Full text of Commercial and Financial Chronicle : September 16, 1948, Vol. 168, No. 4734

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

■

BUS.

tSElJ

i

i

•

ESTABLISHED 1S39

AOM-

'

\

\

\

-"UBRAR

A

-Volume 168

Number 4734

New York, N.

Tinman Emphasizes

In the Automobile

As Defense Aid

i

By J. R. DAVIS*

f President tells Science Association

•

its

r

Government

addition

in

f. vate research. Wants
in

Social

Sciences

"politicians"
tists

t

to

who

shun

to

attacks

•

scien¬

cause

:!

work.;

government

-

President
in

Truman

address

an

Sept.

on

the

before

-

13,

of

Sciences'now holding its
centenary

'0

-

?: ' For the

past two

and

tell

us

T-1'/ tt-'".:of

1V

search.

as

d d

a

re¬

fa

factor / in

d em

a n

continue

*.

and

a

u

t o

p

ply

at least.-

e

to

r

we]l

1

a

h
as

.been
back
4

m a

search
the

scientific research

J.

President

R.

appointed

board.

Its

a

re-

Policy,"

not

was

submitted last fall to

S*e

page

PICTORIAL

27)

million
even

boom

Denver

Bond

Rocky - Mountain IBA.

•

AUSTRALIAN
CANADIAN

.

BELGIAN "

•
*

DUTCH

of

at

the

the

page

•

the

34)

v;
address

an

Annual

Federation

Dealer

SOUTH AFRICAN

on

4
Davis

BRITISH

feeling: about

(Continued

of

•

expected to con¬
in
recurrent
of pessimism. There are a

-7

Banks, Brokers and Dealers

.'

-

,

however,

*Part

For

for

be

may

waves

Club-

and

less than

•>'

«\

pro¬

probably

five

tinue,

and

will

year

maybe

for

Y.

this

automobile

year,

pictures taken at recen^outings of
Security Traders Association of
N.

total

this figure, j
The uneasy

INSERT

-to

steel

exceed

next
on

1 y

acute in the United

so

States that
duction

(Continued

pri-

especially
steel. In fact,

Davis

shortage is

port, entitled "Science and Public

.

r' i

the
I

held

due

materials -L—

agen¬

/

ago

has

shortages of

re¬

cies.

years

EDITORIAL

been
r

V-S

V"

;nf?

i

*

V:- :'*+

:c:t

'■

Mr.

Convention

of

Automobile

Associations,

Banff,
berta, Canada, Sept. 15, 1948.

Trifling With Inflation

"*

*"

'i'

-f

had

'<k

*

"

1

*

''

'

''

*

«'

'

.

.

in

discount

rates

raising the

the action

or

of the

Federal Reserve in

Quoted

: r

White,Weld&Co.
40 Wall

Exchange \

Street, New York 5 1
Amsterdam

V

requirements of member banks is that
willingness at this time to take what¬ lions, in accordance with
own
images of perfection.
be to the Government bond market Potsdam agreement was the

reserve

and to those elements in the' current business
situation—if
there really are any — which
may for the time being at
least be adversely affected

:"-.v At

any

by the psychological implications

taken.

f

V

rate such steps

'

)'

Coupon

:

r

(Continued

(

■

»Prospectus

64 Wall

STATE

,

as

these

on

page

26)

■'

•

-

•

'

.

.

FUND,

-

on

society,"
24)

page

.

Municipal

i

r:\>

!

;

THE NATIONAL CITY BANK

on

:-C

OF NEW YORK

request

'»>f

■-

Bonds

.f-

j

HART SMITH & CO.
52 WILLIAM ST.. N. T.

Bell

Bond

Street, New York 5

Dept Teletype: NY 1*708

IVe

have

prepared

a

.

»

Teletype

5

_

.

v

•• r

t

'

.

.

Private

New York

Wires

and

Department

THE CHASE

:

HAnorer 2-0980

NY

1-395

:

'

,7'

DISTRIBUTORS, Inc.

Connect

Montreal

Toronto

NATIONAL: BANK
OF

THE

CITY OF

NEW

YORK

CANADIAN

on

Portland General

Electric Co.

Company
Copy

'vi

•

"

bonds & stocks
?

Distributors of Municipal

upon

COMMON

request

Corporate Securities

Dommiox Securities

OTIS & CO.
/ '

Street, New York 4, N. Y.




powers,

"good

State and

.

.

/

Established

1899

SUTRO BROS. & CO.
"

'

(Incorporated)

Tele. NY 1-809

a

irreconcilable

•.

:

■

>.

INVESTMENTS

Tel. WHitehaJI 3-2840

"planning"

Four

are

National Biscuit

,•;.y

30 Broad

of

(Continued

.

of

three

BONDS

Underwriters and

to yield 2.40% '

INSTITUTIONAL

least

MUNICIPAL

and

memorandum

Tonawanda, N.Y.

Gordon Graves 4 Co.

at

conceptions

.:

%

(BALANCED) FUND

FRANKLIN

Buenos Aires

2.40, July 1, 1966

with

The
most

;

■

Town of

piece
attempted.

ever

their

quite clearly
inconsistent with and, indeed,
definitely antagonistic to

$30,000-,

«,

ambitious

Bond

UTILITIES FUND

INCOME

;

London

them

their great chance for remaking a
highly advanced nation of 66 mil¬

PREFERRED STOCK FUND
BOND

Members New York Stock

,

gave

there should be any
ever risk there
may

COMMON STOCK FUND

.

—

..

Japan)

^ ^

a

••

to., be

.nc.

A Mutual Fund

V

and, accordingly, it may be too content' v/ith
manipulating:'
much to expect
any one in authority really to do anything the functions
afeout "inflation"—except talk^ of dpurse. The Administra¬ o f,j their
tion ip Washington is committed to
Society by,
(policies "Which preclude gentle
p r e s- •—
effective anti-inflationary action, and
accordingly, only the sure and
un-understanding, the naive, or the perennial optimist could repetitive
possibly expect action which could reasonably be expected exhortation,
Moritz J. Bonn
until the unto put the nation on a sound
J
>
monetary or credit standing.
conditional surrender of Germany
The only thing surprising about either the recent
increase
(and later of

v

Funds,

r

election year

an

'

Sold

u

p1 a n nets.
hitherto ' had

More
is

Al¬

Franklin Custodian

;!

SECURITIES

—

d

!

(Internal Issues)

Botight

n

plann 1 ,n g.
Western

of the steps thus

Q
by

has .* ;-;

able: to

1 g e f in'
structural

most

duction

gov¬

ernmental

for

course, is
because
pro¬

en¬

as

present

i

•?'..>Russia

■

of

private

e arc

s

largement lot

;

currency reform inaugurated in Germany two months ago
bold attempt at decontrol. It aims at
making Germany a going/

'

-

This,

d

e

P^o j ects

Two

a

goods

F

-

is

available sup¬

urged

'

aid

jlit? Htev' temarks

The

of cheer

waves,

'■it:

more-; than

'

na

durable

re

stated:

,

d

and

Truman

.

to

tional security

President

'

concern, and at rescuing her from: the torpor in which she has sunk*
heartily in accord. : The various factors since the Potsdam Plan, r Planning can be structural or" functional.
>♦>-

am

'

stressed

cX

potential.

program; '

there; have been' periodic

years

viewpoint I personally

so

.

:4

the business situation. * Some of our economists
the end of the boom is not yet in
sight, and with this

in

scientific

'

By DR. MORITZ J. BONN

;

A Formerly Adviser to Germany on
Reparations

about

gloom

meeting

.^.Washing¬

Can Planners

i

Advertising,

Company

shortages and ECA

I'-;/

now

ton.

Industry

■

Amer¬

ican Association for the Advance¬
ment

and

in

,vT:v y-<,*->■■

■■

Copy

a

Former German economist attacks Four Power
planning*under Pots- :
Ford executive, though predicting sizable business recession at some rdam Agreement and ascribes difficult economic conditions in Ger ¬
future date, forecasts a strong seller's market in lower
priced cars f
many to policy of drastic de-industrialization i and isolation by
for two years or more.
Deplores unfair dealer practices in present i ^ Russia of Eastern zone from rest of
Germany. Describes currency
car market and neglect of
proper relations between dealers and cus- '
r*
reform in Allied zones of Germany and holds its failure to
bring
tomers, and warns there will be retribution and difficulties when
about German economic recovery arises in part from
j
continued:; :
buyer's market returns. Blames backlog of production on materials ;
policy of "dismantling" in order to reduce country's war

study

more

and

'.-y-;?;

Vice-President and Director of Sales

;

For<* Motor

activities should aid pri-

own

Price 30 Cents

Pitfalls of Seller's Market

Science Research
6

Y., Thursday, September 16, 1948

Chicago

Columbus

-

(orporatkxi

1896

40

120 Broadway, New York 5

Denver

Toledo

IRA HAUPT & CO.
Members
and

Members New York Slock Exchange

...

CLEVELAND
New York
Cincinnati

Est.

Exchange Place, New York 5, N.Y.

New

other

111

Broadway, N. Y. 6

WOrth 4-6000

Buffalo

Telephone

REctor

2-7340

Bell System Teletype NY 1-702-3

■

■*r-r

—r

t

5'

A

"

Boston

York Stock ExchangePrincipal Exchangee

Teletype NY l-2708

Telephone: Enterprise 18291

Appraisal of the Rails

A Mid-Year

Federal Water & Gas

'

Alabama &

By EDWARD H. TEVRIZ

.

Southern Prod. W. D.

Department, BJyth & Co., Inc.

Manager, Railroad

Southern Nat. Gas W. D.

Thursday, September 16, 1948

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

(1098)

2

Louisiana Securities

contends earnings of railroads, based on current levels of rates and costs, warrant
railroad securities. Reviews outlook for the rails both, under war condi¬
and under normal peace operations and concludes favorable aspects justify reasonable optimism

Railroad analyst

continuation of confidence in

Fed. Water & Gas Stubs

tions

bonds.
With the numerous changes that have taken place in rapid succession during the past
two years as to rates and operating costs, including wages, a need has appeared to clarify
their effects for investors. The following study with respect to the current outlook of the

BOUGHT—SOLD—QUOTED

well

rail equities as

on

v

Bought—Sold—Quoted

of their bond issues, particularly contingent interest

as on many

; v

-

New York Hanseatic

Corporation
York 5

120 Broadway, New

Teletype NY 1-583

BArclay 7-5660

in-

railroad
d

t

u s

r

July, compared with a

taken, and an
attempt made
to

Lonsdale Company

answer

broader

course

Bought—Sold—Quoted
Request

Prospectus on

of this

trends

ffipONNELL&fO.

d

Members

New. York
New

120

;

and

of which
Edward

have not been

too well

Among them are

licized to date.

Tel. REctor 2-7815

Tevrlz

H.

pub¬

the favorable trends

evidenced in

non-commuter pas¬ compared with $225,000,000 re¬
ported net ol last year.
senger business, the high rate of
Based upon incomplete returns'
current freight movement, as well
for July, the indicated upturn of
as the distinctly, satisfactory levels
of^ "earning; ppwer" of the injdus-- $40,000,000 to $45,000,000 in the
net
operating
income
try on an annual basis, under month's
present rates and

operating costs.

promises

an

additional

With

and

Chicago Stock Exchange<

seven

York 6

even

LAMBORN & CO.,Inc.

1944.-1945

the

road

Such

spite
coal

SUGAR

records. For

gains

-

were

.

.

,

recorded de¬

the adverse effects of the
strike and severe weather
in large part the

reflected

granted

boosts

to freight rates and in-

as

lares during late 1947
early 1948, as well as in¬
creases in
charges for mail, ex¬
press
and
other transportation
services.
In this - connection, it
should: be noted that not all of
passenger

Exports—Imports—Futures

and

DIgby 4-2727

fect

Sold

BANKERS BOND ™

Floor, Kentucky Home Life Bldg.

KENTUCKY
Bell Tele. LS 186

Each

major
Established

creases

1856

income

Members

York

Stock

in

net

York

Curb

rail¬

I

railway "operating

operating

ex-

Exchange,

Board

Chicago

volumes

traffic

over

the foresee¬

able

demand

augurs

for

iron

and

steel

for sustained heavy move¬

Canadian

„

Mining

Canadian

Cotton Exchange

CHICAGO

DETROIT

GENEVA,

4,

Securities

British

South

Banks

J

SWITZERLAND

—

115

5

BROADWAY

Telephone

BArclay 7-0100

*

\\,:o*

request;:

New

York

Security

Dealers

50 Broad St., New York
Tel.: DIgby 8-0460

Assn.

4, N. Y.
1

Tele.: NY 1-1872

BUY

S. SAVINGS

U.

BONDS

NATIONAL BANK I
of INDIA, LIMITED
the

Bankers to

.

; ;

in

|

-

Government

,

Kenya. Colony.and Uganda

(

-

Office: 26, Bishopsgate,
London, E. C.

Head

■■■■■■:■

'■

j

India, Burma, Ceylon, Kenya;
Kericho, Kenya, and Aden
f
and Zanzibar; -.<?
*

in

Branches

Colony,

dered rby

the heavy volume of pas¬
and, freight movement only
in the latter stages of the war.

senger

There has been

one

£ubscribcd. Capital-

to the roads'
place since
the end of the recent conflict. Ef¬
that has taken

£4,000,000

Paid-Up. Capital—

£2,000,000': |

Reserve, Fund——

,

£2,500,000

•

"

distinct bet¬

terment with: respect

status

•

J

*
The

.

'

,

Bank

V4

,

conducts

every

*

<

i"''

;

Oct., 1; 1946 ;(toy the sor
called Boren Bill), "Land Grant"
rates for the
transportation of

;

Trusteeships and Executorships
also

undertaken

>

of;

description

banking and exchange business

fective

-

,

f
' i

Furthermore, with

territory),

own

African

Securities

';

Principal Exchanges
Teletype NY 1-672

on

Imperial
Oil

and

gaso¬

Bought—Soldr—Quoted

private automobile use
unquestionably
be swift

severe,

so

mushroom

exceed

that railroad pas¬

would

again

the

peak

to

inevitably

duplicate or

volume

;

the

Charles King & Co.
Members

figures

prevailing in 1943, 1944, and 1945.
With

Rights

em¬

for

would

NEW YORK 6, N. Y.

.

-

oil

HEIMERDINGER & STRAUS
Members

by i n.t e r e s t-savings refunding
operations.. Because of their heavy

line

and

Members N. Y. Stock Exchange and Other

PITTSBURGH

"v,

^

Data

able discounts for cash) and later,

from, our

Goodbody & Co.

Bldg.

N. Y. '




Silver Creek Precision,;
j

maturity and open-market repur¬
chases of funded debt at appreci¬

senger;! traffic

YORK

Common & Preferred

Conditions

bargoes and restrictions

And other Exchanges

NEW

Security Banknote ',■<

Railroad Outlook Under War

national demands for oil
during any war period (accentu¬
ated by any need to carry on mili¬
tary operations at great distances

Inc.
;

i

urgent

Industrials

Canadian

New Orleans Cotton Exchange

N. Y.

Greer Hydraulics

Program (Marshall Plan);

mercial rates.

Trade

of

preparedness policy and

ments of coal and ore, (4) the
military and government "goods
huge unfilled orders for automo- have been eliminated and the
government now pays full com¬

h

Exchange

York

,

only are the earnings re¬

We Maintain American Markets For:

Exchange

Cotton

class

after

(net

Exchange

New

all

carrier, without a single
exception,
disclosed
in¬

^

New

Commodity

Not

20.1% over the 1947 fig¬ able future.

H. Hentz & Co.:

New

j

1

period; thus,

ure,

Incorporated

Long Distance 238-9

seven

Foremost among the^
while the rise in July oper¬ factors contributing to this 'expec¬
ating revenues is estimated at be¬ tation are the following: (1) thetween 18% and 20%; thus, the bumper corn crop—the largest on
cumulative increase for the seven record, (2) the large wheat harmonths
would
be
indicated
at vest—second-largest: to; the 1947;
12%-13%,
record,- (3) the continuing insatij-

ways was

2,

entire

for

revenues

JLOUISVILLE

a

1948, to an even greater extent 1948—seasonally, the more
(barring any sudden and sharp tant months of the year. This out¬ with respect to heavy excess prof¬
traffic slump—now unanticipated). look is based, upon the forecast of; its
taxes; such high taxes siphon¬
The aggregate gain in- June gross a
continuation of present high, ing off the huge earnings engen¬

Bought and Sold

1st

under

capitalization,, thef roads were; in
impor¬ a peculiarly favorable position

Standard Oil Ky.

m

expected

gains for
the- like

higher rate levels now pre¬ sults recorded to date encouragr
vailing should exert a favorable ing, but prospects appear bright
influence over operating results lor continuation of such earnings
during the final five months of gains over the final months of

Stock

and

the

for

a

the

Refining Co.

Common

by

Forecast—Balance of Year

in ef¬

these increased rates were

Bought

supported

be

During recent; weeks; security
months over
markets have at times, reacted
period. There remained, how¬
markedly to the tensions betweerf
ever, not many more than a hJndour country and Russia, with re¬
ful
of roads where the* seven
spect to Berlin "and the Germaq
months'
net
operating- fhcome
question,; as well, as; broader J5u?
failed> to equal the-1947. perform¬
ropean problems. In the unhappjt
ance, including the following ma¬
event that hostilities.: are, com-jor roads: the New York Central,
menced (this possibility must be
the Chesapeake & Ohio, the Vir¬
conjured with as a short or longer
ginian, the "Milwaukee," ana the
term; potentiality
flowing from
Northern Pacific. Considering the
present as yet unsubsiding ten¬
narrow
lag. existing
(in most
sions), the railroad ind ustry
cases) between these two years'
should be regarded as one that may
results, and the further upturn
benefit therefrom perhaps more
anticipated as to August results,
than many other industries.
Im¬
there is oasis for the expectation
provements, to this-industry's basic
that -even in. the- case of these
financial position in World War II
roads, net op e r a ti ri g income
need only be cited to bring this
through Aug. 31, will have caught
to mind. War-swollen traffic en¬
up
with or even surpassed the
riched the carriers' treasuries and
comparable 1947 aggregates.
led to sharp reduction of debt and
fixed charges via retirement at
the

conditions earlier in the year, and

Raw—Refined?—Liquid

Ashland Oil &

well,

larger expenditures for armaments

1947

showed gains in

gross revenues.

NEW YORK 5, N. Y.

in quite

the cumulative totals to

months, each major
cumulative

the first seven

STREET

WALL

99

number of
instances, to convert decreases in

make

York 3

-WOrtlL 4r587S

jEipaliyiVthe whole 'structure ma

gain, (of

during June and July were

sufficient,

distinctly pleasant
reading. With only a single minor
exception, all: of the major car¬
riers disclosed increases <in their
monthly total operating Revenues
compared with the likef '1947 pe¬
riods.
Indeed, total revenues of
class I railways established new
peaks for each month, surpassing

Tele. NY 1-1610

DIgby 4-3122

come

months of 1948, recently re¬

Broadway

; New

Months' Earnings charges for all the roads. As to
by. increasing ; shipments, abroad
June the various individual' carriers, the unc^er- the .European Recovery
increments in net operating • in¬
well as, for the first

July, as

leased,
39 Broadway, New

120

in

peak

new

a

Frank L. Hall Co.

an

on

Earnings for the months ,of

New York Curb Exchange

branch offices

Securities

June, 1948, little abatement in the
present rate .of general economic
activity tan riow,r be- foreseen,

July and Seve.il.

Exchange

income,

personal
basis, at

annual

income after

like amount) for net

Members
New York Slock

our

Over the Counter

pacity

of pre¬

the volume of

Joseph McManus & Co.

to

manufacturing output at ca¬

levels in most durable
accruals, reported goods lines. Not least in the eco4
to have been in the neighborhood nomic picture is the definite pros-j
of $30,000,000. Including the lat¬ pect that the construction indus4
ter, June net income for all class try will continue apace at around
peak levels, particularly in the
I railways has been calculated at
about $94,000,000, versus $44,000,- building of family dwellings, with
the
dissipation of the housing
000, in June, 1947; the first-half
aggregate net income thus has shortage not indicated before midbeen
indicated
at
$259,000,000, 1949, if then.

veloped,

some

Stock Exchange

York Curb Exchange

BROADWAY, NEW YORK 5

*

e

wires

Direct

months'

vious

were

analyzed

.

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

improvements!

capital

NY 1-1557

HAnover 2-0700

New Orleans.

public

ward

i-y, appreciable

the crediting therein

and

and;

data

and

.

St., New York 4, N. Y.

utility
eiteroriscs
(transmission lines for telephones;
electricity, and natural gas, etc.);
alF of these should cohtribute to4

reduction in the unem¬
ployment tax rate from 3% to J/2
of 1%, retroactive to Jan 1, 1948,

review, cer¬
tain
basic

and locomotives),

York Stock Exchange

New

25 Broad

(5) pressing, needs for equip¬

for

part the

the

In

equipment

passenger cars,

cases,

reflected

counts

ques¬

tions.

ment

railroad

year .ago.
these were of sub¬
amounts.
The June ac¬

some

stantial

the

of

some

and

In

under¬

thus

Members

equipment,
(freight and

and rents but before
non-operating income or fixed
charges), during both June and

biles and trucks, farm

penses, taxes

was

y

Steiner, Rouse & Co.
:

<£"

'

increased rates now in

(Continued on page 28)

~

61

Toronto

Broadway, N. Y.
Direct

Stock Exchange

WHitehall 4-8980

wire to

Toronto

ypllime" 158'

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(1099)

3

.Hi',*"1

•

•■•■vy

Number 4734

I NOEX

>.

c.-i.

'C.

''V

'■

,•

Articles

'

anil

,;!

•

News

/

By ERNEST JELLINEK
The Currency Reform in Germany—Can Planners Plan?"-'

,**/' —Moritz Jf; -Bonn_ 1__11_'l____

_

_i"_ 1

_

.^'-"'X

'

___€over

Pitfalls of Seller's Market in the Automobile Industry
-1'
—J. R. Davis——i—---.
.___"*^Ccver
-

A

-

-

Labor's

Economic

4

.

Municipal Bonds in the Bank Portfolio—I. A. Longl________

J:; present share prices. : Says

6
6-';

What Will Happen to Taxes in 1949?—Larston D. FarrarJtii

'

' *

•

GOLDEN JUBILEE-

PHOOEY!

ignored by stock market. Asserts possible future setbacks in business ..activity and deflation have
already been fully discounted by

Dilemma-—! van;Lr>:^^i;>£$r

The Upward Trend of Bank Earnings—Frank L. Elliott_-_J._

*>;

J; large backlogs in heavy industry, and inflated dollar, have been

y

3 •;

>

^

& Stanley

Market commentator maintains likely continuance of
high earnings,

v

-—

Mi^-Year Appraisal of the Rails—Edward H. Tevriz_l„_,_u; 2

Prudent Bui] Market Ahead!—Ernest Jellinek-:-l_-____._.L

'Resident Partner, J acq u in, Bliss

5

zation of

;

The Housing: Situation and Government Policy

;

previous

any

pre-war

you've

-

period.

Six

•

4

.

Deflation Not

Likely—Lewis PL Haney^._i_iv_^->
9
If I Were a Retail Salesman—Eugene JvjHabas^iX-liiriiCt9it:'i:12.
What to Do About Russia—Norman Thomas_CC'ALuri«TiAiit-.l5
What John Qr Puhlic~lShinrtd~Do^—Roger W. Babson^^iiil" 17

-r't\

Truman Emphasizes

defence^ Rjpsearch^

you'll

really

:

since

Farmers :

_i

Rukjeyser-SEC issues Survey on Investment Companies-_-__-!!i____^.18
:>HQ.w^Can:;iP:Be?;#jC.6rr^
(Boxed)

'

jhr ices

have2

period,
have

nored. The

Jellinek

Ernest

will be

and

perma¬

Since record earnings and the
largest dividend distributions "in
the history of United States in¬

realize;; that

far different from 1939. The
non-recognition of our new dollar

is

earnings

higher dollar level
permanently

now

large

earnings

are

therefore,

of

regarded

1947

stock

Still

and

ing

for -steel as well
craft, oil equipment,

living (due

as

hipnt and building -industries^

mulU-billibn

dollar- utility

with

orders

higher

be -filled," appear I $p
be at least 18 months away. Pro¬
duction of this type of durable
goods should offset any possible

larly represent
chasing power

Regular Features
As We See It

simi¬
pur

¬

investor

Stocks

was

only segment of the .capital

19

Coming Events in the Investment Field

productive output should produce

upward to come into proper

war.

T5

Washiugtdir

;

f

Batgero hi A
1_J

12

l___

NSTA Notes !___

»

»,5

i___

^

23;^

Prospective Security Offerings. J_

Railroad

38

Securities:-—..-J—_____!

Public Utility

Securities

;

.20

factor

18

>

Securities Now in Registration

new

of

36

Washington and You

S

40

trend, i

pated in the inflation of our

in

fall

boo"

value

deflation

of

stock

Drapers'

Gardens,'London,

E.

C.,

Eng-

York <1-1434

Con¬

ac¬

tivity remains at a high level and
political climate becomes more
favorable. Statistics sharply high¬
tremendous disparity
the performance of the

the

of

the

other segments

and

States'

United

times earnings.

Circular

on

request

,

George Birkins Company
40 Exchange Place, New York 5
WHitehall 4-8957

Tele. NY 1-1404

The abundance of grain

commodity prices near the

logical

if business

rise

,

23/4

10-year dividend record.

gov¬

Trading

ernment

"bug-a-

are

Selling
■?

support, level. A reduc¬
price of meat and poul¬
try products should set in about

Specialists in

All

tion in the

econ¬

occur.

prices

Capital Stock

„

will bring about a stabilization of

the

between

1

the

should

stock market
Published Twice Weekly

culture.

omy-and thus cannot logically be

light
Not available this week.

New

•

|

.

Ouf cbrn crop for 1948
largest in,history, and
our wheat crop will.be,the second
largest in the annals of U. S. agri¬

may

produces
a
general
Stocks have never partici -

'

-

will be the,

determined by a mass
individual influences,- whose

candidates to

'6

Tomorrow's Markets (Walter Whyte Says)

St., New York 5, N. Y.

2-4930

new

picture.

a

are

versely,

36

The State of Trade and Industry

M

by

Expected' to sh ow'any: appreciable

£fvy

—

Securities Salesman's Corner

*

ac¬

turned

aggregate

Governments-J

on

be

single new
The introduction of

development.

results

Our Reporter's Report

Our Reporter

course

can

*

and important factor has
been' introduced in our" economic

A

business cyc]e.and the stock
neither

high level!

a

temporarily
change the flow, but the eventual

22
___

property

market are'like' tides in their

a

11

News About Banks and Bankers

Observations—A. Wilfred May_.

The

from their

33 1

•

other

tions and

Indications of Business ActivityMutual Funds _!

with

sound state of business and per-

a

values in the United States,
v

Einzig—"Revaluation of New Zealand Pound".
Front

QUOTED

mit national income to remain at

alignment

8

•____—___r

-

I Leonard
Refineries, Inc.

.

The result of such changes in our

move

11

Dealer-Broker—Investment Recommendatipns

.REctor

decline in demand for soft goods.

received before the

and

Securities

SOLD

com¬

altered situation, are stock prices,
these prices must eventually

31

-

six

after

months

UPSTATE

of

the. harvest

feed < grains and check the rising
cost of living, With the end effect
of leaving a larger total of pur¬

NEW YORK

SECURITIES

chasing power in the hands of the
public.
The
period
of
falling
should

costs

food

with

coincide

expiration of the last major
series
of
wage
contracts
and
thereby reduce the chances of a

GRODY & CO.

fourth round of wage demands or

40

the

will hold

such; pressure to a mini-

Members Natl. Assn. of Securities Dealers, Inc.

Exchange Place, New York 5

DIgby 4-3280

Tele. NY 1-2698

1

An outright break in the
(Continued
19) «

pium.

monetary

;

„

and, c/o Edwards & Smith.

COMMERCIAL and

The

Copyright 1948 by William B. Dana

'

Company...VVr.

financial chronicle
R^g.

S.

U.

Reentered

Patent Office

IflLLIAJf 15. DANA COMPANY, Publishers
*

Park Place, New

25
2

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> "
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t

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York 8,

the. post

under

the

.-y

matter Febru-

second-class

at

office

at

Act-of.•> March

Subscription Rates
Subscriptions

SEIBERT, Editor & Publisher

f. WITLIAM JPANA SJEIBERT, President

Possessions,

United

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Canada,

Other

WQ,L]AM D. RIGGS, Business

in

Territories
of

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U.

Other

1 Every Thursday /general f news and ad¬
vertising Issue) and every Monday ^com¬

$25.00

plete statistical issue —^ market quotation
records, corporation news, bank clearings,
State and city news, etc.).

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Other

Chicago

Offices:

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111.

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S.

(Telephone:
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Salle

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ner

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year:

per

in

Monthly
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Earnings
year.

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Monthly,

(Foreign postage

of

account

of

the

eytra.)
fluctuations in

exchange, remittances for

for-

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he

made

in

New York

funds.

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v..

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135 S. La Salle St., Chicago 3

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(

•

• •

Teletype—NY 1-5 V

\

Boston

,

Tel.:. FINancial

-

Glenr. Falls

-

*

2330

*

Schenectady

5's at 48

Corp.

51/2's at 54

Vv/*hfH

nr....

Members New York Curb Exchange

>.

5treet, New York 4

Yt.>-./Tel.: HAnpver 2-4300
Albany

*

•

Central States Elec.

■*'' ''

l

Spencer Trask ,&; Co.
Members New Yor}f Stock Exchange

,

the rate

St.,

0613);

postage extra.)

Record

;

■

'1

PREFERRED STOCKS

year.

Publications
(Foreign

WANTED

I Central States Elec. Corp.

;

Quotation ! Record—Monthly,

year.

1

of

Countries, $42.00 per, year,

Bank

OFFERINGS

]

High .Grade Public Utility and Industrial

S.

Members

*

Thursday, September 16, 1948

offerings of

-r..

States,

and

We are interested in

New

■

1879.

1,

R Y.

REctor 2-9570 tp 9576
■ y.y y> ■« y
.
J,-

HERBERT D.

as

25, 1942,
fork. N. Y.,
*ry

.

Oivis Brothers & &.
14 Wall

can

markets that has not reflected the

14

;___

Business Man's Bookshelf

Canadian

the books of such

on

The

i.Cover

BOUGHT

..

day when the present list of.

panies

than

'Editorial)

Bank and Insurance

the

to

The

com¬

increased

no

■

structiour program has been ham¬
pered by inadequate steel supplies.

parer! with 1939 earnings. Present

24

:■

Utah Southern Oil

con*-

22

payments,

'

Mackinnie Oil & Drilling

The

23

dividend

1-714

Equity Oil

equip-

Ethiopia Borrows $300,000 from jMonetary* Fund

as

Broadway

^ Empire State Oil

air¬

the

rail

NRPGA Reports Retail Profits Receding.

profits

.

backlogs in industries dependent

inflationary trend) has left
corporations with the same in¬
come/in real purchasing power
1948

1

a
tremendous portage pf
which
has' created
large

steel

to the

their

1908

2-4500—120

Bell System Teletype N. Y.

outlook for

not

j Increase in Retail Sales_!i__i_____

■Seasonal Stock Price Trends Discussed by Cleveland
Trust Co.
_J

Established

REctor

upon this commodity.
The auto¬
motive corporations' are clamor¬

ous

rise in the cost of

Pfd.

by internation¬

the

are

takes

one

caused

scares

£hould not blur the

purchasers

however,

^when:

&

Finishing Com. & Pfd.

Members N. Y. Security Dealers Assn.

normal/gopd^

transitory

as

Corp.

J.K.Rfce,Jr.&Co.

al problems appear -to * be. fully
discounted gt present price levels.
It is-possible "that today's economy
of shortages may be
supplanted by
pne of adequate supply, but this

a

5

Corp.

any

pre

abnormal

22,

Com.

U. S.

dustry, have Apt been shown to

deal¬

are

Fire, Insurance

United Piece Dye Works

160%

i

National Industrial Conference Board Reports Large

Requirements

than

moce

Possible, Setbacks Discounted

;

reaching

time to' realize that the tremend¬

Reserve

increased

Fire insurance

Federal Water i& Gas

same

corporations

stant

have been wary.
These profits,

Federal Reserve Board Increases Member Bank

nf

dollar and expense dollar of 1948

and,

21

greater. ; In this

earnings

S.

Texas Gas Trans.

per¬

ing with a new dollar; the labor
dollar, commodity dollar, budget

1948

<21;

U.

stock prices are only 18%
above their 1939 level." !•. .V
!

far

k

160%, and

nose

appreciable degree in current
Stock prices, any temporary eco¬
nomic setbacks as well as con¬

The

21

__[

YORK

NEW

WHitehall 4-6551

Phoenix

while

re-

suits ,- of . this
f i o o d ; o f
money

:

of

First Boston Corp., in Study pf U. S. Securities, lipids Gov¬
ernment Financing and Credit Policies Gave Impetus to

J 68%

was

^ almost

imbedded in corporate operations.

19

liar]Warns Banks to Maintain Adequate Capital____

Postwar Inflation

■

:

Concede that

__L______ 20

_______ _

expenditures

}s outstandingly apparent in the
stock market.
Investors will not

Better Living Depends on; gtrehffi^ening Rree Ecpnpinio-.
Society,SaysMerryIe S.

Light!

to

infla¬

past

sonal spendable income after taxes

■we

_

this

,

nent.-We must

Export-Import'
.NYSE Selective Servicer Registration' Facilities Enlarged!-,-- 17 ;
AID Announces Registrations 101* Evening .Glasses i;'£$£ht£2'2.17
Investment Analysis Gpyrse at
[Trinity University! San "•
Antonip, .Texas. _____^ _i
!_•!JL__!!_!__.:!!! 1.!'17-'f

during

economy

completely ig!

,

■

NAPA Predicts "New Look" in

something

STREET,

Telephone:

tionary decade.- From 1939
to
mid-1948 the money supply uf the

is

con se¬

been

ss;

_

More

°

country increased 163%, personal

quences

j___:!_-'l4^

London Stpck Exchange roffjcialj Vear-Bookf
Issuedj--^
Secretary of Labor Maurice Tobin Denounces Taft-Hartley'
Act and Urges Increase in Minimum Wage_ _'i 1 i'__1 ~-ZLl 16
Peiveese W/PeWitt XJr^es Savings and Loan AssociationS /io H

pur.

supply
1939

its

as

r_;A'__

WALL

99
'

.

accepted as a
fact. However,

Power■
Curtail Real Earnings of Oil7 Companies,
According;fM??
■${ Study by Joseph E. Pogue and Frederick', Coquerop__^crti3 ;/;
Senator J.. Howard McGrath Says Congress "Double-Crossed" 'i;
-

rupling of
money,

Soviet Pressure Opposed by Bryn J.:
Capital Needs and Decline in Dollar's Purchasing

'

.

have

Obsolete Securities Dept.

The quad-^-

Defense.^ Aidi^iCpvir,^
\ \ Horwath & Horw#th.Analyze v 19:47 - Hotel Earnings, *
v^'Vtt'» | f Page VIII of Pictorial Insert
Ji

-

.

.

as

put them on
Central
Palace.

celebrate!

economy.pf .the United .States has under¬

gone

The

old

as

City—don't

at : Grand

Exchange them at Lichtenstein's for
sqme
crisp
new
dollar
bills—then

v

tremendous changes and in many cases people have npt
recog¬
nized the. .impact that these new factors will have in our
future
daily life:
•.
• >..
.V
v"

securities

got

York

display

present soft spots will end in stabili-

production rate higher than in

J;r ln the past decade, .'the

If

New

„

C. E.

Unterberg & Co.

Members N. Y. Security Dealers Ass'n
61 Broadway, New York 6, N. Y.

Telephone BOwling Green 9-3568
Worcester

MV

1 .1

|

Labor's Economic Dilemma;flj The
* * *'

vi1
/

Economist

contends

(1) complete freedom of production; (2)

about price! stabilization through:

inonbpoly' abd price fixing;

current

desire of every laborer to gain more of the things he wants. These
each individual worker make up the combined wants of organized
Labor-leaders give expression to these wants by demanding higher wages, better

It is the natural

k i n

r

o

w

d i

co n

„by limiting.artd regu-

and
r

1

t i n g

a

of

each

goods when prices
It seems evident from this

rise.

and
work

kind

on

for

demand

the

amount :.
*

economize

to

consumers

their consumption or find substitutes is one of the most powerful
economic forces
in limiting the

hours

universal
organized

statement of the
tendency of buyers that
brief

-laborer

to
;
'

their

needs,

for

more

do." '

new

items, together with ex¬

expense

increase in

seen

reserves

temporary.

as

%

;

point of view the most important thing that
should be known about the New York banks is that their earnings

buying

and

may

even

destroy

power

their jobs.

■;./

.

,

are trending upward.
The 10 largest New York banks which report
operating earnings semi-annually showed an increase in aggregate

! '/'/'

<?>-

the

At

current
present time, when the n e t
living are very high in operating
comparison with
prewar
costs, earnings of
labor Organizations ajve asking for approximate¬
increased wages vto meet the in¬ ly 10% in the i
six
creased costs of living. The motor first
costs

six months of 1947 than they were

of

permitted' labor in any industry should seek
Mo help its members gain more of car industry furnishes a
Do< these 'the things they want by reducing example/ There is a large

''isr
!

levelling-off of

From the investment

"

tions,) of

shorter

/

Holds high Tate of improvement in >/

operating earnings.

loan income and

C

,

-

pected continuing upward trend of interest rates, make increased
bank earnings "a mathematical certainty." Effect on earnings of /

desires and wants of
labor.

& Curtis

marked rise in net

Mr. Elliott cites Reserve Bank data showing

of all
and (5) /fee enterprise and opportunity tinder law for Ml.?
(3) sound money and fiscal policy; (4) eradication

V

7

By FRANK L. ELLIOTT
Research Dept., Paine* Webber, Jackson

;

higher living costs, should turn their activi-

instead of asking higher wages to meet

possible efficient production;

fullest

Upward Trend of
Bank Earnings .

/

points out fallacy of labor insisting on higher wages which lead to higher prices, and
this wage-price spiral is not in interest of laborers, management or general public.

ties toward bringing
?

ivan weight

that

Holds unions,

J

'!

Thursday, September 16, 1948

CHRONICLE

FINANCIAL

COMMERCIAL

THE

(1100)

4

months

good

-

1948

accu¬

in

1947.

six months of

.the first

persistent

but

moderate

-A

up¬

net, current operating
earnings before income -taxes has

trend'in

the

maintained-. for

been

of;

year

ended June 30,1948 and this Im-

com-'

proyertfenfc /is increasing bo/h in/
with
the costs of production and reduc- mulated demand for motor cars. pared
rate and amount/!;//; ; r;•///
/•;
of ing prices. • • Increases in wages Wages and other costs of produc¬ the first six
of/I richerfhit; six YhbM
o.rg a nized which inevitably- result in higher tion - hiave increased for beyond months
/coiftparecT "With"/ the "first six:
labor ga;n for costs and prices in any industry the capacity of labor and manage¬ 1947. Based on"
months of 1947, total current op¬
the * working may reduce the buying power of ment to increase the efficiency of past 'experi¬
D*. Ivan Wright
erating
income/ increased / $1'1J5
;m a n ~ t h e labor instead of gaining for labor production»and turn out volume ence-the re¬
million or 5.1 % to a tiew semibuying
power.
In¬ production to meet these in¬ sults enjoyed1
i
things
he increased
^afrnual post war peak. This in¬
Consequently, the by this impor- $
*wants? What is it that the work- creased costs may reduce or even creased costs.
crease
in total current operating
ingman really wants? - He wants destroy the demand for the prod- prices of motor cars have been tant sample of*
income resulted from a continued
Frank L. Elliott
more wages
because he wants to ucts of the industry.
Competi- increased in proportion to the in¬ the New York
increase in other income and an.
tive products and substitutes will creased costs of
production. Fur¬ banks;:'i s
buy more of the goods and serv¬
demands. ther increased costs of produc¬ rather * closely indicative of the increase in loan income which,
ices available to him and his fam¬ supply the consumers'
On the other hand, the worker's tion, whether in increased wages results
enjoyed by the
whole was more than enough to off-set
ily when he has the money to pay
the decline in income from invest¬
for them.
But are higher wages wants in an industry can be met or taxes, will force still higher group.
d

e

n-'d sj

m -a*

the part

—xn

*-

■

'

♦

~

.

the

best

get the buying
things he wants?
Why does he not demand lower
prices so
that the
wages
he
already receives will buy more?
The wage earner knows that in¬
creased wages add to the cost of
the
article
produced.
Higher
wages must
re suit
in higher
prices if production remains the
same.
Higher, prices reduce the
buying power-of wages.
More¬
over, iL the prices of one line of
goods are increased because of
higher wages, the mass of workingmen in other industries and
.trades

tne

have

who

ciency of production and by pro¬

ducing more per worker, per day,
per
dollar of wages, thus
enabling the industry to lower its

and

Increased wages will have to buy
jless of these goods. These rejduced purchases, because of
higher prices, must bring on re¬
production and

duced

unemploy¬

ment in the industries which have

their costs and prices
aboye the ability or willingness of
consumers to
pay for the prod:;hctS,:'v;''^
jaised

1

The prices of goods are made
by supply and demand. No mat¬
ter

how

may

well

be,

established the

well-known

for

mand

an

and

costs

consumers

The pro¬

prices for motor cars.
duction

motor

of

-

has

cars

the

price problems as any
industry.
Competition and

other

to increase their buy¬

extensive

catalogue
of
wellof motor car com¬

names

In addition, these panies and suppliers who are no
will en¬ longer in business. Do you think
able workers to buy more,of the these manufacturers went broke
things they want wiin their on purpose?
What would, the
wages.
■
"
HU
stockholders do to a management

the

industry.

reduced costs and prices

-

All increases in wages and other

paid by the workers and

costs are

who

went

there

out of

was

business -when
for
the

demand

a

Re¬

operating* earnings before
taxes of the 35 central
reserve 'New
York City banks.

figure reveals the
same up-trend in earnings as our
representative sample banks and
the rate of improvement indicated

This complete

the costs

When

consumers.

any product have
been increased above the price at

de¬

articles

The capacity

producing

Expense Rise Moderate
Total

:

increased only
2.47o so $8.0 mil¬

expenses

$3.3 million or
lion of the $11.3 million increase
in total current

operating income
through to net cur¬

carried

was

rent

earnings

operating

before

of the

income taxes, resulting in the in¬
crease of 9.2% referred to earlier

of New
York concludes its comments, on

improvement in loan income has

is very nearly the same.
The September Review
Federal

Reserve

Bank

It is

significant that the rate* of

Central Re¬

continued to increase sharply but

City banks of New York in
the first six months of 1948 with

that the rate of decline in invest¬

the

earnings

of the

serve

the following

statement:

have tended to level-off-

loans

income

combined

Total

products

The

has diminished and

ment income
expenses

"Subsequently, the steadily ris¬
at
profitable prices?
passing of motor car com¬ ing volume of net current operat¬
earnings
has
exercised a
panies and their suppliers is the ing
stabilizing influence on the level,
which the product will sell, that result of competition or ineffi¬
of net profits, offsetting to some
product will soon cease to be pro¬ ciency on the part of their labor extent the declining volume of
In this busi¬
duced and the jobs furnished by and management.
recoveries and profits on securi¬
ness the companies that can sup¬
such production will disappear.
ties sold and the initial chargeIt is only natural for producers ply the best products ait the low¬
offs to bad debt reserves on loans
to avoid the risks of unprofitable est cost price rand make a profit,
in the last two half year periods."
will live and keep on furnishing i
production v and seek outjfhe op~«
Somewhat earlier in the same
portunities in production where jobs. v Other companies will bej article the following statement
the

of

ments.

Bank compiles the net cur¬

income

with this industry can produce an
known

event the Federal

any

rent

cost

same

In
serve

mortality in this industry is prob¬
These reduced ably not exceeded by any othei
will encourage in the country. Anyone familiar

ing of these products and make
more secure
the employment in

increase in price will

discourage buyers.

prices.
and prices

costs

received

not

securely by increased effi¬

more

to

way

for

power

investments

and

creased

in

front

in¬

has

spite of decreased in¬

from Government bond

come

count.

Income

securities

has

the

increase

not

been

decreased

in

ac¬

Government

from

because

rate has

average

,

costs

less

are

and

a

margin

of

out

driven

business

of

and

their

profit more ■. secure. It is not al¬ employees will be out of jobs.
The accumulated demand for
ways easy for workers or laborleaders to see that

for

increased

their demands
may

wages

defeat

motor

cars

other costs the
too high. Wages
car
industry are

creased wages and

prices of

cars are

motor

the

in

perhaps

Mr. John E. Miller

will not last if by in¬

the highest for

in¬

any

appeared:
"The City banks also appear to
have kept a
closer check upon
'all other' current operating ex¬
penses

Their

than did the other banks.
control of operating

close

expenses

enabled the City banks
rise in net current

to show a 9.2%

enough

off-set

to

the

decline in the amount of Govern¬
securities

ment

have been

owned.

gaining

Banks

the roll-over

on

of bills and certificates at higher
rates but losing on reinvestment
of funds derived from called and

matured bonds and notes.*

instance

For

1V2 %

notes due

refunded with
and

a

$3.7 r billion
of
Sept. 15 will be
1%% note issue,

$451 million of partially tax

dustry in, the CpUntry. 3 5 While ^the Operating income before income exempt 21/2S due Sept. 15 will be
j)aid_pf£ Jn cash/ But frdrft heret
wage earners in this industry may taxes, a gain surpassed only by
onv.lfiings wirill .be ^different.for; a;
thinK : that- they can buy motor the smallest size banks." ./.
///
while at/least. On Oct.. 1. $2.3
cars at these prices, it is important
! The 9.2% increase in Net Cur¬ billion
of certificates and $4.1 bil¬
for
them to remember that in rent.
Operating earnings before
.

noted Market

Analyst

has

staff

joined

our

motor:

ment

at

duced
/

15 BROAD STREET,

mm

N.Y.5, N.Y.

iwmytm

workers

BRANCH OFFICES

SERVICE SINCE

.4 EAST 28lh STREET

'

525 SEVENTH AVENUE, AT

j

.

1899

To supply all the
workers directly; in the' motor car
industry

38thST./"9

57 WEST 57th STRET, AT 6th

20?\ BROADWAY. BETWEEN 72nd &

Atem'jers New Ydrk Stock

with

a

would not

car

require six months' production. It

':'\T

AVE.

a

in

cars

buy them.

can

'

employ¬ income taxes shown by the cen¬
must, be ? pro¬ tral reserve New York City banks
cost■ price > that the in the first six months of 1948
all other industries

order to have continuous

73rd S>.

is that great

Exchange and Other Exchangef

in

all

Compared

with

the

first

six

months of 1947 indicates consider¬

it is
significant that net
current operating earnings before

able improvement. However,
even

more

income taxes were 5.8% higher in

majority of workers

the first six months of 1948 than

who want

lion

(Continued

on page

26)

were

3.2%

higher in the second

bearing

all

1%

a

certificates. With the exception of

$571 million of 2% partially tax
exempt bonds, optional on Dec.
15, 1948, there is nothing maturing
callable until June
15, -1949
could not be reinvested/to
better advantage in today's mar-

or

that

ket.

in the last six months of 1947 and

other industries

ot notes,

rate, will be rolled over into 1]A%-

Investment Income

It

!

seems

Stabiliziifg

clear that investment
-

income should tend to stabilize in.

this

South Jersey Gas*

Art Metal Construction

WE ARE PLEASED TO ANNOUNCE THAT

in

Tenn. Gas Trans.

Texas Eastern Trans.*

Portsmouth Steel

now

Central III. Pub. Serv.
Detroit Harvester

is

Texas Gas Trans*

KANE

charge of

our

effect

/

♦Prospectus on request

Bought

—

Sold

—

•

.

NEW
NEW

44 WALL

YORK
YORK

STREET

Telephone: DIgby 4-7140




'*■''

^

STOCK

EXCHANGE

CURB

EXCHANGE

be

securities

investment

then

increased

will

loans

Goodbody & Co.

A*'.-,.

/

NEW YORK 5, N. Y.

Teletype: N. Y. 1-1817—1-1818

The fact

City

/-.• ;•••:«

*

the

Quoted

Pictkk 1*. McDermott & Co.
MEMBERS

of

If

full

the

income

from

translated

into,

greater total operating income. : /
/

'

occur.

stabilizes

income

of

amount

owned should

UNLISTED TRADING DEPT.

'

in

decrease
•

GERALD F. X

period and possibly even in¬
unless art unlikely large

crease

Members N. Y. Stock Exchange and
115 Broadway, New
Telephone

York

BArclay 7-0100

>

Other Principal Exchanges

105 West Adams St., Chicago
Teletype NY 1-672

central

banks,

Federal

decline

that

as

Reserve

of

"Net Profits" of

reserve

19%

New

reported
Bank

in

York

by

the

showed

the

first

a

six

months of 1948 compared with the
six months of 1947 calls for

first

some
•

/.

explanation
(Continued

and

comment,

on page

34)

Volume 168

:

Number 4734

COMMERCIAL. &

THE

FINANCIAL

CHRONICLE

(1101) :y-5

Geo, J. Ourbacker Is
Steel Production

.:

Electric

Observations

Output

Carloadings
Retail Trade

State of Trade

•

Industry

By A. WILFRED MAY

Price Index

Auto

and

PHILADELPHIA, PA.—-Yarnall

Commodity Price Index
Food

& Co., .1528 Walnut Street, mem¬
bers of the New York and Phila¬
delphia
Stock
Exchanges,
an¬

Production

Market Trend-Chasing Continues

Business Failures

w
•

With Yarnall & Co.

.

//.'.

Dow

—

>

-

.

/

—

the association with them

nounce

of

Theory in Crisis

George

J.

Qyrbacker,

President of the

former

Philadelphia Se¬

curities

Association.
ripe for another look at the doings of the
Mr. Ourbacker, until his hew
Theory and other mechanical stock market-systems;
They are important because of their effects on the market's price association, was branch manager
structure; the conclusions derivable regarding investment techpique; in: Philadelphia for. Kalb,. Voorhis
;
and since recent results clearly recorded under & Co., members of the New York
Dow Theory now adds "hard-boiled" practical Stock Exchange.
He has been
doubts to the existing skepticism based on "theo- in the investment securities busi¬
ness in Philadelphia for the past
retical" logic.
-I
*
*
•
*
/ /./■
In these days, more than ever, a ready-made
27
years,
having been a Vicej
investing "system"—particularly with the emo¬ President of F. J. Young & Co.
Notwithstanding the current shortage in steel, the American Iron
tional comfort arising from association with a fpr 14
"and Steel Institute reveals in a current release on Tuesday of this
y^rs., Hetis a gradhatfifidf
.' week that in the eight months of 1948 steel production totaled, more
rcompivnity. of fellow,-travelers-offers a, con- the University, of Pennsylvania
"venient and wonderfully relieving escape from and attended the Oxfotd -Uni¬
; than 57,500,000 tons of ingots, and ste^l for castings'»an output largfer
v
the multitude of inscrutable elements in the versity in England; is a member
for such a period than ever made before in peacetime.
That amount
national and international political and economic of the Philadelphia Bond Club,
of steel, the Institute states, was approximately 1,645,000 tons -large*
/situations. It merely furthers the public's deep- Union League and the : Midday
than in the first eight months of 1947 and exceeded the total output
v
seated yearning for systems of all kinds—funda- Club,
v
.-Yr.
? of the entire year 1939 or any other year in the 1930's. In the event
/ mentally the result of the great emotional need
operations of steelmaking furnaces over the next four months conr
J for "a way -out"
from more rigorous logical
; tinue to be maintained at the rate of the previous four months, the
;
judgment and the scientific investing approaches Two With
Institute makes the prediction that total production for the current
Increasingly realized have become the alterna¬
*year will approach 87,000,000 tons, -pr a new peacetime record.
A. Wilfred May
Higbie McDonald
?
tive difficulties of appraising worldwide eco/

The- time

industrial

Total

production in the holiday-shortened week sufdecline from the level prevailing in the preceding
period;
Activity in manufacturing showed up favorably with the
high operating level of the corresponding week a year ago, despite
the hampering influences of strikes in some lines during the past
week.
As was true for some time in the past, payrolls continue^
'steady and high, as did employment, with an increased demand fpr
; farm workers in many sections of the country.
i

\ fered

seems

followers of Dow

slight

a

.

*

.

,

.

,

.

vv

*

-

*

.

"

•

Late

•

on

Wednesday of last week the Board of Governors of the

-the current month will

What
per

hgve to increase by two points the reserves

they set aside against their demand deposits; and by IV2 points the

events

,

his projected

the

are

a

own

past - performance.

-

members

Building,

of

f

the short- and long-term ebbs

course for

market

mental event like a major

.

Guardian

chartists,

who

rest

on

unshakeable

a fundat

relaxation of margin; requirements would

alter, the mechanical;omniscience <of the charts.

;

(Special

to

The

KANSAS

discoverable from

JJnder; this principle hot■*even

'

With H. O. Peet & Co.

activity!; Similiary - indifferent to all external

stock

with Higbie, McDonald & Co.,

now

world war would change the Detroit Stock Exchange.

confidence that the market is governed by a trend
its

~

*

Chronicle)

Financial

Angott and Cornelius M. King are

;

/

The

to

/DETROIT, MICH. —Thomas J.

as

the. firm conviction recently expressed' by a leading cycle-theory

and flows of business

eserve cities of New
York and Chicago will go to 26% from the
•present 24%. On -time deposits for all banks,^ the requirements wiU
.go to lVz.% from the current .6%. ^
1;
%
,,
*;V-: The foregoing
;step:'Was^the;^ird^bnmry7.;m^^r^:^l£eii' by
fhe^ governmentiri^ less Ahah "a month invito; inflation./;
>

■

♦

.

(Special

the

and

marvelous feeling it must be to have perfect confidence,

to any degree

they- set aside against their time deposits;
A
\\\ For-country banks, effective Sept. 16„.reserve.requirements-,will
.be. 16% instead of 14%; on Sept. 24 requirements ;of. reserve city
banks will be 22% against the present 20%, and those of the central

.

a

exponent,: that not evert the outbreak of

I reserves

-

political; events;

and

'

;,The action taken means-that; all member banks. of the System

■

fiscal

strongly evidenced since 1946.

.

;..

nomic,

4

.

divergence between stock market-price action and external factors,

; Federal Reserve System took the necessary action vested in it by
the anti-inflation measure which became a law iri August, to raise
the reserve requirements of all itsmemb&r banks.
;

Chhonicle)

Financial

CITY, MO.—John C.

Fehlandt, Jr. is with H. O. Peet
& Co., 23

West Tenth Street, mem¬

And the chartists, of bers of the New York Stock Ex¬

/

Courseware;not bothered wkh the; worries over/such ^aggravating change. /p/i}v1
as: market selectivity" or the particular factors; confronting

.;'

nuisances

Lower farm income was 1 largely responsible for a' $100,000,000
decline; in personal income to $17,600,000,000 in July from $17,700,-?
1-

individual industries, and companies.
1^'"i'J '..*1 ■' -//J'.,

! 000,00(1 in .June,-the Commerce Department reported; v, ,>
•*•
>
July personal income was running at an annual rate of $211,: 500,000,000, considerably higher than the 1947 rate of $195,200,000,000
and the $208,600,000,000 average rate over thefirst seven' months o|

.

'

„

,«

■

Theory.Defined

/Z,;j

*

;

Agricultural* income: in: July this

•:

was

year

-

The principles and basic rules of the Dow> Theory

"if

as

handed

downVby Rhea and Hamilton (ex-current distortions, alibis^ and other
at the seasonally-^
ex; post facto explanations); are simple, clearly, defined and nori-

adjusted annual rate of $23,300,000,000, compared with $24,600,000,000
'in June, due in part to the fact that the volume of farm marketings
rose
"less than seasonally." '■ It: was,: however, still- "considerably
"above?, last year's monthly average.

controversiaL: It

assumes

that.bull pndi bear markets, although interr

until.a reversal is Sndicatedk*.- This direction, - like the*

Non-farm-personal income advanced-to an annual rate> of $188,-?
."200,000,000 in July against a $187,700,000,000 rate in June.

Dome Mines. Ltd.

:

rupted, by reactions and rallies, will continue in the same direction

Giant Yellowknife Gold;:;

rise and fail oi

/

•

.

the.
are

employment hit

new

a

high

August

in

-

7.

.

•'{;

(sic)

Kirkland Lake Gold-

Outside1 df the^^ relatively simple prescriptions of the Dow Theory

there is being increasingly embraced

throughout the Street

a

throughs of levels of the single,

double,

or

Macassa

triple variety, with

July, to 8,444,000 last month, and total civilian employment was put
at 61,245,000 in August, 370,000 below July's record 61,615,000.
About 1,941,000 persons were unemployed last month, not quite

conclusions from the amount of volume added.

300,000 below the 2,227,000 persons looking for jobs in July.

supposed decisiveness of the penetration of the defined resistance

*

*

*

one

points.

consistent

Mines, Ltd.

Mclntyre Porcupine Mines, Ltd*

Consumer

Mines, Ltd.

N

Ventures, Ltd.

■

.

Wright-Hargreaves' Mines; Ltd.

.

.

Ltd.

Noranda Mines/
Pioneer Gold

:

buying last week was encouraged by generally im¬
Market forecasters are more than ever concentrating their atten¬
proved weather conditions and by increased needs for the Labor Day
tion on the testing of highs and lows, in lieu of such inscrutable
holiday.
Retail volume rose moderately above the level of the
And general
.previous week and was slightly above that of the comparable 1947 things as industrial activity or Politburo strategy.
.week.
Fall promotional sales continued to meet with favorable business / economists, seem to be assuming the self-propulsion of
consumer
response
and medium-priced items
of good- quality indicated trends through resistance levels, thus likewise joining irt
remained in large demand.
the mental-charting game*
,
I 1
Holiday market closings and shipping strikes in the New York
and Pacific Coast areas were reflected in a slight decline in whole¬
Recent Dow Results
«
,
sale volume during the week. - Dollar volume, continued to be some¬
:
;(■
"'i
v:
'
//
what higher than that of the corresponding week a year ago and / :
Are ''resistance points" actually a guide to .the recognition of a
recorder volume for fall merchandise remained large.
real stock market trend?: The orthodox Dow- Theory, being the

Mines, Ltd.

Mining Corp. of Canada, Ltd.

element in this search for trend is intuitive mental leaning on the

^
->v.z/;

--

The

-

Lake Shore, Mines, Ltd. /

K

general

philosophy of resistance points penetration in the guise, of breaks

.52,452,000

Mipes, Ltd.,

*

Kerr-Addison Gold Mines, Ltd.

well as industrial* shares.

as

;

Hollinger Cons. Gold Mines, Ltd*

preliminarily; established resistance points by. both ,th$

,

Non-agricultural employment, the Bureau added, totaled 52,801,in August, close to 350,000 above the previous record figure of
in July, while farm employment fell from 9,163,000 in

000

r

continuing trendy the reversals, of which

indexes of-representative railroad

.

>

discoverable' and "cpnfirmable" by ;the^ market's penetration of

so-called

the Census
; Bureau reported.
Total civilian employment, however, was off from
the July record, due ;to % norinal mid-summer slack irt farmf opera¬
tions.*:
'
-I - :
"
«.
'
'
'
:
,Non-farm

.

tide^fs epneeiyed of;

HART SMITH & CO.
52 WILLIAM
.

ST.,

Bell

.*>

HAnover 2-0980

N. Y. 5

1*895 ^

NY

Teletype

Private

,

Connect

Wires

~

*

„

4

iJTtw York

v''

'

■

■

,

.

*

OPERATIONS

STEEL

LEVEL

More steel

equipment.

:_

-

.

»

'

.•

IN

SCHEDULED

THREE

capacity to

THIS

WEEK

AT

HIGHEST

MONTHS
come

i

inost-

clearly defined, offers the, nearest approach to an objective

measurement

of results.

this and next year is not all new

Skipping

(Continued

Blast furnaces and openhearths are part of the picture,
:- s '
(Continued on page 32)
'
V
\f

over

the record since the begin-

on page

Incorporated by Royal Charter 1727

39), :

OFFICE—Edinburgh

HEAD

Inc.

*;

Kingan & Co.

'

'$1.20 Convertible Preferred!

Kerr

/

■

Magee Oil Industries, Inc.

Roosevelt Oil
•

•'/

»>•




Bought-~-Sotd-—-Quoted.

^

-

Charing- Cross, S. W. 1

Burlington. Gardens, IT. I
64 New Bond Streetf

/ ';

W* 1

TOTAL ASSETS

,

£153,656,759 ;

_

FREDERIC N. HATCH i CO., INC.
k

<

-

STREET^ NEW YORK 5,

telephone!'; BUgb? $r57jD0»>;-

49

*

.•.--*£% JHe-mperstNaf't:Association, of Securities Dealers, Inc.]

72 WALL

8

McGraw (F. H.) & Co.

OFFICES:

3 Bishopsgate, ,E. C. 2
West Smithf fold, E. C. 1

:

:

Convertible; 6% Preferred

SSHlER^
-

;

American Maize Products Co.

Roosevelt Oil & Refining Corp. (Common)
,

*

-

throughout Scotland

§ LONDON

^

Ashland Oil & Refining '

.

t:

y

,

^^;TO^iNG^MARICETS';MAINTAINED;;'-.

.;

•>

Royal Bank of Scotland

Branches

V

Toronto

Montreal

XTeletype: *NY. 1^3813

/

■

-v.i;

^ "3
P' ■

.

'*"1

83'

MEMBERS

Wall'" Street;

New

S* H,

^Associated

Banks:

i-

Established
Y. 8ECUR1TY DEALi3ia

:

fc

:rClFn MiH* & Cp.^ •.-

'

-

..

ASSOCTATIpIf. / / / ; ' 4,.'

J"

;

.

t

Williams Deaeon's

■

,-k

,'

.

•

Ban^. LtiL

.

#

1

■%

Banker lists

By tARSTON D. FARRAR

.V,;';^lv>

^.j-

Trust Co., St. Louis

Vice-President, Mercantile-Commerce Bank and

character.

as

bonds, like

Cautions municipal

eludes that

any

they constitute safest investmeit medium outside of

group

j

j
j |

Government securities.

U.

Safety of principal and income are the prime considerations in the investment of the
a bank.
I believe we will all agrea that State and municipal bonds on their past
record rate next to United States Government securities in this respect.
While Stat^

deposits of
bonds

speaking, mu¬
nicipal bonds,
I

them

such

as

of

fairs,

(B) A sense of moral

differ-

vast

a

in

erence

citizen•

that

they

o

in
I.

portfolio

f

b

a

a

k

n

A.

i

,

to certain stands

measure up

.ards,"

cluded

-

•

Many

-

'

■

|

-

new

'

Population
(A) Character
Just

arid
the

as

*n'

'

,

ability
success

f

of

^Lecture

beford
University of Wisconsin School of
Banking, Sept. 1, 1948.
J '
!
by

Long

Mr.

levy,

will

his

"think

.

be

w*

o m o r r o

settle

the

payment of serial maturities.
If
not, does the growth of the mu¬

nicipality justify the iricrei^in
-

right1 ;

out

•

now

a

f;iy-'M:?:'f
the

if

Republicans

control

of

the

were

Senate

be

to

Thdre

erroneous.

are

enough Democrats in the Senate
Who' viOw^, edoridmic i "dritf
tax

'

problems in the same way as the
majority of the Republicans in the

—

^business-•

for

lose

memory—for
possibly much

only
year,

(a
possibility, although not
a
probability at this point), the
following forecasts of tax things
to come would noil necessarily turn

this2

time—

is

distinct

con¬

^

■ ■

Even

■

to

or

-

a

longer;

unsettle:
ditions.

become

at; least

'.tax
condi tioms—■

can

he

(particularly in the field of taxes)
will

.

rly

a

before

.

future

is

by

for

reasons

fall—even

condi-'

Second,

being reduced

this

par-},

Debt Retirement

(A) Is debt

list"

true

business

\

accumulation of sinking funds or

r&toik£■.

men...
who".
Wdnti §pdcific\'■

same

body to - assure passage of
legislation now being planned. ^ !
tax. chahges1 to get'rinto - a huddle
From
my
constant' study of
with the- Gongressmanrto-be from Congress. .over
the
past
eight
.

(B> Are' sinking

funds safely
thei^districfand'to! l^^hiirikhdw;
invested.,. The ideal situation is
thbi'r' opiriioria ' on tax I probleihsito have the municipality invest
Jiist as an ounce of prevention-is
its sinking funds in its owri bohds
worth a pound of cure, so an in¬
of a rriaturity not longer than the
expensive trip to' your .Congress¬
bonds Tor which it; i$ pmVided;; > r
man's home now can save
you ar

:i.

expensive

trip

to

much of which timfe has
been spent among Congressmen,
learning their foibles and their
predilections, I believe it is rea¬
sonable for interested
business¬
men to look for tax legislation in
1949' embodying
these
specific
years,

Washington
lneM.&yeai?i - And,v-£s: ah :added pOlrits;
^
Total Net and Overlapping Debt
incentive, yoir won't be subjectec.
Excise Tax Changes
;> /
-(A) Ilatio to ra^^sed^ Valua-I to necessity of registering as i
tion.
-yy-:^r'
(1) A
thoroughgoing revision
f lobbyist if you call on your Con¬
VU

.

percentage of

the

or

dur-f

vi
.

(B ) Whether budget is based on
total

on

tic u1

.

(B) Has there been, any forcec:

m

municipality collected a reason¬
able .percentage of taxes levied
duHng depressidh
^ - *

of "a

1

.

refunding?

whether tbe

important^ to^

<

big

two

keeping taxes
sure, beyond
peradventure, of the political complexion of the next Congress.
First, smart businessmen make decisions not only on what is
t r u e
today <*
but, on what
Capitol Hill and the White House
t

any, cause,
a tion and how cured..

;

(A) Trend in fhe valuation ot
property for tax purposes.
(B) The approximate ratio of
assessed valuation to actual valu¬
ation.' A 10% net debt is regarded

is*

yvThe-alert businessman has

Future

(A) Default, if

.

citizens.

business; (5) elimination of double-taxation^
dividends; and (6) amelioration of numerous minor :
inequities affecting investors, businessmen and farmers.
t

•.

Debt Paying -Record

?

con¬

methods for anal-yzy
as
high.
However, if the prop¬
ing--municipal bonds have been
advanced in recent years.
I do erty is assessed for tax purposes
on
an
average of .50%; market
not believe there is any set for¬
value it would be Teasoriable. ? 1
mula, or yard-stick, which can be
applied in the purchase - of al
Ill
municipal bonds.
However,, th
Tax Collection Record
following ^factors,
given prope
relative weight, may be helpful i
(A) i?er6erithgb k)ft ldvy col-arriving, at an appraisal.
leetecf over a period of years.
It

;

and competing private

tioris;*—

Assessed Valuation

Long

should be qualified by "provided

they

unusual

ditions.

V

-

deficit of one year in¬
in budget for succeeding

Is

y&iir-tUfWi'* vr;

to be

appears

operate;
.

and

population,
to

due

v• *

v-

balanced

a

(B)

be

included
the

v;;.■?. ? ■)"

the trend

temporary

effect

the

to

whether

rv

in

(C) Trend

statement

any

•

on

responsi¬

bility;^"the part Jbf Ithe^avei-agfc

the

rity of
municipal
bonds, and

se c u

Does municipality
budget?

(A)

upon the char¬
ability of its citizens

!

by |

of corporate

No.

Receipts and Disbursements

depend

and'

action

taxes; j
(2) more consistent coverage- of Social Security with increased '
^contributory taxes; (3) ironing-out of inequities in corporate low-'*
income brackets; (4) increased
parity of tax incidence on co-ops

y.

af¬

its

manage

the credit of a municipal¬

so

acter

There is

who

men

will

ity

in this discus¬

sion.

the

treat

will

-

forecasts;fo ho wing constructive

■

■

ability

by the character and

tent

lections.

F arrar

tax reform

Eighty-lirsf Congress: (I) thoroughgoing revision of excise

tax col¬

the event of a decline in

corporation over a period of time
will be determined to a large ex¬

technic ally

Mr.

outlook.

❖

not,

are

5 ^

Washington publicist takes optimistic view of immediate

i

and farther emphasizes.the factor of citizens
other type of security, require constant checking. Con-

methods for analyzing: municipal

new

Thursday, September 16, 1948

! What Wilt Happen fo Taxes in'49?

Municipal Bonds in the Bank Portfolio
Bv

4

CHRONICLE I*

& FINANCIAL

COMMERCIAL

THE

(1102)

6

actually
collected during
the previous year.
The conserva¬
tive
procedure is
toy base the

taxes

(B) Indirect debt^ siicli a$ rev4

gressman while

.

he is at home and

let your wishes be known as one

of

excise

is

There

taxes.

dis¬

a

tinct probability that such

excises
of his Constituents.
It
should
be
as the 20% pabaret tax (levied in
) kept in ( rriind
budget on the amount Qf taxes thdt revenue bonds
ar& pajrabld
hight spots "that allow dancing
The 80th Congress, long ,to be
actually collected during the pre¬ to a
large extent by : the same remembered
along with dining), the excises on,
by taxpayers because
vious year.
This permits the use
stoves,,
cosmetics,
photographic
people who pay general obligai it was the
first Congress in al¬
of .delinquent taxes, when col¬
tion bonds, therefore they are a
equipment and a variety of other
most two decades to lower taxes
lected, as a cushion to take care
continguent liability of practical¬
popular items will be abolished
may yet be outdone by the 81st
of items not
enue

and

special assessment bopdsl
-

'

DENVER

<.

■j h

iiiiiiixiiiiiiiiirixxxr

;

h

CRIPPLE

: H

E

CREEK

COLD

MINES

.

.

H

FOR

H

LEASE

(D)

M

H

Long-established
of

h

term

ft
*

h
h

¥

leases

forty

frotn two to.
past production

with
ranging to

acres

records

to

mines

on

payable

are

If

taxes.

not,

whether tax limit is

Cripple
Creek properties, will grant long-,

H

Whether bonds
unlimited

from

company, owners

well-located

several

entirely. Other excise taxes, some
every tax payer.
Congress in the field of tax re¬
of them ranging up to 20%, will
.(C) Is the bonded debt which form.
be
lowered, but not abolished.
is payable primarily from spe-^
It would be lese majesty * for
This is probable in the case of
cific revenues actually self-sup¬
any
Washington observer, even
jewelry, for example.
porting?
/;
;
before
the. November
election
It is obvious that a reasonably
(D) Amount of floating or un¬ results are in, to predict flatly
prompt review of the excise tax
funded debt.^,..
.•
r
i what the 81st Congress might dc
sitriatibit criri ;be*iforetold idfvrifew.
(E) Is - the.
overlapping
debt as to this or that specific tax, or, of the recent announcement by

ly

'(C) Tax rate and trend over a
period of time.
'•> * ;
'

M
i

the

in

anticipated
; '
■
'

budget.

:S

high enough
protect debt service.
An un¬

limited

tax

$4,000,000.00.

able from

Joe Dandy Mining
315 Colorado

Bldg.

reasonable

If the bonds are pay¬
limited tax, it is im¬
portant to note whether the limit
will provide adequate revenue in

Company

r

„

is

service

debt

preferred;

References exchanged. Engineering
supervision If desired.
Write.

for

in

relation

to .the

as¬

sessed and actual valuations?

a

i

vviii"'".y.

j

Stability and Diversification

of s

Enterprises in Municipality

j

-

SPARTANBURG

IX

PHILADELPHIA

ij

;

v*

(Reports

on

Textile Securities
>

(Prospectus

,

j

Properties

Available)

t

BUCKLEY SECURITIES

A. M. LAW & COMPANY

CORPORATION

(Established 1892)

1420 Walnut St.

44 Wall Street

Philadelphia 2

New York 5

PEnnypacker 5-5976

WHitehall 3-7253

;

Private

Wire System

•

.i,

|

indicating the trend of thought
the majority of
seated
Congressmen (most of whom are
likely to be returned to office
unless .there; are some; political
among

atomic

bombs: exploded

between

I

SPARTANBURG, S. C.
L. P. 51

r

—...

now

State

have

j

NORTHWEST MINING ;
For
or

Immediate Execution of

Quotes call TWX Sp-43

as

Floor

CORPORATE

other hours.'-

:

.-V

■

LOCAL STOCKS

of

OFFICE
Brokers

Stock Exchange Bldg., Phila. 2
Telephone
Teletype
.




PH 73

-

Peyton

-

at

;

appreciably

from

,

the

these
gov¬

eventually
will ; lose
money, instead of make money,
off this particular tax, if it is not
doing so at this time.
;
Mr. Knutson pointed out in his',
late-summer announcement that

Exchange

Underwriters

\

Established

Building, Spokane
Branches

high,
Many

ernment 4

Spokane

Dealers

up

day the tax was lifted.
All
facts show clearly that the

corporation

Byllesby & Company

as

the excise tax. Canada;
this • tax
about
four
months ago and business in such
dine
and
dance
establishments

Standard Securities
Members Standard Stock

declines in 'their

dance rooms of

88% in the months past.

picked

Co.

Hotels),

repealed

of

Appliance

fUttenhouse 6-3717

reported

tp

due

close

to escape

BONDS

.

Exchange frdm 10:45 to 11:30
A.M., Pac. Std.' Time: Sp-82 at

to

this tax.^

ing portion of their dining rooms

^Orders

on

had

hotels have closed down the danc-[

STATE AND MUNICIPAL BONDS

SECURITIES

Electric

PHILADELPHIA

have

the workings of

ATLANTA, CA.

Stromberg-Carlson

H. M.

-;r:0

and Nov.

dine and

Purolator Products

Warner

/.

"This is particularly true in the
case
of
those
taxes where the

•

Dayton Malleable Iron

Parker

reducing

and

>

...

Botany Mills Com. & Pfds.

Gisholt Machine

some

others.'

•

SPOKANE, WASH.

La.

repealing

ap4

Philadelphia, New York and Los Angeles!

Central

he is Chairman, is making a study
of these taxes with the view of

2).
•
rates in effect are operating as a
ciirryvthe
:' iOh fh& basis; of present avail¬ resistance' to the
purchase of ar¬
proving opinion of a nationally1
able facts—all the way from one's ticles on the part of consumers,"
recognized firm of- municipal dt-;
own feelings and intuitions to the
Mr. Knutson said.
This is a clear
torneys.
•
/
,
i
Gallup poll—the Republicans are indication that he and other Con¬
In my opinion, one of the most
going to have a majority in both gressmen;
have
been ; "hearing
important factors in determining) houses of
Congress,, come, nexl from the people" on the subject
the investment, status of a mu¬
Jan. 3.
Also, the GOP is going of excises on stoves, refrigerators,
nicipal pond is the character of' to have a President in the White
photographic supplies and other
its citizens.
Given the willing¬ Horise.
f He-may; not view evefy items used in everyday living.
ness
to pay, with a reasonable; problem, ilrir the
The
cabaret
excise
tax—not
debt load, most hazards to the; leading Congressional Republicans mentioned by Knutson. but cer¬
view it, but there is every indica¬ tainly in his mind—shows what a
(Continued' on page VIII of
j tion that much of the recent high excise tax can do. Liter¬
Pictorial Section)
bickering and backbiting between ally, dozens of cabarets in every
.

Teletype STBG 1*!

l. i

between

Atlantic City Electric

Representative
Haroldr Knutson
(R.-Minn.) that the House Ways
and Means Committee, of which

„

Request)

Kent-Moore Organization, Inc.
v

•.,

(A) rBdrids sHouid

Puget Sound Power & Light Co.

Maryland Drydock

,

Legality

Southern

particular, what Congress will
on taxes in general;
But there
many
straws in the wind

do

are

Denver 2, Colo.

xxxxxixxixxxxxxxtxxxxxx

in

'

Kellogg, Idaho and* Yakima, Wn.

RHODES-HAVERTY BLDG.

1894

ATLANTA

T4Iety|i% AT 288

1,

GEORGIA

Lonf Distance 108
■in

■mini

ii i i

.

n,II

hi

.

> 1

(Continued

on page

35) %

'

Volume 163

Number 4734

*

From

THE

COMMERCIAL

&

FINANCIAL CHRONICLE ■*

The Housing Situation and Government
Policy

Washington

By HON. RALPH A. GAMBIA*

S. Congressman from New York
'•
Chairman, Joint Congressional Committee on Housing
-

>■

v

*

NASHVILLE, TENN.—Elmo Roper, the pollster, %ias looked into

' T*have

V'-V'

an

% im-

portant ' bear¬

•

ing

the

on

r-future.^/ :
i-Therefia re
these

of

some

State

contests,
tof course, that

! ,:yill-determine
whether' or

[not Dewey;

have

been-a&tthe Bjblq to/thou*

sands of Tennesseans.-

;r:VWhen 1 was first approached as to the possibility of
addressing this Convention, the
thought 'I had in mind was to give you a sim ple narrative of
developments in the housing
•Situation, adhering, as I always, have since being made 'Chairman of the Joint: Housing
'pAmmif+AA
-

4-W

,'V. V.i.J

.

his"

a

.non

.

A

<&

parti¬

-

and

san

,

*.

rp:

'Committee, to

^•.^ms.:wrfterYhak; be.en/ traveling,

to political

.P

..

non-

most

on' the

hoax

,V in h is tor y, using
not. at the' 'same

may

the

Senate.

With

lose

time,

such

wide¬

a

spread, sweep as he is expected to
inake,there .would
doubt

about

the

seem

Senate

to be

no

outcome.

Roy,

State.

they

peculiar

Wanted- him to

doubt^ about it."1
To

v

offset

tfiey

possible

any

losses

have

elseWhem;-— the
Republican I' seats
would tie up the Senate, -the toss
of four would nthixrw cbhtrpl to

w,

may

loss* lof
,

r

the

:

i;hted

New. Dealers^—a

trernendoufs

fight is being made in this state
to ,pkk( up a Republican Se^
seat in the form of, Carroll jReece,
.

who served for 24 years as a mem¬

ber

of

(Congress from the First,
District,; and then <a term hs Na-

to

say,

the Democratic leaders

Ro.y to

.

just

is

to he sheltered.

ment,/ owner¬

the

Memphis

There
-to

were

Crump

machine.

overtures made

even

Roy tp^nnvtwo. years

j What seWhs to

agor

{

*. .t

burn these, le ad-,

drs up is that when Roy really de¬
cided to run, he selected the Re¬

publican ticket.

It seems that his
\yholq background has been

ljubiican..
I

<PU

<

But it is

a

scream

,to hear the

very -same Democratic, leaders who

complicated story. This story can
best be told by reference again to
the fogginess which has been pur¬
posely created in the mind of the
people through propaganda dis¬
tributed since the beginning of
th,e -New Deal by those
whose

primary interest <and intent is to
socialize, first, our housing facili¬
ties;
second, our industry, and
'iinally, 'Our • entire economyi
In

>

his recent

of

one

speeches
nominee for

as
the Republican
Were; trying;;i toRinr'to itoi,
tipnarl "Chairman^
pPpipffff*f/f
•President, Governor 'Dewey re¬
now to be professing/hoTror .ovfer
( ? Iri^the^firsban^^seco^^districts,'
ferred to the people as groping in

the

nomination

has

been

of

Republican

a

"equivalent to election,
just as has been the domination bf
a r Democrat * in * thg
rest xif the
S(>Uth/

(
.

»

»,

tire

State,

*"y'

r'

•

l"'*! -

4

,

Democratic.

normally

'

Running wfth him is Rqy Acuff,
One has only to know 1he geittleman
awhile to-realize, also, that
he -is quite
y "

from

^uesk, in the

the

brief observation

he

relatively

has

the

had

^/maldhgjr that -Roy

-Opportunity

going to sweep the State and
Dewey and Reece with him:
This
State
along
with .-other
Southern States is. Irarning '
up
carry

a' successful'business

';: TV

man.

-a

.Anyway, he and Reece

are

tour¬

FEPC, and his opponent Congress¬
man
Estes Kefauver, who is One
of those Southern boys who has
thought that the way to go was
to.cultivate the Eastern

ing the State together, going into

tuals,

seatr up over the
hills,, and down into the valleys.
They are accompanied everywhere
by Roy's fiddling Smokey Moun¬
tain Boys, seven of them.
They
have an advance sound truck, into
the community a few days before
their appearance, then here comes

FEPC, too.

county

every

Reece

with

and Acuff

entertainers

their

with

and' another

stage

the latter's

portable

sound

truck.

They move into a county seat at
noon cr rn id afternoon, quickly set
up
the stage in the. courthouse
square
before crowds averaging
four and five thousand. Reece and

back

has said

show;

talk, then Roy puts

They move

on

his

to night audi¬
ences which have run up as high
as 20,000. Roy and his boys have
long been favorites on the Southwide; Saturday night. Old r Oprey
on

Program from- Nashville. He h as
made"

some

it) mountain

talgic movies.

or

nos¬

and his' buys

He

is

against
comes

Otherwise

the r CIQ,

New York.

Of course,' this is
only
State. The question is whether

one

he

is,

in the campaign,

going to
legisla¬
tion.
The GOP platform is silent
on the subject,
v
$ c/,'4i?
Federal

advocate

>

There

is

no

evidepce than in housing, i An
acute issue in many -of the large
centers : of population, housing
is

national issue. That

sense a

into

the

whirlpool of ideological

that

Dewey

to

does favor

believe

anything

like this. And he certainly doesn't
need to come oiit for any /such

Let

first

me

doesn't need the votes.
a

matter Of

Middle

the

of

mah^s

H

Sales-

:! The claim is again being made
that there is

Corner,"
in

a

every

day's V issue
"Chronicle."

J of

the

lion
can

West

/

'

.

units.
be

:;:An

This

fantastic

claim

explained only when it is
address

Gamble

the

of

by Representative
the

before

60th

Annual

Labor

it

was

expects

these

day while in Wash-

I

May,

visited with the officials in charge
Bureau of the Census and

with

obtained

this

for

talk,

tells

the

will

that

me

figures

be

them

from

The 100,000 mark was
probably achieved in June
of. this year as against 77,200 in

in¬

some

teresting figures as to what might
be expected in the way of family

June

increase

.94;000 is

within

the

few

next

August

Whereas the advocates of

years.

for

Government

ownership and op¬
eration speak in ^astronomical fig¬
of

ures

the accrued

and

of

mains

to

near

and

first hand from the

be

if

October

dwelling units.

«"

■

made
in

1,400,000, will t; total per¬
1,800,000.
Marriage disso¬
lutions, through death, divorce,
etc., will be such as to keep down

1949 will

the

account

may

run

as

dishonesty

the

of

and

steer

of

of

common

to

sense

pursue

f Before

concluding

this

tion another
from

the

men¬

thing that I learned

Bureau

the

of

Census.

A great deal is made by .the prop¬

agandists for government owner¬
ship
and
operation
about
the
doubling up of families in homes

were

were

due

831,700 completed.

the

to

housing

substantiation

Neither the mortgage insurance
beneficial effects
flowed

which

the

*

investigation of the Joint Housing

you

shortage. In
this they will
fantastic figures
will not stand up
of

very

simply

(Continued

31)

on page

He can, as
-

Gas

U i-

Company

| Minneapolis Gas Company

Common Stock
million

65

dollar

Bull

Shoals

Dam electric power development now
under
construction
by
the
Federal
on

the

White

should

augment

County,
industrial

in

territory

served

,

the

Boone

by

River

Common Stock

at

Arkansas,
expansion

•

....

■

'

,

.

'

-

f.

Arkansas

;

t

•

BOUGHT

Western Oas Company,
^v

1

**'

\uV:'J'.i'-r

JP'

—

n

SOLD
',

v

'

■

V'*< ''' P-'iPp

v-'

•

"

•

>"'<V-*'

QUOTED

-

~

t1

,'■• ',£/\ "t''',4 ;

Conservatively capitalized, this growth
is
now
paying
quarterly

Common & Rights

t

/

,>

#

h

detailed

to dealers and

J

H

dividends of $0.20 per Common share.
Full

information
we

is

available

Writeup

invite your inquiries.
.

?

B oug'ht-~-Sold-~~JQttoted

*'s.»
.P-py: ;:,i-'l

"

*

'r

'

'>**

' 1;

,

•

f

v' rs

:

-5

•

1T* I!

j

xpp

on

'Ks

*

Request
.t'

'U

*,

"*

•«
»

,

»p

/.<

-

1

"

•,

Approximate Price—>13%

V*

TpcP'iPri p.V.fj •;'"..i-™p,

*:

-

•'*•*;j_;i>'; ;:r-*♦

.

W illiam A;FulIer & Cov
Street'Chicago 4
;

Comstock & Co.

KAiGALDtN^COMESNY

Exchange

' Tele. CG

146

.

;

; v

v,

-

■

-

,

.

Incorporated

••

• •

-

CHICAGO 4, ILL.

>231 So. LaSalle St.

Dearborn 1501

Teletype CG 955

•

...

>

Chicago

/ New York

Boston

the

recital

of statistics I should like to

com¬

from

have

into

indicated in general by the
80th Congress. >■ v

contrast this situa¬

believe

I

a

started

true, as
just

proven

propaganda

also

that

be

course

with what is being accom¬
plished in actual construction.

I

in¬

the dangerous ex¬
mixing social emo¬
tions
with
economics,
we
can
readily see that the actual hous¬
ing shortage will quickly disap¬
pear if we have the courage and

tion

started and

an

ago

would

be

shun

we

clear

sharply
to
475,000,
hold
steady at that rate during 1950
and drop further to 450,000 in the
years 1951 and 1952.

1946, 670,500 dwellings
and 437,800 were
In
1947,
849,000

will

periment

drop

begun

houses

political

families in 1948 to 700,000 or 800,000.
The Bureau further states

In

months

many

1948

If

ardund

now

starts

prevails

November at

conversions, which
high as 100,000.

haps

us

should,

in

over

the
figures which
given do not take

when World War II ended, mar¬
riages in 1948, which would nor¬
mally
be
expected
to
number

Let

and

million

Contrary to what was believed

that the net increase in

it

peak
weather

last year.
It is now evident that the
pre¬
diction
which
my
.Committee

1

>

.

but

seen

good

creased rate

1,500,000

»

»

both

building should continue through

real short¬

a

than

more

for

all-time

an

of 'not

figure of
July and
against 81,000 and 86,309

as

ing housing shortages, the Bureau
of the Census prefers to deal in
the figures which it has obtained

We thus start with

The

year.

set

respective months last
What September holds re¬

year.

continu¬

last

those

which

Arkansas Western

for

follows:

as

ago.

program nor the

Inn, N. V., Sept, 14, 1943.

that

1943, 100,000 as contrasted
72,S00 the same month, a

year

.

Savings and Loan League,
hac

contrasted

also

preparing

of the

quote

Sara-

52,600

year

Statistics

months

Convention of the New York State

Power & Light

Tel. Dearborn 5600"




shortage in dwell¬

this

started,

by sponsoring a

Wisconsin

09 S. La Salle

ITTTTYT

other

pleted.

fact, hurt himself in

Members of Chicago Stock

^

The
inton

were

February last year was 7,000.
The increase in March was
nearly
20,000. The increase in April was
close to 30,000. Final figures for
May, June, July and August are
not yet available but the Bureau

housing

shortage at the start of 1947
no* more than 1,500,000 units.'

January

/-situation

regpiilar [j
Thurs

a

ings of from 10 million to 15 mil¬

badly needed Senator,

,

feature

a

should be familiar but
whifih many of the members of

this State; ftis/belieyed^ is as good,
ds won for him, andalso for' a

£ for selling securities read ■ jj
^Securities

you

you

Federal FEPC. If he doesn't do it.

F,or clever,* helpful hints
the

of

actual

What

thing to get votes in the East. He

Setting $

on

lay before

few of the facts with which most

Harrison,

Pointers

Bureau

the

current

over

the net increase in the number of

Extent of Housing Shortage

:

/ Government

■H

the

politics.

I

^

now

individual enterprise and thrown

The

H

not

in

nevertheless

strict

FEPC

reason

these

that it is de-

age

and

Nowhere among the
important issues is this fog more

.

Dewey is tarred in this state, with
having sponsored an FEPC ' in

the

that

In

.

homes

in

misunderstanding

oi

fog

wouldn't^ be
100 percent behind him.
/.;! your respective associations may
i On
the other hand, Governor never have heard.
;

from

The

impressive.

with 39,300 in January, 1947. The
increase
in February
this year

propaganda.

a

the

right

and says he can'.t be sincere

,

Arcuff

he

But Reece

intellec¬

learn

1948.

most

where in the world.
;

people them¬
selves, and to base its estimates
for ihevfuture wi figures "Of con¬
ditions 4h the past.
>

attained national fame about Truman's. Civil- Rights' .pro-? is, it is not a national issue until
it is taken out of the sphere of
singer of :moutitaih melodies, gram.
Reece is opposing the.

Who has
as a

Mt is this Wrfteris

meantime,

is

is running In thfe'en-

Reece now

*

tjieReptoU&tos

is

year far exceeds any

'actually the right of
each' family who
so
desires to
have a dwelling of its
'own, we

Census

&

similar per¬
by the construction in¬
The, dustry, ' public 'or. private, any¬

take

we

•

formance

sirable if not

beseeched

then incumbent
governor, Cooper,
Who was supposedly a "tool" of

If

assume

-

Ihe builders in private enterprise
have accomplished < thus far this

and

based.

are

-

•

until

record

which

upon

Governmental

our

figures' and

Therpby, as you men who are en¬
They gaged. in the building and' loan
against >th*e business know, rests a long and

*run

of

'

....

dence

figures oh the number of families

their ticket.

run on

*

•

Committee, became much in evi¬

Census, wisely leav¬
ing to others the debate as to so¬
cial. conditions, bases • its housing

gratify ship and oper¬
his -political ambitions. They say
ation of hous¬
Ralph A. Gambia
it would be an outrage for
Roy to ing one of the
become governor of the/ State.
principal
arguments
why
he
4 The ^fact is that<four yeats 4ago/
should be returned to Washington.

Yet ; in ^ive k States,

because of
circumstances; there is

He

-

<

Bureau of the

-

votes

.j..,

of the Census which sup¬

private' activities

,

popular

1

^

as

plies the information

Weeping 'the speeches, in- the / history.: of % the/
T_r u m a n,
'country with State.
('
wjio is now
i The;
one
of -the
opposition is
screaming also Candidate
largest
elec- bloody murder.' They sa.y Reece, T ir u m -a
n,
"t'Ora 1 and arj old wily
reactionary,, as1 they chooses;, to
p ro b ab1y put ft, is putting over an awful
/make Govern¬

Btr(eron

>.

Bureau

.

Carlisle

'

-

sident

r e

.

being -based upon
loosely and 4 incorrectly 'defined
"standards.';
'
'P • rl
We /maintain in Washington 'a

,

listen

,

understood

been one of the most
refreshing political out¬
experiences' of his life. V In 'their look.
S i n c e
first 10 days they have appeared
tiien, however,
before more than 1:00,000
people m a n y things
in the State, by far the/.largest
have changed.

number eVer to

i

Congressman Gamble, maintaining housing shortage is exaggerated and is
being rapidly eliminated,
expresses opposition -to government -^socialization" of
tidusitfg facilities, lauds accomplishments of
private industry in housing field and predicts steady improvement in
housing this year and next year.
Denies there is justification for further
expansion in government ownership and operation of housing.

By CARLISLE feAKGERON

his crystal ball, and come up with the opinion that the Presidential
race is so far over, there is no need for him to make another
poll on
i£.
He intends now, he says, to get around to State contests which

'

,

Milwaukee

'

Mhrneapolig

Omaha

~

Six Steps to
By HON. HUGH D.

■v,'' •/

Stability

Dealer-Broker Investment

SCOTT, JR.*

From Pennsylvania
Republican National Committee

u. S. Congressman
Chairman,

-

.Thursday, September 16, 1948

& FINANCIAL rCHRONICLE kjf

COMMERCIAL

THE

(1104)

Recommendations and Literature

T ;/;

'

4
It. is understood that the

thriving and constructive economy with a ^floating dollar," Repub* b
fican party spokesman lays down as basic approaches to solution of problem: (1) buttressing of world ;
peace; (2) a consistent and sustained program of government economy; (3) tax reduction; (4) rej^triction of area of government activities and controls; (5) elimination of communists from Federal
>
agencies; and (6) most important, reestablishment of sound currency.
y
Asserting

cannot anticipate a

we

If America is to resume the

?st#bility in
*vill take

in

long
as
we
operate on a
floating dollar
dollar

a

—

,

its

of

purchasing
-power during
years.
As a

-

this

of

result

-inflation
a

r

e

Hugh' D. Scott, Jr.

we
o

c

n

economic

of

restoration
the

from

grade schools through
-the colleges, is dislocated by to¬
day's
rapidly
advancing
costs.

they

These

half

the

in

spending

of

our

post-war

era.

its pre-war

to

basis of adequacy

orwi efficiency.

fThe

prevails in

relation to hospital and medical
.fosts, and to all. sorts of public
^services.
.

£??: E;

All these deficits pile up from,

yepr to year in new demands for
Additional tax; revenue* mi aiong
fhe line, from the county seat to
/the Federal Treasury. From coast
to coast, County Commissions and
.City Councils are constantly seek¬

ing out new sources of revenue.
;In many instances the tax base
'is .being expanded to yield more
without changing the tax

reyenue

<**4e percentagewise.

f5ut the local communities are
toeeyto face with the fact that
they are almost to the end of the
Jtoe on the matter of .taxes; It is
becoming increasingly difficult to
toepte

ne\i

Which

sources

of

revenue

socially and politically
depreciation
of .10% in the purchasing power
.of i%he dollar almost surely would
are

tolerable.

present

A further

unbalanced

an

budget in

.virtually every County,-School
District, Town -and City in - the

fjpited States.
#ut

this

Stability
one

jbeem
of

not

to

15

of
be

economic

<y ear s.

*

c

over

The

y

has

us.

oeriod

solutions
whole

reach, to the

must
of

international policy as
questions of taxes, Gov¬
ernment spending, administrative
qjfflciency, currency, banking and
as

fjPhese

solutions

must

be

•

at

we are

long

so

prevail

as

there

demand

these dislocations

will

be

increasing

for Government controls

Ahd various degrees of regimen¬
tation

and

stability

bureaucratic manage-

<*n^it throughout the entire econ¬
omy.
In this sense the restoration
pf Economic stability is the gate¬

and

Scott before the Executives'
of Chicago, "Chicago, 111.,
«ept. 10, 1948.

onftp

dub




free

during

Trumanites

month

recent

every

increased,

have

charts

expanding non¬
productive payroll. Economy and
efficiency' must be restored as
principles of ^Government.
The
barnacles of bureaucracy must be

we

will set

our

course

Drive

will then be in

„

than $100 a month for all forms of

...

collector's
half

every

over

take

the

could

next five

If the
be cut
years,

family budget in the land

would again be in balance.;; That
would be the third major step

y

Communists from

?

;•< v--v

stability.

;

Reduce Government Business
Activities

;The fifth, step to stability may
simply stated:

whole

economic

area

and

.

felibwi.: trAvelere ^

Federal lagericiesl I ? "E.fi"

controls

subsidies,

Government

allocations,
corporations,

—

Federal

Government

domination

of

the

commodity

markets, export con¬
trols, and limitation of production
in both agriculture and industry,
as/influenced
by wages, price
levels and labor

United

policy.

States

and

*

*

Leonard Refineries, Inc.—Circu¬

Exchange Place, New York 5, N. Y.

—Comstock

&

Co., 231 South La

Salle Street, Ciiicago 4,

111.

Minneapolis

Baltimore & Ohio Junior Bonds

115

Broadway, New York 6, N. Y.

Also

available

is

Opinion

and

Market
on

Stocks

Bank

a

leaflet

*

corporations

are

—

and Chicago, In¬

Williston

&

Also available are bulletins on

115

Co;,

available

is

a

Continental Insurance

leaflet
and

Clearing Machine Corpora¬
Furniture Com- j.
Nathan Straus-Duparquet,

American

tion,
pany,

Broadway, New York .6, N. Y.
Also

—

Whiting Corporation, Upson Com¬
pany,

R.

Bulletin

Inc., 32 Broadway,
New York 4, N. Y.

Bethlehem Steel—Memorandum

-

—

Strauss Bros.,

dianapolis & Louisville.

—J.

Rubber

Mohawk

of

memoranda

Crane^ &

Hoist

.

Corp., and Gisholt Machine Com-

.

Niles

Shepard
on

/:;EE

pany.

Texas

Company.

Lee»

Memorandum

Company—Current anal¬

Corp.

Aluminate

National
Brown

;

—.

Higginson

:

Corp;/ 231 South La Salle Street/.Chicago 4, 111.,
•
;
!

ysis—Lampard.,
Francis & * Co.,
Ltd., 66 King Street, West, To¬

,

ronto 1; Ont, Canada;
Biscuit

National

Company

—

Celanese Corporation of Amer¬

ica—Analysis—Kidder, Pes body &
Co., 17 Wall Street, New York 5,
N. Y.

,

Memorandum—Sutro Bros. & Co.,

120 Broadway, New York 5, N. Y.

i

/

;

^Packard HeH Company—Mem¬

One of *lha mest-:stgnifica nt ac¬

complishments.Eightieth1

overseas.

N. Y.

;

! Also

••

Co.,
pany,

„

;

?

,

..

The
American people
over¬
whelmingly endorse the /principle
that there is no place for Com¬
munism within the structure of
i

j

*

owned,

"ontrollod. operated and managed

by the Federal Government. They 1

on

are
studies of
Electric. Illuminating

available

&

Con

'

available

this

-score

are

an

old

story in Washington. Jt has been
ten years since the Com¬

Seaboard

AirlineRailroadCo,--^

Columbia Gas Sysiemt-ineorpo;

C6;; l Walt'
'

j j Fabricon Products, Inc.—Circuli»rr--Baker, Simonds & Co.; IBiibl
Building/ Detroit 26, Mich. '.

{) Firemait*s Fund tnsoran,ce:Co><--/

published its (report naming

j Security Banknote C ompany—

4c Co;,%lnc;r 25 Broad

!

•

Str^,I.N<w

C-i

:■;

:v'

Public

Southwestern

Co^./EAiialysis-rrAmott, Baker Jkl
Co.,

Inc., /150

York ?,

-•

Broadway,

-

New
*'

•N. Y.

*

,

Bulletin-^-Lairdi1 Bissell :&;Meeds;

on

Communists and fellow travelers
in the Federal,

agencies,

conviction

of

a

But the

120 Broadway, New York/5;

N. Y.

not recorded until

1947!

•

i

Fuller Manufacturing Com pan y

.

on page

29)

Sperry Corporation .—^Analysis
opinion—^E. F. Hutton1- & Gou,.

mBroadway,^^/Newi York

Y.;

r—Study—William A. Fuller & Co.,

It has Deen suggested in high
1209 /South La -$alle JStreet,/ Ghi*
places that talk of subversives in
cago 4, III. E
government : is merely
a"red
herring." Yet we have: the testi¬
Giant Portland Cement —r.Dismony of J. Edgar Hoover, Direct \

(Continued

1

and

Communist

operating within the Government
was

{

Street/ New York 5/ N. Y. *

rated—Circular—A\rM.5Kiad^/&

Un-American Activities

mittee

first

of

Arialysis^-Vilas & Hiekejr, 491 Wall

*»

almost

first

leaflet

^L

\

.

on

a

i

the Federal Government.

mittees

is

comment, and a circular

ZT©dd>C0.

H

Hudson. Com¬

Fraehauf Trailer Co., Horned

was
the
against subversives within

drive

the Government itself:

Also

t

m'arket

Delaware

Spring Street, Los ;An-

geles .14,1?Calif.;

•

determined st^eOHiniitg

Congress

634 South

Columbia Broadcasting System,

Inc.—Analysis—Eastman, Dillon &
Co., 15 Broad Street, New York 5,

,

These

Company

Gas

Study—Granbery, Marache & Co.,
52 Broadway, New York 4, N. Y.

—Memorandum—Goodbody& Co.,

Cleveland

EEEEEb

% I i 4-13:J$0

of

'

—Detailed information for dealers

ijWe must drive the Communists

v {.Their- revelations ;I*noW;
coming
4:The-fourth step: has to do with, from the House and Senate com¬

the

,

lar—George Birkins Company, 40

Federal

'/Agencies;g/ Efe'b:;

be

taxes before it has a cent available

in

7

Arkansas Western Gas Company

.

/;

.

position to talk rationally of tax
reduction.
The average American
family today must set aside more

tax

Louis 2, Mo.

orandum—John B. Dunbar & Co.,

/first two steps can be

budget.

Boston

New York

reso-.

lutely in the direction of free /enterprise many of the Administra¬
tive problems which vex our po-.
litical judgments today gradually
will be resolved by the energy,
produence and common sense of
the American people.
And in the
process we will realize a tremend¬
ous economy in the Federal pay¬

plished if we are to work our way
back tb stability.

for the household

*

'

The time is not far dis¬

with a report for the
Eighty-first Congress next Janu¬
ary.
The Job will be difficult and
painful but it must be accom¬ roll.

we

Kansas City Public Service Com¬
pany—Circular—Scherck, Richter
Company, Landreth Building, St.

U.

with

.

If

will be ready

accomplished,

price com¬
stocks of

a

common

5, NY.

every new

chipped
off
our
Constitutional
system.: The Hoover Commission
is making a detailed study of this
facet of our over-all problem and

If these

tables—First

and

100 Broadway,

Corp.,

on

securities

Government

S.

problem of growth, ad¬
justment and progress.

this

decreased,

ol'

States

prehensive 74-page booklet

easy

not

the United

Securities of

liberty.

habit of creating a new Gov¬
ernment
agency
to
administer

Also available is

Government, 1948 Edition—Com¬

tant when we must abandon the

the

Curtis, 24 Federal Street, Boston
10, Mass.
parison

The
stability lies in the other

for them.

mately 575,000 people on the Fed¬
eral rolls only 15 years ago, and

the

address by Congress-

to

cular—Paine, Webber, Jackson &

Paper Companies.

the road
enterprise

Constitutional

Market—Anal¬

the

Ohio.

today is spending more than eight road to
The Government cor¬
dollars for every dollar it.tspentj direction.
20 years ago.
The Federqj)$Gov- poration is a recognized device of
Recent experience has
fernment today employs more than statism.
us
that
the American
2,200,000 civil servants, exclusive taught
of all military personnel.
This people can plan better for them¬
selves than Government can plan
compares with a total of approxi¬

to the larger accomplishment,
It has escaped public attention
wi&ch is the survival of our generally that we have today 86
American Constitutional order, y : Federal
corporations operating in
an

not

stocks.

Hollingsworth & Whitney—Cir¬
of

Position

have been

is

points

which

of economy in Govern¬
The Federal establishment

way

*From

we

It

traveling,

-

to make a be-gijtning toward reestablishing the
American system of' competitive
enterprise and freedom under law.

For

to

consistent and sustained

on

St. Louis.

Public Service Co. of New Hamp¬

tables of

ysis in current issue of "Informa¬
tion for Investors"—Otis & Co.,
Terminal
Tower, Cleveland
13,

economic life of

the entire country.
This is the road

circulars

are

Chicago &

York,

shire, and Public Utility Common

a

pal and corporation bonds.

full

ment.

toward

tojsppted if

step

Eight¬

you

it influences the

a

by
The in¬

a

a

and

sion, management and direction as

.

Also available
New

brief

Beatty Brothers Ltd.
provincial, munici¬

analysis of

second, you begin to glimpse
range of Federal intru¬

a

program

V

-

solved

step or policy.
which confronts

developing

today
4to§d
ptefr1

problem

is

hibition

*

,

second

looks to

is

of diplomacy and

measures

The

,

situation

same

tical

statesmanship.

Contained in the issue is

consider that the
Commodity Credit Corporation is
but one of 86 corporations and
that the Virgin Islands Company
the

\

Broadway, New York 5, N. Y.

Sons, 80 King

Street, W., Toronto, Ont., Canada.

engaged in all manner of
activities, including pro¬

When

They make a total of almost $20,000,000,000 in* the current fiscal
There can be no hope nor
Some
careful
students
of
the year.
<j»pblem estimate that an increase expectation that this burden will
be diminished until the peace of
-ipf 25% in our total educational
the world is organized by prac¬
expenditures would not be suffi¬
cient to restore the whole system

James Richardson &

duction,
transportation,
power,
housing, insurance and banking.
Many of these Federal corpora¬
tions have indeterminate charters.

account for
Federal

items

two

than

more

are

business

only because peace was not estab¬
lished after the war.

stabil¬

ity. The whole field of education,

overseas
confront us

Se¬

on

Gulf, Mobile & Ohio—Memo¬
randum—Josephthal & Co., 120

Committee Report points out that

to

which

commitments

ifrpnted today with a vast complex
^of social and political problems
which can be ameliorated only by
a

directly

going

are

-

Precision.

Investment Securities Review—

study of the powers and activities
of these 86
corporations.
The

tary expenditures. An additional
12% of our Federal expenditures

able degree of

data

are

120 South
Chicago 3, 111.

Congress the Appropriations
Committe of the House made a

budget today is directed to mili¬

consider¬

very

available

curity Banknote and Silver Creek

ethical branches

were

In the last Session of the

Broad

G. Becker & Co.,

Salle Street,

La

ieth

Federal

About one-third of our

proprietary and
—A.

aggregat¬

power

Data—Hei-

—

& Straus, 50
Street, New York 4, N. Y.
Also

launched
after
1933. They range from Commod¬
ity Credit Corporation to the Export-Impor| Bank, Tennesese Val¬
ley Authority, U. S. Commercial
Company, RFC and HOLC.

incompetence and indecision.

.

direct

lending

porations

trary, that the peace has been
bungled and frustrated, largely by

10

last

the

we

tress the peace

than

more

and

er

Hydraulics

Greer

merdinger

Drug Industry—Analysis of both

combined borrowing pow¬

a

ing $30 billion. Their outstanding
obligations today are about $12
billion. All but four of these cor¬

must organize and but¬
of the world. We
do not accept the defeatist's cry
that world peace is a lost cause.
The record is clear, on the con¬
First,

which has lost

40%

have

What, then, are the segments of
the problem of economic stabil¬
ity?
As I see it, there are six
basic approaches.

so

.economy

Troster, Currie & Summers, 74
Trinity Place, New York 6, N. Y.

major industries—G. H. Walker &
Co., 1 Wall Street, New York 5,
N. Y.

That is the broad task before the new Administration which
Washington next January. We cannot anticipate a thriving and construc-

national

-five

Common Stock Program for In¬

our economy.

over

firms mentioned will, b
the following literature:

interested parties

vestors—Brochure containing data
on
stocks of 50 companies in 23

of long-term

march of progress we must restore a degree

send

to

russion of interesting

situation—

j Wtoters

~

Crampton- Corp. -^ \

Analys»^-C; B. Unterberg & Co., }
61

Broadway, New York 6, N. Y.

i Also available is
Miles Shoes, Inc.

an

j

analysis of j

E.//T/VEk:/I2w

v

GOMMERGIAI; &

THE

large. At

The Real Inflation
^

Mr. Parkinson calls

>

Society of the U. S.:

lie

J

crease

surplus
this

urged

are

and

make

to

anti-in¬

flationary
of

billions!1

for

our

Wfc cry

in

-

campaign.

the' sense of urging the
people to avoid a cbh-

flagration While/ som£ -) of v the
people, and their responsible -of¬
rials, bh' existing

fires/4

that happens
in

increase

sudden

to

money;

a

the

quantity,
that which
is currfently used as* mone^/The
last report of the New York Fed¬
eral Reserve Bank say si ;that * in¬
flation lis always a combination
the dictionary Says, of

"deficiency i of goods J and su¬
perfluity of money." iWe certain¬
ly
have' the /'superfluity"- : of
money.
We had it at the end of
war

the result of Treasury

as

or

been

this); same

of i

hear

Bank

being

/

«

,

tight,

no

and

way,
com¬

(B)

stand

:

fixed

2^4
re¬

of Government debt.

those

inflation

deflation.v

who
now

cion't

under¬

predict early

;

/

Money rates are still ab-/

')'/'

the

bonds.

Banks hold abundant

Only
is

mercial loans are expanding.

normally low.

(E)

serves

'

.

credit

and
on

•

'■>

Reprinted,
York

by

permission,

"Journal Amer.can"

from

of Sept.

New
15.

/

$163

was

'h' *i,:
J'jf

so

v.

havie

monetary ex¬

a

with

adulterated

post-wai^perioif/:Ocjr
debt) (excluding 'the
savings bonds and handsjlield
r

Government

the)

Social

-

Trust

sons

and / oi
has: gone' doWri .$$9

Security,

-

funds)

billions

but

money /sfupply
'$18 "biUions/Thje;jfe^our:

;v*u*

/fqr )this op^osite) trehd of
-'and clebt cannotc be tcio

money

often

emphasized as:- t
The continued use by corrj-

' (1)

:

htercial/banks /of^reatdcl:
bank

deposits) to make" long-term

corporate loans/ real estate mort¬
gage loans ; and " investments in
bond Sf state; municipal and cor£o •

/ «/• V./)/ ?•/. (Continued on page 14)

rate.-

<of,

the

has

has .gone up

Discussidii■'/ of ?'■' our f mdnetary
.problems should never (lose sight
of the fact that Inflation is some¬
thing

(A)

.

cent yield

newly created money and its pur¬
chasing value decreased.;' During

pour/infammahle:.Jmate-'

ficials

end

few bar facts:

a

/ 1

*

1

to credit tightening,

politics,

commitment to maintain the

are the direct result Of
"superfluity" of money/ Our

dollar

.

of the

mass

the

as

■

None is likely under ex¬

prices

the
T. 1. Parkinson

of

out agaihst inflation, but

in

near

Finally,

(D)

pert to know that these increases

money in ^
real anti-inflation

only

are

•••', '/ ../# ;

enough to cause1

/You do not need to be

economist

an

new

a

30

v.-:-;?1

proportionately and

wages.

control

duction

June

on

r-V

<■

,

risen

the "pro¬

of

which

good.

drastic

deflation.

per

'irr&

During this
post-war, period
prices and the cost of living have

monetary au¬
thor i ties to
take ' '

-/''■)')//

•.

very

em¬

Total retail sales

up.

money

.7 W*

supply of
money.: '///'.
It
is
high
lime

Our

billions and

use

existing

our

*

are
;

Non-farm

equipment.

ployment is

policies during the
supply at the
end of 1945 was
approximately
$150 billions, up from about $60
billions just before the war; at the
end of 1947 it had risen to $170

ing, to save, to
buy E bonds
and

require

inflation.)

(Incidentally,
increased cur¬

No action has been taken

isting

most

banking

war.

spend¬

other

market.

to lags in some industries,
will find them few, largely
consumer goods, and mostly luxu¬

ries

to

>

v

you

people

avoid

prices decline, and the
will be taken off the

As

tunately, little of this talk deals with the real inflation, the huge in¬
crease in our supply of money; most of the talk deals with tjie use
made or to be made of the newly created volume of dollars.
/
j
The

will

rency

Unfor¬

We hear and read these days much talk about inflation.

farm

,

as

domestic

deposits, Government Bond support, and gold purchase policies, j

•

.

(C)

on

that is

Government purchases will in¬

production of /
new money in real anti-inflation campaign.
Scores adulteration of
dollar through new creation of money through commercial bank '

'

ahead.

A boom is

heavy goods, with much
shortage still apparent.
Look at
steel, automobiles, building, and

in

/

,

(1105) - ?

postwar slump.

a

we

non-

under
the
Marshall
Plan have been slow, and largely

monetary authorities to curb

on

1

/

more

CHRONICLE

Exports

*

President, Equitable Life Assurance

time,

same

farm goods.

By THOMAS I. PARKINSON*
;

the

able to buy

J will be

*

.

FINANCIAL

release^ by, Mr. Parkinson

,*A'

Continental

the

through

Press

Syndicate, Brightwaters, N. Y.

Deflation Not Likely
By LEWIS H. HANEY
Professor of Economics, New York University

of- deflation in :
suck turn of affair* is unlikely, since
tkereis no indicationof substantialreductioii in farm prices orin
exports, and shortages of both consume? and heavy'goods persist, j
Sees no ground for credit stringency.

Dr. Haney, commenting on desire and expectation

/

quarters, points out

many

The

same

who have been bearish for the last two or

persons

three years, remain bearish.
Their seeming hopes for a deflationary
recession are being revived by several current arguments, upon which
s o m e

.

c

Briefly the strongest "argu¬

this

ontinued

"forecasting"

probably

radicals

the

t

>

be

of

Russian
d ominance;

H.

the surplus.

t h

(2)

as

jewelry and furs.

■ ;

(3) Finally, the pessimists arr
gue that the action of the ad+

as

ministration ' in
-term

bank

will

cause a

requirements

reserve

timing to start up the "recession"

loans

talky-talk again just at the time

short¬

raising

rates and increas¬

money

ing

well ask: Is it good

may

stress signs, of

Others

,

is

results

in

mnch. tbe^ same
communism.
One

such

cer¬

so-called

e

'tor1

.

slackening, in certain lines oi
business—radios, textiles, shoes,
/men's
clothing,
and
luxuries

prefer

economy"* which

"managed

r

they

tainly

Haney

that domestic

and

reduced,

storage space is inadequate for

These may

but

so

cotton will

ports of wheat and

o r

desire

—

It is argued that still

say.

larger crop? are likely, that ex¬

private enter¬
prise."
j
not

and reces*

at hand are three:

Farm prices must break,

(1)
some

of

defeat

are

.and cause some recession

as¬

with

desire

that deflation

ments"
sion

cf recession is

sociated
the

—//—~;™

.

extent

Lewis

that to at least

But first it should be observed
small^——:—.

below.

comment

I

contraction of bank i

business

When you're in the spotlight and

recession.
.

the

when

Berlin

crisis

is

at

still

a

question
that they are get¬

factor in

and it appears

the

ting fed up with Russian methods
—at

least

those

Communists
it may

who

before

were

the

war.

is

of the

crisis

may

the "cold" battle of Berlin.




ft

%

•

decline

moderate

a

•'//-/

.

comment

desirable,

been

and

some

f

.

you're judged by your hospitality,

has
,

constructive..

*

there is only

one

choice...

2/

/,/•.•,,

/j

:J

the
decline in farm)
prices will be relatively small,
First,

So

because

well be that the deflation

peak

that

long

not

of

currency.

I

be

passed and the Russians have lost

■

further decline this Fall would be

propaganda here may be too late
-r-the

Kt

As to farm prices, my

-

Fortunately the German people
are

■'

.

a

critical stage?

precipitate

and

-

mean

the

A

Schenley Mark of Merit

Whiskef

By "relatively small,"

that

prices

will

prob¬

ably not decline in proportion to
the size of the crops. Thus the
total

fSCHENLEY)

of the\

inflation

farm

income

will

remain

s

Rare Blended Whiskey 86

Proof.''62%% Grain Neutral Spirits. Copf,-lS48/ Schenley D is t i 11 e rsC orp ora t id n t NOM»

Connecticut Brevities
•.

of New Britain and Waugh

promotion and service.

sales

*.

...

industrialist, has
been named President of the New
York.
New
Haven
&
Hartford
banker and

ton

Railroad.

Mr.

Whittemore is re¬

signing from the Presidency of the
Federal Reserve Bank of Boston.
The new President is a veteran

nearly

railroad man, having spent
and

Boston

Maine, 15 as

President.

to the

♦

&

-

Inc.

earnings for the 6 months ended
July 31, 1948 were $1.87, a little
higher than the $1.66 reported for
the same period last year.
* An
extra dividend of $.10 in addition

quarterly dividend

to the regular
of

$.25 has been declared, payable

';

Sept. 15.

Frank E. Wolcott has retired as

Manufacturing

Jiidd

He has been succeeded

S. Chick,
formerly sales promotion man¬
ager of the Grocery Division of
President

as

by Louis

Standard

Brands.

indicated

that

been

has

It

<

will

Wolcott

Mr.

the

reports

funds

Working capital and book
share were $26.32 and
$43.55 respectively.
The decline
in profits from the 1947 level was

well into
V'

shown

the

over

near

N.

Edison.

Vogel & Co., is

of The

Cp. at $20.62%;

The

Excelsior and

Company's

Standard
Plants
in
Torrington
was ended Sept. 2 wherl company
and union employees agreed upon
a
wage increase of nine cents an

further¬

interests,
while Mr. Chick will manage the
company's manufacturing opera¬
firm's

the

ing

hour.

V:>;V'

of

its

Michigan-Wisconsin

at par

Pipe Line Co, The latter in turn
Will use the funds te carry for¬
its

ward

proposed

line

pipe

from

natural

the

of

shares

gas

Stodk

Exchange
reports that trading vPiume in
August, 1948 totaled
173,393
shares. This compares with 217,845

*

*

.

Hart¬

New York, Nfew Haven &

Railroad

ford

has

funds

made

of the
15-year "secured -0%

available for the payment

,

.::v.:

company's
laonds, due April 1, 1940, Payment
$835.50 per bond plus accrued
interest from June 26* 1948 to
Sept. 1, 1948 ($9.05 per $1,000 of
original face amount)
will be
made on or after Sept. 1 by Irving
Trust Co.

In

its

6

#

months

Corp.

report,

showed

United

sales

of

of 1948 against $97 million for the

period in 1947.

for the

period

?igainst

$1.04.

estimated

pared

Net income

$1.92 per share
The backlog was

was

at

million com¬
at the end of the

$265

to $240

first quarter and while it was in¬
dicated that earnings for the third
and

fourth

quarters

handicapped

by

for

and

vacation

ducing

would,

plant

be

of

intro¬

new

expected to be
reasonably satisfactory basis.
were

on

a

Hartford

Electric Light Com¬
has called for payment Oct;
li 1948 at 100 and interest $70,000
of its 3% debentures due April
1,
at

the

Hartford

|3ank & Trust Co.
jf
* .'
«
o
'

Locke

Steel

Report for the fiscal
June

ings

30,
on

National

15

Chain

Company's
year

ending

1948 shows that earn¬
the common stock rose

from $3.17 in 1947 to $4.18 in 1948.
|>ales for the 1948 year were $3,-

ft39,673, an increase of 22% over
le

he

1947
net

net' sales

book

of

value

Aetna

$2,620,653.

rose

None of the proceeds will
to the corporation.

National Bond and Share Corp.

incorporated in 1929 and is
registered as a diversified, man¬
agement investment^ company of
was

closed-end

the

type.

Under

its

charter the company is authorized
to invest in all forms of securities
with

provisions prescribing
policy with respect to the type of
securities or limiting the propor¬
np

tion

of

its

assets

which

may

be

at $7.50

of its common stock to

The

American

Co. will

Metal

of

stock for

stock¬

common

record

addi¬

one

common

each share held to

holders

Products

Oct. 25 issue

on

tional share of

Sept.

terly

cash dividend of
share on Sept. 30.

per

•'

Carr
the

*

&

«

Co.,

'

50

*

for

the

from

taled

30

cents

per

year

1947, dividends of

calendar

$1.25

per

share.

In

the

shares

of

6%

cumulative

class

B

were

paid

from

ical

Sept.
of

build

to

and

equip

a

has

per share paid

into

entered

sale

of

a

an

arrange¬

issue

of

preferred stock (non-participat¬
ing), par $20 each, which should
net the

corporation approximately

in cash. The net pro¬
ceeds will provide working funds
and supply the capital required
for the

completion of the
plant expahsion.

of

program;

X::
A.

H.

have

Vogel

sold

to

Co.,

&

residents

Detroit,
in

Michigan at par ($1 per
share, 75,000 shares of common
of

Hartford 7-2669

Teletype NH

194

and

Boston

ucts

of

Danbury 5600

In¬

Interstate

Michigan

Securities

Consolidated

Gas

Co.

and« The

Whittier

through

Pierce*

Mer¬

Fenner

The

7-3191

directors

of

thej

extra

dividend

share

&

and the- regular.;

dividend

Gar Wood Industries, Inc. reports: for the quarter ended' juiy

Bendix

Corp. have declared

of

of

50

50

centa

cents

an

per

quarterly
shafer

per

payable Sept. 30 to holders

pf Tecbrd SepL 1L:

^ -

31^1948^ salesfof' $8,303;609^ atid
provisioh for Fed¬
With C. E- Abbett & Ca
$561,960, equal to 51
(Speciflil^; to 'TBS.; EiNANGIA£<vanONt(X.B)|
cents per common share. For the
LOS ANGELES, CALIF.—Harry
nine months ended July 31, sales
V. Barrett Jr. has been added; to
totaled $26*233,176 and net after
net profit after

eral taxes of

*

■:.

was.

$1,897*105*

equal

to

the staff of C. E. Abbett & Com¬

3277 Wilshire Boulevard, j

pany.

Sporn»
Gas
on-

President of
Electric Co.*
Aug»: 31
the.

&

two

companies

are

said to

Join TKomson & MclCiniibn
(Special

Established

to

The

Financial

Chronicle))

ATLANTA, GA.—Justus C. Mar¬
tin; Jr, has joined" the staff'of
Thomson
&
McKinnon, Healey
Building. He
Beer

&

was

previously with

Co.

-

•

L. A. DARLING
Common Stock

.

"

1919

.

iX

Members Detroit

Announcement

:Siock' Exehange
■

-

soon

on

New Method of

PRECISION CASTING

Michigan Markets

)

York:

7-3542

Member Detroit Stock
Exchange

DETROIT 26, MICH.

1051 Penobscot Building

vr

Woodward 2-5625

System Teletype: HF 365

1

T elety pe
DE 206

( S.

.«

£j J

?

DETROIT 26, MICH.

'

Telephone

-:iGUi^I:IIUfi-fiM.^lf) 1? 1.r-;ll-t. I HI

Moreland & Co.

639 Penobscot Building
,

Waterbury 3-3166
Bell

Marine

&

Detroit, Standard Accident In¬

Hartford and

BArclay

member of the

a

Fire

Co., Detroit. Stfefel* Prod¬

surance

Primary Markets in

New

Co.,

Cleveland

&

Co., National Cement Co., Planet
Insurance Co., Safe Deposit Co.

Charles A. Parcells & Co.

,

.

the

yCorp.,

Co.,

both

the

Stock

II




Lynch,

*

Hartford

of

Aviation

be more than $120,900,000.

and reliahil-

Associate Members New York Curb
"
Exchange

Co.

Detroit

director of the Bendix Aviation

Exchanges

New Haven 6-0171
New York Canal
6-3662

the

-Maviiatieh^Cd^ has been elected

*

&

director of

the' Chesapeake & Ohio Ry;

'

month

.

together
instrument
of

MEMBERS NEW YORK STOCK
EXCHANGE

New London 2-4301

rill

last

of Indiana Service Corp;
into Indiana & Michigan; Electrie Co. The combined assets of*

products,

York

a

Corp.

merger

higher rate than that of other

New

<,/
X

Beahe, New York# $6,000*000 of
its; 15-yeav 3debentures*

announced

Members

Chairman

the.. National

of

1

flexibility

great

another

share

each

#

Sj:

privately

Philip

Connecticut Securities

Chas. W. Scranton

placed

instrument

with

for

Buchanan*

American

a

share

additional

one

stock

Products,
Inc., which plans to market an

,?.

Primary Markets Maintained

i94S

common

.

Co.,

Radioactive
of

its

to

McLucas,

director

a

board

$1.74 per share.

Tifft Brothers

Security Insurance Co.

mailed

common

taxes

the

State of

greater simplicity

Life Insurance Co. I

1

On Aug. 11, Clark Equipment

America, Inc.,

competitive

$2^14

a year ago.

s!:

Pressed Metals of

Huron,

Walter' S.
and

Corp. He is also

at $14.50 per share.

%

ing

in that year.

3,227

Bank of Detroit and

a

stock

common

shares.

capable of counting particles at

total of.

Corp.

ing capital.

Port

par- ;

shares of

as
of record Aug. 10, 1948,
increasing the issued and out¬
standing common stock to 461,718

plant and for additional work¬
*

Co.

Sept. 8 In the pub¬

held

The

be. used

on

stockholders

Detroit, at 82.25 per
net proceeds are to

Co.,

share.

such net income' and 89 cents
per
share from security
profits, mak¬
a

Watling, Lcrchen &
ticipated

United States Radiator Corp. on

con¬

preference

stock, par $2, of Trenton Chem¬

stock

share

numbered 3,956 as

$3^78,797, against cur¬
rent liabilities of" $1,456,999*

surance

accrued, 16.2 %.

interest and dividends paid during
the first six months of 1948 to¬

year

totaled

and

posed public offering of 175,000
vertible

De¬

move.

tails of the proposed offering have
not yet been worked out.

(par $2.50)

and interest

Dividends from net income from

the

pro¬

$1,200,000

on

^ept. 7 authorizing the

Verne y

41 }/{
will be

dividends

Sept. 8, 1948. was approximately
$27.10 per share.

$500,000 to

June

Current assets at June 30,

early date, Dr. Willard H.
its President* announced
following action of the directors

lic offering of 100,000

Detroit,

underwriters

centis

the

,

of

an

will also receive the usual quar¬

cumulative convertible

share

At

compared with

employees

who

15

for

per

•

Dow*

ment

value

jY.'x-

•'

■

-

at

••

30, ; 1948>
$650,000 of that credit was being
used. Stockholders at the close

Metal Products
Davis &. Co. ; and
The Dow Chemical Co., Mid¬
Motor Car Co. Local;
land, plans to offer 100,000 shares

5V2%

asset

increased from

was

American

theEkcharigeiJ

v-4;

'

at the National Bank of Detroit

.

the exteht of 8.000 shares.

approxi¬
mately as follows: common stocks,
76,1 %;
preferred
stocks, 7.7 %;
cash im

Net

The

loans.

and

During - the last fiscal year,*
revolving
ercdit of.
Gerity-Michigan Corp., Adrian,

oversubscribed.

Corp.,

tion

receivable

bank

of
was

sales

of

the

$875,000;

underwriting

distributed

share. The net

per

participated in this offering to

active traders nit

than

more

from

income

1

together with other
funds, will I be Used to: pay: off

$3,500,000

tentative %

were

(par $1) of Con¬
Motors Corp., Muske¬

offering

issues continued to be the most

its

cn

United

the

Burroughs
and its subsidiaries during the
six months ended June 30, 1948
Was $50,099,740* as compared with
$30,898,528 for the same psridd
last year. Consolidated net earn¬
ings for the first-half of the cutrent year were-$6,604,781, as com¬
pared with $2,657,382 for the cor¬
responding period in 1947. Of
these earhi ngsi
$1,024,865 were
earnings of foreign subsidiaries
durihg the first half of 1948, as
Compared with $749,485 earned by
foreign subsidiaries for the first

proceeds,

Brewing

ex¬

current

six months of last year.
>•

stock

tries, Inc., Aveo Manufacturing
Frankenmuth

in

activities

service

Gar•» Wood Indus¬

master, Inc.*

invested in any type. On June 30,
1948, total assets of the corpora¬

banksj Uf. S, Government

pany

1967

Asso¬
Dealers; Inc>
The shares are being sold fqr, the
estate of Bernon S. Prentice.' de¬
ciation of Securities

;;■; vv.

Alstyne
Noel Corp.,
New York, on Aug. 19 offered
to the public 300,000 shares of
tinental

stoekA..

obligations,

shutdown

costs

models, it was stated
that operations for the year as a
whole

to members of the National

accrue

$110 million in the first 6 months

^ame

Sept.

ceased.
*

Aircraft

Co., Inc., publicly of¬
15, 31*00(1 shares of
capital stock of National Bond &
Share VCorp. at $23.50 per share
less 80 cents per share concession
Blyth &

1,

syndicate headed

banking

common

during
August were:
Detroit
Edison Co., McClaiiahah Oil Co.*
Gerity-Michigan Corp4, Electro-

Offering By Blytk & Co.
fered

Oct.

on

Van

gon*

inesL active

10

Packard

tions.

five

subscription

will expire

v-is-'uv.

by

.

and 299*196 shares

in July,

Co.," Parke*

National Bond & Share

The

each

'

A

shares

the basis

on

for

1948.
■v,

Detroit

The

held.

privilege

Hugoton,

share

new

stock

common

($5 per share)

one

field to Detroit.

Kansas

'

of

Co., Detroit, of
Aug. 30 have been given
right to subscribe for 53,770

additional shares of

stock

common

from

also to draw

resources

Total

stockholders

additional

Co.,

sales

#

Hall Lamp

r;-

■devote himself mainly to

%

the

The*

rington

«

common

C. M.

the net

use

but

States to the extent of

record

to

proposes

be

to

was

$5,300,000 since June 30, 1947."

V/r

In June.
The seven-weeks strike at Tor-

cash

II.

the board of

on

"As

available

earnings

directors.

share, for the account of the

subsidiary,

term.

of A.

added:

funds

atcmic piles at

member of the firm

a

which

pany's product line; strengthening
the
organization;
improving
manufacturing methods; and tak¬

improvement over the first
6 months, and indications are that
continued
improvement will be

tained from the

Oak Ridge. Everett C. Swanson,

Inc.,

proceeds of the sale td purchase

com¬

cided

ess

;

who

policy of financing this program,
without incurring long-term debt,
the company had not only lo use

to

radioactivity and proc¬
radio
isotopes1 to be ob¬

measure

'

(par $20)

instruments

During the first six months of
1948, Burroughs Adding Machine
Co., Detroit, continued its expan¬
sion
and
improvement program
with resulting record unit produc¬
tion and sales volume, according
to John
S.
Coleman, President,
pected, however, to carry out its

available. It will

now
manufacture

American Light & Traction Co.,

attributed to expenses
during the year in the

ing steps to insure long-range sta¬
bility and profitableness of the
company.
Sales in the last 6
months of the year showed a de¬

York,

Detroit
per

per

expanding- the

ity than

finance

to

if.

if

capital stock
■

year.

of

are

Y., publicly of¬
fered and sold 190,000 shares of
New

fiscal

value

par value, into
The net proceeds from the
ex-<^.■ ■. -rr.'- "v.:"-.'v.

company,

On Aug. 11, Blyth & Co.,

net income for the
year ending June 30, 1948
equal to% $0.42 per share com¬
pared to $3.93 for the previous
Co.

assumed the duties of Chairman of
the Board.

sufficient

with

Silex Company and

President of

provide

fjt

incurred

Alexander,,

m

debentures

new

to

1949.

interest
Powdrell

of

sale

its construction program

&

share of capital stock, $20

each

pected

North

con¬

share of capital stock, no par value.;

$10.54 the previous year to $13.12
on June 30.
Working capital was

the
assistant partially

quarter of a century with

a

and changing

tures
one

Bos¬

Whittemore,

F.

Laurence

«

-

stockholders of The Detroit Edison Co. Will

equal to $7.31 Per share.

bearing division, will handle sales,

Thursday, September 16, 1948

sider authorizing $47,000,000 principal amount of convertible deben¬

Fafnir-Waugh

lo be known as the

CHRONICLE

|§ Michigan Brevities
On Oct. 26, the

Equipment Co. of
New York announced they will collaborate in the manufacture and
sale of Fafnir anti-friction railway journal bearings. - Manufacturing
will be carried on at Fafnir's plants and a new division of Waugh,
Fafnir Bearing Co,

FINANCIAL

&

COMMERCIAL

THE

(1106)

10

)

Bay City

t: »

t

»

{-A 1 } )

—

Lansing

—

Muskegon

•-

Volume

Number 4734

168

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Missouri Brevities
In

Field

Investment

Sept. 17, 1948 (Chicago, 111.)

i; Municipal

week recognise and thank Henry Kuipefs

t May we this,

Abbett* & Xo.,

New.I York,

for

placing

^

hall-page

a

in,

ad

'•Chronicle's" NSTA Convention Year-Book Supplement issue.

dinner \ at' the i Kenilworth

the

Sept. ■ 16).-

Henry,

though a new member of 3TANY, has demonstrated his cooperative
Spirit and we are pleased to advise you of his assistance. ■ vi"

Wei. hope; all

our

members will

do

^Financial; Chronicle" .Convention Issue

their

Sept.

making

in

part

1

-

||

-

-A.-120.

■

j

v

annual election

yv

4 Members; of the NSTA Advertising Committee are: '

-

^

- •

:

.

,.

at

v

«

-

Sept* &V 1948 (New York City)

V

;

v

.

and dinner

ciation annual field day at Hype¬
rion Club, with breakfast at Hotel

.

Savery.

York.5, N. YC

<

City)

Iowa Investment Bankers Asso¬

;

Droadway*

New

York

Sept. 23, 1948 (Des Moines, Iowa)

SMITH, Chairman

Collin,'Norton'& Co.,

(New

Delmon's Restaurant.

Yearbook Committee, NSTA"

V

"

*'

B.

f

.

1948

20,

r

Association of Customers Brok¬

,

„-"BUY ADVERTISING"

HAROLD

/<

i

,

-L

at
.

Sept. 22, 1948 (New York City)

.our

ers

K. I. M. YOUR NSTA

dinner

and

Charles Hayden Memorial Tro¬
phy Gold Tournament at Baltusrol
G61f Club, Springfield, N. J.

big \success.^'';!,:* t:;-U

a

election

Palumbo's Cafe.

nov/

Your Committee > Will'have''a letterli&fyour'hands; y&cyj shortly

| ■
and

^ ;>:! |

Investment Traders Association

approaching the "40 and 8" mark, and those
ishrng for a further explanation, may consult any of the Comlittee to learn the up-to-date results of your Advertising Committee.
are

Club

'fe, .j,

17,"1948 (Philadelphia, Pa.)

Sept.

annual
We

"

Chi¬

of

field day at KnollCountry Club (cocktails and

Wood

jtlord^

of

Club

annual

cago

|

Bond

New York Curb Exchange Floor

Chairman:

Clerks

Association

Overpeck

clam

bake

at

Vice - Ch airmen:; /-H

■:k.

N, J,

.iM*;

John L. Canavan, Rauscher, Pierce & Co., Dallas
Bert

Horning, Stifel, Nicolaus & Co., St. Louis

»\VV

Barbier, G. A. Saxton & Co., New York

Chairmen

of

Local

Affiliates:"

"

-r •

.

-

-

Shoe

•!

t

\

-

party , of Security.
Club of St: Louis.

Gunn, Gunn, Carey & Co., Cleveland
Graham, Brainard, Judd & Co., Hartford
James F. Jacques, First Southwest Co., Dallas
Donald F. Brown, Boettcher & Co., Denver
•

v

E.

'

f

John

Edison

Nov. 14-18, 1948

Latshaw, Harris, Upham & Co., Kansas Citv, Mo.

McCready, Geyer & Co., Inc., Los Angeles
Early Mitchell, First National Bank, Memphis

(Dallas, Tex.)

f
.

(Hollywood, Fla.)

,

With Coffin & Burr, Inc.

[ Jack Rohds, John R. Lewis, Inc., Seattle
E.-L. Emmons, Reynolds & Co., Syracuse
Bernard Decheine, J. M. Dain & Co., Minneapolis

J
;•

CHICAGO,

.

-.

(

Coffin &

pointed
are

a

announces

!:

Atlanta

y y

<

y

I

Carolinas

in

merger

of

for

ex¬

connection

Hyde

Association

with

ported

D.

basis

tp

He was for-

The 'FinanciaI)

509,357

year.

established

Co.,

it

for the

$4.93

or

per

shares

common

Sales for the 1948
a

new

year

high of $17,735,-

St.

As

assets

with

$16,453,171

12 months ended

*

1947.

Park

Inc.,

Griesedieck-West-

Sept.

of

6,

four

of

June

June

30,

totaled

1948,

current

$5,290,522,

against

current liabilities of $2,254,896, in¬

:

will

be

the

on

cluding $1,000,000 of bank loans.

of

Griese-

new,

to

be

au-

thorized and outstanding: fol¬
lowing three-for-oiie split-up in
Park

Hyde

stock

held.

This

would place an aggregate value

Chronicle)-

Hyde Park's assets of about

on

John E. Miller With

Newburger, Loeb Co.
v

Newburger,

Broad

Loeb

New

Street,

members of the

New

&

Co.,

York

York Stock

$6,500,000, according to current

Exchange, announce that John E.

market value
Western stock.

Miller, market analyst, has joinect
their' staff.;.y"

Waddell

&

Reed,

Ine.v

332 South Michigan Avenue,

for

Griesedieck•'

.

They

"

Consolidated Retail Stores, Inc.,

St,:Louis„Iiad sales of $2,628,970
in August, a gain of' 20!1% over
the
$2,188,403 : reported for* the

|
;

(Speciti)('^to The Financial • Chronicle)

.

ANDERSON,, IND

D. Jennings Lucas, G. H. Crawford Co., Columbia

!'

Carr has

~

Nelson H.

been added ta the staff

same

first

month

eight

last

i Fot

year,

months

of

the

ST.

LOUIS

this t year,

Chicago

of Vic-»Wikle^iS^ Associates, Inc., sales amounted to $20^85 677r an
Larry A. Higgins, Hulburd, Warren & Chandler •.
Franklin O. Lqveland, Field, Richards & Co,"
Citizens: Bank Building.'; *
incre^e vol; 11.4% over the $ 18,!
Andrew Tackus, Putnam & Co;,: Hartford^
Cleyelaiid
" ^
Morton A. Cayne, Cunningham & go. ;
Dallas
Louis W. Stayart, Jam,es & Stayart, Inc.
JDetroit
William Moore, McDonald, Moore & Coy V:/l
Berkshire Fine Spinning
Denver
Malcolm F. Roberts, Sidlo, Simons, Roberts & Co. '
Black, Si vails & Br y son r
Florida
H. S. Wheeler, Leedy, Wheeler & Alleman, Orlando
Houston
Claude T. Crockett, Moroney, Beissner,& Co.
Commonwealth Gas
Kansas City, Mo. Laurence B Carroll, Prescott, Wright, Snider Go.'
Consolidated Dearborn'
Los Angeles
William P. Bunyan, Edgerton Wykoff & Co.Louisville
J. Berges Reimer, Berwyn T. Moore & Co.
- y
Delhi Oil

Cincinnati

,.

Connecticut

.

Peltason Jenenbaum Co
BUILDING

LANDRETH

ST. LOUIS 2, M0.

;

..

Memphis
New Orleans

H. Wilson Arnold. Weis & Arnold

New York

J. M. Mayer,

Philadelphia
Pittsburgh

| Moiintain Fuel" Supply

Edmund J. Davis, Rambo. Close & Kerner, Inc.
Earl E. Sweitzer, E. E. Sweitzer Co., Inc.i

Portland ;'

-

:

St. Louis
San

Francisco

Seattle

>

;

John R. Thomas, Blair & Co.
?
Ernest Blum, Brush, Slocum & Co.-

ci

'

gtve the National

suggestions
.

,

Southwest Gas

Producing

;

^

y

c:

Bought

SHd^Qu^pted*,

INVESTMENT

^*./

may

have a

.

on any

v_y ;

a

cross

section

of

opinion and constructive

proposed changes in securities acts or regulations.

.v.( Continued




on page

4.6); --v.- V'.

-.y;-;

SECURITIES

509 OLIVE

.

"grass roots" sounding board connection with each affiliate and

thus

Mfg..

Southern Union Gas ;

Donald C. Sloan, Sloan &: Wilcox

J ,: . The purpose of this is that the National organization
real

Rockwell

'

Merrill Lynch, Pierce, Fenner & Beane

Edward Easier, F, K. Easter & Co.■
:
William J. Lau. C. S. Ashmun Co., Minneapolis

Twin Cities

L. D. 240

Teletype—SL 486

|

Howard Ross, Left wich & Ross
^ u
,
..
Chas. W. Warterfield, Cumberland Securities Corp.

Nashville

15

City,

Herrick,

ap¬

f

30,

;

re

was

shares

dieck-Western

i

Ralph F. Carr^ Ralph F. Carr & Co.

.

Burr, Inc.

This compared with

$2,566,179,

.

Lex Jolley? johrison, Lane, Space & Co., Inc.
J..Creighton Reipe, Alex Brown & Sons'J-i- '*■

-

Baltimore
Boston

^

William

on

the

stock

common

CHICAGO, ILL. — Anton It M.
Miller
is
now
connected
with

Co., Detroit, Chairriian: of the

that each of the 27 affiliates of NSTA has

?

stock

Brewery

ern

He«rick|| W»jridl Adds
(Special

representative to the Special Legislative Committee.

follows:.

as

of

basis

October, for each five shares of

Special Legislative Committee of National Security Traders Associa¬
tion, Inc.,

—

share

divi¬

on

;

hierly with the First Boston Corgi.

NSTA LEGISLATIVE COMMITTEE

Paul I. Moreland of Moreland &

ILL

of

of

share

.

tentative

the

Louis,

Hilton has become associated with

R. Emmet Byrne, Dempsey-Tegeler & Co., St. Louis
Collittf L; Macrab,?1Jti, Wulff^^ Hdrisen & CoJ- San Francisco T:
David A. Balfour, Russell, Hoppe, SteWart & Balfour, Portland
Charles C. King, Bankers Bond Co., Louisville

*;

Financial. Chronicle)

shares

net

preferred

per

783,^compared
The

change

The

after

$1.31

outstanding,"; for-preceding;

Breweries

to

to

outstanding.
a

ended

fiscal

with

(Special

equal

555,647

as com¬

year

months of the current year, sales

Thomas

•

Co.

totalea; $47,838,439," against $44,157,717 for the corresponding pe¬
riod last year.

Beach Hotel.

O'Rourke, Stroud '& Co., Inc., Philadelphia
Herbert Pettey, Equitable Securities Corp., Nashville
Joseph H. Weil, Weil & Arnold, New Orleans
Charles N. Fisher/ Singer, Deane & Scribner, Pittsburgh

August,

pared with $5,462,047 for the same
month/in 1947. For.the first eight

j Investment Bankers Association
1948 convention at the Hollywood

William

Store

Co., St.
reports sales of $5,265,632

Louis,

National Security Traders Asso*

Dec. 5-10, 1948

Brothers

for the month Of

ciation Convention.

\ Neill T. Masterson, Jr., Chas. B. White & Co., Houston
>

Shoe

Boot &

30, 1948 amounted to $816,-

dends

oassing through Chicago On way
the Convention.

i
.

556,

Bond Traders Club of Chios ef
Luncheon for members of NSTA

Clarence A. Horn, First Michigan Corp.,- Detroit
r»
^
T. Nelson O'Rourke, T. Nelson O'Rourke, Inc., Daytona Beach
J. F. Settle, JT. H. Hilsman & Co., "Atlanta

|

to Ham¬

name

Louis, for the fiscal

June

Traders

Nov. 13, 1948 (Chicago, IUJ

I Clair S. Hall, Clair S. Hall & Co., Cincinnati

'

St.

Tentative date for annual elec¬

tion

Koerner, Mitchell Hutchins & Co., Chicago

Clemens E.

announces

[ Net profits of Chase Candy Co.,

Oct. 11,1948 (St. Louis, Mo.)

| E.; B. Wulbern, R. S, Dickson & Co., Charlotte

,

of the Eastern

*

;

John

of its

Walsh

&

Louis,

ilton Shoe Cor and the purchase

Association

Bankers

Sclieu

St.

Co,,

the change

American

.

Charles Gross, Harry M. Sheeiy & CO.* Baltimore !
I. Arthur E. Engdahl, Goldman, Sachs & Co., Boston #

1

.

74th annual convention.

}

Star C.

,

Sept. 26-29. (Detroit, Mich.)

| Donald E, Summerell, Wagenseller & Durst, Inc., Los Angeles
Leslie

/

Hamilton

I

Park; Ridgefield Park,

~

SCHEUCK, RICHTEL COMPANY
<

t

:C

-

*

•:

Landreth Building

-;

Bel! Teletype:
SL 456

■

:

A1,«_

9

St. Louis 2, Mo.

v

STREET

St. Louis 1, Mo,

^

>

*

Garfield 0225

? r

L. D. 123

Members St. Louis Stock Exchange

v
-

COMMERCIAL

THE

(1108)

12

&

FINANCIAL

Thursday, September 16, 1948

CHRONICLE

HP I Were

Retail Salesman"

a

(Twelfth of

//
r

By HENRY HUNT

C/

7/

„

There
f

frospectui
your

upon

request from

investment dealer,

National
research

or

"If I Were

:

The twelfth

from

.

a

securities

in Charge of Sales for Hugh W. Long &

a

play on Broadway

of New York StocKs and Manhattan Bond Fund and distrib¬
Investors.
' "l
I '* , M .
.
i
Although Gene has been in the "Street" since 1926, he has been
the selling end of the business for only a few years.
Prior to

to
•

joining Hugh W. Long, for some years he was in charge of Fenner &
Beane's large investment research organization with more than 20
men
working under him.
Today, when Gene hits the road, his
office can follow his route by watching the sales pick up in the
territories he has visited.
ti-'V';.

"What Is
Bullock

Fund, Ltd. '

Dividend Shares, Inc.;

Nation-Wide Securities Co.

In an interesting'

Stock?/V

Growth

a

•,

pTO<pectu*«,,i..

•.

.

availablev J,

r

Established 1894

I

/

newfolder, CalyiUiPuUogk;

INC.

-

now

INC o*

48

WALL

A?tC>

substantial profits as the

STREET. NEW YORK 5, N Y.

Austrian crisis

1938
1939

Czechoslovakian

Polish

crisis

1939

crisis

Danzig

crisis

inverting tlieir capital

end

of

the

V

/ V,-./

PREFERRED STOCKS
!

(Series K.1-K.2)

;

COMMON STOCKS

of the

in the

Prospectus from

:r

lucid investment dealer or f V

buying securities as matter-of-factly as they would walk
deposit money iri the bank.
We are discussing, of course, Mutual Fund shares.
The

down the street to

Keystone Company
„

50

of Boston

>

Sb




;

were

a

;

retail, salesman*. I'd

*

certainly want to be/,

participating in this "growth" division of the securities
means of insuring my own personal future.

busi-V/

-•

"It has been estimated that there are between 15 and 16
stockholders.

American

This

means

that there

are

almost

million

as

many

Both groups are
important consumers and it is necessary that their real buying power
be sustained if we are to have a healthy economy,
Actually, stock¬
holders have fared badly over a period of years.
"The accompanying diagram illustrates changes in the real buyir.g-power income of certain labor groups and stockholders since the
pre-New Deal year 1930.
These figures have been computed by ;

stockholders as there are members of labor unions.

,,

taking an average rate of pay in each industry, subtracting Federal»
taxes

income

base pay

at

applicable to single individuals with $3,000

rates

and adjusting the balance for changes in the cost of living-1

Wage earners have improved their buying power positions whereas;

stockholders'have retrogressed considerably.

But a change for the

as

'

by Default"
PERCENT CHANGE IN REAL BUYING POWER OF INCOME
1930 TO 1947*

MINER

COAL

TEXTILE

by Default' usually means that: the investor is un¬
to what he should do
he needs help. ; :
.

.

.

AUTO

he obtain this needed help?
He may do it in two
ways.
He may seek the, advice and guidance of a competent and
experienced investment dealer—and he may find such help through
professional investing companies.
r'
'
"
,V
1
' °
'
"The present is a time when investors are finding it particularly
difficult to make definite decisions." Yet, whether these decisions
affect but a few hundred, or many thousands of dollars—continuous

WORKER

WORKER

may

SMALL
STOCKHOLDER

.

Rich Man, Poor Man
The following excerpt from Hugh W. Long's "New York Letter"
clearly illustrates the divergent trend in the buying power of earned
and

those of the Mutual Fund business and ///

are

bf certain individual companies.

If I

WEALTHY

unearned incomes during the

past 18 years:

•/. /

0

STOCKHOLDER

professional help is available through mutual funds."—Quoted from
George Putnam's "Prudent Investor." v-

Congress Street

Boston 9, Massichuiettl

statistics cited
T

better' is taking place!"

,

Xke

amount time and time again over a long period :
These clients, lik^ other - repeat purchasers, are -/

same

of years.

'"Decision
"How

fSHtr

.

•

additional income.
i

past four years, some 43 % of shareholders made repeat

purchases.
Of these, more than half bought three times,
30% four times, and, some 16 % • five times or more:
These
same records also show dollar averaging accounts with sales

How easy it is for investors to simply
postpone action when the question of 'what to do' is a difficult one.
"Yet, in 'sitting tight'—in evading positive action—whether for
a day or for months, a decision has been made.
In postponing action
it is simply 'Decision by Default.' ; And it may be costly.
."We have 'Decision by Default* when investors fail to keep in
mind this one basic thought—that idle money is sterile money.
Capi¬
tal, whether it be the savings of a lifetime—an estate—or perhaps
a large institution of some sort-should be employed to produce an
•

in unfavorable- /

sion has called this growth "the most important single devel¬

'Let's not decide today.'

certain

(Series S1-S2-S3-S4)

year.;

"Decision

1N
BONDS
CSeriei BI-B2-B3-B4)

51

24

loss of 6% in 1900."

a

"

| INVESTMENT FUNDS

.

23

will be more noticeable from now
Our program of aid to Europe has been
slow in getting going out will be a strong influence in coming months.
During election years since 1900, the month of September has pro¬
duced movements which have ranged from a gain of 11% in 1916
the

to

Certificates of Participation in

'

20

51

/,/;.

The influence of tax reductions

to

]:

13

present there are a few weak spots in some of the minor industries
but the demand is still strong in the pivotal sections of our economy.

Tunas

|

*ic

mind

Custodian,

reduced risk

•

96

24
-

4

opment in the financial history of the United States during
the past 50 years.".
People who own these securities buy again and again.
Research into stockholders' records shows that Over a period / ;

38

"September is. a month when the market has often made up- its
and started on definite moves.
Perhaps the explanation is
that business trends are more clearly defined after Labor Day.
At

Keystone

•<-

7:.',

1948

55%
28

17

?

10

1939

-

Berlin crisis

}'

7.j

*

ness as a

24

22

-

:
4 ; - There is a way: toward that goal.
is to. sell the kindF of -investrndnts that-t- - * r 4
Provide a service which customers need, in^ good

(a)

-

Days

53

14

-

future.r

give him more time for his own profession of selling and ? y
clients.
"
Is all this fine-sounding theory? Let's see.
Retail sales
of the kind of securities we are discussing increased some J
37% while volume on the New York Stock Exchange re¬
mained at an all-time low in 1941-1942.
Sales have increased
fivefold since then.
The Securities and Exchange Commis- vi¬

obtained

% Rally

% Decline Days
27'/2% / 31

1938

Munich crisis

.•

permanent building for my

servicing

following figures show:
Year

own

I would 4.

work in clientele 4

need to do research work in

Also in declining

people who bought near the end of those war scares

the

again.-'/*':#*h
retail salesman, that is

Moreover,' they leave the retail salesman free of the
individual securities and thus

in

during the uncertainties of. foreign • developments it has acted much
like it did in 1933 and 1939 when there were five war scares.
Yet

HUGH W. LONG & CO.

}

was

profit in favorable markets,

be in a better position to respond tc

which is normal both in extent and time.

a

markets.

change for the better in the foreign news. It has gone through
correction of its sharp 26-point rally from February to

June,

Dealer or

over

were

*

technical
f rospectui from your Invtttmenl

"play"

(b) -Build up confidence so that customers are prone to?
buy again and again/regardless of price levels.
**
/
(c) Make buying securities as natural;a^. taking out in- .
surance of.^depositing money in the bank.
:
Such investments do exist.
They offer services which ;
investors need—more dependable income, the 1 certainty of ;

indeed is the

market should

-

times and in bad/

"

"The
any

The pass-*

That way,
:

Market Awaiting^ Better Foreign News
Ralph Rotnem, Harris Upham's sound market commentator, has
following to say about the market outlook in his Septembei

the

I

building
Eugene J. Habas

real 'growth' stock.

'Letter":

■

*£

bull market takes him on up

want to know that my

<

This meani that the purchaser of a security
becomes part owner of an expanding American business enterprise
and, circumstances permitting, goes right down the line, ignoring
the mercurial price movements occasioned by successive bull and
bear markets." 1

Bond Fund

a

^a;pitfall I would want to avoid..

recent article in the New York 'Herald Tribune':
investor who ties his financial destiny tc

a

/-7
with the

closed

act

again sitting at his bench.

4 /f If

,

a

the fourth

business1 all

>

ing, the
yield 9%, 10%, or'more.'
,
■«-. v
"A low yield, on the other hand, often presages an increase
the dividend or larger earnings, and higher prices for the stock.

large fortune.
"To quote from

But

where he started,
tackling the job of building up a paying

'Generally speak¬
surest way ;to financial Suicide is to buy stocks selhngtc

"Fortunate

/

is over, he is right back

"

a

which

different world.

'

in the income scale, but when the

V"
"The adage, 'You can't eat your cake and have it too,' applies
rather'aptly to the purchase of common stocks.' If *y.o'u;bUy !a stock
;ihat pays out all its earnings in dividends, you can't expect it to grow
in value as well,
■»V
.
."
"Growth stocks, properly selected, have been the basis of many

Manhattan

a

port of

question as follows: * ". /•<»«<. * ♦
- < v>"" ~u i
'■' \ s j ' *•
"A growth stock may be defined as the common stock of a com¬
pany that has shown above average growth in sales and earnings
for a number of years, with favorable prospects for a continuation

about to decline, or both, v
"
.
>
'A prominent investment counselor once said:

'

is in the position of the tailor.

>

CALVIN BULLOCK

ago

The securities salesman all too often

growth^;#;:#'?;^'?^^'^::^
"As a rule, the current dividend return on such stocks is below
average because these companies pay out only a small part of theii
earnings in dividends,; retaining the major part in the business tc
provide for further expansion/- Experience has shown that, through
the compounding of earnings plowed back into the *business, the
growth in value of such stocks -makes them most profitable holding!
over the longer term*
™■■
; /;■.> "
"High yields on individual stocks are frequently a danger signal
Indicating that dividend payments are in jeopardy, that earnings are

Vj| j

"

tailor

Of such

">'{2

years

many

-'i

grand

utors of Fundamental

in

was

V

\

ballroom of the local Waldorf and fraternizing
S:',r-T
with the "best" of society.
The differ- -;
ence between his tailor's apron
and the
dress-suit was all the passport he needed

the

Co.,

sponsor

ISO BROADWAY, NEW YORK 5, H. Y.

•T.:!'&%

opened with a tailor sitting at his bench cutting out a fulldress suit.
In the second act he was wearing the suit in

contributed by Eugene J.

article in this series was

llabas, Vice-President

corporation

'

Retail Salesman"

a

Series)

a

J „
By EUGENE J. HABAS ! Vice-President, Hugh W. Long & Co.

r

^Computations made by National City Bank of New York. Small
stockholder is assumed to have a taxable income of $3,000 and
the

wealthy stockholder

a

taxable income of $30,000.

;

-Volume 168

School

FINANCIAL; CHRONICLE

Thet tenor

V

characteristic

of

Financial results in

,

from fellow-Americans,

support even
:

Receives little

against

attacks

V';;///:--

.?'■

the : United

"'V

,

<

■'

■■

^

/'

/v'/-

HOVDE

except

'and

for

two

three

or

English

•

speeches and
all

heard

we

y.C

men.

each

enough

to burst. After

first

the

speech, by the
ist Fadeyev, a
;

v

speech which
for vitupera-

•

.

J- Hcvde

yn

excelled

tion

which

and

was never

the

set

tone

for the

to

ditions.of its
want

an
But when

look at it and exclaimed:

one

This is going to make
stink, you know!"M By
badgering I finally got the floor

say!
quite a

to this conference

intelligent par¬
ticipants from many lands, meet¬
ing under the rules of free speech
and faiir play, with an earnest de¬
sire to learn from one another,
might discuss the cause of war

Somebody sent for
Fadeyev" and he came hustling in
to hear. Then he got very busy in
the USSR delegation, the upshot
< £ which was the designation of
David Zaslavsky, veteran Pravda
writer, to answer me. I wound up
with

strong statement of democ-

a

l

racy as the only basis for peace.
TIo speaker, at the Congress; got
•
a colder? reception: Ohly ?a5 hand¬
ful
of
Americans
and
Britons
•

<

lapped,

and

Ceylon

V/hat

who

I

said.

The

from

guy

didn't,; quite

Speaking

throwingflat
lake.

nice

one

know

like

was

\

.///

4

finely

any

resolution

worded

of

processes

kind

as

■

'

at

with

need

He

come

continuous

a

of

vast

a

de¬

expansion

requiring unprecedented

up

income

other hand

$425

$1,219 mili60%. Oh

was

$456 million,

million

cash

in

or

dividends-oil

1947

bank's

series

28%, because of the reinvestment
in the business of $794

subsequent

at

could

hold

/: •

dollar

of

dustry

"stockholders'|o

able to bring about an

was

(Continued

on page

r

damned
the U.

in

little

the scientific

in

far

more

spirit,

for

This announcement

s

The

neiiher

an

offer to sell,

nor a

solicitation of an offer to buy

£•

securities,'

any

offering is made only by the Offer and the Purchase Warrants referred

to below.

To the Holders of Bearer Share Warrants

;

'

modifications.

But

even

in

final

; form six others and I found it

un-

acceptable and voted "no". There
were

also

a

few British;

holy hell from

some

We

other

bers of the American

got

mem-

delegation,

•

but stood

ground. We insisted on
reading of a statement on our

the

V. behalf

and

names.

the

Now*

we

reading of our
go about with long

heavy woolen mental underwear
fend

off

.

to

:

Americans

i graced
The

-

the

them by
reception

"White

House"

last night
except

icyness of other

who ;; think,/ we r dis-

was a

for

the

"capitalists

and

'

our

reactionism.
Polish

at U the
here

in

nice,

cozy

Warsaw

affair,
presence
of us
imperialists and

imbeciles.?

t'i;

;k

'?

'■

;r

.i

»

ith

:'vViV

f-

j,,

Rights, evidenced by Purchase Warrants, to purchase and to apply for /

should
than by

we

8,728,190 SHARES
fully paid and non-assessable, of Common Stock

Fadeyev's ad¬

without nominal

or

value

par

yesterday, and to some ex¬
of others, were very

Mfcy

those

tent

US

\f//.:.

American Delegation ?

.

./

meeting of workers of the

mind and the arts^ in this war-rav-




praise

Great

If

Britain.

responsible member of

a gov¬

•

*

are

by

a

ernment,

this

was

kind

the

,

;

-

.

atthepriceof

,

•

•

'

'

,

$9.20 (United States Dollars) per Share
*

made

and

>/;

,

the
the

to

'

;

,

? v

* '"it 4

?

^

~ r

'

^

11

f

1

%

'

J j]

>

t

f

{

t

/
;

^

s.\7/,

»

being issued by Imperial Oil Limited (hereinafter called "Imperial") to its

shareholders.

Such

of

rights

will

expire

at

3.00

P. M.

on

September

30,

1943. /

speech that would be made to give

propaganda-justification to a pre¬
meditated
military
attack.
It
would only have the effect of cre-c
ating division and disillusionment
in this conference for peace.
The

worst

of

it

is

that

Mr.

Fadeyev appears actually to be¬
lieve the completely wrong pic¬
ture he painted.
His particular
kind of "science" compels him to
believe it, no matter what experi¬
ence and facts may stand
in the
way.; In my country we come to
different

keep

conclusions,

-

and

them tentative, because
no superrevelations or

follow

Imperial has appointed MONTREAL TRUST COMPANY at its offices in each
i of the following cities in Canada: Halifax, Montreal, Toronto, Winnipeg, Calgary and
Vancouver to act as Agent of Imperial for the performance of the various ministerial
services required in connection with the Offering.
/

'

we
any

A

copy of the Offer and the other material pertaining to the Offering, exclusive of
the Purchase Warrants, may be obtained on application to MONTREAL TRUST

COMPANY, Agent, at
■

we

one

of its offices specified above.

/■/

/

v

5;

?

-

In order to obtain the Purchase Warrants to which they are entitled, holders of bearer
share warrants of Imperial must present their bearer share warrants, with Coupons
Number 70 appertaining thereto attached, to the said Agent, at one of its offices

specified above, at or before the expiration time specified above, whereupon the said
Agent will return such bearer share warrants, together with the Purchase Warrants
issued in respect thereof and a copy of the Offer and the other material pertaining to
the Offering, after detaching said Coupons Number 70 as-evidence of the issue of such
Purchase Warrants,

f

.

.

.

...

....

•

,

'

v •

party line, but search for the facts
and make them teach us the truth.
Mr. Fadeyev does believe that
as

he

painted

it.—

Aug. 28,
*?; To this

unstinting

the United States is

BRYN J. HOVDE

INTERNATIONAL PETROLEUM COMPANY, LIMITED

the

USSR and utterly condemned

If

?*■*;:»-■?,';i:•?•''Statement by ••■&&$£■ "■ '

;r,

IMPERIAL OIL LIMITED

discussion

peace

That is why Mr.
dress

gave

support

S.

30)

L '

A

t

conferences,

serious

imperialistic, expansionist^
decadent, immoral — and if this
doctrine
is
believed
by* others
within

his

party

(Continued

wherever

on page

25)

that

or

65% of the earnings. This relative¬
ly large retention was necessitated

tween the USSR and the US. He

had

million,

at- inflated

expenditures

J

man¬

plaudcd him.
As a consequence,
Huxley and Lady Huxley prompt¬

ap-

represented
million, or

increase of only $94

an

■

Mr. Fadeyev did not
possibility of peace;
he assumed the probability, if not
the actual existence, of war be¬

however,

delegation. We
put up a stern fight for a good
jesoluiion
and
got
substantial

•

capital

the

net

the

sad to hear.

I

-

provides

the

out of this conference

assume

even

;

program,

accelerated

and

lion,

by a rise of $699 million, or 51%.
circumstances, the
in capital expenditures to
$2,076
income soared, but so did
petroleum department, and Fred¬ the
capital
requirements/- The million in 1947, thus illustrat^fg,
erick G. Coqueron, staff associate,
matching, of these two items was the survey emphasizes, "the cbfti
supplements previous reports and so closely achieved that the in¬ tribution of the
in ' charge ? of

only we set the precedent of
talking honestly and solemnly to
one
another instead of, as usual,
to ourselves.
If here, and I would
we

out

wartime

••

dent

if

hope

conciliation.

more

got frozen

and

:

review, prepared costs, the study adds.
by Joseph E, Pogue, Vice-Presi¬
"Under these

rewarding

strengthening

milf-

,

the

of

annual

,

ly left the Congress and flew back

,

This

those

velopment

the

on

$10,485

increase of $2,934

an

whole, laboriously re¬
moving the i causes ) of /possible
conflict.
Nothing more specific

off

'id Paris.'

•

inflation

of

million,

a

lence while. others,

.

effects

per

cleverly!

or

but ? immensely

slow

by the USSR
delegation, which sat in stony si¬

-

are

proclamations.

but

;

the

barrels

111 1947, as compared with 1946,

1946,

peak; stumulated an advance in
petroleum
prices, / resulting- in
sharply increased gross and net

petroleum industry's operations.

the end ..of,
this.r conference. 'One > doe?* not'
protect the peace by proclama¬
tions.
That is done only by the

do

too

ceeding

not much interested in the

adoption of

Julian Huxley spoke just after I
did, in somewhat the same vein,

•

the

by
Sept. 9.
financial

,

am

distance,

•

time,

J

/

total income amounted to

Resolutions Unimportant
I

icy

into the

-

.•

orrian

the audience and bounded

first

Coqueron

issued

was

of; 569,000

an

be forever fixed.

ricocheted

stones

words

which

representing

11 %. ^oyer

or

presented not only ir
dollars, but also in
income;
"prewar" dollars, thus measuring

through us ; for our peoples, the
will to avert the next war would

Commu¬

nist ideology.

Operating Results Increased

.

.:
lion,. or : 39%;; costs; and other,
This impelled the
.industry to deductions totaled $9,264 millioi|,
approach capacity operations, ex¬ a rise of $2,478 million, or 37%':;

"current"

intentions that for

; The hall became still as death, so
j I had a good chance to tear into
Fadeyev and the whole

the

results

•

.

'

For

another's problems and good
us at least, and

one

1947,"

Frederick

the Chase National Bank

in the hope that

.

at the last moment of discussion.

.

Joseph E. f ogue r
for

come

A11

rise in demand

a

products

increase

the peace.

I have

its

day,

together to promote the
welfare of all peoples and to keep

postponed. One of the interpreters

;

for

And they
world of free states asso¬

a

.

took

;

petroleum

life.-

own

pre¬

of its 30

part

a

the

challenged with

con¬

Congress, I got busy and
answer,, a
tough one.
and
the foundations of
culture
the translating section
and of freedom.
In such discusgot hold of it my request for a
1"
*
Ua
f.peaking spot was postponed and ! S10n
s my
all find so much understanding of

rwrote

*T

.

the

determine

as

peacetime inerease over 1946 and a larget
study finds, the advance over the five-year base
industry in 1947 was period, 1941-1945.
/ 1 '

operations,

ciated

novel¬

Soviet

not war. They want
and equality ahiong all
They want freedom within

state

between

In the second year of

want peace,

ap¬

plauded. I was
angry

greetings of fthe bVerwhelming
majority of my countrymen; They
,

—-—approximate balance

The study discloses that virtqi
page? ottex^p^j!
„ ;
,
v ally every item of financial an&
operating results of the, 30 comf4 The Demand Challenge?••//
panies in 1947 shows a substantial
charts

seven

the

justice

"

1

14-year period 1934group

a

on

comprehensive than those of

aged city, though I speak as an in¬
dividual I feel competent to bring

was

—

i 1 d 1

w

that

own,

my

was

''' 1 '

data for the

vious years, contains 21 tables and

Soviets—®

the

fcjji

of companies supply and demand for petroleum
which represent about two-thirds products during 1947 and to
pre¬
of the aggregate investment of the pare for a still better position in
industry.
The new booklet, more 1948."

WARSAW, POLAND, Aug. 30 — The "Intellectuals' Congress"
Iwas torture to me.
Every speech insulting the U. S. and glorifying
;

$

.*

r

j, ■

1947

New York, and by the copy of his vigorous state¬
made at the Congress, both of which follow.
LETTER FROM DR.

barely adequate to'generate capital needed for replacements and expansion.

was

according to a study, "Financial
Analysis of Thirty Oil Companies

Bryn

School of
ment

and

'Z

petroleum industry in 1947 showed marked upward
changes from 1946, these increases "are revealed to be temperate in the light of vastly in¬
creased capital'requirements and with due regard to the
purchasing power of the dollar/

portrayed by the following letter received from Dr.
J. Hovde, liberal leader and President of the New

are

'

While the financial results of the

Poland. The difficulties of a pro-West and pro-U. S. defense

./

petroleum industry demonstrat ed in current as well as prewar dollars in Chaser)
Concludes record dollar income in 1947 was result of higher prices and increased volume!?

Bank study.

States, and the overwhelming pressure of the pro-Comt,".munist line, was recently well-illustrated in the proceedings
U'
at the recent World Congress of Intellectuals in Wroclaw,

;

13

:

/

4-

'

(1109)

as

stand in opposing Communist propaganda line.

V;.-

„

&

Soviet Pressure Opposed By Hovde Capital Needs and Decline in Dollar's
Pwchasin|
President,
member of American Delegation at
Power Curtail Real Earnings oi Oil Companies
World Congress of Intellectuals in Poland, takes practically lone
New

1

COMMERCIAL

THE

Number 4734

-

By Order of the Board of IMPERIAL OIL LIMITED.
v

-

i

:

H. H. Hewetson, President.

n'.:(

:

ll

14

restrict

Thursday, September 46, 1948

further gains in net operating earnings from those re¬

any

possible

the year, the earnings rate for the remain¬

ported in the first half of

tion of

ing months should be well maintained.
For the full year 1948
operating earnings, in most chse$, should be approximately equal to
those reported for 1947. |;,y.yy..|.t
y|/|^Vyy|:|> '"-ll"v

Bank and Insurance Stocks
By H.

CHRONICLE

& FINANCIAL

COMMERCIAL

THE

(1110)

reaction
our

In any
for

the

for

E. JOHNSON

This Week

Bank Stocks

—

development of the past week from the
standpoint of bank operations was the decision of the Federal Re¬
serve
Board to require higher reserves against demand and "time
important

most

talk

our

about

deposits of all member banks.
*
1
The authority for this action was granted
program
As a

'

,

.

,

1 Ti 'H

in the anti-inflation

member banks the reserve requirements on
lime deposits will be increased from 6% to 7l/z% on the appropriate
dates.
y ':
^ • •• ......
I'Iy.11,.
The total increase in required reserves is estimated at approxi¬
For

all

1

i*

.

'f

•

Annufil

Market Bid Price

'

33ankers

24'/«

.

40 >/4

89 »/2

NatlonaLi-._-.__I

Chemical

Cong-res s■

passed

extending

price supporj;
i'egislaUam
B u t: I.o b
,

another

42

>

Exchange

First

National--

'National
Y.

U..S.

-

■

1.42
1.74

1.80

56%

56%

282

:

16%

-

40

;

2.49
40.59

14%

9.75

9.18 L

o;80

45%

.

41%

87%

00%

39%

41

555

2.45
42.10

,12.00
2.40

0.60

0.36
;

39 V4

52%

1?

•'

36%

I

•

V; '

;

2.59

•

■iti, 1.60

80

4.oo

,s'

36%

'

510

600

560

•

;l iU-ly

2.80
'

254/

17%

-

-t:

30.00

50

1,200

1,335

277

86 V4

^

1.48
1.71

1.G0

2.00

39%

:

1.06

'1.32

r

38%

City...—_J_

Trust

3.00

37

50%

Outside of New York—

1.25
4.40

3.00

43%
44%.

'

50 V*

National

1.63
3.19

33%

1,280

^^..1,275

Trust

Public

0.93

4.00

r

37

Trust.___

Manufacturers

1947

1.80

<

82%'

42

280
Guaranty Trust.
16 y«
Irving Trust_._x-__x.___'

N.

95
;

93%

42%

•

55%

Corn

day
Republir

the

cans ;;v
a

enacted

measure

dej

feating some
of the
major

of
parity

purposes

the

law

-Earnings

/ 5.00

.36%

|

41%

National....

bill

a

■

2.00

2.30

,

1.87

1.55
3.14
2.32

1.3.17
2.08

18.85

18.12

r.
"

;

{

number

i

c

National

47%'

47%

Boston-

.

,

«1

g r

<J. q L fj
th roughout the nation/ Ha; ye; iqla
members of the Democratic; Party;
t

,

;

2.00

45%

be

forced

price

down,

supports,

major

together

and

of

purposes

the

companies

Vy

(

"

While farmers suffer, the grain
interests would profit.
That is

•

the 80th Congress did
grain lobby." "
/
y

by year of the editorial contents : the ;book has increa^d tK;
size to such a 'degree that; it has ibecome difficult -to handle and
it}
•

..

has

"Why did the Republican Con¬

1.80

01.77

of earning
business loans and on

government securities.

y,7 An indication of this change, is the rate charged to prime risks.

was

i%%.

1933

to

handle

farm products
parity loan program
fostered by the Democratic Party,
and
he
pointed out that when

the

bank credit to prime names was available at 1%%.
for the same risks is general, and earlier-this year it
Also, the rates on short-term Treasury obligations have

|y BANK ||
and

Senator McGrath then went on
to say:

SECURITIES

INSURANCE

Members New
WO

York

Bell
A.

BArclay

successfully and to
the ;; support
program, the CCC needs adequate
storage facilities.
"The support program is relied
on .by farmers to keep their liv¬
ing standards in line with those

follow -the;; spirit-; of

:

J. S. Rippel & Co.

Exchange

Established

1891

of

BROADWAY, NEW YORK 5, N. Y.
Telephone:

L

Stock

■

"To operate

STOCKS
Laird, Bisseli & Meeds

18 Clinton

7-3500

St., Newark 2, N. J.

MArket 3-3430

Teletype^-NY P1248-49

Glbbs, Manager Trading Dept.)

the

of

rest

the

population.

If

the CCC sold the crops just as fast
as

.N. Y. Phpne—REctor 2-4283

_

them, the support
would
not
maintain
fair levels for farmers.

it got title to

program

prices

as

When, faced

by a lack of storage
bins, the CCC would be forced to

WHOLESALE MARKETS IN

flood the markets at harvest times.
The result- would >be low prices

BANK and INSURANCE STOCKS

for

a relatively short period,"By 1939 the CCC had built

its storage

6E¥£R & CO.

bushels.

10 Post

y

9

WHITEHALL

2-O650

BS-297
CLEVELAND

LOS

15

connecting

philadelphia,

Providence,

:

I

st. louis,

Hartford, Enterprise 6011

Enterprise 7008




6-2332

SF-573

"M

york, boston, chicago,

los angeles,
...

'

4

Building

YUKON

new

y

FRANCISCO

Russ

2837

LA-10S6

:

SAN

14

for

50

capacity to 300 million

But

san francisco

Portland, Enterprise 7008
Detroit, Enterprise 6066.:-

its

million

bushels.

No\y the
building up its
storage capacity to,; guard against
the time when agricultural sur¬
pluses may again be a national
problem.
"However, when the Republi¬
CC0

7535

CG-105

ANGELES

MICHIGAN

CV-394

TELEPHONES TO

FRANKLIN

210 IV. Seventh Street

7644

PRIVATE wire system

-CLEVELAND,

231 S. LaSalle Street

3-0782

NY 1-2875

Schofield Building
SUPERIOR

CHICAGO 4

67 Wall- Street

Office Square

HUBBARD

NEW YORK 5

up

when. World War II
heavy.; demands
on
American
farm
production, the
,CCC liquidated all but facilities
placed

INCORPORATED
BOSTON

in

to

two

publish

parts,

r

fu¬

Part I

Of sthe'494&/editiohiC^ll:;b^

/(Continued vffom

on

lished

*"

(2) The

9)

page

continued

y

.

supply

.•

•

Reserve

Bank

on 4an. 1, 1949 and: Part: II
July 1, -1949;''
r**

^The -1948 issue/ which

of

funds

lished

for

js

pub¬

by. Thomas Skinner

•

era!

Reserve

B anks' and

receive' Canada.-

cans

should

gave

be

the CCC its

new

charter

it not

bringing
What

a

short

Book

the

in

Official

Year-

and its predecessors over a

period of upward of 70 years is
placed on record for the first
time.
Copies of this volume can

now

be

obtained

from

Thomas

Skin¬

& Co., Ltd., 1 Broadway, New

ner

York

City, at $5

per

'

copy.

'

Semiscb New Pres.

*

is there in support¬

sense,

Of Phila. 2nd Nat'!

ing Government bonds or buyinggold in a manner which increases

already inflated money sup¬
.William G; Semisch, Vice-Pres¬
ply by five or six times the. ident and Cashier, > Was elected
amqunt of the purchase price of- President1 and.; Robert ;L. Hilles,
our

the gold
There

the bonds supported?-

or

can

be

in

sense

no

it

President,

ex-.

of

the

Bank

creating an additional money sup-.v
ply. -1 Will any responsible banker
or
monetary official say that in
the interest of the public welfare
of this country now and in the
future
we
need
a
still
larger
money supply?
Will any of them

tive'Oct. 1

dare

discuss the continued

to

of

flation

our

loose?

the

stop

.

the

with

money

violent
that

result

founding in

1864.

that institution.. -He

was

elected

Treasurer in 1927 and in 1928 was

in

sup¬

1940.

^

,

|

_

,

.

/

t

Mr. Semisch

increase
pressure

he held until the

positions

urer,

Integrity Trust's liquidation early;

immediately

existing

its

its

elected Vice-President and Treas¬

Reserve Board could

or

-

banking career started in 1912
at
Integrity Trust Co., Phila¬
delphia .
In 1922; he was ' ap- /
pointed Assistant Secretary and
in 1925 he became Secretary: of >

.The President or the Secretary
the Treasury or the Federal

ply

since

Bank

of

decrease

1948.

National

both effec-

His

/

.

of Philadelphia,

becomes the sev¬
enth President of Second National

as

distinguished from its inflationary
use by the people after it is turned

Second

of

Mr. Semisch

in¬

supply

money

elected Chairman

was

board

cept for the deliberate purpose of

joined Second Na__

1ft4n

.

,r.

.

ti°n^I Hank: m May, 1940, as VicO-

.

President and Cashier, an^ ^
Aiigust of ^ that/ year1 he wass
inflationary elected to the board of directo s.

would

be taken off

would

not have to depend on the^■.

prices and

people's avoidance of
use

but

its

of

we i

Aaron W. Hard wick, a director

the inflated money supply

would
source.

inflation

of

strike

That

at

inflation

direct attack

money

seems

to

atvof the bank since 1937, and Preson s

ident of Summerdale Dyeing and

be

Finishing'/W ar k s

i

politically unpopular and, unfor- j
tunately, equally unpopular with

prefer: the possible dangers of the

that within

appeared

inflation under

our

"

•

Of approximately

22 500 companies which formerly

been gradually reduced and
might by this time be hopeful

tional

means

closing hi story

have

our

"This

(subsequently incor¬
porated ill The" Stock Exchange,
Official Year-Book).
Thus, the*

supply, the1 gross "super¬
fluity of money" which we en¬
joyed at the end of the war would

of

TJife Stock Exchange

in

Year-Book

been for these poli¬

this year, the GOP refused to let
the agency lease or buy any addi¬

storage facilities.

appeared

money

control.

..

Jtegis-I

6f Defunct and Other CornL
panies has been further enlarged
by the addition of • details of, the
final
histpry/ of, "approximately:
4.300 compahies' wh^

cies which continue to expand our

we

-i

ter

expansion of bank loans and in¬
vestments by at least five times
(possibly twenty times) the pur¬
chase price of the gold.
Had

;

Tlie 1948 edition of The

which

.

prices ol' agricultural commodi¬
ties supported by the government
fall below parity
levels, manymoved up sharply.
A year ago the market was adjusting itself to farmers sell their crops at sup¬
a
1% yield on 12-month certificates of indebtedness, y During the
port prices to the CCC or get a
next several weeks a large refunding program will be carried out by'
loan from the CCC at the support
the Treasury at 114%.
This upward trend in interest rates is one levels,
y The ' loati* provisions are
of the more favorable factors in the outlook for bank earnings.
used most often.
At the expira¬
1
Thus, while the increase in reserve requirements will tend to tion of
,the. loan period, accord¬
ing-to Sen. McGrath, the farmer
may buy back the Crop or turn
tjtle to it over to the government.
Then the CCC does the marketing.
NEW JERSEY

Today, 2%

decided

issues

The Real Inflation
*

excess reserves

gress slap farmers
this
way?" Sen.

under

ago

been

ture

e a

-

in

year

'Owing to the continuous growth,

year

for
.

and
11 Governmentmunicipal loans.
$ .)

and

support

would be lost.

program

clusion of notices of 250 additional

with
of the

many

•

..

boost this year for central reserve city banks, the loss

■:

the .Stock

Co.
America's farmers." £
Senator McGrath explained that
new4extensions of bank credit- (publishers), Ltd., Gresham House,
Old Broad StM
London, E.C; 12,
the hill granting the Commodity, through the so-called support of
England, under the sanction of the;' >
Credit
Corporation
a
Federal: Government bond market prices
Council of the London Stock Ex¬
which
the
commercial
charter nullifies, to a large degree,'• under.
change, costs $30 per copy (duty
the- expressed
purposes
of the bankshave ;been lable to dumptheir Federal, bonds into the Fed-: paid) in the United States and
price support legislation.
"
'

assets has been offset by

A

of

f

.

on

Exchange

edition

1948

....

Federal

! '

'

the higher rates

/

,

'double-crossed';

Congress

have

Official
Year-Book,
forced
to
sell
crops
almost as made and printed in Great Britain,
quickly as it got title to them has just been released in this
from farmers because of the lack
country.
This, the 74th edition,
of sufficient storage facilities.
cp/itains a ; record
number of
"if the CCC has to flood the pages—a total of 3,525. The in¬
crease
is mainly due to the in¬
market with crops, prices would

in recent weeks that the Republi¬
can

which

their hands.

,

35.00

'

;';VA

50%

dollars

of

Exchange

ultural

a

McGrath

Howard

J.

The

time the CCC probably would be

e -the

e rs

v;

con¬

Official Yearbook Out

,

enable them
4 ft the -face in;
4.00
73
3.75
'3.03
75
77
'
82%
Continental 111. National
McGrath said. to expand their bank deposits and
First National Chicago...
8.00
13.12
223
198
12.47
/
217
217
our money supply by from five to"The GOP welched on. its parity'
^National City includes earning';} of City Bank Farmers Trust and First. National
six times the value of the. bonds'
promises
under
pressure
from
Boston includes earnings of Old
Colony, Trust.
y i
America's grain interests—another sq turned over to the Reserve.
For the week, bank stock bid prices showed little change., i&fost
one
of the special interests thaft- :
(3) The- continued purchase of'
of the issues were only fractionally lower and in a few case^; un¬
controlled the
Republican ? .rein'S gold by the Treasury through the:
changed or slightly higher. At the same time4hq/P
Federal Reserve System in a way
during the 'do nothing' 80th$Gttb$
trials declined 3.74 points, or approximately 2%.
•
which
gress." "• I/.'";
I '
provides the .commercial
While the recent increase in reserve requirements is the third
He stated the CCC was set up
banks with reserves available for

'•First

V

devoted to the

London Slock

of

b

.

of infla¬

of. a normal use by the
the greatly increased

of

been put into

-I,-—

•

what

"La rg

1.09

J .20

36%

t

L

115

!

;

36%

Bank & Trust..-

Commercial

/ ' Low
'5.- 22% ;

'

;

89

v

99

Caase

42

100

39%

Trust...

Central Hanover.__.__..;

;

24%

\

aj statement: "On one day the GOjt

said in

Senator

The
,* "■

farmers.

n u m

1948

Dividend

-

High

24%

/

people

'1

<

Committee, declared in a; statement issued on Sept. 12, tha;
the Reoublican-controlled 80th Congress "double-crossed" American

,

Brooklyn Trust...

-

Sept.,3

Sept. 10

City—

Manhattan.—-

A

McGrath, Chairman of the Democratic Na¬

Howard

J.

Senator

Net

of

> *' <

*

'

McGrath, Chairman of Democratic National

*

-

^

f

•'

i

-

inflation

supply, and

money

tional

Indicated

New Ycrk

|

,

.

first half of 1948 and 1947. y

Bajik

^

Congress welched on its "parity
promises" under pressure from grain interests.

,

.

'

Committee, contends Republican

For central reserve city banks (New YorkChicago), in which the largest investor interest is concentrated, the
increase fn requirements will amount to around $490 million.
While most banking "officials had expected higher reserve re¬
quirements at some future date, the timing of the move was unex¬
pected.
Nevertheless, the bank stock market seemed to be little
affected and in general showed considerably greater resistance to
decline than the general stock market.
'
' V
•
'
In the table below there 4s presented a list of leading New York,
Boston and Chicago bank stocks with market bid prices as of Sept. 3
and Sept. 10.
Also shown are the price ranges so far in 1948, the
current annual dividend rates and net indicated earnings*. for the
mately $1.9 billion.

*

*

af

Howard

J.

Senator

recently enacted by the special session of Congress.
/
result, on Sept. 16 the reserve requirements on demand

respectively.

our

were

sequences
(t

deposits for country banks will go up from 14% to 16%.
Eight days
later, on Sept. 24, requirements for reserve city banks and central
reserve city banks Will rise from 20% to 22% and from 24% to 26%,

in

less of it

cause

is^te

that

crease

>

public welfarfe
people of this country if

of

tion,

Says Congress "Double-Crossed-

defla-

some

event, it would he better

dealt with the real

The

>

supply.

ultimate

the

more

of

money

bankers and many others

who

Vice-President.

;-

,

was

elected
.

,,

1.

|was^leefe'd ckshlfr^He f
|

cam(.

,

diately, after his graduation from

to Second National imme;-

present inflationary boom to the.' Frankford High School in 1920.

^
-

i

...

Volume 168

Number 4734

&

COMMERCIAL

THE

By NORMAN THOMAS*

H

p

,

"

Candidate for President, Socialist Party.c

'(

it

^

Mr. Thomas, asserting primary responsibility for present iinterna¬
tional crisis lies with deliberate and ruthless pursuit of ;power by
communist

dictatorship,

(1)

public explanations of
American aims; (2) an appeal to the UN to consider Russian
t;^aggression as threat to world peace; and (3) (universal disarm-?
under

ament

effective

proposes:

international

veto and creation

:

control.

Wants abolition of

is

conflict

a

"Hence

tne

Russian
tfiis
'

the

two

of

most

—

-'

In

the

of

leading

struggle
the

that

there

d

c-

the >

of

of

an.;

o v e m e n

grimiy
on

to

this

secular

that

•;

came

as

freely

complete surprise.

fact

since

Norman ■(! homu

cluded

any

easy

religion
.■

of universal economic jus¬
slogans grotesquely denied
by the facts qf life in the Russian
police state.
Organized interna¬

tice,

tional Communist (in which Rus¬

sian imperialist nationalism5 seeks
to

maintain a primacy already
threatened by other nationalisms

like Tito's which the Communists
have unscrupulously exploited) is
foe

freedom and peace,

of

fif;

that

Communism means
to the world is illustrated by the
monstrous nature of
.

the; Russian

police -state. -That? state has * re¬
vived ' a - literal- .chattel slavery
which it has imposed in its crud¬
est forms; upon millions of victims

; in.4ts Work camps,.

I* has set up
political control over art, music,
literature, philosophy and science

a

Unprecedented in history.

It

mits

has

civil liberties and

no

regard for the individual.

field

economic

per¬
no

In the

its collectivism

is

really state capitalism and the.extr emes of remuneration of .work¬

proportionately

equivalent

so

e e n
about

long

as

.

...

tendency
Western

in

r

•

„

\

prices

obtainable

church

Europe,

including

the

USA.

conference

tent years the greater part of

v|
Paul

Dr.

settlement after

ekport difficulties—no longer

allocated to the producers but was
set* aside by the government. Now
that the proceeds will diminish as

at

ap¬

ex¬

This

e ere

announcement

in

the

United

States.

other

revaluation

a

Amsterdam

n<?t agree, howeyer, that

tions.
of

difficult

The

patience

currencies

quantity

of

for

cisive

part in the revaluation of
the Canadian dollar and the Swed¬
ish k'rona in 1946, and which must

influenced

have

also

report calls

widespread tendency among

and

firmness

out

to the producers the
instead of

encouraging. Both countries em-;
continuing /to retain part of it. barked on revaluation at a time
Since there is ho. similar arrange* when their foreign exchange
po¬
ment in Australia, a revaluation sition
was
very .-strong.
Before'
pf the. Australian pound would in¥ very long the change resulted in
flict serious losses on the pro- a sharp deterioration of
their for- <
.

eign

exchange

positions-

an

offer to sell

nor a

The offer is made

solicitation of

an

tige both countries would have
the

versed
stead of

the

change

long

continuing to put

It remains 'to be

seen

would have

and

Stalinist

us

the

case

the former's example,
New Zealanders

are

to

interpretation

his
of

themselves

on

to

25%

effect a

parity
on

having

'the

without

(without nominal

Monetary Fund.
one

of

the

the most glaring.
rs:'A

Thomas

v

Overseas

at

of

a

Press

speech

by

morality in
plete

her

parities

the

Bretton

by

Mr.

luncheon; of J, the
Club

at

Sherry

world

a

offer

to

buy

any

of these

„

-

value)

.

would

not

The. darkness of
would V follow

bri rig l peace.

midnight which

such

a,

surrender

Netherlands

.Hotel* -4 New ^ York would be broken only by the baleCity, Sept. 15, 1948; ; - ;
(Continued on page 35)
>




"

.

offering 1,265,255 shares of its Capital Stock in exchange for Common

Petroleum

Company, Limited. The terms of the exchange offer are set forth in a Prospectus, dated
June 11, 1948, copies of which are obtainable from GUARANTY TRUST COMPANY OF NEW
;6: YORK, 140 Broadway, New York 15., New York, or MONTREAL TRUST COMPANY, 61 Yonge
Street, Toronto 1, Ontario, Canada, who are acting as agent and sub-agent, respectively, for the purpbse of effecting the exchange.
'

11

democracy; ' A com¬
to a Communist

4

I §|f | |

STANDARD OIL COMPANY,
Eugene Holm an, President.

mm.
Dated: New

York, N. Y., June 18, 1948

which

refusing

Woods

Stock (without nominal or par value) of International Petroleum Company, Limited in the ratio of
3 shares of Capital Stock of Standard Oil Company for 20 shares of Common Stock of International

surrender

for

it

has

retained her full freedom to change

and. of peape has never even
condemned the infamies of slav¬

pol- Before this audience I need hardly
the Wallace type-of
a better explanation argue that
of -m a i t e r s
misunderstood
in appeasement would only postpone,
Europe and hy a correction of pur not ^vert war, and in the process
';£■ own
faults -■ of c which
perhaps impair all the standards of public

able

their

New Zealand is

countries

man

Standard Oil Company is

in

depending

COMPANY, LIMITED

or par

been

permission by the International

COMMON STOCK
.

-

Meanwhile

change

exchange for

INTERNATIONAL PETROLEUM

pro-

whether

congratulating-

scuttle out of Ber¬

back

go

from

of New Zealand and of

($25, Par Value)

r

up

Australia should the latter follow

CAPITAL STOCK

in

in¬
with.

ago,

disadvantages resulting

STANDARD OIL COMPANY
.

it
re¬

the experience Will repeat itself in

only by the Prospectus.

(Incorporated in New Jersey)

Had

not been for consideration of
pres¬

guilt.

must take account in;our

,

New-

The experience of Canada and
Sweden has not" been
particularly

pay

1,265,255 SHARES

which

,! icy, both by

1"Summary

the

Government's decision.

*

combination

ery
in Russia or of the policy
•American sins and minimise Rus- under which more civilians have
; sian sins and their ^significance for been driven from their ancestral
homes
by
our
peace, freedom and general wellvictorious; .allies
Being. But this is a. fact -of which than Hitler had time to displace.

.

same

brings

to the cause which played a de¬

us

good people in Europe to magnify

is

the

This

exports.

whole of the proceeds

Shares.

^

racism

25%

the government will have to do is
to

country has not been without

own

lin

Amsterdam

The report is; significant* I think,

we

Even

of

Zealand

is neither

"4he emphasis'upon' economic-jus¬ Yalta and Potsdam agreements*'
tice"—certainly not in; practice. This -champion of the .common
a

it

years

the those critical times require may
great be easier if we remember that our

todd^ • Gomniuh

of

European countries, of buy¬
ing Australian wool and re-selling

aresuu^

.

and

what the

the

surplus proceeds of exports due to
the devaluation in 1930 was not

Einzig

»

;

It is to discour¬

the practice, pursued by sev¬

tice it would certainly tend to.
discourage it. Moreover, Australia
would receive more
sterling and

some

stantially the same prices in spite
of the revaluation. 'For during re-

the

* I. do

of New Zealand.

though

time it will be possi¬
ble for producers to receive sub¬

Capitalism equally.
It is against this sort of back¬
standpoint
both
of ground that we come to the ques¬
Christian ethics and socialism, I tion
of. what should be done to¬
heartily
agree
in
condemning day.
.One extreme answer lias
Capitalism and Communism.
been given by Henry Wallace. He

t

additional

try for

now>

on.

The

condemned the ideologies of Com¬
From

an

following the example

,

Europe, to look with

munism

for

reason

would not in itself check the prac¬

,

blanca and S

■

proximately equal dislike
USSR and

point of view of Aus¬

tralia there would be

has been in operation in the coun¬

; Strong

between Casa¬
tar y Byrnes'
If any. realistic approach to the speech at Stuttgart in 1946.
Even
cold war requires us to recognize since 'that date, American policy
these facts, it also requires us to has; been .inconsistent
and
too
has
invited
suspicion
of
recognize that they are not uni¬ often
versally admitted., There is a militarist and imperialist inten¬

would appall Machiavelli.
_

has been

move

system of government trading that

pen. Yet there
Was

of

abroad will decline as a result of
the revaluation. But owing to the

minority who, in the Presidential ferity. Prices remained remarkbly stable until recently with the
campaign of 1944 and afterwar
irds,
ducers there. Revaluation would
argued that peace could not be result that the New Zealand pound
has become undervalued in rela¬ be, therefore, very> unpopular
established by creating vacuums
of power; that it required a con¬ tion tp currencies of countries among a large and influential sec?
scious planning of economic and where prices have risen to a re¬ tion of the publiq.
In spite of this the Australian
political cooperation to a United latively high degree. For instance,
States of Europe; that the de¬ in relation to Britain, the New Prime Minister's disclaimer of any
militarization iand the de-Nazifi- Zealand pound was at a discount intention to devalue is not taken
cation did not require the division of 25% even though its internal at its '.face value ^by many people
urchasing power was at least as :in Australia or; abroad, because
of
Germany into zones, or the
igh as that i of the pound sterling; the main consideration which in¬
arrangements Which left Berlin
The position
is exactly the duced New Zealand ^to devalue
an
island in a Russian sea;-'in
short, that, a combination of th$ s)pne as.to as Australia is con¬ operates also in Australia. It is
Morgenthau Plan and 'appease? cerned and it was widely assumed the recently developed trend of
ment of .Stalin was never the road that the two countries would pur¬ increasing prices due to the rise
sue an identical policy.
to ah abiding peace.
Yet New in world prices. Both Dominions
Mr. Roose¬
velt's .motives may
have been Zealand revalued its pound inde¬ experienced a sharp rise during
recent months, not
through any
excellent .but> tie
StRird pendently of Australia. Indeed it
world war when he played his ii even suggested that its decision internal inflation hut because of
tpok the Australian Government the rise in prices in the United
hunch that Stalin did not really
And the States, Britain and other countries
believe the Communist doctrine completely by surprise.
of world revolution and that he Australian Prime Minister lost no on which their economies largely
whose hands were; red with the time in declaring most emphati¬ depend. It was to check the up¬
blood of ihe Polish and' Finnish cally that his government had no ward spiral of prices, costs and
victims of his alliance with Hitler intention of following the exam¬ wages that New Zealand decided
could be dealt with like ah Amer¬ ple of New Zealand. This differ¬ to,raise the international value of
1
'* ■
ican politician." It is a tragedy of ence in Policy is attributed to the thelocal. currency.

fpr truth and for good faith which icy in the
;

a

eral

b

great
or
greater than in the United the hour that there is no way of
States:
At home and abroad the doing what almost
certainly could
dictatorship practices a disregard have been done by the right pol¬
are

ers

From the

pro¬

age

•

gans

What

Zealand

revaluation' af the local currency.
It is true, the New Zealand pound

Communism has been reduced

the

New

in

war, 'the-very
fact that it

total victory ^y the supposedly ist. Indeed ever since the early
peace-loving nations.
Neverthe- p)art of -the war New Zealand has
although
it .still exploits with less, I am
proud that 1 and ,my managed to present* a picture of
considerable success Lenin's slo¬
party
were
among
that
small stability and of reasonable pros-'
-

.

of

that

ducers do not stand to lose nearly
as much as in Australia through a

without

sufren^er-runtil

though the possibility of such

even

the

of

talked

no

For

<$>■

thetc losing
years

h[a s!

"ij'"--""'- '

a

can-

„

is

the

tne

■

•

are

has Case-in; favor
greatly • contributed to produce the of' a revaluation. The causes for
the devaluation of the New Zea¬
presept crisis.
'
r*'
Ttie method of total war and land pound 18 years ago—its gross
overvaluation
and
the
the nature of Communism
resulting
pre¬

world;
It

-

Zealanders

or:

tional

the achieve¬

power.

and

scrapped the Atlantic Charter for
the negative concept of uncondi¬

t;

intent

ment of

the-earth.

>■

MM LONDON, ENGA-The decision of the New Zealand Government to increase the ex¬
change value of the New Zealand pound so as to restore it to parity with the British pound

history of the cold war
up
to the ;present i, crisis fpr

is

policy

international

it'm

v

New

Nevertheless, our own
lack of-, policyfrom that nothing is
Casablanca — when
Roosevelt likely;to 'hap-

USSR;r;are
heads

of

By PAUL EINZIG

any¬
question /but^ that
prirnary responsibility dies :pn the thing happen¬
deliberate and ruthless pursuit of ing was apt to
c o n.v e y
the
power
by the'i; Communist; die^
i m p r ess ion
tatorship. ?

fact,

the

tators

nations

Russian; history

But

subordinate

to

powerful

understanding

char-

aspect

the
is

between

importance

acter.

!

15

rate and its restoration to ^parity came as complete surprise,
proud of their alteration of exchange rate without permission from International Monetary Fund. Asserts future association with Fund depends on success of move.

and

•

Jn terms of international politics, the present cold war between
accurately the Soviet Union^and the United States;

;•

(1111)

•JJDr, Einzig reports increase of exchange

of security force in United Nations.

Russia—more

:

CHRONICLE

What to Do About Russia

;

?

FINANCIAL

to

sign

agreement.

FINANCIAL

COMMERCIAL &

THE

(1112)

M

Thursday, September 16, 1948

CHRONICLE'

Tobin Denounces Taft-Hartley Act,

7-RfpNSTA - Notes '7
'

Calls for Increased Minimum Wage
flew Secretary of

Labor

scores

Congressional action in limiting
upholds President's anti-inflation

,

of his Department's activities and

scope

The annual

v

'

program.

of New York

meeting at the 23rd Convention of the International Brotherhood of
City on Sept. 13, Maurice J. Tobin, recently appointed

a

V

11)

page

> P

>

in

outing of the Security Traders Association
Sept. 10 at the New York Athletic Club

summer

was

Travers Island.

on

success

Addressing

(Continued from

SECURITY TRADERS ASSOCIATION OF NEW YORK

held

on

Pictures taken at the gathering, which was

spite of

heavy downpour,

a

issue of the "Chronicle."

appear

-P'aP

a huge
elsewhere in today's
P

(Electrical Workers, AFL, at Atlantic

occasion to denounce the Taft-Hartley Act as well as other legis¬

Secretary of Labor, took
lation
80th

the »>

of

the

at

for

rise

the

at

85

or

90 cents."
*

He

also

ferred

the

the

junior

J. Tobin

high
cost
of
living as cre¬
ating a danger of a "bust," and
urged the enactment of President
Maurice

•

re¬

to

Truman's

lot
in

anti-inflation program.
with these matters

rent

Topmost of
All of

family

-much

of

us

know this

previous

an

has

it

seven

in

during the
of war and

rose

years

full-page

advertise¬

ments in the

newspapers in May,
few weeks before Congress
scuttled
price control. I, quote

1946,

a

from

the

National

Manufacturers'

wool

suit

by one of Ike little-noticed provisions of the Taft-Hartley Act.
"The Department's proper function of handling manpower and

girl

a

wore

coordinating the Nation's system
of
employment offices, which
has! President Truman returned to the
in

Association of

girl consisting
garments I
have listed, plus one pair of hose,
one
undergarment,
and
cotton
anklets came to a total of $87.67,
up nearly $20 from the September,
1946 figure of $68.33.
;

'

i

controls

each

"The

and

on

manufactured

danger is great of

a bust
since we have
high point in a tra-

reached

a

ditional

very

boom..
r

i

But

i:

itv

even

j.1

at

o

date, I believe that

fective action

can

this

i

some
be taken iff

ef¬
the

up

in

the

President's

anti-in¬

flation program.

then

wilhin
will

and

into

pour
a

fast. Goods will

the

market

reasonable

adjust

competitively,

as

The Department of Labor

time, prices
naturally
they always

your
another pressing item
of Government business that con¬
convention

affects

organiza¬

have, in line with the real worth

cerns

of

tion and its members very direct¬

things.

This is

the

way

you

get goods you want at prices
you can afford to

can

"Since

June

of

1946, wage in¬
creases have lagged behind price
increases, so that the buying pow¬
er

less

©f

the

than

.

average

it

was

paycheck

then.

This

is
is

"The

ly and intimately.

your

I refer to the

Department* j of

Labor,

head.

have

oath

Since

I

golf, Malcolm Roberts of Sidlo, Simons, Roberts 8c Co., came
a net of 62 and took possession of the Newton
cup for the
year.
Donald F. Brown, Boettcher & Co., had low gross,
with Orville Neely of Merrill Lynch, Pierce, Fenner & Beane
taking
following

most blows for the afternoon

(he can't

to differentiate between

seem

his golf and bowling—high score in the former and low

of

score

Moore & Co.

were

the champion horseshoe players while Phil Clark

of Amos C. Sudler & Co. and Bob Newman of Newman &

rado

in the

John Alff of Amos C. Sudler & Co. and Bill May of Stone,

latter).

Springs, tied for first place in the tennis round robin.

winners

were

worth of

Co., Colo¬
Top prize

William J. Edwards of Fort Worth and Arthur F. Bos-

Bosworth, Sullivan & Co., Denver.

There

were

178

guests at the dinner which included 20 visitors

from Boston to Los Angeles.

BOND CLUB OF LOUISVILLE

New officers of the Bond Club of Louisville

are:

Urban J. Alexander, Urban J. Alexander & Co., President.

the

'fWpVf32

Department has been cut in two
years from $32 millions to. less
than $15 million, its entire staff
from

7,000 to 3,300.
have

"We

a

for

program

re¬

building the Department; These
agencies and other labor functions
outside of the Department should
The services which

be returned.

to be curtailed must be

have had

replaced
and
developed
into
greater usefulness for the labor
movement

groups
iinnn

upon

for

and

the

:

other

in our country who depend

lmnorHol

fnntc

on<^

cfoiicfinc

impartial facts and statistics.
•*

"The 'Wage-Hour Act,
years

ago

stone

in

was

the

the

whicH ID

massive

a

advance

of

!

Henry Christman, Jr.

Urban J;- Alexander

mile¬

.

Henry Christman, Jr., James C. Willson

labor

R. H. Johnston, Jr.,

elimination

the mounting

R. H. Johnston, Jr.

'& Co., Vice-President

Bankers Bond Co.; Secretary.

Lynch, Pierce, Fenner & Beane, Treas.

Wm. T. Watkins, Merrill

price level. It must
brought up to date and made
again by establishing a
new minimum wage floor, a bot¬
tom level, of at least 75 cents an

the

Office, I have become in¬
creasingly impressed
with
the

plight to which Congress

has brought this Department. This

DETROIT BROKERS' BOWLING

LEAGUE

be

hoqr, and perhaps 85 or 90 cents.
"I feel

confident that" your or¬

ganization
will
consider
these
problems and act upon them as

Bowling League opened its

Members of the Detroit Brokers'

;

effective

which ' I
taken

of

serious

budget

the Rockyheld on

was

In

the war, have
from it again.

operating

Denver and

has become obsolete by reason of

% "I would like to put before

and

Club of

in first with

of sub¬
standard wag?s and sweat shops,

and,

themselves

been taken away

through

goods and produc¬

tion will step

Department after

the

depression,

a

late

a

of

Congress will follow the proposals

advertisement:

price

Her wool coal
$19.95 to $24.95. Her

outfit for

one

made

"'Remove

|an isolated, independent agency

difficult

$29.95.

"An

ordinary
risen
by

war-induced shortages.
And this
in the face of a famous statement,

printed

their

the other day

out

of

from

of

in the last two years,
as

found

school

to

how

Just

I

check

that i

see

Bond

■

this

to

from $14.95 to
Her shoes, low-medium
quality, went up from $4.95 to
$6.95; a rayon slip from $2 to
$2.98.
'P \

your cur¬

some

us

cost of necessities for

as

Department of Labor has suf¬
crippling blows at the hands
the last Congress.
Its funds

fered

$19.95.

as the high cost of living.
This has become very serious. The

about 30%

The

I

wool dress has gone

problem

*

is
a

costs

problems faced by your
and its members in

problems is what

worker's

one

no

by the law which created it in
1913, were removed and placed in

have

off

risen

organization

call inflation.

gets

"The

"Here in convention I know you
be
much
more
concerned

the 'future.

labor, and
millions
who
to speak for them.

of the

Aug. 27 at the Park Hill Country Club. Pictures taken at the outing
genial photographer, Earl M. Scanlan, of Earl M. Scanlan & Co,
appear elsewhere in this issue of the "Chronicle."

September, 1946, costing $24, now '

will

the

organized

unorganized

have

prices for clothing
needed by a 'teen-age girl returning to school this month.

Mr. 'Tobin stated:

with

of

rest

the

of

that

ones

month.

connection

In

the

the wives

on

men

service the working

tribute to these great
and its force have been reduced.
are the people who
ai?a *ls 101*ce nave peen reaucea.
corns
closest to grips with the T,he important functions otmedir
problem of keeping the family1 ating and conciliating labor disnourished and clothed.
They are Putes< placed in the Department

hour,
perhaps

"

set up to

frolic

Mountain Group of the Investment Bankers Association

They

women.

cents per

and

rough, too,

It is

of this country, your members and

want to pay

75

least

is

and mothers of all workers, and

level

bottom
of

"It

"a

of

spokesman in

your

the councils of Government.

of them living on fixed in¬
which have not been ad¬

many

minimum
wage

your

justed to keep up with the cost of
living.

a

in

on

comes

time,

same

Department is

members. It is even
more
difficult for retired, aged
and infirm workers and widow's,

relating to his
Departmen t

called

The annual

hard

Congress

and,

BOND CLUB OF DENVER

1948-49 season on Sept. 15 at

the Club Bo-Lo.

s-»*V.The;League, composedpf 14 .teams totaling

J$ireetj

pipyed by financial houses <>f ; Criswold,

is

70..bowlers on*-;
sponsored* 1?y "th^,

of Detroit. &-Michigan, Inp.j, and an-

Securities Traders Association

Michigan Investors Trophy,
!•
Thd competition appears to be keen this year as the boys will;
you have repeatedly acted in the
past in supporting and developing be'boWling dn "the same alleys for the second straight year. AH the |
teams are; keyed up and eager to take art early lead ind fii^ht to stay.
(Continued ©ri'pfcge 32)' v
nually competes for the

up there.

^FxedjHuber of Reid & Co.? a

:

little

the

This advertisement appears as a matter

buy,

or a

solicitation of

an

of record only and is not an offering of these Shares for sale, or an offer to
offer to buy? any of these Shares. The offering-is made only by the Prospectus, :

with a mighty high aver-,
bowl his best to again lead

man

ageand last year's champ, will have to

pack.

'

who, last year put on a beautiful
win the Michigan Investors Trophy on the last night
from a tired Reid & Co. team, will find all the other teams ;

The -First of Michigan team

stretch drive to
of bowling

gunning for its crown.

31,000 Shares

Beside the two

already mentioned above teams, the; league

is v

(Coe) 1946-47 Champions; Paine,
Webber, Jackson & Curtis; McDonald-Moore & Company; George A. (
McDowell & Company; Crouse'& Company; Detroit Stock Exchange;'

comprised of: Wm. C. Roney & Co.

National Bond and Share Corporation

Cray, McFawn & Company; Chas. \ A: Parcells &; Company; Smith,:

Capital Stock |pl

Hague; & Company ;rGoodbody &

Company;^ra. p. Roney, & ,Cp.
6yer(I'spot vacated

(Floyd); Chas. E.; Bailey ,& Company " who takes
by
77:

C( G. McDonald & Company.

7

*

Officers of the League for the new year

are:'President—Charles

Bechtel, Watling, Lerchen & Co. (who succeeds Clarence A.

Price $23.50 per share

;

Horn, First,

YicerPresident---W. -A. Ross-Sutherland, Cray,,
Company; Treasurer—Richard Carman, M. A. Manley &

of- Michigan^ Corpi)>
McFawn &

Company; Secretary—Hayden Brown, Wm. C. Roney & Company. \

|
Copies of the Prospectus may be obtained from the undersigned only by persons to V
undersigned may legally offer these Shares under applicable securities lam. P

:y

whom the

,

H

/

The 1947-48 season was climaxed by an Inter-City

including teams of Detroit, Chicago and Cleveland with
team

Blyth & Co., Inc.

>

September 16, 1948




Sons, Inc., running away with the so graciously

Michigan Trophy.
It

is the hope

.

<

-

"

,

*

Those interested, please
&

donated First of

.

of the new officers that more cities will be rep¬

resented at the end of this season to wrest

Lerchen

Morey

& Company; Star

Marr, E. H. Rollins

Koerner, Mitchell, Hutchins 8c Company; Larry
&

the Chicago

composed of Elmer Erzburger, Smith. Burris & Company;

Sachnoff, Straus & Blosser: Arthur Sacco, Detmer

-

Tournament, ;

Comnanv.

Ford

the trophy from Chicago.,

get in touch with Chas.
Building. Detroit 26.

Bechtel, Watling,

Michigan.

; X"

Volume

163

Number 4734

What John
harder and

if ;both employers

asserts

give the

consumer

would continue to enjoy good

for his

more

business.

y

•

■-1

the country

money,

the

um

statistician and not

a

Prohibition

Ticket rather

a

Questions Truman's and

politician.

than 'that

of

In

-

Deweese W.

r---

members ofO-

Moreover, I .always vote
either of the two big

the

the

Presiden1

a

c

paign

a

is

both

What

of

'

Q. Public

Should

Do

.10-w, i n g fig'•>•**

111* A c

-

% J

cussing we
give President
Truman,; sta-

%

ftistics show
that
Babson

since

his

A d in inistrat -i .6

Y-

n

;4t h I $

country has had the! highest^iia?
ticftiai income in its history. At
of

repeating some facts
which I have already stated, let
me emphasize that the volume of
U.* 8.1 business> has been: above

we

harder

sumer

:

risk

if

work

fol-

over; the

With all the

the

John

Yet

parties

and

the

States

Could

•

to

with

demand

.

con¬

,

,

/:/■

.w

.

1922-1930/ The

line

1940

in

in

as

normal

it

1924;

came

within four points of the normal
line in 1945.
From this point,

however,

it

recovered

to

a

new-

all-time high
one

within a period of
During 1947 and so far

year/

inr1948

the * volume

has

run

at

1947, alLtime high and 24 points

:

W.

*.

r

poration during

tions

■

•

' W

August, 1920, were that business
could hot help bht femain good
for the balance of the year and

I

the past year.

rolls in 'half rinxi put >millioiis of

and

people

back

would
labor

both

into

industry,/ it

reduce taxes and the

shortage. There is much that

each

of this column

reader

could

understand there

are

number of

a

probably would likewise Continue

hope to receive their certifi¬

good object

can

be frustrated

by it'.";

Registrations For
AIB Evening Classes ;
Registration
banking

for fall classes
allied subjects

and

Sept.

being accepted

The time has

come

.

,

v

arid!'

-f

Inv.
At

/

'

-

1 •../-'

|"/Wli£lfe T.do not/want .to ;go

record

•

-

on.

,:

siired?/* If the answer is 'No,' they
usually tbrn: without ^a /Word and

saying that I believe
1948 will duplicate 1920, I will say

leave the building. All of us rea¬
lize that as competition becomes

Analysis Course ; /

Trinity Univ.

crin happeft^ !

All they? want, to

^our ; accounts in-

Export-Import Bank

that I think the peak in real estate

prices

as

The

Export-Import

reachedJ and I Washington

Kris- been

•

cannot

Makes Loan to Finland
Bank

credit of $5 million

strongly urge that as¬
keener we must give
the public ; what it deniands*: If sociation managers proceed very to the Republic of Finland. The
wie, want, to increase our share cautiorisiy- in granting loan appli- credit, repayable in 15 months,
vestments
will
be
initiated "at
catioris/ I would suggest that first/ will carry a rate of interest of
Trinity University, Downtown Di¬ capital so that we can take care of
dur mortgage demands, insurance you liquid carefully review the ap¬
per annum.
The purpose
vision, on Sept. 21, 1948, and will
SAN

ANTONIO^ TEXc-Actese

iri anlyses and

keener and

a

techniquespf in-,
.

meet>

Tuesday'thereafter
p.m.4 This course,

every

9:40

7 to

from

who

desire

it,

be taken

may

or
for non-credit./
/
E.

infla¬

business Of. the- last i0 years con¬
sisted Of a War and/post-war, boom
culminating
controlled

in

-

S. C.

Coppock* a staff mem¬
J.
Wilbur Chapman and

of/accounts becomes
If.,

a

necessity. praisals with the question in mind,

have the slightest doubt

you

to real estate

their present

'Will this property be cworth; its
present appraisal in three years?'

as

prices remaining at

levels, it would

Bqar in mind that a drop of 20 %
in value will wipe out your equi¬

seem

the wisest course to apply for inr
while things are booming

ties in

surance

great

a

carefully

rather than, wait until the public
might have some doubt regarding

many

weigh

the

Next,

cases.

moral

risk,

of the credit is to finance the pur¬

chase of raw; cotton in the United
States.

:

-

/

'

The Finnish

operating at
of -prewar

a

the

Inlportant'

'you

security

have/

Third,^ neverilet'a prbspective

cus-

ttriwer hurry ydu: into "graritih^
application

without

making

an
.

a

raw

'

"

may result in a

period of un¬
inflation which
similar collapse*

During both the early /20s and

>

'40s
to

record of Mr.
ket

degree of

reveals

.and has

peacetime goods

were

reduced

Fer Selective

minimum creating a pent-up
demand
for
consumers
goods

New

which to this day is not complete¬

nounced

a

•:

imports of

Its market is largely domestic, but
small quantities of textiles

York

Stock

the

Exchange,

that the Selective

2 Vs%

an¬

This is further being

ice

aggravated

somewhat;

first

now
by
stockpiling of war material again

and

facilities

registration
floor

opened by

of

24

the

on

to

To

mature

ex¬

shipping.... of billions of pedite :ooitveinjent/registi&tionnof
supplies to Europe. v
its employees and those of mem¬
So far there is as yet no'overr- ber
firms, is prepared to register
productibn of consumer^ ^oodsr any > financial district employee
but in

some

few instances the sup¬

ply is beginning to catch
the demand. There

are

with

up

still short¬

in

automobiles, steel, nonferrous metals, electrical equip¬
ment, flew homes and several

ages

;

^

$80^000 semi-annually March 15, 1949

to

SeptembeffS^ 1958, inclusive

the

To be
~~

other capital goods. The inflation
at the present time is not in the
stock market but in wages and the

concomitant high prices.

decline

in

na¬

business

going
therewith, I cannot imagine why
or Mr. Dewey

either Mr. Truman

be President.

wants to

If I

were

Mr. Truman I would want to retire
in my

glory; while if I

Dewey,

I

had

rather

were

undertaker! in cooperation

Colonel

Candler

Service

Director

Cobb,
of

City.: Registration

at

elsewhere,

with

this

York

Priced to

head¬

*

■■

wait

age group or residence. v ' '
Registrars headed by J. Horace
Block, a member of the Exchange,
of 9

available
a.m.

Reaction, whichever is elected is

■

r

.

.

A. W. Porter Dies

/:

A.m.

Porter, Inc., of
New York City, died at the age of
sixty-nine.

f''''

yield 1.35% to 2.40%, according tojnatnrity
5

' ■'£.'/

"

•

I

'•

jfrv/y.v 'v;vK:: 'V./;tV

>i.

s?<h•

- - ...r

of these Certificates

are

.**' ' ''*■' " y

^

...

_

V*v'/r '*

v

/' / '/•./,/

'.'!•••

-

.-'j

subject to authorization by the Interstate Commerce Commission.

TheOffering Cricudarjim
myStatefrom
the undersigned and suck ttlhfr dealers as may lawfully offer these securities in such State.
'
.

■;:''I

.

Arlington Wesley Porter, Pres¬

'*

.

HALSEY, STUART & CO. Inc.
•SI

'

"'7V"

•

*

^

Y

^^r'"-® '/• 5 -i ^; .iv"

To be dated September 15.194S. Par value and seifli-annual dividends (March 15
Pa. Definitive Certificates, in the denomination of $1,000, registerable as to par

and Septemljer 15) payable in Pittsburgh,

yalue. Not redeemable prior to maturity.
Certificates in temporary or definitive form will be delivered
at the offices of Halsey, Stuart & Co. Inc., 123 So. La Salle St./ Chicago-90. 111. and 35 Wall St., New York 5, N. Y. The
information contained herein has beeii carefully compiled from sottrcerf considered reliable and, while not guaranteed as
7-,f - • >•
*
to completetiess vt accuracy, we helieve.it to be correct as of this date.
*
Tliese Certificates are offered when, as and if received by us.

>/

Of

?'•'*

betwe<^
daily./About

t

ident

*

./

and 4 p.m.

1,900 employees have already been
registered.
\' J -

four

and see what happens to the
country in the meantime.
Based
upon Newton's Law of .Action and

■

Issuance "and sale

regardless

"

are

iCetificates are/to be issued uridef dri Agfleemerif to be dated as of September
15, 1948, which, will provide for the issuance of $1,600,000 par value ot Certificatesi to be secured by new standard-gauge railroad equipment estimated to cost
not less than $2,000,000.
v""'

r

quarters obviates the necessity of

registering;

unconditionally guaranteed as to payment of par value and dividends by endorsement
■' by The Wheeling and Lake Erie Railway Company.

Selective

New

Mr.

years




,/

requirements. / This enlarge¬
ment of local registration faciliteg
is

y

cThese

is subject to Selective Serv¬

ice

of

If this country is headed for a*
lower national income and the
tural

who

\ ".."I

;

>

;

1

(Philadelphia Plan)

the

Broad /Street,

Exchange

1

i

.

ly .satisfied.

Equipment -Trust Certificates.

Serv¬

.

»

■

^IlSSepiember 9, f948,

it.StSli-

are ex-

' ported to Denmark and Norway.*

Wheeling and Lake Erie Railway
Equipment Trust, Series Q

Service;

jEmil Schram, President

/

cotton from the United States.

accuracy.

NYSE Reg. Facilities

:

been .almost

upon

unusual

an

:

textile industry is

Coppock's past mar¬

forecasts

,

rate of about 70%

because*^ times pf adversity: the
mbral jrlsk is sometimes the most wholly dependent
mortgage

a

wage

of

announced Sept: 8 the

extension of

too

*

market

,

.

,

.

stock

p.m.

by the New York Chapter, Amer¬
ican Institute of Banking, Fourth
Floor, Woolworth Building, 233

tures: dropped from 24.45

when all boards

stability of your
ber of
'Comparing ,.the '40s mtKiheJZQs
Company,'San Antonio investment portfolio, due to shrinking real
There is considerable difference
estate prices..
< /.'/!/
,
bankers, has been secured as the
beiween the boom period of the instructor for this new course. Mr.
"I cannot close this address with¬
past 10 years and the so-called Coppock is a member of the New out
reiterating the words of cauCosolidge. boom of the twenties. York
Society of Security Analysts
The prosperityperiod
of - the rind author M '& weekly market
twenties was a post-war boom cul¬ letter used'
by investment bank¬
minating in a period of drastic ers and investment counselors. A
uncontrolled

through

13

Sept. 17 from 5 p.m. until 8

during 1921.. However, cotton fu¬
Broadway. Classes, held only dur¬
-in ,Aut
ing the evening, are scheduled to
of directors should give serious gust, 1920 tO; 13.85 in Decegabori
'start Sept. 20. w
,■
and a general business slump was
thought to this subject. I have
The school is a section • of the
ndted tn my -own association that on tli e way, . The article goes :oh
American Bankers Association and
prospective customers who I know to point out that the; parallel of is sponsored by banks in Greater
1920 and 1948 -is not necessarily a
are perfectly able to understand a
New York. .V'
■'■!
financial statement, give very lit- prediction /that a readjustment is"
,tre weight, to the item of "surplus evident how but a wrirnihg that Ht
cates before the first of the year.

know / is ^Are

point of 1945.

tion and frenzied speculation. The

in
is

.

prolong prosperity~ but are
willing to do bo? ' Remember

which is listed as Business Admin¬
record highs." The. volume of busi-~
istration 328,r will offer 3 semester
ness
today stands at 28% above
hours of college credit to those
normal.:; This is close to the April,
above the low

Deweese

others who have made application

fourfold

of

DeWitt

existing in August, 1948 and those
of August, 1920. 'Predictions "dn

that politics are Onfy an echo of
$215,000,000,000 com¬ what w£ ourselves' are willing to
A- river does riot run higher
pared with $40,000,000,000 when <!o.
.1 • L
Rooseveltbecame President. This 'thari- its-source;

era

■

to

Runner in which he called atten¬

will be about

almost fell to the

"

d

num-

would encodrage the gov¬
ernment to. cut its -pay rin<l relief

we

volume

a s e

no

In the New York

same.-

tion to the similarity of conditions

we

cluding four of war effort).
In
factj the National income for 1948

the: booiri

Le

note the

f

ch

one. ex¬

/Herald Tribune* pf Sunday,- !Sept,
5, there' was ah article on; the
'State of. Business' by Harvey C.
C' ber of associap

<

actly the

arid

h i-C h

do to

,

m u

will find that 14 are selling

less, 15 for more,

have had their

"

higher.

for

and
supply,/, this accounts insured by the Federal
prices from/going Savings and Loan Insurance Cor¬

,

would prevent

any
; If

vwe

change
habits in: accordance

buying

our

come.,;

would be willing to

sumers

normal for the last ten years (in¬

increase consists of a
doubling >of goods and services
produced and a doubling of prices.
\
This record really outdistances

very

continue/; to

-enjoy present good business /for
sometime

you

"I have been

con¬

fo^/hiir,ddIlWi^)/the

more

United

give

/

last March.

DeWitt stated:

times and—un¬

World War Ill-

all—employers and
should ponder wageworkers—would be willing to

im?

,

by

complete investigation. This situ¬
was very ably expressed by

ation

in
his
first
ing of the League in New York: Abraham, Lincoln
Mt is true that wages Inaugural Address when he said:Federal
Sav¬ are on the increase and some com¬
Nothing valuable can be lost by
ings and Loan modities are leaching new highs. taking time. If there be an object
to hurry any of you, in hot haste,
In surance However, if you will compare the
Corporation. selling price of 30 representative to a step which you would never
commodities on Sept. 7, 1948 with take deliberately, that object will
In
this
conn e c
tion, Mr. the selling price a year previous be frustrated by taking time; but

the

members

i

Ropr

''saved"

message

their accounts

'

f
^1;

less

have

to

insured by the

will probably be defeated in 1952.

how

opening,

to face hard

sure

m~

tion that I first mentioned in my
at the semi-annual meet¬

organiza-

tion

.

pi

17

in his

Hence, perhaps I am not worthy to discuss politics. • But—
as, my mother used to say—'I like to see even the devil
get his due."
{
.
Therefore* * as $

■0

(1113)

DeWitt, retiring president of the New York State Savings and Loan League,
presidential address at the 60th Annual Convention held at Saranac Inn, New York,
Sept. 12 to 15; sounded a pote 6f caution against unsound mortgage lending and urged the

r

paries.

t i

/

CHRONICLE

presidential address at 60th Annual Convention of New York State Savings and Loan League, Deweese
; W. DeWitt cautions mortgage institutions of possible shrinking of real estate values. ^

[

workers would work

and

Dewey's desire to be President.
I

FINANCIAL

&

Q. Public Should Do Urges Savings-Loan Associations to Insure Loans

By roger w. babson

Mr. ! Babson

COMMERCIAL

THE

.

'fc;V-:. i?''" ■''n-f

,;v" >.■ *■'

18

COMMERCIAL

THE

(1114)

FINANCIAL

&

Marshall Corns Joins

Securities Salesman's Comer

Wolf and

Belter

.

loss unless he can charge his customer an

ing

additional commission.

a

some

method whereby the unlisted firm could be compensated in
elicited

column

such

should

committee

a

be

and the suggestion
met with considerable

of replies,

number

a

formed

One letter in particular from George Hemmen of The
George Hemmen Investment Company made some interesting obser¬
vations on this matter, -We quote: "The fact that the average dealer
is not given any concession by the Stock Exchange members affects
Jbis judgment and has a tendency to prejudice his decision because
of the lack of profit involved.
Personally, to be honest and sincere
with our clients, I point out this fact to them and because of the
approval.

Service

render* they mutually agree to pay us a small additional

we

political adventurers seeking

SPRING

LAKE, N. J,

can

This

view

was

expressed here

nomic

com¬

mentator

'

for

and

in

asso¬

He will

New

their

business

1

/'After

au¬

account-

Jersey

tion.

and

dits.

con¬

Gas Associa¬

which renders

16
floun¬

years

.

ing,

manage¬
ment and consulting

is

author

separate

effects

from

the

] further decried the effort to
resent

/

and

4'''/ 1'

'

the

services to "Finaneial

rep¬

"social gains" the tricks

robbing Peter to

The

of

Merryle S. Rukeyser

banks and bankers.

as

incidental to money manipulation

ll'/r

dering," Mr.
Rukeyser, who

Marshall Corns

to

Rukeyser further declared
major intellectual error
of the period is the use of false
labels. As an illustration, he cited
the
tendency to describe reac¬
tionary Marxian collectivization as
"progressive" and "liberal."
He

vention of the

division

bank

the

voters

that

speech be¬

a

fore

with

financial

Stanley

Mr.

News Service,

has

head

strengthening the

10 by Merryle

their true-causes."

International

bankers,

them.

Sept.

on

Rukeyser, eco¬

banks

ciated

through

power

Better living for 40,000,000 American

—

be promoted by popular insistence on
economic foundations of a free
society.

management

become

for this business.

manner

This

that

study of this whole problem with the objective of devis¬

Strenglhening
Society, Says Rukeyser

on

demagogic splintering of population.
families

proposal was put forth that a committee comprising the most engineers and
men in both the unlisted and listed fields should
get together Consultants to

and make a

condemns

and

r
In the Aug. 26 issue of the "Chronicle" we put forth the sug¬
gestion that unlisted firms should sell listed securities.
But we also merly Presi¬
dent of Mar¬
brought out the fact that as desirable as this policy appears from
shall
Corns
the standpoint of the investor and the dealer as well, that under
and Company,
present conditions the unlisted dealer must handle this business at

The

Publicist

certified public accountants
management engineers, an¬
nounce that Marshall Corns, for¬
pany,

By JOHN DUTTON

able

Living Depends

Company

J

Thursday, September 16, 1948

Free Economic

CHICAGO, ILL.—Wolf and Com¬

a

'r./

CHRONICLE

speaker

new

to free

pay

cautioned

Paul.
against

fashion to give lip service

enterprise, while trying to

Security in A.
hamstring the system through un¬
experienced and Changing-; ~
sound tax, monetary and legisla¬
■
with you, that if the Stock Exchange members would make a scien¬
practical banker and for a number World," declared, "the United tive j)Olicies. He called for a re¬
tific study of the matter, they would find it would, in due course, of years was an operating officer States tan renew its
strength by vival of the American dream of
of one of the leading banks of
not only increase their volume of business but at the same time make
drinking again at the fountains of Horatio Alger, Jr. and asked for
commission above the

Stock Exchange commission.

the Stock Exchange transactions more stable

.

.

.

I believe,

and improve public

Mr. Corns is

Chicago.

tionally

He

as

a

an

is well-known

na¬

freedom and individual initiative.

bank management

In
practical terms, this means
engineer and consultant and has turning thumbs down on
political
is approximately $18 or $20 on a hundred shares, but the very fact been a frequent contributor to
adventurers who seek power
that they cater more to the small-time speculator is probably respon¬ banking publications on manage¬ through devisive class
appeals to
ment and economic subjects.
sible for the low average commission rate.
special interests of numerically
I believe that if they
Wolf and Company, one of the important pressure groups. Such
would allow concessions to all members of the National Association
long established firms in the pub¬ splintering of the population leads
of Securities Dealers tWe disagree here—w say all registered secur¬
lic accounting field, maintains of¬ to Old World
backsliding.
The
ities dealers,] that they would find the better part of these dealers fices at 7 South Dearborn
Street, American Way depends on

relations.

No doubt they would contend that the average commission

'

pro¬

who

considered

their

transactions

irather than .speculation,

and

of

more

would

Ibetter and higher quality stocks.

All

in

nature

investment

an

result in

transactions in
all,

a

and

if the

I believe

Stock Exchange members would grant all such dealers

Chicago, and in New York, Phila¬

the delphia, Indianapolis, Des Moines
Oklahoma City.

fare.

Customers Brokers Get

the standards, and dealers would gradually do a better job for their

f.

/ ^

1

*

<

; We believe that Mr.

average

fie

unlisted

cannot make

jment

funds

make

a

as

Hemmen is right when he states that the

dealer
a

looks

first

for unlisted

situations because

profit out of good listed stocks.

one

medium

profit; however, if

of

we

offering

are

listed

He. sells inypat-

securities1 and

going to go into the business of

becoming distributors for mutual funds to the extent that

individual securities,
and

some

day

we

we

are

still

building

up ,a

we

place and they deserve

the

public

formed
"In

problems

the

on

basis

of

ment of science and

In

concluding.

invention.

Mr.

Rukeyser

said: "What Julius Tannen said of

individuals is also true of nations.

The
is

comic

remarked:

fellow

a

sucker.'

who

The

'A

pauper
to be a

used

citizen

is

sucker
who assumes that we can have the
a

continuing benefits of the Amer¬
ican enterprise system without
adhering to the ingredients which
have been demonstrably success¬
ful. With Marxians momentarily
in retreat in the free world, this is

cour¬
an

time to proceed half way to
slavery through what is glibly de¬
scribed as a 'mixed system'."

in¬

citizenry.

the

circumstances, circula¬

been announced by the Nominat¬
ing Committee of the Association

tion of political blue sky is dan¬

of

insult

Customer's Brokers.

are

Elections

and

gerous

to

disruptive.

the

It

intelligence

is
of

an

the

Mr. Rukeyser asserted that it is
sign of immaturity to be against
inflation withoutv recognition of

a

the

basic

which

activities

policies

cause

and
the trend.

to be held at the annual meet¬

neglect ing of the Association 4 p.m. Wed¬
Sept. 22.
The meeting,
ancl the

ITS POSITION OF IM¬

its

meet

ageously

Executive Committee has

dinner to

SEC

follow, will be

Mutual funds have their at
Delmon's Restaurant,
the high standing which they hold today,
floor, 16 Liberty Street.

BUT IF OUR BUSINESS IS TO RETAIN

ment, it is important that the Re¬

A slate of officers and members
of

gigantic Frankenstein nesday,

live to regret it.

may

'

time of postwar readjust¬

a

respect for thrift and indus¬

nor

Slate for New Officers

•

.

.

.

"At

concession,

it would not only stimulate more business but would, moreover, raise

Clients."

moting inter-group harmony, not
fanning the fires of class war-

on

new

try and for the creative achieve¬

second

Survey of Inveslment Companies

The Securities and Exchange Commission on Sept. 9 made public
quarterly data on 147 management investment companies registered
under the Investment

Company Act of 1940, of which 69 were opencompanies included have fiscal
quarters ending March 31 and'^
TIONAL .CONNECTION WITH THE FINANCING AND DISTRIBU¬
ment companies continued to sell
Maurice Gliqert, of Hirsch and June 30, 1948.
TION OF INDIVIDUAL SECURITIES OF SEPARATE
BUSl^ES^
The market value of the secur¬ to the public more shares of their
Company, as Vice-President, EdENTITIES.
* *
r '
1
'
|
mond Tabeil, of Shields and Com¬ ity holdings of > these companies stock than they repurchased; for
There are billions of idle dollars
lying around in the banking pany, as Secretary, and Milton (exclusive of governments and the:-39 companies, the excess of
of
other
investment sales over purchases in this quar¬
system that are either going to stay in hiding or they are some day Leeds, of Pershing and Company, securities
companies) amounted to $2,385,- ter amounted to $22,876,204, com¬
as Treasurer.
-going to flow back into business.
Some of these dollars will be
with
To fill vacancies on the Execu¬ 036,000 at the end of the second pared
$21,088,194
in
the
needed to finance the
staggering demand for additional capital that tive
quarter of 1948 compared to $2,- preceding
quarter.
Meanwhile,
Committee
the
following
Will be required by our economy in the years which lie ahead; But have been nominated for the term 236,125,000 at the end of the first closed-end companies continued
in order to coax this
retire
both their stock
and
money out of its hiding place we need the of office as indicated by the year quarter, while their total assets to
rose from $2,632,113,000 to
in parentheses:
$2,802,- funded debt; the excess of re¬
\V
cooperative effort,of the entire securities industry.
What better
112,000.
In
relation
to
total purchases over sales of stock in
N. I Leonard
Jarvis,
Hayden
method for formulating such a
program of cooperation in our indus¬
assets,
these
security
holdings the second quarter of 1948 for the
Stone & Co. (1952).
try could we undertake than to select some such problem as this
Frank P. Rinckhoff, E. F. Hut- represented 85.0% at the end of 78 companies totaled $2,407,783,
Jone and try to solve it.
the first quarter and 85.1% at the compared with $18,780,062 in the
The member firms need more business- ton & Co. (1952).
Cash first quarter, while the excess of
William Cogswell, Fahnestock & end of the second quarter.
good business of an investment character—-the unlisted houses can
and cash items declined slightly repurchases
or
Co. (1952).
redemptions
of
produce this business—the investors of the country need the
best,
from $105,724,000 to $105,382,000. funded debt over the amount of
Jack
B.
Huhn, Bache & Co.
unbiased investment service which we can
give to them—we say (1952).
Holdings of government securities, sales in the second quarter of 1948
on
again, MAYBE THERE IS AN ANSWER TO THIS
the
other
hand, rose from was
$2,000,199,
compared
with
Nicholas
F.
PROBLEM, SO
Novak, Drysdale
LET'S GET TOGETHER AND FIND OUT.
$175,290,000 to $182,166,000.
& Co. (1950).
$908,296 in the preceding quar¬
The survey shows that during ter.
Arthur J. Messing, Herzfeld &
.i
Cooperation between men of good will, all engaged in the same
the second quarter of
1948 all
Stern (1949).
business, all under attack by a hostile Administration for 16
years,
Lewis R.
Harder, Harris, Up- companies in the aggregate re¬ John L. Mayhew Joins
all with a job to do, and
ported an excess of purchases
engaged in a vital industry which needs ham & Co. (1949).
The Nominating Committee is over sales (purchase balance) of Roberts Co. As Analyst"
paake no apology to anyone; what better basis could we find for
portfolio securities amounting to
Roberts & Co., 61 Broadway,
composed of:
j frying to enlarge our activities, increase our services to our clients
$9,365,000, compared with a pur¬
Thomas Bowes, Bache &
; and enlarge the profit
New York City, members of the
Co.;
possibilities which lie ahead of us?
chase balance of $10,778,000 dur¬
Harry Corbett, Gude, Winmill &
New York Stock Exchange, an¬
Co.; John Gordohn, Steiner, Rouse ing the first quarter of the year.
Both
of these
amounts exclude nounce that John L. Mayhew, for¬
& Co.; John
Hart, E. F. Hutton &
Co.; Raymond J. Kane. Wrn. H. transactions in government bonds. merly with J. Arthur Warner &
Rosenbaum & Co.; Laurence J. The 69 open-end companies re¬
Co., Inc., has become associated
Over-the-Counter Quotation Services
ported a purchase balance in their
Moran, Smith Barney &
Co.;
with the firm as security analyst.
portfolios of $28,708,000 during the
Nicholas F.
PORTANCE IN OUR ECONOMY WE MUST RETAIN

ITS TRADI¬

Archie
F.
Harris, of Merrill,
Lynch, Pierce, Fenner and Beane,
has, l^een.,proposed, as President,

end and 78 closed-end companies. All

.

Novak,

For 35 Years

Drysdale

&

Co.; Michael Sommerfield. Hay¬
den, Stone & Co.; John Tucker,
Fahnstock & Co.

second

quarter of 1948, compared

with

purchase balance of $24,-

230,000
In

Joins I. M. Simon & Co.

NATIONAL QUOTATION
*

46 Front

BUREAU, Inc.

Established 1913




.

•

ST.

to

The

Financial

San Francisco

Chronicle)

LOUIS, MO.—Paul

tason, Jr. has joined

Street, New York 4, N. Y.

Chicago

(Special

the

the first

during

contrast,

the

companies showed
;

E. Pelstaff

a

of

in their
ond

78
a

quarter.

closed-end

sales balance

portfolios during the

quarter

of

$19,343,000

sec¬

com¬

Mathews

BALTIMORE, MD.
Mathews
with

pared with a sales balance of $13,-

Inc.,

Fourth
Street, members of the
New York and St. Louis Stock
Ex¬

452,000 during the first quarter.

He

changes.

the current year, open-end invest-

I.

M.

Simon-.;.&

Co.,

■

315

West

During

the

second

quarter

Now With

Mitchell, Hoffman & Co*
has

Mitchell,

Mercantile

was

Harry E.

—

become

associated

Hoffman

Trust

&

Co.,

Building.

connected with the former

of firm of Frank B. Cahn & Co. for

* about 23

years.

THE

Number 4734

168

Volume

•

correction•';
In

our

issue of

j/jy'J

a

brief extract taken from

his recent address in Holland., The net effect was to make
as

yJy

it

appear

if John Foster Dulles were the author of the sentences in question.

We offer our

apologies to both Mr. Dulles and Professor Hromadka.

The. brief article now: corrected to
appears

remove

the unfortunate error

below.

"Anxiety about the advancing social transforma¬
the leadership

under

tion

of the- Soviet Union is

depriving the average Western citizen of a real

of the situation and of an adequate under¬
standing of what is actually *
going on. He has not much to
offer along the lines of moral,
philosophical or spiritual leader- •.
ship.
What he has taken for
'granted isT slipping out of his '
grasp

V

t

•

him

con¬

fused, restless, scared and

nerv¬

thetic.

'

"His

<

and

.

•

nial

nations

wrongly,

of

John F.

world."—Professor Josef L. Hromadka.

not

At

V

West do

that

who defend the institutions of the

so on

purely materialistic grounds, such

they have developed

reasons are

tem should
men are

as

production. Such
inadequate. No political or social sys¬
mass

prevail unless it is the

means

whereby

consciously trying to bring human conduct

into accord with moral law and to

portunity of

men

enlarge the

op¬

to exercise their human rights

arid fundamental freedoms."—John Foster Dulles.

What
one can
can

we

find difficult to understand is how any

suppose

offer

more

that such

a

system

as

communism

of any of these things than a free

society.

) i

the present

gives

promise

of

.,

,

Pincher Creek and Redwater will

cannot

if

occur

the

armament

is stepped up, no matter
which political group may be in
power. A completely friendly set¬
tlement with Russia and a neigh¬
borly association does not appear
possible for some time to come.

program

Russia

is ahd

minds.

always will be an
i Jo' ' "W&stehi

erif^fha

Oriental*

I cannot see,

reduction

in

armament

governmental
of

fact

therefore,

orders

An¬

sources.

international

the

must

a

be

considered.

add two more

constitutes

major fields to the

field at Turner

Valley, which

it has been

proved

hisim¬

automatically

is

proved. The Canadiaq labor .situa¬

discovery; .of .fresh/ productive

there

£■;

•-ii ?

k;* •

tion

According to expert opinion this
is only the beginning, and almost
the

entire

•

Western

underlying

strata

prairies

the

and

is

now

is

much

still

improved* and

naturally

a

the

North

potentially oil-bearing. The vast
expanse
of the McMurray tarsand area 'alone is estimated to

tendency for the price of golc| Jo
rise in relation to other

commodi¬

ties.

appear

be

thus

There would

good grounds for the

to

/the

which

Canadian

duly

in

depressed

gold

stocks,

been

have

moreover

un¬

past

few

the

years.

fully

now

are

in

now

im¬

of

course

major sections of our economy.
This adjustment is being carried portant expansion. It now appears
on now.
Lumber prices are re¬ that the time is not too far distant
ceding from their fantastic post¬ before Canada's oil requirements
will be supplied from- domestic
war peak, luxury, items have seen
their sellers market disappear, sources, and ultimately the Do¬
major
the
electrical
appliance
group minion should become
has shown the .glut of overpro¬ exporter instead of an importer
of petroleum products*
duction at high prices and "highIn view of the ever increasing
cost" companies are having diffi¬
culty meeting competition. These world demand; the prairie prov¬
adjustments are necessary to pro¬ inces will always have a ready
market for its oil, whereas, as Jit
duce a healthy economy and the
over-all business picture will be has been seen in the past,. sur¬
bettered when the process is com¬ pluses of wheaj) and other, grains
.

difficult

sometimes

are

jto

current

optimistic sentiment with regard

.

are

strong

<

cognizant of the
tremendous possibilities for Cana¬
point to a stabilization of our dian oil production on a vast scale,
economy at a rate of production and are now engaged in intensive
higher than in any pre-war pe¬ drilling activity. Already produc¬
riod. Prices of many items must be tion is severely taxing the existing
brought into alignment with the refinery and transport facilities
do exist
in the business picture, all signs

as

orically

oil companies here and elsewhere
soft spots

eco¬

gold

ap¬

contain the largest amount of oil
reserves in the world.
All major

some

general

Recession, the position of

until recently ,to be in
steady decline, has now taken on
a. new lease of life following the
peared

time by purchases for

While

a

nomical

West Provinces is considered to be

some

unfavorable factor

an

but in the event of

already imposing array of Alberta
oil-producers.
Moreover, ^Cana¬
da's first and oldest major oil¬

which

many

}

By WILLIAM J. McKAY

•

does

countries.

Dulles

democracy as a more reliable arid
trustworthy guide through the labyrinth of this

"Today

*/

government support

..

for

Soviet brand of

*

level

the assistance of the participating

x

which, rightly or
looking to Soviet communism and the

are

price

ERP, it should be remembered, is
a long-range program and the de¬
mand for hard goods in the do¬
mestic market will be augmented

the former colo¬

in

19

(1115)

Canadian Securities

to be in the cards due to the

situation

political

confidence

CHRONICLE

rate of progress the oil of the Canadian prairies
surpassing in economic importance the hitherto
paramount assets in the shape of wheat and other farm products.
laws through 1949, and the tre¬
Largely as a result of the spectacular development of the new Leduc
mendous influence of
the farm
and Lloydminster fields, the Cana-S*lobby.
1
dian
oil
production has been rising costs of production, the
doubled in the course of the last scarcity of labor, and the upward
Armament Program Will Prevent
year.
In addition to these new revaluation of the Canadian dolJ/
Deflation
proven areas, it is believed that
ar.
The cost of production still
Deflation of
any
consequence
seem

extension

from

apa¬

,

(Continued from page 3)
commodity

other

decisions are.
not free of cramps and uncertainty. He is losing trust and

-

;

disillusioned

or

ous

makes

That

hands.

FINANCIAL

Market Ahead!

Sept. 2 the name of Professor Josef L. Hromadka

inadvertently omitted at the end of

&

Prudent Ball

How Can It Be?

|
was

COMMERCIAL

of

dis¬

J

Gerald F. X. Kane Is

With P. P. McDermott
Peter

McDermott &

P.

Wall
New

Co., 44

Street.

York

.

f v

City, announce
that Gerald F.!
X.

Kane ' has

become

ciated

asso¬

Jwith'

them in charge
of the unlisted

trading de¬
partment.* Mr.-

Kane, who has
bee

n

*

the»

in

"Street" for

twenty

years.'

trade : in '

will

pleted.
The position of efficient
all u n 1 i s ted
producers will be strengthened by posal. Western Canada's depend¬
securities. He
Gerald F. X Kane/
these
changes
and
prices
for ence on a constant world demand
was
formerly
stocks of such corporations will for her export surpluses of grain
&
with
Luckhurst
Co.,
Inc.
advance,
reflecting high stable has always constituted a vulner¬
able factor in the Dominion econ¬
earnings and dividends.
omy;
the addition
of another
I believe in a bull market but
major export item would there¬
a
selective hull market where
fore be a further step towards a
careful and. prudent buying Will
healthier stabilization of Canadian
as
be the key to profitable transac¬
foreign trade. It would also con¬
tions.
Careful analysis of each in¬
tribute to an important degree
Vincent M. Gowen will become

E. W. Clucas to Admit
Gowen

V

dividual issue under consideration

will be

"I have flown to New York for

with Governor
,

a

final conference

ward

Dewey and John Foster Dulles be-

necessary,

but exercising

such care will bring its own re¬
—

profitable

market

pur¬

the

towards
U.

solution

of Canada's

dollar problem by creating
favorable instead of an unfa¬
S.

a

vorable balance

this account.

on

location

The

Canadian

the

of

Western

in the General

partner in E. W. Clucas & Co.,
Pine

70

New

Street,

York

other

chases.

fore Mr. Dulles leaves for his critical responsibilities

a

Partner

members of the
Exchange and

Stock

exchanges, on Oct. 1. * Mr.
is Trading Manager for

Gowen

nate in view of their

Assembly of the United Nations at
Paris.

We have canvassed the

foreign policy problems which
confront our country, including

Admit Three Partners

"Regardless of political dif¬
we are
serving

ferences at home

the world that Amer¬

notice

on

ica

united to

is

protect Amer¬
rights everywhere and
through firmness in the right to
seek peace with justice for our¬
selves and the other peace-lov¬
ing peoples of the world.
"It is of the greatest impor¬
ican

A.

H.

Vandenberg

tance

do not understand

political system should not
be misled by our political campaign at home. We
shall be in internal controversy regarding many
phases of foreign policy. But we shall not be in con¬
troversy over the basic fact that America is united
against aggression and against the foes of freedom."

This is
no

no

more

light

Vandenberg.

time to "rock the boat,"

intention of
on

doing

so,

Street, N. W., mem¬

bers of the New York Stock

but

we

we

should like

a

have

little

the precise meaning of the terms

Ex¬

Mr. Sites and Mr. Nun¬
have been associated with
the firm. Mr. Means, whose ad¬

nally

mission to

Courts

the firm.

coastal

area

and

the northern states of this country
could readily be

supplied by

CANADIAN BONDS

com-

partively short pipe-lines, and the
of Alaska could

fuel requirements

Canadian

ported in the "Chronicle" of Sept.

oil

of

time

war

to

these

cannot

areas

be

GOVERNMENT
PROVINCIAL

in

over¬

.

MUNICIPAL

rr

estimated.

& Co. was re¬

9, was previously Vice-President
of the Trust Company of Georgia.

CORPORATION

During the week the external
section

bond

the

of

market

re¬
'■

mained dull and

internals

were

inactive, and the
unchanged, despite

i

the easier trend of free funds fol¬

demand

decreased

lowing

on

Ed. T. Volz Forming
Own Investment Firm

ancy,

ANTONIO, TEX.—Edward
T. Volz will form Edward T. Volz

further

CANADIAN STOCKS

tourist account. The stock markets
lost

and Company,

with offices in the

South Texas Bank Building, about

of

much

of

their

recent

buoy¬

but the Western oils resist¬

ed the downward trend following

SAN

Mr. Volz is Vice-President

the First of Texas Corp.

new drilling
in the Redwater district

of Alberta.

held

most

?

vances

that

In

as

The gold
of

their

mines also
recent

-

especially dur¬

is. engaging in a secur¬

gold-mining industry has suffered
a series of shocks in the shape of

Bashford

dom/'

ities business.

;

—

D.

•

NEW YORK S,

\

recent years,

\

TWO WALL STREET

early stages of a new bull

ing the war period, the Canadian

OHIO

INCORPORATED

the feeljng still persists

D.

VMASSILLON,

A. E. AMES & CO.

ad¬

this section of the market is

the

trend.

O. D. Bashford in Massillon

reports* of

successes

in

"against aggression and against the foes of free¬




fortu¬

admit

Sept. 23.

Oct. 1.

and

also

James W. also be conveniently satisfied. The
Means, Frank B. Sites, and McKee
importance of the availability of
Nunnally
to partnership as of
adequate
supplies
of
Western
will

change,

that other nations which

our

--Senator Arthur H.

Marietta

Pacific

northern

ATLANTA, GA.—Courts & Co.,
11

is

fields

proximity to
areas which are now poorly served
by existing sources of supply. The

Courts & Go. Will

the situation in Berlin.

oil

N. Y.

,i

:j' i
,

WORTH 4-2400

NY-1-1045

20

THE

(1116)

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, September 16, 1948
medicinals

Predicts ,'New Look" in Prices
National Association

.•

and

of Purchasing Agents reports
declining agri¬
reduced upward pressure on industrial prices.

cultural prices mean

set-up have been com¬
paratively simple as compared with most utility holding companies,
Northern States Power of Delaware has gone through some years
of litigation in connection with the efforts to develop a dissolution

"Ground

prices have

seemed

be

to

stockholders

by

but, class A
strongly

counsel.

Many
plans have been presented during
the course of proceedings before
the

SEC

the

and

Federal

in

but.

Court,

so

muchi opposition

by the SEC and on
Sept. 1 by the Federal Court'.;
While Judge Nordbye has not

signed the dissolution order,
is expected to do so around

in
wellinformed Wall Street quarters is
that the plan will not meet with
further
active
opposition.
The
appeal period will, it is V under¬
stood, be 60 days instead of the
former 90 days, so that barring an
appeal dissolution might become
effective around
mid-November.
Opinion

15.

Sept.

the

Under
of

issues

the four stock

plan

States

Northern

Power

of Delaware will receive common

of Northern

shares

of

Minnesota

capitalized

States

(which will

9,527,632

to

of

arrears

will

$10.06

common

new

"All

is

that adds

to

up

tween

will

supply

and demand.

Power

that

read

mately

$1,000,000.
The higher
/accrued
for
two

of

the

12

months'

period

ended June, so that to adjust to a
pro

forma basis five-sixths of the

amount

($830,000, or 9 cents a
share) should be deducted from
earnings. 'Moreover, the company
is

planning to install a pension
system, the net annual cost of
which

(after tax savings)

is $1,-

11
cents a
be re¬ 055,000, /or
shares). These labor costs ' would

with
obtain 10
and $3.50

Drag

were

months

the

earnings estimate

to

share.
reduce

level

a

around 86 cents.

However,
low

an

-

"Pressure

Like

other

j

,

on

dered

badly last week—but that
mostly due to the fact that
supplies were piling up as a re¬
was

sult of the heat

wave.

People

start of the
the

'real

decline in

prices

as

far

as

livestock and meat

concerned.

are

serves as a

thing,'

But,

warning that

even

important price group is

it

this

meats

go,

the cost

of

$1.16

The

sulphur

hiked

to $7
prices have

wax

latest

$5

quotation

pound, off 4c.

per

is

;:'/7 .V-j-'

'•

"A number of declines continue
to

through in the essential
Orange oil, oil of pep¬

come

oils field.

permint, wormwood, pine needle,
fennel and citronellyl acetate are
all

lower.. A new pain killer, a
drug said to be more potent than
cocaine or procaine has been dis¬
covered. As yet, it cannot be made
generally available until further
laboratory tests have been made.
"Little change is reported in
paint materials., In line with ear¬

ing.

lier

Cotton

tinues

side.

demand

yarn

spotty

easier

with prices
It

con¬

the

on

announcements, zinc oxide
prices have been lifted 2M>c per

is

reported that pound. The new and higher prices
efforts by spinners and sellers to are only guaranteed for the month
support quotations, bring little re¬ of September. Naval stores con¬
sult, and trading has been con¬ tinue quiet and the trade factors
fined to small lots. 7
"A
slow
market

looked

prevails

print cloths, with
buyers
manding lower prices and
ducers
tions.

•

in

de¬

pro¬

unwilling to shade quota¬
A

few

mills

havfe

offered

work

clothing fabrics for-delivery
through the fourth quarter. • The
offerings show converted types off
in

price,

while

colored

yarn

after

for

improvement until

no

Labor Day week end.

^Activity insthe fats andoils

*,

market

still.

is reported
With

near

export

until Sept.

15,

not

to extend positions this
Fancy tallow i3 quoted at

early.
-13 34c

pet:
pound/
oil at

wood

coconut

crude

continue
at
the - present
This pattern is expected to
be followed in the bulk of fourth-

peanut

quarter

Tall oil continues to

offerings.

ket, further cuts

may be on the
An oversupply of goods and
buyer pressure has brought on a

way.

definite

softening,

selling

houses

which makes
look toward the

Autumn months with
is

by" the
Caught

.

The

no

surgical

little

un¬

dressing
hard hit

reported to be
lower gray cloth prices.
between
high
contract

allo¬

expected

some producers are

hesitant

goods

"In the fine combed'goods mar¬

stand¬

a

fourth-quarter

for

cations

level.

trade

goes

so

-Textiles

-

refined

"Further cuts in the cotton tex¬
tile market seem to be in the mak¬

long¬ certainty.

no

onerway street.

a

"As

.

eat

less meat when it gets too hot. j
"This probably is not yet the

probably too

this, is

Foods

on

food
pricesis
Even meat prices floun¬

growing.

er

estimate.

'

-

all

eased.

That

watching. (Incidentally,
what is happening in'
coal,

and

been

ton. Carnauba

per

bear

pattern lumber^ and

a

rate

wages

Each share of 7%. preferred
■shares of

prices

"The
Republicans
now
have
pending and made official their claim that
the
adjustments
are
Administration is deliberately try¬
effected, revenues might be in¬
ing to hold farm prices up until
creased
by
approximately
$4,- after election.
That is the first
300,000, it is estimated, equivalent salvo
in
an
election
campaign
after increased taxes to $2,700,000,
which will probably^ be fought out
or 28 cents a share.
This would
largely on the issue of prices. Each
bring our pro forma estimated
major party is blaming the other
snare earnings to $1.06.
one for the present high
prices—
However, much of the advan¬ and both of them with some de¬
tage to be gained through the rate
gree of, justification because, in
increases
may
be lost through the final analysis the present
high
increased
labor
costs.
Wages price level
probably is their joint
Were
increased about 12% this
responsibility for mixing politics
summer, the net annual increase and economics.
after tax savings being approxi¬

approved

he

It

and

Wisconsin and in the Dakotas.

proposed

Court

developed that it was returned to
the SEC; later the present com¬
promise plan was evolved and

yet

Minnesota

in

Assuming

approved by the SEC and
considered by the Federal

was

was

cotton

raw

Political Football

One of these plans

in Minnesota.

in

,

also

were

represented

somewhat

favored

decline

paper markets re¬
of
declining agricultural prices ported in this issue.)
understood that the rate increases
and lessened upward pressure on
"A
quick run down of last
in that State will become effective
industrial prices.
•
'
^
1
week's price .changes7 shows the
Nov. 1,
Applications for other
7/7---7;^
f'/;; following picture;
;
I
increases are said to be pending

ests. 7The

by the management,

the

is definitely pulling a number of
textile prices lower. » :
.

satisfactory to all inter-3
preferred stockholders mission

program

^

~

"

of the ''Bulletin of the National Association
of Purchasing Agents," in a review
of price shifts, portrays an
approaching "new look" in prices.* According to the survey, " the
drag on farm prices has now reached the point where quite a fewfood prices are being affected and#r?—

While the capital structure and system

/

flotation

ore

refining,
until
lately was restricted to bug kill¬
ing .preparations.
*' " 8 \
j - j;

The Sept. 8 issue

Northern States Power of Minnesota

in

and

petroleum

corn 2434c;
cottonseed
22c;

22 Vz c;

2434c,

2c per

china,

20%jc;
and

soybean

21c.

jog along at

pound.

"Furfural, used in nylon, plas¬
tics, synthetic rubber and ad-

hesives, is now 8 % to 10% lower
price, according to the an¬
nouncement
by a leading pro¬

in

ducer.- Furfural is manufactured
from
milling
by-products and

corncobs.

,,>..8.7

-

Foods

/
living.
Even if support levels
cash; each share of 6% preferred
(with $8.62 arrears), nine shares utilities the company has been hold prices of grains far above prices for cotton gray goods and > "Food prices were .lower last
and $3; the A stock, 514 shares, greatly handicapped by having; to what they would be without such the necessity for reducing prices week, particularly in the meat de¬
use
obsolete
generating equip- crutches, it is well to remember oil- finished goods, this market is partment. Beef, pork and lamb
and the B stock 5/12 share.
I were all lower .and were off $2,
Foilowing announcement of the ment.
Steam-generated pfewei' that grains have already comej or, facing a tough problem.
Federal Court decision, an over-'for the entire; systenv was ^239,- /long \yay down from
their^post^ (•' "The largest individual operator $7 and $6 per

ihe-counter

544,070 kwh. in the ,12 months war peaks. These were reachfecL
last January, just before the big
j
Marfh 31, air increase oi
discon-vi30% over the 975,812,012 in 1942. February nose dive—which now j

market

in•, the

new.

stock temporarily devel-

common

oped, though this was
tinued .when it was discovered

spent about $22,- does not look half as phony in :
that the official order had not yet 000,000 last year ior construction, retrospect, as the inf lation-con- ;
been signed.
Quotations were ill' will spend about $32,000,000 this scious statesmen wanted us to be- ;
the general range of 834-9.; The year and some $70,000,000 during lieve.
"A drop in the cost of
living,!
preliminary
market
quotations 1949-51,
Present-system
company

,

of

10%' or slightly more, by early
presum.ably were fixed merely on ating capacity of, about. 480,000
an
arbitrage basis, with quota-! ^w-. w1^ be increased by .*37,000 Summer of next year now seems
4i/\nc«;
a**
4k
a/4
a reasonable bet.
tions
on
either* the" preferred dutih2f 1948*51. 8 gain oi 70
during 1948-51, a £hih of i
"Meanwhile, Uncle Sam will
stocks or the class A stocks as a Obviously,
this
should permit
very substantial fuel savings, as have to dig down deep into his
guide.
*■

*

-

For the

States

Power-

for

the

common

funds

of

Minnesota reported net income on
a consolidated basis of
$8,488,000
available

jeans,

12 months ended-June

Northern

stock,

equivalent to 89 cents a share.-On
July 20, the company sold $10,-

'over the next three years is esti¬
mated at only about $40,000,000

(no determination has been made
as

the

to

method)..

Natural

gas

ton

in

order

to

provide

for

'loans'

The total will surely

crops.

a

conservative

the

.

•

t

be

needed

for

sumption, as the

crop

year

have

dividend
increased

requirements

$960,000.

These

additional charges for new money

requirements

would

•

amount\ \ to

about 11 cents per share, reducing
pro

forma earnings to 78 cents.

around

was

mean

income to

ferred

60c.).;

continuation

This
.of

would

the

the Delaware 7%

stock

which

it

has

Jan. 1.

been

the

the

slightly better).

industrial

the

on

raw

has

recovered

lows

of

last

of

the

staple into the

pro¬

Chemicals

"One

maker

has

boosted

the

I

1946 Northern

Because of the

Northern

States

reports

on

while

tomatoes

of

short

a

supply in Maryland canning dis¬
trict.

"The cash

grain market

con-

j tinued its erratic course, up to¬
day, down tomorrow, following
the temper of corn.
held
about

Flour prices

unchanged,

per 100 pounds.

.

at

$5.75

.

Miscellaneous

"Another
nounced

ond

price increases

television

about

.

has

company

Sept.

8,

an¬

raclic

on

receivers on oi
because of wage

and material price hikes.
"The
price vof southern

pint
lumber edged a little
higher, tc
$77 per .thousand board feet, uf

of

Menthol is reported
demand and

narrow

declining

on

prospects of

receipts front Brazil, Japan
China.
/ '

■

The makers report that the
prod¬
uct. sells? for -$17,10 a ton at the

curb in

these

Pittsburgh, compared wit!

prices for

fuels:

other

smokeless

anthracite, $20.40: pes
upward trend in podoanthracite, $17.85; run of mine low
phyllitt, .which: started about two..volatile
coal,
$13.75; anthracite
week ago, is pushing even higher
briquets, $17.35, and an economj
and is now reported selling at mix of
hard and soft cOal- $15.88.'
$14.25 pet pound, compared with
the; previous quotation of $14; Bei^

large size of the more enthusiasm to get ready for
system (annual the F'all season, had it not been
for the heat wave.
revenues approximate $65,000,000)
But, as .things cause of competitive conditions,
and
the-company's high credit were, everybody seemed to ; be tartaric acid and cream of tartar
and commercial customers,
aggre¬
prices- have been reduced 4c~ and
marking time.
gating about $2,700,000, and small¬ standing (its bonds are rated Aa).
"That is clearly reflected in the 3c per pound respectively! Tar¬
it seems logical to expect that the
er
electric
and
gas
reductions
taric acid goes into the manufac¬
new common stock should even¬ (extremely small number of price
aggregating about $1,000,000 were
after; market seasoning, Changes reported last week. The ture of ; cream -of.;!tartar, tartar
also made in 1947-1948.
The re¬ tually,
organic
cent prospectus on the preferred sell on a similar yield basis to only market sector that showed emetic, intermediates,
anything like a trend was tex¬ chemicals,
baking powder, ef-?
ctock offering stated "due to the stocks of other important utili¬
fervescent beverages, is used as a
ties.
Increases
:
in
the
cost
8: tiles—and, there, the tone was de¬
of
fuel,
silvering and tanning agent, and
cidedly on the heavy side. • \ j
labor, materials and supplies, and
"Unless textile demand perks up in certain branches of the textile
ether items, consideration will be
:
With H. O. Peet & Co. f
real soon and with real oomph, industry./; given by the management to the
(Special to The" Financial Chronicle) j
textile manufacturers will have to
VI t; ls{ reported that; the critical
restoration of electric rates to the
tackle some real problems. Inven¬
shortage, of cresylic acid is to. be
KANSAS'CITY,. MO.—Paul M.
approximate levels of those in
In the spring of

States Power made voluntary rate
reductions for electric, residential

up

declined,

canned

in

*The

rather quiet on
price front during

was

;

of

bismuth
preparations $i.
medicinals, cosmetics and /<• ;."A7new smokeless fuel made
toiletries 15c to 30c' per- pound. frpm coal is riow being produced

and

"Maybe there would have been

cocoa

price

cheese
pound.

a

.

7

*■ further

pre-holiday week.

Sugar and

ad¬

fabrics

government loan, a factor that
could easily strengthen prices.

The Industrial Front

"Everything

cotton

movement

con¬

price

pre¬

time,
probably be

Increase

Light trading for export,
buying and some professional
covering are among the factors.
There are
reports - of a heavy

used

7'

will

same

while
lc

another

mill

of

away.

At the

prices

form

receiving recently (the 6% would
fare

the

firmed

-

prices of all types of
Japanese silk fabric will be raised

gresses.
For that, the Treasury
will be reimbursed, of course, and
the ta xpayer merely pays in tpe

same

unchanged,

declined

week.

run

higher domestic prices.
Street that such earnings would But, a lot of the 1948 crops will
nual
increase in
fixed
charges
be surplus and we may even have
permit payment of a 70c. divi¬
(after
taxc adjustment)
might
a
heck of a time giving theim
dend
(although the recent rate
approximate $125,000, and pre¬
ferred

about

that

"It

trade

somewhat, from, the

guess.

domestic

substantial vol¬

for

popular and
priced apparel trades.
;
has been predicted in the

"Raw

recently introduced into St. That money is not all "lost" from
Paul, and while the supply * is the taxpayer's point of view. Some
Aug.
limited this should favor earnings. of the stuff placed into the loans
will

a

_

was

000,000 3% bonds and on
11, 200,000 shares of $4.80 pre¬
ferred stock, proceeds being used While it is impossible to estimate
to repay a $12,000,000 bank loan future earnings closely, allowance
for
fuel
savings
and
growth
incurred about a year ago, to ad¬
would seem to warrant a figure*
vance about $6,000,000 to the Wis¬
around $1. consin subsidiary, and to provide
'
It has been estimated, in the
construction funds.
The net an¬

fabrics

might be as high as 20%, accord¬
ing to some guesstimates.

into the billions; maybe $3 billion
prove

of

ume

vanced.

1948

on

at

medium

askqd for by grain and cot¬

farmers

will

ings

re¬

spectively.
7
7
'
>
fourth-quarter book¬ j
"Medium sized eggs were 2c a
unchanged prices. This dozen lower; grade A butter held

his

mill distributes

silk

\

30,

hundredweight,

in the spun rayon fabric field has

opened

on

A

^

-

.

.

.

egg

Herrman & Samuels .Form7!
Herrman
York

•

&

Stock

' Samuels, J a
Nev
Exchange
membe

firm, will be formed
with offices at 120

as

of

Oct.

Broadway, Nev

York

bert

City. Partners will be Her
Erlanger Herrman, Donald I

Samuels,

member

change,

and

general

partners;

will

a

be

of

Joseph

limited

the

Ex

T. "Murray

-Milton

;

Jone

partner.

Samuels Was ! formerly a

Mi

partne:

.

effect before the 1946 reductions."
There is no regulation of electrie and

gas

Morris is with H. O. Peet &
23 West Tenth

tories

Co.,

Street, members of

rates by State Com- the New York Stock
Exchange.




their

in

warehouses

are

large: the next decision is whether
or

to

not

to

cut

restore

a

production in order
better

balance

be¬

with

us

coal-tac

for

some

time. The acid, a

1 chemicalc

7widely
used by manufacturers of
textiles,
plastics, dyes, inks, disinfectants,

in MacQuoid
man

was

now

;

& Coady. Mr. Herr

with

Dreyfus* &

Co

and prior thereto with Hirsch i

C6.v;;-::v-

Volume

THE

Number 4734

168

COMMERCIAL

FINANCIAL

&

CHRONICLE

(1117)
shows

report,

Federal

of

Chairman

says

as high as 20%;
hand, grocery and
stores, apparel and
general merchandise have held up

Deposit Insurance Corporation, in annual
^tio of

,

better than the total for all sales
in these

capital to bank assets.

Extreme caution in making bank loans and maintenance of ade¬

quate bank capital were urged Sept. 15 by Chairman Maple T. Harl
of Federal

Deposit Insurance Corporation when he released the Cor¬
poration's annual report to Congress for the calendar year 1947.
;C- "The prob■V-..X
v:
' ■
able

risk per¬

taining to the
of

years

banks-

"The extent to which this

a

in

i

ass a y

for

capital,"

Mr.
said.

Harl

.

"The:

rapid
expansion
in
bank

assets

r

during
war

the

was

Maple T. Harl

con-

centrated
in

loss

of

the

Since

held

if

little

involved

which

assets

risk

to

maturity.

have
expanded, while a decline has oc¬
curred in, the amount of United
States
Government
obligations
held by banks.
The ratio of cap¬
ital

bank

war,

loans

accounts to assets other than

cash

and

U. S. Government obli¬

gations declined frbm 25.5% at the
of

end

1945

to

20.6%

at the end

of 1947."

Mr. Harl

pointed out that banks
have been urged to write off their
losses

as soon as.

they becpme ap-

periods, air pockets de¬

on the down side if even a
modest amount of stock is offered

Similar air pockets are
the up side when any

sale.

noted

on

in

banks

by

buying

>

market

\ recent

.

,

to

Louisville & Nashville stock.

Ha i 1 road

i Holds Government

Gave

Financing and Credit Policies
Impetus to Postwar Inflation

First Boston-^Corporation, in booklet on U.

S. securities, criticizes^
low pattern of interest rates as expanding money supply and cone
tends access by banks to Federal Reserve to redeem government^
bond holdings contributed to

bank loan expansion

agree

ville,

that

analysts generally

its

own

merits Nash¬

& St. Louis
attractive/ issue. Statis¬

Chattanooga

stock is
tical

on

an

appeal, however, has not been

sufficient to stimulate buying in¬
terest in a substantial list of other
railroad

stocks.

Considering

the

chain of control it is also possible
that the rumored merger would

Corporation has just published a comprehen^-

have considerable support in logic

analysis "on United States Government securities.
The firm's
last previous publication on Government securities was in 1943f
r
An important chapter in the study discusses the consequences "Of
wartime and postwar government-^
—
—
Commercial
and Federal 'Re¬
financing which expanded bank
credit and "added impetus to war serve banks' holdings of goVterfr-

^—Louisville & Nashville already

The

First Boston

sive

•

and

postwar increases in prices."
the
Treasury
borrowed
war,

it "set

and maintained maximum rates of
interest for

new

issues," and made

short-term rates "abnormally low

relative to long-term rates."
combined
/

with

other

This,
techniques,

increased the money supply.

Although commodity prices rose
at the war's end, the book points
out that the Treasury delayed the
rise
of
short-term
borrowing
rates, which inflated money still
further.
Eventually, "support of
I longer-term Treasury issues was
necessary, and this offset much of

ance

other

by mutual savings banks,
corporations and associa¬

The

heavy participation of the

in

bond financing

is

in short-term rates."

Among other
approaches to the management of
public debt, the chapter urges that
"the goal should be away from

shown by the increase of individ¬
uals' holding of government se¬

rigid

cember,

The

book

also

contains

a

de-.

scription of the salient features of
obligations of the Treasury,
governmental corporations a n d
agencies and of the International
Bank for Reconstruction and De¬
velopment. ' Also
included
are
sections on the budget, the owner¬
ship of the public debt, consider¬
ations of taxation as applicable to
all

.

the investment income of corpora¬
tions

of

various types, as

Treasury

war

well

as

financing, Federal

Reserve "support" operations and
items influencing bank credit. : r
The

outstanding government ob¬
ligations embrace numerous sep¬
arate issues, and the tax status,
interest rate, date of issue, amount

outstanding and" denominations of
each

are.,

shown

in

convenient




turned down by

the ICC.
;

Rumors of a possible merger of
Fe*and

Santa
most

railroad

Frisco

appear

analysts to be

to

un¬

curities

war

from

billion

$10

in

De¬

cember, 1939, to $64 billion in De¬

The bulk of their

1945.

purchases was in the form of pav¬
ings f bonds.
Concern was fre¬
quently expressed that individ¬
uals would redeem their savings
bonds and
securities
as

soon

at

the

as

their marketable

sell
in

the

close

holdings £ of

substantial
war

of

was

last

amount

but
their

oyer,

year

government

bonds

that
ties

their

important

individual

circumstances.

where

price

supplies

major consideration. They
appear
to have done better in
building materials and furniture
a

and homefurnishings, and hold a
slight lead in automotive parts

and

accessories, drug stores, and
eating and drinking places.
Homefurnishings, building ma¬
terials and automotive sales show
substantial increases.

most

the

gains

part,

Others, for

show

negligible

losses.

For the first six
months the total sales gain of this
or

sample is 7% as compared with
almost 13% shown by the total
and

the

groups.

chain

mail-order

and

:

Total Sales Above "Normal"
On

the

basis

of

nattern, total sales

the

interwar

are now

(first

half of 1948) $8.1 billion, or 6.8%
above "normal" (relationship be¬
sales and disposable in¬
1922 to 1947) ; durable goods
sales $6.8 billion, or 17.5% below
tween

come.

normal;
and
nondurable
goods
sales $15.4 billion, or 19.3% above
normal.

/

Excise
The

Taxes

of collection of retail

rate

excise taxes on products in the
discretionary spending category,
discloses, in general, that expen¬

ditures
have

these items have been

on

since

declining

suffered

Fur

1946.

sales

Admissions

most:

covery

places of amusement and jew¬
elry have also, in the main, gone
down, while toilet preparations
and

luggage have shown some re¬
in 1948.
>■
April, 1948, collections show a
roads.
marked pickup over last year in
Frisco
lines
would
not
afford
Santa Fe any feasible route into all
categories.
This reflected a
St. Louis.
Finally, it is difficult general advance in retail sales in
The numerous recent
to see what manner of exchange that month.
offer could be made to holders of trade reports that motion picture
most of the Frisco securities.
A houses, night clubs and theatres
fractional share offer might be at¬ are doing very poorly are not ap¬
tractive to Frisco common stock¬ parent in the excise collections
competitively by the two
In the second place, the
-

over

data.

The Treasury Department, in a
report on the four retail excise
taxes, stated in respect to the luglage impost that, "as conditions of
supply and demand become more
normal, the present rate of tax
may affect profits significantly."

Similar
for

fur

conclusions

were

drawn

and

jewelry taxes, al¬
though not for the tax on toilet
preparations.
/
V

Francis J. Lynch Is
1947;

V-P of Katz & O'Brien
CINCINNATI, OHIO.
J,

Lynch has become

Francis
associated

—

analysis of movements in retail sales which has just been completed
by the National Industrial Conference Beard.
This indicates, the
Board points out, that 1948 will set<§>
———
another
In

record

1929, the

in

dollar

prewar

volume,

peak, only

over

last year.

The weakest

see-

tor is

jewelry, running 6% behind.
$48.5 billion moved across retail Although jewelry sales recovered
counters. Sales in the current year from a February
low, they were,
are
more
than two and a\ half in June, on a
seasonally adjusted
times the' 1929 total, while con¬ basis, 7% below the
correspond¬
sumers'
prices
are
only
40% ing month of 1947.
higher.
Gains in Nondurable Goods

Sales

Increase

Sales

in

increases,

Durable

Goods

Among

currently

are

nondurable goods, ex¬
cept for food, filling stations, and
fuel and ice, no gain greater than
10% was registered.
Liquors and
men's clothing are running behind

sales in the opening half of the
in dollar volume.
Other apparel
Corporations, particularly banks year were 10% higher than a year
groups,
shoes, drug stores, and
and others deriving a substantial
ago, durable sales increased 21%
eating and drinking places, al¬
proportion of their income from and total sales rose 13%. The rise
though doing an increased dollar
securities, are urged to "consider in rural retail sales has been 11%.
business, are probably behind in
fully the tax picture in formulat¬ Durable sales are now 25% of
unit volume.
ing investment policy" and con¬ total retail sales as opposed to the
stantly to "review this policy in wartime low of 14% in 1944.
The Chain-Store and Mail-Order Sales
the
light of actual or potential prewar peak for durable goods
A
comparison of chain-store
changes in income status and tax was 29% in 1929.
In 1933, it fell
and mail-order sales with total
liability."*
••-. '
«
as low as 20%.
sales discloses that gains for the
Besides voluminous text treat¬
Practically all the durables, led group as a whole are the same,
ing of various phases of govern¬
ment
financing, the book con¬ by motor vehicles and building but that the internal structure of

>

tains 23 tables and 12 charts.

lines

have been comparatively full and

served

one

For the first six months of 1948, the annual rate of retail sales
reached $127 billion, a gain of almost 12% over 1947
according to an

considerations primarily concentrated in the dur¬
buyers of government securi¬ able goods categories, according
may follow
in the light of to the analysis. While nondurable

m ore

nondurable

thing, there
would
presumably be strenuous
objections from other roads in the
territory '{ and from communities

For

'Conference Board finds 1948 annual rate almost 12%
reaching annual rate of $127 billion.

wcreflarge^lhan.they ;Werqa|tJie
5ehd-b£'"the-yvar.r*•-\
ik
5-The book outlines certain of the

Independents

Independents, therefore, are ap¬
parently doing less well in the

to

founded.

Reports Big Increase in Retail Sales

and trust funds.

public

pegging of the price
of
money,
which
has
aggravated
postwar inflation," and establish¬
ment of "a single agency respon¬
sible for policies ? on credit and
the public debt" and competent to
"advise and influence Congress in
the related field of taxation." \'\;

was

Gulf, Mobile & Ohio. A few weeks their holdings.

tions, state and local governments
and U. S. Government agencies

the benefit obtainable by the rise

•

guarantees its subsidiary's first
mortgage bonds. Anyone that has
.had any experience with railroad

St. Louis

mergers, however, will recognize
theiweJU nigh insurmountable 5ifment
securities
fluctuated frdlh ficultie^. that would be involved holders and a
compromise of some
$18 billion at the close.of 193rt'craa in bringing about a three way con- nature might possibly be worked
solidatipn.* At best, any such de¬ out for the Frisco
peak of $115 billion, six years
preferred. It is
later and to $91 billion, on DecrSl velopment would appear a long
hardly likely ^ however, that Santa
last.
The holdings of ,other??"HT- way off.
Fe would be willing to assume
vestors increased from $29 billiSU
St.
Louis-San
Francisco
has liability
with respect to Frisco
on
Dec.
31, 1939, to, a high"-of been involved in merger rumors First Mortgage and Income Bonds.
$163 billion on Dec. 31, 1947. -arsar practically ever since it was dis¬ At the same time, holders of these
Of this amount, $65 billion was charged from bankruptcy.
Last bonds would not likely take kind¬
held by individuals, $24 billion-by year there were negotiations look¬
ly to being relegated to an equity
insurance companies and the bal¬ ing toward possible merger with
position for any major part of

When

heavily to finance the

there were reports that these
negotiations, which had been offi¬
cially dropped, had been reopened.
These reports were denied. There
followed within a short period the
ago

interest' develops in the circulation, of rumors that Atchi¬
generally or in individual son, Topeka & Santa Fe and St.
issues specifically.
Price swings Louis-San Francisco were looking
years.
During the examinations tend to be wide and
with little, if into the feasibility of a consolida¬
made
in
1947 examiners found
any, regard for fundamentals.
It tion.
Up to the time of this writ¬
that less than % of 1% of the
is a particularly difficult time for ing there has been no official de¬
assets
of
insured
commercial
the security analyst.
nial of these latest reports.
banks were below the standards
This rumored prospective merg¬
Markets, of this nature are na¬
set for bank investments and were,
er of Santa Fe and Frisco is par¬
turally particularly susceptible to
therefore, subject to criticism."
rumors.
Two old ones were dust¬ ticularly intriguing to sentiment¬
; Mention
also is made of * the
ed off again last week.
As a re¬ alists in the railroad security field.
Corporation's plan for repayment
Some 60 odd years ago the prede¬
to the Treasury of the $289,000,000 sult, and in the face of generally
cessor of the present Santa Fe did
declining prices, Nash¬
of capital originally subscribed to sharply
acquire one of the predecessors of
it in 1933.
The repayment, begun ville, Chattanooga & St. Louis and
the present Frisco {St. Louis &
in September 1947, was completed St. Louis-San Francisco stocks ad¬
vanced on relatively heavy vol¬ San Francisco Railroad), and lost
on
Aug. 30 of this year, when
ume.
In the case of Nashville, it in the receivership of the 1890s.
Chairman Harl handed to Sec¬
One of the major stimulants to the
retary of the Treasury John W. Chattanooga & St. >Louis there
recent rumors of merger has been
were unsubstantiated reports that
Snyder the Corporation's check
the talk that consolidation with
for $12,600,000 to cover the final the road would be involved in a
Frisco would afford Santa Fe a
three way merger.
The other two
installment.
.
*
• .,
"
direct entry into St. Louis.
Santa
linked i with
the
road
in
the
The report not only recapitu¬
Fe has been after such an en¬
lates the operations of the Cor¬ merger rumors were Louisville &
trance for many years.
A recent
which
controls
the
poration from its inception to the Nashville,
Chattanooga
&
St. proposal that the road, jointly
end
of
1947, but: also presents Nashville,
with Burlington, acquire the line
Louis, and Atlantic Coast Line,
j comprehensive statistics on banks which owns a
of the old Alton from Kansas City
large block Of
and bank operations,
v
held

assets

n g

need

positive action. Characteristic^

any

for

small amount of substandard

the

per¬

tinent factorthe

policy

in later years.

has been followed is indicated by

generally con¬
sidered

might'

occur

is

entirely dominated at the present time by
and the bbvious fears of many investors and speculators
that the cold war may shortly degenerate into a shooting war.
There
is a disinclination, perhaps natural under the circumstances, to take
news

categories.

Sales by

The market is almost

foreign

re--Lvelop
.su

/

which

-losses

for

serves

<

assets held

by

and to establish; during;
of profitable operation^

parent,

different types

other

combination

increase in business loans by banks calls for improvemenl

increase

an

the

on

"

21

materials, show sizable increases the sales is less diverse.

No group

Francis

with Katz &

J.

Lynch

V

O'Brien, Inc., Carew

Tower, as Vice-President.
Mr.
Lynch was formerly an officer of

Kline, Lynch & Co., Inc.

Graham, Parsons Co. Adds
Two in Boston Office
BOSTON,

MASS.

—

Graham,

Post Office
Square, have announced the asso¬
ciation with them of Edward Mot¬
ley, Jr. and A. Vernon WoodParsons

&

worth, Jr.

Co.,

10

,

THE

(1118)

22

COMMERCIAL

&

CHRONICLE

FINANCIAL

Thursday, September 16, 1948

.

m

R.

Federal Reserve Board Raises Reserve

i

News About Banks

Requirements of Member Banks
Two per cent

rise

CONSOLIDATIONS

Increase estimated at

demand deposits.

on

NEW BRANCHES

$1,900,000,000.

expansion of

Intensifying its efforts to curtail the inflationary
bank credit, the Federal Reserve

the

banks

during
Septemb er

Reserve

during this

System

by two points

the two preceding
ones having been applied only to
ihe .New York and Chicago re¬

their

serve

increase

must

reserves

a

m

d

n

d

Sept. 16

t hie

country
banks'
re¬

against
>
de¬
posits will be

serves

demand
Thomas

McCabe

B.

in

increase

reserves

al¬

ready ordered constitutes merely

e-

posits; and by
IV2 points re¬
serves against
time deposits.
On

cities.

The

against de-

half the rise which

missible

sional

by

the

was

made per¬

Congres¬

recent

legislation.

credit."

banks

The

20%.
cities

of the

York

New

reserve

and

Chicago

raised from 24%

to 26%.

of

will

be

The

requirements of all banks

6%

on

71/2%, which reaches

to

This

is

net

demand

Nonreserve

the

banks which are
Federal Reserve

System as follows:
Effective

September 16, 1948
September 24, 1948
September 24, 1948

banks..
banks—

14

to

16 per

From

20

to

city

From

24

22 per cent
26 per cent

From

6

to

7Va per cent

September 16,

From

6

to

7 V*

September 24, 1943

reserve

banks

to

cent

time deposits
Nonreserve
Central

city

will

city banks

be

and

reserve

to

increases

these

of

1948

reserve

banks

effect

The

'

re¬

Prom

city

city

Central
On

Banks by

members of

in

deposits

'

Reserve

step towards

straining inflationary expansion
credit, the Board of Gov¬
ernors
on
Sept.
8
increased
the amount of reserves required to
be maintained with Federal Re¬
serve

increase

third

requirements effected by

reserve
Oil

the

deposits.

the

further

a

raise the

required

re¬

cent

per

classes

of

within

banks

member

the following

limits:
'

serves

of banks in central

Mini-

reserve

cities by approximately $500 mil¬

Against net demand deposits
mum
Central reserve city banks
13

Maxi-

mum

30

lion, of banks in reserve cities by
Reserve city banks:.,10
24
Nonreserve city banks.—
approximately $700 million, and
7
*.. 18
of banks in nonreserve cities by
Against time deposits
'
v
*
;':^A11; .classes: bf
approximately $700 million.
■>,£. .7 '/a
At the recent special session of
When tfte-ihtoaise»
fective on the dates stated above,
Congress the Board of Governors
was
given temporary additional reserve requirements on time de¬
authority to increase reserve re¬ posits will be the maximum limit
quirements of member banks and under existing authority and re¬
under the provisions of Section 19
quirements on net demand de¬
Of the Federal Reserve Act as thus posits will be 2% points less than

,

<

-

recently amended the Board

reserve

has

authority to establish

requirements^

for

the

reserve

' various

all parts of

Assn., for
serving as

of Julien Col¬
&

guest speaker.

N

Collins is

Mr.

also President
of the Invest¬
Bankers

ment

Association of
Be¬

being

office,

neth Allen,

he
as

later

Vice-President

of

Inc.; and Treasurer, Miss Lillian
Birkholz, Ketcham & Nongard.
if

ij;

meeting

on

Sept. 8 appointed Ell-

C. Patterson, Assistant ViceThe Board
appointed

Robert B.

Whitney.
❖

John

the

countries which have had access to the resources of the Fund since

Bank

that

T.

*

Madden,

Emigrant
of

*

Industrial

New

Andrew

President of

York,

J.

Savings

announces

Haire,

President

of the Haire Publishing Company,

'

•

He had long been associated

the

Boston,

announced
Directors

their

proved
the

have

9

ap¬

:

a

be

to

pre¬

of Boston. It is

r

Rockland

Bank
at 30 Congress
Street, Boston and 2343 Washing¬
ton
Street,
Roxbury,
and
the

quarters

present

Atlas

and

of

National

Webster

the

Bank

at

199

Washington Street, Boston. It is
planned that H. Frederick Kagemann,

executive

of

head

the

con¬

will

man,

Chairman, and
Chair¬

become

Amory,' Honorary
of

the

Board

Equivalent

St. Louis in 1906

of

Hagemann, who
was

Directors.

was

born in

with Kauff-

Smith & Co., investment
bankers, St. Louis, 1926-29; Boat¬
man,

16,420,000

men's

National

Bank

••\

,

the

.

;;;

-v ^

»■■*...

John

'•

•••

I'V

•

W.

Hyland, who was re¬
cently elected a Vice-President of
the Pennsylvania Co. of Banking
and Trusts, of Philadelphia, has
now

assumed his

duties.

new

Hyland until recently
ant

Vice-President

Third

of

Mr.

Assist¬

was

the

Fifth-

Union Trust Co. of Cincin¬

nati, Ohio.
if

Jr., will be President and

Currency

16,420,000

of

con¬

templated that the consolidated
banking institution will occupy the
present quarters of The National

Equivalent

300,000

board

the

of

Dime

,

tional Bank

Mr.

300,000

member

Half

Savings Bank since
Comptroller of the Currency. I 1935, and President of the Orange
The
name
of
the
consolidated Sinking Fund Commission since
bank will be Rock land-Atlas Na¬
1945.;
:
r;;

U.S. Dollar

11,408,380

Vice-

President since 1932. He also was

Amt. in

'

with
Loan

its

was

institutions

sented. to the stockholders and to

Roger

May ly 194$, through Aug. 31,1948

and

the

ley

For the Fiscal Period

and

Building

Orange

Association

plan of consolidation of

a

two

Currency

U. S. Dollars-__-__.

Sept.

on

solidated bank, that Edward Mot¬

500,000,000

Essex

of

U.S. Dollar

Belgian Francs

jv'

ifice-

v

.

Amt. in,

:

if

hr

Marckwald,

Webster and Atlas National Bank

the

INTERNATIONAL MONETARY FUND

:

t-

H.'

President of the National Newark
&

that

George H. Chittenden, Walter II.
DeWitt Peterkin, Jr and

action with the Fund; and brings to eleven the number of member

Currency Sold

a

.

*

'

'

Albert

of Directors of The

National City Bank of New York

if

Page,

This marks the first time that Ethiopia has consummated any trans¬

Exchange Transactions

May 17.

'

,

-

on

r

by Camille Gutt, Managing Director of the 47-nation organization.

For the Mo. of Aug. 1948

at

Banking Co. of Newark*
Sept. 14, appointed George P.
N. J., was awarded a gold enEgbert as Assistant Vice-Presi¬
group on "The Outlook for the
dent and Riley P. Stevenson was graved wrist watch on Sept. 9 to
Investment Banking Business."
commemorate the completion of
Among other outstanding appointed Assistant Cashier.
25 years' service with the bank.
#
%
i
speakers for the ensuing year will
According to the Newark "Eve¬
As a result of a poll of the pref¬
be: Dr. Melchoir Palyi, interna¬
ning News" the presentation was
tionally known economist, whose erences of its prospective cus¬ made
by William E. Hooker, Vicesubject will be "The European tomers, the Turnpike, office, of President and Trust
Officer, at a
Loophole Economy"; and Samuel the Bayside National Bank, at
meeting of the Twenty-Five Year*
A. McMurray of Merrill Lynch, Bayside,
Queens Borough, New
Club.
*
if
if
Pierce, Fenner & Bearie, who will York City, when it is completed
ready
for
business
next
speak on "The Overall Picture of and
George
H.
Werner,
former
Livestock and Commodity Mar¬ month, will remain open Monday
Mayor of Orange, N. «L;' also
kets." The discussion groups will evenings from 6:00 to 8:00 p.m. It
banker and plumbing contractor,
continue to be an important ad¬ is located at Union Turnpike and
died on Sept. 8. He was 78 years
186th
Street,
Jamaica
Estates of
junct of the club's activities.
age. Stating that Mr. Werner
North. J. Wilson Dayton is Presi¬
The officers for this year are:
was well known, in banking and
dent of the bank. The main office
President, Miss Coiina Clow, Sec¬
building and loan circles in his
in
Bayside !is open on Friday
retary
to
Dr.
Melchoir
Palyi;
community, the "Newark News"
evenings.
Vice-President., Miss Edith
of Sept. 9 also said in part: He
*
^itwas appointed to the board of the
Jiencke, Gofen & Glossberg; Re¬
President H. Frederick Hage¬ Second National Bank
cording
Secretary, Miss
Grace
(Orange),
Zern,
Nelson L.
Buck; Corre¬ mann, Jr:, of The National Rock* in January, 1916; was elected Vicesponding Secretary, Mrs. Dorothy land Bank of Boston, Mass., and President in 1936 and had been
Petrie, Harriman, Ripley & Co., President Edward Motley of the President of the board since 1943.

Assistant Secre¬
The Board also appointed
the following Assistant Treasurers:

•

*

'

the

tary.

'OF TRANSACTIONS

*

The Board

William G. Stott,

SUMMARY

watch

.

I.B.A. Mr. Collins will address the

more

the commencement of operations March
1; 1947,

wrist

inscribed

on

Assistant Manager.

*

and

.

During the month of August the International Monetary Fund

the "Journal" presented him with
an

*

Coiina ciow

Governor
as

a
a

Aug. 31.
City Bank of New simple ceremony« on *
*
York opened its new Stuyvesant
The Windsor Trust Company of
Town Branch on Sept. 13 at 262
First Avenue opposite 15th Street. Windsor; Conn., joined the Federal
It is located on the site of Peter Reserve System on Sept. 15 bring¬
Stuyvesant's peach orchard. The ing to 338 the number of member
branch is' model-nly equipped to banks ,in .tjiq First;' Federal Re¬
offer a complete banking service, serve District. The decision to ap¬
and is National City's 67th branch ply for membership in the Fedin Greater New York. Herbert H. I eral Reserve System was taken
Thompson is Manager and Ken¬ by the bank's board of directors

Co.,

The Board of Directors of J. P.

gold $300,000 to Ethiopia, against- Ethiopian dollars, it was reported

member

a

Clearing House
number of years,
committee member.

The bank's board of directors said

ager.
The National

President.

r®.

the world, and others
requiring
banking
services.
George B. Humphrey, Jr. is Man¬

Julien H. Col¬

lins

for

care

banking needs of air travelers
arriving from and departing for

lins, President

Morgan & Co. Inc. at its regular

city banks.

1923,

Assistant

of the Providence

non-

and

reserve

less than the maximum at central
reserve

the

city banks and 4% points

the maximum at
now

■

dent. He had also been

the bank will enable it to

served

Board's order:

of bank

time deposits will be raised from

limit oq time

As

opened on Sept. 10. International
Airport Branch it is announced by

din¬

elected to this

following is the text of the

Reserve

a

meeting on Sept. 23 at Mar¬
Restaurant, 120 South La¬
Salle Street,
Chicago,

fore

Text of the Board's Order
The

requirements of reserve city banks
will be 22% instead of the present

with

season

October,
elected

was

tin's

America.

raised from

;

1948-49

years,

a

ner

v/i 11 be the

Explaining the objective of the
Reserve Board, Chairman McCabe
stated the purpose of the Board as
"restrain further .credit expansion
and not toward farcing liquidation
of
the
outstanding
volume
of

14% to 16%, and on September the

LaSalle Street Women will open
their

46

position he held until
July, 1933, when he was made
Cashier of the bank. In October,
1938, he was made a Vice Presi¬

$1,900,000,000.

calendar year,

until

he

Cashier,

All member^

i

than

more

capacities
when

CAPITALIZATIONS

Board on Sept. 8 ordered the reserve

requirements of its member banks increasd by about
.

REVISED

after

that he served in various clerical

Bankers

and

ETC.

NEW OFFICERS,

I.,

having been identified with the
city's
banking
interests.
The
Providence "Journal" reports that
he joined the staff of Phenix Na¬
tional Bank in February, 1902 and

Richard

if

L.

if

Austin,

formerly

head of the Girard National Bank
of Philadelphia, and also

Chairman
Federal

the

of

delphia, died

formerly

Board

Bank

Reserve

of

Sept. 10.

on

of

the

Phila¬

He was

89 years

of age.
It was noted in
Philadelphia
"Inquirer"
of

Ihe

Sept. 10 that Mr. Austin helped
organize the Federal Reserve Bank

1929-46,

in November, 1914, and became the
He
being ^elected Vice-President of first Chairman of its Board.
organization, in- 1938 and served continuously in that capacr*
serving in that capacity until his ity until Dec. 31, 1938, when the
resignation
in
1946.
He
was retired.
Mr.
Austin began, his
elected President of the National
banking as a clerk in the Central
Rockland Bank of Boston, Aug. 6, National
Bank; he became Cashier
1946.
of
the
Independence
National
Mr. Hagemann has also served Bank nine years later, and served
in various other capacities, viz.— in that post until 1889, when he

that

300,000

27,828,380

Currency Bought
Ethiopian Dollars—

745,341

300,000 '

745,341

300,000

Indian Rupees

53,333,333

16,120,000

Netherland Guilders

-

18,158,843

Norwegian

Kroner:

£

6,845,028

22,646,910

4,563,352

Andrew

J.

has been elected

a

Haire

Trustee of the

Bank. Mr. Haire is President and

Former

director of the Advertising Club
of New York and is also a di¬

Bankers

a
'

Note—No

gold

'

V

.

transactions

;;
were

300,000
effected

..//

•••

27,828,380

^

by the Fund during the,

period May 1 through Aug., 31,1948.

Now A

Partnership

.




F. I. du Pont Co.

to

Admit

Francis I. du Pont & Co., 1 Wall

Exchange,

will admit Henry H. Badenberger
to

partnership

on

Oct.

1. H

American

Bankers

become its President.

Member,
Association

In 1901, said the "Inquirer," he
Vice-President
of
the

became

Government

of

tee, composed of nationally known
bankers who act in an advisory

as

capacity to the Secretary of the
Treasury of the United States;
Chairman, American Bankers As¬

dent cf that

Magazine

Publishers,
the

Business

Haire

Board

of

is

also
Asso¬

Papers, Inc.

Mr.

past President of
Rotary Club of New York.

the

;\y:;

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

Investment

' Association:

rector of the National Association

Chairman of
ciated

BOISE, IDAHO — Wegener &
Daly, First National Bank Build¬
ing, is now doing business as a
partnership. Members of the firm
are Theo. H. Wegener and
Donald
F. Daly. .
v

of

Governor

si:

sociation

if

facilities

have

been

provided at the New York Inter¬
national,
Airport,. Long Island,
N. Y., by a branch of The National
City Bank of New York which

Borrowing Commit¬

National

Committee

Treasury Savings Bonds, etc.
■■■■■•'

on

'

Girard National Bank.

was chosen Presi¬
bank, which later was
meiged with the Philadelphia Na¬
tional Bank.
He resigned Oct. 6

1914, when he

of the

ciated
.v>

He served

Vice-President until March 17,

serve

same

year

with the

7

Bank.

to become asso¬
Federal Re¬

new

•

'

as

tf

Frederick W. York, has retired
Vice-President of the Plienix

National > Bank

of

Providence,

The

of

death

Henry

B.

*

•

*

occurred

—

on

Sept. 7

Reinhardt,

former

(1119)
Vice-President of the old Colonial
Trust

Company

The

Philadelphia,

of

was

connected with

the

sets

Administration

in

The

that

city.

Philadelphia

"Inquirer" of
Sept. 8 stated that Mr. Reinhardt
affiliated

was

Trust

its

until

The

Controlling interest in the Pasa¬

An¬

dena-First National

sources

the elec¬

announces

George

Stone

O.

to

in

the

O.

Garrett,

director

of

President

the

increase

of the

George
been
the

Southern Commercial

C.

Bringolf, who - has
associated continuously with

National

Bank

of

Commerce

tional Bank of Chambersburg, Pa.,

&

raising it from $350,000 to $400,000
is reported in the Sept. 7 weekly

Saving Bank in East Pasadena,
now
in process of organization.

of Seattle, Wash., since 1906, re¬
tired on Aug. 31.
His 42 years of
service form one of the longest

The Los Angeles "Times" of Sept.

banking

capital stock of the Na¬

common

new

from

10,

which

bulletin of the Office of the Comp¬
troller of the Currency.
The in¬

taken, in part also said:

creased

L

capital, which results from
the sale of new stock, became ef¬
fective Aug. 27.
,

a-.

(f

.'

*

"Edward

stock

in

the

Commerce

Union

Bank

of

Cleveland V have

of

since

*

Olmstead,

been

1936.

dinner

Vice-

in Seattle history.

careers

had

He

is

Assistant

The

for

Mr.

Cashier

tendered

bank

Bringolf

27

officers presented him with

"Other

the

directors

new

bank.

the

Pasa¬

of

dena-First National

at

of

resigning

the Rainier Club

binoculars.

in. the bank

Willis M. Eason, a Pasadena
banker for the past 50 years; V. R.
G. Wilbur and Mrs. E. F. Nolting.

were

when

Earlier, at

a

a

Aug.

on

Vice-President of

.

of

L.

foregoing

President, also resigned to become

;

Stating that it was learned on
Sept. 2 that two substantial blocks

the

The government bond market has taken the
increase in

a

the

set

party

.

,

program of the powers that be.
their heavier holdings of the

prices of the

ments.

P.

firm, and its President,

Gale.

The

number

of

shares acquired was not divulged
but it included part of the hold¬
ings Of the M. A. Hanna Co. and
all of the holdings of Vernon F.

Taylor, capitalist of San Antonio,
'Texas.
•v

"It is understood that this will
'make Mr. Gale the largest indi¬
vidual
holder
of
Union
Bank

stock,

excepting corporate inter¬
distinction previously
held by Mr. Taylor. - He is
This

ests.
was

director

a

of

ways

Corp.

stock

the

Pan

American

Air¬

Just how much of its
Hanna

sold

company

fwas not stated, but according to
the company's jlast annual report
; it held

23,950 shares then worth
$1,244,350. R. L. Ireland, Chair¬
of

man

of

the Executive

Committee

the

Pittsburgh Consolidation
Co., in which the Hanna

Coal

Company has the largest, interest,
is

director

a

Union

of

of

Bank
'

'"

*

y

^'Journal of Commerce"

Chicago was in¬
$90,000,000 from $75,000,000 on Sept. 10 by a transfer
of
$15,000,000
from
undivided
profits. Undivided profits at June
creased

Goods

V2

Association,
1%

of

to

to

SO, date of last published state¬
ment, was $30,547,998. The legal
lending limit 6f bank, says the
paper from which we quote,, was
■increased from $13,500,000

in

the

This

net

sales is reflected

in

the

report

cated

lower
to

trade-wide

a

profit

John

the

for

half

first

current year over

Kavanagh,

of

the

toward

1

t

the

of

according I

margins

J.

Manager
Congress,

trend

current

sentatively

General j

the

of

same

was

year

11%

the

period
2.0
av-

reporting
in
60

first

showed

higher

comparable

? "

i,

The first

reflected
m

of

>

expenses up

months of the year

]ower

a

,for

have

clined

from

Markdowns

7.7%

to

6-8%

contributed principally to
in

was

odier

absorbed

lm-

by the

penses

reached

to

31 .5%

with

of

doing

business

ratio to sales of

a

a

*

*

Charles E. Thwaite, Jr., VicePresident

of

the

Trust

Company

of Georgia, in Atlanta, was elect¬

ed

of

President

the

Fourth

Na¬

tional Bank of Columbus, Ga., on

Sept.

7,

it

is

learned

from

the

Atlanta "Constitution" of Sept. 8.
Mr. Thwaite is also Vice-Presi¬
dent

of

the

Trust

Georgia

Associates,

Control

of

the

Company
which

Fourth

of

of

"Constitution," from which

Columbus, it

time, the ^direc¬

same

17.2%

to

sales

17.7%.

to

volume

sales

of

a

million

stores in

and

level.

man

a

of the board of directors. For

number of years past

has

served

as

Mr. Swift

Chairman' of

the

"Mr.

-Dunlap,

Thwaite

Jr.,

who

succeeds

became

R.

gross

C.

Presi¬

sale

rose

of

the

of Columbus in 1944.

resigned

to

become

with his family

Mr. Dunlap

associated

business, the Dun¬

lap Chevrolet Co. of Macon.




24 cents to average

prior interim

rise

was

Stores

the

lower volume

/

to, gross

sales

reached

a

r.

.....

new

.

upon

are

.

.

both lenders and borrowers.

.

.

being let out by the larger banks In

order to meet increased reserve requirements, with Treasury bills

the most important issue in adjusting for the new regulations... .
The "out of. town" banks are sellers of the 2s particularly the

longer maturities
institutions

are

along with the

light

2J4s and the
short-term maturities.

on

2^s since these
.

.

Liquidation

.

f in the longer eligibles has not been too sizable yet, although fur¬
ther selling is expected as the pressure on higher reserves be¬
comes more pronounced.
from correspondent banks

...

in

Funds

also being withdrawn

are

the large money centers.

;

.

fiscal

That the government bond market is definitely on the defensive
for the time being is beyond

postwar high, but

wide have sagged to the 1935 exr

perience when net profits to sales

averaged 3%.

He expressed

view that the time is
for

.

sizable

one

.

000,000 figure forecast by the monetary authorities.

.r

In

.

.

some

.

.

nize

that

distribution

sales

must
are

to

also
ex¬

pand and the productive facilities
of the
on

a

#

.

.

v

.

oi reserve requirements and the elimination of support prices for

Treasury obligations.

.

.

%

.

the TAX PROTECTION

approaching

producers of goods to recog¬

country effectively utilized

high level.

Despite prevailing uncertainty in the government bond market,
partially-exempts, particularly the 2%% due 1960/65, are still
being taken on by the larger commercial banks.
Some of the
tax-protected bonds appeared in the market following the announce¬
ment that reserves would be increased, and quotations moved down,
but this did not hinder transactions being made at prices that were
better than those prevailing in the market.
Curtailed earnings
that will result from larger reserves make tax protection more impor¬
tant to many of the deposit banks,
- ... the

.

.

.

.

.

.

-

.

The study released to the trade

by" the

Controllers'

Congress

and

statistical

medians

groups of stores.

ing

stores

for

33

by eight sales volume
had

The 219 report¬

an

aggregate

New York Stock

With Dreyfus & Co.

—

NRDGA, gives detailed operating

Dreyfus
New

York

New

York

& Co., 50 Broadway,
City, members of the
Stock

Exchange, an¬
that Herbert A. Levitan is

nounce

associated with the firm in its

now

net Hotel

Madison

office

as

a

Cus¬

sales of $1,191,160,000 for the six tomer's Broker.

With J. W. Gould Co.
Morton

an

B.

Gold is engaging in

investment

offices

average of

New Yoric

at

307

City.

The New York Stock Exchange
has announced the

following firm

changes:
Stanton

Aug. 31.

&

Co.

dissolved

John
with

Albert

First

Traub,

Boston

formerly

Corp., is

now

son,

Hazlett,

retired

date

the

Allan

on

Burt

David

Aug. 31,

interest

Allan

in

of

the

Jr.,

general

associated

partner

120

and limited partner on

Broadway, New York City.

Burt,

became

D.

ceased.

partment of J. W. Gould & Co.,

de¬

which

late

firm

from

investment

on

the

Street,

the

limited

II,

44th

in

of

Burt & Wat¬

business
East

as

.

partner in Hazlett,

Morton Gold Opens
.

Exchange
Weekly Firm Changes

Howard

months' period reviewed.

remained lower than the prewar

approximately 8.9%,

question, since there is only

the supply the credit needs of customers will be well in excess*of $2,000,-

:

7.9% and thus

'

ON TIIE DEFENSIVE '

.

Returns in percent

were

on

excess reserves.

*

commenting 'on

due to the advance in the

level of prices.

requirements, but

the bulk of the

...»

average

period; Presumably; much of this
...v..

dent of the Fourth National Bank

The

surveyed.

»

Others contend that selling of government securities
specialty stores, Mr. by the deposit banks will fall short of $1,500,000,000 because the
Kavanagh said that store manage- "out of town" banks which have the excess reserves will allow them
ments were unwilling to meet the to run down and they will sell only enough securities to meet needed
sharply increased operating ex- reserves.
J
'
penses
of
Raising of reserve requirements, according to most informed
payroll
and
service
money market followers, means that "pegged" prices of Treasury
through higher markon percent¬
obligations will not be changed materially because it would be
ages,
with
consequent
higher
too much of a shock for the money markets to absorb at one
prices to the consumer. Merchants,
he
time,
Chaotic conditions would probably result if "pegs'*
said, are showing /-business
were lowered, along
statesmanship
in
with the increase in reserve requirements.
absorbing the
Also business might be adversely affected by an unstable gov¬
sharplv increased operating ex¬
ernment market that might result from a simultaneous upping
?
penses out of profits which trade-

functions

$4.53 compared with $4.29 at the
end

^bank's executive committee,
i

Transac¬

1%, to make this

gain the median experience of the
stores

own

.

i?,-"

Further'

slight improvement in the phys¬

ical volume of business.

Chair¬

for

the typical store, accompanied by

tions increased

George P. Swift, Presi¬
dent of the Muscogee Manufac¬

Gain

Transactions

Dollar sales gains were 5%

a

^

million, reported 19%

be profitable if

Sales

ele'cted

as

and

over,

tors of the Fourth National Bank

turing Co. of Columbus,

News¬

costs advanced from 2.3%
to 2.5%. Trade-wide, the operat¬
ing expense per transaction or
salescheck
increased from $1.33
to $1.45 for stores with an annual
paper

noted

was

'we also quote:

the

an

owns

in the
; "At

in

principally pro¬
duced the lower profits,
Total
store payroll typically rose from

National

Bank

j

categories

upward trend and

,

#

all

reserve

marked influence

very

.

surplus.

capital and

.

r

1

y

-

j partment and

Nev-

increased

cost

in

institutions

de-;ftrs^. haif-year operations in de¬ 000,000.-%

and

the

gross margin.

than

more

.

buyer in the market, namely, "Federal."
How many securities
over $20 milthe Central Banks will have to absorb is purely guesswork at this
: lion had an average monthly inver;tory increase of only 4% whiie time, although opinions are rather widely divided over the $1,500,-

compared; with;

1947.

.

with sales volume

| gr0Up, 2-5
the typical gross margin which;
jncrease
m

,

Short-term securities

the

inventory

only slight improvement

ayfm^ed 35.7%

yv

forecasting the demise

are

.

stores seemed to have maintained

j
j

Lower—Exnenses Uw

35.2%

;;!■
y

credit that has been going to borrowers in these localities.
Posi¬
tive action by the authorities coupled with
psychological forces could

the

measure

increase

same

b.L.S. Index of Department Store
Inventory Prices reDortedlv ad-

profits;

period
.

Lower

six

^

J

.

are the hardest hit by
the other hand these
%
Although
the loan trend has been strong in. many of the areas served
by these
institutions, especially real estate loans, there seems to be no doubt
that the. increase in reserve requirements will tend to curtail the

the

lower! vanced oniy 8>6% for the period,
of 1948;
Generally, the larger department

half

the previous year,
Markdowns

;

higher

had

group

the

the

over

million

much

.

.

„

repre-

higher than

inventory

same

reveals that 131 stores ot

more

the

How

.

1%% is the highest that is being predicted by most I'

of the inflation bubble.

out

annual sales volume of $1

v.

.

.

of those money market followers that

Controllers

pointed

*

restrict¬

of

program

will

cate rate to

j six m0nths ending July 31, 1947.
that. jt was observed that this inventhe numerical count of the departtory growth was not due entirely
men! and specialty sto-res with an !
to 'the* price inflation, since the
who

the

go will depend upon future business conditions, and
trend of loans and commodity prices. *
If the inflation
spiral should be ending, as some believe, then there are very good
chances that the worst has probably been seen as far as ad vaneing interest rates are concerned.
An upping of the certifi-

y

During the
completed
by
the
Controllers' period, the average monthly inCongress of the NRDGA, indi- j
ventory for the first six months

since total operating expenses ad¬
vanced at a faster rate. Such ex¬

combined

Accordingly

.

The so-called "out of town" member banks

ot- 1947, when turnover was
with actual net sales: turns against 1.9 turns as an
$1,185,450,000.
The
survey, erage at July
31, 1948.

Of

capital account, it is noted, is $60,000,000 and banking regulations
permit loans to one borrower up
of

.

.

*

y

.

.

the

v

Inventory Situation

the country

tal and surplus of $150,000,000. Its

10%

banks.

>

HARD HIT

turns

operations of 198 department
and
specialty stores throughout;

to $15,- provement

combined capi¬

a

money

ing the money markets is expected to result in slightly firmer

of
The analysis indicated a slack¬
profit ratio ening off in the number of stock

1000,000 by the transfer which has ertheless, the marginal betterment j
given the bank

member

rates

drop

of

while

Trust Co. of

■&

...

requirements for member b&nks oftthe-Fed^

reserve

interest rates in the not distant future.

record high in the dollar sales volume, department
store net profits, after estimated taxes, at the
half-way inark of the current fiscal year declined to 2.9% of net
sales, compared to 3.4% for the identical firms for the first six

of

Sept

the

a

months of 1947 according to a re-^
lease of the National Retail Dry

require¬

markets, despite the
policy of the Central Banks of buying Treasury obligations that
are offered them by the
deposit banks.
Assets that will be
tied up by the raising of reserve requirements cannot be used
by

store and specialty

profits

11 that the surplus account of the
Continental Illinois National Bank

Larger

jeral Reserve System will tighten the

survey

Despite

new

.

.

.

.

Chicago

It is learned from the

positions to the

reserve

except the partially-exempt obligations.

■

.

or

Commerce."

adjust their

The government market is now almost a
completely
managed affair with the authorities protecting practically all issues

,

of National Retail Dry Goods Association shows,
despite 5% gain in business volume, increased expenses have
4 caused decline 3n profits from 3.4% to 2.9% of: net sales.
Turnover of inventory also slower.

the stock
tare the Perry-Payne Co., pioneer

.

.

sizable as the banks

Reports Retail Profits Receding
Half-year

.

.

as

.

also reported in part:
"Interests acquiring

Ben

distant

maturities are maintained.
The longs
liquid as bills in the presently protected market, y y
Activity has increased, with indications that volume will continue
more

will be about

lobby after hours, his

with-appropriate gifts.

The "out of town" banks, with

y

.

longer eligibles, will have the same op¬
portunity as the larger banks with their ample positions in shortterms, to liquidate issues in order to meet larger reserves, as long as

slpiijiarly presented him

associates

reserve

requirements pretty much in stride because the authorities have
pro¬
tected prices, as securities are
being let out by the commercial banks.
Stable prices and higher reserve requirements seem to be the

nancial

real estate

Governments

on

By JOHN T. CHIPPENDALE, JR.

changed

hands recently, the Fi¬
Editor, Guy T. Rockwell,
of the Cleveland '.'Plain Dealer,"
in the Sept. 3 issue of that paper

Reporter

the

Pasadena-

National Bank of Pasadena,
Pennsylvania Co.
■.-.'-i"V-'-i Cal., announced his resignation on
Sept. 9 to accept the Presidency
of $50,000 in the

'

of

25-year-old insti¬
tution as of June 30, last, amount¬
ed to $12,310,000.

;

"A

Arthur

Our

dent of* the

First

years ago with
An

of

San

of

Bank

director, effective Oct. 1.

of

and

several

merger

directors

of

was acquired
August by S. F. Mang, Presi¬
Valley National Bank
of Alhambra, and associates. Re¬

tion

Colonial

the

with

board

National

office of First Vice-President and

As¬

War

First

tonio, Texas,

and who £tt the time of his death

23

both

a

general

Sept. 1.

t

24

COMMERCIAL

THE

(1120)

Seasonal Stock Price Trends Discussed
Trust

Cleveland

dustrial

(Continued from first page)

years.

the
The Sept. 15 issue of the "Business Bulletin," published by the principles on which a new Ger¬
Cleveland Trust Company of Cleveland, O., contains an analysis of many was 10 be fabricated. Yet
"In 44 of the

stock

during the last
Such

stock

six

days of Decem¬
sup¬

of

joniay

aown

them

separately in

was

a

to

apply them

separate zone.
a communist, or

Russia wanted

upwart.^

moved

laying

each

According to the "Bulletin"—

prices.

preponderance

a

were

past 51 years, the Dow-Jones average of industrial

has

prices

ber.

in

tendencies

seasonal

As shown In this section, the

dustrial

average

at

in¬

least

be

semi-communist

a

whose

many,

fre¬

most

rose

used

could not

resources

for

Ger¬

anti-Russian

age.
,
//;/.
"Seasonal
swings
been

of

market

have

interest

some

it is known that

period of

a

over

stock

example,

For

observers.

long

to

one

December, July,

,-r

^

and

that

order

months
the

was

only 22

the

was

(1914)

social

closed.

September
month, having

wanted

an

Labor government began to throw
its weight about, preferred one

advances.
The
in which the in¬

of

years

The

was.

powers

orderly peace-loving German
democracy; the British, after the

rise.

poorest

structure

Anglo-Saxon

and January in
the next best

were

for

year

with

nationalized

key industries;

the industrial stock number of years
and the United States favored one.
advanced
be¬ which was
average has been more apt to rise dustrial z-average
ready to tread the
than to decline during the summer comes progressively larger from American
way. Four high ranking
months.
But in general it can May through August, and again
generals, one for each power,
hardly be said that the seasonal from October through Decemberi were the instruments chosen to
"In the lower section of the
factor has much practical signifi¬
perform this miracle of social/en¬
cance in the stock market.
There diagram, all months throughout gineering.
are too
the 51 years have been divided
The United States had accepted
many other things which
affect stock price movements, and into five-day periods except that the legend by which France con¬
the sixth period varies according soled herself for her humiliating
changes in direction constantly
occur for
reasons
entirely unre¬ to the number of days in the defeat, that Germany's gigantic
lated to any long-time seasonal month. The scale covers the 612 war potential, not French political
influence. Again, seasonal trends months from 1897 through 1947. faults and strategic failures had
derived from the average price of The industrial average rose most caused her ignoble collapse. In
a
limited number of stocks may frequently during the first five reality, Germany's war potential,
not apply at all to many individ¬ days
of the month,
with 381 though strong on the processing
ual stocks.
months of advances; and least fre¬ side, had been extremely brittle
many

years

an
analysis of
the Dow-Jones industrial average
I

"Nevertheless,

the

where

period
ended with the 25th of the month,
quently

in

five-day

raw

materials

were

some

DOW-JONES

who

INDUSTRIAL STOCK AVERAGE 1897-1947

favor

mechanical

devices,
when they search for spir¬

even

tries

was

1946.

It

by

of reparations, 'and
would enable them to rapidly re¬
way

gration

ready on March 26th*
accepted the great mi-

as

by basing its proposals

elaborate plan for the de¬
of war plants and the

lation

of

it

removal

German

of

in¬

surplus

up.

ternal

assistance; her standard of

living

was

of the

average

Russia

to be kept below that

and

excepted.

of Europe—Soviet

the

United Kingdom
The gates to the plan¬

ners'

can

social

30

.

wished

masters

them

to

follow,

limit them to the appro¬
intake of calories.
This

and to

priate

Iii August, 1947, the plan had to
Output for the west- /

be revised.

ernzones was raised to about 75%
of the 1?36 production.
The rer
they had been wicked; Se¬
vision was necessary^ not because
curity/ profit; punishment — the
the
fundamental
factors : hadplan; seemed-to secure-all thesfc
highly desirable objectives.
By changed, but because they had hot
February, 1948, all was to be over been., given the weight they de-

—except

few

a

from Russia.

Germany

new

laid.,

return

payments

The structure of the

be

to

was

firmly

;v„v

II

7

•

The plan succeeded in one re¬
spect: by the middle of 1947, Ger¬
many

head
pean

received 1,750 calories the
against 2,430 for the Euro¬
average.
But external as¬

sistance by the United States and
Great
Britain
was
needed
to

maintain this starvation standard.

Instead, of receiving payments, the

Anglo-Saxon taxpayers had had
to keep their debtors on the dole.
Russian

planning being "struc¬

ha'd

tural"

Soviets

been

zone.

successful.

rapidly

are

semi-communist

The

establishing

states

in

their

They have cut up the large

estates—most

large estates were
Eastern zones^ftnd have
•

manded.

Mj.

.

the

Yet

-

was to go

to draw

into reverse,' A
had been unable

which
enough food for its dense

012

10 TH

ISTM

ing.
tion

20TM

was

to

H. S. Stewart Forms
*

been

not

Daniel Hannafin, of Joseph McManus & Go., President of the
,

an

industrial revolu¬

Own Investment Firm

British

disappointed;

zone,

the

in

the

birth-rate

has

fallen

nearly 20% from 19 per
El PASO/. TEX. — Harold S.
Exchange Floor
mille, 1936/ to 15.8 per mille; and"
Clerks Association, announced to¬ Stewart announces the formation the death rate
has risen 10% from
of Harold S. Stewart &
Company, 1L1
day that the association plans to
per mille to 12.2 per mille;
investment
bankers
specializing infant
journey to Overpeck Park, Ridgemortality has risen by 50%.
in Texas municipals and
corpora¬
fieM Park, N. J., - on
The Anglo-Saxon powers
Saturday,
may
tion securities, with offices in the
Sept. 25, 1948, for a clam bake and
have really believed that restric¬
Bassett Tower. Mr. Stewart was
a day of sports.
tion of war potentional was the
Organized in January of this formerly Vice-President and Man¬ best guarantee for peace.
Plan¬
year, the association is composed ager of the municipal department ners
usually draw faulty conclu/
of telephone order clerks repre¬ for Dittmar & Company in Sari
sions
from. misinterpreted past
senting Curb Exchange member Antonio.
facts and, projecting them into the
New

York

Curb

,

,

firms

the

on

clerks

in

authorized
the

trading

member

floor

firm

relieve

to

and

offices

clerks

exchange floor. The

on

group has

New

Gale,

Chairman

•

of

of

&

Co.,

arrangements,

an¬

nounced that the

day's sports
scheduled
the

Clare, of
Curb

highlight of the

program

softball

clerks/

Hirsch

Goodbody

by
&

be

a

between

game

headed

Exchange

would

James

Co.,

brokers,




&

which

also

ing

holds

and

York

Curb

prepared

H.

O.

M.

Peet

Mo., died

on

Fible,

tion

in

partner

&

Co., Kansas
Sept. 7.
,,

t

,

in

mated

City,
,

chief rivals. In¬

starvation.

in

„,/J7

faith in their ability of forecast7
ing and controlling the future. At ] '
a
time when the Marshall plan ZJ

being evolved, they continued
impose ceilings instead of tar-

was

to

]
•

They still fought plenty, not
scavcity\
Their
wranglings
gets.

whether
7 % or
it

was

,

steel

*

^

ceiling should bO S

11 million tpns, or; whether
better to nationalize or not

'

nationalize hesivy industries look *
a little unreal/ The actual output
/
lion tons; the Allies frad taken the
utmost trouble to break up Ger¬
industries in

man

as

inde-

many

/

pendent units as possible; they /;
would have to
be re-united/'
if nationalization was not to be a /
farce.

mere
were

But

undaunted.

that

the

The

planners

Germany's

assumption, Z:

future

foreign-j

-

trjade would balanc# ardund

5 mil-

both sides

on

s

(2,500

2,800: fol/ Bizonia) showed a '
•goVfiimmeht; ^the/rest knowledge ' of the future worldaqarkets" ahdZ Wortd /prices which' ]
~

viets have used the zone's output.

for^Russiari rpurposesy partly
of reparation,' partly by
trade/ They have thus greatly
aggravated the situation in the

way

is5 truly enviable.

11:z|:,.r7-:i

Z"

<"

''

7!

m y,

The: Nazis had' bequeathed one
pioblefri tor the AlUes which needed immediate intervention: Infla•

>

-

Western: zones,

The

conference which had

same

already "made its" success impos¬
sible. Its acceptance pf the OderNeisse

lihe

built
,

tion

reverse

was

to

be

ed their

own military notes to the*»
previous German circulation/ the '

Russians
have

alone

are

supposed

to

printed 12 billion notes ori

ritory. It dumped about 6 ^ mil¬ States, who did not insist on theThe Allies
lion refugees from Eastern Ger¬ limitation of issues.
balanced
German
budget's — by
many and 31/2
million deportees
from Poland, Czeehslovakia and raising taxation and by looping;
off such obligations as paying In-/1
Tluhgry 'crh'•••ft/'whose "humane"
terest- on the Reich's debt add
eixpulsion
had
been
expressly
permitted at Potsdam; By the military pensions, or taking up/.
middle * of 1947, Rump Germany matiif ed treasury bilisl They iriah*" v
had to feed 7 million more people aged to keep the price index fair-.
than in 1939.
The sudden incor¬ ly stable; it only rose slowly^to
150 (1936=100).
It was qll quite
poration of 10 million1 more or
Jess .destitute-• people, within - a- unreal. Money not only had lost;.
its value, it had forfeited its funo-y
dense
population of 55 million,
would have strained the frame of tion; it only bought goods in con/
junction with coupons, provided
a healthy economy almost to the
economy

transplantation and de-industrialization resulted in

a

terrible shock

rationed

goods

\yere

available.

-

The/black market attd barter, ac- " '
counted for. more than 50%;pf hU /
transactions.
*

The
which
and

and

one
was

on

to be

only: industry
developed freely,

which the

of

success

.

the

plan. depended,. agriculture, was
Restrictions' of output

already greatly weakened
economy.: There is no evidence,
that the plan drawn up in obe¬

held back.

dience

-inflation

on

an

tions,

to

the

realized

destructive

leasing./

Postdam

the

instruc¬

magnitude

forces

it

was

of
re¬

/

*

consu-

by the destruction of plants
exclusively for war producand by the removal of in¬

iheiih^top^iiriee policy; They; add^>

^acreS-t^5%^) ° of the ' Reich's/ ter¬ pfessesgiven>them by;|he<Uhited5

the

Z; The German industrial revolu¬

William M. Fible Dead
William

of their

one

stead of drawing reparations
by
stimulating Germany's output they
were going to get them
by trans¬
ferring her means of production.
By planning against plenty, they

membership on
Exchange
will be Mr. Verace, Charles L
Lehmann, and Benjamin Nichols.
New

them

have been returnedkto -fdummy"
German governments.
The JSor

they

sought to avoid it, by. hamstring¬

ship of the late Albert Wertheim
Sept. 23. Partners in the firm,
the

of

..mass

on

headed

by Charles Bocklet, of Bernhard
& Bocklet.

York

the ^Soviet

126

expected
the
same
after nearly six years of war-was
"overproduction" w h i c jh . has. not
healthy. The reduction of in¬
caused the great depression, and
dustry plan would have distorted
to which the first reparation set¬
it violently even if it had been
tlement had -contributed/ - They
sound.
The combination of

Verace, partner of Leh¬
Verace, 1: Wall Street,
York City, will acquire New
Stock
Exchange member¬

cial and mutual benefits.

Irwin

time

Victor
mann

vested

future, call them forecasts; This breaking point. German

Lehmann & Verace to Be
N. Y. S. E. Member Firm

been sponsoring a program of so¬

have

reverse.

growth

30 TH

,

It
ih

soil, not¬

own

As the- rapid
of Germany's population
had been the( result of industrial¬
ization, de-industrialization might
result
in
depopulation.
So .farFrench hopes in this respect have

20TH

Hold Outing Sept. 25

-

/

which have had tion. They had issued about J55 |
withstanding a highly developed tbZlmportZfrcmii/oVersea thgaihtef
agriculture, %as to turn millions ddllarsy zxvhat they Z'no: longer suppressed ttheir impact Oh prices: ;
of
highly skilled workers into could get from their own' coUntry- by- a rigid imposition of ceilings farmers and jeed them by farm¬ metr f<marks;//
<and-i^ioning: The ^Allies fetalned/1
c■ it
population from its

PERIODS:-NUMBER OF MONTHS OF ADVANCES

Curb Floor Clerks

/

planners had not lost

liard marks

country

400

'

to

densely populated country, Ger-

300

/

would make it quite clear to them

that

and

many

•

•/

paradise wefe swung yride
7
Here at last was a chance
making 66 million people fol-; British-American zone was
34%/ low
such
occupations as their Famine was stalking the land/, Z 1

open.

They have nationalized 200 plants

dustrialization was looked upon as
the antidote to starvation in
every

840

account.;

of

for

settled them with landless people;
this has greatly reduced output.

to industrialize itself and when in¬

[20

a

reached, not to'say surprassed; the
1946 output of the -Western zones
averaged 31 to 35 % * in the first
half of 1947; the average in the

in - the

Morgenthau, Jr., to foist
"pastoralization plan" on the
Allies.
At a time when every
backward nation /was tryingi; hard

BY 5-DAY

list

plants to ;
be withdrawn from the Germaii /"
industrial
potential,Cither by J
physical destruction or by re- ;
moval.
On an average
German
industrial production was to be /■>,
reduced by 65% of its 1936 ca'
pacity.
This objective Was easily -

experimentalism has allowed Mr.

<40

on a popu¬

people, but

implications into

contained

It

Henry

20

million

66.5

his

10

•

hardly have taken its full

An

struction

itual values. President Roosevelt's

BY MONTHS'- NUMBER OF YEARS
OF ADVANCES

,

fact J

accomplished

an

their industrial activities.

sume

con¬

cerned; but for the import of iron
ores — partly from France -»• her
interesting vari¬ with 297 months ofv advances.
could
hardly'
ations both as between different These results are by no means heavy * industries
have kept going for more than
months and as to five-day periods startling. There is a curious per¬
four months
a
year.
She * had
within months. The diagram pre¬ sistence, however, in the relatively
doubled her steel output of about
sents these two aspects of
sea¬ favorable^ showing
of the first 19
million tons only after she had
sonal tendencies.
five-day period. If we reduce ail overrun all
her
neighbors and
"In the upper section the length 51 years to one composite year,
had incorporated their
plants.
of the bars represents, for each we find that in ten months of
There are only two policies for
month, the total number of years that year the first five-day period
preventing a new war: > Making
in which the industrial average
ranked either first or second as Germany
unwilling to go to war,
(closing price) was higher at the to the number of times the in¬ or
making her unable to do so.
end of the month than at the be¬
The French preferred the latter
dustrial average advanced. In the
ginning. The scale covers the 51
alternatives;- its, mechanical ma¬
years from 1897 to 1947 inclusive. other two months it ranked third."
tureappealed to the United States,
does reveal

for Z

Allies

two

when the stock market

plan

the contraction of. German indus-

Enough non-war productive
capacity was to be left to satisfy
Germany's peaceful needs and to
make
her
independent of ex¬

movement in the industrial aver¬

detailed

definite

The

could

dustrial capacity was to be drawn

rally, which is probably the near¬
est approach to a perfect seasonal

declines,

wnich

equipment

converted to war purposes. It
was
to
be
distributed
to the
be

pur¬

quently in August, with a record
of 37 years of advances, 13 years poses. France wanted a weak Ger¬
many; she did not care what its
of

ports the tradition of the yearend

Thursday, September 16, 1948

-

Currency Reform in Germany—Can Planners Plan?

Company "Business Bulletin" gives results of

analysis of Dow-Jones industrial averages for period of 51

& FINANCIAL* CHRONICLE

1 War
oners

of

losses,
war

registration

not
and

account

returned pris¬
persons
who avoid
for the differences
yet

machinery hand¬
badly enough."
Butworse.
When farm*/

of fertilizers and

icapped
ers

■

it
was

have to sell

currency

against aZvalueless

they hold back, and if
threatened with requisi¬

they are
tions, they

stop

growing

what they need. ; ■
-;
Within this inflation
.

.

economy-theZAllies4^

beyond
-

;

y/

infested/

THE

Volume 168". Number 4734

COMMERCIAL &

FINANCIAL

CHRONICLE

29

(1121)
■

destructive

They . in¬
tension, not only by
pumping more money into it, but
by holding up the supply of good's
by dismantling, denazification-de¬
tentions and production ceilings.
They
concentrated large labor
forces on unproductive work, such
as
blowing up and breaking up
plants, and consumed directly or
indirectly a large share of the
social product which
was
very
cheap in Allied currencies. The
need
for
currency
reform was
recognized very soon. It was held
up
mainly because joint action
planning.

the

creased

maintenance of wages is to stimu¬
late

and,

attract

high cost of

.

workers. /

credit—the

The

million marks) could it have been
done

immediately.

To

transport

up-to-date German plant read"
prepared to go to 8%—is to dis¬ ily to France, to let France start
(Corttniyed from page 13)
solve hoards and to eliminate all production quickly, would have
party may be active, then my owil ^ Quite naturally, we do not in'
unsound enterprises.
Price ceil¬ been not only just but reasonable.
States
think
that
people can only judge itself ter¬ the 1 United
ings are being scrapped, and the To let the stuff lie about idle' and
ribly threatened. Then all the everything is perfect in the So¬
price mechanism is to start the rust,
as
the costs of erecting world will know only
war, not viet Union, either.
We would net
flow of goods, which the planners buildings to receive it are pro¬
peace, in their hearts.
Then this for one moment toiv.rate the stul¬
have held up.
hibitive, and as no skilled labor conference might just, as ' well tifying control of
,,
opinion and ol
is available for running the re¬
The
never
have been held. 1 That is the means of expression that We?*
experimentbeing well
moved plant, may be a just pun¬
thought out, did not, fail in its
why I say that Mr. Fadeyev spoke know to be the basis of political
early, purely mechanical stages. ishment, but in * these days ol most irresponsibly.
power in the USSR.
We want no
Its final success will depend on scarcity it is not intelligent eco¬
secret
police knocking
at out¬
The plain truth is that we are
nomics. It may be sometimes good
what one might call the "suction
doors.
We want no labor camps
business to pull out a particular far from perfect On either side.
for political prisoners.
power of money." A stable cur¬
We can¬
Lest I seem ungracious, and even
with Russia was desired.
It was rency sucks goods into the market. machine and transport it to one's
not imagine how science and re¬
as unrealistic as Mr. Fadeyev, let
at last undertaken, when condi¬ It starts on stocks and extends its own plant, thereby handicapping
search and art can produce trutk
me list what a great many of my
a former rival, but
carpetbagging
tions were no longer bearable.
suction power through the price
1
and beauty if, as ih the Soviet
countrymen freely admit as our
is not reconstruction.
mechanism to production, to raw
faults.
We have not yet overcome Union, they are compressed witlvIV
The resumption of dismantling
materials and to labor.. In a com¬
in the confines of any one ide¬
a
deeply
ingrained
prejudice
The reform sought to speed up
ology.
In a free society the pre¬
pletely elastic system suction is causing great concern amongst
agaihst religious and racial differ¬
production by the restoration 01 varies in strength all the time and the German working class; it is
vailing
ideology
will naturally
ences, even though such prejudice
the price mecnanism; it looked for shifts
affect the sciences, research and
continually from one field undoing part of the good which has
disappeared from our national
relative plenty irom competition, to another.
the currency reform as the first
the arts, but there will be free
German economy un¬
statutes.? We still have to estab¬
not from control.
*
*
j
rebels also to correct and to
fortunately has been clogged. effective step5 towards reconstruc¬ lish
im~v
perfect * equality
in
civil
The unrest has al¬
Price ceilings continue in essential tion has done.
The newly;' established
prove.
We Americans think fur¬
"Bank
rights as we practice them.
We
ther
ready led to the resignation of a
that,
since temptations to >
especially in foodstuffs.
of the German Lander" (coun¬ goods,
have made good progress in recent
South German administration in
imperialism go historically with;
try's)
is
providing
new
notes Capital equipment is defective. It
years and we shall finish the job,
wealth
and
could be repaired if labor and raw the French zone. It refused to be
power,
the
Soviet
up to a normal maximum of 10
for many of us in all political
billions' "Deutsche
Mark"; they materials could be sucked in free¬ associated with a policy of further parties are wholly devoted to it, Union is no more immune than we
Distrust is being in¬
ourselves. If we want peace rather •
are a hybrid between bank notes
ly. Though the high suction power removals.
even though the war-scare has set
than
and paper money; for they are not of money is preserved by credit tensified by the verdict in the
war,
both our two states
us
back slightly. •-* We have not
must resist that temptation. When ;
There is an im¬
signed oy tne bank. They are be~- restriction (credit is mainly limit¬ Krupp case.
yet completed the building of a
it comes to demanding her; own,
ing exchanged at the rate of one ed to commercial bills), it cannot pression that proceedings have
truly adequate social security sys¬
Deutsche Mark for 10 old Marks. suck in raw materials, food and been less fair than those against
way in the world we Americans
tem, though here too all the world do
the dye stuff concerned.
not believe the Soviet Union,
Public
So far 34.5 billions old mark notes capital goods which are beyond
knows that we have gained much
its reach.
takes a back seat to anybody. Fi-;
opinion is puzzled at the confisca¬
and
128.8 billions deposits have
tion of this huge enterprise for the ground. Meanwhile, everyone who nally,
been dealt with.
Of this total of
what
every
thoughtful
The loss of 30 million acres
wants to work can find a job, for
benefit of the Control Council,
American regrets bitterly in the
163.3 billions, 40 billions (19 bil¬ east of the Oder-Neisse
line, the
we
are
suffering from the acute Soviet
which includes Russia; at a time
lions cash belonging to various partition of
system is its determination,
Germany, the con¬
labor.: shortage
characteristic of to exclude its own
when the Western Allies hardly
bodies and 21 billions belonging to fiscation of
people from
the merchant marine
this period of full employment.
desire Hussia'sK participation -in
free contact with the rest of the
banks) have been cancelled. Every and of foreign assets has "made
Hence the pressure for an even
the Ruhr.
There is an uneasy
world.
We regret it particularly
holder of a food card received an Germany desperately
dependent
better social security system is
because it has the effect of im¬
feeling, that denazification is not
advance personal quota of 40 resp.; on
foreign goods and on the means
not. strong
enough to
prevail.
merely used for punishing Nazis,
60 Deutsche Mark; employers got of
pelling us upon the same wrong
paying for them. If she cannot
Nevertheless, I hold it to be one
but for getting rid of future rivals
an advance of 60 Deutsche Mark
course. .lv;
.si
get adequate raw materials for
of our serious mistakes not to take
in
a
round-about way.
These
for each wage earner. The 13.5 bil¬
It would take a paper as long
processing
under the Marshall
advantage of these good -years to
lions old notes in the hands of the
suspicions may be unjustified.-, It
Plan, production cannot be speed¬
Mr. .Fadeyev s to refute his
is not ..easy to combat them. In an provide for the leaner ones that
public have been exchanged for ed up sufficiently and monetary
the
atmosphere of tension, in proceed¬ willprobably come latere We charges againstlong United States
1.9 billions new notes, and em¬
in detail.
So
a discourse I
stability will be menaced.
should certainly, be doing ourings in which Judge and. Plain¬
ployers
received
700
millions.
Labor too is inelastic. The first
Furthermore,
tiff seem to belong to the same selves what we are directly or in- j am. not permitted.
109.9 biilions old bank deposits
impacts of deflation on it are be¬
directly urging other countries to
not necessary. Let me only
have been exchanged for about
state what I feel sure .the sci¬
coming? visible; unprofitable en¬ party, a verdict of the Court in do,
mamely ta get. our inflation
favor of the plaintiff will always
10 billions new deposits, of which
entists and artists and writers of
terprises are folding up; their
be criticized.
It is particularly under control so that, the real purfive billions are blocked; four to labor
force will
have to
seek
chasing Ipower of the working nay country would-fully approve
five billions can bemused. New new employment* In the
prevail¬ unfortunate that this has hap*
people,,the fixed income workers as a .constructive program for
accounts opened for governments
ing conditions of scarcity, the pen£dj£t 9 time when German in¬ and the pensioners would stand in , Peace;
r
*
V. I:':. '
f .
and business amounted to 3.1 bil¬ switch over
dustry should feel confident that
ought not to be diffi¬
the period of contraction is over. better relation to prices.; This is I - (1) That every human being is
lions.
Thus about 8 (5+3.1) bil¬ cult.
But many who could make
coming to be recognized also by free to seek the truth and to exlions bank money and 2.6 billions a
living in a puffed up "inflation- Evidently justice being proverbi¬ our
employers, who are often ,un-'! press the truth as he may undercash (1.9-f0.7) were immediately and-black-market
economy" are ally^ blind, has not seen eye to
justly accused of oppressive de-, stand it.
available. £: Another 500-900 mil¬
not fit- for regular. employment. eye with currency reform.
sires,
-'y?
:
,
(2) That * every human being
lions representing the 20 mark The
It should however be recog¬
percentage of women and old
In the field of foreign policy has an everlasting right to per¬
nized by now that there are better
personal quota which was held people
among refugees and de¬
there are many Americans, if not sonal safety for himself and his
back in June -from the 60 Mark
portees is very high; In the Brit¬ ways of preventing future German
a
majority, who feel that some family, equal to that of every
claim have now been issued. When ish
re-armament than by the throt¬
zone, the relation of women to
serious mistakes have been made.' other person.'' ^r.: >
the transaction is completed, the
men has risen from 103 to 119; the
tling of her .economic energies.
On the central issue of aid to the
volume of new money may be be¬
(3) That individuals have the
percentage of males between 20- The present so-called German war
countries'-which have suffered so right to organize with others to
tween 15 and 20 billions/,
65 has fallen by 6.5%.
Money potential Is so dependent on for-;
much from ' the
war
there are promote their common purposes, •
J^ebts Were subject to the same suction cannot draw the physical¬ eign r$w materials, and will re¬
those who think that our govern¬ except by overt actions of vio-:
rate of reduction; those of the ly unfit into the production pro¬ main so, that Allied supervision of
ment Ms been too niggardly, as lence.
;"
-.\ ;,;v'■';. •
Reich (at least 400 billion mkrks cess; yet they have to be fed. The imports would foe quite sufficient
well, as those.who think that it
(4) That the right of self-gov-i
at. the end qf, the -wkrj, were cost of maintaining them fall on to guard against abuses. Tt would
has been so generous aS to en¬
ernmeilt belongs to every peoplesquashed, no interest had been the taxpayer; he must either do be much more intelligent to take
Un¬ and that it must be shared by
over
shares of suspect German danger our own economy.
paid on them.
Their cancellation With less or produce more. doubtedly the danger exists that
every part or groufr; >
Prices moreover
as
a
whole concerns, pool them in an Allied
wiped out the banks' main assets.
V\vsome selfish interests may seek to
They had to be salvaged. ; The have notyet fallen.
In many holding company, and give it the
(5) That peoples and their gov-*
use
this opportunity to feather
Allies had dissolved the Reichs- cases-r-coal and iron for example necessary voting power to control
ernments have the right to be im¬
their own nests and even that
bank and had reestablished a cen¬
the price stop had kept them appointments and watch opera¬
mune from the efforts of others tosome American officials, in/their
tions.
tral bank in each of the 11 Lander So low, that
undermine or subvert their chosen
they had to rise. As
enthusiasm for our own economic
The last step of the reform must
of
the western zones; these
11 the
purchasing
power
of
the
governmental forms and institu-;
be taken within half a year/ An system, may seek to attack un¬
regional central banks • had or¬ working; class has been preserved,
tions, whether by propaganda, iri~)
their demand may prevent an all equalization fund is to be created acceptable conditions for the help filtration, or direct interference.
ganized the Bank of the German
^
we can give.
But this is known
Lander. This Bank provided each round
decline
until
supply is which will compensate creditors
(6) That, since civilization and for the losses they have suffered among us and I sincerely believe
regional central bank. with a really flowing freely.
World
that the American people as a the arts of peace are the mon¬
credit fori 30% of its deposits lia- prices unfortunately are still soar¬ and which may have benefitted
debtors and owners of real estate. whole will angrily reject any such opoly of no one culture but the
i bilities; each regional central bank ing. v-:
;
latter- have efforts, which can only array the product of all Cultures in continu¬
I in its turn gave ; a credit to the B £>hce moire, moreover, - planners Unfortunately ■ the
nations Of the world against us. ous interrelationship, the plurality
t commercial-banks in its region for
are
interfering;At a momeiit often been badly hit even when
of cultures within and between
15% of their current and !}/£% of when all obstacles to increased they have got rid of their debts. AncUremember that when Secre¬
nations must be maintained and
their time liabilities. • Each bank production
should be removed, The sums needed to pay compen¬ tary Marshall made his offer more
than a year ago it was not limited protected.
f
v
received I moreover;'a^compensa¬ dismantling has been resumed. In sation for war damages, for-rep¬
tion- claim" bearing 3% interest, some cases, the effect of the re¬ arations, to refugees andrdepor- to the so-called Western states of
(7) That in the interest of en¬
tees are enormous —' the German Europe, ^
for which the Lander are liable; sumption is purely psychological.
during peace every nation, large
as well as small, must surrendex*
these claimscan;.be inortgaged The plant in question has stopped estimate of property lost by refu¬
War-Mongering
to a world organization so much
and sold within the banking sys¬ working for two years and more, gees
and
deportees • to
Russia, 5
It is true that a small but loud¬
and
Poland,
of its national sovereignty as may
tem: *y In other words, the" credit and its labor force has been dis¬ Czechoslovakia
mouthed section of the American
be necessary.
of ? the Lander covers -motes and persed. But even in such cases— amounting to $40 billion, is prob¬
Bank

,

is

an

.

*

,

-

-

.

*

.

,

.

,

,

deposits;
'
( /All bonds, whatever their na? ture
and all
private annuities
were
cut by 90%; *. But wages,
,

salaries,
Were

not

social; insurance; .rents
tampered. with.
Their

beneficiaries
Mark for

reform

receive

confiscates

creditor's

I

Deutsche

1 old Reichsmark.

90%

property,

of

The
every

though

he

get another 10% later on.
These 10% are rightly called "the
may

be charged with war¬
/ (8) That science, the arts of ex¬
Americans detest that
activity.
But I have heard as pression and learning must be free
for reparations. The only way to
and
their
products freely ex¬
much war-mongering in this con¬
equalize the burden without mak¬
ference as anywhere.
I denounce changeable; >, /Vv;v:;.
ing it- too heavy for the more
all war-mongering, whether it be
Finally, I want to disavow abso-/
fortunate,' is to speed up German
American or Communist, in the lutely the desire imputed to us
production.
If this is not done,
Americans f of
wanting to take
Chicago "Tribune" or "Pravda,"
the
British l and American f tax¬
in the private press or the gov- away from the Red Army and the
payers will have to write off their
ernmentally controlled press.
people it heroically represented
il Dismantling might have been "advances" to Germany.;;
or from any other of our allies in
Germany's economic recovery
an intelligent economic policy
(if
the last war one jot or tittle of the
one can call it intelligent to wreck
depends on the success of cur¬ dam have clearly shown, thai
credit they rightly deserve for our
planners cannot plan — except

the August * Thyssen Hutte

is an
example—its removal will disap¬
point those who had hoped that it
might once more start partial pro¬
duction; half-finished goods'are
indispensable for further process¬
While everybody wants to
ing.
go
ahead at full speed, dis¬
mantling creates bottlenecks,
p

exaggerated,

v

Its failure means
plant in which < 110 million rency reform.
quota." The cut in accu¬ a
One should not endanger
purchasing power is to marks were invested, and to pull chaos.
reduce demand/ and to force its out its equipment valued at 10 it by clinging to a plan which is
million marKs,: at a cost: of 20 unworkable. 1 Events since Potsowners on the labor market. 7 The

shadow

mulated




press may

but even a
mongering.
quarter of it equals Russia's claim

ably

destruction.
are

not yet

Unfortunately

they

prepared to acknowl¬

edge their limitations.

common

too,

victory. We won the war

We can win the peace,
if only we stay together.

together.

26

COMMERCIAL

THE

(1122)

itself will take up

serve

(Continued from first page)
more

fundamental policies constantly pro¬

the vernacular, what

hope to suggest enlargements of outlays not now in
contemplation. Of course, the usual statement is made
about the very large military costs which, allegedly at

i: will

$
,

;

this

.

basic situation

"

expression of hope that, for whatever
dollars we decide to spend for this purpose, we shall get
the maximum possible protection.
But what of the other
outlays now being listed? Thanks to the complexity and
lack of clarity in Government accounts it would be difficult
to say precisely how much is being laid out at this moment,
not to prevent inflation, but to keep prices
up for the farmers
of the country. Potatoes are again in the headlines, as are
eggs occasionally, hut these are but examples of what is
taking place. Housewives who are obliged to pay fantastic
prices for some of these articles would find, if they could
trace the matter through, that their Government in Wash¬
ington i$ in no small part responsible for their difficviWfcs.
which

may

some

or

in

some

1

-

These* and:

some

of

the

confronted.
'

are
„

-

1

.

'

Obvious, hut

.

f

•

-'v

/

I

v

.

' '

V

-

'•

4

trouble.

What the forward-looking citizen would like to
regime — if, as is apparently gen¬

know is what the new

erally taken for granted a new regime is on the way — can
bo persuaded to do in the premises. For an answer to that
question, however, it is more than likely we shall be obliged

that must- be
supplied
production at prices which
their wages will buy if the indus¬

ment.

try

is

to

keep

-

^

scarcity

inflation,

and

production

of

lines which

we

in

the

many

have today, came

hot

average; Worked'hi
he
motor->car Industry.; The wages
labor, white collar work¬
school teachers and the em¬

ployees in the; service trades
far less
ers

inher¬

4

Essentially the same is true of every other cent of
needless outlay. The hope, and the only
hope, of a sound
on

its

own

feet

rests, upon a

renovated budgetary situation. The task of
eliminating the conditions which owe their origin to the
New Deal and the financial blunders of the war
years is
in any event a Herculean one. Given reasonable
lions under which to work,, we,
are,

than

the

in

the wages
motor

are

of work¬

industry.

car

millions

of

Workers,
whose wages and incomes are less,
want motor cars if the costs and

tion

§

coudi-1

by able and courageous men.
persistently weak budgetary condition, the situa¬
becomes quite different.

'!'

a

/

•

Self-Evident Truths

v

-

such

;

keep
mar¬

naturally,

"anti-inflationary" steps

as * those

the headlines of late have little real

which have

meaning.

made

Federal Re¬
serve authorities are
quoted in the press, for example, as
estimating that member banks would dispose of some $1.5
to $2.0 billion of Government
obligations to meet the newly
imposed reserve requirements: But who will buy them at
present prices? The Reserve authorities, so far as we are
aware^ have remained silent on the subject, but we venture




government

-

-

pf: inflated prices; we are in for t
the ordeal of a correction of these

the eco-supply and de^s
mand
and depression, with ritsjl t
lessons from the school of expe*? 7;
maladjustments through

nomic

forces

of

rience.

;
•'V
Bpcause of the inflation which k

the entire fabric of i
cost-price relations during the

relation to each other in terms of !•.

the

value of our present dollari I,
Mpnby does^^ not cieate:values hpr^t
it

does

create goods.
Money isL
tool to measure thp ex-;
change relations or the 'prices of;
koods in terms of their costs. K

only

a

Goods and services have value be- ;

These -costs

;

jnclude

remedy : but

aggravate these
; materials.* the . costs of4
unsound economic conditions. fools and machinery, the labor of'
Both : labor
and
management ^roductibnj
transportatioma nd ;V
Should seek to educate themselves

triarketing, the time element hi •
ivaiting for production 1 arid de-' conditions and demand that these livery, - and waste, breakage and,
remedies be applied as speedily loss.
These are the costs which;
as possible:
make goods valuable. Paying lor?
The causes of inflation and ris¬ these costs, the risks of
manage-,
on

the

best

ing prices

remedies

for

these

in the management

are

other

union leader should

ment; and the

be

uses

recaptured in
the goods

which

of capital must-,

for'

the

prices

are

sold, ;if

a

;

be able to keep ,
going. The function of money; is;'
to measure these cost and price
business .is

relations.

to

,

Your money wages are'

the costs of your contribution

tof*;

the

industries

depression

in

the

because

will

this

bring

on

industry,

people

are

a

not

supplied

working man's wage-dollar. production. You^ real; wages are'
Every working man and every the goods and Services you
buy;;*
that

demand

his

government maintain
monetary policies and keep

sounc
up

the

with the

cars they-want, but be¬
purchasing power of his wagethey cannot buy the cars dollars.
Based upon the United
they want.
States Bureau of ' Labor, indices
It is a great mistake on the part bf
prices and the cost of living
Of labor and labor leaders for the average dollar will buy now
cause

workers

to

try

to get all the
things they want by increased
wages which forces the prices of
that

however, confident

It should not be
necessary, but apparently is, to
repeating the self-evident truth that until such a bond
ket comes into
being and is permitted to function

the"

these responsibilities for
the best interests pf the whole of
society, wages will be increased
through the increased purchasing
power of the dollar and continued
business and employment stabil¬
carry out

ability pf corporations to pay will caiise of their costs.

wages in: .the motor car industry
in
comparison
with
wages' in

the products of their work
f

that it could be achieved
With

•

for

justment of all costs and prices in

Both

Of v the

ers,

ently difficult to develop a market in which the obligations
of the Federal Government
may be sold to bona fide investors

Government bond market which stands

demand '.that:

holds

businesses and

to find but what the dollar is 1
actually worth and -seek an ad-> '

partly as a result of maladjustments during the war and
partly as a result of government
policies and regulations. The demand for wages in excess of the

of farm

anti-inflationary strategy. Such ''support"
expenditures swell the national budget, and it is upon a re¬
duction of that budget that
any sound program to avoid or
remove inflation must
depend. Either these additional ex¬
penditures will be raised by further borrowings or from

-

conditions

try

producing.
The
other industries
are low in comparison
with the
wages in the motor car industry,
The wages of the average store
clerk are only about one-half that

in many

wages

in connection with

for what they are worth.

credit

and

their incomes and

past 15 years, it; may be best to>;

about

too

from

rv;..

more

the protection which sound money"

to await the event.

But, these

it becomes the

and manage- •/:
themselves on ^

educate

-

cars

others' are key commodities,

case

will

All this is obvious
enough. It has been said many tirhes ity. On .the other; hand, if pres-;,
in these columns and in many other places. It has, more¬ sure
groups
and ; selfish
un-1,
over, become plain enough that the present Administration informed interests -merely demand; •
intends indefinitely to continue to ignore these elementary higher wages for themselves in-:,
itead of a remedy to the causes:,
facts and to keep right on
deceiving itself — if that is its

moving to their natural level — which prices are not more than they can of the national monetary and debt
pay.
In order, therefore, to keep policies.
Inflation resulting from
large production this year would still motor car
production going and excessive expansion of money and
supply the farmer with substantial returns — naturally and steady employment in the indus¬ bank
deposits caused by govern¬
inevitably limits directly the degree in which the general try, costs must be kept down to a ment extravagance and deficit
price level may be "corrected." But, of course, there are level where the people who want financing, raises> prices and re¬
the products can buy. ; Too high duces
the
other aspects of this situation which are of
purchasing power of
equal importance

In either

*

a

If ' labor

people.
ment

•-

and to prevent them
in view of the
very

heavier taxation.

-

political government in a democracy is necessarily in-in¬
fluenced 7 by
the wants of the '!

V

*

But

ment.

/ 7

"

—

.

(Continued from page 4)

artificially set "support levels,"

The Bond Market

.

f

^

Labor's Economic Dilemma

which, of course, would at almost any other time have
been regarded as exceptionally high.
;

" I. 1

"

.

•

inflation ^

further

of

•

through monetary manipulation'^
a
responsibility of the- govern-

our

instances in all prob*

ability, ultimately ftjM and unconditional title in the
process of protecting these markets, But there can not
be the slightest doubt that , the national Treasury will
be called upon to provide enormous sums to make spre
—if such is possible—that the price of these commodities
will not fall below

by whichl'r'we
*'•=,.

¬
t •

and the

our economy

has penetrated

instances by lack of stor¬

some

avoidance

do to alter the:

be

for the commodities to which the Government

would take conditional,

1

t

'

to "support" the

prices pfTcorn and wheat
to say nothing of the other1
items on the long list of farm products which the Federal
Government is more or less pledged to "support"—vary
a good deal.
Reports arc that such outlays are at the
age space

\v

mere

or so

r

a constant suppliant in the,
market, there is, to speak plainly, little or nothing can

only be avoided
inflation.
The cor
present inflated

can

the

of

condition in

must, "support" the Treasury in whatever it undertakes,

that the Federal Reserve authorities

Estimates of the amounts of money

mem-

rection

and the Treasury remains

Money Wasted

being limited in

portfolios of the

production, '■>

and

long

a

by inflation
by avoiding

large quantities of Treasury obligations

slightly contracted, hut in light of their holdings of
Government obligations — which under present policies
^
the Reserve system must "support" — the difference
appears without a great deal of significance. So long as ^5
the Federal Reserve must, or at any rate believes that it

bond

Planned expenditures for defense we pass over at

up," to drop into

should find in these circum-:

have been moved from the

-

period of depression 1
with a slow gradual recovery as
costs and prices are adjusted to *
the ability of consumers to buy,
The cause of thes tragic conditions

be

uncertainties make mandatory, but the
fact remains that those outlays which can reasonahly he
related to our capacity to defend ourselves against attack
leave room for substantial saving in the national budget.

moment

we

employment

and

The credit "base" of the member banks thereafter would .77

|
'

rate, world

expended in the next 12 months

of

her banks into the vaults of the Federal Reserve banks. 7

all

a

is that

stances

•

nothing meanwhile takes place unexpectedly and against 6

time with

Thursday, September 16, 1948

the bulk of the offerings—if indeed

When the matter is all "washed

pursued. Word now comes from Washing¬
ton, for example, that the budget under preparation for
tlie fiscal year 1950, will list expenditures of not less
than $45 billion, and may go appreciably higher even if

.

CHRONICLE

it does not buy them all.

claimed and

any

FINANCIAL

the guess that it would be difficult to find any competent
private observer who is not convinced that the Federal Re¬

As We See It
other and far

&

consumers

products
wants

cannot

who

so

high
these

want

buy them.

The

of workers in this

just

about

would

as

much

-30

as

cents

jwith your money wages. If your*,
wages are increased it .is"
therefore necessary that you con-;
tribute more to production or tlm,t-

money

the prices of the goods

you

duce piqst increase" and
lime

of sales

pro-r"'

the vol--,

remain the

same

or

the business will lose money sgnd: :
later must stop product;
tion and end your job. With
sooner or

There is no
sound,
for this decrease in the and
dependable
money,
stable'
purchasing power of the dollar by prices will prevail.
Production*
increasing«wages. J A few indus¬ will increase with increased
effi-,
tries might increase their produc¬
ciency and volume. With increased;M
tion and efficiency enough to in¬
efficiency, prices can be reduced J"
crease wages this much, but most
and wages increased.
Your wage: industries
cannot increase
their
buy in 1939.

remedy

industry
successfully by
increasing efficiency and reduo
dollar will then buy more instead:
ing costs and prices until workers production in this proportion and of less.
The
responsibility .1oreverywhere can buy the products so must increase their prices to
maintaining sound money has^aiW
This will make for more lasting break
even.
That
increase
in
ways been delegated to -the gov-.,
employment and production.
prices increases your costs of liv¬ ernment. Labor organizationsv;v- J'
V■ :■
I; ving.;
This; spiral
of
increased should understand that
responsi-,
Ap Economic Program Best.
♦
prices and wages has always led
tor Labor
bility and demand that the gov-,
to
collapse and depression and ernment
perform its function of
When prices and the cost of liv¬ there is no reason to believe thai
ing climb upward, labor wants the results will be any different protecting the purchasing power*
of
will be met

more

<

-

wages,

more
wages.
Would it not be
better for labor and labor leaders

with

sound

monetary '

this time. - Any such increase in
policies;
To demand that money.:
prices, when the great majority of wages be increased in .'so'me. in-'
to seek out the causes of these workers
and
producers
cannot dustries to meet
price increase dueincreased
prices and demand a raise their wages and prices, must
to-monetary inflation is unsound
•
remedy which will ; bring down inevitably lead to economy , and a
and will bring a cessation of pro;
the costs of living and increase lower standard of
living for the duction' with
^unemployment and, the buying powers of the
wage great majority of consumers.

earner's

dollars?.'

of

causes

Among

rising prices

are

the These conditions create an unbal¬
infla-? anced production - and consump¬

tion and reduced production.
causes

of inflation

and the
lies

in

are

The tion

well known

remedy and responsibility
the

hands of

.

the

govern-

whereby goods

produced-at

depression, .unless all wages

and,;

prices are increased in proportion.Just

in

how

our

to

the

remove

•

inflation;

.

system or to adjust our
prices to it is a hazard-

high costs cannot be sold.

In the

pastv- such

spirals

ous

,

costs and

-

price-wage

have been corrected

by

a

-

collapse

undertaking

in

Sound .money.,and

any

free

event,,

markets

;

,h \i-

•

Volume

?

-

'

163X Number 4734
J I-.",'
•"
1
•

THE

COMMERCIAL

FINANCIAL

&

CHRONICLE

(1123)

| 27

-

■

,

the

&fe

•edies.

speediest rem? tunately in too many of our best
free known-: educational /' institutions

and

best

With sound money and

converts

of

'these false doctrines
.markets, prices will quickly ad¬
and stool pigeons for foreign isms
just themselves to costs and
are
propagandizing false virtues
everyone
will
know
what his
of these alien doctrines and falsi¬
•wages will buy.
y^.:
/■/';/
'
"me reiueuies lor scarcities and fying the mei its/and benefits .of
.(reduced production are free mar- our American traditiohsr of free'

understood
would
and

•

and

rfianagemerit

and

problems

'interests

best

to

upon, it
for labor

settle

their

cooperate for our
as
a
nation.
The

.

,

agreed

diiricult

be

not

government can be oi great help

by-keeping open the doors of free
exchange-of ideas, and free mar¬
/': •(/??//??/* <' kets. Everyone has a right to his
tkels and free trade with sound enterprise.,
It is the- duty of labor leaders, opinion and to his say, but no one
and dependable monies. Let prices
industrial management,- educators has a right to be wrong, if he is
and costs adjust to each other in
and the press to seek out the eco¬
wrong
in a democracy of free
-free- competitive
markets
and
nomic truths of what is best for
ideas and free markets he will
products which buyers will pay
our whole society including labor
for will flow from every corner of
soon learn by paying the price of
and the consumer with respect to
rthe world to markets wiiere the
production, wages, money, prices taking the consequence of his mis¬
; demands are lor the products at a
?'
••'
price covering cost. - The present and free markets.-Once these are takes."'

•

own

have
The
tee

•

•

.

these

Emphasizes Science
Research

-

iron when there was plenty
jof scrap iron before the war? Why

jscrap

is there
and

•

before

.

the

when

But there
(is no scarcity. There is more of
.these products in the world than
•for these products now.--

.

regulations V prevent ^ the/importa¬

,

tion

these

of

re¬

cannot

products at present

stressed

for

lasting

peace

the

importance

First,v we

how

these

scarcities

v

and

than

coh-

have

be

in

the

entist

able

scientific

for

This failure

work.

and

development.

-

That

$200 ( billion annually, the
felt that we should devote

board

Viributed to the rising.prices seeni

.at:least

.

.

has

like that, and

There
I

politicians, and
them, who
are
the impression that scien¬
are

could

y

under

..

production

<

:v;

,

*;

(3) Sound

(based
:

-j
•
markets
.

more

to

aeffneies

r><!

the

supply and demand,
eradication /of all • rao-

nopoly and price. fixing, t
(5.) Free enterprise and oppor?
tunity for everyone under the

should

ment

FeHpro]

be

better

Govern¬

financed

and coordinated.
I

been
on
the
physical and biological
sciences., These are obviously in

-

student

*

upon

and Tthe

-

money.

competitive

(4) Free

/

Urges Social Research

My emphasis tonight has

tific/knowledge belongs only • to
them. The rumor has come to me
the forefront in terms of our in¬
divisions did you say the Pope that one of them even made the
had?"/
5*: i remark as jo why >we: let the dustry and technology,, But the
social sciences and related fields
?:• If we are to maintain the lead- scientists know anything about
are
at least as important in the
ership in science that is essential the atomic bomb,
to
national
strength; we must I / This situation has been of in- present stage of human affairs.
The physical sciences offer us
vigorously press ahead in re- creasing concern to me.
It was
goods;
the
biological
search./ ' There
is
one
simple highlighted by a telegram I re- tangible
axiom on which this thought is ceived last week from eight dis- sciences tangible cures. The social

aid
should be damental—research in all scien- j
the universities, both tific fields.
Such research alone
scholarships and for leads, to
striking
developments
research facilities. / • :
:
that mean leadership.
Yet it is
Fifth, the work of the research precisely in this area that we, ast
Fourth,

granted
for

"

:.

whether

which are
scientific
research —
adopted mistakenly with

some

.

(2) The fullest possible efficient

All Americans have a
obligation to avoid those

solemn

methods and procedures

-name,

•

duction.

future national

our

offer

sciences

better

us

of

ways

organizing our lives.
I have high
hopes/as our knowledge in these
fields
increases, that the social
enable

sciences will

to

us

escape

,.r„

„__.r

.

national

our

security should certainly be non¬

best impeding

,

pro¬

for

I partisan.

!

(iV Complete freedom for

truths

are

political affilia¬

no

Concern

the basis of

as

;

.

•labor should demand:

cer¬

can

security is non-partisan.
Sober
recognition of scientific research

.

?

They

Science has

$2 billion to scientific? re?
(too well known for further com/search- and /development veach
ment.
If seems enough to point
year.
And when you' consider
cut that all barriers to production
that is a very, very small amount
'should be removed as speedily as
when compared to that $200 bil¬
.possible and production increased
lion, I think it ought to be done.
until the supply in the free marThe secrets of nature are tinguished scientists.
These men
Second, greater emphasis should based.
kefs satisfies the demands of con¬
Any nation expressed their alarm at the debe, placed oft basic? resea^cL arid not our monopoly.
i
:
rations
between
sumers; -This would be a - great on medical research.
that is willing and able to make
increase in wages for every work¬
and
the
government
Third, a national science foun¬ the effort can learn the secrets scientists
er because with increased producdation
should
be
established. T that we have learned, ~ Such a because of/the frequent attacks
tion and lower prices the(Wage?
pleaded with that Congress to nation may, indeed, discover new which have been made on sciendollar would buy more. >
give me a national science foun- facts of nature we have not yet tists in the, ostensible "name of se¬
/ V'{' i/?/ ? -/ /// UO---/; / ?//// dation.
They offered a national|dispovere^.*; ,'curity*
-^ ^ //
Labors Demands
:n
eiimmaxea thej
science bill which eliminated inej
Our problem, therefore, is not
our
The telegram points out that
■lxie lclc&i^in
uui uwi
President from the Government 3 static one of preserving what
"
"
actions of certain groups are
:/
Instead cf higher wages which
the
United
States,
and
I we have. Our problem is to con -1 creating - an
atmosphere that
are
talcing us headlong u»td -'a of
wouldn't sign it.
tinue to engage in pure—or fun-■ ma^e®
shun government
; w?ge-pr;ce
spiral and depression,
•

we

truths that every sci¬

are

knows.

tion.

maintain

to

conditions

attacks,

understand.

under
encour¬

but 'they

been

labora¬

that the American people need to

highly unfortunate that we,
not

We cannot
our

tainly drive them out.

an

proper

re¬

further

should

looked over at Mr.
sounds /like fan:/immense
sqih. Churchill and said: "Mr. ChurchWithva national income?of more ill, Mr. Prime Minister, how many

examples which" could be
how the present
beeri created

the

double %our ain- that the- Pope; would/ not be grave implications for our national good intent, or advocated in the
name
of security
by men with
total public and private ^alloca¬ happy over that arrangement of security and welfare. :
///'///:.
other axes to grind and red her¬
tions of funds to the sciences. We that Catholic end of Poland.
And
;
Attacks Politicians
rings to drag around.
;•/?///,;;
Generalissimo,
the
Prime
are; now; devoting, through f Fed¬ the
~

research

t©*"sKow

scarcities-Lave

,

will

unfair

or

connec¬

do want
atmosphere free
from suspicion, personal insult or
politically motivated attacks.

the

acquire

tories, but, if we tolerate reckless

These

of

in

conditions

towers,

work

have

to

We

intensive

on

,

v

The

further

be

obligation

Government

scientists

It is

depend

search

aged to work for the government.
Scientists do not want to work in
to

for national defense.

or

many

will

working

which

'prices? ;artL 4omesticiypri<^si an4
trade regulations-make it unprof-?
eral and private expenditure, lit¬ Minister of Russia, leaned on the
jitable to-* produce these products tle more than
$1 billion a year for table, and he pulled his mustache
.'to meet the present demand. ;'y/''/
.cited

second

ivory

hope

of with justice if we do not remain
science to our national/ welfare, strong in the cause of peace.
and f it
I remember at Potsdam, we got
contained
a
number of
regulations—of important recom¬ to discussing a matter in eastern
mendations.
Poland, and it was remarked by
The most important "were these; the Prime Minister of Great Brit¬

war? It is true that
some
increased demand

is

Eightieth Congress. " That

port

the

.there

vide

(Continued from first page)

scarcity of copper,-lead
there was plenty

a

zinc

atomic

must

tion with basic research is to pro¬

Defense Aid

as

uses

Foundation bill.

Federal

Truman

only in the beginnings
age.
The knowl¬

are

the

atomic

no
,

research knowledge we need.
I sincerely hope that drive scientists into

programs

The

<

and

developed and coordinated by the
early, passage of a National Sci¬

ment regulations, tariffs and bar-

production and trade. -Iji
the motor car industry we are told
•that there are many scarce prod¬
ucts. Why is there a scarcity of

Research

government's

ence

.riers to

•

Scientific

programs.

govern¬

have

edge that we now have is but a
pursued vigorous programs. fraction
of
the
knowledge we
Inter-Departmental Commit¬ must get, whether for peaceful
on

the

would

we

We
of

Development, appointed by me
last March, aids in coordinating

-

created by

tists

energy program.

.

-

•

are

of

Health, and through
grants to colleges and universi¬
ties.
: ;
; ■'•/, /
Other Federal agencies, such as
the Departments of Commerce, of
Agriculture and of the Interior,

•

"•scarcities

not be obscured
by any smear
campaign, that but ior the scien¬

laboratories like the National

Institute

hope

that

you

have

been

weighing these recommendations
carefully, and that if you agree
with me that they are sound, you

^

nation, have been weakest.

We

in
applied
science and in technology, but in
have

been

strong

past we have relied largely
Europe for basic knowledge.

the
on

wor^' J0.01
the Federal Government is losing the services of

excellent scientists because they
have been looked upon from cerrs as
not to be
trusted.
*",e "

(The

telegram
scientists" fully
for

need

out
appreciate

that
the

sensible

But

ures.

points

security meas¬
very under¬
reluctant to work

scientists

which

I

thoughts
in so much

resulted

have

strife and

and

habits

those

from

tragedy.

sincerely hoping that we
those social sciences
and
that / we
will develop the
atomic
energy
release for the
welfare of mankind, so that, as
I said a while ago, we will be
am

will develop

the

living

in

world

has
that

sure

Now

greatest

what
we

am

going

get through.

in .the years ahead,

and

and

honest

the

the

are

we

need more than

we

age
I

and

seen,

ever

is

do before

to
/

'

anything else

uncompromising

standably are
common-sense of science.
Science
Pure research
Is arduous, de¬
where they are subject "to the
means a method of thought.
That
manding and / difficult.
It re¬
will consider how they can be
possibility of smears that may
; same laws.
"
»
quires unusual intellectual pow¬
ruin them professionally for life." method is characterized by openmade effective national policies.
?; (6) Economy and thrift on the
ers;,
It requires extensive and
That! telegram was a balanced mindedness,
honesty,
perse¬
I think it is vitally important.
specialized training.
It requires
(part of both the government and
and sober presentation of a vital verance,
I know that you are also deeply intense
and, above all, by an un¬
concentration,
(possible
private industry, and education
concerned with the relationship only when all the faculties of the problem that coneerns every
; and-research
open to everyone.
flinching passion for knowledge

«;
-

,

..

.

•

,

Labor's

:

; served

interests

best

the

by

sound

W11

be

program

whicte:ferpduces//ah4/distributes
the largest quantities of
that

wants

the things
the lowest

at

security.

and

Three

years

ago,

Unfortunately

prices.

30-hour week
five-day week.: The hours

and

•

a

for

a

/of labor should -be keyed* to the
■i maximum'efficiency and well be;

Any

labor..

of

ing

schedule

of

.i hours which reduces; production
and which, is not necessary for
; the
health and comfort of labor
.

reduce

must

ucts

the

on

the supply of

prod¬

market and raise the

.

J
-

i

Some

the

of

fundamental

re¬

American.

Continuous research
scientists

is

the key

by

our

best

to American

leadership and true na¬ the
security.
This indispensa¬ tist,
ble work may be made impossible
to

necessary to our national by the creation of an atmosphere
no
man
feels
safe
interest is being undertaken by in? which
the
Federal
Government. / The against the- public airing of un¬

government has, I believe/ two founded rumors, gossip/and vili¬
obligations in connection with this fication.
Living in Hazardous Times research if we are to obtain the
Such
an
atmosphere is unFirst, it must American, the most un-American
It is an unfortunate fact, how¬ results we hope for.
ever, that the peace we hoped for provide truly adequate funds and thing we tiave to contend with
Second, it must pro¬ today.
has not come quickly.
It is the
climate of a
We are facilities.
vide the. working atmosphere in totalitarian country in which sci¬
still living
in hazardous times.
.

required to give unremit¬ which research progress is pos¬ entists are expected to change
their theories to match changes
ting thought to the defense of sible.
As to the first point, the gov¬ in the police state's propaganda
the
United
States
at
a
period
when defense has become incred¬ ernment is developing impress've line.
We

reduced

strong.

v

Communistic;;

mented

production
and

are

standard

with

totalitarian

the

roads

to

regi-

manage¬
a

lower

of

living, poverty and
dictatorship; - .informed American
labor

are

ooposed

to

these.

It is

more

pensive.

At

a

industry

of

time when

we

hoped our

scientific efforts could be directed

has

the

research.

must,

instead/

make

unprece-

of

our

univer¬

saw

the

bomb.

It

of the duties of our American




the

of thought of the scien¬

have better reason

shall

we

expect

lasting

peace

and

a

With A. G. Edwards & Sons
(Special

to

The

Financial

Chronicle)

MO. — James A.
Seddon is with A. G. Edwards &
ST.

Sons,

LOUIS,

409

/

Eighth

North

Street,

members of the New York and

Louis

Stock

Exchanges.

past Mr. Seddon

was

In

St.
the

with New-

hard, Cook & Co.

Harris, Upham Co. Adds
(Special

to

The

Financial

Chronicle)

.

N.
C. —
Walter E. Gladstone, Jr., is with
WINSTON-SALEM,
Upham

Harris,

possibility of an atomic
was the
scientists who Bldg.

Energy Commission proved the possibility. It was the
pushing its extensive scientists who first saw the need

&

Co.,

Pepper

The Atomic

almost

exclusively ,/to improving
well-being of our people, we

and

sities.

been

Committee

The National Advisory

for

Aeronautics

has

of

security

on

their

measures,

initiative

own

and

dented peacetime efforts to main- expanded

,

With Cartwright

who

(Special

clamped

its. many aeronautical down a tight lid of secrecy on all
;
educational .system to help labor tain four miliary - strength.
For developments/ The Federal Se¬ experiments.
It must not be forgotten for a
understand these false doctrines we have learned—we have learned curity/Agency has engaged in exand, where
IheyLlead. (Unfor¬ the hard and bitter way—that we tensive > medical studies/ in its moment, and certainly it must

one

ways

are

ibly

of

fuller life for all.

Still

.

more

peoples of the world have learned

tional

search

When

truth.

and

scientific

and/ socialistic
promises of increased income and

of wages.:

power

ment
:

bear on

I hardly need remind this assoin
many
scientific
difficult and more ex¬ programs
American scientists must, fields.; Fundamental research is ciatioh that it is primarily to sci¬
like all the rest of our citizens; being carried on for the National entists that we owe the existence
devote
a
part of their strength Military
Establishment
in ( the of our atomic energy enterprise.
and skill to keeping the nation laboratories of the armed forces;
It was the scientists who first

cost-price of these products and
.thereby
reduce
the
purchasing

,

.

brought to

are

a

.

.

-.is a demand

scientist

problem, with no disturbances
when the, fighting stopped, all of- or distractions.
us
were eager to return to our:
Government Research
peacetime p ur s til t s. The first

labor is thought of a great many of us
was
how to translate our war¬
being misled - by slogans, ideoltime advances in scientific knowl¬
"ogies, and promises which will
edge/ into
better/, standards of
ultimately destroy labor's freedom
/
'
7
and well being. For example there livhig.

:

,

labor

of science to our national defense

to The

Financiai

CINCINNATI,
A.

& Co.
Chronicle)

OHIO

—

;

Charles

Skinner has become affiliated
Cartwright
&
Co.,
Inc.,

with

TTninn

Central

Bide.

23

presentation of

ICC in its

(Continued from page 2) ;.
leverage effect of such

growth of medium to longer dis¬
tance
passenger travel over the
paid to the fact that the 1,~
railroads, reflecting, in large part,
537,000,000 tons of freight orig¬
the growth in population and in¬
inated by the Class I roads in 1947
creased per capita spendable in¬
were at a new absolute high. Only
come.
By no means unimportant
the longer hauls during the war
has been the retrieving of some
years
(average: 245.3 miles in
passenger .-business
(coach, pri4
1944 versus 226.0 in 1947), served
marily), through the furnishing of
to produce the greater ton-mile
better
and
newe^ equipment
volumes. Both these items reflect
(stream-liners) on main lines by
the greater needs of the nation for
many of the roads- That rail traf¬
higher
overall:; railroad freight
fic of this nature, in the face of
volume, attending the growth in
stiff airline competition indicated
population.
The
11,744,000, or over the future
(as well as in the
8.9%, sharp rise in continental
recent past), should continue at a
population
been

an oper¬

income account for class I

effect, the

ating

developments could be tremendous

railways, for a "normal construc¬
tive year"' This-calculation (ne¬
cessitated in their determination
of the reasonableness of recent

application of earnings pro¬
tection and results on presently

in the

fixed
and
income
well as stocks, both pre-

outstanding
bonds

as

ferreds and commons.

freight rate increases), was con¬
tained in the Commission's final

:

are

1948 (re
1947, Ex
Parte 166); The final 'estimated
"constructive year" earnings re¬
sults,- as reproduced in the tabu¬
lation below, are the revised data
(published
August 13), of the

I,

War

some

Increased Freight Rates,

railroads were taken

the

by the government and such
action is calculated to have cost

over

American

the

approxi¬

taxpayer

dated July 27,

decision,

that fear the
threat of government ownership
in the event of war. During World
There

between 1940 and

U. S.

1947, accompanied by increases of
around
42%
for California and

Economics, allowing for the most

stable

level

pand,

remains

record to

or

should

1939,

in 1933, and 7.90%

10.66%

in 1928. In

other words, rail trans¬

charges in 1946 . ac¬
considerably smaller
portion of the delivered cost of

portation

counted for a

in former years.

the article than

Similarly, the ratios for

the vari¬

individual commodity classifi¬
cations were at their lows com¬

ous

pared with prior periods in their
relation to the value of the com¬
modity transported.' For example,
ratio

for

products of mines was

22.76% in final six

ex¬

even

5.36% for all com¬
compared with 8.43% in

The ratio was

modities

.

Commission's Bureau of Transport

mately $2 billion, after all bills
were
settled, to say nothing of
income taxes not otherwise col¬

private automobile—but also em¬
phasizes and attests to the steady

Appraisal of the Rails

A Mid-Year

Thursday,: September 16,. 1948

FINANCIAL:. CHRONICLE

&

COMMERCIAL

THE

(1124)

be seen; the
date, at least, appears to
more optimistic attitude
to

versus

30.44%

months of 1946,
in

in 1936, 35.95%

and- 26.74% in 1928.
The
figure of 5.36% for agricul¬
products compared with the
previous low of 9.57% in 1936;
latest ratio of 3.79% for manufac¬
1933,

latest

tural

authorizations for Oregon, 35% for Washington, and
support a
rate increases. Compari¬ 11% for Texas, cannot help but toward such future rail
lected, amounting probably to a
passenger tures and miscellaneous contrasted
sons are made
with "actual perr" spell more' favorable rail move¬
similar amount. In World War II,
business
(coach and first classj with 6.30% in 1933. It would thus
formances in the peak earnings ment over a period of time.
Vy?
cn the other hand,, when such, ac¬
than- is. generally
..conceded^- by ' appear that,..broadly.and generally
As to passenger traffic, the fall
tion was not taken, the railroads years of 1929 and 1942, as well as
either the general public, includ¬ stated, the roads would seem, by
from the 1944 Class I total of 95,the.years 1946 and 1947. *
paid
to -the
government ' the
ing investors, or by many within and large, to be far from "over¬
Broadly, the above Pro Forma 549,000,000 passenger-miles to the
equivalent of an average $3 000,the rail industry itself.
pricing their market," as yet, even
1947 total of, 45,935,900,000 was a
000 Federal taxes per day, while Income Account was based upon
after allowing for the most recent
assumptions of a "normally stable 51.9% decrease, while the drop
remaining in private hands. ^
■
Neverthe¬
Current Status of Freight Rates freight rate increases.
industrial condition," with freight would be around 58% if calculated
>
The total of such Federal in¬
less, this is not to say that some
and Passenger Fares
volume placed at 647.3 billions of on the ICC estimate for a "con¬
individual rates, as recently estab¬
come and excess profits taxes paid
ton-miles (one.ton carried one structive normal" year. This sharp
Comments (above) on present
for the four-year period,VI942lished, will not have to undergo
mile) or "slightly under that ac¬ falling off of passenger business and
nearby
prospective traffic "adjustments" from time to time,
1945, inclusive, came to $3,700,tually handled in 1947," and pas¬ should not be surprising to any¬ volume would serve but little pur¬
in the light of future experience.
000,000, an average of $925,000,000
senger business disclosing an ap¬ one familiar with the subject. Fur¬ pose if the current status of the
As to passenger fares, current
annually (the Tatter an amount
thermore, it needs be pointed out transportation rate structure were
preciable decrease of around
levels of line haul coach rates are
greater than the total net oper¬
12.3% from the 1947 performance, that the aggregate figures of pas¬ not clarified to some extent. Three
at 3 cents per mile in Eastern ter¬
ating income of $780,000,000 which
senger business include statistics interim
freight rate boosts, au¬
the roads earned in
the entire revenue passenger-miles (ohe pas¬
ritory, with Pullman (first class)
pertaining to commuter travel—a thorized by the ICC, and superim¬
senger
carried one mile) being
year, 1947). These taxes were paid
rates at 4 cents per mile.
These
estimated at 40.3 billions. All the very stable business, not subject posed upon a previous general
while the industry expeditiously
increases have brought such rate
fluctuations
of
appreciable rate increase, may not be readily
many
rate
changes
that have to
moved more than twice the vol¬
levels back to those prevailing in
taken place since the end of the amounts except over extended pe¬
ume transported in the First World
comprehended without amplify¬ 1929. while in the South and- in
war
pertaining to freight, pas¬ riods of time. Excluding the com¬ ing details, especially when two
War
with
considerably
fewer
the
West, respective passengermuter
data,
passenger-miles rounds of postwar wage increases
(32%) freight and passenger loco¬ senger, mail and express were^ap-"
mile
figures
are
2.5
cents in
plied to the assumed volumes in a (coach and first class) decreased were interposed meanwhile, afc the
motives.
passenger
cars,
and ; a
coaches and 3.5 cents in first class
from 90.231,100,000 (1944),To 39,- same time that rates for mail
pay,
smaller number (28%) of freight "constructive normal year."
travel. On the estimate for a "con¬
925,400,000 (1947), or 55.7%. while express
cars
of all kinds.
Except for a
charges and
passenger structive normal" year, the over¬
Computations relating to oper¬
a decline to
an indicated 34,300,fares were contemporaneously ris¬ all
national.; emergency which might ating
expenses
were ! likewise
passenger-mile rate is calcu¬
000,000 "normal", level (based on
be of short duration (such as. a based
on
going (August, 1948)
ing,;-;-.-.
lated at 2.334 cents, versus an aver- *
the ICC forecast) would constitute
move
to
prevent
a
strike or levels for wages, and assumed the
On a cumulative basis, the over¬ age of 1.946 cents in 1946, a low
a loss greater than 61%.
straighten out some labor disturb¬ continuation of prevailing (Nov. 1,
all increase in freight rates au¬ (since 1900) of 1.753 cents in 1941;
Such a decrease, while of seem¬
ance), it would seem distinctly un¬ 1947) cost levels for fuel, mate¬
thorized since June 30,1946 (when and the 1921 peake of 3.086 cents.
likely that the government would rials and supply, as then evi¬ ingly staggering magnitude, ob¬ postwar, rates were at levels vir¬ All told; the total boost in pas¬
scures some of the other encour¬
take over the railroads again; con¬ denced in the record during Ex
tually prevailing in the 1938-1939 senger fares, on an annual' basis,
comitantly, there r. appears to be Parte 166 proceedings. j.However, aging trends developed from al¬ prewar years),, is calculated? at since mid>4946. is calculated to
lied
passenger
data, h Thp ^total
almost a complete absence of any it should be noted that Net Rail¬
44.2%.,
Distribution was uneven produce approximately $166,000,
number., of
passengers , carried;
way; Operating Income.; as shown
popular demand Tor same.:-T%
as between the various districts,
000, while it is significant that the
other
than
commuters, totaled
above, amounting to $1,217,000,000,
as follows:T
Commission has granted virtually
^
360,941,000 in the postwar 1947
Earnings Outlook Under Peace
would otherwise become $1,119,-Eastern.District, 47.1%t;Souths all that the roads have requested
year.
This- compared favorably
*v.;;v. Conditions—A "Normal
400,000 (after allowing for income
with (a 12.3%. increase over) the em;' Region,: 44.3 %; Pocahontas by way of upward revisions , of
;
Constructive Year'*
-;; , Tax influences), if detailed oper¬
numbers carried in-1929, and con* Region, 39.0%; Western District, passenger fares (including com¬
T Ruling out an actual outbreak
ating expenses, were • to be in¬
mutation).
.. ,
<\
stituted a rise of nearly 30% over 41.4%.
of hostilities (which should not be creased by an estimated $157,400,the 1941 prewar aggregate: More¬
Express rates were increased
This new level contrasts with
relatively harmful, at . worst, for 000, which would represent the
over, aggregate volume of 39,925,- but includes the initial rise of only twice on an overall basis, of 10%
the
carriers, and might prove rise in average unit prices for
000,000 passenger-miles (of non- 17.6% granted by the ICC effec¬ each,- besides-'other . increased
somewhat beneficial)/ and, at the fuel, and materials; and, supplies,
commuters) in 1947. was still 58%. tive Jan;l, 1947. as a result of its charges on some* of this type of
same time, bypassing the possibil¬
between Nov. 1, 1947 and June.
above the 1941ut9tel and higher Eta Parte 162 decision.* In -tota traffic. Mail pay^was raised (25%)
seizure
the
" *
(July)

recent

freight

"

,

.

~

-

.

,

,,

,

•

ity of'a socialistic

roads; the

in

outlook

of
"peace"

a

1948.

setting and beyond the immediate

period extending
of

while

1948,

the balance

over

free

not

senger

from

the

effects •>,of

as

in

at

Traffic Yolumes

high plateau for any
period. It is widely rec¬
that freight volume has
considerably from war-

a new

non-war

ognized
receded

activated

an

miles

levels

were

(1944

roads,

net

ton-

737 246,000,000).

But

eminently satisfactory little publicity has been accorded
"earning power" on an to the fact that the 654,691,000,000
basis, attributed toT the net ton-miles in 1947 were 46.4%

at

present rates for trans¬
portation
services
and
current

operating costs; This concept was
clearly conveyed recently by the

above

the

previous

peak

freight
level of the "prosperity" 1929year. Secondly (not ghown above),
but minor attention has

in

any

similarly

the -1920's

of

year

(when such travel is considered to
have still constituted

of

annual
•

than

v 'i

Freight and Pas¬

currently indicated), as well as
a
"constructive normal" year

are

optimistic appraisal of
this industry's prospects, is the in¬
levels

on

military first
place, it is evident that rev¬
enue toh-m iles in 1947 <and 1948,

One important factor in arriving

dicated

'•?'* '••

the foregoing tabu¬
lation, several interesting obser¬
vations may be developed.
In the

directions), should not be ignored.
at such

:?T'i

>v

Based upon

during "peace," in
stimulating economic activity and
sustaining rail movement at fa¬
vorable levels (indeed, offsetting
any slack that may arise in other

preparedness

-

^'V-.v;-r'*:.C

Comments

Ueatening clouds, still appears de¬
cidedly encouraging. In this con¬

nection,

;';-Vrli'ri

; ;

v•

*

\
v-'c'A-

an

railroad

of

projected by the ICC. The
34,300,000,000 would

year, as

latter total of

still

the

exceed

1921

year,

commuter

muter

volume

in

any

(when data separating
other

and

traffic

are

than

first

com¬

available)

Revenue

ton-miles

Revenue

passenger-miles

Tctal

operating

1947

647.3

654.7

40.3

45.9

(billions

(billions)___

revenues..

has

heavier

resulted

passenger

primarily

volume
the

from

.$8,684.;

$7,627.7

$7,405.8

$0,279.5

7,041.0

5,786.6

5,944.3

4,825,6

963.3

1,259.2

1,028.2

873.6

i732

170.1

129.0

111.4

151.5

Tula!

n.-

——T

115.8

;

92.8

96.9

148.2

394.4

360.2

285.0

280.7

$6,357.4

$4,001.1

.

operating

expenses

of

Transportation

and

way

of

$7,538.0

structures

equipment-_
L

;

-

other

$0,797.1

•1,447.8

; 1,212.1

1,150.2

796.4

1,787.5

1,558.0

1,468.8

1,211.0

3,476.3

3,212.3 '

2,241.8

-

3,733.0

-

•

Transportation

ratio-percent

570.6

■•'

550.7--;' 526.1

,351.9

$4,506.1
*.

,

855.4

1,202.9

2,080.0

'>

367.8

37.14^

,40.03%

42.12%

30.03%

33.12%

journey

(when

rose

to

as

the

high

average
as

151.5

miles in 1944), the trend with re¬

this

item

has

been

in¬

average

27

to

From 1900 to
miles.

37

average

1921, the

railroad journey rose from
Since

1922,

the

commutation journey has

fluctuated only between
17.4 miles.

14.3 and

15.00%

78.26%

83.35%

61.63%

71.76%

Travel other than commutation
in the

same

period, however, aver¬

aged 54 miles in 1922, between 60
and 70 miles in the interval 1924

through 1927, from 70 to 80 miles
in the period 1928 through 1936,

ratio-percent

Total- taxes

$1,129.4

Payroll

'

Federal

income

All

■

'

other

-■

Equipment & joint facilities
Net

railway

operating

$i;)8.t

$930.4

271.1

353.4

564.0

297.8

294.3

285.2

Drt66.7

DH70.5

net

income—




rents

;

$780.7

$620.1

$1,1118.8

Dr 152.0

$1,217.0

.

;

..

254.4

$390.7

171.0
755.1

(d) 15.7
259.5'

•

.

88.7

272,8

308.0

Dr18l.4

'nrr?7 o

$1,484.5. $1,251.7

and above 90

miles in each year,

This steady rise not

result

tion media:

via

to

serve

and

in

further diver¬

truck, vvaterways, and

Stabilization

air.

Including Wages

against the 44% increase

in

freight rates and (since 1946) a
freight rate*
22%
upping of passenegr fares,
intensify competi¬
cost items-of the industry-have

period

tion

As

in

war

1941 to date.

Operating

rise

sharp

sion of traffic to other transporta¬

'

426.0

Maintenance

All

166^0

other

Maintenance
*

'J

the

passengers.

Except for the

If past precedent

is any

that

such

century.

31.1

940 5

*

.

z*J.

Express
All

53.7

Fears have been expressed

would

447.3
H

64.7

equal to 65%.

criterion, a good portion; if
sion in 1887, and compares with not all, of this request should be
■:'• •
average receipts per ton-mile of granted.
1.275; cents in 1921, and with a
Current Status of Operating Costs
low figure in the past three dec¬

much longer journey (an average
of 110.6 miles in 1947), taken by

exorably upward throughout this

8,340.3

Pas; engers
Mail

592.0.

638.0

creation of

the Interstate Commerce Commis¬

,

This

1929

1942

$10 05*2 0

_

Freight
.

1946

Class I railways since

ades of 0.932 cents in 1942.

through 1941, inclusive.

spect to

tive Year

were

proximately

important
Based on the "con¬ 1947 accounts approximating $30,*
revenues). war levels.
In June. 1948, the roads
Passenger-miles declined further structive normal" year Income Ac¬ 000,000.
by 12.5% during the first five count, presented above, the aver¬ supplemented their original peti¬
months, 1948, from the 1947 fig¬ age freight revenue per ton-mile tion (for a 45% boost in^mail pay)
ures, or in line with the indicated
figures out to 1.2894 cents, which bq requesting an additional 20%,
level in a "constructive normal" would be the highest shown for so as to make the aggregate rise

segment

Normal

Construc¬

raised by ap¬ by'about $34,500,000 annually, ef¬
$2,550,000,000; ; an¬ fective Feb. 1, 1948, with the total
nually. above the immediate post¬ retroactive payments taken into

freight rates

of

traffic

experienced even steeper percent¬
rises.
From 1939 to August;

age

the aggregate ; increase; in
operating costs has been placed at

1947,-

at current
$2,560,000,000 with the rise in fuel,
high levels does not furnish, to
material and supplies disclosed at
date at least, any substantial sup¬
more
than 80%
(a recent 1948
port
for
these
expressions of
estimate
indicates such average
alarm.
Indeed, despite the fact
rise, to date, at 90%), and the in¬
during recent

months

that the third interim freight rate
increment

May

6,

became

total

effective

ton-miles for

crease

on

that

55%

than
including pay¬
to mid-1948, are calcu¬

in labor costs at more

(wage costs,

roll taxes,

data available at
lated to have expanded by 70%),
disclosed an. 0.5% in¬
During recent
months, average
crease over the like-1947 monthly
prices for fuel oil have shown a
total. While shippers have threat¬
further sharp increase which is
ened, in public statements, to sub¬
likely to affeet adversely some of
stitute other media for rail move¬
the roads which are still dependent
ment, it is still worthy of note that
heavily up on oil-burning steam
freight costs, measured in relation
locomotives, - Costs of this fuel
to the wholesale value of the corn- more than doubled and. rose by a
month

(latest

this writing)

only confirms the virtual disap- j modity transported were,; during
of short distance; ' city- the final six months of 1946 (latest
to-city travel on the/railroads data compiled by the ICC); at the
(excepting repetitive
commuter lowest ebb over the 18 years sur¬

pearance

traffic)—in favor of the bus or the veyed.

greater amount between 1941 and
1947, than for any other type of
fuel consumed by the roads.
*
.

:

.With respect to wage

rates, the

Volume 168

Number 4734

roads' -employees

have

already

FINANCIAL

CHRONICLE

(1125)

29

of approaching the effir roadway and structures. A similar rates on transportation services, which Class I net railway operat-'
attained. during
many performance is expected in 1948.
moreover, have Served to mini¬ ing income has exceeded $1,000,-*
Estimates submitted by 127 Class mize the gravity of wage increases; 000,000 are only nine in number:
ently to begin negotiating op the years over the past decade.
a
"third round" of
Because of: severe storms and I; railroads for 1948 capital ex¬ the
postwar wage
industry; in the past, has al¬ 1916, the five years, 1925-1929, in¬
increases, which would result in coal strike stoppages early; this penditures indicate an aggregate ways managed through plant im¬ clusive (when the annual average
putting wage costs at a new and year, little improvement was then program of $1 295,000,000. On the provements /and / efficiencies in was $1,177,000,000),-and 1942-1944, j
burdensome peak level;
The im¬ evidenced j in 'the transportation basis of. their projections that operating techniques to offset in inclusive. '/[
*'T
portance of wages in the railroad ratio. ' During June, however, the $725,000,000 will have been spent part and eventually to absorb al¬
Because of the- high leverage
income account cannot be mini¬ latter ratio for all Class I railways during the first, nine months oil most wholly any adverse effects inherent in the
capitalization set¬
served

notice

and

for

are

by

&

COMMERCIAL

THE

way

ciencies

pres¬

,

-

"

mized

such

since

costs

consume

sharp improvement equipment/alone, it would seem resulting from a continuously ris¬
figure that such amount spent on equip¬ ing trend in wage scales..;(
.
June, 1947. ; Continuation of ment for the full year will again i What might not be generally
this trend is clearly witnessed in be greater than last year's aggre¬ comprehended or readily appre¬
the July reports received to date gate for both equipment and road¬ ciated, Js that, the current proforma earning power of the in¬
and indicated with respect to the way,
.'"1 •'"C v;
forthcoming August reports. / Y\
The large gross expenditures for dustry is, at current writing, es¬

from

roughly,

65%

est

ex¬

dollar being absorbed by

revenue

labor,

operating

of

to 52.1 cents (the high¬

rose

record

on

normal

1920

below

48

dollar

the

excepting

ab¬

As intimated

year) but receded to
of each revenue

wage

last

cents

and

dicate

<

ficiencies

on

detailed

full

effect oLsuch rises in labor costs,

output per dollar of wage has suf¬
fered by reason of the very steep¬
ness (the "labor ratio" going from
and

1946, 1947, and now
Coincident

needs.

increased rates of wages, of
.

further

a

above),

in

and

by the

years,

which trend still is
currently ac¬
celerating. The rate*of this growth

has been

well-nigh spectacular. In
1941, about 80% of freight traffic,

The

annual

expansion in

■

cate the trend of wage costs in re¬

Coal-burning steam locomotives
propelled about 64% of the total
train-car miles in 1941.

passenger

in May,

but

1948, the percentage

tive power as well

ficiency

lation

Better

on the part of the roads.
operating; and
signaling
technique^, utilization of larger
equipment and heavier pqwer. the
straightening of curves and the

during

the past 12 years and the trend of
pnit physical, output per worker

during the

period.; Inasmuch
a major
portion of (direct) transportation
expenses, the so-called transporta¬
as

same

labor costs constitute

tion

ratio

guide

is

indeed

elimination
efficient

valuable

a

of. grades,

loading,

and more

all have aided

in trimming operating costs, or at
worst,

to the extent of labor ef¬

as

holding down the adverse
a min¬

effect of such increases to

imum.

ficiency being disclosed by any in¬
dividual carrier, or the roads as a

connection With

In

such

improved efficiency, it is most en.This latter ratio is the couragingto-note ,not-nnlythe
only one which affords an up-to- large amounts of additions and
date check upon current develop¬ betterments put into the railway;
ments.
properties during recent years, but
The subjoined data would indi¬ also .present indications of even
whole.

cate

that

ciency

the

was

that thereafter relative labor costs

rose} sharply to. a, pea k in 1946,
with some improvement evidenced
increased

for

rates

ther ■-reflection

proved

in

and

In view of

1948

relationship

be

of

000

compared with additions, and
totaling $549,000,000

in 1946, and

im¬

between

to $847,000,-

rose

betterments

fur¬

an

betterments to railway prop¬

erty during 1947

freights and

other items, there should

annual average of

an

$463,000,000 in the 1939-1945 inter¬
val.

la¬

Gross expenditures on equip¬

bor costs and revenue intake. Al¬

ment. alone, in 1947, amounted to

though the latter

$561,000,000, constituting twothirds pf the total . amount; indeed,
it is interesting to note that such

dence

better

to evi¬

appears

"con¬

management

trol," the statistics of physical out¬
put by labor, while disclosing im¬
provement in 1947, still admittedly
leaves

improvements to equipment alone
exceeded the 1946 gross expendi¬

great deal to be desired

a

for

tures

both

equipment

and

•

•Index//

/■
;

.,

-

j •I. /
i

l

f

Traffic Per

Miles

Man-Four

Per

1936. i—i"1

Index

ISTon-Miles

-.V '/

JTon-

.'■» Per
Dollar
of

Employee

1937.

/'

42.89^

;

1939. i__

100

354,904

1940.„.

105.2.//

'

362,650

1941_

44.78

i

178.6

•j- 36.25
-"38.19

44.il

115.5

416,804
501.996

Z

150.9

536,488

148.1

521,104

139.5

-

/

139.6

1943.

479.745

:

-

ioo.o

.

100.3

190.0

2942.

35.49

"

212.4

43.19

37.06

33.20
-

; :

36.89

113.6

34.93/.
•

41.11

104.3

/

217.6

V~

121.8

20S.5
191.1

t

126.8

•

/

129.1

1135.0

*U.

'

Sihriimtf y

i><<•>■

' 've.®-

'

S.

-

''

435,517

V'

484,253

Department

of

Labor.

141.9
150.5




'!
;

•••'•

30.03 *

;

29.66
31.51

'

33.88

160.2

by

payroll
-

52.12

42.12

t47.63

40.03

'•152.3

.

tEstimated

operating expenses
(excludes
I Partly estimated.
§Data from ICC.
to

annual

aspects, on balance; bearing
industry

the

on

this

writing, would
appear amply to justify a reason¬
able
optimism on not only its
equities but also with respect to
at

many' Of
its-- bonds, particularly
those selling at-marked discounts
from par,'and especially the as

not-wholly-seasoned

yet,

mortgage^:I(contingent.
bonds.

income

interest)

:•

•

.

-

"

Six iStepiiOiStability

''; ' v *,h'

,«*:i

-

I'

U.

••

k-

S.

;♦

Department

of

capital
>//'• /V?

chargeable

to

Commerce.

ported fully
mittee

the railroad industry,
viewed by prices for;its securi¬

as

has

reflected

by the House Com-,

Un-American

on

mittee

reported to the Eightieth
Congress in these words:
1947

tarian

the

in

this

find

we

bridgehead

trenched

totali¬

firm!y*;■

en¬

the labor movement,

government, political parties,

the

radio and films, the
schools and colleges, the churches
and social organizations. Its in¬
fluence is fir out of proportion to
its membership/- due to its dis¬
cipline, 1 its control of strategic
posts in mass organizations, and
its

press,

ties

with

the

Soviet

ment."

Govern¬

~
,

Communists

despise our Ameri¬
can system of free enterprise and
ordered liberty under law. They
have
nothing but contempt for
bur;American way of j ustice and

'/They inock!and jeer

aspira¬

cur

Communism

only

govern

can

with the tools of tyranny.

Communism is not for America,

driven

ing

own

latter phase of the war
through the initial months of

1946, there have been few apolo¬

gists

perhaps fewer enthu¬
siasts for the industry's bonds and
equities.
And, but little credit
and

seems

to

have

been

accorded

to

1

•

,

have grown even more vocal dur¬

and

;

from

And

.

will

government

truly be

■>

places in

high

our

America

the road to stability.

on

when

inaugurate

we

a

Republican Administration in
Washington next January you will
the

see

housecleaning

greatest

physical feats performed by
industry during the war and
since cessation of hostilities.
From

the standpoint of funda¬

mentals, the outlook should make
for confidence.

tion

basic

is

country—in

Mass

the

to

transporta¬

needs

in

of

this

The
railroads still furnish the cheap¬
war,

peace.

est medium of general mass trans¬

The attitude on

the part

of the regulatory authori¬
ties, especially the ICC, appears to
be

one

of wholesome understand¬

ing of the industry's needs and a
willingness to take prompt and
generous

action in line with such

needs. / Even
and

account),
pear

the

to

be favorable.

would

ap¬

Increased

Nation

new

and

end.

"

in

coddling

Washington is

"

.

.

Reestablish

;

-

,

Sound

a

these

five

a

of

/

,

are

sixth

to

stability. The sixth step is *tov re¬
establish

15

long

be

a

it

a

a

in

terms
a

of

man

today. The

has

mon

It

mathemati¬

was

better of!

earning $70

the

purchasing
we

mood

not

can :

accomplish

the

American Program with invective
and
name
calling. But we can
make

this

died.

the

land

where

hate

verdict

The

of;all human
history is that constructive works
can
be accomplished only in an
atmosphere of good will, coopera¬
tion.:, and

national

,

elements

unity.Theses
at

are

America today.

The
new

The

in

hand

.

era

soon

forgotten.

fear

of

be gene and
Administra¬

tion in Washington will not prem¬
ise
magic.
But
it
wJl
offer

constructive

competence,

fidelity
and

clear-eyed
for

nation

energy,

American v principles,

to

pose

vision

and

pur¬

strong and determined

a

moving

along

once

more

the road of peace, progress

on

sustained

[.That

prosperity.

is

the

we

shall achieve

and

•

no

our

<

of

destiny

true

America and I have

doubt that

goal.

;

■

,

■If Our people have kept most of

can

those which

liberties;
we

All that is

heritage

they

.
,

shall restore to them. ;
a

part of the Ameri-

we

r

shall protect, de¬

We

ask

only that the scroll cf

history shall record of the DeweyWarren Administration
deserve well of the

that "they

republic."

power
a

Marxer & Co. Adds
y

(Special

60-cent

can

*'

currency

not

maintain
__

Financial

MICH.

—

Chronicle)

&

Marxer

Co., Penobscot Building, members
of
the Detroit
Stock Exchange; ?
have

added

Robert

J.

Notes

to

their staff.

Leo Roseler Adds

dollar

>
*

■

The

week

in terms of

power.

to

dDETROIT/

is in Fed¬

difference

of today as measured

But

The

f

sense,

We

(Special

sound

problems

our

manner.

country has turned from
political magic to the surer ap¬
proaches of work, thrift, and com¬

more

solved.

purchasing

taxes' and

1940

direction at least to

realistic

We

workingman earning

week in 1940

$35

eral

It has created

than

demonstrated

cally that

than

currency.

.

floating currency for

years.

problems
can

sound

a

have tried

equal * to
the
task
spirit of confidence

fend, and maintain inviolate.

pre¬

step

-

American

the

at

Currency

steps

the

to

paratory

the

point of facing

in

;

All

of

sense

the

have lost

an

of

in tomorrow is abroad in the land. ;
We have regained our
strength

out of Ireland. The day of
Communists

determination.

> energy,

are

ahead. A

their

Congressional

legislative status

the

resources

since St. Patrick drove the snakes

the

this

and

and smear will

tions for peace.

-

periods, especially in
view of
the
inflationary back¬
ground surrounding not only this
but all industries.
Except for a
relatively short-lived interim dur¬

jOBut

;

basic

suspicion (if nothing stronger), and the
logical place to begin to
on the part of the whole gamut of
uproot Communism is in the gov¬
investors, ranging from conserva¬
ernment agencies in Washington.
tives to speculators.
There have
the
subversives
are
been legions
of detractors who Not until
recent

honeycombed
with
subversives;
whose first allegiance is to the f
Kremlin. That is why we face six
steps to stability instead of one.

sup¬

Activities,
permanent/part.; of * the
Legislative"- Branch. /That. Com-,

continuing

a

F.B.I, is

now : a

"In

government departments are

upon; our
v:

On this point the

For years,

ties.

deepest inroads

.

•

1946.
1947.

^Charged

41.43

127.0

176.3

i

38.68

r

1945.

senger'.car.^uipment//-

ably optimistic.

•

1944.

pas-

portation. Dependent as they are
high general business vol¬
umes, their prospects, so far ahead
as may be visualized, are reason¬

34.68'/o

46.56

181.9

166.5
•

make heavy

as

freight and

new

upon

Class I

Revenues

183. *

323.447

308,944

•

Ratio

1/ All

Operating

(1939^—100)

tation

1

Per Hour

!

1938.

f

Compensation

j;

Wages

318,005

"

Transpor-

tCmployee

...

Straight Time Compensation
'

(1939=100)

V

i

Revenue

additions of

larger improvements to; come.
|
lit is; interesting to note that
ing the
gross expenditures for additions

high point of effi¬
attained in 1943, and

thereafter during 1947.

level of net railway operating

come

national life."

in- the of nearly $140,000,000 (based upon
had dropped to around 35%/ On
parleys between the Brotherhoods 1947 volumes).^: Additional peti¬
the other
hand,- the diesel propor¬
and the Managements indicated to tions
pf like nature may logically tion of such passenger traffic rose
start later this month, the current be
expected later this • year on from about 8% in
1941, to more
addition to wage scales may center certain other
commodity classifi¬ than 40% in
May, 1948.
Indeed.
around an 8Vfe% rate based upon cations
that
can
bear
rate -in¬
April marked the first full month
wage boosts obtained in other in¬
crease^ especially in the event of on record in which the dieseldustries.
It has been calculated further concessions to the indus¬
hauled
proportion of passenger
that this would burden the rail¬
try's employees. with respect to train-car
mileage was greater than
roads by something like $319,000,- wages,
in the case of coal-burning steam
000 per annum (the net additional
locomotives.'; As may be easily
Projected Capital Expenditures
costs, after taxes, would probably
surmised, .the relative percentage
be brought down to $240,000,000).
The disparity arising from dis¬
It has
likewise been calculated proportionate increases in wage, ris£ in the use of diesel-electrics
for yard service, both freight and
that a 5% further general increase fuel and supply costs, on the one
passenger,
has been extraordi¬
in
freight rates, f if authorized, hand, and the increased rates on
narily sharp. In order to offset in¬
would just about offset such added transportation services sought for
creased operating costs the roads
and attained, on the other hand,
expenses.
should continue further their pur¬
The following tabulation dis¬ have been made
up in part, as chases of diesel-electrics for mo¬
closes several indices which indi¬ mentioned above, by increased ef¬
reyenu.es,

not

drastically altered over .com¬
ing periods. The indicated current

their

nearly 11%.

anticipation that,

to ; gross

costs-is

too

•

700,000; from coke, $5,600,000, and
$10,400 000 from iron ore—a total

.

the

of

from coal traffic would,
it is calculated, amount to $123,-

•

.for

need

revenues

the greater require¬
ments of payroll tax payments.
There seems to be some basis
are

,

recent

.

prospective for 1948course,

of diesel power

during

1947,

,

1943, to 52.1% in 1946)

wage rises in

in

the ex¬
earnings share results of
and potential for not only
1948, but also 1949. The favorable

exceedingly favorable
levels, providing that the present

-

repetitive succession of such

with

balance of rates and

use

industry

said to discount fully

contrast, the diesel
tions' that would) result frorri -any* proportion-of the total irose from
third-round wage; -negotiations). less than 1% in
1941, to 12.37%
(Continued from page. ,8), 1
Last week <(Aug. 27),- the Toads, in 1947, and increased above
20%
tor
of the F.B.I., who has said budget is brought under effective '
filed a petition to raise rates on in
May, 1948. ; The year-to-year
control at a tax level the people *
coal, coke and iron ore, by about gain in diesel use for the month publicly:/'•*>v//
"During the past five years can afford. Nor can we restore a
10%, in fulfillment of a part (less was 75%; the year-to-year loss in
American Communists have made sound currency so long as .the
than one-third) of their overall coal-burning locomotive
use
was

'

.36.9%-in

believe

carriers

equipment reflects, in part, the
sharply increased and much-pub¬
licized

be

cellent

tablished at

the; latter figure had dropped further
more-swiftly-rising cost categories to 61 % for the five months through
<without allowing for the addi¬ May, 1948. In

the part of the rail¬

roads have offset, in part, the

undoubtedly

of the individual roads, earn-'
ings performances on the various
equities often partake of startling
dimensions. Currently ruling
pricq
levels, on average, cannot fairly
ups

-

ef¬

operating

while

further

Press dispatches in¬
the

that

themselves

1941-1945, inclusive. There is no
question but that the substantial
-increases in ,wage scales have re¬
sulted in considerably higher unit
and,

would

any

in¬
totalling $1,119,000,000 on an
basis (the lower ICC al¬
general boost in freight rates of
ternative ,' calculation
around 7%; or upwards of $600,- as measured in
d iscussed
gross ton-miles of
000,000, in order: to; narrow some cars, contents and cabooses, was above) for a "constructive normal"
of the indicated lag between ad¬ handled
year compares favorably with the
by coal-burning steam
vances
in revenue -items
(even locomotives, whereas, in 1947, the best earnings periods the indus¬
after receiving all the increases percentage was down to
Years in
67%. This try has ever enjoyed..

ingly heavy volume, the labor per¬
centage of gross revenues had held
below 42% during the war years

costs,

rise

freight rates.

exceed¬

of

because

.

above,

force the railroads to petition the
ICC- for
further
increases
.in

year,-despite the fur¬
ther increase in wage rates.
In
contrast

a

compared with the 39.10%
for

In 1946, the portion of each

penses.

37.57%;

was

43% to 50% of
operating revenues and constitute,
normally

a
1 '

until the Federal

to

The

Financial

Chronicle)

JOSEPH, MO.—J. Richard
Jones has joined the staff of The
Leo Roseler Co., 110 South Filth
ST.

x j.

Street.

(

,

'.

v

market

in the next

tion years,

By WALTER WHYTE

27.

the trend has been
half of the
Signs indi¬

reaction

are

was

when

the

around

turned

and

plummeted to a new low for
the past few weeks. Ordinar¬
ily such a whip-around would
be disconcerting if it hadn't
been for the fact that the buy¬

reaction of last week

brought
every stock in the list into the
buying zone. It was disquiet¬
ing^ of course, that a few,
stocks were threatening to
break through their critical
levels!, though at this writing
the threat seems to have been
removed.

all sorts of

are

around

break.
time

the

to

waste

your

you I know
don't.
All I

by telling
I

reason.

rea¬

explain this

won't

I

Here

Above

before

*

: ♦

*

_

the stocks you now

are

Chronicle.

They

presented

are

hose of the author

have

now

list

watched

for

>

They jhave
general

Dodge.

Phelps

considerable competence and con¬

tinued to make effective

mechanism
so *

essential

of its

use

formation
expansion," the

capital

of

to

1947 amounted to

$425:

increase of 28%

over'

an

and

64%

cf

1945 average.

Similar

made

adjusted comparisons are
cash

for

procedures,

become

lar

is

determined

the cost of

by

Conclusions

ments of the 30 oil

invested
and

companies

pro¬

earnings, $821 million;'
financing and other-

$388 million.

worthy that in the

——(In Millions of Dollars)-——

...

,

Total

income

Net income in

%

of

common

Dividends in

%

of

10.483

,*5,625,

763
10.1%

11.8%

—*__

^

*6,162

-

6,786

•

1,219

total income

1941-1945

7,549

9.264

surplus-——

537

paid in cash

and

i the

industry

income

assets—United

States.

(6) The

Yorlr

figures

Total

to

Current
-*

-

liabilities

4,325'
1,690

i

.

•

a

,

,

c*n"k.

Chicago

close

1947

working cdpital_j_n__;_^______^4_2J,Ratio of C. A. to C. L

,

of

<A**ndate) 1
Exchange
of Trade

14 Wall

Street

New York 5, N. Y.

7-4150

Teletype NY 1-928

Private Wires to Principal Officet

v

■

San

of the;
.

(7) The borrowed and invested,

i

(equity) capital employed by the

the close of
1947
$10491 million, of,
which $1,437 inillion
or 13,7^were
in the Tform of " long-term;
debt.
This represents a rise from;
at

group

amounted

to

^

1946,

longer

no

are

remains

but' still

favor-'

a

.I

able debt ratio.

call for special inter¬

(8) The

productivity

of

2,460

1,046

2.6%

2,089

.

'

3.0%

3.0%

NET- INCOME

Capital expenditures:
production

,

566

1400

■£.

.

Transportation
Refining'
Marketing

:

812

1,077
297

157

402

201

277

•.

185

120

''

23

n

22

9

.

■

•

i'

•'i-

i»

*

'■

"v'f

1.377

2.076

Production

in

%

of

total

51.9%

—

1200

946

59.0%

•

V,;"5

■

•3,136;!.'

3,548 :

77T

979,

Refining
Marketing
OtherBTLwIl:--

1,278.

98Sv

.

.

;

;

.

v

706,

.

1,009

,u
'

-

1,139

s

V

tooo

Total:

7.069

%

s:<-\

ACTUA

i

5,206

52.5%

46.7%

total___

of

5.968

:>!•>'

•

1

•

800

7:7%.

1,437

("Invested

Total

J w.a.

.

J

5.,r

;:!r

in

%

of

8,002

6,838

9,155

7,902

10.491

total—

•/.

.

-

12,6%

13.7%

8,5*9.

,

*

ic

\-

•

#

"
.

3.

:

•

.

SI

*» •. *♦

13.2%

JL

5a

.569

9.3%

r

2,534

2,725

\ Foreign countries_u___—

" :

700

_

,

•

FX

7.6%

>'

HppV

(Thousand Barrels per Day)
:

-/

'

7,50?

792

1,252

production (net):
States

!

;

'

.{Net

United

"

!

z

13.5%.

*

.

■

-I
9 484

tAverage borrowed and invested capital
• incomei__^_—_____
1 Return on borrowed and invested capital.

•

I

1,064-

9,054

^

capital

1,153"

fd

'•r.rV-

-

o
CapitaU_———
capital__l

'

•

t

•

114'-£

t

p
.

i

,

■893
'

112

125

in

"V.

■

r,;

I

2,484 4
•

Production

!•-•;

t

;

Transportation

■f '

-'J:.

' ;

i"'fy-[x0'!0 .f

'

v'/f

Net Investment in fixed assets:

Production

l
s

'■'/••iv"' "V:'

1

59.8%

t

jM

'•*?'' *'

'i.JVz

r

'

'

Total

J.
'

■

59
-

Others
'

?r7;

r-"

192

'

;

2,118

•

'J

V1

>JUSTE J

419 :

645-

2,537

Exchange

COrtlandt

!

times

two

was

the
group's capital can no longer, be-;-:'
measure^ - sajtisfactbrily v by f t^v!
(2); The -total d.ollar income of conventionally calculated rate of
return on borrowed and invested,
the group "registered a new- high

3,135:

1,227

3,179

Stock

Board

liabilities, how-'"

current

dropped to 2.6 from 3.0 at:
Dec. 31, 1940.
Working capital at:
ever,

{

Net

,

3,687

Z.635

_

'•

"■

.

calculations.

\\ 8,524

Current assets

its

by means of relativity

pretation

1,365

on

Vrehavpe

Fraud sen

increased

group

working capital in 1947 to $2,635
million from $2,460 rrillicn at the
close of 194-3„ Its ratio of current

long-term debt and 25%
total income fo^ 1947,

strictly comparable with the prior

48.1%

7,159

Members

New

able to con-:
high-degree1

was

its record of
capital formation.
tinue

the

259

43.4%

34.9%

-

pect of the business, but the 1947 Jhe 12.6% prevailing on Dec. 31,}

8.7%

331

425

.

of;

capital
requirements
inflated
construction
costs,

vides the basis for the following

dollar

dividends

net

■; 1946

1947

deductions_i.^rr«„>.^

Net income'carried to

Preferred and

1

-

Total costs and! other

Crude oil

York Cvrh

It is note¬
presence;

enormous

J

San

1941-j

outside

sources,

assets

Analysis of the combined* state¬

(1) The rise in operating and
capital
costs,
characteristic
of
recent years, accelerated in- 1947
and further, distorted the reported
f.nancial figures which are of ne¬
cessity measured by a changing^
dollar yardstick.
New highs were
reached in practically every as¬

Average

Borrowed

New

the

over

After adjusting for

pended were derived from: capital;
extinguishments, $867 million; re¬

dividends, capital
on
capital

return

,

Borrowed

Schwabacher & Co.

>

s;(4) The actual cash dividends
paid by the group to its stock-:

1945 average.
Of these expend!-;
Stures,; $1,236 milliqri jor 60% • were;
jthe; purchasing power of the dol" absorbed:by the rise in construe-;
lar has declined since the 1935-39 tion costs from' the prewar base'
base period, the study points out. of
1935-1939.
The
funds
eX-'

.

Orders Executed

pur¬

:

($1,219 million, an increase personal income taxes and for the1
$450 million, or *30%. over rise in living costs, the 1947 divi-:
1946) expressed in prewar dollars dends are equivalent to $235 mil-1
would be $648 million, an increase lion prewar!^
of $139 million, or 27 % over'the j
(5) The capital expenditures of:
correspondingly
adjusted figure .the group in >1947 ^totaled $2,076
for 1946.
Thus the reported <net million, an ;increase of '51 % over'
Incdhiefor :i947^cdiifeined^eom
T946 and of 110% over the 1941-1

expenditures,

PANIES, YEARS 1947 AND 1946, AND THE AVERAGE

.

:

1935-1939

on

194T

as

FINANCIAL AND OPERATING SUMMARY OF 30 OIL COM¬

!

Pacific Coast Exchanges

sharply

of

resume:

standardized

s

§; Securities fill

the;

result,

of

only.}

authors report. 11
A financial record, however, is
consistent only as long as the pur¬
chasing!^
the dollar is
reasonably stable, the survey con¬
tends.
"In
times
of
inflation, gories.
marked by rapidly rising prices
"Thus, the dividend dollar is
and costs, the accounting figures, affected by income taxes arid >the
being subject to the limitations of cost of living: the operator's dol¬

been firmer than the

Pacific Coast

based

*;As an example, the:reported net j 1946

income of the 30 oil companies in

This

dollars

mil->
60%:

over

Dower.

million,

"For example, the charges for
and capital charges.
depreciation, depletion and amor¬
At the close of 1947, the survey
tization of fixed assets, as well as
the valuation of investments, are shows, the 30 oil companies em¬
Calculated' on the basis of original ployed $10,491 million of capital,
costs and therefore are expressed 86% representing invested capital
and 14% borrowed capital.
"Acin past dollars; whereas gross and
net income, dividends, and most cordmgly, about one-seventh of
the total capital employed. by the
of the other financial items are
measured in current dollars which petroleum industry is in the form
not only have altered in value, of debt, a low ratio conducive to
economic
stability."
but also differ in each of the cate¬

completed the second year of in¬
creasing postwar inflation with

of

leadership.
These are: Bethlehem? Gen¬
eral Motors; Kennecptt; In¬
ternational
Paper; ^ Dow
Chemical; Inland Steel; Elec¬
tric
Boat; 5 Lockheed, -and
•

in

million

facts."

veals that the petroleum industry

of stocks which I think should
be

ex¬

purchasing power,.is equ v->
to
earnings of only $648

chasing
:

127%

of

average.

holders in

the dollar.

Foreign countries—
a

'

expressed

Adjusted Comparisons
;

the, capital

replacement fand

and

1941-1945

con¬

distorted by the shifting value of

Net

bought at what up to
now
seemfairly reasonable
prices. There is another list

1946

alent

close approach to the actual

in¬

barely,

was

generate

for

the

and

the group amounted to 81,219
lion in 1947, an increase of

at

lower

precise accuracy," the study

and

aver¬

was

pansion of facilities;
\
:
(3) The reported net income o£

cedes, "but it is felt that they do
reflect in a practical manner a

(Continued from page 13)

*

stocks

needed

over

record and

*

adequate to

realistic comparisons, there¬

the process of capital formation."
"On the whole, this study re¬

war

isted.

creased-volume

"The adjusted figures cannot have

Buying Power Cat Real 'Earnings'

\

breaking out is
behind this selling. Contrari¬
wise, if it is, then the selling
has been taken very nicely,
which if anything points to
greater underlying strength
than is generally believed ex¬

arrive

to

the 1941-1945

over

This attainment
result of higher prices

age.--

lar. based on the 1935-1939 indices

mar¬

article do not necessarily at any
ime coincide with those of the

about

You

dollar

the

$10,483 mil¬
increase of 39% over 194$

an

survey presents some of
the major data in a table and on
charts in terms of a "stable" dol¬

picked

position but

FOR 1941-1945

*

lion,

and 70%

fore, the

*

wasn't

list

for financial

you

'

♦

#

this, I don't think the hoopla

-

influenced

ponent amounting to $571 million,
which represented the extent that

know I read in the papers or
hear on the radio. I will say
a

in 1947, amounting to

capital

the

is

With

attempt

Paramount, 23-24, stop 21.

be another

The fact remains that the

There

value.

in

more

convinced that

y;'\~

which slip over the cliff so
easily. They scare me as well]
as they do you.

sons

ent

15, and

16-17, stop

bought

ing suggestions had 'presup¬ have, their buying points and
posed lower prices: Though to
be frank, I don't like markets

>

and

dollar

by construction costs—all differ¬

is

column

print

in

M

business,

investment

ket action.
So long as stocks
everything
don't go below their stops I
fine, remember that each
market must be judged on its suggest you hold. <
g
%
*
own
behavior.
If the stops
break in fthe .stocks you're
More next Thursday.
—Walter Whyte
watching, then the advice to
get out is to be followed.
[The views expressed in this

present unsettlement.

market

doing

LudSteel, bought 29-30; stop
American Airlines, bought
stopsr Alleghany

lum

move.

up in the second
brings all year seven times.
stocks in list within buying cate that this will
area.
War talk blamed for one like it.
But

hardly

CHRONICLE

FINANCIAL

&

Armco, bought yardstick varying both in time
and space, it is obvious that some¬
29-30, stop 27. V Burlington
might be ■ interesting \o
thing akin to the physical theory
Mills, bought 21-22, stop 20. of relativity must find application
note
that ■ election
markets
Copper, bought to economics in. times of infla¬
also
have
their 1 seasonal Inspiration
19V2-2J) Vir stop 18. Loew's, tion."
cycles. Of the past eight elec¬
In
an

Walter

week's

.

714-8, stop 6.

Markets

Last

their

show

and

potentials
becoming the bellwethers

of

Tomorrow's

Market

COMMERCIAL

THE

(1126)

30

Francisco—,Santa

Barbara

Monterey—-Oakland—Sacramento
Fresno




Crude
■

run6

United

"

to stills:

*

States——

-•

.
'

I,——

!■;■

Total '

604

operating Income and costs
purchases under government directives.
minority interests.

v

^Excludes minority interests^
.:§3efore deducting

interest charges.

'

have

" •:>>

!■.

4,749.
„

-

sales

.

| ^

1

■

■

0.

y-

0:]

and
''

i.fr''".''

" -v
.»

^exciude

i,?

^

4,442

adjusted' to
- ' % <v.''

been
r

'!!'

'-y

436

:

——w

*Gross

(Includes

3,319''

4.165

Foreign^ countries---,—.

Trend
,

:

;

s

off reported net income of the 30 Oil Companies compared with
result* expressed i'n prewar dollars, by years, 1934-1947-.^: -

adjusted '
-

;

Volume 168

Number 4734

THE

"capital, because this ratio is based tic

it is stated

as

upon two factors measured in dif¬

higher

ferent

than

kinds

dollars.

of

;actual return for

the

If

1947 is adjusted

|

(9) The capital extinguishments
the

million

$763

in

1947

million:"

charges
j

;

at

costs.

current

l

-

inadequate

were

charges
tinguishments fell short

fi-|

vested

rise

in the

in

»

•

increased

to

stills

for

65%

respectively

1946.

over

of net crude oil

1946,

The ratio

production to runs
operations

domestic

in

1947, the

in

same as

^ ' "4 ^
L
7 , ,\Y Vi
.(12) On the whole, this study

try completed the second year of

stop-gap

bills thus enacted I
privileged to be the sponsor

was

of

and

one

who

Senator

later

was

Chairman,

of

Committee,
the

other.'

to

McCarthy,

become

Housing
sponsor of

the

was

Vice-

Joint

the

Y.;;■ ;..y ^>; YyY

y r.

.

With the setting up of the joint
Housing Committee and my elec¬
tion

Chairman I set out to get
facts. These facts are con¬
as

the

tained in

the

report "Housing in

America" which

eventually played

considerable part in the discus¬
of housing leading
to the

a

mechanism of capital formation so
essential to expansion.
Its finan¬

enact

to

emergency

,

increasing postwar inflation with
Thus, the^ considerable competence and bonabsorbed in tinued to make effective use of its

was

and

'

reveals that the petroleum indus¬

sion

been

plus' of vacant

changed

and

raised

from

to $8,100 for the
Likewise under Title
limits have been raised.

a

"

cial y

results,

cost

However, mortgages under 207

are

held at 80% of FHA's declaration
of long-term value.
y,
i,
The authors oi H. R. 6959
pro¬
vided special treatment for
coop¬
eratives.
Section 207 provides for

90%

loans

generally

(40

cooperatives.

.Here

again,

how¬
fig¬
of Dec. 31, 1947, whereas
interest rates are limited to 4%.
:
The much
disputed secondary
replacement

ever,

costs

are

as

markets

CASH

DIVIDENDS

continued.

From

the

latest

4

v...-.'-"•;

V.7' •'

report which I received from Mr.

Changes in
Y The

Gray,

Building

Y' 500
}

•'?»

}.'■

v.

A.F.L.

Y".

>[-"i--y^:"^

Presidentr of the
Department1 of

Trades

it

is

indicated

number *

r

lY;V

,.J

' "

'

'

*

•Y
5

ot

AGTl)AL

Y'YYY'YYY'.YT

5

Y.

YY:Y:Y:\

f

Jni

-J

200

'"ilh

•/ivir!-

j

!YYf:

Vv

V.J

2

y/Y^-v

"

;

? Jy -'Y

i1;:

a *

RE7V0jNED B' f

•

100

and

We were directly
responsible for hastening the dis¬

STOC) (HOLDE

solution

Yv'r.rW v'

i

Our hearings
destroyed
several

grey, markets.

| YYft Yr

1934 '35

toward

tendency

a

ill-advised exports.
exposed

V

<

i ho

checked

we

s

/VYy.y-'''Y-" ;; *

yj-V

shortages in certain
Through our contacts
Commercp Department

materials.

r'»"
••

critical

come

Y*.

.'

'-"Vvy •

is

workers

materials,
competent
workmen, available capital and
complete absence of partisanship.
Our,-Committee helped to over¬

Y-YV YVf.'vV%y;W'. Yyy/r'/ci

o

trained

sufficient

-

WUSi

■•z
-1

H
/'mY'.VV

'

V"

300

O

•

'

PAYME.NTS.

increasing

and that by
and large organized labor regards
housing just as it should be re¬
garded, namely, as a matter of

',y

-

400

of

steadily

the

that

of

Y

1

i

'¥< ^

'40 '41

'38 '39

Y-V.'

'43

Y#

'44 '45

i

i

'42

monopoly. We ac¬
celerated some price reductions in
lumber and made possible a freer

'46 1947

distribution

of

such

products

as

gypsum.
Trend

actual

of

cash

of the 30 Oil Companies' compared with indicated
stockholders after
deducting
personal
income
taxes
and
adjusting' for cost of living, by years, 1934-1947.

retained

amount

after

under the light of experience. The

Census says* that nor¬
mally only 80% of All newly
married couples go into homes of
their own so- that doubling up is
Bureau of

j

to

.

considerable

a

extent

due

to

desire. You will see from all of
the foregoing that we have gone,
a long way toward liquidating the
.actual
housing Y shortage. Even
assuming a continuation of busi¬
ness at its present high level, this
shortage will have been ;eliminated in a minmum of two to three
-

.

•

and

years

a

maximum of three to

Policy

•

.

.

.

;

...

..

Where then, outside of political
'

•

ideology; is there justification for
further expansion

ment
*.

in the govern¬

ownership and operation of

housing?
You will

hear the Republican-

for

nouhced

Congress

80th

controlled
*'

its

failure

to

;

the original TEW bill, the
intent of which has been
to extend government ownership

United States to

National

a

policy

continue

to

increase

during

the

balance of 1948, through 1949, and
that in 1950 the political aspects
of the housing program will have

billions

Of

tional

dollars

of

debt. It

most half

sidies

the

to

Na¬

would through

century

a

and

abatement

burdens

al¬
of sub¬

more

growing

ever

have

added

tax

heavier

all productive classes

on

of

citizens.

materials

promise,

Through

competition

labor

and

it

would

i

♦

-

*;. f

-*

f


http://fraser.stlouisfed.org/
r
Federal Reserve Bank of St. Louis

.•

■<»

housing.

v

and the entrance of the 81st.

dle

of

had

a

of

The

the Summer undoubtedly
retarding effect on the rate

construction.

1951,
901

favored class before

one

There

heavy back log of loans in

was

a

process,

whereas under Public Law
direct

classes

parent in

results
are

beneficial

now

increased

to

will

ap¬

numbers

be¬

and

fore Christmas of this year.
Public

Law

in

Public

Law

901

of the

some

Law

901

it

are aware

that

President Truman's grand gesture
in housing, now known as the

program,
of

Consequently,

the

xollapsed
79th

one-

of

stimulate

rental

which

tered

to

excess

ance.

I

have

an

works out.

to

As'

the

viding

90%

carried into

the

commitment

new

be

sub¬

of those

now

itself

very

savings

1

with

Congress.
the

$

first

represent in most
of married life. More

care

was

and

is badly

for the newly mar¬

ried,

particularly the * Veterans.
housing will break the
back of the housing shortage. Con¬
sequently 901 revived the 90% in¬
Rental

surance

under Title VI.

under the

new

the

vided
of

Mortgage

603

the

the

old

far

vides

as

is

owner

new

the

However,

608, mortgages

are

Republican

Party is
the Party

Party

—

it

is

ard

defense

ex¬

by

and

economy

*

sound

business methods in the adminis¬
tration of

Title

2

National affairs.

our

pro¬

more generous

support, Mortgages on 4%% loans'
may be insured up to 90% of a
home's

long-term
value.
The
mortgage limit is raised from $6,000 to $7,000.
Whereas a builder
formerly could obtain $8,600 in¬
surance on a

$10,000 house he

obtain insurance

now

on

a

can

$9,500

mortgage for a house appraised
$11,000. This I regard as a sub¬

at

stantial aid in

Further

a

period of higher
American Economy,

assistance

is found in
the retention of that
provision of
Section 203 whereby a builder can

ner

rent

being

attacked

as

N.
is

compromise
but those compromises for which
it

is

my

.

the

advocates

of

government

ownership
and
operation
took,
namely, this or nothing.' Public
Law 901 is expensive and infla¬
tionary, but it is only fractionally
as
expensive and inflationary as
be

housing"
much

the

TEW

satisfaction

bill

We

program.

that Public Law

can

of

out

901

"public

is

at

901

the

fact

providing

once.

Law

take

Further¬
maintains

principal of

individual enterprise and the net
of its passage is to arrest

further extension of Federal Gov¬
ernment

ownership and operation
of housing, of which there are al¬
ready in existence 900,000 units
many

It

.

City, The—New

Y

is apparent to

all of

us

that

(he housing problem is not settled.
■

*

M

1

A. Krout

Columbia University
Press, Morningside Heights, New
York—cloth—$3.00.
.[
—

How Tax Laws Make Giving to
Charity Easy—J. K. Lasser—Funk

&

Wagnalls, 153 East 24th Street,

New York 10, N.

Register of

Companies
Stock

cial

Removed

Exchange

Year

Skinner

Y.—cloth—$3.00.

Defunct

Book

and

(London)
1948

4. "

Other

From

the
Offi- '

Thomas

—

&

Co.,. Ltd., Gresham
House, London, England and 111
Broadway, New York 6, N. Y.—
cloth—£1 net.

Report
tieth

on

Y"

the

Greeks—Twen¬

Century Fund, 330 West 42nd

Street, New York 18, N. Y.—cloth

—$2.50.

;

!;,,yy.Y

Securities

of

the

...

United

Government.
Boston
way,

1948

.

States

Edition—First;

Corporation,

100

l- '

v.

I

'

H

'

Broad-'

New York 5, N. Y.
,

...

York,

billions of tax

dollars.
v.

with

1898-1948—Allan Nevins and John

effect

representing

Y.

Greater

a

being attacked are due, in
mind, to the position which

conditions

economic

long and short-range forecasts for
the futiire:—Alfred A. Knopf, 501:
Madison Avenue, New York 22,

still obtain 80% loans
up to a top
of $16,000.
Amortization is in¬
creased from 20 to 25
years.
I note that Public Law 901

The—Sum¬
Slichter—report on cur¬

H.

»

f *

the

nor

leadership, would raise our stand¬
of living and strengthen our

pro¬

individual home

substantially

middle
America

privileged poor. It is the Party
which,
under
the
Governor's

one.

concerned

rail¬

made

neither of the selfish rich

term

not

are

our

thrifty

has

The

their

refinancing
the

that

great.

not

firm

insured
and

mortgage

ceeded in the
So

be

can

amount

industries,

our

tremendous

class,

before April 20,
1948, will still make this insurance

under

man

roads, our banks and great stores.
They are the ones that constitute

on or

housing

first before they spend.

housing

who

pro¬

a

an equity in them.
workers — white

or

and

and
the
farmers, the clerks, the profes¬
sionals,
the
sales
people,
the
tradesmeiv^-the men and women

on

was

"little

shop, organized
unorganized. They are

home

law,

real

are

the

are

collar

insur¬

individual

the

are

their homes

hope that it

insurance

the voters

the 35 millions
or more who
have a savings ac¬
count, who buy savings ; bonds,
who carry insurance or who own

'

Public

needed to

Wh#

are

people"? They

ini

owner,/although Section 603

tell

the

Party of the
poor,
but that the Republicans
are
the Party of the rich. The
Democrats justify their claim by
presenting government (ownership
and operation of housing as a
benefaction to the "little people."

ex¬

mind

Democrats

they

They

loss"

open

this experiment and I

would

concerns

years

The
that

realists have al¬

some

readY"stop

more

Such

and localities."

triguing title of "Yield Insurance'?
but

low-rent-housing pro¬
"only when there is need
not be met either by pri¬
enterprise or by the States

can

vate

ready had authority to do.
the

given

and

ance

that

considerable degree on whether
not FHA raises the interest rote
of 4% to 4V2% as it in fact al¬

bears

be

grams,

or

which

aid

to the States for local slum clear¬

build¬

an

that Federal

mends

a

periment

high prices. However,
housing plank wisely recom¬

the

consistent activity in this field Of

Public Law 901 contains

Y
of the

universal

"

construction, although what hap¬
pens after this Fall will depend to

ownership

cerns
the need, as do all of us,
for low rent housing in a time of

immediate and

an

Government

desirability of slum clearance or
municipal rehabilitation. It dis¬

the changes
Housing Act in*

assure

prop¬

Republican
platform at Philadelphia saw this
situation
clearly. The platform
concedes, as do all of us, the

Housing Act

the historic American

save

r

a

of

operation.

The framers

of

who

rental

close

Federal
result

sents the solid and middle classes

this legislation

you

to

ing is to

-V.

Yj

more

tion

Most of

might

You will understand that Public

cases

out of which

1948

stantially in
anticipated.,

would be well to review the situa¬

grew.

in

properly with low cost and rental
housing. Your organization repre¬

901

Before discussion of
Sections

that no lag is per¬
Yet it is the opinion of
so

that this lapse deprived the
country of a considerable acceler¬
ation, in which case the number
starts

•'*

.

16 years the New

disseminated

numbers

and.

building costs.

901

lapse of Title VI toward the mid¬

of

even

VYVYY
,

socialized

many

housing"
program
could not have begun
to alleviate the housing shortage

Wyatt

,

was

transitional
period between the
adjournment of the 80th Congress

ceded that their "public

the

con-

in

At about the time the

•Public Law

however,
ceptible.

Congress passed the original TEW

self-perpetuating and

made

bill, the principal objective

which

have raised prices. And note this,
even the TEW bill advocates con¬

laregly disappeared. However, had

a

I

i£femel*gehcy
socialized housing. It would
have made inevitable the addition legislation, designed; to cbvefr the
of

and operation

of housing. Passage
of H.YR. 6959, now Public Law
901, insures that both rental and
owner dwelling construction will

recommenda¬

those

expanding program of H. R.
6959, now Public Law 901,
and operated
represents a compromise on many
housing would have been super¬
phases of housing with the ex¬
imposed on private enterprise and
ception of the one 6f Goverhment
on government insured
loans for
ownership and operation. On this
private construction. This would
the Republican Party did not com¬
have permanently committed' the

all

single

on

tinuously

pass

5,866,

bill,

TEW

for

1 Housing Operations

;

to

government owned

of

"No Bases for Government
Y

based

Wolcott bill passed the House and
the
Senate
passed the original
of

'

fiye.

similar

this report.

(Continued from page 7)
•

was

tions

The Housing Situation
And Government

of "Hous¬

ing America" there appears a
"Summary of Conclusions."
The
Wolcott housing bill which was
passed by the House shortly there¬

.V

Federal

possible.

In the first few pages

dividends

by

the

tended

manufacturer-con-

tractQr-union

'36 '37

in

net

„

lias

Federal

for

Richard
t

be

sur¬

people
er¬
roneously regard slum clearance
as housing and think of the word
housing
as
being
synonymous
with that, public housing which
can
be
provided
only through

year

mortgages) and 95% for Veterans'

ured

Deal

while

•

has

j.Y

a

dwelling units. It
simple

that for

reason

room-

,

-

will

will not be settled for the

mortgages
in
the
passage of Public Law 901.
removal of which 1 had
showing
partici¬
Because I was only One of a
marked
pated is restored and mortgages
upward
changes from
(10) The - gross investment of 1946^ are revealed to be temperate Committee of 14 I feel that I can insured under both 207 and 608
the group in property, plant and in the light of vastly increased without apology state something are again eligible for
purchase by
of
What I beleive wasv accom¬ the
Federal National Mortgage As¬
equipment at the close of 1947 was capital requirements and with due
plished as the result of our investi¬ sociation.
The objections to this
$14,776 million, against which re- regard to the reduced purchasing
gation. We had the cooperation secondary market still hold
serves of $7,707 million have been
but in
power of the dollar.
The indus¬
of labor to the end that
produc¬ the opinion of many these
set up; leaving an indicated net try is
objec¬
supplying additional testi¬
tivity of the individual" worker tions are nullified
value of S7,069 million.
The lat- mony of its vigorous and dynamic
by the fact that
would be increased arid that a
additional capital is made avail¬
ter figure, however, is not realis¬ characteristics.
greater stimulus be given to ap¬ able for
additional housing proj¬
prentice training. This cooperation
ects.
^4YY

.-percentage of net income paid to
stockholders dropped to 35%.

■

1947

and 7%

ex-

for; the deficiency
of capital extinguishments and the

-

to stills of the group

runs

business.

earnings

think it

not

when there is

able

indi¬

compensation

.

do

aganda fog so that now consider*-

was

requirements by $763 million, almost the counterpart of the
$794 million of net income rein-

-

I

even

2

the

cated
•

Indeed
settled

entire unit.

(

of

predicated on the Federal Hous¬
ing Administration's estimate of
replacement costs as of bee* 31,
1947.
Unit
cost
limitation has
$1,800

(11) The net crude oil produc¬

in

replacements'

^

the

confronted

Congress was to clear away
wreckage of this Unsuccessful

coincidence that of the two major

•

~

with
to

which

80th

the

31

(1127)

legislation. The 80th Congress did
just this >and it was a- curious

multiple of the stated car¬
rying value.
VY'Y
Y'Y ■■:,\Y.rYY

These < 8%

In1947,
for
capital

actual

•

1946.

problems

CHRONICLE

scheme

some

$867, tion and

to

Y compared

in

the necessary

nance

•

amounted

group

purchasing power
prevailing.
The

FINANCIAL

is

homogeneous dollars, the ratio
i.is reduced from 13.2% to 7.7%.
Jfor

now

the basis of

on

&

replacement cost of these facilities

to

;

dollar

that

COMMERCIAL

j

32

THE

(1123)

7v7:^7

7

Department

union

month,

however, a
effective

to

operations developed. This

when the National Labor Re-

'

Rations

Board

that

•

a
<

found that,

under

provisions it had to rule

ithe act's

employees who take part in
'economic' strike, in

so-called

which the issue is wages or; rep^
< esentation, t are
not; entitled; to
vote iri a board election.; J
; * \
.

Washington 'Post,'
sympathetic with
most - of the < Taft-Hartley; Act's
provisions, conceded this was a
crippling blow to unions. Arid it
;7 "Even

the

which had been

.

.

quote,. 'Thisk pronot only harsh
mayjbe in certain circumstances altogether inequitable as

7. commented,

I

visionthe act. is

<

t«ut it
;

"As President Truman
in his veto

•

•

"Your
'

stands

feels

and

difficulties

the

created

by the anti-union security
^ clauses of the new law. The need¬
less
and
useless /procedures
created

for

a

union

like

yours,

with its decades of

peaceful bar¬
gaining history, are bad enough.
But worse, arid more dangerous,
is the threat that the rugged in¬
dividualist employers of the coun¬
try will be able in depression
limes to use the act" for 'purposes
union-busting and Wage cut¬
ting. ;
'
,

7

_

"American workers did not ob¬
tain the highest living standards

[ in the world by accident. They got
i them through free collective bary gaining and a free labor moveinent, which have been bulwarks
of our democratic free enterprise

society.
of

unions

our

lias been impaired particularly by
Hie provisions of the act permit¬

"

of

a

able

,

.

National

Hoard.

These

Labor

Relations

provisions

practical purposes have
;

for

all

repealed

one of labor's greatest landmarks,
the Norris-LaGuardia Act of 1940.
"Your

.! "will

go

organization, I
on

record

for

told,
repeal of
am

J this ill-advised law. I should like
to express my

r

-

you will
couple with this action a./proiposal to rebuild the Federal laws

affecting collective bargaining in
a
way to establish a just body
of

,

hope that

rules

and

which

effective

will

insure

bargaining,

free

deter

rights of employees and em¬
ployers in the light of the public
interest, "reduce 5 conflict 1 to

iiune

"

7

minimum

and

enable

liriior s to

keep their membership free from
Communist influences;-'




-

-r*

v

-

be hesitant in placing long-term
:

■

-

dur/ng the

past month and, with its temporary
noticeable drop in the current demand for
_■:
;7 r7 -;'7'.-7.
7■: ;

was a

wheat.

■

Buyer interest in flpur rose appreciably during the latter pert
of the week from the low level mat had existed during previous
•

weeks.

A considerable

quantity of spring wheat flour

ordered

was

by large bakers; for delivery during the lest-, four rnonths of. the
year.
The number of orders placed by sniall bakers was flmifed as
many of them had previously accepted commitments at price, dis¬
counts.
The demand for hard Winter wheat flour remained; low*
and

a

decline in the price of rye flour did not result in-any appre¬

-

'

of 1.6 points,/or 1.17%', from last week;
cated rate was 95%.
•7 V
" *

:

A month ago the indi-

.

1,712,400 tons a month ago, 1,564,400 tons, or 89.4% of the old
capacity one* year/ ago and 1,281,210 tons4 for the average week i
in 1940, highest prewar year.
'
'
7
,

4

ELECTRIC OU1TUT

oiFF

SHARPLY IN HOLIDAY-WEEK

and

power industry for the week ended Sept. 11, was 5,166,126,000
kwh., according to the Edison Electric Institute.
This was a decrease
303,413,000 kwh. below output in the preceding week, but an in¬
crease of 112,826,000 kwh., or 2.2% higher than the
figure reported for
the week ended Sept. 13, 1947.
It was also 644,975,000 kwh. in excess
of' the output; reported- for the
corresponding period two years ago.

the

/upon

consumer-

demand during-the next

month;/.! f - 7

| The'participatiori of United States biiyers in. the riewly ppene/Y
Australian market was limited rind] prices gerieraUy ;wCre 'firm;^

\X Ir

RETAIL AND WHOLESALE TRADE FOR WEEK FRACTIONALLY*

:§77;§7*B0YE;Y9477PERIQD"77^
/ The

advent of

seasonable weather; irt many* areas arid in¬
for the Labor Day week-end boosted
^hevolume of retail trade during the past week.
Dollar volume moder¬
ately exceeded that of thq preceding week and was slightly abovecreased

The amount of electrical energy distributed by the electric light

;

largely

;

/7: V/This week's operating^ rqte Is/equfvMerif-/to 1,732,200Softs'
of steel ingots and castings as against i;703,300 tons last week,
'

volume of wool to be ordered for future production will depend

l

consumer

more

needs

that

of the corresponding week a year
ago,
Bradstreet. Inc., in its current review of trade.

according to Dun &r
Although some con¬
sumer resistance to
high prices continued to be evident, fall promo-*
tions were generally well attended.'
'
/ ,J
The consumer demand for most apparel items compared favoid¬
ably with the high demand of the preceding week. Extensive adver¬
CAR LOADINGS FOR AVEEK 10.7% AND 12.7%, RESPECTIVELY,
tising and promotions of fall apparel stimulated a favorable consumerABOVE LIKE 1947 AND 1946 PERIODS
>v^t;
respqnse and back-to-school apparel continued to be in large demand.
Loadings of revenue freight for the week ended Sept. 4, 1943,
Interest in women's fall coats and suits remained at a high level, as;
totaled 895,279 cars, according to the Association of American Railwas trqe of detachable-hood flare-back coats and zip-in
lined coats.
roads,
This was an increase of 3,784 cars, or 0,4%" above the p,rececfr
The consumer, demand for -men's suits and topcoats increased
mg week .and-86,340 cats,'or ,10.7% above the corresponding week
slightly;
Th^VO was also some, Increased demand for men's andin 1947.
For the similar week in 1946 it represents an increase of
women's shoes.
„4
of

>

100,796

cars, or

12.7%.

,.

Food volume

AUTO OUTPUT REDUCED IN

SHORTAGES AND
v

Production rof

declined

to

week, the

cars

LATEST WEEK

LABOR

BY

STRIKES,

DAY

for; 7 home

and trucks in the United States and

Canada

72,214 -units from 96,484 (revised) units the previous
second lowest point of the y&af, '"according to "Ward's

demand

picnic specialties, too. while

low-priced meat cuts and

sought, Soft drinks and
dairy products met with a favorable consumer response." x
77
While the consumer demand for furniture varied in different
localities, it generally remainedl almost unchanged from the high
\

some

*

Output in the similar period
This week's

level of

a

week ago.

-'*./•

•

Household appliance volume dropped slightly, though instalment
buying continued to be large.
Building supplies and paints showed

.

marked

sales

activity.

Holiday travel stimulated the sale of auto*

mobile supplies and accessories, f

7
7 / ; ;
; ' \7 "
/
the country in the period >ndedon Wed*
nesday of last week was estimated:to be from 4 to 8% above tliat of
.

7' * Retail / volume "for

a

year ago.

Regional estimates
following percentages:
.

exceeded those

of

a

year

ago

by * the

New

England and/ South I to 5, East 7
7 6 to JO, Middle West 2 to 6, Northwest 1Q to 14, Southwest 4 to 8, :J
and Pacific

week

ending Sept. 9, declined to 83 from 94 in the preceding week,
Dun & Bradstreet, Inc., reports.
This represented the lowest business
mortality recorded in any week since the first of April. > While

Coast

1 to 5.

'

*

.

7 ; Total wholesale order volume declined slightly last, week
dollar volume

witl^

holding fractionally above that of a year ago. Retail-*
to purchase cautiously while awaiting further price
There was considerable buyer interest in qualitymerchandise, at moderate prices.
Deliveries generally continued t<>
ers

casualties remained above the comparable 1947 and 1946 weeks when
75 and 31 occurred, respectively, they were less than one-third,

the 269

for

meat and butter substitutes continued to be

;,
7.
7,
7
a year ago was 100,552 units.
7
output consisted, of 52,185 cars and 20,029 trucks
made in the United States arid 2,938 cars and
-1,640 trucks made in
Canada. ' .
> j •
»
'
x

•

slightly during the week as a result of house-*
localities increasing their purchases of fresh produce
canning. - There was a: somewhat - increased consumer*
rose

wives in many

-

Counsel /of

importance

withdrawal, there

•

General

caused many buyers to

crop

more than two cents a bushel./ Many of
the Commodity Credit Corporation offices were closed at ihe end of
the week. Buying by this government
agency has been of consider¬

ting an almost indiscriminate use
The principal reason for the
"decline,/ states Ward's, was the:
of inj unctions and court action
stoppage/ at Chrysler caused by the strike of 170 olant guards at
against unions. I do not refer here
General Motors units, held to three days'
to the special injunctions author¬ Briggs Manufacturing Co.
production for want of steel, also helped the downtrend.; And Hud¬
ized in instances where the pubson's assembly line put in only two days .because of insufficient
,\!ic health and safety are involved,
numbers of cylinder blocks from
Campbell, Wyant & Cannon Foun7 but to the provisions for crippling
damage suits, and reckless irij unc¬
tion actions brought by employers BUSINESS FAILURES AT LOWEST POINT SINCE APRIL
or by
the uncontrolled and uri- rCommercial and industrial failures in the holiday ^shortened

'

;
*

slight dips in -the prices of wheat, rye and corn. The prospects
large spring wheat crop and the excellent outlook for a bumper

corn

-

the

prices at the lowest level in. recent weeks.

commitments,
"
Wheat futures dropped

'

■;

/

oat

-

.

'f! responsible

moderate decline in grain prices at the end of

•

:

freedom

a

.

Automotive. Reports."

4

"The

with

<

' f:

to come/

Brotherhood, probably as
other union, urider-

much as any

were

„

'

?

...

basing ,point dislocations alone will cause grief in mapping ciable change in the limited demand for it
>
out where, new steel capacity shall be located in the years ahead.
Cotton prices .continued to move within &
parxQw range duriq^
But the answer to this will not be too long in coming.
Until then, the week aiid buying rerriained steady. Some slight
price increases?
some-plans for blast furnaces and openhearths must wait.; At the occurred at the end of the week;
same time, they will force output up to the maximum level possible,
Mill buying.was slightly more noticeable than in previous
which-ist the same as adding new capacity—only less expensive, "The
weeks, but there was no appreciable rise in the over-all orderIron Age" adds, y If thef.o.b. mill system of selling steel remains
volume placed by mills generally,
/ v.
:
7 ; / r
|
intact, a large Eastern, steel mill is a certainty, but that decision may
:f/TWitlrthercdntiimatiori^vef^faydi^bloi^qp/^dthefrM7fsg
be rirfqw moi-e yearsln^corning/ /
:'y7.4/7i;77v7>.;7 'r"77
" I
ally expected that the second government estimate! of the cottoii crpp
^:^;Steei;:users,. egged on by ..the success /of soriae: grriups in getting due the
present week will exceed; the previous estimate by at; sfri|ill
voluntary allocation, are almost causing a "run on the'bank." Ii
/The current outlook fori cdtton :is-.one of the best in the
those charged with control of this plan cannot successfully withstand [amount,
rvK-.; 11 >-V'
the. intense pressure from Congressmen, associations, groups and past 20 years. ^.-x..;--v.' ^
7|; Trading in the .Bo$tonj woqi tnjarkelPT^
duripg the
individual Companies, the plan may be doomed, the magazine conf
week although some increase in the *pot:^
demand/was
eludes77/;"7777:77: 77y7/*77-77
buyers continued to aWait further developments with regard to big)ily,', /TheAmerican<Jrori';arid'Steel Institute announced on.Mon- j
priced domestic wools.
Desoite thisy-mu^i of the current business?
day of this week the operating rate of steel companies having
was
inrfine/and/half-blood-rdomestic/wdo^
7 4 '^7;
7.94% of the steel-making capacity of the industry will be 96.1% •
Many/ mills have adequate stocks/for current /operations; the 7
/of capacity for the week beginning Sept. 13; 1948, an increase j

message more than a

juation for years

•

:

Prices of soybeans and September corn did not decline, but there

demand is expected to

But by that time it is almost

year.

The

predicted

yeari ago, the act, 'contains seeds
Or discord which would break this

•

x;-7/'

;

.

was

week

the

7-7 Now; sources' of ore |iWe neen ioriiidj and are/being exploited by
major steel firms. 'On the basis of known facts Canada and South
America will play an important part in the steel economy of the
United States in years to/come. / ; k /
,7]
v.; 4 7?«:V.-ri

.crippling procedures jmposed
upon
free collective bargaining
hy the act.

was

DECLINES ON

PRICES

was a

There

;

In addition to plans already under way for steel expansion, firms
continuously having sample or exploratory plans made up. Often
these lead to rumors of large-scale expansions that just aren't yet
fact—and may not become so for years, if at all.
One reason why
some steel officials are stymied on the future location of new plants
or equipment is the question mark on future ore and Coal supplies,
the,trade paper notes. -v
v ' 1
•-

union operation and some of the

this

FOODSTUFF

slight decline in the Dun & Bradstreet daily .whole¬
sale, commodity price index last week, reflecting largely the dips
that occurred in the prices of many foodstuffs.
The index continued
to be close to the high level that has prevailed during the previous
weeks.
On Sept. 7 the index closed at 277.97 compared with 279.46 a
week ago and 280.17 on the corresponding
day a year.ago. ;

are

"Most of you are familiar with
restrictions
on
democratic

serious threat

There

"

-

COMMODITY PRICE INDEX

WEAKNESS IN

part, according to "The Iron Age," national metal-

be strong even by late next
certain that many who are
..." not getting what they want now will no longer be in the gray
market or deep in conversion plans.
The only hedge is the
possibility of war.
There is no single piece of evidence today,
says the magazine, that the steel industry would fail tq meet
all the requirements which would be placed on it in event of war.
/ Steel

:

/the

"Just

Thursday, September *16, 1948

,

Taft-Hartley Act

/more

•

-

problems created by a piece of
class legislation enacted just a
year ago. I refer to the Taft-Hart¬
ley Act.
This law's evil effects
Itave just begun to become ap¬
parent outside of the labor move¬
ment. Your leaders and' members
Jhave been aware of its inequities
from the beginning. -

-

CHRONICLE

working weekly.
Barring strikes next year the increase in steel
production due to refinements, such as use of oxygen, coal washing,
increased use of sintered ore and other production techniques will
be amazing.
Output in 1949 may hit 94,000,000 tons without much
new basic equipment, states this trade authority.

"You also have before you the

.

(Continued from page 5)

but not the main

(Continued from page 16)

*

FINANCIAL

The Slate of Trade and hdnshy

fflrges Increase in
linimum Wage Level

„

&

WHOLESALE

'-H Law;

the usefulness of your
'of Labor.

COMMERCIAL

continued

developments.

.

be prompt.
failing in the corresponding 1939 week.
~
I
77
Casualties involving liabilities of $5,000 or more accounted for 70.
i
Department store sales on a country-wide basis, as taken froni
of the week's 83 failures.
Of the larger casualties, seven had liabili¬ the Federal Reserve Board's index for the week ended Sept. 4, 1948,
ties in excess of $100,000, and two had liabilities, over $1,000,000 each. increased
by 16% from the like period of last year. This compared
7-77 Retailing and manufacturing failures showed a decline, while with a decrease of 8% in the preceding week. For the four weeks
wholesole casualties constituted the only increase for the week.
ended Sept. 4, 1948, sales increased by
8%, and for the year to date
:
New England failures increased to 28, its largest total in any
by 8%.
• . ,
•
*
.
■
week since 1942* while in nearly all other regions the mortality rate
7 A reduction in the number of selling days along with warm f
was down in the. holiday week.
■ - . .
7
temperatures served to retard expansion of consumer demand 7
for Fall merchandise here in New York the past week.
As a 7
WHOLESALE FOOD PRICE INDEX EDGES LOWER FOR
concerns

-

r

f

,

.

result, department store sales volume was estimated at 1% or
*
more under the comparative 1947 period. ;
/
>r i
successive
;
week, -the Duri & Bradstreet wholesale food price index dropped 0.0%
According to the Federal Reserve Board's index, department
to $6.86 on Sept;- 7, from $6.90 a week previous. " This wqs the lowest Store sales in New York
City for the weekly period to Sept. 4, 1948,
since April 27, When it stood at $6.76.
The current; figurri represents increasjed 8% above the saim,e
period last year. This compared with
a decline of 2.3% below the
$7.02 recorded at this time a year ago, a decrease of 16% in the preceding week. For the four weeks .ended
at which time food prices were-trending sharply upward, j
Sept. 4, 1948; sdleS -increased by 2% arid for the year to .date

FOURTH STRAIGHT WEEK

,

\

Continuing its downward movement for the fourth.

.

.

by 6%;

COMMERCIAL- & FINANCIAL

THE

The

following statistical tabulations

shown in first column

cover

month ended

or

that date,

on

"

Latest

.;

AMERICAN

IRON

Indicated
i>-

steel

AND

Equivalent to—

Steel

STEEL INSTITUTE:

operations

ingots and

■

Y''y'V^

Week

.

:

■

castings

;

•„

Week

Year

■'.

(net tons)-.

Sept. 19

94.5

95.0

1,703,300

1,712,400

■

OF

l/'

4

1,732,200

AMERICAN

1,564,400

Steel

AMERICAN
oil

Crude

INSTITUTE:

AMERICAN

output—daily average (bbls. of 42 gallons each),
to stills—daily average
(bbls.)__

Gasoline
Gas

oil

output

and

Residual

distillate

oil

fuel

:

fuel

oil

output

(bbls.)

Residual

-

fuel

oil

5,506,000

5,682,000

5,584,000

5,288,000

17X45,000

17,722,000

17,669,000

16,413,000

1.981,000

2,165.000

2,126,000

1,892,000

4

•7,182,000

7,491,000

7,044,000

6,476,000

Shipments

8,649,000

Stocks

Sept.

4

(bbls.)

8,981,000

8,818,000

4

94.893,000

95,504,000

97,838,000

zinc

of

85,627,000

4

23,721,000

23,281,000

21,055,000

20,963.00C

-Sept.

—

Slab

4

68,969,000

"be,425,000

59,869,000

72,308,000

70,853,000

66,911,000

57,211,000

end

at

AMERICAN

Revenue

freight

Revenue

freight ree'd from

loaded

—

(number

-Sept.

of

4

895.279

891,495

878,901

INC.—Month

RECORD:
Total

U.

construction

S.

Private

CONSTRUCTION
U—

Sept.

4

698,000

692,459

693,070

634,862

Total

Public

and

■

■

$146,801,000

$194,361,000

65,466,000

68,310,000

—-.

82,511.000

LSept.

73,717,000

81,335,000

126,051,000

63,718,000

56,434,000

74,557,000

87,554.000

46,743,000

17,283,000

6,778,000

38,497,000

16,975,000

—_

municipal--—-—.Sept.

Federal,.

•

Sept.

—

>

89,3 V4

*45,671

161.256

64,922

40,023

(tons)——

end

petiod

"

45,246

60,357

of

(tons)

•

66,852

BRADSTREET

&

of

August:
109

119

99

61

62

44

194

166

102

40

i

36

number
service

number

35

_L_li

19

37

23

439

420

287

$7,208,000

$10,426,000

1,931,000

1,945,000

1,978,000

3,036,000

2,281,000

1,668,000

—

—1—2—

liabilities

liabilities

1,861,000

(BUREAU

OF

1,163,000

176,000

9,034,000

1,279,000

655,000

$21,442,000

$13,876,000

$14,903,000

—

———2—1

liabilities

Tota

i \

'• <-

$5,580,000

—

service

COAL OUTPUT

!ft

s

1—2-

liabilities

Commercial

'j b

liabilities—.

liabilities

Construction

$146,229,000

33,177,000

'

construction

State

$106,894,000

Sept.

*67,377

(tons

grades

number

number

Wholesale

-Sept.

—

*69,888

68,605

6,991,132

.

NEWS-

—

-

*7,068,658

lbs.)—

1.

Retail

——:

construction

,

INC.—Month

period

number

Commercial

808,939

cars)

ENGINEERING

'

'

y'

7,417,599

—

number

Manufacturing

ENGINEERING

Ago

91,403

68,180

at

Manufacturing

'»rn.

CIVIL

(

INSTITUTE:

all

2,000

FAILURES—DUN

Construction

cars)

of

connections

; Year

Month

141,793

1

RAILROADS:

(number

Previous

Month

131,028

—

castings produced

August

output,

of

of

orders

BUSINESS

Retail

OF

:. Latest

:

,,

.

lbs.)
(tons

Wholesale

ASSOCIATION

for
of

INSTITUTE,

56,101,000

4

-

(DEPT.

July:

7

.

smelter

2,000

Unfilled

Sept.

at

at

6,598,000

Sept.

:

—

of

STEEL

steel

ZINC

Of August—

4

_

oil

fuel

(bbls.)

-

——Sept.

...

;

Gas oil and distillate

*

;

at

:

4

refineries, at bulk terminals, in transit and in pipe lines—
Finished and unfinished gasoline (bbls.) at
,
—
—_Sept.
(bbls.)

5,173,050

5,504,550

5,528,850

4

Stocks at

Kerosene

5,531,450

Sept.

.r—,

(bbls.)

output

sept.

—

(bbls.)

4

Sept!

(bbls.)_—

output

__Sept.

AND

and

tons)—Month

j',j

runs

Kerosene

IRON

ingots

(net

PETROLEUM

Crude

PRODUCTS

WROUGHT

COMMERCE)—Month

•Total shipments
^(thousands of pounds)

89.4

*
j,

month available (dates
are as of that date) :

or

of quotations,

cases

'

9G.1
•

in

ALUMINUM

*

Ago

Ago

*

Sept. 19

or,

'

*

Month "

Previous

y

'

(percent of capacity)

(1129)»

production and other figures for the latest week

either for the week

are

CHRONICLE

MINES)—Month,
•».

of

COAL

OUTPUT

(U.

Bituminous coal

S.

BUREAU

and

OF

MINES):

;vPennsylvania anthracite (tons)Beehive

:

;

•

11,900.000

4

_Sept.

4

1,162,000

1,171,000

1,163,000

4

122.300

142,300

139,300

124,400

'

*

1 '

,

'

"

"

»

..

1

^

'

<

V

^

,

%

DEPARTMENT STORE

SALES INDEX—FEDERAL RESERVE
TEM—1935-39 i AVERAGE=10(J—

'

J

')

COKE

%

coke

(BUREAU

Production

Beehive

COTTON

(in 000 kwh.)

(COMMERCIAL

/

STREET,

AND

5,166,126

--Sept. ll

INDUSTRIAL)—DUN

INC,

Sept.

9

75

83

.

$44.66

$44.61

$ $44.11

$43.16

$43.15

$43.16

CROP

$36.93

7

ACREAGE—U.

S.

$37.75

500-lb.

,

.-—I—-———

Export refinery at-—
(New York) at—

r

■>

,

'

Zinc

8

23.425c

23.425c

23.425c

8

103.000c
ly.bOOc
49.300c
15.000c

103.000c

103.000c

————————

—

8

3ept,
-Sept.

$
8

.

19.500c

19.500c
19.300c

U.

'Y

PRICES

DAILY

15.000c

10.500c

Average

14

**■ "■

//ii-;

AVERAGES:
100.69

S.

111.44
i—

111.44

111.44

116.22

116.02
114.08

Group

Group
Group-—.

BOND

Govt.

DAILY

Average

'•

— 107.44

111.81

:y-

COMMODITY

dry

Beans,

Peas,

dry

-

■

INDEX——

FERTILIZER

I r.y 'ITY INDEX BY

ASSOCIATION—WHOLESALE

for

3.13

Sugar

3.44

Broomcom

3.31

Hops

3.08

3.07

y

3.07

Apples,

•2^8

2.90

,

2.86

422.0

428.6

433.1

beets

:and/'oils_-—-_ili.4.__-ii.—u-_^__-__Septi"lt:

224.4

222.2

270.0

267.3

—__Sept. ll

218.1

222.2

271.3

.

266.1

294.9

294.2

300.1

302 X

,_Sept. 11
Sept. ll

224.2

222.9

,224.4

283.4

289.2

260.5

Fuels'-'-.—---i-—-:------—iSepLll"
MisceUaneous-.commodities-——,._—-_n__—___Sept, 11

233.8

233.8

223.8

190.6

168.8

169.0

169.5

167.3

'

—

.

i

.—.—.—

—

Livestock

"H

Textiles

'

197.2

197.4,

197.2

387.4

186.7

159.1

235.3

235.3

-"Ghemicali: and drugs—„Sept.'ll,

155.3

155.3

Fertilizer^materials-—.il———_i,———^Sept.ll■

140.9

140.8

Fertilizers '
a--——-Sept.Yl
Farnr machinery^..:—-Sept. 11

147.5

147.5

—vl_-„:

-Sept. 11:

—

'p ''-Building*:'ma'terlalsL--i^-4.i*.--L-i—L-.ii2.;r—-4hj;--ui.--i_Sept.li:
f
-

METAL

215.5

187.5

I'LL———Sept. It

-

Metalr

•

-

'''
'

!■,.

233.3

226.6

155.3

1496

'

147.5
'

i-

All

:

groups

■-"V-"'*'-»

1

-y

•

Production

'

(tons)

Percentage

144.5

225.3

227.5

166,039

222,034

196,986

182,685

183,835

178,326.
/
SO

139,886

of

395^406

?;•;

PAINT

•

——^C——.—--SCPt.
activity-__Sept.

AND

..

'4-:2AVEBAGE=|«Q

DRUG

(in

476,283

Silver

/

•

4

■

91

93

392,753

344,469

4

Sept.; >' 4;
REPORTER

p

.V

v

PRICE

-

79

As of

(in

Midland

:

1416

144.7

MVOLESALE PRICES^-U. S. DEPT.' OF LABOR—1926=100:
,'.i;

.

Alleomm^NtiUes

: .r.;-T

rFarni..

Hides

---CSept;;. 4'products—iii-L—-J—
—; Sept; 4
-------——-i^.^^-L-_--Sept. 4
"products

'—

;—i

Sept.

—

if'i. s Fuel ;and/lighting' materials-^-i.—--i——Sept.
j.

-

^ Metal and metal products
Building

materials

--

4

147.5

4

-

Sept) 4':;
-——.Sept.-4

—

J

;—

-_a_—-i—'—"L.

Sept.

4

174.1

188.5

183.2

148.1

154.9

182,4

Special groups—

-

,

Semi-manufactured
Manufactured

t

/;

i

;

'

; r

.

-

articles

products—

L
jl—

PLYWOOD

(M

;'

.J

-

♦Revised figure;




•';y'v

114.4

UNITED
;

BUREAU

f

(000's omitted):

132.1

132.2

132.0

118.5

2 Exports

-146.9

146.8

146.4

131.9

'

118.5

118.4

118.2

y;

-

M»8

152,560
s•'•"r■

118,039
v.'•

-

c

"3i5 ;:U;.y,y

y/;

2*4 ■
216,''

„

■

241

-

'
metals

in

75,559

~

"1-2

*74,714

155,057 '•

-

•'

2. 3,167,810

70,169

168,252
32,452

*33,219
'

•

*3,262,076

>;

51,334'

2.

*155,034

34,519 ; i

\

*50,974

2,899,673

*>/.-■ ,i

V »•' •* '•

•

.•

GREAT BRITAIN— '

OF

v

£30,557,000

-

I*

•

£3,306,000*1.

£6,676,000

COM-"

-n,,

.

^

,

ft.' %-in. equivalent)—222' V'2
(M
sq. ..ft.,:, ?£ ,•

158.7
163.0

4

162.8

1

158.8

-

164.2

'

164.3

"

163.8

163.8

,

"

153.3

V-"':

153.2

:

T'M

i;

184.3

/

159.0

'

152.4

•:

168.5
150.2

•

^ 150.1

y

;r-:y
f'-y

148.9

1 137.9

CENSUS—Month

OF

;
22—

STATES

,

.2

'2

;

f-vi'...: tiff

^ 122,386
v

i.-

2j

^ "2'

' 2150,187

«."**•

'

■

J

-

'

:107,5«8

2

149,742

102,042..
36.332

1

65,287

48,233

.

168,339

$1,022,000

$1,013,300

$1,265,060

558,500

615,600

450,000

8253,100.807

$253,428,940

$260,176,196

4,832,229

5,073,518

3,400,395

$248,268,578
y:
" 2.199/«>

$248,355,422

$256,775,801

41,425

GUARANTEED— (000's

Net

debt' —2

.2"

J-"

—_2—-

I; p "< r'

4k

...

.

v

'

'

—.2——

Computed annual interest rate*Revised; figure.

....

' 2:i.222-..22_.

DIRECT AND

omitted):

balance—^

'''

—2

July:

Y ' v'.'2

—2—2_2_— -2;—

GROSS DEBT

'

—v'-'iv5*'"** '

153,859

--_,2-.r,—r"--r:2-1--r—

j As of Aug! 31^———
General fund

.of

'

$28,148,676
■

(DEPT.

'
.
.

—60,879"'

•$27,666,073".' $27,902,858

'

STATES EXPORTS AND IMPORTS—

Imports

V
181.7'

180.7

V

:,4*

117.2

?

P:

4

173
790

• ■■>

180.1

4

nyp-pp

v"2

-

150.4

4

.--'All comodities other than farm -products.——Sept.
| ^ i All-commodities oth^r than farm products and foods—Sept.

3.072

.'V

201

258

consumption

169.2

^_.Sept.

f

sq.

and

136.9

—•Sept.

L'.

ISSUES'IN

2016

-

Raw-ma-terials^—i——--U-——i.——Sept.- 4:

,t 35.312

"257

118,426
]- * %-in. equivalent)
._2———2— '
;
Stocks fM sq. ft., %-in. equivalent) at end I' - of month
44,397
:——22— 3-21——2- •;
54619
Consumption of logs (M It., log scale)—
'i Stocks (M ft., log scale) at end Of monthy.2 y'r y 188,817

UNITED

,tj(;

t82,«03

-'

3,014
'

MINES)—

Bank, Ltd.—Month of August—-—

:T Production

140.3

137.4

203.2

—

70,358

26,424

i''v•:-x*)'t:

(000's omitted).2-2——2-^

171.7

V 172.0

4

.

190.0

:

50,098

1113,041

;

/yyy 843
160,553

—2—-v2—
ounces) ——_———-2-^~

202.3

137.6

4

—--_V—-l_.Sept.

'.

169.2
193.6

147.7

V

387.8

389.9

,

187.8

368.4

189.3

167.4

1—Sept.

—i-z--—-

p • Chemicals- and allied products
z/j/r -..Housefurnishings y goods
—;
v< >.;j; Miscellaneous
commodities

.

& 184.0
i 189.2

4

and^/leatherSept.^

"^.Textile

50,836

P'p-SllJ-:

'

recoverable

MERCE)—Month of July:

*.' S6pt. 10

33

y

100,445

201

pS.

"

12.504

(

'

y— 250

tons)

fine

July 31

Shipments

pi y.' Foods.-

27

3,015 I

\

: '

10,199
•>

-

5.437

,v.

•

28

69,358

'

OF
•

6,201

26,372

Averare=H)0)
v-

y

2,107.763

52,216

variation.-^'

(BUREAU

57.178

1,777,783 y;

1

•

:•

(FEDERAL RE¬

-•

-

6,301

100,478

i

SALES

of

51,739'.'
>t

9,908

adjustment————i--

short

NEW CAPITAL

INDEX—1926-38

;

-i

iP'-,.

22-—2-

(In fine ounces)

SOFTWOOD
•

52,653

1,787,723
,

MONEY IN CIRCULATION—TREASURY DEPT.

——

:r:;.>^Un®iied- .orders;.;(tcnsji.-rftt^
OH)

*

••

.f'^Zine (in short toris)22—-2-22——-2-2;,/

"

r

384.407

22

(tons)

for seasonal
seasonal

production

Gold
2Lead

213.5

144.5

T'

NATIONAL PAPERBOARD ASSOCIATION:
•;>»

.

127.1

'225.9

.combined-——_ir_———'—Sept. 11

»•'

-

-,

135.5

143.1

181,362
2,187,985

the U, S.;' ^ -1—• •

130.9

138.4

\

6.513

205,066

:

.2;' ;:':":y2.2*;v;y-.2p y
Copper J(ih ahort:'tbns)22-22222-2_—-i22-^

y";

6.768

17,164

3,703

399.127

(tons——

(bushels)

STORE

OUTPUT

6,463
19.408

v

f

•

2.340,700

2—2—2—2-2222-—-—crop

Month of June:
Mine

■.

234,396

-

—-2_—'

-2—2:

2 -"/Month of August:
Without

32,569

205,835

———————J"

SYSTEM—(1935-39

Adjusted

33,475

■V

y 408,366

292.C

287.2

SERVE

13.306

33,132

29,055

>

3,536

—

95 609

102,500
»■

2,302,405

States)

DEPARTMENT

12,862

33,283

:iV; 6,829

| Pecans (pounds) 2-—222-->.2—^-2

234.0

—^Sept. ll

V Grains
'k

■

246.3

97,707

29,503

(tons)— „2—.

(12

131,279

y

......

(tons)

Com'l

79,345

12,916

19.411

(bushels) -'■

(pounds)

7.334

79,916

"':

39,763

98.494

y.

———

25,977

44,528

..

.

43,<t83

6,232

132,152

'

—

<3 States)
(tons)...,
Cranberries (5 States) (barrels)

"fFats

•;

i:

—.222

Apricots

COMMOD-

——

beans

47,309

296,949

26,664

•'

76,993

% Peaches (bushels)
—.—————— •
2 Pears -(.bushels)'_-_-u---2—i.-2---l—i--- ;
: Grapes: ttons).;' 2_-—

-n

242.7

—

;&■

bag)

Sugarcane for sugar and seed

3.31

242.7

279.182

i—

6,174

1-

bag)———
(bushels)——

Tobacco :(pounds)

3.44

U—;————--——i—„Sept. 11";

products————
;Cotton

(100-lb.

Sweetpotatoes

,3.13

.Foods.

313,139

26,664

(100-lb.

3.09

GROUPS—1935-39=109;

Farm

edible

(bushels)

Cherries

NATIONAL

1,215.970

317,229

(pounds)

Potatoes

3.32

—Sept. 14

252,966

1,470,444

timothy

2.93

.

,

2.95"

256,757

1,493,407

:

—2

2.84

.3.09;;

,2.85

46,151

257,642

——

—

1.067.970

45,938

:

(tons)

field

3.13

-Sept. 14

^
MOODY'S

alfalfa

clover and

1,364.919

981,415

302,908

—

(bushels)—
—
^.-2.

2,400.952

1,284,323

981.415
303,580

—

—

3,506,363
:

1.284,995

(tons).'
Hay, lespedeza :-('tons)„222-2—22—2——2

2.45

2.45

3,528,815

2

—

(tons)——

3.45

——

—

Industrials: Group

,

,

—--—

-

all" (tons)

Hay,

11961

3.09

———_——-a-————
Sept. 14
Group;
--..Sept. 14
Public Utilities
Group——-.JSept; 14

•v

(in

1

' 5.

,

——

wild

Hay,

117.80

115.04

2.84

———Sept. 14

-—

682,109

AGRI¬

OF

—

(bushels)

Soybeans

—————

——

1,473,245

-

22^^2222^-^.^.2^22222

Sorghums for grain

111.81

107.44

111.81

115.43'

2.45

——«.i—-——--Csept. 14

Baa

Railroad

•

11,857,000

prior to

Sept.

-

(bushels)——

(bushels)

Peanuts

—^

A

21,148,000

15,169,000

AGRI-

< bushels) -2———8——

Hay,

109.24

2.94
^

of

as

"

Hay,

116.22

105.17

111.62
:

Sept. 14
_Septi-14

——

ccrporate—1-w———

•

:.Aaa-——

:•

23,223,000

.•

spring (bushels)...^
(bushelsl-.uj--——2—8'

2"Rice

AVERAGES:
—

-

-

110.70

107.27

Sept. 14

YIELD

110.70

105.17

115.43

_Sept. 14

Bonds-

23,323,000

15,219,000

.--t -S.

•

Barleyx (bushels) i——— —^.--2.2-^:: Rye fbwshels)
—3.2--2-22222-y.2„-22w2i. 2:
Buckwhfeat (bushel!?) '-—2—2—22.%..—_2_—

119.41

105.00

.-Sept. 14
Sept. 14

Publie Utilities

U. S.

Gats

121.04

114.46

110.52

MOODY'S

1

116.41

116.22

-Sept, 14

Baa

Industrials

7'.

OF

DEPARTMENT

Other
;

103.95

100.73

.100.72

r

114.27

corporate—

Aaa

Railroad

spring

Flaxseed

U. S. Govt, Bonds—

.

772,920

5,403,360

REPORTING

(bushels)

Duram

14.800c

15.000c

All

15.000c

19.300c

=»*

BOND

DEPT.

CROP

—

thousands):

80.000c

-aepu

at——-—-——;

(East St. Louis) at—

MOODY'S

c

.1—_—-

Winter

21.425c

Sept.

——

<;y:Lead'XNew:York)Yat—y—!
Louis)

21.225c

22.250c

23.200c

23.200c

8'

Sept.

——

Straits tin

(St.

855,635

(DEPT. OF COMMERCE);

Corn, all (bushels)
Wheat; all (bushels)

'',,"

————..Sept.

•

Lead

437,100

939,677

tons)

'

■•/'YY;::

>

Domestic refineryat——

5,840,400

*540,036

bales———.

gross

PRODUCTION

BOARD

y.-y

METAL PRICES (E. & .Df, J. QUOTATIONS):
'

(net

'2'22'::'.'2 p# '■ p - •
2^.—-22rl.i2.2'-2it2-—^2^22^2-21'

;;

CULTURE—Estimate

Electrolytic copper—

.

'

Running bales (exclusive of linters)

7

50,879,000
5,011,000
r 588,700

;

♦6,132,799
5,592,763

5,712,851
2 435,117

3.18925c

3.75833c

3.75833c

3.75833c

7

*435,100

6,147,968

PpX Sept. 1

Finished steel (per lb.);
—Sept.
Pig iroit (per gross'/ton)—————— ——i.—Sept.
Scrap steel (per gross ton)——
—_T—Sept.

4,365,000

—

—

COTTON GINNING

IRON AGE COMPOSITE PRICES:
■

48,315,000

5,116,000

tons) —___2—

(net tons).,
...2^.1
(net Ions)——

'

,

53.450,000

,y y 635,600

—

MINES)—Month of July!

coke

Production

BRAD-

&

—■

y

tons)______—

2 4 CULTURE—As of Sept. 1:

5,053,300

5,317,724

:V

.

(net tons).—

(net

Oven coke stocks at end of month
'V'V-vv»"••• i-."\!
v
:p
-J- »1" t iiv'-

Acreage
FAILURES

2; •: >•;:

' :

tons)..———.Ti

OF

(net

coke

Oven

265

EDISON ELECTRIC INSTITUTE:

Electric output

(net

SYS-

—-Sept. 4

;

lignite

anthracite

Beehive

949,000

—

"

coal

Pennsylvania

10,733,000

12,115,000

12,150,000

(tons)————————————————Sept.

coke

,

Sept.

-

and

August—

Bituminous

lignite < tons )-

2. 2
-

-•

"'

'• 2.197%'

..

'2.125%

34

THE

(1130)

COMMERCIAL

(7) Refusing to take orders.
(8) Treating
customers
dis¬
courteously in general.

Pitfalls of Seller's Market

Some

in Ante Industry
number

who

businessmen

of

convinced

that

recession

somewhat

will

there

along

if I

this is all for the good, because it
is at least a healthy restraint on

speculation, and

help to

may even

alleviate the extremes of

boom-

a

and-bust cycle.

My own opinion is that we will
experience a sizable business re¬
cession

at

insofar

future

some

date, but,

the automobile business

as

is concerned, I feel

confident

market

for

in

least

cars—at

the

Ford price field.
I am convinced
that we will approach a buyer's
market

much

for

sooner

in

cars

the upper-price brackets. We have

pull out

that fits

certain-shaped shoe
of you dealers here

a

one

makes of

available

are now

in the United States for immediate

"•;

deliveryHad

today.

the

been

United

available,

en¬

manufacturers

car

States

in

to

produce to
capacity during the past two years
and

in

1948

had

and

...

had another shot in the

the

ERP

not

we

from

arm

.

.

.

remiss
sales director not

in my work as a
to

point out and call attention to
The

weaknesses.

these

in New

farmers

England had a saying for

that seems to be
apropos of the current situation.
"When you have a clear day, re¬
years

many

it

think

I

pointed
and

will

half

a

to

two

I

clear—as

be

earlier—for

out

year

a

is

that

years,

continues.

market

roof

the

But

the

(particularly

the

should be repaired

holes)

time

and these leaks in

is getting late,

big

now.

Many of us are so tipsy with
today's economic wine we can't
even feel the raindrops that filter
through the roof top.
But make
no mistake—we
are getting
wet,

public relations.
(2) Excessive overhead.
(3) Excessive parts and

potential backlog of new car busi¬
still when considered from
the standpoint of ability to pur¬
chase, the present car prices are
lower when compared to national
income and' cost of
living than

they

in

were

1939

in the

United

States—and I believe) the
ratio prevails for Canada.
Let'a

consider

Ford

price

When

the

the

field

in

cars

are

per-capita

disposable

the

hand

other

than

in

1939.

cost

the

of

is

At

income

141%
the

living

The

(11)

On

organization

though
year

the

or

see

two

even

kind

I

as

should

we

of

years

market

a

it.

more

that

exist

at

dealerships
going has been so

the

past

ferent,

three

and

too

many

operations,
I

know

cases

t

that

I

quick-profit

.

running the

risk of
my

having some dealers resent
indictment of dealership oper¬

ations.
nada

ing

You

dealers

here

in

Ca¬

have the reputation for be¬

well

business

disciplined
men

who

have' gone

You, especially,

may

knows

so

tions.

one

have

that

that needs

the

for

serves

bad

debts,

coveries include

recovered

these
clear

a

from

over

ac¬

Taking the net

two figures we discover
variation in the Federal

Reserve net profit

million

insofar

figure of $10.4
thd

as

current

period is concerned.

Putting the
matter another way, if the Treas¬
ury had not made its ruling on
Dec. 8, 1948 which permitted the
banks to set up bad debt reserves
and thereby pay less in taxes, the
New

reserve

York

City

million computed* by the Federal
Reserve bank. It is interesting to
bote that most New York

bad; debt

charge against tax
And

the

balance

banks

by

reserves

the

reserves to

extent that there is

situation

same

tax

a

is

savings

bbtained\'Dy

charge against other

which "has set up the joke for the

inflationary,

I

am

men¬

par¬

most

shingles

which

will

that

the

strain

these

tendencies

without

emphatically

good drenching.

a

in the same term•;:;^w)nds*tWi^s•olIt,'permitting

powq£s~ proposed

baseS;vAs non-bank* holders ton*

The Rise in Interest Rates

of

ernors

the

Federal

Federal

of

Reserve

any

quirements Will

there J s

serve" cities^ (New

the

Treasury

credit

by
is

surplus

exhausted

with

the

fslirnlte'dto tfo percentage

on"-demand -deposits
cities and

of
pretty,

cago)..

surplus,

Mr.

has

•

be
in

•

Effect of New Increase in

in
reserve

; customer
rwho
against the wrong

dealer

loudly proclaims the whole
industry resembles a cork screw.
He gets pretty mad about
it, and
starts his own storm of protest,
when

and

a

pany.

write

letters

to

the

com¬

These fall into eight dis¬

categories.
them, they are:
(1)

Selling

and prospects for

"As

a

I

have

possibilities

are

continuation

banks: by two

one-half

As
<

cars

catalog

we
>

-

(2) Demanding trade-ins.
(3) Giving low allowances

on

^'

"
a

■-

On

other

On

loans

All

f

J

Expenses

All

Net

ed

under

-

the

cars

(6) Asking high prices..

-

3.0

233.2
-

59.8

63.3

47.0

52.0

other

wages

66.6

deposits

New

227.3

».

2-J9.1

York

185.8
/

+ 24.4

65.2

'

(210

-

57-7

+11.0

50.0

53.0

130.0

139.7

12.8

:

138.6
i

•••••+•'

79.0

+

.

74.4

4,1

6.0

45 i

-•+-

7.5

250

-

144

■

—

1.1

—13.7

'+

275

'

'

15 i

+

:

105

141

+ 11.8-

•

,

i

25 V J,'-?"?''!'"*- r:' '-'VV. ';■*

97

—

Vc Change

177 r

125

~+

52.4

>
-

24

+ 16.1

-

€3.2

>;3.7
51.9

23

1947

.

456

0.8

—10.4 '

-r

75:7.

+15.4

of

—-CalendarTear-

)

82.8

+

76.8

period

a

City Banks

1946

Change
+

100.4-

+10.6

;

over

matheimaticai dertaintyi

*

1947

-112.1

9.2

earnings

-

afe a

+ 14.4

33

3.2

.

+T0'.i"v"
13.5

160

•

+18.9

50.1

54.6

108.7

86.6

83

/

4.0

^

—20.4

24.8

—

—

in an up-t

are now

(12.3

"

and
on

5.1

+

(60.4)

whicl^

determinant of

^

1 Gd
1946

-

+

8.8

+ -2.7

-

55-6

+

...

,2.4

-

—

+ 10.8

+

--

7

o.i;

8-

;+v*-fT43-;:::;

.107

206

.'+"4.|

176

102

8.1

/

■

—14.6

current

operating earn¬
before inc. taxes.(net)

"+9.2

94.6
-

97.3

-

*•—13.8

.

2.2

89.4

:

—

27

r-4 9 •:

'.

!. V;
r

Net income before inc. taxes
Taxes on net income
Net

profits__^____

'Net

of

profits

2^1!^

;

133.5

;■& 44.1
89.4

and recoveries

and

953

80.8

,283;

—36.0

67.2

—24.8

losses

and

99.5

6.4

i.26.6

V

54.2

charge-offs.

'

—19.6

•

(

J

30.9

;

68.6

";V65,8;";

;.94,5.
.

-

todajy

rates,

•

-

^

.4

-

with unwant¬

accessories.

—

'-^16.7

-

jto

continued* improve¬

-

-—Second Six Months—^

.

'/<? f'h amro
Change

1 QAft
1948

$,■<;

::

120.0

Interest

221.9

101.6
.

other

.

121.9

securities

Ve OVia-ncrA
Change

bank

-

like;

in interest / rates/ •? increased vj

ment

Central Reserve

-•-First Six Months
Q49?
1947

228.7

U. S. Govt; securities.

On

■-•■Profits and recoveries

(4) Demanding

1946
1Q4R

-

Earnings

ings

trade-ins.

(5) Loading

y.;;
^

the

(In millions of dollars)

,

income,

trench-With

one

-

would

interest

the.. primary

points time

percentage

An Analysis of the Earnings and
Expenses of
-

Salaries

out of rotation.

v

increasing In

application

greater

bank

percentage points

against demand deposits and
and

are

re¬

;

statement which I made

a

Short-term

premature,

requirements of all member

-

-

even

entirely in keeping with this

was

customer

gets mad,
he can-do a lot of very effective
advertising in reverse.
He tells
everyone of his gripe. Many cus¬
tomers

of

pointed out, there

somewhat

I

.

October, 1947 and which has

require¬

Sept. 8, while

on

credit."

the

up

conclusion

repeat

Reserves

The increase in

may

spite of the higher rates.

volume

too,

demand for loans is

In

ments announced

While manufactuers

it.

meeting*consumer, resistance

unpopularity^ - by
raisin prices, everyone,1 including
the Treasury, seems to want the
banks to receive a higher price
(interest rate) for their product
(loans and investments) and the

multiple credit expansion."

0

2%, looks

and ' political

maintain

through in¬
requirements

reserve

-

rate-,-has-sincebeen fuither .rUpf
tured ;by; three upward revisions
of the certificate rate; and the
;
prime Tending "rate,r which"; has:

definitely; higher and as it rises
collateral lending rates will, go

in other ways—

absorbed

*

-.

of; shorteterm rafes^

been raised from 1 % to

yield level. New
by such System

or

-

_

created
—

*

-

been, in¬

which; was first violated in July,
1947 with the release of th& biii

indicated

to

'

.

creasing since March, 1940 and the

with

securities

>

,

fixed "pattern

be

long-term

poihts

reserve

deposits in central rer
York' and Chi¬

Interest, rates .have

.

or

McCabe

in

four-percentage points

demand

on

use

serve

,

1

reserve

volume of bank

up

philosophy/ The: increase in

So,

.

Reserve Board to increase

add

can

<of

brushes

;

near-by limit to the

no

reauirementslaw

alL this

creases

outstanding

'

be tem¬

prove to

to
anything except higher bank In¬
come :is beyond
my comprehen¬
sion especially since the ability of
the
Treasury to i{ influence_ the

C; How

liquidation

the

5

i

re-

txmds; ~whiich^ "may/ be? offered*, K
the further ability of the Federal

rates*

the
Board's
view
its powers over

,

reserve*

porary; While the i m mediate
tightening effect fun: moitey* rates*5

look is for va ; steady to increasing
volume of bank /credit at higher

expansion and not toward forcing

hunk of rope.

a

increased

of:

cause

and thus be made unavailable for

ent

*

amountof long-term Government

could

reserves under pres¬

System

reserves i

will tend to be permanent. Then,
too, it should be noted that, while

uses

possibly

He grabs

Reserve
decrease in available

sales

.bunds

of bank funds—;

of

use

supply of

Federal

interest rates, risks, and liquidity
considered." As I see it the out¬

alternative

conclusion, I should like to state

the

the

and. possible < reduction in ^earning
assets suffered by the banks be-

shott-term Government securities
to pay a returnwhich Will make
them ;mdrec ath*acti ve ^h^lati ve to

reserves

System,
recently said before Congress, "In

that ..the

lo hg-termL.Governme nt

to

System is permitting if not forc¬
ing
short-term
interest
rates
higher and has, apparently at last
persuaded the Treasury, to permit

purchases

Reserve

'withfurther

trnueto bblige

In order to restrain inflationary
tendencies * the Board
of ~ Gov¬
.

ernment

Governors

*

their purchase to inflate the pi-edit

conditions should be directed
toward restraining further credit

Canada, and refer only to

small

.

way.

the

McCabe, Chair¬

Board of

v

,

quirements-would be to enable the

pro¬

V

credit needed to maintain produc¬
tion and employment at the high¬

System to acquire more^—if neces¬
sary many more—long-term. Gov¬

economy from rampant
movement in either direction.

-

4

banks. This in effect pays for

not to force contraction
in hank credit. He recently said,

engine of inflation

SI.900,000,-

$1,- v
the #87,000,0005
purchased by-the Federal Reserve
System between June 23 ari& Aug..
est sustainable levels. We would; 27 #n&;provides.funds for the fu+ *
endeavor to! use the additional
ture purchase of additional long- *

depriving; • the > economy ,o£

that

of deflation but may

approximately

000, which includes an increase of
existing, powers, to. $400,000,000 applying to the cenreserve
New - York
possiole to re¬ t-ral
- Citi¬

their

use

that

Authorities

that the increased authority over
reserves should be used to absorb

Federal

the

the

V

the fullest .extent

Either cash

my understanding from
statements made by Federal Re¬

of (the

}

4

banks

Reserve

Then too it should be remembered

Mr. Thomas B.

V

Federal

,

confident

and -'future

is

of

counter premiums.

the United

public relations. "

Treasury surpluses,
budgetary are cur¬
rently a matter^ of; Some idehate;

man

hard;

the

pressures

feel

way current operations are
hot varied by the bad debt: pro¬
4

an

shingles
not

are

against time deposits will raise
required reserves of all member*

I

cedure.

be neither

the

that

credit.

well

In

reserves.

this

officials

fact

big material
shortages in most building opera- *
tions, but not for building good ;

re¬

approximately $7

crued lax reserves.

of

and

properly endeavor to\

this, I think I
will exclude all of you dealers in




million

$17.4

quite

little about your opera¬

a

approximately
of additions to re¬

tect

re¬

who

In view of

per cent of dealers in

include

cause

through and appreciate the hard¬
ships imposed by austerity pro¬
grams.

I

ones

those

tinct

citizens

sent this indictment from

period.

nor a

,

for fair-profit

am

are

.

for
indif¬

"

as

figures given for losses and
charge-offs in the first six months
1948

audience, but the

the

repair the leaks

to get. There may be

laugh from the

a

elephant is like

management has been substituted
in

charge-offs"

The

of

to get

to

It is al¬

one.

the tail and then claims the whole

easy

that

years

careless

»,

the current

new

"The basic purpose of increasing
the authority
over
reserve
re¬

portion of the elephant.

present

the front lines* of the auto¬
mobile business—and I refer now
The

and

a

highest sustainable levels, without
expansion in the monetary supply
if possible, but with
expansion in
the monetary supply if necessary.
Insofar as possible it intends to

The impression that the public
has of us today is much the same
as the blind man feeling only one

in

'

"Losses

all due for

of

exists

to automobile

reserve!

a

loss and decreases net prolits of

public good will the automobile
industry enjoyed before the war.
Otherwise, in my opinion, we are

today, it is not long enough, in my
opinion,
to ■ correct
the ' many
weaknesses

that

created shows up under the head¬

ing

tion is

they will have to be

so

ways sure

of

give
full
effect
to
securities
profits and losses and recoveries
and charge-offs and it should be

a

car

v

..

One nice thing about the situa+

will call forth additional demands

it, the way the
net profits figures are set up they

noted

size.';-::- '-Vvy;-//•.;./ V;£;•;

not

for

understand

further

used

comedians

content with

the
with

am

problem in the United States,
from what I understand, the
hole, in the roof is about equal in

are
having a
time these days, telling
being able to afford a

about

with

I

as

but

trade-in.

no

familiar

as

the

pre¬

reserves,

to

of

another

that

I

serve

in the first place, still we have to
work together to restore the kind

Even

have

As

Radio

not

am

Upward Trend of Bank Earnings

(Continued from page 4)

Although many of you here
today may feel that you didn't
have anything to do with the hole

still

the retail

on

The

no

credit necessary to maintain pro¬
duction and employment at the

one

price increase.
This, theoretically, has a favorable
effect on ability to purchase.
To
get back to our seller's
market and its effect

grabbing

—is bad public relations.

Mean¬

cent

per

or¬

ticularly conscious of at this time.
The biggest hole of them all—the

considerably short of reaching the
average

are

with

car

Reserve system will provide the

tioned

creased in price by a
comfortably
smaller percentage than the
per

is

pre¬

Insufficient
devoted

roof, but the

the; average, then, these
low-price cars have in¬

capita spendable income.
while, the cost of living

new

,J

situation in Canada

mium payments, no unwanted ac¬

D It

manpower

ployee relations,/

71%

higher.
three

a

a
vigorous
who wants

everyone

thought and
improving em¬

effort

time

only

has

one

the

continue

and

probe until

comedian," has also set up govern- ;
the ment investigation into tactics em¬
so-called ployed by dealers.
vonce

There may be other holes in the

on

higher

same

is

iven the politicians

treate

(5) Nonchalant or "liberal" ap¬
proval of expenditures.
(6) Inadequate cash reserves.
(7) Inadequate service volume.
(8)inadequate wholesale parts

(10) Inadequate
used-car
ganization or set-up.

averaged, the

increase since 1939 is 103%.

lax collection

or

of accounts.

(9) Inadequate
paredness.

example.
these three

of

(4) Indifferent

*

sales.

the

for

prices

in the U. S.

cars

same

acces¬

eliminate

causes,

rackets

that,

-

investigate

will

great

practices is a subject that
is discussed pretty freely these
days wherever people congregate,

banks would have had net profits
of $64.6 million instead of $54.2

sories inventories.

promises

he

Dealer

central

[{1) Bad

for

ness,

we

politician

elected,

cessories and

million

they sure:

:
While there |s no question that
the high prices now being charged
cars have cut deeply into the

while

and,

to eye with them,

see eye

-

,

plus our own
military-preparedness activity
we
would undoubtedly be in a
buyer's market for automobiles and some of us will get a real
today—and this is especially true ducking unless we first recognize
because of the increased prices of the leaky roof and fix it.
Let's
cars
compared
to
the' "prewar take a good look at a few of those
figures, ;
big holes now.
As I see them,
program,

of

A

Thursday, September 16, 1948

still the public generally is very
sympathetic with their complaints.

I think I would be very

just so long as the strong seller's

steel

abling the

very

condemnation

practices,

pitfalls in dealer operations

gerous

in the medium and

cars

are

today, I would suggest you wear this point of public interest as a
Frankly, I am not here to pay
gimmick, to get into, public office.
tribute, when facts that I have
before me so clearly and strongly
indicate that there are very dan¬

already reached a buyer's market pair the leaks in the roof."
for heavy trucks, and one or two
We are having a clear day, and

high-price field

letters

it.

we

will have another year and a half
to two years of a strong seller's

far enough away at

present time to make this
charge without fear of any im¬
mediate repercussions.
However,

the

their

in

not

may

am

of

dealer

the

a

the
1921. As I see it,

lines of 1920 and

I

States.

are

be

bitter

page)

(Continued from first

CHRONICLE
ibo'I

FINANCIAL

&

233

.

18.7:.

—39.5 ;
—

4-0

,

*

180

.+75.,. :',+47. jr

im

m

—37.3

u

J —15.8 ^

•Volurr.? 163

.•-.•/•.•

Number 4734 .'

THE COMMERCIAL

:'

Tw-v J--S& «,r*r;

.^;

„

FINANCIAL CHRONICLE

&

What Will Happen to Taxes in '49?
there

now

52

are

legislation
burden

excise. taxes

and

wnich

bring hi an income of $7 %
billion to Uncle Sam." He said he
would "be the last one to recom¬
mend

•of these

■

'

excise taxes"

small,

operated

businesses

general type.

the

of

at

of

issue

for

same

//
some

ment

cise

matter

a

against
taxes

been

fact, the senti¬ but most co-ops
heavy Federal ex¬ taxes on earnings
of

in

■roots"

for

State and

ous

the

from
time.

some

local

"grass

The

than

governments,

"voted to
field,

so

"take"

in

to leave

as

on

have

Uncle Sam

urge

his

crease

occasion

one

companies of similar size and vol¬
ume of
business.
This point has
been so well established
by both
Senate and House investigations it

vari¬

through their fiscal spokesmen,
more

of the

-

//

(2) Increase
in
coverage
of
"Old Age and Survivors
Insurance,
-

,

under the Social
and

to

question
is:

now

bring

before

What

equity

the

in

Con¬

be

can

to

Congressmen could vote on
this issue without fear of
reprisals
from

co-op

vested

Security System, 80%

increase in the employers'
'share of the regular SS tax pay-

members

and

co-op

interests, it is certain that

of

them

-

would

vote

to

re¬

an

move

any

.

exemptions

co-ops

might enjoy.
But :i Congressmen
riieiit, to take effects in 1950., The are
wary about antagonizing such
;
extended coverage will take' in
closely-knit groups in the absence
•professional men, such as writers, of
an aroused
public taking a con¬
>doetbrsajcicf- /lawyers*/;arid'Aortie
trary; viewpoint.
: p
•//;/; p p
farriers,* and such miscellaneous
So Congress <wili
start,• pfob•groups as paid workers for charably, by defining co-ops which
itable - arid / religious,
enterprises; call
enjoy income tax exemption
heretofore not covered.
'
and how much tax exemption the
-sL^Such aji Increase in Social SC-i
Various Sizes and types of- co-ops
cnrity coyerage is a pet project "of
will enjoy.
Preference will be
-Gov;, /Thomas I E/ Dewey, of .New
given
to > strictly ,: farm > co-ops
York, more than likely to be the
which have not branched out into
next
President. /'It also
is the
other
major
business Activities
wish of a large

Family

number Of Demo¬

cratic

and

lators.

Dewey

for such

an

Republican

hot p rim a
their, original purposes; M It is pos¬

legis¬

out squarely
increase in SS cover¬
came

sible that

a compromise Between
private-small'business pressure on

age four, years ago when he was

tUtiftirig

for President.

He

the

said

to

posed

new

The

the other hand may result. In
such a case, Congress likely may
grant all small businesses a per

details"

should

not

stand

Between

the. farmer, the small,
cent,
exemption
self-employed businessman, and
to a certain
i professional* man,^ and SS cover¬ up
would make for
age. -■
"

v

soK?alled

The

Stettinius

ory
committee
Committee
on

"months

of
the
Finance

Senate

the

taxed

released

a

would

under

be

be

under

covered

sug¬

gested changes in the law.

Double-Taxation

Since

regardless

law

would

/

Corporation would

be

Dividends ;

of

required

surplus
for ulterior

built up

was

before

prove

applying
bill

provides

-

Finance

.on

dends.

might

So

that

the

actually

that

such

recommendation

a

that

back would be shorted to
instead of two.

carry¬

one

/

of

thousands

of

Amer¬

Rhine-

Stalin,

even

war.

discrepancy

Corporation liquidation
eased.
The legislation

It

Communist

/

the

political

and

the des¬

perate

the event of war, 1
assume that America,-with what¬
ever allies she might have,
many

would
would

let

corporations dispose of their
before liquidation without
providing for Any gain or loss for.
tax purposes,
if liquidation is
planned. • //
assets

weariness in Western

war

Europe.

.

In

of. them
groups,

v

underground
would

/

resistance

eventually

win.

;

But necessarily we would have to

win by the use of weapons which

would
destroy.civilization
and
The, bill known as H, R. 6712, millions
of
human
beings—al¬
also would give some concessions, though scarcely^ the human race
to' Thei man „on /"the farm£'f Soil We could not afford
victory after

conservation
as

capital

costs,

treated

now

improvements,/ would

it

was

that'

since it

won

we>

civilization in

amounts

in which the

deducted

in

any

one year.

The so-called Dobson rule, giv¬
ing the U. S. Tax Court virtually
finalof

authority to make /find ings

face, would

be

reoealed,

ing the Way for appeals

eas¬

on

tax

to

mean'

rebuild

ruined world

a

of

.

.

In

means

the

our

there

assured

no

victory for
hope there is

peacer** Whatever
lies in

There

never

American

has been

a

time in

history when the

exec¬

legislative branches

of

progressively winning

Congress had

less

no

which

than

were

seven'

studying

primary or secondaryCouncils galore, in the

a

ommendations.

Entire

bureaus

fatalistic

a

somer

the

acceptance

destruction

mass

That

war.

universal

fective

appeal

of

should

be

for

under

disarmament

international

ef¬

control.

disarmament

abolition

of

mean

atomic

of

I

By

mean

peacetime

military conscription: the demili¬
tarization

of

waterways
the principles of

narrow

and island bases;

international

be/trusted
the

forces

of

police

nation,

bombs;
military

to

armaments
a

an

should

atomic

with

thing like

even

police force

reduction

and

each

war—not

not

and

peace

some¬

level within
insofar

except

as

might be necessary to provide for
a
quota system for international
security.
Of

/

such program
practical without

no

course,

would be safe

or

certain reforms in the United Na¬

tions—at least the abolition of the
veto—and

the

provision of

a

Se¬

curity force, the mobile parts of
which

be

should

recruited

from

the smaller nations,-primarily for

preserving order—for irir

in

use

stance between the nations in the
Balkans and the Middle East. Even

the

if

Berlin

/

the

of

ance

decries

race

a

a

armament

present
any

nations

the

to

within

should be
continu¬

crisis

surmounted,

somehow

true prosperity
and
makes war

generation, at the most,
■*

virtual certainty.
I do not make this

proposal for

ending the armament race in the
belief
that
the
Kremlin would

immediately accept it..The launch¬
ing of a great idea would. I am
convinced, in time be effective
even behind the iron curtain.
In
,

support of the peoples of the
against both war and ag¬

gression.
must

be

sourceful
in

appeal,

I

even

our

this 'terrible dilemma,
be

and

the notion that conflict must

a

victory
would inspire lasting hate.
can

of

out

.

world

CAses.
-

should

have

would

be listed as'expenses and the full

spent

to

peace,

further

a

fundamental

more

move¬

overlooks

confusion in France

year

urge

for

thing that might lift men's minds

and

solution overlooks

a

international
ment.

/

be

Abolition of double-taxa¬

hundreds

the

not only of the second most pow¬
erful nation of the world, but an

would extend for five years,
instead of two years, while carry¬

should

an

Nations

tional control of atomic energy for

mean

simple
great

influence

universal

remember

United

the Baruch Plan for the interna¬

against

should it

the

firm display of force

a

force

of

its

use

na¬

of

have

militarized

he

to

universal

preven¬

in Germany and

decency

been

the

At
more

least

we

and

very

re¬

effective

than yet

putting

we

have been

meantime,
these
proposals
create the atmosphere in

the

might

which
could

a

be

European settlement
worked out on terms

the

responsibility for less
costly to the nations than the
cold war or hot squarely upon the
present cold war. Moreover, the
Kremlin.
response of the nations to the ap¬
I suggest therefore that certain
peal for the end of the armament
meaures be immediately taken by
race would
give us the best pos-,
our government.
Since this is an sible basis for a great security alelection year, and since unques¬ liance for mutual protection, al¬
tionably
Stalin
counts
on
its ways leaving the door open for

executive branch and in the legis¬
•fathered this council, it is ex¬ tion on corporate income long has
lative branch have been, or are. confusion and
tremely li keiy that. he will see to been a source of irritation to
studying taxes and making rec¬ Mr. Wallace, I
it.

who

for

appeal

that,

to deliberate

answer

over

committees

which

Berlin

land cry out for a similar threat

Section 102.
The

preventive

between
Hitler's power iri its early begin¬
purposes
penalties under ning and the power of Stalin, head

accumulated

an

in

Men

when

The Treasury
to

be

an

Hitler

stopped by

include items mot noVv per¬
missible in determining operating
losses for carry-back or/carry¬

(5) Abolition, at long' last, of
D. Millikin
(R;~
taxes as
COlo.) is Chairman of the Senate double-taxation of corporate divi¬
project.
Committee

expect

serious has been

so

aggression.

allowed

forward purposes.

was

that

to

would

or

conduct

tive, but

be

ested'in/taxation; its causes and
effects, than ' todayr
The 80th

Eugene

time

by the usual standards
tions, war would not be

rules.
tax

is

Today,

Russian

pro¬

utive and

taxes,

in

would

we

war.

the government were more inter¬

income

politburo and Tito illustrates

peasement

Federal

officially

ago

the

between

;

no tax exemptions and
small co-operatively-owned cot¬
ton gin which pays virtually no

^ employed
and
other
of its net earnings.
not now covered by SS

'should

parity in

a

self

Sen.

more

rival

and

power

desperate revolts of the ex¬
ploited.
The
dispute
between

changed, most favorably for the
taxpayers.
///.>■•,.,>■/,,/ ;■ /

enjoying

several

recommendation to the effect that

.groups

income

amount. "" This

competition between, say, a small
privately-owned cotton gin now

advis¬

"

the

net

on

establish

estate

on

df that time that "mere adminis¬
trative

hand and co-op* pressure

one

partnerships

easier

•

-

be

tions given by employers.

done

taxation

would

of

wars

for

men

what

options

of

antagonists in a Com¬
more
lightly.The
bill
would munist
world, none of them tne
permit employees to pay capitalfriends of liberty or peace.
gains tax, instead of income tax,
The opposite extreme from ap¬
on profits from cut-rate stock
op¬

argu¬

the

'

.

for

co-ops and small businesses alike,
in line with political realities? ' If

Increase in; Social Security

Coverage

The
gress

'governments.
"■

room

ments.

to de¬

the -excise
some

longer leaves

no

fgraVy. for State, city and county
•

fewer

(or "patronage
fields, has dividends") than privately-owneo

certain

growing

far

pay

lightning

strong

Miscellaneous Items

Stock

■■■

(Continued from page 15)
ful

Stock-Options and Other'

Co-ops

years.

I

What fa Do About Russia

administration, in the opiniori of a majority of tax specialists
in Washington. Briefly, here are
the provisions of this bill:

point

a

■•'

tax

//:

■

Co-op taxation has been

mass

in view

on

■known facts of government fiscal do pay some
taxes,, as every in¬
life. ^ ;;;:V-;i>'k:;^;t:r formed student of taxation
knows,
As

■

the great

repeal of

a

equalizing
the
tax
small
.co-operatives
privately downed and

35

(1131)'

—•

(Continued from page 6)

• -re. • ,*'£.

on

the sympathy of

renew a

suggestion

every

I think

nation to come in.
under

alliances

Article 51 of the

that I made earlier.

Namely, that Charter of the United Nations
icans, Congress almost did some^ have
been engaged in tax research at least in respect to the Berlin would
be better formed on the
thing about this irritation in the for Uncle
Sam, through one or crisis the State Department seek basis of the response to this pro1948 tax bill, but the Republican
A
A / raise
in the share of SS
the. other of his myriad of agen¬ conference with the Presidential
posal than some dubious defini¬
jfaxes- paid by employers has been leadership felt that it wanted to cies.
candidates or other spokesmen of tion of what constitutes democ¬
take no chances on losing a few
♦contemplated
for
many
years.
recognized
political
parties
in racy//^
to
the anti-tax cut pro¬
■But Congress, by passage of a law votes
Overwhelming Importance of
order to present a program with
Along with these specific pro¬
Taxation ■'
.intermittently, has put off the ponents. So this reform was held
a
maximum
possible degree of
posals there must go a resolute
No other
planned increase.
It is generally over for later action.
Perhaps most Americans do not American support.
concern to set our own democratic
has
more
ardent
bi¬
conceded now that the most re¬ measure
know it, or do not understand it,
The measures I suggest are house in order, The same radio
cent action of Congress along this partisan support in both houses of but the fact is that taxation has
these:
'
'
which'brought grave news from
line represented the "last" time Congress, but, unfortunately, no become a major factor in the life
reaches the floor of the Senate in

^legislative form next yean

•

;

,

other

and the contemplated higher rates

will take effect when

sion

seems

the exten¬

the

period ends.

(3)

Changes

in

the

In

corporate

the

tax

field

to be able to generate quite

same

tion.

Coroqrate Tax Inequities

in

measure

vicious type of opposi¬

But it will be passed in '49.

addition

to

of which

these

reforms-

of every

citizen.

What shapes the

tax reforms of 1949 will take will
be

of

intrinsic

interest

to

to be long
structure to iron out present ap¬ overdue to many tax students and government
as
we
know it
parent inequities in the under¬ legislators in Washington—there closely related to the kinds
is an excellent chance that the taxes Congressmen
go,000 net income brackets.
levy.
It
The so-called "kink" in the

many

than

corporations earning

$50 000

a" year

cor¬

to

rela¬

pay

and will pass

cor¬

both Houses of Con¬

porations earning from $30,000 gress in 1949. This bill passed the
up to $50;000, has been
a sub¬ House of Representatives on June
ject
of complaint to
business 19, final day of the regular ses¬
groups for some, years. .- So far. sion, but has been resting in a
Congress has not acted because of cubbyhole in the Senate Commit¬
tee

various pressures, but
will
see
a
different
folded.

1949 likely
story un¬
This particular "kink" is

going;to be

on

ring
crisis,

Finance

The Co-ops

;

,

:V ./<

in committee.

But the bill will be

Bar¬

A.'"'./

brought
again early in the next session.

to

all

is

up

brought

an

announcement

and

peace, but an assurance that we
shall continue to feed and protect

liver the world from
or

from

war.

Communism
'

■

'

1

the

If present Assembly of the United Nations
is nothing to consider Russian aggression as
to fear from Congress in the way a threat to world peace. The di¬
of destructive taxation, purpose¬ rect power of the United Nations
fully enacted.
The men in con¬ is notoriously weak, but the right
trol—and almost certain to re¬ sort of appeal to the Assembly
main in control for a time—know might do a great deal to clarify
the thinking of the whole world
the bases for this nation's pros¬
on
the present crisis. The prob¬
perous life and^they. are going to able Russian position has enough
do nothing, intentionally at least, elements of weakness so that a
to change our econdmic founda¬ realistic dictatorship would hesi¬
the power to destroy."
trends continue, there

Berlin

peoples > of of Herman Talmadge's victory in
American aims; a repudiation of
Georgia.; It is not the America
any desire fori military or impe¬
of a Herman Talmadge and his
rial aggrandizement; a convincing
statement of our desire for world racist supporters which can den
governments

Halsey, Stuart & Go. ;
Offers Wheeling Equip.
Stuart & Go. Inc. won
Aug. 8 of $1,600,000
series Q, 2Vs% serial equipment
trust certificates, maturing $80,000*
each March 15 and Sept. 15, 194^
Halsey,

the

award

The certificates,
Philadelphia plan
immediately re-offered, sub-'

to 1958, inclusive.
issued under the
were

jet to ICC authorization, at prices?
to
yield from 1.35% to 2.40%,;
according to maturity.

tate deliberately to bring on war
The certificates will be issued
Congressional definition, by
It tions.
With the help of business
in the face of the whole non- to provide for not more than 80 %.
law, of exactly what tvoes of would not cost Uncle Sam more
constituents; they can do much to Communist world.
of the cost, estimated at $2,000,000,'
co-ops can be exempted from pay¬ than $400,000,000 in annual rev¬
ing income taxes on/"patronage enue, and it would do much ;to assure us that future legislators
(3) In addition to the solemn of 500 new 50-ton, all steel Gon-~
dividends"
American avowal of responsibility dola cars.
(i.e.,/ "profits"), and iron out many kinks in present will not take the wrong road.

(4)

*.

since.

an

will die

I

ever

extraordinary
foreign
Congress
will
not
re¬
convene
this year and this bill

'•">/

ironed out.

<

,

more

tively fewer taxes than small

is

of

,

explanation

people of Berlin whom we
so-called Tax Revisions Bill, in¬ truer now—infinitely truer—than have no right to desert under the
troduced by Representative Har¬ it was 80 years ago (when Chief pressure of blockades and Com¬
/ f;;
'
old^ Knutson
(R;"Minn.) during Justice John Marshall said it) munist-inspired riots.
last spring will be re-introduced that "the power to tax involves
(2)
A formal appeal to
the

porate tax law which allows some
larger

seem

all

Americans, rich and poor, in busi¬
ness or out, on farms or in cities.
The very life of representative

(1) Public

'

■

////




v-.i.

/v

'////

r

-

.....

-,...

.

30

THE

(1132)

.

COMMERCIAL

Securities
•

Air
June
♦

-

-

'

17

(no par value), of which 600 shares will be sold
publicly at $100 per share.
Underwriter — Burnham &
Co.
Proceeds—To be used to engage in limited helicop-

& Investment- Co.,

-

construction^ program

Central

Maine

writing—Company
1947

and

,

share of

new common

tenth share of
Edison

Arizona

-

common

;
■

Company,

Inc.,

Ariz.

Phoenix,

Price

(letter of notification) 24,000 shares ($5 par)
stock.
Price—$12.50 per share.
Offered lor

new

for each

common

by amendment.

Central

Nov. 21

-

for each

Power

&

Secretary

common

//

/

•

(estimated

be

•

-

.

-

(9/20)

($10 par)

/

stockholders...

Electric

*

:

■

stock.

common

Underwriter—Carl M. Loeb, Rhoades & Co.
To selling

at

company's general funds.
used to purchase equipment

August 26 filed 25,000 shares
/

Proceeds—

;

//

'

Vendors,

moneys

stock.

Offering—Common stockholders of

rec¬

advanced
For

and

services

rendered.

'business operations.

No

"

.

under-*

J,

*

-

Family Finance Corp. (9/22)
Sep.. 2 filed 25,000. shares of 4% % cumulative preference

stock, series A (par $50) (convertible to and including
to

share.

No

underwriter.

To

increase

Aug. 1, 1956)
be

($1 par)

conversion

of

stock

common

the

preferred stock,
Proceeds—To
reduce outstanding bank loans and commercial paper*/t4
H.

Rollins

&

Son,

Inc.-

First Guardian Securities Corp., New York

City

June 4 filed 36,000 shares of 5%

preferred stock

1V2 warrants) at $2.75 per unit, the balance
15,000 shares being reserved for exercise of 15,000
warrants, purchasers of which will have the right for

common

for

four years to purchase shares at $2.75
per share.
Gen¬
eral corporate purposes.
Underwriter—Dunne & Co.,

stock.

cumulative convertible
($25 par) and 172,000 shares ($1 par)
(72,000 shares of common to be reserved

mon.

New York,
,

Clares tat Mfg. Co^ Inc., Brooklyn, N.Y. (10/1)
Aug. 26 (letter of notification) 37,400 shares of 50£
cumulative convertible preferred stock. Underwriter—
.

Cantor, Fitzgerald & Co., Inc., New York:
share. Working capital, etc.

'

for

Underwriter—E.

share and

/•-/Black Warrior Mining Co., Spokane, Wash.,
Aug. 20 (letter of notification) 100,000 shares capital
stock (par 50).
Price—50 cents per share.- For devel¬

and 97,580 shares

reserved

of

Underwriting,, certain officers of

would

franchises

of

to

$185,000 for working capital.

writer.

•

Chieftain Products, Inc., Brooklyn (9/21-24)
Aug. 3 (letter of notification) 25,000 shares of common
stock and 20,000 warrants. Offering—10,000 shares and
15,000 warrants to be offered in units (one common

•

opment work;

sale

added

Eastern Corp., Brewer, Me.

•.

Light Co.

$230,000

the

be

filed

at-$12 per
working capital.

/

New Orleans, La.
Sept. 13 (letter of' notification) 199,900 shares of 6%
nbii-participating and noh-cumulative preferred (par $1).
To be offered at par, with one share of common (no par)
as a bonus with each .20: shares ;of preferred purchased.
No underwriten To cdmplete organization of the com-

'gapy.

About
and

from

will

held

B. & H. lnc.,

{ •

v

/

•

obtained

be

100,000

Sept. 7 will be given right to subscribe on or before
Oct. 29 on basis of one new share for each 21 shares

Machlin, Executive Vice-Presi¬
the company.
Underwriter^

of
Inc., New. York,'

>

ord

Armstrong Rubber Co., West Haven, Conn.

and

t/

■

Manufacturing / Co., St. Louis, Mo.
shares (80c par) common stock.
Underwriter—White
Set Co., St. Louis./ Price—$5 per
share.
Proceeds, plus an additional amount which may
filed

3

$100,000),

and

/

August 23 (letter of notification) 25,000 shares ($10 par)

July 8 (letter of notification) 1,000 shares of 4%% cumu¬
lative convertible preferred stock ($50 par). To be sold

F. Eberstadt & Cp.,

construction

stock reserved for exercise of warrants.

Dynacycle

one-

Century Electric Co., St. Louis, Mo;

'

dent

rejected

common

Underwriter—Minot, Kendall & Co. For working capital.
Sept.

share held.

common

Proceeds—For

stock issue is not necessary.

Armstrong Rubber Co., West Haven, Conn.
./ June 30 (letter of notification) 1,000 shares of 4%%
cumulative convertible preferred stock, ($50 par) and
2,000 shares of class A common stock. To be sold at $44
and $11.75, respectively.
This stock is being sold by
James A. Walsh, President of the Company. Underwriter
—.F. Eberstadt & Co., Inc., New York.,

.

was

preferred share and

■

at $44 each for Frederick

Under-Dec. 8,"

Inc., Minneapolis, Minn.
J
40,000 shares ($100 par) cumulative pre¬
Sept. 3 (letter of notification) 1,000 shares of common
ferred. Underwriters—Lehman Brothers; Glore, Forgan
stock, 1,000 shares of common stock which have beerj
& Co.; Dewar, Robertson & Pancoast negotiated a pur- / issued to the National Postal Distributing Co. in payment
chase contract in April, 1948, but the SEC on July 27,
for patents, patent rights, models, tools, dies, blueprints
and engineering; and 188 shares of common stock for
1948, concluded that financing by the proposed preferred

subscription by stockholders1 of record Sept. 1 on basis
one new share for each five shares held.
Rights ex¬

of

provements to, the company's properties.

submitted and

was

repyament of bank loans.

pire Sept, 15, Underwriter—Refsnes, Ely, Beck & Co.,
Phoenix, Ariz. To partially repay bank loans and to
provide funds for the construction of, additions and iiri-

called

chase warrants; 10,000 shares of common stock ($1 par);
reserved for conversion of debentures, and 10,000 share3

($1 par)

Co.

($10 par) common.
for competitive bids

only one bid, that of Blyth & Co., Inc. and

Kidder, Peabody & Co.

O. C.
Aug, 25 (letter of notification) 3,000 shares of preferred
stock, 5% cumulative, non-convertible (par $100). Price,
par.
No underwriting.
For working capital.
%

Aug. 25

,

by the company.
They bid $13.75, less $1.75 under¬
writing commission. Now expected on negotiated basis
through Blyth & Co., Inc. and Kidder, Peabody & Co.
Offering—To be offered to 6% preferred and common
stockholders for subscription on the basis of one-half

Washington,

.

ISSUE

for other general

or
,

Power

Thursday, September 16, 1943

Registration
PREVIOUS

SINCE

~

over

American Mortgage

•

ADDITIONS

CHRONICLE

Nov. 10 filed 160,000 shares

routes which the company is presently
certificated to fly or in limited helicopter commercial
work. Postponed indefinitely. ■
operation

own

in

corporate purposes.

stock

ter

its

FINANCIAL

Now

INDICATES

for

Commuting, Inc., White Plains, N. Y.
(letter of notification) 1,060 shares of capital

&

Cobalt Mines

com-

Price—$8 per

Corp., Newark,:N. J, ;.

<

-

conversion

Price—$25

a

of the preferred.)
Underwriter—None;
share for the preferred and $10 for the com¬

Fission Mines Ltd., Toronto, Canada
April 16 filed 200,000 shares of treasury stock.
writer—Mark Daniels &

Flotill

Under¬

Co., Toronto. Price—$1

a

share.

Products, Inc., Stockton, Calif.

March 6 filed 385,000 shares of 60 cent convertible pre¬
ferred stock (par $5) and 325,000 shares of common stock

(par $1).
Underwriter — Floyd D. Cerf Co.,,Chicago.
Price—preferred $10; common $6.
Proceeds — Stock¬
holders will sell 260,000 preferred shares and250,000

July 26 (letter of notification) 290,000 shares of common
stock/ / Price-^l - per share. Uridenvtiter~Charles;>^;/ common- shares. and company .125,000; preferred shares/
New Yorkand 75,000 common shares. 4 Company's nmceed«. will be
Warshoff & Co., Newark, N. J. To meet obligations, r ■>.
Sept. 7 (letter of notification) 15,000 shares of common
used for general corporate purposes: Effective May
5/
stock (par $1).
./; Coleraine Asbestos Co. Ltd., Montreal, Canada
Underwriter—The First California Co.,
•
/
Ford Gum & Machine Co., Lockport, N. Y.
fSan Frandsco,: Stockfbeing sdld by* pardi &; Co, Price • A^g,: i^ ;fUed 200,000 shares "of /capita,stock. Price/—i
Sept. 13 (letten of notification) not to exceed in the
50 cents per share in Canadian Currency.
—$4.25 per share.
Underwriter
aggregate $300,000 notes, to be offered in varying
—P. E. Frechette.
Proceeds—For drilling operations^
Born (Henry-T.), Inc., Hay
denLake,.Idaho r
amounts which are not expected to exceed $7,500. Un*
Consolidated Molybdenum, lnc., Seattle^
'Aug, 3f :(letter-of"notification) 10,000 shares of~lion*-;'
"derwritjhg—None. Working capital/ etc.
: /
assessable common* stock/ Par $1;: Price, par.
No Uh- * Sept. 10 (letter of notification) 1,470,000 shares of com¬
Fuller Brush. Co«, Hartford, Conn.
*
: V;
mon stock
(par-101). Price, par. No underwriter. For
Jderwriter.' To establish an advertising agency*. •
July 12 (letter of notification) 2,000 shares of ($100 par)
the; expenses of fining operations.
.
Brockton (Mass.) Edison Co. (10/5)
preferred stock. Priced-par. To raise working capital
; Consumers Cooperative Assoc., Kansas
; Sept.
3 filed $4,000,000 first mortgage and collateral
City, and retire existing indebtedness.
No underwriting, i < v
trust bonds, due 1978. Underwriters—Names to be deter¬
Missouri /
■///
Gauley Mountain Coal Co.,: New Yorkr mined by competitive bidding.
Oct. 16 filed $3,000,000 non-dividend common stock ($25
Probable, bidders: RalAifg. 13 (letter of notification)-6,093 shares of capital
sey/ Stuart & Co. Inc. f The "First Bostop'Co^pv; IKTdder,
par); $6,000,000 of 3V2% five-year and 4V2% 10-year
stock (par $10).
Price, par.
Stockholders of record
Pea body & Co.; Equitable Securities
Corp.
Proceeds™ / cumulative certificates of indebtedness; and $2,000,000 of
Sept,/tvwill be given-right to subscribe at rate of one
To pay $2,625,000 of promissory notes and to finance
1 Vz% demand and 2%% 6 months cumulative loan cer¬
new; share for each five shares held. Rights expire Oct,
tificates.
No underwriting,
additional; costs and corporate needs.
Bids—Bids for
Offering—Offered only to
15. Underwriting—None. General improvements, etc. 1
the purchase of the bonds will be received
stockholders and patrons and members.
Price—At face
by company
'

•

Blair

Holdings Corp

,

'

.

"

,

at

49

Oct.

Federal

Street, Boston,

up

to

11

a.mf.

(EST)

amount.

on

5./■//;■-

Proceeds^-For acquisition of additional office

and plant facilities.

•

9

Carfson-Denn Corp., Wilmington, pel.
'Aug: 24 (letter of notification) 3,500 shares (no par)
stock. * Price—$10 per share.
No underwriting. ' For
/machinery and equipment, publicity and advertising and
Working capital.
'
/
..

..

Crosbie

Co. of Washington, Inc.,
Washington, D. C.

of record Aug. 30 on

Sept. 7 (letter of notification) 50,000 shares of class A
common stock ($.1 par), 25,000 shares of class B common
stock (10d par).
Underwriter — James T. DeWitt Co.,
New York and Washington.
To be offered in units of
two shares of class A and one share Of class B at
$5 per

,

'

Castle Mining €o>;, Helena, Mont.
/
Aug. 39 (letter of notification) 600,000 shares of common/:
unit.
To reduce or pay in full present
stock.
To be sold in units of three shares at
borrowings from
$1 per unit.
the Manufacturers Credit
Underwriters
Certain officers and directors.
Corp., to reduce the present
To drive
—

a

new

tunnel,

to develop

the existing

/company's mines, to erect
company's properties.
* /

mill, and

a

" ' *

workings in
to
.

>■

•

-

;

current

r

writers
&

-r-

value

$50

per

share).

Corp.




stock.

v

Douglass

Manufacturing

Co.,

Inc.,

Portland,

Maine

Proceeds—May be used in

making additional investments in common stock equities
of its telephone subsidiaries and
may be applied in part

a subsidiary, Indiana Die Cast¬
ings, Inc., and to improve shipping and storing: facilities.
No underwriting.

Heidelberg Sports
Pittsburgh, Pa.

Enterprises,

Inc.,

•

June 25 filed 2,041 shares of clas? A common stock and
5,000 shares of class B common stock (par $100). Price

—$600,000 to be used for spectator grandstand and bal¬

of capital
Price—$100 per share.
Underwriting—None.
>Furnish capital for company's needs,
Under-n
N

Paine, Webber, Jackson & Curtis and Stone v

Webster Securities

basis of one new share for each
Rights expire Oct. 1. Price—$5 per

held.

For advances to

—Par ($100

Dentro-Matic Corp., Bronx, N. Y.
Sept. 10 • (letter of notification) 580 shares

1

Central Electric & Gas Co.,
Lincoln, Neb./
Sept. 9 filed 30,000 shares of $2.50 cumulative convertible

preferred stock /stated

shares

•

the
-

five

share:

liability position and to provide additional work¬
ing capital.

the

develop

Hail (C. M.) Lamp Co., Detroit
August 2 (letter of notification) 53,770 shares of common
stock (par $5). Offered for subscription to stockholders

*

Aug. 16 /(letter of notification) $100,000 of 5-year 5%
convertible debentures, with non-detachable stock
pur¬

ance

per

share).

Underwriter—None.

Heyden Chemical Corp.,
June

Proceeds

for related purposes.

New York,

N. Y.

r

29 .filed

59,579 shares of cumulative convertible/
preferred stock, (no par) to be/pffered common '/stock¬
holders in the ratio of
shares of

common

Underwriter—A. G.

one

stock

share of preferred for each 20
held.

Price—By

amendment.

Becker & Co. will acquire

Hhe

un-

;

Volume 168

Number 4734

THE

COMMERCIAL

•

&

FINANCIAL

CHRONICLE

Kold-Hold,

-

Manufacturing Co., Lansing, Mich.
Sept. 3; (letter of notification), up to 33,667 shares ($1
common stock.
No underwriter.
To pay past
bonuses to officers and employees.
"
Lamex Chemical

16,

September
Holly Sugar Corp

1948 ;
1——Preferred J

___

Aug. 23
■:

..;=

September 20,

,

1948

Eastern

Corp..

Official

Films Inc:___—^ Preferred

■Toledo

\

.

Co.r 11:30 a.m. (EDT)_____^_Bonds
Wisconsin Power & Light Co.
V
v

■

September
Inc

Chieftain

($5

;

/.

t

Ala.

will

share.

be

sold

No

to

14 filed 65,000 shares ($50 par) convertible
ferred stock.
Pric6 and dividend," by amendment.

$3,000,000 of bank loans and general corporate

Temporarily deferred.
•

America, Inc., Minneapolis
warrant

Un¬

-

purposes.
"■>

*

NationalHydraultc Products Corp., Reno, We v.

Sept.

stock ($1 par).
holders for $3

2

(letter /of

the

notification)

50,000

shares

($1

par)

non-assessable stock.

common

construction

1948

—

pre¬

J affray.

'

present

r,

derwriters—Goldman, Sachs & Co., New York; - Piper,
& .Hopwood, Minneapolis. Proceeds—To retire

1

working capital

common

j

July

par)

/'•!

Aug. 13 filed 100,000 shares of
Stock

For

purposes.

National Battery Co.

per

_—Common

21,

Products,

Birmingham,

Lithium Cbrp., of

■

(CDT)._,——^_----_—-—.Bonds

a.np

Corp,,

and the payment of bills.

Edison

11:30

25,000 shares

general corporate

•

6% preferred and 25yO00 shares (100 par) common.
To
be sold in units of one share of common and one share
oA preferred at $5 per unit.
curities

Common

and

(letter of riotiffCatibn)

of 5% preferred

^Underwriter—Mallory Se¬

.Common

_____

Com.) Birmingham, Ala.

37

and 891 of the common). The 109 shares of
preferred re¬
maining will be offered in exchange for a like number
now outstanding.
No underwriter.
For

par)

NEW ISSUE CALENDAR

(1133)

working capital.

dralic oil pumps.

•

Underwriting—None. For
marketing of pilot models of hy-

'•

underwriting.

Proceeds—For additional

and

'

Ohio Edison .Co:, H a m. (EDT)__Bonds
Pacific Tel. & Tel. Ca./ll:30 a.m. (ED).Debentures

September 22, 1948
Family Finance Corp.
—_____-Preference
Southwestern Associated Telephone Co.—Preferred
.

.

t
••

23,

September

United Utilities & Specialty
v»

-

j.'-'v': r

1948

}'■

\

L

,;v :

Noon .(CST)

i

noon

:

': v

*•':

Co.:*

*—Common

■

^September

$9^ .1948'

•

;?

Clarostat Mfg. Co., lnc—_'_
October

—Preferred

5,

1948

Brockton Edison Co._^

development and extension of the business.

:•

__Bonds

,»r

Pacific Gas & Electric Co.

——Bends
"

Martin-Beadle Co., Beverly Hills,

Northern Enterprises Co., I«tc.
(Philippines)
Sept. 2 filed '50Q\shafe$ :of class A fetpck amf 1,500 shares'
of class B stock.,
;Pri6e/-€lass A, $102.50 per - share aiixi
class B $100 tper share. '♦ Underwriting^-None.
Proceeds
rrrFoh $awmill: jnacMrrery and equipment, purchase - of
general metohahdisewahd hardwares, etc.
.

v

.

y-

>'t'p?

Calif,

Official

5%

mortgage

bonds,

capital.

20-year (closed) bond issue.
Underwriter—E. W.
Hughes & Co. For new plant construction and improve¬
ment of existing plant.

petitive

($100 par) and 500,000 shares

($10 par) common
stock.
Underwriter
Tom G. Taylor & Co., Missoula,
Mont.
Price—$300 per unit, consisting of two shares of
preferred and 10 shares of common stock. Proceeds—To
erect and operate a bleached sulphate pulp, mill with a
*•»

f

s*

r'

•*'

International

;*?

T

'K.>:'<?

Asbestos

^/.;.^Quebec-.--v^<-

;

\
'

4

t

Co.,

Ltd.,

4*

\

-

•

*

Barney

stockholders at rate of one share of each seven
shares held of record Sept. 22. Commonwealth & South¬

Corp. owns 90 % of the outstanding common. Price—
$27.50 per share. Proceeds—To make an additional
$900,000 investment • in its
subsidiary, Pennsylvania Power

each.

Proceeds—To

construct

Price

milling plant; and

used

Negro Television Film /

Association, Inc., New York
Sept. 14 (letter of notification) 500 shares of $5 cumu¬
lative preferred stock (par SI00) and 500 class B com¬
mon shares (par $1).Underwriting—None.
Price—Prelerred/par; common, $10 per share.^'Purchase of photo¬
graphic equipment, etc. "
1
tn' \ v
—
Interstate Power Co.,

Dubuque, Iowa,

Underwriters—Names will be determined through

com¬

petitive bidding.' Probable bidders: Halsey, Stuart & Co.
Inc.; The First Boston Corp.; Smith, Barney & Co.: Pro¬
ceeds—Of the proceeds, $2,400,000 is to be applied to pre¬

payment of promissory notes, $1,400,000 will pay in full
the $724,446 balance on a lease and purchase agreement
and for property additions; and $1,200,000 will deposited
with corporate trustee under bond indenture, available

tor, withdrawal against property additions.

Ivey

derwriter— R. S. Dickson & Co.
the

i

Un¬

Proceeds—To pay part

purchase price of all

Soya Products Co., Inc.
(letter of notification) 78,000 shares (25c par)
common stock and
1,925 shares of $5 cumulative pre¬
stock.

Underwriter—Kenneth

For additional working

capital.

Van
;

.■

Sickle,
'

;

C

Inc.
.

Kold-Hold

Aug.

6

common

Manufacturing Co., Lansing,' Mich.
(letter of notification) 36,666 shares ($1 par)
stock.

determined

be

bidders

for

61

•

000

MX

Shares will be issued to H. B. Johnson

improvements,

•-

Monarch

Machine

Tool

Co., Sidney, O.

•

Insurance

Mutual

Finance

Proceeds—Stock being sold

Co., Tampa,

,

Fla.

Sept. 8 (letter of notification) 1,000 shares of 6% cumu¬
lative preferred stock, ($100 par), 891. shares common

of

(no par). To be offfered stockholders for exchange

and sale,

in units of one share of preferred and one share
(only in amounts totaling 891 of preferred

common

'

of

■

'V

(par $5).
Price—$15
per
share.
Underwriter—First
Securities
Corp., Durham, N. C.
Offering—26,667 shares will be
initially offered on a "when, as and if issued" basis;
13,333 shares will be purchased by underwriter for pub¬
lic

private offerings; and the remaining 40,000 shares
be publicly offered on a "best efforts
basis" on
completion of the subscription of the first 40.000 shares
or

will

and the

North

company's receipt of

Carolina.

a

license to do business in

Proceeds—For

general

business

pur¬

poses. %

-

Pacific Coast

.

Aggregates, Inc., San Francisco,

California

///;.?{"*.

'.

:

g

Aug. 20 filed 184,245 shares of common stock ($5 par).
Underwriters—Blyth & Co., Inc., and Schwabacheiv&
Co.*; Offering—Offered ;to
common
stockholders
of
record

Sept. 15, in ratio of one new share for each three
Rights expire Sept. 30. Price—$4 per share.
Proceeds—For working capital.
shares held.

• :

Pacific Finance Corp. of Calif., Los
Angeiies /
Sept. 8 filed 30,000 shares ($10 pai) common stock, issu¬
>

able upon conversion of 15,000 shares of
outstanding pre¬
ferred stock, 5% series.
No underwriting.
To be added
to the sinking fund for the
purchase or

redemption of
preferred stock is then out¬
standing, the proceeds will be used for general corporate
the preferred stock.

/purposes.
•

-

If

no

•;>-v

.

Pacific

Gas

&

Electric

Co.,

(10/5)

Sept.
■

10 filed

San

.

<

Francisco

.

$75,000,000 first and

refunding

mortgage

bonds,, series R, due June 1, 1982. Underwriters—Names
determined through competitive bidding.
Probable bid¬

ceived by the company Oct. 5.

•

Co.

sale

ders; Blyth & Co., Inc.; Halsey, Stuart & Co. Inc.; The.
First Boston'Corp. * Proceeds—To retire
$12,000,000 bank,

,

;

competitive bidding rule

100,000 shares of capital stock

Hawley, Shepard & Co., Inc.
by certain stockholders.

Buckley Securities Corp.




filed

loans

stock

"

24

13 filed 26,000 shares of common stock (no par);'
Underwriters—F. Eberstadt & Co., Inc. and Prescott,

Sept.

and J. J. McQuaid on conversion of $55,000 of 5% con¬
vertible-debenture
bonds, due -1955.
Underwriter—

*

of company's common will receive the
pro¬
Underwriters—Standard has asked the Commis¬

Old North State

June

Cooperative Wholesale,
Minneapolis, Minn.
Aug. 9 filed 15,000 shares of Preferred stock D, noncumulative
($100 par).
Underwriting—None.
Shares
are to be sold at par, plus a premium of $1, $2, and $3
for the second, third and fourth quarters, respectively,
in which they are sold, representing an allowance for
and

y

with, underwriters for the
stocli:;.',. V

the

.

additions

(EDT)

a.m.

shares

ceeds.

Michigan Racing Association, Inc., Detroit
Sept. 9 filed 3,065 shares of 5% cumulative preferred
stock (par $1,000) and 3,815 shares of common stock (par
$100)r ri. Price, par for each class.
The stock offering is
to be made through company officers to about 300 se¬
lected persons and none o£ the proceeds of the offering
will be received by the company until the entire $4,750,000 has been paid in cash and until authorization to con¬
duct horse racing has been obtained by the company
from the Michigan Racing Commission.
Underwriting—
None.
Proceeds—To purchase real estate and for con¬
struction of the racing plant.

for

to 11

Oklahoma Gas A Electrre Co.

sion to exempt |the issue from
and has negotiated

up: to noon

Proceeds

up

13 filed 400,000 shares ($20 par) common stock.
Offering—Standard* Gas & Electric Co. which owns
750,-

as

dividends.

purchase of the bonds will be
Commonwealth & Southern Corp.

Sept.

•

7

for
of

■

&Sachs.(jointly).

(EST) Sept. 28 at Room .2601;
Broadway, New York. /l'
f

Bids—Bids

(N. Y.), 20 Pine Street, New York,
Sept. 21.

through com¬
bonds include

inventory and accounts receivable.

Kansas

Aug. 2

ferred

notes.

„

the outstanding shares of
the Yowell Drew-Ivey Co.'s common stock, the remain¬
der of the purchase price to be paid from the cash funds
of J. B. Ivey & Co.
'• \ 'v.' ' ; * : >;.\ '»;
)

to

Probable

own and its
subsidiaries, and
$3,125,000 of outstanding instalment

prepayment of

received at office

":V Midland

(J. B.)

& Co., Charlotte, N. C. y
Sept. 3 filed 100,000 shares ($5 par) common stock.

of

bidders.

received

>

>

Sept. 10 filed $5,000.-000,first mortgage bonds, due 1978.

•£;'l

v*

Power

v

•

for

a partial payment to subsidiary, Edison Light &
Co., for purchased power,, and $950,000 of this
$1,500,000 will be for Edison Light's construction activi¬
ties; and $3,450,000 will be applied to improvements on
the company's facilities.
Registration statement effec¬
tive Sept/ 7.
Bids—Bids for purchase of securities will

purchase equipment.
International

Co.; for construction of its
'

working
-

due

ern

proceeds company will add a $1,500,000
capital contribution from parent, General Public Utili¬
ties Corp. and use the money as follows: $3,500,000 will
go for construction and improvements; $1,500,000 will be

1,500,000 shares ($1 par) common stock.
Underwriter—Paul E. Frechette, Hartford, Conn., is the
U. S. authorized agent and principal underwriter.

1

Seeuritie*

;

common

Proceeds—To the

■

Jan. 30 filed

—^$1

*

v

;

Stanley & Co.; Glore, Forgan & Co.; Shields & Co.
White,-Weld & Co. (jointly); Halsey, Stuart & Cd.
Inc. Offering—Stock will be offered for
subscription by

Co.; Halsey, Stuart & Co. Inc.; Harriman Ripley & Co.,
Inc.; Kidder, Peabody & Co.; Salomon Bros. & Hutzler.
probably will include Drexel
Harriman Ripley & (^9.; Kid¬
der/ Peabody & Co.; Salomon Bros. & (Huizler; Bmith,

Sherbrooke,
'

■;

Aetna

gan

Bidders for preferred stock
& Co.: Glore, Forgan & Co.;

£

v

•

for-,

—

and

1,, 1953. >'No

and

Underwriter

common stock; Underwriters
—Underwriters of bonds will be determined
through com¬
petitive bidding. Probable bidders for the bonds:' Mor¬

The First Boston Corp.; Drexel & Co.; Glore, Forgan &

—

l-r'-

debt

^

Underwriters—Names

May 17 filed 100,000 shares of 4% cumulative preferred

200-ton per day capacity,

Aug.

due

of

.

1978, and 285,713 shares of

Metropolitan Edison Co.
(9/28)
August 19 filed $3,500,000 first mortgage bonds, due 1978,
and 40,000 shares ($100 par) cumulative preferred stock.

Idaho-Montana Pulp & Paper Co., Poison, Mont.
stock

retirement

Working capital and other general

purposes.

Ohio Edison Co., Akron, Ohio (9/21)
August 20 filed $12,000,000 first mortgage bonds,
;

;

first

•/.v i3s.

(9/20)

Corp., New York..

\ Matheson Co., Inc., East Rutherford, N. J. : 1
Sept. 7 (letter of notification) 5,000 shares of 6% cumu¬
lative preferred stock
(par $20) and 1,000 shares of
provement and expansion of manufacturing facilities.
common stock* (no par).
Underwriter—Mohawk Valley
Offering postponed.
Investing Co., Inc., Utica, N. Y. To be offered in units
;
of five preferred shares and one common share at $100
Holly Sugar Corp. (9/16-17)
August 19 filed 185,000 shares ($30 par) cumulative pre¬ f per unit. Replenish working capital funds for payments
ferred stock, convertiblef into common stock.
on
account of capital stock of Paragon Testing .Labo¬
Under¬
writer—Central Republic Co., Inc. Proceeds—To reduce
ratories, ete.S
short-term bank loans of $16,900,000 incurred for the
•
Mathie-Ruder Brewing Co., Wausau, Wis.
purpose of producing and carrying inventories.
Sept. 8 (letter of notification) $125,000 of convertible 55%

share of each.

one

corporate

Subscribed shares. Proceeds—To be used in part for im¬

underwriter.i For

-films,f:iac^':Bew York

July 16 (letter of notification) 49,000 shares 350 cumula¬
tive preferred stock (par $5) and 49,000 shares of com¬
mon, stock (par 100).
Price—$6 per unit, consisting of

f • ' Marting Bros. Co., Portsmouth, Ohio J
!
0 Sept. 2, $200,000 of 15-year 5% debentures. yNo under¬
writer.
For additional working capital, retirement of
present outstanding 5% debentures and purchase of emplovee's capital stock.
v "V)

year

with stock

Sept. 1, 1948/ due on ' of - be^
1,: 1951. No underwriter.: To pay current ih^
clebtedness and to provide funds for
corporate expense.

Sept. 3 (letter of notification) 6,100 capital shares (par
$10).
Price, par.
No underwriter. - To develop-and
build additional machinery for prepackaging vegetables,

Hygenic Service Co., Boulder, Colo.
August 16 (letter of, notification) $50,000 first mortgage

or

purchase privilege,; dated

Chicago, III. r
'• r;:,Sept. 13 (letter of notification) 10,000 shares of capital
stock (par $1). -Price, par.
No underwriter. For fur¬
ther

v

.

,

North Butte

fore' Sept.,

-7'

'

"£«-«

1

Sup¬

■

,

lative callable protected notes, convertible

Rights expire Sept. 20.; Underworking capital. •,.■■■:
:
;
«

'

Mining Co., Butte, Mont.
Sept. 7, (letter pi notification) $300,000 3-year 6% cumu-i

'

Southern Pacific Co., noon (EST)..Equip. Tr. Ctfs.
Tennessee Gas Transmission

•

Additional

t Manila Mine Development Corporation,

•

(EST)_^_—J.Bonds...V

ply, Inc.

,

writing—None.
;

company of all the assets of Coast to Coast Trailer

Co., New York
,
r
.
<
Aug. 11 (letter of notification) 4,871 common shares (par
$1),
Price—$15 per share. Stockholders -of record Aug.
'20 have the fight to subscribe on basis of one new share
for each 15 shares held.

.Eqiuip. Trust Ctfs.

Metropolitan Edison Co.,

v

v-'i/j.—;'.*

September - 28,y 1948
Chicago Milwaukee St. Paul & Pacific RR.
<■

Maitine

Corp.__4^_rvPreferredt>

if**#,i.♦.»>■;•!«:? •

c.

•

h

National Trailer Stores, lnc., Los
Angeles
Sept. 7 .(letter of notification) $106,572 of subordinated
promissory notes.
No underwriter. For transfer to the

Maguire Industries Inc., New York »
Sept. 9 (letter of notification) 8,000 shares of common
stock (par $1). Price
(approximately) 700-750 per share.
Shares will be sold by Auchincloss, Parker &
Redpath.
Proceeds to selling stockholder.

gram.

and

pay

for part of company's construction

Bids—Bids

for

purchase

of

bonds

.

will

be

pro-1
re-;

*

Pacific

Telephone & Telegraph Co. (9/21)
August 20 filed $75,000,000 35-year debentures, due 1983*
Underwriters—Names

to

be

determined

through com-j
Morgan Stanley &j
Co.; Halsey, Stuart & Co. Inc. Proceeds—To
reimburse]'
treasury for costs of improving and enlarging telephone!
(Continued on page 38)
* —
petitive bidding.

.

.

^

-W!

Probable bidders:

38

THE

(1134)
(Continued from page 37)

to meet the costs of its own construction as

that

of

its

subsidiary,

Telephone

Bell

(EDT) Sept. 21.

a.m.

;

as

•

will be re¬
York, up to

;

Drilling, Inc., Casper, Wyo.
July 14 (letter of notif ieation) 800,000 shares (250 par)
common stock.
Price—25 cents per share. • Underwrite!
—John G. Perry & Co., For drilling operations.

Thursday, September 16, 1948

to

in

Prospective^Offerings

,

•

Southwestern

Associated Tel.

Co.

(9/22-24)

Aug. 24 filed 22,000 shares of ,$2.60 cumulative (no par) v
preferred stock.
Underwriters — Paine, Webber,Jackson & Curtis; Stone & Webster Securities .Corp.; ? RausV

Public Service electric & Gas Co.
Proceeds—For property

CHRONICLE

Smith-Dieterich

;

cher, Pierce & Co. Price by amendment. r ProceedsrTo pay, In part, bank loans used for .construction, pur.*

June 11 filed 200,000 shares ($100 par) cumulative pre¬
ferred stock.

FINANCIAL

:#
Corp., New York
Bigelow-Sanford Carpet Co., Inc.-i..;;j.:
j.
Sept. 8 (letter of notification) 24,000 shares of class B * Sept. 13
company announced its intention to Tile a regis+
common
stock.
Price—$10 per share, ^Underwriting^-.
tration statement with the SEC in near future
covering '
None.
Manufacturing and selling or licensing use of
30,000 shares .convertible second preferred stock. "ProbT
motion picture and television lenses pf special type $
|able underwriter—F. S. Moseley & Co.;.
:
y„y" j
developed by corporation.
.• ' - 1

Powers Oil A

>

are

be held

Cp. of Nevada.

Bids—Bids for purchase of the debentures
ceived at Room 2315, 195 Broadway, New
11:20

well

&

be sold to public and 6;000 shares are to
treasury,; For promotion, development' and
sale'Of product.
...£>
/ '•
k'
shares

<

.plant; to repay advances from American Telephone &
Telegraph Co., parent, and its bank borrowings; and bal*
ance

COMMERCIAL

additions and im¬

^

,

-

v

'tr

I..

h•---

A"-" "-•

j

■

,9;.y-X_liipagO' Milwaukee St.. Paul. & Pacifie rr.

j
j-

licates, series FF, will be received up to noon
(CSTj
Sept. 28 at Room ?44, Union Station Bldg/ Chicago. Cer-f
itificates will be dated Oct. 1, 1948 and will mature
600 semi-annually

Aug. 4

Quebec Oil Development Ltd., Montreal, Can.
Aug. 4 filed 2,000,000 shares of capital stock, ($1 par
Canadian funds).
Underwriter—Hiscox, Van Meter &

^

a;!*(9/28)I

Squankum Feed Supply Co., inc.; Farmingdala,
New Jersey
(letter of notification) $150,000 20-year 5%%
sinking fund debentures.
Price—102.
Working capital, etc. Underwriter—Fidelity Securities & Investment
Co., Inc., Asbury Park, N.-J.„
^,
? * \

proposed sale from the competitive bidding rule so that
the sale may be negotiated.

Water Service Co.

Bids fpr the purchase of $6,600,000 equipment trust certiL

poses,

provements. Underwriting—The company rejected bids
submitted Aug; 4. The SEC on Aug. 23 exempted the

California

;Sept. 4 reported company contemplates the sale of about
$3,500,OOC in new securiiies, partly in bonds and partly
fix preferred stocks.
*
4 -h.

$330,4
Probably

April T> 1949-Oct. 1; 1958.

bidders include: Halsey/Stuart & Co. Inc ; Salomon Bros*"
'&

Hutzler; The" "First Boston Corp.; Harris Hall & ;Cc

|(Iric.); Harriman Ripley & Co.

and Lehman Brother
Canada
|(jointly). . :
April 2 filed-300,000 shared (par $1) preferred stock.
Underwriter—Mark Daniels & Co., Toronto; Canada. < Sept. 13
company asked permission to sell an additiona
Prlce-^frcpnts a share. propeeds-rFor: mine developri 1,223,000 shares of common
stock to common stockhpld

Co., Inc. Price, $1 per share (United States funds). Fox
•each 20,000 shares of stock sold; the company will de¬
liver to the underwriter stock purchase warrants en¬

Tabor Lake Gold Mines, Ltd.; Toronto,

titling the holder to purchase, on or before Sept. 1, 1050,
1,000 shares of capital stock of the company at $1.50 per
share, proceeds—For drilling operations. *

meets.

I

'

lers of record

Sept. 7 - filed .400,000* shares

($5 par) eommon <■ stock;
Underwriters—Stone & Webster Securities Corp. and
white, Weld
Co. Price by amendment. / Proceedsr^Fpr expansion of the company's pipe line system.; ✓
Tide Water

....

Power

-

Co., Wilmington, N.

July 30 filed 60,000 shares (no par)

St. Anthony Mines Ltd., Toronto, Can.

common:

-

about Oct. 5, 1948.

Additional shares

istanding, plus additional shares

not purchased by

other

^stockholders. Subscription price and other terms will bp
jfiled by amendthent/;
The re will be ho

,but;the cpmpqny plans tQ arrange

C.

stocks Un»

derwriters—Union Securities Corp. and W. C. Langley &
Co.
Price by amendment.
Propeeds^Fpr bonstimctiod.

Aug. 6 filed 1,088,843 common shares (par $1). Price,
40 cents per share. Underwriter—Old Colony Securities
Ltd. of. Toronto. Proceeds for gold mining operations.

on or

plrill/be offered ipr subseriptipn byCatopkhoiders^
pE /pneM
10

Tennessee Gas Transmission Co.19/28-30)

Remington Corp., Cortland, N. Y.
Aug. 31 (letter of notification) 5,620 shares of common
stock (par $5). Price—$7.25 per share. UnderwritersEastman & Co. and Grabau-Buchman, Syracuse, N. Y.,
will act as selling agents,
Development of airrcondir
tioning units. etc.

underwriting^
for the payment of

fees to members of the NASD fpr
.every subscription for
Common stoclc solieitec!.'/
j

aiew
•

.

Consumers Rower

.

Indefinitely postponed.

"

-

1

*"

'.

-; -t

-

jSept. 10 SEC authbriied .compahy to sell 458,158 addi4
jtional corprpon. shares. Jto its common stockholders in

Toledo Edipon Co. (9/20)
♦ratio pf one pew share, for each nine shares, held, at
August 19 filed $5,000,000 first mortgage bonds, due 1978.
Underwriters—Names to be determined through .com^; $33 per share. The stockholders will also have the right
(no par), with class A common share purchase warrants
;to subscribe to additional common shares not purchased
petitive bidding.
Probable bidders include:
attached and 25,000 shares of common stock reserved foi
Halsey,
Stuart & Co. Inc.; The First Boston Corp. and Glore;For»by-other-stockholders; - - - — ■
^..»i
warrants.
Underwriter—Lee Hjgginson Corp.; Proceeds
gan & Co. (jointly); Lehman Brothers and Bear, Stearns
-—For general corporate purposes. Indefinite,
•
Cooper-Ressemer Co; "
& Co. (jointly); W. C. Langley &
Co.; Kidder, Peabody
t
Silver Ridge Mining Co., Ltd., Nelson, B. C.y
SepL 14 stockholders-authorized directors to selLup td
& Co., and White, Weld &
Co.; Union Securities Corp.,
Canada
90,000 shares of common stock (par $5) for cash without
and Salomon Bros. & Hutzler. Proceeds—-dTpr construe*
requiring that such'shares be first offered I'm* subscript
Aug. 24 filed 1,106,600 shares of common stock (500 par).
tion.
Bids—Bids for purchase of the bonds will be re¬
tion hy existing' common stockholders.
No immediate
Underwriters—Harry P. Pearson, managing director of
ceived at Room 1600, 70 Pine Street, New York, up to
action is contemplated, however.
company, and Richard K. Fudge and Victor Semenza, co¬
'
11:30 a.m. (EDT) Sept. 20.
partners of Pennaluna & Co.
Price—300 per share U. S.
•
Northern. States Power Co. (Minn.)
Trenton Chemical Co., Detroit, Mich.
funds.
Proceeds—f ur exploration and other develop¬
Sept. 10 reported Standard Gas & Electric Co. contem¬
ment work, ic ?»ay off loans and for other purposes.
Aug. 23 filed 175,000 shares of 6% cumulative convert¬
plates sale of Northern States' common stock -which
ible Class B preference stock ($2 par).
Underwriter—
•
Petroleum Engineers Producing Corp., Tulsa,
Standard will receive under recapitalization
plqn of
Carr & Co., Detroit.
Offering—To be offered at $2.25
Oklahoma ;
Northern States Power Co. (Del.)
;;
,per shares Pmeeds—Tot build and^eQUifLa plant ;ahd
Sept. 7 (letter of notification) 3,400 shares ($25 par)'
.•
Peabody Coal Co.
/replace working capital.
.preferred stock and 1,700 shares of common stock. Offer¬
Oct, 5/ stockholders / will /vhte pn increasing: authorized
United Casualty Co., Cedar
Shoe

Corp. of America, Columbus, O,

June 28 filed 25,000 shares of cumulative preferred stock

„

•

ing—To be offered in units of two shares of preferred
(each unit to have one war¬
rant entitling the holder, to buy two additional shares of
common
at $30 per share).
Underwriter — Central

Rapids
August 18 (letter of notification) 10,000 shares of con¬
vertible cumulative preferred stock ($10 par), with priv¬
ilege of conversion at any time before redemption on a

Royalties Company. To purchase and develop additional
oil properties.
• ! '
s
t

share-for-share basis for

and one share of common

•

stock ($10 par).

offered at $25 per share without
crease

A Electronics Corp., Boston

Power Condenser

common

common

and

up
pre

To be

program, the management states, adding
more than $5,600,000 will be needed soon of ihp
proposed $10,900,000.
The financing may be undertaken
by sale of common or debentures, or a combination of
these and other methods.
Traditional underwrite? of

underwriting.' To in¬

that hot

United Utilities & Specialty Corp. (9/23)
Sept. 3 (letter of notification) $300,000 of 6% sinking
July 29 filed 41,000 shares, of 5% cumulative convertible
debentures, due April 15, 1958, and 30,000 shares
preferred stock ($10 par)* Underwriters—Herrick, Wad($1 par) common stock.
To be sold in units of one
$1,000 debenture and 100 shares of common stock for | dell & Reed, Inc., and George R. Cooley & Co., Inc.
Proceeds—For general, corporate purposes.
$1,000.
Underwriter-r-r-Luckhurst & Co., New York.

fund

•

•

Sept. 10 filed 102,000 shares <np par)

Pruke

Hybrid Co., Eastern Division, Inc., Glen
Haven, Wis.

Public

Service Co. of New

Hampshire

Sept. 9 filed $7,000,000 first mortgage bonds, series D,
<hie 1978.
Underwriters — Names will be determined
through competitive bidding. Probable bidders: Halsey,
Stpart & Co. Inc.; Kidder, Peabody. & Co. and Blyth &
Co., Inc. (jointly). ' Proceeds—Of the proceeds, $3,600,000 will pe applied to the reduction of outstanding shortterm bank

borrowings.

the indenture trustee,

$3,400,000 will be deposited with
available for withdrawal against

•

Realty Co., Denver, Colo.
Sept. 8 (letter of notification)

1,000

assessable capital stock ($1 par).;
share.
Underwriters—Ralph S.

shares

of

non¬

To be sold at $27 per

Young and J. A. Hogle

•

For working capital.

Reynolds

•
.

(R. J.)

Tobacco Co., Winston-Salem,

n. c.'

•

stock

will

be

issued

transferable

subscription

warrants

stock

entitling them to subscribe to the preferred
pt the rate of one preferred share for each 37.6923

shares held

on

record

date.

Proceeds—Will be

gage bonds and 66,000 shares of preferred stock.
Out of
the funds thus raised, the company said, it will redeem
its $5,500,000 3% convertible debenture issqe.

underwritten by The First Boston
Lemon & Co.
Proceeds—For conpurposes,

Probable

bidders:

Brothers;

•.

&

Co./Inc.; Lehman

Bros. & Hutzler; Blyth & Co., Inc.;
Cummins, Inc.; Glore, Forgan & Co. and
Ripley & Co., Inc. (jointly); Shields & Co.;
White, Weld & Co. and Kidder, Peabody & Co. (jointly);
Harris, Hall & Co. (Inc.); The1 First Boston Corp., Offer¬

Wheelock

A

Rosecroft

Trotting & Pacing Association, Inc.,
Washington, D. C.
Sept. 9 (letter of notification) 1,414 shares ($100 par)
common stock and 1,414 shares
($100 par) 6% cumula¬
tive preferred stock.
No underwriter, v
•
Skidmaster Chain Inc.,
Bethlehem, Pa.
Sept. 8 (letter of notification) 25,000 shares of capital
stock (no par).
Price—$10 per share. Of the stock to
be issued 9,690 shares are to be issued to Howard Fritte
estate in payment for services and patent rights; 3,325
shares are to be issued - to present
stockholders; 5,986




ing—The

common

stock

is

being

offered

to

•
Southern Indiana Gas ^ Efectric Co. •
Sept. 10 SEC exempted from competitive bidding Com-!
monwealth & Southern Corp.'s proposed sale of
400,000.;,/:
common shares of Southern Indiana. The SEC reserved
jurisdiction oyer the results of the negotiated sale.,

common

stockholders .of record Sept. 3 for subscription at $13.50
per share at the rate of one additional share for each,
four shares held.
Rights expire, Sept.. 28*. Employees

0

given right to purchase 12,000 shares at $13.50
by stockholders.
Middle West Corp.
plans to subscribe for 169,458 shares. ,Proceeds—To re¬
unsubscribed

Room 2117,165

Broadway, Npw York; pp to noon (EST>
Certificates will mature in. 10 equal annual
instalments.
Probable bidders include: Halsey, Stuart &
Co. Inc.; Harriman Ripley & Co. and Lehman Brothers
(jointly); Salomon Bros. & Hutzler; Harris, Hall & Coi
(Inc).
Sept. 28.

imburse company for construction expenditures made or
to be made, except that $494,000 will be used to
prepay

like

amount

Bids for

the

of outstanding 2% serial notes.
Bids—
purchase of the bonds will be received at

;

office of Middle West Service Co., 20 N. Wacker Drive,

Chicago,

up

Wood

Aug.

25

to 11:30
(Alan)

filed

a.m.

•

(CDT) Sept. 20.

Steel Co,

$6,300,000

'(7/22)

\

Southern Pacific Co.. (9/28)

Bids for the purchase of $11,050,000 equipment trust cer¬
tificates, series Y, will be received at company's office

will be

a

//5ap:'jp$«:,WAter-;Wiftrks.

Septv ^ reported company; may .issue^^mew;s^curiiic^ 4q /
meet its new.capital requirerpent.
Amoynt/and type of
securities not indicated.
'
,
/
. ...
,

Salomon

Stuart

-

probable
:bidders: Halsey/ Stuart jk Co. Inc./(bonds; only); The /
First: postcm Corpi/^ Bobttcho? & Co,/and IBoswprth,
; Glore; Fdrgah
and W/ C;
Langley 3c Co. (joiptly).
'
:.

including /the Repayment
•
> - J.

borrowings*;

Halsey,

on approyipg new financr
To raise funds to carry through its

large construction-program during the next 18 naonthk
the company proposes to sell $10,000,000 of first
'mort¬

Wisconsin Rower A 4-ight Co. (9/2.0)-a
: V
j
Aug. 17 filed $5,000,000 first mortgage bonds, series C,
due 1978, and 320,232 shares ($10
par) common stock.
Underwriting—Bonds will be sold at competitive bidding.

applied

to the reduction of short-term notes.
•

stock.

common stockholders in ratio of
share for each five shares held.
Underwriting—

Unsubscribed shares
Corp. and Johnston,
struction and other:
of $2,000,000 of bank

if

Sept. 15 filed $60,000,000 of indentures, due Oct. 1, 1973,
and 260,000 shares of preferred stock (par $100). Under¬
writer—Dillon, Read & Co. Inc. and Reynolds & Co.Offering—Holders of the common stock and new class B
common

common

Public Service Co/ of Colorado

ing for the company.

Harriman

property additions.1

& Co.

•

Oct. 19 stockholders will vote

Offering—To be offered

*

•

bonds:, Halsey, Stuart & Co. InC.

Washington Gas Light Co.

one new

Sept. 13: (letter of notification) 1,500 shares of common
£tock (par $100). Price, par. Nq underwriter. Fpr work¬
ing capital

to $10,000.000 additional capital. Additional funds
needed to complete the company's -constructipn apd

replacement

capital and surplus.

Mainly for laboratory -equipment and working capital.

stock from 2,500,000 to 4,000,000 shares (par $5)
the directors at their discretion to raise

to permit

Southern

Railway

.

(9/29X

.

;

r

I /;

Bids for the purchase of* $8,700,000 equipment trust
cer-j
tificates, series OO, dated Oct. 15, 1948 and due semi¬

L

first

mortgage sinking fund. / annually April .15, T949-Oct. 15, 1958, wiH be received
bonds, due 1963 (with stock purchase warrants). Under¬
by-the company, up to noon (EST) Sept. .29.
Probable
Proceeds—Will be used, together
bidders include: Harriman Ripley & Co., and Lehman
with treasury funds, to complete the
Brothers (jointly); Halsey, Stuart & Co. Inc.; Salomon
purchase and in¬
stallation of a 30-inch hot-rolled strip mill and the con¬
Bros.'& Hutzler; T^e"First Boston Corp.y Kphn,;Loeb Jc
struction of accessory equipment. Warrants—Each
$1,000
Co., and Blyth & Co., Inc. *
.

writer—Drexel & Co.

bond

will

have

attached

a

stock

purchase warrant for

the purchase of 15 common shares at

$15

per

share. :

•

•

Yeakley Oil Co., Alamosa, Colo.

v

15

<

:

v"-//

stockholders .approved the

issuance of 120,000
preferred stock. ($50 par) to'
be sold publicly. Proceeds will be used to increase the
company's working capital; • Fiornblower & Weeks may
shares of

April 30 filed 10.000 shares of common stock (par $10) L
Underwriting—None. Price—$10 per share. Proceeds—;

Mainly for development.

■Whit#

V ; Sept.

~— •be-

new

convertible

underwriters.

■■

Volume 168

Number 4734

THE

COMMERCIAL

&

FINANCIAL' CHRONICLE

Tax Institute to Hold

Moore and Simmons
(Continued from

V,'

"

page' 5)

V'- '■IV:

;

ning of the century, which as this column has previously demon¬
strated, warrants at least some misgivings, let us look at the recent
record of the system.

;y,-;

71

V.-Ps, of Welsh, Davis
CHICAGO, ILL.—Welsh, Davis
and

-"I'l

v

Company, 135 South La Salle

Street,

Chasing "Resistance Points"

J

Moore

'

that

announce

and

Allen

remember that in June, 1938, a bull market was "confirmed" at the 127 level, only to be reversed with a downward bear

*

"signal" at 131 in March, 1939.
:bull market was again signaled

Thereupon, the following July

a

at 142, to be again reversed the
.following January at 145.
Then, the Dow followers were presum¬
ably out of the market, or possibly short, for 4V2 years until the 145
resistance point was again reached in June, 1944.
We

;

will

that

remember

the

market

thereupon

207

to

rose

.January, 194-3; followed by a sharp fall to 186 in February, and then
new rise through the 207-resistance point to 213 in. May,
1946.
.Then there was another decline during that summer which, in Sep¬
tember, plunged the market on an accelerated bear signal "break¬
-through" the previous February resistance level of 186.
Then the
index sank to
163 within a month, which resistance point, held
"through the following May's decline.i !
17 : '
/ •
v'
:

Thereupon,

rally followed to

a

Simmons

have become associated with them

Vice-Presidents. Mr. Moore

as

15-17

in

"all-important"

a). new

up-side

with

Inc.;

Simmons

Mason, Moran & Co,

Equity."

sessions

more

and

John F.

Partridge has been

retary,

C.

one

(after the rails had

i

through the 187.7 level,

-"bull

market."

break-through) finally

thereby confirming to
at 1this

Immediately

all

and

one

signal the market's

rose

a

two sessions of
,

.v

.

;

;

a

new

entrance

The
No.
a

DELAWARE,

at

the

rate

year-end extra

on

the

30th,
27th,

of

20

-

dividend of

Common Stock,

Notice
the

they had solid, out lower down 18 months

bargain-seeking publicum, whose

187 resistance
of short

and

declared

Stock

-

the momentum would) chrry . somewhat further.

i Jr P.

>

"this'Com-

payable October 15,
of

holders

record

W.

30,

United Shoe

remain open.

ATKINSON,

The

Treasurer

"trend,"

;•

-

despite

all

Rboular. Quarterly

EkTRA

baltimore

momentum sufficient only to carry the index from 188 to 193, where-

:

[ after

perversely-drifted

it ha^most

TAflik equally; disconcerting

down to>-

present 180 ieveL

thei; resulting obfuscation of tfiia sup*

imporla^

iposedly

'.

:The

Board

Arundel

■'

V

if

.

7

■

r.

*

■

■!

'

-

-v

■■•r

.

.

••••.'.

•

•

■

*■■■*„

f-

■

the- marketV obtuse

1

-f

'

•

*,

•

.

.

• '

.

(

■ ■

i- -.4

-i-rii*-■

of Barron's:

■

.■

on

to.
-

?

the highs which

the Dow-Jones' industrial and, railroad

regarded

as

the

the
of

insufficient to put it in

a

1
/,

•

labeled

j

are

When

'borderline case-of this sort the only
the interpretation can

| 3$ choose (sk)^
"If

was

one or

,,

both

thai

method

into

runs

a

thing, to do is to admit thai

correctly be whichever the student wishes

I Qly

71

•-

t

Allen B. Du Mont

then both rise above the highs; of last Tiiesday f185.36 and 63.12)1

j

the movement since the August lows will be regarded as

|

ary uptrend;

,

market will have

,

been reconfirmed"—"The Dow Analyst"

I

'

In other words, it appears as

inserted

haphazardly

recently made

ponents

the

theorist doesn't wait

i Dow

that

impression

'? penetration."

individual

by

and is

(25c

declared

ing

5%

ferred

day

commencing

Inc.

ing September

30,

been

Bv Du

the

for
1,

1948

of

outstand¬

convertible

Allen

July

has

the

on

cumulative
stock of

Laboratories,

record

share)

per

this

dividend

Such

a

(sic)

pronunciamento

Dow

contradictory

on

theorists

that

to

buy

pronouncement

excusing palpable

when

the

of

"a

ex¬

good

"correct the
and

sell

on

conveniently
errors

of their

system by such assertions as that the real cognoscenti omnisciently

Theory then and avoided losses by either buying

So

we

are

post facto

impression

according

that

to

here

how

it

is

actually
tions

are

really

.guise of

an

only

smart

follow

their

and

the

15,

close

on

subjective

ordered, scientific system. j1-vy

system
at

that

is

particular

whose

opera¬

intuition, under the false

J;.;;.

Sep¬

on

dividends

Secretary and Treasurer
Philadelphia 32, September 10, 1948

on

the

at

on

BRITISH-AMERICAN

the

of 25c per

rate

share

the close

at

the

period

and

A

the close of

at

Paul

Stock

Stock,

Holders
this

Coupon

sj 'Call for

Raibourn,

PHILIP MORRIS*

New York, N. Y.

Philip Morris &Co.

Ltd., inc.

dividend

quarterly

regular

The

of

Stock,
declared pay¬
able November 1, 1948 to holders of
Preferred Stock of the respective series
of record at the close of business on
3.60'/<-

have been

Series

1948.

October 14,

There

also

has

The Hoard of Directors of the Seaboard

quarterly dividend

Finance Co. declared

on

dend of 45

quarterly divi¬

share

cents a

on

Common

Stock

payable October 10,1948 ro stock¬
holders of record September 23,
194*^,
PREFERRED

5th Consecutive

The directors

DIVIDEND

STOCK

Quarterly Payment

also

declared

a

cenrs a

Convertible Preferred Stock,

October

record

10,

1948

to

A. E.
.

y

share

payable

stockholders of'

September 23, 1918.

August 26, 1948

regular

:

-

-

Treasurer \

Bearer Stock
must

with

202

to

ob¬

deposit

the

Guar¬

declared

been

able

October

Common

15,

Stock

of

record

at

Pursuant

to

the

1945,

10,

or

Certificate representing

no

of

shares

Common

Stock

a

for any purpose, until surrendered, and

Certificate

Common
each

Holders

Certificates

or

Stock of the

shall

been

have

of

par

Certificates

for

for

therefor.

shares

of

Common Stock of the par value of $10
each are, therefore, urged to exchange

such

Certificates,

for

Certificates

for

Common Stock of the par value of

$5 per share, on the basis of two sharesof

new

Stock

Common

$5

par

value,

for each share of Common Stock of the
par

value of $10.L.

G.

HANSON,

E.

19th

August,

*
Treasurer.

'

1948.

G.

LANGFORD,

Secretary.
Rusham House, Egham, Surrey.
"

Stockholders

titled

who may be en¬
by virtue of Article X1II(1)

of the Double Taxation

new

value of $5

issued

Bank

BY ORDER

of

the par value of $10 each is recognized,
a

DATED

close

the Stockholders' Meeting held on July
share

National Provincial

1948.

adopted at

resolution

a

the

on

Limited,
Savoy
Court,
Strand,
London, W. C. 2., for examination
five clear business days (excluding
Saturday) before payment is made.

of 37V2C per share
($5 Par), pay¬
1948 to holders of

of business on September 30,

usual

214%

Coupon No. 90 must be deposited

the Common Stock,

new

WEIDMANi

Preferred

Cumulative

the

on

a

No.

with the

lar quarterly dividend of 90c per share

DIVIDEND

of

dividend

half-yearly dividend
th® 5% Preference
Stock (less Income Tax) for the
year ending 30th
September jaext
will' also be payable on the 3Qth
September 1948.

$1.00 per share on the Cumulative Pre¬
ferred Stock, 4 'h Series, and the regu¬

Quarterly Payment

free of

Company of New York,
32,
Lombard
Street, London,
E. C. 3., for examination five clear
business- days
(excluding Satur¬
day) before payment is made.

September 14,1948.

STOCK

on

year

anty Trust

on

The

COMMON

the

United King¬
Tax, will be payable
30th September 1948.

tain

on

of

54th Consecutive

dividend

for

Income

on

1948

8,

interim

dom

1948.

Treasurer

September

BEARER.

second

nary

end¬

business

of

WAR¬

ending 30th September 1948, of
one. shilling
for each £1 of Ordi¬

September 16, 1948.

3,

TO

STOCK

Ordinary

the

to

MILTON L. SELBY, Secretary.

September

TO

PREFERENCE

of $1.25 per share

stockholders of record

pre¬

DIVIDENDS

ot

,

payable October 1, 1948

business

OF

HOLDERS OF ORDINARY AND

the 5% Preferred

on

rate

NOTICE

to

RANTS

September 16, 1948.
at

TOBACCO COMPANY, LIMITED

Common

1948.

"Dow Theorists"

experienced speculators

own




a

works

times; and that in their market practice successful

the close of business

at

'

1948 to share holders of

1,
at

September

on

given the

ex

Safeway
September 3,

Mont

1948, payable

quarterly dividend of 65

before the signal appeared or else not at all.

legitimized

the"

cents

tember ?0, 1948. Checks will be mailed.

payable October 1, 1948

and is

kind of

a

practitioners

signals,"- and went

on

'competent'

did not follow the

?

l'/4%

quarterly

comprehensibly

For example, one

startling

whitewashes their usual practice of

*

Stock is

Stock is
initial

777 77'7.1.1'i

*

the market has gone off the track.

from

($.75) per
share on the Common Stock, payable
September 30, .1948, to stockholders of
record

1

{ (as stated hereinabove); but not so.the exceptions,yemendations, and

,

have declared

Directors

Accumulated Surplus of the Company a

Preferred Stocks.
dividend

The dividend

comprehensible only to a small minority of the inner

11n reality, the Theory is' perfectly simple and

I violations,

Quarterly Dividend

-

Company's $5 Par Value Common

business

DIVIDEND

of-excusing, its shortcomings ^by accusing all other observers of not

sanctum membership.

Secretary

dividend of seventy-five

the habit of practically all. the voluble, Dow Theory defenders.

cult which is

|

Laboratories, Int.

second-

a

If pie averages both top* the summer highs, 4fie bull

understanding the theory.

192nd Consecutive

The

yThe-significance of such< indefiniteness by an expert is consistent

1 with

company

1948.

Parkbr

.X.;yyX

stockholders of record

October

'

hold above the August" lows arid

averages now

The Electric Storage Battery

holders of

'

and 5 %

only six

j

j

September 9, 1948

the

PREFERRED

those of secondary rather than pri-

system.

.

to

Dale

1948 declared quarterly

v

movements. ^Nevertheless, in every other respect a joint
break-through would qualify for the label of bear market under

*thg tenets,of the Dow

...

state

Preferred and Common

ir

An

Such proportions

per

close of business October 5,

'1,

1948k

It

mary

I

14,

bear

a

thai the movement could

August low was only 13 points, and in the rails it
points.

November 15, 1948,

on

Stores, Incorporated,

"The total decline in the industrial average from June to the

I

at

iV
Treasurer.
KEMP'.

56

Safeway Stores, Incorporated

MARSHALL G. NORRIS,
.yy y
Secretary

September

should both be

averages

classification.

a

No.

304 per share

at

The

important

M.

15per-share

corporation's books at the close
September 21, 1948.

decline from

method of analyzing market' patterns.

so

and

business

bear market, although its total size is perhaps

a

record

1948,

H. C. ALLAN

r

would perhaps, have, been better to say

:

The Board of Directors of

broken* the whole movement, would have- to be

I

per

had- then just been reached the August lows in

•market under the Dow

WALLACE

payable

are

of

14,

1

1y Stock Dividends

stated that if on

was

|

j

record

J'August Bottoms Being Tested"
"Last week in this space it

be

payable

The

V.

<

stock

September

de¬

the
both

on

has

and after October T,, 1948,
stockholders of record on

.

Analyst in the current (Sept. 13) issue

■■■'*';'

•

,

f

*

L ..V.

dividends

stockholders

the

on

issued

behavior; seems well J^Lustrated. by, the following

Interpretation by The Dow

cents

of

has this day
share as the

on the
value stock of the corpora¬
and outstanding,, pay¬

par

tion

Bewilderment] of the Faithful

-Z

J

Directors

regular quarterly dividend,
no

Such definUipu-difficulties. bV even the experts resulting from

■t

cif

Corporation

able

/X

55

......

Total

of
-7"~;

to

business

de¬

on

also

share

per

The

Common

1948,

of

have

sbare

per

They' have

62 ^c

stock.

and

5,

close

Corporation

maayiand.

!

declared 25

}perhaps "Sideway."

Directors

M.*'«•..»< 154

.>♦.. •

...

Treasurer.

the following dividends:

Stock—No.

Common

/tQBMRATI0N\

developed

of

Board

declared this day

[ARUNDEL)

fanfare,

the

capital

of

'

A

BACH,

37'^c

stock.

dividend

a

GAS SYSTEM, INC.

The practitioners

of

capital

Preferred

the

of" this

dividend

a

October

THE COLUMBIA

The

H.

Machinery Corporation

Directors

clared

Preferred

coverers

*

1948.

September 8, 1948

the

.f

.

Stock

1948, to stock'

September

The stock transfer books will
E.

STATIONERY

&

given that a dividend at
share on the issued and

per

11,

clared

^^enxi waslnowun^
S.—The; Bull

$.50

Dividend Notice

pofht'had been- unceasingly drummed; and by

.saiithe

hereby

Corporation

October

the Cap-

on

of

September

1948.
Transfer books will not be closed.
SYLVAN COLE, Chairman of the Board.

positions who, unsure of themselves* figured that at least

City's do¬
66.

now

shares without par value of the
of Western Tablet & Stationery
has
been
declared
payable
on
1948, to the holders of record of
such
shares
at
the
close
of
business
on
September 23.
Common

pre¬

ears

is

TABLET

Is
of

rate

Common

viously rby-thenbn-Dow:

manager.

outstanding

-gates were overwhelmed by the faithful Dow-ists who had been out
of the market since

the

others requiring

as

E.

record

and

of

.CORPORATION,

v, •

.

>,

regular quarterly divi'
per share has^

ital

dividend

share,

per

parts

DIVIDEND NOTICES
WESTERN

A

10 cents per share
payable September

both

1948, to stockholders of

well

as

mestic branches

DIVIDEND NOTICES

pany,

declared

cents

all

The total of National

dend of 75

INC.

Board of Directors has

28

for

phrey, Jr. is

gen¬

LION OIL

15.

NATIONAL SHIRT SHOPS
OF

banking needs of

arriving from

banking services. George B. Hum¬

i

.

for the

ap¬

DIVIDEND NOTICES

After much fanfare and several false starts, last May the industrials

i

own

;

COMPANY

level.

^

achieved their

one on

administration

tax
>

or

world,

Hetterick, Sec¬

of Sept.

as

City
Bank
of
opened a new

has

travelers

departing

State

oa

one

administration,

income

pointed Executive Vice-President
and Miss Anne

National
York

care

air

Federal income

on

administration,

local

to

in

Achieving
There will be three or

eral- nature.

"

at the

New

tional Airport to enable the bank

Administration

was

was

York

The

<

Dec.

on

branch at the New York Internar-

.

Mr.

held

Hotel

.

Co.,

-

1947;

resistance

New

income tax

&

be

;

The subject will be
Significance of Income Tax

"The

been

establishedv

which

symposium of the Tax

will

Pennsylvania.

tax

previously with Braun; Bosworth

-

187.7 the following July,

A,

The next

Institute

39

Nat'I City Opens Branch
At N. Y. Int'I Airport

Symposium in December

in

;a

/

James

*L.

We will

(1135)

tween

United

the

United

Kingdom,

under

Section-131

States

Internal

Treaty be¬

States
to

of

and

the

Revenue

the

credit

tax

a

United

Code

can

by

application to Guaranty Trust
Company of New York obtain .cer¬
tificates giving particulars of rates
of
United Kingdom Income Tax

appropriate to all the above
tioned dividends.

men¬

COMMERCIAL

THE

FINANCIAL

&

CHRONICLE

Thursday, September 16, 1948
;and

BUSINESS BUZZ

getting

mixed

in

up

all

sorts of fights, Mr. Hoover took

the former., He probably could.
not do otherwise.

luctance
week

before

BeHind-the-Scene Interpretations
from the Nation's

was

the

capital city

Capital

of

the

Only with
date

a

last
talk

in

to discuss

the

some

above background.

commission
from

come

to

Club

Press
even

Incidentally, many
"leaks" purporting to ?.
the

re¬

he persuaded

make

to

will

the

of, the
what

say

recommend

"task

22

groups"
studying the 22 separate broad
phases of government reorganiza¬
tion. These 22 separate groups in¬
dependently are proposing • what
they think best.
Their findings
.

■

have

not

The

yet

coordinated.

been

commission

is

coordinating
them, so that what comes up will
be a unified, whole program.
In the process many of these
supposed "tips" will not pan out.

eooote<-co,
STOCKS

Probably nobody will know au¬
thoritatively what the commission

BONOS

really

will

recommend

7

is

It

too

until

-

January. ', '•'

•

"7.,

perhaps wise not to take

seriously

the

now

supposed

"inside dope" as to what the com¬

mission Is purported to be favor-*

ing.

What

is

Hoover

Three With Herrick,
Waddell & Reed, Inc.

significant

about the
study is that

commission

(Special

;it is not directed only at that dull
thing
called
"reorganization."
,There is nothing more dreary than
conventional

bureaucratic

-

on

for

reor-

under

"be

tent,"

one

to

start a;

put under the HousHome Finance Agency.

5la; the

devour it.

process a few appointive
board members of formerly hide?

7JToo

$l2,000-a-year jobs.* Then at the

j,

7 which

% an

to * use

Is

far

so

-

lending

v

since

House

function.

So

reorganizationplan

sets

a

up

government

obscure

who

was

chief of the

chief for the old
chief of the

agency

new.

office desks and

process,

files

move

from

ment

building to another.

follows

a

at
one

-lot

government

''ex¬

downtown govern¬
of

work

,

There

shifting

telephone connections and

execu¬

tive buzzers.

In the process the
painters 7 and
decorators get a fresh spate of
business.
Finally, the carpenters
get something, too, for partitions
goVernment-hired

*

in

government

•Ways

buildings are algetting knocked down and

7

facile wisecrack to

The

commis¬

sion; is directed to look

at func¬

tions;, from
whether
ford

recent

reorganization,

re-

ex-

and

might be

efficiency.,
a

theoretical

l

tagei to

certain

agencies.

,

This

There

groupings




in

normal

times

pay

for

U. S. Finishing

Dorset Fabrics
respect probably the
chief handicap to achievement is

Lonsdale Co.
Seated OiB

the fact that the Hoover Commis¬

for

reason

is

that

will
their behalf with

of
ate

the

U.

Si

which

movement
swamp

the

would

threatened bureaucracy.:

•

prospective

is possible, perhaps even probable,
to

see

ridiculed

them

into

ob-

livion.
On

commission

the

posing and why, and
there,

is7

what

the

mends

utterly
Hoover
It

without: publicity,' with*
out the public being -informed
what

"one-shot"
middle
^

of

the

other hand,- a govern¬

sincere about fight-?

.

pro¬

recom¬

become a
around .the

January.

HA. 2-8780

Teletype N. Y. 1-1301

■■

Trading Marketer
7

Ralston Steel Gar

in detail,

may

story

small

One

>

>

I Oregon Portland Cement
Riverside Cement A &

Spokane* Portland Cement

part of it will' get in the papers
for

a

more

7 from

day., or so; with nothing,
except the condemnations
vested 7 interestsof

the

bureaucracy;

ment half ;way

is

commission

and why

Exchange PI., N. Y. 5

?

prospect * that:

every

ESTABLISHED"'I 919

•■,-.»

Yet

a com¬

commission^ recommendations.

40

independence might be
impaired, for the furies of hell
are nothing as to the wrath of
a

they

j

<

Membert N. Y, Security Dealers Asfn

istrative

con¬

'••,.7.77";777.7.77'•

important, it must not let any
bureau suspect that in some way
that; bureau's: business or admin¬

7 Against

adequate

.

7

! 7

'

the " dilemma
public

of

LERNER &
777:'7

,

10 Post Office

in¬

CO,

?

Investment Securities ;I;;:>U

Square, Boston 9, Mass.

Telephone Hubbard 1990

.

Teletype BS 69

understanding'

a

a

HAnover 2-0050

proper state func-

tion and what is

a

Teletype—NY 1-971

■

function.

velt

Administration, the

have

all

but

Since
lost

the

their

Firm Trading Markets

Fed-

j

Roose-

>

proper

eral

states j
rights.;

,They still have the power to
incorporate business, but their
regulation is strictly limited by j
over-riding Federal statues. One !■
clear state power is the general

police

of

power,

"civil, rights"

ad-

vantage is offset, however, by 7

Belle Isle Corp.

The Commission is also study¬

advan-

theoretical

can

$40 billion govern¬
ment out of current revenues.
7

[

money. '•■? There is -little
evidence,
either,
that
it
has

Reiter Foster Oil
-

Treasury is not going to be able
to

7

cept in the rarest instance, has

viewpoint

government

them.

ing what is

saved^

promoted

the

the

Affording them does
not mean
being able to borrow to
keep them going in normal times,

port that nobody much has ever;
offered convincing evidence that
any

excitement:

arouse

•

no

Two other factors in the back¬

ground of the Hoover commission

put up again. 7. '7 ■■;-7 77;.-:.:; •*
It is

a

South Jersey Gas

this

In

ing to be hurt if the Hoover Com¬
mission;
carried out, combining in one big
7

pense

Was offered by
administrative and eco¬

best

the

bination of pressure groups stand¬

becomes

»

agencies^/

vast majority of

It is possible to imagine

new agency, and
assistant
planning

,

on

Congress.

agency,

former

In the

existence

the

terrific

arouse

cater to vast groups which

planning, for the

;

whose

exert effort
..

for» the XYZ
agency becomes assistant chief of
the

to

people,

a

loan

7 are

planning

will

The government is ;

made up of dozens of

7

The fellow

engaging in

.

opposition.

new

government

-}

Wini¬

and

,

What follows is first that jobs
liquidated but ; not payrolls,

.

veto power is
third of both-the

tinued

super-duper

7 agency.

bright

—

Senate; the President* sion must seemingly operate in
of next year must "buy" totf if the
the closest secrecy.. The commis¬
thing is to get. anywhere.
7 sion
must
not
let
its findings
Obviously
in
the
anything
"leak" to become an issue in the
way of restrictions of the size of
present political campaign. • More

hypothetical,

some

a

PA.

•

-7be proposal, that it

President's

a

equivalent to

lending supervisory

a

can

commission

mendations, to be achieved, must
be
ordered
by
Congress.
And

agency,

is

Hoover

The commission can only nomic; brains of the country, and
recommend.
It cannot, by itself, that it represented the hard but
effect any curtailment or reshuf¬ inevitable way out of the cancer
high
cost
government
and
fling of the vast Federal bureau¬ of
cratic ^establishment.
Its recom¬ bureaucracy.

that VA loan
guaranteeing is a lending func-j
lion,
that
Home
Loan
Bank
Board

;

| PHILADELPHIA,
fred R. Galbraith is

panic!". 7

study.

example

somebody decides that FHA is

much, -of- course,
of the

made

minimum 10 times and probiably usually 100 times that "sav¬
ings" is spent on setting up over¬
lapping super-housing
research
agencies, super-housing divisions
M '■ lawyers,
duplicating 7 superplanning agencies for housing (to
plan ways to get more appropria¬
tions), and super-publicity divi¬
sions.
77
77'; 7; ^/:.w7^77;7 j:.

*

securities business from offices at

j pendent agencies lose $10,000 and

[very'

\

ing the rising cost and encroach¬
The Barclay, 18th & Rittenhouse
ment • of- government might take a
Square.''; *':• 7" ' ' •"
:
notion to support the thing on the
basis that it was a
bi-partisan

sector, too, the Federal officials
are working up an appetite; to

;

City.

W. R. Galbraith Opens

Do you7want to

"For Pete's sake, Mister, move on!

are

Then, ,

Chronicle)

-

Icop; the current ;jargon: of* the
|town. So all agencies relating to
jhousing
ling and

Financial

Inc. of New York

cides, to use an example from hisjtory, that '• all housing » agencies
should

The

•

NEB.—John Bixby
of
Geneva,- Shirley Norton
of
York, and; Herbert $wedburg of
Clay Center are now. connected
with- Herrick; Waddell & Reed,

.Somebody de¬

years.

tp

^

7 LINCOLN,

! ganizations.ViThey have been go¬

ing

:77t/'7;77.;-■

'

-

invade this.
i

but1

proposed j

legislation

would

Another clear state

function is education, but in this

Marketr and Situations for Dealers

(".ML MAMS 4 r.O- INC.

s
•7 •

77'-'7"'
:

-

7'"'"7

•-7/,

50 Broad Siroei

■'

foreign securities .7.
--

^

specialists
-

120 Broadway, New

-

■777

-

7 ">77
"7-v

Now York 4, N. Y,

hmUATZ: CARL MARKS A CO. Inc. CHICAGO

Tel. REctor 2-2020

York 5

-

Tele. NY 1 -2680

Volume 168

Number 4734

THE

■:r:J'z.

•*'

COMMERCIAL

&

FINANCIAL

Pictorial Insert I

CHRONICLE

:

i
*

i

E

I

Desmond

John

John J.

Frank

McCarthy, Merrill Lynch, Pierce, Fenner & Eeane; John J. O'Kane, Jr.,
O'Kane, Jr. & Co., President of the Security Traders Association of New
York; Robert A. Torpie, Merrill Lynch, Pierce, Fenner & Beane; Harry D. Miller,
Nugent & Igoe, East Orange, N. J.

M.

C.

Mayer, Merrill Lynch, Pierce, Fenner & Beane, and Ben Van Keegan,
Masterson & Co. (at piano)—a hot combination that helped to chase
away

the blues on a very rainy day

vMSmMWw

Edmund

Cantlie,

Harry Frank, Weinberg, Frank & Co.; Arthur E. Schwartz, Bache & Co.;
Edwin L. Beck, Commercial & Financial Chronicle

A. Whiting, Kaiser & Co.; Harold B. Smith, Collin, Norton & Co.; J. W
Campbell & Co., Newark, N. J.; J. W. Roos, McBride, Miller & Co.

'

Newark, N. J,

Henry Oetjen,

McGinnis, Bamptdn & Sellgcr; Barney Nieman, Carl Marks & Co
Hugh Kilmer, Hardy & Co. J:/::,::..r.::




Jeff

Horsfield, Wm. J. Mericka & Co.; Stan
Heaney, Joseph McManus &

Roggenburg, Ucggenburg & Co.; Mike

Co.; Frank A. Pavis, Chas. E. Quincey &

Co.

THE

Pictorial Insert II

COMMERCIAL & FINANCIAL CHRONICLE

jw

.<

Walter

Lou

Dean Witter & Co.; Everett R. Rubien, Dean Witter & Co.;
John Laver, E. A. Purcell & Co.

Bachman, Burton, Cluett & Dana; Reid Rankin, R. H. Johnson & Co.; Walter
F. Saunders. Dominion Securities Corporation

Walker,

Thursday, September 16, 1948

September 10th

Hold 1948 Summer iOuting

Charlie Bruggeman,

'

National




Quotation

Bureau;

Tom

Philadelphia

Love,

George

E.
,

Snyder

&

Co.,

Arthur

Hamill,
Wm.

Dr.

H.

R.

Lee Higginson

Rosenwaid

Corp.; Max

Barysh,

Ernst

& Co.; Frank WiJliams,

Enterprises; Burton A. Barysh. P. F. Fox & Co.

Berglind, guest; A. P. Morris, Estabrook & Co.; H. R. Schmitt,

*'Pulis,

Dowling & Co,

Elmer E. Myers, George B. Wallace & Co.; August G. Fuchs, George B. Wallace &
Co.; Edward E. Trost, guest; Julius D. Brown, Hirsch & Co.

Volume 168

COMMERCIAL

THE

Number 4734

&

FINANCIAL

Pictorial Insert III

CHRONICLE

At Travers Island Club

Arnold J. Wechsler,

Roger F. P. McMahon, Jacquin, Bliss & Stanley; H. B. Perkins, guest;
Boucher, Fahnestock & Co.; Chet de Willers, C. E. de Willers

John

W

French, A. C. Allyn & Co.; Gus Levy, Goldman, Sachs & Co.;
A. C Allyn & Co., Chicago; Milton Steinbach, Wertheim

Jerome H. P
& Co.

T. M. Wakeley,
& Co.

Richard C. Roberts, Stuyvesant F.
[Morris, Jr, & Co.; Connie Sheridan, Mitchell & Co.; Everett F. Wendler,, /-

B. Smith, Stuyvesant'

I




F. Morris, Jr. & Co.;

Mitchell & Co.

-S-

John M. Hudson, Thayer, Baker &
Jr., Peabody, Tyner & Co., Mt. Vernon, N.
Zingraf, Laurence M. Marks & Co.

Ogden, Wechsler & Co.;

Philadelphia; Harry MacCollum,
Charles M.

Leon Sunstein, Jr., Gerstley, Sunstein & Co., Philadelphia;
Gerstley, Sunstein & Co., Philadelphia; led Wechsler, Hay,
Posener. Hawkes & Co.

Duke Hunter,

Hunter & Co.; Frank San

if man, Siegel & Co.; Harry

Co.,

Y.;

Bernard H. Tobias
Fales & Co.; Albert

Filippo, Gersten & Frenkel; Bernie Weiss-

D. Casper, John J. O'Kane, Jr. & Co.

Pictorial Insert IV

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, September 16, 1948
~~"

r

v

v'

John

' '

vi

1

-

»

.

Four! Hundred Members and Guests!Attending
■■

1

-

,r

/

iM

K,

».

*?

fu

,

■,4'

i,

■!",

c

'

y

»

i

«f

.*

'

' iJ

c

;

.

S /

^

McCormack, McGinnis, Bampton & Sellger; Edward W. Russell, Seligman,
& Co.; John G. Preller, McGinMs. Bampton & Sellger; Fred
Eisele,

Lubetkin

Freeman & Co.

Alex Miller, Newburger, Loeb & Co.; Fred
Hartman, Swiss Bank Corp.; Jules
Orsinger, Swiss Bank Corp.; Joseph La Barbera, Newburger, Loeb & Co. Soren D.
Nielsen, Newburger, Loeb & Co.

Ted Plumridge, J. Arthur Warner & Co.;- Gerald F. X.
Kane,

&

Peter P. McDermott

Co.; Walter F. Tellier, Tellier & Co.; Larry Wrenn, Allen & Co.




\

Larry

V' •,1'

■

?

;

/it

p<,x

'''SJV / lY4:Ni,»

»'

'

1^

V.'

i

,s'

/V'» '

-

f

'

-vl

/

■

Lyons,

Allen & Co.; David Saltzman. Torpie & Saltzman; Allen Lopato,
James F. Fitzgerald, W. L. Canady & Co., First V.-P. of
Security
Traders Association of New York; Otto H.
Steindecker, New York Hanseatic Corp.
Allen & Co.;

Harry L. Arnold, Paine, Webber, Jackson & Curtis; Jack R. Hunt, Stroud &
Co.,
Philadelphia; Frank C. Masterson, Frank C. Masterson & Co.; P. J.
McDermott,
Peter P. McDermott & Co.

Mortimer Gartman, Josephthal &
Co.; Joe Goldenberg, Ira Hatipt & Co.; Ben Grody,

Grody & Co.

],

Volume 168

Number 4734

THE

COMMERCIAL

&

FINANCIAL

Pictorial Insert V

CHRONICLE

Success

Gene

John

Brady, Herbert E. Stern & Co.; George Collins, Geyer & Co., Inc.; Samuel E.
Co., Inc.; John Butler,

&

Magid, Hill, Thompson & Co.; Wilbur Krisam, Geyer &
Geyer & Co., Inc.

F.

McLaughlin, McLaughlin, Reuss & Co.; Frank H. Roller, Schafer, Miller

Co.; Frank J. Murray (seated), Day, Stoddard & Williams, New Haven; King
Ghegan, Schafer, Miller & Co.; Donald MacKinnon, Donald MacKinnon & Co.
*

\

*"»

1

' »'

x\

w

\t

V
V' ' ' ' f'
'"VjV1

";\c

*V

'•

°

\

1

\

"\

1

K4

,<-•

;

-

•

,

.

V

,»

"

"•

i

...

mmm.
■Xv,,x:X:XxX Xx

XX

'-"jy'':?. \'X-

y

xx

X XxxX;Xxx:■
x-'xvx "v.;.,;1" xx',r:\:K'

'

'

X
■'

^

.

:

.X'x/.X.

." /

•'

.

"'

.

v

1

■'

*(#■>»$<WW***

Bartus

Carl

Trew, G. C. Haas & Co.; Frank J. McCall, Greene and Company;
Gambol J. Dunn, guest

Stolle, G. A. Saxton & Co.; John McLaughlin, White, Weld & Co.; Graham
Walker, National Quotation Bureau
,
:

'CI

EZhi
m*
I®#
f-rw:.,

t/.vr

S',;

'1m

55k

Harry A. Michels,

Allen & Co.; Sam King, King & King Securities Corp.; Jack Bloom,
Public National Bank & Trust Co.




?l£:

Nat Krumholz, Siegel &
&

Co.; Ted Young, Young, Aal & Golkin; Bill Frankel, Shaskan

Co.; John Stein, Frank Ginberg & Co.; Murray Barysh, Ernst &

Co.

X'

.

'

THE

Pictorial Insert VI

In Spite

COMMERCIAL

& FINANCIAL

F. S. Moseley & Co.; Tom
Unterberg & Co.; Joe Eagan, Frank C. Maslerson & Co.; Wm. C.

Richard H. Goodman, Cohu & Co.; Sal Rappa,
/*'/*■>

Ken

n

-

Greenberg,
McKinney,

John Hines,

Francis I. du Pont & Co.; Tom J. Hickey, J. W. Sparks & Co.; BUI Doerr
Reynolds & Co., Philadelphia; Stanley Graff, Foster & Adams




'

'

'

*

K. Phillips & Co.,
Tom B. Krug, Bioren & Co., Philadelphia; Ned Phillip? Samuel
Philadelphia; Harry Fahrig, Reynolds & Co., Philadelphia; Bill Wittich, Maxwell,

Marshall & Co.

F. S. Moseley & Co.

Howard, J. A. Hogle & Co.; Joe Monahan, J. A. Hogle & Co.;
Dean Witter & Co.; Stan Waldron, Wertheim & Co.

Gus Grindel,

1948

of Best Efforts|off Jupiter Pluvius
i

C. E.

Thursday, September 16,

CHRONICLE

Sol Raschkind,

Goldman, Sachs & Co.; Lou Adler, Goldman, Sachs &
Stark, Merrill Lynch, Pierce, Fenner & Beane

Co.;

Joseph Flanagan, John J. O'Kane, Jr. & Co.; "Hoy" Meyer, Stern & Co.;
Meyer, Shufro, Rose & Co.; Henry B. Gersten, Hettleman & Co.

Eugene

Milton

Volume 168

THE

Number 4734

Denver Bond

COMMERCIAL

&

FINANCIAL

Pictorial Insert VII

CHRONICLE

Club—Rocky Mt. I.B.A. Annual Frolic

:

!'v\

Sidlo, Simons, Roberts &
everything the boys had to offer

Malcolm Roberts,
Don Brown. Boettcher &
de,

t of the Bond Club

had

a

Company, Presi¬

Co.: I won

of Denver: They.ail

good time

Bosworth, Sullivan & Co.: Boys, I'm still
strong—it just takes a little larger club and ball

Arthur Bosworth,

going

a

Robert L. Mitton,

ments, Chairman

J. C.

Robert L. Mitton Invest¬
Entertainment Committee

&

Co., Chicago; Jerome F.




Raymond E. Sargeant, J. A. Hogle & Co.; Emmet V. Dwyer Denver
Russell E. Seifert, Stern Brothers, Kansas City, Mo.

Co., Los Angeles;. William B. Healy, Comstock
Tegeler, Dempsey-Tegeler & Co., St. Louis

Hecht, Jr., Dempsey-Tegeler &

j

Julian Meyers,

National Bank;

Salomon Bros. &

Co., Kansas City,

Marv|n

Moreland,

Rotan,

Mosle

and

Moreland, Galveston, Tex.-—Texas boys
made it a little tough on the local dealers

Hutzler, Chicago; John Latshaw.

Mo.; E. Jansen Hunt,

Harris, Upham &

White, Weld & Co., New

York City

Pictorial Insert VIII

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Municipal Bonds in the Bank Portfolio
(Continued from page 6)
payment of legally issued obliga¬
tions will

The

A

be

overcome.

Management

debts

Factor

municipality being managed

by individuals is subject to the
same errors of
judgment and mis¬
management

as

individual

an

or

corporate business. Consequently,
it is not surprising that a large
number

of

municipalities
launched extensive improvement
programs in the late '20s based on
the artificial

prosperity which

ex¬

isted at that time.
Many munici¬
pal budgets were unbalanced dur¬
ing subsequent years due to lower

at a lower rate of interest,
decreasing the interest requirements,
The debt of most municipalities
has shown a decline, due to ma-

tax

collections, high debt service
and operating costs.
Most

of

the

direct

cipal

ects.

a

investors

municipality de¬

there

little cost.

would have the

investors

correct

the

same

cause

of

the

default.

On the other

hand, the fact that
a
municipality did not default
during the last depression is no
guarantee that it will not default
in the next depression. A

changed

financial status such

substan¬

tial
it

increase in

as

debt

a

Banks

should

might make

insist

furnished full information

on

soft-pedaled.

erable

trend

and

checking.
However, it is
astounding to note the amount of
administration

large

a

municipality can endure without
having its credit impaired. Kan¬
sas City,
Missouri, is a good illus¬
tration

in

this

connection.

This

city was under the control
domination
of
Prendergast

and

for

years,.during which time he and
his henchmen, through
devious
methods, obtained for their per¬
sonal use large amounts of munic¬
ipal funds. As you know, Pren¬
dergast was convicted, and the
city now enjoys. good manage¬

for

a

number of years been sell¬

ing in line with bonds of other
large cities.
I think it is very
doubtful

could

that

have

any

corporation

survived

such

man¬

agement.
I do not believe that rating*
should be too heavily relied unon
in the purchase of municipal or
other

bonds by

banks.

It is

my

opinion

that the rating agencies
give sufficient recognition
in rating municipal bonds to the
"security of principal" factor. The
use of the same
symbols for mu¬
nicipal bonds which are used for
fail

to

corporate

securities

results

comparisons which confuse
public and reflect unfairly on
nicipal bonds.
There
ences

in

are

a

number

of

in
the
mu¬

mu¬

nicipal
and
corporate
bonds.
However, by using the same sym¬
bols there is an implication that
a
corporate bond rated "A" is as
well secured

carrying the
estimated
the

as

a

municipal bond

same

that

less

municipalities

rating.

It

is

than

15%

with

bonded1




to

un¬

carry

authorized

the

over

of

1P28 to Jan.

1, 1948, from

high

a

a

palities
those

to

local

with

depression should
will

show

occur
a

de¬

over-all
in

debt
a

to

be

paid

by

number of states.

oughly familiar.

periodic check-up of¬
prevents a serious illness. I
a

It is not

a

con¬

servative

until

vou—do not permit yourself to
he lulled to sleep by the excellent
record

of payment of obligations
by practically all municipalities in

recent

years.
Insist upon good
credits, and be satisfied with the

prevailing yield.
Sell bonds of
municipalities
which
may
not
meet the test of another
depres¬
sion;
We may not have a
major
depression for a number of years,
but the time to repair
your roof
is while the weather is fair.
The

marketability for municipal

bonds,

during recent years, has
broadened materially. Banks de¬
siring to dispose of better grade
municipal bonds, find a ready
market

for

them.

There

are

a

large number of banks with bond

departments, and in vest m en t
houses, located in all of the prin¬
cipal
financial
centers
in
the
United States, which make bids
for the better grade
municipal
bonds.
The fact that
bonds

municipal

are

not traded

change is not, in

on

my

serious

any ex¬

opinion,

a

drawback to their eligi¬
bility for bank investment. The
spread between bid and asked
orices on high grade
municipal
bonds is fairly comparable to the
spread on corporate bonds which
are listed on the New
York Stock

Banks should not, in
my opin¬
ion, operate their municipal bond
portfolio as a trading account.
While there may be

some

excep¬

tions to this rule, I would
recom¬
mend that sales be made
only for
the purpose of

eliminating hold¬

ings which do not appear to qual¬
ify as a conservative
or

to raise cash.

investment,

or

the

the face of

bond.

It is unfortunate that
municipalities have taken j ily on its municipal bonds as a
advantage of a legal technicality secondary reserve, and that it has
to

force

surrender

of

their

out¬

not sold as callable and that
the municipalities received
prices
on that basis in
the sale of their
bonds.

•

,

recent

number

a

individual incomes.

City has

sales

a

of

this

fornia

Banks which do not have
or

a

well

a

During the

large state
ing at this
ably result
municipal

cur¬

bonus bond sales pend¬
time which will prob¬
in a smaller volume of

financing for the

sec¬

ond half than the first half of this

a

general sales tax.
Chicago has a license fee on juke
boxes of $50 a year, and a tax of
$1 per foot of rail that is left in

year.

streets

with the exception of 1947.

where

there

has

been

The total state and munici¬
financing for the first six

pal

months of this year exceeded the
total for any full year since 1939,

a

changeover
to
buses.
Miami
Springs, Florida, has a golf course

Trend

greens fee tax of
an

The

10%; Milwaukee,
mileage fee on trolley

annual

bus operation.

Sedalia, Missouri,

medium

turing each

maturity,

even

is

that

municipal

last year
In March of

1948.

decline

in

the municipal
principally to the
following factors:
;;V
market

ma¬

year.

recommend

the

started

2.39%.
The

due

was

(1) Decline in the government

Maturity Range
I

''

Market

this year the market reached the
highest yield level since 1942, at
which time the "Bond Buyer" av¬
erage on twenty-year municipals
was 2.47%.
The yield at present

with

amounts

in

which

continued into

an

or

of the

decline

market

income tax of

bond

organized

by

issued by a

to
$300,000,000 and the State of
Ohio to $200,000,000. There are no

room

approximately

nicipality, the bonds of which do
not. en joy a wide market.

Bonds

number of states.

pari-mutual bet¬
Several cities in Cali¬

have

represented

was

Bonus

rent year the State of New York
has sold Bonus Bonds amounting

rentals tax, and

ting tax.

amount

Soldier

New York

tax, hotel

savings

•

Volume of Financing

municipalities have resorted to
levying various types of taxes, in
addition to the tax on real
estate,
in order to meet
mounting costs
of municipal operations.
The city
of Philadelphia has had in
opera¬
tion for about eight
years a tax
on

of

Long-term state and municipal
financing in 1947 amounted to
$2,350,000,000. A large portion of

-

years

amount

deposits.

were

short

This is particularly true
bank located in a small mu¬

reasonable

a

standing bonds prior to maturity,
despite the fact that the bonds

located.
a

bond

a

maturity

market.

(2)

Large supply of

(3)

Decline in the Federal In¬

issues.

new

when buy¬
ing municipal bonds, outside of
their immediate
territory, should

be adopted, and that
purchases be made in the last

of this range; for examole, if the

come

have

is one to five years, that
purchases be made in the fifth
year.
The maturity range should
vary from time to time, depend¬
ing on current interest rates, and

I

ment

the outlook for interest rates. Sev¬

Government securities.

statistical department,

one

a

working arrangement with

of

their correspondent banks

has

these

facilities, or an
specializing in
municipal bonds.
By concentrat¬
'^vpstment

house

ing their municipal purchases and
sales whh one organization

range

new

year

range

Tax rates.

believe

that

municipal bonds

group well deserve the repu¬
tation
they have established as
as

a

being the safest medium of invest¬
outside

United

of

States

they

can

In

any

event

Horwath & Horwath

they

ing the credit factors which I have

previously mentioned.
The
officer in charge of the
bank's investment account should
keep on bis desk a taxable chart

showing

the

taxable
for

equivalent yield of
tax exempt bonds,

and

reference

when

considering
municipal bond offerings. Munici¬
pal bonds may be an attractive
purchase

for

for another.

In

most

municipal

one

bank

and

not

coupon

carrying a high
premium provide a higher yield
to

the

investor than

medium
$11,000

bonds

the low or
bonds.
Paying
$1.0.000 par value of

coupon

for

means

that you

are

invest¬

ing $11,000 at the same yield. Ac¬
tually the average maturity of
purchase is shortened, as the
$1,000 premium is amortized semi¬
your

annually

through

the

return

of

excess
interest.
In
purchasing
high
premium
bonds,
caution
should be exercised in view of the
experiences of some
municipal
bond investors in recent years. I

refer

keeping the industry's earnings at their 1946 level, bringing

7.38%

in

to

7.70%

Federal

income

from

10.03%

to

in

1947

taxes

and

10.11%

before

their deduction.
Even

with

the

relatively good
profits of the past few years, the
annual net earnings of hotels after
taxes
the

average only 4.53%

since

first

and

With

for the

including

post-depression

show return

results

measured

well

than

in

1946.

1.947

was

against 164 the preceding
Taxes

were

The
149

year.

earned (with the in¬

come

from store rentals

same

as,

included)
7.29 times in 1947, practically the
in

1946.

Although

total

restaurant sales

increased 1% over 1946. restaurant
departmental
profits
slumped
Their
was

ratio

to

restaurant

17.2% against 21.2% in

1946.

Restaurant

payrolls

the

transient hotels of

over 500 rooms
advanced to 31.2 cents oer dollar
of sale from 28.9 cents in 1946: in
the
smaller
transients, to 29.4

cent,

a

investors,

and

be

72.7%

the

in

1946

transients,

to

from

to 65.6%.

Showing

the

accuracy
of the
hotelmen that the
relatively good profits of the war

postwar

years

were

needed

rehabilitating hotel properties,

the cost of

replacements, improve¬

ing the highest level ever record¬
The largest transients showed
1he sharpest rise in capital expen¬
ed.

ditures. to $155 per, available room
from $85 in 1946.
The smaller

transients increased their cost to
$137 per available room from $76;
the residentials to $55 from $31.
The year 1947 marked the be¬

ginning of

a

determined liquida¬

tion of hotel's inflated postwar in¬

for

a

of

67.1%

in

ments and additions in 1947 al¬
most doubled the cost in 1946. with
rehabilitation expenditures reach¬

less

number of times in

1,5 cents, to 38.3

confidence

from

71.5%,

did

in

increase the

down

and

cents from 29; and in the residen¬
tial, to 33.2 cents from 31.
The
food costs per dollar of sale for

county bonds

a

roll

for

either the text of the bond or
the legal opinion.
A similar de¬
cision was rendered in connection
with certain purpose
It would

largest
higher ratio of pay¬
cost to sales was the prin¬
cipal reason for a drop in the ratio
of rooms profit to sales. In the
residentials,
this
ratio
moved

transients,

claim made by

capital.

on

1947's

1936,
to

year

residential hotels and the

the average room rate wjas earned
(exclusive of store rentals), hotels

sales

Texas.

addi¬

according to the number of timer

County. Arizona, case, which the
United States Supreme Court de¬

in

1946

after

18%.

peals holding the
highway bonds
of the county as callable.
There
was no reference to a call
feature

no

tional profit since costs rose faster4
than sales.
The industry's fair re¬ cent, to 42.5 cents.
Some of the
turn on the value of its
property minor expenses were also up.
moved
but
fractionally
from
In the rooms departments of the

particularly to the Maricopa

clined to review following the de¬
cision of the Circuit Court Of Ap¬

gain in earnings

country's 1947 hotel operations issued
Sept. 9 by Horwath & Horwath, hotel accountants, shows that last
vear's increases in room rates and restaurant
prices resulted only in

years

instances high

no

The annual report of the

_

bonds

Analyze 1947 Hotel Results

Higher prices bring

should not rely completely

on the
recommendations
rereived.
but
should insist on sufficient infor¬
mation being provided to make an
intelligent decision after consider¬

a

some

of

cause

this time

at

pal prices a range to ten years or
longer may be justified, provided
the bank is not relying too heav-

individual and corporation
V2 of 1%.
Municipal bonds purchased for
bank
investment
be
should
of

which

a

recommend

of three to five years. In a
period of more attractive munici¬

redemption

on

has

on

ganizations.

banks; they do not
security of their
something
goes
wrong. There is one thing I would
like to particularly
impress upon
many

call

bank's deposits will
affect the market on the bonds of
the municipality in which it is

circumstances

drain

worry about the

great

such

expressly stated

often
a

holdings

a

exercise
is

would
range

a
5%
tax on gross receipts of
moving picture theaters. St. Louis

demand more service and con¬
sideration than by scattering their
business among a number of or¬

is true of

same

units be not subject to
redemption prior to their
fixed maturity, unless the
right to
or

policy for a bank to in¬
vest
a
large percentage of its
funds in bonds of the municipal¬
ity in which it is located, as quite

which

The average man does not con¬
sult a doctor unless he is sick.

situations, or
they are thor¬

which

department

collections

taxation

difference in yield of 4.40%.
Banks should confine the pur¬
chase of bonds of small munici¬

next

Exchange.

differ¬

the credit factor of

will

materials

available

are

(4) Bonus Bonds have increased

ment.

In spite of the Prender¬
gast rule, Kansas City bonds have

consid¬

a

probably continue for

believe that the

Muncipal bonds, like any other
type of security, require watching

dis¬

cline.

ten

Watching Required

dishonest

be

However,

(5) Default record.

more

increase recently, and this
will

(3) If

the

neys.

forty
corporate bonds showed a yield
rm^e for the period from Jan. 1,

a

very

few years.

(1) Purpose of Issue.
(2) Type of Tax pledged.
(3) Whether bonds are voted.

approving attor¬

at

time.

labor

will

tax

of

becoming

ministration has shown

A circular should
include the following information
in addition to financial statement:

(4) Name

account

improvement programs which
have been authorized, and which

presented, and the unfa¬
vorable features either left out or
are

an

There is evidence that

out

nicipal bond offerings.
Quite of¬
ten only the most favorable fea¬
tures

up

are

criminating.
The following factors should be
considered in appraising the fu¬
ture outlook for municipal credits:
(1) The cost of municipal ad¬

and

mu¬

Dow-Jones

now

(2) Municipal debts
doubtedly increase as

being

on

grade

some

vulnerable.

more

to

are

opportunities at present

are

faulted during the last depression
does not necessarily mean that it

experience
in the next depression; in many
of such cases, steps were taken to

Governments.

political

call

In

period of years than any type of
bonds other than United States

result of these factors

a

a

helpful to the credit Of municipal¬ eral years ago, when municipal
ities, if the states would enact yields were lower, I would have
legislation
requiring
that
the recommended, In the average case,
bonds issued by the State and its a
range of one to three years. I

a

giving i of 10.17% in 1932 to a low of
very little consideration to the 2 89% in 1946, or a difference in
credit status of municipal bonds, I yield of 7.28%. The Bond
Buyer's
and in my opinion there is not a Tndex
of
twenty
large
cities
large enough spread in the yield showed a yield range for the same
on high grade and second
grade period from a high of 5.69% in
municipal bonds. For this reason 1933 to a low of 1.29% in 1946, or

interest.

or

The fact that

As

most

reduction of prin¬

a

Municipal bonds have shown
price fluctuation over

smaller

turing bonds having paid off and
very few new issues being sold
for improvements and new proj-

obligation

municipal defaults which
took
place in the early '30s were of
short duration, and due largely to
funds
being tied up in closed
banks.
Only in a small percent¬
age of direct obligation munici¬
pal bond defaults were the holders
forced to take

Until

more uni¬
It is impossible to establish any
accounting and definite percentage of a bank's
reporting methods are adopted by bond account which should be in¬
state and municipal governments, vested in municipal
bonds, as the
or
until some plan is adopted factors which should be taken into
which will provide for a large consideration are not the same in
field force in every state to gather any two banks.
I believe that
information, I do not believe suf¬ municipal bonds should be pur¬
ficient progress will be made to chased for bank investment when
justify any great confidence in they will provide a reasonable in¬
the present type of ratings.
crease
in yield over comparable
Municipalities have been enjoy- maturity government bonds, after
ing good tax collections for a allowing for the tax factor.
number of years.
In many instances bonds have been refunded
Small Price Fluctuations

^

;

rated.

are

form and adequate

Thursday, September 16, 1948

the three groups respectively rose

cents; 0.7 of
to 43.8 cents; and 0.9 of

ventories.
the

inventories

Food

largtest transient hotels

in

were

decreased

31%;

transients

16%; and in the resi¬

dentials,
were

20%.

in

the

Beverage

reduced 13%

smaller

stocks

by the largest

transients and 11% by the smaller.
The residential hotels
a

negligible change.

show only