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bus. ABM.
LIBRARY
16 1948
SEP
ESTABLISHED 1S39
Volume
170
New
Number 4838
The World Bank and
European Recovery
1
Difficulties in Restoration
By EUGENE R. BLACK*
President, International Bank for
Reconstruction
\
i
and Development
ac-
of
nation
reduced
currencies,
governmental costs and end of
"welfare
programs."
Says
ex¬
change rates should be adjusted
to
to
permit dollar-short countries
increase sales in dollar
l
.
Though favoring ultimate restoration of gold convertible currencies,
Mr; Cortney points out difficult technical problems involved. Says
world is not ready, either politically or economically, for restoration
of international gold standard, and when situation for this becomes
ripe, it will be possible only if price of gold in all currencies, includ¬
ing dollar, be raised. Lays great depression of 1920s to return to
gold by many countries at wrong level. Advocates re-establishing
mechanism for restoring trade equilibrium, while leaving currencies
to fluctuate freely so that market forces set proper exchange rate.
recovery.
J As basis for solving dollar-short-j age problem recommends deval;
By WALTER E. SPAHR*
cortney
7;President, Coty, Inc.7:77;
Board
that
it
been my
ilege
to
has
priv¬
at¬
tend, and my
first
ident: of
the
I
am
Bank.
deeply
aware
of the
impor¬
the greatest part of
cover
equilibrium by instituting controls
esiaoiishing <§>
-•
exchangecontrols.
,
shows
a
Black
R.
come
set.
big
my
a
in¬
in
the
price
level
and
and
Philip
established
r;
21 to 24 for PIC¬
TURES taken at Annual Summer
Securities Traders
of the
huge
general
pages
Outing
with
wars
But the sound
Washington, D. C., Sept. 13, 1949.
See
of
crease
Mr.
Cortney
The
increases in
wages.
;
and prices in the various
vary according
to do¬
wage3
countries
mestic
policies and the degree of
which a
particular
government
has
in¬
dulged.
Once the war is finished
and an attempt is made to inte¬
grate again the economies of the
various
countries,
we
discover
inflation
monetary
that
Association of New York.
one
in
of the main obstacles
is
great disparity of cost and
price structures in# the various
Furthermore, the mere
V;:
.
We See
As
...;.k :.-v /.<>
recommendations
for
reasons
which
must
not
refusing to recommend
a
at this time are certainly modestly enough marshalled
presented, but even the union leaders do not appear
much
disposed to argue the points raised.
What the
thoughtful man will find a little difficult to understand
is why the same arguments do not apply to wage increases
in cash paid to some "fund" for the account of the worker
and
at
future time.
some
be much too
greatly influenced by the current
industry
are
(Continued
on page
to
Head Office: 26, Bishopsgate,
London, E. C.
Branches
in
and
Zanzibar
Paid-up
Reserve
The
Capital
Fund
£2,000,000
and exchange
Corporate Securities
,
Walter E. Spahn
we
as
Under this system, our, gold ex¬
ports
address
*An
on page
by
International
central
to
confined
are
(Continued
Dr.
37)
Spahr at
Gold
Conference,
Coin
York
New
City, Sept. 8, 1949.
.
7f
Municipal
Bonds
[
Bond Department
OF COMMERCE
Bond Dept.
Teletype: NY 1-708
New York
NATIONAL BANK
OF
THE
CITY OF NFW YORK
Agency: 20 Exchange PI,
Portland, Ore.
San Francisco Los Angeles
Public Service Co.:
CANADIAN
SECURITIES '
CHASE
THE
Head Office: Toronto
of New
bonds & stocks
Prospectus
Hampshire
available
upon
request
Dean Witter & Co..
Mtmoers
OTIS & CO.
Established
1899
(Incorporated)
cleveland
business
concerned.
and
£2,500,000
Trusteeships and Executorships
also undertaken
far
Distributors of Municipal
Bank conducts every description of
banking
so
are
Canada
OF NEW YORK
New
York:
...
£4,000,000
in
ctically
every form in
p r a
State and
CANADIAN BANK
San
Subscribed Capital
ex¬
ap-
THE NATIONAL CITY BANK
Underwriters and /
India, Burma, Ceylon, Kenya
Colony, Kericho, Kenya, and Aden
foreign
changes
THE
mi COAST
the Government in
Uganda
control
upon request
PACIFIC
of INDIA. LIMITED
Kenya Colony and
which
tutions
Standard
for
Monthly Commercial Letter
Seattle
NATIONAL BANK
Bankers
ernment insti¬
32)
across
request
New York 5
»y*
highly placed executives
inc.
FRANKLIN DISTRIBUTORS, Inc.
64 Wall Street,
Amsterdam
London
craze
being provided with pensions. It
INCOME (BALANCED) FUND
Prospectus on
t
banks,
550 Branches
i
•m
Re¬
and other gov¬
Franklin Custodian
UTILITIES FUND
.ail
Treasury,.:
Federal
"pensions" and by arguments which rest primarily upon
Wall Street, New York 5
Providence
con¬
trolled by our
the
that the Board permitted itself to
in the
Stock Exchange
Philadelphia
our
is
lines
„
It would appear
the fact that certain of the more
White,Weld&Co.
*
,
BOND FUND
Chicago
has
wages
countries.
Funds,
of
o w
luiiviK,/
serve
case
go unchallenged.
The
further increase in cash
COMMON STOCK FUND
Boston
ft;£g|g
report, which, while commonly regarded as "mod¬
erate" in tone and basic content, embraces conclusions and
PREFERRED STOCK FUND
40
f 1
3>the
——
made its
A Mutual Fund
.
our
inquiry in the steel
the
Bonds
Members Hew York
currency
Under
a
Some "Pensions for All" Fallacies
The President's board of
Municipal
.••! .'y % v":j
our
adopt
boundary
deficit spending and
(Continued on page 29)
State &
all
this country.
States
across
stoppage of
<
United
EDITORIAL
we
I out
Mr. McC 1 o y.
Black in presenting
Fourth
Annual
Report of the
Interna¬
tional Bank for Reconstruction and Develooment
to
the
Board of Governors,
by
which
monetary stabilization requires
thorough-going gold standard under
is permitted to flow freely into and out of
restricted international gold bullion standard,
attainment of international
our
post-war
period,
(Continued on page 39)
Address
The
that the
—
and
war
the
:
*
prices and trade, and by
in-!
during
achievement
policies
i
of
standards of
relations
cooperative
as
.the
post, and
high
predecessor,
Eugene
that
result
flation
'the
by
which maintain international
over
monetary
bilities of this
of
j
expenditures. At the same
Experience
responsi¬
new
war
time governments discard mechanisms
Pres¬
as
tant
financing to
,
\
Advocating United States lead way to international monetary sta¬
bilization by returning to gold coin standard, Dr. Spahr maintains
policy of waiting for installation of an international "blanket plan":
is futile and such plan cannot succeed. Holds controls exercised
by International Monetary Fund are applications of collectivist
philosophy, and advocates, after return of U. S. to gold standard,
aid be given other nations that follow example. Lists advantages of '<
redeemable currency.
,
area.
meeting of the
Governors
of
National Committee on
Monetary Policy
During a war governments indulge in huge government deficit
This is the third
Professor of Economics, New York University
:
Executive Vice-President, Economists'
Mr. Black stresses need of
complishing European
philip
Copy
a
Steps Toward International
Monetary Stabilization
Of Monetary
,
Price 30 Cents
York, N. Y., Thursday, September 15, 1949
Chicago
Denver
Columbus Toledo Buffalo
New York
Cincinnati
Francisco
Honolulu
Los
14
Exchange
Angeles Stock Exchange
WALL
BArclay
San
Stock
Stock Exchange
Exchange
Stock
STREET.
7-4300
NEW
Direct
1-579
Los Angeles
Honolulu
Wires
IRAHAUPT&CO.
40 Exchange
Place, New York 5, N.Y.
and
*
111
other
Broadway, N. Y. 6,,i
WOrth 4-6000
Teletype NY 1-702-3
WHitehall 4-8161
York Stock Exchange
Principal Exchanges
Members New
YORK
Teletype NY
Francisco
Seattle
Dominion Securities
Grporatioti
Boston
Teletype NY 1-2798,
Telephone: Enterprise 1820,
2
THE .COMMERCIAL
(1034)
TRADING
MARKETS
The French
IN
Alabama &
Under Inflation And Dis-Inflation
By A. WILFRED MAY
<
Utility Corp. 5V2/52
Louisiana Securities
Mr. May, in on-the-spot investigation,
finds French holder of equities during and after war has pro¬
tected his economic position fairly well; while the bondholder has been ruined. Notes individual in¬
vestor and financial community are now bewildered by conflicting forces of inflation and deflation, latter
Bought—Sold—Quoted
being stimulated by government's * swing to the right Cites tax provisions, including non-existence of
capital gains levy. Doubts sterling devaluation would cause franc to fall below 375.
New York Hanseatic
Corporation
PARIS, Sept. 12.—One important demonstration of the trend since
York 5
Teletype NY 1-583
BArclay 7-5660
Thursday, September 15, 1949
Capitalist's Experience
Central Public
120 Broadway, New
FINANCIAL CHRONICLE
&
tive
four
prewar of the rela¬
positions of the French equity-holder and the creditor, is revealed in the following
yield figures:
; .
j
3 P.C. Perp. Rentes
'
.
Steiner, Rouse & Co.
Members
York
New
25 Broad
Stock
HAnover 2-0700
Listed Equity Shares
Exchange
St., New York 4, N. Y.
.
NY 1-1557
'
July* 1939
Aug. 1949
.
,
Specialists in
3.9%
4.9'
—
-J
---1
New Orleans, La. -
Birmingham, Ala.
Mobile, Ala.
4.2%
2.5
Direct wires
to
branch offices
our
However, the economic position of the holder of bonds and other fixed-interest assets
has worsened
Rights & Scrip
more than the above-indicated decline in their market prices. As the
general priced
level and' his; done well with a 25-time and 50% immediately become worthless, in
vastly
of
cost
Since 1917
living
economic "net" increase.
have risen
17 V2
times
since
McDonnell &fo.
i
New
York Stock Exchange
New
York
Exchange
Curb
Tel.
REctor
de-j
in
the
market
of
BROADWAY, NEW YORK 5
120
prewar,
40%
cline
Members
i
.
the
price
government
bonds
must
actual
the
of
loser
Continental Radiant
The
.
no
less than 98%
of
A. Wilfred May
Corp.
the
value
of his
.
Results
Stock
electrical radiant
new
be
off'!
"written
as
The
of
Equity
capitalist
capital.
Holding
who
turned
to
•
stocks
common
glass heating system.
decade
a
ago,
from the qualifications to
hard-and-fast
conclusions,
surely has made out - infinitely
apart
any
Bought—Sold—Quoted
than* have
better
demolished bond
the
completely
72 Wall Street, New York 5, N. Y.
holder
—and this divergence has been
continuing since the end of the
Telephone DIgby 4-5700.
war. *
MERCER HICKS CORPORATION
Teletype NT 1-2813
or
money
V
The
off
French
equity
prices is shown in the following
price index of all exchange-listed
course
common
stofcks:
American Air Filter Co.
Black Star Coal Corp.
VV,;'''
Common
Kentucky Stone Co.
*
5%
Preferred
-
1940
*
BANKERS BOND
Incorporated
1st
1945
694
1946
897
1947
1,122
1,172
1,122
389
633
1943-
1948
i
' 605 *9-1-49—
1944
625
the
stocks
has
crease
in
constant
enjoyed
market
holder
of
tenfold in¬
a
value—but
sufficient in the light of the
Floor, Kentucky Home Life Bldg
leaves him with
his real
Bell Tele. LS 186
in¬
position,
40% deficit in
a
v
in
Cleveland, Ohio
common
inflation
stock-holding
laboratory,
faced with the fact that
other
Central National Bank
of
this
are
media
fensive
and
better.
For
have
served
defensive
we
some
the
of¬
capitalist
SOLD
—
QUOTED
more
forcing
investor to
the
act
This is particu¬
their
because
so
example, the'
Continental
inflation,
Although investment activity, as
new equity financing
reflected in
and
Bourse
as
well
as
investment
investor
apathy, has for some months been
doldrums, there is no valid
parallel to be drawn with the
long-term continuing depression
throughout the American invest¬
banking
volume
and
.•
Closed after the
| ■
onset of Gerr
occupation, the Paris Bourse
man
reopened in 1943, but in a limited
After liberation in 1945, the
business
was
quite
satisfactory until >1948, from the
standpoints of new issue flotation,
Exchange activity, public interest,
investment
and
price
throughout
tradition—has
fallen
to
But
movements.
this
on
an
year
the
scene
"American" hue:
trading
one-third'
of
eral
Chicago
bullishness
postwar earnings until 1948, when
costs
and taxes finally
caught up with industrial prices.
Consequently, there
price fall from
renewed
ment's
Midwest
of
;
-
N. Y.
of
Inc.
Trade
Exchange
4, N. Y.
DETROIT
PITTSBURGH
SWITZERLAND
Royal Bank of Scotland
Incorporated by Royal Charter 1727
HEAD
OFFICE—Edinburgh
Branches throughout Scotland
LONDON OFFICES:
3
Bishopsgate, E. C. 2
8 West
49
Smithfield, E.C.I
Charing Cross, S. W. 1
bonus
Burlington Gardens, W. 1
'
64 New Bond Street, W. 1
TOTAL ASSETS
The Capitalist Perplexed
£155,175,898
long- and
short-term
Associated
tudes!
Glyn Mills & Co.
is
?
Exchange Bldg*
YORK
GENEVA,
to government
So much for the past
movements
Exchange
Exchange,
Cotton
CHICAGO
(1)
workers; (2) fears
following
sterling troubles; and (3) a fur¬
ther 30% rise in the price of gold.
Cotton
V,■■
.
other Exchanges
NEW
long-term "welfare state"
a
Exchange
Board
And,
.
has
of renewed devaluation
and atti¬
Now the French investor
displaying
complete
apathy
securities, both new and
Williams
Banks:
Deacon's
Bank, Ltd.
toward
old
This
ones.
degree of bearishness, not entailing liquidation
nor
permanently erasing the long- 15jgigjSI5JSl5I5ISISI5J5ISI5JSJSMSISJ5I5I5I50
term favoring of the
equity me¬
dium, is ascribed to the following
835
reasons:
(1) The "past performance" of
stocks
land1 and
versus
cited above.
for
erence
gold,
the
by
full year's
a
subscription to the Monday
gold by all classes of
inter-war
Even during
period it is shown
private
a
INVESTED in
as
The traditional pref¬
currency confusion.
Apart
study that invest¬
gold beat that in equities
from
income—added
and
Thursday issues of the
"Chronicle"
ideas
will
galore and
give
pay
you
liberal
dividends.
on.
the
privacy of such
a study, this correct
impression is
shared by every housewife and
Exchange
Union Commerce Building
market
because
Curb
New Orleans Cotton
.1
doubt about the govern¬
—cumulative
New York
:
Stock
the
firm,
very
Exchange
Commodity
of the government's efforts
cause
declining under the current world
Incorporated
Member
stock
a
January,!
1948, to 1,036 in; June, 1948. Sub¬
sequently, at the end of 1948, the
market
rallied considerably
be¬
prewar,
WM. 1. MERICKA & CO.
Broadway
was
1,178 in
York
'
Stock
York
New
increased
wages,
ment in
150
with
the population is growing and not
equity financing has disappeared,
with
investor
apathy complete
(rights to new capital subscription
York
New
has
volume
j
'Members
correspondingly more stock. This
was all right, and there was gen¬
wrote up
in the
ment scene.
\
New
been
Comparative French-U. S. "Street"
1856
H. Hentz & Co.
corporations generally
their capital and issued
currently,
4.1%.
Exchange
better off "net" during the
decade; and the buyer of gold—
mar¬
at
Trumanesque
pump-priming
1.9% in 1947, and then rose,to the
(increased^ social security, etc.).
unrewarding level of 1.49% as
During the first half of this year,
the
1948
average,
to 1.76% in
up to June, the market fell again
December, 1948, 2.23% in March, in
response to the ."disinflation¬
1949, and "2.52% Currently.
By
ary" character of ' the revealed
industry groups, banks
(unnagovernment's policies. That is, it
tidnalizCd) yield 3.1%, chemicals
showed substantial success in sta¬
2.70%,
textiles 1.06%, colonial
bilizing the
monetary
position,
trading companies 2.3%,-copper
prices, and : wages.
Since June,
refiners 3.2%, and steel companies
and
has taken
la
have
ever
decline
started
from
a
level of pricedividend
and
earnings
ratios
which were traditionally low (cf.
"Comparison
of American
and
Foreign Valuation of Equities," by
A.
Wilfred
May
in
American
Economic
Review,
Dec.,
1939)'.
The average yield
on all listed
stocks fell from 4.2% in 1939 to
larly
owner
a
than
speculator.
a
of. land has enjoyed a 20-fold in¬
crease in capital value, so * he is
*17%
—
been
declin¬
generally
equities during the
on
way.
Furthermore, in surveying the
results
BOUGHT
inflation
17 V2
multiplication in his costs, which
LOUISVILLE 2, KENTUCKY
Long Distance 238-9
112
1941—«—
and
low
Postwar, the French stock
ket was stimulated
by the fact
that because of the general price
intentions—it handed out
124
1942
Thus
m
The
ing yields
Climate '
(1938=100)
1939-
Common
not
performance of gold
been importantly offset
by dividend income.
means
that the Ren¬
tier
Common
has
as
2-7815
Glass Heating
The better
Established
contrast to their' bull-market pre¬
miums in the United States).
farmhand.
INVESTMENT
The
CLEVELAND
that
in
SECURITIES
Commercial & Financial Chronicle
highest authorities believe
case
of
(Continued
sterling devaluaon page
25 Park Place
New
REctor
York 8,
N. Y.
2-9570
28)
Public Utility
LAMBORN & CO., Inc.
>
99
WALL
Firm. Trading Markets
N.Q. B.
COLOMBIA
OVER-THE-COUNTER
Industrial
STREET
Railroad
NEW YORK 5, N. Y.
Municip al
BOLIVIA
SUGAR
Raw
—
Refined
—
All
5
New
study
on
request
A.C.ALLYNANDCOMPANY
11
Incorporated
II
Issues
35 Industrial Stocks
Liquid
Exports—Imports—Futures
DIgby 4-2727
INDUSTRIAL STOCK INDEX
10-Year Performance of
NEW YORK
ZIPPIN & COMPANY
CHICAGO
BOSTON
MINNEAPOLIS
PORTLAND, ME.
OMAHA
208
PHILADELPHIA
KANSAS CITY
BOOKLET
WATERLOO
MILWAUKEE
FLINT
South La Salle
Tele.
RAndolph 6-4696
St., Chicago 4
Tel. CG 451
ON
REQUEST
.
National Quotation Bureau
I rtrnrnnrafA/l
46 Front Street
New York 4,
N. Y.
THE
Number 4838
170
Volume
COMMERCIAL
v
&
CHRONICLE
FINANCIAL
(1035)
What Is The Gold Coin Standaid?
IN DE X
By WILLIAM W. CUMBERLAND*
Articles and News
Page
E.
Denying gold is obsolete
Cover
Spahr
Stability
other substance
no
Black__Cover
gold
MORNING
been long able to replace
Attacks "New Deal"; currency theories.
monetary device has
or
value standard.
as
TOP O' THE
leading types of gold standard
Points out, despite defects, monetary experience proves
currencies.
Cover
—Philip Cortney
The World Bank and European Recovery—Eugene
AND COMPANY
monetary standard, prominent economist
as
and investment banker describes
Difficulties in Restoration of Monetary
—
The French Capitalist's Experience Under Inflation and Dis¬
inflation—A.
Wilfred
May
What's Ahead for Business?—A. W. Zelomek
4
covery—James
4
Facilities—Eugene Bashore__
with
—Hon. John
and
gimcracks,
but
virtually
W. Snyder
6
.—
all
present
day
6
Now—Philip M. McKenna
governt
m e n
Truman's
Unemployment Policy—Roger W. Babson___
8
—
solemnly turn
Gold Coin Standard—Mechanism for World Trade and'Invest'*
ment—Leland
v
9
Rex: Robinson
Advantages of Permissive Incorporation of NYSE Firms
Barnett, Jr.__
tional" attributes such
gold
and
convenience,
1 i
10
;
—
g Government Responsibility in Monetary Affairs
y V. —Philip Le Boutillier
.
.
h
11
-
—
—
i
>•
■
■■■-
',
*""■»
•
*
i
*
•
1
t,
f
Steel Fact-Finding Board.Reports-'
they have aceompli shed
something
pound the virtues of paper money
and expatiate on the benefits of
liberation from gold.
these, or the -gold coin standard,
curred
will be discussed.
and
ard exists when
paper
and
11
Lower Court Decision in Otis Case Upheld
Good
Beginning
16
16
d—
(Boxed)
c
17
—
---
1
Export-Import Bank Grants $29 Million Loan to Yugoslavia.. 18
NYSE* Members to Vote
States
United
other
of gold'constitutes thd
tity
ernmental
bodies
World Bank Issues Foiirth Annual Report
20
picious
sonal
legal
Joseph Stagg Lawrence Analyzes Britain's Economic Crisis..
25 f.
some
right to
NASD Issues Stock Distribution Study
26
of
■
Underwrite New Rate,..
Policy
..^.—4-
Cincinnati
Stock
numbers are to-day sus¬
and
Businessman's
Canadian
gold
27 I:
of
8
\7/v
News*—Carlisle Bargeron——
Indications of Business Activity
36
—
__
16
—-
...
modern
matically and inexorably placing
43 £
a
Prospective
27
Governments
on
Security
Offerings
?
Securities Now in Registration
The State of Trade and Industry
26
—r-—-
40
on
5
—
(Walter Whyte Says)
Tomorrow's Market
Washington and You
*See article
42
—-
Securities Salesman's Corner
,
44 >
:—
2.
page
Twice
1
Weekly
COMMERCIAL
The
and
c/o Edwards
Coin
Standard
CHRONICLE
Reentered
Reg. U. S. Patent Office
ary
WILLIAM B. DANA COMPANY, Publishers
25 Park Place, New
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9576
HERBERT D. SEIBERT, Editor St Publisher
WILLIAM
C.,
8, 1879.
York 8, N. Y.
to
E.
Conference,
granted
controls
activities
bullion, subject to
by Dr. Cumber¬
International Gold
the
at-
genera¬
such number of units of coins
address
*An
land
) TECHNICIANS
K.
Smith.
&
Copyright 1949 by William B. Dana
Company
• lA'
■
FINANCIAL
London,
Gardens,
Drapers'
and,
such
POR
OWEN
gold
have
of the revelations
Economics,
a
an
INVESTORS
v
government
York
Published
some
New
2
NEW
governments also provide that
those-who possess gold bullion
least knew the difference between
34
...
...
on
the
who
Under the
deficits are in
reality national investments, that
public debts are only bookkeep¬
ing items since we owe them to
ourselves, and that printing press
money is a synonym for purchas¬
ing power.
v
Our ignorant old ancestors at
19
Railroad Securities
veto
that
25
Public Utility Securities
of
the s.
of
when
he
managers
money
'*
Reporter
Thurs-
every
very
standard
Nevertheless,
money.
to
Unfortunately for the amour
of the expositor, it is im¬
possible to present the gold stand¬
ard as something intricate, eso¬
teric and obscure.
Rather, it is
simplicity itself. Possibly for this
28
Our
regular 5.
"Special Opportunities" alone $50. senii-ahn.
economic and geo¬
News About Banks-and Bankers
—
a
issue
day's
from
that gold has proved to be
the only money material which
has given satisfactory results over
a
prolonged period of time and
disparage the gold standard, since
it cuts them down to size by auto ¬
Reporter's Report
nected with such
still <■ exist
reason
a
it1 for
and
surround
and
12
takes
restrictions
as
history, experience, logic
common
sense
unanimously
NSTA Notes
Observations—A. Wilfred May
sound. strange to
should
propre
17
feature in
any
This
gold
kinds/ particularly
graphical circumstances. Hence
what is the gold standard?
8
....
Einzig—"Probable Effects of Sterling Devaluation"..
Our
that
times.
ancient
gold without
whatever.
tion/ which
per¬
have
buy, sell, import, ex¬
hoard
or
At least
under diverse
18
———-—.———•——
Dealer-Broker—Investment Recommendations—
Funds
•
33
Bookshelf
Coming Events in Investment Field—
Mutual
may
money
alchemists
own,
other
or
entities
definition' of ~ the
granted.
our
and
restriction
merely
was
the
13
From Washington Ahead of the
paper
over
27
..—Cover
....—
Securities
port
agree
Stocks
Insurance
gold freely cir¬
superiority
magicians
to-day, who proudly proclaim
that gold is obsolete, may in retro¬
spect cut as pathetic a figure as
Regular Features
Bank
when
and when the
taken for
Midwest
Stock- Exchange
As We See It (Editorial) „4—
gold standard,
of it. Thus there may be
merit in reviewing the "bad
times"
man's Corner,"
cur¬
unit of the country and that
all individuals, corporations, gov¬
rency
of
—
With
Merger
Exchange* Rejects
ex¬
26
Registration
—
personal
no
government by
law stipuates that1 a* given quan¬
perience with the
culated
Sales- =£
"Securities
the
stand¬
a
*
19
have
Perhaps
-
most
and
Such
a
Ira Haupt & Co. Uses "Railroad'' to Tell Investment Story..—
New Y"ork Institute of Finance to Inaugurate New
"v
ex¬
countries
old
selling securities read 5:
of: coiirsev various
-
18
Must
*
fact
are,
—
Incorporation Plan.
on
John H. Williams Says Sterling Should Be Devalued and U. &',
v
and in
gold
There
:
This has oc¬
sufficiently long in time
sufficiently broadly in space
that all young people in the
and large
"
difference
no
clever, helpful hints =
for
'
types of gold standards, such as
gold coin standard; gold bullion
standard and; gold - ex e h a n g e
standard.
Only the simplest of
is
For
=
E "Chronicle."
between
tell
there
|
Selling
on
=
managers,
money
meddlers.
money
At least these govern¬
their populations that
portant.
ments
I Pointers
scarcity,
as
V a r i o u s Types of Gold Standards
9f
MM*'
„
permanence,
these self-same
Cumberland
or
im-
and
7^ -
—
W. W.
ingen¬
-i-i_-
A
i
that
;
addi¬
has
MllllllllllllllllllilllllllllHIIIIIIIIIIIIIFV
•fc
divisi¬ E
bility, large value in relation to
E
size and weight, and an impres¬
sive history of practical effective¬ E
ness, when not interfered with by
E
be-
Dollar-Sterling Conference Agreement to Ease Dollar Shortage
Monetary Fund Suggests Devaluations—^—
-
ely
e v e
ious
New School Offers Course on' Today's Investor
«,
v
new,
'
commodities .but' also
into
YORK
Telephone: WHitehall 4-6551
a
paper
n a
—Maurice
now
s
and
liability.
They
lacked the astuteness, or the casu¬
istry, to convince themselves and
others that a promise to pay is
actually equivalent in value to a
commodity which from time im¬
memorial has not only been glad¬
ly accepted in exchange for other
the
whiskers
5
Point-IV Program—Means of Sustained Prosperity
•
year
those
for
WALL STREET, NEW
99
asset
an
the
How to Return to the Gold Standard
again
turn base substances into gold; He was known as an alchemist,
and he practiced his arts over the course of centuries. Modern stream-
lining has
d ispensed
Washington Bell
New Money and Our Expanding
top
and
to
Problem of European Re¬
Currency—Real
the
of
give
Many of us can recall a picture of a bewhiskered dabbler in the
obsoletes.
occult, surrounded by intricate apparatus, and engaged in an attempt
2
-
3
Convertible
we
again
What Is the Gold Standard?—William W. Cumberland
Gold
ItnSTflF
Partner, Ladenburg, Thalmann & Co., New York City
Steps Toward International Monetary Stabilization
—Walter
B. S.
..
.
Z
1-5
-
*
*
Schenectady
Sfljr iNetu fork Simvjj
"All the News That's Fit to Print"
'
Worcester
4
(1036)
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
Whatfs Ahead For Business?
'
•
V:';'"
Gold Convertible
^'^M-0
By A. W. ZELOMEK*
Mr. Zelomek, maintaining recession is not over, forecasts a long and continuous fall in
prices, but holds
the recession is not the beginning of major depression. Looks for production to continue in most lines
By JAMES WASHINGTON BELL*
President, Economists' National Committee on
Monetary Policy
Head, Dept. of Economics, Northwestern
University
present level, and urges that aggressive merchandising be maintained to bring distribution back to
on
normal proportions.
In opening International Gold Coin Standard
Conference in New
York City, Dr. Bell points out
problem of European recovery
resolves itself into: (1) a reconciliation of
domestic and interna¬
tional monetary objectives; and
(2) using mechanism of gold con¬
vertible currency to correct imbalances of
Late last spring
It seemed to me that many businessmen were a little too pessimistic.
Many of them seemed to be afraid that a major depression was developing.
r
In
come
too
last few
the
weeks,
0
back
i
m
In
s-
been
a
pickup
new
orders.
lasted
mostly in two
In
13
months.
of
recovery
1938-39,
months.
12
people have be-
some
met¬
nine months after the low in pro¬
duction
als.
had
and
a
in output had set in.
recovery
case
reached
been
movements
verse
commodities.
an
for
When
international payments.
individual
the
price
Denies monetary management invalidates
gold standard system, and
urges U. S. lead off in "return to gold."
of
individual item declines sharp¬
enough,
sharp
and
its
position
This conference is being held on the eve
of another conference
of ministers, which is scheduled to
meet in
Washington Sept 13 The
immediate purpose of the
Washington meeting is the so-called
British dollar* crisis,
but the main problems to be
discussed involve
im¬
enough,
there
will
be
rebounds
from
time
to
proves
time; the gradualness of the gen¬
eral price
decline will prevent the continua¬
any strong sympathetic interfer¬ tion of Amer¬
from this source.
ence
non-
the
that
me
ly
1920-21, when the price de¬
cline
was
.exceedinglydrastic,
prices continued downward for
markets—tex¬
In
lasted
climbed
The de¬
proceeded more rapidly in
its early phases, it was 17 months
before
the
previous
high
was
again reached. The decline had
But this has
ferrous
had
1920 peak.
the
the
occurred
tiles and
index
which
tic. There has
in
to
cline had
aturely
t i
p
to
seems
months before the
20
was
production
should say
p r e m
it
1921
optimistic.
perhaps I
Or
the other hand, it
on
<S>~
little
a
The
;
moral
for
ican
is
you
More than ever, a
plain.
marked degree
aid
Europe
cond itions
selectivity in buying policy will which will
necessary if purchasing is to give greater
reach a satisfactory degree of ac¬ assurance
o f
curacy.
.
economic
..
prices
provement.
/ (a) One was the marked liqui¬
14
that had already taken
place, to¬
the sharp
reduction
gether with
other is the seasonal
factor, which is always favorable
(b) The
to those markets during the Sum¬
mer,
and
retailers
as
for fall
prepare
cutters begin to look ahead
as
toward the next
'1 In the
spring.
of non-ferrous met¬
case
als, industrial buyers had simply
cut their orders to
lier this year.
the bone
Price declines
ear¬
were
exceedingly sharp, and when in¬
dustrial buyers went on a con¬
servative replacement basis there
fair-sized rebound in prices.
was a
But
there
has
through in
operating
on
no
consumers
non-
still
are
conservative basis
a
reduced rate of activity.
a
Now I think
tion
that
have
we
should
be
one
present
recession
spirited
recovery
ques¬
answered
without any equivocation;
Is the
with
over,
No. I think
of
have
we
the
probably
decline
production.
amounted
in
seen
industrial
This had
to
already
through July,
17%
and I never have believed that it
would
to
much higher than 20%
go
25%.
'
But
the
as
distortions
have
not
eliminated,
particularly in
goods field; business
durable
whole
a
problem;
much
has
its
conquer
not
been
able
aggravating
and
and
dustries
unless
the
have
I
am
to
very
automobile
difficulties
ahead that will
be
at
Some
Past
in¬
lying
least
erately disturbing to all of
mod¬
us.
Experiences
No two business cycles are ever
the same, but most of them have
points in
some
it would be
what
Here
we
are
r
a
common.
I think
mistake not to learn
can
from
past
history.
things I believe
some
you should consider.
-
T
1 First, it
always takes longer for
the production index to recover
its
losses
than
it
does
to
them in the first place.
;■'?
;
record
V;,
Second, it always takes longer
for the
wholesale
price index
to
finish its decline than it does the
production index.
-,
important points.
address
by
beginning
in
,
Mr.
Zelomek
before 23rd Annual Convention of
the National Industrial Stores As-
spciation, Atlantic
Sept. 13, 1949.
in
the postwar period,
observer dared suggest
that the boom would not continue
City,
N.
J.,
price
level
gradual rather vious loans
downward and advances.
trend will be enough to maintain
It is hardly
a
considerable degree of caution
necessary to
among most businessmen.
While review the
than
are
rapid, the
individual
One of
will
concerns
protect
caution.
This
also
other observer was
always quick to point out that:
(a) Federal support under farm
prices, and
will
forever,
some
the presumed ri¬
(b)
-
moral
a
for
hearing
are
the
a
now
of
about
shortages. But even though
tight positions may develop, tfcis
because
be
only production
sharply curtailed and
s
These factors
cited as be¬
were
ing favorable, and in
a sense they
Certainly a gradual decline
in wholesale prices does not lead
to
as
much
forced
liquidation
and as great a volume of distress
selling as occurs when prices go
down sharply.
are.
But
ors
in
another
important
(1)
and
bankruptcies that
followed the first World War, but
they also hold
limit
the
living cost and
purchasing power
public. And the ur¬
is
consumer
than
merous
up
real
of the urban
much
farmers.
more
nu¬
squeeze
the wage earner.
on
(2)
The rigidity of wage rates
manufacturing and the strength
in
labor
•'t
unions
tions of labor
but
this
is
a
no
gives
some
sec¬
preferred position;
help and may be
to
es¬
problem at the moment is
get
costs
down.
And
this
operating margins is
already having an adverse effect
on new
capital investment, which
makes
on
employment and industrial activ¬
ity when it is rising and consti¬
tutes an important drag when it is
You
seems
to
that the present
me
willsaid
kets.
be
The total
decline may never
much precentage-wise as it
in 1920-21. • But the
as
was
period of
decline
than
a
is
likely
to
stretch
out
substantially longer time
was
This
the
case even
conclusion
has
tant
implications
policy:
in 1937-39.
two
for
impor¬
operating
be
accompanied
that
what
I
of
caution
(1) This is
by
very
di*
>
the ultimate
objective
of
assistance"
is
still
far
being attained in nearly all
countries involved in the
the
sary.
But you must also make allow¬
for the fact that consumer
ances
demands
shift
consumer.
merchandise
on
meeting of this sort is not a
good place to go into details
about
individual
theless,
of
of
judged
merits.
own
A
article
be
there
out
of
Never¬
certain
are
merchandise
arated
items.
that
classes
be
can
individual
sep¬
discus¬
sion.
Hard
Generally
conditions necessary to enable her
England do it." England has made
most serious and heroic attempt
of
gram
has
endured
"auterity,"
a
pro¬
heavy
taxa¬
tion in the upper brackets and
social benefits to the masses have
made
budget-balancing difficult;
devices, they claim, have
these
been
these
have
the
are
be
to
items
most
I
to
where
you
careful.
Sales of major appliances went
to a seasonal basis last fall.
back
considerable
fore
what
amount
developed
of
over¬
quickly,
manufacturers
was
and
dealers
take markdowns and
be¬
many
had
to
inven¬
some
tory loss.
But
the
of
general
effect
merchandise
different than
a
of very
were
on
this
quite
develop¬
was
similar
Instead
sharp price declines there
only
moderate
(Continued
on
the
ex¬
"unofficial"
rates fluctuate with the fortunes of
economics and politics).
forcement of "official"
exchange
The
rates
other restrictions have
us
money
that
Ex¬
fundamental
being reached by
a
reductions.
page
30)
Confer¬
bring the alleged
"stable
domestic
stable foreign
exchange**
vs.
New
Administration considered it
to
necessary
abandon
the
gold
standard and cut loose the dollar
from foreign currencies in order
to
raise
flation"
domestic
prices through a "reinpolicy. In other words,
policy dominated and
the
dollar was
forcibly devalued
through gold purchases until the
price
of
$35
•
per
ounce
was
reached in 1934.
Gradually
the
advantages
pres¬
and that the problem
stable balance of interna¬
tional payments will remain un¬
Agreements
and
were
entered
into)
by the middle of the 1930a
some
economists realized that na¬
tional econmic
health, i.e., maxi¬
mum
output, employment and in¬
depends not only upon do¬
mestic economic balance, but also
upon the maximum benefits de¬
from
foreign
trade
and
Foreign trade benefits
finance.
are
not
ficient
so
obvious to
a
self-suf¬
like the United
(though we realize how de¬
sirable and necessary are things
like coffee, copper, and
tin), but
country
States
in the
case
of countries like Eng¬
(2) Under the gold standard
system the gold-flow-price mech¬
anism
automatically
reconciled
monetary policies with,
prerequisites of international
domestic
the
balance
supply
of
of
allowed to
payments because the
domestic money was
be determined by in¬
ternational market forces, i.e., by
set movements of the inter¬
solved at the end of the Marshall
the
Plan period in 1952 unless a new
national balance of payments.
favorable or surplus balance
approach is made.
tried
and
present
failed
policies,
If England has
under
can
past
we
of
foreign trade again became appre¬
ciated (the Hull Reciprocal Trade
and finance are vital to domestic
welfare.
hampered
market.
no
of
of
trade and spelled risk and uncer¬
tainty in the
Economic
to
land, the benesfits of foreign trade
by currency controls,
trade
agreements
and
bilateral
I
en¬
and
expect
recognized
happening, and
distributors
class
(while
War
the attention of the
non-spe¬
cialist and economist.
The
rived
change
World
took the drama¬
.
come
prevent
ent mean s
believe
post
and
of 1933
social
necessary
of
scuttling of the London World
unrest, political upheavals. What¬
ever the exigencies of the domes¬
tic
economy,
England has not
of
speaking,
of
Monetary
ence
Deal
solution is
Other
Lines
tic
and
perts tell
Appliances and
light
to
at "official" rates of
Each
must
the
prices
yet the allocation of the
great bulk of our aid. and planned
management has, so far, conspicu¬
ously failed to bring about the
paradox
international ob¬
The
conflict
became
apparent
in
the
1920s
when
the "rules of the
[gold stand¬
ard]
game" were
examined in
England, with its sterling area,
undoubtedly the most critical
country in need of rehabilitation,
constantly; that succeeded in
gearing herself to
already been the world-wide
economy. Her in¬
well liquidated; and that there
convertible currency, she insists,
are
always new items coming must be
accepted by other gov¬
along to stimulate the interest of ernments
the
versus
jectives.
is
markets have
some
domestic
"antimony"
She
pay¬
not the place to dis¬
apparent
program.
ments.
correct im¬
international
healthy economy independent conditions, but it
tivity to provide exports for bal¬
I
ancing, her foreign trade and pay¬
neces¬
the
cuss
to increase her industrial
produc¬
believe
is
ment had been in textiles.
(1) A general and gradual de¬
cline in the price level is
likely
to
far
?>
>
before, and I repeat
amount
A
to
of
of
through the price system
and money rates.
status
outside
from
a
'
that
premature
optimism
should be avoided and that a cer¬
stocking
way
going
now,
tain
price level still has
long
by
from
guess
so
I said
declining trend in the wholesale
a
supplies!
every one of you should pay very
close attention to individual mar¬
declining.
It
surpluses
production.
valuable contribution to
a
in
new
into
have
very
businessmen, where the
increase
an
Individual Markets
Moreover, both factors exag¬
gerate the operating problems of
pressure
to
create
its
sential
balances
ments
capacity that created tight to stand on her own feet. The
supplies by going out of produc¬ French have a
saying that "when
tion is there, ready and
waiting, to God wants something done he has
a
handicap to the millions of
white collar and salaried workers.
many
mod¬
a
The
Industrial
communities, such as you repre¬
sent, will be particularly hurt by
the
lead
:
„
even
erate
increase
in
prices
will
quickly stimulate production and
perhaps
these fact¬
sense
Federal support under
prices will certainly avert
the agricultural
influx of orders and
back
unfavorable.
are
farm
present
ments,
has
We
gidity of wage rates, were factors has been
that would prevent a price col¬ inventories reduced.
You must recognize such situa¬
lapse such as occurred in late
1920.
'
tions as being temporary.
/
Any
more
tary convertibility to
mere
delivery requirements more of European
J. W. Bell
aggressively for well-liquidated economic re¬
items
than they will for those covery.
In spite of Lend-Lease.
where prices are still relatively British
Loan, the Marshall Plan,
high, the general attitude will be Bretton Woods and ITO agree¬
retailer.
over
recovery
...
*An
for
out¬
to be two¬
me
international objectives, and
(2)
to, utilize the mechanism of mone¬
their
Earlier
go.
the
in
.
Here are
some
details about
what happened in
1920-21, and in
1937-38. They illustrate these two
In
low
when any
cost
mistaken, capital goods i*
dustries
decline
to
the
Price Decline This Time Likely
to Be Long
ban
price
been
after
longer if war had not broken out
in the fall of 1939 and stimulated
a
already begin¬
ning to get under way?
/•: My answer to that is a definite,
most
continued
months
put had been reached. This de¬
cline might have gone on even
carry-t
orders, and
new
ferrous metal
at
been
recovery appears to
fold: (1) to reconcile
domestic and
.
buying.
in output.
The real problem of European
re¬
two factors
dation of distress merchandise
Twofold
be
In
Zelomek
Problem of European
Recovery
of
have been responsible for the im¬
W.
K.
any other country (short of to¬
talitarian economies) to succeed?
to
•
under
(2) On the other hand, even covery than
1937-38, when the decline in
prices
was
relatively
smaller, though declines in the general have our pre¬
of textiles,
Currency—Real
European Recovery
Problem of
President and Economist, International Statistical Bureau, Inc.
,
Thursday, September 15, 1949
A
of
payments
brought gold into the
country and expanded the volume
of
money;
an
unfavorable
or
deficit balance
introductory address prepared posite effect.
the supply of
by Dr. Bell as Chairman of the
produced
The
the op¬
influences
money on
of
price and
International Gold Coin Standard
cost
Conference, New York City, Sept.
8, 1949. In Dr. Bell's absence, his
paper was read by Dr. Charles C.
(more recent theory adds and em¬
phasizes incoipe effects) tended to
Executive
Fichtner,
Vice-Presi¬
dent of Buffalo Chamber of Com¬
merce
and member of Economists'
Committee
National
Policy.
*
Monetary
on
'
levels
correct
the
and
on
interest rates'
imbalance by
trade
and
These
corrections
capital
*
shifting
movements.
meant
with¬
drawing gold reserves for export
minor tightening of short-
and
continued
on page
38)
Volume 170
Number 4838
f
THE
Steel Production
The
Vn
&
FINANCIAL
New
CHRONICLE
By EUGENE BASHORE*
Carloadings
Retail
Vice-President, Blyth & Co., Inc., New York City
Trade
Commodity Pi-ice Index
Food
:
■
Industry
Price
5
(1037)
Money and Our Expanding Facilities
ti
Electric Output
State of Trade
and
COMMERCIAL
Reviewing changes in capital market during past two decades, .leading investment banker finds public
savings are being disproportionately channeled to business through institutions which are restricted to
"safety first" investment Sees inadequate recourse to risk capital and economic danger in excessive
Index
Auto Production
Business Failures
J
resort
debt capital.
to
Calls equity market highly unsatisfactory, but contends public utilities have
by changes in investment patterns than other forms of business. Holds danger to private enterprise underlies recent political ideologies.
been less harmed
Total industrial production for the country at large in the past
showed a slight recession from the week preceding, due to
week
Ten years ago there were 17 million
gas utility customers; today there are 22 million.
Ten years ago annual
gross revenues were $800 million; today they are twice that, $1.6
Ten years ago gas
Latest reports released by the U. S. Labor Department's Bureau billion.
plant expenditures were on the order of $100 million a year;
of Employment Security reveal that the brighter trend for job today they are
<»$800
million
a
one of us because it is an essen¬
and individual savings to be again
prospects, which improved considerably during July and August,
year.
tial process by which our eco¬ converted into still more tools,
continued to improve up to the beginning of September.
The gas in¬
nomic system functions...
does; capital have value.
Pro¬
In a current report, Secretary of Labor Tobin stated that unem¬
dustry—and I
ductive tools are capital and dol¬
ployment compensation claim figures for the week ending Sept. 3
Our
Capital Markets
realize the
lars are only the medium of ex¬
showed "job prospects improved and industrial layoffs again de¬
difficulty and
I wish to discuss our .capital change by which they are bought
clined."
*
possible conf 7
markets, but not from the narrow and paid for.
Earlier last week the Department of Commerce reported that
fusion
of
technical standpoint of what kind
employment reached a 1949 peak just under 60 million in the
Sources
of
speaking of
Capital
of bond issue can be sold, at what
second week of August while unemployment fell off 404,000
the gas busi¬
price and how you go about it.
from July to August.
Capital belongs to people. It i$
Last Friday's report by the Labor Depart¬
ness as though
Instead, I wish to relate the rais¬ not an
impersonal thing and it is
ment's Bureau of Employment Security—which collects the State
it were a sin¬
ing of new money for your ex¬ not a force
antagonistic to people,.
data—shows that trend is continuing.
gle thingpanding facilities to the function¬
Capital is often symbolized as a
A drop of 12,000 in the number of new claims for unemploy¬ has
had
and
ing of our capital markets in the
paunchy old gentlemen witt*
ment compensation during the week ending Sept. 3.
So-called initial still has a tre¬
operation of our economic system. bloated
jowls and a fat cigar. That
un¬
claims for employment compensation totaled 251,000 in the week mendous
That is a subject on which many
is not a correct picture. The truth
dertaking
to
ending Aug, 27, compared with 239,000 last week.
Eugene Bashore
thoughtful people are very rightly
sy capital is widely disseminated
7".';:'.'
.*
* '"■>;*
'■
\
.y: finance and
devoting much serious concern.
among all
parts of our society.
construct the facilities needed to
When capital is acquired by a
Acceding to President Truman's request for an 11-day post¬
The
laborer
does not consider
meet the service requirements of
business corporation, it is gener¬
ponement of the steel strike by the United Steelworkers, CIO,
himself to be a capitalist, but if he
its customers.
Budgeted expen¬ ally
scheduled to go into effect on Wednesday of this week, Philip Mur¬
represented by one of three carries life insurance or has a
ditures for the four years, 1949principal classes of securities:
ray, head of the steel union and the CIO, wired the President that
bank account, if he saves, he conmore
than 500,000 union members involved in the dispute with 1952, according to American Gas
By bonds, on which the inter¬ tributes to the total
pool of capi¬
Association
figures,
are
$2.7
bil¬
est and
basic steel would continue at work until 12:01
repayment of principal tal.
a.m., Sept. 25.
•,,
lion, an amount slightly greater are fixed obligations;
By also accepting the recommendations of the President's Fact- than the
aggregate of all expen¬
The largest aggregation of capi-*
By preferred stock, the return
Finding Board as a basis for talks with companies on social insur¬ ditures for the last ten
years.
tal is with the life insurance com¬
on which is payable only after the
ance and pension matters* the union cleared the
way for a resumption
Some companies can supply a
bond charges are met;
panies, some $r-3 billion, - which
of negotiations with basic steel producers.
good share or all of their new
as
custodians, invest for
By common stock, which evi¬ they,
In its findings, the Board ruled against a wage increase for the
dences
the
ultimate
ownership their 78 million policyholders.
money requirements out of oper¬
steelworkers but recommended that the companies instal social in¬
ations, from depreciation reserves which is subject to all of the risks They are the agency by which
surance
programs and undertake joint studies with the union on
which
are
provided to replace of the business.
capital, in the form of dollars, be«^
the subject of pensions.
1
worn-out property and from re¬
! Accordingly, it is my purpose to longing to these 78 million policy¬
t
Mr. Murray, it was reported, showed plainly that he was pleased tention of earnings.
holders becomes converted
into
Others can consider with
you the conditions
with the "findings" of the Board, or more particularly, with that supply little or none. More than
tools of production.
There are
underlying that segment of our
part of the report dealing with welfare, and hailed it as "the most half of the budgeted expenditures
other such .a g.encies, savings
capital markets represented by
Constructive contribution of its kind made in the history of the are
by , natural gas. transmission these three principal classes of banks, endowment funds,' trust
United States."
^ '' companies most of which have securities. I shall disregard other funds, pension funds, savings and
Another bit of welcome news for the4 steel industry in particular, little cash left over after paying segments represented by commer¬ loan associations, and others. Some
and the country in general, was the announcement on Monday by sinking funds on existing indebt¬ cial loans, real estate mortgages, people prefer themselves to select
the particular kind of tools : in
The Brotherhood of Railway Trainmen of its acceptance of a National edness and reasonable dividends. governmental obligations, etc.
which to invest their savings in¬
Railway Mediation Board request to postpone for two weeks a strike Aggregate figures may mislead,
Before we proceed too far, I
the Labor Day holiday closing of many plants. It
continued,
to be only moderately under the high level of a year ago.
-on
the Union Railroad Co.
which
was
set for
6:30
a.m.
however,
(EST)
on
The
strike, which would
involve only 1,200 men, would have
operations by the consequent layoff of
thousands of steelworkers in mills throughout the Pittsburgh area.
seriously
.
disrupted
steel
According to reports yesterday, operators in the soft coal indus¬
try feared
nation-wide coal strike would be called last night be¬
cause of the charge made by John L. Lewis, United Mine Workers
head, that some mine owners, particularly in the South, had defaulted
on their payments to the unions welfare fund.
It was presumed the
main objective of a walkout would be to strengthen the miners' posi¬
tion in contract negotiations which were to be resumed yesterday.
•
7;-,-7v.-
a
777.:
The
,
trade-wide
,7
>3
;
*
7v:;.'V'7 ''-"V^
*
net
gain after estimated Federal income taxes
for department stores with annual sales over $1,000,000 declined to
1.2% of net sales at the close of the first half of the fiscal year 1949
ias compared to 2.9%
reported for the identical stores for the cor¬
responding period of 1948.
On the basis of a study made by the
Controllers' Congress of The National Retail Dry Goods Association,
covering results of department and specialty stores during this period,
228 department stores and specialty stores participating in the sur¬
vey, with aggregate sales of close to $1,000,000 for the first half of
1949, a trade-wide trend towards diminishing profits and an increase
in the number of stores showing actual losses is evident.
Of those department stores
in the above category reporting net
gain data, 93% had lower net gain performance or greater losses
during the first half of this1 year compared to the results achieved
by these
stores during the comparable period of 1948; 2% of
experienced no change and 5% showed improved per¬
Actual losses ranging from 0.1% to 7.9%
of net sales
were evidenced
by 31% of these reporting stores; 5% broke even,
i.e., showed neither gains nor losses, and 57% realized lower profits
the
but
30%
Tuesday.
same
stores
probably no more than 25 to
of your capital requirement
That
sources.
public markets.
very
-
inquiry
of
tions
that
means
billion must come from
close to $2
Your
internal
from
derived
be
can
capital markets is,
timely one.
our
therefore,
a
we
should have
some
under¬
standing as to what we mean by
capital.
Capital is generally rep¬
resented by a dollar sign.
In the
form of currency, capital has no
economic
condi¬
the
into
think
use
or
value except as a
Only when
medium of exchange.
capital
in the form of dollars is
expended for labor and materials
to create tools of production does
stead of leaving this selection to
some financial agency. They
are
the individual investors who buy
bonds
and
common
preferred
stocks
tion. There
are
millions of them,
big and little, but mostly little*
They are not bound by any laws
as to what they shall buy and so
they may accept more or less risk,
The responsibility for1 raising
for the sake of gain. All of these
capital falls .on the shoulders of it become useful. Only when cap¬
thousands of agencies and all of
comparatively few persons. The ital is converted into a gas pipe these millions of individuals serve
procedures used are highly tech¬ line, or a power plant, or into
the single purpose of investing?
nical
and
the
skills
employed machinery and. equipment, and
our national savings in productive
are
highly specialized. Much of then only as these tools can be
(Continued on page 32) \
'•
the work is paper work, the prep¬ operated
to
produce
corporate
aration of registration statements,
bond
indentures,
underwriting
agreements and other documents.
On the other hand, the investment
of new capital in new facilities
affects
all
in
number
vast
a
of
walks
of
life.
A
people
million
for pipe is a million
mine ore, to smelt
iron, to make steel plate and to
roll pipe. ' It is a million dollars
spent on men at work with tools.
In a large sense, the investment
dollars spent
dollars spent to
capital is the concern of every
of
formance.
than in the corresponding period of 1948, the study reveals.
7:
(Continued
STATE AND
on
page
For the
by Mr. Bashore at
Convention of the
*An address
♦he
Annual
Pacific
MUNICIPAL BONDS
Association,
Gas
Coast
Santa Barbara,
31)
Cal., Sept. 8, 1949.
"OBSERVATIONS"
CORPORATE BONDS
A. Wilfred
■
LOCAL STOCKS
May, in
a
dis-
patch from Paris, com¬
ments
on
French
-tion
and
Dis-Infla-
in
France.
on
page
<
See
ar-
Established 1894
ATLANTA
1,
GEORGIA
'
TOfetype AT-288 ;:
Long Distance 421
'
tide
INVESTMENT
experience of
capitalist under
Inflation
RHODES-HAVERTY BLDG.
and
stocks of their own selec¬
2.
i
<
Members New York Stock
:7
BANKERS
Exchange and Other Leading Exchanges
UNDERWRITERS AND DISTRIBUTORS OF
;
INVESTMENT SECURITIES
BROKERS OF BONDS, STOCKS;
Private Wires
•
COMMODITIES
Home„Office: Atlanta
•
Phone,LD-159
6
THE
(1038)
COMMERCIAL
FINANCIAL CHRONICLE
&
Thursday, September* 15yl949
*V
Point IV Program—Means
of Sustained Prosperity
' By HON. JOHN W. SNYDER*
,
.
Secretary
,
How to Return to the
YS&V
of the Treasury
Gold Standard Now
*
,
*
Secretary Snyder, asserting there are'major indications of economic activity toward sustained pros¬
perity at home, lauds Point IV Program as means of extending this prosperity throughout world.
Upholds proposal for guaranty of private foreign-investments against certain definite hazards, but
warns placing funds abroad should not be used for purposes of exploitation.
'
By PHILIP M. McKENNA*
President, Kennametal, Inc., Latrobe, Pa.
National Chairman, Gold Standard League
W;;
Today, almost 150 million people inhabit the United States. The great majority of
are
people who have known how to benefit by expanding knowledge and the advance¬
ment of independent ideas.
Americans are strong in their views. Vigorous intellects and
them
minds
free
of
i ety
s o c
produce
of
progress
our
sional contro-
In Europe,
But
tion of plant
Am
ic
e r
ans
how
know
well
as
course
to de¬
as
Look at the
the
of
few
years.
Our
p ro d u ctive
machinery
past
almost
widespread destruc¬
and equipment, and
of the war, made
impossi¬
a
urgently required. We re¬
sponded to_ this need through our
foreign aid programs.
over¬
There is evidence
nearly every¬
night to meet the vast require¬ where in
Europe of resourceful¬
ments of war. Almost as quickly,
ness,
courage and skill on the
we turned to peace.
Our factories
part of European leaders in mak¬
and farms had to strive to satisfy
ing use of this aid. And, generally,
the pent-up demand in this coun¬
we can say that the first stage in
try for civilian products which
the struggle to repair the shat¬
had been in short supply during
tered fabric of European economic
the
At the
time, nearly
every other nation in the world
sought to draw upon our produc¬
tion to meet their own require¬
war.
ments.
same
/-Y.Y;?YY V;:Y V
Some
the
of
which accumulated
try during the
met.
-K-
backlog
this
in
war years
:■.]
demand
coun¬
has been
For
example, since V-J Day,
Americans have bought close > to
15 million new cars and trucks,
32 million
refrigerators,
uum
cleaners and washing
chines, and ovei* 50 million
radios
new
could
television
and
sold
have
cars
be
ma¬
new
Nflw
sets.
fast
as
vac¬
they
as
turned
mand for
out, yet the de¬
passenger automo¬
new
biles is
continuing at a very high
important areas of
the economy also—notably hous¬
ing—supplies have not yet been
level.
In other
sufficient
to
meet
needs
the
purchasers.
.jof
\
Where
shortages
have
been
overcome, there have been read¬
justments to a buyers' market.
Some downturn in prices has oc¬
curred.
But
ord levels
in
firms
rec¬
and with large untap¬
resources
the
in¬
consumer
continuing at close to
comes
ped
with
of purchasing power
hands
of
both
business
the
and
consuming public,
adjustments have not proved se¬
vere.'*'',,-1
It
is
YYYYYY
;
important
to
remember
that plentiful supplies lead to im¬
proved products and lower costs
developed areas is unknown. One
i
of the first steps
life has been successful.
Now, however, we are entering
phase of this struggle
of rehabilitation. In. this second
upon a new
we are concentrating our
attention on helping these coun¬
phase,
tries to
support themselves.
The
same
the
means
answer
gold
needed
as
only legal tender in that country.
as
tool of free
is to discover
to these and many re¬
How
can
implement of
Several years ago I listened to a
speech tracing the evil effects of printing-press money, politicallymanaged money and credit on the life of our people. The speaker
a
<$>escribed,
as many of us
termine whether the interest dis¬
confirm by
played in
my community was the
in other places I talked in
Philadelphia and in New Jersey
to three service clubs finding an
intense
interest in
the
studies
our
of
the history
irredeem¬
assistance
able
Guaranty of Investments
same
paper
there also.
money, the
eventual
tary
same
Under
in
at the
part of the plan the
Administration already has pro¬
posed legislation to authorize the
currency
is
not
re¬
Export-Import Bank to guaranty
quired
made
good
against certain risks pertaining to
the
metal
such investments.
which
investments
abr oad
By this means
it is hoped to encourage
American
capital and technical knowledge
to participate in the effort.
It is
important
to
enlist
American
business
know-how
the
because
ingenuity and resourcefulness of
the American businessman is gen¬
to the international flow of
tal,
there
should
be
capi¬
increase
an
in the effectiveness of both.
ter health
and educational
Bet¬
stand¬
ards flan be expected which will
result in better workmen and bet¬
ter
citizens.
These
other
and
is
with
be
to
I
Philip M. McKenna
;
that
speaker
timidly,
who will put the bell
who
which
one
the
decided
the
stop
cat
by
cat
one
council
that
the
a
to
bell
of
way
the
of
devouring
was
wear
"But
the cat?",
on
depredations
was
and
them
require that
(I propose a
golden bell) to give due notice of
the cat's approach.
Of course, one
way to
is
to
about
me
to
it.
Y
correspond
I
visited
Dr.
Monetary
on
accurate
Policy
information.
I
was
stirred by the example of the long
and intelligent effort of the fore¬
most
to
asked
end
reminding him of the
mice
began
Committee
for
our
listened
the
other end of the state.
Spahr of the Economists' National
in
of value.
at
intense interest I had found
People
standard
to
By relating technical assistance
;
systems *
which the
American
invited to speak
was
Pittsburgh before the Sbriners'
Luncheon
Club,
receiving the
fate of
mone-
subject
I
in
The second part of the Point IV
Program is financial in character.
this
is ;
American citizens get back that necessary
of
The
currency
and urges enactment of Reed Bill to
men
human liberty, redeemable money?
lated questions is part of the job
which is cut out for the technical
phase of the program.
Says gold
.
reestablish in U. S. gold convertible
currency.
Wiih
resources.
At erally unsurpassed.
time, we are studying
of improving the wel¬
fare of the economically under¬
developed areas of the globe. For,
higher standards of living in the
underdeveloped countries will by
the very nature of things benefit
not only the countries themselves
the
these
are
knowledge of their nature, loca¬
tion, and potentialities, it can be
determined how best they can be
economically developed—for in¬
stance, whether appropriate trans¬
portation is available, and whether
necessary power can be supplied.
was
converted
was
i
what
rapid revival of production
comparable to our own. The mo¬
rale
of the
civilian population,
which had long suffered under the
shadow of war and occupation,
was at a low ebb.
Outside aid
ble
bate.
record
economic
neighbors here
the
depletion of the soil and other
agricultural resources during the
to
achieve
John W. Snyder
with
up
and across the seas.
occa¬
versy.
.
bound
a
;
Mr. McKenna reveals developments in formation of Gold Standard
League and proposed plan to promote interest in return to gold
standard. Says U. S. has sufficient gold reserve to
permit convertibility of currency and cites action of Swiss people of returning
to
inquiring
>
-
bring the cat to its
let
it
senses
devour. most tof
the
monetary economists of the
country in keeping alive the torch
during 15 discouraging
of freedom
dishonest
of
years
troduced
into
to
us
return
the
to
I
money.
learned of the bill which
was
in¬
80th
Congress
sound, reasonable
money.
Having
to
write
interest-
compelling
advertisements
for
company
I realized that I
could tell more people quickly if
I mentioned the gold standard in
our
our
re¬
regular trade paper advertis¬
mice, until it commences to starve
ing. We got out a series of seven
helpful because of their extinguishment.
nomic life of the underdeveloped
"ads"
entitled
for
example,
to capital in producing goods, and But that method is
so
unneces¬
areas improves,
these areas will
"Soundness Is Essential in Metal
so
encourage the investment of sarily painful to the citizens!
It
supply the world with needed
Cutting Tools as in Money Tools"
new capital.
Investments in ma¬ amounts to going through a po¬
products and will offer an ex¬
and "Cheap Tools Shackle Indus¬
chinery
and
hew
enterprises
per¬ litical revolution such as we have
panded market for our products
try and Trade."
My associates
mit the perfecting of skills that seen in Russia
as well as for those of other coun¬
and in England.
naturally had a right to question
have
been
acquired.
Additional
tries.
'/'
As a rather adventurous
whether the
mouse,
company
benefited
production means an increase in I
decided
Point IV Program
that, ^having a few by such advertising.
The results
national incomes, permits greater
crumbs
of
cheese
stuck away in were
Our program for improving the
most
convincing.
Within
local savings,* and
thereby aids
the hills of' Western Pennsylvania, three months
lot of the underdeveloped coun¬
they were saying,
general advancement toward bet¬
I'd
see
what
I
could do in the "At the rate sales are improving
tries was initiated by President ter
living.
V;"' ; YYYy";
way of "belling the cat" while we since
Truman in his inaugural address.
you have begun to neglect
The cooperation of private en¬
still had a limited independence. your business for this matter of
It has become known everywhere
terprise on both the technical and We started the activities which
as Point IV. It is intended to help
public interest we suggest you ne¬
financial sides of the Point IV
are
now
"The
Gold
Standard glect it some more and harder:"
underdeveloped areas help them¬
Program is essential. Foreign in¬
selves. Cooperation is the pro¬
League" a little more than a year I had discovered a force existing
but all
free
nations.
As the
eco¬
sults
of
technical
aid
are
.
gram's cardinal principle.* The
spirit of our own contribution in
this
field
legislation
is
evidenced
already
by the
before Con¬
gress.
vestment
for
desirable
should be undertaken
purposes
through pri¬
vate
flhhrinflls so far as possible.
We all know, that there are cer¬
tain well-defined obstacles which
have stood in the way of
of
American
ago
in Pennsylvania.
this year,
eight states
selves
League.
In June of
with State Chairmen in
as
we
The
announced
Gold
in
our¬
Standard
We had the immense
re¬
American
the
needed
which
people
expression.
Because
I
was
unable to
reply
in
separate letters to all of the
correspondence I was receiving on
the in¬ serve of facts and
arguments the
subject I got out on "ditto"
capital
carefully collected and advanced
abroad. We also know that pri¬
paper bulletins covering different
prices. These have been the
to be benefited will take many
by the Economists' National Com¬
hallmarks of the American free
vate
phases of the matter about which
capital will flow abroad mittee on
forms. Thus it is anticipated that
Monetary Policy since
enterprise system. Today, condi¬
more
they inquired.
Financial newSfreely and produce better their
formation
in
November, paners such as "The Commercial
tions of plenty are returning. And they will be willing to contribute results where it is
encouraged
to the cost of the assistance pro¬
1933, to warn and advise against & Financial Chronicle" and
in other respects, also, the busi¬
finally
locally.
the actions
taken
in
1933
and
gram, that they will provide their
ness
environment
is
favorable.
the "Wall Street Journal" began
The underdeveloped areas must
own technical experts in the fields
1934 which took us off the gold
Business investment in. plant and
to print my articles or excerpts
accept the major responsibility for
in -which they excel) and in gen¬
standard for use domestically by
from them. I saw the editor pf an
equipment, which was higher in
clearing away obstructions which
eral.that they will use their own
American
citizens.
the first quarter of 1949 than a
exist to a broad and beneficial
American Federation of Labor
resources to the fullest advantage.
It was only in August, 1948, that
year earlier, continues at a high
flow of private capital.
newspaper,
the
"Trade
Union
This re¬
Supplying
technical
assistance
I
resolved
level.
to
see
if
Business credit is amply
any number Courier," who,
recognizing that
is the first. of the /two parts in quires that foreign governments
of my fellow citizens in the repre¬ the
available on favorable terms. Pri¬
wage
earner
has much at
which the Point IV plan is di¬ must • recognize that the. right to
vate debt is low, compared with
do business in their countries on sentative town of 10,900 popula¬ stake in sound money, published
vided. It is hoped, through this
the
volume
of
business
being
reasonable terms is considered of tion, Latrobe, Pa., felt the .same a series of three articles by me,
form of aid, to lay the foundation
done. <Y
need as I did for a return to the
pointing out that labor needs the
for improving health of the peo¬ paramount importance by our po¬
tential investors.
It also requires gold coin standard of money for gold coin standard of money. Six
ples
of
many
areas;
to
provide
the
Indications Toward Sustained ;
by American
citizens.
I hundred newspapers published my
that foreign countries recognize use
basis for training in many types
1
Prosperity
the right of persons making for¬ presented my thoughts irf* a talk
article, "The Investor and Job
of agricultural and industrial pro¬
to the local Rotary Club.
Taken all in all, the major in¬
It was Maker Dependent on the Gold
duction: and generally to obtain eign investments to convert their
dicators
of
economic
Much to my sur¬ Coin
income
from
such
investments an experiment.
Standard
of
Money."
I
activity more effective results
and
*
^Tlie cooperation which we ex¬
pect < to
come
from the countries
vestment
,
■
point toward sustained prosperity
our country.
for
But
the
we can
time has
confine
passed
when
economic
our
con¬
siderations to this country. Today,
most Americans realize how close¬
ly
our
*An
Snyder
prosperity
address
before
ciation,
Grand
Sept. 4, 1949.
by
the
union of the 32nd
at
home
is
Secretary
National
Re¬
Division Asso¬
Rapids,
Mich.,
from
private and
nublic
both
undertakings.
The accomplishment of these ob¬
into
dollars
appropriate
and
to.. transfer
share
of
the
an
dollar
prise and pleasure the men there
wrote
were
pointing
strong for the idea. Members
stayed an hour after the meeting
jectives is of, the highest impor¬ proceeds to their own country.
to talk with me about it.
The
Finally, although the right to na¬
tance.
It
is* our
earnest
hope
local and nearby papers printed
tionalize
property
within
any
through them to further the de¬
my
talk in full on their front
velopment of countries desiring country's border is inherent in
sovereignty, the country resorting pages. " I was then asked to pre¬
our aid, and to assist in the ful¬
to the exercise of that right should
sent
fillment of their aspirations.
my
thoughts to an even
The
possibilities for develop¬ recognize an equally strong obli¬ larger number of citizens.
To degation
to
make
satisfactory com¬
ment in these areas
capture the
pensation.
imagination of us all. Every coun¬
*An address by Mr. McKenna
try has some untaooed resources.
We, on our part, can contribute at the International Gold Coin
Much of the potential wealth and
natural resources of-the under-
to
the
removal
(Continued
of these
on
page
obstacles
39)
Conference, New York City, Sept.
18, 1949.
Y,Y
Y'YY.:
400 doctors
out
the
in
our
county,
connection be¬
tween socialized medicine and ir¬
redeemable paper money.
Formation of Gold Standard
League
\Y-:'
From all of these sources which
I
have
mentioned
and
many
which I have not, it became evi¬
dent
that
some
more
formal
organization of this need for
ex¬
pression of the will of the Amer-
(Continued on page 34)
Volume
Number 4838
170
From
Washington
,
In
general
a
it lists
summary,
recommendations for fair and equitable
as
settlement of dispute between
and steel workers:; (1) wages remain around present level since steel workers wages in
other income receiving groups is not out of line; (2) there is an economic justification for
steel industry
Ahead
of\ the News
relation to
steel employees; and (3) collective bargaining in steel
United States Steel Corporation but be conducted on
granting social insurance and pensions to the
.industry should not be limited to pattern set up by
By CARLISLE BARGERON
.individual company basis.
Shortly after our invasion of Italy in the last war, then Secretary
of the Navy Frank Knox made a flying visit over there. Upon his
return he spoke at a luncheon meeting of several Washington corre¬
spondents. In the question period that followed he was asked about
the effectiveness of the bombing by our air forces.
The Secretary replied that he had been quite
; :
\
y
surprised to find that when buildings were
bombed the debris fell in upon the machinery and
protected it.
He was rather disappointed over
the bombing results. Several of the correspondents pounced upon him, their attitude being that ;
he was taking a sly dig at the Air Force.
He j
hadn't
volunteered the information; had only-.*answered a question. But this was at the height
of the agitation that the Navy had become obso¬
lete and that the Air Force had become the main
of
arm
I
defense.
A few days ago I saw
tions
photograph of
a
was
the
Workers, CIO, contains in its finals
:
portion, the Board's "Findings and | ticular
industry > or particular
Members of plant. .The Board seeks to form
the Board were Dr. Carroll R. its best judgment based upon two
Daugherty, of Northwestern Uni¬
versity, Chairman; David L. Cole,
of Paterson, N. J., lawyer, and for¬
mer
Judge Samuel I. Rosenman,
ipajor inquiries:
of New York.
ings
|
other
in the rotagravure sec-
vast recreation building
a
jin Germany which, it
was explained, Hitler had !
built, but work had been halted wheni
an
air, raid damaged it.
I wondered why the*
Carlisle Bargeron
Germans would be engaged in this sort of work™when our planes were supposed to be leveling their' whole country.
I shall always remember a newspaper item I read a few days
after the atomic bombs were dropped on Nagasaki and Hiroshima.
A couple of flyers who had flown over the latter city were reporting
on the desolation caused.
The street cars and people riding, bicycles
seemed to be the only activity, they said.
,
Street cars running and people riding bicycles in a completely
destroyed city! I've wondered since why the Air Force and bomb
propagandists let that story get throug^.
ordered
of leading up to one of the most
toc|ay. ; We , are spending: some
$15 billion annually for defense. We are doing this. against that
powerful monster that threatens peace-loving peoples everywhere,
and certainly we are a peace-loving people, having been engaged:in
only three wars and several military expeditions in my life time.
These observations
5.
serious
situations
it
But
would
are by way
the country
in
Army, is completely shot to pieces.
We had the spectacle
a
few weeks ago of Secretary of Defense
Louis J"ohjison taking the high officers of the three branches off to
White Sulphur Springs, W. Va., for a few days of golf in order that
they might become more agreeable to each other. They smiled for
the cameras, but if there is any more' cordiality; among them or any
more cooperation since this unusual visit, it is not apparent here in
Washington. The bitterness has increased instead.
This situation has come about because of the high-handedness of
of ruling the roost, they worked out, in con¬
junction with the Army, the "unification" plan. We haven't got
unification yet, only more top eschelons of brass. What the plan did
do was to unify the Air Force into a separate service supposedly op/
equal terms with the Army and the Navy, but really in the corr*£
manding or boss position. The Army has long since come to realize
that the Air Force pulled the wool over its eyes and to regret the
marriage by which the two services lobbied for "unification."
I am quite sure that I am no military strategist, my rank in
World War I having been that of corporal and my command limited
the Air Force.
to
By
way
seven men.
But I
am
a
tremendous lot of bunk in the
fair
since
shortly after-World War I, the Air Force has been
brought out that
was
not
a
circumstance
five percenters by a Senate committee, it
General Vaughan fixed
friends for rides to and
The
A.
up
from and within Europe-hr
a)
couple- of his
That is
planes.
to, the vast junketing service which the Air Force
duck hunting a thousand
miles away; the young pilots tell delightfully how they have a couple
of cocktails at. their officers' club and fly 300 miles to a country club
dance.
Members of Congress and; editors think nothing of
service to fly around the world.
with Congress by
using the
The Navy used to be-able to lobby
giving trips to members this way, but this mode
of junketing has no
"man
of my
did; fotf, his friends! Why, a youngish
acquaintance who calls himself a Public Relations Gori^
suliant,and^strangely • enough
France a few weeks
ai
Republican, wangled^, a flight to
after7 V-E Day. Over there' he consorted with a
petite mademoiselle. He was .returning to Washington about
masJpay so he thought it would be
.
j
•
up as a
Christ-
nice to bring her over, dress her
little doll and give her to his friend as a Christmas present.
,.j5o help me, he not only had no trouble in flying the girl over to this
country, but after-the three had had enough fun, he wangled a flight
for her back to
France.
:
of modern knights errant, with their
living, extra pay allowances and rakish caps and lax discipline.
should come in for some realistic and objective study before we
4
(A) Steelworkers in Relation U*
in Other Industries:
|
1 (1)
The steelworkers' present
hourly earnings of about
average
$1.65
favorably with aU
compare
earnings
hourly
average
have risen more
since
workers.
manufacturing
other
Their
in cents per hour
1939 and 1941 than
those of
workers
manufacturing
a
as
...
•
■
union.
<•
„
<
,
.
j
r
•'
The main issues are:
increase
rate
lf<
r
Wage-Rate Increases—The
requests a general wage-
(1)
union
of
;
12 V2
cents
per
This the companies refuse.
hour.
(2) Social Insurance Program—
defined
is
This
insurance
as
against death or total and per¬
manent
disability, benefit - pay¬
ments
during
temporary
dis¬
ability caused by sickness or. ac¬
cident occurring off the job, and
hospital and surgical benefits. The
union's
the
of
estimate
cost
of
providing the benefits which it
requests is 6.27. cents per hour on
the' basis of a 2,000-hour work
It requests' that the~ com¬
year.
industry?
*
'
"
•The--.subsidiary criterion listed
above as (2) includes a consid¬
are
rate
it.
to
relations
Pensions—The union re¬
program paid for entire¬
ly by the companies providing a
uniform
pension
of
$125
per
(3)
a
for
month
retiring
worker
each
also
pension of $150 per month
for perma¬
a
worker retired
a
disability after ten years of
nent
is 11.23 cents per hour per worker
on
a basis of a
2,000-hour work
to
a
in
terms
employers' "ability to industries.
\
"
increased wage rates; and
■/. 1 B.
Steelworkers in Relation to
among the! important factors- to
Other
Groups Whose Economic
be considered in such determina¬
Welfare Depends on the Steel In-*
tion are:
dustry—Of such groups those to
(A) The increased productivity be
compared with the steelwork-!
(output per man-hour)
of the ers are the corporations them¬
industry;
selves, the stockholders, and con¬
(B) The level of profits earned sumers of steel.
.7
~ i
over a period of years and cur¬
.This
involves
the
v;subject
.of
rently;
f
(C) The percentage of plant ability to pay increased wage
capacity that must be . utilized in rates as related to profits, dividepcls, and prices. Taking up the
order-to "break even"; :
factors to be considered, as listed
(D) The prpbable movement of
raw
materials, jprices,., and $tfter« above, and other relevant consid¬
erations, the Board finds:
y
costs.
.
(1) Productivity:
'(B) The Second,
reject on the ground that the sub¬
ject of pensions is not^now bargainable
under
the
reopening
in (the
the
do
not
industry.
.
(A)
The argument advanced by the
companies that, on a reopening
dispute such as this, the only cri¬
(B) It is the belief of the Board
terion to be considered is the
that,
as
hereinafter explained,
change that has occurred since
wage rates in a particular indus-1
the contract was originally made
try should not be tied directly tois not tenable here.
The parties
productivity in that industry but
themselves did not ascribe this
rather should be related to the
meaning to the reopening provi•
sion,
as
facts
and
evidenced
was
by
they
arguments
general industrial rise in productivity, and that any excesses of
the
pre¬
merits of
though it was the
sented; they treated the
the
dispute as
productivity in any one industry
(Continued on page 14)
Commission Orders?
We've
The
of Wage
Issue
Rate
guments of both sides, not only
as they relate to the steel indus¬
have
more
direct bearing on wage
than
on
the
they
two
other
insurance
social
and
y
1. '
rates
other issues.
for
Conclusions
on
by
at
of
mathematical for¬
which
vv-
V
•'
.yy-yy;-/ yyyyyyyy yy-.:-
1
you've got similar orders on
file, perhaps a cross-
.
both.
% We'll
be
happy
to
hear from
glad to help if we can. Just
•*'
V
office.
.
•
.
'
••
.
call
you
or
at any time —
write our nearest
7
v.
~
•.
Trading Department
,
'
;
Labor
to settle the
whether wage rates
labor costs should be increased
any particular time in a par-
mulae
4
.
check could benefit us
-
Costs
There are no
|'/ ';V\V • '-V'!
pensions,
Raising Wage Rates or
<
If
also in. part as the
justification for the rec¬
Criteria
.
vestors.
issues of
ommendations made hereafter on
such
w/.y'Y?.
a
serve
economic
V',v£vV:■'•
.
to the
While these
considerations
economic
some,
of little known,
closely held, or moderately capitalized corporations
are
diversified enough to form a geographic
cross-section.; of companies and customers . . . and
represent
nearly every industry of interest to in¬
heading the Board
has considered the economic ar¬
whole.
got
Together, they cover a wide variety
this
economy as a
the
both
\
Analysis
of course. In fact, we have
number of unfilled orders on
buy and sell sides of the unlisted market.
always
surprisingly' .large
a
Increases;, Economic
Under
*
It has not succeeded in
proving its contention that pro¬
ductivity has risen by 49.5% since
1939.
*
,
•
'•
I
•
•'
v
whole?
a
the union has
Board that steel¬
share equitably
increased productivity of
workers
clauses.
B.
.
not satisfied the
—What would be the
This demand the companies
year.
wage-
of their
the workers of other
inequity
pay"
as
quests
from
suffering
not
eration of
Major-Inquiry
probable ef¬
fects of granting the union's de¬
mands on the general level of
and some have indicated a will¬
ingness to bargain with respect economic activity in the country
pay the full cost, >As to
the request for this program, some
of the companies reject it entirely
panies
or
broken down.
j
,
corporations
stockholders,
.
in the basic steel industry and the
It
armed forces have
'
rate.
.
question
our
■.
.
wage
themselves,
their whole, and more than those of
and the consumers the durable-goods workers; in
The issues arise out of union of steel? '
' very few industries, manufacture
demands
based
on
reopening
(3) Are they suffering any in¬ ing or non-manufacturing,: have,
clauses executed in 1948, amend¬ equity as compared with all other hourly
earnings risen more in.
ing the 1947 collective-bargaining income-receiving groups in the cents. ■
;
contracts between the companies
general economy outside the steel
(2) On balance the steelworkers
1
Parties
easy
find
.
Workers
whose economic wel¬
fare-depends substantially upon
the
steel industry,
namely, the
-
The Air Force is made up
groups
try but also as they relate
chance with what the Air Force offers.
Talk about what Vaughan
-
*
as
other groups
the
Between
Issues
-
.
new
Findings and Conclusions Relative to the Above Criteria
2.
v.
of
equitable, settlement
the dispute.
.
contract.
the
in earn¬
(2). Are they suffering any in¬
equity as compared with certain
a
and
is. High and low brass use the planes to go
t
for
service, to be reduced to $125 per
month at age 65. The union's es¬
timate of the cost of this program
In the investigation of
,
recommendations
Board's
downright dangerous.
Ever
present
compared with those of
in. the economy?
This involves the following three
and Recommendations" follows:
The following is a summary of subsidiary considerations: .
(1) Are the steelworkers in an
the Board's findings on the chief
matters in issue between the par¬ inequitable position as compared
with other industrial workers?
ties
and ; a
statement
of
the
for
scrambling for recognition as a complete service within itself, wholly
.independent of the other services. As I have written before, it has
had the powerful aviation industry behind it. With billions to spend
at its command now, it is running hog wild.
/.
r.
...
,
the argument can¬
not apply to items like social in¬
surance
and
pensions
where
neither was originally included in
Furthermore,
Inquiry—
position of the
steelworkers inequitable
glorification of the Air Force and to the extent that the other serv¬
ices are being subordinated and their morale shot, it has become
,
the
Is
voluntarily at age 65 or later, and
convinced that there is
1
.V
'
negotiation of a new wage
The First Major
(A)
'
..
...
v
The text of the Board's "Findings
be
just too bad if the generally predicted war
should come, assuming that Russia is as powerful as she is touted
to be, which she isn't, because out; armed forces are on the verge of
! demoralization. The morale of the Navy and to a lesser extent, the
•
Finding Board, which
for the settlement of
and the United Steel
submitted on Sept. 10 to the President by the Fact
appointed by him to hold hearings and submit recommendations
controversy between the leading members of the steel industry
Recommendations."
1
_
;
The report
Merrill Lynch, Pierce,
70 PINE STREET,
*
Fenner & Beanb
NEW YORK 5, N. Y.
Offices in 96 Cities
,
s
THE
(1040)
COMMERCIAL
&
CHRONICLE
FINANCIAL
Thursday, September 15, 1949
W-
serve
System
and
the
Federal
Deposit Insurance Corp. <
Truman's Unemployment Policy
The
30,
Mr. Babson, calling President Truman's policy of rushing aid to
'
of unemployment a
areas
"fire department technique," says aim is
theory, and may even work in practice, but contends
in
correct
^extinguishing depressions at start "with
The
1 i e
But
the tides
in
come
and
About
The
Presi-
dent's
friends
would
use
a
to
stop
commer¬
extinguishing
include
pression
the
at
investment
advisory
corporate and personal trust
functions.
They also act as fiscal
agents for foreign governments.
fires
prevent
only
Also
illustration
of
what
the
they
Truman
rushes to it and puts it out
If you divide the annual cost of
Fire Department by the
any
jber of fires,
num-
at first thought the
All the above means that there
is
hurry to buy stocks or bonds.
no
The Truman
timately
experiment must ul¬
Department
seems
inefficient. the stock market today is not be¬
Every city spends $1,000 to put out cause of the dividends nor the
a $500 fire.
Yet, without the Fire security, but because investors
Department, that little fire would have no money left to invest after
t grow and
perhaps burn up the entire city. Hence, I believe that the
paying living
President
Fire Chief is the most useful and
important citizen of every city.
They
all
should
be
paid
more
money.
Unemployment to Fires
Truman
and
a
Rhode
wants
Island—the
to rush
immediately
aid
to
President
that section
and
stop the spread
unemployment to other
that
of
^'Sections. To
President
When
a
is
This
elsewhere
theory.
shoe
and
other
causes
Then unemployment increases all
the country like an epidemic
flu.
On
the
other
hand,
^
enough
aid
are
1
Schroder Moves to
government
orders
rushed to these sick
if
and
places,
ihan
theory.
work
Whether
no
not
or
it
knows; but it
gieems worthy of trial.
one
Fires Run in Cycles
There is one feature about the
fire illustration
corcerning which
my Truman friends don't like to
/
talk. This is the fact that with all
the wonderful and efficient Fire
Departments
total fire
riod—go
of
our
country, the
losses—over
up
and
down
to
Newton's Law of
Reaction. The best F
the
world
with
During
are
pe¬
according
Action
and
Chiefs in
re
control
the
element involved in
man
tion
can't
long
a
hu¬
connec¬
fires.
certain
people
years
are
an
extra large number of fires. These
so
increase
that
the
insurance
companies—through the National
Board
its
of
Fire
efficient
Underwriters
leader
W.
E.
lieu—get busy and start
paign
to
educate
people
and
Mallaa
cam¬
to
be
careful. This, combined with other
factors, bears fruit
crease for
quarters
new
at
there for
Sept.
19,
announced
A
lease
21-year
three floors
the
of
the
on
first
building Was
signed in April, 1948, and altera¬
tions have been under way since
that time
and
fires de¬
series
of
years.
But
granite
windows
use
the
premises.
of the large
the first two floors.
on
floor has been de¬
The second
signed to provide quarters for the
officers.
senior
Access
these
to
offices is given by a private ele¬
vator.
Another officers' platform
has
also been included on this
The board room, a private
cated
room and conference rooms
been
built in the central
with
concerned
investment
the third
on
are
floor which
lo¬
is
by the main building ele¬
&
architects for
the
Schroder
banks,
drew
the
plans for alterations on the prem¬
which
James
Poor,
King
Clarkson
carried
were
Sons.
&
supervised
Construction
Petroff
by
&
Rheinstein
in the
Co.
out
remodel¬
Kalak Elects Directors
Inc.,
under
nounces
a
new
new
directors: Wilbur A. Killeen,
election
of the
1923.
tors,
moved
46
located
Street,
to
Pine
27
at
in
South
25
f f ice
o
were
s
1925
and
to
William in 1929.
Mr.
new
Beal
remarked
quarters
were
that
the
selected
not
only to provide more space for
expansion, but also to offer clients
the convenience of
banking floor.
cupied
The
the
by
and
had
present
space was oc¬
Chase
Bank of New York
1928
ground level
a
not
from
1916
undergone
alteration
time.
National
Total
until
floor
to
any
the
space
rented
by the Schroder group
approximates 50,000 square feet
excluding
vault
facilities
in
At
king
Corp.
instance
was
of
J.
of
a
member of
the
Federal
Re¬
stocks
is
list
a
of
EVENTS
pre¬
for
In
capital
gain
and/or yield, an analysis of the
speculative possibilities in Mis¬
souri Pacific Bonds, and a review
turers
a
corporation, manufac¬
party at Sleepy
Over
Stock
the
-
Counter
-
Index
—
and
The
Crucible
was
soft drinks;
formerly with
Steel Co.
of Amer¬
ica; Mr. Vogelbach has been with
Kalak since
1920; and Mr. Morgan
is senior partner of Peter Morgan
& Co., New York investment firm.
Hollow
Country
Booklet
recording
10-year performance of 35 indus¬
trial stocks—National Quotation
Bureau, Inc., 46 Front Street, New
York 4, N. Y.
Point
Field
Club.
Industrial
Figure
Trend
Sept. 16, 1949 (New York City)
Charles
Hayden Memorial Golf
Tournament
Baltusrol
at
Sept. 16,1949 (Philadelphia, Pa.)
Investment Traders Association
Chart
Service—Any 50 New York Stock
of
Exchange issues of subscribers se¬
lection
posted
to
date
twice
monthly—also Special Opportuni¬
ties—a group of up-to-date charts
with technical analyses and Owen
K. Taylor's Buy and Sell Recom¬
and dinner at Palumbo's.
mendations
—
both
services
Philadelphia
annual
meeting
Sept. 17, 1949 (New York City)
Cashiers
Association
of
Wall
Street annual outing at Reinharts'
Picnic Grounds, Staten Island.
to¬
Sept. 20,► 1949 (New York, N. Y.)
gether $50 quarterly; "Special Op¬
portunities" alone, $50 semi-an¬
nually.
i
:
New York
Security Dealers As¬
quarterly business din¬
ner
meeting at 5 p.m. at the
Downtown Athletic Club.
sociation
.
Special offer F-l—$5 for sam¬
ples any three trend charts posted
up-to-date of mailing and sample
of current
"Special Opportunity'"
ready
move—mention
to
Golf
Club, Springfield, N. J.
Sept. 21, 1949 (New York, N. Y.)
Association of Customers' Brok¬
offer
election, 4 p.m., at Delmon's
Restaurant, 16 Liberty Street.
ers
Taylor, 40 Monroe
Street, New York 2, N.Y.
Sept. 23, 1949 (Chicago, III.)
Municipal Bond Club of Chicago
Field Day at Knollwood
Bangor & Aroostook Railroad—
Circular
465
—
Maine
Congress
Securities
Annual
Co.,
Country Club, Lake Forest, HI.
Street, Portland 2,
Maine.
Sept. 30, 1949
Bond
New booklet
and
reviewing operations
1949 (Colorado Springs,
Colo.)
National Security Traders As¬
sociation
Circular—Herzfeld
&
Stern, 30
Street, New York 4, N. Y.
Oct.
Co.,
1
Corp.—Report—Cohu
Street, New York
11-13,
1949
meeting
Governors
Wall
Stock
5, N. Y.
at
(Atlantic
City,
of
of
the
the
Board
of
Association
of
Exchange Firms at Haddon
Hall.
Central Vermont Public Service
Ill
Convention
N. J.)
Fall
h
Annual
The Broadmoor Hotel.
Canadian Pacific Railway Co.—
Broad
(Pittsburgh, Pa.)
of
Oct. 5-9,
stock market record
common
Club
Pittsburgh Fall
Outing at Chartiers Country Club.
Oct. 20, 1949 (St. Louis, Mo.)
Annual meeting and election of
officers of Security Traders Club
Broadway, New York 6, N. Y.
of St. Louis.
Dec. 4-9, 1949 (Hollywood, Fla.)
Investment Bankers Association
Annual Convention at the Holly-
of carbonated
Mr. Diefendorf
Investment
Sept. 16, 1949 (Cleveland, Ohio)
Bond
Club
of
Cleveland fall
of Serve!, Inc.
Street, Chicago 4, 111.
Wood Beach HoteL
Consumers Power Co.—Circular
—Fahnestock & Co., 65 Broadway,
New York 6, N. Y.
Also
available
are
circulars
Dec. 9, 1949 (New York City).
New York
on
sociation
General Outdoor Advertising Co.,
Halliburton Oil Well Cementing
'
Security Dealers As¬
24th
Annual
Dinner
at
the Hotel Pierre Grand Ballroom.
Co., Irving Trust Co.
Rov F. Barnum
Opens
opened offices at 904 Arnold
Avenue.
Mr. Barnum was for¬
Weber-Millican Co.
Joins Bache Staff
Copeland Refrigeration Corp.—
(Special
Circular—Baker, Simonds & Co.,
Buhl Building, Detroit
26, Mich.
Welch
Bache
Diced
Cream
Co.
of America—
He
T"e
Financial
SAN DIEGO.
E.
Rogers is
Chronicle)
CALIF.—W PR am
with
Wesley Hall &
Co., First National Building.
is
&
was
The
Financial
BEACH,
now
Co.,
Chronicle)
associated
235
Lincoln
formerly
-
FLA. —Lew
with
with
Road.
Merrill
Circular—Walston,
Hoffman
&
Lynch, Pierce, Fenner & Beane.
Goodwin, 265 Montgomery Street, i
■
San Francisco 4,
(Snecial
to
MIAMI
Calif.
Sellers to Admit Partner
With Weslev Hall Co.
the
establishment in 1929
the Schroder Trust Co., which
available
Morgan
Henry Schroder & Co., London,
which has been active in business
since 1804.
Expansion of business
to
Also
ferred
Company—Memoran¬
COMING
Street, New York 5, N. Y.
Colombia Bolivia—New study—
Zippin & Co., 208 South La Salle
merly with J. Arthur Warner &
Co., Amott.
Baker &
Co.
and
n
preciation and for investment—
Eastman, Dillon & Co., 15 Broad
Mr. Killeen for the past 22 years
has been Vice-President of John
York State
the
Southern
dum—Goodbody & Co., 115 Broad¬
way, New York 6, N. Y.
lists
Co.—Analysis—Ira Haupt & Co.,
has
Ba
Special
—
Killeen, Pres¬
ident; F. K.
Diefendorf, VicePresident; Robert Vogelbach,
Vice-President, and Peter J. Mor¬
gan, Secretary and Treasurer.
Although an American ihstitution,
incorporated
under
New
at
of
Wilbur A.
UTICA, N. Y.—Roy F. Barnum
Schroder
Bank
stocks favored for ap¬
common
Celanese
meeting of the new direc¬
the following officers were
a
elected:
basement.
founded
Stocks
Common
of
P. Burke.
the
banking laws, J. Henry
Canadian
Commerce, Toronto, Ont., Canada.
following
ter, Robert Vogelbach and Adrian
on
Monthly commercial
—
The
—
change in management
the
circular
a
Square, Boston 9, Mass.
Canada
letter
York, —Blyth & Co., Inc., 14 Wall Street,
ownership, an¬ New York 5, N. Y.
and
is
Oregon Portland Cement—Late
data—Lerner & Co., 10 Post Office
Kalak Water Co. of New
Heavy-
available
the Oliver Corp.
—
Bank of America N. T. & S. A.—
The present move is the third
for the Schroder Banking Corp
since it opened in New York in
First
Shares
Analysis of
upturn looked for in these
shares—E.
F. Hutton & Co., 61
Broadway, New York 6, N. Y.
ing of the exterior.
Peter J. Morgan, F. Dwight Fos¬
William
Also
Building
F-l—Owen K.
Walker
ises
Fenner & Beane,
New York 5, N. Y.
the
in modern design
veneer
which allows full
week-end.
people get careless again and fires is
entrance
an
ing, which was of marble in Ital¬
ian
style, has been completely
removed and replaced by a gray
both the interior and
on
exterior of
path, 52 Wall Street, New York 5,
Pierce,
70 Pine Street,
Depart¬
The original facade of the build¬
Departments
week-end and will open
business next Monday,
led
a
ment which is close to
section of the floor.
substantial
careless and then there
Information
Credit
have
the unemployed would go back to
equipment and files are now being
"^vork and would again buy goods. transferred
from
46
William
This helps every other part of the Street and
moving operations will
country. At least this is the Tru- be completed over the coming
will
allied
the
securities and
was
The
banking floor is
The J. Henry Schroder Banking
Corp. and Schroder Trust Co. will
it
readily
consultation.
New Quarters
plants
employees.
off
lay
over
of
j
dining
by Gerald F.
cut Beal, President of the two institu¬
tions.
idle,
for
be
by
other departments
with operations, including
certain extent the Broadway, New York City, this
in
an
occupied
vators.
textile
to
accessible
level.
to
those
as
of credit
banking floor is
west end of the
57
right
the
any¬
or
thing else.
move
well
letter
departments who will
served
workers of New England are
their
purchasing power is
'down.
help to steady the stock mar¬
ket; but I don't see how it could
cause
a
bull market in stocks,
may
is based
program
similar theory. If unem¬
ployment starts in a certain state
—as it now has in Massachusetts
upon
experiment
commodities, real estate
■Apply
The
expenses and taxes.
Truman's
*
the
on
as
or
in higher taxes. from Trinity Place.
result
This leaves less money for people
to invest. The real
difficulty with
Lynch,
Libby, McNeil & Libby—Circu¬
In
renewed.
platform for those imme¬
diately in charge of the operating
any Fire Department
extinguish them!
can
analyzing
lar—Auchincloss, Parker & Red-
officers'
experiment will fail
a change
They can set fires
unless labor leaders have
fire starts and
a
with collection
business.
Brochure
—
industry with individual re¬
sumes
of
17
companies—Merrill
a
withdrawals,
or
j bucket of water," will not change
from
Chief waits until
-'then
of
as
an
Airlines
the
long counter to serve
clients wishing to make deposits
a
human nature and prevent a readjustment sometime.
Certainly,
been
banking
cashiers
architecture,
"cages" have been eliminated in
De-
starting, but
spreading. The Fire
from
have
firms mentioned will be pleased
the following literature'.
interested parties
send
to
and
favor
de-
"with
start
It is understood that the
keeping with the present trend in
ex-
a
Recommendations and Literature
services.
service, safe custody of securities
rations
Truman
periment of
business
a
this
businesses. Likewise, this
new
+rviug to*
conflagra- of attitude.
tion. A Fire Department does not faster than
5
Tneir
Fire
'***
*
in offer¬
partment
city
do
that
granted
experiment will work, and I sure-
as naly hope it will, Fire Departments
intended.\ do not build new houses nor start
ture
i;
complement each other
ing
complete
banking
ing fixtures, carpeting and deco¬
Stocks?
out
go
Rog er W. Babson
What
in let¬
v e
ting
'
June
$123,000,000,
over
facilities
Dealer-Broker Investment
com¬
of
as
plan is not as radical as Mr. Roosevelt's experiments, most of
which failed. It, however, seems to most Republicans like trying to
sweep
back
The
three
floors
under
lease
the
ocean
again increase.
Statistics show have been completely remodeled
from a sandy that fires have their cycle the to suit the needs of the new occu¬
beach with a same as employment, commodity
pants.
Air-conditioning has been
broom." Con¬ prices and general business.
installed throughout and all light¬
servatives be-
;
were
mittances,
The following is an impartial report as to what the Truman Ad¬
ministration is attempting to do to prevent further unemployment.
>
1949,
whose
resources
financing, deal¬
ings in foreign exchange and re¬
prevent ultimately needed readjustments.
■
total
cial and industrial
bucket of water" will not
a
institutions,
bined
By ROGER W. BABSON
Keyes Fibre Company—A study
of the industrial growth
of
ONEONTA,
N.
Y.—Edward
L.
Sellers, 1 Taft Avenue, will admit
Co., i J. Paul Sellers to partnership in
52 Wall Street, New York 5, N. Y.
his securities business.
plate—L.
H.
Rothchild
a
pie-
&
■
Volume: 170
Number 4833
THE
-
COMMERCIAL
&
CHRONICLE
FINANCIAL
(1041)
9
Gold Coin Standard—Mechanism
Dollar-Sterling Conference
World Trade and Investment Agreement to Ease Dollar Shortage
For
By LELAND REX ROBINSON*
Representatives of U. S., Great Britain and Canada issue joint communique, in which it is agreed ECA
Committee
National
Vice-President, Economists'
funds allotted to Britain will be used to increase that
country's purchases outside U. S. while U. S.
purchases of strategic materials in sterling area. Britain to be permitted to encourage
more imports from nondollar nations and U. S. customs impediments to British goods are to be eased.
No reference made regarding sterling devaluation, but Britain is to seek lower production costs and
Monetary Policy
cn
will increase
Dr, Robinson maintains immediate reestablishment of gold coin
standard
by U. S., when taken in conjunction with other necessary
would be most effective step toward restoration of confi¬
dence, reduction of hoarding, and easing health giving flow of international trade and investment. Lays heavy U. S. export surpluses
other appropriate incentives to increase exports
measures,
>
to universal abandonment of
.
devalue nominal gold
gold standard, and deplores efforts to
of dollar. Outlines advantages of
currency" in international trade and investment.
"hard
A few months
content
after
our
announced the terms of the
government, in 1933, broke faith with
the American people by destroying convertibility of our money
into
gold and then juggling the value of its irredeemable currency, it be¬
came
re-establish
to
necessary
welter
failure to face this issue
dollar
35
per
of
gold,
at
ounce
nei¬
restored
to
ably the real solutions.
people
historic
right
to
hold
American
gold, if
chose,
they
to the
as
a
allowed to pass,
a
should say a gold-debased cur¬
It carried the implication,
the
promise,
that further
devaluation would not be tried for
fiscal
expediency;
confidence
enough
shocked
investors
it
restored
shellpermit cu¬
among
to
mulative deficit financing without
printing-press
therefore an es¬
incomplete and
disingenuous,
approach
to
an
honest and workable gold stand¬
resort
open
It
money.
sential,
an
ard.
nor
have neither
we
workable
a
on
international
the
standard,
become painfully
both the domestic and
has
however,
evident
gold
honest
an
What
fronts.
domestically has
added up
to
abrogating the gold clauses in in¬
numerable contracts among indi¬
viduals
and
between
and governments,
individuals
seizing and im-
Secretary
Anglo-Canadian-
conversations
relating
"sterling area" predicament
payments, and
meetings to follow of the In¬
ternational Fund and Bank. It is
the
evident
that
facing
not
are
we
of
spate
a
com¬
proposals bringing us
the Niagara brink of mon¬
dangerous
nearer
etary and exchange chaos.
'\
"•'f -
:
V; " >-*1" y.
' v.
-sr.i
V
Now,
as
A1 Smith used to put it,
present time, the United
States has a monetary gold stock
of
some
24 and a half billion
At the
(calculated at $35 per ounce). This
is about two-thirds of the world's
monetary gold stocks.
A decade
had only half of the global
supply.
So great has been the
flow of gold to our shores that its
ratio to total bank deposits and
ago we
Pearson, Canadian Minister of Woods Agreements and the Ha¬
Affairs, along with Paul vana Charter for an International
G. Hoffman, ECA Administrator- Trade Organization.
!
The
text of this
communique
It was the broad purpose of the
follows:
»
present
meetings
to
explore,
.
J'.,; i
week
to
States has absorbed
United
;
establishment by
our
gold coin standard
this time, at the present statu¬
ernment
at
tory
$35
of
a
unimplemented rate of
ounce, would prove a most
but
per
effective stem when taken in con¬
other necessary
measures,
toward restoration of
confidence, reduction of hoarding,
and easing the health-giving flow
of international trade and invest¬
junction
with
ment.
Gold Stocks Afford
No Security
Certain it is that our
pyramid¬
insulated by in¬
circulating dol¬
various restrictive de¬
vices. csn no more
afford us secu¬
rity in these times of world crisis
than the snug delution hugged by
Robinson at
the
International Gold Coin
Standard Conference, New York
City, Sept. 8, 1949.
action which
countries have de¬
emergency
the
While
satisfactory
fundamental
the
instance
first
ments
which
are
the
the
was
govern¬
centers
present discussions were
examine these problems.
It
the
to
concern
world, it involves
problems which concern in
of
The
held to
recognized that the task
working out conditions under
which world trade can develop
in increasing free¬
and
sustained effort, not only on the
part of the United States, the
United Kingdom-and Canada, but
also by all other countries desir¬
ing the same objectives.
and
aim
was
is
prevent a serious breakdown
in
the
dollar-sterling relation¬
n
to
work
toward
mate solution which will
an
ulti¬
maintain
This advertisement is under
for sale,
or as a
temporary
are
a
are
recognized
three
not
dif¬
necessity, and
such by all
as
governments.
The ministers
agreement that
lution
to
:
.
in complete
were
no
permanent so¬
the
to hasten the achievement of those
all concerned
objectives.
lar
.f
.
to expand the dol¬
earnings of the sterling area
and to increase the flow of invest¬
IH
These
conversations
have
ment
car¬
ried forward the consultations in¬
itiated in London during
July 8-10.
the
from
character
oi
the difficulties to be faced and
an
derstanding
of
the
increasing realization that a fully
satisfactory solution will necessi¬
tate continuing efforts in many
In the
conversations
sible
course
it has become pos¬
discusk with
to
of these
North
American
continent to the rest of the world,
including the sterling area.
They have resulted in a clear un¬
vi
This
more
would
/
J
>
:&-.£
fundamental attempt
involve
both
separate
ac¬
tions of the three countries oper¬
ating
tion
individually, and joint
ac¬
by the three acting in coop¬
with each other.
eration
In
complete
approaching these possibili¬
ties of individual and joint action
specific problems and
onfl the sterling-dollar problem,
the types of measures which will
there was common agreement that
have to be taken if the three
this action should be based
on
countries are to
achieve their*
the assumption that extraordinary
frankness
common purpose.
aid from the North American
tinent would have to
IV
In the early
stages of the dis¬
attention was given to
the immediate problem confront¬
agreed that the common
are
cause
problem could be
ships which would have led to a found in the emergency steps con¬
templated.
A
more fundamental
crippling limitation of dollar im¬
ports into the sterling area and attempt would have to be made by
cussion,
J
It
to
directions.
of
this situa¬
meet
measures
general
a
matter
a
These
ficulties and sacrifices for every¬
one concerned.
Nevertheless, they
framework,
various specific measures which
the three governments might take
of payments
between the two areas is
of
of
development
balance
area
cided to take to
ing the United Kingdom and the
rest of the sterling area as a re¬
sult
no
of
the
come
con¬
to
an
end
by the middle of 1952. This
would require that the sterling
area
increase
its
dollar
earnings
as to pay its way by 1952.
This
would require in the sterling area
so
(Continued
rapid decline of gold
on page
37)
circumstances to he considered as an offering of these securities
solicitation of an offer to buy any of such securities.
prac¬
T^ot
a
fjew Issue
250,000
Shares
Louisville Gas and Electric
Company
(a Kentucky corporation)
else¬
produced
was
(exclusively of the U. S
R.).
Federal
While
basic
nation's
Reserve
gold
Commons ?Stock
reserves
(Without Par Value)
(in return for "gold certificates"
convertible in theory only) to the
of
eight times or more the
other parts of
the world, central banks in Eu¬
tune
output of gold in
Price
and elsewhere saw their re¬
ratios slipping as the twin
plagues of irredeemability and in¬
rope
serve
$30,375
per
Share
flation visited their consequences
upon
mankind.
Of course it may be argued
a
that
Copies of the Prospectus are
natural redistribu¬
obtainable from the Undersigned.
tion of the world's monetary gold
both
from
existing central
and
from
bank
produc¬
prewar
"triangular"
trade
pattern—whereby tropical
and other under-developed coun¬
tries sent large surpluses to in¬
dustrially advanced nations, and
notably
to
the
United
States,
tion.
new
while the latter
as
well
as
Great Britain,
for
them
gions
by
net
exports
Goldman, Sachs & Co.
•'
Harriman Ripley E^ Co.
V
-V1-'.V'■'
Hemphill, Noyes & Co.
Incorporated
! J. J. B. Hilliard Es? Son
Kidder, Peabody li Co.
(
,
■
•
Hornblower 6s? Weeks
Conti¬
which in part paid
purveying
Blyth & Co., Inc.
Lehman Brothers
The
nental countries sent surpluses to
*An address by Dr.
and
banks turned over to the Treasury
reserves
ing gold stocks,
convertibility of
lars and by
where
this has been
Our Insulated
-
billion
the
gov-
trade
are the two principal world trad¬
ing currencies.
lent, which, by the way, was over
eight times our own. In other
words, American production of
gold in this interval approximated
one and a quarter billion dollars
in value, while about ten and a
S.
The
the
relationships
between
the sterling area and the dollar
area.
The pound and the dollar
tically all of the world's gold pro¬
duction since 1937, or its equiva¬
and the flow of goods,
services, people and capital across
'
examine
this
was
stream in its one-way
half
national frontiers.
within
Representatives of the United
States, the United Kingdom and
Canada have met during the past
the
since
Bretton
External
in circulation has doubled
'twenties. This golden
flow to the
money
Charter,the
B.
steadily
"Let's look at the record!"
at
Note
reserves.
by the three governments
the
pleasant ones; they will
dom will require a strenuous
"
The Record
;
:
basis
taken
of
Nations
these two currency systems.
by
profitable
dollar
and
tion.
these conferences have
plaints, countercharges, scapegoatstalking, and bizarre and often
mutually
on
ready been set forth in the United
Snyder, and Secretary of
State Dean Acheson, and Lester
many
ac¬
equi¬
John W.
impasse due solely to "shortage of
throughout the world.
Nevertheless
preparations for
dollars"
companied
tne
establish
sterling
democratic
bility of currencies, multi-lateralism
and
non-discrimination
in
commerce,
of
a
high levels. These objectives and
general course of action have al¬
'
pounding all monetary gold, and
giving the people inconvertible
paper as their circulating media,
has appeared internationally as a
gold bullion standard so restricted
•in
actual operation
as to
offer
impediments of its own against
; stability of
exchanges, converti¬
Chancellor
here just a "British crisis," or an
been
area.
Exchequer of Great Britain, re¬
spectively; Secretary of Treasury
international
in
and
and
of international trade
librium
financial
might therefore be the
impending
to
was
abeit
That
Our text
their
huge scale
it did at least
pay lip-service to the principle of
a gold-based
currency, or perhaps
not
the
countenance
to
it
from rich and poor,
if
us
nation
a
with
did
condoned, by the United
Supreme Court. Although
rency.
as
now
honesty will only
to increasing pressures
agree-<S>employment
ment, arranged by Ernest Bevin
and Sir Stafford Cripps, Foreign
and
courage
subject
on
back
not
we
was
nor
store of value.
on
upon
give
the
expropriating
who,
house
makeshift, to adopt the wrong
tack, to put off perhaps irrevoc¬
convertibility,
States
of whom I once heard
woman
the
1 9 3 4,
y,
ther
but
a
which defined
u a r
was
monetary
the
being told that her
fire, shouted back,
"Nonsense, the doors' locked and
the key's in my pocket!" In fact,
Congressional
action in Jan-
This action
in
that^
followed.
Leiand Rex Robinson
foundation
some
to dollar
Following the final session of the conference of high ranking representatives of the
United States, Great Britain and Canada in Washington on Sept. 12, regarding the allevi¬
ation of the British "dollar shortage" crisis, a joint communique was issued in which was
to
foodstuffs
(Continued on page 35)
re¬
and
%
Lee
Higginson Corporation
September 14, 1949:
•
Stein Bros. £s? Boyce
Almstedt Brothers
10
COMMERCIAL
THE
(1042)
CHRONICLE
FINANCIAL
&
Investment for the
Missouri Brevities
Layman: New Course
yesterday (Sept. 14) between
the management of the Missouri Pacific RR. Co. and representatives
ST. LOUIS, MO. —Announce¬
of the 5,200 striking engine and train service employees, members ment is made
by the University
of. the Brotherhood of Railway Trainmen; Brotherhood of Locomotive College of Washington University
Direct negotiations were renewed
Order
of
Railway'^
f—
and Brotherhood of .above the $21,356,000 for the corLocomotive Engineers and Fire¬ responding month of last year.
previous record high was
men, in an effort to end the six- The
It
day old strike which has tied up $22,529,000 for January, 1947.
was pointed out that, with prices
the 7,200-mile rail system.
The
Missouri Pacific RR. Co. ceased lower than last year, higher dol¬
.operations at 2 p. m., Friday, lar volume in August, 1949, rep¬
Engineers;
Conductors,
Sept. 9. Through service was also
*
with
discontinued
chase
Terminal
PCC
passenger
will
be
tween
unions
accepted.
cars,
service
be¬
Louis, Mo., and Ven¬
St.
for
vanced
manufacturer this month.
vestments
volving about $3,000,000, was the
loan will carry an interest rate
those
and
*.
of
stock,
common
of
Western
of record
$1
tail
Sept. ?9, 1949.
*
*
*.
■
.
The
sales
the
for
month
of
re¬
re¬
Au¬
gust of $12,407,000, a decrease of
0.5% from sales of $12,464,000 for
the
Gaylord
Container Corp.,
St.
Louis, reported a consolidated net
income for the six months ended
June
30, 1949, of $2,009,502, equal
.to $1.01 per common share, after
-estimated Federal and State innet
a
of
.common
$4,229,498,
or
$1.81
per
share, for the
same
pe¬
iast
riod
For
year.
Sales
of Edison
to
in
current year, net
after taxes totaled $1,111,606, or
,48
cents
per
common
share.
Working capital at the closed of
the
For
month
same
first
the
1949,
the
form
of
15-
a
term loan, of which the com¬
year
taken $3,750,000.
The
other half is being held available
for the company until Dec. 31,
1949, then its directors can better
determine what action would be
prudent to take from all the con¬
pany
the
George
Co.
Muehlebach Brewing
Kansas
City, proposes to
sell its 213,000 shares of Lone
Star Brewing Co., San Antonio,
Texas, common stock (par $1).
Officers
directors
and
Muehlebach
are
to
be
>
of
offered
45,000 of these shares at $9.66%
per share, prior to the public
offering of the Lone Star stock
through four Texas investment
firms, at $11.25 per share.
investments
will be given by
Witherspoon on Monday eve¬
ning, Sept. 19, at Brown Hall
on
Mr.
Auditorium at 8 p.m.
Registration
tuition
for
the
which
for
is
courses,
each,
$16
with
(Special to The
year.
months
for
period
j
Financial
CHICAGO,
Bodkout
ILL.
Chronicle)
has
—
Leslie *
become
E.
associated
? with Kebbon, McCormick & Co.,
in
213
South
bers
Salle Street, mem¬
York and Chi¬
La
the
of
New
of
International
Shoe
Aubrey Nash With j
Kerr & Bell
(Special
j
Coast
on
to The Financial
LOS ANGELES,
was
formerly manager of the re¬
tail department for Wm. L. Burton
& Co. of New York
thereto
was
City and prior
with
connected
New York office of H.
C.
the
Wain-
wright & Co. and Stein Bros. &
Boyce.
-
*
Elwoed D. Boynton
With Hallgarten Go.
(1)
ST.
to The Financial
Chronicle)
PETERSBURG,
T
with. Hallgarten
& Co.,: 44 Wall
Street, New York City, members
of the New York Stock Exchange.
He
was
formerly a partner in
Laird, Bissell & Meeds and prior
thereto
was
an
H.
F.
Chronicle)
f
officer
of
Boynton & Co., Inc.
Francis I. du Pont Co.
FLA.
—
filiated
Co.,
with W.
Florida
H.
Heagerty &
Theatre
(Special* to- The
Building.
L
Spinning
Financial
CHICAGO,
ILL. —Carroll G.
Taylor has become associated with
Francis I. du Pont & Co., 200
South La Salle Street. Mr. Taylor
was
formerly with Adams & Co.
prior thereto was an officer
Taylor, Duryea & Co., Inc.
Personal
With Waddell & Reed, Inc.
-
(Special to The Financial Chronicle)
TAMPA, FLA.—Jose L. Alvarez
-
is with
-
Texas Eastern Transmission
Kansas
Waddell &
City, Mo.
Reed, Inc., of
■!
^
brokerage firms would be modi¬
(2) Additional working capital
could
be
obtained
by
firms through stock offer¬
many
ings.
Stix & Co.
—
Quoted
.
INVESTMENT SECURITIES }
ness.
A cursory
study of the probable
three
changes
should be helpful in determining
effects
the
of
these
advisability of enacting
Modification
a
of
Personal
factor that has
greatly to
American enterprise
con¬
the entire
system.
It
has encouraged, to a considerable
degree, the daring and courage
that has permitted the business¬
of this nation to assume
un¬
paralleled
leadership throughout
the world. It is democratic, is an
important function of the capita¬
listic
system—and
should
go
far
towards
ma¬
An
Increase
in Working
Capital of Brokerage Firms would
many
such
research
as
clerical
divisions
departments,
and
brokerage
services.
In addition, this expan¬
sion would probably be reflected
Cnrfield 0225
L. D. 123
as
to the relations between wages,
and
corporate profits.
A
taxes
national
better
understanding of
this subject should promote greatr
moderation and
stability to
whole economy.
out
•
(3) Public Participation in the
Operations of Brokerage and Un¬
derwriting
Firms
should
bring
many advantages to the nation as
a whole.
Inept and unwholesome
management could more readily
be ousted, through formation of
minority and protective commit¬
tees on the part of stockholders.
Widespread
ownership
of
the
shares
of
brokerage
concerns
would lessen the dangers of mo¬
nopoly. The opportunity of shar¬
ing in this fruitful field would be
brought to investors who already
enjoy the advantages of owner¬
shiplii-the banking;insurance
investment trust spheres.
To recapitulate: From the fore¬
going it appears obvious that the
incorporation of brokerage and
underwriting firms should have
many advantages. Through modi¬
fication of personal liability both
daring and courage would be fos¬
th$ brokerage field with
the ultimate end of improving the
financial
machinery; through in¬
creasing working capital, broker¬
age concerns would be able to ex¬
pand their public services, create
broader markets
through wider
distribution of national exchange
participate
memberships,
more
widely in equity financing, and
lastly; through public participa¬
Well-Known Wall Street Newspaperman
Dies
E.
Medley Scovil, President of the old-time financial agency bear¬
ing his name, passed away in his 69th year while vacationing at
Norton, New Brunswick, Canada. Mr. Scovil was born in Canada
and at an early age came to this country. Most of his business life
was spent in Wall
Street, special-s¬
icle's"
recent
illustrated
issue
izing in financial advertising.
For many years. Mr.
well known figure
and Canadian circles
New
York's
stitutions
Scovil
in
as
well
as
leading banking
and
bond
was
British
in
in¬
investment
firms.
featuring the "Investment Dealers'
Association of
a
their 33rd
ago, Mr. Scovil was Fi¬
Advertising Manager of
New
York
"Evening
Post," the leading financial daily
last,
Lodge, Ontario. Mr. Scovil
special trip to Canada, his
for this paper's Canadian
number
pleted
"Evening Post"
to assume management of the fi¬
nancial
department of "Ridgeway's Weekly," then running a
of
sensational
articles
en¬
by
Tom
he
had
Lawson, excoriating the
big financial leaders with whom
been
associated
when
President of the country's
foremost copper company.
was
-Mr. Scovil's last newspaper as¬
signment
was
for
"The
Chron¬
of
Convention at
a
nancial
Mr. Scovil left the
proceedings
Annual
Minaki
the
"old"
Canada," containing
of? the
report
made
Years
he
Members St. Louis Stock Exchange
working capital coulfl
for equity financing
which, in turn, would create more
employment. Through "paid" edu¬
cation programs the nation could
be kept more adequately informed
utilized
by a wider distribution of mem¬ tion in the shares of these com¬
berships in national exchanges panies, weak managements could
thus creating greater stock liquid¬ more readily be ousted, dangers of
ity
through
broader
markets; monopoly lessened, and the privi¬
Through increased budgets, a more lege of public participation in this
conservative
type of registered fruitful field made possible.
titled "Frenzied Finance," written
St. Louis 1, Mo#
Landreth Building
Increased
tered in
(2)
STREET
SCHERCK, HICHTEH COMPANY
St. Louis 2, Mo.
this
bill.
series
OLIVE
well as other key personnel dur¬
ing non-productive perioas, would
assure improved public relations.
er
(3) The public, through stock
ownership, would be able to par¬
ticipate in the operations of the
brokerage and underwriting busi¬
day. Later he became Man¬
the Financial Advertising
Department of the N. Y. "Times."
509
will
and
ager of
Sopthwest Gas Producing
Sold
the
on
of its
Rockwell Mfg.
Southern Union Gas
SL 456
liability
representative
(salesman) could
employed. Their retention, as
be
be
follows:
as
fied.
a
-
Delhi Oil
Teletype
are
advantages to the in¬
vesting and trading public.
To
begin with, it would permit of
expansion
of
present
facilities
Elwood D. Boynton is associated
—
Thomas E. Jobin has become af¬
Dumont Laboratories
Bell
They
part of owners and proprietors of
bring
Carroll Taylor Joins
With W. S. Heagerty Co,
Mississippi River Fuel
—
changes.
chinery.
-
-
Black, Sivalls & Bryson
Bought
Exchange to incorporate, it would
bring about three important
tion of the delicate financial
Blyth &
was formerly an officer
Swift & Co., Inc.
Chronicle)
CAL.—F. Au¬
for
Co., Inc.,
of
-
permissible
were
Stock Exchanges. Mr. Bookout, who was recently with Fran¬
of Allen,
brey Nash has become associated
with Kerr & Bell, 210 West 7th
Street, members of the Los An¬
geles Stock Exchange.
Mr. Nash
Berkshire Fine
'
it
cis I. du Pont & Co. and
and
.
if
encouraging the broker¬
age
profession to achieve still
greater goals toward their perfec¬
"
Co., St. Louis, reached a record
high of $25,004,000, a gain of 17%
that
members of the New York Stock
men
of
$47,774,804,
$47,838,583
corresponding
(Special
President
At the outset it should be noted
(1)
cago
F.
Dollar sales volume for August
1949, according to Byron A. Gray,
timely, therefore, to review the. probable effects
spect would have on "Wall Street."
Sept. 16-24.
Kebbon, McCormick
1948.
has
siderations before them.
rity prices.
A special free lecture entitled
"The Wonder of Our Economy"
Leslie Bookoul With
Stores,
last
eight
totaled
sales
compared
; period
was
$13,614,000, against
-$11,345,000 at Dec. 31, 1948.
The
company has arranged a $7,500,-
in
Bros.
$5,086,972, against $5,267,530
;
credit
groups, current economic develop¬
ments and their effect upon secu¬
*
that affirmative action in this re-^
Liability is
Inc. for August, 1949, amounted
.quarter of the
000
29
It should be
month.
tributed
second
the
Sept.
decrease of 4.7%.
a
This compares with
taxes.
-come
corresponding month of last
year.
For the eight months ended
Aug. 31, 1949 sales totaled $76,385,000, compared with $80,168,000 for the first eight months of
1948,
ad¬
an
Interpreting In¬
given Thursday
on
be
to
is
through Dec.
8 and will take up the analysis
of individual stocks and investing
'
Auto
course
evenings,
*
Supply Co.
ports combined wholesale and
value, for each share held
par
sb
*
nned for
a
ParU II
endowments.
and is re¬
per annum,
-;,v
13 will make a
of
one
additional
distribution
of
St.
Corp.,
Oct.
on
1.69%
and
payable in 20 consecutive equal
quarter-annual installments.
*
*
Brewing
Falstaff
share
was
the strike.
cause of
Louis,
It
Madison
ice,
1
themselves, estates, trusts, and
said that 282 unsettled claims, in¬
the
the
I,
mentary
e
stockholders in brokerage and under*
writing operations.
Newspapers of late, have touched lightly on the seldom discussed
subject ot permissive incorporation of member New York Stock Ex¬
change firms. A final vote on this question is expected later this
practical knowledge of investing
a
as
d,
those desiring
Granite City,
111., when delivered by the
between
1
p
William Witherspoon
These cars
in
placed
r
evenings from
September 28
through No¬
vember 30, is
firm from the St. Louis Car Co.
been
a
to be
given
on
Wed nesday
being purchased by the railroad
has
h
w
course,
RR.
participation of public
for
.
e
Cook & Co.
of
price
motored
furloughed for the duration of the
walkout. The approximately 10,000
employees of the southern
lines were not affected, as sep¬
arate contracts are in existence
-
economist
80% of the pur¬
eight electric
Co. $226,767 or
It was
announced that
>more than 20,000 other employees
.of the Missouri Pacific RR. were
,road$.
'
Witherspoon,
N
Louis to
St.
of
Bank
Illinois
as chief advantages of permissive incorporation of
(1) modification of personal liability of proprietors;
(2) facilities for greater expansion of working capital; and (3)
member firms:
by William
Boatmen's
The
of
bid
The
Mr. Barnett lists
to
conducted
be
Part
advance
By MAURICE BARNETT, JR.
Mercer Hicks Corporation, Investment Bankers
the
for
ment
Layman"
e
National
Advantages oi Permissive
J
Incorporation of NYSE Firms
"Invest¬
in
course
*
*
*
Coast Lines, although strikes had
not been called on these rail-
trainmen's
two railroads.
weeks'
unit sales.
International
and
the
Gulf
Northern
Great
road's
the
ten
greaterjnereases in
even
lines—the
southern
,
resents
of
Thursday, September 15, 1949
heart
after
soon
hospital
he had
attack.
Besides
ship "of
Scovil
was
Pilgrims
a
,
his
the
com¬
for
treatment
earlier
Secretary¬
Canadian; "Club, Mr.
also affiliated with the
and the British
Down¬
town Luncheon Club of New
York.
His
brother, the late Lee Scovil,
was
connected with the New York
Stock
Exchange firm of Spencer
Trask & Co. as head of their Sta¬
tistical and Research Department.
A son,
Alexander Houston Scovil,
brothers, Lorin Scovil of
and two
Bernardsville,
Scovil
him.
of
N.
Miami,
J.,
and
Fla.,
Percy
survive
i
Volume
COMMERCIAL
THE
Number 4838
170
contrivances
Government
Responsibility
Affairs
mankind
has been
more
effective than that
deludes
money.
1
with
them
•
.
New School Offers Course
none
paper
'
...
debauch the currency."
to
'
'V'
Describing raising of value of gold by President Roosevelt as form
' '
,/•
*
•.■
1
•'«
,
Monetary Gold Not
of
robbery, prominent New York, merchant points out inflation and
deficit spending is facilitated by irredeemable paper money. Says
present Administration's pricing, taxing, wage and spending policies^
are fundamentally wrong and, if not promptly changed, will bring
is
It
that
said
•.
a
'
'? " •1
.'
•
1
Commodity
"gold is a
com¬
modity" and should have an open
market
like
other
West 12th Street, an¬
"Today's Investor" to be given by
on
course
Wilfred May,
Chronicle."
basis of society than
the existing
Today's Investor
executive editor of the "Commercial and Financial
Thursday, Sept. 29 at 5:20 p.m.,
offers an analysis of the currentsproblems of the investor and is ciation, and is Chairman of the
especially designed for all who are Public Relations Committee of the
concerned with the management Tax Institute.
A.
no subtler,
over-turning
of
means
surer
weeks'
15
a
nounces
on
School for Social Research, 66
New
The
Lenin said: "There is
By PHILIP Le BOUTILLIER*
City
cheating the
of
no
President, Best & Co., Inc^, New York
for
class
11
(1043)
CHRONICLE
laboring
which
In Monetary
FINANCIAL
&
commodities—
The course, which begins
of funds, laymen as well as pro¬
fessionals, including the security
Robert
investment counsel, cus¬
trustee, executor,
analyst,
tomer's
broker,
Delaney With
Totally false — Commodities, and investment banker.
wheat, cotton, copper are con¬
Among the special phases to be
paper dollar to economic ruin.
Contends monetary gold is not a
(Special to The Financial Chronicle)
r
sumed—are gone—d i s a p p e a r.
covered are the long-term status
When gold is used it still remains;
"commodity, and praises Secy.• Snyder's stand against devaluation.
DENVER, COL.—Robert F. De¬
of the American investor; an ob¬
which reveals it for what it surely
laney has become associated with
Suppose any man in this room went into a store to buy a yard
jective analysis of the various de- Boettcher and
Co., 828 17th Street,
of material and the store-keeper gave him a 24-inch yard instead is, the truest and most permanent
erminants of security values and
members of the New York Stock
store of value the world has ever
of a 36-inch yard, he would say:
"Why, that's dishonest, you're a
prices,
with
particular
attention
to
known.
Exchange.
Mr.
Delaney
was
crook. I'll never buy here again." But the store-keeper says': "You're
i;he psychological elements; an ap¬
formerly an associate of C. V.
Thus far men of high financial
wrong.
Be-^praisal of the currently popular Converse & Co. of
Allentown, Pa.
cause of comthe heads of our investing tools and techniques;
315 francs to the dollar for trav- position like
plaints
from I elers checks. When I left Paris, life insurance companies, the practical portfolio planning; tax
producers 3 weeks later, hotels1 were paying heads of our savings banks, the laws; the investor as company
Bush With Larz Jones
and for other
330 francs for the.
same
dollar heads of our large commercial stockholder.
Boettcher in Denver
-
(Snecial
the
reasons,
on
to
2
but
still
dis¬
That's what
Philip Le Boutillier
happened
Roosevelt
of
an.
in
raised
of
ounce
gold
from $20.67 to $35.
The big idea
was
to raise agricultural prices
and Roosevelt
persuaded by
half-baked agricultural econo¬
a
was
mist, Professor Warren of Cornell,
that this would do it quickly. This
debasement
of
dollar
the
was
Congress suddenly and
sprung on
in
hurry. The apologists
put
over
say,
events forced us to devalue. I
a
say nonsense.
the
cart
The apologists have
before
the horse.
follow decisions,
made
decisions
are
by people.
did
It
Events
raise
not
agricultural
of
a
50,000,000 savings bank de¬
positors, all owners of govern¬
ment bonds, apd, im fact, the en^
tirb United States population be¬
cause
the purchasing power of the
less.
1934 dollar is now 57%
thorities will appear as guest lec¬
excep¬ turers:
Benjamin Graham, Presi¬
no
remained
have
has
arrived
astronomical
at
of
United States government spendipg that I have seen appeared in
the New York "Sun" of July 22;
clearly where we are
Copies of this are. at each tablej
Take
it
home, study it, think
about it, and wake up before it
is
late.
too
Some Monetary
spending,
currency.
The
Hokus-Pokus
full
are
newspapers
of
few examples:
Beardsley Ruml, in Aug. 20
"Collier's," in an article: "Are we
going broke? No," presents a col¬
give
you
a
that
the
guarantying
the
British
then the dollar is gone, no
the '
whether
labeled
ic
i
w r a p p
,Vi
earmarked
mercial banks seem afraid to op¬
the Federal Reserve policy(What are they afraid of?)—al
though they know or should
know that the Federal
Reserve
Board,
has
Rochester Gas and Electric
Corporation
business cycle
become
Common Stock
chiefly
political instrument whose chief
duty is to make it possible for
an
extravagant
government to
borrow money cheaply. The Fed¬
matter
n g s
are
(No par
absolutely
ately false.
This statement
deliber¬
and
was
endorsed,
Committee of the New York Re¬
The Chairman,
Anglo-American world leader¬ publican Club.
ship, Four Freedoms, World Pros¬ George A. Elbert, said: "would
perity, or what not. That is the cost the American taxpayer noth¬
point that the 'United States is ing, would be an investment, not
an
now at. The Administration pric¬
expense."
taxing, wage and spending
policies are fundamentally wrong
and, if not promptly changed, will
bring the paper dollar to eco¬
Last
ing,
nomic ruin
On
at
last June 1, when
I arrived
Paris, the hotels were paying
of
Charles
week
General
E.
Electric,
he
the United
States could reach Truman's' goal
thought by next
year
billion national income,
but
of
3
he
carefully neglected to say the
real
value of
those
dollars. .Let's
A Subscription
at
the
Standard
City,
Conference,
Sept. 8,
New York
1949..
and
make
it
come.
What
How
billion
800
a
stunid
national
in¬
mirage!
can
American? be?
Daniel Webster said: "Of all the
Offer by
General Public Utilities
Corporation
General Public Utilities
record
on
■,.
Corporation has mailed to its stockholders of
the
September 8th, 1949, Subscription Warrants evidencing
of Common Stock of Rochester Gas and
Electric Corporation as set forth in the Prospectus dated September 8th,
1949. Subscription Warrants expire at 3:00 P.M., New York Time,
right to subscribe for shares
September 30th, 1949.
The
undersigned have been engaged by General
poration to organize securities
this program
the Common Stock.
point out the only practical
way to regain control of our ter¬
rific government spending*
Public Utilities Cor¬
dealers to obtain subscriptions for shares of
Such dealers
Stock
sell shares of the Common
may
under certain conditions offer and
fully set forth in the Prospectus.
as more
Any securities dealer who is a member of the National Association of
Inc. may obtain a Prospectus and a copy of the Par¬
'
Securities Dealers,
Secretary Snyder has gone on
record recently saying he is "op¬
ticipating Dealers Agreement containing full information with respect to
this offering, the solicitation of subscriptions and the compensation pay¬
able therefor by communicating with the nearest office of the undersigned.
to changing the price of
gold, the only sound currency left
posed
He deserves active
Do not forget that Sec¬
retary Woodin was opposed to de¬
valuating in '33 but was over¬
come. Let's help Secretary Snyder
maintain stoutly his stand.
support.
Where is the moral fiber
leadership?
lief
in
dise. Their present
man
dealers in securities in
The First Boston
All these
position paralr
"
Y''.
building and while
passing the 15th floor was
to
shout:
Facilis
"I'm all right
Decensus
so
Averni.
;
_
;
.
.;■■■ ■
Merrill
,
./■;
■
September 12,1949.
; ■
.
■;>
•,
,
■>
.
Lynch, Pierce, Fenner & Beane
heard
far."
Corporation
Wertheim & Co.
Lehman Brothers
•
who fell out from the
50th story of a
this.State.
of our
people are living in a fool's para¬
lels the
or
Where has our ber
principle gone?
investor may obtain a copy of the Prospectus from the
from such other Participating Dealers as are registered
Any prospective
undersigned
•
debauch the dollar to 10 cents and
by Mr. Le Boutillier
International Gold Coin
*Address
Other speakers on
in the world."
value)
Advisory
will
Wilson,
said
Board
chaos and remorse.
"Without touching a hair on an
viously,
Board
Reserve
Reserve
exchange of currencies
freeing of trade."
"peace-in-our-time," Aiig. 30, by the Foreign Affairs
higher world standards of living,
eral
:i
and downs
a
free
and the
835,000 Shares
functions
original
whose
to control the
business,
of
would then be
backing to permit
as
V)
V
pose
sum
pound, American Taxpayer's head" is ob¬
Anglo-American econom¬
union,
great
is made only by means of the Prospeclu,.
The offer
and an inconvertible
The heads of our com¬
and flatten out the ups
monetary hokus-pokus of which I
biggest give-away show yet pro¬
posed; if we choose further de¬
valuation- of gold, if we choose
more
Chronicle)
LA.—Reuben
become asso¬
travagant government taxing and
were
brightly packaged
"Products of Great Britain" in the
lot
Financial
deficit financing, ex¬
follow
will
crash
financial
inevitable
pro-
oortions. The best visualization
This
a
The
silent.
Federal
Council
lection of fallacies hard to excel.
mittee on Monetary Policy was
have failed the country completely
He pointedly ignores debasement
formed .in 1933 to oppose this ex¬
in this respect. So far as I know
of the dollar and its devastating
periment.
William R. Woodin,
none of them has pointed out the
effects.
Roosevelt's Secretary of the
economic disaster which will in¬
Stewart
Alsop,
on
Aug.
17,
Treasury, at! that time was op¬
evitably follow the present gov¬
"The High Price of Doing Noth¬
posed to it.
ernmental fiscal policies.
I say
Soon after this the Administra¬ ing," says: "The American Treas¬ to
you that unless these men in
tion got another gold brick, this ury would raise the price of gold
positions of high fiscal respon¬
time labeled
"Product of Great from $35 to $45 an ounce. This sibility face the issue and tell
Britain," by adopting Lord Keynes would automatically and without the truth honestly to their policy¬
theory of deficit spending and the touching a hair on an American holders, their depositors and to
idea
that the government debt taxpayer's head, raise the value the citizens of this country they
of the huge American gold horde
may rise harmlessly to any figure.
will pass their remaining years
about eight billion dollars. in
This month we are going to see by
an
atmosphere
of financial
The Economists' National Com¬
to
NEW ORLEANS,
G. Bush, Sr., has
•
and it shows
ers,
au¬
,,
today and where we are headedi
tupe of 57 %, including 60,000,000 life insurance policy hold¬
prominent financial
Three
...
years
the
almost
with
savings,
tions
French
prices at
once but over a term of
it has helped to raise paper
prices all around. Raising paper
prices all around has defrauded
every owner of paper dollars to
banks, all the places where there
are enormous deposits of citizens'
ciated with Larz E. Jones, 318
The
dent of
Graham-Newman Corp. Carondelet Street.
franc, based
He was for¬
life insurance companies take the
gold was 5 francs -to the dollar.4
and lecturer at the New York In¬
merly with Beer & Co. and Mer¬
technical position that they will
Two
stitute
of
years
ago
the; people of
Finance; J. K. Lasser, rill
Lynch,
Pierce, Fenner&
be in a position to pay out a dolFrance subscribed to government
Chairman of the Federal Taxation Beane.
bonds the equivalent of two bil¬ lar for claims for every dollar Institute and author of "Your In¬
lion
American
dollars.
Today taken in from policy holders. Ig¬ come Tax," "How to Live Within
Heath & Co. Adds
every
Frenchman who, at " the noring wh&t they know to be the Your Income" (with Sylvia Por¬
most important fact and that is
urging of his government, put 1,^
ter); and Lewis D. Gilbert, widely
(Special to The Financial Chronicle)''
that
dollar
paid
out
should
have
000 francs into those bonds has
known through his representation
ELGIN, ILL.—Richard W. Masleft in purchasing power only 100 equal purchasing power with the by proxy of small stockholders at
sey has been added to the staff
dollar
taken
in.
The
same
with
francs.
In
other
words
their companies' meetings.
every
of Heath & Co., Tower Building.
our
savings banks.
They have
owner has lost 9/10. This is what
Mr. May, a member of the Econ¬
two
functions, like turnstiles—
irredeemable paper money is and
omists'
National
Committee
on
does, whether in France, in China, taking money, investing and later
With K. J. Brown Co.
Monetary Policy, served with the
or in any other country, includ¬ paying out to the insured' or to
Securities and Exchange Commis¬
(Special to The Financial Chronicle)
,
•he depositor.
At this they func¬
ing the United States.
Depart¬
tion well.
But their most impor¬ sion, and, the Treasury
MUNCIE. IND.—Max B. Wool.And the simple reason is that
ment. He is a member of the New
tant responsibility is as trustee ol
ery is with K. J. Brown & Co.,
it is so easy to appropriate and
York Society of Security Analysts
the value of those dollars, and at
spend when all we have to do is
of the American Statistical Asso- Wysor Building.
this they are thus far almost a
start the printing presses rolling.
complete wash-out, in that they
We have a similar system in this
have failed to point out to their
country (only once removed)
This announcement is under no circumstances to be construed as an offer into] securities for sale,
depositors and policy holders the
or as an offer to buy, or as a solicitation of an offer to buy, any securities.
where the government spending
3
feet
the
when
remember
can
value
honest.
when
today
here
reduced
the yard from
so what
selling
you
is
per¬
fectly legal."
Legal,
yes,
value
pay
has
I'm
1933-34
They
around 350 francs. Most everyone
feet;
the
travelers checks.
g o v e rnment
I
j
12
COMMERCIAL
THE
(1044)
Michigan Brevities
bid of 100.0445 for a combination of 4s, 2V2s and
214 s, reflecting a net interest cost of 2.3372%. The bonds mature seri¬
ally on Feb. 1 from 1950 to 1973 ?>
ended
June
30,
1949,
which
inclusive.
As is usually the case
compares
with a net of* $2,with Detroit issues, the offering
861,863, or $7.33 per share, for
attracted bids from a number of
the preceding 12 months period.
syndicates comprising firms lo¬
Current
other States.
June
the
the
and
bid
successful
best offer
totaled
current
Co., Inc. and associates be¬
ing based on a net cost of 2.3471%.
The bonds were publicly offered
on Sept. 8 at prices to yield from
at
Marion,
have
with
turity.
basis.
on
*
market
again
in
(Sept.
today
15)
offering of $1,070,000 special
mature on
structural
metal will be featured in the six-
panel
Pays"
Magnesium
"How
assessment bonds to
exhibit of The Dow Chemical Co,.
June 1 from 1950 to 1954 inclu¬
Midland, at the
sive.
Show to be held Oct. 17 through
the
Despite
bonds
designation,
the
backed
the
full faith and credit of the city.
Also
are
15
Sept.
on
the
by
city
will
accept tenders for the purchase
of
about
ing
outstand¬
of
$600,000
obligation bonds.
will be accepted on
general
Offerings
the
of
basis
the
net
highest
yield.
V-
::
*
The Detroit Stock Exchange re¬
ports that trading volume in Au¬
gust was 268,943 shares having a
value
dollar
of
$3,305,804.
For
July the volume .was 204,839
shares with a dollar value of $2,484,225.
The
traders for
most active
10
the month of August were: De¬
troit
Cleveland
&
Navigation
Co., Commonwealth & Southern
Corp., Detroit Edison Co., McClanahan Oil Co., Sheller Man¬
ufacturing
Power
Consumers
Corp.,
Co.
(common),
United
Corp., Packard Motor Car * Co.,
General Motors Corp. and Goebel Brewing Co.
>
»
Metals
National
at the Cleveland
21
Public Audi¬
torium, Cleveland. Articles to be
displayed are magnesium cast¬
ings, extrusions and sheet for air¬
General Motors. Corp. produced
291,383 passenger
in the United
during
254,662
and trucks
cars
States
and
Canada
August, compared " with
units in the preceding
and 195,029 units, in the
month
corresponding month of lagt year.
Of the total vehicles produced dur¬
ing August, 249,691 were passenger
cars and 41,692 were trucks. For
the year to Aug. 31," 1949, the cor¬
poration produced 1,909,084 units,
compared wth 1,444,164 for the
period in 1948.
same
Motor
division
in
The Buick
August
pro¬
duced 40,106 cars, a new all-time
peak and the highest total of
month
in
this
division's
history.
The previous record
output was 38,913 set in
Buick
March of 1941.
The Fisher Body
Division also in August produced
the greatest number of bodies for
any month in its
41-year history.
The Pontiac Division
was
unit which set
high month¬
ly
a
production
new
record
in
another
August
when it turned out 38,211 passen¬
ger cars and 244 trucks.
*
Motor
troit,
after
taxes,
#
Products
reports
come,
or
*
per
its
Federal
amounted
$6.97
Corp.,
that
to
De¬
net
in¬
income
$2,719,480,
share, for the year
well
'•
>
In
a
Moreland & Co.'
Member
Detroit
Stock
Exchange
1051 Penobscot Building
DETROIT
Bar City
—
26,
Lansing
MICH.
—
Muskegon
*
net
income
Sugar
Co.
for
30,
1949
June
$240,431,
ferred
Michigan
provision
amounted
after
for
and
taxes
$161,200.
Federal
pre¬
of
income
This
June 30, 1949 to¬
$5,259,073,
ing
Machine
the
first
were
while current
$1,643,200. The
shares
795
outstanding 531,-
has
company
of
6%
Co.7"Detroit,
stock.
mon
nine
the
months
for
708,013,
1949
of
months
equal to 93 cents per
share,
in
the
six
ended" June 30, 1948.
Putnam
Included
,
compared with $790,403 receiv¬
during the first six months
of 1948.
Total income from do¬
mestic sales and service activi¬
ties of the company during the
six
months'
30, 1949,
what
ended June
$45,656,414,
was
higher
sponding
the
period
than
period
Working
1949
capital
last
at
year.
Jr-'"
#
when
$44,454,956.
at
the
30,
June
against
time
same
•*
y
,V
corre¬
1948
$25,699,560,
was
$23,105,103
some¬
the
of
figure * was
sis
Sk
I
" :• •:
"Reflecting
the high rate of
output by car irianufacturers, our
shipments of automobile hinges
during the month of August
reached
postwar record total of
a
a
who
Sept.
on
8
viewed
the company's facilities for mass-
sponsored
Stock
recent
by
the
Detroit
Exchange, following the
listing (on Aug. 22) of the
common
stock
on
bourse.
the
*
7-7■'
*
Co. and
its subsidiaries for the
six months ended June 30, 1949
amounted
compared
the
to
with
$38,092,272,
$42,741,252
corresponding
period
as
for
of
1948.
Net earnings were $1,565,100, equal to $1.09 per com¬
mon share, as against $2,911,470,
or
$2.20
per
($3,322,018,
including
common
or
n o
$2.53
per
share
share,
n|-recurring
City.
the
and
Liquid
Glory
the
Central City Opera House, which is the
each summer. From there a short jaunt will
the Lazy Valley Inn for lunch.
The return trip will be
of
tour
the
cocktail
a
world
famous
party, followed by
Palace
Brown
banquet, will be
a
Hotel.
The
next morningarrangements have been made to visit the Denver Mint and the 17th
financial district will hold
Street
for Colorado
open
Springs.
house until the train leaves
:
,
r
NSTA CONVENTION PROGRAM
The
tentative
announced
program
Traders
Association
Oct. 5-9,
1949, is
as
16th
annual
for
the
National
at
Colorado
convention
Security
Springs,
follows;
Tuesday, Oct. 4—
9:30
a.m.
Convention
10:30
a.m.
Leave for Central
Special Arrives Denver
City and Denver Mountain Parks
Tour
7:00 p.m.
Cocktail Party and Dinner, Brown Palace Hotel
Wednesday, Oct. 5—
9:00 a.m.
Open House Denver Financial District
i
12:30
p.m.
2:30
p.m.
Special Train Leaves for Colorado Springs
Arrival Colorado Springs '<
5:30
p.m.
Cocktail Party, Terrace Pool Broadmoor Hotel
Thursday, Oct. 6—
A
8:00
a.m.
Past Officers Breakfast
9:30
a.m.
National
2:00
p.m.
Circle
Committee
the Gods
Trip
Will
Tour,
Meeting
Rogers Shrine
and
Garden
of
or
through
Colorado
Fuel
and
Iron
Plant
at
Pueblo
5:30
p.m.
8:30
p.m.
Fishers Canon, Outdoor Steak Fry and Barbecue
Return to Broadmoor
•
in¬
8:00
a.m.
Municipal Committee Breakfast
8:30
a.m.
Motor Tour to Pikes Peak
1:00
p.m.
Return
2:00
or
Cripple Creek
to Broadmoor
underwriting group headed
p.m.
by Putnam & Co. on Sept. 13 of¬
fered 160,000 shares 3.90% pre¬
3:45
p.m.
Municipal Forum—Guest Speaker
William G. Laemmel,
stock,
cumulative,
par
valute $50 per share, of The Hart¬
ford Electric Light Co. The stock
5:00
p.m.
Men's
priced at $50 'per share, plus ac¬
crued
dividends, was oversub¬
Saturday, Oct.
Vice-President Chemical Bank & Trust Co.
ferred
9:00 p.m.
9:00
scribed and the books closed.
Other
members of
the
Stanley &
Co., Inc.; Drexel &
Ripley & Co. Inc.;
body & Co.; Smith,
Eastman, Dillon &
Co.;
Blyth &
Co.; Harriman
Kidder, PeaBarney & Co.;
Co.; Stone &
Webster Securities Corp.; Union
Securities Corp.; White, Weld &
Co.; Coffin & Burr, Inc., and
Cooley & Co.7
Morgan
Proceeds from the sale of these
reestablish the company's normal
capacity reserves and to meet ex¬
demands
panding
electric
for
The preferred stock may
at
time
any
at
be
p.m.
1900
6:30
p.m.
Cocktail
7:30
p.m.
Dinner
production, purchase, trans¬
mission, distribution and sale of
electricity for residential, com¬
Bathing Suit Review for Ladies and Gentlemen
Party
Dance, Informal Dress
p.m.
Special Train leaves for Denver and the East
SECURITY TRADERS ASSOCIATION OF NEW YORK
The Security Traders Association of New York held their Annual
Summer Outing and Dinner last
A. C. Grounds at Travers Island.
Friday, Sept. 9 at the New Yorfe
The
Shoe
highlights of the day consisted of a Golf Tournament, Horse
Pitching Contest, Tennis Tournament and a Soft Ball Game-
Such outdoor activities were followed
by
of prizes for each contest.
Dinner and the awarding,
The arrangements for the
outing were handled by D. Raymond
Kenney, of Kenney & Powell, Chairman of the committee.
The surprise of the day was the Horse Shoe Pitching Contest
which was run in its entirety by
Harry Casper of John J. O'Kane,
Jr. & Co. Approximately 80 contestants
appeared and after several
hard-fought rounds the prizes were awarded to:
,
re¬
in
Meeting, Election of Officers
Men's Field Day, Golf, Tennis, Etc.
Registrations should be forwarded at once to Morton A. Cayne,
Secretary, Union Commerce Building, Cleveland, Ohio.
1—Don Hennefin of Jos. McManus & Co.
prices
1881.
The
business of the company consists
of the
3:00
2:45
2—Hal Murphy of "Commercial & Financial Chronicle."
3—Henry Gersten of Gersten & Frankel.
4—Hoy Meyer of Stern & Co.
;i
5—Frank McCall.
accrued dividends in all cases.
incorporated
'
,
National Committee
Sunday, Oct. 9—
share after Sept. 1, 1959, plus
was
8-
a.m.
-
ranging from $53 per share on or
before Sept. 1, 1954 down to $50.50
per
a.m.
Bowling Tournament
Special Event
10:30
under¬
group include; Chas. W,
Scranton & Co.; Estabrook & Co.;
writing
A
special prize of
Lax of
scoring
a
_
Rubber Horse Shoe
Greenfield, Lax & Co. for pitching
a point.
a
•
.
,
was
awarded
to
Herb
complete game without
GOLF—This year inaugurated the Annual Competition for the
Stany Golf Trophy between Philadelphia and New York. The open¬
ing round was won by the Philadelphia Team. The opposing teams
consisted of:
mercial, industrial and municipal
purposes within its franchise ter¬
Larry Wren of Allen & Co., who incidently handled all the de¬
tails of the match; Ted Plumridge of J. Arthur Warner &
Co.; Stan
ritory in the State of Connecticut
Roggenburg of Roggenburg & Co., and Addy Donnelly of Reynolds
and
utilities.
chise
235
of
sales
electricity
to
other
Total area of the fran¬
territory
square
is
approximately
& Co.
The
population of 252,200, according to
of 1948.
the 1940 census.
Philadelphia
Team consisted of Ned and Sam Phillips of
Krug of Bioren & Co., and Jim McFarlane
of H. M. Byllesby & Co.
S. K. Phillips & Co., Tom
miles, having a total
come), for the first six months
At June 30, 1949, cur¬
House
Corporate Forum—Guest Speaker
Merrill E. Shoup, President Golden Cycle
Corp,
The Hartford Electric Light Co.
.
>:
Central
of
Teller
Ladies' Bridge or Canasta Tournament
deemed
trip
town
the
at
p.m.
service.
plant
available
be
2:30
An
The group visited the
in a get-acquainted
Soss
a
10:30 for the famed
at
will
o'clock
7
at
Hartford El. LI. Pfd.
producing hinges for automobiles,
furniture
and ; general
building
purposes.
Mountain Group of
of the opera stars
At
held
Group Sells
650,551, with a new daily peak of shares will be added to the com¬
36,222 being established on Aug.
pany's funds and applied toward
11," Charles J.JSoss, President of
financing a construction program
Soss Manufacturing Co., Detroit,
extending through 1951. This pro¬
told a group of 80 brokers and
gram includes the construction to
bankers
Rocky
Friday, Oct. 7-
amounting to ^$295,000 * during
the first half of this year, as
ed
the
through Evergreen, back through Bear Creek to the Queen City of
previous year.
months
in these profit figures are divi-
and
cordial invitation to all the traders attend¬
the Plains.
Federal taxes,
share, and compares with *"riet
profits 'of; $6,338,641,
qr, $1.27
per
and
ended
1949, Gar Wood Indus¬
with
Station
mecca
share, and 747,-
108 shares of no par value com*
net profit, after
of $144,958, or four
$4,656,317, after providing
cents per common share, which
$600/000 for expense in connec¬
compares with sales of $26,233,tion with
the
introduction
of
176 and a net profit of $1,897,105,
new products
during the sec-' dr
$1.74 per common share, for
ond half of 1949. " These earn¬
the corresponding period in the
six
were
Hole
cumulative
tries, Inc., reported sales of $17,-
were
ings
Union
refreshments
preferred
per
Denver
a
ing the NSTA convention in Colorado Springs, Oct. 5 to 9, to be
their guests on Oct. 4. The arrival of the special train at 9:30, Tues¬
day Oct. 4 will be the signal to blow off the top for a Western
welcome to those attending the convention.
Buses will leave the
496 in the preceding year. Cur¬
taled
Club of
com¬
pared with net earnings of $7,rent assets at
Bond
the IBA wish to extend
to
per
deducting
depreciation
$233,998
of
ended
year
cents
45
or
The
be made to
of
the
share,
July 31,
Net sales of Fruehauf Trailer
Growing Industry
*
The
For
Net profits of Burroughs Add-
WELDER
: I..r.
$123,329,481.
were
CLUB OF DENVER TO ENTERTAIN NSTA
BOND
smaller fabricated
as .some
products.
*
Company
said that total sales for the
$8
available, including
castings, extrusions and sheet, as
are
RESISTANCE
Growing
President, further an¬
"Barring major disturb¬
ances in the automobile industry,
or upsets in general business be¬
yond our control, we look forward
to a good year in 1950."
Dollar
sales volume for the past year
was the highest in the company's
peacetime history. The company,
in commemorating its 25th anni¬
which
which mag¬
NSTA Notes
M. Pryale,
nounced:
totaled
nesium
a
$854,100 for the year ended June
30, 1949, compared with $656,870
for the preceding fiscal year.
H.
the various forms in
company's
A
reports
income after income taxes of
stock, par $10, on
accumulated dividends
local
CORPORATION
net
*
Co.
liabilities
a
truck body
a
any
46-year
*
Rubber
cutaway corner section" of
and truck wheel; a
gasoline tank truck; hand tools;
a ladder and a textile warp beam.
A
smaller
exhibit will display
craft;
dends from foreign subsidiaries,
>
$55,014,994,
*
The world's lightest
Thursday, September 15, 1949
liabilities $17,547,-
♦
the
when bids will be considered on
an
*
totaled
25-year period
<
♦
Baldwin
term
long
a
current
versary,
insurance firm to bor¬
an
$2,500,000
row
appear
directors
arrangements
Ohio, the
approved
0.70% to 2.35%, according to ma¬
will
$15,541,liabilities
its new
operation — The Marion Indus¬
tries Division—now being built
art &
Detroit
of
close
of $6,145,820. To finance
tender by Halsey, Stu¬
runner-up
against
the
at
1949
30,
642,
next
rather narrow, the
was
assets
assets
and
*
York syndicate on a
York and
The spread between
rent
CHRONICLE
978.
The City of Detroit awarded on Sept. 7 an issue of $2,000,000 noncallable public sewer bonds, series H, to a National City Bank of New
cated in Michigan, New
FINANCIAL
&
Aside from the Match
played the tough
1:7
course
Play, about 50 members and their guests
.7
;
at Winged Foot.
The Philadelphia Team
was presented with the Golf
Trophy to-
Volume 170
Number 4838
COMMERCIAL
THE
gether with an.ice-cold bottle of Champagne and each of the eighu
contestants in the match received
souvenir
a
hand-painted porcelain
bearing the inscription STANY.
The Low Gross
prize was won by A1 Greiner of Dobbs & Co.
The Low Net by Foster Webster of
Hardy & Co.
-
the
High Gross
went to Carl Swenson of
SOFT BALL—The Official Game
G. H. Walker & Co.
highlighted by the inning
by inning description with many very suitable off-side remarks by
the Chairman of the
Arrangements Committee. As Official Scorer
he decreed the
game to be a tie after three hectic, multi-run innings
the
on
part of
side.
was
that they scored* so many times
brevity of the game.
(Too Many
Charlie Horses.)
The only real casualty of the game was Charley
O'Brien Murphy of "We, the
people" who, acting as Catcher, caught
one off the
right eye and lower lip. He was not allowed to put a
steak on it due to its
being Friday. Last report was that he resembled
Theda Bara on one side only. Each of the Soft Ball Contestants was
was
one
actually the
awarded
a
reason
The
for
hand-painted,
fact
the
porcelain
bearing
mug
the
Tennis
Tournament
was
10.7%
a
in
decline
the
interest received
Emmett F.
increase of 15.2% in the interest
m>i
Discounts or, loans.
Other changes were relatively minor, with
income from other securities down slightly and income from service
charges and other sources moderately higher.
in
decline
The
of
interest rates
from government securities followed a
holding of such securities. A higher level
income
reduction in the average
loans and discounts as well as some
on
increase in
William
of
the
curities
Street,
by Rickie Goodman of
by A1 Marcusson of the Invest¬
operating
continued to increase and were
expenses
banking
of
enabled the banks to show an increase of 2.2%
former
Officer
utive
the
Corpo¬
effec¬
ration,
Oct.
tive
G.
Terry,
Golf Team.
centage change is substantial the dollar amount is relatively smah
and has not been of great importance in total earnings for the pas.
ration,
several years.
Other
charge-offs were little changed from the
previous year. For the 35 banks they were lower by 1.3%.
Possibly the most important change in the report is the onf
related to additions to reserves. For the period, such transfers tc
office
while.
being served special prizes, all hand picked
Jby Les Barbier of G. A. Saxton & Co., were awarded to:
Lou Singer of Troster, Currie & Summers; A1 Powell of Kenney
& Powell; Fred Vogell of Geyer &
Co.; Freeman Robson of A. E.
Ames & Co.; Ransom Bernberg of Wood,
Gundy & Co.; Gus Grindel
of F. I. du Pont & Co.; Bert Pike of Troster, Currie &
Summers;
Les Greenwalt of B, L.
Taylor, III, & Co.; Eddie Patton of Townsend,
Graff
&
was
Co.
Incidentally the outdoor activities
ance
of the
beautiful
most
double
were
ments Committee voiced
his
topped off by the appear¬
it has ever been our
rainbow
pleasure to witness.
While awarding prize? Mr. Kenney
as
Chairman of the Arrange¬
heartfelt thanks
for the
success
of
the
day to the members of his committee with special emphasis on the
names of Arnold Wechsler of Ogden, Wechsler & Co. and Charles
O'Brian Murphy of Merrill Lynch, Pierce, Fenner & Beane, and to
Les Barbier, who, while not a member of the committee, had vol¬
untarily given of his time to work hand in hand with the committee.
DETROIT BROKERS' BOWLING LEAGUE OPENS SEPT. 15.
Many of the boys from Griswold* Street
the
bell
season
the
at
of pin
Detroit
Recreation^ that
spilling.
anxiously awaiting
are
will
open
'
t
their
fourth
.•
The league is composed of 14 teams totaling 70 bowlers, spon¬
sored by the following firms:
securities
sold
from
44.9%
because of conditions within the securities
markets.
a
year
While the
age
ican
Secu-
per¬
rit'es
Corpo-
Actual net losses and
for
reserves
were
bad
debt losses
on
Presi¬
dent of Amer-
down
were
1,
Charles
1949.
ating earnings, before income taxes.
After a hectic day outdoors Dinner was served to
approximately
250 members and their guests and consisted of
Chowder, choice of
Lobster or Roast Beef, Pie a la Mode and Coffee and was as good a
meal as we have been served at one of these
shindigs in a long
and
rector
ating expenses 3.5%. According to the report, the average numbei
of employees in the banks were down slightly from a year ago., The
increase in total payroll arose because of higher salary levels.
While the percentage increase in operating expenses was greater
than the gain in income, the higher dollar gain in operating earnings
on
in-
F.
Chief Exec¬
Profits
an
firm,
Emmett
Parsons, Wm. J. Mericka & Co., Cleveland, Ohio, Past President of
NSTA; Tom Love, Geo. E. Snyder & Co., and George Mueller, Janney
& Co. of Philadelphia as well as the members of the
Philadelphia
.
Se¬
Broad
announces
higher for the first six months of 1949 by 2.7%. Salaries and wages
of officers and employees increased 2.3% and general*current oper¬
in net current oper¬
Chairman
American
vestment
Connely as
President, Di-
inscription
of
Corporation,
25
New York City,
securities.
Visiting Firemen included: Lud Strader, Strader, Taylor & Co.,
Lynchburg, Va.; Phil Jackson, Jackson & Smith, Gastonia, N. C.; Ed
While the coffee
Rosenwald,
Board
the election of
Total current
Connely
Of American Securities
the loan volume for the
period, enabled the reporting banks to show
the 15.2% gain in income from this source. This more than offset the
decline in interest received on holdings of United States Government
13
Is Elected President
from government securities and an
handled
Cohu & Co., and first prize was won
ment Dealers Digest.
operating earnings for these banks were higher
1948 by 2.5%. The principal changes in
current
than the similar period of
the income account were
STANY.
The
following discussion.
Total
The Kickers prizes went to J. Bloom of the Public National Bank
£c Trust Co. and
Addy Donnelly of Reynolds & Co.
(1045)
1949 as compared with the
similar period of<1948. The various
changes and factors contributing to this gain are reviewed briefly in
mug
-
CHRONICLE
FINANCIAL
&
loans
other valuation
and
reserves
lower by 88.1%.
of
F. Connely
Emmett
-
r
elected
was
Chairman
Committee.
directors
remaining
in
are:
Peter I. B. Lavan,
Executive
the
senior
Stroock
partner
of
Stroock
&
& ; Lavan,
who
will
as general counsel; Mr.
continue
Malzman
David
Terry,
and
Al-
vin R. Young.
According to the Bank, the smaller amount of additions to re*
Mr. Connely, a Past President
in the 1949 earning reports reflects the fact that this year the
of the Investment Bankers Asso¬
accumulations do not include, as they did in 1948, a large volume
ciation of America, has long been
applicable to a previous year. As the Bureau of Internal Revenue identified with banking and in¬
extended to March 15, 1948, the period during which banks coulc
dustry. A graduate of the Univer¬
change from a method of specific charge-offs to a reserve method foi sity of Michigan, bis business ca¬
accounting for bad debts in making their 1947 tax returns, part of reer has included association with
the reserves provided in 1948 should properly be charged to the
Montgomery, Ward & Company,
previous year. The Bank also points out that another factor in this the Hudson Motor Car Company,
connection is that a number of banks may be deferring reserve accu¬
the Detroit Trust Company and
mulations for this year until the year-end at which time a more the
First
Detroit
Company
of
complete idea of results for the full year relative to losses, outstand¬ which he became President in
ing loans and operating earnings can be obtained.
1931. Mr. Cohnely organized the
These various factors resulted in an increase in taxes on income First of Michigan Corporation in
for the first six months' period of 1949 of 1*3.6%. The gain in net
1933, serving as President and
profits for the period was an almost equal percentage, 16.9%.
subsequently
Chairman of the
As the amount paid out in dividends remained practically un¬
board, from which position he is
changed from the level of the previous year, retained earnings were resigning at the end of the month.
He has just concluded a two-year
higher by 60.6%:
'
{
-*\V
f
-V
term as Chairman of the Detroit
Chapter of the
American Red
serves
.
,
.
Davies &
With Stephenson,
Mejia Add
Cross.
Mr.
Connely is also
a
(Special to The Financial Chronicle)
Captain—Max Bolhover, Chas. E. Bailey & Co.; Paul Chester,
Trustee of the United Foundation,
Leydecker
SALINAS, CALIF.—Raymond S.
Baker, Simonds & Co.; Henry Vander Voort, Cray; McFawn & Co.;
Trustee
of the
Greater Detroit
OAKLAND, CALIF. —Welwyn Whitmore has been added to the
Ralph Rotsted, Detroit Stock Exchange; Frank Curaba, Goodbody &
F.
Dallam is with Stephenson, staff of Davies & Mejia, 62 West Hospital Fund, a member of the
Co'.; Alex McDonald McDonald-Moore & Co.; Geo. Walker, Geo. A.
Advisory Committee of the Uni¬
Alisal Street.'
•
McDowell & Co.; Chas. Padgett, Paine, Webber, Jackson & Curtis; Leydecker & Co., 1404 Franklin
versity of Detroit, and. Chairman
Street.
■
'
y *
Chas. Exley, Chas A. Parcells & Co.; Roy Neil, Andrew C. Reid &
of the Detroit Chapter of Junior
With Greene & Brock
Co.; Chas. Floyd, Wm. C. Roney & Co. (Red); Ed Coe, Wm. C. Roney
Achievement,
Incorporated.
A
With Leo Schoenbrun
& Co. (Blue); Roy Delaney, Smith, Hague & Co.; Robert Barnard,
(Special to The Financial Chronicle)
Captain
of
Field Artillery in
DAYTON,
OHIO —Robert D. World War
LOS ANGELES, CALIF.—John
Watling, Lerchen & Co.
I, he held the rank
Competition will be keen for the trophies donated by the W. Finney is associated with Leo Barnard is with Greene & Brock,
of Colonel in the Office of Stra¬
Third
National
Bldg.,
members
of
^Michigan Investor" and Reardon-Parshall Co. now held by Mc¬ Schoenbrun, 1385 Westwood Bou¬
the New York Stock Exchange.
tegic Services in World War II.
Donald-Moore & Co.
levard.
-
.
.
,
u
.
The team from the
league succeeded in returning to Detroit an
inter-city trophy donated by the First of Michigan Corp., previously
held by Chicago.
r
Officers for the coming season are:
'
President—Ross Sutherland, Cray, McFawn & Co.
$2,970,000
Vice-President—Nick Allman, Geo. A. McDowell & Co.
Secretary—Hayden Brown, Wm. C. Roney & Co.
Treasurer—Ken Binkley, Paine, Webber, Jackson & Curtis.
Indiana Harbor Belt Railroad
Second
Bank and Insurance Stocks
Equipment Trust of 1949
2%%
By H. E. JOHNSON
Equipment Trust Certificates
(Philadelphia Plan)
This Week—Bank Stocks
The 12 Federal Reserve Banks at various times issue reoorts
To
on
mature
annually $198,000
on
each September 15, 1950 to 1964, inclusive
the earnings
and operating results of the member banks within their
respective districts.
These reports are valuable for the information they provide on
banking trends in the different areas of the countrv.
As they
prepared to fit the particular requirements of the Federal
To be
are
guaranteed unconditionally as to payment of the par value and dividends by endorsemerit by Indiana Harbor Belt Railroad Company and by each of that company's
proprietor companies in stock oivnership proportion.
Reserve
Banks, however, they may not be exactly comparable in form with
those issued to stockholders of individual banks. For this reason a
Priced
to
yield 1.30% to 2.75%, according to maturity
direct comparison between
results of a particular bank and the over¬
all results for the district may not be valid. But, in general, they do
provide important information on the broad phases.
Because of the nationwide investment interest
in the New York
Issuance and sale
The
by the Interstate Commerce Commission.
which this announcement is circulatedfrom only
lawfully offer these securities in such State.
of these Certificates are subject to authorization
Offering Circular may be obtained in any State in
of the undersigned and other dealers as may
such
City banks, the reports of the Federal Reserve Bank of New York in
this regard are of
The Monthly
particular interest.
Review of the Bank for September .iust recently
issued contains
analysis of the earnings and
an
expenses
for
a
member banks in the second district for the first six months
of 1949.
While the analysis breaks down the results according to the
size of the bank on certain banks located outside of New York City,
the
figures shown
interest.
-
*
on
the 35 New York City banks are of primary
'
'if
New York City banks shows, .that net profits
,
.
reserve
profits on security transactions; charge-offg and.Valuatiofi
adjustments ihcfeased by 16.9%
V
OTIS A. CO.
v.: •'
THE ILLINOIS COMPANY
(INCORPORATED)
FREEMAN & COMPANY
:
The analysis of the
after taxes,
HALSEY, STUART & CO. INC.
selected
group of
in the first six months of '
•
.
6 September 15;,.1949
'•{LV; :
i.„1vK
V
'<f>'
.
-1«
..
'* r/.
i
svy
,-u
vut*
.
-
*}»»'*
I
14
THE
.(1046)
COMMERCIAL
Connecticut Brevities
The annual report of
Steel
The Torrin&ton Company for the fiscal year
indicates that net per share earnings for the year
$2.90 compared to $3.33 the previous year. In addition there
non-recurring tax refund of $0.25 per share in 1949. The report
ended June 30,1949,
weye
was a
that
indicates
sales
down'^
are
FINANCIAL
&
CHRONICLE
Fact-Findixig Board Reports
share
(Continued from page 7)
general average should
provide primarily the means of
reducing the prices of tne prod¬
ucts of that industry.
Therefore, even if the union had
succeeded
in
showing that the
1939-1949 rise in labor productiv¬
the
over
The annual report of North &
Torrington
has succeeded in diversifying its Judd Manufacturing Co. for the
business to the extent that ma¬ fiscal year ended June 30, 1949,
chine needles, formerly the prin¬ shows that the company earned a
ity was 49.5%, it still would not
cipal product, now account for net profit of $126,370, equal to establish an inequity by showing
only about one-third of the sales $1.30 per share of common stock. that the real average hourly earn¬
volume.
As of July 1, the com¬ Net working capital at the year
ings of steel workers
(present
end was $27.55 and the book value
pany had 14,006 stockholders.
average
hourly money earnings
was $43.35 per share.
*
*
#
deflated by the general rise in the
*
*
*
cost of living since 1939) had risen
Russell Manufacturing Company
At its fiscal year end on May 31
only 14% since 1939.
i3 planning to open a subsidiary
the liquidating value of the pre¬
The evidence before us reveals
plant at Bennettsville, S. C., about
somewhat
this
year.
'
stock of The
ferred
Jan. 1,
Guardian In¬
that for
our
Thursday, September 15, 1949
whole national
thereof, it is
necessary
also
to
consider the low level oi prof¬
its
or
lack of
profits in other years
of the business cycle.
The pros¬
volatile industry lixe
ability to pay should
judged over a longer rang2.
perity of
a
steel and its
be
(3) Break-Even Point—In con¬
sidering
the bi;eak-even
point,
which
the next factor in apprais¬
is
ing the company's ability to pay,
the Board fines that it is unable to
accept tne union's estimate of the
break-even
of
32%
cost levels.
Board
point for the industry
present wage and
under
At the
doubts
same
that
tr.e
been
ing
the
of
more
current
profits
for dividends to stockholders and
for social insurance and for set¬
ting
up reserves for pensions.
(7)
plant modernization
The
and expansion program should re¬
sult in efficiencies which, other
things
being
equal,
will
better
enable the companies to meet the
cost of the insurance and
plans
look
recommended,
toward
and
lower
a
pension
also a
level
of
prices for their products.
(8) There
time tne
estimates
through long-term debt in¬
profits, thus leav¬
stead of recent
steel
are
workers
no
at
inequities of
which
present
econ¬
Negotiations are un¬ vestment Trust was ■
made by some of the companies require redress through a general
$39.53.
In
omy
output per man-hour
in¬
derway to build a plant that will
liquidation the preferred is en¬ creased from 1899 to 1939 at an running as high as 65 or 70% wage-rate increase; and the rec¬
employ about 135 persons.
The titled to
is that the
union
reflect
the
actual
break-even ommendation
$37.92%, including $7.92%
annual rate of about 2%, but that,
new plant would be built and fi¬
of accrued dividends.
The indi¬
points for the larger tonnage pro¬ withdraw its request for a general
in the decade which followed, the
nanced by a group of Bennetts¬
ducers. The Board's conclusion is wage-rate increase.
cated
liquidating value of
the
ville businessmen and leased to
general rise in productivity was that the
common stock was $0.13 per share.
present break-even point,
(9) However, with increased ef¬
at a lesser rate.
the new subsidiary, Russell Prod¬
Therefore, the
*
for most of the large tonnage pro¬ ficiency and lower costs resulting
steelworkers' rise of 14% in real
ucts
Company, on a long-term
The Iiartman Tobacco Company
ducers, is somewhere above the from the plant-modernization pro¬
basis
with
average hourly earnings during
option to buy. The earned
union's figure of 32% and below
$0.26 per common share in
gram, and with no great decrease
this decade is fairly consonant
plant will be used to manufacture the
the companies' estimates of 55 to in the
year ended June 30, 1949, and
demand for steel, there
with the apparent rise in labor
certain types of narrow fabrics,
70%.
These
conclusions
are should
during the same period paid divi¬
be continued and higher
permitting
the
introduction
of
productivity in the whole economy reached for the
dends of $0.15. Total current assets
following reasons. profits.
If these profits do not
new
during the same period and re¬
products and the expansion
were $1,220,000 including $300,000
result in benefit to the consumer
of present lines.
flects no inequity in that regard.
(A) Reliable supporting data
Russell has also
of
cash
and
current
liabilities
in the form of lower prices, thera
are
announced that it has purchased
lacking for all the estimates
(C) The union compared the
were $180,000.
would
be
justification for the
the
Howard
Asbestos
Co.
of
/'
?jV.
ijc
productivity of 1939, a year of made, and the union made cer¬
tain assumptions which are unac¬ union to renew its demand for in-*
Northfield, Vt., which will be op¬
Stockholders
of New
Haven low volume, with 1948, a year of
crease
of wage rates, in Order
erated as a subsidiary under the
maximum
volume, ceptable.
Pulp & Board Co. as of Aug. 1 practically
better to participate in the indus¬
name
of Russell Asbestos Corpo¬
which is unsound comparison.
(B)
Most
of
the
companies
were given the right to subscribe
ration.
The new company is in¬
failed to inform the Board of try's prosperity.
to 4,946 additional shares of $25
(D) In computing an index of
tended to provide a supply of high
their break-even points; none of
C. Steelworkers in Relation to
par common at $40 a share, on the
productivity for the steel indus¬
quality asbestos yarn at a low cost.
basis of one new share for each try, the union used the assump¬ them provided the data needed to Other Income-Receiving Groups—
'Y'r *
make
a
reliable
% six shares held.
estimate; and the The cost of living has remained
Rights expire tion that the production mix of
v United
Aircraft Corporation has Oct. 17. Proceeds will be used to the industry after 1945 was sub¬ Board believes each of the major stable within the last year; in fact,
been awarded a government con¬ increase the working capital, but stantially the same as during the companies could have indicated it has
slowly declined. The post¬
tract for over $29 million of Wasp all or part of it may be advanced war
years.
This assumption is its own break-even point and the war race between rising wage
basis thereof.
Major engines, the most powerful to Bartgis Brothers Co. which the open to serious question.
rates and rising costs of living has
reciprocating type engine in pro¬ company controls.
(C) The union's testimony that been called otf by the operation
(E) Trustworthy productivity
duction. The engines are reported
the
break-even
Therefore,
point before the of economic forces.
studies can be made only if the
to be intended for the Consoli¬
An issue of 160,000 shares of
companies provide full and accu¬ war was at 45% of capacity was there is no inequity in respect to
dated B-36 bombers.
preferred stock of Hartford Elec¬ rate data
not controverted.
other
income-receiving
groups in
upon which such studies
tric Light Company was offered
I:"'-*;
v
can be made.
Such data were not
(D) The .favorable course of the general economy.
Sept. 13 by an Underwriting group offered in evidence.
Electric Boat Company's subsid¬
profits in 1949 as compared with
headed by Putnam & Co. The of¬
D. Findings and Conclusions on
iary,
Canadair, Ltd., has been
'(F) The companies also made 1948 indicates that the break-even Increased Wage Rates in Relation
fering price was $50 and dividend
awarded a contract to build 100
point has become lower since 1943, to
which would provide a .yield of invalid comparisons in their own
Economy as a Whole—With reaircraft of the F-86 jet fighter
because in the second quarter of
3.90% on a $1.95 cumulative pre¬ productivity claims by insisting
Speettb the secondmajjor criterion
type for the Canadian Govern¬
1949,
when
operations
were
af
ferred. '
>•
'
" that an index of money rather
mentioned
above—weighing the
ment. The plane will be manufac¬
than **eal average hourly earnings the avevage rate of 91%, profits
effect of granting the union's de¬
tured under a license agreement
was
the proper comparison with before taxes were about $230,000,Results of the three-way contest
mands on the general levels of
with
North
American
000 as compared with the same
Aviation, for
the productivity index.
control of Segal Lock & Hard¬
economic activity in the country
Inc. The contract price is
$30,211,- ware Co. show that
quarter
of
1948,
when
operations
stockholders
as a whole—the Board f'nds;
(2) The Level of Profits of the were at 90% and the
190. Deliveries will commence by
profit figure
groups opposing the management
Steel Industry, and Labor's Share
(1) While the Board's findings
August, 1950. Canadair has an¬
$170,000,000, a rise of $60,003,000,
1950.
■
.
v'~
•'
1
j
'
1
have elected three of the five di¬
'
or
about 35%, at approximately and recommendations are based
(A) The Board has decided to the same rate of operations. A on the facts and figures of the
Aug. 3 ballot had been postponed
plant at Cartierville to provide
accept as a basis for comparison comparison of the first half in steel industry alone, there is a
three times because of legal diffi¬
additional space needed to com¬
the ."reported"
rather than the 1948 with the second quarter of probability that a wage-rate in¬
culties prior to the meeting on
plete the contract.
"adjusted" profit figures.
Each 1949 leads to similar conclusions. crease in steel would be urged as
Sept. 8.
Louis Segal, President,
a pattern to be followed in other
party
claimed
these
figures should
''.f
*
*
*
and Sidney Kuttin, Vice-President
(4) With respect to the factor
be adjusted—upward by the union,
industries; this in turn might well
New Haven Water
of
probable movement of raw
Company has and Secretary, were reelected to
downward by the companies—but
cause price dislocations, w'th ad¬
called for payment Oct.
materials prices and other
1, 1949, at the Board.
cos.s,
the Board finds that' it is impos¬
verse effects on the general econ¬
106y2 and interest, $17,000 of its
the Board has taken into consid¬
sible accurately to compute the
eration
general and refunding B 3V4S of
the large decline since omy and on the steel industry
amount
of
itself.
adjustments
which 1948 in the
1975. Payment will be made at the With Investment Service
prices of certain ma¬
each side has urged should be
First National Bank & Trust
(2) The course of the "reces¬
terials, notably scrap; but it has
Co., Corp.
made.'
New Haven.
:"*>£ also noted the recent
sion" which started late in 1948
(Soecia' to The Financial Chronicle)
recovery in
(B) The reported profits after some of these prices. It has also and manifested itself in increased
DENVER, COLO. —- H. Clay
Hogan and William L. Parks have taxes of the steel industry in 1948 noted rises since 1948 in the prices Unemployment and in a decline in
become affiliated with Investment were substantial, and in the first of certain other important ma¬ gross national product secerns to
Tifft Brothers
Service Corp., 650 Seventeenth half of 1949 they rose even higher. terials, such as iron ore and coal. have flattened out or turned up¬
Members New York and Boston
Stock
In 1948 profits after taxes were
Street.
In three of the four main
Experience
shows
that
scrap ward.
Exchanges
A'.,
'■
$511.9 million' as Compared with prices quickly respond to
in¬ components of the gross national
Associate Members New York Curb
an
average of $271.3
million in creased demand, and that if rates product,
slight
increases were
Exchange
nounced
sion
that
will
be
$2,000,000 exten¬
a
added
its
to
No.
rectors.
Announcement
1
of
Therein:
.
.
^
the
"
♦
.
,
,
Harry W. Cole Opens
(Special
Primary Markets in
to
The
Financial
the
Chronicle)
period
Hartford and
FRANCISCO,
CALIF.—
Harry W. Cole is engaging in the
Connecticut Securities
securities business from offices at
704 Market Street.
the
annual
"•
7-3191
i
BArclay
Bell
With Davies & Mejia
York:
(Special
7-3542
SAN
System Teletype: HF 365
to
The
Financial
JOSE,
The
of profit—the
of these profits
rates
amounts
figured
of
net
substantially dis¬
percentages
as
worth—must be
Chronicle)
CALIF.—Fred
J.
Sullivan is with Davies & Mejia,
39 North First Street.
counted, however, for we are
which
are
considerably less valu¬
1941, whereas
capital assets
is
Connecticut Securities
PUBLIC
UTILITIES
in
terms
INDUSTRIALS
1940
or
dollars
of
higher
V
stated
as
also
(6.3%
CHAS.W. SCR ANTON
STOCK
&
a
percentage
substantial
1948 and the first
but
YORK
of
value.
are
payments.
NEW
or
large part of the
in the net worth
a
(D) The profits of the industry
—
Write for specific
recommendations of issues, with
long records of unbroken dividend
MEMBERS
now
considering 1948 and 1949 dollars
able than those of 1939
SPECIALIZING IN
of
1940-1941 average..
dollar
'
•
New
rise
a
of
rate
profit was
$606.6 million, or 124% above the
(C)
Hartford
1940-1941,
89%; and in the first half of 1949,
SAN
CO.
and
are
parable
and
EXCHANGE
sales
the
year
quarter of 1949
6.8%,
respectively);
not out of line with
com¬
like
1940
prewar
4941,
were
for
of
when
years
the
percentages
8.2 and 6.1.
New Haven 6-0171
New
London
Hartford
(E)
2-4301
7-2669
New
York
Canal 6-3662
Teletype NH
194
Waterbury 3-3166
Danbury 5600
evaluating the amount
of profits in any given year, like
1948 or 1949, to determine whether
In
the workers have received
a
fair
of operation rise
price of scrap
idly.
substantially the
moves upward rap¬
experienced in the second quarter
of 1949.
Since the low point of
1949, there have been up¬
movements in production
July,
(5)
When years of similar op¬
eration rates are compared, there
ward
and employment, with declines in
unemployment; this has been es¬
claim that labor has been receiv¬ tablished by official government
As late as the day „
ing a continually smaller share, or publications.
Sept. 8, 1949,
that ownership equity has been before yesterday,
these
improvements
were again
receiving an increasingly larger
by the Bureau of the
share of the industry's sales dol¬ reported
Census and the Federal Reserve
lar. If the share of
ownership be
Board.
Steel operations, which
defined in terms of
dividends, its
rate of return becomes very low, were at slightly over 70% of ca¬
for the total dollar amounts of pacity in July, 1949, have moved;
dividends, when paid, have con- up steadily to a point more than
:
sistantly been only minor frac¬ C-3% of capacity as of last week.
is
no
susbtantiation of the union's
•
tions of profits after taxes.
(3)
(6)
The industry's recent policy
modernizing
and
expanding
physical plant and facilities has
While there may be condi¬
tions in particular
iniustries;
of
which
absorbed
wage-rate adjustments, in general
it seems desirable at this time to
stantial
most
of
profits.
its
recent
Given the
try's peacetime and possible
time needs for larger
sub¬
coun¬
war¬
steel-making
require correction through
stabilize
In
the
level
of wage
industry we have not
such conditions or inequi¬
found
capacity, the program seems en¬
tirely desirable.
But there is a
ties and, for all the reasons
question
as
wage-rate adjustment
part
the
of
to
whether
financing
ja
of
larger
such
long-term assets should not have
do
rates.
the steel
not
eral
believe there
now.
stability is desirable
order
that
consumers
stated,
should
and
be
a
Gen¬
now
in
dealers
Volume
structure
and
"less
resume
the
cial Insurance and Pensions
(A) The
these
estimated
two
programs,
net
(F)
of
cost
based upon
that labor
tion
worker
(B)
step in to fill the gap.
of
; the steel industry in the past two
years and the current reversal of
the downward trend in produc¬
tion
satisfy
that
board
the
the
net cost of the insurance and pen¬
sion
recommended
absorbed without unduly
be
can
herein
plans
the profit margins of
ability to hold
or even lower its prices. (C) Whereas increases in wage
rates depend upon profits of com¬
panies under relatively current
narrowing
the industry or its
and
conditions
relatively
over
short
periods of time, social in¬
surance
and pensions—especially
installed,
they cannot well be discontinued.
(D)
that
For
immediate
able
and
reason, although
generally foresee¬
ability to pay is very impor¬
in wage-rate determinations,
tant
it is not
important in the ques¬
as
supplied
(D)
adequate to provide an American
minimum standard of living.
level
the
are
pensions
of
re¬
however, is higher than that pre¬
vailing or ag»: *»d on where such
retirement plans
old-age
as
the,, basic .steel
quested by the union in this case,
benefits in amounts which are not
are
and
in effeU.
It is recommended
(E)
equitable
cumstances
established
under
as
all the
fair
cir¬
that pension plans be
in this industry,, with
The recent trend in pro4
the cost to be borne by the em¬
resulting from, collective
ployers without contribution from
bargaining is toward complete
the employees. The details of such
nancing of the plan by the em-i
should "be :determined
ployer, or toward lowering thd plans
employees' cost in existing con¬ through collective bargaining be¬
(H)
tributory plans.
„
„
,
1
„
tween
f each
the
and
company
union.
2. Findings and Conclusions on
included in
380 exist-*
some
collective-bargaining
ing
agree¬
ments between the United Steel4
of
workers
America
firms
and
both within and without the
basic
steel industry. Of these the Board
had
information
on
some
300
tions of social insurance and pen¬
$120
6
the
an
per
a
hour
per
on
a
year,: or
basis of
a
2,000-hour - work-year.
Based on
the union's cost estimates, this
will provide, when added to aver¬
age social security old-age bene¬
fits, about $100 per month
tirement at age 65 of the
on re¬
aver¬
plan be handled what deviations, if any, should be
insurance company or made from the general recommen¬
dations.
E.
"
Collective Bargaining
pervision; how shall the accrued
liability for: past service be
treated; shall there be provision
the basic steel industry, the prac¬
for
tice
employees retired through
disability below the
age of 65; what shall be the mini¬
mum length of service to be elig¬
ible for pensions; shall the pay¬
ments be proportioned to length
permanent,
of
service
or
shall the pensions
the
of
amount
or
amount; shall
ployees have
a
collective
has
bargaining
in
developed by which al¬
most the entire industry
generally
follows the pattern set by United
income,
be at
In
1.
States Steel
few
a
per¬
of
union.
the
flat
withdrawing em¬
any rights if they
Corporation and
the other large
companies in their contracts with
haps
2.
As
result, there is frequent¬
a
ly little
or
no
serious bargaining
discussion between most of the
or
employ be¬ individual employers and the
fore they are 65; shall retirement Union.
at 65 be compulsory or shall there
3. This practice is clearly a va¬
be some means provided for mak¬
riation from the accepted concept
ing exceptions, whether by mu¬ of collective bargaining as defined
tual agreement of the employer in the
statutes and
interpreta¬
and employee, or otherwise; and,
tions; it tends to promote a feel¬
having agreed on other principles ing of dissatisfaction and dishar¬
and details, hOw large should the
mony between the parties which
benefits be in light of the maxi¬ makes
cooperation difficult.
j "
mum
cost stipulated?
4. Now that the organizational
phase of union activities has beeh
D.
company's
Scope of Board Findings
and Recommendations
maximum of about
employee
cents per
15
(1047)
through a trust fund and how may
the parties participate in the su¬
(1) Pensions should be limited
in net cost to
Social insurance plans are
(A)
now
!..
Social Insurance
;
Should
through
leave
grams
pensions—involve long-range con¬
siderations because, once
*
(G) Government (exceot in four
states) has failed to provide social
insurance (as defined herein) for
industrial workers generally, and
has
in
Act, when compared with recog¬
nized minimum requirements of
elderly individuals or couples.
provides such insurance in ade¬
amount,
industry should
quate
year.
per
substantial profits
The
industry has become
.accepted part of modern Amer¬
ican thinking. Unless government
would provide an in¬
crease of only 2l/2% of total costs
on
operations of 2,000 work hours
per
in
workers
pensions for
and
-
industry were the result of uni¬
lateral action by employers and
are generally inadequate, even as
a
minimum
supplement to the
amounts payable as old-age pen¬
sions under the Social Security
an
50% of total produc¬
cost,
"
insurance
effect
in
CHRONICLE
both parties
Such pension plans
(C)
of providing
concept
on
bargain continuously."
now
an
The
*
social
the liberal assumption
costs average
to
increasing extent,
through collective bargaining. L
to
or;
ers
Justification for So¬
Economic
FINANCIAL
&
obligation remains
industry'and
inaugurated either by
unilateral action of employ¬
haver been
re¬
stricted buying habits.
3.
American
in
alent
have confidence frl the price
may
COMMERCIAL
THE
Number 4838
170
l.
x-
The
findings and
recommen¬
dations herein contained
largely
on
.
are
based
relating
evidence
to
nineteen
passed, the field ought to be re¬
examined to see whether the pub¬
lic' interest requires any
of collective
not
stances of any
kinds
the
individual company.
recommendations
on
plans, of which over 80% werd age employee.
wage rates and on bargainability,
sions, Here the more important non-contributory. These plans in
the recommendations on social in¬
(2) The recommended net cost
consideration is the social obli¬ which the cost is
paid solely by
is meant to be the total cost, not surance and pensions are not in-t
gation which the board finds rests the employer, almost invariably
a
cost in addition to what any tended to apply automatically to
upon industry to provide insurprovide for a lower level of bene-f
individual companies.
company is now incurring under
ange
against the economic haz¬ fits than those requested by tho
its own pension plan for employ¬
2. With respect to those comn
ards of modern industrial life, in¬ union in the present case, and the
ees
within the bargaining unit. panies which are among the group
cluding retirement allowances, in costs of such plans are definitely
Therefore any plan agreed upon of nineteen leading .steelTproduc-f
an
adequate amount as supple¬ lower, on the basis of a 2.0004
between a company and the union ing companies, however, there is
mentary to the amount of the hour work year, than the cost of
should not be in addition to any a
presumption that the abovesecurity furnished by government. 6.27 cents per hour which the
recommendations
of
existing plan which the company mentioned
union
is
requesting
here.
(E) The inauguration and oper¬
may already have, 'but in substi¬ this board should apply.
In spite
ation of insurance and pension
(B) It is recommended as fait tution therefor. •
of :this presumption, there Should
programs will make a consider¬ and equitable under all the cir¬
(.3) Since the problems in¬ be a return to collective bargain¬
able contribution to the attain¬ cumstances that a social insurance
ment of the economic stability so plan be incorporated into the col+ volved in a pension program are ing in order to provide an oppor-f
more co mplic a t e d than those
necessary at this time.
With the lective-bargainihg - agreements of
faced, in
social
insurance, pro¬ tunity to. each company to prove,
knowledge that the economic haz¬ 'the industry. The
details and
that1 the considerations, conclu¬
ards of life will be at least par¬ specific
benefits of the plans grams, and because the costs are
sions and recommendations herein
tially met, workers will be more should be ' determined through greater and the program less sus¬
ceptible to change from year to discussed are in fact not Appli¬
apt to help sustain consumption collective bargaining between
year,
it
is
recommended
that
a
spending at a high stable level. each company and the union. The
cable to it.
'
/
'
'
joint study in the industry should
(F) For these reasons and those plans should be paid for by the be made on
3. With
respect to companies
pensions. - Such a
elsewhere
herein indicated, the employers without contribution by
study is necessary before intelli¬ which are not included in the
Board believes that insurance and the employees; but should be lim¬
gent bargaining over a pension group of nineteen leading steel
programs; should
have ited in net cost to a maximum of
pension
bargaining in accord¬
new situation faced,
with the
leading; steel-producing
companies as a group and do not
necessarily reflect the circum¬
Unlike
modifica¬
tion in the definition and theories
ance
-
only in the steel industry but
varying
in other industries where
of
-
industry
than ~ individual
rather
wide
-
collective
gaining have grown
bar¬
up.
With First California
./'""(Special
SAN
.,
A.
G.
to The
Marshall
Neuweiler
of
Financial
Chronicle)
are
C.
Herman
and
now
7
CALIF.—
FRANCISCO,
with the staff
First California Company, 300
Street.
Mr.
Neu-
Montgomery
weiler
is
located
Reno, Nev., office.
i
in
firm's
the
v
-
wmrnmmm
—•—
-
!
« ■—
1
Kirkup With Hess, McFaul
(Special to The Financial Chronicle)
;
;:
PORTLAND. ORE.—John F. T.
Kijkup
with
Bank
has
Hess
become
associated
McFaul,
American
&
Bldg.*
Mr.
Kirkup
was
formerly with Daugherty, Cole &
,
Social Insurance and
Pensions
r
.
Conclusions
1. Findings and
as
to
Both
(A) Social insurance and pen¬
sions should be considered a part
machinery. This obligation should
first
the
among
charges
on
revenues.
(B)
indicated
As
the
of
in the fore¬
discussion,
economic
going
social
the
insurance
net
cost
and
pension plans herein recom¬
can be absorbed by the
mended
without
companies
unduly
nar¬
rowing the profit margin of the
industry or its ability to hold or
even lower its prices.
Although the steel indus¬
(C)
try has kept pace
dustries in .wages
"
with other in¬
and other in¬
relations matters, it has
dustrial
"
lagged behind other leading basic
industries In social insurance and
pensions.
(D)
,
The fully integrated com¬
panies before us now have social
insurance and
retirement-plans
for
are
their employees as
in their railroad or coal-min¬
such
of
operations, and this further
supports the Board's conclusion
ing
that
the
entitled
tion.
steel
to
v-
Ziegler & Co. Adds
employee; program can be concluded.
WEST BEND, WIS.—Thomas J.
producing companies, there should
or 4 cents per hour, on a basis of
(4) Among the matters which
be bargaining between the union Kenny is now with B. C. Ziegler
will have to be resolved in col¬
a 2,000-hour work year.
and Co., 215 North Main Street.;
lective bargaining are these: and each company to ascertain
(C) The recommended net cost
is meant to be the total cost, not
cost
a
in
addition
what
to
any
company is now incurring under
its
listing insurance plan for
This
workers
are
now
Van Camp
be expected to pro¬
duplicating sickness benefits
where provision therefor is made
by State law, except to the extent
that the amount agreed on ex¬
ceeds the amount payable under
such laws.
This will result in a
diminution of the cost of the new
social insurance plan for
offer to sell nor a solicitation of an offer to
offering is made only by the Prospectus.
buy
any
of these securities.
Sea Food Company, Inc.
Common Stock
($2.00
■
par
value)
subscribe to 25,000 of
♦The Company has issued to its stockholders non-transferable rights to
these shares, which rights expire on September 21,1949. Rights to subscribe
to an aggregate
have agreed to purchase from
the Company the unsubscribed shares and shares for which subscription rights have been
waived and have agreed to purchase an additional 109,350 shares from Selling Stockholders
of 22,420 shares
all com¬
panies which are now paying all
or any part of the cost of existing
plans, to the extent of the amounts
of such present costs.
as set
forth
have been waived. The several underwriters
more
fully in the Prospectus.
.
Price $11 Per
Pensions
x.
Share
'
Findings and Conclusions on
3.
(A)
not
Copies of the Prospectus may, be obtained in any State in which this
circulated from only such of the undersigned as may legally
The subject of pensions is
announcement is
bargainable at this time under
offer these securities, in compliance
w- >
with the securities laws of such State.
the terms of the reopening clause
providing for the right of either
in 1949 to negotiate for a
general ar.d uniform change in
rates of pay and/or for-described
William R. Staats Co.
White, Weld & Co.
party
Shields &
'
Paine, Webber, Jackson & Curtis
Company
First California Company
social insurance.
(B)
subject
the
However,
of
Sutro & Co.
Hill Richards 8C Co.
Walston, Hoffman & Goodwin
pensions is bargainable under the
law
A/-;''}
are
interpreted
as
tional
Labor
all
not
the
by ' the
Relations
included
in
"with
and
unwritten
terms
as
the
written
to
'wages hours and other terms and
in this dispute have become prev¬
conditions
of
Blunt Ellis & Simmons
-
Cruttenden & Co.
Kebbon, McCormick & Co.
Pensions
companies.
agreement
Na¬
Board
Social insurance and pen¬
sion programs with the types of
coverage requested by the union
an
vide
to
:'■
neither
*134,350 Shares
any company
these types of protec¬
(E)
announcement is
The
employees within the bargaining
of normal business costs to take
unit; therefore, any plan which
care of temporary and permanent
may be agreed upon between a
depreciation in the human "ma¬ company and the union shall not
chine," in much the same way as be in addition to any existing plan
provision is made for deprecia¬ which the compay may have but
tion and insurance of plant and in substitution therefor; nor should
be
B. C.
Hughes, Humphrey & Co.
about $80 per year per
priority at this time.
C.
Co. and
respect
dealing
employment,'
with
the
Pacific
Company of California
September 15, 1949
Boettcher and Company
Wagenseller & Durst, Inc.
(1048)
316
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
to continue
Thursday, September 15, 1949
indefinitely. The problem
transition from the Boom to
Mutual Funds
ATIONAL
^
"It
is
impression that the readjustment is continuing in a
healthy manner and that by and large our economy is in better shape
today than we thought likely several months ago.
By HENRY HUNT
===E===E========i
our
"We do not
your
NATIONAL
Never before in history has the stock market stayed in as narrow
it has during the past 36 months.
The range has been only
request from
investment dealer,
or
&
CORPORATION
of this monthly pay¬
security purchase plan
prospectus of
Details
and the offering
Dividend Shares, Inc.
on request from
investment dealer of v
available
your
Established 1K94
declines
in
New York
balance.
on
a
It is seldom that advances
exists.—Written by Harris,
condition
Upham's Ralph Rotnem.
feel
Chronic Bear
a
Fund
delegates
A bear is one who feels bad when business is
good for fear he'll
worse when business is better.
M. I. T.'s 25th
Birthday
M. I. T. celebrated its 25th anniversary with the
publication of
A Series
New
a
16-page booklet, beautifully illustrated by George Geygan and ex¬
pertly written by Julie Wilson. Its contents may be suggested by the
following chapter headings:
of
York
Blazing the Trail
Stocks, Inc.
The
Jriumphs and Trouble.
Valley of Depression.
descriptive
available from your
or
It concludes with the
The War.
'
local
from
news
Huch W. Long
Company
and
incorporated
48
Wall
Street, New York 5
chicago
i.os
following:
the
Interna¬
Custodian
Funds
annual
report
of the institu¬
tion
in
which
report
that
o
"restrictions may be in¬
as
foreign aid declines,
resulting in a shrinkage and fur¬
tensified
f
was
ther distortion of world trade."
as
Deficit countries were
urged to
whether
an
exchange
examine
de¬
rate
Camille
Gutt
high
countries
export
prices
"impose
handicap on deficit
as they endeavor to ex-
Lower Court Decision
In Otis Case
U.
S.
Court
Upheld
Certificates of Participation in
tion itself.
INVESTMENT FUNDS
"So it usually is with the investor and his fears and
hopes of the
future. For several years now investors have been
living in fear of a
postwar business depression, similar to the experience after other
investing tkeir capital
IN
major
BONDS
wars.
"To date business has confounded most forecasters.
It has re¬
fused to go into a state of
collapse. True, business activity and prices
not at their levels of a
year ago but no one expected the Boom
(/Series B1-B2-B3-B4)
are
PREFERRED STOCKS
refused
to
enjoin the
National Association of Securities
Dealers, Inc., from acting on the
firm's suspension from the organi¬
zation.
The
case
between
firm
grows out of a dispute
the investment banking
and the
Kaiser-Frazer Corp.
in connection with an offering of
Kaiser-Frazer
in 1948.
common
The matter
stock
was
early
taken up
by the Cleveland district commit-
(Series K.1-K2)
i
COMMON STOCKS
(Series S1-S2-S3-S4)
EATON & HOWARD
EATON & HOWARD
FUND
local investment dealer or
.
\.
YOUR INVESTMENT DEALER OR
'
INCORPORATED
1924
Congress Street
k
committee
from
On the
this, the NASD district
suspended
Otis & Co.
membership for
period of
a
required informa¬
tion.
-
Otis
&
against
later
Co.
the
NASD
filed
suit
a
district
com¬
mittee's action and the SEC in the
District
Court
in
Washington
charging the SEC forced
committee
the
SEC
asked
the
of
suspend Otis.
denied
the
the local
NASD
to
sus-
Both the NASD and
this
Court
suit for lack of
charge and
to
dismiss
the
jurisdiction. Judge
James W. Morris of the U. S. Dis¬
trict Court, in
rendering the
decision denying Otis & Co.'s pe¬
tition, took the position that the
plaintiff
the
had
not
exhausted
yet
whereby
means,
within
the
NASD and the SEC, it could have
the
disciplinary action taken by
the
Business
of
the
Conduct
Cleveland
The
Committee
District
latest
case
Court
re¬
deci¬
of the NASD
Darden & Co. Opens
.
.
BOSTON
>
.
ALBUQUERQUE,
v/VAjA/
1949
;
Addison
/
333
West
in
prospectus from
Montgomery Street
SAN FRANCISCO
H.
Darden
N.
MEX.-—
has
formed
Darden & Co. with offices at 302^
your
investment dealer
or
PHILADELPHIA
4.>9*W|
of
two years unless in the meantime
it supplied the
TO
'
BOSTON
t.
basis
standing of the
TWENTY-FIVE YEARS OF INVESTMENT MANAGEMENT
24 Federal Street
tee
of the NASD which
alleged it
got no cooperation from Otis offi¬
cials, including Cyrus Eaton, chief
EATON & HOWARD
of Boston
Boston 9, -Massachusetts
'
/
;
PROSPECTUSES OF THESE TWO MANAGED INVESTMENT FUNDS MAY
Keystone Company
50
are
in local prices and
against Otis & Co.
j
BE OBTAINED BY
REQUEST 'TO
The
offset by rise
costs.
sion, therefore, does not alter the
STOCK FUND
Prmprctux from
four
accomplish,
out, if the expected benefits
viewed.
.<
BALANCED
will
stockholder in the firm.
of
Appeals denies
motion to enjoin NASD from tak¬
ing farther action to suspend
had
adjustment
its
since
purpose,
devaluation
achieves nothing, the report points
stated
serious
a
which
"A person
expecting to have to undergo a serious operation often
finds that the period of anticipation is more difficult than the
opera¬
most
warned,
"realistic" de¬
dollar
Anticipation Worse Than Realization?
the
"Unless positive steps are taken
to secure a better balance in In¬
ternational payments," Mr. Gutt
is sufficient time for seasoning, and every
Otis & Co. from its
indication points to M. I. T. as a
membership.
firmly and soundly established in¬
vestment operation.
It is operated by men who have spent most of
The United States Court of
Ap¬
their lives gaining experience and 'know-how' for
the job of invest¬ peals in the District
of Columbia
ment management. There is
every reason to relieve that the trustees on
Sept. 7 denied an appeal by
will follow in the
future, as they always have in the past, the excel¬ Otis &
Co., investment bankers
lent advice by the
Massachusetts Supreme Court to conduct them¬ of
Cleveland, Ohio, to overrule a
selves 'faithfully and exercise a sound discretion'."
previous decision of a lower court
eystone
be
tary Fund the
for
years
would
report,
feasible remedy,
ficiencies. The
nation,
and the less likely it will be to succumb to the 'isms' now
causing most
of the world's difficulties.
Because of the increased per capita na¬
tional income, the
average family today has a far bigger stake in the
United States than it had 25
years ago when Massachusetts Investors
Trust
presented its entirely new investment vehicle.
or devalue their curren¬
Devaluation, according to
tional /Mone¬
ac¬
available to everybody, it should stimulate further sav¬
ings and broaden the market for common stocks to an extent never
before anticipated.
"Twenty-five
the
the
are
profits
cies.
remedy
"This in turn will broaden the
public's sense of responsibility
duty to see that nothing is done to threaten the system that makes
this possible.
The more capitalist-investors, the stronger the
ancei.es
mem¬
the
widespread ownership by the public of U. S. industry. As the
spreads that equal investment opportunities and chances of
success
48
currencies
and
\
pand their exports to the Western
Hemisphere," and such countries
must either cut down costs and
of
ber nations of
suggested
"Probably the most significant advantage of the growth in
ceptance of Massachusetts Investors Trust's original idea lies in
more
the
valuation
Peacetime Problems.
dealer,
Monetary Fund Suggests Devaluations
Camille Gutt, Managing Director of the
International Monetary
Fund, a twin organization of the World Bank,
apparently backs up
the devaluation views of Mr.
Eugene R. Black, President of the Inter¬
national Bank, expressed in the address which
appears on the cover
page
of
this
issue. Mr. Gutt
Definition of
Investment
material
Hiccup Cure
submitted to
Diversified
investment
George Putnam Fund bulletin,
These decisions
could have an important effect on our market
depending on the way
the problems are settled. Stocks have advanced sharply
during the
summer with the industrial
average going up over 20 points. There
has been a healthy amount of skepticism as is shown
recently been selling stocks
are
completed while such
^Inquire about=
other
a
low
by the largest
and
the actual realization."—From
a
to
want
Bob Meier, 23-year-old clerk, had suffered from
hiccups for eight
priced shares while the higher grade
days when a mysterious stranger appeared at his home. "Shh!" the
stocks have had only moderate readjustments.
When one considers
man said.
"Don't tell anybody I did this."
that these low priced shares sold at about three times their prewar
From a black bag the stranger took two black candles and
levels during the enthusiastic trading early in 1946 when the high
lighted
priced stocks were only one-third higher than their prewar levels, them. Then he took a wet noodle from the bag, tied a string around
it is not surprising that the market had to adjust its sights
during the it and draped the string over Mr. Meier's head with the noodle hang¬
return to a peacetime competitive economy. Fortunately these inter¬ ing between his eyes. The clerk looked at the noodle
cross-eyed and
nal adjustments have placed the market in a much healthier condi¬ laughed. His hiccups stopped.
tion than it was in during 1946.
The price relationships of the differ¬
"It's a sure cure," the stranger
said, "been in the family for
ent quality groups is now more normal.
years." Then, without identifying himself, the man blew out the can¬
September is a month when the market often makes up its mind dles, put them in the bag and drove off in a big black car.
and starts important moves.
Four of our 13 bull markets have ended
Dividend Trends
during this month. While no bull markets have begun in September,
this is probably due to the fact that the
majority of them have started
"Dividend trends are getting a bit mixed. Last week H. C.
Bohacfc
in June, July or August. Fortunately business
activity has reversed Go. declared a dividend on its common
stock, the first it has paid
its downtrend and during August had its first
upturn since last fall. since 1933. Also last week:
Botany Mills 'took no action' on its com¬
Because there are still some industries that could stand
greater ad¬ mon dividend; R. G. Le Tourneau,
Inc., maker of earth-moving ma¬
justments than they have had in prices and production, it is likely
chinery, took no action on its $4 preferred dividend (Le Tourneau
that there will be further testing of the business structure
early next has paid nothing on common since June, 1947). One of the
comfort¬
year.
But there are some economists who believe the worst has al¬ ing things about a diversified
mutual investment
company is that
ready been seen.
though its dividend rates fluctuate, it keeps right on
paying dividends
During the month there should be a decision on the steel wage to its shareholders year after year."—from "These
Things Seemed
question! and the Anglo-American dollar conference to be held in Important," issued by Selected Investments Co. of
Chicago.
Washington starting Sept. 7 should lead to some action to help the
substantial
short interest since 1932 and by the fact that the smaller traders have
Prospectus
imply for
do
we
points in the Dow Jones Industrial average with the high point
of 193.16 only 19%% above the low point of 161.60.
There have been
serious situation that has developed in Great Britain.
BULLOCK
CALVIN
One Wall Street
but
31.56
120 BROADWAY, NEW YORK 5. N. Y.
ment
us
an area as
from
SECURITIES
RESEARCH
to
mean
minute that all of our problems
register the thought that at this
stage of the operation the anticipation has definitely been worse than
behind
are
Market Review
.Prospectus-upon
was how to make the necessary
normal pace without getting into
a more
serious trouble.
Darden
&
2, PA.
Central
the
Avenue
securities
was
to
engage
business.
Mr.
formerly with Fridley
Hess in Houston and the Scott
Corp. of Albuquerque.
THE
Number 4838
Volume 170
COMMERCIAL
&
FINANCIAL CHRONICLE
(1049)
17
it would command confidence be¬
Probable Effects of
Dr.
Einzig
,
1
.
*
minded."
2 international position.
*
..
its
it
formed
-
\<t>-
.
part of a com-
ported
preh
would devalue their .currencies to
nsive
e
scheme pro-*
a
viding
only
sqlu-
a
tion
the
to
less
extent
than
imports
which
of
problem of the
-
countries which
from
the
would
sterling.
sterling
rise
The
prices
in full
pro¬
dollar gap.
And intelli¬
portion to the devaluation of ster¬
ling would be those derived from
countries which, like the United
gent British
States
opinion is be¬
stain
ef o
i
m
n
?
In¬
g
Canada
valuation-
not
it
likely to rise in
devaluation
a
ity for effecting
Paul
Einzig
/A;/" Ayr
"■
generally
was
of her
ment
assumed
that Sir Stafford Cripps, in cate¬
in relation to
the United States dollar: Together
with Sweden, Canada raised the
gold
value
her
of
ties to which
of
consequences
of
-What
devalu¬
a
sterling.
,
interests
most'people
whether it would result in
mediate sharp rise in the cost of
living and in
tion. There is
the cost of produc¬
widespread theory,
a
Even
;
if
the full
knew
we
currencies
that
would
list
be
de¬
is valued and the extent of their
im¬
an
>
of
de¬
valuations, we should not: be in a
position to calculate the exact ex¬
tent
of
effect
the
the
on
cost
of
British imports. For as a result of
held even in quarters which ought
_
a .devaluation
to know better, that in existing! are
,
of
conditions
full
British purchases
likely to be shifted, to an un-employment Joiown extent, to countries which
bound to catch
up with
depreciated value of sterling
in a very short time, so that the
stimulating effect of a devalua¬
^xtept.
tion
tent
wages are
the
Britain's
on
port would
soon
capacity to ex¬
be nullified by a
corresponding rise in the cost of
production. Consequently, the argument concludes, in a matter of
months Britain would be
off
so
she
as
badly
before devaluation,
that She would have to repeat
as
was
devalue
ould
to
considerable
a
Although there are too
jmany unknown factors, it is pos¬
sible to suggest that the full ex¬
of
a
devaluation
of
sterling
would affect
only a small propor¬
tion of essential imports. For this
the increase of the cost of
living would only amount to a
* ^ proportion of the
"
*
small
percentage
of the devaluation of sterling. If
reason,
sterling "should
be
devalued
by
the process.:V.
■,- /;..
' •y
then the immediate auto¬
25%
impossible to matic effect on the British cost of
form a definite opinion about the living should not be higher than,
effect of a devaluation of sterling say, 5%. There would of course
without knowing its probable ex¬ be secondary effects, as and when
tent, and without knowing which the higher cost of living in other
v
It
is
of
course
currencies
and
ample
follow
what
to
reasonable
seems
all
would
to
its
ex¬
It
extent.
assume
that
Sterling Area countries would
Britain's example, in the
their currencies fol¬
lowed sterling in its fluctuations
during the 'thirties:
It is also
probable that most Western Eu¬
ropean
tion
countries—with the
Switzerland
of
and
excep¬
possibly
would also devalue,
though it is difficult to forecast
whether their devaluation would
Belgium
be
—
equal
that
to
of sterling,, or
more. Among the Latin
American countries the Argentine
less,
or
has already
announced her inten¬
tion of following the example
of
sterling, and in all probability a
number of other currencies will
devalued
be
immediately
after
the announcement of a British de¬
valuation./
....
y-
; .
Oj::-",;
rise
total
Britain. Even
this indirect effect,
allowing for
10%.
their
affect the price
their exports to
of
the
way as
devalued
currencies would
follow
same
which
countries
should
level. This solution would
individuals
the International Monetary
Fund,
it would be en¬
tirely out of keeping with the
economic philosophy of a Social¬
and
ist Government. The idea that the
set
in any
that would
rate
a
case
free
market
especially
really free,
capital move¬
on
ments would have to
John F.
fluctuating sterling ex¬
change rate would make for in¬
any case, a
choice of
the
So
markets:
world
evils.
'
'"
■'
""
'
"
N. T. Robertson With
who
stock
A
r
:
insurance
chief
underwriting
fifth.
His
is also
a
countries
with
their
value
for
a
that
served
Robertson
Mr;
became
of National Liberty In¬
surance
Co.
member
of
was
When this became a
the
Home
firm
in
1931 during
the financial
of¬
crisis in Germany, he opened
fices
as
reinsurance specialist
a
In 1942 he became
in New York.
a
few years ago.
I
and
In
the
marking
25th
anniver¬
York
firm
the
ducts
Ingalls (&
of
John
as
curities
general partners of
of the' two
change.
founders and present
senior part¬
Daniel
Ingalls,
Both
ners.
Jr.,,
new
associated
been
Marine Insurance Co.
registered
with the firm
representatives
-
listed
cost
the
borne
currencies.
in
operation
of
a
;;
Other
L.
holds
partners
Monroe,
NEW ISSUE
would
be
of
however,' is
the
vicious
The Hartford Electric
the
spiral
that would be started by a
devalu¬
ation. That spiral would not nec¬
essarily come to a halt after de¬
valuation has produced its imme¬
diate
.
«...
v
r
secondary effects. On
hand, it must also be
remembered that the rise in the
an offering
buy,
.
■
y
.'
'
"
.
■
A/'-
Light Company
3.90% Preferred Stock
;
.
/
.-
160,000 Shares
;
10%. What ought to be
mind,
V:. ■> >
••
'
;
Cumulative, Far Value $50 per Share i
\
,
and
other
cost -of
living
would
not
y|,
Price $50
:
per
plus accrued dividends from
neces¬
Share
;
.
September 1, 1949
*
This
bulk
of
means
of
that the cost of the
British imports in terms
sterling might not increase in
sarily be followed by a corre¬
sponding rise of all wages, social
service charges and other items
of; the
this
issue
as
may
legally offer these Shares under tfte
dealers participating in
securities laws of such State.
cost of production.
of a devaluation.
sterling costs would actually I Allowing for all • considerations,
in the case of imports from
and
assuming that the /present
countries
which would * devalue, overvaluation of
sterling must be
their currencies to a larger ex¬ in
?the neighborhood of 10% to
tent than Britain, as some of them
15%," it is permissible to conclude
probably would. It would remain that a devaluation of 25% would
unchanged
fox goods imported not allow much safety margin for
from the Sterling Area, and from the operation of the vicious spiral.
other countries which would de¬ In order to ensure the success of
value their currencies to the same
the operation, if it Is to be under¬
extent as sterling, r It vkmld rise taken at all, sterling would have
to be devalued to a level at which
relatively slightly for goods imconsequence
Their
be obtained in any State from such
Copies of the -Prospectus may
»
-
/
Putnam & Co.
Chas. W.- Serauton & Co.
; j
BIyth & Co., Inc.,
,
V
Drexel & Co.
White, Weld & Co.
■
September
13/1949
"
-
i
*
t
:
?
Smith, Barney & Co.
Corporation *
Incorporated
Eastman, Dillon & Co.
Union Securities Corporation
^
Coffin & Burr
Incorporated
*"
\,
; ~
Stone & Webster Securities
•
Harriman Ripley & Co.
/,
A
Kidder, Peabody & Co.
Estabrook & Co.
U•
fall
••
t,
is
,
include
Warner
Thorvald
Jr.,
Hinchman,
as
matter of record only and is under no circumstances to be construed as
sale or as an offer to buy, or as a solicitation of an offer to
any such Shares. The offering is made only by the Prospectus.
•
se¬
member¬
W.
H.
since Tenney and Chester C. Veldran.
of these Shares for
devaluation
living,
of
that
In
This appears as a
de¬
busi¬
unlisted
and
also
and
possibility that
would
in
con¬
Kent, Samuel H. Watts, Ralph P.
have
^members
five
ship on the New York Curb Ex¬
T/Snyder, Jr., and Roscoe
sons
C.
a
partners
as
industrial, public utility,
railroad,
City, Sept. 15 announces the
admission
Snyder, after
general brokerage
a
in
ness
New
Broadway,
100
T.
association
Struthers & Hiscoe. The firm
Stock Ex¬
New York
the
ber of
John
year
of its iormation-as a mem¬
sary
President of the Secured Fire and
-
.
.
Celebrate 25 Years
change,
Fire Insurance
Germanic
"
.
t^eir discharge from the Armed
Services
Ingalls & Snyder was organ¬
ised in 1924 by Roscoe C. Ingalls
Snyder,
Following liquidation of this
*
>
•
•
newly
Co.
..
bad de&l.—John Foster Dulles
a
&
Group, he
made President of the
formed
Fore
underwriting
and
Vice-President
manager
America
everyone
V
/
trend, unless stopped, will
seems to us to make; an excellent beginning;
explicit statements can, of course, await fur¬
developments.
:
i
•
Continental .was
.
the
merged vinto
Group,
f'-L
Insurance Co. for two
When
years.
ther
President of the Amer¬
ican Eagle
■
This
more
having
after
company
as
I
candidate for the Senate this autumn.
In 1921 he became
Co.
vs
exceed
not
which
effect
the
less than
the
be
for
Texas
of
officer' of
>
\ :
f
in announcing his willingness to be the Republican
:
in insurance be¬
career
'■
I know that the present
"
-
and
'
'
the "fair deal."
or
1904 as a field man in
Continental Insurance
President
in
gan
-
*
.
Proposals which exalt the State at the expense
of the individual I shall be against. And I care not
whether these proposals carry the labkl of "dicta¬
torship of the proletariat"- or the "welfare state",
>
Mr.
companies
four
•
.
*
s|c
*
".
:' •'
•
-
-
President of
has been
Robertson
■
,
*
re¬
man,
sjc
,
■;
There
on,
insurance
sic
A'.Vl believe that the trend; to statism needs to be
stopped now and here.
;
specialist.
veteran
sje
:•...
■
,
Shelby Cullom Davis
Norman T. Robertson,
cen-
governments are actually
pro.ducing opposite results.
- ;
assuming an almost total responsibil¬
;
undervaluation of ster¬
ling would be the smaller of the
two
powerful
our own,
tral
ity for public welfare. To that end it commandeers
much of what the individual produces and extends
its detailed controls into every aspect of life.
In
consequence, more and more individuals are grad¬
ually losing" both the incentive and the means to
; develop the qualities
that make him worthy.
fixed rate involving a
a
moderate
Dulles
The State is
stability both within * Britain and
the
enough self-control to
present enjoyment to
aside for further security;
,
„
in
all
resourceful
be
to
human
want
up
cluding
In
continue.
the
we
cooperative and compassionate,
fearing God and loving neigh¬
bor. But in every country, in¬
the
as
be
would not
restrictions
for
give
tenable
be
would
market
is open to doubt,
and
self-reliant; thrifty and pos-;
sessed of
arrived at in
be
of
worth
the
personality,
United States Government and by
and
There is
We believe in the sacredness
and
strongly opposed both by the
prices in the United States would
be reduced in order to compete
case
dedicated.
was
-
gorically refusing even to discuss 1946, only to regret. it forever cently retired as President of the
Secured Fire and Marine Insur¬
it, had said the last word on it. after, and it is probable that on
ance Co., Indianapolis, has become
During the course of August, the occasion of an all-round cur¬
associated
with ' Shelby
Cullom
however; there has been a grow¬ rency adjustment this mistake
Davis & Co., 110 William Street,
ing tendency to examine the pos¬ will be repaired.
:
New York City, as an insurance
sible
ation
nation
danger within. In every nation in the world there
is a growing tendency to exalt the State and to treat
the individual as unimportant.
in
currency
our
advice
of
minor adjust¬
a
dollar
the.
many
that
are
Canada would take the opportun¬
Dr.
even
discussed,- because
of
sterling, for the chances
recently
subject
was
not
are
proportion
conscious. Un¬
til
altogether from devaluation.
Evefi the "substantial imports from
creasingly de.-.
the
Switzerland, would ab¬
or
from
own
be
LONDON, ENGLAND.—At the time of writing, "no devaluation"
is still the officially declared policy of the British Government. But
in well-informed circles the impression is gaining ground that Britain
might, after all, be willing to discuss the possibility of a devaluation
if
the-British
follow
Government
freely as it did during the 'thir¬
ties, in order that it should find
Sees no likelihood in future of fluctuating
free sterling market.
■ t
.
..
.
would
cumstances
Beginning
^Foreign policy will not * * * preserve the liber¬
quarters that,
instead of devaluing the pound,
it. should be allowed to fluctuate
- opinion
in Britain is becoming
Says leading nations, other than U. S.,
Switzerland and Belgium, are likely to follow example of sterling,
so if devaluation
occurs, it may not affect substantially Britain's
.
One thing is certain. In no cir¬
given
intelligent
reports
"devaluation
^
A Good
rate would allow a
new
'reasonable safety margin.-
Sterling Devaluation
By PAUL EINZIG
its
cause
V
.
-
-
^
e
«
Cooley & Company
'
r
....
«-
u,—
.
*
-
-
.
>
,
-
-.
+
18
THE
(1050)
COMMERCIAL
&
FINANCIAL
CHRONICLE
NYSE Members to Vote
Export-Import Bank
Canadian Securities
Emil
Grants $20 Million.
Loan to
By WILLIAM 3. McKAY i
anticipated the U. S.-British-Canadian high-level Washington
parley served its purpose admirably in a political sense, but as far
as providing a practical immediate solution of the
sterling crisis its
thorizes
amendment
to
Exchange, which will be voted
Constitution
of
New
summar¬
York
Stock
by entire membership and, if
approved, will become effective on Nov. 1.
delay, it au¬
$20 million
of
credit
Incorporation Plan
on
Schram, President of the Exchange, issues statement
izing proposed
Yugoslavia
After considerable
As
Thursday, September 15, 1949
According to
on
statement issued by Emil
a
the New York Stock
Schram, President of
Exchange, the Board of Governors of that insti¬
largely for approved purchases
Sept. 8 approved and ordered submitted to the
membership
was negligible.
The only tangible benefit of real conse¬
for balloting a constitutional
in United States.
amendment which would permit mem¬
arising out of the confer-^
ber
firms
of
<&—
ence was obtained
The
by Canada in of the European economy and
Export-Import Bank an¬ the Exchange
or
the
appointed an officer without
shape of $300 million for proper balance of trade between nounced on Sept. 8 authorization to
incorporate,
the
wheat supplied to Britain to be Europe and North America. This of credits of $20 million in favor
prior approval of the Ex¬
under certain
change. Every director, principal
paid with E.C.A. funds instead of view has been completely endorsed of the Government of Yugoslavia
tution
on
contribution
quence
■
definite
from the United Kingdom's dwin¬
dling hard-currency reserves. To
this extent, Canada is relieved of
doubts concerning this important
item in her U. S. dollar balance
of
by the World Bank and thus any
hope that was entertained follow¬
ing
the
British
-
Canadian
-
ling could be restored without de¬
valuation
payments, and this will com¬
pensate to some degree the loss
tered.
of other E.C.A. offshore purchases
in the Dominion.
has
That
U. S.
conference that confidence in ster¬
has
been
rudely
shat¬
matters
Britain
stand
now
opportunity
an
might
that
had
loan
been
under
contempla¬
Of the total of $20 million to be
granted, the Board authorized the
establishment
this
at
time
of
gaged
exclus¬
ively
in
s
as
brokers
or
for the rehabilitation of the min¬
bership in the
fantastic ideas such
ing industry of Yugoslavia.
Exchange
any
as
the marry¬
the World Bank and Fund.
In any
ing of the dollar and the pound event the principal normal func¬
Or unilateral action on
the part tion of the Fund at its annual
of this country in raising the price meeting is the examination, and
of gold were only born of des¬ if necessary, the revision of un¬
peration and were never in the realistic exchange parities. Such
realm of reality.
While out of an opportunity should not there¬
.
deference
to
British
sensibilities
the
subject
tion
scrupulously avoided, it
patently impossible that any
was
of
sterling
devalua¬
was
constructive
to the British
answer
economic problem could material¬
ize as.a result of this conference.
Happily,
however,
much was
achieved
that
augurs
well for
the future. - The atmosphere of
fore be permitted to pass and it is
difficult to
conceive that Britain
than to follow
otherwise
do
can
of
world's
the
foremost
would
be
subject to further un¬
developments.
When
favorable
justment has caused an avoidable
crisis, perhaps more timely action
any lack of sympathy and under¬ on the part of Canada would pre¬
standing on this side with regard vent any similar experience. Hav¬
to Britain's present dire predica¬
ing in mind also the implementa¬
ment. Over the long range every tion of the President's Point
Four,
possible concession has been made U. S. investment in nther sections
to enable the United Kingdom to of the British Commonwealth af¬
achieve economic stability.
Con¬ ter
sterling
devaluation would
sequently there is now less to fear possibly prove more
attractive
-There
,
is
now
concerning
disastrous
cratic
little question of
the possibility of a
cleavage of. the demo¬
world
into
3%%
than
at
two opposing
Fundamentally
Canadian
risks
undertaken
suspect level of exchange.
a
'
*
*
for
and
of
the
an
United
equipment
million
$12
interest rate
of
payable semi¬
annually. This credit will be amor¬
per
annum
tized in 20 equal semi-annual pay¬
or
hold
At least
change.
stock
Emil
Schram
due and
payable
under the general
The credit will be
Dec.
31, 1950.
remaining
The
credits
will
to
be
time
established
until
from
services to
and
be financed
under such credits shall be agreed
strictions
least
,
Non-voting
not
stockholders
members
allied
as
necessary to continue
to exercise the same control over
or
who
mem¬
bers, would have to be approved
in
the
fashion
same
limited
as
Also,
junior officers would have to be;
passed on by the Exchange.
The
Exchange would reserve
right to limit the number of
the
stockholders.
A
June
30, 1950, corporations are
permitted, the
the items of materials, equip¬
Exchange would impose such re¬
ment
voting
at
partners in member firms.
Nov. 1.
on
According to Mr. Scram's state¬
ment, the permissive incorpora¬
tion proposal may be briefly sum¬
marized as follows: If member
of
of
be
to
would become effective
available until
million
holdings
have
are
Summary of Proposed Amendment
$8
His
policies of the
Exchange.
If approved by the
membership the amendment
July 31, 1951.
on
member ©f the Ex¬
a
would
firm.
restrictions and
same
director would
one
equal, percentage-wise, to the in-"
terest now required to be held by
an
Exchange member who is a
general partner in a member
mem¬
under these
amount
have to be
dealers,
to
stockholder
own voting
or both,
in
approved by the Ex¬
change.
ments, the first of Which shall be
as
In this event the present diffi¬
cult Canadian economic situation
terms
credit call for
•
bitterness and recrimination that consideration is given to the Brit¬
previously had jeopardized U.S.¬ ish precedent, where delay in
British good relations has been
making an overdue exchange ad¬
dissipated.
The
time
financial authorities.
credit
materials
States
the almost unanimous recommen¬
dations
million
$12
a
voting
required to
non-voting stock,
an
the
ecurities
business,
and
would be
and
all-embracing solu¬ never recur to take the momen¬
tion could possibly be
devised tous step of currency adjustment
under the circumstances was quite with the fullest moral and mate¬
inconceivable.
Hopes pinned on rial support of this country and
;
officer
purchase in the United trictions, and
exportation to Yugo
which
would
slavia of essential materials, equip¬
enable
nonment and services to be approved
member
by the Bank. This controversial houses en¬
States
tion for several months.
As
re-
the
for
stockholder
in
member
one
corporation could not be
holder
in
poration
another
or a
stock¬
a
member
partner in
cor¬
member
a
firm.
by the Bank and Yugoslavia. the
corporation, its officers, di¬
According to a statement of the
Non-voting stock could not re¬
rectors,
stockholders
and
em¬
xport-Import Bank, before the
ployees as it now does over the ceive preferential dividends in
war, Yugoslavia was one of the
excess
of 6%.
It could receive
member
firm, its partners and
eading
producers
of
bauxite,
additional dividends out of earned
upon
mercury, copper, lead, zinc, and
other non-ferrous metals. Much of
the
equipment in the non-ferrous
mines
is
damaged,
obsolete.
out, or
damage to
worn
Tremendous
employees.
would
The corporation
be
subject to at least as
strict regulations for the prot£
tion of the public as is the mem!
firm. In addition, there would be,
•
member corporations.
of non-ferrous minerals.
The
*
United
States
is
No
in*
stockholder
member
a
corporation could transfer, sell,
initially, greater capital require¬ assign or in any way encumber
ments
and
required bonding of or pledge his stock in such corpo¬
of the mines and
their
equipment occurred during - the
officers.
'V-;'-"'r:\:
war. The equipment to be financed
under
the
Only organizations engaged pri¬
Export-Import Bank
credit is essential to the mainte¬ marily in the securities business,
nance
of Yugoslavia's production as brokers or dealers, could be
many
surplus on a parity with or after
dividends on common stock.
Therefore,
banks, investment trusts and in¬
surance companies would not be
ration
without
the
prior written
approval of the Exchange.
The stock of
deceased
be
withdrawing
a
stockholder
offered
to
the
would
or
first
corporation
or
its
remaining stockholders; there¬
if not purchased by the
During the week there was al¬
U.S.-British economic and politi¬
Also, non-member se¬ corporation or its remaining stock¬
most a complete state of inertia in ferrous metals. It is expected that eligible.
cal unity is assured, but there still
the external section of the bond the acquisition by Yugoslavia, of curities corporations would not be holders, such stock could only be
remains
the unresolved question,
market and prices were inclined new mining equipment from the eligible if their stock'is publicly sold to a person or persons ap¬
economic
of
the
This
camps.
immediate
sterling
.
■;
consumer
crisis.
thorny problem has been
The
lower.
the
other
hand
internals
advanced
on
frac-
placed before the proper and
com-, tionally; in view of the probabilpetent authority on foreign ex- ity of sterling devaluation it is
change matters—the International highly remarkable that obligaMonetary Fund. With rather un-jtions payable in Canadian funds
expected forcefulness this body
(still remain curiously immune
has unequivocally ruled that de- from
this
depressing influence,
valuation
of sterling and other Free
funds
likewise
remained
European currencies is an essensteady but there was a greater
tial prerequisite to the restoration
supply for future deliveries. Stocks
after
earlier irregularity subse¬
quently followed the upward trend
omy
vide
ferrous metals needed for
import
into the United States and other
countries.
Ventures
were
the
market
meeting of Gaspe
Limited
held
in
reelected
company
directors
for the current
of
the
Payette,
President,
re¬
viewed the company's affairs for
the past year, with particular em¬
phasis on the forthcoming aci¬
dizing operations of three of the
company's wells on the Gaspe
Peninsula. As this is a highly spe¬
cialized operation, arrangements
have been made with Dowell
Inc.,
a
subsidiary of the Dow Chemical
Company,
their
NEW
WALL
YORK
5,
N.
to
do
this
special
oil
well
work
with
cementing
equipment.
STREET
Y.
Stanley Cooper Adds
(Special to Ths Financial Chhoniclx)
WORTH 4-2400
NY
1-1045
.
>
Los Angeles Bond Club
Nominates Phillips
LOS
CINCINNATI, OHIO—Raymond
A. Hobson is with
Stanley Cooper
Co., Inc., Fountain Square Bldg.
&
Co.,
for
year
President
for
beginning Oct. 1.
Others named for the slate of of¬
Charles F. Sill, Francis
I. du Pont & Co., Secretary; Jo M.
Roussell, First California Co., are
named
for
directors.
committee
of
were
the
changes:
J. F. Reilly & Co. will dissolve
Sept. 15.
Carl
H.
Langenberg, limited
partner in Reinholdt & Gardner,
died Sept. 5.
,<
John
S.
McMillan.
Dempsey,
Tegeler & Co., died Sept. 2.
William A. Neubauer. partner
in
Lamson
Sept. 2.
Bros.
&
Co.,
died
corporation
would
on mem¬
deprived
its
quired
by anyone other than a
member, allied member, or the
of
deceased
a
member
or
ber firms.
allied member stockholder
The corporation would be re¬
quired to have a so-called surprise
non-voting stock of the cor¬
poration should be acquired by
anyone without the approval of
the Exchange.
cial
to
once
in
answers
each
year,
each year to
submit
finan¬
annual visit by an Exchange
the
are
same
as
The corporation would have to
its officers, which is a re¬
quirement not possible to impose
upon firms with respect to their
general partners.
corporation
to
would
be
per¬
have
voting and non¬
corresponding
to
general capital and limited capital
in a partnership.
Voting stock would have to
allied
or
required
be
with
the
Exchange re¬
quirement that general capital in
a member firm be at least 55% of
sever
stockholder, if
This would be
in line with the present power of
the Exchange to order the discon¬
tinuance
partner
of
any
after
connection of a
to such a
coming
conclusion.
Every employee of the corpora¬
tion
whose
those
the
the
a
of
duties
to
correspond
registered employee
have to be approved by
a
Exchange, which is presently
with such an employee of
case
member firm.
Any stockholder, officer, or di¬
rector, who is
the total capital.
a
member
all
corporation,
to
the
tion be continued.
would
rep¬
of the capital
(2)
the Exchange found it was not in
its best interests that the connec¬
stock,
line
member
requirements connection with
those imposed on and cease to be
bond
voting
A
would
which
member firms.
or
any
questionnaires, and be subject
an
in
The New York Stock Exchange
has announced the following firm
a
presently imposed
resent at least 55%
Exchange
Weekly Firm Changes
member
A
estate
& Co.
New York Stock
v
be
those
nominating mitted
Carlton H. Mer¬
rill, E. F. Hutton & Co.; Joseph
L. Ryons, Pacific Co. of California,
and Murray Ward,
Hill, Richards
proved by the Exchange,
member corporation
by the Exchange of
privileges if (1) the corpora¬
tion's voting stock should be ac¬
A
Members
after,
paid-in cap¬
ital and surplus 20% greater than
than required of a member firm.
The maintenance capital re¬
quirements would be the same as
are
French, Blyth & Co., Inc., Treas¬
urer; the officers and Stuart
a
would have to have
audit
ANGELES,
fiscal
ficers
year.
Paul
TWO
v. :
"r:"
Initially,
examiner,
under
Montreal, Canada, Paul Payette,
John Vanier, Armand G.
Boisclair,
Sidney D. Blue and L. Demers
INCORPORATED
of Yugoslavia, but will pro¬
an important source of non-
1
held.■
econ¬
Witter
York
At the annual
A. E. AMES & CO,
of the
leadership of the gold and base-
Oil
CANADIAN STOCKS
non-
metals issues.
GOVERNMENT
CORPORATION
large
three
New
Gaspe Oil Reelects Dirs.
MUNICIPAL
a
of
States will not only assist
in the rehabilitation
the
PROVINCIAL
importer
CALIF.—The
Bond Club of Los Angeles has
nominated Ralph E. Phillips, Dean
of
CANADIAN BONDS
United
and
a
member
or
allied
member, would be liable to the
same
discipline and Exchange
cipal officers would have to be
penalties for the acts of the cor7
members or allied members of the poration as for his own acts.
Voting
stockholders
Exchange
and,
as
prin¬
and
such,
would
The
Exchange's
approval
have to devote the major portion
member
of
stitute only a revocable
their
time
to
the
business
of
the corporation.
Every
be
a
and confer on the
director would have
holder of
person
corporation would
voting stock.
could be elected
a
to
No
director
right
privilege
any
whatsoever to continue
a
con¬
corporation
or1 interest of
ber corporation.
of
no
nature
as a mem¬
«}ttfr*r*H)
THE
Number 4838
170
Volume
COMMERCIAL
FINANCIAL
&
Ira
(1051)
CHRONICLE
19
Haupt Uses "Railroad" lo Tell Inveslmenl Story
Member Firm Sets Up Replica of Brokerage Office at County Fair
Stock Exchange
YONKERS, N. Y.-—Officials of
Ira
JMkrMisiw**i^»<i&irn*4cl*<t*.*tt
member firm of the New York Stock Exchange—
a
Haupt & Co.-—left the canyons of Wall Street and
"borrowed"
one
of the nation's
The lower court has finally handed down a decision in the suit
of the Western Pacific Railroad Corporation (the old holding com-
•pany) against Western Pacific Railroad Company, the operating com¬
pany over which one was entitled to certain tax credits accrued many
years ago. 'Judge
with
pressed
the
Goodman, in San Francisco, was obviously not im¬
claim' of either of the litigants to the money,
amounting to several million dollars.
credit should
not have
been allowed
He
that the
commented
tax
in the first
place and that the
As that question had
government should be entitled to the money.
already been settled by the proper
powerless to make any such award.
authorities,
however,
be
was
The only question before the Federal Court was which of the
two companies was entitled to benefit from the provisions of the tax
law which allowed the credit at the time of reorganization of the old
operating company. In this it was found that the old holding company
could not collect—that the money belonged to the operating company.
The operating company had previously set up a reserve of some
$10 million, invested in government bonds and not included among its
current assets.
Press reports state that'the corporation intends to
appeal the decision to the higher courts so that the matter can not
be considered definitely settled even yet. If the higher courts do up¬
hold the decision, however, release of the reserve funds will go far
toward
providing
the
for
means
the
road's
program.
ambitious
property
-
•
Also
in
the
recent
news
was
announcement
of
the first of
an
anticipated wave of bond extension proposals. This came from Ban¬
gor & Aroostook. All of the company's non-equipment debt, amount¬
ing to $12,465,000 as of the end of last year, falls due in 1951. Obvi¬
ously cash payment of this full amount would be out of the question.
Rather than take
a
chance
on
bond market conditions at the time be¬
ing favorable to a public refunding operation, the company has de¬
go ahead at this time with a plan offering holders an ex¬
tended maturity for their present holdings.
cided to
The RFC holds $3,600,000 of collateral 4s, 1951, reduced from
$3,800,000 at the end of 1948. Of these, $600,000 would be paid in
cash on consummation of the plan, the payment representing antici¬
pation of 1950 and 1951 sinking fund requirements. The balance of
$3,000,000 would be extended 10 years, to July 1, 1961, with the inter¬
est rate unchanged. There are outstanding with the public $8,665,000
consolidated 4s, 1951, part of which are convertible. Under the plan
the publicly held bonds would be extended for 25 years, to July 1,
1976, and the interest rate would be increased to 414%.
The
plan would provide for particularly liberal sinking funds.
a fixed sinking fund of $150,000 a year for the collat¬
There would be a further cumulative contingent fund of
$150,000 a year out of net income in excess of $650,000. This would
There would beeral 4s, 1961.
also be for the benefit of the collateral 4s.
These combined sinking
funds would be sufficient to retire the entire issue by maturity. Start¬
ing in 1952 the 25-year 414 s would have a sinking fund of 25% of
excess of $800,000 until all of
tl\e collateral 4s are re¬
tired. After that the 414 s, 1976, would get the sinking fund originally
applicable to the collateral 4s except that the entire sinking fund
would be contingent on earnings. No dividends could be paid while
there were any unpaid accruals in the sinking fund. The plan is a
realistic and eminently fair one and its success appears assured.
net income in
Two other plans
providing for bond extensions are expected in
the near future. Western Maryland faces the maturity of most of its
non-equipment debt in 1952. It is expected that holders of these bonds
will shortly be offered a term bond (probably 25 years) with coupon
rate unchanged but with a fairly liberal sinking fund. In the process
it is expected that all other mortgage bonds except the 4s, ,1952, will
be paid off in cash so that the lien of the new extended bonds can
be broadened to cover the whole system. As in the case of Bangor,
it is expected that this proposal will be made under the Mahaffie
Act which eliminates the problem of minority holdouts.
Illinois Central's long expected plan is looked for later this week.
It, however, will presumably be entirely voluntary and not under the
The road's
Mahaffie Act.
ule is
once
formidable 1950-1955 maturity sched¬
longer considered any serious problem.
no
Nevertheless, it is
leading railroads to
use
in telling the story of investment to
County Fair here.
The brokerage firm, recognizing
the
growing need for broader
public understanding of the se¬
curities business, has set up an
exhibit at the fair, which opened
today, in
the form of
regular
a
a
is centered around
railroad
miniature
system,
approximately
business would be better under¬
or a return of 6.7% on
stood.
'
*
investment.
lend
authenticity to this
Representatives of Ira Haupt
received
dividends,
the original
To
and Chicago, operated the scaledrailway system for on¬
designed to show the down
fair's visitors how the Pennsyl¬ lookers.
The
exhibit also features the
vania Railroad actually operates,
and
how its operation is made stock certificates of other leading
possible • through public invest¬ corporations with similarly illus¬
trated investment and
dividend
ment in its securities.
worked out in collaboration with
Lionel Corp.,
the
Above
display hangs
railroad
sign calling atten¬
were
Elsewhere
in
the
on
hand
to
explain to vis¬
meanings of the "mys¬
terious"
symbols
on
the stock
ticker tape, how
stock transac¬
itors
tions
the
actually
are
handled,
wealth
held
people.
"brokerage
ticker,
/
by the
'• "
will be offered
an
tion to the fact that the Pennsyl¬
vania
has
dividends
paid
are
a
Trans-Lux
as
they mature.
While it is obvious that
plan is urgent in the case of Illinois Central such
on
in
constructive
finally
solving
the
whole
maturities.
Form
Hemphill, Noyes,
Hemphill,
Noyes
&
Co.,
15
Broad Street, New York City, in¬
vestment bankers and members of
York
New
Stock
Exchange,
have acquired, effective today,
New York
of the
business
&
new
name
Noyes,
Graham,
Par¬
is
firm
adding three gen¬
eral
into
Federal Land Banks
Hemphill, Noyes & Co., office
at 15 Broad Street.
have
10
Albany,
offices
Chicago,
Boston,
1%% Consolidated Federal Farm Loan Bonds
The firm will
out-of-town
in
retired
Co.
from
Indi¬
Not Redeemable Before
The Bonds
Banks and
The Bonds
Parsons &
Co., which was founded in Phila¬
delphia in 1896.
of
Graham,
The New York office ,pf
iL'-r
J
.
,J?♦
Graham,
V/f.
.
S-H'r
are
under the statutes of a majority of the
for the investment of
100%% and accrued interest
McNally With Warner
J.
120
Arthur
Warner
Broadway,
announce
&
City,
Carl-
Walter
New
Co., Inc.,
York
that Kenneth W.
J.
McNally
become
This offering
is made by the twelve Federal Land Banks through their Fiscal Agent,
Nationwide Selling Group of recognized dealers in securities.
with the assistance of a
and
Macdonald G. Newcomb, Fiscal Agent
as¬
sociated with the firm in its sales
31 Naaiau Street, New
department.
York 5, N. Y.
Mr. Baker formerly headed his
own
investment firm in New York
City; Mr. Carlstedt
ris Cohon & Co.
..
,
September 13, 1949.
with Mor¬
was
.
*..»
."J
'
•
..."
••
.
.
*•£*,
'
u
.
•
,
.*»
£
.
several obligations of the twelve Federal Land
Federal Farm Loan Act as amended.
eligible (or investment by savings banks
Baker, Carlstedl,
Harold I. Baker have
partners
the secured joint and
issued under the authority of the
States, including New York and Massach usetts. The Bonds are also eligible
trust funds under the statutes of various States.
stedt,
one special part¬
F. Banks, Jr., of
All are at present
and
Clayton
Philadelphia.
are
are
1957
October 1, 1955
Hemphill, Noyes &
Sept. 14.
New York,
ner,
Due October 1,
Dated October 1, 1949
anapolis, Philadelphia, Pittsburgh.
Reading, Trenton, York, Pa., and
Washington.
Nixon Griffis, a limited partner,
partners: John S. Williams,
New York; Walter E. Robb, Jr.,
Boston, and George T. Purves,
I
$215,000,000
near-term
Co., with the addition of
& Co.
The
of
Parsons & Co. will be consolidated
Par¬
partners and a change of
of the consolidated firm to
Hemphill,
sons
the
Stock
of Graham,
Exchange firm
sons
question
-
Graham, Parsons & Go.
the
New Issue
no
step would be
a
!
With Battles & Co.
PHILADELPHIA,
extended bond and provision made to pay off the
(non-callable)
American
PA.—Battles
& Co., Inc., 1528 Walnut Street,
its regular stock ticker, and piles of
All of these standard announce that Clifford Lewis, 3rd,
common
stock every year since ticker tape.
has become associated with the
1848.
The sign goes on to point items of the regular brokerage
out that for every $750 invested office are foreign to the average firm.
office"
expected that holders of some of the liens maturing in that period
balance
and
why American industry needs the
vital resources of investment
statistics.
return
panoramic
a
man-in-the-street,
shares
moving display, Meyer L. Hough,
engineer on Pennsylvania's "Ad¬
miral" run between New York
brokerage office.
The exhibit
of, these
holder
the
visitors at the Westchester
and it was
has hoped that through their display
$50 in the operations of the brokerage
in the railroad's stock a year ago,
.
"
i.
y.ii"
t (
20
THE
(1052)
COMMERCIAL
Two
World Bank Issues Fourth Annual
Report
port of the institution as approved by its Executive Directors. Its fi¬
nancial sections cover the fiscal year ended June 30, 1949; other sec¬
tions
of
the'?u~
the
Bank
the
private electric company.
These projects will help to mod¬
ernize and expand two of Bel¬
gium's key industries and thereby
whole,
according to
a
tivity.
of
t i
11 y
a
in¬
operations
lending
which
services
it
by
the
finance
and
Government for electric
a
subsidiaries
operate in the Rio de Janeiro find
Paulo
areas.
The
loan
is
guaranteed by the Government of
Brazil.
A loan of
$16,000,000 was made
to the Kingdom of Belgium to fi¬
nance
imports of equipment for
the construction of two steel mills
and
a
The
power
Chilean economy improved
couragingly in 1948.
en¬
Total
from
loans
the
made
time
it
by the Bank
began
opera¬
Bank
plant in the indus¬
trial district of Liege. Proceeds of
tjhis loan will be utilized by two
granted
development
of
loan
a
in
the
countries:
France,
Denmark^
lands,
Chile,
The
following
Nether¬
Luxembourg,
Mexico, Brazil, Belgium.
Finland, India, and Colombia.
of
of the
Bank's loans
proceeded in
completely satisfactory manner
the past year, according to
the
Annual
Report,
and
new
were
worked out in
nection with supervision of loans
for
specific
careful
will
make
the
Dutch
24
to
projects.
Under
the
arrangements
which
are
with
accord
reports
struction
a
modernization
or
of
plant.
The 24 projects affect vir¬
tually every sector of Dutch in¬
dustry. The loan is guaranteed by
the Netherlands Government.
received
loan
a
of
000,000 for the reconstruction and
development of the Indian Rail¬
The
loan
recent
most
contract
signed in August and related
$5,000,000 loan to the Caja de
Credito Agrario, Industrial y Mi-
was
to a
to
The
proceeds will be used
import machinery to assist in
the
mechanization
agriculture.
The
of
.
Colombian
financing
aids
one
of. several specific projects
which had been submitted by the
Colombian
Government
sideration
by
the
for
the
on
projects which
it
the
progress
actually achieved
with the estimates on the basis of
which the loans
granted.
were
in
previous years
three-quarters of the total
ditures
made
were
about
expen¬
financed
in
by Bank loans
the United States.
geographical distribution
of
the total, of $526,300,000 disbursed
by. the Bank up to June 30, 1949.
in round numbers by areas of ex¬
penditure is as follows: $400,400,000 in the United States; $51,400,000 in
Latin America; $14,400,000
in
Canada; $55,300,000 in Europe
$4,800,000 in Africa,, the Near
East and Far East.
^ v ..
and
.
Bond
:
Marketing Activities
con¬
International
the loan agreements,
financing, so that it may be in
position at all times to compare
The
ways.
nero.
is
As
$34,-
they
but also receives regular progress
corporations to finance imports of
equipment required for recon¬
Since
sufficient
funds
were
Bank, while a more comprehen¬ •available throughout the period
covered by the report to meet all
sive
development
program
is
worked
large
out
Bank
with
the
mission
help of
now
in
loan
a
Co¬
lombia.
no
requirements
sales
of
direct
of
the
necessary.
Bank,
obligations
the Bank during this period
of
were
Replenishment of $19,-
Bank's
under
Dutch
shipping
banks
in
the
insurance
sales
to
four
companies
were
of
Kingdom of Belgium bonds
of
$28,000,000
has
portfolio
addition
in
this
A
tne
raised
sums
additions to loanable resources
result
a
of
member
Bank's
consents
given
governments
of
use
by
18%
consented
to
the
.
United
Kingdom,
■
and
599,876.25 Kroner by Denmark.
The bonds
the
Bank
have had
satis¬
factory market record, indicating
that they are now considered sea¬
a
widely
are
established
distributed
large and small.
In
<
June, 1949, the United States
Congress enacted
dent
the
of
and the Presi¬
United
States
ap¬
proved, legislation authorizing na¬
tional
banks,
and
state banks
which
eral
members
are
Reserve
of
the
Fed¬
Systeip, to deal in
and underwrite obligations issued
during
cies
which
would
riod.
operate
pri¬
the
As events have
proved,
magnitude
the
of
pe¬
both
short-run
difficulties and the length of the
of transition were under¬
period
estimated at Bretton Woods. But
the existence of Europe's extraor¬
dinary
immediate
requirements
and the creation of ERP to
satisfy
them
neither impair the validity
of the conception
underlying the
Bank, nor threaten the Bank's
ability to achieve its objectives.
The Bank
a
was designed to meet
long-term need which will re¬
main when the present emergency
is over—the need for a
continuing
organization to promote interna¬
tional investment on a scale suf¬
ficient
1
v e
o
to
ensure
p m e n
and
sources
balanced
a
de-
t of the world's
re¬
general rise in its
living standards. ;.A,'.U.>.■7"
.
;
a
Present plans call for termina¬
The Bank expects that this legis¬
lation will contribute to a broader
that the ERP countries will/again
look to private investors and to
in the United
market
its obligations.
covered
for
States
During the period
by the
11
report,
states
of aid
provided between
and then.
As these cutbacks
amount
now
it is reasonable to expect
the Bank
as
the principal sources
of foreign capital for their longterm investment projects.
There
in the United
are
or
Bank may soon be called uoon to
States, by legislative
administrative action, .author¬
Bank's
qualifications
in
Subject to
and conditions
projects.
investment
securities.
in
the
various
as
follows:
For all national
banks, and for
commercial
in
and
banks
in
District
the
45
for insurance
Co¬
of
companies
in 36 states; for trust funds in 33
states and the District of Colum¬
Offer $215,000,000
Farm Loan Bonds
The 12 Federal Land Banks of¬
fered
bpublicly
Sept. 13 through
G._ Newcomb,: their
agent, 31 Nassau Street,
York, $215,000,000 consoli¬
Macdonald
fiscal
New
dated
Federal
dated
Oct.
1957,
bia.
The
Bank's
operations
ended
year
in
an
June
excess
for the
30,
1949,
income
of
of
expenses
The
total
come over
expenses
period
the
of
such
of
Federal Land Banks
District of Coldm-
for
lumbia;
financing
legally author¬
ized investment for institutions
other
the
statutes
rulings, the Bank's securities
will be
increasing indications that the
consider
institutional
the
the
Reserve.
Europe
occur,
International
approximately
$10,600 000, exclusive of loan com¬
missions credited to the Special
excess
of
in¬
per annum
and
were
interest at
distributed
13A%
payable semi-annually,
offered at 100y4 and
interest.
accrued
on
a
They
are
being
nationwide basis
through a large selling group of
recognized dealers in securities.
Net proceeds from the sale are
for the entire
Bank's
and
farm loan bonds,
1, 1949,-due Oct.;'1,
callable Oct. 1, 1955.
The bonds bear
to be used to retire approximately
operations
up to June 30, 1949, amounted to
approximately $13,650,000. In ad¬
dition to this net income, approxi¬
mately $5,000,000 was set aside in
1, 1948-50, and to provide ap¬
proximately $69,100,000 for repay¬
the
ment of commercial bank borrow¬
Special
year
Reserve
during
the
ended June 30,-1949; the to¬
$145,900,000 of iy2% consolidated
Federal
ings
tal amount in the Special Reserve
was
OCTOBER 5-9
of
expected in many quar¬
a brief transitional
pe¬
curities acts of the United States.
over
Broadmoor Hotel, Colorado
Springs
be
tion of ERP by June 30, 1952, and
for a
gradual reduction in the
the
resulted
the
providing
Bank, and
designating securities issued or
fully guaranteed by the Bank as
exempted securities under the se¬
by
fiscal
at
conference
marily in the post-transilional
among
investing institutions,
established.
riod after the war, but rather with.
the creation of permanent
agen¬
very
soned securities. The Bank's bonds
was
ters to
-
previously issued by
problems
what
by the
Bank in its lending operations of
8,000,00.0 Canadian dollars from
by
was
Woods
solution to the anticipated short-
run
use
this source, and similar consent to
the use of £500,000 was granted
Bapk
Bretton
not concerned with
was
a
portion of their capital subscrip¬
paid in in local currencies.
Canada
the
The
as
the
to
part of the
a
an
which
tions
tions
the N. S. T. A. Convention
impaired.
assumption involves a
misconception of the purposes for
Such
there have been
though moderate,
savings banks in 29 of
the 36 states having such institur:
to
ment has somehow been
far
manner,
encouraging,
bia;
Come
the Bank's position as a
major in¬
strument of international invest¬
to
to
states and the
WONDERLAND
sarily will play a secondary role
in Europe
during the ERP perio'd,
accounts
In
on
misunderstanding stems gen¬
erally from a fallacious assump¬
tion that, because the Bank neces¬
private invest¬
through sales of
guaranteed obligations.
ment
says, as to the
the European Recovery
the Bank's activities.
of
This
re¬
thus
Program
misunderstanding
persists, the report
effect
Program
and four
ceived under the Belgian loan.
Recovery
Considerable
savings
States; this
-
.
European
mutual savings banks, $16,000,003
are or soon
NATURE'S
contribute to the solution of these
•
*
*
problems.
mutual
company
employment, or
budgetary
and balance of payments
require¬
000,000 of such notes acquired un¬
der the Dutch shipping loans. The
Bank also sold, to a leading U. S.
life
the main¬
assure
full
short-term
ments—though its operations do
loans
United
or to
of
satisfy
were
sale completed the disposal to in¬
stitutional investors of the $12,-
and
Family in
to
uncondi¬
These
its
several
contained
For All the
tenance
Bank's
$3,900,000 of
received by the
notes
Bank
ized
FUJI
the
follows:
as
mortgage
con¬
all disbursements to see that
available
the
a
methods
in
guarantee.
were
over
(Herstelbank) of the Netherlands.
Herstelbank
with
shortage,"
com¬
portfolio, all of which
sold
loan
,/ Supervision
of the end use of
goods financed out of the proceeds
ration for National Reconstruction
proceeds
loan
held
or
through sales
been transferred from the Bank's
Proceeds
Loan
effected
securities
total
Use
Thursday, September 15, 1949
in funds loaned
was
sold4 to
part of its normal working proce¬
dure, the Bank not only checks
the
foreign exchange
costs of a four- to five-year pro¬
gram of expansion for the hydro¬
electric power and telephone fa¬
cilities of the company's Brazilian
expanding production of
$15,000,000 to the Finance Corpo¬
India
loan of
$75,000,000 to the Brazilian Trac¬
tion, Light and Power Co., Ltd., a
Canadian corporation, to finance
These
for
limestone powder for agriculture.
development in Mexico.
The Bank also made
Sao
imports of equipment
materials required for the re¬
The
Bank
of
subsidiaries.
will
proceeds
construction and modernization of
eight loans made by
during the past year
aggregating $191,600,000.
Two loans-totaling $34,100,000
were granted
to agencies "of the
of
The
Finland's woodworking industries,
for electric power development,
Bank
most
Finland.
record
a
substan-
The report describes the salient
power
the
This loan
and
renders member nations.
Mexican
in
made
was
is guaranteed by the Government
ity by the International Bank both
the
$12,500,000
sets
creased activ¬
features
\
A loan of
Black,
forth
Granted
increase the country's produc¬
to
President
of
Loans
a
to the Bank of Finland.
The report
as
other
Conditions
1948.
been made for reconstruction and
1949.
in
appro¬
and
va¬
during
and
of
with
period from
Sept. 1, 1948,
to
Aug. 20,
actual
Government
private Belgian steel corporations
of
its
Chilean
tional
report deal
the
900,000
mitted
of
tions, the report discloses, amount
to
$716,600,000; the loans have
ried activities
in
Chile
totaling
hydroelectric de¬
to
for
velopment and for agricultural
machinery became effective on
Mar. 23, 1949, after passage by the
March
Eugene R. Black, President of The International Bank for Recon¬
struction and Development, has made public the Fourth Annual Re¬
Black
CHRONICLE
priate legislation. The loan con¬
tract
was
originally signed
in
Brazil, Finland, Netherlands, India and Chile. Questions of Euro¬
pean Recovery Program considered in Report.
R.
FINANCIAL
loans
$16,000,000
Operations covering fiscal year ended June 30, 1949, indicate sub¬
stantially increased activity, both in loans and in other services ren¬
dered to member nations. Loans comprise advances to Mexico,
Eugene
&
thereby increased to approxi¬
farm
bonds
for lending
and
The
loan
of
Oct.
operations.
consolidated bonds offered
are
not
government
and
are
not
obligations
guaranteed by the
mately $8,000,000..
Surveying
the
government, but
Bank's
several obligations of the 12 Fed¬
scope - of
the
activities, the re¬
port concludes that the Bank can¬
varied
not and should not be
provide the
a
answer
expected to
to all
or
even
major part of the world's finan¬
ills.
It is beyond both the
cial
purpose
for
and
power
example, to
of the Bank,
cure
the
"dollar
eral
Land
Federally
are
Banks.
the joint and
The
chartered
banks
are
institutions
and operate under the supervision
of
the
Farm
Credit
Administra¬
tion, which is under the general
direction
and
supervision
Secretary of Agriculture.
of
the
Volume
170
Number 4838
THE
COMMERCIAL
&
FINANCIAL
(1053)
CHRONICLE
21
Security Traders Association of New York
Rudy Petke, Garvin, Bantel & Co.; James F. Fitzgerald, W. L. Canady & Co., Inc.,
President of the Security Traders Association of New York; Charles O'Brien Murphy,
Merrill Lynch, Pierce, Fenner & Beane; Arnold J. Wechsler, Ogden, Wechsler & Co.
Otto
Jim
Brewer,
John C. Legg & Co.; Harold Marache, Joseph McManus & Co.;
Pershing & Co.; Lud Strader, Strader, Taylor & Co., Inc., Lynch¬
burg, Va.; Henry Kuipers, Louis H. Whitehead Co.
Harold B. Smith
Berwald, Grady, Berwald & Co.; Lou Gibbs, Laird,
Ray Kenney, Kenney & Powell, Chairman of the Enter& Meeds; Elmer Myers, Geo. B. Wallace & Co.
tainment Committee, congratulates Hal E. Murphy, The /
./Commercial & Financial Chronicle, for winning second
prize in the horseshoe pitching contest
Bissell
ortimer Gartman,
Joe Flanagan,
Josephthal & Co.; Arthur Hatz, Arnold &
Lou Singer, Troster, Currie & Summers
S. Bleichroeder, Inc.,
John J. O'Kane, Jr. & Co.; Walter E. Bachman, Burton, Cluett &
John J. O'Kane, Jr. & Co.; Arthur E. Schwarz, Bache
John J. O'Kane, Jr.,
Dana;
& Co.
Edwin L. Beck, The
Jim
■
■
Pete Steven, A. C. Allyn & Co.; Harry Arnold,
Paine, Webber, Jackson & Curtis; ::#
* r
T
■
Commercial & Financial Chronicle; Bill Sherwood, Hallgarten
& Co.; Robert I. Herzog, Herzog & Co.
Durnin, H. D. Knox & Co.; Herb D. Knox, H. D. Knox & Co.; Joe Eagan,
Frank C. Masterson & Co.
22
THE
(1054)
COMMERCIAL
Annual Summer
Conlon, E. H. Rollins & Sons; Barney Nieman, Carl Marks & Co., Inc.;
Saunders, Dominion Securities Corporation; Joseph' Colandro, White, Weld
Dan Hannafin,
R.
E.
Joseph McManus & Co.; Leslie Barbier,
Co., Inc.; John French, A. C. Allyn
a
& Co.
'
Walter
& Co.
CHRONICLE
Thursday, September 15, 1949
K. C. Stanford, F. S. Smithers & Co.; E. J. Markham, Wertheim & Co.; Stan Waldron,
Wertheim & Co.; Frank McGillen, Irving Trust Co.
Charles Bruggeman, Dea7i Witter & Co.; Everett Rubien,
D™n witterm & c°-;■ Hany MacCallum,
'
Jr., Peubody,
Arthur
Hamill, Lee Higginson Corp.; A. P. Morris, EstaCo.; H. R. Schmitt, Pulis, Dowling & Co.
.
.brook &
Tyner & Co., Mt. Vernon, N. Y.
DeFine, Wertheim & Co.; LeRoy Klein, Lebenthal & Co.; E. J. O'Rourke,
Goldman, Sachs & Co.; Bill Wittich, Walston, Hoffman & Goodwin
Irving J. Silverherz, Seligman, Lubetkin & Co.; Adrian Frankel, Seligman, Lubetkin
& Co.; Lester Gannon, Cantor, Fitzgerald &
Co.; George Frings
FINANCIAL
Outing Held September 9th
Joe
G. A. Saxton &
&
Barton Fox, Barton Fox &
Co.; James S. Abrams, Allen & Co.; Roger McMahon,
Shearson, Hammill & Co.; Gerald F. X. Kane, Frank C. Moore & Co.
Vince
Shea, Glore, Forgan & Co.; F. W. Robson, A. E. Ames & Co.; Henry Gersfen,
Gersten & Frenkel; Harry D. Casper, John J.
O'Kane, Jr. & Co.
Volume
170
Number 4838
THE
COMMERCIAL
FINANCIAL
&
CHRONICLE
(1055)
At Travers Island—Attended
Tom
'
Love, George E. Snyder & Co., Philadelphia; Michael J. Heaney, Michael J.
& Co.; George J. Muller Janney & Co., Philadelphia; John M. Hudson,
Heaney
Thayer, Baker & Co., Philadelphia
King Ghegan, Edwin L. Tatro Company; John O'Neill,
Stein Bros. & Boyce, Baltimore; Frank McCall
Daniel G. Mullin
Abe
Feuer
& Co.;
Pitfield & Co.; Gerard F. Hulsebosch, G. F. Hulsebosch &
Spiegelberg, Feuer & Co.; H. K. Greenfield, Greenfield, Lax &
Greenfield, Lax & Co.; Irving Ittleman, Frank Ginberg & Co.
Herb Lax,
;
^
by 250
Theodore Wechsler, Hay, Fales & Co.; Jay Duga, Merrill Lynch, Pierce, Fenner &
Beane; Gene Stark, Merrill Lynch, Pierce, Fenner & Beane; Edwin L. Tatro,
V : :
■ "
Edwin L. Tatro Company
Sid Siegel, Siegel & Co.; David Gold, Lapham & Co.;
Sam Gold. Lilley & Co., New York City
Tucker, Anthony & Co ; John J. Meyers, Jr., Gordon Graves
John FitzGerald, W. C.
■v
23~
.
Tom Greenberg, C. E. Unterberg & Co.; Hoy Meyer,
Stem & Co.
W. F. Moss, National Quotation Bureau, Inc.; W. D. O'Connor, Fitzgerald & Co., Inc.;
Co.
Bill Bird, F. S. Moseley & Co.; Sal Rappa, F. S. Moseiey & Co.
Co.;
Les Frenkel, Gersten & Frenkel; Walter Kennedy, Coffin & Burr, Inc.; Ernest Robb,
Paine, Webber, Jackson & Curtis; John C. Calef, Dominion Securities Corp.
24
(1056)
THE
COMMERCIAL
Pronounced
&
White & Co.; Ernie
Lienhard, Troster, Currie & Summers; Bert Pike, Troster, Currie & Summers
Bob
Jules
Co.; Frank Mulligan, E. H. Rollins & Sons; Herbert
Singer, Luckhurst & Co.; Leo Goldwater, Hettleman & Co.
Thursday, September 15, 1949
Ben Van Keegan, Frank C. Masterson & Co.; Reid Rankin, R. H. Johnson & Co.;
Jack Germain, J. Arthur Warner & Co.
Bean, Luckhurst & Co.; Ted Young
Lienhard, Troster, Currie & Summers; Barney Clancy, Troster, Currie & Summers; Frank Barrett, H. C. Wainwright & Co.; Walter Filkins,
Troster, Currie & Summers
Bernard Salmon, Luckhurst &
CHRONICLE
Huge Success by All
Sid Woolwich, Troster, Currie & Summers; Andy Blank. J. G.
John Stein, Frank Ginherg & Co.; Nat Krumholz. Siegel
& Co.; Sidney Jacobs, Sidney Jacobs & Co.
FINANCIAL
Dick Montanye,
Laurence Marks & Co.; "Duke" Hunter,
;•;'
Hunter & Co.
R. Sims Reeves, Blair & Co., Inc.; Jim Brennan, J. G. White & Co.: Harvey S. Renton,
J. G. White & Co.; Dick Reid, York Affiliates, Inc.; Mike Growney,
York
Merritt
Affiliates, Inc.
Coleman, Aaron Geller, Peter Brochu, and Joseph Corby, all of Allen &
Co.
Volume
170
Number 4838
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
la Salle SI. Women
To Hold
their
ner
ILL. —La
will
Women
1949-50
o'clock
6:15
at
din¬
a
Utah
.
hearing
views
fred
S.
to
Al¬
revenues
and
Blyth & Co.,
Inc., on "The
I
f
Colina
Clow
; Mr.
Wiltberger is
Bond
Club
President
of
ofChicago1
the
and
a
Association.
He is
member
a
of the Chicago Club, the Attic and
"Exmoor Country Club.
He re¬
ceived
his
western
education
North¬
at
University.
for
will be Wilbur
the coming season
Brons, chief editorial writer for
'the Chicago "Journal of Com,merce,"
who
will
address
the
group at the Nov. 17 meeting, and
Dr. Carl Gardner, Executive Di¬
rector of the Chicago Plan Corn-
,
emission who will be the guest at
'. the Jan. 10 dinner.
:
Securities
Nations
meet
and
will
groups
month
a
World
and
discussion
once
in
alternate
months.
officers
The
*
for
this
year
are:
President, Miss Colina Clow, Sec¬
to
retary
Vice
-
Miss
Edith
&
Gofen
of
Palyi;
Melchior
Dr.
President,
Jiencke
Glossberg;
Recording Secretary, Miss Grace
'Zern
with
Nelson
responding
L.
Buck;
Cor¬
Mrs.
Dor¬
Secretary,
othy Petrie,
Harriman
Ripley
&
Co., Inc.; and Treasurer, Miss Lil¬
lian
Birkholz,
Ketcham
' Iv;
gard.
•
<■:
■
Non-
&
v.-":
*>y:
"•;
Laemmel to
Speak at ;
NSTA Municipal Forum
G.
William
President
Laemmel,
Chemical
of
Vice-
Bank
Trust Co.,
&
New
York, will be
principal
speaker at the
M u nicipal
the
Forum
be
to
held
at
16th
Annual
the
Convention of
the
National
Security Trad¬
Associa¬
er s
tion
at
Colo¬
rado
Springs,
5-9, ac¬
cording to
R u s s e 11 M.
Oct.
William
G.
Laemmel
Ergood, Jr.,
Chairman
the Association's
mittee.
f
Mr.
o
\
;
topic
"Housing Bonds."
will
Corporation
OAKLAND.
CALIF.
—
C.
'
N.
White & Co., a corporation, has
been
■
be
.
(Special to The Financial Chronicle)
/
f
Municipal Com¬
Laemmel's
Now
formed
vestment
continue
to
business
ducted by C. N.
tral
Bank
organization
the in-
formerly
con¬
White & Co., Cen¬
sole
pro¬
Officers of the
new
Building,
prietorship.
Steel
in
concerns
this
About Vz of industrial
other mining customers,
area,
Kennecott
Copper
(U. S. Steel subsidiary), sell power to
Industrial
also
revenues
include
some
sales
the com¬
irrigation
97% of the
for
to
are
a
Claudius N.
White, President; James N. White,
It
probable that, with rapidly increasing diversification of
industry, future earnings should prove much more stable.
Irrigated
farming has been considerably expanded, and dry and irrigated areas
beet
for
seems
about
cover
devoted
acres
principally to wheat, corn,
While about Vz of the copper
and fruit and live-stock.
sugar
the
million
17
United
still
States
from
comes
the
mines
Kennecott
of
and
American
Smelting, steel is increasingly important. Geneva Steel
capacity of 1.3 million ingot tons, and obtains both coal and
iron from huge reserves about 120 miles away; it is said that the
company can deliver steel on the Pacific Coast cheaper than Beth¬
lehem can ship by water from its Maryland (Sparrows Point) plant.
Big steel consumers with plants in this territory are Pacific States
has
a
Cast Iron
Oil
Pipe, Chicago Bridge & Iron, and Rheem Manufacturing.
production and refining
also developing and Standard
Oil of California, Standard of Indiana and Phillips have built (or are
building) big refineries to serve the Mountain States area. There are
also
tremendous
government
of
reserves
is operating
are
shale
oil
for
future
exploitation;
the
pilot plant at Rifle, Colo, to determine
Natural gas reserves in western Wyoming and other adjacent
are
being developed.; Big phosphate deposits in Idaho are
costs.
areas
Dr. Joseph Stagg Lawrence, Vice-President of the
Empire Trust
Company in New York City, in the Sept. 8 issue of the "Empire Trust
Letter," analyzes the British economic crisis in considerable detail
and
concludes the
due
to
a
encouraging the fertilizer and chemical industries to come into the
territory. Further diversification is provided by large military supply
and repair bases in the area, employing about 15,000 people.
Utah Power and Light now buys about 40% of its power from
Kennecott, Geneva Steel, Montana Power Co., Idaho Power Co. and
others.
It now owns some 211,000 kw. peaking capacity, which is
about 70% hydro.
Like other companies, it does not want to rely
too heavily on hydro or purchased power, and when its proposed
construction program is completed by 1953 (adding 85% to present
dependable production) capacity will be about 53% steam, 33% hydro
and 14% purchased power from others.
$>-
simple
or
single
cause
for the currencies of member
and
tions
done
therefore
there
single
is
no
artificial
ex-
.
values
far sustained by the
so
is
of
one
the
of
causes
the
the
important
shortage'
country can de-
action.
mand
)
haustion of
"The
Britain's
two wars
and high So¬
cialist
living
c
o
be
concessions
leaders
ask
her to
That
is
deliberate
dise
they will have to discover it
for
themselves
from
the
used
"Two steps
itiate.
psychiatric
to
treatment
lies of Adam Smith.
barriers
which
luxuries
the
as
can
our
offers.
Again this
is a
peculiarly British problem in the
solution of which foreign dictation
English man¬
competitive op¬
fair
in .this country,
re-examined.
We
poor
position
competitive
however,
from
problem
imputed
values
can
be
their rela¬
expressed—to
the fresh breath of free markets."
be
can
sterling
artificially
narrower
tive
WATCH
OUT
IT'S CLOSING!
mortgage debt and 14% in debentures and serial
common stock and surplus. The common stock
equity includes about $2 million net plant acquisition adjustments.
Current financing
includes $3 million bonds (the company also sold
million earlier this year) and 148,155 shares of common stock.
The stock is being offered to stockholders of record Sept. 13, on a
one-for-eight basis, with the subscription price fixed at 23 Vz by
competitive bidding for unsubscribed shares. No plans have been
$3
for
additional
financing
(other than
1951,
w
bank
borrowing)
until
.K"'
panies—and
except
in
July 31
in two decades has been unable to recover the net
in 1929—of course this is true of many other com¬
growth has been slower than for the average utility,
the
last
Earnings for the 12 months ended
(consolidated net income) were $2.66 compared with $2.43
last year.
Based
the- calendar
for
two
the
on
years.
new number of
1949
shares, consolidated earnings
estimated at around $2.25, but they
may be expected to recover to around the $2.50 level in 1950-51,
assuming that the present rate structure and present level of busi¬
ness activity continue.
U.
year
This is the last chance to send in your firm's advertisement
are
"Chronicle."
important event together with informal snapshots of officers
and members
representation in
year
1.
that
exceeding
the
a
6% rate of return
on
possible
without
sure
to be used continuously for a
business.
Let's quickly sum up the situation.
The NSTA meeting will
.
.
.
.
.
.
be held in Colorado Springs—
The Convention Issue will be pub-
lished to celebrate the event and will act
Utah Public
Should the company eventually obtain rate relief, it is
share earnings might increase to the $2.80-$3 level,
Issue
an
October 5th-9th.
as
Official Organ
of the Association.
Federal Power
after.
This is the last call we're
and by the thousands of men who are important to you
and your
Despite the company's low residential rates (about 25% below the
average), Utah P. & L. has had some regulatory difficulties.
Service Commission, aided and counselled by the
Commission, in 1943 ordered a rate reduction of about
$1.5 million applicable to Utah customers, and the Utah Supreme
Court upheld the order.
Recently, the company tried to obtain a
rate increase but, based on 1948 earnings, the PSC held the rate of
return (6%) earned in 1948 was adequate and denied the
application.
However, earnings for 1948 exceeded only negligibly the amount con¬
sidered by the State Commission to reflect "fair return" on the rate
base, and the company may file a new application if and when the
rate of return goes below 6% for 1949 or some extended
period there¬
of that Association.
making to take advantage of the annual opportunity to get
S.
The
in the big special NSTA Convention Issue of the
The Issue that will feature full reports of the
to appear
The company
income it enjoyed
2.
Bulk
over
of
advertising carried in the special
Your
Thus you
contributing to the support of the NSTA without a
cent of extra cost
3.
issue turned
to the NSTA and its affiliated associations.
will be
on
part.
your
advertising buys representation in an issue guar¬
anteed
to
audience,
course
get
readership
top-flight
because
it's
saved
for
and
reference
annual
the
an
during
of the year.
the higher investment.
The current dividend is $1.60 compared with $1.40 last year,
Time
current
2-9570 for the rates and other details.
Or wire NSTA Con¬
vention
for
earnings.
policy
and
of
should ultimately be successful in adjust¬
to be to
appears
If the company
ing its rates, and other conditions
sible that the dividend rate
unlikely during 1949-50, in
The
stock
sells
pay
are
as
out about 70%
anticipated, it
might rise to the $2 level.
any
around
f
event.
23V2
to
yield
about
or
75%
seems
pos¬
Don't
is
running out.
Issue
miss
Dial
Department
advertising
or
long-distance phone REctor
right
this
in
now
valuable
data
issue
you
want.
of
This appears
.
6.8%.
This
yield
THE
COMMERCIAL
AND
FINANCIAL CHRONICLE
'
to
Vice-President; and James J. Sta-
appears
sek, Treasurer.
similar size.
be
about
in
line
with
the
average
for
companies
of
25 PARK PLACE
it
are
to criticize
effort while
denominator in which
is unwelcome.
(48%
in¬
tariff
values for currencies and gold, it
might be well to expose the dol¬
lar, the pound, the franc, together
with gold—the only valid common
welfare
state
"Something,
be
arises
against the
winds of competition plus the so¬
cial
this country
"Since much of the mischief in
the
"The high cost of British goods
her
simply
giving
ourselves
a
prohibitive
handicap when English and Amer¬
ican
goods meet in a common
market place.
of
hardly to the economic homi¬
reflects
a
English
mind which might conceivably re¬
but
a
portunity
in
of
in
state
se¬
structure denies the
should
national
prolonge the
Insofar
nomic experiments.'
spond
to
mately embrace.
hard
ufacturer
a
some
addi¬
postpone that rigorous self-solu¬
which England must ulti¬
her while she breaks 'fresh ground
in terms of new social and eco¬
to
which
tion
"On the other hand, they have
little right to ask us to subsidize
due
evolve
we
under
til after the elections—will
taskmaster of experience.
"The gradual degeneration
England's economic plant is
Yet
hints of
the
to
ductive Nirvana of socialism and
economic senescence—at least un¬
repudiate
a
dangerous.
that
device
be
can
choice of the English people and
if it is the wrong road to Para¬
part
which
tional billions of American money
Jos. Stagg Lawrence
Dr. Lawrence.
Socialism.
politically
any
new
concludes
cannot
and
her
rrected
overnight,"
"We
steps
England will have to take to ex¬
tricate herself from her current
predicament are
all unpleasant
fund
by
cannot
corrective
bank loans) and 38%
made
na¬
IMFf
'dollar
about which this
Including current stock financing and the $3 million mortgage
October, the company's capital structure will be
debt
about
This
sim¬
or
ple cure.
"The
bonds to be sold in
62%
malady from which Great Britain suffers is not
any
capital
Obviously, with mining sales only about 10% of total revenues
probably a much smaller proportion of net income, the company
heavily dependent on that industry, except of course as com¬
mercial and residential business might be affected by the reduction of
mining operations in a severe depression. But the company was hard
hit in the 1932 depression, gross revenues
dropping from $11.7 mil¬
lion in 1929 to $8.8 million in 1933; while share earnings fell from
$2.77 (on present capitalization) to 43c in 1934. In the 1938 depres¬
sion the decline was less drastic, with revenues down only about 5%
and share earnings off from $1.48 to $1.10.
j
Some of the other speakers
The
biggest industrial
or
is not
Governor of the Investment Bank¬
ers'
obtained from sales to coal
and
Future."
as remedies:
(1) abandonment of socialistic ex¬
periments; (2) lowering of artificial values of currencies set up
by International Monetary Fund; and (3) revision of our tariffs.
medium-sized hydro-electric
pumping (the company's service will be available
farms within its region by the end of this year).
Banking Busi¬
ness- and; its
;
are
Geneva
pany.
stment
n v e
the
but
f
o
a
of about $18
dustrial and 9% wholesale and miscellaneous.
Vice-
President
Light is
diversified, with some emphasis on the
mining industry. Revenues are about 99% electric, 1% steam; electric
revenues
are 41%
residential and rural, 21% commercial, 29% in¬
Wilt-
berger,
&
revenues
The territory is quite well
•
the
of
annual
-
looking
forward
Power
utility,
million, serving Salt Lake City
and
other areas in Utah, Idaho and. Wyoming
(mostly intercon¬
nected); a subsidiary, Western Colorado Power, serves some territory
in Colorado. Total population served is over
600,000, of which nearly
one-third is in Salt Lake City.
:
with
Members
are
and recommends
Utah Power & Light
Thursday
on
Joseph Stagg Lawrence, in publication of Empire Trust Company of
New York, says Britain's difficulties are due to
multiplicity of causes,
By OWEN ELY
inaugurate
evening, Sept.
22, at the Cor¬
don, 410 South
Michigan Av¬
enue.
Utility Securities
Salle
with
season
25
Analyzes Britain's Economic Crisis
Public
Meelimg
CHICAGO,
Street
(1057)
*
NEW YORK 8, N. Y.
26
THE
(1058)
COMMERCIAL
the
Securities Salesman's Corner
only
&
FINANCIAL
representative
this
nature
Data
concerning
of
holders
nies
that
of
is
the
oi
available.
distribution
individual
available
is
data
CHRONICLE
for
Says Sterling Should Be Devalued and
United States Must Underwrite New Rate
compa¬
individual
John H.
Williams, Harvard monetary expert and adviser of New
Bank, writing in "Foreign Affairs," holds
sterling devaluation will be necessary as part of program for ad¬
justing balance with dollar areas, but to be successful, U. S. must V
promise to support new rate.
:
;
' >'•'
discussion of quotation lists.
By JOHN DTJTTON
two lists, one
number of stock¬
Has this ever happened to you? You call on a prospect, you spend
holders of the 426 reporting com¬
time cultivating his confidence and good will, then after considerable
panies in each State, according to
time and effort you reach the point when you have something worth¬
rank, and the other in proportion
while to offer and you bring it to his attention. So far so good. Your
to population.
prospective customer thanks you, he tells you he will consider your
426 Corporation Stocks
suggestion and let you know. Several days later you call again and
he tells you, "You know, that was a pretty good stock you told me Total Number
of Stockholders by
to buy, I called up some friends of mine who are members of the
States (in order of State totals)
Stock Exchange and they bought it for me at a lower price than you
State
%
offered this stock and only charged me a small commission." And you
Totals
(Approx.)
stand there, looking foolish and wondering how you can explain the
New York
16.9
fact that you did not intend to overcharge or take advantage of your
California
9.8
proposed new customer, but regardless of what you might say, you Connecticut
9.3
136,900
know very well that you are on the spot and there is little you can Massachusetts
8.8
128,757
Following
showing the
do about it.
Pennsylvania
Time and again, member firms accept orders for over-the-counter
securities from the investing public and only charge a small commis¬
sion on top of their wholesale, or cost price. In many instances these
Ohio
trading departments that actively solicit the
ness of smaller retail firms that rely
primarily for their income
profits derived through the retailing of securities, which those
firms have bought from Stock Exchange houses.
Meanwhile
member firms allow their customer's
SALE,
plus
regular
the
Stock
commission,
IN
ACTIVELY
Such
SOLICITING BUSINESS.
Jersey_
Wisconsin
__
'70,158
4.8
—
64,264
4.4
I 35,605
:J.
uncertainty
ternal
sterling
DIRECT
Rhode
-
_
Island
X
Minnesota
,
When firms
20,269
1.3
19,538
1.3
New
Georgia
13,631
___
12,312
___
District
11,864
—
11,772
___
10,443
___
Columbia-
of
9,496
———
Virginia
8,680
———
Kentucky
7,049
5,292
their very nature must be SOLD THROUGH THE PERSUASIVE EF¬
THE BUSHES
:
___
Tennessee
4,316
___
Arizona
3,543
Wyoming
1,491
1,407
tJtab
state of affairs. We have been unable to obtain co¬
Mississippi
helpful meeting of minds between the over-theIdaho
counter houses and the member firms of the various exchanges.
now have an
industry that is so disorganized that competition
tween member firms and unlisted firms in many cases
dog-eat-dog battle for
We
be¬
has become
a
few dollars commission. Is not this one place
where those of us who would like to improve the business in which
we are engaged could get together and
bring order out of chaos? The
Arkansas
South
Dakota___
National Association of Securities Dealers could do something Tor its
members if it would lead the way. The Stock Exchanges throughout
the country could also do something.
It is the members of the various
-exchanges that
are the culprits in this instance. If we had a rule that no
dealing with the public at RETAIL would act as a broker in un¬
listed securities, unless the brokerage fee was of a substantial
nature,
amounting to a minimum of from 3% to 5%, then we would eliminate
North
671
Dakota....
the sort of unfair cut-throat competition that Stock
Exchange firms
attempting in the unlisted markets today. After many years of
experience in retailing securities it is my own opinion that NO UN¬
are
LISTED
SECURITIES
SHOULD
BE
DEALT
BASIS BY ANY DEALER IN SECURITIES.
ter of
opinion and there
IN
AN
AGENCY
However, this is
good arguments both
are
ON
pro
and
mat¬
a
ders in these, and other unlisted
issues,
basis from the
investing public.
In addition, if all those dealing with the public in
unlisted securities would act as principals, and would insist
upon a
fair,, yet substantial gross mark-up, everyone would be better off. No
business
can
on an
agency
grow and serve its customers until it is
organized
so
that
it operates with a maximum of profit to all, and the
greatest measure
of benefit to the public. As long as the present situation exists
every¬
will suffer.
one
The
thing that has been
xemember.
answer
to
lacking in
this
our
condition
is
leadership—some¬
industry for as long as I can
'
■
;.v.'
-\P
New
Hampshire
-vx-y
v.
Totals
(Approx.)
136.900
8.59
Island
California
20,269
"2.85
144,123
2.08
Maryland
35,080
1.92
Colorado
21,313
1.89
246,135
1.82
New
York
*
Vermont
New
Jersey
District
Illinois
Wisconsin
Pennsylvania
Delaware
5,684
1.58
64,264
1.54
9,496
1.43
105,551
1.33
13,631
1.25
35,605
1.13
Columbia...
of
j
«
I
Report
covers
3,058
1.10
70,158
1.01
32,755
0.86
3,543
0.71
Minnesota
19,538
0.70
Washington
11,864
0.68
Florida
11,772
0.62
Ohio
__
__
Missouri
.
Nevada
data from 426 corporations whose securities
traded in unlisted market.
are
leading in
holding unlisted shares/ ' ! *
data from 426
corporations whose securities are traded in the unlisted
It represents the most
comprehensive study yet undertaken
by the NASD.
The survey and
analysis include
stockholders re¬
ported for each stock in the totals
"fiie
number
presented.
shire
of
No
conclusions
next,
with
3.26%
of
The survey was made
by /the
National Quotations Committee of
the NASD in order to show
geo¬
are
graphical
distribution
of
stock¬
tion is called to the fact that five holders of the
various corporations
of the six New England States whose
securities are dealt in on
top the list compiled to show the the unlisted market. Such data is
percentage relationship of stock¬
holders to population.
Connecti¬
cut,
with
136,900
stockholders,
fifoows 8.59% of the State's popu¬
used in the
publications
listed stock quotations.
survey
holders
ago
Hamp¬ page
■v
development of wider
newspaper
lation (1940 census) owning stock
in one or more of the 426 report-
New
;
__
<
Nebraska
Kansas
of
un¬
A similar
covering investment fund
was
[see
12],
released
"Chronicle"
The
two
a
of
fortnight
Sept. 1,
surveys
are
Carolina
Mexico
Kentucky
Louisiana
_
Idaho
Utah
__
Montana
_
Alabama
Tennessee
West
South
Virginia
Dakota
Oklahoma
.L
is
the
K
0.59
because
the
had much experience
wars we
Britain,
ain
still
are
suffers
But
both
now
reversed.
from
Brit¬
over-full
employment and low real income,
and her imports are
already so
restricted that the possibility that
she
again push the economic
can
burden
of
would
on
have
almost
side,
but
seems
not
of
8,680
0.32
0.29
we
inelastic de¬
to
increase
in quantity
be more than off¬
may
found, by the fall in price.
benefited by this fact in
1931, and
was
provement
able to stage
temporarily
of
a
an
re¬
im¬
international
her
position—on cheap
imports.
But
in the present case, with the dol¬
lar earnings of the sterling area
pooled, the effect of devaluation
might be to increase, rather than
to relieve, the drain on British
This could be
reserves.
tional reason, along
sire
for
protection
effects
of
an
American
an
addi¬
with the de¬
against the
depres¬
sion, for the British to advocate
commodity
stabilization
agree¬
ments.
r
"One
in
the
badly needed adjustment
British
devaluation
is
or
not, is
of
the wartime
position,
to
be
whether
undertaken
effective disposition
an
sterling balances.
disturbing effect of these was
The
during
the
Anglonegotiations, but
no
satisfactory solution of the
problem was then found.
They
loan
re¬
only that
the will¬
rates which result from
ingness
itors
of
wartime
some
cred¬
to
dispose of their sterling
through roundabout op¬
erations circumventing the British
exchange controls.
So long as
balances
balances
these
be
persistent
a
remain, they will
of pressure
source
claims for repayment at the pres¬
the
de¬
time,
this
come,
from
the
export
much
sterner
would have to be taken
the
devaluation from
an
internal
vicious circle of currency de¬
preciations feeding on itself.
There has been much interest in
a
5,292
0.27
1,407
0.26
'floating' rates of exchange.
Be¬
fore the war, I favored a high
degree of autonomy and flexibil¬
ity in the exchange rates of the
smaller
countries; and one of the
persistent criticisms of the
7,049
0.24
5,287
0.22
most
1,108
0.21
1,193
0.21
International Monetary Fund has
been that its articles of agreement
unduly limit such flexibility.
long insisted that the
1,019
0.18
4,840
0.17
I have
4,316
0.14
for the key currencies—the dollar
2,736
0.14
and the pound—is different.
814
0.12
should remain
<-2,623
firm,
change only
0.10
deed, there
1,019
0.05
case
for
Mississippi
1,164
0.05
our
devaluation
But
case
They
subject to
resort.
In¬
or
as a rare
never
has been
a
good
devaluing the dollar, and
of
on
ent
rate,
the problem
that some $2.5
balances are
subject to a guaranteed
adding
to
created by the fact
billion of sterling
already
rate.
"But there is another, and even
external spiral in the form
an
distort Britain's trade and threat¬
to
of
that
prevent
were
the external balance
being dissipated by
wage-price spiral.
off
10,443
set,
Britain
de¬
sterling, even if it is devalued;
and they might well give rise to
effect
purely
measures
to
means
corrective
valuation
devaluation
countries
This
mote.
the
sterling
other
onto
0.43
0.34
exported
currency
en
the
stability of the pound.
They explain the "cheap sterling"
circumstances
0.38
0.37
subject
the
mand;
of
exports of primary
of the devaluation.
5,749
6,676
products
on
a? contributing factor in the
convertibility crisis of 1947, and
they have continued ever since to
12,052
22,024
effect
a large
and then unre¬
import ,-V market,
caused
external prices to fall rather than
British prices to rise as a result
was
stricted
;
the
American
generally, was in a
depression, with unem¬
ployed resources.
This fact, com¬
of
bined with the circumstance that
-
with
which
Brit¬
period between
In the
valuations
the other
follow
undoubtedly
ain's lead.
state
0.11
Dakota
would
on
countries,
area
recognized
668
North
-
infla¬
difficulty is the
to the effect of
as
sterling devaluation
like the world
Arkansas
___
internal
In 1931 this dan¬
0.48
r
New
ac¬
12,312
__
Carolina.
South
be
devalua¬
"Another danger (as we saw in
the inter-war period) is of setting
,_
North
Much could
0.50
■
Texas
of
17,266
—
Georgia
Virginia
came
population.
reached by the Association in re¬
leasing the study, although atten¬
Jug, corporations.
1,491
___
Iowa
Securities Dealers, Inc., on Sept. 13
released its Stockholders Distribution
Survey, 1949, which includes
0.59
31,466
Wyoming
Indiana
The National Association of
market.
0.60
Michigan
Finds New England States
percentage of population
v
Study
1.11
110,583
_
wave
without
slight
was
she
-2.98
128,757
Arizona
IflASD Issues Stock Distribution
3.26
3.15
'
'
Rhode
The
purchasing power parities and
comparative costs would suggest.
One major argument against de¬
ger
26,748
Massachusetts
of attacking the
reserves.
tionary effect.
16,057
Maine
com
Quite frankly, it certainly seems unfair and unjust for member
firms that have wholesale departments to solicit the business of re¬
tail organizations and then allow their customer's men to
accept or¬
>
census)
Connecticut
directly.
valuation
State
■
major
covery—and
complish is much more uncertain
than a simple analysis in terms of
;
relationship to population—
1940
sup¬
tion, and what it would itself
Total Number of Stockholders by
States (in number of percentage
tirm
manner
problem
accomplished
668
.X
must
rate.
new
discussed
British
a
Nevada
suc¬
States
___
."'V.
814
-
move
is
—-
1,019
_____
United
the
expresses
sterling
talk about it last spring undoubt¬
edly contributed to the loss of
1,019
-
___.
Montana
and
when
is the most obvious and the most
1,108
^
that
___
1,164
w
stage,"
view
"Though Cripps has resolutely
rejected it, devaluation of sterling
1,193
——
some
the
crisis,
sterling
of
Discussing this phase of the
British crisis, Dr. Williams writes:
2,623
New Mexico
"at
port the
2,736
,
_
the
promise and stand ready to
Delaware
-
of
devaluation
cessful,
— ——
5,267
4,840
Virginia
,
measures as essen¬
devalued, to make the
Alabama
West
s,
D r i
W illiams
I
solution
a
ultimate
__ _
Louisiana
Oklahoma
condi¬
n
^recommends
several
among
tial
to
6,676
Carolina
Williams
of. labor
•J:
..
Carolina
H.
John
12,052
Washington
Florida
tio
1.1
16,057
__
North
fault
1.1
Hampshire
not V the
<
t
2.2
1.4
Indiana
South
a
on
Another
31,466
5,749
sorry
is
policies;
pri¬
marily to ex¬
-
5,684
and
difficulty with de¬
valuing sterling now is that, de¬
spite the great body of literature
British
but is due
Michigan
X
32,755
Nebraska
operation
and
The
Colorado
X
Kansas
a
system.
these
2.4
__X 35,080
Vermont
It is
of the
cause
disorders
govern-
-.
Missouri
Oregon
BEAT
trade
the breakdown of the multilateral
ment
small commission for their services, they are demoralizing a
market that has been built up through the years upon the principle
that dealers in securities acquire inventories and trade
among them¬
selves at wholesale prices.
If the public is to be sold these securities,
the price to the public must be based upon a sufficiently ample mar¬
gin of profit in order to compensate the dealer for the risks entailed
in carrying his inventory and in handling these securities, which by
OUT AND
1933)
major
a
1.8
a
SALESMEN WHO GO
Monetary
has, in my
.
situation
able
2.4
of
the
*
1.5
Maryland
only
OF
that
unfavor¬
7.2
New
members of the New York Stock Exchange execute orders in
the over-the-counter market at the best price obtainable and charge
FORTS
tending
the
'in
2.1
are
FOR THEIR ORDERS.
Con¬
aspects.
Conference
view, been
international
/Tt ;
;■
v
role
our
22,024
21,313
'
retail market.
dollar
crisis in all its
—-—.
also
26,748
This sort of practice is detrimental
industry. In other lines of business the whole¬
salers do not sell at retail. Try to buy any standard nationally adver¬
tised product at wholesale and see what happens. The over-the-coun¬
a
the
Maine
to the entire securities
that
British
7.5
Iowa
ter market is a wholesale market—not
analyzes
Texas
condition is unsound.
a
York
New
the
subject, no one knows
how much to devalue, or whether
the
new
rate
could, be
held.
COMPETITION WITH THEIR OWN DEALERS FROM WHOM THEY
ARE
Writing in the October issue of "Foreign Affairs," a quarterly
review published by the Council of Foreign
Relations, Inc., Dr. John
H. Williams, Professor of Economics at Harvard
University and for
several years past economic adviser to the Federal Reserve Bank of
busi¬
from
retail
to take orders at WHOLE¬
men
Exchange
York Federal Reserve
are
Illinois
member firms have
Thursday, September 15, 1949
1933-34
(and
important, aspect.
more
the
ties
amounted
not
sum
net
much
amount
EC A.
from
the
form
to
$844,000,000,
smaller
received
of
by
'unrequited
divert
needed
to
British
reduce
than
a
the
Britain
payments take
Such
which
cit.
Last year
repayment of sterling liabili¬
the
exports'
resources
dollar defi¬
Together with British capital
exports to the sterling area, they
explain the paradox of Britain's
having become viable over-all by
the end of last year, at the same
time that she still had a large
dollar deficit.
They mean, in ef¬
that ECA aid is funneled
through the British economy to
outside recipients, and are an im¬
fect,
portant part. of the explanation
why the expansion of British ex¬
ports since the war has
much
"toward
x
the
'
been so
sterling area
Volume
and
THE
little, in comparison, to¬
so
the
ward
Number 4838
170
dollar
abnormal
basis
removed,
either
If
area.
of
this
trading
British
were
exports
would be more
nearly matched by
imports from
outside
the
dollar
area, reducing her need to import
from us, or resources would be
released for expanding
exports to
the
dollar
area
and
exerting the
necessary a pressures
costs
and
to
develop
reduce
effective
an
trading organization
for this pur¬
temporarily; and from
point
it
would
our
stand¬
too
remi¬
all
be
COMMERCIAL
niscent of the gold inflows of the
inter-war period and their mone¬
tary
disposed of in
are
moved, there
for
cause
trade
dis¬
pattern
be
can
some
the
no
re¬
assurance
that devaluation would be defini¬
tive,
that it would accomplish
its purpose of
correcting the dol¬
lar deficit.
or
"With these qualifications in
mind, and laying
on
a
large emphasis
the correlative actions to which
they point, I have
to
the
view
number
ation,
inclining
increasing
an
of
English
economists
do) that sterling' devalu¬
to
seem
been
(as
at
some
stage,
part of the
necessary
will
be
a
of
process
adjusting the imbalance between
the sterling and the dollar
areas,
and, rightly handled, could con¬
tribute importantly to all-round
trade adjustment.
It would prob¬
ably lead the
way to an all-round
adjustment of exchange rates, and
this might overcome, at least tem¬
porarily, the bias in world trade
that
expresses
versal
is
dollar
that
itself in
shortage.
the
dollar
the
uni¬
The
fact
needs
be
to
appreciated; and this seems the
most practicable way of
doing it.
The best defense against another
vicious
circle
of
depreciations
such
even
proposal
a
careful study.
"But none of these
including
at
the
the
to
swer
make
a
And
the best
question
.sterling
new
conviction
of
be for the
United
rate
permanence
States
measures—
imbalance.
should
to
take
a
defnite
obligation
cooperate in making
This might well
it effec¬
tive.
prove
a
why, in the end, both sides
would wish to move slowly, and
reason
make
that
sure
sible
everything
pos¬
being done on other
lines; and that is, I think, the
right approach, x The need if or
American cooperation in making
was
devaluation
sterling
ferred
the form of
of
ance
form.
might
reserves
effective
more
already
that American
to,
ECA
than
aid
the
in
re¬
aid
in
now
be
continu¬
its
present
This suggestion would un¬
doubtedly encounter the objection
that it is a return to the technique
which fared
so
badly in 1947.
But
the underlying
conditions regard¬
ing production and inflation are
now
much
favorable,
more
and
the results might be much better.
"American cooperation will also
be
required in other ways, with
or
without
devaluation.
export of technology and skill, in
accordance with President Tru¬
man's
to
'Point
Four'—not
much
so
Europe
as
to less-developed
which might then become
better markets for European goods
areas,
well
as
as
>But this is
ours.
more
the task of
a generation than of a
four-year program. In the mean¬
time, I think | we shall have to
accept some form of compromise
between the
ized
kind
had,
in
multilaterally
world
of
organ¬
formerly
currencies were
which
we
convertible, and the bilaterally
organized and controlled system
which has
been
threatening to
supplant it.
As the ITO negotia¬
tions indicated, this is a kind of
commodity stabilization pro¬
posals already mentioned, there
a
number of other sug¬
gestions
worth
exploring.
An
immediately effective way to off¬
set the effects of our depression
primarly products of the
sterling area would be for us to
on
an
all-round
price of gold.
increase
in
the
gold production, which has fallen
by 40% since 1940. It also would
greatly increase the size of exist¬
ing gold reserves. Such a change
in the price of gold, it is argued
in Eurooe,
might relieve the gen¬
eral dollar shortage by as much
as $1 billion a year.
Britain and
the sterling area would particu¬
larly benefit.
But such a proposal
would
undoubtedly encounter
strong American resistance.
To
raise the price of gold would not
to
much
correct
as
to
the
ease
imbalance
so
the effects of it
trade.
The
has
recently
adopted a proposal, introduced by
the British, for placing as much
intra-European trade as possible
the
basis
censes.
This
on
of
seems
a
balanced
effec¬
more
toward
approach
li¬
general
open
getting
freer
and
trade
in Western Europe than is offered
the
by
intra-European payments
Ironically, however, it must
plan.
first
cleared
be
with
the
United
States, since it violates the
discrimination
clause
non¬
of
the
Anglo-American loan agreement.
"There is, finally, as we all of
course
recognize,
the
difficult
problem of stabilizing our own
American economy.
which
All countries
heavily dependent
are
on
foreign trade find external strains
a
chief handicap in maintaining
stability at home.
Though we
are
much less affected in this
spect
than
most,
we
are
wholly exempt from the
out imports or to
re¬
never
to
expand
urge
keep
exports in order to preserve do¬
mestic equilibrium at a high rate
employment.
sions and tolerance
other means than the
expenditure
of
our
taxpayers'
money, we have a special respon¬
sibility to strive to preserve sta¬
bility at home in ways that help
"One
could
kind
I
would
of
both sides.
on
contribution
of
make
exploration
be
a
tariff
our
we
candid
of
and
customs
our
think,
the range
want
by
If
achieve
to
a
really
we
world balance
some
administration; these,
are still effective
over rather than hinder the attainment
of goods in which Brit¬ of a functioning world economy."
New York Institute of Finance to
New
Reporter
position, due in some
growing belief that prices of the higher income issues
stabilization area, which might mean only limited price
appreciation from here on.
There is no doubt that some of the
...
J'..
pertinent lecture.
a
Firms may reserve
in
are
from
value
mains
on
courses
tions
the
"seats" only
a
lecture.
current
other
in
courses
re¬
individual basis. The
an
registra¬
firm
for
open
"Current Developments
are
in
Utilities," "Current Develop¬
ments in Railroads," "Current De¬
in Selected
Indus¬
tries," "Analysis of Public Utility
Operating Companies," and "Cur¬
rent Economic Developments Af¬
velopments
fecting Security Values."
Enrollment
ter started Sept.
.
Investment
be
given by Louis H.
Whitehead of Louis H. Whitehead
Funds"
to
early regis¬
Co. attracted a heavy
tration.
.
nance
is the
to the New
successor
Institute. It
is located at 20 Broad Street.
Regular
courses
are:
being
offered
Ott,
Robert
Business
Irwin
A.
J. & W.
Winthrop
&
Co.,
Brodsky,
Principles—
legal
advisor,
Seligman & Co., instruc¬
of
the
Stock
Exchange
Brokerage Office Procedure
—John H. Schwieger,
New York
Stock
P.
Exchange,
Estabrook &
A.
&
.
.
...
A.
in¬
Brodsky,
structor.
Accounting Background for Se¬
curity Analysis—Albert P. Squier,
director of the Institute, instruc¬
tor.
^•''-<'■7
XX'Xy?
Security Analysis I and II (two
terms)—J. M. Galanis, Shields &
Co. and Charles F. X.
McGolrick,
instructors.
poses.... The 1952/54 maturities have also been well
bought...
rence
Company Securities—Law¬
C. Cooper, Argus Research
With a 1V8% certificate rate definite for a
time, and a five-year
1%% note quite likely in the December financing, is the governmentmarket going to witness unusual
developments on the up side?
Y
It is believed in some quarters the rate
pattern which is being worked,
.
lected
Morris,
Co., and George W.
in
R.
Railroads—Pierre
Se¬
Bre-
tey, Baker, Weeks & Harden,
in¬
of the monetary authorities and with their
help and cooperation, will tend, for the time being, to limit price adr*
of most Treasury obligations.
Easy money will continue
beyond any doubt as long as the deficit must be financed and business
activity is to be of priipe importance.
But it is believed that the-
vances
...
.
money markets
that
be
are
to
want
before there will be
.
.
entering a period during which the powers
clearly the trend of economic conditions
further changes in already low interest rates..
now
see
more
►
•
Accordingly, it is indicated many buyers of Treasury obliga¬
tions are going to be on the cautious side also, which probably
means
tions.
funds will
more
be
put to work
in
income
low
,
obliga-
...
-
j.
.
,
MARKET MOVEMENTS
Prices
eligibles,
to be
1
of
government securities, especially the higher income
moving up to levels where it is believed there is likely
switching out of these obligations by non-bank holders...
are
more
*
The 2V2S due 1956/58 and the 214s due 1956/59
appear to be the most
vulnerable issue in the bank group, as far as
swaps are concerned..
«
There is considerable advice being given to eliminate these two obli¬
gations and to put the proceeds in the 1952 and 1953 eligible taps, for
the time being. , .'YiAs mortgages become available under the Gov¬
►
.
«
As for the
,
.
■;~
.
2}4s due 9/15/67-72, there has not been
switching of this bond, because it is believed there
bilities
of
prices.
as
much
still possi-
j
being made out of this obligation at higher
Nonetheless, some non-bank owners have been let-
;
are
swaps
.
ting out not too substantial amounts of the longest eligible 2J4s
in order to take up the earlier taps.
Also, there have been
swaps from the longest eligible bond into the June and December
,.
1967/72s but not in
as
much
volume
[
•:
|
.
into
as
the
1952
and
(
1953
j
eligible taps.
Buying in the 2y2% due 9/15/67-72 has been very
good, with sizable orders around, and evidently plenty of pric©
leeway.
v,
.
However, there has not been enough of this bond
j
.
around, in, sizable blocks, to entice certain of these buyers..into
showing their hand.
T'
Y
...
been
in
v
<.
;;
ineligible 2V2S due June and December 1967/72 have not
for
as
spectacular accumulation
eligible tap issues.
as
have
been
the
earlier^
It seems, however, as though the sharp ad¬
vance which has taken place in the near-term
taps has taken some of
the attractiveness away from these securities when
compared with "
the longest issues in this group. .-.
As a result, quite a few buyers
...
.
of the tap bonds are now making commitments in the June and De¬
cember 2V2S instead of the 1952 and 1953 eligible issues.
...
IN
*
BRIEF
|
Although there seem to be many who believe prices of Treasobligations are entering a plateau or have already arrived
there, others hold the opinion higher quotations will be witnessed
ury
l%mcertificate rate is still being forecast by the latter
...
group.
.
A
.
•
Split purchases are being made again by many out-of-town deposit banks, with part of the commitment going into certificates
and the remainder into the 2Y2s due 9/15/67-72.
The 2%s
c7ue 1960/65 still lead the partially-excmpts, because
many institutions consider them more attractive than the
longest eligible
taxable 2%s. . . . The longest World Bank issue continues under
.
.
I
f
j
i
I
.[
«
•
I
(
,
accumulation by out-of-town institutions.
structor.
in Utili¬
Eastman,
Current Developments
ties—Harold H. Young,
Current
lected
_
out under the watchful eye
.
Developments
Current
••
•
QUIET MARKET AHEAD
later on, because lower money rates are in the
making.
Analysis of Public Utility Oper¬
ating
;
.
2V£s due 9/15/67-72 have not been far behind because many de¬
are
using this bond for their own refunding pur-
posit banks
The
Commercial Law Applied to Se¬
curities—Irwin
Developments
Industries:
in
Se¬
Construction—
Galanis, Shields & Co.; Oil
—E. L. Kennedy, Lehman Bros.;
Steel—Oscar M. Miller, Shearson,
Hammill
Co.; Retail TradeRussell, National In¬
Corp.; Aviation—To be
&
K.
announced.
Economic
Develop¬
Affecting Security Values
—Louis H. Whitehead, Louis H.
ments
Whitehead
Mutual
Co., instructor.
Investment
Funds
—
Whitehead.
Commodity
Cincinnati Stock
instructor.
J. M.
Louis H.
Work
Hirsch
Transfer of Securities—Irwin A.
Current
Finance
tor.
and
C.
Fitzgerald,
Co.', instructor.
X Donald
Principles—Melvin vestors
instructor.
/
Work of the Margin Department
;
Accounting
G.
.
The market leaders have been the 1952 and 1953
eligible taps,
with large amounts of these securities
being taken out of the mar¬
ket through switches as well as new
money purchases.
.
.
The
to influence the trend of business.
—Paul
Dillon & Co.,
The New York Institute of Fi¬
York Stock Exchange
.
,
taps and bank issues have gone ahead a little fast.
This gener¬
ally results in a certain amount of indigestion, which is usually
cleared up by backing and
filling within narrow trading limits on nofc
too heavy volume.
.
Corp., instructor.'
semes¬
6. The six-session
"Mutual
in
course
the fall
for
a
.
preceding session or sessions is
not a prerequisite for obtaining
Enrollment
entering
Brodsky, instructor.
where attendance at
courses
to the
measure
authorities^
opportunity to reserve "seats" in certain latemay.. use<£
Work of the Cashier's Depart¬
such
"seats"
(1) to permit re¬
ment—Edward R. Rimmels, East¬
search department staff members
to take turns attending a particu¬
man, Dillon & Co., instructor.
(2) to send a secre¬
junior to take notes, or
(3) to. invite a client particularly
interested in a subject,, to, attend
combination
Housing Act, it is indicated funds will be obtained by the
sale of eligible issues in order to take on these other investments.
This would be in line with the easy money policy of the
firms will be given the
afternoon
classes
and
or
Governments
on
ernment
Inaugurate
Registration Policy
lar course, or
27
of profit-taking and hesitancy on the
part of
traders and investors, because of the sharp rise in prices of
long gov¬
ernments, has brought about a minor reaction in the Treasury mar¬
ket.
Small dealers, evidently cleaned out
The New York Institute of Finance, which draws the major part
of its student body from investment firms in the Wall Street area,
will experiment this term with a new registration policy. Investment
tary
(1059)
By JOHN T. CHIPPENDALE, JR.
A
,
Doubling the price
gold would restore its prewar
relationship to the price of other
commodities and would stimulate
of
be
balanced
Council
of
the
stockpile them.
Another sugges¬
tion, widely discussed in Europe,
is
a
pioneering
into
the
unknown,
making large demands for conces¬
Besides
the
have been
OEEC
better
success
a
our
tive
productivity. According
precedent, the solu¬
may ultimately be found in
American capital export—and the
historical
tion
^
leads to the thought,
device for retaining
advantages in trade than for
more
to
would
support it.
Indeed, it seems clear
that if we advise devaluation we
Our
Our
ciple from which it grew, has be¬
to
help
I
might
toward discrimination.
come
of
causes
carry
to
ture
others in
an¬
how
of
Europe
compete in our own market. An¬
other is a relaxation of our atti-
devaluation—gets restoring
even
real
deserves
They lie deeper—in the impact of
our
economy on the world, our
would be for the dollar this time
to stand firm.
Western
CHRONICLE
banking repercussions. doctrine of nondiscrimination,
Nevertheless, in times like these, like the most-favored-nation prin¬
-
balances
and
FINANCIAL
and
pose.
In present
self
containment,
our
circumstances, relative
however, the pressures are in the short-run
instability,
and
our
opposite direction; and until these long-run; tendency
to
outstrip
way, and this
tortion of the
ain
&
Trading Principles
—Victor L. Lea,
instructor.
Exchange Rejects Merger [■
Members, by vote of 11 to 8, decide not to become part of Midwest""
Stock Exchange.
According to
an Associated Press dispatch, the members of the
Exchange on Sept. 12 voted 11 to 8 against tbe
proposition to merge with the newly created Midwest Stock Exchange
in Chicago. The stock exchanges in Cleveland, St.
Louis, MinneapolisSt. Paul and Chicago have already^
joined in the merger. The Detroit decided not to merge - with the
Stock Exchange several months Midwest Stock Exchange in Chi¬
ago voted not to join the merger, cago. The local Exchange has beexk
but according to a statement of in Cincinnati for 64 years and is a
John
O. MacFarlane, Executive representative
financial
institu¬
Vice-President, a committee has tion.
been formed to present the matter
"For a year we have been at a
standstill while the merger ques¬
again to the membership.
Cincinnati
Stock
Concerning
the
result
of
the
poll of the Cincinnati Stock Ex¬
Correspondence
courses
will change, Charles H. Tobias, the
Chairman of the Board, in a state¬
also be given in Work of the
ment
issued to the public, re¬
Stock Exchange 'and Brokerage marked:
~
Elwell, Francis I. du Pont & Co.,
Office Procedure and Investment
instructors.
and
Security Analysis.
"I
am
glad that the Cincinnati
Stock Exchange
membership has
tion
has
been
hope
now
tossed
back
and
forth.
"I
that the member¬
ship will forget its differences oif
opinion and work together to build
the Exchange into a larger and
more active operation that will be*
a
credit to the
city."
_
J
28
THE
(1060)
COMMERCIAL
News About Banks
NEW BRANCHES
Bankers
and
REVISED
CHRONICLE
chasing, or repairing of more than
30,000 homes in the Atlanta area.
CAPITALIZATIONS
The "Constitution further indicates
"
Announcement
made
was
on
Sept. 8 by James G. Blaine, Presi¬
dent of the Marine Midland Trust
Company
George
of
President of
Adrian,
M.
and
York,
New
also of
of di¬
rectors of their respective insti¬
tutions have approved plans for
the merger of the two banks. This
is subject to formal ratification
by stockholders and approval by
the New York State Banking De¬
the
of
Bank
Yorktown,
New York, that the boards
June
partment.'
show
statements
the
of
Bank
the
Yorktown
of
$39,355,942,
to
be
of'
resources
the
merged institutions totaling $352,510,300)- The Bank of Yorktown,
located at 37th Street and Seventh
Avenue, was organized in 1926.
George M. Adrian, President and
director of The Marine Midland
Trust Company and Chairman of
the Advisory Board of the Yorktown office of the Marine
Midland,
the
management of which office
will continue as heretofore. This
will make the 99th banking
for
office
Corporation
Midland
Marine
banks in 47 communities in New
York State, which banks on June
30
had
aggregate resources of
$1,096,313,817. Reports of the like¬
lihood of the merger were current
early this month, at which time
it was reported that negotiations
had
under
been
for several
way
weeks.
*
.
its loan administration work
con¬
cerning Ohio banks and industries,
and
he
that
is
Men's
Associations,
nance
and
also
and
American Institute of
♦
of the
member
a
Credit
Cleveland
*
Fi¬
the
of
National
the
Boulevard
Bank
of
Chicago, died on Sept. 5, fol¬
lowing a short illness. He was 66
years of age. Mr. Richards joined
he
in
bank
and
1925
became
President in 1931,
according to the
Chicago "Tribune" from which we
ilso quote the following:
"Mr. Richards
born in Cam¬
was
den, Ala., son of former Gov. De
Forest Richards of Wyoming. He
entered
the banking business in
Douglas in 1898, moved to Omaha
.n
1909, and came to Chicago in
1918, at which time he engaged
in manufacture.
he
Seven years later
joined the National Boulevard
bank."
His
nephew, Longley Richards,
is Assistant Vice-President of the
oank.
The election of William A. Ben¬
son
Manager
as
of
the
North
American office of the NorthwestNational Bank of Minneapolis
made
known
President
by
Joseph F. Ringland on Sept. 8.
Minneapolis "Star" reporting
this, said that Mr. Benson succeeds
"WV L.
Jacob
Company
of
that Gerald
Assistant Vice-
Andrew,
President, has been named to head
central credit
the bank's
Andrew
Mr.
ment.
depart¬
Kunz, who retired Sept. 1
47 years of service.1 The
after
'Star" added:
"A
native
banking career with the Bank of
Scotia,
spending
several
years in that bank's Montreal of¬
fice.
He joined
Manufacturers
Trust
Company
in
1930,
since
which
which time he has served in vari¬
:erved
Nova
departments.
ous
For
the
past
eight years he has been in charge
of the bank's commodity loan de¬
partment.
*
At
*
;he
meeting
of
3ank.
t945
an
Assistant Vice-
President.
*
*
of Middlebury,
10; he
Trust
the
Company
Vt., died On Sept.
Mr.
been active
in public life, and besides having
served as Governor of Vermont,
95 years of age.
was
Weeks had formerly
had
been
an
the Addison
Associate
House
a mem¬
and State
Senate, and according to advices
Middlebury to the New York
"Times," was sent to Washington
as Representative from Vermont's
from
First Congressional District upon
retiring
from
the
Governorship
in 1931.
*
*
Bank,
the
North
of Northwestern
1922
to
1945
he
Northwestern's
until
has
now
main
been
*
Memphis
*
Kenneth W. L. Glenn, it is an¬
nounced
by the
Montclair,
moted
to
Trust
N.
the
directors of the
Company
of
has been pro¬
post of Assistant
J.,
Vice-President of the
company
in
charge of the investment division
of its trust department. The board
also announced on Sept. 8, accord¬
ing
to
the
Newark
"Evening
Trust
Co.
of
the
State
Superintendent
Parsons, will begin
1, it was made known
about Oct.
in
the "Commercial Appeal" of
Memphis of Aug. 30. Further ad¬
vices from the
same
"Founded in 1917
source
state:
the Mem¬
as
partment
de¬
the
affiliate,
California Trust
Twenty-year
service
marked j
were
ficer of California Trust
Porterfield
Earl
*
of
Company^
the
*
Directors of the Bank of Amer¬
ica
Giannini
-
Foundation,
San
by the late A.
Francisco, created
P. Giannini to assist with the ad¬
education
vanced
and
four
announced
Bank
ployee.
of
son
The four
Adcock of Los
Bertellotti
of
men
research, have
three to
employees and
awards,
America
of
to the
one
of young
medical
with
a
deceased
Richard M.
are
Oakland, Frank P.
department;
Alex
Hi
Smith, Vice-President and Super-i
Flint of Sacramento and
visor of the bank's San Fernando
Rogers
Carl
of Los Angeles.' Mr.
L.
Ad¬
Vice-President
Bank's
elected
been
dent of the
office,
Long Beach Chamber
lin
California
of
relations
Bank's
department
public
elected
was
State
charter
as
will
ing of the directors, according to
domestic
L.
Frank
King,
McLaughlin has
President. ~ Mr.
been associated
with California Bank since April,
was
York.
y-,.-
v
:v,..
*/■'
*
Announcement
election
Hal
of
*
is
of
made
Cross
W.
the
As¬
as
sistant Cashier of the Union Bank
& Trust
A
Cal.
Company of Los Angeles,
native
of Kentucky, Mr.
early banking ex¬
perience with the Citizens Na¬
tional Bank of Louisville, it was
Cross
had
his
indicated
in
Times"
of
associated
the
Sept.
with
& Trust Co. in
'■
'
-■
>
*
Los
Angeles
He became
9.
Union
the
*
*
\
...
•; ,•
California
occurred
on
Sept.
headquarters located
its
■'
1,
in
quarters of the former First
National
in
Bank
Charles
P.
President
of
dent of the
learned
Richmond.
Partridge, who was
the latter, is Presi¬
Central Valley Bank,
from the San
Fran-^
"Chronicle"
of
Aug.
31,
that
the
bank
has
states
and
Bank
California
this
time
privilege
it
of
never
During
exercised
its
accepting
deposits.
capital stock
bank will have
$250,000.
In addition to Mr.
Parsons, the board of directors of
the
bank
includes
Wallace
H.
Claypool, Charles J. Creath, Hugh
J.
Jetton,
Thomas
H.
Hutton,
Charles E.
(Chuck) Hutton, B.
Estes Armstrong and William H.
Connaughton."
♦
The
Trust
*
*
■
Georgia
Co.
Savings Bank &
Atlanta, Ga., cele¬
Sept. 1 its 50th anni¬
of
on
versary.-
than
with
the
same
Sept. 3 that
the
1
First
Richmond
liquidation)
had
on
Sept.
on
State
Co.
(placed in
that the First
and
been
merged
Sept. 1
Central Valley.
At the
founded in
time
(Sept. 1)
the Reserve
by the late
Office, receives a cash grant,
plus continuing salary, to provide
tuition and other expenses while
attending advanced management
program that the Graduate School
of Business Administration at
Harvard.
Mr.
-
Rogers, winner of
the recent A. P. Giannini national
public gpeaking
contest,
receives
allocation of funds, plus
an
tinuing salary,
the
attend
to
con¬
him
enable
Schoolof
to
Financial
Public Relations at Northwestern
University.
A.
3
P.
Giannini
or¬
ganized the < Foundation on his
75th birthday in 1945, and left the
bulk
of
death
his
estate
last June
to
3.:
it
his
oh
'
'
the
of
Hughson, Hughson,
Cal., an insured nonmember.
In
connection with the absorptions,
.having been during the
occupation, and it having been
was
While the
over
nationalized
ernment
bonds, the
paid for the companies being se¬
cured
from
the
stockholders in
virtual,
of
though not stated,
compulsory savings.
edged
effect:
market
of
disgust
form
were
established
Hughson. At the
novo
branch
Oakley, Cal.
at
was
.
•
Escalon
time
and
a
de
established
at
same
\
.
;
<
National Association at San Fran¬
*:
vy
a
two-
with
the
importance,
revulsion
against nationalization
front
because
on
very
a
wide
the
of
distribution of stocks to "the little
fellow" In France. As
government
soon
is ready
to
as
move
practicable toward de-na-
as
tionalization
The
result, the
a
first
probably
wherever
possible.
de-regimentation
take
place
will
aircraft
in
and the printing presses, although
a
nettlesome,
as
to what to do with the surplus
difficulty
remains
at
all
to
feels
taxation.
that
he
is
hit
taxed
are
dends
at
the
the
and,
are
not
France,
of
complete
A
American
taxed, at 18%
third,
double-
collected
by the companies;
tne
"normal''
The
tax
*
pays
a
on
second-mentioned
is
extra
and
criminatory,, as.; it ig ? ,not
against salaries.
The
French
is
the
fact
that,
ownership, hidden
both
capital and in¬
a
will
Many
called
illicit
profits that were
sought after in the capital levy of
1945, and hot declared then, will
now
7
be discovered.
Moreover, continuing individual
income
fiscal
is
,
ties ownership.
deposit
with
revealed
now
to
the
authorities
of
all
through securi¬
The provision for
the
Caisse
the
bearer
has
shares
been
abro¬
gated, and the 18% "normal" tax
is deducted at the source,
payments
of
dividends
but all
must
be
surtax
obligations.
(5) Then, too, as in the United
States, the capitalist is torn be¬
tween the politically-dictated al¬
ternatives
of pump-priming and
sound,
but
disinflationary,
policies which this government
believes in.
(And which were so
the
disastrous
in
to
1933-1935.)
■'
1
The
drawn
......
*
structure
price
"y
*
' '
<*
•
*
•
discernible
lesson
from
representative
inflation
then, is
currency
equity
the
this
to
be
laboratory,
in
France
that during a period of
fall and price rises, the
share
constitutes
a
fairly
good, but not complete hedge; and
recipient
surtax graduated from 10-60%
'
v
reason
be brought to
people are afraid
that, "black money" and from so-
light.7
by
First, corporate profits
at 24%; second, divi~
source
of
nature
come
tripletaxation of corporate dividends,
although actually it is only equiv¬
to
important
mentioned
be
through stock
y
,
the investor,
to
endemic
is
course,
com¬
for securities-avoidance that must
dividual's
Policy
(3) An important factor of dis¬
couragement
reduce
reported by the banks, which pro¬
vides an airtight check on the in¬
"featherbed" workers.
Tax
is to
already have been
some
Another
post-inflation, it represent
dis¬
levied
„
of
one
the media which capitalists should
assets.
branches
..y-y.;
policy of the present
government —and *
wealth
by the stockholders; and,
wider
broad
a
(4)
hold
and
there
capital
the "last capitalist stronghold."
to be
money
this
of
them-along with the rest of his
.
1945
war
reduced, there is of course longterm worry about the continuance
income.-
Richmond
-
government
taxes, and
lon
-
(In
post
v.:-'.
the head office moved from Esca¬
to
after.
one-time
a
levy.)
arrangements
companies
in many cases have followed the
unsatisfactory price course of gov¬
alent
Bank
known
placency is not exactly enhanced
by observations of Washington,
of
taxation.-
The
2)
page
capital gains tax in the French
system, *the
only
time
it
was
no
stocks
lowing account of absorptions and
establishment of branches by the
Central Valley J3ank:
Absorbed
First State Bank of Richmond and
.
1899
University
Queille
Board of Governors gave the fol¬
A special meeting of the stock¬
$20,000,000, says the
Atlantic "Constitution," the bank holders of the Bank of California
was
the
by the govern¬
prices are
virtually
frozen in the face of general in¬
flation, because the dividend is
paid at a fixed set rate.
So the
taking
ment,
the
removed
was
Sept. 1 from Escalon, Cal., to
Richmond, the Board of Gover¬
nors of the Federal Reserve Sys¬
made known
In
for
on
:he
Trust
to
at
Main
abrogated
y
industries.
an
of
of
such
no
Dissatisfaction
with
the
postwar nationalization of certain
of
approximately $12,000,authorized capital of
$1,000,000.
In reporting that the
head office of the Central Valley
000
present
level
market
Incidentally, this has had
The opening in Richmond, Cal.,
of the Central V
ley Bank of
with
black
the
X2)
Bank
"t
below
conviction.
September, 1947.
>•
fall
not
level, the franc
375r—but the public shares
.
formerly President
and General Manager of the Chicopee
Sales
Corporation,
New
1943, and
realistic
a
Vice-President at the Aug. 8 meet¬
National in
Memphis
grant
complete
his
Mr. Flint, Assistant
Cashier at the bank's Sacramento
(Continued from
tion to
applicable to the investor, is not
possible within this space. Suf¬
fice it to say that the investor
a
him
re¬
a
Under Inflation And Dis-Inflation
succeeded
granted
bank's
died
receives
son
course
the
who
has
Vice-Presi¬
Second
of Commerce. Harris M. McLaugh¬
Memphis Bank & Trust Co.
Since 1935 it has been known as
die
medical
of
branch,
enabling
Bertel¬
California
of
Beach
Long
consideration of the tax provisions
was
Bertellotti
The
Mr.
of Assistant Cash¬
son
branches, and George H.
Wyman, Manager of the Florence
and Compton office.
R. A. Reid,
the First State Bank of Richmond
until 1921 when it
U.
Oxford.
Summer
Institute of
Valley
held that
name
in
of California.
em¬
Angeles, Ernest E.
bank's
cashier's
*
phis Savings & Loan Co., the firm
more
same
F.
exchange yes¬
of the stock
tem
Now a mutual savings
institution with total resources of
sistant Secretary in that
an
of
by
K. Pollitt,^ Assistant Trust Of¬
assets
John A.
Officer
Trust
anniversaries
Banks, Homer B. Clarke. The ac¬
ceptance of deposits, said Presi¬
of Herbert C. Lookup to the bank
As¬
supervisor and is also
Company.
which
brated
as
Vice-President, of
supervision department,
Dana C. Geiselman, who is
and
Francisco
after news
split plan and ended at 245."
recently by
loan
the
IV2
at
Richmond
cently.
the bank
outstanding.
points on
shares
climbed
International
lotti is the
that:
present time
85,000
stock
of Los An¬
completed
was
service
the
School of the British
on the San
Exchange.
The
added
terday
of
Fred S. Hanson,
of
dent
*
century
California Bank
with
geles
cisco
certificate to receive deposits
a
*
*
quarter
ad
News" of that date, the addition
fftaff to succeed Mr. Glenn
the San
the
of
Montctair
bank.
it is
The
*
has
The
A
tend
as
listing
Stock
the
tion, $1,281,788 to its stockholders.
Memphis, Tenn., which, it is stated,
aas held a charter
permitting regalar banking business since
1921,
recently requested and was grant-
Judge of
County Court,
ber of both the
at
and
The
if.
John E. Weeks, President of
County
became
*
by
Addison
for
1913
American
Assistant Manager.
In
was
elected
Assistant
he
office
in
work
-
From
as
Cashier
Mr.
office
the
City Bank of New York held on
Sept. 13, Edward B. White, of the
Bond Administration Department,
appointed
later
American
Board of Directors of the National
was
began
German
Minneapolis,
Manager of the bank's mortgage
department.
*
regular
a
Senson
of
"At
John E. Oliver is President of the
The
his
began
"Chronicle"
bank's
President
New York, announces
Manufacturers Trust
Francisco
Cashier
international
banking department, receives a
cash grant, plus
continuing sal¬
ary, permitting him to travel in
Europe for three months and at¬
ier
the stock from
•
Pro-Assistant
Bankers
that
during the same period it
paid $4,120,134.38 in interest
depositors and, prior to be¬
coming a mutual savings institu¬
"Chronicle"
cock,
the Bank of America
saying that stockholders will also
vote upon a proposal to withdraw
to its
Assistant
*
the San Francisco
has
escrow
Banking.
J. De Forest Richards,
vas
Harvey D. Gibson, President of
Central
the
by Loring L. Gelbach, President. In the Cleveland
"Plain Dealer" of Sept. 9 it was
stated that Mr. Wilson, who joined
the bank in 1943, is a member of
irn
,
*
*
of
National Bank of Cleveland, Ohio,
founder of this bank will become
a
Cashier
it is announced
Com¬
Trust
to be $313,154,358 and those
pany
Assistant
of the
resources
Midland
Marine
published
30,
John R. Wilson has been elected
.
Thursday, September 15, 1949
George Brown; it began business cisco, is to be held on Oct, 11 to
with a paid-in capital of $35,000. vote on the proposal to split the
By 1916 it had deposits of $1,000,- bank's stock five for one, reduc¬
000
and
today they amount to ing the par value of each share
over
$16,000,000. During its 50- from $100 to $20. President J. J.
year history the bank reports that
Hunter, in announcing this on
it has financed the building, pur¬ Aug. 25, was likewise reported in
CONSOLIDATIONS
NEW OFFICERS, ETC.
FINANCIAL
&
-
among a
NOTE—The
diversified group of
author
acknowledges'- the
the
-
research
gratefully
of
cooperation
departments
-
of
investor-speculator
Agence Economique et Financiere,
does not seem to realize how for¬
Ste. Phalle & Cie, Morgan et Cie}
tunate he is that he does not have
in
to pay a tax on
tion for use in this article.
profits.
There is
compiling statistical
informa¬
Volume, 170
Number 4838
Difficulties in Restoration of
resumption of production of
goods
mainly for
civilian
use
brings about a change in tne trend
of
prices
makes the
commodities
wmch
difficult the
more
readjustments from
essary
riod of abnormal to
pe¬
a
of normal
one
business conditions.
nec¬
As the Bank
for International Settlements puts
it in its 19th annual report
.
this
I
devaluation
a
submit
the
dollar,
is
task
to
adjust
in¬
an
creasing volume of output more
exactly to demand under condi¬
tions of growing competition and
in general to establish a balanced
position which is at the
durable and
time
same
there
should
be
governed by
were
is
doubt
no
that
it
imperative duty of
all statesmen to get together and
restore promptly an international
gold standard. But the world is
not
the
sign
Therefore the most
to make the best of
As
long
as we are
international
gold
of
we
reason.
do is
can
bad world.
a
deprived of an
standard
the
countries will pursue autonomous
policies.
monetary
is
There
a
great danger that now that the
seller's markets have disappeared,
businessmen and workers of
rious countries will
va¬
put forward
demands for remedial measures of
one
kind
the
prevent
ments
another which would
or
existing
Bank
readjust¬
increase the
necessary
might
and
chaos.
monetary
The
International
Settle¬
ments gives the following
in this respect:
warning
for
■Tt
indeed be
would
matter
a
for regret if the countries in Eu¬
which
rope
have
taken
steps
to
balance their budgets and restrict
the
granting
credits were to
policy of restraint
prematurely. Such a policy has,
of course, not been imposed for
its own
sake, but because the
abandon
of
this
internal
of
arrest
it
can pur¬
is
inflation
For
political and technical rea¬
am in favor of leaving the
I
sons
generally.
tion of the credit restrictions be¬
decisive
fore
obtained
the
in
exchanges
To
field
might
achievements
foreign
jeopardize
the
of
of
been
the
far realized."
so
restore
condition
have
results
world
from
a
inflation
and monetary
chaos to one of
monetary health and monetary
involves
order
difficult
technical
problems. Our ultimate goal
should, of course, be to restore
both free convertibility of ' cur¬
rencies
and
stability.
exchange
This
goal can be accomplished
only by the restoration of an in¬
ternational gold standard with or
without the help of the Interna¬
tional Monetary Fund. To main¬
tain stability of exchange rates
without free convertibility of cur¬
rencies is meaningless and a se¬
rious impediment to the economic
integration
have
cost
the
only
price
Therefore,
alternative
avaij^ple
restoration of
a
coun¬
different
structures.
and
short of
the various
of
which
tries
an
inter¬
th^O&sconvertibility
national gold standard is
toration
of free
currencies.
Before
I
standard,
gold
which
should
Restoration
of
Gold
The
world
politically
is
or
an
International
Standard
not
reestablish-
the
for
comes
of the gold
standard inter¬
nationally, then I think that we
be guided by the experi¬
an
international
If and
.whenj&e
the
must raise
we
ity and depreciation of currencies
until
1925-26.
Beginning with
various
the
1924
returning
countries
were
to a gold
proud we may
by
one
one
standard. However
the fixity of the dollar in
Nineteen-Twenties, we can¬
forget or gloss over the fact
be
of
the
not
that
had
we
economic collapse
an
The
credit.
of
abuses
great
de¬
pression in turn engulfed and dis¬
credited the gold standard.
The advocates of a return to an
international
gold
standard
for increased monetary pur¬
need
chasing
arises
which
usually
current
increase
power
from
the
Convertibility
Currencies
of
The restoration of the free con¬
If
standard.
wish
we
this
con¬
successful, two
principles ought to be
vertibility
guiding
be
to
paramount:
should reestablish the
functioning of the mechanisms
(monetary, fiscal, and of course
We
the
price mechanism) which make
possible a restoration of equilib¬
rium. Before anything else coun¬
convertibility of their currencies
should balance their budgets at
low
as
of exnenditure
level
a
as
They should eliminate
prices and trade, and
possible.
firm^ca^possible
in terms of all
currencies, includ¬
political and
as
eco¬
greatly
country to another, and
as
our
ultimate goal
inasmuch
should be the establishment of
international
think
that
gold
an
standard,
I
recommendations
our
regarding the restoration of con¬
vertibility of currencies
should
vary according to country. In this
article
I shall
deal
specifically
with the cases of the United States,
France and Great
Britain, because
these countries is
im¬
an
portant factor in the reestablishof
international
an
standard,
each
and
gold
presents
one
situation different from the
a
of
other
the
case
Recommenda¬
two.
tions for the other countries
with
the exception of Germany, would
fit one or the other of the three
countries
we
going to discuss
are
hereafter.
This
is
particularly
the
return to gold
a
of
case
While I
the United States.
in
am
redemp¬
in line with the Reed Bill,
tion,
I
reestablished.
should be
favor of
think
should
we
maintain
the
present status quo as long as we
not
to
prevent
retard the restoration
of
or
say
Inasmuch
the
same
national
time
as we cannot at
have autonomous
monetary
policies,
free
convertibility of currencies and
stability of exchange, it seems to
me that we ought to recommend
conflicts
with
the
Monetary Fund.
of
rules
changed,
the
we
I.
rules
of
the
Therefore, if the
M.
cannot
F.
should
tions until such time
have been allowed
be
recommend
as
its
opera¬
currencies
to find
realis¬
tic and tenable rates of exchange.
There is no doubt that the world
and
I
profound
devised
not
the
existing
chaos.
to
t^ke
political
It
is
eco¬
disequilib¬
submit that the
was
nomic
a
monetary
I.
M. F.
care
and
known
of
convertibility of the pound
is the
indebtedness of about
war
thirteen
billion
form of
demand
dollars
in
the
deposits. While
these deposits have been
blocked,
the
British
government has re¬
leased since 1946 nearly two bil¬
lion dollars in the form of un¬
requited
exports
(exports
Nfor
tion is whether the pound should
be devalued in view of the fact
that her present policies do not
is not the best technical operation
with what should be done. There¬
of
devaluing
the pound now.
If the British
should oppose a devaluation of the
pound now, then
the pound
valued.
It
Britain
we
wonder why
should ever be de¬
is a fact, that Great
cannot
the
remove
im¬
port controls, and that the trend
of prices, and mainly of dollar
prices, has been downward for
than six months. Under such
more
good
reason
there
can
what
see
be for post¬
poning the devaluation of the
pound even if its free converti¬
bility cannot yet be restored. A
devaluation of the pound without
restoration of the other condi¬
a
tions
of
without
financial
a
anisms
stability,
on socialistic
Keynesian ideas
employment
based
with
on
in
prices,
dollars.
port quotas.
"Times"
wrote:
weakness
the
"But
of
British
policy, considered as a whole, is
that it is not in fact succeeding in
its
own
purpose.
able
being
of
standards
higher
consumption
and
of
production
standards
lower
than
support
to
of
in
are
fact possible
and
of
might
Inasmuch
go
up
on
still would
In
summary,
Britain
ac¬
remain
has
long as
socialistic
as
a
cannot
we
recom¬
mend toward her any
other policy
than: (a) to extend whatever help
we can under our present obliga¬
in
tions
a
order
(b)
tion;
for
to
avoid
to
press
desoera-
Great Britain
devaluation of the pound of
at least 20%.
France. France is econom¬
(3)
ically a very well balenced coun¬
try.
In
particular,
practically
everything she needs for food is
at home. Unless I am mis¬
taken, out of an available man¬
power of 18 or 19 millions of peo¬
ple, only 6 and 7 millions are
wage-earners.
The depreciation
grown
of
the
franc
has had
as
a
result
that the internal government
debt
to avoid economic
adiustments which are in fact in¬
problem is no problem anymore.
Furthermore, it is well known
evitable."
that
being
,
able
The cause of her present eco¬
troubles and of the dollar
the
dollars in
shortage is the inability of Great
abroad because of
exchange.
her
prices.
are
due
This
High costs and prices
domestic policies.
of economic
trouble
to her
kind
cannot be
remedied by increasing
effective
demand
with modern new
in accordance
economics, im¬
plemented
mainly
by
deficit
spending and monetary juggling.
anything, such quack remedies
can only increase external deficits
and the international insolvency
If
of Great Britain.
It
eco¬
the
that
be
crystal-clear that
economic illness can
becomes
British
cured
only
if
Great
Britain
of
France have hoarded four to five
billion
Britain to sell
individuals
private
nomic
The
gold
or
foreign
v
.
;
problem of France is main¬
ly political. From an economic
point of view what France needs
is longer hours of work (a mini¬
mum of 48 hours a week), the re¬
duction
of expenditure
for social
security, the reduction of tariffs,
and probably also a denationaliza¬
of
tion
wages
some
industries.
The
low if one takes into
the cost of living.
The
living appears bearable
only because the workers pay
practically no rent. However, as
a result of the demagogic housing
laws
agreement
even
what
is
that
restoration o£
a
the free
convertibility of her cur¬
Once confidence in the fi¬
rency.
nancial
stability and in the cur¬
is restored, France should
not have any problems regarding
her foreign exchange. What France
rency
is
stabilization
a
Joan
stringent
conditions > at¬
As to the Marshall plan
aid,
all
prominent Frenchmen
clearly that what France
needs"-now is not American goods'
but gold to reconstitute her mon¬
etary reserves.
In other words,
state
what France would like to receive
now
Marshall
as
aid
Plan
is nt
least 50%
in the form of gold .or
exchange, to be used as a
monetary reserve.
Furthermore,
dollar
it
is
the
that
opinion
the
Frenchmen
of
French
government
should be allowed and encouraged
to
buy
at
whatever
gold on the free market
This is of
rules
of
price it can get it*
contrary to the
course
the
M.
L
F.
But
here
again, if the rules of the I. M. JV
not realistic they should be
by-passed one way or another. Jt
is also absurd to permit the use
of the counterpart funds of the
are
Marshall Plan to cover budgetary
deficits.
we
In
what
permitting
undoing
are
are
we
with
such use
hapd
one
doing with the other
of the counterpart of the Marshall
Plan aid. However, the counter¬
either
be used
should
part funds
for the purchase of gold or for the
purchase of government bonds.
:
Halsey, Stuart Offers
A
by
headed
group
& Co. Inc.
Stuart
{
:)
Halsey,
the award
won
Sept. 14 of $2,970,000 Indiana Har¬
bor Belt RR. 2nd equipment trust
of
1949
2%%
equipment trust
certificates, due $198,000 annually
Sept.
1950 to
15,
under
Issued
1964, inclusive;
Philadelphia
the
plan, the certificates were reeffered, subject to authorizationJby
'
the Interstate Commerce Commis¬
sion, at prices to yield from 1.30%
to 2.75%, according to maturity.
Other
members of the offering
group were:
Otis & Co.; The Illi¬
nois Co., and Freeman & Co.
These certificates will be sever¬
ally unconditionally guaranteed
by endorsement as to payment *ofi
par value and
dividends by In¬
diana Harbor Belt RR. to the ex¬
tent of 100% thereof, and by eaeh
of that
company's proprietor com¬
panies in stock ownership propor¬
tion, namely: Chicago & North
Western Ry., 20%; Chicago, Mil¬
waukee, St. Paul & Pacific RR.,
20%; Michigan Central RR., 30%;
and New York Central
Proceeds
will
tificates
RR., 3
of cer¬
from the sale
standard-gauge
provide for new
railroad
equip¬
ment, estimated to cost $3,732.IilO,r
consisting of 37 1,000 h.p. Diesel
switching locomotives.
With
f
Raymond & Co.
(Snecial to
The
Financial
Chronics)
'
BOSTON, MASS.—Frank Fili?petta has been added to tho staff
of Raymond
& Co., 148 Slate
Street.
are
account
cost
general
officials
food sub¬
as
advantage of 10 to 12%
reduction of its export
as expressed in terms of
Great
is
experts, bankers, and
by
the
government
On June 28 the London
have
an
the
ments deficits which make neces¬
exchange controls and im¬
living
Britain
without incurring balance of pay¬
sary
I
budgetary situation,
this increase in the cost of living
will probably make necessary an
equivalent increase in wages. Al¬
lowing for this increase in wages,
principles
or
estimates
sidies cannot be increased
Great
There
should be deflated by the amount
8%.
ning at home and free trade with
foreign countries. In point of fact.
I don't think
we
can
have full
while at the
same time readjusting rents. The
temperament of individuals ixi
France is against regimentation:
and for a free enterprise economy;
wages,
advocates that the moneary means
restore f equilibrium
some
of
in¬
an
by gifts of merchandise. Nobody
7
count
to the
go
of
and
seen
or
form
restoration of the mech¬
to
From
the
in
crease
equivalent
in
tached).
for the restoration of Great Brit¬
ain's balance of payments, but ap¬
parently we have to be satisfied
with what can be done and not
favor
workers
(with
valuation of the pound without a
free play of the price-mechanism
in
posal was to reduce the expendi¬
ture for social services by
50%,
desires
permit the restoration of the free
convertibility of the pound. A de¬
fall apart*
something will
ones
that
France"* needs
which Great Britain does not get
equivalent amount of imports).
The immediate and vital ques¬
am
existing
means
government
an
fore I
This
have to be done about tne housing
situation. A recent French pro¬
among
of
cannot be maintained for long,
equilibrium.
(2)
free
and the
and that the
cost
which is deter¬
mined to pursue economic plan¬
ning by socialistic methods, makes
impossible the restoration of the
free convertibility of the pound.
We cannot have domestic plan¬
government,
ling area progressively more dif¬
ficult to place. The danger is that
the policy of insulation may be¬
come
merely a pretense, which
something
it will be found
comes
that one of the main stumbling
blocks for the restoration of the
tic
regarding the
use of the counterpart of Marshall
aid funds if we do not want to
we
such time
If and when
it appears that if the pound
should be devalued by 20% the
making exports outside the ster¬
ation in France
bility of the pound.
(2) Great Britain. Unless I am
grossly mistaken, the mere fact
that Great Britain has a socialis¬
to
shall also have
in
be possible to envisage a
of the free converti¬
will not be of great value, but it
will certainly help.
ready
particular remove import
quotas. When we discuss the situ¬
over
it
restoration
reestablish the
gold standard internationally.
are
The dollar def¬
icit is getting worse, not better.
The insulation of sterling is itself
controls
will
circumstances I fail to
The United States. Wher¬
possible
a
national
gold
(1)
tries that wish to restore the free
rium.
my
Inasmuch
nomic conditions vary so
ever
we should stabilize
price of gold at a level that
will be
adequate to cover the
me
values in freely fluctuating mar¬
standard
the
to
seems
kets.
governments of visible or invisi¬
important that
it
coun¬
it is high time to let the
exchange rates find their realistic
naturally against the issuance by
greenbacks. If we are to re¬
vert
to a system
of currencies
convertible into gold, then it is
various
that
are
ble
the
Therefore
ment
internationally, it is
raise the price ot &Qkl
between
great depression .because we star
bilized gold at the wrong level in
the Nineteen-Twenties, when so
many countries returned
to the
gold standard, and because of the
nomic
that this will be
.
each of
continues to be in
we
artificial and
were
afraid that the various
help we have extended
European countries have
starting in 1929.
It is my opinion that we had a
situation becomes ripe for the re-
only if
with
am
from one
The world had known instabil¬
establishment of the gold stfaadard
viction
func¬
in some
instances, the existing
disparities of cost and price struc¬
Nineteen-Twenties
the
of
recognize that
price of gold.
and
that the Fund suspend
reactyf pthgP,
economically1.
the restoration of
gold standard.
be
^
began
presented
of
tne
to
However, if and when the
being.
time
ment
tackle
ultimate goal.
1
over,
tries.
strongly that the currencies should
question of free convertibility
be left to fluctuate freely so that
currencies, I wish to exprefsi^ jthe market forces establish the
few remarks with regard
equilibrium rates of exchange. I
restoration
of
an
interaatibhaf realize that this recommendation
our
F.
untenable rates of exchange, but
apparently it had at that time no
other realistic alternative. More¬
price of gold at $35 for the time
(1)
monetary
what it knew
tures
vertibility of currencies should be
our first step toward the eventual
return
of an international gold
regime
An imprudent relaxa¬
exchange
M.
was
only prolonged, if not accentuated
tions with regard to currency pay¬
the
I.
it
ternationally.
ip the national income as ex¬
pressed in national currencies.
and
the
tioning
forms
usually the only means of bring¬
ing about an expansion on the
foreign account, with a reconstitution of monetary reserves and
a suppression of arbitrary restric¬
ments
when
regarding the price of gold if we
are to restore a gold standard in¬
an
under
rather its deprecia¬
or
chase, is an accomplished fact.
The question I am raising is one
ence
If the world
of
should
self-sustaining."
reason
dollar.
devaluation
the
tion in terms of goods
.
the
now
that
the
of
changes either her policies or her
government.
Only if Great Brit¬
ain changes her present policies
Monetary Stability
Some people call
ing the dollar.
(Continued from first page)
the
of
2f
(1061)
With Oscar F. Kraft & Cow
i
of
there
is
no
new
building,
Bn»cial
LOS
ert
L.
Kraft
Street.
to
The
Financial
Cwonic--)
ANGELES, CALIF.—Rob¬
Veach is with Oscur JV
&
«■'
Co.,
530
Sixth
West
*
;
.
^
30
to
currency
specified per capita
a
total amount wnich
maximum
or
..iere
whole
or
in part.
issues
of
non-standard
in
ment,
cessive
the
,«,andard of
dium of
Ex¬
value and
e x c
In
it
possible
lived
who
in
for
a
person
gold standard
country to obtain gold at a fixed
a
price in exchange for any other
item of value which he might pos¬
including all commodities,
securities, intangibles and other
forms of money.
As long as no
sess,
doubt existed in the mind
of any
that gold could be freely ob¬
one
tained
demand, the use of gold
for ordinary commer¬
on
currency
cial
sharply
re¬
stricted, except as gold stood si¬
lently in the background, serving
as a reserve against all credit and
non-gold currency which
were
outstanding. Not only were the
non-gold currencies and credits
'Of gold standard countries eval¬
uated in terms of gold, but the
purposes
far
ment
was
policies and
standard
So
on
business
as
govern¬
far
restrictions
onerous
were un-
ailingly reflected in a tendency
or gold to leave the
country or
fo into hiding. Thus attention was
irected to the offending policies,
.nd governments were forced to
ectify abuses or accept the conse¬
quences in the form of depreciatng foreign exchange values for
neir currencies or by unwieldly
jublic
debts,
which
usually
brought political retribution.
.
So
far
business
as
prices
in
which
country
good
a
sell and
a
diminish, and
changes in the
international
.o
brought
gold
movements
about
Like
automatic
allowed
other monitor or
disciplinarian, the restraining ef¬
fects Of gold on irresponsible poli¬
ticians
country in the world is operating
unrestricted gold standard,
value of all currencies and
an
the
prices in general
quoted
on
the basis of gold value.
Al¬
though the United States gold dol¬
even
are
lar is not available for monetary
American
citizens,
types of foreign institu¬
to
purposes
certain
tions
obtain it under specified
can
and
ebullient
over
managers
confounded and
are
busi¬
and business recession.
dents
of
monetary history ob¬
no country
got into
currency
difficulties or had
served
that
the
as
as
the gold
standard
as
long as its national
budget was balanced, its debt was
kept as reasonable levels and its
structure
was not unduly
Conversely, there is no
example of countries keeping out
of currency and fiscal
quagmires
over
prolonged period of time
when they fall or jump off the
gold standard.
Gold has shown
common
throughout
denominator
the
world
for
eco¬
nomic values.
a
There
are
almost
no
examples
history when nongold currencies or credits of any
in
recorded
kind have been quoted at a pre¬
mium over
gold.
Furthermore,
throughout history the price of
gold has gradually risen, as stated
in
the
which
number
of
currency
units
given weight of gold will
There are virtually no in¬
a
buy.
stances when the
fallen.
These
adequately
price of gold has
two
answer
facts
should
the contention
vised
No
A
the gold standard
would contend
it
because
transactions,
countless billions of
Gold
is
scarce.
commercial
fi¬
and
running to
dollars, have
given moment,
range
in
any
.
the
the
at
at least to ar¬
that all of the automobiles
or
city could leave town at
and
moment
same
the
on
highway.
Obviously, these
things are absurdities. They vio¬
same
cur¬
made the
philosopher
once
friction
no
with
and
to all
far
parties
merely introduced new and I bet¬
ter models, either at the same
price or with a moderate decline.
There is some reason for this.
Steel,
of the most important
raw
materials in this field, has
shown on official change in price.
Manufacturers
may
have saved
one
when
they
stopped
paying gray market premiums,
but1 total savings among the es¬
something
tablished
some
in
have increased, as op¬
cases
erations
may
cut back.
were
But the fact remains that there
have been
in
no sharp price cuts, as
textiles, to stimulate consumer
interest
demand.
and
And
after
the
of activity of the
I don't believe we
high rate
last few years
can conclude that there is still
so
replacement
demand
consumers
will buy freely.
urgent
that
a
Finally, for many of these items,
sales will now be in a period of
seasonal decline for some months
to
come.
other hard line
Among
items,
there is also some fur¬
I believe
ther liquidation to come for fur¬
niture
for
and
should
the mind of
history
will
countries
tion
so
a
that
be
be
doubt
no
the
see
floor coverings.
downward; but
gold
fit to
Whether
this
ac¬
the bases of self-interest,
to obtain the benefits of the
as
standard,
whether they
are forced back to
gold after pay¬
ing the penalties of depreciating
currency,
debt
repudiation and
or
economic confusion is not of great
importance.
What is significant
is that there is no escape from
gold.
of
the
the silliest
the
United
gold
1933
by
for
commonest
reasons
States
of
President
leaping
well
remain
is '
the
as
advanced for
to
standard
descendant
to
a
off
direct
explanation
Roosevelt in
off
the
keep
inventories
Textiles
It is
gold
a
little
to be
late
talking
Cottons and rayons
have already
had a fairly spirited recovery. If I
had been down here 60 days or
so ago I could
have warned you
that this was developing, as we
did
I
our
clients. Some of you,
own
subscribers to our
Textile Apparel Analysis, and
know,
have
cur¬
rency regime.
One might suppose
are
the
benefit
worsteds in
than
a
and
less favorable posi¬
woolens.
however, prices
and
I
or
think
are
some
here,
coming down,
of
the
reduc¬
tions may be at least a little help
his
down.
goes
that you will have great
in getting costs down.
expected to depend upon ponder¬
ous
minds which would handle
one
of the most adverse factors in
the controls.
the
present economic situation.-
the
case.
let
alone.
Just the opposite is
will
It
then
unwarranted
to
itself
in
practices,
bring ' punishment
and
retribution in proportion to the
economic crimes which either
politicians or businessmen may
persist in perpetrating.
to demand
This cost
is heard of
few
ing
are
during the fall season.
new
talk
Let
shortages.
me
Looms are coming back into
operation, and you know as well
as
I do the great weakness that
age.
this industry has for third-shift
operations. Protect your seasonal
requirements, but don't let any
one talk you into speculative buy¬
ing.
In the textile field there may
exception to this
remark—nylon items.
be
previous
one
number
more
even
does
of
new
uses
rapidly.
end-use
one
is
No
get
an
be¬
gin to clamor for yarn. Moreover,
the word "nylon" has a certain
magic for the consumer and sales
adequate supply than others
items
these
still
are
long
a
from their ultimate level.
way
Even in the
selectivity is
case
throughout
too
come
of nylon, some
busi¬
the
politi¬
r
One of the most
pressing prob¬
ternational currencies, and
par¬
ticularly Mill the po si tion of
Great Britain,
Talks now being
held
hot likely to produce any
important results.
During
the last 50 years, Great Britain
are
very
lost
first
out
in
industrial
the
sphere, to nations like Germany,
Japan and the United States. More
recently, and particularly during
the last war, she lost most of her
of "invisible"
in¬
overseas
British
to protect your
position.
>
people
are
faced
permanently reduced
standard of living unless the econ¬
a
be torn down and rebuilt
omy can
on
a
is
basis.
new
lar aid is
Short-term
-
dol¬
The problem
to help Great Britain re¬
from war devastation. >If
not
cover
deceptive.
help is to mean anything,lit
any
must
recognize
Great
Britain's
situation for the long-term prob¬
lem
it
that
is; anything else will
merely lead to disappointments.
Devaluation, of course, is essen¬
tial.
devaluation
immediate
But
is not inevitable. Other
followed
be
can
expedients
of
limitation
—
and multiple
to stimulate exports.
subsidies
imports,
rates
happens,
a
pe¬
new
riod of intense international com¬
petition
is
already under way.
foreign devel¬
opments, which were so stimulat¬
ing to the domestic economy in
the early postwar period, are
likely to be depressing for some
Whatever happens,
time
I
to
come.
also inclined to place
am
situation
steel
in
the
the
political
category. This industry is too big
and too basic to escape politics
now
in the future.
or
Whatever happens
fect
are
be¬
have
lems at the moment deals with in¬
great shortage of supply. As
a class, however, nylon items must
be covered quite a bit further in
advance than most other textile
no
you
world
important in
factors.
cal
ent
items, if
the
head¬
Governments
nomic appraisal can ignore
Not all
necessary.
this
under
field to pretend that an eco¬
ness
nylon items are as good as they
should be, and in other cases there
is
words
Whatever
Nylon yarn production has been
increasing steadily, and will con¬
tinue to increase for some time.
of
difficulty
problem, I believe, 'is
necessary.
The
again, that I think you should
regard these as temporary tight¬
ness rather than any basic short¬
sooner
same
Political Factors
A
with
say
growing
it
place
help finds
position, and
own
come.
In both cottons and rayons
the
second
your
the
proceed
finally
But
the
that
Gold merely asks to be
prevent wild fluctuations in
commodity
prices,
unwarranted
government expenditures and pub¬
tion
in
And
means
to
situation,
in the pres¬
believe that a
I
strike would have
adverse ef¬
an
business, in contrast with
the strikes earlier in the postwar
period.
A strike how would take
on
more
from income than it
by stimulating pur¬
away
would
add
chases. '
,
'
Food
And if there is
As you know, the Government
has
bigger influence over food
a
prices right now than normal fac¬
tors of supply and demand.
The control system is too com¬
There
basic
so-called
are
com¬
modities, and there are Steagall
commodities, and there are a
number of different ways in
which prices are supported. Some
food
in
products,
fact,
have
support at allf but these are
the minority.
-
no
in
I believe
will
we
no
strike, then
lower level
see a
of activity, In new car
well
as
end
the
of
in
as
clines. 1
year.
am
production
before the
And these de¬
steel,
convinced, will take
mofe out of payrolls than the cur¬
rent revival in textile activity is
adding.
.
•
,
Conclusions
1
,
views by
repeating a few questions that I
have run into in the past few
weeks, and trying to answer them.
Let
* me
sum
up
my
Has the worst been seen?—Yes,
.
The net effect of all this is that
food
prices, although declining
somewhat, have not come down
to
much
in the
been
As
as
if the
have
rayons,
Even
the
as
that a basic
medium of exChange and storehouse of value
might require intricate machinery
for making it work.
It might be
nearly
the textile field, wool items
in af less favorable position
than either cottons
tion
'this
of
advice.
badly squeezed
more
income
of value,
measure
are
had1
earlier
that
and
competitive
or
plicated to describe in detail.
to you about the textile markets.
In
One
as
be
departments
comparatively low, and turnover
as rapid as possible.
standard
take
these
all
first of all,
means,
alternative
in
on
gold
in
student of monetary
reestablished.
It
average industrial worker is more
demand.
consumer
"We cannot get along
comfortably
with women, nor at all without
can
are
so,
important
an
of your stores.
some
than has been obtained from any
(Continued from page 4)
Producers in many cases, in fact,
probably
sales trend.
or
greater satisfaction
What's Ahead foi Business?
Aim
This is also true of gold.
is
the
sources
cogent observation that
there
Food
item for
tle
exert increasing pressure against
continuance of such practices, and
inhabitants
the
of
leading
in the billions.
But
importance of high food prices
goes far beyond your immediate
the
under
consummated
all
roads
cessive proportions and the bill to
the tax-payer is already running
aegis of the gold standard with lit¬
been
sharp warnings which call atten¬
that
many
Roman
given
of
essential regulator
an
nances.
well
advocate
experience.
and
of
into a
city must be adequate to transport
Clare
I
have
not received
reports of sharply increased
the
informed
value
Centuries
building to handle all occupants at
one and the same time, of a rail¬
inter¬
road president who would insist lic debts, and unrequited
upon enough rights of way and national transactions, whether in
sufficient rolling stock to handle goods or in capital.
Or at least if
in one day all of the passengers it is unable to accomplish this
and freight tributary to his line orderly regulation of the finan¬
during an entire year, or of a cial aspects of government and of
highway engineer who would de- business it will issue prompt and
trends
monetary and currency
are superior to
gold.
media which
enough
even
that gold is obsolete and that the
unusual ingenuity of present day
practitioners in money has de¬
as
would
Price
Thus
Currency
who
architect
that there must be
elevators
in each
tall
national trade and government fi¬
them."
No Premium Over Gold
behind
pronounce¬
profound
as
rencies, credits of all kinds, inter¬
It cannot be otherwise
gold retains its prestige
about
an
logic
Thursday, September 15, 1949
,
in maintaining
trouble
of the value of non-standard
long
of
stipulate
But stu¬
itself to be
as
was
govern¬
the tyranny,
of values.
Roosevelt's
production costs per unit
Gold
confuted, since they are unable to
escape from
the beneficence or
according to the
point of view, which gold has for
centuries exercised over pecuni¬
ary transactions and measurement
reasoning
the
was
Monetary
on
tive public debts.
Gold was made
the whipping boy when credit ex¬
cesses led to subsequent deflation
extended.
characteristically quoted in dol¬
lars.
Accordingly, the mgney
Committee
tional
ized, and there has been no drastic
reduction in labor costs.
In fact,
credit
is
Economists' Na¬
profligate expenditures or
hindered in piling up unproduc¬
were
fect
standard, and the exChange value of foreign currencies
of the
ing
resented.
was
restrictions at $35 an ounce. Thus
the United States is on an imper¬
gold
by Dr. Spahr, Executive Vice-
President
prevented from mak¬
tion to
-on
out
producers have prob¬
ably been small. Many of these
industries are also strongly union¬
ments
major
to
every
blamed for the fact that
no
namely, inconvertible paper
money."
So this was done.
As pointed
in which to
one
readjustments when
operate freely.
quoted at
various rates of discount in rela¬
when
irresponsible countries into a sys¬
tem
which
has
never
worked,
the
in which to
imports tended to
exports tended to
the resultant
terms of trade led
increase while
which
made
we
repudiate our
follow other
us
and
poor one
That is,
ouy.
turn
standard countries
Even at present,
con¬
was
Let
contracts
cerned, unwise extension of credit
brought about rising commodity
nessmen
gold.
un¬
excessive taxes
currencies and credits of non-gold
were
gov¬
on
Friends,
holdings.
gold
finished.
gold
ment
concerned, unbridled is-
balanced budgets,
.nd
are
President
on
of non-gold currency,
uance
debts payable in gold
many times
the amount of
our
late
has
nancial
<
"Look,
are
that
reaching effects
was
tions
Policy,
ransactions.
of
practical operation, therefore,
was
me¬
civilized
Adherence to the gold
.ad
restrictions,
ing penalties in futile efforts to
force their populations to accept
this money at parity with gold.
a
as
g e in
Business
ernment
all kinds, due
largely to the inability of gov¬
ernment to resist the temptation
of trying to
get something for
nothing by issuing non-gold cur¬
rencies, and concurrently by fix¬
currency
a n
Government Policies and
monetary history is replete with
instances of depreciation of nongold
h
Effects of Gold Standards
debts in limited amounts.
these
or mone-
ountries.'
,
Fourth,
non-full legal
tender money is
made legal tender for private
of
historic
of
dawn
device has been able long
replace the use of gold as a
o
retained for private use.
spite
demonstrating
ary
government, to its embarrassment,
whereas full standard currency is
In
in
other substance
.nes no
then tend to flow to the
currency
Yet monetary expe-
clear
since
.iat
frailties of hu-
the
on
is
ience
money
others which
technical and
nature.
.ian
defects, part of
many
based
re
is made inter¬
changeable on demand with gold
at
specified institutions.
Tnird,
subsidiary or fiduciary money is
made legally acceptable for taxes
and other payments to govern¬
fiduciary
are
..em
be issued, or by some other
limitation of quantity.
Second,
may
is perfect.
standard
such
..at
various 'Obliga¬
payable in gold and said in
aggregated
substance:
(Contir.ued from page 3)
restriction by law of subsidiary
and
CHRONICLE
At that time he recited
standard.
What Is The Gold Coin Standard?
as
FINANCIAL
COMMERCIAL ■&
THE
(1062)
a
you
sional
they
as
Government
market
would
had
not
buying.
political realist, I point out
that there
election
is
next
a
Congres¬
year.
I
am
so
continue despite the
fact that stocks are assuming ex¬
will
as
declines in total produc¬
concerned, although this
is not true for individual indus¬
are
tries such
as
automobiles.
.
far as further declines in
the general price level are con¬
cerned, although there are also
exceptions in this case and many
textiles are probably among them.
No,
so
been
refers
production, then the answer is
Has
quite convinced that high support
prices
far
tion
a
turning
reached?—If
to
this
point
question
Volume
170
more
less
or
Number 4838
immaterial.
businessmen will find much
difference in their operations,
the
low
point
few
a
points lower
or
points higher than the
few
a
July fig¬
ure.
From
the
viewpoint of whole¬
sale prices
generally, the turning
point is still many months ahead.
Although businessmen should
judge individual commodities on
as
own
merits, the price trend
whole
a
be
must
deflationary
for
regarded
as
time
some
'■!
first
the
profit—the turning point
a
is also
distance
some
ahead.
problems in many cases
tractable; dollar volume
will be
cases
in
provement
Cost
in¬
seem
in
most
lower; and any im¬
operating margins
will be the exception rather tnan
the rule. '
;
Will
the
Present
'•Carry Through"?
questions
of
don't
I
—•
sort;
of
increase of 3%
an
But
general
that
assume
in
means—will
a
term.
have
we now
vigorous revival of production,
employment and demand? To this
a
is categorically, "No."
allows for the
answer
(This,
of
volume,
1948, with six stores showing red
FOOD
above July, but 2%
the
Por the first eight months of 1949, private construction was
SCHEDULED
SET
AT
ROAD
.
STEEL
ON
STRIKE
THREAT
6%
!;
RAIL¬
INTERPLANT
OF
But
lieved,
that
and
this
I
do
have
never
believe
not
recession
is
be¬
now,
the
begin¬
ning of a major depression. Sales
will probably lag for
some time.
Most stores will be showing de¬
under
creases
the next six
there
from
year ago during
eight months. But
a
or
will
be
store
wide
store.
to
variations
Good
mer¬
chandisers and strongly competi¬
tive organizations will get a big¬
increase
at
this
corn resulted from fairly liberal receipts, an easing
premiums and the prospect of a near record harvest which
will soon begin to move.
Flour prices moved steadily higher during
the week.
Sales of advertised brands of family flour showed con¬
in cash
siderable expansion and government buying reached a considerable
Demand for hard wheat bakery flours remained slow.
hands down
volume.
Trading in
not
go
^
Sept.
on
futures developed
Coffee
1.
irregular
an
actual market continued to edge higher.
Most
roasters throughout the country announced an advance in their prices
during the past two weeks.
In the Chicago livestock market, cattle
while
prices
the
somewhat
turned
late
in
easier
dealings.
Still moving in a narrow range, cotton markets followed the
trend
of
reach
m&y not, "The Iron Age" points out.
a
recent
with
weeks,
spot
values declining steadily
to
low for 2years.
new
Activity in spot markets broadened somewhat and inquiries
Steel
ordering approached frantic proportions during the past
two weeks with perhaps a third to a half of it for strike hedging.
The hedge buyers fell into two groups: those who wanted steel
shipped before what they then thought was the strike deadline and
those who wanted to get on' the books to be early in line if a strike
came
into effect
trend
time.
others
mean
light arid prices continued lower although
cocoa was
showing a firmer trend at the close.
The raw sugar market was
active and stronger.
The refined sugar market, however, was unset¬
tled as most refiners rescinded the 10-point advance scheduled to
on wages
It is too soon to say that the fourth round wage demand has been
completely killed off. Because steel does not set the pattern this year
does
that support levels on next year's
Weakness in
•
■
over.
HIGHER
LATEST WEEK
will be at 90% of parity.
crops
but lost its argument for
possibility that limited lines of contributory social insurance. It knew pensions had to come but the
board's
activity have been through "their
report may bring them faster. The board's recommendation
worst," but expects that the "carry —social insurance to cost 4c per hour per 2000-hour work year and
through" even in these cases will pensions to cost 6c an hour on the same basis—is actually just about
be limited and subject to inter¬ 5c per hour more than U. S. Steel either offered this year or has
ruptions and reversals.)
agreed to discuss. But most companies, this trade authority adds,
The recession, in short, is not opposed non-contributory programs, or in fact any substantial cost
yet
last week
food
Strength in wheat reflected active mill buying against family
the industry but practically eliminated the chances of a
crippling steel Strike. Still, several knotty problems have to be re¬
before steel labor peace is certain but the chances are ex¬
cellent that they will be solved quickly, states "The Iron Age," na¬
tional metalworking weekly, in its current review of the steel trade.
won
commodities
most food
wholesale
Bradstreet
flour sales and the likelihood
CURRENT WEEK
surprised
industry
in
firmer trend
a
&
Continuing its mildly upward movement of the past few weeks,
daily wholesale commodity price index, compiled by Dun &
Bradstreet, Inc., rose to 242.44 on Sept. 6, from 239.26 a week pre¬
vious.
It compared with 277.97 on the corresponding date a year ago.
Grain markets were again irregular with wheat rising sharply
while corn and rye turned downward. V:
„■ ■''.v.,
The moderate tone of the Presidential steel board report not only
The
was
Dun
the
solved
course,
HIGHER FOLLOWING SHARP DIP
TURNS
PRECEDING WEEK
TREND IN
*
OUTPUT KATE FOR
80.4%
and 1947.
Holding under prewar
30% less numerous than in the same
reported.
1948
WHOLESALE COMMODITY PRICE INDEX CONTINUES
eight months this year, construction put in place
totaled about $12,200,000,000 2%
above last year.
The gain was
picked up in the first quarter this year, the department said, with the
second quarter about the same as the like quarter in 1948 and the
third quarter below that period last year.
;
the
first
*
WEEK
the holi¬
price index reversed its
downward movement of the previous week.
The index rose to
$5.82 on Sept. 6, from $5.78 on Aug. 30. It was, however, still 15.2%
below the comparative 1948 level of $6.86.
building and construction of stores, restaurants and
being down 37% and 34%, respectively.
♦
148 in
to
were
were
PRICE INDEX
There
under the like month
below last year, while public construction was up 30%.
failing
1939 when 209
IN
and
of
weeks
concerns
week of
led the drop,
For
like
a
I
the 'comparable
1948.
garages
HOLIDAY
IN
Bradstreet, Inc., reports. Casualties were at the lowest level
since February, but they exceeded the 83 and 60 which occurred in
August, "construction put in place," the Com¬
Department reports was valued at $1,900,000,000. This repre¬
sented
FURTHER
DECLINE
and industrial failures declined
Dun &
the
reported by 88% of the stores submitting net gain data.
were
FAILURES
31
day-shortened week ended Sept. 8 from 174 in the preceding week,
For the month of
"carry
through" is too indefinite
sense it
of
obtained at the half year mark of
figures,
Improvement
this
Industry
(Continued from page 5)
months
Industrial
make
the
six
"
(1063)
Commercial
to
viewpoint of operat¬
problems—that is, trying to
ing
CHRONICLE
previous year only 6% of these identical
stores had loss operations.
bpecialty stores with annual sales over $1,000,000 had a decline
in net gain after taxes from 4.3% to 2.7%.
Profit ratios below those
come.
From
FINANCIAL
BUSINESS
merce
their
&
The State oi Trade and
total
in
production in the next six months
is
COMMERCIAL
Very
few
whether
THE
off.
Farmers
more
numerous.
areas
where ginning started
offering
early.
were
were
freely, particularly in.
more
Final figures on the 1948 loan stock as issued by the CCC,
placed total entries for the season at 5,271,549 bales, repossessions
at 1,477,988 bales, and the net stock pooled by the corporation as
.
of Aug. 1 at 3,793,561 bales.
The steel
Demand for cotton textiles remained strong with substantial
industry, according to "The Iron Age," set up this week
to operate at 85% of rated capacity. U. S. Steel blast furnaces 'in the yardages reported sold into the first quarter of next
ger share of the business and will
year. Supplies
improve their position in the com¬ 'Pittsburgh district which were banked early in the week because" of of print cloths for near-by delivery were scarce and the market was
a
threatened
railroad strike on the company's road were promptly featured by further advances ranging from J/40 to 1(5 per yard in dif¬
munity.
There is no single solution to put back into operation when the Strike was postponed for two weeks. ferent constructions. Sheetings were firm to slightly higher for the
current
problems.
merchandising
tained.
But
I
Aggressive
be main¬
should
find
in
some
cases
that intensified promotions some¬
times have a kickback; stores find
that .; their
regular
moved
slowly and has be¬
come
more
called for is
ergy.
Each
effort
mere
$3.50
a
composite
scrap
ton higher in Pittsburgh and $1
rose
As
to $25.75
per
ton higher in
"The Iron Age" steel
ton, the biggest
consequence
a
by $1.83
a
this week
that
the operating rate of steel companies having 94% of the
steel-making capacity of the industry will be 80.4% of capacity
for the week beginning Sept. 12, 1949, as against 84.2% in the
preceding week, or a decrease of 4.5%, or 3.8 points.- The cur¬
co¬
rent rate earlier had been
ward
ale must not be damaged.
Inven¬
and commitments must be
by
the
Institute
placed at 86.6% but
threat of
the
on
an
revised down¬
was
interplant railroad
strike at U. S. Steel plants on Tuesday,
tories
'This week's operating rate is equivalent to 1,482,200 tons of
controled, but sales must not be
lost.
The selling efforts must be
aggressive, but non-promotional
items cannot be neglected.
In short, distribution is back to
normal.
The
present
situation
calls for your best efforts.
And
the potential improvement in the
economic picture beyond the next
six to eight months promises a
Loadings of revenue freight for the week ended Sept. 3, 1949,
totaled 703,930 cars, according to the Association of American Rail¬
worthwhile reward for the efforts
roads.
steel
ingots
and
1,552,200 tons
castings
for
the
industry,
entire
week ago, 1,539,300 tons, or
a
83.5%
and 1,732,200 tons, or
96.1% of the old capacity
1,281,210 tons for the
average
ADOPTION
This
below the
Ball, Burge & Kraus Add
'■■■«'
CLEVELAND,
OHIO—John P.
Connor, Daniel R. Corcoran, Ste¬
phen J. Grosse and Morley Tolles
have
been
added
the
to
staff
of
Ball,
Burge
&
Kraus,
Union
Commerce Bldg., members of the
New
York
Exchanges.
and
Stock
Cleveland
one
to
month ago,
year ago and
week in 1940, highest prewar year.
to
WEEK
LATEST
OF FIVE-DAY WEEK
IN
decrease of 42,982 cars or
represents
a
of
decrease
corresponding week in 1948 and
13% under the
*
GREENSBORO,
C.—Walter
L.
N.
E. Bain, Arnold Borden, Henry
Donald
MacRae
become associated with
a
AFFECTED
RAILROAD
5.8% below the preced¬
191,201 cars, or 21.4%
decrease of 105,009 cars,
simila^ period in 1947.
the
fact that the five-day week became effective in
Sept. 1, the total of carloadings reported for the
week ended Sept. 3 is not strictly comparable with the corresponding
weeks of previous years or with the previous week this year, since
some
of the cars loaded
in
account
on Saturday, Sept. 3, will not be taken into
carloading records until the following week.
Lewis & Co.,
Jefferson Bldg.
W. A. Armfield & Co.
(Special
to
The
Financial
distributed by the electric light
industry for the week ended Sept. 10, was estimated at
5,258,090,000 kwh. according to the Edison Electric Institute.
This
represented a decrease of 285,823,000 kwh. below the preceding week,
91,964,000 kwh. or 1.8% higher than the figure reported for the
week ended Sept. 11, 1948 and 204,790,000 kwh. in excess of the
output reported for the corresponding period two years ago.
OFF
DUE
TO
A. Armfield & Co. is
a-
securities
business
C.—W.
engaging in
from
in the Reynolds Bldg.
offices
of
and
output for the current week was made up of 101,842
16,171
trucks built in
the U.
S.
and
4,219
cars
and 1,811
trucks in Canada.
Output
was
year ago was 78,677 units and, in the like period
held down to 53,165 units.
a
Dun & Bradstreet, Inc., reports in its
a year ago,
y.,j
Interest in women's coats
noticeably with fleece, tweed and
rose
covert among the popular fabrics. The retail volume of both men's
and women's shoes increased moderately along with a rise in the sales
volume of men's worsted suits.
Retail
food
volume
continued
Total unit Volume
week.
parable week
to
increase
seasonally
the
remained slightly above that of the
past
com¬
a year ago.
Despite the closing of many businesses for the Labor Day week¬
end, wholesale order volume was maintained at a high level in the
period ended on Wednesday of last week; it continued to be moder¬
ately below that of a year ago. The number of buyers attending many
wholesale markets dropped noticeably the past week, but remained
slightly above the number in the comparable 1948 week.
Department store sales
country-wide basis,
a
on
as
taken from
the Federal Reserve Board's index for the week ended Sept. 3, 1949,
decreased by 4% from the like period of last year and compared
with
decrease of 1% in the preceding 'week.
a
ended
Sept.
3,
1949,
registered
sales
a
For the four weeks
of
decrease
7%
from
the
arid for the year to date a decline
a year ago
of 5%.
In the wake of cooler weather and £tepped-up purchases of
back-to-school
York
last
sales
were
of
a
seasonal
and
reflected
week
merchandise,
upward
an
retail
trend.
in
New
Department
trade
store
estimated at about 2% above the corresponding period
year ago.
According
to
v>
the
Federal
Reserve
Board's
index,
sales in New York City for the weekly period to
by 6% from the
increase
of
7%
same
period last
week
an
1948.
For the four weeks ended Sept. 3,
was
reported under that of last year.
creased
year.
department
Sept. 3, 1949,
In the preceding
registered above the similar week of
1949,
For the
a
decrease of 8% was^
year
to date volume de¬
by 7%.
NOTE—On
another page of this issue the
reader will find
the most comprehensive
of business and industrial statistics.' showing the latest week, previous week,
month,
previous year, etc., comparisons
for determining
the week-to-week:
trends of conditions, by referring to
"Indications of Current Business Activity," a
coverage
of
merchandise.
be very moder¬
of trade.
latest
1941, it
Fall
a year ago.
increased
cars
in
Many retailers who conducted back-to-school apparel promotions reported that consumer response was slightly above that
HOLIDAY CLOSINGS
According to "Ward's Automotive Reports" for the past week,
production for the United States and Canada declined
to an estimated
124,043 units from 146,039 units (revised) in the
previous period as a result of Labor Day shutdowns.
The total
N.
current survey
store
OUTPUT
Chronicle)
WINSTON-SALEM,
ately below that of
power
AUTOMOTIVE
evince considerable interest
to
The total dollar volume of retail sales continued to
corresponding period
ELECTRIC OUTPUT DECLINES IN LATEST WEEK
motor vehicle
>•
continued
pers
BY
OFFICES
have
McDaniel
Although most stores were closed on Labor Day, increased con¬
purchasing in preparation for the holiday boosted total retail
volume in the period ended on Wednesday of last week slightly above
that of the preceding week. In the days following the holiday, shop¬
railroad offices
and
(Special to The Financial Chronicle)
and
was a
It also
FOR
The amount of electrical energy
.
McDanie! Lewis Adds Four
Leak
or
Due
(Special to The Financial Chronicle)
•
REPORT
CARLOADINGS
ing week.
yVv'
AT A HIGH
LEVEL THE PAST WEEK
compared
a
,
expend now.
RETAIL AND WHOLESALE TRADE MAINTAINED
sumer
The American Iron and Steel Institute announced
ordinated with every other—costs
must be brought down, but mor¬
you
week.
gross
advance of the year.
en¬
be
must
steel
Chicago and Philadelphia.
What is
than
more
1
has
stock
less well-assorted.
Meanwhile the steel scrap market is on a rampage with prices of
N'o.
regular feature in
every
Thursday's issue of
the
"Chronicle."
32
COMMERCIAL
THE
(1064)
form
—a
As We See It
J pears almost futile to remind, or
t: the rank and file of the relatively
should
we say warn,
of the other familiar paraphernalia of pension
schemes no matter what their form, but only by the
of laying by substantial parts of current
forms which can be expected to sustain and
process
income in
A Strange Virtue
V
•
sees
■
*
<
'
Do
these
and
the other
gentlemen who
argue
expense of some one else, of
which tempts one to become a spendthrift? Or
sion plan (at the
expanding facilities is a job of as¬
sembling from these individuals
or their chosen agencies the dol¬
lars
which you
will spend for
labor and materials to create new
course)
tools
The Basis for Management Pensions
,
Under
ordinary circumstances, enterprises bid for
of exceptional ability by offering high cash rewards
in salaries
or
other forms of current
compensation. In
themselves against com-
severe
tax limits
are
imposed
these higher brackets, all but
y
upon
a
-.■
!
J
men
v^ry
ulti-
mately not to the executive, but to Uncle Sam. Thus
in actual practice it would require a
very large cash
increase in salary to enable a top executive to
provide
for himself the equivalent of
{
,
a relatively modest pension
supplied by his employer. Such considerations do not
apply in any great degree to the rank and file of the
workers.
Aside from
many cases
the
| top executives that
are beneficiaries of pension plans
sad substantial salaries initially started at the bottom of
;
|
the ladder in their organizations and worked their
.
to the top and the opportunity to he similarly rewarded
is
.
*
open
today,
as
formerly, to the rank and file of
way
em-
ployees.
,
r
„
very much like the
who work on Main Street.
Another Consideration
There is another consideration
V
i
v
J
regarding all this which
may be regarded as a sort of corollary to what has just been
said—and a very important
consideration, too. These pen¬
sions are tb be regarded strictly as in lieu of
salary increases
lines,
the
banking
collaterally, to provide a market
outstanding securities.
for
Everyone thinks his
job is
own
people ciaj unrest. The expansion of the
gas business not only is provid¬
They
their business in the ing $800 million annually for con¬
struction, most of which goes for
same way that, others do. Many of
them mow their lawns on Satur¬ labor, but is creating new perma¬
nent jobs at the rate of nearly
day afternoon and some of them
15,000 each year with $45 million
even go to church on Sunday. The
of a n n u a 1 pay. An expanding
political p i c ture of what Wall
about
go
■
Street
is
and
what it
does
is
a
me
explain briefly what it
investment
They
bankers
underwrite
new
as
ciate
leader
or
issues
manager,
themselves
constant flow of
really do. the capital
of
securities, that is, several invest¬
ment banking firms, of which one
acts
requires constant
economy
oppor¬
tunity for' the employment of our
national
savings, it requires a
distorted one.
together
asso¬
for
new
markets,
capital into
it
and
re¬
quires adequate investment bank¬
ing
new
machinery to assemble the
capital required by business.
'7
"•
y"
V' •'!
A New National
a
'
'
'•••
V-.
Policy
particular transaction and agree to
purchase an entire issue of bonds,
preferred stock or common stock.
Many serious minded people are
greatly concerned about what has
been happening to our economy as
The purpose of underwriting is
a result of our political behavior.
to guarantee that the corporation
They think we are drawing away,
seeking to obtain new capital will
or
the being drawn away, from
get it. While underwriters buy
our
system
of free
enterprise.
and pay for the securities initially
Some say we are headed stright
with their own funds, they do not
down the road of Socialism and
buy with the intention of contin¬
that nothing can turn us back;
uing to own them. Instead, they
I do not know whether that is
turn and sell them to the public
true of not.
I do know that a
generally, to individuals as well
as
to
institutions. This is done in
part through their own organiza¬
tions
this, the fact is that in
pipe
are
Let
these procedures. In
goes
of
function of invest¬
is to raise capita]
by the purchase and distributior
of new issues of securities, and,
Overall,
that were said of it.
I find the economy represents unemploy¬
people who work in Wall Street ment, depression, distress and so-
is
relatively few cents out
[ I °f each dollar of increased cash compensation
form
,
this way they not only assure
petitive bids from other enterprises seeking top talent,
but from the allure such men always feel from the
op-$
Importunities to go into business for themselves. They
v
no
years
and
earn
a
and
in
part
through
other
investment bankers. Some few in¬
vestment
bankers, perhaps a
are principally engaged in
underwriting, with little distribu¬
dozen,
tion
even
of
underwrite.
the
securities
they
Several dozen others
result of what
what
we
have done
and
doing is to change
the pattern
of investments and
that our capital markets are pro¬
foundly affected by this change.
we
For
has
some
permitted
Whether
is
it
ultimately good
in
our
society
aggregations of capital in
bad
large
to
hand
have
of
individuals is
impair
we
hacking at the
economic
are
of our American
adopted to effect
measures
redistribution
of
wealth
time
to
save
have
so
income
net
at
the
the
and
that
tunate
these
the
are
is
this
true
people
because
who
have
heretofore supplied the risk capi¬
essential
is
which
tal
to
ex¬
an
invest¬
ments were not restricted by law.
They were not required to seek
safety first. In their investments
they invited risk because, if suc¬
cessful, the rewards were good.
panding
Their
economy.
Businessmen believed in business,
American
in
able
were
business.
business,
to
save
We
are
business
when
able
longer
and
in
a
and they
invest in
sad
managers
state
no
are
willing to invest
business they
or
their savings in the
manage.
*
of
Leveling
A
During
Real
Income
two., decades
there has been a great leveling
of real income.
Personal savings,
the
past
while running at a very high rate,
now
rest with people who tradi¬
tionally
than
save
through
direct
the
means
other
purchase of
se¬
curities. Most of these people are
either
uninformed
or
grossly
misinformed
regarding
the purchase of stocks and bonds.
Many are frankly distrustful, of
business, especially big business,
and
actually want to withhold
their savings from business. And
so they turn to life insurance
or
to savings banks, savings and loan
associations and similar agencies
largely
through which their savings
returned
to
insurance
the
are
Life
far the
economy.
has become by
important single
channel
which personal savings
flow into new long-term capital
for business.
Last year the ad¬
mitted assets of American life inmost
through
companies
surance
increased
by
$3.8 billion]
The flow of sav¬
ings through this one channel is
at a rate greater than $15 million
each
for
business
day. Insurance
companies and all of these other
agencies are obligated by laws or
by the nature of the funds en¬
trusted to them to seek safety first
investment, mostly in bonds and
mortgage loans. These funds are
not available to assume the full
risk
of
business
enterprise.
15 years national
some
directed
distribution
for
of
the
the
policy
toward
a
re¬
wealth
of
the
Inadequate Source of Risk
Capital 'c;i
What I
the
am
describing to you is
underlying
our
condition
capital markets as they have ex¬
isted for a considerable time in
social | the past and as they appear likely
reform.
That is our present pol¬
| to exist for some time in the fuWhat I am describing to
icy.
That is our present philos¬ ! ture.
ophy of government. It was born I you is a fundamental social conpurpose
of
principally in selling.
fostered
also
stock
nothing" school of p o 1 i t i c a 1
thought.' Substantial Wealth held
thoughtful, persons
age
by individuals is disppearihg. In¬
danserouslv inadeauate
exchanges and do a broker¬
business. Some may specialize
in¬
that
centive is gone. It is most unfor¬
Some
of
are
reduced
savings
on
engaged
members
beside
destroy the incen¬
or
economic
be
to
more than $25,000
how he meant it!
are
active as underwriters, but
they also maintain extensive sell¬
ing organizations with offices in
many cities. Others only occasion¬
ally or never underwrite, but are
may
one
said
are
been
nation
be
keep
year; and
or
ago,
our government
should
man
—
naturally antagonistic to wealth.
Steeply graduated
income
tax
rates
have
greatly reduced the
ability of the ordinary successful
pretty important and the invest¬
ment banker is no exception. I am
sure you will
permit me to say
T
iV '
Functions of Investment Bankers that I consider the
raising of capi¬
tal to be vital to the operation
The raising of new capital is
of our economy. Without the re¬
the specialized function of busi¬
ness organizations called "invest¬ generative process of new invest¬
ment of capital and new produc¬
ment bankers."
Sometimes they
tion, our economy could not ex¬
are also tagged as "Wall Street"
and are pictured as having horns. pand. It could only stagnate and
contract. An expanding economy
I do not know what Wall Street
represents progress, full employ¬
was in
the old days.
Maybe it
contracting
deserved all of the horrible things ment, prosperity. A
very
;
likewise in this way provide incentive for the best
wto do their best. But under existing circumstances,
the
stations, gas holders,
meters, all of the properties
needed in the gas business.
But
men
in
compressor
unfortunately such considerations as these are all
too apt to weigh but little with the rank and file as against
clever references to the fact that executives are already
being provided for with substantial pensions. The trouble
is, of course, that the "average man" is not likely to take
the trouble to think about such matters carefully. Among
those familiar with the situation, the fact is well known
that the pension idea as applied to top executives is very
largely a result of the same New Deal or Fair Deal phi¬
losophy which now spawns these strange ideas about some
sort of magical self-insurance
against the "economic haz¬
ards" of life.
The greatly increased demand for pensions
among highly paid executives reflects a desire for something
which the current tax laws
largely deny these gentlemen
the privilege of doing for themselves.
\
'
fifteen
or
The
particular classes of securities.
ment
the
taxation
prominent in
a
(Continued from page 5)
in
prevent their
very legal
by normal
taxes and surtaxes, by inheritance
taxes
and gift taxes,
by excise
taxes and excess taxes, by double
takes and just plain taxes. Ten
of
businessman
tools. Raising new money for your
at¬
measures
system.
and Our
Expanding Facilities
for the morrow?
■
been done by
means
lations,
New Money
do they
believe that such a plan will work when all the people
become parties to it and all then take no further thought
V
has
same
in
taken to
increase and to prevent any sub¬
stantial new accumulations. This
roots
should be
we
been
not
broadside
effective
very
been
have
any
tive to try to create new accumu¬
grateful—but this is a different mat*
ter from forcing the weaker to try to carry an additional
load merely because the stronger are able to bear it.
fact
tack, but
have
we
monopoly. Of course, many forces constantly at work
tend to favor the more efficient enterprise-—and for that
and hears. Let evdn the President's board speak:
this way really mean to suggest that the way to provide
for one's future is through a "social insurance" or a pen¬
*
these
to
by
I suspect,- but I do not
know how to prove it, that when
"The
inauguration and operation of insurance and
pension programs wi\l make a considerable contribution
to the attainment of the economic stability so necessary
at this time.
With the knowledge that the economic
hazards of life will be at least partially met, workers
will be more apt to help sustain consumption spending
at a high stable level."
'
objection
fortunes
out
the point.
industrial "patterns"
is found in
the fact that they introduce an arbitrary element of
fixed costs which tend to drive the weaker enterprise
out of business and thus nurture the development of
Another
dividual
wiped
the
which have been developing in recent years
spend more freely on the creature comforts of the day. Thus
the argument seems to run to the effect that the way to pro¬
vide for old age is not to save but to spend recklessly. All
this sounds a little incredible, but one must believe what he
,
comparable to that observed in men of
top management ability.
Strangely enough, one of the advantages claimed for
pension schemes now being installed and now proposed by
the President's steel board (tantamount to advocating a wel¬
fare state via labor unions) is that they will lead people to
*Iaily
normal.
workers in any way
enlarge production in the years to come.
jv'
they would doubtless take were tax and
They are individual rather than
which
spond at least in a general way with the differences in abil¬
ity to provide the services desired. Of course, none of these
considerations apply in any significant degree to the wage
earner, despite some commendable effort on the part of the
President's board to avoid flat uniformity in the application
of its recommendations. In any event, there is in the very
nature of the case no difference in the capacity of individual
any
age-old
Thursday, September 15, 1949
CHRONICLE
general in nature. They vary from company to company,
according to the ability and willingness of the individual
enterprise to buy the best in management direct —just as
salaries themselves vary freely.
There is, of course, no
"scale" or any other form of uniformity in either executive
salaries or in executive pensions, and the differences corre¬
simple fact that there
; is no way in which all the people can guarantee all the
■•/i people pensions in their old age except in the very
general sense that the old and improvident shall be re¬
garded as a charge against the young and productive
and that even this guarantee can be made effective not
'by promises to pay, "reserves" of this or that variety,
or
FINANCIAL
other conditions
(Continued from first page)
r
&
out
of
the
distress of
a
great j dition which produces an unbaldepression. It has been j anced demand for investment in
by
a
"something
for
senior
securities
and
what
consider
many
is
source
a
of
Volume
170
Number 4838
THE
risk capital. Let us examine these
stocks
markets in
under
At
more
detail.
time when the government
a
rapidly expanding our pub¬
lic debt, bond prices were main¬
was
tained
at
reached
a
.high
level.
They
peak in 1946 and have
a
receded
only a little from
that high point.
A composite of
public
utility
A
rated
bonds
now
sold
never
to
yield less than
an
annual average of 5%
during the
10 years of the 20's; or less than
an annual
average of 4% during
the first five years of the 30's; or
less than 3V2% during the last five
of the 30's; and from 1940
yield declined progressively
years
the
to
2.71%
only
over
from
1946
which
fractional change has
a
curred
been
in
date.
to
the
That
course
of
oc¬
briefly has
interest
rates
the last 30 years on good, but
not the
highest grade of bonds.
But that is not the whole story.
If the demand
supply,
the
been
means
national
sumed
has exceeded the
has
by
Most
of
supply
small.
savings have been
by government and
no
our
con¬
are
represented by bonds which are
a
charge on future production.
The balance flowing into the cap¬
ital markets has been largely ab¬
sorbed
by corporate bond offer¬
ings.
For some years prior to
1945, corporate bond offerings
were on the order of $2 billion a
year but since that time they have
been on the order of $5 billion
a
year.
About
one-half,
you
might be interested to know, are
public utility bonds.
Thus you
have a picture of a stream of
funds
flowing into our capital
markets, largely through insti¬
tutional channels seeking invest¬
ment in
bonds at progressively
lower interest rates.
Basically, credit is abundant at
low interest rates and there seems
reason
every
continue
so
believe
to
it
will
for the indefinite fu¬
No good borrower, and that
ture.
practically
includes
connected with the
should
ability
proper
be
everyone
business,
about his
gas
concerned
raise -new capital in
proportion by the sale of
to
bonds.
is
not
great
COMMERCIAL
reliable. Only
of funds will
very
pressure
institutions
stocks
limited
extent.
The market for preferred
stocks is a broad one only when
it is based upon a demand from a
at
all
buy preferred
and then only to
dant
1947
1948
this
corporation
taxed
are
5.7%
stock
at
4%
a
dividual
and
yield
after
2V2%.
The
taxes
as
price
of
level
2%
I
preferred
be
dition
than
a
be done
much healthier con¬
now
ex is ts,
even
though the cost of preferred stock
capital would be greater, because
it would restore breadth and de¬
pendability to the market.
If the conditions
markets
underlying
have
our
created
prices
stocks,
except for
selling for about
are
stocks
common
the
than
assets
companies
many
alone
selling
are
of
excess
over
cur¬
all liabili¬
ties, reflecting no value whatever
for plant or going business.
I do
at
$J/2
billion of preferred stock financ¬
ing was done as compared with
$5 billion of bond financing. If
the volume stepped up beyond the
institutiona 1 demand, prices
would adjust themselves to the
private investor m a r k e t.
This
would
utility
name
less
rent
influence of in¬
this level. Last year less than
capital
can
for
stitutional demand is very favor¬
able to financing, but no very
volume could
were
three fourths of their book values.
whose
stocks under the
great
of
bank stocks
may
as
stocks
the early
years,
1941 and 1942.
For
bank stocks, prices were lower
without
exception.
New
York
taxes.
in¬
little
industrial
a com¬
war
an
stock
preferred
on
historical compari¬
an
lower
were
not know that any
panies
need
com¬
more
use
interest of the present own¬
the
to an excessive degree.
i
In the third place, I know that
in the absence of equity financing
corporations have borrowed more
heavily and have retained a
higher percentage of their earn¬
ings as a means of providing for
stocks
the
status
a
chain
supply
risk
capital,
in any period when corpo¬
earnings are insufficient to
sustain
an
expanding economy,
then
government will substitute
for
private enterprise. When govern¬
ment substitutes for private en¬
risk
ously hurt by the social and
nomic
trends
Bookshelf
Analysis of Publicity
1949
which
I
Budgeting for Depart¬
Specialty Stores
—Compiled by Controllers' Conrgress—National Retail Dry Goods
Association, 100 West 31st Street,
New York 1, N. Y.—paper—price
$2.50 (to members of'the Control¬
lers' Congress and the NRDGA,
$1.50).
ment
eco¬
have
affect all of
now
becoming
out earnings
pay
to raise
then
equity capital from stock¬
holders out of what was left after
taxes.
And
de¬
—Jerrold G. Van Cise—and Anti¬
,
domestic affairs
our
we
seem
to
How
Department
Stores
Can
constantly moving toward the
frustration or destruction of im¬ Get a Bigger and More Profitable
Appliance
and
Television
Volume
portant elements of our capital¬
istic system. Repeated warnings —National Retail Dry Goods As¬
Reserve
Board
review the
situation from the
standpoint
the
on
capital.
equity
He
investors
can
to
risks.
development
and
,
i
$2.00).
of
Tendencies,
but
stifled
enterprise
-,
.
,
which
and
/
Columbia
Morningside
York,
N.
Y.~-
publication
University Press,
Heights,
New
paper—400.. y/'o
has
Deflationary
United
1946-1948—A
Nations
put his finger ex-*
the sore spot, a scheme
taxation developed to effect
He
reforms
...
Inflationary
on
social
Dry Goods As¬
100
re¬
for expanding production
steadily rising standard of
a
Profitably
West 31st Street,
1, N. Y.—paper—$3.50
(to members of the NRDGA,
sociation,
He
our
Coverings
and
New York
sources
living.
yield on a
composite of AAA bonds was 3%
of
Floor
Effectively
—National Retail
expressed
take
Sell
to
How
More
availability of
alarm at the reluctance of Ameri¬
actly
the vicious cycle.
100 West 31st Street,
1, N. Y.—paper—$3.50
(to member of the NRDGA, $2.00}.
sociation,
New York
recom¬
that Congress
mended
that made it essential for corpora¬
In 1939, the average
•
be
tions to retain more earnings and
there is
the Point
From
Private Practitioner
a
trust Laws From the Point of View
rapid
attractive and
of
War, a conflict of ide¬ of a Government Attorney—Sigologies in world politics has made mund Timberg—in one pamphlet
us increasingly aware of our eco¬
—Practising Law Institute, 57 Wil¬
nomic system and its relationship liam Street, New York" 5, N. Y.—•
to our political system.
We iden¬ paper—$2.00.
;
;
A
tify capitalism with our free en¬
Corporate Profits in Perspective
terprise system. We boast of its
accomplishments.
We
associate —John Lintner—American Enter-,
capitalism with our high standard prise Association, Inc., 4 East 41st
of living and with the individual Street,, ; New
York 17, N. Y.—
freedoms which we enjoy. But in paper—500.
'A"-';-;'vy
worth less. And that made invest¬
that made stocks worth less. And
View
Since the
said the traditional willingness to
take risks was responsible for the
ment in. stocks less
Stores and
Antitrust Laws
of
us.
they paid out less
and what they did pay out was
so
Expenses,
to Retail
Guide
Edition—A
Publicity
scribed, you should not permit
yourselves to dismiss this subject
from
your continued
considera¬
tion because, in a large way, they
ef¬ Federal
reaction, the
are
to be taxed as dividends and
able to save do not for
reason
in¬
for
market
Just because public utility com¬
panies have not so far been seri¬
of its effect
are
institutional
the
and
public
able, at least without
regard to cost, to obtain such
equity capital as is required.
tax
any
Man's
most
are
corporations to
who
are
investment
of
utilities
apparent. It became inefficient for
market and the grave
dangers which follow as a con¬
sequence. They say that if those
class
a
of speculative risk to the
area
securities, then you would expect
that the market for equity capi¬
equity
Business
capital is inadequate and costly,
public utility common stocks have
moved a long distance away from
fects of which
Many thoughtful people are
alarmed at the inadequacy of the
as
to
If
vestors.
unbalanced demand for fixed rate
tals unsatisfactory.
of
capital expenditures. I think the
imposition of double taxation on have been sounded. Only a few
corporate dividends in 1935 weeks ago, the Chairman of the
started
an
of these
could
or
equity capital, but it is perfectly
apparent that they could raise
equity capital only by diluting
ers
forms
33
capital is abun¬
and
cheap, public utilities
properly employ a higher
percentage of borrowed capital
than any other form of business.
acceptable
that,
prices for 1948 for
of
posite
rate
taxed at his full rate
are
4%
a
posite
preferred
after
by
3%%
dividends received
But
or
that
so
yields
effective
know
do
the lowest in 20 years. For a com¬
by
other
can
ferred
son, stocks appear low in price.
In terms of price-earnings ratios,
another
from
the
I
the basis of
not taxed on
are
Dividends received
basis.
one
of
Secondly,
average
than
business. If debt
the preferred stock market is
undependable, public utility pre¬
$890,000,000
778,000,000
611,000,000
-
mar¬
individual income taxes. Insti-
tutional investors
With
financing
(1065)
If
1946
rate
Danger of Excessive Debt Capital
that the trend is downward.
running above $6 billion, annually
common stock financing has been:
ket, even though their buying is
limited, the private investor can¬
not compete.
We did a horrible
thing back in 1935 when we made
corporate dividends fully subject
to
CHRONICLE
vestments
the total of all corporate
a
enter the
FINANCIAL
But I do know that very little
equity capital is being raised and
host of small individual investors.
When institutions
&
y"
—
yy.
and
destroyed
Modern Merchandising of Fur¬
Similar
warnings
and the yield on a composite of incentives.
debt
capital, there is a
niture and Bedding—National Re¬
125 industrial stocks was 3.9%, a have come from Senator George
temptation to make maximum use terprise we are no longer on the
tail Dry ; Goods Association, 100
differential of less than 1%. In and from Herbert Hoover. It may
of
borrowing.
The * danger,
of road to Socialism; we have ar¬
West 31st Street, New York
1,
-be too late to turn back*.
194.9,
the
bond
yield
was
2.7%xanjl
Why private enterprise
N. Y.—paper—$3.50 (to members
course, lies in overborrowing. Too rived.
the
We
have
a
national
debt
of
yield
on
stocks
was
Y.1%,
a
much
debt
not
only interferes would not supply risk capital is
of the NRDGA, $2.00).
differential of more than
In $250 billion.
We have commit¬
with the sale of junior securities, immaterial, It may be lack of edu¬
VvC' V:* •'
''
y
1939
these
stocks sold at) 15.7 ments to rebu ild as much of the
cation
on
the
part of those who
but precludes further debt financ¬
Outline of Money and Banking,
times earnings; in June of 1949, Old World as will accept our aid.
are
able
to
save.
It
may
be
lack
An —Herbert
ing. If you borrow the maximtim
Spero — Barnes &
We have a duty, to defend our¬
today when lenders are willing to of incentive to take risk because they sold at only 6 times earnings.
Noble, Inc.. New York, N. Y.—
The weight of evidence would selves. We have commitments for paper—$1.25.
loan at a high debt ratio, you will the reward is too meager. It may
y/yy
find you have cut off your only be that we have changed the bet¬ seem to indicate that few people pensions and other forms of relief
which amount annually to about
avenue of financing in the future
ting odds so that the risk is too are willing fo supply risk capital
Story of Progress, A—History of
one and one-half times as much
when the pressure to loan is not great. It may be that powerful by the purchase of common stocks
the first 25 years of the Massachu¬
as
all
dividends
paid
by
all
and
then
forces
have
succeeded
in
destroy¬
so great.
only
at
prices
which
setts
Investors
Trust — Julia* A.
"yv-American corporations.
We have Wilson
are very low when measured by
Massachusetts Investors
Most public utility companies ing confidence in business. It may
commitments
to
raise
the
stand¬
the usual standards of value.
Trust, Boston, Mass.—paper,
have used perferred stock as a be fear of this very danger of
y
ard of living of all our citizens.
means
of
raising
capital
al¬ Socialism.
And we are still dreaming dreams
Summary
TVA Idea, The—Dean Russellthough the volume of such fi¬
Need of More Equity Capital
Summarizing,
we
find, first, and making plans for more and Foundation for Economic Educa¬
nancing in recent years has not
that savings are being dispropor¬ more social services. Our system tion, Irvington, N. Y.—paper—7501been
great.
Traditionally, pre¬ ;; I can well believe that all of
of private ownership and free en¬
"
*
'
ferred stocks have been the in¬ these elements are present, but I tionately channelled to business
terprise may be able to carry this
Treatise on the Antitrust Laws
vestment medium of the private am not able to prove as of now through investing institutions
load.
Personally, I doubt it.
I of the United States and Including
which are restricted to safety first
investor.
During the 20's, 7% that our equity capital market is
think it is high time we drew in
investment. This has resulted in
All
Related
Trade
Regulatory
was the prevailing rate and, with
dangerously inadequate. Persua¬
our horns and lightened the load.
an abundance of debt capital
Laws—Harry Aubrey Toulmin,jR.
the exemption of dividends from sive but inconclusive arguments
I think it would be a good idea to
available at extremely low inter¬
—in seven volumes—The W. IL
normal income taxes, this rate can be advanced on both sides.
restore some of the incentives we
Anderson Company, Cincinnati, (X
est cost.
was
attractive to the small in¬
Transcontinental Gas Pine Line
seem to have lost.
I mean good,
vestor.
Secondly, the market for pre¬
old-fashioned
incentives
based
was able to raise the equity capi¬
Who Gets the Railroad Dollars?
ferred stocks is not now and for
At present the market for pre¬ tal
required for its $190 million
upon
the elemental instinct of
Dr.
Jules
Backman — Eastern
some time
past has not been a
ferred
stocks can only be de¬
selfishness.
Incentives
which
project which is being built from
Railroad
Presidents
Conference,
broad market based upon the in¬
scribed as uncertain and unde- the
make men want to improve their
ground up. Tennessee
Gas
143 Liberty Street, New York $
vestments of a host of private in¬
pendable. From time to time the Transmission, Texas Gas Trans¬
own individual standard of living
N. Y.—paper.
vestors, but instead is a relatively
institutional
demand
for
fixed
instead of having it improved for
mission, Mississippi River Fuel,
narrow market based upon a lim¬
rate investments has overflowed
Northern Natural Gas — practi¬
So
abundant
and
so
is
great
cheap
.
•
.
—
v.
*
<
<■
—
the
bond
market
and
at
times
ited
all
of
preferred stocks have been eag¬
erly bought.
Prices were lifted
by this buying. Some companies
were able to
do preferred stock
financing at rates under 3%%.
But then, this institutional de¬
mand
proved
temporary
and
erratic.
As soon as the institu¬ many others would have come if
tions stopped buying an adjust¬
equity capital were more abun¬
ment in prices occurred.
So we
dant and less costly. We do not
have a good deal of fluctuation in
demand which results in a good know how many businesses of all
■deal of price fluctuation.
kinds would even now be expand¬
A market based upon the in¬
ing if the equity market were
stitutional demand for preferred
erratic
an
dition
more
favorable.
•=•••-
-
v
*
of
markets,
public
fitted,
you
the
let
or
long-term
me
utilities
less
capital
emphasize that
are
I mean incentives to pro¬
institutional them.
While this summarizes the con¬
-
and
the interstate gas
demand.
transmission companies have
Thirdly, the equity market is un¬
come
into the market for equity
capital and have obtained it. So satisfactory, if not dangerously
inadequate, and the cost of ob¬
have many of the gas and elec¬
taining equity capital absolutely
tric companies. But that is not and as compared with the cost of
conclusive. We do not know how debt capital is extremely high.
cally
more
harmed,
bene¬
however
view it, by the change which
has occurred in the pattern
of in¬
Year
Book
of
Railroad
Infor¬
Incentives to mation, A—1949 Edition—Eastern
take risk for the sake of gain. In¬ Railroad
Presidents
Conference,
centives to earn more, to save 143 Liberty Street, New York 6;
duce more,
more,
to be
more.
I think we
akin
to
instinct
the
of
y
*
driving force; that it is pro-indi¬
and
vidual
anti-social;
not
selfishness is as inborn as sex
an
straints.
that
and
equally useful purpose
when exercised
.
under decent re¬
..
...?
W. O. Olsen Dead
self-
preservation; that it is a powerful
serves
N. Y.—paper—free.
recognize that selfishness
should
is
not less.
Wilbert
O.
died Aug. 30
Olsen
of
Chicago-
of poliomyelitis. Mr„#
Olsen, who was Executive Viceof the Wheeling State-
President
Bank. had resigned from Culbert-
Olsen & Co., Chicago investfirm, to accept the position,
with the bank in 1948.
son,
ment
body around is glum and the
news merely corroborates the
Tomorrow's
general pessimism.
It takes
courage to do any buying un¬
Markets
Walter
der
To
conditions.
such
Whyle
be
market
successful in stock
trading, however, the partici¬
pant has to develop a minor¬
Says—
=
COMMERCIAL
THE
(1066)
34
By WALTER WHYTE=
then
ity thinking habit—and
-1
JpX'i
*
*
impending bad
develop, brought
did not
news
This doesn't
mean
mar¬
ket
is
events are wound up inter¬
probably changeably and have their
due
to the relief that
the impact on stock prices. Com¬
threatened steel strike would bined effect
invariably makes
not come about and that the for
higher prices.
British
*
♦
*
monetary
problems
were
apparently ironed out
Given the conditions out¬
without too many difficulties.
lined above, I don't think any
At least, these are the reasons
new buying should be done at
that are widely current.
present.
It is quite likely
Much of this was
that abstinence from here
on
Actually these reasons, if may result in some missed
they are responsible for the profits.
I prefer missing a
rally, don't impress me. The possible profit for what seems
steel problem isn't going to be to me is almost a certain loss.
solved by any fact-finding
More next Thursday.
committee.
The British dol¬
lar
won't find its
optimistic statements
shortage
in
cure
of "solutions."
—Walter
'ime
harping
on
news
for
a
long time,
stressing my belief that its
impact is overrated. The cur¬
rent wave of optimism based
on
various fields
from
news
change
my
weeks
Two
ago,
opinion.
when I
thought the decline was over,
the- news
was
impendingly
Yet the market showed
bad.
a
bottom, and it
stated
was so
in these columns.
those
with
coincide
those of
They
are
of the
presented as
the author only.]
Chas.
Hayden Memorial
Solf Tournament
than
More
doesn't
Whyte.
vestment
Street
participate
Sept 16 in, the 21st annual Charles
Hayden
Memorial Trophy golf
It
for
is
that
that I consider
very
an
ad¬
vancing market, getting its
impetus from news, one that
should be avoided.
In fact, I
think it makes
opportunity
an
to unload.
From where I sit the ideal
time
to
buy is when
every-
Pacific CoastI;
Securities
Orders Executed
on
V
Company; E. H. Rollins & Sons;
Spencer, Trask & Co.; Stone &
Securities
Corporation;
Corporation and
New
York
Exchange •(Associate)
Stock: Exchange
Chicago Board of Trade
14 Wall Street
late
a
as
Charles
was
a
memorial to
The
Hayden.
revived last year
wartime lapse.
Wires
„
Burns, Potter Adds
New York 5, N. Y.
OOrtlandt 7-4150
Private
>
Curb
San Francisco
(Special to The Financial Chronicle)
Teletype NY 1-928
to
OMAHA,
Principal Offices
San Francisco—Santa Barbara
Mvnterey—Oakland—Sacramento
Fresno—Santa Rosa
us
agreed
Blessed
as
we
is
before
attainable
election
dential
with
a single
feasible and
another presi¬
are
which
the
League
is
forming rapidly. State Chairmen
for the time being are acting un¬
their
der
initiatives
own
in
the
way we
have been doing in
Pennsylvania.
Members have
same
been
signing up rapidly.
Mem¬
bership is by the will and acts of
the individual.
It's what they do
that
For
counts.
does
this
those
who
created
the
immense
about
and
example,
Mr
cards
post
to
in
voters
his
precinct
asking
them
should be done with the
what
$24%
billion of gold in the Treasury—
it?
but
it
as
to
what
But
national debt
individual
of
the
states?
we
seem,
may
of
6.1%
gold re¬
serves against- the combined total
of currency,
bank deposits, net
1949
This
compares-
debts.
State
debt ..and
Federal
the
to
33-year
from
1916 to
1949 of
While nothing to be proud
average
7.0%.
sufficient,
considering especially that larger
the
of,
reserves-
financial
are
inherently
have
units
greater stability.
posing
put
the
in
the
record
McCarron
op¬
Bill
and
recommending instead the House
Bill, HR 3262, introduced by the
Hon. Daniel E. Reed of New
York,!j
the ranking Republican member
of the House Committee on Bank¬
ing and Currency.
will
reestablish
The Reed Bill
the
thoroughly;
constituted
with
gold
coin
standard
non-gold U. S. currency
all
redeemable
citizens.
Gold
for
Now
by American
use
that
have
we
citizens
American
Can
"How
ask,
be
per¬
the gold coin stand¬
when this country has over
mitted to
ard
65%
use
world's
the
of
monetary
We also have over 65%
automobiles, tele¬
phones,
typewriters and
other
to the citizens.
As might
t^ex-T products of our work, yet is that
pected, this test disclosed the lack any reason why an interfering
of knowledge about sound money government should deny us the
Sound
and in a small way showedr, the use of such implements?
gold?"
of
the
world's
the
Standard
League, members
among the citizens can appear at
such
hearings and make their
voices heard.
We can
bring with
resolutions by our civic organi¬
zations all over the country.
We
us
strengthen
can
hands
the
of
legislator^ who
re¬
would
We
give them intelligent and ef¬
can
fective
sometimes
People
tion
not, and does .it belong to
the government or does it belong
statement
restore honest fiscal policies.
Free Men
should it be returned to circula¬
or
sider and to send their considered
individual endorsements of
the
sponsible
Gold Currency Needed as Tool of
Robert F. Steiner, a member at
Topeka, Kansas, sent out 933, re¬
turn
in
have
belong
money
debts
for
To whom
work.
our
Surprising
1
shortly.
objective
have
in
support
districts.
Within
sponsible
their
of
must
year we
number
citizens
gressional
formed
each
a
sufficient
a
in
district
of
each
who
re¬
Con¬
in¬
are
~
the need for restoration
on
of honest money and able
and write their opinions.
to/voipe
It is; a
subject which attracts the honest
and
capable in all walks of life.
The delusion that deficit financing
and
"managed money" is good for
the
country is being dispelled by
events and facts.
!
i
job of education we have to. do. currency redeemable in gold is
It is Incompatible with the v&e
However, a majority of those,'re-* just another necessary tool of free
plying were in favor of its return men. In fact, for lack of it the of the traditional standard of
money of the world, gold, that
to circulation.
Another member system by which we develop such
in Ohio, by writing letters ta the values as we enjoy will be de¬ American citizens should be de¬
editor
of
large newspaper, has
a
nied
stroyed.
is
had
One of the means
we
are
using
facts which Americans
to tell the
must know is to
weeklygressmen and Senators.
There 1?
letter, "The Washington Bulletir
already considerable support, of the Gold
Standard League.".
among Senators and Congressmen
We expect it will soon have over
for passage of the Reed Bill, HP
10,000 subscribers.
Articles of a
3262, which returns us to -the
timely nature appear in it written
fully .constituted gold coin stand¬
by our Washington writer, Mr,
ard. 'Others in Congress are only
Laurence McKenna, by members
waiting to see what their con¬ of the Economists' National Com¬
sound
The
want.
is
money
matter.
return
to
non-partisan
a
Among supporters of this
movement
are
members
both
of
parties.
State Chairmen are se¬
curing
Vice-Chairmen
in
each
critical times to
at
their real wishes.
press
mittee
put. out
Monetary
on
a
Policy and
the
our
of the
use
which
metal
On the
standard of value.
present limited gold bullion stand¬
ard a dollar is nothing more nor
less than l/35th of an ounce of
Obligations
gold.
the
of
U. S.
Treasury are made good in that
standard to foreigners, through
their foreign central banks, but
to Americans, who are pro¬
hibited, by laws which we would
repeal,
from owning our own
standard
of
value..
It
places
not
citizens
American
in
strange
a
by others conversant with mone¬
much
category indeed when you con¬
Inas¬ sider that the countries prohibit¬
and legislation.
tary facts
half
exactly
as
individual citizen
effective
working for his
But this is greatly
freedom.
own
payment of
service
or
of--the
transaction
financial
ox-
Nothing
determination
the
beats
of
every
in
is
every
the
Thus
rendered.
study of monetary matters is as
necessary a part of doing business
today
as
the total
of all of
the
multitudinous
of
the
well know that without money
intrinsic
circulating,
value
daily lives of the people can be
controlled.
>7
considerations
when
supplemented by
measured by these monetary pay¬
resolutions made by civic groups.
ments.
No business man nor in¬
For
example,
the
Latrobe
vestors today can afford to neglect
Chamber of Commerce made such
the study of that side of the equa¬
a resolution after full discussion,
tion.
to extend the
proposal
a
nent
quality
of
legal
perma¬
tender
to
Swiss National Bank Notes and it
was
rejected and gold will be the
.
NEB.
—
Arthur
C.
Johnson, Jr., has joined the staff
of
Burns, Potter & Co., 202 South
Seventeenth Street.
.
.
,
was
good
on
universally ac-^
ceptable standard- of value, gold
coin or bullion.
Let's restore that
demand
in
The gold
un¬
made
questionably
the
only, legal tender. The Swiss Na¬ condition
quickly so
that we
tional Bank, moreover, will be shan't have to waste time consid¬
obliged to convert its bank notes ering that half of each transaction
into gold on demand after Jan. 1, in the future.
*ri
Will you do
merited confidence.
We have available
and membership cards
part?
your
literature
which
friends.
other
you should give to your
We need key people in
states.
Will
you
give us
their names?
•
1950.
!•
.
in
perpetual play
the
after
Exchange
to serve
their respective states.
We
have 10. Others will be with
supporters
America has
gold
more
abso¬
and relative to, currency
circulation plus all bank de¬
lutely,
Hayden trophy is kept in
tournament
Members
out to
Webster
The
York Stock
products of
didn't wait
incorporation.
We set
do the job.
Eight respon¬
exchange
in
Treasury
for formal
currency
Also, Lazard, Freres & Co.; Lee
Higginson V5 Corp.;
Laurence
M.
Marks
&
Co.;
Merrill Lynch,
Pierce, Fenner & Beane; F. S.
Moseley & Co.; Paine, Webber,
Jackson & Curtis; R. W. Pressprich & Company; Reynolds &
1
New
The
products of our toil, ingenuity and
risk-taking gave value to the dol¬
lar, causing gold to come into our
monetary gold.
coin standard in Amer¬
ica provides a victory for free
pany; Cohu & Company; Eastman,
enterprise and represents an ex¬
Dillon & Co.; Estabrook & Co.;
ample that will be gladly followed
The
First
Boston
in many countries.
Corporation;
It is a blood¬
It's an additional cost of
less way of proving the demo¬
.■
Glore, Forgan & Co.; Goldman, June 3, 1949.
doing
business
in
the present
Sachs & Co.; Granbery, Marache
world.
Lulled by the experience cratic way of life, with private
Swiss Support Gold Standard
& Co.; Halsey, Stuart & Co. Inc.;
of over 100 years when America enterprise, is preferable to the re¬
Harriman, Ripley
& Co., Inc.;
That
other
freedom - loving was on the gold standard, Amer¬ sults in the regimented forms of
Harris, Upham & Co.; Hayden,
people have the same instincts in icans have fallen out of the habit government.
Stone &
Co.; Hemphill, N'oyes,
As we have shown you, this goal
regard to protecting their liberty of studying the monetary side of
Graham, Parsons & Co.; Kidder, is shown by the action Of the
every transaction.*^ wasn't nec¬ is attainable before another Pres¬
Peabody & Co.; Kuhn, Loeb &
idential
election.
It will restore
Swiss people in May of this year essary to spend effort in that di¬
Co., Inc.
real prosperity
when a referendum was held on rection when
based on well-
Wertheim & Co.
Schwabacher & Co.
world's
had long wanted it, we
Senators
Union Securities
Pacific Coast Exchanges
who
the
ing their people from owning gold
the
or gold coins are Soviet Russja,
exchange be¬ Socialistic England, and recently
Congressional
District
in their tween citizens there should be
Rumania.
Boston Corporation, Chairman of state.
Among the recent apts
These, in turn, will secure
exactly as much interest in the bf communistic China was to de¬
the
committee in
charge.
The members in their districts who
monetary
half
of
the
bargain,
tournament will be played at the' will write letters and send tele¬
clare the severe penalty of death
especially when deferred payment for
Baltusrol Golf Club, Springfield, grams to their Congressmen and
anyone having silver or silver
is agreed upon, as upon the work
dollars.
Communistic
dictators
New
tournament, it was announced by
Francis A. Cannon of The First
Jersey,
reason
of strong men
aid
the
stituents
in¬
Wall
will
30
firms
Buying; stocks on news is
The following firms have en¬
very easy. All the psycholog¬ tered teams to compete for the
ical advantages are on the trophy which was won last year
by The First Boston Corporation:
buying side." Everything
A. C. Allyn & Co., Inc.; Blair &
seems
to' be in the buyer's
Co.,. Inc.; Clark, Dodge & Com¬
favor.
Accord¬
surprising success in getting
our
story to the public.
Many
[The views expressed in this
members
have written their-Conirticle do not necessarily at any
Chronicle.
I know I've been
With
going to pot.
now
strength not conducive to new probably won't.
Thursday, September 15, 1949
tem, has brought us over 65% of
6)
page
ingly, in June of this year we
started the Gold Standard League^
now
the
It
The penetra¬
tion of a previous resistance
buying.
point by one average is usu¬
A sharp rally on Tuesday
ally sufficient to do two
brought the industrial aver¬ things: hasten short covering
ages to well across the 182 (which in turn carries prices
figure, bettering the 182.02 higher) and bring in new
figure registered mid-August. buying for long account. Both
Believe such
rally.
sharp
(Continued from
ican people was wanted.
for
:
Relief that
CHRONICLE
How to Return to the Gold Standard Now
sible
act.
FINANCIAL
&
posits, than
had when our cur¬
rency
was
redeemable
in our
standard
of
value.
Today we
have $24% billion of gold which
is
14.4%
against currency plus
deposits in banks in the U. S. A.
In
1926
as
little
the-
we
as
gold
payments.
because
we
had 8.5%
and in 1920
7.1.%, yet we nreserved
standard with, specie
This has been possible
the
work
of
American
citizens, nurtured for over 150
years in the free enterprise sys-
Urges Congressional Action
Reed "Bill
in
on
(Special to The Financial
The Gold Standard League may
the future reinforce, from the
CHARLOTTE,
G.
of
the
Committee
Policy.
For ex¬
ample, in May of-this year hear¬
ings on the McCarron Bill, HR 13,
on
Monetary
were
held
mittee
on
by the Senate's Com¬
Banking and Currency.
Six
or
the
monetary
seven
in, time to
of
be
the
members
of
economists arrived
heard
in
person.
Over 50 of them* had time to con¬
Thelma
affili¬
Johnston
members
National
—
& Co.,
advice
the
C.
with Harris, Upham-
ated
of
N.
Chronicle) '
Cloaninger has become
viewpoint of general citizens, the
Economists'
Adds
Harris, Upham & Co.
inger
Cloan¬
Mrs.
Building,.
\vras
formerly with Good.
body & Co.
■
,
'
With Orvis Brothers
(Special
to The Financial
GASTONIA,
Bolin
is
with
N.
Chronicle)
C.—Banks
,
E.
Orvis Brothers &
THE
Number 4838
Volume 170
COMMERCIAL
FINANCIAL
&
CHRONICLE
freely offering gold for dollars at
Gold Coin Standard-Mechanism
the
fixed
same
rate—either
home where this is forbidden,
at
or
abroad, where
For World Trade and Investment
(Continued from page 9)
materials, has given way to
different pattern. There is now,
raw
are
a
in
and
has
for
been
some
years
an
dependence upon
States export sur¬
ganized
large United
pluses. The quantity of goods sent
banks under conditions set by our
authorities.
Is there
accentuated by them. It seems,
fact, that the more elaborate is
the organization of our bureau¬
cratic controls, the less truly or¬
almost universal
ited
we
are! r
■
.
dealings are lim¬
to governments and central
British
authorities by thus indi¬
rectly and surreptitiously devalu¬
ing the pound. Whatever fact or
fancy there may be in these ru¬
mors, we should be grateful that
Secretary Snyder is firmly sei,
against such a course.
touch of the "dog in
a
the
manger" here? Perhaps. In
any case the terra firma of such
international monetary order as
we may be said
to.have is con¬
What would it accomplish? Cer¬
tainly
no
immediate "shot in the
arm" for the general run of Brit¬
ish exports unless the pound were
devalued simultaneously, and in
fairly obvious, for tinuously threatened by wishful greater proportion. A small parv<
thinking or rumors of further dol¬ of the existing dollar gap in the
from the United States last year,
instance, that the more British in¬
lar devaluation in gold, and by sterling area's trade balance mignv
for instance, was almost twice that
dustry is protected by a multi¬
the often substantial premiums at be redressed for a period—but a*
of ten years earlier; on the other
plicity of sterling quotations, by
which gold is quoted in terms of the cost of debauching the dollar
hand the quantity of imports was the
"blocking" or non-converti¬
dollars, in the "natural state" in encouraging gold hoarding in the
but 3% beyond the level of 1937. bility of sterling
balances, and by
our
country, and in such "free hope of progressive deterioratioi
Since the war, in fact, our net vol¬ bilateral trading
agreements, the
markets"
as
exist
in the dollar's exchange value fo,
beyond
our
ume of exports in almost all di¬
more
British industry will need
borders. That these premiums in
rections has called for payments
gold, be-deviling the world's ex¬
protection.
For these
controls,
dollars often represent arbitraging
so far exceeding merchandise and
changes, putting off indefinitely
dictated though they may be by
in> depreciating
service accounts that withdrawal the difficulties of the
currencies does the free convertibility of dollar,
day, shield
■not lessen throughout the world
into gold, and making even more
of foreign liquid assets, and nearexport production from the cost
the impact of uncertainty in ex¬ impregnable (for wider monetary
exhaustion of gold and dollar re¬ readjustments
required for an ex¬
and
change relations between dollars
serves of Great Britain and other
banking reserve use in othei
panding volume of dollar market
and gold.
countries) the mountain of mone¬
hard-pressed European countries, demand.
' '
tary1
gold now respectably in¬
The late Lord Stamp once re¬
have been accompanied by un¬
precedented totals of
loans and grants.
<•?
U. S. Export
Surplus
a
It
American
\
/
be
must
International
Ineffective
:
Monetary-
Fiscal Problem
To the basic economic reasons
for world dependence upon Amer¬
export surpluses must be
a
monetary-fiscal one.
A
vast and ubiquitous inflation, ac¬
companying and made possible by
Monetary Fund
Into the confusion of this mone¬
tary and exchange welter it was
hoped that the International Mon¬
etary Fund would introduce some
elements of stability. The agree¬
ican
ment under which it
added
lished
universal
abandonment
of
the
standard,
caused
average
export prices in other countries
(when translated into American
dollars) to rise much faster than
gold
*
value
the
of
Member
terms
that
requires
United
"The
currency*'of
shall
of gold
nominator
estab¬
was
be
as
in
or
each
expressed
in
common de¬
terms of
the
a
Dollar
States
par
of
weight
terred at Fort Knox.
bling a jig-saw puzzle when the
pieces are angle-worms! Perhaps
this analogy has current applica¬
tion. At least it point? a, moral,
this
point is Charles Lamb's fabk
of Hoti and Bo-Bo, who first mad(
known to mankind the delights of
whether
their house and hog pens.
We
have
taken
our
United
by the
increasing
export
surpluses of
later years, the flood-tide of yel¬
low metal running to otir shores
left its backwater elsewhere of
fiat and "managed" money, and of
runaway costs and prices. These
so raised the burden of export in¬
dustries in several countries of
the
earlier
thirties,
and
over
currencies that the
of their imports
exports — particularly
in
trade
with
depreciating
unfavorable
made
gap
the
United
States—
country even more of a
our
moretary whirlpool into which
the world's gold was sucked.
..
In efforts to
protect their dwin¬
well nigh exhausted re¬
gold or "hard money"
exchange, Great Britain and a
dling
or
sources
of
nurpber of other countries in Eu¬
and elsewhere have resorted
to elaborately controlled barter
schemes — or
"bilateralism" in
trade
to
balance payments in
current commercial transactions,
country by country. In fact, gen¬
uine "multilateralism" in trade is
rope
—
A third
dollar at
a
to
adopt
1944."
With
a
a
terms
fixed point of refer¬
determining realistically the via¬
ble rates of exchange of all "soft
currencies"
in
terms
of
the
of the dollar.
Sir Stafford
Cripps, who is not wanting ir
realism, has vigorously oppose:,
this.
The airing of this "bright
discount from its stat¬
idea" has retarded American pur¬
chases
due
been established — a
foundation secured for ultimately
"remedy" bruited about
pound r
is the devaluation of the
forth¬
right gold standard adds to exist¬
ing confusion; helps distort the
use
of monetary gold; puts the
States
pig by accidentally burning
But in
case
we
wonder
if there
would be any "crackling" at all!
"look at the, record." What do we
see?
We see that failure of the
and fineness in
by the swift and drastic devalua¬ the dollar
of the American dollar in. ences has
1933-1934, by the earlier collapse
of American foreign lending in
this
sketchy
utory parity in gold in the United
effect.;pn July 1,
States and elsewhere; promotes
regard to the
the private hoarding of gold, in¬
quotations for commodities mak¬ "escape" clauses, the" failure of
stead of dollars, where gold can
ing up the bulk of American exJ several member countries to estab¬
be hoarded; postpones needed re¬
ports. Our exports were thus en¬ lish or maintain par„values, the
couraged, and our imports dis¬ use of different quotations for dif¬ adjustments in foreign exchange
rates vis-a-vis
the dollar; en¬
couraged. Our cost advantages in ferent'purposes, and the limited
bilateralism and
dis¬
exporting, or our cost disabilities and controlled extent to which a courages
crimination in international trade;
in
importing — vis-a-vis. other number of currencies are allowed
and tends to brake the rising in¬
countries—rose some
25%
be¬ to seek their own values in other
ternational flow of goods, services
tween 1937 arid 1948, according to "soft" currencies,
i% gold and in and capital which the very sub¬
the United Nations World Eco¬ dollars, it must b£ said that a
stantial recovery in many coun¬
nomic Report for 1948. Thus the great degree of arbitrariness and
growing concentration of mone- of artificiality runs- through this tries should have made possible
if not inevitable.
-tary gold in the United States in whole picture.
Nevertheless, it
It was earlier observed that we
a way "fed upon itself."
Speeded can at least be assumed that .in
tion
roast
not it adorns a. tale.
of
British
goods—in
the
hope of getting them more cheaply
—and thus added to the malady
which it is designed to cure.
be sure, higher sterling prices
Tt
for,
might
encourage
South African production. But tr
what avail, if sterling devaluation
set in motion a competition in de¬
gold
exports
basement, stiffened sales resist
ance against British goods, raise
her domestic costs, sky-rockete
,
outlays'for Britain's essential im¬
ports of foodstuffs and raw ma*,
terials, and put off to other day/
the increase in British produc¬
now—that
domestically and tivity and the lowering in Briti^
costs which are the "sine, qua non''
internationally valid gold standard
for a healthy expanding expor'
at $35 an ounce—or be subjected
trade?
to increasing pressures to do the
must do the right thing
is,
establish
a
thing. We may illustrate
Keep Gold Dollar at Present
refering briefly to certain
Value
'
•
pinchbeck remedies which would
We return, then, to the course
delay the urgently needed frontal
attack on our problems and turn for our country at this juncture
usdown
false
and
dangerous which wisdom, honesty and cour¬
screen
againsj which could be
roads.
Those
singled
out
for age would seem to dictate—name¬
projected the phantasmagoria of
"honorable mention" are three in ly, the establishment of a standard
currency fluctuations until these
which will everywhere and on al.
could be reduced to recognizable number.
occasions permit exchange of dol¬
For instance, a barrage is being
order.
laid by certain gold producing in¬ lar? for gold at $35 per ounce, per¬
Is this the case? Have we of the
haps in: coins or bars of this mini¬
United States acted in truly good terests in this country on behalf
mum value.
This act by Congress
of "free" markets in newly mined
faith as trustees, or at least cus¬
would sound the knell of gold
todians, of the bulk of world or imported gold. With the vast
accumulations of the Treasury ef¬ speculation in dollars and of un¬
monetary gold reserves and gold
predictable
premiums on golc
production? Have we "kept our fectively impounded, such mar¬
quoted in dollars domestically and
kets would of course be neither
own house in order" so as to pre¬
abroad.
Our
ample
reserves
serve
unequivocally
the
gold- "free" nor significant. It is pos¬
(judged by all earlier experience)
based value of our dollar. The an- sible that they would result tem¬
coupled with this demonstratior
porarily in openly quoted pre¬
swer is "no"!,/
of good faith on the part of the
miums for
these very limited
American
Government,
woulr
stocks of monetary gold. To this
Meddling with Gold Content of
Dollar
extent the proposal would help greatly reduce the urge to demand
and to hold gold by building con¬
further to delay resumption of
Adding to the instability and
fidence in dollar currency, and in
convertibility, at the parity
uncertainty riding mankind in
securities offering principal anc
established by Congress 15 years
these times is the failure of our
wrong
this by
monetary unit,
and therefore in terms of each
other.
It was taken for granted
that the dollar made a steady
world's
soundest
-
government either to give posi¬
tive
assurance
against
further
meddling with the nominal gold
content of the dollar, or to make
the thirties international trade did good the existing statutory equi¬
tend to balance country by coun¬ valence of $35 per ounce by re¬
try, with perhaps a third of world storing convertibility into gold.
trade, not balancing bilaterally, Failure to establish a gold coin,
fitting neatly into the mosaic of or even a gold bullion, standard
largely extinct today, except oyer
the great reaches of the "sterling
area."
Before the upheavals of
it might give an appear¬
respectability to propa¬
ganda on behalf of further de¬
valuation of the dollar. The dis¬
ago; and
ance
of
astrous consequences
no
further arguing.
of this need
; ..' 'a.
financial
involves
Americans
us
•
_
in
the
creased, let the chips of socialist
experimentation fall where they
The
funded,
there
is "the talk going"
in
war-needed
far
as
ports
"hard
to
re¬
possible, to di¬
as
of British
currency"
ex¬
coun¬
tries and tangible incentives given
British manufacturers in this wise;
British purchases of tobacco, cottor. and so on must be directed
as
feasible toward "soft currency"
or
sterling areas. American cus¬
procedure must be simpli¬
toms
fied,
and as politically , possible
American duties must be reduced
textiles,
on
rayon,
whiskey
British
exports
of
other
weight
the
in
balance
of
and
real
pay¬
ments.
American buying of tin,
rubber, and strategic stock-piling
materials should be increased and
reasonable prices assured over the
longer term.
Direct
investment
American
in
enterprises, and purchase
of foreign securities, would gain
momentum
from
the
exchanger
stability, the
freeing of trade
overseas
channels, and the access of
fidence
which
bring
would
freer
settlement
of
con¬
leader¬
American
in restoring
circulation of gold as means
ship
and
store
of
value.
Furthermore, if loans of American
monetary gold were required to
fortify
us
dollars
of
would be expressed in
unchanging
As there
tent.
are
economic
believe
gold
con¬
fulfilled
some
conditions
essential
these
of
exchange parities, this
new
debt to
recovery—we
be
gratified
at
for
shall, I
the re¬
,
made by workers and con¬
sumers
throughout the whole of
sponse
world."
"free
the
V
Lehman-Blyth Group
Offers Louisville Gas
& Electric Common
Lehman Brothers and
'
Blyth &
Co., Inc., headed a purchase group
that' offered
publicly Sept. 14
250,000 shares of common stock,
without
of Louisville
Kentucky
value,
par
Gas and Electric Co., a
corporation, at $30,375 per share,
awarded the stock
at competitive sale on its bid of
$29,765.
The group was
The stock
was
sold to the group
by Standard Gas and Electric Co.
and
no
portion
the
of
proceeds
will be received by Lousville Gas
The sale will re-*
and Electric Co.
to
duce
ings
135,308 shares the hold¬
Gas common
which had
Securities
Exchange Commission to dis¬
of
Louisville
stock by Standard Gas,
been
ordered by the
and
of all its holdings in Louis¬
Gas.
The total of 1,068,703
pose
ville
such
of
shares
common
stock
presently outstanding will remain
the same upon completion of this
offering.
;V.
Louisville Gas and Electric Co.
is
operating public utility com¬
and is principally engaged
the electric and gas business.
an
pany
in
The
company's electricity is gen¬
erated by steam and water power
or
standard, once more
put in full force by our country
would draw gold out of hoarding
in France and in other countries
is purchased and
it is distrib¬
uted
and sold at retail in Louis¬
ville
and
vicinity. For the year
30, 1949, approxi¬
June
ended
76% of the consolidated
operating revenues of the
and its subsidiary com¬
panies was derived from the sale
of electricity and approximately
mately
ir. favor
gross
income-yielding investments
and
of
other
currencies,
once
comoany
round" of such further direct de¬
valuation of the
of
of
the maximum
rect
held
Egypt, India and
should be reduced and
gooas
of
Then
balances
Great Britain by
other
purveyors
gold
in favor of dollars—and
Sterling
may.
income payable in our money.
these
could
be
soundly re-ap¬
dollar, by action
praised in terms of stable, trusted
government, as would put and convertible dollars. Such re¬
transactions.
pathetic absurdity of being for¬ a large fresh bounty on world
alignment of the principal ex¬
Now, as ancient Procrustes did bidden by Federal law to demand, production of gold. We are in¬ changes,
if
and
as
necessary,
to
his
unfortunate
wayfaring trade in, or to keep gold as a formed by the press that British would be greatly expedited by
guests, the larger demands of store of value—the latter privi¬ delegates to the present: three- placing the world's basic currency
cornered parley on the sterling
trade are stretched or lopped-off lege, by the way, being granted
the dollar, on an unequivocal gold
to many other peoples who are
area's balance-of-payments diffi¬
as the case may be, to fit the nonfoundation.
not
blessed
culties
by
this
particular
may
offer
this
panacea
as
adjustable bed of crisis expedi¬
This
would
not
in itself be
brand
of
a
means
of
increasing
South
paternalism.
Our
gov¬
ency.
Exchange controls, bilat¬
dollar
receipts for its enough, of course, to turn the tide
eralism. discrimination, non-con¬ ernment adds to its underground African
vertibility,
import
and
export hoard substantially all this plan¬ gold; of establishing a large gold of monetary and fiscal chaos—but
would
mightily fortify
the
quotas and restrictions of all kinds et's current production or the devaluation "profit" for the United it
Treasury
(which
could breakwater and set the stage for
divide the world into trading com¬ equivalent thereof, by freely ex¬ States
partments which threaten to per¬ changing dollars for gold; but we presumably be "loaned" for sta¬ salvage and re-building. Further
measures would be simplified and
petuate themselves, which ac¬ do not bind ourselves,' in theory or bilization purposes to other coun¬
centuate
political divisions and in practice, /to disgorge by as tries); and of "saving face" for speeded.
over-all commercial and
Costs here and elsewhere must
reduced and productivity in¬
be
Germane at
ferred to the difficulty of assem¬
or
35^
(1067)
24%
the sale of gas.
from
our
'
Other members of the
groun
are
purchase
Goldman, Sachs & Co.;
Harridan Riplev &
Co., Inc.; Kid¬
& Co.; Hemphill,
Noyes & Co.; J. J. B. Hilliard &
Son; Hornblower & Weeks Lee
der.
Peabody
Higeinson "Corp.;
Stein Bros. &
Brothers,
Boyce. and Almstedt
WitH Waddell & Reed* Inc.
to
The
PFATRTCE
<
Financial
Chronicle)
NEB.—Darrell
D.
with Waddell & Reed,;
Inc.. Kansas City, Mo.
X ahod^v i<?
•
>•««.
36
\nHwut&aut&va#iai-ax~-
K '
COMMERCIAL
THE
(1063)
1
CHRONICLE
FINANCIAL
&
Thursday, September 15, 1949
Indications of Current Business
The
following statistical tabulations
shown in first column
cover
production and other figures for the latest week
either for the week
are
Activity
or
month ended
Latest
that date,
on
Previous
Month
Week
Ago
in
or,
month available (dates
are as of that date):
or
of quotations,
cases
Year
'
AMERICAN
AND
IRON
INSTITUTE:
STEEL
Indicated steel operations
(percent of capacity)
*/!■'>'
Equivalent to—
Steel ingots and castings
*
Week
Sept. 13
V
'-''''l''-
V:
(net tons)
84.2
80-4
Ago
AMERICAN
96.1
83.5
of
j
Sept. 13
1,482,200
Sept.
3
4,761,500
Sept.
Sept.
3
3
1,732,200
1,539,300
1,552,200
GAS ASSOCIATION
July:
Total
therms)
(M
Natural
AMERICAN
Crude
oil output—daily
Crude
runs
Gasoline
Kerosene
output
(bbls.)
average
(bbls.)
Gas, oil, and distillate fuel oil output (bbls.)
Residual
fuel
oil
.
(bbls.)
gasoline
Kerosene
(bbls.) at
*
Gas, oil, and distillate fuel oil (bbls.)
Residual fuel
oil
'4,717,350
4,669,700
115,233,000
5,215,000
17,891,000
18,180,000
.
Sept.
3
1,560,000
1,585,000
5,188,000
17,900,000
1,663,000
Sept.
Sept,
3
3
6,724,000
6,491,000
6,259,OCO
7,226,000
7,597,000
7,220,000
5,531,450
;
Mixed
at
17,645,000
—
at
1,981,000
of
(bbls.) at
Sept.
.Sept.
ZINC
OF
AMERICAN
(M
Slab
zinc
smelter
2,000
3
3
104,834.000
106,280,000
108,444,000
94,893,000
Shipments
——
(number of cars)
2,083,014
2,315,868
2,012,096
1,881,669
*"140,607
2,070,690
1,304,368
60,733
82,584
—
output,
25,560,000
25,804,000
24,885,000
Stocks
3
76,430,000
74,718,000
72,222,000
23,606,000
64,500,000
3
67,997,000
68,394,000
67,281,000
54,965,000
3
3
§703,930
746,912
716,824
895,131
§570,894
581,829
567,143
700,821
of 2,000
all
grades
end
at
of
lbs.)
ENGINEERING
CONSTRUCTION
ENGINEERING
—
period
(tons)
UniLled orders at end of period
Total
CONSTRUCTION—U.
July
01
(tons)
U, S. construction-,—
S.
DEPT.
Private
construction
Public
construction
*
—
—Sept.
Sept.:
8
Sept,
.
State and municipal
Federal
—
-
8 $146,541,000
$155,191,000
$257,314,000
$106,894,000
59,014,000
135,745,000
33,177,000
8
88,400,000
58,141,000
96,177,000
121,569,000
73,717,000
Sept.
8
48,984,000
55,425,000
106,697,000
56,434,000
Sept.
8
9,157,000
40,752,000
14,872,000
17,283,000
COAL
OUTPUT
Bituminous
(U.
S.
BUREAU
OF
MINES):
coal
and lignite (tons)—
anthracite (tons)
-
Beehive coke
3
8,050,000
7,910,000
7,550,000
12,253,000
3
3
887,000
921,000
689,000
1,164,000
9,900
7,500
152,100
.
*
-
8,500
TEM—1035-39
SALES
INDEX—FEDERAL
AVERAGE=100
—
-
Sept.
■
...
252
295
3
*1,239
271
'
.
1,423
-y-i
'
600
707
*
321
*263;
V
92
24
♦24
63
*68
106
♦100
87
30
23
21
21
20
21
nonresidential
buildings.
Religious
—
and
Hospital
recreaci.nai
Farm
—
17
1-——
and
public
10
15
;;,34
.
65
62
237
223
*506
13
*17
147
*144
'
,
215
v
451
.
Electric
output
(in
000
5,258,090
Sept. 10
kwh.)
5,543,913
5,530,090
(COMMERCIAL
STREET,
AND
INDUSTRIAL)—DUN
(other than mili¬
tary or naval facilities)—
BRAD-
&
INC.
Hospital and
Sept.
174
148
8
176
83
All
other
Military
IRON AGE COMPOSITE
Finished
Pig
iron
Scrap
,
steel
(per
steel
PRlfcES
METAL
Electrolytic
Straits
lead
(E.
&
M.
refinery
refinery
tin
ton)
gross
_
Sept.
6
13.705c
3.705c
3.705c
Sept.
6
$45.88
$45.91
$45.91
$44.66
Sept.
6
$23.92
$23.33
$20.00
$43.16
J. QUOTATIONS):
(New
(St.
York)
Zinc
(East St.
Louis)
17.325c
17.325c
23.200c
Sept.
Sept.
7
17.550c
17.550c
17.550c
23.425c
7
103.000c
103.000c
103.000c
103.000c
——-Sept.
7
15.125c
15.125c
14.750c
19.500c
Middle
Sept.
7
14.925c
14.925c
14.550c
19.300c
South
Sept.
7
10.000c
10.000C
10.000c
15.000c
East,
at
_
at—
—
;
_
of
U.
BOND
PRICES
New
S.
Government
Bonds
Aaa
Aa
u*—
■
—
.
.
.
Baa
.
L—
Railroad
Public
>
Group
■,
__
Utilities
Group
Group
Industrials
——
103.75
100.69
Central
U.
S.
BOND
YIELD
Government
Average
DAILY
AVERAGES:
-\i =
115 04
114.85
114.66
121.04
120.84
116.22
119.20
119.00
114.27
New
114.03
114.03
113.89
110.52
Outside
Sept. 13
106.56
106.21
106.04
104.83
111.25
109.60
116.22
116.02
115.82
111.62
119.41
119.61
119.20
115.43
109.42
109.24
107.09
corporate
■
;
________^
;
;
Baa
;
——
Railroad
Public
Group
Utilities
—
^
MOODY'S
RATIONAL
Orders
_
PAPERBOARD
received
Production
———
Unfilled
Total
United
York
CARBON
PAINT
(tons)
AND
AVERAGE=I00
r
in
;
—
-II-IIII
—
Sept. 13
2.90
2.91
2.92
3.10
2.60
2.60
2.61
2.84
Sept. 13
2.69
2.69
2.70
2.94
2.95
2.95
2.96
Sept. 13
Sept. 13
3.36
3.33
3.39
3.46
3.19
3.20
3.21
3.33
2.84
2.85
2.86
3.08
2.88
13
S3pt. 13
2.68
2.67
2.69
Sept. 13
349.5
346.1
341.8
3.14
422.0
_.sept.
3
262,601
173,980
3
193,515
184,605
229,455
171,094
234,396
Sept.
3
89
86
82
91
323,864
392,753
Sept.
REPORTER
¥
PRICE
of
3
365,609
294,327.
—1
129.3
129.1
128.7
(BUREAU
(lbs.)
EXCHANGE—SECURITIES
Number
by dealers
of
orders
Number of
shares
EXCHANGE
(customers'
Kiiowatt-hour
month
of
Revenue
■
METAL
sales
Odd-lot purchases by dealers
Number of
(customers'
orders—Customers' total sales
(E.
for
(per
Number of
shares—Customers'
Customers'
total
sales—~~~I
short sales.
Silver.
Customers' other sales
Dollar value
:
Short sales
Other
15,699
14,373
456,490
414,753
Aug. 27
$14,970,710
$18,312,782
$17,155,684
$17,094,361
ilAntimony
16,197
18,167
15,997
13,832
27
16,036
18,020
15,856
Aug
27
424,659
490,179
436,867
5,355
—""
$13,552,826
"*
Aug
27
A„|*
27
A112
Aug
.
i_i—_
a„»
of
418,149
484,824
$13,991,111
$16,102,928
$14,092,163
27
.
56
V
York
PRKIES
NEW
SERIES—U.
S.
DEPT.
OF
commodities
Farm products
IIIIZI
All commodities other
Fuel
and
All
materials—111111
Antimony
metal
1,902
tCadmium
(per
371,097
§ Cadmium
products.
189.6
6
161.6
161.9
6
145.3
144.9
145.0
6
140.6
140.1
138.9
—_——Sept.
6
130.1
130.0
,_Sept.
6
168.9
167.9
167.9
172.0
Sept.
6
188.8
188.8
189.9
204.1
6
124.4
other
Sept.
161.4
ounce)
per
97,937,000
104,184,000
100,808,000
90,624,000
194,020,000
173,645,000 '*105.544,000
Not Avail.
*17,937,000 % 24,376,000
19,904,101
19,914,218
19,297,128
$371,446,400
$368,577,900
$345,022,800
41,793,951
41,561,493
39,555,213
17.325c
17.059c
23.035c
17.551c
17.140c
23.425c
15.032c
13.562c
19.500c
14.791c
13.378c
19.300c
St.
Louis
73.835c
71.500c
71,391c
ounce)
—
min.
(§§)
U. S. price)
flask of 76 pounds)
in
Laredo.
cases,
Spot—f
—
43.727d
43.500d
$4.02522
$4.02513
44.667d
$4.02750
,
10.000c
9.360c
15.000c
103.000c
103.000c
103.000c
102.000c
102.000c
102.000c
$35,000
$35,000
$35,000
$74,556
$78,160
$75,000
41.730c
Nominal
$2,000
pound)
Nominal
$69,000
$93,000
$2,075
$2,075
$2,150
$2,150
17.000c
;;
OF
$1,900
;
$1,950
$2,000
17.000c
16.000c
20.500c
20.500c
40.000c
40.000c
MINES)—
July:
(bbls.)
from
Stocks
end
(at
(BUREAU
$2,000
>
20.500c
38.170c
35.000c
35.500c
*
Nominal
$69,000
pound)
Shipments
RR.
—
mills
of
(bbls.)
month)
(bbls.)_
used
EARNINGS
184.S
153.4
V
130.3
124.2
36,480,023
309,844,076
18,279,000
18,721,000
19,220,000
20,667,000
20,994,003
19,320,000
*19,784,000
10,149,000
18,856,000
:-vv
87%
87%
—
...
90%
168.4
•
Sept.
materials
•.
(Check):
CEMENT
of
Production
Capacity
'
$345,324,099
46,389,039
347,624,036
40.000c
Month
V
$394,013,075
26,941,739
288,294,425
of
(per pound)
Aluminum, 99% plus, ingot (per pound)——
Magnesium, ingot (per pound)
PORTLAND
;
$315,236,164
QUOTATIONS)—
(per pound), Chinese
refined (per ounce)
(per
Sept.
_—
10,965,371
72,308,991
33.500c
(150,590
163.8
63,699,715
39.000c
167,310
152.7
51,523,780
33.500c
175,520
:
19.731,192
,14,350,863
39.000c
127,720
*
47,386,574
24,345,207
11,333,426
pound),
♦♦Nickel
161.6
64,315,361
$18,671,510
25,631,059
(per
1161950
152.4
73,546,812
Antimony
116,950
162.5
80,571,687
Antimony
159,990
152.7
32,744,713
66,580,063
41.730C
159~990
6
65,463,931
50,361,182
)E. & M. J.)__
(per pound), bulk, Laredo
188,550
6
73,666,738
34,741,205
pound),
183~550
Sept.
$22,701,824
54,302,932
(per
173~960
Sept.
(per
Platinum,
Sept.
foods"!
"
lighting
Building
•
than farm and
products
and
Metals
~
IIIIIIlir
$13,207,159
August:
iper
(pence
ounce
tCadmium
LABOR—
of
Straits
13,776
.
Foods
(per
Quicksilver
shares
27
J.
M.
pound)—East
372.999
All
Textile
Gold
173,960
27
,
Au„
WHOLESALE
141
5,462
431,405
%L
sales
Round-lot purchases by dealers—
Number
27
6,510
147
|
—
New York, 99%
16,043
470,419
161
11
pound)—
York
13,603
~Aug
I
Round-lot sales by dealers—
Number of shares—Total sales
(per
(per
386,415
vv-
16
Sterling Exchange—
New
27
27
_
&
month
pound)
and
27
27
59
13
consumers—
omitted)
customers—month
Common, New York
Common, St. Louis
Au2
Aug
"
•8
*74
pound)—
(per
Aug
Aug
__
Customers' short sales
Customers' other sales
*
ultimate
Electrolytic, domestic refinery
Electrolytic, export refinery
Lead
Zinc
sales).
to
(000's
ultimate
———————
PRICES
New
■
9
13
—
„: Number of ultimate customers at June 30—
Tin
value
>•
80
84,048,000
June
from
June
purchases)—
—
Dollar
MINES)
(lbs.)U.
Sterling Exchange
COMMISSION:
OF
—
Silver, London
Odd-lot sales
.
EDISON ELECTRIC INSTITUTE:
144.6
STOCK TRANSACTIONS FOR THE
ODD-LOT ACCOUNT OF ODDLOT
DEALERS
AND
SPECIALISTS ON THE N.
Y.
STOCK
46
99.423,000
(lbs.)
stocks
Silver
1:
11
203
*51
»
■
July:
Shipments
Exports
City__
(lbs.)
Producers'
182,685
INDEX —1926-36
York
BLACK
Month
Copper
—I Sept.
at
DRUG
-
2.45
States
City
New
of
Average
■
.
(tons)
orders
2.23
ASSOCIATION:
(tons)
Percentage of activity—
OIL,
,
COMMODITY INDEX
2.21
Sept. 13
Group——.——___—_—I—_ Sept.
Industrials Group
2.23
9
•185
57,816,490
—
121.04
Sept. 13
■
6c
Central
119.20
Sept. 13
Aaa
Aa
DUN
^.L.
i
Pacific
;
Bonds—.
—
Central
Sept. 13
Sept. 13
Sept. 13
25
ClTlES—Month
Atlantic
Production
MOODY'S
VALUATION
INC.—215
Atlantic
Sept. 13
Sept. 13
.Sept. 13
_.
.........
—„—
103.99
*34
51
:
Mountain
103.76
.Sept. 13
35
9
England
West
AVERAGES:
*
Average corporate
.
DAILY
49
-21
July:
South
MOODY'S
PERMIT
♦71
*39
210
service enterprisesdevelopment—
public
BRADSTREET,
17.325c
,
......
public
other
95
72
40
facilities
naval
water.—
and
7
at—
Louis)
and
and
Conservation
Ail
Sept.
;
.(New York) at—
Lead
nonresidential.—
Miscellaneous
BUILDING
at
at—
Sewer
3.720c
copper—
Domestic
Export
ton)
gross
iper
institutional
Highways
PRICES:
(per lb.)
'|S'- 7
Nonresidential building
5,166,126
Educational
FAILURES
181
,
314
36
.
542
building
v
321
66
—
93
20
.
50
.
37
utilities.
124
28
...
Ins ,:v.
340
—
Telegraph—
construction
Residential
•;••••
22
.•
;
60
-
—
Telephone
110
•
15
—
construction
Other
23
and Institutional
Remaining1 types
INSTITUTE:
$1,874
•$1,745
*'
700
92
Public
EDISON ELECTRIC
60,357
Commercial
Other
308
228
53,423
Warehouses, office and Joi't buildings
Stores, restaurants a?id garages
SYS-
RESERVE
41,336
1,371
Railroad
STORE
45,246
♦76
Public utilities
DEPARTMENT
68,605
85,403
73
Social
„
—.
72,030
Industrial
:
Sept.
Sept.
(tons)—.Sept.
Pennsylvania
74,569
84.383
$1,913
construction
Educational
_
68,180
73,819
74,333
OF
building (nonfarm;
Nonresidential
bui.ding inoniarm)
NEWS-
———
60,335
millions):
(in
construction
new
Private
RECORD:
Total
147,343
;>
(tons
1
Residential
CIVIL
162,594
Month
lbs.)
(tons
LABOR—Month
freight loaded (number of cars)
Revenue freight received from connections
Ago
August:
7,220,000
RAILROADS:
Revenue
Year
Month
therms)—J
INSTITUTE, INC.
.
BUILDING
ASSOCIATION
sales
gas
AMERICAN
of
Sept.
—Sept.
Sept.
Sept.
Previous
5,540,000
terminals, in transit and in pipe lines—
unfinished
and
—
(bbls.)
output
Stocks at relineries, at bulk
Finished
.
.
—'&L.
(bbls.)
output
(bbls. of 42 gallons each)
average
stills—d&ily
to
gas sales (M therms)—^
Manufactured gas sales (M therms)
INSTITUTE:
PETROLEUM
Latest
Month
month
:
•
gas
For
—
148.2
136.6
124.3
135.4
OF
Total
CLASS
—
AMERICAN
operating
I
ROADS
RRs.)—Month
(ASSOC.
of
July:
revenues
Total
operating expenses
Operating ratio—per cent
$700,648,360
$735,439,107
$841,993,545
569,818.427
533,177,393
626,159,043
81.33
79,98
$66,172,895
$72,407,446
$96,398,693
50,337,002
61,263,279
105,256,803
27,200,000
43,400,000
76,700,000
—
Taxes
—
Net
railway operating income befcre charges
Net income after charges (est)__
74.37
Special indexes—
Grains
TRUCK TRAILERS
Livestock
years
1946
1941^
to
1948
I"'
;
Meats
skins
———
~~~~~~
;
Hides and
Sept.
6
154.6
152.9
Sept.
6
208.6
203.5
Sept.
6
226.8
225.7
Sept.
6
193.7
194.3
150.6
211.2
.
.
datere'TheInwe^ehM4nl,il?0abaiIeIS
inelSlve motSSt 0?
224.8
184.8
•-
runs-
^The weighted finished steel composite
Sepft S'"" f°r
179.2
Month
Production
(number
of
units)
267.8
Shipments
(number
of
units)
2,711
2,541
214.1
4,113
Shipments
(value
dollars)
$9,347,366
$8,992,275
$12,108,978
was revised for the
' Je"S 193' * 194°
COMMERCE)—
268.2
of June:
♦Revised
i>f foreign crude
(.DEPT. OF
the
figure.
in
tBased
on
2,817
the
producers'
producers' and platers' quotations.
tons
or
more
but
less
than carload lot
Colbourne, N. S.f U. S. duty included.
<
quotation.
2,752
tBased
on
§Based on platers' quotations.
the
T
*
'f.
-
average
of
fDomestic, five
packed in cases, f.oJ). New York.
§§Tin contained.
4,047
♦♦F.O.B. Port
,
,
.
1-.,
Volume 170
Number 4838
COMMERCIAL
THE
FINANCIAL
&
CHRONICLE
Steps Toward International Monetary Stabilization
(Continued from first page)
time
banks and governments, one con¬
being
sequence
bears
$35
that
dollar
our
official exchange rate of
an
per
of gold
ounce
another
in
rate
and
often
non-official
or
private markets. Multiple quota¬
tions
for
tional
the
mental
in
the
funda¬
monetary
relations
that two
unit
in¬
our
for
for
the
standards
or more
measurement
monetary
interna¬
a
maintain in
we
ternational
reason
in
reveal
defect
standard
of
dollar
markets
the
same
We need to extend the benefits of
fixed
our
standard monetary
beyond central banks
ments
who
to
use
all
unit
and govern¬
private
individuals
Because of the large gold hold¬
ings of the United States, we are
in
the
of
pered
best position of
any
coun¬
much
repressed.
or
webs
wealth.
of
The intricate
foreign trade which
re¬
experts of that nation, their serv¬
ices to be paid for by the country
requesting tnem. Among the mem¬
bers of tnese
commissions should
flect the activities and ingenuities
of millions of individuals and cor¬
be
porate
enterprisers have been
subjected to strangulating edicts
by governments whose officials
the commission's program involve
an invitation to our
people to ex¬
are
tion,
supposed to
linite
than
this
manage
in-
variety of exchange better
the
can
millions
of
traders
who of necessity must know their
business
The
"planning"
that
in
terprise
is
serious
field
than
of
one
mistakes
quence,
government
this
successful
more
en¬
extremely
governments
and,
as a
should
we
be
can
private
the
of
specialists in the fields of
fiscal affairs.
etary and
financial aid
tend
private
burden
conse¬
correct
our
immediately. Already the
world, including ourselves, has
course
mon¬
Should
another
to
enterprise,
na¬
without
the United States tax¬
on
payer, should be able to provide
the needed help if the request is
defensible
suffer loss.
or
notion
in modern times
dollars.
our
waste
Private enterprise has been ham¬
confusion.
mean
and
a
is not
and
merely for
The
in
order
which
various
parts of the monetary and fiscal
programs
would
be
instituted
should be expected to vary from
country to country because of dif¬
ferent
conditions.
debate
as
The
which
to
common
first—
comes
political, economic, budgetary,
monetary stability—is largely fu¬
countries to accomplish much un¬
less and until we set our own
planning.
cording
house in order.
ments
to international
monetary
zation.
We
cannot
way
stabili¬
other
expect
and
exercised
as
to
such controls.
establish
in the United
are
redeemable
a
cur¬
rency at $35 per fine ounce
thus permit the ingenuity of
vate
and
pri¬
enterprise to take gold
ether
and
freely when and
go in its search for
money
where it may
profit.
The
fact
should
be
faced
monetary "stability" refers,
tically, to the free use of
that
prac¬
gold
The Geneva
Commercial and Financial Chron¬
icle"
of
July 7): ".
control," he says,
tivism at
points
the
of
country cannot
Monetary
gold
at
a
stability in
outside world.
tivism
.
.
neuralgic
A
...
preserve a market
change
into
money
rate.
Exchange
is collec¬
.
economy.
and
other
.
of the most
one
economy ... if
tivist control at
fixed
econ¬
omist, Wilhelm Roepke, has re¬
cently put the matter as follows,
and, I am sure, correctly ("The
internationally and
domestically,
and
the
redeemability or convertibility of paper
currency,
there
the
is
collec-
door
to
the
That is what
ex¬
control means.
Collec¬
involves collectivism
here
this basic and practical sense does
not refer to, nor does it neces¬
everywhere
sarily involve,
stable price level.
country is impossible without col¬
monetary
exchange mar¬
exchange con¬
trol
you
must be prepared to
accept the development towards
generalized collectivism.
If you
With
the
known
will,
a
best
to
the
man,
and
should,
price level
stable
matical
abstraction
system
price
level
fluctuate.
A
is
mathe¬
a
and
does
the
economic
health
justments that
Under
tional
our
gold
may
not
to
as
malad¬
or
restricted
standard
our
are
which
we
monetary unit
been
and
—
a
gold reserves
than ample to maintain.
more
to
fixity have
central
banks
governments, and have been
denied
to
private
enterprise
to
which, above all, they should be
Provision
extended.
flow
for
a
free
of
gold, silver, and other
money across international bound¬
ary lines is a basic and required
'step
in
international
currency
stabilization.
a
Mistake
International currency stabiliza¬
also involves the treatment
tion
of each country as a separate unit
having
its
own
particular
or
unique problems. The attempt to
develop general or blanket plans
was, and is, a mistake. Our pur¬
general collectiv¬
stick to exchange
like
you
it
or
Governments, including our
should return to their proper
province of regulation in the in¬
own,
terests of the maintenance of free
competition, and abandon
programs of management,
produc¬
tion, and competition with private
The central policy of
enterprise.
government should be the
encour¬
private
enterprise
with the government confining it¬
self to its appropriate activities—
those in which private enterprise
of
agement
cannot
does not function.
or
jective.
free
market,
Ob¬
values
are
the only proper values known to
man,
and
should recognize and
we
course
in recent years,
monetary
enterprise.
upon
misconception
of
measurement
that
rests
which
standard
is
fixed
so
impor¬
Such standards are
great
facilitating instruments of private
resort, as a policy, to
When
a
high degree of national "plan¬
ning," in which differences in, and
ingenuity of, individuals are sub¬
embarked on inter¬
national "planning" in which the
different
problems of different
nations are covered by interna¬
tional blanket plans.
Such pro¬
grams have been launched without
adequate
we
analysis
and
exposure
of their fundamental defects.
The
ognition.
exist and require rec¬
Failure
to
appreciate
on
Gold Standard, XT. S.
vary
ac¬
condi¬
the
various
countries.
is, for example, the ques¬
of how much political in¬
tion
stability can exist without en¬
dangering monetary and fiscal
stability. There is also the ques¬
tion of the cooperation of a people
and of their officials in
the vari¬
nations, assuming that a good
ous
plan has been devised by a com¬
mission.
If
insists
nation
a
taining
main¬
on
governmentally-managed economy with its managed
irredeemable currency, there is
a
apparently no important aid of a
genuinely beneficial nature that
can be extended to it—definitely
not from the point of view of the
lender or giver and probably not
the
from
recipient.
point of view of the
The first step 'for such
countries
is
to
abandon
govern-
mentally-managed economies and
to start rebuilding by encourag¬
ing
private
enterprise
in
every
possible.
way
And
take
this
on
Although
point
look
good
a
we
need
we
at
to
we are great
believers in democracy and dem¬
ocratic
processes,,
our
interna¬
lending and give-away in¬
antithesis
the
are
of
the democratic process.
They are
evidence of governmental finan¬
cial dictatorship and lack of be¬
lief in the democratic process. A
look
the
at
multitude
lending
government
international
both
of
our
institutions,
and
domestic,
should reveal the extent to which
financial
dictatorship by our
has
extended
its
our
people.
These
government
grasp
over
institutions
are
monument
a
government's
our
lack
lack
democratic
the
in
faith
of
in
After
we
have led the way in
international
currency
tion
by establishing one
price for all holders of
stabiliza¬
standard
our
cur¬
thus
confining exchange
the gold
import
and export points in a free mar¬
ket, we should extend such aid
internationally as we appropri¬
ately can.
k-.
rency,
fluctuations
to
This should
of
be done by means
When a nation
commissions.
requests
aid
our
these fundamental differences has
commission
unfortunately resulted in loss of
tent
rency at our present rate of $35
ounce of fine gold would
be
the most potent force at
our dis¬
per
posal
trol.
(3) Provision for
redeemable
a
100 times
they
more
their
and
note
to
the
ratio
of
is
relatively
approximately 14%
for
an
average
the
high.
gold
as
It
and
process
private
to
belief
of
enter¬
prise.
at
the
Should
time
same
Be
that,
receive
(4) A redeemable
for
the
fact
that
foreign
countries
should be able, sooner than other¬
wise would be the case, to stabilize
their
many
men,
we
should send
composed of
to
cooperate
a
compe¬
with the
that
currencies
in
terms
of
monetary standard and currency.
our
redeemable
control
able them
public
currency
people di¬
in
high degree over
and would en¬
a brake on the
spending and further de¬
public
preciation
purse
to
in
put
the
or
of
up
paper
money.
What
that
we
and the world need Is
Congress lead the way
in currency stabilization by passage of the Reed bill, H.R. 3262,
our
Every proposal for a delay is
proposal that we continue our
rid themselves of the insurmount- parade into a system of govern¬
able obstacle of a government- ment dictatorship with the atally-managed economy.
tendant destruction of our econProvision for a redeemable cUr- omy, people, and nation.
;
Dollar-Sterling Conference
Agreement to Ease Dollar Shortage
(Continued from page 9)
the creation of
tives
area
to
and
appropriate incen- mies which depend in considerexporters to the dollar able part upon foreign markets,
a vigorous
attack upon
VH
costs of
production to enhance the
position of sterling
The discussion of possible indi¬
area
products. Maximum efforts vidual arid joint actions,
both,
would be made to direct exports long-run
and short-run, ranged
competitive
the
to
dollar
area
and
build
up
earnings from tourism and other
value
of
our
over
wide
a
field.
addition to
In
the
question of dollar earnings of
services.
the United Kingdom and the rest
As a part of this export cam¬ of the sterling area,
mentioned,
paign by the sterling area coun¬ above, the Ministers gave special
tries, it was recognized that an attention to the followinng sub¬
was
the creation
a
On their
including the sterling
that the United
countries,
States and
Canada
should reduce
obstacles to the entry of
order
to
export of goods and the pro¬
vision of services, including tour¬
ism.
It
was
recognized
that
such
a
policy would be in the interest o'
producers in the United States and
Canada, for only in this way can
the
future level of trade provide
adequately for those sectors of the
American
and
jects:!
(1) Overseas investment.
Canadian
econo-
arrangement®
(2) Commodity
stockpiling.
(3) Limitations
and
on items whfeh
financed under present
Economic Cooperation Adminis¬
tration procedures.
(4) Customs procedures.
'
be
may
.
(5) Tariff policy.
(6) Liberalization
ropean
of intra-Ei*!-
trade and payments.
(7) Sterling balances.
(8) Petroleum.
j
H
,
(9) Shipping.
(10)
for
Provisions
continuing
consultation.
goods and
the
rect
opening
to
and
A redeemable cur¬
rency should discourage agitation
for further manipulation of our
paper money.
our
govern-
increase their production—assuming that they first
gold
provide as wide an op¬
portunity as possible for those
countries to earn dollars through
to
may
she is
,
variety of dishonesties that afflict
a people laboring under the dis¬
advantages
of an irredeemable
restore
the
redeemable
currency en¬
services from debtor countries, in
would
or
foreign
trade to private ingenuity if he
or she is
not fighting against ir¬
area.Tt was agreed
A
woman
Our present rate of $35 per finesavings,
investment,
long-time commitments, and pro- ounce of gold should not be ab¬
duction.
Resumption of specie j tered since fixity, if it can be
payments is often, probably usu- ! maintained in a free market, is a
ally, followed by business expan- ! basic requisite of a good monesion. Although no monetary sys- tary standard, and since we have
tern devised by man can prevent
had the benefits of such fixity for
business
booms
or
recessions sixteen years, though improperly
since their causes are many, an confined to transactions between,
irredeemable currency causes our Treasury and Reserve banks:
more
trouble
than
any
other and other central banks and govmonetary system thus far known,! ernments.
There are no valid
and it is particularly vulnerable
arguments that can be offered in.
to
shocks.
It is poison in the behalf
of ah alteration in the
bloodstream of a nation.
weight or fineness of our stand¬
ard
monetary unit,
considering
(5)
With
private
enterprise
the high ratio of our gold stock
able to obtain and to use gold in
to our non-gold money and de¬
foreign trade, there should be a
No
argument
that
we
healthy and proper type of ex¬ posits.
should join with other countries
pansion
in
foreign
exchange,
in a general devaluation of cur¬
trade, and i n v e s t m e n t s of all
rencies can have validity for us.
kinds and we should benefit from
wide
(2)
or
courages
greatest extent feasible, an expan¬
sion of dollar earnings by debtor
minimize
man
purse
redeemability domestically durWorld War I on a gold reserve
ratio ranging from 8 to 11%.
mg
callyv because our domestic cur¬
rency would be redeemable. The
principal
benefits
wo uld
be
to
no
our
part the creditor coun¬
tries undertook to facilitate, to the
much
clearly needs to be empha¬
today, and with urgency,
properly assume that- he
fighting Socialism nr a
8%
domesti¬
do
gate to Socialism should be
open.
during i mentally-managed economy In
country and Fed- ' some other form, or for a return
eral Reserve System operated on
to the people of some direct cona
gold standard. We maintained trol over their public
of
Done
benefits
far-reaching
are
redeem¬
a
1915-1932,
years
which time
essential element
What
of
kept
sized
is
compared
of roughly
opponent
open
It
stock to non-gold money and de¬
posits
currency
dictatorship
currency is wittingly or un¬
wittingly insisting that this wide-
deposit
our
a
able
out
pay
and
Provision for redemp¬
should present no problems
because
into
econ¬
enemies.
Every
liabilities.
tion
march
our
redeemable
government
natural
asset cash than
ordinarily have
against
end
A
omy.
currency would provide the Fed¬
eral Reserve banks with from 65
10
to
governmentally-managed
profess
loudly and often that
stitutions
J
no
37
ourselves.
to
seem
(1) Our people would have an
honest money.
This fact should
Should Aid Others to Follow
basic differences in nations, as in
individuals
to
dissimilar
these:
and cannot succeed.
merged,
the
be
feeling of confidence on the
standards employed by govern¬
part of sterling area exporters
As we extend the appropriate They must feel that they will be
ment planners are dependent sole¬
ly upon the desires and powers of aid to other countries by return-, afforded the opportunity to re¬
the officials, and have no validity ing
to
a
thorough-going gold main in the markets of the United
in economic scjence.
These facts standard, by supplying commis¬ States and Canada in which they
should not be "confused with the sions for tbose countries request¬ will have gained a place, and that
necessity or importance of estab¬ ing such aid, and by liquidating the minimum of difficulties will
international
governmental be placed in their way in entering
lishing and maintaining, by gov¬ our
ernment
fixed
standards
of collectivist institutions, we would those markets.
tant.
From
in
tional
and its lack of success, should by
this time make it reasonably clear
it
in
must
whether
and fair
expected
to
There
adhere to that fact. The subjective
Blanket International Plan
suit of this
a
the
on
you
our
restricted
inside
interna¬
standard
But the virtues of this
and,
If you want
believe
.
ism
later,
or
not."
have benefited for 16 years from
some
of the virtues of fixity in
fixity
.
sooner
collectivism
lectivism
kets.
control,
exist.
bullion
inversely,
.
necessarily reveal anything
be
tions
Exchange controls by govern¬
States seeking further help. One
thing we can and should do to
aid them, and also
ourselves, is
Representatives of England and
should
that the order
reason
.
through
the International Monetary Fund
constitute the application of colleetivist philosophy at their inter¬
national boundary lines by those
governments which participate in
Other countries
tile for the
to
profligate
government spending which, ap¬
parently, is definitely out of con¬
or
suffered immeasurable losses in
wealth and production as a result
of resort to such
international
try in the world to lead the
money.
There seems
other hope to end our
with
gift.
(1069)
VIII
working
A
group
investment
reviewed
experience
and
for the flow of
ment,
from
both
North
areas,
future prospects
productive invest¬
private
and
America
to
especially
countries.
on overseas
both recent
It
was
public,
overseas
underdeveloped
agreed
that a
such
investment
could make an important contri¬
bution toward reducing the ster¬
high
ling
level
-
dollar
of
disequilibrium and
this problem
that every aspect of
(Continued on page 38)
,
38
THE
(1070)
COMMERCIAL
Dollar-Sterling Conference
ing basis.
In
the
initiate
to
order
President's
this
work,
Committee
for
Financing Foreign Trade will be
asked
immediately
to
explore
possible
lines
in
action
of
with
of British
co-
present Ministerial group.
arrangements for continuing con¬
prospects of the same unsatisfactory results. We will probably
whichr concerned
other countries and would require
sultation
make
further study.
between
agreed that this was one of
was
subjects
While
with
dealing
channels
usual
These
supplementing
—
the
communication
of
governments
will
—
be
to
used
keep under review the
effectiveness of actions already
g, XIV
Investigation of the ways in agreed upon and to prepare for
the
sterling j; area coula governmental -consideration meas¬
years.
move toward a position in which
ures
which
could carry further
oiates Government was to seek
it could earn its own way led to those adjustments which are con¬
.brther negotiation of trade agreethe
discussion
of
other special sidered to be necessary.
^ents -through which additional
In establishing these arrange¬
problems, including petroleum and
.eductions might be made, within
shipping—two important elements ments for continuing consultation,
ne framework of the Reciprocal
in
the sterling area balance of the three governments wish to em¬
groups
financial and business representa-
tives.
Thursday, September 15, 1949
tariffs during the last 15
which
The policy of the United
~ia*es
Trade Agreements Act.
corresponding
and Canadian
operation
CHRONICLE
It
(Continued from page 37)
should be explored on a continu-
FINANCIAL
experts of the three governments.
the
Agreement to Case Dollar Shortage
&
xn
"
There was agreement that one
the ways in which the competi-
all
aspects of private and public in-
picture.
The United
Kingdom representatives set forth
phasize that these
underline
rather
the facts of the very large dollar
deficit which
the sterling
area
ish
presently
tion within the entire community
payments
incurs
because
of
oil
arrangement!
than
dimin¬
interest;
their
velopment of
in
the
economic
de¬
coopera¬
of United Kingdom
products might be improved was transactions, and their desire to of Western nations. The tripar¬
reduce this deficit to the mini¬ tite
arrangements will not in an>
daily to the problem of incentives jy a widening of the area in
mum possible level.
way
encroach upon, or detrac
and of providing a suitable en^hich such products comIt was mutually recognized that
from, the area of competence oi
vironment for a high level of pri- peted freely with those of other
dve position
vestment, the committee will be
to address itself espe-
expected
countries.
vate investment.
In
working group on commodity
arrangements and stockpiling gave
attention
special
tin.
The
tives
stated
steps
that
ported
;
that
The
to
natural
including
was
rubber
additional
re-
United
States
prepared to open
the
Government
of
the
consumption of synthetic rubber.
United
States
review
would
its stockpiling program, with particular reference to rubber and
X
,
|
another
group
difficulty
should not in itself force the
being
Kingdom to reduce its
purchases from areas with which
it does not have
practical cneans of payment,
to the
experienced
by
Kingdom in making
fully effective use of its Economic
Cooperation Administration aid to
the
United
existing
of international economic
collaboration.
On the contrary,
organs
these
for
arrangements
continu¬
ing consultation, by contributing
producing countries and materially to the solution of prob¬
companies.
The Ministers recog¬ lems which today adversely affect
major
nized that these two questions of
shortage of
a
petroleum and shipping could not
be
resolved
the
in
short, time
summary the Ministers
the three countries concerned
XV
been
agreement
on
the objective toward which poli¬
cies should be directed and agree¬
ment
certain
on
immediate
satisfied
the
to
that
solution
the
of
dollar difficulties
has
,
ter
into
remain
and
in
dollar
markets which are open to them,
there is the prospect of reaching a
to
comes
an
end.
tj
.
It has been agreed that, in order
to carry out the basic purposes
the Economic Cooperation Act,
will
be
of
it
for the United
necessary
Kingdom to finance with its share
of
ECA
funds
wider
a
of
range
dollar expenditures than has hith¬
erto been
eligible, both ; within
and
outside
After
the
the
United
careful
States.
examination
of
be made
namic
Cooperation
would
broaden
increase
funds
the
the
but
use
amount
allocated
This
Act.
ECA
of
the
to
not
United
Kingdom.
multilateral
In
the
u
consideration
which
ures
of
creditor
meas¬
countries
might take to reduce barriers to
trade, it
toms
was
recognized that
procedures
stacles,
"•••'•'*
Technical
cus¬
create
may
psychological
actual.
ob¬
well
as
,
discussions
,
of
this
tion and proposed
legislation, was
contemplating construc¬
already
tive steps in this field.
Canadian
Government
would undertake a further review
of the administrative operation of
its customs act in the light of
these discussions.
As to tariff rates, it was noted
.that high tariffs were clearly in¬
consistent with - the position of
creditor
countries.
There
had
.
,
and sub¬
stantial reductions in
for
of
exceptionally large accumula¬
tions of sterling which
mainly during the
up,
for
purchased
of
ance
In
the
the United
and
services
in
further¬
overseas
the
June,
goods
built
were
war, as
result of payments
by
Kingdom
United
concept usCd in the Bretton Woods
agreements), gold-
common
war
effort.
1945, these balances
$13,500,000,000. Since
taxed to the limit and either
call
for
drastic wage-cost-price
deflation
Standard
and
theorists
Some
however,
will
a
serves
to
held
as
as
at
re¬
by the countries concerned.
the
extent
that
the
a super¬
imposed credit structure by
tral
authorities
banking
cen¬
balances
the
this
policies
(isolationist)
indeed
complicate
the
does
operation
exchange mechanism, but
fact
does
not
warrant;;.dis¬
crediting the gold standard system
—its advantages are too invaluable
to abandon. Under the
gold stand¬
prices are quoted in terms of
gold, and gold passes freely from
country to country in making
ard
payments.
Paper
money
stand¬
liquidated, some proportion ards, on the other hand, are es¬
Kingdom production of sentially national, or at best, re¬
goods and services is used to dis¬ gional. Methods of managing the
are
of United
charge this liability instead of to
pay for current imports of goods
(C) This whole problem* in its
various aspects, including the ne¬
cessity
to
provide
capital
goods
standard
and so
of
differ for each country,
do the successes or failures
management.
standards
tend
nationalistic
authorities
to
Managed
become highly
because
are
paper
monetary
constantly subject
for
to domestic economic and political
a
pressures.; Furthermore, since the
development, was discussed in
preliminary way on the basis of
prior technical examination by the
to
paper money
bring
is inconvertible, cash
the
domestic
economy
into alignment are disregarded or
neglected.
Instead, new controls
are
imposed
another in
bring the out¬
side world into adjustment with
futile
one
effort
upon
to
the domestic economy. Since dif¬
ferent managed economies have
different
ideas
on
how
things
should be managed, the result is
invali¬ likely
operation of this "gold-
istic
In
be
that
was
practice,
substantial proportion
continue
maintain
monetary management of
of
services.
Inconsistent
Not
With Monetary Management
out¬
coun¬
(B) In principle the whole of
these balances represents a charge
on United
Kingdom production of
goods
reserves
price mechanism."
It may
be granted that monetary man¬
agement dominated by national¬
standing at the end of 1948
same
gold
a
flow
the
case
on
ratios and foreign exchange rates
see and to heed.
dates the
approximately
June, 1945.
exerted
for all to
Gold
under these circumstances
means
"off is well-nigh irresistible, and the
the pres¬ disciplinary correctives necessary
and was reflected on cash reserve
fluctuations both in the total and
holdings of individual
tries, though the .amount
either
In
cept that imposed by government
management.
The temptation to
solve domestic problems by money
force the country
or
sure was
then there have been considerable
in the
might
reserves
be
gold."
period has been the existence
and services.
«
already been significant
sterling
One of the problems of the post¬
war
To
Canadian representatives stated
the
of
financing interna¬
as
..
subject disclosed that the United
States,' through administrative ac¬
that
use
the purpose of
tional trade.
amounted to
XI
,
sterling. The existence and avail¬
ability of such holdings is an in¬
tegral feature of the widespread
standard
system
and
cessful
operation.
We
y
analyze
to
.he conditions essential to
its
suc¬
find
may
that the conditions essential to th6
successful
operation of the con¬
gold standard systems are:T
vertible
the
essential conditions
same
nec¬
to the operation of any
system involving the harmonizing
of the domestic economic equilibessary
rium
with
ance.
We
the
international
find,
may
the
also,
by
of government monetary
management is
the
of
of the
one
c
that
control,,
market,
,
bal-
excesses
essen¬
tials necessary to harmonize inter¬
national
external
and
This does not
stability.
that
mean
can
we
—both domestic and international. y
It means that automatic pressures
to
end
in
hopeless
con¬
fusion.
No
U.
needed
convincing evidence is
to
illustrate
the
trend
toward nationalistic monetary and
trade policies than the postwar
and
with
its
web
of
currency
exchange controls, import and
restrictions, bilateral
or
export
,
"pairing off" trade arrangements.
(Some
275
lateral
or
trade
these
of
more
agreements
been entered into
bi¬
have
sincel945.) This
trend toward rationalism is taking
place in spite of Bretton Woods
agreements, ITQ, and
multitude
a
of other cooperative arrangements.
-f
Various
proposals
are
being
made to meet the present British
and world crisis.
Some of these
are
wholesome
costs and
—
e.g.,
decrease
pricey, increase produc¬
tion and exports, decrease govern¬
ment
expenditures—but
mentum
is
still
Should
S.
Off
Lead
Only a few countries are
in a position to return to a
vertible
system
monetary
now
,
con?
>
on
a
full
gold
standard
basis.
The
United States is one of these. We
have ample gold reserves, bal¬
anced
budgets (confidence in our i
ability
balance
to
Federal.
the
favorable i
political conditions) and we enjoy a strong international creditor *
position. Hence, we are in a con¬
dition to lead off/ The passage
budget
—
under
Reed
the
more
Bill,
the
in
now
be an appropriate
first step for us to take. It would
would
much to
do
restore
and abroad,
once
us
confidence in
present-day dollar, both here
our
and
it would protect
against further
and for all
tinkering with the price of gold.
The next step involves the res¬
toration of
ity
in
monetary convertibil¬
as
this
by
other
many
countries
It is significant that
possible.
as
proposal was recently made
eminent French economist,
an
Jacques Rueff. He suggests that
large part of the resources made
available
by the United States
a
under
the
Marshall
voted to the
the purpose
central bank
not
Plan
be
de¬
purchase of gold for
of
reconstitution of
does
He
reserves.
maintain that the reconstitu¬
tion of metal reserves would suf¬
fice to
assure permanent monetary
convertibility but he does not con¬
tend that "placed within the frame
work
of a
general program of
financial and economic reorgani¬
zation
...
it would make it pos-'
sible to rapidly
more
world
di¬
a
rect relation to assets.
of
A large number of countries have
(Continued from page 4)
been accustomed to hold either term money rates to tide over tem¬ reserve ratios have little
meaning
all or a part of their foreign exporary strains; or, in order to cor¬ and
potential
credit
expansion
change reserves in the form of rect fundamental disequilibria (a and inflation have no limit ex¬
dollar
expenditures proposed
or authorized by the
United Kingdom, it appears that
eligibility requirements can
be
broadened to the extent required
within the limits set by the Ecoto
| countries.
is, therefore, appropriate at
time, to reexamine the gold
House,
Currency—Real
European Recovery
Problem of
It
this
...
Gold Convertible
ited.
char-
converts >;
made
„
.
corrections
the money
bility mechanism.
sterling-
been
to
examinations, initi¬
satisfactory equilibrium between
ated during the conference, of
the sterling and dollar areas 4>y
questions on which it is hoped
that useful understanding can be the time exceptional dollar aid
Canadian products would be the
cover its dollar deficit.
This dif- subject of continuing review by
ficulty arises out of the fact that, representatives of the three govalthough
the
United
Kingdom ernments through continuing fareached under the direction of the
needs dollars to pay for goods in cilities for consultation..> ¥
4
the United States, to make settle-i
>
ments with other countries, to pay
for services, and for other pur(A) A further subject which
poses, the types
of transactions was; discussed was
the United
which may be financed by ECA Kingdom liability represented by
dollars have been definitely lim- the sterling balances of other
semi-automatic
acteristic of
of liabilities would again have
are
by the conclusions recorded above.
which will be taken to bring that
They are confident that, with sus¬
objective nearer. There are, how¬ tained efforts on all sides and with
ever, as has been emphasized, a the seizure of every opportunity
number
of
questions requiring by sterling area exporters to en¬
closer examination than this short
period, but without! /
substitute for they/
any
contribution
real
a
steps
It was agreed that any United
conference; has allowed.
Kingdom import regulations as
It
is proposed, therefore,
they affect United States and
continue the
another
providing
would be put on reserves as credit
or
debt are expanded, and that
XVI
In
has
supply enough dollars toyj
international
payments r?
balance
working of the entire Organi¬ dispense with management, but it
zation for European Economic doqs mean that central bank (and
Cooperation group and yet are not the Treasury) policy should oper¬
susceptible of solution within that ate within the limitations of a
group, will facilitate the progress gold standard convertible currency
the facts and to provide the basis
for subsequent discussions.
There
assume
the
study would be required. In the
case of petroleum
they agreed to of economic collaboration in the
appoint representatives to analyze wider field.
given by
was
other
and
ment and Article 5 of the AngloCanadian
Financial
Agreement
presented an obstacle to such a
United
Special attention
OEEC
available to them and that further
ars
tin.'.
the
difficulties,
*nd raised the question whether
he provisions of Section 9 of the
Anglo-American financial agree-
chat such liberalization of United
Kingdom
import regulations
should be considered, since the
Jnited Kingdom shortage of dol-
government order relating to the
The
payments
It was the view of the United
States and Canadian delegations
competition,
modification
a
of
plan.
substantial
a
of
area
alization the United Kingdom
delegation outlined its proposals
a more
or liberalizing trade with counries with which it did not have
was
United States representatives
initial
an
bution raised problems of extreme
balance
Canadian
of tin and rubber in Canada.
as
complexity involving the protec¬
tion of legitimate interests of the
representa-
the
prepared to take
increase reserve stocks
to
connection
question of oil production and
refining and geographical distri¬
general liber-
and
rubber
to
Canadian
Government
this
1 step toward
IX
A
the
to
serve
for
and
advances
new
financial burdens, which willy; t
new
of
Keynesian
the
mo¬
economics
strong and the same ap¬
proach may be expected as in
previous
conferences, with
the
reestablish a sys¬
something
planning efforts will not
give, namely, permanent balanc¬
tem
capable of giving
which
ing
of
all
the
of
balances
pay^
ments."
("The Present Status of
The System of International Pay¬
ments," Revue d'Economie Poli¬
tique, Introductory report submit¬
ted to the
Congress of French
Language
Economists,
held on
Mav 30 arid 31, 1949.)
This is the most
promising
sug¬
gestion for monetary reform and
rehabilitation
economic
seen
since
the
I
monetary
have
confer¬
reports of the 1920s, the Gold
Delegation reports of 1930-32 and
of 1931.
*
ence
the Macmillan Report
The Third and last step
of
mone¬
tary and economic reconstruction
gold."
It concerns the development/of
should follow the "return of
improved, flexible and
adaptable
fiscal policies by
banking
and
Treasury
monetary
central
authorities
and
which
would
effec-
;
Volume
.^3$
Number 4838
170
tively reconcile
or
objectives of
high level of do¬
mestic
with
a
production
the
requirements
of
This
large order, but if it cannot
a
be
bal¬
a
anced international economy.
is
with
done
the
able
gold
would
the
of
framework
simple and understand¬
more
standard
to
seem
achieving
there
hope of
system
be
no
The World Bai ik and
income
and
lasting reconciliation
of monetary nationalism and in¬
ternational
cooperation on any
a
terms whatsoever.
(Continued from first page)
'
his
under
provide
leadership
a
firm foundation on which we can
future.
build the Bank's
the- opportunity
come
with you
to
I wel¬
work
•v"
in this task.
has been, I think,
period - of substantial progress
and accomplishment for the Bank.
Our activities are summarized m
The past year
a
some
length in the Fourth Annual
Report,
and
shall
I
to
Means of
and
touch
spots
to
briefly
not
repeat
But I do want
what is said there.
Point IV Program-
Sustaining
on
a
few high
of our recent operations,
suggest some possible im¬
plications for the Bank of broader
currents in the world economy.
Most of our loans during the
Prosperity: Snyder
(Continued from page 6)
European Recovery Task
past
we
immediate
concern
and
relationship
vital
with
have
members
our
helps to speed up the preparation
of development plans and the ex¬
ecution
of
projects
for
which
bank financing is appropriate.
12
-
'
•
•
now
with H. L. Emerson
Inc., Union
Bldg., members of the
Stock Exchange.
Mr.
recently with Bache &
Commerce
Cleveland
Jicha
Co.
was
veloped
They amount in the aggre¬
however, to only slightly
than the equivalent of $12
have greatly enlarged our
edge of their economic problems
mpre
and needs, their
sorb and service
million.
and
Bartle Day Opens
countries, .we. dom.
knowl¬ gate,
member
the
merits
capacity to ab¬
of
external
loans,
particular de¬
In my judgment,
it is extremely
receive
important that the Bank
greater help from its members in
this connection.
The strength of
securities business from offices at
velopment projects. A better un¬
derstanding now prevails, I think,
of the Bank's policies and meth¬
ods; and more and more govern¬
ments are
eliminating legal\ or
for¬
procedural obstacles to loans frbm
its
responsibilities
the
all
its
CSoecial
to
The
GRAND
Bartle
528V2
H.
Chronicle)
JUNCTION,
Day
Main
merly
Financial
with
COLO.—
engaging
is
Street.
He
was
Investment
in
a
Service
Corp. of Denver.
With Merrill Lynch Firm
(Special
to The Financial
Chronicle)
JACKSONVILLE, FLA.
—
Mrs.
Bank
by
taking
appropriate
its
surveys
and discussions with
member governments, we are
able
to
assist
the
less
bet¬
devel¬
ter
ciated with Merrill Lynch. Pierce,
oped countries in diagnosing and
solving their own problems. Giv¬
&
Beane,
syth Street.
116 West For¬
ing advice
is not, of course, our
is
that
its
basic
with
best
that
no
market
inter¬
institution.
and
purposes
are
the
shared by
We who
Bank
and
concepts; appreciate,
that
of
international
the
character of the
is
is /an
nations.
member
familiar
course,
it
cooperative
ownership,
Its
guarantee such loans.
our
Bank
national
are
Janice H. Wolfe has become asso¬
Fenner
the
action to enable them to incur or
Perhaps most important, through
European
recovery
efforts.
in
,
Co.,
the
an
-
&
is affected by the out¬
of
come
The first objectives of the Eu¬
obligations. This real but subtle
point unfortunately tends to be ropean Recovery Program — to
trying to promote conditions fa¬ overlooked by the world at large expand
production and restore
vorable to the success of our loans and there is an increasing dis¬ financial stability in the partici¬
and to the increase of productive position
to cite the Bank's re¬ pating
countries — have
been
investment from other sources. I liance on dollars for lending pur¬ achieved to an impressive extent.
believe that one of the most con¬ poses as evidence that it has only But we must face the fact thak
structive
limited international participation. though prewar levels of output
contributions
we
can
make to the progress of develop¬
My experience has been that have been reached and surpassed
ment, especially in the least ad¬ the most effective answer to these and though the menace of infla¬
vanced countries, is to help make criticisms is to show that the Bank
tion has
been
curbed,, progress
available to them the experience is
making use of other resources along these lines alone is no
of other nations.
Moreover, the besides dollars and in particular longer enough.
It has become
resulting .close and
continuous of the 18% currencies of mem¬ plain, I think, that the time has
primary function. But
The initial
cultivation of the
months have been for
by making a special effort to pro¬ projects designed to increase the seeds of development has, there¬
vide certain inducements for our output of useful goods and serv¬ fore, been a somewhat longer task
investors
to
send
their
capital ices in less developed countries. than at first we had hoped. I am
abroad. We can help also by sup¬ These development loans make up confident, however, that we may
plementing .these efforts through a considerable total and, as is look forward to an abundant
the issuance of guaranties with re¬ indicated
in
the annual report
harvest.
■ The
first
fruits—the
spect to private American invest¬ negotiations for the financing of loans granted
during the
past
ments abroad.
'
f
a
number
of
other,
development
i
year—are to me the source of con¬
The legislation which we now projects are well advanced; But siderable satisfaction.
have
before.
Congress
would I must say frankly that the vol¬
It is also a source of satisfac¬
authorize the Export-Import Bank ume of development loans granted
tion that the Bank has been able
to guaranty United States private to date has not come up to our
during the past year to make its
.capital invested abroad against earlier expectations.
first loan to one pf its members
the risks peculiar to foreign in¬
This gap between hopes and in Eastern Europe. The difficul¬
vestment.
It is important to note
performance is partly the result ties and: uncertainties cited in the
here that the ordinary business of
over-optimism about the length Third Annual Report still exist,
risks are not to be covered by this of time
it would take to get the and have hampered further loans
guaranty. The risks peculiar to Bank fully organized—to bring by the Bank in this region. But
foreign investment might, how¬ together a competent staff, to de¬ these difficulties have been less¬
ever, include: (1) the inability to
fine our policies and procedures ened somewhat by economic de¬
convert earnings in foreign coun¬
and make them clear to our mem¬ velopments—notably the increas¬
tries, or other amounts received ber countries, and to gather the ing availability of manufactured
in connection with the foreign in¬
economic and technical data nec¬ goods in Western Europe urgently
vestment, into United States dol¬ essary for sound decisions.
The needed by Eastern Europe and the
lars; (2) the expropriation of the acceleration of our activity during similar
availability of essential
investors' property by a foreign the
past year shows, I think, that materials in Eastern Europe which
government without prompt and this preliminary phase is largely are
required
by
the
Western
adequate compensation; and (3) behind us.
countries.
If these trends con¬
physical destruction of property
More important at present are tinue and political tensions are
incident to international war.
the difficulties which are more or relaxed, the possibilities for con¬
Fortunately, investors have less universal in underdeveloped structive assistance by the Bank
-come to realize that foreign coun¬
countries—the lack of economic to its Eastern European members
tries want development, not ex¬
data, of experienced personnel, of Should expand considerably.
ploitation.
Foreign countries do well-organized projects, of local
I am also happ.y to report that
not like to see their resources ex¬
capital, and all the other defi¬ during the past month we have
ploited with no return to them ciencies that are both the cause been able to conclude our first
other than perhaps a subsistence
and
the consequence of under¬ loan to one of our Asian member
wage for the workers employed.
development.
It is no accident states, and I feel confident that
As the President has stated, "The
that the development loans we this financing will be followed by
old imperialism—exploitation for
have made
thus far have been other transactions by the Bank
.profit—has no place in our plans. mainly to countries where con¬ in that
great region of the world.
What we envisage is a program
siderable economic and technical In the Middle East we have not
of development based on the con¬
advance has already taken place, yet consummated any loan, but,
cepts of democratic fair dealing." and to enterprises with a substan¬ as the annual
report shows, we
The Point IV Program is one
tial record of experience behind have been examining a number of
of boldness, imagination and ini¬ them. The
greater the progress a projects in various Middle Eastern
tiative. That spirit is the key to
country has already made in de¬ countries, some of which I hope
.growth and development in the velopment the easier it is for it will qualify for Bank financing
affairs of this increasingly com¬
to progress further; and by the in the relatively near future.
plex world.
It signifies an ex¬ same token it is almost always
ploratory arid a venturous attitude easier to expand a going concern Efforts to Broaden International
which is traditional in this coun¬ than to start a new one from
Character of Bank
try; one that has been nowhere scratch.
On the other side of the balance
better expressed than in the States
Yet the essence of successful sheet for the
year, I am sorry to
of Michigan and Wisconsin.
economic development, and there¬
say that we have not succeeded
The fruits of our national effore the essential task of the Bank, to the extent we had hoped in
i forts have proved that far greater
is precisely to bring new enter¬ broadening the international char¬
achievements
may
be
obtained
prises into being and new tech¬ acter of the financial resources at
-through combined endeavor. We
niques into effective use in eco¬
|he disposal of the Bank. I refer
are hopeful that the sincere de¬
nomically retarded areas—and the in particular to our efforts to ob¬
sire for international cooperation
more
retarded the country the tain additional consents to the use
'which this country has evidenced
more urgent and
challenging is in our lending operations of the
may serve as an inspiration to all
our task.
18% local currency part of the
the peoples of the human com¬
I believe we have made good Bank's capital.
Apart from the
munity.
progress in overcoming some of United States, which has made the
the special difficulties of economic full amount of its 18% currency
With H. L. Emerson Co.
some
releases
have
development which are analyzed available,
Special to The Financial Chronicle)
in
the
annual report. Through been made b,y Belgium, Canada,
CLEVELAND, OHIO —Oldrich missions to most of our less de¬ Denmark and the United King¬
Jicha is
loans
our
harmonize the
Bank's
resources
now
United
must
their
18%
matter
the
member
in
Bank
funda¬
present
patterns of trade and production.
And if these necessary readjust¬
substantial
.of
amount
.capital
making
mental
the
potential source of lending
capital for the Bank for some
time to come, I still believe that
it is possible for a number of
other
member
.governments
to
a
for
the
chief
make
arrived
that
remain
reality
the
States
subscription
available for lending.
I do
not
make this plea for
larger
releases
from
the
18%
subscriptions merely to under¬
line the word international in
ments
readjustments
to be made
are
in
successfully,
they must include complementary
action by both the European coun¬
tries and the United States.
I So far as concerns the European
countries, the most urgent re¬
quirement is obviously to sell
more
of their production abroad,
and
particularly in dollar mar¬
kets.
In order to accomplish this,
things are necessary—but to
mind the most important are
these currencies.
So long as in¬ to reduce export costs and to make
convertibility
continues
many exports to the dollar area at least
title.
We have
countries
will
indebtedness
definite
a
be
in
able
other
•
our
for
use
to
repay
currencies
many
my
attractive
as
ducers
mestic market
service dollar loans.
areas.
It is true that most of the
tries
from
consent
which
to
use
scriptions
have
we
would
like
18%
sub¬
pressing
ment needs at home and
ally
importers
of them
net
But
many
substantial
sums
not think I
invest¬
are
actu¬
capital.
still invest
of
abroad.
do
I
pro¬
in the
either
do¬
in other foreign
or
ji
'v
;
Lines of Action
coun¬
their
individual
to
sales
as
although they may.not be able to
In my judgment there are sev¬
eral lines of action which must be
followed
these
which
with at
this
before
elaborate
and
achieve
to
objec¬
The first, which I need not
tives.
is
some
audience,
appropriately dealt
length in the annual
asking too much if
report of the International Mone¬
I call on these countries to make
part of their foreign investment
tary Fund, is the establishment of
a system of exchange rates which
through the medium of the Bank.
will assist the dollar-deficit coun¬
a
There
am
is
{another method by
which many of our member coun¬
tries
add to the international
can
character of the Bank's
resources
and that is to increase the eligi¬
bility
investment
of
the
Through legisla¬
administrative action jn a
for
bonds.
Bank's
tive
or
numbdr of countries, a substantial
contribution can be made by our
members
to
creation
the
broader market
I
for
of
those
a
bonds.
tries
effectively in
will furnish an
incentive to exporters to ^increase
ter
I
and
with
propose
in
discuss
to
detail
later stage of the meeting.
you
at
more
to
now
their-sales in the dollar
will
nevertheless
which
the
concern
Bank
and
I
a
speak¬
recovery.
was
in
foreshadowed
the
Bank's annual report a year ago,
problems of development have in¬
creasingly occupied our attention.
Since the last Governors' meeting
have
we
made
.only, two
small
loans to Western European coun¬
tries.
Necessarily, the principal
assisting European recon¬
struction is being played by ECA.
role
in
The
ations of the Bank because of the
factor
in
trade.
Unless the European econ¬
be
international
reestablished
on
a
stable basis the economic position
of almost
those
every
in the
insecure.
In
country,
even
of
dollar area, will be
passing
upon
;
1
approach
the domestic
loan
In
be
by pro¬
countries Jhe
borne
most
of
productivity has already
substantially since the war,
but thev still lag far behind the
United States and Canada.
level
risen
It has been pretty
well demon¬
think, that productive
efficiency cannot be brought about
merely through governmental
edict or exhortation. To make the
most effective use of existing pro¬
strated,
I
ductive
facilities, real
incentives
required, and «perhaps most
important, the pressure of compe¬
tition.
To my mind, one of the
most essential steps toward solu¬
are
tion of
clearing
of
ness
is for
to
wilder-'
the dollar problem
countries
dollar-deficit
away
the
arrangements,
bilateral
special currency controls, quotas
similar restrictions, both in¬
and external, which have
grown
can
.
of
reduce
must
functioning of the world economy.
European
purchases
and
sales
decisive
to
ducers.
and
omies
the
cipally government expenditures,
which
pivotal part played by the great
trading nations of Europe in the
balancing
or
of
the
a
;
line
second
be
costs
Nonetheless, European recovery
start
is of vital importance to the oper¬
abroad have long been
avoided.
be
can
ing of the problem of European
As
complexities
mate either the
far-reaching consequences of such
action, but I fail to see how it
production, both by in¬
creasing the efficiency of manage¬
ment and labor and by limiting
the burden of indirect costs, prin¬
profoundly
is of vital
am
and
must
to all the countries repre¬
sented at this table.
area
importers to buy,
to' the extent possible, in coun¬
tries whose currencies they can
best afford.
I do not underesti¬
encourage
a
matter much wider in scope than
the Bank's own operations,
but
affects
compete
markets,
it
Problem of European Recovery
I should like to turn
to
world
attach importance to this mat¬
ternal
to
up over the past 20 years
protect .inefficient production
practices. I don't sug¬
and trade
that
gest
tin's
can
overnight.
done
or
The
should be
important
thing is to begin now to move—
and to move rapidly—toward &
freer, more competitive
of
exchange
goods.
The problem of reducing the
applications, whether from coun¬
tries in Latin America, Asia, the burden of governmental costs on
Middle
East,
or
elsewhere, we production is a difficult one, par^
always come face to face with the ticularly susceptible to contror
necessity
for appraising whether
by the fact the customary trade of these coun¬
with
Europe
can
be re¬
which capital tries
may
borrow, established on a satisfactory basis.
demonstrated
country pledges its
credit that the Bank will meet its
each
bers other than the United States.
Accepting
exaggeration
It
is,
to
state that the soundness of
therefore,
no
all
and misunderstanding.
versy
Since
governments
themselves to
World War II many
committed
have
extensive programs
fare.
No ,vone can
,
,
of social wel¬
dispute their
(Continued on page 40)
40
COMMERCIAL
THE
(1072)
The World Bank and European
(Continued from page 39)
Tight to follow this
have
the
however,
it
now
afford ambitious
•
costs, it is important
that the European countries un¬
dertake
vigorous,
concentrated
to broaden their market
the United States and Canada.
What is required, I believe, is not
only the offer of a greater variety
of
goods adapted to American
attack
on
American
cerned
priced attractively, but
wider
a
and
the
tion
forceful
more
attention, of
the
If the European countries take
energetic action along these lines
ahead, they should
continued
make
ECA aid
additional
able
be
significant
towards true recovery. I
regard the continuance of ECA
aid essential, but I believe it im¬
progress
portant that the aid should be so
as to give the participat¬
ing countries the greatest possible
allocated
incentive
the
to
pursue
of action.
course
this
new
However useful
present method of ERP pro¬
gramming
has
been
to
I
date,
effective
take
would
reduce
the
the
dollar
ac¬
gap.
has
incentive
a
one since
the greater
negative
greater the
claim for
gap,
•
Admiral Corp., Chicago
(letter
9
1,800
shares
($1 par)
capital stock, to be sold by* Ross D. Siragusa of Barrington, 111., at market (about $19 a share). No underwriter.
•
6
bonds.
Airlines, Juneau, Alaska
(letter of notification) $288,000 first mortgage
Price, par. No underwriter. To pay loans, erect
building, provide working capital.
Office, P.
O.
Box
2808, Juneau, Alaska.
•
Ambassador Mines
Aug.,30
Corp., Spokane, Wash.
(letter of notification) 90,000 shares (100 par)
stock.
No underwriter.
To buy and rent ma¬
chinery and operate mine at Trout Creek, Mont. Office,
416 Empire State
Building, Spokane, Wash.common
•
American Gas &
Sept.
7 filed
Offering—To
Electric Co.
shares
498,081
be
offered
($10
for
stockholders of record Oct. 7
(10/24)
par)
basis of
one
by
stock.
present
new
share
for each nine shares held.
Any unpurchased shares will
be allotted among other stockholders desiring to acquire
more than their
original allotment.
The offer expires
Oct. 24.
Underwriters—Underwriters will be invited to.
bid for any shares not taken by stockholders. Probable
bidders: Union Securities Corp.; The First Boston
Corp.;
Dillon, Read & Co. Inc.; Blyth & Co., Inc. and Goldman,
Sachs & Co. (jointly); Morgan Stanley & Co.
Proceeds
«—For general funds, to be invested in
subsidiary oper¬
ating companies, including Appalachian Electric Co.
American
Sept.
8
General
Corp.,
of
New York
filed
111,153 shares of $2 dividend series of
cumulative convertible preferred stock
<$1 par) and
206,422 shares (10c par) common stock."
Offering—All
of the $2 preferred and
170,500 shares of common are
owned by Equity Corp. and will be offered in
exchange
for shares of $3 convertible
preferred stock and 20-cent
pating
clearly
United
from the
exchanges assisting stockholders in tendering
exchange.
their securities for
lars
may
be
put
will
dollars
so
cease
that
such
United
be
"soft
the most
Now
to
barriers
of
othetf
restrictions
the
of goods.
shortage was
tariffs
States
people
In
so
some
acute
cases
as
to
to
in
ADDITIONS
important
Registration
SINCE
PREVIOUS
ISSUE
Tolima; $5,190,600 by the Department of
$1,491,600 by the Department of Santander; $1,260,600 by the Municipality of Cali, and $5,505,600 by the Municipality of Medellin. They will be
issued in amounts equal to 120% of the principal amount
of the bonds to be surrendered (in settlement of unpaid
principal and interest) with cash adjustments to be
made instead of issuing fractional bonds. The Schroder
Trust Co. of New York has been named as the New
Power &
of
partment
Valle del Cauca;
York
guarantee of the Republic.
corporate purposes.
Gold
Fur
Health
and
No
underwriter.
For
construction
taining building at White Lake, N. Y.
Avenue, New York, N. Y.
Welfare
•
Biddeford
Sept.
ber
No
of
&
shares
of
underwriter.
water
Saco
Water
(letter of notification)
1
Co.,
an
and
main¬
Biddeford,
Aug. 30
num¬
stock, of which 200,000 will be sold for com¬
and 50,000 shares for N. O. Yeakley, a controlling
stockholder, at $1 each. Underwriter—W. C. Hitchman
Co., New York. To lease properties, drill wells, and for
working capital.
Mining Co., Tonopah, Nev.
(letter of notification) 1,500,000 shares (50
par) common stock. Price—200 per share. Underwriter
-Batkin & Co., New York.
To repair and renovate mine
of company and to exercise option to purchase processing
adll and move and erect such mill on the company's
property and for working capital.
cents
•
Community Loan Co., Pontiac, Mich.
(letter of notification) 3,500 shares of common
Price—$10 each.
No underwriter.
For working
capital.
Sept. 6
stock.
Consolidated Caribou
March
common
be
Price—800,000 shares to be offered publicly at 80
per share; the remainder are registered as "bonus
Underwriter—Israel and Co., New York, N.
Proceeds—To develop mineral resources.
30
filed
376,250
Price—$2.50 per share.
Ltd., Vancouver, B. C.
value
Alamosa, Colo. (10/3)'
(letter of notification) 250,000 shares ($1 par)
pany
1948
par
N. C. Proceeds—For construction.
sold
ment.
York.
Y.
to
the
..
Pittsburgh
San Francisco
all.offices'
Chicago
Cleveland
*-■
follows:
$14,833,920* by the Department of~Antioquia;
$5s,5$4,40Q/:by -the Department ; of • Caldas;. $5,928,000 by
the Department of. Cundinamarca; $1)080,000 by the* De¬
underwriter
Proceeds—To
porarily postponed.
1
BROKERS
DEALERS
UNDERWRITERS
t'
-r-V
Silver Mines, Inc.
if-..
shares (no par) common stock.
An additional 50,000 shares will
$1
at
Underwriter—William
Colombia
(Republic otL
Aug. 15 filed $40,824,720 30-yeak3% sinking fund bonds,
dated July 1, 1948 and due July 1, 1978, to be issued as
Bondholders' Protective Council,
common
system.
no
Foreign
Colorado Oil & Gas Co.,
Me.
Bradshaw
Aug. 29 filed 1,000,000 shares of
with
Underwriters—None.
Inc.
($100 par) capital stock. Price, par.
For extensions and improvements to
Canam Mining Corp.,
affected follow: Antioquia 7s, July 1,
Jan.
tiations
Office, 251 Fourth
undetermined
bonds which will bear the
The outstanding bonds (with
1945; Antioquia 7s, due Oct. 1, 1957; Caldas 7V2S,
1, 1946; Cundinamarca 6v2s, due Nov. 1, 1959;
Santander 7s, due Oct. 1, 1948; Tolima 7s, due Nov. 1,
1947; Valle del Cauca 7V2s, due Oct. 1, 1946; Valle del
Cauca 7s, due June 1, 1948; Cali 7s, due May 1, 1947;
Medellin 7s, due Dec. 1, 1951; and Medellin 6v2s, due
Dec. 1, 1954.
Sinking funds are to be created for each
issue of new bonds. The offer is made following nego¬
Fund, New York
Sept. 1 (letter of notification) $100,000 debentures.
To
be sold at par to fur and leather workers and their
unions.
new
due
due
Office, 2153 W. Fullerton Avenue,
Workers'
the
unpaid coupons)
Chicago.
Ben
for
agent
Carolina Power & Light Co.
(9/20)
A.ug. 23 filed 30,000 shares of $5 preferred stock (no
par value) and 200,000 shares of common stock (no par
value). Offering —w Terms ,to be filed by amendment.
Underwriters—Merrill Lynch, Pierce. Fenner & Beane,
of New York, and R. S. Dickson & Co., Inc., Charlotte,
tariff
number
extraordinary
lengths to obtain the goods they
and other purposes.
Private Wires,to
a
classes
drive
Carnegie Mines Ltd., Montreal, Canada
April 27 filed 500,000 shares of common. Price—60 cents
per share. Underwriters — Name by amendment. Pro¬
ceeds — For working capital, exploration, development
* -
also
could more economically be im¬
ported, and certainly all attempts
to use the aid programs as a ve¬
perity.
to which ECA dol¬
use
Autogas Co., Chicago, III.
Sept. 2 (letter of notification) 4,290 shares of common
stock. Price—$12.40 each.
No underwriter. For general
shares."
-Philadelphia
of
•
securities
t
types
pected about Oct. 11.
stock.
i
in
States
of its policies
some
deficit grows larger; and second,- health of the world economy and
that all restrictions be removed to maintain America's own pros¬
Co.; Lehman Brothers and \Stone & Webstejt
Corp. (jointly); Equitable Securities Corp.
and Central Republic Co.
(jointly); Union Securities
Corp. and Central Republic Co. (jointly) \Proqeeds—
For construction and general corporate purposes.
Ex¬
—
Boston
are
to
be
country
&
preferred
of
Equity.
Underwriters
None
named, but a flat fee will be paid NASD members and
dividend
New York
there
-
-
acdition
to
the
years,
Securities
Oct. 8,
Expected about Oct. 6.
•
attitude
recent
Light Co. (10/11)
Sept. 8 filed $8,700,000 first mortgage bonds, due 1979.
Underwriter—Competitive bidding.
Probable bidders:
Halsey Stuart & Co. Inc.; The First Boston Corp.; White,7
•
common
subscription
on
should like
share of ECA aid to each
Arkansas
Weld
Alaska Coastal
Sept.
complex customs procedures and
regulations.
designed to
emphasize one protect American
ry
out-the necessary readjust¬
companies
further
point.
Action
by
the against foreign competition which
ments. I am nevertheless troubled
dollar-deficit
countries,
however
are
about the situation because I be¬
hardly consistent with the
lieve that the
basic difficulties soundly conceived and vigorously expressed policy and
long-rang0
executed,
will
not
suffice
to
solve
interests of the United States,
may not be as readily suspectible
m
of
solution
if
dealt
with
only the dollar problem " unless the my judgment, it does not make
States
takes
within the terms of the powers United
comple¬ good sense for America to en*
now available to ECA.
mentary measures. For despite a courage the production of goods
Specifically, I suggest that care¬ fhther remarkable shift in the for the domestic market which
INDICATES
•
notification)
of
for
necessary
recovery.
Measures
I
Securities
Sept.
measures
provide
wanted.
It is
astonishing how
case in point.
overall
level
has
been quickly
aid, while the dollars" and each country will Their
some
of these
"acute"1
smaller the deficit, the less assist¬ have the opportunity to make the greatly reduced since the early shortages disappeared when there
ance was likely to be anticipated.
most, economic use of the aid pro¬ thirties,
but
at certain
crucial was a moderately increased flow
To suggest- that
points they remain a barrier to to the market.
Furthermore, so long as ECA dol¬ vided.
lars cannot be saved,
If this approach should prove the
but only
import
of
foreign
goods. the dollar shortage can be com¬
used for current imports, the ERP
producers
in
other pared with that of butter would
feasible, it may have most salu¬ Moreover,
countries have difficulty in build¬
countries fear, with some justifi¬ be wishful thinking, but I do be-'
tary effects. Each country would
ing up adequate foreign exchange
cation, that if they should succeed lieve the world is somewhat in
know how much dollar
aid
it
reserves
without which they can¬
in establishing a market for their the grip of a "shortage" psychosis.
not
relax
their trade
and
cur¬
could count on and, knowing that goods in the United States, their If only—and it is no small "if"—
no
further aid could be antici¬ efforts would be negated by new if only we can start on the way
rency controls or face with con¬
towards equilibrium, we may find
fidence the difficult years after pated, would
be encouraged to or higher protective tariffs. Even
the effects of returning confidence
1952.
where
husband it carefully.
the
level
of
duties
does not
Responsi¬
highly cumulative and our diffi¬
I know that ECA is fully con¬ bility would be squarely placed exclude foreign goods, they are
culties dispelled
more quickly
scious of this problem and is doing upon the participating nations to frequently kept out
a
by unduly than we dared hope.
ECA Allocations
with
to
tended to be
the
to
the present time assist¬
Nevertheless,
the
consuming public.
in the months
to
from ECA has been allocated
ance
in
tastes and
related to the perform¬
the participating coun¬
own
partici¬ are still basically inconsistent with
its position as the great creditor hicle for
defined
as
dumping surplus goods
Modifica¬ abroad should be
as
possible for the re¬ nation of the world.
strongly resisted.
primarily on the basis of the an¬
tions
of
these
mainder of the Recovery Program,
policies, like those
ticipated dollar deficit of the re¬
An Optimistic Note
that
are
and each country be given assur¬
necessary in Europe, may
spective countries — the
largest
I would like to close on a note
shares going to those having the ance that its share will not be injure particular groups or inter¬
ests
within
this country, but in of guarded optimism.
When ra¬
biggest deficits. It is true that, in reduced if it earnings or saves
estimating the deficits, it has been more dollars than had been ex¬ my judgment such modifications tioning stopped after the war,
are
essential
both
to
restore
the
tl\ere was a shortage of many
assumed that the countries con¬ pected, nor increased if its dollar
Up
In addition to the necessary re¬
also
of
the
their
U. S. Must Take Complementary
tries, acting both individually and
collectively through the OEEC, in
effectively using the aid and rea¬
lizing the objectives of the Re¬ ful thought be given to the fol¬
lowing approach: First, that the
covery Program.
productive investments
designed to make possible a bet¬
ter standard of living in the fu¬
an
of
ance
back their
measures
by
allocation
that
aid
directly
of social services without
either reducing their living stand¬
ards in other respects or cutting
duction
announcement
the
during the second half
of the current fiscal year will be
ECA
programs
ture.
the participating countries to car¬
Hoffman
take
Thursday, September 15, 1949
In
I therefore
Mr.
become apparent that many coun¬
tries cannot
Recovery Task
all within its power to encourage
welcome
it.
has
CHRONICLE
think the time has come when it,
too, calls for review.
if they
undertake
to
means
Unfortunately,
course,
FINANCIAL
&
'
'I-
'
per
L.
share for invest¬
Burton
& Co.,
New
develop mining properties.
Tem¬
;
r
Volume
Number 4838
170
THE
;
COMMERCIAL
shares
plus
Offering
NEW ISSUE CALENDAR
September
unsubscribed
FINANCIAL
shares
of
the
CHRONICLE
new
Maumee
common.
Common
Common
.
September 20,
1949
Carolina Power & Light Co.____Preferred & Com.
West Penn Electric Co., noon (EDT)
__Bonds
West Penn Electric Co
—Common
Wisconsin Public Service Co.
y
10:30
a.m.
(CDT)_
.—Bonds
ital.
•
a
May
September 21,
1949
business.
Liberty Loan Corp
Preferred
New York Central RR
.—Equip. Trust Ctfs.
September 26,
Gas
Service
1949
Bonds
stockholders at l-for-9 rate.
1949
Colorado Oil & Gas Co
Common
Palestine Cotton Mills, Ltd
Common
October
10, 1949
Pittsburgh,
11, 1949
Bonds
Erie RR.
.Equip. Trust Ctfs.
American Gas &
Convertible Television, Inc., N. Y. C.
share.
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.
Dee
Cee
Corp.,
3130 Wisconsin
Ave.,
N.
W.,
Washington, D. C.'!
Sept. 8 (letter of notification) 61,500 shares ($1 par)
capital stock.
No. underwriter.
To finance oil leases
and for working capital.
I
'
.
.
Douglas Oil Co. of California
Aug. 12 (letter of notification) 10,000 shares of
stock.
Price—At market
(about $3.30
per
Pro¬
Underwriter—Shear son, Hammill &
Angeles.
>
Emerson
Radio
&
it
Co., Los
assessable
Phonograph Corp.
will not be sold below the market price on the New York
Stock Exchange at the time of the offering. Proceeds—
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
140,696 shares of non¬
stock (100 par). To be offered in
three shares each for $1 a unit.
No
underwriter.
For
exploration, development and pro¬
Office, 4109 Arcade Building, Seattle*
•
Idaho
Maryland
Fareway Stores, Inc., Ames, Iowa
Sept. 9 (letter of notification) 8,000 shares
(no
par)
stock, 1,250 shares of preferred stock and 1,250
common
shares of
participating preferred.
Common will be sold
at $6 per share and both preferreds at $100 each.
No
underwriter. To expand operations and open new stores.
First
Investors
San
Francisco,
|
stock.
Price—$25 each.
Underwriter—Atwill
To complete formation of a stock
& Co., Miami Beach.
insurance company.
Sept. 7 filed $6,300,000 of securities of three different
Underwriter—Wellington Fund, Inc.
Gas Service
Co., Kansas City, Mo.
(9/26)
Aug. 12 filed $18,000,000 25-year first mortgage bonds
xlue 1974.
Underwriters—Competitive bidding.
Prob¬
able bidders: Halsey, Stuart & Co.
Inc.; Union Securities
'Corp. and Harriman Ripley & Co. (jointly); Merrill
Xynch, 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
he used to repay $13,800,000 of 2%% to 3%
notes, due
T950-56, and $1,000,000 of 2% notes due 1950, and the
balance for the company's construction program.
Ex¬
pected about Sept. 26.
Office, 139 N. E. 1st Street, Miami,
•
General
8
•owned
Under¬
writer—Greenfield, Lax & Co., Inc., New York. Price—
$1 per share. Proceeds — To purchase additional plant
facilities, tools, dies, jigs, etc.; the balance for working
capital.
Lapaco Chemicals, Inc., Lansing, Mich.
Sept. 9 (letter of notification) $100,000 convertible fiveyear term notes. Convertible into $1 par value class A
stock.
No underwriter.
For capital equipment, debts
and working capital.
Office, 1800 Glenrose Avenue,
Lansing, Mich. .
''
New
June
Lexa Oil Corp., Denver, Colo. (9/19-23)
Aug. 19 (letter of notification) 1,200,000 shares (par onecent). Price—25 cents per share. Underwriter—Tellier
185,210
American
Corp., New York
shares ($10 par) capital stock,
General Corp.
Offering—These
by
•shares, together with 35,922 common shares of American
Ceneral Corp.,: will be offered to holders of $3 divi¬
dend
series, $2.50 dividend series and $2 dividend series
General, on an
•exchange basis. Underwriter—None named, but a flat
Jee will be paid NASD members and
securities ex¬
changes assisting stockholders who tender their shares
Tor exchange.
Co., New York, N. Y.
for working capital.
Liberty Loan Corp.
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,
smd may include John J. Bergen
& Co.
Underwriters will buy
& Co. and A. M. Kidder
the remaining 135,000
(9/21)
Aug. 31
filed 100,000 shares of cumulative convertible
preferred stock. Price—At not more than $15 per share.
Underwriter—Riter & Co., New York/Price—By amend¬
Proceeds—For general funds and working
ment.
as
as
Lone
reduction of
outstanding bank loans.
Star
Brewing Co., San Antonio, Texas
213,000 shares ($1 par) common stock
owned by the George Muehlebach Brewing Co. of Kan¬
sas City, Mo.
Offering—Of the total, 45,000 shares will
Sept.
2
filed
share and
the remainder will
be
Star at $9.66%
offered publicly at
($100 par) cumulative pre¬
Underwriters—Names to be determined
payment of the cost of, or in reimbursement of
payments
for, construction of additions and betterments sub¬
sequent to April 30, 1949.
year.
Sale deferred until later this
T;.
New York & Cuba Mail
Steamship, New York
June 17 filed 190,125 shares of 5.6% cumulative
preferred
($25 par)
stock, which Atlantic Gulf
and
West
Indies
Steamship
Lines is offering in exchange for its own
(5% non-cumulative $100 par) at the rate of
one Atlantic share for three
shares of Cuba Mail pre¬
ferred plus $25 in cash. No
underwriting.
preferred
New York Telecoin
Corp., N. Y. City
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.
•
Proceeds—To
be added to
working capital.
Street, New York, N. Y.
East 44th
Office—12
Pacific Telephone &
Telegraph Co."
Sept. 2 filed 828,920 shares ($100 par) common stock*
Underwriter—None/ Offering—To be offered to holders
of
preferred and
common shares of record
Sept. 23 at
Rights expire Oct. 17.
Proceeds—To be used to
indebtedness incurred by the company's construction,
par.
yvy:>; /J//y
Palestine Cotton Mills,
June 29 filed 300,000
dian
Securities
$20
per
(letter of notification)
stock.
share
held.
now
No
one
weaving facilities.
Broadcasting
Salisbury, Md,
common
'//■•
value. Underwriter—The First Guar¬
Corp., New York.
Price—$4.25 > each*.
Peninsula
7
(10/3-7)
(common) shares,
par
Proceeds—To expand
Sept.
:
Ltd.
ordinary
(Israeli) pound
To
on
be
the
offered
basis
underwriter.
of
To
Co.,
2,500
Radio
shares
($10 pari
stockholders at
present
share
one
Park,
for
each
four
acquire Station WCMI>
Cambridge, Md.
•
Pioneer
Enterprises, Inc., Bluefield, W. Va.
(letter of notification) 1,342 shares of commoa
($100 par), of which 1,297 shares are to be offered
by the company and 45 shares by Alexander D.
Camp¬
bell, President. Price, par. For working capital.
Office^
Sept. 2
stock
316 Law and Commerce
Power
Building, Bluefield, W. Va.
Petroleum
Ltd., Toronto Canada
April 25 filed 1,150,000 shares ($1 par) common of whicl*
1,000,000 on behalf of company and 150,000 by New Yorlc
Co., Ltd.
Price—50 cents per share.
Underwriters—
S. G. Cranwell & Co., New York. Proceeds—For admin¬
istration
expenses
and drilling.
Statement
effective
June 27.
'-.■"■■■'j'-y
•
Preferred Life Assurance
■■
Society, Montgomery,
Alabama
Sept. 9 (letter of notification) 20,000 shares of common,
stock.
Price—$12.50 each. No underwriter. To provide
surplus for operating business.
Office, 221 S. Court St.r
Montgomery, Ala.
Renaissance Films Distribution,
Montreal, Que.
be sold to officers and directors of Lone
a
20,000 shares
stock.
made
capital,
well
convertible preferred stock of American
Gulf
Proceeds—For drilling wells
and
Reinsurance
filed
Underwriter—None.
one
an
through competitive kidding. Probable bidders:
Kidder,.
Peabody & Co.; Smith, Barney & Co.; W. C. Langley &
Co.; Lehman Brothers. Proceeds—Will be applied to the
in
•
Lawyers Title Insurance Corp., Richmond, Va.
Sept. 9 filed 55,000 shares ($10 par) common stock.
Offering—To be offered at $10 each to holders of 110,000
&
,
Jersey Power & Light Co.
filed
9
ferred
-
common stock shares.
Proceeds—To increase capital.
Association,
ceeds—To pay $1,125,000 of short-term notes and make
additional common stock investments in subsidiaries.
program.
Keller Motors Corp., Huntsville, Ala.
May 10 filed 5,000,000 shares (30 par) common.
outstanding
& Electric
Townsend, Dabney & Tyson; A. C. AUyn & Co., Inc.;
Draper, Sears & Co.; F. S. Moseley & Co.} Fytnam &
Co.; Smith, Ramsey & Co.; G. H. Walker & Co.' Pfd**
•
Corp., New York
-series.
:
Corp.,
•
Insurance Co., of Florida, Miami, Fla.
Sept. 7 (letter of notification) 12,000 shares ($10 par)
common
common,
new share for each 10
held, with
oversubscription privilege on a sharefqr-share basis. Offering price to be filed by amendment*
Underwrite!* — A dealer-managers'
group
headed
by
pay
<9
Sept.
Mines
Calif.
Sept. 2 (letter of notification) 10,000 shares of common
stock.
Price—$2 each.
To be sold by Errol MacBoyle.
Underwriter—E. F. Hutton & Co., San Francisco.
stock.
*9
Mines, Inc., Seattle, Wash.
Wash.
•offering have not yet been determined, but the stock
are
Underwriter—
common
46,898 units of
June 7 filed 235,000 shares of capital stock. Underwriter
—F. Eberstadt & Co., Inc. The terms and price of the
The shares to be sold
stock.
(letter of notification)
duction of mines.
r
\
'
>
Idaho Consolidated
shares of
Cambridge, Mass.
7
holders allowed
shares of Mokan class B
3,059
market
holders at rate of
Pipe Line Co.'s common and class B capital stock, at
the rate of four shares of Panhandle common and two
of Hugoton common for nine shares of Mokan common
Aug. 30
at
New England Gas
stock (paf
stock.
Offering—To be offered along with Panhandle Eastern
Pipe Line Co. common in exchange for Missouri-Kansas
None.
Price
,
Inc.,
common
Hugoton Production Co., Kansas City
Sept. 8 filed 130,698 shares ($1 par) common
9
common
share).
ceeds—To Woodrow G. Krieger, President (selling stock¬
holder).
Enterprises,
No underwriter.
180
Cement Co.
delphia; Warren W. York & Co., Allentown, and H. B.
Robeson, Nazareth.
To negotiate for sale of this stock
to employees of the company.
Pa.
9
or
(Pa.)
Aug. 10 filed 124,601 common shares of beneficial inter¬
est
($8 par). Offering—To be offered present stock¬
Hollywood Broadcasting Co., Miami Beach, Fla.
Sept. 9 (letter of notification) 6,762 shares of common
stock of which 762 shares offered
by company and 6,000
shares by Jonas and Lenore Weiland.
Price—$10 ! per
(9/19-20)
operating capital and to
the Montana Bank & Trust
(about $12) to be sold by the
Alden M. Young Co., Pine Orchard,
Conn.; Day Stoddard
& Williams, New Haven,
Conn.; Byllesby & Co., Phila¬
•
Common
For
(letter of notification)
stock.
common
balance for related purposes.
Electric Co
underwriter.
Nazareth
Sept. 7
$100). Price—$100 per share. Underwriter—None. Pro¬
ceeds—$600,000 to be used for spectator grandstand and
24, 1949
Aug. 19 (letter of notification) 300,000 share of
»
•
r,/,
June 25 filed 5,000 shares of class B
Arkansas Power & Light Co
October
Heidelberg Sports
No
Co., Great Falls.
($20
promissory notes and to carry merchan¬
dise inventories and receivables or to replenish treasury
funds. , The balance would be used for other
corporate
Bonds
10-year de¬
Brewers, Inc., Great Falls, Mont.
(letter of notification) $130,000 first mortgage
bonds.
Underwriters—Dillon, Read
construction,
of California,
National
retire secured notes held
by
buy unsubscribed
preferred; unsubscribed common will be sold either at
public auction or to the underwriters. Proceeds—To pay
or
Mercantile Acceptance Corp.,
•>'
& Co. Inc. and Dean Witter & Co. will
purposes
Utah Power & Light Co
October
will be offered to
cap¬
whether
slop order should be issued suspending the effective¬
of the registration statement.
Aug. 31
off short-term
4, 1949
New York Chicago & St. Louis RR.-*Eqp. Tr. Ctf.
October
common
working
determine
Underwriter—Guardian Securities Corp., San
Francisco^ For general corporate purposes.
Office, 810 14th Street, Denver, Cola
l-for-3 rate and
general
to
6
Sept. 8 (letter of notification) $100,000 4%
preferred and 50,000 shares of ($20 par) common.
Offering—Preferred will be offered to preferred holders
at
For
hearing June
bentures.
for insurance
Hawaiian Electric Co., Ltd., Honolulu
June 21 filed 150,000 shares of series E cumulative
held
San Francisco
par)
Co
October 3,
reserve
a
No underwriter.
SEC
•.
Harvesters Casualty Co., Denver, Colo.
:
Sept. 7 (letter of notification) $75,000 of 6% debentures,
due in 10 years; 500 shares of common and 500 shares
of preferred stock. Both stocks to be offered at
$10 per
To build
8,000 shares
ness
•
No underwriter.
Oil
filed
12
share.
per
Gulf Coast Oil Processing, Inc.,
Miami, Fla.
Sept. 8 (letter of notification) 100,000 shares of common
stock.
Price—$1 per share. No underwriter. To build
a
tung oil plant in Citronelle, Ala.
share.
41
Corp., Toledo, Ohio
(no par) common, of which
only about 2,614 shares will be offered publicly at $109
price
ocean
..
Convertible Television, Inc
Lexa Oil Corp
(1073)
of class A $5.
Proceeds—To complete
ferry, to finance dock and terminal facilities,
to pay current obligations,
and to provide working
capital. ,-.t '
v-'.r,*/.'.' •
•/
an
1949
19,
&
Oct.
29
Inc.,
filed
Pancoast;
Underwriters—Russ & Co.; Dewar, Robertson &
Dittmar & Co. and Rauscher, Pierce & Co.,
San Antonio.
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
Lucky Stores, Inc., Oakland, Calif.
June 27 filed 400,000 shares ($1.25 par) common stock.
share of class C given as a bonus with each 4 shares
oft
class B purchased.
Proceeds—To
Underwriter—Names
liabilities and working capital.
$11.25.
being offered
on
by amendment.
Proceeds—Shares
behalf of Blair Holdings Corp.
pay
v
(Continued
on page
5%
cumulative
10,000 shares oft:
Offering—Clase
share with
one'
balance of currenft
42)
.
.:/
I,
II
(letter of notification) 54,000 shares ($1 par)
common stock,
of which 50,000 shares offered by com¬
pany and 4,000 shares by George B. Wilkinson, Charlotte,
N. C.
Underwriter—Marx & Co., New York.
Price—
Industries, Inc., New York
(letter of notification) 3,585 shares ($1.75 par)
common stock.
Price—$27% each. Offered by Lewis S.
Schenley
Sept. 7
Rosenstiel, Chairman of the board.
To be sold
New York Stock Exchange.
No underwriter.
Silver Bell
Mines Co.,
stock to
Eugene J. Nord.
be received by company
•
Stone &
Pierce & Co.,
Power &
in connection with con¬
stock.
be
Price—$1
as
share (U. S. funds)," Underwriting—None. Proceeds
to the purchase of equipment,
C roa# construction, exploration and development.
per
&
Transmission
•
indication
no
as
Informed
raised.
Sept. 1! filed 100,000 shares ($100 par) cumulative pre¬
400,000 shares ($5 par) common stock.
& Webster Securities Corp. and
to
general funds for expansion.
United Minerals
Reserve Corp.,
the
West Corp. will sell 120,000 shares and 34,000 shares, re¬
spectively.
Blackstone
S
Stanley & Co.
Light Co. (10/10)
July 28 filed $5,000,000 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.; Equi¬
table Securities Corp.; Union Securities Corp. and Smith,
Barney & Co. (jointly); Carl M. Loeb, Rhodes & Co., and
E. H. Rollins & Sons (jointly). Proceeds—For construc¬
tion purposes.
Expected about Oct. 10.
,
•
Utah-Vernal Oil Co., Salt Lake
City, Utah
Sept. 9 (letter of notification) 455,700 shares (10c par)
common stock, of which 272,974 will be sold at 50 cents
a share.* The remainder has been sold at prices ranging
from 13% cents to $1 a share. No underwriter. To com¬
plete well and for geological expenses. Office, 234 Atlas
Bldg., Salt Lake City, Utah.
(9/20)
Aug. 25 filed $31,000,000 of sinking fund collateral trust
bonds, due 1974.
Underwriters—Competitive bidding.
Probable bidders: The First Boston Corp. and W. C.
Langley & Co.( jointly); Lehman Brothers and Goldman,
Sachs & Co. (jointly); Kuhn, Loeb & Co. and Harriman
Ripley & Co. (jointly). Proceeds—To redeem $5,000,000
of $5 gold debentures, due 2030, at 105%; to buy 583,999
23/25 shares of
common
stock of Monongahela Power Co.
from West Penn Power Co.,
and to redeem outstanding
preferred stocks and class A stock not offered under the j
exchange. Bids—Bids for purchase of bonds will be re¬
ceived up to noon (EDT) Sept. 20 at company's office,
50 Broad
[
Street, New York.;
/
West Penn Electric Co.
(9/22)
Aug. 25 filed 856,895 shares of common stock (no par).
Underwriters—Company is negotiating with Lehman;
Brothers
and
Goldman, Sachs & Co. (jointly) for the
underwriting of the stock. Offering—468,621 shares to
be offered, present
new
common
share for each five
stockholders at rate of
one
held, and the remaining 388,274
shares will be offered in exchange for outstanding 6%
and 7% cumulative preferred stocks and class A stock.
Common
stockholders of record
Sept. 22 will have the
right to subscribe for the stock in the ratio of one-forfive, with the right to make additional subscriptions for
unsubscribed shares.
Rights will expire about Oct. 6.
Arkansas
Telephone Co.,
Russellville, Ark.
Aug. 16 (letter of notification) 1,000 shares of 6% cu¬
non-participating preferred stock (par $100
per share).
Underwriter—Lewis W. Cherry Co., Little
Rock, Ark. Proceeds—To pay indebtedness for equip¬
ment and supplies.
mulative
to
sell
$40,000,000
RR.
<9/21)
St. Louis RR.
(10/4)
Aug. 23 reported the company expects to sell at conjpetitive bidding $3,360,000 equipment trust certificates
early in October. Probable bidders—Halsey, Stuart &
Co. Inc.; Salomon Bros. & Hutzler; Harris,- Hall & Co.
(Inc.); Harriman Ripley & Co., and Lehman Brothers
(jointly).
•
Valley Gas Co.
authority to sell
York,
Chicago &
^
•'*
NorthernPacific Ry.
■
Sept. 14 reported that company probably will be in the
Market about the middle of October with a relatively
small
offering of equipihent trust certificates. Probable
Halsey, Stuart & Co. Inc.; Salomon Bros. &
Hutzler; Harris, Hall & Co. (Inc.); Harriman Ripley &
Co. and Lehman Brothers (jointly).
v
"
Common stockholders have preemptive rights on
the new preferred stock, as will holders of 6% preferred
who want to exchange their stock. Eastern Utilities As¬
bidders:
poses.
.
of the Blackstone
stock, will waive its right to subscribe to the
preferred. Probable bidders: Estabrook & Co. and
sociates, Boston, holder of 99.17%
Public Service
common
new
*Stone & Webster Securities Corp. (jointly).
•
Central
the
Illinois
Light Co.
debt financing by company is in prospect in
future, according to James A. Longley, Presi¬
Company will require approximately $4,000,000
near
dent.
to
new
in
$4,500,000
new
money
this
construction
Weld & Co.
to
•
program and to pay
loans.* Present estimates indicate that another $5,000,000
required in 1951, and this' money is expected
obtained through some form of permanent financ¬
its
to
Central Maine Power Co.
new
with
•
additional
securities,- including bonds and addi¬
tional common stock.
It is also thought that the financ¬
ing possibly may involve additional preferred stock. The
offerings will be designed to pay off short-term indebt¬
edness and to provide the company with funds for con¬
struction, including the building of the Dead River stor¬
Paso
Natural
Gas
Co.
shares
,
second
Of the
Erie Railroad
cash
the
•
Inc.; Salomon Bros. & Hutzler; Harris, Hall & Co. (Inc.); •{
Ripley & Co. and Lehman Brothers (jointly)i"J
A.
Yates,
or
of
of
bonds
the
earnings, and $45,000,000 from
subsidiary companies. Prob¬
Corp.; Morgan
The First Boston
Electric Bond & Share Co. American
may sell competitively 343,844 com¬
mon
shares of Texas Utilities Co.
Probable bidders:
Dillon, Read & Co. Inc.; Lehman Brothers; Union Se¬
curities Corp.; The First Boston Corp. and Blyth &
Co., Inc.
•
Light Co.
Western Maryland Ry.
9
reported
the matter
of refinancing company's
$44,277,000 4% first mortgage bonds, due Oct. 1, 1952, is
being actively pursued.
Morgan Stanley & Co., New
Share Co. the 191,590
common shares of Florida owned by American Power & >
Light Co. may be sold competitively. Probable bidders: •
The First Boston Corp.; Dillon, Read & Co. Inc.; Smith,
Barney & Go. and Blyth & Co., Inc.; Lehman Brothers; ;
Union Securities Corp; Merrill Lynch, Pierce, Fenner :
York, and Alex Brown & Sons, Baltimore are reported
to have been assisting the company in an effort to de¬
velop
would
an
be
change.
.././-v,'//;
York
acceptable plan whereby longer term bonds
offered to existing holders for voluntary ex¬
;
County
(Pa.)
Gas Co.
Sept. 6 Pennsylvania Gas & Electric Co.
Indianapolis Power & Light Co.
Sept. 11 company asked the Indiana P. S. Commission
for permission to issue $40,000,000 new.first mortgage
bonds to
refinance present issues: ' Probable
bidders
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.;
Langley & Co;; White, Weld & Co., and Shields &
Co. (jointly); Lehman Brothers. Goldman, Sachs & Co.
and The First Boston Corp. (jointly).
'
Texas Utilities Co.
Sept.
•
include
"
Under plan III of
Harriman
W. C.
"
Stanley & Co.; Harriman Ripley & Co.
Sept. 13 reported company plans the sale on Oct. 11 of
$4,300,000 equipment trust certificates, maturing in oneto-ten-years. Probable bidders: Halsey, Stuart & Co.
& Beane.
Eugene
able bidders for stock:
.,
Florida Power & Light Co.
Under plan III of Electric Bond &
*
"
"
hand and retained
on
sale
Power &
(10/11)
financing.
President, stated.
Ap¬
$14,000,000 of new common
will be sold during the final quarter of 1949, according
to present plans, Mr. Yates said. The balance will be
offered in'the latter part of 1950 or early in 1951.
A
total of $168,000,000 will be required for new construc¬
tion by the operating subsidiaries during the 1949-51
period, according to Mr. Yates. Of this amount, $94,000,000 is expected to come from internal sources, including
convertible second
•
additional
natural gas.
proximately $12,000,000
preferred stock (no par) issuable in
total, 65,000 shares will be issued as $4.25
preferred stock, of which 50,000 will
be offered in exchange to holders of $5,000,000 3%%
convertible debentures and the remaining 15,000 shares
will be sold for about $100 a share.
Traditional under¬
writers:
White, Weld & Co. and Stone & Webster
Securities Corp.
'
of
necessitate
will
Southern Co. ?
companies,
Sept. 12 stockholders authorized a new issue of 200,000
series.
customers
Sept. 8 Company plans to sell $29,000,000 of additional
common stock in the'next two years to help to finance
the construction program of its four operating utility
age
dam.
Probable underwriters: : The First Boston
Corp.; Blyth & Co., Inc.; and Kidder, Peabody & Co.
(jointly); Harriman Ripley & Co.
El
,
pipeline will cost about $2,500,000, arid an addi¬
tional expenditure of $750,000 will be required to con¬
vert customers' appliances so that they will burn the
Sept. 12 reported company will be in the market shortly
9
.
The
ing; Probable bidders include Halsey,Stuart & Co; Inci
•
'
(jointly).
South Jersey Gas Co.
Sept. 10, Earl Smith, President, announced that the con¬
struction of necessary pipelines to supply natural gas
will be
to be
Stanley & Co.; Union Securities Corp. and White,
gan
finance its
off temporary bank
year
Electric & Gas Co.
Sept. 8 reported company expects to be in the market
later this year with $25,000,000 new cumulative pre¬
ferred stock (par $100)
Company has applied to the
New Jersey Board of Public Utility Commissioners for
authority to make this offering. Probable bidders: Mor¬
v
•
Western
plan
its
to
.
New
.
West Penn Electric Co.
company's
rejected
stock
.
35,000 shares of preferred stock (par $100) at competitive bidding. Proceeds will be used to retire the 12,432
outstanding shares of 6% preferred stock. The remain¬
der of the proceeds will be used for construction pur¬
Sept. 13
Utah Power &
.
{Company will receive bids up to Sept. 21* for the pur¬
chase from it of $9^120^000 equipment trust certificates
{to mature in annual instalments from Oct; 1; ?4953-Oct.
.1,1964,
Probable bidders: Halsey, Stuart & Co. fnci;
Salomon Bros. & Hutzler; The First
Boston Corp.; Harri¬
man Ripley & Co. and Lehman Brothers (jointly).
^
discussions re¬
Commonwealth loan.
Sept. 8 the company asked the SEC for
Bell Telephone Co.
New York Central
i
to how the proposed loan would
banking interests said that so far
they knew there have been no active
•
Chicago
Upper Peninsula Power Co.
Sept. 28 filed 154,000 shares of common stock (par $9).
Underwriters—SEC has granted exemption from com¬
petitive bidding. An investment banking group man¬
aged by Kidder, Peabody & Co.; Merrill Lynch, Pierce,
Fenner & Beane, and Paine, Webber, Jackson & Curtis,
may be underwriters. Proceeds—Will go to selling stock¬
holders.
Consolidated Electric & Gas Co. and Middle
Light Co.
parent, American Telephone &
Telegraph Co., in repayment of advances for new con¬
struction in 1948-1949. The board held that the financing
could be done more cheaply with bonds, and savings
thus effected could be passed on to1 consumers.
Com¬
pany has not as yet decided on its future plans.
.
Proceeds—To be added
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.
(jointly); Union Secu¬
& Co.
10 the New Jersey Board of Public Utility Com¬
missioners
Under
Underwriters—Stone
New Jersey
common
Birmington Electric Co.
plan III Electric Bond & Share Co may dispose
of 254,045 common shares competitively. • Probable bid¬
ders: Kidder, Peabody & Co.; Merrill Lynch, Pierce,
Fenner & Beane; Union Securities Corp.; Smith; Barney
& Co. and Blyth & Co., Inc. (jointly).
Co.
ferred stock and
White, Weld & Co., New York.
Smith, Barney
•''• ":;/v;"
shares
Sept.
& Share Co.
•
Gas
Probable
III Electric Bond & Share Co. 2,540.450 com¬
may be sold competitively.
Probable bid¬
der: Union Securities Corp.
'
Light Co.
of Electric Bond
cently regarding an Australian
Traditional underwriter, Morgan
—Funds will Be applied
Tennessee
46,973
sell competitively 193,503 Mon¬
bidders: Blyth & Co.,
may
shares.
National Power &
mon
possibility of that government raising a dollar loan but
according to the reports received the Prime Minister
gave
June 7 filed 375,00C shares of common
Power
III
plan
•
Australia, Commonwealth of
Sept. 8 Prime Minister Chifley in Canberra disclosed
Co., Inc., Chevy Chase, Md.
(letter of notification) $50,000 of indebtedness
and $10,000 of common stock.
Pricfe—$1,000 per
No underwriter.
To buy land and build homes.
Sudore Gold Mines Ltd., Toronto, Canada
r
Co.
rities Corp.
183,050
(new common may be sold competitively.
Probable
bidders: Blyth & Co., Inc.; Merrill Lynch, Pierce, Fenner
& Beane and Kidder, Peabody & Co. (jointly).
Suburban Land
unit.
American
Under
Sept. 7
notes
Light Co.
and
(CDT) Sept. 20.
Prospective Offerings
•
struction program.
•
Share
&
Power Co.
common
Inc.
•
stock
Cur¬
Webster Securities Corp.* and Rauscher,
Inc.
Proceeds—To repay advances from
General Telephone Corp., used
Bond
Under plan
Sept. 14 filed 10,000 shares of cumulative preferred
(no par). Underwriters—Paine, Webber, Jackson &
tis;
Light Co.
Electric
shares of Minnesota may be sold at market or
Montana
tana
Underwriter—E. W.
Telephone Co.
Southwestern Associated
of
Under plan III of Electric Bond & Share Co. American
at Room 1100, 231 So. La Salle
Street, Chicago, 111., up to 10:30 a.m.
III
plan
competitively by American Power & Light Co.
& R. C. Miller & Co.,
•
be
Minnesota Power
common
Co.; Harris, Hall & Co. (Inc.); Merrill Lynch, Pierce,
& Beane; A. G. Becker & Co.; Carl M. Loeb,
Rhoades & Co.
Proceeds—To repay bank loans and for
construction.
Bids—Bids for purchase of the bonds will
Denver, Colo.
Price—$1.10 each.
Philadelphia.
•
Fenner
(letter of notification) 20,000 shares of capital
be offered by Edward G. O'Brien and 20,000 by
to
Under
&
in the
plan
shares
bidders: Blyth & Co., Inc.; Union Securities Corp.; Dil¬
lon, Read & Co. Inc.; Kidder, Peabody & Co. and Mer¬
rill Lynch, Pierce, Fenner & Beane (jointly)/
(9/20)
Corp.
Service
Public
Wisconsin
Middle South Utilities Co.
Under
III of Electric Bond & Share Co. 803,229
disposed of by latter may be disposed of
through public bidding or through negotiation. Probable
Aug. 19 filed $4,000,000 first mortgage bonds, series due
Sept. 1, 1979. Underwriters—Names to be determined
by
competitive
bidding.
Probable bidders: Halsey,
Stuart & Co. Inc.; The First Boston Corp. and Robert
W. Baird & Co. (jointly); Union Securities Corp.; Sal¬
omon Bros. & Hutzler; Shields & Co.; Kidder, Peabody
To be used for equipment and additional
working capital in connection with the company's air
cruise service. Expected early in October.
$5 per share.
Thursday, September 15, 1949
if
Inc., Denver, Colo.
May 19 (letter of notification) 800,000 shares of common
capital.
Price, 250 per share.
Underwriter—John G.
Perry & Co., Denver, Colo.
For working capital and
drilling of .wells.
,
Inc.
July 27
July 27
FINANCIAL CHRONICLE
&
Western Oil Fields,
(Continued from page 41)
Resort Airlines,
•
COMMERCIAL
THE
(1074)
42
(parent) filedt
sell its entire interest in
this company, consisting of 4,506 shares of capital stock
fnar $20).' The stock
will be offered at competitive
bidding. Probable bidders: A. C. Allyn & Co.; Kidder,
Peabody & Co.
The SEC authorized York to sell an
additional 6,000 newly authorized
($20 par) common
a
,
proposal with the SEC to
shares to its common stockholders at $50 a share.
170
Volume
Number 4838
•
COMMERCIAL
THE
the
burgh, Hartford, Detroit, St. Louis
Corp., representative of the deal¬
It
in
that
appears
the
public
has
as
issue
new
utility
case
the
in
market
months ahead.
Public
Co.
world
markets are giving off
atmosphere of confidence and
strength suggesting that people
are
as
means
a
in
interested
Gas
&
up as likely to be
later in the year
market
$25,000,000
raised
be
to
via
cumulative
new
It
has
stock.
preferred
applied to the
Board of Public Utility Commis¬
already
sioners for authority to undertake
the financing, but as yet no hear¬
securities
investment.
of
Electric
date has been set.
Sale of
:
And
the current
upswing in
the
250,000 shares of $100 par
activity which has reached out to
embrace the secondary rail bonds stock projected would place the
:}i\ is no exception to the rule. Under- company in funds for the balance
ing
V
writers
dealers
and
the
of the
their return from
holiday, finding
suggest any appreciable
too-sanguine
r;
vr
none-
were
on
r
little
early
to
in
revival
the
New York
York Telephone Co.
market.
be
But the
:
-
underlying
ment
taken
is
capital
the
as
sues
.
...
•
are
Of this total addi¬
tions
this
$158,000,000.
would
year
^
students of the markets since
"
^
:Accordingly there is a feeling ■{
that
if
the
market,
as
most
'
people believe, is signalling last- ;
Ing peace. in' the "steel industry}
and progress toward a solution
A
correction
in •" domestic
things
be shaping up for a
may
Offering
stockholders
eral
Public
Gas
ester
Utilities
shares
'
.
,
and the
large issue, $31,000,000,
-other.a $4,000,000 loan.
Shr.
Gen¬
Corp.
were
Corp.
of
stock
for West Penn Elec-
draw several bids
i
^ ;
involves
also
undertaking
shares of no par value
856,895
stock.
common
Sept! 8, 1949.
:
the
ent common holders in the ratio
;
j of
*
The shares
The
sharei
being offered repre¬
outstanding
Rochester
all
by
the
common,
owned
GPU,
which will receive the entire pro¬
In the offering
ceeds.
Boston
Corp.;
Wertheim
&
are
a
acting
new
exchange for two classes of preferred and the class A stock. Any
I
•
unsubscribed
i
portion,
Service
Co.
with funds to repay bank loans
'
construction.
finance
and
j
Both
are due on
Tuesday and
issue promises to attract a
this
host
of bidders.
Indianapolis Power & Light
into
sight
share
directors
of
Frank
payable
&
Madison Avenue,
506
will
A sound color film on
plans
with
stock.
the com¬
of dealers on
was
a
t6_dealers in
New
Rochester,
York,
Boston,
NATIONAL SHIRT SHOPS
(Special to The Financial Chronicle)
30,
again to dealers Sept. 9 in Pitts-
Power
&
Light
11.
(Special to The Financtal Chronicle)
ILL.
—
the:
Central
Mr.
with
Edward ' H.
DIVIDEND NO. 32
The Board of
addition
share,
a
Ryan, who
Peter
of New York City, was a
the Security Traders
tion of New York.
Republic
Co.,
209
South La Salle Street, members
of the Chicago Stock Exchange.
West
Street.
7th
He
was
$/ith
(Special
-
At
of
a
the
•
Pittsburgh,
The
Meeting
mortgage
rett Herrick &
record
ness
on
September
the
on
Registration with
upon
SEC is
approval
A.
at
19,
DIVIDEND No. 28
plan
the:
by
Indiana*
Public
dividend of 30 cents per share on
Common Stock of the
able
Commission
that
expected
be
the
it
and
is
bonds
may
competitive
bid¬
College
graduate,
position
with
or
ready
for
other
A
and
October.
mercial
Aside
from
Park
refinancing
standing obligations,
the
out¬
sale
of
finance.
&
of
firm
or
Majored in economics
Box
Financial
Place,
New
S-915,
Com¬
Chronicle,
25
;
the
New
York
and
The Board of Directors of The
Corporation has this day'
(September 13, 1949), declared 25
cents
per
share as the regular
quarterly dividend, on the no par
value stock of the corporation is¬
sued and outstanding payable on
and after October 1, 1949, to the
Arundel
of record
stockholders
(Special to The Financial Chronicle) '
on
the
I
PREFERRED
cor-
usiness September
Eoration's
books at20,the1949.
close of
|
quarterly
MARSHALL G. NORRIS,
i
snare
share
Vice-President of J. P. Morgan &
Incorporated.
He
is
also j
1
I
at
|
ber 16, 1949.
|
The Electric Storage Battery
OF
Payment of the amount
The Directors
COUPON
NO.
of
General
Realty
Utilities
declared
have
from
dividend of fifty
;
,
5
smmD
on
share
the Common Stock, payable Septcm.
cents
($.50)
the close of business
at
per
COMMON STOCK DIVIDEND
September
on
REALTY
&
UTILITIES
By SAMUEL M. FOX, Treasurer
C0MPRNY
FINRNCE
i,
58th Consecutive
Quarterly Payment
The Board of Directors of Seaboard
Finance Co. declared
dividend of 45
mon
Philadelphia 32, September 9, 1949
Stock
a
regular quarterly
cents a
share
on
Com¬
payable October 10, 1949,
stockholders of record Sept. 22,1949.
PREFERRED STOCK DIVIDEND
9th Consecutive
10
GENERAL REALTY & UTILITIES:
CORPORATION
DIVIDEND
&
The
annual
Board
of
dividend
ON
CAPITAL
Directors
of
20
has
cents
SHARES
declared
a
semi¬
share on the
the
Corporation
payable
to stockholders of record
at the close of business September 20, 1949.
per
Shares
of
September 30, 1949,
Capital
CORPORATION
1949.
3
•
the
H. C. ALLAN
Corporation, will be paid on September
1949 at The Commercial National Bank and
Trust Company of New York, Trustee, 46 Wall
Street, New York 15, N. Y.
15,
g
,
1949 on the above-
30,
September
|
u
Accumulated Surplus of the Company a
10j representing interest for the six months
GENERAL
|
September 8, 1949-
Quarterly Dividend *
called for by Coupon
period ending September 30,
York' 8.
§
§
company
196th Consecutive
Cumulative Income Debentures
Due September 30,
1969
Debentures
|
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiitiiiiifiniiiniiimtiiHiiiiiiiiiiiiiiiiiiiHiimiiB
to
mentioned
|
the close of business Septem-
==
CORPORATION
No.
§
H. C. MOORE, JR., Treasurer
ber 30, 1949, to stockholders of record
a
GENERAL REALTY & UTILITIES
PAYMENT
|
-
member of the
as a
Mr.- Alexander' is the Executive
OF
dividend of $1.12'/a per
the 4'A% cumulative
preferred shares of
the Association payable October
1,1949 to shareholders of record:
|
today elected Henry
on
convertible
Secretary
=
The Board of Directors of Gen¬
DIVIDEND NO. 10
The Trustees have declared a
H. C. Alexander Director
Motors
,,
S New England Gas
1 and Electric Association 1
Lynch, Pierce, Fenner & Beane,
6361 Hollywood Boulevard.
C. Alexander
'
|i|||lllllllllllllllllllllllllllllllllllllltllllllllltlllllllllilllllllllHIIIIIIII>Htflnil|
HOLLYWOOD,
CAL. — Bernhard B. Bundesman ha$ been
added
to
the
staff
of
Merrill
eral
:
September 13,1949
Chronicle)
Merrill Lynch Firm Adds
4%
seeks
September 30, 1949 to stock¬
September 22, 1949."
,
Secretary and Treasurer
20,
a
the
pay¬
ARUNDEL
Notice of Payment of Coupon
statistical, research
department
institution.
ding along about the middle of
age
on
Company,
holders of record at the close of business
on
'
NOTICE
Service
<
The Board of Directors has declared
Co., Inc.
Boston Stock Exchanges.
Seeks Position
'
.
.
busi¬
close of
Dividend Notice
BOSTON, MASS. —James D.
MacDonald, Jr., is with Whiting,
College Graduate,
the
at
intern
an
COMPANY, INC.
Stockholders of
the
1949.
of
Ward
declared
day,
third
RIBBON & CARBON
McCASKEY, JR., Secretary.
& Stubbs
Young
ex¬
of
the
for
Common
D.
With Whiting Weeks
bearing ZYi and 3V8% coupons.
pected
this
1949;
14,
Company,
JEROME A. EATON, Treasurer
for
bonds
held
of this
Directors
OLD TOWN
associated with Bar¬
are
of
388
quarter
of
1949,
of
Seventy Cents ($.70) a share on the outstand¬
ing capital stock of this Company,
payable
on
September
30,
1949,
to stockholders
of
record
at
the close of business on September
20
1949/ ^
' ■' •
W. C.
LANGLEY, Treasurer.'
divldehd
Benton and Frederick B. Summers
of Alton
Board
No.
Pcnna.
Common
to
Barrett Herrick
R.
>~
N.'. Y.
5,
September
DIVIDEND
Stock of
the Corporation^
payable September 30, 1949,
William
and
York
New
Broadway,
meeting of the Board of Directors
Allegheny Ludlum Steel Corporation
held
today,
September
7,
1949,
a
dividend of
fifty
cents
(50c) per share was
S.
Ward
.
Chairman.
COLE,
Allegheny Ludliim Steel Corporation
pre¬
ILL. —Russell
The
1949.
closed.
be
Honduras Rosario
&
.
to The Financial Chronicle)
CHICAGO,
ISO
*
a
declared
Three
to
1949
30,
23,
in
cents
20
Mining Company
member
Associa¬
DIVIDEND NOTICES
affiliated
with Dempsey-Tegeler & Co., 210
viously with G. Brashears & Co.
New York
of
September
not
SYLVAN
19, 1949. Checks will be mailed.
first
will
year-
a
share
a
dividend
record September
of
books
Co:
&
cents
10
payable
both
stockholders
associated
was
McDermott
P.
of
quarterly
the
to
transfer
Directors has declared
dividend
extra
Dead;
of
McKee has become associated with
refinancing its $40,000,000 of out¬
standing
DELAWARE, INC.
OF
end
Herbert V. Ryan died on Sept J
With Central Republic Co.
It was shown
of
V
stock.
CHICAGO,
ATKINSON, Treasurer
sfiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiii
Reginald J. Wood Opens
Philadelphia, Cleveland, Chicago, board, it was announced by Alfred
San Francisco and Los Angeles
P. Sloan, Jr., Chairman of the
after the registrati&n statement board.
effective.
W.
E.
September 13, 1949.
Herbert V. Ryan
nationwide scale,
shown Sept. 8
The stock transfer books will remain open.
land Stock Exchanges.
and the financing, represent¬
ing the first simultaneous briefing
stockholders of record
mem¬
CHICAGO, ILL. — Reginald J.
1949, the company reported total Wood has opened offices at 11045
operating revenues of $28,932,437; Lowe Avenue to engage in the
As of Aug. 31, 1949, capitalization
securities business. He was pre¬
consisted of $53,657,000 of funded
viously with Hornblower & Weeks
debt, 170,000 shares of preferred and the Northern Trust Co.
w
stock and ,835,000 shares of cbmmon
Stock of this
October 15, 1949, to
September 30, 1949.
payable
Company,
*
steam, chiefly in and
Rochester, the third larg¬
est city in New York State.
For
Feianer & Beane
who
regular quarterly divi¬
bers of the New York and Cleve¬
Corp,
June
A
dend of 37'/i« per share has
been declared on the Capital
Chronicler
and
ended
Secretary.
Co., Bank o."
TOLEDO,
OHIO—-Thomas J
McHugh is with Collin, Norton &
Co.,
months
SIMON OTTINGER,
N. Y., September 13, 1949.
Building.
(Special to The Financial
warrant.
12
this
chronicle)
With Collin, Norton & Co.
January, 1950,
dividends quar¬
terly thereafter as conditions
the
share
per
of
to
in
Rochester Gas & Electric
Knowlton
America
and pay common
Co.
Indianapolis
New York,
25c
OAKLAND, CALIF.—Ruth B
has
joined the staff * o-
dividend of 56 cents per
a
of
*
1
the board
of
declare
members
securities. dealers
became
Another big utility undertaking
comes
tion
Lehman Brothers,
Co! and Merrill
rant holders and also sell
pany
The smaller issue will provide
Public
& Co.
to The Financtal
ended
quarter
of
stock
Wells
shares
re¬
classified on Aug. 29.
According
to the prospectus, it is the inten¬
nationwide group-of participat¬
ing
however,
will be underwritten.
Wisconsin
the 835,000
on
Stubbs, 53 State Street,
dealer managers of
as
the
With Frank Knowlton
(Special
outstanding and
on
similar dividend is pay¬
a
Weeks &
share for each five
solicit subscriptions by the war-*; held and the balance' offered in
one
For
1949.
com¬
The First
Lynch, Pierce,
.
latter, 463,621 shares
will be offered on rights to presOf
able
(Special to The Financial
:
from investment banking groups.
This
Sept. 9
at
GPU
of
Corporation
July 31, 1949, a cash
on the outstanding
corporation has been de¬
clared payable October 11, 1949
to stockholders
of
record
at the close of business
October 1,
then
mon
share for each 10
one
common
stock is priced at $28.50 per
sent
Latest indications are that the
issue,
775,914 shares of Rochester
<
the rate of
tris Co., will
dividend of
paid on the
LOS ANGELES, CAL.—William
of
Electric
and
securities business.
bid
York
New
States
Plywood
dividend
L. O'Bryon has become
Two
public utility companies Transferable subscription war¬
rants will expire ^at 3 p.m., New
will be in the market with new
bond
issues
next'-week—one a York time, Sept. 30, 1949.
-
Greater
With Dempsey-Tegeler Co.
Gas a! $28.50 per
held of record
1,
On July 27, 1949, a
56 cents per share was
Price of Rochester
good fall and winter in the new I
Utility Issues Ahead
v
the
Fund in 1948.
(Special to The Financial Chronicle)
—-Common
United
common
shares of
cycle,
■
GPU Sets
ing rights to subscribe for 835,000
common stock of Roch¬
completion of the
mention the
'
*
of
man
securities offer¬
a
made to dealers.
ever
DIVIDEND NOTICES
general campaign Chair¬
was
mailed warrants Sept. 10 evidenc¬
f" '. of Europe's financial ills, not to
f:
He
they
that a
strong market is an essential element when they start out to seek
'new funds.' v
■?!
tech¬
fact
hard
the
recognize
this
43
the
involve
it is calculated, will call for
expenditure of about $154,-
an
and
company
ing
year,
.
who
men
for
about $462,000,000
responsible for'keeping corpora- 000,000 additional with 1951 put
tions sufficiently supplied
with down as likely to require another
working capital are no less close $150,000,000' minimum. .
;)
i
....
the
days
com¬
Construction projected for next
parties.
These
the
calling
projects
of
some
not the only interested
are
of
through 1951.
employ their
funds. Moreover, those who do
the actual marketing of new is¬
to
seeking
informed
outlay
an
additional
the next few years.
over
mission
are
Vanderbilt University,
Metropolitan Museum ol
Art and of the Presbyterian Hos¬
pital in the city of New York.
of
around
pjfobably will
fob
market
Officials
an
investors
that
the
in
invest¬
secondary
markets
indication
still
in
buoyancy
and
equity
■r
demonstration of
new
a
gas
Telephone Co.
Data coming out atyrate hear¬
issue ings in Albany indicate that New
new
believe
(1075)
of
trustee
Boston
manufactures and sells electricity,
year.
summer-end
:
First
to
be the most graphic
presentation of information about
_
seasoned
still
the
for
an
.
shapes
now
in
naturally
feels better about things when the
)
:
financial
Service
The
er-managers,
the
been
Houston.
and
nique
past, will be fhe mainstay
the
of
The
CHRONICLE
tion work.
companies,
.
FINANCIAL
issues is expected to pro¬
vide additional cash for construc¬
new
Looking Further Ahead
11?
&
SAMUEL
September
15.
1949 '
M.
FOX, Treasurer
Quarterly Payment
The directors also declared
a regular
quarterly dividend of 65 cents a share
on Convertible Preferred Stock, payable
October 10, 1949, to stockholders of
record September 22,1949. *
A. E. WEIDMAN
August 25, 1949
Treasurer
♦
44
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(1076)
Thursday, September 15, 1949
Van
BUSINESS BUZZ
Camp Sea Food Co
Common Shrs. Offered
•
•
By White, Weld-Staats
■
A
Behind-the-Scene Interpretations
from the Nation's Capital
gJ ' Tr^|m
~
fllA/ [A, MJP.Mf
XM.
An
/
'N A
y
William
/'
A A
A
/
ing
C
4
niM.inn
/
fact-finding board.
*
quitted him.
Of
possibility
the
course,
was
For
i
What
was
surprising was the
which
completeness with
litter
the steel board deflated the en¬
fourth
round
wage
raise case.
The
hoard found that the cost of
living was not rising, but instead, has slowly declined. This
is not the time, the board in
effect admonished, to raise
tire
;
•
^
labor
organized
Sure, the steel in-
rates.
wage
'
but in relation to the
depreciation of the dollar, these
are not out of line.
The record
profits,
in modernizing
industry
of the
expanding was commented
and
^V;:j
most favorably,
upon
social
Steel labor's demands for
the
the basis that steel's
so high that laborers
security were not justified by
board
upon
profits were
had
but
coming,
more
the
on
grounds of the dicta, enunciated
by this board without legal cloth¬
ing, that industry should begin to
figure in its costs the "deprecia¬
tion of human resources."
Finally, and this was one of
the
Under the
Taft-Hartley act (so called by its
If Labor
President
popular name rather than by its
legal name, "Labor-Management
bargaining
Relations Act of 1.947")
pensions is provided for, even
though not under the steel labor
contract.
That great anathema,
the
Taft-Hartley
the
foundation
furnishes
act,
considering
for
security
pensions and other social
•■...(
benefits..
■
i
gency
provisions of Taft-Hartley.
On
»
4%
predominant Washington hope was
that steel management would take
the 10 £ents in added costs in so¬
seen.
whose ulti¬
magnitude cannot be fore¬
It is also recognized that
Steel
has
and
voke
lot
a
its side,
on
con-
sidering the contract, in fighting
on
principle.' <
this
other
the
On
hand, goes the
unofficial view around here, the
present government is in fact a
government. Steel might
Labor
not
if
the
the thing this year, but
buck
next year or
this year,
t
a
And
greater.
much
This ruling of the special steel
fact-finding
fourth
all
two's
of
cost
the
benefits
camps
"settled"
the
time
a
by
for the first time in
a
-of
management.
messy
credit
for
promise
accepting
with
upsetting
acceptance
credit
steel,
principle
the
applecart.
national
Even
hardly
which
a
big
com¬
to
avoid
economic
prompt
Labor
mitigated
might
get
flow
which to stave off all the
trouble of
a
boost,
and
'
security,
compulsory
prepaid
medical care, the Brannan farm
income payment plan, Federal aid
to education, "civil rights,"
and
the
controversial
much
shall
continue
issues
be
ECA
how
of
appropriated
two
will be
enemies
favorite
estate lobby," and the
the
of
It
"Army En¬
tain
and
foreign
mil¬
this
Congress next
however,
year,
Senate.
that
way
power.
a
\
,
The curious thing about
two
lobbies,
they
effort
the
least
pumpkin
Congress
and
—
later.
much
insist
will
at
the
get¬
upon
ting out by the end of the
mer
the
on
sum¬
latest, to campaign
reelection.
During
summer
will
the
above
terrific
agement
agenda
the
with
strain
of
the
President
time
and
some
upon
the
agenda,
does
brand
*
*
years.
the
public
from the Interior
power
off
appropriations
lion
public housing and
bill passed.
and
the
power
the, private
and private
housing lob¬
year.
Rayburn
the
some?
<
House
think
Senate
has
he
Buchannan,
economic
school
a
to
attack lobbies speaking
vate
finance,
would
for
for food and
pri¬
agri¬
Brannan
industries (opposing the
plan), oil, gas, and min¬
ing industries generally, transpor¬
for
lesser
There is
a
taxes
on
business.
possibility, however,
that Mr. Buchannan may not have
his way.
a
Buchannan
Mr.
over
House
setting
lobbying
committee. The
sponsored
by
up
special
investigating
resolution
Buchannan.
was
Or¬
Grounds
on
will
Festivities
a
*
at noon.
-
T. G. Wilson Opens
SANTA
:
ner
-
CALIF.—Tan¬
CRUZ,
G. Wilson has opened
offices
at 118 Walnut Avenue to engage
^
the
by
in
securities business.
a
Treasury's
billion
$2
in
July and August
corresponding
months)
Paper stocks:
1948
Keith Paper
and the more or less
regular pick-up
of
new
Millers Falls Paper
money
weekly bill issues, the Treas¬
Eaton Paper
will not find it necessary to
Rising Paper
ury
out and raise
go
public
big
new money on
issue
until
Strathmore
Paper
some
time after the turn of the year.
The House has approved
resolution
Picnic
Island.
heavy sales of tax notes, (some
on
out
Reinharts'
Tru¬
President
pat on the back.
Judging
of
Association
Street, Inc. will hold its an¬
outing on Saturday, Sept 17,
Staten
inferred, gave Mr. Buchannan
over
cultural
at
a
him recently, and, it was
see
former high
teacher,
nual
Outing
,
l
bies,
Wall
commence
man-called
.
Cashier's
The
won't until
given
Hold
To
committee,
been
has
.
Cashiers of Wall Street
of
yet
not
of funded
debt,
7%
cumulative
$2.
par
senator
A
chairman
the
Nevertheless,
clearance
tackling
this
of
stock, par $100, and
shares of common stock,
425,000
(This column is intended to
LERNER & CO.
re¬
flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with
trie "Chronicle s" own views.)
Investment
10 Post Office
Securities
>
Square, Boston 9, Mast.
Telephone HUbbard 2-1990
HAnover
not
new
man¬
come
Teletype—NY 1-971
2-0050
Firm Trading Markets
Teletype BS 69
Hill, Thompson & Co., Inc.
NEW YORK 5
FOREIGN SECURITIES
All Issues
if
'
:
70
WALL STREET
TeL WHitehall 4-4540
up
10-billion
Executive A Underwriting Offices
r.ARL MARKS & CO. INC.
;>
FOREIGN SECURITIES
*
Trading Department
120
Frank
stock
preferred
should
of the House
That is, they feel
chance: to act.
bill;
slum
investigation
$2,000,000
SPECIALISTS
Rep.
common
in the past four
According to the
25,000 additional common shares,
the company will have outstand¬
the
even
dollar messages in 1950.
If
the
on
paid
them¬
a
certainly shorter time will impose
a
year'ended May 31, 1949,
ing regular quarterly dividends on
ing
become
named
Senate
of
to campaign in party primaries.
the
products, including
pharmaceuticals.
entire state
absent
selves for several days at
All
to the
and
;
7,227 /shares
joint investigating committee.
were*
to
prune
would
Speaker
conservatives
the
gets
joint affair
a
these
beaten, for the most part.
both
At
that
is
,
sponsor.,
said, however, that cer¬
leaders feel that a
lobbying
be
a
around until the frost is
the
of
the common stock.
House
and
cannot stick
year
is
The Army En¬
by the Admin¬
istration
as
those
lining them¬
selves up on the side of those
Congressmen who oppose public
seen
are
tation, and those groups speaking
Unlike
batting averages
dinarily
the
chairmanship.
the ".real
lobby."
gineers
gineers
to
itary aid.
Buchannan
and
President Truman have their way^
strike, accepted the the two top targets for the
the
Besides
besides its regular routine,
question of expanding social
sale
Giving effect to the issuance of
,
have
the
the
on
Brooklyn Dodgers!"
House lobbying committee
into which
mess
Congress will again
year
the
to
otf the
there
of a
agenda for the 1950 session
Next
It will
will
that
\
of Congress as well.
long while
Steel
WOULDN'T want statistics
session of Congress have got,
is an unavoidable prospect
now,
put public sympathy on the side
He
"No!
failed, and the gigantic $19 bil¬
spring and
promptly, and gracefully.
of
the
prospectus, the board of directors
has declared its intention of pay¬
Department
pro¬
taking the thing
wage
In the pr.esent
delegations
in
strike
fish
been
fiscal
prospects for adjournment of this
positive
ment)
steel
big
advantage to Steel (steel manage¬
a
con¬
an
pur¬
stockholders
;
from
Dividends
have
^Yjr;
for
said to be
govern¬
thinking
were
in
people
and
bailed out Labor.
posed by the special steel fact¬
was
Most
sciously or unconsciously in terms
of the special panel in 1945, which
finding board.
There
upset
an
management,
ment
year or
a
is
calculations.
labor,
against the
beyond
board
round
shares
certain
711.
it
put
Murray.
109,350
The
offering
473,285 with net profit of $1,168,-
Truman Administration,
probably
less than
no
For the
fat-
mildly.
So
The union
acceptance avoided this dilemma.
to
Phil
would
the cost of
steel strike this year
would be
is
looked
also
the company had net sales of $32,-
the
that the Pres¬
say
have
would
headed
possibly
security expenses,
if
are
also
subscription
waived.
company.
rivative
emer¬
hand,
been
from
vitamins
Taft-Hartley to prevent the
ident
next, it will be saddled with so¬
cial
other
have
purchase
shares and
geles, San Diego, and Astoria and
Warrenton, Ore., the company is
engaged in canning and selling
tuna, sardines, mackerel and de¬
had been forced to in¬
strike, then to
cost
beginning
mate
.
this
that
nized
It is recog¬
ushers in a new
benefits.
cial security
the
President
the
is worth,
it
whatever
For
v
.W]
>
national
invoke the
unsubscribed
shares for which
world's leading
packer of tuna.
With domestic plants in Los An¬
if the Pres¬
didn't
agreed
the
the
-
general funds of the company, the
would have
opinion
Congress,
to
of
25,000 shares will be added
ident had let the strike go on and
*
*
*
with
under¬
have
Proceeds
been strained with public
and
shares
The
of the
"I.
labor
22,420
haye been waived.
writers
chased
struck, then the
his whole political
organized
Rights to subscribe
aggregate
additional
position and the political strength
of
an
underwriters
a
had
and
rights, expiring
1949, to subscribe for
21,
rights
benefits does not conceal the loss
■"-"••"^bitter of the bitterest:
for
Labor,
of the fourth round.
total, the company is
its
stockholders
non¬
25,000 shares.
pretty
Every¬
thing which the board said about
steel wages was seen as applicable
equally to John Lewis' coal labor
empire, to the United Auto Work¬
ers, the rest of the gangs that had
been withholding their rocks until
the steel wage issue was settled.
Murray's praising of the pension
getting larger
been
has
dustry
this
Sept.
to
had negotiated
good run of wage boosts.
Co.; is offer¬
total of 134,350
a
transferable
♦
quietly,
15,
offering
the decision was
not ruled out in advance that the
very
bitter.
With
acceptance
board might recommend, as it did,
Phil Murray becomes the guy who
only social security benefits and
slayed Cock Robin Fourth Round
entirely
against any wage in¬ after AFL unions
unostentatiously,
crease.
Sept.
Of
It was no fnore amazed than would have
church people of an earlier century had the Spanish
inquisition
been able to catch
of
an
extraHenry the VIII, try him for her- recommendations
-esy,
and having tried him, ac- legal board.
»
group, jointly
Staats
of common stock, $2 par
value, of Van Camp Sea Food Co.,
Inc., at a price of $11 per share. '
been the good
;
R.
shares
%
D. C.—This capital was amazed, shocked, and
knocked out of its breath by the surprising decision of the President's
WASHINGTON,
steel
underwriting
headed by White, Weld & Co. and
special
50 Broad Street
New York 4/ N. Y.
AFFILIATE: CARL MARKS & CO. Inc. CHICAGO
TeL
BROADWAY
REctor
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