Full text of Commercial and Financial Chronicle : September 1, 1949, Vol. 170, No. 4834

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ARM.

8US.

U. S. Must

What's Ahead for

Help

Says Truman
required to

are

we

have

and

ing British economic crisis
decries opposition to

tionalization

British

na¬

policy.

|

convention of the
American Legion in Philadelphia
Addressing

a

for further bank mergers
v

well

as

surplus,'

and

this
in

by

cline

country

world

r

in

eco¬

their
ment

o

govern¬

securi¬

1

ties, caused by

nation's

seri¬

President's

with

be

the

again at their annual convention.
I am very proud to be honored

with the American Le¬
Distinguished Service Med¬
al.
There are many fine things
about this medal, and one of them
is that it has no political impliyou

gion

(Continued

sharp

volume of

loans,

of busi¬

by the expansion

the accumulation of in¬

and

ness

the

in

increase

ventories.

i,

members of the American Legion

by

a

time

caused

The full text of the

Nadler

Dr. Marcus

that

solving

Truman

in

financial situation.

to

on page

and

Economic

fiscal

conditions

during 1949 were entirely differ¬
ent from those which prevailed a
year ago,

horizon.

The Threat of Abundance
"Dollar shortages" are now

{

Again?

atmosphere. The policies of
the Board
of Governors of the
Federal Reserve System under¬
went a change. Reserve require-

what might almost be termed

(Continued on page 30)

current

the

tire of

Public Utility

Preferred Stocks

on

our

part to eliminate this

(Continued

on page

22)

Boston

Chicago

Amsterdam

to

and Uganda

Bishopsgate,
London, E. C.

in

and

Paid-up
Reserve
The

Bank

Capital
Fund
conducts every

banking

FRANKLIN DISTRIBUTORS, Inc.
64 Walt Street,

happily

(Continued on page 24)

;

.

Municipal

|

:

Bonds

-

OF NEW YORK
Bond Dept. Teletype:

NY 1-708

New York 5

||

-

THE CHASE i

NATIONAL BANK
OF

New York
Seattle

Portland, Ore.

San Francisco Los Angeles

Central Vermont

bonds & stocks

Public Service Co.

i

SECURITIES

Underwriters and

THE CITY OF HEW YO«K

Agency: 20 Exchange PL

CANADIAN

COAST

Distributors of Municipal
Analysis

Corporate Securities

Established

1899

(Incorporated)

CLEVELAND

and exchange business

New York

Cincinnati

Chicago
Denver
Toledo Buffalo

Columbus

upon

Dean Witter a Co.,
Members

New

York

Stock

Exchange

Francisco Stock Exchange
Stock Exchange

Honolulu

OTIS & CO.

description of




Canada

OF COMMEBCE

PACIFIC

£2,500,000

also undertaken

Managed Currency while

CANADIAN BANK

San

Trusteeships and Executorships

abroad, swallowing the expansion
of social services at the cost of

Head Office: Toronto

Zanzibar

£4,000,000
£2,000,000

did

inter-war

BmJDep*rtmeml

FUND

India, Burma,

Subscribed Capital

r

State and

THE NATIONAL CITY BANK

UTILITIES FUND
INCOME (BALANCED)

and

Ceylon, Kenya
Colcny, Kericho, Kenya, and Aden

Branches

before.
During
period, * Britain's
economic society went along with
the welfare politicians, Conserva¬
tive and Laborite, accepting their
devious
policies
at
home and
the

:

BOND FUND

the Government in

Kenya Colony

since World War II, as its German

counterpart

.

upon request

of INDIA, LIMITED
Head Office: 26,

PilyS

COMMON STOCK FUND-

NATIONAL BANK
Bankers

Melchior

Monthly Commercial Letter

A Mutual Fund

York 5

Philadelphia Providence

London

across

;

Funds,

Prospect** on request

Wall Street, New

Dr.

regimentation

550 Branches f

White,Weld&Co.
40

of this mental

27, 1949.

PREFERRED STOCK FUND

Stock Exchange

convinced
shortage of

trying to convince us and keep us

i

V

clas¬
example

sical

to its

that failure

pro¬

vides ,ar

military establishments, enjoying
the artificial Cheap Money and

"dollar shortage" aspect of the

situation, and what it means to foreign peoples.

now

Beckley,

Association,

W. Va., Aug.

mostly at work

/British cap¬
italism

_

Franklin Custodian

Members New York

ditches.

impact upon the people and the economy
of the United States. The British and some others, too,
Turn

never

Bankers

for

roadside

the

stranger reasoning. We have had occasion recently
analyze this phenomenon called "dollar shortage," and
to make clear—so we hope—that the situation has its roots
in basic economic facts, and that it is not likely to vanish
from the earth unless and until these basic causes disappear.
These basic causes are to be found here as well as elsewhere

much

or

left, making it
lose
sight of

to

So

right

see

tions and

.

so

it cannot

that

topic of discussion among important groups of leaders
both here and in Great Britain, The remainder of the world

omic

20)

Industrial

:;

vehicle,

the

changed econ¬

draws

industrial

the

; u

V;.:.

horse

the

that

"

They

blinders

put

in the world, although on balance they are
and the activities of the abroad.

banks reflected the

*Summary of an address by Dr.
Nadler before the West Virginia

and

;

can scarcely be regarded as without interest in the subject.
agement pol- Precisely what is being said in official "conversations" we,
icy of the of
course, have no I way of knowing, but public cpmment
Treasury, and*
both here and abroad often contains some strange observa¬
at
the
same

Great

Britain

happy

well.

the debt man¬

help to

am

blur their thinking as
—

We See It

f

ed, in particu¬
lar, the need
for extending

I

regiment and to despoil them. They
Especially, they reduce the visibility on
<S>t h e "financial

to their subjects than to

more

the

tions, and cit¬

address follows:

of Managed Economies and Welfare States—two
modern Police State—that they do

typical

for the same thing, for the

on

de¬

holdings

condi¬

is

It
names

wit¬
a

nessed

/ restoring

nomic

;

in

EDITORIAL

the

banks

as¬

a n ce

the

and

Govern ment

coopera¬

tion

President

more, economy

operated with
a
substantial

full

sist

.

Britain's international accounts, and predicts
sterling will not be devalued.

exports to balance

bank operation.

level

_

cial deterioration;

activities of the banks during the last 18 months were
strongly influenced by prevailing economic conditions and the fiscal
position of the government. During 1948 when the inflationary spiral
of prices and wages was very pronounced, when business activity
was at a high<$>

Aug.

-

(1) continuation of welfare state in face of progressive finan¬
(2) return to free enterprise system, and (3)
continuous aid from United States.
Foresees need of doubled

tives:

The }

Harry S. Tru¬
man > u r g e d

ous

Urges

policies. Says super-planning by ECA on European scale
panic condition. Lists as alterna¬

has maneuvered Britain into near

increase in bank loans and,

as

by end of current year.

bank deposits

29,
President

on

American

banks will be intensified and may
holdings paying higher returns. Looks

lead them to seek security

interest in solv¬

common

v

Says need for earnings by

cline.

ex¬

pand world trade and prosperity
and combat Communism. Asserts

be cured

and government action will allay

economic forces

PALYI, PH. D.

Palyi, citing British crisis, asserts trouble there lies too deep to
by anything short of totally new turn in both British and

Dr.

Dr. Nadler asserts as long as readjustment
downward volume of loans of commercial banks will de¬

continues

Philadelphia adcombined efforts; of

free nations

University

Copy

Super-Planning

By MELCHIOR

impact of recession,

;

in

says

Panic Under

Banking?

of Finance, New York

Professor

Contending

i dress,

Price 30 Cents a

1949

By MARCUS NADLER*

"Free Nations"
President,

York, N. Y., Thursday, September 1,

New

Number 4834

170

Volume

9

ccn

1S3P

ESTABLISHED

U8RARY

Los

14

Angeles Stock

WALL

STREET,

Exchange
NEW YORK

Teletype NY 1-579
Sao Francisco
Los Angeles
Seattle
Honolulu
Direct, Wires
BArclay

7-4300

Doxmion Securities
6rporaxk>2i
40 Exchange Place,

New York5,N.Y.

N

IRA HAUPT & CO.
Members New York Stock Exchange
"

and

111

other Principal

WHitehall 4-8161

Boston

Exchanges

Broadway, N. Y« 6

WOrth 4-6000

Teletype NY 1 -702-3

request

Teletype NY 1-2708

Telephone: Enterprise 1820

2

COMMERCIAL

THE

(842)
*

MARKETS

TRADING

^

Corporation
W.D.

Latin-American Dollar Shortage

'»

New York Hanseatic

Corporation

'

New York 5

Teletype NY 1-583

of

<$>

has

trade

Specialists in

private
casinos-

such

Since 1917

the

York

Exchange
Exchange

Stock

York

Curb

'-'d-'l
•»..

Chilean

Tel.

REctor

amount 1 from

the income of
the

BROADWAY, NEW YORK 5

120

mining

which

M.

Frederick

were

Continental Radiant
Glass Heating
Common

countries

all

in

Stern

which

have

worse

Stock

products to sell to the
the picture is
in the remaining states.

any

United

States—and

glass heating system.
' !
Bought—Sold—Quoted

MERCER HICKS CORPORATION
York 5, N. Y.

72 Wall Street, New
Telephone DIgby 4-5700.

have

ments

various

established

imports, and allocate the available
foreign
exchange
to
the
most
categories.

necessary

American Air Filter Co.

licenses must

Common

Corp.

imports

are

foreign

Kentucky Stone Co.

the

Incorporated
Floor, Kentucky Home

Life Bldg.

KENTUCKY

? t

Bell Tele. LS 186

Long Distance 238-9

Bingham-Herbrand

BOUGHT

—

..

SOLD
..

—

...*

i;
..,:f

Incorporated
Broadway

Member

Cleveland

"t

■

;,
<

New York

Stock Exchange

Union Commerce

Building

CLEVELAND

at

huge

a

to

margin

of

so

limited.

Most

personal

countries

income

taxes,

have
and

no

only

America.
*

Members

St. Louis Stock Exchange




in

mountaindwellers
slums

immediate

them

But
had all

fortnight, they
back to their old
content

to

on

a

filtered

shacks.

live

the
new

after

lodgings.

sanitary

seem

of

out

assigned

and

25 Broad

from

revenues

derived from

duties

are

im¬

respect
between
America in the

Direct

They

which

large native populations."' In
Argentina, whose inhabitants are
of predominantly European stock,
a benevolent government has
raised wages and social services
manifold.
But as a result, pro¬
have

sourse

of govern¬

per

branch

our

offices

that a large percentage
population are actual par-i
Established

economy,

1856

H. Hentz & Co.
Members
New

But the great differ¬

York

Stock

Exchange

New

York

Curb

Exchange

Cotton

Exchange

York

New

Board

Chicago

Inc.

Exchange,

Commodity

Trade

of

New Orleans Cotton Exchange

other

And

Exchanges

N. Y. Cotton Exchange
NEW

YORK

GENEVA,

Bldg..

4, N. Y.
PITTSBURGH

DETROIT

CHICAGO

SWITZERLAND

pends on imports from hard cur¬

Royal Bank of Scotland

rency sources.

would be

a

wiser policy for

a

HEAD

foreign-made goods.

purchase of
better

output

the

than

LONDON OFFICES:

of - artir

3

ficially supported, local industries
would

which

in

pete

a

dollar

OFFICE—Edinburgh

Branches throughout Scotland

The latter are usually cheaper and

the

|

Incorporated by Royal Charter 1727

country to foster exports of
its own natural products and to
use
the cash
proceeds for the

such

Bishopsgate, E. C. 2

8 West

unable to com¬

be

economy.
Were
shortage to disappear

free

49

Smithfield, E. C. 1

Charing Cross, S. W. 1

Burlington Gardens, W. 1

suddenly, many of these national
industries could only be sustained

64 New Bond Street, W.

barriers
restrictions.

1

through protective tariff
and import

quotas or

TOTAL ASSETS

£155,175,898

Why We Are Losing Trade to
Great Britain

Associated

One of the results

of the dollar

Argentina of
300,000 tons of meat, . £53 million

nual

deliveries

worth of food,

by

Banks:

Glyn Mills

plated over the five-year period,
or about $5 billion, covering an¬

& Co.

Deacon's

Williams

Bank, Ltd.

$35
INVESTED in

a

full year's

subscription to the Monday

of the

and Thursday issues

>

"Chronicle"

will

give

you

cereals and forhge,

£29 million of linseed oil,

oilseed

cake, raw wool, etc.
Few of these
items could have been sold to the

ideas

galore and

liberal

pay

dividends.

United States because we produce

ourselves.
demanded too
much money for their linseed, we
managed to develop a sufficient
production of our own to replace
these former imports, and we are
abundance

them

in

When

Argentina

(Continued

:

wmtm«r"mm*m'mm'mm—mm

on page

25 Park Place

\

N. Y.

New York 8,

REctor 2-9570

N. Q.

.

...I

INDUSTRIAL STOCK INDEX
10-Year Performance

Externals—Internals

ZIPPIN & COMPANY
Tele. RAndolob 6-4696

of

35 Industrial Stocks
BOOKLET

Salle St., Chicago

B.

OVER-THE-COUNTER

SECURITIES

208 South La

Financial Chronicle

•

21)

FOREIGN

;

Commercial &

mijjjPIff5?3F+timmmihmmmrmmm^mm

Specialists In

and

worker.

wires to

materials for its factories and de¬

slumped dreadfully.

■
j
arising from the wide spread be¬ holiday with regular pay.
Generalization is always unfair.
tween the buying rate at which
the exporter has to surrender his There
exist
many
exceptions.
foreign exchange, and the selling Particularly in or near the major
rate which the importer must pay. cities, like Sao Paulo or Buenos
With lower interchange of trade, Aires, many offices and plants
these sources of revenue have de¬ can vie with United States stand¬
clined during the past year. An¬ ards of performance and output

other important

NY 1-1557

in

and hoped that their
work standards would improve if

ductivity

St., New York 4, N. Y.

NewOrleans, La.-Birmingham, Ala,
Mobile, Ala.

.

nature's

other countries

'

HAnover 2-070)

underpaid

in

i,

*

Members New York Stock Exchange

working
hours
and
individual
performances have been declining,
although often more than com¬
pensated by mechanization and
technological improvements. But
it
is, difficult
to
industrialize
agricultural populations, particu¬
larly if they are rather primitive.
Certainly, it cannot be done in a
hurry.
This task becomes almost
impossible of accomplishment if a
country fails to possess the raw

bounty. Typical is the experience
of a blouse manufacturer in Brazil
who felt that his workers were

ported

Ut- " * '

fact

our

efficiency
have
In addition,
on foreign-commerce,
and hardly a week goes by without a
religious or political full or halfforeign
exchange
profits

Government

mainly
posed

St.Louis lfMo#

mountainsides

neighborhood of the luxurious
hotels and apartment houses.
When we inquired, we heard that
the government had built housing
developments and chased the

.

low rates for business enterprises,
at
least as compared to
North

STREET

the

mium pay for regular attendance
a big volume with a
failed to have a better result.
profit per item, they do the
An abundant nature and warm
opposite-.
Thus,, one of the most
coveted items, American automo¬ climate have so richly endowed
biles, sell at huge premiums the country that nobody need go
without
food.
Bananas land
everywhere.
*
The inflationary trend is likely oranges grow wild; fish, fowl and
small animals are easily caught;
to continue unabated.
Under the
a
crude shelter gives protection
shelter
of
the
dollar
shortage,
Why work
local manufacturers encounter no against sun and rain.
for more than can be gotten with¬
perceptible competition from su¬
out effort? Money as such fails to
perior imported products. There¬
have attraction.
fore, the local industrialists can,
Similar experiences were
earn
re¬
huge profits, even if their

being.

INVESTMENT SECURITIES

example,

could not help but notice the
most miserable huts clustered on

one

doing

are of poor quality.: A crop
of new millionaires has come into

Stix & Co.

Rio de Janeiro, for

.

South

of this observer is found

It

Where \ve

goods

509 OLIVC

hemisphere,
the
classes show but little
aspiration for better living. De¬
veloping the backward nations is
an
excellent slogan and sounds
like
a
wonderful
project, and
poorer

In

■

Steiner,Rouse&Co

shortage has been the shifting of
much
foreign
trade from
the
he
raised the wage-scales.
As United States to England, particu¬
recently experienced the infla¬
larly as many countries have ac¬
soon as he had done so, his labor¬
tionary effects of shortages. The
cumulated blocked sterling bal¬
ers could earn in four days what
major countries have no price
ances.
This trend came to the
they had formerly gotten in five
ceilings for imported goods and
attention of the American public
or six days, and instead of work¬
the merchants admit quite frankly
through the much - discussed
that they need these substantial ing as many hours as previously,
Anglo-Argentine trade agreement
markups to pay fop their operat¬ they knocked off earlier because
signed last June 27. A total turn¬
ing expenses because their total they had enough money to live
out the rest of the week.
Pre¬ over of £1,250 million is contem¬
are

WM. J. MERICKA & CO.
150

southern

the

small

QUOTED
■

.accustomed

are

with

turnover is

Corporation

available

profit and thus help the inflation
along.
We have ourselves only

CO.

BANKERS BOND

is

time.

Importers

LOUISVILLE 2,

every¬

permitted unless the

currency

same

Preferred

operate

1st

Import

be obtained

where in advance ; of placing or¬
ders, and at least in Uruguay, no

Common

THE

who

frustrations, our anxieties?

ing to balance their exports with

5%

observer

industrial workers of Latin Amer¬
ica
want our civilization, our

types of control boards to regulate

Teletype NY 1-2813

Black Star Coal

this

just

everybody will line up to share in
the bounty.
But do the farm and

nation

their foreign trade. They are try¬

,

of

'

are

returned from a threemonth visit to five countries of
has

tiles, motion pictures, etc. Dollars
to pay for these items; have be¬
come
the scarcest commodity of
all, and practically all govern¬

i

';v-;v

■

amazement

goods,
particularly j motor , cars
and machinery-, steel, paper tex¬

electrical radiant

new

m

;

—

industrial¬ ticipants in the national

in Latin America wants American

On the other hand, every

The

con¬

sider themselves fortunate if they

Corp.

of

prosperous, educated people
with
cultural
desires.
To
the

obliged to reduce operations by approximately
30%.
The dollar squeeze is simi¬
lar

everywhere,

the
,

are

companies

2-7815

Bought—Sold—Quoted

potential consumers of almost
unlimited wants, and are ready to
plained about the inefficiency of
work
therefor
with
unequaled
their workers who could never
ambition and energy.
Whereas in
compete with the highly trained
skilled
laborers
of
the - United the other countries, the desire for
a more civilized life is only found
States.
Living standards of the
in a relatively small upper crust.
masses are incredibly low.
Only
No doubt, all over the world,
a small fringe of the populations

Repub lie—
plus the same

Members

New

Almost

: ; ;

and

eyes

ists, builders and merchants com¬

receipts of

the

federally
-

this

in

North

gambling

are

as

owned in Uruguay.

million from

frjC pONNELL & TO.

and

lotteries

lc
drop in the
copper
price
has taken $5

•——:

ence

to originate

countries from state and

further.

Every

:

—■—

—

.

in most

still

revenues

Rights & Scrip

Louisiana Securities

correspondingly. In addition, the reduced general volume

ment revenues seems

contracted the

New

^

Latin America, describes economic, conditions there, pointing
out growing distress arising from continuous inflation.
Says, because of dollar shortage, much foreign
trade in Latin America has shifted from United States to Britain, and lack of confidence in local cur¬
rencies is leading to flight of capital and high interest rates. Cites Latin America's willful dependence
on loans from United States, without taking adequate internal measures of relief, but points out vast - undeveloped resources, along with light taxation, as opportunity for American investment of penture
V; ''';•'/v;yVv,:- capital in Latin America. ;
vT:;/:T.
Deflation in the United States has brought inflation to Latin America. As prices for
the raw materials and commodities which we import have fallen, the dollar revenues of the
exporting nations have shrunk

-

Alabama &

By FREDERICK M. STERN
General Partner, Stern & Co.

*

■

\

f

.

Stern, returning from business trip to

Mr.

Commonw'lth & Southern

BArclay 7-5660

V

Thursday, September 1, 1949

Members, New York Stock Exchange

Southern Company

120 Broadway,

4

,

'

.

<

-I

*

j

■

*

f

The Growing

IN-

Niagara Hudson
United

*

t

FINANCIAL CHRONICLE

&

ON

REQUEST

National Quotation Bureau
4

Tel. CG 451

Incorporated

46 Front Street

New York 4, N. Y.

THE

'Number 4834

170

Volume

COMMERCIAL

INDEX

*

—Frederick

Cover

The Rationale of Consumer

J. Mcintosh

on petroleum outlook through next winter in area east of
Coast, oil economist predicts there will be need in this period
for substantially higher production of crude oil and refined products

Pacific

4

Credit—Roger Steffan___

4

v

^

Trust Investment Problems and Common Stocks

1

—Richard P. Chapman

area,

those states would require

ment in

W. Eckard____' :6

7

f

t

u

run

(

summer

of

De¬

tinually

on

u r e.

months

Healthy Corrective Program

Present Readjustment—A

L

19 4 9,

lw

______

11

_______

]; vv. *

•/

y

J94J).

of

'

Leslie Gould Contends Open-End Trusts Cause Market

e r e,

ing ' on; this subject,
-there'-.'? was * deferred

important

-

ahead

look

•270,000

Trust Share

Distribution 12

curtailts m a#,

on

Inter-

Magnify

Guaranty Trust Cb. Says Deficit Spending Will
Recession

...

~

15

p Demand

Mortgage Bankers' President Denounces Housing
Socialistic

Bills

as

formance

17

_______—_—

WOrld Bank Considering LOan to Turkey__^_;r,_____.:--____-

Priced

Houses

Assets of International Monetary Fund_____

—

21

28

Regular Features
It (Editorial)

See

We

future demand we

•"

■

thinking

the

Research

* \

;

the

.

upon

other
six

—-—-----

Securities

Canadian

Coming Events in Investment Field

—

Dealer-Broker—Investment Recommendations

8

—

Areas?"

13

.

Ahead of the News—Carlisle Bargeron—__

Indications of Business Activity

—-——

Mutual Funds

Bankers

day.
vary

*

Report—

Reporter's

Reporter on Governments.

-

Railroad Securities

Securities

—17

—

Salesman's Corner—

Securities Now in

The State of Trade and

Tomorrow's Market

Published

I

5
26

Drapers' Gardens.. London,
c/o Edwards & Smith.

E.

C.,

because

NEW YORK 5, N. Y.

SUGAR

(Oc¬
Raw

through March)

—

Refined

—

Liquid

Eng-

Exports—Imports—Futures

a

Weather conditions could
these forecasts of demands

products

up

or

down by

maximum of about 6% from

vary

21%
on
an
of weather

high.

Here

we

"

"
DIgby 4-2727

ijiiiiiiiiiKiiiiiiiniifiiiimiiiiiiiiiiiiiHk
mm

:

•

i.

ex¬

That

| Pointers
=

For

=

for selling

have used increases in

securities read §
Sales-

"Securities

=

man's

=

feature

5

a

regular E

every

Thurs- E

Corner,"
in

§ day's

Demand

Selling |

on

clever, helpful hints jjr.

5 the

to a greater extent.
Gasoline

\'£

issue

the E

of

|

| "Chronicle."

we would have
strictly burner or
heater count because there

space

of these

rent evidence of it.

These exports

do not reflect

military exports for
airlift, whch are shown as a do¬
mestic demand as a result of the
omission of these data as exports.

than

Kerosene and Distillate

•

Demand

The only additional comment is
evi¬
that
we
estimate, by the
first
dence of delayed buying in the
quarter of 1950 we will be servic¬
months of April, May and June.
We believe that some of the lower ing about 14% more burners than
in the first quarter of 1949.
This
sales
in
April, May and June
will require about 11% more dis¬
.were due to using up the product
tillate fuel oil.
This checks closeleft over from the previous winter
and in essence bought during the C/ r- (Continued on page 19)
seemed ; to

1111111 i M11111111111111111E11111111111111 u i

although there is no cur¬

season,

not shown sepa¬
- - , ■ -

a

that some

,

exports may drop off later in the

.-It should also be borne in mind
these increases in the fuels
larger

possibility

a

justments are smaller land, al¬
though they have been taken into
consideration and in the total of

are

//•/ *

-

considerably

^expected from

this week.

Twice Weekly

CO., Inc.

STREET

WALL

with an¬
During the

-

treme low to extreme

that

——36

Washington and You__
Not available

LL—

Industry.—————

(Walter Whyte Says)

96

true

last, winter-

increase

but

basis,

■-

basis

r

j

—32'>

Registration

LAMBORN &

-

rately. "

17

s

normal

all "products, are

15

Securities

Public Utility

be

winter.
of

below
normal. the domestic business of 4% to 5%
The -same conditions also affect (which we think is conservative)
with the exports increasing at a
residual
fuel oil and- liquefied
somewhat greater rate.
There is
petroleum gas, but here the ad¬

34

Security

Demand

predicated

for is the range of the effect of the
kerosene of only 9% for the do¬ weather on both sides of the nor¬
This means
mestic civilian economy, but when mal we have chosen.
allowance
is made for weather that-it. could be about 3% lower
this becomes 16% over actaal ds- or 3% higher than we have fore¬
cast. v
Individual months might
liveries of the prior period.
vary to a greater extent and the
X Comparably/ distillate fuel oil
fuel
products themselves might
is indicated.to irtcrease 13% on a

be

30

Offerings

Prospective

.

for total

adjustments to the previous year
which caused actual deliveries to

*

Observations—A. Wilfred May—

*

29

indicates

computation

Our

calculated

actual

16

_

on

might have depressed those sales
another 15,000 to 20,000 barrels a

.a

,

normal

13

News About Banks and

Our

r

7

52

—

NSTA Notes

Our

8

Sterling and Dollar

Einzig—"Can There Be Fusion of the

From Washington

16 \*

14

;

would

warm

months

tober

•

'

Bank and Insurance Stocks

*

B0ST0R Iff

Teletype-BS 123

HUbbard 2-3790

normal weather and if next

course,

Depart¬

adjustments that have to
give effect to weather

conditions.

Cover

——

3D FEDERAL STREET,

what pattern of buying is

All- the forecasts ate

•

be made to

___

1

why the real con-j
would be changed, no

used.

exports will drop 1%—giv.ng the
industry a 6% overall increase.
Demand varies considerably due
to

As

1923

INCORPORATED

v

Bank Notes Marketed__ _:____ 25

$163,500,000 Federal Home Loan
on

—

basic

the

Connolly & Go.

"

all of the
We estimate that the demand fuels were below normal by about
for all products during the nine ,430,000 barrels a day and this does
months (July 1, 1949—March 31, r.ot include a similar effect
on
1950) will increase 7%, while the liquefied
petroleum gas, which

Million in July____ 20

Presidents

Says Wallace F. Bennett, NAM

Market

our

ment.

Deficit Financing Danger,

Business Must Educate Public on

Report

19

,

Deposits of Mutual Savings Banks Up $40

of

■ •.

up

cannot;

which all industry per¬ winter were abnormally cold con¬
depends, we pay most sumption would be higher than
it and in trying to estimated here.-; The reverse, of

benefit- of

the

have

;,:

..,

r.'

Walter J.

to

determine the

Demand for Low-

Savings & Loan League Reports Continued

fort picking

.

attention

17

;.,

is

demand

Because

r

fact upon

•'

daily during the

Effect of Weather
;'.; .v..? * ;

~

matter

industry trends appear to be
in for a considerable reversal.

-

BOSTON & MAINE R. R.

any. reason

sumption

t;.';;

The

14

Mr. Attlee, Please Take Note! (Boxed)

Albert J. Mcintosh

takably: "No."'

r

14 #

:

_

see

Unmis-

be

XO

Estate and Treasury Departments Issue Memorandum

and

work¬

we
figure
baying of

this deficiency because we

seems

answer

»

barrels

these nine months

continue/ The

1 13

Function Shortly—

TEXTILES

quarter ended June 30, 1949. Al¬
lowance should be made during

these
m e n

NASD Completes Survey of Investm't

NEW ENGLAND

f

Nevertheless, from our anal¬
ysis,; which! has been checked
-$lth our market reseafch people

to see whether

<

11 J:

"Thinness"

Monetary Parley

t/J.-p "...

and others who have been

to

con¬

^

disappointing.
i t

Says President Truman___Cover

U. S. Must Help "Free Nations,"

national

carried

hand at higher than
until after- March,

This has made

H. Heimann

Midwest Stock Exchange to

1948 and

•normal"-levels

April, May
an d
jun e,

Babson___>____.___i„_ll£_^ 10 r

Businessmen's Fears—Roger W.

—Henry

9"

Telephone: WHitehall 4-6551

production of crude oil results in

the

mands for the

Charles F; Branhan

WALL STREET, NEW YORK

99

Recent curtail¬

separate forecast.

stills and in

to

check,

pay

anxiety

about

8

Direct Insurance Investment—Louis W.:Dawson_

crude

a

the

get

:

6...

Nathan_l_

Organizations—Ben Moreell

Problem of Agricultural Abundance—Hon.

buying.

consumer

This report discusses conditions in the United States excluding the
Pacific Coast States.
Because of radically different conditions in that

some

A Defense of

dealer and

*

work and

them to

put

today!

5

______.•

Some Thoughts on Nathan Report—E.
Economic Power of Labor

We'll

you'll

U. S.j Says shortage condition will be aggravated by delayed

in

'

Steel Wages and the National Economy—Robert R.

FOR OBSOLETES

'Reporting

3

and the Gold Standard—Philip M. McKenna

The Wage Earner

LABOR DAY

Economist, Socony -Vacuum Oil Co., Inc.
'2

A Forecast of 1950 Petroleum Demand—A.

1950

By A. J. McINTOSH

♦

Dollar Shortage

Stern

M.

3

__Cover

What's Ahead for Banking?—Marcus Nadler_;
The Growing Latin-American

(843)

Page

Super-Planning—Melchior Palyi___

Under

CHRONICLE

A Forecast of

Articles and News
Panic

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&

considerable

be

WHY MISS
when

you can

ONE

reach all?

Covering the financial market

and.

and

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means

>

Copyright 1949 by William B. Dana1"•'.* -V'-..,
Company ;

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*

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Reg.
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Thursday (general news and ad¬
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Every

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Other

Chicago

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"All the News That's Fit

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4

(844)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, September 1, 1949

The Rationale of Consumer Credit The Wage Earner
And the Gold Standard
By ROGER STEFFAN*

Vice-President, National City Bank of New York

Executive of

consumer credit department of large metropolitan
bank, declares consumer credit today,
supplied by 12,009 banks, is dynamic factor on favorable side of business picture and is making whole¬
some and vital contribution to
American economy. Sees vast army of consumer credit borrowers gen¬
erally able to meet payments and says consumer emergency financing is more necessary than ever,

because of high taxes

,

At this moment of

By PHILIP M. McKENNA
National

Chairman, Gold Standard League
President, Kennametal, Inc., Latrobe, Pa. 'vy-

Asserting better money rather than more money is
urgent need of
working people, Mr. McKenna contends, because of fluctuation in

incomes.

on

value of irredeemable
currency, wage earners
as to their
earnings and their insurance

gathering here, Henry Stevenson Doe has stepped hurriedly
City Bank and anxiously said: "My doctor has
just diagnosed the condition of my young son and he will require an emergency operation

into

®

I

tomorrow.

need

our

~~~

quests

And

He is

exclusively

in

of
re¬

quests,

in

office

confi11 y
and

specially

fur¬

d

t i

an

screened

e n

a

In
Roger Steffan

comfort

and

men

immediate

and

commodation

cited

not

are

remark-

as

number

to

the

ac¬

hundreds

who

women

at

the

Personal

will

Central

Credit

whose full-time

of

come,

Office

of

There

was

never

Reverse of the

In

of

staff

States

873

per¬

until

ades.

Today

this

of

useful

Search

the word

electric switch

-*•

bank's

child's

a

be

low

day and

And

another family
peacefully tonight.

age,

eco¬

reciting one
is to make;- a

if

it

ever-

she

appliances.

refrigerator;

a

quickly selects

a

model

new

!<pf a leading manufacturer, selling
~at

$230.

She

is

employed

as

a

^secretary at $2,200

a year and her
a position in the FiDepartment of the City of
TNew York at $3,000 a year.
They
Ihave two children of school

husband has

.

nance

„

age.

They hope the box

ered for

can

be deliv¬

their

wedding anniver¬
sary the next day.
The lady has
with

her

$50 in

cash.

The

alert

salesman says, "I think I can ar¬
range it; I'll phone the Bank".
/After the Bank's speedy credit
f

checking,
prompt

the

salesman

return

call

gets

"O.K."

a

To¬

-morrow the money-saving house¬
hold appliance will be the ad-

miration of the pleased family and

j

guests.
ness

more

r

Manufacturer and dealer

free

v are

to

of

about their

go

producing

goods.

The

and

the

Street",

who

of

the

best

and

banks in the

most

of

gage in consumer credit at the

tail

level,

and

I

reasons.

for

the

mention

best

such

of

areas

banks

service

rightly prefer

to

community

be

saying,

"What's

this?".

There's

bank

there
of

source

should

personal

will

enable them to say
"Help Needed"
to National City and

,

such

•

•[

other

aid

as

serve.

These

<:
1

two

credit.

But in many

the

cities,

this

who

in

are

places, even in large
provider might well be

the

tomer but not such

the

shoddy credit standards.
to

are

be

must

centration

be

of

kept

And

of

low,

per

accounts

we

carry

the

ume

budgetary discomfort.
implies reaching out to

more

That *'

slogan:

*An address by Mr. Steffan before the Annual Convention of the
i.West Virginia Bankers' Associa-

tion,_ White Sulnhur Springs,
Va., -Aug, 25,-1342..




W.

individuals,

should
of

be

because

considered

a

What

all

not

our

he

of

make

Vol¬

be

pain of fine

standard in the general trade

declared

and

or

own

Once

it

they

all

was

Warren's plan
of

gold until
$34.88

was

in

the

Treasury

with

to
in

at

imprisonment

any real money.

proceeded

Professor

raise

the

January.
which

price

1934

price

it

the

Treasury would buy it, or., sell it
foreigners, but no American

to

citizen could

have any.

Then

on

January 30, 1934 they rounded the
figure off at $35.00 an ounce and
trying

Professor

Warren's

quick

remedy to raise the price
food, for the benefit of the
farmer, because it hadn't worked.
of

V'

Economists studying the behav¬
told the experi¬
wouldn't work as

ior

of
money
menters that it

quickly as expected. The econo¬
mists' National Committee
on

Monetary Policy was formed in
November, 1933 to advise against
the

experiment, and is still telling

Americans

we

need

standard of

a

value, with redeemable currency.
At

any rate the New Deal, gave
that experiment and rounded

up

off the standard of

defining it
of

gold.

$20.66,
100

dollar by

our

l/35th of

as

Of

an

ounce

rating

course,

an

of gold at $35.00 instead of

it

as

years,

had

was

giving the
$2,806,000.

been

Treasury
This

for

neat

a

is

over

;of

profit

a

way

of

old

an

trick

practiced

by kings and dictators
Europe for centuries, and
as
"debauching the cur¬

in

known

rency".
ment

apostle of Bol¬

must

one

ounce

the

law that all gold
in to the

turned

That

more

the

gave

to

money

govern¬

spend,

of

course, but took it away from the

people who might otherwise have
it

spent

themselves,

saved

or

it

those

five

an

$3,800

and

age
a

this

needed
with

and

the

the older

between

under

none

so

to

so

a

!

•

Whenever) economic
always

asset

the

people, the
earners, those who depend
what they have "laid by for
rainy day".
This was true in

ancient and medieval

and

additional

in

times.

How did it
—in

free

upon

approved

us

come

this

paper

repealed

economist,

on page

18) :;;;

Professor

agricultural
Warren

of

in'; 1933, and of Lord
Keynes, and Englishman, America
Cornell,

was: induced to try an-experiment
i

in 1933 and 1934.

and

not

Professor War-

was

ounce, the laws

specie

reinstated.

own¬

nevsr

payments

The

power

President to further de¬
valuate the dollar expired in
1947,
and has not been renewed.
We
are

on

the

"limited

gold

bullion

standard", that is, we make good
to foreign countries at the
stand¬
the

in anything of intrinsic

an

the

of value

not

put
politi¬

the

prohibiting Americans from
ing gold or gold coin were

but

value?

happens in a case where
two
Supervisors can't promptly
find a way?.-,ft. might be reason-

(Continued

fixed at $35.00

ard

money

of

Price of Gold

we

.

an

control

•'

foisted

about that

America—had

made good

signatures of
;

countries, as
Russia, France, Italy
Germany of more recent
as

.

Although the price of gold

of

well

them

the

cians.

were

a

Build-Them-Up Policy

t

are

common

rainy day.

a

upon

;• riWhat

woqjd

chaos

those who feel it most

comes,

On the advice of

haye

suc¬

print irredeemable
money,.
Prohibiting the people's
ownership of gold or gold coin is
one sure way to curb human lib¬
erty.
as

cess

The third is

the loan is

;

certain of

is

for

wage

year.

sons.

In this fashion
the power of the public
purse was
taken from the
people and

free economy

about

approach, and

depend¬

are

communism,
steathily in its

bring

there

the

this is for

a

and

just out of high school and earns
$1,300.
So a combined income of
$9,100 is adequate for the amount

serve

5.wanted- write-an, opposite.numbfer

have

must

because

Perhaps they
liability."

a

years

made another trip to New York-—
in the present
—

blessing.

demonstrated that of all the meth¬

applicant has four children, three

aggressive helpful¬
ness through the affirmative
ap¬
proach.

day

first

contracted with¬

shevism, Lenin,

of them working. Two are past 21

business

could

or

The founder and

A phone call establishes that the

means

Charles Dickens

customer

about

ents?

on

people rather than of dollars.

If

at

of the world."

partial down payment on a home.
"Can this application be built up.

At the

now,

must

expanded

as a

par¬

amount

had

we

$1,500,

But

is

to make

are

out regard to the principles that
regulate the value of these metals

too

full

loan and the

when

is

$4,000
of

hold

to

they

ever

be

ticularly to a man 50 years of
age who has five in his family.

if

books one-fourth the number

our

course

[

•c

wartime

cost

of

loan

a

con¬

sufficient

volume

income
for

then

low,

acute

;

.,

the

yearly

cus¬

to produce

as

nomi-'

1933, the admini¬
a

ods to overthrow

small

to

nor

characteristic
of
a
currency
of
which the precious metals are not
the chief ingredient, or which can

proce¬

superlative service

Bank will handle under its

'

Jorkins

and

abound,

Variableness

The second Supervisor picks up
the application and notes that the

day will present
family and business situations of
3,000 different varieties which the

:•

Spenlow

are

a

of

reversal

wages

it appea rs

as

March

quit

inclined to consider

on

The ideal setup I should
say
would be one where there would
be sufficient competition to assure

among

typical

our

effective than

more

opportunity to watch the ebbs

money

committee-member,
slant

cheating

money."

which

described

your

for

nally the same, or even somewhat
higher, they are greatly reduced
in fact by s p u r i o u s currency,

dure.

one

best.

quickly get operating ratio was 133%
higher
they may de- than it lis
today. But unduly low
volume, unless transitory, causes

persons

perhaps 3,000

! of

a

has been

Although:1jtheir

On the contrary, he con¬

another

contrivances

said, "Of

Engaged from day to day in use¬
ful toil, they do not perceive that

obdurate

most

Dickens

as

sults

there

later

"the

not

every

operating ratio.
Volume
important in this business.

which

is

men,"

Jorkins.

operate.

the $6 a month they will be
pay¬
ing to complete their ownership.

credit

of

once

and flows of the money .market.

may

It ought to be true that in

down

pendable

visor

in which certain

the chief
exchange for workers.

munity have neither the time

not add up to im¬
mediate approval.
However, in
the exceptional case the Super¬

banking
limitations,
competitive conditions, statutory
rate problems, and the particular

irre¬

Jackson, a true friend
democracy, remarked that,

the

which

application

branch

as

selling

) Also they will better establish de¬

of

factors

is

by excessive bank issues is always

In perhaps once out of 10 times,
the investigated facts on the loan

re¬

trouble

attended by a loss to the laboring
classes.
This portion of the com¬

Spenlow complained to
David Copperfield, do not exist in
this modern concept of personal
credit. Let us for practical illus¬
tration
briefly visit some key
spots in this business.

en¬

the

of

products.

Treasury, through the banks, and
no

"The progress of an expansion, or
rather depreciation, of currency

ap-

the

-

on

laboring classes of mankind,

of

a lot of doing. The
negative approach,

of the

Philip M. McKenna

sav¬

Andrew

validate

to

the

per

Well', it takes

effective

country do not

seek

insur¬

root

agricultural

6,
stration passed
coins must be

that which deludes them with pa¬

are:

in

knowing it, by calling in all

On

old age

none

this

on

views

possible personal loan

fetters

every
bank,
everywhere, enter into this type
of business? Certainly not. Some

rates

and

Those

rise

a

it came about that
and salary earners, were to

it.

Daniel Webster

lication."

busi-

husband

t."

e c

every

in

wife will find they hardly miss

3

j

see

managing the
supply of paper money to increase

a

deemable paper money,

amounts

to

the gold
money and

has

medium of

con¬

never

"Searchingly

■,

rShe wants to buy

b

s u

'

household

The

personal

language, "has his views

proposes

our

sit-

ings accounts, and bonds.
Why do these conditions exist?

The National City exponent of
lender's function, to use Dickens'

tl

in

in

of

skilfully deprived of part of
earnings to gain the support
the
politically powerful farm

of

depending

ance;

all

ed

"Man

This

benefits,

Spen¬

as

Committee

need

groups. It was to be done without

dol¬

at ion

the

a

* At the same time, Mrs. Alice might better be nominated for dis'.Margaret Roe has hastened into tihctibh as the "Mail in the Driv¬
■one" of the branch " stores
l' '
t -r
>
up in ers'Seat." I!l
4 the
Bronx of the cfty's largest
Should' therefore
'dealer

about it

This

monthly-payment

provide successfully the finan¬
cial "Help Needed" for the socall-

Another Hurryup Order

(note

"Approval"). Nor would

:

urgent

their

is only

upon

grades of signatures, are deter¬
mined by the size and nature -of
the request. 'H
<t

to

be

sing

a

bro ught

from $50 up.
sit in joint session on
any one loan.
The amount of
scrutiny, and the number and the

bank, in this
be too old or

perfection

Their

h

1933

lars.
u

any

did.

credit

Perfection

large to seek less than

elusive

of

ing

"Man

no

can

wage

sists of some 45 Credit Super¬
visors who are experts in extend¬

experience
A conclusion to

drawn is that

too

call

Committee

don't just talk

particular point.

'health, even life, may be assured.
"Hospital and doctor have their
money. Their creditors don't have
more

in

purpose

they

one-third that

of

member

a

the

how

power

of the members by
the
name
of
Spenlow, because
they all actually and continuously
pratice reasonable liberality and

1

The

as

Approval

They
for

of

are

you

maturity.

The

price
That's

p u r c

Dicken's Situation

included

wanted

but

are

hard ship to
all those who

the

credit

helped the

ren

circulation

worth?

the

not

is

money

what

is

dec¬

more

Depreciated

today,

National City Personal
Department, the reverse
of this situation prevails.
Jorkins

popularization

and

has

two

Pay-day" to achieve

a

nomic

last

the

sound

instrument

with

suringly to the customer and says,
'"Certainly, just fill out the appli¬
cation
and
the
money
will be
ready for you when you sign the
,*note."
Almost as if by pressing

these

than

was

.

Credit

thing to approach it in the United

today.

Says aban¬
safety fuse

like removing
electrical circuit.

dollars

more

in

of the

any¬

Department

will receive a report, "excellent
previous record."
He turns reas¬

fto wait.

business deal.

a

character

90,000 hopeful men
are
treading similar

some

the world.

works to the pleasant strains
of broadcast music.
Instantly he

Sleeps

vorable terms in

rather

money

people

an

currency has jeopardized the
interests of all those in America who
toil with brain or
brawn
The
economic security of individuals and
families is in peril. Of course
there are
<e>—

comply except for that immovable

truth, while these 3,000 enter¬

cost,

sons

-an

Better

working

Spenlow, the
seeming
soul
of
warm generosity, told eager
Copperfield he would be delighted to

on similar pressing missions, dur¬
and women
ing the next few hours. The inter¬ paths to some 12,000 banks in
viewer, in this instance, will be every state in the union. There is
making a direct call to a standby nothing like it anywhere else in

the

partnership of SpenDavid Copper-

Jorkins.

and

field, you remember, sounded out
Spenlow about getting more fa¬

day after day.

on,

prising New Yorkers are request¬
ing "Help Needed", this same day
throughout the
country,
under
varying conditions of service and

nished to pro¬
vide

low

Jorkins, the "no" man
partnership. Whatever Copperfield proposed, Mr, Jorkins al¬
doubtless this could be narrated ways stood in the way of Mr.
with local overtones in many cit¬ Speniow's leaning just a wee bit to
the favorable side.
ies and towns in West Virginia.

handling

thousands
similar

to his classic

in.

unique examples.
In fact,
because they are everyday occur¬
rences, they point up something
that has been happening in Amer¬
ican banking in the past 21 years.
Except as to the somewhat stag¬
gering
number of transactions,

train¬

ed

streaming

come

donment of gold standard in 1933
from

Because

today.

made insecure

are

benefits.

~

ably

inter¬

viewer

so

~

another 3,000 odd re-

may

These

Personal

Credit

work

ffjtomorrow

saying this to
a

"

"Today's

$600.

Can I get the
cash right

away?"

both

of the 67 branches of The National

one

of $35.00 per

ounce,

Treasury's obligations to

American

citizens

is

still

In

other words, paper
not redeemable in gold.

denied.

money

is

Only sil¬
certificates, mostly $1 and $5
bills, are still made good, at least
ver

in part

into

This

value by being redeemed

silver

is,

of

dollars
course,

(Continued

on

on

demand.

better
page

24)

than

COMMERCIAL

THE

Number 4834

170

Volume

Steel

FINANCIAL

&

5

(845)

CHRONICLE

Trust Investment Problems and Common Stocks

Production

■

The

Electric Output

By RICHARD

Carloadings

Staie of Trade

Commodity PVice Index

and Industry

Business Failures

(1) changes in purchasing power of monetary unit;
(2) changes in interest rates; (3) the credit risk; and (4) risks of ownership. Describes problems in¬
volved in investment of trust funds under present economic and legal restrictions, and discusses policy
of inclusion of stocks along with other securities in diversification of investment. Opposes stereotyped
policy in selecting investments for separate trusts, and advocates flexible policy conforming to current

er

Production

J
With many

industries laboring to fill current orders,

production for the country as a whole advanced
week, but continued to hold moderately under the high
preceding year.
■
'
,
trial

conditions, Boston bank¬

Stressing relationship between investment policy and changing economic

Food Price Index
Auto

P. CHAPMAN*

Merchants National Bank, Boston

Executive Vice-President, The

Retail Trade

total indus¬
slightly last
level of the

outlines

as

categories of investment risks:

conditions and individual circumstances.

Investing money is an intensely practical art. Those of us who are engaged in it spend
large proportion of our time in attempting to appraise economic and social trends, in mak¬
For the week ended Aug. 6, latest available figures show that
ing comparisons with a more benign past, and in discussions of economic and political
total claims for unemployment insurance in this period increased by
theory.
All
<$>about 2%, remaining considerably above the low level of a year ago!
time to review some of the more
of this is necIn the same week initial

.

:

a

any

claims rose almost 22%.

e s s a r

the week ended Aug. 13 increased almost desirable, for
points above the revised figure of 83.3% of capacity in the previ- invest¬
week. Paper board production advanced nearly 4% in the week
ment,
not
exceeded the level of a year ago by 1%.
being j con¬
This was the first time in six months in which paperboard
ducted i in
a

Paper mill operations in
two
ous

and

production surpassed the level

of

a year ago.

working

about 6% above a year ago.

a

pothesis about

commitments were frequently received
as many merchants had placed limited initial orders.
The wholesale
demand for women's clothing increased noticeably with a substantial
volume of orders for dresses, coats and sportswear.
In many in¬
stances deliveries were not as prompt as desired.
The interest in

it

be

no

accepted
of

way

■

hy¬

and Winter apparel became more numerous

If

find

re-

vacuum,

approximately 10% and were quires

New orders for paperboard rose

of them obsolete.

basic
investment
policies
and
that we can
avoiding all of practices in the light of their pres¬
{
these risks, basic questions remain ent-day pertinence.
;v': ''
""
v
l."
^
as to which types of risk are most
Problem of Type of Investment
acceptable in a trust investment
First is the question of what
today, and how and to what ex¬
tent a trust fund may properly types of investment to place in
be exposed to a single type of our trusts.
Here the trustee can¬
risk, such as that of equity owner¬ not be blamed too much, for he is

"

and

y

current condi¬

Re-orders for Fall

during the past week. Sizable

men's

wear

tions
i

set of

remained moderate.

Textile order volume continued to be

But

mand and it was more

as

considerable

a

Richard

policies

P.

Chapman

substantial last week. Most

cloth markets remained in large de¬
difficult to secure goods for near future deliv¬

withdraw

cies
for

after all has been said, we

always come back to the problem
of what immediate disposition to
make of our funds.
We cannot

items in the carded cotton gray

Funds law

them

to

some

invest¬

there has been
criticism that poli¬

recent years

In

and rules.

purchased slightly more than in the preceding
with total unit volume approximating that of a year ago.

Retailers of food
week

Criticisms of Use of Trust

fully

much

to

what

is

available

and

permitted to buy by
by the provisions of his

to what he is

stment

n v e

outlook
as

limited

ship.

the

and

.

practices in gene~fal' use
trust
investment, which to
and

and

trusts.
new

As we know, no

forms

of

basically

investment

have

evolved, but merely adapta¬
tions of existing forms such, for

been

as
municipal revenue
extent may have rested on example,
premises, have become out¬ bonds, and the savings bond issues
of the Treasury.
For practical
moded and require scrutiny and
redefinition.
The argument runs purposes, the trustee is limited to
bonds and stocks and,
to some
that there is too much concern for

some

false

of dol¬ extent, real estate mortgages.
unresponsiveness to the Thus, if the critics have anything
be insulated from the shocks of
teal
investment needs of trust specific in mind, it must be an
Industrial output increased in August—the first upturn since last
our world.
They must, perforce,
increase in trust holdings of com¬
beneficiaries and an absence of
autumn, according to the Federal Reserve Board. Steel production be
placed at risk. Our daily job
mon stocks, since this is the only
during August, the Board added, has run at about 83% of capacity, continues to be the study and se¬ adaptation to fundamental eco¬
available
avenue
of investment
against 71% in July and 73% in June. It also reported greater activ¬ lection Of those risks that we deem nomic and social change. Doubt¬
not fully exploited.
less these critics would borrow
ity in some nondurable lines and a pick-up in coal mining. The August
appropriate for the accounts we
From the standpoint
of legal
gain followed a drop in industrial production during July to 162% are managing, in the light of the with approval these words from
Abraham Lincoln: "The dogmas restrictions, considerable progress
of the 1935-39 average, it continued. This compared with 169% in
times
through which
we
are
Not only has the
of the quiet past are inadequate can be reported.
June and 195% last November. August output may be close to the
passing. And in this daily process
to the stormy present ... . As our modern tendency of legal drafts¬
June rate, the Board declared.
we
can never lose sight of the
case
is new, so must we think manship been to grant wide dis¬
prime importance of price, for
cretionary investment powers, but
anew and act anew .
. We must
A drop=in manufacturers sales' in July to $15,000,000,000, repre¬ risk is a direct function of the
in recent years we have seen the
disenthrall ourselves."
senting a decline of $1,500,000,000 below the June level, was recently price we pay for. a bond or a
If these criticisms represented widespread adoption of the prud¬
reported by the Commerce Department. The dip, the Department stock^ If a stock or bond is cheap
ent man rule.
Let us hope that
merely another outcropping of the
pointed out, was most pronounced in the iron and steel and electrical enough, it can fully discount all
this Magna Carta of trusteeship
purchasing power of money, or
equipment industries. It noted further that a "substantial decline is of the adversities of the general
will completely supplant the legal
normal" for July, due to vacation closings. With regard to manufac¬ business and political outlook and hedge against inflation, theory,
list method of selecting trust in¬
we
might be ready to ; dismiss
turers' inventories on July 31, the Department placed them at $29,- the theoretical risks that surround
vestments.
This
latter method
them.
We
cannot protect our
it, short of repudiation or confis¬
600,000,000, or a decrease of $500,000,000 during the month.
has the-meritorious objective of
beneficiaries
from
the
conse¬
cation.
preserving the trust principal, but
quences of fiscal folly and depre¬
it is based upon a misconception
Latest developments iri the steel wage controversy reveal that the
Feur Categories of Investment
ciated
money
for the sufficient
of the true relationship of the
Risks
Fact-Finding Board in the dispute between steel producers and the
reason that we don't know how to
trustee to the trust property and
United Steelworkers, CIO, notified both sides on Friday last that
Since this question of relative go about doing so, certainly not
to his beneficiaries and is, more¬
it would be willing to mediate their differences. The United Slates
risk is the essence of the invest¬ without casting prudence to the
Steel Corp. and the union were expected to reply to the Board on
over, lacking in the flexibility so
ment
problem, and forms the wind^^ ^^ ean^have hto; duty to
necessary to successful investing.
Tuesday of this week but following a conference cm that day a
basis of our discussion today, it perform something beyond our
Tbe argument has been advanced
committee representing the steel companies indicated that such
might be a useful preliminary, capacity and experience. The type that the prudent man rule, while
talks must be conducted on an individual company basis rather than
monetary and governmental
however elementary, to enumer¬ of
on an industry basis.
In view of this decision the board withdrew
producing good results in skilled
ate the broad categories of risk to debt inflation that we have been
and experienced hands, is a dan¬
its offer to mediate the dispute and notified the United Steelwhich investments are exposed. experiencing is not a copyright of
workers; CIO of its withdrawal of the offer.
our
present leaders; by similar gerous instrument to put in the
These appear to be four:
hands of trustees generally.
This
The board now
will proceed to write its report containing
(1) The purchasing power risk, devices politicians have been de¬
is not only weak in logic, for a
recommendations for a settlement of the dispute. This report must arising from changes in the real frauding the industrious and
sound objective should be to place
be submitted to the President not later than Sept. 10.
value of the monetary unit. Even thrifty for several thousand years.
trust investment in skilled hands
cash,
bank deposits and
other The only known cure is to get rid as
largely as possible, but it is not
of the politicians before it is too
STEEL OPERATIONS SCHEDULED THIS WEEK AT 86.3% OF
liquid assets are fully exposed to
supported by experience in those
'
*
CAPACITY, THE HIGHEST RATE SINCE WEEK OF JUNE 13 this insidious danger, as are all late.
states where the rule has been in
The subject cannot be dis¬
The steel industry has just amazed itself by making at least bonds and preferred stocks, and
effect for many years.
It would
indeed all conventional forms of missed so lightly, however. There
-600,000 tons more steel in August than its most optimistic executives
reduce trusteeship to its lowest
are doubtless trustees with an in¬
thought possible. The pickup has now carried on too long to be called investment in some degree, in¬
common denominator.
While the
clination to take the easy path
a flash in the
pan, states "The Iron Age," national metalworking cluding common stocks.
prudent man rule is not a common
and to shirk the hard work and
weekly, in its current review of the steel trade. Nor is it all strike(2) The interest rate risk, about
stock rule, the inevitable practical
hedging or any of the other labels that were tacked onto it a month which we will have more to say responsibility that alone produce effect of its application today is
It is a matter of record, of a superior investment result, an an increase in trust holdings of
ago. Buyer fear of a steel tieup certainly played a part in boosting later.
steel order backlogs.
But much of the business now on steel mill course, that obligations of unques¬ affliction that has been aptly de¬ stock.
r\'
tioned ultimate security sustain scribed as the "G" bond complex.
books represents a return to normal buying patterns.
Thus we can report a marked
Such trustees need a goad.
Some
trend throughout the country to¬
During the past week several top steel executives privately ad¬ wide price fluctuation in periods
of the issues raised, moreover, go
of changing money rates.
ward liberalization of laws and
mitted that they were wrong in laying the upswing entirely to strike
deep.
Before we get to a discus¬
customs in respect to the choice of
(3) The credit risk, where some
fears. Buyer gloom was so heavy in June that many steel sales exec¬
sion of how to invest trust money
degree of doubt exists as to the
;;
(Continued on page 22)
*
today, therefore, let us take the
utives could see mothing better than a 75% operating rate for August.
ability of a promissor to fulfill
In Pittsburgh they were talking about a 70% rate for the industry his obligation in full and on time.
based on cancellations and just plain lack of orders, this trade au(4) The ownership orI equity
WE ARE PLEASED TO ANNOUNCE THAT
risk, which embraces all of the
thority points out. >
s;
risks inherent in participating in
A strike in steel, autos or coal could wreck the forecast but
the ownership of a business
MR. EDWIN JACOBS
if they can all be avoided steel's prospects look good.
October
(Formerly with Blair F. Claybaugh & Co.)
through common stock.
^
promises to repeat its normal seasonal strength.
Every form that trust capital
Several metalworking lines have now picked up enough to stimu¬
IS NOW ASSOCIATED WITH US
can take appears to
involve one
late overall steel demand, the trade magazine observes. Appliance or several of these types of risk,
production continues to improve across the board and Detroiters and in greater or lesser degree.
don't look for a drop in automotive steel demand until November. It'is also worth noting that none
of these risks is new; neither is
Farm equipment makers expect a good fourth quarter and a nice
than in previous weeks.

ery

&

ment

*

*

Shangri-la where they will

a

false stability in terms

lars,

an

.

■

.

#

,

.

Stanley Pelz & Co.

volume next year at

5 to 7% below

current levels. Construction has

adds, that some mills are now a
of structural shapes. Mechanical tubing
is no chance of a return to 1948 levels.

picked up so sharply, the trade paper
month

behind

sales are
•

on

delivery

better but there

^-'t, (Continued




on page

25)

"

*

A paper

by Mr. Chapman

before the Western

read

Regional Trust

American
Bankers
Association, Salt Lake
City,-'Utah, Aug. 17, 1949.''
Conference of the

40

EXCHANGE

BOWLING
AUGUST 29.

194#

PLACE, NEW YORK 5,

GREEN 9-5580

N. Y.

TELETYPE NY

1-3089
''

6

(846)

THE

COMMERCIAL

FINANCIAL

&

CHRONICLE

Steel Wages and the National Economy

Some

By ROBERT R. NATHAN*

i

than

more

:;!

Stresses enlarged

buying

power on

part of

masses

comes
from
as the
Department of Commerce
Bureau of Labor Statistics and the Federal Reserve
'
System Although
,
the sampling^-

the usual government sources such

be somewhat skimpy
may

In his

concluding document entitled "National Economic Consequences," Dr. Backman
summarizes what has already been discussed. It seems useful, especially in view of the vast
mass of data and
interpretations which are presented to this Board, to try to bring together
the ^

of

some

problems
volved

in¬

in this

important
issue.

Dr. Backman
back

comes

again

the

to

matter

national

of

a

wage

1945,
1946. The variations in

and the im¬

in the amounts of wage
which were granted.

steel wage

For

in¬

would

the

August,

there

crease

small

substantial

a

dispersion

increases of

to

permeate

It

economy.

ability to

pay

the

the

of gov¬

use

sta¬

ernment

tistics.

Those

us

who

write

occa¬

of.
E.

Eckard

W.

period when
almost univer¬

'

sional

articles

*

Tor free

\

small "honorariums"

instance, in the textile mill sal. Yet it was a period in which
industry we find that wage increases [varied substan¬
of

no

are

Productivity
The question of the
of marginal

gregate

or

for

delighted

with the excellence and availabil¬

wages

by the discussion of

aggregate wages

income

as

a

of ag¬

part

and

In spite of

power.

relationship

productivity to

is suggested

purchasing

short section
which pays lip service to the idea
that productivity is in
a

someway,
connected with
wages, Mr. Nathan

with divorces

quarrel

products
38.2%

equaled

applied
large
ag¬

to

was a
was

can¬

gregates.
There is

sector

every

i ts

when

postwar

tended

to

u n

this data

period because the
and May,
workers were trying to recover
the patterns of wage changes in -the decline in their real
earnings
that period among industries and which had resulted from a shorter
within industries is quite strik¬ work-week and a
runaway price
ingly in contrast with the impres¬ situation.
They were striving to
sion which the companies' spokes¬ get a fairer share of the
products
men
have
attempted to create of American industry. That was a
here. In industry after industry period in which
wage
increases
is

applied

not be

between

movement

petus which a

if

1

occurred

j
V

University of Arkansas

Almost all, if not all, of the data used
by Robert Nathan in his
report "A National Economic Policy for 1949"

prosperity basis.

as

Nathan Report

on

ByE.W. ECKARD

recent

which will help restore prosperity to all industries. Says excessive profits lead to less rather
investment, because they restrict consumption, which is most basic determinant of investment

decisions.

/

Professor of Economics,

Mr. Nathan contends that if wage increases come in those industries which possess ability to pay them,
there will be favorable and positive economic consequences to national economy in form of greater buy¬
power

Thoughts

;'y

•

President, Robert Nathan Associates, Economic Expert, United Steel Workers of America-CIO

ing

Thursday, September 1, 1949

wages

paid from the

ginal

product

wage

increases

there

has

when

he

when

oeen

for

obviously,

increase

no

productivity. This is
particularly when he
case

states

the

without

price increases.
The

"in

noticeable

increases

wage

mar¬

favors-

v

■

main

gist of the report is
that wages should be increased in

were
in
tially^mong industries. Surely ity of the government figures. In¬ many cases
merely because more
granted
in¬ such variations as are shown in deed, the average college instruc¬
consumer purchasing power is necup to .10 cents per Table 32
of Union Exhibit 4-A tor of economics uses much of this
essary.
It seems to be describing;
/,//■ ;//;/,
that this hour, 32.1% were in companies would be magnified if the classifi¬ data in his daily teaching. But, in a situation
where "excess profits'"
jBoard
must
conclude
that
this in which hourly earnings were cation
by industries were more such a highly touted study surely are
paid to wage earners in the
-economy
is now back substan¬ increased between 10 and 15 cents detailed.
it. would be reasonable to expect
form of raises and that those wage
tially on a peacetime basis. True, per hour, and 24.9% of the em¬
These data. are. much more im¬ some well done case studies ana¬
earners will spend their
■we are still spending $15 billion
previous
ployees were in companies which pressive in demonstrating the lack lysing,
relationships
of
costs,
wages and increases immediately.
for
national
defense
which
is paid between 15 and 18 V2 cents of a true national
wages, prices and profits in ap¬
wage pattern
There is not adequate proof to
,»iany times the prewar level; we
per hour
more in" wages.
The than are the data submitted by propriate fields of industry. It is
demonstrate
that
increments
of
^are
spending billions for veterans' same thing was true" in food in¬ Dr. Backman in Table 1 on page difficult to believe that a verywages are less likely to be hoarded
affairs largely as a consequence of dustries, in the apparel industries, 15 of
Companies Exhibit 5 >which large sum of money could have
than corporate profits.
World War II; we are spending in
the
paper
industry, in- the is designed to show the rigidity been paid for a study without such
billions for overseas rehabilitar chemicals
In his concern with aggregate
industry,
in
many of %■ wage pattern. .Dr. Backman analyses.
If the fee for rnaking
tion, also arising out of the war others. In basic iron nad steel the presents information for two in¬ this study were large one wonders purchasing power Mr. Nathan does
and the related political conse¬ differential
was
much
smaller dustries which are
if the costs of and profits from not consider the effect of wage
largely homo¬
raises unon margins of productiori
quences; this country is disbursing within the industry and most of geneous and
substantially domi¬ making this study agree with the
billions for interest on the na¬ the workers were employed in
and break even points. He implies
nated by large companies and for conclusions expressed.
tional debt which increased more companies which paid an increase a
that wage raises will have no ef¬
few very big corporations and
than fivefold during the war;
of I8V2 cents per hour
fect on the volume of employment.
The Method of Attack
during this indicates that these limited ex¬
/. Nonetheless 1 the general eco¬ period. This is not unusual be¬ amples are ' evidence of the na¬
Since, in his plan, wage raises are
Mr. Nathan attacks the problem
nomic characteristics of the war cause, as many of the
to' be limited to firms where prof¬
companies tional wage movement.-. In refer¬
of
the
attainment of economic
its are high the problem of the
| and the immediate postwar period have already here testified, there
ring to his table Dr. Backman on stability at a high level by dis¬
are how behind us and America is
tended to be uniformity in
effect of wage raises on the mar¬
wage page 2 of
Companies Exhibit 5 cussion of aggregates of certain
back largely on a peacetime foot¬ changes and rates in the
ginal
firm
is
eliminated./But,
industry spates;
{
y
;y. / income Ilows such as corporate what will be the effect of this in¬
ing; What happened during the even before the union was ever
"In the light of this past record profits, personal saving, personal
war is not a basis for
crease in wage rates on the mar¬
organized.
every deci¬
and the demands already served consumption expenditures and the
sion and every act undertaken at
gin of employment in the high
In; Table 31 of Union Exhibit upon companies in all of these in¬ like. Most of us will
agree that a
this time. Even what happened in
profit firms? It is difficult to be¬
4-A, there appears an analysis of dustries in
of
these -quantities > will lieve that a raise in
1949, it is clear that study
; the immediate postwar inflation¬
wages without
changes in hourly earnings be¬ what
happens in the steel industry fhrqw much light on the economic a raise in
ary peri.od should not be a model tween
prices will not diminish
October, 1947, and October; will become the basis for settled problems of the
day.. But is it de¬
for what will be or ought to be
employment. Or, perhaps, the em¬
1948. Here again we find evidence
merits in other industries."
Z/A sirable to assume, as Mr. Nathan
■done at this time. 7,
of substantial variations in
ir
ployers are supposed to pay the
wage
Elsewhere in his presentation, apparently does, that the problem increased wages to the same num¬
V
During the war, with controls charges among the 134 manufac¬
of economic stabilization will be
page 22, Companies Exhibit 2, i)r.
ber
of
essential throughout the
employees although the
economy turing industries into which the
solved
if
we
stabilize
and/or
and with profitability among in- United States Bureau of Labor Backman noted that:
productivity of certain marginal
equalize certain flows of income?
dustries being most favorable al¬ Statistics classifies
"In
1949.
groups is less than the wage.
If
however, economic
manufacturing
truist universally, it was
The main point expressed in the strong pressure is exerted against
natural companies., We find that 10% of conditions in the (textile) indus¬
that various changes in such items all
try had deteriorated to the point report seems to be that whenever lay-offs a large amount of "feather
"manufacturing/ employees
as wages would
several
tend to develop worked
arbitrators /have profits
reach
a
certain
V
in industries
height bedding" may result.
in which where

give to such
movement.

Robert R. Nathan

to

seems

a

It

me

companies

workers

which

of

creases

5

.

■

.

?

••

.

.

.

into

pattern.

a

ceded,

;

the

As

the

pattern

also

considerably, although

•

'

tinued

;

As evidence

t

war

re-

changed

wages con-

company or

ta rise

the: companies

;

the

fact

that

submit

here

contend,

the

ruled

tween

nounced -their decision to seek

be¬

year

October

tober, 1948.
the workers

big

big industry wage inwere not as
important as

creases

.•

in most industries.

of

average wages increased less than
5 cents per hour in the
of

1947

and

Oc¬

About one-fourth of
were

per

hour during that

year.

against
union

new

-wage

have

an¬

no

refurbishing

increases."

Wage Increases Economically

y///:;;'[/;

; States

Bureau

of Labor

Statistics

and

;

of

-

referring to 1948: "By the end
April, before any major settle¬

ment in such

tion

heavy-mass produc¬

industries

<biles,

electrical

as

steel, automoequipment and

U coal had been made, it was esti¬
mated that from a fourth
to J a
./third of organized workers 'had
received their third
postwar in¬
.

cents

or

more

hour

per

during

that pfenod.

In industries employ¬
ing nearly half of all manufactur¬

ing workers average wages in¬
creased between
10, cents and ,14.9
cents per hour, with an almost
even

break between the industries

with average
wage increases of 10
cents to 12.4 cents
per hour and
those

with/average

In

;7':.

■>

Union Exhibit

ttnitted

#1

'

them."

''

three

and

32,

4-A,

y

y ■ ';

.

As expressed before, if wage in¬

.

creases

which

come

possess

in

those

the

industries

ability to

pay

taken

would

we

sub-

tables, Numbers 30,
to

demonstrate the
variations in wage
changes which
;have occurred since the
end

/war.
w

These 'tables

directly

from

were

official

show

variations

increases

in those industries where the

among

industrial

economic theory

which looks upon wages as a nec¬

cost of production.

essary

-:•/./

/ He

to

pay. •;

Such

a

development' is

sub¬

k

i

,,

,

■

\i
;

half of the United Steel
Workers
of America before the
Steel In-

dustry

Fact-Finding Board, New

Cork City, Aug. 25, 1949.




major indus¬
tries is quite substantial for each

will

among

of the

years

under

consideration.

It is true
average wages increased
all major industrial
groups in

in

have

exceeded

reason¬

some

able level during the postwar pe¬
riod

and

particulary those where

to/believe

seems

purchasing

power

and

to stabilise

profits at a reasonable
level, whatever that is. Apparent¬
ly this scheme purports to make
the

laborer

for the

the residual

claimant

of production

with¬
out any assumption of risk on his
part. What happens when profits
are

cream

below

Are

this

laborers

lower wages

reasonable

Level?

accept
in order to maintain
prepared

to

at the accepted reasonable

level? This question should be an¬
swered before

a

residual claimant

.

*

its

higher wages
prof¬

'

ability profits

further/ substantial

highly desirable from the point of
namely, the United States Bureau groups., "
view of not only the workers but
]
of Labor Statistics.
It may Vbe
In Table 32 of Union Exhibit also the employers and the econr
;
worth a moment of
our
time to 4-A we have shown the
omy as a whole. \ Many, many em-,
percent¬
* refer
back to
those fables.
In
ployers in the more depressed in¬
age of increase in
straight-time
Table 30 we showed the
amount
hourly earnings among major in¬ dustries would be happy today to
g. of wage increases in cents which dustrial categories for three suc¬ be enjoying higher levels of ac¬
,'f
"
cessive years,
•
/« ;running from April, tivity and higher wages.
I
^Abstracted from rebuttal state- 1945, to April, 1948. Here again
If collective bargaining in vari¬
t ment made by Mr. Nathan on bethe variations
ous
industries
sources,

ask for and obtain

consumer

<

of them, there will be favorable and
12.5 cents to 14.9 cents
per hour. positive economic consequences in
I believe that here
again we find the form of greater buying power
a
very substantial variation
be¬ which will help restore prosperity,
tween
industries/ and l am sure to all industries. Thereafter, wage
that a similar table
showing the increases may be secured in other
breakdown
within
industries industries on the basis of

r;

that

.saw

Past and Future

.

profits are still at a high level. If
that by these wage bargains are to be
paying laborers increased * wages made for the
period of one year
ability to pay wage increases and
when pipfits reach a certain level
or two years an increase of wages
still earn
substantial profits,
it rather than
by permitting profits now
would be economically desirable
may have a crippling effect
to rise above that level we shall
on
for unions to bargain aggressively
many
firms that would : get
be
able
to
guarantee adequate
for wage increases and to secure
along well otherwise.I At this time

of the

crease."

old

paid out of profits? If
this is. contrary to the gen¬

Desirable byyyyji?; erally accepted

I do not have any idea what is

Manu¬

trrents,"

:

the

.

Mr. Nathan's report supports -the
conclusion that laborers
should

so,

•

following quotation facturing industries
really going to happen to wages
employing
from page three of "Wage Movenearly 18% of all workers showed in other industries in 1949. Tcr the
published by the United an average
extent chat companies have the
wage increase of 15

i

wages should be raised so as to
absorb any excess of profits above
this level. Is Mr. Nathan simply

increases

wage

new

committees

wages are

employed in in¬

dustries in which average wages
increased from 5 cents to 9.9 cents

fI

and

on

the

faith

facts,

basis

and

of

be

facts

conducted

with

willingness to
negotiations can be
a

(Continued

on

,

page

26)

good
use
con-

//'

policy is advocated.

wage
I11
tion

the

Just because profits
at

more

have existed

certain level during

a

three

the past

that
they will continue to be at the
same height during the next two
years. In other words, the demand
for higher wages for the next two
years based upon the profits of the
past three years contains the ele¬
ment of a forecast that may be
years

is

no

sure

/

proved wrong.

sign

'

•

,

/

'A;:- /•//Conclusion////>"'

general, there will be varia¬
of profits among the

In

in rate

various firms in the

is

consumer's a dollar

elusive and competition is keener
than it has been since the war.

his

Mr. Nathan has
study of certain
of income without adequate
report

emphasized

the

industry
and among the various industries'.

flows

Does Mr. Nathan propose that

consideration of the effect of in¬

factor

be

existing
rates?

in

industries
are

to

increase

this
the

discrepancies
in
wage
so, shall wage rates be

If

reduced

used

same

being

firms and

low

at

raised

same

in

industries?

time

high

of

wages

on

the margins of

employment.

He

advocates

and raising wages at a time when such
they raises may increase unemployment
profit and may accentuate any existing
tendencies toward depression. /

profit firms

the

creased

production and, hence, the volume

(847)

CHRONICLE

&. FINANCIAL

THE. COMMERCIAL

Number 4834

170

Volume

Economic Power of Labor
From

Washington

Ahead

Chairman of the Board and

of the News

the

in

back

that

beiore the war, Adolph Berle, an
Deal, told a Senate Committee

anyway

of

recall

to

seems

New

situation

was

like

1938

or

he

early

fact-finding

1939,

in-and-outer brilliant
that the world trade

I will direct my

the economic power

marbles back to his fellow

terprises, consumers,

to

the

give

that

players and start all over again.

practically
of world trade is to

Thus, this country has gathered up

lie

the

play. I do not recall
that he was advocating we do this. My recollec¬
tion
is
this was
his
way
of describing' the

receive

they

so

can

seems

We

time

that

Since

intervened
still

these

a

to be well taken.

are

World

second

not

War, has
His point
as

-

of

once.

labor

is

movement

has progressing

We are
back in dollars, instead, and
through such devices as the Marshall-Plan to
contain Communism in Eastern Europe. Coming

giving the money
Carlisle Bargeron

at

The

recently suggested in some quarters.

been

the
con¬

lawmak¬

ers

S-'*,1

■■x;

redistributing the gold,

the

matters

sideration
our

worsened conditions.

and

competition is beneficial and in' tions on production which result >•
from formal agreements between
public interest.
labor and management are not sc
As the organization of workers
clearly evident to the pqblicrBui *
expands to all of the shops of one
the public pays the bill jyst the
company, then to all of the com¬
same. In the rising market of re¬
panies in a single industry, and
cent years, increases in wages in
then when the same organization
any industry, which have not been
penetrates into other industries,
balanced by increases in produc¬
some
completely unrelated, the
tion or reductions in other costs,
public interest demands that we
have been passed on to the con¬
stop and appraise our position.
suming public. When labor cos!
increases are not counterbalanced
Huge Combinations

of

that

thorough

■'C,',.

situation.

'§>-

pub-

and if the game
be continued we must give the gold back to the
other countries

testimony to the subject stated in the chairman's wire, the "extent of
of labor organizations and its effect upon industry, small business en¬
prices, banking and credit policies and national stabilization." I believe

welfare

demands

all the gold

rapidly.
should

We

deter¬

mine where it

[ Many larbor organizations have

is

thus

going

and

combina¬
tions, with the economic power—
frequently exercised — to restrain
into

grown

huge

the probable
allies.
*
Ben Moreell
country to provide consequences
that
in
"60 million jobs/' That it will restore normal' trade between this so
trade and reduce competition in
country and Europe is sheer bunk in the minds of those in Congress choosing our future path as a na¬ significant
degrees.
With
such
tion we will do so with our eyes
or the government experts with whom I talk. Just as surely as the
power, labor unions can and do
If we are to make changes affect prices, and quantities and
Western European countries- could get into a position to supply lis open.
with enough goods to maintain their so-called dollar balance, we in the current trends, we must act qualities of production.,, Whether
would have to lift our tariff barriers to maintain the high economy intelligently and soon, or we may or not such unions are, in a strict
have to resort to hasty and ill- sense, complete labor monopolies,
we have set for ourselves.
up

is the device of arming our

Basically, all of this is pump priming for this

It is

British
that
X,:;-

commentary on the crazy thinking

a

of the times that the

is
can't produce cheaply enough to get into our market.
in the past, the shoe has been on the-other foot and it is

are

they

complaining that

one

of the things wrong with them

controls, and
placed under anti-trust laws.

form of compulsory arbitration, leading to price fixing and other

as

labor organizations be restricted to legitimate objectives and be

urges

;

of marbles iir which one player had won
the marbles and if the game was to continue
had

Banking, and Currency the rise of Jmdustry-wide

powerful labor organizations, along with their ability to shut down strategic industries and to impose
uniform conditions in an entire competitive field, is creating gigantic labor monopoly. Decries govern¬

a game

-all

President, Jones & Laughlin Steel Corp.

Prominent steel executive tells Senate Committee on

ment

writer

This

Organizations

By BEN MOREELL*

By CARLISLE BARGERON
x

7

considered

in

measures

to

order

prevent our free economy
deteriorating by default.

is

not

Some

important.

are,

in

from fact, complete monopolies. Others
are

so

strategically placed in our

production, it meam:
bigger slice o£
the pie, and since the size of the 1
pie remains the same, the rest o'
the public gets a smaller portion.

by increased
that

labor

gets a

1

Power in Hands of Few

:

unions

the

economic power of
should

which

There is
to

another

the

in

factor

important

is

There

a

be

,

noted.

truism that power tend?

concentrate, to be drawn into
hands of fewer and fewer

union.

So it is with a large

men.

that the end result of
their actions is equivalent, to com¬

Regardless of written constitu¬
tions and by-laws, in practice, the

The problem which faces us is plete monopoly power.
doing so for years, .against the cheaper foreign costs of not only
i
v
building ships but their operation. And certainly it is a fact that if an old one; it is to prevent the
In the two industries in which
trade between this country and Britain became balanced as between concentration
of power in
the I am now directly interested—
imports and exports, it would have a tremendous impact on our hands of one man or of a few men, steel and coal—the labor organi¬

power to impose a monoply and
restrict competition gravitates

Certainly,
a

Problem of Power

A

merchant marine, have been

fact that we are now subsidizing our

economy

(

domestic

economy,

would have to protect our¬

which we

against

power could
be used to zations exercise, in fact, almost a
significant harm to
the complete monopoly of the usable
as a dominant public interest,
labor; There are other industries,

which

comparatively
few checks
Direction
by
a

into the hands of a

few leaders. There are

balances.

and

man or by an
oligarchy
seems to
be required by the na¬
not trying to pose or to pontificate
ture of labor unions' objectives.*
world authority or an economist but to set forth the background
j; Our forefathers faced the same such, for example, as automobiles,
against which the British and American financial conversations will problem when they were drafting rubber, oil, electrical products, There is po question in my mind
soon be held in Washington.
the Constitution.
In that case, and ' the garment trades where that more democratic forms of
/.
* union
meetings, more frequent
Fundamentally, they will be with a view to getting more money their task was to establish checks similar conditions exist.
The in¬
to Britain in an acceptable guise. They have run out of guises. But and balances on the use of govern¬ dividual railroad brotherhoods are referendums and elections, greater >■
that some imaginative mind will come forth with another one, I mental power.
limited to specific employee func¬ police protection to prevent in¬

-1

selves.

In

saying this, I

vv

■'

'.X,'

cause

am

single

,

,

haven't the slightest doubt.

Later, we faced the problem

will, for one thing, be plenty of assistance
most conservative quarters, from influences which

There
our

from some of
belong to or¬

of

in

concentrations
financial and industrial power.

the

of

form

great

tions,

but

a

brotherhood
road

service.

strike

by *, any

one
all rail¬

shuts down

the

In

same

man¬

timidation and attacks, the use

a

secret

fair

stringent

-

ballot

quorum

•

and

of-

more

requirements

for a vote on affirmative action
positions of great strategic
would have — desirable effects
power are held by the craft unions
without interfering with the effi¬
in the building trades—the team¬
concentration of power in the sters, stationary engineers, >and ciency of operation of the unions.
However, if we may judge the
hands of labor leaders.
others..
"
'
1
future by the past, I believe that
The question arises as to whether
The records of the hearings be¬
the actions taken
and demands
the continuation of such
power

ganizations that are continually agitating that government spending Restraints were established by
has got to be cut down, that the budget has got to be balanced, but .'antitrust and other legislation.
who would have an individual fit if there were any curtailment of
Now, we have the problem of

jspending at home or abroad.
1 *
.,
'
;
\
I sat with a group of industrialists only the other night and
frankly I was surprised at the cynical manner in which they viewed
government spending, how at heart not one of them wanted it cut
down. They were a fairly representative group, too. Their most should be prevented; whether it
serious concern at the time was that the railroads now working their should be permitted and then cir¬
non-operating employees on a 40-hour week, would so reduce their cumscribed by restraints; or, as a
maintenance work that it would be felt sharply in the materials third alternative, whether there
market. Men figuring so closely to the penny like this, you can should be limitations on both the
imagine how a lopping off of $2 billion in Marshall Plan spending size and the uses of such power.
In a mass production economy
.would jolt them.
„
v . . ,
.Naturally this group did not constitute the country's industrialists such as ours, large accumulations
but
the
more
I get
around, the more I am convinced there of industrial power, are essential.
is no burning desire that government spending be reduced. Oh, per* Therefore, certain concentrations
Jiaps to the extent of dismissing a few thousand government em¬ of labor power are necessary if
ployees. But not where it would really be effective, Such as thte outgo there is to be equality at the bar¬
<to European nations or in military purchases.
gaining table.

is on the order of
the Coolidge prosperity in a way. Everybody realized then that it
couldn't last, that the stock market had to come down some day. But
Coolidge would have been ridden out of office on a rail had he done
The

«

period through which we are moving

So we will continue to send money

to Europe. It isn't primarily

a question of putting the economies of those countries in shape.
icloaked in these high sounding terms. But it is apparent that we

got to go on giving our surplus away to maintain our own
of living. As to how long it can last, I am sure nobody

It is
have

high way

knows.
certainly we are not to get anything backbit would-be
-terrible if we did. Sending military supplies to Commy-ridden France,
'the "key" of our defense against Communism, though, seems to take
But

.the cake.

Standard Invest, Co. Adds

Thayer, Woodward Go.
Formed in Cincinnati
(Special

to The Financial

Chronicle) :

CINCINNATI, OHIO

—

R. Woodward aud Richard

\

Warren

to

Fianctal

The

&

formed

Thayer,

of. California,

117 East

Colorado

Street.

Co. with offices at 324

Walnut

Kenneth L. Mark Opens
(Special to The Financial Chronicle)

Street to engage in the

securities




DIEGO

CALIF.

—

Ken¬

many

made by union leaders will, in
most cases,
be confirmed by a
economic
majority of the union members,
power, arid there is no dearth of
just as the monopolistic activities
examples where strikes and threats
of corporate managements were)
of strikes have slowed down and
have

at

applied xtheir

times disrupted our

entire econ¬

The public is well aware of
these occurrences. In recent weeks
the restriction on coal production
omy.

by

imposed
Workers

the

United

Mine

wide pub¬

has received

licity.
If there should be a steel
strike the entire country will feel

strongly supported by

stockholder

prior to 1890, and even
thereafter, in spite of the antitrust
laws. We should, therefore, face
groups

probability that the

the

concen¬

trations of economic power

men

democratic
we

which

hands of a few
will not be dispersed by more
in

rest

now

the

procedures. If
corrective action,,

union

to have

are

(Continued on page 27)

competitive enterprise will not
I

like to outline to you

should

the current situation and
gers

the dan¬

they ap¬
and then to suggest

to our economy as

pear

to

me,

remedial

possible
lines of

and

measures

action.

.

"

should face
one
fact, squarely.
When two
workers agree to stand together
in their'demands on the "boss" for
"At the

certain

outset,

pay

and

INVESTMENT
SECURITIES

we

Public

Industrial

working condi¬

Railroad

we

Municipal

T

gether, we have an extension of
the
restriction
on 'competition.

the public has rec¬

ognized that this kind of

restraint

A.GAIIXN«*°COMMNY

k

*A statement by

Admiral More¬

Banking
business.
Both
were - formerly
neth. L. Mark is engaging, in a and Currency of the United States
partners in Frederic Latscha & securities business from offices at Senate, Washington, D. C., Aug. 24,
1949.' : ,
625 Broadway.
' ; •
•
Company.
SAN

recite

Committee

in which labor organizations

be damaged.

Over the years,

Thayer

Woodward

this

.

problem is to establish re¬ its disastrous effects and the pub¬
straints on the exercise of power lic will be keenly aware of it.
in
such
manner
that the basic
The price increases and restric¬
structure of our incentive system

tions,

Chronicle)

V

have

fore

ways

have a restriction on
PASADENA, CALIF.—Hugh F.I competition for work and the be¬
Flaherty has been added to thej ginning of a monopoly. When all
of the workers in a shop band to¬
staff of Standard Investment Co.'
(Special

i

,

The

-

of

'anything to break the spree.

ner.

ell to

the Committee

•

on

'

Jl

.

'

j
NEW YORK'

• "

Incorporated

*

*

* •" "

CHICAGO
BOSTON

MINNEAPOLIS

PORTLAND, ME.

OMAHA

PHILADELPHIA

KANSAS CITY

WATERLOO

MILWAUKEE
FLINT

»

K

(848)

•

Thursday, September 1, 1949

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

A Defense of Direct Insurance Investment

Dealer-Broker Investment

By LOUIS W. DAWSON*
Executive Vice-President,
"

4

Recommendations and Literature

./'•^^>

The Mutual Life Insurance Company of New York

It is understood that the

Prominent

insurance executive maintains entry
loans is one of outstanding and most

of life insurance companies into field of directly nego¬
tiated
encouraging financial trends of recent years, giving :
corporate borrowers access to larger pool of capital and adding new element of competition among ,
lenders.
Says such loans have assisted expansion of nation's productive facilities and combated
/
inflation. Opposes further Federal regulation of life insurance.

Many of you are probably wondering about the proposed investigations of insurance
in Washington. These
ostensibly have two separate purposes. One of them is to investi¬
gate whether insurance companies are now complying with the anti-trust laws. That
investigation
i$

the

prise

system,

and we intend to
comply with them.
no
investigation to

contemplated

do our best to

under the Mc-

It

Cclrren-Celler

insure that!

A

1

series

,

on

of

Uhited

will

The

g

<

other

is that

investigation

Sub-Committee of the Joint Com¬

the

mittee

Economic

the

on

Report.

Court

The

had

the

popularly referred to

O'Mahoney

investigation

that

insurance

Committee.

is

as

This

directed

not

Louis

W.

Dawson

Were

not engaged in inter-state and
the demands for capital. Life
They were therefore insurance is only
indirectly af¬
not considered subject to Federal
fected as one of the great sources
£hti-trust
legislation for many of capital formation in
today's
y£ars. However, in June, 1944, economy. Here
again, a - wise,
hfider
another
Supreme
Court statesmanlike *
inquiry /may de¬
decision, the business of insur¬ velop information and
possibly
ance was adjudged to be inter¬
suggest some of the answers to
state commerce. The companies the
many
questions facing our
engaged in the insurance business economy. In
addition, other
Were then granted a moratorium studies are
being carried on un¬
that exempted them from the ap¬ der
the Joint Committee, some of
plication of anti-trust statutes which will
undoubtedly affect life
trtitil Jan. 1, 1948, and later exinsurance. The life insurance in¬
tetided to June 30, 1948. This was
dustry is not opposing such in¬
ddhe by Congress in order to give
quiries. We' merely
hope that
ml insurance companies a reason¬
light, instead of heat is brought

which

to

make

necessary- adjustments
practices

to

anti-trust

State

conform

laws,

laws to

and

in

any

their

with

to

the

permit

be modified or ad¬

justed wherever necessary. Since
June 30, 1948 the life insurance
business

has

been

subject to the

ahti-trust laws.

to

bear

upon

some

these

of

im¬

portant problems.
1

Any

must

business

expect

capital

how

to

the

remove

the

to

Bulletin

—

Lawrence

—

& Bonner,

of

the

labor and

our

facilitate

to

savings in
channels

investment

as

our

broad
that we

and

many

possible,

as

get back

of
as

so

that period

to

of

position

our

give periodically
public accounting of its steward¬
ship of the public's funds, and we
stand ready to do so at
any time.
No business is more
closely re¬

companies,

as a group is
averse to oper-1

the

letter

Monthly commercial

—

The

—

Canadian

Bank

of

Commerce, Toronto, Ont.f Canada.
Colombia-Bolivia
of economic and

ments—Zippin
South

—

New

study

political develop¬
& Company, 208
Street, Chicago

Stock for Appreciation and

V

memorandum

Candian Pacific

analysis of
in the current issue of
"Fortnightly Market and Business
Survey"—E. F. Hutton & Co., 61
Broadway, New York 6, N. Y.

Mission

N.Y.

Over

Stock

has

New

York

6,

the

-

Counter

-

River

Co.,

Inc., 70
York 5, N. Y.

Fuel
A.

Pine

Corp.—

Saxton

Street,

&

New

/

Also available

are memoranda
Gas Transmission

Tennessee

Industrial

recording

Co.,

Transcontinental

Pipe

Gas

Line Corp., Texas Eastern Trans¬

trial

10-year performance of 35 indus¬
stocks—National Quotation

mission

Bureau, Inc., 46 Front Street, New

Transmission Corp.

-Corp.,

and

Texas

Gas

.

York4,N. Y*
Ohio
>

Alleghany Corporation—Analy¬
M.

Rosenbaum

&

Co.,
Madison Avenue, New York

Company—Analysis—

Co., 115 Broad¬
York 6. N. Y. Also
available is an analysis of Inter¬

New

way,

state

17, N. Y.

Oil

J. R. Williston &

Stores, Inc.

Departments

given corporate borrowers

direct access to a great pool of
capital,- and has added a new ele¬
ment of competition among

lenders.

Central Vermont Public Service

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

For the last several years, and
there

Hayden, Stone & Co., 25 Broad
Street, New York 4, N. Y.
Also available is a study of the

was

certain

a

of

amount

of

insurance companies

for

selling government bonds and
investing the proceeds at higher
yields. The basis of this criticism

analytical

study—

Oregon Portland Cement—Late

Square, Boston 9, Mass.

Industry

with

brief

of

Lone

Star,

General

purchased by the

results

of

Beaver

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

of Security Traders Club

COMING

supply and thus increased
inflation. This was, to some, ex¬

Dec. 4-9, 1949 (Hollywood, Fla.)

money

beneficial

Union—Memorandum

Western

—Bruns," Nordeman

of St. Louis.

Federal Reserve, we increased the

and

Bros.—Memorandum—

officers

alyses

an¬

that, by lending money which
by selling govern¬
were

? Warren

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

.

Cement

obtained

ments that

v

data—Lerner & Co., 10 Post Office

Chemical. Corpora¬

Mathieson

tion—Detailed

criticism

:

"

:

indeed until the recent deflation,

we

Broadway,

-

Mississippi

on

Index—Booklet

285

It

Development Company

Memorandum—G.

:
/

and

years.

follow-up

a

Railway.

industry

trends

encouraging

is

on

Safe Income—Detailed

standing

recent

Dixie

York 5, N. Y.: *
Also
available

Co., 61
Oil

financial

of

Pensylvania

;

—Analysis—Zuckerman, Smith &

4, 111.

sis—Wm.

most

and

/'

Ltd.—Analysis—Eastman, Dillion
&
Co.,
15
Broad Street,
New

Salle

La

particularly industrial
loans—through directly negotiated
loans has been one of the out¬

insurance

business,
hdve never been
which has more than 75,000,000
atlng under the anti-trust laws, policyholders depending upon it
although companies engaged in for personal and
family security.
Writing other types of insurance iYet the total of life insurance
now
did
object. Likewise,
the
life in force, in more than 500 com¬
Cdfnpanies are not opposed in any panies that
compete actively for
Wiy to the inquiry now under
business, does not amount even
consideration, the primary pur¬ to a single
year's income for the
pose of which is to make certain nation. > •

Cement.

Mining Corporation of Canada

EVENTS

tent, true, but in the larger view
it overlooked the more permanent

life

Portland

ment—and

public interest than

the

to

into the field of corporate invest¬

;/.;•/•

.

Broadway, New York 4, N. Y.
Canada

creation

tov encourage

and

circulation

was

in

to

a

lated
The life

is

barriers

primarily at insurance, but at the
idle capital and idle men of the
money
economy
of
the
30's.
country.' It /proposes to find out
more
about the flow of savings,
Viewed in this perspective, the
the investment of such savings, entry of life insurance companies

fchfnmerce.

in

It

mation.

artificial
of

restrict capital for¬

to

whole

mpanies,

time

is not how

never

companies, in¬
cluding life

able

criticism, to the ex¬
tent that it exists, curiously mis¬
apprehends the problem of the
economy. The problem of America

its products. The problem is how

O'Mahoney Committee

This is

clearly established the
principle

50

that this

me

free

States

Supreme

co

take

proposed under the auspices of the

de¬

cisions by

Canada

Turnure & Co.—Blyth

&-

one

resolution.

j

firms mentioned will he pleased
the following literature: '/•

send interested parties

to

Investment

In

Investment Bankers Association
Annual

Field

Convention at the Holly¬

wood Beach Hotel.

such
Dec. 9, 1949 (New York City)

policy.
One of the most pressing needs

Sept. 9, 1949 (New York, N. Y.)

New York Security Dealers As¬
Security Traders Association of
citizens, and especially of
sociation 24th Annual Dinner at
New York annual summer outing
veterans, as you know, was for
the Hotel Pierre Grand Ballroom.
homes. Homes can only be built and dinner at New York Athletic
-MomClub, Travers Island.
with money and, as a practical
matter, with borrowed money. We
Sept 9-11,1949 (Oregon)
and other companies met that de¬
Pacific Northwest Group of the
mand, and in the last three years Investment Bankers
Association
tfiat anti-trust violations do not
The last ^inquiry of this sort to July 31, we alone advanced
1949
fcfcist under the laws as presently
meeting at the Gearhart
into
life insurance
PHILADELPHIA, PA. —R. L.
affairs was $215 million for residential con¬
constituted. We know that The
Hotel, Gearhart, Oregon.
V.;
that conducted by the
Day & Co., members of the New
In
the
three
Temporary struction.
years
Mhtual Life has been extremely
York and Boston Stock Exchanges,
National Economic Committee in ended
1948,
the life -insurance Sept. 16, 1949 (Cleveland, Ohio)
Cfifeful on all anti-trust
questions, Washington, in 1939-40, when the business as a whole advanced
Bond
Club of Cleveland fall announce the opening of an office
add we are confident that any
in
business - acquitted
Philadelphia,
at
123
South
itself
well, $5,750 million.
party at Sleepy Hollow Country
investigation will prove that this both in
Broad Street, under the manage¬
the eyes of the Committee
Club.
ig the case.
Investing in Nation's Productive
ment of Leighton Howe Mcllvaine.
and before the bar of public opin¬
Facilities
Of course, there is no way of ion.
Mr. Mcllvaine,
Sept 16, 1949 (Philadelphia, Pa.)
'v
who has been
Investment Traders Association associated
with
the
securities
fdtetelling what course such an ; As to The Mutual, I assure you
But in my view, even deeper,
Investigation if voted will take, that we have nothing to conceal, more beneficial and more far- of Philadelphia annual meeting business for the past 20 .years,
of whether it will be the

sincere,
Objective job it should be. But if
if should carry out its stated pur¬

pose

and

Whether

seek

•

the

to

determine

anti-trust

laws

are

bding violated, the life insurance

companies should make

good

a

Showing.
;

There

nothing in
we

our

operations of which

fearful.

are

Our first

always the possibility

tal from

its earliest

days has al¬

paramount.

In times

sweeping

of

was

the

war,

law,

but

ported

the

savings

war

effort.

have

sup¬

Upon

re¬

basically the
the necessary trans¬
is highly formation
has
found
financial
all know. The support in life insurance funds. In
life companies have consistently times of
plenty, life insurance has
taken the position that they did shown
its
greatest
growth.
In
not need or wish
exemption from times of need it pours out its
insurance

business

as you

the anti-trust laws, and the efforts
of their lawyers have been to in¬

funds

sure

national

compliance

with

both

the

lifter and the spirit of such laws.
Simply stated
W6
as

believe in

part

of

our

the

the

in

a

to support

never ending
stream,
the individual and the

economy? It

truly be
called the great stabilizer.

anti-trust laws

&6n

an

Direct
—

American Enter-

before

Mutual

address by Mr. Dawthe Too Club of the

Life

Insurance

Corporate

Loans by

Insurance Companies

have heard
quarters of life
insurance corporate loans made
directly to the borrower, as if

criticism in

you

may

some

Company
New
York,
White
Sulphur in some obscure way, they were
Springs, W. Va., Aug. 22, 1949.
bad for the economy. It seems to




reaching

effects

ities.

produced

were

of

Greater. plant

facilities

greater production, and

the

surest

and

against inflation is

duction.

In

the

in¬
one

lasting

more

weapons

1946-1948,

years

lion.

The

jobs

new

and

and dinner at Palumbo's.

Sept 20, 1949 (New York, N. Y.)
New York

Security Dealers As¬
quarterly business din¬
meeting at 5 p.m. at the

sociation
ner

Downtown

Athletic

Club.

;

[

the

in¬

goods made possible by
plant expansion are almost
incalculable.
\:
.

During
of

recent

Mutual's

the total
investment in

years,

new

electric
and

power facilities, industry
housing, has greatly exceeded

Mutual's increase in assets. These
three
things — power,-; industrial

plant

and
of

gress,

and

housing—are the

social

the

welfare

heart of

Municipal Bond Club of Chicago
Annual Field Day at Knollwood
Country Club, Lake Forest, 111.

America

needs

world of today.

in
'

the

pro¬

the

eco¬

that

troubled

Club

Bond

1949 (Colorado Springs,
Colo.)

National
sociation

Security

Annual

Traders

As¬

Convention

at

The Broadmoor Hotel.
Oct.

11-13,

1949

(Atlantic

City,

Fall

meeting

Governors

of

of the

the

Board

of

Association

of

Exchange Firms at Haddon

Oct. 20, 1949 (St Louis, Mo.)

31)

R. L. Day & Co. is one of the
investment houses in New

com-

having been formed in

Other

are

in

offices

New

York,

of

the

Boston

firm
and

Hartford, Conn.

Fieldman, Hirschberg ;
Join

Dreyfus & Go.

Dreyfus

Annual meeting and election

New

York

New

N. J.)

ductive

thus

latter organiza¬

/;;.t;;;\i::, ?:•,? ?,/••/;

Oct 5-9,

Hall.

on page

and the Municipal
Philadelphia, being

oldest

1862.

of

Pittsburgh Fall
Outing at Chartiers Country Club.

Stock

;

facilties^ and

,

.,:/.

England,
Sept 30, 1949 (Pittsburgh, Pa.)

By making these loans we as¬
sisted in the expansion of pro¬
(Continued

tion.

very

and

nomic and military strength

Philadelphia

Secretary of the

Sept 23, 1949 (Chicago, 111.)

creased
such

specializing in tax-exempt munic¬
ipal bonds during the last 15 years,
was formerly Philadelphia
Man¬
ager for G. C. Haas & Co. He is
a
member of the Bond Club of
Bond Club of

pro¬

The Mutual alone made corporate
loans of approximately $600 mil¬

heart

policy is that

Recently

*From

can

Day Go. Opens

Philadelphia Office

sure

turn to peace,

competitive,

R. L.

been mindful of the public inter¬
est. The industry's flow of capi¬

policyholders

life

—

upon the economy by investment
in the country's productive facil-r

?t some unsuspected technical
finge violations of such
fara

our

duty is
to our
policyholders, but in exer¬
cising that duty, we have always

ways been to where the need

is

of

York

nounce

and

& Co., 50 Broadway,
City, members of the
Stock Exchange, an¬

that William L. Fieldman

Benjamin Hirschberg are now

associated
Fieldman

with
was

of the Stock

of

the

firm.

formerly

Mr.

Manager

Department for J. B.

Hanauer & Co. of Newark.

,

& FINANCIAL CHRONICLE

COMMERCIAL

THE

Number 4834

Volume 170

'■< Secretary 'of Agriculture

v/'i'

\

It's

:
see

Joe
of

conditions

standard

income

which I have

Two and

vide

of

proposed would pro¬
support
somewhat
above
90% of parity.
I make the same personal guarantee as to an adequate storage
program.
-///,
J
/
But I do not have to point out

To me, there

is something

incongruous—

ething
disturbing—in
this
and; I

so m

don't react the
way.

Don't

good
about

no

farm

know that.

it

pretty

sad

nize

commentary

a

program

can

I

sure

am

recog¬

three

and

corn

crop

two-thirds

Now what is the present

Charles F. Brannan

situa¬

tion with respect to corn?

and

intelligent people that abun¬
dance, such as we see all around

In sim¬
We have

ple language it is this:
far

by

has

farmer
you

in his heart what that

productivity.
considered

individual

a

knows

Every farmer ought to be sure

crops are

Corn Loan Program
As for

is this.

government,

A

our

position

loan program has
been made available for the bene¬
corn

fit of the whole nation.

That pro¬

gram ' helps
farmers
and grain
handlers. But it carries with it the

grave
make

responsibility of helping to
the

ernment

job is.

corn

gone—and probably forever.

bility
don't

to

work.

program

turn

in

Gov¬

has

a
responsi¬
people.
We
abundance to go to

the

want

whole

//////////(
corn

a

of

».r

this ycsr.

crop

waste. - We do want to be in possession of reserves adequate to
Every farmer
pmerffenov that mav ari^e
So

ZXh
nicl reserve—that

bil¬

This year, as I have

is

serve

dy,,

as

bonds.
nrWo

go1ng to do aU tL't we cfn

/rrv w7are

to

tnat kind
k nd

a

of

a

re-'to get available. We have
a11 the storaSe that
made
r

can be
a

total

important, and as han¬
objective of up to 500-milliona
stock of government
bushel capacity, if we can procure
Corn is money—at current
as

"VhZ* ** at the right prices and within

Xni'o

limits

situation.

Think of those ears as the time
of the
;
worth upwards of a penny apiece , But storage, as you well know,
—then
they
become
something is-only part' of the complicated
lion bushels on the same basis as
that
you
don't
want
to
kick problem of learning how to live
in the past we used to deal with
happily with abundance. Abunaround.
//"■';/:.
./•
crops of two and one-half billion.
Elevator operators have a re(Continued on page 30)
/
So, I have come out here to lay
the problem before you. I'd like
you to ask yourselves—now—to¬
morrow—and the next day: What
would I do if I were Secretary
ear.

per

,

Corn Prospects

civilized

a

you

individual responsibili¬

your

eco¬

nomic wisdom
of

Each

billion bushels

be

record

lion bushels.

ties.

the

grain
to

that the old days of two and onehalf billion bushel

job to do and each of

But last year we had

crop.

all-time

an

American farmers themselves. You

you

consider

on

in

one-half
used

corn

its

lost

pretty much what I have
saying to you. You would tell
them also that, working together,
we can lick the storage problem—
but only if each of us accepts his
part of the three-way responsi¬
bility. ;■ v;;''/;

said, we anticipate a crop almost
work as * large. We simply cannot ex¬
very
successfully
without
the pect to deal with crops of up¬
wholehearted cooperation of wards of three and one-half bil¬
that

wonder if you

same

minimum

the

has
..

?een

<3>-

awful

an

/

nois

mighty fine sight for a Secretary of Agriculture to come into the Corn Belt and
this tremendous crop. But it's just a little akin to a heavyweight contender watching
Louis in his prime. It's a mighty fine sight—but you can't help thinking that it has the

headache.

iword
,

9

such
demo¬ sponsibility—and a big one. Like
is regimen¬ all of us, they need to recognize

I believe
would tell the farmers of Illi¬

you

a

potentialities

this

If you were Secretary,

-;:"

current large grain crops and heavy carry-over

on

as

tation— the

of grain supplies, involving difficulties
of storage capacity and market distribution, Secretary Brannan stresses problem of keeping agricul¬
tural production in line with demand. Says producers, not Congress alone, should have this responsi¬
bility, and asserts if productive and storage capacity for abundance is here to stay, plans must be made
to deal with it. Outlines and defends "Brannan Plan" of government subsidies to farmers in lieu of
'/•"/v:v■"
Parity price supports.
Commenting

action

meaning/',;

By HON. CHARLES F. BRANNAN*

;///•"•'/V/'v/''■

cratic

If

them.

approve

Problem of Agricultural Abundance

"(849)

the

biggest

carryover

in

of

Agriculture?

'

should

today,

us

be

potential history and

a

headache?

in sight.
A month

this twentieth century A.D.

whole-heartedly welcome
dance—should/ know how

agricultural and industrial

three

good use?

i ask you these questions as a
representative—and a servant—of
American agriculture in our gov¬
I

ernment.

them

ask

in

the

and

half

a

/
' 1 '
We have more

crop.

con¬

purchase

ever

June 30.

of the

ear

bushel

billion

i'fi

a

corn

before—533

on

as

fairs, but in all aspects of govern¬
ment.

So

far

an¬

ago, we were an¬

under loan

agreements

This

corn

million
means

than

bushels

that much

in cribs must

now

gravely disturbed
be moved out in order to make
by the potential headache of our
abundance of grain as we are in room for the new crop.
That's the situation. That's the
Washington.
"All of us have the responsibility potential headache/.
Here, from the government side,
of helping to solve the tremendous
is what is being done about it.
problems of our era. And I want
to tell you that it's a great conso¬ / Last May, we announced a relation to me as Secretary of Agri¬ sealing program. Under this pro¬
culture to have Scott Lucas in the gram farmers have until Oct. 31 of
position of influence he occupies this year to extend their loans on
in the United States Senate today. corn of the 1948 crop to mature
I know I can always get an honest July 31, 1950, and to put purchase
and wise opinion from Scott on agreement corn under loan to ma¬
any
agricultural question — and, ture as of that same date. To help
believe
me, ■ that's
something a farmers in building this and other
Secretary appreciates. He's a great grain storage, the CCC is making
leader, not only in agricultural af¬ loans available to cover up to 85%
at least

chart

other's

or so

and

viction that most of you out here
are

No one, of course, can

action, but I've a suspicion
that you would say: Gentlemen
ticipation a 700-million bushel car¬ this is your corn—you ought to
should ryover and about three and one- help find the answers to the prob¬
abun¬ third billion bushels for the 1949 lem. I think you would go on to
to put crop. Today we anticipate an 800- say:
We need more storage on
plenty million bushel carryover and a Illinois farms. There has never

Don't you feel—as I do—that a
civilized and intelligent people in

to

near-record crop Is

a

of

the

cost

of

the

struc¬
at 4% in¬

storage

been

the

individual
much

i

you

the

farmers

store

to

as

ger

than ever before,

be very blunt
and tell your listeners that if the
Commodity Credit Corporation has
You

to

might

move

storage

even

corn

out of this area for

purposes,.

ets.

'

It's

going

to

out of farmers' pock

mean money

But
you were going to be honest
that's what you'd have to say.
if

And you might go even

further.

You might have to bring up the
possibility of marketing quotas on
corn.
And that would bring you
squarely up against some folks
who
seem,
to
regard marketing
quotas as regimentation—who see
in quotas the heavy and dictator¬

ial

hand

of

reaucracy.

have

to be

with that

government

bu¬

But I don't think you'd
Secretary to disagree

point of view.

fit

won

stored

not

entire

only

agriculture

nation.

I

tell

you

but the
plainly

that the department will use every
available
means
to
make
sure
you

will continue to have

loan

in

program

prices

you

have

corn

a

with

line
to pay.

the

In fact,

somewhere

to

make

room

for this year's new crop.

Here is what

doing about
that:
Through yesterday we had
already
awarded
contracts
for
more

than

150

million

bushels of

storage capacity and we are going
out to get all the additional stor¬
age

that

can

be made available.

But

*

*An address

nan

at

sored

by Secretary Bran¬

Annual

Farm

Day

spon¬

by Pantagraph Newspaper,

Bloomington, 111., Aug. 23, 1949.




-

government can do only a
small part of the total job. All r>
us—farmers, handlers, and gov¬
ernment

adapt

—

have

ourselves

been

to

the

slow

to

changing

NOTICE IS HEREBY GIVEN that, pursuant to the provisions of the Indenture dated:
1945, between Celanese Corporation of America and City Bank Farmers Trust v
Company, as Trustee, there will be redeemed on October 1, 1949, through the operation of
the Sinking Fund provided for in said Indenture, $750,000 aggregate
principal amount of ;
the 3% Debentures due October 1, 1965 (hereinafter referred to as the
"Debentures") of
said Corporation. The Debentures to be so redeemed have been determined
by lot by City ±
Bank Farmers Trust Company, Trustee, and bear the following serial numbers:
October 1,

.

M22

2414

4193

6111

7657

9145

12122

17501

21573

25451

29457

32027

35589

^

121

2505

4235

6154

7675

9162

12409

17505

21575

25478

29533

32039

35590

2506

4280

6158

7678

9218

12455

17572

21599

25540

29686

32074

35662

139

2539

4297

6161

7729

9226

12529

17574

21632

25548

29847

32141

35729

169

2543

4302

6185

7753

9234

12666

17622

21660

25591

29857

32145

35818

-

*

173

2614

4327

6307

7756

9258

12700

17650

21758

25611

30195

32213

35843

211

2643

4336

6333

7778

9275

12849

17711

21821

25620

30211

32245

35932

222

2680

4337

6334

7786

9289

12872

17748

21861

25626

30262

32257

-

36051

316

2687

4401

6342

7792

9296

12880

25641

30341

318

2727

4403

6366

7798

9314

12908

17978

22006

25653

30373

32499

36185

385

2748

4412

6387

7824

9324

13059

18018

22008

25778

30440

32524

36249;

409

32553

36379,

17882

21916

32383

36054

2765

4460

6477

7826

9370

22050

25784

30494

412

2816

4489

6479

7875

9433

13172

18023

22262

25834

30527

32677

36433

437

2890

4492

6486

7895

9442

13350

18075

22283

25835

30544

32704

36441■

526

2896

4507

6489

7925

9497

13509

18221

22299

25871

30557

32781

36459

2899

4508

6492

30624

33004

36633

573

7949

9516

13115

13723

18019

18265

22372

25918

597

2901

4535

6516

7952

9525

13768

18509

22405

25956

30694

33039

36714

*

616

2924

4567

6538

7991

9539

13791

18547

22407

25983

30709

33073

36807

/

674

2934

4834

6590

8061

9545

13862

18634

22415

26029

30718

33133

36887

690

2943

30761

33201

37071

4848

6650

8083

9671

14046

18636

22483

26067

695

2952

4859

6662

8090

9676

14098

18775

22594

26165

30788

33208

770

3058

4868

6687

8112

9712

14196

18840

22675

26236

30815

33222

37204

882

3084

4979

6760

8117

9715

14283

18866

22719

20342

30862

33245

37352

935

3132

5033

6761

8126

9734

14358

18880

22798

26579

30962

33276

37353

?

1116

3217

22877

26593

j

5081

6770

8165

37120

*

9790

14427

18900

33397

37358

1207

3250

5130

6805

8173

9800

14486

18961

22946

26626

31019

33472

37412

1278

3285

5132

6832

8217

9809

14503

19315

'22982

26632

31024

33513

37571

1316

3294

5177

6844

8227

9836

14504

19330...23103

26664

31056

33516

37773

1401

3384

5252

6845

8241

9843

14541

19345

23120

26828

31071

33614

37852 /

6940

8261

1404

30999

'

5279

9853

14588, 19493 * 23154

26893

31125

33638

37873

5

5292

6943

8342

9876

14818

19501

23194

26894

31187

33680

38034

I

5343

7009

8398

10128

14885

19620

23224

26917

31199

33697

38131

1475

3435

5345

7026

8464

10146

15373

19741

23254

27065

31226

33718

38181

1514

3453

5348

7038

8482

10284

15400

19754

23387

27202

31254

33731

38230

1552

3488

5389

7040

8486

10500

15450

19857

23447

27204

31279

33805

38351

1621

3541

5392

7097

8500

10527

15511

19930

23535

27215

31282

33873

38361

1631

3560

5430

7116

8521

10749

15554

19994

23655

27271

31333

33903

38369

'

1649

3561

5514

8525

10763

15604

19997'

23772

27313

31345

34081

38409

*

1656

3569

5523

8556

10772

15614

20022

23795

27417

31375

34152

38452

1664

3577

10836
11071

23884

27563

31417

34301

38512

responsibility of producers to keep
agricultural supplies in reasonable
line with demand.. This responsi¬

8567
8580

20069

3597

5540
5554

15649

1667

7123
7139
7166
7195

15739

20079

23956

27665

31428

34307

38534

1683

3622

5621

11132

15762

20218

24020

27757

31502

34320

38597

3624

5658

8611

11197

15944

20337

24085

28085

31513

34476

38617

i

1714

3637

5673

7229
7235
7246

8609

1686

8617

11236

,

bility has been recognized in law
by every successive Congress over
the past decade and a half. It was
recognized in the agricultural leg¬
islation of the 1930's. It is in the

1730

3644
3668

5679
5713

1804

3717

5716

1893

3724

1923

3754

5719
5726
5777
5785

7284
7331
7333
7410
7435
7438
7457
7479
7492
7526
7533
7544
7603
7615

8622

1784

11278
11393
11455
11539
11643
11794
11803

ment

whereby you, through your

county committees, can keep sup¬

we are

/

>

3% Debentures, due October 1, 1965

3401

,

them—and they bene¬

I

<

3391

Agricultural Act of 1948. It is in
resealing program, loans for con¬ Corn Belt of about 130 million the bill passed last month by the
struction of storage facilities, and bushels, and allowing for 45 mil¬ House, the proposals now being
the purchasing of additional stor¬ lion bushels of CCC storage al¬ made in the Senate, and it is in
the plan that I proposed to the
age capacity by the Commodity ready available, plus other exist¬
Credit Corporation. Illinois farm¬ ing storage off the farm,
some Congress last April.
300 million
bushels or more of
ers, in conjunction with farmers
/ Congress has made available to
all over the United States, fought last year's corn will have to be farmers certain tools of govern¬
You

Celanese Corporation of America

,

3414

possible on their own the operation in Illinois is quite Keeping Production in Line With
Demand,
grain dealers to im¬ different from that of Iowa. You
American farmers believe in the
storage methods—and, fi¬ have never found it necessary to

for these programs.

/// \

1435

as

-

NOTICE OF REDEMPTION

1451

I realize that

nally, of the government to pro¬ put as much emphasis on storage.
vide such price support programs At the same time, in view of the
and supplementary storage as are great crop in your fields this year,
I hope that Illinois farmers will
required.
bend every
effort to make the
As your representative I can asr
corn
resealing program in this
sure
you
that
government
is
state the success it deserves to be.
anxious to discharge its responsi¬
Even allowing for a currently
bility. We are doing so through
the corn loan program, the corn estimated total resealing
in the

|

:

■

129

-

You wouldn't like to say it.

farms—of
prove

S

gap

The ma¬
tures. These loans are
jority of Illinois farmers know
terest and are repayable over a
very well the need of storing fer¬
five-year period.
tility in the soil—and sometimes
In
some
places the resealing marketing quotas are necessary to
program has been going well.
In keep soil fertility from being
Iowa, for example, where 190 mil¬ wasted. It goes against the nature

els will be resealed.

•

be¬
tween facilities and needs is big¬
Now

enough.

personally are
big,
immediate
problem is storage. And I am sure
you realize that the responsibility
for adequate grain storage is not
a one-way
proposition. It is, on lion bushels are under loan or of all American farmers to raise
the contrary, a joint three-way re¬ purchase
agreement, it is esti¬ a crop only to see it go begging
sponsibility: The responsibility of mated that about 75 million bush¬ for a market.
as

concerned

;'

ply in line with demand. Any ac¬
tion that is taken along these lines
is not imposed upon you from out¬
side.
The
choice
is made
by
American farmers themselves vot¬

ing in a free referendum. Mar¬
keting quotas will not be proposed
unless there is need for them—
when supplies

reach

a

1988

3782

1992

3946

2032

3952

2060
2312

3960
4011
4016

2325

4076

5887
5903
5937
5940
6038

2335

4138

6048

2386

4173

6090

2077

The Debentures

8887

8937
8948
8976
9049
9068
9075
9131

?
\
*

I

16108

20480

24193

28149

31600

34555

38691

16118

20549
20592

24254

28369
28388

31623

34562

38876

24346

31650

34751

38916

<

16236

20612

24371

28422

31654

34761

38990

i

16242
16276
16766
16795

20623

24433

28443

31661

34777

39094

20636
20811
20936

24540

28598

31685

34863

39192

24656
24665

28810

31697

34954

39309

28844

31752

35051

39611/1

11808 16848
11829 16935
11918 16997
11936 17053
11960,17073
12094 17345
12112 17362

21096
21143
21318
21356
21365
21382
21559

24745
24761
24785
25035
25249
25273
25300

28851
28852
28857
29021
29075

31772

35115

39690

*

31814
31854
31855

35163
35202
35358
35436

39785
39982

i

16157

specified above will be redeemed and paid

29079

31863
31925

29086

32013

on

35446

"
-<

I

35571

October 1, 1949, at the

\

101%% of the principal amount thereof together with interest accrued thereon to the ;
date of redemption. From and after the date fixed for said redemption, all interest on said
i
Debentures so called for redemption shall cease.
.
•
/'
The aforesaid Debentures are required to be presented and surrendered for redemption

at

the said office of the Paying Agent on the redemption date with all appur¬
maturing after October 1, 1949, and may have the October 1, 1949 coupon
aforesaid Debentures may be presented without the October 1, 1949
coupon being attached, in which event said Debentures shall be paid at the redemption price
less the face amount of such coupon, arid such coupon shall be paid upon presentation and
surrender in the ordinary manner.
:
'«*
'
In case any of the aforesaid Debentures shall be registered as to principal, the surrender
thereof to the Paying Agent shall be accompanied by appropriate instruments of assignment
or transfer duly executed in blank if payment is to be made to other than the registered
and payment at
tenant coupons

.

attached. Any of the

.

,

.

CELANESE CORPORATION OF AMERICA
Dated: Ne# York,

N. Y., August 31, 1949.

\

.

holder.

level which

They can not be imposed
unless two-thirds of the farmers

8657
8669
8805
8861

■,

office of the Paying Agent, Dillon, Head & Co., 28 Nassau Street, New York 5, N. Y.,

the Congress has designated as too
high.

8633

I
?
?

»

10

esti¬

in

mated to increase annual revenues

is

and

Pennsylvania Brevities
PTC Ruling

*

This Month

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(850)

counties

Tioga

is

and

"Hearings to. end all hearings" in the Philadelphia Transporta¬
Company's eight-months' quest for higher fares were concluded
before a full panel of the Pennsylvania Utility Commission Aug. 23,
following which members of the rate-fixing body said they expected
in three of four weeks."
The
seeks

transportation

Merritt
Red

company

operates

which, it avers, the system
the alternatives of insol¬

out

fare with

the drastic curtailment
to the public. Fred¬

erick

that

Commission
months

six

in

$1,600,000

lost

company

first

principal

the

the

filed

out

an

in

increase in revenue. "Of

of Lukens

accused the man¬

Solicitor,

City

fail¬
ing to put "obvious economies"
agement of inefficiency and

"This application for

effect.

into

rate increase is unjustified," he

a

"It ought to
should
cut out its tremendous fees to en¬
told the Commission.

be dismissed. The company

again

going

a

"If

base

replied,

asked me, I'd say five
time the riders got on
and no transfers, - I'd try

you

cents every
a

car

it

for

didn't
then

90

get

the

needed."/ i

money

it

raise

the

If

days.

company

it needed,
is

whatever

to

■■; ■ ■■;'■■:.,

-

Mr. Truscott failed to

'

reply to

question as
to who would pay the losses
should such a plan be adopted
and
result
in
further heavy
Mr. Siggins' further

operational deficits.

Joseph Sharfsin, counsel for the

Citizens Committee
Against the Fare Rise, proposed a
7%-cent base fare with all trans¬
Philadelphia

fers

eliminated.

are

like

1948

Wolcott says

the

of

weeks

16'

remaining
company's ac¬

which will end Oct.
"point to lowered sales and

counting

29,

year,

less income."

For

what

compares,

the

to

first three quarters, Lukens re¬

ports, net sales of $46,942,027
and
net income
of $2,592,320,

equivalent to $8.15
share.

1948

The

per common

figures

'

5s 1963

Phila. Warwick Common

'

subsidiaries

$87,496,711

the

merger,

Last

decline in sales

at present

in evidence, points out
Mr. Wolcott, the company is faced
with demands for wage increases,
social benefits and pensions which

nation's

releases

news

Penna.

.

U

.
.

Co., in¬

corporated the same year under
the laws of Pennsylvania, is still
solvent, and

'

*

but

said:

"You

are

PITTSBURGH—Continuing the
steady rise, steel operations in the
Pittsburgh
district
began
this
week at 85.4% of capacity, highest
scheduled rate since June 25. This

the

compares

with 83.9% the previous

The

Pennsylvania Public Utility

Commission has granted Scranton
Co.
permission / to
in¬
The

its

rates effective

increase

tomers

Wayne,

affects

Bonds; $2,000 Pennsylvania

RR. 4i/2s, 1966; $1,000

Sept.

85,000

in

31/2,

1966,

WestPenn
rental

and

parcel of real estate lo¬

cated in south Philadelphia.
A dividend of 2 cents per

share
company's capital stock
paid Jan. 1, 1949, to holders
of record Dec. 7, 1948.
the

was

Mrs, Ann Jann, company; Sec¬
is unable to state the num¬
ber of shares actually outstanding
from one year to the next. None
of
the
original stockholders- is
living.
As
ownership
changes

1.

cus¬

Lackawanna, Luzerne,
Susquehanna
Lycoming

from generation to generation, an

increasing number of certificates
becomes

inadver¬
tently destroyed. In 1947, divi¬
dends were paid on 51,747 shares;
mislaid, lost

or

poorly cloth¬
people are

Members

Phila.rBalt.

Packard Bldg.,

Stock

1 d."

For

example: The

u

Company

Lfecoln £lec.

.

Cleveland

of

One hundred

re¬

and

seventy-five
successful free
enterprise experiences like this in
years

our

for

of

evermore

country, is evidence enough

;j;

me

that

We'

must

careful

be

not to kill the goose

which is lay¬
ing the golden eggs/ Despite all
of its inadequacies,
we
have a
system which is the best in the
world. The American paradox to
me is that our own workers, who
benefited

most

the

from

businessmen.

theoretical

and

Labor
govern¬

planners

promises of security but at
Why do

may

hold

out

to

bare subsistence level.

our

Equipment Trust Certificates

people act

so

foolishly?

Where Business Failed
Too many

Merchants Distilling Com.
Phila. Transp. Com. & Pfd.

our business lead¬
phenomenally suc¬
commercial activities,
but miserable failures as public
relations men. They have lacked
good two - way communication
with their employees and
with

Richmond Cedar Wks. Com.

their

ers

Atlantic

City Elec. Com.

(Alan)

Power

Co.

Com.

STROUD & COMPANY

E. H. Rollins & Sons

Incorporated

Incorporated

1528 Walnut St., Philadelphia 2
New York

Boston

Chicago-




1835 Count de

said:

'

*

ALLENTOWN

•

PITTSBURGH

!'

communities.

NEW YORK

SCRANTON

sphere of individual freedom;
socialism restricts it.
Democracy
attaches all

possible value to each
socialism makes each man
an agent.
Democracy and social¬
ism have nothing in common ex¬
man;

word — 'equality'.
difference; while

one

the

mocracy

socialism

LANCASTER

But.
de¬

seeks equality in liberty,
seeks
equality in re¬

straint." Any

you

happy citizens.
Our

Business

of misinformation

economics just

withstand the white-heat
est

*

workers

to

not

are

for their actions when

blame
do not

we

give them the economic facts of
life.
We shall have to spend mil¬
lions

constructive

on

and promotional

the

advertising

material to teach

plain economic facts of Free

Enterprise.

This

means

educating

the Press and Radio, campaigns in
house organs and over public ad¬
dress systems.

leges.

It

It

in

appearances

means

schools

platform

writing

means

col¬

and

simply

and

distributing widely corpora¬
statements, and a dozen and
full fledged
public relations staff.
It means
telling the people fully and frank¬
ly what Free Enterprise has done:
for them.
You say you can't af¬
ford such a program?
I say we
can't afford not to put such a
program into action—at once!

tion
one

similar jobs for a

has

Max C. Ibers, Jr.

Rejoins Oscar Kraft
LOS

ANGELES,

Kraft

1

•

extends

the

C. Ibers, Jr.

unsound
'

Tocque-

"Democracy

in

That kind

PHILADELPHIA 9
•

PEnnypacker 5-0100

afraid of

are

The Time Is Now

The greatest danger to business
today is not the spurious "some¬
thing for nothing" philosophy our
government has sold the people.

Wood Steel Pfd.

Bought—Sold—Quoted

they

me

not sold itself.

Wood Steel Common

(Alan)

of

have been

cessful

Interstate

promo¬

psychologist will tell
that restraint and frustration
cently distributed upwards of $3,- go hand in hand. When men are
500,000 in incentive payments to restrained, their behavior be¬
1,097 workers.
These payments-, comes irresponsible, their char¬
The Ameri¬
made possible only by individual acters become weak.
initiative, practically doubled the can sytem of Free Enterprise en¬
income
of
every
worker.
By ables men to be aggressive, to hold
their heads high, to struggle and,
working hard, Lincoln produced
more
goods at lower prices and through individual initiative, be¬
come responsible, productive, and
everybody benefited.
trie

COrtlandt 7-6814

PH 375

o

Roger W. Babson

ment

Exchange

N. Y. Phone

ville

notice

w 0 r

w

d

a

Philadelphia 2

J

Back in

cept

them

Underwriters and Dealers in

constructive

on

inferior.

the rest of the

successful

&Co.

made,

were

factors.

as

I talk tell

they are
the envy of all

leaders

Teletype

off

well

so

that

highest standard of living in the
world, will not choose as leaders

John B. Stetson Common

K^PhHIips

Our

ed

have

Co.

I

ill-housed and

received from the
company's "investment account"

retary

Scranton Electric Co.

adjustments

no

cited

were

employed,

u n

Additional income

consisting of $4,000 U. S. Treas¬

"Yes,

know.

of $593.96 was

on

to

The 1935-39 average
production is rated
Employee vacations, for

100.

unem¬

plied.

original Tom
still leases its
of oil-bearing land in

to $1,654.63.

a

index

June

industrial

ployed." I re¬

304.51 bbis. of oil amounted

Power

from

Washington and how it will affect
and frightened company president
know, Mr. Babson, America is living in a paradox—in
our great land^of wealth and
phers are liars and their products

Fop the period

from

Bureau's

points

two

and the miners' 3-day work week

businessmen with whom

Most

County to operators on a
one-eighth royalty basis.

Operations

Re¬

the monkey business going on in
their business. Recently one tired

Warren

*

*

Steel

Business

tional material to teach facts of free enterprise.

company

oil

vi?"

The

month.

dipped

relationships. Says millions should be spent

dividend-paying

amount-to 30 cents per

;

of

lege reports a slump in industrial
production for the sixth consecu¬
tive

which

plenty, people

acres

ury

Bureau

search of Pennsylvania State Col¬

on

concern.

!

Penna. Index Slumps
The

By ROGER W. BABSON

,,

well known is the fact

so

company

$4,357,312.

'///*

* /.:*

fears of businessmen regarding political and eco¬
nomic conditions, Mr. Babson holds such fears could be allayed if
businessmen themselves take action to improve public and employee

Commenting

from Dec. 9,
1947, to JDec.' 7, 1948, revenues;

of

;//]/v

as

has

press

commemo¬

that the Drake Petroleum

hourv The
remains in strong finan¬
cial condition. As of July 9, cur¬
rent assets were reported as $18,105,028 (including cash and gov¬
ernment
bonds
of
$6,292,110),
compared with current liabilities

banks this year.

Businessmen's Fears

%

pitcher to bail crude oil from the
country's first well at Titusville,

few

the amount of
to
$2,000,000.
This
the full $1,400,000 due

loans

$81,612,391,

to

the

week

Thumb

of

bank

profit from $6,386,776 to

niversary, Reference was made to
Aug. 27, 1859—also a Saturday—
when Edwin L. Drake used a tin

a

its

to

July to 167.

approved
pending since No¬

Commission

Motors

payment

reducing

such

of

The Pennsylvania Public Util¬

ity

the

applicable

completes

the

#

*

#

Pennsylvania's "Old Timer"

records
a

with

the next three years.

over

Early and intermediate history

In addition to

ad¬

construction
at $888,000

scheduled

program,

and
declined

Issues

Samuel

stock

common

is shrouded in the wraiths of lost

respectively.,

in

and

these securities will go toward the

company

Phila. Suburban Water Com.

Phila. Transportation

Hanover

company's projected

periods,

$40,671,343, $1,185,671 and $3.73,

crease

N. E. Walnut & Juniper

of

value

vol¬

were

is

Cambridge Bldg. 3s 1953

the

of

domestic
from

Not

Electric
>.

sales

net

*

'

and

Merger Approved

%

substantially
period,

very

the

of

York

jacent areas of York and Adams
Counties, Penna, has filed $400,000 in new bonds and $120,00.0 par

$4,425,276.

week and 95.5% a year ago.

reported to favor a
basic 10-cent fare, with a charge
of 2 or 3 cents for transfers.

business

in

comparable

the

For

■

Commissioner Harold A. Scragg,
Scranton

in

Reading.

ACF-Brill

week,

announced

loans,

County Gas Files

County Gas Co., operating

ume.

and net

that indications for the

an

Truscott

fare,

York

rating the oil industry's 90th an¬

9,

ahead

and

Truscott considered to be a proper
low

some

under review, there
encouraging signs cf

upswing

an

for the first

Steel Co.

President Robert W.

inquiry by
John
Siggins,
Jr., ' Commission
Chairman, as to what figure Mr.
to

response

period

July

solvent concern."
In

the

were

carried

gineers and lawyers, its public re¬
department, cut down its
maintenance costs and put into ef¬
fect a fare as low as possible to
once

Cork
Co., nevertheless
"toward the end of

that

36 weeks of its fiscal year, ended

lations

become

hearings

Although net sales and earnings

Opposing the proposed increase,
Frank F.
Truscott, Philadelphia

Co.

mission. Proceeds from the sale of

Lukens Steel Co.

for labor."

Last

the

Pennsylvania Public Utility Com¬

noted

last

Washington, Sept. 7/
'//
*
" * '■

dollar we collect," he told
the Commission, "71 cents goes
every

for

II. W.

strong

*

December, have been
scheduled for Sept. 26. This is not
related to hearings on the sys¬
tem's
Plan
of
Reorganization
which will open before the Secu¬
rities and Exchange Commission

com¬

and

higher than

were

in the first half of 1948,"

Pittsburgh Railways Co.'s pe¬
tition for fare increases, originally

hour to $1.35 with¬

an

*

rates

,.Co.

Prentis, Jr., President of Arm¬

on

ponent of higher costs was that
of labor which has risen from
05 cents

salary

longer routes.

on

*

stood to lose
another
$1,000,000 during the
remainder of the year. Ballard
that

fares

zone

earlier, to

and from the fact that wage

7J/£-cent

PITTSBURGH—Final

present rates and

stated

PTC,

transfers but with

no

a

the first half

in

of

ACF-Brill Motors Co.

years.

York

Co.

Philadel¬

$350,000

compared to $4.21 a
a "drop in sales

1949,

year

the

under

1949

of

ing

counsel,

Ballard, PTC

L.

the

told

basic

a

of

" which

to

share

common

suburban

feeder

a

Petroleum

decline in earnings to $2.80 per

of

the possibility of later introduc¬

service

of

as

a

system

recommended

faces

vency or

Lines,

Arrow

transportation

basic 13-cent fare with¬

a

President

Taylor,

tan Edison

Real

with

Metropoli¬

parent company,

President of

as

Drake

vember, 1946, of Edison Light &
its

;

LANCASTER—Attributing

"with-<2>

'

818

Bldg.,

last 20

Armstrong Cork Co.

';

:

value

Power Co. of York, Penna.

at

offices

Trust

phia, has served

tion

to hand down a final order

with

ney

Estate

75 cents.

creased from 50 cents to

Par

,

Mr. Glenn C. Mead, an attor-e

mum
monthly rate for domestic
electricity, reported to be the low¬
est in
thestate, has been/'In--

,

45,608.
: ■■

on

$10.

The company's mini¬

by $411,457.

'■

1948,

Thursday, September 1, 1949

facts.

■

demonstrate

Any
that

can't

of hon¬

salesman
such-

and

could

philoso-:

Street.

&

CALIF.—Max

has rejoined Oscar F.

Co.,

Mr.

530

Ibers

West
has

Sixth

recently-

been with Gross, Rogers & Co. in
Los Angeles and T.

J. Feibleman

& Co. and Weil & Co. in New Or¬

/

leans.
Also
car

added

to

the

staff

F. Kraft & Co. is B. E.

previously

with

rities Corporation.

Buckley

of

Os-.

Savage,
Secu¬
:

170

Volume

Number 4834

'

THE

-

CHICAGO,
Bond

hold

its

day

at

A

'"'V',,'- "v'y

Country Club on Fri¬
day, Sept. 23.
The event will be

?'?■ V

\

dinner at the Drake Hotel.

planned for the day will
golf tournament with prizes

? '''

•

**•

-

:•

—

?

-

:

;

almost

low

low

gross

entirely

in

art,

seasoned

and

listed shares.

They seldom if ^evei
' take new, untried issues. And that
is going to be the big need in the

seems
practically impossible for us, to plunge into a serious depression. Only a very
(guest);
(member); foolhardy program of the Government or injudicious labor
leadership could over-extend the
foursome; individual
present readjustment period. With the banking situation sound, " with a lack of inflation
low net
(guest); individual low in
<$>the securi¬
net (member) and other awards.
ties
i trend is being supported and aided
markets,
privilege and can hardly be justi¬
Players will pay their own caddie
with
con¬
The
by production arising in an econ¬ fied.
argument
that
co¬
fees '(152.50 for 18 holes).
sumer savings
omy that .is conservative.
It is a operatives do pay these taxes and
There will be a softball contest
true statement that many of the are not
totaling over
enjoying a special privi¬
starting at 2:30 p.m:
In tennis,
$100
socialistic countries would have lege, is liquidated
billion,
by the fact that
in
addition to the singles and
with the agri¬
collapsed long ago had they not every time an effort is made
doubles championships there will
jto
culture
?been the beneficiaries of the free, tax cooperatives, ^there is violeht
out-;
be? special prizes for those- two
look
satis¬
competitive ,enterprise economies- objection. "* If " the" general
law
players w;nning the highest num¬
sin other nations.: Third, you have were made applicable to cooper¬
factory, ; and i
ber of games who have never pre¬
an
with the na¬
armament race,
the cost of atives, and if in their opinion ho
viously won an award at a Chi¬ tion's
"which over any long period of special privileges were now ehand the
cago Municipal Bond Club tennis
world's needs",
time is unbearable. •
joyed by them, then the logidal
tournament, # Winners in the
still far from
U Considerable discussion and ar- question asked by business and
singles
and
doubles: champion¬
1
being
satis¬
gument is found in the present other taxpayers is why the objec¬
ships ■■ are not eligible for pne. of;
fied, it is even rday about taxation policies« and tion to the proposed law.
the special prizes.' Other events
d i f f i c u "11
The
the
true
cooperative - should
exemptions offered certain
are also planned.
to
imagine! a ~ Henry H. Heimann
that
there
has
been
groups.
I believe it can be fairly recognize
Buses for the JKnollwood Coun¬
government or
stated
that
very
few
business great abuse of the tax exemption
try Club will leave the Drake man-made
depression in the light organizations object to the tax privilege.
It would be much bet¬
Hotel Sept. 23 at 9:00 a.m. and
of these favorable factors.
exemption, privilege of a true co¬ ter if cooperatives as a whole de¬
j
12:00 noon.
Guest reservation fee
While the present readjustment
fined a program that would limit
operative.
In
general, a
true
will be $25.
Checks should be has
been cause for some
the tax
exemption privilege fto
concern, cooperative would be defined by
made payable to Ross A. Gustafmore - experienced business lead*
these groups as one that concen¬ those actually entitled :to it.
Un¬
son,
Northern "Trust Company, ers and
economists look upon it as trated on aid to the
farming com- fortunately, there has been- too
Chairman
of
the
arrangements a
healthy corrective program. fnuhity in «godds and services that much emotion and too little fair
committee.
Fortunately, too, it has been stag¬ are
With*
essentially
and
peculiarly analysis of the situation.
Members of the committees are
gered and selective so that it has
the tax burden as heavy as it is (
contributory to better farming and
Milton S. Emricb,
Chairmanf of j been more easily absorbed than if which
goods and services cannot everyone must agree that it must
the general committee.
it had been! widespread and gen¬ be
be equitably distributed.
That is
procured at a reasonable price
Members of the other commit¬
eral in

individual

particular stock? Where

"The purchases by the trusts

t

It

-

for individual

the

ahead

years

Events
a

By HENRY H. HEIMANN*

Executive Manager, National Association of Credit Men

?

some

buyers come from, and
what prices will the buyers pay?

i

Leading credit association official, contending economic readjustment is already well on way and plunge
into serious depression seems practically impossible, predicts there will be
adequate cred t facilities for
deserving borrowers. Warns against foolhardy government program and injudicious labor leadership.^

preceded on Sept. 22 by cocktails

be

(851); 11

Healthy Corrective Program

the

Knollwood

and a

CHRONICLE

will

ILL.—The Munici¬
of Chicago will
field

FINANCIAL

> --w

Club

annual

&

sell

Municipal Bond Club of
Chicago Field Day
pal

COMMERCIAL

gross

the

—

venture

new

supplying of

capital.

.

/

„

"Instead of making business lot

V

the Stock Exchange and the other
exchanges, this trend may:be di¬
verting business away from -these
marketplaces."

first low net

Chilson, Newbery
f

-

>

,

.

~

~

,

L
Ghilson, Newbery & Co., jlnc,
Kingston, N. Y,, announces the
opening of a New York City ^office
of

at 40 Exchange Place.

Earl New¬
bery will be the resident manager
the

of

will

office

new

have

the

and

direct

iirm

private

torirc
Kingston • office te
Stanley Pelz & Co., New York
City-: 1
'

from

"

a

their

Samuel Franklin Adds
'

r

,

Chronicl^)

(Special to The Financial

\LOS

CAL&V-

ANGELES,

Hiram H. Stolurow has been add¬
ed

to

the

staff

Franklin &

Street.

"tVest

Co., 215

He

Samuel

of

B. '

Seventh

previously,Jvith

was

C. E. Abbett & Co.
-yH~

.

tees

character.

are:

been

|

1

Arrangements: R°ss A. Gustafson, ?Chairman;
William !A.
Noonan:
P. A.
Bergquist.f First
National Bank of Chicago; Ronald

pected

W.

Evans, Harris,

and

Charles

Chairman:

F.* Hemen-

if

business

continued

tad

George
L.
Martin.
& Corbet: J. M.

as

millions
use

_

every

employment

j

four

this prob¬
The

savings
for
co¬
operatives for the, exparis'on into
aU fields whether or not directly
related to farming is a program to
businessmen

which
The
,

do
object.
frequently
put

argument

forth that business receives

a

sub-

f'nd ! sidy through tariffs is no answer
but we;to the question.
If, tariff con-

them,

Entertainment: George S. Chan-

j^ust mot overlook the fact that sideraticn amounts to a subsidy or
there are presently employed an- \
Channer Securities Co.,
Chairman:
Henry
W.
Meers, proximately 60,000,000 people. By | Slves special advantage, it rests
ratio, our unemployment total ic
j upon . a • foundation .of special
White, Weld & Co.? Walter E.
small though this fact should
Lang, Harriman Ripley & Co.:
not'j ~~
""""" " ~
~
George L. Martin, and James T,
Quigg, Paine, Webber, Jackson &
Jr.,

ner,

.

s

Refreshments:

Edw.

J.

L.

F.

Yates. C.

S.

M.

Rieckhoff,

Knight,

,

executives

are

in

the

and

accoun's

of

.

will continue to show

and

Northern Trust

The

crease.

heaviest

in¬

an

'ncrea^e

in

,

business

Hintz, McDoueal & Condon; John
N. Faust,
Golf:

&

Oilman,

The

.

H.

Heighway, Hornblower &
Paul
Stephens,
Paine,
Webber, Jackson & Curtis.

credit

a

says

Softball:"

Andrew

Boston

Thomas

to

even

in normal years

"where

ling

,

Buchan,

D.

bring

a

of

re¬

Chairman;

Corp.,

Kevin,

of

First

rowclough,
Barron,

Doyle,

Michigan

O'Connor

&
•

Special:

John

H.

Jackson, Lee

Higginson Corp., Chairman; Ar¬
thur Tresch, B/rJ. Van Ingen &
Co;, and Roland Merrell,' Jr., Lee
Higginson Corp. * '
*
MM— '

'

be

are,

First

on

Ewing

the

accumulated

still far from

are

being satisf'ed.
be supplied

When these needs
on

ficial

have gotten

back to

nomic program. ?,
■ ■

■'

-

..

.

will

we

sound eco¬

a

!?

• *..,

'

.

i

..

T~

•

un¬

the business

have

the

heavy government debt and the
high taxes resulting therefrom.
We cannot for many years, as the
economic
history of the world

(dearly

continue to use a
third of our effort for

proves,

fourth to

a

the support of government.
Sec¬
ondly, we have a world situation

where the trend is toward the left
and

where

unfortunately

FRANCISCO, , CALIF.—
Harper is engaging in a

*An

before

this

the

bv

Mr.

American

Feimann

Tnstitute'of

Cooperation at University of Wis¬

securities business from offices in

consin,-

the Hobart Building.

1949.




address

Madison,

Wis.,

Aug.

are

added
Leslie

Gould

25,

the

on

to

taken

this

is

of

out

form

velops, it

reaching

market

stock

market

the

to

thinner

even

to

the

companies^ which
in

list

of

listed

sell

to

a

stock

a

mostly

companies,

on

shares
of

to

long

those

exchange.

The

object is to give the investor di*
versity of investment, plus — in

theory,

anyway

—

ings,

professional

"Eight
end'

trust

ago,

years
were

market factor.

assure

ing

not

Simply

jand

firm of good advertis¬

your

position

at

low

rates.

Call,

write for them today.

or

be

"peak"

a

readership

for

cial Issue.

of

quality

firm's

your

an¬

in this valuable Spe¬

nouncement

All the

leading dealers,

brokers,

traders,

bankers,

large-

trustees
tives

than

will

issue

the

and

.

.

underwriters,

is

gets
more

or

execu¬

will

it for future

bigger

may

estate

business

watching

and

your

contribution

it

market

investors,

top

vbe

.

NSTA

buy through the
Exchange, or any of its

Exchange firms in the sale of in¬
trust shares.

vestment

the

it

and

reference.

And

ad, the larger the
the

to

its

and

for

read

coffers

affiliates.

of the

As you

know, "The Chronicle? gives

the NSTA most of the advertising

profits.

..

>

?

.

* -•

Like

the
much

'openof

a

Their investments

way
as

up

*

*

cause

of their higher CQmmissions

available—the firms get 5% to 6%
on trust sales against
an average
of 1%
."The

on

What

raises

trusts

another

happens

decide

of
at

time and

the

Convention

your

in

space

help

effort to make
Issue.

cooperation

make

order
the

in

That's

sending

TODAY
climb

would

faster.

Prompt, individual attention paid
instructions.

your

to phone
write
NSTA

Don't

forget

REctor 2-9570—or wire,

for

full

data

Convention

TODAY.

Issue

Depart-

ment of

j

THE

COMMERCIAL AND

when

several

of

approxi¬

mately the same time they should

.,

Pikes Peak, it takes fast

up

much

a

-

Stock Exchange trades.

thinness

the' managements
the

If

the cog railroad; puffing its

why

to

"The Exchange firms have gone
into this in a big way partly be¬

•question.

*

•

It's easy,.,

•

of

Organ

advertisement today

an

the

Stock
be. brother .and sister boards
any vol¬
the ume of stock in a
given company;

reinvest the funds

securities

Official

the Association.

list

the. public and

aboard the "Chron¬

ISSUE,

de¬

of. things It will reduce the liquidity of the
t>■ v
m a k i n g for mafket;
?
?
c
'
?] ;
thin markets.
This is the rapid
--"This is something that should
and continuing expansion of "the
be concerning the management of
so-called
'open-end'
investment
the Stock Exchange, as the big "de¬
trust.
1
'
' ? %
■
velopment
in the
last
feight
'Open-end' trusts are investing months has been the entrance ;of

obtained

TION

as

make

thinner, it will become that
difficult to sell

be

and

investment

will tend

As

now.

of

the
of

to climb

save

lot

a

the

*

-

$2 billion mark.
"That

attend

icle's" SPECIAL NSTA CONVEN-

There'll

four

road

to

<

if

year

^

times that
figure—more than $1.6 billion, and
about

are

railroad

this

whether you are going or not, be
sure

wire,

around $448 million. Today

they

planning

;

_

1—:

i——
were

you're

Peak

NSTA Convention in October. But

place
.

Pikes

arti¬

an

gratuitous basis,

or

visit

can

normal rather than

a

Climb aboard the old cog
to

can

—

management of the investor's sav¬

Ewin^ Harper in S. F.
SAN

because

moved

needs of the nation and the world

erally skipped

decerving of
willing and

you'

"? ?

"Another
factor—which

Available

of course, some

favorable factors

points,"
Gould

has been gen¬

Anxious to make loans.

( There

drop

states:
•

closings

adequate " credit

for all those who are
it.
The banks .are

horizon.

Corp., Chairman; Paul Uhl; Ger¬
c°.

Credit

can

a

3

Mr.

over

There will

.

Transportation: George L. Bar-

_

Adequate
,

300

only

shares

not

sizable in number.

are

sell

total¬

orders

for
the business

voluntary

or

market

thinness

en¬

are

?s

m a

for

the prewar condition

fatalities

Jr.,

Glore, Forgan &
Co.; Eugene C. Travis, Harriman
Ripley & Co.
'

(

The real economic test,

1950.

AT PIKE!

read¬

their opinion, is still years re¬

k e^

which

of it

success

They would describe it

Woodward Burgert, Harris

Trust & Savings Bank.

■■

in

the

Writing in the New York ".Journal-American" of Aug. 25, Leslie
Gould, Financial Editor, ascribes part of present thinness of the
stock market to recent growth in open-end investment trusts. Com¬
menting on factors, such as over-regulatjon and public apathy,

necessary

executives

turn

Bacon, Whipple & Co., Chairman;
Franklin Bickmore, Boettcher

ald

,

year

believe

They

Financial Editor of the New York "Journal-American,"
they take shares out of market and reduce its liquidity.

J.

First

...

„

alarmed about the existing trend.

Weeks;

Tennis: Francis R. Schanck,

the

training to

or

able them to make

Kebbon,

Chairman;

Co.,

without

apprenticeship

Kidder, Peabody & Co.

Carl H.

McCormick

& Co.;

year

Leslie Gould,

t^e

number of failures has continued

failures is found among the inex¬
Special: Lawrence A. Wingader,
perienced men in business. In the
John Nuveen & Co., Chairman;
postwar era many peop^ without
William S. Morrison, Jr., Harris
business
experience or without
Trust & Savings Bank; Gene A.
business
capacity
entered
i^to
Frantz. \7>eden & Co.; Walter A.

O.

the

to

expe¬

difficulty

more

collection

Childs & Co.:

:

Co.

Credit

riencing

Blyth & Co., Inc., Chairman; War¬
ren

confidence

SSTiKSaa?* "■ - " ■"! KoKs Opee-EiiafTrusts esaselafeef'Tfiiraess"

Curtis.
'

Credit executives look forward

with

ahead.

effect.

of

A "

the American concept.

justment period is well along its
way and they anticipate a satis¬
factory volume of business* in the

in

not

were

to

means

for

we

.

coopera¬

'pr>ds

utilization

or

unemployed,

......

should

have

we

a

Business> too, would

lem If the double taxation of divi-

at

for

long

benefit of

.

be less concerned with

-

So

five

Burns

Maxwell, Northern Trust Co.

without the

tive-effort

ex¬

a>jr e a 1 collapse
would have been constructed.

Illinois Company of Chicago,

Martin,

have

the ; business

foundation

Reception:

■

this pace, we would have built up
such inflationary forcfes that the

Hall &

Co.

way,

to

activity to
continue "on a war tempo basis.
The
war
activity was artificial

M. Coutts. A. C. Allvn & Co. Inc.:
Carnot

It would have

foolish

very

LET'S

FINANCIAL
25 Park Place

CHRONICLE

New York 8, N. Y.

<<

12

THE

(852)

COMMERCIAL

&

FINANCIAL

CHRONICLE

cation.

Prospectus
your

National
research

securities

corporation

120 broadway, new york 5, n. y.

in

states

trust

our

lion to $255 billion—an increase of 179%.

Personal Income

expected that the

profits and income.
half

the

the

But

decade—were

years

goods

produced

million

and

more

employed—today,

were

More People Buying

purchases.

In

More—With present

1939,

The

In

Nevada,

forty-eighth in the

of

holdings,

aggregate

45

total

the

popu¬

^

compilation
of

number

own¬

of investment trust or invest¬

ers

fund

ment

1939, 45 million

'

following

shows

salary levels

wage and

shares,

each

in

state,

together with the percentage

people earned $45 billion in wages and salaries. Today 59 million
people earn $135 billion. Other income, too, has increased—Dividend

holders in relation to

Payments from corporate profits, for example, have doubled. Total

(based

Personal

ures):

Consumption of goods and services has increased from $67.5

the

on

1940

population

fig¬

census

'

purchase

Dividend

available

plan
of

business

in

request from

CALVIN

Maine

relation to

New

BULLOCK

53,307
15.324

1.4

5,043

of Boston.

California

Michigan

Assets of "Affiliated"
Affiliated

Up Sharply
an

Since

last borrowing

of $2 million

shares of capital stock have been in
tional

borrowing

borrowed

LOW PRICED

is

therefore

on

July 1, sales of

of $6 million.

excess

maintain

to

necessary

to total assets at

money

the

rate of 2J/4%

°F

24,734

amount deemed

an

new

ratio

advisable

Illinois

by

2,630

dealers.

-

Maryland

South

-

from your investment

dealer

f)i$tiibutori GrQUfC Jocprpordtecf

w-

but

ing,

1,301
—

The

basis of population percentage, Maine
Hampshire have highest ratio of holdings.

and

National

Association

of

Securities

Dealers

0.2
0.2

7,018

0.2

-L'JJ.:x

v--*
_

*

0.2

C.lv,

,

0:1

s.

;

.I...
_

_

1,999

0.1

2,540

•

J.

Mississippi

■'
•

395;

0.09

0.08

1,837

Virginia
Kentucky
Arkansas

3,825

1

_

South La Salle Street., Mr. Cun¬

1,636

West

concentrated

porate

stocks

a

tion.

western

states,

Custodian

for

instance,
in

heavily
ownership

are

the

lists, and there is much less
i1

centration
than

within

few

a

indicated

was

in

con¬

states

the

cor¬

porate stock study.
California reported the largest
number of holders of investment

Funds

trusts

Certificate.* of Participation in

76,396.

shares

of

with

state,

any

New York

investing tkeir capital

IN

This latter group
in¬
cludes Delaware with 395, Nevada
with 481 and Wyoming with 939.

Totals

California

The NASD survey embraces 105
funds which reported

New

the Union

is

and

the

Every state
District

represented

in

of

the

ownership records, although three
states
recorded less than 1,000

55,196
53,307

an

Michigan

42,749

aggregate of 658,618 owners of
their shares which, of course, in¬
clude duplications since no cross¬

check

Massachusetts

the

shares,

a

most

state

not

23,152

New

Jersey

Oregon

-i—...

—

16,632

•

13,744

Kansas

13,401
13.169

;

Indiana

Washington

as

12,715

Texas

12,368

Florida

11,380

'

Connecticut

8,114
7,178

Hampshire

Iowa

Tennessee

imnortant considera+'^n

Georgia
North

in determining newspaper publi-

7,018

1

:

6,562

Carolina

6,517

Colorado

6,436

;

Nebraska

.'

.

.

•

»iurlocal iiwatmeiU deaUr

/

V

& onJ

Investors/

Keystone Company
of Boston
50

Write

dealer

Congress Street

Boston 9, Massachusetts

and

to

your

or

to

Alabama

3,825

South

cial

*'h.

prospectus and other de¬

scriptive material about

1,636

—
.

INVESTING ONLY

Dakota

Mexico




•.

~

1,296
1,133

;

:

Wyoming
Nevada

E

,

Co.

has

Officers
ident

been

formed

with

of¬

are

and

Paul W. Spink, Pres¬
R. Miller, Secre¬

Saul

With J. W. Malmberg & Co.

Delaware,

(Special to The Financial Chronicle)

1,301

Utah

IN BONDS

Chronicle)

CHICAGO, ILL.—Miller, Spink

1,616

New

.

1

1,837

,

_

North

Chicago

to The Financial

Miller & Co.

Idaho

COMPANY

(Special

1,999

Arkansas

INVESTMENT

Formed in

2,173

...

Virginia
Mississippi

REGISTERED

Miller, Spink & Co. x'x]

tary and Treasurer. Mr. Spink in
the past was with Faroll & Co.
Mr. Miller was proprietor of S. R.

3,473
2,630

——

West

A

also of Chicago.

pany,

2,209

;

-

Dakota

Arizona

Company, Inc., 48 Wall

wire, formerly to Robert
& Company of Chicago,
will go to Daniel F. Rice & Com¬
Strauss

2,540

:

-

Kentucky

St.-, New York 5, for the offi¬

Effective Sept. 1 White & Com¬

pany's

&

4,565
4,44o

South Carolina

Hugh W. Long

of

fices at 231 South La Salle Street.

4,591

District of Columbia

local investment

Matthew,
formerly
Scherck, Richter Company.

4,596

Montana

Tke

David

5,043
'

Louisiana

&

and will have associated with him

5,400

Maryland

-

or

——...

Oklahoma.

anhattan

Bond
Prmpectiu from

:

Vermont

ATTENTION,

(Series SI-S2-S3-S4)

ST. LOUIS, MO. —; White &
Company,
Mississippi
Valley
Trust Building, members of the
St. Louis and Chicago Stock Ex¬
changes, announce that Edward
A. White has been appointed man¬
ager of the
trading department

5,576

Island

Virginia

COMMON STOCKS

Expands \

Trading Department

6,340

Rhode

(Series K1-K2)

White & Co.

9,898

New

necessarily

Fahnestock & Co.

15,324

i..

_.

Maine

holdings of shares
is

24,734

Minnesota

lists of corporate
The committee points

out that total
within

trust

32,291

Wisconsin

various

as

33,624

Ohio

attempted.

investment

on

well

41,238

——

Pennsylvania

The study
conducted by the Associa¬
tion's National Quotations Com¬
mittee as a part of its work in
was

42,674

Illinois

was

securities.

was

76,396

-

York

Missouri

obtaining regular daily newspaper
publication of market quotations

Columbia

PREFERRED STOCKS

State

individual

next, with
55,196; then came Missouri, with
53,307;
Michigan
with - 42,749;
Massachusetts
with
42,674
and
in

BONDS
(Series B1-B2-B3-BO

Number of Holders

holders.

Illinois with 41,238.

INVESTMENT FUNDS

.,

in

associa¬

survey by the
Mid-western and

represented

i

cor-<£

were

revealed

previous

K, :yston<

,

than

as

ningham
was
formerly in the
trading department of Hicks &
Price
and
prior
thereto
with

0.08

just com¬
pleted a survey of the distribution of investment shares, which re¬
Following is the record of totals
veals a striking geographical
representation, particularly in western in each state, in order of number
states. Holdings of investment trust shares, this
survey discloses, are of holders:
less

Cunningham

0.2

1,133
5,400

Jas. W.

0.2

12,368

..

Delaware

has

0.2

3,473

Alabama,.-

New

0.2

4,596

Dakota

Carolina

0.2
0.2

6,517

...

Tennessee

'

0.3

4,591

—,—--

Carolina.

South

Utah

on

0.3

6,562

-

Virginia'* .iu

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

0.3

2,209

Texas

Finds substantial holdings in Western States, with California lead-

'

0.3

1,296

;

Oklahoma

Shares Distribution

or

4,565

33,624

-

Georgia

Completes Survey of Investment Trust

0.3

Dakota

North

on request

0.4
0.3

Mexico—

North

a prospectus

0.4

939

1,616

_

I

Louisiana

NASD

0.4

~

Pennsylvania —I—

'

0.4

7,178

_

__

'■

Iowa

•

X 481

__

York

New

0.4

55,196

New

"Selling It to Sweeney." It is repro¬
duced by Ira Haupt & Co. and makes good
reading for mutual fund

0.5

2,173

16,632

_

_

.

0.5

13,169

Jersey-

Chronicle)

—

0.4

_

Nevada

ILL.

0.5

6,340

New

to The Financial

0.5

32,291

Indiana

titled

to
the

James i W.
Cunningham has become associ¬
ated with Reynolds &
Co., 208

0.5

41,238

__

Arizona

look at frage 9 in last week's "Chronicle"

you

editorial

with

of New York.
Payson & Trask is actively en¬
gaged for its own account in the
venture capital field.

(Special

0.6

6,436

Montana

Recommended Reading

.

suggest that
the

11,380

Ohio

per annum.

associated

CHICAGO,

0.6

9,898

_

Nebraska

,

read

_

_____

Id a ho

We

_

_

Colorado

new

i',
and

0.7
0.7

Florida

of

Prior

Incorporated.
was

as

of

National City Bank

0.7

32,715

Connecticut

The addi¬

the

recently
Director

Cunningham With
Reynolds in Chicago

0.8

4,440

13,401

Wyoming

Group Securities, inc.

0.8

Washington

borrowing, total assets of Affiliated Fund, Inc.,
at present market prices, are approximately $102
million, of which
$24 million constitutes borrowings and the remainder, $78 million
the equity.
The interest on all of the borrowed money is at the

SHARES

5,576

__

District of Columbia

the management.

After

0.8

Kansas

its

he

and

Jas.

0.8

23,152

___

1.0

42,749

Wisconsin

under the terms of its Loan Agreement, dated

resigned

1.1

42,674

__

_

Rhode Island..

Fund, Inc. made arrangements recently to borrow

additional $2 million

1.4

76,396

Minnesota

June 1, 1948.

Rawle

W. PayTrask, Jr.

K.

1.4

Massachusetts

New York

1.6

Missouri
Vermont

Established lbP4
One Wall Street

1.6

8,144

_

—

Oregon

values, on a basis of long experience, opportunities
in addition to available returns ranging up to 6%.

exist for growth

—From "Keynotes" issued by The Keystone Company

(Approx.)

13,744

_

Hampshire

Mr.

that

%

Totals

activity in years,, the country's great investing institutions
unusually generous returns. Because prices are low

Frederick

and

son

Textron,

Shareholders
State

able to offer

are

investment dealer or

your

of

Rawle

announced by Mrs. Joan

Vice-President

come

Shares, Inc,

on

Number

What Do These Figures Mean to You?—They can mean more in¬
from your savings.
With the strong protection of the highest

Marshall

of

billion to $176.5 billion, or 161%.

security

(Sept. 1, 1949)
a general partner in the
Payson & Trask, it was

population

twenty-first.

to

standing

>

their power to consume is increased even more.

of

basis,

lation ratio.

59 million.

over

the

same

jumped to twenty-fourth in

X,-vX;:,V.X,\^

make

to

money

is

firm

New
from
second
to
place; Illinois from

which ranked

would boost production,
last four .years of the period—almost
of peace and "readjustment."
What

More People Working—The population in 1939 was 130.8 million;
now it is 148.9 million.
More people means more labor for hire, more

ment

Marshall Rawle
becomes

twenty-sixth
sixth to eighteenth, and Ohio from

over

war years

the growth forces behind this trend?

are

and the offering prospectus

Payson Trask Partner

drops

eighth

to be

in

the

On

York

$224 billion.
was

investment

of

Pennsylvania

thirty-second

from

rose

$72.6 to $212 billion, or 192%. National Income climbed 209% to

holdings

shares.

ratio.

has witnessed growth unparalleled in any other
Value of National Product increased from $91.3 bil¬

economy

10-year period.

It

Details of .this monthly pay¬

Marshall Rawle Is

seventh in aggregate holdings, but

From 1939—last real peacetime year for business before the war-

a

per¬

centage, the states of Maine and
Hampshire lead all other

These Facts May Be Important to Your Savings
to 1949

from

or

important
ratio to be

On the basis of population

,

By HENRY HUNT

request from

upon

investment dealer,

the

is

population
V

New

SECURITIES^ ERlES
-

of

considered.

Mutual Funds

jatIonal

.

There

,

factor

Thursday, September 1, 1949

939
'

-

1

X 481

V;

395

SAN

C.

staff
625

DIEGO. CALIF. —Marion

Erwin
of

J.

has

W.

Broadway.

been

added

Malmberg

to

&

the

Co.,
.

)lume

THE

Number 4834

170

Edwin Jacobs Joins

Staff of
I

Edwin

CHRONICLE

FINANCIAL

Blair F.
Co., New York, is

V'

By PAUL EINZIG v

Dr. Einzig discusses the pro and
and

sterling

-

NSTA Notes

of proposed fusion of dollar
a fusion in near future :

con

and contends such

areas,

working both for and against British interests.
danger from plunge into another convertibility experiment.

Sees

.

SECURITY TRADERS ASSOCIATION OF NEW YORK
*

The Security Traders

jLONDON, ENG.—It is one of the declared objects of the Wash-

.

ington financial discussions to examine the means by which the Ster¬
ling Area and the Dollar Area could be united. There has been no
official

indication

to be

policy

the

Stanley Pelz

of

Exchange Place, New
I York City, in their trading de¬
partment.
Mr. Jacobs had been

riers.

In

New

York

office

for

13

tical

Function

Shortly

The effective date of the merger
of
four leading
midwest stock

exchanges has been set as Sept.
15, by vote of the representatives
of the respective institutions. The
new organization is to be known
the "Midwest Stock Exchange"
and. is to be located in Chicago.
as

Memberships and security listings
on the merged board will be ac¬
for- sixty

that

date

beginning

days

of

members

from

merging exchanges and

period

corpo¬

expires and thereafter at

whatever
market.

they bring

the

on

open

transfer of listings

The

to the

enlarged exchange will be
executed free of charge during
this period.

order to facili¬

Apparently, in

tate the initiation of the
curities

se¬

Securities

the

exchange,

new

Aug.

with, the rule will become effec¬
tive after Sept.

The current

15.

rule provides that when two ex¬
changes in the same metropolitan
area
merge,
the surviving ex¬

change may, without asking SEC
permission, continue the unlisted
trading privileges of the absorbed
market.

The

rule

new

would

broaden that considerably by au¬

thorizing such automatic continu¬
ance where exchanges in the same
"vicinity" merge.
The term "vi¬
cinity" is defined as a single geo¬
graphic division or adjoining divi¬
sion, as classified by the Census
This

Bureau.

would

the

cover

consolidation of mid-western ex¬

would

having

to

postponement
until
can
afford to risk the

Britain

signifi¬
For the
Paul Einzig

Dr.

area

.

*- ■

adoption of those policies.
The other side of the picture is,
Of "courseffhat it it the

American

taxpayer who would have to face
the risk involved. The acquisition
ances

is

achievement

tical

removed

There

as

now

as

far

ever.

are

two

ways

in which

immediate action could be taken

desired end.
The one is
the
policy usually described as
"dash
for
freedom,"
strongly

to

the

and

holding of large Sterling bal¬
have to

would

be financed

somehow, and in the event of loss
the Treasury would have to pay
That is one of the reasons why it

the failure of the premature at-;
tempt at Sterling

be

would

the

risky; than

more

even

which collapsed two years

one

in a matter
of weeks.
The result of such a
failure would be disastrous. ; Yet
matter of months but

areas

currency

could be amalga¬
of an

ment

would

LAKE

CITY,

has been ten¬

Some such solution

authorities

can

McBrien

has

Edmund

J.

McBrien

&

formed

Co.

with

offices in

the Newhouse Building

to engage

in

Mr.
J.

McBrien

Arthur

a

securities business.
formerly with

smaller
a

as

a

be

called

result of the effect of

devaluation
of

ance

would

dence in

From

the British bal¬

on

confi¬

payments and Qn

Sterling.
British

a

point of view,

all arguments are by no means in
of
the proposed
solution.

&

Co.,

J.

S.

quarters on
lantic. What it really amounts to is
that the risk involved in the "dash

should be taken not

for freedom"

Britain

by

States.

but

United

the

by

suggested ar¬

Under the

rangement an American export
surplus in relation to the Sterling
Area or in relation to non-Ster¬
ling

countries

holding

Sterling

financed auto¬

into

dollars—as

has

been

sug¬

much from the Dollar Area would

The

dollar

the
be

no

solve with one

the immediate problem of

deficit.

and

Sterling

would

the

United

Area imports from
States. It would be

possible to buy in

26th

markets,




There

need for restricting British

business from offices at 205 West
Street.

an

this

Britain

would

not

E.

surplus to non¬
dollar countries which would also
return to convertibility.
The
trouble is that they

the cheapest

irrespective of whether

all have dollar

have to;apply to them, or at: any
rate to some of them, the same
measures which would be applied

This

Sterling.
would

too

means

to

tend

that they

widen

their

dollar deficits instead of closing
and in many

be

it,

instances they would

buying American goods in¬
of British, if it is equally

stead

the former as for

a fusion of the cur¬
in the only way in
would be possible in the

Evidently,
areas

which it

not

of

future would cut both ways,

only from an American point
but also from a British

view

point

of

view.

Possibly an

at¬

tempt may be made by which the
risk of a "dash for freedom" pol¬

icy would be shared between the
United States and Britain and the
other countries involved.
Theo¬
retically,
sible

to

at any rate, it is pos¬
conceive such an inter¬

mediate^ Solution.

Williamson

Six members of the Board of Governors to

serve three years and
will be chosen from the following
nominees; Edgar A. Christian, E. H. Rollins & Sons; Joseph Cummings, Brooke & Co.; Frederick DeVoll, Jr., J. Arthur Warner & Co.!
Forrest H. Duble, Parrish & Co.; John M. Flynn, II, E. W. Clark #Co.j
one

member to

serve

one

year

A. Harris, Eastman, Dillon & Co.; Floyd E. Justice, Kidder,
Peabody & Co.; Nevin Mann, Halsey, Stuart & Co.; William Mc¬
Donald, Paul & Lynch; William Z. Suplee, Suplee, Yeatman & Co.;
Bernard H. Tobias, Gerstley, Sunstein & Co., and John F. Weller,
Hallowell, Sulzberger & Co.
Russell

y. The Nominating Committee was composed of Chairman Joseph A.
Zellar, Bankers Securities Corp.; James J. McAtee, Butcher & Sherrerd; William McDonald, Paul & Lynch; Thomas F. O'Rourke, Stroud
& Co., and Richard W. Heward, Janney & Co.

The business meeting and election, which will be followed by
dinner, will be held at Palumbo's Restaurant. It is for members only.

KANSAS CITY, MO.—Frederick
Evans

has become affiliated with

Waddell & Reed,
more Avenue.

Inc., 1012 Balti¬

deficts, and, to be consistent, the
United States Government would

to

C.

Vice-President, James B. McFarland, III, H. M. Byllesby &
Co.; for Treasurer, William J. McCullen, Hendriks & Eastwood; for
Secretary, E. Coit Williamson, Schmidt, Poole & Co.

matter

aid of her export

near

lars.

stroke

securities

by

rency

in

obvious. It would

a

met

present circumstances
would have to be paid for in dol¬
which

win, Inc., in New York City.

Hughes is engaging in

be

easy to pay for
the latter.

Boucher & Co. and Bond & Good¬

CHEYENNE, WYO.—Charles J.

be to strong, even

gested
in
some
quarters—but
simply an acquisition of Sterling
as
a
result of an export surplus

advantages of the scheme
from a British point of view are

Charles J. Hughes Opens

William J. McCullen

Second

With Waddell & Reed, Inc.
unofficial very much. For Britain could
meet her dollar deficit with the if? ^{Special to The Financial Chronicle); i *
both sides of the At¬

was

Warner

McFarland, III

acquire would be much

to

upon

in

suggested

tatively

Sterling balances. There would be
no free convertibility of Sterling

UTAH—

J.

J. B.

A. H. Fenstermacher

agreed to such a scheme, it
insist on a devaluation of

increase of American
holdings of Sterling. Indeed there
undertaking on the part of the
would be a tendency of the dollar
United States to acquire and hold
deficit to become perpetuated and
Sterling to an unlimited extent, at
even to widen.
any rate insofar as the Sterling
If this postion were peculiar to
arises through American exports.
be by means

would

mated

matically through a corresponding
increase of American holdings of

SALT

Jr.

before the United States Govern¬

because in the meantime the
It is true, it would solve the im¬
gold reserve and other resources
mediate
dollar
problem, but it
available for facing the risk have
declined
considerably.
Another would aggravate the balance of
failure might mean that the last payments position in the long run.
The
temptation of buying • too
dollar would be spent, not in a
ago,

in or adjacent to the same general
geographic area.

Edmund

Parkes,

favor

balances would be

E. J. McBnen & Co.

H.

certain that,

considered

be

may

N.

After a devaluation the
Urged on the British Government Sterling.
risk involved would be reasonable,
and other European Governments
especially since the chances are
by the school of Taisser-faire
economists on whom the lesson of that the amount which the Ameri¬

changes, all of which are located

"

M.

stroke, in¬
agree to its

though it would
mitigated by a devaluation of
Britain would lose the
the fanatics who advocate a "dash Sterling.
erning unlisted trading privileges
for freedom" are so utterly cock¬ advantages sjie is now enjoying
on merged exchanges. A proposed
through the Sterling Area ar¬
sure about the correctness of their
amended Rule X-12F-6 for this
rangements.; There would be no
judgment that they are fully pre¬
purpose has been drawn up and
inducement
for
adopting
stern
pared to risk such a disaster.
submitted for comment, and un¬
measures
to close the dollar gap
The other way in which the two
less
serious objections are met
which
would
be
automatically
Exchange Commission on
28 amended its rule gov¬

and

Fenstermacher,

indefinite

convertibility in
rations whose stocks are listed on 1947 appears to have been lost.
them. Memberships in the merged Thfey would like the government
organization r will
be J sold < for to ipiung^ into another converti¬
$2,500 apiece until th£-sixty-day bility; experiment,'' although' it

the

Albert

<

Bioren & Co.; for First
M. Freeman & Co.; for

one

arrangements has been agreed
upon in various documents since
the end of the war, and yet the

Exchange to

with

convertibility
with

translation of the wish into prac¬

Midwest

cepted

of

stead

elimination of
currency

and

satisfied

be

mediate prac¬

cance.

their

! years.

nation

of

little im¬

very

Claybaugh & Co. in

is

Vice-President,

Newton H. Parkes, Jr.,

American desire for non-discrimi¬

a r-

that ;

it

case

,s'

cur¬

b

rency

at the annual meeting to be held Sept. 16:

For President,

ensure

*

re-

upon

American point

an

view, the arrangement would
equal treatment to Ameri¬
can
exporters. ; They would not
lose ; their ' European W markets
through
lack
of
dollars.
The

■

pious de-

moval

From

The Nominating Committee of the Investment Traders Associa¬
tion of Philadelphia has submitted the following slate to be voted

of

-

of

sire for the

Co., 40

Britain.

re-

statement

:-i-

it would be the ideal solution for

may

mean

simply the

with Blair F.

INVESTMENT TRADERS ASSOCIATION OF PHILADELPHIA

it is in the Sterling area or in the
Dollar Area.
Taking a short view,

of-this „•*

possibly

&

in whieh this end is sought

way

declara¬

tion

| now associated with

however, of the

Association of New York is reminding all;

bowlers that bowling will start Thursday, Sept. 8, at 5:30 p. m. sharp,
on the second floor of the City Hall Bowling Center, 23-29 Park Row.

achieved.

The

Jacobs

13

.[■[■;

\v:;'

would cut both ways,

Edwin

(853)

Sterling and Dollar Areas?

Jacobs, formerly in the

|trading department of
&

&

Can There Be Fusion of the

Stanley Pelz

^laybaugh

COMMERCIAL

Samuel Davidson Opens
BROOKLYN, N. Y.—Samuel S.
Davidson is engaging in a securi¬
ties

business

from

Ocean Avenue.

offices

at

455

Wm. M.

Courtney Now

With Merrill
(Special

to The

Lynch Co.

Financial

Chronicle)

JACKSONVILLE, FLA. — Wil-»
liam M. Courtney has become as-»
sociated
with ' Merrillv Lynch,
Pierce, Fenner & Beane, 116 West
Forsyth Street.

Mr. Courtney

was

formerly Vice-President of Ster*

ling, Courtney & Ewing.

14

(854)

THE

COMMERCIAL

&

Mr.

Canadian Securities

"The

the

at

commencement

highly optimistic reports
rent and future

situation

tual

shows

of the

few months later

a

the national economy

balance in trade with all

whilst

con¬

U.S.-British-Canadian

nancial

and

economic

fi¬

discussions

countries, the creditor position
has shrunk, in comparison with
last year, from approximately $24

commencing Wednesday next

are

likely

the

millions

tilateralism in international trade

to

The most

millions

$5

month.

a

a

dream called for the State to

*

efforts

the

to

fate

of

vertibility of the currencies of the

about

increase

of

world.

the

restoration

British

of

inter-con¬

Canadian

and

in¬

with this country, which in the six-

sistence

this

artificial exchange levels protect¬

month

ed

country, which in the sixperiod has surpassed by
almost $25 million the total regis¬

tered

for

As

result,

a

the

12

it is

Dominion

the

strictions,
drain onf

1948.

intimated

that

will

in

the

to contract still further the

of

world

wan¬

trade.

In

>

view of the Dominion's vital stake

this

in

field* negative measures
only serve to render
Canada's
long range objectives
3f this kind

stiil

difficult of attainment.

more

future

Canada's

welfare

is

de¬

pendent on an expanding volume
•of world trade and freedom in the

discrimination

trade

would

in

to

international

not

only serve to
indefinitely the attain¬
objectives, but it

postpone
of

would

also divide

and

we

are

gold and dollars in the amount of
$6.7 billion in excess of its own
current-

heavy

the

Sterling bloc

tribute

part

of

kept going and

are

would rather

we

are

resources

infinitely worse; It
is, therefore; of vital importance to

many
for de¬

cial

the

Dominion

reached

at

that

thirds

nomic realism

on

eco¬

cal

expediency.
pound in relation

politi¬
Whether
the

dollar is valued at $3

U.

We could wish that

S.

of the older and

some

during the next economic decade
international commerce; will

The

the

week

reduced

section

of the

tinued

firm

bond

but

market

con¬

After

[ On Aug. 26 the Treasury Department
released

areas,

2%s displayed

ence

dency. There

reactionary ten¬

was

little interest in

ly reorient its economic policies,

firm around

the approaching end of the tourist

were

well

prepared to shoulder what¬ season,; the October and November
ever risks or sacrifices-might
be internal bond! redemptions; ^and
involved in the adoption of bold possible"
currency devaluations,, it
measures for the removal
of re- will not be surprising to see an
now

on

the movement of trade

the

free exchange of cur¬
Many countries have, al¬
ready made tentative steps in this
direction, with encouraging results.
and

rencies.

Those

that

strictive

have resorted

practices

to

re¬

have

signally
failed to improve the condition of

early reversal

of the

trend

that

has persisted during the Summer

months., •: Stocks, after their al¬
most
uninterrupted
nine-week
advance; were inclined to sag. A
fe\y. gold issues, howeyer, 7 ran
counter

to the

general trend, no¬
tably Upper Canada Mines, which
on

a

record

turnover

touched

ail-time high of $3.65,>

CANADIAN BONDS
I:,-

an

)

which will furnish

Robert

irtWdshi

-

;

63

The

text

of

(1) During
visit to

PROVINCIAL

MUNICIPAL

coll

CORPORATION?

has

been

in

the

investment

advisory field since 1933, and has
been associated with
the'Lord,
Abbett organization for the past
nine years. '.V-77' '.
^-7
Lord

CANADIAN STOCKS

Si

Abbett &

Co.

are

invest¬

ment managers of Affiliated

Fund,
Inc., American Business Shares,
Inc., and Union Trusteed Funds,
Inc., having combined assets of
$140,000,000.
,

the

INCORPORATED

eral

i
■

TWO

WALL STREET

NEW YORK 5,

WORTH 4-2400

N. Y.

NY




1-1045

(Special

to The

Financial

Secretary

Wilson,
ister

of

the

and

Mr.

?

the

on

of

dollar

the

re¬

the

sterling area, and
representatives ; out¬
lined the steps which they felt it
that

to

take

immediate

to

deal

situation.

with

It

was

agreed at that time that further
consideration should be given to
the balance of payments
problem,
and that possible remedies would

be explored.

The discussions

now

scheduled for Sept. 7. are designed
to examine these matters, in the

light of the information developed
by technical and fact-finding dis¬
cussions among, the experts of the
three countries..
<
;•
;
„;
;

Recent

?

Loss

of

Paul.

of

St.

,:

Sir Stafford

was

Lease

Crippi

be

financed through Lendthe remainder had to

and

financed

other

by

nations

investments

borrowing from
by liquidating
and
utilizing
re¬

Some

serves.

or

$4.5

billion

was met
through the
accumulation of $terling by other

countries
and

and

dollar

Canada.

substantial.
abroad.the

by

the

RFC

and

British

loan

gifts from
still, hold

long-term i

British

Unied

.

loans

The

a s s e

t

s

investments

in

valued

at

States

are

about $2 billion and

the value

investments in other

areas

J

*

,

is

of

sev¬

\

able

success

has

in many

been

somewhat

more

During the

deal

has

with

proved

difficult than

war

years

its

Britain's

136%

of

Kingdom
of

1938.

has

1938.

of its

eco¬

Industrial produc¬
raised to the level

82%

to

the

for

ending

year

has recently submitted to

The

physical

of the

been
These

estimate

revised

of;

OEEC a
mil¬

$1,518

lion*: for

that year.
This latter,
estimate, however, does not take
into account the cuts in the import

in: July;

program announced

United

reduced

figures

to
are

only two indications of the serious
efforts being made by the United
Kingdom to make
up
for
ground* lost during the war.

Cut* in Import Programs '

.

The- basic

(6)

loss of

reserves

dollar
area

the

their

the

of

sterling

from dollar earnings and

the

funds

States

United

excess

of- the

the amount available to

over

area

from

the

the

for

reason

was

imports

provided

and

Canada

by the
under

respective programs of for¬
assistance, - To j. meet
this

eign

situation

the

British

Government

therefore decided to. cut back the
dollar

Since the war, the British Gov¬
has achieved consider¬

volume of imports

which

Government
requirements

worth

of the. deficit

British

Government

1949 as a
million in

30, 1950 at $940 million in
its initial submission to OEEC, but

foreign investments was sold
during this period while the rest

of

situation

its dollar

ECA

from

of

Secretary Sny¬
was much
impressed with the
earnest effort being made
by the

earlier estimates.

Bank

total

While

a

30,

$271

June

tion

American

National

i John W. Snyder/

foreign exchange deficit totalled
nearly $40 billion.
Half of the

Empire and the rest of the world.

.MILWAUKEE, WIS. —Guy E.
Dailey has become associated with
Paine, Webber, Jackson & Curtis,
605 North
Broadway.
Mr. Dailey
was
formerly an officer of the

June
cost

The British

estimated

nomic efforts.

London

has

period.

this situation both for the British

der

trend

reserves, despite an allocation of
$1,239 million from ECA for that

eral times that figure.

Reserves

downward

must be corrected. The

ending

whole

ernment

in

in

the

that

reserves

year

Min¬

British

necessary

doubled,

million

factors,
the
British
has apparently con¬

in

Harold

Canadian

•

(5) It is this sharp drop in the
quarter of 1949 which has
concern.
Looking at the
picture before making any allow¬
ances for foreign
assistance, • the
dollar deficit of the sterling area

Government

Sir

Finance,
Mr. > Douglas
Abbott, concerning the balance of
between

7

caused

temporary

Sec¬

of

payments

'Uv 7';

-

cluded

Snyder's

Exchequer

Trade,

*

'A/' jV. 7i 4

amounting
to
April-June, as
against $330 million in the first
quarter of the year.
While the

Cripps,? the President of

Board

»;

second

$633

exchange of views with the

Stafford
the

7.,

•'

almost

The U. S. Government fully
recognizes the serious import of

Chronicle)

a

million, of

figures of the second quarter may
have < been
influenced
by some

London in July, the

Chancellor of the

.

Guy E. Dailey Joins
Paine, Webber Staff

discussions

memorandum

(2)

4. E. AMES & CO.

tripartite

retary, Ambassador Douglas, and
Ambassador Harriman had a gen¬

the

of

to

was

7:.v7^v7;47'4V:7< Deficit

London Discussions

serves

Wall

date

there

year

30, the official reserves
fallen therefore to 1,636 mil¬

lion dollars.
v-"»;»

follows:

celeration In the drain

Driscoll,Research
Lord, Abbett; & Co;,
Street, New York* City,
since 1942, has been admitted to
partnership in the firm. Mr. Dris¬
Director

on

on

Current and Prospective Dollar

the dollar and the sterling
background for the forthcoming confer¬
rep-^
—

a

■**

GOVERNMENT

that

From

June

had

and

and the Department of State

joint memorandum concerning the

a

and< sterling areas.
The conversa¬
tions
reviewed
the..recent ac¬

Robert S,

Monetary Parley

of the
British
and
American governments for a solu¬
tion of the problem.
-

of

Lord, Abbett Admits

1948.

which $262 million occurred dur¬

resentatives

4Va%, but invieW of

the bulk of the democratic world

internals; but prices

million

$2,466

1

further decline of $427

regarding balance of payments between

earlier strength the new Dominion
a

from1

I, 1946 to7 $2,063'. million

June 30 of this

Washington conferences.

v

external

inactive.

7

*

Jan.

forthcoming

,

the

Trend of Reserves

The

Jart,

of

International

on

•

During

two-

gold 7 and
dollar re¬
serves; of
the sterling area, i in
spite
of
this / assistance, ; were

more

State and Treasury Departments outline London discussions
British dollar deficit situation and
explain purpose of

con¬

]

than

more

,

was

ing the second quarter of 1949. As

Memorandum

tinue to be strangled by the con¬
tinuance of artificial controls and
restrictions.

to

of

amount

the

of

(4)

"advanced" countries seemed always as sensible.

$4, or the
or 90 cents,

or

the

available approximately.; a. billion,
'
f ; ; ? ' V
'
' <

.

,

the

to?

in

dollars.

year, or the; next ietv years.
however, that this statement by the
Prime Minister seems to- us* to have; important ele¬
ments of hard practical sense.
'r

rather than

con¬

overall, shortage of
dollars. In addition, Canada made

there

occur

not

than $4.4 billion. 7 This

equivalent,

We must say,

interna-

tionl discussions be based

likely to

assistance

more

during the next

decisions

the

forthcoming

to what is-

as

did

the United States extended finan¬

new

make any guess

income

as

supply, particularly in Eastern
Europe and Southeast Asia, were
not available.
During this period,

employing

our

use

a

of

As long as these in¬

profess to know precisely what is going
in India, and we should plainly be
foolhardy to

on

would1 become

Free funds remained

iraints

This

from

heavily to earnings as
before
the - war,
import prices
were higher, and normal sources

We do not

definitely a
the; dollar trading area,
nor

maintained.

is

earnings.
resulted

perienced before. Investment and

shipping

Minister Nehru of India.

rassing economic position of Can¬

the

from

dollar

deficit

number of factors in the
post-war
situation which had not been ex¬

ada which is neither a member of

Britain, which at
the present juncture cannot light¬
Apart

,

(3) During
the
three
years/
1946-48, the sterling area paid out

projects and employing more people.
If these industries are well
managed privately, we
see no need for nationalization at
any time."—Prime

already embar¬

the great issue at stake is whether

similar
nature, j Bilateral
trade
arrangements; outright barter, and
'uneconomic buying in soft cur¬
rency areas are the natural con¬
comitants of departure from the
principles of freedom of trade
and foreign exchange.

March 31, 1949 to $1,636 million

•

Canadian dollar at par
is relatively of litlle importance;

foreign trade, it is
difficult to avoid the adoption of
ether
negative i measures
of
a

ster¬

sary to draw further on these re¬
f•
V.:r:"r "■ 7'';747'7
':'4 —7777-777-v •'V'."; .7
7'. 1
Dollar Position in 1946-48

putting off consideration

compensate present owners*

veloping

camps.

it will be found that having taken
the first step in the direction of
of

the

fell from $1,898 million

serves.

.

reason for not nationalizing is that
limited resources, we haven't the means

our

dustries

the democratic

;
In this event the

them

people,

these

exchange of goods and currencies.
In following the British example,

restriction

of

reserves

re¬

July 30, 1949.
It had been
hoped that it would not be neces¬

"Frankly, the
with

by rigid exchange controls and

world; into two opposing economic

halt

to

reserves.

volume

of

ment

Thus Canada is closely follow¬
ing the course set by the United
Kingdom, which directly operates

ing

maintenance

shortly intro¬
drastic import re¬

the steadily diminishing

exchange

the

on

order

further

duce

months of

British

on

on

for at least ten years.

trade

area

on

key industries, despite the previous plan
for State ownership — for which
many Congress
(party) leaders still clamor—we've done nothing

and

in

larger than anticipated.

central

ling

"As to

mul¬

promote

disquieting aspect of the
however, is the sharp
deficit

been

drain

"

decide

to

current

situation,

the

gold and dollars in 1949

The

own

achieving independence, the policy has
been that the defense industries, since they are the
concerns of the State, are
completely State-owned.
Such utilities as the various river valley
projects
for irrigation, reclamation and
hydroelectricity are
paid for by the State and owned by the State.

international trade.
The

still

of

has

original policy laid down When indepen¬

was

the

serves

"Since

tributing td the declining trend of

alarming deteiioration.
Although there was still a fa¬

vorable

possible to issue

was

prospects, the ac¬

an

forts

industries, all public utilities and certain
key industries. As regards other industry, private
ownership would prevail, subject to certain neces¬
sary controls.
/<■'..*;

cur-^

on

Notwithstanding these fine ef¬

Take Note!

,

it

year

Thursday, * September71, 1949

all defense

Analysis of the recently announced Canadian foreign trade statis¬
tics for the first six months of the year leads to the conclusion that
the Canadian position is strikingly similar to that of the British.
Whereas

CHRONICLE

Attlee,

dence

By WILLIAM J. McKAY i

FINANCIAL

import

United

Kingdom

million,

as

level

1948

dollar
of

of the
by about $400
compared with the
of imports from the
This represents a cut

area.

about

program

25%

-

in

the

value

of

dollar imports, but corresponds to
less

than

6%

Kingdom
sources.
cause
some

1949

of

It

of the

United

from

is understood that

lower

foods and
as

total

imports
dollar
raw

all
be¬

prices

materials

compared with

for
in

1948, the

physical volume of dollar imports

Volume

will not fall
As

by

much

as

25%.

as

result of the Empire Confer¬
held in London last

a

ence

July,

most

of

tries

have

the

sterling area coun¬
given general under¬

takings to
ductions

similar

out

carry

of

about

25 %

in

re¬

their

dollar

import programs.
This is
designed to save about $250-$300

about

be

area.

adjustments in the price structure,
besides saddling taxpayers with a

increased to offset the declin¬

are

ing scale of United States assist¬
have

to

adjustments may
made in subsequent

be

troducing

views

with

respect

may

be

to

farm

and

pose,

discussion

also

The signifcance of this adj ustment should not be exagger¬

lated

ated.

As

Canada to facilitate

stated

before the House of

(7)

Sir

Stafford

last July:
"Although this fall

Cripps
Com¬

is,

mons

is

serves

serious

a

in

our

re¬

development,

of

of

dollar

course,

earnings.

of

the problem involves difficult and

Program it

variety of economic factors. Poli¬

1939

the

cies

spent

more

of

July

with

and

was- anticipated that
difficulties would be encountered
from time to time in making the

necesssary adjustment to the de¬

clining level of U. S. assistance.
Unless dollar earnings were to in¬
crease

that

of

ation of economic progress in the
United
Kingdom, although the

lor

of

the

naturally be

The

Chancel¬

Exchequer has

of consumption and investment in

lines of activity.

Importance of Increased Dollar
Earnings

(8)

The

decline

-

of

British

re¬

and the

imposition of these
import restrictions does, however,
serves

call attention to the

importance of

increase in the dollar earnings

an

of

the sterling area.
It is clear
that
the .amount
of
assistance
available

under

wide

a

accomplish

have

may

(9) It
of

the

Recovery
Program for all participants will

is

this

purpose

to

level,

views

United

problem to

existing framework of U. S.
foreign economic policy as ex¬
pressed in such measures as the
Reciprocal Trade Program, the
International Trade

Organization,
the European Recovery Program
and the institutions established at
Bretton Woods.

is

United

definitely

States

hopeful

Government

that

bene¬

ficial conclusions may be reached.
It

of

cannot,

any

course,

forecast

the results of the

way

ference.

in

con¬

■

Guaranty Survey" criticizes President's plan to abandon at-;
and resort again to
deficit spending.

be

million

About $7 million of this was expended in the first ha I
/////:
' . 7':/. :/„
•
v ,/
■ ••••//■/ •
;
At the end of 1949 the company expects to supply about one

1949.?

of

/

,

quarter of its peak electric load for that month.
Two years later
when units 2 and 3 are both in service at Michigan City, the com¬

pany's

generating facilities should be capable of handling twoDecember load and probably a larger proportion ir
The cost" of installing these units (each of whicl
an installed capacity of
70,000 KW) is estimated at $17,-

own

thirds

of

the

months.

other

will have

Unit 2 will be in service in 1950 and number 3 in 1951.
reducing the amount of purchased energy.
According to Geyer & Company (who have prepared a study or
330,000.

at

the company)
be

provided

the $39 million required to complete the program

substitute for

no

readjustment.

sound

Price

"Their

rather

be

to

result

might

increase

tuations &re ampng the most

severity and duration
adjustment. In either

inflationary

a

sound

would

basis

more

re¬

purchasing

it

can

an

they
exactly

opposite influence."
^
,
Continuing
its
analysis,
the
"Survey" article states:
"The readjustment now going
appears

could
than

readjustment.

The Wholesale
price level began "to decline in
September of last year, and it was
that

industrial

ness

months

production,

sale

Current

expenditures

and

turned

to

a

-

well
an

be

a

wage

decline

in

rather

total

wage

\v f

✓

7
-

consumers'

rectly at variance with the pres¬
ent needs of the economy as is

downward,

excess

common

securities

'

Millions
$11.5

stock

(principally senior)

'

company

about 40%

serves

a

"

"

■

/',

4.6
12.2

,—

-

■

The

10.5

earnings

-7'"

'•/;///.-/

k

•

im¬

cost of

largely

•

38.8

"

„

/

industrialized steel section, and

highly

of revenues are derived from

example.

action,'

deliveries

industrial customers, com¬

as

be

are

to

the

should be

against the economic cur¬
rent and should abandon its at-,

purchased

continued

even

power, which-purchases we are
after the new units now under

We understand furthermore that it
industry decline due to cutbacks in steel

in operation.

steel

the

production, such power purchases may be reduced thus preserv¬
ing the earning power of the company despite recession in the
principal industry served."
> ■ . <
. - .
1 . >

/

'Affirmative

will

construction

employment,

by

provided

informed

greater instability at more

vital points, such as

issued rights to subscribe to
stock at $15,375 a share to holders ol
record August 11th.
The warrants expire August 29th. • The com¬
pany's capital structure, after giving effect to the current stock
offering, is 54% debt, 23% preferred stock and 23% common stock
equity.
Based throughout the period on the number of shares to
be outstanding after the present offering, share earnings have been
as follows;
'
'
■ *' 1
7
■'
'
'
12 months ended June 30, 1949
"$2.03
Calendar year 1948 ——
1.91 * V;'
"
On

15th

August

the

company

311,354 shares of additional

,

:

0'

•<_?(■)(■:*

1947

t"i

1946

//////./,>■
"

1945

—•—-1.79
1.66 7

—

i.

*

—

—

———

1944

.

,

—

1.07 •;
1.11

77
v

•

•

stead of

to

force

•.

further

increases in the face of

wage
declining

prices and employment. Agricul¬
ture should take a similar atti¬
tude with respect to prices of
farm

products.;. And

government

should cease trying to 'freeze' sec¬
tions of
the

the price structure, face
of budgetary economy

issue

more

squarely

special /viewto

it has yet
its budgetary
relief,- with a

than

done, / and match
savings with tax

su£h bUrdehspmb

depressing levies as the war¬
the double taxation
of corporate earnings and the al¬
most confiscatory rates on large
incomes.
If these
things Were

Regarding future earnings Geyer & Company, Inc., 63 Wall St.,
New York 5, say: "According to our own calculations, and on the
basis of .1948 generating costs versus the cost of power purchased,
savings of ^proximately $2,200,000 per annum (before taxes)
be realized when the new plants are in full, operation, which

should
wopld

equivalent to about 55 cents per share of additional earnings on
the increased amount of common stock, to be outstanding, after al¬
lowance for Federal income taxes, depreciation and cost of new

be

Since the new units will be more

money.

efficient than present

greater. Earnings may benefit ad¬
fact that the Company expects to
appreciably more natural gas next year and at that time
be able to handle numerous requests for provision of house

plant, the savings may be even
ditionally,. we. think, from the
receive
should

'*•: ::"</•

heating service."

and

The stock is currently

around 16 ^ at which price

/-;•

.

it yields about

sells at only eight time*
for all electrie
utility stocks (as of July 27th) of 7.1% and 10.4.
The company's 4%% convertible preference stock (par $20, divi¬
done, the orderly completion of dend 90c) sells around 18 and is convertible into common stock share
the current readjustment could be for share until December 1, 1957/ The stock yields about 5% and
time excises,:

based on the $1.20 dividend, and
earnings.
These/figures compare with
71/4%

averages

.

reflecting the curtailment of buy¬ the effort to raise wage rates. f
anticipated
with greater
con¬
ing in the expectation of lower
"The present law provides for
prices.
■ '. /• /•- '
'
the adoption next year of a slid¬ fidence."
"The main requirement at the
ing scale of price supports de¬
moment is to allow needed price
pending upon supply-demand re¬
With E. F. Hutton & Co.
readjustments to take place with
lationships. It is a serious question
(Special to Thi Financial Chronicle)
a minimum of disturbance to the
whether this scale allows enough
general levels of production and
flexibility
to
maintain
balance ; r LOS. ANGELES, CALIF.—Vir¬
employment. A 'fourth round' of over a
long period, but it is vastly ginia L. Greene has joined the
wage increases at present would
623
superior to the rigid supports now staff of E. F. Hutton & Co.
run directly counter to this need.
To continue the exist¬ South Spring Street.
Its effect might well be to con¬ in effect.
,

•




of

wil

'

I
--

-——

and
of

sale

Future

organized pressure; but this arti¬
ficial stability is achieved at the

temps

"The ; proposal
to hold
price
supports for farm products at the
high levels of wartime is as di¬

busi¬

inventories

general

similar

The Position of Fartti

later

several

until

somewhat

increase
payments., / / ;

to be primarily a price

not

of

workers.

increase,
although the effect would be less
widespread. With a rise in the
minimum
wage,
many
workers
now
employable would- become
unemployable.
The/ net result

the

on

effect

that

of

legal minimum

at present would have

wage rates

for recovery,

have

power

"An increase in

pressures

likely

diminish

to

of the
case,

for the
Instead of helping to lay

future.

be

rather than increase the aggregate

hardly be doubted that their more
lasting effect would be to build
up

would

creases

'

*

portant and least dangerous means pared with 32% residential and rural and 16% commercial (the
Geyer & Company statc:
by which it tends to restore itself. balance being wholesale and municipal).
Such fluctuations may be pre¬ "While Northern Indiana obviously derives a substantial percentage
vented or restrained, for a time of gross revenues from its industrial load, especially deliveries to
at least, by legal regulations or the steel
industry, it is. our understanding that such service is

President say.s, can and

the

.,.,7

'

hand

on

Depreciation

sta¬

is of course highly desir¬
able, provided it is a natural sta¬
bility that reflects real economic
equilibrium. But when that equi¬
librium is disturbed, price fluc¬

bility

a

article.

well

'

follows:

as

,

Cash

'Reflation' is

an

general).

Be Done?

What Can
"

Edison)

Commonwealth

of

is now engaged in an extensive construction
for 1949-1951, which will cost about $46 million ($3
electric, $7 million gas, $2 million water and $4 million
The company

program

•

the

(subsidiary

Corporation

others.

-

"

*

been

erating

such

taken by business, labor, agri¬
leading article, captioned "Reflation Versus Readjustment," culture and government, 'working
the current issue of "The Guaranty Survey," published
by the together in mutual respect and
Guaranty Trust Company of New York takes issue with the Admin¬ with common objectives.'
Such
istration's policy to seek to halt the present economic readjustment
action, however, should be aimed
by "injections of the inflationary^
at
readjustment, not 'reflation.'
virus" through deliberate deficit vert a mild
recession, which is Business should strive for greater
financing and continued support already showing some signs of efficiency and economy of opera¬
of wartime high levels of prices leveling
out, into a severe and tion and for greater volume of
and wages.
J
•
;
prolonged contraction, with dis¬ output, at the cost of price con¬
"To what extent any of these astrous
effects
on
employment cessions
where such
action is
devices might actually be effec¬ and income.
It is not only pos¬
necessary
and
feasible.
Labor
tive in checking the current trade sible but probable that the effect
should
reconcile
itself .to
the
recession is very doubtful," says of a 'fourth round' of wage in¬
necessity of swimming with in¬
In

also buys much of its electricity. In recent years i
generating only about 450,000 KW and has been purchas¬
ing nearly three times as much from Chicago District Electric Gen-'
The company

has

the

exists

as

Line, Panhandle Eastern Pipe Line, and othe<
of its total gas requirements are pro

companies. Less than 3%
duced by the company.

results

under

gas

District Pipe

cago

raise the na¬
unprecedented

adopted

2% from water service.

service includes both manufactured and natural gar:
Gas of 1,000 BTU is supplied to a number of large communities
and others receive 570 BTU gas. Natural gas is purchased from Chi

un¬

these

of Lake

Hammond

sale of gas and

the

The

come,

for

tempts to keep Federal budget in balance

spending
on
did eliminate

water to a section in northern Indiana along the
Michigan, with a population of about 800,-

and

gas

Gary,

from

per¬

slight provocation
present.

within

the

The

largest

served with

with ultimate economic
consequences that defy prediction.
It would be especially unfortunate
if a program of deficit spending

the

expects

considered

million

and

but

should

States

be

•

000.

plague the nation for years

will
to

solution.

easy

The

the

measured by annual revenues, in the over-counter mar¬
With revenues of about $45 million, the company serves elec¬
as

southern shore

were
achieved
at the cost of a tax
burden and a debt problem that

in the

and

scale

estimated

was

tional income to an

dollar

.

States

employment

concerning the
earnings problem,
light of the need for adjust¬
ment to a declining level of U. S.
assistance.
It is recognized that
this problem involves grave diffi¬
culties not susceptible of quick
exchange

British

unemployment in

period

Deficit

of

and at the end

money,

United

the

billion

$24

than

at between 10 and 11

Says Deficit Spending Will Magnify Recession
"The

that

of

wartime

the forthcoming conference

from 1931 through
Federal
Government

borrowed

to

primary

the

a

the fiscal years

Purpose of the Conference

indi¬

cated his hope that it will be pos¬
sible to maintain existing levels
many

to

area

be de¬
veloped and pursued along many
fronts, and their effects may be
felt only gradually in many cases.

would

area

physical volume of imports Into
the sterling area from the dollar
area will be adequate at the re¬
duced level to permit the continu¬

somewhat slower.

designed

objective

im¬

be. necessary. It is hoped that the

rate of progress will

sterling

painstaking examination of

was un¬

contraction

ports from the dollar

the

in

sons.

proportionately, it

derstood

authorities

as

indicates that
it is ineffective unless practiced
on
such an immense scale as to
invite eventual disaster.
During

British Government and the other

events

spending

deficit

stimulant

business

the

comparison

any

The his¬

forms.

dangerous

tory

by which this can be ac¬
complished.
On the part of the

process

August, 1947
would be entirely misleading."
Under the European Recovery

yet

*

and East Chicago are the principal citieselectricity, while Fort Wayne, Gary and South Bend arc
served with gas.
In the 12 months ended June 30th the company
derived about 60% of revenues from the sale of electricity, 38%

to

attempts

most

ready

or

easy

no

>

be

tricity,

all

programs

expansion
There

an

to

* appears

of heavy governmental
expenditure to
maintain
'pur¬
chasing power' is inflation or 're¬
flation' in one of its baldest and

re¬

concerning
the
the United States and

British

of

of

ket.

Public4 Service

Indiana

balance the
Federal budget and to rely upon

questions

ability

Northern

President's plan to aban¬

"The
don

British Government for this pur¬

Significance of Import Adjustment

Northern Indiana Public Service

products.
utility,

the

by

By OWEN ELY

The Deficit Spending Program

measures

proposed

Utility Securities

markets for

outlook for

the

into

import programs. It is expected
that in the forthcoming confer¬
ence there will be an exchange of

Public
y*r.

burden and in¬
grave
uncertainties

financial

heavy

further

ance,

15

ing supports would be to impose
a
major obstacle to needed re¬

year's

Unless dollar earnings

which

million per annum to the
sterling

last

below

30%

program.

(855)

COMMERCIAL & FINANCIAL CHRONICLE

THE

Number 4834

170

current

overall coverage of fixed

charges and preferred dividends

is about 2.52.

call

on

/

The stock would appear to have an interesting
the common stock for a period of over eight years. ;y:- ■'' "

C. F. Cavendish Opens

With First California Co.

_

-

(Special

LOS

to The Financial

Chronicle)

.*

ANGELES, CALIF.—J. J.

May has been added to the staff
of First California Co., 647 South

Spring Street.

(Special to The

Financial

Chronicle)

LOS ANGELES, CALIF.—(X F.
Cavendish is engaging in a securi¬
ties business from offices at 16&
;

West 22nd Street.

16

COMMERCIAL

THE

(856)

initial surplus

will

bank

FINANCIAL CHRONICLE

&

of the consolidated
$2,250,000.
The of¬

be

the

maintained

is

consolidated

as

branch of the

a

institution.

REVISED

The

Bankers

and

OFFICERS, ETC.

At

the

special meetings of the
of

the

New

York, held

stockholders

approved
Fulton

into

the

the

both

Co.

New

of

York

to

Co.

Trust

also

York

in

the

merger

the

two

branch

a

dated

that

the

will be made effective

David

Friday,
2, 1949, after the close of
business, at which time the New

Luke's

St.

Cuba

ships of the Fulton Trust Co. The

tion by

office

his

head

office

Broadway,
of

now the
Fulton Trust

the

Madison

ton

will

Co.

continue

born

to

he

1002

at

Co.

maintains

now

at

flown

was

medical

observa¬

week before

a

with

career

associated

was

the Bank of

Ltd. in

1917.
with

Later
several

banks in New York, among them
Seaboard National,
Central

Avenue, where the Ful¬

Trust

of the Chase Na¬

Loring, who was
in San Francisco, began his

business

branch office

Havana

Mr.

West Africa

a

Second

the

plane about

death.

York

Trust

of

for

Co., will be discontinued. The New
maintain

Loring,

Bank

Hanover

branch office.

Stephen C. Clark, Charles S.
McVeigh, Charles J. Nourse and

joining

Walter

Trust

auditing

work

and

under

supervision of Rowland A.
Radford, Vice-President in charge
of operations.
Paul M. Anderson

Arthur J.
Fulton

York

Trust

Co.

elected

and

Co.,

Vice-President

will

become

for Richmond and

of

now

Vice-President and Mort¬

Burke

of

New

Co. in charge of its real estate and

mortgage

department.
He
has
been associated with the mortgage

in the August 4

to

announces

the

ap¬

President

Alfred

of

Hauser,

Vice-Presidents.

Trust

Hauser

the

and

President

the

trust

Earl

directors

and

Bank

Trust

Officers.

In

Trust

ceived

Assistant

Trust

New York
of

ment

and

*

duction

H.

Blake

Secretary

of

two

ican
He

as

Trust

Navy,

serving

with

overseas

and

receiving

Lieutenant

The

the

Guaranty

at

has

with

been

years

and

is

its

it

the

Co.

as an

main
the

Bank

of

at

13

the

Hartford

*

with

%

>.,

William

Trust

recent

Passaic
Co.

of

Passaic, N.

As noted in

our

issue

Aug. 25

(page

the

con¬

title

of

tional

was

the

Bank

756),

effected under the

Passaic-Clifton

in

Terre

Haute, Ind., an¬
the death on July 31 of

nounces

Robert F. Nitsche, Vice-President, j

&

Trust

Co.

In

its

Currency states that

the capital of

the

consolidated bank will con¬
sist of $2,250,000 of common
stock,
divided into 180,000 shares of the
par,

value

of

$12.50

each.

The

&

Trust

Anniversary

National

Bank

the

Union

posits
and

capital
$14,000,000.

a

state

institution

$671,300.

than

more

*

y/'y

of

San
the

Francisco,
creation

has

of

an¬

a

new

post in the senior management of
institution.
President, L. M.

Aug. 23,
1 of that
subscribed capital

the

Giannini named E. A. Mattison to
the post of Executive Vice-Presi¬

Alexander,

President,

*

nounced

on

Vance J.

present

out

tion

Sept.

on

year, and had a
the

of

as

was

of

assets

its services the Bank of America,
National Trust Savings Associa¬

on

1869, .opened
of

Co.

observed

The bank, organized

Aug. 23.

The

To further enlarge the
scope of

the

Planters

Trust

&

Memphis, Tenn.,

of

Co.

June 30 last, showed de¬
of more than $221,000,000

dent, in charge of development of
bank services, and also announced

pointed

Aug. 20, according to the
Memphis
"Commercial
Appeal"

the formation

that the

tising and Customer Service Com-

on

bank to

bank

was

the first

state

join the Federal Reserve

of the

(Continued

on

Adver¬

new

35)

page

'Bank

and

Insura
Stocks

By E E. JOHNSON

This Week—Bank Stocks
The

market

action

of

bank

stocks

far

so

this

has been

year

At the present time most bank shares,
of the

current

are selling near the highs
period and considerably above the prices shown at

the end of last year.

This is in spite of an appreciable decline in business. In terms
Federal Reserve Board Index of Industrial Production the
decline has been from 1J92 in December to 162 for
July. Of con¬
of the

N.

Peyton, President of the

Federal Reserve Bank of Minne¬

Jan. 22 that
the bank had

apolis, announced
the directors of

on

M..

Walter

elected

Ringer
of
Minneapolis as a member of the
Industrial
Advisory Committee.
Mr. Ringer is President of the
Foley Manufacturing Company of
Minneapolis and Chairman of the
Board
of the
Ringer-St. Croix

Company of Stillwater, Minn, and
St. Croix Falls, Wis. During the

siderable importance to banks has been the decline in loans which
has accompanied this business readjustment. There has been a
gen¬
eral

liquidation of inventories

have

moved

in

sympathy

on

the part of business and

with this
'

tracting.

trend,

loans

have

prices

as

been

con¬

This is especially significant to banks as it has meant the loss
of

earning

than

which

assets

available

were

returned

yields at more favorable rates
securities, the principal outlet

government

on

for the

reinvestment of funds.
Another important factor in this same connection has been the

change in policy

the part of the monetary authorities. As

on

soon

as evidence of a decline in business became
prominent, the Federal
Reserve Board began to ease the controls tjiey had
imposed to con¬
trol inflation. Consumer credit, margin

Mr. Ringer served as Act¬
ing Regional* Director of the War
requirements, and reserve
Production 4BoarcL
He *is '.Vice-- requirements were all used in succession to promote an easy money
Chairman of the Small Business
policy and encourage business.
"
: '
The lowering of required reserves provided additional funds
Advisory Committee of the De¬
partment of Commerce and Chair¬ to be used by the banks and this put pressure on the interest rate
war,

,

of its tax sub-committee.

man

posts
Association
of

National

the

He

committee

important

Manufacturers, the Reconstruction
Finance
Corporation,
and
the
Minnesota Postwar Council,

structure. While there has, as yet, been no evidence of an easing in
the

prime

commercial

rate, some of the other rates have been
the yields on short-term government securities have
adjusted themselves in the market to the new certificate rate of
reduced

and

1%% announced for the coming refunding. Previously the certificate
rate had been 1%%.
"
'

It will take

The

sale

the

of

Bank

Tradesmens

the

to

First

Na¬

Oklahoma

City,

Okla.

was

time for the full effect of the decline in loans

some

and interest rates to be reflected in

the

earning statements. In the

meantime the market for bank shares has been

strength

as

showing considerable
reflected in the accompanying tabulation:

re¬

of

Price

1949

ported in the "Daily Oklahoman"

Price Range

Current

Dec. 31. 1948

Price

25%

21%

25%

23%

41

36%

38%

40

4*

140

97%

98

122

4-

24

92%

4-

9

34%

4-

Change

Aug. 4. In presenting details of
the transaction, in the paper in¬
dicated, Chairman Guffey stated
that the merger makes First Na¬

Bank

Central Hanover

92%

82%

83%

tional the state's first

Chase

National

35%

32%

33%

Chemical Bank

42%

37%

40%

4iy8

4-

%

49%

38

38%

47%

4-

53%

+

8%
1',"/

bank

and

Oklahoma

$200,000,000

the

reduces

number of

of Manhattan

Bankers Trust

Brooklyn Trust

eight.

Commercial National

listed

Corn

Exchange

at

$27,923,729.47 on July 30.
It
the third largest bank in the
city. First .National resources on

First

National

was

Guaranty Trust
Irving Trust
Manufacturers Trust

City

Tradesmen's

resources

date

same

The merger,

banks

stated, was to
of Aug. 6. In¬

was

become effective

were

$195,638,134.

were

it

to

as

__

53%

49%

52%

1300

1145

1145

1270

280

252

255

275

16%
54 %

Morgan, J. P
National City

14%
46%
199

228

41%

15%

48%
200

38

37%

:1%

—

1%

%

•

16%

4-125
4~ 20
41%

50%

+

224

+

40%

2 Ys
24

cident to the consummation of the

4"

2%

New York Trust

86%

80

81

84%

transaction

-f

Public

40

37

33

39%

4-

645

540

542

3%
1%
88

First

the

National

officials sold the 10-story Trades¬
men's building to the City Na¬
of

tional

Bank

which

planned

Tradesmen's
Walker

was

Oklahoma

locate

to

building.
President

Oklahoman"

Tradesmens
1909

the

the

E.

A.

of the
was

lat¬

Chair¬

of the Board of the First Na¬

tional Bank

in

City

in

and

& Trust.

bank
was

Tradesmens

was

The

stated

From the

the

organized

was

then

known

as

bank.

It

State

nationalized

not

"Daily

that

until

1920.

"Daily Oklahoman"

"First

S.

Trust

630

4-

The explanation
for this performance against the foregoing
background and the possibility of further easing in credit and a
cut in the rediscount rate, may be attributed to several factors.

First, although the action of the monetary authorities has re¬
a lower level of short-term interest
rates, there have been
compensating factors. Reserve requirements have been lowered on
sulted in

two

occasions and there is

duced

again for central

a

good possibility that they will be re¬
cities. This has increased the earn¬

reserve

ings assets of the banks and permitted a substantial increase in the
holdings of government securities. Also, the decline in yields may
permit the banks to show profits on security transactions. These
considerations will help to offset any loss of earnings resulting from
the other factors. For the year, 4here should be little
change in
earnings.

j

Second, the general stock market for high grade equities has
improvement in the last two months and bank shares have

shown

National

corporate

U.

National

we

also quote:

Na¬

weekly Bulletin dated Aug. 29, the
Office of the Comptroller of the
,

re¬

consoli¬
National

Aug. 17.

solidation

in

.?

Street,




&

the

the

of

the

York, ;New
Maryland and
*

to

of

on

that

business

80th

of

The Terre Haute First National I
Bank

ter; while R. A. Vose

*

*

stock A and preferred stock B of
the Clinton National were retired

13

_

is

from

J., and the Clifton National Bank
of
Clifton, N. J., the preferred

He

The Corn Exchange Bank Trust
Co. of New York, whose main of¬
fice

meeting of the
Mr. Moseley

Bank
on

relatively favorable, considering the developments that have taken
place having an important influence upon bank operations.

~'y/

man

the District of Columbia.
*

learned

Incident

New:

Jersey, Delaware
♦

is

dation

Assistant

company

bank's

of

of Hart¬

Aug. 23.

on

*

aslo

office.

identified

the

States

Phoenix

Co.

"Courant."

*f

banking denartment district
embraces

a

Assistant

the

Trust

1941, and Mr. Mattson since 1929,

of

appointment

Whitney T. Kelsey
Treasurer

of

Conn., at

&

the

Legion

Trust

the

Offi'cers

as

Commander

decorations.

announces

from

has been with the institution since

Honor, Croix de Guerre, and other
French

named

Bank

directors

commissioned in the U. S.

of

stock

re¬

Moseley and Harold A.

were

ford,

Amer¬

to France, Inc., princi¬
head of its Paris Office.

rank

of

(par

State

was

was

capital

stock

Mattson

previously with the Guar¬
anty from 1929 until 1942, when
he

of

Clark I.

interval

an

with

spend

years

Aid

pally

after

company

certificate

a

an

at its Paris
office, effective Sept. 1. With his
present appointment, he returns
to the

tional
bank

bank

.

the

of

as

to

Banking De¬

$10 each)
to
$240,000,
consisting
of
24,000
shares of capital stock of the
par
value of $10 each.

the appoint¬

announces

of

The

founding

News

tional Bank & Trust Co., both of

consisting
of
10,000
shares of preferred stock (par $20
each) and 50,000 shares of com¬

Officer,

Company

*.

$700,000

*

Trust

& Trust Co."

Auditor for

as

Newport

offices.

Canajo-

Warsaw, N. Y. re¬
approval on Aug. 12 from

mon

Robert

Assistant

Co.

partment

effective Sept. 1.
*

National

the

/'Vv/y

will fill the
in the Norfolk of¬

will be named later

Portsmouth

National
*

the New York State

ficer and Albert W. Doyle was ap¬

Guaranty

First

it became the Union Planters Na¬

venture

when

Petersburg of¬

National

at

Thei Wyoming County Bank and

Of¬

the

Assistant

1930,

John H. Land of the bank's

fice.

in

First

the

Canajoharie
*

Corporate
Trust
Department,
Richard
J.
Lighthall was appointed Trust Of¬

pointed

Savings

:1s

harie, N. Y.

and

as

of

of

Trust

Charles A. Rosebrock

if

on
Aug. 22 of John R.
Beach, Chairman of the board of

Williams

C.

True, ViceMortgage
on leave of

death

Other ap¬

Investment

as

and

W.

Announcement is made of the

of

Winton, formerly Assistant Trust
Officer

consolidated

January,

Roanoke office, will be Resident
Auditor there. One other officer

holds
:Jc

pointments in the Personal Trust
Department
were
W.
Brewster

ficer;

the

New

Bank.

Gibbons will supervise the devel¬

of corporate
pension trust business.

of

of

absence from the Lincoln

Mr.

trust accounts and estates and Mr.

opment

Vice-

former

Officer, is at present

investment

administration

Treasurer

and

officer of the bank, Mr. Weir will

supervise

area

was

Corporation

Mr.; Wallace

-

All have long

Department.

becomes

York

York.

presently officers of the Per¬

sonal :

New

association

Mortgage

H.

the

last

Co.

&

been associated with the bank and
are

his

Trust

Bank

Hugh Weir and John L. Gibbons
as

in

continuously since 1926 and prior

Jackson, Chairman of

York

pointment

formerly

was

business

Chemical

been

Vice-Presi¬
dent of the Manufacturers Trust

New

issue of the "Chronicle", page 465.
N. Baxter

System, taking that step in 1917,
was in
July, 1929, that

and that it

merged with the Security Na¬

Bank

Richmond,

similar position

J.
has

relating to the

A previous item

Se¬

i

tional to become the First National

Thomas B. Hall,

fices of the bank.

*

Burke

gage

a

Trust Co.

the

*

.

J.

York

the

of

merger appeared

National : in

Officer of the Lincoln Sav¬
ings Bank of Brooklyn, N. Y. Mr.

Morris, President of the

Trust

sjc

-

.

Michael

members of the Board of Trustees
New

and

has been named Resident Auditor

branch.

N.

the

Chase

Co.,

1943, as an official of its Havana

Stillman, directors of
the Fulton Trust Co., will become
of

the

and

of

Auditor

General

to

direct

position

the

the

a

the

from

advanced

will

It is stated that he

age.
from

personnel, accounts and relation¬
149

Avenue

*

Hospital in this city
He was 51 years of

Aug. 27.

on

the

over

has

tional Bank of New York, died

Sept.

at

Reed

(Cuba) branch

merger

on

York Trust Co. will take

Co.

maintain

to

Second

#

Vice-President

July 28, 1949.
It is planned

Corn

auditing plan to its state¬
wide office operations, effective
Sept. 1, according to an announce¬
ment Aug. 25 by Thomas C. Boushall,
President
of
the
bank.
Authority for the new system was
voted by the bank's directors at
the August meeting, together with
the promotion of four staff mem¬
bers. Fred G. Brittle, Jr., has been
Auditor

*

of

as

the

at

the

Deposit

Safe

authorized

been

about Aug.

or

time

same

between

agreement

companies

Banking De¬
branch at 1242

address.

with the provisions of

accordance

the

At

Exchange

merge

New

Aug. 24 from

partment to open a
Second Avenue, on
25.

companies

proposal

Trust

the

Aug. 30

on

of

ceived authority on

the New York State

York

Trust Co. and Fulton Trust Co. of
New

Virginia at Rich¬

of

Va., is adding a new resi¬

National

dent

CAPITALIZATIONS

stockholders

Bank

mond,

last

in

was

NEW BRANCHES

„

"The
was

American

CONSOLIDATIONS

NEW

American

curity National.

fice of the Clifton bank in Clifton

News About Banks

Thursday, September 1, 1949

contains

structure

the

in

its

remains

moved

along witb other quality stocks.

Third,

there

of at least 22 other banks that did

some

stocks.

business

from

have

been

individual

influences

in

the

case

of

an

record

volving
State

in

Oklahoma

is marked

the

City.

Its

stock

by mergers in¬

Citizen's

bank,

the

National, the First National,

J./ P.

Morgan earlier this

year

increased the dividend

annual rate of $8.00 to $10.00. Manufacturers Trust paid a
dividend and Bank of Manhattan paid an extra at the year-

end and sold additional stock through On

ing shareholders.

In

recurring

of

rumors

offering of rights to exist¬
Brooklyn Trust, there have been
merger with one of the larger banks.

the
a

case

of

THE

Number 4834

170

Volume

COMMERCIAL

of the

CHRONICLE

FINANCIAL

&

Sparkman

(857)

17

Those

measure.

calling i'or an expansion of Title
II of the National Housing Act,

Securities Salesman's Corner

under which most FHA loans have
been

fact. ' the

By JOHN DUTTON

in this column that their might

Several weeks ago we suggested
be

Mr. R. K. Babcock, who is witli"*A. W. Benkert

Here is the* way he

ple in and sold 20 bpnds to three out of four.
tells it to us:
X.V'.:.; VX/XX j ;X: XX.'

"Being

resident

a

York but do

of

East

home

puttering around the garden.

many

X.

.

"On

of my

one

around

This has proven correct in many

XXX'",rX y.X'XX\~X.recent Saturday calls, a lady answered the bell

cases.

that her husband

me

.

in the backyard, so I went

was

weeding his flower bed—Which of course I
,^VX'X
'•

and

admired!

found

March 31,

to

he

him

added

Atchison, Top6ka & Santa Fe

not

which

but

rental housing,

that it

continues

The rails have not escaped the general doldrums character! slic
of security markets toward the tag end of the summer.
There hasbeen little activity and when the securities of any one particular road
have shown signs of waking up, the interest has generally not carried

;■

1950, of Section 608

provides for

FHA's

sooner

tions

emergency

had

opera¬

discontinued, the better
it will be."
Particularly recom¬
authorized

be

to

seemed

pleased at

my

observation, after which I explained

mission and made certain recommendations, pertaining to
purchase of bonds. He listened attentively and said he might be
terested and would talk it over with his wife and let me know.
my

"I

the
in¬

suggested that RIGHT NOW would be the best time to talk
situation so they would both understand the merits of my

pay

field expenses from income

rather
than
on
annual
appropriations
from
Congress., FHA is a selfsupporting operation and should
be so recognized, he said.
''["i
The
Association .: opposes
the
provision permitting deferment of
monthly payments up to three
years for FHA loans.
Mr. Nielsen
said this would have a greatly
.

adverse effect of this type of in¬
vestment.
.;xXXXXXXX >xXX.
there would doubtless be many
X Especially X condemned
is the
questions to be answered and that I thought I was probably more
familiar with the subject than was he. The husband agreed to this proposal to provide $1,000,000,000
for
long-term loans- to housing
and asked his wife to come out on the porch.

recommendations,

also

and

■

that

rumors

It Was announced that such a
details were not released. Interest
\
X
Late last week interest in the common stock of Atchison, Topeka
& Santa Fe quickened. The activity, on the upside, was accompanied
by rumors that the stock was going to be split. This particular rumor
is a hardy perennial.
It differs from most recurring rumors in that
there is a lot of logic behind the idea. Quite a. large number of rail¬
roads with high, per share/ earning power have already split their
stocks, the most recent having been that other prime western carrier
—Union Pacific. It is not. likely
however, that any action will be*
taken at the August directors' meeting,:which will have been held
by the time this is published. If any split is contemplated, actio**
would presumably be taken; at the same time as dividend action, at
the September meeting. X-XX x XX -XXy
'x x* XX'X\X'
Whether or not the common is to be split at this time, or even if
it, is never split, there is ~a Widespread feeling among railroad
'analysts, and those few investors Who stiil look kindly on railroad
securities, that the stock at recent, levels has been selling rMiculou^y
low.' At last week's close of 87 V2, the stock afforded an indome return
of 6.85% on the regular $6 dividend., Assuming continuation Of last
regular directors' meeting.

in the road's securities

the

over

and for

plan had been discussed but the

-

"He

been

after the

mended, he said, is the provision
FHA

weeks ago Illinois' Central bonds and stocks
a time moved forward fairly briskly.
There
that a bond extension plan might be announced

About, two
active

became

are

that

v..

through.

be

to

the Association's opinion that "the

I commute to New
I had the idea that

J.,

have

of the National Housing Act

others who follow the same plan and are probably

are

and informed

N.

Orange,

to the office on Saturdays.

not go

there

heretofore

these loans.
Also approved is the extension

XX

summer.

who

been attracted by

have found the percentage of contacts to be greater than
times, particularly in the suburbs of New York City during

"I

other

in
change- should
investors into the

latter

many

market

& Co., Inc. of New

York, took our idea seriously and as a result his firm reports that
he made nine calls on the last three Saturdays. He found_four peo¬

the

bring

golden opportunity waiting salesmen who worked on Saturdays.

a

in

made, and the revision
I, are not opposed and,

Title

immediately ebbed rapidly:

t

cooperatives at .5% above the go¬ year's $2 extra, which appears as a conservative expectation, the
situation again I convinced BOTH hus¬
ing Federal interest rates.
return on an annual basis would be 9.15%;
•
VX XX
X'\'
recommendations were sound and they
Mr. Nielsen
concurred
in the
Too few people realize that there are quite a few railroads that
purchased $4,000 par value of bonds.
prevailing general opinion that the have long records of consistent "profits. There are probably mote
"I apologized for interrupting their Saturday procedure and they
provided for direct Jsuch records in the railroad industry than in'major industrial groups:
said that .was the only day I could find them in, as they both go to $300,000,690
veteran loans is not necessary and such as steels, automobile companies,, etc;
One of these star
business. They also gave me their private telephone so I can phone
that the section calling for hous¬ formers in the railroad field has been the Santa Fe. During the pe¬
them in the evenings."
.
This experience of Mr. Babcock may give some of the rest of Us ing loans for educational institu¬ riod of more than 50 years, that the present company has been in
.

"After going

band

the

over

that

wife

and

.

my

t

,

be consid¬ existence, it has reported net profits after full fixed and contingent
housing bill: interest charges in every year. Moreover, in all but three years since
Both of these provisions are op¬ 1900, it has paid dividends on its common stock.
The lapses ca.me
other lines of endeavor.
views a day, whether you have them at night, or on Saturdays, than posed by Federal housing officials in 1933 and again in 1938' and 1939. Since 1942 the stock has been
x;X;XyxXXX:X/Xx.xXXX: ; :X
they remained in the on a regular $6 annual basis.
to make dozens of calls upon people who are too busy to give the although
Senate Version of the bill as re¬
Despite this long record of profitable operations the manage¬
proper time and attention to your presentation.
We also know of a
salesman who does not come in; to his office but once, a week.
He ported by its Banking and Cur¬ ment has not been content to rest on its laurels. It has been one ©f
a

Selling se¬
effort than in many
It is better to have one or two good inter¬
conditions.

few ideas about how to work under today's

curities

requires

more

time

works right out of his home.

and

concentrated

He starts out about 10 in the morning

going.- If there is important information which he needs,
he obtains it by mail or by using the telephone.
He is specializing

tions

should

ered

as

not

even

of

part

a

entirely in income and protection type investments in a suburban
community around New York. After a year he has developed a very
substantial income running into five figures.
"X"

"A

Man

do

can

more

\

•

<

than he thinks he can hut he usually

all of the callable debt was redeemed and

Stein Bros. & Boyce

Bills As Socialistic

Nielsen, President of Mortgage Bankers Association of
America, titges elimination of direct Federal financing in amend¬
ments to housing bills now before Congress. '

Aksel

callable
1948

period more than $300 million was spent on additions and bet¬
S.- terments to property and equipment, superimposed on liberal main¬
Trost, resident partner of Stein tenance outlays. Even with these expenditures the "company still
Bros. & Boyce, Starks Building, has a net working capital of close to $1$0 million.
X ; X X
an

KY.—Milton

that the firm will have

exhibit at the Kentucky State

•

Fair,

there the early

to be held

part of September.
For the first time in the history
of

the

Fair

service with

there

will

be

ticker

experienced person¬

first threat

an

entire

socialization of credit in this coun¬

4V2% rate.

The 4% VA rate can't

and constitute a strong im¬ compete in the present market."
Mr. Nielsen declared that there
petus insetting the inflationary
is practically no appreciation any¬
spiral going again, he said.
The bills constitute an omnibus where among the public, or even
measure
intended to supplement in many sections of the national
try

the

provisions

the

of

General government,

why the 4%
attractive.
ready become law. Certain provi¬ He said that a scientific analysis
sions of the Sparkman measure will clearly show that the return
Housing Act of 1949 which has al¬

call

for

more

to housing

rate

is

as

no

$1,600 000,000 to' the investor

than

the government

of direct loans by

VA

cooperatives, veterans,

to

4% VA mort¬

'

-




features

year

common.

This

.

World Bonk Considering Turkish Loan
Second mission

on

to study need

way

International

Bank

for

X

for projects and port
X '

construction.
The

will

there

be

an

announced

Turkey

to

on

'

,

X

Development
five-man mission to

Reconstruction

and

August 29

examine

expects to
.will
attract the
be headed by G. Stewart Mason,
many people from the rural sec¬ Bank Loan Officer.
Other mem¬
tions of Kentucky who will attend
bers of- the
mission are Arthur.
explanation

of Mutual Funds to
small buyer and the

the Fair.

-

X The

-

Trading

the

of

Broad

52, Manager

of

Department

Wood & Co,, 123 South
Street, Philadelphia, Pa.,

suffered

a

cerebral

hemorrhage,

and died at his desk Aug.

Bryson

had -been

Wood & Co, since

29.

•

Mr..

Wright,.

with

1942 and prior

to that time with the

of

advice*
from

outside

experts

private business and

drawn

inter¬

national

organizations.' -'
January of this year, the
Bank sent a mission to Turkey t©
In.

appraise
the. general economic
situation and to help select proj¬
three technical
ects which might be suitable for
specialists who have been retained
Bank financing. The Bank's Viceby the Bank to examine the va¬ President also visited the country.
rious projects.
J. RXde Fargues,
Subsequently, thp Turkish Gov¬
French hydroelectric and irriga-:
ernment submitted a formal ap¬
tion engineer, will -study the pro¬
plication for a loan, and it is in
posed Seyhan Dam. near Adana,'
this connection that the present
lor flood control, irrigation and
mission is proceeding to Turkey.
electric power. Eugene E. Halmos,'
The government also asked the
Wubnig, of the Bank's Economic

.

Alexander Bryson Dies
Alexander Bryson,

which

mission,

arrive in Istanbul on Sept.* 12,

Department,

after deducting all expenses
Wright,
fees which must be paid be¬

and
educational institutions— cause of the involved / detail in
which, should it become law, will handling an investment of this
mark the first entry of the gov¬ type, comes down to 2.85%.
"When high grade bonds may
ernment into direct lending of this
be bought today in quantity to
kind.
In his statement, Mr. Nielsen yield 3% and over, the disadvan¬
reiterated the contention of the tage of the 4% rate is clearly ap¬
Association's representatives be¬ parent. " Congress has given the
fore House and Senate committees Veterans Administration authority
that no direct government lending to increase the 4% rate, but it has
is needed and that private funds not done so. The best interests of
were
adequately
financing the all, including veterans, would be
present large volume of construc¬ served by the change — and not
tion and can easily continue to do embark upon socialization of real
s0'"Xx V; :.V''' estate financing such as this bill
"The only reason why direct clearly is." *
~
'
Mr. Nielsen said the Association
lending is suggested at all is be¬
cause
of the government's stub¬ does not oppose certain sections
-

tioned

gage,

and

the company, reported Earnings of $23.33 a. share on
did not include any dividends from the wholly
owned subsidiary, Western Improvement Company. Earnings of this
subsidiary, mostly from oil and lumber operations, were equivalent
to another $4.65 of Santa 'Fe stock. - Naturally there has been
year-to-year decline in earnings so far in 1949. HoWever,. the com¬
parative 'showing has been considerably better than that of many
of the other major western carriers.
On the whole it now looks as
if earnings for all of 1949 should at least reach $18 a share, or three
times the regular dividend "requirement.
:'X'X
;X •
X • X
Last

its

that it is sending a
three specific projects for which the Turkish
Government is seeking a loan. The projects are grain storage facili¬
ties: irrigation, flood control and^
eleclric power; and port construc¬ loan projects, the Bank is again
XIn addition to the above-men¬ tion and improvement.
using the technical knowledge and

longer

on a

General

same

of what would likely amount to nationaliza¬ nel to; explain its workings and
industry, such as has taken place in England, is the purchase and sale of securi¬
contained in the pending Sparkman bill (Housing Amendments of ties.:
There will be exhibits of fac-'
1949, H.R; 5631 and S. 2246) which would begin the socialization of
real estate financing by provid
simile
municipal
bonds
which
born unwillingness to face the fact made
possible
schools,
bridges,
ing for direct lending by the Fed¬
that there is an unsound and en¬ waterworks, sewerage systems,
eral Government, Aksel Nielsen,
President of the Mortgage Bank¬ tirely unnecessary discrepancy be¬ courthouses, etc., in the State of
ers
Association of America, de¬ tween the artificial 4% VA inter¬ Kentucky.
Twice a day there will be a.
clared in a statement urging Con¬ est rate and the 41/2% rate for
gressional action to
eliminate FHA loans. The 4% government- showing of the Stock Exchange
these features, which he released controlled rate is not attractive at movie, "Money at Work."
the present time.
Trained account executives and
FHA has had
on Aug. 19.
Passage of this bill in its present little difficulty in attracting pri¬ personnel will be in the booth at
form may well mean the start of vate investors to FHA loans at the all times.
*;. *
y v,
;
The

tion of

market purchases of its two remaining issues—the non4s, 1995 and Adjustment 4s, 1995.,'By the end of
the total outstanding had been 'cut to $200,725,000.; During tbfs

started open

To Exhibit at Fair

announces

Denounces Housing

than $102.7

more

LOUISVILLE,

does less than he thinks he does."

In the years 1941-1948
million of non-equipment debt was retired. First,
then last year the company

the leaders in the industry in debt retirement.

Committee. X

rency

and keeps

Chief

trading de-- petts

and

Engineer of Knappen Tip-

Abbett

Engineering

Com¬

Bank's

assistance

in

making " a

broad
survey
of
Turkey's ..xe-*
of Blyth & Co. and pany of New York, will examine sources, in preparing a plan for
the project for the construction
Janney & Co. He was long active in.
their development, and in devising
and
improvement
of : Turkish
the affairs of the Investment Trad¬
and putting into-effect measures
ports. 'James McAnsh, of Canada/
ers Association of Philadelphia.
that would
strengthen Turkey's
Assistant- Director
of the Joint

partments

Agricultural Division of the Food
and Agriculture Organization and

fiscal and

administrative structure

private enterprise. The
agreed to furnish suck
assistance and is in consultation
has become associated
at Geneva, will study the proposal
with the Turkish Government in
Central Securities Co., 1004 First for
expanding grain storage facili¬ regard to the choice of personnel

Central Securities Adds

L. Catlin
with the

OMAHA.. NEB.—Fay

National Bank Building. Mr..Cat¬
lin

was

formerly

Bender Corp.

Wachob-

with
.

f

„

v.

Economic Commission for Europe

ties in Turkey.

Thus, in connec-

tion with its study

and foster

Bank

to

has

make this

of the Turkish vey.

comprehensive suc¬

18

THE

(858)

COMMERCIAL

&

FINANCIAL

CHRONICLE

his

on

The Rationale of Consumer Credit
(Continued from page 4)
able
but

then

decline

to

The

policy of "Build-them-up"
sends the application to a Credit
Policy Officer. He has found a
way
to
thwart
Jorkins, many
times. He takes the attitude of

elert

an

His

situations.

difficult

value

resourceful

ing made.
Through this kind of "secondlook" handling about

,

be

to

those

with
And

one

in

stern school where the

direct

so

be utilized.

he

is

that

certain

or

didn't, and he

is up

now

Who is entitled to credit? What

is good personal credit?

mechanical

way

Is there

evalu¬

of

ating various factors such as age,
employment, marital state, type of
work, property ownership and the
like which would enable you au¬
say "Yes" or "No,"
personal; loan applicant?
many similar queries
have been presented
time and
again in efforts to establish a rule
of thumb in determining the tests
which sound personal credit ap¬
plications should meet. While the
factors
mentioned,
and
many
others^ all have a bearing, they
can't be given an exact 5, 10, 15
rating. Slide rules have a very
limited application.
My answer, then, in a most ele¬
mentary sense, would be: "Any
loan is good that gets its monthly
payments made on time without
real hardship to the borrower."
Or looking at the typical cases
just quoted you could say: "There
are deposits awaiting useful em¬
ployment.
Here is a repayable
economic
need."
In
the - early
days of our business we used to
say: "You can't lose money on an
honest main with a job."1 And that
is as true today as it was in 1928.

tomatically to

to

the

These

and

all

In

of

but

those

cause

ment

cases

fraction

which

bank, joblessness
possibility of unemploy¬

are

the matters of primary

concern.
?■

may

loss to the

the

or

small'

a

few

,

Some Tailor-Made Maxims
That

made

has

led

maxims

to

in

Back in the middle

other

this

business.

thirties, when

were plenty of shaky
corpo¬
rations, it could be said: "The em¬
ployee may be a better credit risk

"

than

the company," because although the company might have
limped along in the red for awhile

This is

Bradstreet"

and

device

showing

our own

"Dun

quick reference
previous bor¬

any

rowings

or current loans, payment
record, special warnings and the
like.
It's something of a railroad
signal
system,
too—with vivid
colored dots pasted to the cards
saying in effect "GO AHEAD!"

"CAUTION."

or

Notations

advis¬

ing the Approval Committee of
pertinent information are put on
the

new

applications.

To do their

makes

such

loans

could

say

to

thus not been eligible for
credit, the employees, getting a
weekly pay check were reasonable
risks.
Also, by the time the de¬
pression had progressed far, even
~a corporation failure
only tempo¬
rarily put these good earners out
of work—they were in line for
jobs as the upturn started, wheret
as
the company sometimes re¬

Next

quent

on

came

Approval Committee are parttime friendly detectives.
In the
quest for
loan

valid

a

increases

come taxes and

assistant.

element

to

in

personal

ponder.

a

in¬
new

Some years




der the

a

"You

on

the

guarantee

already have shown thrifty
in
accumulating wealth.
Furthermore, in a short time your

affiliate of the

of

and

who did not receive cash
payouts

Bank

balance

your

that

so

still should be secure."

important
loans

that

be

primarily

made,

the

on

It's

such

basis

of

customer's employment and
income, like unsecured personal
loans, the collateral or partial col¬
lateral being judged as a facilitat¬
ing factor.

everybody in

constructive

well-rounded

a

There's

the

The

Veterans

Then apartment

finance

can

refrig¬
in large lots.
there's the well known

and

Of course,

ranges

an

emergency measure in 1934 to
help lift the construction industry
the

floor.

>r

But these don't need much

plifying, so let's
Bank-and-Agent
direct

motor

is

bank.

plan

loans.

plan

the

am¬

to

on

auto

car

Bank-Agent
broker

move

the

the

and

In

the

insurance

natural

ally

of

a

It pays him to direct busi¬

to the bank because in bank-,

ness

financed

deals

he

Section

ship."

his approval and turns swiftly to
the next case.

and

and

will

information

and

those

returning
previously issued.
As business

day, telephones
is

fundamental

that

no

per¬

credit.

results

in

In

our

client

deal.

to

The

save

having

money

banks

on

told
the

insurance

and

brokers have been cooperating for
a decade.
This working arrange¬
ment

has

where

developed to the point
than 11,000 brokers

more

business
who

to

Bank.

our

finance

people

new

in five

one

deposit account. That

a

those

purchases

car

through the Bank only
has

Of

means

coming into the

are

to

the

community on another
Also, about a third of all

motor

loans

car

ready owned.
become

are

serviceable

as

cars

on

al¬

car

has

The motor
for

collat¬

or

bonds.

eral purposes as stocks

Veterans of the late

war

come

small

own

Veterans

Loan

required

financial

protects

helps
foot

him

businesses.
Section

the

get

The

provides

help.

veteran

off

on

It
and

the

an

case

financed.

are

records

of

Here

find

we

dealers

who

sonal credit department can oper¬

tor

plenty of information.
applies in a broader sense
than just reports on specific bor¬

financial problem with

equipment salesman.

rowers.

was

Kedping
trends

informed on
develop¬

and

is

for

characteristic

a

one

A

lations, to

This

calls

"intelligent
systematic effort is

through

their visits

"must."

to

contact

men,

on

maintain

good re¬
get advance informa¬

tion from employers. For
instance,
advance news of plant
expansion,

a

is

discussing his

very
a

serious
medical

The doctor,
veteran, whose general practice
interrupted by the war, de¬

cided

on

his

return

to

civil

life

the

to

cus¬

our

the

desk

of

this
the

field.
need

of

adding expensive new X-ray
equipment to his office. His wants
don't end there either. He is in

gent need of

a new car to

his pre-war model to

ur¬

replace

make

calls

been

buried the day before
having been ill just a few
days.
The woman was terrified.
after

incurred by her husband's illness

is

lifted

and

a

which

wants to floor

plan 8 refrigerators."
After speedy reference to a com¬

cover

illness

of

pact current record the Super¬
visor replies: "O.K.
Send us the
invoices and the other floor plan

months

before.

to

papers."

band's

the

And

when

transaction

the

come

papers

in,

day, the dealer's check

the
cov¬

ering the interest for 90 days is
attached.

gets

our

Then the distributor
check for the balance of

the purchase price, less the usual
down payment. So the distributor
has made a cash sale, the dealer

with

can

cus¬

months

to

pay—and

another

contribution

business

sion.-;

to

o;:\

:y

the

multiple
expan¬

-V-v/:

,

Start of the Assembly Line

arrives

a

most

important

ing line for the accounting team.
Everyone concerned with credit
processing races the clock hands
to get as many approved cases as
possible to the payment section
by cut-off time. Speed is the out¬
standing
feature
of
what
has
to

up

to

now.

But there

come—when

the

death,

burden,

loan

she

heavy

expenses

faced

now

the

so she thought, of a loan
had
been
necessary
to

the

pay

a

expenses

her

of

an

earlier

husband
"You

some

won't

have

cent, Mrs. H," said our

interviewer at
loan

"Your hus¬

onco.

insured, so you
go home and don't give the matter
another thought."
And then, the
next day, we receive this letter;
was

"You have made

With

it

all

was

me

very

troubles and

my

relief

to

learn

happy.
debts,

our

loan

with you was insured. Thank you
God bless

and

you

for. inventing

that system."
Over

the

past

21

year,

12,449

borrowers died before their loans
were

paid, leaving balances of a

total

of

$2,612,249. The widows,
able to breathe

the families, were

freely

more

for the credit team and the start¬

more

and

enjoy his refrigerator

Bank has made

is

in

with

had

a

distributor of national appliances
says: "Joe Blank over in Staten
Island (one of our best dealers)

transpired

course

monthly payment on a $660
was past
due. Her husband

In addition to the

receiver

a

specialize in radiology and took
faced

the
loan

Supervisor
dealing with the appliance floor

post-war
is

Last week, Mrs. Mary H. came
the collection counter because

plan

a

he

*

Moment

to her husband to remind him that

jingling
battery of telephones! But
they don't jingle long.
On

Bad

a

she had opened a letter addressed

cus¬

tomers who also become

to

Now

to¬

on

This is Death.

Relief at

initiate

contracts, and those of their

day.

every

Let's step over to the Contract
for a moment.
This is
where purchases of home utilities

point in the day—the finish line

moment,

very

This

business

account number

Section

Now

this

Any¬

purposes.

micro-filmed

^

right

ambitious young doc¬

record

the check and
2,500,000 incoming calls per
handled at a special switch¬ provides a useful record.
There is plenty to attend to in
board staffed by 8 operators. This
is the "cerebellum" of an exten¬ handling the affairs of the popu¬
lation of this veritable "City of
sive
"auditory nerve" system. Borrowers"
following their own
Special as well as, regular lines
diverse paths
in happiness and
radiate
to loan origin
points
health. But, as must always hap¬
(large employers besides our own
pen in any large group, another
branches) and to many sources of
figure enters three or four times
credit information,

by competent examination of
at

they're

year

documents.

probably,

hand.

(both side simultaneously
due to three ingeniously placed
mirrors). This saves writing the

1,200,000 outgoing

for

his

in

gether

and

from

how

for

way,

ringing all

were

tomers. Just listen to the

ate without

ments

union

In fact, the tele¬
science's principal gift

consumer

this

cash

Of you might call it
"wedding" photograph — a

their

to¬

up

the place.

over

to

company.

starting

was

note

the check have their "can¬
did" picture taken before
parting

advice

applications

of that

Right
It's

to the bank required
ago—the
applicant
need
make only one call from
signing

When mail payments on a loan
are
made by check, the coupon

gain much credit

him

calls

the

sions and he will

also

reports, "Same owner¬
The Supervisor indicates

three

Loans, while the other half
will be
divided between those

place the
insurance, he will get the commis¬

the

assistant

a

in

G.I.

Health

dentist, later paying the

owners

erators

Loan

applicants

half will be issued applications for

doctor

house

your

off

those

years

phone

or

use

pay

mail,

this single day will greet 100 vet¬
erans.
Of that number about one-

to

Bank direct.

to

money
this loan,

on

morning

get their checks, which they can
cash at any branch or handle as
they please.
So instead of the

seeking

Constructive Credit for All
There's 'something

have to

never

income-tax
loss

the

to

the

It eliminates many
errors, too.

Sam will

hunch." In about the time it takes

loans

ac¬

000,000—of which nearly half al¬
ready has been paid back—Uncle

their

other

the

even

X Y Z for several years. The ad¬
dresses
are
the
same.
Just
a

two

cuts

number, amount and date of
payment through all the coupons.

something
unexpected
does
happen to your employment, the

has time to sell his goods, the

approve

perforating machine

added

tomer

with

facsimile signature.
Next,
books is prepared. A

a

coupon

if

duced

re¬

give

clamoring for the help they need

job

a

month,

every

count

partial

to realize their fox-hole dreams—

down

the

un¬

businessmen

two

viously

held

hundred

accounts

Finally, the check, the coupon
book,
and
loan
statement
are
ready to be mailed. Thus, in the

monthly payments will have

next

an

servicing

strength.
Judging by the results in lending
to 8,500 G.I.'s for capital use $18,-

front.

Manufacturing Company.
This man doesn't qualify for a
single-signature loan because he's
bepn on the job with Monmouth

equipment

relatives

ed

Z

in

several

mechanically-signed

instal¬

extended term

an

U.S.-insured loan plan of
Bill of Rights."
Liens

traits

if Monmouth Sales

see

month

as
in collection followThen the check is machinewritten and

"G.I.

for

Corporation is
Y

to make

the desk to

across

in monthly

repay

over

the

customers:

"Call Credit down¬

an

town and

made

steady and fre¬

that raised

We

will

ments

branches. Fresh service is render¬

application

X

reason

Committee member tosses

a

an

system."

its back.

the

possible.

such

in the metropolitan area have sent

job, members of the

number

well

with

off

names.

calls.

he

from

lion

se¬

due

are

later

posting

fered, the customer may borrow
to the full value of the col¬

F.H.A. Title I plan for property
improvement which was started as

the branches by messenger
during and after the day's busi¬
ness.
A night force takes these
applications and prepares them
for investigation. Name cards are
typed and cleared through the lia¬
bility file comprising several mil¬

payments

corners

and

lateral. The steady whittling down
of the debt by monthly payments

up

emergencies and the others
are now at hand for handling over
a
day or so.
The job is begun
at night.
Applications flow in

stant

make his

papers

ups.

signs the note in the office of the

So now let's look at the day's
grist.
It's in the cards to get an
early start on solving the day's
"Help Needed" calls.
Some, of
course, have been handled as in¬

cuts

How will this be accomplished?
The doctor receives $5,000, which

and

mained flat

of¬

are

to

car

the

proper

and
the classification of the loan. This

black

new

the

numbered—the

are

which

on

may

for only .two months but he pre¬

tailor-

there

<

securities

Credit plan, under which the pa¬
tient fills out the application and

Let's Look at the Grist

inescapable fact

against it

any

human nature.

they

cies

not

now and cannot
making over of

the

upon

one

First

into

indicating the day of the

be seen - leaving his
up-to-the-minute equipped office,

When bank

transactions

quence, and at the same time are
reviewed for correct details. Then

as

lacked similar vision at times? The

time could

more

The

has

sorted

thousand

for

indeed

Cash

old

program.

didn't

who

the

bag in hand, and get¬
ting behind the wheel of his day-

signatures.

wait

he

because

only by

doctor

of

the

watching in the Ap¬

assembly line.

Gets

City and see about a G.I. Loan."
Ten days from now the young

are

individual's defective

an

budgeting,

there

Doctor

of

one

been

proval Committee has reached the

carry

present.

"Well," suggests the salesman,
"you'd better go over to National

a

personal

course

loans secured

more

"Help Needed" is

act earlier

,

Of

talking principally

titled to." It is futile to catechise
customer

Now
we've

savings passbooks, insurance poli¬

Fully 25% of the credit sought,

result of

been

slogan is, in the rapid transmis¬
sion of items, "Give the applicant
better service than he may be en¬
the

logistics problem of servicing the
thousands of items a day.

a

too.

are

The

types of personal loans,

or

cases

a

carte

heeds

menu.

have

$6,000,000,

"but not

la

a

bank

a

the

for

develop¬

and

coverage

volume

many

day

yearly, amounting to day in and day out, is of an im¬
mediate emergency nature. Hu¬
are moved from
the "question mark" pile to "ap¬ man affairs being what they are,
proved." Yet it's only the final some of these emergencies prob¬
phase in a series of insistent ef¬ ably could have been foreseen
forts to say
"yes."
The inter¬ and provided for — still more
viewer at the beginning of the could have been foreseen but not
line has instinctively functioned provided for—and many more nei¬
likewise.
He, too, has gone be¬ ther could be foreseen nor pro¬
yond routine consideration of facts vided for. So it's largely an emer¬
as presented by the applicant. He
gency
solving business,
to
be
looks upon himself as a channel served by facilities geared to an
of "Help Needed," as well as a SOS basis. We have to take the
screener of applications.
He has American people as they are. If
been brought up in a disciplined some of the emergencies are the
14,000

has

Well yes, the doctor has
little, which, with his moderate

on

credit

a

credit

we

brackets.

of

complete,

tax began to bite more ven¬

needed

for

ment

somebody made this observation:
"It begins to look as if the em¬
ployee may be a better risk than
his boss." If such pat phrases over¬
simplify the issues, on the other
hand
they do dramatize some
basic truths in personal credit.

and-third

some

he

support

income, will enable him to
needs

consumer

Both

was an easy
But as the in¬

matter to handle.
come

the lower

competitor he can
succeed in being, by finding new
strength or the necessary loan ad¬
justments which will reasonably
assure the monthly payments be¬
a

to

Money?
a

layoffs, is useful in opposite

The

credit, it

quest for

we

to

And

wife

new

diet diversified and well balanced.

had to be more care¬
ful with the top-salary men than

the Bank is in proportion to how

patients.

brand

directions.

omously

competitor anxious to disT
good assets in tentatively

cover

of

or

very

ployment record, such as most
persons of that type usually had,
came
in with a legitimate
re¬

loan

the

individual with

an

substantial salary and a long em¬

A further effort is made.

no.

when

ago

Thursday, September 1, 1949

life more
a day in
decision had not

and

face

competently than if, in

May,
been

1928,

the

made for

the first

time for

complete group of bank loans
in the world, that the hazard of
death should be shared in tiny
any

fractions

by

all the users of the
saving quality

service through the
of

group
life
insurance.
Such
"sharing of the hardship debt" is

almost universal now in this field
of banking.
*

hits the "assembly line." The
sembly line is the mechanized

as¬

op¬

eration of

processing, from initial
approval of loan to check in hands
of borrower.

well-oiled

It takes

a

spate of

machinery to beat the

Now
tour
can
even

to

you

have

the

area

continue to do

come in
where a
a

your
bank

lot of good—

build goodwill—while firmly

protecting its interests. Collections
of past-due accounts can be ap-

Number 4834

170

Volume

oldtime

the

from

proached

viewpoint

lector's

welfare

the
of

a

majority

The

group.

of

delinquent personal loan borrow¬
ers mean to and want to pay their

obligations. Therefore,

the prog¬

nosis in most "sick" loans is "im¬

expected."
But here,
too,
it
often
is
a
case
of
"'Help Needed." Collection inter¬
provement

viewers look

themselves as
Usually an interview

counselors.
is

upon

off

started

with

"How

In

col¬

from

or

enlightened. concept

more

THE

I

can

this

COMMERCIAL

period in which

expansion

is said

be

to

credit

particu¬

cash when
But

credit

The

4.3%.

in

the

Street" is not
afraid. He's buying and he's bor¬
rowing—for his idea of necessi¬
ties

from

dental

cars—because

back.

pay

to

care

he

motor

believes he

Well

this

can

fellow

is

doing pretty well.
In 1939 gov¬
ernment (Federal, State and Lo¬
cal) taxed him $17.3 billion, or
$133 per capita.
Today govern¬

rate.

Those

it.

delinquents who do not

taxes

pays

these

course,

the

except

not

are

who

man

respond, of course, are in for the

produces?

usual

velt so rightly said in his first
campaign: "Taxes are paid in the

legal treatment and

count is

gotten. ! Payments still
obtained

no

ac¬

too small to be for¬

ever

loans

on

being

are

defaulted

21

years ago.

"It Couldn't Be Done

,

So

your

close.

This

people

many

done.

1928

For

credit
bloom

business

a

said

that

couldn't

many

be

individual is riot a good
risk, at least when the

comes

perity.

To

thousands

off the

lend

can't

be

giving

they

said,

done."

detail from credit

"The

But

payments

But is was.

had

been

increased

buy,

still

$13,024,000,000

but

of

cost

fact

fellow is

is

that

paying

this

cessa¬

consumer

for govern¬
ment than he is for food—the lat¬

ter annual bill

more

being only $52.9 bil¬

lion at latest count.

a

These
are

"2-in-l"
two

Personal

Credit

loan.

The

lution

of

first is the

their

the

one

direct

immediate

so¬

finan¬

cial problem,
But that's only the
first return.
There's a second as
well. This is the benefit the trans¬
action
The

confers

future

on

ability

our

economy.

of these

bor¬

to pay, sets

rowers

in motion to¬
day a chain reaction, consisting of
successive
business transactions.
This inherent
ed

into

cash

credit-ability, turn¬
on
the barrelhead,

amounts in all banks to hundreds

of

millions

month

a

goods and services in
ceivable

of

area

to

for

pay

every

business

con¬

or

in¬

dustry. This cash reaches from the
suppliers of the physicians, to the
makers of television tubes, and to

the

owners

and miners of coal.

Consider how widely your

posits

are

vance

de¬

the credit for the

utilized when

you

ad¬

purchase
single television set.
The
suppliers for whom you are mak¬
ing orders may run into the hun¬
of

a

dreds
€92

because

mechanical

set

have
components, 280

one

may

electrical components, and 27

tii>es.

,\

ly with the forecast we have made
for the winter, which was a nor¬
mal
increase of 12%, including

Runs to

Runs

"When

small extent?"

and

to

to

day

This process

has

which

are

now

the

of

Pacific

a

Coast

States, would have to be increased
to 4,852,000
during the winter to
provide products called for by
these forecasts.
This takes into
consideration the present level of

stocks,

the

stocks for

probable

It

almost

lar

demand

to

today's

is true that

for

Whether that

yardstick

whether

or

is better able to

consumer

ating serious conditions

of this

concerned

the

cre¬

be

contribution

to

the

problems

it

respect

rights of individuals in
and

my

land—in

our

land

your

good

coun¬

try. V...

the

summer

season,

all fuel

stocks

the

winter

day from the present levels,
have to increase only

a

would

ter's production rate.

Yields Must Change Radically
and

the

end

of

and all other
to balance out the

go

This increase would
have to begin in August and step
demand.

up

rapidly in September to attain

the

stills

to

runs

that

we

have

shown in the third quarter of
4,-

Probably
timistic

have been too op¬

we

in

thinking

that

large

quantities of fuel oils would

move

during

ter would be higher and the added

4,467,000.
Many might say that
this rapid increase in the rate of
stills

is

unrealistic.

If

is true

(and it may well be
so) it simply means that whatever
runs

not accomplished

are

third

quarter,

that

Gulf coasts.

in the

much

more

4,852,000 barrels
day, will be an all-time high.

a

A

recent

minimum
;

brought

were

by

nine

petroleum products for the period
ending March 31, 1950, indicate*
stantially

higher

production

crude

in

United

In the

have

is

over

oil

the

a

need for sub¬

e?

State*?

tfye next several months,

i

of

case

been

15.5%.

around

out of the crude

outlook

Our

Continued

we

consumers

or

aggrevate

run.

delayed

buying

by

dealers will tend to

any

of

conditions

tightness which might develop.

Sees No Letup in Low-Priced House Demand

the

'/V *

end

y

of

'

the

by

National

Council indicated that

there will be enough refinery ca¬

pacity to run these quantities. End
capacity in the area show¬

It might be possible to get a bit
from
natural gas
liquids,
but the growth in this production
has been slower than originally

■

Sales of high and medium cost homes are

down from the start
1949, but there has been no letup in the "effective buying de¬
mand" for low-priced homes, nor is any in sight. According to a
survey made by the Committee on Trends and Economic Policies'©*
of

the

5,442,000 barrels daily, which
operation equals 5,170,000
barrels a day.
There is also indicated that the
Middle West will be able to take
of
its
own
requirements
through its own refineries to a
much greater extent than hereto¬
care

This

fore.

to

seems

indicate that

United

States

Savings

and3>

"Price declines already have oc¬
in both high and medium

curred
cost

with the most
cuts
coming
in

homes,

nounced

pro¬

the

luxury type class," said the Com¬
mittee. "However, prices continue
to

hold

their

own

';[£■

homes."

on

low-cost

./ •, .V
lag in real
sales, the Committee said
that
prospective
buyers - today
have an ever-growing number of

As

a

*

close of

Loan League.

ed

result

of

y\

the

1949, this will be true for
many more towns and cities."
Committee

The

this op

based

¬

timistic opinion on what is called
"an

encouraging

trend"

increased production in

priced

housing

toward
the low-*

is

dis¬

closed that three out of four

sav¬

field.

It

ings association managers reported
that this type of

for

housing account*:

market
the

requirements, and
that
products heretofore shipped

proportion of tfctat
building today than a year ago.
"The principal factor behind the
homes from which to choose. Of higher production of lower-priced
the
managers
reporting in the homes has been the decline m
survey, 80% said more houses are building costs," said the Commit¬
tee. "A majority of savings as¬
on the market for sale now than
sociation managers report that the
six months ago.
in - construction costs ha??
"A corollary to that situation," drop
said the league group,

into

those

finished
of

which

North

or

moved

Coast,

products
the Gulf

Inland

Louisiana—Ar¬

area
into District No. 2,
might not be required in the vol¬

kansas

umes

previously taken.
that

essential

more

Savings and Loan League, however, reports stiffening of buyer
f ;
resistance in medium and high-priced field.

as

study

Petroleum

Texas

the

»

__

winter, shown

out

following winter, because in
balancing operation all in¬

next winter.

Summary

that there will be

The crude which would have to
be run to stills during the coming

would have to be handled during

fuels

next

H

An appraisal of the demand for

is that all the gasoline
industry needs can be made
by yields of 46% for this quarter
and 43% for the coming winter.

Highest Crude Runs Forecast

the

of

the

what

the

shows

in

at 95%

.

for

realize

to

is

rate

would have to get a
inventory would be
substantial increase in the yield
used up during the winter.
We
do not anticipate a bottle-neck in of distillates—probably to a new
storage capacity on the East and all-time high. A somewhat simi¬

quantity

day, August, 4,400,000, September,
4,700,000, for a total average of

to

outlook

beginning

ahead.

A large increase in refinery op distillates, yields
the third quarter.
dropping rapidly.
In erations is also indicated as wcte
If consumers
the first quarter it was 18.3%, the as the necessity for refiners to
hold off buying, that would mean
simply that demands in the win¬ second quarter 16.2% and now it produce substantially more fuel*

channels

consumer

of year

runs

is

run

inland

It
r

seems

refineries

close to capacity to meet their

areas

be

available

for

estate

average

"is that the
time that houses for sale

a

higher

ranged from 5 to 10%, and more."

generally remain on the market Walston, Hoffman Co.
is somewhat longer than at the
done, a bottle - neck
Adds Two in NYC
if necessary.
We have used resid¬ might develop in refinery capaci¬ start of the year. This is par¬
Walston, Hoffman & Goodwin-,
under all manner of business con¬ ual fuel oil
imports at the rate ties, which on an overall basis ticularly true for medium and 35 Wall
Street, New York City,
ditions presented by that capri¬ of
houses,
except
in
180,000 barrels daily for the looks all right, but which might high-priced
members of the New York Stock
cious scene-shifter, economic his¬ first
those instances where these homes
not be all right if there was a
quarter of 1950.
Exchange, announced the associa¬
have been built to order."
tory. Review the cycle—exhorbiconsiderable amount of idle ca¬
tion in their Sales Department ©I
Inventory Changes
tant boom, depression, recovery,
A further indication of stiffen¬
pacity in the interior while the
Charles B. Woram and Isaac Hessfears of war, war in reality, the
Gulf Coast and East Coast refin¬ ing buyer resistance was found in
It is interesting to
note that
berg, both formerly of Dobbs &
aftermath, the inflatioi^fthe level¬
during the third quarter of 1948 eries were running to full capac¬ the Committee's statement that CO.
:.V'
"
ing off. Out of the mass millions almost 400,000 barrels a
there is already an over-supply
day were ity.
of transactions, there have been
of high-cost new homes. ;
put into inventory.
If demands
been

tested.

Through thick and

thin in every economic climate, I
have
seen
the payments made

anticipated.
might offer

Additional

imports

increased

an

supply,

East

were

Coast

movement.

If

this

not

•

individual failures.
But in the
broad result such defaults have

are

near

and

runs

not marred the prescribed
pattern

have

forecast

by the law of averages.
The inevitable percentage of loss
must be considered
operating ex¬

the

what

placed

daily

over

during

September

of

rent,

mands

not

and

your

discount




should

are

are

just

as

we

that
do would be to
100,000 barrels

can

pense, as necessary as salaries and

properly provide for it.

forecast,

them, the best

industry

liquidate

have

we

raised to where

are

July,
this
as

-

We think that the industry

cold.

months

quarter.

467,000 barrels daily.
This aver¬
age is: July, 4,3000,000 barrels a

that

The

this

the minimum
at

current

There

Any number of other possibil¬
or presentations could be cal¬
culated, such as:>suppose the in¬
dustry did not change its opera¬
tions quickly, then what wouM
the situation be? We can say del initely that would be a lot w©rr->
and it may be difficult enough to
get through this winter if it is real

ately start adjusting their yields.
Gasoline percentage yields have
increased steadily.
During the
first quarter of this year they
were
at 43.5%, during the sec¬
ond
quarter at 47.7%, and we
the

¬

above

ities

umes
of crude run through the
refineries, it is also apparent from
these data, and as indicated by
the Department of the Interior,

guess

somewhat

tions.

Rapidly

Even with these increased vol¬

would

runs

the

having to increase

between 700,000 and 750,000 bar¬
it

its

minimum

season,

items that

oil during

©H

estimate*?

should be kept in mfrwi
qualifications behind thes^
figures. They are middle-of-theroad, informed guesses. They arc
predicated upon certain assump¬
tions, which we have indicated.
They are forecast < upon normal
weather and they also have bee.*
predicated upon a sharp reversal
in the petroleum industry opera*
-

about 49.5%.

possible to store

crude

more

Qualifications, Etc.

in inventories took place,
means that in
place of

the production

constructive

ambitions, with selfand human dignity, the

even

schedule

those indicated in this forecast.

would

their

and

run

this

industry has the capacity to "In

daily less than the foregoing
requirements.
If this large re-^

American economy. It offers mil¬
lions a bright solution to their

budgetary

to

than

650,000 barrels daily. The produc¬
credit, today and tion required during next winter
would be fairly close to last win¬
day, is making a wholesome

vital

when it is required.
only way to overcome sued
situation if it happened would,

a

in the in¬

Bank personal
and

winter

The

stract statistics.

every

is

the

store

crease

rels

much

have

to

would be necessary. We think Hie

fellow is

as

production

duction could be about 80,000 bar¬

duction

the researcher in ab¬

become
That

not

If 15 million barrels were
liquidated during the winter
months, it would mean that pro¬

guess.
I am sure nobody knows.
Judging by the promptness with
which today he
is making his
monthly payments, the consumer
not

changed

may

would

©wr

sufficient quantities and it would
not be in storage to use
during

rels

as

not

are

this winter.

we

distillate

19

showed up in
kerosene.

problem

for

because

dustry.

proportionally larger load
than in 1939, 1 am not going to

about it

the

soon

critical

production

some

reversal

calculations for
If the yields

means

million barrels lower without

carry a

gasoline at the end of

for

to

what

stills,

east

ventories

It may be asked, J'What if these
hundreds of thousands of borrow¬
ers don't pay?" My question mark

is,

reliable

into

Stills

slightly below 4,300,000 barrels

our

Will the People Pay?

answer

the

(Continued from page 3)

custom¬

from

bear

Petroleum Demand

helping themselves to a
value.
Two
services,

returns—both

it

A Forecast of 1950

But
banks
generally now are
sharing the returns from this live¬ diesel oils without allowance for
ly addition to the banking family. weather adjustments.

ers

This

that refiners will have to immedi¬

low

a

will

in 1939.

as

1949

they

wages,
what they

(as now) in broad
tion of employment."
The

of life
a

resounding

a

seeming relation to the facts

same

from

or

and

long
saying it.

are

bill,

to grind,

axes

saying that for

Some

tax

a

deductions

Certain sooth¬

often with

sayers,

time.

of

mass

collections can't be done at
cost."

in

see

in

pay

$3,854,000,000

it

investigation to

handling monthly

labors

away

was.

Then

who

man

So it isn't so
of surprising that he's
caught short of

hundreds

to

without

bank

of pros¬

rose

every

because they are burden on pro¬
duction and can be paid
only by
production.
Our
workers
may

before

years

had been saying, "The

some

average

the

is

of

never

tour, and a glance at
part of one day's business, is at
a

sweat

As Franklin D. Roose¬

of which

ment credit reaches

all personal income taxes but who

cure

Of

to

up

day'during the

a

Recently the Federal Re¬ between 700,000 and 750,000 bar¬
System reported instalment rels a day of extra crude oil as

standing,

out what it is and how to

the

go

entire winter period.
that there would be

But, crude oil might well be taken
assuming the present national in¬ from inventories which are
fairly
come, not until or unless instal¬ high and which could be 15 to 20

a

for

reason

to

is held by commercial banks.

is

a

have

compared

tax.

is

there

would

(859)

4,600,000 barrels

credit totaling $9,133,000,000 out¬

delinquency and he tries to find

knows

national per¬

income, in 1949 it is only

serve

ment taxes him $54.5 or $372
per
capita—about three times the 1939

help you?" The interviewer

instalment

1939
of

CHRONICLE

strikes.

emergency

in

6.1%

was

sonal

FINANCIAL

an

although

larly desirable, consumer credit is
fullfilling its function valiantly.
"Man

&

August
If

year.

high

and

but

high, then it

de¬
runs

may

be

Crude Production Required

"However, this is the only area
which
this
condition
has
Assuming no significant change for
in imports, then to balance out taken place," it said. "The supply
the requirements, production of of medium-cost homes is prac¬
crude oil

would have to

increase

from the present

production (July
—3,850,000 barrels daily) to over
4,200,000

during the

average

for

July, August and September and

tically normal, but there is

no ex¬

With Reynolds & Co.

Reynolds & Co., members of the
New York Stock Exchange, an¬
nounced that Morris Bernanke is
r.ow

associated with the firm as a

normal registered representative. He wiH
balance between supply and de¬ be located in the firm's Empire
mand
for new, ; low-cost houses StateKkuilding office in New York
cess.

In

some

also has been

areas,,

the

reached, and by the City.

■

.

20

(860)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

far-reaching

U. S. Musi Help "Free Nations"—Says Truman
(Continued from first page)
cations.
and,

try

it

prize

live

to

to you

means

At

shall

I

,

to

up

and to

the world.

Ships lay idle in har¬

bors.

Surplus crops rotted in the
fields.
Unemployment grew and
hunger became widespread.
V
In
every
country there;; were

highly,
what it

me.

the

Legion convention last
hundred
year, I talked to you about your

thousands

of

of

young

world peace based on freedom and

without jobs and
without hope for the future. Many

justice.

achieve

to

know

people became the
prey of unscrupulous demagogues.
They joined the Black Shirts of
Italy and the Storm Troopers of

Last week at Miami, before an¬

They were the tools
of the Japanese militarists.
In the

Today, I

going to talk

am

to you

again about peace, because
I think that is the most important

thing in the world,
with me.

I

and

Germany.

you agree

end they marched to war under
veterans, I
discussed
our
efforts to protect the bloody banners of those dic¬
nations against aggression and to tatorships.
Before the end of World War
preserve
the
principles
of the
other

convention

United
our

and

of

Nations.

I

talked

about

collective security agreements
the
necessity of providing

military aid to other countries to

.

those agreements.
Today, I would like to talk
about another equally important
support

aspect

,

of

efforts

our

achieve

to

lasting peace—that is,

a

ternational economic
of

misunderstanding

economic

our

in¬

our

resolved

we

that

tional economic
led to

We

and misin¬
international

policy. Some .of this is

interna¬

chaos which

had

again.

occur

Economic

World,

joined with other nations to
world.

international

The

the

world

face

greater

ones

ever faced before.
They are suf¬
fering from the terrible after-ef¬

fects of the war, which caused
almost! complete
breakdown

an

export of

after

the

economic

economic

life

the

of

can

well

as

Still

further

their

all

over

independence,

the

world

and fpr a great¬

We

have

these

working for world economic
Soviet

The

Union

bring.

Added to these two prob¬
lems there is a third.
That is the

attempt of organized Communism
to

achieve economic and

domination

of

political

the world

through

the misuse of the desires and

as¬

and

joining.

piration of mankind.

Union

These problems require the
combined efforts of the free na¬
tions.

Together,

must

we

distress

If

repair

the results
would have been disastrous.
Once

We

We

again the streets of Europe would

an

must

forward to establish

go

expanding world

which
to

economy

desire
better life:

a

demonstrate

that

work

hungry

free¬

women.

We must

the

economic

system of the free nations is bet¬
ter

than

the

system

Commu¬

of

are determined
to avoid the mistakes of the past.
The roots of the present economic

world

After

war.

nations
mistake

of
of

back

go

the

the

to
that

filled

crowds

hopeless

and

Once

agitators

these

with

a

angry

would

have

millions

to

belief in the future.

that

narrow

and

way

country, working for its
own selfish
interest, tried to get
the best of the others.
Each na¬
tion erected trade barriers to

democratic

used

create

'

our

•

did

not

and

These policies were self-defeat¬

ing.

They

tional

nor

achieved neither na¬
international prosper¬

ity.
on

has

Instead, they helped to bring
the worst depression the world
ever seen.

Factories

closed

down




all

over

sources

in¬

increasing
invest¬

nations

and the

to

help
under-developed

in

methods.

By

this

and
.*

•

v

a

a.V.,

♦

we

reciprocal

other

trade

trade.

agree¬

that

they

at

help

must

the

our

increase

we

are

same

maintain

to

markets abroad for
We

These

to buy more

us

nations

ing abroad if

prod¬

our

buy¬

to achieve

a

Furthermore, we are encourag¬
ing closer" regional ties among
nations

barriers

free

order

and

to

the

The

re¬

to-

to

lower

nations

of
our

discuss

world

We

United
soon

of

some

look

trade.

be

these

these

upon

discussions among friends

affect

all

econom¬

ic

union.-; Already, through
organization for European

the
eco¬

nomic
gun

cooperation, they have be¬
to make joint decisions that

affect

|

icies.
now

free

nations

The people of this country are
aware of what the war meant

solve

the

confront

basis of these

prin¬

of

the

difficulties

them.

On

the

principles, they

can

expanding world economy.
There is

one more thing for
Us,
Americans, to remember. Our
country -is the most important
economic unit in the world
today.
The,future of the world.depends
upon the continuation of our own
as

economic
ment:

and

national

our

raise

to

growth

develop¬

If

crease

well
to

Great

stresses

Britain

and

and

strains

income,

standards

our

of

and

living,

the solution of international eco¬
nomic problems will be far less

of

difficulty

the

;

>

in

recent

The representa¬

years.

;

here

a

warm

personal

Canada,

nations,

as

problems

their

basic

to

the

to

claims

in

of

those

selfish

economic

interests,

here and

abroad, that would turn
us
against the cause of interna¬
tional co-operation. We contribute
to peace when we ask for divine

a{£»

our

with

daily lives
in our
thinking. We con¬

our

our

peace when we work
prosperity and growth of
We. contribute
peace
when
we
reject the

for

In our*discussions with the
rep¬
resentatives of the: United. King¬
and

in

in

peaceful

contribute to that

can

the United States.

liness and helpfulness.

proach* to

We

tribute

come
and
may
be assured that
these mutual problems will be ex¬
amined by us in a spirit of friend¬

dom

world.

jobs,

wel¬

resp'onfsi-

one of,us has a
in
building
a

cause

tives of the United Kingdom will
find

Eyery

which

have
been laid upon the British people

other

must keep

we

basic

mankind

of

nations

to

establish

the

of

pol-

In the Council of Europe,
meeting at Strasbourg, more

under¬

world.

based.

first

principle which we
clearly understand is that

should

ber

and

rates of interest

July SavingsBanks
Deposits Show Rise

and

Of $40 Million

the

During July deposits of the 530
savings banks of the

value of currencies. ^ But, behind
all these, lie the great

mutual

of

objectives

satisfying

spiritual

material

of

and

nation showed

mankind

the

needs

and

000, to reach

rise of $40,000,-

a

total of $18,988,-

a

000,000 on
Aug. 1, Henry

preserving democratic freedom.
•

Not Engaged In Charitable

S.

Kingman,
President, Na¬

Enterprise

tional

second

principle which
clearly understood is
that we are trying to expand the
exchange of goods and services
among nations.
Sound and pros¬
relations

perous

rest

upon

and

services

We

tual

Farmers
M

of goods
business basis

a

Bank,

not engaged in a chari¬
enterprise.
We
are
not
looking
for
trick
solutions
to
deep-seated problems.

a

25.

Henry

can

cannot throw in

walk
any

of

out

the

The

path
an

of

mutual

easy

nomic interests of nations

easily reconciled.
get all it wants.

No
But

there

in

posing to

interfere with

other's internal politics.
very
some

well

not

how

we

one

we

The gain

of

than

home.

In the same way, nations have dif¬

ferent business practices and

dif¬

greater

amounts de¬

policy

during

by

$62,000,000

than

an¬

We know
if

at

before.
deposits,

featured

bringing

total

a

in mortgage loans,

holdings

was
same

the

preceding

corporate

i ties

and

rose
_

:

more

preceding eighteen

than

for

to

in June,

As

months, the gain
that

July

further net gain

$6,000,000,000.

but unlike the

would feel

use

Nov.,

however,

was

how to vote. We recognize that
each nation has its own political

those

2.51%, in the same
For each month
1948 (except

or

posited.

foreign nation tried to tell

from

those

year.

with

regular

rather

us

gans

exceed

reflects

pro¬

problems and that it uses different
political labels and different slo¬

seven

totaling $588,000,3.20%, as compared with

far

both in July and this year to date,
lessened withdrawals

no

Foreign

are

in

- •••■■

•

in

The fourth principle is that the

nations

gain

loss of

a

month the year

not

Internal Policy

democratic

with

ago,

Portfolio

Interference

The

Aug.

Feb., 1949) the increase has been
greater than that for the same

other way to the solution of our
difficulties than the way of mu¬
tual concession and co-operation.
No

-

1949

year

starting

can

is

re¬

,

in

a

000, or
$446,000,000,

ef¬

are

year.

period last

eco¬

group

Kingman

Deposit gains for the first

adjust¬

The

one.

s

on

of

Nor

combined economic

fort is not

cs

months

other nation afford to do

ment and

S.

July last

hand

our

game.

i

Minne-

1 i

$5,000,000

.

keep everlastingly, at it.
There are times, no doubt, when
we .shall become
impatient or an¬
noyed by delays.; and obstacles.
we

we

and

a n

compares

principle is; that we
cannot succeed in creating a sound
and
expanding world
economy

and

p o

ported

The third

But

h

e c

Savings

are

unless

and

President,

the exchange
on

Savings

Banks

nations

among

Asso¬

ciation of Mu¬

be

trade

Europe, under
aid, are work¬

ing toward closer ties of

accom¬

nations

of

of us, anid in the solution of which
we all have a common interest.

increase production.

the stimulus of

have

means

in

Working Toward Economic Union

us.

supplies of raw materials. * They
have industrious and skillful
popThe

planning

international

ucts.

the
can

table

must continue
well established policy of ne¬

new

plish this task.
Together, they
have most of the industrial
capa¬
city of the world. They have vast

ulations.

also

addition,

time

expand¬

that now confronts

out

problems which

should

learn modern industrial and

from

overcome

Each nation tried to dump its own

free

same

balanced world trade.

sound

as

about

The

such

agreements enable

danger of immediate postwar
but we have not yet

The

talks

so.

to

collapse,

the

to

with

urgent prob¬
of the present

state

problems.

ments in order to reduce barriers

They know
is the

out the products of other nations.

products in foreign markets.

in

Through

gotiating

ing world economy that is neces¬
sary
for lasting prosperity and
peace. This larger task is the one

keep

con¬

productive

abroad

people

In

of hope.

achieved

make

•y

way

The free nations have

the

s

Each

the

the

economy
balanced world trade.

result,
production
has
risen
greatly in Europe. Men and wo¬
men there have jobs and food and

the

At

expanding world

unscrupu¬

a

the

will

means, they will be able -to make
an
increased contribution to an

this happen,
We went ahead
with our recovery programs.
As

war,

here

moving ahead with

agricultural

of

men' and

again,

tyranny and slavery.
But the free
nations,

made

world

following

first

short-sighted policies of economic
nationalism.

lous

We

years.

to

are

areas

let

nism: /
The free nations

problems

been

for

their

dom and

have

can

everywhere

men

satisfy

in

the

efforts,

our

ahead

the

and

Representatives
of
the
Kingdom and Canada will

The

they so .desperately need.

had been discouraged by
difficulties and had aban¬

these

raise

encouraging American

are

volume.

we

doned

develop

and

ments, foreign countries, particu¬
larly under-developed areas, will
be able to obtain the equipment

at

the damage of war, complete the
restoration
of
the
economy
of
Europe, and revive world trade.

immediately

arising

in

concerned

special

unbalanced

measures. >. ■;

vestments

prolonging
suffering of the

and

,

are

business

free nations.

aimed

was

ciples,

:

.

On the basis of these four

standing and good will among the

Wants U. S. Investment Abroad

every hand, there was evidence
that
the
policy of the Soviet
the

we

We

living of all their citizens..

ciples upon which the economic
policy-* of free nations must be

short-range and
plans
for
meeting

three

.

mocracy, coupled with a common
desire to improve the standard of

guidance and help for the efforts

both

long-range

Its aggressive foreign
policy created alarms and fears
that hampered recovery.
On

na¬

clearly in
underlying prin¬

European Recovery Pro¬
our principal means of

as

time,

its satellites from

prevented

free

as

adherence to de¬

can

we

to

are

difficulties.

next

er share of the good
things of life hostile to European economic co¬
It refused to joint in
.-Which only a restored and ex¬ operation.
panding "economic system can the European Recovery Program,

together
firm

a

mind the

meeting emergency needs for the

re¬

was

tions—is

and

many

only

resources

long-range
were

them

achieve their goal of a sound and

be

.

a
sound
and
eign
expanding world
things far exceeds their present economy is essential to world
International economic
capacity to pay for them. As a peace..
result, world trade is now seri¬ discussions revolve around such
prosaic things as tobacco and rub¬
ously out of balance.

| in Soviet Union would not join
the
covery.

diffi¬

urgent demand which for¬
countries
have
for
these

gram

for

lems

standards of living.

own

The

tinue the

mand.of men

own.

equipment

they

if

European industry and of world, created when it became clear that

rising de-

In¬

serious

which

own

trade.

There is also the

need

machinery,

than

difficulties

our

most

Furthermore,

countries

had expected.

anyone

as

the

of

amounts.

world

badly disrupted

more

isolationism.

must take every action
to bring about more trade,

we

their

insist—and this is what

can

binds

.

cannot, therefore, fall back

we face is the fact that, at
present, foreign nations need to
buy more things from us than we
need to
buy from them.
They
have called upon us for food and
raw
materials in unprecedented

ended,

war

products were

our

they

world

certain

our

na¬

insist on uniformity
in matters ,of politics or business.
The
only uniformity on which

which

months

ma¬

trade,

industries would
suffer. Without foreign trade, fpr
example, it would be difficult, if
of

many

supply,

was

raw

foreign

community of democratic

tions cannot

shall

We

Without

terials.

these

for

economic ends.

same

develop¬

every

depend
countries for many

foreign

upon

with

A

devices

governmental

achieving the

and turn
to
advantage
possible resource.

ments,

States

vital minerals and other

ahead

go

heed to be alert to, new

na¬

culties

good

were

Shortly

own

the European
greater unity.

achieve

we

security.

United

the

One

however, it became apparent that

of

in

tries

war.

.

We

we

fering and repair the damage of

the

only to the cause
but also to our
prosperity
and

expanding markets, and growth
and development in other coun¬

ended, we made billions of
dollars, available to relieve suf¬

:

new
problems
than they have

vital,
of world

peace,
tional

stead,

'

of

not

world economy is

a

aid

to

can

to

ferent

means

long-range measures for a stable
and growing world
economy, we
shall have to adjust our .actions
to changing conditions.
We shall

Prosperity

Involved
Such

into

mone¬

beginnings.
Never before in history had na¬
Nations Face New Problems
■" tions, made
such careful, longIn working
for prosperity in range plans for a better economic
the post-war world, the nations future. '.

—and

National

Own

We

war

These

this country is trying to do.

As

cut off.

pre¬

economic

will be easier to understand what

Our

union

The United States will do

it

nations

tional economy.

peaceful economic

up

prosperity is necessary to our own
prosperity in the United States.
If these facts are kept in mind, it
■,

panding

the

problems are ganization the United States out¬
undoubtedly complex. But their lined a method for breaking down
importance to us is very clear. the trade, b a r r i e r s which had
World prosperity is necessary to strangled world commerce in the
world peace.
Furthermore, world period between the wars. As the
World

what

to sell many things abroad.
cottOri, our wheat, and our
tobacco, for example, must have
foreign markets. Our prosperity
would
be
seriously damaged if

by certain tary fund was set up to deal with
newspapers and politicians for po¬ exchange and monetary problems
litical reasons. Some of it is due to among nations.
The International
the fact that the economic prob¬ Bank was established to provide
lems of the world seem to be dis¬ investment capital for reconstruc¬
tion and development.
tant from our
In our
daily lives and hard
proposals for a world trade or¬
to understand.

deliberately stirred

world.

into a continually ex¬
and productive interna¬

together

need

Consequently, the United States
a

is

What

Our

U. S. Joins in Promoting Peaceful

for

formankind.

is to draw these elements

needed

economic

difficult period of transition for
countries that enter into it,
but it is essential for
a
better

the

better way

a

Euro¬

being considered.

are

a

mc

impossible, for us to develop
atomic
energy.
Moreover,
we

dog eat dog.

pare

Closer

of

measures

unions

pean

not

that

knew

permanent peace
could not exist if the nations of
the world resumed the policy of

good deal

a

the

should not

war

policy.

I find that there is

formation about

.

II

life

of

ail

provide

necessary to

of these young

efforts

government's

men and women

have

getner

Thursday, September 1, 1949

the

year.

again less
month

Holdings

municipal

$44,000,000

but

of

of

securiU.

S.

Government obligations fell $14,-

000,000 and cash $34,000,000.

THE

Number :4834

Volume 170

COMMERCIAL

&

FINANCIAL

CHRONICLE

(861)

that export markets for 8 to 12%

laiifrAmerican Dollar Shortage
(Continued from page 2)

in

already

ourselves.

to

neighboring

export

England, however,

natural

a

position

a

outlet

for

was

Argentina's

country,

to

of

box.

oil,

300,000

tons of tinplate,
100,000 tons of iron and steel, as
well as textiles, motor cars, films
and
other goods.
All of these
import items would just as well
have been available here, but the
lack of dollars in Argentina has

to

their

and

position in Eu¬ The writer is reminded
is difficult to find an bitter words of a Brazilian

empty safe deposit
There is

post office

or

constant

a

flow of

who

facturer

nation:

remarked

"We

used

to

of

the

manu¬

in

resig¬
Brazil

say:

traffic between Buenos Aires and

is the country of the future. Now

Montevideo

we

the

At

by

same

managing

air and boat.
time, Uruguay

official

its

rates very judiciously.
and

censes

made

are

currency

rata

to

Brazil is and remains the

say:

is country

exchange
Import li¬
allotments
the funds

of

the future."

Developing

the

,

Backward

'

Nations
The vast empty spaces of

fertile
beckoning to the overabroad at the moment. If all coun¬ populated
European
continent.
exclusive features of the trade
tries adopt a similar program Of The transfer of the surplus people
convention to which the United
husbanding their resources, the would solve some of the problems
States
Government
has
right¬ first
step toward stability would of Europe and Latin America as
fully objected, we must concede
have been taken. Instead,Brazil, for well. It, would help the underde¬
that it was a logical and comple¬
example, has been giving import veloped areas and probably im¬
mentary arrangement for both
licenses without having sufficient prove the native stock. Such proj¬
countries.
How could we have
dollars on hand at that time, and ects call for huge expenditures
provided the necessary coin
payments for imports meet with which can only be provided for
for Argentina to pay unless we
at the highest level, the United
loaned her the funds or bought delays of many months to more
than
a
year,
depending on the Nations. Yet, they could be made
her

lost

the

us

Aside

business.

from

which

the

restrictive

which

products

need

neither

we

If pesos and pound
sterling were
freely convertible into U. S. dol¬
lars, we would have a chance to

instead jOf watching our

compete

export trade slip away to England.
At

this

point,
we
take note

dentally

Latin Americans

are

inci¬

may

that

many

bitterly

com-

plaining about sharp practices, of
some of our

actually

are

and

want?

nor

pro

exporters, about stiff

payment conditions and fre¬

available

Americans

are

not popular

in~the southern countries.
regarded

arrogant and

policy

We

inconsiderate

as

are

and

good-neighborsuspected for ulterior

is

our

motives.

British

has

steel

inroads into

been

into

which

the

im¬

into consideration.

markets in Bra¬

our

in

other

places

because

that

country has a number of products
which we can use, of course, fore¬
most

coffee.

However, English
steel mills have quoted more fa¬
credit

vorable

terms

than

ours

have and have thus taken orders

The British Islesf,

away from us.

although
sources,

poor
of natural
re¬
to have an edge on

seem

because

us

we

are

cient.

self-suffi¬

so

-

confidence in the local money

no

J
In

the

old story of
the
kids
who
were
playing
marbles until one of them had
won them all and the rest could
same

no longer.
Of course, the
United States is compared to the

villainous fellow who took all the
arbles

and who ought to

away

the other children have them

that the game could go
on. YAnd my obvious retort was
that] it would not take very long

ba^k

so

we

would have the same situ¬

again.

over

seems

only JLatin America, but Eu-

can

sudden

flights of capital need

and

confusion.

,

,

But

,

.

.

„

the hat is so

full of holes that the rabbit has
the
fallen through long ago
.
(Per¬
months,
haps we should take the gun away
practically every currency of
from Uncle Joe.)
Latin America has fallen against

be

feared

the

dollar

could

nor

equilibrium.

In

in

upset

.

recent

the

free

or

black

States

a

century ago,
can be

perhaps greater than

found here today due to our re¬
strictive
and
confiscatory tax¬
ation.

they could

investors
selves

use.

But if

any

industries set them¬

or

to

up

fill

compositions differ widely.

trolled

These

as

are

more

the

or

less

official

change rates.

un¬

ex¬

Investment

.

The solution must be found the

Opportunity

for

American Venture Capital

ing their foreign obligations—be

customers.

But

they ~comMSWiai credits,

qz

pew

and old
of

the

of

Says Business Must Educate Public
laiili'Ji Financing Danger

Aug.

19.

by keeping
under

sources

control

foreign re¬
instead

of

.

.

.

out

ed

mat
p

is

Deficit

American

corporations

the

lenged today to stand as
for

vation

the
have

ventures
raw

can

American

system.

replace private man¬

to

invaded

agement in this position as trus¬

American

tee, and one of the great chal¬
lenges is this—can we in manage¬

be

can

and

Wallace

F.

Bennett

com¬

take

more

interest

in

our

local

be used

tions.

As parents, we need to pay

attention

demonstrate

ment

school
districts
and
give more
Opportunities for
personal service on school boards
abound, particularly
and
in
pa rent-teachers
associa¬

materials

the

of

ernment

Latin America.
new

trustee

consumer,

Some forces in America want gov¬

manufactured brands, dilute it with foreign economic
Colgate's palmolive soap, philosophy.
Kolynos dental cream, Johnson &
"There is great need today for
Johnson medical supplies, nylon
teachers to understand and trust
stockings, famous names of canned the traditional American philoso¬
goods, breakfast cereals, etc. The
phy," Mr. Bennett continued.
influence of our industry extends "Here management has great and
from skyScrapers to soda fountains
immediate responsibility.
and
bathtubs, and many U. S.
"As
individuals, we 'need to
firms
have
profitable

if local

the

the investor,
and the employee in the preser¬

as

operating

taUght.

"Bus'ness management is chal¬

locally

manufacturing subsidiaries in

ability of

matter

bated only by education.
"These
their output in philosophies," he added
"have
Latin America.
Coca Cola reigns succeeded in confusing many per¬
supreme
all over the southern sons so that there is evidence that
continent, to cite one of the most many today are willing to turn
catching examples of advertising from the American concept of
magic. And you find a multitude free enterprise and to alter it or

and

depend upon

a single individual
to receive and react to the subject

produce and sell

of

.

and its success must

other

of

•

only be done in small groups,

can

eriali^tic

parts

■.

groups of employees, Mr.
Bennett said: "After all, teaching

that

irom

■

small

h i 1 osophies

thinking
Many

hard way

markets,

on

'"v.

<»

/:

The

Conference

have built plants and successfully

to

the

our

ability to

such a disinterested respon¬
sibility and therefore our right to
carry

trustee?

the

be

«v

"In modern economic processes,

must occupy the
position of a trustee of
many vital factors in the produc¬
tion-consumption
cycle,
all of
which seek a fair share of Us
benefits.
To be successful, the
manager must stand in a disinter¬
ested position to all thesei
For
the consumer, he must operate his
business to provide the best goods
or service at the lowest price.
As
a trustee for the investor, he seeks
to operate the business in sudb a
way as to return a fair proiit,
commensurate with the investor's
management

unique

Representing the employee,
responsibility for see¬

risk.

he has the

textbooks

ing that the business provides a
compensation to the men and
"The duty of business execu¬ women who work for it.
does
not
"To me that phrase 'a balanced
stop
with
the
the right to transfer income and tives
school's educational facilities. economy'
indicates management
part of the invested capital in an¬
nual instalments out of the re¬ Managers of business enterprises operating at its best as such a
trustee.
spective countries. Such was the need to develop definite programs
their
own
organizations
to
basis for Sears Roebuck & Co. to in
"How can we earn and demon¬

Even where the black markets squandering them as has frequent¬
are
strictly prohibited, little is ly happened in the immediate
postwar
years.
We
have seen
actually done
to
suppress
or
tanks and tractors rusting away enter the Brazilian market with
eliminate them.
On one hand,
uselessly for which (plus com¬ stores in Rio de Janeiro and Sao
numerous persons benefit directly
mission) good dollars had been Paulo.
or indirectly from their existence
wasted
Measured by North American
—up to highly placed individuals
if rumork can be believed.
Once
the
local
situation
is standards, the markets for all in¬
On the
other hand, the clandestine deal¬ brought into balance, regional in¬ dustrial goods are painfully small.
ers constitute a necessary safety
terchange of trade must be pro¬ When my Latin American friends
valve for the sudden shifting of moted within the 'hemisphere. The would warn me that we were fast
funds
which
even
the strictest best example for such a scheme losing our export outlets, I had to
controls could
not
prevent en¬ has been set by the Benelux na¬ cite some of our production fig¬
tirely.
Uruguay has recognized tions in Western Europe who are ures to demonstrate that the cur¬
this situation
and
tolerates the enjoying an enviable prosperity. rent business setback is cutting a
"free market" which is not so To do a similar job in Latin Amer¬ much bigger slice from our overall
much influenced by local devel¬ ica,
it is urgently necessary to production than the total export
opments as by the switching of build roads and highways, improve trade to the rest of the globe could
railroads and ports, better sanitary ever absorb. Of course, we realize
large funds from and into its big




our

private loans. The sense"
responsibility toward foreign
cause foreign trade for them con¬
creditors is high—much higher
stitutes a major portion of their than our
merchants, financiers and
national economy, and in many investors realize. For
instance, in
countries, export and import levies Brazil, foreign traders must de¬
provide a sizable share of govern¬ posit the full countervalue of their
ment
revenues.'
Therefore, they imports in local currency pending
are inclined to rely on us-rather
allocation of exchange, and fre¬
than on themselves to remedy the
quently, they borrow dollars at
dollar shortage.
high interest rates during the long
It has been
pointed out that waiting period to anticipate pay¬
large hoards of private dollar and ment to the American exporters.
gold holdings could be mobilized In extending such credits, interest
to bridge the gap. However, ex¬
ranges up 12% per annum, and
perience in Europe has shown that -more. Lenders of such dollars
refugee capital cannot be enticed have made satisfactory experi¬
or forced
to come home in, any
ences as long as they used respon¬
worthwhile proportion,
even
in sible local brokers and bankers as
the face of great local money intermediaries.
If properly han¬
stringencies. It is only a matter of dled,
American
capitalists can
restoring confidence, and even make very attractive financing
then, if the attitude of the French deals, fully protected by adequate
peasant can b e any guide, the bulk collateral. Many millions of dol¬

world

by each nation for itself in the process. However, under
official rates are the true gauges —by buying no more than can be existing exchange regulations, it
of confidence in a country's paid for out of exports, by selling is necessary to make special ar¬
money because they are not con¬ at competitive prices in the world rangements in advance to insure

markets.

States

It sounds grand to plan for de¬
/
Business management must help educate the American people
veloping the backward nations and
to the dangers of governmental deficit financing, Wallace F. Bennett,
calculate the number of housing
President of the National Association of Manufacturers, told the 23rd
units, motor cars, refrigerators or
Western Regional Trust Conference at Salt Lake City, Utah, on
radios

such

that the whole world—

.

no

United

and

play

not

long

to

are

everywhere
professed their anxiety for meet¬

United

1

a

run, free compe¬
rope. Africa, and Asia as well—are
only be restored in the
waiting for Hhe United States to
world
if ?11
currencies become
readily convertible externally and pull the rabbit of world trade and
remain stable internally so that prosperity out of the hat of chaos

tition

s e

spent

again the

and

It

Problem?

are

day passed by in the 12 habits and ambitions of the va¬
in Brazil, Uruguay, rious classes within each
county
Argentina, Chile and Peru, with¬ and among the various countries
out the writer being told again themselves whose ethnological
weeks

ation all

Currencies Solve the

they

to the

the gaps, they
sponsored by
will quickly find out that one
the American
tional
budgets
are
unbalanced cannot
jump in one great leap
and the creeping inflations con¬
Bankers Asso¬
from the oxcart stage to that of
ciation.
tinue in their course.
the
airplane
without
passing
'In his adEverybody is looking to Uncle through some intermediary devel¬
dress,
Mr.
Sam to cure the situation by loans
opments. There are great social
Bennett point¬
or
aid under some other name. and cultural contrasts between the

till

Would Convertibility of
•

lands

the

Practically everywhere there is

making Hardly

zil where the dollar problem may
even be a little less
pressing than

as

almost

smaller hoards will never lars are
already thus engaged.
f-liquidating.
Any halfway come out of hiding. Furthermore,
A similar sense of responsibility
ported
merchandise
falls.
To measures through loans, grants or the chances for a return of con¬ has been observed with
regard to
cite another case, Chile had based private investments of American fidence in local currencies are tied
external debt service, and up to
its foreign exchange budget for capital could not be
big enough to in with balancing national budgets now, the present payment plans
1949 on last year's copper price solve the fundamental
problems of and rebuilding faith in the stabil¬ have been faithfull observed. Un¬
and tax revenue, and when that Latin
America, except for tempo¬ ity and integrity of governments. less conditions become much more
At present, we are further away
commodity dropped by about one- rary relief.
serious, there seems to be little
from that' point than in a long
third, the entire economy was
There is no doubt that great op¬
time.
thrown out of balance because
;? danger of default on the outstand¬
portunities exist today, probably
nobody had taken this eventuality similar to those which existed in
Businessmen, bankers and gov¬ ing dollar bonds.
classification

quently inferior merchandise, par¬ and
people are all the time con¬
ticularly during the recent period
verting cash into tangible assets—
of shortages.
Do we really think, real
estate, cattle, gold, green¬
they ask, that anything is good
backs—anything but bank der
enough for them?
Do we ' not
posits.
In consequence, interest
realize that the standards of the
rates
are
high, varying
from
consuming public are the same
country to country more or less
the world over and that we jeop¬
according to the availability of
ardize our reputation and future
credit or the urgency of the flight
business relationship?
Altogether, of
capital.... In addition, most na¬
North

essential

ernment officials have

are

product

natural wealth the latter have a tendency to over¬
the flow of people and trade. rate tMf impot^Z&e to us be¬

teriors

Switzerland's

rope, and it

as

Argentina.] C6!5diti01>a, and open up the in-

Montevideo has become the haven
for much refugee capital, similar

and
in return, Great
Britain will ship 5.7 million tons

surpluses,

of our national

2i

more

our

children

are

studying.

5

"

bring teachers into active contact
with practical business through
summer, employment,
through
plant visits, and through other
programs. 1
^

a

"All

this, however, is to affect
future generation, and the de¬

cision before

us now

will be made

and women of voting age.
The fundamental problem is the
by

men

of teaching the truth
about the American economic sys¬
tem to the men and women who

problem

work for us."

Urging that plant supervisors be
trained to explain the facts to

fair

strate

our

we

the

right to spiritual lead¬

I think we can do it

ership?

plants, in the businesses

factories under our
that

if

provide definite proof m

can

and

management,

thig is indeed a land of free¬
acquire spir¬

dom where men can
itual satisfactions.
"After all,
for our

it in

,

freedom cannot ?xist

employees unless they find

our

plants.

be enjoyed

shared."

Freedom cannot

selfishly.

It must be

22

THE

(862)

COMMERCIAL

&

FINANCIAL

that somehow it

:/// As We :See;It#ggi
(Continued from first page)

dollars,
can

not fail

to

this

of

:

serving himself

hence

folly. It is about
produce

Hemisphere.

"Surpluses"

or

with

not sell all of it.

It is clear

relatively limited

are

destruction

of

war

has

intervened, because the

the world either does not

care

too much for

economic rope

our

asserted in

so

words that

many

is necessary to create
is able to

produce if
Of

absorb

rest of

now

investments, which is now limited rience only, and
by opportunity than by any¬ clearly indicates that

thing

we must do whatever

well-publicized notion

should

was

this

attitude which

we

combined

in

a

trust

a

trust,

the

risk

of

these

classes

changes.

as

of

rela¬

a

common

desirable, with

ticular consideration

of

Certainly

policy that regards
tively fixed percentage of

stocks

no

par¬

changing

conditions

and
market
levels,
commands little confidence.' While
the trustee should not adopt a

components

are:

led to the

had "reached

maturity," or some¬
thing of the sort, and henceforth equitable distribution of

(2) Long
assets,

such

-

sucn

term, fixed income
bonds, mortgages,

as

and

business uncertainties than there
is between Union Carbide stock
and
a
bond
of
good
quality.

preferred stocks which add
goods as were produced was the paramount problem
the interest
it mi g h t well
rate
be
risk and pre¬ Therefore,
day and of the future. If goods were to be
perennially sumably some credit risk to the reasonable and proper to hold a
produced at a greater rate than would or could be absorbed
somewhat
larger proportion of
purchasing power risk.
there was no way to
equities where the
component
prevent price cutting and wage reduc¬
(3) Equities, which carry the

of the

tion—which in those days were termed
solution

was

sought in forced curtailment

risks

some

of

production.
again the talk of the day is turning to
disposi¬
goods we produce which, so it is
apparently be¬

Now
tion of

can

•

a

.

be

obtained

over

a

period

of

personal

opinion as to what the
proportion in each of these three

foreigners

Some trustees have

tendency

inflexible

foreign buyer

unimportant—except that

as

he buy the
on our hands. No one

change for them.

are

able and

willing to deliver

From the words of

some

of

in

those

to

who

might be supposed that work and the
goods were ends -and aims in
themselves,
special virtue resided in the

production of
that

some

process of

no

it would

one

wants

appear

into

a

quite

and

are

com¬

better form

a

of

investment than they were 30 or
years ago, and there is some
evidence pointing that way, it is
40

the

to

raise

sights

our

maximum proportion we

tiftder"

favorable

our

conditions.
runs

that the position of scores of

enterprises

stronger

t h a

is

our

materially

two

n

are

funds

Briefly stated, the argument
major

on

three

or

position

than

be

may

larger

common

not

one

so

No

Stereotyped Policy
no

.cy

to our trusts.

Individual circum¬
stances and needs differ
quite ma¬

terially

and

treatment.

justify
In

the

differ 2nt
of

case

<j.ur

trust

own

department, our hold¬
ings of equities, fixed income se¬
curities
and
liquid investmpnt
vary quite materially among our
trusts, based upon such diverse
factors as the form of the initial
acquisition costs, tax

con¬

the

of

trusts, the needs of the benef di¬
aries

the

and
to

be

wishes

the

of

extent

those

that

at

they

properly taken into ac¬
see
nothing inconsis¬

count.

We

tent

in this.
It merely
refkcts
application
of
our
general
policies to many sets of circum¬

the

stances.

t;.(

,

Summarizing, there is justifica¬
tion for increasing our common
stock holdings over past
practice
when the time is right,
policy should be flexible
for the

nature

the

of

but

cur

to allow

trust

itself

and
the average quality of its
assets and for the general position
of the security markets.

Question of Diversification
Our

third

question is

industry
an

investment

as to

policy

diversification by

and by security holdir gs,

accepted principle having, the

stamp
only

of

court

for

reason

approval.

Cur

reviewing it here

is that too many trustees, in mis¬
taken zeal, tend to carry it too far.
It is well to recall that diversifi¬
cation is not a rule for successful

investment.

On the contrary the
majority of our fortunes
were created
by concentration in
very few risks, wirely or fortu¬
nately selected. Diversification is
a defensive policy, and a wise
one,

great

based upon our desire to minimize
the

of

consequences

judgment.

invites

Over

an

mediocre

a

error

in

diversification

-

investment

performance because it dulls dis¬
crimination
cess.

in

the

selective, pro¬
are a few

Moreover, there

trustees

who

diversify quite

chanically in units

and,
mere

industries

me¬

of equal size,

and, tend also quite
include
securities of

rigidly' to

companies
the sake. of

for

balance, with less regard ,for

whether they represent good

cur¬

rent

application

were

of

the result of the

scientific

mathe¬

matical
'

that
i

decades

In the
now with that of rently favorably priced.
The trend Of the long run, this will result in fewer
errors of judgment and the Choice
times, • apd even the policies of
will still be broad enough to jrnake
government, favor large and well30

years

ago.

unchanging stand
by types established enterprises which
In applying policy have the resources to
cope with

to this diversification

their ratios

bringing

being day after day. Somehow
that fate was driving us to
produce, and




research

a

General Motors

unfortu¬

an

take

type of assets held, or the re¬
spective stage in the business and
security market cycles.
Such a
position might be justifiable if

ex¬

argue in this way it

things

in

opportunity. ,It. is, of course,
ago.
These companies
far better to buy somewhatmpre
classes should be, and then to pass are larger, financially stronger,
of what is attractive and toctefer
along. ■ Certain more general con¬ and much more firmly entrenched
For in¬ fcuyibg; seciiritie$
siderations, however, deserve in their various fields.
stance, compare the position of mately. desirable, but not Cur¬
your reflection first.

of security.
goods which supposedly hang
heavy
seems to have
paused to inquire why we should take the they do not differentiate between
their trusts as to
objectives, or the
trouble to produce these
goods if we do not want them or respective quality as well as the

want what

stocks

mon

seasonal

If

willing to include in

nate

the potential

will

years
by following widely
di¬
vergent investment philosophies.
With
such
mixed
counsel, the
temptation is to merely add a

funds loaned him.

However, what happens after

It

ratios should also reflect

changes.

reasonable

Why?
is handed the funds is

condition.

Such

basic

been

or

tant future return the

healthy

items had exceptional quality than
if they were of more
cyclical
types.

time to worry when we all think
alike and act alike.
We all know
that
equally good results have

buy them by the taxpayer
possibly the investor who can
be convinced that the
foreign purchaser will not only
do us the favor of
taking our surplus goods off our hands,
but possibly at some time or other
in the dim and dis¬
States,

to

what percentage of each to
purchase in a trust fund, which is
as

be found who would like to have
these goods and
can be
put in funds to

of the United

business

money

There will always be a wide
divergence of opinion among us

lieved, no one in this country wants/ At the
moment,
at least, it is
political heresy to suggest that the
goods
not be produced in such
quantity that they can not be
disposed of. Indeed in the case of
agriculture, it is polit¬
ical heresy not to
pay farmers to produce. Now the rem¬
edy is to be sought abroad, where it is
hoped that people
who

of

ownership plus
rate risk and pur¬
chasing power risk.

"chiselling." .The

of

Finally,
there
should
be
stereotyped application of pol

Moreover, in determining these
ratios it is proper to look
beyond
the label on the individual securi¬
ties to intrinsic quality.
There is

bank

plowing
slaying of little pigs during the early
days of the New Deal. It was at bottom the
philosophy of
It held that

attractiveness

investment

(1) Short-term obligations and
deposits, carrying the pur¬
chasing power risk, but very little a wider quality gap between the
of the interest rate risk, and pre¬ stock of Union Carbide and that
of some enterprise facing
sumably no other risk.
greater

lost

ever

be

select

must

of

under of cotton and
the NRA.

should

fund, assuming that no provision
requires a special disposition. The trading or speculative policy, it is
three fundamental categories in not speculation to adapt policy to
which investments fall by our prevailing conditions rather than
to follow mere theory.
classification, and from which we

we

really

It

that

captious critic.

The second major
policy ques¬
tion is the proportion in which
these types of investment risk

have here a recrudescence of the
old fear of abundance—that is if we
have
that fear.

iota,

an

situated.

can

experience
the relative

any

Perennial Bugaboo
to us that

trend

a

more

Combining Investment Risks

economic grounds.

seems

else,

please the

about lending technical assistance to "backward
peopled"
throughout the world is defended in this way and must
be defended in this way if it is to be defended
at all on

It

stock

interest

5)

page

more

a

the President's

course,

justified

assets,

And Common Stocks

world beyond our shores which
surplus of goods we are able to
stay out of a collective poor house.

to

investment

on

our

Trust Investment Problems

the

we are

stock

judgment in selection and timing.
Thus the trustee who is in posi¬
tion to put in the
necessary ti ne

our

products
another, reached a stage

(Continued from

a

This detai ed

siderations, the provisions

This type of reasoning, of
course, takes divers
forms. It is heard abroad day after
day, and many times
a
day in certain circles in this country. Someone has
labeled it "the problem of our
surpluses." Others have

us

true

was

general risk factor in the trust by
providing the basis for sharper

as

them) with

own

background

than

two ago.

pub¬

our

supplies

better

particular

any

and the

war

research,

judgment
or

from

for

and

course, but it serves to reduce the

enough that foreign

respect many of

as

both

us,

study does not change the risk in

It is true, obviously, that we often over¬
this or that particular good or service, and

can

to

much

decade

for.

or

goods, we shall come to the end of
within a relatively short period of time.

larger

a

common

past
information now

sources

a

for.

has not, for one reason or
plus" production. hue general tenor of the reasoning is to
of productivity which would enable it to take
the effect that if we, tne people of this
these
country, are not
goods off our hands.
generous in the distribution of our dollars throughout the
world in one way or another or in one form or another, we
It is, of course, obvious that our
production capacity
ourselves can not hope to continue long to
prosper. We make exceeds immediate and compelling need, but let us be thank¬
no reference at this
point to tariff and other barriers which ful, for only in such circumstances could we as a
people
we of this
country are often insistent upon erecting. There put aside something for the
proverbial rainy day. Our
is a substantial weight of good sense in what is said
salvation certainly does not lie in
against
paying outsiders to buy
them in many if not most instances. We are now
talking our goods, but rather in producing and preparing to produce
about that form of argument which,
stripped to its bare the things that are wanted.
essentials, asserts that unless we give the foreign buyer the

our

justify

selected

the

investment

as

goods—more often than not, except when

But there is another argument which finds
many atten¬
ears in this
country, it concerns markets for our "sur¬

available
lished

silly to assert that we do or can
of everything under the sun than we have

more

any use

markets

buy

to

as

well

Further,

his fellowmen by producing
goods or service no one wants or is able to pay for. It
is foolish, however, to suppose that government fiat is
necessary to prevent businessmen from committing this
way

the shores of the Western

which to

for

conservative investment programs
that was acceptable in the

any

produce

repay

the economic well-being

nation

stocks, representing ownership/in

possibly of other coun¬
tries, leaving the United States of America to fight the
good fight against Russian imperialism alone. We are
too. aware, as we are sure others are, of the fact that
these other countries could not possibly avoid being
swallowed up long before the Russian legions reached

funds (or lend them to him without much consideration
to whether he either can or will ever

to

our

and thq older idea of arbitrary restriction of
production!
It is economic absurdity to imply that any one is in

desertion of Great Britain and

tive

basic

some escape

place

country. We are not now referring to that ever recur¬
ring threat of "three worlds"—or, in plainer words, the

Those

find

oi this production.

What unutterable nonsense, both this new notion

/ •
eliminating,

have very serious consequences in

Thursday, September 1, 1949

incumbent upon us to

was

from the consequence

-

to do most of the

at the least

or

CHRONICLE

principles, but we know
they represent a mere con-

vention backed

at

best

by

expe¬

the

obstacles

risks

of

There

and

absorb

the

doing business today.
offsetting factors, of

are

course,

such

higher

break

reason

to

of

higher
taxes,
even
points
by

as
-

greater

raw

material

and wage costs, and the effects of
government

interference

nomics,

of the

a

and

welfare state."

On

trend

in

eco-^

toward

balance, how¬

ever.
it appears that established
business enterprise has become so

a

satisfactory degree of diversifi¬

cation

not

at

all

achieve.
Let
of

difficult, to

consider next the

us

policy
emphasizing marketability as a

major attribute for
ment.

A

prized and for
of

course,

a

trust invest¬

ready market is to- be
-

an

some purposes

essential,

most of our trusts there is

for

but
no

it is,
for

need

bank type of liquidity,

ft is
enough that our trust holdings
enjoy a reasonable market and
a

that

a

sufficient

proportion

be

Volume

170

Number 4834

readily salable to meet
needs.- The

bringing

out

securities

what

cash

our

on

sound

the

narrow

of

a

local

or

&

FINANCIAL

broadly

nomic and business facts.

Wall Street Journal" of July 28
an
First, while easy carried
interesting dispatch
its
London
Bureau
from
money has failed to stem deflation from
in the past, and will not be the which these extracts offer at least
instrument which accomplishes it food for thought:
/ :
;
'
this time either, political money
"British Government bonds fell

some¬

market.

doctors

the

rest

and

our

portantly, it reduces the fixed tributed to a lack of contidence in
charges on the public debt, par¬ the government's ability to cope
ticularly welcome when the debt with the economic crisis facing the
itself is once more rising. Third,, country.
"
it eliminates the judgment of a
"There are increasing indica¬
free market as to the fiscal poli¬ tions that an internal 'flight from
;he pound' is under way. British
cies * of
the
administration,
a
bloodless type of verdict which businessmen with idle funds in
the politicians are right in fearing. the bank are buying into all sorts
There can be, therefore, no ques¬ of businesses.
When hotels, tav¬
tion that, misguided as an easy erns, theatres
and similar small
businesses are offered
for sale,
money policy has been, we are
once
more
committed to it with they are quickly snapped up.
.
.
all the support of the available
"Retail stores have little trouble

of

penalize ourselves

us

funds

unduly by such a
restrictive policy.
Intrinsic worth
in securities has

ing

itself

funrs

a

way

time,

reliance

more

the

in

would

we

do

in

well

trust

to. put

this and less

on

mechanical prop of

market, which is

on

active

an

feature of first

a

importance to traders
lators. but not

of assert¬

and

one

and

specu¬

which prevents

in

any degree sharp market de¬
clines in periods of adversity.

Perhaps not

companies

a

at

selling

are

reoresenting

prices

total valuation of

only a fraction of

Factors

and Business

Political

cost to duplicate the

Whole industries, such as steel,
policy in pur¬ reflect such a condition. Many
chasing equities should be. We all stocks sell at prices representing
have available to us, however, a an aggregate value of less than
wealth of analyses by qualified funds reinvested in the business
observers which provide the raw within a ten-year period. The im¬
material from which we can draw portant consideration in common
our own policy conclusions.
Per¬ stocks is future earning power and
cal and business factors that bear

on

what

our

current

haps these words of Lord Tenny¬
son serve to describe the national
scene

well

as

"Chaos,

as

cosmos,

certainly

but

dividends,

future

cannot be dis¬
irrelevant to the future.

these current facts

missed

any:

cosmos;

as

for

opportunities

Substantial

chaos,

minimizing equity risks also rest
in the selective process. Except in

once

.

matter of invest¬

eco¬

again the sickening game,
finding private capital for expan • Freedom, free to slay herself, and periods of generally high prices,
the market always offers stocks of
sion because investors prefer to
But our unwillingness to pur¬
dying while they shout her
sions in trust instruments granting chase such securities need not be own part of a business than to
substantial attraction if we can
name."
Hie trustee
but sort them out.
The relative
discretionary power to1 based on any forecast of the money have pounds in the bank.
It might not be
amiss to stress
invade principal to provide for market future; such bonds simply
"Commenting on the slump in
popularity of stocks and of whole
two points favorable to common
the current needs of beneficiaries.
industries rises and falls, and fre¬
provide no present return ade¬ the government bonds, the 'Finan¬ stocks at this time which are
In these times when so few can
cial Times' says: "The 31/2% basis
quently for reasons that prove not
quate for the longer term risks in¬
sometimes overlooked.
The first
accumulate sufficient principal so
well based. If we think for our-^
volved, ' as contrasted with the may well1 become the measure, of has to do with the vital role that
that-families can live through the
selves and are diligent in search¬
flexibility of liquid forms of in¬ the government's credit all along active and
profitable private busi¬
critical years from income alone vestments
If
ing for the key facts, the rewards
or
the income yield the line in a matter of days.
ness plays iri any free spending
such provisions provide a useful,
are
great.
No matter what the
available from the bast common the market continues to move at
welfare state.
A large share of
if not essential, topi.
Our concern stocks. Not" only has the bond: its recent pace, rates of even 4%
general outlook; at is a certainty
government revenue must con¬ that stocks are currently available
herd is that'we should not con¬
market as a whole ;been governed and higher may be seen. A rise of
tinue to come from taxes on cor¬
strue them as absolving the trus¬
with sound future prospects that
by the artificial factors of market this * magnitude in government
porate nrofits/and dividends^ not will out-ride any recession that is
tee "from diligence irt the maxi¬
support for government securities borrowing rates could not fail to to mention the
corporate role in
mum
productive employment of Ind iiriuced easy money, but the produce .adjustments in the inter¬
likely.
The job of the research
such matters as full employment.
his fUhds, as a solution* to our own relationships within the market est rate structure of the country as
man is to try to dig out the sound
It is not too much to say that gov¬
investment difficulties rather than
ones.
In the view of many inves¬
a whole.
.The cheap money, pol¬
diverge from , historic
normal.
ernment credit today rests basi¬
as an emergency medicine kit to
tors of long experience, the secret
Prime corporates sell at narrow icy now stands in jeopardy'."
ment

it,

-

■

a

have

immediate

adverse

what it would
facilities they
We do not have the time today
represent, and these are not un¬
for a detailed examination, even profitable
enterprises but com¬
not lost faith in its sharply yesterday, to their lowest if we were competent to under¬ panies with
established earning
take it. of the many major politi¬ power
Second, and im¬ points of the current slump—at¬
and dividend records.

This may be necessary where vast
funds are being administered, but

effectiveness.

23

(863)

CHRONICLE

in easy money.

investment

score

COMMERCIAL

istration has three political stakes

reason this is worth
is that too often trus¬

up

tees .rule

THE

is

instruments of control.

policy, but closely allied to
the growing use of provi¬

.

Shall we dismiss this by saying cally on its ability, without legal of managing conservative funds,,
limitation, to levy taxes on pro¬
the objective of which is depend¬
can't happen here"?
Or* can
ductive private enterprise. Equi¬
able and adequate income, rests in
it. happen, if we "do not act before
porates
at
relatively
narrow
ties represent ownership of the
trust assets are employed, the less
this selective process rather than
; i
spreads from prime corporates it is too late?
goose that lays the golden eggs.
we nepd' to resort to such emer¬
in
over-concern
with the
im-*
We trustees should leave the
Municipals appear more attractive
The* other point is the consider¬
gency powers and; the greater the but this depends in good part on 2.65% and 2.75% returns on longponderables of the future of gen¬
able. investment value to be found
long-tenn 'protection afforded the tax exemption which* is itself ar¬ term bonds to- banks, insurance
eral business.
in a surprisingly long list of com¬
beneficiaries.
We must not sub¬
Why not then do the best job;
tificial, and the municipal market companies, and others who may mon; stocks at
prevailing prices. of selection we can, and invest ourstitute use of these powers for the
faces larger market supply; and be obliged to purchase them.
If

be Used sparingly, when no other
spreads from comparable govern¬
solution- is possible; It; is axiomatic ment
issues, and lower grgde cor7
that: the-mofe productively the
..

*

'

exefcise of

ment/':-'-

■

-

We

investment judg¬

our

-v

"It

some'
.

weakening of credit stand¬

should not forget that
the Treasury has the power, if
V
Proposed Limit on Stocks as
deficit financing problems make it
3^'Investment >.*'''
necessary, to make its own secu¬
I We, may .now progress to the rities appear relatively, more at¬
tractive in various ways than other
j present application of these policy
J. itiatfers which we have been dis- bonds. Doubtless it would have no
desire to upset other segments of
; •
cussing MTy Pwnf^iew, under jthe
conditions that seem likely to pre¬ the bond market, but the present
vail/ for some time, is that com¬ spread
relationship be t w e eii
ings.

We

you

feel that you must buy such

bonds, then at least select the best.
For our fixed income securities- we

•

■■■

purchase bonds of medium
maturity, bonds with some
but not.tan excessive amount of
credit risk, such as are available
particularly in the railroad field,
and preferred stocks which can be
justified on the: score that the re¬
turn is quite materially higher
classes of bonds fe in" itself a po¬ than can be obtained from bonds
mon stocks might well be allowed
••
r ;
of the same relative statistical
to reach a maximum of 65% under tential risk.
should
term

•,

fiscal policy of the protection and sound real estate
government is the principal factor mortgages if obtainable.
discretionary authority.
The re- bearing on the lqng-term future
(2) Liquid F"nd.<WUndcr pres¬
"maining 35% might .be divided of the bond market let us review ent conditions- liquid funds should
15% in fixed income securities it briefly. In his Farewell Address comprise a refuge for a consider¬
the. most favorable conditions

in

Since

the

trusts of good size and with wide

and* 20%

in liquid funds, classi¬
fying tL S. Savings Bonds in the

1796," George Washington said;
"As a very important source of
The above must strength and security, cherish pub¬
be qualified to this extent, that
lic; credit. One method of pre7
since the degree and duration of
serving it is to use it as sparingly
in

latter category.

the- present

business set-back

foretold with any

not. be

ance,!some

good

portion

can¬

assur¬

possible."

as

cal

wisdom

And what is the fis¬
in these more en¬

the lightened times?
In the past 18
years our Federal Government has

of

stock
maximum, any¬
where from 15% to 25%, should

spent more than

be withheld and

in all but the last two.

corqmon-

ed

,to

liquid

trust fund
50%

in

fixed

temporarily add¬

funds.

Thus

our

..today would be 40 % to

common

income

stocks,

securities

15%

in

35%

and

to 45.% in liquid assets, including
U. S- Savings Bonds.
All of this

strike

may

meat,

and

rather strong
particularly as some¬
you

as

what/ inconsistent' with)
the- observations

to

some

follow.

of
We

in< a periocf of deflation and
receding business, with business
profits tending downward, with

are.

;

the* dollar currently regaining a
little: of

it has received
This latter

situation

ably portion of trust assets that,
under more favorable market

cir¬

return

derwritten
seen>s

to

sfable

or

to

a

government

un¬

policy of easy money
o^fer

assurance

of ,a

rising bond market for

the indefinite future.

The admin¬




available

from

stocks

of

cor¬

equity funds in full if the market
now
offers" such" generous3 yields
and such apparent long-term opv

porations^wittiiderrmnstrated^arni portunity? The
ing capacity and financial strength

This yield is high both in absolute
and

terms

comparison

by

with

securities*

Stock

yields from other

yields fare

so

bond yields

high in relation to

as

to suggest the pos¬

sibility that bonds

are

answer

is that the

current general
and the stage

risks are so many,
of the business cy¬

such, that it seems common

cle is

prudence

It is

events.

follow

to

which

course

a

too high or

a

middle

adapted

be

can

to

premature stage of

the cycle in which to bum all of
low, or possibly a bit our
bridges behind us. Hence, a
earnings are headed
present reserve of liquid securities
downward, and we have seen how for further common stock pur¬
swiftly Ihey can decline on a mod¬ chases.
\':r:V:'3V:rv:.■
erate
downturn
of
sales, com¬
We do not have the opportunity
panies of the type we are dis¬ to
go into the detail that would"
cussing have
paid a relatively
be desirable, but any investment
conservative part of earnings .in
list that would, result from ap¬

stocks

too

of both. While

dividends.
turn

Further, the rate of re¬ plying

stocks

on

could

stand divi¬

would be invested in dend cuts and still make favor¬
long-term bonds and in stocks. able comparisons with' available
While the average rate of return yields 011 other- types of securities.
will necessarily be materially less A stock market boom never ac¬
than we could obtain from long- companied
this
postwar infla¬
term bonds, probably from Vz % ■ tionary business boom, and mar¬
to a full 1% less, we should re¬ ket prices have been quick to re¬
gard this as an insurance premium' flect adverse developments, being
to provide this valuable degree of influenced in this respect by the
flexibility. The precise form that precedent of subsequent defla¬
liquid funds may take depends tions^ in other postwar periods.
somewhat on geography. In New The*result has been a consider¬
England, for instance, savings de¬ able degree of advance anticipa¬
posits* at 2%; can be. used? to \ ah* tion or discounting of any future
sorb a> portion of our money . U. S. business reverses.
savings bonds are, of course, al¬
Our point can best be made by
most
universally used' for this a few illustrations. Consider Gen¬
purpose. There are other forms of eral
Motors
common,
which
earned

the above policy should
present income of above
this while emphasizing
short-term over long-term securi¬

yield

a

4%,

and

ties.

Perhaps it is too lacking in

dynamism to appeal to all of our

critics, hut it gives consideration
to all of the risk elements

that

a

we.'

strikes

havo been discussing, and

flexible balance that can be re¬
in

vised

bolder

in more

or

con¬

the future may

servative terms

as

indicate.

continue to apply

If

we

it with industry and
we

may

obtained
will

over

a

period
to

satisfactory

be

with courage

well hope that'the results

time

of

our

bene¬

$9.72 per share in 1948 of

ficiaries and measure up to high
dividends,
standards of prudent trusteeship.
selling at 61 after just/:ompleting the best quarter in its his¬
tory.
Clearly the market is en¬ To
Acquire NYSE
deavoring to allow for the antici¬
Membership
pated return: of competitive con¬
The New York Stock Exchange
ditions
and
of
narrower
profit
the
margins in the automotive indus¬ on Sept. 8 will consider the trans¬

jts lest value; and with
shortages ended and normal' com¬
petition
returning.
Is
it
not
clearly, then, a time. for invest¬ ing of the credit structure to the investments while avoiding
ment caution?
Of course that is point where, some day the public
longer term risks.
•
exactly what the security markets loses confidence in the ability of
(3) Equities—It 'S upon com¬
have
oeen
reflecting. " We ..can its government to carry out its
mon
stocks that we must place
consider this best by looking at undertakings. Certainly risks, re¬
our main hope of deriving enough
the. investment
opportunity, or sponsibilities and potential liabil¬
the absence of it, in each of our ities are being transferred to the income to produce a satisfactory
tlmee classifications.
Do
Federal
Government on such a average result for our trusts.
massive scale as to make it more these offer us opportunity at cur¬
(T) Fixed Income Securities—
and more a possibility that the rent levels? I find myself coming
O pportu n ity is conspicuously
next
major
depression
in
this more and more to the opinion that
lacking in airfields of fixed in¬
come
investment.
Superficially, country may crytallize around the many do, if we will allow our¬
the

is

all familiar with the gen¬

current dividend return that

cumstances

is by way of prompt
Wev shall have a deficit
this next year of not' less than $5
billions, with more to follow. This
Administration appears to have- no
remedy for any situation riot based
on more spending,
In periods of
prosperity, the necessity is to lift
up the laggard elements and to
spread social advances; in periods short-term investment which pro¬
of poor .business, the- need is for duce a reasonable going rate such
railroad -equipments,
pump priming; in periods of tran¬ as
ninesition, as now, the need is to months paper of finance com¬
bridge and cushion the adjust¬ panies and, where appropriate,
ment. The end result of following short-term municipal issues.^ By
this road must inevitably be what shopping about, we can obtain a
if has been elsewhere; a weaken¬ fair rate of return on short-term

remedy.

are

erous

inability of government to

tion

successfully

under

func¬

such

a

to

think- in

terms

of

de¬

now

As

try.

a

be argued

result it can scarcely
that the stock has be¬

,

Numerous

panies

stocks

of

sound

com¬

than the per
share value of net working capi¬
tal:

sell

at

less

Witness

Montgomery Ward
common, selling at 53 on a $3 div¬
idend rate which is widely pro¬
tected

trinsic

compared with

$69

net

Stocks of a myriad

any

value, and if we can find

basis for looking beyond the

of

the Exchange

membership

of the late William F. Andrews to

dangerously
inflated,
al¬ Gustav Wurzweiler. Mr. Wurzthough doubtless it would become weiler will act as an individual
available at a lower price in the4 floor broker, it is understood.
event
of
a
general depression.

by average earning power,

T

the plight of Britain
is far from an exact parallel, the

fer

come

pendable dividend income and in¬

burden.

Although

selves

which $4.50 was paid in

quick assets.

per

share of

Now Sellwood & Stonehill
Effective Sept. 1 the firm name
of

Gimbernat

&

Sellwood,

111

Broadway, New York City, mem¬
bers of the New York

Stock Ex-

will be changed to Sell¬
wood & Stonehill. Jules R. Gim¬
change,

bernat, Jr. retired from the firm
Aug. 31.
"
,:-4'
.

24

(864)

THE

COMMERCIAL

&

CHRONICLE

FINANCIAL

The

The Wage Earner and the Gold Standard
(Continued from page 4)
nothing, although there is ; only
silver

A

the
of

60 cents worth of metal in

jbout

dollar.

1 V\ %

about

Moreover,

of

our

paper

monetary

came

being by evolution of natural
as occupations
became
diversified, and social organiza¬

edict

of

"Managed cur¬
rency" has always been bad for
uie common people.
They are af¬
fected adversely in two ways to¬
day.
The worker does not know
degree of

worth of his

Of

what

or

embarrassment

stands

earnings and savings.
are pensions, for
when the money

so

cjntinue

it will

did

when

earned

back

to

provide

paper

Abuse of the public purse, with

be

halt¬

return to sound money.

Abandonment of the gold stand¬
in

1933 was like
removing a
itety fuse from an electrical cir¬
Substitution of irredeem¬
able. paper money is analogous to

i

cuit,

the

insertion
wire

of

the

in

of

a

copper

the fuse

fuse.: The

ing—causing
carnage.

•,

1 '

r

Restoration
ard makes it
lic to

be-

can

the

the

subsidies

stand¬

possible for the pub¬
Government that

the

warn

working people will not willingly
>*rovide more taxes, because
they
isapprove of the purposes, or per-

<

because

Jiaps

they

deterioration

of

fear

their

itself

further

money

duced

productivity.

tarians

if

fo the

exchange
gold

or

Redemption
of
paper
by a large number of in¬
as

a

warning

Government that the people

disapprove

of

its

fiscal

policies,

d«&.put a brake on further dissi¬
pation of the nation's wealth. Be¬
ing thus warned, the Government
then remedy its policies be¬

can

fore serious and
age

to

irreparable dam¬

has

standard.

opportunity
gold coin

the

Because

of

our

coun¬

try's effective production we have
24«A billion dollars in the Treas¬
ury, which is absolutely and rela¬
tively greater than ever before.

It is there because

foreigners and

gold miners gave up their gold in
exchange for dollars necessary to
buy the goods which they wanted.

those
v

Americans
goods.

Whose

people

in

of

the

making

V

>

gold

who

did

is

it

earned

but
it

that

and

of

took

paper money in exchange?
Why
shofuld foreign central banks
be
able to draw on it when
Ameri¬
cans whose work caused
it to be
there cannot?

We

public

can

restore the power of the

'

■

-

.

of La¬
British

years

Neo-Welfare

State,
capitalism traveled along the so¬
cialist line, if grudgingly. But it
not

was

too

unhappy, except for
extravagant taxation. It has

the

bankers

that

found

in

the

profits

long

"directed"

available

are

to

out

those

who

before,

economy,

by the

are

Throughout

car¬

the

near

trough and have

hibitions.

and

in¬

no

all

taxa¬

tions, nationalizations,
dollar
shortages,
domestic
regimenta¬
tions and foreign exchange re¬
strictions, etc., the stock market
in London flourished and govern¬
ment bonds were as welcome to
the investing fraternity as

they

have

been

under

gold
and

balanced

budget,

Victorian

standard,

conditions.

has

City of London,
of

into

pressed

it

accepted

the

once

international

been

which

soundest
t

finance,
role,

the

with

conven¬

1934, which pro¬
fit Americans from owning gold
or gold
coin; it would make pa¬

the

bearer.

gold at

Fundamentally

of
en¬

actment of this bill would restore




Con¬

write

can

his

to

United States Representatives and

Senators; he can discuss the sub¬
ject with his friends, shop associ¬
ates, civic groups, and labor un¬
Only by concerted effort
the cherished liberties of free
Americans be preserved.
can

At

long last, the British finan¬

cial

turns.

worm

enough,
first.

the small

For

Curiously
turned

worms

months,

savings
certificates are being cashed in
than new ones bought. By
August,
more

the combination of
and

dollar crisis

a

totally irresponsible dock¬

a

ers' strike

England

(dockers are as vital to
as
railroaders
to
this

country)
seated

together

labor

industries

with
in

unrest

deep-

such

vital

railroads, coal, cot¬
ton mills,
engineering hopped by
new
austerities, the prospect of
as

taxes

more

the

and

scaling down of debts oustanding abroad, and a general read¬
justment of the financial struc¬
a

Of course, this would

ture.

have

political

a

consequence:
Labor
lose face and, presumably,

would
the

coming elections.
is to

The third way
before

and

carry on

blame

to

Uncle

as

Sam

trouble, asking him to re¬
pair the damage. This is exactly
the attitude, open or camouflaged,
not only of British labor but also
its

of

American

fellow-travelers

regimentations

much

even

and

least

for

alert

of

too

was

—

the

most

sedate

English

capi¬

talists. The worst of it is the
hope¬
lessness of the outlook, the recog¬

nition

that

this

is

longer

no

a

question of temporary emergency
to be bridged over
by another
American shot-iir-the-arm; Nor do
the U. S. and Canada
to do much

cuing

dollar

than half

and

over

anxious

of the same

more

hitherto. But

as

current

so

seem

billion dollars

the

or

Marshall

thing ^hort of a totally new turn
in British—and
American—poli¬
cies.

Super-Planning

European
scale, led by the publicity-con¬
scious
Mr.
Paul
Hoffman, ma¬
on a

neuvered

Britain into
a
nearpanic condition. Stock and bond
in

London

crisis continues in

broke.

The

spite of inter¬

mittent recoveries and open mar¬

ketoperations.

There

is

much

talk in Europe of a New
Dunkirk,
and the similarity of the 1949 fi¬
nancial

disaster to the 1940 mili¬

tary defeat is striking, indeed. But
then, it was an orderly retreat.
Britain still had her resources in¬

tact, with the trans-Atlantic world

grace, of the policeman in
country's international trans¬
actions, to keep the capitalists
from
escaping into Dollarica
through
the
foreign
exchange
barbed wires. The
and

has

once

powerful

independent Bank of England
%.

been

nationalized

;

into

«a

to back up

Small

at

sort

cepts

ners.

have been
to

serve

capital

market

thoroughly disciplined

the

financial

needs

and

directives of the Laborite planned
economy.

with

all

The investor went along
that

without

And today?

that

Mr.

Bevin

time of redistribut¬

one

ing the gold reserve, and of an
Anglo-American union of some

glorified agency of His Majesty's
Exchequer. The world's best or¬
ganized short-term money market

long-term

her fight.

wonder

speaks at

another

are very

British

time.

The

and

ear,

realization

(but

con¬

to

most

to the Plan¬

course,

brought home
per-crust

Both

spmpathetic to the

financial

welcome, of

has

been

the British

not

up¬

yet to the
rank and file) that their
country
stands at an historical crossroad.
There

are

asks:

at

last

as

three possible ways out

selves

be
and

carried

worthlessness, that the
by

an

undermined

over-strained

that the Welfare State has

shoulders

a

expropriation of all capital

disciplining labor. In other words,

This

is

no

longer that
Britain's

disease

the

counts,
need

now

a

own¬

ership. above 'the subsistence level.

progressive

maintain
face

deterioration

financial machine.

V J

of

of

a

the
the

is

of

a

chronic

but too
little
self-imposed v on
(5% cut in a national budget
$13.2 billion). Both sides will

of

be

wait

to

what

see

ports to the Dollar area, with no
increase
in
imports!
After the

expiration
100%

a

of

the Marshall Plan,
in exports

increase

net

would be needed. Both

the

So is anything

question.

the nature of

new

a

doggling project.
in the

mood to

bill—not

unless

in

super-boon¬

Congress is not

add

national

the

to

out of

are

more

billions

tax-or-inflation
the

Russians

do

something so cantankerous as to
arouse belligerent emotions.
But

the

prospects

that the

are

Soviets
keep off the war-path.
They take Little Tito's slaps "on
the chin." They tolerate that their
next-door

neighbor, Finland, sub¬

her

dues

the

American

"cycle" does. One reasoh lot* the
Sterling area's intensified trouble
is the fact that American demand
for

such

rubber,
fallen

materials

raw

tin,

as

cocoa,
wool,
etc.,
has
off sharply,
precipitating

equally sharp price cuts.
lonial

materials

raw

But

are

co¬

main¬

a

stay of the British balance of pay¬
ments.

Above

all, the Labor Regime
keep tightening its: restricausterity policies—auster¬
ity for the upper two-thirds, with
unprecedentedly high standards

will

.

tionist

the

its

lower

one-third—as

bilateralist

trade

well

program.

latter

relax the

presupposes
that we
non-discriminatory pro¬

vision of the Anglo-U. S. Loan of
1946.
There is little doubt that

shall concede that much,

let¬
into
mutually discriminating trading
groups.
Also, Washington might
we

ting the world be broken

up

undertake further commitments to

protect
and

to

the

Empire

(Hongkong!)

the

reduce

Exchequer's

that

on

score.

h;iv
This much
the

pound,

certain: that

seems

devaluation

no

not

(to

yet

as

of
say

nothing about the British propa¬
gated dollar devaluation, so as to
produce "painlessly" the billions
they would like to collect). Since
made

we

the

mistake

gesting

such

move * as

of

sug¬

British

devaluation, in¬
stead of demanding the reorgan¬
ization of Britain, they consider
a

faVor

a

to

us

which they are willing to extend
—at

ac¬

Sterling area would
40% rise in its ex¬

a

price.
recollect

I do not

witnessed

such

ever

a

having

consensus

of

opinion of the monetary experts
and inexperts on both sides of the
Atlantic, partly even in Britain,
as

this

on

point.

Dyed-in-the-

wool Sound

Money people clamor
for the devaluation of the pound,
people who not so long ago
blamed
on

the

who

our

monetary

British

of

coup

upheavals
1931, and

opposed to the Bretton
Woods program because of its hid¬
den possibility of promoting pound
were

depreciation. Now, it almost seems
that that pne step is all that sepa¬
rates the Socialist Hell from the
Conservative Heaven.

Truthfully, for
ford

Sir Staf¬

once,

Cripps is right.

That

cur¬

communists.

They are rency amputation, per se, is a dis¬
not ready for
a fight,
and not honest
procedure, scarcely would
anxious
to provoke
world-wide
inhibit any European statesman of
armaments
against
themselves.
They are back to the
shrewd this generation. But such a horse

policy of Stalin between 1926 and
1941:

to

keep out of troubled in¬
waters, and wait for
the wicked "capitalists" to fight
each other, as they did before.
If so, chances at this juncture
ternational

of

Congress becoming overly gen¬

erous

infinitesimal.

are

That de¬

outcome of the topwhich
begins

conference

after Labor Day, under the aegis
of the Monetary Fund.
The fact
that

the

unimaginative but

mon-sense-minded

one

are

any

To balance its international

dy¬

the

who

asking for
just another Christmas bonus, to
bp sure. She wants to be put on
the regular payroll, tising busi¬
ness language.
" v;1 » '■ "

will preside,

in

those

And she is not

nature.

and "naive" Mr.

Welfare State

of

emergency

freedoms,
to

Lord

be "bridged over."

can

elimination of

way

of

ni

totalitarian control

possible

it

produce the surpluses.

civic and economic

namics of its own: the
progressive

If

deficit

export

and

economy,

them¬

on

fur¬

some,

to

economy

there will be

the

onto

termines the

financial

o v e r-taxation,
artificially high standards of
living for the new elite, can keep
?oing on this same road by-

:with

ther

muddle

them

national deficits should be shifted

level

now

Briefly, the crisis will be put

dollar drain

and

function

subsidies.

Keynes
who for the first time suggested,
as far as I know, that responsi¬
bility for and worry about inter¬

mismanagement,

sole

buttressing the national debt—
might be devalued any moment

if we
the Senate's $275
stockpiling of for¬
eign raw materials, and to open
up more ocean lanes for British
ships by reducing our maritime
agree to restore

The

British
reproach.

adroit

told, they will get

million cut in

for

an

the

was

all

But

minor consolation only, even

as

export surplus of
America. Why make just the one
side responsible and not the other?
It

tions.

own

the American-made

the

is

Woods institu¬

out of the Bretton

cen¬

to be

top of the world, so one might be¬
Indeed

"effective."; They

draw some dollars, possibly,

may

their

lieve.

Europe

on our ad¬
chicaneries
which

relaxing

and

make the tariff

Americans

are

dollar shortage, they would be on

banks—whose

bankrupted

and

the

not for

were

the

keep
We

above

are

of the deadlock—three
only.
A country that has

socialistic

to

while

sured,

realizing
that the pound
sterling is losing
its
purchasing
power
and
its
credit, that deposits in the big

itself by

will

When

learn

house in order?

res¬

Plan money is at
stake, the trouble
lies too deep to be cured by
any¬

markets

Liberal London "New Statesman"

if the

even

is filled by
subsidies, and no

above

the colonies

generally re¬
duce the dollar-earning assets of
Britain,
Holland
and
France;
above all, that it is our "depres¬
sion" which brought about Brit¬
ain's current misery.
The Neo-

gap
a

are

in

(which

ice. The British will

for the

certainty of

more

the

over-inflated national debt cannot

demand

until

tional

into virtual

Daniel
Reed
of
This would repeal the

on

worker

more

industrialists

Representative

laws of 1933 and

ounce,

Every

fresh American

French

New York.

by

an

they support

be made to realize

can

learned quickly what the German

is

$35.00

who

The gold standard will

reestablished

and

the people by en¬
a bill introduced
March 7 into the 81st
Congress
purse to

acting HR 3262,

per. money redeemable in

that

that this is what Americans want.

and

That gold is there because
work

ignominiously dis-

During the four

.

center

the

reestablish

the

was

elected.

The

America

to

But

Churchill

is done.

now

re¬

the rough-talking trade
with
calloused
hands.

as

currency

serve

and

unionists

their

dividuals will

obsolescence

masses, the gentlemen in tuxedos
did not sound as genuine humani¬

Welfare

money

of

increased

individuals

gold

unprecedented demreckless promises:

an

prices, higher wages, sub¬
left, were poured
out in oratory. This, in the face
of all physical
destruction, finan¬
cial impoverishment, lost
markets,

able,

for

be

gressmen

concealed
was

lower

load

coin.

It

that

cheap housing, womb-to-tomb se¬
curity, free medicine, better diets,

deficit financing is continued.
nWhen paper money is redeem¬
may

and

open

involved.

capi¬
actually
has
helped the country slip down the
drain of Socialism.
Its war-time
spokesman
Winston
Churchill,
talism

bor's

'

gold

HR 3262.
not

interest of all

save

and

and

warn¬

irreparable
i

:

.

of

place

without

serious

;

penny

in

system

over-loaded

rt»me

box

and

Super-Planning

sidies right and

JEtemoving the Safety Fuse

i.c

the

in

is

tion

The

-oney.

can

money.

pocketing the high tariff protec¬

displayed

cil its attendant ills

The

worker is entitled to good money;
best is the gold standard of
it

ministrative

exchanges. That im¬
plies some amount of lowering of
living standards for the brackets
that appropriated a greater slice
of the national pie than what they
are entitled to by reason of their
own productivity. It
implies, also,

the

work

years),

international

irredeemable
American

of

money.

(Continued from first page;

agoguery

irredeemable

more

enterprise system, to unrestricted

a

ions.

Panic Under

a;id»>

ard

money,

history

until

on,

it always has

anxious, for obvious
reasons, to keep the Laborites in
the saddle). The idea is that our
"high" tariff cuts down our im¬
ports, and therefore, Europe's ex¬
ports; that our policies in China

jConditions will get progressive¬
ly* worse if- deficit financing is
tjntinued, i.e., the issue of more

a

paper

the

goes

occurs as

they are asking. They will
lowering American tariffs
are at the
lowest in 25

which

means

propose

(who

em¬

America.

by

our

time

as

breakdown

alternative

second

the exact opposite: to change the
course
and to return to the free

or

(iSteriorating dollar tends to stop
tfe opportunities for new jobs in

ed

of

plan ahead with certhat their industries will

gainful
ployment for their workers.

3

the

to

If this reform is not made now,
this year, it may become more

cannot

men

of

Treasury
because few people will actually
want
gold when
the Treasury

by the fact that business¬

liinty

custom

promises and not upon
repudiation.
There will be no

The worker is further af¬

fected

and

always willing to redeem it.

it

SAved?

example

an

keeping

buy only oneperhaps one-fourth, of the

innount

and real pros¬

if

due

cKnes

years

as

good

example,
Lalf

upon

the

assurance

next, ten

perity, because sound credit rests

rulers.

with any

much

the

restore confidence

the

by

difficult

paper

in

they have done in the
decade, or probably faster.
My, conviction is that a return to
the redeemable gold standard will

processes

not

would

last

mto

expanded—and

earner

It

in

as

tions

every

insure the values of pensions and

teriorate

money

systems,

of

salaries.

and

savings which will otherwise de¬

only

payable in silver.
Sound

sell-respect
wages

Thursday, September 1, 1949

an

omen.

Mr.

makes sense only if it goes

hand-in-hand

with

What

is

the

,

use

domestic

a

house-cleaning.
of

the pound if it is to

L

,

realigning

be kept be¬

hind the barbed wires of currency

restrictions, and if artificial real
wages

long

are

to

be maintained? As

the domestic full employ¬

as

ment

policy prevails, and it

vails

100%, labor is

pre¬

com¬

Snyder

not the effervescent

Acheson,

cure

may

be

gaining saddle and will drive for
higher

•

power

Presumably, the British slice of
the current Marshall Plan instal¬

in the bar¬

it

wages

of the

must

under

if

the

pound

purchasing
declines

devaluation).

(as
The

ment will be increased, but most, commercial. advantage would not
probably not the $1.5 billion for last more than a matter of

COMMERCIAL

THE

Number 4834

170

Volume

&

FINANCIAL

WHOLESALE FOOD PRICE INDEX SHOWS FIRST DECLINE

months, and the internal unrest it
might engender would not be

The State of Trade and

worth the candle.

Industry

However, railroad steel went through an open switch- and it will be
some time before the wreckage can be cleared.

devaluation would
purchasing power of
foreign debts, the so-

course,

diminish the
Britain's

war-time

called

still must amount

$14 billion at least.
was

(nominally) to
But if a scal¬

Steelmaking

is

ever, their bids on industrial lists are up sharply and many a broker
is losing several dollars a ton to cover old lower priced orders and,

the

is

one

ever

happen

The

beginning Aug. 29,
or

1949,

as

increase of 1.8% or

an

'

set at 86.7%.

were

capacity

June 13, 1949 when

ELECTRIC OUTPUT

workers

af¬

AUTOMOTIVE

The resources used to sus¬

fected.

tain faked

exports are not avail¬

■compete on the open markets of
the world.
Her crisis will con¬
tinue

OUTPUT IN

accordingly.

w

RECORD

HIGH

and

21,182

by

the

ESTABLISHED

IN

Home Loan Bank
Public

offering

A record

'

current week was made up of 124,143
built' in the U. S. and 4,612 cars and 2,375

650.

Banks

con¬

solidated notes was made on

Aug.

Loan

Home

Federal

Federal Home Loan
Smith, Fis¬
cal Agent.
The offering consists
■of $88,500,000 non-callable 1.25%
consolidated notes, series B-1950,
and $75,000,000 non-callable 1.35%
consolidated notes, series C-1950.
the

by

30,

dated

1949 and will mature
1950, while the series
C-1950 notes are dated Sept. 15,
1949 and will mature Sept. 15,
Sept.
Feb.

15,

15,

1950.

A nationwide

selling group

partici¬
The notes are

The purpose of the
provide funds for

priced at par.
offering

is

to

"the payment at

maturity on Sept.

principal

15, 1949, of $120,000,000

amount of 1 % % series D-1949 and

$51,500,000
1 V\%

principal amount of

series E-1949 consolidated

motes,

provide funds for

and to

making

available

credit by the
their

best

621,910 cars

previous records were 537,564 cars and
April, 1929.

increasing weevil damage in parts of the belt. A depressing influ was the fact that export sales have been running considerably

ence

Commercial

and

failures fell

industrial

RETAIL

Manufacturing accounted for most of the

PROMOTIONS

decline.

Failures

were

week's decline. Retail

more

in all industry and trade groups with the
occurring in retailing and wholesaling.

than

numerous

a year

sharpest relative rises

lar

reported a decrease for the week with
casualties lower or unchanged in most other areas. Nearly all areas
reported more casualties than in the similar week last year.
The New England States

BUSINESS FAILURES DECLINE BY 13% IN

commercial

719

and

industrial failures in July, a

previous month. While they were more nu¬
July since 1942, there were three-fifths as many

decline of 13% from the

than in any
as in the same month in 1940.

member institutions, The notes are

joint and several obligations
11

Federal

Loan

Home

Banks.

of

.

Three-fourths of the July failures were
one^sixth of them in thetr first year

DENVER,
has opened a

Financial

COLO.—E.

new

Hitter.

W.

Hoy

branch office in the

Empire Building.
the

during the

Chronicle)

Associated with

office will be Etienne A.

«Y

vi *




' *

■

*

\

-

of prewar

a

year ago.

'•Y

/"■'

.

„v

.

There continued to be a moderate demand for summer-clothfotl
in

Consumers generally responded favorably to pro¬

sections.

some

Back-to-school sales drew increased atten¬
shoes were purchased* in-<a
larger volume than in recent weeks.
Stores offering men's
sold slightly more than in the previous week.
Y
»
r
of fall

motions

apparel.

Women's

tion.

sportswear and

dresses,

with total
There was h
slight rise in total meat purchases; hams and cold cuts continued to
be very popular. The interest in fresh fruit and vegetables increased
slightly and bakery goods and confectionery were in increased-de¬
unit volume holding

mand.

'

close to that of a year ago.

very

;

,

retail

volume

since
since

postwar businesses, with

Concerns started
while 12% consisted

of operation.

co^rised 15% of the total,
businesses.
-■■■.Jwar years

WW"

*

.

furniture

of

and

household

continued

There

failures from last year was

individual States, in Ohio, Wisconsin, and

waft*

to be

substantial demand for incidental

for^b

household soft goods. The sales volume of televi¬
sets, washers and refrigerators rose slightly in some areas. 'ltV

sion

Total retail volume in the period ended on Wednesday

week

was

of th$ past

Y Y;v

estimated to be from 4 to 8% below a year ago.

Regional estimates varied from the levels of a year ago by,,
following

the

percentages:

New

England,

South and Pacific
Northwest —6 Iq

Coast—3 to —7; East —2 to —6; Midwest and

—10, and Southwest —5 to —9.

Y

,

r

anticipation of the Fall season, wholesale buyers increased
their commitments last week. The total dollar volume of all whole¬
sale orders continued to be slightly below that of the comparable week
in 1948. The number of buyers attending many wholesale markets
In

noticeably in the week and moderately surpassed that of a year

rose

■

■

V:

DEPARTMENT STORE SALES DECLINES CUT SHARPLY IN

Y'

** "

YYYv:..

LATEST WEEK

Department store sales on a country-wide basis, as taken from
Board's index for the week ended Aug. 20, 1949,

from the like period of last year and comparer
15% (revised) in the preceding week. For.-tb^
20, 1949, sales registered a decrease of 12%
the corresponding period a year ago and for the year to date, a

decreased

with

a

by 7%

decrease

of

four weeks ended Aug.
from

Y'^Y-YY

Here in New York the

ulated by

Y.'-Y YY.,Y*

.

Y.Yw-Y;]:,;.;

past week consumer demand was stim-

cooler temperatures and promotion sales, but

Maryland.

sharpest,

notwitb-i

sales volume for the week was
placed at about 10% below that of a year ago.
j,H
standing

this, department store

Federal Reserve Board's index, department
City for the weekly period to Aug. 20, 1949.
by 10% from the same period last year.
In the preceding
week a decrease of 20% (revised) was registered below the similar
week of 1948.
For the four weeks ended Aug. 20, 1949, a decrease ©f
14% was reported under that of last year.
For the year to date
ume decreased by 8%.
•
r
r Y i
- ,•<
According

to

the

store sales in New York

declined

,

the 1948 level appeared in
the textile and lumber industries, apparel and furniture retailers,
eating and drinking places, and business and repair services. %
The rise in the number of

goods

ture, bedding and

.

.

Noticeable increases in failures from

among

,

a

decline of 5%.

Liabilities, totaling $21,804,000, were at the lowest level
They exceeded the volume of losses in any other July
July, 1947.

(Special to The

.

ago,

year

.

1935 except

Hoy Opens Branch

a

Shoppers bought more apparel than in the preceding week,,
consequence aggregate unit volume was slightly below thai

_

As

The rate of failure per

January.

In Denver

•

according to Dun
Bradstreet, Inc. in its current summary of trade.
Many retailers
continued to shift their promotional efforts to fall merchandise^ r

10,000 businesses in operation, as indicated
by Dun's Failure Index, dropped to 34 from 36 in June. This index
projects monthly failures to an annual basis and is adjusted for sea¬
sonal variations. '
YVjH/vYY -'^/Y:' •';

the

SEASON

FALL

the Federal Reserve

JULY

failures

of

OF

It continued, however, to be very mocl

of last week.

Wednesday

ago.

Federal Home Loan Banks to

the

APPROACH

AND

by cooler weather and many special promotions, the dol¬
volume of retail sales rose slighting in the period ended on

in the week

176

to

wholesaling and commercial

ago

merous

LIFTED

VOLUME

T R A D E

WEEK BY COOLER WEATHER, SPECIAL

Aided

almost twice as numerous, however, as

casualties increased while construction,

were

the

practically unchanged from that of the preceding week and con-"
tinued to be moderately below that of a year ago.
y

A slight dip was reported in small
casualties, those with liabilities under $5,000, which were down to
27 from 29, but above the 17 of a year ago.

There

WHOLESALE

AND

SLIGHTLY IN

when 79 occurred.

service failures

spot markets during the latest week increased to

Sales in the 10

$5,0.00 or more declined to

Failures Involving liabilities of
149 from 164; they were
year ago

soto j

improvement last week but lack of offerings at current prices tended
to retard spot sales. Some increase was noted in export inquiries. •*

LATEST WEEK

from 193 in the previous week, according to Dun &
Bradstreet, Inc. Casualties were considerably more numerous than
in comparable weeks of 1948 and 1947 when 96 and 59 occurred re¬
spectively, but they remained noticeably below the prewar level of
264 in the corresponding week of 1939.

a

ago] Domestic mill demand showed

below the levels of a year

The

ended Aug. 25

■of securities dealers will

pate in the offering.

high of 554*950 passepgOr cars*
combined car and truck total of 655,-

BUSINESS FAILURES DECLINE IN

Hanks through Everett

The series B-1950 notes are

The

and trucks in

for

The demand for food increased moderately last week

in the like week of
model changeovers.
is predicted by "Ward's'-'

for the U. S. this month and a

of $163,500,000

«

,

,

season.

■ - *

Output a yeaj; ago was 100,699 units and,
1941, it was held .dowrl,. to 39,965 units due to

Offered by Federal

>

SURPASS erately below the high level of

trucks in Canada.

$163,500,000 Notes

face of

markets continued to show weakness in the

electric

Nash,

trucks

,]}

Export demand for flour continued dull.

Although futures displayed a slightly firmer trend at the close,

The total output for the
cars

of the harvest

approach

near

Strength in futures stemmed from the reported low
position of stocks of cotton in the hands of manufacturers, continued
favorable advices from the cotton gray goods market and reports ©

- -

by

despite the

Domestic flour business remained small although prices con¬

spot prices moved irregularly downward to reach new low ground

Kaiser-Frazer and Willys-Overland
prevented higher output, the agency stated.
Shutdowns

get under way in mid-October. Demand, fp^
slow.
Many farmers showed a dispositionwto

corn

the approaching new crop.

According to "Ward's Automotive Reports" for the past week,
for the United States and Canada rose to
estimated 152,312 units from 149,359 units (revised) in the pre¬

vious period.

surplus

Cotton

motor vehicle production
an

*

is reported

more

rather

was

tinued firm.

' :

APRIL, 1929

range.

a narrow

95,800 bales, from 69,900 bales the previous week, and 92,500 in
corresponding week a year ago.

AUGUST EXPECTED TO

MONTHLY

PREVIOUS

of goods
to be sold against dollars.
The
inflated full employment keeps
wages high and rising, to the det¬
riment
of
Britain's capacity to
the production

able for

distributed

energy

past1 week.■' The trend waSs

wheat crop is practically completed in.* th;
well under way in Canada. Weathe:
favorable for the corn crop, harvesting al

the

of

were

their

season.

light and power industry for the week ended Aug. 27, was estimated
at 5,523,316,000 kwh. according to the Edison Electric Institute. This
represented a decline of 55,484,000 kwh. below the preceding week,
45,575,000 kwh. or 0.8% higher than the figure reported for the
week ended Aug. 28, 1948, and 583,515,000 kwh. in excess of the
output reported for the corresponding period two years ago.

or

profitable exports are

,

,

LOWER IN LATEST WEEK

electrical

of

amount

during the

range

expected to

corn

hold

ing week. It, however, represents a decrease of 169,448 cars, or 18.8%
below the corresponding week in 1948, and a decrease of 169,680
cars or
18.8% under the similar period in 1947.

The

is

cash

LATEST WEEK

lower quality; in¬
are being
kept employed in Britain; and
labor's budget is not affected.
But

<

commodity price indek

irregular and prices moved in

were

States and

which

Loadings of revenue freight for the week ended Aug. 20, 1949,
totaled 731,215 cars, according to the Association of American Rail¬
roads. 1 This was an increase of 3,186 cars, or 0.4% above the preced¬

So,

narrow

Grains

castings for the

ingots and

a

Bradstreet daily wholesale

&

Harvesting

CARLOADINGS AGAIN SHOW A MODEST ADVANCE IN

they would have had to write off),
and therefore do not mind
the
and

SLIGHTLY

•

Reflecting the prospects of bountiful yields, prices of wheat, corn
and oats continued to hold below the government loan levels.

the

partners enjoy receiving
British goods at no cost (against
frozen balances which otherwise

dustries

,

slightly upward toward the close and the index finished at 238iL
on Aug. 23,
compared with 236.41 a week earlier, and with 274.6,
on the corresponding date a year ago.
•

conditions

against 84.8% in the
1.5 points. The cur¬

is the highest since the week of

Dun
in

moved

area

higher price

;

INDEX EDGED

UPWARD IN THE LATEST WEEK

United

of the

companies having 94%

of steel

equivalent to 1,591,000 tons of
entire industry, compared to
1,563,300 tons a week ago, 1,498,800 tons, or 81.3% a month ago,
and 1,716,000 tons, or 95.2% of the old capacity one year ago and
1,281,210 tons for the average week in 1940, highest prewar year.

Sterling

the

happy:

rate

This week's operating rate is

steel

be

to

slump.

week

operations

domestic market—in those export

a

the

rent rate

purchasing specified quantities of
British goods. The balances which
are being mobilized through this
process turn into active purchas¬
ing power to support the British

with

operating

preceding week,

Pakistan, Ceylon,
Israel, or what have you, permit¬
ting them to draw down specified
amounts of their claims through

which

the

steel-making capacity of the industry will be 86.3% of
for

be it Hindustan,

threatened

COMMODITY PRICE

WHOLESALE

this week

The American Iron and Steel Institute announced

that

His Majesty's Government makes
deals with feach creditor country,

industries

Age," its steel scrap composite moved up again
ton, $1.41 above last week's figure, for
biggest jump of the year.

this week to $23.33 per gross

works:

trick

]

v.,

,

concludes "The Iron

is

the

how

prices shot up again this week although steel
into the open market for big tonnages. How¬

scrap

mills have not yet come

needed to
sustain full employment.
It is be¬
ing provided by these same debts.
Here

two-

Y;' '

;

price index, compiled by Dun & Bradstreet,
Inc., turned downward last week following the leveling off move¬
ment of the week preceding. The index dropped to $5.86 on Aug. 23,
from $5.89 on Aug. 16, and compared with $6.94 on the corresponding
date of last year.
Due to the sharply declining trend a year ago,
the year-to-year rise has been narrowed to 15.6%.
;
'■».» u

harvest, will not be ready in time, since major mills are now
just about booked through December on galvanized sheets.

through individual
arrangements. Nothing of the kind
is intended.
No people ever have
enjoyed more being in debt than
do the British at present, para¬
doxical as that may sound.
The
fact is, however, that since they
have balanced their budget, a new
source

a

SEVEN WEEKS

IN

The wholesale food

Fall

accomplished

inflationary

due if cold-rolled sheets, now on at least

are

delivery basis, get any tighter. Galvanized sheets are still on
this basis and are getting tighter due in part to the Federal Corn Stor¬
age Program. A lot of corn cribs, scheduled for completion before the

of those -debts were
wanted, this could be

ing-(down
what

Allocations
month

which

balances,

'

;

(Continued from page 5)
Of

25

(865)

CHRONICLE

NOTE—On another page

and industrial statistics showing the latest
previous year, etc., comparisons for determining the
by referring to "Indications of Current Business
in every Thursday'* Issue of the "Chronicle.".• ,

coverage

of business

latest month,

of

conditions

feature

of this issue the reader will find the

most comprehensive

week, previous week,
week-to-week trends
Activity," a regular
,

..

\

-t

Y

.

;

26

THE

(866)

excited public buying to plete

any

3/1.

Walter

Says—■ ;l|7bT
==Bj WALTER WHYTE=

CHRONICLE

duce. '

which

those

with

better

act

There

also the

was

the

or

ticker

United

better and

(Continued
eluded for the benefit of all part¬
ies concerned and not. any one

market.

party.

won't

*

*

■ /,

foregoing, however,
the

all-impor¬
question: what will hap¬
from here on? I'll try to

tant

pen

This

77T*;'x7?;'T

fact-finding board has had

submitted

answer

to

it

voluminous

a

from page 6)

only

11

,

/

to avoiding depres¬

answer

sions and achieving sustained full
employment in this country. How¬

believe that higher wages
important factor in achiev¬
ing this objective and the figures

ever. we

are an

quantity of data for the purpose
of helping it find what the real for the '30's demonstrate this with
facts are in this industry.
Sim¬ considerable emphasis.
;f
ilar or even remotely related data
A substantial part of Dr. Backfor other industries have not been

man's

will be

answer,
based

one

'

1

.•

,

though

on

V

.

terns

Anyway, here's the
I think stocks

are

answer.
about

now

two to four

making

points away from
bottom, Whether or

a

not such

for

a

bottom will stand

and

rounds

of

in¬ funds

wage

creases.

concerned with the immediate

future.

circumstances. They have not said

That

ii?

words

many

that they are

*

v*

It

,

"*

'

is

•

T7TT:'

*
'
*
kv^":'-T'\
.

possible

that

..ttA;

before

the rally will be in
full swing.
I feel, however,
appears

we

will

see

another week

slowly drifting prices be¬
fore any firmness will be seen.
Incidentally, I don't think a
rally will ? be sudden and
sharp.
One reason is that
too

are

locked in at

longs
higher prices for
many

cannot argue against
as a

criterion

nies

crease

v,

v

Orders Executed

on

Pacific Coast Exchanges

in

return to

Stock

Exchange
Exchange <Associate)
San .Francisco Stock
Exchange
Chicago Board, of Trade
'*
Curb

14 Wall Street

New York 5, N. Y.

COrtlandt 7-4150
Private

San

Wires

Teletype NY 1-928
to

Principal

Offices

Francisco—Santa Barbara

Monterey—-Oakland——Sacramento
Fresno—Santa Rosa




the

this

of

varying
Dr.

which

ment

whether

or

compa¬

I don't

will

not

ness

adjustments

wage

Backman

be in¬

the part of industry.

on

its

care

will

of

the

in

economy.

continue

not

productive

crease

to

facilities

its inventories if
not

keep

expand
and in¬

consumer

with

and

that

1939

we

break

down

the

period

1939 into the years from
1933 and the years from
1939, the results are more

to

to

investment process, but excessive
lead to less rather than
investment because they re¬

more

manufacturing

industries

dropped from 56.6 cents
in

1929

1933.

to 44.2
On

the

cents

hour
hour in

per

per

other

hand,

this

country

in

total

in¬
by 7,000,000 and hourly earnings rose
from 44.2 cents per hour in 1933
63.3

from

1933

1939

cents per hour in

certainly do not
wages

to

were

Dr. Backman states that

we

only

We do not contend that higher
rates are the only factor
which influence business activities
wage

wages

accumulation

provide the

of

postwar savings.

a

wartime

If

we

have

such

ample .purchasing ' power,
why is the steel industry operat¬

ing at less than 85% of capacity?
If

we

textile

in

1939.

higher

and

I

bringing about the substantial but
inadequate recovery from 1933 to

and that

huge

higher

factor

;

on

the wage increases

fore

for

the

profits,

and

there¬

will come out of
is desirable from

wages

which

the point of view of the national
interest. Dr. Backman

be

probable

combination of

a

buying

power

of

If

enlarged

an

the part of the

on

the

American

for

prospects

most

people

reasonable

American

con¬

could afford to buy decent

housing, could afford to buy new
cars at reasonable
intervals, could
afford to more fully satisfy their
needs, there would be a truly
bright environment for the stimur
lation of investment. Dr. Backman

refers

primarily to tax adjustments.as providing the proper en¬
vironment

for

tainly taxes
and

no

stimulation.

are

Cer¬

always oppressive

likes

one

to

There

is

present tax structure being

our

an

convincing

no

evidence

important deterrent to invest¬

ment. When

our taxes were higher
prior to the untimely tax cut in
Spring of 1938 by the Congress

the

recognizes
absorption of

business

wage increases this time

when he

13 of Companies Ex¬
"ft would be difficult, if

says on page

hibit 5,
not

impossible, to convert
into

creases n

higher

products."

many

"Higher

He

for

continues,

costs

wage

cost in¬

prices
would

act,

•

however, to prevent, the down¬
ward price adjustments which are
slowly but surely taking place
throughout the economy." Lower
are fine but they are slowly
taking place far behind the drop
prices

in production and the increase in

unemployment.
At

taxes.

pay

of

the

*

-

bottom

of

•-

—

..

page

13

of

Companies Exhibit 5, Dr. Backalmost

man

clusion

comes

that

up to

the

con¬

certainly

wages

should

be reduced at this time.
He states, "When there is a .sur¬

plus of any product available, it
be eliminated- by raising
price. I do not beii eve that

in the face of Presidential opposi¬

cannot

tion, there was no evidence of
hesitancy on the part of business

the

to undertake
recession

taxes,
fited

investment. The

new

after

came

the

cuts in
cut which primarily bene¬
the higher income groups
a

because of the universal introduc¬
tion

of

the

community

property

principle.

unemployment can be eliminated
by raising the price of labor7' In
all

of

his

earlier testimony
Dr.
implied that" the way
to dispose of a surplus is to cut
prices. He does not quite say here

Backman

that

members

draw their

Question of Expanding

policy

Investment
Backman

says

9

page

on

Companies
Exhibit
5
that,
"New investments in turn require
a
combination of availability of
funds and proper incentives." Of
that is so, but he ignored

course

most'important inducement

all,

namely,

products

Dr. Backman's

impact
of

on

government

to

was

and

we

from

saw

1929

surplus

a

wants

the

can

to

what
1933.

product,

hap¬
Labor

.if

cne

:

The way to

T
the

revenues

The

government

thirties

pened

the

about

concern

increases.

wage

threat
lies

cut,' but

Board

After all,
if the logic of his
argument points toward wage de¬
creases, why doesn't he propose
them? We had them in the
early

by

...»

■

of

particularly interested in

was

this

conclusions of the

implications of Dr. Back-

for

produced

facilities.

new

I

the 'market
be

to

of

own

man's argument.

of

the

ought to be

wages

the

greatest
revenues

in

cent

months.
a

rent

year.

of

fiscal

business

lower

have

-

ample

purchasing

why is production in the

industry almost one-third
than

is

a

year

ago?

industry down to one-eighth

from what it

sumption

is

re¬

government

is

deficit for the

cur¬

Unless the

tide

activity

to

labor a commodity.
dispose of this surplus
cut its price, I ask the

to

was

call

members of this - Board
whether

after

the

1929

cut

did

in

to recall

wage

serve

to

rates

increase

the demand for labor. Did the cut
in wage rates serve to bring about

was a

still

year

ago? Con¬

high,

the

it is not high enough to

consume

shift

from

full

time

to

part-time work, and by a depres¬

bigger than
has been estimated by
anyone to

sion which shook the very foun¬
dations of this country and the

date. As

recurrence

deficit

will

be

much

result of increased

a

buy¬
through higher wages
result of intelligent gov¬

power
as

a

policies

of

the

are

in Union Exhibit 5, we
confident that prosperity qnd

full

employment

and

this will b<^

can

be restored

by far the most
important single factor in the in-!
creasing of government revenues
to a point where the budget can
be balanced and
ment

some

a

of which might strike
fatal blow to the free economy

which

nature

proposed

debt retire¬

take place. Any transfer
of income from the corporate sec¬
can

I

we

wish to preserve.

should

like

summarize

our

now

ment in this country for the bene¬
of
business as well
as
the

fit

worker and

for the benefit of all

and

consumers

all

revenues
a

as

does

a

depression

or

recession.'

have

taken
of

a

place

accrued

and

token

not

in

believe

it

are

not

groups

in

national

proposing
for

do hold that

all
now

a

interest."

general wage

workers
is the

but

we

right time

for wage increases. Would he
agree

We

that wage increases

ever

were

in

changes which
character¬

are

healthy adjustment in

has

the

We

the economy. The drop in employ¬
ment and in production has fully

Backman says on page 13
Companies Exhibit 5, "A gen¬
eral wage increase at this time is
of

citizens.

have analyzed what has occurred
in the past 10 months, and we do

istic

government

to
the

place, the Union persistently
supports policies designed to bring
about prosperity and full
employ¬

not believe that the

on

In

first

pressing

effect

briefly

position.

tor to the wage sector would not
have nearly as much of
a
de¬

increase

but

point I want to emphasize is that

stantial

the

turns,

Dr.

was

Why is production in the furni¬
ture

occurred in

The

faced with

ernmental

are

power, and we have in addition

power,

1939.

argue that

the

speak

environment for the
stimulation of investment wduld

and

Restoring Balance by Increasing
Purchasing Powers

We find that total em¬ aiming to restore balance through
ployment in the country dropped Increasing purchasing power. He
by 9,000,000 in the four years from is quite right. However, he finds
1929 to 1933, and
hourly earnings that we have ample purchasing
all

levels ,of Tin-

figures

The proper

ing

revealing.

in

eco¬

to
1933
was
accompanied, as I
have shown, by a tremendous de¬
crease in
employment, by a sub¬

Obviously,

for the whole

comparison. between strict consumption which is the
1929 demonstrates his most baric determinant of invest¬
ment decisions.

and

because of the

tivity which have

are necessary

a

position.
If

recovery

At this timi

an
increase in employment? Ac¬
tually the cut in wages from 1829

pace

capacity.

profits

bring about

are

depressions and in the
types of decline in economic ac¬

1930's in an effort to demonstrate
that wage changes in that
period
did not help

to

unjustified'

a

productive

profits

back

business

the level of inventories and with

the

goes

of

interestingly in¬

the companies
monopoly and en¬
joys monopolistic powers.
>
?

that labor is

of all

themselves.

how

high profits are
position to in¬ sat any given period of
time; busi¬
-

sectors

determine

there will

lowest

These

Dr.
on

point have been aired again and
again before this board. I merely

peacetime characteristics demand does

different

to

Members
New York

York

a

some

returning to peacetime cir¬
cumstances this country will likely

employment

New

ceived

consequence

Our differences of views

against general wage vestment

because

In

creased

Schwabacher & Co.

pay

hand and

one

wages.

1933 to

Securities

ability to

the

on

not

are

1929

;

the

increases should take want to reiterate that the demand
without any consideration for the products of
industry is by
of. ability to pay.
Logically, they far the most important single ele¬

1929

Pacific Coast

be

place

of

there

such

increases

the next issue of this column

that

that

should

10%

is

how

savings were held by the nomic
situation,
industry
will
spending units ■:whb7te&' find it much more difficult to pass

come.

of his argument.

so

then argue

•

■"T\....

Does he

companies on the one hand really believe investment would
are against
adopting the criterion increase if wages were cut and
of ability to pay under any and all buying power were thus reduced?

time, or be a minor against wages ever being in¬
point to decline, creased, but if they ever 'do in¬
crease wages, they must believe
concern
me
as
yet.

implications are
something I leave for some¬
body else to puzzle out. I'm

more

The

some

Long-term

and

incentive for investment.

resistance

doesn't

investment

for

in

tendency
war

of

of

sumers

arguments
in Companies
it submitted. The job of appraising Exhibit 6
goes back to the fact
market this particular
industry is not an that higher wages, which repre¬
action and not on so-called in¬ easy one. It would be impossible sent a
diversion
from
profits,
side information. The reason to ■concern yourselves with each means that there will be less funds
and every additional
industry in available for investment and less
I say this, is I have no inside
the economy, which is the impli¬ incentive for
investment.
Log¬
information not available to cation of what
the companies' ically,
according to his views,
others who want to read.
spokesmen are asking when they wage, cuts at this time should in¬
_*•
*'
r;■ ,/;j. ;v
' .V ' *
'v"
bring up the matter of wage pat¬ crease
profits, providing
more
v;.. "■*,*
*
*

give the,

liquid

profits.

Wages and Hie
| National Economy

public ap¬
petite for the bull side of the
*

fell

30%

Steel

served to whet the

:U

who

early in 1949, 44%
the spending units
the highest
10% of

by

income brackets. Only

and

Yet, despite these
signals, the news in

All the

think

can

the contentions of

held

this
the

dicative

States

was

inability,

dustrials.

was

way,
after

masses

confirm the action of the in¬

recent weeks

1, 1949

better time when

no

liquid savings and others have
small amounts. Of all liquid
savings held by people in (the

tapes.

refusal, of the rails to

market

of

very

the

the

the national interest? I

can pro¬

*

no

than

-

watched

industry

«>. Thursday; September

■

So, wrap it up. I think the
market, a rise is mean¬ market's within a couple of
Expect decline to halt after
few
more
points of making a bottom and
average
points ingless.
*
TT* 1% * v;7Q;.TT77T.
I believe the liquor stocks are
down. No sharp up move ex¬
In going over the markets the
ones to
buy.
pected for time being.
of the past few days, I was
More next Thursday.
There's little point in say¬ impressed with the action of
—Walter Whyte
ing I told you so, or in draw¬ the liquor stocks. They have
held up well, show a resis¬
ing morals from what now, in
[The views expressed in {this
retrospect, seems an obvious tance to declines, and prob¬ article do not necessarily at any
situation.
The
resistance ably can stand a
study of their time coincide with > thosO <of the
around the 180 figure was ap¬
earnings statements. I threw Chronicle. They are 'presented as
parent
to
anybody
who in the latter merely to com¬ those of the author only.}
<Hv/

-

what American

sentence. Actually I'm

concerned

not

.

Markets

a

FINANCIAL

&

wage in¬
earnings
What comfort can we get from
*
*
creases are in the national inter¬
*
;
or
balance sheets.
I prefer
the huge liquid savings which the est
than
at
the
present
time
What to buy is obviously an buying a stock at one price American consumers have when
primarily because of the fact that
these savings are so highly con¬
important question.
Seeing and selling it to somebody else
industry could not do what it did
centrated
in
the
hands
of
a
the market go up is quite nice, at a
repeatedly after the war, namely,
higher price. I leave the limited
proportion of the Ameri¬ increase prices more than enough
but unless you have stocks
juggling of figures to those can people? I have already pre¬ to offset
wage increases with the
which go up at least as far as who like it.
sented information to show that
result that industry put the work¬
the market, not to mention
large portions of our people have ers further into the hole. By the
come

Tomorrow's

COMMERCIAL

■

offset any increased benefit which
from

decline
is

by

the

in

creeping

prices.

We

in the
interests of the country and of all
ourselves

proach

the
to

which

no

means

country to
a

resign

do-nothing
may

ap¬

precipitate

lower levels of economic

activity

THE

Number 4834

170

Volume

COMMERCIAL

&

FINANCIAL
■

s

decreasing standards of liv¬

and

ing.

y--vv

The

type of economic thinking

presented here before this Board

by, the company spokesmen asks
that

follow the

we

kind of

same

let-nature-take-its-course ap¬
proach which was followed after
the war and which brought on

a v

recession.

this

is

It

time

for

a

change. It is time for the Ameri¬
can

people to realize that the full

benefits

of

the

tremendous

pro¬

higher

profits will result
from
this
increased
production.
Profits were excessive in the post¬
war
years
and became increas¬
ingly so in each year. Our figures
demonstrate
that
profits under
conditions

at • any
given level of output, higher than
at

time

any

for the

ever

same

are,

before recorded

level

of

(Continued from page 7)
it

be

must

as

result

a

of

would suffer depressions again

tion.

v-'

Realism

modify
free

our

requires
claim that

that

whose

economy

we

have

we

course

a

is

determined by competitive forces.

Prices, quality, production and
plant improvements are, in many

production.

and again.
here Is no

they

said

years

What they have said
different from what

ago.

can

to

two

or

20

In August of 1949

we

look back

August

years

over

of

ago

20-year span

a

1929

and

that

see

little progress and thinking
has taken place on the part of
those who have such a material

very

stake

the

in

preservation of. this
economy, but who are oblivious
of their own interests.
They full
well know that a depression will
mean not only unemployment and
lower
standards of living for
will

but

workers

also

do

away

compared with the
prewar years.
From 1939 to the
first quarter of 1949 the real rate
period and

as

.

Welfare

v

<

The unions

are

concerned about

the welfare of business; the unions

recognize the importance of prof¬
itability; the unions want business

tqi be

prosperous
that

know

they

because

employment.
However.,the unions have not for¬
gotten the history of American
booms and busts and the hardships
suffered when depressions have
struck this country.
There is no
means

justification

in this kind of de¬
kind

this

featism,

of

negative

thinking, this kind of do-nothing
which

attitude

not

is re¬
flected in the companies' position
only

Not Responsible to Public

The

concentration

of

the

war

times the increase

years as a

"base, the rela¬

tionship of the increases

8 to 1
quarter

was

and from 1947 to the first

of 1949 it was over 5 to 1.

Irre¬

spective of what factors are con¬
sidered as important contributors
to this development, the degree of
the

power

in

leaders

who

the

hands
not

are

of

hourly

profit increase in the steel in¬

or

nual

rate

of

its customers.

15.4%

in

the

first

quarter of 1949.
Of further significance

that

we

cannot

safely accept this

modification of

our

free economy

in the hope that with the passage
of time, the accumulation of ex¬

perience, and the sobering effect
responsibility, this power will

of

be tempered by benevolence and
wisdom. All
human
experience

discourages such belief. It teaches
us that power is corrosive. Union
organizations seem to pass
through three stages — (XX the
chaotic period of organization; (2)

only

to

a

small

segment

of

the

people.

labor

has ognize this fundamental differ¬
ence and, in the interests of the

American people and in the inter¬
Their ability to pay higher ests of our free economy, will
wages is predicated on the huge
adopt a constructive and positive
profits which they enjoyed in 1948
view which calls for
and in the first half of 1949 and point of
wages.

mented

will

be

further

supple¬

by the large decreases

the costs of materials used by

industry.

granting the full demands of this

in union.

.

"

savings in material costs alone can
take care of the total package de¬

Parcells Chi. Exch. Member

CHICAGO, ILL.—The Execu¬
To the ex-' tive Committee of the Chicago
tent that full prosperity is restored Stock
Exchange has elected to
and some of these raw material membership Charles A. Parcells
costs increase, the companies will of Charles A. Parcells & Co., De¬
manded by the

still

have

union.

ample capacity




to pay

result

demands
of

and

troit, Mich.

the

unsatisfied

frequent

demands—

strikes—are, in effect, imposed on
the public. The demands of Or¬
ganized labor, which have been
mounting each year, are but¬
tressed
by
so
much
economic
power that employers have sel¬
dom

refused

some

to

unit

proceed in

industrial
strained

cost.

It

other

any

the

to

in¬

and

some¬

by

would

which

sources

been

otherwise

for

improved

spent

concessions.

In

small groups of workin small plants by alliance
with employees in other plants
some

cases,

men

have

undoubtedly been strength¬

in their bargaining power
strongly financed and ruth¬
less managements.
ened

with

We must bear in

the

union

have

the

to

doubtful.

Labor

more

improvement

is

es¬

manner,

pecially of those localities where
smaller industries may be located.
Plant

contribution

welfare

re¬

be

unions

detriment of
ane:

Its

cerned.

public

the

would

competition is thus

interest,

public

equipment. Thus increased labor
costs have in many cases pre¬
vented
the
very
thing which
would justify them, i.e., increased

that

"labor's

be

can

paid

only

of

out

proceeds of production. I be¬

lieve

while

that

has

man-hour

production

increased,

per

far

by

the larger part of this increase
due

to

improved

rather than to increases in
skill

or

of

face the

question

industry

can

—

effort

We then

the workers.

continue to devise

is

equipment,-

tools,

new

ma¬

chinery and processes and find the
capital necessary to finance them
in order to offset the

rising costs
by increasing production?
labor will have been short¬
sighted—and we will all suffer.

of labor
If not,

...

A number of other dangers have
been, created. In some industries,
production. The incurring of debt
a uniform scale of wages has been
by many companies, particularly
established across the country. The
since the almost complete drying
differing conditions in plants and
up of the equity market, thus be¬

mandatory to achieve in¬
efficiency as; a counter¬
balance to larger labor costs. Fur¬

comes

creased

localities

which

bearing
ignored.

real wages have been
Some plants have been

forced

have

distinct

a*

on

to

close

others

and

have

thermore, because union contracts
not been built because allowances
are of
relatively short duration

more

and

difficult to

more

have not been made

have been

or

inadequately made for such dif¬
ferences.

Raises in

indqstry

have

strategic
by

one

followed

beer,

similar raises in another and then

by

equivalent raises "across the
Our price level has been
upward spiral dictated in
large megsqre by labpr leaders,

board."
on

.

an

This

of

is

now

"rounds"

third.
are

of

sequence

creases

first,

—

as a

recognized

round"

starting

as

drive.

Every

will

or

in

have

to

large

part

be

can

com¬

met

in

through

increased prices or a decreased re¬
turn

investments, measures
Which are frequently impossible.
extent

The

which

to

we

can

yield to (Jemands for
higher labor costs without ma¬
terial injury to the nation cannot
be fpretold. But it is important to
note that there is now ho law or
other

governmental or industrial

authority

upon

insure

that

to

which we
the

can

rely

in

power

the

hands of labor organizations will
be

within

kept

the

bounds

of

economic health.

Through the period of increas¬

still describe

our

also

wage

been

the

large and

are

efficient,

based less

tivity and

than with real wages.
instances

where

wages

In the many

price rises have

absorbed much of the labor

gains,

bill has largely been paid by

the

unorganized labor and the gen¬
eral public. Whether there has
been

a

fair

division

and burdens could

of

benefits

only be deter¬
by a more comprehensive
study than any I have seen.
mined

the

inefficient,

the small.

Wages

skill and produc¬

on

seniority and
mass bargaining power. Industrial
management is comforted by the
assurance
that competitors must
pay the
same
labor rates. This
has two

there

more

undesirable effects:

is

and

first,

collective bargaining

no

except between
ers

on

one or a

a

few labor lead¬

few leaders in the

industry, and second, it stifles
competition in a most important
I believe that these

field of costs.

conditions heralded the start many
years ago

decline.

of the British industrial
was not noted in

That

England until it

monetary

<"

,

Uniform

levels have been stabilized

for
the

cause

with

as

industries

reduced.

Monetary wages are at a new
high, as are real wages. It is im¬

concerned

and

economy

changed.
Competition within

ing labor power, organized labor
has obtained short-range benefits.

portant to note that industry-wide
unions operating over large areas
of the country are generally more

"fourth

"free," the definition of the word

on

continue to

a

person

industry now has a stake in
each opening negotiation.
If we

has

labor

and

every

improvements
and managerial
skill, so that additional rewards
whole

series

second

has been

to

in¬

cost

wage

described

The present steel demands

pensate for increases in the cost
of labor by means of technological

if

noted,

it

will be

more

too late.

was

Or,

give

no

I trust that

we

seemed

for alarm.

to

alert here.

The les¬

sening oi competition for any rea¬
son seems to bring decay.
The best time to arrest decay is
1

at

the

beginning.

drift into

a

We must not

static economy with a

growing population. If we should
permit this, it must result in a
lowering of our standards of liv¬
ing. With no larger pie to share,
and more with whom to share it,
this is inevitable.
We have al¬
ready met the challenge of con¬
centrations of financial and in¬

It would be a pity
costs and prices
to default to a concentration of
Competition Reduced"
depression might j
similar
economic power in the
curb this progression, but a de¬
Certainly it is true that since
hands oi labor leaders. New legis¬
pression is an exorbitant price to industry-wide wages and working
lation is needed now.
conditions have changed uniform¬
pay for something which intelli¬
The character of such legislation
ly, this element of competition
gence and courage should enable
is a more difficult problem.
The
us
to
avert.
industrial
concerns
has
Furthermore, the among
been eliminated. That is an ap¬ objective is clear—to avoid injury
power of organized labor will be
to the public interest from excesexerted
to
maintain
monetary parent benefit to the larger indus¬
(Continued on page 28)
wage rates even, when prices are tries and to the labor unions con¬

Each year, wages,
have gone up. A

the

As we have shown, the

lower

at

difficult for industry-wide

industry

ample facts of the ample capacity
of the steel industry to pay higher

which

27

,

,

mind, however,
gains"
can
be
properly appraised only when we
consider their long-term effects.
In the ultimate analysis, perma¬
nent gains for labor depend en¬
tirely on the stability of industry.

and
prospective labor cost in¬
has farefl the period of stabilization and co¬ creases are I unknown, production
relatively better in the postwar- operation with management; and stability over a long term is ex¬
rise in profits than did all manu¬ (3) the period of entrenchment tremely difficult. '
' '■ «
facturing industries. Our adjusted and self-perpetuation by a power¬
For
many
years
the national
profit figures show a rise from ful leadership. It is in this last
economy has been under severe
3.2% of all manufacturing profits stage that the corrosive effect of
pressure
to return to labor a
in 1946 to 3.8% in 1947 to 7% in power makes itself felt. If this
steadily increasing share of the
the first quarter of 1949. Reported country is to have a controlled national
production. This process
profits of the steel companies rose economy in spit of the many disr has had some beneficial effect on
from 3.5% of all manufacturing astrous examples
wjhich , should the- economy.
Employers
have
profits in 1946 to 6.2% in the steer us away from that course, been stimulated to devise more
first quarter of 1949.
let our economy be controlled at
productive procedures and labor
Profits in relation to investment least by leaders who are respon¬
expanding devices. But I believe
average 7.5% in the war years and sible to all of us, and not by that we are
approaching the point
after the war rose from 5.6% in those who represent special in¬
of diminishing returns, if we have
1946 to 12.1 % in 1948 and an an¬ terests and who are responsible
not already reached it. It becomes

steel

Wages

We believe that this board

been

have

abilities of
the large mass producers who opperate with greater efficiency and

times been directly prevented

economic

is the
-As a result of their ability to
sharp reduction in material costs shut down strategic industries and
The savings arising out
with respect to each and every in 1949.
to impose uniform conditions upon
of these price declines have been an
entire competitive field, labor
proposal ever submitted of a con¬
structive
nature
designed
to questioned by company spokes¬ leaders can exert compelling eco¬
men
in such manner as to cast
achieve stable prosperity.
nomic pressure on all of the pub¬
doubts on them, but no significant
lic, as well as on individual em¬
We believe that the workers of
data have been presented to chal¬
ployers. The pressure brought to
the steel industry need a wage
lenge their validity. They are too bear on the public is often more
increase.
They need a wage in¬
obviously apparent to be invali¬ effective in
gaining labor's objec¬
crease in order to more fully par¬
dated.
Again, the steel industry tives than would be the case if it
ticipate in the standard of living
shows no sign of readiness to share were
applied only to specific em¬
which
our
productive facilities
even
part of this windfall with ployers. The force of public opin¬
can provide.
A wage increase for workers or customers.
ion here comes into play. Alert
the steel workers will be bene¬
There just isn't any doubt about labor
leaders
are
thoroughly
ficial to the country because the
this industry's ability to meet the
aware of this and they play the
added buying power will help inunion demands. The workers need
game accordingly. If the effects of
dustry dispose of its products and
the wage increase and the pension
a threatened steel strike could be
will in turn mean more employ¬
and
insurance
coverage.
The confined
only to the steel indus¬
ment
and
more
buying power
granting of the union demands is
again. What happens to wages in in the national interest. The facts try, many persons—workers and
stockholders—would
be injured;
other industries depends upon bar¬
overwhelmingly support a rec¬ but their
percentage of the whole
gaining and facts in those indus¬ ommendation
by this board in
pqblic would not be great. But
tries.
Where wages can be and
favor of the union's proposals.
the effects of a steel strike can¬
are increased, the overall benefits
Basically, the union is proposing not be so confined and, in fact,
to the economy will be further en¬
steps and thinking in terms of the effects will be felt
by prac¬
hanced "and
profits will be in¬
policies which look forward. The tically everyone. Individually, and
creased in those industries where
completely negative attitude and collectively as a nation, such a
the impact of the recession has
position of the companies constant¬ result cannot be
ignored.
been greatest.
ly look backward. I cannot help
It follows, therefore, that most
but feel that this board will rec¬
Can Pay Higher

labor

the paying

creased mechanization have

with respect to wage increases but

'

of

demands

geared to

costs have consumed financial re¬

real

The

Unions Concerned About Business

the

earnings.
From to the public and who are subject
1946 to the first quarter of 1949 to little
restraint by law is an
the increase was in the ratio of; extremely important
development
25 to 1 between these series. Using in our
industrial life. I believe

in

its workers

«

injured competitively more
than the large companies because

indirectly because increased labor

investment increase

12

significantly its profitability with

most.

been

labor

on

almost

who will suffer

man

result, real wages
This will accentuate
unemployment
and
retard
recovery from the depression.
In the process described above,
smaller enterprises have usually
as a

rising.

are

responsible

of return
was

dustry in the war and postwar
years, especially the latter, reveals
a refusal of the industry to share

little business

-

•

,

mandate,
but more \ fre¬
quently they have been prevented

profits and bring about wide¬
spread bankruptcy among busi¬
ness enterprises. Of course it is the

with

(867)

■

falling and,

legisla¬

instances, significantly affected by
ductive capacity and resources of The whittling tendencies of the
the degree of wisdom, integrity
this country can only be enjoyed companies and their spokesmen
and concern for the public inter¬
fully if these resources are util¬ in attacking our profits figures est exercised
by
potent
labor
ized, and these resources include have given us even greater con¬ leaders. The
ability to materially
our total labor force, our produc¬
fidence in the magnitudes of the
affect conditions in strategic in¬
tive plant and equipment, our raw profit data we have presented to
dustries, such, for example, as
materials and every other facility this board.
transportation,
steel
and
coal,
with
which
this
We have demonstrated that real
country is so
places some union leaders in posi¬
richly blessed.
hourly earnings have risen sub¬ tions of
strategic importance with
To follow the proposals of the stantially less than real return on
respect to the course of our whole
investment both in the postwar
Companies, there is no doubt that
economy.
we

•

Economic Power of Labor Organizations

increased

current

'

,

because their levels

wages

of production will return to points
well above those now prevailing,
and

CHRONICLE

.

,

.

dustrial power.

28

THE

(868)

COMMERCIAL

FINANCIAL

&

CHRONICLE

Thursday, September 1, 1949

gaining which will not contain the
to our economy inherent
industry-wide bargaining. To
accomplish that result without in¬

Economic Powei of labor Organizations

threats

however, the artisan was an in¬ compelling force in industry-wide
enterpriser and the re¬ bargaining is an industry-wide jury to labor requires considera¬
strike.
Our present economic and tion of three factors—(a) the pres¬
power in the hands of labor lead¬ strictive regulations of the guilds
of
labor's
social structures are so interwoven ervation
bargaining
ers.
At the same time, we must had the color of labor and enter¬
that industry-wide strikes of ap¬ power^ particularly in the smaller
preserve the important social gains prise combinations in restraint of
companies, (b) the future role of
of collective bargaining. Only the trade. 1 am told also that the in¬ preciable duration cannot be per¬
international
industrial
unions,
clusion of labor within the scope mitted, except in a few industries
evils must be eradicated.
Therefore, in and (c) the future of the craft
cf our antitrust laws has been a of the luxury type.
union which cuts across various
Three Courses Open
subject of legislative discussion in all threats of industry-wide strikes
the public must intervene and de- industries.
As
I
see
it, there are three the United States since the pas¬
side the issue.
The preservation of labor's bar¬
Compulsory arbi¬
courses open to us—first, we could
sage of the Sherman Antitrust Act
tration is the only effective way
in 1890.
gaining power at a level at least
so define the legitimate objectives
The extension of the antitrust for the public to act.
equal to that of industrial man¬
of labor
unions as to prohibit
This is not personal speculation.
agement is, of course, most im¬
them from controlling production, laws to industry and labor alike
It seems The trend is already apparent in portant. I have already expressed
preventing improvements, impos¬ has an appeal to logic.
ing any form of featherbedding only fair and proper to treat all the so-called fact-finding boards. myself on that subject. In enter¬
(including "made work"), fixing types of economic concentrations These started in the railroad field, prises employing large numbers
alike.
We have learned from the spread to coal,
oil, automobiles of employees, I have no doubt
prices, excluding prefabricated
(Continued from page 27)
concentrations

sive

economic

of

dividual

and

by other groups

anions, subjecting them generally
to the antitrust laws, and forbid¬

some

individual

turn to

workers.

A

President.

a

While

we

to

seem

first such appeals
enough to secure

modification

of

the

unsatisfac¬

tory findings. In 1943 the railroad

re¬

unions forced

complete freedom of com¬

ered.

lative restrictions.

At

powerful

were

ding industry-wide bargaining; or, petition among workmen would
third, we could proceed along a destroy all unions. Such a back¬
combination of both lines of legis¬ ward step should not be consid¬
*'£2.

would preserve labor's

others, and one is now sitting
industry. To date the
findings of these boards, if un¬
satisfactory to labor, have been
subject to political appeals to the

items

and

that

in the steel

manufactured experience of England that labor
restrictions on competition can do
of labor, limiting the use of labor- just as much injury to the public
At the
saving machines and similar un-; as industry restrictions.
justifiable practices which still same time, I believe in collective
bargaining. Every union engaged
exist and for which we pay dearly;
second, we could restrict the power in that activity restrains and, in
of unions by limiting the size of fact, eliminates competition among
articles

in other cities or

a

second

the appointment of

fact-finding

board.

1946 the President deemed it

nec¬

of the most efficient

cutting machines, fixed the cost
otla"bor to be included (irrespec¬

ers

If

the

for

competition

among

lead¬

prestige.

we use

i:.

then

One

away.

stone of

the antitrust approach,

only a
important

a

short step
foundation

free economy will then

in the price the problem is to draw a satisfac¬ be gone.
pre¬ tory definition of the extent to
Labor,
management and the
vented
new which labor, as. a whole, shall be public should all resist compul¬
and cheaper methods of manufac¬ permitted to restrain competition sory arbitration because all will
ture. No American should be per¬ within ita ranks.
Frankly, I am suffer from its effects. It substi¬
mitted to exact that tribute frpm not yet clear as to whether the tutes the judgment of outsiders—
another American.
Economically, antitrust approach is best and, if so-called experts — for the free

tive
of

:

actual cost)

of

grade of suits, and
the introduction of

each

I can see dis¬ so, where the line is to be drawn.
permit one man There are many facets of the prob¬
restrict by personal edict the lem which need further study.
I

it is unwise for all.

play

aster ahead if we

reason

of

economic

for

our

forces.

The

industrial

inter-

like
other economic instrumen-

every

tality, must
tional

face

welfare.

able,

such

union,

the

If

test

of

deemed

;

na¬

desir-» j,

international

unions

might well perform functions in
the

labor

field

similar

to

those

performed by industrial and trade
associations.
an

That

would

inconsequential

role

be

not

to

play.

Its leaders would then
operate on
the policy level only.

The
even
our

role

of

of

more

the

waste

and

from

national

union

is

losses

in

.

idleness have resulted

conflicts

and

craft

problem. Some of

a

greatest

between

industrial

the

unions.

craft

is *

This

softer

confined

is

nature

tempted by the
of knowing that my competi¬

ease

and

will

I

that

the

same

and

rates

ieve

have

conditions, I becompetitive incen¬

the

tive of standing on our own feet
would

spur

me

other

and

J&L

employees to more dynamic ef¬
That

would

bring

about

production, more pay and
earnings — and a greater

more

contribution to the
fare.

unions

If

national

would

with each other for

wel¬

compete

higher

by increasing efficiency and pro¬
ductivity, it would greatly stimu¬
late

national economic health.

our

believe

also

in

that

craft

the

large

company

statutes.

unions

established

emloyees

be

J

per-

companies ^
be
ade- *

can

quately represented by industrial
unions?

Should
to

craft

the

unions

be

intermittent

;

in¬

dustries like the building trades?
Should craft unions even in the
intermittent fields be subjected to

the_antitrust laws? We know that
their power to make work, con¬
trol
prices and limit efficiency
and

production

must*be

ended.

How much farther should

go?

we

Q

Here again I must confess that my
studies and experiences have not

progressed
be

sufficiently for

specific.

To

summarize

tional

J

the

power

to1

undue

%

,

briefly, the na¬
is now subject*

economy
without any effective
to

me

\

Summary

wages

adequate protection
could be easily found to prevent
company domination of any union.
In fact,
I think such protection
One already exists in our present labor

adherence to the

bargaining unit, also

difficulties.

national

the

unions

in

tion

use

the

its

in

mitted

and

ited

clothes cost more
leader has lim¬

has

union

company-wide

whose

more

union

the

the

enforced. The adoption of a regu¬
lar system of compulsory arbitra¬

a

industrial

if

become

Should

have is the struggle of unions for
extensions of their jurisdictions

because

a

the approximately 36,would have

national

future,

bargaining power well able to
cope with the J&L management.
If that were done, I think produc¬
tion and wages in the J&L plants
would
improve.
Much
as
my

forts.

I learn that my

V-U;.
^ V
Defining the role of the inter¬

promising field for study.

production. I have a table is non-existent. About the that, irrespective of politics, the
strong feeling of resentment when only labor competition we now findings of these boards must be
or

union

bargaining
union rep¬

while the necessary

in progress.

another

labor

and should be made some exceptions for labor in men and engineers was broken
taken immediately.
I can see no our thinking about restraints of only by threats of drastic Presi¬
dential action. It may take time,
justification for restrictive labor competition, today competition on
practices which seek to control the labor side of our economic but it will soon become apparent

For example,

power.

resenting

a

behind such a
strike of the train¬

The first step can

prices

worse
are

000 J&L wage-earners

tors

board and

have

In

enterprise-wide

an

stand

to

essary

getting
studies

in

restraints*

concentration

in the hands of

of

a compara¬

tively few labor leaders. If our
free economy is to -be preserved*
such labor power must be curbed.
Power

tends

to

jecting labor

corrupt and sub-

>

power to proper re¬

theory of a free economy is that
My greatest concern with this straints is just as desirable as
production of the nation.
I am convinced that some legisla- no expert or group of experts is proposal is with respect to small was the
curbing of governmental
know that building costs could be
ive curbs on union power itself capable of planning and controll¬ companies with small groups of
financial and industrial power.
reduced in many sections if re¬ •—in addition to outlawing the ing our complex economy. Deci¬ employees. I am not sure whether
Two necessary steps are clear.
strictive building trade practices i:ype of restrictive practices men¬ sions by experts on the fair re¬ the proportionately reduced size
were stopped. These evils are vio¬
tioned—are necessary, but I am ward for the efforts of labor will of both management and labor Labor leaders must be shorn im¬
not only ignore the capacities of will
lations of our social and economic not yet ready to advocate pre¬
provide a balance. I have
mediately of their power to im-,codes.
They are seriously detri¬ cisely what curbs will be most individuals and diminish freedom, some concern, also, with some few
pose
undesirable restrictions on
but also will impede the
mental to the public interest. They beneficial.
develop¬ industries like Oil refineries and
ment of the individual. The
should be eliminated forthwith.
—
restrictions
which
prin¬ hydroelectric power where there industry
Any reasonable inclusion of la¬
to

coal

.

-

legislative prohibition of bor unions within the scope of the ciple of advancement of the in¬
restrictive and
uneco¬ antitrust laws will destroy indus- dividual in accordance with his
nomical labor practices is rela¬
i;ry-wid.e bargaining and will, at ability will be superseded by rigid
tively easy to draft and will not least, reduce the authority of the criteria applicable only to workers
in
the mass.
Mistakes will be
interfere with labor's legitimate
large
in16rnational
industrial
made with grievous
aiams.
It will free many indus¬
consequences.
union's. Those will be desirable
The

are

specific

and

tries

to

available

make

the results

to

industrial

if

and

labor

public the full belief it of tech¬ power are to be fairly balanced
nological improvements. Many and a reasonably free play of eco¬
costs, now sustained artificially by nomic forces assured.
enforced waste, will fall.
Many
I

prices will be reduced.

Some new

industries will become practicable.

students of this problem
think this obvious step will cure
;

Some

of the evils which we now
Although
I
believe
such

•many

face.

in the public
interest, I am sure it is not the
oomplele answer.
While it will
contain
labor's
great
economic
power within the bounds of legiti¬
legislation

is vital

executives

that

and

many industrial
all leaders of in¬

it will have no effect
1foe present concentration and fur¬

ther growth of that power.
The

second

ing of labor's
power

measure,

the curb¬ try-wide

by restricting
itself, is a more dif¬

wildcat

conditions

It is claimed that indus¬

unions
strikes

have

reduced

introduced

and

some discipline in the labor ranks.
The principal sug¬ Union leaders find that industry¬
gestions for such legislation have wide
bargaining augments their
been alcng the lines of strength¬
economic power, facilitates their
ening and expanding our anti¬ political appeal to government

ficult problem.

laws

trust
and

to

treat

industry alike.

labor

unions

There

is,
think, a solid historical basis for
trying to solve the problem along
antitrust lines.

by

I

have

,

been

tolc

counsel that the common
law
antitrust
principles
which
really sired the English Statute
of Monopolies and our Antitrus ;

and the

industry

instead

consider

on

their

own

of

craft

were

organizations.

These




All

evils

—

to

the

controlled

economy. As the

Compulsory Arbitration Coming

are

accentuated

disasters accelerated if
that

on

wide

vehicle

basis.

on

You

all

and

embark

we

industry¬

an

will

remember

how boards decided after the war
that steel and automobile
wages
could be increased without

raising

prices.

Those

to

two

were

Another board

guesses.

raise

steel

and

bad

soon

had

automobile

prices.

individual,

the

partnership

the corporation. If it is to be

preserved, industry-wide bargain¬
ing must be ended. The problem
is

how

in

an

to

accomplish

orderly

various

reasons

that result

fashion
we

when

now

That

have

be

if

I

quite

am

devote

we

for

have in¬

cer¬

ourselves

impartial investigation of
this part of the problem in the
light of the principles outlined, a
satisfactory
be

too

solution

should > not

difficult.

Industrial Unions Should Be

much

easier

if

we

had

never

must

and find

now

stop

its

another method

spread
of

bar¬

unions

confined

to

to

forthwith

dif¬

must

start,

We

elimination

bargaining.

should

be

several

cover

industries.

the

on

wide

should

single industries and

not allowed

ferent

accomplish

of

industry¬

Whether
that

we

by

re¬

stricting the size of unions

or

including unions within the

scope

of the antitrust laws
other

however,
imposed

curb,
immediately
trial

unions.

could be
on
indus¬

Industrial

ready

industries.

There

is

al¬

excessive concentration

an

of power in the practical monop¬

for that union to extend

into

other

does

through its District 50. The

industries

it

as

now

automobile field is enough for the
United Automobile Workers,
which

now

plements
The

in agricultural

and

curb

directed

is

at

other

suggested,
the

weaken

by

by

some

further

scope

the

on a

comprehensive and

of

incentive

our

system

of

free enterprise is to be preserved..

unions

should, by legislation, be confined
to a single industry. There is no
economic
or
social
justification
for
permitting the power of a
single
union leader
to
cover
several

or

requires

means

promptly
ture

One

im¬

industries.

although
of

unions

cannot

We

trial

thorough basis if the basic struc¬

Restricted

and thus at their economic power,

allowed the system to develop.

ma¬

study. Such study should be started

many

be

production,

an

dustry-wide

bargaining
in
so
industries. Our task would

control

terials, prices and quality. Indus¬

suggested.

satisfactory pro¬
bargining strength

obtained.

tain that
to

been

might be

vided balanced

harmful

believe in free enterprise for

and

ployers

represent¬

or more em¬

oly of coal mining labor by the
United Mine Workers. It is clearly

Free Enterprise Threatened

I

Nevertheless, in my opinion, in¬
dustry-wide unions and industry¬
directed primarily at wide
bargaining will inevitably

law and statutory

then

and weak

the

com¬ lead to
compulsory arbitration. We
principles may struggle against that undebroke up the ancient craftsmen sired result.
We may delay its
guilds which in the 15th Century
coming, but if we cling to indus¬
dominated
and
restricted
trade
try-wide bargaining, compulsory
and competition, ; At that time
arbitration
will
come.
Labor's
mon

can

forced

merits.

limitations for unions

tion—and
—

situations

being

individual

study of that phase of
problem. I know that size

the

directly

an

adequate

ing the labor of two

public, and permits them
criteria for a single

to

relatively few employees. I

difficult, if
not
impossible.: Compulsory ar¬
bitration of wages will lead to
control of prices—then of produc¬

to use general

my

Law3

be

unions

to the same wages and

of labor.

power

will

system progresses, it is inevitable
claim
that that the
political power of labor
there are benefits to the public, to
will be displaced by an accumula¬
labor and to industry in industry¬
tion of precedents leading to
rigid
wide bargaining.
Some industrial and uniform rules.
stability is assured, even though
Those
are
the
clear
conse
for relatively short periods and at
quences of compulsory arbitration
the expense of competition.
It is,
of economic issues on any basis—
of course, easier for an industrial
company, plant or industry-wide.
company
to negotiate with one

dustry-wide

union than many and to know that
on
its competitors will be subjected

macy,

that

realize

Corrections

aggregations of capital

large

have not been able to make

bargaining

needed
to
protect
the
workers. This is admittedly not a
solution of_the problem but it will
power

help to prevent the situation from

Monetary Fund Assets
The International Monetary
Fund
of

reported its

July

31

at the

total assets

as

equivalent of

U. S. $8,044,092,509 in a quarterly*
statement
for
the
period
May 1 through July 31.
The

Fund's

balance

from

sheet

for

July 31 listed assets in the form
of $1,448 million in gold, $5,525
million

ties

in

currencies

and

$1,070 million
scriptions receivable.
and

securi¬

in

The statement showed that

purchase
4,907,510
U.S.
of

of

Costa

Rican

sub¬

a re¬

colones.

by Costa Rica against
$855,000 and 542.857 ounces
gold (equivalent to $19,-

fine

000)

was
the
only transaction
during the quarter.
Currency purchases by member

governments

hav>=:

totaled

$72$"

million since the. Fund began ex¬

change. operations in March, 1947..

,

THE

Number 4834

Volume 170.

(869)

FINANCIAL CHRONICLE

COMMERCIAL &

29

Indications of Current Business Activity
statistical tabulations cover production and other figures for the latest week or month available (dates
either for the week or month ended on that date, or, in cases of quotations, are as of that date):

The following

shown in first column are

Equivalent to—
' *• •
Eteel ingots and castings (net

r

Week

Year

Month

Ago

Sept.

Y

:.

Sept.

tons)

'

4

V

86.3

1.498,800

4,684,700
5,148,000

5,521,300

18,301,000
1,491,000
5,807,000
7,489,000

17,742,000

95,132,000

OF

NEW

Imports

PETROLEUM INSTITUTE:
Crude oil output—daily average (bbls. of 42 gallons each)
Crude runs to stills—daily average (bbls.)
Gasoline output (bbls.)
_
Kerosene output
(bbls.)
Gas, oil, and distillate fuel oil output (bbls.)
Residual fuel oil output (bbls.)
Stocks at refineries, at bulk terminals, in transit and in pipe
Finished and unfinished gasoline (bbls.) at

AMERICAN

(bbls.)

Kerosene

at

.

(bbls.) at

oil, and distillate fuel oil
Residual fuel oil (bbls.) at
Gas,

4,722,900

Aug. 20
Aug. 20
Aug. 20
Aug.20
Aug. 20
Aug. 20
lines—
Aug. 20
Aug. 20
.Aug. 20
Aug. 20

115,241,000
'

4,722,900

«

18,195,000
1,634,000
6,042,000
7,4%,000

5,227,000
18,383,000
1,383,000
5,724,000

7,282,000

CONSTRUCTION

ENGINEERING

CIVIL

shipments
warehouse

Dollar

108,174,000
25.329,000

110,569,000
24,544,000

73,815,000

69,365,000

59,086,000

67,818,000

68,517,000

Total

52,172,000

establishments as of July 31
In public storage as of July 31
:
Cotton spindles active as of July 31

$131,819,000

$95,191,000
39,974,000

48,024,000

69,140,000
12,376,000

61,870,000

19,872,000

18,028,000

•

(U. S. BUREAU OF
and lignite (tons)

OUTPUT

X

MINES):

:

Aug. 20
Aug. 20
Aug. 20

(tons)

anthracite

Pennsylvania
coke

Beehive

(tons)

_—

RESERVE

-FEDERAL

STORE SALES INDEXTEM—1035-39 AVERAGE=100

DEPARTMENT

6,995,000

8,000,000

7,550,000
794,000

696,000

1,059,000

10,700

*9,800

5.900

Spinning

spindles in

23,500,000

spindles

19,012,000

23,648,000
19,464,000

23,798,00c

Spinning

5,637,000

7,506,000

7,923,001

255

337

3&t

149,500

place on July 31
active on July 31
(000's omitted) July—
spindle hours per spindle in place, July
spindle hours

Aug. 20

U.

BOARD

271

207

'218

Aug. 27

(in 000 kwh.)_.

Electric output

5,578,800

5,523,316

5,477,741

5,518,485

:

:

<

INC.

STREET,

BRAD-

Aug. 25

—

iron (per gross ton)
Scrap steel (per gross ton)—
Pig

Electrolytic

(bushels)
(bushels).—

tin

Straits
Lead

(St.

Rice

$44.52

Sorghums for

$21.17

$19.33

$43.16

Hay, all (tons)
,
Hay, wild (tons)—
Hay, alfalfa (tons)
Hay, clover and timothy (.tons)
Hay lespedeza (tons)
:
Beans, dry edible (100 lb. bags)
Peas, dry field (100 lb. bags)—
Soybeans for beans (bushels)—.
Peanuts (pounds)

$21.92

York)

Aug. 24

17.325c

•17.325C

17.550c

17.550c

17.550c

23.425c
103.000c

Aug. 24

103,000c

103.000c

103.000c

—Aug. 24

15.125c

15.125c

14.000c

19.500c

Potatoes

14.925c

14.800c

13.800c

19.300c

Aug. 24

at—————:

Aug. 24

10.000c

10.000c

-—

at——.i~

•

■-*" U.

15.000c

9.500c

>

AVERAGES:

Sugar

103.75

103.70'

103.19

114.85

114.85

113.8ft

111.44

Aug. 30

120.84

120.84

120.22

116.22

Aug. 30

119.00

119.00

118.40

114.46

_

Aug. 30

(tons)

Apples, commercial
Peaches (bushels)
(bushels)

Pears

109.42

109.60

108.34

107.09

Aug. 30

115.82

115.82

115.43

111.81

119.41

119.20

118.40

115.24

Aug. 30

2.23

2.24

2.27

2.45

Aug. 30

2.91

2.91

2.96

3.09

Aug. 30

Groups------i—-L.—

110.34

105.00

composite nidwr-rrr_

2.61

2.61

2.64

2.84

Aug. 30

Utilities

Public

112.93
105.17

Aug. 30

Railroad Group

Piece

2.70

2.70

2.73

2.93

3.01

3.15

Industrials Group
',

7

''.* 7"

V

•

'7", 7 Vy'7

•

-■

::

'

7":';

U.

Bonds——

Government

S.

corporate

Average

—

.—_————~

Aug. 30

V.

goods

2.95

Aug. 30

3.38

3.38

3.44

3.45

Infants'

Aug. 30

3.20

3.19

3.26

3.33

Home

-Aug. 30

2.86

2.86

2.88

3.07

Piece

Aug. 30

2.68

2.69

2.73

2.89

Aug. 30

Railroad Group
Utilities

Public

Z

—

Group

Industrials Group

?

216

Percentage' of activity-

■

-

Unfilled

—Aug. 20
Aug. 20

orders

186,039

169,424

188,028

181,138

158,764

185,537

87

04

76

93

Aug. 20

Aug. 20

—

(tons)

Production

-

(tons).

received

Orders

lY

310,125

—*

.

at——

(tons)

•:

INDEX —1926-36

PRICE

REPORTER

DRUG

AND

PAINT

>AVERAGE. =1(|()

,<

.

'

Number
Dollar

i

goods

value

Customers' short sales
Customers' other sales—..
Number of shares—Customers' total sales

::=Y

j

>ACustomers'
;

"

=

I

short sales

Dollar value

-

Round-lot sales by dealers—
•

•

v

sales

Other

$18,090,645

19,279

16,061

iy

471,820

$17,508,389

''■■■ft

198

jY

/

145

252

,

PRICES

NEW

;

5,456
441,408

$14,571,925

S.

DEPT.

15,739

457,449

neckwear

:

9,645

191,590

166,940

158,020

191,590

1661940

158~020

133,820

206,550

203,460

178,870

-Aug. 23

—

commodities

Textile

wear—

products
and

Metals

Building
All

materials

:

,

—

.

————————

—

-

other

Grains

J
•'

\

Livestock

±

and

:

—

POLICYHOLDERS
Death

202,480

Benefits

—

pears
1946

1941
to

to

figure.

date.

...




*

-

.

-

.

.

144.6
147.7

150.4

154.6

155,6

118.9

123.5

130.1

130.1

130.9

139.9

1140.4

140.6

134.9

135.7

133.1

$124,888,000
42,636,000
8,347,000
20,868,000
51,571,000

$119,043,000
37,318,000
7,385,000
19,998,000

$124,695|^

'r,

PAYMENTS TO
1,

—

—-J.,

„—_—

payments

——

—

37,117,006

8,114,000
19,512.006
43,032,001

152.8

169.8

160.1

164.3

191.2

—

56,118,000

52,497,006

$304,428,000

Surrender values ———:———
Policy dividends

■:

48,593,000
42,061,000

$274,398,000

$284,967,006

$1,252,000

$1,184,006

396,000

242,000

339,006
380,006

$r,657,000

151.9

159.8

$1,890,000

$1,903,000

$60,700

$88,353,050"

—

r

—

'161.2

189.8

144.9

145.1

153.4

139.1

148.8

23
23

139.0

130.0

130.0

130.6

136.4

INSURANCE PURCHASES — INSTITUTE
OF LIFE INSURANCE — Month of July

23

167.9

167.9

167.9

172.0

(000's omitted)—

189.6

190.1

190.4

204.1

23
23

124:0

124.1

124.2

135.4

149.1
203 4
224.8
191.0

146.1

152.8

204.6
224.4
189.5

' 207.8

([Includes 469,000 barrels of foreign crude runs. tThe weighted finished steel composite
The weights used are based on the average product shipments for the 7 years 1937 to

1948 inclusive.

121.1
144.6

•

INSTITUTE OF LIFE

endowments

Matured

Total

——

225.4
183.4

• ■,

Y >'

.

Ordinary

$M22,000

—

Industrial

—

,—

179,000

173.7

276.1

282.4
211.0

revised for the
1940 Inclusive and

was

/

LIFE

TREASURY
OF U.

Net

TRANSACTIONS IN DI¬

MARKET
AND

RECT

Net

♦Revised

1316

ii9.9

;•

154.1 ii

—-_—-—

—_—

INSURANCE—Month of June:

Y".::»,v;Yf-''

skins

166.1

131.5

,.118.7

161.0

Aug. 23
Aug. 23
Aug. 23
Aug. 23

Meats

Hides

131.5

168.5

144.6

—------1—

——r-—

139.7

'XV'K"-*

—

127.3

132.0

•146.7

Group

Bpecial indexes—.

155.3
132.0

119.8
-

—

144.9

Aug.
Aug.
Aug.
Aug.
Aug.

.

"

lighting materials
metal products—

and

Fuel

129.7
127.9

—

Aug. 23

other than farm and foods

140.4

154.1

.mi niiHiw

.i

161.3
All

;'-C:139.7

131.1

."i

-

INSURANCE—BENEFIT

LIFE

151.9

products

140.8

131.8

coverings

Annuity

commodities

•Farm

130.0

140.7

168.5

——

Luggage' ?—-----:
Electrical household appliances

453,297

$16,821,401

W2.7

134.8

127.9

■

438,237

133.0

140.7

129.6

-

—

overalls

children's

146.8

132.4

139.7

M

108.0

142.4

134.4

.—

caps

Radios',

4,152

$14,148,078

1926=100:
All

-,

104.2

139.2

——-,

Underwear

Floor

■

-A

and

Furniture

16,327

447,882

.

LABOR—

OF

140.6

133,820

,

SERIES-—U.

162.6

141.9

131.9

i
—

...

Disability payments
WHOLESALE

106.3

167.4

103.3

113

-

"

7,537
536,855

•

16,440

Aug. 13

Round-lot purchases by dealers—
Number of shares—

139.$

440.5

|

Socks
-

15,991

446,864

544,392'

$17,485,755

■

15,916

19,081

Infants'

$22,062,222

_Aug. 13

sales

—

1372

140.2

148.6

V

142.4

—

.—.—

SJnOCS

545,052

v

Aug. 13

of shares—Total

Number

•

473,645

$21,453,998

"''v.'-'

Yr'. YY'! Yv= V

118.7

:

141.4

....

——^—

Clothing, including

19.117

16,205

16,382

19,296
567,437

Aug. 13

.

and

and

Hats

—Aug. 13
Aug. 13

Customers' other sales

-

■;

.

448.6

165.7

—

—

—

Shirts

Aug. 13
Aug. 13
Aug. 13

i

,

j

130.7

146.2

—-

and

Underwear

144.3

'

.

--1304

144.2

153.9

Aug. 13

,

.

Odd-lot purchases by dealers (customers' sales).
Number of orders—Customers' total sales

.

133.2

147.4

;
■

Underwear

Aug. 13

shares

of

140.$

131.7

140.2

and housedrc^s
and brassieres-

Aprons

,

Aug. 13
Aug. 13

orders

of

Number

139.5

117.8
.

„

Corsets

128.5

129.2

(customers' purchases)—

Odd-lot sales by dealers

131.3

-

—

Men's apparel—

FOR THE ODD-LOT ACCOUNT OF ODDLOT
DEALERS AND
SPECIALISTS ON THE N. Y. STOCK
EXCHANGE—SECURITIES
EXCHANGE COMMISSION:

1*1.5

138.2

145.5

wear

Hosiery

362,761

274,741

311,124

129.3

Aug. 26

STOCK TRANSACTIONS

247

130.1

—

Furs

OIL,

r^-.f

139.4

comfortables———
apparel—

Women's

m

130.5

and silks—

'Blankets

175,762

.

177,607

137.7

(£!•—
——r

Domestics—

152,210

218

139,238

Shfeets

ASSOCIATION:

PAPERBOARD

RATIONAL

225

'

_*

children's

wash

2,995

131.2

goods—

Cotton

88,40?
65,352
26,3^4
3,0*4

76,250
33,685

230

—

—

and

•Rayons

424.3

342.1

338.9

339.0

>

1:

furnishings

Woolens

Aug. 30

INDEX.

COMMODITY

MOODY'S

„

—

-

1935*39=101)

apparel
Women's apparel

121,081

"••%

49,81V

3,051

Men's

2.95

'

—

(JULY

OF

9,42?.

^

9,585
49,050

34,208

RETAIL PRICE
(COPYRIGHTED)
I
f

PUBLICATION

INDEX
AS

3,504
220,30 i

2,338,47$
445,090
49,80:
1,981,731
6,8^7

43

48,865

75,063

(tons)-.
J—

(pounds)

FAIRCHILD

DAILY AVERAGES!

BOND YIELD

MOODY'S

368,696

51,938
2,025,429
8,032

427,823

(bushels)

(tons)
—
(12 States) (tons)

Apricots (3 States)
Pecans

v

7,6fi7
20,83:

3,104

9,758-

;

1-1

114.08

106.21

99,6*'
12,04)
34,00^
29,30

=

37,057
24,873
7,532
19,149

36,906
25,224
7,927

2,018,597
8,032

*

—

114.08

106.21

Cherries

97,671
12,976

—-—

Aug. 30

Grapes

J

1,776,910
362,534

—

—

crop

131,644
"

19,756
3,256
202,386

Y

Hops (pounds)

52,53:

6,3^

51,924

—

Aug. 30

/

; -

i

(tons)—

26,38)

1

seed (tons)

for sugar and

corn

19,735
45,558'
86,032

12,682

(bushels)

cane

Broom

100.71

Aug. 30

Bonds

Government

S.

Average corporate

r

potatoes (bushels)—
Tobacco (pounds)
Sugar beets

MOODY'S BOND PRICES DAILY

(bushels)

grain

Sweet

at

at_

Louis)

23.200c

17.325c

—Aug. 24

(East St. Louis)

Zinc

.—

at

York)

(New

(New

Lead

3.720c

$45.91

Aug. 23

,—1

at

refinery

refinery

Export

J-

3.705c

244,104

41,924
88,165
113,780
97,952

(bushels)

3.705c

$45.91

'44,74,
253,301

1,491,7Si
317,037

4,810

(bushels)

$45.91

1,379,672

18,831

;

t3.705c

3,650,9^8
1,288,40«
99O.0&
298,30)

,

.

1,308,608
232,787

1—_————

—

(bushels)

Buckwheat
Flaxseed

copper—

Domestic

—

Rye

QUOTATIONS):

(E. & M. J.

PRICES

METAL

42,278
194,678

spring (bushels)
(bushels) —r-

Aug. 23

(per lb.)

Finished steel

236,956

—

.Aug. 23

IRON AGE COMPOSITE PRICES:
.

168

193

176

96

1,188,690
932,095
256,595
48,766
207,829

:

894,874

:——

((bushels)
(bushels)

Barley

&

3,530,185

3,538,257
1,131,830

^—j

Other

Oats

INDUSTRIAL)—DUN

AND

(COMMERCIAL

FAILURES

(in thousands):

As of Aug. 1

—

spring

Durum

ELECTRIC INSTITUTE:

S.

—

Corn, all (bushels)
Wheat, all
(bushels)—.
Winter
(bushels)
All

EDISON

21,328,001

CROP REPORTING
DEPARTMENT OF AGRI¬

PRODUCTION

CROP

CULTURE

251

559,1%

550,606

16

12,387,000

1,172,000

SYS-

190,26'.

(DEPT. OF COMMERCE):

SPINNING

COTTON

1

COMMERCE):

Running bales (exclusive of linters to Aug.

Active

Bituminous coal

July

OF

(DEPT.

GINNING

COTTON

6,759,000

55,657,000

month of

In consuming

Active

COAL

71^40

21,327,001

of Jmy 31

as

Linters—Consumed

699,252

Aug. 25

,

,

68,138

19,464,000

4,143,183
103,143

900,663

81,516,000

Federal

public storage

884,175

of July 31

as

558,004

Aug. 25

and municipal

State

establishment

718,516

55,217,000
48,458,000

Aug. 25

76,661
19,012,000

July

of

728,029

51,921,000
79:898,000

„

627,462
1,471,9»
l,333,94t
86,414

237,131

500,495
1,058,697
4,406,538
121,992
254,106

BALES

month

consuming

17,762,000

$235,350,000

COM¬

OF

DEPT.

—

RUNNING

—

566,163

$137,173,000

——

L1NTERS

AND

MERCE

Lint—Consumed

13,066,000

$197,930,000

455,106

22,382,000

$147,684,000
79,788,000
67,896,000

Aug. 25
——

construction

Public

13,429,000

$193,659,000

.

—

COTTON

9,937,000
674,000

7,029,000

and shipped between

stored

countries

571,474

Aug. 25

construction

Private

68,000

::

goods

on

ioreign

9,020,000

ENGINEERING NEWS-

—

46,693,000
9,374,000

1

credits

exchange

Based

7,269,000

In

construction—

U. S.

9,845,000

■

731,215

RECORD:
Totai

$150,910,000

46,768,000

30:

:

Domestic

1,988,000

25,822,000
75,312,000
68,157,000

Aug. 20
Aug. 20

(number of cars)

$121,154,000

9,650,000
9,289,000
456,000

of July

YORK—As

—

Domestic

5.648,000

107,612,000

RAILROADS:

(number of cars)
received from connections

freight loaded

Revenue

Revenue freight

Ago

BANK

RESERVE

FEDERAL

—

OUT¬

Exports

In

ASSOCIATION OF AMERICAN

Year

Month

$116,656,000

ACCEPTANCES

DOLLAR

STANDING

1,716,000

1,563,300

Previous

44,179,000

BANKERS

1,591,000

4

Latest
Month

95.2

81.3

84.8

~

Ago
-

(percent of capacity)

Indicated steel operations

Previous
Week

Latest

STEEL INSTITUTE:

IRON AND

AMERICAN

GUARANTEED

S. A.—Month of

July:

SECURITIES
-

•

<

-

sales

purchases

——

-

•Revised figure.

,

t-J—-

—

-

———

$5,436^50

30

(870)

THE

Our

Reporter

COMMERCIAL

By JOHN T. CHIPPENDALE, JR.
Prices of Treasjr.v obligations continue buoyant with the longer

eligibles hanging close to or edging through previous highs. .
.
Volume has not been too heavy although spirited activity has been in
evidence in the shorter-term issues.
Investors, have bedn doing
.

.

.

.

There

.

to

seems

eligible bond, with
,

high

as

.

.

as

.

Savings
restricted

banks

continue

making good sized

purchases

the

be

leading

and casualty
of these

buyers

companies

securities.

.

of

of

sharp de¬

the return

tracks

through

farther from the present level.
So
long as the readjustment

influenced

be

with

deficit

a

of

$1,800

be

...

the

action

of

the

forces
1

operating in the

the 2%% due 1956-59, which were purchased in the amount
$155 million with Federal, the savings bau»vs and other in¬

of

vestors, including dealers, supplying these securities.
next most popular issue

acquired to

the

savings banks
Then

...

4

[ other investors

The

called

expect

will

offer

and

were

again

Federal, the
principal sellers.

the

Vfo% due 9/15/67-72 and this bond

the sellers in that order.

taken

was

gations,

banks, Federal and

for

.

the

Federal and the

...

former, while the latter issue

savings banks sold

supplied by other investors

was

and savings banks.... In the partially exempts, the
largest purchase
was made in the 2V2s due
12/49-53, and Federal was the main seller.
♦,.

.

Then

the 2%%

came

due 3/55-60, with fire insurance and

cas¬

ualty companies the principal liquidators.... The 2%% due 12/60-65
and 9/56-59 were let out

primarily

From

that

now

by the commercial banks.

,

.

I

.

banks

sets

in,

forced to

which

and

creases

may

a

cause

trouble,

ty )e
them

particularly,
c e-

good homes are

more

available for sale.

the

Treasury

medium-term

which

will

obli¬

suitable

be

commercial

the

one

banks.

in

holdings

of

government

volume

an
flow

return

a

of

loans

of

bring

increase

the

volume

in

about
of

an

industry today is

con¬

find

for

same

further

intensified

movement

from

on

is

liquidation

of

of

the peak and that

in the year an increase

volume

the

loans

is

in

likely to

place. The volume of bank
deposits, in all probability, v ill
higher at
the end of the year than at pres¬

re¬

increase and should be

problem.

further

level,

obliga¬

this

conditio

take

inadvisable to lower

rates

present

later

in money rates has

It would be

the

loans has passed

themselves
faced
problem. The need

earnings is great and the

cent decline

economic

of

that

assume

ering costs of production and op¬
eration, the banks throughout the
with the

tbe
co

prevailing in the country. Since
the readjustment through whi h
the economy is now passing is not
likely to go too far, one m.iy

fronted with the problem of low¬

country

that

as

industry/and trade in
The activities
of
t le
be greatly under the

influence

bank

confronting

same

will

banks

Operating Costs of Banks
as

the

general.

deposits. ~">

Just

is

fronting

from

currency

will

problem

banks

as

inflow of gold and

circulation,

change in the refunding policy
interest
of
the
Treasury
is
therefore
bound to lead to*an increase in the

the

by

as

Conclusion
The

ent. The

problem of earnings v. ill'

continue to be

the

because

pressing

a

one a

id

lead to further bank mergers
throughout the country.
: V

such
a
might force some of the

may

.

tions by the banks, thus causing
an increase in the volume of bank

deposits.

Problem of Farm Abundance

;

The economy of the

country is
still in the midst of a readjust¬
ment. It is unlikely, however, that dance
the readjustment will go very far.
In
all probability,
before many

(Continued from page 9)
of

grain is herelo stay. Let's

be realistic

about that.

the

people. I am reminded of a
about the English writer,
Thomas Huxley, who dashed from
a railroad station and jumped into
a
cab.
The startled cabbie, who
probably had been quietly dozing,

We sim¬

story

months
ward

SAVINGS BANKS ACQUIRE RESTRICTEDS

on

when the cost of construction

a

ply cannot expect our normal corn
have passed the down¬
crops in the future to drop back
swing will come to an end to a level of approximately two
and the economy will eventually and one-half billion
bushels. We

'

buy mortgages of

later

considerable

ac¬

increase in busi¬

an

other

of

which not only are in¬

desired. Banks may also be

be

to

on

when the

moderate increase
volume of loans is to be

crease

re¬

into

on

.

.

next in line.

of

task

A

...

followed, and $71 million were bought
by the deposit institutions with other investors, and Federal the
principal liquidators.
The 2s due 9/51-53 and the 2I/4S due
were

the

obligations

may v

million

$138

investors

The 2s due June 1952-54

6/52-55

with

certificates.

other

the

came

.

the Treasury will be

years

w^s the 2% due 12/15/52-54, which was

in the amount of $82 million with savings

on

.

coming

of

extent

and

.

refunding operations of the

confronted

was

activity,

again

acquisition

the

herently more risky than govern¬
ment obligations but whose mar¬
ketability also leaves a great deal

volume

the accumulation

and

companied by
ness

well

funding a large volume of matur¬
ing and called obligations. Hither¬
to, it has been the policy of the
Treasury to convert maturing and

The most favored obligation among the eligibles during May,

..

contrary, the debt

Treasury will likewise undergo a
considerable change. During the
1

In the bank eligible issues, as was to be expected the deposit
were the main buyers, and Federal the largest seller.

.

The

money

institutions

turns

inventories

is

is bound to increase.

.

.

Whether or not
will result in a

however,

year,

many banks, finding
unsatisfactory, will e.i-.V
their earnings

It is

lic debt. On the

May was the first month following the announcement (in late April)
by the Federal Reserve Board, of lower reserve requirements, in
the

deficit

to state.

Ownership of government securities on May 31, 1949, recently
published in the Treasury Bulletin, showed some interesting changes

observe

larger.

the

•

increase

to

securities

in the
as
,yet impossible
The
increase
in
the
fairly certain, how¬ expected.
ever, that the Treasury will not holdings of government securities,
be in a position to reduce the pub¬ accompanied
by a moderate in¬
cash

CHANGES IN INVESTOR HOLDINGS

.

1949-50 will probably

year

much

downward

downward,

drifting

in

the budget deficit

...

from

will continue-to decline. Later

continues

The longer World Ra"ks ronf'nue to be in good demand, this time
from out-of-town institutions.

to

kept

of loans of the commercial

of

markets.

and

It is quite

banks.

possible that if the rate of return
medium- and long-term gov¬
obligations
continues

deavor

As

suitable

particularly

ernment

duction costs, were stopped in Its-

•.

.

future?

the

;

not be

on

a

minor decline in commodity prices
and a moderate reduction in
pro¬

-

-

about

trend

which

brought in its wake

In

crease.

million, while the deficit for the

.

has

an

for commercial

a

fact, it would

fiscal

at the end of the previous month.

or

readjustment,

which

short governments and a few of the longs are still being made by
life insurance companies, to make way for other investments. ...

from the positions reported

is

economy

depression

1948-49

also

Sales

.

.

the
a

be regrettable if the

to

a

considered

for

by
business
activity and by the fiscal position
of the Treasury. In spite of the
high level of business activity the
Treasury ended the fiscal year

the

of
are

began
volume

that

headed

serious recession. In

seek

banks to

to

.

to

bonds, although fire

securities

government

conclusion
not

per¬

funds in assets which may

tivities of the banks will continue

looking for higher prices in the not distant
Others believe quotations for the longest 2y2s are about
they are going to go.
some

.

were

outlet for their

savings in the hands of
individuals, one must reach the

holdings of

bank

increase, while the
bank loans showed
What

differences of opinion over the most distant

be

government
mitted to rise,

Banking?

the huge

of

prices

lowered,
securities

were

1949^

Thursday, September 1,

the past, so in the future, the ac¬

.

spot buying in the bank obligations, with the 2%s due 9/15/67-72
apparently getting more attention than the other longer eligibles.

future.

CHRONICLE

(Continued from first page)
ments

.

FINANCIAL

What's Ahead for

Governments

on

&

In the restricted bonds
during May, savings banks were the stabilize itself at a level some¬ have had an agricultural revolu¬ jerked to attention, whipped" up
what higher than at present but tion in this
largest buyers, with the 2% % due 12/6^-69 in the number one
country—a revolution his horses, and off they went 'at
spot
probably lower than prevailed of new varieties, new procedures, top speed. Huxley poked his head
followed by the 2 %s- due 12/63-68.
These acquisitions were $56
toward the end of 1948.
and the advance of the machine.
million and $50 million
| out of the window, "Where are we
respectively.
Then came the 2y2s due
An agricultural revolution of this going?"
Economic Forces and Govern¬
.

,

.

...

6/64-69 with $41 million, the 2V2s due 6/62-67 with
$34 million and

smaller amounts of the

which were sold as were the 2y2s due 6/67-72.
Federal and the
life insurance companies were the
principal sellers of the ineligible
.

.

.

issues with the former the
only liquidator of the 2Vis due 6/59-62,
and the 2y2s due 6/62-67.
The 2y2s due 12/63-68 and the
2y2s
.

due 6/64-69

also

were

.

.

sold in the largest

Life insurance companies
due

.

the

.

.

2y2s

12/64-69, the 2%s due 3/65-70, and the 2y2s due 6/67-72 and
:

Fire arid casualty
the top issues during
in

in this

due

6/67-72.

due

1959/62.

.

.

.

.

.

'
were

with
.

.

the

fairly sizable buyers of
largest

Other

.

'

'

companies

May,
2V£s diue 6/67-72.

prominent
•

volume by Federal.

the principal suppliers of

were

12/67-72

made

nature

ment

qther issues, except for the 2Vis due 12/59-62

acquisition

investors

were

being

likewise

picture, being the largest buyers of the 214s
They were also the largest takers of the
2Vis

.

The

end

Action

of

the

back

readjustment

will be brought about in part by
the

strong economic forces oper¬
ating in the country.In part, how¬
ever, it will be. due to interven¬
tion by the Government and Coilgress in utilizing their vast pow¬
to

prevent a sharp decline in
business activity and commodity
prices.
ers

The

government deficit is not
when compared with the
public debt or the national income.

large

Yet

the

shift

mere

to

deficit

nancing is bound to have
on

the

attitude

of

an

fi¬

effect

people

many

and
one

MARKET AT STANDSTILL
'*

Although

market

was

considerable

activity

borne

out

in

by

transactions, prices made practically

the

government

of

some

the

afore¬

no progress in

either

direction... .; Switches and Federal's
supplying of the market with
needed issues kept
quotations on an even keel.
.

Although

considerable

demand

still

exists

1962-67 and 1963-68
through new funds and by

for

the

prices

for

stricted
bonds

more

these

opinion

the

the

1953

securities

obligations.
and

at

still

.

.

hold

2V&s

due

.

Since

of

many

longer

these

than

are

.

the

are

are

now

are.

points

eligible

in¬

from

spread

re¬

of

at

the

current

^

the- 2V4s

due
of the

in. favor
obligation is helping to consummate these
transactions.
The slightly longer time
before the 2V4s due
6/15/64-69 become eligible does not seem
to have any appreci¬
6/15/64-69 restricted
.

of

town

commercial

...

banks

have

aggressive in the longer end of the list.
funds

are

the

to

construction

ber of homes all

Coupled
ditures

.

.

been

somewhat

still being put into the shorts
by these institutions.




more

Nonetheless substantial

in

set

of

over

the

motion

large

a

num¬

the country.

large

expen¬

for

building activity at
The

Aiken

Bill

a

high level.

will

probably be
changed, and, with certain excep¬
tions, the support prices of farm
commodities will not be permitted
to go as
turn

to

low

as

will

farmers.

fourth

60% of parity. This
high income

assure

Whether

round

of

not

or

wage

in

money

the cost of

of

real

money

income

of

the

and

and

wages

dollars

an

in¬

has

for

of

income

jobs.

other

words, farm spending
provides jobs for about 10 million
industrial workers. That is a good

thing for city folks to think about.
But it seemS to

good

me

for

farmers
that there is also

to be

to
a

equally

understand

definite

rela¬

for

European Recovery Program and

One

the
ever

When I asked you a little while

tary, I
a

was

yourself in
very

my

place

seriously what

you

trying to

were

Secret

convey to you

little of the

feeling of responsi¬
that I must have toward
farmers—all farmers—and toward
bility

while.

guide posts in our.
since the 1930's, has

a

principle: The countryright to expect a farm sta-,
make a con¬

bilization program to

tribution

national

to

stability. V '
r

\

In the past

witnessed

a

economic

,
,

18 months
decline

in

we

the

have
Bpr-r

have

this fact

cited

occasions.

I

on

numerous

going to keep on
citing
it
until
the
country. is
aroused to the threat implicit in.
am

this trend.

>

Last year net farm

income de¬

clined—the first drop in 10 years.

people—toward all the people of In the first half of this year the
decline has continued, and net "in¬
States of America.
-

the United

come

What Program?

for farmers has

run

at least

10% below the first half of 1948.

.7- It is not hard to devise a pro¬
The farmer's share of the con¬
gram—just any kind of program. sumer's food dollar is less now
But it is really an exacting task than at
any time in several years.
to

devise

a

good program

for all

•

you've

this

been

has

over a

of

thinking,

,

children—after

your

mulled it

.

of
agricultural
tionship between the number of chasing, power
people employed in industry and products. If allowed to continue,
this trend; might be a source pf
the level of farm income/ '
*
1 [*}
danger to the entire country.
I

re¬

the

or

three

every

farm

adds up to about one million

In

would do if

Government

purposes

billion

you

mained unchanged. If to these fac¬
tors one adds the
large expen¬

military

income

put

persons

re¬

cently that at the present level of

think

of

income

have indicated in other talks

to

clined, this has resulted in
crease

whose

was

,

to

living has already de¬

know," yelled the cab"but I thought your honor
in a hurry."

capacity for abundance is
It may be all right for some
here to stay, we must make our folks
to gallop off in any direc¬
plans on that basis. Moreover, we
tion, but that is not the way to
must look not only at one partic¬
work
out
a
well-rounded farm
ular phase of agricultural abun¬
program.
•
'
dance, but at the picture in its en¬
If you were recommending a
tirety. We dare not stop in our
farm program to serve all the
thinking with the corn farmer, or
people of the nation, what princi¬
with the hog farmer, or even with
ples would you set up as guide
all farmers. Our thinking must go
posts? I know it isn't quite fair
all the way to the final consumer
to ask you such a question point•—the housewife and her
family blank. But I don't expect you to
gathered around the kitchen table.
answer right off.
I would like you
In our economy today it is sui¬ to think about it—and answer it
cide to think only of ourselves. I
for yourselves—or for your wives

and

since

"I don't

bie,

can

If the

increases

and

wages,

turned I

be

more

return to
the gas lamp and the 14-hour day.

ago

take place
is still a moot
question. It is fairly certain, how¬
ever, that there will be no reduc¬

tion

no

a

will

ditures
.

with

inflation. The

public works by the
various political subdivisions, this
program
promises
to
maintain

....

able effect upon these
swops.

Out

deflation

in

restricted

evidently

attractive

/

.

1952

acquire the

more

.

switches
two

can

eligibles

6/15/64-69

more

with

that

levels than the earlier eligible
taps.

9/15/67-72, the

due

eligible taps, because of the lower

compared

Investors

the

2 %s

switches from other

issues, mainly the bank obligations,, non-bank investors
clined to look

of

Housing Law will

there

during May, and this is

mentioned

change their psychology from

can

than industry

The

buying

power

of farm prod-

170

Volume

Number 4834

?

-

v

V

^

assured on commodities be the kind of program the coun¬
in
approximately try understands and can honestly
three-fourths of all larm income. endorse. I snould lixe to point out
Mind you, I did not say that we
In addition to the crops assured to you that ever since 1933, the
are already at the point of danger.
of support under the Act of 1948, farm programs enacted into legis¬
But how much farther dare we
lation
have
been
supported in
we wouid provide assured support
permit this decline to go? When
Congress by many Congressmen
on meat, milk, and eggs.
are we going to put on tne brakes?
A
second
guide
post in our wno do not have any farmer con¬
After
months
of
consultation
stituents whatever.
Without the
and study with various experts in thinking about a farm income pro¬
"support of tnese far-signted rep¬
and out of the department, we gram is that the nation has a right
resentatives, and in the face of a
10 expect to help provide a more
have come to the conclusion that
diet
for >; the
whole constant corps of opposition, hard¬
there is a level below which we adequate
ly one of our present farm pro¬
should not permit farm purchas¬ people. Over and over again, we
nave
.seen
conclusive
evidence grams wouid have been written
ing power to fall. We have urged
into law. I am talking about the
that
.Ifp American people want
adoption of a minimum income
wnole list: tne Commodity Cred¬
standard which would give agri¬ more meat, mnk, eggs, and cer¬
it Corporation, conservation, the
culture the same average purchas¬ tain fruits and vegeiaoles. As the
level
of. income
rises,
families school lunch, Farmers Home, crop
ing power it has had, not in a
insurance,
rural
electrification,
period 35 or 40 years ago, but in a spend more on these foods. But
and so on. And I say to you very
more adequate diets obviously re¬
comparatively recent period. We
plainly tnat if we are going to
have
proposed a movauie
bas^ quire larger production, together
with prices that are fair to con¬ keep the support of these Con¬
period—one that will always be
gressmen, we must make sure that
recent—the first 10 years out of sumers, while at the same time
our
farm
policies combine fair
the past 12. Thus, in 1950 prices returning an adequate income to
prices to the city consumer and
would
be
supported at a level producers.
In order to step up production, efficient operation by government.
which would give farmers as much
The country has a right to ex¬
buying power as they averaged producers need to be assured of a
steady supply of grain. They have pect, also, tnat a program of farm
from 1939 through 1948.
right to expect adequate re¬ price and income stability be tied
The income floor for 1950 would a
be a goal of slightly more- than serves close at hand—and this im¬ up with conservation and that it
plies the kind of storage that I minimize the opportunity for non$26 billion. That is about 15% less
than last year's total income. It is spoke about in the early part of cooperators to share the benefits
this talk.
'
"" " ' ■
» of
a
program created and made
about
equal
to
the purchasing
Many of you recall vividly the workable by cooperators. To both
power agriculture had in 1942.
That may seem high to some autumn of 1946 when the average these ends, the production pay¬
ment method of support is
ex¬
folks, but actually it is about the price of corn was about $1.25.
tremely applicable.
same as 90% of parity. I know that Many of you probably bred sows
on that basis with the expectation
Illinois farmers are better off than
If
than at any point in port

nets is lower

tne last seven years.

*

be

which

■/.S*,?

\

.

bring

you were

national

the

average.

But in

our

legislation we have to think of the
whole farm population. And the
fact is that last year, with farm
cash income at its all-time high,
per

capita income of persons on

farms

much

as

than

less

was
as

three-fifths

capita income of

per

those who did not live

on

he

these lines.

q£

A Defense

threw to the hogs. He was not
have heard the conten¬
tion
that
all
that
government surprised to find that he didn't
owe .'Uncle. Sam much in taxes at
ought to do for farmers—and for
the nation—in the way of price the year's end.
That situation was bad for farm¬
supports is to set up a "stop-loss"
ers.
It was bad for the country.
program. This means, apparently,
The supply of meat was short, and
that government ought to do no
the price was high. Then in 1948,
more than cover the cash costs of
we

with

an

all-time record corn crop,

I

am

the

And

putting
work the accumulated savings

to
of

our

policyholders, we have as¬
enlarging the real na¬

follows

income

productivity,
ductivity is

of

capital

ergy
have
flourish.

both

is

citizens.

important
is

It

you

as

or

in

in

his

be

no

the

vironment and

to

than

customer

ceptive

far more re¬

a

be¬

ever

fore?

this

is

Nor

of

basis

is

income

fixed

it

because

is

The

temporary.

national

increased

the

permanent,

and

the

Whatever- the

short

variations

range

eco¬

and it
is probable that we will have our
booms and recessions, the bene¬

nomic

effects

plant

will

may

of

be,

enlarged

such

and

outside

of

proposals
the

felt

for

years

to

come.

Con¬

We in the department have
no
pride of authorship in this
matter. Our only aim is to present
to the American people proposals
which we believe will strengthen

be

Some

have

increased

the

upon

individual

free

a

as

depends

can

largess

passionately
is the pro¬

to feel that he

wants

his fate, beholden to no one and
free from the servility that goes
with

economic

is known

This
Ameri¬

dependence.

the system of

as

opportunity.

can

This is the system
life

life insurance, by

mechanism

modern

a

which made
possible and in its

insurance

turn

asked whether the

these problems has
the likelihood of Fed-^

producing any given commodity.
present farm legislation. The very era! regulation of our business.
But this would allow nothing the situation was quickly reversed. fact that
you have invited me to Federal regulation,- if it were ever
for wages or farm living expenses. If the production of corn in 1947
speak today indicates that you ex¬ to come, would not be a mere
1948 had just been turned
It would mean that the average and
pect me to play this kind of role; substitute for State regulation. It
farmer could face the kind of sit¬ around, we would not have a stor¬
It is a healthy sign when pro¬ would,
of course, be superim¬
age problem at this time. This is
uation
that
confronted
him
in
posed on — not substituted for—
an object
lesson in the national posals for a program of farm in¬
•1932, and so long as he made
State regulation.
If wise regula¬
come and price support make the
need for big grain reserves.
enough on a crop to pay the cash
headlines and arouse debate as tion is good, and I believe State
But what I have been trying to
cost of producing it, his income
It indicates that regulation of life insurance by
ooint out is the simnle fact that they do today.
"tyould be at the "stop-loss" level—
and large has been both wise and
in addition to ample grain re¬ farmers and city people alike are
.even though his family had noth¬
thinking about our greatest do¬ good, a doubling of the dose, as
ing to eat and no clothing or shoes serves, hog and. milk producers mestic
problem—the problem of many a doctor knows, does not
need a positive program of realis¬
to cover themselves.
<
always improve the prescription.
living happily with abundance.
In 1932 it took 80% of all the tic, adequate, and efficient in¬
Indeed it may kill the patient.
come protection, They need a pro¬
So I urge you, all of you, to
money farmers received just to
All regulation tends to rigidify
gram that encourages jmore con¬ think not only about my proposals
pay the cash costs of production.
but about each and every program the operations of the life insur¬
Even in good times, it takes more sumption of pork, milk, and eggs.
which has been offered for con¬ ance companies, or of any regu¬
than 50%. Mind you, I'm not talk¬ That is why I have urged that
these perishable products be sup¬ sideration. I urge you also to be lated industry, and to decrease the
ing
about
debt
repayment
or
maintaining investments in build¬ ported not by the loan and pur¬ vigilant in defense of all the farm opportunity for experimentation.
chase method; but ^ by means of programs you already have.
The Freedom of experimentation by
ings and machinery or about fam¬
payments directly to the pro¬ opponents of progressive farm leg¬ individuals and by companies has
-

•/,

furnishing
for indi¬

security, has supplied the

vidual

sinews of life to that system.
Both

forces

field

the

and

insurance

the

of life

Office management

Home

companies are given a
of

The successful discharge

trust.

that trust

means

than

more

a suc¬

cessful life insurance company.

It

the very continuance of our

: "

opportunity.

of

of

vider of his family, the master

Most

existence

there

For

ones.

human dignity or real

system of individual freedom

Regulation

;

at will either for himself

real

means

Question of More Federal

gress.

to

limitations of the State. Man

and

and

necessary

enough

needs and to
such store in time of need

present

loved

wants

income

billion — you are
quite a different en¬

in

than

more

security where the satisfaction of

of $81

1940

selling

on

even

or

billion—as

national

with

contrasted

in

1949

dig¬

the

the right to create by man's

labor

own

draw

neighborhood of $220

to

develop
individual
security
through individual effort.
This

life insurance salesmen,
selling a product
which depends upon income. Can
there be any doubt that with na¬
income

important

to

to

because you are

tional

en¬

nity of tne individual is tne right

important satisfy his

equally

ana

permitted

been

per¬

invest¬

to

economy

genius

pro¬

to you as

not at all disheartened by

in

less

No

kind

because we

free

a

individual

means

ficial

my

exercised

where

ment.
This

because of the

great

have

national

increased
real and

and

the

fruit

manent

be¬

never

This is because real

fore known.
national

scale

a

is

of people we are, and

in

sisted

tional income to

"

to

page 8)

ica

by

Secretary of Agri¬ continuing result of a nationally
enlarged
productive
plant.
In
short, as a nation, we are on a
new and vastly higher leyel of
production and consumption.

opposition

Direct

(Continued 1 rom
inflation.

batted

'

Now

31

Insurance Investment

good-sized crop coming culture, you would try to keep all
up.
But in 1947 the corn crop was these facets of the problem in
bad. By late summer of 1947 corn mind. You would strive for a
pro¬
prices climbed very high. And I gram that meets all those condi¬
have no doubt that some of you tions. I
say to you very frankly
finally paid as high as $2.75 a that I am going to continue work¬
bushel.
As one farmer so elo¬
ing to the best of my ability to
quently told me, he dropped tears improve our farm program along
of another

with every scoop of $2.75 corn

farms.

(871)

THE; COMMERCIAL & FINANCIAL CHRONICLE

people

—

and
<

especially those

outside the

United States •—live

today in

insecure world. After

20

an

and war,
they desire security above all else.
This
demand for security is a
years

of depression

great ground-swell that is sweep¬
ing the earth. Politicians, alive to
the

people

the

promise

danger,

they want. But their
kind of security—based on social¬
ism- or
the
so-called ' Welfare
State—can1 be obtained only by
the security

relinquishing freedom and killing
the system of individual initiative.
/ Freedom

.

vs.

Security

.

ily liying---pnly about cash costs

'

Of

i

producing

a crop,

So the question becomes:

high

does

have

to

/losses?
loss"

a

How

"stop-loss" program

before it really stops
Just what is the "stopgo

level?

like

I'd

to

the

have

"stop-loss" experts declare them¬
unvarnished Amer¬

/

selves in plain,

ican language.
"We Must Be Realistic"
'

For my part,

I believe

we

must

be realistic—and that means rec'

ognizing that if we subject larm¬

iers

to

starving-out process—as

a

ducers..

islation

,

to rest. As you

never seem

of per¬ perhaps' know, the old issue of
through loans and pur¬ subjecting farmer cooperatives to
taxes
has -"been
raised
chases, in most cases, we have no income
place to go with the surplus. We again in the present session of
can't throw it on the market. That Congress—and by an Illinois Con¬
would be the same as holding up gressman at that. It doesn't stand
prices with one hand and pushing much chance of getting anywhere
them down with the other. So the in this 81st Congress. But it is an
only alternatives are to take the object lesson in the necessity of
commodities off the market and eternal vigilance.
put .them in storage—which, of
If you
are
open-minded and
course, is impracticable in the case
vigilant, in conjunction with other
of perishables—or give them away farm and
city people in all the
to
the
people of foreign lands. 48 States of the Union, I have no
When we are striving to prevent
doubt but that eventually there
widespread starvation in foreign will come forth the most adequate,
When we support prices

ishables

"stop-loss" -concept
seemingly implies—we will be en¬ lands, this
procedure makes sense. realistic, and efficient farm pro¬
dangering the economic welfare But in all normal
situations, it gram that can be devised.
of the whole nation, and beyond
seems
to me that ; our first aim
It will be the kind of program
that of the whole Western World.
should be to make sure that our
you would like to see—if you were
And while we are setting things
people at home are well fed,
\:
Secretary. .straight, let me point out that my
It will be a program that will
Advantages of Brannan Plan
proposal does not, as some oppo¬
nents have said, guarantee farm
The production payment method wed this nation firmly to agricul¬
income. Our program isj designed would permit the prices of such tural abundance—to have and to
hold—for the betterment of all
to serve one principal purpose- perishables
as
meat, milk, and
that
is to
give the ? American eggs to fall to their normal supply- the people's economic life.
farmer
a
better opportunity to and-demand level. It would make
earn
a
reasonable return on his it possible f()r consumers to eat
With J. Earle
this

vague

~

May & Co.

abundant

production.

the surplus and thus have the ben¬

^

efits

of abundance.

I

should

we

make

which
tion

have
v *V

are

of

to

up

have

a

the greater por¬

agricultural income.
We
therefore,> that sup-

urged,
"

>




-

v

class

PALO
V.

farm

guide post in developing
is that it should

program

Chronicle)

ALTO, CALIIF.

Petermann

ciated
601

legislation.

A third
a

to The Financial

was

with

J.

has

—

become

Earle May

John
asso¬

& Co.,

Bryant Street. Mr. Peterman

formerly with First Califor¬

nia Co.

:

v

,

,

heart of our Ameri¬

regula¬
tion, which tends to restrict such
experimentation and develop a
uniform pattern for everyone in
system, and too much

the

bring

to

our

ment to an

lation

is

very

dangerous.
it could

extremes,

this disadvantage

has

but,

pattern of regulation
does not tend to be the same over
such wide areas, the possibility of
because the

experimentation

is

largely
'

v

served.

pre¬

*

The creative urge, the

possibil¬

developing

realizing

of

ity

;

fail to per¬
freedom, no

worthy of the name is
possible. For freedom and private
initiative are
necessary for the
security

rate of production out of
real security for
all is
fashioned. So those who give up
high

'

which

lose their security
ll... J ;•

their freedom,

too.
Freedom

in

hand

and

hand.

security
Life

can

go

insurance is

living proof of that. Under the N
system in America,
the people create their Own se¬
growth and develop¬ curity through life insurance and
end. Even State regu¬
at
the
same
time provide the

industry,
carried

If

and

ideas, is one of the strongest
in human nature. It induces the

new

the

free enterprise

capital that nurtures private en¬
terprise, and raises the standard
of

living

so

that everyone can

live

Thus,
they
maintain complete freedom, and
enhance their own economic op¬
portunities. The distinction be¬
tween false security
under the
dead hand of bureaucracy, and
better and

while

be more secure.

achieving ; security,

of energy and the real security created by a dy¬
ingenuity in individ¬ namic economic system, is one
uals and organizations. It is, even that we, as life insurance people,
more than the profit motive, one
must make clear to the people of
of the things that has made this America.
'
country great. There is perhaps
expenditure
exercise of

«

,

nothing that stifles this creative
California
power, this energy and ingenuity, Two WitH FVst
much as bureaucratic controls.
(Special to The Financial Chronicle)
;
Once we are told exactly what
SAN
FRANCTSCO,
CALIF.—

as

we

can

and can't do, once we are

the rigid controls which
bureaucracy tends to impose, the
creative spirit, the spirit of ex¬
perimentation, dies — and when
bound by

like

minimum
income standard below which it is to point out, moreover, that this
pot in the interest of the nation procedure is much cheaper than
to fall, we must obviously provide any form of stamp plan, and that
suoport
on
those
commodities it also eliminates the difficulty of
If

(Special

been the very
can

What many people
ceive is that without

that dies, progress

dies along with

look at some
controlled industries

it. We have only to

too-closely

today. Let no one fool us, Amer-

Vincent B. Hackett

and Laurence

J. McNamara have become
ated with First

Montgomery

affili¬

California Co., 3Q0

S'reet.

Mr. Hackett

with

Bacon & Co.

and in the past was

with Barbour,

was

formerly

Smith & Co.

'

>

J2

•

New

.'.y

York City

:-v'

notiiication) 500 shares of 6% cumulaand 500 shares of com¬
par value). Price—$100 per unit of one

Aug. 26 (letter of

preferred stock (par $100)

jLve

stock

mon

preferred and one common.
Underwriter—
Proceeds—To promote and stage an exposition to

of

jiare

rlone.
uG

(no

known

as

the

Office—1674

impositions as the director may approve.
x>roadway, New York, N. Y.
Anchor Steel

Dearborn, Mich.

& Conveyor Co.,

of notification) 10,000 shares ($1 par)
common stock.
To be sold by Francis I. LeVeque, Dear¬
born. Underwriter—Bradley Higbie & Co., Detroit.
(letter

July 21

Y. City

Axe-Houghton Fund, Inc., N.

9

29 filed 981,301 shares of common stock, par $1.
Underwriter—Leffler Corp., New York City. Business—

Aug.
An

management investment com¬

open-end diversified

pany.

Minden, Neb.

Bird Extracting Corp.,

25 (letter of notification) 250 shares of common
tLock.
Price, at par ($100 per share). UnderwriterHone. Proceeds—To buy and install machinery.

Aug.

9

Proceeds—For working capital.

&

Consolidated Gas
Oklahoma City,

Bonanza

Mining Co., Salt Lake City,

Utah

At market

price of about eight cents per
Proceeds—To develop oil and gas hold¬

writer—None.

ings. Office—209 Atlas Bldg., Salt Lake
Bondstock

Price will vary as

City, Utah.

Wash.
($1 par) common
&

Co.,

Expected Sept. 12.

Cooperative G. L. F. Holding Corp., Ithaca, N. Y.
29 filed 44,088 shares 4% cumulative preferred
stock.
Offering—To be offered at $100 to farmer and
non-farmer patrons of the G. L. F. Exchange and its
affiliates. Underwriting—None. Proceeds—To replenish

June

market price varies.

Y.
par) common stock.
and farmer patrons.
be added to working
capital and used for general corporate purposes, includ¬
ing payment of $12,693,000 in loans to an affiliate. Co¬
operative G, L. F. Holding Corp. Price—At par. State¬

stock.

1,500,000 shares (5c par)
jxfcnmon stock.
Price—20 cents per share.
Underwriter
—Batkin & Co., New York. To repair and renovate mine
company and to exercise option to purchase processing
32.2X1 and move and erect such mill on the company's

Providence, R. I.
Aug. 22 (letter of notification) 2,400 shares of common
stock, no par value. Price—$15 per share. Proceeds—To
selling stockholder. Underwriter^—Brown, Lisle & Mar¬
shall of Providence. Office—9 Codding St., Providence,
Builders

Iron

Foundry,

ix.i.

Buzzards

Bay Gas Co.,, Hyannis, Mass.

'

July. 26 (letter of notification) $220,000 3%% Series A
25-year bonds, due 1971. Underwriters—To be offered
under competitive bidding and sold for not less than
'par. For payment of outstanding notes.
Canam Mining Corp.,

Ltd., Vancouver, B. C.,

Canada";-.--

"

Aug. 29 filed 1,000,000 shares of no par value common
stock. Price—800,000

cents per
.

4

shares to be offered publicly at 80

share; the remainder

registered as "bonus
shares." Underwriter—Israel and' Co., New York, N. Y.
Proceeds—To develop mineral resources.
are

Carnegie Mines Ltd., Montreal, Canada
April 27 filed 500,000 shares of common. Price—60 cents
share. Underwriters — Name by amendment. Proseeds
For working capital, exploration, development

per

—

Power &

Light Co., Raleigh, N. C.

filed 30,000 shares of $5 preferred stock (no
par value) and 200,000 shares of common stock (no par
value). Offering — Terms to be filed by amendment.
Aug. 23

Underwriters—Merrill
of New

N. C.

Lynch, Pierce, Fenner & Beane,
York, and R. S. Dickson & Co., Inc., Charlotte,

Proceeds—For construction.

Colonial

Expected this month.

Acceptance Corp.

ible cumulative class A

common stock (convertible into
share-for-share). Price—$5 per share. Under¬
writers—Sills, Fairman & Harris, Inc.; Straus & Blosser;
Mason, Moran & Co.; and The Marshall Co. Proceeds—
For expansion and working capital.
Office—208 So. La
Salle St., Chicago.

.common

9

Consolidated

Drug Co., Inc., Wilmington, Del.
; Aug. 23 (letter of notification) 2,000 shares of common
.stock (with no par value indicated). Price—$10 per
share. Underwriter

business.

President (selling stockholder).
Under¬
Hammill & Co., Los Angeles.

x

Edgewood Junior College, Barrington, R. I.
(letter of notification) $182,800 6% first mort¬
gage serial bonds.
Underwriters—Pilgrim Land Devel¬
opers, Inc., Cranston, R. I., and A. C. Beals Co., Inc.,
Providence, R. I.
To pay off mortgages.
Emerson Radio & Phonograph Corp.
June 7 filed 235,000 shares of capital stock. Underwriter
—F. Eberstadt & Co., Inc. The terms and price of the
offering have not yet been determined, but the stock
will not be sold below the market price on the New York
Stock Exchange at the time of the offering. Proceeds—
The shares to be sold are from holdings of Mrs. Benjamin
Abrams, Mrs. Max Abrams and Mrs. Louis Abrams, wives
of principal officers and directors of the company, and
do not involve new financing by the company. Following
sale of the shares, the Abrams family will own approxi¬
mately 25% of the company's 800,000 shares of common)

Aug. 3

stock.

yy-yy

Fair Finance

•

—

None. Proceeds

Office—900 Market

—

To finance the

St., Wilmington, Del.

Co., Akron, Ohio

Aug. 22 (letter of notification) $250,000 of 5%
debenture notes. Price—At par, plus accrued
Underwriter—None.

series A

interest.
increase capital for

Proceeds—To

expansion purposes.

Gas^-Servlce Co.,

Kansas City, Mo.

(9/19)

12 filed $18,000,000 25-year first mortgage bonds
1974.
Underwriters—Competitive bidding.
Prob¬

Aug.
due

Halsey, Stuart & Co. Inc.; Union Securities

Corp. and Harriman Ripley & Co. (jointly); Merrill
Lynch, Pierce, Fenner & Beane and White, Weld & Co.
(jointly); Blyth & Co., Inc. and Kidder, Peabody & Co.

(jointly); Lehman Brothers and Stone & Webster Se¬
curities Corp. (jointly); First Boston Corp. Proceeds—To
be used to repay $13,800,000 of 2V2% to 3% notes, due
1950-56, and $1,000,000 of 2% notes due 1950, and the
balance for the company's construction program.
•

Aug. 15 (letter of notification) 60,000 shares of convert¬

,

Krieger,

writer— Shearson,

able bidders:

*nd other purposes.

Carolina

G.

•

Co., Cleveland, O.

Great Lakes Towing

value

outstanding fractional shares.
Price—$20 per share.
Underwriter—None. Proceeds—For working capital.
Atlantic Transportation

Co., Jacksonville,

Florida

May 31 filed 620,000 shares of class A participating ($1
par) stock and 270,000 shares (25c par) common stock.
Offering—135,000 shares of common will be offered for
subscription by holders on the basis of one-for-two at
25 cents per share. Underwriters—Names by amendment,
&

include John J. Bergen & Co. and A. M. Kidder
will buy the remaining 135,000

Underwriters

Co.

an

plus unsubscribed shares of the new common.
price of class A $5. Proceeds—To complete
ocean ferry, to finance dock and terminal facilities,

to

pay

shares

Offering

obligations,

current

and

to

provide

working

capital.
Haimes

Litho Laboratories,

of

Aug.

3

(letter

class

A

common

non-convertible

New York.
»

Bost6n

Philadelphia
,*

Pittsburgh

San Francisco

Private Wires to all offices




Chicago

Cleveland

notification)
stock;

Inc., Wash., D. C.

2,950

shares

($5 par)

shares ($5 par) class B
at 5% accumulative) and

6,950

(preferred

1,749 shares of class A "voting stock."
The latter is to
be offered by Sidney S. Haimes, President and Treas¬
urer.
Price, all classes, $5 a share.
Underwriter—Ed¬
ward A. Jacobs, Washington, D. C. For additional equip¬
ment and working capital.
Hancock

Aug.

•

15

common

Oil

Co.

of

Estabrook

&

Co.

Proceeds—For

Haskelite

Manufacturing Corp.,
Michigan

value

new

To go

Grand

Rapids,

(letter of notification)

1,000 shares of $5 par
per share.
Under¬
Co., Inc., Chicago.
Proceeds—
to James T. Wilson, the selling stockholder.

common

writer—F.

S.

stock.

Yantis

Price—$2.62 V2

&

Hawaiian Electric

Co., Ltd., Honolulu
series E cumulative ($20
par) preferred and 50,000 shares of ($20 par) common.

June 21 filed 150,000 shares of

Offering—Preferred will be offered to preferred holders
at l-for-3 rate and common will be offered to common
stockholders at l-for-9 rate.

Underwriters—Dillon, Read
buy unsubscribed

& Co. Inc. and Dean Witter & Co. will

preferred; unsubscribed common will be sold either at

public auction or to the underwriters. Proceeds—To pay
off short-term promissory notes and to carry merchant
dise inventories and receivables or to replenish treasury
funds. The balance would be used for other corporate
purposes or construction.
Heidelberg Sports
Pittsburgh,
June 25 filed 5,000

Enterprises,

Inc.,

Pa.

shares of class B common stock (par

$100). Price—$100 per share. Underwriter—None. Pro-*
ceeds—$600,000 to be used for spectator grandstand and

Heliogen Corp., New York
4 (letter of notification) 2,000 shares of capital
To be offered present stockholders only.
Price, par. Underwriting, none. Corporate purposes, in¬
cluding advances, maintenance of laboratory, etc. Office,
17 West 60th Street, New York.
i

v

Aug.

stock (par $5).

Idaho-Montana Pulp & Paper Co., Poison,

Mont,

(by amendment) 180,000 shares ($10 par) com¬
to be offered at $10 per share and 20,200
shares to be issued in exchange for $170,200 first mort¬

Nov. 23
mon

stock

gage

bonds.

Underwriter—Tom G. Taylor & Co., Mis¬

soula, Mont. Proceeds—To erect and operate >a wood
pulp mill at Poison, Mont. Statement effective Aug. 23.
Illinois Wyoming

Oil Co., Chicago, III.

Aug. 15 (letter of notification) 300,000 shares of class A
common stock (par 10 cents).
Price—$1 per share. Un¬
derwriter—Leason

& Co., Chicago.
Proceeds—To lease
properties from the State of Wyoming. Office
So. La Salle Street, Chicago, 111.
, v

oil and gas
—39

Kaman

Aircraft

Corp.,

Windsor,

Locks, Conn,

May 23 filed 170,456 shares of class A non-voting com¬
mon stock (10c per share non-cumulative dividend) and

/11,362 shares of class B voting common stock. Price,
$5.50 per share. Underwriter—None; Purpose—To ac¬
quire machinery, tools and equipment; to buy land and
buildings; to produce 30 helicopters and accessories; to
complete engineering changes; to setup sales and serv¬
ice departments; and to train service personnel^
Keller Motors

Corp.,

Huntsville, Ala.

Under¬

May 10 filed 5,000,000 shares (30 par) common.
writer—Greenfield, Lax & Co., Inc., New York.

Price—
$1 per share. Proceeds — To purchase additional plant
facilities, tools, dies, jigs, etc.; the balance for working
capital.
Kenilind Oil & Gas Co., Inc.,

New York

*

Aug. 3 (letter of notification) 600,000 shares of common
stock (par 100).
Price—500 per share. Drill test well,
etc.
No underwriter at present.
Names to be furnished
when

underwriters

Lexa Oil Corp.,

common

and may

and

are

engaged.

Office, 400 Madison

Avenue, New York.

for

Gulf

stocky

Stanley & Co., Blyth & Co., Inc., Drexel & Co., Chas.-

Scranton

W.

(letter of notification) 44 shares of $100 par
capital stock to be offered in exchange

26

Aug.

Light Co.

balance for related purposes.

Douglas Oil Co. of California
Aug. 12 (letter of notification) 10,000 shares of common
stock.
Price—$3.30 per share. Proceeds—To Woodrow

(letter of notiiication)

property and for working capital.

19.

ment effective Aug.

Business—Non-

Bradshaw Mining Co., Tonopah, Nev.
3ct. 8

Statement effective Aug. 19.
Federation

Cooperative Grange League
Exchange, Inc., Ithaca, N.
June 29 filed 1,200,000 shares ($5
Offering—To be sold to members
Underwriter—None. Proceeds—To

Wash.

Tacoma,

Electric

construction.

Aug. 25

notification) 300,000 share of common
stock (par 10 cents). Price—$1 per share. Underwriter
—George J. Martin Co., New York City. Proceeds—To
pay debt, for additional equipment, etc. and for working
capital. Office—630 Fifth Avenue, New York 20, N. Y.

diversified closed-end management investment company.

.

Underwriter

N. Y. City

Inc.,

off fractional stock-;

(par $50). Price—By amendment. Underwriter—Putnamj
Co., Hartford, Conn., and others to be named by
amendment. Will probably include, among others, Mor-I

York, N. Y.

Aug. 19 (letter of

Corp., Tacoma,

Aug. 5 filed 300,000 shares
Underwriter—Frank
Russell

v®

Hirschfield, President.

Television,

Convertible

Hartford

gan,

(letter of notification) 1,600 shares of common
stock to be offered at $11.75 per share for account of

the owner, Norman

pay

Aug. 25 filed 160,000 shares of cumulative preferred

Aug. 11

working capital.

of non¬
Price—
share. Under¬

Aug. 22 (letter of notification) 200,000 shares
assessable common capital stock (par five cents).

9

•

Utilities Corp.,
Okla.

—P. F. Fox & Co., New

Proceeds—To

holders in cash for stock dividend issued.

.

Blue

9

Angeles, Calif.

such other

Harlem Trade Fair, and

ISSUE

Pasadena
Aug. 25 (letter of notification) 400 shares of common
stock (par $1) to be sold to Clifford E. Berry, Pasadena,
at $13.75 per share, who, in turn, will sell these shares
through Hopkins, Harbach & Co. for public offering.
Consolidated Engineering Corp.,

•

Expositions, Inc.,

Consumers

American

SINCE PREVIOUS

INDICATES ADDITIONS

•

Registration

in

Now

Securities

Thursday, September 1, 1949

& FINANCIAL CHRONICLE

COMMERCIAL

THE

(872)

California

(letter of notification) 160 shares of class A
stock.
Underwriter — Akin-Lambert Co., Los

Denver, Colo, h

Aug. 19 (letter of notification) 1,200,000 shares (par onecent). Price—25 cents per share. Underwriter—Tellier
&

Co., New York, N. Y.
for working capital.

and

Denver, Colo.
•

Proceeds—For drilling wells

Office—229 Cooper Building,
Expected Sept. 13.
•/;

Liberty Loan Corp. (9/21)
filed 100,000 shares of cumulative convertible
preferred stock. Price—At not more than $15 per share.
Underwriter—Riter & Co., New York. Price—By amendAug. 31

Volume

Number 4834

170

THE

COMMERCIAL

&

sequent to April 30, 1949.

FINANCIAL

Sale deferred until later this

($25

•

Electric Co. (Ky.)

share

Common

September 13, 1949
Light Co

&

Common

September 19, 1949
Co

Bonds

..Bonds

Wisconsin Public Service Corp

Bonds

September 21, 1949
Liberty Loan Corp

New

Preferred

1949

Utah Power &

1G,

Eq. Tr. Ctfs.

Light Co

Bonds

& R. C. Miller &
•

Gas

&

bidders:

stock,

11, 1949

Arkansas Power & Light Co
October

Bonds

Texas & Pacific Ry

.Equip. Trust Ctfs.

Sudore Gold

as

Louisville Gas & Electric Co. (Ky.)
(9/12)
Aug. 4 filed 250,000 shares (no par) common stock, to be
sold by Standard Gas & Electric Co.
Underwriters—
Names to be determined through competitive bidding.
Probable
bidders:
Merrill
Lynch, Pierce, Fenner &
Beane, Union Securities Corp. and White, Weld & Co.
< jointly); Lehman Brothers and Blyth & Co., Inc.
(jointly); Otis & Co.; Glore, Forgan & Co. and W. C.
Xangley & Co. (jointly).
Proceeds—To
be applied
toward Standard's corporate indebtedness.
MacFarlane's

Candies, Oakland, Calif.
July 18 (letter of notification) 9,545 shares ($1 par)
common
stock. Price—$9 per share. Underwriter—Ste¬
phenson, Leydecker & Co., Oakland, Calif.
Matheson Co., Inc., East Rutherford, R. J.
Aug. 16 (letter of notification) 3,000 shares of non-con¬
vertible 6% cumulative preferred stock (par $20) and
€00 shares of common stock (no par value). Price—At
$100 per unit of five shares of preferred stock and one
share of common stock. Underwriters—Mohawk Valley
Investing Co., Inc., Utica, N. Y., and Security & Bond Co.,
Xexington, Ky. Proceeds—To erect a chemical plant and
for general corporate purposes. Office
337 Paterson
Plank Road, East Rutherford, N. J.
,m
„

Maumee Oil Corp., Toledo, Ohio
•?
May 12 filed 8,000 shares (no par) common, of which
only about 2,614 shares will be offered publicly at $100

X-

-

share.

No underwriter. For general working cap¬
hearing June 6 to determine whether
{a stop order should be issued suspending the effective¬
ness oi the registration statement.
per

ital.

SEC

held

Mellin's Food Co. of North America, Boston
Aug. 1 (letter of notification) 10,000 shares of 5% cumu¬
lative preferred stock ($10 par). Price, par, with a mini;mum purchase of five shares. For working capital. No
underwriter. Office, 41 Central Wharf, Boston, Mass,
Me

Hospital, Upland, Calif.

Aug. 4 (letter of notification) $150,000 of 4% 25-year
sinking fund debentures. To construct a new hospital.
*No
•

underwriter.
Mutual

Plywood Corp., Eureka, Calif.
(letter of notification) 1,000 shares of common
stock. Price—At par ($100 per share). Underwriter—
None. Proceeds—To construct a plant.

29

National

Exhibitors

Film

Corp., N. Y. City

100,000 shares of no par value common
Price—at $100 per share.
Underwriter—None.

Aug. 19
f

stock.

filed

Proceeds—To finance

production of motion pictures by
others and to provide materials and talent services.
'Business—To boost the supply of films available for
the exhibitors who are expected to buy this stock.
New

England Gas & Electric Association,
Cambridge, Mass.
Aug. 10 filed 124,601 common shares of beneficial inter¬
est ($8 par).
Offering—To be offered present stock¬
holders at rate of

one

new

share for each 10 held, with

oversubscription privilege on a sharefor-share basis. Offering price to be filed by amendment.
Underwriter—A dealer managers group headed by A. C.

holders allowed

an

Allyn & Co., Inc.
term

notes

and

Proceeds—To

make

additional

pay

Price—$1
Underwriting—None. Proceeds
applied to the purchase of equipment,
road construction, exploration and development.
—Funds will be

•
Texas Fund, Inc.,
Houston, Texas
Aug. 29 filed 200,000 shares of common stock, par $1.
Underwriter—Bradschamp & Co., Houston. Business—
An open-end diversified
management investment com¬

pany.

;

Transportation Lease Co., San Francisco, Calif.
Aug. 24 (letter of notification) 60,000 shares of capital
stock. Price—At par ($5 per share). Underwriter—None.
Proceeds—To acquire outstanding stock of Trans Lease
Co. at $103 per share, and to provide
working capital.

Mills, Ltd., Tel Aviv, Israel
ordinary (common) shares, one

filed

Securities Corp., New York.

Price—$5 each.
weaving facilities.

ceeds—To expand

Pro¬

Office—350 Folsom St., San

Piedmont Aviation, Inc., Winston-Salem, N. C.
Aug. 24 (letter of notification) 75,000 shares of common
stock, to be offered to from 200 to 300 employees of the

Price—At

None. Proceeds

common

stock

invest¬

ments in subsidiaries.

New

ferred

Jersey Power & Light Co.

stock.

Underwriters—Names

cumulative pre¬

to

be

determined

through competitive 'ridding. Probable bidders: Kidder,
•vpeabody & Co.; Smith, Barney & Co.: W. C. Langley &
rCo.; Lehman Brothers. Proceeds—Will be applied to the
yment of the cost of, p^ in reimbursement of payments
ide

for,^construction of atMifipns and betterments sub¬




($1

par

per

mulative

share). Underwriter—

For working capital; Office
Reynolds Airport, Winston-Salem, N. C.
—

—

Francisco, Calif.

Trion, Inc., McKees Rocks, Pa.
Aug. 19 (letter of notification) 40,000 shares of 5%
preferred

stock

(convertible

into

cu¬

common

stock, share for share, on or before Aug. 1, 1959). Price
—At par ($5 per share). Underwriter—Graham &
Co.,
Pittsburgh, Pa., and New York. Purpose—To pay bank
loans, etc., and for additional working capital. Expected
Sept. 12.
"'.'vV-':

Smith

Plastics, Inc., Colorado Springs,

.

Aug. 4 (letter of notification) 100,000 shares of capital
stock.
Price—Par
(50 cents).
Underwriter—Newman
and Co.

2413

Farragut Avenue Building Corp., Chicago
Aug. 5 (letter of notification) 630 shares ($5 par) com¬
mon
stock.
Price—$100 each.
To be sold by Sol A
Hoffman, President; David Greenberg and Samuel J
Hoffman,
Vice-Presidents. V Underwriter
Draper &
Kramer, Inc., Chicago.

Proceeds—For additional working capital.

fice—5 W. Cucharras

Of¬
Street, Colorado Springs, Colo.

•
Pine Street Fund, Inc., N. Y. City
Aug. 29 filed 1,000,000 shares of common stock, par $1.
Underwriter
Wood, Struthers & Co. Business — An
open-end management investment company.

—

—

United Minerals Reserve Corp.,
Chicago
July 27 (letter of notification) 270,000 shares of common
stock. Price—$1 each. Underwriter—Edward W.
Ackley
& Co., Boston. For development of
mining properties. f.

•

Pittsburgh Silver Mining Co., Kellogg, Idaho
Aug. 16 (lettter of notification) 300,000 shares of capital
stock. Underwriter—None. Proceeds—For repair work,
re-timbering tunnel and further developments.

Power

Petroleum

Upper Peninsula Power Co.
■ ■. >
>
Sept. 28 filed 154,000 shares of common stock (par $9).

Ltd., Toronto Canada

Underwriters—SEC

has granted exemption from com¬
bidding. An investment banking group man¬
aged by Kidder, Peabody & Co.; Merrill Lynch, Pierce.
Fenner & Beane, and Paine, Webber, Jackson & Curtis
may be underwriters. Proceeds—Will go to selling stock¬

April 25 filed 1,150,000 shares ($1 par) common of which
1,000,000 on behalf of company and 150,000 by New York
Co., Ltd.
Price—50 cents per., sbare.;,, Underwriter shrS. G. Cranwell &

istration

petitive

Co., New York. Proceeds—For admin¬
and drilling.
Statement effective

expenses

holders.

Consolidated Electric & Gas Co. and Middle
West Corp. will sell 120,000 shares and 34,000
shares, re¬

June 27.
•

Pufahl Foundry,

Inc., Minneapolis
Aug. 24 (letter of notification) 500 units of 10-year 5%%
convertible debentures (convertible into 5% cumulative
class A common stock, par $100, par for par, until July
.1, 1954).
Price—$100 per unit.
Underwriter—None.
Proceeds—For working capital.
.
y.
Renaissance Films

Distribution,
Montreal, Que».r-.
filed 40,000 shares
(par $25)
convertible class B preferred stock and
C stock (no par). Underwriting—None.
B preferred will be offered at $25 per
,*

Oct.

Inc.,;

spectively.

5%

of

cumulative

one

Pines, N. C.
shares ($1 par)
stock, of which 50,000 shares offered by com¬
pany and 4,000 shares by George B. Wilkinson, Charlotte,
N. C.
Underwriter—Marx & Co., New York.
Price—
$5 per share. To be used for equipment and additional
working capital in connection with the company's air
cruise service. Expected this month.
54,000

Rochester

(N.

by

Gas & Electric Corp.

Y.)

Corp. to GPU

rate

Rochester

Boston

each

eight

(jointly). Proceeds—For construc¬
r'',

held

By

common

Gas

share

10

now

held, and 100,000 shares are to be of¬
Expected in September. * Un¬

R.

& Co., New York, and Wil¬
Co., Los Angeles. Proceeds—From sale
to be added to general funds.

Staats

company

Victor

Valley Housing Corp., Victorville, Calif.
(letter of notification) 100,000 shares ($1 par)
common stock.
Price, par. No underwriter. For organi¬
zational work, architects and engineers' fees on new
housing project.
;

stockholders at the

for each

16

Aug. 1

shares of

Sept. 8. Rights to expire on Sept.
amendment. Dealer Managers — First
on

...

•

Corp.; Wertheim & Co., Lehman Brothers, and
Proceeds—GPU
its subsidiary,

West

Penn

Electric Co.

(9/20)

Aug. 25 filed $31,000,000 of sinking fund collateral trust
bonds, due 1974, and 856,895 shares of no par value com¬

Merrill Lynch, Pierce, Fenner & Beane.
will increase its capital investment in

mon

Associated Electric Co., and in other subsidiaries, and to
'
*

stock.

Underwriters—Bonds

to

be

offered

under

competitive bidding; 468,621 shares to be offered present

retire bank loans.

common

St.

for

derwriters—White, Weld
liam

Holly Hill Fruit Products, Inc.

lic Utilities

—

new

fered by five stockholders.

15 filed 835,000 shares of no par value common
stock. Offering—To be offered by parent, General Pub¬

Price

one

.

for each

$298,000 first mortgage

Aug.

30.

of

Camp Sea Food Co., Inc., Los Angeles
Aug. 22 filed 125,000 shares of common stock .(par $2).
Offering—Of the total, 25,000 shares are to be sold by

par

the real property of

stock

rate

Van

($100). Underwriter—None. Pro¬
ceeds—To erect buildings, purchase equipment and buy

GPU

at

the company to stockholders at the rate of one new share

Price—At

one

13

Unsubscribed shares will be sold at compe¬

tion purposes.

Florida

Aug. 24 (letter of notification)

of

Sept.

E. H. Rollins & Sons

Ridge Citrus Concentrates, Inc., Davenport,

bonds.

.

Utah Power & Light Co. (10/10)
July 28 filed $3,000,000 first mortgage bonds, due 1979.
Underwriters—Competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Salo¬
mon
Bros.
&
Hutzler; Lehman Brothers and Bear,
Stearns & Co. (jointly); Kidder, Peabody & Co.; Equir
table Securities Corp.; Union Securities Corp. and Smith.
Barney & Co. (jointly); Carl M. Loeb, Rhodes & Co., and

common

•

\

Glore, Forgan & Co. (jointly); Kidder, Peabody & Co.
Merrill Lynch, Pierce, Fenner & Beane
(jointly);
Blyth & Co., Inc. Proceeds—For construction purposes.

Airlines, Inc., Southern

(letter of notification)

'"V:;-

and

10,000 shares of
Offering—Class

liabilities and working capital.
Resort

v;

&

titive bidding. Rights will expire Oct. 5. Probable bid¬
ders: Harriman, Ripley & Co.; W. C. Langley &
Co., and

share of class C given as a bonus with each 4 shares of
class B purchased.
Proceeds—To pay balance of current

July 27

record

shares held.

>'

share with

Power

Light Co. (9/13)
*
July 28 filed 148,155 shares of common stock (no par).
Offering—To be offered for subscription by stockholders

rfcV---v.'

.•

29

;

.

Utah

stockholders at the

of

rate

one

new

share for

each five

Regis Paper Co., New York
filed 860,000 shares ($5 par)

stock.
Offered—Offered by Eastern States Corp., Baltimore,
owner of
1,000,000 shares, in exchange for outstanding

held, and the remainder (388,274 shares) will
in exchange for outstanding 6% and 7%
cumulative preferred stocks and class A stock, on terms
to be supplied in an amendment. Unsubscribed shares

securities of Eastern States.

$1,125,000 of short-

/June 9 filed 20,000 shares ($100 par)

Ltd., Toronto, Canada

share (U. S. funds).

per

300,000
(Israeli) pound par value. Underwriter—The First Guar¬

Aug. 22
•

Mines

June 7 filed 375,000 shares of common stock.

Colorado

capital,

common

share. Under¬

York, N. Y.

Office—12

Merrill

Cotton

Pikes Peak

Proceeds—For general funds and working
well as reduction of outstanding bank loans,

ment.

per

•

Palestine

company.

13, 1949

cents

Proceeds—To build a pilot model of a
theatre television projector. Office—527 Fifth
Ave., New

•

October

10 cents. Price—50

par

writer—None.

Electric Co.

corporate indebtedness.

Co., Philadelphia.

Skiatron

Corp., New York City
Aug. 23 (letter of notification) 25,000 shares of

through competitive bidding.
Lynch, Pierce, Fenner &
Beane and The First Boston Corp. (jointly); Lehman
Brothers and Blyth & Co., Inc.; Otis & Co.; Smith, Barnew & Co.
Proceeds—To be applied toward Standard's

dian

1949

Mail pre¬

determined

be

to

Probable

June

York, Chicago & St. Louis RR
October

at the rate of

Cuba

(9/12)
Aug. 4 filed 200,000 shares ($20 par) common stock, to
be sold by Standard Gas & Electric Co. Underwriters—

Equip. Trust Ctfs.

October 4,

of

be added to working capital.
Street, New York, N. Y.

East 44th

Names

September 20, 1949
West Penn Electric Co

New York Central RR..

shares

Aug. 26 (letter of notification) 1,100,000 shares of class B
stock.
Price—At par (50) to Telecoin Corp. stockhold¬
ers of record Sept.
1, 1949, on a pro rata share-for-share
basis.
Rights expire Sept. 30.
Underwriter—None.

Oklahoma

Service

Bell Mines Co., Denver, Colo.
(letter of notification) 20,000 shares of capital
stock to be offered by Edward G. O'Brien and
20,000 by
Eugene J. Nord. Price—$1.10 each. Underwriter—E. W.

No underwriting.

Proceeds—To

1949

Indiana Harbor Belt RR., Noon (EDST)_Eq. Tr. Ctfs.

Gas

for three

To develop and oper¬
Hutton Building.

711

July 27

New York Telecoin Corp., N. Y. City

Common

Oklahoma Gas & Electric Co..

September 14,

(5% non-cumulative $100 par)

Atlantic

one

ferred plus $25 in cash.

September 12, 1949

Utah Power

preferred

Mackey, Spokane.
Office,

33

Silver

par)

stock, which Atlantic Gulf and West Indies
Steamship Lines is offering in exchange for its own

Chicago, Rock Island & Pacific RR.,
Noon (CDT)
Equip. Trust Ctfs.

mining

properties.
Spokane, Wash.

June 17 filed 190,125 shares of 5.6% cumulative
preferred

September 8, 1949

Louisville Gas &

ate

New York & Cuba Mail Steamship, New York

V

(873)

Alvin William

year.

NEW ISSUE CALENDAR

'

CHRONICLE

will be underwritten. Probable bidders for bonds:

Aug.

8

of Eastern

States

For each of the 40,000 shares

series A $7 dividend preferred

stock,
9 shares of St. Regis and $4.79 is offered; for each of the
60,000 shares of Eastern States series B $6 dividend pre¬
ferred, 8V3 shares and $4.43 is offered.
Sierra

Aug.

2

,

assessable
.

t

j.-

Madre

Getter

be

common

common

i

Co.,

shares. *.

ii.i.;-

Spokane, Wash.

400.000

Price,
"

(9«/*

par.

■ii-.M-f,

■

.J

"on-

Underwriter—
-

xii;

"1*1. ;;

'

Hal¬

Stuart & Co. Inc.; The First Boston Corp. and W. C.
Langley & Co. (jointly); Lehman Brothers and Goldman,
Sachs & Co. (jointly). Public offering expected around
Sept. 20.;< Proceeds—To redeem $5,000,000 of 5% gold
debentures, dqe 2030, at 105%; to ybuy 583,999 23/25
shares of comrhon stock of Monongahela Power Co. from
sey,

•

Mining

of. notification^

offered

(Continued oh1 page 34)

.

j

fu

'Xs? ixx—i...".2~-&

t

I. uJ> -X- £ ..^.3

•

34

West Penn Power Co.,

stocks and class

The

and to redeem outstanding pre¬
A stock not offered under the

'

exchange;

':;

certificates, series F, to be ddied Oct. 1, 1949, and
in 24 equal semi-annual instalments of $148,000
1950, ar.d ending Oct. 1, 1961.
Probable bidders—Halsey, Stuart & Co. Inc.; Salomon
Bros. & Hutzler; Harris, Hall & Co. (Inc.); Harriman
Ripley & Co. and Lehman Brothers (jointly).
No bid
mature

stock.
Price—$40 each. Underwriter—To be named by amend¬
ment. Proceeds—To qualify the company to sell life in¬
surance

11,975 shares

filed

30

($10 par)

common

each, beginning April 1,

in any state.

Telephone Co.,

Arkansas

Western

mulative

ment and

Colo.

bidding.

competitive

Stuart & Co. Inc.; The First

(9/20)

Probable bidders:
Halsey,
Boston Corp.; Blyth & Co.,

Inc., and Wisconsin Co. (jointly); Union Securities
Corp.; Goldman, Sachs & Co. and Salomon Bros. &
Glore, Forgan & Co. and Central Re¬
public Co. (jointly); Shields & Co.; Kidder, Peabody
& Co.; Harris, Hall & Co. (Inc.); Harriman Ripley &
Co., Inc. and White, Weld & Co. (jointly); Merrill
Lynch, Pierce, Fenner & Beane. Proceeds—To repay
bank loans and for construction.
Bids—Bids for pur¬
chase of the bonds will be received by company at

•

Eastern Natural Gas Co. of

ties and

stock to finance the

common

165-mile

natural

overall cost of

12

stockholders

will

,

debt

of a

as

$4.25

preferred stock.

| (jointly).
•

Of

these, 50,000 will be offered to holders of $5,000,000 of the

Prospective Offerings

underwriters:

4

White, Weld & Co. and Stone & Webster

Securities Corp.

July 28 reported company may sell $80,000,000 of bonds
to refund its first mortgage 3J/2S, due 1972.
Investment
banking groups reported as preparing to compete for a
possible new issue include: Blyth & Co., Inc.; The First
Boston Corp.; Halsey, Stuart & Co. Inc.; Morgan Stanley

Gulf

Utilities

& Co.

Co.

company may

$10,000,000

Salomon

Bros. & Hutzler and Union Securities-Corp.
(jointly); Lehman Brothers; Merrill Lynch, Pierce, Fen¬
ner & Beane; Kidder, Peabody & Co. and White Weld &
Co. (jointly); Stone & Webster Securities Corp.; First
Boston Corp.
:>> »7-;;
' / ;77.,,;7
;77^::'-;:

Electric Co.

July 27 reporter four investment banking groups are
forming syndicates to submit competitive proposals for
the underwriting of company's proposed offering of
shares.
The groups are:
Union Securities Corp.; The First Boston Corp.; Dillon,
Head & Co. Inc.; Elyth & Co., Inc. and Goldman, Sachs
& Co. (jointly).
The shares will first be offered, about
Oct. 1, for subscription by company's stockholders, in
500,000

additional

the ratio of

one

new

share for each nine held.

(10/11)
$8,700,000 bonds.
Probable bidders: Halsey, Stuart & Co. Inc.; The First
Boston Corp.; White, Weld & Co.; Lehman Brothers and
Stone & Webster Securities Corp. (jointly); Equitable
Securities Corp. and Central Republic
Co. (jointly);
&

Light Co.

June 29 reported company plans sale of

Iowa-Illinois

Aug. 8 reported

t
Carolina Power & Light Co.
Aug. 25 reported company expects to raise another $20,-

000,000 through the sale in 1950 or 1951 of securities,
principally bonds in addition to 30,000 shares of $5 pre¬
ferred stock and 200,000 shares of common stock ex¬
pected ta be offered this month. Proceeds will be used
to complete the company's scheduled $45,000,000 con¬

Hudson

Gas

Electric

&

company

•

and

Iowa

4

&

the market this
year with $7,500,000 first mortgage bonds and $3,000,001
common stock, the
latter to be sold to United Light &
Rys. Co. (parent).
Bidders for bonds may include

Gas &

Electric Corp.
authorization to issue and sell
debentures. Probable bidders:

reported

company

be

may

in

Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler:
Kidder, Peabody & Co; Lehman Brothers; Blyth & Co..
Inc.; W. C. Langley & Co., and Union Securities Corp
(jointly); The First Boston Corp.; Glore, Forgan & Co.
and A. G. Becker & Co. (jointly); Harriman Ripley &

Salomon Bros. & Hutzler and
(jointly); First Boston Corp.;
Drexel & Co. and Stroud & Co. (jointly); White Weld &
CO. and: Stone & Webster Securities Corp.v(jointly);
W. C. Langley & Co.; Harriman, Ripley & Co.; Shields

Central Maine Power Co.

Aug. 9 reported

expects to raise construction
funds" this Fall through sale of additional common stock.
Expectations are that the number of shares to be in¬
company

volved in the offering will range between 150,000 and
300,000. Probable underwriters: The First Boston Corp.;

Blyth & Co. Inc. and Kidder, Peabody & Co. (jointly);
Harriman, Ripley & Co.
Central & South West Corp.
Aug. 31, John S. Osborne, President, said: "If market
conditions are favorable, this corporation is planning to
make an offering of common stock to its stockholders
prior to the end of the year, on the basis of not more
•

than One share for each ten shares
presently outstand¬
ing," The net proceeds will be invested in the equity
of certain of the subsidiary operating companies for the

purpose of furnishing additional funds to meet future
requirements. The number of additional

construction

shares to be sold, the date of

offering and other details

of this financing will be announced at




a

later date.

Bros.

&

Hutzler

and

Union

(jointly);" Shields
& Co. and
(jointly); Smith, Barney & Co. ~
Kansas

Power & Light Co.

Weld

&

to

Inc.; Union Securities Corp. and Merrill Lynch, Pierce,
& Beane
(jointly); Harriman Ripley & Co,;
White, Weld & Co.; Blyth & Co., Inc.; Glore, Forgan &
Co.; Equitable Securities Corp.
/V
?

Fenner

.

contemplates the issuance by Nov. 15,

program. '

Rochester

Gas

&

Electric Co.

provide

portion of the funds needed for its construc¬
that $17,000,000 will be needed

a

tion program. It estimates
to

complete this program.
Texas

Pacific

&

-

<

(10/13-14)

Ry.

Aug. 23 reported that company is planning issuance <and
sale of $2,130,000 equipment trust certificates, series G.
,Probable bidders: Halsey, Stuart & Co. Inc.; R. „W.
Pressprich & Co.; Kidder, Peabody & Co.; Harriman
Ripley & Co., Inc. and Lehman Brothers (jointly); Salo¬
mon Bros. & Hutzler;
Harris, Hall & Co. (Inc.).
Union

Electric

Aug. 8 reported
end

with

a

of Missouri

Co.

company

bond

issue

will be in market before year's

of

$15,000,000. Probable bidders:

Halsey, Stuart & Co. Inc.; The First Boston Corp.; Kuhp,
Loeb & Co. and Harriman Ripley & Co. (jointly); Blyth
& Co., Inc.; Lehman Brothers, Dillon, Read & Co. Inc.;

White, Weld & Co. and Shields & Co. (jointly). ;
•

7

In

*

Utility Appliance Corp.'
August,-H.

A.

Chairman and Treasurer,

Goldman,

reports that the management has been endeavoring to

•

i secure

•

long-term financing

Vacuum

Foods

/

so as

to provide needed addl-

'

f

A

-

*•*' '

;

Corp.

—Paine, Webber, Jackson & Curtis.

Aug. 8 reported- company possibly will raise additional

Light Co;

>

-

Co.

! Aug. 22 reported company contemplating public offering
of an issue of convertible preferred stock. Underwriter

.

funds this Fall through sale of $5,000,000 bonds. Probable
bidders: The First Boston Corp.; Halsey, Stuart & Co.

Milwaukee Gas

'

.

.Aug. 25 company indiciated that it will sell approximately
110,000 additional shares of common stock prior to 1950

Co.

;
-

.

.

Corp. 7 tional working capital.

Securities

White,

\

Probable bidders:
Halsey,
Blyth & Co., Inc.; Kidder, Peabody &
Co.; W. C. Langley & Co. and The First Boston Corp.
(jointly); Union Securities Corp., Equitable Securities
Corp. and Salomon Bros. & Hutzler (jointly).

this year or early in 1950 with $12,000,000 bonds. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; The First Boston

Salomoii

(jointly). Proceeds—To be used to retire
2% promissory notes due on or before

construction

its

V Kansas City Power & Light Co.
Aug. 8 reported company probably will be in market later

Corp.; Glore, Forgan & Co. and W. C. Langley & Co.
(jointly); Lehman Brothers and Bear, Stearns & Co.
"(jointly); Equitable Securities Corp.; Kuhn, Loeb & Co.;

Co.

Stuart & Co. Inc.;

Co.
•

-»

next, of approximately $7,000,000 additional first mort¬
gage bonds to retire outstanding notes and to finance

& Co. Proceeds—For retirement of short-term loans in¬

curred for plant construction. Expected in November.

&

June 28 company

•

Light Co.

(Minn.)

Glore, Forgan & Co. (jointly); Lehman Brothers and

Pacific Power & Light

•

Power

.

requested

company

$15,000,000 of
Wee. 30, 1949.

Ripley & Co., Union Securities Corp.; and
White, Weld & Co. (jointly); Equitable Securities Corp.;
The First Boston Corp.

Aug.

10

.Riter

Co.

may

~

; rata offering to present common stockholders. Probable
underwriters: Smith, Barney & Co.; White Weld & Co.

Harriman

struction program.

Central

(9/14)

be in market in Septem¬
ber-October with $10,000,000 bonds.
Probable bidders:
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; Glore, For¬
gan & Co.; Harris, Hall & Co. (Inc.); Lehman Brothers;

Union Securities Corp.

Aug. 11 requested SEC
$6,000,000 of convertible
Union Securities Corp,
Spencer Trask & Co.

RR.

Transmission Co. 7

Gas

Alexander

SEC authorization to sell
from 1,357,918 to 1,584,238 shares of its common stock,
no
par value.
It is intended to make the initial pro

Aug.

Indianapolis Power & Light Co.
July 23 reported company may be in market in Sep¬
tember with a $32,000,000 bond issue, the proceeds to
refund
outstanding 3V4S.
Probable bidders include:
Halsey, Stuart & Co. Inc.; Lehman Brothers; Goldman.
Sachs & Co. and The First Boston Corp. (jointly); Blyth
& Co., Inc.; W. C. Langley & Co. and White, Weld & Co.
(jointly).

■

Power

Belt

will receive bids up to noon (E. D. S. T.)
on Sept. 14 at its New York office (466 Lexington Ave.)
for $2,970,000 equipment trust certificates, second series
of 1949, to be dated Sept. 15, 1949 and to mature $198,000
annually on Sept. 15 from 1950 to 1964, inclusive. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Salomon Bros. &
Hutzler; Harris, Hall & Co. (Inc.); Harriman, Ripley &
Co., and Lehman Brothers (jointly).

24,

,

The company

Appalachian Electric Power Co.
July 23 reported company expects to sell, probably after
the turn of the year. $30,000,000 in new first mortgage
bonds.
Probable bidders include: Kuhn, Loeb & Co. and
Union Securities Corp.
(jointly); Harriman Ripley &
Co. Inc.; The First Boston Corp.; Halsey Stuart & Co.
Inc.
■.
j.i~jiL*l1
Arkansas

Harbor

Corp.

Northern Steles-'Power Co.

common

Indiana

Service

wal"reported contemplating the

Macomber, Chairman, announced
that New England capital will be given an opportunity
to
participate in providing the permanent financing
needs. Tennessee Gas Transmission Co. will provide the
initial capital required.for the building of a natural gas
•transmission system in New England at an estimated
cost of $17,000,000. Traditional underwriters for Ten¬
nessee Gas Transmission Co.: White, Weld & Co.; Stone
& Webster Securities Corp.
'

issue within the next few
"new money" first mortgage bonds
(instead of between $6,000,000 and $7,000,000 previously
reported). Probable bidders: Halsey, Stuart & Co. Inc.;
months

Water

company

Northeastern

Aug.

States

Aug. 23 reported

York

the

possibility of refinancing its $12;T06,000 of 5% first mort¬
gage bonds which mature Nov.
~ Y.\'i *•

The remaining 15,000
a share. Traditional

shares would be sold for about $100

Power Co.

New

Aug. 24

.

company's convertible debentures.

C10/4)

;Co. Inc.; Salomon Bros. & Hutzler; Harris, Hall & CO.
l(Inc.); Harriman Ripley & Co., and Lehman Brothers'

on

convertible second

■*

/

Aug. 23 reported the company expects to sell at comipetitive bidding $3,360,000 equipment trust certificates
i early in October. Probable bidders—Halsey, Stuart &

The Estimated

...

vote

"*

*

7New York, Chicago & St. Louis RR.

authorizing a new
issue of 200,000 shares of second preferred stock (no par)
issuable in series.
Of this totai, 65,000 shares will be
issued

&

*

!of additional capital stock (par $25) at $40 per share oh
the basis of one new share for eafch six shares held.

Brothers.

securi¬

construction

transmission line.
the project is $5,940,000.
gas

El Paso Natural Gas Co.

Sept.

So. La Salle Street, Chicago, 111., some

American Gas

./;\

•

Haven

Pulp & Board Co.
Stockholders of record Aug. 1, 1949 have been given the
right to subscribe on or before Oct. 17 for 4,946.shares

Richmond, Va.

Aug. 24 announced company proposes to sell

time in September.

Alabama

(jointly).

New

$6,000,000 of the $25,000,000 loan obtained from the Ex¬
Proceeds will be used to increase working capital, etc. *
port-Import Bank in 1941. The First Boston Corp. was '
mentioned in reports as a principal in the negotiations.
New York Central RR.
(9/21)
Press dispatches from Havana, Aug. 9, however, stated
July 30 stated that company is expected to sell at com¬
that Cuban banks have notifiea tne government that they
petitive bidding about Sept. 21 an issue of $9,120,000
are
willing to underwrite a government bond' issue of
equipment trust certificates. Probable bidders: Halsey,
$35,000,000 with option to subscribe to $32,500,000 in
'Stuart & Co. Inc.; Salomon Bros. & Hutzler; The First
each of two succeeding years.
v
•;
Boston; Corp.; Harriman Ripley & Co. and Lehman

Hutzler (jointly);

Room 1100, 231

Co.

•

a

■

Aug. 19 filed $4,000,000 first mortgage bonds, series due
Sept. 1, 1979. Underwriters—Names to be determined
by

j

&

sale of approx¬

$100,000,000 of bonds in the United States to
comprehensive program of public works. It
was stated that $40,000,000 of the loan will be obtained
this year, $30,000,000 in 1950 and $30 000,000 in 1951.
Out of the first instalment of the loan, Cuba would repay

capital.
Perry &
drilling of wells.

Corp.

.

Inc.; First Boston Corp.; Blyth & Co., Inc.';
Glore, Forgan & Co.; White, Weld & Co., and Shields

finance

shares of common
Price, 25£ per share.
Underwriter—John G.
Co., Denver, Colo.
For working capital and
Service

ov,',:'VV

Light Co.

Stuart & Co.

imately

May 19 (letter of notification; 800,000

Public

Power &

Aug. 9 reported the company will probably sell a small
issue of bonds later this year. Probable
bidders—Halsej#,

Cuba, Republic of

supplies.

Wisconsin

Missouri

.

Cuban Government is negotiating for the

(letter of notification) 1,000 shares
non-participating preferred stock

Western Oil Fields, Inc., Denver,

1949

Aug. 4 Havana official circles confirmed reports that the

of 6% cu¬
(par $100
per share).
Underwriter—Lewis W. Cherry Co., Little
Rock, Ark. Proceeds—To pay indebtedness for equip¬
Aug. 16

been agreed on at present.

for less than 99 will be considered.

At*k«

Russellville

Thursday, September

000.
Proceeds to be used to refund $13,000,000 first
mortgage 4*&% bonds due 1967 and balance for working
capital.
Probable bidders—Halsey, Stuart & Co. Inc.;
Dillon, Read & Co. Inc.; Glore, Forgan & Co., and Leh¬
man Brothers
(jcrintly); Kidder, Peabody & Co.; Harris
;man Ripley &
Co.; Smith, Barney & Co. and Blyth &)Co.,
Inc. (jointly); Kuhn, Loeb & Co. Nothing definite has

Rock

company

trust

Western American Life Insurance Co., Reno
March

CHRONICLE

FINANCIAL

&

Island & Pacific RR. (9/8)
will receive bids up to noon (CDT) on
Sept. 8, in Room 1136, La Salle Street Station, Chicago,
111., for its proposed offering of $^^5z,00(J equipment
Chicago,

(Continued from page 33)
ferred

COMMERCIAL

THE

(874)

.

'

-Aug." 9 reporfed. contemplating financing, late this year
or early in 1950, may amount to
approximately $23,000,-

Westchester

Lighting-Co*

•

-

'

*

;

-

•

:

i

Aug. 15 it was reported that company may refund* its
$25,000,000 gfeneral mortgage 3%s, due July 1, IUC7.
Probable Bidders-^—Morgan Stanley & CO.; Halsey, Stuart
: & Co., Inc.; Merrill Lynch, Pierce, Feiiner & Beane and
White, Weld & Co. (jointly) ; Stone & Webster Securities
Corp. and Lehman Brothers (jointly); First Boston Corp.
Refunding operation, however, not-being considered by
company at the present time.
<
*
:

•

COMMERCIAL

THE

Number 4834

Volume 170

(Continued from page 16)
Mattison

Mr.

with

nittee

Giannini

Mr.

Chairman.

as

the

posts. Slated to succeed Mr. Mat¬
tison as head of the instalment
credit loan department is Lloyd

the

presently Vice-President
bank's Oak-:
Hnd Main Office! Mr. Mazzera in
turn will be succeeded by Julius
R.
Davis,
Vice-President
and
Manager
of
the
bank's Long
Mazzera,

1913

and

went

Mazzera,

right

Mr.

1941.

in

President

of

District

Angeles

Suburban

with

in
1927, he
Vice-President and
Supervisor of the Los

Vice-President

later

as

to

succeeding

Toronto,

of the

charge

in

'Officer

corpor¬

take office on Sept.

department of the California
Company of Los Angeles,

ate

completed 20 years' serv¬
Aug. 19.
Mr/Pollitt began his banking ca¬

Calif.,

34

ago

years

clerk in

a

as

the trust company's

| piled

Assistant
;It retary in 1931, Treasurer in
6, and to' his present post a
"{
r later.
He is a member of the
Stuck Exchange Club and Bond
Club of Los Angeles. V
*

•(

ILL.

CHICAGO,

the

of

members

V- Cook as

•/

The
■

/

in

that

&tat'c.As

the

made

Presidetjt
branch's
officer.
sistant
FalU

an

Assistant

Vice-

continued as the
senior
administrative

and

(John) Bueli, As¬
Manager of the Klamath
W. H.

branch,

was-

named

Man¬

the Lakeview branch.
Ldwis Wiltshire, Ex-Manager of
the
Coquille
branch,
becomes
Manager of the bank's Southeast
Portland branch.
..

of

ager

•

of

Board

3

record

Chicago,

established Iwo
new
according to an an¬
nouncement by E. C. Sammons,
President. The opening of a bank¬

cently
branches,

ing office at Monmouth, Ore,,: on
■■'Aug/, i; following purchase of the
First National Bank of Monmouth,
marks the 40th branch. The latter,

said, had deposits in excess
$1,100,000 at the time' of the
purchase. On July 11, The United
States
National opened a new
branch in West Salem, Ore. Rex
it is

of

Gibson/

formerly

an

tional';?-

Ladd

&

has declared

quarterly dividend No. 114
Cents ($1.50)

of One Dollar and Fifty

share on the Common Stock of the
Company, payable September 20, 1949,
to common stockholders of record at the
close of business September 9, 1949.

OTIS
ELEVATOR

KING, Secretary

COMPANY
|

the

of

Directors

Anaconda

declared a divi-

has

at

the

COMPANY

MINING

HOMESTAKE
.

// ;/ / /

873

DIVIDEND No.

;:v,
The
No.

Directors has dec:ared dividenc
fifty cents
($.50) per share 0.

of

Board
of

873

16,

1949.

par

tember

mailed by Irving Trust Com¬

be

will

HAMILTON,

JOHN W.

August

16,

Secretary.
'

1949

Allegheny Ludlum Steel Corporation
At

of

a

the

deposits totaling more than $505,000,000 at the time of the June 30
statement call, The United States
National Bank is Oregon's largest
financial institution.
</''
'
,

IBM

payable September
stockholders of

at

to

the close of business on

meeting of the Board of Directors
Allegheny Ludlum Steel Corporation
held today, August 18, 1949,
a
dividend
oi
one
dollar
twelve
and one-half
cents

($1,121/2) per share was de¬
on the $4.50 Cumula¬
tive Preferred Stock of the
Corporation,
payable
Sep¬
tember
15,
1949,
to
Pre¬

590 Madison Ave., New York 22
The 138th Consecutive

S.

-

Corporation hag

this day declared a dividend of $1.00 per share,
payable September 10, 1949, to stockholders of

of record at the
September 1, 1949.

on

A.

Wallace, Treasurer

York, August 24, 1949.

record at the close of business on August 22,

prepared on IBM Electric Punched Card
Accounting Machines will be mailed.
:
A. L. WILLIAMS, Treasurer

close

Stockholders

business

Bruce H.

New

Quarterly Dividend
The Board of Directors of this

clared

ferred

Checks will be mailed.

MACHINES CORPORATION

Penna.

Pittsburgh,

McCASKEY, JR. Secretary.

1949, Transfer books will not be

MIDDLE

closed. Checks

SOUTH

June 21,1949

UTILITIES,
Inc.
"*

•

of

President

his

firm

own

AMERICAN HAS

Chicago, Robert Strauss & Co.
with the firm in the

in

York

New

will

1 Wall Street,
Burian, for 10

Office,

Arthur J.

be

;

A

it

Joseph M. Lee and
Schmitz,
formerly
of

F.

of

The Common Stock

the: .Rice/trading

C.

I. T.

Common Stock

1,

of this Company

t

1949. The transfer

Common Stock

1949, to stockholders of
business September 10,

has been admitted

formerly headed the firm's Chi¬
cago trading department, will be¬
come
associated
with its grain

day declared
share

per

a

on

dividend of 27Vj<

the Common Stock,

payable October 1, 1949, to stock¬
of record at the close of

holders
business

September 9, 1949.
H.

books will not close. Checks

F.

New York 6, N. Y.

will be mailed.

Chicago. Timothy A. Collins, who

Board of Directors has this

The

in

FINANCIAL CORPORATION,

payable October

record at the close of

Co., will join
department in

&

Strauss

Robert

on

quarterly dividend of 75 cents per share

cash has been declared on the

in New York.

John

Dividend

ELECTRIC COMPANY

associated with Strauss Bros,

years

DIVIDEND

C.I.T. FINANCIAL CORPORATION

A*ll

Associated

FRED W. HAUTAU. Treasurer

SANDERS,

Treasurer

August 26, 1949

August 25, 1949,

dealings

to

on

New York Stock

the

/==\

Exchange

mm
September 1,1949

in St. Louis and George K.
in Kansas City.

pany

Baum & Company

Mr.

CANADA DRY

Strauss entered the invest¬

1920 with Logan

ment field in

&

.

charge

institutional
he

their unlisted

of

department. In

with

joined

his

and
1933

brother

came

to

office. He is

Chicago to

a

open

committeeman
Traders

Club

of

of

the

a

a

on

on

A dividend of

its

half cents

thirty-seven and

(37Vi<i)

stock
on

Ginger Ale,
a

Incorpo¬

meeting thereof held

August 23,1949 declared the

regular quarterly

dividend of

$1.0625 per share on the

day been declared

per

of

on

one-

share has to¬

the outstanding

this

Corporation,

September 30, 1949, to

$4.25

Cumulative Preferred Stock
,

a

and

dividend of $0.15 per share on

the
able

Common
October

Stock;

both

pay¬

1, 1949 to stock¬

holders of record at the close

of

national

stockholders of record at the close of

September 15, 1949.
Transfer books will not be closed.

Bond

business

Checks will be mailed.

Chicago.

He

on

September 12, 1949.

is
-

also

declared

Dry

rated, at

DIVIDEND No. 59

payable

present time is

)

past member of the board

of governors of the New York Se¬

curity Dealers Association.

on

amounting to

account of

the

quarterly dividend period

ada

Corporation

common

at the

share,

ending October 31, 1949, has been

in

past member of the

per

The Board of Directors of Can¬

(Dmmercial Solvents

forming Strauss Bros., Inc., and in
1942

$1.75

current

DIVIDEND NOTICE

Bryan in New York and later was
in

a dividend of 13A%,

m

Securities Dealers Association and

was named Manager of
West Salem operation.
With

1949,

20,

record

Tfvi

m

203

quarterly dividend of $1.50 per
share on the Preferred Stock has
been declared

Disbursing Agent.

Dividend

pany,

Dividend No.

Preferred

A

value Capital Stock, payable Sep
1949 to stockholders of record Sep¬

6,

$12.50

Build¬

Trade

board of governors of the Illinois




August 30, 1949
Allied Chemical & Dye Corporation

ing. Until re¬
cently, he was

Na¬

Bush-Salem

September 6, 1949.

STEPHEN G. KENT, Secretary

INTERNATIONAL BUSINESS

of

Assistant

Blanch,
the

165

No.

i—as

private
wire
connections have
been opened with White & Com¬

Manager at the United States

of business

Dye Corporation

W. C.

'■:/

Broadway

par

September 7, 1949.

of

;

United

this Company,

of

COPPER MINING CO.

:

main office in

Board

stock

$10., payable October 1, 1949, to

per

close of business at
o'clock P. M., on September 6, 19-U).
C. EARLE MORAN, Secretary & Treasurer.
of

quarterly dividend
share on the capi¬

a

of 20 cents per

Broadway, New York

61

Checks

in

States
National
Bank of Portland, Oregon, has re-

,

/i
The

day declared

stockholders of record at the close

Allied Chemical &

tember

shares

Board of Directors has this

The

tal

N. Y., August 25, 1949.

Company

Mining

Copper

head-

department as special representa¬
tive. The firm also announced that

.

v

York 4,

York

August 25, 1949

■

Exchange.

the Chicago Stock

ously with G. Brashears & Co.

firm's

the

Robert Strauss

advancements,

Chi¬

their

quarters

promotion

CC F. Snidery present Manager of
the bank's Lakeview branch, has
been

and

associated

with

"Oregonian"

/••

Co.

Dempsey-Tegeler & Co., 210 West
Seventh Street. Both were previ¬

departments

'.1

Portland

One Wall Street, New

added

CALIF.—Frank
E. Gillette and Morris F. Sullivan
have been added to the Staff of

The

and New
security
trading

-

effect?1.^ Sept. 1

The Financial Chronicle)

(Special to

LOS ANGELES,

DIVIDEND

cago

executives of the First
National Bank of Portland, Ore.,
was
announced on Aug.. 25 by
Frank N; Belgrano, Jr., President,
three

Company

Bolger & Co.

Financial Chronicle)

(Special to The

York

Cashier. ' liCcI/I-CT./;♦ '
#
* .' -

Announcement of the
of

Irving Trust

Dempsey-Tegeler Adds

25

Robert

—

of

G. ; Markworth
is
President, and Fonda

as

been

has

manager

Beach, Calif, (capi-

H.

f?d

DIVIDEND NOTICES

H.

Exchanges, as

$400,000) was issued by the
Comptroller of the Currency on
At %. 17.
In the primary organi

He

Paul

with

past

DIVIDEND NOTICES

ANACONDA

and Company,
New York and
Chicago Stock

U:

Ippion

1 comes from

with Daniel F. Rice

National City

\ charter for the
Euik of Long

Fin-

A.

W.

become

has

ir/:' '• 1/

*

.

,

,

CALIF.—Rob¬

California

First

with

Daniel F.Rice 8 Co.
Strauss

the

to
CHICAGO, ILL.—Edgar S. RieCo., deP has become connected with
458 South Spring Street, members
Shillinglaw, Bolger & Co., 12C
of the
Los
Angeles Stock Ex¬
South La Salle Street, members of
change. Mr. Nolan was formerly
Nolan

R.

New

staff

in

the staff of Marache Sims &

Robert Straus's Joins

He

1929 and was elected

A-"i.

(Special to The Financial Chronicle)

ert

Chronicle)

BEACH, FLA.—

PALM

Davis & Co.

DIVIDEND NOTICES

junior

a

Los Angeles bank.

Chicago Stock Exchange.

was

the past four years.

for

ager

ice with the company on

the

With Shillinglaw,

Nolan With Marache Sims

ap¬

Kingston, Jamaica branch of the
bank of which he has been Man¬

Trust

reer

been

ley, who will become Chairman of
the Board.
Mr. Smith who will

Trust

Assistant

Pollitt,

K.

has

Smith

Bank

Oakland duties.

F.

Bra-

I■/;//'M':;|

pointed President of the Canadian
of Commerce, head office

his new

assume

G.

Franklin & Co.

LOS ANGELES,

Financial

The

to

has

Nelson Douglass & Co.

'•

George

post he now

Manager in 1931, the

relinquishes

He

'•

Vice-President

>

value of $20, or $3,-

par

Main $6,800,000.
and

returned to the Long Beach
Office

a

(Soecia]

WEST

Central

Co., 510 South Spring
Street, members of the Los An¬
geles Stock Exchange. Mr. Keller
was
previously with Samuel B.

000,000; surplus at $2,500,000, and
undivided profits at $1,300,000 —
or total available capital funds at

became

District.

with

associated

Republic

three shares

each

dealer in investment securi¬

ILL. — Joseph R. Joseph S. Stewart, Jr., has be¬
joined the staff of come affiliated with William S.
Republic Company, 209
Beeken Co., Harvey Building.
South La Salle Street, members of

Prezorski

B.

&

shears

of

share

Jack

and

become

In addition each
be
given the
one

a

CHICAGO,

CALIF.—Paul
Lowry have

ANGELES,

Keller

tion, the outstanding stock of the
bank will consist of 150,000 shares

with the

to

LOS

a

capital for the bank, the
said.
After recapitaliza¬

new

officers

as

be¬

Financial Chronicle)

(Special to The

Financial Chronicle)

(Special to The

owned, at a price of $20 a
share. This will produce $500,000

Manager. Mr. Davis started
bank in 1921. Elevated

and

will
for

Godfrey is opening offices to act

and

With William S. Beeken

With Central

Brashears;

Two With G.

amount

that

purchase

to

Mc¬

Laurence

of Boston.

now

Vice-President

as

say:

stock

new

Manager of the Oakland Main Of¬
since 1946, started with the
Lank in 1917. Since that time he
has "served
as
Assistant
Vice-

and

to

on

stockholder

fice

President,

declaration of
of

dividend

Chronicle)

in uncial

as a

Exchange.

Green

equal to two shares for each three
shares now held.
The "Times"

a
Vice-President in
named assistant to the

appointed

C.

'b

EDWARDSVILLE, ILL.—Frank

Board, and P. A.

the

and

account

stock

Manager

as

24,

Aug.

President, said the pro¬
posed plan involves transfer of
$1,000,000 from undivided profits

of its then in¬
stalment finance division; he was
1933

ted

Strack,

America in

stalled with Bank of

of

Joshua

that

stated

Chairman of the

Mr; Mattison

main office.

lieach

"Times"

Seattle

which

Manager of the

and

that

announce

T

City,

York

New

Broadway,

Godfrey Opens

'

Inc.,

Co.,

35

ties.
Mr. Godfrey formerly was
associated
with
them
in
general partner to Aspden, come
President of the Illinois Midwest
sales
Robinson
&
department.
The
Co.,
Philadelphia, their
Stock Land Bank of Ed1421 Chestnut Street, members of Messrs. Salvas were formerly con¬ Joint
the Philadelphia-Baltimore Stock nected with Swan, Stickley & Co. wardsville.

Seattle,

at

120

&

Warner

Joseph
J. Salvas
PHILADELPHIA, PA. — Law¬ Donald,
rence B. Illoway has been admit¬
Joseph J. Salvas, Jr., "have

of

Bank

Wash.,
from $1,500,000 to $3,000,000 will
be acted upon by the stockhold¬
ers on Sept. 6, it is learned from
Washington,

officials to new

named two other

National

Peoples

Arthur

J.

,

Aspden, Robinson

the capital of

increase

Plans to

its
also

Frank

Three With J. A. Warner

Illoway Partner in

News About Banks and Bankers

(875)

CHRONICLE

FINANCIAL

&

A.

R.

on

Wm.

BERGEN,
Secretary.

August 31, 1949.

business

J. Williams,
V. Pres. & Secretary

the

payable October 15,1949

outstanding preferred stock

of the

Company to holders of pre¬
ferred stock of record at the close

of business

on

October 5, 1949.

a dividend of

50tf

per

share has

payable October 15,
1949, on the outstanding common
stock of the Company, of the par
value of $1.00 per share, to hold¬

been declared

ers

the

of

common

stock of record at

close of business

on

October

5, 1949.

h. a. way

August 31,
1949

arm

xs

,

Secretary

36

COMMERCIAL

THE

(876)

Sc

CHRONICLE

FINANCIAL

Thursday, September 1,. 194
ment

BUSINESS BUZZ

which

obviously

The roll call votes
and

on.
Behind-the-Scene Interpretations
from the Nation's

•

•

everybody

was

the

avoidec

were

happy, excep,

"liberals," who failed witfc
their "double cross" of the Rule:

Committee.

And You

Capital

would

have killed the bill.

";v-

^':'■

■.~

■

■

are

hoped tc

continuation

of

private

housing finance aids the
re¬

in advance of House action

ping

continuing committee or council to study the
Sterling area's balance of pay-*®*
ments problem is about all that the recent Anglo-Argentine trade
deal.
these reports suggest will develop
Appointment of

a

out of the meetings.

is

There

United

States

lateral

contribution

making

uni¬

any

al

preclusive

British

trade

lenge

problem in the foresee¬
future—any additional con¬
tribution,
that
is.
A
loan f is
entirely out of the question. Con¬
gress is cutting rather than in¬
creasing the ECA appropriation.
Purchase of any large
supplies
of strategic materials from the
British Empire for the
defense
stockpile
is
restricted
by
the
availability of Congressional ap¬
propriations. Any
big shift
to
natural from synthetic rubber to
provide dollars for Britain, is re¬
garded as unlikely.
;

service reduction accompanying

able

it

on

a

reelection

"preserving

ish

bound to resist devalua¬

are

tion.

of

the

;

devaluation
rific

Brit¬

pound

would

damper

because

put

ter¬

a

the

upon

Labor

party's reelection prospects.
Britain would

poundJ in

only devalue the

return

hefty; quid

for

very

a

another big loan or gift,

as

which

would offset the political liabil¬

ity to the Laborites of devalua¬
tion. Even the State Department
said

is

to

convinced

be

trying to sell Congress

ad¬

being

initially

completed,

of

the

;

size

or

class of business.

the

to

U.

of

York

Chairman

S.

tariffs

is

moment

siderable

regarded

skepticism

Senate

has

tension

of

Agreements
tariff

of

Act.

this

at

ardize

the

favor

Stock

Exchange
B.

The

act.

jeop¬

of

would

same

be

easing of administra¬
tive impediments to imports, a
subject within the competence of
the Treasury alone, without re¬
sort to Congress.
Britain is said to be

reconciled,

since their discussions of the
with

Snyder,
U.

S.

of

When

Chairman

O'Mahoney of the JEC

equity

will

be

C.
this

saw

fully into

said.

he

of

There

preliminary
public
the middle of

hearings

around

this mouth, it is planned. These

hearings

are

to

ask

advice

on

establishing the framework for
the JEC investment

ator

O'Mahoney

study, Sen¬
explained.

That

financing

problems

all

of

busi¬

however, will get incidental
monetary study.
ness,

Treasury

;

and

further aid,

since
toward

press

-

sum¬

Secretary

the

hostile

the

idea

of

There

is

little

surprise to any
one in the subject matter outlined
for another JEC study on a dif¬
ferent project — the proposed
monetary study.
In

sending around

question¬
naire to 500 leading banks, insur¬
ance
companies, and businessmen,
the

subcommittee

to "getting little" of

scope

immediate benefit out of the dis¬

scope

a

revealed ;

the

of its proposed study. The
is about what might be ex¬

cussions.
•

pected.'
Questions: ■ were
asked
designed to bring out what the
re¬
ports do not deal with possible- feeling is about the Federal Re¬
serve Board's standard position of
methods of aid that might be
requesting larger powers to deal
worked out on a limited scale
-

On the

other hand, these

through the many

of the

powers

.government, the Monetary Fund,

possibly " the

or

World

There may be "a trick

whereby

Bank.

or

if

reserves

and

era

with

in

inflationary

an

reserves

of

present

non-members.

Questions

two"

substantial

some

with

were

designed

to

get business and banking think¬

unspectacular relief is possible.

ing

On

Reserve policy generally, about
the relationship of Treasury fi¬

is

this

point official guidance

obviously

not

available,

for

the round of negotiations is al¬

ready

under

way

and the

cial lip is buttoned up.

offi¬

:

about

is

yet only in the rumor
stage, but there is some talk that
as

maybe the Laborites could profit

politically by a turn-down of
their request for further aid.
They
could say that they refused to
have
•own

important
economic

matters

of

their

independence, like
pound, "dictated
America," then go

the value of the

by

capitalist

in for

cutting social services and

other expenses, and
go in further

effectiveness

of

nancing to Reserve policy, about
deficit financing and its rela- ?
tionship to monetary manage¬
ment.

It

the

convertible

monetary

standard.

With

but

covert

not

went

along on this additional
record vote, and put it over.
This

Ad¬

open

ministration

blessing, the newest
housing finance
bill
plumped into the Senate. Be¬

a

left

the

"liberals"

position. They

queer

Occasionally
the

in

politics

thought

was

their pet schemes, in particular

sides "non-controversial"
ments

amend¬

FHA, it proposes direct
government loans for financing

housing at colleges, for GI's, and
for rental cooperatives, and other
dubious things.
the

In

House,

Committee

the

reported

Banking

out

bill

a

with a few of the funny fi¬
nancing provisions left out, a few
in. The conservative coalition,
through the Rules Committee,
served

notice

the

Banking
Committee (now "liberal" domi¬
on

nated)

that the balance of the
the more extreme schemes re¬

maining

in

the

bill

way

around,

is

This

the

Committee

agreed

do.

Immediately thereafter,
however, the Committee set out
unofficially to run out on~ the
agreement. Individual Committee

members,. White House favorites,
offered

motions

restore such

the

on

floor

to

things as direct gov¬
GI's, but in the

American

Legion's

tives

would

when

the

not

bill

"Committee

vote

from

This, the Sen¬

ate "liberals'" have learned to the

)■

the

Whole"

to

ord roll call votes.

On the other hand, only a hand¬
ful of "liberals" have any stomach
for a roll call vote on "non-dis¬
crimination."

Cheerfully loading
bill, they never expected that
they, themselves, later would be
confronted
with
an
unpleasant
the

roll call.
So

McNicol, Vice-Presi¬
Morgan & Co. Incor¬
porated,- was the guest of honor
yesterday at a farewell ceremony

the

next day they worked
legally doubtful procedure

a

company's offices and

ment after

completing 50

service.

\

years

Of

v,

Mr. McNicol, who was engaged
in fiscal agency work during most
of his career, entered the employ
of

J.

P.

Morgan &

Co. in

1899

at

the age of 15 as a messenger
boy and eventually became Man¬

of the dividend department.

ager

After the

firm was incorporated
1940, Mr. McNicol served suc¬
cessively as an Assistant Secre¬
in

and

tary

as

Assistant

an

Vice*

President of the present company

of

before being appointed Vice-Pres¬

with

ident in 1947.

substituting for the bill loaded
civil rights and
all other
amendments, the original com¬

mittee

bill

stripped of its

as

behest

the

at

mittee.

.

^,

This

ments

avoided

adopted

Paper

the Rules Com¬

of

a

day

Eaton Paper

before,

Rising Paper

"non-discrimination."
J

The

Rep. Marcan-

"liberals"

made

again

the

tonio of New York,, who has much
more
of a sense of humor than

ments

sponsorship of the extreme Left,

saw

and

for if

Strathmore Paper

perfunctory gesture of offering

would be supposed from his dour

Paper

Millers Falls Paper

rec¬

the amend¬

on

the

stock

Keith

„

separate

■

ex¬

treme funny finance amendments

p

vv*;?

to

the Houser where there are rec¬

including

•

dare

the

taken,

vv

conserva¬

passed

of

ord, roll call vote

came

Edward L.

dent of J. P.

held in the

other

"Committee of the Whole," where
a
record
roll
call vote
is not

along

;

attended by officers and employ¬
ees on the occasion of his retire¬

ernment loans to

Then

direct

On Retirement After 50
Years With J. P. Morgan

publicans and

out

tion"

that

offered

a

amendment

time

the

"non-discrimina¬
to

the

Republicans

bill. By
gleefully

same

to

the

before,

day

they

at the end of
the adoption of the

were,

was

5 Teletype—NY 1-971

Securities

Square, Boston 9, Mass.

Telephone HUbbard 2-1990

Teletype BS 69

NEW YORK 5

..

.

Investment

10 Post Office

ill, Thompson & Co., Inc.

Trading Markets

'

LERNER & CO.

amend-

FOREIGN SECURITIES
■;.

but

it they weren't adopted,

"non-discrimination"

;

Firm

GI and other amend¬

of

the road

HAnover 2-0050

.

•

Executive &

-

70

Underwriting Offices

WALL

STREET

Tel. WHitehall 4-4540

CARL MARKS & CO. INC.

the

shortest way to reach a particular

legislative point.

director of Roberts

Gil loans, against which the Re¬

be

must

dropped.
to

the

to

the

Goldberg technique of going

longest

in

that they had put over some of

All Issues

Rube

non-

subsidized

i

for preclusive trade
bargains like point of sputtering frustration, is




currently true of the latest hous¬
ing legislation.

Finally, the questionnaire

gold

a

"Some day that Smart-Alec sign painter will
go a bit too far!"

also solicits opinions pitched at
the advisability of returning to
a

is

Corporation,
KentMoore
Organization,
Inc.,
and
President
of
Silver
Suds I Co.,
Philadelphia.

revision.

problems

money

business,

a

He

Mander

Edward McNicol Honored

Joseph

an

,

mer

and

McCabe

framework, however, will
delineate
the
special
further sharply
of the problems of small business. Equity
Trade

would

&

ex¬

an

the

Any

time

con¬

Inc.

The JEC

the Federal Reserve Board.

on

dangerously the extension

the

true

life

reductions in

British

of

adopt

to

yet
the

with
because

formerly a Vice-President of
Stroud & Co., Inc., and prior to
that, President of Chandler & Co.,

subject outlined in

Thomas

Mr. Brown

was

analysis of the sub¬
ject, by President Schrarn of the

small

is desired by the
United Kingdom. This, however,
is
a
long range rather than a
short range solution, and for the

ciated with their firm.

recent

New

PA.—Coffin,

&

Co.,' 123
South Broad
Street, members of the New York
and Philadelphia-Baltimore Stock
Exchanges, announces that Harry
D. Brown, Jr., has become asso¬

would have gone into the several

facets

PHILADELPHIA,

Betz

Original agenda for the inquiry
drafted by the JEC staff. It
would
have
encompassed
the
broad
problem of why equity
money is timid, regardless of the

the

goods

views.)

own

With Coffin, Befz Co.

were

was

,

Reduction

-

British

out

re¬

Harry D. Brown, Jr.

designed
to
pitch the inquiry
more sharply at the equity capi¬
tal problems of small business. 1

It has got to go more

is

"Chronicle's"

the

hauled back into the shop and re¬

nitude

Britain

"sc

unofficial

than

Plans for the proposed study of

agenda, he demanded

to

said;

its

and may or may not coincide
with

sooner

ditional special aid of any mag¬

question.

effect

began

(This column is intended to

investments by the Congressional
Joint Economic Committee, after

that

any

in

and

* 1950. l:>;

their

such

quo,

pro

and

flect the "behind, the scene" inter¬
pretation jrom the nation's Capita

.

On the other hand, the

New

indepen¬

British

precipitated

strip¬

Senate

of

campaign

dence." Then the election could
be

The

vacation.

dollar purchases, sell the social

economic

bill.

are

what?"

cut

Britain's

to

or

threatening to let the
various expiring FHA titles die
The House
anticipated the chal

the

drastically

would

deals,

the

Dealers

Simultaneously with addition¬

of the

possibility

no

can

to which to tie the radical amend¬
ments. Now they are confronted

ports circulated in Washington to the effect that "not much" will come
out of the conferences this month on Britain's dollar exchange prob¬
lem.

:j

Senate the New Dealer:
furious. They had

make

WASHINGTON, D. C.—There is surprising unanimity to the

■

In the

FOREIGN SECURITIES
;

,■

50 Broad Street

J

Trading Department

SPECIALISTS
>

V

120

New York 4, N. Y.

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

BROADWAY

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i