'uthe last few months •— u
has been in a
individual than the bits of knowl¬
the personal
in
reduction
billion to
believe
significant
weT * g°Vemment
•
as
,
But
do
i
re¬
reductions
tax
and
a^;i
II
a
during
nawL rl
effect
several
learn
can
the
1954.
larger
incomes and
their
of
the
tax
Excess
affect
of the Ko-
of
reduction
the
(about $1 billion
account
research
budget will be greater
indicated by the figures
is
come
XeVuXTnXto'lXasX X '"businessmonths. The
is likely during
the next
gets successfully to
ever
the
an-
about
present fiscal year of the
tax reductions scheduled to take
effect on Jan. 1, 1954 and April 1,
to per-
are
takes
en-
industrial plant
on
prospective
than
the
on
that
for the present fiscal year because
deficit, which was $5.3 billi°n in the year ending June 30
1953, will almost disappear during
the present fiscal year. This state-
once
fact
the Federal
cash
—
play
1954
year
one-story
the
by
outlays
industrial
of
place,
recently
modern
and
cent years and the rapid progress
of technology. Finally, the effects
revenues with the result that the
to
fourth place, the most el'fecsteps that business can take
proportion
his feet-wetting
help
particu-
suade individuals to spend
More¬
mutual fund, with
a
should
to check
intelligent choice of investment literature;
an
likely
be
Slichter
or prevent the threatencontraction
in
business.
In
tive
well
as
has
of
attributable to the end
check
ing
the other.
on
rudiments, affirmative
H.
ernment
(2) recognition of the main pitfalls manifested in the foibles
and
fiscal
larly large. In
the third place, business and
gov-
of
hand;
one
cuts
fifth
d
g
of
$2 billion
in estimated expenditures for the
de-
not
Sumner
apportioned
the
government
the
for
and equipment will be kept high
by the many investment opportu¬
nities created by the large volume
employment is rean War) and small increases in
approach
gleaning
In
year.
ex¬
™«ii
about 5% below the third
nounced
in production and
that the* maximum of self-reliance be maintained in lieu of
yearn¬
and
the
de-
busi-
the
last
of
to
the
in
ness,
"
overall
l
second
done
greatly
thaUtev^ustbe replaceTor
Expected
rate
are
not
recently-built houses ate
fourth
outlays in the fourth quarter at
the seasonally adjusted annual
a
crease
"Thanking
ing
the
is
as
faith.
Our
the
quarter and virtually the same as
in the last quarter of 1952. Up to
place, even if now> outlays on plant and equipnot very much ment
have been running ahead
will be held in confidence, in good
you
In
employment,
In
devote only limited time to stock market analysis?
can
Any such statement from
1952.
and
in
duction
never
ably never will have
therefore, any recommendation you can give
will be truly unbiased,
and, as such, worthwhile. Can you please tell me what
advisory
May
families
dwellings
pro-
checking
bombarded
am
of
do
out of congested areas, by
regional shifts in population, by
the
strong preference of many
so.
of seem to be leveling off.
problem
met, and prob¬
occasion to meet, and
a.
the
Place, the expenditures * of busiIn the first ness concerns on plant and equipplace, business and government ment, which were rising diiring
will soon be confronted with +w.thp first nino months of the
the the first nine mnn+Kc
year
brokers I've used leave much to
My
"Now you and 1 have
;
or
which
monthly rental payments, by
desire of many families
to
move
four principal points.
advisory service which is worth
in the
with
ceed
In these remarks I wish to make
been technical in
nature, B.S.
for years 1 have been looking
for
stock market
a
X
has
1932 M.I.T.
year
level) by the possibility
buying houses by monthly pay¬
ments
naval
a
am
present
of
dividends; and (c) cut taxes and government ex¬
Opposes using credit policy as major instrument
against business contraction for another
reader:
by the substantial ma¬
savings bonds in 1954
of
and by the 10% drop in the per¬
sonal income tax effective Jan. 1.
business and government will be confronted with
problem of
to
in
is
Expenditures for con¬
goods in general will be
turities
Lamont University Professor, Harvard
University
By A. WILFRED MAY
Where
business
prospect.
•
•
in
drop
severe
The New Outlook for Business
Observations.
5
(1325)
Y.
Teletype NY 1-838
20
6
The Commercial and Financial Chronicle... Thursday, October 8,
(1326)
stretch-out
tures,
Expect Only a Mild Recession!
erating
then
BELLEMORE*
By DOUGLAS H.
Economics,
Administration, Boston University
Economist, American Institute of Finance Inc.
Chairman, Department of
In his discussion of
why
reasons
we are
only
likely to have
find
Pillars oi Sound
much .talk
so
and
bear
a
Deputy to the Secretary of the Treasury
in
market
takes time to anal¬
one
Mr. Burgess, after listing
these pessimistic forecasts, he
yze
find
will
in
most
that
cases
(1)
the
The authors
great.
very
believe
statements
has passed
mention
in
that
of
10%
a
business
15%
or
to
transition from
gives
drop
profits. They do not envisage
anything like a 20% to 30% de¬
cline in business such as might
For
review
have
a
goods are continuing at alltime high levels and expenditures
for
consumer
durable
goods,
ing
1952
and
economic
down somewhat from 1950-
while
in
changes
trends
is
unemployment
able
scene,
tect
and
Expenditures for producers' dur¬
eco¬
nomic
e
not
the
broad
d
does
re-
levels,
these
Personal
peaks.
below
far
not
are
and
cor¬
lations hips
porate income are at peak levels.
and
In certain
assessing,
their
relative
spots have appeared, but the ex¬
One
of
is
the
why
reasons
ized
i
lief
ec.onom
c
fail
forecasts
is
diffi-
the
D. H. Bellemore
11 y
in as¬
sessing the human element, so
important in producing business
c u
conditions.
that
well
as
they
special¬
the
as
be¬
exceptional
are
tainly, the stock market has dis¬
any slight readjustments
from
the
degree
of
opti¬
levels.
current
in
Situation
In
measure
character
their
counted
general, the public
is optimistic
(hopeful) or pessi¬
mistic (fearful) but it is difficult
to
indicate
to
phenomena and not indicative of
business trends in general. Cer¬
frequently
so
used
and
will
last.
Finally, the question is always
as
to which comes first,
the chicken
timism
the egg?
or
pessimism
or
conditions
ness
result
of
stocks"
Does
cause
busi¬
they
are
or
business
op¬
the
other
fense
areas,
the
as
outruns
demand
in
and especially as de¬
expenditures
but
reduced.
are
a
which
prevent
can
recession
permit
a
Certainly the Republicans
they did not get elected
to engineer a recession
in spite
of attempts to balance the budget
restore
Reserve
sion
does
intend
upon
the
this
can
dilemma
be
the
Mild
Let
us
examine
taxation, the rate of govern¬
spending, the "needs" and
ment
"desires"
of
individuals, business,
and government.
What
how
they
fail
easily
facts
and
conditions
suddenness. It
is
"irrefutable"
demands
or
change—often
can
realize
to
these
with
that
seems
drastic
we
must
hale
and
hearty.
Spokesmen
agriculture have done an excep¬
tionally good job in presenting
their
woes.
They tell
us
how
sharply farm prices have fallen
since
January
1951, and
howfarm
have
costs
squeezing
the
risen,
thus
farmer's
income.
However, they do not wish to dis¬
cuss
the fact that farm prices and
farm
incomes
rose
conclude that objective conditions
than
national
and
1950
(outbreak of
are
subjective
human
interwoven
cated
into
pattern
American
emotions
the
known
compli¬
as
the
Economy.
for
much
income
faster
from
July,
of
favor
the
only
It
name.
in
Korea)
Farmers
excesses.
can
are
what
like
ness,
on
September
the
1948. Busi¬
surface
at
least, is
high levels,
still operating at very
*A
talk
American
by
Prof.
Mutual
Mass., Sept. 28,
Bellemore
before
Alliance,
Boston,
1953.
Established
true that
Members
Stock
Exchange
American
Stock
Exchange
New
Cotton
Exchange
York
Commodity
Chicago
New
Exchange,
Board
Orleans
And
of
Cotton
other
rose
1950, and stayed high in 1951,
expenditures
for
capital
goods rose, and conversely, that
their
incomes have continued to de¬
as
cline,
these
capital
expenditures
expanded its capacity to meet the
speculative world-wide demand.
H. Hentz & Co.
York
farmers' incomes
in
Inc.
Trade
Exchange
Exchanges
boom
in
a
very
does
for
The
1
p
t
a n
heart
doubled
We
told
are
the
and
expansion
is
pansion has still not kept
the
most
demand
recent
♦
NEW YORK 4, N. Y.
f-HICAGO
DETROIT
GENEVA.
PITTSBURGH
SWITZERLAND
prices
in
and,
rise,
turn,
labor
receded
as
a
business
"forced"
now
take
to
viewpoint.
In
(4)
the
cost
is
Inflation
of
living
all
imperils
these
merchant
we
wants
saving
who is
saver,
wise
inflation
abhors
and
rests
money
icy,
a
the.
debt
System,
management
and
policy
all
the
squeeze
go
excess?
in
The
products
cost-price
of
mines
much farther.
Still Operating in
a
Boom Period
Except for these weaknesses in
agriculture and in mining and the
spotty weaknesses in a few other
segments of the economy, and the
a
dis¬
of
among
com¬
What
Deficit
long-range
there
of
—its very
profit
Reduced
.
is
the
at'/
or
other
least' of
plant?
direct
It
has not
expenditures for
This
this
of
,
the
of
ple.
its
justment
serious
equipment
Continued
on
-i
page
'
■
-
24
distributing
the
debt
at
not
three
good
believing that this ad¬
be
can
trouble
First,
this
if
without
made
we
wisdom
use
country,
achieve
we
be
Even
budget,
tremendous
a
for
program
when
even
balanced
a
pursuing
spending
defense.
though the expenditures
are
by taxes, the program
inflationary force
time
is an
will be
which
with
for
us
Second,
tling
some
have
we
to
come.
almost
from
evidence
star¬
Europe
of
countries which have turned from
inflation
to
prosperity by putting
effect
vigorous
sound money.
it
programs
Germany, Holland, and
after
destruction
poverishment,
strength,
Third,
for
That has been true
and England. If they
with
we,
do it, too.
can
can
im¬
and
our
;
.
have the long history
we
of economic progress of this coun¬
It is
try.
free competitive
prise that has made
move
we
and
and
more
enter¬
great. As
us
from controls and
away
artificial
gradually
props,
reduce
taxes, we
fully the forces that
us prosperity in the past.
strengthen the dollar and
people's confidence in it,
brought
we
renew
we
restimulate the flow of savings
has always
provided the
long
the
process
debt
maturing
we
more
Please
ble.
about it.
a
wise
indeed,
or,
quarter of the debt
within
one
year
three-quarters within five
and
years.
•Talk
by
Mr.
Convention
tion
of' Food
30,
1953.
Burgess
of
the
Chains,
before
National
Chicago,
the
An¬
Associa¬
111.,
Sept.
note
I
that
to
a-
say
freer
the
re¬
economy
There
is
nothing
To make
a
automatic
free economy
work,; the participants have re¬
sponsibilities. They must be pre¬
pared
come
nual
great,
be made without serious trou¬
it
is
Surely,
these
forces.
adjustment
can
afraid of
not
are
longer period. We do
oyer a
believe
safe to have
*
pro¬
enterprise.
free
widely and spreading its maturi¬
ties
produce
•
of
it easier for the
finance
to
We have begun the
of
additional
to
use
prices
artificially low interest rates.
segment of the economy
stimulated, the effect spread
to other segments of the economy
!
least
at
are
capital to build America.
make
so
Treasury
was
and
the
for
ties and
for
rapid
depreciation
of new
plants. These were very stimulat¬
ing to plant expansion. As this
for
to .peg
a
Profits
which
and
guns
longer asked to
no
system
the penalty
are
makes
United States Government securi¬
the
been
It is
powers
peo¬
jolts. The
economy.
That
for
reasons
As
of all the
good
economy,
be
economic
goal; losses
subsidies "
to: carry
best
to
gress.
for
the
flexible
loss
failure.
release
free
another business.
or
our
and
out its legal
responsibility of influencing credit
policy
demand
United
* The Federal Reserve System is
now
resulted in
granting authorization certificates
new
the
States against aggression.
;
side
to; defend
power
that.
strength—is in being
are
do
cal
rates, but
weathered
bound
are
of Italy
In nine months^he prospective
budget deficit for the present fis¬
picture? Is it not true that the
major motivating force of capital
plant
one
vital,
any
ad¬
some
well be other adjust¬
of Belgium,
year
1953-54
has been cut
as being
from $11 billion to less than $4
postponable, if businessmen be¬
billion. This has been done with¬
come pessimistic as to future pro¬
fits, this characteristic is "t being out interrupting the building up
and
ments in
into
less
while
thought of expend¬
largely
eliminated,
greatly minimized.
are
some
We had
interest
to have
There may
In
are
budget pol¬
free and soundly operating
Federal' Reserve
with
three
on
there
spring in
met
sound, honest dollar.
a
Sound
ex¬
or
>
people
necessary.
seem
will
the
reasons,
main pillars: a sound
itures for durable goods
planes.
government
as
po¬
of capital.
source
For
in per¬
more
an
American
1
many
course,
this
and
discourages the
the
other words,
in the past we
ther
prices fall when the
stands ready to buy
Of
justments
There
When
profiteer, with all kinds of
and
the
farm
question
.
time
can
is
the
upsets
rises, the merchant is blamed
defense
Exchange Bldg.
When
litical consequences.
rapid
of
the
for
in¬
get
.
essence
are:
pro¬
up
increases
many
spent
that
his
turns
sonal
risks, the decline might have been
precipitous. But how much far¬
could
N. Y. Cotton
who
Wholesale prices rise faster
(3)
continuing.
that this rate
A
equilibrium.
any
over-all
our
capacity,
of
I
others, but he
heavy price. Some of the
upset
industrial
an
than
(2)
and
of
ception. In this, present boom
ductive
War
squeezed.
seem
tal, goods, and this boom is no ex¬
rate
pre-World
a
than retail and the merchant gets
country
centers in the production of capi¬
have
its
merchant
a
(1)
expenditures, and therefore the
threat of World War III
faded, boom, since 1950 has been the
especially since the truce in Ko¬ government policy of guns and
rea.
Without
the
price support butter, which meant building and
program,
which, of course, re¬ superimposing a huge war plant
on top of a
duced
the
farmer's
high capacity peace¬
expansion
This
New
as
have been curtailed. As always in
the
past,
American
agriculture
1856
Expenditures
equipment:
or¬
capital¬
income, that large amounts tributing the debt widely
the people.
I.. •
on
research guarantee a
to January, 1951, and that the re¬
>;
This
Administration
is
steady
and
sizable
volume
of
cent decline is only a correction
mitted to honest money.
capital expenditures, and finally,
of those
war
experiencing
today hardly expect such disproportion¬
rather a unique and even confus¬ ate increases in their income to
last.
However, it is, of course,
ing situation in America, some¬
We
The
argu¬
mild recession—one which hardly
deserves
industrial
.-our
we
reasons
the
dollar
steps
avoid
to
Adjustments Necessary
today is worth only
of
pays
Depression"
now
in
ments
'
a
agricultural
appear
fundamental, such as the ex¬
isting tax structure, the incidence
dollar
flation
"Only
principal
W. R. Burgess
stock rapidly suffers less from in¬
for
the
deflation—to
people.
our
long period of loose fiscal policy
f.
us.
Reasons
en¬
we
tnird
reces¬
a
and
necessary
or
honest
the
of
to
spread
campaign
the
are
are
flation
value.
re¬
and
of
Actually,
of
great
savings
These
that
Be¬
wealth,
The
Federal
force
to
this
and
who understand selling.
gave us a strong dose of inflation.
sound money econ¬
a
Neither
omy.
believe sales can
greatly increased.
especially of groups like this one
been
nate than most
a
say
and
be
debt, the Treasury needs the help
fortu¬
cause
re¬
asking is whether it is possible
have partly offset infla¬
to move
from a long period of
tion
with
increased /production,
inflation to one of economic sta¬
and with saving.
*
bility without a business reces¬
But, even here, two wars and sion.
sit¬ that much of the reasoning that
uation looks bad only because of there cannot be another depres¬
solved?
the
relative
relationships.
The sion is circular reasoning, i.e. per¬
Those
who
argue
that public agricultural segment of the econ¬ sonal income is
high and as long
psychology is the result of busi¬
omy
has
been
suffering
some as it stays high we cannot have a
ness conditions
believe that cer¬
recent
pains
while
other
seg¬ recession—ever.
tain existing facts are irrefutable
ments
of
the
economy
How
In
coun¬
has
ism,
minor
a
we
courage
m o r e
well this
greater confidence in the
should
;
s
savings
going
well ahead of
are
prosper¬
eco¬
ganization, under liberal
minor recession.
We might ask why must a gov¬
economy
general recession
a
production
conditions?
of
segments
lar,
stability 4
T h i
States
are
stability of the value of the dol¬
for
government can and will prevent; soundness
anything
Sales
With
the
inflation.
distaste for bureaucracy
before
the
1952
elections^ now..
have rather sublime faith that the
will
overproduction produced de¬
clines
in
prices
and
incomes
been
United
of
bonds.
they
demptions.
is
much
so
sale
year;
in
resisting
especially interesting that;
thie inroads of
many businessmen who showed
It
One of the best ways of redis¬
tributing the debt is through the
g ; p owe r,
try
gen¬
one?
Mining
has
and lead to
are
re¬
greatest single
.;
anticipated. This ,.is' de¬
cidedly not the case today.' / ; '
major
Only in agriculture and mining
other
these
"good
years,
enemy
of the people the
Sound, honest money,
nomic
erally
so
n
ity.
unless
or
i
has
and
-
40
great
tained its buy-
wholesale div¬
the
past
a
welfare
over.
which
less Dow Jones
in
the
been
force
talk
to
the
or
reductions
idend
hard
of
world
are
stocks—200-220
ation may spread like a disease to
raised
is
It
real bear market in
a
—unless there
ernment
Agriculture
mism and the degree
of pessi¬
mism; furthermore, it is difficult Which have reached such pro¬
to know when public psychology
portions as to cause real concern
will change, how deep the change in some
quarters. Some even feel
will be, and how long the new that the effects of the farm situ¬
■outlook
this.
in terms of
readjustments"
"rolling
pression
importance.
'
of business weak
areas
profits to a point necessi-r
widespread cuts in' divi¬
dends. The recession they visual¬
ize would be mild indeed, only
a little sharper than the 1949 de¬
cline in business, and
certainly
the stock market has already dis¬
tating
counted
of
most
inflation has
reduce
economist
period of inflation to economic stability, but
can be made without serious trouble.
a
why these
reasons
in
certainly
crystal ball. If he does have one, negligible. In September business
been
he must not ever admit that he has
maintaining, although
uses
it. His job is to constantly not surpassing, the August levels.
An
System, and (3) a policy of distributing the
widely, asserts the Administration is committed
these principles.
Foresees some adjustments necessary in
national debt
such
its peak but when they
decline they talk only
a
terms
of
as main pillars of sound money:
sound budget policy; (2) a free and soundly operating
a
Federal Reserve
degree of pessimism is not really
depression," Prof. Bellemore lists: (1) probable continuation of heavy expenditures for plant and equipment; (2)
continued new housing demand; (3) only a slight decline in
automobile demand, offset by larger consumption of other
consumer durables, such as household
and other appliances;
and, lastly, (4) no severe letup in defense expenditures. Con¬
cludes there is evidence the boom has already passed its peak.
Money
By W. RANDOLPH BURGESS*
recession just around the
a
corner
mild
,
a
we
stocks? If
a
defense
expendi¬
still definitely op¬
boom period. Why
in
are
in
do
about
of Business
College
we
1953
take
to
shelters
without
enterprise
must
some
risks
and
out from under governmental
be
system
panic.
to
enterprise.
For
work
the
there
/
yolume 178
Number 5262
.The Commercial and Financial Chronicle
..
(1327)
bit in the past
Aircraft Profit Altitudes
on
$3
a
By IRA U. COBLEIGH
Author of
stop
slow
or
then
motor
motor
cars,
you
that
cruises
If
and
you
houses,
mortgage
tight¬
ens, and buy¬
ers get
acutely
price
con¬
money
ship flies
space
The
m.p.h.,
50% stock divi¬
a
1952.
pretty much
to
foregoing notes about two
demonstrate
factors
stated
the
equipment
our
and
our
strategy must place top
electronic
to
necessary
make
and fly right.
up
annual
is
running
sales
gross
million
rate
at
of
an
above
should
and
around
bomb
on
tion.
Even
carrier
the
produc¬
September
$8.75
$3
pays
share
a
There
regularly
in
over
and
extra last December.
It
75c
gave
At 6.6 times
cut¬
earnings —57V2—Bendix
is
-
the
-
earning somewhere
rent
cash
no
$3.
near
angle,
since it
and
This
cur¬
pays
dividend, but from what¬
future
perceive
hauls,
counter,
view not from the
income
ever
1953.
337,438 common shares,
are
quoted
earn
em¬
economy
m.p.h.
ning above $90 million this year.
item you
now
these "bananas*'
overcome as
hit 150
can
Piesecki's is producing entirely
of for the
military, with sales run¬
its produc¬
and
intricate
their slowness—is being now par¬
tially
large
assembly
these aerial automatons straighten
of the most stable
one
its
of
and
missiles,
of
$600
in
phasis
mammoth moths have
thesis
outset, namely, that defense
spending is
total
the
offered
are
because
Bendix
at the
through the air by 13,000 h.p. of piston
packing propul¬
sion; with power loss minimized
by jet turbine recoverers.
Over
tion
be
to
seem
leader in this de¬
a
testing
guided
Industry Leaders
leaders in big aircraft
and
titanium wings
on
was
Other
projected
60 of these
a
partment
There
dend in May,
public, and if they could wend its way from New
their buying, York to London in a
paltry ten
earnings! and shares hours. 109 feet long, this almostbuild
but
scale
down
^ip.
is 6.8%;
Bendix Avia«*
tion, however, would
ble.
365
at
dividend
yield
higher cash distribution is possi¬
"Winning in Wall Street"
Offering the thesis that military aircraft producers possess
depression resistant qualities that, only recently, have begun
to be appreciated
by the market.
If you make
sell them to the
couple of weeks to nuclear propulsion.
around 44 at which level the
7
possibilities
in the
you
may
helicopter—short
mail carrying
and
airport
taxis.
ten
been ordered by commercial
billion will not heav¬
lines, backs of $
Air power, next
to atomic
points below its 1953 highs. Book
scious, then just to illustrate that Douglas does
ily affect the total air picture; and
the controlling factor
value is above today's quotation power, is
building ma¬ not totally depend for its susten¬
the cuts might be restored.. The
in world military strategy.
terial
shares ance on the military.
Com¬
(about $60) and there's no funded
same economic trends apply with
will sag.
But
panies such as we've touched upon
On the financial side
debt.
-
Douglas
if
make
you '
military hard-i
for
ware
the
has been
consistent
a
ating in the black in
earner
rattles
and
a
saber,
zooms,
producers,
as
especially in air¬
craft,-get bigger than ever back¬
logs from the most opulent and
buyer
in
the
whole
J,
rent
earnings
Sales
are
pattern
at Douglas.
running at
now
an¬
an
rate of roughly $900 million
(against $522 million for 12 months
attack, launch a counter
fission attack, or buttress the mil¬
itary
and
installation
of
friends
our
allies
against possible Com¬
cussedness, pays cash,
early delivery, and will
even
condone high
or overtime
labor costs, to meet target sched¬
munist
wants
ules.
For
long
this
and
cause
reason,
Russia is fomenting ag¬
gressions, as she is in Indo-Qnina,
so
and
as
though
even
nets, and the capacity to dish out
higher
dividends.
With
such
a
background,
it's
difficult
not too
lice action" is at
indeed
have
an
end,
defense
spending of upwards of $50 billion
a year (for us, and aid to
foreign¬
ers) in the foreseeable future. A
balanced
budget
is,
to
coin
a
phrase, for the birds—and I don't
the
mean
American
Markets
Yet
Eagle!
Ignoring
Martian
before
of
military
caterers
was
spend¬
—he didn't do any such thing. In¬
stead he built and touched off a
prototype
hydrogen
than
ever,
bomb.
need
we
And,
pro¬
a
tective radar grid from Point Bar¬
row to Port Everglades, long
range
bearing
interceptors,
jet
and
craft,
intrepid
guided
missiles
for misguided Muscovites.
The nature of the world
must
guard against, sug¬
ever
of
our
defense is aircraft, and that
warships in the air must now do
what
us
the
warships at
British
century
keepers of the
With
the
the
po¬
world,
and
the
peace.
this majestic
back-drop to
our
what
see
did
for
the
of
sea
Empire
1914—be
before
licemen
let's
$15.
4.3
topic for today,
doing about
of this stratospheric defense
(or counter attack), and how the
companies that implement it are
some
making out.
Boeing
Aircraft
Airplane
cently
200
as
June
of
backlog
of
$1.9 billion.
1,
orders
this
year,
totaled
its
over
Douglas, producer of
the world renowned DC 6 has just
come
DC
7
out
is
beater."
Its
missiles..
some
A
been
Boeing has
top level research, and
to
looking
be
into
largest
company
"operation
egg-v
principal contribution
to defense is its H-21 "Workhorse"
used
for
of
rapid
army
sacred task of
the
A
wounded
earning
shouldn't
helicopters
fore
carried
and
battle
new
can
YH-16
the
carry
rotary
the
objections
Phis is
J. —A.
N.
Kalb
in
a
as
pro¬
in the prospectus
the
in
Smith in Trenton
present
is
TRENTON,
Smith
is
business
J.—William
N.
conducting
from
a
offices
in which
they
at
sell these securities. They are subject to the registration and prospectus requirements of the
Information about the issuer, the securities, and the circumstances of the offering is contained
which must be given to the buyer and may be obtainedfrom any of the undersigned only in States
are
qualified to act as
a
dealer in securities and in which the prospectus
may
legally be distributed.
October 7, 1953
"VJ
this
But
cited
be
ducer
atom
age,
(Without Par Value)
of
jet
for
devastating de¬
anywhere
the
on
face
-
of
the globe. Its B47, six jet bomber,
is not just a blueprint beauty. It's
actually
being
out
turned
on
a
regular schedule, perhaps as much
as
unit
the
Boeing
plant in Wichita, Kansas.
Boeing
a
has
also
been
quiries for
ation
a
at
day
a
getting
lot of in¬
a
somewhat similar jet
adapted to commercial avi¬
but
civilian
no
airline Boe¬
ing jet has yet been approved for
production.
the drawing boards,
on
in two actual
now
models,
.
Offering: The Company is offering to the holders of its Common Shares of record at the close of business
5, 1953, Rights to subscribe at $29.60 per share for the above 122,316 additional Common Shares at
the rate of one share for each eight shares so held of record. Subscription Warrants will expire at 3:30 P.M.,
Eastern Standard Time, on October 21, 1953. During and after the subscription period, the Underwriters
may offer Common Shares at prices varying from the subscription price.-
October
offers
Boeing
world-range
flying test
Company's principal wholly-owned subsidiary, Western Massachusetts Electric Company,
is engaged in the business of generating, transmitting and distributing electricity in contiguous territory
comprising approximately 1,450 square miles in the western part of Massachusetts, including the City
of Springfield. The Company itself is a holding company which does no utility business.
New Issue: The Common Shares will represent new
Massachusetts Electric Company to be applied
this
at
hour.
bomber,
150-ton
its
rowings made for prior construction).
but
the
•From
craft
the
able
right
the
post
when
per
The First Boston
cits
were
been
shot back
around
1946
Boeing
up
to
fabulous
new
mon
outsized
bird
listed N.Y.S.E.
Chace, Whiteside, West & Winslow
an
an¬
Incorporated
Company
war
Putnam & Co.
Townsend, Dabney and Tyson
year,
(sole capitalization).
BA
is
It has moved up a
Please send
spectus
me
relating
to
of the
pro-
Name—
the Common Shares
Address,
a
copy
of Western Massachusetts
Kinsley & Adams
•
$800 million,
of the 1,624,000 shares of BA com¬
its
Arthur W. Wood
Tifft Brothers
sales
prophesied in respect to each
an
Tucker, Anthony & Co.
Incorporated
earnings of perhaps $11 have
with
F. S. Moseley & Co.
Coffin & Burr
B47's
years
% higher than the best
and
White, Weld & Co.
Boeing sales fell
recorded,
of
Corporation
Kidder, Peabody & Co.
packers.
war
-
the
of
the
now
to
Shares Without Par Value.
through
bomber
plutonium
1947
Outstanding as of June 30, 1953 (Consolidated Basis): $15,000,000 Secured Notes—
Companies, Second Series, 2.8%, due September 1, 1969; $11,000,000 Registered
Company, 2.95%, due October 1, 1973; $8,000,000 Notes pay¬
Bank—Western Massachusetts Electric Company, 3%, due April 1, 1956; and 978,527 Common
Western Massachusetts
B52,
sluggard 600 miles
This" is
future;
are
a
financing and the proceeds will be loaned to Western
to reduce Notes payable to Bank (evidencing bor¬
Securities
whose eight super jet engines can
space
by it
new
a-
,
,
^
Business: The
Notes—Western Massachusetts Electric
Recently
and
Companies
(A Voluntary Association)
designated pro¬
bombers for toting
bombs,
livery
Western Massachusetts
the
as
"'
122,316 Common Shares,
particularly, in
Boeing should
more
nuclear
Companies.
G.
securities
helicopters— South Broad Street.
NEW ISSUE
jet tur¬
&
securities business.
not an offer to
Federal Securities Act.
enterprise
name
the
Co., 325 Market Street, is engaging
20 people;
"Transporter"
to
they
on
load
slated to carry 40. And one of the
early
badly
A. Kalb & Go. Formed
TRENTON,
zones.
suspen¬
blade
with
between),
"Workhorse"
the
(3
aft
too
their
deployment
pioneer unit in double
units
act
on
and
statements;
market.
rapid evacuation of
from
impressive
attaining
are
altitudes, in the air, and
troops and equipment, and the
sion
per¬
companies have
reported
weight than
conventional motors of equivalent
airliner,
in
they will be allowed to languish.
They
ton less
over a
now
that,
the
pounds, yet generates 175 h.p.
rate
fact
Helicopter,
specializing
Piesecki
engine.
This latter item is
phenomenal because it greatly re¬
nual
the
might
you
at
bine
have
by
of
working in this field.
is another
Co.
industrial
pioneer
as
nitude
comes
illustrated
guided
about
number
Aviation
ought to be said
look
a
earnings.
renowned
a
to'mind is Doug¬
las Aircraft Co., Inc., whose mag¬
is
haps
regard done
to
off startlingly and operating defi¬
An impressive and durable com¬
pany
word
ducer of myriad Flying Fortresses
in World War II, and more re¬
and
that
indicated
fascinating
with
historic
we're
Douglas
hard
of
rate
counter
-
take
this
in
elements
Boeing/Airplane Co.
drive
and
It's
Bendix
A
incon¬
seem
earnings
an
gaudily overpriced at
as
times
model
gest that the most vital sector
for
around
Douglas
live
we
in, and the sort of possible attack
for
with
power.
slipped, that Malenkov
we
days does not
verities, and for months
(and after)
the -Korean
ing his time rushing from Pinsk
to Minsk beating his Soviet sword
into plowshares.
But let's face it
bomb
60
sistent
This is
shares
more
in
security markets have
studiously ignored these
truce you'd have thought from the
way
Spurred by the good news
emanating from current earnings
statement, Douglas paid $2.50 in
August ($1 regular and $1.50 ex¬
tra) and another cash extra with¬
duces engine weight; and a unit
already in operation weighs only
Verities
the
rather
mentioned
annum
above.
shall
we
sustained
a
the
ended
month
Korean ''po¬
our
-
to
want
vital
are
strategy and it's absurd to believe
,»£•
nual
fiscal
atomic
Over
its
to account for the current surge in
11-30-52); and for the six
period ending 5-31-53, air shares on the market, particu¬
yvorld, Uncle Sam. Our govern¬
Douglas earned $8.36 per common larly when they offer indicated
ment, in its vital purchases of share
against $8.99 for the full
those goods calculated to fend off
yields ranging from 6.% to 8V2 %.
1952
insistent
here,
Piesecki Helicopter
Lockheed;
quarter century corporate ex¬ United
Aircraft, and Grumman.
istence, with only one exception.
All
should
place into evidence
Gloomy gazers at market trends
this
hy¬ might well reflect
year
larger grosses, larger
upon the cur¬
production
military
producers such
Russia
drogen
then
tion
of
government,
and
Ira U. Cobleigh
similar logic to other major avia¬
oper¬
every year
>
1050
1
The Commercial and Financial Chronicle
«
Thursday, October 8, 1953
•..
(1328)
to
Dealer-Broker Investment
Recommendations & Literature
Manufacturers
Pine Street, New
30
Analysis
—
York 5, NY-
Prominent British
flow of private
&
Co., 330 Bay
Street,
In its
absence of local credit
trend toward
the
ex¬
make
or
contrary
market
lowers, provided
solace
of
profit.
a
usual
stock
well
as
Zellerbach.
Crown
R
I think
t
it may be useful to be¬
gin by asking: What are the main
general impediments at the pres¬
ent time to a freer flow of private
Inv^menTopportuJiUes in JaPaNn-^a7r^Ya^aicW SCCU"
Ltd., Ill Broadway, New York 7, N. Yrities Co.,
City-Brochure describing 2.000-acre
—Kansas City Southern Lines, Kansas City 5,
Kansas
Stocks as of Sept.
120 Broadway, New York
York Bank
New
&
Mo.
Stocks—Comparison and analysis of 17
Bank
City
York
New
Meeds,
industrial ra
B.ssell
30 1953-La.rd,
5, N.Y.
Index—Folder showing an up-to-date com¬
parison between the listed industriaLstocks used in the DowJones Averages and the 35 over-the-counter industrial^stocks
used in the National Quotation Bureau Averages, both as to
yield and market performance over a 13-year Period
National
Quotation Bureau, Inc., 46 Front Street, New
some
Baker & Co.,
Issues—Statistical reports—Amott,
Estate
New York 38, N.Y.
Ten Per Cent Return—List of ten stocks with a ten per cent
yield—Zuckerman, Smith & Co., 61 Bway., New York 6, N.Y.
Typical American Industry—Booklet describing the products of
Inc., 150 Broadway,
the
caution, and ended its gy¬
*
*
Atlas
651
Sulphur &
*
Montreal, Canada.
New York 6, N.Y.
Devonshire Street,
Vermont
Central
Inc., 161
Gannon,
&
Corporation—Analysis—May
Bettinger
due
&
Javelin—Memorandum—Brault
Pacific
Canadian
Fairman & Harris,
Railway
—
&
482
Chaput,
St.
—
Ont.,
Canada.
Georgia—Analysis—Vilas & Hickey, 49 Wall Street,
New York
5, N. Y.
Chicago National Bank—Memorandum—Wm. Tegtmeyer & Co.,
120 South La Salle Street, Chicago 3, 111.
Also available are
memoranda
on
Franklin Life Insurance Co. and Hubinger Co.
Securities
Christiana
Company—Analysis—Francis I. du Pont
&
Co., 1 Wall Street, New York 5, N. Y.
Available in the
issue of "Gleanings" are an analysis of Columbia
Pictures Corp. and lists of 40 favorably situated equities and
high yield preferred issues.
current
Cinerama—Report—G.
New
York
K.
Shields &
Co.,
15
William
Street,
5, N. Y.
Zellerbach—Memorandum—Wood,
King Street, W., Toronto. Ont., Canada.
Gundy
Co.,
&
36
Political
— Circular — Imperial
Securities Co., 80
Montgomery Street, Jersey City 2, N. J.
Also available are
on
Stan wood Oil Co. and Great Basin Oil
&
Leas¬
Drewrys Limited, U.
S. A., Inc.—Bulletin—Gartley & Associ¬
ates, Inc., 68 William Street, New York 5. N. Y.
a
uation. In
bulletin
on
Also avail¬
In
the
uation.
of
category would
is
this
unsettled,
quite naturally tends to
stay at home or near home, where
feels
best
assured
war.
additional effect:
an
This state
countries
proportion
defence,
to
their
of
the
at
Co., Aldred Build¬
receive
11
Thus
Precision
Equipment—Brief
data—Joseph
&
that
may
be
on
n
page
14
to
since
progress
recon¬
into
monetary
but
even
severely it hampers capital
movements.
York
held, at least temporar¬
A
good many of the
technicians, nevertheless, feel
a
lows.
conflicts
or
countries
cannot
the
either of these two
present
attributed
be
In¬
causes.
psychological approach to
coming to be
realized generally that the de¬
the market. It is
cline,
is
which
not
controlled
Canada
by
has
authorities,
the
only a feeble
recent
recovery,
either has
been overdone or is terrify-
ingly pointing to
disaster.
As
it
6,
N, Y.
sort of
some
put suc¬
was
political instability which cinctly by Wolfe & Co., the
not only to upset gov¬ market "seems to have scared
threatens
ernments but also established
icies
is
rent
and
just
as
effective
the danger
as
of
Similarly, all
a
a
world
the
pol¬ itself into
a
fit
things
over
deter¬
one
currency
no
yet sees reason to ex¬
as
con¬
pect."
balance of payment difficul¬
ties which
we
observe
throughout
the world cannot be attributed to
the after effects of World War II.
those of the Caribbean
is
mainly
like
countries
to
or
American
flowed
areas
foreign investor, whatever
cause—worldwide
the
—of
financial
the
national
or
restrictions.
Aircrafts
Typify
j
"
Psychological Approach
Most
was
for
istice,
somewhat
were
as
their
subsequent
earn¬
backlogs
ings reports, order
Expropriation Threat
more
harshly dealt with than the
facts warranted, at least as
far
ra
effective.
investment in other
the
on
where
area
and dividend treatments
i.e. commodities
In this connection I must also
concerned. They were
which themselves provide facility
observe that in some countries the
oil and minerals,
threats
difficulties
The transfer
arising
from the world financial situation
undoubtedly
Not
to
a
most important
private
investment.
only do they make the trans-
to
panel
a
of
for
by
Sir
discussion
of
Governors
Jeremy Raisman
arranged by the
and
Reconstruction
ment, Washington,
International
the
neur
to
the
private
have taken
a
entrepre¬
form which is
discouraging
highly
for
future
*
*
Yet
this
taken
for
another
eign, will clearly have this effect.
which
was,
in part,
It
is
even
a
stronger
Continued
on
deterrent
page
SET OF "CHRONICLES"
COMPLETE
1929 -1951
set
of
Chronicles is
Phone
or
a
(Bound)
SALE
Brokers office in N.Y. C.
Commercial
a
&
Financial
terrific buy.
write Edwin
L. Beck for price
376
REctor.-2-9570
25 Park Place, N. Y. 7
then
*
enterprises, whether local or for¬
Develop¬
were
prominent on the upturn from
the September lows.
foreign investors. A visible trend
towards expropriation of private
D. C., Sept. 11, 1953.
FROM
NY 1-
nine
some
months old with
postwar
Available at
Security Dealers Association
where it
support
and
capital : move¬ In several cases, internal policies
To expand slightly on the
ments.
London capital went leading to inflation have tended to
mainly to the sterling area. For perpetuate exchange controls, psychological approach, airobvious
reasons
the
export of price controls, and the restrictions crafts are a
good illustration.
stifle
United
private enterprise.
Kingdom
capital
else¬ which
The prime producers, which
the
impediments
to
where is strictly controlled and Obviously
limited by the monetary au¬ transfer of earnings or principal, bore the brunt of the "peace"
thorities.
Similarly, U. S. capi¬ and the threats of devaluation selling after the Korean arm¬
tal although
its movements are have the same discouraging effect
of
tures
This
Trinity Place, New
levels
ily.
week
they
were
tumble
a
bit of
profit - taking. How¬
47 ever, the profit - taking was
accented by some still-vague
rumors that the
government
was
going to slow down on
its progress payments which
logical
are
Troster, Singer & Co.
political
of
fea¬
McCloy
two significant
out
can
has
Mr.
FOR
74
several
This flict.
areas.
course,
5
Primary Markets
2400
world-wide
investors
threat
the
to
In
in¬
from
Reeves Soimdlcmft
Y.
private
foreign
being fully
The world is still di¬
A
N.
of
attributed
to the aftermath of World War II.
World War II but financial
hampers trade, of
and
UNUSUAL OPPORTUNITY
Cinerama Production
Members:
be
overriding
Physical reconstruction has ternal
completed.
political
investment,
another
far
precisely
expected
were
found
was
the
world
mistake to think that all hes¬
a
itations
remarkable
Bank
Cinerama Inc.
HA 2-
be
factor.
Board
Continued,
the
difficulties
contribution
Faroll
Co., 29 Broadway, New York 6, N. Y.
Non-Political Causes
capital movements. But it would
eco¬
vestors.
is
was
ber
to
of
high taxation and controls
is
almost
stand¬
of the rules
testing of the Septem¬
At this juncture,
this is not as important tech¬
nically as it is in shoring up
dividends.
financial situation tends to inhibit
extent
discouraging to local
they also discourage
technical
a
none
broken. Resistance
less valuable asset and least
smaller
Internal
Security
the
To
increase in
From
point,
in
or
large
a
resources
first.
countries this may
earnings, but
by no means a general rule.
if the foreign subsidiary re¬
currency a
ing, Montreal, Canada.
General
*
that little of any real conse¬
in which it operates,
quence can be accomplished
may
mean
that the foreign
on
the top side without at
shareholder will hold in his own
It forces
expense
comes
pointed
❖
it
tension
of
devote
development.
more
no¬
comes
next has still to be revealed.
its
the
against
risk of
deterrent
Fraser Co.—Memorandum—Greenshields &
the
back
of
what
the currency
capital
it
that
mains solvent after devaluation of
the world political sit¬
When
some
values
asset
Financial
and
first
fall
course
are
Monroe Auto Equipment Co.
of
therefore
and
be compensated by an
of transfer.
ing Company.
able is
particular
Unsettlement
convertibility
Crusader Corporation
circulars
of
Even
to
Crown
itself
the middle
so
may
rium carries with it another risk,
the risk of depreciation or deval¬
this is
vided
convertibles
Memorandum on
Walwyn, Fisher & Co., 44 King Street, West, Toronto,
Central of
directly
more
actions
susceptible to treatment.
more
struction
Montreal, Canada.
the transfer
capital
made
Service Co.—Booklet—Ira Haupt
George W. Borg Corp.—Memorandum—Sills,
209 South La Salle Street, Chicago 4, 111.
Francis Xavier Street,
governments,
be
may
the
to
There
Co., Ill Broadway, New York 6, N. Y.
Canadian
others
but
Boston 10, Mass.
Public
individual
of
nomic
Corporation—Analysis—Auchincloss, Parker & Redpath, 52 Wall Street, New York 5, N. Y.
Bettinger Corporation—Analysis—Goodbody & Co., 115 Broad¬
Bettinger
way,
trol
some
Iron—Memorandum—Globe Securities Corp.,
Victoria Square,
threaten
also
They
in
where
these
has
Cleveland, Ohio.
company—Dobeckmun Company,
uncertain.
coun¬
of
signs
foreign
for
of
Some
4, New York.
York
Real
try
earnings to the home
investment? marketability. The
liquidity
of
may
have their both principal and earnings
is
roots in widespread or world con¬ thus imperilled.
ditions which are beyond the con¬
The world payment disequilib¬
capital
countries and should therefore be
Over-the-Counter
fer of
week
a measure
as
rations
on
way,
this
furnished few clues to its fol¬
capital markets—as
composing a doubtful "climate." Conchides private investor
will only go where he is wanted and where he is allowed to
ti
ti
internal political instability;
propriation;
Fmanaa
and Mnnreipal
Government
Canadian
By WALLACE STREETE
impediments to freer
capital for foreign Investment directly due to
particular countries, and hence susceptible to treat¬
transfer difficulties; risk of depreciation or
devaluation;
Knotfies,
state of
bank official details
AND YOU
...
Stresses
ment.
Knnwles
,
Business-Ross,
Toronto, Ont Canada.
Canada-Monthly bulletin on
THE MARKET
By SIR JEREMY RAISMAN *
Co.,
Stanley Heller &
—
.
Vice-Chairman, Lloyds Bank Ltd., London
actions of
Aircraft
v
Foreign Investment
2-r"'
"
'
the chief
ing
capital
makers.
source
for
of work¬
the
plane
The
reasoning was
that the companies, if forced
into I the money markets to
raise
their
working
cash,
would
charges
profits.
find
the
interest
all their
Admittedly, raising
eating
up
Continued
on
page
35
Number 5262... The Commercial and Financial Chronicle
Volume 178
(1329)
9
i>
cumulation
The Maiket and Dow-Jones
rapid
hand.
Defense
been
now
the
The
Pointing out psychology of the market has been
is
perfectly legitimate question
like all
a
but,
foolish
ques¬
tions, it
likely to
ceive
i
s
at
*
will
this
question
one
for
hedging
your
opinions. I propose to make full
use of this Analytical License.
room
To return to the question which
going
answer—"What
to
with the market?"—I
said, "everytime for this past
year,
whenever you have seen
a
wrong
headline
in
the
which
paper
was
a
little closer you have seen on the
of
page
paper
Will
S.
Heavy Armament Ex¬
penditures
in
spite of Peace
Talk."
On
movements
re¬
of
the
of
fact, the Dow-
Stocks
reflec¬
are
10-15%
the
paper
next
have
you
the
of
page
seen
a
food
of all; trad¬
stocks
general
have
and
rule;
base
these
distinct
a
For
30
instance, all but two of the
30
made
all
but
final
lows
in
1942
and
two made final highs in
Again 27 Dow-Jones stocks
1946.
their
made
final
lows
in
1949—
that is to say, at each of these
important market turning points
nearly all Dow-Jones stocks
turned in the
direction.
same
bull movement from
has
shown
not
this
The
1949 to
date
characteristic
uniformity of action.
Until the middle of 1950,
all
Dow-Jones
the
but
nearly
stocks
went
Era
ushered
Korean
next
do
three
not
which
see
uniform
a
characteristic
was
vious bull
market
up,
in
an
assurance
and the market
closed three points up on the day.
This is what has been wrong with
the market.
Investors
may
are
come
stimulus of
for
tures
and
inflation
what
economic
arms
race
others, they
the Govern¬
Government expendi¬
so
to
come
ment
of
the
atomic
an
Like
abates.
4jave
fearful
once
many
rely
on
induced
Government
to
skate
them
on
side.
from
effect
on
were
these
stocks,
beneficiaries
level
of
but
of
personal
handsome
and
a
they
very
income,
spend¬
consumer
ing.
have
free
a
I
as
whole
a
industrial
' stock
pointed
and
price
-
it
obvious
is
earnings
of
rate
market.
relationship
that
the
at
I
historical
the
out
and
current
earnings, the Dow-Jones
hardly
overpriced.
I would not ex¬
pect them to decline very much
from present levels as I expect
earnings in 1954 to be at least
$25 against $27 in the latter part
averages
For
are
that
reason,
of 1953.
the
and
three
1953
phase
looks
to
top
of
like
me
intermediate
phase in an up¬
If it actually is a
top then it would be unique in
its breadth and duration. I prefer
to believe that we will yet again
an
ward
see
sweep.
the
when
time
hand
find the
yields
and
that
we
I
are
period
28
of
out
12 months'
modity
the
40-60 points,
or
back to 250-230.
I imagine that we
ther lows this year.
furPerhaps by
may see
Thereafter, I
year-end rally
November.
a
is
That
to
that
the
is,
in
as
stock
flect
The
market
this
war-markets,
all
for
the
reason
has
tended
to
market
has
affair
since
dull
January
30
been
it
rather
a
hit
1951-nearly
250
30
in
months
ago.
pe¬
fall,
the
By
re¬
each
development as it ac¬
tually took place. In other words
the
tlcs o£ competition come to the
fore.
overcome
could
our
clear
should have
blues. This
a higher
earnings
always
we
peace
the way for
of
evaluation
barring near war. Perhaps, then,
that speculative boom
we
have
all been waiting for will finally
.
.
1ncl-
c0?ie.t0 paSS "I ki
1 bave Probably
„
overstepped
mZbcen!e tohaveverbose instead
be
of accurate. I
certainly over¬
stepped the bounds of caution in
making these
predictions.
For
point that the
this
year
I
confess
to
being
dustrials, much maligned as they
bearish, but I believe the worst
may be, are a very fine sample
will
definitely be over by the
of the market.
We see in their
time the forecast is read again.
behavior, the same features which
Thank you for letting me stick
have characterized the rest of the
I
think
market.
that
I
have
proved my
Dow-Jones 30 In¬
elusive
That
and
some¬
out my
neck.
what smug attribute
is
"Selectivity"
reflected
in
their
perfectly
of
Boiled down to
30
stocks
this
a
group
Martin G. Remer With
"Selectivity"
Central
loses
its
mystery and becomes
quite rational. Far from reflect¬
lective,"
oallv
of
ol
the
toe
CHICAGO,
mer
market
and
announcement
is not
of
be-
Mr. Remer
which
a
docilely
offer t-o sell or a solicitation of an offer
offering is made only by the Prospectus.
an
Mountain States Power
the
stock Exchange.
formerly President
Midwest
was
of Remer, Mitchell & Reitzel.
to
buy these securities.
,
beneficiaries
1951,
of
their
saw
inflation
began
tops
to
during
when
abate
(4%)
the
were
-
inflation
Dated
1952,
seven
more
September 1, 1953
this
late
in
1951.
In
Company
First Mortgage Bonds, Series due September 1, 1983
com¬
and accrued interest
101.58%
Price
stocks
They consisted of:
topped out.
Oil of N. J.
The psychology of the
Standard
been
Standard Oil of Calif.
market has
dominating the basic facts
of
life, such
price-earnings
earnings and
ratios.
Amongst
as
industrials
the
I
Allied Chemical
there
has
Johns
have
Dow-Jones
with
me
Averages
quarter from
to
a
the
date.
for
chart
of the
each
last quarter of
The
red
columns
a
moving average of
previous quarters; the
blue lines represent the average
represent
four
the
value
of
&
the
Dow-Jones
Indus¬
You will
the
as
c
have
of large companies
supplied the basic
needs of the Korean
war
The
era.
products of these companies
were
the face
In
and
show
the price-earn¬
commodity
prices,
relationships
to the
You will see that on
ings basis.
this
in comparison
traditional ten-times-earn¬
basis
the
Dow-Jones is sell-
•A
by' Mr. Andreae before the
Analysts of Toronto, Toronto,
23, 1953.
,*
1
talk
Canada, Sept.
was
for
the
steel
1952
ized
in
WM. E. POLLOCK A CO., INC.
HANSEATIC CORPORATION
STROUD A COMPANY
INCORPORATED
SHEARSON, HAMMILL A CO.
|
FREEMAN
MULLANEY, WELLS A COMPANY
A COMPANY
FOSTER A MARSHALL
PACIFIC NORTHWEST COMPANY
In
In
forecast
April,
of
August,
strike.
THOMAS A COMPANY
The
the
there
credit
ASPDEN, ROBINSON A. CO.
BOSWORTH, SULLIVAN A COMPANY, INC.
re¬
there
was
latter
part
therefore, character¬
heavy
inventory
ac¬
was
by
.
MACKALL A COE
INCORPORATED
1952,
1953.
recission
strictions.
of
SHIELDS & COMPANY
WILLIAM BLAIR A COMPANY
AUCHINCLOSS, PARKER &, REDPATH
NEW YORK
s
BROS. &, HUTZLER
STIFEL, NICOLAUS A COMPANY
Events
trend
the
Security
SALOMON
these
1952.
ings
&, MERLE-SMITH
pro¬
of other de¬
clining
order to
DICK
*
monopolistic prices
by
duction.
companies were able to raise the
prices of their commodities in
quarter. I have
earnings ten-fold
.
chemicals, nickel and asbes¬
oil,
tos. Each of these is characterized
trials during each
the
-.
HALSEY, STUART &, CO. INC.
names
multiplied
in
■
Union
recognize these
names
which
•
be obtained in any state in which this announcement is circulated from only such
of the undersigned and other dealers as may lawfully offer these securities in such state.
Carbide
here
which depicts the earnings
1943
Manville
'
■
The Prospectus may
International Nickel
four years.
I
i
Co.
Texas
been
little speculation in the last
very
'
PATTERSON, COPELAND A KENDALL, INC.
October 8, 1953
Re¬
with
Central Republic Company, 209
South La Salle Street' members
obedience
market
C.
associated
become
the
be-
Qf
timidity
has
Chronicle)
111.—Martin
reflects
"Selective"
the
clever
havior
diaboli-
therefore,
and
Republic Co.
(Special to The Financial
ing a secret formula of the so¬
phisticates who have been "se¬
$8,000,000
heavy
the
say
be
to
b£ ,a £urtbf decline
sTometl™ bet™ee" March /and
group.
industry
stocks
and
modity stocks, which
would
fune> 1954—after the uncertain-
Industrials.
The
com¬
a
may
advances which started at 163 and
culminated at 293. That is about
S.
in
in
now
which
turning points.
Distillers
times
prefer to
of motion amongst the Dow-Jones
wildered
This
started
11
carry us back one-third to onehalf of the waY
the previous
expect
Dow-Jones stocks will turn down
a
Jones
£oll°wed
pattern.
Again
1951
-
which
market
52/2%
believe
there was little anticipation and
point which I would like the market tended to move after
to make tonight is that the Dow- the event.
There was therefore,
Jones averages are representative no
speculation,
in
consequence
of " the! market
Dow
saw
price-earnings ratios.
the
"
v
bear
Vcorrective
at their lows.
were
we
submit that the Korean interlude has destroyed this
uniformity
General Foods
1951, 10 of the 30 Dow-Jones
stocks topped out—they included:
National
Spend
Heavily
fr0m
I
Expiry of price controls had its
In
U.
I
first
checks
purchase
released
any
the top of the
market in January, 1953.
If that
js really so, then it will be the
to
eltort.
here
theorists,
pre¬
such
Peace
Will
Government
"If
to
part of investors.
According to the
ex-
which
pay
which
looking ahead
action
of
for Public Works" —
Humphrey.
Only yesterday, Mr.
Humphrey delivered himself of
Comes,
headed
1953
28
Tobacco
Steel; Bethlehem Steel;
National Steel; American Smelt¬
ing and Refining, and Interna¬
tional Harvester in the heavy in¬
dustry group,a as well as Procter
&
Gamble,
Corn Products and
statement
with
interna-
and in the meantime "Selectivity"
really reflects "Indecision" on the
oil and
in
of
In other words, the
be
1951-53 top strange indeed.
American
During together within
1951-52-53, riod.
year,
plant
dictates
not
further than two to four months,
.
stock a war effort.
fat
civilian
war
period of divergencies.
the
minerals
1n,,
And
Can
have
a
and
is
the
The
tendency
together, particularly at
turning points in the market.
news¬
same
statement—"U.
a
steel,
we
the
Continue
same
measure
move
a
suggested that world peace
same
real
.
top production
goods
for the 1949-53 bull market:
their
on a
As
,
is
than
more
matter
stocks
to
best
can
,
pansion
1(KO
Motors
the
H. C. Andreae
market
..
inflation
1952
they included:
oil,
really expects you
give them the right answer.
You see there is a gentlemen's
agreement among Financial Ana¬
lysts • whereby verbosity is ac¬
cepted instead of accuracy and in
every
forecast there is always
was
for
1.951
tops.
metals.
to
ample
their
£
be¬
no
to
'
ol
years,
as:
.
the
thatthey cover a wide enough
range of industrials to represent
1
three
the
tional events.
portrayal of the movements
benefiting from the within the market during the past
wide open buying spree in con¬ three
years.
Bearing in mind,
sumer durables.
Along with these that in 1942-28 of the 30 stocks
hard goods producers, these soft were at their,
lows, in 1946, 28
goods producers made new tops were at their highs, during 1949,
."<7v;
a
of the
1 n(-1
of
of
typical market day.. The
group is very broad.
It includes
ring
kind
As
past
summarized
Westinghouse
.
down, and that they hardly
ing
be <v
time
a n s w e
I
no
tive of about
year?"
cause
•
-
I don't mind
this
do
Jones Average
think.•
follows
all companies
Averages have
attacked
market.
where¬
likely to come
.higher price
General Electric
basis
-
more
American
been
the
"war
the
Chrysler
high
go
the
"boomlet"
nine
stocks
General
statistical inaccuracy. It has been
said that changes
in the Dow-
flect
since
much
a
with
which go up and the stocks which
v.
For
action
carried
time
the difference between the stocks
Dow
next
times
-
This
re¬
you
Jones
often
by
for
time
Dow-Jones
also
so m e o n e—
the
ten
a
Dow-Jones
Jones
•
answer, just
like
asking,
do
close to
even today.
a
foolish
a
"Say,
ing
The
had
and
Eisenhower
1952-53
dominating
force overriding earnings and price-earnings ratios, Canadian
market analyst defends Dow-Jones averages as representative
of market as a whole, covering a wide enough range of indus¬
trials to represent the industrial stock market. Summarizes
action of stock market for past three years as: (1) year 1951:
inflation and plant expansion; (2) year 1952: top produc¬
tion in war effort; and (3) year 1953: fat civilian paychecks
to purchase goods released from war effort.
Looks for a
possible speculation boom in 1955-56.
Now 1 believe that that
at
market
of
care
event is
level.
buying spree" of late 1950,
civilians were really willing and
able to go out and buy.
Secretary, Dominion and Anglo Investment Corporation, Ltd.,
Toronto, Canada
market?"
an
about
scare,
By II. C. ANDREAE*
Somebody said to me the other
day — "What is wrong with the
of
other
the
on
Such
and
purchase
demands
taken
first
hand
one
in
durables
consumer
Industrial Forecasts
the
on
expansion
PETERS, WRITER A CHRISTENSEN, INC.
10
The Commercial and Financial Chronicle
(1330)
Thursday, October 8, 1953
...
k
vived in communities, and
No Need for Shortage oi
Home Mortgage
War
Money
$58 Mi
The
dividends.
That
on
is
the
ings
and
far
secure
encing
building and loan associations, do the "pump priming
instead of government, by seeking to secure far more funds
than they have today.
it
but
savings banks must seek
isn't
are
experi¬
growth,
handsome
a
than
funds
more
they have today. They
and
only sav¬
Not
associations,
loan
and
mutual
home
the
in
market.
mortgage
correct the
to
way
dilemma
present
Urges private enterprise, represented mainly by savings banks
but:
enough. They
must do better merchandising, do
yet
great
attract
.
funds
more
invest
to
in
investment houses with no home mortgages. A hundred dolmoney
today. That statement is ties to bind them to the housing jars jn a savings association will
true in spite of the fact that mort- industry.
They lend on homes worj^ four times as hard as in the
gage recording totals and build- only if it is advantageous.
assets of an insurance company—
ing
permits
a part of the trouble lies in the 14 times as hard as in those of a
remain high. fact that too
high a proportion of commercial bank.
The
home finance now comes from the
in
latter institutions. Insurance com-
side"
the
areas
help,
some
and
and
40%
and the trade associations of other
segments of the industry. There
are
tremendous sums available
prob-
is that
its
occurrence
is
deter-
mined
by
need,
Been us'e
of
the
H.
Ben
high
to-
tals,
Hazen
some
say
that the short-
is
age
myth, but it is very real
and
purchasers
a
the
to
who
builders
disappointed
search for financing.
in
are
their
Cause of the shortage, where it
exists, is explained by the "pattern of the money market." That
that
means
funds
for
lenders
loan
field,
earn
to
whose
earmarked
home
the
able
those
not
are
more
net
by law
are
now
profit by
purchasing government bonds.
They expect to return to home financing when it again
as
shows
up
profitable.
more
mvnrn
•
u,nmo
„
J? LJL, ?!®
such lenders for their action. It is
the
private enterprise system, the
of management, to
the
business
which
is
$23 billion in home loans—
of
the
$58
billion total,
have absorbed, percentage-
They
wise, all the shrinkage in the pro-
for their
from the leaders
too,
and the
use,
individuals
others."
and
of
assumed
two
home
by
instituations which
are
shrinkage
those
None
was
field
for
lines
many
portion of loans held by "private of business who depend
that
the
upon
livelihood,
a
can
profitably participate in the
campaign—helping
some of their
of the home dollars earn dividends and proindustry—the mutual mote profits for all. Corporations
savings banks and the savings who now can earn nothing on savand loan
associations. Together, ings accounts in commercial banks,
part
permanent
a
construction
they continue to hold about 42%
can
of the total debt. If they held 60%,
carry
the
present
wisely
which
accounts
use
such
no
restriction
and
would which help to do home financing,
Retirement plans, depreciation re¬
serves and tax reserves deservie a
emergency
probably be nonexistent.
Proposed Remedies
self-interested
review
by
man-
Naturally every interested agements in all related lines of
group offers a remedy. Realtors business. Trade associations need
want a government-financed bank to get together and find
to kuy mortgages from all comers,
Home builders want it, too, but
ask that it provide some means
insuring that they can readily
secure large loans at modest interest and l°w down payment,
The veterans have some spokeswho
men
say
won't lend
on
"If
The
bankers needs of the realtor
GI loans, then let builder must result in
trouble
is
cessions
that
all
these
not
and
boards
of
retailers
things that go require a subsidy?
into homes—including their pay
Back in 1934 a plan
rolls. Some of them
already feel for reviving confidence
the pinch. Others will feel the
re-
sultant slump later.
Granted
Underbuilt
that
some
areas
areas
just
are
study
disclose
of
that
it
the
communities where
ance
upon
savings
as
loan
not
will
exist
there
and
is
associations.
in
reli-
savings
It
is
and
worst
in
territories wholly or
partially dependent upon life insurance
money,
and to
some
extent,
com-
mercial bank money. That is
logical. The former
group have prac-
tically
that
u
one
outlet
done
was
with
EVENTS
In
the
to
Eve?y
All
insured
association
States
participate.
Tho
exnensp
loan
and
United
was
of
simple
was
savings
loss
was
it
n
to
home
do
testify to the Treasurer of
loans
than
it
could
*
own
five
savings capital. No with-
an
corded
state
CANCER
Every
started
,
seventy-nine
was
investor
Federal
to
participate.
.
got
carpenters
.
,
jobs
-
and
,
and
sold property. Confidence
of Security
Lakes
Regional
more
increasing chorus for the necessity of
around
the
alleged growing
Russia's ability to drop an atomic
of
H-bomb
or
us
and render us completely
being whipped up almost daily.
military voices in this vein have re¬
impotent,
To
the
on
is
cently been added those of Defense Mobilizer
Arthur
Flemming, usually a very cautious and
of speech, and the Civil Defense
Administrator, Val Peterson, who can hardly
mild
be
man
in
put
the
cautious
President
although
we
and
Eisenhower
Carlisle
Bargeron
temperate category.
has
ruled
out
Federal
a
"sales"
tax
have "sales" taxes in the form of excise taxes.
now
"sales" taxes are politically unpopular and the
President,
recognizing this, has said they should be left to the taxation field
But
of the States.
The States do not call them excise taxes.
They are
plain sales taxes and the fact that the States have applied them
so
boldly is a commentary on the National politicians being so
afraid
the
of
term.
Your correspondent can
remember, indeed, when State politi¬
cians were afraid of sales taxes. It must have been a
good 25 years
when
ago
Governor of the State of Mississippi, Hugh O'Connor,
correctly, took the bit by the teeth and put through
a
if I remember
a
State sales tax.
tive
press
as
a
He
heralded far and wide by the conserva¬
was
man
of
courage,
who
man
a
above
rose
dema-
goguery and
realizing the revenue needs of his State, put through
"painless tax, one that hurt nobody." He did this against the
hue and cry at the time that a sales tax was
inequitable in that
a
the poor paid
than the rich.
more
Anyway, this man broke the ice and although he never went
further up the political ladder, I do not know that he had
higher
aspirations and he did not end up in political ostracism. As a
matter of fact, he is looked upon in
Mississippi as having been a
very good Governor.
However, with his breaking of the ice, sales taxes on the State
on the
municipal level have become quite widespread in this
country. They are in effect in more than 30 States. The penny
and
has
to
come
The
be
quite
Federal
they
medium of exchange.
a
Government,
has been levying sales taxes
Notwithstanding this plain state¬
too,
called excise taxes.
are
of
facts, the term "sales taxes" is still taboo with the Na¬
politicians.
•
tional
with
the
expectation
is that
"manufacturers'
a
the
tax."
Administration
This
is
one
that
is
coming
the
up
consumer
isn't
supposed to see as he does the sales tax.
Canada has a
"manufacturers' tax" as the base of its revenue
system. It made
possible a reduction in the income levy a couple of years ago and
also
incentive
an
It
tax
at
appears
perts, having done
tax,
will
investments.
on
this
time
that
tall
some
seek
the
Administration's
fiscal
ex¬
studying of the Canadian manufac¬
such
some
tax
in
this
country,
plan will be considerably publicized in the
the
and
process.
realtors
was re-
a
manufacturers' tax and this
same
opin¬
6
(J ftll«c.rsiiA
1953
'
(fewYork
m
,
.
29-Dec. 4
1953
'in
the
bomb
at
June 9-12, 1954 (Canada)
they
The
fronted
the
Republicans
are
willing
to
that
we
voting for
be
may
the
at
are
complete
you
won't find
any
new
presented.
taxes,
That
is,
Convention
with
the
..
m
to
predicament,
of
won't
of
what
find
them
year.
as
Russia.
scientists
President
whether
had
the
better
Administration,
not
cut
off
the
con¬
steam
Really, if what is said today about
developing
Truman
But this is neither here
new
Russia,
Sept. 22-26, 1954 (Atlantic City)
*
'
.;
:
National Security Traders Asso-
its
arises
irrespective
you
Russia's
of them than
the
bomb
and
without
our
ordering it dropped when there
was
need for it.
and
ciation Annual Convention at the
campaign
menace
brilliant
at
.
a
question
of
mercy
any more
Russia's power with bombs is true, it is the most ironic
chapter of
human history.
Russia would not have had this power without
no
Jasper Park Lodgq.
Hotel ClaHdge.
campaign
agitation
doing this in
Investment Dealers' Association
,
the
Republicans
our
Hollywood Beach Hotel,
Annual
of
tossing potential. But
brilliant
_
The Demo¬
year.
By and large, they have been in the
about
0f America Annual Convention
Canada
campaign
that
guise
(Hollywood, Fla.)
of
a
issue, notwithstanding the cockiness
.
Security Traders Association of
the
an
they have been presenting.
of
city)
'
.
New York Beefsteak Dinner at the
Antlers,
nov
sorely in need of
are
"sacrifice security for dollars"; similarly
they are in there pitching
inS„
crats
made.
are
happens that 1954 will be
so
Kv i
b <LoulsvlUe> Ky->
Nov. M
geniously palatable they
forefront
Association of Stock Exchange
Firms Board of Governors Meet-
normal
Builders
.
,
houses,
.
terers
by
supervision,
of every county had
corner
right
a
p
any
Society
Great
1A
°ct*
an
and
in income
produce
revenue
menace
It
Investment Bankers Association
so
invested,
inspector, a directive
any guarantee beyond that ac-
without
or
and
dollars
more
'
,
Conference,
per year.
0
Two hundred
million
requested for
after
that, not
and
years,
more
be
to
was
nhiAi
'
Analysts
satisfy.
investment was then made
with it, not
exceeding three times
drawal
reduction
time,
carefully disguised than
Field
1A
"
•
Cleveland
An
its
t,
f
in
invited to
needed
10%
same
ion is that it won't get any additional taxes
regardless of how in¬
enterprise, and protecting the taxplan
Investment
was
from
the
the
at
sensus
completely successful in achieving its
purpose, conserving the principles of private
paver
coming up with something that
expiration of the Excess
the
and
My purpose here is not to argue the merits of any tax pro¬
posal that may be produced. But the fact is that it is the con¬
of Washington political opinion that if the Administration
gets any increased taxes at all they will have to be even more
COMING
rp^ story 0f that pump
priming
experience should be more widely
known. It
The
Canadian
government
funds, and the United States (later it was to
home mortgages. The latter
HOLC) that it had calls for more
TO CONQUER
Y
most
revenue.
turers'
for
GIVE
fortheTthers^ ^
wrong
are
ample funds of mutual
banks
used
home
funds, but the plan would be just
as
good or better, if private enlikely terprise did the job.
shortage
does
in
answer,
to suffer.
A
or themselves instead of seeking
government aid—or do we mean
us—
but
taxes
So
ownership and home construction,
It
overbuilt, that is not the
was
Profits Tax
di-
rectors,
of all the
view to
a
permit
but
mos't"profitable."But""that""doesn't cal1 for more Federal debt, and
It is a great opportunity for a
help the potential borrowers, nor for more government in business, great business group to demonthe
manufacturers
of
building
Why should the housing industhat businessmen can do
materials, builders of houses and try—and that includes all of
with
will
con-
popular among
rather
cautiously last week into
important stories developing
in Washington in these dog days:
namely, that the Administration,
after having gone through a retrenchment, is
moving toward more
spending and increased, though different taxa¬
tion.
The Treasury experts, it is now certain,
are
working their expert brains to a frazzle
the
some
correspondent moved
what appeared to be one of the
ment
now
conservative
many
plans have two weaknesses. They
common
ground for mutual cooperation,
Of course this will require
some reviewing of policies by the
savings institutions themselves.
Some of the restrictions, born of
the depression, must be reviewed,
An understanding study of the
the
the government do it."
obligation
transact
need
some
certing
market
industry,
hold
s c o n-
not
housing
"in-
are
panies and commercial banks now
d i
lem
These two lenders who
in
not
others,
the
are
shortage
touches
the News
By CARLISLE BARGERON
Your
national and local advertising, and
.
shortage of mortgage
a
Ahead
tax¬
profit,
and
as well
as the grocer, butcher and baker,
felt the thrill and profit of revival.
actually showed a
the housing industry,
Hazen says, despite high rate
There is
Washington
payer
Association,
sporadic shortage of mortgage money, Mr.
of home building, there is con¬
siderable scarcity of funds for home building.
Holds govern¬
ment-financed bank to buy mortgages has weaknesses, since
it means more Federal debt and more government in business.
Commenting
in
with
it,
of
^
schedule—
of
ahead
nickel
every
million
States Savings and Loan League
Past President, United
From
by the government, and it
repaid
was
By BEN H. HAZEN
President, Benj. Franklin Federal Savings and Loan
Portland, Oregon
save
II
needed
citizens
again. When World
came,
the money was
began to
upon
Federal
on
spending
will
there.
not
The
be
effort for
based
the part of those who really know.
on
It
new
any
will
taxes
fear
be
of
based
domestic politics and in the belief of the majority of political
in Washington at this time, it will be denied
upon the
observers
same
nor
basis.
"
Volume 178
Number 5262
...
The Commercial and Financial Chronicle
(1331)
It
Federal Taxes:
Process,
Prospects, and Policy
By WALTER W. HELLER*
Professor of Economics, School of Business Administration,
University of Minnesota
reasonable
seems
to
expect
a
that the preparatory work for Administration,
opening stage of the legisla¬ expressed
lest
say
somewhat weaker economic situa¬
tion than at any time since the
this
we
are
far asi Federal taxing
as
in
now
processes
highly interesting and
a
Professor Heller describes
Traditionally,
concerned,
are
revisions
explosive situation,
even
The
following
two
statement
tax
Federal
on
appeared in
24.—Editor.
In
process
next
just
of
as
the
with
ing
Sept.
of
the
Federal
expenditure proc¬
its cycle each year
runs
certainly
as
the revolution
by
the
the
>
tax¬
sis
The
non.
may
either
the
of
head
the
of
same
time pro¬
to carry
revenue
House
and
which
Reed
not
policies.
relief
tax
budget
irresistibly
(3)
Dr. Walter W. Heller
revision,
both. Only
he
occasionally
very
taxes
New
the Revenue
balance
the
budget
but
dressing
something
given to
Acts
of 1945
reduction the
and
moti¬
just heard testimony
of the
on
THE
have
the
the
NATIONAL CITY BANK OF NEW YORK
Head
68
Office: 55 Wall Street, New York
Branches in Greater New York
Statement
of Condition
Branches
57
Overseas
of September 30, 1953
as
ASSETS
Cash, Gold
Due
and
we
find ourselves in
Agencies
present tax laws.
in fiscal
account in 1955.
additional
State
and
annually
offset
an
because
Items
Bills.
$5,388,818,951
.
$45,393,908
.
Portfolio
in
Transit
in
Securities
Reserves
310,876
.
25,771,408
19,622,500
14,091,700
.
with
Branches
6,991,902
.
for:
Unearned Discount
for
and
orher
Unearned Income
Acceptances
24,255,228
Federal Reserve Bank
in
...
.
2,269,441,871
and
Customers' Liability
Stock
*.
.
Accept¬
(In Foreign Currencies)
Real Estate Loans
9,600,000
.
23,115,099
Interest, Taxes, Other Accrued
Expenses, etc.
Dividend
Ownership
.
Due to Foreign Central Banks.
87,483,240
.......
Discounts
and
.
.
44,121,736
3,450,000
.
.
International
of
Banking Corporation
.
.
,
Other Assets
Capital
7,000,000
.
Bank Premises
4,304,326
........
.
.
.
$150,000,000
(7,500,000 Shares—$20 Par)
32,292,682
Total
Surplus
Total
Figures of Overseas Branches
are as
170,000,000
.....
Undivided Profits
,
$5,897,819,619
.
.
.
.
71,458,823
.
.
.
.
.
391,458,823
$5,897,819,619
.
of September 25.
$587,064,242 of United States Government Obligations and $14,853,500 of other assets are pledged
to secure Public and Trust
Deposits and for other purposes required or permitted by law.
tax
the
under
these
32,101,423
ances
479,811,589
.
1954
security
on
.
Less: Own Accept¬
Municipal Securities
(The $1Y2 billion
social
Liability
1,566,920,094
,
.........
Loans
our
.
Other Federal
of
against
as
.
Deposits
$1,384,298,290
.
ances and
Obligations
Other Securities
of
LIABILITIES
Banks
from
U. S. Government Obligations
(member
automatic rise of payroll tax rates,
also effective Jan. 1, do not count
Setting
Chairman
appear
federal deposit insurance
corporation)
of the Board.
President
Howard C. Sheperd
highly interesting, perhaps even only in the cash budget, not the
explosive tax situation, one which administrative budget.)
(3) An
a
James S. Rockefeller
gives every promise of illustrating additional $3 billion of revenue
nicely all the traditional aspects loss will be suffered if Chairman
of the
taxing
—with
Reed
the
of
Means
few
process and
aid
the
of
House
Committee
new
ones.
perhaps
Chairman
—
Ways
it
Reed carries out his determination
Dan
to
and
corporation income tax reductions
developing
Although
is
a
a
permit the automatic excise and
CITY BANK FARMERS TRUST COMPANY
to go
into effect on March 1, 1954,
spite of President Eisenhower's
in
Head
risky undertaking indeed to plot request to postpone these reduce
the future course of anything so tions. (4) Tax adjustments, reliefs,
and
revisions
for
as
tax
Office: 22 William Street, New York
Affiliate of The National
which
promises
legislation, the risk
have been held out and pressures
taking in the interest of
have
been
mounting could cost
clothing the bare bones of the tax¬
from several hundred millions to
ing process with the meat of tax
volatile
is
City Bank of New York for
administration of
separate
functions
trust
worth
State?nent
of Condition
as
several billions of additional
reve¬
policy problems now confronting
nue.
Allowing some offset for the
the country.
All I ask is that if
normal
growth of the economy
you happen to read these notes a
and
consequent increase in tax
year or two from now, you will
revenues—but prior to expendi¬
be a bit indulgent and let your
ture
reduction
below
the
1954
thoughts run along such lines as
"well at least he sketched the steps level—a prospective budget deficit
in the taxing process with reason¬
able accuracy, even
tions had
no
if his illustra¬
predictive value."
of
$10 billion
the
fiscal
through the steps of the tax¬
ing process, we should quickly re¬
view the political, fiscal, and eco¬
nomic setting within which tax
legislation is likely to be consid¬
years
or
looms up
so
1955.
year
for
Even if
one
that Federal expenditures
be cut to the $70 billion
level
conventional budget defiqit
of more than $5 billion may well
a
be in the cards for fiscal 1955.
To complete the setting for the
taxing process, one should also
look
ball
into
and
one's
economic
determine
ered.
crystal
whether
dent struggling valiantly to recon¬
cile pledges of tax reduction, a
balanced
*The
budget,
second
of
two
a
employment
could
delivered
is
likely to be
by
Prof. Heller at the Graduate School
of Banking of the University of Wiscon¬
flationary
sin, Madison, Wis., Aug. 27 and 28, 1953.
be intensified
and
therefore
stabilized deficit financing
lectures
Due
and
Banks
from
LIABILITIES
....
U. S. Government Obligations.
Cblications
of
Other Federal
-
.
a
deflation
stand
or
a
Municipal Securities
Loans
and..
Heal Estate Loans
Stock
.
Bank Premises
Other Assets
Total
.
$ 86,970,773
......
4,551,172
(Includes Reserve for Dividend $300,511)
16,001,430
6,159,160
and
.
Securities
Federal Reserve Bank
in
\
65,674,729
2,478,978
Advances
\
Reserves
Other Securities
.
1
.
Capital
,
,
,
Surplus
.
,
.
,
$10,000,000
10,000,000
600,000
.
........
2,609,570
.........
Undivided Profits
3,387,089
.
,
.
.
.
.
.
.
$123,164,288
Total.
.
.
11,642,343
31,642,343
.v $123,164,288
.
$12,493,629 of United States Government Obligations are pledged to secure
Public Deposits and for other purposes required or permitted by law.
of
whether there
which
and
Deposits.
1,106,198
and
dose
resurgence of in¬
pressure
State
$ 25,147,133
f
Agencies
that
long-expected recession really is
Among the controlling elements just around the corner. In other
of the political setting are these:
words,
one
should
determine
(1) In the White House, a Presi¬ whether the economy is in for un¬
of September 30, 1953
ASSETS
Cash
assumes
could
Before we pilot the first major
Republican tax revision in over 20
40 dif¬
tax laws.
system, apparently
tax
business and financial interests in
collections
Current
a
To handle the huge amount of
strongly fact-gathering
and
analysis re¬
necessity of re¬ quired to translate the myriad
balance of the tax proposals into a consistent
pro¬
statements
underscored
a
Tax
vating force.
Currently,
taxa¬
has
public
be
cor¬
entirely—and thus
loss
The
will
York
from the expiration of the Excess
(simplifi¬ Profits Tax and the 1951 indivi¬
cation) Act of 1944, and will play dual income tax increases next
a
large role in the forthcoming Jan. 1. (2) An additional
$3V2 bil¬
Revenue Act of 1954 or 1955. Only lion of
revenue will be lost on this
Income
tax
the
editorially to
"crisis" take the form of
was
attention
ferent provisions
"taking
"eliminate
Tax Payment Act of 1943 and the
1948
excise
Secretary of the Treasury
Humphrey
and
Under
Secretary Marion Folsom in their
(and. to
by
Against this political backdrop,
we find the
following fiscal situa¬
dividing the spoils of tax reduc¬
tion: (1) The administrative bud¬
tion.
Revenue
and
inflationary
get, to which executive and Con¬
pressures were the prime movers
gressional tax policy is still gear¬
behinds the Revenue Acts of 1940,
ed, is developing a $4 billion defi¬
1941, 1942, 1943, 1950 and 1951. cit
for the current fiscal year; this
Taxpayer demands for structural deficit
figure includes the $1V2
revisions
spawned the Current billion revenue
in
of
that
whole series of technical revisions
—the Ways and Means Committee
a
George
written Presidential message
their long-accumulated grievances
tax
Individual
pension and retirement plans, and
so
forth.
One may also intimate
revision
blueprint for
a
system
tax
tion.
At
whopping surplus"). (4)
At the Senate Finance
Committee,
a
membership traditionally sym¬
pathetic to the pleas of various
1
mounting
for
the
suggest
that
only
produce
revenue
does the
modified
preceded
House
led
to
poration
pressures
or
White
Mr.
for
pressures
overall
private; business
laws, and of at the
"Times"
irresistibly
more
for
viding sufficient
sis
cri¬
mounting
or
of
balancing the
grow
out
an
plan, including
taxation—sketches in the pre¬
vailing budgetary and economic
presents
of
the shackles off business"—a the¬
phenome¬
sis
work
investment, of elim¬
inating discriminations in the tax
reduction
cri¬
a
sometimes
Ways and
Means Committee, Chairman Dan
Reed pledged irrevocably to tax
tends to be
of
undertaken, the leg¬
re¬
this tax in the frame¬
of
private
the
•
process
smore
a
—
background,
climate
and
out
earth
around
sun,
and
duction
away from in¬ gram for presentation to Congress,
philosophy and fiscal dividual
and
corporate
income the
Treasury has a special Analysis
economy,
and adequate national policy of the Administration, and taxes and toward excise taxation.
Staff headed
by Professor Dan.
defenses.
Revenue
(2) In the Treasury, a presents a series of specific rec¬ Internal
Commissioner
team headed by Secretary Hum¬
Smith on leave from the Harvard
ommendations
as
the
proposed Andrews has promised tax simpli¬
phrey dedicated to a tax philoso¬
basis for legislation. It is fair to fication.
Continued on page 31
Throughout the present
phy of providing a more favor¬
able
contrast
which
issue
our
Government's
ess,
budget
The first lecture
prospects.
tax
on
tolerable limits."
is the second
by Professor
lectures
Heller
major
policy by the Secretary of the
Treasury.
Usually the Treasury
cludes, through Fiscal Policy and Taxation, "we have a power¬
ful weapon to limit deviations from
high and stable employ¬
of
when
tax
origination and presentation to Congress. Discusses proposed
tax changes, and points out the
powerful role of the House
Ways and Means Committee Chairman in tax legislation. Con¬
ment to
are
islative process opens with a
pres¬
entation of the Administration's
and methods of their
current taxes
has been
the
tax
system
January is al¬ stifle incentive and initiative.
Korean
War
broke
out,
but ready in full swing this summer.
Specific mention has been made
whether it will justify or even re¬
Within the Treasury itself, it is of more
flexible depreciation de¬
quire deficit financing to counter¬ not hard to
conjure up a picture ductions, studies of the rate and
act it is not yet clear.
of
feverish activity
on
the tax holding period for capital gains,
front.
In vetoing the movie tax the tax treatment of
income de¬
Executive Policy Formation and
repealer on Aug. 6, the President rived
abroad, the tax treatment of
Presentation
tive
promised to recommend later
Asserting,
concern
11
(member federal deposit insurance corporation)
Chairman
of the Board
Howard C. Sheperd
would
by Federal deficits.
f
Vice-Chairman
of the Board
Lindsay Bradford
President
Richard S. Perkins
12
October 8, 1953
The Commercial and Financial Chronicle... Thursday,
(1332)
Agreement as a special the world from dependence upon essed minerals aire on the Free
government, without at the same List. The ad valorem equivalent of
subsidies.
The basis for intergovernmental time destroying the very business our duties has become so low that
they have little restrictive effect
commodity agreements was laid we are trying to free.
on
down in 1948 in Chapter VI of the
imports.
Soviet Tactics Handicap to
Other
Havana Charter for an
Interna¬
proposals
involve
re¬
Freeing International Trade
vision of the Federal tax struc¬
tional Trade Organization. A pro¬
Our problem of freeing trade ture with
respect to the mineral
posal for an International Trade
and industry throughout the world industries.
While extractive in¬
Organization was not ratifed by
the Wheat
The Threat oi
Hodgepodge
Trade Pacts
By FELIX E. WORMSER*
Interior
Assistant Secretary of the
vention in and control of free
this
trading, and
raw
I
know
that
of
all
have
you
Commis¬
ther.
cial
sion
For¬
on
eign Economic
Policy. 'This
was
measure
recommended
the Presi¬
by
dent
and
was
welcomed
everyone.
by
The
is a big
one,
but it
needs
doing.
which stimulated
emergency
expansion of capacity still fur¬
Along with this a more de¬
termined effort was made to acmaterials within the stra¬
mulate
Now that defense
lead and zinc, includ¬
tegic stockpile.
needs
for
stockpile requirements, have
been met, we face
burdensome
surpluses and declining prices.
ing
war
not
are
we
to
particular type of
commodity
agree¬
any
international
t h e
of
Felix
t.
Interior
have
Wormser
been
IvVvifprl f0
par_
ticipate
you
in
the
undertaking
and
be certain that all avail¬
may
able energies
will be thrown into
the task.
This
the Commission
with all com¬
modities flowing in the stream of
study
deal
must
by
broadly
international
commerce, and the
certainly will have an im¬
minerals and metals. Work
results
pact
on
will
cover
prices brings to the forefront once
either
now
find
or
manufactured
be
not
in
This,
markets.
new
seek
ments
to
solve.
may
treatment
prove
I
the
fear
than
embark in¬
worse
reestablishment, of
the
and
Metal
London
the
should
Exchange
major
materials
raw
international
into
not
did
problem
*
over
pass
can
enter
that
trade.
T h i s
we
may
be travelling
down the road of no return. Even
abilities,
concern
live
under
industrial cartels either
vate
nomically
us .so
domination
by a single power as
being made to negotiate
are
agreement
on
cotton, wool and rubber have
require
patience
to build up a
to
by
cluding
many
governments, in¬
our own.
Declining Prices
In
talking with
a group
ers
nowadays one
problems raised is
tin. Agreements
on
leads
This
to
me
the
me
just
I
important
as
do
issues
moral
not
my
survive
are
and
at
next
stake
are
freedom
can
ourselves
ask
kind
of
but we need to
constantly
what
world
a
is
increasingly
our
complex society,
of min¬
first
pluses and declining prices.
be
may
that
suggestions
held
This
miners, but one which faces all
producers of raw materials
happened to lead and zinc.
*
Following
duction
*From
tefore.
World
at home
an
the
address
American
War
II,
and abroad
by
Mr.
pro¬
was
Wormser
Min>nr. Congress,
Seattle, Wash, Sept. 21,
1953.
intervention
ernmental
They lead to
production,
quotas
gov¬
and
con¬
restrictions
export
of
imposition
the
and
removed
of
controls,
and
from
the
exchange
and
the market place.
The
Paley
tribute
to
the
Commission
doctrine
of
paid
inter¬
national
to
the
development
minerals
of
and
and
pro¬
metals.
devoting study to this subject
are
within the Interior Department.
Another
the
proposal advanced is
The Sugar Act
of quotas.
use
of
establishes
1948
duction
of
system
a
controlling domestic
quotas
pro¬
and'
J'
.
Quota System Objectionable
As
frowned
We
stances.
policy
quotas
on
exceptional
under
cept
national
of
matter
a
have
we
ex¬
circum¬
committed under
are
do
irreparable
only
to
the
but
to
much
damage
farmers
of
our
like¬
not
themselves
economy
de¬
pendent upon that one-seventh of
the
Nation's
purchasing
power
States
United
the
in
re¬
The report by
Interest"—popularly known
Bell Report—does
as
the
not discuss the
stopping
long
rials
steady supply of mate¬
a
on
cannot
an
free
basis.
economic
We
-
hope to hold our place as
world
needed
of
backbone
industrial
the
at
American industry will
run,
require
if
competitive world prices.
metals
home and
production
minerals
and
abroad.
unfair,
abroad
both
.
<
achievement of
a
free economy.
hope that these can
or
neutralized.
time
I
believe
difficult the
make
I
be eliminated
Over
it
ward
toward
a
moving
greater
for¬
a
period of
possible to de¬
overnight. In the meantime it
may be necessary for/the Federal
pen
freedom
means
ducers.
protecting
domestic
pro¬
exceptions the
metals and minerals are
With
unwilling
or
meet
to
com¬
petition on fair and equal terms.
However, unusual measures may
or
any
other
industry should not look upon re¬
strictive
devices
-
permanent
as
at parts of a free enterprise economy.
The really big task ahead is one
conditions
and -many
which
the support of any one un¬
means
able
The portant that mining
only policy the United States can
follow is to encourage
mentally opposed to subsidy if it
materials
raw
to
—
proposals advanced sug¬
gest some form of direct subsidy
obtain; be
required to cope with immed¬
iate problems, but I think it im¬
cannot
we
industrial
the
turn
traffic
escape
a
Government to furnish some kind
of
upon
Tariff
the
the
and
by the farmers. And velop realistic policies to govern
abroad, in the raw materials pro¬ our economic relationships with
ducing countries
a
similar
too other countries. This cannot hap¬
Communists
of
under
or
price support, devices which
far larger supply of met¬ have been
employed in the case
minerals than is being
of the mining industry in times
produced in this country. In the of
emergency only. I am funda¬
quires
als
represented
rapid relaxation of controls might
precipitate ' declining prices and
President
the
by
Commission
Other
expansion of industrial pro¬
The
duction
alternatives
put in their place would
;
be estab¬
can, or course,
recommendation
economy.
living
standards,
might permit the of assistance to the domestic min¬
walk in without ing industry in order to keep it in
the
Public
good working order.
Advisory Board for firing a shot.
Our problem is that of building
Mutual Security entitled "A Trade
Of course, the first proposal ad¬
and Tariff Policy in the National a new bridge without completely vanced
is to raise tariffs as
a
an
Quotas
lished
shall have if
we
grow
wise
commodity
agreements
.the Wheat Agreement lowering
example for the metals and which in
minerals to follow.
programs.
point
back
constructive
and held up
as
throughout the world. We are, of
course,
familiar with what has
ploration,
duction
The
of
few
subject of international commod¬ without creating chaos—g freeing duties on
ity agreements, except to refer to of ourselves and business around low, and many ores and unproc¬
shaping policies that will con¬
to,
rather than detract
tribute
.
without
they represent the worst in
sur¬
is not only a problem of American
rep-
for
clause procedure.
They are in¬
where we tended to be
temporary and re-ex¬
turn always to the government for
amined from time to time. As you
a solution of our problems—where
know, the Tariff Commision is
we no longer dare to face the haz¬
conducting a study on lead and
ards of the market place—but live
zinc as requested by both House
in
the
serenity of a sheltered
and Senate Committees.
",
reach
we
the economic.; of
as
how
see
in
inevitable
this
Perhaps
businesses.
and
thought—our
There
smack of state trading completely
of the
that of
the
systematically designed
encouraging the ex¬
a
vehicle
expanded trade among the nations
eco¬
morally.
or
National Minerals Policy
Our
"
been discussed from time to time.
trol.
Problem of Surpluses and
that
equitable and that it does not
recent
of the free world.
_
ed
who' contend
present tax pattern is not entirely
and per¬
system of
-
resort¬
un¬
those within the mining
are
industry
erals?
will
severance
as long as we
Must Develop Potential of Our *■
by points of view ■
Resources '
and
practices " that
threaten
to
similar agreements be negotiated
censes, quotas, embargoes, dump¬
;
We must do our utmost to dis¬
wash away its very foundation. •
ing, concealed regulation of ex¬ to cover lead and zinc copper,
cover and develop the full poten¬
If we insist, however, upon a
ports and imports, Government and perhaps other minerals.
\
tial of our own resources, but we
too
rapid
liberalization of our
monopolies, State-controlled econ¬
must
nevertheless
continue
to
Freedom of Market Place
foreign trade without opportunity
omies, State trading, and Stateto make readjustments, we may look to foreign sources of supply
Threatened
subsidized trading.
I pick these
for many mineral raw materials,
meet serious difficulties at home
from the list with a certain sense
Frankly, this approach to the
and
abroad.
An
indiscriminate perhaps in increasing amounts in
of
satisfaction, because I have solution of problems in interna¬
light of our rapidly expanding
been saying for a long time that tional economies worries me. To lowering of our own tariffs might
produce
substantial
injury
to economy.
free
trade will
remain a
myth those of us who believe in the
Any policy we develop must
until something is done to abolish freedom of the market place, such many segments of our economy.
Abandonment of our agricultural contend with many competitive
or
neutralize the hodgepodge of agreements are abhorrent. From
practices
now
plaguing
world
price supports program overnight,
inconsistent
practices and' con¬ the businessman's point of View
commerce
which we believe are
now
the
industries,
measures,
ency
days. We did not
the threat of world
an
barriers
these
of
imports * of sugar.
prove
a
wholesome - influence Should we
apply similar controls
of throughout
the
Sterling
area.
to
the domestic production and
regulating prices,V fixing produc¬
But, with an Iron Curtain drawn
imports of certain metals and min¬
tion and marketing quotas, estab¬
across
the face of the world, it
much in prewar
official
trade
there
of
because
nature
the General Agreement on Tariffs
they may prove 20
years, we and other nations of
and Trade not to use quotas. There
lightly the repercussions caused exceedingly difficult to terminate. the world have traveled along the
are
Cartels
exceptions primarily to pro¬
by Government are not
by the violent fluctuations in the
road of more and more govern¬
tect
agricultural
price
support
prices and the volume of the fundamentally different from pri¬ ment participation in our lives
problems
national
ulation,
cealed
usual
path
again the question of intergovern¬
But even leaving aside the ex¬
mental
commodity
agreements. though they may be planned as
igencies of war and its aftermath,
No one concerned with our inter¬ stop
gaps, as temporary emerg¬
we
must realize that for the last
living standards, currency manip-- forts
inconvertible currencies,
inflationary policies, cur¬
rency devaluation, multiple cur¬
rencies, exchange controls and li¬
our
There are some improvements.
recognize the problems which The gradual elimination of State
commodity
agree¬ trading by the United Kingdom
I
national
minerals
policy must strengthen our free
relationships with the rest of the we do
today, and it was not nearly
world and I am hopeful that it
enterprise system. Insofar as it lies
so essential that we take seriously
in my power to do so, I intend to
will bring this Nation's foreign
the economic woes of other coun¬
and
domestic
economic
policies tries of the world. But now that follow the * fundamental philoso¬
into an
organized matrix.
The the world is divided into two. phy of freedom for the mining in¬
dustries. Indeed, what better or
duties of the Commission as pre¬
great camps, it is important. that more
timely, or more thorough¬
scribed by the 83rd Congress in
wherever possible we prevent the
going, American premise on which
Public Law 215 are well worth
collapse of economies of our free to erect a sound mineral
policy.
your while reading.
It is a long
world colleagues. It is for this rea¬ We have been
literally swamped
list and it will impress you with
son
that more serious considera¬
in recent years with Government
the Herculean nature of the task.
tion is being given to this problem
regulation of our affairs.
Some of these I want to mention
of stabilizing violent fluctuations
at this time for I believe they are
I believe implicitly in the cap¬
in the price and volume of raw
of great significance to the mining
italistic system, which means that
materials. One of the devices be¬
I am, basically, a free trader. Free
industry.
The Commission has been in¬ ing discussed in the intergovern¬ enterprise and free trade mean
mental commodity agreement.
one
and the same thing to me—
structed to consider and report on
The International Wheat Agree¬ and they go hand in hand with '
the
following matters: interna¬
tional agreements, cartels, costs of ment was a forerunner. An agree¬ the free way of life which we
production
and
pricing,
labor ment on sugar has just been ne¬ cherish and which communistic
practices and standards, general gotiated in London. Persistent ef¬ aggressors despise and attack. To
all aspects of our trade
have had to re¬
trade with
we
materially
international
prices in the United States, indi¬
rectly, it is of tremendous concern lishing and
managing buff e r
to us. This problem of burden- stocks, we may not only be un¬
s o m e
surpluses
and
declining dertaking a task beyond* human
partment
potential,
strict
of
buildup
.
We in the De¬
and
production
Soviet
special treatment through inter¬ restrictions. All of which lead to
governmental commodity agree¬ further governmental controls.
cerned
tin
the
enjoy certain unique
now
benefits,
tax
ment.
job
with
collective efforts to
dustries
Paley Commission concluded
ment, but does constitute a recog¬ and of itself, has been a majc»r that special provision must be
nition on our part that the diffi¬ factor leading to such things as made within the Federal
corporate
culties under which some primary unfavorable balances of trade, de¬ income tax structure to meet the
commodities move in international pressed. and
inconvertible
cur¬ unusual problems confronting pro¬
trade may, at times, necessitate rencies, State trading, and import ducers of mineral and metals. We
true of tin. the disease.. When we
directly con¬ ternationally upon the
likewise
is
This
While
our
Goods particu¬
by the President under the Re¬ the Soviet bloc.
ciprocal Trade Agreements Act. larly from Western Europe, which
This does not commit the United formerly
flowed eastward must
ian demands.
rean
In
Trades, popularly known as GATT
trade agreement entered into
to meet pent up civil¬
Then came the Ko¬
up
course,
minimize
States
stepped
with great interest
events leading up to the establish¬
ment by the Congress of the spe¬
is, of
VI of the
incorporated into the viets.
—a
materials.
been watching
was
of government
the tentacles
from
made more difficult
Havana by the aggressive tactics of the So¬
However,
General Agreement on Tariffs arid
markets and production. Scores
an
warns
Chapter
Charter
countries
of
effective.
become
to
indiscriminate lowering of our
tariffs might produce substantial injury to many segments of
the economy.
Sees, however, need of important mineral
state
number
sufficient
a
facing
readjustments in the mining industry, attacks international
commodity agreements as leading to undue governmental inter¬
Wormser, speaking with reference to difficulties
Mr.
of export
use
from
the
long-range
mining industry
and
Government
Federal
American
traditional
our
:
concepts. The
—
job for
for the
working
conscientiously—is that
enduring miner¬
als policy, sound in every aspect—
sound in that it will provide for
the steady exploration and devel¬
opment of our mineral resources;
sound in that it will
keep our
competitive economy functioning
together
of developing an
without substantial props from the
Treasury; sound in that it will* be
the
in
over-all
national
sound in that it will be
a
interest;
continu¬
ing example to the world of what
free
men
ard
of
tional
move
can
to
economy
in
do
a
increase
living,
to
productive
their stand¬
increase
opportunities,
educa¬
and
to
drudgery from human
re¬
occu¬
pations.
This
constitutes
challenge to
a
American leadership. We must pot
be
forever
on
the
defensive,
adopting makeshift
tion
to
nation
offset
does.
direction
freedom
unique
our
this,
courses
something
We
that
must
will
of
preserve
we
enjoy
under
political system and
actions
convince
represents
the
strength of civilized
ac¬
another
move
others
in
a
the
our
by
that
greatest
man.
'
''
Volume 178
Number 5262... The Commercial and Financial Chronicle
The
Listing of Securities
Exchanges
both the exchange and. the SEC which are the highest of any ex¬
substantially the same informa¬ change in the country. The New
tion. The
variation
as
between York Stock Exchange is the larg¬
exchanges is not in the type of est in the country and should
application, or in the physical ap¬ have the highest standards. If we
pearance, but it is in the standards have any difference of opinion
which the Exchange requires to with them at all, it would be that
be met as a prerequisite to listing. their
standards
are
not
high
enough. However we have a self¬
en
By MARTIN J. KEENA*
Vice-President, American Stock
securities
Stock Exchange
Requirements
describes the procedure and processes of listing
exchanges in New York. Points out listing
any exchange in U. S. requires a simultaneous
on
registration with Securities and Exchange Commission.
In
-
ottt-lhe-couiHfer hading.
:
As I
listed
•
v*
balance
and
the
to
What
mitted
of
securities,
atd-
are
termed
is
in
that
main sub¬
which is
listing of
ject,
the
:
t
:
'
and then
:
1
1
trad¬
ing privileges,;
I
might give
you
little
a
statistical
<
background on 7
the
exchange.
The
'■?:
Ameri-
of
change
been
changed
Mart,n
....
Ke^na
wordJ fW X°
«rbt. |«e'.ard
Stock Exchange interchangeably
will know it
the
all
In
from force ot
is
the
to
„
^ '
nnmn<4n„
the
spedmen
times
given you a printed sample of a
ours.
We
the
are
the
only
As
offices
of
our
business
the
with
public. The balance of
members
bers
bcr
breaks
into
down
firms
the
of
513
also
These member firms have
coun-
and
cities
417
District
the
addition there
foreign
826
of
are
46
states
Columbia.
In
the
Columbia,
which
District
illustrates
i
We'provide
900
about
of about
stock
and
bond
*
•
x
v
o
...
Listed Securities
the
trade
in,
900
securities
is
about .65%
wMtms
it incorporates the
by
reference,
which
of
the informaa
application, so that there
necessity for making the
company repeat all that information
in
the
listing
application.
a
long form applicascratch and
prepare the entire application.
In the physical and mechanical
form of the listing
applications
there
is
not, much
difference
whether it is an application for
the New York Stock Exchange,
However, on
tion
Issues
for-
they
a
start from
by Mr. Keen* before tk«
i ■■.
.
34,208,724.81
.
*
•
•
•
^
2,378,254,576.57
Accrued Interest Receivable.
.
13,904,761.06
Customers'
49,845,429.44
Acceptance Liability
Banking Houses
Other Assets
.
31,911,697.26
.....
.
.
5,428,665.80
.
$5,553,147,256.83
LIABILITIES
.
.
.
.
$5,046,752,210.82
.
...
.
.
15,276,783.00
Reseryes—Taxes and Expenses.
Other Liabilities
.
.
..
Acceptances Outstanding
Less: In
.
25,026,839.93
55,021,300.97
.
Portfolio
Capital Funds:
United
States
has
to
4,552,971.78
-
>
.
«
A'
-
(7,400,000 Shares—$ 15 Par )
Surplus.
.
.
L
v
'
.
i'
r
$111,000,000.00
Capital Stock.
•
¬
I'
219,000,000.00
.
Undivided Profits
U
53,375,599.07
.
383,375,599.07
$5,553,147,256.83
simul-
Educatiw'rcpre- ™i<ier the Securities Exchange Act
uS:.
N, y. c«ty, Aug. 26, 1953.
32,247,494.82
_
.
taneously register it with the SEC
ting- the American Securities Business- Of
1934.- • The registration , form
sponsored-by the Association of Stock -which they file, which is in most
Exchange Firms. Investment Bankers AsFr»rm
1ft
ic
thf»
samA
no
sociation
of America, National AasociaCHSeS *Orm 1U, IS tne same no
tion of Securities Dealers, American Stock
matter What ' exchange the ap-Exchange and the New York Stock Ex- plication is being made to.
'
•
we
sen
wersity,
...
.
the American Stock Exchange or
any
of the other exchanges. In
addition, every company listing
fully its securities on any exchange in
that
are
no
the
♦Aj*
226,059,955.86
.
York
clipped right on to the applicaThat
prospectus
contains
listing
eigft corporations. These securities
have an aggregate market value
of approximately $17 billion as of
the last year-end computation.
Of
New
tion that would normally be in
the
and
.
Foreign Funds Borrowed
and
substantially all
marketplace for
American
800
.
a
the
tion.
of
point I make as to our being
national securities exchange.
Mortgages
Loans
Deposits
is
26 offices in 10
Stock
and
under the 1933 Act
and
we
prospectus
Approximately
Exchange
located in 137 cities,
are
32.' .states
.
formation
1,500
over
in
.
.
application,. The short form
listing application itself contains
only a few items of general in-
countries.
American
tickers
of
work
net
in
316,247,709.33
form
Exchange.
offices
Other Securities
1,110,553,447.32
.
Municipal Securities
Exchange, and I believe all
0f the other exchanges, will permit the company to file a short
mem-
are
.
Obligations
stock
York
try-wide
SE^
situations
mem-
New
^tock
Comoanv
of making a puboffering, and as a result of that
registration, they have a prospectus
prepared
in
accordance
with SEC requirements which is
comparatively up to date. In those
the regular
firms, most of whom
member
a
State and
ll, 386,732,289.38
.
lie
general
associate
the
and
at-
the samples you
where
is
fD,- the purpose
to
no
pectus
the
among
with the
figures,
we
have 499
regular members and 213 associate
ipembers. The regular members
include about 160 specialists who
do
-
That
U. S. Government
.
a
nation-wide.
are
with
one
Cash and Due from Banks
is
application
short forra
^th^
compa^Hveiy Tftent
STLs* ,4®
exchanges
facil-
two
branch
and
members
the
Haye
which the ticker service,
itips
The
Tinted tit.tS tacheti
United States.
tho
in
RESOURCES
hand,
th^ «« AmericanStock Exchange.
New York Stock Exchange
a"d
in
STATEMENT OF CONDITION, SEPTEMBER 30, 1933
m^eria' of thal type in^ts physi-
N„7 Y°W
OF NEW YORK
CITY
Their volume of caj an(j mechanical
form, I have
other
exchanges
OF THE
o„k
long form and a short form listing
excluding application. The long form apthe New York Stock Exchange,
plication is the type where the
our volume of business in shares
company i has not had a recent
averages more than the combined registration under, the Securities
volume df all of the other 18 Act of 1933. So the
company is
regional exchanges in the United required to : submit a ' complete
States, so we are by far the see- outline
of
all
the
information
ond largest. As a matter of fact, called for
by our reauirements.
On
NATIONAL BANK
for
and in general
^^io^LuLT
tfm^ours3
four
additlon
+-
largest exchange in the United States. The
thretTto
to
Continued
of shares multiplied by market price
BANKING
they give a comprehensive statisttcal outline of the company.
second
Stock Exchange.
statements
audited
.
stocks
earning
In
power.
equipment,
rights and
participations, submits
at least thre years,
«
throe
demonstrated
products,
dividend
"
-
__
_
habit—is
listed
have
we
no
■
financial
——I
only tms year,
you
had
ment,
condition
of
capitalization, voting
has
f? *£
occasion
which at the time of listing have
distributing prod¬
ucts, its properties- plants, equip¬
and
—
name
business,
and method of
incidentally,
our
the
our
[ its history,
»
Stock Ex¬
can
Stock
have no minimum
standard as to earnings. We take
each case on its own merits. Upon
we
un-
4:4;-
;
,
American
the
on
given each of you a set
original listing : require¬
ments and sample original listing
'applications. You nan look these
-over at your leisure. As you do,
you will notice that the require¬
ments call for a listing application
in which the company describes
I have
■
Here
Exchange
"tim-
will discuss the
we
jv listed securities.
and
securities
unlisted
fv,
i
$1 million net per year for at least
the past three years.
their
Exchange to meet with you^ .I - listed trading; privileges." <1- will
thought- that before I started on'first talk about listedr securities
my
because
million. The
company must have a
demon¬
strated earning power of at least
other
distribution
the first of the representatives of the American Stock
am
motive
lower
13
those cases the prin¬
cipal criteria is first, is the com¬
pany fully financed to get on a
must be met in order to qualify a a size
requirement. As I under¬
sustained earning basis? A req¬
security for fisting on- that * ex¬ stand ' their requirements there
uisite is that they must prove
change.' They have requirements must fee at least $7% million of
as
to size, national prfeminence, market value of the security be¬ adequate financing. In a mining
earning poweY, extent of public ing listed, that is the number of Company, for instance, we would
Holds
American Stock Exchange, with its listed and unlisted privilege requirements, furnishes a proving ground for New York
Stock Exchange stocks. Discusses regulations under SEC Act
regarding unlisted trading in stocks and the competition of
.
ish
must be at least $7t£
standards
are,
the
words, the New York more they infringe on our field
Stock Exchange being the larg¬ for new listings.
.
est exchange in the United States
Tp show the differences, the
has the highest standards which New York Stock Exchange has
stock
on
of securities
-
Exchange
New York
Mr. Keena
-
(1333)
***,a t^pany listing its secunties on any exchange gfvejs to
United States Government and other securities carried at $510,737,086.00 were pledged
to secure
**
'*
public and trust deposits and for other purposes required or permitted by law,
r
.
.
'
,!'t'
'
Member Federal Deposit
»
1'
i
*
Insurance Corporation
:
:u
!v
■
.
on
page
26
14
The Commercial and Financial Chronicle
(1334)
Solntion oi Mortgage
Problems
of Brooklyn
reduction
experience of his
This
tation of interest rates
it
amor¬
their
with
equ¬
down
it is
believe
I
selected
the
for
title
this address has certainly credited
me with wisdom far greater than
I
supposed
ever
being
I
had.
Far
from
Solo¬
a
of
cost
house goes out as wages
a
but
workers
honest savings
mediate
poor
banker
trying
to make
In order to contribute to
dollars for my
institution.
I
sure
am
will agree
you
that
no
in
person
vast
one
•
our
est
tion.
The
Frederick W. Jackson
well
as
is
attempting
I'm
point
make
of
evidence
loans
FHA and VA
The
best
must' in¬
and
conventionals.
as
solu¬
a
be on the broad¬
basis
possible
clude
possibly
have
•
his lending must
industry
could
the de¬
of
his
community
through providing the means for
building new homes, a mortgage
lender must recognize the fact that
velopment
that
bank
a
to
them
for
to
buy
increased
This
the
the
of
its
to
mort¬
equity in his home of between
loans.
(Horrible Thought!!)
25%.
'
•
However, it soon became
To us, this represents firm evi¬
the
Now, how about
matter of
We
continued growth of the com¬
and
munity in which
Now let
The
mortgage lend¬
a
business.
does
er
us
what that
see
mortgage
means.
by a lender in his own community
provides the basis for that order¬
ly growth; but it also does
other things.
it
First,
creates
many
for
customers
the other services the bank offers;
and it also is
a
of increased
source
Such
by
loans
all
bank. to. veterans
my
since the inception of the GI loan
in
1944
is
20,873-loans
dollar
total
of
$210,716,000.
program
invested
money
made
of
for
a
This
figure
is
about
$60,000,000
than the Veterans Adminis¬
more
tration
has
lending
loaned
in
its
direct
throughout
program
the
country.
have
we
supported
a
ing in the community that a bank
knows best
namely, its own
home town—is, in my opinion, the
—
best
very
aid its
that
way
bank
any
growth
own
well
as
can
the
as
gage
how
of
very
our
a
survey
mort¬
that the
amount
family the first
their
to
year
durable
aver¬
fami¬
new
$1,660
This
goods
the
course,
in
months
national
arrears
averages
1,000
over
items.
new
—and
the
that
expenditure
million
when
penditures
On
homes,
year
a
totaling $182,-
figures, it should be
our
has
broadest
have
support
been
possible
heard
of
our
support
in
sense.
from
percentage
loans
such
of
I
these
make
be
purchased with 10%
to
when
as
,
entails
pursue
find
to
their
own
sound
:
it
us
equitable
ceiling
obviously
appears
establish
to
interest
on
nation-wide
a
on
without
basis
position of such
in¬
urban
communities
It
should,
service
to
a
Of
money
as
all
made,
and
you
for
a
add
other
scores
basis
of
means
of
a
well
half dollars
in
the
goods
ex¬
and
services right in that community,
the
figure rises much further.
*An address by Mr. Jackson
give
the
79.
acquired 11
at
a
GI
experience:
loans
we' have
have filed claims
we
of
you our
In
addition,
more
we
before the
Jersey Home Builders Association
Fail
Conference,
Newark,
New
Jersey,
September 23, 1953.
have
profit without
a
the
period
alloted
by
the
VA
were
longer than the 15 days presently
allowed.
of
'
'
But just think of it! This
figure
90 loans reduced to claim or
rep¬
resents only four one-thousandths
of one percent of the total loans
made to veterans!
be
course,
We
■
the
holy
device
count
which
feel,
of
a
do
the
tend
his
that
local
own
Veterans
World
ans,
most
flock
first,
far
the subject, of
got
interest
the
idea
from
home loan program
happy
the
as a
time
rate,
ff.;.
the
you
-r.
4%
one
has
,
ever
as
became
istic
in
ing
costs
the
from
page
the
right
should
want
and
able
are
afforded
be
home they
the
buy
to
to
but
carry,
for which
they have been unable
to
the
amass
presently
required
high down payment.
In conclusion, I want to
empha¬
is not blowing
its own horn. I have merely cited
certain of our experiences which
I believe
might be of value to
size that my bank
lenders.
other
minded
as
we
mortgage-
Being
are, we
feel the VA
should be
and FHA loan programs
sound investment
program for a lender—not a me¬
dium by which lenders can in¬
regarded
as
costs
crease
by
device.
And
phasize
and home
to builders
I
discount
unholy
the
buyers
home
a
also
to
want
em¬
that sensible and sound
mortgage
lending cannot
remotely be considered infla¬
that if a lack of money
building loans and permanent
mortgages causes the building in¬
dustry to grind to a halt, the na¬
tionary;
for
tion is in for another serious eco¬
nomic
disaster.
8
the
time went
Manufacturing
Company
Analysis
—
—
Co., Inc., 1528 Walnut Street, Phila¬
Co.—Memorandum—G. A. Saxton & Co.,
was
Piasecki
15
.
;
Helicopter
Broad
Street,
Corp.—Analysis—Eastman,
New
York
5,
N. Y.
Also
& Co.,
Dillon
available
are
analyses of Garrett Corp., Bettinger Corp., Bangor & Aroostook
Central of Georgia Railway, Illinois
Railroad,
Central
.
Railroad,
and
Wabash
Riverside Cement
>■
on,
this,
Railroad.
increase, in
Towmotor
.
increas¬
Corporation—Analysis—H. Hentz & Co., 60 Beaver
Street, New York 4, N. Y.
United
States
Finishing Company
—
Information
—
John R.
Lewis, Inc., Insurance Building, Seattle 4, Wash.
West Virginia Pulp
interest
have registered our pro¬
test vigorously against the main¬
we
& Co.,
Western
.
,
& Paper Co.—Memorandum—Fulton, Reid
Union Commerce Building, Cleveland 14, Ohio.
available ;s
tenance of the 4% rate both with
the VA and with our Senators and
many-occasions
Company—Analysis—Lerner & Co., 10 Post
Office Square, Boston 9, Mass.
increasingly unreal¬
on
&
quarreled with
light of the
Congressmen
Y.
memorandum on Chas. Pfizer & Co.
Street, New York 5, N. Y.
70 Pine
of
recent
Chemical
(bulletin No. 144)
14 Wall Street, New York 5, N.
delphia 2, Pa.
sacrifice
"
a
Pacific Power & Light
are
doing
business—
whether it be
building, banking or
any other operation.
During this
period, and right up to the time
of
however, that it is high time that
non-veterans
we
benefit
a
with! the
made.
However,
rate,
reality only
Sheridan Bogan Paul &
sufficiently preferent¬
this point of view.
rate
dis¬
distinctly undesirable
National
:V
..
rate
give the veteran
had
No
un¬
the
as
in
Also available is
the
established, Congress had in
commensurate
he
is
that
for
known
—Smith, Barney & Co.,
Long Island clam
interest
badly mistaken.
the
home financ¬
sincerely believe,
I
Recommendations & Literature
his
wandering
can
-
the GI
veter¬
Korean
and
advantageous
terms.
Illinois Central Railroad Company—Analysis
for
you
to
ing
II
is right and proper, enjoy
as
Dealer-Broker Investment
any
foregoing re m a r k s
that
all
through my bank's participation
ial
War
regulations; of
Administration,
nature
[absorb
it
before
Now
At
necessity
Continued,
to
rates.
With
would elim¬
also
of reflecting interest rate dif¬
way
afield.
in
home
existing
not
though,
purely
the .extent
funds,
the
and
,1
Under
even
it
which
—
another but
enjoy
adequate mortgage lending facili¬
to
industry
believe
inate
■ rec¬
support
necessary
communities
claim
being
filed. This last figure
undoubtedly
would be larger if the election
of
building
planned
was—then an
originally
as
certainly
ly sound.
Im¬
buying public.
building business
the home buying public.
They
give
a
which were sold
acquired through foreclosure
New
on
more
there¬
down
same
monetary values should be equal¬
taking
ceiling tends to
a
the
the
view aerate
me
is
and
ognized
that
large nation-wide
lenders, such as insurance compa¬
nies, provide vital and necessary
first
Let
It
application of the same principles
to
prevailing
cost
levels
and
uniform
a
rates
into account local conditions.
in¬
evenly divided among all income
groups
than
the
dollar
spent
within any other industry.
it
—and
To
,
such
rates
logically,
level.
simply to
points
following
we
vested
equity in¬
by veteran purchasers.
down.
lent of the then $6,000 one;
fore,
was
our
illustrate this fact:
Even
interest
is only
25% of national average.
were
time
on
is
of economic conditions and permit
com¬
piled for the VA, I find that
of view of the limited
appliances, furniture, automobiles, total
first
that
area
We
per
such
hardware, garden tools and
other
of
reduced
payment percentage should ap¬
ply today.
If the FHA program
loans three
with
If
From these,
of occupancy
homes.
new
for
remainder
mortgage portfolio consists of
local
made
was
expenditures of the
went
The
the
be
GI
should
over
first such
homes priced at time
something of the unpopular¬
ity of the GI loan from the point
ment. This showed
of
1935.
our
Long Island develop¬
a
there
made
we
conventional loans
the
ago,
$8,000 in
of
in
interesting figures. A couple
of buyers of new
lies
loan
obvious
years
age
since
lending helps create business
merchants, I have some
local
for
of
example
an
years
722,000.
growth of the community.
As
loans have been satisfied
should
generally accepted that today's
$12,000 home is about the equiva¬
policy creates
folio
contains over
12,000 loans
business
in
the
community for
ties.
local merchants, and it aids local totaling over $79,500,000. This, of
I
do
course,
does not represent our
industry.
lender
entire activity since many FHA
In short, sound mortgage lend¬
deposits.
believe, too, that the down
that is
a
factor in any lender's calcula¬ problem elsewhere.
My bank has long been an ad¬
tions. All I can tell you is this:
vocate of a policy in government
Comparing our percentages of that would take a realistic view
and
Likewise,
the FHA program from its incep¬
tion. At preseent our FHA port¬
Actually, the
4V2%, coupled
to
tablished by the FHA as far back
as 1938 when a
$6,000 home could
,
...
amount
charges.
bought with FHA-insured
mortgages.
Actually, the princi¬
ple of low down payments was es¬
evi¬
is the
total
an
little
mean
homes
cent
The
also
are
they
increase
payments
satisfactory in some areas,
notably New York and New Eng¬
land, it had far from solved the
lent credit risk.
cost,
the
loan,
resulted
in
reduced
carrying charges to many veterans.
dent that while the increased rate
was
to
with the extension of the term of
payment
all three types of
re¬
dulging in GI loans to the extent freeze local operations to an ex¬
mortgages, since such a huge per¬
appointment by Administra¬ centage of the new home market of about 43% of our total mort¬ tent that makes it impossible to
gage portfolio
tor 'Cole
of a 21-man advisory
it cannot be bad do business. ;
today rests on FHA and VA fi¬
business or uneconomic.
committee to analyze the prob¬
t
Government guaranteed and in¬
nancing.
If a bank adheres to
lems involved.
I can best illustrate this point sured loans should, of course, com¬
such a policy, it is bound to grow
I shall, therefore, touch briefly along with itsl community.
by saying that our dividend rate mand a preferential rate, but such
on
those points which appear to
to our depositors is at the high¬ a rate should have a direct rela¬
May I illustrate:
me
to be the most salient ones.
est level permitted by the State tion to the legal rates of interest
In
my
25
years
with
"The
First, and in my opinion, the
Banking Department. Our surplus in the various states. A formula
most important one is the attitude Dime," I have seen our total re¬ is
among the highest in our area; could be worked out" that would
sources
rise from $156,350,000 to
■of the local lenders in the area in
a
Let me sum up our position in establish
ceiling based on a
almost $690,000,000. In the same
which you as builders do busi¬
terms that perhaps would be more satisfactory percentage of the local
period, our mortgage portfolio has
ness.
I'll bet you thought I was
legal rate, taking into account the
clear.
i
going to say interest rate is the grown from $111,400,000 to $412,The support of an active build-. presence of the guaranty — per¬
In that period, not one
most important—but I'll come to 200,000.
ing industry in any community— haps a ceiling amounting to 85%
single loan was made outside our
that later.
whether it be a small town or or 90% of the state legal rate.
normal lending area, except a few
It is my belief—based on some
a large city—is the soundest con¬
We do not believe such a pat¬
limited amount of travel over the acquired through our purchase of tribution to the
economy that can tern would result in the ceiling
the New York State portfolio of
country,
plus
discussions
with
be made by any bank. We cannot becoming
the
effective
rate.
builders
and
mortgage
brokers the Home Owners' Loan Corpora¬ overlook the fact that
the
in
oversupplied
areas
$28 Money
from many active building areas tion.
billion a year building industry is would flow to areas in short sup¬
We have on our books at the
—that many lenders are overlook¬
responsible for the livelihood of ply.
The added costs to the in¬
ing what we at "The Dime" con¬ present time about 66,000 mort¬ one in
every six persons gainfully vestor doing business across the
sider
an
obligation second only gage loans. Included in this figure
country would likewise be com¬
employed.
to our obligation to our depositors. are 19,233 loans to veterans, the
It is an established fact that the pensated for in such an adjust¬
original face amount of which was
This is the need for supporting
building dollar is divided among ment, thereby insuring a steady
$194,171,761.
in every way possible the orderly
a
greater number of people in over-all supply of money for the
this
recent
talk
of
was even
the
to
of
cost
individual purchaser, when
into terms of monthly
carrying
and
dence that the ex-GI is an excel¬
increased
translated
present
long-awaited
scarcity
There
return
the
to
the
was
to
gage money.
has
into
states.
become
purchasers, and although
increased
areas.
premiums by banks for mortgage
policy
write
should
20
translated
great sigh of relief went
a
answer
an
and
can
bank
our
spend their servicing? And, of
and
area,
at
borrower
eran
residents of that im¬
are
there.
money
few
a
these
for labor—and in most cases
mon, I am but
a
there is the item of
wages paid to on-site construc¬
tion labor in the building of new
homes. An estimated 30% of the
too,
Then,
various
higher interest rates
was
up.
pay¬
the
inevitably
great dis-service by making
impossible
rate
tive estimate that the average vet¬
Whoever
exist¬
in
veteran
a
level,
conserva¬
a
Its
Discounts
new
15.4%, over and
above
equity they may have
created
ments.
feasible.
ferentials
was
When, with the advent of the
Administration, the interest
veterans
average
an
held
was
in fact, was doing the veter¬
ence,
whatever
GI loans.
on
economically
homes in most
that these
means
of
ity
Brands
by lenders for making mortgage loans. Scores limi¬
demanded
by
principal
established
have
bank in making nearly 21,000 mortgage
as "an unholy device" the premiums
own
of
the rate
beyond the time when it
ans
tized payments.
growth of their communities, Mr. Jackson cites
loans to veterans.
I believe that
far
isfactions of the loans
of mortgage lenders to support orderly
In stressing obligation
of
either through complete sat¬
or through
off,
Assistant Vice-President, Dime Savings Bank
and continued
total
loaned-Jto
have
we
veterans, $32,476,000 has been paid
FREDERICK W. JACKSON*
By
the
of
Furthermore,
$210,716,000
Thursday, October 8, 1953
...
a
memorandum
Airlines,
Inc.
—
on
Also
Hinde & Dauch Paper.
Analysis—($2
per
copy)—John
Lewis & Co.; 63 Wall Street, New York 5, N. Y.
-
*
H.
Volume 178
Number 5262
The Commercial and Financial Chronicle
...
(1335)
ply
Too Much Social
Security
eral
tending toward socialism the policy
of
expanding social security and similar government undertak¬
ings. Says time has arrived for all who believe in our way of.
life to take action to frustrate this trend.
ment
propaganda of past 20
government in
and
years,
one
Denounces govern¬
wice
price
have too much
says we
the
past
United
some
20
States
remarkable
the political and
ties
of
our
governmen t
activities
having
rect
chosen
had
the
world
busi¬
that
of
insur¬
vide
ance, now and
in
the
We
the
a
nessed
adoption
social
rity;
own
own
secu¬
.
E. H. O'Connor
sickness
compensation
sory
four
could
evil
no
the
sold
to
this
law
inside
out
to lie down
eth
may
must
must
pay3 for^t °is
tor it
pay
could
government
pills when
funeral
factories
Ypa
though
t
we,/as
from
insecurity
SfvalM
no
Jc ^saster l
*'•
be JI!
°
wm fear
evil"
L Jtl.fJtF? eVlIJ
me; lts ?ole anT?
no
me
We have
fiiieth
mv
head
with
to
assume
a
large ing about the stories of soHal dp- 1
'
iiiiein my neaa witn.
responsibility for his curity unemployment compensae.xPectatl0ns5 my mounting
Whenever men
inefficiency runneth over. Surely
Whenever men tion
comnulsorv
sickness
,
of
*°°l
well-beine.
well-being.
inei*lciency F
indur-
to
the
today
people
are
in
T,,
these
„
,
aCn^?c^ia°izedSmedicine1unui Kf?hpanrid
there
ance
shoulders
frJl fo11^
aays ot my lite, and I
ve on„the bounty of the
forever,
Sfa+
,
Surrendering
Our
Birthright*
us
.
T
.
*
...
,
provide
Lord just didn't plan it that way.
ion
them in their old age. They follow
securlty> surrendering their birth-
Didn!t
the
right of
was
pro-
intended
never
complete
He
to
be
Utopia.
say
«Thou
full
a
The
shait
good
earn
educate
thelr
their
children
version
of
That
was
not
primeval I
a
shall
not
work;
the
my
thy bread by the sweat of thy Psalm: "The state is
sick, brow."
*
n:eeds anJj
medical
1953
,
L
shepherd,
23rd
it maketh
individual
theirTirth
self-reliance
for ±avors> voting themselves into
Continued
me
on page
a
following false
capitalize on the ''
close
rnnlrs
ranks
strength for
anrl
and
.
Let
MANUFACTURERS
us
Hpvplnn > nur
develop * our
TRUST
greater America/
a
COMPANY
.
I
that
believe
do
t
In order tQ
I.
P
direction
movement is indicat v
that smacks of soc af
sory
concocted
well meaning
zeal
the
of
that
must take account of
we
developments so that these
errors may be corrected and
proper steps taken to achieve a
sound
so
people who in their
overlook
"that
minds
the
in
progress in the right
pagt
trend
and
economy
basic, dogma
brighter
a
for ourseiVes and for
and greatness
of America lies in the strength of
our
v*
Label
of
Qne
of
people—-in their in-
'dependence and initiative, in their
that
incentive to achieve."
js
future
•
children.
*
theory
new
a
the
*,
Misapplied
disturbing
in
way
which
those
what
do
we
is overlooked in this fuzzy
U. S. Government Insured F. H. A.
who
ing is that security
through
our
not have what
Let
has
to
sidelines
with
our
pockets.
The
time
calling
for
the
action
of
every one
the
people
between
toe¬
each
by
true
:
fullest extent
is
in
of
the
an
art v
9.
Britain
had
ever
heard
of
We
are
struggle
that
people
our
Way
the
is
engaged
in
a
this country
between
a
group,
forceful
who
group,
social
Qne
a
very
believes
welfare
in
m0ney,
the
at
Qf
the
mQst
shocking>
.
.
.
.
.
,
....
often
against
their
interests, during the past 20
sacrifice of many of our freedoms
Payable October 15, 1953
petuate
to
any
—a
for
a
in
of life far
to
per-
superior
the history of mankind
of life that holds rewards
way
the
way
and
doer
and
tribute to make
a
those
who
con-
0f
so
|n
use(j
an
Endorser
Deposits.
on
Acceptances and Foreign Bills
1,960,112.48
States
is
that
We had
ihe
the greatest nation
and
~T~
granted.
..
^bat
were
,
the^rJatereSNewy
meeting, New
we
York
in
xhe
God
,
York
as-
United
Insurance
s
.
Day'
City, Sept. 22, 1953.
2,573,862,235.14
...............
$2,806,785,378.15
.
-
United States
secure
Government and Other Securities carried
public funds and trust deposits and for other
BFJNECKE
JOHN M.
at
$157,783,229.40
purposes as
required
or
are
pledged
to
permitted by law.
EDGAR S. BLOOM
years,
effort
m0ney
f0
case
in
roners
some
ALVIN G.
we
have
an
L.
OSWALD
Administrative Vice-President
Chairman
JOHNSTON
F.
President, George A. Fuller Company
.
,
Chairman, Dana Corporation
FLANIGAN
MADDEN
L. A. VAN BO.MEL
Chairman, National Dairy
Products Corporation
'
HENRY C. VON ELM
President, Emigrant Industrial
Honorary Chairman
Savings Bank
GEORGE C. W ALKER
President
President, John P. Maguire & Co., Inc.
Electric Bond and Share Co.
Head Office: 55 Broad Street, New York
•
for
everyone
grave.
It
unlimited sup-
:
MOKE THAIS
City
100 BANKING OFFICES INT GREATER NEW YORK
Member Federal Deposit Insurance
*
City
President, Home Insurance Co.
JOHN P. M AGUIRE
President
York
HAROLD V. SMITH
MAULELLAN
Company of America
JOHN T.
Trust Committee
New
Thacher & Bartlett
Corporation
-
Lehigh Coal Co.
HAROLD C. RICHARD
President, United Biscuit
LOU R. CRANDALL
HORACE C.
L.
KENNETH
&
WILLIAM G. RABE
JOHNSTON
Simpson
CHARLES C. CLOUGH
CHARLES A. DANA
President, Scrunlori
Director, Phillips Petroleum Company
Products Corporation
undermine-
Director, Cluett Peabody & Co., Inc.
GEORGE j. PATTERSON
Federal pay-*
from the Cradle to the
seems
JOHN
BRUSH
Chairman, American Home
an(j
guardianship
Vice Chairman
C. H, PALMER
JOHN CEMMELL, JR.
Clyde Estates
President, Gerli & Co., Inc.
Mail Steamship Co.
legislators toward a'
more
comprehensive program ofsocjai security—a plan of government
GEORGE v. Mclaughlin
P AOLINO CERLI
Director, New York and Cuba
was^t
point is provided by
^he attitude of
FRANKLIN
President, United States
Triborough Bridge and Tunnel Authority
own
sound
A
for
ourselves
1,763,650.00
.
President, C. R. Black, Jr. Corporation
productive enterprises of the'
country, and in an attempt to de- *
;Str0y the people's confidence in
had all become smug and compla- State.
cent.
We had
been
taking oursured
22,258,445.45
......
CLINTON R. BLACK, JK.
What
freedom
177,681,407.78
16,588,980.04
as
Chairman, The Sperry & Hutchinson Co.
economy, their own
capacity to provide for. ■
helped to develop and themselves; so that they would be \
give impetus to such a trend? We conditioned to
accept a welfare •'
(
$
etc.
Liability
Other Liabilities
•
bmld
27,291,407.78
Discount, Interest,
DIKKCTOIIS-
Perhaps the worgt agpect Qf the
State to be
misapplication and misuse of pubdispenser of all that is bc funds for
political propaganda
good, and those of us who desire
purp0ses, during recent years, was
to
to
100,000,000.00
12,670,547.26
EDWIN J.
infallible
continue
$ 50,390,000.00
...
....
but
jngt0n, is the full story of what it
cost
American people to-be
pr0pagandized
with
their
own
strug-
a
7,003,720.80
.
gt-jj unreveaiecj scandals of Wash-
great epic
in
extensive
the
way.
on y
11,950,590.38
.
.
Outstanding Acceptances
will
uproot isgue
jn a political campaign *
stop the trends of
shortly before Wor]d War j hit ,
the past 20 years.
Let us cease
upon an jdea which he borrowed \;
living in a fool's paradise. - This is from
Germany. Before his camnot an era of miracles. This situapajgn was over he had persuaded
tion
can
and will only
be cor- the British
people that they had
rected if we become alert, active
aiways wanted sickness insurance, .*
and
continue
to
make
further
though not many had ever heard
progress in re-establishing in the 0f it up to a few weeks before,
minds
.
Dividend
of
and
American
.
Reserves for Taxes, Unearned
,
*"
Great
.
Undivided Profits
•
in
.
.
LIABILITIES
Capital
Surplus
ppwer
has been amply demonstrated
.
$2,806,785,378.15
Administration
new
Liability for Acceptances
-
this country dur-
20 .years. ,Its
beeh-Pg
attitude:
added
chant
the«wl»-S
tuniedvut
socialism
gle
Customers'
14,371,004.58
...
Accrued Interest and Other Resources
been employed to^the
?
happen here." Since the
advent of the new Administration
an
to the
Because propaganda
and
has
1,008,844,795.73
12,560,194.48
.
-sloganeer.
"It can't
,"we
help
distinction
our
has ; arrived
attitude
there has been
to
the succumbing
For two decades
us.
American
Banking Houses
is
in
hands
4,511,700.00
26,800,048.77
Loans, Bills Purchased and Bankers' Acceptances
today,
on
standing
133,761,880.48
Other Securities
and false liberalism, to get them
produce, out of the dangerous habit of acthe time cepting propaganda as fact and
that
now
cease
77,819,118.10
,
.
Mortgages
only come make a
do not
we
realize
us
come
can
.
.
Stock of Federal Reserve Bank
efforts. We can-
own
Mortgages
State, Municipal and Public Securities
;.
What -want
think-
750,865,789.98
,
American people believe in it and
it, therefore, our problem
can
we
earn;
not
$ '758,266,534,85
U. S. Government Securities
things
seems
practical philosophy that
have
11KSOUUCES
Cash and Due from Banks
have had to contend witn
we
the
Liberalism
of Condition—September 30, 1953
i
to advocate strange doctrines and
have found wide acceptance, that activities have
applied the label
personal security is in some way a of
liberalism
to
their
various
right of citizenship. We seem well causes. They know that liberalism
on the way to embracing the imgrows .from liberty and that the
Today,
Condensed Statement
-t.
strength
the American
nr
Self-Relianee
.
our
of
Let
It
in
Ln.mi,
wait
At
people, \ have
lethargy, we
have - raised - the
warning signal \
igainst the dangers of 1 compla- '
cency, the perils of unrealism and •
last
me
politics'
qakp
die and
you
?LlC„ ll^L^ \xrhn start that has been made.
Creasing demand by p
p
»
should know better, for compulscry autornQhilc insurance.
still
deadens my soul; it leadeth
the paths of idleness for
beautiful plot in a cemetery.
prophets.
the in
now
you were
when
good jobs* it lead-
prepareth™'uto7ia7o™
b"/aJ
"eebpropaganda. ^opHatog Vh^ earnLgs of Z
the been readingZ hearvictims of and
frugap n
the
is
on
beside
me
?ue Jus* said 1S nat in
ridl(;ule 9? the good b°ok> but we
living, and
a
job for everybody from the
a
fine
the
and
states,
aidlcs'
turn
a
responsibilities
that
idea
them
owes
awakened
compul¬
AyUA
the
long
of
1 sory.,
compu
been
ernment
for
example, ..wit-
in
he
he
measure
your^ide to^Se^yo^some^ov-
future.
have,
a
in
notion
common
law of progress and
a
come to us.
All the time we were of other fallible men calling themUnited States who want to be cuddevelopments in being blinded by our own reflec- selves
government,
they
have died and coddled by
government
economic activi- tion,
being unable or unwilling eventually reared a Frankenstein __a desire which reflects
a sort of
to
see
that
these
things which monster that has turned and de- delayed infantilism.
They want a
could never happen here have ac- voured their political, intellectual
benevolent Uncle to build their
tually happened. A whole genera- and spiritual liberty. This earth
homes, regulate their food prices
bearing
ness
that
and
tion
di¬
a
years, we in
have witnessed
the
on
has
a
but
legislative scheme which tries
any
have endeavored to transfer their
For
—
have
willingness
business, especially in the insurance business.
our steps and detouring off road to serfdom.
Calls for retracing
the
curse,
duty to society, as doom all to destruction
As we
a
special and separate thing, and look back in our own history, we
that this duty consists in consider- recognize
that
struggle
makes
ing and deciding what is good for strength and no person's security
other peple.
In their zeal they can exceed his individual self-reoverlook the long history of man's liance.
^
struggle for freedom which clearDuring the past years we have
Managing Director, Insurance Economics Society of America
as
who
that
By E. H. O'CONNOR*
Mr. O'Connor attacks
reformers, humanitarians
- be - managers-in-gen-
of
and would
15
28
Ift
Our Economic Dilemma
is
This
ties.
it is
of
wonder
.
the
material, intellectual
maintains denying freedom of access to the
market
its
of
anniversary
100th
the
,
celebrated
5
Oct.
on
75,000 shares of $10 par value to
$1,600,000 of 160,000 shares of the
value.
same par
,
'
-
themselves founding.
and periodically whitewash their
In October of 1853, the New
activities.
They write their own York Clearing House Association
laws and interpret them, spurning was founded in a basement room
the courts.
Finally, as happened at 14 Wall Street. The first clearinvestigate
however,
voters.
as
Bankers
and
Clearing House
York
New
The
Association
representing all of the households of
the nations.
They do,
..
"householders" rather than
BRANCHES
OFFICERS, ETC.
CAPITALIZATIONS
cies
disaster, with want
how
liberal" the
role representing all as
assume
NEW
NEW
REVISED
comes
has always, throughout the ages, brought
and famine, to all households no matter
Urges that Congress
CONSOLIDATIONS
pendent existence that finally be¬
paramount. They may not
be investigated by outside agen¬
under free market, Prof. Anderson cites
evils of restrictionism.
Using analogy of housekold for the
appeal.
News About Banks
in legal forms, who are
supported by the adherents and
followers of the specially favored
households.
They begin an inde¬
and artistic progress
economy,
that
not see it
do
powers
Consultant
more
we
special group at interest, the bu¬
reaucracy, who assume sovereign
By PALL E. ANDERSON
Pointing out that world hat made
matter of
a
Along with it rises a
all the time.
Economic
much
so
experience
everyday
—And Its Politics
-
October 8, 1953.
The Commercial and Financial Chronicle... Thursday,
(.1336)
*
«
*
THE
city
national
bank,
of
york
new
Sept. 30/53
June 30/55
$
Total resoutces_ 5.897,819.619 5,702,668,401
'
One
of
tieal
the
useful
most
in
considerations
economic
they assert in the fng house to be established in the
----- 5.338.818.951 5,267,520,007
Sovereign, the Doc- United States, it. "inaugurated a. from banks
1384.298.2901.496,745,01a
through Venice. They introduced trine of Inherent Rights.
;
new era in American banking, u. s. Govt. seV •
achievements
in
Spain,
and in America,
brought them back to Lombardy name of the
prac-
modern
thinking is the concept
nomic and po¬
Prentice points
This is the statement that the The founders were 52 banks hav?
*
_i
:~—SM nnA
ingredient, ^
the prin- restrictionists must always de- ing combined capital and surplus
ciple of political liberty. Need we claim. If there is no legal author- of approximately $52,000,000, and
add more to point out that the ity for their actions, then; there aggregate deposits of $55,000,000.
achievements of the Renaissance must be an extension of the doc- That represented : great financial
litical
colli¬
still astound?
sion:
restric¬
oft
the
household.
—1
out, the new
had two
ways
in
forces
eco¬
tionism,
freedom of
-
t h
and
and
Ricardo
classical
e
lonurt
economic
thinkers.
with
Our
Anderson
E.
Paul
tried
and
forces
came
It
Constitution.
the
practical
simple
in
state
to
shades
all
with
two
with
terms, to form as it were, a kind
of third
or
neutralizing force be-
these
tween
two
That
extremes.
that government
was
should apply
only that amount of restrictionism
necessary to maintain freedom of
In
holders.
set;
up
tein.
cities
Their
it
nust
be
1935,
racy
Nor
thrived.
that
forgotten
of
the
/ention
\/[eat
;n
a
mechanical
of
manu-
by animals out of grasses
no chemist has yet been
form
able to reproduce.
ionism
maintain
equality in opportunity,
impartial
Any
evidence before
world
has
shows that the
us
made
material,
more
intellectual and
more
artis-
tie progress under freedom of apto the market,
ment that did
with
not
perimented with all sorts of gov-
a govern-
.coming
up
compromises,
with the right
terfere
with
human economic
than
it
has
ac¬
made at
ever
one.
Few
material "and
environmental
.changes performed by the American households!
To all
There
blunder.
Result:
for
1
New Branch of the Trust Company.
institution,
C,ty bank farmers tri"st company,
that
'
The
came
Total
Deposits
tion
19
a
Clearing House Asthe
designa-
received
of
No>
membership
132.
Actually,
today
cash
Loans
nouneed
the Argenfamine in
a
the Argentine, or had
prices been
higher, there would have been in
our country, for the first time in
its history, real hunger.
In any
.event, what had previously been
the poor man's meat, pork, became
a
very expensive meat—and has
remained so until present time.
tion have always marched with
More, it may be added that hun- restrictionism, with denial of freeger and literal famine have gener- dom of access to the markets. Be-
nf
vi
Do
need
we
recent
Example
an
The
deniably Moslem.
starved
mobs
more
,
joined
hnnir
C.
ret
Shriver
a
nf
UJ.
U111U.C
in
tween World Wars I and II, or our
own
period under the New and
as
his model the
who
bandits
run
Trm^iA«o
a
A.
Vice-
Eldridge,
of The
..
.
^
a
and
Hanover Bank
the
the peasants of
IV.
1
s®^S' branches. Included
group are 340 women-
Chairman of the board of trustees
activities of the
Kremlin, he
Yugoslavia
to plant
and reap as he determined, and at prices he fixed. In
forced
William
a
-
w^Pk«f
thrpp
an illness 01 unree weeKs.
e was
years oiaMr. Eldridge had spent his en-
^st
5iy
fffS
-i?
bant'
2.SS'
•
no
u1-l
Jl
also
place
they
bazaar
or
and
every
sovereign protected Ms
—.v.-.t,!'gL.P/u®Ci.
merchants,
his households,
and
punished the thief and the despoiler. This was government at
to
best, acting restrictively only
the degree that it maintained
full
freedom
leeitimate
of
local
to
access
:cess
or
foreign
every
trader
SZl r or foreign trader
'
'
.
Later,
held
in
forth
freedom
hundreds
for
was
partments
the
.
Spam, where the Moors
was
state-favored
the
phi-
bureaucrats
holding
using violence, the result
privileged
power,
dent
the
at
head
office, with 49
and William Horchheimer,
p t r o 11 e r's department, 43
years,
c o m
years.
national
chase
the
the
bank
NEW
of
OF
June 30/53
$
S
bureaucracy
serve
activity.
or
this few.
Is
it
was
graduation from Harvard. Previ- Deposits
ously, he had served with the cash and
and is easy to forecast. It was Marine Corps in World War I. In
them
serves
any
must
rise
to
let
right,
American bureaucrats
occasion
wonder
that
the
late
wheat.
Sh-ff. Justi.C^. Hewart that friends
of
Britain, pointing out
^reat
such restrictionism gives rise to
a
growing and self-serving bureaucracy, called this kind of government
advanced
households
resources, 5,553.147.257 5.431.112,862
l Vire-I^esident
t h e m
and
in
U.
S.
5.046.752.211 4,947.735.457
due
banks
Govt,
se¬
holdgs. 1,110.553.447 1,010,167;073
curity
discounted
Undiv.
1.386.732.289 1,422,425,61S
__
2.373.254.577 2,362.752.559
__
53,375.599
profits
trust
guaranty
50,373,403
it
it
#
co.
new
of
and
its
bureaucrats,
the
fed
him
our
+rilct
with
the
hanover bank,
He could then go to his
in
as
I
york
that
the
European
Aid
Governments
must
serving
resorf
to
nrcssnrc
secrecv
to
Program
has
illustrated
viz" they a11 talk the
new
Sept 30/53
york
June 30/53
1,473,977,161 i,48i,890,7ii
Depos}ts
c*L
and
due
undiv. profits—
402,868,658
490,514,211
483,737,487
u.
s.
—
Govt, se-
684,256.246
19,114,867
90.648.418
s
resources
company,
york
Sept. 30/53
TotaI
88.468,697
^
^
*
new
June 30/53
$
2.306.735,378 2,700,243,933
*
*
Approval was given on Oct. 1
is this,
same way-
796,o8o,ii9
.
^
* '*
manufacturers trust
631,002,897
19,615,974
753.431.245
curitF ^ld^"
456,625,565
*
er0UDS
due
Total resources. 1,653,460.866 1,656.764.805 Undiv. profits
say." It is a fact that the Yugorrom/ar,ks,;"
slavian and the American bu- D c„rltf°hLgs"
reaucracies speak a common tongue, Loans & discts.
all
and
'Worn banks
'
our
Waqhfnfftnrf^'hn hwil1
Washington who will
cash
fipnarimpnt
to the
back me up. You better do
and
DESPOTISM7
and
rose
2,573.862,235 2,474,464,789
Deposits
Cash
and
due
„lo
tn
That Yugoslavia should suffer hv the ,state of New York Bankfrom banks __
753.266,535
canals,
'
'
from a grain shortage is fantastic,
^
,
fh
J. .
f u. s.
Govt, secrops,
livestock and misrepresentations, and finally to for the pe0ple are both good farm- ing Department to the Bank of
curity holdgs
750.865,790
in abundance and wool, legal
chicanery.
An
ordinary ers and agriculturists.
In their Athens
Trust
Company,
New Loans & discts. 1.003.844,796
764,421,603
27.29i.408
24,784,011
in
our
part of
were
.
of
fresh meat
i
york
city
Sept. 30/53
from
incubus,
vast
NEW
more
anywhere else
of
no
years,
human
world, for there
rotation
of
in itre
point
Sept. 30/53
June 30/53
,nterests emerge with price priv- starve," as did his model in Mos- 1942 he was made a member of
S
$
! feS' ,™"op,°'y Pr'vilges, con- cow. He had to feed them, and by the Board o( Trustees. Vice^nt
in
J '
m govarn"
s°me legerdemain, when the peo- chairman of the board since 1950, Total resources. 3.112.349.234 2,862,855.622
,mal0r." Pne 0f/hls
bave rid he remained head of the personal posits
2.667.722.896 2,433,966.762
ty of households but the few. A themselves of this
in all de-
complete
of
Agriculture
than
for
The
:?mes the Practice of special pri- widespread hunger and starvation. 1929, this bank was merged with
vileSes, the denial of freedom of The animals of the farms disap- the Hanover National Bank, the
that
Moslem
its
unprepared
with^omfnrtl" aCCGSS t0 ^ lmarkets' and fmally peared. Since most Yugoslavians two becoming the Central HanJ! comfort^ government by favoritism for a are farmers, Tito could not turn over Bank and Trust Company.
t
"u 'pecial caste or class- This means his back on them and say, "It
A vear later Mr Eldridge was
had seen a rich
t^dCfnre%verva^tv
ket
totally
lisastrous World War II.
housed
hues
ok,\
them
the
a8°/CRme back 'osophy of the "little less" be-
Lin
in
employees
service to attend the dinner are
Robert Fajg
Second vice_presj_
cor-
A
be
members, which represents
2P% °* the bank's staff, 1,908 are
in New York and 107 are in ov€r~
4-W«
Oldest
wnii™
will
the total of 2'015 Quarter-cen-
See-
March, 1952.
annual
time
tury
OCL
retary to which he was appointed.
first
employees who reach their
25th service anniversary in 1953.
the
«5
be
288
1Q40
in
for the
dinner
the
in
nffice
examples,
more
c e-
ninth
this
Attending
President, Mr.
Shriver, who
Robert
ones,
V i
will
bank,
'
stormed
who
"+U
a
nn
i
7,223,452
entertainment.
gram
As¬
sistant
"
:
an
Fair Dealers> ?he British Govern- a land, the households of which tire career in banking, entering
nient entered into a period of re- are predominantly agricultural, the employ of the Central Union
is^un- strictionism which found them al- the conflict of the few special Trust Company in 1921 upon his Total
dirty, halfrr
pornon 01 our nentage
72,785,965
6.159.160
the
of
Our Moslem Heritage
nrtriio
65,674,729
principai speaker at the dinner,
which will be followed by a pro-
J^resi-
merly
.
Restrictionism
these statements there is
appeal to humanity and rights, etc.
a
a
92,270,402
21,811,887
discounts
&
president
ay
if.en J a ™ 1 .n
btrong,
i.:/CV"
^
•
.
on
1
.
■
tibnism.
86.970.773
25.147.133
holdings
banks, the balance of the num¬
being lost in mergers, etc.
'
128,198,180
due from
and
the
banks
only u. S. Govt security
includes
$
123.164.288
resources
bers
perhaps? The
any
time
under
restrictionism. an obverse. Well-known to many little dictator Tito, who thought
"hservers
in
histnrv
vet
elnsse-1
0f
Denying freedom of access to the observers in history, yet "glossed "nothing
shooting
down'" unmarket has always worked disas- over by planners, bureaucrats and armed American flyers, has been
trously for all households, no mat- special interests, is the fact that rammed down our throats by a
ter how "gliberal" has been the hunger and famines and supersti-' pack of
special pleaders. Taking
ally accompanied extreme restrie-
•
cen-
a
last bank to become a member of
sociation
New
y<)rk held Qn Qct 6 Leo Denlea
was appointed an Assistant Trust
Officer.
Mr. Denlea, who joined
number ^ assigned
a
member
a
of
Bank
No
the
Bank
we
on corn from
Had there been
tine
Tito-ism
Following
Hunger
Gnce
been
City
Company
numbers the organization in 1920, will be
of their associated with the Fifth Avenue
number js never reassigned.
our
government bureaucintervening in the production
on the farms, made a hor¬
I
excessively in¬
tivities
finally
nations in all history can parallel
the
t
tQ
the
so
has
Trust
of
Directors
parmers
the New York
animals
Mean-
America," the English
over
a
long period0 ex-
the ernmental
of
survey
mercantilism.
of
charters>
as-
Board
,
alternative economic iayy began to. discard the restrie-
^an
Clearing House
to the date
York
corn
drought.
gadgets.
protein foods
were
of
meeting
regular
a
'
'
69,773,277
'
*.,
*
At
2276555 20a
871
*
'
71.453.823
*
pror,ts_.
Undiv
11,642.343
Undivided profits—
11,638,507
had to import
*
*
*
it
*
ft
corn from the Argentine.
AccordThe appointment of Robert C.
ing to E. P. Prentice, well known
Upward of 1,625 of the 2,015
Shriver as Vice-President of the
stock breeder of Pittsfield, author
men
and women on the staff of
United
0f one of the great books of modThe Chase National Bank of the
States Trust
ern times, "Hunger and History
City of. New York with 25 or more
Company
o f
we
imported 7,265.3% more corn
years of service will attend a din¬
New
York
than our average for the precedner in
their honor tonight at the
was
a
ning five years. We fed our farm
Waldorf-Astoria. Percy J. Ebbott,
meat
means
factured
banks
acCording
home, for instance, in
to
rendous
animals is as
mportant to mankind as the inof
breeding
of'freedom, individual growth and while
in
enough government pressure to colonists
cess
Close
founding
sjgne(j
agriculture manticism.
They had busy canals
rivers; they raised fine cattle,
ater known as Frisian and Hol-
Much later, the
English, abandoning their closure
aimed to system, bred cattle, too, and grad-
word, it
a
possibility having the advantages
more
their
and
The
specious
in
lived
to the market for all house-
access
the national crisis of the Civil
.War.
_Glilbej*ahsm,^or^some^o^her
humanitarianism or ro-
the^ Dutch or
restrictions
md
experimented
up-
governments,
fewer
flourished.
for efathers
these
In the strength in the decade preceding
the
to
plenty,
American
of
trine, "L'Etat, c'est moi."
f
ideas
were
later end, this is the doctrine of tyrNetherlands by anny> at oligarchy, of rule by Q
to Eng- privileged few who know no limland, and finally to the Dutch part its on their actions and therefore
of the Netherlands. It is interest- are privileged to rob and steal and
ing to note that while France, a restrict to their hearts content.
nightier
nation,
and
Spain, a This is government by and for
,'reater one, respectively rose and gangsters, but gangsters masquerleclined under extremely restrie- ading under the name of Marxism,
the
Smith
.
Lombard merchants, even
the
faire
market,
laissez
'
these
brought
ac-
to
ces s
of
.^11.
so-
and
called;
h<jSts" 2^69 441
into the picture, as
Western
Our
culture has al-
The Italians who began trading in
household guilty of such practices
case>
their small ships discovered these
would be subject to severe penal-
-
^
was
restrictionism which York, N. Y., to increase its capital Undiv. profits—
Continued
on page
35 stock from $750,000 consisting of
736,910.957
927.546,020
Continued on page 34
Number 5262... The Commercial and Financial Chronicle
Volume 178
(1337)
mission
if it
Private Overseas Investment
to
foreigners
to
invest,
taken advantage of on
were
substantial
though
ment,
resulted
in
has
it
inevitably
(5)
scale,
Underdeveloped Countries
By SIR RENEGAL RAMA RAU*
Governor, Reserve Bank of India
Prominent
bank official in underdeveloped area
asserts that for considerable* time yet capital
movements
through governmental channels will remain necessary. Stress¬
ing non-uniformity of the impediments, he cites India's political
stability; and absence of discrimination against foreign capital,
of limitations on transferability of capital or profits, or of con¬
trol by Indian nationals. Insists on necessity for screening for¬
eign capital going to underdeveloped countries. Advocates use
of organized institutions to overcome private investor's reluc¬
government
tance and
There has been excluded
the
from
of this discussion the
whether private capital
scope
question
capital
ments
preferable to
move¬
through
or
should
world
seem
able and efficient
to
have
I
make
whatever
to
against
are no
nor
dividends
on
strictions
the
on
limi¬
any
re¬
transferability
in
nor
legislation, as
countries,
prescribing
some
why
screen¬
discriminately
tend
flow
to
it
will naturally
where profits are
Profits
are
highest
often in industries which
of
for
the
very
any
particular percentage or pro¬
portion for the employment of
Benegal Rama Rau
India.
some
to be the trend
of opinion
There
has
pressure
ment of
small
re¬
be
can
than
better
tions.
which
he
I
examining
seem
worthwhile
tion
the
SAN
exploring
the country and which in any
vestor's
rational
list
come very
If
of
priorities
would
low down on the scale.
the
reluctance
private
capital is available to develop
these unessential
the
to
industries, it is
can
desire
natural
prevent
such
of
countries
development
recently been
for larger employ¬
setting
up
sources.
not
a
drain
on
their re¬
Screening, however, has
operated
serious impedi-
as a
Commonwealth
poration
has
I
be
similar
not
Finance
know
institutions
in the U. S. A.
no
course
Moore.
Cor¬
Moore
will
Floor
fices
of
of
the
the
Exchange.
firm
will
I
are
can
to The Financial
ATLANTA,
Ga.
—
will
the
of
essential
be
Bixler, Jr. is with French & Craw¬
ford, Inc., 68 Soring Street, N. W.
With Hancock,
feasible
Blackstock
(Special to The Financial Chronicle)
•
only throw
Ga. — Philip L.
joined the staff of Han¬
ATLANTA,
•
Miller has
cock, Blackstock & Co., Candler
Building. He was previously with
French & Crawford.
to me.
but
world
also
store
ance
of
in
equilibrium
Before
into
international
nomic
re¬
bal¬
payments.
eco¬
al¬
must
developments
ready have taken place. As has
been often emphasized, the pri¬
which
him
attract
fields
those
in
investor
vate
operate
can
socialistic
fears
creeds
of
have
generated
expropriation
tionalization
flow Iranian
can
basic
certain
area
to
the
capital
private
an
DIRECTORS
Expropriation Fears
not
and
after
especially
na¬
important factor, but I will
explain how this has been dealt
an
with
in
respect
of
corporations
who
have
recently
decided to
invest large sums in India. The
Standard
Vacuum
and
J. P. MORGAN & CO.
INCORPORATED
•
NEW
other
oil
only if certain basic facilities are
available, such as power, trans¬
port,
communications
and
the
companies, who
like.
Chairman
Condensed Statement of Condition September 30,
-
there
some
are
■underdeveloped countries where
this
basic development has al¬
place
and
which
these conditions
for private investment, there are
many,
perhaps the majority,
ready
taken
therefore satisfy
conditions
these
where
and
satisfied
therefore
where
great
deal of
have
to
a
public capital will
invested
be
not
are
the
before
specific
India
provision
which
an
given
in
by
in
they will not
take
has
period
a
been
that
the
over
of
a
con¬
government
fineries
for
have
their
assurance
the
setting
now
at
President
ASSETS
ARTHUR M. ANDERSON
Cash
Vice-Chairman
refineries
taken
are
government,
by
over
adequate
the
over.
and
essary
for
me
is
It
us.
not
nec¬
to deal with one of
the way of
the main obstacles in
of
flow
capital, viz: the
political instability
in the world today and the gen¬
private
conditions
of
international
in
tension
eral
affairs which have made planned
foreign investment difficult, and
have encouraged investment in the
home
market, where
dividends
are
not much
lower than
in for¬
countries.
eign
Many of the other impediments
are
real, but conditions
the
all
uniform
over
veloped
countries.
In
not
are
underde¬
some
of
the countries in South and South
Asia
fEast
exist,
as
these
panel
of
for
obstacles
do
discussion
Governors
of
Benegal to a
arranged by the Board
by
the
Sir
International
Reconstruction
and
C.,
Sept.
Washington,
D.
Bank
Development,
11, 1953.
has
agreements
with
failed
or
Govern¬
dishonored
never
companies
foreign
to
State and
Vice-President
Corporation
of Morgan
President Morgan &
■
impediment
that
policy
screening private capital that
seeks investment.
that
even
Grenfell 4'
Go.
Limited
and
9,462,515.97
307,391,828.57
Loans and Bills Purchased.
Cie.
Accrued Interest, Accounts Receivable, etc...
3,387,366.70
Banking House
Incorporated
CHARLES S. CHESTON
3,000,000.00
Liability of Customers on Letters
JOHN L. COLLYER
11,678,648.42
of Credit and Acceptances
Chairman and President
The B. F. Goodrich Company
$776,442,036.69
H. P. DAVISON
Senior Vice-President
RICHARD R. DEUPREE
LIABILITIES
Chairman The Procter & Gamble
Company
Deposits: U. S. Government
I may
explain
capital is
indigenous
$ 64,851,733.15
All other......
599,600,419.15
CHARLES D. DICKEY
Chairman Executive Committee
Accounts
Payable, Reserve for Taxes, etc....
Acceptances Outstanding and
$691,102,759.88
5,633,157.69
Letters of
11,880,086.42
Credit Issued
DEVEREUX C. JOSEPHS
Capital—250,000 Shares
Company
25,000,000.00
Surplus
President New York Life
Insurance
26,650,607.58
Official Checks Outstanding
Incorporated
has been mentioned is the
of
1,650,000.00
(including Shares
Morgan 4' Cie. Incorporated)
BERNARD S, CARTER
Chairman Morgan & Cie.
Another
43,129,144.86
Federal Reserve Bank.
Other Bonds and Securities
President State Street
N. D. JAY
Screening
(4)
187,945,496.73
Municipal Bonds and Notes
Stock of the
PA UL C. CABOT
fulfill
their foreign obligations.
30,000,000.00
12,826,032.70
Undivided Profits
THOMAS S. LAMONT
$776,442:036.69
Senior Vice-President
subject
to this scrutiny by the
Issues Committee. From
the point of view of the under¬
Capital
developed countries, screening is
absolutely essential and that for
two
Firstly, foreign investment
up
drain
a
change
the
on
mitted
profits
and
sets
foreign
of
resources
because
the
eign
country,
have
be
to
re¬
capital has to be
country to
investment,
takes
which
re¬
place
in
would
that
see
by
and
those
result
for¬
large,
industries
either
in
a
direct saving of foreign
exchange
or
through
an
increase
ductivity lead to the
indirectly.
Vice-Chairman
United
States
Government securities carried at $79,214,943.73
pledged to qualify for fiduciary powers,
in the above statement arc
L. V. McCOLLUM
to secure
public monies
as
required by law, and for other purposes.
President Continental Oil
of
Member Federal Reserve System
GUSTAY METZMAN
Member Federal Deposit Insurance Corporation
ex¬
patriated. It is therefore essential
for
R. C. LETTING WELL
Company
reasons:
not
for instance, India, which
Contribution
Indian
their
(1) The principal factors that
bave
operated as deterrents to
foreign investment, under pres¬
ent
conditions, have been ex¬
plained by the speakers on be¬
half
of
the
capital - exporting
countries, and also in the reports
to
The
ment
Impediments
circulated
amounts
invested
in
the
Indian companies as share capital
loans.
$208,797,035.44
from Banks.
compen¬
sation will be paid and necessary
facilities allowed for transferring
private investor, whether native
foreign, is prepared to take
or
Hand and Due
United States Governmen t Securities
I. C. R. ATKIN
Investment
on
re¬
least
25 years after the commencement
of operations.
If after that time,
the
1953
HENRY C. ALEXANDER
tracts with the government under
Though
refineries
up
are
YORK
GEORGE WHITNEY
the
crisis. This is undoubtedly
JUNIUS S. MORGAN
Vice-President
ALFRED P. SLOAN, JR.
Chairman General Motors
MORGAN 4'
same
result
Indiscriminate
per¬
INCORPORATED
14, Place Vendome, Paris, France
JAMES L. THOMSON
Finance Committee
Hartford Fire Insurance Co.
MORGAN GRENFELL
JOHNS. ZINSSER
4-
CO. LIMITED
£3, Great Winchester Street, London E.
¥
pro¬
CIE.
Corporation
Vice-Chairman Merck & Co., Inc.
310
Chronicle)
Indians, in non-technical
(2) The growth of
economic
the task of develop¬
underdeveloped
areas nationalism and the influence of
only for
ing
the
at
Burr A. L.
very
channels
a
the
The of¬
be
States today, that posts, but this can hardly be said
considerable period to be a serious deterrent to the
of time capital movements other flow of foreign investment.
than
those
through
private
a
be
on
Sansome Street.
United
the
In
for
Ex¬
been
whether
10 minutes allotted
the
Mr.
(Special
time to develop it in the
of
Stock
Joins French & Crawford
out the idea for consideration and
have
Francisco
over¬
recently
do
San
Specialist Odd-Lot Dealer
■
formed.
the
in¬
by investment through or¬
ganized institutions. In the U.K.
a
FRANCISCO, Calif.—
E. Needham, member
Chauncey
difficulties
how
how
pf our difficulties.
Needham & Moore Formed
in their way can be met and also
life
economic
are
der the firm name of Needham &
knows
remote
It would
ap¬
under
discussing the sub¬
This subject requires
study, but I hope this
we
detailed
of
undeveloped
understand, however,
that there are possibilities of di¬
rect investment by big corpora¬
countries.
will
you
limitations
change, and Ralph Si Moore have
formed a general partnership un¬
reasonable divi¬
earned, or in adjoin¬
not
are
any
ing,
particu¬
larly in the
light of what
seems
regarding control by Indian
nationals
reason
with
where
countries
is
eco¬
discussion has indicated the gen¬
eral line of approach for a solu¬
come
profits or the withdrawal of
capital.
There are no require¬
feel¬
the
ing
ing
but
the
This
in the
ject today.
The
naturally
seeks
safety
and prefers to invest in his own
dends
might lead to his profits
capital being frozen.
capital is allowed to operate in¬
of
from express¬
the country will not
The second
India.
in
investor
and
essential
ments
conditions
private
ing is essential is that if foreign
tations
cannot, how¬
ever, refrain
about
brevity
to
sources
it
bold
attracted
India, but
this is probably due to ignorance
which
highest.
I
been
have to
can
admin¬
today;
foreign capital; there
even¬
an
country,
few countries in this unsettled
tually
re¬
place them.
as
safeguards
greatest
that
discrimination
they
stop
sphere,
which
will
well
get into foreign exchange trouble
naturally the country I know
has political stability such
an
regarded
foreign investor
does not compared unfavor¬
ably with that of most developed
countries of the world; it has no
tional organizations or
whether
the
must
to
investment; on the
effective screening is
the
of
India
dangerous
preciate
not
credit
action
to
contrary,
one
best,
as
not
obstacle
and
nomic
be
root.
should
retain
of
qualification.
somewhat
developing at the
Screening therefore
their
take
trouble
very
say
interna¬
could
this
to
without
substantially en¬
dorse my statements.
Nevertheless, it has to be ad¬
mitted that the private investor,
particularly in the U. S. A., has
up
necessarily
ensure
istration, which
governments
or
is
anxious
are
build
to
ignorance.
has
movements are
which
Requirements
have compelled me to make state¬
ments
of
a
general
character
result in demands for
In
Limitations of Discussion
delay.
some
might well
India Maintaining Gold Practice
foreign ex¬
(4) It is rather embarrassing
change
for
the
remittance
of
profits and the repatriation of for me to say my country satis¬
capital reaching limits beyond the fies most of the conditions re¬
capacity of the country to service. quired by the private investor,
This
has
happened
in certain but I am sure that some of the
countries,
but
those
countries speakers who happen to know
a
17■
C.2, England
The Commercial and Financial
18
Chronicle. ..Thursday, October 8, 1953
(1338)
Textile
Kerr Chairman of
Our
Central States IBA
D.
Chi¬
elected Chairman of the
Reporter
111.—William
CHICAGO,
cago, was
Central
States
vestment
at
This
opinion
H.
Ostrander
of
William
Blair
elected
been
William
D. Kerr
Illinois
Trust
and
Com¬
Vice-Chairman;
&
Incorporated, Chicago,
Harris,
Secretary-Treasurer.
the
of
members
New
Executive Committee are:
Group's
Warren
Co.,
Raffensperger, Hughes & Co., Inc.,
Indianapolis; Donald E. Nichols,
Ames, Emerich & Co., Inc., Chi¬
cago; Robert A. Podesta, CruttenD.
Chiles-Schutz
Chiles,
Omaha; W. Shannon Hughes,
Co., Chicago.
&
den
members
of the Executive Committee will
take office immediately following
the annual convention of the IBA,
Nov. 29-Dec. 4 at Hollywood, Fla.
The
officers and
new
and not a few
Walter
Everitt'has
A.
become
firm
associated with the brokerage
Model, Roland & Stone, mem¬
bers of the New York Stock Ex¬
of
120 Broadway, New
change,
York
City and London, Eng.
Everitt
Mr.
States from England
and since that
as
in
England, Mr. Everitt had been a
of the editorial staff of
member
the
Lopydon
"Economist."
Atlas Sees. Corp.
Atlas
formed
way,
the
Formed
Securities Corp. has been
with
offices at 39 Broad¬
New York City, to engage in
business.
Officers
securities
G. E.
Bickers, Secretary-Treasurer. Mr.
Tilley was formerly with Aetna
Securities
Corporation,
WeberMillican Co. and De Pasquale Co.
are
R.
S.
perity of recent years
a
a
\
of the rapid
is
superior
to
those
of
no
control
Expected
reasons
financing by the government in the
involve
the
more
distant
maturities.
future which
near
There
are,
will be at much reduced
One of the
importantly
rates than many
are inclined to believe
will be the case.
They hold the belief that the trend of interest
rates, both short- and long-term, is downward, and that the de¬
cline in these rates will be
pected in
many
sharper and faster than had been
quarters.
i
■
coordination
of the monetary program, which seems to
should in the opinion of many market operators
have a very favorable influence upon the yields of all interest
bearing obligations. This will most likely go a long ways toward
the restoring of some of the confidence which was so
badly shaken
during that unfortunate period earlier in the year.
However, it
be
reality
a
now,
as though, there
are a number of institutions that are not
going to get back into the longer market for a while yet because
they still have plenty of securities that do not add up to fond re¬
more
of
a
There has been, nevertheless, among these invest¬
tendency of late to make switches from the shortest
for each eight
share
permanent homes.
have
been
It
is
taken
indicated
of
out
that
the
quite
few
a
of
the
through the
switches, with the longs being sold in favor of the
H. D. Habberstad With
First Securities Co.
Atjbkey G. Lanston
(Special to The Financial Chronicle)
ized
accounts,
rather
CHICAGO, 111.—Hugh D. Hab¬
berstad
has
become
connected
with First Securities
Company of
Chicago,
134
South
La
Salle
Street, members of the Midwest
Stock
Exchange. Mr. Habberstad
formerly with Daniel F. Rice
& Co., and E. F. Hutton & Com¬
was
pany.
Ellis is
now
—
Donald
with Eaton &
Incorporated, 24 Federal
in
the
was
nothing
would
new
simply gambled on
materials. "That situacompletely changed,"
leader
the
continued.
textile industry,
with - the
The
and
to-
Discussing
charge
the
Howard,
Street.
of
new
Fiber
&
Co.
Situation
the
synthetic fiber
J. Sokel, the
Vice-President in
synthetics,
fibers
Corp.
Fund Distributors Corp. has
heen formed with offices at 33 W.
42nd Street, New York City, to
engage in the securities business,
Officers are S. S. Grean, President; R. H. Brennen, Vice-President; and E. L. Hagquist, SecretarY- Mr- Brennen was formerly
*n business under the firm name
of Wall Street Securities Co. Prior
thereto he was a partner in Mader
Clarkson Potter
Andrew
company's
C.
new
Synthetic
Fund Distributors
commonly
you
raw
situation,
(Special to The Financial Chronicle)
Mass.
that
started in the
fibers, while
there may be confusion, they do
give the textile industry infinite
opportunity to do things."
With Eaton & Howard
BOSTON,
stated
are
coun-
"Rayon acetates have revolution-
longer-term 2V2s have
a
foreign
when he
industry
day
balance in
competition
from
tion has been
market
a
to be applied by it against outstanding bank loans of $8,000,000
business, it
develop;
your
being
securities
shares will be
aspects of the trade
contributing to the
thought that
The discount maturities have been
getting considerable atten¬
tion, not only /from dealers and traders but also from investors,
with reports of some really sizable blocks of these securities
put into
common
loaned to the operating company
Stevens
days
textile
-
one
shares held of record. Subscription rights will expire on Oct. 21,
Imports
imports
Mr.
middle-term maturities.
pension and trust
HA 6-6463
of
rate
incurred for construction completed prior to 1953.
tries. Mr.
Stevens
pointed out.
Consolidated operating reven"At the present time it would ap- aes. of the company and its subsidpear that the only major source of iaries amounted to $21,304,503 for
foreign competition has been in the 12 months ended June 30, 1953
the
spun
rayon
field," he said. an(f $11,059,277 for the six months
"Earlier this year, spun rayon was ended that date. Consolidated net
imported at prices ranging from income for the 12 months' period
three to five cents a pound less amounted to $2,706,805, or $2.77 a
than current domestic prices. Spun share on the shares then outstandrayon
still remains one of the in£ and for the six months' period
more
vulnerable areas, although to $1,542,757 or $1.58 a share,
it would appear that other aspect^
Dividends on the common stock
of
the
textile
industry are nof™ the parent company are paid
greatly threatened by foreign quarterly at the annual rate of
competition at the present time." $2 per share.
the
Confidence at High Peak
The
materially to keep
reactionary at times.
BOSTON 9
on
costs,
current intensified
ex¬
.
these acquisitions helping
thin market that looks
ST 2-9490
shares
selling
over
Competitive
other opinions in the financial district that longer-term financing
will be done by the government but when it does take place it
It is also reported that the 3V4S and-the
been going into some of the private
45 Milk St.
and amend
additional
however,
intermediate-term obligations.
CHICAGO 4
common
Oct. 5, 1953, of rights to subscribe
period when easy selling 1953.
^
prevailed."
The
First
Boston
Corp., and
"The primary difficulty facing White, Weld & Co. jointly head a
the trade at this time is the fact group which has agreed to purthat on an overall basis the tex- chase
any
unsubscribed shares,
tile
industry
has facilities for The company is also offering an
production in excess of current additional 6,000 common shares to
requirements, indicating increas- its employees which are not being
ingly heavy competition in the underwritten,
trade," Mr. Stevens continued. He
Western Massachusetts Electric
pointed to the worsted manufac- Company, the principal whollyturing situation in New England owned
subsidiary
of
Western
as
being particularly bad.
He Massachusetts Companies, supplies
stressed his company's efforts to electric service in continuous terintensify
dealers
'
medium of tax
231 So. La Salle St.
Offering
sales.
will
these
WHitehall 3-1200
Stock
will be
which
Discount Maturities Acting Well
NEW YORK 5
eventually "find its
place."
year
old
INCORPORATED
acrilan
he ex¬
for the improved feeling toward
the longer-term Treasury securities is the growing belief that there
positions
Lower Interest Rates
into the
15 BROAD ST.,
adjust its thinking
operating inefficiencies which
have crept in during an 11- 12-
and
& Co.
that
face,"
operations, Mr. Stevens stated f0r
122,316
additional
common
"is now required shares at $29.60 per share, at the
to
Possibility
traders.
One of the principal
ors
SECURITIES
its
efforts, regain ritory comprising approximately
and eliminate 1,450 square miles in the western
extravagances, which are showing part of Massachusetts, including
up in the satisfactory 1953 results the cities of Springfield and Pittsto date, with an increasing per- field and the town of Greenfield,
centage of earnings realized on fSTet proceeds from the sale of the
investment
and
membrances.
MUNICIPAL
will
orlon
represented outstanding
the
seems
STATE
stating
on
that the industry
improvement which has
securities, not more than
a
normal backing and filling is expected by some of the more
sophisticated followers of the money markets.
They believe that,
the change which has taken place in the monetary policy will
eventually result in higher prices for most Treasury issues, espe¬
cially the more distant maturities. It is well realized by this group
that the higher the market goes the more dangerous it is and the
more likely it is that there will be a good-sized shake-out.
How¬
ever, any setback that might come about would be looked upon
as a buying opportunity and
it should be beneficial to the whole
market because these securities, it is contended, would be going
in spite
remarks
period of unusual and unrealis-
tic
Tilley, President;
U. S. TREASURY,
While
Offering was made yesterday
recently made before the New
York Society of Security Analysts.
(Oct. 7) b,y Western MassachuAsserting that the industry's pros- setts Companies to holders of its
it appears to be on paper.
Shake-Out
early in 1951
Previously,
dynel
that
A. J. Sokel
Stevens, Jr.
of J. P. Stevens & Co., in
are
good shape
P.
John
reports that dealers' positions in some in¬
stances are on the heavy side and it is believed that some of these
securities will have to move into stronger hands before the market
time had been with
Brothers.
Lehman
confidence
Western Mass. Cos.
quotations of
indigestion developing in certain of the longer-term issues which
have moved up in price on a rather negligible amount of activity.
into
to the United
came
per¬
However, these
Bankers Underwrite
taken place in quotations of government
Everitt Wi
year's
a
certain
fully defined yet, but he
fallen
as
of
Nevertheless,
not
proper
the upswing which has taken place in quotations of nearly
all Treasury obligations has been pretty fast and at times there
has been very light volume.
This types of action has tended to
distort the whole picture a bit and quite likely makes the market
vulnerable to some kind of profit-taking.
Also there are signs
will be in as
it has
pressed confidence that it as well
sure,
addition, there
that
"has
government securities a very constructive attitude is being main¬
tained toward the future price trend of these obligations.
To be
In
thaf it has had
and
lon.
rather permanent homes. None¬
Despite the sharp rise which has taken place in
Harris, Sills, Fairman
David J.
with regard to dynel, Mr. Sokel
,
rep0rted
will find its place the same as ny¬
Dealers' Positions Heavy
Chicago,
pany,
for
industry has developed
nylon in tricot and the like,
expressed
expand very much.
Bank
National
tile
are
spots that still have
before the investment demand will
be taken out of the market
to
Emphasize
rayon.
fibers.
new
formance factors.
attitude in the money market.
under accumulation
spun
trial
indicate that a
whole.
constructive monetary policy appear to
Conti¬
nental
tex-
theless, it seems as though there are some soft
W.
Evans,
the
be helpful to the market as a
of these securities have moved into
are:
Thomas
c\
list has
whole
The
Other
g o.
in
occurred
be the outlook, but it does seem to
be the reasons for the favorable
officers
has
industry is a return to "normalcy," according to John P. Stevens, Jr., Chairman of the Board
expected because
higher prices are not
that
Easier money rates and
Chi-
,
mean
period of digestion would
Com-
&
p a n y
not
does
What
tile
securities. Some hold
that Treasury securities will have to move into
before the market will be on a really solid basis.
that appears to
Lee
succeeds
reaction in prices has
quarters because of the rapid rise which
in quotations of government
stronger hands
meeting of the
Group.
He
c a
the
to
foreign competition has centered in
opportunities existing in
feeling that has
abatement of the bullish
no
with
selling constituted "unrealistic" period, and that re¬
stored efficiency with economies are bearing good results. State
its easy
markets even though a
money
has taken place
annual
the
to be
seems
been looked for in some
of
America
There
been in the
Bankers Asso-
ciation
'
In-
of the
Group
Governments
CHIPPENDALE, JR.
By JOHN T.
Kerr, Bacon, Whipple & Co.,
on
Industry Has Returned to "Normalcy"
J. P. Stevens & Co. executives assert postwar prosperity
stated
have enlarged
Clarkson
Potter,
partner
in
that Hayden, Stone & Co., passed away
the at the
age of 73 after a brief ill¬
opportunities of the textile indus¬
try. He pointed out that nylon has
ness.
A
former
member
of
the
particular advantage, namely, New York Stock Exchange, Mr.
Gibbs & Co. Adds
that it makes a very fine thread Potter
was
also
in
the
past a
(Special to The Financial Chronicle)
of great strength, and that as a
chairman of the New York Group
WORCESTER, Mass. — Herbert result, parachutes during the war
of the Investment Bankers Asso¬
F. Lundquist has been added to
were made of nylon, to the detri¬
•
the staff of Gibbs & Co., 507 Main
Street.
one
ment
whole
of
silk.
new
He
field of
asserted
use
that
a
in the tex-
ciation
nor
of
of
America, and
a
gover¬
the national organization.
"Volume 178
Number 5262
The Commercial and Financial Chronicle
...
(1339)
h
old
New Financial Facilities in London
"take
cannot
London
on
cial
and
market
the
shortcomings of the London finan¬
prewar
the
credit
London banking houses, Dr.
Einzig notes
tral
from the former rigid and conservative attitude toward inno¬
vation. Lists
steps taken to fill
as
(1)
organization:
death
duties;
(2) providing financial facilities for small investor who
on
can¬
afford to
not
meet
invest in stocks.
its
desirable
Eng. — One of the
great shortcomings of the London
financial
market
the
was
before
one-sided
the
character
its
type of capitalists. Very
often
they made their fortunes
during the War or the post-War
War
of
inflation,
In
market
certain
types of busi¬
such
ness
as
accep tance
credits
for
overseas
cus-
tomers
1
a r
of
securities,
facilities
been
its
other
Paul
time
entire¬
in
the
cial
bills.
of
be
.
of
in
commer¬
speaking,
and finance
banks
the
City
the
of
rigid
and conservative in
face of any suggestion that they
should depart from the well estab¬
vanced
city
a
there
been
short-term
British
become
Corporation
providing
of
in
the
adequately
made
to
en¬
capital
past
Efforts
various
which
fill
two
were
in the fi¬
the
to
be
sold
significance but they
indication
sive
spirit
as
far
large fortunes
as
concerned, gave rise to
with
in
duty payments.
inevitably
depress
securities
which
have
held
been
prices
to
result
of
that
is
the
for
duties
death
new
being
are
of
new
the
system
in
made
who
of
those
under
cannot
fa¬
afford
scheme
ters
These
efforts
blocks
vately
tors
of
who
offers
stocks
negotiated
as
at times
result
a
unsatisfactory
this sales of
often
are
by
the
on
the New York Stock
and
have
of
to
accept
which
the
control of
into
family businesses passed
most
unsatisfactory hands.
As often
as
ford
buy
to
not those who
belong
to
can
an
af¬
un¬
advantage will be that the
possibility of buying shares would
pri¬
execu¬
Oct.
Awards
the
Hotel
26, 1953.
Joins Davies Staff
SAN
rick H.
FRANCISCO, Calif.—Pat¬
blower
1908.
has
&
Weeks
James
been
Oct.
on
office
J.
the
1.
of
Phelan,
Jr.,
resident
Montgomery
Co.
&
become
partner
personnel
associated
blower
&
Weeks
who
with
include
Street,
Co., 425
members
E. R. Harriman
encourage
,
saving
whom
existing
do
appeal.
not
by
people
saving
In the
(Special to The Financial
Chronicle)
ATLANTA, Ga.—A. L. Brown is
now
with Pruett &
710 Peachtree
Company, Inc.,
Street, N. E.
&
Co.
PHILADELPHIA
City.
the
attitude
It
is
on
now
sphere
changed
the
part
realized
of
that
circumstances
of Condition, September 30, 1953
ASSETS
Hand
and
Due
Banks
from
United States Government Securities
$ 47,935,556.07
.,
Kingsbury, Jr.
lw
52,432,4p7.58
w
44,946,962.78
...
49,596,774.07
«
.,
15,887,390.45
State, Municipal and Other
Public Securities
.
.
.
Other Marketable Securities
6,027,657.67
Robert A. Lovett
Ray Morris
H. D. Pennington
,
Loans
and
Discounts
Customers' Liability
Other Assets
i.i
.
.
on
i.i
...
.
...
Acceptances
i.i
i.,
<•>
1,117,210.37
*.i
L. Parks Shipley
$217,943,958.99
Knight Woolley
W. A. Harriman
Limited Partner
LIABILITIES
Deposits—Demand
FACILITIES
Deposits—time
..
.
$181,445,137.58
3,014,812.50 $184,459,950.08
,,,
Deposit Accounts
Acceptances: Less Amount
Loans
•
Credit
Brokers
Purchase
of
for
and
of
Accrued Interest,
Reserve
Capital
Sale
Securities
Custody
Portfolio
.
Acceptances
Commercial Letters
of
in
Surplus
Securities
for
Expenses, Etc.
Contingencies
1w
:.
.
$
.
w
wj
.
m
...
17,302,031.46
376,693.91
1,500,000.00
2,000,000.00
12,305,283.54
14,305,283.54
$217,943,958.99
Investment
Advisory Service
As
required by law $1,600,000 U.S. Government securities are pledged to secure public deposits.
to
facilities
of
international financing, too, there
are
indications of a more adapt¬
able
Statement
Stephen Y. Hord
F. H,
the
in
the
the fol¬
Pruett Co. Adds
of
BANKERS
BOSTON
YORK
on
will
Horn¬
lowing: Harry W. Kerr, J. Albert
Mahoney,
Robert
R.
Stoetzer,
George
L.
Faulkner, Percy P.
Newman, Earl D. Mahoney, Rob¬
ert
H.
Stoetzer,
Jerome
E.
J.
Keane and Henry Nau, Jr.
the New York and San Francisco
Cash
in.
Who
1933, will continue in that
capacity.
The
former
Bennett,
Prescott S. Bush
Louis Curtis
Horn¬
opened
was
Coleman, Jr., has become
connected with Davies &
Moreau D. Brown
Thatcher M. Brown
a
by
widespread
press
campaigns.
It is probable that
consid¬
at
on
at
Detroit
Smith
Annual
held
(Special to The Financial Chronicle)
PARTNERS
to
Exchange to enable small investors
burden
avoid
the
be
The
H.
which
since
McCormick will accept the
at
Chicago,
the
Their
stocks
Mr.
"Oscar"
of
Paul
for
financial
benefit
shares.
ar¬
ing
To
the
follows
and
David G. Ackerman
new
erably owing to the need for sell¬
the
NEW
death
before very long the required fa¬
cilities
will
be
made
available.
prices.
in
exchange classification.
PRIVATE
to
The
increases
in which
made
Co.,
Brown Brothers Harriman
the
inspired by the reports of
were
of
actual
been
&
Weeks
Business Established 1818
these
of
high
of
provide
investors
invest
to
conditions.
has
third
Wagenseller
Thomas McCance
for
existing
by the executors
market
award
stock
L. Arbogast and Owen T. Wilkin¬
Provided that
buy shares on the instalment
of
deceased
millionaires. Even system. So far
nothing definite has
before there are any actual sales been
arranged but the idea is
their anticipation tends to create supported both
by official quar¬
adverse
the
was
McCormick
&
became effective
judges. This
year
an
ANGELES, Calif.—Donald
months
adequate
effects
creation
the
large
known
T.
E.
30, 1953.
closely the consolidation of Horn¬
Davis
inde¬
Bennett,
announcement
blower
of
(Special to The Financial Chronicle)
of
has only
six
resources
are
rangements
are
Such sales
the
1
pendent board
Al¬
At the other extreme
vestors.
small
are
price
facil¬
ities for the benefit of large in¬
blocks of stocks for the purpose of
death
a
zine's
banquet to
The above companies have been
connection
of
i
a n c
1953.
Oct.
of
as
This
2,
as
their activities should go
cilities
realization
the
"Fin
dissolved
by
World" maga¬
Statler
LOS
ex¬
fication
credits.
Two With
stock
change classi¬
disguise of short-term
long way toward mitigating the
some very
in
problems
grave
the
In
will
blocks
the
for
been formed.
established
to
the
by the fact that another
of similar character has
damaging
duties.
during and after the
practically
confiscatory
as
under
granting them
indirectly to their German rivals
pur¬
of the idea is in¬
financial
a
Britain
level
the
for
new company
success
companies
The increase of the death duties
War
judged best in
Nov.
on
year
concerned.
existence
purpose
the city.
in
were
of
Build¬
Smith & Co., members of the New
York Stock Exchange, was estab¬
lished in 1915.
The firm will be
was
which
stocks
in
the
may
is developing
instead
Penobscot
ing,
report1
transactions
be done with¬
can
just
o| the new progres¬
that
firms
office,
McCormick's
British
company
on
interest readers outside Britain
an
in
the
so
dicated
for
acquisition of securities
the
Mr.
(nick¬
company
securities
or
the instalment system. Neither of
these
facilities
are
of
interna¬
tional
the
decline
a
been
payment of death duties, and
for the
lof
realized
though the
organization of London, by
facilities for the,real¬
ization of large blocks of secu¬
have
Trust
earlier this
blocks
be
when this
the
providing
which
ciated with Hornblower & Weeks'
Detroit
long-term facilities
financed
of
exchange
that the market cannot antici¬
so
nancial
rities
and
personnel
disturbing the market. There
is no time limit for its operations
pate
gaps
similar
from
entire
the
Investment
course
and
Quite recently steps have been
to
obtain
the
Bennett, Smith
&
Co.,
Detroit
brokerage firm, will become asso¬
out
neglected in the past.
taken
banks
to
1888, have announced that vir¬
tually
members.
competitors to British firms
unable
—
customers—who
the
in
the
gradually unload these
other
special requirements
is
in
of death duty payments.
due
were
for
to
Hornblower
firms
dies?"
man
"Edith")
to
pose
in¬
very
report
—
Weeks, national brokerage and
investment banking firm founded
industry.
in
over
have
to
served.
cater
business
business
was
their
to
r-
annual
not
the first
take
the
for
medium sized
and
which
created
was
does
of
Edward
McCo
mick's
practical step toward
finding a reassuring answer to the
above question. Its object was to
Commercial Finance
and
purpose
and
T.
on
encountered
old
and
was
have
Among others the In¬
terprising.
small
go-ahead
more
dustrial
financiers
credits
"Oscar
President,
Mich.
&
wealthy men of ad¬
"We are now doing
often
named
noteworthy improvement in this
respect.
the
Duties
has
for
year,
DETROIT,
The establishment of the Estate
innovations.
War
Industry"
an
Mr. Arbogast was previously with Stock Exchanges.
He was previ¬
change
ously with Schwabacher & Co.
those Morgan & Co.
such
gloom
with
age.
remark
ing to incur the risk and trouble
with
consecutive
awarded
With Hornblower
Exchange,
quite well, but what will happen
when
tion, and which secured them ade¬
quate remuneration without hav¬
the
casts
third
banking
by
not in¬
were
of
prospects
control
controlled by
types of business which
they had brought to near-perfec¬
Since
London
run
connected
lished
associated
long
The
inclined
were
achieved
proprietors
new
the
been
'thirties
they allowed its son, Jr. have become connected
capital assets to deteriorate and with Wagenseller & Durst, Inc.,
its good will to decline. Nor were
626 So. Spring Street, members of
they concerned with the welfare
the Los Angeles Stock Exchange.
of their staffs.
medium-
inland
be
terested in the welfare of the firm
.
to
Generally
the
however,
houses
.
time
deficiencies,
respect
credits and
term
to
the
correct
to
from
made
on
could
may
solely
of making
a
the investment.
purpose
end
owners
control
plowing back a large part of
profits into the business. As
the
h.uizig
were
notably
of
were
ly lacking.
Efforts
new
paying out high dividends instead
respects
almost
the
the
for
Stock
and
the
profit
This
In
The
bought
the
quick
unsur-
facilities
view.
for
had
passed.
Dr.
of
have
new
American
through
possibly
operations
often detrimental from every point
or
public
ge
issues
during
black with the aid of short-term
accept¬
through ance credits to London, renewed
succeeding in evading taxation. every three months.
These ac¬
They utterly lack the traditions
ceptance
credits
became
hope¬
and high principles of the former
lessly frozen in 1931. Some of the
owners
who
had
controlled
the
bankers at any rate realized that
business firms for generations.
they might as well grant longThe result of the change was
term facilities to British business
facilities.
The
has
freezing of credits to Cen¬
made
often
LONDON,
is
exports
Bennett, Smith
Wins Award 3rd Year
the
long
for
Exchange
necessarily safeguard their liquid¬
ity.
German banks during the
'twenties granted long-term cred¬
and
to
of
provide
to
American
the
tra¬
community realize that insistence
installation of facilities for realization of
large blocks of securities sold
the
unwillingness
market
Europe
has
in London's financial
gaps
attitude
Under
competition
facilities
The
recent departure
a
it"
weakening.
of
inadequate and one-sided facilities
leave
or
upheld.
of
ditional
By PAUL EINZIG
Commenting
it
be
pressure
19
Licensed as Private Bankers and subject to examination and regulation by the Superintendent of Banks of the State of New York
and by the Department of Banking of the Commonwealth of Pennsylvania. Subject to supervision and examination by the Commis¬
sioner of Banks of the Commonwealth of Massachusetts.
20
The Commercial and Financial Chronicle...
(1340)
9. S.
Market Trends
the relative impatience
buyers vs. sellers, Mr. Babson lists as factors to be consid¬
ered in measuring this factor in stock market: (1) amount of
free cash over credit available; (2) relation of prices to busi¬
ness conditions; (3) confidence in the future; and (4) political
and labor interference. Holds investors having and using cor¬
rect data to guide them have greatest opportunities in market.
It
is
most people
how
strange
mar¬
kets go up
are
more
go
down
than sellers,
buyers
h
w
or
more
are
than
buyers."
Yet,
is
this
non-
seller,
vice
lined
depend
Or,
are
being
bullish
and
bear¬
"outlooks."
the
speak
to
Roger W. Babson
techni¬
both
zines,
or
services.
of
number
shares
for
con¬
in
published
are
newspapers,
maga¬
or
by competing investment
This is very unfortu¬
It is like releasing each day
cally, when the number of shares
two
of stock wanted, multiplied by the
completely
relative impatience of buyers, ex¬ forecasts!
the
day
Every
opinions
same
nate.
ceeds
today is
investors
above,
with
trary
j>e)Uers.
more
Final Thought
unfortunate thing
ish
tience^of\buyvsk
has
Businessmen
opposite weather
investors will
and
position
more
difficult
not
stand
always
this
for
non¬
adver¬
high
as
the 1935-39 base.
little
a
more
to
than the
afford,"
growth in the grossRational prod¬
"Survey" editorial continues. "In uct.
But although
the average
pursuance
of
such- programs,
consumer has no desire for more
budgets were kept out of balance,
high pressure salesmanship and
money supply was expanded, and
although he has no time to read
wages
were raised
without re¬
or listen
to even greater quanti¬
gard to changes in productivity.
ties of advertising, he does wish
The resulting inflation; naturally
better goods at more attractive
widened
the disparity
between
prices. It will be a blot on the
internal
purchasing
power
and
American system of private; en¬
exchange
rates, and
made the
terprise and a reflection on the
problem
of
international
pay¬
were
ments
The
greatest
than
obstacle
ever."
to
con¬
reliance
less
be
resourcefulness of American
man¬
agement if
unemployment devel¬
ops because business concerns are
on
.
countries
favorable
as
themselves,
to
tended
fix
to
as
moist
the
ex¬
value of their currencies
change
too
to^make the
trade'
of
'terms
possible
policies of the United States,"
according to the bank publication.
"Repeated demands are made for
lower
American
tariff
rates.
Americans
are
in
full
This mistake was partly Many
by the general devalua¬ agreement with this view.
sense.
I foretell that some day
tion of 1949. Yet the 'dollar gap' Too little is said, however, about
rise. The reverse of this rule de¬ the FRB or the SEC will interest
continued.
This gap was simply foreign tariff barriers. The oftenthe IBM in making a million-dol¬
termines when prices decline.
a reflection of the fact that most
repeated argument that interna¬
lar
machine
which
will
daily
Patience vs. Impatience deter¬
sale, multiplied by the relative
impatience of sellers, then prices
as
This rise is
no
or
more
more
tising. The "Printers' Ink" adver¬
tising index is running about five
times
in
is
he
still
to
vertibility, "The Guaranty Sur¬
unable to persuade consumers to
vey" believes, is that nations de¬
cut their present high volume of
a
unilateral
action by the United mand
degree of
sovereignty
saving by about $5 billion a year
States in lowering trade barriers over their internal economic af¬
and raise their spending by the
and
stimulating foreign invest¬ fairs that is inconsistent with any
same amount.
ment.
Also, it should be made set of lasting parities among cur¬
A second way in which business
Unless the nations at¬
clearer how lasting convertibility rencies.
can prevent or check a recession
is to be reconciled with other na¬ tempting convertibility are pre¬
is either by maintaining outlays
tional objectives.
pared to adjust their economic
on plant and equipment at about
"Convertibility has not been policies to its requirements, "no
by increasing
achieved
because
it
has
been regime of convertibility can be present levels or
dividends. It is possible that en¬
subordinated to other objectives," more than temporary." *
"A lack or realism appears to terprises even today have so many
"The Guaranty Survey" contends.
exist with respect to the trade unexploited investment opportu¬
"First, in an effort
also
should
fed
the rel¬
ative
impa-
upon
ers
monthly publication of the Guar¬
anty
Trust
Company
of
New
that, due either to inexperience or
to lack of the necessary data out¬
Market
trends
Guaranty Survey,"
rules
One
and
October
would be more promising if this
fail to
act upon the
(since only 5% have progress had taken place with
correct data to guide them) one less American aid, and if less re¬
liance were placed on further fican
appreciate the great oppor¬
tunities awaiting those few in¬ nancal assistance," is the opinion
There
vestors who do have and do use of the bank publication.
The
versa.
"The
the
sciously,
be
must
of
in
York, finds that U. S. aid abroad
hindered rather than helped
return
to
currency
converti¬
more
ways
of doing so.
When
one
considers that fully 95% of bility.
"The outlook for convertibility
investors, consciously or uncon¬
buyer
every
there
editorial
issue
such data.
For
sense.
An
that
newspapers
less immune
convertibility.
to
a
above
there
en
sellers
a
"when there
with less reliance
says,
ing trade barriers, foreign nations would endeavor to return
upon
of
believe that stock and other
Survey"
financial assistance and unilateral action by U. S. in lower¬
on
Asserting market trends depend
whelmed with vast quantities of
advertising from the radio, tele¬
vision, magazines, billboards, and
Foreign Aid Seen Hindering Convertibility
October issue of "Guaranty
By ROGER W. BABSON
Thursday, October 8,1953
high.
rectified
.
.
.
nities that
they will wish to con¬
and equip¬
approximately the present
rates.
That, of course, would be
a
major contribution to the main¬
tinue to spend on plant
ment at
tenance
of
ployment.
a
high level of
It would not be
em¬
sur¬
prising, however, to find that
enterprises, after several years of
street high outlays on plant and equip¬
Economic ment, wish to spend less for a
case
"Difficulties have been aggra¬ health
demands
general
trade year or two. In that event, there
weather forecasts, such business
stocks, this is determined by the
vated by the insistence of many liberalization,
not a free - trade is no excuse for corporations to
and investment forecasts will not
relative patience of perhaps only
countries
upon
living standards United States in a protectionist continue to pay out less than half
two
of their earnings after taxes, as
persons.
In the case of a always be correct; but they will and social programs which they world."
be honest and not contradictory.
listed stock, the relative patience
they have done in every one of
of all would-be sellers or buyers
the last 11 years except 1945. So
Continued from page 5
of that one stock must be consid¬
long as corporations were financ¬
currencies
mines
profits and losses.
In the
of
very
inactive
unlisted
When endeavoring to fore¬
ered.
compute
intelligent
the
NY Inv. Ass'n
averages
as
whole, the relative
a
considered.
be
\
Measuring
measuring the relative
patience of all stockholders, there
four
factors
Amount
of
to
consider:
Cash
Free
(1)
Credit
or
Available; (2) Relation of Prices
to Business Conditions; (3) Con¬
fidence in the Future, and (4) Po¬
litical
and
Labor
Interference.
.
This
last
added
Gold
would
the
if
not
nation
need
were
In
trend of any
industry,
watch: should
the
on
a
series
lectures and
two
Trinity Place on Wednesdays. The
first
lecture
on
Interest Rates"
the
was
Marcus Nadler on
"Outlook
for
given by Dr.
Oct. 7.
quent lectures scheduled
Oct.
Subse¬
are:
14—The Outlook for the Do¬
mestic
be
Economy
/
Dr. Jules
Backman, Professor of
Economics, N. Y. U.
make
or
for
new
industries
profitable the
very
affected.
Hence, the
of' spending
large sums on research; also of
keeping informed of the secrets
great
importance
which
the
those
to
veal
constant
going
Patent
Office
on
Can
of
re¬
pay.
willing to
watchfulness
for
what
is
there.
Opportunities for Investors
The
above
means
J. H.
constant
a
kept
that
the
de¬
to
buy or sell stocks—"de¬
sire" being a synonym for "pa¬
tience" is determined, first, by the
Whitney & Co.
Oct. 28—Panel Discussion
Dr. Jules I.
Bogen, Professor of
Finance, N. Y. U.
Raymond Rodgers, Professor of
Finance, N. Y. U. 1
Nov.
.
4—The Long-Term Outlook
av¬
A
Because of the
sixth
knowledge of the above two Tuesday,
factors
should
determine
sires of investors based
the
on
de¬
present
sessions
holiday Nov. 11,
meeting will be held
Nov. 10, but all other
will
be
on
consecutive
the
future.
But
the
future
power to pre¬
vent
recession and that
a
sion, therefore, is quite
a
reces¬
unneces¬
sary.
What
can
lines
Four
and should
of
policy
be
done?
particu¬
larly worthy of attention. Two of
are
them
should be pursued
ness.
The third and fourth should
is
two-way
a
ways.
ing large purchases of plant and
equipment, the plowing back of
half or more of profits was desir¬
the
event
to
The
by busi¬
that
avert
business
a
alone
is
contraction.
able.
of
in 1949.
small
As
rise
*
a
in
result, there was a
consumption " ex-,
penditures in the face of
a
small
fall in personal incomes both be¬
fore
and
1949
promising way of
contraction is to bring
a
about
drop in the rate of
are
receive
about to
lions
a
moderate drop in
not
bil¬
several
in tax cuts.
year
Hence,
a
business would
prevent corporations from in¬
Enterprises creasing dividends by several bil¬
lion dollars a year.
Such ah in¬
selling goods in
after taxes.
helped in
were
by the backlog of
accumu¬
crease
would
effects.
have two favorable
increasing personal
Even today, however, it is not un¬ incomes,
it would improve the
reasonable to expect business to opportunity of business concerns
persuade individuals to cut their to sell more consumer goods and
savings by $5 billion a year and by raising the yield of the per¬
to increase their purchases by an sonal income tax it would enable
equal amount. After all, the po¬ the government to make bigger
lated
demand* that
still
tential demand is there.
existed.
Individ¬
By
cuts in this tax than would other¬
already have the money, but wise be possible.
they are saving it, not spending it.
IV
uals
In
to
order
goods
sell
$5
billion
more
consumers'
in
sumers
more
This brings me
a year,
means
most
averting
With Shaver & Co.
7.7%
business has only to
be adopted by the government in
compete more effectively with the
unable
Wednesdays.
conditions, but without reference
to
both
,
.
the
erages.
in
government not to do all
for Equity Prices
President, Argus would threaten the success of our
foreign
policy.
And
even
the
United States, rich as it is, should
Nov. 10—The Institutional Market
not complacently accept the waste
for Equities
of
several millions of unneces¬
Dr. Jules I. Bogen, Professor of
sarily unemployed. Consequently,
Finance, N. Y. U.
business and government should
Nov. 18—The Outlook for Corpo¬
take steps to prevent a recession
rate Bond Financing
from developing here.
I believe
Arnold LaForce, Vice-President,
that
business
and
government
Metropolitan Life Ins. Co.
have it within their
or
dustries, divided by the stock
trade
Furthermore,
in the
circum¬
personal incomes after
their power to prevent a drop. I taxes; in the second quarter of stances of the last few years a
do not agree with the view one
1953- savings were 6.9%
of per¬ high rate of corporate saving was
hears frequently expressed that a sonal incomes after taxes. It ought a much-needed check on inflation.
mild recession would be a good to be possible for business to in¬ But if a drop in investment out¬
thing. Typical of such views is duce consumers to reduce their lays by business concerns threat¬
ens a drop in production and em¬
the remark of W. H. Brenton, the rate of saving to about 5%
of
President of the American Bank¬ income after taxes. This is higher ployment, the retention of such
ers Association, at the
meeting of than tiie rate of personal saving large quantities of corporate earn¬
the
Association
in
Washington that existed in 1929, 1939, 1940, ings will become quite inappro¬
that a "slight slip" in the econ¬ or 1949 and only slightly less than priate. Business cannot afford to
assume the responsibility of sub¬
omy would be "healthy."1 Within the rate in 1948 or 1950. At pres¬
this country the effects of a mod¬ ent income levels a 5% rate would jecting the economy to the power¬
deflationary pressure that
erate recession would not be par¬ still leave personal savings of over ful
would be generated by the reten¬
ticularly serious, but the effects $12 billion a year.
tion of large amounts of corporate
on some other countries could
be
A reduction in the rate of per¬
grave and could threaten our lead¬ sonal saving to about 5% of per¬ earnings during a period of con¬
traction.
ership of the free world. Further¬ sonal incomes after taxes would
It is true that a drop in produc¬
more,
even
a small
recession rai$e the outlays for consumer
would
strengthen the already goods by about $5 billion a year. tion and employment would itself
strong demands for additional re¬ When production and employment produce some drop in earnings,
strictions
on
imports into this-: fell off in 1949, business succeeded' but this drop would be cushioned
country.
Additional restrictions in reducing the rate Of personal by present high rates of corporate
would injure us economically and saving from 5.6% in 1948 to 3.6% taxes.
Furthermore, corporations
and
Harold Dorsey,
Research.
credit available with Nov. 25—Panel Discussion
which to buy. This information is
Dr. Jules I. Bogen, Professor of
obtainable from government re¬
Finance, N. Y. U.
ports of various kinds. Second* by
Martin
R.
Gainsbrugh,
Chief
actual business conditions, indi¬
Economist, National Industrial
cated weekly by hundreds of com¬
Conference Board.
pilations covering 85% of all in¬
money
tional
works
re¬
The New Outlook for Business
panel discussions to be held in the
Devine Room of N. Y. U. at 90
be
to
discoveries, new inventions, and
new
products. These can either
sire
is sponsoring
York
overvalued in
of
Association
Standard, as
during
the
Oct. 21—Venture Capital
preceding the 1930's.
Robertson D. Ward, Partner,
determining the long-term
years
ruin
Investment
of six one-hour
When
are
The
were
lation to the dollar.
Securilies Course
New
Patience
Like
Sponsors
cast the trend of the stock market
patience of all stockholders should
business
forecasts.
investment
and
desire
the main
more
to
save.
offering
attractive
This
con¬
goods
at
of
what
to
prevent
I
or
business
to the question
can do
government
check
have discussed
of
economy
attractive pjices.
the
first
a
recession.
the contribution
because
which relies
in
an
heavily on
Of course,
business needs to private enterprise, the first steps
to
prevent a recession should be
point out the improvements in its
Hence, the importance of
parently occurred during the last goods, but I; do* not believe that taken by business. But the gov¬
ST. PETERSBURG, Fla.-^Tohnthe third factor—namely, Confi¬
ernment should be prepared to
few months. In the last quarter of
requires the use of high pressure
dence in the Future.
This is a son S. Savary has become connect¬ 1952
*.
personal saving was about salesmanship or of advertising on help.
should
also
be
studied
and
con¬
more
but
difficult factor to
we are
sonal
(Special
sidered.
measure;
to
The Financial Chronicle)
ed with Shaver &
Company, Flo¬
constantly discovering rida Theatre Building.
a
saving.
INtw
p.
34.
York
Some drop has
"Times," Sept. 21,
>.
per¬
ap¬
,
an
1953,
even
can
bigger scale. The Ameri¬
consumer,
today
is
so
over¬
There
are
two, principal
steps
that the government can take; One
Number 5262 ...The
Volume 178
to
is
other is to
By cutting
government increases
cut
spend
the
taxes;
money.
more
(1341)
Commercial and Financial Chronicle
cuts
in
would
the corporate income
not
result
tax
much imme¬
in
years
not
But
even
this
believe, however, that mone¬
and credit policy should be
used as a
major instrument for
in production and employment can
be avoided. Success in
preventing
two
uncer¬
prevent possible recession,
tary
been somewhat unpre¬
has
dictable.
21
would
drop
a
purchase of tainty does not destroy.-the con¬
It would clusion that cuts in the personal fighting contraction in the United a contraction would be a major
income tax will help halt contrac¬ States for another year or so. The accomplishment. It would prevent
viduals and enterprises and thus help companies to pay their debts
or to
build up liquid assets, and tion of business. The cuts in the use of credit as a major instru¬ a growth of conflict and tensions
puts business in the position to
income tax create a potential mar¬ ment would involve further in¬ within our own community.
It
sell more goods to individuals and after a year or so the improved
financial condition of enterprises ket for goods. The additional in¬ creases in personal and corporate would
enormously ■ enhance the
enterprises. By increasing expend¬
There has been a confidence of the entire free world
come
is there.
People will buy indebtedness.
would encourage them to spend
itures, the government directly
provided
business
enter¬ rapid rise in such indebtedness in the soundness of American eco¬
on
plant- and equipment.
This more
raises the demand for goods.
A
A nomic institutions and in our ca¬
favorable effect, however, would prises
persuade
them that
the during the last seven years.
third possibility is for the govern¬
goods are worth the additional pause in this increase for a year or pacity to manage our affairs.
It
ment to cut both expenditures and be a delayed one.
the
taxes,
the
taxes
after
incomes
indi¬
of
taxes, but to cut taxes more than
expenditures.
Under present cir¬
cumstances, however, I fear that
large cuts in expenditures are in¬
compatible with national security.
The government made
contribution to
sion
of
which
had
major
a
limiting the reces¬
The
cash
budget,
1949.
surplus of $8.0 bil¬
lion in the calendar year 1948,
showed a deficit of $1.3 billion in
a
the year 1949r—a change in an in¬
increase in the
diate
goods by the companies.
Cuts in the personal income tax
and in the excise taxes would have
expenditure.
What more can bus¬
in
would
desirable.
be
Hence,
fighting
a
opportunity to sell? The additional
than income would be in the hands of
90% of their income after taxes consumers. It would only remain
on
consumer
goods.
About 40% for business to persuade them to
of income receivers do no saving spend it.
To the extent that en¬ policy.
V
—they spend their incomes as fast terprises were able to convert the
as they
The whole world is wondering
receive them. Such per¬ potential demand created by in¬
sons
are
found
in
all
income come tax cuts into real demand, whether the Korean War boom
uals
Individ¬
immediate effects.
more
as
whole spend
a
The
brackets.
more
proportion of
per¬
sonal incomes spent for consumer
greatly strengthen the in¬
contraction in the fluence of the United States
near
future, the
government throughout the free world. Other
should rely more heavily on fiscal countries would slowly
dare to
policy (that is, tax cuts or in¬ assume that our enormous econ¬
creases in spending) than on credit
omy, roughly equal in productive
iness enterprises ask than such an
all
to
power
outside
world
becoming
a
of
the
rest
the
of
the iron curtain,
is
sort of anchor to which
they could tie their economies,
se¬
cure in the belief that
steady ex¬
pansion here would furnish a basis
watches with anxiety because even for steady expansion throughout
they would tend to halt the con¬ will be followed by a recession in
traction
of production and
em¬ the
United
States.
The
world
flationary direction of $9.3 billion. goods tends to rise in periods of ployment.
Thus far I have said nothing the mild recession of 1949 caused the free world.,
are get¬
V,
ting smaller. Hence, there is a about monetary policy as an in¬ serious difficulties in many coun¬
strong probability that more than strument for combating contrac¬ tries. The world does not have
Joins Clement A. Evans
90% of any additional income re¬ tion.
My remarks on this point great confidence in the stability
(Special to The Financial Chronicle)
ceived by individuals as a result will be quite brief. I grant that of the American economy or in
the central banking authorities (in the ability of American business¬
ATLANTA, Ga. — Thomas H.
contribution of the government to of tax cuts will be spent promptly
for consumer goods.
the United States the Federal Re¬ men and the American govern¬ Stafford
has
become
associated
stability took the form of more
It must be conceded, however, serve System) in a period of con¬ ment to keep the economy stable. with Clement A. Evans & Com¬
expenditures rather than smaller
Even
this
large change, plus the
contraction when incomes
of business in
substantially
reducing the rate of personal sav¬
ing, was not entirely sufficient to
avert a
recession.
In 1949, the
success
collections.
revenue
Tax
rates
not reduced after the reduc¬
were
of
tions
early
1948 and cash
re¬
ceipts of the Federal Government
the
in
calendar
1949
year
were
that
many
consumers
come
provided by
behavior
of
tax
cuts.
in
consumers
either reduce
not traction should
may
promptly spend the additional in¬
The
recent
serve
requirements
easier
for
to
the
commercial
it
banks
replenish their reserves.
I believe that if the
re¬
make
or
I
do
recession is clearly
ness
danger of a
Inc.,
pany,
by busi¬
seen
Building.
First
He
government and that if King Merritt
and
business
and
government
was
National
formerly
increased
ever,
to the past with Fenner & Beane.
act
the public, how¬
billion be¬
$5.8
tween 1948 and
1949—largely due
to greater defense
outlays and
ex¬
penditures for the support of farm
products.
Until
two
I should
three
or
months
for
ago
unhesitatingly said
that the better policy for the gov¬
ernment to employ against a re¬
cession
Mitt0
have
THE
IN
would be to cut taxes
now
CITY
CLEVELAND
OF
because present tax rates are dan¬
gerously high.
On narrow eco¬
grounds. I should still say
under present circumstances
Founded 1849
nomic
that
cuts
tax
prelerable
are
spending.
government
economic
than
involved.
to larger
But
Russia
TRUSTEES
more
considerations
are
apparently
Warren
her
deliver
United
be
that would permit
form
a
to
but that
States,
only
several
defense
bomb
the
years
Robert F. Black
may
Our
thorough reconsideration.
When that thorough reconsidera¬
has
been
conclusion
perhaps the
given,
will
be
by ceasing to make
reached
and
a
lot of
Frank M. Cobb
Director, The Cleveland Electric Illuminating Company
T. J.
appa¬
Chairman of the Board,
Ernest C
from rising above present
But even
if
that happy
conclusion should be reached, one
may
as
little
as
build
its
be plainly stated—that
this country is doing
it
as
Defense
Air
there is
no
plenty
let
But
to
or
Command
excuse
for any
unemployment.
or
us
of
return
tax
cuts
signifi¬
There
briefly to the
which, I have
to larger
expenditures.
What
government
how much
good and
good would
they do? In a period of threat¬
recession, the tax cuts that
would do the most good are those
that would increase the ability of
individuals to buy consumer goods
rather than those which would in¬
the
ability of corporations
goods.
In other words,
the personal income tax
buy
in
cuts
in
the
excise
taxes
would
J
on
$ 19,899,559.42
Hand and Due from Banks
"i-:
n
.«
United States Government
(Including $15,200,000.00
as
Obligations.
,
.
,,
.'
.
77,665,907.67
,
Lawful Reserve)
Thompson Products, Inc.
32,810,811.90
Other Investments
Dempsey
First
President
Mortgage Loans
on
Real Estate
112,246,963.90
....
45,542,566.14
Other Loans and Discounts.
Bank Premises
.
.
.
.
.
.
1,161,502.71
.
Interest Accrued and Other Assets.
.....
1,408,120.47
'
Frank C. Lewman
Chairman of the Board, The Richman
Brothers Company
Total
James L. Myers
.
.
.
.
■
>A
»•
.
.
$290,735,432.21
Chairman of the Board and President,
Clevite
Corporation
LIABILITIES
Laurence II. Norton
Director, The Columbia Transportation Company
Drake T.
Perry
Secretary, The Harshaw Chemical Company
Ralph S. Schtnitt
$ 17,000,000.00
Surplus
Reserve for
Contingencies
1,745,603.86
.
Vice President and Secretary,
The Cleveland Twist Drill
Company
Reserve for
Henry S. Sherman
Taylor
Executive Director, The Cleveland Clinic
Herman L. Vail
Foundation
Steele
2,093,731.41
.
.
.
248,872,653.53
Deposits
18,049,924.37
.
Deferred Credits and Other Liabilities
John S. Wilbur
;
.
Savings Deposits
Other
.
Attorney, Sayrc, Vail &
Taxes, Expenses & Dividends on
Deposits
Chairman of the Board
Clarence M.
.
.
.
.
,\
2,973,519.04
Vice President, The Cleveland-Cliffs Iron Company
Arthur P. Williamson
Total
President, The Dill Manufacturing Company
United States Government
pledged to
do
.........
'
1
in the cor¬
The reason is
very simple. In a time of business
uncertainty, corporations are quite
cautious about making new out¬
lays on plant and equipment. Un¬
more
Cash
■■
Mervin B. France
ened
and
;
Director, The Ohio Bell Telephone Company
kind of tax cuts would do the most
to
r
President, Wheeling and Lake Erie Railway Company
grounds
Gn narjrow economic
much to be preferred
crease
- - •
Randolph Eide
to
today is doing.
said,
are
.
^.
George Durham
that needs to
of work
be done that no one
matter
today
defense
doing
cities to atomic attack,
cant rise .in
is
is
civilian
its
up
adapt its
'
Attorney, Squire, Sanders & Dempsey
levels.
long
t •• t:,
Frederick C. Crawford
still
be kept
so
Conway
President, The Fisher Brothers Company
weapons
the defense expenditures can
thing
RESOURCES
Attorney
that
that are not
adapted to the thermonuclear age
ratus
^
Harold T. Clark
program
require
tion
1953
September
President, The White Motor Company
Charles B. Bolton
President, Payne-Bingham Company
day
off.
and
strategy
the
in
CONDITION
OF
STATEMENT
President, The Cleveland Construction Company
has
the hydrogen bomb—probably not
yet in
Bicknell, Jr.
secure
'
:
.
$290,735,432.21
...
Obligations carried at $13,600,000 00 are
Public Deposits as required or permitted by law.
good than cuts
porate income tax.
der
such
to
MAIN
the
few
most
AT
2
CONVENIENT
OFFICE
SOUTH' EUCLID
circumstances, corpora¬
tions confine investment
tures
NOW
127
PUBLIC
BRANCH
LOCATIONS
SQUARE
4461
MAYFIELD
ROAD '
expendi¬
attractive
opportunities. Putting more funds
at-the disposal of corporations by
MEMBER
FEDERAL
DEPOSIT
with
& Co., Inc., and
only $3.4 billion less than in 1948.
Cash payments to
Bank
INSURANCE
CORPORATION
in
The Commercial and Financial Chronicle
Thursday, October 8, 1953
...
(1342)
22
feature
Good—As Far As It Goes!
Utility Securities
Public
the
By OWEN ELY
"
the
duction of
California
timated
about
at
17
'
will"
for
run
Gas
about
15
years
on
Pacific
Public
Service
furnish
and other
firm
-------
_
has
Ipeen selling recently
—-
now
be
the
"Financial
freely., This
the
affected
Chicago office.
error
been
as
Mr.
with
du
Pont &
This
Goldman,
Sincere
and
of
Co.
in
was
in
who
Co.,
joined
was
Francis
not
has
Company
I.
du
Pont
formerly in the
&
se¬
curities business.
"The
in
gas
first
Eastman, Dillon Branch
the
security
the
.
.
member
undertaken
enlarge the
iway
lion
banks
Of
1953.
this
around $2
up
the
during
-
bil¬
C. U. Johnson With
half of
$1 billion
second
amount
Olderman,, Asbeck* Co.
could be expected to come
step, begun
in • May "but
was
billion govr
purchase of $1.1
bank
very
during
the July-September quarter. The
actual rise experienced from July
1 to Sept. 23 amounted to .$450
million. - Consumer. loans
ex¬
are
(Special
is
Johnson
with
of
market .''since
sharp de¬ bought State and, local govern¬
from-, the ment-obligations more .actively
Federal
Reserve,
and relieved: and have considerably enlarged
fears that there were not going to their holdings of U. S. government
be enough, loan, funds to take care obligations., The supply of mort¬
of seasonal requirements of the gage
money
has 'improved and
Treasury and business during the, present indications are. that, the
_
built:
2 10
nf
stock
in
branch office at 105 East Penn¬
sylvania Avenue, under the man¬
agement of Archie E. Rhinehart.
the
second
25,
spring, although at that time
many
As
people
over
cern
a
expressing con¬ Field,
of the rise.:. thereto
were
the
Chronicle)
Ohio—Floyd
June,
banks
year.
rise
/.
announced
step,
effective
become
"
"
C.
July
1-9,
was
cates of indebtedness
in
income
of
next
Corporation
group on
from
to Hear
Down
will
'
collections.
funds
"Silicones."
March's
anticipa¬
in; total
this
ness
indebted¬
exceed the
recorded in
mortgage
will
year
billion
$8.8
increase
Corning
address
the
August,
were
drawn
and
increased
customer
reasons
to
show
although there is
surplus
down
these
tax- have failed
;
'
associated
"During
&; Co.,
mem¬
Stock
bank
by gold
loan
de¬
that'
are
fate structure.
no
w e r e
September, however, the
continued
their
pur¬
4-6
ORLEANS*.La.—William
Perry Brown, Jr. has become as¬
sociated
months'
ernment
the
price
already
money
into
comfortably
with
Kohlmeyer. &
Carondelet
217
Co.,
members
the New York Stock Exchange.
of
'
Street,
With Renyx Field
^(Special, to The Financial Chronicle)
NEW
ORLEANS,"
Anderson is with
La.
—
D.
if.
V.
Renyx, Field &
Company, Inc., Carondelet Building.
'
-
!
Joins Beecroft,
reaction
Open market
—
straight
money
generally softened;
commercial
eased off from 2%
chases of government securities to
point of forcing
to ,The Financial Chronicle)
(Special
NEW
Cole
to The Financial Chronicle)
(Special
question but
Sept. 29 the offered rate
government- securities
market
of
w
.'.*•••'
•-
being
of
a
invest¬
name
KANSAS CITY, Mo;—Elizabeth
extended R.'.Judd
has become associated
with Beecroft,r; Cold & Company.
freely under the established
loansl*
more
rates have
authorities
own
Ex¬
with
prior
Joins Kohlmeyer Staff
loan,rates
any
mands. Federal Reserve purchases
small. In
conducted his
have Johnson & Co..--:
'
$1.1 billion reduction in mem¬ 1952.
ber; bank, cash reserve require¬ ;"Bank loans are as high as they
ments. This relief was sufficient ever have been at this time of the
Blaine & Co., 4519
Chicago Analysts
speaker
..
Building,
Midwest
to the easier .money ment business under the
response
a
Maine Avenue.
A
the
a
tion
(Special to The Financial
has
Asbeck
He was formerly
Richards & Co. and
speed
borrowings
second half of
June
bank-excess
j up
produced
reserves,
sale
npen
market.;. Thesej operations,
cline
recent
the
t
associated
become
Commerce
history,
in
Blaine
Stineman
has
\
Olderman,
„
Union
which
put
Federal ( Reserve
holdings
of
government securities up to
$25 bililon fob; the first time in
securities
Kirkpatrick - Pettis
Company, Omaha National Bank -to maintain the money market in year and additional,seasonal ex¬
a
position of ease in the face of pansion in loans, together with
Building.
the Treasury's sale on July 15 of seasonal drain of cash from the
$5.9 bililon nine months'; certifi¬ banks,
lie
directly
ahead.
For
Perry
Adds
with Perry T.
Financial Chronicle)
change.?
with
ASHTABULA,
The
to
CLEVELAND, Ohio—Claude U.
the
•OMAHA, Neb.1—Joseph V.'Fran¬
co
,
more
concentrated in June,
ernment
CHICAGO, 111.—The Investment
SOUTHERN
PINES,
N.
C.— Analysts Society of Chicago will
Eastman, Dillon & Co. has opened hold a luncheon meeting Oct. 22.
to
ppsing
small
a
mainly
outflow
a
Co., members of principal
and
commodity
ex¬
changes, Oct. 5 opened an office
in Los Angeles, 523 West Sixth
Street.
The head
office of the
firm is located in New York City
Weld &
move
lend
third
have
five months
over
(Special to The Financial Chronicle)
for many years, is still associated
with them. Charles Goldman who
has
to
the
was
authorities
.."The
Goldman, formerly of Sincere and
Company, had become associated
their
bv
Angeles Office
ANGELES," Calif.—White,
loans
to
business, mainly Harris, Upham & Co. He is Presi¬
short-term credits. A normal dent of the Southern California
seasonal rise would put business Association of Customers' Men.
loans
of
the
weekly
reporting
of gov¬
• thus
to
supply of loan i funds.
With Kirkpatrick-Pettis
Oct. 1, it was reported that Charles
Francis I.
Credit
Los
1 LOS
panding less rapidly than .'during
a
Chronile"
with
WUIt, WeM Opens
bers
l-for-7 subscription basis.
The
around 37^ to yield about 5.9%.
Correction
In
banks
encourage
2.62
Jo?o
by Walston & Co.
with the Hartley
Bank
through purchases
ernment
securities, and
$2.82
1950
earnings will
about 1,947,000 shares on
been
2.52
30, 1953_'__"__1__"__*
1951
Share
absorbed
which
Company,
Rogers ,&
had
2.14
months ended June
Calendar Year 1952
'
of "the
ket,
Until the recent increase in the
dividend rate1 td $2.20, Pacific
Uas & Electric had paid
$2 for many years. Share earnings as
s ated in the recent
prospectus, basdd oh average shares outstand¬
ing, were as follows:
12
Jones
E.
Hart¬
Rogers firm for 20 years.
Sees lag in bank loan expansion.
market.
issue
funds into the money mar¬
excess
Pacific
electricity and part of its natural
(a subsidiary producing the balance).
requirements
right about the
was
of
dent
Jack
Presi¬
>
electricity in certain areas south of San
larger number of customers in those
It purchases from
thereto
was
supplied..
excess
reserves
and branches are operated in eight
Letter" ;of the' were pushed up to a daily average
other American cities and also in
of
$750
million
while
average
City Bank of New York
London
and
Amsterdam. White,
reviews money market develop¬ borrowings from the Federal Re¬
Weld & Co. is a leading under¬
ments in recent months and finds serve fell below $500 million. The
writer of municipal and corporate
tight credit conditions were fur¬ view now prevalent is that the
securities, being particularly iden¬
in
the. weeks
ahead
ther eased in September by Fed¬ authorities
tified 6 with
securities of natural
will release additional funds in
eral Reserve credit policy.
gas production
and transmission
the market, by further open mar¬
According to the survey pub¬
companies.
lished
in
the
"Monthy
Bank ket operations or reserve require¬
Paul J. Anderson will serve as
ment
Letter":
reduction, thus limiting manager of the firm's new Los
needs of banks to borrow up to
Angeles office. Mr. Anderson has
"Symptoms of weakening in the
the peak of seasonal pressure at
recently been associated with the
boom, and the failure of bank
the year-end.
Los Angeles office of Hemphill,
loan expansion to make a normal
"The lag in loan expansion is Noyes & Co., prior to which he
rise, led the Federal Reserve au¬
was with Shields & Company and
thorities in September to pump most apparent in the category of
gas to a
in northern California.
G. & E. its entire
supply of
the money
October
"Monthly
Company and Southern Counties
areas
&
Prior
National
that company
Francisco, and natural
Co.
stoji
endlessly increasing the national debt.
into
Gas
of
Wai-
of
.
was
The
Service.
the stock
the Seattle of¬
fice
"Monthly 'Bank Letter" of the National City Bank of
New York lists 3 steps already taken to pump excess reserves
& Electric hopes -to aequire and
merge Pacific
Blyth & Company have purchased some 84% of
at $21 per share, and subject to state
and Federal regulatory
approval the stock will be acquired from
Blyth with a view to eventual merger. Subsidiaries of Pacific
Public
of
manager
Eisenhower
Pres.
October
shortage,- the three
pro-rating and pooling agreement.
a
has
he
resident
been
Federal Reserve Easing
Gas Company receive about the same amount of
gas from El Paso
as Pacific Gas
& Electric; in the event of a
companies will work under
one-half
'
Colo¬
a
past three
ley
of
only about 470,000 MCF per day, the agreement dated November
1, 1952 obligates El Paso to sell about 708,000 MCF daily and the
company to purchase 91% of that volume annually, effective Nov.
1, 1954 or as soon thereafter as transmission facilities are in
California
the
he
apparently
For
manager.
We hope he succeeded in impressing us
all with the necessity of calling a halt in this process
area
contract
resident
as
some ; unex-
Byrd
Ave¬
Building,
nue
session
there is some
course,
Senator
While deliveries from El Paso during the year 1953 averaged
The
14 11
Fourth
still
&
Bruce
ton,
Co.,
special
change,
E.
with
prospects.
rado.
Southern
no
and
r
Jack
—
Willis-
R.
He
Basin
operation.
J.
years
any
Wash.
Jones has become associated
thing I should say in the way of prediction."—
Out-of-state gas came primarily from the Permian Basin area
Texas and southeastern New Mexico, and the San Juan
basis*
Williston, Bruce Co.
SEATTLE,
that with
announce
new
Jack E. Jones With
President Eisenhower to Press Conference.
west
southwestern
that
of
flotations."
pected thing, and I would assume you would under¬
stand that such a caution as that is implicit in any¬
of the estimated net pro¬
Mexico and
don't
radical
natural gas; the state's gas reserves are es¬
times the total volume produced during this
of northwestern New
appear
reception accorded
volume
be
savings in expenditures
have been able to make,
anticipate
unless, of
period.
of
favorable
tainly is what the probabilities
are at the moment, so we don't
generated in the company's own plants was hydro power and 45%
steam. Electricity deducted for company use, line losses, etc., ap¬
proximated 18% of the total amount generated and received. On
the selling end, electric revenues were received approximately as
follows: residential 31%, rural 13%, small light and power 21%,
large light and power 25%, and miscellaneous 10%.
Gas sales were virtually all natural gas, the amount of manu¬
factured gas being negligible. During the June period about 53%
of the supply of natural gas was purchased from El Paso Natural
Gas Company (being brought in from outside the state) and 47%
was California gas purchased from others.
The average price paid
by the company was about 21c. The California gas is obtained
almost entirely from gas and oil fields located in the Sacramento
and San Joaquin Valleys under contracts with about 55 producers.
24%
limit
debt
and
corporate
increased
complete certainty, but that cer¬
the U. S. Bureau of Reclamation (Central Valley
These arrangements are described in detail in the recent
prospectus on the common stock issue dated Sept. 14.
In the 12 months ended June 30 about 55% of the electricity
1952 took about
the
study of the Sept. 15 tax re¬
"I
from
in
that
provide the .certainty that all bills
time when presented.
on
through to January' and
have something left.
/
Project).
company
we
asked
special session will be neces¬
sary,
and that we ' will get
$342 million in the
The
to
as
ceipts, make it
American Telephone & Telegraph. The company's revenues
12 months ended June 30, 1953 were 68%
from electric sales and 32% from natural gas. The company is now
in its 48th year of corporate existence, and the 100th year of opera¬
tions including its predecessors.
It supplies electricity to 46 counties in the northern and cen¬
tral parts of California, including 157 towns and cities, some 225
smaller communities, and an extensive rural area.
Gas is served
in 117 cities and towns, 85 smaller communities and a number of
rural areas (in most of which electricity is also distributed). Cities
with population of 100,000 or more include San Francisco, Oak¬
land, Sacramento, Berkeley and Richmond. The company also sells
a considerable amount of electricity at wholesale to municipalities
and other electric utilities, and some gas is also wholesaled.
In the 12 months ended June 30, 1953, the company generated
about 84% of its electric requirements, the balance being received
from other sources. The System interchanges power with the City
of San Francisco under the Hetch Hetchy contract, and obtains
ing
power
so
"The
that
utility as measured by revenues, having passed Commonwealth
Edison, which formerly held the number two post. For some years
it has had the largest construction program of any utility except¬
of
Administration
could be met
the second largest electric-gas
Gas & Electric is now
Pacific
know just before Congress adjourned,
you
raised
Pacific Gas & Electric Company
the
an
"As
the
of
municipal bond markets has been
securities
on
Miss Judd
ner
the
risen
board.
was
Co.
formerly with Zah"
;
-
.
Ross, Borton Adds
paper
*
to 2%%. Gov¬
have
and
prime
and declined in yield
across *
on
(Special
to
1
The Financial
Chronicle)
in
—
The
CLEVELAND, Ohio—Gabe
Sanders is now with Ross, Borton
&
Simon,
Inc.,
1010
Euclid Bldg.
Volume 178
Number 5262
Continued
from
Financial Chronicle
The Commercial and
...
4.
page
great activity in the durable goods
A 'r
and
industries
industry and, in
it
is
When
of
well
considers the
one
decline in
a
directions,
equipped.
many
extremely
sales
possibility
of consumer
be
impressed with the re¬
markable
productivty of the U. S.
to
not
and to avoid the conclu¬
sion that it can more than handle
economy
the likely
demands upon it in the
durable goods, a section of U. S. comparatively near future.
manufacturing in which there has
This is not to suggest that a
been
a
large re-equipment pro¬ severe decline in U. S. business
gram, when, one remembers that activity is in prospect, for there
the
capital requirements of the remain factors of strength and it
defense program
are
well past
their peak and that farm demand
for equipment has
slackened, it
quite
seems
ment in
in
likely that invest¬
plant and equipment and
related
will
construction
not be
activities
high in 1954
as
1953.
It should be added
steel
industry has caught
demand
and
is
as
in
that the
with
up
running
now
slightly below capacity.
of
struction
level
of
this
from
well
over
year's
high
million
a
new
dwelling units.
Here the most
significant factor is perhaps the
that
expectation
mation
will
be
new
tinue.
Administration has put
because
downturn
United
thus
than
more severe
States
of
more
and
rebound
a
likelihood
next
of
last
The
showed
tax
some
And
year.
published
increase
an
figures
the
over
perfectly
that the Admin¬
would
respond -fairly
probable
seems
istration
available
is
of
pre¬
my
It
siderably
would
New
nounced.
Mr. Duffy
uation from the University of
nois.
siderable,
existing prices is becoming in¬
creasingly dependent on govern¬
bears
in the
If
lion.
in mind the
icies
associated
ment
price
support
excessive in
relation
less than $316 mil¬
could
we
deposits
savings
31,
count
on
Delta
a
tremendous
future
tories
prepared by the U. S. De¬
partment of Commerce was 6%
5%
than
in
buying
Korean
the
wave
War.
goods
has
and
set off by the
Practically all
during the past
increase
months
earlier
of the peak reached
excess
in the
year
a
in
the
and
in
been
industries
of
12
durable
view
of
the question about the demand for
consumer durables and of the fact
that the rise in
inventories
partly
of defense
production with its large quanti¬
reflects
the
build-up
ties of goods in process, there may
be a deflationary possibility here.
•
(7)
When it
to
defense,
a
slight decline', in expenditures
—just a few percent—is expected
from
recent
comes
levels.
outlays will
However, the
undoubtedly
remain
very large and we cannot over¬
look the possibility of an increase
in international tension which
might add
noted
of
such
to
spending.
As
above, however, the impact
the
defense
program
be less¬
ening to some extent because the
related
expansion of capital fa¬
cilities is in many directions com¬
pleted and the building up
of
stocks and of goods in process to
support production is no doubt
well
the
with
on
an
we
earth. But
cannot
we
advanced.
an
bound
the
modities
whether
modity
I
But
case.
it
are
of
BOYNTON
sustain
rapid and this is
investment
in
working
some
to
lines
doubt
very
generally
markets
the
would
even
public services, and
for highways.
A very important
expansive influence is the growth
In
related
in
downturn
in' which
way
United
the
the
States
1
those
who
hold
it
see
fit.
In
is
Hugh M.
—
conducting
in
Frank
the Re¬
ham
Shepard,
affiliated
become
D.
Chronicle)
C.
Fla.—Lee
Newman
&
with
Co., Ingra-
Building.
The Public National Bank
AND TRUST COMPANY
NEW YORK of
Main
why
reason
we can
who
spending
are
income
surplus
STATEMENT
CONDENSED
spenders
become
to
Office, 371ir0<id Street
is no
expect
tnere
CONDITION
OF
com¬
.
Canada,
purchases.
have also had
we
September 30,1953
peak.
as we were in 1949 when
in view of the large grain sup¬
slight U. S. reaction did not plies.
With regard to housing,,,
seriously influence the U. S.;de¬ though greater population growth
mand for Canadian goods. I say, strengthens our position relative
this because the supplies of some to the United States, we have a
the
"
which
commodities
export in i similar expectation of a decline in
be more .the rate of family formation be¬
plentiful today than they were at
volume
large
RESOURCES
Cash and Due from Banks
#
•
•
•
«
•
•
•
•
«
#
•
.
$122,517,412.97
60,675,256.34
Securities i
U. S. Government
that
a
downtown
to
across
be noted
probably weaken
change position of many
which
affect
of
some
It is true
in
cause of the low birth rates of the
the
overseas
turn
Fortunately, the Canadian econ¬
has a stronger growth ele¬
might
omy
that the
ment in it than that of the United
sterling
States.
area
Our
population has been
rapidly than
the border owing to consid¬
increasing
point
erable
Canadian
across
exporter,
there is the fact of increased
have
and
goods and there is the
higher
been
larger
tured
pos¬
to
a
a
domestic
such
industries
circumstances
decline
in
the
we
rate
has
and
,
we
declined
in
a
—a
deficit
which
in
is
fact
en¬
ments of
our
Moreover, in
about
U.
observe
the
to
We,
a
brief comments
S. conditions you will
considerable similarity
present
too,
my
Canadian
have been
-
conditions.
experiencing
of fuels
output
we
endowed.
momentum
strong
We have
national eco¬
nomic policies to a much greater
degree than in the past.
about
our
•.
=
Banking Houses
V
•
•
Rank
•
•
•
901,500.00
.
Accrued Interest Receivable
Other Assets.
I
#
•
•
•
t
.
♦
«
*
•
t
♦
•
546,004.53
t
•
•
growth.
our
.For .these
And
own
reasons
•
307,700.42
t
$508,963,370.60
LIABILITIES
Capital
$13,234,375.00
........
16,815,625.00
Surplus.
because
and
under way are usually
carried to completion, it is highly
probable that we shall continue
with a very large investment pro¬
gram
in 1954. I should not be
surprised, however, to see some
decline from the record figure of
30,050,000.00
Undivided Profits
Dividend Payable
.
♦
12.304,643.47
,
.
378,125.00
2,217,704.89
.
.
Reserved for Interest/Taxes, Contingencies
I
Acceptances
Portfolio
Less: Own in
.
.
1,013,780.58
Deposits
t
•
estimated
for
this
Investment in a number of
of manufacturing might
year.
•
«
•
•
well
be
lower
likely
and
in
some
decline
and
well. I also
agriculture
possibly in housing
as
3,572,719.73
770,769.65
•
453,646,737.49
•
$508,963,370.60
United States Government
Securities carried at
$18,974,381.85 are pledged to secure
and for other purposes as
HOUSE ASSOCIATION
FEDERAL RESERVE
FEDERAL DEPOSIT
25 Offices
public and trust deposits,
required or permitted by law.
MEMBER: N. Y. CLEARING
branches
seems
6,022,670.37
$4,586,500.31
Other Liabilities
•
,
$42,354,643.47
..........
October 1, 1953
Unearned Discount
projects
billion
2,306,799.76
on
well
so
are
a
developed
trans¬
actions with the rest of the world
3,350,136.73
3,444,229.09
Customers' Liability for Acceptances
a
development of resources
have been adding notably
,is
There
somewhat
our
the
which
by
rate.
exchange
deficit
current
2,536,450.00
and Mortgages
F. H. A. Insured Loans
rate. We
relatively
birth
having
to
favour the kind of resources with
might in
be .-aided
the past year largely because
have been running a consider¬
able
30,614,392.66
281,763,488.10
.
more
immigration
slightly
com¬
petition in world markets both in
primary products and manufac¬
our
:
.
Stock of the Federal Reserve
ex¬
exports.
our
the
Other Securities
Loans and Discounts
Canada's Stronger Growth Factor
has improved its position recently
but against this, from the stand¬
of
Municipal Securities
'thirties.
the border
would
countries
State and
we
appear
It should also
that time.
judgment, however, the depress¬
ing influences could well outweigh
has
securities Jr.,
a
to The Financial
fortunate
my
remaining expansive forces in
the coming year.
It is difficult
*
1
«
.
decline in farm income from
large capital invest¬
ticularly in the form of bank de- ment program, there is the possi¬
posits, in the hands of the public bility of a further decline in the
'
• $5.6
which is available for spending if exchange rate.
lot of money, par¬
Investors
farm
population with the associated tirely with United States. Should
expanding needs of children and this deficit continue, as it might
for
larger housing units.
Tfyen. with the heavy import require¬
a
-
(Special
Wilcox
Though the volume of
production is large, the out-j
would
affect
Canada
would
be look for the prices of farm prod-through the demand for our ex¬ *ucts in 1954 suggests if anything
ports. We might not be quite as some further decline particularly
a
of
too, there is
Southern
mitted to pay for past
some
Another
main,
others
their
find
a
the
savers
when
over
various other
•
,
MIAMI,
probable that there
people going into
also building un their
in
evident
com¬
activity.
The
for
First
many
and
peopie
moderate decline in U. S. business
and to increase it in others. There
ments
BEACH, Fla.—Ray¬
Corporation, 524 Jasmine Street.
Wash.
SEATTLE,
savings. And if they are different
much
the
that
means
remain firm in the face of
remain heavy
backlogs of require¬
schools, hospitals, and
of
staff
our
,
seems
very
debt
to
would otherwise be
declines than
the
vulnerable
less
are
scarcely
U. S. reaction. So my
would be that our exports
factor
Illi¬
Sigma
Chronicle)
to The Financial
(Special
ex¬
have read¬
to
process
rapid increase in consumer credit
without
much
concern.
But
it
the
.
sibility of
are
important
of
journalistic
national
Chi,
Hugh M. Wilcox Opens
ac¬
which
industrial
growth is based, es¬
guess
Some Sustaining Factors
in 1954 will not be larger than in pecially oil, natural gas and hydro
Against these possible declining 1953 and may be somewhat lower: electric power.
The underlying
influences, there remain a number It should be added, however, that trend of world demand and U. S.
of sustaining factors.
Technologi¬ our export position and some of demand in particular appears to
cal advances
member
expansion mond F. Wigmore has joined the
uninterrupted
are
counts, we might regard the very
farm
of
program
United States. It is true that basic
the
on
U. S. economy appears to
a
With First Southern Inv.
in
and,
opinion, is the most favoured
the business from offices
bank
their
increasing
are
sales,
are
of record
proportions.
mid-year estimate of total inven¬
higher
particularly when one
protective pol¬
commodity prices have been tend¬
ing downward for some time and
The
this may
mean that
some com¬
to
is
He
the
United States of moderate propor¬
of
(6) Inventories, though perhaps
joined the "Journal of
Commerce" in 1948 upon his grad¬
more
tions
time record, and the maintenance
not
120 Broadway,
York
City, advertising and
public relations firm, it was an¬
people who are increasing their public Building.
affect Canada? In the first
savings to enter the market for
place, it would probably mean consumer durable goods as the
(5) Farm income, though still that commodity prices would show commitments of credit buyers in¬
high, is running, slightly lower some further decline, and because; creased and forced them to with¬
than last year.
In addition, the of the fact that grain supplies are draw ' or
if, by
some
strange
present U. S. grain supply is unu¬ now so large on this continent its
chance, the people-buying on cre¬
sually large, and wheat an all- effect on Canada might be con¬ dit
should
aiso
be those
who
support operations.
& Company,
emus
Joins Frank D. Newman
credit has
consumer
as
July
ending
downturn
a
the
as
Duffy, former finan¬
news
joined the New York staff of Dor-
growth.
increased. Over the twelve months
Canada
have risen no
How
surprising
rather
is
me
J.
reporter with the New
York "Journal of Commerce," has
deposits in the char¬
banks have risen quite con¬
tered
How U. S. Situation
the
and
as
has justments in
increase
the
strikes
cial
that savings
quickly to any significant decline
in production and employment.
Affects
With Doremus Co.
Robert
not be quite as good a
fraternity, and the New York
record year of 1953 Financial Writers' Association.
and that the atmosphere will be
even
more
competitive. Canada
to June 30th it is
up
clear
continued.
Duffy Now
may
year
that
loans
bank
of
classification
re¬
also
it
Robf. J.
a
I think they suggest that
worth,
the re¬
member ceding twelve months of over $500 land
or
50%, and from the
banks early this summer and there million
pect
the
of
important factors. For what it is
1954
when they came off.
significant reduction in
serve
requirements of
ductions
building
the border. There
across
what
out
orthodox monetary poli¬ consumer credit outstanding pre¬
by the Bank of
Canada
cies and on reducing government pared
has
expenditures, there was in fact a and applying to March 31, 1953
of
declining number of people
arriving at marriageable age re¬
flecting the low birth rates of the
early 'thirties.
was
em¬
some
the effect
current high rate of office
commercial
and
of
on
family for¬
lower
in
there
will con¬
program
the
those
very
a
the
on
so
good deal
were a
Moreover, though the new
phasis
is
(4) There is also the possibility
some reduction in housing con¬
defense
large
that
certain
almost
seems
wonder what would be
than the United might be some increases in outlays
on schools and highways, and re¬
our more rapid
rate of population and economic source
development
should
be
growth. We have been experienc¬ maintained at a high level. A start
the
St.
Lawrence
Seaway
ing a similar boom in the auto¬ on
mobile and household
appliance would add to investment but, if
started in 1954, it does not
industries and
we
have had
a it is
more
rapid increase in consumer seem likely that the project will
be very far advanced in that year.
credit, though that may largely
This
is
not
a
reflect the fact that our credit
comprehensive
restrictions imposed early in 1951 survey but I have tried to bring
probably less
States because
pansion and modernization of U. S.
undoubt¬
have
we
edly caught up with many of the
accumulated demands, though
U.S. and Canadian Outlook in 1954
23
(1343)
SYSTEM
INSURANCE CORPORATION
located Throughout Greater New
York
$4
October 8, 1953
The Commercial and Financial Chronicle... Thursday,
(1344)
**-*' *
+
i
; ffiff
«*■'
*»'f*
cancellations
contract
and
have
shifts
able
theirfdecisions
in
purchase of such goods for some
period of time as they were forced
It is somewhat limited in value be- to do during World War II.
*
difficult to say how much greater cause of the psychological risk. If,
inventories
in
the
hands of
these cuts will be in the next fis¬ for example, the consumer should
business, as with consumers, are
cal year, but my guess is that they today get the idea that this was a
at all-time peak and could prove
peacetime goods was created. It taxes? Another alleged source of may again surprise those who are poor time to buy, just the opposite a serious danger if sales should
demand is the in¬ forecasting only minor cutbacks. could occur as happened, at the decline sharply and suddenly as
must not be forgotten that many dependable
Who is to say that Russia may not outbreak of war in Korea.
Fur1933
of the plants built under certifi¬ crease of families having more
press what will at least appear to
cates
of
necessity can produce than one car. Today one in 25
Consumers
and
businessmen
be a real peace offensive? - What
goods for peacetime consumption families owns two cars. But, is
not
a
two-car family itself the would that do to defense expendi¬ imDossible to measure statistoaHv have had to borrow as much as
as well as war goods. The impetus
additi°nai ?25 biu'°n each year
of
boom-time
incomes? tures? Finally, it is the building
given the economy since 1950 was result
to make their desires for new
of defense plants much more than course of business.
in the capital goods field much Can we lift ourselves by our boot¬
goods effective. Large profits have
the building of tanks and planes
In the short run, it seems highstraps?
more than in direct expenditures
been maintained by an increasing
that gave us this super boom.
ly unlikely that the Federal Re- volume of sales financed by these
for armaments.
Families want and are finan¬
Continued
jrom
6
page
larger than could have
been much
been
Expect Only
a
anticipated
business
All
cur.
forecasts
oc-
are
a year ago.
Mild Recession
rsrssman
of^usiness
Can
at
our
has
The
breather?
a
without
rates
current
near
least
expect to continue ex¬
plant and equipment
we
panding
at
plant
war
largely been built. Are capi¬
cially able to be two-car families
because we are
in a boom. As
long
continuance of the
the
psychology of businessmen, more
especially their outlook for prof¬
biles
The
its?
will
months
12-18
next
find that a very large por¬
this demand for automo¬
may
tion of
War
Housing: In the past, this coun¬
try has experienced 15 to 18 year
we
(three years
industrial
of
tax
o_,orn0M
.
ma
very
make terms
index
growing debts.
•
production will drift below 230
Statistics
on
consumer
debts
reductions are
during the remainder of 1953. The
' „vr.
given as a major factor in stimu¬
index reached a peak of 243 in aad
lating business. Just as the cancel¬ March and had drifted down to and aggregates may be misleadMarcn
ana
naa
aruiea
down
to
lations and stretch-out have sur¬
and £ixed charges including
prised many, so the failure to end husin^^vnlnrne
intnh^Jr amortizations of home mortgages
the excess profits tax was a shock
nrnf?* marline
J
may represent a dangerous perto some.
It does seem quite prob¬
Taxes
of
Pledges
definitely postpon¬ able, however, that this tax will
Let us not forget the World be eliminated in January, along
II experience with car life. with some reductions in personal
is
able.
Can
certainly give the answer.
guarantee
boom? We
demands
boom-time
peacetime no longer
in the postponable class affected
by changes in the emotions and
tal goods for
these
demand. Do
the
have
continues we
boom
the
as
will
Boards
serve
-
It
taxes.
income
/ower
to
occurred
readv
y*
in
uuite
a
tines :d-
few
centage of the
many
family unlts- Business has also
financed a considerable part of
expenditures
by
debt,
fixed charges.
-capital
longer range picture, how- which
The
is very difficult
lowef levels^f has
and
means
to
pay) any easier? Finally, in to assess the favorable effect of ever, is somewhat confused by
There is plenty of evidence that
both positive and negative
elespite of rising costs, it is general¬ these changes. Specifically, it will
th
dy
d ifa
ments. The positive elements are
.£.
ly agreed that demand will not depend on which income groups
Sc peak and that competition is remore and more tied to the actions
permit higher car prices. The pre¬ enjoy the greatest relief. It seems
ducing percentage profit margins
to
be the lower income groups, of the Federal and State Governwar seasonal demand has now re¬
,
real
estate
in
peak
the
The
these
was
of
last
Inasmuch
1925-1926.
in
reached
cycles.
building
the
next cycle
should have been reached in 1944,
as
in
peak
the
it appeals to some
that
prob¬
we
ably do not have these cycles any
more!
Perhaps,
told, even
we are
business cycle is under
the
control.
plete
the
com¬
expect
Those who
housing boom to continue in
spite
of
in the rate of
decline
a
family formations and the build¬
ing of almost 8 million permanent
nonfarm
end
dwelling units since the
World
of
of
number
favorable
will
told,
for
need
larger
there is
going to
Many,
Furthermore,
houses.
the
of
center
cities.
Unless my logic is very bad,
I
ever,
not
am
discovered
if
sure
new1
a
above
demand
are
exchanged
be
to
we
growing desire to move
a
from
away
houses built
years are
small.
too
prove
a
factors.
It seems that many
in the last few
recite
II
War
we
additional
net
that
how¬
have
provided
by
pot
where for the small houses
city
houses
Who
the
relinquished?
be
to
those
are
or
who
will
" buy
inhere these buyers
are
to
come
If
the 'latter 'represent
largely the new faipily .forma¬
tions, this will provide us with
po
;
although
net demand.
new
How
do
......
get additional
we
de-
jnahd? Finally, if the demand for
apartments or for city houses dedines,
won't rents and property
values decline to discourage the
in
nearly
industry
in
relative
bouse
cline
suburban
attraction
in
the
replacement demand
expansion in the number
of families using various types of
(2)
for
the
new
de¬
differential
cost
widens. Is the purchase of a house
pt least temporarily postponable
with changes in public psychol¬
ogy,
or
are
houses
no
longer in
the postponable class either? Can
we continue to
build houses at a
much faster rate than
new
family
electrical and gas appliances
(ris¬
living standards).
ing
dustry in 1953 will probably pro¬
duce only approximately six and
a
quarter million passenger cars.
We
told
are
pect
this
that
rate
of
we
cannot
million
6
ex¬
plus
to continue, but that the probable
decline will not be more than 10
to
20%.
Various factors
Will support
for
such
cars
mum
are
cited which
continued demand
alleged mini¬
replacement demand of 4
million
mean
a
as
an
cars
per year. Does this
that little if any of this re¬
placement demand is postponable
for
even
nual
one
year,
guaranty
but is
like
an
death
an¬
and
The
from new construction. If
substantially,
clines
this de¬
sales
of
ap¬
Consumer
and
om^wWch do8^however guar"
While
it
admitted
is
that
con¬
debt is at its all-time peak,
sumer
told
are
that
this
should
will
sions
not
temporarily
rupt this long-term trend
be
While
orders
inter-
^V^^vSIg?^
.
for
capital goods 0f the arguments that the boom
boom levels, the will continue are in effect argusumer
debt
as
a
percentage of peak in. such orders was reached ments that would mean that the
personal income is not burden¬ in the first quarter of 1953 at the business
cycle has been eliminated.
of
concern
no
This
some.
because
the
the
resembles
con¬
are
at
running
inven-
duTtria^oroduction ^ea'ched ts
pliances will decline simultane¬ tory-to-sales argument mentioned
Individuals
ously. If, however, housing con-, above.
collectively peak In the pas the peak in such
struction is well maintained, sales and individually sank 6% deeper orders has shown a strong tenof
appliances will retain their into debt last year and the pace dency to precede a peak in gencontinues right up to the present eral
business
major source of demand.
by approximately
the
on
Replacement Demand: Can
on a
major segment of tory.
(2)
we
count
.he
annual
demand
nonpostponable?
laxest credit terms in
his-" six months.
shown
,
certainly
estimated replacement
being
if
business continues six
Stoi prices
have also
tendency to reach a peak
a
months
ahead
business.
of
to boom and personal income stays
Stock
high,
not
peak in January of this
one
it
consumer
debts
will
prices did reach
prove
to be troublesome. May
curtailed
Expansion
More
or
Use
the
of
We have had a
Appliances:
steady expansion in the use of a
wider, number of
washers, garbage
air' Conditioners,
appliances—dish
disposal units,
like.
the
and
these
however, the purchase of
goods is certainly postpon¬
able.
But
Again,
all
we
is
need
better
salesmanship! It is just that easy!
Business Inventories
We
that
are
reminded
frequently
business
inventories
of
over
all-time
thigh levell Producers' inventories
in recent months have been ship¬
ped to retailers. However, we are
told
that, while these are high
historically in terms of physical
units as well as dollars, they are
not really too high.
This is be$7Q
billion
cauie
of
represent
'inventories
sales
an
percentage
.as. a
are
not
found in predicted sales of all the
various types of postponable goods
noted previously. Certainly if
it
as
should
drop sharply as in
1937-1938, inventories would sud¬
denly assume serious proportions.
Again we are told that better
in
1937-1938?
on
a
The
built.
little
difficult
defense
The
to
plant
future
year
is
largely
demand
move
the goods.
sive
We
are
of
home
told that the amortization
mortgages
that
means
home
However,
it
millions
stronger.
economy
of
today,
owners
the
makes
have
these
fixed
monthly payments to meet in ad¬
dition
instalment
to
payments.
This may seriously complicate the
consumer
debt
situation
in any
that
recession
starts
to
develop.
It would undoubtedly be very re¬
vealing if
tistics
we
had adequate
this vital
on
don't know about
—is
a
area.
sta¬
What
consumer
we
credit
lot.
Public, Corporate, and Individual
Debt
Debts
have
been
increasing
at
annual rate of $25 to $30 billion
and the stimulating effect of these
an
and
dency
sorrow
that the
stretch-out
u
.
Snf
.
Shi
hlavy aHUlery offr^
SDendfng Dephans for
'Th
c^eased
spending,
,
£
Jl
TJLfaf* VnleashedJ*®™",sA.by. P°
"Vi
tration
a n
d
pledged
balanced
to
^ ^dmlms~
money
sound
budgets
discard
for
to
our
Allies
along.
go
show
Of
a
ten-
course,
if
additional
funds
able
as
in
the
on
personal
form
of
a
10%
income,
reduction
may
be off-
set
by a general sales-tax on the
manufacturer's level.
The repeal
of the
excess
£lvf., r.eliaf
Republican
businessmen
now
profits tax will only
* e
extent that
Is the retreat from socialism to be
before it has hardly begun?
are going to- see many ideas
tested in the next two years,
over
We
Recently businessmen have been
saying that
a
"hard hitting selling
profits before taxes are well mam- j0b—to induce more buying—is
tained in spite of a growing cost- the
key issue" (Chairman of the
price
squeeze.
This
cost-price Board, National Gypsum), and that
squeeze, so evident m agriculture
«plenty Qf enterprise and salesand mining, will probably spread
maI1ship" (Benjamin Fairless) can
to other areas in a highly compreverit a depression. This, in a
petitive economy.
Many expenwayf js a truism, but why are $55
our
human beings. Unaccount¬
many
showing faith in a cure-all
bureaucracy, which only a year
ag0 they claimed to disdain. Can
easiest
to
increase
expenditures the Government, Republican or
rapidly in this area, and this may Democratic, guarantee continuous
be one answer.
prosperity without pretty much
Tax relief, which may be given controlling
the entire economy?
has
much of the fuel for
so
business really declines next year,
the
find
it
government would
%
their
"
sav¬
provided ditures have been made to avoid
expand¬ paymg excess profits to the goving economy. Interest rates have ernment. Will not many such exDefense Expenditures
been so low that business
and penses be reduced when the tax
Washington continues to put out government could not afford not is removed.
reassuring statements that defense to borrow. So the artificial pros¬
The demand for new housing
expenditures will not be too much perity moves on. As
long as we units has definitely passed its peak
affected by peace in Kprea. Cer¬
continue to increase our debts by and a considerable decline in this
tainly, compared with any previ¬ a net amount of $30 billion a
area could occur. Consumers have
ous peacetime
period, defense ex¬ year the boom will be well fired.
accumulated an all-tune high inpenditures will remain high for
ventory of years of unused life
some
tinie.
Summary
Already,
however,
There is nothing as unpredict¬ in homes, automobiles, and applimany businessmen are learning to
salesmanship will
SearThaftheTirsUine of
^ V tSs '? ^ P?
ajreaay ciear tnat tne tirst line of
these immediately on
the evicapital goods must represent addi- dence of a slight recession in order
ings deal too much with averages
tional
demand
for
plants
and to meet its other pledge—that of
and aggregates, and I believe may
equipment to produce goods for guaranteed prosperity.
The Reconceal some real danger spots. It
the civilian economy even though
publicans do not intend to engimay be true that on the average,
capacity to produce such goods neer a depression, but may not
savings are high as well as con¬
has been doubled in recent years, some hesitance on the one
hand
sumer debts.
However, perhaps a
Defense
expenditures
have and rapid acceleration of a decline
large proportion of those who
passed their peak and cut-backs Gn the other cause a cost-price
have been building up their sav¬
and stretch-outs may prove more
squeeze on business profits itohich
ings have been
reducing their serious than the
$10 billion in an- would be much more serious than
debts.
Conversely, the majority
ticipated reductions, especially if the decline in volume would indiof those who have been building
the Russians should put renewed cate9
up the consumer debts may well
pressure
into their peace offenIt is certainly interesting to find
have little or no liquid savings.
debt and consumer
consumer
we
sales
was
Unfortunately, our statistics
is
The stro^est arguments rest on
the powers available to the pollticians in Washington and the
postwar
a
and
envisage
be so bold to ask, however, what the
stock
market
making new
appliances in the home are right
would happen if personal income
now
at an all-time high level—
highs until the business question
should be sharply and suddenly is resolved in the next 18 months,
in terms of years of usable life.
(3)
automL^^
Savings
we
The largest
segment of this demand has come
Homes:
New
(1)
historically high.
formations? Is the present decline
It is certainly true that as long as
really due to tighter credit?
business is booming—which means
that sales stay high — inventories
Consumer Durable Goods
will not be a problem. But where
Automobiles: In 1929, the auto¬
is the guaranty that sales will stay
motive
industry
produced
ap¬
It is certainly not to be
proximately 5 million cars. In high?
spite of the growth in the econ¬
omy and the long boom, the in¬
Debt
Consumer
(3)
The
suburbs. will,
the net
as
areas?
Smen's" assurTnee
Mnni
exodus and the exchange for- new
bouses
Zmcflristi^ot^ lecets^n ?b^
whose
sales is blamed on
the
to
decline
t
4hese houses? It is not explained
from.
.
.
purchasing power is most ments and the Federal Reserve
stretched to the limit of
on
that °f 6%
booming
" instalment borrowing. Perhaps the bu
jther factors.
n
it becoming more and more difficult
removal of the excess profits tax"
Consumer durables other than
P
ftttnrtffiw
better selling. Many factors giv- to Pass on higher costs (including
Automobiles: The major segments will occur in a year when profits
through
orice
increases
en
as to why there will not be a
£5^?ILJfSJL'
may be caught in a highly com¬
of demand for these goods are:
recession
are
long
range
factors and We have. Seen reduced PnCCS
petitive cost-price squeeze.
(1) new homes
turned
the
family formations. Will we Actually, in terms of years of us¬
require buyers from some¬ able life, consumer inventories of
pew
.
ances.
They
eiectric blankets
vertised
This
in
this
being widely adseason
selling job
at
$29.95?
be a little
harder than those spokesmen realize, especially if they themselves
have never sold to consumers,
may
strenuous sales efforts by
ness
and
ledge^
an
busi-
Administration
to prevent anything exmUd recesslon, wiu team
up
prove that it can be done,
precedent
is* lacking—as is the
£ept%
could postpone the crystal ball.
The Commercial and Financial Chronicle
(1345)
/
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6*Mr UKfs
srm
Detroit, Mich Am
of«andard an,f "S?uPP'ier
•
s'«f
of
Products
forK
^'cations
WlRrON STCfl
°"
«
i„
sPo-jpHwry
CO
S&X&vvo'
er,mPortant
sC*v,
steel
if' v5r,'
--=h
SIRAN-STftl DIVISION
Saving seconds where
count
seasons
"anna
iron
WeJand,
As the
turn
sparkling blue
darker under
waters
autumn
of Lake Superior
skies, there's
20,000 tons!-At. the docks of National's
plants in Detroit and Buffalo and at Lower
Lake ports—Tor rail shipment to its plant in
Weirton, West Virginia—-ships are unloaded
by giant cranes and started on their return
voyage in a matter of a few hours.
a
perceptible increase in the tempo of the men
and ships that make up the Great Lakes ore
carrying fleet. For enough iron ore must be
moved to the stockpiles of steel mills to keep
furnaces running throughout the long winter
months when the Great Lakes
are
Such
frozen in.
high-speed operations
seconds
in the average
flagship
12,(XX)
of" National's
of ore are carried
Ernest T. \\ eir,
fleet, carries over
i
GRANT BUILDING
AN
INDEPENDENT
coal mines, its own ore
furnaces, rolling mills
and finishing facilities, National Steel is
completely integrated and entirely modern.
Always in the forefront of steel progress, it
is building constantly to serve America
better—one of the leaders in steel production.
new
NATIONAL STEEL
COMPANY
OWNED
™r
f^e Great
Lak
WNNA
FURNACf CORP.
uffalo, New Y0rk m
c
division (!
ast fur"
save
n
national mines
c
"ace
"<
various
"
TPes
of
p,g
lron<
*3t*S£SEr"«
of
National Steel
With its o^n ore and
carriers and its own
tons
ship. The
necessary
needs and also build
Saving seconds where seasons count is a
job for the ore fleet. And one of the
most important parts of this job is the speed
in turn-around time—the time required to
unload and load a ship.
vital
From 9,000 to
so
the vital
to serve daily operating
the winter's stockpiles.
8
iLJBf
ore c
Ohio. Pro,
a"d
dislnbut""' f H|"rc,,0>JSe
""'P^c^intheSouKr
CORPORATION
NATIONAL
Ml
WW; PITTSBURGH, PA.
BY
MORE
THAN
19,000
STEEL
STOCKHOLDERS
\
f
'1.''
®
22
The Commercial and Financial Chronicle
26
...
Thursday, October 8,'
1953
(1346)
Continued from page
with the listed
no
Bank and Insurance Stocks
II.
By
This Week
view
In
the
of
JOHNSON
E.
—
Insurance Stocks
there is likely to be a period of active
switching over the balance of the year.
been the usual
has
Wall Street at the
in
custom
year-end
ordinary com¬
It is hoped and
expected that personal income taxes will be reduced approxi¬
mately 10% in 1954 so that, where possible, it may be advan¬
tageous to take losses this year rather than next.
there appears to be more than the
pelling reasons for taking advantage of tax losses.
drifting down¬
much as 50%
and industry groups such as automobiles, textiles, oil, metals and
farm equipment are substantially below their highs. On the other
hand some issues, for particular reasons, are selling close.to their
postwar highs. In other instances the recovery in the bond mar¬
ket since July has given some holders short-term profits.
1952, share prices this year have been
market of
Some issues have experienced
ward.
This
creates
favorable for
situation
a
declines of
as
offsetting profits
and
position in
a
a
in¬
portfolios
new
insurance stocks may well serve the needs
individuals. The characteristics of the different com¬
panies and the types of insurance written vary considerably. At
the same time investment policies are diverse and while some
companies invest entirely in bonds, others are important holders of
tax-exempt obligations or common stocks. Some stocks provide a
fair dividend return with the prospect of stable operations while
the principal attraction of others is capital appreciation.
As with stocks generally, it may be advisable to switch from
one security to another.
of
many
This
time objectives of investment policies can be
same
It
must
and at the
be done in the insurance field with ease
can
maintained.
realized, of course, that generalizations are not
entirely appropriate where individuals and taxes are concerned.
Each case must be analyzed from an individual basis to determine
It does seem timely,
however, to review security holdings at present to take advantage
of certain provisions in the tax law.
Aetna
Fire
Dividend
Yield
'64
$2.45
1.60
5.47
36%
23%
1.10
4.66
26%
55
3.00
5.45
64%
53%
32
1.40
4.38
39
31%
Surety
Insurance
Boston
Continental
86
Fire
Association
Fireman's Fund
Firemen's
673/4
3.00
4.74
72%
613/4
2.74
62
52
1.00
4.19
28 i/s
23%
2.00
3.59
63%
55%
1.60
4.05
411/2
34
1.80
4.86
42
3.00
1.90
I691/2
38%
2.00
5.22
42%
363/4
•
391/2
__
_
37
_
158
Home Insurance
of
861/2
55%
Hartford Fire
Co.
3.81
1.60
Great American
Insur.
67
2.80
581/2
Insurance
Hanover Fire
723/4
821/2
,23y8
(Newark)
Glens Falls
873/4
3.81
731/2
_
2.91
2.80
63%
Fidelity-Phenix
2.50
731/2
Casualty
Continental Insurance
America
No.
,
35%
821/2
2.50
3.03
98
79%
44%
2.00
4.52
50
413/4
Phoenix
921/2
3.40
3.68
108
331/2
.0.90
2.69
34
28%
St. Paul Fire & Marine
o
section
the
which
company
publicly distributed among holders' meetings, they must first tions for listing, they had | not
500 public stockholders. prepare the proxy material in ac¬ signed any agreements with the
But that has to be actual public cordance with prescribed proced¬ exchanges.
The
stocks
were
distribution, exclusive of the hold¬ ure and rules of the SEC, and brought in for trading on our own
ings of officers, directors, or any must clear the material with the initiative. The management- did
of those people affiliated in any SEC before they send it out to not approach us at all.
least
at
Under
those
conditions, ; the
with management. That is their stockholders/,;
minimum; depending upon
Section 16 is the section which question arose, how can you force
•the price of the stock. In the case
provides that each officer, direc¬ those companies to register .with
of low-priced stocks we would re¬ tor and owner of more than 10% the SEC as the listed companies
quire considerably greater dis¬ of a listed and registered security were forced to do? How could
tribution of shares and sharehold¬ must
report to the SEC and to the they become subject to an Act by
ers as a prerequisite for listing.
exchange whenever he buys or reason of the fact that they are
way
theory
enough
profit,
are
of the principal
some
He
must
United
148
New Hampshire
Insurance
is the
13
it is subject to recapture. Congressional Committees, repre¬
give the profit back to sentatives., of this- and other ex¬
changes pointed out this difficulty
differences between the require¬ the company.
in
connection with, the unlisted
Those are the three principal
ments
or
standards
of our
ex¬
securities, and finally the bill was
change and the New York Stock sections of the '34 Act which are
passed initially with the question
Exchange. There are other dif¬ applicable to fully listed and reg¬
of unlisted securities left open for
ferences, such as in listing fees, istered companies, and therein is
a year. The bill provided that se¬
transfer
and
registry
require¬ the difference between the listed
curities that were fully listed on
ments, forms of stock certificates and unlisted securities.
the exchange had to register:by a
required, etc.
I
mentioned
to you
that the
specified date in order to be con¬
Basically, I would say that a minority of our stocks now, but tinued. That
applied to fully listed
goodly
percentage,
but
still a at one time the majority, are ad¬ securities only.
minority, of the stocks that are mitted to unlisted trading privi¬
On the unlisted securities the
listed
here
were
listed
while leges on our floor. Practically all
act stated that for a period of a
they were still in their growth or of the unlisted stocks now on our
year the exchanges could continue
development stage; however, that floor go back to the days before
to trade in unlisted stocks which
does
not
necessarily mean that the SEC. Prior to ,1934 the Ameri¬
they then had, and during that
most of
our
stocks are in that can Stock
Exchai^ge, or any ex¬ period the SEC was instructed to
change in the
category, as I will discuss later.
States, was make a study of unlisted trading
the sole judge of what they would
deal in. There was;no governmen¬ privileges and report back to the
A Proving Ground for NYSE
Congress as to what should- be
I might also point out that by list¬ tal body with wbtich the compan¬
done about the unlisted securities.
ies had to regisler in connection
ing these stocks in their earlier
The report was made to Con¬
with trading in $ieir securities on
stages, in their growth period, we
an exchange.
gress
and the upshot was they
p;
provide
a
proving ground
for
In those days we took the posi¬ passed what is known as Section
stocks for the New York Stock
12(f) of the Securities Exchange
Exchange. The last survey, made tion, and we wfjuld do it yet if
Act. That Section 12(f) is subdi¬
a -few
years
ago,
showed that we could undejc/the law, that
vided into three clauses. Clause 1
about 60% of the stock issues now there were many; fine companies
states in effect that any securities
in
over Ifhe
listed on the New York Stock Ex¬ dealt
counter, in
admitted to unlisted trading priv¬
change at some stage of their pre¬ which the management, for what¬
223/4
American
Section
requires that
shares
Those
27
American Insurance
Insurance
re¬
listed.
503/4
29 y4
Agricultural
Exchange
Stock
is that there must sells any equity security (shares) being dealt in on an exchange
public distribution to of the company and is subject to when they themselves did not
months'
make for a free and open auction a *six
profit recapture take any steps to bring the stock
market on the floor of the ex¬ clause. That is, if he buys or sells on the exchange?
When the bill was up before the
change after the stock has been within six months and makes a
Low
High
4.76%
511/2
___
run
York
The
1953 Price Range
Indicated
Market
a
point
every stock, in order to be contin¬
must ued on the exchange, bad to reg¬
quires that at least 300,000 shares file annual and periodic reports ister with the SEC and become
must
be
publicly
distributed with the SEC. Section 14 is the subject to all the requirements I
before. The manage¬
among at least 1,500 stockholders. section which provides that if the mentioned
Our minimum requirement is that management of a company solicits ments of the unlisted companies
there
must
be
at least
100,000 proxies for the purpose of stock¬ had never filed formal applica¬
be
In this connection it may be of interest to review the market
price, dividend and yields of insurance stocks at the present time.
Current
with
and
our
be
the best method of handling the tax question.
companies
earnings
it
New
field.
this purpose,
For
up-grade
and
sustained
fully
tribution of shares viewpoint, the
holdings by eliminating the
quality issues and replacing with good stocks in an en¬
poorer
tirely
it is frequently desirable to review
other hand,
the
established
That
prospects.
On
get
the
ness
similar security of the same industry,
especially where the stock represents a strong company with good
vestment
the
get
of
is supposed to get into. ing, they become subject to the dealt in on the various exchanges
applies to the operating continuing reporting and other of the country on an unlisted
end of the company's business. In provisions of that Act,
particu¬ basis.
The
bill
as
originally
addition to
that, from the dis¬ larly Section 13, 14 and 16.
drafted would have required that
available for
to re-establish
all
for his money up New York Stock Exchange or any Act was in its formative stage, the
exchange,
must
register problem arose as to what would
where the company other
will at least do what it was sup¬ with the SEC simultaneously un¬ happen
to the several thousand
posed to do and get into the busi¬ der the 1934 Act. After register¬ stock issues which are then being
will
tax loss results in the release of funds which be¬
new investments.
Frequently, it is advisable
a
be
to
to
minimize possible future taxes.
Usually
the ticker in the same way.
production.
opportunity to establish higher costs on
holdings in order at some future time, if necessary, to reduce or
come
to
you
that
exactly the same
stocks. Sales received
financed to reach you to have the impression that Stock Exchange. That exchange
We do not guarantee all we have are the smaller and did not have an unlisted depart¬
that after it reaches that produc¬ newer companies.
ment. They had only a fully listed
As I mentioned to you before,
tion, it is going to be successful.
department.
' /
No exchange does that. At least every company that lists on any
When the bill which eventually
exchange, whether it is here, the became the Securities Exchange
we guarantee that the stockholder
it
It may also be an
losses.
want
don't
basis as listed
the print on
There
was
absolutely no difference' in
the service the public received for
the unlisted stocks as compared
with the listed stocks. The only
difference in mechanics was that
in
printing sales of the listed
on
also
apply to an industrial or record of 10 consecutive years or many hundreds of stocks were
manufacturing company, just at a more. Some of them run up to admitted to. unlisted trading priv¬
100
consecutive
years
in
start-up stage, not yet in the pro¬ over
ileges
on
this and
other ex¬
duction stage. We would expect dividend payments. I don't want changes, excluding the New York
with the rising stock
Another consideration is that in contrast
I
for
long stocks on the ticker for public in¬
dividend formation we used a symbol "L"
pany
must have sufficient cash records. Approximately 75% of all to indicate it was listed; and the
on
hand or definitely committed of the stock issues on our ex¬ unlisted stocks were not so des¬
pay
dividends and over ignated.
for to get into production before change
of them
have a dividend
its stock will be listed. This would 40%
Back in those days before 1934
operating basis, and the com¬
an
year
in
to get its properties on
necessary
losses.
This
report
showing facts impression
posts
were
the com¬
and figures, as to how much it is panies on our floor are in the de¬
going to cost the company to con¬ veloping stage. The great major¬
struct
its
mill
or
whatever is ity of our companies are old
minimize the tax
eliminating previous mistakes and establishing tax
by
engineer's
an
trading
separate
floor
stocks. There were
them; all were in together. Orders
executed in unlisted stocks
Listing of Securities on
Exchanges
which he estimates,
security positions and where possible
to review
liability
require
prices this
tax-loss selling and
declines in general equity
sharp
year,
It
The
all commingled on our
were
13
89
Security Insurance
34
1.70
5.00
411/2
31%
Springfield Fire & Marine
471/2
2.00
4.21
53%
43%
United
383/4
1.50
3.87
46%
353/4
233/4
1.00
4.21
253/4
21
,
States
Fire
Westchester Fire
COMPARISON
AND
ANALYSIS
vious history were listed on this ever the reason flight be, had not ileges on any national securities
exchange prior to March 1, 1934
exchange. Naturally as the com¬ seen fit to lisEt the company's
could be continued on that ex¬
panies grow and develop to stock shares on an exchange. We took
BEVERLY HILLS, Calif.—Rich¬
change. That at least froze us with
exchange stature, some of them the position tha^'in the case of
ard W. Haupt has been added to
the
unlisted securities; we
then
transfer to that exchange. We do those companies&vhich had all the
had.
the staff of Real Property Invest¬ ndt look
for listing,
upon these transfers with necessary ' attrifeites
Clause 2 provided that any se¬
ments, Inc., 233 South Beverly too much enthusiasm, but over the earnings, plentwof public distri¬
With Real Property Inv.
(Special to The Financial Chronicle)
17 N. Y.
City
Bank Stocks
September 30, 1953
Bulletin
on
Request
to accept bution, etc., weffwere performing curity x which then or thereafter
philosophically. a service to tlra stockholders in should be fully listed on an ex¬
change, would become eligible for
At least
it shows
that
we
are giving them an ^exchange market.
performing an economic fuction Admittedly, wefalso had a selfish another exchange to apply to the
We wire also
in aiding these companies in their motive.
bringing SEC for a permission to ■ deal in
years
Drive.
that
Laird, Bisseli & Meeds
Members New York Stock
Exchange
American Stock Exchange
Members
120 BROADWAY,
NEW YORK 5, N. *.
Telephone: BArclay 7-3500
Hall,
Jr.
Gibbs, Manager Trading Dept.)
Specialist* in Bank Stocks
staff
of
A.
to The Financial Chronicle)
FRESNO, Calif.
Teletype—NY 1-1248-49
Bell
(L.
Joins Hall & Hall
(Special
has
Hall
—
been
&
America Building.
Raymond E.
added
Hall,
to
Bank
the
we
more
growth
have
or
and
development
However,
many
meet
New
can
come
less
stages.
companies which
York
Stock
Ex¬
business to
our
that
floor.
JP
Unlisted/Trading
if
stock
prove
an
on
second
the
.
to
the
unlisted
exchange
satisfaction
basis,
could
of the
After the stow^were admitted SEC that the issue had a suffi¬
of change requirements continue to
to unlisted trading*privileges, they ciently widespread public distribremain on our exchange.
Number 5262
Volume 178
ution
sufficient
and
activity
exchange
trading
of that
unlisted
vicinity
the
in
warrant
to
The Commercial and Financial Chronicle
...
all
particular
it
did
least,
because
us
at
to us the field for un¬
trading
happened
to
has
2
theoretically
was,
open
listed
clause
much
meant
never
in
which
stocks
listed
be
to
had to prove
some
on
widespread pub¬ an exchange would be much less
public trading. than the costs of over-the-counter
filed applications with the dealing in these stocks.
lic distribution and
We
SEC
trading privileges.
That
we
(1347)
for
stocks
these
the information
on
the
legal
we
based upon
the Act
could not get
for any stock
phase
of
which said that you
unlisted
trading
issues unless they were subject to
all
the
of
a
SEC
listed
filing
Over-the-Counter
had compiled,
requirements
been any
counter
outside
exchange
of
New
never
real study of over-the-
particularly the
costs to the public of such trading.
Information
on
trading in the
trading,
over-the-counter
market
is
not
frankly
have
been
the
clause from
most
took
them
and
company,- etc.,**we
publicly available.
There is no
admitted that as these
York.
However, it was quite a
stocks were not registered under print on the ticker, and so forth.
boon to the out of town exchanges
In order to find out what the costs
the 1934 Act they therefore ;,were
because it opened up a field to
not subject to the filing require¬ were, once and for all, for deal¬
them
to
bring in for unlisted
counter, the SEC
ments of that Act but we,; con¬ ings over the
trading
privileges
stocks
that
sent
a
questionnaire to
every
tended that they should be; dealt
were
fully listed either in the
over-the-counter
dealer
in
the
with on the exchange under the
New York Stock Exchange or our
United States, requesting a rec¬
so-called
public interest provi¬
exchange, and many hundreds of
ord of every trade he had made in
sions.
stocks have been admitted to the
these six stocks for a period of
We stated that we were going
various
regional
exchanges
by
six months. It was a job because
to prove that by showing that the
reason of that clause 2 in Section
they were, all active stocks.
12(f).
cost to the stockholders and the
These
questionnaires
took
a
Clause 3 of Section 12(f) could
public dealing in these stocks on long time to prepare and when
other
finally
then
condensed
exhibits
Trading
Up to that time there had
they
staff
the
naturally
have
a case
SEC
and
series
a
they
of
stopped,
They
so.
the
are
the
results
into
then
and
"There
in
came
said,
If you
will have to prove
you
figures.
it yourselves."
Throughout
we
Were
which
proceedings
by the NASD
the over-the-
these-
opposed
represents
counter
dealers,
dragged
out
the
case
period
of
and
over
a
months. We took these var¬
many
ious exhibits
over-the-counter
on
trading and prepared
briefs
and
studies
series of
a
other
and
ex¬
trade
is
the
on
matter
a
ticker
of public
and
where
body trades with the
full knowl¬
of
commission
rates
are,
going
what
to
the
and what his costs
be,
before
an
apply to
trading privileges
the SEC for
in a
Section
we
12(f). Of the six stocks,
were
granted one because that
particular
company
was
regis¬
tered
with
Public
Utility Holding Act, subject
to
the
SEC
under
haye
substantially the same require¬
as though it had been
reg¬
ments
istered
quite conclusively that the price
the public paid to have orders ex¬
change Act of 1934. On the other
under
the
Securities
five stocks which had
no
ecuted and to deal in these stocks
over
the counter
were
very
much
higher than the costs would have
been
on
an
predicated
tion
the
exchange
of
SEC
the
on
un¬
se¬
would
that" the
issue
had sufficiently
widespread public
distribution and trading activity
in the vicinity of the exchange
to
justify
exchange
an
all
market.
That
was
many
hundreds of stocks
right.
which
counter
There
had
were
the
over
activity
and
distribution in this vicinity. How¬
there
ever,
in
ments
to
stock
be
trading the
addition
eligible
on
for
a
unlisted
for
and the of¬
company,
directors
and
i
in
that
to
ficers
also legal require¬
are
Clause 3 which went
state
and
large
stockholders of the company must
be
subject to
the
the
requirements
stantially
though
it
same,
of
the
registered. This of
impossibility,
the only
that
registered
Thus,
re-
Ex¬
of 1934, particularly
(proxies) and Section
14
(stockholding
those
an
reports),
while
were
fully listed
were
under
that
there
words
were
trading on exchanges, in
practical effect they did not mean
anything. There is one other pro¬
12(f),
we
tive.
that
in
It
Section
section,
to
on
satisfaction
a
certain
such
grant
there has to be
lic
interest and
security to
the
un¬
the SEC
protection of
,
.
.
.1
.
Nobody knew what that meant,
decided
wc
find
We
out.
going to
were
we
always
were
the
principal proponent of unlisted
trading privileges. We still are up
the
to
point
it is stopped
wnere
by! law. Back in 1943
test
to
what
out
decided
we
this
"public
in¬
terest"
phase of Clause 3 meant.
We picked the 6 biggest, best and
most
active
over
the
stocks
counter.
we
could
They
find'
were
all
fine
companies with plently of
everything—plenty
of
distribu¬
tion,
good
the
earnings,
and
attributes
necessary
had
all
to
be
good securities for exchange trad¬
ing.
We
obtained
firms
over
statistics
stocks
that
years ago,
is
life
in
like
the
imagine
"have-not"
nations of the world. Some communities
in Honduras have
nor
any
Africa it
in
a
tribal group
The
never seen
petroleum,
product thereof. In Western
is not unusual to find one lamp
fact
of 15,000 people.
that
country
a
has
no
petroleum resources of its own is not
always the reason for oil poverty.
they really "have not" is the initiative
to look for
The oil
from
our
showing
a
it!
companies of America have
super-abundance of that great natu¬
ral resource—Initiative. It is essential
to their success.
They cannot afford to
discourage easily, for the odds are ten
to
one
against
a
wildcat becoming
a
producer.
In spite of these odds, Cities Service
has discovered
some
of America's his¬
toric oil fields. In the last five years,
its
geologists have added millions of
barrels of much-needed oil to
national
men,
reserves.
Because
our
of these
and others like them throughout
the industry, we can
be
try will never be one of
have-nots of the world.
sure our coun¬
the petroleum
member
active
the counter trading in those
over
obtained
other
happened, not fifty
It is hard for Americans to
showing of pub¬
,
but
reading lamp and
a
Many so-called "have-nots" live in
investors.
i
for
drum of kerosene.
This
applications;, but
a
once
land where oil could be found. What
listed trading privileges,
may
farmer
that
SEC
the
be in the
to admit
a
public interest
of
it would
Indo-China,
traveler his prettiest daughter
but within the last decade.
that not¬
say
withstanding the above require¬
ments, if, an any case or class of
cases
an
exchange can prove to
the
a
thought might be effec¬
goes
a
in exchange
what
listed
u
n rural
offered
and
Act.
there which seemed to permit un¬
vision
i
that
extent
Securities
the
of
Act
Sections
16
as
and
stocks subject to the
quiremens
change
SEC
course, was
the
to
for bnrnin
and
listed
fully
were
sub¬
or
duties
same,
a
sources
the
tributed
words,
period of time, and
from the
stocks
in
we
companies and
information showing
our
were
widely dis¬
vicinity. In other
met the
statistical
@ SERVICE
re¬
quirements of the Act which said
CITIES
Quality Petroleum Products
was
the fact that Clause 3
on
Continued
exchange where every
Ex¬
SEC reg¬
istration, the SEC's decision
establish; to the satisfac¬
to
the
hibits in which I think we proved
curity having certain qualifica¬
tions, even though not fully listed
and,registered under the 1934 Act.
Statisically
is
However,
notwithstanding all
that, .we lost the case on a strictly
legal interpretation of Clause 3 in
3 stated in effect that
could
are
order
executed.
important
listed
print
every¬
edge
viewpoint. Clause
an exchange
our
27
page
28
28
The Commercial and Financial Chronicle...
(1348)
CnntiniiPrJ from
for example, would buy stock on Continued from page 15
?7
r)finc
^Continued jrompag^
the
The Listing
oi Securities on
loss of time involved before he
couId deliver the stock here. Once
JIHff AC
JUAWilClllJjVil
,
.
plications
in
in
six
certain
and
counter
proven
things. The SEC said we
havfe
picked
six
others,
could
50
the
same
five
these
special
and perhaps
thing, so that
others,
maybe
proven
stocks
case
"a
not
were
class of cases." So
or
lost the decision.
te
,
dealt
actively
stocks
the
over
At
settled one point,
that regardless of the
it
least
which
was
12(f),
Section
of
language
we
for
going to bring stocks in
unlisted trading privileges as
we
had
weren't
have
in
the
sition
is
that it
However we
past.
from our po-
receded
never
public in-
the
in
terest to do it.
The
the
been
few
a
prepared
SEC
.series of studies
they
Back
Bill.
the
ago
years
since
lines
Frear
5submission
development
then has
other
only
those
along
a
exhibits for
and
Congress, in which
to
companies,
unlisted
studied
both over-the-counter and on ex-
quite some
(in connection
a
number of large publicly
companies.
For
example
where the proxy material
changes,
.
with
held
cases
disclosure
they issued
tell
showed
and
of
lack
defective, did not
was
whole story to the stock-
the
holders,
things of that
other
and
type. They pointed out that these
particular
by
man-
fit to list
seen
exchange and register with
an
the
the
that
fact
agements had not
•on
solely
companies,
the
of
reason
SEC,
They
just
conripanies
but
were,
taking
were
were
free ride,
public
companies
a
much
as
listed
as
not subject to
were
any
They
said
were
public
really
ment
•tain
took
in
istering
where
cer-
listing and
by
their
(he
manage-
themselves
reg-
upon
burdens
shares
and
those
did
management
and therefore
not,
'Vw>'''"
ear
The
'
Bill
delivery
not familiar
British transfer require-
wj|j1
were
ments
the
with
American share arT
New York
trust
as depositary. Their
London branch or whatever the
country 0f origin is—I am using
rangement
London
a
acts
company
illustrate
to
the
example
branch will accept
deposit in London X number
x 00Q
Qwn
American share
icates'and
balance
of
want
proportion
of
nominee
your
the
issues
are
foreign companies and the largest
'
tiia
York
New
domestic companies.
got out from under
requirements.
ally
g00d
a
was
^ey
jjecause
to
certif-
sell
the
on
There are about 150 foreign London Stock Exchange, you can
stock issues dealt with on our g0 into the New York office
floor. About 60 of those, are Can- 0f the Guaranty Trust, deposit
adian issues, but we don't treat your American share certificates
them as foreign. We handle Can- and the London office will release
adians on the same basis as the the equivalent in British shares to
companies
where
the
States, including
Stock Exchange.
categories,
two
those
for
wjja^
ag
cilitates
London.
in
either
It
fa-
direc-
tion.
As
are English
a few other
those
in
trading
result of that American
a
share certificate arrangement we
in- European
stocks,
some
South built up a very active market in
the
effect
of American stocks, and a South Af- foreign
securities back
in
the
been that the rican
stock, and in all of those 1920's; there recently has not been
companies. There
are
Senator Frear subsequently
troduced
which
bill,
a
would
have
/criterion of whether
not
cases
of
foreign securities, exeluding the Canadians, we require
solely from the viewpoint of that the security to be listed here
or
a
com-
Vany had to register with the SEC
was
It
-size.
as
defined
public company
a
is not the actual stock of the
a
company with $3 million of
assets and 300 stockholders and
any
register
the
which
company
yardstick
would
be
met
share
a
com-
so-called American
American
or
depositary receipt. We pioneered in the devel-
to
much activity in foreign securities
and that has been due principally
to currency restrictions-inability
to get
the SEC, and file
type of registration ap-
we
did
a very
your
is still
subject to the
requirements
as
a
filing
same
listed company;
between
.
foreign
our
stock
exchange
,?ectlon^ 1?'u 14 and 16 which isthe security
reduce
known
effect
ff
■
1
#f
n
Too Much Social Security
.
,
I caution you to be realistic and
don't swallow the story of the
planners that this trust fund is
similar in character to that of a
private insurance company. You
know and I know that private insurance reserves are invested in
projects that promote the production of goods and services—thus
they earn income and they are assets because they are liabilities of
other enterprises. The OASI trust
fund is invested in Federal gov-
since the adoption of our Social ernment securities which do not
Security Act the strategy of the represent assets but future obliga¬
Federal Government and of non- tions to be satisfied by general
federal advisors has been a con- taxation.
certed drive to extend the coverr
I place these facts before you
age to nearly all of the popula- today in order to arouse .your intion, to increase the tax rate and terest to prevent this Social Setaxable wage base, and to increase curity Act from undermining your
the benefits.
business and eventually destroyAfter fifteen years of propagan- ing
our
It is time for
economy.
da, the 81st Congress adopted leg- action and each and every one of
islation expanding the Act so that you can be of service.
now
we
have covered under the
system an average of 49 million
persons paying a tax of 1V2%
of wages (employer & employee
each) up to $3,600 annually, with
benefits increased by as much as
77% over the old schedule. In this
first session of the present 83rd
Congress over 170 bills have been
introduced
affecting
the
Social
A subcommittee of the House
Ways
and
Means Committee,
Chairmaned by Rep. Carl Curtis,
of Nebraska, are now engaged in
a study designed to overhaul our
social security system. An effort
will be made to place it on a
sound
economic foundation.
I
submit for your consideration and
support the curtailment of the
trust fund and the establishment
of the system on a true pay-as—
and
to a
For
to
i
form
meanwhile provide imof money which the
K
Government uses in ways not remotely connected with Social Security.
*
Let us realize that our Social
Security Act is a potential threat
to the insurance business. Well I conveyance
mense sums
remember in the early nineteen
forties discussing the less rosy
aspects of compulsory social security Proposals from public platforms a11 °ver the country, when
few wanted to listen and many
were outright in their resentment
of arW critical opinions, however.
soundly based. Yes, when some
insurance
executives expressed
the fear "we might rock the boat"
a?d cause serious repercussions to
the business. It is time to stand up
and be counted to explode the
myth that S1OClal Sec"rlty 15 ®n
lnsurance pian;
a plan
under
which each individual pays his
Lerner has become affiliated with
Galiforma Investors, 2181/4 South
^nU^'5e ^as Prevl*
as a
pi
Pie English stock certificates hap-
put all of the companies
which
own
_
exam-
have
exchange
pf
'
Investment
Cabfnrnta
I
the almost 4 million emwho are the^victims of
Payro-11 taxes ana 1wno nave Deen
le?
1 7^ nfi H, tv
?eive, Dy rignt, a souna annuity
ln tneir 010 age*
I have dwelt at some length on
the Social Security Act because
in my humble opinion that is the
sufficient to provide for the bene- ers and
fits which should be paid out, but Payers
receives
way and
a
casualty as
.{J® ™ K„5ina«
accident and
*
With that Ibe*ore us let ne warn
you that todaythes entire liwurance
r „ni?ih frnnf r?nr
must presenta united tront. uur
leglslat^s look at our business as
one industry, iney cannot, ana
nghtly so, toiiow us various rain
locations, tnereiore it is neces
jary that Jne man engagea in-ine
tire
pfTVrid^
when casualtyand
vice
and vlce veisaToo Much Government
January,
the
1937,
can
has received in payroll taxes over
Qcnly
billion.
The
Treasury
.
has
an
make
perhaps
alarmist and if
you
assure
I
desire
one
you
th
t
th^t
speaker is
old age and survivors trust fund
$25
in Business
h
conclusion
in
me, acciaem o
versa
benefit
right.
starting
which could nation¬
alize and socialize the fire and
am
and
so
I
I have
not.
that
that
realize
you?
is'to
business
Pen to ho in the same language as
ours» hut they are entirely different forms of certificates. They
of
that
would
Arlrls
steadily borrowed from the fund today_aii business—is not being
1 cgcici nuua
the excess of tax receipts over the done as USual. We have too much
(special to the financial chronicle)^
amount of benefits paid to retired government in business and espem far as the
obligations were conLOS ANGELES, Calif.—William workers, dependents, and surviv- cially the insurance business, and
eerned. It would not have been, have to have transfer deeds ac- H. Flentye has become associated ors. The Treasury in return de- its time to mass our forces toward
necessary that an unlisted com- knowledged before a notary pub- with Dempsey-Tegeler & Co., 210 posits
government bonds in the a common goal. To elaborate let
pany list on an exchange in filing he and all of that business before West Seventh Street.
trust fund, the interest on which us take a look at what has been
such a registration with the SEC. y°u can transfer ownership. They
17
t
j
d
since 1937 has totalled well over going on in Washington.
They could still stay over the dPn>t transfer the same as we do
With r. 1. du ront
$2 billion.
A
study has been made and
counter,^ but they would be sub- hy merely signing the back of the
(special to the financial chronicle)
Since 1936 the total amount in much thought and discussion given
lect to the same requirements as stock certificate
and having it
LOS ANGELES, Calif.—Thomas benefits paid under OASI is $9 to the subject of taxation of life,
been
to
the
.
here.
the
and
exchanges,
hr
which I discussed with you before,
The
V
Eden from a .supposedly inexhaustible public purse, supporting
everyone by soaking the fast disappearing rich—will not measure
tip to competition with a tough
dictatorship. Unless our people
are strong, self-reliant and preductive, we won't be able to comPe^e with a tough, .aggressive nation on the way up.
A good example of surrendering
our birthright of self-reliance is
our Social Security Act.
Ever
LOS ANGELES, Calif —Byrle
an
become
se-
v^ainornid liivebiors
J"ET ^ANC"L ®""0MIC")
big business in for-
as a company fully listed eign securities. The
principal purexchange, and after it had pose of the American share cerbecome
so
registered, it would tificate is to facilitate dealings
out. But there
With California Investors
pdcation
on
money
large list of foreign
a
curities here on our
available for dealings..
opment of the so-called depositary
shares back in 1920. At that time
with
same
but is
pany
that
required
,
mm
Security Act. Many of these bills
propose extension of benefits and
changes of major importance. I you-go basis witn current benefits
sometimes wonder if our law- paid out of current levied taxes,
makers in Washington have any I urge you to follow the Cornidea of the dangers of expanded mittee study and write your ConFnrpiirn
Wuritip*
to the London office of the depos- s<>cial security and its probable gressman setting forth any senforeign oecuiiues
and th
-n turn release to effects on the future economy of sible ideas you may have to aid in
I think that about covers the tke -^ew York 0ffice which mails this country.
preventing further expansion of
high spots. There is one other individual checks to the regisExamination of our so-called benefits. Let us, for the first time
phase I might mention to you and tered holder of the American Social Security system leads to in 16 years, set up a systematic
that is foreign securities. The Shares So it was a. great conven- the conclusion that it is not insur- operation that will at least be
American Stock Exchange has the ience j.Q wQrk Qut an American ance by any stretch of the imag- devoid of the economic weaklargest list of foreign stock issues s^are arrangement
ination, but a deception whereby nesses now existing. Let us be
of any exchange in the United
u alsQ WQbrks in reverse If
ou
the Government levies a tax in- honest with the 49 million work-
panies.
There
—L0ndon
ajways disputes among the brokers
I think sooner or later there is of shares of the company. They
going to be some form of legisla- are released by cable in New
tion which will put the burden of York the same day to their New
disclosure upon all companies re- York branch, in the equivalent
gardless of whether or not they American share certificates.
are listed.
\
In other words, you could walk
In any event, that is the status
Lcmdon
branch of the
now of our unlisted companies. Guaranty
Trust
Company
and
We still have those which we had hand them 1,000 shares bf British
before March 1, 1934, except there American Tobacco and tell them
has been considerable erosion of
rejease to your N. Y. corresthe list due to recapitalizations, pondent
joOO
American
Share
mergers, and so forth, and as these Certificates
through
their
New
changes take place, we do not Yor^ office and they would do
have the right necessarily to sub- it by cable that day. It avoids all
stitute new securities for the old. t^at delay in getting stock back
So
there
has
been
a
gradual and forth.
dwindling in our unlisted securiFurther
than
that,
once
the
ties. Whereas back some years American share certificates are
ago they represented possibly 65%
issuedj the certificate is of the
of oui list and tiading volume, gajn£ type as we use for our own
now
the division is just about domestic companies and there are
leveised. The fully listed securi—
disputes about deliveries
If
ties are about 65% and the un- dividends are declared the check
listed are about 35 /0.
issued by the English comnany
«£ the requirements of listed com-
were
delivered here, there were
was
to a vote.
or
the
picked
some
some
class of cases" that it
public interest. We had
case
any
is
it
trade organizations ana
of the individual unlisted
companies, principally along the
lines of "Well, one more step in
regimentation," and also along the
lines of possibly having to disclose trade secrets. But, in any
event, the bill became pigeonholed and sidetracked in the rush
of probably more important legislation brought on by the war and
otherwise, so it has never come
could grant these apif we could show "in
they
says
■
m
to the United States with a
ocean
m
& Vf1 W
and
Exchange
Stock
London
sell the equivalent here, he would
■.«
mm
m
u
Thursday, October 8, 1953
same
category—at least in
Dpmiwpv-Tpwlpr
«.
,
'ttiough
they
were
listed
on
an
icxchange. However, that bill did
not pass.
oefore
•winch
It
came
Senate
of
the
_
I
as
of
^tavor of it, with
suggested.
various
industry
know
.segments of the industry
apthe
were
in
modifica-
some
There
all
was
some
opposition to it, particularly from
*.
ties in
of securi- F. Finnegan is
a
"
'*
>
«
*
There is also the
time and
dis-
tance barrier. Before
we
these American
certificates,^
we
used
stock
of
to
trade
certain
companies such
can
share
in
foreign
as
actual
English
British Ameri-
Tobacco and others. If
-
'
a
man,
with Francis I.
r>
o
1
fund
net
ANGELES
Calif.
Alton
the
bonds
deposited
by
Treasury to cover its borrow-
ings.
This
fire and casualty companies; gov-
approximately $18 ernment marine and aviation in-
was
government
y
(Special to the financial chhonicle)
LOS
billion dollars. As of last May the
billion of which $17 billion was in
With otern, rrank rirm
adopted
the
now
& Co., 677 South Figueroa
ny.i
ipeared. So far
tions
case
language other than Eng- du Pont
up for hearings tish
the problem is even more Street.
committees
at complicated.
representatives
segments
*
guaranteed. In the
money
government
surance;
self-insur*
ance
of leased properties — the
Army and Air Force, exclusive of
has been spent the Navy, have some 5,000 bases
(the in force; mortgage legislation per-
and these future obligations
government bonds) will be satis- mitting the National Service Life
fied through the levy of future. Insurance Fund to invest in VA
Eighth Street, members taxes upon the economy in gen- guaranteed home loans; Federal
of the New York Stock Exchange, eral. ' 7
Crop Insurance, which under: le^
Gumbiner
has
with Stern,
325
become-associated
Frank, Meyer & Fox,
West
■
•
'.
^
•
'
•
■
::
'
••
•«
'
'
:
•
Volume 178
Number 5262
The Commercial and Financial Chronicle
...
(1349)
As I have gone about
gislation passed this
the
year allows
Grop Insurance Cor¬
Federal
try it
the
coun¬
at times distressing
was
to
standpoint
is
less.
you
I
ask
helpless
and
29
hope¬
to recall the fun¬
damental
truth
poration to extend its facilities to
which
Whitman
apathy displayed by in¬
larger era. Here is a form of dustry,
including
insurance,
in expressed when he said: "The
whole theory of the universe is
coverage
which began first by dealing with our critical situation.
protecting the loss of growing Business and professional men and pointed unerringly to one single
crops from natural elements and women appeared to be scared stiff individual
namely,
to
you."
the
note
a
—
writing fire insurance
is
now
while
tobacco
that
being
cured;
on
cov¬
rightfully
belongs
the field of private insurers.
erage
in
again 'to Social Se¬
which was orig¬
intended to provide mini¬
coverage
inally
subsistence
mum
expanded
now
vorship
benefits
amount to
of 1953.
in
16
only
close to that figure this
come
but
year
will
$300 billion at the end
government
have been at it
we
over
100 years.
into
intrusion
business,
our
have, at times,
you
equally dan¬
state level.
gerous trends at the
Here in New York you had the
-
struggle in
to
your
the
prevent
recent legislature
adoption of com¬
pulsory automobile insurance. You
tfie
won
is
still
going
In
on.
humble
m,y
have become
we
so
readily accept it and fail to recog¬
nize its potential dangers.
For
example: Since 1950 you have had
a
compulsory
State
Disability
Law
why
—
not
a
pulsory automobile law?
Many states have been
with the idea of
field
would
of
a
state
rate
subject
com¬
toying
in
which
agency
making
insurance
unsound
same
to" the
intolerable
and
conditions
existing in the field of
public utilities. It behooves us to
remain
private enterprise and
resist political intervention at
to
as
a
level.
any
government which sets out to pro¬
tect
its people from every exi¬
gency of life is a government hell¬
bent down the road that leads to
unbridled
To express my
thinking of com¬
insurance, whether it be
sickness, automobile
I quote
you,
article
which
"To
12,
"Hu¬
1952:
sure, the advocates of
legislation'
will
counter
with
the
Power
assertion
be
can
that
State
contained,
that
it
be limited to the special pur¬
can
stated
poses
the
But
in
legislation.
the
completely ig¬
history and the nature
of the State.
been
„
assertion
both
nores
The State has
anti-social
an
only
business
of power;
on
in
appeared
Nov.
be
'social
its
an
Events"
man
what have
excerpt from an
or
always
organization;
the exercise
is
its lives for and thrives
Every
power.
power acquired
either by conquest
by the State,
by legislation, is merely an ap¬
petizer for
more.
Society can
protect itself from the State only
by recognizing it for what it in¬
herently is, and jealously guarding itself against it." <
'
or
.
What
Private Insurance
As
insurance
proud of
we
we
of
hazards
Do
can
be
profession and what
our
doing to protect the
this country against
are
ple
men
Can
peo¬
the
of
death, sickness, acci¬
dent and disease, not overlooking
the vast coverages in the indus¬
trial
field
protecting
invested
capital, the backbone of this great
nation.
has
Insurance
will continue to be
portant part of
our
been
and
vital and im¬
a
dynamic
econ¬
omy.
We
ica and
continue to keep Amer¬
our
busines—free and pro¬
gressive—if
in
the
we
will
interests
of
do
the
our job
insuring
public, having always in mind that
motto "to serve" and to double
•efforts
of
care;
our
covering
and
more
our
more
people under the free and
voluntary system.
If we all do
the desire for state insur¬
is
such
an
grave
security will
of
cease
some
groups who foolishly appear will¬
ing to trade their self-respect and
freedom
doled
for
a
out
mess
by
a
of pottage to
paternalistic
government.
of
overlooked
state
freedom.
Because
is that
under
the
arrangement
"free"
of human activity are then
only tolerated by the government.
Fortunately
ard of
less
there
provides
living and employment, the
need
there
fare aids.
will
be
for
wel¬
To this end you, as
pur¬
of
security, have the re¬
sponsibility of protecting risk cap¬
veyors
ital invested in various
enterprises
against
the
hazards.
common
day activities
your every
us
In
you
can
thus contribute to the progress of
well balanced and
healthy so¬
ciety.
•
is
Meantime,
retrace
we must
steps
our
continue to
and
detour
the road to serfdom that
lead
to
the
surrender
loss
of
off
can
only
liberty
of
and
freedom.
our
We
know enough of history to
recog¬
nize that government
security is
exactly
prior claim by govern¬
a
ment upon salaries and
wages,
and
the forerunner of the state becom¬
land of
only hope for permanent liberty
other lies in restricting the power of
the
to do his part to make
ours
issues
in this
stake
a
job
your
and mine and that of every
American who has
clear
the
to
people
of
this country. Let us recognize that
the quest for a government pro¬
of
gram
personal
sentially
security
is
es¬
attempt to
escape
It finds reflection in
an
from
reality.
plan for "crade to grave" se¬
curity, in deficit financing the¬
the
government
who
the
itself,
regardless
of
officials
government
are
how
or
they may be selected.
v/arnings to be especially
of
the
demagogues
who
promise us something for nothing.
Their
wary
Our
founding
fathers were well
that individual freedom and
aware
personal
responsibiilty
for
one's
Utopian
welfare are equAl and in¬
separable parts of the same truth.
designed presumably to
provide shelter from the hazards
They knew that history would
always support the truism: When
of
know
personal
history records it that in not
whether
ories
and
other
many
schemes
life.
and
Furthermore
has
case
ment
we
central
a
eliminated
ever
govern¬
poverty
or
achieved its promises of increased
welfare.
It
has
always offered
own
given
responsibility
it
be
taken
by
voluntarily
up
is
lost—
force
or
individual
—
freedom does not long endure.
The freedom which
we enjoy is
a permanent possession. It did
Utopia in the future in exchange not come to us as the result of a
for ever-greater sacrifices
today. hand-out; nor is it self-perpetuat¬
But Utopia has never come closer ing.
Freedom isn't free. It never
and the sacrifices have
inished.
whole
We
have
sordid
dim¬
never
witnessed
the
not
and
was
will
never
be.
It
has
a
price tag.
It requires eternal vigi¬
the
alertness
to
expose
Russia, in lance;
Germany and in Italy. We have every threat, and to be prepared
looked at part of it in Britain. to fight those misguided intellec¬
Let
realize
us
in
story
that
people who
a
look to their government for eco¬
tuals
security
sap
their
own
strength. Eventually they destroy
as
well.
be
no
and
For
their
government
government
a
can
stronger than the people it
It cannot, of itself, cre¬
governs.
ate wealth
tangibles
the tangibles or in¬
or
that
make
nation
a
strong.
Let
who
would
deprive
most precious heritage.
our
nomic
themselves
This
country
in
financial
the
who relied
men
who
dared
to
It
on
lives, who had enough
themselves
risks.
to
This
their
courage
candidate
the
over
for
meet late
tion.
this
The
creased
divdend
a
term.
near
month
this
to
take
ac¬
has
dividend
once
increase
The directors
been
in¬
from
year,
stock
in
in
a
the
on
the opening
Then the stock
quarter.
split two-for-
was
one
and the initial distribution
the
new
stock,
representing
on
affiliated
improvements
that
the
this rate affords
even
are
full
improvements and new equipment,
Railway by last year
low the
industry
of 36.9%.
average
As recently as
1947 this ratio had
been
only 1.2 points be¬
38.8%,
or
low that of the Class I carriers
a
the
current
further
been made.
year
For the
haseight months
through
August gross revenues
topped $184 million compared with
closing price, it just under $177 million a year
represents distribution of a most earlier.
Aggregate
maintenance
modest proportion of actual earn¬ charges
were
up
modestly antiings.
Federal
income
taxes
increasea
liberal
on
yield of
last
Southern
that
over
the
roads
year-to-year
a
cline
in
first
unfavorable
de¬
earnings for August, the
months.
off
were
of
one
was
reported
many
6%, based
week's
comparison
Gross
in
revenues
little less than $800,000
more
less,
than $2.1 million.
net
income
Neverthc^
b^'
increased
$6,622,000, reaching $27,515,000 for
the period.
gain
in
Just about 90% of the
gross
revenues
was
tion of almost 50%
taxes but
come
consideration
in Federal in¬
more
a
in
important
appraising
the
basic status of the road is the trend
of
the operating costs.
Transpor¬
tation costs were again held under
strict control although the trans¬
portation
ratio
did
go
Common
1953
earnings
came
to
our
ment
you
hands
and
cause
position
sit
cannot
let
good
George
is
when
like
you
have
to
on
pared with $7.28 a year ago.
There
other
are
factors
think
prove
govern¬
affair;
you
just
longer
no
allegiance,
permit
your
that you can let down and
attentions
your
is
the
time
and takes
to
wonder—then
the other hand, climbed
rather analysts toward the road's securi¬
sharply, from 27.9% to 34.2%. The ties. The company is in a strong
dollar increase in maintenance
cruals
in
gross
amounted
the
face
ac¬
the reduced
of
to
$1,153,000.
Maintenance of way expenditures,
moreover, were more than
above those for July, 1953.
One of the
most
10%
impressive
as¬
financial
position.
ent substantial
lihood ' of
creased,
it
it
maturities
problem.
is
no
ing extensive
the
or
so
has
improvement in operat¬
ing efficiency.
With the elimina¬
tion of its last steam power a cou¬
ple
of
become
months
the
ago
largest
Southern
road
in
panding
the
of
the
lines, giv¬
coverage of the ex¬
southeastern
section
the United States. There
indications
has
growth
the
time to
that
this
continue
will
come.
are
else
someone
cuts
in
the enterprise. We
must work to whittle government
over
industrial
for
taxes
size,
give
down
the
enterprise system
productive
and
for
their
to
proven
an open
expansion,
all
establish
proper
American
field for
and
a
once
logically
time
has
been
the
necessary
The
is
yard
improvements
undertaken
have
by Southern it¬
be
a
continuing
ings potential.
Communist
abroad.
menace
at
need
and
We
home' and
we
have top
flight leadership in
ernment
to
of
open
progress
toward
a
up
a
Unfortunately, the
His
as
civilization
to
vidual.
Let
from
we are
—that
hold
we
great
hands.
There
more
realize
at the crossroads
destiny in
our
new
peace.
individual
is the
crooked
our
and
rocky road of State Slavery with
realities.
average per¬
his
therefore
us
today that
gov¬
something about it but that
situation
became
himself created the
Independence, is to protect
God-given rights of the indi¬
its
which implies he would like
do
imagine and likeness,
affirmed in the Declara¬
as
promises
rosy
—it
is
but
horrible
Here is the straight road
the
tried
and
proven
of Freedom—the American
You
and
when he thinks of his part in lenge. If
this problem, is inclined to do so
desire to
in a spirit of frustration or cyni¬
the
basic
State and the chief purpose of the
son,
cism
the
tion of
must
and to guide this
lasting
Ameri¬
many
common-
policy for coping with the
sense
in
and
the
freedom
must
I
must
you
meet
love
preserve
and
it
road
Way.
the
chal¬
America
as
a
and
opportunity then
now.
D. T. McMAIlON
land of
we
recognize that—the time for
action is
some
Thus, there should
reestablish
to
man
State,
of
many
sion in the road's traffic and earn¬
forgotten
man
1956
Finally, there is the fa¬
during
year
that
felt
vorable location
past
pres¬
longer present any
pects of the Southern performance
the
With the
cash, and the like¬
being further in¬
truth that every human being gets
his fundamental rights from God,
not from the State.
God created
complex
besides
to
tensive
Unfortunately too
have
It is
32.2% compared with the improved operating efficiency
31.9% in August of the preceding and high current earnings dictat¬
year.
The maintenance ratio, on ing the constructive attitude by
nally,
America great.
cans
•om-
ratio of less than 3.5 times.
self-reliance—and to be again the
hand of people who once made
be¬
requires
Good
love
a
your
it
do
government
constant attention.
ment
station
or
If you want good govern¬
the
for
$9.83
generally expected that results for
the full year will top $12.00, indi¬
cating a
current
price-earnings
nomi¬
up
share
interval
intelligently and understand rights for which we stand—to re¬
our
inalienable rights to
must all become political assert
human
dignity, self-respect and
minded—every ."one of us irre¬
in life.
car¬
ried
through to net income, after
for the
month
The major factor in this
and
net income taxes.
dipped from $3,282,279 to $2,858,- highly gratifying performance was385, or a decline of $424,000. The the reduction in the transporta¬
drop was cushioned by a reduc¬ tion ratio from 33.5% to 30.6%.
a
we
spective of
con¬
progress
tion
that
as
whole.
During
While
t
Southern
siderable
share, thus maintaining the old
an
yard
had reduced its transportation ra¬
tio to 32.6%, which was well be¬
the
rate.
These
still going on
potential savings
have not by any means been real¬
ized as yet.
With the property
so
third quarter, was set at 62 V2 cents
a
System
companies.
country to be fully dieselized. Ex¬
the
self-reliance
us
own
who
self and others of the
our
take
legacy.
for
come
built
was
themselves,
shape
community
consider Southern Railway as per¬
haps the most logical and likely
been
not built by
somebody else
on
to take care of them.
by
of
us
was
who relied
men
American
therefore face the situa¬
us
has hardly
that way, there are
railroad analysts and others
acnng
many
old
are
realize—it
Although the stock
been
$4.00 annual rate to $5.00
Must Retrace Our Steps
warning that the
fully
us
Southern Railway
high stand¬
a
signs of ing our master. Let us not for¬
awakening by the people. Let get the
teachings of our fore¬
capitalize on that start and let fathers and their
an
to be
misguided
that
or
loss
areas
ance,
be
without
what
world
the clarion cry
minimum
medical
a
You cannot be half-free.
era
free doctor bills and cradle
and
a
government
little of this
a
control
-this,
to
housing;
of
amount
and
can
tions
gun to understand is that you can¬
not
have
a
limited
amount
of
one
pulsory
dictatorship.
What many Americans have be¬
con¬
ditioned to the word "compulsory"
over
the last 20 years, that we
Benefits
artificial
security, over-taxa¬
over-spending by govern¬
mental bureaucracy. At long last
we
have begun to realize that a
battle "but the campaign
opinion
the
for
public
In addition to the threat of Fed¬
eral
were
tion and
The life insurance business
years.
will
survi¬
values
All this has been built up
the
by
it has
benefits,
where the
they
losing their freedom in this drive
Referring
curity
asked to help Therefore, let everyone of us work
to make our
economy tick.
The
spread the true facts to the masses
of our people who were slowly more effectively our system func¬
when
Assistant
KANSAS CITY
SOUTHERN
to
President
LINES
Kansas City 5, Missouri
,
expan¬
30
The Commercial and Financial Chronicle...
(1350)
nation's income is far more evenly
Continued from first page
distributed
groups
The
various
the
of our population now than
before.
ever
Coming Advance
among
"For
ties
in the mid-thir¬
families had pre-tax
instance,
of
81%
technical
of market history were 1929,
1946. In comparison with
years
been
1937 and
295
It is
high and 255 low.
this
War II, the
from $65 bil¬
lion in 1938 to $198 billion.
Na¬
tional income, in the same period
soared from $72 billion to $268
and
periods the present market ceiving $2,000 to $10,000 and 5%
is not vulnerable on the basis of had earnings of more than $10,000.
the two most important factors re¬
"In
spreading the purchasing
possible that the average will drop
a bit below 250 to maybe 240, but
that means little to the long-term
those
investor if the average
lating to the price level of com¬
stocks— earnings and divi¬
600
or
months
nine
The
will.
it
reaches 500
• I
the next few years.
over
believe
six
next
or
be the last op¬
buy common stocks
on
the very favorable
price to
earnings and price to dividend ra¬
tios that prevail today.
The In¬
dustrial average held in the 160195 area for almost four years in
portunity
may
to
I believe
1946-1949.
mon
dends. The table below shows how
stocks
going grade bonds.
approximate:
we are
The market has had seven moves
and down of roughly 20
up
points
the past 34
over
more
or
This type of action may
continue for a while longer in the
months.
roughly
of
confines
broad
with high
Today's figures are
compared
as
240
For $1.00
For $1.00
Same Inc.
of Earns.
of Divs.
$10 in Bds.
$29.90
1937
16.60
22.00
$15.60
10.75
1946——
16.80
28.40
9.00
9.00
16.25
6.50
1929
$19.30
Today—
has
The market
reached
oils
their
highs
from
March to July, 1952, and
have de¬
The farm equipment
their highs in Oc¬
clined 25%.
issues reached
1952,
tober,
have
and
declined
Even the rails which
30%.
over
reached their high as recently as
this
of
January
have
year,
de¬
clined almost 20%.
As far
cal
the long-term techni¬
as
is
pattern
way
Industrial
the
180.
around
I
said
ing of the nation's
income together
education
the
with
provisions
lengthening
in
factors
big
of
the
of formal education in the
country.
Half a century ago only
one out of ten of high school age
that
started
was
time
—inflation advance similar to that
witnessed from 1914 to 1929.
an
in
Such
advance, of course, will not be
straight line.
It will be in¬
a
terrupted at various times. Usually
an
advance of this nature consists
of
five
phases, three
and two of decline.
of
further weakness may be
buying opportunity be¬
last
sometime
cause
ket will start
advance
We have al¬
ready witnessed two advancing
phases from. 1942 to 1946 and from
1949 to, roughly, 1952.
We also
have
completed
one
declining
phase from 1946 to 1949 and it is
my opinion that we are close to the
end of the second declining phase
1951.
If all 30 stocks in the DowIndustrials
their
1951-1953
day,
the
reached
a
had
lows
on
reached
the
same
average
would
have
low of about 223.
1
believe the dynamic phase of the
long-term
advance
of
will
us.
It
be
is
still
similar
ahead
to
the
1924-1929
period but, of course, in
fashion.
I orig¬
inally stated in 1948 that I thought
more
restrained
the market would
advance
in
1954
the
above
\
major influence
third
"The
the
mar¬
rise that will carry
rising standards of
increased
the
is
tion
on
consump¬
amount
of
The latter, in turn,
result of the tremendous ad¬
leisure
time.
above 386 high of
is a
prediction, like my
vance in productivity—more effi¬
1948 prediction is based on a tech¬
cient machines and processes.
As
nical approach, but there is plenty
compared to his predecessor of the
of
fundamental
and
statistical
This
1929.
1900-1910
farm
earnings
per
share
of the 30 stocks in the Dow-Jones
Industrials
for
the
five
prewar
more
era,
goods
and 50%
the average nontoday producing
is
worker
in
more
1935-1939
dence
half
the
hours—
than
were
that
was
the
at
investment
prewar
pessimistic
confi¬
level rather
feeling
of
today.
approach.
fundamental
more or
There
reasons
are
for
less
a
more
such
an
expectation.
Dire Predictions Superficial
Most of the dire predictions of
deep
cle
whose
tions
we
recession
in
business
a
have
tant
Even
impor¬
more
is the shift in control of our
Twenty-five years
supply.
money
in
the control shifted from
to politicians.
This has
1933,
bankers
caused
the
will
public
deflation
in
of the
would
elimination
mean
crease
therefore
will
the
The poli¬
vote
when¬
indications
are
in¬
to
supply
money
there
lower
of
party in power.
ticians
ever
form
farm prices,
and
profits as such a
business
lower
deflation
not
the
lower
wages,
Since
accept deep
profound change.
a
of
a
government
achieved
spending, was
saddling
ourselves
by
with
a
This
administration
heavy
very
debt
burden.
faces
the
challenge that
creasing prosperity
to
in¬
up
ever
our
need
not
be
is the
lar
in
increase
Projections of
lation growth
the
to
postwar popu¬
not even close
were
is
This
mark.
spectacu¬
population.
our
our
one
reason
capable economists
and
corporation managements
have
miscalculated the strength
why
of
so
many
postwar
economy.
population
States
population
would not reach its present figure
of 160 million until 1965. In 1947,
it
projected
th<^ 1952 population
would be 147.5 million—10 million
less
th&n
people
actually
there
were.
.
The
number
of
people
in this
country is growing "at the rate of
3
million
per
fyear,.; By 1960 our
20 million
should fee
population
.
larger.
markets for
expanded
means
r^ost goods and serv¬
For instance*
ices.
additional pro¬
requirements which
duction
be placed on
Synthetic fibers and
gas,
50 %; of plas¬
lOO%.¥';>*
additionfto growth opportu¬
tics, almost
In
nities, the gain in our population
has another investment aspect: It
strengthens the safety factor in
industries
those
whose
sales
vol¬
is
directly ^related to the
people (paper, for ex¬
ample) rather than to the business
ume
a
number of
Frederick
Lewis
Allen,
'Life,'
editor of
'Harper's,' wrote:
"•'In
A
in
the
year
1900 when silk
stockings were a mark of luxury,
155,000 pairs of them were manu¬
factured in the United States. But
in the year 1949, when the tech¬
nological advance of industry had
third
our new
ion, the
to
factor
realizes
increase
must
oust
have
crease
in
tional
of
that to
continue
standard of living
h; continued
developing
of
all
people with savings get the habit
of being capitalists, and that the
Treasury officials of the present
Administration
fiscal
tax
developing
are
policies, including
which
program,
rational
a
will
permit
America to continue to grow and
reach higher standards of living
without
the
The
rational
a
of
support
spending.
deficit
statement
tax
con¬
program
most
important.
If we
can
change the present tax laws on
capital gains and double taxation
of
dividends, it will be the one
single thing that
would
cause
higher
market
levels.
I
much
believe
modification
some
tax laws will
two
profit
the
at
a
of
our
elimination
and the
The
years.
excess
of
the next
over
occur
taxes
of
re¬
personal income taxes
of next year will be
start
step in the right direction.
These
are
-
of the favorable
some
factors that will,
in
opinion, bring about a much
long-term
my
higher
of common stock
period of years. I
other factors,
such as
the high
potential in¬
crease in world trade, but I think
we have covered the ground suf¬
ficiently. As I said before, I do
level
prices
over
a
could also bring out
expect this advance to start
It will most likely
not
immediately.
preceded by
of
further period
a
to
that
witnessed
over
irregularity^ similar
which
the
we
have
past two years.
Advance To
Selective
Be
The
coming advance, in my
opinion, will continue to be se¬
lective.
In the earlier stages, the
leaders will be the growth stocks
is
It
this
type"
were
1949-1952 rise.
leaders of the
the
that
issues
investment
and
that
issue
of
is
bought by institutional investors
and
larger individual accounts.
Before the more speculative
join
issues
cyclical
vance
in
the
ad¬
it would seem that a specu¬
lative
our
public
up.
This
low ebb and it may
at
be
time before it comes to
would therefore concen¬
a
some
life.
I
trate for the time
of
companies
in
productivity and na¬
IL has had to do
things iii the early part of
being
on
stocks
growth
indus¬
Growth
Stocks
tries.
in¬
income!
some
by
consciousness
ment is
is the nature
Administration. In my opin¬
new Republican Admin¬
istration
we
formation
following must be
usually happens
at a later stage of the advance.
V
Aspects of Republican Speculative Interest at the mo¬
far-reaching implica¬ Favorable
not yet have fully
Administration
article
can."
investment
built
cycle.
may
recent
enter¬
the great mass of people until
the aluminum indus¬
electric power- over:;
of
may
try in the nekt seven years could
reach 45% o£ the 1951 output; of
natural
capital
the
be
J-;j
peop4
More
millions
do this job better than
He goes on to say that we must
accelerate
the
present
rate
of
duction
In its forecasts of the
1945-1975, published six years ago,
the Bureau of Census anticipated
the United
and
can
the government
is
Population Growth
Another factor
munity
prisers
cerning
deep depression in the offing.
grasped.
"In
However, this is
trick
sup¬
money
system.
But
based on conflict
per
the economy.
goods in less time
than did the 1939 worker.
$8.60 a share.
"At
the
turn
of the century,
The average earnings for the past
the average man labored 10 hours
five years 1948-1952 were $25.73,
a
day, six days per week.
Even
or an increase of 200%.
The cur¬ if he had the
income, he had. no
rent annual rate is $27.60, or 220%
time to play golf on Saturday, take
above prewar.
Let us assume that his
family fishing on Sunday. Off
these earnings will not remain at
to
work
before
daylight, home
this high level and will drop 25%
after dark, he was not a good
to $21 per share.
This level would market
for
skis,
rhododendron
still be 150% above the prewar
bushes or sport slacks.
In 1953,
level.
If we figure on 150% ad¬
less than eight hours per day, five
vance
from the average high of
days per week is standard in of¬
168 in the Dow-Jones Industrials,
fices
and
factories.
In another
for the 1935-1939 period, we ar¬
few years, a 30-hour week is like¬
rive at 420 in the averages.
This ly to be the prevailing standard.
figure is arrived at after a 25%
"The combination of all of these
drop in earnings which has not factors has
produced nothing short
yet occurred and based on the of a miracle in America—a
mira¬
years
ply
that
1920.
considerably
which, for most stocks, started in premise
Jones
a
The average
market in May, 1942,
long-term war—postwar
a
1940, or less than 5 million as in
Opportunity
backing for it.
the
—that
Any
the
still
average
at
Last Buying
same
I
the
about
I did in September, 1948,
as
when
concerned,
feel
to
continue
The
of
terms
major force responsible for ago, money control was in the
the
explosive increase in con¬ hands of bankers. When the United
sumption standards.
The spread¬ States went off the gold standard
years
discount¬
been
billion. -In
rose
ond
the GI benefit program have been
a
supply
economic
capita, there was $498 per based on war or even defense
in 1939, as compared with production programs. We face up
power among the former poor and
$1,258 today.
Even when meas¬ to the further challenge that pros¬
near poor, a new mass market for
American goods has been created ured in constant 1939 dollars, this perity does not depend upon pa¬
government spending,
that not only was undreamed of a is a gain of almost 60% per capita ternalistic
This and that, given the opportunity,
few years ago, but the significance in a relatively few years.
of which is still not fully appre¬ new money has been frozen into and the climate, the business com¬
15% to 25% drop in earn¬
attended
school.
and 300.
Twenty-five
ings. We are in a period in which
investors are placing more stress years ago, this figure had risen to
Actual Two-Year Bear Market
1950
on
what they think is going to one out of two, while the
census showed four out of five at¬
To the holder of the average happen than in what is actually
tending school.
stock rather than the stock mar¬ happening.
"The figures on higher educa¬
ket averages, we have been in a
You
will
recall, if you have
tion are
even
more
spectacular
bear market for over two years. heard some of my previous talks
with over twice as many students
Since January, 1951, the market in Los Angeles, that I have been
in college today as in 1929 and
has
undergone a piecemeal re¬ more or iess cautious for the last
9 times as many as at the turn of
adjustment.
The steels reached two years. Many groups had vul¬
the century.
their highs in January, 1951, and nerable
patterns and had formed
"The ambition to wear better
have declined 33%.
The textiles
potential tops.
However, most of
reached their highs in February, these have been worked out over clothes, to live in nicer homes, to
1951, and have declined almost a period of time and there are indulge in constructive hobbies—
and to enjoy the things others en¬
40%, the distillers reached their only a few groups that still appear
greater in
a
highs in October, 1951, and de¬ vulnerable. In my opinion, the joy—is obviously
clined
over
30%,
the
coppers market is less vulnerable than any population with 41 million high
school graduates than in one of
reached
their high in January, time since 1951.
23 million such as prevailed
in
1952, and have declined 33%, the
ing
World
of
financing
the
prosperity,
person
$1 of dividends in the three
periods of stock market highs in
comparison with today and also ciated.
how much you had to pay to get
"The advancing level of educa¬
the same income from common tion among our people is the sec¬
and
through a similar readjustment or
consolidating period right now.
both
paid for $1 of earnings
much you
a
were
conflict.
into
As
money
By 1948, only 26% had income of
less than
$2,000, 69% were re¬
of great economic
triggered by world
During part of this time,
too, the government put many bil¬
lions of dollars of public funds
growth
result of the deficit
only 1% received $10,000 or more.
250 low. The extremes so far have
sions, periods
importantly, the shift in its
more
control.
income of less than $2,000,
18% took in $2,000 to $10,000 and
mar¬
further readjustment
a
period, will move higher over the
next few years.
One is the in¬
crease
in the money supply and
money
In Common Stocks
reasoning that the
after
ket,
Thursday, October 8, 1953
Classifications
Growth
of
stocks
fall
into
three
broad''classifications:
its tenure of a! mildly deflationary
fears
of
over¬
(1) Well established, good qual¬
produced nylons—generally con¬
overexpansion of sidered at least as good as silk— character, but over the longer ity issues with an obvious growth
term, its objectives should be fa¬ trend such as Minnesota Mining,
our
industry and an oversupply the number of pairs of nylons sold
vorable to income and purchasing Dow
of
goods.
Chemical, International
Perhaps we haven't in the United States was nothing
that this advance might even carry
power and earnings.
looked enough at the consumption like
Business Machine, etc.
Some of
155,000 —it was 543,000,000
higher to the 500-600 level.
or potential demand.
In a recent ^address by, Under- the issues of this type are
still
pairs.'
The stock market is not high
I quote from a 1953 bulletin of
"We
wonder
if
of ^Commerce
Walter rather high and should be pur¬
some
simple, Secretary
today when compared with the David L. Babson &
chased
only
during periods
of
Co., invest¬ homely facts about the American Williams, he stresses this point:
past.
In
fact,
a
recent
study ment counselors of Boston, on the
economy, such as the above, are
"The past 60 years have been price weakness. There are many,
showed that even earlier in the
rise in consumption standards:
not being overlooked by the
great years of great economic growth however, that are attractive at
year when the market was much
"The most significant fact about majority of business
analysts and and an accompanying growth in around current price levels.
higher than today, 72% of the the fourfold
expansion in national investment people—busy as they economic power. Throughout, de¬
(2) New and smaller companies
stocks listed on the New York
income in the past 15 years (from have been with their
pessimistic, spite slumps, continued prosperity with a relatively small number of
Stock Exchange were
selling be¬ $72 to $300 billions) is that the forecasts since World War
These com¬
II."
has been manifested in the peo¬ shares outstanding.
low 1946 highs despite the fact
lower
income
groups
have re¬
ple's capacity; to buy more and panies are more speculative than
that the 1946 high was 213 as com¬
Supply and Control of Money
ceived
the
lion's
share
of
the
the well-entrenched growth com¬
more goods and services, through
pared with the 1953 high of 295.
enormous increase.
Not that pov¬
There are several other factors their capacity >to earn more and panies and usually move over a
Thou
nrP^Pflt
The high points in' the last 25
erty has been eliminated, but the that I believe substantiate my more real incoine. -On two occa¬ ,,rMn nr.ino
the
1929 high of 386 in the DowJones Industrial average to reach
450 in late 1950s.
I now believe
been
based
production
on
and
ronOo
Number 5262.... The Commercial and Financial Chronicle
Volume 178
unusual
opportunities for wide
appreciation over the longer term.
Companies like
Foote
Mineral,
Tracerlab,
Metalv Hydrides apd
Beck man
Instruments
com¬
are
Natural gas companies careful look at both the industry Continued
three categories of and
the
individual
companies.
(1) natural gas producers;
(2) There is plenty of romance in
transmission
or
pipe line com¬ such industries as titanium, elec¬
panies, and (3) natural gas dis¬ tronics, air conditioning, atomic
holdings.
fall
from
the
into
The
tributors.
panies of this type.
(3) Companies that
(1351)
of natural gas
11
page
Federal Taxes: Process,
hydraulics, powered met¬
country has increased 'over als, helicopters, rare metals, glass
use
energy,
are not in in this
since
1946.
This growth fibers,
gas
industries
but 250%
turbines,
automatic
For
the
12
months controls,
which, because of research, new continues.
ethical
drugs,
alloys,
1953, sales in¬ aluminum detergents, pipelines, Business School, and a Legal Adproducts or growth in territory ended June 30,
creased
to mention just a few industries, visory Staff headed by Mr. Ken10y2%
over
the similar
served,
have
acquired
growth
mention
characteristics.
Some of the rails 1952 period and natural gas sales To
a
few
individual neth Gemmill, a Philadelphia law-
essential
would
some
category as
equip¬
office
the
of
companies that
spending
are
for research
computors.
large
would
elec¬
on
sums
tronic
It
this
into
fall
ment
impossible, in the
have, to cover all
companies or even all industries
that
might
qualify as
growth
stocks or growth industries so I
be
short space we
will
touch
only the high spots.
Bank Stocks' Growth Possibilities
for
month
the
13.7%
creased
over
in¬
alone
June
of
stocks that
yer. These staffs are manned by
potentials, I like economists, accountants, and adInstruments, Greer Hy- ministrators
and have recently
draulics, Piasecki Helicopter, In- been augmented by selected perterprovincial
Pipe
Line,
North sonnel from the Internal Revenue
excellent
have
June, 1952.
all speculative but
are
Beckman
In the production
field, Repub¬
to be
outstanding. This issue is unlisted.
Some of the oil companies with American Aviation, Fansteel, Service.
In addition to the internal anlarge natural gas holdings also Servo-mechanisms, Virginia-Carolina
Chemical,
Gustin - Bacon, alysis work in the Treasury, the
appear to be attractive purchases.
Shamrock
Oil
&
Gas, Phillips Tracerlab and Gray Manufactur- Preparatory work includes conPetroleum and Pure Oil are listed ing.
ferences with many taxpayers
To return to the general stock w"° Wlsh to express their views
companies of this nature. In the
transmission field, El Paso Nat¬ market for a moment, the long- °r Present their particular problic
Natural
Gas
appears
ural Gas, Panhandle Eastern Pipe¬ term technical pattern of thfe marI believe the
field, it ap¬ line and Southern Natural Gas are ket is favorable.
pears to me that bank stocks offer among the leaders. For an overall market is less vulnerable at the
moment than at any time in the
interesting
growth
possibilities. picture, American Natural Qas is a
In
the late
1920's, bank stocks combination transmission and dis¬ past two years.
To the holder
were
bid up to fabulous prices tributing
company which returns of the average stock, rather than
but today they are selling at very close to a 6% return.
the stock
market averages, we
In
investment
the
levels.
reasonable
have
stocks
Bank
have been in
Chemicals Number One
been
long regarded as con¬
servative investments.
They are
available today on a 4% to 4V2%
yield basis and are selling at 10
to 15 times earnings. Bank stocks,
particularly in growth territories,
possess
long-term growth possi¬
discussion
No
is
of
1951.
growth stocks
possible without mention of the
nearer
bear market since
a
believe
I
the
this
of
end
much
are
we
readjust-
ment
period than the start. After
Number One growth industry — it
is
ended, I expect a much
chemicals. The field is so tremen¬ higher level of equity prices for
a
number
of
dous and covers so many indus¬
years.
The next
tries that it is obviously impos¬ few months may be the last opbilities. While American produc¬ sible, in a short paper of this portunity to buy common stocks
tivity has increased at the rate nature, to give
even
a
brief at the favorable price to earnings
of
about
21/2%
annually
since outline of the individual com¬ and price to dividend ratios avail¬
1900, bank deposits have increased panies or products involved. For able today.
There may or may
at
annual
of
rate
in
Banks
6%.
almost
outside
territories
a
complete (and very fascinating)
of
story of the industry, I suggest
are available at higher
you read Walter K. Guttman's re¬
yields and
on
more
favorable cently published "Money Magic
price to earnings ratios than the in Chemical Stocks."
large New York City banks.
I
Some of the chemicals, because
believe banks stocks in growth of their
very obvious growth pros¬
areas offer a conservative partici¬
pects, advanced to rather high
pation in the long-term growth price levels in 1952 and appeared
of the country.
to have discounted their growth
New York
excellent
utilities offer
Electric
possibilities also.
growth
Gener¬
ating capacity has doubled
since
the
the end of World War II, but
nation's
electric
to
increase
by
another
the
the
by
end
1929.
householder
there
course,
This
has
ites
in
lation
in
1929
and,
of
as
of
them.
drop of
since
1929.
in
a
rates
in
average
times
more
are
resulted
50%
over
Utilities
as
The
four
uses
current
much
speculative favor¬
also, but the specu¬
were
1929
in the holding company
highly pyramided
was
securities
with
This was
changed by the Utility Company
Holding Act of 1935 and most of
capital structures.
the electric
are
the
utilities traded
direct
operating
today
com¬
panies.
-
operating statistics bear
growth possibilities of the
industry.
utility
For
the
12
electric
9Vz% over
the previous 12 months. For the
month of June alone output in¬
creased
16.8%
over
June, 1952.
July, August and September
weekly statistics have continued
to show excellent gains with out¬
months
June
sales
gained
put ranging
levels.
stocks
30,
ended
industry
12% or more above
Utility common
do not
move
rapidly mar-
not
be
some
but
to
the
will
make
further irregularity,
long-term
little
buys at 260
investor
or
240 if the
market, several years from
reaches
will.
500
or
it
he
difference if
250
or
600.
I
now,
believe
it
Let's stop watching the tape
the averages and concentrate
and
growth equities at the favorable prices and
yields available today.
buying selected
on
Any
further
present
some
weakness
excellent
for long-
opportunities
Sydney Holtzman With
Joseph McManus Go.
«*
Union
third
is
Its
petrochemicals.
ing materials.
alloy
of
The manufacture
of
dividend
the
to
economy
Advisors.
announce
that
Sydney
Holtzman has become associated
change
the
with
in
firm
its
trading de¬
partment. Mr. Holtzman, was for¬
an officer of J. F. Reilly &
Co., Incorporated.
merly
in
earnings and dividends over
period of years and this should
be reflected in higher levels for
Stewart, Eubanks Add
a
stock.
common
There
(Special to The Financial Chronicle)
are
many
other
excellent
growth
chemical issues,
but space does
to dwell further
SAN FRANCISCO,
J,
Cal.—Robert
Cruikshank has been added to
the
staff
of
on
tax relief, it does not take long
The
the
by
Economic
the
greater
directive
cent
to
agencies
as
to
the
consider
sue—
Federal
the
merely the
1954
precursor
mention just a few of proach.
They are Bendix Avia¬
issues, I would include tion, International Paper, National
Public Service of Colorado, Flor¬ Lead,
Aluminium,
Ltd.,
Pfizer,
(Special to The Financial Chronicle)
To
PORTLAND, Maine—Harlie F.
the listed
ida
Light, Texas Utili¬ American Viscose and Food Ma¬
mention just a few.
I chinery. Some of these issues have
Power
to
ties,
prefer
utility
territories.
issues
are
&
of
Some
the
available
in
issues
of
a
higher yield
basis than listed issues.
Natural
gas
rather sizable price correc¬
tion and are near reasonable buy¬
had
a
unlisted
companies ing levels for long-term holding.
the
smaller
0|i
growth
is another
There
to
is
discuss
growth speculative
industry that should have repre¬ Some of
sentation in your common stock dynamic.
little
the
Godfrey
newer
and
become
associated
,
,
change
Street,
members
Rnctnn block
Boston <5fnr>lr Fvphnnffe
Bxcnange.
frey
nam
nam
opportunity left
was
of
,,
the
Mr
Mr. Goduoa
formerly with F. L. Put-
Rr
Tne
for
& Cn
Co., Inc., for manv vears
many years.
Reniamin Van Keepan
Benjamin
more
growth industries.
these could
be
quite
I suggest you take a
has
with H. M. Payson & Co., 93 Ex-
Van Neegan
in
Frank
C.
Masterson
&
City, passed away.
Co.,
lose
wm
President's
January Budget
the economic pic-
and
presented
Committee
of
Representatives.
of
that
"A
next
has
al¬
comprehensive
bill will
business
Tax
House
Chairman
Committee
said,
of
the
of
be
the
this
first
Com¬
session."
Program In the Ways
and Means
Committee
and'
of the
have
not
struMles
the
over
al
course
ExceS
Profits Tax
extension, raising of
the debt limit, and the vetoing of
"they6 ar™ receive/wfth^re-
cfngressLnd'commm'ee". 'for'it
Treasury De_
the fate
of
the
partment, whether under a Democratic or a Republican Administration, to be the protector of
the revenues and the defender of
the public interest. The interpretation
of thnt public or general interest will vary from one
Administration to another, yet it
is almost bound to clash at many
points with the sectional and particularistic interests of the members
the
of
Congressional
tax
committees.
Following the Treasury's pres¬
entation,
one
may
anticipate
weeks and months of open hear¬
ings before the Ways and Means
Committee.
be
On the basis of past
and
rporpspntfitivpt!
thev
ready discovered it in the
virtually
the House
revision
dollars.
Treasurv
find—if
is
room
tax
billion
a
The
Journal"), the greater will be the
elbow
for tax revision.
As
you
anyone
heard
and
are
who
aware,
wishes
to
through
goes
experience
the
proper channels will be heard by
the present and prospective
the taxing committees.
With
problem, one can conjecture wider range of
subjects opened
how the proceedings before the
up than in many years—and par¬
Ways and Means Committee will
ticularly with the whole Pan¬
unfold. Let me assure you that
dora's box of excise taxes flung
this process of conjecture is prewide open—one
may
anticipate
cisely that. I have no official conhea7ings"streteWng o"n into spring"
nection
with Treasury
Depart- lBven in
1951, against the more
ment and am basing my projecurgent background of the retreat
and
tax
b°ns
external indications
on
and
t"e customary gossip of the eco-
revenue
needs,
dampening
somewhat
the
enthusiasm
for
various relief and incentive
meas¬
line with President
In
enhower's
Eis¬
announced
policy, the
Treasury will seek to hold the
line on the corporation income
tax
is
rate
at
offered
52%.
the
prof!ts Tax will
of
liberalized
noeranzea
an
relief
and
into
closed
tion
to
come
m
ner-
depreciation,
wedge
per
in
the
double
of corporate dividends,
concessions
On
the
excise
give
to
tax
front,
hearings
spring, the Ways
Committee
will
go
executive
session, for
the purpose of converting its tax
thinking into a bill for presenta¬
the House.
One
may
an¬
ticipate a rather bitter struggle
growing out
of the combined
longing for tax reduction and
specific tax reliefs on one hand
and
the
revf,I11IP
revenue
the form
denreciation
River,
months,
in
Means
combination
Excess
of
of so-called
reduction
gains.
as
sector
the
entering
taxation'
further
Yalu
needs
reveilue.
expirauon 01 Tne excess unpopularity
£ y2?
hapS
Such
corporate
exniration
hpvond
?
the
Sometime
of
ures.
lrom
iasted for two
"industry."
The Treasury presentation will
be marked by a keen appreciation
and possibly some action to
New York
business of
that
*
levels.
to
"secret' directive which was pub-
Eubanks, nomlcs
Stewart,
Meyerson & York, 216 Montgomings per share pointing toward this very interesting industry.
ery Street, members of the San
larger dividends and higher share
Without going into detail, the Francisco and Los
Angeles Stock
prices.
following better-grade growth* is¬ Exchanges.
sues seem to have appeal at pres¬
There are a large number of
price levels,
electric utility stocks that appear ent
both from
a
Joins H. M. Payson Co.
and
technical
attractive at around current fundamental
ap¬
of
received-
the
of
Dodge in
carrying out the intent of his re-
39
Co.,
to
of
pulse beats of the
Council
of Budget Director
cess
The
&
McManus
Joseph
is
type
credit
tax
dividends
spe-
amplified
as
President's
mittee
Broadway, New York City, mem¬
bers of the New York Stock Ex¬
proposal
Canadian
credit—a
of
severe
of
Budget Bureau to curtail Fed- which would involve' another $y2
spending and.an anxious ear billion decrease in revenue. In
cocked
order
Sydney Holtzman
10%
the
father
extent
eral
tax revision
elec¬
carbons and batteries is
huge division. In addi¬
tion, to mention just a few di¬
verse
items, there are synthetic
fibers (dynel), hydrogenation of
coal, atomic energy plants, sili¬
cones.
The stock may not be a
spectacular
mover
marketwise,
but it should show steady growth
me
are
anxious eye on the efforts of the
ready
trodes,
ketwise, but many utilities are
demonstrating increases in earn¬ not allow
system
of the tax
conducted with an
set
the
on
Another
introduce
Reed
industrial
billion.
overhauling
of
It is the leader in
manufacture
losses will
limitations
tensive
Means
di¬
another
the
All of the efforts devoted to
laying the ground work for ex-
ing its program to the Ways and
vision is first in the field of alloy¬
the
eial reliefs and concessions the
Treasury will be able to endorse,
Suppose, for example, that the
top
rate
on
capital
gains
is
dropped from 25 to 15%
the
revenue
loss
(at present levels
of activity) would be near
in his January
Report, the Treasury
will open the Congressional phase
of the taxing process by present-
as large
in the in¬
proved treatment of alimony, and
°*J
Revenue Taxat/on. Out of this process of meetmgs,
memoranda,
and
soulthe elements of the
1954 Treasury tax program will
gradually evolve.
ture
twice
company
tending the tax to new fields. On
the individual income tax, some
type of deduction or credit allowance for working wives, im-
nue
Economic
dustry which is Allied Chemical.
Union
Carbide
is
the
largest
manufacturer
of
plastics in the
world and also the largest maker
of
the
temporarily, the 1951 rates rather
than letting them revert on March
1—meanwhile considering the reduction of many of the existing
excise tax rates and a broadening of the base of the excise tax
system to bring it close to, or actually convert it into, a manufacturer's excise
tax. Revenue
losses incurred by reducing some
excise tax rates would be offset—
perhaps more than offset—by ex-
.°rward with the staff of
*he Joint Congressional Commit-
Message
covers
Carbide
the
as
in
the plea will be to hold, at least
J*1611' accountants, and attorneys the like are due for sympathetic
have been set up to help formu- consideration,
late policy on certain specific
One need cite only one or two
Questions. Cooperative work is examples to indicate that reve-
the
I
It
consideration
January, armed with the
expenditure picture presented in
buy only one chemi¬
would buy Union
a pretty wide
segment of the chemical field and
is the second largest in the in¬
dustry. The largest is duPont, but
stock,
Carbide.
for,
Ireasurys program. Informal advlS0ry
committees of business
Next
If I could
cal
Ai;ms
cutbacks
the
in
term holding.
gases.
Latest
out the
1952
ahead. The re¬
general mar¬
ket
has brought some of these
issues back to more realistic price
decline
of buying
resi¬
and
industrial
since
several years
cent
plan levels.
capacity would
present
dential sales have shown high in¬
creases
for
companies
50%
Both
1956.
Prospects and Policy
growth
would
31
on
i
jy
bill
a
of
political
broad-based
a
£
however, toward
wiu
insistent
the other
?
I
of
the
a
and
emerge
Fventnal-
summer,
mittee for presentation to
entire
House
of
probably with
a
a
from the Com-
the
Representatives,
majority report
Continued
on
page
32
Chronicle... Thursday, October 8, 1953
The Commercial and Financial
32
(1352)
J3
31
Continued jrom page
colleagues the task of steering the
investor to tax-sheltered invest-
to
Federal Taxes: Process,
to the floor of the House,
should note, under the "gag
That is, the House has to
on the entire package, either
gress.
goes
•*ne
r™
IU
C
second session oi tne twra
minority reports,
one or more
„„;oio*s™n.
Reflections on the lax Legislative
vote
Process
approving it and sending it on to
In reviewing the legislative
the Senate or rejecting it and re- process in taxation, one is struck
♦committing it to the Ways and by its extreme openness, the opMeans Committee. Nine times out portunity
for all views to be
ten, it accepts it and sends it heard, and the long gauntlet that
»>n
to the Senate Finance Com- each tax bill has to run. One is
?:nittee.
also struck with some rather telling defects. The powerful role of
The Bill in the Senate
the Ways and Means Committee
frrill will reach
Proceedings here are
iflnmmittee
^pneraSlv
duMicate of the House
a
Committe?pro-
Ways md Means
-^riincrc
usually
though
-«^at shorte°
tZI
the
in
arlv
possible
After lengthy
been
vear
some^t
and
bearings
situation
revenue
have
will
-ihan
«
tax
and
arv
more
of the witCommittee
.searching questioning
ytesses
(only by the
themselves—no expert
♦sounsel is provided for the crossmembers
^xamination
as in the
investigating comWttees), the Committee will go
process
case
of special
linto
executive session for its
pol-
work. One may anticipate
that, both because of the attitude
Scy
leadership and because it
will be acting in the light of su-
information
l*rior
expendi-
on
Senate Finance group
will act more responsibly as to
revenue
requirements than the
Ways and Means Committee. Alfhough the Finance Committee
will undoubtedly insert additional
reliefs and concessions, it will
also be more inclined to set tax
es
e
g™donb?as\°dl>e desrecl^especially
svstem where the Cab-
di
stands
g
p
the
on
tax
to the Par-
presents
it
gram
falls
or
p
*
,
x
•4juce
in fall,
"Eventually,
emerge
a
1nresentfto^ongress
is
a
here. There will be
lively debate and the usual series
special amendments, the adop'lion
which is facilitated by
of
effective system of backand log-rolling.
wry
scratching
Jidom
sinCg it
..
J:e
adheres closely to
® d nrJnnc
.
vl,
.c
rnade by
Trpfsnrv
y.
a
reasu
And
ymuch
finally, our sytem seems to
opportunities
excessive
provide
modifications of the Admini-
for
Final Stages
After
♦nittee,
an
ad hoc committee not
standing
with
confused
be
Taxation
**nnp
u-11
^ V
pach
For
*
bill,
conferees
rpvp-
^
,
appointed
are
w
tjy the Ways and Means and Senate Finance Committees—usually
ranking members
ranxing memoers
-oie
be
•fhe
Senate
cepted
•cases,
although
and
will
version
be
f
of pressure.
,
tal job of economic stabilization
be takf °ut of the hands of
government. It seems fair to say,
jn fact> that growing understanding of, and confidence in, the
ability of government to deliver
a tolerable amount of economic
nrorPgc
still
Reed
why turn tQ tax and £iscal po].
icy as the primary ^ Qf sta.
bilization, and particularly as the
Primary weapon in the fight
against unemployment and de-
AU,
ough
,
we
.
the
course
fiscal
Commit-
on
,
on
flSCal pobcy of
l"
discussion
,
of
our
basic
import-
to
devote
further
noted,
Although
crystal
my
becomes exceedingly
great
a
not
pleted
ball
cloudy at
tax
tO
See
in
bill before
"nositivists"
so
u-i-.
to go
tion
of
such
policy.
As
already
adjourns
schedule
iime
has
case
hower and his economic adviser,
Arthur R. Burns,
T.
.
..
"
anoarently
A
.
the
Con-
bust in the short run and chronic
ReP°rts
po-
tax
proof
the projected
ing
had
vestment that
chance
may
be listed among the positivists.
6.
"Tax
a
Eisen-
President
weakens,
not investment portfolios have to
be protected
against bOOm and
back to the
before
t
COm-
it
this fundamental aspect of the inJltical hustings in preparation for vestment picture rather than the
Ihe election—in other words if narrower consideration of findft
go
j
isee
^essionai elections in November inflation orin the long run. It is dends,
perhaps even chronic u. 's!
1954. In fact, if Congress adjourns
stagnation
summer
nolicv
fis#nl
in
S^
l
regarding the desira-
a
distance in the future, I
Seem
deficits to inject
policy
the effectiveness of Federal fiscal policy will in considerable part determine whether or
imperative
to the President's desk for signa-
bill
shelters
I wish to
for
J.
k.
Lasser
Sheltered
and
w.
J
Investments,"
Casey
Business
New York, in this pubii-
Tovern^nt "bonds^ax^ree^divi!
mutual funds, oil operations, cat-
4l? ?Perations, citrus groves, timber, and
""T'i1*'.
i„ the Twin Citi^Tarea co£duCtedTy {he
.
t
.
.
.
..
,
.
in- author and his colleagues in 1950 led to
consider
today. I do not believe
thL^stabiiit^a^thaTthe^eSai'job
it will be interpreted as an advertisement of J. K. Lasser to
of stabilization left to government win
rfon
say
run
its
course—it
bill, will
emerge
I
is
a
from
fair
the
with
you
that I leave to him and his
icy
depression
combat
to
way
in no
the issue of how
prejudges
productive
should
resources
b&
inflation.
supports, and the like, it can leave
Though "fiscal policy" was giv¬ to private choice the basic deci¬
en
new
content and significance sions which guide resources into*
by these developments in econom¬ particular channels. Government
ic science and economic measure¬ spending and deficits would grow*,
ment, plus the experience of de¬ but control over resources wouldS
it would have
war,
private hands.
remain in
only limited potency today except
One
for one simple and overriding de¬
fiscal
velopment: the increase of Fed¬
policy
eral expenditures from $5 billion a
ence
of the
great attractions of
policy and central banking;
is that they hold interfer¬
with
private freedom of
in the thirties to $75 billion choice to a minimum. They maya year
in the fifties—an increase
pain people by leaving them with*
from about 10% of the national
less
money
or
please them byincome to 25%
of the national
leaving
them
with
more —
income.
This
single compelling but in either case, these pol¬
year
fact
Alvin
Professor
led
Hansen
recently: "With a budget
of the present size, I do not think
to
say
do
icies
dictate
not
how
the>
J*
vard Business
R^ew," MaJch^msio
shall
money
collapse in investment or private ponderous, is also more potent ancH
consumption expenditures as long can do in depression what mone¬
as
the Federal budget plays so
tary policy alone cannot do—not:
large
a
role."3
This does
not imply,
merely create favorable conditions
of course, for increased economic activity by/
providing "easy money" but ac¬
its huge tually generating such
activity
spending to keep the economy go¬ either directly by employing re¬
ing at full tilt. However, built into sources on public projects or in¬
that $75 billion of spending and directly
by
putting money ira
that
sit
Federal
the
government can
by and rely on
idly
the taxes to finance
number
siderable
it
are
a
con¬
automatic tax and
expenditure responses which tend
stabilizers,
to
of
compensate
and
have
a
powerful weapon aft
command to limit the devia¬
high and stable em¬
the upswings
ployment to tolerable limits. Have
in the private
we learned to use it and will the
we
count our
this score, for exam¬
ple, we find such things as old
age insurance and unemployment
compensation,
farm
price
sup¬
ports, and certain veterans bene¬
fits, Federal taxes in general and
blessing
We
our
tions
from
for
downswings
economy.:,
people's pockets.
automatic
of
When
on
the
Administration
Congress putt
and
practice? Ira
plan our per¬
investing
on the assumption that fiscal andl
monetary policy will replace
booms and busts with mild re¬
that
learning
into
other words, can we
and
sonal
institutional
progressive personal income
cessions
and
inflations? Potent¬
particular—all of these au¬
ially, yes. In practice to date, nos.
tomatically adjusting to changes
Progress has been steady and en¬
in business conditions by putting
couraging. A deep, prolonged de¬
more
money into or taking less
pression is a thing of the past*.
money out of private pockets dur¬
But
economic
forecasting
wil®
tax in
ing unemployment and depression
and
doing the
One
of
assessing
reverse
in inflation.
the
prime questions in
the
prospects
for
eco¬
nomic
stability is whether these
built-in flexibilities will be
the.. co"cIus,on "that private economic
£uess that no tax revision bill, or
at least
no
thoroughgoing revi-
io
ly. The positive use of fiscal pol¬
be spent. Neither
monetary policy nor fiscal policy?iat^
are
it is possible to experience a col¬
can
do the job alone. Monetaryfunds into the economy during
depression and surpluses to with- lapse or anything approaching it. policy can be operated more*
draw
excessive
We may have some excess capa¬
spending power
quickly in response to developing
during inflation. Those deficits city in plant and equipment and economic events, and is particu¬
and surpluses will appear auto- some decline in investment ex¬
larly effective in restraining in¬
matically if tax rates are held penditures, but we cannot have a flation. Fiscal policy, though more-
^?r, and Siting, tax increases in
.e ^P.^f °^.
^rea^ DepresHigher income, death, and
®xcJse ^ax rate were levied, thus
^a^lnS dollars out of the pockets
taxpayers at the very
it
attention to the role and opera-
tare.
run and economic ex¬
pansion and growth in the long
run The major instruments of
1S aPParent that we .• have
policy in keeping the come a lon£f way since 1933 when
an even keel makes President
Roosevelt was calling
the
process,
0f sucb
,
goes back to both
Houses for confirmation and then
the
tee,
s*ability and ful1 employment in
ment in
have touched
government, probably permanent¬
—
pression? Twenty years ago, in
undergraduate course in pub- pression and
against depression economic situa¬
and unemploythe
nart
part.
de¬
though the "New divided as between private and
Deal" auspices under which
we
public control. If the desire pre¬
gained our early experience in dominates to have private eco¬
conscious use of fiscal policy for
nomic units decide how the unem¬
anti-depression
purposes
un¬
ployed resources are to be allo¬
doubtedly retarded the acceptance cated among alternative uses, the?
of such
policies by the private
government can readily comply*
business community. World War
with this desire—either by reduc¬
II further accelerated the devel¬
ing tax rates, or by stepping up>
opment of fiscal economics in the the flows of relief payments, so¬
use of taxes as a weapon against
cial security benefits, farm price
techniques
my
~
his
his
a
imply that depression is an ex¬
for expanding the scope oT
cuse
derstanding of the limitations as
well as the possibilities of these
stability offers the best hope of
Federal Tax and Fiscal Policy
economy
Conference
as connot well
techniques,
to
velopment which hastened an un¬
stimulating business to maintain
its capital investment at high and
relatively stable levels. Confidence that the government will
tion
ance
the
is
as
CS ' nt ?
Department takes
gauged program of tax reduction,
From
role
taxDaver
fiscal
the
with
sumer'
taxPayer islegislative bility of reductions as nrotpetion
not wen and tax public works programs
represented
in
the
PVOpnt
the Treasnrv
reductions as protection
and
Committee
Finance
Senate
,he
sumer
his
In
producers.
A traditional means of doing
pect is unpleasant, since it seems
by the Roosevelt Administra¬
tion led to early experimentation
t.
v
^lnance1a» articulate, ana reductions and increases in tax
sharply-focused special interest rates and government pxnpnditurp
llsnallv
their role
a,
gT0„ver^erii f,xpendlture
groups, usually in their role as programs In view of their recent
te-tandmg steadfastly for a broad-
-
Acceptance of the new econom¬
ics
^ base shrinks and beC3USe the taX
Stable> Simply expands, but the
but
out on
The Com-
ac¬
Reed
Dan
between
members—Chairman
In
use.
capitai formation cycle, there are
svsfpm of govprnmpnt
i« u
li
u
«r :
p^, y.L.f
mn}fe ^lem ot government is beyond such "automatic flexibil-
in a great majority of
undoubtedly there will be
battle
the
two
two
differences
out
ironed
will
of the
or tne
Here
-committees.
«iO
ing: out of the private
ho feel that the fundamen-
omy.
so
is quick expansion of public
the tools of national income works
expenditures
on
roads,,
accounting, thus making it pos¬
dams, conservation projects, and
sible to put the new insights to
the like. But to many, this pros¬
ing
stanaing partiCularly open to the influence hv" and call for comnpnsatorv
„f
wpll-financpd
artimlatP
and
a
?•
can tor compensatory
wnn
con^usea
.
Joint Committee on Internal Rev-
sue
o^principle
Principle
by^ the Senate, g^und"
Com-' grounas
grounds
passage
goes to conterence
goes to Conference com
the bill
me dux
insights
new
ment of Commerce were develop¬
lreasui> presents to Congress is a tbe short
comes out of Co gress sve
to
of Economic Research and Depart¬
nor the product of any one group
*n Congress hence it becomes ex-
bill will
the floor of the Sento say, no "gag
on
utile" applies
,
pression to boom and back again.
In our system the tax act that
finance> the term "fiscal polfinally emerges is neither the jCy» referred to the policy of getproduct of the Administration ting money.into the public fisc.
Needless
hale.
social security system
unquestionably fiscal weapons goes well beyond
into the in¬ the automatic reflexes just men¬
come effects of consumers', inves¬
tioned. Taking depression as our
tors' and governments' spending,
example, a $75 billion government
saving and taxing activities.
At has immense power to influence
the same time, the National Bureau
the level of spending in the econ¬
led
Today, "fiscal policy" means the
conscious use of taxation, govat levels required to pro- tremely difficult to fix responsi- ernment spending, and debt transthe necessary revenue.
bility. A concomitant ot this is acti0ns to contribute to economic
xates
Broadening of the
and liberal¬
work. Fortunately, events izing of unemployment insurance,
to come.
years
deficiencies,
its
inventories, and housing have been
a
basic factor in the violent
swings of our economy from de-
bility in itself begets stability2
w
the legislatei e a s
the
amy,
fiows jn the volume of invest-
ment jn plant and equipment,
use
tl°"sb'p
strengthened or weakened in the
Vate business and the private in- economy -— consumption, invest¬ tely smaller one as incomes fall
vestment process motivations and ment, income, and government and thus are unusually potent in
mechanisms that will make pri- fiscal operations—and tools have offsetting the ups and downs of
va^e
private capital been developed to measure both the private economy — would
formation, less of a de-stabilizing our total effort and its component weaken the automatic flexibility
influence on the economy? In the parts. The thinking of J. M. Key¬ of our fiscal system.
past} certainly, the great ebbs and nes and his followers, whatever
The power of our anti-cyclical
ofthL"
of ta'rLcrtasS^nd aCt pr°mp-'y £o sustain consumer
^ "Sf0 ?Lnteract th^lwihgs
,n ,turn Provides the
Qeei eases 10 counteract ine swing? basis for sustaining private capiJ?
business cycle. The rela- tal outlays. The p8r0'spect of sta_
of the econ-
and the state
tores
\n
™nth*, to call for fur her commen*- The la<:k °?A4l.egai a?d e??
£°mic
^"^^oTs-exam!
taxlhg committees to cross exam
ine th® witnesses who testily before
also weaken.s * e p™~
cess—^ *s extremely difficult for
the Committee members to separate th<; *heat lr0^
chaf£
m the literally tnousanas oi pages
of testimony they hear. One is
^ruck also with the slowness of
the ^legislative process and the
its
•>f
Hlustratea
wel1
to°
the
*»rv
will present its views—this
lime with a more realistic appraiof the economic and budgetAgain,
hasten
receni
tax ^tmn wWch
some-
back to
National
the
put
des¬
economy
needed those dollars
idle men and machines
Economic
Although the greater iself-conChairman, combined with the sen- sciousness and sense of responi01?ty basis for committee ap- sibility that can be seen emergpointments, may exercise a dis- jng jn the business and financial
torting and retarding influence on community today may lead to
the
the Senate Finance
then
in summer
<tometime
years,,
perately
instance,
would
strengthen
since
that
time have radically for
Research,
these automatic stabilizing tend¬
various
business
organizations, changed the concept and increased
the potency of fiscal policy. First, encies. Reducing Taxes—particu¬
and individual researcners nave
larly progressive taxes which take
concerned
themselves with this great advances have been made in
understanding
the
relationships a proportionately bigger "bite" as
question: can we build into pri- among the large aggregates in our incomes rise and a proportionof
Bureau
Prospects and Policy
aod
recent
In
the
when
time
ments.1
*
3 Statement
at
the
University
ot
Conterence, May 1952,
published in "Savings in the Modem
Economy,"
University
of
Minnesota
Minnesota Savings
Press,
1953.
have
to
improve
markedly
ancD
of fiscal reaction to eco¬
nomic ups and downs will have*
to
be accelerated
before rather
the speed
severe
recessions
inflations
can
and
disturbing
be ruled out. Fortu¬
nately, the basic determination touse
the available tax and fiscal
instruments to combat depression*
is
widely shared in key policy po-
Volume 178
1-
Number 5262... The Commercial and Financial Chronicle
sitions. in the
Treasury and
the
tl
e
circumstances—bigger and -better
operating rate of steel companies having 93% of the steel-making
deficits
-
IWhite House. And^ who knows, if
capacity for the entire industry will he at
of
EDITOR'S
pression is just around the
taxes may provide just what
doctor /orders
in
is
Foregoing
second of two lectures by Pro¬
;
corner, Dan Reed's crusade to cut
economic
NOTE:
fessor Heller
on
Federal budget
and tax prospects. The first lec¬
the
ture
such
appeared
in
issue
our
of
September 24.
39'-'
(1353)
capacity
2,132,900
tons of
(revised),
beginning
week
ingots and
2,149,000 tons
or
the rate
ago
the
for
for castings
steel
week ago.
a
1953,
5,
Oct.
of 94.6%
equivalent to
average
an
as
against
For the like week
89.2% and production 2,011,000 tons.
was
A
a
year ago
106.6% of capacity.
was
current year are based upon
The percentage figures for the
the capacity as of Jan. 1, 1953, the rate
this year being higher than last year.
Continued front page 4
Car
Loadings Fall
Loadings of
decreased 4,175
revenue
cars,
or
a
be at
freight for the week ended Sept. 26, 1953,
0.5% below the preceding week, accord¬
estimated tm
were
Total
loan
CCC
entries
reported
Sept.
18
about 246,000
at
the
for
through
season
were
bales,
indicating entries of 115,900 bales
for the week, as against 50,400 the
week before.
Reported sales i*x
ten
markets
spot
increased
to
297,800 bales last week, from
257,500 the preceding week, and
compared with 331,100 m the cor¬
responding week last
With¬
year.
ing to the Association of American Railroads.
production pattern in recent months, is tending to take it easier
assembly runs, states "Ward's Automotive Reports."
:
' " ;
.
Last
week the
industry made 112,200 cars, up 2.7% over the
109,178 in the preceding week and 7% more than the 104,745 in
;the like 1952 week; according to this
agency.
The main
ibasis.
■
Electric Output Advances in Latest Week
The
nearly every company
"Ward's"—lower production for
mew
cars
in
iup
is the
reasons
high.
are
.';
_
' 1
...
.
light and
the
story
one
reason
dealers'
is
the
same,
states
another.
Behind
or
stocks
of
unsold
used
and
This
and the
cars;
fact that
'
-
.'stocks knocked down before
models
new
are
out this fall and
electric
of
power
above
current
that
000 kwh., or
000 kwh.
;
this trade
authority.
"Ward's"
-
.get in "line with retail demand."
jnade
1,586,160
In
mean
at
car
a
So the production
the
it
year
figure for Sept.
this point is being
of
pace
slow-up is
135,000
Total
on.
due.
are
This could
in
an
last
week
average
at
run
United States truck production
July,
states
This fourth quarter,
business,
may
reports
long billed
not hold
"Steel,"
the
as one
much
as
for
gloom
slowdown in the
a
some
as
people
ex¬
weekly magazine of metalworking.
the
been
interrupted by an expansion project at Indiana Harbor,
That company's operations will be at a reduced
pace for a
month while a new and larger
blooming mill is installed. In
Ind.
most
other
Avere
pushed
districts, output edged
little
a
harder
or
up
as
■
Of
bit
a
new
present facilities
as
capacity
into
came
now idle, a substantial
part are those that had
produce steel "at any cost" during the period of
frenzied demand, notes this trade
journal.
Now, no one wants to pay more than the regular market
price for steel.
Because of this, and the reduced demand for
to
-
alloy
steel,
Republic
last
week
was
operating
only five of its
,17 electric furnaces at Canton.
On the other hand, Republic's
facilities that produce carbon steel for sale at the
regular market
price, and they constitute the bulk of Republic's facilities, are
operating at capacity or above. Regular price mills, like Re¬
public, located nearest big consumption areas are well booked up
for the fourth quarter on most
products and expect no downward
•change for the first quarter of 1954, this trade journal adds.
One of the reasons the fourth quarter may not be as slack
an the steel business as some
people had expected, asserts "Steel,"
is that part of the business adjustment that had been
anticipated
.
_
for
that
period
made
was
in
the
somewhat lowered
a
their
lower
inventories
so
as
demand
to
lor
reduce
them.
This
tended
to
further
demand
for steel.
Once the inventory reduction is com¬
pleted, and if business in general does not ease further, there
might be a spurt in steel demand as ordering for current con¬
sumption is resumed, it further states.
Although some of the heavy backlogs of orders for machinery
and other goods have melted
away, the overall demand is still
^ood. Employment is at record levels, and consumers' expendi.
"tures
high in volume.
Appraising the current situation, F.
H. Lovejoy, Chairman of the Executive Committee of the Ameri¬
can Steel Warehouse
Association, and
are
President, Wheelock, Lovesays: "Inventories are not ab¬
construction continues at an encouraging rate,
for household* products is strong, and even
joy & Co. Inc., Cambridge, Mass.,
normally large,
new
demand
•consumer
:after
adjustments,
automotive, farm implement and similar re¬
quirements for steel will remain at high levels."
The adjustment that began in the third quarter is,
however,
not completed:
Another company lowered premium prices on pig
Iron to meet competition, and a few blast furnaces are idle be¬
cause
are
lack
of
still
demand
of
shying
away
for
from
pig iron. Steel mills and foundries
scrap, with a result that what few
purchases have been made have knocked prices even lower than
they were. Steel companies are stepping up sales efforts on some
products.
charges
when
Where necessary to get business they will absorb freight
steel deliveries. Notice of that was given last week
on
U.
necessary
the
S.
Steel
and
business
Corp. announced it would absorb freight "when
in order to participate in
commercially desirable
of
an
individual
customer."
That
statement
sets
a
pattern for the whole steel industry, "Steel" concludes.
The
1952 week.
American
Iron
and
Steel
Institute
announced
to
rose
189
total
trade
the week
152 in the preceding week, Dun & Bradstreet,
Failures
involving liabilities of $5,000 or more increased mod¬
erately to 158 from 136 a week ago and exceeded by a wide mar¬
gin the 108 of this size last year. A marked rise among small
casualties, those with liabilities under $5,000, lifted their toll to
31 from 16 in the previous week and 21 last year.
Eighteen of
businesses
the
as
many
as
failing had liabilities in excess of $100,000, twice
week ago.
a
Wholesale Food Price Index Holds to Downward Trend
Continuing
the downward movement of the previous week,
price index, compiled by Dun & Bradstreet,
food
wholesale
the
Inc., fell five cents last week to stand at $6.66 on Sept. 29. This
represented a rise of 3.6% over the corresponding 1952 week when
it stood at $6.43, but it was 1.9% under the comparable 1951 index
of
$6.79.
Commodity Price Index Confined to
Narrow
Range
on
ous,
and with 290.68 on the corresponding date a year ago.
Grain
markets
were
Wheat
finished
with
irregular
showing moderate advances for the
strong,
all
grains
except corn
week.
following early weakness, influenced
starting its surplus food ex¬
effort to reduce the large stocks held in the
United States.
Strength in rye and oats reflected the feeling that
further imports from Canada might eventually be curtailed.
Ac¬
tivity on the Chicago Board of Trade declined last week. Daily
average sales of all grain and soybean futures totaled about 49,000,000 bushels, against 56,700,000 the week previous, and 43,200,by reports that the government was
port program
000
a
in
an
year ago.
Except for scattered sales to Norway, export flour
trade, remained very slow.
The first official forecast of the new
main Accra cocoa crop, which was below trade expectations, helped
to sustain values most of the week, but the market developed a
weaker tone at the close as the result of profit-taking and liquida¬
tion.
Warehouse stocks of cocoa continued to recede and totaled
ing the week.
125,996 bags, against 133,726 a week earlier.
Coffee prices continued
areas
as
There
was
threatened dock
a
brisk
demand
for
coffee
strike deadline of Sept.
30.
to
arrive
before the
buyers sought to accumulate stocks in anticipation of a
heavy de¬
three months. Lard held in a narrow range
slightly lower. Trading in live hogs was more active;
discouraged
Fall
the
out
tho
of
in
weather
merchandise.
With the
motions
and
in
interest
?
eased
most merchants
the
the
help of aggressive
credit
pro-
terms..,
able to
were
sales, figures
of
sur¬
a
year
ago.
The
total
trade
dollar
the
in
volume
week
of
re?-
esti¬
was
mated by Dun
& Bradstreet, Ine.r
to be from 2 to 6% higher than »-
year
to
Regional
ago.
varied
from
the
estimates:
comparable
1952
by the following percent¬
New England and East -f-3?
+7; Midwest +1 to +5; South
Southwest 0 to -f4; North¬
and
west and Pacific Coast
Nationwide
about
with
even
demand
of
wertr
level
In those
tions with seasonal
ahead
sales
the
the previous week.
sumer
+4 to -fJL
apparel
sec¬
weather, cor*generally
was
a
year
ago.
The
pronounced
rises
over
the
parable 1952 level
most
com¬
in the de¬
were
mand for campus clothing,
ren's toggery
and men's
child¬
casual
clothing. The buying of shoes con¬
tinued
the
above
There
was
leveL
ago
year
hesitancy in the
some
buying of men's suits which had
been
rising in
recent weeks.
Trading activity in most whole¬
sale markets
quickened slightly
the past week as buyers broadened,
and.
Fall
merchandise.
totbH
The
volume of wholesale trade-
continued
to
the
be
level
a
higher
earlier.
year
demand
consumer
buyers
many
their
slightly
of
Recent rises in
of
for
re-orders
Winter
dollar
to
forego
some
~-
hesitancy about increas¬
ing stocks
on
hand.
Department
store
country-wide basis,
the
Federal
sales
as
Reserve
on
-
ft
taken from
in-
Board's
dex, for the week ended Sept. 26*
1953, increased 3% from the level,
the preceding week.
In the
previous week, Sept. 19, 1953, an.
increase of 6% was reported from,
of
that of the
the
For
similar week of
four
26, 1953,
weeks
change
no
1952.
ended
was
Sept.
reported..
For the
period Jan. 1 to Sept. 26,
1953, department store sales regis¬
an
increase
of
3%
above
1952.
Retail
York
from the
a
year
for
level
the
of
periedt
responsible
the
were
New
slightly
like
Chiefly
drop
in
declined
week
ago.
the
ably
volume
trade
last
unseason¬
temperatures
warm
which
prevailed during the week.
the
to
index
Board's
serve
in
Federal Re¬
department:
for
New York City
the
weekly period ended Sept. 26,
1953, advanced 5% from the like
periosf of last year.
In the pre¬
Sept. 19, 1953, an
(revised) was re¬
mand during the next
ceding
and finished
increase of 11%
prices held firm most of the week but trended lower at
the close
ported
week
that
from
of
the
similar
Cattle receipts were smaller after the larg¬
est run in seven years in the preceding week.
Spot cotton prices were steady to slightly firmer last week
week
reported.
For
at close to loan values.
the period Jan. 1 to Sept. 26,
1953,
from
as
supplies increased.
Helping to sustain the market were the strong holding move¬
that
that
warm
west
store sales
Rice was strong as
retatk
of
ended
with
par
According
firm, reflecting strength in producing
the result of the early July frosts in Brazil.
volume
period
cities in the South and MitfA
tered
Bookings of Spring wheat bakery flours reached a moderate
volume on mill protection against price advances announced dur¬
a
Unusually
led
daily wholesale commodity price index, compiled by Dun
& Bradstreet, Inc., held in a narrow range last week.
The index
closed at 277.19 on Sept. 29, comparing with 277.35 a week previ¬
The
increases in others,,
the
preceding week.
than
Wholesale
sections*
some
Wednesday of last week remained
their
the price per pound or
31 foods in general use and its chief function is to show the
general trend of food prices at the wholesale level.
The index represents the sum total of
in
dollar
in
ages:
in
considerably heavier than in 1952 and 1951 when 129 and 133
occurred respectively, but they remained 32% below the prewar
total of 279 in the comparable week in 1939.
third
quarter.
In adjusting
goods in many lines and an
increasing supply of steel, metalworking companies ceased buying
more
steel than they need
and, in addition, started to live off
"to
compared
week,
At the highest level in eight weeks, casualties were
Inc., reports.
use.
facilities
used
industrial failures
and
ended Oct. 1 from
The rate would have been higher states
"Steel," had the pro¬
duction of one of the
principal producers—Inland Steel Co.;—
fceen
last
cars
Business Failures Turn Upward
week that ushered in the
quarter, steel production
higher than it has been since the first week in September,
the rate for the week ended Oct. 3
being 95%, up 0.5 point over
the preceding week.
<
7,010
production amounted to 1,092 units last week, against 1,167
and 2,139 in the year earlier period.
Commercial
was
mot
made
the week before
Operations Scheduled for Modest Decline in
Latest Week
In
offset by
the
A year ago truck output was
with 7,457 in the previous week and 6,424 in the like
\
Preceding Week
tail
companies
18,
declines
levels
Steel
pected,
last week totaled 22,655 com¬
29,926 units.
Truck
totaling
Sept.
As
pass
cars.
pared with 23,151 the previous week.
"Ward's."
•■steel
104,745
Canadian
output may
car
for several weeks, but that's still far
or more
.Automotive output for the latest week rose 2.7% above the
volume, and 7% more than the like week of
1952, "Ward's Automotive Reports" stated.
The industry turned out 112,200 cars last week, compared
with 109,178 in the previous week. A year ago the weekly pro¬
was
19KS
Trade Volume Unchanged From*
some
preceding week's
stocks
a
about 100,000 a week
off
new
high and notes
time shortly before new models
dilemma for many dealers.
xeached
this
the
from
591,000
bales*
leaving a nW#
stock of 1,716,000 bales still under
about
"
Like Period of 1952
duction
This agency expects its dealer
will hit a new postwar
30
the third quarter
cars.
i
-
Output Rises Above Previous Week and
early
the industry is doing this to
says
increase of 60,911,000 kwh.
an
the like week in 1951.
U. S. Auto
cotton
were
-
figure represents
preceding week, and an increase of 749,044,9.8% over the comparable 1952 week and 1,258,531,-
over
volume,
through
at 8,414,452,000 kwh., according to the Edison
next year.
The industry now expects to make
1,414,000 cars in the final
quarter instead of 1,534,000 as it had earlier planned,
according to
energy
the
of
of
loan.
distributed by the electric
industry for the week ended Saturday, Oct. 3,
1953, was estimated
Electric Institute.
means very sizable dealer funds are tied
makers and the dealers would like to see the
car
amount
The
In
"these
loan stock continued in moderate
for last week's
reason
slight increase was the return
"to a full week of operations at Plymouth
following model change¬
-over.
In the latter part of last week Plymouth was on a two-shift
.
drawals
Loadings totaled 819,709 cars, a decrease of 42,356 cars, or
43% below the corresponding 1952 week, and a decrease of 44,866
cars, or 5.2% below the corresponding 1951 week.
on
v
far.
the
Trifle Below Previous Week
which
record rate for the seasbm
a
thus
95.3%
month
the weekly production was placed at 2,215,000 tons and the oper¬
ating rate
entities
ment
in
the
South, trade price-fixing,
and
relatively large loan
of
1952, while for the four
weeks ended Sept. 26,
crease
no
of
3%
change
was
was
that of the 1952
1953,
registered
period.
.
.
a
de-v
...
,
The Commercial and Financial Chronicle
34
Thursday, October 8, 1953
...
(1354)
Continued,
celebrating its 150th
The
anniversary.
*f
*
if
First
National
undivided
of
banking offices in 60 communities,
all in New York State.
jrom page 16
not less than
Lansdale
profits and
founded in 1864 and has acted
was
reserves
if
if
*
i
<
News Abeut Banks and Bankers
TRUST COMPANY,
BANKERS
NEW YORK
Deposits
Cash
and
from
U.
667,871,138
Total
Loans
bills
and
discounted
42,115,077
if
sjs
BANK
CHEMICAL
959,079,948
40,460,394
977,003,580
__
profits--
holdings
TRUST
YORK
Deposits
Cash
banks
Govt,
S.
557,727,274
se¬
holdgs.
442,415,869
discts.
726,577,110
333,983,883
751,411,282
profits—
19,031,005
17,380,634
curity
Loans
&
Undiv.
Total
resources
Deposits
and
Cash
from
due
144,526,732 132,380,864
banks
Govt, security
U. S.
holdings
&
Loans
Undivided
TRUST
NEW
COMPANY,
Total
resources-
Deposits
Cash
and
banks
from
U.
V
S.
due
Govt,
curity
Loans
370,771,936
325,579,030
591,532,591
discts.
592,324,493
BANK
OF
17,568,994
*
*
*
NEW
due
and
352,347,596
395,656,024
271,156,679
discts.
289,857,694
575,688,623
557,850,666
profits-
16,574,663
U.
i
S.
Govt,
curlty
Loans
&
Undiv.
se-
holdgs.
EXCHANGE
BANK
NEW
NEW
6,317,236
Cash
41,490,465
Cash
>
banks
\
&
—
discounts
Undivided
profits.-,
NEW
NEW
9,299,679
52,271,048
—
Cash
and undi¬
profits
!<{
!
if
CO.,
and
310,929.466
12,826,033
banks
11,981,517
COMPANY,
June 30,'53
$
711,132,143 765,318,911
622,711,537 677,141,580
175,151,335 212,208,813
holdings
Loans
banks
&
Undivided
169,922,633
183,761,398
discounts 337.647.179
340.974.102
14,052,089
8,143,524
—
7,818,582
11,788,510
10,816,398
9,076,932
—
*
if
Trust Officer.
as
associated
offer
to
the Pots¬
acquire
Y.,
N.
if
with
through
an
of
ex¬
000,000
Trust
two
basis
shares
of
of
tional
Marine
stock for each share
action
is
subject
Federal
and
to
New
approval
York
by
State
banking authorities.
Mr.
the
Diefendorf
is
stock
intention
merge
stated
that,
it
is
if
the
Corporation
to
the Potsdam Bank into the
Northern
pany
the
of
New
York
Trust
of Watertown, N.
Com¬
an
The
Bank
office
of that institution.
statement
and
June 30,
Trust
the
Potsdam
Company
$6,400,000,
funds of $600,000
more
of
as
of
1953 showed deposits of
approximately
of
than
Marine
presently
interest
banks
in
the
12
which
Corporation
controlling
Marine Mid¬
operate
123
employees
and
Merchants
will,-be
as
used
finance
to
retained
by The Philadelphia Na¬
tional on a special basis. Present
awarded
directors, of First National will
serve as an Advisory Committee.
the Board of Regents at
be
;f
BANK,
NATIONAL
.
PA.;', "
'''
Sept. 3Q,'53 June 30/53
"/,
-
Total
••
..
^
v.
due
252,185,051 287,554,230
177,593,327 156,816,905
3l2.966.454
profits— * 15,992,308
15,234,477
if
if
of
Va.,
Richmond,
Virginia,
of
oversub¬
was
scribed by
5,798 shares, according
to Thomas C. Boushall, President
of the
bank.
of
/
lowing
shares
of
of
number
to
shares
the
creases
the
and
120,000, in¬
the
1917,; the: fol¬
Rossetti
in
he
15,
of
a
was
President
Sept.
Chief Executive
of
1953, he
the
Board
Officer.
O.
Lawler, Executive Vice-Presi¬
President
chants
the
since
National
Angeles
is
Southern
Bank's
its
Fifth
founding
82
The Farmers and Mer¬
years ago.
$2,400,000'< and
became
1931
Fourth
On
dent, 'became
capital from $2,-
par
Elected!
in
became* Chairman
T.
20,000
increases
stock
National'
Angeles.
and
Bank.
come;
to
Merchants
Los
year
named
the
1911
Cashier of The^
as
Vice-President
;
additional
the
and
of
Director;
Bank
The
Angeles
Farmers
if
20,000-share common stock
The
Loyola. - ■?
Fargo and Company Bank in San
Francisco.v As an Assistant Cash¬
Bank
_■
Undivided
issue
.
discounts 321,260,683
&
financial,
Mr. Rossetti entered banking in*.
1893 as an office boy for the Wells
ier he left there in
...
be
-
of^K^racter,
and'
to Los
"
from *
banks
Loans
merit,
«.
will
need. CMr. Rossetti is Chairman of
760,254,894 780,-613,217
.
,
and
t
the basis
on
Loyola
and
853,643,119 858,502,475
reserves
Deposits
'
students
academic
if
PHILADELPHIA,
000,000
to
the bank to make the stock offer¬
ing
at
aproved by stockholders
meeting in Richmond on Aug.
was
a
31
and
issue
the
stockholders
Bank
-
the
Los:
of
oldest
in..
bank
California.
<;
.
$1,-
Corn
of the close of
as
Sept.
latter
the
11,
1953.
*
board
of
the
adelphia,
tional
Oct.
Pa.
of
Bank
6
voted
under
ter
The
of
Bank.
The
The
and
First
Lansdale,
to
the
merge
Pa.,
the
and
name
Na¬
on
two
char¬
Philadelphia National
is subject to
the approval of the shareholders
of
both
merger
banks
troller of the
A
A.
of
and
the
Comp¬
Currency.
joint statement by
Frederic
delphia National Bank, and Ifwin
G. Lukens, President of The First
National
Bank
of
Lansdale,
said
erich
SAVINGS
FOR
OF
IN
CLEVELAND,
THE
CITY
$
Cash
$
due
anci
Mr. Nichols
19,899,559
17,981,706
77,665,908
69,812,534
157,789,530
137,264,501
*
*
wire
the
rities,
Merchants
of
common
stock of $2,-
the
and
Indiana
.
Trust
Company, Indianapolis, Ind., with
of
stock
common
came
effective
solidation
charter
First
Philadelphia
National
three
now
National
shares
held.
of
Phila¬
delphia National shareholders will
as
retain their present certificates.
The Philadelphia National Bank
was
organized in 1803 and is
now
direct
$1^000,000 be¬
Inc.,
New
P.
Eastern
York
to The Financial
Juarez
Fund
M^fchants
Incfcaibiapolis
is
now
title
"Merchants
i
;
(Special
to
to The Financial
Staff
Chronicle.)
Na¬
the
%
and
FRESNO, Calif.—James D. Dophas been added to the staff of
son
Walston & Co., 1157 Fulton
of
He
was
stock
into
stock
322,750/ shares
of
of
mj-
$10
With Inv. Service
bank will
$3,227,500
t.
surplus
....
datq of consoli¬
consolidate^
capital
Street.:
previously with Davies &
Co.
At the effective
common
Mutual
with
Associates, 444 Montgomery
Walston Adds
Na¬
under
each,
Secu¬
City.
Chronicle)
Street.
The con¬
Ther
Bank
changed
Emerich
Ames,
offices to
SAN FRANCISCO, Cal.—Mdritz
effected under the
of
of
dation the
private
offthe close of
19$f,
30,
was
tional
have
the
announced
a
Joins Mutual Fund Assoc.
Indianapolis,
Bank
from
Chicago
(Special
025,000,
also
of
if
of the
Consolidation
Ind., with
of the trading
from
Government
National
manager
installation
266,922,578 237,040,082
banks
S.
was
290,735,432 257,972,274
resources—
tional Bank & Truit Company
each
Em¬
department of Paul H. Davis & Co.'i
Indianapolis."
of
Richard A.
&
necke
OHIO
Bank of Lansdale will receive two
for
—
joined Ames,
Co., Inc., 105 South La
Salle Street, members of the Mid¬
Sept. 30/53 Dec. 31,'52
that under the merger plan share¬
holders
of
The
First
National
shares
has
the
in
business Sept.
Potts, President of The Phila¬
Wernecke
■
SOCIETY
The
Philadelphia National Bank, Phil¬
the
by
$600;000
With Ames, Emerich
CHICAGO, 111.
was
securities
directors
of
stock
from
referred to in
west Stock Exchange, in the trad¬
Sept. 3 is¬
"Chronicle," page 841.4 ing department, Donald E. Nichols,
*
*
■*
•■■■■'■■ President, announced today, Wer¬
offering
columns
of
stock
R. A. Wernecke Now
re¬
payable by the bank on Oct. 1 to
stockholders of record of Sept. 18.
sue
capital
new
dividend,
year-end dividend but
participate in a quarterly
dividend of 30 cents * per share
The
of
to $700,000.
will not
U.
*
to
City, Calif., increased
common
sale
the
plus
Exchange
of
stock will
new
ceive the fourth quarter
Philadelphia,
of
offered
its
May also pointed out that
holders of the
these
Germantown
was
at Redwood
Sept. 1.,
on
Loans and discounts
The
stock
$7,000,000.
owns
stock
capital
and total assets
Midland
land
depart¬
stock
title
*
Y. which
would operate the bank thereafter
as
and
banks
acquired,
and
business
Total
stock
The trans¬
The
anniversary the 450 di¬
temporarily
will
but
Deposits
Midland
of the
retire
60th
Scholarship Fund at Loyola Uni¬
versity of Los Angeles. This fund*
Rosenberry,
will
Lansdale
of
officers
charter
offer
the
H.
W.
Mr.
and
Vice-President, of The First Na¬
Bank, Philadelphia, Pa., under the
business
of the Potsdam Bank.
dent
merged with and into
was
Girard
the
bank, effective
is
mutt carry on I
of
common
President of Marine Midland Cor¬
The
formerly
*
Bank
change of stock was announced on
Oct. 1 by Charles H. Diefendorf,
poration.
was
trust
and Trust Company,
Potsdam,
CROSS
the
if
1,021,321
1,010,211
dam Bank and Trust Company
RED
He
with
National
Pa.,
{Your
National Bank of Los Angeles es¬
tablished
the Victor H.
Rossetti
if
Philadelphia National
Bank and joined Second National
in July of this year.
undi¬
profits
An
office is
new
Moorhouse,
Assistant
Cashier, who has been with First
National since 1919, and at the
Old Bergen Office since 1931.
F.
10,171,862
discounts
and
vided
of the
charge
ment of The
from
holdings
13,362,015
profits—
29,061,943
29,163,251
on
.
In
Henry
delphia, Pa. announces1 the ap¬
pointment of Girard K, Gearhart
—
due
&
national
operate branches.
COMPANY, NEW YORK
June 30/53
Los
Mr. Potts added
that Mr. Irwin G. Lukens, Presi¬
Mr.
$31,548,094 $31,447,978
of
adds
if
if
'■
if
$500,000 to the surplus account,
banks
Effective Sept. 21, The First Na¬
Mr. May, Vice-President, declared.
A charter amendment to permit tional Bank of San Mateo County
Second National Bank of Phila¬
___
___
Surplus
permitted
Bank
celebrated
Sept. 8 his 60th anniversary in the
banking
profession.
To
honor
delphia National.
the
3,252,234
if
U. S. Govt, security
Loans
in
banks
3,256,141
—
and
branch
first
country under the McFadden Bill,
8,559,195
Sept. 30, *53
Cash
Avenue
opened in 1927, as one
was
the
the
replaces
Monticello
National
Calif.,
Farmers
undi¬
resources
Deposits
office
new
89
27,591,797
if
Angeles,
of
Sale
at
which
to
Merchants
will
'
8,692,585
profits
CLINTON TRUST
Total
Harrison
and
28,999,070
_
and
Surplus
1864, today opens its
Office, a com¬
Bergen
10,704,900
discounts
&
of
*
Assistant Vice-President of Phila¬
was
9,808,629
security
holdings
Loans
41,553,233
42,045,101
-
—
#
TRUST
The
,
$48,304,668 $47,682,910
from
due
U. S. Govt,
187,945,497 163,502,432
—
—
Bank
which
*
officers
Avenue.
office
if
Victor H. Rossetti, Chairman of
the Board
of
The Farmers and
rectors,
holdings
J.,
N.
Boulevard
Hudson
stock, effective Sept. 21.
this
new
pletely modern structure featur¬
ing Jersey City's first drive-in
bank window,
at the corner' of
NEW YORK
'"Sep. 30/53 June 30,'53
and due from
banks
0
if
revenues
in
Old
new
of
4,250,885
4,257,210 '
TRUST
SCHRODER
239,540,595
U. S. Govt, security
<
14,250,955
counted
City,
com¬
delphia National, and that Mr. W.
H. Weingartner will be elected an
if
National
First
The
its
capital stock from $1,000,000
to $1,500,000 by the sale of new
upon
merger,
in
Bank
mon
completion of the
employees of The Phila¬
become,
*
National
Austin, Texas, increased
of
Lansdale
if
.
Capital
announcement, it
employees of The
joint
National
First
U. S. Govt, security
Jersey
security
and bills dis¬
Loans
Cash
YORK, N. Y.
Deposits
50,354,568
from
due
Govt,
Deposits
$
resources
10,930,771
13,252,196
and
69,932,689
holdings
June 30,'53
307,391,829
of
sale
by
if
if
which
Sep. 30,'53
Total
June 30,'53
69,436,926
banks
Total
*
YORK
YORK
Sep. 30/53
*
THE
CORP.,
$99,482,006 $98,263,247
„—
the
stated that
Cash
stock.
founded
if
NEW
resources
vided
*
s!i
!|I
SCHRODER BANKING
HENRY
$
208.797,035
holdings
1,344,906
profits--'
YORK
U. S. Govt, security
Loans
53,959,718
1,377,387
discounts
&
Surplus
and due from
In
was
Na¬
Gardens
capital stock from $500,-
t<T $600,000
000
of
Bank
if
Springfield
common
i
if
The
(including reserves) of $2,813,000;
resources
aggregating $16,-
if
if
Spring¬
field Gardens, N. Y., increased its
47,468,960
60,855,949
holdings
National
First
to
stock.
new
and
U. S. Govt, security
691,102,760 706,215,503
t
30,015,113
32,332,121
.
776,442,037 787,602,124
resources
from
INCORPORATED,
$
Total
$
130,996,048 127,780,299
—
-
and due
banks
The
was
Sept. 22 from"
$200,000 by the sale
amounted
$853,643,000.
date.
tional Bank of New York,
141,226,378 137,473,959
resources
Deposits
5,862,793
*
that
on
The
June 30,'53
$
Total
Cash
Sep. 30,*53
Deposits
1953, will be entitled to
in such stock dividend in
20,
bank
of
National
Minn.,
effective
$100,000
undivided
resources
PHILADELPHIA
BANK &
YORK
NATIONAL
COMPANY OF NEW
Sep. 30/53
U. S.
CO.
business
of
close
*
if
if
STERLING
TRUST
vided
&
the
at
of
Shareholders
$1,260,000.
*
216,653,700 235,966,664
*
MORGAN
extra stock dividend
an
14,285,284
Deposits
i
holdings
339,710,120 313,353,017
Loans & discounts 191,367,359 188,867,090
P.
of
suance
52,034,486
$
TJ. S. Govt, security
J.
from
14,305,284
Total
.Undivided profits—
of capital stock
increase
$4,340,000 to $5,600,000 by the is¬
49,596,774
&
June 30,'53
and due from
—
The shareholders also approved
discounts
Loans
741,704,070 729,046,841
banks
stock from
proportion
to
their
respective
holdings of capital stock of the
J.
$
Cash
13,
share
796,766,585 782,580,876
Deposits
Oct.
on
the capital
$3,900,000 to $3,950,000.
increase
will
47,283,757
—
CO.,
TRUST
YORK
resources
business
of
close
1953,
49,247,099
Loans
Sep. 30,'53
Total
Jan.
on
52,432,408
—
Undivided
CORN
meeting
47,935,556
banks
holdings
15,947,300
'... from banks
sharehold¬
1953, and which will be pay¬
able to shareholders of record at
the
Total
Minneapolis,
the
of
Northwestern
.
of
increased
815,000.
13,
Nov.
$
1,311,673,687 1,303,330,778
1,179,550,886 1,179,351,277
resources-
at the annual
Second
Lansdale, as of the same date,
had deposits of $13,951,000; capi¬
tal, surplus and undivided profits
$50,000 quarterly stock divi¬
record
U. S. Govt, security
June 30,'53
$
Cash
of that date.
as
and due from
THE
Deposits
be
dend authorized by the
of
$
$
YORK
Sept. 30,'53
Total
bank
184,459,950 182,144,784
MANHATTAN COMPANY,
THE
Oct. 6,
on
accorded rights to
purchase these additional shares
in proportion to their respective
holdings of capital stock of the
will
217,943,959 216,565,359
resources
Deposits
Cash
of record
Capital and surplus
250,206,095
18,328,407
profits—
June 30,'53
Sep. 30/53
se-
holdgs.
&
Undiv.
371,230,602
__
CO.,
&
NEW YORK
Total
par
a
1953,
an
HARRIMAN
BROTHERS
$
1,397,195,224 1,307,391,726
1,242,853,739 1,156,451,856
ing
additional shares hav¬
value of $10 a share.
Shareholders
if
if
YORK
BROWN
$
to
39,000
•
100,993,708 114,594,022
discounts 198,525,641 196,010,201
profits
6,255,237
5,483,443
June 30,'53
Sept. 30,'53
of
ers
418,274,035 410,256,921
—
capital, surplus and
profits.
458,932,009 457,718,903
—
if
IRVING
$
$
of
$3,950,000 to $4,340,000 by the sale
capital
common
Bank
National
increase of
stock of the bank from
the capital
The
delphia National for many years.
As of Sept. 30, The Philadelphia
reported
deposits
of
$760,255,000 and had $71,992,000
announced
the bank approved an
correspondent of The Phila¬
a
as
of
Bank
Oct. 6 that the shareholders of
A
June 30/53
Sep. 30,*53
$
if
CO.
TRUST
Roth, President of
National
Franklin
Franklin Square, N. Y.
on
YORK
NEW
OF
1,872,038,475 1 835,951,490
1,687,491,336 1 656,555,479
%•
MIDLAND
MARINE
11,812,847
12,304,643
if
$
512,132,460
—
281,763,488 288,950,910
———
profits—
30,'53
June
due
and
from
U.
counted
COMPANY,
$
resources-
bills dis-
Loans and
Undivided
THE
61,590,915
60,675,256
—
if
Sept. 30,'53
Total
122,517,413 120,883,782
—
Govt, security
■
&
NEW
-
banks
U. S.
,
Undiv.
—:
and due from
Cash
373,850,379
se¬
holdgs.
508,963,371 517,860,718
453,646,737 462,089,160
resources
Deposits
560,911,275
343,555,517
banks
s
$
2,099,821,579 1,999,329,808
1,875,502,811 1,775,610,081
due
Govt,
S.
curity
June 30,'53
Sep. 30,'53
$
$
resources-
TRUST
June 30,'53
Sept. 30,'53
Total
NATIONAL BANK AND
COMPANY OF NEW YORK
PUBLIC
THE
Mr. Arthur T.
The
of
$4,551,846.53.
par
$5,000,000
of
value
(Special
to The Financial
Chronicle)
DENVER, Colo.—Daniel S. Horan,
Jr., is with Investment Serv¬
and ice Corporation, 444 Sherman St.
.
Volume 178
Number 5262
The Commercial and Financial Chronicle
...
(1355)
others
forging out
were
new companion piece for the tex¬
It still holds tiles about which so much
an
appreciation of about a hopeful was written without
third on the year which, con¬
stirring up the slightest mar¬
Continued from page 8
lows for the year.
The Market..
And Yon
.
35
free from the inner contradiction
of
psychological
our
strictionism
necessity.
entailed
love of re¬
in
belief
or
—
its
Recognition of Russia
this duality in us, fos¬
tered the New Dealism restric¬
sidering everything, is a su¬ ket ripples.
new
funds would be an ex¬ toll,
Si!
:•!
Si!
tionism, and has brought us con¬
similarly flimsy flights of perior performance, particu¬
fused to our present plight. We
pensive chore for the plane fancy have been the few
All this might give the im¬ talk now in
larly for a petroleum issue.
slogans about some¬
makers.
sjs
things to spark this week's
pression that the market is thing called Free Enterprise. We
*
:!:
#
market; the "merger" of Nash
lisp in whispers against restric¬
Rails,
abandoned
pretty something of a puzzle at the tionism. We fail to see that the
Hudson
chief
However, this logic ignored and
among, well
moment.
Such a conclusion
by the majority element
Executive must be reduced to size,
some rather definite
contracts them despite the official de-~ after
and not allowed to determine our
being pushed for so long would be precisely right.
with the
government calling nial from at least the Hudson
best interests!
*!'
as the
bright hope for 1953,
for certain
"progress" pay¬ President that there was any- * continue to
[The views expressed in this
End Secret Agreements
lag somewhat
ments as the work
article do not necessarily at any
progresses. thing to it. Such rumors are
In broad outlines, it means the
badly. While not so severely
time coincide with those of the
old stuff in the auto field;
Abrogating these contracts
depressed, they are beginning Chronicle. They are presented as end of secret agreements and pro¬
would
tocols. It means also the end of
probably be far more ever since General Motors, to
emerge as something of a those of the author only.]
the
notion
of
taxation without
costly to the government— Chrysler and Ford became ac¬
limitation.
No
bureaucracy,
or
with the plane makers' inter¬
knowledged as the big three
sovereign, is fitted to conserve our
est
of the industry, all sorts of Continued from page 16
charges added to the cost
assets
better
than
we
are
our¬
of the defense material—than wishful
selves. Taxation may be utilized
thinking
has
en¬
.
""
v
emergency
devices
of
the visioned a "big fourth" for
plane companies to tide them¬ the lineup. Some of the more
selves over a
temporary short¬ ambitious rumors in the last
age of working funds.
couple of decades have been
*
*
*
inclusive
so
was
low
new
depressed into
ground vwith
parative
ease
on
com¬
of
rumors
Motors
into
the
circle
produced starvation and misery—
all for the support of a monster.
these
If
examples
any¬
mean
thing at all—the arch example of
and Restrictionist liberal Britain — it is
and, of Socialist
Russia,
that
en¬
carried
restrictionism
ultimate
produces
its
to
unchecked,
an
profit trouble that got official couraging. ^
uncontrollable
tyrant
or
tyranny.
denials but did little to
This
operating
through
the
*
.r
help
%
lis
the
at
con-
substandard
have
obscured
ally, the real
things
factors.
the
*
„
*
*
Utilities
A
feature
able
to
watchers'
have
avoid
the
tape
microscopes,
swayed
and
with the
more
bond market than with
vague
hopes
and
fears.
Light has been
the
a
Duquesne
stalwart of
new-high list.
*
*
*
Bearing the Oils
Oils, like many of the other
>ections, have been swayed by
of
sort
some
devious
logic.
Fairly authoritative estimates
that
next
would be
than
year's crude runs
substantially higher
those
of this
lished something of
ward bit of
fur-
year
a
back¬
logic for the pessi¬
Real
Silk
year,
the
marketwise
—
(which
some
;hat
to
turn
out
much
so
in
of
way
wars
their
would be that much in-
Instruments)
put
discount
some
;oning
cribed
of the current
might
as
well
still- to
be
:
*
*
,
*
*
-
*
«
.
easoning
have
taken
various
in
are
a
studies
that
that fhe
to
falling
recovery
optimistic
have charted for it. Neverthe¬
oil.
issues
real
one
ithat
of the few
has
success
held "up
while
the
Gold
of the
him.
He
many
be
an
au¬
credit also.
and
war
saw
over
to
lesson
of
was
the
on
last
lost
not
what could
of the household
on
be done
the
access
to the market.
Householder's Agent
I
controls, and all forms
wage
sitical
Lincoln
—what
to
If necessary, we
elements.
consent to buying off of spe¬
may
with
do
attack
It
individuals
to
comes
means
terminate
we
finally the notion of executive in-;
terventionism
not
in
affairs.
our
Is
choice
clearly either to
towards hunger and famine
our
move
heads.
There
before the
the hot¬
by
From
are
many
areas
of
our
is that of
chiefest
area
ing
possibility
the
It
should
guarantee
to
all
access
to
the market and crush out any
denial
to
that
access.
On
the
other hand, it should also
those
limitations
havior
which
the
on
exercise
anarchic be¬
majority of its
the
shadow
of
the light of day?
nor
Continued
The
movement
of
all
under
conditions,
from
page
2
but
householders
the
all
—
and
disavow the
representation of any
special clique or group of inter¬
ests
or
—
entails
elimination
the
and
cumbersome
of
the
dangerous
Seriously
also
it
Congress shall turn
on any "inherent
bureaucracy.
that
means
Definitely this
voters.
its back forever
the Presi¬
independent bureau
acting in his name. The only in¬
herent powefr is that of all the
powers"
belonging to
dent,
any
or
in
as
childish
wartimg.
that
our-
households,
nourished in the tradition of free¬
dom
of the
Security
I Like Best
even
round. Is it not ridiculous as well
alike complete freedom of
neither
fears
night
maintain¬
wartime conditions. The last year
households
of
dissen¬
—
who
in the interests of
households, but its
solely
agent
most
In foreign affairs, we must turn
theJ standpoint
internal
and
where government may act as our
nomics, then, the function of gov¬
ernment should be that of being
agent for and of all its household¬
.
warfare
intended
had
slavery
Sumter
on
entrenched
are
eco¬
3
mat¬
tend
on
households
more
Not
Ludwig
of affairs in¬
Bavaria
-without restrictions
#
call it overvalued and
their with
alike
Dr.
a man
He happens
year
realized
Western,vas
less, PWO is
-
While these bits of tenuous
case
markets.
professor,
German
ers.
Pacific
anarchic
a
affairs
tractive.
the issue
discounting
behind
as
thority
de- short of being the
be
lereafter.
j
rea-
of price
growth
alone.
into and out of the market at all
The
..
the future
dropped, all forms
and
times
for it
jeopardy. The stock ter of fact, has been some¬
is, by tradition, sup¬ thing of a puzzle, weathering
to
and
In the
All
years.
nents in
narket
a
which
no
-
posed
in
verbalized guise.
Erhard is also
ac¬
pay-
or
are
and timately connected with economic
Pacific Western Oil. There is
•'
cordingly, and dividend
been
All
cial interests who
product,
ensified, profits lowered
the
fancier
socialism,
societies,
merely
fully, and various bolstering
;heir selling burden would be from within the companies to
;ubstantially greater,: price make their issues more .at¬
.he
In
sion, or towards individual
growth, the emergence of a new
art and culture
a
New Man,
well
recently disappeared
Texas
tentials
reason-
prompted
-
household.
the
exists than Western Germany.
Bullard,
ible
which
ng,
of
Perhaps no better or more re¬
cent
proof
of these statements
of being
.airly persistent selling, was
if the companies were
The immediate
tion
interests hide.
Rubber
into
people.
a
freebooters in the economy, para¬
vested,
selfish, ruthless and dehumanized
sick
Theaters,
strip and despoil
A golden moment faces us. Can
admitting the
claims of special groups to special we afford to overlook the way to
protection, e. g., high wages or a happy balance between the col¬
high prices. Freedom of access be¬ liding forces of restrictionism and
anarchism in the market? If we
longs to all.
Our policy, therefore, should be accept this third possibility of bal¬
one of helping to increase or at
ance, we return to the path of in¬
least to preserve the assets posi¬ dividual value and development.
colors, or
world-con¬
nothing but
its
Communism, it has a philoso¬
phy and in the case of Socialism,
a maudlin
sentimentalism; in the
case of "gliberalism," it has noth¬
ing but what is vaguely called
of
Intercontinental
history
right
in
put
of
that has
stock
supply fac¬
way,
or
In of the war in Germany makes
doubled its value and held the ruins, most of her cities prostrate, this particularly significant. There
divided into zones of military oc¬ may
be areas (like the postal
gain.
cupation, she emerges today with service) where free markets are
*
rising production, high employ¬ unnecessary, or which we do not
steel
production
greater want to be free. In these situa¬
Others that have done well ment,
than England's, and a national in¬ tions, we may empower govern¬
tfll year, right through the
ment to serve the households as
come produced second perhaps to
decline that started on the our own—or at least comparable limited by them. The policy be¬
second trading day of 1953, to ours on a different level. All hind the happy compromise of
this has been done in the space these two forces, the continuation
include
Telautograph, Out¬ of three years. Why? You won¬ of the third or neutralizing force,
board
Marine,
New
York der. Germany is fortunate in hav¬ should be that Congress assume
Shipbuilding, G. R. Kinney, ing a man who understands clear¬ more and more the character of
ly the nature of restrictionism as representing not all the voters,
National
only
any
and
more
precise pattern to account
all, the group presenting
various aspects of mergers,
real and fancied, earnings po¬
mists.
hooligan¬
or
humanitarianism.
rather
group
money
other
In
shows how dangerous it has beeri,
how it enables the Executive to
high
wage
policy.
These
achieve nothing except to protect
restrictionism
❖
a
balancing
policies, with
pro¬
monetary
of
trolled
Hosiery has the
distinction—in
with
marches
World-commun¬
world
strength has
been the utilities which have
been
#
of
group
to develop
comes
disguises
❖
it
ism
the year.
Strong
of
mover
vided
tinuous warfare.
stock, has kept this the
'outstanding price
bureaucracy
ism, terrorism by government, and
ultimately, slave camps and con¬
progress
scant million
a
tyranny
widespread violence
gener¬
of the
shares, year has been made by a di¬
he
market
is
undoubtedly verse group of issues. Real
thin
and
the
exaggerated Silk, aided earlier by rumor
wings are rather easy to ne- talk and lately by a company
otiate when so much atten¬ call for tenders at a
price
tion is
being paid to trivial double the final 1952 tag on
evtel of
function
against
dynamic flux of the modern mar¬
a vested interest in the continua¬
ket, this means that all wartime
tion of hunger, rationing, misery, restrictions should have long ago
Progress
While these nebulous ideas
In short, with volume
inuing
its
Selective
along.
recovery
only when it serves the interests
of its households — always. It has
no
Restrictionism in Fancy Garb
maintain
to
tors.
with
proved
households
on
production in lagging times,
—And Its Politics
has been the debut of Kaiser
results still to be
instrument for putting pres¬
an
sure
that
they have
Similar wisps were able to bundled all the independents
cutback some of the other into one^ lump to oppose the
issues with
Chicago Pneumat¬ big three. But still the: most
ic Tube as a
good. an example. radical'change in this field
Vhe issue
as
Om Economic Dilemma
market, should stand
a gang of dic¬
dends
initiated at the rate of
were
15 cents
quarterly in cash and 5%
annually in stock. At the present
time Class A and Class B
shares
spective
common
outstanding in the
are
of
amounts
re¬
and
214,193
95,745.
The
the
$3.30
past four
should
1953
earnings
company
averaged
years.
around
$3.25
as
benefits
will
be
run
relatively small
derived
from
have
during
Earnings for
share
per
expanded
produc¬
tion until late this year. The
ination
and
of
should
1954
to
be
the
plant capa¬
earnings for
bring
$4 to
It
$4.50 range.
likely that cash dividends will
increased
and
the policy
of
dividends
stock
next
.
elim¬
taxes,
of additional
use
city
is
profits
excess
year
American
North
is
pany
cost
now
Good
from
eight
Com¬
Cement
good, modern, low
a
strategically
producer,
ated.
continued for the
two.
or
cement
to
situ¬
sell
stocks
times
twelve
a
It is my opinion
that when the realization of what
years
earnings.
here in the past six
has happened
years
becomes more general, true
value
flected
of
the
in
shares
the
pany's stock
price.
will
be
The
re¬
com¬
is traded in "Overmarket
and
is cur¬
hat in hand before
the-Counter"
tatorial bandits and treat them as
rently priced at about $21 per
share, yielding approximately 8%.
equals?
Or
Since they
their
own
be afraid of them?
represent nothing but
interest
and
stand
opposed to the interest of all the
households of their own people,
With A. G. Edwards
(Special
to The
Financial Chronicle)
require.
Clearly,
it
ST. LOUIS, Mo.—Lawrence B.
against any handful why then do we support them
associated
of special claimants, internal or tacitly
by
treating
with them Woelfel has become
external, friendly or unfriendly, or refusing to defend ourselves with A. G. Edwards & Sons, 409
who wish to. restrict or deny the against wanton attacks by them?
North Eighth Street, members of
wishes of the majority of its own
We may regain our freedom of
the New York and Midwest Stock
householders. Government policy action to determine our own pol¬
can
become intelligible and fair
icies and actions when we become Exchanges.
must
be
,
set
36
The Commercial and Financial Chronicle.
(1356)
Continued from
first
this nation of ours—to say
be overhauled in
vised,
to
regard the future
holding what might be
as
what would half century ago been regarded,
as a normal
prospect of enduring peace. On the contrary,
the international scene is deeply tinted with uncertainty
and uneasiness. Apart from the possibility of armed con¬
flicts on a major scale, a prospect which can not be dis¬
missed offhand certainly, there is the obvious fact of
regarded,
so we
count
We See It
As
entitled
when
we
settled world exists.
Continued
Only Tariffs
But apart from this rather obvious fact, which is not
likely to be overlooked, there are
a
number of other
aspects of the current scene which all too often are
not
ignored
generally recognized as part of this same broad
All of us are prone to regard this trade-not-aid
discussion too literally as related only to tariffs and other
restrictions upon imports, the theory being that if we per¬
mitted goods more freely to enter our markets, foreign
countries; would obtain the dollars they need—or think
or
even
problem.
they need—in exchange for goods which we can use in¬
stead of
gratis
as
is the
qualifications and limita¬
upon this familiar argu¬
part, certainly are not much disposed
tions which need to be
ment,
for
we,
our
today.
case
While doubtless there
are
imposed
to argue
with its basic tenets. We have always been of the
opinion that freer trade among the nations of the world
would
be
Yet we may as well rec¬
ognize the fact—for fact it is—that essentially this same
argument could with equal force be applied to things
otheivfhan the exchange of merchandise. If we were to
remc/ve, or greatly reduce, the subsidies our shipping now
receives, for example, foreign peoples could earn more
dollars by performing transportation services for us with
a
good thing for all.
results broadly identical with those which would obtain
as a
result of drastically reduced tariff rates.
Again,
own
were we
to permit agriculture to stand
on
its
feet without the aid provided
through taxation, for¬
eigners would need fewer dollars to buy certain essential
raw materials and foodstuffs
they require—and, inciden¬
tally, since the burden of these subsidies falls upon the
remainder
of
the
economic
community, foreigners pre¬
sumably would also require fewer dollars to buy the man¬
ufactured goods they take from us. Let
anyone who is in¬
clined to regard this as a strained
argument study the situa¬
tion with greater care. Let him also take note of the fact
that at the very moment that
pressure is being built up to
permit the entry of foreign manufactures in larger quan¬
tities, the farm interests of the nation are stridently insisting upon a continuation of the "support" program which '
keeps prices definitely higher than they otherwise would
be—prices of goods foreign peoples regularly and in
perforce buy from us. •
many
instances
'
.
•
.
•
;
_
_
•;
T
produce the results desired without doing more incidental
...harm than good, do tend to
keep competition alive and
hence prices down. At the same
time, however, we not
only permit, but actually encourage, monopolies in the
of agriculture and labor.
As respects labor, we
Bot only encourage monopoly, but have long been wor¬
shippers of a strange doctrine which insists that the higher
realms
the wages
paid the greater the prosperity. In more recent
the politicians have been active in find¬
years, moreover,
ing and developing means by which these notions
given practical effect.
;
•:
;•
The net
than exist
result
for many
must find
(We
what
tread
be
higher labor costs in this country
anywhere else on earth. But for the ingenuity,
kinds of goods.
more
are,
As it
businessman,
foreign markets
is, the foreign purchaser
dollars than otherwise would be needed.
of coursq, well
aware
that conditions being
they are throughout the world, we shall have to
circumspectly, in altering Such conditions as these.
We understand the political
pressures'that constitute the
drive behind many of these
things.
of the fact that in some'instances
industries upon the foundation of
We
are
we
have built up vast
fully cognizant
this.tjjpe of special aid.
the
of
How does
about?
all
affect you
and me?
they doing
are
to
Hoover's time?
When interest rates go up,
individuals
others becomes more costly.
and
business,
by
rowing
becomes
It
bor-
difficult
more
for
a
farmer,
been
build
to
power
a
Gong.
the
small-
-
the
House
interest
Wright
Board.
Reserve
Oh
has
rates
Of
Patman
June
Board
the
After
2£ announced
tioii in member bank
reduc-
a
reserve
-
re-
-■
quirements as a step to relax >
the. financial brakes: by making "
credit more ? plentiful, • that step -
caustically ' attacked by*■;
was
Democrat
Texas
-as
"fiat
•
*
money" inflation. The Board, he
' said, was "cruel and merciless." The CIO joined the chorus witlFv
radio broadcasts and: printed materiai, illustrated with - numerous •
cartoons of high-hatted, stripedpants bankers wrecking the na¬
tion's economy. And the Demo¬
the
in
1951, it was not until the
a
house, for instance. An auto or present Administration had been
a TV being bought on the installin office three months and had
ment plan costs more.
:
started out to replace some of the
Similarly,
the
and
thorn in the side of the Federal
a
to finance the building of early
person
,
Texas. Mr. Fatman has long been
under control
of
one
no
The farmers
.
In
towafd
the
commenced
.
GI
tilde
too'
application
.
chief critic bf the Treasury's atti- * *
and-living costs could be brought brakes
the
businessman.
it was felt the process of inflation
and
soaring commodity
prices
the
good
any
[for] the
.
done
charges against the Govern¬
ment and similar appeals to the
financial brakes when desirable
While
has
.
lar
to finance the war. After the war
financial
.
.
.
Every few days someone gets
up in the Congress to make simi-
our
next; a Washington-made depression
like that that
we
had in
(Minn.)—It
.
large financial in¬
been hit.
have
^art-terni Government debt held
public utility more, Jjy
"J*? W1^ long-term cratic National Committee has
bonds offered to non-bank inveskept
its researchers and ghost
since suclf things
are
done on
borrowed money. A new factory tors th^. interest rates generally writers busy on the money topic.
plant costs
by the
a
«
token costs more to
increase;
a
turnpike or schoolhouse
more expensive, since the
new
becomes
has
nas
cost
cost
sharply. The decline m
borrowed
oorrowea.
be
oe
to
to
Administration's
the
What
tics mean then when
the
about
Meanwhile 7
took their biggest jump upwards
market quotations for bonds
same
erect when interest rates
horrors
they
cri-
out
cry
deflation
of
is
Democratic
-
Sena¬
tors and 13
Congressmen launched
what they called
a
"crusade against interest rate
which had been sold to the public boosts." They introduced a reso¬
by the Treagury after VJ-Day, lution which would require the
t00]^ those issues temporarily be- Federal
Reserve to support US
low 90c
the dollar. A $100 bond
on
both
in
houses
nL
^.^5*3a
securities
Government
at
par,
couid be bought in
the open mar- thereby
pegging
their
interest
interest costs ^et for iess than $90. Washington rates.
Heading the House signers
rise more and more projects for
wags quipped that the Govern- was former Speaker Sam Rayconstruction and business activity ment bonds had "broken 90" beburn.
generally will be postponed or jore president Eisenhower could
Such is the barrage which the
set aside. Since construction and
do so in his golf game,
Administration has had to face.
other production means work for
'
It gives us a small idea of what
workers, the postponement or giv^Immediately friends of the would happen if business slipped
ing
up
of
expansion
projects
worker, the veteran into a recession or depression be¬
means less take-home pay for the
and the small businessman rose fore the next election.
people as a whole, less employ- ln the Congress to sound dire
"
> /
just
this:
that
as
j.
T
*
i
•
*
*
j
^
ment,
that
And
unemployment.
more
business
means
recession
or
End
of
enough,
Higher interest rates
the
to
end
which
this
finance
an
easy
end
to
mean
War
policy
adopted to
It
II.
inflation
the
an
^
the
of
ment
borrowing and budget defIt
in
means
the
total
other
words,
and credit
supply of the USA is being con¬
tracted, or at least rising less
rapidly.
need
money
remember that the
to
o
rtnt
is not
o
a
fivorl
we use
omnnnt
for money
l\/TAr»Dir
with a
coming
election
real
it
next icies
to
floors
of
ex-banker,
oil
painting of
one-time Secretary
the
of
looking
legislators on the
Congress—the
Demo-
...
Ran¬
Treasury, Senator and co-
is the
the
SEN. KERR (Okla.)
W.
Federal
Reserve
System—occupies a large
in the Treasury Building,
O
oo_
fixed amount. Money ac¬
and
an
Glass
the
founder
"Raided by Independent Morse
means
under
Carter
of
Opposition Voices in Congress
to
Mr.
on
economist
seated
less than effective on the whole.
Listen
called
we
dolph Burgess, the Deputy to the
Secretary of the Treasury. The
pr^contr^o
held by narrow
easy
Reaction
the Treasury's reactions to
such criticisms of its money pol¬
Congres¬
up
^
Treasury's
For
baters- :Tbel?epubllc„an fecor,d of
sewering the charges has been
both the folding
and coins we carry about
tually
what
were
simplify- its
charges, especially since it pos¬
sesses skilled and experienced de-
bank
icits.
cries
tall
found
means
credit in order to finance Govern-
that
these
Congress
money
country
World
sional
Policy
Easy Money
The
H^^hcan Admin-
!njf; ^_or
istration
depression.
*
warnings of trouble in the mak-
spiral of
the
White
Board
"Are
you
depression
as
This
House.
where for many years
room
the governors
serve
ropm
over¬
,
of the Federal Re¬
used
bent
in
members
producing a
United States,
the
of
meet.
to
on
the
Congress
are
money
inflation set in motion by higher saying?", we challenged.
with
us
and
checkbook money, interest rates and started by the
"Certainly not." Mr„ Burgess re¬
Most of our business today is done Treasury,
and which has now plied earnestly. "What this Ad¬
with bank checks, which are just spread
like an epidemic, eyen ministration firmly favors is a
as
freely accepted in payment of backing uo the flow of manufac- policy of economic stabilization.
debts as the Federal Reserve notes tured products . . . History shows We want an economy fair to all
or
the
greenbacks
printed
in that as interest rates have been elements of the population. The
Washington. The supply of check- increased, prices and employment question should be stated: 'iDb.^you
be increased or generally have decreased,
the commerical
Increases
in
rates
charged
banks
as
extend loans to farmers by the Government.
their customers, but the overall
SEN. LEHMAN (N. Y.) —.For
book
money
may
want
continuation
a
the
of
In¬
policies
of the .past
twenty years with a dollar of ever
shrinking buying power and .with
a
cost of living always rising, or
volume of such bank credit is debusinessmen, public utilities,
do you want a stable economy?'
termined by the reserves which
home builders,
municipalities
This Government wants a 'stable
Federal and state laws require the
and states the situation is serious,
banks to maintain. Those reserves
economy."
"Well, if you are trying to stop
may be increased or decreased by
CONG. PATMAN (Texas) The
the
Federal
Resreve
Board
in damage has been done and they inflation, there must be some in¬
decreased
.by
they
.
.
can
is
the energy, and the
genius of the American
we should
by this means be blocked out of
[else]
page
there was much discussion of continuance of the easy^money policy
dollar, our incomes, our standard and finally, in 1951, following exof living?
We've been suffering tensive
Congressional hearings,
from
the inflation
spiral these freedom of action was restored to
several years. Are we going to be the Federal Reserve Board, By
socked With another depression allowing the Board to apply the
i
reasoning apply in certdin other direc¬
tions. We have enacted rigorous anti-trust laws which,
although they are not always enforced in such a way as to
-
it
What's
supply of what
Similar lines of
^
from first
They Doing to
Out Money in Washington?
We
Other Factors
bankers' policy
a
benefit
What Are
it
Not
very
is
has
It is a shameful
...
HUMPHREY
SEN.
the
stitutions
What
;
economic relations with
or
greatly intensified nationalism which constantly injects
itself into the situation to outweigh economic factors
which, after all, operate fully only when a freer and more
;
our
...
Administration
promulgated
thing.
rest of the world.
people
of the little
unconscionable increase
.
Eisenhower
day.
review
.
.
nothing of the world at large—
We should, however, be well ad¬
think, if we took all the factors into full ac¬
a
Thursday, October 8, 1953
.
at the expense
Rome, it is often said, was not built in a day; neither can
page
.
.
/rn
Washington
within
for
limits
member
permitted
banks
by
the
In other words,
the Federal ReBoard, created in 1913 as the
central bank for banks throughout
the country,
has
it
within
its
power
to
rise
decline
or
cause
interest rates
to
simply by regulatr
ing; member banks' reserves, their
'freedom to lend to customers.
This power of the Federal Reserve
are doing further damage
Board
was
put
in World War II, so
on
as
ice early
to make it
easy^or the Treasury,.to .borrow,
.at lowcost alj: the money needed
.
...
Pr°^ranj] would cause rents
anc* cos^ °* llvm£
Congress.
serve
:
:
*
flationary
•
• •
J1® greatest
[The
still
flation
Senators
at
work.
But
some
saying that the Re¬
to increase; publicans in Congress have denied
amount of there is any further danger of in¬
.
.
.
mlury an<I devastation to a prosPei*ous economy; ... cause more
ar\ more money to go into inter-
charges, which winds up with
e big lenders ... [Similar steps]
Preceded the depression of 1921
v • 1931, and the dip ... in 1937.
flation
wage
be
.
for
and rent
is,
that
continue
so-called
the
that
in
and
to
fused
are
reason
credit,
How is
policy
to
controls.
hard
money
harder-to-get
reconciled. with
re¬
price,
money,
that
-
attitude
Congress," we inquired.
"First of all, we do not stand
SEN. MORSE (Ore.) — [These
measures] do injury to the,farmer, for 'hard money' but for honest
^ are not anti-inflationary .,. . money," the Treasury deputy an¬
at a^:.;:. Economic piqrder , . . swered. "Controls are not effec¬
The lenders
are profiteering tive; thpy do a lot of damage and
-
-
.
.
.
Volume 178
Number 5262
The Commercial and Financial Chronicle
...
(1357)
require
terrific
a
administration.
Republicans
method
of
"The
do
is; why
not
that
safeguards
the
of
There's
sort
we
"As for GI
of
be
enough. We have
been
But
have
been
and
is
just
lar
idea of the critics several months
warranted.
that
running into
immediate depression already
an
we
were
has been proved to be false.
"Our idea is to make our pros-
penty last
long
as
possible and
as
to avoid violent ups and downs
We
have
been charged
with
making
dear
money
by
bonds.
make
by
The
the
such
meets
the
tne
Rotn
of
level
and
mqae
it
tiv
rptll.n01s\
merely
Board,
Board
tne
yon-
...
3v
IT
nnlirv
wa<s
no
Trpn
rpmiirpmentlT
Sirv
tn
finanrinpr
Rattier
hp
™
f
mZ
(.
in
Sal Rplrw orpTt
hv
\%
Th^p«p
ill-founded.
are
"Some
The
small fraction of
a
the cost of
0f
business
on
doing business,
people
complain
that
be
a
They
great burden
on taxpayers.
apply the increase in the rate
single bond issue
to
the
on
entire
nation, public and priActually,
an
increase
in
interest
rates
affects
only
new
other
debts
jsn't
to
remains
unchanged."
higher interest of benefit
the
«gome
banker?"
-
I
thing is
bankers'
a
onlv
a
iSe
hi^
not
^vaiinhlA
modpst
for
nroney
Witimat?
the face of the
is
npfldc
busine^ ?ndus-
ury official.
1 d
like
to
emphasize,"
Burgess added,
Mr.
"that the Treasman-
agement.
Money
policy
the
ke^' bu^ a^
been
demands
difficulty
"It .is
avoid
.
enou^
large
essential
or
the
have
to take care of
with
firmer
money
The members
might have become
serious over-expansion °f credit,
inventories and
instalment buy-
of the
Reserve Board, it
Federal
be noted
may
a^Truman.
Not
one
of P r e s i d e n t
this
and summer has been a
good thing it has tended to keep
from what
..Despite
decUn€
..
the
temporary
the bond
of
ne,s
jn
market
bond
prjces
weak-
and
the
following
Treasury's offering of
a
3Vd%
a
etc., when the country was
already operating at full capacing,
lty-"
bond> it is
tQd
are
lower
thgn
"What about the GI who has to
house because of
interest?
And what
for
more
the
higher
a
about the effect of dear money on
.farming?" Mr. Burgess
was
asked.
"The farmer,"
,
twQ tQ thfee
t;
were
Administration took
recommended
.ts
when
thig
office.
that
zation
System
purposes
cost should
paying no more for interest on
borrowings than he has all along,
on
clared
that,
hailed
to
We
want
proportion of
in-
savings institutions,
companies, pension
the like, and to in-
dividuals.
This
Secretary
the
our
sell
to
bonds
the
and
vised
com-
is
the
non-in-
has
and
ad-
others
to
country's monetary his-
When
do
we
so
find
we
much that reads like what
Board's
they were the caterpillars.
Specie continuing scarce, business
continued to depend on a
confusing
array
of
state
bank
notes of varying worth and often
When
demand
came
establishing another national
bank the Democratic platform of
1856 opposed subjecting the nation
"a
to
concentrated
money
power."
During the Civil War the
system
of
created,
with
based
on
national
banks
note-issue
was
powers
Government bonds. Also
national printing-press banknotes
—
"greenbacks" —• came on the
of them still being
in circulation today.
Thereafter for many years "the
scene,
many
question" played
a
major
role in American politics. Both
party platforms of 1868 recognized
it. A Greenback Party came into
being.
The big depression of 1873
their
the
Federal
credit
prices
highs
see
all-time
Reserve
contraction
for
"injuring agriculture." Secretary
Treasury Houston, publicly
defended the Board, stated that
of the
now
-
from
blamed
and
whereas
Britain
as
money
-
Humphrey
Senate
to an
way
recede
de-
during the
they had been
the pillars of the nation,
with
Farmers hated to
gress.
Defending
Senator
one
.
the
leaders
plaints
with
the
of
Federal
money policy
national issue;
Mr.
Heflin
and
for
corn-
speculators
in'inflation
vested interest
a
The
in
farmer
cotton
were
Reserve's
sound
became a leading
and in the Senate
of
Alabama
became
remained a thorn'
Board's side. The record
years
the
is filled with his fulminations his
attacks On the "destructive Be¬
publican "deflation policy" and on
"the avaricious bankers of Walt
Street."
Nor
over,
1920
Both
he alone.
was
sides
was
More-
election
an
courted
the
year
farmer
vote, promises and charges being
flung about recklessly
A maior
Congressional inquiry 'ended tw
giving
the- Federal
Reserve
a
reasonably clean bill of health,
The depression of 1930
brought
the
question
money
back
into
we are
aroused
antagonism between
debtors and creditors, the workers
politics
and the
financed in many cases bv sneculators identified in official decu-
bankers.
Ever
since
the
outbreak of war in 1861 specie
redemption of the currency had
been suspended.
simply
a
The
ments,
bang.
Congress;
skilled propaganda
a
by
on
passed
was
laws
There
unit.
paper
egged
with
dollar
was
dwarf those
were often individuals
and classes who either had a
direct "axe to grind" or who
thought that they would benefit,
The full story of the speculation
behind the demands of the early
1930's for increases in the prices
of silver and gold has not been
told and probably will never be;
but the List of Silver Hoarders,
compiled by the Treasury in 1934
and published by the Senate,
briefly put the spotlight
the
Federal
in the west in the middle '70's
made money a white hot political
issue. A coinage revision passed
by Congress in 1873 had closed
the mints to silver. Now demand
for bimetallism was whipped up
by
aided
The
by
the
money"
"sound
policies of the Government
blamed for the bad business
ditions.
Soft-money
Government to
were
con-
wanted
the
pay
off its
bonds in greenbacks—which may
be likened to present demands
that the Federal Reserve issue
leading
The "Money Issue" in Politics
miners,
farmers.
on specu-
Nations of a few of the
inflationists of that day.
the
men
enough notes to support Government bonds at par.
*
Then came the Silver Purchase
silver
purchase
dimensions as to
such
of
the
of
last
century;
cant
the
'should
.
prove
increase
in
.
.
even
to be
if-the
than
of
the
dollar
by
more
40%.
The
inflationists of the 1930's.
led by the Committee for the Na-
tion,
the
Father
Detroit
"Radio
Priest,"
Coughlin, and others, raJ-
lied farmers, veterans and workers
in
their drive against a "hard"
dollar and "Wall Street bankers."
Coughlin inveighed to his Sundav
afternoon
000,000
radio
audience
sound currency
of
against
persons
10,"this
of bondholders
while they wax rich on .the
corpses
of veterans." On "in-
.
.
...
.
...
ternational bankers
ing system
...
the
...
bank.-
our
Federal Re-
during this period middle west .had been devalued. EvenrGovfarmers, who had acquired lands ernor Marriner S. Eccles of the
under heavy mortgages, demanded Federal Reserve Board enceur-
ital.
currency
Act of 1878, a step short of the
bimetallism the silverites wanted,
Amid the general fall of prices
expansion
and
bitterly
During the last decades of the attacked the "sound money" of
19th century bimetallism and ^ bme, the
financial contracsilver purchases .were the key- tl0n>
as the policy of organized,
st0ne of the political debate over
piTle?s avance.
m0ney, and until the
issue was '
The inflationists, said Francis
finally settled with Bryan's defeat A- Walker, famous New England
in ig96 the silver mine owners economist, in the 1890 s,
like the
the
chief sparkplugs
kept the issue humming.
were
w
b
k
.
'
h
■ th
.
lQ
that
j d
liroro
Sue'TCan
^
the
when
jin,inrt
Davin?
it«?
out °t little, the desire to
debts in depreciated currency,
fallen human nature.
purpose
18th
nanpr
monev
Ultimately,
centulx
prohibited
further
sentment
here
in
.
.
the
re-
to
rfpvp^nH
Cleveland
A®t aS
now a synonym tor worthlessness. The strugpaper-
money inflation to taxation, with
Then came the establishment of our present government
and monetary standard; also a
Bank of the United States, which
Passe(f out °f existence in 1811.
^bat followed
United
with
a
a
the-
"reflation"
effort
Patman
while
regularly
manufacturing institu-
-
"should not pay interest
ernment
its
credit," i.e., on its
Thus, what Congress had
heard in the last century it was
hearing agam.
Under
pressure
on
own
bonds.
created
Subseqently * President Andrew Jackson's
headed by Con- successful fight against this bank
the
ease
The
S
new
authorities
money
1950'6money
in
in
the
,
question
Washington.
took
step?
1930's, as
nothm"
is
And
well
The^e
^ Jenntags
speech.
perity,
the
Then
new
money
McKinley
prosgold discoveries and
issue quiescent—for
a
while
in
in 1907, we had a money panic
New
York and business
re-
ceSsion.
evelt
President "Teddy"
Roos-
"our
panic
became
maker."
A
commission
chief
national
monetary
created
was
by
The Coming of the Federal
(
Reserve
.
.
After
World
uncontrolled
xr
i
n
t
r>
«
New York Stock Exchange
__ _
.
.
_
the
The New York Stock Exchang'
huS announced the following
ch^:
Exchange
^
the
h^ussen^Phili'n Snaldfne
^
wil,
E,-
H'0aUoct 15 the Exchinee wi•
co""derthetransferofthemS.
consider the transfer of the mern-bers^ip to Austin L. bmithers.
^ SmYthera
Denzer t0 Austin
I
CL
.
n
1L
t
^
onerley Colbert Upens
WASHINGTON, D. C.—Sheriey
Colbert has opened offices at 7^7
Twentieth Street, N. W., to engagj
jn a securities business,
Harrv B
_
vHarry.
Parker
!
."
/arPkerA par5nS ty
I, with its Kay, -Richards & Co. of Pittssoaring prices, burgh, passed away Sept. 25. -
War
and
xr
Weekly F^m ChangCS
p
follow,ed thfi campaign o£ 1896>
second Bank of
States was
20-year charter.
money
to
Qnml
£1^,.^!5rfh?
the ardent support of the debtor
classes.
a
of
tions"—and urged that the G6v-
Senate
sum-
hnt
a
^
tinentat currency,"
gling colonies preferred
inflation
attacked the banks—"these 15,006
are
Hnnrps'
nf
President
in
^r'fing on the Revolutionary
That ^ gaye ^
aged the
Congressman
.
WheTftd SoTto Suheli^
issues the
contributed
for
money
supply continued during
the middle 1930's, after the dollar
n£V6r h63r th6 e"d °f
unbacked
rircnlatin?
was
Agitation
pay
This was the era of p°Pulism in
troons
® XS
early
us.
Banks" he poured venom,
serve
The passion for making something out of nothing and much from inflationists in House and
^en gold and silver money were
n/r0000„u,IC,lf4.0
poor, we have always with
...
freed
signifiservice chages
the public debt.'
committee
be
valuation
In the 1920's, when the farmers
were aroused against the Federal
Reserve Board's "sound money"
policies of that era, Wilson's Secretary of the Treasury bluntly
blamed cotton speculators for the
agitation which rocked the cap-
B ^as. rePlace(t by state banks, Congress* Out of it came, on the
t0
restrict credit
and
raise
in- which issued banknotes recklessly. eve 0f World War I, the passage
terest tstes for
general stabili- Bue to the
currency disorders Gf the Federal Reserve Act.
Reserve
replied Mr. Burgess, "for the most part has been
:
fact tbat bond prices
a
"The Douglas committee in 1950
pay
banks.
larger
stead
than the demand
of long-con-
spring
somewhat less
a rate
excessesIrTthe use^of cr^U.
Somewhat
\1S
to
little
so
increase in rates.
essence
mercial
a
belongs
that
savings
policy
currency
FederalI Reserve Board
^he Board s policy latterly has
been to supply credit to the mar-
country's
inflationary
of selling securities to the
the sharp economic readjustment of 1920 and 1921. Again
the money issue sizzled in Con-
came
goes up and the market Price of East» against the bankers of Wall a free gold market, where gold authorized, in the Thomas
their holdinSs °f bonds declines Street and "dear money."
sold at premium prices. Demands Amendment, issuance of
greenwhen interest rates S° UP- So
Sometimes we find, too, that for a resumption of specie pay- backs and other
inflationary
they both gain and lose by hi8her those who were the most vocifer- ments long got nowhere.
measures;
approved
the suspeninterest rates," replied the Treas- our in demanding inflation of the
Discovery of rich silver mines sion of the gold standard and de-
finance
try, public utilities, roads and the
like the amazing thing is really
the
the
Government's
are merely: middle- the political
arena
we
always
men of money; they take in more find spokesmen for the farmer
interest 011 new loans, but the in- and the workingman railing
terest they pay on thrift deposits against the "money trusts" of the
In
for
his
today.
Underlying our
monetary debates of the past in
stln uf's part of this problem is that
°t the public debt and its
huge demand
rnoney to
by
the
of
financing
"Bankers
increase
The rates today
and
needs
the
past:
to favor the pocketbooks hearing
v
hppn
the
much
so
tory.
rpnnmmpriflnfinrw
In interest rates
of
of
read
A wide variety of lenders beneintn
JS Kv I s, fit when interest rates increase,
pL" hptwppn thp TrpLn and This includes those who lend
Fpdpral
Rpcprvp
RnarH
rParhoH
their savin8s to the Government
in March 1951
by Purchasing new Government
"It
wasn't
our
3V±°7
interest securitiesincludes holders of
rafp that ra.ispH
thp Unpral
rise
life insurance policies, depositors
in intprest rates
That rise had hein savings banks, participants in
^un
inn? before this Administra
Pensi°n funds, building and loan
tion took Office
Our hnnd
issue
associations, state funds and
was
a
relativelv minor factor in otbers- Almost every family is a
The rise of last snrin? what iender in one way or another.
caused the snrine rise in interest
"The recent action of the Fed"
rates was nrineinallv an avalanche
eral Reserve Board in reducing
of securitv offerings bv business
the reserve requirements of memand^ local government enthfes ber banks-and in making the reMore
neonle
borrowed
more
duction larger in New York and
monev during the first six months
ChicaS° than elsewhere in the
of this calendar vear than during country—has been described as a
anv comnarable neriod of the nastep favoring the eastern banks,
tion's history
'
Those two cities are central re"During the first six months of serve cities and as such carried
1953
corndratioh
and municipal
lai'Ser reserves than the rest of
bond offerings
totaled $7y2 bil- the country. It is not generally
lion -a new record high* borrow- realized
that New York banks
ings on mortgages were at a high make lar§e loans for agricultural
-level
and bank loans increased, purposes not merely in the nearby
especiallv for mortgage and in- farming areas, but in the south
stalment-credit purposes
Natu- against cotton and in the west
rally, under those conditions, in against wheat.
Therefore, when
a
free market the interest rate the Federal Reserve made credit
will go up as it did
'
easier in New York by reducing
"But the'net result of the events reserve requirements it was help-which have aroused so much talk in? the farmer as well as others.
rinlipiWc
evil
saying
are
regu-
House,
for
interjected,
Congressmen
that the whole
the
of
bankers.
banks
"We in the Treasury, moreover,
want to get away from another
borrowings. The interest cost of flationary course; the
servicing outstanding bonds and honest dollar."
of Wall Street bankers."
„
J
Mnnf^ta^
bringing
interest cost is
ioi-
are
Tr^irv^ T
ThJ PprWai
^pr
depression
their
and
the
state
worthless.
funds
tinnc
"
Trpasiirv
are
will
years
White
the
of
as today, the money issue
politics
brought
accusations
against
lating bank credit.
insurance
1aH^°n^tnfnrlbn'«^V^nn
f'
est rates
turn
can
at
cash
Reserve
stabilizing the economy by
"The fears that increased inter-
nator Raul,uougias scheme
„
•
done.
what
Federal
banks
into
vafe,
gressionai economic subcommittee
f
been
undo
that,
the
Federal Reserve is unable to
perform
its
statutory function
of
debt of the
rates
province
by
has
cannot
does
bonds
not
does
Keserve
190U
in
un-
When
a
lowing literally the recommendations
is
par.
the- last
Then,
in
,
violation of this
a
war
the
special
trie
We
"It would be
„
of
existing,
are
goal.
in the Treasury today.
we
to return to the practice of supporting all Government bonds at
some
The 1939 dollar is not
our
de
so
featured
occupancy
the
sound dol-
a
And
made
to; the
,
principle for the Federal Reserve
that
depression
a
of Texas
subscribed
conclusion.
same
get
already
federal
we.
3 /4%
interest
issue;
Talk about
creating
and
to
pay
buying
bond
a
to
Treasury
level
Money rates
ot
had
we
investment
avoided.
study
a
places,
some
well
Patman
gressman
have
may
S?f/irLg hiSher interest is going to
ii
Actually
what
was
real
in
as
to
building wait and overbuilding be
offering
a* i
oif"r^erw
^ 1SfU?
at
/4 /c
interest
continued
There
difficulties
it
erperiencing
a
business boom. We are seeing new
highs in the nation's income. The
ago
has
tremendous.
full
employment
housing, the volume
construction
an
of
can-
,
do favor is clear
economy
indication that he
no
not get money for any reasonable
demand.
0
inflation.
for
inflation
of
the
favor
controlling
need
against
machinery
That
37
38
The Commercial and Financial Chronicle
(1358)
Thursday, October 8, 195
...
r
mining factor, nobody would ever
invest in anything! The fact is that
every kind of business or com¬
mercial enterprise entails an ele¬
Salesma
Securities
of
ment
One
risk.
basic
ing
to
and
all
in
refurn
to
free
enterprise
such
have
we
been
criticizing
to make sure that the
regulation
been
just
If
and
restraint
has
conversation.
Monday, Sept. 14, 1953 a full
advertisement appeared in
Philadelphia "Evening Bulle¬
of "why
page
the
Funds."
Mutual
risk in Mutual Funds? Of course
The unusual feature of this ad was
that six columns of the page^were
all
paid for by five individual firms,
and four funds paid for their in¬
ence
There is risk attached to
there is.
dividual ads which
listed
were
Building,
-
the
did
mention
not
Funds
dress
the
and
only
ad¬
the coupon wqs. listed as
number.
The four funds
on
box
however gave their names and ad¬
in
dresses
which
ad
part
a
ads
of the whole
To all who might read,
the impression (.hat
page story.
this
individual
their
were
gave
funds were telling the
the leads however could
readily be followed by the firms
who received the replies.
the
four
story
—
that
reasons
man
men
and women the country over are
pinning their faith and their hopes
for
the
future
to
im¬
an
investments
Mutual Fund Shares
in
listed
are
From
as:
have
There
been
adjustments here and there,
there always will be in any free
buy
you
Mutual Funds you "Don't put your
as
line of business may not do so
well yet another may do better
during the same period. Spread¬
ing an investment as you do in
Mutual Funds
100
or
(often
as
many
as
different companies)
more
there is a good chance that the
impact of such cycles is lessened."
Professional Supervision then is
covered in the ad. "Men who make
investing their life work and who
have
we
chasing
power
expiration
Tax
that when
the cost of
of
one-tenth
the
and
10%
in-
^iey think best,
President's
The
new
a
tax
program
The im- when announced in May included
be set.
may
an-
living rises
percent,
one
that in the extension of the 52% corpothe cost of living rate rate and excise taxes at the
only six-tenths of present schedules
beyond their
portant thing however is
the
past
has
increased
year
This is in contrast with the
1%.
situation
cost
from
of
1946
when
1951
to
living went
than 30%, or
expiration
automatic
of
date
The Administra-
March 31, 1954.
than
The
relatively
less
than
1 %
evidence of
...
T,
of 6%
a
accentuating
increase
small
in
more
up
average
an
Rather
the past
of
is
year
stability.
,,
,
.
£_.^0n_]n^i iul
telligent
cooperation
all
the
of
markets, working with the
money
government, to help maintain stability of the purchasing power of
Americans
It will
teShiD
bound to
take
even
more
enlightened aSim
and
makesurethat
make su e
at
free enterorte
ree enterprise
makes the adjustments
lect
them snowball into
se¬
the companies Funds invest
but they also keep a constant
check on how these companies are
occur
individual
ing
stock
curities that look
decline
market
rometer.
though they'd
reached their peak in value, buy¬
ing others that appear to have
more
more
comes
as
opportunity for growth and
profits." "Such full time profes¬
to
The
leadership
America
tried to hire it
with Mutual Funds
you
yourself, but
you share its
cost
with
a
great
number
of
individual
making
the
individual
cost
(This is
good
sen¬
your
tence
to
sales
investors,
a
remember for
rela¬
presentation.)
Liquidity: "This means the abil¬
ity
to
turn
your
investments
quickly into cash. When you buy
your shares in
Fund
a
Mutual Fund the
agrees
to
buy
back when you wish to
them
sell.
The
price will be based
of
the
upon the value
investments as a
Fund's
whole at the time you wish to sell
your shares.
It's good to know
there is a market for your shares
which assures their
being quickly
convertible
arises."
Ease
Funds
need
into
if
the need
of
are
lot
a
Purchase:
easy to
of
or to
buy.
"Mutual
You don't
to
money
start
in
program
continue it.
an
Mutual
You
can
buy Mutual Fund shares in
lump
sum
amounts—or if you
periodic
purchase
prefer, in
plans,
with
the
in
in
and
adjustments
go
demand
nothing
the
proper
business
the
with
about
on
heart
a
which
and
too,
can
you
States
™oney
v<r.
responsibility m see
mg that free enterprise now given
lts chance> continues to function.
grea^esnonsibilftTirfsee?
.
With less government regulation,
less props' and without price and
^allv
is
a"'e'p"se ™
p
,
u
a
^een
free
0£
j£
"if
it does
In the past 20 years it
to become used to
was
us
both
easy
s01.j 0f ganta Claus
which
to
rf^f £|ee ™ D°™
functlon well
enterprise.
j,as
competitive
free
COntrols,
paternalism
supposed to take care
g0£
we
£n£0
trouble or
going to get
were
afraid
jn£0
trouble.
more
leadership and more vigorenterprise
to
solve
any
ous
of
troubles
without
we
were
It
will
fears
or
now
of
take
troubles
coming to
the government for aid.
It will
face these also take greater daring and inlooking to
confidence
business
our
and
with
or
This
free
to
be
can
we
from
and
adjustments
time to
But they must and can be
problems
controls,
inflation
ours,
now
continue
can
we
An
will not do
important
firmly be-
solved
produce
to
greater
and
factor
all
insist
that
is
can
savings that
can
in
But
upon.
we
do
and
that
in
spite of
all
the
be made, only a
relatively small reduction
of living for all, and do it better
than
so.
government spending is being reduced.
That is what we all want
and
detect
can
be
worid
all
paternalism
the
in
Free
for
active
an
the
Jr?m government could
ever obtain-
1 have faith in American free-
the
what
see
Federal
the
Reserve
There is
nothing as you well know
really very mysterious
about the policies of these two
agencies. They are well described
that
in the report on the Reserve
Sys¬
tem which the
Clearing House it¬
self
has
published,
and
reductions
spend
for
so
that the people
themselves
what
and
we
the System have been frank about
policies. One of the best things
the New York money market can
do is to assure a broad and
vigor¬
our
market
ous
curities.
in
This
Government
market
is
se¬
vitally
important because its behavior is
watched
and
magnified
through¬
out the country and
the world.
There may be suggestions you can
offer for improving the structure
of this market.
needs
study to
issues
new
whether
ways
earlier
thisgfyear,
Most
people do not realize-that $7 bil¬
of
issues,-. exclusive
new
United States
first
six
in
the
months
the
market
this
of
can
the gain of fluctuations in the
market.
If you are not, then all
the
we
have been
saying about want¬
the
future
the
and
o
welfar
closing I would like again t
thank
gentlemen
you
help
and
that
we
have
Bank
Reserve
have
and
already
thinking
House
report
its
all
th
counsel,
said.
the
of
I
a
als
am
fine
the
on
Clearin
Federal Re
This report wisel
System.
serve
for
good thing
gotten from th
many
market of New York City
specifically of the Federa
I think
I
the
pointed out that the task "of credi
policy centers on the developmen
of flexibility and of a readines
to resist equally the forces of in
I
als
am
thinking of the excellent
suppor
recent times.
more
In
these things you
all of
hav
been most
helpful. We have talked
times about how this Ad
many
ministration
honest
America.
what
policy,
trying
for the
to
obtai
citizens
o
We are
doing it throug
call the three pillars o
we
honest
eral
is
money
proper
budge
properly functioning Fed
money—a
a
Reserve
System, and prope
The details o
debt management.
those three
to
most
pillars are well know
here tonight. W
of
you
making some real progress o
each of those pillars. We are mak
are
ing
enough
feel
there
progress
be
can
so
less
that
and
w
le
fairs
as
time
goes
As
on.
thi
comes
the rules
lish
or
regulations, or estab¬
capital issues hdmmittee in
a
time
of
But
peace.
fact it is my firactive, intelli
hope—in
my
belief—that
with
of
the
the
of New
market
business
leaders
York
of
par
an
America
year-
pro bably
the larg^tghmount in
history. No one wants /to increase
further
a
free
enterprise
money
will
and
move
things, to
based
sound
on
to
more
sound
on
fiscal
policie
and
new avenues of
bette
employ
ment and higher standards of liv
study of this problem might sug¬
gest some further ffeely operat¬ ing for all Americans.
ing mechanism for the
better
handling
There
of
prospective
issues.
be
something
the
may
Treasury, the SEC,/or the Reserve
System should do./
(3)
We told Senator Capehart's
that We
believe the
Government must Took very seri¬
committee
ously at
ment
further
of
use
funds abroad
to
Govern¬
aid
the
fi¬
nancing of competitive enterprises
there. Many people and groups of
people are studying this whole
field, and
private
we
to
you
as
ers
might
a
Administration's
increase
the
participation
investment.
take
feel certain that it
this
be
in
This .being
money
role
of
foreign
the case,
and business lead¬
well
be
prepared
to
fresh look at this field.
If
foreign trade and foreign industry
are to be
developed, it/more and
should be the money of free
enterprise which is to do the de¬
more
lieve that ways can be found
You must be ready
to take the rap as well as to reap
for
of gent, alert leadership on the
Government issues,
placed
were
continue to make America
As leaders in the money market, you must be ready to keep
that market virile,
active and
strong on both the buying and
o
paying possibl
true, there will be more an
be found to spread- out financ¬ more free enterprise in addition t
ing and lessen the ri§k of conges¬ that large measure which has al
tion and indigestion such as oc¬
ready been returned to you. It i
see
great nation it is. I think they will
even
A
more
can
velopment.
the
that
government entering into your af
(2) The market for
difficulties and all the sad experi¬
ences in the past.
But we also be¬
America
both
thei
staffs.
Conclusion
In
is
dom and in American enterprise,
made
planning
recommend
indus
have
waiting to which your money market pro
Treasury or the vided the Treasury's big financin
System will do. operation last July and at othe
We
know; of
selling sides.
making in
government spending will be returned to the people through tax
we
They
have
and
large
to
tendency,
days of flation and deflation."
a
from
over
think
We
the
we are
mar¬
of stability which
enterprise
to
greater in the months and years private
profitably beyond our
ahead.
savings that
enter¬
by buy¬
money
spending
rapidly.
It
follows
that
large
amounts
of money will
be put
back into
the
economy
by defense spending for some time to
come.
It is just as important that
government
markets
The fluctuations
occasionally
objective
going finer
developments
throughout
resulting large- the land, with resulting higher
scale unemployment. There is no employment and better standards
I
least
money
operation in itself pro¬
measure
time.
without
to do so—and I
market.
in
Government
opportunites
should
into recession and
lieve
a
perhaps,
ways
helpful.
more
stand still.
which may develop from
great nation of
avoid
genuity by free enterprise to solve
the
other
America
think
help free
suggest
One is in the
This
lion
enttrDrise
I
can
to work,
curred
next January.
convenes
As leaders of the United
the
of
confidence.
made
investment
Funds,
cash
'
With
New York City, we can
excuse
itself
lines
propose
money market of America here in
own
tively low."
approach
about.
expensive
earnings
some
keen and it is
more
shiver
that
in
ba-
sure
a
that competition be-
only
sional management would be very
if
fact
supplies
as
than be-
more
not
is
nearly
means
a
adjustments. ThtP
_
From time to time they
change investments — selling se¬
operating.
It
and
Ways
,
to
tax law to the Congress when
wage
are
in
only
in
which
free economy
from time to time without letting
not
Tjeasur^, an4,,
Means
Committee
and
vest
men
which is now being studied by the
new
.
.
leaders of America's business
professionals—select the com¬
panies which Mutual Funds in¬
are
These
in
enterprise
carried
dividual income tax cut go into
nouncements
of record highs in effect as scheduled on Jan. 1 of
the cost of living from month to 1954.
These large sums thus cut
month
seem
to
me
improperly from the taxes will remain with
emphasized. It is of course true the people for them to spend as
the
in
research
leaders of American
Government price pegging, for the
market to stand aside
This Administration is cornin the hands of all mitted to see the Excess Profits
Americans^
In
tfils
connection,
to
in.
you
is beneficial to all.
Excess Profits Tax to Go
as of the momenty
relatively stable pur-^
But
economy.
year.
one
areas
finance and business
vides
tion's requests that these two
levels of taxation be continued
still stand. Any readjustments in
eggs all in one basket." Then the
the new high which the fractional either of these tax schedules will
business cycle and fluctuation is
increase has established, the em- only be recommended as a part of
covered simply and clearly.
It is
should be just reversed, the general tax revision program
shown how experience proves that phasis
When
certain
perhaps
ket.
has been
now
for
going to take the liberty free enterprise
making some suggestions as to of the nation.
prise, for making
ing and selling in
government up till
spending for them,
tries
and'plannin
its research
as
am
provide
Unnecessary Controls
inflation.
runaway
the
Diversification:
I
of
securities
Business Now Free
high record
Four Main Reasons
The four
under
from page 3
all
Booklet
This is
construc¬
people
dividends
never
the
leads received
were divided among them equally.
The coupon offered a free Mutual
a
but
certain conditions.
state
must
to have
it be considered as
(1)
Continued
of the firms that sponsored
copy
this
Philadelphia,
Firms Not Mentioned
ad
This
names
in
broad
high level of activity.
a
mentione
right thing
the right time.
It is just a
important for the money marke
maintain
which
prepared the ad.
Names of
Funds
in
"enter¬
market
money
think
were
Guenther Law,
Frank
Packard
Trust
really
on
the left hand side of the full page.
Albert
Pennsylvania
recognition
of
Mutual
but if the exist¬ portant
the only deter¬ Funds to the investing public.'
investments,
of risk
Recognition
the
The
and
act
must
we
I have
as
tive terms and try to think ahead
to
encourage
and
continually
Legislature, passed at the last
session, approves many Mutual
"Is there Funds as legal investments for
The ad went on to say:
a
of
Act
we
prise."
Risk
Investment
About
What
600,000 people have invested over
in
"An
dends."
tin" and it told the story
$4,000,000,000
And—Added
divi¬
of
reinvestment
automatic
do—then
both through di¬
versification and through full time
supervision."
Cooperative Advertising
On
really believe in free en¬
terprise—and I think we all really
reduce that risk,
By JOHN DUTTON
things
first thought of and then don
at
of Mutual Funds is to endeavor to
purpose
are
ders.
For
our
part
we
all
the
for
venture
own
are
bor¬
study¬
ing the relation of taxation to the
problem.
V
(4) Finally,
we
wonder
if
the
banking and investmenU'houses of
America
might not T.;have more
people who are detached from the
routine operations of the business
who could be constantly
watching
p\)R
Volume 178
Number 5262... The Commercial and Financial Chronicle
(1359)
The
Indications of Current
Business
Activity
week
Latest
AMERICAN IRON AND STEEL INSTITUTE:
Indicated
steel
Equivalent
Steel
operations
AMERICAN PETROLEUM
42
oil
and
gallons
Crude
Oct. 11
(net tons)
fuel
(bbls.
average
output
oil output
(bbls.)
Residual
fuel
ASSOCIATION
(bbls.)
116,880,000
6,992,000
7,234,000
U.
6,987,000
23,916,000
24,687,000
24,848,000
23,561,000
6,486,450
6,494,900
6,620,700
DEPT.
at
2,145,000
2,241,000
9,804,000
10,397,000
10,214,000
8,062,000
8,529,000
8,226,000
Sept. 26
142,484,000
143,740,000
36,924,000
37,358,000
143,287,000
34,725,000
»
26
—Sept. 26
126,217,000
126,189,000
Sept. 26
51,936,000
52,164,000
!
CONSTRUCTION
U.
S.
Public
34,989,000
117,032,000
50,912,000
CIVIL
823,884
818,461
ENGINEERING
'September
668,242
COAL
726,426
Bituminous
i
1
258,724,000
$382,583,000
$341,242,000
$273,524,000
$234,277,000
159,550,000
166,649,000
coal
S.
BUREAU
and
lignite
coke
OF
1
123,859,000
181,692,000
106,875,000
—Oct.
:
1
98,659,000
165,701,000
74,087,000
25,200,000
15,991,000
32,788,000
18,944,000
Sept. 26
9,620.000
9,665,000
9,745,000
Sept. 26
682,000
609,000
600,000
Sept. 26
87,600
*88,700
94,800
STORE
SALES
SYSTEM—1947-49
100
=
115
120
100
FAILURES
(COMMERCIAL
8,414,452
8,353,541
8,694,301
BRADSTREET,
INDUSTRIAL)
—
Cotton spindles active
steel
Pig iron
(per
Scrap steel
DUN
—Oct.
1
METAL
189
Sept. 29
ton)
Sept. 29
(per gross ton)
PRICES
Electrolytic
(E.
M.
&
152
178
129
Lead
(New
York)
Lead
(East St.
Louis)
at
$35.33
$40.00
29.475c
29.700c
29.700c
29.150c
8,870,000
476.0
13,788,000
*13,717,000
12,476,000
Durable
82.500c
13.500c
14.000c
16,000c
13.300c
13.300c
13.800c
15.800c
10.000c
10.000c
11.000c
95.52
94.70
92.87
104.31
103.80
103.47
109.24
MOODY'S
U.
S.
Estimated
INDUSTRIAL
107.62
113.12
6
106.24
105.69
105.52
111.81
6
103.80
103.47
102.96
109.06
6
98.41
97.94
97.94
103.47
6
102.63
101.97
101.80
—Oct.
6
104.14
103.30
102.63
109.06
—Oct.
6
106.39
106.04
106.04
112.56
Oct.
6
2.81
2.87
3.01
2.78
—Oct.
6
3.49
3.52
3.54
3.21
DAILY
6
3.20
3.26
3.30
3.00
Group
Oct.
—
Baa
—
MOODY'S
Orders
(tons)
Percentage
of
OIL,
PAINT
1949
3.88
6
—
AVERAGE
3.88
3.59
3.63
3.64
3.38
3.50
3.55
3.59
6
3.37
3.39
3.39
393.9
405.9
415.5
218
218
$1,833,000
$1,998,000
$1,574,000
526,000
499,000
473,000
494,000
465,000
340,000
$2,853,000
$2,962,000
$2,387,000
29.623c
29.611c
24.200c
28.688c
29.254c
34.824c
236,069
226.365
264,379
353,240
100
98
Sept. 26
PRICE
481,985
OF
523,839
105.58
Total
467.366
*105.56
105.98
tfThree
109.19
Total
on
sales
Other
Other
sales
initiated
Other
74,100
the
sales
136,160
107,930
SeDf
12
Sept;
189,375
12
—
36,430
sales
SECURITIES
—
ON
EXCHANGE
(customers'
N.
Y.
of
of
shares—Total
short
total
other
:
sales
of
by
sales
of
$90,000
39.000c
$2.07500
$2.07500
$2.07500
$2.15000
$2.15000
$2.40000
$2.40000
$2.40000
21.500c
21.500c
20.#00c
27.000c
27.000c
24.500c
60.000c
60.000c
56.500c
£86,099,000
£19,104,000
£10,384,000
$99,672,830
$95,393,045
$68,100,110
674,635
t
12
126,890
163,160
145,700
147,720
19
630,990
926,290
805,530
933,846
12
1,041,425
757,880
860,515
1,089,450
1,026,310
951,230
1,081,566
34,976
19,608
20,045
976,867
534,943
$23,598,189
567,457
707,804
$26,657,998
$32,727,115
28,379
15,954
18,316
20,422
25,546
161
20,309
sales
Sept. 19
847,733
458,745
561,065
Sept. 19
16,293
8,044
5,897
831,440
450,701
508,061
557,662
Sept. 19
$31,222,876
$17,288,749
$20,599,487
$23,224,613
Sept. 19
241,900
139,630
175,970
19
241,900
139,630
175~970
156,300
Sept
19
363,740
209,030
279,774
314,090
ITEMS
U.
OF
Commerce
operating
S.
of
August
CLASS
I
Commission)—
income
20,210,605
from
deductions
available
after
fixed
for
fixed
—
Net
89,511,772
77,207,818
56,310,508
3,776,772
2,882,097
74,420,356
53,428,411
41,813,744
40,260,409
50,882,877
31,693,146
33,621,076
19,153,711
6,300,712
6,285,255
2,716,753
3.42
3.29
2.70
$377,400
$7,921,500
$1,877,150
$273,000,647
taxes
2,787,462
79,232,258
17,406,286
& structure & equipment)
42,591,512
58,692,592
—
income
$273,269,096
$262,721,632
7,478,492
7,674,255
7,186,176
$265,522,155
$265,594,841
$255,565,456
appropriations:
common
stock
stock
preferred
of
110,959,602
81,996,865
2,764,607
income
Federal
93,288,544
4,213,933
115,920,844
charges
charges
25,188,434
115,173,535
3,962,591
income
19,780,490
119,883,435
Depreciation (way
On
BRITAIN-
deductions
Other
Ratio
GREAT
income
Income
On
IN
income
to
fixed
charges—
:
STOCK
SALES
ROUND-LOT
OF
ON
THE
STOCK
MEMBERS
NEW
YORK
OF
SERIES
100):
—
U.
S,
221,030
349,460
200.350
4,503,390
6,481,710
4,953.740
6,339,570
12
4,724,420
6,831,170
5,154,090
6,579,540
——Sept
DEPT. OF
UNITED
STATES
110.6
110.7
110.3
Sept. .29
98.1
98.1
95.9
Sept. 29
104.6
*104.7
104.0
Sept. 29
91.7
92.4
89.7
108.7
-Sept. 29
114.6
114.6
114.7
112.6
foods
Meats
:
1
other than
^Includes
farm
and
730.000
capacity
tons.
of
foods
barrels
117,547,470
of
foreign
tons
as
of
crude
Jan.
runs
1,
(Sept.
1953
as
19.
1953
against
figure
the
Jan.
revised
1,
to
of
Sent
GROSS
DEBT DIRECT
AND
omitted):
30
fund
balanci——
—-
111.0
Net
105.9
108.4
709,000
1952 basis of
T
GUARANTEED—(000's
General
Sept. 29
products
SECURITIES
of August.
purchases
AS
commodities
DI¬
239,970
12
GUARANTEED
A.—Month
IN
sales
Net
19
Sept'.
Commodity Group—
annual
AND
S.
Net
NEW
=
U.
TRANSACTIONS
MARKET
RECT
TRANSACTIONS
q_nf.
(1947-49
TREASURY
(SHARES):
—
PRICES,
figure.
—
income
Income
iq
Sept'
—
$2.00000
of June:
railway
Total
156,300
SeDt
pound)
(per
LTD.—Month
BANK,
INCOME
Dividend
sales
sales
new
ISSUES
(Interstate
Month
Other
3,403
Sept. 19
ingot
^
CAPITAL
Net
113
18,155
513,958
plus,
Magnesium ingot (per pound)
$2.00000
i
MIDLAND
sales—
commodities
i
99%
Aluminum,
$2.00000
——
97%
SELECTED
$37,936,203
pound)
**Nickel
NEW
219
sales
on
$92,000
$2.15000
15,735
——
ACCOUNT
Round-lot
Revised
39.500c
$92,000
pound)
435
—
shares
Short
*
35.000c
pound)
27,944
purchases by dealers—
Other
§Based
34.500c
35.000c
(per
Sept. 19
Total sales
All
42.470c
34.500c
(per
dealers—
shares—Total
sales
Processed
37.970c
120.500c
(per
—Sept. 19
:.
ROUND-LOT
Farm
$190,680
§Cadmium
Miscellaneous
value
EXCHANGE AND
All
$188,308
37.970c
ounce)—
(per
$35,000
$185,200
tCadmium
Sept. 19
sales
—
121.500c
79.596c
$35,000
tCadmium
sales
sales
Customers'
LABOR
refined
80.596c
81.350c
$35,000
price)—
S.
25,820
RYS.
(customers' sales)—
orders—Customers'
Customers'
WHOLESALE
82.350c
min
U.
288,566
Sept. 19
sales
FOR
99%
314,386
42,630
—
sales
Total
£72.881
250,000
Sept. 19
short
TOTAL
£72.894
£69.366
292,690
Sept. 19
other
Number
13.983c
10.982c
£70.210
204,970
COMMISSION:
purchases)
—
Customers'
Other
73.000d
$2.78310
244,820
STOCK
shares
purchases by dealers
Round-lot
83.250c
74.000d
$2.81533
10.180c
Straits—
York,
Cobalt,
orders
Short
York
(per ounce,
Platinum,
—
SPECIALISTS
by dealers
of
Number
85.250c
,
165,350
Sept.'
AND
of
Round-lot
$2.80271
Quicksilver (per flask of 76 pounds)
liAntimony (per pound) (E. & M. J.)
Antimony (per pound) bulk, Laredo
Antimony (per pound) is cases, Laredo
244,120
qpnf.
Customers'
»
85.250c
74.000d
ounce)
per
201,780
12
"
3
value
Dollar
39,850
ounce)
(Check)
Sent
of members—
—
EXCHANGE
Number
180,395
Sept. 12
DEALERS
Number
214,895
(per
(pence
(per pound)—
Gold
140,350
STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODD-
Odd-lot
10,550
97,830
sales
Dollar
4,200
Sept. 12
sales
Number
21,200
York
Exchange
(per pound)—East St. Louis——
New
122,530
15.800c
£89.597
Sept. 12
Other
Number
112,240
►
floor—
transactions for account
Short
Odd-lot
Tin
129,800
—
purchases
LOT
139,100
103,730
sales
Total
515,480
16.000c
£95.363
£89.341
(perjlong ton)
14.000c
13.800c
£93.344
ttZinc, London, prompt (per long ton)—
XlZinc, London, three months (per long ton)—
626,830
114,960
sales
Total round-lot
Total
451,740
550,610
87,930
sales
Total
606,360
708,470
9,900
1„
off
377,710
458,270
Sept. 12
_
purchases
Short
111,350
—Sept. 12
.
—•—_______
London
§§New
J
transactions
Total
659,660
98,870
—Sept. 12°"
■
sales
Total
567,880
102,110
floor—
purchases
Short
687,430
80,560
13.740c
13.540c
Sterling Exchange—
New
Zinc
411,160
Sept. 12
———
the
and
Silver,
Sterling
Sept. 12
—
initiated
refinery
refinery
months, London
Silver,
Sept. 12
sales
export
New York (per pound)
Common, St. Louis (per pound)
London (per long ton)
459,907
Sept. 12
sales
domestic
Common,
which registered,
transactions
(per pound)—
X X Prompt,
MEM¬
sales
Other
Total
Other
in
purchases
Short
,,
specialists in stocks
—
Electrolytic
BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions of
August:
PRICES (E. & M. J. QUOTATIONS)—
Average for month of September:
Silver
2
Month of
l
Copper
INDEX—
ACCOUNT
—
METAL
94
Oct.
FOR
INSURANCE
omitted):
Total
231,254
98
100 —
TRANSACTIONS
LIFE
OF
PURCHASES—INSTITUTE
Ordinary
227,129
257,907
Sept. 26
—
period
REPORTER
INSURANCE
Lead—
226,801
—Sept. 26
DRUG
*232
Electrolytic
;——r.—
"Aug.:
3.54
Sept. 26
of
of
*234
425.6
9
RESERVE
239
LIFE
3.03
6
FEDERAL
100—Month
=
236
3.22
Oct
——
=
3.85
6
THE
Unadjusted
3.22
6
OF
SYSTEM—1935-39
ASSOCIATION:
activity——.
(tons) at end
AND
ROUND-LOT
3.57
Oct.
(tons)
Production
orders
3.42
3.54
Oct.
:
INDEX—
PAPERBOARD
received
Unfilled
3.41
3.52
Oct.
Group—
Group
COMMODITY
NATIONAL
3.38
6
Oct.
Railroad Group
Public Utilities
Industrials
6
Oct.
*
;
6,791,000
3.07
—
—
A
8,833,000
PRODUCTION—BOARD OF GOV¬
ERNORS
(900's
——;
_——
15,624,000
10,108,000
*6,942,000
Seasonally adjusted
AVERAGES:
,
*17,050,000
7,031,000
employees in manufac¬
goods
Industrial
Oct.
Group
YIELD
127.3
100)—
=
106.21
Group
corporate
100.9
*150.0
17,155,000
10,124,000
Average
,
of
110.9
150.8
Avge.=100)—
manufacturing
goods
Nondurable
Oct.
Aaa
Aa
v
number
7,065,000
5,411,000
111.5
(1947-49
*8,198,000
*5,519,000
turing industries—
All
108.34
*
BOND
8,199,000
5,589,000
manufacturing
109.42
Government Bonds
Average
of
workers)
goods
96.03
6
All
13.825c
6
SERIES—Month
(production
All
manufacturing
Payroll Indexes (1947-49
121.500c
13.500c
DEPT.
S.
goods
Oct.
Industrials
-
LABOR—REVISED
—Oct.
Utilities
PAYROLLS—U.
manufacturing
6
Baa
Public
AND
omitted)
June:
34.850c
83.750c
Oct.
A
Group
517,201
19,990,000
20,000,000
Oct.
Railroad
1,012,443
20,007,000
379.4
(000's
Durable
——
95,723
990,302
20,063,000
31
464.0
All
24.200c
28.225c
84.000c
Oct.
corporate
102,693
21,393,000
Oct.
Aa
121,423
745,667
9,484,000
$42.00
28.300c
Sept. 30
—
Aaa
f.
$31.50
Sept. 30
_
1,849,921
22,830,000
EMPLOYMENT
$55.26
Sept. 30
at
848,964
3,751,936
20,007,000
4.376c
Sept. 30
—
MOODY'S BOND PRICES DAILY AVERAGES:
U. S. Government Bonds
Average
4.634c
$56.76
Sept. 30
-
at
(St. Louis)
Zinc
'
4.634c
$56.59
Sept. 30
—
739,050
1,491,007
9,279,000
Nondurable
—
at
of Aug.
as
hours
Employment Indexes
refinery at
Export refinery at
tin (New York)
725,849
1,235,835
3,723,732
29
29—
Active spindle hours per spindle in
place Aug.
copper—
Straits
242,718
267,607
COM¬
22,851,000
QUOTATIONS):
Domestic
'
4.634c
$56.59
*
Sept. 29
J.
OF
20,063,000
spindle
OF
lb.)
(per
DEPT.
92,307
August
Active
&
INC
gross
—
(DEPT. OF COMMERCE):
Spinning spindles in place on Aug. 29
Spinning spindles active on Aug. 29—
COMPOSITE PRICES:
Finished
LINTERS
Linters—Consumed month of August
Stocks Aug. 31
7,665,408
3
'
IRON AGE
AND
510,325
407,073
municipal
506,533
414,226
89,767
and
604,680
496,840
COTTON SPINNING
T_Oct.
AND
$952,218
441,893
619,732
*
Aug.
112
(in 000 kwh.)_
$1,111,213
of
omitted):
month of August
In consuming establishments as of
Aug.
In public storage as of
EDISON ELECTRIC INSTITUTE:
Electric output
NEWS-RECORD —Month
construction
Lint—Consumed
10,034,000
872,000
INDEX—FEDERAL RESERVE
AVERAGE
7,088
EN¬
—
83,900
——Sept. 26
L
(tons)
(tons)
DEPARTMENT
.-
MERCE—RUNNING BALES:
90,718,000
71,774,000
1
.
*8,703
BRADSTREET,
construction
COTTON
MINES):
(tons)
109,572
251,969
IN THE
construction
Public
143,559,000
Oct.
Pennsylvania anthracite
Beehive
1
Oct.
Oct.
(U.
444,656
*125,563
$1,116,572
(NEW)
CONSTRUCTION
(000's
S.
State
Oct.
.___—
$806,197
*472,473
*288,053
122,863
I
>
'$886,089
7,487
etc
Federal
municipal——
OUTPUT
U.
Private
862,065
654,861
Federal
Ago
S.—
July:
425,546
329,219
alterations,
GINEERING
54,583,000
819,709
construction
and
U.
of
$877,628
UNITED STATES—DUN &
INC.—Month of August
114,727,000
669,259
construction
State
THE
120,276,000
Sept. 26
construction
Year
Month
omitted):
BUSINESS INCORPORATIONS
NEWS-RECORD:
Private
OF
LABOR—Month
nonresidential
ENGINEERING
—
AREAS
OF
Previous
VALUA¬
residential
New
2,835,000
{
cars)Sept. 26
of
(no.
PERMIT
building construction
Total
cars)
URBAN
Additions,
RAILROADS:
freight received from connections
of that dates
are as
2,634,000
9,757,000
Sept. 26
at—
(number of
S.
New
6,507,150
2,362,000
gept!
freight loaded
Total
CONSTRUCTION
IN
All
—1
—
AMERICAN
ENGINEERING
BUILDING
2,215,000
Sept. 26
Revenue
CIVIL
2,011,000
Sept. 26
Revenue
■
106.6
Sept. 26
Sept. 26
!
(bbls.)_
(bbls.)
oil
OF
*2,149,000
either for the
Month
Ago
89.2
of
—
(bbls.)
at-
oil
fuel
§2,132,000
of quotations,
cases
Latest
Sept. 26
—.—
Stocks at refineries, bulk terminals, in transit, in pipe lines—
Finished and unfinished gasoline (bbls.) at
i
*95.3
in
or,
are
Year
(000's
output—daily
.
oil
Residual fuel
Distillate
§94.6
Oct. 11
stills—daily average (bbls.)
(bbls.)
Kerosene output (bbls.)
Kerosene
Ago
that date,
INSTITUTE:
condensate
each)-.—_——
output
Distillate
Month
Week
on
production and other figures for the
coyer
Dates shown in first column
TION
to
runs
Gasoline
month ended
Previous
Week
capacity)
or
month available.
or
to—
ingots and castings
Crude
of
(percent
following statistical tabulations
latest week
barrels).
108,587,670
debt
Computed
-
annual
rate
—
2.456%
2.443%
2.348%
tBased on the average of the
quotations.
§Average of quotation on special shapes to platers,
UDomestic, five tons or more but less than carload lot, boxed.
§§Price for tin con¬
tained.
**F.o.b. Port Colburne, U. S. duty included.
XXAverage of daily mean of bid
*Revised figure.
tBased on the producers' quotation.
producers' and platers'
and
ask
quotation at morning session
of London Metal Exchange.
39
The Commercial and Financial Chronicle..
40
.Thursday, October 8, 1953
(1360)
.W.
increased volume
Fox-Martin Discusses
Typical
Mutual Funds
Mutual Fund Owner
7.~Reporting
BOSTON, OCT.
the results of
a
rfund
owners
before
.fund
Conference
of mutual
the Mutual
survey
in session here,
Milton
Fox-
Martin,
sales
executive
o
f
Kidder,
Peabody & Com¬
pany, declared
that the typi¬
Mrs.
with
to
.above
'Joneses'
than one mutual
owned shares in more
three.
Forty-eight percent
were
doctors, lawyers, clergymen,
teachers, nurses, etc.
"Although
the initial invest¬
ment of the 'Jones' family was
have
transferred their thrift habit from
BOSTON, OCT. 7.— Speaking here MSnday morning at the
Fund Conference on the topic, "Serving The Public Through
Funds,"
declared
dollars in
dollars today—
*
•
t
have been going
bank accounts and
larger sums
stocks,
into
^L1S hi
fnnHQ
^hy should mutual fu
representing the
fn
other business comes close
gencies,"
Mr.
Fox-Martin stated.
.
JfrACJipt:vp
restrictive
available f inancial inst tu l
potential market for mutual through which the actual ownerfunds sales to the 'Joneses;'
As ship of American in^us ry can b
competition,
security frater¬
the rest of the
as
have
we
as
we
sound sale of
likely to have*
are
needed
objectives
of
each fund
tions
companies
selves
gram.
With
salesmen
cause
for
today
they
big
be¬ industry fares reasonably well under State regulation, wkich is by
tar the oldest, and it is now Ptea*"
big orders that
hungry
...
looking and hoping
are
orders
—
'meat' of their business.
in
logical prospects are industry
regulation,
those that have a savings account
wa"^s
our
banking
savings
showed
The
bonds.
survey
ing made their initial investments
out
of
time
These figures in¬
savings.
that
dicate
and
we
insurance
^jends
need
energy
waste
not
trying to
con¬
type of restrictions that surround
publicity and prospectus use
to the Public can only be
reduced
through volume which
Mr. Fox-Martin compared
the can be achieved only as our story
It seems to
fund
salesman
who
sat
around can become knowh.
vince
security holders to convert
hoping
excess
wasted
for
big
orders—those
of $10,000—to the man
a
in
who
Costs
me
have
we
reached
degree of
a
ssmsi
a
in the public inter-
well be made
pearl.
servjce
same
1951.
K-l
Qr
Scide S
But with
^ fits his needs.
not
flects
your
unlesg the buyer
<<For
.g
a
pr0_
obvious that the
<gale of
security' approach is not
the SQund Qne
Fi^ncial plan.
fessionai?
jt
is
141
erratic
the
at
the
the
end
condi¬
market
fiscal
of
to
1952
also largely due to
was
in
decline
been
in?,
values
market
in
made
six
service
to
can
do
this.
Fund in the last:
months:
Only the
the investor.
salesman
invest¬
list for
the
ment by the K-l
Additions
His
American
7%
Smelting
Cluett,
4%
$5.00
Co.
Refining
&
Co.
Pfd.
Cum.
Brown
Peabody
Conv.
Cum.
Pref-
what surveys of
indicate, I firm¬
Kaiser
Co.,
2nd
believe
there
is
five,
ten
Pfd.
Southern
5%
Ry. Co.
Arkansas
The tremendous increase
ownership of 'dollar
safe' investments—insurance, gov¬
ernment bonds, savings deposits,
5%
,
in the public's
certificates
Pfcbl.
Corp.
Pfd,
N.
C.
Pfd.
Eliminations
the sky.'
loan
Chemical
&
Conv.
Kirby Petroleum Co. $0.50 Cum. Pfd.
p^nhncrd Finance Co. $5.75 Pfd. Stock;
or
twenty times the market for
conservative
'management of
and
Aluminum
Cum.
5%
1
Inc.
&
Conv.
Cum.
1st
Interstate Bakeries Corp. $4.80 Cum.
to
Natural
Cum.
Pfd.
Gas
Corp.
,
,
Bethlehem Steel Corp. 7%
Celanese
Corp.
4V2%
Florida
Cum.
P.
Cum. Pfd.".
America
Conv. Pfd. "A"
L.
&
7%
I
sincerely believe that prudence is
an even more powerful force than
the desire for gain—that a greatly
Co.
4'/2%
4'/4%
St.
U.
Indiana
Cum.
Public
Steel
Pfd.
Canada, LtcL-
Service
Co-
1
Pfd.
Regis Paper Co.
S.
Cum.
Pfd.
Cum.
Northern
\
of
International Nickel Co. of
—
gives striking evidence of that.
Growth Stock Fund
share of $16.6$
per
fiscal
1953
ning—wjth an understanding and the portfolio.
expianati0n of the fund or funds
The following changes have-
savings
Massachusetts Investors
value.
$35,226,773
money' approach than for 'pie in
I^Aassachusetts InvestorsTrust
andl
the securi¬
ties markets generally.
The de¬
cline in total assets from $37,621,—
even
investment dealer
PHILADELPHIA 3, PA.
1952
tions that prevailed in
'
th
the
at
investments, this is not too often
a
or
fiscal
yearend com¬
the client's needs or pared with $17.65 a year earliermost products and
Adjusted for the capital gain dis¬
tribution, this is a 3.3% decline forthe K-l Fund for the year and re¬
With
tastes.
ly
Prospectus from
dividends from the
value
Asset
stock buyers may
BOSTON
880-
more
additional shares of K-l at
net asset
is to advise in its selection with
due regard to
"Contrary
OF
share
per
.
addition, Keystone Fundi
paid a special distribution of
per share from net security-
in
ed
fessions.
Bond Fund
totaled
In
of advising the buyer is one
of the most responsible, as it can
be one of the most rewarding pro¬
1928
ot
investment
net
1953
in
source
job
FOUNDED
from
fiscal
than the total
appr0priateness for him; the other
retail
sm
in
share—20
per
ss
barrel of prime oysters
looking for
Qr
our
to mutual funds."
byInc.,.
$35,226,773 of assets at the
yearend, it is one of"
popular Keystone Funds;
Dividends
buyer decide its
generally
and the Exchanges
are
regulated, but without the
Funds,
had combined net assets
income
|ts merits—or other-
^Tnd^L^ities business
supervised
Custodian
with investors.
380
on
J™
the-
of
"Essentially, there are only two profits realized during 1953. The
ways to sell anything—be it neckcapital gains distributed to share¬
furniture, insurance or secu- holders totaled $793,536, some 52 %>
rities.
One is to sell the product
($415,749) of which was reinvest¬
fnH wise—letting
a
degree without the restrictions we
of those reply¬ face on advertising
on telling the
86%
that
™ay
prospect insofar
a
regulation is concerned. While ou
be
"Our most
or
newloak
ant to know that a
and not the
should be the 'gravy'
ended;
fiscal
1953
personal
the planned
opera¬
the most
are
strategy of
approach.
on
$211,301,900 at the end of Augusts
insurance
establishing themin the financial
in
a
year
—
fiscal
series
10
Keystone
a
They
the
of
firmly
so
—
stocks;
This preferred Fund is one-
which
life
the
of
Key-
of
"K-l"
Fund
preferred
shareholders
19,697
Fund.
something from
learn
we
success
the
for
the
and
they
results
«can
broadly
Aug. 31, 1953, was issued today to.
0ffer and avoid overselling of past
the
Report
73
for income
selected
than managed investment
accounts," Mr. Anderson urged
that mutual fund dealers explain
buyer
of
portfolio
Describing mutual funds as "no
^
Annual
Custodian
stone
more
characteristics
sound and
a
KEYSTONE REPORTS
Tn .my
life insurance pro¬ nity is concerned. The 'Joneses'
judgment fe_
planning of the people of our naregulate us might well take a new £onr the speaker asked«With_
not exactly well- are forgotten families.
Mutual look.
Power
and
responsibility Qut
suggesting that they have atto-do, but their family finances funds have discovered them.
are
inseparable and surely t e tained
perfection, the key to their
nre
in pretty good shape.
They
"It
has
been
my
observation power to regulate carries with it over_an success is to be found in a
the responsibility to promote the
-are a cross section
of intelligent
that there are too many disillu¬
change from the sale of policies—
sound growth of an indus ry
regardless of fit or need—to the
Ibard-working people.
sioned and hungry mutual fund
business.
For the most part, ou
^They have
for
service."
The
rlllps»
rules.'
new
to the
for
Mutual
an(j ^Qr ^ protection 0f in— a
phrase used so often
^ years as a preamble to
he
here?"
—
'
ap¬
dependent
so
And as we sell the public
fact, we will prosper and thepublic will be served through the-
vestors
trusts.
1
"No
u^-ii
*a
asked,
program.
not
that
Mutual
Herbert R. Anderson, President of Group Securities, Inc.,
that although assets of mutual funds have expanded greatly
1940 to four billion
far
savings program to an investing
a
is
on
season.'
less,
$1,500 or
per-
constantly rising stock;
prices. Sound money management,
through mutual funds is always 'in,
Attitude
Reasonable Advertising
salesmen, etc., and 32%
managers,
conservative
long-range planning
proach
Anderson Asks SEC for
reported they were small busi¬
ness proprietors, executives, office
nothing.'
or
more
volume
fund; 11%
than
"This
RICH
By ROBERT R.
virtu¬ acquired—lag so? And lag, mind
$500 to $1,500 over I and ally none. The 'Joneses' represent you, during an inflationary Period
of
generally rising stocc prices
a
cash reserve for emer¬ a
great untapped market insofar
certainly as good a bac grou
"The
need.
»aved
to 50 years
old, interested
primarily
i n
providing for
a
future capi¬
Milton Fox-Martin
tal
in¬
between
$10,000
come,
30
more
of
shares
of 'double
one
sonalized
reported owning
they are building
"Mr. and a modest 'nest-egg' by regularly
Jones," making periodic investments of
a
$5,000 $50 every month or so. They have
cal fund owner
was
half
"Nearly
on
result from
can
conservative approach than onethe public may too often think i&
a
Corp.
4.40%, Cum. 1st Pfdt
7%
Cum.
Pfd.
'
\
'tJjOiiion o^trnd
Fundamental Investors,rliiQ*
Century Shares Trus t
*
Diversified Common Stock Fund
Diversified Growth Stock Fund
Canada General Funid
Diversified Investment Fund
A prospectus
investment
relating to the shares of any of these separate
funds may be obtained from authorized dealers or
£Ufl£MEN: At
amc a
no
obligation please Bend
prospectus on
VANCE, SANDERS
Manhattan Bond Fund, Inc.
COMPANY
&
PROSPECTUSES
Canadian Fund*
Ill
DEVONSHIRE
STREET
BOSTON
6i
YORK
Broadway
'
*
LOS
CHICAGO
izo
South LaSalle Street
Zio
AVAILABLE
FROM
ANGELES
West Seventh Street
YOUR
ON
LOCAL
THESE
MUTUAL
INVESTMENT
FUNDS
DEALER,
OR
Cleveland
Chicago
NEW
AUrass.
,
Lot Angeles
Hugh W. long and Company
San Francisco
A
Incorporated
i
c*y
1
Westminster
at
Parker, Elizabeth
3,
New Jersey
!
r
•
Volume 178* Number-5262... The Commercial and Financial Chronicle
•"'
;vc-
'
another
BULLETIN
'
.
instance,
*
Association
"the
National SEC
panies
^
Ti
l
•
llild JcJllSlDGSS
\ylV0S X
Liirlll With
a
3
vrFCGD
-
a
shares exceeded
new
redemptions
aiiiiug
survey
Com-
and
that
than
more
doubled
Enthusiastic
their
dealers
1927
to
most
sales."
seem
of
based,
the
1936,
constitute
$142
have
million
deeming
their
Shares
BOSTON, Oct. 8.—Today, at the end of the most serious and erally agreed that Mr. Sheffey, in-amount equal to about
business-like
mutual fund
conference
pfd uhe
Demmler, in his first major address as Chairman of the ™ctively demoTsher eonten?ions
Securities and Exchange Commission,
gave the mutual fund inside and outside of the securities
business
a
light
green
literature
with
coupled
warning. <
red
sales
on
stern
a
*
"Your industry-established procedure" he said
referring to the
National Association of Securities
Dealers'
administration
Statement
of
Policv
the
of
governing
mS ?und salesuLatl™?
<
t
is that the
industry and individual
members thereof
peril
will
be
basL
to
of
a
sales
Pnmmiccinn
nroserute
misuse
own
the
on
facts
of
non-filing
or
material which is in fact
any
used in
selling
investment
securitief,
pany
fs
what
the
paS
the
of
out
Thpn
free
case
each
act at their
deciding
in
litpratnrp
franWiv
this
is
and
not
a
com-
as I pointed
revolutionary
concept."
f?e^ler addf1<- Si^nif1i"
rumors
their
unlawful.
a. ,pa,r <?u
The
use^eterminati!™TIhnt wlr
1"ft
A,ln„rin„ fn ?he ?nWnttniinn
to
and
believe
reports
that
the
which
are
Mr.
the Statement of Policy and indeed m the
statute
•
itself
tu^eTLfos
tuies
saies
ment
of
Mr. Demmler also noted that
the SEC had a receptive mind to
proposals for improvement, clarification and simplification and
would welcome the help of the
securities industry in solving com-
.
excerpts from
the
is
of
a
ine
defines
lit-
Gtllde
vo
Durchale
purcnase
the
tne
mauce
on
,
any
ariicie
now
statute
it
nor
makes
icy
or
sions
Monday,
on
of
iny
Tuesday
this
and
week,
Was
its business-like mood
cSmpiete
lack
the
of
"hi-
jjnks" usuaily ass0ciated with
r
Th« 90»
,,
.
.
,
.,
following is part two of a paper
N "flf, *7 TinT;
Ty
°J Mutiml Fund Readers m San
h Mr. Coleman
na-
fund sP°nsors'
retailers and salesmen in attend-
the
Statement of Pol-
exception
an
tne
of msti-
oT^safe^lfteratur?"
words
Dem
eagerly
eageriy
-
1
m
in
er
the
J'Z "
* C°"rSe'
however, give a general
-idea of the type of thing covered
by the various laws.
middle-class
Herbert
R.
Anderson, President
tbe mutuaj fund industry be given
insurance
JOHN
M.
popular
the
Executive
National
termed
IwaUerfso chofthe Slut
awaited speech ot tne witnout
Srenc^squarely tossed^he
fnto tne
thl
back
t>acK
into
fund
industry,
speculation
lan
lap
of
of
and
among
the
the
ball
mutua
mutual
asking for
a
can>
of
much
much
mucn
exaeeerated
foundation
is
nearly
vestment
aspect of
every
in-
organization
company
the
observer
Federal
does
not
Trade
itself
advertising
pointed
in
pass
out
that
Commission
on
general
advance,
but acts
to
investigate or prosecute only
upon complaint or upon cases of
obvious
or
and
abuse
of
clear-cut
the
violation
law.
The entire problem of sales litfor mutual funds—one of
erature
the most complex in the industry
about because mutual
—comes
fund
shares
issues'
are
classed
as
"new
by virtue of the fact that
hi ' said
ne
said,
asked »
asked,
depressing
the
tration
The
market.
investment
ment, not
more.
But in the
case
by ^
REAL EFFORT is being iftatfa
prevent
to
a
difficulties
of
th*
the
in?-
recurrence
which
befell
vestment trusts of the '20's.
indication,
every
successful.
that the
share
consider*
a
mutual fund
redeemable
a
i»*
effort
one
owner of
has
From
this
When
of
In-
he
foct
fact,
"is
is
an-
the close of the year, Mr. Sheffey
pointed that, mutual funds in that
period sold $28 million in new
shares
and
redeemed
only
$10
million.
Referring to a survey by Bache
& Company cited by C. Norman
Stabler of the New York
Tribune,"
Mr
Sheffey
Herald
said
that
from Aug. 14 of this year to September 15, when the Dow-Jones
Industrials
dropped
from
"Following
break
1950,"
in
the
the
l\Jr.
last
sharp
week
Sheffey
276 74
market
June,
of
said,
funds.
his
This
security
probkbiy
is
relationships
their greatest growth.
There
other
are
One o£
increase^ *^ndn^edistributinn1*6^
which has been
wealth
;n
.
companies.
tvijc
occurrinr
resiiltec?
This has
mnntrv
under-
an
^
may
availabie
amount
an(j
menf
little
n
redemption
a]so
se^s
information
pbed
to
in
which
the
their
of
forth
shares,
detail
must
Securities
be
the
sup-
and
Ex-
citing
invest-
for
no
or
device.
Investment them, mutual funds
companies have been given spe- solution.
cial tex treatment under the Fedfff
y mee C6r"
tain requirements
Fundamentally, in order to receive favorable income tax treatment, the investment company
must in reality be an investment
company, both as to the diversification of its assets and the nature
of its income. The Revenue Act
requires that
investment
an
experifencn
on a current basis
at least 90% of its investment income. The company is subject to
tax only on the portion of its
investment income which it does
not distribute.
-
Another factor has been the fn»
companies to distribute
or most of their capital gains,
has resulted in
in
the
in
the
dollar
be
effectively than tan
through the ownersRijb
more
done
0f cash or bonds,
4h:rd
A
tainty
nf
fflrtor
the
been
has
undoubtedly
great feeling of uncei"
the
to
as
Prnnnmic
future
the
distribution
of
in-
coin?**
affair*
Dolitical
and
here and abroad.
Probably never
before in the history of the
100
rprtainlv
not
have
years,
for
had
we
nf
own
our
industrial
our
^voted
&0
Unifret
last
the
so
econbmte
muc*
so
is
effort
betotf
to buMing defenses ior
in
necessarv
a
possible
^fth a^ foreign powe?.
for
Th,„
greater intertsS
a
ownership of stocks as a
of adjusting for changer.
purchasing power of th*»
means
because the companies ljse if
are subject to a 26% tax on
any
capital gains which they retain, tiative
Formerly, in order to receive rested
credit
aiiJ>>-
we have experienced
the ,agt sev£ral years
.
qtntpc
The law does not require that
logical
are a
flation
com-
however,
and
lh<»
reasons for
growth of mutual funds.
Wayt ^ reSaTrded as a in the investing of money/ F«r
between
managers,
reguhx
vestment companies have enjoyea
J.A
.
reason*
tion has been helpful rather thai',
harmful. During this period, in--
regulatory
'ba custodian arrangements of sale all
investment companies and the
in
that
inL-
controversy
this
ha#t
this
with
much
wa»*
The
foreign
of
power.,
ha*
effort
our
C°™mTissior} and J? share"
come and capital gains a company been devoted primarily to checkbolders-Tbe Investment Company had to make the distributions dur- mating her moves. This unceiP'ovldes tba' a" investment ,ng the year in which the income tainty as to the future has mad*,
company may not start with assets
was
°J
were realized.
In order to
by casb
ties
or
in
items
casb
which
the
of
the
securi-
or
investment
in
assets
of
the
investment
company and not more than 10%
0f tbe outstanding voting securities of the
samples
issuer.
of
the
These
type
are
just
of
thing
by the Investment Company Act
•
covered
jn
acjdition
subject
inqo
to
mutual
the
Kooonoo
sbares
are
aiways
though
funds
Securities
■fhoxr
or
of
yea-
s
d
nrosnectus
p
As
new
th? " ^
sPectus-
as
been
a
during
shares
identical
issues,
we
must
or
if it had
as
year
in
capital gains
'
"
wererealized
more
and
more
ADDITION
to
we mu t u e
For mutual funds, the Securities Exchange Act of 1934 enters
prb-
DURING THE LAST few yeafti
there has been developed a way
for
people
fund
these
various
mutual
purchase
to
which
shares,
holds
■ •
.
IN
seek
funds.
greab
,
Promise for the f^ture- lt »
Federal
- laws,
there are many same principle which has un¬
state laws regulating investment doubtedly been responsible in
companies. Before a mutual fund
sell its shares in a state, it is
usually required to get a permit
maiftr
in that state.
This
means
that
it
degree
the
for
'J
may
.
success
of'
Tt
Hll<:trv
the automobile iriaustry.
11 wot
Henry Ford who had the vision'm
niust file certain required infor- realize the advantages of mas*
mation, agree to file periodic re- production of automobiles. Howand
abide
bv
the
in the
regula-
la^and
regulations of that particular state,
,
.
,
,
.
ever, th's requ'red a much w.to
maiket than could be prov d€^
State laws and regulations vary, by the relatively small number of1
but it is the state laws rather people who were able to pay casfe
the
usl
oeonle
Snaf Znlgemenl ol &
following
the
or
gains
J
alall of the
the
credit, just
made
Uons^olSatoed
are
capital
part
which the income
norts
The
with shares that have been offered
,
year
a
distributi0n
sale
"new"
thev
are
Act
firgt
the
Now, we
nnncionfUr
ovo
^7 sharls^tov^
*A
earned,
" diversified investment com- lowed to treat
at least 75% of the com_
pany's assets must be represented
pany<
EiflTV'ZTVf?P
agency of an adminisdedicated to less govern-
A
This is because
Ffoferring
Investment
Company Act of 1940, Mr. Demmler mutual fund groups and redeemed
said,
True, the Commission is an only $3.55 million.
executive
is ndt im
over
when the Dow-Jones Industrials
dropped from 205.62 to 177.2 at
.
foU°they
Thereftfre^
company
control
stock'maSet^^uSn'mosI
freluentlv^
frequently
the
erns
gov-
3
One
seib
or
affairs.
and
in
in
toundation
.
practice of
Secretary
Association
y
The Investment Company Act pany distribute
covers
wffe ',livtrC0UrtS- Mr' Demm" STd'i11bgure11nVhPmfihreflk the fof any one issuer
l8wycr.
vitm^ ii^wrGs in tne iy4u DrG8k jg irot mor© thsn
5% of the vsIug
*6r
what securities*
an investment company distribute
according to whether heavy redemptions have
his listeners, forced portfolio liquidations, thus
was, by implication,
buy
investment
an
In other w6*&jl
us
and writers. themselves. It
and "je investment com- its capital gains. It is the general
panies
deals with
able and
and
MlEf
bus^^ess Thich fn Ts^ence
most
must
we
TT
The Federal Revenue Act
cannot begin to go into them here,
the
group,
advertising. I humbly and vestment Companies, today lost
respectfully submit that there are no time in attacking the redAmp-
M?
they do not tell
'
to investment
upon
in-
come
tutional
fn
ment of the fund.
n
got down to serious
busineSs at the start on Monday,
of
market
snares
weitner
eithev
Federal, involves; any
supervision of the actual mandgeor
the picture primarily becauseof
increasfng numto
ruIes. reSard!"g tha solicitation s"nfbecoming Potential invest^.,
of proxies, which are applicable Most of them have only a model-
e recent occasion of the Society s
(ional conventions.
aaveriisemeni
used,
is
1927
exceeded
By S. WALDO COLEMAN
President, Commonwealth Investment Company
THE MUTUAL FUND Conference,
in its formal and informal ses-
mosatnanrartSeenLCXe1risemtnt ?avingS ba",ks and savings
joan assoCiations.
rhoVtls usreadUrNeUto Se JOHN M SHEFFEY tne able
I'll.i, the
mosi
afv-
holdings of common stock indus- larly provided with full inforrttatry groups on Aug. 31, last, were tion as to the operations of hi*
J.1AOIU1
shires —the
nati°n's institutionalized capital
companies, banks,
of
01
period
sales
every year, in1930, 1931 and 1932.
Inmnqiiv
policies,
fp1 induce
the
InVPStmPIlt
tO
or
or
raaio
in
that
in
^VjrULUC IU AI1VCMI11CI11
oiaie
sales
one
and
by
•
A
problems.
™The"sfote" of Gl'TP Securities, asking that
vigorously
asserted leadership in
hterature
literature,
Policy
lack
to
1936
redemptions
~
a<whethe^ln ^ritfo^bv wh?' a7,0¥nts to equal treatment and management. It defines dibv-tele^rionT used bv tbe 0ther law on advertising with versification, requires companies
Dy television;
usea
oy ""der the
large holders of the to state their basic
nication
radio
in
than
None nf these regulations
state
for
.
on,
a.
favdr-
-
his
aeenrv
obvious defect,
state
one
tHat
say
a more
documentation asset value per share was $14.74 0ne of the most important
the Report of the on Sept. 21, 1953.
why the present form of
to
THESE THREE LAWS-the Seance, faced with tougher selling turtles Act,
the Securities Exof^r Demmler's^ emarks bv com- conditions, moderately declining change Act, and the Investment
Detent observers
the
Securities sales- on the eve o£ Possible and
pany A.ct ~ have for ">any
&^ Exchange 'Commission ^ %^indt- expected industry-wide public re- years provided The framework for
catfoe that it is SfoL out of lations Program, and more aware Federal regulation of the investthe
nieture
a! an fofornretive than before of the complicated ment company industry. The deinterpretive marketing probiem faced by the 'ails of the regulation ot mutual
industry if it is to tap the vast funds are so numerous that we
The most
Demmler went
exceeded
four
to
only by small
Sheffey added that
^
Adding
bankruptcy since 1940."
peril-interpret the and
he statute which makes
a
able basis in
on
Plated statute. But in all major stiU rife that mutual funds con- utilities 16 78%, petroleum 14.02%, mutual fund, we see that he has
areas lt seems to have accom- jnoutea neavily to the market retail
trade
10.50%,
chemicals a very attractive means of emPli?bed «? purposes. We have ^ak were brewed m the vat of
and railro
;'
ploying professional managerherj
had no ma]or investment company »our grapes.
industry the same obligation that Wednesda
citizens
generally have to read
striking
and-at
words of
inclined
are
com-
mon
bavinff upon the
laying imnnih* members of your
sales
then
Mr.
*
com-
is
fund cannot sell
. *
- V
n.Pn
which he can liquidate at «by
Mr- Sheffey cited pointedly a
CLOSED-END NFW<5
NEWS
.■
time (though, as section
(f) fefc
comment by Paul A. Johnston, CARRIERS & GENERAL Corpo- the Statement of Policy says, th*
managing editor of "Barron's," ration, managed by Calvin Bui- price he receives may be iiiorf?
written in July, 1950, that, "We lock, reports that its five largest or less than his cost!) and is regi>-
Plex-
rate, it
states do not 'flfef'ff'
Some
limit, but most states
other.
HEl
quar-
correct admitted abuses. We have breaking prices as they raised cash redemptions
n,° inteidl°n of scuttling the ship with which to meet redemption eluding 1929,
that we re hlred to steer"'
any
(1361)
sameperiodRed?mpSghavt, erLen?6
exceeded sales in
under
act which the regulated group it- market declines, would force musel* helped to draft — a piece of tual funds to dump large blocks
le£lslatl0n which was designed to of securities on the Exchange,
At
of
only two
law had to be technical and
*
ciifx^pctinu
am
an
25%
™llh°n .of shares s°}d
of investment companies, I remind holders, by pressing for redemp- study and
you again that it administers an tion of their shares during serious amounts."
Commenting on the 1935 enactis adaptable as a means of reach- ment of the securities legislation,
ing some conclusion as to whether he said, "In a field so highly techparticular
documents
constitute nical and complex, I suppose the
"What
re-
or "
business that mutual fund share- ters of the ten-year period
.
the examination of sales literature
sales literature.
been
in
gen-
held, Ralph H.
ever
price.
almost
and on which
statistics
paid
the
investment \com-
which
portfolio the entire group
purchases by the funds themselves
By CARTER G. BURKE
to
panies
< V*
•.
ment
-J4 of the larger mutual funds period from
for that same week> disclosing 40 open- end
that sales of
Red Warninff
tt
made
hvu
.
,.
.
the Congress on InvestCompanies, made in ,1939,
covering Mr. Sheffey quoted, "During the
Investment
of
•
.-
dvvr*f..
'•
wh°
sales charge. The maximum sales money
charge
shares
on
is
investment
.et
limited
by
company
p
,y
In other words' the success of thei
a„tornobne
California automobi e
regulations to 10% of the selling
C°uId
from banks at that time-,
.
industrv
was
due
1
y
Continued on page
m
.
42
The Commercial and Financial Chronicle...
Thursday, October
(1362)
* indicates
Securities
in
Now
Registration
it Amalgamated Growth Industries, Inc.
Price—$2 per share. Proceeds—For
acquisition of patents, etc., and for new equipment and
October 8
working capital. Office—11 West 42nd St., New York
City. Underwriter—R. A. Keppler & Co., Inc., New York,
(Bids
Equip. Trust Ctfs.
Federal
None.
October 13
(Tuesday)
Services Finance Corp
(Mackall
&
Coe)
-Debentures
$300,000
ment.
Proceeds—To
writer—None.
develop mining properties.
(Hamlin
amend¬
Under¬
share
for
Nov. 16.
Oct.
each
shares
nine
Price—$7.50
Office — 6500
Underwriter—None.
the
at
held;
share.
per
capital.
20
of
rate
rights
one
Inc.;
per
unit.
Miracle
one
cent)
to
First
new
to
Oct. 23.
on
Price—$24
per
Burton
Bonds
$8,000,000
Gas
$247,148
and
(Friday)
.Common
105,500
(Offering
EST)
noon
to
|
$25,000,000
Common
—
Corp.)
underwritten
by Union
11
a.m.
EST)
Bonds
$30,000,000
Preferred
Witter &
October
28
Co.)
$1,000,000
to
be
invited)
November 5
(Geyer
&
(Thursday)
(Bids
Alexander
11
a.m.
Employees
(Offering to stockholders,
Preferred
EST)
$7,500,000
Debentures
without underwriting)
(Bids
to
be
$500,000
>
December 17
$10,000,000
(Thursday)
Erie RR
..Equip, Trust Ctfs.
(Bids
to
be
invited)
Fairway Foods, Inc., St. Paul, Minn.
May 0 filed $1,600,000 first mortgage lien 4^% bonds
to mature $40,000 annually from 1955 to 1994, inclusive.
Price—At 100% of principal amount. Proceeds—To con¬
new
Fallon
warehouse.
Underwriter—None.
Gas
Corp., Denver, Colo.
June 25 (letter of notification) 3,616,000 shares of Class
A common stock. Price—At par (five cents per share).
Proceeds—For
working capital. Office—3500 North Adams St., Peoria,
111. Underwriter—Carl McGlone & Co., Inc.. Chicago, 111.
Services
Finance Corp.
(10/13)
$300,000 of 5V2% con¬
(letter of notification)
Sept.- 28
vertible subordinated debentures due Sept. 1, 1968
(each
share). Price—At par (in multiples of $100 each). Pro¬
ceeds—For working capital. Office—839-17th St., N'. W.,
;
;
|
.
Florida Power Corp., St. Petersburg,
Fla.
Sept. 11 filed 211,416 shares of common stock (par $7.50)
to be offered for subscription by common stockholders
at
rate
of
one
new
share
for
each
shares
10
held
on
rights to expire on Oct. 26. Price—$24 per-share.
Proceeds—To repay bank loans and for new construction.
Underwriters
Kidder, Peabody & Co. and Merrill
—
Carolina Telephone & Telegraph Co.
Aug. 17 filed 33,320 shares of capital stock to be offered
for subscription by stockholders in the ratio of one new
share for each five shares held. Price—At par ($100 per
share).
Proceeds—To reduce short-term notes.
writer—None.
Under¬
Offering—Temporarily postponed..
Cascade Natural
Gas Corp.,
of
notes
and
certain
stockholders'
Bldg., Seattle, Wash.
Light Co.
repayment
be
to
shares.
Underwriter
the
remaining
bank
loans
Securities
and
new
(with
5,000
Proceeds—
construction.
Corp., New York.
ir Colton Chemical Co., Cleveland, Ohio
Sept. 29 (letter of notification) 12,020 shares of
1545
common
(par $1) to be offered first to stockholders. Price
East
City Ornamental
Minneapolis, Minn.
per
18th
share.
Proceeds—For
St., Cleveland
14,
Iron Co.,
Sept. 23 (letter of notification) 60,000 shares of common
stock. Price—At par ($5 per share). Proceeds—For work¬
Underwriters — Woodard-Elwood Co., Min¬
Minn, and Harold E. Wood & Co., St. Paul,
Minn.
it Fremont Metal & Mining, Inc., Lander, Wyo.
Sept. 29 (letter of notification) 75,000 shares of capital
stock. Price—$1 per share. Proceeds—To construct mill.
•
underwriters for resale to pub¬
supplied by amendment.
of
Underwriter—Union
stock
Flour
neapolis,
(10/27)
privilege);
to be sold
Price—To
—$4.87^
8).
Address—Box
Illinois
oversubscription
are
Pierce, Fenner & Beane, both of New York.
Statement expected to become effective late today (Oct.
Lynch,
ing capital.
Seattle, Wash.
Aug. 25 (letter of notification) 35,000 shares of common
stock (no par).
Price—$4.50 per share. Proceeds—For
For
on
Oct. 8;
$5,400,000
Gearhart & Otis, Inc., New York; and McCoy &
Willard,
Boston, Mass.
shares
offices
(EDT)
days in advance of new date.
ington, D. C.
Bonds'
_____
invited)
announced bids will be received within 30
Washington, D. C. Underwriter—Mackall & Coe, Wash¬
(Tuesday)
Monongahela Power Co.
lic.
Cleveland
Sept. 17. but on Sept. 16
11 a.m.
$100 principal amount is convertible into nine shares of
common
stock of no par value,- valued at $12.50 per
(Tuesday)
Corp
December 1
an
all
Kid¬
Peabody & Co., Merrill Lynch, Pierce, Fenner &
White, Weld & Co. (jointly); Kuhn, Loeb &
Co. and Smith, Barney & Co. (jointly); Blyth & Co., Inc.;
Lehman Brothers. Bids—Originally scheduled to be re¬
+ Federal
(Tuesday)
November 24
Government
Central
to
To be determined by competitive
—
Probable bidders; The First Boston Corp.;
stock:(par $10). Price—$12.75 per share.
Preferred
$750,000
Oct. 7 filed 105,000 shares of common stock
(no par), of
which 100,000 shares are to be offered for
subscription
by common stockholders of record Oct. 27 on the basis
of one new share for each nine shares then held
San Francisco
Underwriters
bidding.
it Farm Equipment Acceptance Corp., Peoria, III.
Sept. 28 (letter of notification) 14,000 shares of common
—None.
Private Wires
4
Bonds
$40,000,000
Co.)
November 17
Office—407 Securities
Philadelphia
Syca¬
Proceeds—For drilling wells. Office—528 E and C Bldg.,
Underwriter—E. I. Shelley Co., Denver,
Worcester County Electric Co
Office—246
Chicago
St.,
Colo,/
American Fidelity & Casualty Co
retirement
Pittsburgh
Elm
West
Denyfer, Colo.
(Wednesday)
Niagara Mohawk Power Corp
Byrd Oil Corp., Dallas, Tex.
Oct. 22, 1952 filed
$1,750,000 of 10-year 5%% conv. sink¬
ing fund mortgage bonds due Nov. 1^
1962, to be offered
for subscription by common
stockholders at the rate of
Boston
share). Proceeds—To construct
Duquesne Light Co.
Aug. 19 filed 100,000 shares of preferred stock (par $50).
Proceeds—To reduce bank loans and for new construc¬
struct
105,000 shares
San Jose Water Works
•
New York.
per
exchange. Office—112
111. Underwriter—None.
ceived up to
shares
(Tuesday)
stockholders
Securities
Productions, Inc.
Sept. 24 (letter of notification) 300,000 shares of com¬
mon stock
(par 10 cents). Price—$1 per share. Proceeds
principal amount for certificates and 75 cents
per share
for stock.
Proceeds—To acquire five
Martinliners and
the spare parts.
Office—Burbank, Calif. Underwriters—
($10
par
telephone
days from that date, bidders to be advised at least three
Central Illinois Light Co
Picture
$600,000 of 7% convertible equipment trust
certificates, series A, due Sept. 1,
1957, and 400,000
shares of common stock
(par 50 cents). Price—100% of
stock, to be offered for subscription by stockholdes at
the rate of one new share for each four shares held.
der,
(Monday)
October 27
mar¬
fited
Telephone Co., Sycamore, III.
(letter of notification) 25,695 shares of common
June 24
tion.
Common
Debentures
(Bids
Airlines, Inc.
Miami, Fla. Under¬
Co., Miami, Fla.
,
...Common
Corp
(Bids
one
$100 of bonds for each 28 shares of stock held
(for a
14-day standby). Certain stockholders have waived their
rights. Price—At par. Proceeds—To
repay $1,014,500 of
outstanding notes and for drilling expenses and
working
capital. Underwriters—Dallas
Rupe & Son, Dallas, Tex.;
Carl M. Loeb, Rhoades &c
Co., New York; and Straua,
B osser &
McDowell, .Chicago, 111. Statement withdrawn.
$},000
the company
Proceeds-—
—
of
machinery and equipment. Underwriter—None.-
more,
(Tuesday)
October 26
Underwriter—None.
—For production of movies and TV
stories.
Fifth Avenue,
New York.
Underwriter
Reid & Co.,
Newark, N. J.
denominations
(in
par
^ Dairy Queen Products, Inc., Decatur, Ga.
Sept. 28 (letter of notification) 750 shares of 5% cumula¬
tive preferred stock (par $100) and 750 shares of com¬
mon stock
(par $10) to be offered in units of one share
of each class of stock. Price—$110 per unit. Proceeds—
Price—At
$550,000
(Offering to stockholders—no underwriting)
per
California Central
Inc.)
EST)
a.m.
October 23
(par $1). Price—At market
share). Proceeds—To selling
stockholder. Underwriter—Wm. J. Mericka &
Co., Inc.,
Cleveland, O.
$10.75
$220,000
Hartford Electric Light Co
stock
common
at
Co.,
Price—At
each). Proceeds—To retire debts and for working capi¬
DeKalb & Ogle
Debentures & Common
&
Oct. 7, with rights
share.
Reno,
Beane and
(Dean
on
★ Bingham-Herbrand Corp., Toledo, Ohio
Sept. 28 (letter of notification) $100,000 aggregate
(estimated
11
(Bids
For general corporate
purposes.
ket value of
Brooks
W.
(Probably Morgan Stanley & Co.; Drexel & Co.,
Glore, Forgan; & Co.) 800,000 shares
I
(par $10)
the basis of
promo¬
it Dade Reagents, Inc., Miami, Fla.
Sept. 28 (letter of notification) $300,000 of 10-year de¬
For
Preferred & Common
Aronheim)
(Offering to stockholders)
supplied by
Business—
stock
on
Proceeds—For
Underwriter—None.
Nev.
Co.) 685,648 shares
Public Service Electric & Gas Co
common
par.
206 North Virginia St.,
—
C.
W.
Public Service Electric & Gas Co
Underwriter—Rey¬
Offering—Postponed.
share for each 10 shares held
expire
Common
Blyth & Co.,
Langley
by
and
Anchor Post Products, Inc
United
stockholder^
to be
are
)
March 31 filed $4,000,000 of 5% convertible subordinated
debentures due May 1, 1973. Price—To be
common
$10,000,000
Corp.;
October 20
Armstrong Rubber Co.
to be offered to
Bonds
EST)
noon
Boston
(Bids
Price—Four cents per share. Proceeds
—For drilling expenses. Office—703
Liberty Bank Bldg.,
Oklahoma City 2, Okla. Underwriter—None.
Beneficial Loan Corp.
Sept. 29 filed 355,976 shares of
Price—At
Office
writer—Atwill &
Rockland Light & Power Co
by stockholders.
nolds & Co., New York.
Co.
tal. Office—1851 Delaware Parkway,
$750,000
Hinge, Inc
(P.
to be offered for subscription
Proceeds—For working capital.
Manufacturer of tires and tubes.
Boland)
stockholders—underwritten
The
Proceeds—For
amendment
shares
(Wednesday)
Petrolane Gas Co., Inc
★ Arkansas Oil Ventures, Inc., Oklahoma City, Okla.
Sept. 30 (letter of notification) 1,237,500 shares of com¬
(par
198,500
Co.)
Preference & Common
R.
(Walter
Statement to be withdrawn.
stock
&
.
,
Price—$105
Engineering
bentures.
Common
Allen
Credit, Inc
(Offering
Proceeds—For working
Avenue, Baltimore, Md.
Pfd. & Com.
$1,031,250
Inc.)
Long Island Lighting Co
on
—
mon
and
(Bids
acquisition of stock of two companies, who will borrow
the remainder to repay bank loans and for
working
capital. Underwriter
C. K. Pistell & Co., Inc., New
York.
Lunt
&
Eastern
Co.,
Kansas Gas & Electric Co
•
Applied Science Corp. of Princeton
May 21 filed $750,000 of 6% guaranteed sinking fund 10year debenture notes due April 30, 1963, of this company
and 75,000 shares of common stock (par one
cent) of
Bradco, Inc., to be offered in units of $100 of notes and
10 shares of stock.
&
(John
new
expire
to
California
October 14
General
record
First
Strategic Materials Corp
\
of
175,000 shares of com¬
95,000 shares
of which
$1),
.
(The
* Anchor Post Products, Inc. (10/20)
Sept. 30 (letter of notification) 32,953 shares of common
stock (par $2) to be offered for subscription by common
stockholders
$5,000,000
Nevada Natural Gas Pipe Line Co
share for
new
one
(par
tional activities.
Preferred
(Union Securities Corp.)
Anacon Lead Mines, Ltd., Toronto, Canada
Sept. 28 filed 700,000 shares of common stock (par 20
cents—Canadian funds) to be offered for subscription by
of
stock
publicly, and 80,000 shares are to be offered
in exchange for the 10,000 outstanding shares of Crockett
Kansas Gas & Electric Co
Price—To be supplied by
it Crenco Corp., Reno, Nev.
Sept. 28 (letter of notification)
mon
$1,500,000
EST)
noon
Beverly Hills, Cal.
Aug. 24 filed 100,000 shares of class A common stock.
Price—At par ($10 per share). Proceeds—To establish
and develop a cattle industry in Israel.
Underwriter—
the rate
issue
offered
American-Israeli Cattle Corp.,
at
revised
& Co., Inc., Cunningham, Gunn & Carey,
Livingston, Williams & Co., Inc., all of Cleve¬
land, Ohio.
■
-
(Thursday)
Baltimore & Ohio RR
N.Y.
stockholders
items
and
Inc.
NEW ISSUE CALENDAR
stock (par 10 cents).
common
previous
H. L. Emerson
Sept. 28 (letter of notification) 149,999 shares of common
each five shares held.
additions
since
•
8, 1953
expansion. Office—
Ohio. Underwriters—
General
five
Lander, Wyo. Underwriter—None.
(10/14)
150,000 shares of participating preference
Aug. 24 filed
stock
344,
Credit, Inc.
(par $1) and 150,000 shares of common stock (par
cents), to be offered in units of one share of each
Price—$5 per unit. Proceeds—For work¬
class of stock.
ing
capital.
Office—Washington, D. C.
Co., Inc., New York.
Underwriter—
John R. Boland &
General Hydrocarbons Corp.
Aug. 12 filed $1,010,800 of 20-year debentures and 66,424
shares of common stock (par $1) to be offered in units
of $350 principal amount of debentures and 23 shares of
stock. Price—$359 per unit ($336 for the debentures and
$1 pe* share for the stock). Proceeds—For general cor¬
porate? purposes.
Business
Underwriter—None.
—
Oil
and
Office—Oklahoma
development.
City, Okla.
gas
Number 5262
Volume 178
.The Commercial and Financial Chronicle
..
43
(1363)
^ General Shoe Corp., Nashville, Tenn.
Oct. 2 filed 19,465 shares of $5 cumulative preference
$3
the following basis: For
4
shares
General
of
each Berland
Shoe
common
share
and for each
6/11th shares of Berland preferred stock one share of
series
B
shades of Berland prefered
stock.
common
is subject
common;
General Shoe
preferred of
of
A- Gosselin Stores Co., Inc., Oklahoma City, Okla.
2
(letter of notification) 15,000 shares of class A
stock
(par $1) and 75,000 shares of class B
common
stock, the purchaser of each class A share
being given the privilege of buying five class B shares.
Price
$1.05 per share.
Proceeds — To buy two new
Avenue, Oklahoma
• Grand Bahama
Co., Ltd., Nassau
Feb.'3 filed $1,350,000 20-year 6% first mortgage conver¬
tible debentures due March, 1973, and 1,565,000 shares
of class A stock (par 10 cents).
Price—Par for deben¬
tures and $1 per share for stock.
Proceeds — For new
construction.
Business
Hotel and land development.
Underwriter—Gearhart & Otis, Inc., New York. Offering
—Postponed indefinitely.
>
of
be supplied by amendment.
Proceeds—For general cor¬
Underwriter — None." Offering — No
porate-purposes.
definite plan adopted.
★ Hartford Electric Light Co. (10/23)
Oct.;, 2 filed 105,500 shares of common stock
(par $25)
by stockholders of record
to be offered for subscription
Oct., 23 on the basis of one new share for each eight
shades held. Price—To be supplied by amendment. Pro¬
ceeds—For construction program. Underwriter—None.
Hawaiian
preferred
and
4,900
stock to be offered in units of
stock
of
unit
at
to
$20
per
unit to
one
stock¬
per
public;
"
which
scription
the
\
685,648
by
rate
of
Corp., Wilmington, Del.
shares
Oct.
13.
offered
for
each
seven
for
Oct.
14
repay
bank loans.
of one share of each class of stock at
$28 per unit;
25,000 shares of common stock are to be offered for
subscription by stockholders of record Sept. 21 at $6.25
share; and the remaining 25,000 shares of
per
stock
common
to be offered
publicly at $7 per share. Proceeds
—For construction of pipe line system and
working cap¬
ital.
Office—Las Vegas, Nev.
Underwriter—The First
California Co., Inc., San Francisco, Calif.
are
• New
England Gas & Electric Ass'n
Sept. 2 filed 200,096 common shares of beneficial interest
(par $8) being offered for subscription by common
stockholders of record Sept. 29,. 1953, on the basis of one
new
share for each 10 shares held (with an oversub¬
scription privilege). Rights will expire on Oct. 16. Price
per share.
Proceeds—To retire bank loans, and
—$13.75
increase investments in subsidiary, including Worcester
Gas Light Co.
New York.
Dealer-Manager—The First Boston Corp.,
New Mexico-San Juan Natural Gas Co.
at
shares held;
The remaining 100,000 shares
employees. Price—To be set by com¬
Proceeds—To
Nevada Natural Gas Pipe Line Co.
(10/13)
Sept. 21 filed 25,000 shrares of $1.50 cumulative preferred
stock
(par $21) and 75,000 shares of common stock
(par $1). Of thesd shares, all of the preferred stock and
25,000 shares of common stock are to be offered in units
sub¬
Oct. 29.
on
to be offered to
pany
share
new
be
to
are
stockholders of record
common
one
rights to expire
are
Under¬
writers—Blyth & Co., Inc., The First Boston Corp. and
C. Langley & Co., all of New York.
Gray Manufacturing Co., Hartford, Conn.
May 1 filed 55,313 shares of capital stock (par $5) to be
offered for subscription by stockholders*, on the basis
Price—To
$30
the
•
Long Island Lighting Co. (10/14)
Sept. 24 filed 785,648 shares of common stock (par $10),
—
share for each four, shares held.
and
par),
May 8 filed 600,000 -shares of common stock (par 5 cents)
to be offered for subscription by common stockholders of
record May 8 on a share-for-share basis "as a specula¬
tion." Price—To be supplied by amendment. Proceeds—
For expansion program. Underwriter—None.
Underwriter—None.
new
class
Lone Star Sulphur
—
one
(no
common
each
None.
common
of
stock
remaining 5,100
shares are to be offered at $1 per share tQ stockholders
and $11 to public. Proceeds—For working
capital. Office
—1309 Sumter Street,/ Columbia, S. C.
Underwriter—
will terminate on Dec. 7,
of each class of stock.
Office—3815 North Santa Fe
of
holders
to acceptance of 80%
City; Okla.
Co., of New York, and
Co., of Chicago, 111.
common
share
Oct.
stores.
&
shares of the
for each 2.0227
share of General Shoe
one
which
Offer,
or
Proceeds—To Roy A. Kropp, President.
if Life Insurance Co. of South Carolina
Sept. 28
(letter of notification) 4,900 shares of 5%
cumulative preferred stock (par $10) and 10,000 shares
change for shares of stock of Berland Shoe Stores, Inc.
0.54253
share).
Sincere
stock, series B .(stated value $100 per share) and 139,742
shares of common stock (par $1) to be offered in ex¬
on
per
Underwriters—L. D. Sherman &
Sept. 21 (letter of notification) 748,000 shares of common
stock (par 10 cents).
Price—40 cents per share. Pro¬
ceeds—To develop and maintain leases.
Office—2135
Gold Avenue, Albuquerque, N1.
Mex.
Underwriter —
Hunter Securities Corp., New York.
W.
Lunn
.
Sept.
Laminates, Inc.
23
(letter
stock
mon
of
notification)
(par 25
cents),
75,000
shares
of
represented
by 75,000 war¬
rants presently outstanding.
Price—$2 per share net to
company.
Proceeds — For working capital.
Office —
Huntington, N. Y. Underwriters—S. D. Fuller & Co. and
Vermilye Brothers, both of New York.
McCarthy
12,
1952
(par
25
cents).-
filed
10,000,000 shares of
Price—$2 per share.
common
stock
Proceeds—For
drilling of exploratory wells, acquisition of leases and
for
general
Christie
corporate
notes
to
b§ offered principally to the company's stock¬
holders, employees and associates. Price — At par (in
units of $250 each). Proceeds—For manufacture and sale
of
a
gearless
new
indicator.
Poughkeepsie, N. Y.
Office—253
purposes.
Undertaker—B.
V.
Mansion
St.,
Underwriter—None.
North Idaho Mines, Inc.,
(Glenn), Inc.
June
if Nilsson Gage Co.
Sept. 30 (letter of notification) $250,000 of five-year 7%
com¬
Kellogg, Ida.
July 31
(letter of notification) 400 shares of common
stock (no par).
Price—$125 per share. Proceeds—For
exploration. Address—Box 298, Kellogg, Idaho. Under¬
writer—Robert G. Sparling, Seattle, Wash.
t
S
♦
"
'
*
Sept. 25 filed 100,000 shares of common stock to be of¬
fered for subscription by common stockholders of record
Co., Houston, Texas. Dealer Relations Rep¬
resentative—George A. Searight, 115 Broadway, New
York-6, N. Y. Telephone BArclay 7-8448. Offering—
Northern Illinois Corp., DeKalb, III.
Sept. 4 (letter of notification) ,12,500 shares of $1.50
cumulative preferred stock (no par), being offered to
Oct.-5 in ratio of
date indefinite.
certain company stockholders for
Electric
Price—At par
pansion.
one
($20
Co.,
new
Ltd.
share for each 5Vz shares held.
share).
per
Proceeds—For plant ex¬
Underwriter—None.
>
Hedges Diesel, Inc. (N. J.)
Aug. 24 (letter of notification) 10,000 shares of Class A
stock
common
and
20,000 shares of Class B common
Price—At par ($10 per share). Proceeds—To erect
plant and for new equipment, and working capital. Of¬
fice—Marlton, N. J. Underwriters—None.
stock.
Hunter Creek Mining Co., Wallace, Idaho
(letter of notification) 160,000 shares of
June 2
stock.
°
common
Price—25
cents per share.
Proceeds—For oper¬
Office — 509 Bank St., Wallace, Idaho.
Underwriter—Mine Financing, Inc., Spokane, Wash.
ating capital.
Ionics,
Inc., Cambridge, Mass.
June 30 filed
131,784 shares of common stock (par $1).
be supplied by amendment (between $8 and
Price—To
$9 per share).
Proceeds—To pay mortgage debt and for
equipment. Business — Research and development and
subsequent commercial exploitation in the field of ion
exchange chemistry. Underwriter—Lee Higginson Corp.,
New York and Boston (Mass.). Offering—Date indefinite.
if Israel
Oct/1
Enterprises,
filed
18,800
Inc.,
shares
of
New York
common
stock.
•
&
Price—At
($100 per share). Proceeds—For investment in exist¬
ing industrial enterprises in Israel. Underwriter—None.
■
Aug. 20 filed 45,912 shares of common stock (par $12.50)
being offered in exchange for 57,389 shares of common
stock (no par) of Fitz Simons & Connell
Dredge & Dock
Co. on an eight-for-ten basis. It is proposed to
acquire
not less than 80%
of said Fitz Simons & Connell shares.
Offer will expire on Oct. 10. Over 80%
stock has been deposited to Oct. 5.
of Fitz Simons
Michigan Consolidated Gas Co.
May 15 filed $20,000,000 of first mortgage bonds due 1978,
of bonds, plus proceeds from sale
of 215,000 shares of common stock (par $14) to American
Natural Gas Co., parent, for $3,010,000, to be used to
repay bank loans and for construction program.
Bids—
A group headed jointly by
Halsey, Stuart & Co., Inc.,
Harriman Ripley & Co., Inc. and Union Securities Corp.
entered the only bid on June 15 for the securities—
100.125 for 5s.
This bid was rejected.
Reoffering had
been planned at 101.875 to yield 4.87%.
July 6 com¬
pany sought SEC authority to borrow $20,000,000 from
banks on 3&% notes pending permanent financing which
is presently being given consideration.
Proceeds—From sale
•
par
-
Merritt-Chapman & Scott Corp., New York
Miracle
of
common
Hinge, Inc., Monticello, N. Y. (10/14)
Sept. 14 (letter of notification) 200,000 shares of 7%
cumulative preferred stock (par $1) and 200,000 shareSy
stock (par one cent)
to be offered in units of
if K-O-T Oil Corp., Ardmore, Okla.
Sept. 28 (letter of notification) 299,500 shares of com¬
mon stock (par one
cent). Pricce—$1 per share. Proceeds
Price—$1.10 per unit.
plant improvements, payment of debt,
inventory and working capital. Underwriter — Walter
—To complete wells. Office—504 Gilbert
Bldg., Ardmore,
Okla. Underwriter—Petroluem Finance Corp., Oklahoma
Aronheim, New York.
City, Okla.
Kpnsas Gas & Electric Co. (10/13-14)
Sept.-11 filed 50,000 shares of preferred stock (par $100).
Price—To be supplied by amendment. Proceeds—To re¬
pay bank loans and for new construction.
Underwriters
—Union
Securities
Corp.,
New
York.
May
be
placed
privately.
one
share
Proceeds
of each class
—
of stock.
For
• Mon-Dak
Oil, Ltd., Sidney, Mont.
Sept. 25 filed 7,800 shares of class A voting common stock
(no par) and 685,816 shares of class B non-voting com¬
mon stock
(no par). Of the class B shares, 172,894 will
,
have been sold the moment the offering is approved and
the
remaining 512,922 will be sold following approval.
Price—$1 per share. Proceeds—For oil and gas leases
and to repay notes.
Underwriter—None.
struction. program.
Motion Picture Laboratories, Inc.
Sept. 21 (letter of notification) $50,000 of first chattel
mortgage bonds dated Oct. 1, 1953, and 5,000 shares of
common stock (par $1) to be offered in units of a $1,000
competitive
bond and
Kansas Gas & Electric Co. (10/14)
Sept. ll filed $10,000,000 first mortgage bonds due Oct.
1, 1983. Proceeds—To reduce bank loans and for con¬
Underwriters—To be determined by
bidding. Probable bidders: Halsey,, Stuart
& Co. Inc.; Kuhn, Loeb &
Co.; Blyth & Co., Inc. and The
First Boston Corp. (jointly); Kidder,
Peabody & Co. and
Merrill
Lynch, Pierce, Fenner & Beane
Forgan & Co. and Goldman, Sachs & Co.
Securities Corp. and Stone & Webster
(jointly); Harriman Ripley & Co., Inc.
ceived
up
New York,
to
noon
N. Y.
-
(EST)
on
Oct.
(jointly); Glore,
/ jointly); Union
Securities Corp.
Bids—To be
14, at 2
Rector
Price
$1,100 per unit.
Proceeds—For equipment. Office—1830 Exchange Bldg.,
Memphis, Tenn. Underwriter — Gordon Meeks & Co.,
Memphis, Tenn.
re¬
to
Kay Jewelry Stores, Inc., Washington, D. C.
Sept. 28 filed 672,746 shares of capital stock (par $1) to
be offered in exchange for preferred and common stocks
of 71 store corporations which
operate 83 retail credit
Underwriter—None.
Kenwell Oils & Mines Ltd.,
Toronto, Canada
Aug. 20 filed 1,400,000 shares of common stock (par $1).
Price
To be supplied by amendment.
Proceeds-rr-For
Working capital and general corporate purposes. Under¬
writer—To be supplied by amendment.
—
Kropp Forge Co., Cicero, III.
Sept. 15 (letter of notification) 12,890 shares of common
stock (par
33J& cents). Price—At market (estimated at
promote inventions of members. Office—337 Clinton
St., New Britain, Conn. Underwriter—None.
National
Life
&
Casualty
Insurance Co.,
Phoenix, Ariz.
Sept. 28 filed 900,000 shares of common stock (par $1)
to be offered to charter policyholders at $1.91 per share;
and
to
policyholders as may elect to apply their
coupon values to the purchase of stock at the initial sub¬
scription price of $3.93 per share. Proceeds—For expan¬
new
sion of insurance activities.
derwriter—None.
Ohmart
Sept.
24
Underwriter—None.
com¬
stock
Underwriter—Estabrook & Co., New York and
purposes.
Boston.
if Oil Enterprises, Inc., Detroit, Mich.
Sept. 29 (letter of notification) 275,000 shares of
mon
stock. Price—At par
($1
com¬
share). Proceeds—For
per
leases and working capital. Office—550
Lakepointe
Ave.,
Detroit, Mich. Underwriter—None.
Orange Community Hotel Co., Orange, Texas
Sept. 14 filed 8,333 shares of capital stock (par $20) and
8,333 registered 4% debentures due Jan. 1, 1984 of $100
each to be offered in units of
share of stock and
one
$100 debenture. Price—$120 per unit. Proceeds—To
one
con¬
struct
and equip hotel building.
Underwriter — None.
(Subscriptions to 4,949 shares of stock and 4,949 deben¬
tures are held by a group of citizens of
Orange formed
under the auspices of the Orange Chamber of Com¬
merce.)
if Orradio Industries, Inc., Opelika,
Sept. 28 (letter of notification) 149,500
mon stock (par 25
cents). Price—$2 per
—For working capital.
Office—Marvyn
Ala.
Ala.
shares of com¬
share. Proceeds
Road, Opelika,
Underwriter—S. D. Fuller & Co., New York.
Overland Oil,
Inc., Denver, Colo.
600,000 shares of common stock (par 100)
to be offered for subscription by stockholders (except
the original incorporators) at rate of one new share for
June 10 filed
each two shares held.
ceeds—For
stock
June
9
(letter
(no par)
29
held.
•
of
Chemical
Co., Inc.
notification) 2,000 shares
at rate of
of
capital
one
new
share for
each
five
shares
share.
Proceeds—For working
Office—Lock Haven, Pa.
Underwriter—None.
per
Petrolane Gas Co.,
Sept.
Pro¬
Underwriter—None.
to be offered to stockholders of record
Price—$10
capital.
Price—40 cents per share.
working capital.
Pedlow-Nease
July
Inc.
(10/14)
15 filed $400,000 of 6%
sinking fund debentures,
series A, due Oct. 1, 1968
(with common stock purchase
warrants attached) and 75,000 shares of common stock
(par $1). Price—At 100% of principal amount for the
debentures
and
$2
per
To repay notes and
share for the stock. Proceeds—
for working capital. Business—Dis¬
tribution of liquefied
equipment.
petroleum
Office—New
gas,
Orleans,
W. Brooks & Co., New York.
tanks and related
La.
Underwriter—P.
Planter's
Peat Corp., Coral Gables, Fla.
(letter of notification) 100,000 shares
cumulative preferred
stock
(par $2.50) and
Aug.
6
shares of
units
per
if Nekoosa-Edwards Paper Co.
Sept. 28 (letter of notification) 1,498 shares of common
stock (par $25) to be offered for subscription by em¬
ployees. Price—$25.50 per share. Proceeds—For working
capital. Office—Port Edwards, Wis. Underwriter—None.
Corp., Cincinnati, O.
notification) 13,500 shares of
(letter of
(par $1) to be offered first to common stock¬
holders, then to general public. Price—$16.50 per share.
Proceeds—For equipment and other general corporate
mon
—
St.,
-
i
shares of stock.
-^Mutual Association of Idea Submitters, Inc.
Sept. 21 (letter of notification) $300,000 of Association
memberships at $15 per member per year. Proceeds—
;
jjewelry stores.
100
a, 30-day period from
Sept. 21. Price—$24 per share. Proceeds—For working
capital. Office—112 E. Locust Street DeKalb, 111. Un¬
of
common
one
share
of 6%
100,000
stock (par 50 cents) to be offered in
of
each
class
of
stock.
Price—$2.50
unit. Proceeds—To liquidate liabilities and for work¬
ing capital. Office—220 Miracle Mile, Coral Gables, Fla.
peat for fertilizer. Underwriter—
Frank L. Edenfield & Co., Miami, Fla.
Business—To process
Continued
on
page
44
44
The Commercial and Financial Chronicle... Thursday,
(1364)
•
Continued from page 43
/
writer—None.
^Public Service Electric & Gas Co.
(10/20)
Sept. 30 filed 800,000 shares of common stock (no par).
Price—To be supplied by amendment. Proceeds—To re¬
at rate of
be
bonds
Oct.
due
for
and
1, 1983.
and
United
Stuart
be
Park
Co.
&
Underwriters—To
fund
deter¬
Loeb
Co.
&
Lehman
and
(jointly); Morgan Standey & Co. and Drexel
(jointly); The First Boston Corp. Bids—Expected
up to 11 a.m.
(EST) on Oct. 27 at 80
Place, Newark, N. J.
received
States Finishing Co.
Sept. 23 filed 240,000 shares of common stock
ment. Probable bidders:
Boston
Stone
Corp.
offer
Corp.;
Brothers,
Proceeds—For
Office—1301
Elm
Angeles, Calif.
May 7
ferred
filed 40,000 shares of cumulative preferred stock
common
for
each
bank loans and for
construction.
new
stock
■
+,
Southern New England Telephone Co.
held;
sights will expire on Oct. 23.
Price—At par ($25 per
■share). Proceeds—To repay advances from American
.Telephone & Telegraph Co. Underwriter—None.
Sta-Tex OilCo.:
Price—$t
per
share.
Street, New York City.
State Fire &
share.
None.
Virginia Pulp stock for each Hinde & Dauch
The offer will expire on Nov. 18. Underwriter—
'
•'
t
Proceeds—
<■'"
t
2251mon stock <par $!)• Price—$3.75
per share/ Office^
,£268 N. E. 2nd Ave., Miami, Fla. Proceeds—To
increase
capital and surplus., for expansion and to rfdire r-ertain
.preferred shares. Underwriter—Floyd D. Cerf Jr. 'Co.
f
common
each
Casualty Co., Miami, Fla.
Inc.,.Chicago, 111.,/and Miami, Fla.'
subscription
by
•
Sept. 10 (letter of notification) 80,000 shares of class B
'
,
Western Massachusetts Companies**- i-h
■
Sept. 17 filed 128,316 shares ofcommon stock (no par)r
of which 122,316 shares are
being offered for:*
common
R. Gilman, 20
-
r
r
from
used to help
(10/8)
received
Manufacturing Co.
was
750,000
reported company planned to offer and
additional
shares
of
common
stock.
Pro¬
purchase
No matter how you
•,.
.
•
>
look at it...
■
.
Some
,
stockholders at rate of
eight shares held
on
one
new*
share for
only from the
standpoint of
quality; others think they 'h
.
have
to
they're faced with
At
a
rush job.
Sony. quality is consistently;
maintained
your
As
while
deadline.-
meeting;
*
specialists in financial,
corporate and legal printings
handle design, panting;
(both letterpress and offset),
binding: mailing.
we
Our service is
complete;
/scares are/to be sold^to employees. Subscription: rights
expire
on
p(jt.* 21;. Prtcte—$29.66
per
shares Proceeds—^
PRINTING CO., Inc.
"
*
:&
go,,>oth; qf >-ewYork4.; '
Y
,*3
Y^',
'• i*4 it
-i-'U"'";..
...
'
'*■
■
Pt
♦
-
compromise when -L
Oct. 5.>The remaining 6,009
To be loaned to Western Massachusetts Electric- Co*, a
'subsidiary, to bfe usecf/to retire up to $4,000,000- of outStanding bank, loans incurred for » construction purposes.
Uhderwriters—The First Boston ;Corp„/ar:d White Weld
■/
j,
people look at printing
wOf West
»c;:""-r
-Jot drilling costs. Underwriter—Arthur
The
financing.
•
300,000 shares of
debenture
Consolidated Textile Co., Inc., is opposing the proposed
Of¬
to be offered in exchange for common, stock. (par $19)
of Hinde & Dauch Paper Co. on the basis of XVz shares
•
Oct. 2 (letter Of
notification)
stock (par five cents);
proposed
will be around $60,000,000.
properties in the South.
Under¬
writers—Probably Coffin & Burr, Inc., Boston, Mass.,
and The First Boston Corp., New York.
Plan Opposed-
West Virginia Pulp & Paper Co.
Sept. 28 filed:1,270,344: shares of cbmmon stock (par $5)
'Sept* 15 filed 400,000 shares of capital stock, to be offered
ifor subscription by stockholders of record Oct. 2 in the
ratio of one new share-for each 10 shares then
debt
be
be
ceeds—To
—Together with other funds, to be used to build pipe¬
line. Underwriters— White, Weld & Co. and Union Se¬
curities Corp., both of New York. Offering—Postponed
indefinitely, i
—
♦
Bates
sell
West Coast Pipe Line Co., Dallas, Tex,
—
will
June 25 it
Nov. 20 filed 1,125,000 shares of common stock (par 50
cents). Price—To be supplied by amendment. Proceeds
Aug. 20 (letter of notification) 1,000,0Q0 shares of com¬
mon stock.
Price
30 cents per share. Proceeds—For
exploration. Office—West 909 Sprague Ave.,
Spokane,
Wash. Underwriter
Mines Financing, Inc., Spokane,
that
announced
year
by the company at 2 Wall St.,
5, N. Y., up to noon (EST) on Oct. 8 for the
purchase from it of $1,500,000 equipment trust certifi¬
cates, series FF, to be due in 15 equal payments of $100,000 each on Dec. 1, from 1953 to 1967, inclusive. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Salomon Bros.
& Hutzler; Kidder, Peabody & Co.
To be
Corp., both of New York.
fering—Postponed indefinitely.
was
this
New York
-
Co. and Union Securities
Silver Dollar Exploration &
Development Co.
'
—
common stock
Smith, Barney &
placed privately.
was
Baltimdre & Ohio RR.
Bids
supplied by amend¬
ment. Proceeds—From sale of units and 1,125,000 addi¬
tional shares of common stock and private sale of
$55,000,000 first mortgage bonds, to be used to build a 1,030
mile crude oil pipeline. Underwriters—White, Weld &
Meeting—Stock¬
authorizing debentures.
Wash.
Price
Underwriters—For
Securities Corp. and
Aug. 11 it was reported company's common stock (held
by Southern Union Gas Co.) may be offered to stock¬
holders of the parent company on a pro rata basis under
a proposed divestment plan.
15, 1964, and 580,000 shares of common stock (par 50
cents) to be offered in units of one $50 debenture and
share of stock.
to
Agtec Oil & Gda Co.
re¬
Nov. 20 filed $29,000,000 12-year 6% debentures due Dec.
jprincipal amount.
working capital. Underwriter—None.
on
Puget
West Coast Pipe Line Co., Dallas, Tex.
one
stock
$75,000,000 to $150,000,000.
Pro¬
pay for a $100,000,000 con¬
struction program for 1953. Underwriters—Smith, Bar¬
ney & Co. may head group.
Proceeds—For equipment. Office—
Street, Fort Worth Texas. Underwriter
*
it
later
ceeds—To
share.
v
common
$3,000,000. Proceeds—For
Refining Co.
authorized
share. Underwriter—
—None.
one $100 debenture for
stock held. Price—100% of
Proceeds—To repay loans and for
9
per
1400 East Berry
common
Oct.
per
27
sufficient
exact nature and timing of the financing are still to be
determined.
Stockholders voted May 5 to increase the
Jet Services, Inc.
(letter of notification) 13,071 shares of common
(no par) being offered for subscription by stock¬
—$17.50
stockholders at rate of
vote
March
holders of record Sept. 10 on the basis of one new share
for each 12 shares
held; rights to expire on Oct. 13. Price
Segal Lock & Hardware Co., Inc., N. Y.
-Sept. 4 filed $975,000 of five-year 6% convertible sink¬
ing fund debentures due Oct. 1, 1958, to be offered to
to
Atlantic
Welex
and producing properties, to prosipect for oil and gas and to develop and operate produc¬
ing properties.
Office—Mt. Vernon, 111.
Underwriter—
H; Rothchild & Co., New York.
Offering—Indefintely
.'postponed.
common
$27
of
estimated
Previous bond issue
Co.
Sept. 8
Under¬
^leaseholds, royalties
each 250 shares of
of
basis
additional
be Union
may
None.
Schlafly Nolan Oil Co., Inc.
*
of
l-for-10
a
an
issue
share to holders who do not elect to
ceive cash at the rate
(10/27)
March 25 filed 150,000 shares of common stock (par 250).
Price—$4 per share.
Proceeds—To purchase and sell
Broad
share
one-half
common
place privately $20,000,000 of 20-year
bonds.
to
construction program.
filed
and
Sound
on
raise
Underwriter—None.
,
writer—Dean Witter & Co., San Francisco, Calif.
holders
ers
1,088,940 shares of $1.28 cumulative con¬
vertible preferred stock (par $25) and 1,088,939 shares of
common stock
(no par) to be issued in connection with
the proposed merger into company of Puget Soiind Pow¬
er & Light Co. on the basis of one-half share of
pre¬
April 23 filed 165,000 shares of common stock (par $1).
IPclce— $5 per share.
Proceeds—* To acquire stock of
jNeb-Tex Oil Co.. to pay loans and for working capital.
'Office—Northwood, Iowa. Underwriter—Sills, Fairman
■3c Harris of Chicago, 111. Registration statement may be
To repay
bankers
Corp., both of New York.
Company has arranged through
—
City Electric Co.
England, President, announced that the com¬
pany plans to issue and sell early next year about $4,000,000 of new bonds and make an offering to stockhold¬
Corp., Dallas, Tex.
St., Dallas, Tex.
Placement
• Atlantic
Washington Water Power Co.
Production Co.
(par $25—convertible into common stock from Jan. 1,
1954).i Price—To be supplied by amendment. Proceeds—
Underwriters—W. C. Langley
The First Boston
and
Oct. 5 B. L.
working
Finance
Inc.
collateral trust sinking fund
(letter of notification) 29,000 shares of 70-cent
cumulative preferred stock (no par) and 29,000 shares
of common stock (par 15 cents) to be offered in units
of one share of preferred and one share of common stock.
Price—$10.15 per unit. Proceeds—For working capital.
Lester, Ryons & Co., Los
revised.
Co.
Private
Sept. 21
(par $1). Price—At market (estimated at $13 per
share). Proceeds—To Fred H. Roh'r, who is the selling
Oct. 5
upon
capital.
Office—3460 Wilshire
Blvd., Los Angeles, Calif. Underwriter—None.
stock
(Calif.)
American Water Works Co.,
Sept. 25 it was announced company plans to register soon
public offering an issue of about 200,000 shares of
for
&
Universal
■if San Jose Water Works
holders.
preferred stock (par $25).
Oct. 14.
-Saint Anne's Oil
19 directors
same
if Rohr Aircraft Corp., Chula Vista, Calif.
Sept. 28 (letter of notification) 3,800 shares of common
—
(no par)
Universal Finance Corp., Los Angeles, Calif.
July 27 (letter of notification) 12,000 shares of 6% cumu¬
lative preferred stock. Price — At par ($25 per share).
Pierce, Fenner & Beane; Estabrook &
Bids—Expected to be received up to 11 a.m. (EST)
Underwriter
Telephone & Telegraph Co.
voted to recommend to stockholders
that they authorize a new issue of convertible debentures
in an amount not to exceed $625,000,000 at a meeting to
be held on Oct. 14.
Price—Expected at par. Proceeds—
For advances to subsidiary and associated companies.
Underwriter—None.
Offering—To be made to stock¬
American
Aug.
its acceptance by the holders
Aspinook shares. The stockholders
Finishing company will vote Oct. 13 on approving
the above proposal.
Lynch,
stockholder.
Casualty Co.
registration is planned
stated
was
of at least 80% of the
Bear, Stearns & Co. and A. C. Allyn & Co., Inc. (jointly);
Merrill
conditioned
it
7
of the
new
by amend¬
Lehman
is
American Fidelity &
Underwriter—Geyer & Co., New York.
exchange for the 15,000 outstanding com¬
shares of Aspinook Corp. on the basis of 16 shares
of Finishing stock for each share of Aspinook stock. The
Halsey, Stuart & Co, Inc.; First
Bros.. & Hutzler (jointly);
Securities
Webster
&
(11/5)
for about
Oct. 16 of 150,000 shares of convertible preferred stock
(par $5) to be offered for subscription by common stock¬
holders on a share-for-share basis, about Nov. 5; rights
to
expire about Nov. 20.
Certain stockholders have
waived their rights to purchase the new shares. Price
To be named later.
Proceeds—For working capital.
•
Oct.
to be offered in
Salomon
and
Prospective Offerings
mon
Light & Power Co. (10/14)
Sept. 17 filed $8,000,000 first mortgage bonds, series E,
supplied
sub¬
United
Rockland
Underwriters—To be
a
'
Colo.
'
construction.
Co.,
Line
Mining & Leasing Corp.
(letter of notification) 1,700,000 shares of com¬
mon stock.
Price—At par (10 cents per share). Proceeds
—For mining operations, equipment, etc. Office—Central
City, Colo. Underwriter—R. L. Hughes & Co., Denver,
Lynch, Pierce, Fenner & Beane, New York.
loans and for
Pipe
United
Light & Power Co.
Sept. 17 filed 210,721 shares of common stock (par $10)
being offered for subscription by common stockholders
of record Oct. 7 on the basis pf one new share for each
seven shares held (with an oversubscription priviledge),
eights to expire on Oct. 21. Price—$10.20 per share.
"Proceeds—To repay bank loans. Underwriter—Merrill
retire bank
Gas
Aug. 26
Rockland
Proceeds—To
United
of
Meeks &
Bldg., Solon, O. Underwriter—Gordon
Co., Memphis, Tenn.
Boston Corp., Harriman Ripley & Co., Inc. and
Goldman, Sachs & Co. (jointly). Bids—Expected to be
received up to noon (EST) on Oct. 26.
writer—None.
1983,
debentures
18
Center
First
if Rock Creek Tungsten Co., Missoula, Mont.
Sept. 28 (letter of notification) 15,000 shares of common
stock. Price—At par ($1 per share). Proceeds—For oper¬
ating capital. Address—Box 1364, Missoula, Mont. Under¬
'-if
(letter of notification) 126 shares of common
stock
(no par). Price—$750 per share. Proceeds—For
new
construction and working capital. Office—Solon
(10/26)
Corp.
74,350 common stock purchase
units of 100 shares of stock
America
Zirconium Corp. of
Sept.
Canada.
sidiary, to provide it with funds for construction; and to
replenish the treasury of United Gas Corp. and for other
general corporate purposes, including advances of such
additional funds as may be required by Union Producing
Co., another subsidiary. Underwriters — To be deter¬
mined by competitive bidding.
Probable bidders: Hal¬
sey, Stuart & Co. Inc.; Morgan Stanley & Co., White,
Weld & C«vand Equitable Securities Corp. (jointly); The
bidding. Probable bidders: Halsey,
Kuhn,
Inc.;
be
Gas
in
offered
be
to
warrant will entitle the holder to
purchase one share of stock at $1.25 per share). Price—
$125 per unit.
Proceeds—To make loans. Office—55
Hilton Ave., Garden City, L. I., N. Y. Underwriter—None.
indebtednesss,
in
warrants
and 50 warrants (each
by amendment.
other
Sept. 23 filed $25,000,000 of sinking fund debentures due
1973.
Proceeds—To purchase $10,000,000 of 5% sinking
Proceeds—To repay bank loans
construction.
new
Brothers
& Co.
on
share for each share held. Price—To
underwriters for distribution
Underwriters—Expected to be Morgan Stan¬
mined by competitive
Co.
new
Proceeds—To repay bank
for further exploration
of properties and for additional working capital. Under¬
writers—Hamlin & Lunt, Buffalo, N. Y., and Allen &
Co., New York. W. C. Pitfield & Co., Ltd., of Montreal,
^Canada, has agreed to purchase 50,000 shares from the
if Public Service Electric & Gas Co. (10/27)
Sept. 30 filed $30,000,000 of first and refunding mortgage
due
one
supplied
loans
ley & Co., Brexel & Co. and Glore, Forgan & Co.
•
stock (par five cents) and
148,700 shares of common
Sept. 4 (letter of notification)
to
bank loans and for additions and improvements to
pay
property.
Working Capital, Inc.
Aug. 31 filed
Prugb Petroleum Co., Tulsa, Okla.
Aug. 28 (letter of notification) 35,000 shares of common
stock (par $5). Price—$8.50 per share. Proceeds—To pay
loans.
Office—907 Kennedy Bldg., Tulsa, Okla. Under¬
to
Strategic Materials Corp., Buffalo, N. Y. (10/13)
198,500 shares of common stock (par $1)
be offered for subscription by common stockholders
October 8, 1953
811 SOUTH ST., IKW TOOK 38, ft. V.
-
f■>.:'
Volume 178
Number 5262
The Commercial and Financial Chronicle
...
(1365)
-Blair Holdings Corp.
June 24 it was announced company plans to issue and
sell publicly $2,000,000 of convertible debentures. Pro¬
ceeds
For development of Stanwell Oil & Gas
Ltd.,
newly acquired subsidiary. Underwriters—Blair, Rollins
—
& Co. Inc. and The First California
Co.
plans sale later this
of $10,000,000 common stock (in addition to $10,000,000 of 1st & gen. mtge. bonds sold March 10, 1953),
after distribution by New England Public Service Co. of
its holdings of Central Maine Power Co. common stock
Probable bidders: Blyth & Co., Inc. and Kidder,
Peabody
3c Co. (jointly); Coffin & Burr, Inc.; A. C.
Allyn & Co.,
Inc. and Bear, Stearns & Co.
(jointly); Harriman Ripley
3c Co., Inc.
Central-Penn
National
Bank
of
Phila.
Sept. 28 the Bank offered to its stockholders of record
Sept. 24 the right to subscribe for
shares
basis;
an
of capital stock
(par $10)
rights to expire Oct.
13.
additional
on
a
125,000
one-for-three
Price
$30
—
per
share. Proceeds—To increase capital and
surplus. Under¬
writer—Stroud & Co., Inc., Philadelphia, Pa.
Central Power & Light Co.
it was reported company may issue and sell
60,000 shares of new preferred stock. Underwriters—To
be determined by competitive bidding. Probable bidders:
Stone & Webster Securities Corp.; Lehman Brother!
March 2
•
t
'and Glore, Forgan & Co. (jointly); Blyth & Co.,
Inc.,
Harriman Ripley & Co., Inc. and Smith,
Barney & Co.
(jointly>; Salomon Bros. & Hutzler.
Columbia Gas System,
s
f
April 6 it
announced
was
Inc.
competitive
Stuart & Co. Inc.;
Halsey,
was
stock may be
Dillon, Read & Co. Inc., New York.
bonds, underwriters may be determined by competi¬
tive bidding. Probable bidders for
$10,000,000 of bonds:
Halsey, Stuart & Co. Inc.; White, Weld & Co.; Salomon
mon
For
&
Hutzler; Dillon, Read & Co.; Union Securities
Glore, Forgan & Co.
(jointly); Lehman
Brothers; Lee Higginson Corp. and Carl M. Loeb,
Rhoades & Co. (jointly).
Corp.
-
•
Delaware Power & Light Co.
was announced this
company plans offering to
stockholders of record Nov. 25 of
232,520 addi¬
Oct. 5 it
tional shares of
Underwriters
common
—
If
stock
on
determined
a
one-for-seven basis.
b(y competitive bidding,
bidders may be: W. C. Langley & Co. and Union Securi¬
ties Corp. (jointly);
White, Weld & Co. and Shields &
Co. (jointly); Lehman
Brothers; Harriman Ripley & Co.
Inc.; Blyth & Co., Inc.; Kidder, Peabody & Co. and
Merrill Lynch, Pierce, Fenner & Beane
(jointly). Price
—May be set by directors, with bidders to name their
underwriting compensation. Registration—Expected late
.
in
October.
late
—$43
New
Bids—Tentatively expected to be
in November.
received
Aug. 24
interest rate not exceeding
for subscription by
offered
stockholders. Proceeds—To retire bank loans and to meet
construction costs.
Meeting—Stockholders on
authorized the
-
debentures.
new
April 14
Underwriter—None.
if Dixie Cup Corp
'Oct. 2 it
.
was
be
stock.
the
creation
of
& Weeks.
,
Eastern
.
shares
.
•:
•
of
which
will
vote
Nov.
3
issue
new
preferred
& Co.; Hornblower
?
•
•
'"*< .'*v
Industries, Inc.
Aug. 20 stockholders voted to
-
a
Underwriters—Glore,, Forgan
"
-
stockholders
create
an
issue of 200,000
are
preferred
stock
(par $10),
100,0.00
shares
Registration—Expected in
near
-*
bidders:
bidding. Prob¬
Halsey, Stuart & Co. Inc.; Estabrook &
Co. and Stone & Webster Securities
Corp. (jointly);
First Boston Corp.,
White, Weld & Co. and
The
Kidder, Pea¬
body & Co. (jointly); Glore, Forgan & Co. and Harriman
Ripley & Co. Inc. (jointly).
* Erie RR.
Oct. 2 it
Co. of New
the
$5,400,000
to
be
Stuart & Co.
Essex
Sept.
reported company plans to issue and sell
trust certificates. Bids—Expected
equipment
received
on
Dec.
17.*
Probable
bidders:
Halsey,
Inc.; Salomon Bros. & Hutzler.
County Electric Co.
it was reported company
.plans issuance and
$4,000,000 30-year first mortgage bonds. Under¬
writers
May be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Lehman
Brothers, Merrill Lynch, Pierce, Fenner & Beane and
sale
21
of
—
Union Securities
•
-
Corp. (jointly).
Florida Power Corp.
Sept. 11 it was announced that the company plans to sell
approximately $10,000,000 first mortgage bonds due 1983
; the latter part of this year. Proceeds—To
pay off bank
borrowings and for construction purposes. Underwriter
of
97,030.95
Central
stock
of
Central
Vermont
expected to be received
ed about Oct. 30.
from the date of such
acquisition (subject to its right to
apply for additional time to dispose of such
securities).
as
<
-
sey,
Brothers; Kidder, Peabody & Co.
Narragansett Electric Co.
•
Sept. 21
Employees Corp.
(11/24)
Goodwin, President, announced that
company soon plans to
of $500,000 10-year 4%
register with the SEC
convertible
(convertible into
stock
at the
preferred
per share), to be offered for
subscription by com¬
stockholders of record Nov. 17 at the rate of
$100
of debentures for each 15
shares held; rights to
expire
on Dec. 9.
It is expected that
subscription warrants will
be mailed on or about Nov. 24.
Price—At par. Proceeds
—For working
capital, etc. Office
Government Em¬
ployees Insurance Bldg., Washington
5, D. C. Under¬
writer—None.
—
Connecticut
Sept. 24
P.
U.
Commission
company to issue and sell $200,000
bonds and $483,000 par value of
of
common
latter first
record
mortgage
stock (the
per
reported
was
nancing to provide
company plans some
funds for its construction
new
Co.
sell
$20,000,000'of
To
—
be
First Boston
Corp.; Kuhn, Loeb & Co.
Bids—Tentative^
is planning to issue
mortgage ' bonds. Under¬
Sept. 21 it
sale
by .competitive bidding.
of
was
about
determined
(jointly); Harriman Ripley & Co. Inc. and Glore, Forgan
& Co, (jointly); The First Boston
Corp.; Kuhn, Loeb &
Co. Offering—Expected in November.
&
issue
was
and
be
offered
in
Northern Natural
and
C.
..
was
share.
plant.
Northwest Natural Gas Co.
company will offer 400,000
common stock to its stockholders
at
shares for each share held. Price—$5
Prcoeeds — To help finance a new
6tock at $10 per share
Canada.
bottling
V
Sept. 23 it
Products Pipe
'
*
reported this company, a newly organized
subsidiary of Sunray Oil Corp., plans to issue and seP!
both privately and
publicly, some securities to finance
the
was
construction
of
a
475-mile
pipeline
from
Duncan
Okla., to the Memphis, Tenn., area, at a cost of $22,000000 to $25,000,000.
Underwriter—Dillon, Read & Co. Inc.
Registration—Expected in October. Offering—Probably
Milwauhtee Gas Light Co.
July 7 company sought SEC approval of a bank loan
of $9,000,000 the mature Aug.
1? J954. These borrowings,
plus retained earnings, are designed to finance expansion
pending formulation of permanent financing prior to
maturity of notes. Probable bidders for bonds: Halsey,
in November.
ic Ontario
Oct. 5 it
(Province of)
was
000,000 debentures.
"
:
'
>
f
reported that consideration is being
giv*-^
to the issuance and sale of between
&
Co. Inc.; Glore, Forgan & Co. and Lehman
(jointly); Smith, Barney & Co. and Blyth &
Co., Inc. (jointly); Kuhn, Loeb & Co.; Kidder, Peabody
& Co.; Harriman Ripley & Co. Inc.
amc
Line, Inc.
.....
Exploration Co., Inc., Houston, Tex.
April 8 it was announced company plans to issue and
sell $1,000,000 of convertible debentures.
Proceeds—To
finance development of oil properties in Ecuador. Under¬
writer—Kidder, Peabody & Co., New York.
Stuart
publicly in the United States
Underwriter—Morgan Stanley & Co., New York.
Oklahoma-Mississippi River
-
Manabi
Brothers
\.
sale of $6§000,000 of 4%% first mortgage pipeline bonds to kisurr
ance companies and other
institutional investors and $6.r
000,000 of 5% debentures and 1,400,000 shares of commer
.
new
.
plans to issue and
it was reported that this
company plana to
finance its proposed 1,300-miles
pipeline from Canada t»
the Pacific Northwest by the issuance
and
announced
Underwriter—None.
company
March 23
additional shares of
per
Co.
by competitive bidding. Probable bidders:
Halsey, Stuart
Co. Inc.; Blyth &
Co., Inc.
Brewing Co., Los Angeles, Calif.
April 18 it
Gas
announced
&
employees).
repay
Langley & Co.; Smith, Barney & Co.
Maier
was
sor^e additional debentures later this year. Proceeds
—To repay bank loans.
Underwriters—To be determined
bank loans and for new construc¬
tion. Underwriters—To be
determined by competitive
bidding. Probable bidders: Halsey, - Stuart & Co..
Inc.;
Blyth & Co., Inc. and The First Boston Corp. (jointly);
W.
Beane
Sept. 23 it
stockholders
reported that company plans issuance and
$3,000,000 bonds. Underwriters—May be
sell
announced that company this Fall
plans
an issue of about
$25,000,000 of first
October to
Oct. 28.
and Union Securities
Corp. (jointly); Lehman
Brothers; Kidder, Peabody & Co.
sell
Proceeds—To
on
by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Merrill Lynch, Pierce, Fenner
Long Island Lighting Co.
April 21 it
gen¬
North Shore Gas Co.
Probable bidders: Halsey, Stuart & Co.
Inc.; White, Weld
&
Co. and
Merrill
Lynch, Pierce, Fenner & Beane
to
com¬
$40,000,000
mortgage bonds due 1983. Proceeds—To
repay bank
and for new construction.
Underwriters—To b*
determined by competitive
bidding. Probable bidders
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.- The
company
first
issue of
an
loans
expected to be received
determined
Price—$45
Sept. 22, Earle J. Machold,
President, announced
Illinois Power Co.
writers
Oct. 15.
eral
borrow and repay $29,000,000 of
short-term loans. Final
financing details would depend on market conditions.
reported
on
oi
share for each
Proceeds—To increase capital and
surplus.
& Co., New York.
pany plans to offer and sell
approved, the financing will
$105,000,000 of bonds through 1962; $27,400,000
of preferred stock; and
$52,150,000 of common stock.
Throughout the financing period, the company would
consist of
was
held; rights to expire
share.
new
by competitive bidding
Halsey, Stuart & Co. Inc.; The Firsr
Glore, Forgan & Co. (jointly); Blytfc
& Co., Inc. and
Smith, Barney & Co. (jointly); HemphiR
Noyes & Co. and Drexel & Co.
(jointly); Kidder,; Pfeabody & Co. and Salomon Bros. & Hutzler
(jointly).
Lehman Brothers; Harriman
Ripley & Co., Inc.
Niagara Mohawk Power Corp. (10/?8)
that this company
plans to raise $184,550,000
finance construction of three
hydro-electric projects
Snake River, Idaho. If
it
one
of
—
Aug. 6, officials of Blyth & Co., Inc. and Bankers Trust
Co., New York, testified before the Federal Power Com¬
Sept. 21
the basis of
Probable bidders:
Boston Corp. and
Stuart & Co. Inc.; Kuhn, Loeb &
Co.; Union Se¬
curities Corp.;; Lehman
Brothers; Smith, Barney & Co.;
Kidder, Peabody & Co.; Equitable Securities
Corp.
-
on
New York State Electric &
Gas Corp.
was reported that
company may, later in 1953.
issue and sell
$20,000,000 first mortgage bonds. Under¬
writers
To be determined
sey,
Power
shares
stockholders
Sept. 24
Feb. 27 it
fi¬
program.
Bidders for about $25,000,000 of
bonds may include Hal¬
Idaho
(Mich.)
Underwriter—Morgan Stanley
^Houston Lighting & Power Co.
Sept. 25 it
stock
five shares
to stockholders).
Proceeds—To retire bank
Underwriter—F. L. Putnam & Co.,
Boston, Mass.
loans.
plans issuance
company offered 313,200 additional
stock (par $10) to its common
common
authorized
first
company
National Bank of Detroit
Greenwich Gas Co.
the
*
that
offer (in 1940) was handled
by The
Corp. If sold through competitive
bidding,
probable bidders may include The First
Boston Corp.;
Merrill Lynch,
Pierce, Fenner & Beane and Union Se¬
curities Corp.
(jointly); Blyth & Co., Inc. and Harriman
Ripley & Co. Inc. (jointly); White, Weld &
Co.; Lehman
Brothers and
Goldman, Sachs & Co. (jointly); Kidder.
Peabody & Co. and Stone & Webster Securities
Corp.
(jointly).
$20
7
reported
First Boston
rate
mon
May
was
$7,500,000 of preferred stock some time
during the first quarter of 1954.
Underwriter—Previous
the
junior subordinated
common
it
and sale of about
issue
an
Stuart & Co. Inc.; Merrill
Lynch, Pierce, Fenner &
and Union Securities
Corp. (jointly); Lehman
Beane
Government
Sept. 23, Leo
Registration—Expect¬
$6,000,000 of bonds.
Underwriters—May be de¬
termined by competitive
bidding. Probable bidders: Hal¬
Washington, D. C.
the growth of the
corporation warrants.
Dec. 1.
on
Mystic Valley Gas Co.
Sept. 21 it was reported company plans issuance
and sale
annually. The management
under present plans, these shares will be
that,
is planning is¬
of about
March 18 stockholders authorized an
issue of 3,000 shares
of preferred stock (par
$100) to carry a cumulative divi¬
dend rate not to exceed 6%
issued
company
&
General Electric proposes to sell or
otherwise dis¬
such securities within a period of one
year
Government Employees
Corp.,
(12/1)
that
$10,000,000 first mortgage bonds due
Hutzler (jointly); Merrill
Lynch, Pierce, Fenner &'
Beane; Harriman Ripley & Co., Inc.
Bids—Tentativelv
Service
of
pose
of
First Boston Corp.
(jointly); Kuhn, Loeb & Co.;,
Kidder, Peabody & Co. and White, Weld & Co.
(jointly),
Glore, Forgan & Co.; Lehman
Brothers, Equitable Se¬
curities Corp.; Union Securities
Corp. and Salomon Bros.
Public Service
Public
and sale
The
(3.89%) of the
Power Co.;
45,690.45
stock of
Co.
announced
Proceeds—For construction program.
Ui^erwritfr»
To be determined
by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co.
Inc.; W. C. Langley & Co. and'
shares
Maine
common
was
1983.
Hampshire; and 20,730.20 shares (2.72%) of
common
Corp.
receive
(3.89%) of the
rate of four
(12/17)
was
suance
SEC
mortgage bonds (this is in addition to 785,648 shares to
future.
Eastern Utilities Associates
Feb. 20 it was announced
company plans sale of $7,000,*000 collateral trust mortgage bonds due 1973.
Underwriters—To be determined by competitive
able
to
stock
common
shares of
expected to be offered publicly; Underwriters
—Blair, Rollins & Co., Inc. and Cohu & Co., both of New
^York.
Sept. 9 it
company received
entitled
and
announced
authorizing
on
.
Inc.
Rollins & Co. Inc.,
by New England Public Service Co. pursuant
to tnat
company's plan of liquidation and dissolution.
By reason
of its ownership of NEPSCO
stocks, General Electric will
on
an
Underwriter—Blair,
authority to acquire its
distributive portion of portfolio stocks
being distributed
to
company plans to issue an
unspecified amount of convertible debentures due 1963
-
share.
per
York.
Under¬
writers—May be determined by competitive
bidding
Probable bidders:
Kidder, Peabody & Co.; Blyth & Co.,
mission
'
Detroit Edison Co.
March 24 it was announced
(about $55,000,000 to carry
;4%) which may first be
to
Monongahela Power
'
.
sale
General Electric Co.
and
common
,
and
stockholders of 39,000 additional shares
of capital stock
(par $10) on the basis of one new share for
each 10
shares held on Oct. 6;
rights to expire on Oct. 23. Price
of
reported company plans some financing
later this year. Underwriter—For
any preferred or com¬
Bros.
Franklin National
Bank, Franklin Square, N. Y.
6 stockholderss authorized
issuance
iA
Minnesota Power &
Light Co.
Aug. 3 it was announced stockholders will
vote Oct. 1
on
increasing the authorized common stock
(no par)
from 2,000,000 shares
(858,047 shares outstanding) to
3^
000,000 shares and on approving a 2-for-l
stock split
This will place the
company in a position to proceed'
promptly with any new financing that
may
become
necessary.
Immediate offer not contemplated.
Langley & Co. (jointly); The First Boston
Corp.
debentures
Columbus & Southern Ohio Electric Co.
Sept. 22 it
v.
plans to issue and
sell later this year $40,000,000 of new debentures.
Pro¬
ceeds—To repay bank loans and for construction
program.
Underwriters—To be determined by
•
.
determined
states
company
bidding. Probable bidders:
Morgan Stanley & Co.
.
be
by competitive bidding. Probable
bidders::Halsey, Stuart & Co. Inc.; Kidder. Peabody &
Co. and Merrill
Lynch, Pierce, Fenner & Beane (joint¬
ly); Lehman Brothers; Glore, Forgan & Co. and W. C.
Oct.
year
•-
—To
•
Contral Maine Power Co.
Jan. 2 it was reported company
45
■
$50,000,000 and $60,-
Underwriters
May be Harrima*
Ripley & Co. and The First Boston Corp.
'
-
—
Continued
on
page 4J
.
The Commercial and Financial Chronicle
46
Continued from page
it
10
SEC
the
with
an
bank
of
to issue a maximum
banks, the
proceeds to provide funds to temporarily finance the
substitute
extending
line
transmission
mile
construct
financing to
the
from
1,466-
a
Aug. 11 it
Basin in New Mexico and Colorado to market areas in
the
of
cost
capital
Boston
debentures) before
July 2 it
sell
stockholders
its
to
announced company plans to
was
1,004,603
(no par), following completion of present
shares
on
l-for-7 basis.
a
Price—At
share.
Proceeds—To repay bank loans.
None.
American
Telephone
&
build
of Pacific's
91.25%
owns
Not expected
outstanding stock.
Offering—
See
funding mortgage and collateral trust bonds. Proceeds—
First
made
Boston
Corp., New York. Offering
Aug.
be
To
—
6 it
for
ferred
Pipeline Co., Chicago, III.
for
basis).
estimated cost of
163-mile pipeline system at
a
$40,269,000. Financing is
being
now
of
Public
stock of this company,
83% is
York.
now
Of
sell
stockholders
Read
(par $100).
shares
50,000
owned by Northern
or
on
Co.,
&
Aug. 4 it
sale
of
ible
Service, Inc.
into
debentures due
stock).
common
&
& Co. and
reported company is considering issue and
was
$300,000 of 6%
Garrett
(Texas)
1963
Underwriters
Co., Dallas, Texas.
—
Harriman,
Fenner &
Probably
Offering—Expected this
Lehman
fall.
Until
issue
Our
the
opinion
who
find
moment
of
in
blessings in
bond
some
they
men
busier at the
are
the
flota¬
new
seasoned
market
than they have been in some time.
The
scarcity
of
offerings
new
to
seasoned
to
has made it necessary for people
and
needs. When the
new
the
seasonal
ening,
shop
market
reflecting
tendency
a
few
more
more
new
liberal
issues.
weeks,
pension
savings banks, trusts and
church funds, among
others, find
advisable
wait for
to
rather
new
go
into
than
sit
material.
the
back
for
$30,000,000.
natural
a
assured of
Certainly with
..
,
good
a
such
western
fi¬
Washington and
extension ol
an
in
Westpan and the South¬
384,860 share!
owns
was
announced
(11/17)
company
to
proposes
file
75,000 shares of cumulative
(par $100).
a
construction.
scheduled
(EST)
Underwriters—To
Uranium
Sept. 2 it
(jointly);
was
be
deter¬
Lynch,
received
St., Boston
16,
by
Pierce
Bids—Ten¬
to
up
its
at
company
Mass.,
11
a.m
Co., Inc.
(Canada)
reported company plans to issue and sel
2,000,000 shares of
15
to
be
Probable bidders: Blyth
Nov. 17.
on
Yates
Stuart
pre¬
Proceeds—To repay bank loans
Co., Inc.; Lehman Brothers; Merrill
tatively
Pierce,
stock
common
dbnts per share.
(par 1 cent).
Price—
Proceeds—For working capital, etc
and
Current Operations
recep-
sponsoring
a
,
of
Proceeds—To
pipe line from the
gas
Sinclair
States
Mountain
■
-
Power
accrued
syn-
'
.,
scope,
the
$8,000,000 of 3JLyear first mortgage
sources
fhfs
brought out earlier
reported a bit on
bonds,
week>
interest to yield ap¬
3.91%.
The
groui
Co.'s proximately
award
won
,.
$25,-
National
Underwriter—Tellier & Co., New York.
■.
dicate
the
21, 1953, in which to dispose of its
stock
common
new
office, 441
(jointly).
appears
was
of
in
growing
buyers
effort
an
broad¬
to
There is,
to
funds
to find it necessary to
on
its
of the
bid of
Proceeds
issue
Oct.
on
i
100.5899%.
from
the
sale
the
of
the
open
market
over
the
mainder of this month.
re-
Few
fill
emissions
apparent
no
the
market
size
any
of
up.
Rather it is
a
case
of
setting
additional
30-year
open
and
Service
Forward Calendar Light
The
New
thority's
tax-exempt
$150,000,000
of
week.
dar remains
The big
will
be
The
a
of
sinking
clear track
corporate
of
by
some
a
nationwide
350 firms
and
$30,000,000
up
earlier, following
The
a
of
the
common,
And
just about
Oct. 26,
in
change
Corp
000
of
will
debentures.
a
a
full point spread.
Meanwhile, ^Mississippi Power
$4,000,000 Of first mortgage
bonds, brought Jout at 101.265 to
&
Gas
yield 3.68%, wag reported to have
first
and
cleaned
for bids
a
up
quickly,
day
Gas
bids for $25,000
-
prices
Offer
Utility Bonds
Halsey, Stuart & Co. Inc. heads
***^OO^mVuntal"state
20-year sinking fund Power
Co.
4%-lirst
bonds due Sept.
mortgage
1,1983 at 101.58%
bonds
company's physica
an
will
and
a
101.59%
t<
purposes
other
a
beginning at 104.58%.
States' Power
public
principally
electricity to
an
Montana
in
water,
operations
Corvallis
Its
Ir
fur¬
service
principa
arounc
Springfield,
Ore,
Thermopolis, Wyo
Approximately
operating
also
centered
are
popu¬
Idaho.
it
telephone
heating.
and Casper and
furnishing
and
and
ii
en¬
Oregon, Wyo¬
communities
steam
Co.
utility
aggregate
lation of 320,000 in
and
redeemable
purposes
from
for
operating
gaged
be
fund
ranging
Mountain
nishes
201^/
the
sinking
some
Halsey, Stuart Group
unless there is
United
The
for
ming,
^
"rights" offer¬
plans,
open
new
at
of
properties.
brought
price of prices
yield of 3.91%, taking
a
ments
100%
group
issue to market
coupon.
Co.'s
expected about Oct.
on
4^%
a
successful
101.58 for
ing of 800,000 shares of additional
a
New Jersey road issue
has
refunding bonds
calen¬
limp.
handled
syndicate
issue
25-year
fund bonds will have
next
Co.
Jersey Turnpike Au¬
Electric
100.6451 for
pay
business in sight
general mortgage bonds
Public
opposition took
the
price of 100.5899 for
4% coupon. The bid of the runwas
100.17 also for 4s
are
is Niagara Mohawk Power Corp.'s
$40,000,000
a
a
with the lowest bidder offering to
of
new
of
Leaders
ners-up
,
to
gle piece of
drive
the
shop around the issue at
slated in that period. Largest sin¬
however,
disposition
investment
with funds to place will continue
in
the
potential
around
is
available
of
issue roster
funds,
market
Corp.
open¬
But for the present, and at least
for
Securities
a
price and letting dealers work bids are tentatively set for
filling their the
ing on Oct. 28.
situation out.
disregard the seasoned market
the
such
out their positions.
heavy the general tendency is
of
Union
Lynch,
Merrill
Inc.;
which
is
search
preferred
White Weld
on
to
yields accruing to
In
to
Fenner & Beane; Equitable Securities Corp.
May be determined
—
as
available
consequence investment interest
in
with funds to invest to turn to the
market in the hope of
3.70%
3.60%
market.
companies);
notes
bonds are to be applied, in part
heavy side in the initial offerto the retirement of bank note:
to wait for the new ones.
throughout the country should be ing stage. This is the issue that
which were used
temporarily t<
originally had been slated for di¬
This gap appears to be narrow¬ thoroughly canvassed.
finance construction, and the re¬
rect placement. until
investment
ing considerably as recent issues
mainder will be applied on th(
Balance of the Month
bankers protested the plan and
cost
push up closer to the market. As
of
additions and improve¬
Indications are that institutions forced it to competitive bidding.
a
in
lull
current
the
Co.
and
of
mined by competitive bidding.
offering yields tion.
circumstances the disposition
Report
The
was
&
about
Development Co.
ferred stock
Brothers; Blyth & Co. Inc., and Stone & Webster
few weeks ago the new
against 3.40%
Reporter's
tions is not without its
a
market
ranging from 3.50%
in
in
Ripley
for
to the issue and sale of
York.
New
Kidder, Peabody & Co. (jointyl); W. C. Lang-
Securities Corp.
Canadian
short-term
registration statement with the SEC shortly with rdspecl
l-for-13
a
cumulative
of
Underwriters
Beane
Co.; Northwestern Mutual Life
several
Worcester County Electric Co.
ley & Co. and Paine, Webber, Jackson & Curtis (jointly);
(convert¬
stock
Sept. 18 it
February 1954.
by competitive bidding. Probable bidders,
Petroleum
com¬
Americaj
Underwriter—May be Union Securities Corp., New York
and
announced company later this year will
was
and
issue and sell $59,-,
may
(52.85%) of the stock of each of the other two companies.
&
Gas Co.
Natural
Pierce; Fen¬
mortgage bonds to insurance
4%
construction
western
Southwestern Gas & Electric Co.
common
of
holdings of
plans to issue
company
Underwriter—Dillon,
April 29 it
the
to^about
Co.
company
six months from June
Service Co.
first to
offered
be
issue
New
to
$20,000,000 of securities (to consist of around
stock
Corp., both
At)
year.
Westpan Hydrocarbon Co.
derwriters—Glore, Forgan & Co. and Stone & Webster
Securities
this
amount
July 1 SEC granted Sinclair Oil Corp.
Offering—Expected in January
privately through sale of $34,125,000 bonds. Un¬
later
Oregon. Underwriter—Eastman, Dillon & Co., New York.
and
stock; and the remainder in common stock, the
Feb. 4 company filed an amended application with FPC
authority to construct
stock
Canadian Peace River field to
authority to
Georgia
Alabama,
$12,000,000 bonds; from $2,000,000 to $3,000,000 of pre¬
latter to
done
in
York.
announced
was
sell about
privately.
Permian Basin
an
is pending
Westpan Hydrocarbon Co. below.
Southwestern
finance, in part, expansion program. Underwriter—
3%
nance
Southwestern Development Co.
Sept. 30 Pennsylvania Public Utilities Commission au¬
and
estimated cost of $8,141,518. Underwriter—
an
first
Co.
common
Commission
line
pipe
Shields & Co., New
thorized the company to issue and sell $9,000,000 of re¬
The
335-mile
a
Florida at
until the early part of 1954.
^ Pennsylvania Water & Power Co.
To
Webster1
&
City Bank of New York; and about 3,500,000 shares of
Federal Power
before the
parent,
Co.,
4%
stated
000,000
Georgia Natural Gas Co.
Sept. 28 it was reported that an application
Underwriter—
Telegraph
South
was
New York Life Insurance
of
(100 per
par
con¬
plans to sell 558,946
company
common
price, the sale would
Insurance
S. E.,
Office—1705—38th St.,
December.
or
offering
Washington, D. C.
•
capital stock
Stone
panies (including Prudential Insurance Co. of
Offering—Expected in
shares at $2 per share.
November
issue and
additional
1,490,000 additional shares of capital
sale of
and
stock
N^,
Telephone & Telegraph Co.
some
Underwriters;
Beane, and Kidder, Peabody & Co.
000,000 of
announced that the company contemplates
was
of 10,000
Pacific
&
ner
April 1 it
issue
Canada.
Corp. Ltd., Toronto,
Fall.
Corp., New York.
Sept. 3 it
Peabody & Co., both of New York, and Dominion Secu¬
rities
shares of
market
West Coast Transmission
Underwriters—White, Weld & Co. and Kidder,
stocks.
issue
may
the
ties Corp.; Blyth & Co., Inc.; Merrill
Lynch,
Underwriter—May be The First
year.
Sky Ride Helicopter Corp.
bonds and preferred and common
pipe line
before
$14,000,000. Proceeds—For construction program. Offer¬
ing—Probably late in November or early December of
this year. Underwriters—To be determined
by competi¬
tive bidding. Probable bidders: Stone & Webster
Securi¬
public
reported company may do some
was
end of this
the
current
working capital. Financing is expected to consist of first
mortgage
stock
announced
was
additional
public
Finance Co.
financing (probably in the form of
including $2,000,000 for
is $186,000,000,
project
overall
Estimated
Northwest.
Pacific
the
preferred
Pipe Line Corp.
company
—Probably White, Weld & Co. and
Securities Corp., both of New York.
transport aircraft.
cargo
secure
Seaboard
Juan
San
vertible
Gas
reported
was
Sept. 3 it
Aug. 11 it was announced company plans future
received FPC permission to file a third
proposing to
May 4 it
Airlines, Inc., New York
Riddle
Pipeline Corp.
application
Underwriters—May be
Virginia Electric & Power Co.
Forgan & Co. and Kalman & Co.
Jan 29 company
bonds.
and
competitive
Transcontinental
$1,500,will be accomplished
the
Previous bond financing
bonds.
mortgage
$4,000,000
by
issuance
privately through Blyth & Co., Inc.
done
was
Underwriters—May
arranging for long-term financing.
Pacific Northwest
first
of
sale
company's 1953 and 1954 construction programs prior to
be Glore,
by means
which will
of the credit arrangement or by
either by expansion
about
plans
company
Repayment of the loans at
1953.
000 needed for the rest of the year,
$4,000,000 unsecured promissory notes to
of
of
j
•
reported
was
bidding. Probable bidders:
Halsey,. Stuart & Co. Inc.; Merrill Lynch, Pierce, Fenner
& Beane and Union Securities
Corp. (jointly); Lehman
Brothers; Kidder, Peabody & Co.
maturity, plus the procurement of an additional
authorized company
FPC
25
June
it
28
determined
between
range
arrangement
credit
a
in November,
mature
Otter Tail Power Co.
under
loans
sale
financing of its
that
which will
program,
$8,700,000 and $9,200,000, is being accomplished
N. M.
querque.
construction
1953
announced
President,
Polhemus,
Central Avenue, N. E., Albu¬
Office—5003
nationally.
N. M.
Sept.
Chairman, and James H.
July 22, Thomas W. Delzell,
announced company plans to register
issue of stock, which will be offered
was
Suburban Electric Co.
Portland General Electric Co.
45
Ormond Corp., Albuquerque,
March
it
Thursday, October 8, 1953
...
(1366)
94%
revenues
from the sale of
of
was
its
groj
derive
electricity.
Number 5262
Volume 178
...
The Commercial and Financial Chronicle
(1367)
Continued
from
page
8
and trade practices, personnel
pol¬
icies, taxation system, etc. are in¬
evitably different from one coun¬
General Impediments to Private
Foreign Investment
when
prompt and
adequate
pensation is not forthcoming
it
works
as
absolute
an
and
are
barrier
If .he
feels
the
that
is
not
other
How much
feeling that xenophobia is preva¬
that, however law abid¬
ing he may be in organizing a
lent and
capital
when
investment
there
possibilities
particularly
at
home,
business venture in the host
try, he will be
cion
if not
coun¬
victim of suspi¬
a
large
part
method o|
ahead
41
page
to
the
fact
financing
oped
which
man
to
enabled
purchase
relatively
small
down
a
devel¬
average
with
a
payment,
of
per
share
by
the
billion, the assets of mutual
ings banks amount to $22
that
car
indicated
fact
over
was
the
a
is
that the assets of
savings and loan
associations amount to
with future payments to be made
out
hostility.
from
Mutual Funds
worse
these risks will appear to the
pro¬
spective investor if he has the
$18
sav¬
billion,
and life
insurance companies have
$73 billion.
assets of over
There are many
possibilties
to the form of future
as
development
of
mutual
like
the
funds.
British
Some
in
the
day
19th
we
income.
The same prin¬
ciple had been applied before with tury, may use investment com¬
one more diffi¬
panies as a means of
farm
investing
equipment, and today is
A
foreign investor fre¬
a
number of unknown elements. culty.
though
there
is
universal in distribution of house¬ abroad,
some
The social customs, the financial quently desires to finance only
doubt whether it would
be feasi¬
hold appliances and
part of the enterprise he under¬
many other ble
to do this in a
general way
takes. He may rely on local credit things.
with
mutual
funds, which are
The same principle is now
or
local participations or both to
being based upon the
principle of re¬
launch or
expand his business. employed in voluntary systematic deemable
shares. The same limi¬
The absence of a well established investment
plans
which
most tation
may well apply to the use
credit system, or of a capital mar¬ mutual funds now have.
These of mutual
funds
for
supplying
ket
will
hamper his initiative. plans are simple for the share¬ venture
capital.
This depends, of course, in a
holder, and unlike the periodic
large
We
will
undoubtedly see
a
part on the state of development investment plans of the '30's, they
much greater use of
mutual fund
of the country, but whatever this do not involve burdensome extra
shares by trustees,
profit-sharing
state, availability of local capital charges. Now, for the first time,
plans, and other institutional in¬
it is possible for a
can
be a strong incentive to a
person to in¬
vestors.
vest
in
mutual
funds
in
foreign investor, its absence can
very
As an
small dollar
industry, our growth will
be
a
amounts, at a price
deterrent. Other
speakers
there always are.
The very act
of sending capital abroad involves
as
wel¬
investor
will
he
foreign
his
elsewhere,
when expropriation appears to be
directed mainly at foreigners.
come,
risk
not
com¬
try to another.
Continued
47
NSTA
cen¬
I must mention
Notes
New NSTA
will
Nominating Committee
doubt
no
factors
ment of local
enterprises
the
same
foreign
more
of
capital
be
the
tend
Ernest E. Blum
G.
J.
James B, Dean
into
some
at
This is
once.
why
local
induce¬
investor.
broad
this
used by
people.
WE
of
plan
reasons
is
being
increasing number of
an
In
be soundest if it is
geared to the
filling of a real need, not just
a
promotional idea.
There is no
question that the door is open to
mutual
funds
HEARD
a
great
deal
has,
dustry.
of
been
course,
stantial.
The
assets
very
sub¬
of
mutual
funds have grown from about
$400
million at
the
end
of
1940
to
nearly $4 billion today.
savings cation of the potential
a
point
We
in
ic
flow
a
DIVIDEND
.
policies,
the
absence of xenophob¬
or
the
of
focus
that
a
just
another
American
help
can
if
mutual
we
fund
in¬
keep
this
remember
share
is
not
security, but rather
a
large, profession¬
An indi¬
an
that
ally managed investment account.
lies
interest in
FE
York,
Board
of
DIVIDEND
TOPEKA AND
RAILWAY COMPANY
N.
Y.,
September
Directors
dividend
a
NOTICES
ATCHISON,
New
clared
policies, financial
tendencies,
people and
to invest in
desiring
cross-section
of
One
has
29,
this
Dollar
and
COMBUSTION
1953.
possibility
Cents
($1.25) per share, being Dividend
163, on the Common Capital Stock of this
Company, payable December 8, 1953, to holders
of said Common Capital Stock registered on the
books of the Company at the close of business
October 30, 1953.
D.
C.
WILSON, Assistant Treasurer.
Broadway, New York 5, N. Y.
120
ENGINEERING,
Dividend No.
No.
of
NOTICES
INC.
day de¬
Twenty-
five
presence
growing
should
"Climate"
exchange
a
agement of funds for
institutions
The
policies,
fill
provide diversification
and professional investment
man¬
HAVE
IV
Economic
to
need —to
THE
the
of the
one
type
SANTA
in
he
if
about the growth of mutual funds
in recent years, and the
foreign capital.
Elements
than
policies
encourage
Heimerdinger
greater
$6,000 to invest all
or
growth
with
attraction for
an
no
had $5,000
is
The
one.
investment internally
constitute
of
to
induce
This
strong
a
foreign
a
consequence,
and
than
ways
partnership
to
which
which
flow.
to
entering
can
invest¬
broadly speaking
those
of
the
capital in profitable
are
as
prospect
ment
attract
capital
true in
kind
point out that the
which
A
quarterly
(75c)
dividend
share
per
on
of
all
199
seventy-five
the
centa
outstanding
stock
Company has been declared payable
29, 1953 to stockholders of record at
the close of business October
15, 1953.
of
the
October
OTTO W. STRAUSS
Vice President and Treasurer
«
*
expropriation, all these elements
the
to
go
for
making of
foreign
themselves
AMERICAN
investment,
They depend largely
tries
"climate"
a
private
the
coun¬
have
and
CAN COMPANY
ments.
with
Like
world
the
tend to induce
an
develop¬
policies
which
accumulation of
domestic savings and their invest¬
Ludwell A. Strader
Richard
H.
Walsh
in
ment
Leonard J. Wolf
they
Ernest E.
Dean, J. W. Tindall & Company, Atlanta.
ual
Ludwell A.
Richard H.
Heimerdinger, Cincinnati.
Strader, Strader, Taylor & Co., Inc., Lynchburg, Va.
Walsh, Newhard, Cook & Co., St. Louis.
Leonard J. Wolf, A. G. Becker & Co.,
only
Incorporated, Chicago.
beefsteak dinner for the general
membership on
SECURITY TRADERS
a
Tuesday, Nov. 10
the Antlers, 67 Wall Street, New York City.
vations should be made with Sal
Reser¬
Hunter
Klein
Valentine,
McGovern,
Bradley
12*
(Capt.), Brown, Reid, Farrell, Barker
Serlen
Leone
Points
Bass,
(Capt.),
Rogers, Gold, Krumholz,
Meyer
Kaiser
Burian
Krisam
Manson
make
and
a
the
it is
profit.
modern
200 Point Club
Jack Barker
242
i
has
present
been
level
LEIGHTON, Secretary.
At
tors
following final dividend for 1953:
No.
Goodbody Adds
(Special
to
The
SARASOTA,
record
on
77, 30£ per share
at
November 14, 1953, to holders of
close of business October 20, 1953.
Dale Parker
Secretary
October 1,195 3
Myles is
now
Fla.
with
1953
at
the
to
holders
the close of
of such
business
on
stock
October
1, 1953.
Chronicle)
Goodbody
&
Excellent
to
N.
Y.
references.
Commercial
Place, New York 7.
Directors
today
declared
a
of 754 per
dividend
share
&
Park
on
Stock, payable
November 2 to shareholders
of record
The Board of Directors has de¬
clared
a
cents
(25^)
October 20, 1953.
DAGGETT
President
September
15, 1953
per
Common Stock
share
of
Company, and
fifty cents (50<?)
the Common Stock
Value)
on
the
($1 Par Value)
of the
a
dividend
share
per
(no Par
exchanged under
the
Company's Exchange In¬
structions dated May 19, 1953.
These
dividends
are
payable
October 26, 1953 to stockholders
of
A. H.
dividend of twenty-five
on
20,1953
The Board of
Common
of 56'M
the Cumulative Preferred
Stock, payable November
\, 2, to shareholders of
X
record October
on
unlisted
Financial Chronicle, 25
W-108,
share
Dividend
or
Ohio
today declared
regular quarterly dividend
Securities
qualified to cooperate
salesmen. Imme¬
available
Cleveland 8
NOTICE
DIVIDEND
Common
with retail
Exchange
•:
TECHNICOLOR, Inc.
17 years with large
trading organization, well ex¬
perienced, many dealer con¬
Stock
131Street
Preferred Dividend
TRADER
diately
East
and Industrial Batteries
S.
per
tacts,
300
Manufacturers of Automotive
Harry
—
THE WEATHERHEAD COMPANY
PAUl, MINNESOTA
SAINT
Co., 21 South Palm Avenue.
Over-the-counter
2-
Cumulative Preferred Stock
of the Company, payable October 15,
Vice President and Treasurer
GOULD-NATIONAL
Trader,
4
of The Weatherhead Company,
the $5.00
payable
to Staff
Financial
8
5
meeting of the Board of Direc¬
a
held September 17, 1953, a Dividend
of $1.25 per share was declared upon
Common Stock
a
5y2
The Mark of Quality
the
The Board of Directors
6
m
INC.
of
development.
Box
Julie Bean
B.
October 2, 1953.
The Board of Directors has declared this day
profit is
Duke Hunter
C. Kaiser
well-
enterprise,
5 Point Club
]
Secretary
wanted,
That
world
the
8
i
books will not be closed.
MORRIS H. WRIGHT
to
firm.
Growney (Capt.), Boggs, Siegel, Voccolli, Lienhardt
is
he
reasonably
by such enterprise that
brought
9
(Capt.), Craig, Gronick, Bies, Demaye___.
(Capt.), Gavin, Clemence, Montanye, Whiting
(Capt.), Pollack, Cohen, Smith, Strauss
(Capt..), Jacobs, Topol, Weissman, H. Frankel
is
9
(Capt.), M. Meyer, Frankel, Wechsler, King
(Capt.), Hunt, Werkmeister, Swenson, Ghegan
Donadio
he
10
Gersten
stock of Middle States Petroleum
THE COLUMBIA
GAS SYSTEM,
11
(Capt.), Nieman,' Gannon, Tisch, Greenberg
(Capt.), Fredericks, Murphy, Weseman, Buff
common
Corporation, issuable on November 16,
1953, to stockholders of record at the close
of business on October 13, 1953. Transfer
G.
HOFFMAN,
BATTERIES, INC.
ASSOCIATION OF NEW YORK
TEAM:
(Capt.),
least,
other human being,
where
goes
economic
Rappa, F. S. Moseley & Co.
Security Traders Association of New York (STANY) Bowling
League standing as of Oct. 1, 1953 is as follows:
Bean
any
the mark of successful
Security Traders Association of New York will hold
at 5:00 p.m. at
at
treated, and where he is allowed
to
The
largely
EDMUND
DIVIDEND
payable in
stock, has been declared on the
mailed.
conclusion, the private inves¬
tor, like
where
SECURITY TRADERS ASSOCIATION OF NEW YORK
.?•
very
be
STOCK
A dividend of four per cent.,
common
country concerned.
In
John G. Heimerdinger, Walter, Woody &
are,
enterprises,
September 29, 1953 a quarterly dividend
of thirty-five cents per share was declared on
the Common Stock of this Company, payable
November 16, 1953, to Stockholders of record
at
the close of business October 22, 1953.
Transfer books will remain open. Checks will
On
within the control of the individ¬
Blum, Brush, Slocumb & Co., Inc., San Francisco.
James B.
profitable
CORPORATION
COMMON
STOCK
COMMON
connection
MIDDLE STATES PETROLEUM
little
on
not yet
record
ness
at
the
close
of busi¬
October 19, 1953.
L. G. CLARK, Treasurer.
September 30, 1953.
/
I.
4B
(1368)
The Commercial and Financial Chronicle....
Thursday, October 8,
its objective of
balancing
budget in fiscal 1956.
BUSINESS BUZZ
Washington
from the Nation**
g~M
by
defense
new
the
Joint
tha
assess¬
Chiefs
£3
the question
answer
of whether the Federal govern¬
ment shall return to balanced
\
A, " AM/
jlJL I l/\A/
Capital
ment
expected to
A
Beliini - the«Scene Interpretation!
.
Thus the
>i
•
I
•
195$
budgets
a
schedule,
on
period of
new
whether
or
of deficit
years
financing is in store.
Actually,
of
WASHINGTON, D. C.—Some
the highest officials of the
-Eisenhower
Administration
reported
be
*
idea
to
that
ductive
considering the
for
planning the
are
of war
purposes
material
raw
oning
U.
be
of
further
a
aluminum
S.
increase
production
Finally, ALCOA had
(3)
jected
have
her
of
the
to
surplus
export
of them.
-course,
notions
silly
any
Canada
could
be
that
expected
to
merely place her resources at
disposal of the United States, or
that
she
wouldn't
industry had sufficient
terials, etc.
the
of the
tary
broke
war
out
States
between
and
Russia,
of
government.
will tell the President what, say„.
version
a
of water.
is
It
In
-
war, obviously Canada would
be most anxious to sell these
where
they could
sold, which would
United States.
Furthermore,
States
and
broiled
expan¬
out
em¬
it
war,
would be difficult for Canada to
involvement.
■escape
President,
government
much
legal
also
attack
the
removed
ALCOA'S
upon
real
a
meshed
at
hundreds
of
is
points.
in
the
conference,
press
conferences
be
Mobilization,
Defense
to adopt this
were
suggestion, it would have broad
implications,
both
short
and
term.
near
change
some
might
of
term, for in¬
near
stance, such an official
policy if adopted would
U.
S.
make
the current Department of Jus¬
tice suit against the Aluminum
Co.
of
term
Co.
America
entered
contract
of
look
into
with
silly.
long-
a
Aluminum
Canada
to
buy alumi-
fabricate
,lum»
it
for
and
users,
United
distribute
the
this
the
in
many
United
respects,
power,
produc¬
States.
as
In
the
economic
an
obviously
aluminum,
abundance
more
of
cheapy
cost
average
an
Canada
raw
her
of
however,
deal Is regarded
'"'natural."
on
threat¬
was
aluminum
the
produces
deal
development
expanding
with
in
in
hydro
than
United
be
Under
the
build-up,
processed
into
wire,
sheets,
ready for final fabrication.
Canada
-sating
has
industry
justify
-ucale,
neither
on
processing
nor
government
This
a
on
fabri-
scale
a
to
a
is
project for a
third round" of aluminum
pro¬
duction capacity
expansion. If
very
ment
come
of
in
hefty
plus
produc-
an incre¬
considerable
from
velopment in
considered
a
as
the
size
Kitimat
to
de¬
year or so, were
available
A
actions
"hard
con¬
cases
which
of estab¬
core"
which
the
to
clearly
there
it
be
meet
case
a
the
the
If
in
a
views.)
own
kind of almost in¬
same
also
operate
to
rely
avoided
assumed that in
were
case
if
ceedings
than
informal
and
"customers"
tion
of
vulnerable
markets,
matter
materials,
raw
to
loss
a
might
find
a
as
now
of
a
so
in
of the
Finally if the reality of Cana¬
growing production of
taken
were
raw
into
planning, the
ac¬
way
might be smoothed for addition¬
al
corporate
tween
relationships
Canadian
of
certain,
Chairman
is
his
point, he
materially to¬
kind of
a
toward
j
FTC.
New Defense
govern¬
Eisenhower Admini¬
probably will have to hold
close check constantly on the
staff
of
the
FTC.
by William D. Patterson—*
Prentice-Hall, Inc., 70 Fifth Av¬
enue, New York 11, N. Y.
Applied Imagination: Principles-
Make
and
Plans
of
Staff
fense
about
are
Secretary
defense
States
with
of
needs
the
United
possible
a
war
problem
is
aggravated by Red development
of the H-bomb.
This
assessment
new
in
posed,
the
such
is
a
new
mind,
questions
and
to
as
bigger defense
system, whether defense spend¬
ing shall need to go
on
at
Creative—
Avenue, New York, N. Y.—cloth,
Automobile
a
Facts
and
Figures::
33rd
Edition, 1953 — AutomobileManufacturers Association,
New
Center Building, Detroit 2, Mich.;.
366 Madison Avenue, New York17, N. Y.—Paper.
Nationalized
sup¬
public
whether the United States must
have
of
Osborn
Charles Scribner's Sons, 597 Fifths
overall
Their
Alex F.
—
their
the
of
against
Russia.
to show De¬
Wilson
assessment
new
Procedures
Thinking
Theoretically the Joint Chiefs
business
On the other hand, the Chair¬
a
with
America: Miracle at Work—Ed¬
ited
Transport
Opera¬
tions in Great Britain—Association*
of American
Railway
D.
rate
Railroads, Bureau of
Economics,
Washington,.
C.—paper.
Russia:
A
History and
Inter-*-
an
be¬
producers
of $40 billion
annually, whether
pretation—2 volumes—Michael TV
would be inclined occupational-
the United States.
da's
new
climate
the
then
stration has committed itself to.
man
practical
FTC
new
contribute
world
ready market
being
on
voluntary
upon
conferences
Eisenhower Will
a
answer
of
Canada's bountiful produc¬
it
maintain
ward the
law,
more
cumbersome, semi-judicial pro¬
the
of
question
no
more
escapable natural motives would
es¬
of
meaning of the law.
will
which
war,
be
to
cost.
be
violation
able
new
facts
work
more
in
one
clearly
the
established
within
the
be
was
if
a
would
ment
might
law
and
showed
case
of
material
production
expansion would involve a large
This
would
wrong-doing,
Should
it
to
Florinsky
ly, like
ex¬
more,
or
whether,
constantly the periphery of
hand,
it
can
tend
the
and
the
are
any
Federal
v
The
FTC
bureaucracy, to
Trade Commission
Clayton Acts. This is because
more
kinds of
established
conduct which
as
violations
of
shall
billion
rise
on
drop
a
on
$50
billion
or
the other
back
to
basis. The $33-billion figure was
the
tion
one
on
used
by the Administra¬
the quiet
pany,
$33
semi-permanent
—
The MacMillan Com¬
N. Y.
Social
City—cloth—$15.
Responsibilities
Businessman—Howard
of
R.
the-
Bowers
—Harper & Brothers, New York,
N.
Y.—cloth—$3.50
in arriving at
and
possible U. S. outlets.
TRADING MARKETS
Howrey For Voluntary
FTC Procedures
Ed
Howrey,
the
personable
tion at present,
core"
periphery
law.
tablished
round
aluminum production.
ALCAN'S
FTC should
on
presumably
H-bomb threat the defense pro¬
gram should
be projected be¬
small part
a
re¬
appropriations can be obtained.
This not only helps to promote
social security for a bureauc¬
racy, but opens the way for new
jobs and promotions for those
now on the job.
broad
(2) There is currently
kicking
around in ODM
the
on
lished
credit.
costly.
determined that
the processing indus¬
tries except for but
her
the
than
are
has
buying contracts for raw ma¬
terials, by accelerated tax amor¬
tization, and in some cases by
count in U. S.
ft
Commission
"hard
on
rather
this by entering into long-term
the
ingots. They want
upward; it
responsibility to
than
work there is for
more
the FTC. With
raw
materials
of
forth
go
So there would
law, the
These
centrate
materials production of
numerous
kinds.
It
has
done
it
told to
formal
lieve that the
substantial boost
a
be
Mr. Howrey is also said to be¬
defense
government
alleged viola¬
alleged
violators
more.
fewer
would
orders.
the
upon
present
the
On the other
hand, few users of
aluminum want their metal in
form
added
program
no
the
FTC
men
hearings and "cease and desist"
present defense build-up.
the
States.
less
off—TAKE TWO!"
the
The
then
and sin
now on order. Or, on
hand, it might suggest
additional and costly de¬
yond present bases, then
Justice attacked
tion
various
it
States.
the premise that it
ening
new,
in
to
would
merely
substitution
a
forms of weapons
new
underwritten
(1) On the
ALCOA
a
called
tions.-
This
take the form
fense
of
week
the
with
attention of business
of the H-bomb.
tor
Office
spending
their
for
to
cam 1
gave grounds for assuming that
he is considering an alteration
the other
the
recommended
the "Chronicle's"
to
speech, and again in his
officials, particu¬
larly Arthur Flemming, Direc¬
of
how-
and may or may not coincide with
"Well—yes—as long as you were thoughtful enough
provide a substitute, Miss Perkins, you may have
his
for those
defense
the
only,
(This column is intended to
Eisenhower
week's
his
will
It
of
flect the "behind the scene" inter¬
pretation from the nation's Capital
Defense Expansion
last
provide.
a
ex¬
the greatest
expenditure possibly obtainable-
the
project might
Would Cut Cost Of
Boston
not
ask
adjust to the Russian possession
Has Broad Implications
If
to
be
or
Congress. The Joint Chiefs
day vanish.
some
of
'
objection
Alaskan
such
possibility that their de¬
efforts already
are
en¬
fense
government
ALCOA
Chiefs;
$100-billion
decision
and
will
influence
and distributing Cana¬
aluminum, that Canadian
two
as
the
sion in the U. S., and if the U. S.
of the U.S. defense program to
The
governments regard this
be
Joint
expenditure
or a
then
be
United
became
all
an
$33-billion
penditure will
the
to
the
the
if the U. S. government stopped
President
if
Russia
in
be
practice
$50-billion,
possible to imagine that
dian
-'I
mili¬
government, which plays
closely with Canadian business,
rejected the request for the di¬
buying
raw materials seriously
disrupted. In the event of such
The
can
maximum expenditures obtain¬
able from the civil side of the
world markets for her vast sup¬
plies of
capabilities
States.
dian
Canada probably would find the
resources
United
only, if it is to do its
job conscientiously, ask for the
v
United
material, finan¬
manpower
underwriting aluminum
ma¬
Behind the idea is that if any
major
diversion
a
the
exceed
cial, and
ALCOA hydro plant. The Cana¬
it her
to
see
own
g
far
a
required
terri¬
populations, any theo¬
retically adequate defense would
Canadian water to the proposed
This idea does not involve, of
Since
vast
tories and
pro¬
jor part
available
as
way.
Russia controls such
ca¬
United States, or at least a ma¬
•
out,
quite work out this
large project in Alaska
for producing aluminum with
cheap water power. This would
counted
-X>
point
in
pacity.
pro¬
of Canada
resources
large part, there would scarcely
be any need for Federal chaper¬
i
military observers
the thing will not
new
the
Trade
is
Federal
Chairman
using
toward
voluntary
crack-down
Seneca
of
as
the
This
an
would
seem
to
"B"
of
Carl Marks
&
Co Inc.
Coplay Cement Pfd.
than
in
FOREIGN
the
HANOVER 2-0050
•
SPECIALISTS
NEW YORK 4. N. Y.
"
TELETYPE NY 1-971
LERNER & CO.
Investment Securities
10 Post Office Square, Boston 9, Mass.
sus¬
pected violators of the laws. In
Telephone
Teletype
HUbbard 2-1990
indicate
calling in of
SECURITIES
50 BROAD STREET
TEL:
jurisdiction.
informal
Cement
Victoria Gypsum
enforcement of the various acts
under FTC
Co.
Machine
leaning
idea
rather
procedures
Falls
Riverside
Commission,
represented
strongly
National
and
young
BS 69
I
@FedFRASER