Full text of Commercial and Financial Chronicle : September 2, 1948, Vol. 168, No. 4730

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ESTABLISHED 1S39

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SEP XO *948
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Reg. U. 8. Pat. Office

Volume

Number 4730

168

New

A

Completed
Secondary Reaction
B jrLEONARD

Debt Reduction

substitution of non-marketable issues

quently,

the

advocates

this view

o

f

it is clear that

the

n

that the major
move¬

had

itself
a new

market
the

nation's

'-it.

-;

of

supply
equity

cap¬

ital?

W. Ms -We iSee ";It t&

:

Statisticians

disagree.
Some

Pity the Poor Farmer!

margin of
surplus reve¬

the

in

Finds

aggregate

EDITORIAL

the

which

was

Hoop?r finds actually 428

«Hhe

———

to

to

bull

Mr.

were

indifferent

ments

out, and

stocks.

active^ markets increase distribution. Of 381 leading companies last
year 329 showed increase, 143 decreases, with 9 about unchanged.

ment. Too fre-<$

led

ment

accomplished by
by special issues.

own

How widely is corporation ownership distributed?
controversy over tax revision that has been waged dur¬
How many
ing the past two years, a conspicuous issue was tax reduction versus people own common stocks?
How big is this "public" served by
debt reduction. Many persons advocated keeping taxes high in order the brokerage
fraternity?
How many Americans, financially able
to do everything possible during the boom period toward debt retire- to
buy common stocks, have negOlected to make any contribution to

spending
level, although

worn

Analyzes composition of Federal

debt reductions have been

recent

ele¬

bear

Americans

companies have almost 13 million stockholders of record.

-

1u sio

accuracy of some recent sample findings,
by Federal Reserve System, which suggest only six to nine

million

previous article, "Death of
Bear Market," published in the
: i
"Chronicle"
in March, 1948,
I pointed out

cone

as

In the

international situation.'

me

f Market analyst doubts

still need for farther tax relief.

a

various

By L. O. HOOPER

reduction, Prof. Lutz contends under present conditions there is
debt and shows

Copy

W. E. Hutton & Co.

more

.

a

Many Really Own Stocks?

y

Holding no dogmatic assertions i should be made as " to whether
emphasis should be placed on debt reduction than on tax

>

analyst asserts current
market action portrays completed
secondary reaction in bull mar¬
ket, and particularly because
news
is not really destructive,
basic trend remains up. Points
] to London market action as dem¬
onstrating informed confidence in

a

Tax Reduction How

Professor Emeritus of Finance, Princeton University

IIERZIG

Partner, Sartorius & Co.

In

vs.

By HARLEY L. LUTZ*

Market

P

Price 30 Cents

York, N. Y., Thursday, September 2, *1948

there

few

Politicians with

say

are

as

seven

as

the November vot¬ or eight milfor debt pay¬
stock¬
ing ary already shedding crocodile tears over the poor 1 i o n
ment is deter¬
farmer. The""parity" concept and numerous current Statis¬ holders ill the
mined fully as
United States
tics are being
employed to show that the farmer is suffering and Canada.
much by the
•—or is
certainly at a disadvantage greater than any group Others ;; esti¬
amount of the
sixteen
expenditure as or element in the. population with as many votes should be at mate
L. O.
it *is
Hooper
by the thistime. In Vn flection
year/Of courise,
Gbvioris that million or
Dr. Harley L. Lutx
level
of; tax
''
neither this concern about the farmer; nor any of the; cur¬ more.
Yrates.
I
Everyone 'is doin^ "more esti¬
rent suggestions -for
The relative emphasis to be laid
coming to the aid of the embattled mating than actual counting. No
available

nue

a

nervous

eye upon

v

making.
I

feel

now

■

,

■

that the recent
Leonard

S.

decline repre¬

Herzig

sents

secondary

merely

a

reaction

in that bull
market,
which somewhat simi¬
larly exhausted itself.
Reactions
;

Close
tion

■markets

ondary
about

all

ac¬

primary bull

are
punctuated by sec¬
reactions which retrace

one-third

the

preceding

has

been

two-thirds

to

on page

debt retirement

or

can¬

farmer

can

possibly be reconciled with the equally positive

about the cost of

concern
areas

should

expected of the "practical politician."

should

or

be

not

done.

Whether it is better policy for the
good of the whole economy to re¬
duce taxes, or to redeem debt, or
to do both of these

combination,
tax

must

factors.

burdens

and

tax

things in

some

depend

upon

For

have

example, if

been

lightened

inequalities

(Continued

35)

corrected,

26)

on page

*An article by Prof. Lutz in the

August,

1948,

issue

"The

of

Tax

for that matter,

3

'

% Bonds
%

Due

July 1,

Income

exempt
Taxes
Bond

(Continued

on

page

porations
size

to

of

so

of

Established

and

but

INVESTMENT

3.91%

the

shareholders'

own

does not help much
the totals" (as is done

duplications.

are

Most im¬

portant

stockholders

in

more

than

in

more

than 100 different corpo¬

one

own

shares

company—some

rations. There is

no

(Continued

on

practical way,

,

27)

page

22)

State and

Municipal,

MUNICIPAL

Bonds

BONDS

%;

accrued Interest yielding- about

cor¬

on

article) because there

many

ever

it

up

;

1927

census

Hundreds of

report annually

their

add

in this

war

other

or

has been taken.

lists;

position seriously worsened since the end
When, as every one knows, he was enjoying
the abundant life in a degree that he never dreamed of
in the past? Well, let's turn to the. record, as Alfred E.
Smith was so fond of saying. In 1929, the earliest year
for which really comparable figures are available, the
income of the farmers of this nation was $5.7 billion,

of the

STATE

R. H. Johnson & Co.

Federal

opinion

Counsel

Price 97
plus

be

can

government

1978

from
in

but, after all, not too much

in any

Has his

us?

published by the Tax
Foundation, New York City, and
reprinted with permission,
'
;

(Optional)
Interest

areas or

But, politics aside, what really is the position of the
farmer today? Is the farmer, by and large, worse off,
or threatened with
being far worse off than the rest of

Review,"

CHICAGO TRANSIT AUTHORITY

living in nonfarm

properly determined by
dogmatic assertions as to what

calendar

(Continued

either tax

upon

be

not

It

all

that

reduction

various

up-movement.

estimated

given time

of

pri¬
movements, average about
days—retracements

mary

1100

of market

observers

know that

■

at any

SECURITIES

Bond Department
64 Wall

White,Weld&Co.
Members New York Stock

40 Walt
Boston

BOSTON

Troy;.

Philadelphia

Amsterdam

PHILADELPHIA

Albany

':

Buffalo

Harrisburg

Strccti.Neiv.Yofk 5

Chicago

London

Exchange

Street, New York 5

:

THE NATIONAL CITY BANK HART SMITH & CO.

Syracuse

OF NEW YORK

Scranton
--.•

Wilkes-Barre

Providence

Woonsocket

Buenos Aires

Bond

Washington, D. C.

11

Analyzed and Appraised

Distributors of Municipal

Gordon Graves & Co.

prepared
on

Copy

New York

a

upon

f:ff-

.<

.

•

Established
.

-

7.

Chicago

Columbus

.

.

Denver

Toledo

Wires

Connect

Montreal.

-

OF

Toronto

Members New York Stock Exchange

T.

Telephone REctor 2-7340

an

>-P

1

COMMON
Prospectus available

Doxi?nox Securities
Grporatioti

111

Exchange Place, New York 5, N. Y.
Bell System Teletype NY 1-702-3 :■j

rm.

m

m

m

m

mi

m m

m

*+

>

request

Members New York Stock
other

t

Exchange
Principal Exchanges

Broadway, N. Y« 6

WOrth 4-6000

^

upon

IRA HAUPT & CO.
^

and

40

-«

*

CITY OF NEW YORK

Public Service Co. ^

BONDS & STOCKS

120 Broadway, New York 5
;

Buffalo

THE

Central Vermont

CAN AD IAN

.

'

f-. IJ

CLEVELAND

New York

Cincinnati

-

1899

NATIONAL BANK

Teletype NY\J-395

request

(Incorporated)

,r

THE CHASE

^ HAnorer 8-t98f

Company

Est." 1896

'

Bell

Private

the

SUTRO BROS. & CO.

.

■

Tel.WHitehall 3-2840 Tele. NY 1-809




have

OTIS & CO.
-

INSTITUTIONAL INVESTMENTS

l Iv

We

Corporate Securities

request

Street, New York 4, N. Y.

•:

Dept. Teletype: NY 1-708

Machine

and

30 Broad

;

(• J t..

Burroughs Adding
Underwriters and

on

(•;U

v....^V

memorandum

PORTFOLIOS

Information

•u';vT-?y.;-

Springfield

If If BANK WY
1

SZ WILLIAM ST., N. % 8

Teletype NY 1-2708

Boston Telephone:

Enterprise 1820

-

2

COMMERCIAL

THE

(898)

&

FINANCIAL

CHRONICLE

Thursdayj' September 2, 1948

ftx

t>c:

Proposed Changes in federal Taxation

Federal Water & Gas

A

By ROBERT ASH*

Southern Prod. W. d.

Southern Nat. Gas W. d.

•

Association~

Louisiana Securities

Washington tax attorney, asserting there lis too much tax litigation; points out changes in Federal tax
administration which will lead to settlements of disputes by administrative ^officials.
Outlines changes

Stubs

Fed. Water & Gas

Alabama &

-.Attorney at Law,«Wajihington, fD. (C.'.

•Chairman, 'Committee -on Bureau 'Practice -and -Procedure, .American Bar

rli's,'V'*'V !

bill which will .chaqge carry back and carry forward provisions; ^vill (recognize itor itaxls
gift do children of partnership in business; will lower fax rates $or smdll corporations j »will H
taxation in business (reorganizations; 'Will eliminate double .taxation on 'dividends,; and will lead to

vin spending tax

BOUGHT—SOLD—QUOTED

JSought-^Soldr-*Quoted

:

purposes

New York Hanseatic

ease

Corporation

.

.

-

I

I

here to talk ab<5ut taxes.

am

going to discuss - what T

am

in the immediate

see

future

regarding, first, tax administration and, second, tax legislation.
Ihe administration. " rOf course, »the task as tremendous. .-,. Any of

sider

t.

of Internal
Revenue real¬

what

ize

Bought—Sold—Quoted
r

"

'

'{

-

*

.

P

'

''

V

i

\

'

l*

j '

\m

'

\

Prospectus on Request

v

i fi

a

,

job
they have. I
might state

t
t

e r r

c

frfcflONNELL&rO.
I

Members
New York Stock Exchange
Hew York Curb,Exchange

nothing, no
activity in the
history of the
world, in con-

with

nection

Tel. rREctor .2-7815

ly approached

Robert

problem

the

Ash

of the Bureau

of Internal Revenue to collect over

Now, in my npinion, that situ¬
We are having

lections

'New YorkiStock Exchange '

are

ing West of the Mississippi River,
except ihose in Arkansas and
Missouri.
Your Federal collec¬

■

New York Curb Exchange

Chicago Slock Exchange
39

tions

Broadway, New York 6

are

greater in amount than
all the food that all

the

cost

of

the

people

lections

on

of its exist¬
ence.
This thing is just almost
overwhelming in its magnitude.
We often hear in discussion what

STREET

a

years

col¬
think

grand job the British do in

lecting their revenue, and I
it is admitted that they do.

XOKK ,5,N. X.

NEW

hundred

The
British Department of Inland Rev¬
enue has approximately the same
of

number

SUGAR

However, at tthe dime it
sappointed, it was ^composed
entirely of ;bureau .-personpel.
I
was
very
pleased do hear dhe

end.

that

toward

Nevertheless,

if you try to

get the right answer
in a particular case, irrespective
of the income in that case, in the

long

run you are
money

going to collect

.at iless expense than

if you

try to exact the Utmost in
revenue out of any particular case
before you.

employees

I our

as

Revenue. Yet,

Bureau of Internal

Raw—Refined—Liquid

they deal with about one-third as
many
taxpayers.
They
collect

Exports—Imports—Futures

about one-fourth as much revenue

their

of

cost

collections

are

compared
with
y>i <bf 1% in the United
States. That,is the only collection
%

>1 %

of

as

activity that's in any way com¬
parable and, as you will see from

Common

viewpoint,
job here.

every

Ashland Oil & Refining Co.

better

Stock

don't

I

•Bought .and Sold

that
the

Ashland Oil & Refining Co.

I

.Debentures

it

is
the

mind

the

BANKERS BOND ™

•of

1st

LOUISVILLE 2,

KENTUCKY

he

said

revenue

istrative

Floor, Kentucky Home Life Bldg.

is

that

doing

con¬

good job.
should bear

a

we

truthfulness

of

Secretary

ia
<

of

Treasury made back in 1927,

when

Incorporated

anything
critical of

Internal Revenue.

those

that -the

statement

doing a

say

seems

However, I think
iin

m

of
of

one

vinced

Bought And Sold

way

Bureau

am

to

want

any

we are

that

the

collection

is primarily an admin¬

and

not

a

judicial prob-

!.

Bell Tele. LS 188

Long Distance 238-9

*Stenographic transcript of an
by Mr. Ash .before the
National .Society of Public Ac¬
countants Boston, Mass., Aug. 15,

:address

The Parker

1948.

Appliance Company
cision

fittings and

couplings,

Company

is

importantly

line of

As I stated,

the Bureau has done
job.
However, >'<• some

swell

a

people think that possibly the job
be improved.
With their

could

in

idea

nnind,

the

side

that fit

,in

position

from

to the jomt ^ Congressional Com¬
mittee on Internal Revenue Tax¬

ation.

'

That committee was com¬

posed of Henry Herrick Bond of

some

of the Bureau.

_

ciriticisms

in

the

out

from

persons

'■

One of the
"Bond

•New

Report

New

various

kinds

of

current

the

recommended
machines

of

cComnijodity

Current

Price

about .$7%

benefit

per

Bond

was

a

former

Under-Sec¬

j

in

Bureau

personnel of approxi¬

mately seventeen -thousand, and
an
increase in the Bureau's ap¬

propriations from

approximately

$185 million do $250 million. It
pointed out that if this- money
was
spent that the Government
would
in

get it back many times over
collection of -delinquent

the

taxes.

Telephone

of

use

N. y. (Cotton, Exchange Bldg.
NEW YORK 4,
Chicago




Detroit

r

N. X.

jPIxtsburgb

SWITZERLAND

GENEVA,

modern

Silver Creek

,

Now

Precision

Revenue Bureau
we; .come

important
I

Internail

of

to

some

very

recommendations,

and

carried

field

all

enforcement

•inseclicidal bullets per

Data

also recommends that the
limit

their

Members

New .York

Security Dealers

Assn.

Tele.: NY 1-1872.

NATIONAL BANK
of INDIA. LIMITED
Bankers to

the Government

Kenya .Colony and' Uganda
Head Offices

26,

Bishopsgat«,.

.

London,/£. C.
in India, Burma, Oeylon, Xenya
Colony.. Kerlcho, Kenya, and Aden
•. ;
' ,^n>d.;Zanzibar

-Branches
'

-

'

-

Subscribed Capital....£4,000,000

col¬

'

Paid-UpCapitalr.>.M_$2^000,dOO^
Reserve
The

Bank

FuRdn_>M>__u£2,500,60O>
conducts every description'' Of
exchange';business v

banking and

is, to the collection of the taxes,
the, mathe^

request

•r

activi¬

matical computations, and the as¬
Report also recommended .that sistance of .taxpayers >in the prep¬
the management of the Bureau be aration of returns—the idea
being
reorganized with view to greater that Tor about half the year the
economy and efficiency, and the various employees of the collector
more effective use <of its 'expert?
would be engaged in That service;
ditures.
The first recommenda* the T)ther 'thalf ibf/ihe %ear
Ahei^
tion was that a .staff should be would be
engaged in checking up
attached to the office of the Com- such
things as the number of de¬
pendents and -the -like.

on

Tel.: DIgby 8-0460

ties primarily to the job that the
of the office indicates. That

of

second) —

51) Broad St., New York 4, N.Y.

name

verifications

Hession

HEIMERDINGER& STRAUS

activities

reopening of any case closed
by 4he Internal Revenue agents'
office. It has the same power that
is now given the technical staff.
lector's 'Office

the

to

out

no

It

of

Mierosol Machine—(One Billion

you-are -going to see j
within the next year or two, these

recommendations

Corporation

Manufacturers

sure

am

Committee

/'■: •Trusteeships and Executarships . p\<
also - undertaken > •• ; ' " v
.

BUY
U.

5.

SAVINGS

BUNiDS

Goodbody &. Co.
f

-Members N. Y. Stock
115

;

BROADWAY

'

-

.

,"

Practice

i

Imperial

Procedure, -of which T .am
Chairman, has also been studying
the idea of possible reorganization
ofthe
bureau's
functions. We

:

||

,

make

finality

>

has,

now

court

i] NEW YORK 5, N. Y.
'

Association!^

Bureau

arid

Fxchange<and>Othp.r Principal Exchanges

Telephone BArclay 7-0100

on

DN

consid¬
ered, rand are rstill^studying, the
advisability of abolishing the tech¬
nical -staff of giving the Internal
Revenue agent in charge the right

CANADIAN UTILITIES

.

Committee

Ri^its|f|

have gone at it and have

CANADIAN MINES
j

Teletype BS A24
CAnai 6-8100

Exchange

we

Reorganization

to

N. Y.

Inc.'

v

.Trade

And other Exchanges

Of
heard that sug¬
gestion is being followed.

again

course,

the

The so-called Bond

CANADIAN BANKS

du Pont, Homsey Co.
HAncock >6-8200

Exchange,

New Orleatis Cotton

retary df the Treasury. They re-' should be under the Internal Rev¬
leased a report on April 23 of
enue
agent in charge. In other
this year.
The report, generally words
you would have the agent
speaking, was favorable.
How-j in charge, the special
agents, the
ever
it
did
state
this,
that;
technical staff,
all in the Chief
the enforcement staff is too small,
Counsel's
office,
including
the
it is in part under .paid, in part
penal division of the Chief Coun¬
under trained, and in part unefsel.
All ^officials;-having, to -do
fectively directed, and it made,
with Investigation, would be un¬
several specific recommendations
der one man in a particular area,
as fo what should be done.
The! and it was also recommended
that
first one was that you should have
that- fellow, .or, that .office, be
a
recruitment and training pro¬
given the power to close cases
gram to screen them, the invest) r
without the right of reopening as
gatory personnel of the Bureau at
present. ;In other words, upon
and it recommended an increase
post-audit review, there would be

.share

51 Milk St., Boston 9, Mass.

,;

Exchange

«Chicago, ;Board; .ef

York, William J. Carter of some degree—that is, a reorgan¬
Georgia, H. McLaren of California, ization of the Bureau's
variolas
and George M. Mitchell of Illinois.
functions. One of 4he Bond Com¬
They were all well-qualified men. mittee's recommendations was that

CANADIAN INDUSTRIALS

aircraft.;

(6-30-47) :$9.60

TExdhanse

accounting.

:)

(6-30-47) $19.44

assets

Exchange

-(Curb

give

them
advice, it looks as though that
recommendation is going
to be
followed..
This ,Committee also

The AmericahBar

I

Book value
Net

gtock

York

•

management

engineering tirms to

Members

.York

York -Cotton

'New

-

ministration of the bureau.
As
I /Say, fwith this committee being
enlarged, as the 'Commissioner
stated, and with the employment
of

■:

-

New

valves,

to

expanded

;

:

H. Hentz & Co.

now
'

includes

Congress

pre¬

program.

,

''

.

We MaiittainActiveMatkets inU. S. FUNDS for
complete

.t

1856

"

♦

Common Stock
Manufacturing

i

:

Established

,

Commissioner -state

,

and

about

DIgby <4*2727

'

•' rY''-- •••';»
.

was

your

erations Qf the Bureau and report

greater in amount than the
the United
States Government for the (first

99 WALL

be directed more and more'toward

col¬

Tax

Federal

entire cost of running

LAMBORN & CO., Inc.

taxes,

over

andTthink that the efforts should

March 15 of this year

were

one

litigation

much

too

passed a law directing that an in¬
dividual committee study the op¬

States

United

in the

The

consume.

'Tele. NY 1-1610

DIgby 4-3122

Federal Tax col¬
greater than the en¬
of all the people liv¬

income

tire

ation still .exists.

more

\

;

illustrate,

To

Members

and

news—new

unique in all history.

Joseph McManus &Co.
,

is

billion

$40

branch offices

to .our

i

•-

-'t-':

pointed.

Too Much Tax Litigation

.administrative settlement of was a
tendency toward inbreed¬
fiscal matters faxes, rand if you get 'the -fight
ing in thebureau »anii the obvious
that
has
in answer an each case the "Commis¬
wisdom ;?6f
having ian .'Outside
sioner stated, you are going to lead
any way near¬
viewpoint injected into the ad¬

,

i20 BROADWAY, NEW YORK 5
$

Mobile,Ala.
Direct wires

As far as Federal Income missioner for continuing study and
Tax is* concerned, the field of ad¬ .analysis ol the Bureau's activH
ministration-has been ipushed into ties, ;and .as the (Commissioner in¬
a legal battle ground.
dicated, such a committee was &p7

,

4

<NY I-15S7

New Orleans. La.-Birmingham, Ala.

that Iheard the

us

York 4, N. Y.

HAn«v«r 2-0700

ms ^con¬

lem.

is

there

that

I,-:-jr-

First, let

York Stock Exchange

New

25 Broad St., Now

Commissioner^

,

Lonsdale Company
.

Steiner, Rouse & Co.
Members

Teletype NY 1-583

BArclay 7-5660

Urges revision of law do permit accelerated deprecia-

tion deductions by business.

1

York 5

120 ©roadway, New

sales of capital assets.

greater equity iii tax on

Sought—Sold—iQuoted

decisions with the same

Charles King & Co.

that the technical staff
and in the case of tax

Members Toronto

litigation, to give the Chief

61
>

Counsel the Exclusive

Teletype NY 1-672
,

;

(Continued

.control over

on page

24)

'

l

*

*

Broadway,JN. Y,
1

;*;v1

Stock Exchange

WHitehall 4-8980
: ■'. ' *

*.

-

Direct wire -to Toronto

j]

/

Volirme " 168 -'Number 4730-

THE

COMMERCIAL' & FINANCIAL CHRONICLE

IND E X
How Many

Articles and News

n

.

Cover

Reduction—parley I* Lutz-,-,^CCoyer
Secondary Reaction-^Leon^rd $. Herzigi^

A Completed

.

,

L

Proposed Changes in' Federal

Tsxatfonr^obejt,.jt-i'Ash^i«j>-X;>J^.
inc."—Gerald M. Loelp.
'3

The" Story of "Time,

Dunlop_____'__„__„l

Are We Running Out of
Oil?—$en.

The Correct Approach to Bank

6

Dalton

Labor-Management Must Avoid Depression'!

—Secretary Maurice

J.

':

1' *

y'

-

-

FDlC Liquidates: Peht to

of Trade

'Monetary;C^0uj>:i^r-I,-.:.

Treasury .Chairman Harl

Mid-VVestSuperStock;Exchanjge!lteport^4n'Prospect^_Jw-f
Wa«pil pii Market- 1

Televisipri': £ield

jcorp^, Sees

Expanding

x ;;Oo Id V ?I^rice;

-

r

S. Controlling
---- it -Wi

r-r' i

N, Y. City

"U'v

this

17

1

' 1

.

17

,

■f?'.'-.7?;<■■■■ 4\

to

Trends_j—-i-^—_^_—

Life Insurance Companies
IIow Can It Be?
(Boxed)

j

17

Bujy

19

1947...

NYSE Opens Office for Draft
Registrations.___'
•'

"•" »fhv V;:A
1

1946

See It

%■'

i

!

19

J

L--:.

i

expansion

1922,

Mr.

describes
Time,
Back in November,
Luce founded "Time"

Einzig—"Establishing U.

$40

Ahead of the

News—Carlisle

Funds

:

Bargeron__

L^__

Notes'-UiS—- -n-w—v=-'r-

-

doubled.

income
once

by

again by 1931,
by 1936, again by 1938,
and finally much

than again by 1947.
For the
first six months of 1948 gross in¬
come totaled
$64,700,000, or, to put
more

Corner_|____

Washiilgton 5 andlr You i ^ ^

_ _

33

the

14

gram

j

went

the

great

\4W '^gbUslbed a'wlQe W^eldy

_L

- -,

L'

Y-

venture

the

Behind the

•

commitments

-

'L

-

CL;''

L-.

•

-

'-^.w

.

COMMERCIAL

j

^

and

-

^Patent;'

c

?;

i,;

j
-

;

'

'

-kEqtor

iry

i;WILLIAM

DANA

SEIBERT,

'f

rV'':'

'

"■•■r

•T»v,Vi

~

Other
i

-vCoiupaay

-

the

of

Canrda..

Countries,

i

S42'€0

news, .^nd

ad-

<'i*«rMsinig''JsaUel,*.-gnd 'ievbr^LMoijklay-

;:

records, .qbrporation-

v»'.

«ta®ket- quotation
news. 'bank

ciearltigs,

■4.;
jbi^ipeai "-'^*3"iT*LLv©- v.'at.iL- HBake^'A''

'?-5-Chicago'■ 3, 'in.- '(Telep-hbne:- State
i"

vi

t

$

.(•..'■.'A,*-

'v




"0G13);;

i.f

and* Quotatacb"

$25.00' per .year.;

per Arear.-f

had its first year of million dollar

free-tax income.
before taxes

year. was.

the

in

special

made

in

New

York

1-1434

Refineries;lnc.
Capital Stock
Selling * 2%

times earnings*

10-year dividend record.
;

'<

s

,

>.

'■*

Circular

1

■("W

on

'

Jfx%

.

t

request

George Birkins Company
40 Exchange Place, New York 5
WHitehall

4-8957

,

Tele. NY 1-1404

Trading Specialists

Actually, profit/

on

r

about

$1,200,000

of

in

All

UPSTATE

income, in ^hat-

and(

NEW YORK

-

SECURITIES

thatvLLNet earnings after taxes ran"
about

same

$2,700,000 by

1936,

despite

bought

paper,

New

^

Leonard

taxes those days were
only about"
$200,000, so Time, Inc. enjoyed itsfirst' $1^000J)00 ; pure net
profit.:?
The growth wag automatic after

invest>-

Time, Inc.'s

in

were

2-4930

second-

inex¬

scepes,

REcter

Time'" in' 1935
The

and

of' ''Life"

in;

third

period of Time,
Inc.'s -history, was this "launchIjtig pf .'Life' magazine."; In 1937,"

presses

growing
numbers
and
a
building
was
bought in Chicago to house, probb
ever

r

GRODY & CO.
Members Natl. Assn. oi Securities Dealers, Inc.

40

,

(Cohtiritied

on

pago: 30)1

Exchange Place, New York 5

DIgby 4-3280

Tele. NY 1-2698

'

i*,!'

Act

of

;

We

are

interested

$3.8.00

per

per

year.

'

Miles Shoes, Inc.

PREFERRED STOCKS
K Kl

' >■<

(Fer^igh postage extra.).

.

Winters & Crampton Corp..

High Grade Public Utility and Industrial

*

■

J

v

'

-

j:"

Analyses.available

^ Spencer OTrask &

"Recdrd-^-Morrthly,-

'

<yffetirm& {>f

ycai.

(Foreign J postage .extra;.)1

York' Tuhns."

m

March

Note—Op account, of the-fluctuatipnai; ip
the rate of exehange.-remittances-for. for-<
eign subscriptioiis and advertisements must
be

the

an

j'
.B.,;j0aoa'.i;;( •

Monthly^; Earnhrm' L Reoord.'~h Monthly?

$25.00

when

were

lOifte1"' Publications
Ban.k

Eypry Thursday«:.(general

into, maybe,

1936.

'

3

the-

for

'v-:V'j*''V K;:>■»)*<
Subscription,Rates;;./

'

of

proved.

made

second-rplassmatter Pebrapost " olfice"'at'

1942, at the
N.
Y.,; under

Domini^,

M»n»««r
'i

* *

•'

1*948 by WiUiajm
as

C... Eng-

1922

be

the initial losses of the "March of

Iji

Pr«Mde»t

i* 'T'

/.»

E.

1929

to

breeding confidence in this
future.
Long-term contracts were

Subscriptions ip --UiUtiejl' .States* Uv.': fe..
"•■ojssessioos,., Territories and Members of
«iiTi-Atn*iican" Jtmon
$3S OO per vear*

A-TubUshjsr

WILLIAM B. KIGGS, Business

■:

25,

-Xork,

Lqndon,

lEd^aEds;",^'.

rGopytight

L:Reentered

j

'I

'2-0570-1<} 057O

HERBERT i>: REIBERT; Editor

Gardens,

.

:.;.;|nLLIAM'^VdANAt €OMPd:\y^tutiHs!ieis;
.^•25_-Pal-fe Plaofe,y)ork: 8,- K *Y. .|".
'

Drapers'

jindi jc/e

success

1932 any buy

success

OrvisBiotheiseGi

the great

ojT'Life."
p

from

namely that of fighting
depression, was ushered
Time, Inc. made progress de¬
spite;
depression apd in 1933'

greatest

QUOTED

-

in;

alb the $5,000,000 launching cost

38

the

remained

pro¬

greatest

SOLD

-

14 Wall St.,' New York 5, N. Y,

16,100,--

"Ar¬

the

came

and

to

The

was

BOUGHT

-

period,

risk.
The depression had
only started to end when "March
of Time" cinema was born.
Fi¬
ment

1941

radio

Forum"

Drilling

Utah Southern Oil

-

*

growth' when'

depres?-

a

nally

L rV- -r-AO

••

.

;

FINANCIAL CHRONICLE
;

Equity Oil
Mackinnie Oil &

increased-

Time"

pensive buy but in

*

has

annum

well defined periods.
There was,'
of
course,
the period of 'initial*

-

The

Empire State Oil

the

the air.

of
on

chitectural

(.5'

*Not available this week,.

,

of

"March

was

18

—

start

and

From an ' earnings standpoint;
Time, Inc. went through several'

vein,

_'L: J_

—■—-^r»
.

carry

tremendous

education

5,700,000 in

or

23

Securities Salesman's

the

Teletype N. Y. 1-714 xi'*

com¬

000 in 1947. '

1928

—

Securities Now in Registration.__.-L._The State of Trade and
Industry-—.

from

annual rate

an

•

BroadwayyO

editorial
to

in

per

ly turned the profit corner. Even
so a year later in still worse
times,

Governments————
——i;_—'21
Prospective Security Offerings.—38
vkPublic Utility Securities—
21
•

at

$3,000

6

on

Securities

Bell System

23,000,000 high school gradu-*'
ates; today there are 35,000,000.
Meanwhile, the number of fami-.
lies with incomes of more than'

1942

way,

1908

2-4500—120

were

doubled

more

Established

T;

■REctor

plan for a college enrollment of
4,600,000 by 1960.
In 1940, there'

ran

Reporter's; ReportJLL-r-.L-——39

Railroad

'

President's Commission on Higher
Education says the country must-

By 1929, this figure had

That

7

^

until

sion when "Time" itself had bare¬

29

May——r—_—

took

the

Pfd.-

Finishing Com. & Pfd.

Members N. Y. Security Dealers Assn.

there

8

11

-

News About Banks and Bankers————
■kObservations—A. Wilfred

It

Still speaking in
figures, and despite the de¬
pression which had set in, gross

at

16

S. Firms in Britain":.—-;

week.

a

of

&

Corp.

Works,H

J.K.Ricc,Jr.&Co.

family income.
In;
were
3,800,000 college
graduates in America; today there
are
nearly
5,000,000
and
the
1940

$130,000,000.
.The Time, Inc. management has
always invested heavily in the
future, 1 "Fortune" was launched

32

__

Indications of Business Activity.

■

?

•

on

v;'./!.

in

more* so

increase

the payroll at a gen¬

on

of almost

lfi

Coming Events in theTnvestment. Field.

Our Reporter'

Youthful;

:

even

again

12

%

—

Dealer-Broker—Investment Recommendations

Our

L;:-,:-

on;:.:v

50

round

i

.—Cover

Stocks.

Business Man's Bookshelf._a._L—

NSTA

of

policy.

been

19

38

Canadian Securities ________J

Mutual

low

a

'

*

(Editorial)__________

From Washington

more.

Dept. '

NEW YORK

the

was

the

1928 to build gross income so that
it first topped, a
round million

Regular Features

and Insurance

of its life or

editor-in-chief,

it another
As We

Bank

and

At

erous

—_______

"

make
current

1

19

Guaranty Trust Co. Holds Profits Are Not Cause of Inflation 20
City of Copenhagen Bonds Drawn for
Redemption.
25

a

at

Inc.'s

dollars.

More. Real Estate
1

Close or

ft*

in

year.

and went

Commerce Department Estimates U. S. Investments
Abroad

.*

which

available

Com.

,,

U. S.

earnings rate
Time, Inc., has built itself info a
of $4.37 a share, reported for the position
where, with the current re¬
first six months of this year, it cession in the
publishing business,
sells at about six times indicated their publications are in
greater
earnings
for
1948.
Estimating demand by readers and advertis¬
dividends at 50% of income gives ers aliko:
.>
\ •
: r.
an
The long-term background for
anticipated yield to present
the Time, Inc. kind of
buyers of practically 8%.
magazine
"Everlastingly
contemporane¬ lies in the ; rapid growth of the
ous," Henry Luce, founder and population of ythe
country, but

C.

■■

120

of

j

Thompson, President of Mortgage Bankers Assn.,
Cites Sharp Increase in
Mortgage. Debt in 1947—

♦if- **

stock

Securities

United Piece Dye

■

Gregory, NYU Professor, Designs Machine

at $28.8 Billion at

of

factors

executive *' and
Time, Inc., now sells at petent
about: 55, compared with a high personnel are on hand

iJiLif'JLitltei

Charles A. Bliss, of Harvard Business
School,1 Questions; >
Concept of Business Profits Arising From
Inventory Values 18
John

Loeb

M.

hi your
lips!

;Texas Gas Trans. Corp.

twonty-fifth
Anniversary Year Book, are the
pictures
147^ Then and twomen
who had served Time, Inc. for half

levels.'

A}j j

Totalitarianism-.-!,
Economic

Gerald

securities,

cash
your

Federal Water & Gas

In the management's
•

on

0. S. Fire Insurance

In

High

achievements

song

Phoenix Fire Insurance

of contin¬

always prepared.:
list of

.

us!

on

Telephone: WHitehall 4-6551

handling \ of
personnel—making
Time, tnc< jb; good place it©: work.!

c a n

market

13

W* Litchfield, Chairman of
Goodyear Tire and Rubber
Co., Reports Heavy
Demand; for Rubber Products—.
First National Bank of Boston Holds
Government Planning

Register

future

v

because

i

13

P.

Carl E.

its

stake

.

be .bough t
O h "e a p 1 y

^Prjotectiyey^rlW^

Leads to

a

growth

12'-.

College Offers Finance Courses-'-.C-*
Forrest JS, Dunbar; Jr.;Takes!
Exception to Views"on•

•

regardless of the type

a

WALL STREET,

gency, the management apparently

'ih

the

World

say

earn¬

power,
i dend-

v

the future.

no-good

away with

you

and

.

.

nothing

off your mind right

those

Obsolete
99

studying the record and achieve¬
ments of 'Tihie', Incl, chronologi¬
cally, year-by-year from 1922 to
date, the impressive factor is that

12

l^icerRlse^"1;^j
LondonStees

pocket

has

woriy

with

send

successful'po'licy is likely

to be continued in

.

was

Robert W. 8wantonr
Chairman of NAPA Groups Reports*.
>ifludteatitnisDowntvard Business TrendL_-_iS'M

•Barclay V Sank of

This

the

-w-.--

-

;

paying ability >'

•

>

J-l

L

and;

12.;
Frank i^olsom; y,-P. of Radio

.

fv<

take

vlong
and

ably, the most efficient and in¬
itially mo^t expensive of circulatioh Systems;

;T"

-

Carnegie

We'll

■

investment in the future in
demonstrated they possess the

a,

'

^_____U_*

cf i

10

Announces

/

an

have

who

un¬

•

its

ing

34

;

people

11

most

doubtedly

ZJt* 14;

t

__

Protective Committee to Study Boston and Maine!
;PIan-•

Yv.Board

i'u-

or

1 d

w o u

that

FroffittTi^adS

with

fulfillment.;

have

analysts

'11'

i_

AND START LIVING
Dale

market

note that

.<-9

-

and circulation

•>

However, it is
interesting to

■'- V

j

Wilkins-

'

.

ture prospects.

Tobin

Costs in .Social Insurance—Jo
Bingham
If i .Were: a Retail Salesman—A..
J.

its

value

•#.

mr

HOW TO STOP WORRYING

as

Stockholders in Time, Inc.,

*>n

8

One Billion Yearly of Federal
Money for the South

—Henry A. Wallace

-

partnership

8

Farmers, Fishermen and Investors—Roger W. Babson___:

AND COMPANY

know-Jiow-to-grow despite all contingencies., ..We want to tell the
Time, Inc., story of its record to date without expressing an opinion

" 8

:

r,

,

:.

7

California—Henry J. Taylor

well

5

,

Supervision—J»fj. Robertson

The Injustice of the Five Percent
Spread—John

L

3

»licmtnsTfin

-

future prospecta. Sees organization expanding, with greater printing capacity, additional research laboratories,

*

4

George W. Malone.

Immediate Problems of Retailing—David M.
Freudenthal
Fact Finding in

cial success; as

4

•

Investment authority reviews kistory; anil
progress of Tiine^ liu:.
founded by Henry^^Lute in 1922, Points out achievements and finan¬

•

•

Your Estate and the Inevitable
Taxes—Harmon Aekerman__
Are Oil Prices Too High?—Robert G.

.

Partner, E. F. Hutton & Company
L_;vMembers New York Stock Exchange

Tax

vs.

"Time, Inc."

''

By G. M. LOEB

Really Qwn$tock$?--*-L. O. Hooper

Debt Reduction

The Story of

Pare

-

(899)

TmTrrrr

' !

* ■■ I

v

>'

I'*''* Members 'New York Stock Exchange,
•

,25 Broad Street,

New York 4

•

:Tel.:

'HAnover

2-4300

Boston

j

-

»

*

New

Glens Palls

MOif'i

Yark Curb Exchange.^

135'S. La Sadl)e StM Chicago 3

4^*Tei.^:

Teletype—NY 'i-,5

\-

:AJV>pn»

Members

*

FINanoial 2330
;.r;

Schenectady

-

Worcester

<;■?,

u"*

on

f

request

| I

3

fl

'

:

C. E.

Unterberg & Co*

Members N,

Y. Security

Dealers Ass'n

61 Broadway, New York 6,N. Y.

Telephone BOwling Green 9-3565
Teletype NY 1-1666

THE

•V

(900)

4

}

'fx

h

>#.

u tu \

21LLLL

u

■

I »

Thursday, September 2, 1943

CHRONICLE

COMMERCIAL & FINANCIAL

UI'MIIIIIII,"

Too High?
Your Estate and the Inevitable Taxes Are Oil PricesDUNLOP
By ROBERT G.

HARMON ACKERMAN
Member of the New York Bar«
By

President, Sun Oil Co.

Estate and Gift Tax Law rewsions, analyzes
effects of changes on estates of various sizes and 'character. Stresses importance -of the marital deduc¬
tion'' provisions, and discusses taxation in relation to gifts, insurance and annuities* Holds compli¬
cated nature of estate tax laws requires specialized knowledge and advice.
The Federal Estate Tax Law has added a new element to the marital contract, namely,
financial partnership between the spouses.
The Federal Income, Gift and Estate Tax
Laws recognize the community of interest between husband and wife. ;The new Federal
New York attorney,

Industry executive declares current level of profits necessary for
assured future supplies at reasonable prices.
Asserts price controls
and increased taxation v/ould "hobble" industry's ability to meet

.

taking into consideration new' Federal

:»

a

Revenue
became

April

Act

.

law

a

1948.

2,

Your Estate is

;'[[

:

follows:

—

and

gift

law

than

'

Total

lib-,

300,000''

f nity

property

:'tp,

,

.

permit ways of devis¬

half. for >his

..",

son

The

this "adjusted
gross estate.? /
: : s
|
The "Net Estate" is the amount
remaining; from the "Adjusted
Gross .Estate'*: after all specific
exemptions have been deduetedl

$200,000 estate would be

"Marital Deduction"

The

estat^

of, we Will" be inter¬
Deduction. V
"Marital Deduction" is the

is composed

ested in the ['Marital

.

savings. <mi
about
$50,000; r$30Q,000; 'estate t $85VOOO;
property, at the time of death. The : $500,000 estate $140,000; $1,000,Federal Gift Tax Laws are also ; 000 estate $300,000.
This: iss hot
based on this theory of transfer [ an unusual situation, so one must
a

not taxes on

profits are sufficient to bear the burden

of

expansion program, Robert
today. '
4

a;

needed

The

of exemption allowed to
surviving jsppuseihihe
left to.him or.her by the decedent
amount

a

The statute is more spef
to; the meaning ' of th£
word property, for arly interest
in the following species of1 titlej,
devised, bequeathed, or transf
fered by the decedent spouse to
the' surviving spouse, or inherit
ted from~ the; decedent spouse
such as dower, courtesy interest,
joint tenancy, tenancy be the en¬
tireties, joint bank account or any
other co-ownership with the right
of survivorship; if the decedent
spouse had a power of appoint¬
ment (exercisable alone or with

spouse.

cific

as

$4,000,000,000

His

view

h

is

said, must come essentially from

in

"A

pfaised^i^ IJuplop stated, must
bi§;Velated not only ' tp the

High?"

Too

•

:

economic

situation, but also

to: the [volume

of sales, to prices,

eral

r e

Profits,

Oil"

tp ^the^p.urthasing power * of tthe
dollar • ; and
to
the
obligations

-

Answering A
question, A

resting:on the industry to supply

this

^heJ1pi|'ipeeds pi the consuming;

Dun lop ;

piiblrci

stated [ that;.;
the "current
level of prof-

As

Dunlop

Robert. G.

official, financial adviser or

trust

now

of these taxes.

>

So that, in plan-

[ < Before

estate, one must be
that the overall picture, tak>
one's

ning
> sure

j

ing in all its aspects, are given to
the estate planner, and that you
have confidence in your trust of¬

ficial,

l ing
v

us

look at

a

we b can

Government;
compete the

taxes on an estate, it is necessary
to know what the estate is made
up

of; the "net estate"; the "gross
the "adjusted gross es-

estate";
tate."

What Is

legal or financial adviser.

6f the subject, Mr/.
Dunloii; arrived at the following
necessary; to enable the oil indus? conclusions:; * ;'' '
' :
try- to [meet the (demands being
[
:
"-(!)
An
excess
supply
of
phoney
made* upon - it.: and to assure the in
..proportion to production re¬
consuming public and the Armed
sulting* from- loose pEionetary: p<^-;
Services
adequate supplies .; ol icies, is responsible for spiraling
petroleum products at reasonable demand for inost commodities and
prices- in - the years ahead.-*',
consequent, inflationary prices.
its:

these 'aspects

vitally...Aw,-;

is;

.

of husband, and wife; a son
grandchildren. The hus-

and three

belonging to the decedent at
the time of death.
The estate may
include cash, bank deposits, realty

p band dies leaving all his worldly.
goods to his beloved wife. [Some
thereafter the widow dies

holdings,
to

the

spouse

from

the

a

decedent

«

.

economic

■

condition is the basic cause few an

>

) [ This

would,

been factors,

also have

•

will

marital

no

would

deduction
specific

,

insurance payable
decedent's • estate or to
life

know

that

of

death

would
result

others, stocks, bonds,
all

>

-

erty first left by the husband and

set of the estate.

Very little can

disclaimer and such disclaimer is
absolute

considera¬

without

and

tion it is not deemed to pass from

the

Ctewlanl-Cliffs l»»to.

South Jersey

Detroit Hirvester-

Struthere WeHsCorp.t

PortsBiiu'liSlsjt;

Texas Eastern Tra»$.?

Bought

—

Sold

—

are

the

J

ing

together,

Telephone BArclay 7-0100




-

-

-

{

*

*

,

<

-

Quoted

marital

even

if legally

the

status

marriage)

not
the

complete.

The

separation

(such
is

decedent must be a citizen of

Exchanges

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

-

United States or a resident
of. The law

the

^

Accentuating the oil industry's
problems
was

the

ciation
of

Dunlop

Mr.
fact

explained,

that current depre¬

allowances of the Bureau

Internal Revenue; while

cient

to

cover

the

suffi¬

cost of exist¬

there-: ing facilities; are not adequate to
provide for its replacement at

applies to those dying

(Continued

cn page

28)-, v ? today's prices.

The difference, he

leader

a

of in¬

since 1941, in¬
output
substantially

than other major industries.

"(8) Increased

prices

and

ca¬

pacity sales volume together have
oil

doubled

than

more

industry

profits since the end of the war,
but; last year only one-third of
these: profits was paid to stock¬
holders.

"(9) Profits reinvested in the
industry have made possible
a
$4 billion capital expenditures
program for 1947-48—a rate twice
that of thd War years and- almost
oil

times

three

that

of, the

prewar

Without such profits this

period.

would hot have been' possible.;

,"(10) This
the

for

Depreciation Allowances J

married and liv¬

or

.

terminating

;[[

surviving

the

other legalistic

are

spouses

separated,

Members N. Y. Stock Exchange and Other Principal

r

mat¬
ters that must be considered be¬
fore
a
"Marital
Deduction" is
There

Goodbody & Co.
115 Broadway, New York

to

[

seen."

Only one-third of the! oil in¬
dustry's profits last year was paid
to
stockholders,
the-remaining
two-thirds being used for replace¬
ment and expansion of industry
facilities, he added.^

permitted. If, at the time of death,

tResearch item available.

f Prospectus on request.

decedent

spouse.

Tenn. Gas Trans.

RwXweH M'f to.
t

Gas*

mains to be

become

creasing
more
-

and
war
spending" solely
were responsible for the postwar

thus

industry

petroleum

"(7) The

dustrial expansion

financ¬

securities of administrator of the estate. If the
kinds, mortgages, notes, other surviving spouse takes under a price spirals. Although oil prices
leaving all her worldly goods to evidence of debt, interest in and Will of the decedent spouse, the have bounded sharply up in re¬
t her son. Thereafter the son dies to partnership property, joint interest passing to him or her is sponse to those:- infli^nces, they
determined from the Will. If by have hot fully reflected the de*
f leaving all his worldly goods to property, tenancies by the entire¬
of
the ' purchasing
intestacy, then, by the State laws preciation
his three children. Here we have ties, interest in trusts or powers
governing distribution in the case power of the dollar as evidenced
three successive reductions of the of appointment, gifts made in con¬ Of
intestacy.
If
the
surviving by: greater price increases for
many
other
commodities,
Mr.
; estate, because a tax is collected templation of death or to take spouse elects under a local law to
•
\
•
take her share against the Will Dunlop asserted.
v
by the Federal Government fpr effect after death, and many other
such interest is considered a pass¬
("Dollar earnings are the greats
| th<e. transfer of the property from classes of property. In fact, if the ing from the decedent spouse to est in the history Of the oil in¬
A the decedent to the beneficiary, decedent owned it or had a right
the surviving spouse. If the sur¬ dustry," the Sun spokesman said,
j; if we must consider that the tpree in or 'power over it, .such prop¬ viving spouse ^disclaims or-re¬ "but whether it is evidence of a
ceives an interest because of such healthy
economic situation; re¬
estates consisted only of the prop¬ erty would be; considered an - as¬
Mime

peak levels.

ing

thereafter in the discretion of the

the

X.

price' Index..

have greatly
stimulated ex¬
ploration and drilling, have
stepped up supplies from second¬
ary
recovery
sources and
have
increased over-all production to

held that "years of
money policies, Fed¬
deficit

materials and

raw

"(6); Increased prices for-crude

concerned
particularly the

Government

petroleum

oil

has

unorthodox
eral

year

one

or

other

and

Consumers'

Mr. Dunlop

to
the
surviving
This value may be as of

day

for

.In fact, it

consumer."

interest

the

of

passes

spouse.

the

value

the

hurt,

be

would

Deduction" is arrived at, we must

sharp

increases,
product
prices have lagged behind prices
oil

crude

would be that everyone

"Marital

amount of

the

"(5), Despite

government
to
ration oil

forced

be

about

much.

as

limit or re¬

products which in volume
grow less and less.
The

this

from

made

be

-

\

w

"(4) This demand, outrunning
the supply
of petroleum prod¬
ucts, has resulted in crude oil
prices more .than doubling since
1941, although product prices to
consumers have not risen nearly

the

end

the

increased

raising living [stand¬

thus

,

ards.

has

1941

since

34%

adversely affect all
"In

v;

"(3) Per capita consumption'of
oil products in the United States

destroying incentives,
production.

by

general

.

unprecedentedpostwar demand.
for, petroleum products/ although
.increased population, desirability
of products and price disparities

of high cost or

marginal producers.

property is not included in the
value of the "Gross Estate" and
therefore,

the. output

duce

such

spouse

most certainly

would

marital deduc¬
surviving
inherits foreign real estate

subject to

Before

all the as¬

sets

family cbnsist-

not be

tion* For instance, if the

property.

Estate

an

An estate consists of

An Example
Let

regards
and gift tax

given to all states as

lawyer can advise the individual; the- income, estate
as to the savings that can bp made [ laws of the Federal

v.•

^

result of his inquiries into

a

-

*

Other

Factors

article

:

titled

to

.

profits to be properly ap-

Oil

released,

an.

Related

Profits

Oil

Company's
n a gazine,
S u n,"
just

•

,

the

of

"O ux
in

earnings.

current

current

e

issue

■

<«>-

consider 611 angles before deciding
He held that the unprecedented^
how shall I bequeath and devise
property is subject to the tax. As my estate. •
capital investments now being
a practical solution the tax must.
made by the oil industry for .proThe recent amendments to the
j
duction, refining, transportation
pe paid from property, so that, (Federal Estate, Gift Tax andlnwe
nee<3L not concern ourselves come Tax laws permit a very apand
marketing facilities — twice
f of the theory of these taxes.
those of the war years^—would be
| preciable savings. Husband;and
:
The basic change made in the wife are now considered having
impossible were it not for the
(Federal Revenue Act is in treat-1 a community interest in each
profits of the last two years.
ing both spouses of the marriages other's property; v A few states
Mr. Dunlop struck out at pro¬
as
financial partners, and thy [have had
community property
posed government controls over
) (passing of property as community j laws and have had an advantage
profits and prices. Increased tax¬
:
(property from one spouse to the over all other Stated because of
ation of corporate profits, he as¬
'other.
A deduction of 50% of the division of income and prop- others) to
appoint an interest in serted, would "hobble" the oil in¬
the value of the "Adjusted Gross erty between husband and wife.
property and if he or she appoints dustry's efforts to meet public
(Estate" is allowed In computing The communal laws are based on his or her spouse, or such spouse
and Armed Services demand, with
the net estate of a deceased spouse,! Civil Law and was unknown to takes such interest in default (re¬
"a continued tight supply-demand
provided, the law has been com- the Common Law, so that, it was lease or non-exercise) the interest situation" as the result.
j plied with in all its details.
I almost impossable to graft the so received by the surviving
"In
such
circumstances," the
r
At the outset, the intricacy of Civil Law of community property spouse is subject to the "Marital
Sun
President asserted, "prices
the tax laws and the savings that in most of the states: of the Union, Deduction." The value of such an
would go higher unless controlled
can be made within the law are
The Federal Revenue Act has interest must be included in deter¬
Imposition of
in the field of financial or bank changed all this and the
same mining the decedent's "Gross Es¬ by government.
price controls
advisers.
Only a well qualified rights of communal property is tate," otherwise such interest will governmental
pf property from one person to
another.
The right to transfer

C. Dunlop,

President of Sun Oil Company, asserted

Mr.

Now, knowing what the

is being met

because oil industry dollar

c

of

value

public and Armed Services demand,
America's record demand for petroleum products

expressed

[. ^;'P[a':[['

funoraL?LxPenses 6nd debts.
Marital Deduction 'is biased

on; the

and grandchil¬

dren,v the ^approximate

Estate taxes
duties are
property as such, but
the tax is on the transfer of such

|
;

tateb

simple trusts,
one-half for his widow and one-

Ackerman

Harmon
•.
or death

the

"Adjusted Gross Estate'* is
all of the decedent's assets les$
the cost of administering the es-

his estate Into two

.

v

The

fhusbandirah^ ifathfer .had divided

ognized for all

also called

This is
"gross estate",

escape,

...

that a consid¬
erably amount of death taxes cap
•her. saved.,['. For,, instance,' ;if :the

1 of the -States
f are how rec¬
pf the States
.pf the ..Union.

The laws

.

120,000
250,000 ::
: 600,000 V

ing your estate so

had

law: than

; ?.

§ 1,000,000 *

years.

commu-

...
'

500,000

in

;: The

VT ?"/1 $70,030;

$ 200,000

,

(approximate)

.

Value dfEstate

tax .:[[
had J

[existed
prior

TAXES AND ADMINISTRATION
EXPENSES OVER THREE DEATHS

DEATH

transfer

eral

would look as

father, the picture

:<*

Jf
...^

affected

now

oy a more

,

■' '-ij

.

.

replacement

[' •;

provides

program

existing

of

plants; constructed and developed
prior to the war at costs about
one-half of what they are today,
thus making it possible for ;the

indlfstry. to maintain output.-ij
".(11) Included also in this pro¬
gram is an expansion of facilities
?

increasing supplies needed to

for

meet demand and to set

forces

that

make

for

in motion

increased

competition and lower prices.
v

['"(12)* With

this [ utilization

of

profits, the oil industry can and
'is

satisfying

American
and

a

the

"desire

of' the

people for oil products

better standard of

living.**

Volume

Number 4730

168

,

THE- COMMERCIAL

>

Steel

The
vi* i>; 'i.rvyn

-

CHRONICLE

Are We

;

By HON. GEORGE W. MALONE *

Retail Trade

of Trade

?;

.

5

(901)

Running. Out of Oil ?

i»Electric Output
Carloadings

* v >. **

State

Production

&"FINANCIAL

'

U.

.

| i;

S. Senator from Nevada

•

Commodity Price Index

smdlndiistry

Assailing "kindergarten method" frequently used to measure projected oil consumplion against re¬
serves, Senator Malone stresses preponderant importance of political and economic governmental poli¬

Food Price Index

„

Auto Production 1.V'

■V:
-v

Business Failures

;

Declares crucial element is preservation of fait, competition under

cies."

J

of discovery of oil

profit system, for

assurance

actually in ground.

?
The kindergarten method of
measuring the projected estimated consumption of oil
against the known reserves to determine whether we are running out of oil, utilized cur¬
rently by high government officials, is dangerous to the peace and safety of the United
.

production the past week was somewhat mixed
with slight declines in gome industries offset by increases in others,
resulting in little if any change from that of the preceding week.
Overall industrial

'

sections of the country lay-offs were

In scattered

reported, but

employment for the most part continued steady and at a high rate.

Payrolls,

as

a

consequence,

also maintained at previous high

were

levels and labor-management relations, too, were mostly favorable.
In many areas
hot

weather

the chief depressant of the week was the extreme
a
retarding influence on factory production

which had

through heat walkouts.:; This was particularly true in auto manufac¬
turing centers where car and truck; output showed' a substantial
decline both for the United Slates .and Canada.
\
<
■_
;
I
; The current period, according to some; close- observers,: reflects
a
growing spottiness in busiiiesS &s f-eflected by profit accounts and
dividend declarations. However, the final quarter of the year should
bring out quite a large crop of higher special, extra and year-end
dividend disbursements, since accumulated corporate profits in many
instances warrant them.
:'*1
,

States

of

America.

In

recent
we

The nation's railroads

.

on

*

v*'

*

have

seen

that " the

po¬

and

economic pol¬
icies of a cen¬
tral

Friday of the previous week asked the

Policy Decision

oil pro¬
duction within.
upon

basic

I need only
Mex¬
Geo. W.

ico to demon-,
strate the de-

Malone

coal, cokfe and iron ore by about 10%.
■' AA ' -r- ^
;.'/(? v'\ '
If the request is granted, it would increase average rates on teriorating effect on both devel¬
anthracite and bituminous coal and coke throughout the country by opment of already proven fields
25, cents a net ton, or 28' cents per gross ton, and on iron ore by and discovery of potentialities, re¬
20.cents per net gross ton in the east and south, according to the Asso¬ sulting from governmental policies
ciation of American Railroads.
The carriers estimated that these which unduly hamper arid restrict
increases would yield approximately $140,000,000 a year on the basis our free enterprise.
on

;

of

1947

traffic.

Since

V,

on

modies—including coal,

iron

ore—have

granted,

would

above-the

1939

raise
level

freight rates
to

on

This

45.9%.

all

that

000,000

more

to

revenue

cost

cover

rises

and

change perma¬
nently its century old policy of
protecting the workers of this
country against the low-wage liv¬
ing standards of European and

increases, if
44.2%

from

it would

add 1.9%

with

troleum

tional
The

their

same

vigor and pursuit.
answer

fill

the

gap

between

will

be

is

the

the

basis

entire

As

of my

substitute

a

opposition to

program.

'

.

and

\

as

a, rem¬

edy, I introduced Senate Bill 2582
the last session for the imposi¬

to our

tradi¬

question does

more rich fields,
discovered at deeper ho¬

of

which

import

an

fee at a
permitJ "fair

would

rate
and

reasonable

competition" between
domestic
and
the
imported

the

item.

'

■

,

-T

■

■'

v

\

-

This law would be administered

by

bipartisan body

a

of experts,
fee
in

and the amount of the import
would be determined by law

with

accordance

(Continued

the

principles

on page

35)

became effective in 1934, the

trading" with foreign na¬

tions for reduction in tariff rates.

this

we

"horse

tariffs

,

tion

Since the Trade Agreements

What have

new

pursued, of achieving
irrespective of
the
practical effects on our economy
trade

free

Asiatic nations.

"horse

they need at least. $611,^ riot lie in whether

.

to whether

to

their lime; energy and money in
the discovery of new pools of pe¬

all

on

to. the overall effect of freight rate increases since 1939.
It is the contention of the roads that

.

as

is

nation

com-

commodities

means

avoid making

this

risen about 44%.

It is understood from the Association that the

.

gress Can no longer

the definite decision

fair com¬
petition tinder the profit system

iron ore 20%, while ,the rates

coke and

The Con¬

will Americans continue to expend

coal have advanced 27%,

on

involves a
economic

fundamental

those

\

1939, the freight rates

It

with

Ac'
State
Department has substituted a pol¬
icy ■ to; use its own phrase, of

! Only in the climate of

coke; 25% and those

on

decision.

and

policy of government.

Rus¬

and

major

a

V-„'

v,

This country is confronted

■

that country.

sia

fanatically

at

Nation Confronted with Major

ment have a
direct
impact

.

low-wage

govern¬

mention

Interstate Commerce Commission for authority to raise freight rates

——

Eu¬
ropean and
Asiatic countries —
does
not prevent the - necessary
imports—but brings the foreign
product in on our standard of liv¬
ing level and keeps our workers
in the oil business.
V
the

and

country

years,

litical

-

*

«>

\

are

received from all ol

trading"? Today our
lower than they have

been .for, 100
years ^while
the
tariffs arid trade restrictions im¬

posed

foreign

by

countries

are

Dome

Mines, Ltd.

Hollinger Cons. Gold Mines, Ltd..
Kerr-Addison Gold Mines, Ltd.
Kirkland Lake Gold Mines,

Ltd.

what they asked for and what
they received in the last general rizons or >iri. new ( formations—*for now more extensive than; when
Lake Shore Mines, Ltd.
freight rate increase, granted July 27.
on
this .one can only-speculate. this program got under way in
r This
sum would
require average freight rate boosts of at least More pertinent to the answer is 1934.
Macassa Mines, Ltd:
7%. The commodity rate increases proposed on Friday of last week that we guarantee
There- is po difference, to my
ou^V System of
would make up less than 2% of this 7%.' 1
Mining Corp. of Canada Ltd.
;
^
freedom of opportunity so that if mind, in importing the low cost
;tv' ; v" "
*■}■■', * '
# ;
'
•; oil
is, in fact^.ia the ground,; we labor and in importing the prod¬
Mclntyre Porcupine Mines, Ltd.
New businesses chartered during July in the 48 states numbered assure its
uct of the low cost labor. The re¬
discovery.
Noranda. Mines, Ltd.
7,690,. a drop of 10.1% from ♦ 8^50 in June; and a loss of. 14.9%
sult in either case is a leveling of
compared with 9,041 in July a year ago, ■ according to the latest Flexible Import Fee vs. Selective living standards throughout the
Pioneer Gold Mines, Ltd.
compilation by Dun & Bradstreet, Inc. The July count of 7,690
I
world and under such conditions
Free Trade-..
represented the smallest monthly total since November, 1945, when
Ventures, Ltd.;
i
The American user of petroleum there is no place for the standard
;
7,120 companies were incorporated.
3:^ and its by-products has two of the American worker to go but
Wright-Hargreaves Mines, Ltd. I
The July total brought the number of new stock company forma¬
down. /•;*, '< ■ "*
sources of supply-~^American oil
tions for the seven months of 1948 to 61,928, and compared with
and imported oil.
Unfortunately
68,414 for the similar period of last year, a decline of 6,486, or 10.1%.
1934; Trade Agreements Act
the physical appearance of im¬ :j
The current figure contrasted with a record total of 83,687 incor¬
The Trade
Agreements Pro¬
ported oil affords no basis for a
52 WILLIAM ST., N. If. 5
R*nover 2-0980
porations in the corresponding seven months of 1946, a loss of 21,759
administered
by the
"Buy American" appeal to the gram, as
Bfeli «Tel6t^pe NY 1-395
>. *
'
State
Department,
encourages the
patriotic eorisuiiaer in thri event
; '
"' r Priv&te Wires Connect" : i
importation
of
the
products
of
the
How York
Montreal
Toronto
excess
imports threaten the sta¬
low-wage standard of living na¬
bility of the American industry
tions
in
competition
with
our
own
end in turn our own national sp*
JIIIIIIIIIIIIXIIIXXXXXT
Retail dollar volume was slightly above the level of the
preceding curity.
products in our own market. As
*
t;"
week and moderately above that of the
comparable week a year ago.
The product dispensed; ;at the you in the oil industry well know,
Favorable weather in the early part of the week and the
approach filling station bears no "imported" the Trade Agreements Program
of the back-to-school season
cn
has not, despite propaganda to the
encouraged increased consumer demand label. It is well
recognized that
lor Fall merchandise. Consumer interest continued to
center largely
been satisfactory. Yet
today
we must import a certain contrary,
on
For clever, helpful hints
moderately priced items. .Summer clearance sales were well small
in April of this year the State
percentage of oil to satisfy
attended during the week.
'
for selling securities read
the unprecedented gain in con¬ Department, oblivious to its own
Wholesale order volume increased
moderately during the week, sumption as a result of the cur¬ record of failures and with conwith total dollar volume slightly above the level
the
"Securities
Sales¬
of a year ago. New
rent high level of national income. temptous disregard of the eco¬
orders and rerorders for Fall apparel continued to increase
nomic consequences of the recent
moder¬
An import fee, however, repre¬
man's Corner," a regular
^
ately In many localities. The wholesale order volume. for
many senting in general the differential Geneva tariff slashes,; demanded
foods rose slightly. Although there was a
feature in every Thursslight increase in textile of cost of
production between this renewal of the Trade Agreements
order volume, during the week, buyer demand remained " near
Act and a continuation of - its un¬
the
day's
issue
of
the
preceding week's low level.
■;
*An address by Senator Malone hampered authority to make fur¬
"Chronicle."
ther
tariff
cuts.
before
Interstate
Oil
STEEL PRODUCTION SCHEDULED AT LOWER
Compact
RATE FOR
Commission
CURRENT WEEK
Meeting,
Hotel ): The eventual elimination of all
Roosevelt,? New York City, Aug. United States tariffs is its inevit¬
Steel consumers will not find steel supplies easier to
get by the 31, 1948.
able goal; This preconceived aim,
'f;"; J
last
>

■

^

HART SMITH & GO.

■

,

.

.

.

Pointers

Selling

.

H

.

quarter of this year,

,

.

next

year,. according

but

more

difficult in the first quarter of

"The Iron Age,national metalworking
weekly, in its current review of the steel trader ;
:
"in. steel quotas for .customers
during ,the • last -quarter of
this year are an established fact; says the trade
.to

.

"OBSERVATIONS"

■A. Wilfred

May's article

was not

'

,

..

available tliis week;

Incorporated by RoyaLCharter 1727
'-vi:i: '*!'!.'* V**/

magazine,-, arid

'V—(Continued

on

page

Royal Bank of Scotland

Branches

■

I

TRADING MARKETS

"f '•

Time Inci

MAINTAINED

Halliburton Oil Wei} Cementing Company

Magee Oil Industries, Inc.
Roosevelt Oi) & Refining Corp;

V-

$'

1

v

v

McGraw (F. H.) & Co.

Common

Bought—Sold—Quoted

:

'- V

72
.

'49

Members

Nat't. Association of Securities

WALL

64 Neiv Bond Street,

Telephone: DIgby;4-5700JiiZ; 5, r.

,%£££*

W. 1

"

.TOTAL ASSETS

;

;

i -

%

:

O Teletype:• NY 1-2813.
,

£153,656,759

FREDERIC H. HATCH & CO., INC.

Dealers, Inc. j"

STREET, NEW YORK 5, N. Y.

Charing Cross, S, W. 1

Burlington Gardens, W. 1

Convertible 6% Preferred

,

MERCER HICKS & CO.
'Mi

£'Bishopsgqte, ,E. €. 2 ' ^
it. C. 1

Z West Smith field,

American Maize Products Co.

Roosevelt Oil & Refining Corp.

throughout Scotland

LONDON OFFICES:w.

-

£ Kingan &

Kerr

U'.:

IT'v

HEAD OFFICE—Edinburgh

25)

;:

**,

83

J,

Associated

Established 1888 .rp-

MEMBERS Tf, Y* SECURITY -DEALERS ASSOCIATION

.Waif Street,. New York S, N. Y.

Bell Teletype NY'1-897 "

-.c'.c;

Banks:

A Co... ;,
Bank,( Ltd.

Williams Deacon's

i-.-f; f-V;

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THE

(902)

6

The Correct
/. *

COMMERCIAL

&

FINANCIAL

CHRONICLE

Approach to Bank Supervision
Jf. V.- Kb# EKTSON *'r

.

Deputy

'

A

t

"

Establishing U. S. Firms in Britain

Currency

-

Dr.
or

banking

Einzig

reports
in

Clauses

Describes modus operandi of bank Supervision and tells of official publication giving digest
and interpretations relating to powers and operations of national banks. Calls for honest

i

and frank disclosure
conditions

Far

East

where

Europe which,

with

even

...-.Kill

V.

uphill
fight. At
home, our doan

L

■

'

of
$>

nanas
over

is

at

faster.

and

er

The

fact

this

is

1

i

fast¬

—

i

t

that'

a

1

a

year, and that

people and
parties can
blame

for

sup¬

success

once

old

on

our

strength of all of

is

J.

—

will, not

soften

L.

own

the

prove

the

blow

which

our

masse"

belief

that

people

even

to indicate that it is true.

in

the

face

situation,

inclined

too many of us are
let someone else do

to

the worrying—to turn
away from
unpleasant realities and to look in
the other direction where the out-

Ipok is more to our liking. How¬
ever, with high; taxes to the left
of us, high
wage and price levels
to the right of us,
expensive world
add arid military
plans in front
of us, and inflation all
around us,
it is getting more arid more diffi¬

cult to find
out its

a

view which is with¬

disturbing aspects.

;:;f But these
ing in

not

are

to, doubts

days for giv¬
"what's

or

xtse" attitudes This
to suCcurhb to

the

ijsp't the time

lethargy

or

com¬

placency. This
face

is the very time to
future courageously and

the

resolutely, with the
tion

that

our

own

full

realiza¬

self-preserva¬

tion makes it
imperative that all
of

.us

and

•

work

together

unselfishly

harmoniously.

Among othei* things wc must
looking at government as

stop

something apart from
something

manned

the people,

by

who

men

*

An address
by Deputy Comp¬
troller Robertson at the
Kentucky
School
of

Bank,

University of
Lexington, Ky., Aug.

Kentucky,
i-*7j

lulO.

Off

must

to

Stupor of

by

the

devilish device of inflation which

Saton is now using to lift us
up to
succeedingly
higner
and
more
dangerous ledges, - off which he
can push us at his most
opportune

to save

economic inferno.'
far

fetched

for there is enough of
what
at
first
appeared
to
be
"sugar" about inflation- to cause
may

of

by

not

least

profiting from
inflation at the
crushing expense
all those who have
fixed incomes-r-the salariedworker, the

of

pensioner, and—as your trust of¬
ficers know—the women and chil¬
dren who are
trying to live off
the meagre income of
what used
to be ample trust or
insurance

BOSTON

ST

of

Banking

responsibility of the bank¬
iractrnify in mis respect u
1

group

only

but

in

also

delicate

task

credit

any

ihiiiK

of, liiA
influence

their comrnuni-

because

of

tneir

of

keeping
the
economy oiled with

Wheeis of our

bank

aimosi

the

of

bankers wield

lies,

ot

can

because

to

the

most

precise

degree. Too much oil in that form
will

increase

revolutions

the

of

and

compared

bf

velocity of the

those

wheels

and

further up the spiral of

us

ever

burden¬

more

devastating

conse¬

effect which

quences—an

Boston & Maine Prior Pfd
Boston Railroad-

unnecessary

Tne
ing

some

Trading Markets

now

with

the

can

consequences

continuance of excessive*

a

be

un¬

necessary spending,by the people.
To cut off the flow of bank credit
oil completely would cause those

Holding PfcT.

Boston- Edison

"

j-yv

New England Limn Common
Boston Terminal Co.
3y2s, 1947

k.

i

••£*.w

'p^

j A

wheels to

«

INVESTMENT
509

SECURITY^

OLIVE

STREET "

slow

,

.

*

-

down

fast

so

and

dollars

save

dividends

its

cover

leave

and

a

It

'is

of firms engaged

in

margin

in favor of Britain,

only in

case

Kingdom itself
little of

re-,<

stock- *

Dr. Paul Einalff

such

exception

an

produce very

materials. The

visions

under

mainly

the

article

the

has

can

Article

V

Colonies:
British

undertaken

pro¬

concern

Under

that

Government

to

treat

any

on the
part
of many moderate and Conserva¬

British Colonies. Much

velopment

the

of

American

the de¬

as

Colonies

enterprise

by
be

would

welcomed in many quarters, there
are
some
misgivings about the
unilateral

character

the

of

pro¬

posed- arrangement.
For
it
is
feared that once American stock-,
spite of the fact that the limit to; piling purchases are
completed the amount to be guaranteed by: the British Colonies will be-left
the United States Government has ! with
an
increased producing cabeen fixed at $300,000,000 for the
j pacity without corresponding exwhole of Europe. But it would be i
porting possibilities '•
mistake to dismiss opposition to!
industrial penetiatian

a

as

something

confined

Lett-

to

the

,n

Americani

t

and

economic

the prospects with some con-,

though then

even

the

United

political,

States.

r

in

British
a

a

managed branch factories
to

pay

are

ex¬

of

not

dividend

a

Capital
be

would

times

payable

-on

commercial

Britain

cost

the

rate
a

dollar

terms.

out that there

tion for such

can

that

It

be

crease

about

loan,

or

in

brder to

a-n

in¬

der

exoand

•

pro-

By arranging for an in¬
the output through the

be

of

American

possible to

capital

obtain

the

v

is

in

order. to

-"

!

-

encourage

British

countries

that the

.

ar-

-

it

the

EkC.A.

Administration

ity into

dollars, of -the; pToceedsY v
bpprbve<f. American'' investf
hiebts up tb 100 ^ ,bf: the dollars invested; For the -pUrposes of the '
bf

justify iher granting qi

icensq fo» American

number

undertakes to» ensure convertibil- '

decrease of imports

firrfis^-; that

jth^^hqu^d;'beVable: to

t0

high

a
a

•

be

to

rangement providing for; trahsfer,;
guarantees hak been, secured; UA-.

i;orn. -hard
currency
countries,
Sven, so^ it; is qonsidered essentialv
n

had

American firms to open branches

costly form of bor¬

a

firms

.

of

will

It

of exports- to hard currency

countries

have

rei

stockpiling

•of the commodities concerned^

on

pointed
justifica¬

rowing unless it leads to

for the
•

would

is

no

o£, the

•

produc-

increase of the output
without an increase of the price.
And
once
the
stockpiling pur¬
chases are completed the surplus j.
producing capacity is expected to '
result in a sharp fall in the prices

less than 10%, the dollars derived
from the investment of American
three

the

0f

necessary

high rate of interest. Since wellpected

B«u^h

oenetration
it

very

special.;

the

achjeved
by
blddtag
enougb prjCe to induce

crease

industries

loan at

of

rubber

,

would

duction.

existing cir¬
cumstances the American capital
would amount to

scheme

the side |
of

on

It is argued that in

invested

t,

quirementj

experts, too,

sympathies he entirely

increase

tbe

wing pplittcal circles, Many Brit-;
„
ish businessmen, government of- i
tieials

absence

a)-rangements under the bilateral

•

.

guarantee it: makes;

produce

;

;whethei*;such "proceeds* have* beerr?
^oihetlung" Britishk
ar^'unf
the whole economy of this, couri^ hble to produce. If oughtto fbe
merit, as; repa3mient;reti^
jtry would be jeopardized, with borne in mind that; owing to the
world-wide repercussions. jlTes; shqrl^e:^ Jgbqtfi and'., .tavir "nia.-. investment, in whole or; in part,';
or as compensation for sale or dismuch depends upon the correct lefials^^^there,:is-& long yraitin'^ list
grind to such

.

or

will have to be made. The United

enthusiastic welcome

of

Responsibility

i

inflation with

LOUIS

to

earn

purposes.

eein,

oLner

are

our

can

American firm on an equal
footing
] The altitude of British opinion | with British firms. This does not
towards these provisions ranges!
mean,
however, that the floodfrom uncompromising
hostility on | gates have been opened to an
the part of the political Left to
inflow of American capital into

pur
economy
against
whatever
the future may hold in store.

some

actually

for"

sufficient extent to

a

;for stockpiling that

quired by the
United States

view

greater man that

who

u

it

to

the production of material needed

engaged

materials-

that

probable

en¬

the proc t i on o f

injury and take steps to cushion

fewer dollars they used to have.
And I regret to say that there are

people—variously labeled—

solve

resistance

further

prevent

carry

■

not

minimizing^; their

damage; but we
so'tfar elong that we-can¬

not

are

seem,

many
people to enjoy it; they
iike to have more
money—even if
it
is
worth
no
more
than the

the

avoid substantial

it

as

In

economic

difficulty or by philos¬
ophizing on human reactions.
It
highly probable that we have
already gone too far along -the

path

so

of

scope and

be insufficient to enable

down .into

individual
are, to say

n

d

less

has been based

shall

we

problems

is

falling all the way!

r!

al¬

the other side.

lti
uie
hope mac once on
downswing even our most
frantic grasping and
groping will

ourselves from

fjirms

very

or

unpredictable.

expectation

But

I

nine,

us

which

our progress

the

.on

the

an

more

V

Stability, and it is losing moment tive-quarters. It goes without sayiSng that Communist propaganda j
turn in an atmosphere
permeated
by uncertainty and a feeling that has denounced the facilities as yet!
another
means
we are
by
which
the
staggering further and fur¬
United States is seeking to acther through an economic
quick¬
sand, with no firm ground visible quire control over Europe. This in |

wake

not

be

to

for

least,

on

up and throw
off the stupor which has been in¬
in large measure

is

a

"get tneirs today"' when

future

a

the

duced

That

of

use

planning and provision

Inflation
We

found

want

past,
Must Throw

the

both international antagonism ana
aomestic inflation make them fear

"en

of
;

ba tan's

of

and

sures

will 'measure tne

.

aroused

are

swing of the pendulum.

Unfortunately,

of

all

guarantee

capital'

equal>
treatment for;
A m Ai-; f c 'a n r-

to

! It is not surprising- that people

inert and

are

and

economy

device—one which he has

ways

by calamity or catastrophe,
though history would seem

Only

our

to American
firms will only be granted if the
British
authorities
are
satisfied

transfer

Article

as

effective, notwithstanding the ar¬
dent preachings of far-seeing and
public-spirited men. -AA

as¬

us.

economy will suffer with the
inevitable
shock
of
a
reverse

this

which

and

feet

remains that license

dividend, and

being hurt oy .it.;
tide will turn, just
it always has, and the extent

We must take steps now to dis¬

Robertson

it

not until it gets
until
they
stand in

ctanger 01
But the

sistance, because power for good
dependent upon the combined

consoling

least,

port

stand

For this reason, the general rule

Article

a

ac

.♦

Col-

provides

government lor paternalistic

and

British

for

worse—not

Britain, providing for special facilities
industrial firms desirous of
establishing themselves in

the

or

nave

people are hurt

protection,

Britain

III

Those profteers wouldn't
inflation stopped for any-

acter, as the servant of the people,
manned by men who are a crosssection of the people, and who
are, subject, to
the will of the
people.
We must stop looking to
and

United States and

estates.

tning;

is

the

inaction

and start looking
in its true char¬

everyone;

government

more

consequenc e s

of

control

01

look to each other for aid and

each

other

levers

new

.

po-

c

on

the

for American

onies.

:

continually trying to get their

are

getting out of
kilter

LONDON,

are foreboding.
Take, for example, the
is worth 100,000. Cninese dollars. Or look at
aid, is finding the attempt to return to normality

—

which pro-

facilities for American firms desirous of
establishing
themselves in England and its colonies.

.

tween

money

our enormous

'

domestic
economy

our

f

!1)

ENG.—Negotiations arc proceeding for the interpre¬
tation,, and application of Articles III and V of
the bilateral pact be¬

and avoidance of totalitarian control methods.

throughdut the world

cent

one

(<

conflicting British opinion regarding the effects

bilateral pact between U. S. and Britain

v.de special

of opinions

Economic

.-.by.wei.nzk:

,

Comptroller of the

Stressing banking responsibility in combatting in lation and maintaining economic stability, Federal
bank supervisor urges cooperation by bankers and supervisors in safeguarding soundness of
system.

Thursday, September 2,-1943

an

abrupl halt thai

•

ST^our^T,:Mo^

DAYT0N1MGNEY & CO., he.
75 Federal
Street, Boston

Private New York
WOrth

Telephone

Members St. Louis Stock

functioning

of

the

banking •
tern of this country.;';

sys*

so

■

4-2463

'

means

school^ whe^e te
how

to

operate their .instl-

NORTHWEST MINING
SECURITIES

CREEK

MINES

For

Immediate Execution of
Orders

Quotes call TWX Sp-43 on Floor
of Exchange from
10:45 to* 11:30

LEASE

Long-established
of

several

Creek

well-located

properties,

term

leases

forty

acres

records

on

will

mines

with

ranging

A.M.,

if

to

Joe Dandy
315 Colorado

two

Sp-82

at

personal as well as their public
points of view.
Your very presV

Members Standard Stock
'<

Write.

-

Exchange

Of Spokane

Dealers

-

you

realize

the

--

■:•'

Spokane.;

Branches' at

Kellogg, Idaho and Yakima, Wn.

need

for

devising
them;

of the fact that you are aware that

banks, as we know them in'this
country, are not just depositories
the; people's-money, with the
right to use it for their own profit

J

are

whose

grevAriiencaa

riot! corineqted

with

the

■

product V

materiafs^h^^

which

have
or

to

be

l^;cut&;bptlY.ways:;^^;i;',,.

trans-,

i

later, into; dbltars.-

jt^is true; under Article Ilf, it wilt
be the

United States Government

that would pay out the dollars for
that purpose, and would acquire

the

'sterling

amount

counterpart

expended.

But

of; the

sooner

or

,;<8oecial'
^

"Tkk FinancialChroniclef: iy-.j■

/MILWAUKEE;

'

WIS.George >

M. Thorsen has become associated
with Charles W. Brew & Co., 733

later sterling ' will- be. •
spent; on Nprth - iWafer
] Street^ftbe^past
'qfficei;s Something. Which would yield; dol¬ he conductqd hiscowri. investment

quasi-public institutions-

trusted' custodians

(Continued oh page
,

ways

propf

cerned;; there!

ca^

otherLairarigeiribn%

dends

the

permit to
"Unless
the

concerned^;

through ite eu-rreni
tibrrpC stockpiling
output, much more dollars than
thte British firm j, the granti og-cf A would- ;be* welcomed in Britairii;
permit to the former would only Like so many
mean a net loss bf dollars in the
under the bilaterai pact.. . Article
long run, to the extent of the divi¬
ierred sooner

practices

of a

firm;

{earn: or ^ save

present procedures" and

better

but
•

refusal

importance of
doing a
job, the importance of see¬
ing more clearlyThe defectk-iii
your work, the heed for

of

Underwriters

Peyton Building,
-v.




'

'

Denver 2, Colo.

.

-

Brokers

ElXXXXlXXXlIIXIXTTYTYYTX*
.Hi,'

here is proof of the fact that

and

production
$4,000,000.00.

'

ence

.and means to correct

STANDARD SECURITIES
CORPORATION
,
v

to

Mining- Company
Bldg.

Time:

Cripple
long-

past

desired.

Std.

grant

from

References exchanged.
Engineering
supervision

Pac.

other hoursv

company, owners

the

^omfe ;4 British

bctter~-better; frbmidheif lAAiefi<^%iifiim^^

tutions

or

I

that' the. granting of permit to

■] r.V; While i this ^rideritakih^^^ repre£0
wholeheartedly in favor. Vol
for bankers, such as^ this am,; American, -firm ' necessarily

.

F OR

bf^r factories

|yhjch ;,could, eafj^'o^save^dpnar^
So

onof
learn

SPOKANE, WASH.

jinjiyTlll>f>TnTTTTrr

GOLD

;

<

crea¬

schools

DENVER

CRIPPLE

schemes for the

tion L'prA;^

It io for ^thls\ reason fvaih

Exchange

pf -British

A

lars to Britain otherwise.

' A .busiriessi"m:Milwaukee;

•

Tolume -168' ? HumBei? 473 ft

THE?

COMMERCIAL & FINANCIAL CHRONICLE

Immediate Problems of Retailing
By DAVID M.. FREUDENTIIAL

Economist cautions about elements' threatening to profit* and- other

new adverse factors, including
possible tax increases^ cash positions, prices, expenses*, savings- declines,, and competition arising from
housing'and capital goods. Urges retailers' buying policy based, on consciousness of prices and
buyers-resistance.

•

Ahead
S

of the Neivs

By CARLISLE BARGERON

■

■

,

'

1

=

,

lot of people* raying, they wished Wesferdok Pegler
wouldn't write so much abouf racketeering: labor leaders. Frankly,
<Youj heat

a«:

,.

I have said it

myself because he is

entertaining writer and I am
looking'for entertainment whenever I; pick up* his column. But the
d:a. r n

d'e' st'^

racket

you've

ever

seen1*

going

on

right
it

and

now

b

em

is

race

those

s

leaders

manage

the* credit.

He

in¬

said' to constitute* about

ever

grddtest array of committees
working

on

one

single thing.

I suppose;

you*

to

prorre

that,, of

saying

exception I
how

little

amazed to

was

feeling

they

learn

had

their endeavor.:-

:.

in
\

are

*

at

expensive

an

when

home,

he

cigar after
does

never

buy his fellows

that

drinks

words, live in a style that he, him¬
self, would5 not lfve if he were
paying for it.
When the Taft-Hartley bill was

pa&^l these* labor*
best

of

leaders*-4he

them,. Phil Murray,

Bill

Green, ef al^-contanued to call it
slave-labor

a

undying

bill

and

vengeance

time

went

to

swear

those

upon

who had voted for it.
As

o-K

.

.

,

they

(

became

more

boastful and announced, that

huge

sums

would" be

committees

would

raised

be

set

and

up

to

force; fee repeal of this montsrou$
issue.
It was as if it gave these
lellows-a new lease on life. They
had

something

sell, their

to

con¬

stituents*, they had; a method of
showing, activityto justify their
incomes.'
t
j
.

r

these days and times, labor
leading is not the easiest way to
In

make:
is

living.

The government
competition^ There? is the
a

in

natural

tendency of the worker in

such, times

he* .is

as we are

having" when
employed! at high

felly

wages, to ask what the union has

got to sell;
are

On top of this, there

.

things the

many

so

govern¬

ment does.••'

r

So; asti* said, being
is not

bed of

a

a

roses.

labor leader

A fellow has

got to keep on. liis tpes- lest
fihds lfi§ membership'dirdppingoff.

The Tafi;-ftaHley Act; therefore!;

,

seized upon by; the leaders

was

,

from

manna*,

the - Heavens-

something

was
.

l" v

about.

1

they
,

advice

my

c

Which

could' Howl

-

;

_

Welly they set about, by way of
showiiig. what febipwere doi»g; for
the boysy u taxiilg ;themiv to rrnsk
fund^ to^defeatr thi^/slay^aet^ ^

j

i:

By the time- they have got mil¬
lions -of dbllars infe'-fends to dd

third
of its

methods

I

could

c

in

larger tax rate

David Frcudenthal

his
I

told:

was

sales.

ments

most certainly

could

come

on

cor-,

into

of

1947

important question today but with

;

wouldif't ;dali^ r^ifnr; it ■ dh<d

even

a

with

machinists

have

haVe' .one

'Therearemorecpm
sp^nd feis

.

money

at.

'

than

you* can

shake

•




"

a

1947t

In

some

stick

the

to

circles

t

Witt Investigate;j
:
Boston & Maine Plan

,

.

the .plan1

when the results of the

committee's

f* i n d i n g.&* are: an¬
When contacted yester^

nounced.

can

be voted

on

We

announce

..fee?: formation of

We

StEBf« eOMPAMV

are

pleased to

announce

holders
secure'

it

is t first

necessary

to

MR. ELMER E> MYERS

Member National; Association

.

h

v.

of Securities Dealers, Inc.

.

the^approval^^ Of tfefef Thterf

the effect of thex

protective

mittee wilh be

fee: approval'

on

Maine plan

pi*

provided it is passed

by the ICC. '

' /

"

-

•,

t

is

now

associated with

our

-'f: "•

organization

27 WltLl«W? STREET

NEWT YORK
r>

;

,

KL X.

Digby 4-21-90

GEORGE B. WALLACE & CO.

retype NY i-I055

epm*-

disapproval :■ ef*;;';fee^-.iBpsfeh''''',A''

that

(successors tn- Goul'et £' Steirr)'

by the stock¬

ir.

the

as

-

sayv feey Were mistaken;
Nd^
state Commerce^ Gommissipn,
It
they have: gone Mead: to: make ais anticipated that it will be of
showing.
They have set up the
committees. " The:A. F. of L< has great interest fe all? followers of
the Boston :
Maine tp see * wha j
ohe;?fefe^lf^!;bf^Opufs^

railroad ^brotherhoods

good

but, what was an inventory study?
He thought that a foolish question

■'

*

too

-

plan would; be.v .Before: any hew:

the

not

was

—

pTan

one;,

take the other ele¬

,

relationship with; the minimum? of
.But thedead'ershave'this moneyc

*

now

in: the: retail "field for

.

difficulty."

'

as

being—but
volume ''or profits and. we have
perhaps even more important willt
estimates varying from the opti¬
be the Question of cash position..
mistic increase for the year of
This is an urgent and perhagst all
10 % down, to an estimated break¬

porations

p?a<n^y; It

told4 him

in¬

British

profits

period ahead of us. What part of
depreciation. and fixed asset
the American* income is likely to
'management will* certainly again
go as sales to stores?
become ' of
larger
importance
Admittedly the second quarter
should! a:

inventory

o>m

which

the

with

volve

make

study- for

of operation

start

the statement and work back

So- let's

,

profits,

with;

accountants

to

considerations,

beginning w.iih sales and

ending

on

Cash Considerations

largest
kind

paid' for out: of tax sav¬

Aside from these

the world: He

this, the act' has beetWound4, by day, Mr. Skinner said that he and
the workers themselves, that it is the- committee were not sure what
no^siaVer dct i at -^afe - It-'hafs^ fattedl
their, stand' on? the company's new
right into
■> laborMfeanagemieht
,

the first and most interesting item

ings.

the

is

of

much' is

sought by
p mpany

They too start at the end, for in¬
stead

the director of
a

ex¬

will produce; or how
necessary it may be for the growth
of the business, regardless of how

-

as

Her6

>

v

as

consultant

was

*

what that

of

penditure

early
role

—

terms

-

take them to dinner. In other

even

my

1

:

diture in

higher corporate tax rate* cou¬
the latter is said to* be over-op¬
pled' with shrunken opportunity
timistic. But let's look at the long
to retain working capital; out of
until I explained to him that: in
range picture.
earnings; an already severe' situa¬
What are the elements in the
terms of my, semantics the words
tion' wilf become morb sevete;. Foti
present economy that' are1 favor¬
"inventory study" and "merchan¬ at
present,, it has- been* variously*
able 1o the production retail sales
dising study" were used in. con¬ estimated that American
industry
and what are the* unfavorable ele¬
nection with any and every kind
is
short of working
capital ' by
ments? First and: most important
of
analysis—what I wanted: to some*
..
$45 to $50 billion. From the'
is-the question of employment!; In
The leaders of the printers* are know. was:, what was his, problem? Federal Reserve estimates made'
1948 we have, seen an' all-time
come backs to- the- present in
apparently sincerely worried about j
July of this year, we learn that:
high in the total number of per¬
of:, businessmen business expenditures
their future, under fee actl They preoccupation
for
new
sons,
employed'to-non-agricultural
have" been- fighting to continue to With* the/very real problems* of plant and« equipment in the year
keep control over the supply of operating businesses in the. mer¬ 1948 are- estimated at close to $19i establishments, with? farm1 prices
at
a
high point and' farm net in¬
liabor.
This,, they are afraid they chandise field at a profit under billion. So that generally it would!
come also high.
The: peak of em¬
won't be able to do under the new a great variety of circumstances— seem* safe to forecast that Amer¬
which- circumstances are rapidly
ployment
was at the beginning ©f
order by whicht aiv employer can
ican business is going to- be look¬
the year and; although there has
changing,
if
does*
seem*
feat
employ whomever he wants but'
ing: for sources of working*, cagi
been a slight recession in employ¬
the worker, under a. union shop: elements that go> into the making tal. And
perhaps retailers whoi sell!
ment since then, it still is higher
of a profit might, tp advantage
must join, up within. 30 days
son: credit will have- this problem
v ^
than throughout the war years.
agains /, be: studied.
This paper, •to face more
The printers' union has always
intensively than, they
therefore,
deals
with
suchi an did? before the war; Of course., for Personal income* is likewise at a
kept down the supply of appren^
peak. And it. is- safe to; conclude
analysis with particular reference the:
tices and always sought to main^
purpose of this argument; the
that so far we* have done a» fine
to that: segment of the merchan¬
important consideration rests with
tain a shortage
so that overtime
job in reabsorbing into industry
dising field which relates to* re¬ the
fact that
with
receivables
at time and a halfv is an. important
those who were ihi the military
tailing.
mounting today, added working
phase of the printer's earnings:
forces.
The Profit Element
Such unions as those of the* mari-?
capital is needed- in the buildingOn
the
other hand, although
We can agree that we know up process.
time workers and longshoremen
The whole point of
personal incomes are up, so are
what is meant by a^ profit.
But;
this
are
part
of
this
study
is
that
in
fighting tor. keep the hiring
there toG we perhaps should take order to "Merchandise for a Prof-? consumption expenditures and net
hall control over the supply.,
Vari-f
savings, have; declined
a; second
look at its. significance. it" or indeed to merchandise at personal
oUs other unions,, tod: are
through
from, the peak of 1944 and 1945.
trick contracts seeking to retain Leaving: aside the technical, ac¬ all,
you
must have
sufficient
Although some of these savings
this* control
and, im many in-* counting phases of how you arrive working capital and- that to• secure' have
gone into consumption,
it
stances, getting by with it through at a profit, the- problem .of re¬ it. if a business must borrow from
would seem that there is a rela¬
the connivance of the employer: taining the surplus of income over the banks, the problem will1 be
tion between the decline in sav¬
But these fellows who have coM exi^nditiiresi' Has a* greater- ele¬ more severe in the future than it
ings-and the large increase in pri¬
leeted
the millions* and1 set up ment of uncertainty today than it has been in the past.
To put it.
vate residential construction, the
did since the* elimination. of the another
committee*' are those least, if any;
way-, in* securing loans oin
activity, of which-was again at a
affected.
Their expense accounts corporate excess profits tax. This an equitable basis to the borrower,
conclusion
is
reached^
because
the smart money* will go to the peak in 1948.
ought to be well, audited."
it' would- seem well' within the man with a
plan-^-a well thought
Competition with Retail Sales
realm of possibility that corporate out financial
pllan that outlines
Now it would seem that this is
taxes- may increase: - The Presi¬
step by step where the business
a. formidable competitor to» retail
dent
has
;
already recommended will be six! montfi^i &?•year,, and
sales and one which is not likely
such action and should it' be en¬
two-years from now. The worst
to decline in the next year to. year
acted1 into law, the question
of way to borrow is to go to a bank
and a half. So that we come back
recurrence"
of a
large dif¬ without a plan as to just how and
The most positive reaction to the
to the question of method of sell¬
date towards the new stock reA ferential1 as between net before when- the money is to be repaid!
ing. If retailers are competing for
and after taxes again recurs. With
and this, wholly aside and apart
issue plan of fee Boston' &
the earnings dollar, which indeed
the interest rate- which is
Railroad:
has ' been
the
recent its^recurrence; ^hnerican* business from
they are, one cannot escape the
formation; of a profectiYev
corh^ ydll^gain beffaced with, the^ oltli definitely oy the increase.
consideration of credit selling—
But? perhaps* we* have started' at
mittee ; to> investigate
the ;j)lam wrong motivation of making ex¬
Derhaps less so than in a good long
Mr.. William T. : Skinner, Jr., of penditures oir the basis of Uncle the- wrong end of* the cycle :n de¬
while—and
that again calls fcr
Walter J. Gonholly & GO., Inc., of Sam bearing a large portion of termining how to "Merchandise;
^Wprkdng capital.
: J?
Boston,. who is a clbser follqwer of the cost. This reasoning takes the for a* Profit." Before^ we get. on?
to the other phases; however, the i r All of this must be faced* despite
the stock, is organizing the com-: placet:bfr'the^
sounder^
British
; mitteeAccountants' Profit and' •thO' fact that: consumer credit is
order
that,. 'concerted ^i<deTr§tioiv- ofcarf^Objective e^
Of i lie realneetl of the expen¬ Loss
actioni may be taken fer
Statement
is
interesting.
(Continued on page 34:)
^against

Invariably I

ill the
"Oh;, we don't' give a damn about
minority and that the majority arc
the Taft-Hartley Act."
•.'/ !
able, conscientious men.
The fact was* of course, that it
What they are* doing; now,, fee
best of them,. i» a form* of petty hadn't affected; feeman. the slights
But
they've got all; that
graft,, such, as a man on the road' est..
may chisel on his expense account;
money, they're ,on a
committee
eat better than is his custom*, get and: they've got to spend it.
>'j
dinner

a

i

an

are men

whom

the racketeers;

himself

Very
i

They
to

®

an

asked'whether

are\

course,

or

n ven

t'ory
problem."

to

the"1

sound

1 em"

"i

that in • the* past sev¬
Americans all, eral
months I have casually run
and"' the
soul into the chairmen cf at least three
of
honesty. of these*- committees
and; without
Bargeron

of

if they

better

element';

way

claim

,

the

deed,

by

knock'
off Joi Bill irr his fight for re¬
election in Minnesota; they wilt
course,

upon

as

point

all they are

doing!
accomplishing.
Of
are

looked

we*

have for years

*There has beer* much- talk, these .days about
"Merchandising for a Profit" and' mer¬
chandising; one's time and similar misuse; it: is-believed,,of the words "merchandising"' and
"inventory" problems. Everything it seems today turns out to be a "merchandising prob-

.v,- 5*
And' that is all they

might* be
a* $3,000,000;p00*babyto them because they,
are all'in there pitching,, probably

whom

Carlisle

an

irving

hv

stein

liandau

Iff William Street

st^w
Telephone1

September.- !;•> 1348;.

•

li :

New York 5

BOwiing

.Qreen 9-2397

Fact

TAYLOR*

Says farm income has also increased, but tax harden
people are beginning to show resentment to it.

^

f ornia fac-

in

than

That
that

means

half

again

many
are

as

people
working

the

fore

fact, it isn't the picture
Hollywood either. Both the min¬
ing industries and the film indus¬
try not only employ fewer people
than they did this time last year

By ROGER

matter of

than

today

they

in

did

people today are farmers, fishermen and in¬
ventors -What about teachers; preachers, writers, etc., you may ask.
Well if they make people more useful farmers, more useful inventors,
arid more useful fishermen, they also are patriotic citizens. If, howe v e r,
they^
merely soil erosion, we should remember
The most useful

d i

Wages Continue to Rise

s s a

this

t i sfied

vitamins

Wages of California workers
continue to rise, in about the same

conditions and

pattern followed across the con¬
tinent, but at a higher range. The

greater spend¬

California

our

across

than

hour

an over-all in¬
there are more

on

the market to

making

felt.

itself

For

example, driving south from the*
Oregon line to San Francisco, I
saw a 17-year-old house that had
offered for sale

been

That seemed

a

at $21,000.
terrific price to me.

here,
built at such high cost that they
other houses around

of

Uni¬

Chicago

versity,

Babson

Roger

"A

have

never

says:

m e r

had to be

i

cans

intelligent.

grown
rich
and)
strong not because of its system

America

of

has

education/ but

Only
tural

country

a

resources

in spite of it.
with great na¬

could survive

our

educational

system so lacking in
logic and ultimate aim."
Why Protect the Farmers?
The present

increase" in popula¬

tion demands
in food

constant increase

a

production,

the world

or

have

will starve.

of

ductivity of the earth is failing
rapidly. In fact, my friend H. S.
Richland
of
Maitland, Florida,
claims, "so-called scientific agri¬
culture is not solving the prob¬
lem; in fact, its reiriedies aggra¬

priced themselves right out
the market.
' ;
J. ¬
Price-Resistance

Apparent

Other evidences of price-resist¬

beginning to show up.
into the butcher shops
here and see, in operation, the
so-called meat-boycott which has
been so widely publicized. Priceresistance is apparent as well in
household furnishings and cloth¬

ance
You

are

can go

The per capita pro¬

vate the illness.
a

in

.There has »been

greater loss of productive soil
the last few decades through

cultivation

than

the

accumulated

loss of all

high costs—and needing to recov¬

previous time. Chemical
farming is not the answer; it
does not offset large crop diseases
and insect pests.
Furthermore, DDT and othe^
sprays are killing off honeybees,
lady beetles, mantis, as well as
birds, toads, spiders, etc., which
have heretofore protected us from
insects.
It is dangerous enough to
depend upon the soil for food but,
as it is now being used for rais¬

these costs in its prices, in order

ing industrial products, the situa¬

ing. Sales of both these important
items throughout the state of Cali¬
fornia
same

are

25%

lower-than in the

period last

remaining

very

with costs

year

high.

J» That's the problem that arises
when

Any

production costs are high.
article, any product, any

business

er

to

stay

or

in

any

industry facing

business

at

all—can

price itself right out of the. mar¬
ket.

That's bad for

everybody.

When higher wages have
sult

this

re¬

they act like a boomerang and

hurt the very

people they

are sup¬

lor/Aug. 20, 1948.

fast

are

when,

far

serious.

more

approaching

a

time

mailman
must collect an old paper and
magazine in order to leave a new
one, and when the sales tax will
be

a

newsboy

assessed

rather

than

on

on

and

what

* we

what

we

waste

buy.

must give every en¬
couragement to the farmer, for¬

by Mr. Tay¬
v

We

becomes

Hence,

posed to help the most,
*A radio broadcast

tion

"




we

ester and gardener.

When

we

are

moaning

about

no

curities
a

in

trade

business

in

to

over-the-counter

The

for

operated

locate,

it

least

for

many

is

in¬

knowl¬

expert

origi¬

sometimes

and

if

doubtful

is

any more

there

are

lines of business where

much hard work is done for

It is

tire

so

profit.
great injustice to the en¬

a

or

if

business

over-the-counter

the so-called "ethical" 5% spread

It should be entire¬

is continued.

eliminated if the cost of liv¬
ing and the cost of business oper¬
ations are to be met which, of

ly

business

cannot be under present

course,

conditions.

many

many,

se¬

It

tistical facts and last but far from

and less in others.

has

sold.

nate, markets for certain securi¬
ties.
Expert knowledge of sta¬

cases

some

many

edge of salesmanship, the ability

This, of course, would
more

and

requires

stances,

so

slightly

be

can

so

which, in

little commission

be

are

thousands of different kinds of

also

ly difficult under the 5% spread.
In fact, if this 5% spread were
broken down, it is doubtful, in
this writer's opinion, if it would
show a net of 2% and may be
much less.

rule

set

there

for

Dealer-Broker Investment
Recommendations and Literature
y,.'.' '
:j
.■ ■:yy"
'r\
It is understood that the firms

",v.;^

.

.

J

/?

V'V.'-

j}:

mentioned ivill he pleased
literature:

send interested parties the following

to

the* oceans have been get¬
This means that while

poorer,

ting richer.

grains, vegetables, cattle, poultry,
eggs,
etc.,
raised on the soil
without special prepared food-, are
constantly becoming less ^nutri¬
tious, the fish and other ocean
are
constantly getting
richer in minerals and vitamins.

products

The washing of the

soil can be

Cigarette
Company
Stocks — search
Analysis—H. Hentz & Co., 60 Bea¬ Corp.
ver Street, New York 4, N. Y.

item

on

Struthers

Wellsr

Rayon—Analysis of the indus¬
Philadelphia Bonds— try as an investment for the fu¬
Valuation and Appraisal—Stroud ture—Estabrook & Co., 15 State
&
Co.,
Inc.,
123 South Broad Street, Boston 1, Mass.
Contained in the analysis are
Street, Philadelphia 9, Pa.
Also available are a valuation brief analyses of American Vis¬
cose
Corp.; Celanese Corporation
and appraisal of Railroad Equip¬
ment Certificates and price-earn¬ of America, and Industrial Rayo»
of

City

prevented by contour plowing;
and by returning to the soil all of
the
crop
excepting the portion
which goes down the sewers of
ings' ratios ancl. yields > bh; 123 Corp^yyy
^cities.; When you consider, how^ Public Utility common stocks.
;
ever
that over 12,000,000 people
Railroad Developments — Leaf¬
&
live in Greater New York, and
Hickey,
49
Wall
Comment—Leaflet of comments let—Vilas

live

25,000,000
cities

and

areas,

ter

Eventually the price was cut. But
the house still isn't sold—like a
lot

of

Chancellor

show

be sold. Price-resistance is never-

theless

M.

Hutchins,

whole, lagging—although the

crease, because
finished houses

good.

Robert

land.

sales figures

harm

more

compared with a

being encountered in many mar¬
kets.
The sale of houses is, on
the

doin g

are

price resistance is clearly

But

then they

ers,

reached

national average of $1.30 per

and wast¬

ers

hourly wage for factory

in May,

$1.52

make them

which

in

ness

made

their existence which is extreme¬

with its-minerals
has been washed
down the little streams, and large
rivers
into
the
ocean.
Hence,
while the soils have been getting

that

and

present

with

alone

quite impossible to

was

without any set rule of com¬
mission or mark-ups.
It is a busi¬

the retail end

business

securities

that it

years

soil

people

make

3940.

in

W. BABSON

commenting on increasing need of larger food supplies
and decline of per capita productivity of earth because of erosion j
and decrease in fertility, sees ocean and its products as hope and
salvation of mankind. Wants fishing industry along with farmers
and inventors subsidized.
,
Mr. Babson,

ill

but, as compared to an average
52 % increase in California, these
two
industries
employ
fewer

and Inventors
"yi:

Farmers, Fishermen

the picture out in the Western
mining country I've visited. As a

average

their

not members of any Exchange,

of

shipyard worker, with whom
talking yesterday,
said,
"Last year I thought I'd be idle
this time,
this year.
But I'm
still working." However, this isn't

workers

that

consideration has been

no

ever,

have to depend on

war.

was

people

ago, decided
commission <i>

result

the

commissions were increased. How¬

C.,

Henry J. Taylor

A

I

old

the

on

with

basis

are

worked be¬

as

Exchange, some time

j

the cost of Federal

year,

Government in Washington, D.

first "suggested," but really adopted,

to the men and women taxpayers
given,' in any way, to help overputs
the-counter firms meet this situa¬
in Los Angeles County alone, was
on each state across our country
In .this writer's
opinion,
$1,429,000,000.. Let me repeat that; tion.
seems practically unbelievable as
because it's so important.
The and in the opinion of many others
you count up the facts, state by
people in this one county—living he has talked with, the 5% spread
state.
To get the picture clearly,
here, working here, trying to save should be eliminated and at once.
forget our whole country—forget
something for themselves—paid It should be taken into consider¬
the state of California.
It's easier
out
last
year,
to support the ation that those engaged in the
to see the size of something if that
over-the-counter
business,
who
(Continued on page 38)
something isn't too big. So take

and 52% high¬

1940.

Frightening

was

,

last June,

er

Last

of

because

rot

to

marketing costs and taxes.
The burden the Federal tax

higher than it
was

left

be

will

this
2%

Burden

Tax

spread

by the NASD with the consent of the SEC, living costs have risen
200%.
In view of this the members of the New York Stock

some

continue

prices, which are off. About 10%
of California's gigantic fruit crop

'

June was

in citrus fruit

expenses,

Since the 5%

Federal taxes on the
people in just one county—this
county, Los Angeles County. V

the effect of

has in¬

1947—al¬

over

lowing for the drop

Employment in Calies

California farm income

creased about 2%

.and Mine.

tori

of rise in living costs and increased oper¬
5% spread, at first suggested and "really adopted"
by NASD should be entirely eliminated* Cites recent increased
Stock Exchange commissions.

roots of this part of the full

let's take a look into the grass

in

_

Writer suggests, in view

ating

populationoniyby
I ve learned dur¬

Land

Your

By JOHN DALTON

third largest State in the Union exceeded in
Pennsylvania. Conditions here are fairly typical of much

fact-finding trip; So

picture

rise, but pricefrightening, and

is

California is now the
New York and

ing this

Injustice oi the
Five Percent i Spread

and wages in California continue to

factory employment

Radio commentator reports

resistance is apparent.

The

Finding in California
By HENRY J.

Thursday, September 2, 1943

CHRONICLE

COMMERCIAL & FINANCIAL

THE

(904)

S

in

their

other1 \ large
metropolitan

this adds up to over a quar¬

of

our

waste

their

population.
goes

Most

down

of

sewers

ultimately into the ocean. Hence;
my appeal that the fishing indus-r
try deserves as much protectiori
and government subsidy as the
farming industry. In fact,• the
ocean
and its products are the

salvation of . mankind
with religion and educa¬
'
:
,

Why Protect Inventors?

necessities
of food, clothing and shelter, as
enjoyed by the humblest original
settlers,
everything
we
have
worthwhile, from a needle to a
harvesting machine,- we owe to
inventors.
Labor -leaders claim
that
today's better standard of
living has come from increased
union
wages, but
this is a lie.
Outside ofthe ;bare

increased standard, of living

enjoyed by wage workers today is
due to new inventions, new proc¬
and new products. ' It :is
true that labor unions may have
esses,

forced
and

the

situation—Hannaford Street, New York 5, N. Y.

California Street,

519

San Francisco 4,

employers to
encourage
inventors; but with
same
inventions as we have

labor unions
appeal for government
subsidy for inventors, including
necessary
funds
for' financing
worthwhile inventions, and that
rich
corporations be prevented
from buying up and smothering
inventions to protect their "own
obsolete plants and machinery.
ar

Hence,

thing < as

I

.

Industry—History of

Soft Drink

Calif.

growthr
possibilities—Henry P. Rosenfeld
Co.,
37
Wall
Street.
New
York
5,
Interesting Issues—Eastman, Dil¬
lon & Co), 15 Broad Street, New N..Y. <
Also available is a -descriptive
York 5, N. Y.
Also available is a leaflet of circular on the Red Rock Bottling
the beverage business and

Convertible

Preferreds—List of

and an analysis of Company of Cleveland.
Company.

Railroad news,

R. J. Reynolds Tobacco

Textiles

Weeks

&

Circular

—

•

♦

year without interrup¬
31 or more years—Peter

Baker,

—

1 Wall Street,

Harden,

^Dividend. GraybeardsMList of
New York 5, N, Y.
issues which have paid dividends

•

in .every
tion

for

McDermott

P.

Co.,

&

44

Wall

Fire

Insurance

sis of stocks as

Stocks^-Analy-

investment insur¬

ances-Carter H. Harrison

The"Rookery;

American
Strauss

Furniture-—Report-f—
Inc., 32 'Broadway,

Bros.,

New York 6, N.,Y*
Also' available

Street) "New York 5, N. Y.

& Co*

Chicago) 111.

Niles

Shepard

Corp.;

Nathan

'
reports pit
&
Hoist
Straus Duparquet;
are

Crane

Gisholt Machine; Whiting Corpo¬

Upson
Company;
Machine, and Mbhawlc

The

ration;

Clearing

Rubber Company.

»

Leading Banks and Trust Com¬
panies of Northern New Jersey—
Semi-annual comparative tabula¬
tion—Parker & Weissenborn, Inc.,
Commerce

24

Street,r Newark i2,

N. J.

■

'

finance

today, wageworkers would be just
as well off if there had been no
such

Jalbot,

&

and

hope

along
tion.

The

current

on

American

Letter—Monthly

mar¬

the current
situation and listing interest is¬
sues for speculation and income—
Goodbody & Co., 115 Broadway,
ket

letter

New

analyzing

York 6.

N. Y.

•

available

are

Indianapolis & Louisville;
St. Louis-San Francisco; Minneanolis,
St. i Paul &
Saulte s Ste.
Marie; Oils, and a. market re¬

cago,

Electric Co.—
.

the

same

issue

discus¬

are'

sions of Kennecott Copper

Corp.;

American Cyanamid, and a list

25 Quality Stocks.

Anaconda

-

leaflets on
Federal Water & Gas Corp.; Chi¬
Also

&

Broadway, New York 6, N. Y,-:
In

Market

Gas

in
current
issue : of
"Fortnightly Market and Business
Survey"—E. F. Hutton & Co., €1

Analysis

of

_

Copper

Memoran¬

—

dum—Bache & Co., 36
New York 5, N. Y. -.

Wall Street,
.

y

'

Also available is information on
Pure

Oil;

Harbison.

V

Ruber oid

Company;

)W alker Refractories;

(Continued on page 39)

^

Volume

Number 4730

168'

THE

COMMERCIAL

FINANCIAL

&

CHRONICLE
1} '

fine Billion Yearly of^l|llpl||l| T
Federal Money for South!

.

Candidate for President, Progressive Party
•'

Third Party

South,
fam-

'

i 1

/

V.

>

I

/'

?'

Presidential Candidate, in first campaign speech in

•

.

Federal Government grant $1 billion annually for
to aid South's industry and agriculture.
Says he will

end "outside interference in

Southern affairs" and

both

accuses

Republicans and Democrats of being controlled by vested interests,
bitterly opposed to sound : Southern developments.
Attacks

Truman-Dewey policy of militarism, with key Government
|
turned over to "men of Wall Street."

posts

I want to talk

on

this tour of the future of the South* And North

fitting place to begin. First in the South in industry and
second only to vast Texas in agriculture, this state has shown that the
people of the South can produce every bit as well as people in other
parts
of' the
V v
:
' '• <&a

-

.

country.
of

human skills. It will
be used to supply the good things
of life to the people of the South,

industrial
farm

and

j The other half

prod uction
per

Caro¬

lina

well

is

above the
tional

But,

in

State,

the
people
of
Caro¬

only

a

Henry A. Wallace

a

sound and

they are helped
policies designed to
problem.

must

i

t

<

i

\

over

a

the

"

*

1

A

\

j,

'

»

literally bil¬

return to the

people of the South

part of the stolen fruits of their

a

toil

and sweat.

be

and the Progressive Party
which I represent, are determined

I,

A Year
\":

the advance of

our

whole country

...1

.7

■ .v

.

....

.

And this should be in addi¬
to

Federal

aid

for

affairs

Southern

in

as

Half of this billion will go for
industry.
It will be used not to
repeat the pattern of low wages
for Southern workers and high
profits for Northern owners—we
propose no
Truman Doctrine to
■

Southern reaction.

Outside

Interests

in

•

-—to

homes and machines

make

the

for

which

£oods

of the

fact

of

in

improve standard of living.

vast ^variety

it

has

the

address by

of
re-

Mr. Wallace at
^Durham, N. C., on Augi 29, '1948.




►

-

.

tt»

j

?';«4

V'

_

of

lems

the

the

to

due

parts

the

of

1803, and

confronting

a

prob¬

It's

just

we've

economic
J.

Tobin

in

become

collective

of
Maurice

of

that

we've

had

New

skilled

England

in

the

bargaining

so

many

the

American

The

Statistics.

Artists

of Radio

Bureau

came

said

and

they

members and
financial
of

on

of

and

their

dustry

in other
At

entertainment.

of

in¬

radio

from work

and

fields

the

from

income

the

tne

even

or

death

However,

when

istration

radio

the

asked

for

Admin¬

Veterans

the

became

of.

specialized

in

use

Occupational

vocational

the

guidance of veterans.
A survey
was planned in consultation with
AFRA

with

others

and

close

knowledge of the industry.
the

of

this

of

members

directly about
because they helped

Many

audience

this

know

survey

the

fill¬

by

us

ing out the questionnaire. We got
cooperation from
the
members of the AFRA in Boston.

that of

These

are

responses

and

tabulated

will

report

a

being

now

be

prepared' presenting for the first
time a comprehensive picture of
economic

the

artists.

--n

New

England's record for good
labor-management
relations
is
outstanding.
Labor

and

management in this
maturity,
mutual respect and a clear under¬

standing
the

to

of their responsibilities
public in their dealings
other.

each

with

had

concern

in war and peace,
by
common
effort
give
this
country

Together,
they
have

of Labor.-

Here in New .England

;

how

important

-

labor

and

'

:

»

legislation,

•'*

•

whether

either

f

would

a

long

memory

in

over

the depths of the world's
depression, brought on by

worst

13 years of

the open-shop, wageunion busting, and eco¬

nomic do-nothing-ism.

Those

unhappy,

despairing

years between -1929 and

formed

never

1933 must

be forgotten lest we fall in¬

to making

the same mistakes that
brought misfortune upon us.

and Philadelphia.
welfare

ac¬

There is a great contrast be¬
tween conditions in: 1933 and those

tivities, their aims included higher
minimum rates of pay.
shorter hours, enforcement of ap¬

wages,

today, when

we

and

ex¬

benefits of

program of progres¬

clusive union hiring, later to

be¬

sive,

regulations

prenticeship
come

known

the closed shop.

as

Thus the

aims and purposes

of
unionism, and the
for our present day system
of free collective bargaining, were
established in New England.

legislation.

million.

In

1933, with a labor force of
51,840,000,' there were only 38,750,000 persons employed.
Un¬
employment had reached the alltime1 high of 12,830,000.
Today,

by the method of direct negotia¬
tion, been able to establish mutu¬
ally advantageous and amicable
relationships.

with

a

labor

force

of

64 million,

employment exceeds 61V2 million,
and

is

unemployment

time low of 2,184,000.

in

general and
particular are

in

15 V2

exceeds

Employers and employees have

Massachusetts

humanitarian

reaping the

1933, union membership had
dropped to 2,857,000.
Today it

basis

England

are

In

American trade

New

a

(Continued

on

at an allMost of the

page.34)

The Long-Bell
Lumber

ern

Company

Minneapolis Gas Company

COMMON STOCK
& V

all—outside interference in South¬

l,?i

-A

Increased

affairs.

•.

•'

.4*$'

•

Earnings

indicate

serves

and

liberal

more

Common Stock

•-

Timber

Re¬

dividend

••

..

You
the

better

know

crops

farmers

are

I

than

that

bargaining by
owned outside

a

giant monopoly

the state.

I

don't

nower

Nor is it
props

of

a

the

in Wall Street.

party

political

the very same out¬
controlled tektile, tobacco;

side

months

per

share

detailed

upon request.

*

page 32)

-

—

SOLD

-

QUOTED

with $3.00

Information; available

\

;

*

■

j |;

Approximate Price 19%
v;:_«

t

:

"

-*v*v '

'}

Writeup

y>

.

I

231 So. LaSalle St.
-i"'-* ••a-

(•

Request

AjCUUIXN»H»COMEMNY
•r

ilV-vi-ty.i.-' ' •;.•••'

CHICAGO 4, ILL.

on

.

■

COMSTOCK & CO.

are

(Continued

BOUGHT

1948, net

30,

compares

'*•

-

h

ended June

$3.31

1

Full

-

secret that the main

old

Six

| for the 194^ period^ y

to tell you

central

i

payments.

of
Carolina tobacco
bought up in unequal

;

''

program

One doesn't need

carpenters

the

*'''

England

to remember things as they were
in 1933.
President Roosevelt took

and
typographers
craft unions in Boston
to

''«'

'«-

New

popular support, to advance
of labor; and social
reform^ patterned aftej; -many de*
velopments along the same lines
in New England State legislation.

b£

to

r

..

shoemakers,

addition

and

•

t

doubt

his

As the result of these economic

In

know

we

trade

collective bargaining are to
democratic institutions of pri¬

cutting,

New York,

was

Department

a

the

maintaining his skills and

as

children.

and

the,first to establish

I

exhibited

have

area

State

be in existence today if President
Roosevelt hadn't the courage, and

produce goods
quantity. - ;Tho

to

forces, such crafts

radio

of

status

ofvMassachusetts

functioi

wages.

excellent

women

Our

Pattern

forces

in

first

applied to

j

of com¬
petition slowly separated their in¬
terests.
Employers,' in order tf

survive, had
cheaply and
journeyman's

the

was

enacted

law,

Roosevelt Followed

_

the

Taft-Hartley

minimum wage
in 1912,

a

pass

This

tive economy,

,

However,

to

law.

our

efforts of the merchant

employers.

100 years before

the

Massachusetts

selling

and

buying

the

strike for

a

♦

the American

"merchant

were

vate property and a free competi¬

market began to expand after

Revolution,

of

" free

capitalists."
The
capitalists
Outlook Service of the Bureau for to
buy at the lowest possible
information on the*# occupations prices were at first, ^resisted to¬
and employment opportunities in gether by journeymen and theii
time

same

was

passage

social

Early Market Expansion

part-time
employment of radio artists, and
unemployment

in

assistance

injury, serious illness

the amount

needed information

their families with

that

the

State

years

unions

■

ruled

member that

■

because

more

also

law.

art

that

closed shop was legal—but, re¬

a

different

held

conspiracy.
He

wage-earners

employers

a

legal organizations and not

per se

country.

the issues and

are

of

Massachusetts Supreme Court re¬
versed
the
ruling made in the
cordwainer
conspiracy cases of

than elsewhere.

prospe r i i y,

stability

is

possessed

keen and vital social consciousness.

different than people

their

and

of
strength,

and

relations

are

other

Neither

standpoint
the

we

(A Missouri Corporation Chartered in 1884)

this measure as part
program to end—once and for

a

,,vi.

In 1842, Chief Justice Shaw of the*

I do not believe that New

industrial

also

'

rom

union-minded and

England's fine record for peaceful

earn¬

-

but

ers,

f

world.

the

wage

Affairs

machines
T *An

'

:

It is
a
big
job.
And an
important one,
not only from
tne standpoint

Southern

the principal tex¬
be used
tile, power, and financial interests
owned
and
controlled
in
the
of your state are controlled by
South
and
paying high wages.
corporate carpetbaggers with the
And it will be used to help the
build

t

(

the battlefield and a
position of leadership in the effort
to
make
democracy and lasting
peace
a
reality throughout the

States.

I propose

It will have
to build factories planned,

South

s,('

bi-

the

partisans

schools,

hospitals, homes, health and social
security.

prop

-

,

4#

interfere in the affairs
of Europe and Asia.
a
year for four years to aid
Southern industry
and agricul¬
tion

private industry and

on

interference

bureaucratic

outside

1 propose that the Federal Gov¬
ernment advance a billion dollars

ture.

'A

r

supremacy on

will
be
seriously hampered so helped
to
bring about those national long as the South lags behind in
standards and
economic
*An address by Secretary Tobin
policies which will permit you to living
status.
at Annual Convention of Ameri¬
accomplish your own "dynamic
I do not propose that the Fed¬ can Federation of Radio
plans for the South.
Artists,
eral Government advance a bil¬
Boston, Mass., Aug. 27.
Federal Advance of $1 Billion
lion dollars a year to establish
,* >»t..

puts responsibility

<§>—

1

to

.

'

,,u.

>

wage-

earners

to

few years.

Each year billions,
of
dollars
of

"

1

aware

the welfare of

Federation

production, in health
happiness will repay the in¬

The people of the South proved
planning on a
regional scale, embracing all of during the time of the New Deal
the South's resources and skills. and Franklin Roosevelt that they
It cannot stop with the lumber make good use of funds advanced
from the tree and the pipe from by the Federal Government. And,
the foundry—but must unite these may I add, they proved that when
products in good Southern homes you make a loan on fair terms
and Cities,
It cannot stop at pro- to a Southern farmer for improv¬
Tiding raw materials for industry ing his farm—that loan will be
outside the South.
It must carry repaid.
I am confident that the
on to using Southern materials in
people of the South will get more
production of those goods needed benefit from a, billion dollars ad¬
byfolks in the cities and on the vanced in this manner than the
farms.
It cannot stop with ad¬ people of Europe are getting from
vancing agricultural production, $10 billion of political handouts
hut must insure the supply of under the wasteful foreign pro¬
the vital foodstuffs needed by all grams of the bipartisans.
the people.
Nor do I make my proposal un¬
i The
people want a larger, bet¬ selfishly.
I know that the farms
ter balanced industry. The people and factories of Iowa and Mich¬
want a prosperous agriculture. The igan and New York will sell more
South wants to own its industries to a high income South than to
and farms and its people are de¬ an impoverished South.
And I
termined to enjoy the full fruits know,
as
thinking
Americans
of their labors.
have known for a long time, that

•t.

*

■

of the honor that President Truman conferred upon me in ap¬
pointing me to be a member of his Cabinet. In accepting the post of Secretary of Labor, I
am
dedicating myself to devote all of my energies to fostering, promoting and developing

and

lions

solve that basic

There

f

increased

Here

the robbery

of

future—if

national

Secretary of Labor

,

of
profits are
Southern labor and agriculture. drained from Southern labor in
Last year the average income in field and factory
by large cor¬
Worth Carolina was less than $900 porations owned by wealthy and
—in the whole country the aver¬ powerful men who reside else¬
age was more than $1,300.
where.In
that
We Progressives propose only
simple fact lies the
the
Federal
problem of the South. The people that
Government,
of the South know how to plan through* taxation of these riches,

t>y

J

Labor

vestment

titne

the measure

their

1

—

of the fruits of their labor.

is

"

agriculture.
It
would
the whole Nation.
practice.
bring good living to himself and
Journeymen and their employOne example
of the kind of
family and bring needed food¬
services rendered by the Depart¬ ers, who were the skilled artisans, i
stuffs to city dinner tables.
m
Colonial days joined together
1
It is no; handout I propose. ment is the survey of the economic
in benevolent societies whose pri-1
There is a simple method to fi¬ status of radio artists which is
purpose
was
to provide
nance
it
and
the returns in now being made by the Bureau of mary

Southern

receive

By MAURICE J. TOBIN*
l"'

his

every

lina

billion

solvent

as

North

farmer establish

ern

na¬

aver¬

age.

the

of

would go to agriculture
This part would be used to help
the honest and industrious South¬
per year

person,

North

/:

H hm deeply

sources and

In the value

■

•

Y'\

United

■

Carolina is

/

.

V

.

labor for warding off another depression.
Declares workers are not getting their fair share of profits;
and since abandonment of price controls, wages have lagged behind
prices. ; Urges unions to cooper¬
ate with management to increase
productivity, to

i

-

,

Y/vvf.-V"

"VS

proposes

years

/

(Labor official asserts do-nothing policy of Eightieth Congress

By IIENRY A. WALLACE*

9

Labor-Management Must Avoid Depression

i

:f5!'.!1:*-'W'V-

.(905)

>)

? 5

V :

■".-v.,

vyt

^

Dearborn 1501

.

•.

Chicago

y.y

■*tvI .;;

New York

•

•

•,

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j

.

Incorporated

't

-V'' ^

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'

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1

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Boston

f T lTtM <'

4

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(<i

Milwaukee

Teletype CG 955
I

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.

"

Minneapolis

Omaha

^

Inc.,

Available)

SUCKLEY SECURITIES
CORPORATION
Philadelphia 2

44 Wall Street
New York 5

iPEanypacker 5-5976

WHiteball 3-7253

St.

Private

those entitled to

Philadelphia

/

prompt ' objection

Bank & Insurance

Pfd. & Common
;
-

H.N.NASH&CO.

1

Philadelphia 2

Chestnut Street,

1421

New York Phone
WHitehall 4-2400

Phila. Phone
Locust 7-1477

T; :.<£• Teletype PH 257

-

losing a

is

hi Fiance.
Atlantic City Electric
Bo tan y Mil Is Com. # PMs.
American

Dayton Malleable Iron
Gisholt Machine

Kearney # Trecker

/Appliance

Strombers'-Carlson

$1.37

labor

ref. 5s, 1960,

statement

years,
stook-

y

three

10-cent

PHILADELPHIA OFFICE

age

Teletype

Telephone
Rlttenhouse 6-3717

PH 73

v

to pay a common

1500 Walnut St. 6-195Q

Pittsburgh Hotels 5-1967
Vy. El. Rwy.

Pennsylvania Railroad

a

its

-Common

Gas Common

Stock

:

changes
each

Packard Bldg., Philadelphia

2
!

are

spring

transit

N. Y. Phone
CQrUundt 7-6814

Teletype
PH? 375

will head

it

its

a

the

Alan Wood's

present capitali¬

reclassifica¬
consists of
preferred, par

The new financ-

he

Available Publications

£ H. Rollins & Sons

—Valuation and Appraisal

Incorporated

New
■

i

York

Valuation

Chicago

^

Francisco

and

'

123 Public
J

CHAPLIN

and

COMPANY

New York Curb Exch,

i;

PITTSBURGH 22,PA.

Grant 3900

<

S "V,,

*{'

'r -r

4

•*

*'

(Assoc.) \

p'j",';'

SI Brojuiway

^

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Joe Barnes, man¬

Request

i'

r

"J-f-

.

> :

.

'yH

'

•

'AUentown

•

/^Pittsburgh

I

Dick tp Acquire^ Pbila.

■■•■.SiOlpiPf

*«>!,»»

tip

*« »»

I

1

••

A.

r.

-1 .fX J.'V

bonds for banks in
City and State.
»

Addison Wood Officer
Of PHIL Nai'l Bank
;/ PHILADELPHIA^ PA. —Philadelphia National Bank

,

The,.

nounces

anr

the

t

,

Municipal Bond Chib of.
Chicago to Hold Outing
—

The Munici¬

pal Bond Club of' Chicago! W'fll
holdritSL annual field day on Sep¬
tember 17 at the Knollwood Coun-.

Scranton
^

'

■

f

,/).*>•

William H. Long, Jr.,

i

President

& Co., 120 Broadway,

announces that
Lewis Paul M. Winship has become asso¬
ciated with the agency as an ac¬
C. Dick, President Lewis C. Pick
count
executive. , Mr.
Winship
Co., '1420 Walnut Street, is posted
was formerly with Merrill-Ander*
for election to membership on the
son Co. in tjhe-same capacity,
" ^
Philadelphia Stock Exchange. ■ ■
/.'</». iV ,r
/A';.■/»: }'■

PHILADELPHIA, PA.

.

m

New York

of Dorerpus

Exchange Membership 3-a

' I • • -• - '••• .'•»

•

arbitraging of D. S.r

Witk Doreimis? & Co?

WOrth 4-8400

Lancaster

in the

Government

"

BROADWAY

...

V

Provi-r

TOPEKA, KANS. — The firms
,of -Estes, Snyder & Co.*
Iry /Clufr. V Ttievputihg. will , be
Inc. has been changed to Estes &
preceded on Sept. 16 by c,dck:4
Co., Inc. There is no change in tails and dinner at the Kenilpersonnel of the organization. Oil worth Club\
C .
> ?.
Sept. 1 the firm moved to a new
location at 112 W. Seventh Street.

NEW YORK 5, N. Y. -

PHILADELPHIA 9, PA. ,|
PEnnypacker' 5-7330

"

»

name

-

120

Inc.

1.

on

Incorporated

NEW YORK, N. T.,

WHitehall 3-4000
Teletype—PG 473 ;

;,.

Bell System

*

on

123 SO. BROAD STREET

Pitts. Stock Exch.

N. Y. Stock Exch.

lllh Floor, Peoples Bk. Bldg,

H

|

Bryant College,-of

CHICAGO,' JLt.

STROUD & COMPANY

Members
n

returned.

Now Estes & Company,

Utility Common Stocks*.

Copies

»

•'

•

Direct Wire to New York City

'

^

Pennsylvania
Issues

<

?

Price-Earnings Ratios and Yields

1

Trading Department Active in

1#

,f?.

S

II,

:

Western

Appyaisal

CITY OF PHILADELPHIA BONDS
II

After

ing" him in. advance Fall showing
of his latest styles and fabrics.
There ;was 4*cents postage due oh
the envelope.' " ' - * -J - -*•'
V %

Philadelphia 2

Boston

.

■

CERTIFICATES

RAILROAD EQUIPMENT

PEnnypacker 5-0100

;

appointment of Adr
dison..O,/Wpod as Assistant Vicewith return envelopes enclosed. A
President, Mr/ Wood-* vyiil cover
reply was received from one G. A. the bank's southern business.
Stetina, custom tailor, who put the
reverse English on joe fry "offer¬

Bought—Sold—Quoted

1528 Walnut St.,

years
—

ager of the trading department,
had sent out some mailing matter

only by prospectus

•■■>

Colonel Proffitt, foil- ,
lowing his service in the Treas¬
ury
Department at Washington,,'
has specialized for' the past
10>

resident partner of
Kennedy & Co.'s branch, office in
Du Hois, Penna., George 3ft. Wil¬
liams, is back in the home office
in Philadelphia which he opened
in 1923.
Always on the alert for
a; laugh,
"Doc" got one the day

100, and 483,662 shares common
stock, par $10.

realization.

three years as

& Mander Common

*Offered

Mater,

PHILADELPHIA, PA.

tion early this year,

Company adds that since 1940
has placed In service more

per

"Doc" Williams

products.

70,363 shares 5%

ex-;

Proffitt was recently
awarded the honorary degree of
Doctor
of
Science in Business
Administration- from
his Alma

Comes Home

zation, following a

alt

an

Colonel

Penn.,

company

line of finished

through ;

dence, R. I.

to reduce
conversion costs and expand Us
enable

for its

such reserve.

Richmond Cedar Wks. Com,
Roberts

witji $2.79

1947 -period

planned to organize
new
committee for

change of ideas with civic groups ;
in other sections of our country

Tfris com¬
share for
without any

pf $1,060,000,

pares

the

approximately
-The new unit will

$8,900,000.
'

this

30-inch hot roll mill

Conshohocken,

.

it is

$3.45, after preferred divi¬
dends and after setting up a re¬

plant at a cost of

lines.

Phila. dec. Co. Common

plans

and that tliey

provide adequate service on

City Elec. Com.
Merchants Distilling Com.
Nor. Ind. Pub. Sery. Com.

nounced that the company
at

increases or decreases in riding
volume, that they are not an
economy measure

Atlantic

an¬

to install

haye been carefully prepared to
*

recently

President,

ing,

t

sound

per common

serve

approval

Board's, International
Section of a gold coin dol¬

standard as a prerequisite to
domestic and world trade,

lar

share basis,
earnings for the six months
a

v. .

the

Trade

attained the largest sales
the
six months of 1948. Sales for

the

Section of
of Trade.

the recent

Following
by

period rose 28.6% over a year
to $87,496,711.

net

Wood Steel

Alan

Cork

were

to offer new

public. John T. Whit¬

Co. to, the

adjust to

to

the

Trade

national

New York Board

in its history during

volume

Steel Co.

group

a

Zellers,

company

Co., Philadelphia,

securities, of

regularly
made
and fall by ail

companies

18.

'

The company's statemen t
points out that such schedule

Exchange

re¬

ago

Alan Wood

Monetary

Prentis,

Armstrong

Special

of
Cooperation
on.
Policies by John',A.
Chairman of the Inter¬

Committee

,

W.

Policies.
J. W. Proffitt was

appointed Chairman of a

in a semi-annual statement
stockholders, reported that the

Ave., Pittsburgh.

about 3% less mileage than the
fall schedules of 1947:"

Samuel K. Phillips &Co.

President

Jr.,

On

last year, and the pew schedules
therefore require the operation of

Bankers Securities Pfd.

developments from
date, are referred to the

Pre^eJL A

.

LANCASTER—H.

first

increases.. Pas-r

tary
Edward

Dr.

Armstrong Cork Co.

Copies riiay be obtained from W.
D.
George,
Trustee, 435 Sixth

this year on the- P.T.C.
are about 5% less than"

system

'

rate

after

Gross

history.

reported net income of $3,747,35$
compared witfr a deceit
$8,090,278 in the corresponding 1947
period.
/

Co.,

traffic

Madq ChafrnianL of Special Com¬
mittee of Cooperation on Mone¬

better¬

frhe- first: sevem months, road

For

to

a

project of

and
wet income continued to improve.
in

ments

1942

use,

Appoints Proffiltll /

totai of $233,200,000; by far the

largest single

of step-by-step

company's annual statement,
under
date of Aug.

fry

program^

status of the

leased

N. Y. Board of Trade |

$59^700,000
bringing: its postwar progrsm to,

ment

Railways Co. system
reorganization, including a resume
to

Pennsylvania.

Railroad has upped its improve¬

Pittsburgh

decline for companies serving
of over 1,000,000 population

the? serv-

icing of out-of-town institutions ■
and dealers paying particular at¬
tention to the development of at¬
tractive situations for firms with
retail distribution.;
;•

dividend each

Si nice last March,

being more than 5%. This is the
result of several factors, including
an
increase
in the number of

sengers

Altoona & Logan

Philadelphia

the aver¬

substantial
fall in Saturday riding following
more
widespread observance of
the
5-day week, and losses in

Cambridge Bldg. 3s 1953

Members

—

nection he wijl resume

quarter."

inter¬

individuals

and

Firms

ested in the present

1948. In this new con¬

1,

iSept.

Elmer E. Myers

•

.

.

,

areas

automobiles in

South Jersey

United

the

lower than last year

Phila. 2

Stock Exchange Bldg.,

all
cities
States is

virtually

riding
in
throughout

& Company

Since
dividends

f,'.

Budd states,
"we hope to continue to be able

.

H. M, Byllesby

common-

have been paid. Mr.

Pittsburgh Railways Co.

"Transit

says:

After

of almost three

then,

12.

The

increased

of

spite

dividends last December.

will have the option
of receiving par and accrued in¬
plan to raise fares.
terest in cash or of accepting* part
Charles E. Ebert, President of
of their claim in shares of Penn¬
the transit company, stated that *
sylvania Power & Light Co. pre¬
still-rising expenses are making
ferred.
'
;
/
serious inroads on income rePlan provides for payment at
turn and thai P.T.C. may have
$90 per share of Transit's pub¬
to petition the Public Utilities
licly-held 5% preferred, par $50.
Commission
for another
fare
Balance of the preferred, held
.rise
«
or reduce service and
by National Power & Light, will
maintenance.
be retired by exchange into
Without renouncing the poten¬
545,610 shares new Transit com¬
tial
necessity of filing an in¬
mon.
This will be distributed to
creased fare schedule, last Mon¬
National's stockholders on the
day the company issued a state¬
basis of 1/10 share new Transit
ment covering changes in transit
common for each share National
service to become effective Sept.
Power & Light.

Co.

Warner

in

resumed

Budd

$4,.915,60Q

six
'VhioZ-y was,./-

.1948.

and material costs.

lapse

a

of Transit's

Holders

siderahle amount of money,"
will vigorously oppose any

he

.of

achieved

Light Co. subsidiary.

con-"

'O

share, for the first

per

■"'months-

National Power; &

Co.,

:;J
,

Edward
Bndd,
Presj?
ident of Budd Co., reports a rec-

S, District Court in Philadelphia
to order into effect the
recapi¬
talization plan of Lehigh Valley
Transit

*'

;;J$ndd.Company
i

„

>

Parker

It

show 4hat

r

Nov. 1.

Flan " ;

; th£*'Securities and Exchange
Commission has petitioned the U.

municipal directors of F.T.C.,
insists that "unless the firm can

Philadelphia Transportation Co.

$325,000 to annual gross revenues
were
filed'
to
become effective

Approved

oily ■

from

depart¬

associated
with
George * B. Wallace & Co., 15 Wil¬
liam Street;; New. York City,, on'
became

ment

the

over

program

Brothers' trading

of Sutro

npxt three years. New gas tariffs
which it is estimated will add

transit facilities.

Lehigh Valley Transit

granted last

Increases

construction

have

Philadelphia's

March 21 were the second in 14
months.
Charles
h Pomroer,
Recorder of Deeds, one of five

;

Stocks
3-6S 2039,

a

increases

council.

other service changes;
greatly improved-

third round of
have
brought

soon

fare

w

for

file

numerous

which

might

Intimations that P.T.C.

i

ex-s

existing routes, built
terminals
and
made],

modern
v

routes,

new

40

tended

receive theifl,
books of tickets will be distrib¬
uted to the schools and sold by
the schools to the children. ,

and Los Angeles

16.

tablished

confine the benefits

In order to

to

Wire System between

Philadelphia, New York

of the new / mill
be: taken from working

Elmer E. Myers, recently with
capital. , .,
-Js;:s'
B. W. Pizzini & Co.,. Inc. and prior
-.vV;
to that for many years in charge
Penna. Fdwer & Light Co.
■■■

Kent-Moore Organization,

1420 Walnut

;

for

necessary

PHILADELPHIA--~Yielding to pressure of public opinion and
the coordinated efforts of various civic groups, Philadelphia Trans¬
Registration of 316,863 shares of
portation Co. has announced a reduction in fares to school children
effective Sept. 1.
It is estimated that new fares will save 25 cents Pennsylvania Power & Light Co.
a week for each of approximately^
common stock has been filed with
than
1,500. modem streetcars, i the Pennsylvania Public Utility
61,000 pupils commuting to school
buses and trackless trolleys at a
Commission;
Proceeds, together
via P.T.C. facilities. Cost to the
cost of $22,700,000, During this
with, othfcK cash;; will be used to
company in reduced revenues will
same
period, company has es¬
be about $550,000 per year. v
d6fraj. c a m p a nyfs $X00,000,000

(Reports on Request)

(Prospectus

construction

will

funds

of

Balance

Schedules

P.T.C Adjusts Fares and

Maryland Dry dock

Elmer

Myers Joins
Gee. B. Wallace &Co.

mortgage

first

Pennsylvania Brevities

Co.

Paget Sound Power & Light

eousisA^uf $6,30jM1)jQl
bonds of 1963.

will

lug

1948

Thursday, September 2,

CHRONICLE

& FINANCIAL

COMMERCIAL

THE

(906)

10

New

—

■r

h

ilsinn'J

>

York

City,

.'Cl

3foJumeNumber 473®

THE

COMMERCIAL :&''FINANCIAL

'

CHRONICLE

(907*

.

11

ilflfeCosts in Social Insurance
!

:j

ByJQ BINGHAM*

NSTA Notes

Research Senior, Tax Foundation

ivlWciUr, after analyzing nature ind

'

-

v'^

:"vV';

costs of social

insurance, maintains, under the present system, the
f costs, whether'in initial ta? payment or iu ultimate
discharge of obligations, constitute demands upon
current product.
Holds burdsmfalls on producers at large and is determined not
only by extent of
INVESTMENT TRADERS ASSOCIATION OF PHILADELPHIA
J total output at any given time, but hy ability and willingness of those who do produce to share with
f
The annual meeting'ami "jejlecUoit of^officers '*ahd
^QSe ^at do not,
govefners^f
:
,

'

'

*

,

.

the

Investment

Traders

Association

of

Philadelphia

will

held

be

In the

concept of cost, monfcy is the first

and the most popular association, but it is
security, there are two significant
aspects.-One is the initial cost,: which is the tax levy.- The other is the payment of bene¬
not the .fundamental factor

fits,-

or-/ulti-

mate

-

reckon
the

>w

:

.

represent, are shown
in the. accompanying table. :-.

i t h

;;

it

determine
who

pays

first

for

the

initial

cidence of the
tax. Who pays
William Raffel
v..

WaUacfe H.' Ruhyant*'

K

I Haprry Fahri^ 4r»

><■*

for

*

the

V-t.4--

is w the

ire a 1
cpst burden.

*S/

*.

ulti¬

benefits

mate
'

*r-'v

mm

Kj'

;

liarly fitting that

fern cofet

pause

^

-

' '

heir >.

--and - health,

security pro-:
grahiv July 1,1948. was the effecitve; date for British promises to
pay her men, women, and children
the most comprehensive social sqmrity .benefits, in the world^—arjd
; his :oi£ the vergeiof an almost
ac|naitted bankruptcy, of her empirO'•
However, it is not only the nejv
British experiment which renders
negs

ft&'M 'y.

'

'•

■

igl

mm
-V-'r';*-

S. K.

Phillips, Jr.

N.

H.

iParkes, Jr.

M

W

w

y

John F. Weller

attention to social security costs ,a

'

Friday, September
be followed

4

timely chore,

17; at PSlurnt>o's ; Cafe* The^ busines^^

by. cocktails and dinner.

'•'•••.

.

eral years

••

The,nominating committee, headed by William Z. Suplee, Snplee,
following slate:
*
'
President:

Runvan.

William

Raffel,

Raffel

Graham, Parsons & Co.

&

Co.,

and

Wallace

security

For

H.

-

amount

Harry H. Fahrig, Jr., Reynolds & Co..
Phillips, Jr., Samuel K. Phillips & Co.

Second

Vice-President:

Newton

H.

Parkes,

Jr.,

Bioren

erated

Co., and John F. Weller, Buckley Brothers.
For Secretary:

James B. McFarland, 3rd, H. M. Byllesby & Cb.
Albert Fenstermacher. M. M. Freeman & Co.

For Gratuity Fund trustee:
A

George.J. Muller, Jan

maximum of eight vacancies on the Board

be filled from

iey

quire.

insurance.

of Governors will'

SECURITY TRADERS TO HOLD

excitement

legislation

-7

Any deficit between contributions

attempts* thi$ trend' will stop'and

vate

itself.

vas-adjusted

by. cutting railroad

unemployment

v

;

<v

J?- •;;

funds

;erve

were

a

very

"

1

Executive
f

,v

\-

I

Go.Opening
Office in Wheeling
.

Goeingv investment ^analyst with
JohnvNuveen

lieutenant

&

Co.

-' commander

on

the

Sea : Frontier, "isv top
for the- .University': of ChL"
eago's fouirth Executive Program.
.

Wi,tK
12

a

near,

perfect- record of

A's,and.two B\ Qoemg,

9 1934
University of Chicago honor grad¬
uate,- will receive his ■master's' de-.
'•greey' in {business administration

Thursday* ^(.September

■

one

of the nation's oldest

-Theunder

new

th$ j oinf m^nagemeut • of

Thomas Ai Griffith and Fted ft*

.Seeiy^ will brin^ tO 58 the number

of

p<mybGa-;
tioiy * Kat y Rockefeller >• Memorial

;dfflce|a^;,corresg^^




popular notions

The Social Seeurity Taxes

-First,

suggests

determinable statistical

a

relationship"

between

premium

on

1 Section

902,

Revenue

cover-

benefits.

expanded

and

age

Act of

as

premiums

basis,

The

cannot invest in itself

a bookkeeping sense, by
borrowing from one set of tax col¬
lections and "repaying" out of an¬
other.
Except for certain publid
enterprises; the source of all in¬
come for government is taxes. The
only way it can "invest", social
security taxes is to use them for
general purposes, leave its bonds
as IOU's in the trust
fund, and
whenever repayment:is necessairy,
tax the people not only for the
borrowed amount "invested"-—but

security taxes
will
meet all ultimate costs, and that
rate adjustments of J/2% or so will
meet the cost of increased

received

self-supporting

except in

social

that

funds
a

goverment

payments and benefits payable, it
has
been
erroneously assumed

for the interest,

too.\

There are, nevertheless,

;

-

acfvaptf*

in keeping a close relation¬
ship between payroll taxes *ahcl
benefit
payment.-.
These, taxes
have proved a ready source of
ages

revenue

the

for

There

purpose.

< Continued on page 31)

1943.

Tax Receipts from Social Insurances

Fiscal Years

1947,

1948

//

(Millions)

..

1948:

1947

Program

$1:616

England

and

France,

Mr.-

Seely

ahd^^;;i^Hib^w^re
in charge • oif the Wheeling office

>T of.Parrish

1,215

1,190
Railroad

Retirement

Railroad

Unemployment

557

380

;

yPM

..142

Total

146

$3,534-

$3,171

—

"Daiiy Treasury Statement," June 30r 19^0.

15ouw

-& Go.

c

:f::

T
these securities

Because

been

not

registered

are

with

believed to be exempt from

the

Securities

and

registration they hafie
Exchange Commission; b,ut

exemption, if available, tdoes not indicate that the securitieshaue been either.approved or disapproved by the Commission

Siich

'

s.

that

or

the

Commission

has

considered

the

accuracy

or

completeness of the statements in this communication.

ai

i

the obvious' evidence

NEW ISSUE—Offered as

a

Speculation

975,COO Shares g;

f

oi
■

cost'

is; the 'tax

on

Sterling: Oil of Oklahoma,

employers

and/of employees. The payroll taa(
of 2% of the first $3,000 of taxable

*>-

for old-age and survivors
insurance, and the tax of \\lk%
ph :the* Hrst;$3,6fl0? for railrdad reR

tax, levied only ori
employers, has been. 3% of ths
first $3,000 of wages, but i§ rio\^
cut to one-haif of 1% until thb
trust fund - reaches.; a
specified
minimum..

ous.

for

the

■v».

.g '
-

v

used for

wells,

Share)

.

se&uritie&. tielhS:

olfered

on,

behalf of the Corapany

working, capital, for the Company's pro-rata share of

and

for

testing

and

development of its

Aggfegtito Uttderwriting

Discounts or Commissions

*

U- -'.V Underwriter. :

b et/'

?

.

•

/

$73,125.00

v

undersigned.

;g,:gg g'g-;

GREENFIELD, LAX & CO., INC.

proH

':tReprinted from "The Tax Re¬
view,"1' July/ 1948, published by
the Tax Foundation,. New Yorkv

properties.

,pnd«;writini$ Discount a oi'Commissions $0,075

topics of the Prospectus may, be obtained from the

'

N;

be

drilling

--•

iront these varH

totaled

to

are

per

Price 30c per Share

The net. proceeds Qjf ttie
■

-.,i#

-^1

receipts,

taxes,

r,

un4

employment

I

Common Stock
(Pac Value $9.10

■irement, are both equally shared
by employer and employee, Un-i
employment taxes, except in a few
states, are levied only on the ern^

of taxable goods. The railroad

i»c.

DELAWARE CORPORATION)

"vv/-

wages

^ Rpceht
* Mexico^,; Canada,

'

Chapel/. W

the

.

of5 branch

2 b- when

th^jSchQol

se¬

office, which will be

\ the university ;"cpn}memorates: ^ho United. States,
;

cial security costs. Because the
term * "insurance"; autom atically

re¬

;

pjoyer.
The unemployment tasj
curity and commodity brokerage
rates vary because of .state
merit
firms,, -Sept.; 1/ opened m new
branch office, in Wheeling, West n-ating- plans, but average some^
what under.2% of, the first
$3,QQCj
Virginia: \ ..
1

Northwest

man

WHEEWNG^Wv, ^A^Bache

Co.,

former

and

-fsrfc*'

Bache &

Program

of Costs

Misconception

This eventual meed point? up a
popular misconception about so¬

the

,

■p»;1

CHICAOClvILI^?^rthurFrank

a

insurance, investment of ^he
protects
and
mainta;ns

reserve

which should be reviewed?

J ohm J. O'Kane of John J.; O'Kane
Co.is president of the
Security Traders-Association of New York, Inc. • /.
~

A.F.GoeingTop in

insurance, there is
little-publicized, ; Fed¬
provisioii for such.a subsidy.1

already

well: as' the basie aspects, of cost

busy day and

•>

:

substantially

duced. T'J

Other "Committee (^airmen) are Tom:
Qreenberg of
BLUnte^
berg, Andrew R, Stevens, of Bond & Goodwin and Leslie Barbier o

'-

survivors

eral1

basis.

!or increase again only when re»

some

,

cpmrpitments ! are to be
Ui; the. case ;oi old-age

hon6re;cfc
and

actuarial

an

benefits can be made
by taxing, or borrowing.
Sec¬
ond, it is not really possible for
a nation to insure itself.
In pri¬
up

benefit

on

and cost of

adjusted considerably upward, at
some date in the future variously
estimated by: different actuarial
reverse

itself

sure

nation to in¬

:

Many novel prize contests will fill out

.

makes

power

'

(3) Tax rates and mounting rethe relationship of whiqh

^^nu^erou^doorrprizea-wiU'-'be'aWar^eel^'-.-'-J

•

First, the taxing

unnecessary for a

$1,459

& Co., is Chairman of
Postponement of more inclusive
the Arrangements Committee and
has planned a very comprehensive
proposals was no doubt due to thi4
program, Joseph Eagan of F. C. Masterson & Co. and Joseph Cabbie
.priority of tax reduction, foreign
of Abraham & €q,;are, ip
charge ntthe Soft-Ball teams.
->id, and defense.
However, the
Jerry Kane of Luckhurst & Co. and "Ted" Plumridge of J. Arthur
81st Congress will, probably 4aqe
Warner & Co. are in charge of the Gold Tournament.
Larry Wren
of Allen & Co. and Frank McCall of Green & Co. are Co-Chairmen the^ issue of more comprehensive
social. security.
What, then, are
of Horse Shoe Pitching and' other nid-.contact
sports.'

G. AT. Saxton & Co.

fits.

,

erves,

Arnold J. Wechsler, of Ogden Wechsler

/

masquerading, of
cost facts by attempted actuarial
adjustment of tax rates to- bene-;

;

OUTING

I

■

-

gen¬

limited

Nor is there any need

for the technical

counts, have now accumulated to
$19 .billion. They will continue to
mount.
But,; unless tax rates are

provided for railroad r'etire-

were

exceeded

it

and survivors insurance hy
of Treasury ruling, whic^h
was defeated;
(2>Increased- benefits,.- which

7

.

was

on

nent;

The Security Traders Association of-New York, Inc. will hold it*
Summer Outing and Dinner onj
Friday, Sept. 10, 1948, at the New
York Athletic Club, Travers
Island, New York, John J. O'Kane,
President, announced.
'
*

y

has

in reserve in government trust ac¬

age

panel of 24 nominees.

a

of

by

income

But

way

"j

& Co.

law.

points:
(1) Increased coverage for old-

&

For Treasurer:

o\^n> legislature

Although the 80th
Congress dealt with major propo¬
sals only by avoidance, a certain

For First Vice-President:

and Samuel K.

ou?

public have been primed ft^r
far-reaching amendments to social
ana

Yeatman & Co., has presented the
For

OverUhe past sey-*

:■

agree

the actuarial

Outgo will exceed
income. ; Thjs is when general
funds wilL be. required to contrib¬
iri-sicK-; ute to
the; payment of benefits, if

c^adle-tb'-grave,

i v

Econohifsts'generally

that
principles of genuine
insurance do not apply to social

consideration be taken at this time
when'Britain has just embarkejd

M

truth.

It

tion t)f' the system,- and' will Con¬
tinue to do. so even in the near fu¬
ture/These annual excesses, held

cost is the in¬

b.-i<

-_i,

;

be further from the

a sizable
is,'in fact, far more
than current -benefit payments re¬
take.

outgo regularly since the incep¬

and

last. Who pays

t

Nothing could

/Thre'q Million a. year fs

tax

is necessary to

it',

zi.jL.

:—

they

grams

to

whole,

In the cost of social

|^

.

t.

cos

Therefore,

''

ijnvolved.

'.

'

Member . of

40

National Association

of Securities Dealers,

/no. ;

Exchange Place, New York 5, N. Y.
Telephohal

UAno\er 2S290

,

;

.

,

t

'V

A".

12

COMMERCIAL

THE

(908)
L

;«i«

>

&

'1

CHRONICLE

FINANCIAL

Thursday, September 2, 1948
recent

V

t

//':////: / > /-: '•'/ /

'■■■

:

■■

This Week

m

JOHNSON

:

Trust

"University

to whether the

tion of
of

a

Robinson

Central

policy of adding to bank capital through the reten¬

'/

In this connection, it

of the New York City banks.

some

In addition to the customary

competed.

This latter ratio, takes, ipto

and government securities

assets of banks.

constitute

account the fact that1 cash
proporti?drt df *tHe

In general these securities

short-term and rela¬

are

deducting- suchritems from'

tively

dej^sits

what may be called

the deposits at risk;. . Figures used

June

V

1

30^ 1948^
■■

*

:

-

!

■

Cash

i

of

as

Total •*•?.
'

Deposits

■

i&oo's)-

:

Risk
Ratio

Risk

Govt.

(000's)

-•

'r^OOO's)

%

•.

ti-

Rank

hf.:Manhattan

,

*Includes earnings of

3.0

4.7

•

1.4-

0.2

i

1.4

•

3.8

*

4.5

-

2.9

4.4

v

0.7

S. Trust have

On the iother hand

Corn Ex¬

of deposits, is the highest.
v.;i.

and Using that figure

as a

basis for the ratio, it can be argued that

truer measure of the risk element in commercial

On this basis

a

banking is obtained.

it would appear that all of the institutions have ade¬

quate capital.

Indeed,

have capital funds which exceed

some

deposits after deducting cash and governments.
frisk ratio" with Bank of Manhattan

risk of capital funds with

a

the
low

shoeing; the greatest relative

ratio of 5.3.

a

Others have

;

v

"r

;

■

,•

-

\
•'
■
•
»
y iV
* v.h
0
?:In considering the above tabulation, it is interesting to compare
.

the percentage of

earnings paid out

added to capital funds. .;

ating

FDIC
'J

6.54

4.00

4.25

2.00

36.56

35.00

said

87%

4.564.48

y4

4.26

now; listed it
would be a good
thing, but if it means dilution of

41%

4.82

the present market,

54%

5.14

any
advantage
public."
//-y

6.27

1,275//;
274

/

4.92

49%.

4.85

49

39%

4.05

61

863/4

4.61

■:

555

..

Federal
•

,

.

,

,-j In

appears

as^s- :eoui^'';:be:. made^;f,I; 5:;

repaid

to

Treasury
■■

"This

are:

ures

built

up

billion,

con¬

ample

for

insur¬

the

Harl

Mr.

is

,

right

the

to America's banking

needs."

free

$160 billion of bank dep'osits.

the

last

major

the?;cpuntry i$t

enterprise

world,: it

banking

in

the

Insurance Co.

"Times"

of

ir^ Chicago.

:

Telephone:
Bell

BArclay

Teletype—NY

7-3500

''

1-1248-49

Established

1891

/

.

;

V

MArket 3-3430

(L. A. Glbbs, Manager Trading Dept.)

St.

and

WHITEHALL

3-0782

FRANKLIN

/./'

NY 1-2875

Sc hofield
,

18

LOS

Building

ANGELES

:•

'-M

210 IV. Seventh Street

SUPERIOR 7644

MICHIGAN

SAN FRANCISCO 4

14

t-

2837*/'/

\
:

Puss Building///
YUKON

6-2332

CV-394

;

.

,

.

CLEVELAND,

T.

PHILADELPHIA,

TELEPHONES TO
ProvSdenc-.

:

IA-1086 y;y/>

CONNECTING




SF-573

■.//

NEW YORK,

BOSTON, CHICAGO,
ST. LOUIS,LOS ANGELES,
SAN FRANCISCO

Hartford, Enterprise C011

Enfernrl^

TIMW

-

-

*,

Portland, Enterprise 7008
r

Detroit.

serve

frbm

at¬

to

large

firms

the New York Stock

on

The
proposed Ex¬
would have agencies in

cities

which

Enlerprlse 0000

make

to

what

have

we

healthier by

elimination of dupli¬
cating overhead expenses." 4 - V
John: O. MacFajlane/ Executive
Vice-President ; of / the
Detroit

and

teletype

;

has

on

come

the proposed

directly

Exchange, termed the idea
"strictly conversation" and indi¬

from

that

/. The

-

joint and /
several/obligations of the It Fed-1
era!) Home Loan Banks///'//)//;/;/
notes

the

are

Austria Joins Fund
And; World Bank

•

.//

The / Articles

of Agreement /of
the International Monetary Fund
the

and

International

Reconstruction

Bank

for

Development

and

signed on Aug. 27 by Dr.
Ludwig Kleinwaechter, Minister

of Austria, on behalf of Austria.
Austria's quota in the Interna¬
tional: Monetary Fund is $50,000,000
and
its
subscription to the
capital stock of the bank- is 50®
shares of a total par value of

The
of

application for membership
was approved by the

Austria

effected,

Richard A. Gottron, President of
the

Cleveland

Stock

Exchange,
said committees from the various

expected to meet
Chicago during September for

exchanges
in

further

are

to

would

be transferred

that

board,

Gottron said, with the re¬

Exchange,

has' leaked

Chicago
quoted
"I've

gone

been

"is

news

and

presented

some

merging, but nothing has
been

to the

new

premature," sult there probably would be 250
to
300
good trading issues, in¬
stating that cluding about 100 issues dually

Day as
/around and talked to

settled and

even

reported

the

all parties have

contacted

as

yet.

the

at

breakfast

traded in New York. Membership
in

the

Association,

annual

field

day
Club,

Hyperion

at

the

Hotel

Sa-

Reservations may be made
through Harry L. Westphal, chair¬
man

<

the

of

committee,

Moines

Iowa-Des

new

exchange

proximate* 260,

and

would ap¬

every

ber would be able to make a

commission,

less

only

his

mem¬

100%

floor

the

at

National

Bank

& Trust Co. Golf and other forms

of amusement have been
for the

planned

day.

Registration fee is $15 fojr mem¬
bers and- $20 for guests.

y

,

/ ■,,; ;

Courts & Co. Move to

NY^

Larger Offices in
Co.

Courts

their* New

of

announce

ables

them

clearing

>

,

/

to

space en¬

expand /'present

operations

and

render

more

comprehensive facilities to

their

Eastern /connections.'' This

move

will

age and

able

also

augment broker¬

investment services avail¬

through

fices located

their

nineteen

in the

operations

of

South.

the

New

of¬

-;V re¬
York

office will be under the direction
of

Paul

D.

deGive,

Reginald

L.

Auchincloss, and David S. Paterson

r

removal

York office: to '52

Broadway where larger

advices of Aug. 31

Mr.

ideas for

not

out

press

exchanges

is

that

23

with

I A.—The Iowa

Bankers

their

hold

Sept.

Day Sept. 23

MOINES,

Investment
will

discussion.

Stock

stated

DES

bond issues.

Virtually all the stock listed on
the
several
regional
exchanges

or

Hold Field

the

merged exchange,
would specialize in
stocks of mid-West corporations
and companies and in municipal
if

be

would

tickers

by

'

PRIVATE WIRE SYSTEM

as

agents of the local Ex¬
changes involved, and James) E.
Day, President of the Chicago

have
CLEVELAND

would

business
listed

officers

7535

CG-105

is

:

consolidation

merger

231 S. LaSalle Street

idea

Stock

No information

67 Wall Street

been

no
thought of
competition with the
New York Stock Exchange. We
already have our markets and the

cated

machines.

CHICAGO 4

:BS-297

■

purpose of the plan' is to
the defection of ^business

served

NEW YORK 5

%

next

Exchange.:

INCORPORATED

2-0650

for

has

merging

from small exchanges to the New
York market.
It is expected the

now

GEm&co.
HUBBARD

15,.:i948; The balance of the pro- >
ceed§ will be used to. meet the
loan and-, other^^requirements of;

very.

•

The

change

20 Post Office Square

Informal

discuss the

to

tentatively
month in Chicago.

other

9

Louis.

set

tract

WHOLESALE MARKETS IN
BANK and INSURANCE STOCKS

BOSTON

According to the dispatch the plan would include the
at

Cleveland,

offset

:■>? N. Y. Phone—REctor 2-4383

single exchange to be located

a

leans

been
■

18 Clinton St., Newark 2, .N, J.

•

.

-ihaiurin^Sept^^

Iowa Inv. Bankers to

Louis 'special dispatch in the New York
plan is on foot to consolidate six local ex¬

proposal
have been held by Exchange offi¬
cers
and
another, meeting has

p J. S. Rippel & Co.
/ ''

St,

Chicago, Detroit/*)
Cincinnati, New Or¬ There

meetings

.

a

Aug.

Exchanges

Bulletin Sent On Request

ISO BROADWAY, NEW YORK 5, N. I.

series

International Bank in March, 1948.

in* the fifth American 'way of lifev"

now

30, a
changes in mid-western cities into

SECURITIES

v

from

to

used

represents not only a Boards of-Governors of the Inter-r
a! bulwark ';of! bur national Monetary Fund and the

Reports Midwest Super-Exchange Planned

oper¬

NEW JERSEY

<

par.

proceeds

be

dividends and the amounts

as

Fireman's Fund

Exchaore1'

the

$85,000,000,

^/
the
refund"
A-1948: I%% ■

priced at

are

of

Harl, symbol' but

.^According j(tq< Chairman

According to

Stock

1949,

Part

of

system

New York "Times," in special dispatch says project proposes cen¬
tralization in Chicago of midwest local exchanges.

Umbers New York

15,

offering will

$50,000,000.
"As

Maple T. Harl

...

Thejollowing table lists the 1947; net

Laird, Bissell & Meeds

ing. / The
notes,
to
be j dated
Sept.:15, 1948, and tcr mature Sept. £

were

added,

authority sharing credit

responsibility,

answer

about

of

ance

and

$1

sidered

hold,"

and State

a

of

Sriiith, fiscal' agent.,.;A ropntrywide! selliAg - group, of ' securities
dealers participated in the offer¬

for

"that the American system of free
enterprise banking, with Federal

the
has

reserve

record

rarity in the future."

a

"We

mean-

time,

all-time

an

said.
"We
believe
that. sound
banking management and vigilant
supervision will make bank fail¬

.

iired.

FDIC

is

depositor safety," Chairman Harl

the ,13,batik?
whose
des

without loss to any depositor
a
Federally
insured
bank.

in

of

from

the

con¬

notes,
1% % *: series D-1949, .was made
Aug.) 31
by the Federal Home
Loan
Banks
through
Everett
,

year

500'

n

Banks'

ing advances to member institutions, on Augi 12/ last, totaled
$480,202,116, compared with $425,247,656 on June 30; 1948^

(he- Federal Deposit

from

posits

Loan

non-callable

r

Liquidates Debt

premiums

i

Home

solidated

$120,000,000

2 the/banks/ ^The; banks' /outstand^f

been;-"

the receipt

Market

on

offering, of

consolidated motes

circumstances; of the particular institution

dually

FHLB Notes
Public

6.31

existing -capital position,: it

I cannot see
investing

the

.

5.10

391/4

96

to

4.38

-

16V4

Insurance Corpo¬
ration announced on Aug. 30 that its debt to the
Treasury, originally
amounting to-$289 millions, has "been completely liquidated.
The
amount was advanced 14 years
ago at the inauguration of the FDIC
has

Exchange,

42

Makes final -paymejnt of $289. million loan*^-4

*>v

Stock

"if

the-plan is to develop a
larger market in local issues not

only slightly higher. On the other ex¬
distributions of 96%

was

York

New

«...35%r

47
'

York

4.42

City Bank Farmers Trust Co.

Chairman Maple Tl Hairl of

indicated earnings, the dividend and the nercent of earnings

or

1.60

that'lairger. payments vin>^om

In

After deducting cash and government securities from deposits

■

3.25

view of the present outlook and

2.8*

dollar of capital supporting almost seventeen dollars

one

51

V4.72

the: New

to

40%

1.3

From " the above figures it can be seen that about one-half of
the banks listed have at least the traditional ratio of one dollar of

change, with

2.40

'

'

7

,

"Sun," Emil Schram, President of

considerable portion of earnings-will depend

a

the individual

upon

Aj

considerable number have substantially higher ratios.

63

every

Gottron

the

.Whether oi> aiqt^l'ist^ rtihbrefclfbefai^dividend'

and

a

69

0.80

on

5.08%

93%

g r a

First National and U,.

12.00:

93

,

J

complete^,.

23%

respectively; ; In general it would appear that the institu¬
tions with the strongest capital positions, First National and U. S."
Trust, are distributing practically all earnings while others with the
higher ratios continue, to, add to
;

.

MZ

..

the lowest ratios with Approximately 3.9 and >3.8.

;

charges,

According

U. S. Trust and First National with

was

::2J;i by those retaining

•A./ *Includes City Bank Farmers Trust Company.

capital to each ten of deposits.

56

2.80

:
.

,

513

65,458 1,033,613 i 15.8 V
152,942 1,305.094 A 8.5

683,616
349,997
Bankers Trust
898,206
406,888
Central Hanover
a 128,579 1,409,010 A 11.0 1,021,972
1387,038
Chase National
323,941 4,154,809 .12.8 2,835,797 1,319,012
Chem. 'Bank & Trust 109,610.1,380,695 .12.4
848,315 ; 512,380
Commercial National : 20,833
178,357 :/ 8.6 ,149,367
28,990
Corn Exchange /__L^44,382/Z751,545 >16.9'
695,351'
>56,194
First National136,956/ ,529,565 / 3.9/ 496,388/ ^ /33,177
:6.4' 1,804,051-506,447
Guaranty
1 -SI /.y 11 363,848 2,310,498
8.8
Irving Trust
115,493 1,013,334
694,461 f 318,873
Manufacturers Trust 126,675 2,116,358
16.7 1,629,031
487,327
National City*
15.6 3,367,620 1,379,754
303,375 4,747,374
New York Trust—.65,078 / 589,318
9.1 •'401,184
188,134
Public National
16.4 ^ 366,870
30,567
502,072
,135,202
3.8
v
U. S.; Trust
29,326
110,044
90,620
19,424
i

55

said.,

While there is considerable .variation in the1 percentage
paid out^
most of the banks listed distributed around 60% of earnings last year.
Public National paid out approximately 47% which was the lowest.

and

at

and

Capital
Ratio

tooo's)^ i

2.00

17.42

_

National City with 49%

Deposits

3.66

80.00/-

_________

National

treme

'

*•""Funds

•<

.

are

•:-//
Total

Capital

1

os

:

'

v

'

'

r

;

Trust

Trust

S.

69

..

.

64

,

1.80

1.26
-

60

Z 60"

brokerage
transaction

Yield

}8/27/48

58%

85.82

Trust

York

Public
U.

_

Bid
Price

2.61

5.03

,/

_

Percent
Paid Out

1.60 /

,

*»/•*v.W;tyV-'C

Earnings

4.00

2.51

_

-

Guaranty Trust
Irving Trust

considerable

a

Trust-

Exchange

New

capital-deposit ratio in the following table, a "risk ratio" has been

1.80

Commercial National

National City*

is interesting to analyze the capital position

3.00

^

Manufacturers

"/'•////./:■/-.•

$1.20

Hanover

First National

large percentage of earnings should not be modified in light

Dividend

6.68

&

•'

1947

.

$2.06

—

Chemical Bank

Corn

It raises the question

Dividend Policies."

existing conditions.

of

Northwestern

of

published in the July/1948 Harvard Business Review

was

entitled "Bank Capital and
as

I.

Roland

*}?*• /?.'»V/' *

Operating
Indicated

i-ijy..; i t

Market

Earnings
.

— .

Chase National

Professor

by

article

An

;;

Net

:

Bank of Manhattan.

Bank Stocks |.

—

/:

'*

or

Bankers
,

*

•

\r,■:•<_>

E.

'V/ rVy 1 '/J*

y' }

1947.:.

Bank and Insurance Stocks
H.

A/

ttttt

price and yield.'/

By

/

■

>

.-V

all of whom have

Courts & Co. for

some

been with

time past.

Volume 168

I-

Number 4730

•

Sees

.

COMMERCIAL

THE

Expanding Television Field

j

television, sets will be many times
big as the best radio year."
■*;
Thatfs the viewpoint of a busi¬
x ness executive of Great Britain.

«f America, predicts nation-wide setup ;of video by 1952.

1

CHRONICLE

as

Frank Mi Folsom, Executive Vice-President of Radio Corporation

;

FINANCIAL

&

Now I'd like to

■v

you a

headline seeker, but there is none

a

rapid expansion of the

use

t h

entire

try!

e

goes

by;

1952,

Diocese

big field,

Abount

in

this

a

big

every

y

the
While

weird.

its imajor

Were

in

me¬

dium for home

c a n

Western

Frank

almost

business

r

is

man

>

not

;

to

indeed chandising

Parrish,

Amos

ca^ goods and services, television

New

York.

taihmentiields.

We

means.

Television

ho

of

his

Thirty receivers

a

to install

a

like

own

ment

ended, television was
finding- important usefulness in
drone planes and guided missile
ever

war

Television will

more

than

the com¬
by the new Bishop,

Dr. L.'L. Scaife.

biggest thing since radio.' And it
will outsell radio in selling goods,

.

.

ligious teachings Of the church?'
And then the new Bishop added:
"I

can

forsee television receivers

churches, parish houses,-; and
departments of the church

other

contribute tremendously to where they I will
pro ve an invalu¬
country's present and future able educational medium!"

welfare.

By

Ih

this

read

you

connection, I'd like to

news,

bringing

a wide variety of
entertainment and
sports

few sentences from

a

a programs
to their bedsides, the
only this week ""personal theatres"; of television
byjVice Admiral W. A. Radford, have ^rnade
confinement
much
Vice Chief*of Naval Operations.
;: more; bearable ta men in veterans'
"The future possibilities—from hospitals and to hundreds of shuta
naval point of view alone—are
ins*}. i}}/..
7; }7
amazing to me" Admiral Radford
Many schools and organizations

letter sent

to

me

.

.

■

writes. /Tn
use

training work,

television

where

we can

had

we

to

make films in many cases, xAt sea
—in the task forces — television
can,

the!

and undoubtedly will, take
place of some of our voice

maneuvering
down

plotting

cutting

circuits,

the noise

level in

T

rooms.

the

flag

think ^of

can

other uses — tele¬
vision will be commonplace with
us in a few years, 1 know.".;}; ;
Tki the field of education, tele¬
vision promises to be the longsoqght method for the teaching of
many,

many^

medicine and surgery.

Last June,

at the American Medical Associa¬

tion

;

in

Convention

Chicago, our
organization had the privilege of
demonstrating for an audience of
some
12,000 physicians- and sur¬
geons how television can find use¬

fulness

as an

.installed

educational medium,

television

cameras

} and microphones in the operating
'

rooms

at

Passavant

Memorial

,

.-Hospital, a transmitter in the hos¬
pital, and ^60 receivers at; Navy

Pier} at Northwestern University
School, rand in otherribcations.
// 7/}

Medical

For an entire

sicians

and

interested in adult education have
found

saw

such

'

effective

an

answers

it this way:

tory policy and shortened future

on

:

duction

which
which

are

have

basic

commodities

shutdowns

entire

list

prevalent than in
Backlogs of orders,
to grow in April,

cation

in

a r

ge

more

-

no

increase

■

followed

the

survey

is

pe¬

price raises in

steel,
copper, lead, zinc and tin.

June,
1 y re¬

coal,

—

The

too

this

long for publi¬
report;1 only the

all

since

prices have not increased.

substantial

June, although supported by more
intensive and agressive sales ef¬
forts.
Commenting on the rea¬
sons
for this situation, purchas •
ing executives mention prices as
being too high — greater avail¬
ability of many noncritical items,
agricultural market weakness, and
the lack of any incentive for for¬
ward buying beyond known re¬
quirements. -. v
•.
;

number

of

A

important

commodities have shown declined.

Up were:
abrasives, '-automo¬
tive, aluminum, bearings, copper
and brass, cadmium, cellophane1,
leadership of his ^wonderful or¬
chestra was ' first televised, we
cement,—cigarettes,—coal," coke^
electrical
found " ourselves bawling like a
equipment,; firebrick,
graphite, iron, steel, lead, machin¬
baby. But, as they say in the ora¬
ery
and
repair
parts, office fur¬
tion, unashamed; Was this telecast
niture, opticals, phenol, printing,
twice as effective as rado? No .'.
pumps, refractories, rubber prod¬
it was'more nearly ten: times as
ucts,! sulphuric
acid, tin, tools,
effective.
•
Basing point pricing, changes
valves, wire, wood pulp, zinc and
/ "The television
coverage of the came in for much discussion in
zinc products.'?,!}
..
(s.
It is apparent that
Republican Convention in Phila¬ the reports.
} ' Reported
down:
alcohol,
air
delphia} was' nothing
short
of more business is adversely affect¬
hose,
poorer
grades
of
coal, vege-f
thrilling," Mr. Parrish writes. ed than helped by the switch to table
oils, grains, sugar, hides,
F.O.B.
"Television
shipping
point.
viewers
saw
more
Many'
leather,
southern
pine,
Douglas
fir,
hold
the (opinion that the
real
[than any delegate-r-including the
mercury, synthetic resins, screw
front-rowers—just a ^ ^hey do . at effect of eliminating basing point machine
products, shellac, silver,
pricing cannot be measured until
ahy television event/!
"When-

Toscanmi's

ma s

t e rful

.

.

•

the commodities involved

Our culture and

are

soap,

dis-

stearates. V

;

}

V

}

<

'

'

,

jpBooms Beyond -Expectations;
Postwar

is

commercial

television

almost two years old.

"NBC-Life's

scanning

of

the

markets.

In that

1

I* j

-

Inventories

Chief Executive and his party was

perhaps the finest example yet of
clear,-close-up views of operations time it
has boomed beyond the what television can do when as-,
and clinical procedures that it was
expectations
of
its
most; enthusi¬ sighed a major hews events what; as though they were
standing beastic leaders.'^ There are
other
eyer the barriers;" " / V: w :; -r
i hind } the surgeon," looking > over
ways of charting that boom—but
v} It Vsfc voir fh'isr Doesn'tthat; ex¬
'■.'his"shoulder.'
V
I'd likerito mention a more .unique
After this .demonstration, Dr: J.
plain why - television has caught on
one; '
'
.;•'}> .* . . -1
..j/.,, •
• like wildfire?
Gan anyone have
Roscoe Miller, dean of the North¬
i
f
Recently}
western Medical School, declared:
DavidSaimoff,-Presi- any doubt as to its future?

-

"

■

40 Years in Detroit

The tendency is to "live off the

II
li;

fat7 exists. ,.>/The Fo- Hn»>nblowev & Weeks ;;
trend to build up stocks, reported i i DETROIT, MICH.;—The fortieth
in May and June, has been re¬ anniversary of the Detroit office

fat". where

versed

as

any -

more

of Hornblower & Weeks

Purchasing Agents

report inventory reductions. Critic
eal

materials

be} built7tip:

inventories

served

cannot

held

Others}; iiieasing

was

ot}~

Sept. lr. -A reception wasi

at

the

Penobscot

firm's offices

Building, which

in

the

at¬
dent and Chairman of the Board
tended by leaning bankers anc
teaching meth¬
MLet me quote again from Amos supply, needlnbt} be}
of the Radio Corporation of Amer-.
sight.
No longer will
yond balanced requirements, in securities dealers and other busi¬
Parrish:
V
v
the physician and student be lim¬ ica, was .in receipt of. ai letter from;
view of high prices. • Today'^. 60ness associates of the
Sir
Louis r. Sterling, } prominent A j "We ;don't know arid we don't
firm.:};r >
ited, by too great a separation from
wiant tc> t know;
what's; m -a tele¬ day can become tomorrow's 90In connection with this anniver¬
Mr.
the subject, as they are now by British,;' business ( executive.
vision set, because we don't un¬
observing/ from surgical amphi¬ Sterling wrote*. that he had just derstand it. But we do know there day supply . rather ; quickly.. Pur} sary, the firm acknowledges the
seen
a /copy
chased materials:- inventori^sr are;
of the special tele¬
theatre galleries.
With television,
is one thing--one of the elements
;254year service record of four o|
vision section which the New York
all; students see exactly; what; the
that makes up the future of Amer¬ hot considered too bigh for' cur^ s its 1 Detroit employees: George
"Times", had published in June,
R|
demonstrating surgeon
wishes
ica—and -that} means it has; no rent production schedules. ^ '
7 ;
and his comment was:
"
Toms; a registered representative,'
thenv to see.
This is only one of
[
was

"A revolution in

ods is in

.

.

.

-

^

.

77;7.;'777 sk'-r

limits.

the

many

vision ih

potentialities

of

tele¬

improving the teaching

of tmedicine."

.

:

,

i

"What'

a;

big.

dWelopment

the} early; days- of

from

television;

y;

to

"That

hd4imit; ^element; is

combination

;;

of "excellent

a
report¬

think that the^New York "Times": ing, teaching, entertaining,
selling:
{In - the work of spreading re¬ should
devote'a special section of This element 'says in tihdebatable
ligious understanding, in the dis28 pages to that one. subject.
It terms: }Stopt Listen^ and LOOK!!5
semina tipir of religious tra
ining,
television' will- find am important ought to help-boom the television And people, will, not only. .'Stop,

role../By familiarizing
of

.

hundreds business

thousands of members "of< the




immensely. •'. 7 In

1 my

1

materials in most general use are
listed.
Contrary to general belief,

started
shown

one

from

vacation

past years.

reported in

ever

riod

1

the

is

slightly off

Robert C. Swanton

flecting

Specific Commodity Changes }
The longest list of price increases

:
Let me aiddithat" those comments
In tight supply:
aluminum, boxr
tributed under mdre. competitive
knowledge have been advanced are well worth
your consideration,
cars, building materials, cadmium,
[conditions.
77}.'};
7
'
"
through television visits to mu¬ because the foundation of tele¬
The over-all business picture* Is; cement, chromic acid, copper, pig
seums,. art-; centers,
the theatre, vision's success is
just that type of
iron, scrap, lead, nails, .nickel,
still good,
but future; develop¬
opera, -and ballet
service.
pipe, steel, steel drums, tin, zinc.
ments seem less certain.
Last
Easier to get: coal,
winter,
television
pro¬
I'd like to add a few; words
containers,
fuel oil, gasoline, air dried
gramming- was given a tremen¬ about}
Commodity Prices lumber,
thi^j^leyising} the} po¬
dous boost- when NBC and the
litical conventions. •••
The sharp, upswing in prices, paper, paraffine wax, soda ash.;}; j
Theatre Guild combined to pre¬
There can't be any doubt in following the Summer wave of
Employment
sent a series of Theatre Guild hit
anybody's mind-that television re¬ wage increases covered more ma¬
; Pay
plays .on television,
The Kraft
rolls climbed a little in
terials and had effect on more
ceived
its [greatest
impetus at
Television Theatre, is another ex}
August.} with important strikes
these conventions.
It has been business than in any period since
out of the way, plus some seasonal
ample of what is being offered to
Some prices ad->
estimated'' that
about' 16,000,000 price decontrol.
televiewers in the way of dra¬
employment increase. Skilled help
vanced beyond the amount justi¬
people
sat
in
on
the
conventions
is short in several areas.
matic programs.1, The success of
Many
fied by the immediate wage in¬
small plants are reported on short
these programs led "^Variety," the by television.
crease/indicating a passing along
"Radio
time.
A pickup is noted in tex¬
Daily." the important
trade paper, to forecast that the
of
accumulated
cost
increases
tile activity.
day may come* when a playwright tfade paper,-haid 4his comment.... > from
freight rate and price ad¬
Canada.
"The
may make more money from tele-:
closing session of the justments. Buyers point to grow¬
vision -than he does from having Democratic Convention clearly ing public price
Production is holding • to high
resistance—prod¬
his show produced on Broadway. emphasized
tele vision's most ucts being priced out of the mar¬ levels; back orders slightly down;
as
in the United States. - Prices
V Proud as we are of the business breathtaking and inspiring job to kets—and look on this last
up¬
date.
Scanning of President Tru- surge of prices as creating an un¬ are up, withdrawal of governs
stature
television
has
attained,
he boarded his special stable and top-heavy price struc¬ ment subsidies being a factor. In¬
we're even prouder of the many man}^as
excellent ways in which it has train in Washington- and his ar¬ ture;
Bumper, props; be*®: and ventories. being :maintained^ em¬
served and will continue to serve rival at the Philadelphia station abroad can further reduce prices ployment up; buying policy 30 to
was stark drama at
its' realistic of sensitive farm products and 90 days, with the target, about (>Q
humanity. -.
*
may have an influence on other days.

week, these phy¬

internes

in this service

educational tool.

Parrish

and

high pla¬

}a ; downward
(trend. Pro-

(

*; /

down

coVerage of buying policy. More
teau and now need for caution is
repeatedly ex¬
;shows some pressed1 in the "reports.} ';
Ayr:
L
■■■*■
(indications of

to

; •

in

that

"j} "Television," he repoHs, " is the

churches:-

made

-L}.v:

slowing

June, production growth seemingly halt¬
has lev- ed} support the restricted inven-'

7eled off

quote atvsome length because of
' tremendous
importance to
<

orders

March to

} but

issues to

I'd

back

madefrom

In the July issue

various

Repeating Arms Corporation, general
industrial:;
:
1
business this the previously reported movement
Summer :} has toward 90-day commitments. High
maiht a ined prices, which many believe have
the
gains reached a leveling off place, with

-

television

little magazine he

thoughts which

Winchester

:

clients, Mr. Parrish set down

some

Churches

as many

was

set in his home.

this
pro¬

I'd like to read to you

envision

can*

Great progress was made, and be¬

ouif

the

vision, and one of the first things

many to one;- because it appeals; to
:
,v
"
your eyes as well as to your ears.
"Television^ educational--value
And the eyes are still the windows
fori it a major role in industry, in to religion is
extremely great," Dr.
to your soul-r-especially your buy¬
religious teaching, in education, Scaife said. "While it can never
ing soul."
and in the 'military field;
take the place of actual attendance
•'} [What does the televiewing pub¬
The war speeded developments at church services—it can
vitally
lic gets out of television? Amos
in j military
uses
of . television. supplement and enhance the re¬
alsb has application in non-enter-

work.

Purchases of

mer¬

whose

consultant,

:

According to the report of the composite opinion of members of
the Business Survey Committee of the National Association of Pur¬
chasing Agents, whose Chairman is Robert C. Swanton, Director of

Bpff^lo. and surrounding towhs; their

their

,

powerful force in selling Ameri¬

fore the

price situation.

a

seriously in business circles.

refer

congregations retailers; \1-r*
viewed the televised ceremony in

Folsom

M.

people.

installed in

and "the

entertainment
—as

'

more

fellow's I

3d,OGO persons witnessed he did

vided the

con¬

new

of

number of

ception is that
of ia

the }Other

what

ceremony. ; Obviously,
church could accommodate

of

sense

in

on

^Television
is

This

Swanton, Chairman of Business Survey Committee of

National Association of Purchasing' Agents, gives
composite opin¬
ion of its members. Sees basing point
pricing change a factor in

strengthen, inter-religious 'under¬ clients d6 a business volume of $7
standing. '}•;r -:;v'
billion annually. }7.:7:};}:7;77:>
Recently, the Episcopal Church
Just about a year ago, Mr. Par¬
ordained
a
new
Bishop of the rish decided to look- into tele¬

on

this topic, Mr.
Folsom said: .'
.

audience/ with;

church, * television

coun¬

Spfeaking

seen

smartest

whose counsel and views are taken

television.

casting would
c o;v e r

as

country's

consultant.

of television and predicted that

broad¬

video

"

Robert C.

view

reported

this

13

[Cites Indications of Downward Business Trend

perhaps

by

of

an

television

give

address before the Western Radio and Appliance Trade in
on Aug. 4„ Frank M. Folsom, Executive Vice-President
of (the Radio Corporation of America, in charge of its Victor Division,

In

Sah Francisco

(909)

ties

and/ equipment

"schedules
90

who

^ r :

became

Only-: those requiring; coiniiiodi-r •|irm- in

loiigerrv lqad^

Listeny. and Look'—but they wilt 4s

opinion,- the 'volume of sales1- 6f-' ALSO buy."

;;-''7(7:-..v>:}

Buying Policy
7 ;

having,

a

toffice

associate of

an

1919} Cecil

manager^

who- started

time) for: production [1920; Fred R. Husk,-

have: a. policy of over

days.:/Thev buying policy trend

:

representative,t

^922

the

F.VDowney•;
.a

in|

^registered

who } started >

ir^

and Ralf A. Crooks ton, man-;

definitely* changed, ta. 30-6Q- jager investment department, wha

day tommitments, as; compared to started

ih 19^3.;

-

14

(910)

THE

;1..Vf.'IJ

r

*■

COMMERCIAL

Thursday, September 2,'1943

CHRONICLE

FINANCIAL

&

t

Salesman''

a Retail
fiofch 0hVi)r/u

VIII Were
:

se^^^es
troipecfus

.

National

"If I Were
The

&

securities

I your investment dealer, or from
research

By HENRY! HUNT

.

request from

upon

corporation

1?0 BROADWAY, NEW YORK 5. N. Y.

lt)th

Director

of

article in

of

which

Fund

Wellington

Wilkins;

by A. *T.

on/out-,

has

performance record

Under

well.

as

the

Street,

Morgan, the Wizard of Walnut

leadership

excellent

an.

Walter Li

of

45), Mr. Wilkins had

man

Ltd.

Naiion-Wide Securities Co.

.//'•/You
the

In his

time Mr. Wilkins is

spare

•Pa., where he raises steaks
cattle food.

'

a

' " 'r,/

1 ' *

L.

;

r

/

'

.

L:,-...

'i'

-

.■

V1-.

•

*

\

.

only requirements
Investment
Dealers

new

!; individual

Francisco, ope

a

the little

All dividends

automatically reinvested at net asset Value.

Designed to foster

tematic investment of

• pays

"load" and loses

CALVIN BULLOCK

sys¬

New Television

Organization of Television
vestment company

electronics and

Fund/

Television

/

was announced in

Chicago recently by

Fund; Inc., Was conceived-

Investor," according to Mr. Tripp, who

Rand Fund

also

is President

Economic Trend

P.1 Pope/'

tiam

as

a

safe deposit box.

a group

of

"logical -medium, forre¬

we

WU-

are:

Charles !<£L-

The'Irving Trust Company, New York

Custodian of the Fund.

/

tinuoiisiy building up sa $izabl^fmnd;for your future needs.
I will be glad to have m,y firm send you a bill every three
months so that this investment program can be automatic.

City, is

;('//;

,

,

-

•

The
Proipectus from

your

Investment Dealer or ■;

HUGH W.LONG SCO.
46

WAU

•10)

A-iCUIS

sikfcel.

NEW YORK 5, N Y.

"

1"

"

,VL-

find the

more

and when labor is short-and

arme^ forces need

prospective deficit."

defense1

more men,

materials and the Federal

Government 'is

,

'many

national income

With "another

"Bird in the Hand''
all share¬

holders—mot because dividend income Will5make them millibnaires

.(certainly not under the present tax system, which in effect, taxes
dividends both before and after they!reach.the shareholder), but!

eystone

because it apparently

stock

Custodian

The

on

the trend of

reason

for the

no doubt that sales, earnings and working; capital
pbrtant indicators of the general/.?tate, of .business- health;

ckse, evidence of ah upward

trend of dividends is usually a

stimulant to'the'stock markbt; r 1
"Corporate dividends

i

inyesting tlieir capital,

,

tangible bearing

jhere is

investment funds
/

more

■su¬

,

Certificates of Participation in

„

a

perior correlation of stock prices and dividend payments must? be'
fnvestor-.thinking along the old dine of 'a bird in the hand,' because

Funds
'

has

prices than other business statistics.

although it was

a very

quarters of 1946.

bonds

have

im*- have climbed more rapidly, and in -the; last 12. Months
ahy dividend's have gbrie-up at a rate* eqbal to that of the late

are

In

powerful

/'

been

on

the

of

rise

now

since

modest rise throughout the balance of the

Mallory, Adee & Co. top

(Series K1-K2)

WELLINGTON

common stocks
'.'

■

>;i

I;

/

i

•'>

■

Prospectus from
/' four local

Admit Two Partners

FUND

;(Series S1-S2-5S-S4)

75th Consecutive

investment daalar or.

Keystone CoWj^any.

This

of Boston
1

SO

Congress Street

able
^

-

-

Masiacliuietts




-1948.
•

t

20C' ^»efr-"dhttrt
net income

is

pay-.

-

September 30, T948, to stock*.
of record, September

holders

•

Boston 9,

dividend

rfrom ordinary
-

*.

see

vs.

of dividends. to earnings (39%

76% in 1939 and 70%

dollar dividend payments

sometime in, 1949" or*

1947 amounted to $6.8

in 1929), it would

keach

1950. Total dividends to share-:

billion;

an

all-time high, compared

:«Xll " of; tHis': is ' especially {lMb'ori/Mt ' to /inyeStinenf Voptpany'

Mareholders;^cansb'thfe/lbrge!Majoi#y!>M:^to

all income from portfolio investments (aftfer -deducting expenses);
And the upward trend in '.investment- company dividends to - shared
Mallory, Adee & Co.; 120 Broadr holders from investment Income, already very apparent in 19,47.
way, New York City, members of
and continuibg thus far in 'l948, Is a very welcome bird in the hand'
the; NeW; York /Stock and .Curb
in'these'high^ostMfgiving days./!,ot ■:•,
;-/<••♦;»
•,//•. r
j
Exchanges, have bdrqitted George
'"From the 13% tricrease' that took placc^^ in; corporate dividend
S! Well-?'
paymentsthe first quarter
ington Ixi partnership
Sept/;t!
period of 1947—according to the Department of Commerce figures—Mr. Wellington was formerly a
they'can Still '.apparently clipib eorne/more. /Once the expanded pro*
partner in Arrowkmith, Post ^c; duction capacity and improved plant equipment is paid for ;and the
Welch.
earnings begin to come through to net, it is certainly reasonable to
/
expect that a much larger percentage, of net income will be paid out
On

gi

'

Quarterly- DlyldensI
Tke

.

1947

surprise.: u& to

holders in

preferred sto cks

■

not

But from the fourth quarter of 1946 onward,' they ''flood stage''

(Series Bl-fi2-B3-B4)

■■

of net income, in

war

corporate,

'20s. •*.
"And'What is more, in view ©f the probabiiity that a high level
business activity and profits will be maintained for several years,:

plus 'the actuality of the low ratio

1943,

through the uncertain strike-ridden days of the first three-

years and

in

j

management record.

~

//

"The trend of dividend payments is all-important to

We-are recommending X Balanced

.

high;

and ERF require

'faced.

Fund because of its
(I would then point
out the important features in the* Prospectus and. in the
sales literature, such as. management policies and objectives,
dividend record) price range, safeguards; costs, etc.)
I recommend the purchase of .this Fund which vyill give
you all the; advantages I have mentioned, plus all-important
!• cobtinhdhS^Experienced investment supervision* -The hiam-:;
!agcts;b|^ .this /Fbrid J^hb,^^ iacidehtallyr have large personal/
investments in the' Fund, devote:their full time to the job
of investing. They are trained men of long experience as
investment maiiagers, and you. will agree, I believe, that
these experts, -devoting all of their time to the job, can
do. better than the average investor can do for himself.
In your own case I;know your, business takes up practically
all of your time, arid'that you: have little or no, time left to
look after your own investments,' By .investing in this Fund
you will haVe the same" peace of mind .regarding your in¬
vestments that you gbt when you assign. some important
business .problem to a trusted and able assistant.
„

.

excellent long-term

culled from/ "These Things Seemed

"At a time when demand for, goods exceeds supply- in

.

We

CHICAGO

was.

"

issued by Selected Investments Company of Chicago:

basic industries

INCCR^ORAUP

How Inflation Works

following sentence

important,"
j

i. f

.

.

,

put all of your idle
seriously consider a periodic investment
'/.program' for adding to your shares. I suggest a convenient
way for you to do this is to set aside a definite sum each
three months to buy additional shares.
I also suggest that
if you do not need the current dividend income that you
reinvest all of your dividends. In this way you will be con-

James, President, Northwestern National Insurance Company; Rus¬
Matthias, Attorrieyy and Herbert H. Taylor, President, Frank-?
tin County Coal Go.

.

funds; you should

Mines and Chairman of

Lin^ Studies! Gtheir directors o£ the Fund

.

vestment, into which i recommend .you

-

Vice-President, Neujmode Hcsie$ 'do1;

t

cause

is President of the Fund and-

Consolidated Copper

"

-

"Ready marketability" is ^evaded by these Funds be¬
they' agree to redeem their shares at their exact
/ liquidation value. :;■ ' •':
:
v " * 5
' ' - ' v/
'
-?
;;//;They Vprbkride an ideal medium" for building up a fund;
for retirement or other purposes, because after your first in-

'

sell H.

-

shareholders^^foiir times b/yjeaf!;
j
■* . •
r
convenience, which these Balanced Funds provide;
is
Ih^t; of all relief -from Wiaking; your own, investment,
changes, which are made for ,you by the experienced man¬
agers of these Funds. Secondly, the combining of the income
on more than approximately 150 investments into only four
-checks a. year simplifying your accounting and income tax

:

the most dynamic growth potential available to the American

as

Wilkins

specialising in securities iii the field of" tefevisibri,

radio,'

participation in vthe future of the television industry, ;which
gard

J.

;■ t.!'

The

first;open-end in*:

of business and financial', men headed by Chester 'D. Tripp!

Manhattan

A.

''l

their

:/..

Fund* ,lnCi> ;the

:"v *s'"-v

well^/diversified;/Investments, is paid/out to

fully!, selected,

hlspaymfents'

\

v

•

and cbntihuous incorhe/ Is j
diversification. In other words,
you do not put "all your eggs in One basket." The net income
.which these Balanced Funds earn op approximately 150 care¬

We heartily approve- of this idea in theory and

type of business.

types

provided by this three-way

hope it develops that dealers and retail Salesmen will go after this

Established 1894

also ' among

different

The "assu rance of reasonable

are

only the regular

extra commission if he discontinues

no

decides to sell out.

or

but

and

iBarket 'Conditions

4

or

savings, the investor

companies,

industries

-holdings to meet changing economic and

"Multiple Purchase Program,"; 'The

.minimum of $25 each.

you

securities—bonds, preferred and Com'mon stocks.
The managements of these
Funds
are
constantly adjusting these

'

that the initial purchase be at least $50 hnd-

are

Subsequent purchases

give you all

need; their port¬
divided not only among many

folios are

■.? iiff-;-

ailterent

Of the .better managed mutual funds, is now shooting at

fellow for business with its

available

.

"of

The Commonwealth Investment Company of San
Prospectuses

—

am

the diversification

"Multiple Purchase. Program"

from

in

recommending

I

I mean that Balanced Funds

various types of,
'11 i "(1V

••*

get all of these features

security

; Funds.

^

;v

gentleman farmer at Paoli,

the poofandgrows

on

*

'.-■1

.vi

v

>

can

or for any
in mind.

which/isr the^Shares of Balanced Mutual
'
;
.';'r :!!.!'/..>■'/':
By "complete investment program,"

^nd in trajining retail salesmen before he joined "Wellington^

13.years ago.

Shares, Inc.

.■'//

retail sales¬

as a

future retirement, for the

your

education of your ichildien,
/ other purpose you may have
t

doesn't look a day

of experience both

years

fund for

"Wellington" is the largest

A veteran of World Wars I and II (though he

.:

over

Bullock Fund,

.

"

standing sales record in recent years not "to mention

-

I would say to m,y prospect—Mr. Jones, you will be in-.
terested, I am. sure, in an iny.estmeiit that Will give .you in ;
a single security a
complete investment program, assurance
of reasonable and continuous income, - convenience, ready ;
'marketability whenever you need cash,
and
an
ideal medium for
building a

:

written

...

Wellingntoii Fund

DIrector of Distribution.,

f

Retail Salesman"

a

this series iwas

distribution

:

balanced fund in the East with net assets"of "nearly $60,000,000.

Dividend

y }f**

By A. J. WILKINS

-

£

■

/.!>/>.

Philadelphia

Hi,:'

WALTER

•;>;'

V

L MfcRGAN

• * f *Pr*mdwnf« --

,

»

Aug.

31, William
.

and Alfred Vn Smith

S.

Sagar

retired/from!

in

dividends than the

recent low

39%./A/'conservative estimate of

corporate'dividends for the full year 1948: 15% above those for
partnership in' MallOry, Adee *&. / 947-^—br- $7-.8' billion."—-^.Tlie foregoing is quoted frorii Arthur Wiesenberger's ^investment;Company- News!"- ; //;- ^
Co.;,. /; ,1; :/l J
* K
total

Volume 168

LETTER TO THE

EDITOR

World Gold Price

"Barclay's Bank Review" holds; there is ground for raising official price of gold

as an aid in increasing '
productions but points out U. S. is not likely to favor this action because of its inflationary effects,; i

Price Rise Has Been Moderate
"

W. J. Wilckens holds ih view of increased

money supply and sttpply
normal price rise should be 49% instead of turtent

15

(911)

CHRONICLE

Sees U- Si Controlling

Disagrees With Contention That
of goods

FINANCIAL

&

COMMERCIAL

THE

Number 4730

In an article, captioned "The Price of Gold," "Barclay's Bank Review" for August^ a!
quarterly publication of Barclay's Bank, Ltd., of London, calls attention to the rigidity
of the price for gold, despite mounting levels of all 6ther prices; and the effects of this

: situation

in
causing
reduced^gold production as well a£ prices* are not sufficiently remu¬ pact explains the abnormal in¬
depression in gold mining indus¬ nerative. World gold production, crease in gold production in the
Editor, The Commercial and Financial Chronicle:
An example
of the ad¬
South Africa and else- which rose from 19,200,000 ozs. in 1930's.
I would like : to. express my disagreement with the conclusion try in
1929 tO 41,000,000 ozs. in 1940, had verse double impact is provided
where. According to the article;
drawn ifrorh the interesting facts contained in Mr. Stanley Dickover's
fallen back to 27,700,000 ozs. in by the recent fate of gold mining
Gold is one of the very few
article in your Aug. 26 issue.
1947.
The experience of these 19 in Canada, where the deterrent of
I am in agreement with him that the primary inflation is in the commodities the price of which
mounting costs has been supple¬
has not increased since 1939. That years has reminded the world of
money supply (bank deposits and^
the fact that gold producers do mented by the 10% appreciation
currency), which increased from the cost of living; is 20 points claim must be carefully defined.
well
in
times
of deflation and of the Canadian dollar ordained
$63 billion in 1938 to $166 billion higher than it should be, some of It refers to the official price of
badly in times of inflation.
The in 1946 precisely to ward off the
them
in 1948, or 163%, most of that in¬
being self-corrective, such gold and, more particularly, to
truth of this general proposition inflationary dangers in the eco
crease occurring prior to 1948 and as continued shortages Of Or ab'- 'the
price - paid by the United
became recognized in gold stand¬ hotaic siituationc . ^ r during the period when produc¬ nornial demand for cars, houses, States Treasury. This has stood ard
The compression of profits be- ;
days when the price of gold
tion of goods was severely re¬ etc., tOfhpOraty relief shipments at $35 per fine oz. since the dolf"
was
inexorably fixed.
But this* tween rising costs and a fixed
.to
stricted and shortages developed j
foreign nations, etc.
When lar was devalued in 1933. The;
peculiar relationship between the price for gold can be illustrated I
these factors disappear, '^ as they stealing
price, disregarding the
Mr.
DickoVer
concludes -thgt
profitability of gold production, by / data for South v Africa^ the ;
eventiialiy;
must,
and4
soon, if in^ small adjustmphts made to allow1
'riftedpurchasing 'nd^^r increasea
and the movements in the general, most important of the world gold '■
dustriar production continues un¬ for changes ih shipping and in^
144% (adjusted for population inlprice level has changed since the producers.
Costs, has been at the
hampered,
there
should
be
a de¬ suranee
creaseh we are Very fortunate
currency price of gold came to,
The fate of gold production in.
cline in the cost of living which present figure of £8 12s. 3d. per
indeed that the cost of living ftals
acquire greater elasticity than it. South America has been typical
will bring ft in a normal relation oz. sifted 1939,, These, are official
had
in
increased; Only 70%, and that- it is
gold standard days. Gold of what has occurred in most of >
to the. money "supply, unless the' prices and it may be argued that"
? miraculous that' the; increase
hs|s
for this Very reason. they' signify production now can be influenced, the Other important gold produc¬
riot been greater.
He then cites government persists; in its unwise
not merely by movements in the,
ing countries. This Will be seen;
little; It is true that where fret
the increase of 76% since 1939 ip tinkering with; prices, which is
general level of ether prices and from the following estimates of
Markets exist gold 3s, quoted
weljl therefore of costs, but by changes;
the phys'cal' volume of industrial also-, part of the present abnorm¬
gold production given in the lat- r
above these figufes.
In terms of
production^ based- on. the; Federal ally: high costs.
in the currency price of gold.
est annual report of the Bank cf
Mr. Dickoyer's conclusion that dollars (thus avoiding the comf
Reserve Index, .as probably the
International Settlements.
Far
from
neutralizing
one
an¬
plication ; of the dollar-sterling
most dynanfiio restraint on .price the price:trend may continue up¬
other thfese tw6 influences tend'
Is this decline in world gold
ward for a generation -or mope cross rate in these; free Markets)
into
Ra¬
seems to me to discount tod much the; price of golden Alexandtia^ is topuli ih the same difectioii. This- production to be deplored?
agree,* hut; I also* feel1 that he hgs
the power of Our "superb, flexible about $65; in Bombay $91; in is because When deflation and tionalists may answer "No," ar¬
understated its effect,:
^ |
falling
prices rule in the world,; guing that, at this of all times, the
Hongkong
$68;
and
much
nearer
productive mechanism" - to pro¬
\ ; If -a nofmal - supply' of godds-4These monetary authorities are predis-- world should find better ways of
duce more goods at lower-prices home, in Paris, it is $76.
1G
» .Is;;poured-;
for' -more people, which * is the ate the- prices whieh Willing buyK posed- to seek refuge from their, using its resources than in digging
difficulties ih a devaltiatiph of gold from the earth merely to remoney- supply—lM-^-it will pro¬
ers are prepared to pay to willing
greatest ^ argument 'i. Wehavein
duce a normal price—IP. - :; j
sellers and they therefore reflect, their currencies in terms of gold. bury the bulk of it in another
Support of bur 'economic system; ■:

increase of

70%.

world

.

.

■

.

.

It was- ih cireumstaftces, such as hole.
They HCould reinforce their
If the!, Supply/of "goods is. 1.7-^, i "Perhaps^ as a lay ecc^mist,^ I a truer measure of the Value of
the. money supply is ;2.63M,
gold in terms b£ dpllaf s; and of alt theses that sterling was depreci-. argument by pointing out that
)^:l#bakiftgvb^
ated
in
1931
and
the
dollar
deval-.
that
can
be
bought with dollars,
gold has lost most of its signifi¬
the priceih,;a noimaV unregulated
tinning mkjpertS; hut unless I ex?
Conversely, when- cance as the basis of currency and
tharv the fixed official Quotationi ued in 1933.
{;C; *
>• (2.63M) press - myself I'll never know
credit
and
prices
are
rising
and
inflationary,
oscillations
in
that
market .should be 1.49P* ^ '■), where my thinking is wrong. Let NothAyithstanddhg, this -fact,, th^

(

and

.

;

.

-

■

free >

today is of
only, - imnor•, significance to -gold
w. jf. wilckens; '/
production, which is,mainly conn
Aug. 26, 1948
cerhed; with thev rigidly fixed of[/
Fifty Church St.
■
;
ficial quotations; HowOver- arti¬
New York, N.-Y. ? •
v !£\7-i ficialthoy may be, thdse offlciaf
prices are those at which the bulk
of the international traffic in gold-

(1.76G) that be the exedse'for this letters

indicating anormal'pricd increase
of 49% compared to. the current
i,70% toirease.
*•s •''r'-fe
■3
There are many reasons why

price

for; gold

economic situa¬

forces lurk in the

world

tion, the thoughts of the author'?.
ities will not normally run to de-

»

-

prices and M" the general

level of economic welfare

no

long-

fluctuations;
in
; Op
But the fact
is
they thidk in terms of monetary
that gold provides the readiest
correctives they will envisage ari means of earning hard currencies
increase in the value of their cur¬ —not
merely dollars but all the
rency in
terms of gold, i.e., a others in the descending scale Of
is effecfCd^ Even more fmportan|, lowering of the currency price of scarcity.
For that reason alone
the production of gold deserves a
they are those at which most of gold, i
Instrdctieb under supervision of OsCur Lasdon, member of New
the
rieWiy-mined gold
in " thie
In the present era of managed high priority, in keeping with the;
"i York Stock Exchange.
world has to be sold.
currencies, therefore, the normal urgency of filling the dollar gap
The rjgidity of the' selli-ng pricje effect 6f inflation and deflation oh that faces the world outside the
Courses covering' the operation" ana function ;of the 'American
We could do today
for gold and the mounting level gold production will tend; to be United States.
financial economy are being emjphasized by the City College School
of. all other prices have caught the reinforced by changes in the cur¬ with the tefx million ounces of
Of Business,' 17 Lexington Avenue, New York City, in its evening
gold producer in. their tightening rency iprice of gold. The 1930-s gold a year by which production
session curriculum for the 19481 Fall Term. Under the \Supervision
in countries other than the United
grip. His profits have fallen, and provided, many examples of the
of Oscar Lasdon, member of ttie$>
States exceeded in 1940 the fig¬
a
twO-fojd
benefit
of
falling
costs
df
good
deal
of
gold
which
might
Conference
of
Commercial
Re-*
New"Ydrkw Stock:Exchange;and
ure for 1947.
'
Associate Editor of; "The Bankirig ceivable Companies, is also being otherwise have been produced hajs production and a higher currenc{y
Post war attempts to stimulate
Law Journal," the Credits & Fi¬ offered by the Evening and Ex¬ been left to lie unmined because pjrice df gold/ This double imlthe production of gold have so far
tension Division during the 1948
nance Division is offering a prac¬
yf' .: ' ' v ''
Working
Production
working
taken the form of granting more
Dividends
'
,
.
Profit
tical orientation in finance with Fall Term;
CVold
Ore milled
output
Costs
;v y.-Ji «.
'•
••
'; -

synchronize with
the output of gold.

,.

N. Y, City College Offers Finance Courses

.

.

er

valuation.

.

.

•
■

v

■

>

the assistance of 'qualified
istsln the field. *

;•

11

special-

n' *' "

-

^

the'following 1 subjects ; and
structidnal personnel/
L Investment

a

of

the

that

■ and
• former
Financial
Editor;of the«"Journal- of

News
^

.

Commerce";Banking. Practices—
John F.
tMd^nahan,, Legah invest¬

such

fered..
The

General American Investors Cor¬

poration

is

in

institution

-

Secretary

Extension Di¬
pioneering in this field

fw.

The Evening an^d

v

.

Million '

*

tons

Year
;r

41

9

the

course

United
has

States

been

1939

of study planned
is designed to pro¬

a

course

broad

and

1941

d.

s.

d.

3

13

4

s.

d.

these

2

Canada. Last November the Cana¬

7-

dian

his intention to increase from $35
to $42 the price paid for domestic

11

8

12

3

6

14

;9

102 -6

,13

7

5/9

13

0

5-3

newly-minded gold. This propo¬
sal was objected to by the Inter¬
national Monetary Fund on the

-12.4

.

67.3 v

,

67.0

'

58.9

91

<

98

13.5
.13.9

•

.

>

10
'•

5

;

6

10

6

; 6

13.6

104

4

i

12.3

-106

11

>

12

8

5

1

ground that it would involve set¬

i

11.8

112

11

,11

3

4

8

1

11.8
11.5

1610

4

5

ting
and

.

118 19127 V4

-

5

Rhodesia

,T.he. Security.^Market^
Philip B. Wershil, memben of .the

.Office;

H. F.

'

Boynfon & Go.

'Mexico'

-1

____—____

Colombia

:

& Finance
Laird'. fiiSSdlV & 'Me-eds, 120 Belgian Congo _i_:
I Companies—:\Valter .fe:f;§eMhiain;' BrOadWdy, NeW'York City, mem¬ Nicaragua
Chile;
J-.. 2
of .jones & Co.
;
/
bers of the New/ York Stock Ex-f
New York 'Bar; Factors

-

'

J, IP1
w'

ft'v

addiiion,;
i-

nance

"

»ti !"•'

1

<

the
Credits
& Fi- Vhango,cannMnced tbat the busi¬
'
v
/
offers l seyerM
»

ness

apd personnel of H: F.

with ..mercantile ton Sc Co.
and^"'retliii-^^ credits1 ahd: colledtions. witb
courses;"dealing

inc.

have been

the; forrrter Tlrhi;;

-

,

India

Factoi s" ait d' Fi nairce S tud y

Hoivh-

merged

ifefet/p

—

_

.

-

_

ll,198i
3,069

2,321

824'

„

_____—_

-——- -——-—- -

Venezuela

1_

(estimated)

Opens a^CCNY
.

c O ur s e




-w

s"

.

'

This was done by
shifting the impact of the subsidy
from the buying price for gold to
the costs of production and tratosf
gold industry.

657

548

586 '

630

562

8331

'593

568

545

552

652 :

883

509

499

418

400

137

632

554

507

437

383

356 ?

343

225

200

210

and

179

231

200

fact that Southern Rhodesia is not

131

173

160

160

170

134

131

100

555

r

-155

875

308

320

,182

,

-

26

343

364

289

187

170

f21

281

175

173

107

264

178

195

142

125

59

58

1,7015 8,497 f 7,393

6,938

120

186

43

'147

-

;

:v

59'

6,940

50

6,937

~

,

domestic

545

IV
t,J,%•

comprehensiye

the

658

- have > joined * Laird;' BissOll- . & Estimated world production 19;2Q0 4l,00() 28,000 2^,000 27,5()0- 27,700
j;i
1'/'}••
■'
'
oh Meeds' Us' general. partners, % af
valuedMillion dollars "Factors
and
Finance
Compa¬ previously^ tepbi*ted ih the
;
(at the present rate of $35 per oz. of fine gold)
Estimated world production
672
1,435
980
945
963
970
nies^; sponsored by. the. National ^Chronicle" of Aug. 19.
.

A-1

subsidize

939

204

^

to

1,644

'

Brazil
New Zealand

Other Countries

desire

208

12

'
_

i

their

obligations to the Fund with their

.

426

173

i-

Peru

■

v

^Division

_

found it possible to reconcile

1947

------------

British West Africa-1

up

was

slight amendment in their propo¬
sals
the. / Canadian
authorities

.

Australia

differential prices for gold
thus contrary to the obli¬
gations undertaken by Canada as
a
member of the Fund.
Dy :a

9

_

i

Laird Bissell

Finance

4

9 .3 /. 4
ment Division, rN.evv Yolk,' State factoring, financing Of accounts 1946
56.9
;
:
4
8
0
I
133
4
10.7
53.7
Banking. Department;; Current In¬ receivable, inventory r loans, im¬ 1947
vestment Problems—Rudolph. Fl port and export finance, and inWeissman, economist' and ;former staiment^ sales. finaheir^g.^ Th^
(1) l%r ton of ore milled. (2) Per oz. of gold worn
special consultant to the Securities course Will be directed, jby Wal¬
Gold-producing
countries
1929 .1940
1944
1945
1946
ter
S, Seidm'ari, partner of Jones
apdiExehahge (Gommifision; .Prin^
' VYeightUn thousand find OZes.
and a Member bf the New
cipies of Investment — Leonard &
York Bar.*
4
'^
^ Union, of South Africa.-— 10,412 14,038 ;12,277 12,214 Il;9l8
FiSch€r[ofMerrhiXyn<mfvP
2,832
2,923 2,697
5,311
Canada
1,928
Fenner & -Beane, and Albert Wr
929
1,625
1,022
United States
6,003
2,208

I Francis Perrotta^; National CredSit

Minister announced

6 ' 9
6

9

88

58.5
-

12 :

:

84

60.0

i—

Understariding of the many" phases 1944
pf v the finonce: burihess^ Tnoiuding i945>-

Ambs,; of the/National City Bank;;
Business Financial Management-^-.

has

11.3

'

>

gold

11.7

.

•

to

7

—•

;

subsidies

The most important of,
been that granted .in

50.7

64.5

,

—

1943

s.

82

veiled

less

producers.

(1)

53.8

58.3

1942'—

fundamental

or

Per ton

(1)

<2)

11.0

&

-Per ton

Per-oz.

'

—

_____

ozs.

•

1940—-——,

program

Million

48,2

1938

Of¬

.

for thevide

a

:

!

1

i

.

aije' OftdUhis; Vrill; fhark the iirstviir^ 1936 1*——-—,
in-, in; the history of any edUeatibiial I937U——

-Baking--.Leonard

jF.^ Howard,

,

vision

-

-

,

.

1

-

—■

r

1"

1

r

1

1.

1

»

ferring part of the costs exceeding
$18 an ounce to the Canadian
Government.

The Government of

Southern

Rhodesia, undeterred by
the fate of the Canadian proposal

a

perhaps

encouraged

direct member of

by the

the Interna¬

tional Monetary Fund, decided re¬

cently to increase the price paid
gold from 172s. 6d. to

for domestic

without, however,
changing the parity of
More
will no
doubt be heard on this from the
Fund in Washington.
Proposals

200s. per ounce,

thereby
their

currency.

r

to

subsidize

gold mittiftg, either

(Continued on page 32)

THE

(912)

16

COMMERCIAL

FINANCIAL

&

CHRONICLE

Thursday, September 2, 1948

LETTER TO THE EDITOR

Canadian

they do so only at the expense
of the majority of the country.
But even they never gain as much

JglTakes Exception to Views on§§
Protective Tariffs

By WILLIAM J. McKAY

Forrest S. Dunbar, Jr. writes, in answer to
article "Can America Prosper Without Foreign

in the Canadian economic scheme.

do not benefit workers.

have

Close observers of the Canadian

appreciated
impedi¬ pects of accelerated action to at¬

long

the fact that the greatest
ment

economic develop¬
Dominion is the high¬

full

to

ment of the

tract new immigrants.
Canada has

one

of the

greatest

ly inadequate population ratio in
relation to the size and growth

assets in the world in her fabulous

potential of the country. With an
area surpassing that of this coun¬
try and an unrivalled wealth of

Laurentian Shield. The Dominion,

2,000,000

square

-

mile

area

of

>

however, will require fresh man¬
power
on
the
largest
possible

Alexander Wilson's

as

a

few.

FORREST S, DUNBAR, JR.

Trade?", that tariffs
with low

August 25, 1948.
23 Onslow Place,

Denies U. S. cannot compete

foreign

as.

lose

benefit of

discoveries which have recently
captured the headlines On the Canadian publicity front; have almost
completely overshadowed a news item of even greater significance
The spectacular mineral and oil

situation

the people on the
consumers.
The
tariff is a perfect example of ex¬
ploitation of the many;; for the
in prof its

whole

Freeport, L. I., N. Y.

wages.

Editor, The Commercial and Financial Chronicle:
Many of the articles in the Thursday edition of the "Chronicle"

COMING

have presented viewpoints and reasoning contrary to my own, but
not until I read Alexander Wilson's article, "Can America Prosper
Without

Foreign Trade?" in the July 29 issue

reply to any of them.
Three

Mr.

times

Wilson

EVENTS

prompted to

I

was

<$>—

'

made

Investment

In

dens to be

placed

on

the

Field

consum¬

of
the
make-believe, ers in order that they survive.
The fact that American indus¬ Sept. 10, 1948 (New York City)
fanciful, disproved advantages of
a tariff on imports.
I have heard tries pay higher wages does not
Security Traders Association of
population presents a challenge possibilities of this area' are be¬ of these advantages before, but mean costs of production are high, New York Summer Outing at
Travers Island.
not only to the Dominion but also
ginning to receive world-wide at¬ only in conneCtidh' with the? mis¬ and, therefore, that our industries
takes we as a nation made in our need protection from countries in
to the world at large.
tention but it will
require the
Sept. 17, 1948 (Chicago, 111.)
which
w&ges are low.
Our high
•onstruction
of
new
highways, economic and political past. These
It is therefore gratifying to note
Municipal Bond Club of Chi¬
ancient fallacies, that tariffs pro¬ wages
result from the greater
that according to the annual esti¬ railroads and towns before vision¬
cago annual field day at Knolltect the wages of our working productivity of our labor.
Labor wood
mate of the Dominion Bureau of ary dreams become concrete re¬
Country Club (cocktails and
alties. When it is recalled, how¬ men and our high living stand¬ costs are calculated not by the dinner at the Kenilworth Club
Statistics that
Canada's popula¬
rate
of
wages paid, but by the
ards, are especially insidious be¬
Sept. 16).
tion as; of June :1st this year at¬ ever, that 70 years ago a country
of a mere 3JA million people ac¬ cause they are a form of wishful amount of work turned out for
tained a total of 12,883,000 and
Sept. 17, 1948 (Philadelphia, Pa.)
the
wages
thinking
with
such
a
pleasing
paid.
If
high
wages
showed a record increase of 301,- complished the epic feat of the
Investment Traders Association
construction of the Canadian Pa¬ sound that in the past have proved mean
high cost of production
000 over the figures of the pre¬
and dinner at
cific Railway, there is no reason convincing to many wage earners which require the protection of annual. election
vious year.
This increase which
Palumbo's
Cafe.
to believe that the Dominion will and many others who had not had tariffs to be maintained, how does

undeveloped natural resources in scale before Canada's great Em¬
a world of growing scarcities, the
pire of the North can be turned
Canada's glaring inadequacy
of to full economic account.
The

mention

the

follows

previous record ad¬
a year ago when
population gain was 275,000

the opportunity to learn of the it happen that we can sell to the
al¬ facts in regard to the protective value of billions of dollars a year
most a complete lack of activity tariff as a national policy.
($4,021,000,000 worth in 1940) to
is a clear indication that the new
in the external section of the bond
It is true that the tariff permits the people of foreign countries?
and more vigorous Dominion im¬
market but there was a moderate¬ the
protected enterpriser to charge Why. with their low wage rates,
migration policy is now bearing
can they not undersell us in every¬
fruit. Up to a few years ago the ly demand for the internals which higher prices than he could other¬
/ •
Canadian immigration laws tend¬ improved slightly in spite of a wise charge, but this does not thing?
vance

the

registered

than encour¬

ed to impede rather

the

age

from

entry

of

abroad

and
it was largely due to the laudable
efforts of the Immigration Divi¬
citizens,

Canadian

would-be

sion of the Canadian Pacific Rail¬

that

way

Dominion

ent

the

population of

reached

the

this

in

During the week there

decline in free funds.
the

Toronto

small
orice

were

of

for the

a

new

further
a

lowly total.
promising

com¬

bull market

golds.

results following a positive

rather

'than a negative approach to the

Stein &

that this greater amount of

mean

in money

narrow

a

There

mencement of

on

traded

within

however

range.

indications

Stocks

exchange

volume

case.

was

that the consumers are
forced to pay if they are to have
a

particular product is going to be

paid

to

It might just

labor.

possibly be needed to

pay

for

as

one

of the other factors of

its pres¬

even

In view of the recent

less successful

be

Company Being

Formed in N. Y,

City

and

the

publicity given
for develop¬
ment of the vast empty spaces of
the,. North American continent/
The international outlook of the
new Canadian Prenuefc, • Mr. St.
Eaurent/ and his ability as a
than his predecessor to the deli¬

Considerations

iri-

yolved in any forecful treatment
of

t h

e

question,

immigration

should further enhance the pros-

(Special

Stein; which has
:

to

Tat "Financial

*

land

the

fact

real

that

they produced less

in

value

goods than they
could produce if employed in ef¬
ficient industries. Yes, the money
wages of the employees in the in¬

industries

are

kept up to standard as a result of

and

conducted

McKin- others

his

own

in¬

John G. Sheldon With

A. E. AMES & CO.
TWO WALL STREET

are

decreased,

Wouldn't it be

•

Television Shares
r

:

where

stead of being

(Special

to

The

CHICAGO,
Sheldon

; i

•

much better to

has

Financial

ILL..

—

become

suit of
ness?

Chronicle)

John

we

-would

ail

(Detroit, Mich.)

Sept. 26-29

Association.

Bankers

American

74th annual convention.

Oct. 11, 1948 (St. Louis, Mo.)
Tentative date for annual elec¬
tion

Security

of

party

Traders

Club of St. Louis.

living -or to - faise the
Chinese laborers; to the English
level.

passing through Chicago on way
to the Convention.

(Dallas, Tex.)
Security Traders Asso¬

Nov. 15-18, 1948

National

England

ciation Convention.

\s

ond

William F. Goulet Is i
*"V

f

t; -is-'-'t

v

v.

r'ii.

commodities and services are ob-r
tained under

difficulties, and the

total- of goods

sum

available; for

the enjoyment of the people of
the country is smaller than other*
wi$e. This ill treatment of all the
citizens

consumers

as

results

in

and plant space

these

penalized

as a re?

to

use

in

industries

which this nation has

in

a compara¬

.advantage, and in which the

supply is

Goulet

CWilliaml F.
offices

25

at

Broad

is opening
Streets New

York

City, to engage in the se¬
curities business.
Mr. Goulet was

formerly
Stein.

partner in Goulet. &
"
\

a

v'

'

•'

.

Joins Calvin Bullock
.Herbert A*.Birks,;f or merly
Assistant Secretary of the North
British and Mercantile Insurance

Co., ; is
firm

associated with the
Caivin Bullock, 1 Wall

now

of

York

New

Street,

City,

an

as

Account Executive.

„

Herrick, Waddell Co.

With

The

(Special: to

Financial' Chronicle >

//

FLA. — Saverio XtSalario has joined the staff ;o£
Herrick, - Waddell & Reed, Inc.:
TAMPA,

at present, used in

inefficient industries^ could

put

Opening Own Offices;

With Clement A. Evans Co.
(Special

to

The

Financial

Chronicle)'

SAVANNAH, GA.—William-A.
Winburn
Evans

decidedly less than the; tional

.

&

III

is with

Co.,

Clement: Au,

In<&; Liberty;;Na—

Bank Building.

-

•

•

their lack of productive? demand.„

This

same

-waste occurs in

G. all the resources, materials,

equips

associated

Mr. .Wilson's

statement,

in

re¬

gard to those who are responsible

Joins E. D. Jones Staff
(Special

for the ownership

and successful

to The

Financial

Chronicle)

ment and plant space which are
Television Shares Manage-!
used in these industries which are
ment Corp., 135 South La Salle
Street.
Mr. Sheldon was formerly not efficient enough to stand corri-

j beFsibrings^f or th/thq^ly/^oUFf;

"BELLEVILLE, ILL.—George A.
Brechnitz, Jr., has joined the staff
of Edward P/ Jones;& Co^oi St*

with Vance, Sander$ & Co.

'wiio

■Louis,

| with




stand¬

ard; of

gaiafronvtheir, productiveness in¬ tive

,

t

with breakfast at Hotel

Savery. |

are

protection of the tariff, but gains for some enterprisers but
Such a period of
the * real value jot everyone else's not for others.
as
this ; provides the
money wages decreases because of shortages
L. the higher prices they are forced means of curing with the least

industries

NY-1-104^

conditions

down to Chinese wages and

put this labor tor work in efficient be

WORTH 4-2400

labor

exactly reversed, without any no¬
ticeable drag of English labor

the

vestment business in St. Louis.

NEW YORK 5, N. Y.

these

where

\yith,four present shortage; of la¬
';V-ift0jnfe^vwages^
Iq maiiy' instances; the bor, capital goods, and plant space,

efficient protected

Chronicle)

of Gatch Bros., Jordan
ney

'

cannot

ST. < LOUIS, : MO.—Pierre
Papin has become associated with to
pay for the goods produced in possible, hardship ;tp those in the
Merrill Lynch, Pierce, Fenner &
the
protected industries/ Some protected industries these wastes
Beane, 411 North Seventh Street. workers are
enabled to receive of- this country's agents of produc¬
Mr. Papin was formerly an asso¬
All personnel, investments,
the standard-money wage, but in tion.
ciate.; of Wm. <F. Dowdall & Co.
Prior thereto he was an officer doing so the real wages of all Managerial
abilities, machinery,

CANADIAN STOCKS

i-'A

Americans

.

Papin Joins
Merrill Lynch Firm

CORPORATION

INCORPORATED

that

compete

received by labor has dou¬ an excellent time is provided to
bled.since 1939, but that doesn't rid ourselves iof these industries
consumers - have
jnean that- these workers can bu$r the j American
twice as much goods how as they been penalized to support all these
were able to buy in 1939.
A sim¬ years? These productive resources
Irving Stein
ilar situatioanccurs as a result of have been > diverted" from indus-f
protective tariffs. Workers in pro¬ tries in > which ^ theywould be
York City. Principals of the new
tected industries receive wages up
especially productive to other lines
firm
are
Irving Stein and H.
which
their
to the standard paid labor in sim¬ in
employment is
Landau Stein.
Mr. Irving Stein
ilar types of employment despite relatively ineffective. The desired
was
previously a partner in the

MUNICIPAL

;

fact

dent

rion Club,

money

Pierre

PROVINCIAL

statement, "Every¬
thing being equal, it is a self-evi¬

will not be higher than those paid

wages.

been dissolved.

GOVERNMENT

Wilson's

Mr.

with the low foreign
wages and the low foreign stand¬
ards of living," how is it that Eng¬

fayeen

firm of Goulet &

CANADIAN B9NDS

to
completely
convince all of the absurdity of

experience

Iowa Investment Bankers Asso¬

ciation annual field day at Hype¬

_

,

neate Apolitical

tical

Sept. 23, 1948 (Des Moines, Iowa)

ordinarily sec¬ Dec.
5-10, 1948 (Hollywood, FlaJ
only to the United States in
Investment Bankers Association
both
tariff./;• ;.
•
respects under a
system 1948
■
./:;
convention at the Hollywood
been Beach Hotel.
The present wage and cost of which Until ^recently has
trade..
living situation is a perfect ex¬
Does it not seem reasonable that
ample of' the great dbferenc# be?

scope

French-^Canadian to pay less heed

much theory and not enough prac¬

20,

Charles

with, Jhigh wage rates and
Nov. 13,1^48 (Chicago, HI.)
to workers in unprotected indus¬ standard of living engaged in free
Bond Traders Club of Chicago
tries. The relatively high level of trade for many years with China
the
Luncheon for members of NSTA

growing

ip the obvious

has been too

foregoing

production.
Wages in general are not raised
by the tariff, and the wages paid
for labor in protected industries

problem the Cana¬
Announcement is made of
dian authorities should now be formation of Stein & Co. with wages in our country depends
encouraged to make further con¬ offices at 27 William Street, New upon the relatively high effective¬
structive efforts.
At the present
ness; or productivity of labor. The
most probable effect of the tariff
time this task is greatly simplified
on
wages is to reduce the real
in view of the current urge to
wages of all by causing the prices
^migrate on the part of large
of
numbers of'the dissatisfied peo¬
many commodities to be higher
than they would be without a
ples of various European countries

immigration

the

If

1948 (New York City)
Hayden Memorial Tro¬
phy Gold Tournament at Baltusrol
Golf Club, Springfield, N. J.
Sept.

petition and

require .tariff-;bur-

operation of

gain as

a

an

industry or busi-

resplf of tariffs, and

Volume 168

Number 4730

THE

,

COMMERCIAL ■ ;& 'FINANCIAL

CHRONICLE

(913)

17

vv.

Heavy Demand for Rubber Producls: Lifehfield
Chairman

■■

of

Goodyear lire and Rubber Co.

donfiouatlon ofv

sees

*

planning has. affected British life
industry.
He says: "No pen
could fully describe and no mind
could ^wholly grasp the vast mesh
of controls lrt Great Britain that
now "circumscribe everyday action.

Engineering Professor Designs Machine to

and

Register Economic Forces

.

high demand for tires
After three years
mendbus replacement

-

as

well

other rubber

as

products.

C

.

of-peacetime production during wWchi a trobacklog has largely - been* filledv the demand

.for all rubber products still continues at
high levels compared to the

immediate prewar years, P.
year
Tire
&

-

Rubber
„pany,

ed

W. Litchfield, Chairman of The Good-

report¬

During the past .three yearsr
approximately 250! million- tires

Aug.

for motor vehicles haye beeil pro*

on

f i

-

*

1 d

e

•

duced

by4he American rubber irw
dustry compared wilfi 180 million
three-year period just prior
to the war, an increase of 45%. '

t i-

<? s

mated that the

in the

repl acement
td emand for

Mr.

tires

.1949

ly

in

would

r'

this

s

estl-

„.m a t e d

out¬

e a

and

W.

P.

truck

<1.

;

tires

quarter, is for some 86,^
tires against last year's

60,000,OOfjf and' 63;,0p0;p00
the pre-war

estimates

for

years.

1949,

ac~

■cording to Goodyear's chief ex¬
ecutive,
place
the
demand
at
roughly 81,000,000 tires,; barring
any serious readjustments of the
current

.

In

this

in

the

tions to control

delivery notes."

or

Many

/;/

,

;

^

J

f

V-*"1*

*

J-

'

*'■>

;

things, invariably ends by controlling

The bank contends, as a result of its

champions of

subjected:

Based

;

upon

a

study, of the British ex¬
perience, I ProfessQr. jlewkes came
to

the

conclusion

that the plan¬
species %: > suffer from
a : turbulent; craving
for • a hew
order of things.
A pathological

ners

as. a

.

fortunately;

v''-

-

*i

wand

1

racy and private enterprise to be
alert to the dangers that confront

—

American private

business enterprise has become the "arsenal of

by

on

the

are

groups, women's clubs and
like in the same way he ap¬

plies it for engineering classes at
the college.
-•
t-v;
.tiff
The instrument is composed oJ
a

balance held

slogans which furnish the keynote

a

knife e<jge by a counterbalance
The
face
of
the

or

constant' propaganda

a

On the contrary,

rage.

nomic

progress

from

the

bar¬

balance

real eco¬
largely

of

capital

points

in tools and equipment
has- increased* productivity

this

at

over

average rate

an

A

country

the

one

resenting

the

the dollar.

decades

points

of around 3%

in

engulfed

are

carries

on

two-way

a

on

to

changing

On

the

scale

a

Located

,

two

glass
the

of

it
varia¬

The

:

as

in

work

effect
Prof.

in

of

mar¬

is ' extremely*-

visual aid—it dem¬

a

the

forces

at

our

economy and their
the
business
cycle.

on

for illustrating

economic

arrow

are

(2)

The

one

for

(1)

ways:

classroom

red

the

on

Gregory utilizes the machine

two

general

of

decrease

or

Econometer

valuable

ex¬

outer

containers.
amounts

increase

-

organic fashion,

price scale is filled with

specified

ket.

economic

;

the

tremities of the double

near

(b)

purchasing medium

interrelated

value

showing

and

onstrates, in

other side,

.

near

These rates of flow

arc.

analogous to: (a) increase of
decrease of goods and services;

arrow

scale rep¬

a

the

arrow

The

-

side to

tion of prices.

study

institutions

equilibrium

about three feet long.

savings
which
in

in

arrangement.

comes

investment

of government plan¬
us
and assiduously to work
to- democracy," and since the close
ning down through the ages shows
ward solving more of our
prob- of the war has fed the hungry of that one
step leads to another un¬
lems at the local level."
j the
world and has helped the til
finally the entire economy and
According to the article:
! stricken nations to their feet.
In all
'
Jail the annals of history there is
Master Planning by. Government 1
no 0ther system which can begin
Planning by government is not to compare with our own from the

merce

coining sugar-coated

for

men. /

rr-i

and calls for

progress * cannot
be
by waving a; magic

accelerated

analysis, "it be¬

:

democ-2

birder' work

an
almost" oriental patience" from
the impoverished consumer;". Un¬

light of recent proposals and developments in this and

other countries.

been

careful

tion- for

>

The August issue of the "New England Letter,?' published
by the
First National Bank of Boston, discusses master planning
by Govern¬

the

.

invoice

,

First National 3ank of Boston quotes recent study of English
economist which points out modern planning, even with noble inten-

hooves

of 46 forms, requiring 42 signa¬
tures, not including the customer's

v

"'I

the

extraordinarily fine
; and: hin-r
drances.;. that surround us." Foil
example, "The dispatch of a small
shipment of six drums of lubri¬
cating! oil involves the filling in
restraints

of

.

inflationary spiral.

ment in

of the

network

.

Holds Government Planning Leads to v
Totalitarianism
_

cycle.

Everybody talks about the high cost of living but nobody does
anything about it—how often you hear that statement in these days

some

non-transportation dread of
becoming old-fashioned of soaring prices.; Prof, Carl E. Gregory, New York
University. Gol«
year and approximate¬
lead§ them to press for Utopias at lege b$ Engineering, says he isi dping something about it
ly the same inT949^ith total'con*
almost any. cost.
He designed what he calls an$>~
They express
sumption in the United States
their hopes for the future in or- ECONOMETER and student
engi¬ suspension. Specially constructed
running aroundl,0Q0,000.tohs.:; 1
nate^imagefy,. siich- as !'the. wave neers at the college built it—all elongated funnels compensate for.
: The
high level of; demand for
for the purpose of
-'shaped
helping people variations in position and catch
tires and other rubber products
to come*' .'social engineering'."
understand what factors make our the
was
attributed by Mr. Litchfield
flow; from above.
v.!
The four glass containers, two
economy act the way it does and
to the increased number of .cars; JT^
as well as in.this, country and else¬ to get the answers to some
of our floating and two stationary, have;
trucks and tractors in-operation,
where are impatient to cure eco¬ current problems.
'
*
to a continued unsatisfied demand
petcocks ;by which the flow: is
nomic:
ills.
and
relieve
The
Econometer
is
a
poverty.
for
all
hydro¬ controlled.
By this means,, it is
types 'of
new j motor
As Professor Jewkes says: ".
static device that presents a visual possible to demonstrate change in
vehicles, to increased mileages
until he gets into, power the plan¬ picture to the observer
the
forces encountered in a given
of gen¬
driven yearly and to sustained
ner J Co mp la i
hsj; that1 labor i s eral economic forces that effect situation.
Liquid -flow can,. be
high levels of purchasing power
sweated
and
the
consumer under- the business cycle.
and business activity.
Prof.
controlled,
into or out of.. the
Gregory
:
,•
supplied; after he gets into power plans
to
use
the
machine; for floating glass* containers no. mat-*>
he engages11 in constant exhorta¬ lectures before Chamber of Com¬ ter;
what their position may l.be

all-time record of 100,000,000 and

.Current

to provide

cases

this

group

The Outlook for totaLtixe proiduction for 1948, even. with an
expected seasonal decline in, -t]he

between

materials.
.

sumed

J

in the best of

covering

sucj*

rubber; films

approximately 30% • of all
rubber, both natural and syn¬
thetic, is consumed: ' Over 300,000 tons of rubber should be con¬

-

bus.

and

"

000,000

; rubber,

new

Litchfield

;J'

v

would equal the 1948 production
"of approximately .T^OQjOOQ. I

fourth

attention

developments

new

field:

the re¬
placement de-;
;

the

foamed

and

; that

for

called

news¬

the

as j

put of 40,5uU,"000 tires and

.mand

Litchfield

of

heavy continuing demand other examples of similar nature
non-,transportation group; are given to show the incredible
of rubber products such as me¬
degree of regulation to which the
chanical goods, heels and, soles,
economyr of
Great Britain has

in

\e xceed

sufficient

up

reading

few months throws

a

to the

x: passenger:
car

casual

a

notion

Com-

25. Mr. Litch-;

~

But

papers over

Carl E. Gregory of New-York
University has ait "Econometer" which
visualizes interrelated, economic forces at work on the business

and

theory in the
public lectures;
work on prob¬

at

statistical

lems concerned with

our

present-1

day economy:
The Econometer

liquid

was

constructed

.

nl

a

_

venture.

new

extend

back

reached

Ages

.

Its

into

roots, which

dim

when

the

rigid

and

providing

of

living

antiquity, standards and individual freedom,

full bloom in the Middle

regimentation

standpoint

system

of

widespread

j

.

The

past,

planners concede that
is

record

contend that

unsurpassed,

we

divide

not

until

the

wealth

the

...

to

have

veniences

f It

was

comforts and

than

of the Middle
.

greater variety of

a

more

had

the

con¬

royalty

Ages.

fortunate that this

try could start with

a

coun¬

clean slate

without the inherited prejudices,
hatreds, and frustrations that pre¬
vailed

in

all

prove and expand our productive
over the next few; years
But this is only the beginning

facilities
The

parts

of

pressed

out, with good will and noble
to control things-and

intentions,

invariably ends
men."

energy

advances will

constantly

open up

opportunities for expan¬
In order to fulfill these po¬

the

■

■-

up

by controlling

-

futile, however, merely to

intelligently

the conditions
for planning.
years,
practically all
groups have turned to Washington
for handouts or special privileges.
This m turn has led; to the mush¬
room
growth of a bureaucracy
that

pave

with

the

way

the

Over

that has aggressively extended
power

it*

ever-widening

an

over

sphere until it now includes all
segments of American life. Unless
this vicious trek to Washington is

vided

the

tunities

settlers

incentives

that

the planners will gain
objectives by default.
P

stopped,
their

of: democracy

to

and

the

personal, initiative,
red

tape,

while

endless

regulations, and direc¬
confusion but

confront

us

to::work: toward
our

private enter¬
the dangers
and assiduously

solving

more:

of

problems at the local level.

bis 40th anniversary
the

tives not only cause

of

uals.

also interfere with production.

change,

tem,

this

country

has

sys¬

enjoyed

his

excellent

book,

"Ordeal

In

by

San

Douglas

Chairman of

the

though

With V set of

population constitutes

7%,. of

,

the

world's




total,

of

the

University of Manchester.

England, reveals how. government

which

of

is

purchasing

-

active,

medium

the

on

market

during a particular period. Grav¬
ity keeps the glass containers per¬

pendicular

With

their

on

v

knife-edge

Engineering.
Under
Prof.'
Gregory's guidance, this work had
marked influence

a

enthusiasm

of

on the degree
understanding

and

which student engineers displayed •
toward what
they formerly re-;

ferred
Social

,-to as "just
Studies."

a

course

1b

Simonds Named IBA

Stewart,

Scanlon & Co.
(Special

SAN

;

R.

to

The

Moore

have"

Financial

Gov. by Mich.

Chronicle)

FRANCISCO, CAL.—John

been

E. -Morin

Charles

and

added

to

the

staff,of

Stewart, Scanlon & Co., 216 Mont¬
San
Mr.

Francisco
-

members

Street,

gomery

Moore

of

Group

DETROIT, MICH.
of

Simortds
Co.

has

tional

been

Ralph W. "
Simonds &;

—

Baker,
named

toi. the

of Governors

Board

Na-

of

the

the

Stock Exchange.
previously with
Talbot and First
r

was

Hantnaford

&

California Co.

With Grimm & Co.
(Special

I

member

Stock

Ex¬

bags

presented

as a

to

The

Financial

Chronicle)

JACKSONVILLE, FLA.—Theo¬

dore. R.

Biggs has become asso¬
ciated with the staff of Grimm &
He

was

formerly manager of

thp trading department for South¬
eastern Securities Corp.

With R. F.
(Special

to

The

J.

Thibodeau

Griggs Co.

Financial

WATERBURY,
is

.Ralph

Chronicle)

Mr.

Mr.

of

Gov¬

Alanson

is

Joins A. M. Kidder Staff

rawhide; traveling

gift of the membership.

to

The

SARASOTA,
Bateson is
& Co.,

now

financial

'

Simonds

Simonds will

Chronicle) ;

FLA.—Philip

B.

with A. M. Kidder

203 South Palm Avenue.

a

troit

for

three

December.

He
De¬

Stock

ing the
the

serve

starting in

former President of the

years

Cr.' Atkinson*
Board

W.

CONN. —Leon Investment Bankers Association of
with The R. F. America by the Michigan Group.

Griggs Co., 35 Leavenworth St.

(Special

ernors,

our

as a

Francisco

tremendous- economic growth. Al-» Planning," Professor John Jewkes,
but

of

amount

Co.

great creative powers of individ¬

|"j Under the American

the dollar value scale and is
,

to

.

oppor¬

of

other! container

filled with measured quantities of
blue liquid—this
represents the

and

alert

be

came

have; released

students from several departments1
New York University College

is

The

market.
near

through the cooperative efforts of-

therefore behooves the champmns

old tentialities, it is highly essential
here that private enterprise be given tfew EjAfer»«on Honored
to escape from the regimentation
SAN
every opportunity to play a dy.FRANCISCO,
CALIF.—
&hd : tyrannies of Europe,, they pamic, role unhindered by undue Trading on the San Francisco
established a new order that cen¬
governmental interference. Gov¬ Stock Exchange was suspended for
tered around political and econ¬ ernment
regimentation under a a brief period Aug. 26 at 1:45 p.m.
omic freedom, and this has pro¬ planned economy stifles or destroys
to honor Bertram E. Alan son on

World: When

representing the amount of goods
and
services being sold on the

denounce planners unless we deal

application of prise
and other, scieptifiQ that

further
sion."

-v

/

It is

industrial,

atomic

Professor
Jewkes:
planning movement

by

sets

emergence of cap¬ annual message to Congress, IprpSf
the so-called common ident Truman stated:. "We are tor
than got his first real chance. It
day far short of the industrial
Was this system that emancipated
capacity w.e need for a growing
him from slavery and extreme future". At least
$50 billion should
drudgery and made it possible for be invested by industry to im¬

him

many are directed by a few who
rule with an iron hand as ex¬

but

have reached the

italism that

food and

fPrm- of -totalitarianism: un¬
the activities of the

which

"The modern

by taking
from the, "haves" and giving to
destitution.
There is no record
the "have nots.". But the assump¬
tjiat planning by government has tion that this country is. overbuilt
ever
raised the living standards rests oh,false
premises as is evi¬
or provided freedom to.
any peo¬ denced, for example, by the short¬
ple. As a matter of fact, historical age in this
country of many mil¬
evidence clearly shows; that it was lions of homes and
car?,
In his
up

der

our

corruption led to chaos and dis¬ stage .of- economic maturity
f and
integration.
For many centuries hence must, consolidate our gains
China and India have been regi¬ under government direction and

mented* but their people have al¬
ways ^ been on the borderline of

some5

War

war

Exchange, and dur¬
was co-chairman of

Finance

Committee

for

Michigan during eight war-bond
drives.J:
~
\
.

-

.

(914)

18

THE

_!

J-d

*

it

,

m

COMMERCIAL

&

FINANCIAL" CHRONICLE

Thursday, September 2, 1948

i_

costs ought to be met out of

Questions. Business Profits Coma Ftona
Rising Inventory Values a

Securities Salesman's Corner

so that the enter¬
prise might enter the new period
without prejudice.
An enterprise
is

Prof. Charles A. Bliss of Harvard Business School holds increase
By JOHN DUTTON

in unit

Several weeks ago a salesman whom we know made an evening
call upon a new prospect.
He had no advance information regard¬

•

v;

■

He rang the doorbell.
The husband came to the door. He told
name and the name of his firm and also related that

would

like

to

them

tell

about the securities in which they had

an interest.
But the husband gave
Then he smiled and said: "It must have been my

expressed
ad."

that

From here

his

him a blank look.
wife who answered

It

was

on

the interview developed to the point where the husband

wife.

He

invited

the

salesman

to

come

corporations

ican

the husband his
he

only add to profits when selling prices
raised coincidently with cost rises.

are

because

temporary

or

they
"paper" inventory

current expense produces results
ixu what the salesman had to say. Then he called
that are both haphazard and il¬
joined the discussion. Up to this point the sales¬
logical.
The same qualification
man was groping in the dark.
Finally the wife remarked: "Well, I
applies
to
the
last-in-first-out
just can't get excited about buying anything now.
This market is
method
of
inventory
in the doldrums. I don't want to wait the rest of my life for my stocks (LIFO;
valuation.
to move a few points.
Income! Who wants income?
Not me anyway;
"The question of 'reality' dis¬
Sure we've got some stocks and we get some dividends, but that's
alright for him (pointing to the husband).
But what I want is cussed in this article," Mr. Bliss
action."
From here on the conversation was directed along the lines points out, "is not whether in¬
of establishing confidence.
No effort was made to try and do busi¬ ventory profits are paper profits
ness
during this first interview.
The salesman left after - having and in the long run are offset by
made an excellent first impressiohr and' after promising to secure in¬ inventory losses but whether in¬
formation on two securities which the husband owned, also some data ventory profits, exist -at all!
We
about a new issue in which the wife was interested.
He later mailed shall argue that in many, areas of
reports and. a prospectus on the new issue.
Ten days went by and business profits do not arise co¬

tion

a

has

company

at

is

a

poor, and where there
natural lag in the
reporting of

pricing

•

is the

incident with

what

fooling around with such an account.
The husband was
undoubtedly a -very small investor, primarily, interested in short
profit,' big name/ listed. issues. • Certainly his business could not be
profitable to a salesman interested in selling unlisted securities;
On
this point we would agree.
But still a call was made which took up
an entire evening of this, salesman's time.
In addition his firm has
spent time and mon?y in -sending* out information, follow up letters,
etc.
Was there not some point Of attack where a sale might be made
and

-

use

future business obtained?

some

In

n)

•

opinion these prospects should not be classified as un¬
promising until an attempt is made to sell some speculative security
to the little women of the family.
A foundation has been laid by this
salesman.
In his first call and by his "follow up" mailings he has
paved the way for an offering of a security that has "price apprecia¬
tion possibilities."
This type of business is certainly not the "bread
and butter'? of *the securities business, but, if yoii are'alert to such
opportunities you will be able to do some business along speculative
lines with people who are mainly interested in taking a flyer.
The
difference between a "salesman who is making a good living out of
this business today and those who are not, is that the former has the
ability to size up his prospects and sell them what they want.
Incidentally, there are a large percentage of security buyers
today who don't give a tinker's hoot about safety of principal, income,
or marketability.
All they want is someone to come around and tell
them what stocks to buy FOR A PROFIT. If you don't do business
our

with them

other broker will.

some

dealers try to convert them into

If all the brokers and investment

becoming investors they will politely

take their money out to the racetrack, the dice games, or the numbers

pools, and you can preach investment to them until you are blue in
the face but it won't change this natural gambling instinct which all
of us have to a greater or lesser degree.
In this case if Mrs.
Prospect
her money on some stock that she thinks will give her
profitable turn THAT IS EXACTLY WHAT YOU SHOULD HELP

wants to put
a

HER TO
could

ACCOMPLISH.

do under the

There

is

nothing else that

any

salesman

circumstances.

increases in dollar

Exchange
Weekly Firm Changes
The

John Wolforth With

York Stock

new

has announced the

:

changes:
Wilson P.

•

Exchange
following firm

-'

•

'

•,

.

■

Merritt retired

-

from

partnership in Halladay & Co.

on

Aug. 31.

Prince and Byrne
John H. Wolforth has joined the
trading department of Prince &
Byrne, 67 Wall-Street, New York
City.
In the past Mr. Wolforth
was

Scheer & Co. dissolved

on

Aug.

in

active

New

in

Joseph P. Fell, limited partner
Goodbody & Co., died on Aug.

21.

>

Interest in the firm of the late
E.
Kirby
Newburger,
limited
partner of Kohlmeyer, Newburger
& Co., ceased on Aug. 27.

Interest

of

Charles Knies
ceased

as

of

the

late

in Vilas

Arthur

&

Aug. 27.

Hickey

as

York

31.

an

individual dealer

City,

-

j

R. H. Johnson Adds to Staff
R. H. Johnson &

Co., 64 Wall

Street, New York City, announce
the addition to their sales staff of
Donald W. Baker, Charles S. An¬

derson, Jr., and Thomas D. Brown
in the New York
office; David C.
Wheeler in the
Manchester, N. H.,
office, and Seymour T. Pearlman
Albany, N. Y., office.

in the

partment of Commerce.
Of this
total almost $6 billion are de¬
scribed as inventory profit
shown as an adjustment to total
.

"/

QUOTATION BUREAU, Inc.
Established 1913

i

46 Front

'

since




gan Francisco

.

presumably, it

solely

arose

from the more^pr-less automatic
effect of the price level rather
than from regular

charge for the use
Certainly, if there
is .no equivalent, automatic in¬
ventory profit, the profit estimate

for the following years of inflated

prices

in

with

(i.e.,

years

shrunken

with

dollar

counters)
should bear
equally the burden of this incre¬
ment of frozen capital, and not

but

sales¬ the-single
year in which the cap¬
ital drain took place.

earnest consideration of the

impact

the market and on com¬
petitors—and the underlying as¬
on

sumption for the creation

in¬

of

.

.,

"If.transfers of computed profit
from one year to another iare

socially desirably onthe grounds

ventory profits is seriously weak¬

operating

mar¬

fect that not until the

new costs
estimates.
They must learn that
begin to show up in the current 'annual profits' are additions to at
reporting will changes in price be fund which maintains the enter¬
made.
Any idea that inventory prise through one set of condi¬
profit, or inventory loss for that tions to another, with the sizable
matter,
is
the
neat
automatic errors in the estimates of the in¬
event that follows exactly upon
crements tending to cancel out in
the
change
in
inventory
unit the aggregate.

valuations

is

or

the

unwelcome

"What better way would there
be to recognize this situation than
to emphasize totals of profits for

gins,

its subtraction from total but inevitable progeny of the
profits would provide the most accountants' method of measuring
appropriate measure of profits for cost of goods sold is clearly with¬
the year.

profit adjustment of this
magnitude
cannot
be
accepted
or
dismissed
without
scrutiny.
Whether or not such an adjust¬
ment of profits is a gross overestimation
(as is contended in
this

periods

longer than a year—say,
five-year moving aver¬
ages?
Or, in terms of tax law,
to approve carrying losses for¬
ward for an equally subtsantial
period?
Would it not be better

out foundation.

"A

article), turns,.,

on

two

ques¬

(1) the, reaj.-nature pf..in¬
ventory profits, , with particular

tions:

attention to

their origin,

the

circumstances
of
which
determine

(2)

and

practical

businesses

actually

are

Professor Bliss contends that

an

increase in unit inventory values
carl

only

the

extent

profits when
management deliberately marks
up selling prices coincident with
cost rises.
"As we have seen," he
goes on,
"the important: test: of
the reality of inventory profits is
add

to

to

which

a

product is

marked up in price so that exist¬

"Is this

no

to

more

than

a

matter

of

semantics, of definition of in¬
ventory
profit?
Perhaps,
one
might say, there is no extra profit
on
sale of current inventory, but
surely there is the added cost of
carrying inventory as a result of
the higher price level:
And if our
reported prdfit is not adjusted for
a transient, temporary 'inventory
profit,' then should it not be ad¬
justed for
the unrecorded
in¬
fluence of higher inventory car¬
rying costs? ...
"In

any

of

inflation

need

for addi¬

period

to

use

get equity and balance in this
fashion
than
to
attempt

direct

elaborate

inventory valuation

schemes?"

Winners Announced in

Curb Golf Tournament

Joseph F. Reilly won his second
leg on the New York Curb Ex¬
Wage
change Five and Twenty Club
payments are larger and demand
trophy with his low gross score
larger amounts of cash; materials of 78 at the annual
gold tourna¬
purchased and accounts receivable ment of the club held at the Montinvolve larger sums for the same clair
Golf Club in Montclair, N. J.
physical volume of activity.
Approximately 170 members and'
businessmen

find

tional^ working

More

capital.

capital is necessary to keep

guests of the New York Curb Ex¬

inventory of a specified size change were
present.
ing inventory can be sold at a during the period of higher prices.
Runner-up for the trophy with
higher price than heretofore. Only The dollar counters with which
second low gross was Lincoln O.
in this way can a profit be made the
economy
op era t e s have
Robertshaw with an 80.
Herbert
on inventory; for unless the addi¬
shrunk in size.
Tully took low net prize with an
tional markup i§ made, increased
"What all this means in the first
85-15-70.
Tied for second low
price levels do not mean increased instance is that business finds, it
net
were
Leonard
Greene ahd k
profit but only the freezing of
necessary to shift the nature of Judson Streicher with net
71'si
additional working capital into in¬
its assets from cash to other assets
Donald Totten won the. award
ventory of higher per unit value. such as receivables or inventories.
Accordingly the existence of in¬ The higher unit inventories dis¬ for driving nearest the flag, plac¬
ventory profits turns on a ques¬ cussed earlier call for the freez¬ ing his tee shot within nine, jfeet].
tion of fact as to business prac¬
of the pin on the 7th hole of the '
ing—for the duration of, the ad¬
fourth nine.
tice: Are prices immediately sen¬
John Conroy, Gilli-C
vanced; prices — of
additional
sitive to changes in cost?
gan, Will & Co., captured:tjifelow,
working capital into the inventory
.

an

.

And this, of course, is
situations account.
vary, company to company and true whether or not the inventory
What the use
period - to period.
One executive is valued at Lifo.
reports that in his industry each of Lifo does do, of course, is to
company refrains from passing on ease the working capital situa¬
increased costs, on existing and tion by postponing a portion of
on

new

times

as

stock

starts

'

the

inventory, until such

stock

falls

into

low

sales.

or

new

If, how¬

ever, some competitor, subject to

the

Street, New York 4, N. Yl

Chicago

.

profits with the implication that,

even

NATIONAL

meetings

an¬

service

.

:

that

'

.

For 35 Years

continuous

acquiring

that
greater
economic
stability
of inventory and that ened. j - V*
would result, then the approaeb
therefore,
never
having been : "Changes in cost do
have, their might better be direct thai*
created, 'inventory' profits are in effect on
selling price, but the oblique.
What is needed is bet¬
large, part a misnomer and non¬ point ,is that
they, do so in no ter understanding of the nature
existent. ;v';"\vj
v
ordered
fashion.
Som e
cost of the profit estimate and the
\ V"The estimated magnitude of so- changes may be anticipated, some
treacherous assumptions that are
called inventory profits is most delayed, some offset
by opposing made in order to get estimates
substantial.
Total profits in 1947 economies; for some the
recovery for the short run.
Management,
were $17 billion (after taxes) ac¬
through selling
price
may
be labor and government must learn
cording to estimates of the De-' tardy, which would mean in ef¬ not to be
trapped by short-period

"Undoubtedly

Over-ths-CounteF Quotation Services

nual

ceremonial-—new

valuation

whether such profits
made or not."

New York Stock

and

catalogues,
men,

not

are

occasional
■

changes

of

capital amount, but only the

seem far from correct to
the prompt adjustment of
price to cost. Couple this indeterminatedness with the fact that in

the

year's operations, but

cost

of? that capital.*,

presume

industries

one

the

additional capital. In other words,
what is involved is not the entire

operating effects of the chang¬

many-

this

only

it would

,

froni his new^prospects. v
"•
case where the average salesman would say

of

disposal is

ing mix of products and of the
changing levels of factor prices,

a

after such costs have been met.

its

the

no more

vival costs are appropriate costs
against the current period, andf
profit should be reckoned only

where, the cost informa¬

that

became? interested!

Now here is

Accordingly,

the needed capital to be taken out

"But

An important implication
of his argument is that the use of
replacement costs in estimating

his wife and she

he heard

continuous.

"The situation with respect to
inventory,
however,
is
not
so
simply defended.
What is neces¬
sary to i'inance the added working
greatly seriously the relative advantages
capital is not the full amount of
include of such action.

profits.

in.

expected to terminate, but

be

the argument would run, its sur¬

can

are

overstated

not

to.

Business profits have not been inflated
by rising inventory val¬
ues, says Professor Charles A. Bliss of the Harvard Business School.
In an article entitled "The
Reality of Inventory Profits" in the Sep¬
tember issue of the "Harvard Business
Review" he attacks the posi¬
tion of those who claim that the<S>——
*
t
reported profit figures of Amer- promptly or at least to consider

ing the people upon whom he was making his call.
They had an¬
swered a newspaper advertisement and requested information re¬
garding the securities advertised.
His firm had mailed reports and a
"thank you" letter to the prospect.
The following circumstances took

place:

inventory values

cur-

jr&ijit operations

„

ical

same

panies

tax

burden,

and

this

major reason forv its use.
"If one were to say

.

is
.

that it

earlier

and #is

led

price advance, all

.

was

the responsibility of management

can

to that

com¬

be expected to follow

aii

enterprise be maintained

from one period to
one

These

others

prizes

were

and

numerous

awarded at- a dinner

in

the
evening
by
Mortimer.
Landsberg, President of the Curb

Five and

Twenty Club.

Among those present at the out-* •?
ing
were
Edmond
Hanrahan,
■

a

forces, reaches the crit¬ and the community to make sure

point

make the

the

prize for guests.

gross

the next, then

might argue that replacement

Chairman

of

the

Securities

and

Exchange

Commission,
Francis
Truslow, President; of .the
Curb Exchange, and Edward C.
Werle, Chairman of the Curb
Adams

Board
stein

of

Governors.
in

Jack

Fein-

charge of tournament
arrangements,
;
was

i

Volume

168

Number 4730

THE

COMMERCIAL

Mortgage Debt Rose Sharply inl 947

&

FINANCIAL

CHRONICLE

Russell Oldermas Is

John C. Thompson, President of the Mortgage Bankers
Association,

reports results of survey, showing/ a gain of 27%' in mortgage
financing in 1947 over previous year. Discloses private lenders now
hold 94% of all urban and farm
mortgages.

How Can It Be?

With McDonald i So.
CLEVELAND, OHIO
J.

Olderman

has

—

Russell

become

associ¬

ated with McDonald &

America
made

Co., Union

grasp of the situation and of

"In

29.
in¬

crease

in

banks

declined

year

be

antic i-

C.

Thompson

annual
made showing
U. S. mortgage debt.
only

"Commercial

banks

-

volume

adding
of

total

supplied

of

$1,800,000,000,

25%.

Life

an

insurance

companies expanded their mort¬
gage portfolios by some $1,400,000,000 or 20%.
Mutual savings
banks increased their holdings by

approximately $404,000,000
most 10%.

000,000

or

al¬

Fraternal societies and

associations

added

6.5%

or

about

$250,-

than

more

1946.

The

gain of all private investors
$7,282,803,507 or almost 77%
the total mortgage
debt in¬

was

of

Administra¬

as

in 1946,

the

was

substantially higher.

"Mortgage holdings of

commer¬

cial banks increased 40% more in
1947 than in 1946; life insurance

over

13%; mutual savings
banks 3%; and individual lenders
10%.
Only savings and loan asso¬

ciations showed

a

increase during

1947.

smaller rate of

"Banks

and

"Seventy-five per cent of all
mortgage loans held at year-end,
totaling $31,599,744,000, were farm
and conventional

by

(not guaranteed
federal agency) urban loans

a

held

by

private

volume

of

totaled

investors.

veterans'

,

$6,460,530,000

loans

10%

or

held

15%

or

the volume of FHA loans

315,530,000

The

was

of the

and

$4,-

mort¬

gage debt.
"A number of factors accounted

mutual

savings
construction," the survey pointed
supply most of
out.
the mortgage money of the United
States.
Their mortgage holdings,
as of Dec. 31, 1947, were $14,286,American Inst, of Banking
346,123 or 32% of the total. Indi¬
In NYC to Hear
viduals, mortgage companies and
other small lenders, are still in
Margaret Hoffman, senior
second place in volume held with stewardness
of
United
Airlines
$10,200,000,000 or 23%.
Savings will be the principal speaker at
banks continue

and

loan

to

associations

next

are

with $9,000,000,000 or 20%.

Mort¬

portfolios of life insurance
companies
totaled
$8,500,000,000
gage

19%. Fraternal societies and

or

as¬

sociations held less than 1% of the
total at the year-end."

The

rapidly the
has

again reflects how
Federal Government

survey

gotten

lenders
urban

the

mortgage
Private
hold about 94% of all

recent years.

now

and

of

out

business in

farm

mortgages,

"Total

as

to

decline

agen¬

in

they have in the past few years.
urban and farm mortgages
$1,833,565,454

or

American
Institute
of
233, Broadway,
Wool-

worth
Building,- New York/ on
Thursday* Sept. 2. Her subject
will be, "The Training of An Air¬
line Hostess." Other speakers will

be,

J.

Vincent

O'Neill,
ViceGuaranty
and
Trust
Company, and Miss
Marie D'Arcy, Assistant Secretary,
President

of

the

Title

with the Excelsior Savings Bank.
The

rally is to be held

sponsorship

of

the

under

Women's

Committee of the A.I.B. with Miss

1947

Their

totaled

Chapter,
Banking,

the

holdings of federal

cies continued

educational rally of New York

an

the

study discloses.

slightly

the

York

New

and

Madeline

Burgess

of

the

Chase

National Bank of the City of New
York

Chairman of the evening.

as

of

Purchases, largely for investment,

wrongly,

Soviet brand of

Olderman

as

manager of the

period of last year, the Institute of Life Insurance reports; Nearly
iWq-third^ of the real estate acquired was commercial and industrial
long-term

on

lease, purchased as an investment. Such
$86,000,000, about half again as much as ii^ the first

were

....

.

'[r

Total real estate holdings of the life companies at mid-year were
$$63,000,000, of which $302,000,000 was non-housing real estate held
as

an

i:

investment.

tem should

'

AcquiredJune
.

Ttental

housing
Non-housing rental
Company used properties

Farms

Other;;\v;

•;

..

—

'properties

Total

'

-

Holdings

Half Year

$9

$28

12

86

0

0

service

is

being

:

'




$23

What

$216
W.

302

every

participating banks in
minutes.

one
a

292

0

68

4

85

$133

$963 3.

can

offer

of

sales, and other bank trans¬
a

key

and

cities

presently interconnected with the
Republic National Bank of Dallas
through the Wire system are:
New York:'Bankers Trust
Co.;
Atlanta: First National Bank and
Trust Co. of Georgia; Cleveland:

Cleveland Trust Co. and National

City

Bank;

Bank

and

Detroit:

National

The
Bank

of

National

Bank; Memphis:
National Bank; Milwaukee:
Marshall

apolis:

National

De¬

First
First

Bank

and,
Ilsley Bank; Minne¬

&

First

National

Bank

and

Northwestern National Bank; New
Orleans: Whitney National
Bank;

Boatmen's

First National

National Bank,
Bank, and.Mercan¬

tile-Commerce Bank & Trust
Co.;
St. Paul: First National

Bank; San

Francisco:

American

Co.;
Washington: American Security &
A further extension of the wire

system is being made, which will
banks

in

Houston,

and

additional banks in Baltimore and
Detroit.

Uhlmann & Benjamin Addis
(Special

to

The

CHICAGO,

Financial

Stock
their

of any of these

were

•

•

things than

free

a

i

%

private and $21.1 billion U. S.

Total increase for year fixed at
$8.1 billion.

abroad—including subscriptions

to the

estimated at $28.8 billion at the
end
1947, while foreign investments in the United
States aggregated
$16.5 billion. United States private investments
abroad amounted
to $16.7 and United States
Gov-<8>
of

ernment

credits

were
$12.1 bil¬
estimates were

These

announced

by the Office of Busi¬

ness1

results of

a detailed
study of the
international transactions of the
United
States
for
1946-1947

amounted

abroad

States

investments

by $8.1 billion
Of this,
private

1947.
investments accounted
for
$1.1
largest amount since

to

capital outflow
However, there
pronounced change ..from

investments

various

in

dollar

countries

in

bonds

the

out of a total of
$8.4 billion
foreign short-term assets in the
United States, but by the end of
1947 they held
nearly $2.3 billion,
of short-term assets
"while hold¬
of

of

earlier

period to investments in controlled
enterprises and the well-secured

American capital to foreign coun¬
in

1947

Aug. 21
merce

Of

the

issue

analyzed

of

in

the

to

"Foreign Com¬

$7.0 billion increase

foreign

investments

States

billion

Government,

represented

the

U.

S.

that

Bank

and

in

for

was

paid

in

&

members

of
the
Chicago
Exchange, have added to
staff Harry C.
Dill, Henry

A.
Fisherkeller,; Clarence
O.
Gates, Henry C. Goebel, Eugene
C. Jones, Joseph L.
Mathias, and

was

the

British

$2.85 billion
while

other

U*

'

S.

abroad

a

was

In
of

and

on

their
a

which

drawn in 1947.

sales

U.

S.

market

the

"

pay¬

United

•

StatesM

United

total

and

of

thus

to

>

"foreign'*
.

spending

muchjf

remaining official dollar I
few countries began to- ;
amounts-1

securities.

with.
values,

These

some

sales,

decline

reduced

in

than

1946

Federal

Government

to

issues':;

'

n.l"

\

$3.2 billion at the end o£

1947,

surplus
.

>

jj

foreign

from, $3.5 billion at the end of

Export-

..." Vr (~

of

holdings of, U. iSi
.secqrjties;other \

p

^investments

of

reserves

liquidate in substantial
in

from

dollar

with

V

foreign/

the investments of their
nationals

together

Government;

credits

addition

assets,

The

increases

as

balance

the

*

T•«

organizations
the

foreign country
of

foreign coun$1.5 billion

short-term dollar holdings.

Import Bank loans of $.8 billion
and

while

loan,

large

resulted

deficit

States,

the

Recon¬

1947.

up

their

ments

national

International Monetary Fund

which

cover

raised

portion

Development

individual

paid its subscriptions to the inter-"

the

$3.1

subscription to

International
struction

of

of

were

countries used

the

Weekly."

United

of

is

ings
tries

reduced by
to $6.4 billion.
The shift occurred

bonds of the International Bank,in
1947. The movement of private
tries

institutions.

lion

$1.3 billion.
a

international

institutions held less than $.5 bil¬

1928 when the net

was

the

At the end of 1946 international

billion—the
was

i
little

was

investments in the United States,,
there was a significant shift in
ownership of liquid dollar assets
from individual
foreign countries

increased

during

nearly $.2 billion,
there

change in the aggregate of foreign

scheduled to be published late this

United

to

Although

year.

largest credit to

of Trade Build¬

property and ships amounting to
$.3 billion.
Repayments of loans
by foreign countries, largely to

♦•Economics, Department of the Export-Import Bank
and Re¬
Commerce, and" are preliminary construction Finance
Corporation,

Chronicle;

ILL.—Uhlmann

Albert R. Tunks.

more

United States investments
World Bank and Fund—were

Trust

Trust Co.

include

H

their

suppose

Government credits.

Detroit

troit; Kansas City: First National
Bank; Los Angeles: Security-First

Wisconsin

exercise

r

human rights
freedoms."—John Foster Dulles.

Of this figure, $16.7 billion

lion.
banks

to

'

op¬

——

is

factor.

the

men

'

4
*

....

enlarge the

Estimated U. S. Foreign Inveslment at
$28.8 Billions at End of'47

matter

intercity
money
transfers,
payment orders, fate of collec¬
tion items, delivery instructions
for securities,.
security purchases

Among

whereby;

means

society.

The system will be used to han¬

Time

.ye,

ex¬

dle

ing,
r

can

to include the Republic
National Bank, which will
permit
the Republic''National Bank to

of

■'.i#

find difficult to understand is
how any
that such a system as communism

we

one

panded

the

prevail unless it is the

and fundamental

Company, New York, this nation¬

which

*

consciously trying to bring human conduct

portunity of

months ago by the Bankers Trust

in

$

into accord with moral law and
to

as

Benjamin, Board

% 15

\.%y- "

----i

June 30

(000,000 Omitted)

2

men are

tional Bank of Dallas with banks
in key cities from coast to coast.
Established originally some four

and

1

,.

so on
purely materialistic grounds, such as
they have developed mass production. Such
reasons are
inadequate. No political or social sys¬

well as businesses,
arrangements have been complet¬
ed for the inauguration of a
pri¬
vate
wire service
on
Aug. 24,
which will link the
Republic Na¬

actions

"""

that

TEX.—To provide a
complete service for corre¬

with

?'.v

many who defend the institutions of the

West do

System

communicate

;

.V\

*

DALLAS,

wire

are

uncer-

*

_

Republic Nat'l Bank

wide

decisions

world."

the

Tihe figures reported by the Institute follow:

'

are

"Today

spondents,

apa¬

mu¬

nicipal department.

more

and

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

formerly Vice-President of
Field, Richards & Co. where hq,
also acted

%

nerv¬

which, rightly or
John f, Di^iie*.
looking to Soviet communism and the

Exchanges, in charge of the

Louis:

41% in first half of 1948

up

nations

operations.

Deposit National Bank and Mellon
National Bank & Trust Co.; St.

According to the Institute of Life Insurance, purchases of real
estate by !u. S. life insurance companies in the first half of this
year
totaled $133,000,090, up 41% from purchases in the
corresponding

properties
piibcha'ses'

nial

Stock

Philadelphia:
Philadelphia
Na¬
Bank; Pittsburgh: Farmers

Companies Buy More Real Estate

political

sales

tional

Life

adequate under¬

♦

free of
cramps and

Cleveland

Mr.

and

t..

his
con-

He. is losing trust and
confidence in the former colo-

*

'

On Wire

and the accelerated rate of private
residential
and
non-residential

1946.

him

tainty.

Olderman

Building, members

companies

for
the
skyrocketing mortgage
"Mortgage companies and indi¬ debt. The most important were
the
viduals increased their mortgage
heavy demand for homes re¬
holdings $2,200,000,000 or more sulting from the housing shortage

27%

J.

Commerce

was

crease.

than

not
Russell

holdirigs of federal agencies

'

"His

in¬

to

agency

holdings, gained about

survey shows.
However, the Tate
of increase among private lend¬
ers

the

mortgage
funds
in
1947, increasing tneir
holdings
approximately
$3,600,000,000 or 62% over 1946.
Sav¬
ings and loan associations were
increase

federal

its

about the same

was

survey

second,

Home

The rate of decline in the mort¬

,

gage

John

makes

disillusioned

or

thetic.

$8,500,000 in loans."

the

largest

only

crease

President. The

the

Mortgage Corporation
$37,000,000 in 1947.

over

Farmers'

tion,

sociation

slipping out of

ous

Farm

slightly

pated, accordi n g
to John
C. Thompson,
Newark, ,As-

is

That

eral

The

can

granted
hands.

approximately

fused, restless, scared

this

is

net

a

$78,000,000 and those of the Fed¬

mortgage debt

study

1946,

farm

mortgage field,
holdings of the federal land

the

sub¬

stantial

less than in

the

an

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

decline of $134,534,096.

public

Another

7%

over

and

Aug.

on

1

Jff

"Anxiety about the advancing social transformaleadership of the Soviet Union is
depriving the average Western citizen of a real

•

o

,

19

tion under the

Total mortgage debt of the United States
registered a sharp rise
last year, increasing from $34,720,784,595 in 1946 to
$44,069,054,006 on
Dec. 31, 1947, a gain of nearly 27%,
according to the annual survey
of the country's total mortgage indebtedness made
by the Mortgage
Bankers
As/.
^
sociation

(915)

L;;
i

' -V« ***** *»«• •

-••

i

20

COMMERCIAL

THE

(916)

Florida,

REVISED"

-

!

•

:

CAPITALIZATIONS

1,000th member with: a
the bank at which

luncheon

{

at

Creighton
D.
Lummis • of the
Comptroller's Department received
emblem

official

club's

the

and

.William

the

L>

mers

and

Bank

of

National

Mechanics
Westminster

the

and

antyW Quartet Centur# Club;

"The

of

es^

three 'institutions

would

bank's service

the

in

rectors

institution,
Carroll

and di¬

including officers

First

the

National

Bank

of

Westminster. Assets of the merged

tablished in T941, has as its mem¬
bers all members of the company's

staff,

known

be

to

County

National

would

Westminster

25

N'eely, Chairman of the board of

to

directors

at

the

of

his

Landori, who was a certified
public accountant, was ^member

1942,. when he was manager nf
the State Bond Department,
1ft
part, the same advices said:
"In 1915 he resigned his position
with
the
Bank
Commissioner's

Bank
in

be

Trust

and

that

At

Co.

ation

and

visors of State Banks.
A "Governor

in

1916

Mr. Landon

appointed

a

of

Board

State

the

of

member

Holcomb

H.

Marcus

In 1917 he returned

Accountancy.

State Department as man-

to the

,~"ager of its bond division. At one
time he was also associated with

Wood,

of

house

investment

the

as

acquisition of the National
Charleroi

of

Bank

Trust

of

Co.

Charleroi, Pa., by the Mellon Na¬
tional
Bank
and
Trust
Co.
of
Pittsburgh

of the

stockholders
stitution
now

Charleroi in¬

Aug. 20, and the latter

on
a

by the

approved

was

branch

of

Mellon

the

Ga-»

The Pittsburgh "Post

Bank.
zette"

of

the

stockholders of record

close

of

business

underwriters represented

group of

as¬

post

remain unsubscribed at the end of

income last

Dallas.

the offering. The proposed issu¬
ance of- -additional shares of the

1929,

public
The
as

committee

of

Bank

National

resignation of Mr. Ferguson
of the United

President

National

of

Bank

become

to

of

States

Vice-President

trust

Colo.,

Denver,

of

the

company's

stock

common,

referred to in these columns

was

Aug. 19,

p.

"(1) Each share (par value $.10)
of capital stock of the Westmins¬
ter Savings Bank would receive
1.5890 shares (par value $10)
of
capital stock of Carroll County
Bank

Westminster.

of

and

Mechanics

Westminster

National

Bank

of

receive1 1.405

would

of

capital
merged banks.

stock

of

the

"(3) Each share (par value $100)
of

capital

stock of the First Na¬

tional Bank of Westminster would
receive

8.0464

shares

of the

capi¬

tal stock of the merged bank.
"If the proposed consolidation
is approved, the

respective boards

that- the senior of¬
bank would

new

Aug.

23

that

reports

Lloyd Littrell, formerly President

Dr.

Lewis

in¬

K.

Woodward, ViceChairmen, and Theodore F. Brown,
Chairman
mittee.

of

the

executive

Norman B.

com¬

Boyle, who is

currently serving as President of
Maryland Bankers Association,

the

would

President

be

bank."

.

man

the!

G.

year,-at£.9%, than in
when the ratio • was 9.6 %;
or in 1941, when it was 9.0%. The
average
for the 19-year period

of the Board of the City Na¬

A". '■ A

V

Holds Profits No Cause of Inflation
.

Guaranty Trust Company of N. Y. refutes attacks

-A;

of "The

for

profits,

Guaranty Trust Company of New York, contains a strong protest
against current attacks on profits and industrial pricing policies as

to be held

seem

so tenaciously and
high places as is the idea

in such
that

profits

corporate

and

rise

in

blow

prices,

hence

and

the

of

Congress
that

recommendation

was

jg

0£ course> that the
dollar amount of corpo-

excess-; absolute
profit tax be reestablished to pro-; ra^e profits at
present looks large
vide
a
Treasury surplus and a« jn comparison with past
figures,
braxe

on

inflation.

The President

^
a comparison, however,
k
direct explanation of his;
grossly misleading.
To compare
preference for an excess-profits;
aggregate dollar profits now with
tax as
a
means
of
providing_ a; those in some previous year is as
Treasury surplus, but later in His; meaninglesS as it would be to
message he argued lor price-con-; conclude
that
total'

wage

authority
profit

on

without

the

Pnce

have followed.
tion

the

fact

products have
since

pay-

the ground that; ments, for example, are too high
nave been ; because
they greatly exceed those

margins

adequate to absorb

wage

that

increases; jn tj1e

increases

He did

not

prices, of

thatj
farm

than tripled
prices of com¬

more

1939, while

that

years preceding the war, oi
jn 1929, a comparison of the rate

men-

doubled;

prices of raw materials have
risen 174%, while prices of man¬

refurn

|

vesteci

on

net worth, or on in-

capital,

with

the

were

much

lower

is

in
prices

rates

paS|- years when commodity

almost

a*

superficial, because in practically
all

cases

net

5.28

cents

below

present

insurance
equal to

3.61 cents.
statement has

method of

"This

direct

of

were

per dollar of sales, as;
5.41 cents in 1929, 5.14"
1941, and a 19-year aver¬

cents in

a

finance,

bearing
relation

the

the question
profits

on

between

price inflation.
If the profit
of corporations last year

had

been arbitrarily

the

1939

dollar

restricted to

figure of 3.98 cents

per

sales, and if the entire

of

reduction

had

customers

in

prices,

the

would

have

been

passed

the

form

saving

to

of

on

to;

lower'

customers
to

amounted

1.3%,

fifty-ninth of
prices,
since 1939. Those who attribute, or

canceling about
the advance

one

in consumers'

pretend to attribute,

any

import-:

ant

and

postwar

rise

part of the
in

the

increase

speaking

in

cost

war

of

living to
profits

corporate

without

regard

to

the1
are

the

plain facts.
"Corporations in

the

industries

that have been subjected to espe- -

criticism for the supposedly
high profits and their pricing pol¬
icies, and those whose products
replacement costs enter directly into the cost of liv-'

worth

reflects

ance-sheet valuations that

ufactured products

after

profits,

net

estate

no

many

and

margin

true>

an

the

except
real

and

Misleading Comparisons

changes in

and

age of

the

fluctuations

hand

year

tainly the facts point to the

con

reflect price
one

taxes, of corporations in all indus¬

a: elusion that the chief inflationary

President's list of

session

trol

Last

against

anti-in-,
flationary proposals to the special1

significant

tion and distribution on the other.

at

the

{

most

physical volume of produc¬

targets to shoot at, and politically
of the least dangerous.
Cer¬

one

profits would help pro-1 factors in the present situation are
mote price stability.
Number One j to be sought in other' quarters,

gave

the

tries

marily responsible for inflation a?
they are one of the easiest

cor¬

that

According to the "Survey":

because

porate pricing policies are among
the major causes of the general

I

•

comparison between the.
corporations ren¬
and the net payment received
those
services.
Sales,
like

der

Guaranty Survey," published by the

of present inflationary tendencies.
"Few current economic belielsA

)

the

of

direct

on

current issue

■

services that the

higher replacement costs and plant expansion.
The

■!

measuring corporate
profits is to express them in terms
of sales.
This method provides a

corporate

on

•«

of

ways

profits and criticizes President Truman's advocacy of an excessprofits levy. Says comparison of corporate profits with prewar
levels are misleading, and adequate profits are needed to cover

and foods have less than

*

Dawes, Chair¬

5.8%.

is

1929-47

720.
"One

modities other than farm products

*

Charles

found to have

are

been lower in relation to national

#

new

\

*

Gen.

of

estimates,

Profits and Sales

on

shares

offi¬

taxes, according to the latest

the' Re¬

new

causes

Joseph
H.
Cunningham,
Chairman; Milton P. Myers and

The

is

is

and

clude:

1942."

,

30

;

ficers of the

Banking Department in

the State

June

of

as

follows:.

have indicated

He resigned from

Siruthers & Co.

|

National

Treasurer of
the National Association of Super¬
Secretary

was

common

cial

excess

City

the

of

smaller dollars.

are

"Both the changes in the phys¬
ical volume
of
output and the

by Blyth & Co., Inc., has agreed
to purchase any shares which,
may

of

and
"(2) Each share (par value $10)
Bank
of capital stock of the Farmers
time he'

Secretary

become

measured

the

as

of stock was determined by evalu¬

of the State Banking Department
from-1919 untiLhis retirement in

to

The dollars im which profits are

on Sept; :T as
Vice-President and member of the
sume,

Mr.

Officer

Reserve

arriyed in Dallas, Texas, tq

.

Trust

so that a change in dollar
totaLdbes not; indicate;# common-*;
surate change in physical volume.

•

issued

office

Federal

of

longer.

or

forms of ,income, ,should, bo higher^
The price level has risen substan¬

tially;

said

31,

ican Trust Company of San Fran¬
cisco common stock were mailed

$14,000,000.
"According to a joint statement
by the Presidents of the
William P? Landon,* former dep¬
three institutions, conversations in
uty State Bank Commissioner of.
regard to the proposed merger
Connecticut, died on Aug. 29. He
have been going on for several
was 80 years of age.
According to
months.
*the Hartford "Courant" of Aug. 30,
"The basis of exchange of shares
years

Dec.

"Announcement of the appoint¬
ment
was
made
by
Frank
H.

executive

and associates of Mr. Lummis's become a national banking.asso¬
department were present. -Guar-; ciation under the amended charter
:

until

.

ter.

club, President
Kleitz of the bank,

of

>

changes in the price level are re1
Aug. 27. flected in national income and
Atlanta, following action The stock is being offered at $40 gross national product. Probably
more
"Sun" of Aug. 20.
The Fi-,
most
satisfactory
way
to
nancial Editor of that paper, J. S.; by the Board of Governors of the1 per share to present holders of the
Federal Reserve System in Wash¬ common stock on the basis of one measure corporate profits, there¬
Armstrong, in making the plans
new
share for each four shares fore, is to express them in terms
ington."
;
known, said in. part:
A.A *
? * - :;i
.1
:
held.' The offer expires Sept. 27. of one of these aggregates. Meas-?
*'"The three banks ,are the West-1 j :->A
J.
Howard
Ferguson recently It. was, also announced that; a ured in -this way;- profits after
minster Savings Bank, the Far¬

First National Bank of Westmins¬

membership certificate No. 1,000.
Officials

in

noted

was

Bank of

On Aug. 24 the Quarter Cen¬
tury? Club of Guaranty Trust Co.
of New York marked the admis-

sion of its

institution

the! ohr Aug? 19 issue1, page 720. ?'

of

It was announced on Aug.-30
the that subscription warrants evi¬
Atlanta "Constitution" of Aug. 18, dencing the right to subscribe to
in which 4t was also stated: ■u-* 5 ' 94;799; shdres bf additipnal Amer¬

running

li ANKERS

AM)

ETC.

Dallas

director; of!

a

Branch

;Thuf946"

CHRONICLE

Fedefal Reserye Bank of Atlanta.
|
He will SilL an; unexpired,yterm

f

CONSOLIDATIONS
NEW BRANCHES
NEW OFFICERS,

f *

named

was

Jacksonville

the

News A iuht Banks

FINANCIAL

&

cial

bal¬

are

far

have increased of plant and equipment. There
that some prices charged would be little inducement to in¬ ing, show cemparatively little de¬
viation from the general average
appointed Manager of the new
birthday on Aug. 27. In public life by corporations have been volun¬ vest new funds in any business if and in some
branch, while C. S. McKean, John
outstanding instances.,
tarily held so far below what the rate of return
Gen. Dawes served not only as
promised to be are well
R.
below
it.
Abernathy and
Murray W.
Companies,
could
have
been
charged
that no
Vice-President
of
the
United
greater than that in some pre¬
Long, also former officers at Char¬
producing
food
and kindred prod¬
'gray markets' in the " products war
States
under
President ~ Calvin
year.
•
leroi, were named Assistant Man¬
ucts,
for
example,
earned
' 3.48'
have developed.
Coolidge, but also as Director of
"It is impossible to find a past cents
agers.
Aft item bearing bft the
per dollar of sales last year.:
the Budget, and he ifcevidse? for¬
period that provides a significant Producers of apparel and other
Why are Profits Criticized?
plans for the taking over of the
merly officiated as*Ambassador to
Charleroi Bank^ by •" the Mellon.
fabric
"There- is a strange inconsist¬ basis of comparison without broad finished
products * earned *
Great ^Britain. Important also in
allowance
for other variable fac¬ 4.27 cents.
Hank appeared in our issue of
Automobile manufac* ~
his major services was the de¬ ency in current attempts to attrib¬
tors.
During the war the sltua- turers earned 6.23 cents.
ute inflationary tendencies to the
Trans¬
July 29, page 414.
Charleroi Bank,

the

has been

tional Bank &

Trust

Company of
Chicago, 111., celebrated his 83rd

108%;

or

.

,

A

The
as

■

<s

'

>1:

A

"•

>

election of Edward Hamer

President, of the tSecdftdNa*
of

Bank

tlonal

Uniontown

Pa.,

Uniontown,

Rasi bfeenmade

From
Pitts-1

known.'

advices

to

the

burgh '^Post Gazette" :stated that
Mr, Hambn connected- with the
.

bank

^iiice 1929 "as Assistant Trust
Officer, • Assistant- Cashier and'
Vice-President, was elected to the
Presidency on Aug. 25. As Presi-.
dent, he succeeds the late Robert
J. Arnett, who died on July 8.
AThe same advices said: * A A J* * '
"Clarence Moyer was promoted
from1 vCashierr to i Vice-President

Paul

Malone

ofConnellsville,

President of the, Connellsville -Nr-.
txonal Bank and Trust COm be¬
.

Executive

comes

Vice-President.

Robert;

Arnett, Jr^-wiH >fill the:
unexpired -term. of his iather on;

;
-

tlie board of directors.".

•

,

-

?

velopmentiqfthe"Dawes^plah Tor
the ' settlement

of

the

German

Reparations

problems after
fir.st World War.
AA

the

very

corporate profits

that were pomwas pbvioixslyvabnorma^ with portation and distribution cannotbe
held
responsible,
because"

held responsible for deficient kde^ unrestricted governmental spend¬
•mand iri the yeiars preceding1 tlie? ing acting in.one direction and
war.
During the 1930's, numerous Iprice control l and excess-profits
taxes in the other. The decade be¬

;taken to divert
iftbomie Afroift;;business AcbrteerftS" fore 4he war was oftef of^ uttbrpkent
or
almost unbroken, depression,
and the owners of 'capital'—who,
tion? earned ;6.25 cents, and .cor¬
Bank of Chicago, and in the bank¬
with
the
government spending porations engaged
it was feared, would allow the
in'contraction*^
ing business for nearly 60 years,
anv unsuccessful struction earned 2.69 cents. Bitu¬
funds to lie in partial stagnation largd 'isums? in
died on Aug. 22.
He was 82 years
;~4ntdbother hands- whereAit was effort to restore prosperity, while minous coal ' producers earned 1
of age.
Special advices from Chi¬
at the same time weakening busi¬ 6.86 cents, and manufacturers of :
supposed, the money would be
cago to the New York "Timds"
ness'
more largely
; coftf idGncer by; an'.: iinprece? iron and steel and their products!
and promptly spent
said:
for goods- and • services - and> thps dented program of experimental 7.42 cents.
"Mr. McDougal had retired in
in
would strengthen total demand. legislation- andf intervention
1935 after serving for 20 years as.
Need for Adequate Profits A ♦
economic affairs.
If income received
by corpora¬
head of the Federal Reserve Bank
"lip judging corporate tprofits, itv
tions contributes- less to ^totai de^
here.
I
..*
Measuring
Profits
Previously lie 'was a Na¬
is essential also to remember that *
marfd than income received by
tional Bank Examiner -and Chief
!
"One must go back at least to they are a residual item- • fiepreA
Examiner for. ihe. Chicago .Clear*; others, it would ^seem to be the the 1920's to find a prosperous
senting a margin above compara¬
latter,, rather than the former, that
ing House."
should be discouraged at a time period not. dominated by clearly tively inflexible costs. This means
tyA
A A »;
*
' * '
' ; ?wH>*
{abnormal factors, and even then that profits are an exceptionally
of superabundant demand like the
The Oklahoma National Bank
Ithe^fundamental normality of the unstable;^ form
of
income; t Aln
present,
"
"
" "' * • >
of
Oklahoma
City,
Okla.y an"This is perhaps a matter in Situation toy be seriously ques- periods o£ low business * activity
nounces.* the elec.tioii pf the fol¬
lionetL"^
^That
period, moreover, they may vanish entirely, or even
which tconsistenCy is not to be ex*
lowing new directors:
Jeff W.
Was two' decades ' and more £ go, -give tway to large; deficits? In the
pected.
It
is "possible that in
Beaty;
Jbnes; Lee V". Sneed
hnd 'great' changes, have taken three consecutive years 1931, 1932
many cases corporate profits may
land Dry HarpeiriWright; A; AA V
jplace" since then. ' The country is and 1933, all corporations in the
be singled out for criticism and
*
*
more
populous and much more United States, taken as a single
On Aug. 17. -J. Hillis Miller, pressure not so much because they productive;-and it is only natural group, are officially estimated
Mo¬
President
of
the University
of are seriously believed to be prL that corporate indoifte, like other have experienced • a total ? comJames

B.

(measures; were

McDpugal,

former

Governor of the1 Federal

Reserve

.■

...

v

.

...

-

-

.

Plans

three

for

ay

of

Westminster, Md.,
at special meet¬
ings of the stockholders on Sept..
17,: it is learned from: the /BaltiH
banks

at

will bfe acted

.

consolidation

on




transportation; companies earned
only 2.22 cents, wholesale dealers
2.02 cents, and retail dealers 3.69
cents. All manufacturing corpora¬

<

.

^Volume 168

Number

4730

COMMERCIAL

THE

'

&

FINANCIAL

CHRONICLE

bined deficit, after taxes, of more mand
today, means p more and and commercial bank policies.
thaft $5: billion.
For the entire better products at lower cost in Some net reduction in total de¬
decade 1930-39, their profits were the future.
To reduce profits by mand would probably follow as a

(917)

21

~

"equal to

further increases im wages-Would

only 1.87 cents

per dol¬
It is evident that the

lar of sales.

the

unfavorable results

very

perienced in bad

mand and further increase the in¬

"occasion

gravest ankiety

profits

fail

business

if

the

for

should

profits

to

respona

to the favorable conditions.

"

retirement; but as far as the
anti-inflationary effect was con¬
there certainly would be
no
special efficacy in a tax on
profits as compared with other
cerned,

of taxes.

forms

"The attack

on

profits and in¬

dustrial pricing

policies a£ causes
present inflationary tendencies
is a glaring case
of misplaced
emphasis. When weighed against
other forms of income or against
of

reduce
levying new taxes on
enterprise
would
in¬

Used

additional

rise

power

demand.

crease

.

government

primary importance that must be taken into spending

that

cost

of

has

and

revenue

either- result in larger government

of

taken

place

the

in

if the proceeds were

or,

debt

for

retirement*

place

lending and spending
at the disposal of security

worn-out and
productive
equipment.
maintain
that
authorities

final consequences that would, de¬

Some

pend

largely

remedies

true

By JOHN T. CHIPPENDALE, JR.
as confused how as it
long time, because there is practically no agreement
happen even on a day-to-day basis.
Bickering
back and forth between operators in the
money markets along with
"Open Mouth Operations" that come from all over the lot, has

has been

in

a

what is likely to

on

.

.

At

least

market

psychologically almost

of

ment

serious

a

what will

ities

View is accepted
matter

a

been

the

funds

essential

or

raising

of

way

them

them
earnings..

from

not

are

available

The

for

ex¬

Holding
share

Public

stock

one

share

of South Jersey Gas.

of

bution to

initial

Gas of about 3V4.

or for distri¬
owners.
The acquisition
equipment at present high

earnings.

future

as.

prices

The

in

power
ities'

the

of

value

newly

new

somewhat

against possible de¬

reserves

clines

It

was

according

;

'

•

quoted

has

been

mystery.

merged in April 1947 with

and

-earning Peoples Gas (another Public Serv¬
installed facil¬ ice subsidiary) and in October

ice

of

about

ings

rise

a

inventories.
or

paper

in

This is

prom;

it

the

value

of

an

unrealized

is

essentially

block

held by United

now

and continues only
long as the price advance con¬

of

stock

is

Corporation).
President of

H.

fixed

corporations alone, accounting for
of

the

aggregate" amount

of

other

resort

other

areas

across

corporate profits before taxes.

the

the

cipally of
"Aside

not

from

the

evident

profits in the aggregate
large enough to have

f great effect

fact

industrial

are

munities

any

cities

in

of

the
prin¬

of

west

consists

resorts
a

balance

The

served

extending

large number of small
commercial

and

which

also

com¬

function

as

shopping centers for the surround¬

the cost of living,
there are vital reasons why strik¬
ing at profits would be the worst
^possible way to set about combat¬
ing inflation. A general rise in
prices reflects an excess of the
total demand for goods and servives over the total supply of them
a% the existing price level.
The
basic problem, in an anti-infla¬
tionary program, therefore; is to
on

applying a
Federal income tax

period, share earn¬

estimated

as

ing rural and farming country.
Total revenues in 1947 amounted

to

substantial gain
$1,831,000.
change
during the period 1937-42, how¬
$3,037,000,

over

a

the 1942 figure of

Revenues had shown little

ever.

Recent rate figures are not

available tout

1947

$1.23.

in

revenues

A

rate

the
.per

first

MCF

increase

demand

for

new

production would

certainly be reduced, but it may
be
repeated that industrial de¬




.

.

has

There

.

.

.

made

were

move.

.

prices that

at

were

.

.

33
24

generally

1943

19

conjecture.

1942

19

alent that strong
when it is made.

1941

28

half of
.were

of about

(

Fro : fdrirta
available.
come

of

earnings

Based
the

on

two

are; not

the gross in¬
companies

as

...

earliest,

1948 (however,

the

rate

new

customers).

to

effective for

be

the

calendar

will

schedules
seven

as

Since

only

months

of

1948, earnings
this year might be estimated in
the neighborhood of 50-600. How¬

in 1949, with full rate bene¬
obtainable, a further increase
in earnings might be anticipated
fits

retarded

wages or

by
higher
miscellaneous costs,

Most

all of the manufactured

i

as

or

companies in this area are
hopeful of getting natural gas
from the South when a pipeline
gas

these amounts.

.

..

not

The company has

yet considered any

policy, it is understood.

or
.

in

more

requirements

reserve

particular

districts is

raised

are

of

matter

a

However, the opinion still seems to be quite prev¬
borrowing areas will get the brunt of the increase,

.

.

Whether

.

.

upped

are

.

.

.

dividend

the government bond market, in the opinion of most
market followers, is not likely in the interim to do any¬

money

thing

the

on

bearish

up

than

side.

eligibles

longer

Moreover, there

.

.

bullish

attitude

because

toward

there

is

seems

prices,
much

so

to be

of

more

especially

in

uncertainty

a

the

as

to

whether former support prices will be maintained when the test

takes place.
ments

.

.

.

raised.

are

This

will

probably

be

when

reserve

require¬

...

"HOT"SPOT
The

ineligible price peg is also one of the hottest spots in the
markets, with opinions rather divided as to whether or not
premiums above 100 will be eliminated by the authorities in

money

the
the

future.

It is being pointed out by some that a lowering
prices to the par level would tend to retard liquida¬
holdings by non-bank holders, especially the insurance
companies.
of

near

...

support

tion

of

.

.

year

ever,

except

not to interfere with the coming financial opera¬

as

Treasuryv.

With higher reserve requirements expected in the not distant

above, higher costs of oil
making gas can now be fully
on

so

tions of the

noted

passed

selling is being done for

some

.

to be that reserves will not be increased until sometime in October at

future,

for

.

.

high on the agenda is when and how much
requirements will be raised?
The current feeling seems"

1944

in costs during

institutions making commitments in these

many

Another item that is
reserve

1945

32

.

MORE UNCERTAINTY

43

37

.

.

.

purposes.

1946

1940

.

.

not be long delayed.

may

On the other hand,

...

290

1939

.

one

..

1947

.

industrial

protective

follows:

.

instruments.: of

reports,

this

to

answer

likely to be too

and

20-25% (yielding estimated addi¬ comes through in 2 or 3 years.
reduce demand and increase sup¬
tional revenue of about $590,000) South Jersey Gas wants to obtain
ply, in terms of money.
On the was
granted June 1 this year. At gas from Texas Eastern Pipeline,
side of supply, a curtailment of
the same time the company was and its representative appeared in
profits would have an effect ex¬
permitted to extend its oil adjust¬ Washingtoh this week before the
actly opposite to that desired.
It ment clause in the fate stricture PPC in connection with the hear¬
would diminish the incentive to
ings on the project. Natural gas
to all classes Of .customers.
produce and the incentive to ex¬
would of course benefit the com¬
Under an order of the Public
pand -'and improve" facilities, for
pany
by perhaps doubling the
Commissioners
of
New
future* production.
And it would Utility
heating units per cubic feet of gas
diminish the means for expansion Jersey in March 1947 the plant
delivered, increasing the available
and improvement of facilities, be¬ was written down to original cost
supply, and permitting promotion
cause one of the principal sources except for aquisition adjustments
pf profitable house-heating serv$1,500,000. which are being
of funds for that purpose is the of
ice. ;;
■'"
\
'U;
retention
and
reinvestment
of amortized over a 30-year period
As to eventual normal earning
profits by business concerns, and through charges to capital surplus
power. 6%
on
the* present rate
anothepris: the saving and rein¬ (so long as any of the 1937 series
base (as estimated from the bal¬
vestment* of profits distributed by bonds are outstanding). Bonds are
ance sheet, and including acquisi¬
concerns !to
their individual to be retired at the rate of about
tion adjustments)
should permit
$60,000 per annum except that
c*wnets.i ■
>
60% of property/ additions, not earnings of.about 820 a share; 7%
A "On the side of demand, the
would allow $1.
Of course, addi¬
ultimate effect of a curtailment of otherwise utilized under the mort¬
tions to the rate base, through
profits would be very uncertain. gage, may be credited.
new construction, " would increase
The

over

OF "PEGS"

obligations.

various

and

belt

a

state.

territory

seashore

Anti-Inflationary Aspects

that

the

as

Doubt

.

the authorities will do with prices of the last three maturities of
the eligible taxables, when the "chips are down," there are not

minus esti¬
charges of

tinues; and in the event of a sub¬ Earl Smith, former Vice-Presi¬
1938
37
sequent price recession it is offset dent.'
The company's headquar¬
1937
36
by an inventory loss., For these ters are now in Atlantic City.
reasons it is fundamentally differ¬
After allowance
for
increased
Territory served by the com¬
ent from a true operating profit.
Federal income taxes, the rate in¬
pany with manufactured gas in¬
iXast year, according to official
recently
granted
would
cludes Atlantic City (which com¬ crease
estimates, this item amounted to
prises about 42%
of the total amount to about 670 per share but
more than $6 billion for all busi¬
population served) together with of course some of this gain might
ness and more than $5 billion for
be absorbed in further increases
17"%

to

.

being made,

the

Blake,
Public Service, was succeeded as
President of South Jersey Gas by
George

nonrecurring
as

substantial

a

one-tenth

and

was

Jersey,

$200,000,

are

allowance

of

consists

New

current

straight 38%
throughout th£

was

8

"Similar

certificates.

and

lows of the current

.

mated

market

a

Gas

Jersey, given in the bond prospectus and
in the 1947 report of Public Serv-

now

company

of

&

an<S>

completely recapitalized. On
must
be July 1 this year the Public Serv¬
made for the fact that at a time ice
plan
became effective
and
pf rapidly advancing prices a sub¬ South Jersey Gas became an in¬
stantial share of reported profits
dependent company (except that

wr.

far

as
.

distant matur¬

The
214s due March 15, 1956/58 were previously supported at 102.24,
the 214s due Sept. 15, 1956/59 at 101.8 and the 214s due Sept. 15,
1967/72 at 101.
Gradually and slowly quotations of these
issues have been moving toward former support prices on rather
light volume.
Until the government bond market knows what

Later the stock

to advanced to 5 and is
about 4%-y8.

Some corporations have

Electric

While the distribution

and

deemed it desirable to set up spe¬

cial

South

for

market

Service

made

dealers

of new

and

.

more

ineligible obligations continues to

bills

,

chases,

The

New Jersey in its recent dissolution
Company Act gave each share of its common

the

pansion of facilities

current

especially

concerned.

buying of the 214s due 1956/59 and the ZV2s due Sept.
15, 1962/72 by Pacific Coast banks, but it is indicated that these
acquisitions have not been too sizable.
Most of these pur¬

Public Service Company of
under

over-counter

prices also raises questions

Treasury

.

South Jersey Gas

is to take
Thus they

either

fast,

are

trying to plot as best it can, under existing
uncertainties, the future course of events, with particular emphasis
upon what is likely to happen in the relatively near future. . . . One
of the important points
that is getting careful consideration is
whether or not "pegs" on the longer maturities of the eligible tax-^
ables will hold, when the test comes.

addi¬

the most practicable

cases

act

The money market is

tional funds for replacement must
be raised, and in the large major¬

ity of

to

some

FUTURE

not is largely

terminology.
point is that the

ready

eligible and

into

about at the

this

of

be

.

in the government

everyone

happen to support prices of the

both

of

move

1

overstate¬

profits. > Whether

to

seems

longer-term Treasury obligations

elsewhere,
and
the
be
sought else¬

.

in

.

.

.

this increase in

resulted

.

traders and investors so uncertain that only necessary business is
being done/.
This is largely of the switching variety, but it has
given the market some activity, if on a Sharply curtailed basis.
.

must

replacement costs,
not
adequately allowed for by
higher depreciation charges, has

Governments

on

The, government bdnd market is' about

in¬

of

causes

where."

Federal Reserve

on

The

flation-lie

holders, including the banks,-with

replacing

obsolete

Reporter

for

Consideration in judging the level
Of corporate profits is the sharp

fact

Our

taxation

proceeds

debt

pressure. And to

by

the

of

use

the amount of goods and services,
produced,' profits are seen not to
be at conspicuously high levels
out approximately in
line with
past experience at times of active

"Another

:

flationary

additional

the

the

and

crease
in
supply and of black
markets) stimulate consumer de¬

ex¬

years. In a period

exceptionally
active demand
isuch as at present, it would be an

or

of

result

simply swell the demand of wage
average over a long period can earners and, as recent experience
toe maintained at a level sufficient has shown, would lead to a further
to attract capital, provide jobs, rise in prices. To reduce profits
and supply the needs of a growing by placing price ceilings on com¬
population only if profits in good modities would
(waiving
the
years are hign enough
to offset questions
of
the
resulting de¬

.

Others, however, hold that
to

100 would

it

would

a dropping of the support prices
selling by insurance companies, although

not slow

cost

the

money

levels for the tap bonds.

.

.

maintain

to

less

managers

.

protective

What is likely to happen to support

prices for all of the long-term Treasuries, if anything, is keeping
the government bond market in a state of uncertainty and con¬
fusion.
have

decided

place.

It

...

used

the

price

.

.

.

keep

it

in

will

since

question,

return of confidence

a

government market.
SHORT-TERMS

this

indicated

is

might be

powers

balance
have

time

is

certain

in

that be
that

so

not

taken

open

to

quarters

beneficial to the

more

/

;

FAVORED

amounts

by

obligations

the .smaller

bills seemingly getting more of a
institutions

off

direction

be/effective
it

now

the

the market

either

...

Short-term government

sizable

of operation that

past to

movements

Whether

considerable
that

is this type

in

being picked up in fairly
banks, with Treasury
play than the certificates.
These
are

commercial

...

apparently not interested at this time in making*
purchases of issues that might result in price depreciation, despite
their need for maintaining income.
are

.

LIVELY

Banks and

they

.

.

TOPIC

have

or

insurance

have not

companies

contributed

are

to

in disagreement
forces

the

of

as

to how

inflation.

...

Undoubtedly this argument will not stop here because the subject is
too lively a one to be allowed to pass on into oblivion so quickly.
.

There

is

nonetheless

this

.

.

-

opinion among apparently impartial ob-4
servers, that the authorities do have some powers to limit the credit .
creating policies of the commercial banks in the form of higher
reserve

requirements.

.»

■

Also it.is pointed out that

so

position to retire debt there is not

long
an

the Treasury is in

as

over-all

a

increase in bank

credit.
This has been the case so far.
On the other hand,
the question is being raised as to what powers have the author¬
ities over insurance companies to prevent them from expanding
.

.

,

.

.

.

loans that are made from the proceeds of the sale of government
securities.
!
...

(918)

22

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, September 2, 1948
1

Company

Really Own Stocks?
(Continued from first page)
outside

of

a

proximately 6,000,000. This should
perhaps be considered the mini¬

to eliminate

census,
the duplications;

number

mum

stocks
Some

Earlier

Studies

Monograph 29 of the Temporary
-National

Economic
eleven

now

owning
775,
Bulletin, July,

Reserve

Just

(Page

Probabilities

likely" number of stockholders of
(before eliminating dupli¬
cations) was 26,000,000, mention¬
ing a statistical range somewhere

as

matter

a

humble

of

greater

than

92%.

the

If

error

only 92 %, there would be
approximately 11,500,000 holders

of

securities, other than

ment

govern¬

bonds, in the United States.

survey

More

recently,

,

Survey of Con¬

a

Finances conducted for the

sumer

Governors of the Federal Reserve

System by the University of
Michigan Survey Research Center,
a sampling basis, arrived at an
estimate that "about 9% of all
spending units" had at least one

on

member

who

•

bonds other

owned

than

stocks

Federal

or

in

the

early part of 1947 (see page 41
Survey of Consumer Finances, re¬
printed
from
Federal
Reserve
Bulletin for June, July and Au¬
gust, 1947).
At this time there
were
about
47,000,000 spending

units,

so this
sampling (which
covered only 3,000 units or fami¬

lies)

suggested
that
spending units owned

4,130,000

securities
other than government bonds. Ob¬

viously, many, if not most, of the
spending
than

units

one

holder

contained
more
who was a share¬

person

bondholder,
4,130,000 figure is too low

the
if

so

even

admits that it is fair to arrive

one

at

a

or

statistical

a

from

answer

It

should

be

recognized,

how¬

that these estimates through
poor as they may be,

ever,

or

out

one

of

They .are the .estimates, of what
might. be called "erudite" rather
than "popular" financial writers.
It is my opinion that the "erudite"
.

crude

as

as

guesses.

simple fact is that no one
knows how many people in the

one-tenth"

of

the

number

of

spending units contained at least
one person owning securities other
than government bonds.
About

four-fifths;

or

estimated

'an

million, had at least

one

owning; life insurance,

38

member

><■:.

Sampling Process Inadequate
"

The risk of

error

through

sam¬

pling always is considerable, but
it is exceedingly great when the
involves

process

units

six

verse.'-

per

In this

obviously
number

>

sampling only
100,000 of a "uni¬
case

the sampling

under-estimated

the

of

people in the United
States owning life insurance.
Its
figure of 38 million (before "re¬
finement")
compares
with
the
Institute
mate

of

Life

(page

Insurance

10,

esti¬

Life

Insurance

Fact Book for 1947) of

176,657,000

policies

in force, owned by 73
million individuals. If one accepts
the

Life

mate

best

as

Insurance

Institute

accurate

estimate

United States

own common

(and it is the
is, regardless

of its absolute accuracy), the mar¬

gin of etror in the University of

Michigan sampling
statement of 92%
an

was an

actual figure of 73

If

one

applies

under¬

(38 million vs.

million).

this

of understatement

to

survey

stocks.

approximately

Glass

Detroit

this

76

5

stock.

40

were,

Y';.89V:Y

34

Y,

the

cover

First

Nat.

Hartford

Rub.™

&

Bank,
Fire

stockholders

of

record

of

some

428

companies.
Without elimi¬
nating duplications, without al¬
lowing for the fact that individual
registrations
bank

the

in

of

names

tual

brokerage house nomi¬
often represent scores of ac¬
stockholders, these compa¬

nies

have

or

nees

12,911,432 shareholders

of record.

That is about

as

far

as

the "factual** data goes.

Admittedly,

150

of

428

the

investor

10

owns

ferent stock issues.

hand,

to

100

dif¬

On the other

it is probable that several

hundred thousand stockholders of
American Telephone, for instance,
own that stock and no other. The
number of one-issue

or

two-issue

stockholders also would

run high
the niew* electric utility
operating companies which have

among
made

such

ward

local

intensive drive to¬

an

(or customer) owner¬
A great many employees
of big companies own some of
their
own
concern's stock, and
own no other.
This would apply

ship,

to

corporations like Standard Oil

of

New

Jersey, General Motors,
J.
C. Penney and Sears, Roe¬
buck & Co. It applies, to some ex¬
tent, to almost every corporation
in which there is

a

sizeable

public

iiiterest.
■£:\£ YY Y/ 'Y >i:> F

''•;/&f.""-

'

It

is interesting to note that
greater part of almost every
public-owned corporation's shares

the

are

held by a comparatively small

percentage of the total number of
stockholders.
makes

the

Not every company

information
public, but many that do show
from 80% to 92 % of all the stock

locate

Mission

United

Not given
5

16

87

.

Central--

I

,

>41

84

Niagara Hudson Power_Not given
Pennroad
.-•r 65 ;<;•■

17

Corp.

_

__

_

-

Corp

Standard

of

21

given

33

Not

—

Oil

80

Not

—

owners

of 100 shares or

and that the remaining 20%

units

Standard

91

Ohio—

of

United
U.

S.

-

Sulphur;.,

Gas

Improvem't

Smelting™—

thousands

of

will

debt

"lost"

"E"

bonds?

the

42

11
vv

'•

are

holders

of

interesting

have

57

senting

share¬
these 428

excess of

Corporation
little less than 4%
covered

in

by

Second,

it

does

not

privately

Third,

thousands

cover

of

Texas

owned

A

or buyers.
study should not be mis¬
interpreted.
It is not so much

intended to prove anything as it is
to
-present
information.
Ob¬

viously, it leaves unanswered the
question, "How many Americans
own

there

shareholders,

of

it

by at least 120,000
smaller
corporation

stockholders numerically ap¬

to

this

source,

The

wrote that it had 1,291 stockhold¬
ers of
record* but that a check of

hundreds of

are

Fifth, it makes

which

"indirect"

stockholders, the bene¬
ficiaries of insurance policies, the
depositors of savings banks and

of the

8%

larger
who

is owned by a very much

number

100 shares

own

recent

stockholders
or

in

re¬

to requests, follow (it will
that

the

.

per

the

first

column

of the total

cent

issue held by owners of 100 shares

of

more,

the

first

and that the second col¬

column—shows

or

ap¬

more):

,

;

>

the

owning 100 shares
.

-

.

..

stocks

are

cation."

In

dividends

received

other

for

owned,

constitute

the

words,

on

the

shares

shareholders,

many

relatively small per¬
centage of total family income-—
a

.

into consideration
ord other than

holders of

rec¬

individuals, and all
family units, is in¬

he members of

complete.
I

would

not

in

overlook

the

list

far

way, so

some

of

holders here presented.
no

share¬

There is

most companies

as

are concerned, to know how
many
stockholders are residents of for¬

eign countries and therefore not
citizens of the United States.
A
majority of the stock of Canadian

for
people who

instance,
are

United States.
holders

holders at the end of 1946.

ing

1947,
229

of

of

is held by
not citizens of the

Most of the share¬

Nickel

Plate formerly

the

in

companies

Gas

also

holders., of

are

in¬

were

practically

unchanged

during
the
year.
instance, lost three
stockholders of record during the

given

J

year.

Some Unique Facts

Some
about

of

the

unique

-

Over

1947

Bank

of

presented,
given
for

Cities

Service

no

comparisons

47

other

are

companies
which had 365,596 holders at the
end

of

some

1947,

cases

thereabouts.

or

these

are new

available.

porations

cases,
were

corpora¬

the

com¬

not readily

Only 40 of the
having

In

cor¬

10,000

stock¬
included for

stockholders'

lists

Studies for previous years show

General

Motors

Pennsylvania

are

been

returned.

the

corporation is
dividends as well

Central

Illinois

In

this

case,

holding

cash

as

shares

Public.

of

Service

Gas

Service

Radio

Corp.

ket

dullness.

be

to

compara¬

years of mar¬

The

of

millions

names
names

In

of

of

shares

stock

of actual holders.

most

cases,

from

brokers

to

V

split-ups

313,581

218,94$
138,910

118,625

117,525

122,802

127,40*

-

Corp. of N.J.

213,249 218.22*
100,911 « 99,975
Oil

144.527 140,26*

-

Calif.

Edison

Oil

N.

of

J.

;_•

105,166' '91,46£T
167.^464,000-

100,114'

——

Transamerica

*92;865Y

145,404 '149,444

•

S/;StecLA-—,238;467« 1228,47t»^

J"'—v;

V

V:'t'

75,000 to

100,000

'■

'

'

r

'

Canadian
Chase

Tobacco

84,539

Steel™

&

Bank—
Gas_

Sears,

the

Standard
Standard

Union
•

United

Oil
Oil

Co.—_

&

Calif.

of
of

&

1

Carbon-

Corporation
F.

—

Indiana™

Brands-

Carbide

Woolworth,

,

;

s

90,66489,199 >
90.172 ' 89,629 :

___

Roebuck

Standard

89.187
•' 87*,9.39

91.201<■' 87.61*9 VNickel

Copper

Pennroad

81,750

98,783"'97,8^5;

—

International
Kennecott

91,682'•90,854

Ohio—94,40$

Natural

Curtiss-Wright
DuPont

i

91,585"'91,52$

National

Consolidated

';1940^
73,675

<

81,836 ' 80,889

*

Pacific

Chesapeake

•' '

Stockholder*'
vM7 Y

the

are

155,197

141,293

Socony-Vacuum

Co.

176,490

156,842

249,440 248,424

Car

Southern

Texas

298,619'.
116,000

Electric—

Standard

U.-

116,600
164,753

436,510 430,384

Oil

Bethlehem

and

_

RR.
&

Public

great

activity

™

—

Motor

American

market

Edison—:

Electric

Sinclair

.

Southern

&

General

Packard

278,136

.

Edison

Commonwealth

Pacific

Mining- 128,827 122,649
N.A.__ 151,699 155,151

Co.

Commonwealth

that there is a tendency for stock¬
holders' lists to grow in periods of

slightly or
of tively stationary in

than passing interest.
Mid¬
West Corporation
(successor

Copper

America,

Consolidated

1946

& Tel.™„_ 723,874 696,06(1;

Tel.

Anaconda

of

interests

Stockholders

100,000

American

biggest in¬
crease in stockholders' lists, how¬
of Middle West Utilities)
in its ever, came directly after the 1929
annual report last
May mentioned market collapse.
This was ex¬
that it has "lost" some 1,000 hold¬
plained partly by buying on the
ers of record.
Mail sent to them decline and
partly by the transfer
dle

is

owners.

.

things shrink

more

if

interests

the

enhance

or

In addition to the 381 companies
for which comparative
figures are

cor¬

poration.

power

leadership,

capitalistic

corporation

•U. S. Steel, for

Oil

a

of

political

tect

lists

cases,

stockholders of

any,

its

political

able to marshal its power to pro¬

of the

here

mon

the

Nine

of New Jersey.
In holders or more are
but not all, the fig¬ which no comparison is given.
given do not eliminate Uncorrected for duplication, 428
duplications
between
the
pre¬ companies have 12,901,432 holders
ferred stockholders and the com¬ of record.

Standard

some

marshal

than

whereas the
roster of 143 companies decreased.

In other
still. are, owners of tions.
Chesapeake & Ohio. Most of the parative figures

ural.

lists

number,

were,, and

stockholders of Consolidated Nat¬

to

Dur¬

shareholders'

these

of-

creased

"padding"

has
per

own

by avocation"
"shareholders by vo¬

benevolent institutions, and mem¬ demic interest.
Comparative fig¬ whereas the dividends of a rela¬
bers of lodges and societies who ures (1947 vs. 1946) are presented
tively small percentage of all the
are shareholders
de facto if not for 381 companies, which at the stockholders (in number) consti¬
stockholders de jure.
It is only end of: 1947 (or for the latest ap-* tute the
major part of family
fair to say, in this
connection, that proximately equivalent date avails
makes * the,
any
study
of
the, number
of able) had 12,545,836 stockholders, income;;; ; This /aci
shareholders that does not take compared with 12,288,177 stock¬ labor union leadership better able

less. A few

statistics, obtained

noted

shows

of

people who

"shareholders
rather than

of more than aca¬

are

these

the political power of
country's labor unions.
The
application of this power, how¬
ever, is difficult because so many

Some miscellaneous facts about
the tabulation which
accompanies
this article

of

power

the

Stockholders

for

political

proaches

Almost Thirteen Million

thousands.

allowance

no

However,

does establish that the large
corporations of the United States

com->

corporations brokerage holdings revealed at
which have anywhere from one least 195 additional holders in 60
to fifty owners. Fourth, as
already brokerage accounts held by 255
noted, it makes no allowance for customers.
nominee

stocks?"

common

it

d

own e

a

and Canada are owned by mil¬
lions of people rather than by a
few "rich and well born."

according

people.

other stocks.

."

.

for

consider¬

a

This

more than
10,000
stockholders included

.

the. market

of

potential sellers

are

end of 1947, had
stockholders
of
record,

100,114
was

bank

20,000 shares,

at'the

pany,
but

very few banks—and many

no

Thinness

or

degree by the number of
people who own it and, therefore,

large number of large American

town

shares and

the

compa¬

able

holdings.
I believe the
condition may be "true of a

small

own

year

of

,;

"thinness"

these

covers

investors

lists

stock is influenced to

probably

individual

corporations

Poor's
a

shareholders'

of Market

0.6% of the total
stockholders.
There

of

Standard

companies
Moody's
Manuals.

nies.

only

number

the

the

leading oil and railroad

run

holding an aggregate of 20% of
the stock
outstanding, yet repre¬

same

of

may

in

(stockholder) accounts,
principally of large bro¬

made up

companies. In the first place, this
covers only about 7.1% of the
companies described in the

Records, and

relatively small increase last

nominee shareholders, the Sec¬
The figures here presented are
retary of the Texas company, Mr. of significance to traders and in¬
W. G. Elicker, wrote me under
vestors.
Other things
being
date of April 13 as follows: "We
equal, the average "thickness" or

are

the

list

&

It

Thickness

of
in

be¬

pay

forgotten

or

hundreds of millions of dol¬

not included in

record

to

of 1947, compared with 94,723 at
the end of 1933, and (4) by the

never

kerage houses and nominees, each

of the stockholders

compilation

the

suppose

upon

of

Series

holding in
most

you

of

given

Corporations Not Covered

some

278,136
holders,
compared
635,143 at the end of 1933
Niagara Hudson Power, which
had 66,894 stockholders at the end
with

and

many

Government

called

cause

into

the

to

Incidentally, how

do

States

be

liquidated,
difficult

cor¬

of Cities Serv¬

case

ice which, at the end of last year

Referring to the large number

8

Not

wide public distribution

small holders is being

many

lars.

'

36

v

75

Oil

•

given
84

Ky

Standard Oil of N. J.™

'

14

..

Radio

t

25
.

be

owners.

much

66
»*

small

will

.

86

86

Corp.™

York

21

doubt

no

56

V.-r

74

—

Montgomery Ward
Gypsum

New

m

,

short

a

had

Corporation is finally
it

:

a

in

rected in the

20

22

National

ures

held by
more,

necessary

these

31

>/■

tained

nominal value.
When Commonwealth & Southern

27

94

Telephone

Pacific,

Many Small .Holdings

time

one

17

Not given

Lambert Co.

it

these

In; studying the list, one is im¬
by the manner in which
(1) the new public utility oper¬
ating company shares have at¬

purely

73

61

N. Y-

Ins.

Refrigerator

of record that

reported

At
of

87

84

_

split-ups have be¬

numerous.

so

pressed

r

83

Firestone Tire

_

Perhaps it is

study

•

97

Edison..—

to note

accompanying

address.

no

Gas_„

Zellerbach—

Douglas
Aircraft..
Fidelity Phoenix Ins.___

extremes.

tabulations

come

'

Corning
Crown

21

Government




25

82

cent of holders

number

81

5

428 Companies Have 13 Million

no

time,
(2)
by
the
year to year as the over- decrease
in
stockholders
sus¬
distribution of the Doherfy days tained
by public utility holding
is corrected.
Many holders orig¬ companies, (3) by the way in
inally held very small units of which over-distribution to too

75
32 '

64

The

left

Works™

Natural

recent years as

and
doubt

ye.ars

holders

dropping

26

6,000,000 and 16,000,000—with a
figure of about 11,000,000 appear¬
ing "reasonable" on the basis of
a
"half way" point between two

stocks and bonds, other than U. S.

bonds,

Consol.

Insurance-

tendency has been less marked in

from

83

25

umn—which does not match with

esti¬

"Holders

Continental

Cor¬
divi¬

The shareholders' roster of Cit¬
ies
Service
has
been

84

23.

(July,

the

Not given
—...

Solvents

82

or

"refined"

Foods™-

Borg Warner
Commercial

Gulf

that the Federal Reserve Bulletin

follows:

21

Texas

be

1948)

66

Foods

67

sponse

as

18

84

bonds, the "unrefined" estimate of

mate

Best

73

Co—

securities other than government

8,640,000. We hasten to mention

.

Beatrice

Copper—™

Stewart-Warner

to

of the number of people'owning

4.5 million rises to

15

many

followed by a growth in the num¬
ber
of
stockholders,
but ythis

forgot they owned it. Some have
died.
Others have moved and

or

More

74

the

West

t

percentage

the

Shs.

or

More

Shoe-

smaller

West

of

out

for

cannot

Middle

Middle

were

ranks

many

100

Texas

esti¬

there

Owning

The range is somewhere between

per

48,400,000 made in early
by the same organization, re¬
vealed that 4,500,000, or "almost

Anaconda

Sperry

The

every

1948

Holders

46

Sinclair Oil

the "popular"

a

mated

Held by
Owners of

92

Internationa]

almost

% of

Products

have the earmarks of being based
on some effort to "count noses."

100,000, companies, each with 25,000 stock¬
16,666 fam¬ holders or more, probably have
the largest stockholders' lists of
ilies.
American
corporations.
A later sampling (Federal Re^ any
serve Bulletin for July, 1948)
of Admittedly, there are many dupli¬
cations—especially
in
Cases where
3,500 spending units out of an esti¬

^awUrig .of six UQits

Home

Hussmann

are

dend

it

owners

course,and

poration

Stock

■

Shs.

Brake

sampling,

estimates

the

'

were

between 22,355,000 and 27,355,000.
In 1939, an Elmo Roper sampling

,

of

for

Of

Utilities

109

Amercinan

*

opinion, this writer believes that
the percentage of error in this
6,000,000 estimate is considerably

record

,

Most

%

Amer.

old—on
page 175 estimated that the "most

.

Own

persons

bonds."

Some

years

by interviewing only about
5,000 persons arrived at figures
which were refined by the TNEC
(Monograph 29, page 167) to in¬
dicate between 8,000,000 and 10,000,000 people owning common
stocks "with a figure of about 9,000,000 appearing the most likely
value."
•
r
"

of

Few

1948.)

Committee

|(TNEC), published in 1940—from
data

and

Federal

A

find.

W.

_

88,940

92,917 F.

92,682

89,664 g

90,850

89,31$ '»

97.495

97,237

81,786

80,687

75.933 "15,499

92,750'r9G,44£
79,906

16,117

,

Volume 168

Number 4730

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(919)
30,000 to 73,000 Stockholders
'

,

'

J94?

1947

Cincinnati Gas & "Electric-

41946

CIT

American

Radiator &
Standard Sanitary

'

Atchison, Topeka

61,135

._

Corp,

63,177

62,793

56,515

56,642

—

Missouri-Kansas-Texas

8,612

6,518

4,72«

5,849

8,729

8,291

8,14^

33,562

25,623

8,460

7,56#

86,306

58,300

67,174

55,006

53,000

International

Telephone

56,284

57,920

Irving Trust Co.
Massachusetts Inv. Trust—

59,178

59,443

62,931

61,909

Montgomery Ward

76,084

National

Biscuit

65,660

68,945
64,660

National

City Bank

67,319

68,913

National

Dairy

67,256

67,308

66,699
59,882

62,717
69,555
58,040

66,921

66,685

76,624

71,449

64,660

63,365

New

York

__

Products—

Central

_

Niagara Hudson Power

Pennsylvania
Republic
R.

J.

Power

Reynolds

Swift

Tobacco

Co

&

Union

66,894
Lt.

&

Steel

Pacific

United Gas Improvement—

Westinghouse Elec.

&

Mfg.

.

Wisconsin Electric Power—

56,264
53,363

56,479

71,435

68,428

63,806

23,587

Mining

National

&

Container. Corp.

Baking

Continental Ills. Natl. Bank

Continental
Corn

Insurance

Exchange Bank, N. Y.

Crown

Zellerback

Crucible
Curtis

Steel

Dayton

Power

Deere

&

;

&

Light

Co._

Diamond
Dow

:_

Publishing
;

Match

.

Chemical

Electric

Power

&

Light

Equity Corp.
Fidelity Phoenix Insurance
Firestone Tire
Florida

&

Rubber

Sulphur
American

23,000 to

Stockholders

50,000

10,823 ) 9,747
16,739
17,474
14,903
14,468

New

18,452

Alleghany Corp.

____

Ailis-Chaliners
Amer.

Gas

&

Electric

Amerex

Holding
American Airlines
American

Can

American

Power

Armco

Shares

Light—
Superpower,
:

American

Steel

i

-

-

Atlas Corp.
Rank of Manhattan^-

Aviation

35,218

82,935

33,532

32.500

31,599
43,470

48*000

85.684

*82,780

24,721

25,248

Philco

11,445

16,989

23,162

22,925

14,586

13,887

Remington Arms

17,800

17,77*

St.

13,811

11,679

Scott

17,764

12,571

Seaboard

18,656

19,286

Sharon

Hi,271

17,08#

Sun

12,287

12,531

Tampa Electric

29,691

26,320

29,606

28,701

26,172

26,336
29,200

Chicago

A

North

Western

25,876

17,700

Electric

Illum.__

31,829
28,455

6,725

29,375

Commercial Credoit

Continental Can
Continental Oil
Corn

Products

______

33,818

33,567

_________

28,681

27,450

Refining-—

25,068

25,430

<

Detroit Edison

40,224

Distributors Group

43,335

41,500

88,506

47,508
29,750

42,070

Erie

RR.

Gillette Safety
Goodyear
Graham-Paige
Greyhound

Razor
.

—

Great

Northern

Incorporated

Railway

35,712

Investors

International

24,644
42,354

28,717
25,264
32,347

Harvester

__

42,060
85,708

36,887
44,300

Mission
Nash

Kelvinator

National

New

Distillers

York,

_____

Chicago

American

Aviation-

North American Co.—

Northern
:

Indiana

Paramount

Airways

Pictures

Pepsi-Cola

ii'

——_

*

&

Bobbins.

Gypsum

National

Lead

England Tel.

_•

______

Western

Owens-Illinois

Glass

Pacific

Lighting
Pittsburgh Plate

Pittston

Public Service of

29,861
33,588

Putnam

F'und

Drug

44,814

31,889

28,529

Servel

29,625

5,158

Electric

—

34,694

Stewart Warner
Studebaker

_____

Timken

27,335

46,291

44,253

Tricontinental

44,460

43,467

32,962
41,640

85,735
41,569

United Gas Corp.
U. S,
Gypsuin_—
U. S.

Remington Rand

25,373

24,833

United Stores

Southern

48,205

47,563
29,320

Virginia Electric &
Wilson & Co

Youngstown Sheet

Procter

&

Gamble—

—

i;Pullman, Inc.
Pure

Oil

Pacific

Sperry Corp.
Sunray Oil

29,037
32,660

31,100

Texas Gulf Sulphur

33,476

33,583

Tide Water Assoc.

36,679

86,8!) 7

:26th

Century

—«

Oil

Fox

Film

36,767
37,163

37,273

37,284

42,801

Fruit

47,763

United Light
Railways—
United Shoe Machinery—

U. S. Rubber—
YVarner Bros. Pictures
Western

10,000
'

24,478
28,186

2G,582

.Adams

1947

Express

12,506

American

Zinc,

13,051

10,173

'8,824

26,363

13,854

Bridgeport

19,799

19,91.1

Alleghany

Ludium

Steel

13,393

Allied Stores a—Allu; Chalmers

.—

,

13,069

Brown

California Electric Power
Canada Dry
Ginger Ale

America-

13,662

17,801

&

F"oundry_

16,293

15,720

18,567
13,997

11,836

American

22,193

24,446

Locomotive

A^erkfin Viscose
American

________

Woolen

21,447
22,606

Baltimore & Qhio—

Bankers Trust'
BarnsdaU.Oil i-

,

-

—

Best.

]

Boeipg. Airplane
Borg-Warher
Mfg.

Budd Co.

Butler

Conlon-Moore
Cooper-Bessemer

10,294

16,962

Corning Glass

17,644

15,742

20,358

19,566

Continental Steel
Deep Rock Oil-:!

15,228

14,666

Dewey

15,869

13,149

Ekco

24.951

25,139

Products
Elliott
Co.__

it, 743

14,61

Emerson

Central

:

Arizona

Power

Central
Gas

•

Light
I.

&

Electric

&

;i

Illinois

20,633

lT,754

12,447

16,326

Columbian

19,158

Consolidated

20,697

Delaware &

17,275

22,313

12,498

ii;72i

19.501

19,852

18,727

19,374

13,816
13,240

13,587
14,039

13,238

8,514

Coppermines.

5,484
9,252

7,566

Douglas Aircraft

19,967

9,622

El

i___

11,778

Electric

16,835

10,620

Empire District Electric

16,221

First

26,026

2(),148
19,286

Gcebel

Brewing

Gulf

13,17413,000

+

States

Houston

Utilities—
Car

Lighting & Power

5~385

L

7,448

7,794

6,160

6,188

9,771

_;

8,555

7,996

8,566

6,961

12,604

15,426

Idaho

18,968

18,831

International

Calumet

Hecia

22,479

7,534

23,806

7,759

Kimberley Clark

13,200

8,545

5,660

12,300

Koppers Co.

8,391

6,934

5,134

2,165

5,943

6,077

&

Cons—_

Bank

Chicago Corp.
Chicago,
Milwaukee,
Paul

&

Pacific

_•

Detrola

18,167 ;'18,041

Lima-Hamilton,

24,755

25,507

Link

23,196

23,473

Louisville

St.

Long




Belt

Bell

Lumber
Gas

&

Electric-

8,392

8,14

8,903

9,263

first

attempt by
advantage of
legislation
(the so-called Mahaffi« Act) to
affect a voluntary
readjustment
of its stock capitalization.
Under
similar temporary legislation in
the past,a number of roads have
new

been

successful

their

debt

in

revamping
by agree¬

structures

&

3,676

Share

1,273

Noblitt-Sparks Industries..
North

American

Oklahoma Gas

&

4,762

3,796

Pennsylvania Cent. Airlines
Pennsylvania
Salt

8,590

8,712

4,195

3,846

Creek

Poor &

Pocahontas

1,002

Co

Oil

—

Mfg.
;

—

Steel—

Oil

(Alex.)
(A.

Carpet

Greyhound^

E.)

Bros.

*

Glass

Shovel

Carbon

U.

Intl. Securities

&

Wood

2,364

2.240

4,924

5,100

2,908

2,165

3,119
2,153

3,519

2,869

(Alan)

Steel

&

Co.

office

Co.

and

in

has

H^rry

manager

indicate

mon.

382

analysts

as

whether

such

the

first

stock

test

-as

to

recapitaliza¬

This should have been
705,of preferred and 1,-

409,346 shares of common.
The
charges coming ahead of the com¬
mon stock, and estimates of earn¬
ings on the common stock, were
figured on the correct capitaliza¬
tion.

^

There

one.

are

com¬

outstand¬

ing

227,443 shares of 7% cumu¬
lative prior preference
stock; 387,shares

of

cumulative

first

preferred stock in five series with
dividend rates ranging from 4V2%
to 10%; 31,498 shares of
6% noncumulative

preferred

394,405 shares of
The

v.

,

•

Greenfield, Lax Offers

Sterling Oil Slock
Greenfield, Lax & Co., Inc., un¬
derwriters, are offering for pub¬

last

prior

stock,

common

dividend

preference

paid

stock

distribution

975,000

shares of

QiL> of ^Oklahoma;

.

ai 30c.. per share,

<

v,, h,

Inc.

1

It is the present intention of
the company that the net
proceeds
to be received from the sale of

975,000 shares of its

will prove feasible.

463

and

stock.

are

of

(some of which

Jan.

the first preferred

are presently un¬
contract), for the company's

der

pro-rata share of the cost of drill¬

ing wells, for testing and devel¬
opment

of its properties

working

capital.

located in

are

The

and for

leaseholds

Oklahoma, Kansas

arid Texas.
The company owns interests in

the

on

was

common stock
to be used for the
acquisition
additional leasehold interests

oil and -gas

leaseholds, and in ad¬

4,253
4,621

2,196

4,260

4,416

3.973

4.186

780

839

structure.

on

If

this

different

many

to

rears

stocks

the

receive

over

the

a

branch

Building.

cover

in the ag¬

en¬

ar¬

Steiner, Rouse Co. Opens J
Uptown NY Branch

old

Rouse

&

Company,

members of the New York

{

Stock.,

com¬

stock.
The total of 1,040,809
shares of the various stock issues

now

acquisition

Steiner,
the

new

holds contracts for.

gregate approximately 4,300 acres.

dividend

plan all of

would

it

suc¬

to contend with.

Under

which

gas

such

,

substantial

quisition of further oil and

so
deal

couraging to such roads as Maine
Central ; and
Missburi - KansasTexas which also have the prob¬
of

dition has under contract the ac4

for

plan, with

stocks

with, can be consummated
cessfully it will certainly be

lem

;

shares

The oil and
large dividend arrears (over $69 leasehold interests.
millions) which obviously could gas leaseholds in which the com¬
never be paid off in cash, and at
pany has acquired an interest or
the same time
simplify the capital

Greenway

Farnairi

estimates

3,207

Exchange,
of

a

the opening

announce

New York branch

office

at

outstanding

would be re¬ 1440 Broadway. This new office
placed with a single issue of 811,will be under the managership of :
268 shares of $100 par value ;com-:
Louis Chasiri, Bernard. Turtle and
mon
stock.
There
would

R.

head of

years

mon

taken,

at

3,546

Central Re¬

has opened

the

ni^fribei* ';pf

This newest step will be fol¬
lowed with interest
by railroad

2, 1932 and

Opens in Omaha, Neb.
—

the year

stocks Oct. 1, 1931.
The object of
the plan is to eliminate these

Central Republic Co.
OMAHA, NEB.

low for

3,728

2,160

Pulp & Paper

was

1,467
3,912

4,750

.

Va.

5,376

4,609

Engineering & Fdry.
Foreign Securities.

S.

4,693

3,918

U. S. &

West

2,226

905

Thompson Products
United

2,251

2,060

Inc.

United

865

3,779

State

Rhcem

so"a'

ago.

plicated

1.2(H)

Electric-

new

Present

Sterling

did

particularly

2,966

Rayon

wise.

lic

The Bosto'n & Maine stock
cap¬
italization is a

Aviation—
Bond

871

a

itself

3,726

National
National

____

to

among bond holders.
As a
matter of fact, Boston & Maine

tion

•t

reaction

reorganization

ment

1,152

9,556

Tractor

the

3*000

Ivnudson

investment business of

7,671

9,766

marks

1,506
2,795

Morrison

Motorola, Inc.—
Namm's, Inc.

public

Caterpillar

Chemical

This

2,366

8,987

California Packing

Celotex

3,860

915

9,490 h,:
6,275 f:
5,506
5,665
5,639

9,849

Power

Aside from the Southern Pacific

increased dividend rate, about the
only news of any moment in re¬
cent weeks has been the
filing
of a proposed plan of stock
recap¬
italization" by Boston &
Maine

3,495

—

Boat

National Bank, N. Y.
Fundamental Investors

Hudson Motor

______

4,200

market

succession of

'

4,925

immediate

high¬ 1948 pro-forma earnings of per¬
state¬ haps $7.00 a share on the new
ments, with every indication that common under the
proposed plan.
the saime will be true of the
Correction: In last week's col¬
August results, their stocks have
umn we gave the stock
capitaliza¬
not caught the
imagination of any tion of
Chicago, Rock Island &
great number of investors or spec¬
Pacific as 914,527 shares of pre¬
ulators. vv
ferred and 816,303 shares of com¬

6,938

5,566

15,544

13,915

5,935

a

2,800

Thew

<»,<;64

past week of

1,132~
3,415

Thatcher

9,260

Dorsett Fabrics

23,691

1,181

3,279
4,922

the

was

best that could be worked out for
this complicated situation but the

ly gratifying July earnings

2,806

Talon,

6,411

roads have had the benefit in the

2.666

8,712

6,303

3,645

1,291.

Fund

Stores

8,695

385

1,411

Perhaps the formula

;

.

any railroad to take

1,482

0.05

general

1'

Mercantile

Southeastern

6,748

3,!)44

1,634

Michigan Chemical
Mining Corp. of Canada—
Moore-McCormack Lines

Sterchi

6,830

3,136

4,444

0.07

41/4

fell victim to the

too

1,752

6,966

7,500

3,130

3,628
2,071

6 % non-cumulative
pfd

Common

Following

1,580

8,882

7.000

'

2,174

4,600

meeting.

—^

7,089

7,322

'

3,758

4,660

Corp.—.

8,535

15,590

:

*'

morning the

Lynch

Smith

8,630
5.183

2,906
.

of the

Loomis-Sayies Mutual Fd._
Leomis-Sayles 2nd Fund-

7,767

9,417

2,544

2,800

4,497

7,698

7,246
16,643

a

2,584

3,147

Oil—

Skeliy

9,656

2,389
'

7,078

Carbon

Electric

L

—_

Coal

Knickerbocker

Ruberoid

9,757

3,24S

4,724

8,660

Sharon

7,289

3,363

4,249

3,307

8,666

9.424

2,306

Chemical

7,046

5,999

4,657

2,366

9,7<E>

9,297

•

4,760

3,024

9,060

5.825

.

3,845

3,038

Creek

Quaker

1946

273
■

4,(M)7

2,260
1,464

7,418

26,884

11,731

11,961

!

from

rose

high of 118%

1%, Subsequently recovering part
lack of interest that has charac¬
'of its loss.
The' preferreds also
terized the entire market for a
encountered disappointed selling
number of weeks.
although the declines were na^
Despite the fact that the rail¬ turally not so drastic
percentage¬

1,717

Water

9,536

23,657

Paso

16.886

17,103
22,620

___„

the

of

shares

1948

Monday morning the stock again unfavorable.
The common: stock
pushed forward to a- new 1948
dropped from its week's top of
high (119l/z) i but later in the iday
it

-i+ifc,

4,642

;

:

Foods

Lion

2,579

4,670

Works

Hussmann Refrigerators
Illinois Terminal RR
Island

4,641

Watch

Hackensack

16,871

4,593

3,431

Shoe,.

Hamilton
Hunt

4,111
2,768

2,647

City Steel—_

1M00

11,89
14,998

3,022

2,414

Group—i-iiiJiu.

12,73

11,107

;

3,938

3,278

1,428

the

new

-

.

3,765

*

Dairies—..
Gaylord Container..
General Amer. Investors

Hcyden

1,600

Life

—

Granite

8,781

Gen.

Electric—,

General

2,909
2,438

4,764

Almy—

14,633

6,245

.

22,.755

&

26.890

14,519

22,208

Bros.

Connecticut

13.196

21,025

19,749
14,20.)

Bristol-Myerg

: <

14.635

Hudson—
Doehler-Jarvis

20,250

Blaw.-Knox.u—i.
Blue Ridge

Briggs

22,016

Bigelow.

:Case, ,J. T._.

18,641

19,098

Ilalwln Locomotive

1

18,700

of

Car

Gas

day

571

18,949

6,500

Brass

24,03#

Aluminum Oo.

Sullivan

Serv.

&

18,742

America.il. Cyanamid
American Home Products

"

&

Pub.

17,527

Staley

Works.

Brooklyn Union:
&

Vt,

13,243

&

24,158

American

Chamberlain Co.

Tubel

Lead

Affiliated

Fund

16,462

17,129

Cork

Aetna Insurance

Air iRcductien

15.950

17,525
12,390

Smelting
Armstrong

Beatrice Foods
Boston & Maine

—

Cent.

Hill

a

announcement
that
the meeting
had been merely routine the stock
broke to 114%
that afternoon.

2,318

.

to

by the middle

1946

387

r

Bolt

19,435

II

Machine

Thursday,

1,766

-2,700
2,600

18,951

11,253

"B"

Fund

Campbell-Wyant

15,816
17,930

~

6,171

2,274

Bunker

10,000 Stockholder,s

American Stores
American Water

1946

Bullock

Fund

Decker___

Buffalo

17,512

Notell

7,321

993

Appliance

12,660

23,058

Chemical

T.)

24,1 Hi1

15,142

6,034

3,366

__:

Fund,:

12,660

21,042

&

5,071

7,26(8,706

Mfg.

23,992

Power-

Foundry

26,000 Stockholders

to

9,979

&

Pond

to

American

"f

*'f T

Smelting—

Cable

29,522

26,575

27,391

jLZ

American Brake
Shoe—
American Cable &
RadioII
American Chain &

27,783

31,981

Union

YVestinghouse Airbrake

——

Alaska Juneau
American Bank

42,160

25,500

—-

11,934

1947

28,125

27,945

Air

3,000

35,190

Union Oil of Calif

United Aircraft
United

Roller
BearingTranscontinental & West¬
ern

Black

11,950

AxIeJ

24,471

12,866

12,195

2

1

26,100

Penney——

13,144

18.381

Texas Eastern
Transmission
Timken Detroit

31,939.

Home

22,712

State Street Investors
Trust

34,005

(B.

Bendix

14,547

Elcc.__~_

&

Standard Oil of
KentuckyStandard Oil of Ohio—

21,693

Babbitt

10,800

16,660

Southern Railway

49,962

12,337

17,362

12.636

45,777

Gas

13,412

0.47

8,110

Hocking Glass

10,903

first preferred

6,613

9,300

17,125

0.37

"B" 8%

—6,559

16,500
24,674

Electric

div¬

113

Metal—!

Houghton
Houghton

extra

2.75

first preferred

•

9,292

News—

24,794

an

prior preference!

"A" 5%

6,581

7,260
!),500
6,148

3,291

Potash Se

that

rumors

7%

coin.

7,106

American

14,665

—

On

1

.

9,283

L"

;

American

Amer.

opening session of the

week.

new

on

6,581

13,166

17,428

Scranton

6,561

put

late last week

own

Shares

6,854

21,631

Anchor

in the

also

common

idend would
be
declared, arid "C" 7% first preferred____ 0.44
perhaps a stock split announced, 'D"
10% first preferred^__ 0.54 C
at
the
directors'
meeting on "E" 4y2% first
preferred— 0.35

22,344

14,839

San Diego Gas &
ElectricSchenley .Distillers

29,494

-

Employers

32,350

6,202

Fe

show of its

.6,864

Securities
Amer. Hawaiian S. S._
American International-

Foremost

30,944

a

current

Corp.

13,574

22.500

7,581

Santa

and

Insurance

Ex-Cell-O

___'

7,986

1947

Aetna

18,44

25,574

29,110
47,434

11*696

10,367

18,654

—

&

Than 3,000 Stockholders

14,600

28,560

Standard

16,507

10,436

Less

12,960
—_

along

9,222

6,760

Motor

18,932

ColoradoPuget Sound Power & Light

5,435

8.636

2,536

i.

Steel

Glass

Co.

5,703

—

the rest of the group
with it. Atchison, Topeka

carrying

5,106

Trusteed Funds—
Pipe & Foundry.^—

—1—

28,186

C.

Phelps Dodge
Phillips Petroleum

"

——

26,760
27,820

J.

Tel.

&

Otis Elevator

Rexall

16,92

14,620
:

Northern Natural Gas
Northern Pacific

28,988

12,720

9,138

16,421

16,192
.

Alkali

25,360

29,170
33,724

Oil

Pan American

>

York Stocks
Noranda Mines

Public

Service

Ohio

—

Nashville

27,270

31,284

-

_____

27,421
28,388

16,969

Axe

—

New

St.

&

Louis
North

&

&

14,683

7,179

9,363

7.637

Willys-Overland "

Apex

National

Norfolk

White

Axe

National Cash Register
National Fuel Gas

New

24,589
12,141

11,897

Trucks

McKesson

Wheeling

16,986

26*114

29,314

Corp.

Corp.

Mathieson

23,956

16,650

7,660

a

out

.

Bag &. Paper

21,259
24,948
11,983
10,245

9,900

5,600

Line

Chemical

S.

6,646
8,371

7,670

Air

Steel

Union

11,987

Manhattan Bond Fund
Marine Midland Co._;

32,115
40,000

49,247

Manufacturers Trust
Middle West Corp

Mack

19,991
35,196

Kalser-Frazer

_^____

Savers

Louisville

37,048

Keystone Custodian Funds_
Kresge, S, S
Kroger Co.
Uibby, McNeill & Libby
Macy, R. H._
—

Life

;

Paper

U.

Navigations"» 12,165

Libby-Owens-Ford

29,973

26,506

■

___„

St

Lead

Aeronautical

Laughiin

Lehman

Joseph

11,606

,14,217

Lambert Co.

43,624

44,340

&

Lehigh Coal

88,207

Dividend Shares
Eastman Kodak

Light

Johns-Manville
Jones

Coal

Union

_____

;

—

Underwood

Business

Machines

Corp. ■
Pittsburgh Consolidation

19,133

whole has been
unable, up to the present
of its rut there have
been one or two
exceptions to the general lassitude in the
railroad picture.
For in¬
stance, Southern Pacific common responded
well to the increased
dividend rate, without, however,^—
as

writing, to shake itself

7,662
8,366

&

Tennessee Gas Transmission

North

International Paper

Water

Power

Textron

_

of

America

30,925

29,441

128,241

31,225

__

Co.

——-

Pennsylvania

19,918

Copper

Insurance

—__

43,275

38,053

&

Oliver Corp.

13,24#

Central C

Inspiration

International

Celanese Corp,

;—

Illinois

34,352

35,933

Burroughs Adding Machine

Cleveland

'

36,000

Indianapolis Power

.4 29,994

f

Brazilian Traction $

•

Hupp Corp.

48,626

:

■Armour A'Co,.'.:—
Atlantic Refining

Bendix

Houdaille-Hershey

18,777

37,000

Business

American

28,739

28,865

Trust

10,250

Insurance

27,103
27,948

;

Fire

York

13,347

Guaranty Trust
Hartford

Newport News Shipbuilding

19,646

While the1 market

6,951

18,653
11,481

19,887

8,43 \

EIcc.

;

11,509

Trans-

31,478

&

16,966

Baking

31,178

Corp.

Gas

;

Goodrich, B. F

1946

; 1947

Assoc.

11,666

portation _____11,828
General

Investors

Wide Securities

England

1

Power

Freeport
General

Nation
New

11,545

Continental

56,080

6,78'.

5,062

Mountain States Power—
National Container

57,638

Utilities

6,006

7,666
5,000

13,754

Ulcctric Bond

Foods

—

11,158

Consolidated Gas, Light &
Power (Bait.)

Public

Co._

24,897

Consolidated
Smelting

General

&

15,300

59,379

dencral

5,588

Corp.

23,912

49,121
55,721

Share

Mead
Merck

11,275

56,445
66,250

&

MacFadden Publications

19,171
21,183

Colgate-Palmolive-Pcet

66,376

Co.

24.666

19,060

21,601

23

19l6

Columbus & Southern Ohio
Commercial Solvents

Chrysler Corporation
Columbia Gas & Electric

Rorden

24,382

Financial

Coca-Cola

Saiita

&

Fe

AVCO

61,671

194)

^7,94)8

be

no

Greenway/ formerly
K.
preferred stock left outstanding David
Perlman,
formerly,
Greenway 8c Co., "Will be The following tabulation shows
partners Scheer & Company. As¬
of

the

new

office.

As¬

sociated with him will be Vina P.

the
new

proposed distribution of the
stock for each share of the

old stocks outstanding,
including
Aitken, Charles E. McElroy and
•claims for back dividends where
Edwin C. Sorensen#
.itljjBkifcfct. such claims

exist.

sociated

will

be

with them

Charles

and Gershon

as

L.

heretofore

Rosenzweig,

Feigon, Manager Re¬

search Department.

>

^

24

THE

(920)

COMMERCIAL &

FINANCIAL: CHRONICLE:
test for

Proposed Changes in Federal Taxation
carried* forward

(Continued from page 2)

,

dispOfiiAuuit ua tuw.
In
other woras, tie eouid eitrier settie themr or try them, or stipu-

late

;iacti

the

unfair to

new businesses, because
they do not have any carry backs.
In the Treasury's recommenda¬
tion, it was suggested that there
be. a one year carry back and a
five year carry over.
That is the
way that it is included in the bill
as it passed the House.

< proceuure,
tne . tecnhicai
controls, the disposition " of

present

1

staff
the

'

Counsel

really has very little to say aoouc
1 emphasize we. are studying
that# but it does fit in more or
less with the Bond • Committee
it.

.

Chief

the

and

case

■

.

Report which came out some time
after our study had begun. -, I

Another important

think it might be worthwnile be¬

get away from administra¬

fore I

tion, to mention that one thing
has just happened which seems to
me
to be quite important.
The
Internal Revenue Agents' .manual
encourages agents and other "of¬
ficials in the;tield to request, ad*

to

definition

The

law

provision is
partnerships.
partnerships to

of

defines

partners

-though

even

their interests may have been ac¬

quired -by gift.;, Of course, -with
the so-called community property
feature in the law. now, fhat is
not so important from the hus¬
band and wife viewpoint as it was
Act of 194'8, but it
tremely important in the

parent

your

and

child

ex¬

of
partner¬
case

ships,
In other words, it. will be
personal property tax which is,
after this bill is enacted,r to give

;

on

child

a

interest in

an

g

partner*

the Bureau abolished
that practice, and now if any mat¬
ter is referred to Washington for

ship.

ruling, the taxpayer's represen¬
tative is to be advised.. You are

other courts got off on a real tan¬

:

By ; the way, .* I have always
thought that the fax court and

his kids

your favor, you will be given
opportunity of a • hearing in
Washington on it. That Will "re¬
move
a
very irritating situation
that has existed fpr the past, sev¬

the

a

from administra¬

Y

ou aiso,

A

I presume, arc

which he

said

the

tax

from

.equities

to

were

eliminate

structure

- its;
in*
in; administrative J and

other defects. In addition to those
recommendations of the Treasury,
the
on

staff of the joint committee
Internal Revenue taxation, the

and means and the finance
committees have: been studying

ways

the problem;; I am going to men¬
tion certain uther -things that are
in that bill.
I think they justify
the time, because

as

I

<=ay,

I

am

convinced that th* bill will be
enacted in substantially the same

form

as

R; now

One of them

missioner

that

have

you

recog¬

is

that

notified;

(3)

Within

you

might know

the

the

parent

and

child

Special Surtax

on

Corporate

Earnings
bill

also

contains

provisions

helpful

very

dealing

that

levies the special ^surtax -to

corporate • earnings, - beyond
the
reasonable needs of the business.
The bill; provides' that the burden
of

in

a

Also, the Sixth

little

accumulation exceeds the

an

be

cult,. if you have a partnership
and is recognized, no government
official
your
we

it

has

the

right to rewrite

agreement for you, ; and
going to recognize it

are

was

good

written and that

seems

so
as

like

sense.

come

of the

olayod

ooajnQt

the

vears,

in¬

and

the balance not absorbed may be




death.

times

ac¬
•

people

situation

a

*

where

ency.

,

this is expand¬
ing^ the present rule in the case
of

the minority stockholder. I, If
minority stockholder wants to
make ;a: corporation: pay a div¬
a

idend he has to go ih and bear-the
burden proof to show it is rea¬
sonable and proper
And

that it do so.
Commissioner will

the

so,

have' that burden in the situation
mentioned.4

.

Secondly,'

term
capital
gains would not be included in
the tax base upon which the tax
is figured.
However, such gains
would

long

into

taken

be

account

lower

Third, dividends paid within 7?
days after the close of the taxable

could, at the taxpayers elec¬
be deducted in computing

the tax.

You

as

taxable
the

having been made in the
year.

way,

Also
the

That provision,

by

is retroactive to 1942.

the

new

-

bill

eliminates

"Philadelphia Nun"

situation

—that

is, dealing with contribu¬
tions by individuals.
You will re¬
call that the law used to be if an

individual
ductible

itable

contributed

of his

if
of

90%;

the

Double Taxation on

there is

I think

that you will
the

of

rule

see

replaceThey1 are

Dividends

good chance
the elimination
a

double

so-called

taxation

it

as

the amount

incomes
same

the

general thought,^ yod' ^iii

that

see

of that, dividend

Wo

intercorporate

dividends

will no longer be taxable. As yoii
large know, 15% of them are now sub¬
know, the ject to tax.

your

As you

going to see a provision
for a gradual transition
to 38% and no income will be
taxed above that. They had hoped

\ As I stated a minutq^ago^ lot^
[and lofs of times you have ta 'cpnT
duct

business

a

than

through more
corporation, and it is

one

are

enacted
up

that

would be in

versial

the- rioncontro-

bill, but, astonishing

as

it

may seem, some controversy did
then arise aiid it does cost a little
revenue than they first an¬
ticipated, but I think that will be

more

enacted.

just not right that these inter¬
corporate
dividends
should
be
taxed.

\

■

Also, you are going to see the
2% figure for
consolidated re-r

You

going

are

to

see

or
an

together, and, when
enterprisers conducted through,

several

corporations,

in

get the

right figure,

you

ing

with reorganization of
porations.
As you know,
has

been

cor¬
ever

possible

eithei

to

scramble several corporations intc
or

fewer

corporations,
one

corporations

twe

or

few

intc

without

tax

a

or

liability if; youv follow; th<^ vdlfec?'
tions of the statute, and that is
the way

it should be.

It is necessary in
business frequently

ever,

the conduct of

of

to make those
reorganization.
How¬

our

learned Supreme Court

kinds

Accelerated

some

since the advent of the income tax
•

more

less fits in

to
should

order

returns and you

shouldn't be penalized for it.

changes in the reorganization pro¬
visions, that is, Section 112 deal¬

it

This all

turns knocked out.

file consolidated
Taxes in Reorganization

more

year

than

corporation income between $25,000 and $50,900 the rate is 53%.

unscramble

Another

things

maximum corporation rate now is
38%. However, where you have a

one

Corporation Contributions

other

several

rates

to

unreasonable.

isought

you

property first/'
going to change that.

will

That

|

,cause

; merit

^

are

corporations.

i

,

other words,

In

VlYell; you dont come under fhe
invohintafy provision features be-

applies to corporation
dividends.: You will recall; th^t
in the early; days of our income
tax we did riot tax the individual
corporation dividends.
The* Brit¬
death,, and you can/overcome that ish have always given a credit for
dividends received.
The way this
presumption.
Those things are in this non- ,is proposed to work put is;, some¬
thing like this:
^
contrqversial bill and you, can
Suppose that a corporation
pect that they will become law.
tax*,
I think that that is as certain as mak,es money, pays a 38%
and pays dividends. You will take
anything is in taxation.
the dividends into your income
but then get a credit up
fp; 38%
Miscellaneous Revisions '

at

on

has taken upon

Depreciation

Another

thing that is very well
thought of, and, I understand, par¬
ticularly well thought of by Mr.
Dewey's financial advisors (which
leads me to .believe that it may
become law)
is a provision for
accelerated depreciation on new
facilities and; equipment..
There bas berip quite a bit
discussioPi pf ;thi% oyer aiperiotl

of
of

years. ; Even, the
late President
Roosevelt reeommepded it.
The
idea was as follows: Supposing
you

have

could

an asset of which
depreciate 50% over

you

the
Suppose you.
asset that costs $100,000

first 25% of its life.

have

an

itself the task of
really messing up the reorganiza¬

a 20 year life.
You could
take half of that or $10,000 a year

tion provisions.

over

They went along

and has

the

first

five

years

of

the

for years and years ,so

that every¬ life of the asset, the idea being
body understood them pretty well, that, by doing that you would en¬
then, a few years ago they an¬ courage the acquisition of new
nounced

rule*

the

business

purpose

assets

which

would,

in turn,

en-

They said, "If you have a courage business.
income, it was de-,
reorganization and admittedly it
A lot of people think that;
contributed to char¬
fits the statute, if, you didn't have
are at least in the beginning of $
related
non-taxable a valid
-

business purpose, we are

Getting on to some more things things. In the current payment still
going to" tax you." But then
going, to have, in this bill act,., that is inadvertently knocked nobody has defined business pur¬
—one of them the gain or loss on out.
This new bill puts it back. '
pose.

recession

now

and,

in

the

long

it wouldn't cost the govern¬
any
more money
because
you could only recover the cost
the sale of capital assets.
I refer to the Philadelphia Nun
There
J?
So,
it
is
hazardous
as
can
be
ii
of the .asset jariyliow. - Of course,
is a provision iri there to curb the amendment because it was orig¬
you. try a reorganization now be¬ many organizations have favored
effect of the court
holding com- inally put- in the bill to take 'Care cause
your idea of a business pur¬ that.
1
The Chamber of Commerce
p'any decision in the * Supreme of a situation regarding a very
Court; ' You will recall that the Wealthy lady in Philadelphia who pose might riot coincide with the of :U. Si favors it; the American.
idea of an examination officer.
Institute of Certified Public Ae*court holding case
is the case joined a religious order. She gave
Another similar illustration is ; countants favors ft and [ think
where a corporation owned, an all her income to the order, but,
continuity of interest.
In .these will work; • In Canada you! know;
; apartment building..
I" believe, for some reason, wanted to hang
down in\Atlanta.;; They ^nade & on to; the corpus, income-produc¬ organizations; you have to have a after a rate of depreciation; has?
:been, established, you fcan,at ypuY
deal to^ •sell- it, -and
they; got a ing property, and they put this continuity) of interest of owner¬
option take Cither "twice, the es-*
deposit ; - earnest money.
They provision in the law to take care ship, but then; there is no real
went to a lawyer to - draw up. the of her, and they are going to put definition as to what it, means. jtablished rate or ;hal^ the^ estab^!
deeds, and he said, "Why, you're it back.
There are a few others You are going to have that lished ",riate, ancj:^ it' has worked
sticking yourself into a noose. that are apparently in the same straightened out so that business very sucqessfiriiy with them[;[.|r :
people can act with a little more
The rule of the
.You're going to have double tax¬ situation.
you are

run,

ment

Virginian Hotel

-

ation, and you better not do this,"
Estate Taxes
So, they delayed the settlement
ward provisions.
for a few days, they dissolved the
In
estate
taxes
there
are
a
> Carry
Back and f!*rry Forward coroporation, the stockholders re¬ couple of rather interesting help¬
Provisions
ceived title to the property, and ful provisions.
On life insurance,
; ■ As you know, under the ex¬ then they consummated the sale the payment of premiums would
with the original earnest money no longer be a test for the estate
isting law*, net onerating losses in
any
One y<°»r
mav
be rarried staying as it had from the begin¬ taxation of life insurance .payable
and

into

run

of

smaller corporations wilt be taxed

the Commissioner
provided the corporation filed a
protest to any proposed deficiplaced

more

Capital Gains and Losses

of

in' com-

as

;

on

reav

provision deals with
Case.
That's the case where they contributions by corporations. Ac¬
said there was a valid partner¬ crual corporations could, at their
ship, but the tax court in effect option, treat charitable contribu¬
rewrote the partnership
made within the
first 75
agree¬ tions
ment and did not allocate income days after the end of the taxable

;

templation

There

sonable needs of the business will

slightly dif¬

in accordance with the agreement
but hi accordance with the capi¬
tal contributed.
In the Sixth Cir-

taxed

in the works for the general re¬
vision when it; comes along. Your

showing ih the Tax (Court' that

is your carrv back and carry for¬

back

lots

and

.

with

Section 102.
As you know, Sec¬
tion 102 is the section of the code i

tion,

business.

be

In
adop¬ eliminate a lot of litigation.
plan of liquidation all other words, any gift made more
assets are distributed in complete than three years prior to death
liquidation
except
reasonable cannot be taxed as being in con¬
amounts set aside for meeting of templation of death, and any made
unascertained or contingent lia¬ within three y ears vis merely pre¬
bilities.
sumably made in contemplation of

year

was all right and that
fellow could give his interests

death

before

years

not

12 months after the date of

a

the

is

three

tion of the

ferent, situation held that the tax
board was wrong ih the Canfield

shortly

going to get a general revision
pf the Internal! Revenue code«r I
will discuss that a little later.
5
This non-controversial bill, the
Revenue Revision Bill of 1948;
really started inx February of
this year when the Under-Secre¬
tary of the Treasury submitted
to the Congressional Committee
if or t y - nine recommendations

than

would

of the plan the Com¬

determine if the accumulation was

of

District

am

After that is out of the way, we

ally adopted; (2) Within 30 days
of adoption

partnership
in

have, the ap¬

after Congress re¬
convenes
in
January.
As you
know, it has passed the House.

,

by the Fifth Circuit in which they

convinced that
it will be enacted by the Senate
very

lot

held

Congressional" JCom--

mittees, and I

business. And
say

and

Culbertson Case decided recently

proval of not only the Treasury,
the

taxes

our

to

it

answer.

words,

or to

do

finally land right side up
it, and other the long run, usu¬
ally the, courts do reach the right

That bill is* supposed to
non-controversial* bill.
In

posed to be,

courts

not

would

or

of

the

on

anything that is in
it is theoretically, at least, sup¬

but

interest in

an

just
ridiculous.
However, fhe way the law is
shaping up, it indicates that even
without
legislation
our
courts

Offing

of 1948.
other

to

nized

less familiar -with the
so-called Revenue; Revision Bill
be

trary

could

which has just been enacted and
I am not going to say anything
about it.

I think that goes just-con¬

for

tion,; ana you can't talk long in
fortyr minutesj you can't cp.v.eg
very
mucn in
lorty minutes, I
will try to: aiscuss some of the
legislation that seems to, be in the
oiting.' Of course, we all know
about the revenue act. of 1948

more

interest in his busi¬

an

ness.

is

eral years.

away

the

human nature.
All of
us struggle all our lives to
pro?
vide for our»children, and the
thing that is the logical thing to
do is to provide for their future

in

Getting

interpreted

Tower and Lease house cases; to
that a' man could not give

in the
event the Washington offcial who
decides the matter does not decide

Tax Legislation in

they

mean

and

matter,

when

gent

to be given the opportunity of
^filing a statement of fact and pro?
test, or briefly stating your side
of the controversy; or your posi¬

the

changing the
contemplation of death; will
are

gain or loss will
by the corporation :two years of death ; are* in con¬
The: bill
(that is, a corporation on a sale templation ;ol! death.
of its assets) if, prior to the sale [provides (that the presumption be
or .-exchange.,
(i) a written plan extended to. three years, but also
of. complete liquidation is form¬ provides, that any gift made more

<

a

in

they

be'i recognized

The

is

enue

August 5,

tion

Also,

Lots

corporation and then, of course, rule on
when the money was distributed The
existing law includes in the
to the stockholders they had tc .gross estate transfers
by the de¬

before the enactment of the Rev¬

circumstances is the taxpayer
be advised that this memo¬

randa has been requested, w
/.
In ; a: mimeograph J issued

the

include

visory memoranda (from Wash?
ington wilh: respect tor particular
cases.
When they do that, the
takpayer has hot been advised. In
fact, the manual states: that under
no

including life insurance in transmitted into .subsequently
taxable estate.
quired, property; - ■
*-'< 1 ' ,

insured's

they feali?e ftliat their property is,
gpirig tp be CPhdemned. They buy
ministratively difficult. It results pay another tax.
cedent made in contemplation of other: property in anticipation of
in reopening, or keeping open,
The new bill changes that and death and set up a rebuttable pre- it, and, under the present law; thp
past years., Also, it is probably
and
the. Courts
say,
! sumption«that
: transfers
within. Treasury
provides that no

under-the

As

following
That has proved to be ad¬

years.

anytmn^ ;,ne

to

advisable;

deems

deduction

a

from income of the two

the
.

'

as

the

Thiirsdayf Se^eipber^2, 194t>

ning.
that

The
that

Supreme

was

poration and

a

Court

said

sale by the cor¬

was

taxable to the

certainty than

they

now

can

on

these reorganizations.,

going to see an im¬ lem, as you know. That is the case
a liberalization
of where the Virginian Hotel Com¬
which operated
a ( hotel
involuntary conversion right. pany,
As you know, if your property is down in Lynchburg, Virginia dur¬
ing
the
loss
years
of
the
early
involuntarily converted,
as
by
You

are

provement

or

the

cession of incidence of ownership

condemnation, you can get very
definite tax relief. ' The present
law aoplies where the converted

at

property, or its proceeds, can be

to named

beneficiaries.

The pro¬

death (would become the sole

Company case will be changed.
That is another depreciation prob¬

thirties, took two or three times'
as
much depreciation as- it was
entitled to.
some

profit

Then it

came

years, and

along to

the Bureau1

Volume 163

Number 4730

FINANCIAL

COMMERCIAL

THE

CHRONICLE

took the position that the basis
had to be reduced by the amount
of the depreciation taken on the

return,

learned

that

Supreme

right,

was

it
Again,

Court

said

Congress is
going to have to change that rule

■>

Industry
-is*-1

•».V

though, taxwise,

even

gave the hotel no benefit.
our

&

The State of Trade and

and

"(Continued itbm

■

further cuts for the first quarter

of next

5)

year

-

-.OS;*"-?

definite proba¬

are a

,

This

•

In my opinion, you will see no
change in the capital gains pro¬
I .am mentioning that be¬

vision.

It

steel

,

pipe

'

,

.

tightest steel item on the list.
sheets. Orders
well into 1953-with some companies.

run

shipbuilding and repair has caused

a

the

steels

greater demand for plates

see

j

holding period extended

tion of heavy steel demand.

pretty .short.

Also, there is

Warehouses

lot of favorable

a

are

given

:

on

and

consideration being

I am sure that if they do

the

holding

period on
gains that you will not

retroactive changes.

The American Iron and

change
capital

see

The Congress has

any

I don't eVen

just,: by

0.7 point, or
rate

bill, Public Law 773 of the
80th Congress, changed another of
the
more
or
less
unusual
or

Rule

case,

situation.

You

son

this Dobson

?

Dobson

or

will

case

Rule

to the
the Tax

up

Supreme Court from
Court. Although, the question was
not presented, not argued, hot
briefed, the Supreme Court an¬
nounced a rule that, for all prac¬
tical

purposes, Tax Court cases
could not be reviewed by appel¬
late

courts.

That

directly

was

contrary to the intention of Con¬
gress in enacting the law dealing
with the Tax Court that specific¬
ally provided for the review of
Tax Court decisions in the circuit
courts of appeal around the coun¬

try. The, legislative history, showed
that

the. purpose

that,
■J-V.

they

that

;

by doing
would, get: the
was,

Viewpoints of people in each par¬
ticular locality, and keep the tax
law

realistic basis.

a

on

And so.

was

week's

operating

rate

is

1,697,900 tons
capacity

a

market,

cash

A month
equivalent

to

manufacturer

though

the

month ago, 1,616,900 tons, or 92.4% of the old
and 1,281,210 tons for the average week in

prewar year.

to the lowest levels for several years,

Cash lard

recession at the close.

prices

'

' •

trended

*

>•

•

•

<

most

downward

►the influence of the large crop prospect for this year.

pressing factors
■V crop

may

were

the belief

>

,

of the week under
Other de-

that parity prices for the 1949

be substantially lower and the continued failure of the

ECA cotton export program to get under way on a

broad scale;

hedge-sellings aliiluture deliveries?
the average government loan level on thje

Under heavy liquidation and

cotton

of

1948

sold

below

crop.

Spot prices at New York fell 61 points to 31.52 cents per pound,

-

which compared with 34.13

a year ago. Inquiries were more numerous
reported sales in the ten spot markets increased to 92.500 bales*

and

week? from 79,400 the previous week and 85,700 a year

Domestic: mill consumption during July

HISTORY

'

RETAIL AND WHOLESALE TRADE MODERATELY HIGHER

distributed by the electric light
industry for the week ended Aug. 28, was 5,477,741,000
kwh., according to the Edison Electric Institute, an all-time high

and

FOR WEEK AND YEAR

power

Consumer buying rose slightly during the week with total retail
The next highest point on record dollar - volume*: moderately above that of -the corresponding .week a
established in the week of Jan. 24, 1948, when 5,436,430,000 kwh.
year ago. Consumer interest was centered on medium and low-priced

point in the history of the industry.
was

This was an increase of 86,953,000 kwh. above
in the preceding week and 537,940,000 kwh., or 10.9%
higher than the figure reported for the week ended Aug. 30, 1947.
It
distributed.

were

the

output

was

also 1,073,549,000 kwh. in excess of the output reported for the

corresponding period two years ago.

\

/

.

•'

merchandise with practically no demand for low quality merchandise*
Dun &

Early Fall promotional sales were well attended in many localities*
Retail apparel volume continued to-increase during the week.

-

The

and jumpers,

CONTINUE BELOW YEAR AGO
revenue

freight for the week ended Aug. 21, 1948,

.totaled 900,572 cars, according to the Association of American Rail¬
roads. This was an increase of 9,295 cars, or 1% above the preceding
but

week

decrease of 323 cars, or 1 %

below the corresponding
However, for* the similar week of 1946 it represents
increase of 15,617 cars, or 1.8%.

week int
an

q

1947?

with':^v$stiable^cott^
:f K^ Food volume remained at

AUTO OUTPUT TURNS LOWER IN LATEST WEEK
"
;
Production of ears and trucks in the United States and Canada

a

high level the past week .and : wasr

slightly above that of the similar week in 1947.

~

Output in the similar period

most

popular items of women's apparel were corduroy skirts
wool plaid skirts, women's tailored blouses and light¬
weight coats. Zip-in lined coats sold well, but demand for furs re¬
mained low. Retail volume for men's apparel continued at the pre**
vious week's low level, but there was some increased consumer
response to boys', and young men's woolens and .worsteds; for Fall
school and college wear. ? Summer clearance, sales, were well attended

CARLOADINGS SHOW FURTHER SLIGHT RISE IN WEEK BUT

Loadings of

Bradstreet, Inc., reports in its current survey of trade. August
sales continued to attract favorable consumer response?.

clearance

resistance to high food prices

•

was

While

consumer

somewhat less noticeable durr

ing the week,the demand for most meats generally remained at %
low level.

'

„

^

subj ect to review- by- circuit
This week's output consisted of 73,021 cars and 25,029. trucks
appeal in the same man¬ made in the United States and 3,074 cars and 1,561 trucks made in

vegetables increased slightly during the week, and frozen food vol¬
ume was moderately below that of the previous week.
The retail
volume of many canned foods was fractionally below the level oi a

Court rule in the Dobson

the like week of 1941 ja

a year ago was

0

39.965 units.
-.

district court cases.

will

I

ticularly

the

Canada.

another

mention

that Congress is

House

Ward's estimated August output at 344,547 cars and 114,402 trucks

par¬

made in the United States and 12,356 cars and 6,366 trucks built in
Canada.
It termed the month's production "surprising" in view of

remained

materials shortages and work stoppages due to excessive heat.

appliances

and

Ways

They

are con¬

study now as to the BUSINESS FAILURES RISE SLIGHTLY
.
advisability of eliminating certain
Commercial and industrial failures increased to 96 in the week
ducting

a

.

excise

of the
taxes

excise

The

taxes.

jewelry, furs, and other
things are quite burdensome, and
we

on

do hit any substantial

ness^^recession,
have

these

busi¬

taxes^<

ended August 26 from 94 in the previous week, reports Dun & Brad-

the

industries

particular

Total

volved.

is

There

a ?■

•

ex¬

cise taxes removed.

Drawn for

.

77

>

involving liabilities

and accounted for all

of

the

of $5,000

T--

■

or

more rose

week's

a

in. the

total

Middle

\ The consumer demand for lumber, building materials and paints
wares

to 79<

n

the week's increase.

,

bonds

of

4Vz%

1930,» due Dec.
notified

that

external

1,

1970

i$34,300

loan

are

of

being

principal

amount of these bonds have been
drawn for
at. par..

redemption

The

bonds

on Dec*

will

1,

be're¬

415%,

i'u.\

,i

-

{;

i

%

r

York,

"l;7: ■"-




The

;*

<

-U

'

;

...

cific Coast* 3 to

'

'

*"

a year ago

.7*/
Wholesale', order; volume, in many lQcaUties i'ose slightly during
the week. Total dollar volume was fractionally above "that of the
.

comparable 1947 we'ek. Many retailers remained cautious of price
developments and were hesitant to place large orders for future
delivery. Deliveries generally continued to be prompt.
Re-orders
mostly for medium and low-priced

were

items.

with

increase of 14%

;

(revised) in the preceding week.;For tfye

to date by 8%,.■ ?.■

year
;

:

-If-';

Retail trade in New York the past week suffered from ex¬
treme heat which reduced department store volume by about 15%
;

under the level obtaining in the comparative period of 1947.

.

According to the Federal Reserve Board's inde&, department
store sales in New York City for the weekly period to Aug. 21, 1948,
5%. above the

same period last year. ;This compared with
(revised) in thie preceding week. For the four
weeks-ended Aug. 21, 1948, sales irlereased by 8% and forvthe year

an.

l

an

four^weeks;<=rided;^iig. 21, 1948, sales increased by 13%, and for Jhe

increased

AFFECTED bY

deemed at the National City Bank
*>• -.DECLINE IN GRAINS AND FOOD PRODUCTS 4
of New

—

-

Department store sales on a country-wide basis, as taken from
the Federal Reserve Board's index for the week ended Aug. 21, 1948,
increased by 12% from the like period of last year. This compared

.Extending the downward movement of the previous week, the
Dun & Bradstreet wholesale food price index again went
sharply
lower last weejk. The index fell1 to $6.94 as of Aug. 24, from $7.07
on Aug. 17, a drop of 1.8%
in the week. Marking the lowest index
figure since May 18 when it stood at $6.91, the current level repre¬
sents a decline of 5.7% from the all-time high of $7.36 recorded on
July 13, while the rise over last year's index of $6.64 has been nar¬

WHOLESALE COMMODITY PRICE INDEX

.

Middle West and Northwest, 13 to 17; Southwest, 2 to 6, and Pa¬

WHOLESALE FOOD PRICE INDEX REVEALS FURTHER

rowed to

.

by the fol¬
lowing percentages New England; 2 to: 6;,East and. South, 5 to 9;

.

Holders of City of Copenhagen

slightly below the level of the week previous in some
'

Regional estimates exceeded those of

.

SHARP DROP

Redemption

was
,

year ago.

Atlantic

V

Home furnishings and house¬

Retail volume for the country in the, period ended on Wednesday
of last week was estimated to be from 7 to. 11% above that of g

failures.

year ago.

high and steady last week.

continued in large demand and consumer interest in electrical

localities.

pre*

Geographically, failures were
and Pacific regions with the
number of casualties exceeding that of a week ago and about double
concentrated

that of

City; of Copenhagen Bonds

comparable
high as in 1946.

Manufacturing and retail casualties comprised 4?iore than twothirds

these

■

Failures

from

reasonable

chance that you may see

as

casualties, however, remained considerably less than in

war years.

in¬

in the

64

1947 week and was almost three and one-half times

ve^ ; bad retarding effect

a

The week's total compared with

Inc.

street,

fa:

week ago.

thing

considering,

Means Committee.

"on

Butter

other commodities.

somewhat firmer lone appeared at the close.

a

Cotton

The amount of electrical energy

courts of

if

in

weakness

,

ELECTRIC OUTPUT AT HIGHEST LEVEL IN INDUSTRY'S

of changing the Su¬

and now all Tax Court cases

ner as

►

and

Consumer demand for less expensive cuts of meat and for meat
substitutes continued to be high.
The demand for fresh fruits and

preme

;

.

interest

88,098 units end, in
model changeover period, production totaled

purpose

case,
are

also

prices receded and all lard futures sold at new seasonal lows. Meat
and livestock quotations showed mixed trends.
Hogs at Chicago
reached a new record high of $31.85 a hundred pounds but showed

Congress passed a specific , law dropped to 102,685 units, from 113,324 (revised) units the previous
which admittedly was solely for week, according to "Ward's Automotive Reports."

•

curtailed during the week. Country oiferings pjf
relatively small.
prices went sharply lower for the week, reflecting lessened

were

as reported by
627,000 bales, bringing total con-r
sumption for the 1947-48 season to 9,347,000 bales. This was 6.7V%,
less than the 10,025,000 bales consumed in 1946-47 and the smallest
consumption since the 1939-40 season. The carry-over on Aug. 1,
1948, was placed at 3,082.000 bales, or about 550,000 bales more thaiv
that at the beginning of the previous season,
■
There was very little activity in the Boston wool market last
week although sales of noils showed some improvement. In foreign
wool markets, trading slowed down as dealers awaited the opening
of auctions in Australia, Aug. 31.
South African auctions are schedQ
uled for Sept. 2. Prices in foreign markets remained firm.

tons

1,716,000

^

^

Bureau of the Census, amounted to

the indicated

ago

I

the September corn con*-

for

sharply

oats
Cocoa

ago.

one year ago

1940, highest

recorded

were

will be marketed more freely due to the earliness of the new cropCash wheat prices declined moderately, with offerings in the spot

in the latest

Mon¬

of steel ingots and castings as against 1,728,600 tons last week,

that

recall

came

0.7%, from last week,
94.2%.

This

a spe¬

cial

strange decisions of the Supreme
Court, that is the so-called Dob-

on

day of this week the operating rate of steel companies having
94% of the steel-making capacity of the industry will be 95.2%
of capacity for the week beginning Aug. 30, 1948, a decrease of

anticipate any rate changes.
'

Steel Institute announced

since early

'W'-l

tract, May and July wheat and September oats. The sharp break in
corn market reflected prospects of bumper yields lor most grains
and fears of a lowering of government crop support levels in 1949Another depression factor was the expectation that old crop const

some

concludes.

that,

which dropped to the lowest level

lows

ot

pressure

sparked by weakr

the

the

to

corn

<'%] New seasonal

supplies. As fast
out to customers, according to "The

they receive steel it passes
Iron Age." In some cases items are sold before they are even re¬
suggestion that,
ceived by the warehouse. Users in small towns and hamlets through¬
where persons are compelled to
out the country are the forgotten people—they say.
move
and
sell their
residences
Steel users are none too sure that present steel prices represent
and then have to rebuy and the
the top. Steel mills have repeatedly said that if costs go up in steelnext
p 1 ace
they go to, they
shouldn't have to pay a tax on making, prices will have to follow. The demand for higher freight
that gain that they have realized rates on jcoal, coke and iron ore—if granted—will definitely mean
in this unduly high real estate higher steel prices. Steel officials claim they are on the ragged edge
of costs right now, despite the last increase, this trade authority
market.
You may see something
comment

in cash

ness

was

■gin 1947|#g;f:|^^

not faring too well on steel

as

ago.

prices at mid-week dropped

Virtually every item on the steel list is a tight product. Alloy
which just a few months ago were relatively easy to order
are now a hot item. There is no longer any doubt that researchers,
insofar as long term capital gains economic
is concerned. This six months is
experts and stqel officials are flabbergasted at the continua¬
one

year

Grain prices moved downward last week under

liquidation and hedge selling. The decline

the

was

from oil companies

which this week is reaching a new high.

every

ask about

.

harder to get and in greater demand than steel

was

for pipe
But

week

time I speak people
capital gains.
There is
possible exception—you may

cause

a

,

are

coal

trade weekly points out.

i

time

on

(1) Loss of more than 1.600,000 tons of steel because of
strike, (2) loss of pig iron urgently needed by small steel
firms and foundries, (3) steady increase in the number and tonnage
depreciation
properly
allowable
unless the amount taken on the of defense orders, (4) certainty that Marshall Plan requirements will
return really did reduce taxable hit harder from now on, (5) general and human tendency for volun¬
income, and therefore was al¬ tary allocations which are increasing to reflect higher tonnages than
would be the case if this system did not prevail and (6) substained
lowed.
demands from consumers who were expected to order less steel, the
later

and provide that the basis will be
the
reduced; only by the amount of

Capital Gains Taxes

Aug. 24 registered 274.65, as compared with 280.41 a week earlieirThe curre'nt level is only slightly above the 273.70 recorded at thi^

.<

;

2S

Bradstreet, Inc., trended lower last week largely due to declines
grains and other principal food products. The index, figure for

in

the basis of present market factors.
The reasons for the present tight situation and of that to come

bility
:

page

(921)

L,

.

daily wholesale commodity price index, compiled by Duq to

increase of 13%

,

m".

/?

^

?

r; •

1

-ft

-

26

(922)

COMMERCIAL

THE

Debt Reduction

FINANCIAL

&

CHRONICLE

Tax Reduction

vs.

antee/; its existent WarrantS iri- savings bond sales. The sales and
clusioii of the guaranteed debt in redemptions of these bonds in the
the gross public debt. The amount last three fiscal years have been
preference
for
debt
payment
the
liability is unimportant as follows:
rather than for still more tax re¬ of
duction.
On the other hand,
TABLE II
if now, but on June 30, 1938, for
progress were being made in debt example,; the total of guaranteed Sales and
Redemptions of Sayings
retirement and if such progress obligations outstanding was $4,853
Bonds, Fiscal Years 1946-1948
million.
appeared likely to continue at a
A:
A. (Millions);i'
reasonable rate, the case against
Direct Publie Debt—Under this

(Continued from.first page) Y

there

would

be

then

definite

a

■

llr'T-

Period

Would

reduction

be

weak,

particularly if the tax load were
still so heavy as to impede the
accumulation of savings, hinder
their flow into capital formation,
and discourage individual incen¬
tives.

Year)

■'Sales

two main subdivisions:

1946

$9,612
7,208
6,235

There
1.

ing

are

Matured debt and debt bear¬

1947

of

1948

The

interest.

no

nature

position taken here is that

The

the matured debt is obvious.

there

is

still

substantial

a

for further tax relief.

need

In support

of'this position, it is proposed to
review, the

things that have been
happening with respect to the pub¬
lic debt.
It will be helpful, also,
indicate

cash

the

resources

in

the Federal fiscal system that are

tRedemp-

(Fiscal

'Sales

bonds,

mands
reduce

profits

refund

tax

national

the
(greenbacks)
gold reserves, and - deposits
retirement of national bank

United
less

for

Development,

and

struction

States

notes

issue

tions

$6,408
5,063
5,113
price.

include

accrued

discount.

It is assumed here that the de¬

special notes issued to the Inter¬
Monetary Fund and the
International
Bank
for
Recon¬

cess -

at

tRedemptions

bearing no interest includes
such items as Savings stamps, ex¬
debt

The

to

heading are included all of the
direct Treasury debt obligations.

for

action

large-scale

beyond the amount -required to Treasury bills, arid .certificates (q£
the ahhuaLredempticin Indebtedness'.
These •, have short;

refinance

.

of these bonds; On the other
if

the

most

important

hand;* maturities (bills ordinarily about
for

reason

high taxes and rapid debt reduc¬
should-

tion

the

be

deflation

bank credit

as a means

of

inflationary

pressure

on

curbing
prices,

then the Surpluses should
voted

retirement

to

Of

be de¬

of the bank-

held debt.

Even

ments

compared

by such

to

the debt do not extend to

reversal of

the

as

with

data

presented

tificates issued to the various Fed¬

By
should

a
noted

be

the

that

and

by

reference

present savings

usual

demption

event,

tical

;

the various forms of debt sold

to the

generat public. Again, there

are

of Which the
examples:

questions

What kind Of debt should

(1)

be retired first?

debt

of

holders

with

first?

debt

in

(3)

(2) What classes
should

be

dealt

Is retirement of
of the public

the hands

not

the

-savings bonds

arid

the

tax

saving notes.

segments

occurs.

effects

are

position of the banks as
whole, because it reduces the
and liabilities by the sahie
amounts and hence causes a given
reserve- to stand in a" higher ratio
than before to the remaining de¬
reserve

a

assets

posit liabilities. Individual banks,
however; may be adversely af¬
fected. On the other hand, retire¬
ments of: debt paper held by* the
reserve banks
tends to tighten

in

are

funds;
public issues,, Which

The

two kinds of public issues, j
and indefinite
(1) The marketable debt, which
to serve as a constructive guide includes the
fully negotiable pa¬
to Treasury action.
Such a state¬ per such as Treasury bonds, notes,
ment throws no light upon im¬ bills and certificates.

portant

But the prac¬
quite different.
Retirement of debt paper held .by
the member banks improves the

degree of asset liquidity.

forms of- nonmarketable debt are

(b)

duced is too vague

following are

circumstance
that it makes
but little difference Where the re¬
which would suggest

(2) The nonhiarketable debt,
which, as the term indicates, is
negotiable.
The "principal

it

type of bare statement to the ef¬
fect that the debt should be re¬

probable budget

of the debt must of tensive refuriding of the bankbe dealt with whenever held debt into issues not eligible
question of redemption arises. for bank investment than by the member bank reserves., being >an
The point that Is emphasised here, slow, irregular, uncertain proce¬ operation similar in nature.to the
however, is that the government dure of retirement from revenue open market sale of Securities'by
does not control the timing in the surpluses; The saviftgs bdrid canU' the reserve:banks. More effective
case of the
nonmarketable debt paigri is a Small step iri this direc¬ agtjon against the; Inflation would
and therefore1 cannot proceed of tion. The' possibilities of such re¬ therefore result from retiring debt
its own initiative with the re¬ funding are presently limited By. paper held • by thd reserve banks.
the hightaxes ori incomes - which But such action could be nulli¬
demption of such debt.....
A
final
technical
limitationi absorb the savings margins from fied By .reserve barik rpurchases: of
which
extensive, acquisition
bf other securities and the operation
upon the government's freedom of
initiative in debt redemption is hew issues would »have to be would be -iriefffectiyeiyas ia'n.

eral trust

preliminary,

of

Way

strch paper
absorb the

the reserve banks, a

are

.Important Questions

than

retiring
rather
maturity issues.

other

The and Federal Reserve Bank notes.
readily avail¬
2.
The interest bearing debt. fully negotiable debt. Frorii this
In view' of the freedom of banks
able- but they are seldom organ¬ The debt on which interest is paid
Viewpoint, the volume of debt, to to
replenish their holdings,- jit
ized in a way,that.points up their falls into two classes. These ere:
be dealt with is not the gross total would appear that a m6re vigor¬
significance for the subject under
(a) The special issues, which of $252 billion, but the $160 billion ous attack upon the present in¬
discussion;
are
the Treasury notes and cer¬ of marketable debt.
The
other flation could not be made by ex¬

available for debt payment.

|by.
refunding
The supply of
is large: enough ' to

outstanding can be Controlled

opportunities
to the desired

available investment

sales

bond

days and certificates not more
12 months) arid the volume

than

a*

In ariy
these would now be free
policy.
Thus, by a decisions; whereas the original ab¬
process of elimination, it results sorption
of * government
papir
that the area of deliberate, agres- during the war was not a matter
sive action by the government to of free choice.
retire debt of its own initiative
Refunding of Tax-Held Debt
fs limited to the marketable, or
a

91

policy pltfses: for some years to corhe,
it would not be possible to pre¬ but again a question of policy
vent the banks from replacing the arises:
Should the first redemp¬
Excess
redeemed; paper: by purchasing tion moves be made against "the
of Sales
from other holders. The decisions bills and certificates held by the
$3,204 of bank managements to carry member, banks or against, those
2,145
government paper in their port¬ held by the reserve banks? T{ris
1,122 folios would be influenced
by the paper can and does move freely
price andl yield of such invest¬ between the member banks and

'

tax

Thursday, September 2, 1948

course

the

,

the

distinction

between

the

long- and the short-term market¬
able debt. There is no opportunity

Thus, from another angle, lion .control, -unless - it - were Ac¬
problem of tax revision is seen companied by ' a reserve brink
to be directly related to that of. poliey: of; restricted % open V rijatket f
inflation control.
purchases.
.+..+.aV .A /A
;

made.

the

.

From
this
brief enumeration to redeem a long-term Treasury
compliance with the
and description of the various bond in advance of the call date
In summary of the discussion, to
With respeet to the present bank
objective of debt reduction?
(4) Should efforts to increase cer¬ Classes of the public debt, it is except by purchase in the .-mar¬ holdings of the public debt, the. this point, It has been showri that >
ket. The years ahead are studded fidlest- freedoridiofi action toward;
tain kinds of debt, such as sav¬ evident that hi'-speaking-of debt
Because of the variouscategories*
reduction it is necessary to be with call dates and final maturi¬ debtrretiremerii ori the part of the
pf/debt;the;gerie|i#!te
ings bonds and special Treasury
and notes, With government is provided by tl|»e debt" is too indefinite to be helpmore definite \ as to thekindOf ties of bonds
obligations be continued, if the
amorriif$ falling ?■ doe ;ih
fixed policy be that of reducing i debt to be dealt with than is usu¬ larger
TABLE III
'
;
It is also evident some years : than the. respective
the total debt?
(5) At what rate ally the case.
Character andGwnership bf Tublic Marketable Securities •
is l it desirable or advantageous that vague references to the total budget surpluses are likely to be.
c.U' HillMarch 31, 1948 &+'++../'A,/V;a,£a;
to retire the debt?
Should this of the gross public debt as con¬ Hence the technical limitation is

sufficient

a

7

-

stated

.

.

rate be the same under all con¬
ditions?
A careful appraisal of the whole
issue of tax reduction versus debt

stituting the measure of the re¬
demption problem are incorrect
and
misleading.
In that grofes
total

are

classes

same

of

debt

not

serious practical, restriction.

a

^

r

—Held by Investors

The Problem of Choice
The

problem

of

choice

(Millions)

-

*

-

-

-

•

+III

T

among

,

covered in Treas»rv S"msp.—-

.

.;

u. s. Govt.

•

.

•

j..,:'

*'

'V-., Agencies ;'
Insurance Truot Funds
v.

r>" Total
Commercial Savings
All Ofaer
the maturing long- and -shortor nothing can
Classification—
Outstdg.,
,Bank$
Banks, Companies
Banks- 'Investors
example, it is neces¬ term Obligation^ in determining Issued by U. S.
other ^questions.
All I ,f
In approaching sary to exclude the guarariteeed What part of the debt to retire
Treasury:
them, It is necessary to have in
;84$2^3 ■ \i&949' f $2,670
debt,
now negligible but once im¬ first, involves iss&es- ofidebf man¬
$i.9"i&
Bills
$13,945
mind <^Hain facts- about the pub¬
410
; 365
that
are
beyond: the
4,ol? A 7,920
portant, for the government will agement
Certificates
7,119
20,331
lic debt.
244
not have to pay it unless its cor¬ scope of this essay. Since the cur¬
152:
1,83?
4,556
Notes
4,537
11,375
The public debt of the U. S,
rent
pressure for large-scale debt /, Bonds -----i.- 115,524
porations become hopelessly bank¬
21,369 ' 1L0T2
27,636
43,986
11,462
Government is not a single
"•:
reduction
has
been
Hi:
A
2
tied
ifi
With
rupt. Nothing can be done about
v;i ,V'.: r/.s6H- : ji2
h
Other
164
ogenous mass -of obligations; -On
riritil'' the hold¬ the efforts td control and reduce Guaranty by U.S. '
4
i hi.
28
the contrary, it consists of various ers choose to turn it in.
Redemp¬ the inflation of credit arid prices,
classes, each with its Own char¬ tion of the notes held by the it has become an accepted for¬
Total
$57^43 s$12;0$3 " $22,310 -, $26,45r . l$42^93
acteristics. The major categories
Monetary Fund and the Interna¬ mula that first attention should
;f-: ■ Source: A"^ea8ury;BttlIeWny -Juho; 1J. .*/; ;•
' ■
-v '
,
i
will be described briefly in the
tional Bank Will depend upon the be given to the bank-held debt.

reduction involves the above arid

about which little

be done. For

.

-

—

—

—

■

-—- -

-

following paragraphs. The amount future Operations of these insti¬ The extent of bank ownership, in
outstanding in each class as of tutions, a matter over which the relation to other classes of holders
June 30, 1948, is given in Table I. Federal
Government
may
have of marketable debt, as shown by

TABLE IV :'

-

;I',

■VA../:;;-.

X

;i '

Changes in the Gross Public Debt and .the General Fund Balance
From Feb. 28, 1946 to June 30, 1948

little influence.

the latest available
Treasury sur¬
(Millions)
Gross
Guaranteed .General Fund
step toward beirig vey, is indicated in Table III.
Major Classes of the Public Debt
Debt
Balance
pate—
'
4
Public
Debt
Public Deht
If the ownership distribution of
specific as to what kind of debt
as Of June 30, 1948
$550
$25,961
is involved in the demand fpr the Federal debt were to remain Feb. 28, 1946
$279,764
$279,214
73
(Millions)
4,932
debt reduction is, therefore, to static, it would# be possible to say June 30, 1948-^xl-i-—
252,366 A
252^92
477
Gross Public Debt__—__ $252,365 recognize that such a demand re¬ that the volume of debt With Deeline:' -U;^^
21,029
I M 26,922
A. Guaranteed
(held
lates, in the first instance, to the which we really have to wrestle
TABLE V
outside the Treasury)
73 interest-bearing debt.
Actually, is the total of commercial and
bank
B. Direct Federal debt. 252,292 however, the matter must be naf- reserve
holdings.
As of Changes in the Interest-Bearing! Debt, Feb. 28, 1946 to June 30,1948
1. Matured debt, and
rOwed still more, for there is no March 31,
1948, this total was
(Millions)
debt
bearing
no
point in demanding that the spe¬ $78,530 million. By redeeming the
interest
feftai Interest1 *
'
•
Non-. v
"total. •
(Special
3,115 cial issues^ held by the various bank-held debt, the credit infla¬
1
".Bearing Debt' R|avk^tabfe ;
marketable Public
■ v|sspes 'I
trust funds be redeemed
2. Interest - bearing
sinfce tion caused by bank loans to gov¬
249.177 they are- supposed to constitute ernment would be eliminated.
Feb. 28, 1946—
$277,912 : $199,810
$57,206,. $257,016 A.'$20^897:
'
debt
a. Special issues!
30,211 assets held in support of future
249,177'
160,372
58,595
: 218,96? A
30v211
But the ownership situation Will June 30, 1948.
welfare
commitments.
This
limits
b. Public issues.- !2l8,967
-^28,735/
—39,438'
hot remain static, especially while Net Change-i.
+1,389, —38,049 .J +9,314
A
the
field
for
debt
reduction
to
SOvfrcey '"Treasury BuUetJii/' Defceinber,; 1947. and "Treasury -'-DaT.y StrateWi^nt,'"
(1) Marketable 160,372
there
is
outstanding
a
large
the public issues.
But it is nec¬ amount of fully negotiable debt June 30, 1948. .Totals are;,rounded>and do not completely •correspond.:../;;ll+'A+A;
(2). Nonmarkable
58,595 essary to go still farther and ex¬ in the hands of investors other
TABLE

TABLE I

first

The

.

„

.

•

,

-

.

,

-

,

•

_

.

-

the

clude

Classes of Public Debt
A

-

non-tethnical

definition

-of

each of these classes follows:
Gross

Publie

Debt—The

gros^

public debt - includes the direct
obligations of the government and
the

debt

Issued

by

government

corporations that is fully guar¬
anteed by the United ^States as to
principal and interest. Such gov¬
ernment
is a contingent
paper
liability of the Treasury. While
there may never be occasion for
the* Treasury

to

meet its




nonmarketable

issues in any

public

Wi

than banks.

It becomes necessary,

therefore, to preface the insistence
gressive use of surplus fe'vfehues upon high taxes for the purpose
to reduce debt. By far the largest of substantial debt reduction with
portion of the nonmarketable debt a decision as to the most urgent
consists of the savings bonds, arid arid
compelling reason for, this
except as these bonds mature, the course. If - this reason be found
government riiust wait' until the in the Concern over a large debt,

demption option, which they may
do at ahy time after 60 days from
the date of purchase.:
A
•"

:As

ury

a

matter of fact; the Treas¬

has recently inaugurated ah
campaign to increase

guarr intensive

no

debt

than

'

Feb. 284946

$li7,032-

Bills
-

"

Certifierites

JS

4tA13:

Reduction

June 39, 1948
;

-$13,75-7
20,931
7,838
117,692 A

$3,275
20,462
11,723

•

'

-

upon

upon

-

—Amounting Gutsandihg on^
Clasa Of Security-—

•:

better

the
that
held by other classes of investors.
There would
be
no
good case,
bank-held

Debt/

(Millions)

-

such, there would be
case
for concentrating,

as

i:r

by Classes of Securities

■

holders decide to exercise-the re¬

;.

Outstanding Marketable Public
Feb. 28, 1946; to June 30, 1948

Changes in

demand for the ag¬

■

-

■

Bonds

-

Ajwii.vw.4ii

Other.

121,634
i";' ■ 180
,

163 '

'A

3,942

A-

/ :-17^

.

either, for

an

to increase the

intensive campaign
savings bond sales

Totals
Source:

-

See Table V.

$199,810

$160,371 H

$39,439

;Rounded totals do not completely correspond.

"

f

9; l

of demands

iul irr the formulation
for

debt

of

are

toeing increased as a

notably the spe¬

matter of policy,

v

classes

reductions Some

debt

in attributing sit- in ; larger degree; securely locked up, either in the
to the scarcity of-; savings under strong
boxes of the individual
the present rates of the individual citizens or in the various trust
income tax.

•

.

•

-

funds to which the

-••••'

*

-

'

special issues

amazing achievement with were delivered!
In view of this record, particu¬
the reduction of mar¬
ketable public
issues, shown in larly with respect to the repay¬
as a
Table V; -directs attention to •,*« ment of marketable debt, it would
most urgent reasons for insisting
upon
large-scale redemption at ■question raised earlier, namely, appear reasonable to give further
this time.
As long as inflation whether the reduction of .mar*-, thought to tax reduction and re¬
vision.
No one wants to see a
control figures prominently among ketable debt can be regarded as
reasonable
of
debt
increase
compliance with the resumption
these 'reasons, primary emphasis
terms of the popular demand for through
deficit financing,, and
should be laid upon the bank-held
cial issues-and the savings
necessary

was

The farmer's was

-

respect to

27

compensation of employees rose from $50.8 billion to
$64.3 billion, a gain of 26.6%. This compares with a gain
for the farmers of 21%. The gain of the employee from
1941 to 1945

B

The

bonds.

to determine,
further matter of policy, the

It is also

(923)

FINANCIAL CHRONICLE

Number 47^0-

Vblume 168:

a

$64.3 billion to $122.9 billion, or 91%.
78.3%. Since the war there has been

$122.9 billion to $133.9 billion or
54%.

further gain from

9%. The farmer's
k

;
*

was

we compare these wages and salaries figures
change in what are now known as consumers' prices
we arrive at a figure Comparable to the "real" gains of agri¬
debt payment.
This reduction such a course is not advocated culture. Doing so we find that the "real" gain of the em¬
debt, notably that, held by the
What the record does jus¬
has been. accomplished in part here.
reserve tanks.
It is clear, how¬
ployee from 1929 to 1941 was 47.4%. The farmer moved
tify, in the opinion of the present
ever,: that, there is no way of by the substitution of nonmarket¬
ahead 53%. From 1941 to 1945, employees improved their
able issues and special issues. To writer, is further action to lessen

the banks such
negotiable debt as
they mayV.be willing—at a price
—to own.
Large-scale refunding
into debt forms not eligible for
bank 'investment
would reduce
permanently' the bank-held debt;
but the present heavy taxes on
keeping

out

of

the

of

real

as against unyielding
upondebt
payment
but insistence
if the concept of debt payment is without regard to the tax levels
to be interpreted narrowly, it may that would be involved in such
be asked why some forms of the a policy. Within limits, tax rate
debt
are
permitted to increase. reduction does not necessarily im¬
If sheer, unqualified debt reduc¬ pair revenue receipts in the long
tion is the only proper goal, why run. The chances are much better
inqojnes are, a serious; deterrent to^
should the Treasury push the sale than even that greater headway
such an undertaking.' *v\ V~Vv ' "**
'<■
■'
*
will be made in over-all debt
v\' '* :■ ^ of savings bonds, and why should
Changes in Composition/of ;Debt any more, special obligations ^ be reduction,, over the next decade
Another question pdrtirient to issued to the trust funds? there by readjusting tax burdens so as

part

:

this extent there is

no

debt retire-5 tax burdens

•

,-v

ment

in

over-all

the

1945

sense,

,

reduction /argument, is
must be,' in satis¬

there

whether

argument, a reduce
tion > of
the overall; total,or
whether the recent trend toward!
redaction
of
marketable > debt
faction of that

..

through a substitution therefor of
itioijiiriarketable -debt would be aq-"
ceptable. The extent of this sub¬
stitution; since'the peak
indebtedness was

promote high level employment,
production; .and income than can
in the be made by retaining, for the
fact that over the past two. * and. purpose of rapid debt payment,
k half years some $10.7 billion of tax rates that impede capital for¬
the kind of debt that is freely.
mation and throttle the economic
negotiable in, the market.has been
incentives td work, save, and as¬
replaced- by ah equal amount ox
must be some

gained 7%. The real gain
1941 to 1948 was 28.5%;
that of the farmer, 44.6%. It is, of course, readily apparent
that the farmer, by the middle uf this year of our Lord, 1948,
has advanced his econbmic position more rapidly since pre¬
war days than even the recipients of wages and salaries
(chiefly wages) who, next to the farmers, have most to be
thankful for notwithstanding high cost of living.

significance for the

Some other comparisons are, ho we yerB of interest. >
Take, for example, the so-called, rentier group or element

ordinary person who owns savings

bond

or

other debt

paper

me. kind that will tend to

,

remain

sume

dn the populatioiiT^hat is

be

of the

partment of Commerce, was $6:5 billion in 1929: Thererafter it started on an uninterrupted downward course

risks.

6f ^Federal,

$4.1 .billion in 1940, It had re¬
of 1948 only to about
S4;7 billioh annual rate. There is, unfortunately, ho

which took it as.low

reached at; the

covered

^generally .realized, i There is:

shown, in Table

IV' the over-all

debt red"^tiW^ "Ydm 'Feb, '28, 1946
to Vldne 30, 1948.
-V

I

-

application of the large cash bal¬
ance'On hand after the final war
loan was issued.
The decline in

-t

v

r

*.

«

"•

i

\

''-v

•

r"st

v

'

•

v

Iture.

•

w

Despite all the favoritism and all the subsidies

even

as

in the second quarter

isatisfactory data by which to adjust these sums for the \ loss of purchasing'power by the^^ dollarv but it ^ is^^ evident
enough that these Individuals who, in their, self-reliance
and their prudence set aside sums in the past, have suf- ;
fered and are suffering as greatly as the farmers and the
(wage earner, have gained/ If tears must be shed, these

(Continued from first page)

'

according to the Department of Commerce, which ob¬
tains its* in^orniation from thd'Bepartmeht of Agricul-

Accoruin^ xo this - part of the
record, the major portion of, the
debt reduction came about by the

>

*

»

•

V;

those whose Income is chiefly

savings. The '"net interest" component'
national income aggregate, as reported by the De- ;

interest oil past

end MiFetoniary,;.-^^

i

position 56.6%; the farmer, 35.2%. From the peak of
the employee slipped back by 1948 in terms of real

wages by nearly 18%; the farmer
of wage and salary earners from

.

the? debt

Now if

with

:

>

of

level again until
1941 when it came to $6.9 billion; 'In the last war year,
1945, the farmers' income rose to a point almost double
that of 1941, that is to the unhear d-bf total of $12.3

!the New Deal; it never, reached that

are

guaranteed debt presumably oc¬
curred? through- the application of
government corporation funds to
billion;
this 'purpose.
There will prob¬
'
t
"
Still Gaining
ably^ never again be, in peace¬
''
time, a huge general fund balance,*
f: -But peace brought no <ieclin'e iii"farm income;^ Oh ,the
and the operation which was pos¬
sible, after the war borrowing contrary,, jt ha« .continued to mount year by year since the
war's end. In 1946 it was $14.6 (billion; ih,1947 iiwas $i5.7
stopped cannot be repeated* V
•

the individuals who should draw them.

The • fate of the entrepreneurs

received

,

.

•

who invest in the equity

much the same. In 1929 they
$5.8 billion in dividends/ In 1941 they received

securities of corporations; is

ofrly $4.5 billloni Even-in the second quarter oi 1948. fhey,
were

receiving dividends only at the seasonally adjusted
$7.3 billion. No matter what "deflator" is employed,

rate of

1948 it was running at there can be no mistaking or disputing the fact that these
seasonally adiusted annual rate of $18.9 billion.
The elements in
population, too, deserve much more sympathy
since February, 1948, for the rea¬
farmer gained 78.3% from his best year prior to our entry
son that they do not -reveal the
than the farmer.
i
'
s,
Into the war to the end of hostilities.
From
1945,
the
last
changes that occurred in its inter¬
data

The

Table

in

tell the entire

billion; and in 1he second"quarter of

not

IV do

story of the debt

i;

..

nal

are'

year, to the second quarter of 1948, his gain was nearly
54%' From 1941 to 1948 he increased his dollar income 174%.

composition.
These changes
important.
In some respects,

they

are- more

significant,

fairly accurate idea of his progress

The significant fact disclosed by
the' data in Table V is that with
hfet decrease of $28,7?5

a

•iiiiHion m

the marketable or

fully

tion and that of his

negotiable Cdebt during? the same
period. The difference is account¬
ed Tor by a moderate rise in- the
nonmarketable public issues and a
substantial increase in the special

We

is

''principal

reductions

made* This

"Table" Vi Xt is
the. aebf ! induction;

the

of

seen

declined about

21%.

During these

years

ap¬

propriate adjustment for the change in prices and

his

real

tttai

!

theBend

of

$39,439

grasp

come

within the

of individuals whose income has not kept pace

i economy at

this moment, should

we

Why, if

we

really

the heart of the

condone action by

[ the powers that be to prevent .prices from readjusting
from 1941 to 1945. Prices paid

themselves

by the farmers, according to the [Department of Agriculture^
million since rose about 32% during these years. Make allowance for this

February, V 1^46,

of these necessaries of life bid fair- to

believe that "Inflation^! is eafing at

the farmers

which jfhe marketable V detjt/
•'been reduced

bolster the position of the

Why should there not be rejoicing that some

With the rise in the cost of living?

gain becomes 53%.

Now. take the war years

program' by

farmer?

the

dollar income by 21%. Make

farmer increased his

considerations should it be thought wise
billions of dollars from the pocketbooks of the

I taxpayers of the nation to

i

Why, again apart

from political
to take

family, biit the prices of goods used

of the product^ of

farms recede from the clearly abnormal, not to say

ridiculous, levels they had reached?

:

Between 1929 and 1941 prices paid by the

figures.

woj:th 'while to show, where the
% ipayk^table debt were
is done .'in Table VI.

our

1

imposed upon him.
can'scarcely imagine greater liberality. Here are the

farmer

As-a final statistical exhibit, it

hue and cry when the prices of some
i

by him in production and the taxes

issues.
-

and we get a
during the years in

.question. For this purpose we employ the price figures
of the Department of Agriculture which include not only
things the farmer buys for his own personal consump¬

-million

; in the total interest-bearing debt,
there was a net decrease of $39,438

these, should :there be

as

(apart from political considerations, of course) such a

price of things which the farmer buys,

V.

They are shown in Table

Why, in light of such facts

these changes with the rise in the

Now compare

any*, that have occurred in the
over-all area' of the gross public
debt.

Why? %

war

event

has!

of change and the farmers gain stands at 35%. Prices paid by
the, short-term paper. In.view.of farmers rose between; 1945 and the second quarter of 1948

normally

—

all for the doubtful benefit of

of^^ithe^^country who^ of course, will in any

benefit from the large yields of the season?

/ been cOn ceiitrated in the area

Vthe ;• .extent' .'to ' Which/this/': paper
was

hold by

the:corh^rdal banks by

j!, jan<J the, reseryq. banks, it appears
that the debt payment

so

policy thus

a

little less than 44%, but farm income rose about 54%,
;7% above

that the; fartner in the second quarter was some

.far! pursued has been directed at his warthne peak iq real income. If we measure 1948 sagainst
thav basic-source of: the .credit JixB 1941 .we find a dolto
gain of nearly 174% against an $9%
flatiori,' which ' is the bank-held
debt. V Xo precise evaluation of rise in" the priceof things farmers buy. This gives the farmer

■

Hayden Mem. Trophy
Gold Tourney Revived /
] The Charles Hayden

Memorial

Trophy>* Golf uTournament, after
will resume

wartime interruption,

.

the[ deflationary -results of. this
operation is possibles In any case,,
these re suits', have. been-offset, in
considerable degree; by
reserve

.

,

a

It is

to suppoi't bond
ahd^, by J an expansion .' of

bank -loans

to

private

of

some

45%.
Farmers

bank; purchases

prices

real gain

1

business.

interesting to

vs.

Others

compare

these real gains with

'

Take first of all

compensation- of-employees—since it ; is

field

well known that

f'gains'? here have been unprecedented

have expressed concern over

the Xisfe

OfVhusiness rbankVlbahs

and! they

are^yirtudlly^mianimous




i

during the past decade and

a

lialf. From 1929 to 1941.

Jersey,

The tournament was last

played

in

the partners of Hayden, Stone &
Co. donated a new trophy which
will be kept in

perpetual play as

to Mr/ Hayden.

a

Since

his death, the invitation tourna¬
ment has been a cooperative ven¬
ture.

when

foursomes

Fran'cis .A. Cannon of The First

Boston
of

.

this

competed

-

.

by one firm.

After his last cup was retired in
1939 by Hemphill, Noyes & Co.,

Corporation is Chairman
year's tournament com¬
mittee. Other committee members
for the trophy won in that year by,
are:
Thomas F. .Staley of Rey¬
The First Boston Corporation. >
nolds & Co., W. Halsted Taft of
iln the history of the tourna¬
Hemphill, Noyes & Co., and Wickment, three cups donated by Mr,
liffe Shreve of Hayden, Stone - &c
Hayden have been permanently
1941

from 40 securities firms

those? of some of-the other/ elemetits in the economy^

Various authorities in- the banking

play for the twentieth year on
Sept. 20, 1948 at the Baltusrol
Golf
Club at Springfield, New

traditional three legs

retired

upon t the

I
winning of vthe Co;

■

■

-

;■

28

(924)

THE

COMMERCIAL

FINANCIAL

&

CHRONICLE

If our Estate and the Inevitable Taxes

of

Thursday, September 2, 1948

maturity. When

insurance

is

cash value the

(Continued from
31,

retroactive.
The

surviving
right, it

and

'

<

device

4) ;'
.•
is not

page

1947,

/

bequest

or

spouse need not be out¬

be in the form of

may

a

the proceeds of such as¬

or

sets. The law

interests

in

estate that could be used to
the

insurance,

stating that if there

terminable

are

the

to

assets

the

rule applies

consent filed after such March 15

must

be

qannot be revoked.. '
/
The; liabilityv fer the gift tax

been used;
so left
{ *. J
terminable; and, provided
The Rate of Tax
further, that all the income of the
The rate qf. tax" is, not changed
trust is to be paid to the
sur¬
viving spouse for life at yearly or by thq ;amohdments)" to the yrev*
enue
law,- but the act does! not
more frequent intervals.
^'
>,
•Vfr'VtV.', Vy.-v. permit ' exemptions
for property
previously taxed within five years,
'/J
, "Terminable Interest"
as
the
old
law
A ''Terminable Interest" is de¬
provided,
>•

renders

As

far.

has

incident

by the courts."
tions

105

vdals

,,

of ^ownership

Treasury regula¬

the

of

Reveue

What1 matters,

Act; re-

volved

in.

tion

legal incident

in¬

be

may

determining the

ques¬

fined.
fail

as

interest

an

terminate

or

of time

or

Under

the lapse

upon

the

upon

will

which

the

old ; law

there

*1

Marital

the

half > wil£: have the $60,000 " Ex¬
emption.
There, therefore, -will

(1 ):Af graint,' bequest or device
by the decedent of an interest in
property, to another per¬
-than--- the
surviving

be

other

.

•^Spouse/.//;//'''■
(2)'' The

//
acquiring such

person

Deduction

and :the

unless

tax

no

Gross
/

Estate"

is

the

over

to its. economic bene-

under

jrehder value of the policy."; % \)
The

"Adjusted
$120,000.

the

regulation practically
make only

insured to

limits
out

an

out assignment of the

and

value

policy
and without:

received

the

instalments

the/property should

$500

to' another

in

the

,

event

of

20,000

rer

later

$1,100

"•« '

J'j

J'J

1,600

fs

i*"

•

;

,

/

/

r

14%

40,000

the income of the trust be
paid to; the surviving spouse for
life and the.corpus be distributed

1,400

to

\J:

■

1,800

4,800

25%

2,500

9,500

25&

60,000

«nd

spouse

9,500

the

"

have

an

of

real

another for life with
mainder to the

a

estate

to

vested

re¬

surviving

The

Marital

disallowed

minable

Deduction

in

interests

to

are.

quired for the surviving
the

tion

tax

decedent's

trustees

3%

executors

pursuant to

a

purchase an annuity contract
the surviving spouse for - a
term of years or. for life;,,
.There

are

death ; caused. in.,
accident. A legacy to

a

$200,000;

runs

from 1%

20%

on

5%

allowance

is

taxes paid

^

There'is

on

surviving
death

spouse

die

within

six

mon

terest "so that

of; the decedent spouse's
and/or both die in a com¬
disaster.
These
conditions

tied to

direction

legacy will not of itself
disqualify the surviving spouse's

right to
less... the

a

marital

deduction

surviving

an

un¬

within the

stated period: ' "
Provisions can be made in the
event the power of
appointment

will be near enough to obtain such
;
by the surviving object. ,c(,.
spouse, that the. property be dis¬
tributed to others. designated. A ,y
^Application toi Life/ Insurance, ;
legacy to, the surviving, spouse of
I The
Federal Estate Tax laws
other than.specific assets as "oneapply to life insurance/ If the in-half of- my estate,":: {should be siired at'the time of
death poss¬

is not exercised

_

rv:;.

-

.

-,'

p v.:?

-.:•1 -

-.•

*




...

f

,-#

ill;-*

to-Witl '

<,.

i

'

»•*

v

,r *,v

$100,000

as

between

wife

,

afgift V;

assume

by

the

(. jGfftt;$ioo;pooV/r. ,t
$50jCfOO or ^ of thefotal gift' would

are

are:

and

double in¬

considered
considered

not
are

treated

as

annuity,
refund

be taxed.

providing

or

A

of

f

f >;beyt^t
ihg) deemed ^community y
property, % of the gift is
: r made by the; husband and v
t

the other V2 considered as

;(2) A yearly exemption of $3,r
000 dtiring each calendar year in

property of the wife.
30;000 The specific - life exemp-

addition to the $30,000 exemption.

?he marital deduction is

each
can:

spouse.

Thus, a
give, his wife and

husband
can

so

a gift of
$6,000 each year and not be sub¬
ject to the* gift tax. One important
consideration: mtist be remem¬
bered, the gift must be outright
and no strings attached.
.

If neither spouse has
tion
a

or

3,000 The annual exemption of
the husband.

$83,000 Total amount Tax free.
So that
000

a

wife give her husband

part of his

ytion: of the • husband.

now"

permitted in respect to gifts made
bn and after April 2, 1948. A gift
made either by husband or wife
is considered; made one-half by

used any
her overall exemp¬

tax amounts to

.$1XkM-

$952.50. ""

Formerly if a gift was made
within five years of the death; of -!
the ^recipient /a ? deduction wasV
allowed in, the recipient's estate >
for the gift tax.
No such allow¬
is

ance

permitted.

Future

of

$30,000, it is possible for
spouse to give to a child $120,000

have the stim of

we

subject to the Gift Tax, which

interests

remainder

v

other

or

,

'

(

reversions,

as

interests

<

or y

estates vested or contingent which: ~
10-year period without in¬
are limited to: commenqe in,
use,
curring a gift tax: $6,000 of such
gift would be the annual exempt possession or ^enjoyment yat some
tion of both spouses totalling $60,- future ti me; cannot, pastas a, gift. v
The gift therefore, must. be of!
000, and the balance of $60,000
being the : overall" exemption of immediate use.
The gift of life insurance,: like
both spouses/
; Whether it is wise to depend that of any other kind of property :
is based on thefair markets value :
on the continuation of these ex¬
over a

.

.

..

.

emptions tin; :the future is very of the contract at the date }qf the ■"
The surender value is usu¬
questionable. In 1932 the life ex¬ gift.
emption was reduced from $50,000 ally y the market; vafee; of a life
to $40,000, and some years later insurance gift.
to

$30,000 the present exemption.
annual

;

exclusions

from

to the

same

from

time

was

$5,000 to $4,000

to

re¬

and

present $3,000.

gifts

is limited to the
amount of such gifts included for
the
purpose
of computing net
gifts. Example: a donor trans¬
ferred by gift to his spouse $4,000
in January, 1948 before the mari¬
tal deduction was permitted, $4,000
in July, 1948. Total $8,000. $3,000
is the annual exemption. Balance
$5,000 net gift;* '
■ / * /
Since

the

total

marital

deduc¬

tion Of

$4,000 does not exceed the
net gift of $5j000 the marital de¬
duction? is allowed in full;
' •• • ;
Under

"

./The ^; State Estate Laws..;,

the

The; marital deduction with ire*

spect

either

continuation

,

■r' t

of

Laws,

4

^order/tb get afelLpicture of/
planning an estate one must know
the laws relating to death duties
of the particular state where

one

resides. ' The State of New York

has the most comprehensive ♦stat¬
utes

relating to death duties. The

New York State Transfer

law

Tax

adheres

to

the

(estate)
Federal /

State Tax Law/as closely as pos?
sible.

The

decisions

New

York

State

tax

generally in uni¬
formity with the Federal tax ;de- •
cisions.
Many other ; |S,tates bave ?
followed

are

New York /statutes

the

relating to death duties; and
will use this State as

we

an-illhstra-}

tidn,

■

*

,

-

the

third

Dividends

\

;

but

the

excess

are

cost

not

of

insurance.

iln -air endowment policy," that
matures during the life of * the
insured,, the excess received over

married to each other at the time
the

gift

made and neither
is permitted to re-marry dur¬

one

was:

the Federal

oryhfe:estafey/JVbilje/

s

tatufe requires nil life/;

insurance proceeds be includedtn>

the gross estate and taxable, the
Both Courts of the State: of New
York/:
in writing, have ruled,' that^^ where
:the/prw^ '
their consent to the gift.
ceeds of a life policy are payable
:
A consent to any gift made dur¬ to others, such proceeds never be¬
came
ing a calendar year is a consent
part of the decedent's/estate :
to
all ' gifts made; during such and-never passed• to the; bene-1 ;
calendar year. The consent must ficiaries as an asset of the insured >

ing

;

the

spouses

calendar

year.

must .signify

-

be- made and

filed/

on.

or;

before

decedent: -/•; yy
/-.vy )
The New York Statute continues *;
the exemption
of property/ re„

premiums paid,: (less dividends)'is

March*

ordinary

If

income and taxable- in
year-fthe policy •metures.t if

15/ of the following:

year;

extension of tiihe is granted
to»fHe both returns the time to
an

-

■»»

of

Let hs
to the

spouses.

;"V;" ^" :"v:

i(l) An overall exemption
$30,000 during life.

the
any incident -ef ownership,
vpajcl directly or-indirectly-the left with the- company,- the excess file the consent - will be extended
premium -or premiums fotr such. still must be reported in the year to such, time^ The consent can be

;

>*: A

or

value left to

no

iriterest

essed

%s

ing such legacy from terminable
•

Death claims ^under

nanie*

cash

the

„

.

coupled with a direction that pro¬
hibits the executors from satisfy¬

theory of transfer. The

works

law

Tax

the

,

be

one-half ..of

Service

option is chosen the interest re¬
"Adjusted Gross ceived is income in the
year re¬
Estate" as provided by the Fed-:
ceived.
Income
policy
for
a
eral > Revenue Laws: ;and
iprovid-i. divorced wife under a final decree
rag that: such bequest shall : not
of
divorce
is
income
to ; the
bear any part of the death duties
divorced wife.

dies

spouse

interest

duties; I Bequeathing

Gift

tax'is based upon

■

of death
such in¬
there should be a

of the death

liability.'Now, let us see how the

the

present Gift Tax
Th^exemptions; are/few in the/
party gifts, on and New York Transfer Tax Law, To
after April 2,'1948, received the husband or wife an
to its present Value.
:
exemption of
Where life insurance contracts greatest-impetus. Under: the pres¬ $20,000 is permitted; $5,000 ex¬
ent act, as shown in the gift to a emption is permitted to each lin¬
are absolutely and unconditionally
assigned for ah adequate consid-- child, a large distribution of cap¬ eal ancestor or decendant, brother,
ital assets can be made. The act sister,. •
eration the proceeds are not sub¬
son-in-law, daughter-in7
ject to the Federal Estate Taxi ' " permits a/ gift to be made each law/Ifthenet/estafe^^is^^less'thknyV
Usually in connection with life year to third parties as if one- $2,000 rto tax is imposed/ V' : 51
insurance several, questions ^-arise half V were i made by/the/ hus*
.There ^ i$y obe/ very j importabjk
mostly relating f;o the income tax band and one-half by the wife, asset that/need not be included in,
which spouse is the
laws.. The death proceeds of a life regardless
thq 'gross ^yestate;^^
actual donor.
To qualify for this
policy, ^Whether paid^ under .any
same must be repoi ltcr);
.and that
deduction - each,
spouse is. life
of the options or in a lump sum marital
insurance, the proceeds qf
must be a citizen or resident of
are
not taxable1 income /to the
which are; pay a ble-to/others ;than /
the United States. They must be
the msured
beneficiary, except if the interest

exempted from bearing any part

a

Endowment, Na¬
Life, Family In-

-

permitted for
to the domicile

such

like

■

then

Paid-Up,

to. others is taxable
fbr the cash actually received or
tq the aggregate amount receiv¬
able by the beneficiary discounted

precise method of

that

de¬

installments

over.

creased, by the .amount
duties charged against

months

Tax

there is a specific
exemption of $60,000, the gift tax
allows the following exemptions,

duced

a

the first $50,000

a

to others if the

year

,'N, M-

.

Gift

Estate

same

Life,

refund

.

pass

Federal

Federal

We hfiive already seen how! a;
gift to d child,- or.; ahy/other third/
person would work out. Over"' a '
^ 10-year period $120,000 could be
important transferred without any gift'tax
the

tax is an
planning one's estate.

in

measure

The

noted, 'Term," Limited Payment,

has

surviving to the surviving spouse will equal
spouse will not be disqualified if
one-half of the decedent spouse's
the only conditions tied to out¬ /'Adjusted
Gross
Estate.""
The
right ownership shall lapse and Marital Deduction will-be - de-*

the. property

be

other form of property. A life
annuity ceasing at death naturally

./;/' /^

no

gift

gift tax at the

of

any

insuring that the interest passing

common

in

The Gift Tax

The

insurance

contract

Annuities

The tax

so on.

considered in¬

1

the

life insurance

of

the

- on

$10,000,000 and

on

4

few exceptions such

as

;v.V;*-.»

received.

The

demnity policies
lifellnsura^ce;

state equal to 80% of the
tax
computed under the 1926 Revenue
Act.
y

to

for

'

next

estate

exemption

life insurance-is

accident insurance

the next $50,000;

$200,000 and

An

or

direction

on

next

to

by

after

the, next $100,000; 4%

on

the

ac¬

spouse

was

$50,000
$100,000; 2%

be

be

was

are

taxable

statutes, whether

natedf

en¬

In 1926 the exemp¬
$100,000 and the rate of
and still is 1 % on the

first

where v ter¬

cases

comprehend the

Governments

spouse.

will

to

per-?

comwei :Grpupor,any pther/desigr

tire estate tax laws of the Federal

interest in the property;

device

a

1948

and

surviving spouse's inter¬
terminable, the Marital
Deduction may /be
used even
; t though some other person may
as

and

come

included in the

tional

,

If the

such power; is not" ex¬
of the pro¬

'Every kind of

77%. The revenue
laws relating to estate taxes were

est is, not

event

'

or

■

A pro¬

ceeds to go to other named
sons is permissible.

pass

.

her estate.

or

or

ercised the/ balance

that the trust property never consolidated to make one
outright to the; survivor of .Federal: Estate: Tax Law,: so that
the
twojpyill be a - terminable inr today we must1 Todk at the Fedterest,.
eral statutes of 1926,
y-jri*}.; * .
: .vfqyv.
y
^ "
1932, 1942
son,

her

or

directing installment pay¬
interest payments to the
surviving spouse, with full power
to! name his or her: estate and * in

/ to

another r per¬

after

paid yearly or at lesser
are paid soley
to the

death to his

28%
11,200
20,700
If the bequest of an annuity to a 100,000
surviving spouse is coupled with Tf rthe net! taxable: estate is $500,a
direction that at the death of 000 the tax is
$145,700 and if $1
such spouse the
annuity be paid million the tax is $325,700 at a
to others.
A contingent bequest
tax rate of 39% to estates of
$10
in trust, that certain
property be million when the tax is $6,088,200
for the joint benefit of the sUr- at a tax rate of
viving

months

vision
ments

2,500

thirteen

full power to ap¬
point any amount remaining after

to

spouse's death
Would be a terminable interest. So
would a terminable interest
exist;

in¬

life and with

•,/

60,000

the

the

surviving spouse during his

V

18%

are

intervals,

3,000

",v/"a

to

at

option, the installments or
are paid commencing not

than

death,

v

•

30,000

that

at

'r,

;

to

marriage; limited to a certain
time;) dependent oh the removal
from a certain place. A direction

others

11%

left

or

interest

to

pass

severally^^liablefor; thefex/Kqrie/:
spouse: pays' the gift : tax of both /
spouses
suchpayment is ; not
deemed & gift to the other spoils^ ^

the estate tax

cash pr'siirf

loan against the

lar

terest

if

yearly

gijPt"tax is 25%' lbwef than the^es- Kijsb^d.:The
#6uld/sh6w^;
isign; it * or revoke an assign¬ tate-tax- jancl the specific-exempt up as fellows:/:%v ///,. y!
tiqhf
are'
quite
different.
While
dri
ment, to, pledge it for a' loan,1

other

A "Terminable Interest" would

revoked) devolves on each spouse,
because
they/: are /jointly
and :

for

ments received

*'

yi:per;(^;icahcel;the:;p^

death;

occur

a

3% of the aggregate
paid.: Thereafter wnen
the aggregate .is reached,-all pay¬

power; to change the
the
; I Iberteflciary;; the light 40.
surfen-y

apy strings attached- to the as¬
net estate after deducting the spe¬
bequest
cific Federal exemption' is $5,000 signment.
possess
or
enjoy the property
the Federal tax is $150 or 3% on ;; The proceeds of life insurance
after the termination or failure of
such interest passing to the sur¬ the. first $5,000. 'If over $5,000 becoming part of the decedent's
and not over $10,000 the tax is gross estate will give rise to the
viving spouse.
Deduction. "The
estate
$150 on the first $5,000 and 7% on Marital
v ? In other words the
trust, and the balance or
$350, making a tax law applying to one's estate
the income from the trust, can¬
total tax of $500 if the net taxable applies with the same force to the
not be fettered with conditions.
estate is $10,000.
The rate of the insurance proceeds.
The Marital
The surviving spouse must have
tax is progressive to wit:
Deduction will only be allowed
"
the sole right as long as he or she
when the
surviving spouse re¬
lives to the Use and enjoyment of
3%
$5,000
$150
ceives the proceeds of the life in¬
to
the property with the right to dis¬
surance outright, or if payable in
7%
pose Of the same at his or her
10,000
350.
cumstance

>

as

(where the consent has not been

premium

owner¬

or

taxable

Jare

.

remaining the*
is as-follows—if the foi

the tax

of

."The right of the insured

•';+. jits; the

The ■ rates* of; tax

same

Interest may by any possible cir¬

to

iAnnuities

income

;

jhis estate

exemption of $60,000. This ex¬
emption is kept intact in the new

the

same

!

:

en

occurrence or

of

'

was

an event or contingency; few/ Now. Nvith the Marital; De¬
following conditions, exist duction; if the revenue act is com¬
in the... trust- estatei; the "Marital
plied with, one-half of the estate
will be tax free because of-the
Deduction" will be- disallowed.'

'

:

''

not considered capital

gain* and are mot: considered
sale pr exchange. 1

ship:

lapse ;of

•

are

-»• j

r

son

are

definitely been defined

never

,

'

If

annuities

as

day of death is the value to

Legal

:

not

reported

able.

trust, provided the interest
is

excess

of; the decendent's estate and tax¬

be reported in the gross estate.

so

the

and

its

in the year of the surrender, Sur¬

the

legacy those interests will be
r

part

proceeds are

concerned the commuted value at

satisfy

conclusively deemed, to- have

the

-

same

'

after, Dec;

reyoitfed ..before; March 15 of the:
foliowing!year of the gift, but a

policy of life

a

surrendered -for

ViK

1 .*

r *

'•

" •..

«'

ceived

'

from

five- years

a

decedent

>

within '

of :4;he -present decen¬

dent's death.

Such, property, must

-

rvi);

'»

J

•:

-

-fsx >y

ft

r eus

i

•i:

/

Volume -168 >; Number" 4780

THE

>.1:

COMMERCIAL

&

FINANCIAL, CHRONICLE

,i?25) ^29

tt
^

i; have been reported in

the gross
estate of the first decedent. This

the

same

ed

Gross

is not

poses

eral

contained in the Fed¬

now

all

practical

Tax Amt.

XXX/./XXXXX' *•'•'*

■' on Block

Total Tax

>

of Tax

<

1%

$150,000

$1,500

200,000

50.000

2%

1,000

100,000
200,000

3%

3,000

4%

200,000

5%

200,000

6%

£1000
10,000
12,000

200.000

7% •;

14,000

49,500

500,000

8% '

40,000

89,500

:;X 500,000 X

a;

V

900,000

1,100,000
X 1,600,000

:
V"
,

/:

If

1,000,000

19%

the net estate exceeds

were

York

Many

-

r

;

at. the time

bitter

March 15th of the

law

after

question., of

at the rate of

decedent's

dom¬

,>* ■

gift

year

Interest

6% is charged from

be

made

»temporary

placeof

-

count

//stay

thereafter,

continue. As to married
general- rule is that

may

the

rn.women

her

domicile-is

that

of

15

her hus-

of

now

death

to

come

duties

Payment'of

the

and

the

gift

1+is obtained

If

no

per

death

than

If

will

the

tax

months

18

ex¬

is

after

interest; /per annum
the date, of death.

is added from
This 10 %

be xeduced to 6%

can

by the. decree of the Surrogate on

extension

penalty of 6%

a

after

later

to

ideas

new

de¬

and

prevent

them

from

being

good- eause .being shown.

-

.

.

,,

are

'

•'

■/*

expected to possess and to

«A

■

•

-'/-'V-; ■■■..'■ y-.v'

j--A."'- • f

'

•«/' *•'

,< «.

Cooperation With iBank
Supervisors
The fact that I have been
vited
that

with

be

to

you

be

ap¬

ply a profound sense of respon¬
sibility
and trustworthiness.
A'f..

in¬

assures

should

have

to

re¬

my

pointing out specific
which
bankers
must

problems

lace
V

confined

today/

which

I

correctible defects
from my-vantage
national bank super¬

see

point

as

visor,

somewhat

a

with

conversant

the practices of banks from one
ocean to the other.
Some of the

/things I would have liked to deal
with, in order to assist you in

.

-

•

determining what should be done
to put your own bank in the best
X condition, have possibly been covered
by your - courses n here. I

;
■

have
-need
serve

in" mind,; for-example,
for

getting the best
directors of

as

the

men

your

to

bank;

-the need to set up personnel pro¬

cedures designed to get the most
competent employees — and; to
Itecp them; the • dangers of one-

v

for

self-scrutiny

have
to

otherwise.You

or

right to expect them not
fanatics—i.e., persons who

a

be

redouble: their

zeal

after

they
of their aims.; If
supervisors cannot measure

lost sight

to these few expectations they
cannot
properly discharge their
up

obligations

as

public • s;ervaftts. * •' -

Improving

banks; the hazards of trying
original
thought, logic, and common sense
in deciding banking problems; the
-inadequacies of bank credit files;
man

to Substitute formulas for

Bank

However, I
little

time

to

Supervision

wish

to devote a
presentation of

the

another side of the picture, a side
which is generally overlooked.

I said that I considered Yny-iri-

-

vitation here
ization
eration

of the

as

proof of

a

necessity for

between

banks

and

real¬
coop¬

bank

than

more

passing
interest in improving supervision.
What

are

a

entitled to ex¬
supervisors?
You

you

pect

of bank
are entitled to be examined
by a
man who is interested in
helping
you

improve

banker

: your
bank. / If-; a
cannot benefit from an

•

often

han-

dled-t-by that I refer to the
quisition and disposition of

ac¬

so-

called investment securities—obli¬
gations of far-away industries and

municipalities

concerning

the banker too

which

frequently knows

banking practices.
exami ner must

/Let's

look

a-

or

or enters

into some other transaction

or ac¬

tivity; the examiner; comes along
•and/ says

In

two

such

refers

he ado ffice

decision .must

a

making

are

examiner

the

to

be

made.

decisions

there

general

approaches;

roughly
speaking:
the
general
principal method, and the caseby-case method.
In

passing

upon numerous cases

involving the same general point,
arising in all sizes of banks in
all parts of the country (or State,
the case'may be), the formula¬
tion and consistent application of
as

general' principle is not e&sy.
calls for hard work, thorough
study, and an understanding, of
the factual background and the
a

It

practical

numerous

factors

legal and

involved

in

such problem, and expres¬
sing the general principle or rule
language which is clear and as
simple as possible while yet cov¬
ering the entire ground;
every

in

This is the correct—but painful
—way
to
exercise
this
bank

supervisory function.
diate

reward

for

The imme¬

one's

labor

is

that the

tion,
laid

ruling or the interpreta¬
and the agency itself, are
wide open to1 every attack

and

criticism

which

be

can

worked up

by those who feel that
their-interests are adversely af¬
fected. •
^
'.
r

,

.

,

The Case Method

The alternative course,
namely,
the avoidance of the formulation
of general principles and the de¬

there is

nothing much for adverse
criticism to sink its teeth into.
Those

who

bureaucratic

a

high degree;

case

must

merits"—
sound

a

in-

which
and

his convictions and be

unbelievable




in such cases must

sense

be

preserved.; .But

every public
who .makes decisions on
basis must
keep

this
in

constantly
the implications of his

mind

.One

of- .the

cepts
that-

of

fundamental pre?
democracy is

American

I

this

latter

is

de¬

attractive adjectives
A favorite is the
cliche

that
on

"each

its

own

is

very much overworked
used with respect to an

number

of

govern-

-

feel

it is no exaggeration to
that the difference between a

system

in

which

basic

rules

and

principles of general applicability
are made and
published and ap¬
plied .uniformly: and J'openly/and
system

a

such

in

rules

which

there

are

nc

principles and
predicated upon

se¬

or

are

reasons

of

an

difference between
American way, where a
conduct

man

seen

amples
tury.

the

and

of which
many horrible

way

so

in

can

business

personal
without
fear,

authoritarian
have

free

our

his

affairs

the

all

individual, is

the

American banking.

viction,

and

It is my con¬
that of 'all

hope

I

State
and
Federal
supervisory
authorities, that there is every¬
thing to gain by frank and honest
disclosure of the things we are
trying to do and the reasons for

doing

them,

willingness - to
honest criticism
suggestion, by willingness to

consider

admit

and

errors

Even

1

ones.

real

improvement of
supervision
is
dependent

/

so,

the

upon

scrap unsound
procedures and to

and

build better

bank

by

every

sincere

interest

of

rise to constructive suggestions.

The approach which I have out¬
lined .is not the easiest course'to
: It is

pursue.

it

in

times

difficult to hold

of

to

and

doubt

last

we
ex¬

quarter-cen¬

,

American

based—a

the

public ?, system
that, .is

government

,

best

sense

laws and not of
?

In

Policy of Comptroller's Office
I am glqd to say that, the,Office
the Comptroller of the Cur*
reney hasi adopted what I believe
6f

to be the right course of action ir
this respect and one which will
be helpful to the whole

banking

fraternity.
weeks

Within

the

next

two

the

men..

me say that
problems today are
present world out¬
look is
gloomy, with cynicism,
weariness, selfishness, fear and
suspicion prevailing in nearly all
sectors of the world, we need not
despair.
We need not despair if
we will regain some of what we

although

our

grave and the

lost with the passing of the fron¬

tiers; the willingness to work to¬
gether
with
our
neighbors
in
endeavors

common

-toward '-the

same

end—not

of

shall be stronger and more

us

the

monious

joint

efforts,

have

published

it

in

can

be

with

kept

current

and

the development of

and

that

so

we

Jill

can

grow

banking
in

the

one

but

us,

rather the end that through
we

har¬
as

a

people shall be strong enough to
for

preserve

all

our nation, and
for
like-thinking nations,

other

cornerstones

are

the four

of

democracy, as .we
know it, as we want it, and ./as
we will have it.*
•» ,

anbther

At

minutemen

Lexington,

stood

firm

the

because

they had faith; faith in principle,
and faith in

themselves, individu¬
ally and collectively.
With such
faith we, too, can face the future

Comptroller of the
with confidence and
will publish and send
eagerness.
every national bank in the
country a digest of opinions ana
interpretations of law relating to
Seth Szcdd Joins
powers and operations of national
We

that

end

powerful than the rest of

Currency

ioose-leaf form. inv order that it

is
in

conclusion, let

even

to

banks.

i

with

-"

^

Edwal Laboratories
CHICAGO,

ILL.—Appointment

of Seth L. Szold as Vice-President
and

Treasurer

tories,

we

may have

made.

ter
government
and, we
hope,
better banking, by furnishing na-^
tional banks with
will

answer

arise

in the

We

ness. /

"guide" which

a

many

questions that

course

of their busi¬

believe the

great

ma¬

jority of banks will accept it in
good faith and

use

honestly
selves.;

benefit

with

me

to
to

to

v

you

this

because

exemplify

was

Walter

expanding operations. *

Mr. Szold

comes

to Edwal from

J. M. Dain & Co.,

in Minneapolis.

tion as
he

was

tion

investment firm
Prior to his posi¬

Secretary of Dain & Co.;
assistant chief renegotia¬

officer

in

the

office

of

Secretary of the Navy./?
Before,'entering the navy
them¬
1943, Mr. Szold specialized

the

it wisely and

I have mentioned
tion

Dr.

Inc.,

of Edwal Labora¬

announced : by
Guthmann, President
of Edwal.
Mr. Szold's responsi¬
We know we may be stirring
bilities, which began Sept. 1, will
up a lot of trouble for ourselves
cover
accounting, financial con¬
by this action in that any state¬ trol and forward
planning.
Cre¬
ment
of
a
general principle is ation of this new
vice-presidency
subject to misinterpretation. But in the
company, Dr.
Guthmann
we also know that we are
moving explained, was made necessary by
in the right direction toward bet¬
Edwal's
many gaps and correct the errors

it

publica¬
seems

correct

a

to
ap¬

proach
by ■ bank
supervisory
authorities to; their problems and

problems;
through which they

your

an

approach

may serve as

clearing houses to disseminate in¬

chemical

in
in

research with
Stein & Roe, investment counsel
industry

firm in Chicago, now Stein, Roe &
Farnham.
Szold's prior associa¬
tions
of

were

with the Chicago office

Lehman Bros., with Lawrence

Stern

tional

&

Co., with the First Na¬

Bank

of Chicago and the
concerning the -sound-1 Foreman National Bank where he
banking practices;'' an
started his career in finance upon
approach by which the banks un¬
der
their
supervision
may
be graduation from the University of

of!

informed,

as

fully

as

their

exam¬

>

government of

a

those freedoms which

some/situations,/ but

tactful, yet persuasive;
all, he must have the

courage of

slip¬

or

official

ness

but

subjects—and many more—could

which is manned

basically identical

are

namely, the ultimate maximum
and development of

benefit

ill-equipped officers and suf¬ bankers,
expressed through their
ficient
leeway
for
exercising aggressive cooperation and giving
common

formation

he must be

above

one

shod

doctrine which is very

transaction is profit.

All of these

espouse

be decided

Sole and dominant interest in the
"

supervisors

conservative

by speculatively-inclined

cret

the

or

case

and procedures in general and in

judgment to

ex-

be far less danger¬

may

awell-run

banker

it with

credit

in

decisions

slogans.

possess

given practice,- -for

a

it is ill^ga^t^ or unsafe
and: unsound; * then." either"/the

thorough technique in
government often

must'

on

say

investment,

an

and

fields;, he

on the legal
practical principles involved,

but

only tolerated,

at

just one typical
procedure: The banker makes a
loan

fend

told by

salesman, whose

have

and

•-

knowledge of the Dertinent law;
must know banking practices
special

bond

Therefore, the

he

nothing except what he has been
a

,

cide his problems not

always remember that
the goals of bankers and of bank

our

,

termine whether it is adhering to
theV law .and do safe and sound

re¬

our - government
shall be ia
important. But in addi¬ government of laws and not.of
qualifications of.person* men: ■+■»"*;WIiat may:
be£ih < as f a
nel, I think you should likewise /"reasonable relaxation of
-..prine
interest yourselves in the modus ciple" tb take care'
of a; "special
operandi of your supervisors, ie., case" can degenerate
into a sys¬
how
they
function. '.President tem
in
which
partiality, arbi¬
William
Henry
Harrison
once
trariness, favoritism and caprice
$aid: "A decent and manly / ex¬ come
very
close to downright
amination of the acts of govern¬
porruption.

examination, either he is an ex¬
ceptionally good banker, or the ciding of issues
'the heed for consistent and strict
exclusively on a
examiner isn't what we expect
case-by-case basis, is far more
liquidation of loans; the. danger of him to
be.
You are entitled to
tempting because it is easier and
ovdrlending; the hazards of reach¬
expect examinations to be made dodges cirticisms
ing/out of,; one's J territory - for
by the simple
by men - who are intelligent, and device of
avoiding publicity and
loans; and, cutting the list short,
thoroughly trained to understand giving the minimum
explanation
the'(haphazard manner in which
the bank's /problems an d to de¬
for
each
individual
"stranger loans"
decision^
are

that every

you

to

weighing the

.should have

assure

trying

are

'•

tion

sides; and

condition prece¬
dent to effective cooperation there
must be a thorough understand¬
ing of each other's work, func¬
tion and duties.
Too few people
ever take the time to
study the
workings of government, to study
its role and the make-up of its
personnel.
Therefore, for your
benefit, let me look at myself and
all other bank supervisors for a
few moments, as I would urge
you to look at us—because you

occasions.

can

and

ing more

extent to which it varies from one
situation to another.
It involves

a

I

on

par¬

sponsible government official is
tempted again and again to de¬

>

supervisors — state and national.
That cooperation cannot be one¬
sided; it must flow from both
as

ticular
V

act
on

procedutes///;//:^

How, Supervision' Functions

where

are

mean
is their freedom to
the basis of their emotions

sound

.

We must

skepti¬
cism.-.But -those. are • the times
which demand the greatest cour¬
age
and w: single-mindedness *J. in
adhering to the idea upon which

attempting to do in this
school—make your, banks better
banks, and hence, strengthen the
whole banking system which is so
important in our economy.
you

me

bans

marks

basis

the

ministrator of his. "freedom of ac¬
tion,"
but
what; they
perhaps

—political

the

you

supervisors, to the end
that our banning system snail be
strong enough to:,meet 'any tests
imposed upon it by a> very uncer¬
tain ^futyre.
;
if,'
In the light of that fact, perhaps
I

>

the varying fea¬
situation.":: Others
"rules" deprive an ad¬

that

say

to

are

apply.

"able

each

bank than in

which would be in line with what

realize tne necessity of
real cooperation between banxers
and

6)

page

itself
of

ous

ment should'be not

(Continued from

fit

tures

and without fear of consequences

but encouraged."

The Correct Approach
To Bank Supervision

to

position\ fp act /impartially example,

a

each month

discount.

death,X10 %

taxes.
Estate

Tax must be made within fifteen
months of death/

the

'

X; All of whSt" I have said- goes-to
that payment made qualificationsXandthere : is ;nothV

so

months

paid

payment

Federal

a

decreases

haust

band.^<£'V/i/X X—/'*''
We

soon; as
5%-discount is

or

and

to

doctrines

tax is paid within
six months after death. This dis¬

remaining

"

as

goodly amount

approach is "flexible"

because

i

-

his

iners, of the general rules and
principles which the supervisors
believe

would

several residences. The derivation

Tax 'should

possess a

general principle or "rule"
formulated, acts as a "strait
jacket," whereas the case-by-case
a

once

and

bank

.

analyze

said

his estimate of the char¬
acter of the persons or
institutions
involved.
This is understandable

have

payment
jh
Payment qf the New York State
time.

to

It is also

velopments, and willing and able
to cull out the
risky and encour¬
age the worthy.
You are entitled
to expect your
superviors to be
free from any alignments which

is not made

on

ability

You have a right to expect your
banx supervisors to be aiert, con¬
structive with their suggestions,

March 15th in the event

^(TOsidendi|thwwei^Aongf such

.

following

is made.

tion in their .meaning. A home (do- practicable for
/musiimore than a allowed if the
;

the

discipline.

icile, a person can have only, one
domicile:'although, he may • have
■*of the words point out the distinc¬

...

the

that

,

intelligence ana judgment; they
must know, for
example, when to
stop supervising and when to rely
on banker self-restraint and self-

in

of, the Federal Gift
must be made on or before

suits have occurred because of the

the

the end of

Payment
Tax

of death.

expensive

and

is added from

annum

to those decedents who
domicilied. in .the; State of

New

1,354,500

the fifteen month period.

applies
.

have

t \

'»■

mental problems.

examiner's superiors must

receptive

$10,100,000 the rate is 20%.

/X/XThe; New York Estate Tax law
"

190,000

■' 2/

he

as

wofk and extract from his repofts
a correct picture of a
bank.-They

;v1

5,500
13,500
23,500
35,500

the last block is

10,100,000

The

$1,500
2,500

XX: 300,000
700,000

tnem.

sees

pur¬

preceeding block.

Rate

Amt.

of Block

$150,000 V

tax

For

must

i%X'/X/XKXX/
Net Estate

Estate."

the net estate is divided in

a

is

purposes

willing to "call his shots"

Fede^l "Adjust¬

blocks each block being taxed at
rate higher than that for the

statutes.

In New York State the Net Es-

"tate for

the

as

V

Chicago.

;

30^

THE^ COMMEHCIALr^ FINANCIAL/CHRONICLE

(926)

Waller

At

this

down

Whyte

have
for

writing stocks are
again and the period; I
been suggesting waiting
The

closer at hand.

seems

question is what to buy and at
Here are some

what prices;
answers.

beginning to edge to

*

buying levels. Early August
lows suggested waiting for.
.With

sje

*

the

By. WALTER WHYTE=

Stocks

(Continuedr from < page13) i>

.

Ht

Says—~
=

i;

phors?)

Markets

400,000

on

The stocks I favor are,

Alle¬

ghany
Ludlum;
American
Smelters;
Armco;
Babcock

talking,
sighing or muttering about
the weather
few people, in
the East anyway, have shown
any interest, in the stock mai>
ket or its gyrations^ or the

Wilcox; Colorado Fuel; Com¬
mercial Solvents; Continental
Oil; Electric Storage Battery;
Ex-Cell-O;
Glidden;
Para¬

—

mount ;

creased

trols

gross

despite

on

to

fourth

it

But the market

ing to speak of.
*

.

in lines of business

into trouble.

of

the,case,{broadly speaking;

thought that
returns to

period—

the picture

'

will be

the is-it7hot>

enough - for-you
conversations, is the Washings

ton • spy hunt and how will
Truman run:his campaign N[b

x

the. lime,

[ the operating profit margin which

On

Whether

tended.
mittee

tivities

the

ime

Com¬

Un-American

on

coincide

Chronicle.

Ac¬

those

with

They

are

of the
presented as

hose of the author only.}

whether

higher

up

or

sell

will

stocks

(Special

lower.

Tchirmer

Dewey's

or

with

concerned

less

to

The

Truman's political

fortunes than I

am

with the

kind of Congress we'll have
and the kind of new laws it'll

ha s

Geo.

fourth

associated

become

Street,

&

Co.,

East

18

members

of

the

Stock

Exchange. Mr.
Schirmer
was
formerly
with
Horan & Grischy, and in the past
vith Ballinger & Co.

What has all this to do Thomas Tuite
Now With
with the market?
Nothing,
Horan & Grischy Staff
really. I'm merely -passing it
(Special to The Financial Chronicle)
along as conversation pieces.
pass.

.

*

CINCINNATI,

*

*

OHIO.—Thomas

T.

Tuite has joined the staff of
&
Grischy, Union Trust
Building. Mr. Tuite was formerly

Now to

Horan

get down to talking
A couple
of weeks or so ago I wrote
here thai I thought prices
would go up but looked for
about the- market,

associated with Geo. Eustis & Co.

Prior thereto he was

with W. D. Gradison & Co.

up-down-up-down action be¬
fore any move; would develop.

1

t

'

"»

s.

p

4

' '

^

1

)f

^

Geo. A. McDowell Adds
(Special

Last week it looked like the

to

The

; PETRQIT,

advance

Financial

MICH.

Chronicle)
—

'

j*

/

-

Roy

E,

Spear has been added to the staff

George A. McDowell & Co.
Buhl Building, members of the
Detroit Stock Exchange.

Farrell Securities Co. is^engag-in the- investment business
from offices at 134 We§t 58th.

ing

Street# JSTey/- York City.j,

Pacific. ;Coa^t

Frank X Ruggero Opens

on

Frank 4- Ruggere is engaging in

Exchanges

six

first

cash.

bf

months

Larsen, President,

in his message of July 26, 1948, to
stockholders
said,
"Circulation

Sept. 10.

Roy E.

The

and

advertising volume of t^ie
company's publications have coijir
tinued at high levels during the
first half, and the outlook at mid¬

securities

a

at

120

business from

offices

Liberty Street, New York

City.

Dow-Jones

the

of

the 1938period * inclusive was 154 at
il.7 at the low,'. Dur¬
ing' thia samei period,i^ Time/
sold at ah" Avefage qf
fpL..
th e: Dr4
^|4hie 4iigh;
27
the low.
At approximately J18$J
t,

for.'the/E^d:^^ ahdiiS^Toic;^Lnc;;
the D-J

*

is

selling at

P-E of, 9.1

a

arid Time, Jnci, at„ 5.8, The eqrren,t percentage,Tof Time/ Inc./ to1
the D-J is

29.4%,

The; capitalization of Time,; jnc.
was
represented, as of Dee.-31,
1947, by approximately 981,594
shares of

stock of $1 par

common

value

outstanding, preceded only
by long-term notes payable to
banks maturing
31- 1949, to
1955

which

amounted

then

to

$13,900,000.

is

for

them

payable

$1.00

of

..'//■■'

In
of

vious

to

Tables,

Table 2 is

a
.

bfief chronological
s

of historical facts

concerning Time,

still

highlights

Time, Inc.'s income.

on

was

of Time. Inc. is

we

-

includes the

1

memorandum

stock

appended,

discussion.

Table

stockholders

to

the

giving in tabular form, soma
the pertinent facts of the pre¬

are

Inc. from

1930

closely held.
It is a true
"ownership - management
com¬
pany."
It is thought that about

to the end of the first six months

40%

ings

very

continue
strorg.
Second half operations
will fully reflect increased news¬
stand, subscription and advertis¬

year

dividend

A

declared

of

its

outstanding

owned by investors and
ance
by
ployees.

It

management

would

that

,

Table

is

stock

the.
and

of 1948.

shows

3

ratio

of

the price earn¬
Time, Inc. as re¬
price earnings ratio

bal¬

lated

em¬

Of the

Dow-Jones

erages

and

to

the

Industrial Av¬

statistics

on

yields.

Table
4
logical
shows the operating
ing prices for certain of our pub¬
step would be the listing of the profit ratio;:
lications which went into effect
common shares on the New York
Table 5 shows Dow-Jones In¬
during the second quarter, but Stock
Exchange.
At the present dustrial and Time; Inc. earnings
costs and expenses will be up in
time, however, nothing of this and Time, Inc. per cent of Dowthe second half, and can. only be
sort
is known to be
contem* Jones
Industrial: earnings "per
partially offset by improvements
plated.
A- split-up irf the/shares share.
in machine efficiencies and tech/
nology."
TABLE 1
seem

a

•

In the

writer's opinion, the net
be a higher net per
share after taxes in the last half
of the year, than in the first half

Time, Inc.
———(In millions of dollars)i.
,

■

'

•

'

.

■

.

-

.

the future

1947/—
1945

advertising rates for: the
whole magazine industry and for
Time, Inc. are still extremely, low.
The milline rate of the industry, is

1944

fact that

not

up

over

15 % ->to" .20%.

pared with ten years ago.

logical opportunity here to
increase revenue by bringing ad¬
is

a

vertising rates

up

aVerage

1942

of

almost

"

|—

J

—

'

6.24

74.16

10.15
13.87

^

60.72

Years of high taxes-!

:-.-51.45,-:

N»t'

BWfit

$5.17

-

3.04

10.07

380

Xgcoji^epsion

3.69

5,26

<

■:'/

v
;.
;:
2nd; Growtft

4.01

7.11
11.26

8.26'

•

•

( Phas« Begins
i

2.3S

14.95
.

,

and Tax

Conting.

$12.60//
$12.60

95.96

68.77

|___

Prov. for

In«. Taxes

on

Income

$120.40,

194 3r

3.00

45.05

8.19

4.44:

37.8Q
29.3A

5-C5

2.36

World War II

3.75

.

'

1940

„

I

.

193S

.

—

.(_!

-

-

1936

21.0Q
("Life"

launched)

'

11.80

____

1.33

-0.07

3.24

'-

.1933—
1932

("Architectural Forum"

purch.)

6.70''

•

0.30

2.06,

$.65.

l.is

4.11

0.78

'

0.29

;

047

'
.

0.13

everything else.
As a matter of lgSf pMayclv ot Tim,©" oniradio)^_
4.56 :
- 0.96
' r 0.1A
fact/ the advertising budgets of .1930, ("Porttmef- launched >*
' i.Ob
'
0.93
oJll
most corporations are' today -a ;i929jv^2.rr_y.«,-^Ur.7/;:.
< 2,33.
"
0.35
(i.031;'.3VT
0.140.02
lower and below average per¬ 1928;
19270.89 0,004.
.0004
centage of total budgets as com* 1926 ("'Time'-'' started >19220.68
0.01
0Q1.
pared ! to what we used. to call
' L,
(No
availahlo py^or,to; 1926)-• »
normal.^' Not only is this partly
—

,

;

mm

VI?
047

-

0.49

2.55 *

-1934'

3,20

0.20-.

0.24

,

3.49

0.69'

-

1938:C3.59

"1937

in line with in^
cost

_____

_______

1943

com-'

There

______

1946

Profit

Befoye
Taxes

IrtcomO

1

is concerned/is the

as

.

Gross

A very important factor in the
Time, Inc; earnings picture as far

creased

'

Orders Extcutcd

the

in

1947.

last year.

Farrell Securities Co. Opens

Securities

ratio

the.high and

of net

of this year or the second half bf

of

way.

Pacific Coast

(P-E)
1948.

lb 'aiiO

X lll£>

an era

about 'six

of

with an avefage
high prices foi* the y^ars

compares

Industrial Average for

paid each year, except in ,1942
when $2.25 was declared.
Over
a period of time, something like

high average

new

.

result should
-

was getting: underv
But the fog of lassitude
which lifted slightly came
down again and the enthusi-

Cashier.

as^

a

^

.,

ratio

current

at, the:

....

2.75

,/

1

2.25

'1.7,7,

f

UQipsdjdaa

m\
0-65

•

0.85J
0.82]

"

0:32'|" tnHiwf) I >i
0,12[ Growth) •
.0041

Phase

.0.09J

•

•

'

,

Schwabacher & Co.
/..--.'■V////

Members • *4:'*
/;■•//;'
Stock Exchange
New York Curb Exchange (Associate)
San Francisco Stock Exchange
;//
Chicago Board, of Trade_ ■/'///
New

14

Wall

::

•

York

Street

COrtlandt 7-4150

t v.

New York 5, N. Y.

Teletype NY 1-928

Private Wires to Principal Offices

•».

//

San Franciwro-—Santa Barbara
Monterey—-Oakland—Sacramento

'y-j'.V-A;-

Fresno




:-;\r"

-

.

the result of low

1/A. McDowell
& Co. Formed
(Special
.

to

The

but ft; is

&

Co.

has

been

Chronicle)

formed

with

pffices at 723 Ferry Street to en¬
gage
in the securities: business.
Principals .are I. A. McDowell,
.

Katherine

R. Catt.

M.

Buike

jiartly^^/due^^o-^'thef

economic

/

Financial

ALBANY, ORE.—I. A. McDow¬

ell

also:

and

Donald

,

TABLE 2

advertising rates,-

0

pt u ft-e'i

1931—Magazine eireulatlont; fie•

estabUsh'ejd;

situation.i' Expected
to- contribute- to
Advertising b;u dg c t a were profits in (1931. ^ Income;,

boomed during the war by the ex¬
cess

profits tax

the
year

ended Jan. 3, 1931 $4,000,000, year

clined.

/'Time"

circulation

and

"Fortune";

March; of t
presented/on -the; radio. J
"Time" gained 17%. .in. advertis-'1
ing lineage jn 1930 while .the five
leading weeklies lost 9.6%< Com- s
pared;
ibist
.
Time"

grew. - /The

-:

ended; Jan. .<■ 4, «1930. $2,300,000.
sharply the real cost of advertis¬ Net profit before taxes $930,000
ing;
They: WQr3 /beptped^a^ahr
the a othei%
after the war by heavy consumer yrid $350,000.Tax ^ SI 13,00Q and
weeklies lost t
advertising in lines like cosmetics,, ^9:oion: • /Net' profit $818,000-and' 31.3%.: Income Jan. 2, 1932; $4.which are now in a recession, as $325,000;
500,000.
Net profit before taxes
'-;; z''; ' . ^
' :
which

cut down

4

price .earnings ratio basis;

a

times

lilt
UtgillllXldg 70% of net earnings have been
profit after taxes paid out in dividends and, of
on a new
high average leveL Ex-- course, this ratio is now/thrown
pressed
on
a
per
share basis, badly out of line by the new and
Some ad¬
Time, Inc. earned $7.73 durihg higher earnings level.
1947
compared
with
$4.11 per justment may well be made this
share in 1946 and compared with year and if economic conditions
average earnings, of $3.71 for the permit, a" further adjustment is
six years 1941 to 1946.
If earnings
In the possible next - year.
first six months of 1948, this new this year run $9 to $10 a share,
level of earnings was continued dividends may run $4.50 to $5: a
when net after tax equalled $4.37 share, with perhaps a portion of
a
share compared with $4.19 a this paid in
stock to conserve
It Vex.

of

share

Gf.

OHIO.—Carl

Eustis

Cincinnati

Chronicle)

Financial

CINCINNATI,
vith

I'm

.....

v

-

post-war work arid the beginning
of an era^ of pre-tax profit at what
be

inclusive have

,

with any¬
thing besides headlines, and
Carl G. Schirmer Joins
incidentally a couple of votes,
is, of
less
interest
than Geo. Eustic Co. Staff
comes

the

.

..

to

1938-1948

at the high prices from
% to 7.8% and at the low prices

p o f

-

seems

v

from A.i% to 13.4%. "The average
at the '• high prices for the period
t a n t factor j in was 4:7 % and the average^at ithe
inc.; earnings picture jV; low prices-was 7.5%,.

Another i-ni

^^P^ Phihable^^
equally important. I suggest Inc., which werpv only : abPut' ^^
The recent increase in the price
$700,000 in the banner year of
prices about one point above 1939, jumped to. $11,300,000 in t of vLife' magazine has been very
their lows of early August, 1943. Next, came the fifth period, well received, 'and probably "could
pa&ed orr today's market these or period of reconversion,1945 hav^ been'-done .some time ago J,
and 1946, which were years of ex- 4/ Thd butldok for. Time. - InC,;t for
are still some points away. It
J948
4^^ ll'ei^In^avbt^^
is likely, however, that
S"
miidpbut
;hot ■severd^ecbssioh^ ih
rftay be seen nv the compsirS-, ing experimental plants and rjB7;
As,'to dividends,, last yeaf $3.i25
tively near future. In any/ search laboratories. //
j
eaRP
waitifioc
rat her
than I
Finally, dhe Current
period, a share was paid. In the period
cffe> . waiting ratnef than marked by %e completion; of this 1941; to 1946,- $2.50/3. share w:as
:

■;/

Time, Inc., stock

ranged
2.1

with

apparently expects, Tru¬
man to win;
The only argu¬
ment is how big will Dewey's
charging in IS the plan SUgplurality be. I don't know if gested.
any of the foregoing is inter¬
More next Thursday.
esting to you, I merely men¬
—Walter Whyte
tion it so you can be up on the
latest board room gossip. Me,
[The views expressed in this
I'm bored with it. No pun in¬ xrticle do not necessarily at any
one

on

.

corporation's- low'J average
earnings base for51 figuring excess
profit taxes (a situation resulting
from management's imagination,
c'ourage
and
productiveness .in

-■

yield

between

when
competition
the, old established ad-

be forthcoming.

may

The

.

yertisers such as, for example, the
automobile industry.
r

high taxation. DUe
taxation generally, and

—

additional investment hanking

firms

different

far

the

-—

*

*

The big talk today, besides

•

Petroleum,

Phillips

and D. S, Steel.

recent

of

net

average

is
still; below • ave.ragerll percent¬
ages.' It may:be that; in common
practically; all;corporations,:
has managed to keep its head
starting^Life") net earnings af tjerv
taxes from 1939 to 1945 were held modern cohditiphs wHl: prevent} $t
above water even if" it has
The answer to the question roughly.. between $3,000,000
returhi-Ao
the old basis-;hut ^n:
aiicjb
done $o with no drum thump¬
of where to buy them is $3,800,000; Taxes paid by Time improvement over • the; * current

lack of them.

doubling

tne

were

earning 'power.
Banking sponsorship on Time,
Inc., has been more or less cen¬
tralized and there are indications;
that a wider interest bn. the part

period of
high

expected
resistance1 to

beeh

consumer

now running
However, these lines
running into trouble in a way can¬
not be considered typical.
It is

government con¬
Then Time,

its

had

It

as

been;

'etc.

paper,

Inc.-entered
the

"Life."

in¬

steadily

a
split-up could ;be justified on
corporate grounds, fo/capitaUze as

that

the period of the
was

and, if anything, helps leaders like

sales developed, advertising budg¬
ets would increase.
This has not

Gross tnat year was $29,this

war

on an approximately two for one
basis would also be helpfuh
Such

the publishing business, itselfeffect on the latter/spi far
seems
to hurt the 'weak
sisters

within
a depression was under way.
The
year 1939 looked like the begin¬
ning of a period of normally.
"Life" was a success and net profit
for the year was $3,200,000, the
largest in the history of the com¬
over

The

is

H

;

experiment lost $3,its own.
On top of

that by 1938 the depression

pany.

*

*

"Life"

000,000 and

everybody

2, 1948

^

quenched, (How: <Jo
those mixed? meta¬

asm wa^

you /like

Tomorrow's;

^ ^

-^

\

Volume

COMMERCIAL

THE

Number 4730

168

CHRONICLE

FINANCIAL

&

period 1936-1939.
Invested operation. Greater improvement
$2,300,000 in the Bryant /Paper in lower costs./ Management is
Co. of Kalamazoo, Mich.
increasing costs
Bought cognizant that
of *Time" from 1923 to date. First the Michigan Square- Building in have been offset by increased in¬
come
and
that
in
times of de¬
mention of "Architectural Forum." Chicago/i Made investment
in
depending
upon
the
Profit was satisfactory in the de¬ Adcraft in Los Angeles. ;.• /•;;/ 7/ pression,
1945
First
discussion
about nature of it, income may be ex¬
pression and -"Time's" declines
pected
to
fall
off.
Paper
proper¬
against the dark pattern of eco¬ raising the price of "Life"; which,
ties sold to St. Regis Paper.: Con¬
nomic woe were held to ? a mirii- has been 10c and "Time" which
has been 15e. During the war, the struction of a new coating mill.
mun\. if Income
year ended' Dec.
Post" ; and Sale of stock to officers and
31, 1932 $4,100,000. Jan. 2, 1932 "Saturday:. /Evening
$4,500,000.
Net
profit
$775,000 jollier's" doubled. their - prices.. employees at $65 per share. Com¬
of
$1,600,000
research
versus
$962,000.
Taxes $125,000 Paper costs going up due to elim¬ pletion
Investments laboratories.
against $115,000. Net profit $649,- ination ; of controls.
$962,000. v Taxes
$1X5,000." Net
profit $847,000.
1932—A history in this report

base

—

000 versus

$847,000.

1933—Net
time

exceeded

tune"

broke

''

'

>

income

the

for

"For¬

million.

$1

'

first

"Architectural

even.

Forum" lost money. .■"Time" made
all the profits,' Excess funds of
the

company
were invested 1/3
.cash, 1/3 in government bonds
and
1/3
in
equities. 4 Dec.
30,
1933
incomer $4,550,000. / Profit
$1,229,000.
Tax
$165,,000/ ' Net'
profit $1,063,000."'
"
"V?/
1934—First
year " that
"Fortune" contributed a big share tb
.

in

,

earnings.' "Architectural

Forum"

still loses money. Beginning of the
motion picture "March of Time."

Dec.

29,

1934

income

$6,700,000.

N4. $2,061,000. - Taxes $288,000.
Finai net $1,773,000.
1935
$900,000 put into
the
movie; "March of Time."
Initial
losses
from
this
policy.
Took
some
profits in common stocks.
Experimental publication of let¬
ters began.
Fiscal year fended
~

Jan.

4,

1936 —income

Purchase Z of

discussed.
Seabord

of a development .and
additional printing capacity. $15
million bankroll; to begin this
.

is

J^nen, III for'/Time!*

A;

James

losing

great

a

deal of;

in-1936 and the loss in

mated

at

ended

193T esti¬

- million..
Y ear
2, 1937 income $11,^

$2 Vz

Jan.

profit / $3,238,000.
Consolidated net

Net
800,000.
$491,000.

Tax

1937

is

1946—Income

lost

$3,400,000.

"Life"

plant being built by
Chicago completed
the Pacific press plant on the

the

of

in

Purchase

memoirs.

Churchill

The

:

first

profit.

Dec. 31,
Jan.
2,
1937
$11,803,000.
Profit before taxes
$230,000, versus'$3,238,000. Taxes
$67,000
versus
$491,000.
Net
profit $168,000 versus $2,747,000.
1938
The
depression
within
the depression which began late

margin

profit
months

in

the

first /six

considerably

was

n

Prices

better.

operating

that margin in second

so

months,

six

1%

"Life"

of

—

Six

magazine with
in the

ended July

months

mission to assist

a

successful development of

-and
and

American enterprise at home and
increased in June
abroad through its leadership in
New subscription' system,
completed and is in successful the field of communication.
"Time"'

July.

TABLE 3
;

..."

:

Dow- Jones

.<

,

.

i

Industrial Avg.
J

-

,

a-.

*

_

^

Price-Earnings

Price-Earnings

'.

4

Percentage Ratio

Tlme} Inc.

"

,

;*;■

——Ratio

-

»;il938
Z1939

_

•'—-

1940

..

.

1941
•1942

—-—

1943

1944

*1948

22.2%

4.5

2.9

22.7

6.4

4.2

26.0

7.0

4.4

17.8

13.2

7.6

'24.0

18.0

13.4

7.8

30.9

21.3

9.9

5.6

Low

16.6

29.2

i

18.5

21.9%

13.2

12.2

8.1

26.6

10.1

12.2

7.8 v

29.6

,8.4

4.8-

24.7

.9.1

5.3

11.6

6.6

14.0
11.5

9.2

13.3

10.3

14.7

,12.0

;

3.6

11.2

45.2

33.1

5.6

19.3

61.8

40.4

4.1

13.8

56.5

35.6

4.4

>9.4

7.1

38.7

33.7

5.9

8.3

6»7

5.5

31.1

30.0

8.0

6.6

123.4

183.4

108.0

82.5

51.4

16.7

13.4

17.3

14.5

38.1

15.6

12.0

29.2

10.0

8.8

9.6

166.1

-

....

Low

High

17.0

"

High

Dw.

26.5

Yields <k

to Dow- Jcnes'■•

»

-

15.2

.

.

High

Low;

18.7

-l

1945
~

—Ratio

High

5'

2.1
4.

2.1
4.5

-

Total

•

—

_

11.7

13.4

13.2

8-4-48-

9.1

5.8

L'

Average

of

Current

Ratios

_

is based

*1948

9.8

15.1

High-Low—

Average

on

annual

rate

first

of

300.8%

391.0%
,

35.5

4.7,

7.5 v.-.

,27.'3

n

$

■

6.1

31.4%

7.7

29.4

months earnings

six

•

using $20

per

share

earnings on Dow-Jones, estimated $9 per share earnings and $4 dividend on Time,
Price

ranges

used

were

Inc.

the high and low for the first six months.

TABLE

TABLE

4

.

;

(6 months)

9.9%

1947

9.8

1946

5.3

1945_

12.3

1944

19.2

/■ 1943—

—7

1942

24.0

12.7

Bank

1938

5.0

Central

Co.

Trust

&

"them.

Net

Hanover

and

returned

profit

Champion Paper.
1940
First important increase
—

fexe£/"/Time": being hurt.:
its invested capital base is
the average earnings

low.

Also

base

is

bad

because

17.6

1941

14.7

—

to

for the year
1939 was $3,207,000, the largest in
the history of the company. This
is the first year that the "Life"
situation really gpt - under con¬
trol.
Investments were made in

cause,

-

15.7

—

1939

~

"

of the im-

1938—

*$5.97

1939—

9.20

1940-

10.94

1941

11.60

Time, Inc.
Earns.
Per Share

Per Share

1948

PZ: 1940

the

Indus. Earns.

Ratio

Year--

Net $1,129,000.
19391—The 1939 report is out of
print and a copy was borrowed

from

Dow-Jones

Oper. Profit

so,

5
Time, Inc.

Time,Inc.

$1.19 /;
3.41
■

% Dow-J.

Earnings
Peu Share

1942__

8.98

3.1-3

35.2

1943-

9.94

3.87

38.9

1944—

10.03

3.98

39.8

1945—

10.47

3.18

30.4

1946—

13.60

4.11

30.2

1947c.

18.64

7.73

41.4

1948—

*20.00

*9.00

*45.0

courage

and

the

cost

the

is

and

I

of

essense

the second line of

are

an

reasoning which
the payroll taxes

that

ultimate burden

on

wages.

This view stems essentially from

transfer

taxes

power
ers
to

from the taxpaying work¬
the
government/ in the

says

amount

of

deflationary
the

There

the taxes.

effect,
of

excess

is

a

however,

if

collected

is

taxes

used to reduce bank-held

is

currently

the

case.

debt, as
However,

with

other

costs

The premise is, of
course, that tax is a cost. Meriam
the payroll tax "becomes an
inescapable part of labor costs,
and thus ?;. it has the same effect
as

increase in

an

other

writer

,.

.

wages."5 An¬

them outright
"operating-cost taxes."6 As a cost
then, the tax must be reflected in
price,; and recovered, otherwise
calls

business failures and the impair¬
ment of

supply the deficit, there
will be again only a transfer or
purchasing power,
through the
hands qf government from the
taxpayers in general to the bene¬

capital result. "
example of this thesis is
life-insurance, where there are
strict legal requirements that pre¬
miums
be
actuarially
equated
against all costs.
Obviously the

ficiaries.

But, if the deficit is
government bororwing from the banks, there is cor¬
responding expansion of credit

consumer

made up by

this

and

ther illustrations.

To the extent that gen¬

hence,. inflationary / results.
redeemed

iAn

bears the tax burden in

Regulated
industries,
prices are fixed to give a
certain profit above cost are fur¬
case.

where

As

-

one

writer

said in regard to the railroad un¬

tax,
"This
money
by general taxes or, because of an employment
excess
of payroll taxes,1 trans¬ comes from only one substantial
ferred info special non-market¬ course, the rates and fares paid
the

able issues held in the trust funds,

by

then

ample

again there will be

a

defla¬

the

tionary tendency.

public."7 f. A further ex¬
provided in a study of

is

relative

over-all

tax

costs

of

certain

manufacturing industry in
Who Bears the Burden?
New York City as compared to
With fhese aspects of cost re¬ similar types of business in com¬
viewed, who then pays for social parable cities.
This study was
security?
Where does the initial made before New York state had
an
burden of the taxes, as such, fall;
experience-rating provision in
and where is the ultimate bur¬ its
unemployment: compensation
den?
system, and one of its major findipgs
was;8
There are various opinions as to
differences among the states
the incidence of the payroll taxes,
.

.

.

analysis or em¬ in payroll taxes to finance un¬
pirical evidence on any particular employment compensation, in ef¬
point. Some economists have evi¬ fect, control the comparative tax
dently even considered the en¬ standing of each city, as a place
forced'
levy
a
"contribution," in which to do business.
it is apparent that the com¬
rather
than
a
tax.
The whole
question seems somewhat of a petitive position of manufacturers
but little scientific

...

may be handi¬
However, in New York /
point of agreement is that the capped as against employers in
tax on employees is not shifted. the six other eities under study,
And, by a process of elimination, where experience rating is; in ef¬
fect. "v
a certain concensus develops that
Thus,
as
indicated,
circum¬
payroll taxes on employers, too,
stances permit three possibilities:;
are in the long run borne by the
(1) The employer absorbs the
wage earners.
•>
,>

This conclusion is arrived at by
two

different

somewhat

.

.

lines

of

reasoning.
The first, represented
by economists writing on social

tax; the burden is on profits.
(2) The tax is shifted to the em¬
ployee in decreased employment

and wages; the burden is on labor.
(3) The tax is transferred to
security in the late twenties and
and recovered in the price; the
thirties, posits that the burden is
burden is on consumer spending.
essentially
on
wage- earners
The most.: strongly held views
through the indirect effects of les¬
are
the last two.
And they are
sening
employment a^
rates.*
(Continued from page 11)
Elasticity of demand tor the same in effect: for in the over¬
all sense, the wage-earner is the
is a psychological value to a tax do it, jit is an argument in favor the product, flexibility of produc¬
tion and marketing factors, de¬ consumer, or provides for the con¬
of the effort,
as a reminder of the existence and
mand
and
Therefore, regardless of
supply of labor in sumer.
cost of government.
Also, it is
Question of Purchasing Power
various occupations, will all affect theoretical approach, the
major
worthwhile to have the benefi¬

13.3%

11-Year Annual Avg.

*

Estimated.

Costs in Social Insurance

A second

of public concern
misunderstanding in
tiveness in starting "Life."
In¬ receive far more than he has; "ac- regard to social security costs is
come 1940, $37,700,000.
Profit be¬ tuarially" paid for. Furthermore, the question of purchasing power.
fore taxes $5,850,000.
Taxes $2,- although there is little likelihood This is not at heart a problem of
350,000 against/ $686,000. /Net that any Congress would yoid the social insurance, but one of public
profit $3,494,000. v;
system, the participation of em¬ finance and general economics. It
1941—Another big increase in ployer and employee does create is true, however, that the purchas¬
taxes to $4,400,000. An increase of certain
political protection for ing power of. a given individual
over $2 million oyer the previous
luture commitments.
Another who has a predetermined and
.year. Inauguration of-the "Time" value is the possibility that the fixed income, is reduced under in¬
Air Express edition to Latin and mounting costs of
the program flationary circumstances. That is
South America, v
r
will call attention to government one of the causes of current pres ¬

aigihation*

recently*

into the price.

one

33.8

reported

absorbed,rv v , \ r ,
.
v/
The concept of shifting the tax v
to the consumer by way of
price
has been given much atttention

in the benefits paid.- It is
a transfer of the buying

theoretical free-for-all.

34.1

84%

was

merely

power

19.9%

3.70

whereas

counting; for, price fixing on the
basis of cost tends to classify, at¬
tempt recovery of, and thereby

37.1

3.95

re+

ing said they added the tax cost
to
the
price
of
merchandisers

light.

Whenever this debt is

Time, Inc.

Time, Inc.

membership

recognized in its

true

eral taxes

Only

1948

the

When social security
taxes exceed benefits, there is no
stimulus
to : overall
purchasing

is least apt to be

volume in 24 years. . "Fortune" to
be redone and conceived os a

vious years.

25th anniversary of the

of

the modern system of busihess ac¬

financed.

until late 1938 affected "Life" but

$205,000.

purchasing power which

payroll taxes collected, the effect
will depend on how the deficit is

in 1937 and steadily became worse

Taxes

tion of

fraction

31

plied, only 14% of those respond¬

concludes
ques¬

30, 1948, reflects the largest sales

other

Income

while advertising appro¬
priations' were/e very whera; being
curtailed;"Life" attracted adVer~
tising
revenue;4
"Time"
made
plenty of money.
Year ended
Dec. 31, 1938 income $23,594,000.
Profit
before
taxes
$1,334,000.

Implementation..

is, however, the overall

compared to 12% in 1945 and
higher percentages in pre¬

as

oper¬

—

even

It

when benefits in total exceed the

% $20,998,000.

1937

to, its

first pub¬

but

up

The "Architectural Forum" made
its

ironic

an

lication of "Time," March 3, 1923.

•

1947

"Life"

—

ratio com¬

higher quality in 1948.

is

full

ating profit only 5V2 % of income

1946

$2,747,000.

for "Life."

Heiskell

Andrew

and

$8,621,000.

$900,00p went into "Life"

and

This

costs

of

workings of a system
originally intended to cut into, if
not render insignificant, the out^
right relief burden. And it brings
up an issue, too lengthy for dis¬
cussion here, concerning the basic
nature of social security and the
manner
consequently best suited

Promises im¬
program/ New and younger pub¬ poast completed.
lishers for : "Time"; and ;"Life.'! proved production, lower costs,

.

"Life"

New

Donnelly

mounting

conditions

factor in the

,

program

steadily
current

employment.

pared with 18% in 1941, Begin¬
$2,500,000 in advances. Discussion ning of the end of postwar recon¬
of a new building in New York. version and. start of getting the
Sold ,its 10% interest in the ABC, benefits therefrom.
Coating mill
the
Blue
Network. ;. Substantial in Kalamazoo sold to St. Regis.

$2,547.00C>.:'
Tax •' $298,000;
Final net $2,249,000."
"

money.

_</1947 —10% ' profit

under

Paper for $4,200,000 plus

Net

•//|93(LLThe .launching,'of "jLife."

Maine

-

its

for

(927)

ciary feel he

prpduc- his benefits,

has

even

contributed to
though he may

and

area

some

"

the

degree and immediateness of
shifting. To the extent that this

effect is

delayed or prevented, ab¬
sorption by tne employer will oc¬
cur

and

some-

burden

will fall

conclusion is that the wage-earn¬

security taxes.
.

on

;;

.

)yX

.

The

on

^

'

'•

.

-

.

"

Ultimate Burden

.Now where - does the ultimate

profits and ownership.
This burden

bears the burden of the social

er

r

profits: is held

burden lie?

It is obvious, of .course, that
by economists to be of minor im^
portance, and its degree, small, taxes come out of current income
or product. The immediate impact
although it is more readily ac¬
ceded in regard to marginal and of the personal income tax testi¬
However, despite
submarginal concerns. However, fies fp that
the business accounting outlook is
4 See Lewis Meriam, Relief and Social
1942—Government controls on
spending tendencies in general. sure that /increased benefits be likely to differ from th*1 w"*"
Security.
The
Brookings
Institution,
paper. Foreign editions of "Time'' Since the government cannot hold paid nolo.
A certain increase of view, and employers themselves 1946. Chapter XXVIII; and, Harley L.
extended.
•
cash in the trust funds, these tax benefits later will automatically are prone to feel they are should* Lutz, Public Finance, Appleton Century
4th Ed., 1947, Chapter XVIII.
1943—Investment in the Amer¬ collections must be used for gen¬ accrue because of inflated wages
ering most of the tax buraeii. ims
5 Op. cit., p. 692.
:
ican
Broadcasting System.
Ah eral purposes or debt retirement, now.
However,. the
immediate was indicated, for example, by a
6 A.
G. Hart, Money, Debt and Eco¬
increased investment in General
nomic
Activity, Prentice-Hall Inc., 1948,
and an enormously large so-called and practical answer, to a decrease questionnaire study made in 1939
p.
241.
Precision Equipment Corp.
Cir¬
7 Julius H. Parmelee, "The Tax Rate
reserve
would be more apt to of individual purchasing power by the New York Credit Men's
culation again held in check by
Association.3
Although
only
a
in
Railroad
Unemployment Insurance,"
because
of
fixed social insurance
American
Economic Security,
Chamber
paper shortage.
Department set tempt the spending, rather than
.

.

.

up
.

to consider postwar planning.

1944

excess

Company still hurt-by
profits tax and is asking

—

'/for relief under Section 722
cause

was

be¬

in

1936

during




Any

easy- come,

of benefits, is the same as the' answer
check .to any individual case of need due

proclivities

retrenching

Congress.;

brake

easy

-

go

to

tendencies

to deficient income.

Here is

one

be constructiyp, and jf si- of the reasons not only for the exthe muiation of actuarial balance will | istence of public assistance, but

thet publication-of"Life"

begun

the

| would

2 Carl Shoup, Committee on Social Se¬
curity
of the Social Science Reserach
Council, The Prospects for a Study of
the Economic Effects of Payroll Taxes,
1941.',-See Section VI,■ "Review of Work
Already Done.
3 Ibid. Responses to questionnaires are
reproduced in Appendix E.
'
*
.

.

Commerce

of

of

the United States,

May

p. 3Q.
Harley L. Lutz, Report on RelatiV
Tax Costs Within Seven Selected■ Cities

1948,

„

,

.

8

for

Three

Groups

of Manufacturing In¬

dustries, September 1944, pp. 4,. 75.

(Continued

on page

32)

ft "t
..

32

CHRONICLE

FINANCIAL

&

THE; COMMERCIAL

(928)

to

difficulty of recognition and mis¬
taken

assumptions as to the "fu¬
ture" aspect of cost, the ultimate
*>r final payment for social secur¬
ity also j comes out. .of,:- current
product. ' ■vXi/ ■f!''/a/h//-/!'!•'//ah/h
Benefits, like taxes, are current
obligations, whether it be 1948 or
1998.
No taxes paid -in 1948 are
going to provide benefits in 1998.
When payroll taxes exceed benefit
payments

only

the

which

part

requirements of cur¬
actually be pay¬

the

meets

rent benefits will

be

and

security.

The rest

for other

purposes,

social

for

ing
Vvdll

used

to

pledge

a

repay, *

fundamental, it would in¬

one

and take out of current

product—

regardless of whether special pay¬
taxes suffice or there is a

roll

government
contribution
from
general funds. y Of course there
will be an imbalance of burden
between classes of taxpayers. For

example, if benefits are limited to
section of the people, the po¬
tential beneficiaries gain some¬

m

the

at

what

expense

of the tax-

would tend to equal¬
ize* burdens and advantages, but
sal coverage

would, not effect any

solved

the

there

more

is

dis¬

to

*

tribute.

.

The "New England

curity:^

Letter" ties

''-0&

What is lost sight of is that our

productive

energies

the
workers.

upon

of

This is

clearly understood in
a primitive society where a family
either, provides for its own wants
.

.

.

starves. But in

or

modern and

our

complex exchange economy, there
is so much confusion, as to the
source of income and wealth that

large proportion of the people

a

the

under

are

that

illusion

by

push-button technique the
can provide
.
and
guarantee security without indi¬
viduals earning their passage.
some

Government

>

.

will

burden

always
the

be

certain
for

a

workers

upon

9 Henry
Hazlitt, Economics
Lesson, Harper & Bros., 1946,
10 First

31,

,

there has always been and

But

there

basic read¬

justment of burden.
By and large, the mass of work4BC5 must meet the cost from cur¬
rent product.
Neither an excess
of
bookkeeping IOU's, nor the
taxing power of the nation can
provide more food, shelter and
clothing for the beneficiaries of
any generation than the workers
of that generation produce and
^ace willing to share. It is only the
fiiogs and corn, houses and cloth
produced at any given time, which
can provide either our own or our
grandchildren's security.
In the
■©conomic sense only current prodfor anything.
storing up of acorns.

There is

But costnpayments for

social se¬

sict pays
no

comprise only one of the
current demands on product. And
the amount which can be given
curity

it

to

ADver

naturally subject to
priorities and limita¬

is

various

£he

determine

that

tions

distrib¬

all

utive shares within the .total. How

large the share can be is the only

"budgetary" problem in re¬

real

gard to social security.
This

is

potential

being influ¬

by more and more factors,
first place there is a gen¬
eral trend toward greater public
enced

V,';

lu the

responsibility for individual and
family security. Also the increas¬
ing commitments and revenue re¬

quirements of generally, expand¬

ing, government eat into the prod¬
uct of the private section of the
eeonomy.
A second area of influ¬
ence
is the changing pattern of

^population growth: the increasing
mumber of the aged, and the de¬

of the prime-pro(20 to 44) to the

creasing ratio

*j&mer age groups

mon-producer
age
groups.
Not
•«m!y Is there an increasing pro¬
portion of dependents in our own

population; there are greatly en¬
segments of world popu¬

larged
lation

which

^sufficiently

not

are

producing

themselves

for

and

look to the United States for vari¬

forms

ous

Abactors

are

of

all

assistance. These
drain upon the

a

mational product.
forces

at work

There are also

which reduce the

aggregate as well as the relative
amount of product.

For example,
"make-work" projects do
contribute the product
{equivalent of their cost. The con¬
public

National

1948,

One

in

.

Stripping Down to
*

/

Fundamental

One./'/'
;

;

:

If the entire question of social

isqefyrfty

were to,

\

a demand upon
As such the bur¬
the
producers at

constitutes

tions,

MM

common

why peace is central in
of the Progressive
This is
why the
good
of the South, who want

striking increase in Southregistration this year shows
that the people of the South are

prosperity, homes, hospitals, and
schools, who want strong and in¬

democratic way—to the goals we

«

That is

the

den

Party.
people

falls

on

large, and is determined not only
by the extent of total output at

given time, but by, the ability
and willingness of those who do
produce to share with those who

any

do

not. /

"

/

.

i

.

.

•

is

not

through

halls.

all

there

If

things,

is

The

erh

on

the way

—

on

the "American

all share.

•/ .-V

legislative

the
one

Hi'EWorld

to

answer

probably

it is

program

Sees U. S.

The road to real social security

r

work.

And that is surely the way to se¬

(Continued from page 15)

curity.
As Professor Groves has
effectively
and
axiomatically

is subject to veto by any member
holding more than 10% of the vot¬
tralia.
ing rights — which at present
"In these days of much patern¬
The scope for influencing the means by the United States and
alism^and 'statism; wnen - a. toil
the United Kingdom. If the neces- /
stomach for all, however attained, output of gold through subsidiza¬
tion of this character is, however, sary majority could be mustered* i
is so frequently exalted as the end
and if the United States and the
very
limited.
Apart from the
product of reform, it is well to
United Kingdom were willing, the
of
the
International
recall that it is better to help an vigilance
currency price of gold could be
individual help himself than only Monetary Fund, the mere fact that
written up—or down—throughout
direct or indirect subsidization of
to help an individual."
the 46-nation membership of the t

directly

this

Taxation,

M, Groves, Trouble Spots in
Princton
University
Press,

1948, p. 31.

"

by fiscal

concessions,

kind

has

an

immediate

im¬

pact on the budgets of the coun¬
tries concerned and that the bene¬

>

:

or

have also been considered in Aus¬

stated it:11

li Harold

May

:

,

the gold mining industry
openly; revealed as coming
from the pockets of other tax¬

fits

to

Fund.

Such

fect the

a move

would not af¬

prevailing; exchange rates

since all countries would
of

value

the

terms of

Is

their

change
currencies i»

.

gold by the same ratio/

there

any

reasonable pros¬

strict limit to what
such means. If pect of such initiative* being tak¬
en by the Fund?
The key to this *
gold production is to be appre¬
stimulated
by* conscious question must be sought in the at-;.
ciably
titude of the United States, whose
Governmental action it must be
voice is inevitably dominant ira
through monetary and not fiscal
(Continued from page 9)
the councils of the two Bretton#
Such monetary policy can
and power trusts.
These vested successfully began its march to policy.
Woods institutions, and who has
take one form only, an increase
interests
bitterly oppose any power.
It thwarted Roosevelt's
power of veto on this particular
in the monetary price for gold.
sound Southern development pro¬ attempts to
extend further na¬
issue.
The attitude of the United
This is no longer a matter in
tional cooperation to the South.
gram.
States is likely to be powerfully
which the principal nations of the
It stopped a higher minimum
influenced by two considerations^
They profit from low wages,
world are free to do as they like.
low farm income, unbalanced in¬ wage.
The first is the fact that the
It stopped increased social
With the one exception of Soviet
United States is not the most im¬
dustry and agriculture, extortion¬ security and education, health and
Russia,
they
are
members
of
the
ate charges for power and trans¬ housing.
portant gold producer, and there¬
It substituted planning
International Monetary Fund.
As
fore has no particular vested in- I
portation.
They and their polit¬ for private profit in place of plan¬
such, what they may do in chang¬ terest to serve in
ical henchmen have slowed south¬
raising the dol¬
ning for the people. W,
ing the currency price of gold in
erly progress ina the past,,/ They
JFhe second;
;
And when Roosevelt died, this their1 own countries i* strictly de¬ lar; price of
the
can be counted on to stop at noth¬
growing fearHm/ the Uiiitedt"'
bipartisan coalition moved com¬ fined and even more strictly lim¬
States
of
the
inflationary
implica¬
ing to halt your plan for the pletely into the seats of power.
ited.
As has already been men¬
tions of the gold inflow into thai:
future.
The limited bipartisan coalition is
tioned, they may not subsidize
country/ A world-wide devalua¬
We Progressives can be counted now a total coalition of the two
domestic gold production by pay¬
tion would have as its avowed ob¬
on to
do everything within our old parties—a coalition which has
ing a higher price for this gold
the
encouragement
of
democratic
framework
to
stop largely liquidated the New Deal than the parity indicated by the jective
world gold production designed!
their plans for the future.
program, Including those parts of official rate of exchange as noti¬
to cover part of the prospective?
We know that the people of the it of greatest importance to the fied and agreed with the Fund.
dollar deficit of countries outside
South will do their full part to South, such as the Farm Security They can merely inform the Fund
the United States.
It would, int
of changes amounting to not more
end this real outside interference program.
other words, be designed to swell
The bipartisan administration of than 10% of the initial par value
in their affairs.
the already enormous hoard of
It-cannot be ended by the; peo¬ today has turned the key posts in of their currencies and within this gold deposited at Fort Knox, Ken¬
limit the Fund's consent may not
ple of the South themselves.
It government over to the men of
tucky, and to add to the inflation—,
With cooperation of be withheld.
Beyond it, the Fund
must be ended by a new national Wall Street.
ary potential whose strength is;
will
concur
in any proposed
a bipartisan Congress, it increas¬
party in the North and South
causing serious concern to the au¬
change
of
parity
if
it
is
required
dedicated to uprooting the most ingly diverts huge Federal rev¬
thorities in the United States. Nor
to correct a member's "fundamen¬
enues to war preparations, instead
must it be forgotten that any in¬
powerful monopolies, which today
of spending for abundance.
The tal disequilibrium." . These provi¬ crease in the dollar price of gold
to control both old parties.
sions for changing the par value
men who would not vote 100 mil¬
would require the consent of the
We made a start at a national
lions for the security of Southern of individual currencies are clear¬
United States Congress and that
program for a square deal to the
farmers now vote billions for the ly not intended to meet the spe¬ this
assembly is likely to be pre¬
South under Franklin Roosevelt,
cial difficulties of gold producers
security of Greek kings and Chi¬
occupied by other problems for
whose second home was in the
Even
a country like South Africa,
nese despots.
The men who de¬
many
months to come.
Conse¬
South.
I know about this. When
fend the poll tax in the South where the gold industry ^repre¬
quently, it would be unreasonable
I was Secretary of Agriculture,
sents
an important element in the
demand "democratic" elections in
to expect from the Fund any ac¬
we lifted; Southern farm
income, the Balkans.
economy, might find it difficult to
tion that would involve an in¬
began to rebuild Southern soil,
convince the Fund that, merely
There is no hope of substantial
and
through Farm Security to
crease
in
the
American
dollar
because its gold industry was de¬
Federal actions to improve the
save the small farmer and tenant.
pressed, it was in such fundamen¬ price of gold.
But I would be the first to admit South or any other part of the
tal disequilibrium as to justify a
that we didn't go far enough.
I country as long as the bipartisans devaluation of its currency. /The
am
truly proud of what, we did spend for war and militarism. difficulties of that industry might
There is only the prospect of in¬
Thousands of North
accomplish.
quite conceivably exist, while the
Carolina farmers and workers are creasing hardship to labor and to
general price structure was in
still better off today because of independent enterprise, farm and
perfect equilibrium with that of
city.
that f New
Deal program which
other countries.'
ah/h
was so maligned by its enemies.
The meaning of the phrase guns
payers,
can

sets

a

be achieved by

-

instead of butter
r

Vested Interests Thwarted
-

We

failed

build
tion

a

/>;;/ -;r-.

Roosevelt

I' know-*; now/

why/ we

because

we

did

the

r

vested

"

interests

North and South.
coalition

of

me

of

tobacco

by

a

was

driven home

recent union survey

workers

workers

in

this

not

have lost in weekly food

since the end of OP A:

of

That bipartisan
Republicans and

'

t

state.

their families

and

op¬

the unholy, bipartisan coali¬
of

to

failed. These

political movement to

be strwppddpipn Souther^ Democrats ;tep




alize

his

.

build peace, we can re¬
the . better life, for all the

„

One Billion Yearly
Federal Money for South!

pose
.

fighting for peace.
we

,

current product.

70.

p.

Bank of Boston,

A1,.:

tinuance of excessive taxation has

negative effect on investment
and
production.
Certain labor
practices limit output.
;

budget

are

mot always

m

war

As

about

.

.

the

in

in

us

annual

'

Univer¬

bearing non-beneficiaries.

increases

proposes

industry and agricul¬
South—will join with

-

living standards depend

taxes, there will be an
economic balance of give

Truman

speeches about stopping inflation,

of

hand,; when benefit pay¬
ments
equal or exceed current

paLroll

Mr.

as

own

the production, rather

distribution,

this point specifically to social se¬

overall

That is why I say that so long

their

earn

dependent
ture in the

people of the South, and
increasing social ; security, all. the common people of our
about anything liberal or progres¬ country.,*,.'/,, •"
/
.!•/" ?
We ii will. not
be . stopped by
sive, aren't worth the air waves
violence or arbitrary arrests.
!
that carry
thein;^^
We will' not be stopped by the
Equally, so long as both Mr.
Truman and Mr. Dewey support poll tax, or other devices by which
our" enemies
try to thwart the i
the bipartisan policy of militar¬
ity is production. As a writer of ed^HdwfeverJ ii
will of the people. ///, ;;;/<////•'
popularized economics clearly ex¬ .essentially limited.
':
'
.
ism,
their verbal 'gestures for
We will not be stopped by dis¬
plains it:9
V.1. ■
1
' s'r
In summary, then, the cost of more civil rights are powerless to
The problem of distribution, on social
security, whether in initial hold back the tide of repression crimination, segregation, or other
which all the stress is being put tax
means
by which our enemies try
payments, or in the sense of and restriction of civil rights they
to'divide us.
today, is after all more easily the ultimate discharge of obliga¬ are setting in motion.
the

which

other

not

From % the' Elizabethan
than passage.
goods and Poor Laws down to the present
Social
services.
Economic
Security Act, relief for the
security ' is
shortsightedly thought of as a needy has been a community ob¬
matter of sharing the wealth. The ligation.
A certain socialization
social security system is essential¬ of product, such as is always pres¬
ly
a
distributive
mechanism, ent in tax-supported government
whereas the real answer to secur¬ services, is therefore to be expect¬
volve

will be all
that marks the spot where excess
tax collection took place..
On the
taxes later,

means more

those who do

Thursday, September 2, 1948

/•;; Truman-Dewey Policy of
//
/v;.. j Bipartisanism ;//. •/;/

Costs in Social Insurance
(Continued from page 31)

f.' ;-i

supplies

•///\ >/

than two

dozen

than' four ' pounds

•

of

eggs;

more

meat,

years ago [more than a pound of butter.

ing

j(i.

of the

Fund

majority of total, votits members, may
uniform
proportionate

noniics, A—Edited by Howard S.

Value1 of the

Ellis-— The Blakiston Company*

a

power

make

of

and changes in the
t.A

Monetary

agreement which might more use¬
fully be invoked as a means of
stimulating gold production.
It is
the one which provides that the
Fund, by

More than, three quarts of milk:

more

There is another section

International

par

l

-

Survey- °f Contemporary Ecp-

c#;4Wv members;, ...ThisipJwIadelpiiiJi

Volume 168

FINANCIAL

COMMERCIAL &

THE

Number 4730

CHRONICLE

3<T

(929)

Indications of Current
The following statistical tabulations
shown in first column

cover

AMERICAN IRON AND STEEIi INSTITUTE:

\

Indicated steel operations

(percent of capacity).
Equivalent to—
'
fiteel ingots and castings produced (net tons)...

'
■

figures for the latest week

production and other

either for the week

are

month ende d

or

Latest

Previous

Week

Week

that date, fcr, in
Year

Month
,

,

DOLLAR

NEW

YORK —As

Imports

-Yy

;

.

Crude oil

..Aug.
output—dally average (bbls. of 42 gallons each)
Crude runs to stills—daily average (bbls.)
..Aug.
Gasoline output (bbls.)
—Aug.
Kerosine output (bbls.)-——
-Aug.
Gas oil and distillate fuel oil output (bbls;)
-Aug.
Residual fuel oil Output (bbls.)—„—...
-Aug.
Stocks at refineries; at bulk terminals, In transit and in pipe linesFinished and unfinished gasoline (bbls.) at_.
-Aug.
Kerosine (bbls.) at.
1
-Aug.
——

._

Gas oil and distillate fuel

Residual fuel oil

(bbls.)

oil

(bbls.)

at

21

,

21

21

5,507,050

5,591,000
17,742,000

17,489,000

5,535,000

5,447,800

5,152,800

5,591,000

5,269,000
16,823,000
2,104,000

17,879,000
i

2,166,000

21
21

1,988,000

2,050,000

7,338,000

7,509,000

6,625,000

5,990,000

21

8,642,000

8,932,000

8,825,000

8,596,000

21

95,132,000
22,497,000
63,524,000
69,379,000

96,634,000
21,679,000

100,641,000

61,458,000

54,756,000

85,735,000
20,025,000
52,114,000

68,523,000

64,556,000

55,734,000

COTTON

GINNING

Running bales
21

-Aug. 21

20,382,000

Aug.

Revenue freight rec'd from connections

(number of cars)

—Aug. 21

891,277

882,566

900,895

-Aug. 21

b8rf,543

685,161

682,753

-

RECORDS:
Total

U.

CONSTRUCTION,

construction-

S.

Y-YY-Aug. 26

$95,191,000

construction

-Aug. 26

39,974,000

Aug. 26

55,217,000

Aug. 26
-Aug. 26

State

and

* Juno

..

$114,276,000

$117,146,000

municipal-

Federal

OF

52,226,000

84,413,000

62,050,000
48,377,000

52,530,000

48,458,000

61,726,000
51,521,000

6,759,000

10,205,000

13,673,000

19,755,000

(U.

S. BUREAU

OF

32,775,000

All

OF

of

(000s

324,ii®

COMMERCE)

omitted!, July...,

hours per spindle in place,

June

from

July,

INSTITUTE:r

__Aug. 21

12,315,000

*12,490,000

Aug. 21

1,170.000

1,199,000

140,400

*146,200

—

—

Aug. 21'

12,250,000
1,191,000

11,988,000
1,198,000

134,500

139,000

.

23,779,000
21,479,000

7,923.000

10,320,000
yv :>
461

;'

4**

356

23,832,16®
21,415,434

8,530,81V
>7: V-

35®

i

ultimate

to

(000's

23,798,000
21,328,000

consumers-

19,297,128

19,162,732

17,546,11®

$344,778,500

$341,687,300

$309,630,5(for

39,555,213

39,309,819

37,242,93®

*12,740,000

12,672,00®
6,639,1)0®

omitted)__

ultimate customers—month of

7——u—..YY^.Y—Y—-.-lY.J
June

30—

LABOR—Month

of

June:

12,955,000

manufacturing

Durable goods

:

.——.i—.

goods
Employment Indexes—

OF MINES):

Bituminous coal and lignite (tons) YYYYY
Pennsylvania anthracite (tons)
Beehive coke (tons)

$187,344,00®

prior to

Non-durable

OUTPUT

6,664,00®

'

EMPLOYMENT AND PAYROLLS—U. S. DEPT.

:

COAL

11,286,00®
1,00®

'

COMMERCE:

Number of ultimate customers at

$136,943,000

55,420,000
'

Public

$253,159,000

(DEPT.

ELECTRIC

Revenue

construction.

Private

19,880,000

$235,350,000

spindle hours

EDISON

^

;

17,762,000

,.Y—

Spinning spindles in place on July 31_u—
Spinning spindles active on July 31—

NEWS-

ENGINEERING

2,289,000

_Y

SPINNING

month

ENGINEERING

10,592,000
8,730,000

674,000

shipped between
————V——

(.DEPT.

Kilowatt-hour sales

CIVIL

9,937,000

$114,898,00®
45,056,00®
9,439,00®

and

(exclusive of linters)

Active spindle

(number of cars)

YlftUr*

Agtrf

9,374,000

—

16

COTTON

ASSOCIATION <0E AMERICAN RAILROADS;
freight loaded

^

•

Total

Active

Revenue

countries

Month

$155,475,000
56,193,000

credits——

Dollar exchange —
Based on goods stored

foreign

Previous

Month

$150,910,000
46,693,000

^

—

warehouse

1

-Aug. 21

at

5,521,300

OF

-

shipments

Domestic

*

BANK

date):

Latest

July 31:

—

.

Domestic
'

AMERICAN PETROLEUM INSTITUTE:

OUT¬

—-—

Exports

1,616,900

1,697,900

1,728,600

1,716,000

RESERVE

of

of that

are as

ACCEPTANCES

STANDING—FED.

92.4

94.2

.

month available (dates

or

of quotations,

cases

BANKERS

Ago

Ago

'

;:.Y'95.9

95.2

on

"

All

y

"

,

manufacturing

,

;

v'

—-'—Y..—-

'^Durable goodsy.-,-Y—

,

i'V?

158.1

■

184.4

-,Y->—

Non-durable goods.—--.-.-y:

*6,642,000
0
6,098,000

r

6,658,000

6,297,000

137.5

,

154.7*

VV:,.: 183.9

"lss-a

-

r

6,033,00®
V:"

155.5-:■

131.7

*133.1

Payroll indexes—
All -manufacturing Y——
Durable goods - -,-7-'---'.^,-*.-.-——

-

DEPARTMENT

Y

STORE

TEM—1935-39

SALES

INDEX—FEDERAL

RESERVE

SYS-

AVERAGE=100

1

Aug. 21

V

EDISON

ELECTRIC

output

FAILURES

(in 000

kwh.)_

(COMMERCIAL

VAy STREET,

V,

All

AND

INDUSTRIAL)—DUN

INC.

4,939,801

5,352,439

5,390,788

5,477,741

lAng. 2tt

AGE

steel

Aug. 26

manufacturing Y-Y^-i-Yi.wiY----.-

FACTORY EARNINGS

Pig iron

(per

PRICES:

LABOR

(per lb.).
ton)

gross

.Aug. 24

3.75833c.

3.75833c.

Aug. 24

$44.52

$44.52

.Aug. 24

$43.16

$43.16

.

Scrap steel (per gross ton).

,

*

...

3.75902c.

3.18925c.

PRICES

Electrolytic

y

(E.

M. J,

&

$43.72

$37.10

$43.16

$37.83

'

copper—-

1

•>

.

Lead

(New

Lead

(St.

Zinc
tV>'»■ -■.*-*

York)

Louis)

■■"

• -

.'

—

at-

■v.

Aug. 25

23.425c.

23.425c.

;Aug. 25

103.000c.

103.000c.

19.5Q0C,

V 19.500c.
▼l^SOOfc,

at
'

•

•* y

•

.

,

Aug. 25

19.300c.

Aug. 25

15.000C.

21.225c.

21.200c.

23.200c.

23.200c.

Aug. 25

.....

</ Y.v.

S.

Govt.

Average

21.150c

21.800c.

.

80.000C.

103.000c.

15.000C

17.5Q0C.

10.500c.

12.000c.

100.71

Aug. 31

111.44

116.22

116.22

Aug. 31

114.46

114.27

105.00

105.00

Aug. 31

107.47

107.09

Group

Group

104.07

100.73

111.25

Aug. 31

Aug. 31

y 116.41

121.88

114.66

120.02

110.34

Railroad
Public

109.79
112.37

111.81

111.81

112.37

118.40

115.43

115.43

115.63

120.43

goods

-

3.09
2.84

Aug. 31:
Aug. 31

2.93

Aug. 31

3.15

—Aug. 31

3.45

V

COMMODITY

.y,!-?7Y
NATIONAL FERTILIZER

.

3.07

INDEX
-y.yY
ASSOCIATION—WHOLESALE

■

.

-yv

-

■f *■ Toods Y——

>■' v

,

2.92
3.09

3.45

3.40

y-y;

'

":i '

•''■

—

wash

;'!' '

'/j
l-

-

,

yy.—Y—/YwA-

Grains

-Fuels

2.94

,

3.04

'

2.87

V

JSosiery

commoditlesl-——

^Miscellaneous
Textiles—

-

3.45

3.33

y

V

1

''

246.2

225.1

186.6

269.5

272.3

276.1

255.8

292.6

295.8

313.0

312.7

219.7

220.2

230.0

268.9

212.0

209.4

. -

-

Aug. 28

289.3

292.9

292.4

248.2

233.8

233.8

233.8

186.4

«Y

_

-Aug; 28
Aug. 28

—

■'

4ug. 28
-

———

/Y.-Fertilizers—Y,

-

Aug. 28

"•^Farm

machlnery^-^i=_y———-_-u————————Aug. 28./'
All groups combined,
,—
Aug. 28

V

.

——

'»

"

y

J-"- i

k

apparel—

-

;—

f

OIL,

i

.-■■.■■■

■■

.

AND DRUG
AVERAGE=10«
PAINT

REPORTER

vy.'y

YVV"1".;

~

PRICE

'V

;

Furniture

233.3

233.3

231.9

230.4

155.3

155.3

156.6

149.7

140.9

139.2

138.6

129.0

147.5

147.5

145.4

135.51

PLANTS

144.5

143.1

143.1

127.1

FACTURERS'

226.4

227.1

228.0

207.8

Luggage

144.3

Aug. 27

143.9
,

WHOLESALE

fPBICE.Sf~U; S. DEPT;- OF LABOR—1926=100;

140.5

i

108.0

IN

U.

107.8

.

-

107,5

,

13214

133.0

.

;V

138.8

138.9

:

140.8

;140.9

7

145.0

-V

146.5

7
-

V Y

144,5
130.5
130.4

FACTORY

4

136.7

140.5

143:6

154.8

SALES

129:8

Y

132.6

127.2

126.8

V;y,'

.131.1,
169.5

:

,

131.1

121.1

121.1

.144.5

ry".- 144.7
150.5

,

128.7

,

110:0

y
,

"-. V

-

131.0
,

'

140:8

140:1
125.0

A 123.5 ; Y

'

139:1

Y'

154.8

V

127.2

I 158.2

-

'

125:9

139.0

134.0

133.0

128.7

jFROM,

S. (AUTOMOBILE MANU¬
ASSOC.)—Month of July:

V Total number of vehiclesi.-^—
Number ,of passenger
Number of motor trucks.

——

Y
—

V" Number 'of motor coaches_^_^_^--y-^—Y
KEW BUSINESS

170.1

138.7

161.4

133.1

appliances
.—iY^YVY---Y-^-----.~--Yyr'i';-Y--YrVi-

VEHICLE

182.2

140.3

474,,387

431,033

379,192

356,582
116,802

312,406

297,631

1,003

1,055

117,572
.

97,755
1,806

INCORPORATIONS—DUN &
INC.—Month

BRADSTREET,

of

July—

CASTINGS (.DEPT. OF COM*
MERCE)— Shipments, month of June:
Aluminum
(thousands of pounds)
Copper (thousands of pounds)
:—
Magnesium (thousands of pounds)..—^

NON-FERROUS

■^....V:1.,vyv:t::y,yvVvy'y■ y;y/-;YVV'V-:y

™ :

145.3

,

Y39-4

y,,

f-Jy&.'x

#

'C
•: Y V/.

:

■If,- SAUi commodities'_---M^-.——-1-_1-Aug, 21i
:Farm products
——
—_—:
Aug. 21

135.2

Electrical, household

INDEX—1926-36

Y

122.4

156.0

China

&

130.4 ''Vy-'Y
139.4

140.6

-

143.1

167.6

130.9

>——

—

"

100

;

7

123.5

Radios

438,848

126.0

A

139.6

155.6

1_._—

'

MOTOR

V

166.3

150.4'

'---rY—

—

159.1

i

130.6
148.0

131.5
—

—

Y

coverings

Floor

163.4

93

130.7
148.5

169.1

—i

^

216.2

^''V-

130.6

131.5

.Y

;—

181.8

362,761

V.

137.1

137.2

127.3

__1———-■—

overalls—

SOCkS

172.7

(tons),Aug. 21
of activityAug. 21

134:7

'

.infants' and children's wear—

Y;/ Underwear
^V Shoes

199.7

Unfilled orders, (tons) «t——j,Aug.21

135.7

140.0

132.8

—

—

187.4

149,464
177,712

141.2
7144.0.

155.7

—r

including

195.5

/'

a

135.7

V'

Y

140.4

168.5

'Production

M

7-

y-V-/:/'/y

neckwear.!

and

187.4

175,762

'

A-'z.yyy t

■■

144.2

146.8

—

Y-Y

169.3

185.537

.

t

141.5

140.3 *

133.0

:Y"—:
—j.-—

_________

Shoes

J

•

.

'

:

-

195.0

■Grders^received\(tphs)t-,u^^.^.—Aug; 21;";

V ^-Percentage

..V >•' f

182.5

_1—

comfortables

and

,

NATIONAL- PAPERBOARDASSOCIATION;

;'

1.152

,

Underwear

;

.Aug. 28

y'Buiiding materialS———-jj————
—Aug. 28
■t
Chemicals and drugs-^———-a—.—Aug.',28:
Fertiliser materials^
Aug. 28

:

1.306

•1.242

131.2

goods

-Hosiery •;

; c

224.5

244.3

—.

Underwear

Men's

.—Aug. 28

i—

—

*1.385

1,251

162.7

Shoes

419.9

434.1

—.—

Purs

_

3.07
2.88

!»'.'"/i

;

420.7

245.6

y y,y!,,, ...Aug, 28''

;

—

Metals

•

—

Aprons and housedresses
Corsets and brassieres-

"

i

$11232

1.404

'.:

YY--YYy-.--.-l-Y---'Y^--4-iV Y-".

Blankets

3.15

!

-Aug. 28

———:—_—

:

—.

39.8

*$1,317

(COPYRIGHTED)

—__—

Hats and caps

yAug. M

Livestock

-

'

v

,

Y~--Y^—

r^.WomeA's appa>*di-?*

2.84

:•

3.27 /

y

3.07
2.88

s

Shirts

28V

—

V Cotton—r

"V 40.0

..

•39.8

goods—

Clothing,

_—_Y—Y ...A yY----

products

1:

Woolens

'•Sheets

3.10

COMMOD-

'Fats- and 7 nils..——.Jl.,,-. ,7,-■•■>"7

Warm

•/>

?

.

3.15

3.33
,,

424.2

2.83 y

/f'/'y

..2.94.

////•'/.'

2.88

Aug. 31
/'-.-v-; yAh

'■

-

ITY INDEX BY GROUPS—•1935-39=100:

f

39.8

V *40.7"

•:

PRICE

Rayons and silks

V

-

2.45,

3.06

•

3.32

Aug. 31
Aug. 31

s,

■'

•

J yyi
..•

.2',45V

t

•Y . .2.45;
>rY-'3-.10'-

y

MOODY'S

RETAIL

—

Piece

■

2.45

Group

Group

.-

—

Home

-

Group—--ii—u——Aug. 31. ■/

Utilities

40.1

V 39.5'
$1,330

Infants' and children's wear
furnishings

:

105.86
108.16

Aug. 31

Aug: 31

.

•Industrials

45.65

♦40.2

i

PUBLICATION^

Men's, apparel
Women's apparel

116.80

111.44

V

Aug. 31

YYYY^YY^-<-<
—

■.

52.23

*49.39

39.8

—J——.—

-

Domestics—

_

Baa

yvy*56.32'Yv
'

49.47

'

-

1935-39 =100

INDEX

Piece

v

corporate

56.25

1

'

KOODY'S BOND YIELD DAILY AVERAGES:
0. S. Govt, Bonds--—

$49.03

*$52.95

$52.96

Y-:-u

Y^-.YY.Y'

V Composite index

117.00

112.00

;/{

-

110.34

Average

OF

V Non^durabl® goods

Cotton

;

DEPT.
,•

goods:;.

•

;AS, OF AUGUST

Group__i

Utilities

S.

July:

goods-

Durable goods

14J800C.

«

v,

Baa

Industrials

7,622,00®

'

.

Public

of

Non-durable

.

l-7^00c.

•f

15.000c.

100.71

A

♦

■

Non-durable

FAIRCHILD

corporate

Railroad

ESTIMATE —U.

goods
Hotirly earnings— •
.
All manufacturing

•; ,i;

Bonds

Aa

8,050,00®

*7,790,000

AND HOURS—WEEKLY

Month

—

Durable

:

MOODY'S BOND PRICES DAILY AVERAGES:
U.

15,672,00®

*8,114,000

8,030,000

./'All .manufacturing,
■*:Y4-».,t
"V1
Durable "goods *.^_Y—YyYj^.l-—Y-^:

,

at.

(East St. Louis)

•

at

*15,904,000

8,131,000

280.®

Mbufs^-:V'K^'';yy':-;' .Y'Y?:v^Y;"'t:.-'iV:yyr'y.':VvY.

Aug. 25

Export, refinery at.
Straits tin (New York)

16,161,000

■

_Y.i.-«,i.Yi;—.Y.Y-

V :
'
manufacturing' YYYY-.YYY—.—

AIL

QUOTATIONS):

Domestic refinery at

v

•

375.5
7

Earnings— '

-

METAL

*303.9

&BRAD;

COMPOSITE

Finished

*300.9

318.0

.

,

Durable goods
Non-durable goods

AVERAGE

(IRON

401.3

:

employees in manufac¬

turing industries—

INSTITUTE:
•

Electric

*346.9

Non-durable goods

,

Estimated number of

327.2'-'

359.2

V

,

169.2

169.0

191.0

190.4

...

C •.

194.6

•

!....

153.5'

168.2

^

■

:

181.4

/

Zinc

V

Lead

(thousands of pounds)....
die

;

(thousands of pounds

35,822

32,988

84,817

84,€0*

709

fill'

37,136

33^90

1,183

1,079

*

Foods

_y_—

;

*

-J

Hides and leather products.--'^Textile, products—-—:

f-V

t

y

I

L

;

Chemicals
i

Housefurnishings

,'

Miscellaneous

products.
goods—.:

189.5

172.3

SOFTWOOD

182.3

iy

171.5

170."9

202.0

202.0

131:7

131.6 '

146.8

146.8

Aug. 21 y

118.7

118.3

Aug. 21

182.8

182.5

184.6

167.7

159.3

159.7

154.5

149.5

164.9

164.7

163.1

148.3

Aug. 21
Aug. 21 "

commodities

■

137.3

.Aug. 21

;

allied

and

189.6

190.4 >
•

147.8

Aug. 21,

jBuflding-materialS—___1—

190.3
188.3

148.0

'

—Aug. 21

;

189.5"

137.3

Aug. 21

I

iMetai and metal products

Aug. 21

i

u

|Fuel and lighting materials—
V'

.Aug. 21

:

.

148.1

140.1

-

Yyv;,

■'■

V./.V /

V,

\

132.9

'.:y

119.2 ^

179.1
117.4

131.9
;

.

,

materials.

Semi-manufactured

»

-

r

^

115.8

1

,

-

—

articles..

:

Month

—Aug. 21

;

•

Manufactured
All
All

products
commodities other than farm products..L
commodities other: than farm products and foods,

•Revised

figures,' Yylv-Y 'VvY'




Aug., 21-

—

'
-

Aug. 21

"

-

i—Aug. ?i V

v'-Vy?-IYY

x

<

164i3

164.2.

162.3

147.4

5

<453.1

152.9

150.6

136.6

COM-

MERCE)—Month of June:
> y
■
(M sq. ft. %-in. equivalent)
and
consumption
(M
sq.
ft.,
%-in.
equivalent
-..j—_____—
Stocks (M sq. ft., %-in. equivalent) at end
of month
Y
—
Y
Consumption of logs (M ft., log scale)_•__—
Stocks (M ft., log scale) at end of month—

STEEL CASTINGS

Special groups—
V". Raw

OF
•'

150,187

*151,364

140,147

149,742

*150,924'

142,'817

Shipments

147.0

V

145.9

y •

r

V
.198.0 V,
160.9

(DEPT.

Production

114.1

.136.5 v

PLYWOOD

.

31*345

41,425

*40,778

*65,287

*64,889

60,231

153,859

*131,920

141,461

(DEPT. OF COMMERCE)—

of June:

-

.

.

f

152,894

143,337

139,B2f

(short tons)—i—,-Y

117,794

111,616

103,888

producers' own use (short tons>4.
Unfilled orders for sale at end of month
(«-Yrt, tons)
.—Yr-^-rr—:-'—--

35,100

31,721

35,143

469,973

482,531

445,475

Shipments
For

sale

(short

_

tons)-----

For

'

,.

'1, ^Revisied:- figures,: t

■

Y** Yy

..7■ k

<

THE' COMMERCIAL

(930)

34

Immediate Problems of
(Continued from page- 7)

there is much

more

accomplishing

an

likelihood

of

&

FINANCIAL

CHRONICLE

Retailing

chaise? fbr

the

fall

perhaps

Labor-Management
Must Avoid Depression

now

organized read- more " than
ever
before
items
peak today far ex¬
justmenf than if under the" stress should' be bought on their statisfigures and',
of the situation the cutting down tical performance. In other
of course, looking mountainous as
words;
we are
process is first studied and: initi¬
far away from the war¬
compared with the- wan years and
ated. To this end the careful cal¬
time policy of buying because of
Regulation "W." Nor can we over¬
culation- of a break-even point is avaiJabilijty.
look the effects of credit regula¬
a most desirable aid
So let's see. Merchandising for
in operating
tion— although!
those
recently
likewise

at

ceeding

the

a

* prewar

"W."

Nor will

tnese

it would

that
a

that

seem

ing ahead for retail sales volume.

in

attempt to get
their share of the American earn¬

credit

ards.

We all know the headaches

reasonable

ments.

than

people

because
person

lar

last

their costs

the

whole7 distributive" field.

But retailers cannot

or

the

should not

cumstances.

stand¬

difficult

Although

problem

is

this

that

a

always been in the1 replevin value

try, with study, can't greatly im¬
prove efficiency.
One- might with

is

but

an

of

reason

come
me

the

of

in

and overharsh prosecution
delinquents is not to be over¬

as

result

a

of study;

ment for their balance sheets sales
and aside from the, public rela¬

What

the most effective selling tech¬

tions

evil? which

from

come

bad

niques—can- they be- studied, can
credit extension.
they be taught and thus since pre¬
The effect of the .new Federal
war
days
is the most vulnerable,
our study:
the faVorabfe factors
Reserve regulations will- be rela¬
point in- American- retailing.
At
arev high
employment and high
what point does advertising stop tively small. The restrictions are
earnings, and so long as these' con¬
slight as (compared with those in
being; productive? To- what degree
tinue with
or
without a much
effect even at the termination of
can.
one
cut your
supply
costs
needed readjustment of prices in
the old regulations in
November;
(boxes, twine, paper) without in¬
the consumer goods field, retail
1947.
That the Federal Reserve
terfering
with sales or creating
sales will1 continued1 at a high1
Foard was sq lenient
iqj
itself is
added customer resistence?
level. We have seen no decline in
interesting.
Perhaps too severe
These*' are1 all factors which go
the dollars of retail sales generally
regulation in their opinion would
into merchandising for a nrofit.
nor
are
we likely
have produced under present con¬
to in the im¬
mediate future so lohg as wq' re¬ But there- are more. First perhaps ditions tod-fas^ a
deflation,-* Pet!
'hC "immottance "is- turnover" ratef-*
tain full employment.
haps the theory which has much
by items audi by class* of-itents;. merit that
On the other
full employment is thjehafid, OompetitSott How alert- are retailers to
style first pre-fequisite was in their
for a share - of they American! in?changes and' particularly in the- minds. And
come "is against the* continued- in¬
that With' full; em¬
light of 'the changing distribution
vestment in housing and perhaps
ployment
continued
prosperity
of incomes here in America. With
in other consumer
may still .be maintained even with,
capital goods the
number of people with large
a
such as automobiles kitchen
downward price adjustment in
ap¬
incomes' declining and with; the the
consumer goods field;
The ef¬
looked either;
So

summarize

to

this

phase of

The credit situation I believe is

important and will be
a

one

more

curtailed' net quick

position.
Price'Factor

,

,

But the price factor is

that

And

more;

wholesale markets are not
moving together. In some fields

a

nation-wide* system

free

employment offices.
Labor Standards Act

The

definite signs of weak¬
commitments fol¬

are

in

ness

other

iate fall

and

are

higher prices.
Certainly it is
generally true that lower whole¬
sale

prices

are

not

immediately

foreseeable. At what" point do
you
reach buyer resistance in an
up¬
ward trend of

chandise

prices?' And if

costs

continue

mer¬

higher,

how

long can retailers permit a
lag before retail prices must like¬
wise be increased.

And

hbpolieS;vW.i.t h

o u t

«ales in their inventory. This was
back to the; 1940 ratio. Outstand¬

ing orders in- these stores followed

lag

is where profit vulner¬
Here again planning

in

advance

if

the

studied

a

only out.
is known

in' advance,

procedures
der

is the

problem
are to

?

just

real

one,

case

of

a

are

up¬

How- much

might

readjustment. This is
many

indications-

of

sale markets and the picture is
mixed picture.
?

77-7:7!;,

a

these

*

circumstances; the

best adVice seems to lean toward

great cautiousness in: placing or¬
for

ders

theare

immediate

future.

general statements

and' we must be
comes

to

is that

specific when it
merchandising. The point

on

from

1914'

commitments

or

to

1942

availability of nonunion;
labor;, and child labor.,...

Governor

Exchange1
senior

|

member of W. W. Lanahan & Co.

;

of Baltimore.

was

When the company

merged in 1942 with Alex. Brown
&

Sons, he became

& partner ih
that firm! Mr. Lanahan was Pres¬

ident of the Board of Johns
kins Hospital!

Two

;To

pur-

the

.

4

.

,

who!fpots;

wage-earner,

ticat7prpbleim;. r Ijiit7a!!rj^al7 problem of

out

(Special

Charles
Turner

to

TAe

Financial

C.

Clarke

have

been

and

John

added

getting
other
necessary «t foods,
and
actually 7
meeting the higher prices with a
!

wellts sOnier; Southern^ States
aW'e .to 'rure industries,.into

were

Unionism has

:

.y

come

(SneciaJ

to

The

Financial

than
.

the

before.

W

7

the dangers Of. in¬
They failed- to act hi' the

flation.

speciar

last;

session

whicn

for this purpose.

called

solve- this

problem

if

he

We> must
prosperity

;and; economic stabUity, as: well
the
are

well-being

of

the

to! be protected).

Secretary

as <:

workers,

-

of Labor, I Urge

e::way!::to!: m^6Jve!thfeir.'-!

waj^-earn^!exp^tfk,7a^
just

get; a

goes

share; of

tb, the

.:

the

return^

(Common eftdrf!

7;

and;V)vith!";H

77

Co;!

Chronicle)

-the Congress of

to the South,

L-

~7

South

has

ever

known
-

\7'Jl

7

7 We. • aite better! ofi too,. because.

of

With h. b. Cohfe &

*;A.

JPresident Xriimau has. warned;

As

Davis, Skaggs-& Co., Ill j New Erigland no* longer has to
worry about\ the' exodu^ ' pf iri-Street, members* of the
i
San Francisco - Stock, Exchange^:!. dustry to?! othe!r!pafts bf-tfiLe;co.unr?try; because5 !^ drastically^! lower
staff

means

redhctidnr^

!, : •,•.
That
t,.;N'6w-aU^that has been changed!

to;the

It,

meats' and

albrig' without

opportunity to exploit not 'TKai7is!:
only adUlf- workers-, -butr children

their areas.

CALIF.-i

week.

the

wages.Our own standard of liv¬
ing has benefited and! is higher
than

ever

before. And there

is

a

Harry Ay Augenblick,

lawyer

a

iid!Newark(,;N;

a: member
of the New York, Stock Exchange,'
.

died at the age of 60 after an-ill¬
of several! months,
i, j.7
; i > : •

ness

.With.Thomson
& McKinnon

'v/'.
.

t

.

,

.

^

(Special to The FinancialiACHRONtcfcE); *'.CINCINNATI, OHIO4— William greater purchasing power; in the
E. Hogue has* joined the! staff pff rest of the nation to. buy the goods,
KENOSHA, jWIS1— James'. H.
H. B. Cohle & Co., Union Trustf which we produce.; - - **.' ''/;
;*!. Myers- has become affiliated with
Building, member of the- Cincin* e Unions are this, nation's greatest Thomson &► McKinnonv- 625,'57th

nati Stock Exchange.

;

check last

pay

By m e a rrs- of devious and all- unions to cooperate with- man-y
shoddy (appeals. based, on; wage
standards far below our own arid "agement! to*^ inCrease productwit^^^

as*.

Hop*

Chronicle)

FRANCISCO;

making the

the
4

Witfr Davis, Sfeaggs

3 SAN

cheap

Sutter

•

Caution Urged'
Urid'er

former

of the New York Stock

The risk, if it's
very well be

softening in; certain; of the" whole*

But these

un¬

and

immediately foreseeable. BUt

For

given set of circumstances




today's prices?

a

and

what

be followed

1946

hazard is there in inventory

there*

larger

ability lies.

a

not

handle the- in¬

This

of

at

in

namely

quickly.

reverse

translated! into added markd'owris

creased load.

as

the

of

that the average price of
coods
declines and the number of
pieces

wages will not decline

the

ders mentioned above.

the number of pieces sold
has de¬
clined.
This; means- then that if
the reverse takes

Now,, we know that
a lag. in
payroll
That, is if prices decline

a>

swing in June in outstanding; of*

price situation. For although gen¬
erally retail sales dollars are up,,

always

the pattern of 1947 with

sharp
decline in the spring which was

expense problem for many
retailers is closely related to -the

rates.

-

-

The

there is

tional4,

competition

-

Expense Problems

a

Which; ,ris:

'

ticularly! in the light of the: in¬
creased ppefrdting fcosts/

sold goes up,
presumably
staff is needed to

a

shouldn't be

>

try to measure the point at which
One of the .greatest, hlessihga to
buying resistence enters into the America' has- been the- over-all
sales
picture.
For in; the final unionization, inrtbe; 48 States, in¬
by the Federal Reserve Foard analysis the; sales problem will be stead .of having the! labor move¬
showing the result of the figures, the important one for; alb retailers ment confined, to the Northeast¬
of 290 department stores, indicate in the immediate future. And
this ern > industrialarea and the .large
again a material upswing in the is one which in the past five years cities.
figures recently published of out- they have not studied- and must
\ i The .great gxadu?.of -the.tex.tile
standing, order?. This movement relearn.
industry fronvNew England to the
is accompanied by a decline in in¬
South in> the days prior to the
ventories
butwill
inevitably
NRA and the National Labor Re¬
W. Wl Lanahan Dies
translate itself into larger stocks
lations Act, when workers were
William Wallace Lanahan died
unless a precautionary measure is
;ihi Providence; R. I., at the age b£ not protected~in the right to join
taken by the stores.
At the end 64: after
being stricken1 with A unions and bargain with their em;:of June of this year, those stores heart ailment. Mr.
Lanahan, a «ployers,'could be- attributed1 to the
had
approximately 2% months member
;
and*

this par¬

place

law

this

Act,

for

An important part
was
Section 7
Ca),

,

?

winter- delivery

at

of

quick-cure

a

as

industry.

-

,

there

proposed1
sick

such? laws

of

first

the

National1 Recovery

the

was?

The NRA

>
of

regulated. The mos*' the!biHs; aridi! the;' housewife- who
But the retailers must also be •ultra-consbrvative doesn't believe has. her; biidget
worry abotit,;
thev rise im prices* is hct a- statisexceedingly price conscious and that todhy.

im¬

The

7;;
One

^

advantageous purphases. This is a problem in ting¬
ing and control.
1 ; *

this

leads the problems
presently related to inventory to¬
portant in the present day econ* tal and outstanding orders. With
omy.
How much i^ has or will thi? constant "upward" - swing of
effect retail sales is a question.
prices, it is most difficult not to;
And here we are
dealing with a make commitments at an accele¬
many sided and volatile subject;
rated pace. The figures
published

is (becoming more and

one

,

they; pfease,; pay anything they
Since' QUA, controls were;4 for 7
please, employ workers under any
practical:4 purposes,, abandofted in
conditions they please regardless
the summer of 1946, wages,of fac¬
of safety
and health, carry, on tory "workers have- not kept pace
; their
business, .without regard to with • prices:
Average wefekly
the public welfare;-earnihgs have gpne up 22.3 %!»and
lower and middle income
the
cost,
ot
:
That
js; not a free1 competitive
living hi: the United •
groups fect of such a
readjustment, an
stepping up- to higher incomes, orderly
ehterpriise::?' in!-.;, accordance^ with States has gone up 30.3^. Wages
one, would not be too se¬
How important rare1 these'
of
sbriie!; other; grou^vbi/workers 7
changjes vere on the operations of the good tfemckirsiU^ancb^Americam ideals;
in the composition" of the Amer¬
In the- past, some people have particularly in? the white collar
retailers whose inventories are itt
ican
income' to'
category,
have lagged behind-even
even
adva^ed
the
merchandising hand and' who always are "open
argument tha+to a greater extent.
plans?
7 - fe
to
public utilities, which are mpr
buy" for

pliances^and' televisibnVelement in

to

measures

a forerunner of the .Na¬
Labor
Rtelatlons
Act,
week, and the regulations of child spelled out* in the law of the land,
the
right of workers to
join
labor.
These and; other laws protects unions of their own choosing and
ing the -rights and welfare* of the bargain -collectively with their
wage-earners have helped to pre¬ employers,
When it was very sick and flat
serve our system of private prop¬
erty, and free competitive enter¬ on its back industry welcomed
prise.
We must continue to im¬ this law. However, as soon* as? in-*
prove them to meet today's eco¬ dustry became strong and healthy
nomic conditions.
again it repented1 and wanted to
As my* many friends in* Boston- do away with'the regulations that,
and throughout the State of Mas¬ made its recovery possible.,
sachusetts know; I believe' iii* the
Industry,, in; other words;* acted
private property order and in free like! the' interiiperate didhker7who!7
enterprise in America.
having takent toof much alcohol,
I-believe in private property not swears off. wherit he' thinks- he's
as a theory, but' as a condition to
dying and returns to his old hab*
be enjoyed by a happy, prosper¬
its'as'sobro as he's back on his fhet •
ous
people' who- have' the means- again; ~
7
*
•
*
and the ^opportunity to buy their
\This' country is*-on" d'binige^to* ^
own hpmes^ properly
feed .and day.7 High, prices have Wiped? out ■
clothe their families, provide for
nearly all, if not all, of the ecoeducation,:, health and reasonable
hdmic^airis; that the! workers have
recreation.made since the war.. In July.,, the
The term free enterprise v ha? CoSt-of-Hvirigr for
rrioderate- mbeen kicked, around a lot. Some come fariiiUes^^ reached si new'*allpeople have taken it to mean li¬ time! high; of 173.7%'of the 11585*351!
cense.
( License
to do;, anything average:-'

F6t retailers to get their share
the American consumer's dol¬

of

distribution

the

immediate

tive

Fair
pro¬
vides for; a" minimum wage; time
and
one-half after 40 hours
s

-

credit

wide

and

of

exceedingly advan¬

many-hands. The public relations
effect
of careless1 extension
of

sold

in

was

depths of the depression.

took

ployment, and encourage produc¬
employment.
:

Free

today
are
protected
unemployment and oldunder the Social Security Act.

They have

including
intricate and

be-discouraged by the lack
of improvement in production in- lar,., they- will of necessity have to
be alert in extending credit with¬
American industry, but whatever
in the limits of sound credit
judg¬
improvement that has been- has

merchandise

age

tageous tax method should again
be4 studied!

indus¬

Nation

1933' the

in

put the country back on its feet.
Legislation was enacted to revive
industry, raise wages, spread1 em¬

against

The implications of

rate.

which

involved

doesn't

mean" that the brains in the

tax

LIFO

Furthered

He

Workers

years

management

all possible tax methods

lie down and die under these cir¬

have come with too great
liberality—but the' safeguard has
the

office

the very

Enterprise

anything of which one can think.
It is to be hoped that we won't
slip into ,• that : kind of reasoning
again no matter what happens to

This- constant iberease' in pay¬
demands has left its imprint

on

harm

to-

more

Laws

President Roosevelt took

When

process

changing jobs.

Reform

control and judgment than almost

are

that

of

the

in

are

Average

The 19 cents expense dol¬

during the excess: profits

did'

increased

of

roll

ings and they probably should ex¬
tend credit as aggressively as they
will be permitted to do so.
But
they should extend credit on the
of

man¬

Upi

the

basis

or

and

Well

operating with the

are

fewer

same

year

payroll per

Certainly retailers should and will
promote

sledding.

aged stores

we

real problem in look¬

very

tough

very

tion, be for too long duration.
So

of

of; getting the best possible
tax
advice and not permit the tax implications to warp business judg¬

question of operating expenses. In
the
department
store field
it's

regu¬

lations, without additional legisla¬

have

(Continued from page 9)

unemployed

weekly
earnings- in
manufacturing
occupations
was
at a profitvin the retail field*'
a profit will in the next
year pre$16.73 in June; 1933. In June of
That brings us to the next"phase sent certain possible tax problems,
this year,, the average? had risen
of
this " discussion,
namely the These should be laced on the basis- to-an all-time high of $52,81.
V

promulgated are relatively easy,
and of less stringency than those
in effect at the terminus of Regu¬
lation

Thursday, September 2; 1948

insurance for

prosperity.

>

Street.

7-!7!'7

;

'$,$■

-7v v• .7- 7'
■

Volume

168

THE

Number 4730

COMMERCIAL

&

FINANCIAL; CHRONICLE

1933

in

Are We
(Continued from page 5)
and standards laid aowxi oy Con¬
The Bill advocates neither

gress;
the

high nor the low tariff ap¬
proach; it seeks only a fair break

for' the

American

producer

and

worker when competing with the
cheaply produced imported item.

The proposed

legislation would

turn the present

tariff commission

into

foreign'

a

which" would

port fee

on

trade

authority

determine

im¬

an

reason¬

competition"
basis—represening in general the diiferential
of cost of production between this

country and our competitors due
to 'the difference in the
wageThe

of

living^

foreign

trade
authority
independently in
determining :such import fee,, in

would

operate

-

the

same manner as the
Interstate
Commerce Commission acts in the

matter o'

freight rates—eliminat¬
ing ail "log
t'olUngy'^-Tobbying;"
"horse trading" methods.

or

:{,

might well' have * been, out of

we

fuel

our

—The Fuels Position of the

|W%;>r

X United States
National Resources Eco¬
nomic Committee in the Senate is
ht .this time
-preparing a report-—
hearings will be continued on Oc¬
Our-

tober 4 of this
year—on the "Fuels
Position of the United States."

The Committee has
already pub¬
lished a report on
the "Minerals
Position of the

.United, States."

and

now

upon

our

enemies

petroleum supply.

can

;

be

order

entirely dependent

potential

cured

or

a

V comprehend
diversified
less

Apparently all military author¬
agree that, l.i the event of
Russia Could

Middle

East

oil

take

-fV

«v

by

group

can

fully

or envisage the full
impact on the count¬

segments

of

tne

economy

Washington undertakes to
manipulate national policies af¬

♦

to

with

rpean

inter¬

that^

"Title to the soil under the

within

the

the

State

ocean

three-mile limit
of

California

in

is

and

oyer

within

the

land may not be appropriated ex¬
From

advocating

sonably concluded

that the

60

Gov¬

ernment of the United States filed

,

.

sequences latent in every govern¬
mental attempt to harness the laws
of economics, businessmen hesi¬

the Middle
East source for the necessary fuel
in
this country since once ex¬
ploration and development had
upon

troleum

and

hese lands

natural

were

under

gas

necessary for the

security of the government and
in long-range plan¬ not on any basis of Constitutional
involving capital expendi¬ right.

tne

at

Jrade
time

same

system of subsidies

a

the tax-payers to
keep the
domestic producer in business.

have

Board

Federal

a

putting

government

Reserve

out

low

interest

bonds

and

buying

of such bonds back to sup¬
port a shaky market.

many

executive policy of
policies
more
money in
cir¬
culation while calling loudly for
Congress to cure inflation,

tate to engage

ning

free

from

We

historical, study of the
I think it may be rea¬

an

situation,

selective

a

partment while

cept by authority of the State."

the

suicidal to allow ourselves to be¬

dependent

We have

35

policy promoted by the State De¬

fecting production, marketing and suit. ih thek Supreme Court to
We have
trade..
change this long-established rul¬
continually
It would be
Because of these indirect con¬ ing on the theory that the
pe¬ calling for

fields

days at a maximum.

.t*

when

ities

war,

or

credited

is

preting the law

law, • executive
bureau regulation. No

individual

for

Foreign Oil and National Security

come

the "fair and

able

staftdard

Running Out of Oil?

(931)

an

advocating

Common Interests

The

adverse Federal pol¬
companies,
This has been the plan of cer¬ icies affect not
only the oil re¬
including
petroleum,
minerals, tain theorists for many years and serves of this
country, thereby
position.
agriculture
and
manufacturing all markets and production have endangering the very
security of
Many authorities agree that it may have the best lawyers in the oeen kept in a state of
flux, with this nation, but affect alike the
will be many years before
with
the world,, complying
every no definite;national or interna¬ wage-living
standards
of
the
natural underground sources
of known law and regulation when tional policy,
purposely to bring workers in the mineral, livestock,
production have leveled off, if, in suddenly they are "shot from am¬ out the desired results.
textile, wood and wood products,
fact, this condition is ever estab¬ bush" by a new law or executive
It is my firm opinion that the
agricultural and ultimately the
lished in our time.. But-alj; agree order promulgated in Washington
Congress of the
United
States processing and manufacturing inthat, if the selective free trade under an emergency atmosphere. should
dustry of the country.
review this entire field.
policy adopted by the State De¬ The resulting impairment to the
Under
common
sense
Federal
partment is carried through to a business or industry is suffered
Controlling Fundamental
policies encouraging exploration
logical conclusion, within a very without fault or error on its part
Economic Laws
and development of the actual and
but simply because we have no
few
years
new
exploration and
In closing, let me say that in my
potential petroleum and gas fields
development will have so dimin¬ principle which forbids changing
opinion it is time we again take —and
the synthetic fuels from oil
ished that we will definitely be the rules while the ball is in mo¬
notice of the fundamental eco¬
t ■<; '■
on
shale and from coal-—it is impos¬
the way out as a major oil tion. -}4
nomic, laws which will ultimately
producing nation.
sible for this nation to run out
control.
1
Federal Legislative Standards
We have no definite national or of petroleum fuel in the foresee¬
Steel Production
No one questions the
necessity
able future.
4 V
You are all cognizant of the de¬ for Congress and the Federal Gov¬ international policy,.

ceased, the war could be

fore

we

could

recover

lost be¬

our

tures.

Individuals

same

or

present

.

•

gree

to

which

exploration

development and
have been retarded

ernment

entering the field of eco¬
nomics -and trade. But one. has a

since the war due to the shortage right to assume that our national
include of steel,* The testimony before our programs Willi be designed to Safe¬
of oil, National Resources Economic guard the economic substance of
(Continued from first page)
gas and coal, together with areas
Committee
last
year
disclosed America and to protect our pro¬ 52
of potential
When Will the Boom End?
days and the distance retraced I
production where de¬ that we were
ducers and workers from the ad¬
approximately 70,000
57%.
velopment and exploration
Nobody has ever fully explained
can, wells behind
in normal drilling verse effects that emanate to our
and
These reactions serve as safety
should, logically be
what causes the end of a boom
shores from the
underr operations,
disrupted eco¬ valves.
although
we
were
taken with, reasonable
They reduce speculation period, but everyone has his own
expectation shipping steel to European areas nomies' of foreign countries.
to
conservative proportions. Al¬
of; success.
The report will also at
opinion.
One observation, how¬
the rate of 6 or 7. million tons / The strict application of these
though usually accompanied by
include synthetic fuels, the pro¬
ever, does seem to stand the test
annually. While this steel could principles as a standard of meas¬ news
duction of petroleum
events, the events are nearly of experience: no serious depres¬
and gasoline be
ure
would
require a critical re¬
supplied from German plants
from oil shale and
always found to be a rationaliza¬ sion in modern times has ever
from coal, and
of
of a current capacity of 25 million examination
several
of
our
tion of thri decline rather than its
the foreign
sources available to us tons
present
trade
annually, we, by 'designed
pollcie^. which have cause —- the actual cause" having begun while there was a redund¬
under certain conditions.
ance
of money.
At the present
beenwidely
'
policy, have curtailed production
popularized by/in¬ been overspeculation.
Hp:v:.\
r.:; Ap
JA'./p!/ to* the
time,
there certainly is ample
present level of, about 5 tensive* propaganda.
Synthetic Fuels
money to* go around—so much, in
million tons- annual rate.
The Current Reaction
Both the bil shale arid' coal
Fallacy of Gift-Loans to Support
fact, that in spite pf a three-fold
proi
All investigations, including
dUction processes are in
In analyzing the current reac¬ increase of
my
Foreign
Trade
the pilot
production (gross na¬
own—I visited the German plants
plant :stage;.; but entirely
tion, I find that the preceeding tional product) since before the
The, .present emphasis on ex¬
feasible; and coal; injnes j in the
RUhr^iri
up-move lasted from March 15- war, prices are* still rising.
though somewhat more expensive.
porting solely for. the sake of ex¬
1947—rindicate
that
the
annual
June 12
The engineers and scientists
(D. J. Industrial aver¬
re¬
porting, with payment being made
Nothing on the horizon indicates
7 or 8 .million addi¬
ages); or ton 88 calendar days. The a
port. that
laboratory; and pilot productionvpf
money pinch.
As a matter ot'
tional tons of steel needed in Eu¬ by- our own gift-loans, cannot last retracement
to
the
recent
low
plantvwork in the production of
long.
The current program of
fact, it would seem quite unlikely
took 53 days and the distance re¬
rope could be reached in Germany
petroleum fuels from coal is
that
such
a
now
making
up the trade balance defpinch
could occur
Within a matter of * month s,
traced; was 56%.;
nearer: the
simply icits ofribmmefcial' stage of
while the Federal Reserve keeps
the world ; each
year
All this put the current reaction
through an order by our govern¬
ddyelopmc nt than: was syrithetic ment reactivating that- amount of through cash as exemplified by in line with the average of all its peg under governmentobonds.
rubber at the
Since 1940 our money supply (U.
beginning of World
the* Marshall-Bevin plan 'is con¬
additional, German productions
past: secondary movements;> as to
Way lip; Theyuriheri
S. Government funds excluded)
xepprt that' f-j " *' ' £ • ;> v I
ducive solely to bankruptcy. J
«> 1 %iZ
^
time and distance lost.
In' the event of
national emer¬
has risen from approximately $60
The Trade Agreements program
"Spot", Shortage of Oil
gency; they cquld produce
billion to about $170 billion. Since
has. run its course, as our remain-?
The Newsany
1947 hearings by our Committee
needed quantity of
fuels, orice the
ing tariff, rates. are now so low
Jan., 1946 it has risen about $20
proved conclusively that if we
Insofar as news events are con¬
necessary - large1 plants: were1 con¬
billion
that-our markets are accessible to
during a period when no
could retain our own steel pro¬
cerned, there have been two new
structed.
Pp* pP/PXtX
alf the world a nd consequently
government
bonds
were
issued
duction-' irr, thwCountry that ;withr"
items, and one that is always with
and when $25 billion riere actual¬
we8 have
no
further
bargaining us. The latter is that old
ii approximately a, year and a
4 Shorta sm Imp ossibl*-~Except
bugaboo ly retired. ; This new
money came
<
•
half -gais pipe lines; could bp cort- power;
the DEPRESSION
so freely
into being through the govern¬
The proposed International Trade
structed
from
East. Texas
and
predicted
ever since V-J Day —
"•••;'
t-ferencc
ment purchase of gold and the
^;;/•P p4v
other fields mto : the; northern ih^- Organizations under which 57 na¬ the others, the Russian situation
In. a dd itioin fo?the
'2% bjlliojq: bar-;
granting of loans by commercial
dustriil; areas displacing yri' con¬ tions, each with one vote, would and the Administration's anti-in¬ banks to individuals
and corpo¬
reft*pLfelbwri^etrole^
siderable
amount
of
the estimates of,
petroleum gather together once a year and flationary campaign.
rations.
Ihesyntheticoil
now used in that area.
Refineries divide up the remaining markets
and fuels
supply from oil shale
How long can this continue? In¬
TheRussianSituatioir
the
world
cbulcfcbe-established in the natural and^f production of
are more than 100
billion barrels!;
definitely, just so long as the peg
•gaa pfoduction. areas, manufacture among themselves^ isv the; culmi¬
arid
Insofar as the' Russian* situation
oT the^ synthetic*'.-fuels
from
is maintained, for with $60 billion
cdal; the supply is] fori ail pr^c- irig;^^solm&drbm thfenafuraUsasJ;: nating step in the present trend to is concerned, I have no special
in governments in the hands of
aridfe'l that \ addii ionak ^ necessary commit this country to free trade sources of information. I. note,
tifea-l
purposes,'1 unlimited;A Some
the
banks and a sure market for
and to complete the redistribution
however, that the London Stock their
engineers place it at 1,000 years. tarikers> arid^ irink, pars: could'^;be
sale—the amount of credit
manufactured. This' would avoid pf^VfO^lth^ V
■ . ! . . *
... • 'If.i
.
V Certainly'
Market, traditionally sensitive to
more' than* a hundred.
Which the banks can extend, thus
the wellrknown *:^spot" shortage
international news, has been ris¬
C/C/'
i years
supply fe: available- and. far
creating new money, is almost
of; oil which the evidence before
;iFbrtrieritly'16(>. years the shares ing since July 17, surely a sign limitless.
.' • p..'
our committee showed was
that best British financial opinion
'Of navigaMO* waters and
the; oils
-necessary;:
usually
This* great supply, of funds, will
•* '' i:PP';P
'irf*.-:?P
<i;>* doe solely to lack of facilities for under. them Werfe naturally taken does not seem to believe in the

A

~

Thd

fuels

will

report

the; provea production

Completed Secondaiy Reaction

area

''

■

.

•

1

-

-

.

—

—

-•

■

'

•

.

;

.

Jc SI rh tedlVGover
; ?'a,e ^-5 J5-J'

>

distribution.'; The pipe wotrld also1 fori

a

be availabte for the necessary ex¬
ploration and "Wild cat' '• drilling

those

Rantedproperties of imminence of
.'fSte'
■'which' in eluded the believe that
riivers'arid; ^itrearit systems Of ;the wish .to* own

; the ;

shooting war. We
who> do

not

continue
mand

to

„

effective

make

a

which still remains at

de¬
rec¬

ord

high levels in the heavy in-1
stocks during the
whiclris indispe^
period of our disagreements1 with dustries, - and ~ which" should be
riafiOrifurther stimulated by the require¬
great pains and apparent pleasure coyefy of additional; reserves.
;
This ownership by States was Russia, will be out of the market
ments of the ECA and national
in pointing out in
taken for granted and approved for
Sunday suppleyears
to
come,
for
all
experi¬
defense programs.
Sh^t From Ambush ''
mvnts and.
many times through the courts on ence
jriagsfzine articles that
with*
totalitarian- govern¬
I niention this unused German
we' have a very few
the long accepted theory that any
years supply
Conclusion
1
ments shows that these govern¬
steel capacity as a typical illustra¬
of petroleum and
powers or authority not specif¬
that, in the event
tion of the unpredictable chain of
4 Since the present decline has
ments continually provoke erises.
of .wary ,\ve would have no
ically transferred to the Govern¬
pe¬
causation, resulting, from governs ment
all the ear-marks of a completed
troleum fuels for the
of the United States were
Navy. There¬
The Deflationary Program
mentr. action, or inaction*, in the
secondary reaction in a bull mar¬
fore; «!the.f* pontend,';we*must saVe
reserved tp the. States;
field of economics arid trade. This
our visible supply and'
Had the President's deflationary ket, and since the news does not
import for¬
Z^The jTegai^
and the

plites

have^.lpr 15

years*/taken

•

eign oil for

'

•

consumption.
-There

our

normal domestic

-£;j\

never

was

a

greater fal-

*•

lacy
facts.

im
"

or

misrepresentation

If these

power

of

officials had

in

our

seriousriationwiderepercussions
our own

economy,;

Our* govern¬

been

arid' their
prevailed,




incident

economy, 3,000 miles away, caused

the in

.prior to- the larger dis¬

coveries- ofe oil arid: gas
"have not" policies had

seemingly; small

policy with respect to the German

<44

ment,
pursues

unfortunately •: too >often,
the currently fashionable

theorytt'fiat'

any

executive departments of the gov¬

program

ernment

business

have applied this rule of

property continuously during that
time; and the government itself
has in* many special cases pur

surely
some

been
and

have

been

time to

come.

chased and leased such lands from

little of it

the; States

the

for

Federal

use.

'teconomie^aifmerit ^/EvenAthe ;Secretary of interior

enacted

the

was*

statute

in

markets

toto,
would

unsettled-

However,

are

very

I

as

was-

shadowed from the* outset*

on

fore

/

to be of

a

nature

which

market—my opinion is that stocks

for

actually placed

books,

appear

will change the basic trend of the

a

buy.

would

whose

•

■

*

'

*•

favor, those

earnings

still

up-grade—steels*

mobilies, oils, etc.

industries

are

on

railroads,

the

auto-

'

36:
V

THE

(032)

Thursday, September 2, 1948

CHRONICLE

FINANCIAL

&

COMMERCIAL

o

Securities

in

Now

Registration
UK,*

•

•

Acala

'

Cotton

Mills,

stock (par $10). Price, par: No underwriting.
struction and equipping a mill.
'

June

Commuting,

Inc.,

For con

(letter of notification) 1,060 shares of capital
stock (no par value), of which 600 shares will be sold
publicly at $100 per share.
Underwriter — Burnham &

•

helicop¬
ter operation over routes which the company is presently
certificated to fly or in limited helicopter commercial
work.
Postponed indefinitely.- ;.V ;
7
*" * ' v • /
American Fidelity Fire Insurance Co., New

(letter

Central

York

of

1947

Arel

Inc., St. Louis, Mo.
23 (letter of notification)

Maine

•

1,900 shares of 6%
preferred stock and 1,025 shares of common
Preferred will be sold to the public at $100 per
and the common at $50 per share.
No under¬
For

Corp.,

Clearwater,

Fla.

Power

share. No

For working

Co.

($10 par) common. Under¬
for competitive bids Dec. 8,

called

share
tenth

Price

James A. Walsh, President of the Company.
~-F. Eberstadt & Co., Inc., New York.

Underwriter

working capital.

: Fission' Mines

Armstrong Rubber Co., West Haven,: Conn/ ..
July 8 (letter of notification) 1,000 shares of 4%% cumu¬
lative convertible preferred stock ($50 par). To be sold
at $44 each for Frederick Machlin, Executive Vice-Presi¬
dent and
Secretary of the company.
Underwriter—
F/Eberstadt & Co., Inc., New York.
■"

7

v

■

.

'•«

Bannockburn

Coo p era to r s,

Inc., Wash., D. C.
Aug. 30 (letter of notification 92,250 shares of common
stock (par $1). .Price, par.
No underwriter.
For the
development of a cooperative housing project on the site
of a golf course.
•
' ' <
'
•
,1

York City

Ltd.,

Toronto, Canada

/Flotill Products/ Inc., Stockton, Calif.
of 60 cent convertible pre¬
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 and 250,000
common
shares and company 125,000 preferred shares

March 6 filed 385,000 shares

ferred stock (par $5) and

and

75,000 common shares. Company's proceeds will be
general corporate purposes. Effective May 5.

used for
•

Founders

Mutual

Corp., Denvetv

Depositor

Colorado

plan certificates,
plan certificates
consisting of 75 accumulative plan certificates and 75
income plan certificates, both aggregating $124,400_; and
Aug. 20 filed 600 systematic payment
to be offered at>$1,500 each; full-paid

beneficial interests in Founders Mutual

.

Chieftain Products,

c

capital.

April 16 filed 200,000 shares of treasury stock.
Under¬
writer—Mark Daniels & Co., Toronto. Price—$1 a share.

Century Electric Co/ St. Louis, Mo.

'

1

mon.

011

Proceeds—For construction and

by amendment.

7

of 5% cumulative convertible
preferred stock ($25 par) and 172,000 shares ($1 par) 7
common stock/
(72,000 shares of common to be reserved
for conversion of the preferred.)
Underwriter—None.j
Price—$25 a share'for the prefeYted and $10 for the com¬

the basis of one-half
of new common for each preferred share and oneshare of new common for each common share held.
subscription

of cumula¬
No under¬
banks and

June 4 filed 36,000 shares

notification)

of

;

First Guardian Securities Corp., New

-

additional

(letter

Co., Bryan, Ohio

Bloomington, III.
Aug. 9 (letter of notification) 4,700 shares ($5 par) com¬
mon
stock.
Price^—$6.25 per share.
No underwriter.

Armstrong Rubber Co., West Haven, Conn.
30

(Paul; B.)

Eureka Williams Corp.,

August 23 (letter of notification) 25,000 shares ($10 par)
1,000 shares of 4%% V common stock. Offering—Common stockholders of rec¬
cumulative convertible preferred stock, ($50 par) and
ord Sept. 7 will be given right to subscribe oq or before
2,:000 shares of class A common stock. To be sold at $44
Oct. 29 on basis .of one new share for each 21 shares/
and $11.75, respectively.
This stock is being sold by
held at $12 per share.
No underwriter. To increase
;

June

stockholders.

Elder

provide working capital.

to

.

<

.

(letter of notification) 1,000 shares
tive preferred stock (par $50)'.
Price, par.
writer.
To pay current borrowings from

repyament of bank loans.
working capital.
is;
;' >
-77'7777'' /.
777
Central Power & Light Co.
Arizona Edison Company, Inc., Phoenix, Ariz.
Nov. 21 filed 40,000 shares ($100 par) cumulative pre¬
Aug. 25 Xletter. of notification) 24,000 shares ($5 par)
ferred.. Undeiwrltei^-^ehirm
Brothers; Glore, Forgan
common stock.
Price—$12.50 per share. Underwriter—'
*& Co.; Dewar, Robertson & Pancoast negotiated a pur¬
Kefsnes, Ely, Beck & Co., Phoenix-, Ariz.
To partially - chase contract in April, 1948, but the SEC on July 27,
repay bank loans and to .provide funds for the construe- ;
1948, concluded that financing by the proposed preferred
.tion of, additions and improvements to, the company's
stock issue is not necessary.
properties.
»' •
•
;
writer.

.

Aug. 26

and

stockholders for

cumulative

share,

To selling

only one bid, that of Blyth & Co., Inc. and
Kidder, Peabody & Co. was submitted and was rejected
by the company.
They' bid $13.75, less $1.75 under-,
writing commission. Now expected on negotiated basis
through Blyth & Co.,'InC. &nd Kidder, Peabody & Co;
Offering—To be offered to 6% preferred and common

right to subscribe to the stock on basis of one new share
of preferred for each share of preferred or four common
held.
Rights expire Sept. 9, 1948. Expand fire
insurance business. No underwriting.

stock.

Conditioning

writing—Company

shares

August

:7.777>/7.-7;'V

Me.

Eastern Corp., Brewer*

•

August 26 .filed 25,000 shares, ($10, par) common stock.'
Underwriter—Carl M. Loeb, Rhoades & Co. Proceeds-/*;

Nov. 10 filed 160,000 shares

notification) 20,000 shares 80c non- 1
convertible preferred stock
(par $5).
Price—$14 per
share.
Stockholders .of record. July 15 are given the

•

Central

sold at $100 per share and common at $1 per
underwriter. To start business of corporation.

.

v

ISSUE

August 24 (letter of notification/ 1,970 shares of preferred
stock and 992 shares of common stock. Preferred to be

Proceeds—To be used to engage in limited

July 2

PREVIOUS

.

17

Co.

SINCE

August 19 filed 6,177 shares of 4% convertible preferred
•stock ($100 par).
Offering—To be offered to present
holders of preferred and common stocks and to the extent
unsubscribed by them, to certain key employees and
officers
Price, by amendment., Underwriting—None.
Proceeds—For additional working capital.

N. Y.

White Plains,

ADDITIONS

/ Carpenter Paper Co., Omaha, Neb.

Inc., San Francisco, Calif.

Aug. 26 (letter of notification) 22,000 shares of common

Air

INDICATES

Fund, viz.; 50,000

systematic payment plan certificates, at market, $286,000;
20,000 accumulative plan certificates, at market, $124,400;
and 20,000 income plan certificates, at market, $124,400.

Inc., Brooklyn

Aug. 3 (letter of notification) 25,000 shares of common
stock and 20,000 warrants. Offering—10,000 shares and

777

(15,000-warrants to be offered in units (one common
share and, IV2 warrants) at $2,75.per unit, tji§'balance
of 15,000 shares being reserved for exercise of 15,000
warrants/purchasers of which will have the right for
four years to purchase shares at $2.75 per share.
Gen¬

;

,

.7/ >'

7//;.

7'7

.

'7/

5 7,.. %-f 7;7\;'7' 77/ ''v' 7/7 ^ 7'/.;v

f 7"..'\V\l7-;7'•//.

/'

Fuller Brush Co., Hartford, Conn.

July 12 (letter of notification) 3,000 shares of ($100 par)
preferred stock.
Price—par.
To raise working capital
and retire existing indebtedness.
No underwriting.
v"\

7*"

r

'

'

'7*

'

*''''

1

!

•.

i-V-1.

.

\

-

7^5

'

t

"'7

Gauley Mountair^ Coal-Co., New York
itAug. 13 (letter of notification) 6,093 shares of capital
7
,
*
stock
(par $10).
Price, par.
Stockholders/of record
:7'7/777 7:**\'' '•?./7.7/■ "7. •. ;a 7-..-' :7777;/ -7.; 7 '- ;
^77/777
Clarostat Mfg. Co.; Inc., Brooklyn, N., Y. (10 1) i/ Sept. 1 will be given right to subscribe at rate of one
new
share
for
each
five
shares
held.
Rights expire Oct.
;.n•
*;
/• 7/ .'77 i;\T<>7;7/,7./-.v7//:,;7\7"•
'77.•>.
Aug. 26 (letter of notification.) 737,400 shares of 500
15, Underwriting—None. General improvements^ etc.; ;
cumulative convertible preferred -stock;--Underwriter—
\
Berry(D.N.)Co.,Denver,Colo.
Aug. 13 (letter, of, notification) 1,512,660 shares (iOc* Cantor, Fitzgerald-& Co., Inc;T NewYortc/zPriee-^S per.
•
General Stores Advertising Co., Inc., N. Y.
par) common stock. Offering—1,03^,550 shares will fee 1 shares Working capital, etc.
Aug. 27 (letter of notification) 1,500 shares of common
.offered to the public, 222,000 shares - to employees and
stock (par $100).; Price—$100 per share;- Underwriting-^
Cobalt Mines Corp., Newark, N. J/
215,110 shares will go to the underwriter/ . Price—10 /
None, Pay current operating expenses, etc, *
cents per .share.
July;20 (letter of notification)' 290,000 ^ares o£,common
Underwriter—John G. Perry & Co.
•
Group Housing Cooperative, Washington, D. C.
stock-.
Proceeds—For
Price-r$l. per share^; Unden^iter^CJiarj[oayT^/ *
purchase of building and machinery,
Aug. 30 (letter of notification) 900 shares of common
Warshoff & Co., Newark, N, J.
balance for working capital. I. , v
To,meet obligations.
stock (par $5).
Price, par. Underwriter, Bannockburn
Coleraine Asbestos Co. Ltd., Montreal, Canada
Cooperators, Inc. (which see).
To pay administrative
;
Borderminster Exploration Co, Ltd;, Ottawa/
expenses
and
finance
general educational work on co¬
7 ) . Canada
Aug: 10 filed 200,000 shares of capital stock.
Price—
operative housing.
50 cents per share in Canadian Currency.
June 2 filed 500,000 common shares ($1 par). UnderUnderwriter
eral

corporate
New York.
',

purposes.-

.

Uhderwriter-^Dunne & Cot*
,

,

,

,

,

•

-

•

.

•

.

•

...

,

.

•

.

t.

4

>.

writer—Mark Daniels & Co.

Price—40c per share Cana-

—P. E. Frechette..

Proceeds—For' drilling operations*

;f'Tdian. funds. Proceeds—For exploration of properties.
Consumers

Boston Insurance Co., Boston,

Mass.:

7

11 filed 100,000 shares ($10 par) capital stock.
Offering—Offered for subscription by stockholders of

August
'

7

;

non-dividend common stock ($25
par); $6,000,000 of 3'%'% five-year and 4^%710-year
cumulative certificates of indebtedness; and $2,000,000 of
\Vz% demand and 21/2% 6 months cumulative loan cer¬
tificates.
No underwriting.
Offering—Offered only to.
stockholders and patrons and members.
Priee—At face
amount.
Proceeds—For acquisition of additional office
and plant facilities.
7

shares held.

Rights will expire about Sept. 17. Under¬
First Boston Corp. will purchase unsubscribed stock. Proceeds—For additional capital funds.
writer—The

•

77;

Oct. 16 filed $3,000,000

record July 28 on basis of one new share for each three

; -

Missouri

Cooperative Assoc., Kansas City,

Bridgehampton

(N. Y.) Associates, Inc.
(letter of notification) ,1,384 shares of capital
(no par).
Price—$10 per share.
Underwriting—^
7. None/ Pay mortgage indebtedness.
:
^
Aug. 24

'' stock

Douglass
Maine

;

Buhner Fertilizer Co., Inc., Seymour,

Manufacturing

Portfand,
7-77-77:7'77^:7 f/'77;

C0.7 lnc.,

(letter of notification) $100,000 of 5-year 5%
convertible debentures, with non-detachable stock pur¬

Aug.

Ind.

16

17Aug. 11 (letter of notification) $300,000 sinking fund/
5%7debentures, due Aug. 1,. 1958.
Underwriter—City : chase warrants; 10,000 shares of common stock ($1 par)
.^Securities Corp. Proceeds—to redeem $90,000 of pres¬ ^reserved for conversion of debentures; and 10,000 shares
($1 par) common stock reserved for exercise of warrants.
ently outstanding 5% sinking fund debentures and other
Underwriter—Minot, Kendall & Co. For working capital.
5 corporate purposes.




•

Hall

(C. M.)

Lamp Co., Detroit

Aug. 2 (letter of notification) 53,770 shares of common
stock (par $5) to be offered to stockholders of record
Aug. 30, at par. For advances to a subsidiary, Indiana
Die Castings, Inc., and to improve shipping and storing
facilities. No underwriting. 7 77

Heidelberg Sports Enterprises, lnc.v
Pittsburgh, Pa.
.
June 25 filed 2,041 shares of class A common stock and
5,000 shares of class B common stock (par $100). Price
—Par ($100 per share)/ Underwriter—None.
Proceeds
—$600,000 to be used for spectator grandstand and bal¬
7

ance

for

related purposes.

;

//

,

-

\

Heyden Chemical Corp., New York,; N. Y.
June

29

filed

59,579

shares of cumulative

7-j7

convertible

(no par) to be offered common stock¬
for each 20
stock held. Price-TBy amendment*
Underwriter--^A. G. Becker & Co. will acquire, the um

preferred stock

holders in the ratio of one share of preferred
shares

of

common

A

Kansas

NEWSeptember
ISSUE CALENDAR
7, 1948
Common & Pfd.;

Products, Inc

Soya

Debentures

Sterling Oil & Refining Ccrp,..;

September 8,'.1948
JVIinit-Man Operating Corp
Common
Wheeling & Lake Erie Ry.___.^_Equip. Trust Ctfs.

1

10,

September

Trenton

1948

1

-Preferred

September 14, 1948
Indiana & Michigan Electric Co.,
11:30 a.m. (EDT)

—Bonds

1948

15,

September

Holly .Sugar Corp.-!—-..

Midland

Preferred

—

September
Wood

-'Iv.

Common

(Alan) Steel Co.—„

—.

—Bonds

.1' ''

and

Goldman,

Wholesale,

Cooperative

Minneapolis,

Co.

•

j#

Minit-Man

Operating

Corp.,

4

,

,

,

1

/

'

*

;

*

Jaffray & Hopwood, Minneapolis.

.

1

V

National

Mont.

Bids—Bids for

/

'

.

Quebec:

■

,

.

r

.

construct milling* plant and
' ♦
.

.

Soya Products Co., Inc.

(letter of notification)

Kold-Hold
•

Aug. 6 (letter
/common stock.

'

Manufacturing Co., Lansing,

of notification)

Mich.

spent for general corporate purposes and

bonds,

1955.

due

Northern

Illinois Coal Corp., Chicacgo,

III.

total cash consideration of not more

a

than $100,000.

filed

share.

.

on

a

Lamex Chemical

.

-<.i

be sold in units of

one

share of

—For

one

bills.
1

company,

f

''"fi

Stock ;will

be

sold

to

present

j i^per share. No underwriting.
"f working capital. ' :
Maltine Co.,

New York

warrant

Price—$15

per

for

$3;

Proceeds—For additional

4/./•;
common

shares (par

/ 20 have the right to subscribe on basis of one new share"

•

1

/ for each 15 shares held. Rights expire Sept. 20.
writing—None.

L

Additional

working

capital.

Under¬
-/"V-':k

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.




C.,

off loans and for /other purposes.

(9/17)

Aug. 24 filed 22,000 shares of $2.60 cumulative (no par)

Underwriters — Paine, Webber, Jack¬
Curtis;'; Stone/ & Webster Securities Corp.; Rauscher, Pierce & Co.
Price by amendment. Proceeds—
To pay, in part, bank loans used for construction pur¬
poses.,"'';
' '*
'
preferred stock.

son

&

r

Squankum Feed Supply Co., Inc.,
Jersey

Farmingciale,

-

4 (letter of notification) $150,000 20-year 5^%
sinking fund debentures.: Price—102.
Working capi¬

Aug.

tal, etc. Underwriter—Fidelity Securities & Investment
Co., Inc., Asbury Park, N. J.
; / ; ./y
/

,

•

State

Aug.

30

common

Bond

Mortgage Co., New Ulm, Mirnr.
460 shares ($100 par)

(letter of notification)
stock.

Price-^>125 per share.

holders will have right to purchase
for each share owned at the date of

writing.

Present stock¬

46/54ths of one share
offering. No under¬

To increase capital funds.

'

b /

Francisco,

California

Offering—To be offered to common

stockholders of

in ratio of one new share for each three
shares held. Rights expire Sept. 30. Price—$4 per share.
Proceeds—For working capital.
.,
'
'
.1

(9/21)
20 filed $75,000,000 35-year debentures, due 1983.

August
Underwriters—Names

to

be

determined through

com¬

Stanley &
reimburse (

Sterling Oil & Refining Corp; (9/7-19) •
.7
10 filed $2,500,000 4J/2% income debentures, due
1963 (with 10-year subscription warrants attached
for initial purchase by stockholders of 80,000 shares no
par common stock).
Underwriter—Kidder, Peabodyf&
Co. will purchase all unsubscribed debentures or stock
warrants for public offering.
Proceeds—For. general
corporate purposes.
\ ! 1

Aug.

Oct. 1,

& Telegraph Co.

petitive bidding. Probable bidders: Morgan
Co* Halsey/. Stuart & Co. Inc.-Proceeds—To

Siatton Furniture * Manufacturing Co.,
Hagerstown,- Md/h/

August 24 (letter of notification) 451 shares ($100 par)
6% preferred stock. Price—$90 per share. Underwriter
—Cohu & Co. For general working capital,

record Sept. 15,

Pacific Telephone

share. Stockholders of record Aug.

B.

Southwestern Associated Telephone Co.

Aug.' 20 filed 184,245 shares of common stock ($5 par).
Underwriters—Blyth & Co., Inc., and Schwabacher &
Co.

*

and Richard K. Fudge and Victor Semenza, co¬

ment work, tp: pay

,

[

Aug. 11 (letter of notification) 4,871

y $1).

holders

Indefinite.

partners of Pennaluna & Co.
Price—300 per share U. S.
funds.
Proceeds—For exploration and other develop¬

UC

-

Lithium Corp., of

purposes.

Ridge Mining Co;, Ltd., Nelson,

Aug. 24 filed 1,106,600 shares of common stock (500 par).
Underwriters—Harry P. Pearson, managing director of

(par $5).

,r_

Pacific Coast Aggregates, Inc;, San

America, Inc.,. Minneapolis ^
j:Aug. 13 filed 100,000 shares of common stock ($1 par).
:

general corporate

New

stock

poses

7

Co.

Canada

^

share

ofipreferred at $5 per unit.
Underwriter—Mallory Se:.;i curities Corp.
For working capital and the payment

7. ■

■.

and

;. **

Underwriters-^-

shares of common stock reserved for
Underwriter—Lee Higginson Corp.h Proceeds

Silver

Underwriter—First Securities
Offering—26,667 shares will be
"when, as and if issued" basis;
...

share.

attached and 25,000

13,333 shares will be purchased by underwriter for pub
or private offerings; and the remaining 40,000 shares
Will

common

act

warrants.

i

r)

V

as

(9/10)

5,620 shares of common

per

of America, Columbus, O,
preferred stock
(no par), with class A common share purchase warrants

nc

-

Corp.;Birmingham, Ala*

&

will

Price—$7.25

June 28 filed 25,000 shares of cumulative

JJUUlXCl,y
UUCltU
Vll
a
will be publicly
ofiered
on
a
"best efforts basis" ;on
completion of the subscription of the first 40,000 shares
and the company's receipt of a license to do business in
jAug. 23 (letter of notification) 25,000 shares ($5 par) / and the company's receipt
?*/6% preferred and 25,000 shares (100 par) common.
To
North Carolina.
Proceeds—For general business pur-

'%; Buckley Securities Corp.

Eastman

Insurance Co.

,

(letter of notification)

(par $5).

■

100,000 shares of capital

per

before Sept. 1, 1950,

Shoe Corp.

New York

49,000 shares 350 cumula¬
tive preferred stock (par $5) and 49,000 shares of com¬
mon stock (par 100).
MCe—$6 per unit, consisttng of
one" share of each.-' Working Capital and other' general
Corporate purposes.' Underwriter — Aetna Securities
Corp., Nbw York.

24

on or

St. Anthony Mines Ltd., Toronto, Cam
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.

notification) not to exceed the balance
4,100 shares (no par) capital stock, out of 5,000 shares

initially offered

Underwriter—

Meter:;&

Van

and Grabau-Buchman, Syracuse, N. Y.,
selling agents.
Development of air-condi¬
tioning-units, etc.

finance modernization of stores.

Corp., Durham, N. C.

Shares will be issued to H. B. Johnson

debenture

stock

Price—$15

/and J,, J. McQuaid on conversion of $55,000 of 5% convertible

and Merrill

Old North State

($1 par)

36,666 shares

funds).^Underwriter—Hiscox,

Remington Corp., Cortland, N. Y.

Aug. 31

June

^
:

•

Underwritcrs-^Hemphill, Noyes & Q9.
Lynch; Pierce, Fenrier & Beane. Proceeds—

by underwriters.

(9/21)
August 20 filed $12,000,000 first mortgage bonds,; due
1978, and 285,713 shares of common stock. Underwriters
—Underwriters of bonds will be determined through com¬
petitive bidding. Probable bidders for the bonds: Mor¬
gan Stanley & Co.; Glore, Forgan & Co.; Shields & Co.
and White, Weld & Co. (jointly); Halsey, Stuart & Co.
Inc. Offering—Stock will be offered for subscription by
common stockholders at rate of one share of each seven
shares held of record Sept. 22. Commonwealth & South¬
ern 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
Co., for construction of its own and its subsidiaries, and
for prepayment of $3,125,000 of outstanding instalment
notes. Expected Sept. 21.
/

(9/7)
78,000 shares (25c par)
common stock and 1,925 shares of $5 cumulative preCerred stock.
Underwriter—Kenneth Van Sickle, Inc.
For additional working capital.
*."
;•
/
2

' Any of the remaining 98,640

purchased by stockholders will be taken up

Ohio Edison Co., Akron, Ohio

under a merger, and for treasury
the purchase of the bonds will
Service,

-—$1 each. Proceeds—-To
purchase equipment.
Kansas

purchase 29,590 shares.

Official Films, Inc.,

'

I

Canadian

Chicago .-' (^/lS)

negotiated.:'V^;;'7

Quebec Oil Development Ltd., Montreal, Can.
Aug. 4 filed 2,000,000 shares of capital stock, ($1 par
-

July 16 (letter of notification)

jam 30 filed 1,500,000 shares ($1 par) common stock.
Underwriter—Paul E. Frechette, Hartford, Conn., is the
XT. S. authorized agent and principal underwriter. Price

Aug.

Co.,

sale will be
:

to

(9/14)

:

v

Tea

posed sale from the competitive bidding rule so that the

No underwriter.

Corp., 30 Church St., New York, before 11:30 a.m. (EDT)
Sept. 14.
International Asbestos Co.,, Ltd.,, Sherbrooke,
•

Share

1,000 shares of capital stock of the company at $1.50 per
share. Proceeds—For drilling operations.

for

be received at office of American Gas & Electric

/

Morgan Stanley & Co.

prepared to submit July 7.

titling the holder to purchase,

of

ding. Probable bidders: Halsey, Stuart & Co. Inc.; The
|, First Boston Corp.; Lehman Brothers; Dillon, Read & Co.
Inc.; Harriman Ripley & Co.4 Proceeds—To prepay $6,000,000 of bank notes borrowed for cdnstruction and
$10,000,000 borrowed by Indiana Service Corp. and as¬
funds.

was

for

•

July 14 filed $25,000,000 first mortgage bonds, due 1978.
Underwriters—To be determined by competitive bid¬

sumed by the company

Co.xon Aug. 4 bid.100.90 for

Weld

Proceeds—To retire .l.;and associates bid* 100.55 for $4.50 dividend stock; the

Aug. 27 (letter of

capacity.

"

/;,/

to

to

Price—$300 per unit, consisting of two shares of

Electric Co.

Co.llll

Underwriting—The SEC on Aug. 23 exempted the pro-

Bond

To restore cash

y'.:1' preferred and 10 shares of common stock.
Proceeds—To
erect and.operate a bleached sulphate pulp mill with a

|

Electric & Gas

Co., Inc.; Price, $1 per share (United States funds). For
each 20,000 shares of stock sold, the company will de¬
liver to the underwriter stock purchase warrants en¬

shares not

May 17 filed 100,000 shares of 4% cumulative preferred
stock ($100 par) and 500,000 shares ($10 par) common
stock.
Underwriter
Tom G. Taylor & Co., Missoula,

Indiana & Michigan

I'/v'

;

-..".v.,

.

purchase, on ;or before Sept. 15r one: common; share
each five common shares held, at $20.50 per share.
Certain stockholders have agreed to exercise their rights

existing plant.

200-ton per day

i:.

Aug. 6 filed 128,230 common shares ($10 par). Offering
—Common stockholders of record Aug. 30, are entitled

| V JEJughes & Co. For new plant, construction and improve¬

Mont.

.

*

sold from the estates of two deceased persons.

/August 16 (letter of notification) $50,000 first mortgage
5% 20-year (closed) bond issue. Underwriter—E. W.

Idaho-Montana Pulp & Paper Co., Poison,

Underwrit¬

200,000 shares ($100 par) cumulative pre¬
ferred stock. Proceeds—For property additions and im¬
provements. Bids—Company, Aug. 4, received two bids
on
the proposed ; issue of 200,000 shares of preferred
stockj but rejected both. On July 7, last, the same issue/
"the management declined to
group headed by the Union Securities

9/22*24)
Aug. 13 filed 31,000 shares (110 par) capital stock. Un¬
derwriter—Blyth '& Co^ Inc. ProCeeds-r-Stock is to be
Nationa I

'

ment of

share.

$240,000 payable to Commonwealth Trust Co|

Public Service

Temporarily deferred.

'

'

per

$3,OOOiOOO^bf bank loans and general corporate purpbses,»on* July 7,-;'

.

.

.

t

'

Price—$5

t

June 11 filed

Co., New York; Piper,

derwriters—Goldman, /Sachs &
"

*

.

;
■
^
| h; subscribed shares.' -Proceeds—To be used in part for imi .' provement and-expansipn of manufacturing facilities,
Offering postponed.*,4
*
*x\'I,
Holly /Sugar Corp; • (9/15)
August 19 filed 185,000-shares ($30 par) cumulative preerred stock, convertible into common stock.
Under*
| 4 writer—Central Republic Co., Inc. Proceeds—To reduce
:; vshort-term bank loans of $16,900,000 incurred for the
'.'purpose of producing and carrying inventories.
<
H Hygenic Service Co., Boulder, Colo.
•

(par $5).

/

common

Drilling, Inc., Casper, Wyo.
July 14 (letter of notification) 800,000 shares (250 par)
common stock.
Price—25 cents per share.: Underwrite*
—John G. Perry & Co.
For drilling operations. ///. * /

.

...

|

Reflector Co.

^hares ($50 par) convertible pre-stock with a $4 50 dividend, which compared with the
ferred stock. Price and dividend, by amendment. Unbid of 101.65 for $4.40 dividend stock which this group

1948

Clarostat Mfg.- Co,-__ _—-:-TC i.i—.1 >-Preferred
-

•

stocks

July 14 filed-65,000

r

__-Equip. Trust Ctfs.

and

Powers Oil &

(9/8)

York

New

>

1948
.

•

(Pa.)

-

-

«

of

Pittsburgh.

1

1,

Pittsburgh

notes

.

.

stock
Drexel e

common

common

ing—None. Increase working capital ($60,000) and repay

''Stock(par'$5)J"UnderwriteT|rPenryP.iRqsenfeid.C6.,

October

par)

Corp.

of record

class B stock

(>l>'• XTat*»'•. '2VavIy r*-U««,{-i.noch.11 rf v/ Aotsif 'Ar%^

-

(no

Boston

Aug. 27 (letter of notification) 60,000 shares of

Sbptei^er 28, 1948
Metropolitan-Edison Co;___---Bonds and Preferred

*

shares

First

Sept. 8 at rate of one new share for
each eight shares of common stock held.
Rights willj
expire at 3 p.m. (EDT) Sept. 23. Price by amendment.;;
Proceeds—To finance company's construction program.

Minn.

inventory and accounts receivable.

4;Cl'

-

316,863

Ottering—Stock will be offered to

holders

Aug. -30 (letter of notification) 300,000 shares of common

'i&f;

filed

17

Underwriters—The

second, third and fourth quarters, respectively,
they are sold, representing an allowance for
dividends. ■ Proceeds for additions and improvements,

1948

September5^29,

37

''"u"

which

in

;

-' Southern
Ry._*_-

(933)

CHRONICLE

11''

for the

"

■/September 21,

-J| '

Aug.

September 17, 1948
Southwestern Associated Telephone Co,.^Preferred

'

FINANCIAL

K'

9 filed 15,000 shares of Preferred stock D, noncumulative ($100 par).
.Underwriting—Non^. .Shares
are «to be sold at par," plus a premium of $ 1, $2, and $3

1948

16,

National-Tea Co

:

/ •'

■■

Aug.

___Equip. Trust Ctfs.

Co

Chemical

•»

Sachs & Co. (jointly).
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
used as a partial payment to subsidiary, Edison Light &
Power 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.
Expected Sept. 28. V

1948

13,

September

w

Co.,

&

Barney

—Common

Central RR

«•'

''

■

Proceeds—To the proceeds company

Remington Corp.
New York

'•

Underwriters—Names to be determined ' through'com-" {hat of its subsidiary, Bell Telephone Co. of Nevada,
petitive bidders. Probable bidders for bonds include
Expected Sept. 21.
The First Boston Corp.; Drexel & Co.; Glore, Forgan &
e
Pedco Laboratories,
Inc., Washington, D. C.
Co.; Halsey, Stuart & Co. Inc.; Harriman Ripley & Co.,;
Aug. 27 (letter of notification) 200 shares (no par) com¬
mon stock.
Inc.; Kidder, Peabody & Co.; Salomon Bros. & Hutzler.
Price—$50 per share.
No underwriter. For
Bidders for preferred stock probably will include Drexel
benefit of Garrett W. Peck individually,
;• /.://.•
& Co.; Glore, Forgan & Co.; Harriman Ripley & Co.; Kid¬
:0: ! Pennsylvania Power & Light Co.
der, Peabody & Co.; Salomon Bros. & Hutzler; Smith,

.

fll

&

COMMERCIAL

THE

Number 4730

Volume 168

;

•

Sunny Hills Mutual Water Co., Fullerton, Calif.

38

(934)

THE
'"

'

■

"(Cont/ntie'd from

Tabor Lake Gold Minos,

April 2 filed 300,000
Underwriter—Mark

Price—60 cents

shares

•

•

.

&

$1) preferred stock.
Co., Toronto, Canada.

Tide Water

Power

//..
•

/

Edison

< no

:

'

"

v

»r-

•'.»•

Automobile

-ja

'-7;

Insurance

>*:

Co., b

Calif.

Royalty Co.,

the. basis of

Denver, Coio.

stock equity of Southwestern Gas
of Central Power & Light- Co.

of. $47,000,000

of convertible

sion

which

Western World Industries

•

To make

a

non-assess¬

No under-

?

Whitman

ible

& Sons, Inc., Phila.v

stock ($2 par).
Underwriter—
Co., Detroit.
Offering—To be offered at $2.25
per share.
Proceeds—To build and equip a plant and
replace working capital.
&

United Casualty/Co., Cedar

Rapids

a|id

Detroit/Edison Company
on

approving-an. issue

program

is

debentures.

under

Probable

way.

biddejrs:

Wood, Jr., & Co., Philadelphia;
.

*

j

i

•

New

York Central RR,

<9/13)
'
The-pqmpany has issued; invitations, for -bids "to*, tie re*,/
ceived"
S^Ph 13 for $13,800,008\equipment trust certifi¬
Proceeds—To sell¬
cates. The certificates will be dated Sept:-15.-1948, ahd
»•
y '
f
are

Wisconsin Power & Light Co..

.;

.

.

lo mature in 10 equal annual instalments from Sept.

15,^1949 tp Sept. 15,;f958. iProbabfe bidders: Halsey,

|

-

Stuart & Co.. fne:;- The1 First (Boston Corp.;. Salomon.

Aug. 17 filed $5,000,000 first mortgage: bonds,1 series C.!
due 1978, and 320,232 shares ($10 par)- common
stock.,;

Br^s.

&

Hutzler;-Harrirnan Ripley & Co. and Lehman Brothers
(jointly).
vl vi,
..
i,.'^
f

Underwriting—Bonds will be sold at compeftitive bidding.
Probable bidders: Halsey, Stuart & Go. Inc.; Lehman

Class B preference

Carr

& Electric .Co,

:

(Stephen F.)

ing stockholders.

Chemical CO., Detroit, Mich,
-f 9/13-17 j •
Aug. 23 filed 175,000 shares of 6% cumulative convert¬

The

The First Boston Corp.; Halsey, Stuart & Co. Inc.; Dilldn,
Read & Co.; Coffin & Burr, Inc.,, and .Spehcer Trask5 &

loan.

Toy Pop Corp.* New York
Aug. 16 (letter of notification) L000 shares of 2nd 5%{
Aug. 26 (letter of, notification) 15O,QO0 shares of class A'
preferred stock (par $100).
Price,'par. Underwriter— {.:
i( voting) common stock (par $1).
Price—$1.25 per ;

Trenton

j

Proceeds will
provide the company with sufficient construction funds
to carry it until late in 1949 on the
$100,000,000 expan¬

Inc., Salt Lake City, \

>

A. C.

/;

share for each 19 shares held.-

new

•

Aug. 27 (letter of notification) 10,000 shares
able common stock (200 par).
Price—500.

Underwriter—Ackerman, Conte, Maftielli 6c Co.,
Purchase of factory in Connecticut, pur¬
chase of- machinery, etc.

one

October 26 stockholders will vote

writer.

York.

West Corp:.

South

Aug. 26 (letter of notification) 50,000 shares of commoni
stock (par $1).
Price—$1 per share. No underwriter.
For operations and to acquire interests.
•
I

Utah

share.

&

net proceeds of the sale will be invested in the commbn

Western

•

New

Centra I

Sept. 21 stockholders -will vote ph incifeaising authorized /
capital stock from 6,600,000 shares to 3,000.000 shares
(par $5). Theccorpjoration. bontemplates the issue apd
sale in 1948 of approximately1 660,000 "additional shades
Of common stock, such chafes to be offered in lhev fifst
instance to the stockholders for subscription by them hn

•'

-

jI

Prospective Offerings
•

,

Co*

-

7

Pioneer

Thursday, September 2, 19£ft

Reno, Nev.

Aug. 25 filed 18,000 shares of common stock (par S10). ?
Underwriting—None.
Price—$20 per share. Proceeds—j
Engage in automobile insurance.
>.
' j
•

August 19 filed $5,100,000 first mortgage bonds, due 1978.
Underwriters—Names to be determined through com¬
petitive bidding.
Probable bidders include:
Halsey,;
Stuart & Co. Inc.; The First Boston Corp. and Glore, Forgan & Co. (jointly); Lehman Brothers and Bear, Stearns
& Co. (jointly); W. C. Langley & Co.; Kidder, Peabody
& Co., and White, Weld & Co. Proceeds—For construc¬
tion.

'.H*• *\\ ,'r%*',(.'*

Oakland,

par) common stock. Tnderwriters—Union Securities Corp; and W. C. Langley &
Co.
Price by amendment.
Proceeds—For construction.
Indefinitely postponed.
\
V '
Toledo

v

Western

Wilmington, N. C.

Co,,

& Sons, Inc.,

,

Proceeds—For mine .develop*

Qients,

July 30 filed 80,000 shares

Walker>(i. R.)

Aug. 27 (letter of notification) 8,000 shares of non-assess- I
able common stock (par $10). Price, par. To retire In¬
debtedness, purchase additional building supplies and f
for working fund.
•
i

Ltd., Toronto, Canada

(par

Daniels

share.

a

page 37)

COMMERCIAL & FINANCIAL CHRONICLE

•:

Pressed

Metals; t>f- America,' Inc.

C;

;

Sept 15 stocldmlders w^ill vdte o'u ^
Brothers; Salomon Bros. & Hutzler; Rlyth & Co., Inc.;
issue of
'•Wheelock ^ Cummins, Inc.; Glore, Forgan.6c jCa.
and] 67^500^ shares of 5% cumulative
Harriman Ripley & .Co.," Inc." (jdfntly); Shields- ^^&^vv:;(non-^articipatihgj',f^
increashiL
White, Weld^ ;& Co. ahd Kidderv Peabody ;& Cto. ;(iblntly):;}
authorized ^ cbmmoriu;tp„'^^vidc f
Harris, Hall ^ Cbv0nc?)lThe ^i^B«^it.Cbr^;; OffcrM ^^Te^
iihdei^rxilhg vsjtahgem^s lia
Sng—The additional' Shares of .epmrnon stock;are. to be*
and .it is. expected: tlxat^$1^200,000,which
offered to common stockholders; of record;^:Sdpt;;i3 Tor 1; ^Tbtenased for.c^pansk^
ft ;7 V- \ J

*
August 18. (letter of . notification) 10,000' shares* of con¬
vertible cumulative preferred stock ($10 par),with priv¬
subscription at■ $13.50 per share.•:a't'';thc; rate • of* cMie',;a4di-"r"'''" SoutHern'^RaiiwSy'^(-9729'^
ilege of conversion^ at any: time before redemption on a
j'''
share-for-share basis for common stock ($10 par). To be " l;faOnat share for each four Glares held.^ Proceeds^To
August 26 reported- C0H^afty;^as,;ii^e^ .consideration
reimburse company for construction expenditures made / -1—
-*
--—•
offered at $25 per share - without underwriting. ^ To in¬
^ans for $ale hi appi^xJmate^lS^TQO^OOO InHequipmeut;
or to be made, except that $494,000 will be used to pre-"
crease capital-and, surplus.
trust certificates. The bffetf h&it^^ is ^expected;, will comq
pay a like amount of outstanding 2% serial notes. ,
^ up fpi?: bidding on or about Sept. .29.- Probable bidders:
United Utilities & Specialty Corp.
Harriman Ripley & Co. find Xebmari Brothers., (jointly):
Wood (Alan) Steel Co. (7/16-22)
Halsey, Stuart & Co. Inc. ^Salomon Bros. & • Hutzier; Trie
July 29 filed 41,0C0 shares of 5% cumulative convertible
First Boston Corp.; Kqhn, Loeb & Co., and Blytli &
Aug. 25 filed $6,300,000 first mortgage sinking fund
preferred stock ($10 par).. Underwriters—Herrick, Waddell & Reed, Inc., and George R. Cooley & Co., Inc.
bonds, due 1963. Underwriter—Drexel & Co. Proceeds—
Co., Inc.
' V
Will
be
Proceeds—For general corporate purposes.
used, together with treasury funds, to completer
•
Wheeling & Lake Erie Ry. (9 8)
the purchase and installation of a 30-inch hot-rolled,
Company will receive bids up to noon Sept; 8 for the
Verney Corp., Boston, Mass.
strip mill and the construction of accessory equipment.'
purchase of $1,600,000 equipment trust certificates, series
August 20 filed 100,000 Shares of ($2.50 par) common
Q, to be dated Sept. 1, 1948, pnd due semi-annually
stock owned
by Gilbert Verney, company President. ,:::f;:7^Yeakiey;pil:JGo^^imosi^^fe
March 15, 1949-Sept. 15, 1958.
Probable bidders: Halsey,
Underwriters: White, Weld & Co.; F. S. Moseley & Co.,
April 30 filed 10.000 shares of common stock (par $10).
Stuart; & Co; Inc.; Harris, Hall & Co. (Inc.): Salomon
and Paine, Webber, Jackson & Curtis. Price, by amend¬
Underwriting—None.
Price—$10 per share. Proceeds—
Bros. & Hutzler; Harriman
Ripley & Co. and Lehman
ment.
' ■
'•
Mainly for development.
Brothers (jointly).
.•

^

and

(Continued from pa^e 8)
spending machinery in Washing¬
ton, $1,429,000,000. This is a bur¬
den costing about two-and-a-half
times

California

the

what

is very
A

state

governments cost.
"Every time you turn around
there's a Federal man at your el¬
bow out here," a farmer, said to
me this morning.
"We only want
about one out of ten of them, but
they're forced on us. Why, I guess
it's as bad today as it.was before
the Revolutionary. War, when the
American settlers were called on

Yet

California

as

Bunker Hill."
r

V'_

M'

,

"-i

-V

K2

*4

than twice the value of all build¬

along,

are

right here

don't know

how

in this eounty

200,000 of

over

in

this

state.

I

there are

many

alone.

Ten years, ago the cost of the
Federal government in this coun¬

ty

about one-half the com¬
bined cost' of the state, county
and city governments, instead of
two-and-half times, as it is today.
-was

You

can

Federal
>

see

this

how

balloon

has

<

creating inflation like
balloon itself.

.

immense
gone

gas

up,

times the value of

•all farm products produced in the

It is more than seven
times the; value of all crude oil

county.

Similar

produced.

comparisons

be made here and across our

How Long Can

This Go On?

-Can We, in our towns and work^

places, g&rioxriiwitfet ^a^^ burdens like
this indefinitely? How can work¬

Opens Office lor
Draff Registrations

the affairs of every

government-planned economy
system which keeps you from
doing what you plan to do. How
good is that kind of planning?

where/

or

How well has it worked in these

quired

attempted to put over, the idea
that big buildings and big govern¬
ment. in a big capital town, will
do everything for everybody. Ac¬
tually the real chances in life- of
people who worked across the
land-, are; being taken from them

enough.

*

,

In

"

f

,

to register

^

V

do

may

at

so

registration headquar¬

the




*

formerly with Daniel F.

0

1-J

:

History

people

-proves

are

I

^

;

V',f:.

•

'

i

•

Holt & Collins A^dvr
(Special

&

to

The

Financial

;

Ch^oniclf^

SAN/FRANCJISCG. GAL^olt;
Collins, Russ Building, "mem¬

bers of the San Francisco and Los

;

1

Two With Herrick Waddell
(Special
-

to

The

CHICAGQ,

Financial

;

CrteoxiCLEli

ILL.—James

A.

DeNike and(Rodney Li Price are;,
with

now

Reed,

individual

employee; &nd'

Herrick,

Inc.,

Waddell

.332 vSouth

&

Michigan

this special headquarters

day..regardless' of
residence.

on

any

age;group;,ior

;

This office will' be staffed with
a.

to' •expediting

view

as

well

as

centralizing registration,; Ah ade¬

L. V. Shaw
i-;

,Lt'

"Vv X

•L-V'i/■

Employees may register at

(Special

to

The

Opens

'Financial.

•
' '

Chronicle)

^"fALMQUTH, ME.'—Leigh v V.
^ShaW 'is engaging in the, securities;
business
Water

••

frorh

Road."

'.offices
He :-W&s

on.

Edge-

formerly

Witli Geo;F/West & Son(r;;u

quate Staff of registrars will be
.

available. /.
Gol;

Candler

Servicei

^

j

/

Cobb,.

;

withA.E"Aiib ib®;

;

Selective

'Pboctor 7for^ Ne^v.

•

-(gpetial -to. The

City,' has, appointed/Mr,. J. Horace

Bettman' has

Bldck., ^. njembey hf the' Exchange;' :,A-.Vie.;;:AuS
-i,.

;in/qhar^

"iyout:1^Jand^.

ftnanchva" Ch^oniclei

CINCINNATI,

Fhrm;rqgistiatibh (headquarters.

^

OHIO

'joined
t

.

_

■;

the. staf® of

(Ttust

.iu.f

1"'//« a\

;

a4'.'

;•<!

Si

lifS

,...;

.

Alfred

;

in

,

>-

diK"cii/irn3oh
^r. '•

^

.Builjiing,

"iV#

•

'

Avenue.
of

firm.

J. T. Sebald :
.
how right our own homes, where its results:
t' vfS^lal to "The Financial ..ObronusAv,..;
getting gun-shy. good and'bad,- can be^ seen and;
;^rr^LETf
about these costs for Federal gov- checked up -on. .• That's; >why/. we .
munity. I was in an immense Los ernmenf by remote control. Look have state« governments-. in. Ibis Thpnias:^vSebald js>h^
Angeles aircraft nlant. Thousands at Germany^-Germany had a big republic; i^s Ihe rga^ah. why
of men arid wdtapn arevemplpyed
government in Berlin that dealt in founding fathers founded &taite&"t-' fic^s;;g,ti 1 t;^buth^
Compare these Federal taxes to
factory pay rolls. This is a tremendous
'manufacturingcom"

Beane,

was

,

What IHnd of ^Planning? Js This?

connected

Pierce, FenLincoln Building.

Rice & Co.

'

and 4:00 p.m., at the convenience

,

government should be local. The
act of governing should toe peK
formed as close as possible to -our

become

Merrill Lynch,
&

ner

He

has

Chronicle!

FLA. —Louis

■

ters between the hours of 9:00 ^um;

by the very apparatus which- has
been praised to sound like .their

;

>•-

m

this special

oratory has

"w

•'

Any employee of the Exchange
of a member firm who is rem

other countries?

^t

Tea

with

Financial

to their staff.

necessity of registering else¬

a

A lot -of -dishonest

H.

The

BEACH,

Registration at this point Angeles Stock Exchanged, have
by eligible employees obviates the added William M. Donnelly, • Jr.,

A

is

to

MIAMI

Board.-

ning by the people themselves, in
their' own American way.

ing people expect to carry such
*
^ *'
extravagance
on
their salvation.
backs and still have enough left
Problem Not Partisan
for good local government, right
This is not a partisan problem—
on the spat where they themselves
quesjtion - hi Republicansriv
live, and where they're supporting
Democrats. If s a basic problem of
so many Washington Redcoats that
good
government, on-the realiza¬
they ,can't even* live, as they
tion of whidi
should.
1 •
'
vmust^^dep^ndXGfj
better times. ' 5
s
This is the kind of thing that
The
best
governed pe^le ;are
broke, modern
France. It
will
the
legist
governed;r
;
break any country and its hardpressed people if it continues long

(Special

township. Italy
had
big
government in
Rome
To e x p.e d i t e registration foi
sucking at the roots of each com¬
Selective Service and at the same
munity. Russia has the same kind
time to make such registration
of big government.
Britain has
convenient for employees of thr
gone overboard for big govern¬
New York Stock Exchange and of
ment and
is building one—and
New York City member firms
look at the mess in England.
central headquarters for this pur¬
It all adds up to the same thing
pose have been, established on the
—dictatorship by the few instead
first floor, of the: 24 Broad Street
of dictatorship by the millions,
building, in cooperation with the
planning for everybody from the
New York City Selective
£ervicf
top instead of grass-roots plan¬

Federal

in the

.

■

*

than six

land.

resent ; carrying
regiment after regiment of these
Washington
Redcoats
on
their

them

more

may

Resentment

Show

There

up

'

Who live in each;^^commnhity,; and
who are* having a hard time just

backs.

permits sought for building
the community itself. The Fed¬
eral tax burden on the people is

ing

J

'{ "f A
14
•

That's what I find on people's
minds across pur country; People

getting

over

.

'*>

i

t'.

People

were

The Washington bill levied on
this community represents more

from

was

•C.,

D.

off to

den.

far from

as

London

drained

rolls. That may give y.o.u an idea
of the size of the Federal tax bur¬

more

Washington, D. C., is

Federal taxes,

Washington,

British soldiers.
Federal people
out here in California, living on
us, than there were soldiers in
the British Army. And certainly
got

great

twice the total amount of the pay

the

quarter

We've

good wages. The pay roll
large.

deal of money is in¬
volved in the pa^ rolls of this
county's
manufacturing
enter¬
prises. Last year the factory pay
rolls
totaled
over
$653,000,000.

and local

to

at

With Merrill Lynch FiriR

NYSE

fact Finding! in California

•*> •<>w

j^SAN>franois^

Volume ,168 V JNumfcer 4,730

COMMERCIAL

THE

Parker

000,000 of convertible debentures
into sight.
;
Shareholders

authorize

will

be masked to
and

tures

Chicago 4, II.

would

put the company in

funds

to carry through
struction program well
new

year.

*

>Ji

j

'

•'.r''"

J

i

'

\

.

the Federal Reserve
moving to curb ; bank
credit expansion as their contrib¬

American

utions Ijo the

pahy v;and ia wlist/ iOf

ury
and
Board in

>'

a -suminer" and
awaiting a .more- deficonditions in the

docs

not make

•they

are

i

fVRceks ahead >once the ^prevail¬

ing

lull

summer

k

has

D.

Jones

dum

is

Also available ls

Electric

General

on

;Co.,

"fpeg"

EAIUiX

on.

Security Banknote fCompaiiyr^

j [Federal Water and*Gas .Corp.—

050^?SotrthrSpHng?/Street, L^os Am-

that

>timie to hold

an

it -will
keel

even

un¬

he

expected -to jpro.volce some
(measure of general adjustment.

;>

•

New "York,
September 1,
1818.
The
Board
of
Directors
has
this
day
de¬
a
quarterly dividend of Three Dollars
1*3.) per snare on the Capital Stock of this
Company for -the
quarter ending
September
30,
1948,
payable
on
October
1,
1948, .-to

r"\iji

v

of

stockholders
ness

record

MATTHEW

T.

MURRAY,

&

on

surance

j Boston

Reports indicate that a rather
of such

..:

,

.

.

jhamidtpn, Semlary. '

I. Case

Company

has

Co.—'Memorandum—First

declared

been

of

September

•

payable October

record

11,

1948,

1,

close

the

at

to

business

of

1948.
WM.

B.

PETERS,

-61 Broadway, :N«w

Allied Chemical & Dye

New York'4,

issue destined to
competitive bids,

|for/that

are

t

•ietih

;on

N. Y.

Corporation
Dividend

1948.

'issfuer in funds •• to prepay $6,000,-

nance?

notes, incurred to /fi¬

mentioned
merger.

The

balance

would

}

:

A

week later,

on

.

Sept.

\

bentures

to

American

provide
of

funds

Telephone

graph Co. and to meet

^5

j

j,

Tele¬

toings another

;

Co.,

for

Oct.

26

iargC,issue^47,^




•

UNLISTED
Seeks position

a special meeting by

Edison

on

seventy

five

'estPenn

cents

the Preferred Stock and
per

share

on

Electric Company

the

clared payable October. 1;

1948 to holders of

record at the close of business

on

September19,

(1NQORRORATEP)
.

PREFERRED

;'1948. [Transfer books will .not be closed.

,

.

Secretary

_

•.

i :

.

regular quarterly dividends on the pre¬
ferred stocks of the Company .as follows:

C|of,

de¬

TRADER
many

contacts—

presently employed.
Capabk of organ¬
izing
and managing
own
department.
Box
S 826.
; Commercial
&
Financial
Chronicle, 25

Park vPlace, ;New /York i8.

per

share (1)4%) on the 7%
$1.50

Preferred Stock and

Cumulative

share (1)4%) on the-6% Cumula¬
tive Preferred Stock, for the quarter
ending November 15, 1948, payable^on
per

,

! '

—15 years' experience.^

trading—has

$1.75

WARD BAKING COMPANY

Building,

■

.DIVIDENDS

The-Board of -Directors of The West
Electric Company has declared

-

Penn

C.I.T. FINANCIAL CORPORATION

Preferred Dividend

The Board of Directors has

declared

quarterly dividend of $1.37Vi a
on the Preferred Stock payable
October 1, 1948 to holders of record
September 14, 1948.
the

I T)ividend<on Common Stock
A,Quarterly dividend of 50 cents

per

share in

)0f C. I. T. FINANCIAL

CORPORATION,

a

•4948. The transfer books will notclose. Checks
(Willbemailed.
FRED \W. HAUTAU, Treasurer

quarterly

•'

on

business

declared
dividend of 25 cents a

per

on

share

October

'

on

September 17, 1948.

COMMON-DIVIDEND

the Common Stock payable

October 1, 1948 to holders of record
September 14, 1948.
L. T. MELLY, Treasurer

^

the Class A Stock
for the quarter ending September 30,
1948, payable on September 30, 1948, to
stockholders of record .at the close of
$1.75

The Board of Directors has
share

1948, to stockholders of

19, 1948.

Common Dividend

1948, to stockholders of

15,

record at the close of business on

,

$ash has been declared - on the Cornxnon. Stock
payable October 1.

November

^

share

'

jtecord at the close of business September 10,

new con¬

Detroit Edison 'Co/

^Calling of

Detroit

Fuller

SITUATION WANTED

active

;

A.

by

struction costs.

dollar

one

share

CARL A. SUNDBERG

.

for

advances

of

per

thirty five cents <35(i)

Gsts:dOvr—

Minneapolis Gas Co.—Brief

is slated' to open'< bids Tor
575,000,000 of new .'>5-year de -

iDividends

($1.75)

scription of compariy'and its pros¬
pects—rKalman & Co., Inc., McKnight Bldg., Minneapolis 1, Minn.

Wo.;

prepayment

Minneapolis

go

21,

161

'

.

Bank
Minneapolis 2, Minn.

^Pacific Telephone <&.Telegraph

■

■

Northwestern

into general'treasury funds.

L..Martin,^-TretiSMper

August 30, 1948.

Common Slock of this Company bave beemde-

randum—Charles

.through

comp any

Pkeferrkd Dividend No.

August 2 6,194$

<?orp. and assumed by the first-

New YerkA N.T.

Common Dividend No. 93

iof

Minneapolis das Co.r-^Writeup
—A. VC. Allyh and 'Co., Inc., 400
West Monroe Street, Chicago ,'3;

.

Treasurer

THE

111.,

by Indiana Service

A. Sanford,

C

York, Aiigust 25,4948.

New

tember 30,1J948.
JosKiui

-

construction, plus $10,000, -

000 borrowed

the Preferred

on

'Checks will^bemailed.

No. AO

of Twenty-five -cents (250 Per
share-will be paid .October 15, 1948 .on the
Common Stock of the Corporation, to stock¬
holders of record .at the dose,.of business Sep¬

auce.

next/Tuesday;

^of the -bonds will /put "the

quarterly dividend of

A dividend

LOCOiUOTIVF. COMPANY

AMERICAN

30 Cfcarclt Sired

Broadway, New York 46, N. Y.

issueph

000 of bank

1.50 per
Stock has
payable September
20,1948, to stockholders of record
at the close sof business pn Septem'
Iber 7, .19.48.
A

Wichita /River Oil

-

'

Sale*

Secretary.
1, 1948.

Dividend No. t199

-Preferred

.

September

share

W. C. KING, Secretary

Eederal 4>«?P®sitiiInsur<-

Maule industries, inc.—^Circular
—Aetna S e c u r i t i e s Corp., Ill

slated to compete

week, 'from

k>r. -a
.

has

1948, to
of busi¬

Corporation

September 10,

COMPANY

been declared

share onithe Common Stock of the
Company, payable September 20, 1948,
to common stockholders.of record at the

Also available is a special sbul-

ibonds, due T973;,.

IBankers.

corporation

at

OTTINGER,

Y.,

1948, a cash
outstand¬

-the

October
11,
the close

payable

N.

31,
on

this

of

stock

SIMON

York,

New

study —Paine,
Webber,
Jackson & Curtis, 25:Broad Street,

current lulL ehds,;'W
Jndiana >& Michigan lElwtrm Oq;'s
$25,000,000 of new first mortgage

;■'

ELEVATOR
July

share

per

of /record
October
1,
1948.

;?per

Trust Co.—Ana¬

Manufacturers

the

tonce

25c

of

declared

has .declared quarterly dividend No. 110
roDQne-Dollarand Fifty Cents ($1.50)

close of business

Utilities Top List
new

O T1S

ended

quarter

common

ness

York

lytical

for

the

For

Secretary.

Allied Chemical^ Dye Corporation

analysis—Comstock & Co.,
231 South La Salle Street, Chi¬
cago 4, 111.

holiday passes.

up

!.

Plywood
Corporation

stockholders

New

will be 'disclosed within a
ibrief ,pe?iod :after. the Labor -Day

1948

August 30,

,

United States

dividend

ing

come

,

Racine, Wis., August 31, 1948.

Long Bell Lumber Company-

Those. claiming to have leads
number of such deals expect
the vanguard of this.type financ¬

SOLBERG, Treasurer

OSCAR

1948.

-August 31, 1948

f

"*

lOtli,

Vice President & Treasurer

A dividend of $1.75 per share upon the .out¬
standing Preferred Stock of this Company has
been declared payable October 1,
1948, and a
dividend of 40c per share upon the outstanding
$25 par value Common Stock of this Company

lar—George Birkins Company, 40
Exchange Place, New1
Y

pn a

The first

September

^on

CHARLES C. MOSKOWITZ,

(Incorporated)

writers.

!

September 20, 4948, >to stock^holders of / record on Septem¬
ber 10, 1948.
;b6oks
will ,no"t be closed.

rpHE Board of Directors has declared a
A quarterly dividend .of 37^0 per share
on
the outstanding Common Stock of the
Company, payable on September 30th,
194S, to stockholders of record at the close

been

which would eliminate the task

j

i

the outstanding
.payable pn

on

Stock,

Common

'

Leonard Refineries, Inc.—^Circu¬

of distribution normally under¬
taken by the investment under-

:

Agent.;.

Disbursing

initial dividend of 150

an

share

per

EVERYWHERE"
September 1,1948

"THEATRES

ing

potential borrowers And lenders
,

declared dividend

underway 'between

is

tiations

clared

869

has

1948

J.

Marine In¬

Corp., 100 Broadway, New
Y.
.\ / • ;

of J)it}idend

Notice

LOEW'S INCORPORATED

No.

1948 to stockholders of record 3:00
M., September 7, 1948.
be mailed by Irving Trust Com¬

York 5, N.

nego¬

COIVIPANY
dubuque, .IOWA

Secretary.

•Checks will be mailed.

holders

1 liberal schedule

busi-

.of (business

Joseph Bancroft ■'& Sons Co.

'

a

cents
($.50)
per
share of
Capital biocK,
payame Sep¬

jjohn w.

Co.,

^Kansas City /Fire

,

months ahead.

of

INTEHSTATE ?OWER

.

a

will

17,

In the same issue is information

that investment bankers are
to be plagued by the
spectacle of a substantial out¬
cropping of directly negotiated
destined

fifty

Dividend

pany,

.August

Street, New York 4, N. Y.

ap¬

pears

Joans in the

17,

o'clock -P,

Quotations"25 Broad

Other

Pizzini

'

HIXO

COMPANY

MINING

Directors

value

par

tember

issue of "Rail¬

current

and

W.

B.

conjecture it

of

869

$12.60

Harris-Seybold «Co.—Memorahroad

From current

No.

Checks

Direct Negotiations

i

The Board of

scan¬

dum—iri

KENT, Secretary

STEPHEN G.

The Board of Directors has de*

Bulletin—Laird, Bissell & Meeds,
1120 Broadway, New York 5, N. Y.

ning the seasoned list in the in¬
terval seeking
out opportuni-

close

the

at

DIVIDEND

^experts probably will be

(of ^business September .7,4948.

Trustees .have /declared
dividend of ten cents ($.10)
share, payable September 25,
1948,-to shareholders of record J
at the close of business
Sep
tember 15, 1948,;
24 Federal Street, Boston

The

,

September ;8, .1948.

r

HOMESTAKE

Since the new issue market
rwill have little to offer for
^another week or more portfolio

STOCK

clared

Fireman's Fund Insurance Co.-

i

of

-

(Ferry Uap & Set -Screw: Co.—
Analysis-~Bennett, Spamer/& Co.,
Inc., 105 South La Salle Street,
Chicago 3, 111.

naturally" would

.move

a

close

*

'

less, of course; the support level
dor -Treasuries should be shaved.
Such

*•'.

'1'

the

Septemlier 15, 1948.
Street, 'Boston

fAION & HOWARD
GUARANTY TRUST COMPANY OF NEW YORK

geles 14, Calif.

oon-

record at

Federal

24

to

stockholders ofr^cordatthe close

DIVIDEND NOTICES

Analysi&r*Croweii, iWeedon & Co.,

is

consensus

of

ers

this Company, par

4id.,^payah]fe;0ctdher 1, 1948,

a

business

qnarterly dividend

a

lal 6lock of

Trustees ?have .declared
of
twenty
cents

-share, payable Sep.
tember 25, 1948, to sharehold¬

'Machine ,Co. & Co., Inc., 25 Broad Street, New
Special
memorandum —:Sutro York 4, N. Y.
Bros. & Co., 120 Broadway, New

onarked selling pressure and the

free

day ■declared

?of 20 cents.per 8hare on th<? eapi*

lilMI

dividend

($.20)

Burroughs Adding

of any

virtually

Y«rk

August 26,1948

HIIWAHU

The
.a

bank eligibles.

been

Company

analysis *oj

san

BALANCED

—

To date dhe corporate mafket
has

Irving Trust *

The Board of ^Directors has this

Electricity-Utility Operating com¬
mons .and industrial prefer reds.

York-5, N. Y.

share

September 15,1948.

on

DIVIDEND NOTICES

Memorandum —Homer O'Connell

Naturally, all eyes are focused
the government market if or any
indication of a possible follow-up
move, if necessary, to lower the

per

GERARD J. EGER, Secretary

On« Wall Street, New

memoran¬

a

(35c)

payable October 15,

Miles Shoes, Inc.

'

on

of business

Winters & Crampton Coi^.-r
Analysis—C. E. Unterberg & Co.
|6I Broadway, New York 48, N. Y

Air Line Railroad Co.

available

Also

stock

common

•market opinion.

Co.; ,300 North Fourth ^Street, 'St.

v

the

1948,.to stockholders of record at the close

&

Louis 2, Mo.

do., Ill
Broadway, New York 6, M.
j;

jpourse.

Cos.—Cir¬

cular—John B. Dunbar & Co., 634

Puget Sound Power & Light Co.

Seaboard

€o.*-

instrument

&

-Analysis—Smith, Barney & Co.;
Kidder /& ;14 Wall Street, New York 5, ;N. Y.

iGas

Taylor

AnaJ,ysis-4lra Haupt

its

run

M.

Union

Brooklyn

Marshall

Corp.—

Po., J /Wall Street, ,New York .5,
N.Y. V'"'.

Jlite dest >of

dend of thirty-five cents

—Analysis—Edward

Memorandum—A.

swallow;

'COMPANY

Co., 647 South Spring Street, Los Angeles
South Spring Street, Los Angeles
ti.4, Calif.
14, Calif.
v'
| •:Alsot available is a leaflet ;of

Building, Toledo 4, Ohio.

.ioweyer,

Miarket ^observers*
irecognize sthat
"oire

HARVESTER

:N. Y.

.

iPlomb Tool Co.—Detailed study

interesting'

Manufacturing

INTERNATIONAL

—

J. E. Stevens & Co.—CircularMorgan Stanley & Co., 2 Wall The Directors of International Harvester
alysis—Russ & Co., Inc., Alamo
National Building, San Antonio 5, Street, New Yprk 5, N, Y.
/Corappny have declared ja quarterly divi¬

—Maxwell,

^Collin, Norton' & Co., Gardner

Ayco

\J. P. Stevens
Co.-—Memoran¬
dum
Harriman
Ripley & Co.,
Inc., 63 Wall Street, New York 5,

on

Cyanamid;Texas <Cpmr

.news.

DIVIDEND NOTICES

;

:

-Argus Research Corp.—/Anfalysis

;

Corp.—

Texas.

t( Continued from page ?3 j

■

Precision

Lumber Corp.—^An¬

Pickering

Dividend payers.

-irrinQi^

corporate market has remained
relatively firm and Treasuries,
likewise, have steadied .after their
unsettling movement an the wake

;;

'\

Recommendations

by ithe jrecent .actions of the Treas¬

ol .the

its con¬
into (the

Dealer-Broker

;Thus far the Investment market
hjas ,not been seriously disturbed

:stop-.inflation drive.

31 Milk Street, Boston 9, Mass.

JPhilip Carey Manufacturing Co.
—Analysis—William A. Fuller &
Co., 209 South La Salle Street,

Funds

parity.

$20

present

Silver Creek

,

39

Data—Heimerdinger & Straus, 50
Broad Street, New York 4, N. Y.

raised from the sale of the deben¬

the

(935)

change

thecommonistocktomoiparf rom

-With

Company —
Homsey Co.

Appliance

circular —du Pont,

that issue

CHRONICLE

FINANCIAL

&

The West
has also declared

The-Board of Directors-of
'

.Penn Electric Company
a

dividend

on

the Common Stock of the

Company in the .amount of twenty-five
(25tf) per share, ..payable on Sep¬
tember 30, 1948, to stockholders of rec¬
ord at the close of business on September

cents

August 26, 1948.
475 Fifth

Ave.

TIPTOP

New York City

ITIPTOPI

BREAD

July .22, 1948

CAKES

i6, i94s.
H. D. McDowell,

Secre/ary

Thursday, September 2, 1948

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

three

ditched

effect,

in

velt,

because

outstanding

leaders

they weren't

100% New Deal¬
got away

and more or less

ers,

v

with it. T

the mid-30's, Mr. Roosevelt

in

of .New

didn't like John O'Connor

BeVinj*tlie»Scene Interpretations
from the Nation's

Capital

York

committee* because O'Connor, was
only 75% for the President's pro¬
gram.
Mr. Roosevelt's influence

*

brought
WASHINGTON, D. C.—Congress probably will be in a mood next
Winter to lower the mandatory government supports on farm com¬
modities—so long as the present outlook does not change.
That is
Xor
abundant
crops
and
the prospect that wheat, corn,
cot¬
ton, tobacco, and sundry other ^
boys a crack at writing into
commodities will drag on the sup¬
their ideas and to forestall
ports.
1
ceptance automatically in
This outlook is indicated only
'

of the unchanged

not indicated by any

of

decision

formal

formal or in¬
Congressional

taken up

They: have hot yet gottogether to discuss it.

ten

tions. By

and large tliey. are not

have

cnes

been

government

that if the

vately

the

ground

s'

from

away

net

the

would

loan

them

no

tosses, the commodities not aver¬

lower than their

supports

The public
would get the idea that the sup¬
port price was keeping the price

curing ttje crop year.

high. This the farm lead¬
don't want to risk.

food

Actually, the Senate and House
Agriculture committers, the chief
and

are

lower

count

that

-forces

otner

were

this
Also for

The

supports.

in

Agriculture

or

of

the

laws

farm

i'f

should

be

en¬

Senate

GOP

leadership
opposed in principle to legis¬

was

lation

now.

It

was

afraid of" get-

the

thing in a jam which
would have complicated the end¬
ing of the regular session. I

tmg

Members

Hence the bill that passed was
that queer concoction which pro¬
vided for continuation of all the

of

Credit

independent
Farm
operated

an

Administration

outside

board

by

a

the

Department of Agriculture.

bi-partisan

The

Department of Agriculture
naturally wants to keep the FCA
under, its wing. Then if the De¬
partment should want to discour¬
age

production

the

FCA

from

it could prevent
following lending

practices which would encourage
production. The Department prob¬
ably will feel that way even if it
has
a
Republican Secretary of
Agriculture.
While the

Republicans

were

the

they were stopped from legislat¬
ing

it

How

the

by
the

threat

of

tions

veto.

a

will

Republicans

about it—with the farm

they

responsible

are

this

have

due

->

a

Roosevelt

Mr.

a

chance

revision in

any way,

-for

was given
that the various agencies

10%. The dope which
out

was

of
the scheduled airline operations r
concerned with the problems

going to work on^ a longterm problem with the idea of

were

finding

Nevertheless,' something in the
of long-range studying is
going on. RFC is working "day

way

and

night" to get out a report on
financing problems, par¬
ticularly the problem of financ¬
ing acquisitions of more modern
and efficient operating equipment.
The CAB, it is said, will still go
ahead with trying to work out
ways of reducing operating costs.
The RFC
report will be ready
some time shortly after the mid¬
dle
of
September, according to
airline

tion
the

the

for

haste

in

increase.

fare

subcommittee

of

an

#

There

*

was

that

Ferguson

Senate

the

appointment

dis¬

Ex¬

is investi¬

It

is

subcommittee

the

already has begun to feel that it
could make out

good

a

t hat

the

CAB

seemed to kiss off the air trans-

port problem with the
;

"rabbit
to boost
the scheduled lines by

believed

is

acted

though

as

the Ferguson

blast

case

for

the

that

it

the

were

subcommittee might

Administration

at

fares

tween

Nov.

and

2,

of

ture

the

of

one

leaders forced upon

Congress un¬
der the leash of the last President

Senator Alben Barkley

"/'•!: 7-f • 7V 7.7 y

-v

\

?T'~,

o.

-'■":} ;.y vT

.

...

".v1,/

'

40

much up

Trading Markets:

for auctioning Nov. 2 as

long-run

Ralston Steel Car

Vice-

chance to be

Oregon Portland Cement

The late Mr. Roosevelt's pen¬

monkeying

for

Congressional

with

leadership

of the most ahiazing

deceased

the

reer.

Riverside Cement A & B

the
was

Spokane Portland Cement

facets

President's

ca¬

Ordinarily it is dangerous
extreme for

to

the

to

try

to

force

Senate

to

choose

a

the
a

ferent from the genuine choice
of that

House.

LERNER & CO.

President

Investment Securities

House or
leader dif¬

10

Post Office Square, Boston 9,

Telephone Hubbard 1900

.

This entire issue has been placed privately at par
;

•

appears as a

:

and this advertisement

matter of record only.

NEW ISSUE

:: $500,000

Penn-Ohio Steel

.

Corporation

($100 Par Value)

.v

All Issues

QARL MARKS & HO. INC,

:

supports

J'-

^wajs

to give the House




HILL/ THOMPSON & CO., INC.

foreign securities
specialists

50 Broad Street -"
__

r

r

New York 4, N. Y.

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

Mass.

Teletype BS 69

Yet Mr. Roose¬

5% Cumulative Preferred Stock

--.\v

Asf*

HA. 2-S780

Teletype K. 7. 1-1397

President .under Harry Truman/

of

Exchange PI., N. Y.S

of Padu-

Senate is at

cratic Leader of the

chant

1919

Barkley's post as Demo¬

cah, Ky.

FOREIGN SECURITIES
v'

ESTABLISHED

Members N. 7. Security Dealers

is

individual

That

Roosevelt.

next;

Teletype—NY 1-971
Firm Trading Markets

M. S. WlEN &

Deal

New

:

HAnover 2-0050

the

against

left-wing control of the Demo¬
cratic party is the personal fu¬

a

series of hearings some time be¬
now

rebellion

CAB

afraid

out of the hat" proposal
on

fortunes of the

one

subsidies.

gating air mail

It

*

considerable

bound up with the
Dixiecrat

proposing

The

penditures committee

reported

expana-

Seatex Oil
development

his

present schedule.
is said to be

Lonsdale Co.

to

future

Another

There

sensitive

Corp.

Finishing

Dorset Fabrics

the

particular juncture
is

U. S.

public investigations.

tions.

the

this

At

Administration

long-term set of solu¬

a

Belle Isle

to be done
and done quickly seem to get the
airlines into the black, if possible.
Hence something had

line problem."

to

7
/ ••

i

South Jersey Gas

Try for 64?"

Senate revision

or

-operative,...
bo

year

...

ment, remains to be seen.

amend it in 1949 before it, became
■

Next

-

"gross mismanagement of the air¬

basis because they knew

they (could

of

lost the Vspend-lend" bill.

the administration of the depart¬

The House members accept¬

ed the Aiken

feel

organiza¬

needling them to adopt it-—

when

through

1949,
plus a
farm
law-revision
(the Senate
version) to become effective in

f

the

to promote

supports (and some most notable
/additions) oi, the Steagall com¬

on

year

by which Mr. Roosevelt set great

"It's 54—Like to

farm

idea

of the House commit¬

Ttiey steadfastly refused to accept
A revision.
L

1S50.

the

was

government reorganization bill

store.

forthcoming conference

the

zations also want

tee, on the contrary, were bp?
posed to revision In government
supports during an election year.

modities

a

$

*

whether opposition, it was fun to work for
the
independent FCA, even if

taw revision in 1948. It lobbied
against the Senate leadership to
get its proposition enacted before
the June; adjournment. It was no|
the

Majority

fruit

defeat by Congress that

at least arrest the rise.

something to worry about. Be¬
sides seeking to protect farm loan
subsidy money, the farm organi¬

the

acted this year. The Senate com¬
mittee was most avidly for farm

that

first

The

prices of

credit

Committees

was over

in

so-called ' "permanent" revision

C

Leader.

;

organizations on "farm
legislation in 1949," there
is something' which will give the
new
Admi
next year

of

original

between

House and the Senate
Aft

stall Mr.. Barkley as the

to

think,

by a
them-*

reverse

Reiter Foster Oil

great interest.

difference

land,

In

supports between 60 % and 90%,
It subsequently got dropped in a
legislative melee, most of the deians of which are technical and

| Chief

a

...

House committee bill provided for

©t no

downtrend

start

commodities
do

goc^; ^ven if subsequently it de¬
veloped
that
the
government
wonted out without appreciable

ers

officials

costs,

Democrats

to

■

tureds of millions of

aging

to be sufficiently

1937, in¬

of

selves, toss out Harrison, and in-/
■

gross

is likely

ating

[ 'From the point of view of the
farm leaders, even stories that the
~:[iovernmeht 'was ~, putting hun**
under

stood

letter

Senate

vote

narrow

reduced because of higher oper¬

port prices.

his

Alben"

fluenced

income
from
marketings, despite price drops,:
is holding up well because of
the large volume of cash crops
now
being harvested, farmers' i

;

him

in

President

leader, "the

"Dear

1, last, the in- '

land values

farm

farmers'

of government sup¬

idea

whole

val¬

without

almost

was

"Pat'r

slow,

is

Senate Democrats had chosen
as

174% of values in the years
prior to the first war. Although

"S ^maintain high farm prices, the
s anger
of the \ public in these
dimes of high food prices will
lie something awful, It is quite
of

reached in farm land

of

dex

Barkley

equal in the game of parliamen¬
tary tactics.
Despite the fact that

at

millions, and not unlikely
'even
a
couple of billions, to
«f

Mkely, they fear, to sweep much

has

As alert;

Democratic leaders.
Mr.

as

Harrison

peak

the

As of July

ues.

getting involved to the tune of hundreds

/faces the prospect of

•

the

prices

that

pectation

admit pri¬

They

late; fjenktqr' Pat Harrison
Mississippi ' was rated Jby alL[
odds one of the most brilliant of
The

of

started their
upward
climb,
officials
come to have a firm ex¬

have

to recognize it

come

inevitable.

as

until his death.

big farm crops

first time Since farm

estate

long

responsible

system;/ The; more

tiie

For
real

Roosevelt's

Mr.

subject were

law revision next year.

opposed to the idea of a lower
and
flexible
support
pricing

which was a thorn in
political 'side:

publicans

organiza¬

big farm

the

sists of

committee

southern

of

gc

dropping down to or near
their
support
prices
furnishes
only an additional reason for farm

Important

most

the

of

One

Rules

are

forces bearing on this issue con¬

"Lost" the House
to the coalition
Democrats and Re¬

the White House

ac¬

in 1949.

The fact that the

leaders.

j
"

ceeding O'Connor was Represen¬
Adolph Sabath of Illinois/
100% in loyalty to Roosevelt if
not 100% in ability. Subsequently,

1950
Aiken farm law

into effect unless the

the

in

tative

law

This revision would

revision.

purging of
election. Sue-,

the

about

p'Comior

..

)-%y the fact that the forces that
count: politically* are for, iL It is

Rules

the

of

Chairman

as

September 1, 1948,