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ESTABLISHED 1839
>s\^
Commercial
Financial Chronicle
/Ik
%sp/he
Reg. U. 8. Pat. Office
Volume 172
Number 4944
New
York, N. Y., Thursday, September 21, 1950
Price 30 Cents
a
Copy
EDITORIAL
What's Ahead for
As We See It
The Bond Maiket?
election campaign is on. Its nonsense is
on all sides.
We shall have to suffer
The
By ALFRED J. CASAZZA*
heard
now
Vice-President,
it until November, of course, but it may
be hoped
that, for once, the great rank and file of the
voters will do a little thinking for themselves.
One of the early gatherings took place in the
City of New York late last week, and gave sev¬
eral candidates an opportunity to show their
wares.
From the outgivings of that occasion we
take the following from the speech of Senator
Lehman as all too typical of the New Deal and
the Fair Deal philosophers—if that is what they
"Let
inflation program,
deceive
ourselves
"These
which
ment
Sees likelihood
we
a
into
will have lost the
Generals
There
very
the
on
be the opening phase of the
war in history, it is somewhat sobering
that, because of basically changed conditions,
few, if any, of the lessons learned in the two prior gen¬
to
rushed
tendency
a
their
reach
ears
hoard
to
note
eral
of
sugar,
one.
vanced
ad¬
War
•An
30
address
by
Association
page
SEE
YOU
AT
THE
of
the
National
Mr.
of
Casazza
State
page
come.
damentally
only
demonstrate
Gilbert M. Haas
point:
(1) The U. S. is riding the crest of the greatest boom
record, with only 4.0% of the civilian labor force un¬
on
employed,
contrasted
with
1939
when
Gross National
Product w^s
only a third of current output and unem¬
ployment 17.2% of the then civilian labor force.
41
(2) The commodity price level is 115% higher than in
before Group V of the Savings
York, Brooklyn, N. Y., Sept.
New
of
Continued
on
page
28
have reference, of course, to tjie Annual Con¬
which gets underway at Virginia
Beach, Va.,
on
September 26.
State and
Municipal
OFFICES:
Bishopsgate, E. C. 2
Branches
R. H. Johnson & Co.
Smithfield, E. C. 1
^
Established 1927
across
Charing Cross, S. W. 1
Burlington Gardens, W. 1
TOTAL
INVESTMENT
upon request
64 Wall Street, New
ASSETS
£156,628,838
Albany
The
OF NEW YORK
Scranton
Springfield
Washington, D. C.
Canadian Bank
<46ommme
Head Office: Toronto
Williamsport
Wilkes-Barre
Williams Deacon's Bank, Ltd.
THE NATIONAL CITY BANK
Harrisburg
Buffalo
Providence
Mills & Co.
York 5
PHILADELPHIA
BOSTON
Troy
Associated Ranks:
Civn,
Bonds
Canada
Monthly Commercial Letter
SECURITIES
W. 1
64 Nek Bond Street,
■jv
to
the
OFFICE—Edinburgh
LONDON
49
need
cited
be
Branches throughout Scotland
8 West
altered
conditions
Quinn
to
fun¬
Security Traders Association
Incorporated by Royal Charter 1727
3
one
These
20, 1950.
CONVENTION—We
the
minimum
of
value in the
brought
higher
prices and lower yields in the bond
market.
This Wartime strength in
bofids resulted .from three forces.
First, there was a severe contraction
in new corporate and municipal fi¬
Alfred J. Casazza
nancing and in mortgage borrowing,
so that the supply of such investments was sharply re¬
duced.
Secondly, the demand for institutional invest¬
ments expanded as inflation swelled national savings.
on
same
for
reasons,
prove
II
Continued
the
earlier general con¬
flicts
is
likely to
the
World
stocks
and
the
knowledge gained
by investors in the
Invest¬
like
for
At
same
were
issues, since these had
sharply in the last war.
sugar
be
help
time
in very short
that
will
wars
much
in
planning and pros¬
ecuting the next
than
just be¬
pepper
were
materials
raw
scrambled
ors
term.
Background
did news of the
during World War II.
scarce
Banks
HEAD
oVer intermediate
supply after Pearl Harbor. Business
men
similarly stocked up hurriedly
on
vention
Korea
these items
cause
simple, and, really,
Royal Bank of Scotland
No soonjer
nylon stockings and
quite to the point to insist that the people who
have really threatened our liberties and who are
still bent upon destroying a large part of the
American system are those who furthered the
Continued
*
it is often said, planning
housewives
major battle."
would be
in
war
Who Threatens Liberty?
Of course, it
burden and other anti-inflationary
entailing drastic reduction xn country's living
standards. Contend common stocks, in latter phases,
are poor hedge
against inflation; prefer bonds, particu¬
larly tax-exempts, as best medium for value preservation
war.
thing.
>
On the eve of what may
people in civilian life who have
to do the same sort of
General
greatest general
spend their time,
are
attending
moves,
govern¬
savings banks
circumstances
under crashing tax
Advises
these institutions.
on
how to win the last
before
war
of mutual
maintain
War iii would differ completely from previous wartime.
Conclude early profitable phases would deteriorate
bonds, in view of probable legislation imposing Federal
the forces which
fought
Economists
decline in yields
a
provide satisfactory return, along with
bonds.
we would overcome
If we turn our backs
have
we
there will not be
if
them in Asia,
Co.
increasing holdings of tax-exempt state and municipal
we must help to
the threat of com¬
on any one danger
in order to preoccupy ourselves solely with an¬
other, we may find ourselves overwhelmed. If
we
yield ourselves to panic and give up our lib¬
erties, the liberties which have given us strength
to check the Soviet designs in Europe and to meet
are
By J. J. QUINN and G. M. HAAS
Trust
savings banks to continue purchase of good mortgages
thinking
that our enemy is Soviet Russia alone.
Allied
with Soviet Russia and her cruel and imperial¬
istic designs are powerful and insidious forces
of poverty, ignorance and human misery.
conquer
munism.
Bank
from bonds arising from lower interest rates.
levy
not
us
Savings
Mr. Casazza points out, in view of government's anti-
be termed:
can
Wai, Taxes and
Security Prices
Bond
Dept. Teletype: NY 1-708
New York
Bond
Department
THE CHASE
NATIONAL BANK
OF
THE CITY OF NEW YORK
Agency: 20 Exchange PL
,
Seattle
Portland, Ore. San Francisco Los Angeles
•>x
t
■'
Government
Investors
Distributors of Municipal
,
Prospectus from
authorized dealers or
.•...VVVDVNCE. sasdkhs & CO.
t '
'
1
,
111
.
Vork
"■<
OTIS & CO.
-
Established
New York
1899
Cincinnati
Chicago
Denver
Columbus Toledo
■
SOLD
■
Goodbody
QUOTED
&
Co.
ESTABLISHED 1891
(Incorporated)
Pomeoox Securities
Grpokatiotj
MEMBERS NEW YORK STOCK EXCH.
CLEVELAND
Company
internal issues
BOUGHT
Corporate Securities
"
Chicago
Los Angeles
New England
and
BOSTON
"
New
,
Pevonshire,Street
Northern
Canada
of
Underwriters and
Second Fund
CANADIAN
BONDS & STOCKS
Massachusetts
115 BROADWAY
Dallas
Buffalo
NEW YORK
105 W. ADA MS ST.
CHICAGO
40 Exchange
Place, New York 5.N.Y.
IRA HAUPT&CO.
Members Nova York Stock Exchange
and other Principal Exchanges
111
Broadway, N. Y. 6
WOrth 4-6000
Teletype NY 1-702-3
WHiteh*!! 4-8161
Boston
Teletype NY 1-2708
Telephone: Enterprise 1820
2,
(1082)
The Commercial and Financial Chronicle
TRADING
MARKETS
The
IN
Toledo Edison
Security I Like Best
A continuous forum in
American Power &
Light
which, each week,
different
a
This
Forum
of experts
group
Central Public Utility 5^/52
(The articles contained in this forum
Central Illinois Public Service
nor
they
are
he regarded,
to
as
intended
not
are
Counsel,
(Page 2)
discussed.)
New York Hanseatic
GEORGE W. CLEMONS
Corporation
President, Securities Counsel, Inc.,
Jackson, Mich.
1920
Established
120 Broadway, New York 5
but
an
talking in terms of
am
if
we
will the
production of war materiel
hurry?
Yes, you are right,
is
and
investor
an
the
appreciate
respect
can
management
genius and fi¬
nancial
ning
Rights I Scrip
to
the
use
required
future with
120
Stock
Curb
dollar
volume of any
business en¬
changes
in
tors
tion, led these
by
Geo. W. Clemons
years
Alfred
P.
Sloan, Jr., has always favored fi¬
nancial incentive for management,
and I,
as
one
stockholder, am
Common
grateful
for
this
1 be¬
lieve it is one of the most impor¬
tant reasons why the corporation
is now a giant.
Chnrchill-Downs Inc.
Capital Stock
Consider H. Willett
Common
Perhaps there
policy
as
who still
are some
believe
BANKERS BOND
automobile
for
the
cities
Life Bldg.
LOUISVILLE 2, KENTUCKY
for
to
Bell Tele. LS 186
Long Distance 238-9
the
item
ever,
aside
centers
of
CO.
_
Incorporated
1st Floor, Kentucky Home
that
luxury
m
it
but
rich.
is
a
I
a
1917,
in
one year
CONTROL
dollar
com¬
financial
strength of
this industrial empire offers more
that
assurance
capital will
safely through these changes
than
it
if
promises
have
a
skill
invested
conviction
the
in
the
government.
any
deep
world's
my
were
of
of
family life. As
that General
boast
that
I
the
running
men
the
does
not
governments
ALBERT H. DEUBLE
Partner,
a
stream
■
has
great deal about in¬
a
and
realize
we
that
the
will
buy one-half or less
than it bought before theJast war.
Oppenheimer
Members of N. Y.
&
terests
does
limited
hot
offer
degree
least
at
of
a
protection
against
infla¬
southwestern
states.
★
★
★
rapidly growing sections of
the
nation.
the
trustees
mated
Within
few
a
revised
earnings
figures
of companies
manufacturing
sumers
in
much
^
7-0425
:
Teletype BS 259
:
N. Y. Telephone WOrth 4-5000
as
Given
the
on
$6,716,000.
important long-term developments
for
the
railway
of the chemical
the
entire
from
Prior
in
Federal Water & Gas
Tide Water Power
Hytron Radio & Electronics
like
Smith & Wesson
the
no
chemical
Charles,
Alkali
Plant
idends
in
Teletype NY 1-3568
to
us
the
how
see
of
1942 and
base
find
this works out
General
Motors.
.
that General Motors'
nual sales averaged
an¬
$1,669,000,000,
while per share
earnings and div¬
idends averaged $3.75 and
$3.12y2,
find
By
comparison,
the four postwar
years,
we
1947
ideal
at
plants
built
were
Chemical,
later
Smelting,
Celanese, Du Pont, Monsanto, Permanente Metal, Shell and South¬
ern
Acid.
This chemical
tax
Railroad
position.
Shmkan &Co.
MiMtess
J
NEW YORK SIOCK EXCHANGE
age
per
dividends
51/2% bonds, due May 1, 1949 ap¬
to embody all of these fea¬
pear
tures.
aver¬
earnings and dividends for the
past four years raises the dividend
potential for the future, and I be¬
lieve
that an
average
dividend
expectancy of $6 per share is con¬
servative, even if future automo¬
bile
years
pattern
as
revert
to
to
the
prewar
volume, adjusted for
population increase.
40 EXCHANGE PL., NEW YORK
5, N. Y.
Allowance is
also for volume and diver¬
sification improvement in the field
Phone DIgby 4-4950
of
NEW YORK CURB EXCHANGE
made
Teletype NY 1-953
of
the
At present all
to
a
indications point
continuation
of
inflation from which
the
creeping
have suf¬
we
fered
during the past ten years.
Experience,
however — even
in
postwar Germany with its drastic
devaluation of the mark and heavy
damages
from
bombardments
panies offer
household
appliances, railroad
locomotives, diesel engines, etc.
one
com¬
safeguarding wealth against
inflation.
loss from
Using
tions
as
the
a
Missouri
offer
value.
foregoing qualifica¬
yardstick I consider the
Pacific
an
convertibles
outstanding
to
security
oil
industry
by-prod¬
a
affiliates, The New Orleans, Texas
Mexico
Railway and
The
In¬
ternational Great Northern RR., is
one
of the largest and most im¬
portant railway systems west of
the Mississippi. The system oper¬
ates
more
than
10.000
miles of
main
track
and
serves
important
Dan River Mills Common
Henry B.Warner & Co., Inc.
Members
Phila.-Balto.
Stock
Exchange
123 South Broad St., Phila. 9, Pa.
Phila. Telephone
Bell System Teletype
PEnnypacker 5-2857
New
York
PH 771
City Tel.: BOwling Green 9-4813
a
resources
Keyes Fibre Company
will
alone
Preferred
bring additional income of at least
$6V2 million each year to the
System. Thus full participation is
in
the
development
regions.
southern
1
Class "A"
Common
ol
Bought
—
Sold
—
Quoted
Increased earnings are protected
from
the
sys¬
Consummation of the reorgani¬
zation plan has been delayed by
legal
difficulties
from
stockholders
ceive
no
tations
1951,
and
objections
who
will
Ralph F. Carr & Co., Inc.
31
Milk
Street, Boston 9
Tel. HUbbard 2-6442
Teletype BS 328
re¬
participation under the
plan. However, expec¬
that
are
or
even
the
by
end
few
a
of
BUY
months
earlier,
the reorganization plan
will be completed. By now, most
of the legal problems have been
solved and balloting on the new
plan could
Under
commence
the
terms
U.
S.
SAVINGS
BONDS
by Nov. 1.
the
of
reor¬
ganization, holders of the MOP
5V2% convertibles would receive
two shares of 5%
and
16.34
shares
preferred stock
of
class
A
com¬
Any revision of the plan,
an
improbable development,
should .work in favor of the con¬
mon.
Over-the-Coiinter
Quotation Services
vertibles.
There
in
&
Penna. Power & Light Common
Philadelphia Transportation Co.
Pittsburgh Railway Issues W I
refining
as salt, seawater, natural gas,
sulphur and limestone existing in
The MOP, which has been
bankruptcy since March 1933,
together with its fully controlled
Equitable Gas Common
Allan Wood Steel Com. & Pfd.
such
—
of the best meth¬
Buckhill Falls Common
industry,
larger extent was due to
proposed
$6.25, respectively.
The wide margin between
Over-The-Counter
Securities
average
and
Pa¬
convertible
ods of
and
earnings
and
also
Missouri
Co.
$5,200,000,000,
share
in-
shel¬
a
shows that stocks of strong
$12.25
uct
partly
was
tem.
through 1950 (estimated), show¬
ing average annual sales above
Primary Markets in
large
by Dow
American
expansion
Company Common
Other
products.
serious tax inroads by
high capitalization of the old
have
tered
cific
of div¬
and
Corpus
vestment
Deuble
return
the change-over years,
1946, and taking as pre¬
years 1938 through 1941,
respectively.
H.
and
earnings.
case
Omitting
war
37 Wall Street, New York 5
La.,
should
Albert
BS 142
West Penn Power Common
war
Christi, Texas, began to produce
soda ash, caustic soda and other
country.
An
catches
modernization
growth, one may expect a
to the prewar
relationship
we
V0GELL & CO., Inc.
Motors
capital expenditures for
postwar
Let
Purolator Products
General
with
up
the
corpora¬
Warner
the
Lake
at
our
a
Tele.
Pocono Hotel Corp. Units
benefited
territory.
Since
that time large plants such as the
Solvay Processing Plant in Baton
Rouge, La., the Mathiesori Alkali
afforded
as
Int.
Orleans,
to
practically
was
industry
velopment of
net
Dealers
Open End Phone to New York Canal 6-1613
part of this tremendous
development.
there
has
system
some
natural de¬
of
Securities
Tel. HUbbard 2-5500
La., to Brownsville, Texas. Almost
to
ratio
same
Furthermore,
tion
the
of
industry along tne
It is estimated that
of
Assn.
is the expansion
Gulf of Mexico from New
earnings also should dou¬
/
ble.
cause
Nat'l
75 Federal St., Boston 10, Mass.
000 to
business
be¬
J. B. Maguire & Co., Inc.
Members
Enterprise 2904
chemical
growth
Quoted
—
Enterprise 6800
territory.
possibilities of
Sold
Hartford, Conn.
the
11.
—
Portland, Me.
the
War
World
g-t
n
upward
and
1
o
esti¬
e r m
program
as
comparable automobile
gross
sales should double
year,
and
before
the
twice
about
a
gross net
WHitehall 4-2530
costs
in
armament
As consumers, we
general way that a
a
Chevrolet
Tel. CA.
tion
con¬
goods?
realize
participa¬
Bought
by $4,297,One of the most
but to
ements
Manufacturing
for citrus traffic alone
development of natural
in¬
stocks
on
r
years
their
full
stock
common
i
q u
re-
Bates
and
The road operates in one of the
most
should include
his
on
branch offices
our
also owned.
are
tion. Other
vestments, particularly
148 State St., Boston 9, Mass.
Birmingham, Ala.
Mobile, Ala.
Direct wires to
Important
But has the average investor fully
measured
the
impact
of
this
Request
on
New Orleans, La. -
Ordi¬
subsidiaries, refrig¬
erator lines, coal and real estate
chemical
Under
existing conditions, no
security should be recommended
10
change
Analysis
N. Y.
NY 1-1557
truck and bus
Southern
S. E.
Bonds of 1949)
which
in
inidwestern
Plant
Co.,
(Missouri Pacific 5Vi% Convertible
after incorporation
Delaware.
flation,
the
is
grant
dividend
We hear
and
power,
100-year
50-year dividend record,
the
future
giant,
General Motors Corporation, be¬
cause in
the final analysis I be¬
lieve that the brain-power, man¬
How¬
flowed without interruption since
U. $. THERMO
HAnover 2-0700
D. T. Moore & Co.,
New York City. (Page 37)
interests
compare
with that of the men
the congested
charged with responsibility for the
large eastern
destiny of this giant corporation.
become a necessity
cannot
or even
com¬
few
has
history,
manufacturing,
living.
stock of that industrial
come
Curb Exchange
more
from
a
well-rounded
Motors
and threats of
this uncertain
mon
York
25 Broad St., New York
4,
Shares—Charles S. Moore,
nary
The security that I like best for
Corpora¬
many
in
and
merce
General Mo¬
BROADWAY, NEW YORK 5
American Air Filter Co.
Railway
York Stock Exchange
confidence, noting the
war
proceeds down the inflation road,
and
recognizing that an atomic
age is bound to bring sweeping
history.
Tel. REctor 2-7815
Pacific
New
per* New
continuing impairment of our mining, manufacturing, lumbering,
money's value as the government agricultural and commercial in¬
the
terprise
Exchange
Exchange
In¬
war,
have
largest
Members
Canadian
in¬
this
Corp.
5^4s of 1952—Louis Lober,
Partner, Lober Bros., New York
City. (Page 37)
It is most difficult to view the
a
shadow of
reached
York
in
Utility
come
of
and
Public
Partner,
sales
York
a
manage¬
know-how
Steiner, Rouse & Co!
AT embers
Central
they
Corporation
manufacturers
rporation
whose annual
McpONNELL&ro.
and
Motors
rou¬
ble, Partner, Oppenheimer &
Co., New York City. (Page 2)
dustry.
c o
Since 1917
plants, tools,
brains
ment
General
other
plan¬
develop
will
in
Louisiana Securities
5*4% Convertible
Bonds of lt49—moen ti.
into
It
However,
Specialists in
New
again
once
economy, where
bureaucrats and military
;
Bought—Sold—Quoted
Missouri Pacific
war
procurement officers turn for huge
easy to understand why
children may not care for giants.
New
move
all-out
peace,
(General Motors Corporation)
Teletype NY 1-583
BArclay 7-5660
I
Alabama &
Corp.—George W.
i-resident, Securities
Inc.,
Jackson, Micb.
demons,
offer to sell the securities
an
and
General Motors
be,
to
Thursday, September 21, 1950
Selections
in the investment and
advisory field from all sections of the country
participate and give their reasons for favoring a particular security.
.
Week's
Participants
Their
.
.
is
already
active
an
1
for 37 Years
when-issued market for all of the
new
securities
and
paper
have been discounted by
as
77%.
This
consummation
shows
of
the
^profits
as
much
clearly that
plan
is
re¬
National Quotation Bureau
Incorporated
garded as almost certain.
Owners
of
the
convertibles
could
keep
their
bonds
and
re-
Established
46 Front Street
CHICAGO
Continued
0
npage
37
1913
New York 4, N.Y.
SAN
FRANCISCO
Volume 172
Number 4944
...
The Commercial and Financial Chronicle
(1083)
index
Steel Industry Will Do the lob
By BENJAMIN
Denying privately owned steel industry has not lived
responsibilities in
■
and
war
War, Taxes and Security
current situation
to its
up
Mr.-Fair less points to 90%
peace,
nation's steel capacity in last 11 years.
increase in
—J.
Page
AND COMPANY
Prices
.
r
Quinn and G. M. Haas___________
Cover
IF I
What's Ahead for the Bond Market?—Alfred J. Casazza
plant capacity also to take
Bank Mergers
Job^-Benjamin Fairless____i_____
3
.
in New York City—Morris A. Schapiro
4
strikes
as
steel will cooperate
It has always seemed to me that,
in
well-run
any
ought
sit
to
time
down
talk
and
business,
to
with
over
tneirboss.
,
Now
may
that
think
I'm
of
lot
a
people
the
boss
of U. S.
Steel;
desire—of
its
customers.
its
of
of
their
want
is
the
to
pay
all
demand
how
ter
the bank
sound
have
I'm
you
You
members
the
of
National
Association
will
Agents,
leagues in this
specializ e d
fess ion,
pro
total
small fraction of
production.
You
our
are
customers, and
so
our
it
is
you, and
°f °ur
the purchasing agencies
government, who deter¬
mine just what kind and
quality
of product
much
we
what
shall turn out,
how
produce, how big
shall
we
small
or
shall
we
become
ultimate
our
and
steel-making
capacity shall be.
All of
us
We
ness.
compete for your busi¬
exist
to
serve
and
you,
we shall continue to exist
only so
long as we do serve you to your
satisfaction. So you are the boss,
and my purpose in coming here
tonight is to discuss with you
of
some
Now
mutual problems.
our
mutual
our
problems
the moment boil down to
deniable fact:
be,
payment
one
today.
Let
the
nounce
that
it
un¬
is
shortage of steel. In spite of
everything we have done and can
do, we are not able today to turn
a
out all of the steel that all of you
government
is
ra¬
butter or sugar, and
within
the twinkling of
almost
meat and butter and sugar
eye,
entirely
disappear
shelves
corner
the
it will—a
that
announced
steel
year or
fear
for
the
think
two, decide to buy it now
the government will not
permit them
same
to
reason,
get it later. For
people who had
a
building
new
or
new
a
factory, or to buy new machinery
equipment, decide suddenly to
things now, while the
getting is good. And so the orders
that would
normally be spread
out over several years are sud¬
months.
few
a
into the space of
crowded
denly
these
buyers
These
critics
base
their
fact
the
But
that
face delay
now
in
the
American industries
logical, but deceptive pre¬
mise, that it is the obligation of
the
industry to supply all the
the
steel
turned
on
may
any
that
jump
clusion
the
present
has
steel
beyond
any
to
the
proves
shadow of
tional
happily
that
shortage
its
American
people
ever want at any time under
circumstances. From therej
they
try
the
con¬
doubt that the indus¬
a
lived
not
up
responsibilities,
management
can
no
its na¬
and that
longer be
to
Now,
their
course,
in
premise
out
in
since.
Not
total
high
as
is correct,
theory; but their con¬
clusion is ridiculous.
Certainly it is the responsibility
as
to
more
a
everything
locomotives—
goods in 1943
even
'today is our na¬
production
industrial
it
was
then.
today the steel industry is
nearly
12
whole—
oth^r year before or
any
tion's
million
more
And yet
pouring
tons of
ingots than it did then.
using 100 million
produce a smaller
tons of steel to
quantity of goods than it manu¬
factured out of only 88 million
tons, seven years ago. Now
what's
happened to the other 12 million
address
;An
the
Annual
Chapter
of
Purchasing
Sept.
14,
by Mr. Fairless before
Meeting of the Philadelphia
NEW YORK
Giant Portland Cement
Treasury-Federal Reserve Split—Aubrey G. Lanston
11
"A
13
Report
United Nations"—Trygve Lie
on
Lear, Inc.
World Bank Progress in Troubled
Hytron Radio
Times—Eugene R. Black___ 14
Current Investment Problems of Savings Banks
Reeves
—August Ihlefeld
Ely Pfd.
15
Mobilize Our Leadership
Franz Pick
16
Now!—Murray Shields
TIME, Inc.
17
Five Years of Federal Squandering—Senator Harry F. Byrd__
19
How to Curb Inflation—M. S.
21
Bought
Szymczak
Storing Household Goods—Roger W. Babson
*
_
Shall
How
Profits
Finance
We
the
Tax
*
Our
—
Sold
Quoted
—
47
*
Arms
Program?
Answer?—Debate
Is the
between
J.F. Reilly&Co.
Excess
George
Incorporated
Ter-
borgh and Senator Joseph C. 0'Mahoney___
Productivity
Farm
at
Peak,
of New York
Reports
61
Bank :
Reserve
"Popular Economics" Magazine Makes Its Debut__
International Monetary Fund Reports
Course
__
Phone
to
1
Philadelphia
on
18
Devaluations J
_
23
23
TECO, Inc.
27
__
Any Time Is "An Ideal Time" for This (Boxed)
w. i.
;
'[
Prospectus on Request
Regular Features
I
As We See It
Bank
(Editorial)
Cover
u
Bought
—
i
24
Coming Events in the Investment Field
Singer, Bean
16
.:____
Dealer-Broker Investment Recommendations.
8
___
Einzig—"Guns and Butter in Switzerland"
18
the News—Carlisle Bargeron
2-0270
40
Exchange PI., N. Y. 5
*
Indications of Business Activity..
Teletype NY 1-1825 & NY 1-1826
40
Funds
'
20
8
NSTA Notes
News About Banks and Bankers
BUY
25
Observations—A. Wilfred May
5
Reporter's Report
S.
U.
SAVINGS
47
Governments
BONDS
14
Prospective Security Offerings
44
Our Reporter on
Securities
Public Utility
Securities
35
26
■__
Salesman's Corner
29
Registration.
Securities Now In
-
Prompt fa/in# Setuuce
42
-
Security I Like Best
The
2
The State of Trade and Industry
Tomorrow's Markets
To Western markets in
5
-
(Walter Whyte Says)__
LOS
38
Washington and You
■
FOR BROKERS AND DEALERS
ANGELES
DENVER
48
•
SPOKANE
•
SALT
LAKE
CITY
tons?
Well,
the National Association of
Agents,
Philadelphia, $\Pa.,
;
1950.
it
is
probable,
Continued
for
*Not available this week.
one
on page
36
Twice
Published
1
Weekly
Drapers! Gardens, London,
c/o Edwards & Smith.
Eng¬
C.,
E.
land
COMMERCIAL
The
We
are
interested in* offerings
and
1950 by William B. Dana
Copyright
of
CHRONICLE
FINANCIAL
/
High Grade Public Utility and Industrial
WILLIAM
25
DANA
B.
Park
Place,
REctor
preferred. stocks
COMPANY, Publishers
New York 8, N. Y.
2-9570
to
DANA
25.
ary
York,
1942,
9576 *
SEIBERT,
under
«Spencer Trask & Co.
.
Members
New
25 Broad
York Stock Exchange
President
Street, New York 4
HAnover
Albany
50 Congress Street, Boston 8
.Hubbard 2-8200
2-4300
-
1-5
Teletype—NY
-
Chicago
-
GlensFalls
<
-
-
Worcester
Business
at
New
March. 8,
of
Manager
Dominion
of
Union,
Canada,
Countries,
Members
S.
of
year;
in
per
$48.00
$52.00
per
U.
States,
and
$45.00
per
J. A. HOGLE & CO.
ESTABLISHED
year.
Members
year.
Other
and ad¬
vertising issue) and every Monday (com¬
plete statistical issue — market quotation
records, corporation news, bank clearings,
Every
Thursday
and
Other
Chicago
city
news,
Offices:
3," 111.
(general
135
etc.).
South
(Telephone:
Publications
'
Bank
the
La
State
Salle
St.,
2-0613);
and
rate
Record «-t- Monthly,
Quotation
per year.
Note—On
(Foreign postage extra.)
account
of
of exchange,
the
fluctuations
remittances
in
for for¬
eign subscriptions and advertisements must
be
made
in
New
York
funds.
.
»
>
and other Principal Exchanges
*
news
$30.00
1915
New York Stock Exchange
Thursday, September 21, 1950
state
Schenectady
RIGGS,
matter Febru¬
office
Act
United
in
Territories
Possessions,
Other
-
Members New York Curb Exchange
D.
post
the
Subscription Rates
Subscriptions
Pan-American
WILLIAM
the
at
Y.,
N.
second-class
as
1879.
SEIBERT, Editor & Publisher
HERBERT D.
WILLIAM
Company
Reentered
Patent Office
U. S.
Reg.
;
mackie, Inc.:
&
HAnover
Our
Sold
5
Canadian Securities
Mutual
—
22
Business Man's Bookshelf
From Washington Ahead of
'I
Quoted ;
'
Stocks-
Insurance
and
.
22
Commodities
on
Teletype NY 1-3370
Direct
18
International Monetary Fund States Gold Policy
New
r
Broadway, New York $
12
Federal
,
Railroad Securities
Gentlemen, think that one over
a moment.
It means that our
today is
for
10
for
nation
left safely in private hands.
of
than
hairpins
as
of
manufacturers
from
show that
records
Government
attack
get
8
Bill—Harvey M. Spear
these
get
the American people.
critics.
WALL STREET,
planned to build, at some future
time,
I
Telephone: WHitehall 4-6551
BO 9-5133
they may
need a new car, a new ice box,
or a new stove within the coming
who
People
Socialist-minded
all of you want it.
as
The Frear
on
run
develops overnight
getting all the steel they want, is
certainly no proof that the indus¬
try has failed to live up • to its
public responsibilities, or that it
has misjudged the real needs of
fast
as
Seldom in my
have
I
known
,
Building-Up Bank Investment Policy—L. Sumner Pruyne
ration steel—as it has
or
cash
St.
7
your
lifetime, however,
any
fact to be
twisted, distorted, and lied about
as
that one has, by some of our
want
Duties of Bank Investment Officer—F. Brian Reuter
government finds it necessary to
allocate,
99
6
..
at
when
And
grocery.
the
the
from
showcases
and
99 Wall
an¬
planning to
tion meat, or
an
6
Factors in Investment Management—Thomas F. Lennon
International Gold Markets Post-Korea—Dr.
Situation
Steel
Well, that's how it is with steel
and
at
At present there
delay
supply of cash
that
prove the
bank isn't well-man¬
aged? Has it failed to live up to
its public responsibilities?
The
at
may
of
and
col¬
your
to
things stand,
at once,
be assembled. Now, does
can
Pure h asin g
principal
and
until the necessary
In
not.
are.
a
all of
they simply can't get it. No mat¬
it
reality,
buy all but
all
they
once
money
but, of course,
Benjamin F. Fairless
if
But
in at
come
their
obsoletes in
as
ob¬
whenever
money.
the customers
of
care
it
depositors
my
throw
dp appreciate
them
bank
And
any
I'd just
.
well-
any
managed industry to take
ligation
4
—Winthrop H. Smith
the
—and
I
Public Relations and Training Programs in Financial Industry
for nation's security.
men
time
from
things
Economic Impact of Defense Production Act—M. R. Neifeld__
i
the wastebasket. But
civilian needs.
Says present steel shortage is due in part to
well as to rush orders, and predicts patriotic men of
A
MILLION...
Steel Industry Will Do the
of
care
HAD
Cover
Says in
military steel demands will be given priority,
but looks for increased
J.
llCMEflSTfl
B. S.
Articles and News
F. FAIRLESS*
States Steel Corporation
President, United
3
50
Broadway, New Yodi 5
Telephone WHitehall 3-6700
Teletype NY 1-1856
,
;
(1084)
,4
The Commercial and Financial Chronicle
in
BankJHergers in New York City
the
This
same
on, tne
bank's stock, presents a
markedly different picture. Thus,
By M. R. NEIFELD*
the current market quotations,
these results are at the rate of:
New York City, bank
stock specialist gives
as
reasons
for this development:
(1) profit to stockholders of absorbed institutions; (2) low
rate of earnings of New York City banks; and (3) low market
prices of some bank shares. Reveals meager operating earn¬
ings and dividend payments of leading New York City banks.
Sees shift in business scope of City's "Blue Ribbon" banks.
Vice-President, Beneficial Management Corp., Newark, N. J.
on
mergers
They
are
have
in the
are
news.
not
however,
new,
and
continuing throughout
the nation quietly but in increas¬
ing
numbers.
Recently, be¬
solidations
Reten-
of their
cause
number
the
with
the
ready
for the
at¬
efit.
In New York
cated the
jority
In one
fied,
bank
lo¬
at
ma¬
of
A.
Morris
Schapiro
of
eligible for investment by
savings bai.ks of Massachu¬
$41,
quoted
earlier.
the eighth and
only
must be
we
Last
even
or
But
the
Friday
the
President
of
United
States signed the De¬
Production
Act
of
1950.
fense
Section
410
of that Act
reads:
"Each
un¬
tract
a
New York is
of
the
the
so
a
nerve
sold
have
from $130
partments
tract
by
provid-
of
one
ing for the
expedite
ies
of
have
chickens
dent
may
turkeys
assumed
largest bank to be
by
depart -
any
m
e
n
t
or
of the
agency
U. S. from any
con
at
into
time
any
when
after
seen
Without
a
nation's
"
33rd
Annual
Convention
Association
of
other
cf
the Savings
Massachusetts,
Portsmouth, N. H., Sept. 16, 1*950.
book
In
the
values
are
Darling
relatively low.
and weal and
COMMON
in
portant
And
tear
the
obsolescence
not
so
of
are
banks.
case
Hence, the book value
is
Request
cn
not
comparable
of
to
im¬
bank
a
the
book
value
of an industrial.
The eignt
transactions in New York
City are
evidence of this.
Moreland & Co.
Shares Quoted Below Book Value
Members:
Midwest
Detroit
loBl
Stock
Stock
Exchange
Among the surviving New York
City banks, shares are still quoted
Exchange
Penobscot
Building
DETROIT 26, MICH.
Bay
at
City
tion
—
Lansing
Muskegon
—
less than
of
book
the
value,
discount
a
reflec¬
which
the
market places on the stockholders'
money.
fllllllllllllllllllllllllllllllllllllllllllll
ing
earnings
Alabama-T ennessee
Natural Gas Co.
Dan River Mills
!
Rich., Fred. & Pot. ' D. 0. * U
•
are
clear.
If
'
a
$5 per share
equal
Such
■
is
power
J
,
and
an
appraisal
unreal
in
In New York
Scott, Horner &
Mason, Inc.
LD
33
liifiiiiiiiiiiiiiiiiHuniiuiiiiiiuifiiiiiiU
combined
not
temporary but is based
mental
conditions
of
He
bankers everywhere.
ing
power
lore
is
too
mergers
to
Bank
earn¬
low, and thereapproved
by
lated
purposes.
He
Stockholders
direct
may
what contracts shall take
priority
of
performance over any other
contract
and
allocate
are
stockholders.
materials
order
he
and
and
by
three
These
major
are:
satisfactory
(2)
(1)
considerations.
attainment
deposit-capital
unbalance
of
of
a
ratio;
distribution
of
capital among the New Yrork City
banks, and (3) the public interest.
The
book
is
the
out
value.
of
line
deposit-capital ratio of the
market
for
net
City 19 banks had
current
'This
was
their
equal to
total
a
Eighty million dollars (or 3.60%)
was
declared
in
qpd $48 million, or
cash
dividends,
2.13.%, retained
time
deposits
ratio of 10 to 1.
In
1949.
accounts.
and
of
around
$23 billion.
The
stock¬
holders' investment in these banks
is about $2.4 billion.
Here is a
operating
rate of 5.73%
capital
demand
other
days
satisfactory ratio
a
good
earning
%
this
was
not
be
accumulated
reasonable
personal
or
No
in
demand
excess
of
standard
is
fine
year,
spelled
of
and
facilities,
other
quite
facture, servicing,
such
processes,
or
industrial
facilities
by the United States Gov¬
ernment; and he can install gov¬
ernment-owned
equipment in
plants, factories, and other indus¬
trial
facilities
owned
by
private
persons.
For these purposes there is
ap¬
propriated
$1,400,000,000, and
an
additional $6,000 000 may be bor¬
rowed from the
Treasury of the
U.
S.
To prevent
inflation, to stabilize
living and to assist in
the cost of
maintaining
between
the
supply
services
reasonable balance
a
purchasing
of
the
power
consumer
President
and
goods
may
ap¬
voluntary
programs
and
agreements by business, agricul¬
prove
ture, labor and consumers, which
otherwise would violate the anti¬
trust
laws and
Federal Trade
All
the
decrees of the
Commission.
Powerful
Where
Controls
Granted
voluntary programs
are
not effective the President may
sue
is¬
regulations and orders to fix
Continued
on
page
26
-WE OFFER596,000 SHARES
Common Stock of
FEDERAL
TELEVISION CORP.
at
50c per
share
or
Broadway, New York
^WO 4-0780-1-2=^;
or
on
im¬
or
both.
out
Established
1856
for
H. Hentz & Co.
Members
New
York
Stock
New
York
Curb
New
York
Cotton
Commodity
operation of
Chicago
New
Without regard
to provisions of
relating to the making, per¬
formance, amendment, or modifi¬
Exchange
Exchange
Exchange
Exchange,
BoaYd
of
Inc.
Trade
Orleans Cotton Exchange
And
other
Exchanges
law
a
capital.
high expenses,
and increaspage
JOHN F. McBRIDE, CO., Inc.
135
equipment.
through
on
or
owned
facilities necessary for the manu¬
cation
Continued
these
business,
"reasonable demand."
rate
But in these days of
low interest rates,
refine
improvements to plants, factories,
may
home consumption,
penalty of $10,000
prisonment for one
to make possible
on
and
other
transport,
the
of
aware
and
facilities
accordingly. Freedom of manage¬
implications of this development ment is in abeyance.
Inventory
and
have
become
increasingly controls reach right into the fam¬
sensitive to its potentialities. The ily cupboard. Scarce materials as
trend would seem to be
governed designated by the President may
are
fuels,
for
metals,
install additional
equip¬
can
ment,
merely
materials
and
facilities
funda¬ from civilian to military and re¬
on
concern
Presi¬
of
He may
process
certain
is
trend
merger
liquid
limita¬
the
provision
blanche
carte
the
bank's
earnings of $128 million in
on
Lynchburg, Va.
83
given
the
to
resale
materials.
store,
to
or
'l
LY
is
to
deliver¬
materials.
curtail normal civilian
produc¬
tion and purchases and to redirect
earn¬
equities.
—-♦—
Tele.
President
But despite the complexities of
the problem, it is apparent tnat
New York City banks does not
At his discretion the President
only
provide them with enough earning may commandeer (requisition is
5% on its book value of
$100, the
assets to produce a fair return on the polite word) the use of any
market would have to
appraise
these earnings at 20 times for ihe capital. Banks in the New York equipment, supplies, or component
thereof,
or
materials
or
Clearing House show total net parts
quotation to
Trading Mar bets
,5|J
The impact of low
To promote national defense the
Merger Trend to Continue
of
usually
outright liquidation. Invest¬
in plant and
equipment is
ment
Latest Information
case
realizabie, often readily realizable
through merger, sale of assets, or
even
L. A.
businesses.
banks,
and
law,
make
or
minerals,
raw
.
Banks
regard
existing
purchase
tractor,
entered
holders of the selling bank repre ¬
sents
the final net book value
of
of
or
as
facilities
production
tions
its
departments
expand
services needed for national
defense.
processed
after
con¬
deemed
or
mer¬
In a ' cash
liabilities
any
operation
these
to
purchase
money.
finance
may
other
or
necessary
con¬
ceiling
appraisal of its assets and
their stock rise
prices are in
determination
of
its
direct and
share in July to $230
M. R. Neifeld
effect under
contingent liabilities.
Stockhold¬
private ra share today.
They need only
this
Act
for
banking
system
and
since
its ratify the transaction to receive ers of the selling bank thereby
whichever of such fowl is covered
redeem
their
own
shares
with
problems are in many ways not their full benefit.
their own money. Meanwhile, the by such contract, shall contain the
unlike
those
existing
in
other
(with
such
Stockholders Benefit
acquiring bank's stockholders find following provision
areas,
bankers everywhere
are
change as may be necessary to
anxious as they watch these star¬
Under the circumstances, stock¬ their institution benefiting from
describe the fowl covered
by the
holders obviously are attracted to new branch locations, new cus¬
tling merger developments.
tomers and increased deposits. All contract):
Our purpose touay is to con¬ such merger proposals.
Individ¬
'The
contractor
represents
sider the reasons
behind
bank uals have an immediate gain and this, remember, at no cost to the
that the contract
price is based
acquiring stockholders unless a
mergers in New York City. This trustees are enabled to conserve
upon an estimated price paid to
development has growing signifi¬ assets for beneficiaries. Further¬ premium was paid for good will. the
producers for live chickens or
The
earnings of the retiring
cance to
the private and institu¬ more, the proceeds can be placed
live turkeys to be
processed here¬
bank now
become those of the
tional investors whose capital en¬ in shares of other equally desir¬
under.
In the event and to the
ables commercial banks to operate able banks,
available at a dis¬ buyer whose added earning power extent that the
actual price paid
may be roughly estimated at x/z%
count.
as private
enterprises.
to the producers of live chickens
of
the
new
deposits
acquired.
This
situation
When the most lecent merger
and live turkeys purchased for the
clearly demon¬
Thus, as a result of the eight mer¬
proposal is ratified by stockhold¬ strates that in these years of high
performance of this contract is
ger
transactions
in
New
York
prosperity, New York City banks
ers, a total of eight commercial
less than such estimated
price, the
City, the acquiring banks, whose
banks in New York City will have as a group are not earning enough
contract price shall be reduced
by
deposits are now $725 million
been retired since e~rly 1948. The on their stockholders' money.
the same number of cents or frac¬
If
they were, their shares would not higher, have increased earnings tion
banking
assets
rep.esented
by
thereof, per pound.' "
of nearly $4 million.
these eight banks were consider¬ be quoted in the market place at
I don't know what all that fowl
These are the mechanics of the
able.
Together, they had total such a discount from book value
It
is just one
merger operation in its broadest language' means.
deposits of $725 million, now held that merger proposals become ir¬
outlines. Actually, however, many minor item in the biggest bundle
by the surviving banks.
These resistible. Stockholders of banks
complex factors are involved. In of powers ever handed to the
eight banks had total capital ac¬ whose shares are quoted at a pre¬
every
instance such transactions Chief Executive. If the full range
counts of $61 million. Their stock¬ mium or at book value are not
require the approval of the bank¬ of powers under the Act is in¬
holders will have received about likely
to consider selling
their
ing authorities. And in each case, voked by the President, the whole
banks.
$52 million in cash and about $11
the acquiring bank must have a face of America will be changed.
It
is
generally conceded that
million in stock. Stockholders, in
sufficiency or excess of capital to That Act sets the economic cli¬
many common stocks are Selling
mate in
which you will be op¬
warrant
the
assumption of the
particular, are asking the question below their
intrinsic values. Bank¬ added
erating for the duration.
liabilities.
ing, however, is different from
•An address by Mr. Schapiro at the
the
setts.
center
careful of misdirected efforts in
nation's economy can almost take
present program in its stride.
a
effect, used to redeem its out¬
standing capital stock.
The capital released to stock¬
few
a
military outlays, since overall productive
of this, with little reduction in civilian
care
own
includes
transaction
ever
applying provisions of Defense Production Act, and concludes
by .tne acquiring
bank, the capital funds of the re¬
tiring bank are released and, in
market
Stockholders
the
been
selling
a
premium
a
appraised book value?
ger,"
redeem their shares
can now
v/eeks
banks
the
$69 per share against
price
the
of
With its
powers
need not be used
powers
holders'
transaction, just rati¬
stockholders
is
there
merger,
Warns
gives biggest bundle of
Holds main
premium for good will, the acquir¬
ing bank spends none of its stock¬
of
stockholders realized the full ben¬
tention.
are
excess
previously
quoted
market
price lor the bank stock, and tne
aroused
City
far in
the
they
national
at
the value realized
was
each
take
can
supplies.
2.13%
2.70%
other bank at
then-
less
bank
3.00%
4.50%
at a discount, how can the
acquiring bank justify to its own
stockholders the purchase of an¬
profitable
were
In each case,
in
York
have
These
5.73V
7.20%
stock
applica¬
sold
value
value
recurring question.
The first fact
stockholders
book
market
With
al¬
temporary
reasons
of
a
the
the
On
potential
tion
are
transactions.
dations have
City,
the
banks.
which
New
of
nature, or are they
growing importance and
is:
consoli¬
occurred
witness
On
prospect.
the deeper question is:
reasons
for the mergers
tion to other banks?
and
rapidity
these
in
are
But
it
under contemplated
City Banks
whether other absorptions or con¬
been
1950 and maintains
handed to President.
1949 Performance of 19 New York
Div'S.
,
Dr. Neifeld analyzes
provisions of Defense Production Act of
earnings, 7.2%; cash dividends or
yield, 4.5%; and retention, 2.7%.
N.C.O.E.
Bank
Thursday, September 21, 1950
.
Economic Impact of
Defense Production Act
their
discount.
a
.
of
rate
for
discount which the market places
recent bank mergers in
on
The low
reason
performance, how¬
when viewed in terms of the
ever,
President, M. A. Schapiro, Inc.
Commenting
the
is
shares at
SCHAPIRO*
By MORRIS A.
business.
5.73%
.
21
of
contracts, the President
various
government
de¬
*An
address
by Dr. Neifeld at the
Accounting Conference, Rutgers Univer¬
sity School of Business Administration,
N.
Y.
Cotton
Exchange Bldg.
NEW YORK 4, N. Y.
CHICAGO
DETROIT
GENEVA,
PITTSBURGH
SWITZERLAND
Volume 172
Number 4944
Commercial and Financial Chronicle
The
..
.
9
(1085)
Bell V.-P. and Cashier
Steel, Production
The
-Electric Output
Of Chase Nafl Bank
.
Carloadings
Retail Trade
State of Trade
Kenneth C. Bell
Commodity IVice Index
Vice-President and Cashier of the
Food Price Index
Chase
Industry
National
Business Failures
J
retire
the
in
future
near
as a
As was the
case
in preceding weeks, accumulated claims for
unemployment insurance continued to taper off in the period
ended Aug. 26 but, contrary to this trend, initial claims underwent
a
slight seasonal rise.
very
wise.
labor
the
front
With respect
company
stated
with
tract
news
favorable
both
was
other¬
and
to the strike at the General Electric Co., the
International
CIO
Union
(Independent) became effective
Workers.
Sunday, last, with the signing
on
Both unions represent more than 100,000
two-year contract.
a
workers in 116 General Electric
plants throughout the nation.
The CIO pact calls for a 10-cent
hourly wage increase. A costof-living pay rise arrangement is provided following the pattern
set by the CIO United Auto Workers and General Motors.
The
U.
approval by the membership
contract, subject to
and the U. E.-G. E. Conference
Board, provides for an hourly wage
increase of 10 cents, 5 of which had been placed in effect last
July 1 and 5 to become effective as of Friday, the date of the
agreement.
Unlike
the
CIO
escalator wage
provision
for reopening wages for negotiation after the first six months of
the contract. Other provisions are for pensions ranging from $125
to $196 a month, depending upon length of service.
clause based
union, the U. E. rejected
an
the cost-of-living index, and obtained a
on
In addition to the General Electric settlement, the Farm
ment
Council
Workers
the
United
years
directors,
has
been
Workers
Electrical
a
democratically unified Korea, and otherwise
establish the moral authority of the United
charge of the bank's
Insurance Department and Vicethe
of
Chase
Safe
been
years
been
with
the
in
entered
many
in the U. S. Navy
career
Chase, which
1919
after
serving
the
at
Association's
Graduate
Banking
Rutgers
is
the
at
School
For
example, the question whether China's
University.
A. Wilfred May
American
Society of Corpo¬
rate Secretaries, Inc.
At present
he is serving his second term as
world's
President of the Canadian Society
of
New
York.
Born
in
West
is the
nese
Africa
Communist Government
or
"reactionary" one, and which one is actually a
"puppet clique," like the other issues being i
bitterly bandied about the floor here this
afternoon, will ultimately be settled not by the;
of
desire to
the
American
of
he
parents,
missionary
graduated
was
from
University of Toronto in 1916.
objectively determined facts, but by the con¬
tending Powers' bargaining strength on the
diplomatic chessboard.
some
quarters <
bring them in on his own initiative after the ending of
fighting. Conversely, the Kremlin is probably really
desiring Red China's continued exclusion with the odium attached
the Korean
verdict
Equip¬
Union
It is suspected in
that Secretary Acheson is merely maneuvering to delay the Chi¬
Communist regime's admittance to accord with his concealed'
to Mr. Acheson.
be
Big
on
In any event, the sole determinant of the UN's
internal and external political questions will
China's
Nation
overbalancing diplomatic-military power.
The
openly laid the charge before the Assembly
this afternoon that the Nationalist Government's prolongation
"depends on U. S. guns."
The votes may well follow the Big-ger
Polish representative
Harvester
Stick!
eight-cent hourly boost and a cost-of-living escalator clause,
General Motors pattern, while in Toronto, an offer by
an
propaganda tool.
as a
Nationalist
Bankers
director and treasurer of
a
validate itself and
so
any
The Facts Not the Vote Determinants
in World War I.
American
as
service
For 11 years beginning in 1937 he
was a lecturer on insurance sub¬
jects
But if it does
major decisions are reached, it
is becoming ever clearer that this will result
not from parliamentary logic, but purely and
simply from power politics. The fireworks of
the Vishinskys constitute a mere side show,
widely known in in¬
Mr. Bell's entire business
he
insofar
and safe deposit circles.
surance
has
Nations.
De¬
workers accepted a new contract
for
Perhaps this session will reach its goal of a
the bank since
of
ended its strike at the nine plants of the Interna¬
Co.
At Buffalo, N. Y., the CIO United Autowith the Bendix Corp. providing
(Independent)
tional
of
three
for
MEADOW, QUEENS, N. Y., Sept. 19—Retiring
President Romulo's prayer here today for the future of the General
Assembly, including its elevation from a mere debating society to
an
effective partliamentary body, may conceivably come true.
In
1942.
He
E.
who
secretary of the Chase
of
Vice-President
on a new con¬
Electrical
of
Settlement of the strike with the rival United Electrical Workers
of
Bell,
been
board
posit Company, he has for
Friday, last, that it had agreed
on
the
the
*
*
Assembly's Re-Opening
FLUSHING
President
*
On
Mr.
has
As Noted From the
than 40 years of service with
more
whole, aggregate industrial production held
fairly steady the past week, and when compared with the similar
week in 1949, total output was sustained at a noticeably high level.
By A. WILFRED MAY'
UN's HOUR OF CRISIS
after
the bank.
For the nation
ssss
Bank
by
the
board of directors yesterday.
He
succeeds Albert J. Egger, who will
Auto Production
and
Observations.
appointed
was
East Versus West Versus UN
after the
Ford
of
for
Canada
rejected by
officials of Local 200 of the CIO-UAW. The company described
the contract as "the best in the Canadian automobile industry."
five-year
new
a
Further unfavorable labor
the
Ohio
Edison
November
with
Co.
the
at
B.
F.
news
contract
was
indications
Goodrich
Co.
was
the report of a strike at
of
a
possible walkout in
At present about
plants.
involved in the walkouts result¬
ing from disputes over overtime pay for swing shift crews. The
Hanna Coal Co., subsidiary of Pittsburgh Consolidation Coal Co.,
one of the companies affected, alone produces 35,000
tons daily.
At Chicago, the CIO Packinghouse Workers Union has asked its
executive board in Chicago to authorize a strike against Wilson
& Co. plants in seven cities.
5,000 miners of four companies
are
steel industry this week the situation with respect
In the
system, are pressing even
harder this week for tonnage, but are meeting with stiffer resist¬
ance from producers who are practically sold out for the remainder
government-sponsored
of the
Manu¬
Association, New Center
Building, Detroit 2, Mich.—Paper.
Bernard
Baruch—Portrait
Citizen—W.
L.
of
a
White—Harcourt,
Brace and Company, 383 Madison
Ave., New York 17, N. Y.—Cloth
to
supplies remains critical. According to "Steel," a national
metalworking magazine, steel consumers, pending establishment of
steel
a
Edition—Automobile
facturers
—$2.00.
*
*
Automobile Facts and Figures—
30th
allocation
Only for national emergency work are buyers able
to make noticeable progress getting additional tonnage on mill
books, and then only after requirements are thoroughly scrutinized.
A little tonnage is available in the premium markets, but this
Causes of Industrial Peace Un¬
Collective
der
Marathon
Bargaining
Corporation
Association.
N.
800
—
The
Seven
Planning
vs.
Labor Unions—National
Twenty-first St.,
W, Washington 6, D. C.
year.
Faith?
Plea for
P.
Purpose and Power
a
—
A
Positive Policy—James
and
Straus
Warburg—Farrar
represents but a drop in the bucket compared with consumption.
Co., 53 East 34th Street, New York
production is pushed to the limit of available facilities but
the steelmakers are falling behind demand steadily.
Asignificant and succinct statement of the position at which
the UN organization has now arrived was stated tonight by Brit¬
ain's representative, Sir Gladwyn Jebb, in an address before the
U. S. Council of the International Chamber of Commerce.
Surely
the above-outlined balance-of-power, or balance-of-ideology, con¬
cept of ours is validated authoritatively by the British leader's
following frank conclusiofi to his talk: "So long as this attitude of
mind [the worldwide promotion of Communism]
persists, th&
United Nations cannot in the nature of things pursue its prime
mission and achieve its high purposes laid down in the Charter.
We can hope and pray that the day will come when it can, and I
have no doubt that we shall powerfully assist its coming by help- •
ing the United Nations to do what it can and should undertake
now, namely, the gradual organization, both political and eco¬
nomic, of the [sic] free and democratic world."
\
Another strong and significant demonstration of the wrecking '•
of true world organization purposes resulting from the growing
East-West rift, is furnished by the mutually inconsistent aims and '
operations of the Point IV program.
On the one hand, United
States participation was approved legislatively with the preamble;
that its basic purpose is to further the foreign policy of the United
States and contain Communism.
On the other hani, contradictor¬
ily, it has been arranged to operate the Program through a United
Nations, of which the pro-Communist countries are co-members.
Surely "something must give"—either the rational or the allnation interest—when
6, N. Y.—$2.00.
Steel
How
As for
and
prices,
related
a
strong price tone prevails in the finished steel
markets,
but few
changes of
consequence
were
re¬
ported last week.
*
sfe
controls on industrial inventories to discourage
over-buying were imposed on Monday of this week by the new
National Production Authority along with curbs on consumer
instalment credit purchases of automobiles, furniture and home
Emergency
The order
appliances.
and
ficient
as
covers
semi-finished products.
stocks of 32
scarce
It is understood, however, that suf¬
leeway has been left to make the rules easy
the occasion warrants.
materials
raw
The
new
credit controls
or
were
difficult,
first made
C.
on
page
33
Scott—The
Girl—Edgar
1006-
Winston Company,
World—Otto
ron's
388
Changing
Mering — Bar¬
This
in
Tnves'ment
von
Company
Publishing
eventual
the
realization
UN,
in direct conflict.
a
this
of
pervasive
situation becoming
co
ated ever since the San Francisco Conference of
made
evident
the
need
rivalry between
stantly accentu-
Administration
Personnel
mig/it by the West. But it
doubtful whether its crucial and timely importance
j
appreciated, particularly by our European, friends. Britcontinuing negligence in this regard (in t>e 'ace of under-
•
ain's
t
Continued
on
page
Seidman & Seidman
Analysis of Develop¬
Stores—An
ments
and
Practices
and
Relations .Section,
—
j
Certified Public Accountants
Industrial
Department of
ANNOUNCE
THE
ESTABLISHMENT
Economics and Social Institutions,
OF
We
are
pleased to
announce
the formation of
Princeton
N.
'
University,
r. c.
roberts & co.
well
AT
DETROIT,
MICHIGAN
Textbooks—Max¬
in
Stewart
S.
OFFICES
Princeton,
J.—Paper—$2.50 Cloth—$3.
Prejudice
—
Public
LOCATED
Affairs
AT
*
'od 9
32
New
BROADWAY, NEW YORK
York
4
WHitehall 4-7925
Evans
RICHARD C. ROBERTS
ROBERT R. KRULISCH
September 15, 1950
6,
N.
That
Hayes
Frees,
—
The
—
Learne &
Sam
Live,
NEW YORK.
N.
DETROIT.
ROCKFORD,
BRADFORD, PA.
—
single
copies 25c (lower rates for quan¬
tities).
GRAND
D. C.
HIGH
ILL.
•
■
ILL.
RAPIDS. MICH.
EVANSVILLE.
MICH.
Seattle
Wash.—Paper
CHICAGO,
Y.^
WASHINGTON.
publishers, §001 Lakemont Drive,
5,
I
II
Y.—Paper—20c.
[I
Truth
•
BUILDING
PENOBSCOT
Committee, Inc., 22 East 38th St.,
Investment Securities
j
is fully
still appears
5,
Department
in
Relations
\
1945, has finally
for military
Inc.,
Boston
Street,
Newbury
The
nations within
are
Military Shortcomings
Mass.—Cloth—$3.00.
Labor
Continued
Nest Egg—Fi¬
Life
for
the
a
of
1016 Arch Street, Philadelphia 7,
Pa.—Cloth—$1.50.
public about 10 days ago and, included with the controls govern¬
ing industrial inventories, represent the first definite actions by
*
Lay
Facts
Average
John
*
to
nancial
they
Our
POINT,
LOS
ANGJ^LES, CALIF
MEMPHIS. TENN.
IND.
JAMESTOWN, N. Y.
N. C.
GARDNER. MASS.
FITCHBURG. MASS.
WARREN, PA.
r
i
16
,
6
(1086)
The Commercial and Financial Chronicle
enacted
Public Relations and
in
Training
Programs in Financial Industry
the
to
the
business
ness
in
the
doldrums.
losing
were
charged
Partner, Merrill Lynch, Pierce, Fenner & Beane
money.
from
financial
public
organizations to improve public knowledge of investments and
difficulties
investment operations.
tions
program
born.
In
be done
to
Public
relations
has
It
Says basic job of public education by
only scratched the surface and more
it
improve general attitude toward Wall Street.
Wall
in
Street
basic
the
been
and
has
millions
public
the
1
a-
tions, but un¬
til recently no
has
one
make
c
i
i
s
o n
or
phase
de¬
s,
tion
time
spend
to
cent
are
H. Smith
in
not
are
fronts
moving
even
Before
any
public
must
industry or
really embark
take
good
be
the
the problem
or
agent.
a
can
a
are.
determina¬
that
You
can't
relations
with
Washington lob¬
high-powered
by
knowing
by
the
and
of
a
demands.
Only
problem,
planning
tion
on
medicine
public
money or with a
byist
any
problems
must also
to
the
most
with
the
entire
press
careful
organization
any company succeed in hav¬
are
set
no
formulas
There
to
accom¬
results.
When
management of any
becomes serious about
this important subject, there must
be a
program
designed for its in¬
dustry and tailored for the par¬
ticular firm and for its individual
problems.
merely
mentals
are
a
of
Public
in
are
at
of
funda¬
These
the
public
every
program.
funda¬
foundation
investment
14th
a
of
in
a
given
series of
on
17
re¬
it
selling
airplanes
railroad.
lecture
public
whether
banking,
building
erating
*.A
organized
program,
ceries,
public
relations
it
tain seats for world
series games,
and other emergency
matters that
are
designed chiefly to please the
large customers, but that isn't
good public relations.
The importance of public rela¬
tions
be
must
major
instilled
function
head
in
the
into every
and
department
organization,
and
that I can't emphasize too much.
With this background which I
believe to be the only sound
pub¬
lic relations
philosophy, let's take
a
look
at
the specific situation
here in the Stock Exchange com¬
I
would
with
me
it
as
like
to
existed
when
our
Pierce,
10
situation
years
ago
Merrill
Lynch,
Beane, inau¬
and
present
our
back
go
the
some
firm,
Fenner
gurated
to
you
review
be
gro¬
or
op¬
Without these
Aug. 9,
on
being
were
N'ew York Stock
number
involved
well
lations
top
publicity by theatre tickets, per¬
haps publish a house organ, ob¬
that
vividly
public
rela¬
1950,
the
sponsored jointly by the New York
Securities Industry and the
University of
Vermont s
Department of Commerce &
Economics.
other
among
by
the
the
which
things
still
Pecora
disclosed
that
the
in¬
Exchange community
manipulated
prices.
Wall
Street
whole
has
been
decade
nunciations
political
subjected
to
from
circles.
stream
a
people
A
for
of
in
former
a
de¬
high
Presi-
of
the New
York
change had been
Stock
to
sent
ii.
Ex-
jail
o
for
a
e
embezzlement, the .Securities Act
0f
1933
and
the
Securities
and
Exchange
Act
of
1934
had
1894
been
because
that
Street
honesty
of
or
and
daily
to
be
proof
other,
bility prevailing in Wall Street—
but the public felt
differently.
Despite the fact that there were
millions of small investors and
speculators in the market in 1929,
it was still
commonly asserted in
Wall Street that for the most
pare
only the well-to-do
brokers,
and
these
understood
persons
of the
of
with
well-to-do
the
Exchange and
in favor
tion
dealt
functions
highly
were
its methods of opera¬
we
found even the
and
—
well-to-do didn't feel that
way.
Men engaged in the underwrit¬
ing
business
looked
the
at
sufficient proof of their economic
usefulness. However, the constant
and
finally
that neither
of
the
mar¬
government regulations,
convinced
them
the ethical
business
nor
usefulness
were
of
by
1939
economic
Street.
Fulton
There
is
a
advertising
that "If
want to
you
product, your first job is to
good product, and the second
sit back
it,
let
and
path
the
world
the
to
world
their
didn't work
Ten
out
would
door.
beat
Well,
it
a
apparent
that
this
philosophy of letting nature
its
course
the
wouldn't
Stock
work.
Exchange
take
Then
retained
Elmo Roper to find out what the
public,
both
the
investors
and
noninvestors, really thought about
the
Stock Exchange, its member
firms and the investment business
generally.
The
whole
Wall
findings
of
that
survey
appalling. The public as a
simply didn't believe that
Street
had a good product
Thousands upon thousands
of people
apparently didn't even
to sell.
what
the
Stock
Exchange
regularly did
was.
People who
business with member firms
many
were
of the Ex¬
made
money
indi¬
vidual member of the
public lost
money. The public believed that
customers'
men
recommended
Teletypes—AT
288 and
AT
ATLANTA 1, GEORGIA
142
Long Distance
421
whenever
and
422
of
the
sale of securities
an
member
firms
purchase
commissions for themselves. There
was
widespread
suspicion
Continued
about
the
page
30
call
may
them¬
Investment Counselor is
individual,
firm,
or
engaged
other business but that of
profes¬
itself,
investment
does
not
take
ties;
an
in
ren¬
coes
not
responsibili¬
ings; and
ties,
age
nor
entirely
apart from the
securities
the
of
n e s
be
as¬
F.
Thomas
exam¬
Lennon
expected
are
ana
no
on
to
ad¬
whatsoever, hard-to-
leading
prices,
shows
5th
of
hearing
ai.d
far
too
Ella
Aunt
can't
back),
broadcasts,
only
is
(on
hard
well
see
to
passes
and
office
box
at
center
row
account
of
from
popular
introductions to
We, of course,
prominent persons.
can't
be
good if
very
Archie's
school
to
insure
or
young
into
college,
a
and
entrance
or
haven't
we
influence
Clarabeiia's
young
Mr. Frank
I
we
given
most
Eriekson, personally.
assuie
I
you
ating.
Every
happened
has
in
us.
to
this
not exagger¬
am
of these things
one
and
me,
others
here
business
ber
and
being surprised
by the nature of tr.ese extra-cur¬
are
of
and
we
have
that, after all, they
important in the minds
requests,
to realize
very
clients, and I suspect that
our
of
most
that
are
us
little
a
llattered
clients have the complete
our
faith
and
confidence,
in
as
chil¬
dren for their parents,
that we can
accomplish these things. We there¬
fore
do
everything in
to make
On
terms
good,
the
our
side,
also,
Investment Adviser
Counselor
inadequate,
in
power
matter what.
no
serious
Investment
from
that
the
and/or
and
brokerage
vestment
ences
are
the
view,
Counselors
and
simi¬
the
in
by the
the
In¬
The
such
require the
term
Investment
differ¬
may
Adviser
Aug. 11, 1950, the
on
Sc-ur* :->-5
-1'-
ysis sponsored jointly by the New York
Securities Industry and the University of
Economics.
Department
of
of
Investment Advisers may be
some
commissions,
age
in
connection
with the security advice rendered.
The fact is, however, thai many
Exchange members engaged in the
Investment Advisory business on
a
fee basis credit
a part,
or, as in
of my firm, all brokerage
commissions
received
to
the
the
case
client's fee, and
certain
with
have
clients
in
rities
we
work
of
respect
the
In
firm
the
m
to
may
case
do not deal in
participate
nor
ferings at all.
the
with
which
interest.
an
firm,
my
in addition place
011
dealings
restrictions
fee
securities
selor
of
secu¬
of¬
utw
The similarities in
the
Invesnncat
Ad¬
that each
are
acts in
a
com¬
pletely unbiased fiduciary capac¬
ity. Each understands thai his job
is to
protect his clients'
only
the
during
but
owner,
the
far tunes,
life time
advise
to
and
of
to
help him in the protection of his
family as well. Leading Invest¬
ment
Advisory
Counselor
and
firms
Investment
retain
legal and
experts to render opinions on
legal and tax problems and on
tax
such
matters
to
as
whether
properly constructed ta
are
the
out
wishes
Neither
the
the
nor
the
of
maker.
Investment
Investment
wills
carry
Adviser
Counselor
will, give either legal or
tax
advice.
They may express
opinions on such matters, based on
the
or
their
of
own
legal
experts, but always with
admonition, that such opinions,
be
must
own
checked with the
attorney
or
client's
tax expert.
complacency 011 the part of
of large wealth in
relying on their own ability to
many
take
any
Commerce
owners
of
care
legal,
vice,
is
themselves
tax
or
beyond
without
investment ad¬
belief
and
often
startling when the possible dam¬
age to fortunes because o. lack of
knowledge"'and
comes
For
the
*A lecture given on
15th in a series of 17
point
not all, inwoiment
delicately hint tiiat
primarily interested in the broker¬
tax
Counselor.
to
of
of
The
rendered
as
can
custody
competitive
some,,
opinions
are
differences,
Adviser
for
transactions.
a
the
spelling out by law those who
use
From
and
This is far
that there
type of services
Investment
Ex¬
Stock
consummation
and
securities
terms
Perhaps, at this point, I should
you
York
facilities
again
are
the
advice only.
fact.
the
New
tne
provide
may,
would appear to limit the respon¬
sibilities to the rendering of in¬
vestment
of
not
We have ceased
ricular
hand, may be
business o'ther than
a
viser and/or the Investment Coun¬
elsewhere.
come
other
change and otaer exchanges,
we
notice
vance
offer¬
An Investment Ad¬
the
on
new
provide oroker-
rendering of investment ad¬
vice, such as p lawyer, or a bank,
such as in the case of my firm,
whicn by reason of being a mem¬
get Sjhip, rail and air space, ncxeis
to
toes not
securi¬
securities;
or
ple, herein
York,
of
in
participate in
engaged in
sumed.
For
This
the
which
s,
trade
facilities.
viser.
end
busi-
must
advice.
custody
does not
the number of
Vermont's
on
who
can, and does, go beyond
merely advising on securities. An
Investment
Counselor
generally
the
and
simply to create
An
no
complexities
of
sion
larities,
Public
an
aavice
either
explain to
Mystified
those
to describe
of
Wall Street was
state of depression that
ago
became
A
RHODES HAVERTY BLDG.
misno¬
are
that
a
just
and
dering
about
that way.
years
in such
find
In general the
public seemed to
believe
that
mythical
insiders
Robins0n.)iumphr:e| Gqmp;
in
mers,
business,
get a
job is to put it up in a good pack¬ certainly can't be very well known
if we can't get Arrry-No.re Dame
age." A good package will not sell
tickets near the 50 yard line.
a poor
product for very long, but
In some quarters, we are looked
even
a
good product in an un¬
on
a
little queerly when we say
attractive package will not sell.
we
have never been in Sherman
From the point of view of
many
people in Wall Street, their prod¬ Billingsley's Club Room or that
we woulan t have any idea how to
uct was a good
package and all
go about placing a little bet with
they needed to do was to
and
tax,
selves Investment Counselor.
neither begins
sufficient
old
an
man's adage
sell
appreciated north
CORPORATE BONDS
i
cur
standards
its
critical.
The
scribe
produce promptly,
they had raised, and
felt they had done a
job that was
care
in
essentials in manag.ng
as
Investment Counselor, used to de¬
the
kets
Lists
recommendations
brokerage and advisory service.
New
money
beyond merely taking
goes
involves
and estate matters.
mendous'factories and millions of
jobs that had been created with
barrage of abuse, shrinking
and
tre¬
The attitude of
the public at
large was even more
LOCAL STOCKS
securities
It is my firm conviction that the
terms Investment Adviser ana/or
enough
of the standards of financial relia¬
firm
or
together with analysis of industries and securities; and (3) af¬
fording custodian services for securities. Distinguishes between
integrity
business with each
deemed
individual
portfolio: (1) developing basic program for an in¬
dividual investor; (2) study of
underlying economic conditions,
basis
always observed between
"an
as
investment
the
simple
a
counselor
other business but rendering investment advice,"
no
client's
trust
changed
the
on
the head
highly critical of
change practices.
MUNICIPAL BONDS
of
was
members in the execution of their
know
_
firm
our
investment
Mr. Lennon contends his work
rela¬
the
community couldn't
be
questioned. The code of ethical
were
dent
Defining
engaged in
of
it
public
siders in the
ESTABLISHED
STATE AND
the
remembered
Securities Anal-
ysis
taken
Exchange.
time
investigation
had
every
delegated, but
public relations
appendage of that of¬
is, it usually happens
that this department will handle
At
relations
administrative
be
an
If
steps
Relations
There
should
can
delegated down
tions program, and when the first
Fundamentals
mentals
func¬
a
munity.
the
company
is
should head directly into the chief
executive's office, it shouldn't be
the
coopera¬
ing good public relations.
plish
be
Various
Although
fice.
relations
There
buy
all
on
program, there
realization of what its
a
public
tion
forward
relations
be
business
management.
where basic policies originate and
where policy decisions are made.
yet.
company can
any
important
of any business must be at the
the
beginning to make some
but we were frightfully
getting started, and we
progress
slow
the
this
the control, of the
Winthrop
financial community.
We
that
top
line.
duties
pro¬
for
of
importance of public
be and should
public-
gram
of
of
the
de-
relations
the
of
any
divisions
management has
Many operational functions
the
money
build
a
usual
When
established
de-
the
will
of
public
dollars
of
the
the
that,
of
nod
a
word,
relations, it must next be firmly
to
the
vote
realized
oeen
willing
other
business.
or
Partner, Delafield & Delafield,
Investment Advisers, Members, New York Stock
Exchange
financial community
of
program
personnel
that
Wall
was
curement,
General
this
the
conduct
wanted good
r e
no
in
held
was
major operating problem holding
the same importance as sales,
pro¬
affection.
Everyone
things,
By THOMAS F. LENNON*
houses
atmosphere of
disapproval and internal
First among the fundamentals
is the recognition by top manage¬
ment
that
public relations is a
object of love
Management
deepest pessimism.
was
hands in
succeed.
homely
orphan that is frequently the sub¬
ject of conversation but never the
years
of
one
Stresses importance of personnel training and recounts efforts
of his organization to equip young men for jobs in the
industry.
.for
Most
There
simply
because
there
wasn't
enough business to keep them at
work. The entire atmosphere was
Contending financial industry should recognize that public rela¬
tions is major operating problem equal in importance to sales
or
personnel procurement, Mr. Smith describes progress made
in recent years by the New York Stock
Exchange and other
must
Factors in Investment
banking
brokerage busi¬
the
had been thousands of people dis¬
By WINTIIROP II. SMITH*
investment houses has
alleged abuses
industry.
investment
and
were
firms
Thursday, September 21, 1950
.
correct
securities
Both
.
.
experience
example,
case
of
a
imately
in
$2
recently had
we
highly
businessrhan who
and,
be¬
apparent.
million
addition,
successful
owned
in
two
approx¬
securities,
completely
&
Continued
on
page
27
Volume 172
Number 4944
.
.
contract the supply of
Responsibilities
further,
that
it
has
that
demonstrated
credit and,
been
the
amply
controls
already in the hands of
Oi Bank Invest¬
our money
highly
Unless
cay
investment
an
implant
ment Officer
are
an
awareness
can
realities, he cannot dispel the
outmoded
concept
for
still
held
by
these
loans
are
"so
high."
is
portfolio
periors
to
friendly
and
his
critics
persuade
su¬
to
exercise what could be called the
to
occurs
ence
responsibility of the
operating an institutional
officer
It
quoted markets
Another
fore
of excess income with book
appreciation or depreciation.
years
might
me
be
that
drawn
ratio
infer¬
the
from
my
31,
good
to
have
in
the
fortune for
many
The last year
banks
deposits
free hand
portfolios which 1
18C3 to Dec.
banks from
1949.
tional
years
unusually
an
several
total investments and
to deposits of all.
loans
of
national
foregoing remarks that a personal
viewpoint is present. It has been
my
shows the total deposits,
me
total loans,
in which our na¬
100% of their
had
committed
discounts
to
loans
and
in 1893 since which,
was
time there has been a consistent
high
bond "actuarial viewpoint" in judging manage—accorded by what I nat¬
decline. In 1929 when a great bus¬
they've always investment results. It is only over urally consider a most enlight¬
iness boom reached its peak, the
ened management.
come down sooner or later." Many
a period of years that the quality
national banks were lending 67%
of us, I believe, are in agreement of
Recommended
reading, in my
stewardship of an investment
of
their
deposits. Measured by
on
the probability that medium account can be
fairly measured. opinion, for those who are inter¬
both unit output and dollar vol¬
an;l long-term rates are unlikely A
most
elementary example of ested in banking is what at first
ume, we are in the biggest boom
to fluctuate far from present levels this is to refrain from
constantly glance appears to be a very un¬
in our history despite which the
for
a
number
of years but we
looking at either the profits or interesting tabulation which, how¬
national banking system
at the
would
be
quite
impotent
and the book losses on high grade, ever, I have found never fails to
end of last year was lending only
would run a relatively unproduc¬
medium or long-term bonds, but excite the interest of the bank
28.7% of its deposits. This chart
tive bond portfolio if people are instead to see
or
officials who
have
how many years directors
many—"We've
By F. BRIAN REUTER*
officer
of present-
sell
assets because the
effective.
managers
incomprehensibly, wanting
sound income producing
more
to
7
(1087)
The Commercial and Financial Chronicle
.
seen
markets before and
Vice-President, Mellon Nat'l Bank
& Trust
Co., Pittsburgh, Pa.
I
Mr. Reuter contends well quali¬
.
fied investment officer must not
■
only know
but
his
job thoroughly,
also be able to get his
must
seniors to understand the factual
basis
and
sions.
of his
conclu¬
income and not
on
.
logic
Holds emphasis should be
and
capital gains
departure from high
warns
quality
standards
Well
informed
seldom
shoulder visibly they have been held at the rela¬
us
also tively high yield obtained thereon
when the long-term bond market in
comparison with that of shortgoes off a point or two or, even term securities and compare these
looking
worried
over
and
our
worrying
neither
seen
it
before
nor
indicates
have
clining
had explained to them the signif¬
icance of the story which it tells.
This tabulation which I have
whenever
that
ratio
has
given level for
a
Continued
be¬
on
pays.
investment
men
in the banking business know that
the cl anges which have occurred
in
their
field
dynamic
have
been
less
no
than
those
which
have
been
Witnessed
industry
com
in
d
a n
m erce
during
past
25
the
A Business
years
The significance of
or
so.
all
t
that
r avn s
from,
has
i red
p
the
say,
founding
of
the Federal
Reserve Sys¬
tem to the
cepted
ac¬
F.
Reuter
Brian
money
management policies of a modern
state is
understood
relate
can
changes
by us and we
impact of these
the
to
present-day invest¬
a
ment
policy.
changes and
However,
these
more
importantly,
With 200,000
their effects, are not fully under¬
stood by the average layman even
if he has no peer in his own field
in otner fields of endeavor and
or
by
that
is
token
of
man
a
high
intelligence.
In fact,
institutional investment
highly
tech¬
exist the dan¬
management has become
developed
nique.
There
that
ger
can
board
a
mittee
a
finance
or
consisting
non-investment
vise
a
specialized
and
will
men
Employee-
com¬
of
primarily
super¬
too
closely the operations of
portfolio under their control.
It
is
sufficient
not
that
well
a
qualified investment officer knows
his
job
thoroughly.
responsibilities
seniors
his
his
of
that
see
factual
the
the logic of his conclu¬
The
majority of investment
officers neither
ning
One
to
understand
basis and
sions.
is
the
own
nor
they
banks
NOW MORE THAN
run¬
are
work
ARE AMONG THE
officers senior to themselves who
feel
thus exert influences
portfolio.
970,000 OWNERS OF THE BELL SYSTEM
of responsibility and
sense
a
200,000 BELL TELEPHONE EMPLOYEES
for.
They have boards, committees and
a
bank's
possibility
The
exists
on
that if all concerned do not under¬
the workings of the money
stand
market
mental
of govern¬
consequences
policies, they
the
grasp
conditions
modern
under
the
and
will fail to
of such com¬
effects
pelling forces
on
Under
conditions
such
results
from
scarcely
can
Thus,
the
factors.
chain
of
money
there
If
the
or
is
it
the
make
expound
imperative,
factors
fluences which govern
supply
idea
is
fact
a
economy—such
has
late
*A
New
the
of
be
still
must
that it
rate
and
as
rates,
money
lecture
York
Investments
by
State
Mr.
sold
to
a
to
money
interest.
and
the business. And 970,000
own
it.
American
Telephone and Telegraph
Company stockholder in every
to
think
Sept. 15, 1930.
their
so, many
a
tele¬
and
enough of the business to in¬
savingsit- In the next year or;
thousands of other employees will
complete payments
on
Employee Stock Plan.
Good for Telephone
stock under the
.
Users—It's the invest¬
of hundreds of thousands of small
stockholders inr all walks of life in every
section of the
country—all put together—
that
provide the dollars that build, improve
and
expand the best telephone system in the
world for you to use at
low cost.
The
many,
modern
BELL TELEPHONE
SYSTEM
to regu¬
expand
or
before
the
Reuter
New
five is
phone employee. These 200,000 men
women
vest
ments
ours—the State
power
Bankers
Seminar,
operate
to
in¬
and
the
that in
sovereign
democracy. Nearly everybody uses
Big Gain in Employee Stockholders—About
misun¬
are
opportunity,
the
on
The telephone
—
outstanding example of a
of
mar¬
mind, to find an opportunity,
to
Democracy
an
telephone. More than 550,000 men
people
one
derstandings,
my
is
as
necessity
understanding
fully
business
women
regarded
the
be
can
from
exempt
in
link
no
Business
business
obtained
be
bank's bond portfolio.
a
management
ket
the bond market.
optimum
A
About
one
family in
every
fifty in the United States now owns A. T. & T.
Association
York
City,
No other stock is
so
widely owned by
so many
people.
stock.
this
de¬
stabilized at n
few years, it has
I
page
4d
8
(1088)
The Commercial and Financial Chronicle
necessarily
Building-Up Bank
trend
follow
the
Investment
By
upon
may
seasonal
cause
(such
as
industry)
one
Dealer-Broker Investment
special
swings differing from the trend of
the country as a whole.
Policy
or
Recommendations and Literature
Furthermore, we agreed earlier
Secondary Reserve should
provide liquidity not only against
L. SUMNER PRUYNE*
that the
Vice-President, First National Bank, Boston
falling
Boston
the
banker, in outlining policy for commercial bank invest¬
ments, stresses current position of each bank
factor. Says there is no formula for
Secondary Reserve,
with
ance
mainiainrng
ondary reser/e,
stantial
Ordinarily
divide
into
three
parts:
question-
a
the
last
term
securities, while the balance
primarily
income will
undoubtedly in¬
available for investment
for
issues of intermediate
some
but not
the questions
adequate
securities.
to focus
serve
attention
on
the
time
I.suggest that
try the experiment of
L. S.
whole
Pruyne
on
question-and-answer basis. Per¬
haps we can visualise as our ques¬
businessman
who
has
director of a small or me¬
dium-sized commercial
bank
in
a
a
community for
but
years
been
who
asked
President.
number
a
has
to
management
the
the
direct
bank
its
as
is familiar in
man
to
goes
the
investment
officer
for
a
of his city
correspondent
discussion of broad policies
which might be
helpful in
assum¬
ing his new responsibility for the
investment of the funds of nis in¬
stitution.
Embarking
ment, it is
his
following
well
as
the
as
an¬
by the city
might fall into
desirable
or
cor¬
the
pattern:
What
regard
investment
an
philosophy
ap¬
for
our
bank?
of
your
own
must
pa
k.
tut*
ascertain
your resources you
required reserves,
as
ances
with
till
"tie
up
include
as
such
float, and
bal¬
correspondents, which
it not
were
keep them
imum levels.
After
allowing for
fixed assets and
Primary Reserve,
the problem becomes
one of mak¬
of your
use
remaining assets in loans and in¬
vestments.
To
do
lob
ognize that
going to b°
your
in
the
must
rec¬
securities
are
vou
nqn—i
+«-,
-~-n
form two miite ™n*"-ite
and
tinct functions. T'm f;rst
provide
against
dis¬
liquidity
falling Honosits
loan
demands,
tion
is
to
^ho
provido
or
second
ja
rising
func¬
reasonable
earning nOwer oh those funds
not
needed
fQr^myidl+y apd not being
loaned to Wisto^er*. The
liauidity
or Secondary Reserve
must
fund,
*A
York
ment
1950.
banking
system
by Mr. Pruvne h.-fnre the New
State Bankers A «"'vtat*on, Invest¬
York
City, Sept.
they affect the
as
as
whole
a
and
ciable
Secondary
Looking
will
at
see
the
that
national
the
factors which could
to
change
level,
five
cause
major
deposits
are at present not
going
in the
same
direction, but there is,
nevertheless, an indicated definite
trend
recent
crease
represent the two principal
factors tending to reduce deposits.
On the other hand, the
present
trend
of loans is
definitely up
increase deposits,
and will tend to
although it will use up some of
liquidity because of increased
your
reserves
required
these
on
the
held
by the commercial
banks and by the Federal
Reserve
folios
These
two
in turn
15,
their
because
deficits
armament
security port¬
assume
importance
probable
of
the
arising
the
from
It
program.
of
Federal
is
the
to
be
much of those deficits
as
as
possible through non-bank inves¬
tors without any net
effect
upon
the
country's
the
deposit
However,
structure.
portion
not
taken
by non-bank investors
necessarily
must
be sold to the
tem.
As
of
banking
sys¬
you know, the
technique
doing this during World War II
for the Federal Reserve
banks
was
to
absorb
approximately 20% of
residual financing. The
pur¬
chases by the Federal
established
a
base of reserves
upon
which
the
commercial
the
be
the
the
the
at
use
present
It
period such
a
as
might
to
excuse
an
Secondary Reserve to
Reserve, it would be well to allow
for the
following factors:
The
banks
could
remaining 80%.
deficits
themselves
substantial,
amount
of
it
is
In
ab¬
case
prove
likely
residual
to
that
only
the minimum
bank
cash
and
the
balances necessary to cover
requirements and to
reserve
pro¬
vide normal
working capital.
(2) The Secondary Reserve must
take
of
care
in
crease
mate
not
that
be
anticipated
any
loans
in
such
esti-
increase
an
than
more
in-
you
offset
deposits.
Even though
(3)
trend
is
trend may be
by
in¬
the
up,
national
your
different.
25
your
50
or
whether
own
vulnerable
largest accounts to
because
of
are
being
investment
arising
from
holdings both iri
banks
and
in¬
increased
in
the
the
Federal.
However, this does not mean
that your own local situation will
265
&
Goodwin,
Montgomery Street, San
Francisco 4, Calif.
Also
available
and
memoranda
are
McDonnell
on
Aircraft
Standard Railway
Corp.
Equipment
in
the Dow-
Averages and the thirtyover-the-counter
industrial
stocks used
in
the
National
New Calumet Mines LimitedAnaiVcjc
n/r^+'
Jiona' i?
f !J?n
areau' .r.lc''
Front Street, New York 4, N. Y.
Timber
and
current
ter
&
n„„
&-
~
^
Street, West, Monti eal, Que., Can«nenri»r
™encer
A
Analysis
Chemical
Comnanv
? 1~
n
Cohu
&
Co.,
1
Wall
eleven-year period—Na- Street, New York 5, N. Y.
°ver ,a"
Revjew
i
a"a'
tation
in
Thomson
inomson
&
Company, Limited, 3do St. James
Quo-
Bureau Averages, both as
yield and market performance
Nesbitt
Analysis —JNesoitt,
Co
Taxes—Discussion
jssue
anfj
of
wittei,s
Dean
Analysis—Dean WitWall
14
(
Slromberu-Carlson
Company
Mromberg Carlson Company
Analysis—Rogers & Tracy, Inc.,
street>
New
5, N. Y.
120 South La Salle
Street, Chicago
3, 111.
United Aircraft
—
Review
—
Ira
Haupt & Co., Ill Broadway, New
York
Aerovox
6, N. Y.
Corporation—Bulletin
—Amott,
Baker & Co., Inc., 150
Broadway, New York 7, N. Y.
Color Television Incorporated—
Bulletin—Hooker
&
Fay,
315
Montgomery Street, San Francisco
4? Calif.
U. S. Thermo
—Raymond
Control—Analysis
&
Co.,
148
State
Street, Boston 9, Mass.
Westeel
Products
James
Analysis
Limited
Richardson
(4)
While
be
may
temporary
tion
the
dips.
the
on
L.
A.
Darling
—
Penobscot
Common—Latest
Moreland
Building,
&
Co.,
cash
As
Detroit
Man., Canada and 80 King Street,
26,
Mich.
Westinghouse
Lion Oil
Co.
—
Electric
Memorandum
Memorandum
—
—
Shearson, Hammill & Co., 14 Wall
Street, New York 5, N. Y.
Co.—
Auchincloss,
Parker & Redpath, 52 Wall
New York
5, N. Y.
Street,
<
the
surplus
full
in
first
the
NSTA
large
a
but
year,
the
trend
level,
have
may
for
one
a
quarter
of the calendar year, with the re¬
sult of
decreasing deposits in that
particular pait of the year. Simi¬
lar seasonal fluctuations
the
on
can
raised,
requirements
reserve
Secondary Reserve
should be large enough to enable
your
to meet the increase without
you
selling longer-term bonds in
more
SECURITIES
occur
your
Investment
permanent
Ac¬
TRADERS
ASSOCIATION
OF
DETROIT
AND
MICHIGAN, INC.
local level.
(5) Should
A
joint meeting of the Board of Directors for 1950. the
newly
directors for 1951, and all past Presidents of The Secu¬
Detroit and Michigan, Inc.. was held
elected
rities Traders Association of
at the Old
ing
was
officers
W^yne Club at
presided
were
over
noon
by
elected for
Tuesday, Sept. 5, 1950.
President
the
coming
Bechtel
and
the
The meet¬
following
year:
count.
(6) After studying the five spe¬
cific
factors already enumerated
making proper provision for
them, it would be well to include
and
in
the
size
of
your
contemplated
Secondary Reserve at least
allowance for
margin of
a
some
error or
for what might be called the un¬
knowns of the situation. After all,
the study of all these various ele¬
is
ments
primarily
estimate
rather
matter
a
than
of
exact
an
science.
Hence, some provision for
contingencies, added to the five
other
specific
vince you
some
even
general
upward.
fulfills
all
con¬
in
a
Secondary
period
of
trend
George
function
deposits
needed
of
we
your
Investment
remain
To
start
my
thinking with regard to this resid¬
ual
types
and
Investment
of
bonds
particularly
Account,
do
you
what
Continued
what
suggest
are
on
George A. Reuter
Harry B. Buckel
your
page
32
of George A. McDowell & Co.
Miller of Andrew C. Reid & Co.
Chairman of the Arbitration and
E.
help
Miller
Chairman of the Membership Committee—Herbert Schollenberger of Campbell, McCarty & Co.
Chairman of the Program
Committee—Harry A. McDonald,
Jr., of McDonald, Moore & Co.
Bechtel of
A
Question:
J.
Vice-Presiden—Edward
reasonably
as
Edward
Treasurer—George Reuter of Baker, Simonds & Co.
Secretary—Harry B. Buckel of Manley, Bennett & Co.
providing
securities, which
describe
Elder
President—George J. Elder
is
liquidity, the residual
your
J.
when
If the Secondary Reserve
its
part of
can
will
of the need at least of
moderate-sized
Reserve
the
factors,
&
West, Toronto, Ont., Canada.
still be
illustra¬
may
national
government
deficit
over-all
there
up,
—
Sons, 367 Main Street. Winnipeg,
un¬
constant in size.
growth
Co.—Memorandum
Hoffman
duly inflated.
Thus the outlook for the bank¬
ing system appears to be one of
loans and from
com-
thirty listed
.y ^~vr
To study
present balances
Account, will
deposit
stocks used
information
this, it might be well to analyze
see
the
will
case
creased
ing system will also be substantial.
creased
between
1
TY
industrial
•
is
source of liquidity
Primary Reserve includes
the
Lorillard
35 Wal Street, New York 5, N. Y.,
and
&
only real
your
as
deficit
financing absorbed by the bank¬
an
parison
X
York
Secondary Reserve
P.
—Walston,
Manufacturing Co.
a
However,
near-
hoped that the Treasury will fi¬
nance
Reserve
Secondary
be
curities
appre-
relatively small figure.
new
Potentially the two most impor¬
tant factors,
however, are the se¬
term
logical to
seem
balance.
on
For example,
tendency of gold to
leave the country and a
possible
tendency for circulation to in¬
the
any
Answer:
Hentz
lePv"-'^-Co"nt",
showing
up-to-date
to
Susrfrestcd
deposit
ation.
commercial
talk
Seminar, Now
depend
might then study the local
factors peculiar to your own situ¬
sorb
function
to
for
vary
also
you
this
a
field of investments
is
level
neces¬
at certain min¬
ing the best possible
will
national
Government
PH^ary
we
well
as
cash,
would be liquid
sary to
of
vour
In the latter
items
much
need to
in fixed assetc
Reserve.
examine,
how
but
ing is primarily against falling de¬
Hence, you might start by
studying deposit trends on the
banks.
Suggested Answer: A
knowledge
you
only
changing conditions. How¬
the protection you are seek¬
you
—
present time?
deposits.
do you
starting point in the
building-up of
proach
1
gener
Question:
a
experi¬
our
than possible that
suggested
respondent,
as
upon
more
questions
swers
Unfortu¬
set formula, as
no
bank
only recently
assume
of
This
but
Answer:
of
general with the problems of the
bank
the
of
posits.
discussion
the
desirable
or
bank to hold
my
(1)
will not
answer
ever,
a
tioner
I
upon
we
our
size
do
each
allotted to me,
building
formula
the
compute
Suggested
the
his
What
nately, there is
Therefore,
own
visualize
necessary
Locomotive
Co., 60 Beaver Street, New York
4, N. Y.
Jones
Secondary Reserve?
hand.
been
to
use
particular
problems at
You
and
corre¬
your
before skimping on the
exaggerated amount of
Question:
the
in
an
be
Car
Builders—Analysis—H.
five
for
limit the
teresting since
not
Freight
then, is it
Secondary
an
Newburger, Loeb & Co., 15 Broad
Street, New York 5, N. Y.
let
Question:
as
Reserve
parties the following literature:
Common Stock Portfolio for the
of $25,000—Leaflet—
trend of deposits as upward. Why,
the extent, of your
liquidity needs
that you may allocate to the
so
in¬
most
of short-
up
will
account
deposits.
longer maturity. The starting
point, therefore, is to determine
part is by far
the
loan
spondingly reflected in
or
period. Very
often
necessarily be made
clude
answer
-
ing loan demand primarily when
you feel that an increase in your
Explains method of "spacing"
hedged position in reserve investments.
a
deposits
cause
Therefore, you should
special liquidity against ris¬
seek
differential.
interested
investment
to increase.
sub¬
a
Please keep in
of the factors which
Stresses importance
of liquid securities in sec¬
Investment Account should have
<n
introduction, the talk itself, and
and
size in accord¬
securities used in place of Govern¬
warns
cb*a»n
to
itself
must vary
send
to
against
mind, how¬
rising loans do not ordinarily coincide with falling deposits since rising loans are one
deposits.
amount
talk along lines of
investment policy is apt
general
to
and
yield
maturities
of its
adequate
bonds held
ment
an
drift
current
of
each bank
as
also
ever, that
computing required size
of
but
It is understood that the firms mentioned will be
pleased
,
possibility of rising loan de¬
mand.
determinant
as
deposits
Thursday, September 21, 1950
..
national
since local factors
dependence
.
very
Ethics
Committee—Charles
Watling, Lerchen & Co.
enjoyable lunch
was
served
and
congratulations
were
generously extended to H. Russell Hastings who has been nom¬
inated First Vice-President of the National
Security Traders Asso¬
ciation of which the association is an affiliate.
,
AD
LIBBING
Next week
we
will all
be together at
Virginia Beach for
Continued
on
our
page
16
Volume 172
Number 4944
..
.
The Commercial and Financial Chronicle
(1089)
IN
WHICH
GM
POWER
THRIFTY
GM's Allison
—
TRANSPORTATION
SERVES
WITH
Turbo-Prop and Turbo-jet Engines
power new V. S.
—example of Diesel power
>
military planes.
GM Diesel-Powered
on
Ship,
larger seagoing pessels.
GM Diesel-Powered
—
WAYS
SHOWS
PICTURE
THIS
9
Fishing Boat
typical of the maritime workhorses
Diesel power,
run on
GM Diesel Coach
—a
familiar sight
GM Diesel
—
on
city streets and highways.
Switching Locomotive
workhorse
of the yards.
GM Diesel Locomotive
for all services
on
•
American railroads-
New Chevrolet Truck
—
83
models,
wheelhases. A truck for
10
every
hauling need.
New Diesel-Powered GMC Truck-Tractor
—
lightest Diesel
ever put
Hear HENRY J. TAYLOR
evening
over
to work in heavy-duty trucking.
on
the air
every
Monday
the ABC Network, coast to coast.
Key to thrifty hauling
In the transportation
to
develop the right
field, General Motors seeks
power
for the
purpose.
Thus you
will find trucks built for certain types
of service
benefiting by GM's betterment of
gasoline engines, while in other trucks
find the latest version of the GM
sel
you
will
two-cycle Die¬
as
has
trucks and coaches.
GM's search for better power
produced, in addition to the Turbo-Jets, a
Turbo-Prop aircraft engine, with a record
new
low
to
wcight-to-horscpower ratio.
So the
research, engineering and production
skills which contribute value to passenger cars
engine.
GM Diesel power
duties—as well
Even in the air,
has also made its contribu¬
tion to the railroads—to
ships built for
many
are
likewise the
power on
key to steadily better motive
the land,
sea or
in the air.
'MORE AND BETTER THINGS FOR MORE PEOPLE'
The Key to a General
Your Key to
Motors Car
Greater Value
GM DIESEL • ELECTRO-MOTIVE •
GMC TRUCK & COACH •
ALLISON AIRCRAFT ENGINES • CHEVROLET • PONTIAC •
OLDSMOBILE • BUICK • CADILLAC • BOOT BY FISHER
t
30
The Commercial and Financial Chronicle
(1090)^
munity.
The Freaz Bill
shown
whose secur¬
the Securi¬
ties Exchange Act so impair pub¬
By HARVEY M. SPEAR*
Special Assistant to V. S. Attorney General
ment in
industry.
Koreans
North
the
the 1934
provisions of
basic
the
parallel on June Act, which incidentally has been
25, they set in motion a series of successfully administered to the
the. 38th
crossed
affected
have
which
events
entire
our
econ-
and
It
financial
the
all
of
16 years.
over
The Securities Exchange Act as
all
lives.
omy
our
satisfaction
world for
it
exists without the amend¬
now
of
the Frear
Bill
requires
would be fool-
ments
ish
that corporations listed on any of
to
^remain
oblivious
the
of
that
fact
the
national securities
exchanges
register with the Securities
must
problems and Exchange Commission. The
responsi- registration process is important.
bilities have It involves the annual filing with
new
and
rm-war.
problems
re¬
ports to Federal or state agencies
but which did not come within the
the investing
der
public needs in orunderstand the workings
to
of its corporation.
their
extent and for how long our
had
information about
basic financial
pre-Korean days.
^
But few of us yet know to what
operations.
will
If the interna¬
affected.
be
lives
tional picture continues to remain
in the same warm-war status for
long period of years, we would
playing into the hands of our
enemies if we let ourselves staga
be
nate in terms of economic and po-
litical progress.
ing
up
times,
Instead of throwhands in these trying
our
should apply ourselves
more seriously to whatever problems we have on hand.
One of the very important probwe
that much
Jems in the field of finance today
is that which exists
"unlisted
ties not listed
Ities
as
to so-called
securities," i.e.,
national
on a
exchange
securi-
such
secur-
the New
as
York Stock Exchange. The securities of many leading corporations
not
are
listed
on
such
an
ex¬
A
otherwise
any
oppose
As to those unlisted se¬
or
feature
was
before
the Korean invasion, so is its need
magnified
ments
today
of the
the
as
invest¬
public become
very
vital for industrial expansion.
Of
the
would be used to retire the pres¬
outstanding $2.25 preferred
stock and $700,000 to pay for land
and construction of a hew ware¬
house.
value
the
a
total market
approximately
of
$19
bil¬
traded at the present time
at the rate of approximately $1%
lion.
billion per year.
porate insider must account to the
corporation for any profit made
on
the purchase and sale of the
Under the Frear
Bill, laws now covering 83% of
important corporate issues would
be extended to cover tjtie
remain¬
ing 17%.
corporations affected by the
are large and their ef¬
corporation's own securities with¬
in a period of less than six months.
which
state,
securities
the
of
held within a single
if such companies are
in interstate commerce.
are
even
engaged
The Frear Bill amendment to the
1934 Act would also
the
bill,
the
effects
it
if
insider
an
more
than
he
holds
them
for
other
cases.
It
six
Securities
ypright operations of the leading
Exchange Act of 1934 to
corporations with
holders
we
and
should
over
members
the
financial
Continued
com-
ourselves
on
*An address by Mr. Spear delivered
at
the Annual Meeting of the American Bar
Association,
Section
on
Corporation,
Bonking and Business Law, Washington,
I>. C., Sept. 19, 1950. Views
expressed by
Mr. Spear do not necessarily represent
the
views
*ny
<ptber
of
the
Justice
Department
government agency.
Humble Oil & Refining
-
or
Aluminum
$861,426,325
618,977,000
4,600
*
the
mortgage
5%
bonds.
ad¬
This
interest due April 1,
1945, and April 1,1946.
Morfa, Chairman of the
and Oct. 1,
R.
J.
also
announced
will purchase
company
$9,800,000 worth
and
that
of
more
the
than
rolling stock
equipment during the next
A
*
*
long-term
contract
under
against which the Long-Bell Lumber Co.,
$1.55 per common share earned Kansas City, and the Harbor Ply¬
during the corresponding period wood
Corp., Hoquiam, Wash., will
of 1949 were reported on Sept. 21
share the logs produced from a
by Hie May Department Stores
Co.
July
1950,
31,
as
subsidiaries.
and
earnings
dollar
Net
the common
on
for the
period
amounted to $6,438,000,
compared with $4,502,000 for the
six months ended July 31, 1949.
For the 12 months ended July 31,
earnings were $18,795,000, equal to $6.45 per com¬
mon
share, compared with $17,049,000, equal to $5.91 per share,
in the like period of 1949.
net
1950,
*
*
si:
that
for
sales
month of August were
(Mo.)
the
River
Lewis
ton,
region
in
announced
was
The
14.
Sept.
on
containing
tract,
upper
Washing¬
approxi¬
mately 30,000 acres, is the largest
privately
in
that
tains
timber
owned
not
area
quired by
of
Western Auto Supply Co.
announces
large tract of timber in the
a
timber
grade
hemlock
It
user.
one
ac¬
con¬
billion feet
growth
old
other
and
holding
previously
estimated
an
high
fir,
species.
$16,551,000,
against $12,402,000 in the cor¬
responding month of last year.
For the eight months ended Aug.
Stix & Co.
31, 1950, sales totaled $100,098,000,
compared with $76,380,000 for the
same period
in 1949.
SECURITIES
INVESTMENT
503 OLIVE
STREET
*
the
For
12
July
months ended
St. Louis l.Mo.
of
MEMBERS
$5,513,035 and net income
interest,
etc.,
of
MIDWEST
taxe6,
$690,970,
or
stock.
common
For
the
year
Dec.
GARFIELD
TELEPHONE:
$5,583,231, $667,982 and $1.90, respectively, were
ended
STOCK EXCHANGE
$1.98 per share on the
31,
0514
SL-80
TELETYPE:
♦
reported.
Black, Sivalls & Bryson
Texas Utilities
Mississippi River Fuel
Delhi Oil
Tennessee Gas
Texas
Transmission
^
Eastern Transmission
Rockwell Mfg.
Southern Union Gas
Southwest Ga$ Producing
Bought
—
Sold
—
Quoted
SCHERCK, RICIITER COMPANY
Landreth Building
n.d.
n.d.
disclosed.
of
on
the
covers
per share of
stock for the six months
}t8,864
322,848,969
210,180,106
202,980,063
n.d. Not
payment
three semi¬
(*4,923
Weyerhauser Timber Company.:—..1
Singer Sewing Machine Company—
fCommon,
on
the
11,617
Great Atlantic & Pacific Tea Co. of America
*Preferrcd.
the
Stockholders
503,606,275
Company of America
of
RR.
34
Number of
,
,
-
-
page
Assets
COMPANY
Creole Petroleum Corporation
|
'
on
300 share-
$3,000,000 in assets,
refresh
of
next,
1,
coupons
justment
Earnings of $2.21
ovxx
wL?,
directors
six months.
after
of
par
if,
enue
actions in corporate securities by
sions
•
Oct.
on
annual
ilege.
should be
the Frear Bill and the need for it,
I shall describe the basic provi¬
of
authorized
14
Board,
certain
The section does not affect trans-
to
no
new
months, but does noted, moreover, that certain types
would have on the field of finance, impose a liability for the profit if of companies are exempted, for
example: banks are to be specifi¬
and the need for its enactment.
sold in less than that period.
cally exempted, as would be mu¬
These three major features—i.e.,
Description of Frear Bill
tual insurance companies.
Gov¬
the filing of financial and oper¬
ernment securities, including those
The Frear Bill (S. 2408) is a
ational information for public use,
very short bill covering only six the conformance with the demo¬ issued or guaranteed by states or
political subdivisions thereof,
pages in its original form. It re¬ cratic
proxy machinery, and the
would be exempted.
quires virtually all corporations discouragement of
profiteering by
with over 300 shareholders and
corporate insiders—involve prac¬
Burden of Compliance on
with over $3,000,000 in assets to
tices which the ethical and scrupu¬
Corporations Affected
register under the Securities Ex¬ lous financiers welcome. One rea¬
The opponents of the Frear Bill
change Act of 1934. It is obvious son why most of the financial
v¥xxjr
raise all sorts of vague cries
^Erom the face notthe new that the world heartily endorses the Frear
of
bill
Frear Bill is
a
experi¬ Bill is that tho bill will serions'v against the expense and burdens
ment in government legislation.
thi
compliance with the provisions
impair the operations of the un¬ of
the Securities Exchange Act.
The bill adds no new controls or
scrupulous and unethical corpor¬
The burden, however, would be
regulations to the field of finance. ate
executives
and
financiers,
very slight for virtually all the
whose
activities
compete
most
Securities Exchange Act of 1934
corporations affected. If you will
harmfully with - the honest and
Since the Frear Bill extends the
remember, there are three major
understand
better
board
Sept.
31,1950, St. Joseph Light & Power
Co. reported total operating rev¬
order
of
Missouri-Kansas-Texas
early date to construct on the
site a general office building
which
may
cost approximately
$425,000. The new preferred stock
would have no conversion priv¬
an
Frear Bill
corporations
also plans at
The company
ended
with
$786,526
proceeds,
give the SEC
the authority to exempt issuers in
In
stock
common
*
1949, there were
exchanges rep¬
resenting a total market value of
$87 billion. It has been estimated
that the proposed legislation would
extend the protection of the Se¬
curities Exchange Act to investors
securities
Insurance
ent
national securities
in
Life
•J:
change.
These corporations are 1934 Act is Section 16 which seeks fect upon the economy is great.
The six largest companies, in terms
an important segment of the mod¬
to discourage corporate officers,
ern corporate financial field.
The directors and other insiders from of assets, are shown below.
In discussing the coverage of
securities of unlisted corporations
profiting by virtue of their spe¬
pvppr gill, it should be noted
present a serious problem to the cially favored position behind the
investing public. As great as the scenes. Under Section 16 a cor- that it is not intended to cover
need for the Frear Bill
Co.
Mutual
Penn
common
any
of
the
securities of 2,194 issuers listed on
The
major
with
conform
to
As of June 30,
democracy.
third
have
not
ferred stock of $100 par value to
the proxy regulations.
plan sub-
management
by
does
of
important- feature
special group, again in the longstanding tradition of American
A
classes of stock
more
or
curities the corporate management
the Securities Exchange Act is the
set of proxy solicitation rules and
regulations which seek to insure
that any vote involving the stockholders of the corporation will be
handled in a democratic fashion,
Again, the cornerstone
of the
proxy machinery established under SEC rules is that the stockholder must be fully and adequately informed before his vote
is solicited. Under the rules the
stockholder also must be given the
opportunity to vote against or
mitted
one
unlisted.
and
corporation's condition
second
The
The
make certain
did
which
nies
provisions of the Securities Ex¬
Thus, the first change Act of 1934. An additional
and responsi¬ important feature of the 1934 Act 192 companies had one or more
bilities will requires
that
the
corporations classes of stock listed on a regis¬
Harvey M. Spear
have to take whose securities are traded over tered exchange (hence falling un¬
der the. provisions of the 1934 Act)
precedence
over
the
projects the national exchanges must make
which we were working on in the available
to
the
public certain but these same corporations also
Some^of these
new
While unit sales continued their
sharp upward trend for the fiscal value of Kansas City Power &
year ended July 31, 1950, and were Lisfct Co., which ha a been traded
erally that the entire financial
the highest ever recorded in the over-the-counter
since
it
was
market place suffers.
history of National Bellas Hess, public';/ offered early this year,
Inc., Kansas City, steadily stoften- was listed on the New York and
Extent of Effect of Frear Bill
Midwest
Stock
Exchanges
on
We have seen the nature of the ing retail prices lowered the com¬
pany's dollar volume somewhat Sept. 15. '
responsibilities which the pro¬
#
*
%
below
1949's
record
high.
Net
posed Frear Bill would impose
sales for the fiscal year ended
According to a press report, the
upon
those corporations
which
July 31, 1950, were $32,099,238 probable net income of Scruggswould come under its provisions.
compared with the previous year's Vandervoort - Barney,
Inc.
and
Next we should consider just how
record $33,696,757, or a decrease subsidiaries
for the
fiscal year
many corporations would be af¬
of
4.7%.
Profits were affected ended July 31, 1953, which last
fected and just how much work
likewise, by two factors: lower May was estimated at approx¬
would be involved under the re¬
prices, and a lower gross margin imately 10% under the preceding
quirements of the Securities Ex¬ of profit. Profits after taxes were
year, is now expected to show up
change Act of 1934 as amended by
$668,546 compared with $1,101,288 about the same as the preceding
the proposed Frear Bill.
for the
1949 year, which were
year,
which was $1,900,000
or
In 1949 the Securities and Exequal to 28 cents and 46 cents per $2.67 per common
share.
The
change Commission made a study share, respectively. Current assets increase was attributed
largely to
of effect which the proposed Frear
at July 31, 1950, were $7,998,340, the
sharp rise in consumer buy¬
Bill would have on corporations as
against current liabilities of ing during July, the final month
in this country.
That study re¬ $2,052,386.
of the fiscal year. Inven ories as
*
❖
*
vealed that there were 1,118 cor¬
at July 31, 1950, are expected to
porations which did not report at
Hussman Refrigerator Co., St. be about
5% in excess of a year
all to Federal or state agencies,
Louis, plans the issuance and sale, ago in dollar volume.
*
*
*
In addition to this number, there subject to stockholders' approval
were some 435 additional compa¬
on Oct. 6, of $1,600,000 of 4% pre¬
been raised by the Commission of the basic operttie current ational arid financial data which
w a
not yet un..er
Thursday, September 21, 1950
lic confidence in investments gen¬
Asserting securities of unlisted corporations present serious
pro Mem to investing public, former SEC attorney contends
Korean episode magnifies need for regulations contained in
Frear BHL Describes provisions of Frear Bill and says measure
is heartily endorsed by most of financial world. Lists large
companies affected by the Bill, and decries burdens of com¬
pliance with its provisions. Maintains Frear Bill is designed
to provide assurances necessary to encourage private invest¬
When
are
.*
Missouri Brevities
tices of many groups
ities
/
In addition, as will be
later, the unethical prac¬
.
T
'
J
3,800
'
Bell Teletype
SL 456
St.
Louis 2, Mo.
Garfield 0225
L. D. 123
UUUjt.'Un.U.Ut,
Volume 172
jj 1
Number 4944
.
.
The Commercial and Financial Chronicle
.
•
Treasury-Federal Reserve Split
:
G
•
ihr divergent
"
that
Conctad
to convictions
up
protection of purchasing
s
lessly entangled with protection of
The
public
break
between
the
Secretaiy of the Treasury and the
senior officers of the
System
serve
Federal Re¬
dramatic
was
in
Korea,
deepening
in-
national
e r
crisis,
threat
pfr
tie
of
and
tne
exigencies
of
defense
our
had
program
been
counted
by most
upon,
observers
end
l
Aubrey Ci. Lanston
n
to
the reud-
Oddly
g.
enough, it
was
'
tye
impact
of
Between
The
admiration
serve's
might
plague
tion.
Ee.ween
which
at
of
arms
the
Govern¬
ment
can
your
investments, the cost of the
be resumed the value of
funds which you may need to take
delivery of your mortgage com¬
mitments, the rate to be obtained
if
you
repurchase Treas¬
eed to
l
securities
ury
to purchase other
or
securities, will depend
well
you
this
inter-agency
terms
weigh
can
which
on
how
upon
the trend of
fight
the
and
it will be settled.
-York
tie
the
action
Federal
raising
its
its
was
the
o i
in
while
rate
set for
be
to
October
and
re-
This, as you may know,
largest single refunding
the
was
New
Bank
making its de¬
terms
September
fundirg.
the
of
Reserve
rediscount
Treasury
cision
that the Treasury had ever under¬
taken.
the
When
advise .1
of
Treasury
was
action
Board's
the
it
immediately announced the terms
of
its
refunding.
The
reached
nouncements
two
the
an¬
market
New
to
York
indication
an
eral
the
Bank
their
differences
and
in¬
nounced
lic
(which
confidence
slated
that
stated
the
l;r
of
June and
the
face
and
term
set
between
the
of
for
increase
an
Board's
in
of
other
any
$14
billion
Provision
later and
still
eight
called
Bonds
fourth-rate
the
What
does
savings
butdthis
was
under
a
Massachusetts
ground
the
on
Economic
Report
tificate
been
minimum
this
quite
Reserve
the
short-term
the
market.
wished
bill
and
Where
it
cer¬
had
did
not
Federal,
hoped for 8-10
1%% bond.
year
Shortly after this financing was
its
reluctant buyer it now em¬
a
with, the
Ra-
reversed
Secretary
months.
It included, however, a
five-year 1V2% note instead: of the
longer
Federal
point
that
1%%
a
bit
a
The
toward
:
agree
The
completed the Federal Reserve
1
*<4 % issues in
a
minimum sort of
buying tac¬
way
and the market got the
that
the
idea
offerings.
The
last-minute
to
of
surprised observers by their
keen
interest
the
They jumped into the fray in
uncertain terms. They
necessity
strong-armed
matters.
no
for
the
buying
type
that
was
of
these
the
events
ported
the
matter
and
briefly,
at times
validity
premier position in this alliance.
Federal
vored
term
re¬
swiftly to the apparent
acted
officials
sen¬
timent
Reserve
of
the
majority
of
Federal
sales
the
the
that
-
embarked
of
Committee
sibly
to
degree. As the
blessing.
refunding deci¬
Treasury
unexpected
time arrived for
sion
to
for the
be
a
made
ber,
the
1949,
was
policy osten¬
the Treasury's
.with
This indicates that
was
was
too
ac¬
differences
to.
arose
No
or
one
how they
can
give
a
misunderstandings,
the
and
lk point lower in price than
true two months
earlier.
whole,
it
made
of the first day on which the
for
the
new
1V2 %
notes
bid
on
May
5, the
dropped l/64th below
ury's reaction was the inclusion dx
the July refunding with that Or
June.
The rate set by the Treas¬
was
1 Va % for 13 months.
to
present it with
fait accompli
a
in the way of an uncertain market
Continued
page
from all present Federal and Massachusetts Income Taxes
Massachusetts Guaranteed Housing
Authorities
1%% Bonds
Due October
1950
1,
1, 1951 to 1990
payable semi-annually, April 1 and October 1. Coupon bonds of $1,000 denomination, registcrable as to principal only, or as
to both principal and interest. Bonds maturing on or after October 1, 1961 are callable on October 1, I960 or any interest payment
date thereafter, as a,whole and not in part, at a redemption price of par and accrued interest to date of redemption plus a
premium of 3%; if redeemed on or before October 1, 1965; or a premium of 2'///o, if redeemed thereafter but on or
before October 1, 1970; or a premium i>f 2%, if redeemed thereafter but on or before October 1, 1975; or a premium
of 1 Zt%, if redeemed thereafter but on or before October I, 1980; or a premium of 1%, if redeemed thereafter
but on or before October 1, 1985; or a premium of
if redeemed thereafter
Interest
Legal Investments, in
opinion, for Savings Banks in Massachusetts and Connecticut
our
bonds, in the opinion of counsel, will constitute valid and legally binding obligations of various indi¬
vidual Housing Authorities: In addition, the payment of principal and interest on the Bonds will be uncon¬
ditionally guaranteed by the Commonwealth of Massachusetts as evidenced by endorsement on each bond.
These
YIELDS AND PRICES
AMOUNTS, MATURITIES,
dif¬
.(Accrued interest to be added)
Amount
Due
Yield
Amount
Due
Yield
$274,000
or
Price
Due
Amount
Yield
1978
1.65%
1951
.80%
$215,000
1964
175,000
1952
.85
219,000
1965
1.40
279,000
1979
1.70
181,000
1953
.90
223,000
1966
1.40
285,000
1980
1.70
184,000
1954
.95
228,000
1967
1.45
290,000
1981
185,000
1955
1.00
232,000
1968
1.45
296,000
1982
@ 100
in¬
187,000
1956
1.05
237,000
1969
1.50
300,000
1983
@ 100
this
190,000
1957
1.10
240,000
1970
1.50
306,000
1984
@ 100
196,000
1958
1.15
246,000
1971
1.55
311,000
1985
@99
198,000
1959
1.20
250,000
1972
1.55
318,000
1986
@99
202,000
1960
1.25
253,000
1973
1.60
322,000
1987
@98}*
205,000
1961
1.30
257,000
1974
1.60
328,000
1988
209,000
1962
4.30
262,000
1975
1.60
334,000
1989
@98
213,000
1963
1.35
265,000
1976
1.65
339,000
1990
@98
268,000
1977
1.65
as
to
in
you
rational
making
decisions
know
you
sound
during
the
subservience
Federal
to
the
Re¬
Treas¬
began with World War II. You
know
the
the
that
in
the
continued
Federal
less
the
willing
the
on
was
con¬
than
during
case
post-war
subservience
Reserve
of
to
little
the
which
Treasury
would
in
the
sub-committee
Senator
linois,
Paul
we
of
ences
H.
sit
headed
Douglas
@98}*
are
of
Lehman Brothers
Phelps, Fenn & Co.
R. W. Pressprich & Co.
Incorporated
Merrill
Equitable Securities Corporation
Union Securities
Corporation
Co., Inc.
Francis 1. duPont & Co.
A. G. Becker & Co.
.
Reynolds & Co.
F. S.
Lynch, Pierce, Fenner & Beane
Eldredge & Co.
the
,
,
Roosevelt & Cross
Kean, Taylor & Co.
F. S. Smithers & Co.
involved.*
You
will
Tripp & Co.
Inc.
Incorporated
B. J. Van
Ingen & Co. Inc.
G. H. Walker & Co.
,
Weeden & Co.
American Securities
Corporation
Incorporated
Andrews & Wells, Inc.
-
Moncure Biddle & Co.
Robert Hawkins & Co.
C. F. Childs and Company
Incorporated
Incorporated
Chace, Whiteside, Warren & Sears, Inc.
Perrirt, West & Winslow, Inc.
Campbell & Co.
Julius A.
A.M. Kidder & Co.
and
a
pretty good air¬
problems and differ¬
Moseley & Co.
Incorporated
Incorporated
Wm. E. Pollock &
by
Il¬
Drexel & Co.
Blair, Rollins & Co.
Goldman, Sachs & Co.
witnessed something of
blowoff
ing
of
securities
solidly
saddle. In hearings con¬
last year by a Congres¬
ducted
sional
or
the
dominate. The
to
*
and
in
general public
in
1.70
offered when, as and il issued and received by us, and subject to the approval of legality by Messrs. Sullivan,
Donovan, Heenehan and Hanrahan, New York City, or Messrs. Caldwell, Marshall, I rimble & Mitchell, New York City.
war:
Nevertheless,
question
These bonds
1.35%
had
the
methods
to be used, to reach
objectives,
became
far
Treasury continued
"
on
$9,875,000
Dated October
New York,
September.18,1950
recall
1
In
words the Treasury
com¬
bated the attempts of the Federal
$173,000
mind
declaration of
An iiri-
portant connotation of the Treas¬
and
investors
cir¬
par*
after¬
other
it
higher short-
was
term rate in December.
Reserve
Interest exempt
But,
possible to
is
a
*
noon
New Issues
consequences.
together
at
note.
about
ury
the
not pushing toward
had not agreed to a
in Decem¬
Federal
large-scale
restricted
lower rates in general although
by the Treasury
maturities due
on
longer-term
The initiation of this
report would side with the Board
an
a
higher shortShortly afterwards the
bonds wherein it actually hit bids
with the view of decreasing prices.
Douglas Committee. They seemed
to ". sense
strongly
rate.
be
somewhat
not
the
of
however, that it cannot be recited
clear-cut.
hardly
note
That the
Treasury was thor¬
After this financing was out of
the sub-commit¬
tee's conclusions. They plummeted •the
way the tug-of-war waxed fu¬ oughly cognizant of the Federals
hard for easy money at all times, riously behind the scenes with an technique was evidenced by ttye
under all circumstances, and they adequate amount of
open-mouth premature date upon which it set
said it was unthinkable for other tactics to indicate to the market the terms for its June and July
This
announcement
than the Treasury to occupy the that the Federal Reserve still fa¬ refundings.
the
back¬
must
not
on
in¬
curately, I felt that it might be
helpful if I tried to outline the
story. I would like to emphasize,
was
a
favor
more
five-year 1V2%
a
idea
did
or
was
employed.
challenged
Reserve
higher than it had on the
The latter, of course,
now selling at a discount and
1%%
visers
these
of
par
toward the market contributed
Federal
look with much
character of the Federal's reversal
Ad¬
re¬
turned to its goal of firming shortterm rates.
It protected the new
ury's
Economic
in
in
crease
tics to bring open-market rates in
line with the terms of the Treas¬
Advisers
of
at
ployed strong-armed
Position of Council of Economic
Council
at
attitude
recommendation
was
issued.
see
serve
subjected to further study.
The
the Federal
to
suggestion that the mat¬
this
certificates
included
that
than
a
credit
off
and
note
the Joint Com¬
essence,
Federal
certificates
man¬
to
mean
measured, in part, by conjecture.
Since, however, the press has re¬
agreed
by Mr. Lanston before the
Savings Bank Convention,
mo¬
other
because
answer
there
...
this
to
more
Portsmouth, N* H.f Sept. 16, I960.
the
vestors, and to the general public?
is difficult to give you an as¬
a
♦An address
of
for
the
for
techniques
cumstances. These announcements
might be termed
all
bankers,
Differences
maturing
and
were
boss.
It
sured
been
on
for
March
decisions
pattern.
go along
however, as
a
rate
was
much as the open-mouth policy
needed by the then state of busi¬ had indicated. The
Treasury's an¬
ness The announced terms of the nouncement
upped the rafe fo"
refunding offerings produced no the short-term rate to 1 lk% but
change in the rate for Treasury it
made
the
term
15
and
lt>
and
denied
Reserve
Treasury
however, did not
higher
short-term
would
egg,
the
the
is conducting the orchestra..
siderably
applicable to
news
but
tune
secur¬
made
the
remain
to be top
time
refunding
the Treasury has
years
the
which
would
was
been
ment, at least, the Federal Reserve
era
refunding
of
was
the
reduced
these—Treasury se¬
dollar—represents
there
For
and
be
the
matter of who
of
institu¬
tional purchases of F and G Sav¬
ings
of
or
but
also
temporary lifting of the
restrictions
can
confidence
can
chicken, and
ury
rates
coupon
policy. In
differently,
Treasury
the
As
the
statement
offering—only one type of
debt.
which
to
serve
Barrel
rediscount
ity limited to a \Va%
almost
the
have
Federal
confusing period.
credit policy. Barrel three was the
absence
of
This risk
this lose
Reserve
curities
ful
unchanged
last.May
of
veto
fi¬
and
ury;
relationship
Treasury debt
these
on
reasonably accurate story and I
hope that my version will be help¬
setting of these terms
Reserve
Federal
pro¬
pub¬
value
In essence, the differences
Federal
piece
it
at its
powers
July maturities.
two was the
in
from
tained,
on
the announcement
and
those
from
was
was
rate
a
and
ficulties
refunding an¬
triple-barreled.
Treasury's
one
so
the
somewhat
vestment
nouncement
in
Treasury securities.
be
methods
be
to risk the loss of
as
cussions,
was
command.
Barrel
to
the
By
April
'
J!
-
began or were in pro¬
The
market
-smelled
a
part'of-the
a
first-hand report of all of the dis¬
of
rate
restraining credit
a
policy with all
The
Treasury and
over
techniques
seemed
would follow
Banks
Board
follow
would
has
regret
the Federal Reserve, agreed as to
their major objectives, should find
the
that the other Fed¬
Reserve
suit)
the
approving
rediscount
the
in
an¬
double-barreled.
was
addition
crease
the
Reserve's
Federal
nouncement
In
A
categorically. Only a handful of
people know first-hand just how
simultaneously.
The
houses."
of
sense
been voiced that the
The Federal Reserve Board ap¬
proved
veto
of
satisfactory working in
Treasury securities as well, un¬
between these two less the inflation
spiral were con¬
a
relationship
important
time
the
and
now
Re¬
namely, that the public may lose
situa¬ confidence in
the value of the dol-
regrettable
more
Federal
your
it
discussions
as
prices. The Secretary of the Treas¬
was
independence
both
on
deep
very
many
rather general view
be described
as
"a
a
the
the Federal Reserve
would
ury
This quickly turned, how¬
into
that
the
belated
action.
ever,
for
issued
been
such
brushed
Dollar
of
Had
with the
Treasury
the
first reaction
these things that led to our pres¬
and'
to
ter be
a
world
new
war,
kiW
Battle
Securities and
credit.
of
Treasury. The Federal Reserve
mittee
the
t
a
and
fighting
responsi¬
agement decisions and the Treas¬
challenging stand-pat
decision by the Treasury.
nexpected.
u
The
and
on Refunding
Operations
about to be made, the open-mouth
policy of the Federal, with respect
to short-term rates, indicated that
were
offered/freely against
a the Treasury may have been
per¬
reluctant buying attitude on the suaded
finally to permit some in¬
Treasury
management
reversed
tion
independence by the Federal Re¬
post-war
new
gress.
would have been placed in a posi¬
of dollar is hope¬
value of U. S. securities.
serve
the
primary
the
and
between
the
power
par
the
for-
have
to best interest of nation.
as
Rates Set
Treasury
<
a
mouse
Federal Reserve that the
had
directive
restraining credit policy. Says break-up in Treasand Federal Reserve policies is regrettable, since each felt
necessa.y as
inform
would
money
'
are
of desirable credit condi¬
the
and
bility
his bsen convinced that higher short-term interest rates
tactic. It permitted
a new
bills to advance to
possible
tions, but it recommended the is¬
by Congress of a directive
policies of the Treasury and Federal Reserve with
cimpelled to live
lowest
suance
lighi: of conditions, it is reasonably char Fedsral Reserve
u!/
the
nancings
"latter
in
at
high
^eTence to short-term rates and dibt management, and states,
r
ent-
the open-market rate for
Treasury debt should be
cost commensurate with the main¬
baud specialist recites background and history of
rumenV
adopted
the
tenance
President, Aubrey G. Lanston & Co.
*A
that this sub-committee concluded
that
financed
By AUBREY G. LANSTON*
11
(1091)
Rippel, Inc.
F. R. Cole & Co.
38
12
The Commercial and Financial Chronicle
(1092)
most
flow Shall We Finance
Our Arms
Base
Program?
moral
of undeserved
for
way
to supply needed revenue,
EDITOR'S NOTE: Herewith is
levied
be
nation's
ject
in
whether
an
connection
of
arms
program.
Opposing views
has
debate
ate
broken
the bill to help
military spending.
out
over
for increased
pay
The explosion
labor.
to
body has
ever
does
tax
inequities
it
and
It
so.
reaches
the
worse
It is
of
repres¬
Now
The
wartime
husband
the
it
all-out
of
when
war
probability is that it will be
in only for two or three years, but
in the long pull, such as we now
confront, with a defense program
that may run for years and years,
I think we should stay clear of
the
profits tax
excess
armament
Sen. J. C. O'Mahoney
Terborgh
C.emye
program
something
far
are
occurred
as
Senator
Joseph C.
O'Mahoney of Wyoming and Sen¬
ator Connally of Texas offered an
amendment
calling
for
85%
an
levy effective last July 1 on busi¬
ness profits that exceed what they
■define
normal.
They estimate
vthat would yield about $4 billion
a
;•
as
led
now
But Senator George, Chairman
mittee,
told
the
Senate:
"The
profits would not
super-tax
on
yield
Treasury
the
this
income
extra
dollar
a
spend
money
freely to avoid handing it
the Treasury."
Supporters
the
it
that
contend
crack
of
would
over
profits
inflation
down
of
Instead,
year.
corporations would
promote,
Com¬
levy
curb,
and
to
not
would
"profiteers."
on
So the "American Forum of the
Air"
asks, How
today
finance
the
agreed
least
the
this
on
that
been
range tax
policy?
Should
tail non-essential
penditures?
effort.
the
Is
excess
swer?
each
to
of
These
we
to
a
or
raise
excise
more
taxes?
will
that
an¬
mean
some
of the questions
to Senator O'Mahoney
distinguished economist
tax
for
pay
are
that
the
have
to
Of
a
which
I
the
that
excess
have
pretend
proposed does not
all the revenue
raise
to
have.
we
that
it
that
Mr.
system.
-profits tax
pay-as-you-go
course,
is
I
do
believe
not
subject to the criticism
Terborgh
made
because
which
I
has
the
have
just
Senate in company with Senator
Connally levies the so-called ex¬
cess profits tax only upon the
top
one-fifth
of
corporate
income.
Four-fifths
of
therefore,
mal
isn't
quite
your
You
own
pro¬
definition of
nor¬
ipcome
four-fifths
of
the
income of the past four
average
But
above that,
on
under
to
if
the
income
the proportion that is
the
profits
excess
exceed one-fifth
very
rises
and
tax
may
go
in¬
on
and
$1,500
income
is
so
made for
be
may
larger
which
If
operations
you
had
income
a
you
also
in
would
be
the
that
period
to
halted due to
O'Mahoney:
right,
the
to
to
*
*
purchased
from
facturing
V
which
will
its
N.
but
the
You
punch
continue
present
plant
to
be
land.
The
pro¬
the
and
flat
to
*
if
has
Works
announced
screw
ma¬
Stanley plans
acquisition as
parts.
operate the
new
Meek Industries Stock
long-term
Issue Oversubscribed
as¬
by
A group
$1,520,-
a
Hartford-Empire's
The
notes.
$3,480,000 loan
with
a
old
eight-
10-year loan of $5,100,000.
*
Capewell
The proceeds
manufacturers
pipe threading, cutting and
reaming tools. The machinery and
production facilities will be moved
Meek
operates plants at Ply¬
mouth, Argos and Peru, Ind., and
*
other element in the economy.
plans
to
a
Scott
Phoenix and its subsidiaries have
it
interest
substantial
owns
Phoenix Insurance Company has
that
to be used to
are
duction.
Capewell's plant at Hartford.
a
stock
provide additional working capital
for expansion of the firm's pro¬
of
*
common
subscribed.
Com¬
has purchased V-Mac Indus¬
Guilford,
Sept. 19 offered
of
the first to be offered to the pub¬
lic
of
Meek
shares, was over¬
*
Manufacturing
on
(par $1) of John Meek Industries,
Inc., at $4 per share. This offering,
replaced
was
of underwriters headed
by Otis & Co.
150,000 shares
are
greater
Radio
Laboratories,
Chicago.
or¬
department.
The company is engaged in the
manufacture and sale of console
and table model television receivr
is perfectly true, but it is not true
fire
vision
if -you
business will be organized by Ed¬
Terborgh:
Since
when?
If
start with the depression that
in
back
go
history
and
with other periods of
it
compare
Senator
O'Mahoney:
Of
course
dealing within the lifetime
of the people now living who' will
have to pay this tax.
we
are
Mr. Terborgh: That is not
Terborgh:
If
They
fight the
are
war.
want
you
to
take
a four-year
period just pre¬
ceding the 1936 to 1939 period,
you
would conclude that profits
increased
because
by
they
B.
field.
The
an
infinite ratio
negative
were
in
*
was
depression period. It
the recovery period.
The de¬
Mr.
course,
and Allied
point this out by this chart, which
is a duplicate of the chart that I
presented to the Senate of the
as
With J. W.
there
Goldsbury
MINNEAPOLIS. Minn.—August
stock
and
the
in
to
vote"
number
of
shares.
common
on
has
is
the
annual
and
planned
dividend, rate
tional
stock
four
additional
a
is
to
PRIMARY
approved,
and
share
holders
$25 and
an
com¬
TIFFT ItltOTIIEIlS
one
share at $10 for each three owned.
Proceeds
a
bank
would
loan
of
be
Upon
used
to
Established
retire
and
York
&
New
to
working capi¬
completion of the
1907
'
Members
New
$220,000
IN
Connecticut Securities
or^e-half shares
at
MARKETS
Hartford and
from
share. If the addi¬
holders would be offered
mon
Goldsbury Co., 807 Marquette
Avenue.
increase
an
preferred
It
W.
eliminate the participating feature
of the preferred and to increase
provide additional
Senator,
Products Institute.
Mr.
Terborgh, how do you feel
about Senator O'Mahoney's pro¬
for
posal
Mr.
am
an
excess
Terborgh:
in
sympathy
profits
tax?
Mr.
Granik, I
with the Sen¬
ator's aims, but I have some very
grave reservations about the pro¬
posal he has advanced.
moral
true
grounds
that
we
it
possible,
all
from
defense
the
is
should
I think
undoubtedly
prevent,
undeserved
if
gains
emergency,
would
only
on
apply this principle
to corporations as you
I
not
do,
Senator,
but to unincorporated
businesses, and not only to capital,
80%
or
the
can
four-fifths
best
The
line
is
shown
by this mark at which my
appears.
If you will ob¬
serve, that area from 1946 to 1949
pencil
shows the corporate profits before
taxes
back
affer the war.
This peak
here, which is much lower,
shows the
height which corporate
profits before taxes reached dur¬
ing
World
excess
War
II.
We
had
war
raised
cor¬
porate profits from $5,400 million
in
the
period
1936 to
1939
to
an
average
million
al¬
of
more
unemployed
Senator
much
York
Curb
Boston
Exchange®
Stock
Exchange
(Associate)
Hartford 4
9 Lewis St.
pro¬
New York: BArclay 7-3542
Tel. 7-3191
posed financing, the directors in¬
O'Mahoney:
as
that.
It
than eight
during
Bell Teletype HF
tend
to
resume
dividends
Not
quite
wasn't
365
We maintain:
Primary Markets
in
unemployed. We have a
high ratio of income. We have the
greatest prosperity that the
try
an
pros¬
million
to
at
that
perity. It wasn't the full employ¬
ment economy such as we have
now, but we now have only two
Connecticut Securities
coun¬
enjoyed. We are ready
the burden of the tax.
ever
pay
Senator
an
profits tax then. It will be
observed that the
was
system
spending
CHAS. W. SCRANTON & CO.
O'Mahoney: The profit
must
defend
its profits
itself
to
by
serve
the
country. If it doesn't do that,
ticularly when
we are
Continued
par¬
confronting
on
page
29
pf
later
a
period.
United States only yesterday.
Terborgh:
sale
Hartlett, Sr. is connected with J.
Co.
each
the
at
called
Gas
preferred would be offered
not
and
radio, receivers
com¬
engage
meeting of its stockholders for
September 28 to amend the pro¬
visions of its present preferred
Greenwich
of
was
manufacture
may
(Special to The Financial Chronicle)
of
later period of prosperity.
The
that it
date.
*
#
sion and then compare the growth
Senator O'Mahoney: I would say
that the period from 1936 to 1939
the
home
expect to underwrite any casualty
business until sometime in 1951.
of profits from that starting
some
in
radio-phonograph-tele¬
combinations.
expects
President. The Company does not
$1.25 to $1.50
to
pany
Scott, Jr., formerly with
those four years. It means nothing.
It means nothing to take a depres¬
point
and
ers,
new
a
O'Mahoney:
the people who will
Mr.
ward
fair
a
standard, Senator.
Senator
insurance
Hartford Accident and Indemnity,
who
has
been
elected
a
Vice-
prosperity.
that is correct.
I think I
in
Inc.,
been
one
of the
largest groups
confining their operations to the
Mr.
you
and
business leader, George Ter¬
borgh, Director of the Machinery
to
subsidiary.
a
$750,000. The trans¬
financed
was
current
casualty
far
is
$200,000 and
springs, wire forms and
chine
was
announced
been
at
space
Manufacturing Co. of Forestville, which produces coil springs,
Hudson,
ganize
has
new
agreement to purchase Huma-
an
O
for corporate profits than for any
increase
congestion
son
operate
which
net
year
percentage
in
space
Hartford-Empire's
000 increase in
of
cost
*
$1,500,000,
about .$1,000,000 of un¬
orders
tries
to
plant
provide
plant. The
Stanley
&
its
to
to
completed by January, 1951.
line
dieing
to
at
purchase,
sets of about
action
or
cost of about
a
includes
filled
in
if
relieve
presses,
Standard-Knapp Division at Port¬
made at
addition
to
main
its
Packaging Machines will be
moved
call
to
bonds
of construction
if
Britain
estimated
Y., while the business of Rock¬
well
C
plant and equipment
<s
needed
Machines,
Division
high-speed
will
used
and
$7,030,000 and for
process
an
New
O
and
by the Henry
Division. The V and
Wright
ing
has
made
Division
B
of
to
be
to
A,
i
Manu¬
V
supplement
automatic
machines
at
its
O
and
mechanical
duces
in
now
its subsidiary
Packaging
The
of
Rockwell
and
a
Fafnir Bearing Co. is construct¬
Company
Company
Press Division
on
required through 1952.
*
Hartford-Empire
Company
Mortgage Bonds. The
are
additions
new
high building costs.
*
Senator
plans
begun in 1948 but temporarily
was
to
referring.
are
new
plant by April, 1951. Construction
tal.
O'Mahoney: Of
its
move
shrinking
you
individual
vastly
and General
Series
foundry at Windsor and
it
Power
meeting for Sept. 18 to vote
amount
its
earn¬
proposal to issue $10,000,000 First
the
of
if
cents
special stockholders'
a
proceeds
pany
Terborgh:
for
in
called
the
construction
adjustment
any
pression began in '29.
high.
Senator
billion
taxes
then,tftfcf
find
had
of
Senator.
use as a
years.
will
taxed
That
statement
proposition,
to
income,
profits tax.
Terborgh:
correct
pose
not
are
excess
Mr.
a
corporate
Yet that bill pro¬
corporate
would
the
to
has
It
dollar.
chart
now
proposition
submitted
split their
80th
Congress
greater^ in this period than
Mr.
at
war
allow
not
to
corporate income taxes,
on
was
raise
to
our
I
subject
us?
are
pose
and
we
ex¬
profits tax the
what
And
cur¬
to
Mr.
we
thinjc Mr. Terborgh and
r completely
| agree that we ought
By
we
should
we
we
long-
a
government
Should
by sales
money
should
by
or
it
did
$5
income
although
much
al¬
tax
permission.
raise
has
this
years
72
«
Connecticut
resumed
was
changed by the Finance
to
poses
quite
tonight,
panel
The
we
Well,
that
seems
which
wartime
Committee bill.
to
what
O'Mahoney:
revenue
the
program?
arms
devices
emergency
expands
believe.
now
all
and
restores
tax
that
granted
not
of
Senator
Granik, it
year.
of the tax-framing Finance
the
unless
beyond
to
bill
wife
and
income.
million
stress
tax
The
we
is a drag on
economic progress. I consider that
it is a permissible device under
the
wages.
exemption of only $500.
have a $600 exemption.
an
dividual
and
individ¬
on
the
war-time income tax upon indi¬
viduals.
There are only two dif¬
sive of incentive for economy and
efficiency,
Quite right.
tax
practically
ferences.
formation
recent
of
«
Taylor & Fenn. The Company has
ap¬
brought out by the Finance Com¬
full
in
Inc.
all
The
mittee
is
gets
longer it is applied.
income
salaries.
for
do
not
ever
salaries, family income,
you wish to men¬
the
uals
distinguishing
deserved from undeserved gains,
and
certainly the excess profits
formula
tory
income
Senator O'Mahoney:
And
Unfortunately, no¬
devised a satisfac¬
but
Rockwell
lowed
but
1834,
its
rate
ings permit.
business has been unprofitable for
in
tion.
Terborgh, Research
Director of t) e Machinery and Allied Products Insti¬
tute, and Senator Joseph C. O'Mahoney, Democrat,
of Wyoming.
Chairman Granik: A fierce Sen¬
before
Never
anything else
or
the sub¬
on
be¬
Thursday, September 21, 1950
.
annual
will
and
other component
any
national
the
—wages,
by George
presented
were
Never
history did export profits
Terborgh:
since
Fur¬
high.
as
are
proximate what it did in wartime
of the
financing
in
Mr.
Excess Profits Tax should
the
look
tools
those
that
business
chine
pe¬
prosperous
find
O'Mahoney:
history did
a
with
get
to
approximate anything like
$25 billion. We will agree to that.
partial transcript of
the "American Forum of the Air," of which Theodore
Granik is founder and moderator, broadcast over the
NBC Network August 26, which was devoted to
the question of
back
tool
concentrate
on
purchasing iron
castings. The company has been
producing various types of ma¬
de¬
ever
justly forces the profiteer to collect for Uncle Sam.
it
the
fore
De¬
and
machine
You
the
not corrected
shrinking dollar, either.
Senator
profits taxation technique discriminates against good
management, and is inflationary on the economy. In opposi¬
tion, Senator O'Mahoney defends the tax as falling on those
practicable
don't
of
ran
on
thermore, they
excess
clares it is only
you
would
you
profits
from defense emergency, nevertheless maintains as
impossible the formulation of excess profits or any other tax
distinguishing deserved from undeserved gains.
Contends
corporations raising prices, thus, being anti-inflationary.
If
middle
perspective
riods,
gains
Taylor & Fenn is liquidating its
Questioned
back, Senator.
the
pression.
George Terborgh, while
prevention
dictate
grounds
in
.
Connecticut Brevities
t.
Period
further
run
started
a
conceding
during the war.
war
increases
how
Mr. Terborgh: Your chart ought
to
Senator O'Mahoney,
billion
shows
profits.
Is the Excess Profits Tax the Answer?
In debate with
$25
That
.
MEMBERS
NEW
YORK
STOCK
New Haven
New
York:
REctor
Bridgeport
2-9377
Danbury
Teletype NH
'
EXCHANGE
6-0171
194
New London
Hartford
Waterbury
7-2669
'
.k
Volume 172
Number 4944
;
;
;
4 I
.
^
♦
•
Report
on
Nations
United Nations'7
world crisis
unless members of UN make renewed effort for peace.
North Koreans of attempting to overthrow majority
Nations, and says, since world must have a united
independent Korea, United Nations forces should go
beyond 38th parallel. Warns this is no time to despair and
urges full support of UN by all member nations.
The
in
lesson
that
the world
everywhere
an
easy
in
a
threat to peace
world is not
a
the
learn.
to
one
Norway
given
is
in
anywhere
war
We
in
lesson
the
a
lesson
Lie
Trygvc
learn.
to
distances
reduced
keep
to
Meas¬
pace.
ured in terms of the time it takes
get there, Chicago is closer to
City of Oslo today than
Springfield—the capital
own
state — little more
in
drastically that
so
the whole world has been shrunk
in
century to the size of the
State of Illinois.
At the same
a
time
have
we
increased
just
power
and
This
fellowmen.
drastically
destroy
of our
as
to
property
our
lives
the
that
means
danger
would
be
living
and
tunities
or
these
circumstances
worse,
North
it
in
progress
all
last June 25, when the
launched
their
the
United Nations had
beginning in the
work of promoting peaceful set¬
tlements of disputes between na¬
tions. Together with the special¬
ized agencies, the United Nations
had also made a promising start
made
in
its
economic
in
its
This
peoples.
that
work
for
dependent
in spite of the
was
the very
from
United Nations
power
social
and
work
first the
faced with
was
worsening
conflict
a
of
arma¬
about
of universal
Collective
of
Security
System Lacking
virtually
the
of
Because
the
United
the
and
a
half
Na¬
years
peaceful unification of
world
progress
no
collective
in
to
even
cross
the
38th
Nations
the
Nations and
United
its Com¬
This
the
of
the
the
Dutch
and
the
Korea
In
all
cases
the
they
there
General
only
the
as
the
by
lawful
government in Korea.
other
The world
the
Guilt
of
North
decisions
they
in the United Nations
of
those decisions.
continued
weeks
to
that
the
one
may
areas
no
of most
conflict
since
differs from
of armed
conflict
In the first place
they have the right to at¬
tempt to impose their government
by force upon all Korea, whether
they liked the government in
South
Korea
The North
the Great Power conflict over the
South Korea
peace
The
more
directly
involved
settlements of the last war.
38th
Parallel
exists
a
as
boundary line between North and
Sbuth Korea only because Soviet
forces were responsible for tak¬
the surrender of Japanese
troops in Korea north of that line
ing
Nor
did
in
is
debt
to
fighting so far in Korea.
fighting for the United
flag and their United
Commander,
General
MacArthur.
challenge
and
or
to
purposes
tions.
The
not.
Korean attack upon
was
the
the most direct
peaceful
aims
of the United Na¬
of the attack
power
how
showed
long and carefully
The attack came
overwhelming strength
prepared it was.
in
such
that
it
almost
Their
Nations
Douglas
and
bravery
sacrifice in the face of great odds
have saved the day and may* at
last
begin
to
turn
tide .pf
the
battle.
From the
beginning the United
joined by
Now additional units
Nations.
joining in the battle
bers
it
the
followed—a
are
sions of the United Nations.
to
1945, the civil wars in China and
French
Indo-China,
the United
Nations has not stepped in.
in several ways.
has
in
up
Nations under the United Nations
between
cases
mount
result
a
debt
and
made,
the other
as
The
the American soldiers and sailors
But they had
right, legal, moral or other¬
wise, to attempt to overthrow by
armed force the majority deci¬
of Korea
between
made
leadership they were able to give
General Assembly.
and
promote peaceful settlement of the
disputes.
case
people Of the
June-25 and June 27 and for the
recruited
The
great debt to
a
and
United States for the courageous
accept the recommendations of the
two
United
the
units of the armed forces „of .sev¬
eral other members of the United
Koreans
right—whatever
legal
United
the fighting
armed
of
owes
President
able
In the other
of
forces
States, later backed by
Nations.
think of the wisdom and morality
of
their
position—to refuse to
stop
equally prompt
armed
members
Nations intervened and by peace¬
ful methods
of persuasion was
to
the
of
States forces have been
Now the North Koreans had the
and the Indians.
these
best
Indo¬
nesians, and in Kashmir between
the Pakistani
as
established
was
recognized
Assembly
countries, in Indonesia be¬
tween
ahead
went
government of the Republic
and
fighting in
Israel and
between
The
since
estab¬
was
There had been
Palestine
Arab
armed
first
occurred
Nations
United
lished.
the
had
the United
They
in the United
General Assembly.
So
votes
could in the circumstances. Elec¬
tions were held in South Korea.
not
and
intervention
whelming
during
mission
that
for
and
airmen who, by force of cir¬
cumstances, have had to do most
security system that
the fighting in Korea began.
was
disastrous
of
collective
conflict
been
Nations
Parallel and refused to accept the
world without
a
have
United
recommendations adopted by over¬
years.
was
would
the
these
security system
a
It
for
Nations
United
of
three
permit the United Nations Com¬
mission
made
was
elements
a
to
tension
government freely
a
refused to negotiate, refused
reans
toward agreement on any of
good
a
two
Elements
widespread
Koreans
attack,
succeeded
in
Korea.
already
ing
men
service
are
being
On the basis of the offers
it
for
are
or
is safe to predict that
30,000 and 50,000 fight *
will be contributed to thp
United Nations Armed Forces for
service in
Korea by other mepw
United Nations.
the
of
First Step Taken for Enforcement
of Peace
;
Thus, for the first time in the
history of the world, the enforce¬
ment of peace has been under¬
taken by a world organization.
This has happened in spite of the
Great
Power
deadlock
that
pre-*
vented the creation of the United
Nations
armed
forces
plated in the Charter.
happened in response to
Cotninued
in'win-
on
contem¬
has
It
a recom-
page
35
and ideology between the
Western nations
the
on
one
hand
and the Soviet Union and its allies
the other hand.
on
In
advance¬
parts of the world.
steadily
by
in such a
bombs
atom
individual
social
and
ment
standards of
widen the oppor¬
to
for
in
war.
whenever
raise the
to
in
people
also
destruction,
total
of
the
all
and
a
suppress
For
the United Nations tried to bring
chosen by all the people of Korea.
It failed because the North Ko¬
and,
world,
fact
cities
or
peace
by helping the
together to reduce
poverty, hunger and misery in the
in the world will be within range
of battle in any great war from
on,
the
necessary,
and
now
enforcement
taking
nations to work
Norway, and Chicago, U.
S. A., and every other major city
Oslo,
these
achieve
to
order
prevent
of
Up to
distances
reduced
time
of
terms
in
by
to
breach
than 100 years ago.
have
United
the
of
of itself, guar¬
The United Nations
not,
peace.
possible;
drastically and rapidly
society
did
confronted
tions.
of armed conflict that
Korea under
Thus it
moment that
a
the goal
other
cases
have
place, the regulation
of all
within a matter of days.
arms
why Korea differs from the
other
other
all
history of United Na¬
tions action in Korea is the second
armaments
and
The
over.
disarmament.
Guarantee of Peace
recall for
us
action
hard
is
has
too
We
great new
peace.
by promoting the peaceful
settlement of disputes whenever
that
lesson
your
the
Nations
a
bombs
ments with
same
United
the
national
reduction
gravest
peace:
sur¬
prising
of
the
in
the
created
was
ing.
to
At
of
antee
warn¬
my own
it was to
placed
establishment
the
Harbor
for
been
Nations
Pearl
Science
Nations, the prospect
preventing a third world war
UN No
attacked
much
United
Let
when the Jap¬
the
the
of
and
peace;
of mass destruction; and,
the past
were
It is not
Only
end
atomic
in the third
in
anese
without
the
reason
from
weapons
and the establishment of
effort for world
United
given
1945.
necessity of making
warn¬
States
after
years
war
bers
country
You
since
asked the United Nations to take
of
time, the
crisis has placed before the mem¬
Nazis invaded
ing.
the
crisis
danger.
the
without
last
has
April, 1940,
our
five
of
were
when
serious
States
ination
of United
and
of
Council
1947 the United
Then in
secohd, a
system of international
control
for atomic energy and the elim¬
the
v
.
mrtg/the whole country by force
not agree.
out.
posal of the Security Council at
all times for the suppression of
breaches of
is
It is not
surprising that in these
quite clear that the nations of the
world must learn to live peace¬
has
solicitation oj an offer to buy securities.
prising is that the United Nations
if they are to survive. It is
equally clear that they are poorly
prepared to do so.
They have
This announcement is not an ojjer ojsecuritiesjor sale or a
circumstances the United Nations
fully with each other and without
war
fighting
been used to
wars
and to
has
failures.
had
been
able
constructive
What
do
to
work.
is
sur¬
during
its
reached
greatest
intensity,
good work has been accomplished.
each other for thousands of years.
In my
Now modern science has
bers
abolishing
for
sity
suddenly
the neces¬
them with
for
and
war
living closely together before they
have learned how to get on to¬
If the world is no bigger
a hundred
gether.
than Illinois was
now
countries
the
then
ago,
years
in
Nations
United
the
of
of
thought
be
counties
may
member
59
this
like
as
State—but
59
each
language,
form
of
of all alike.
with its own
customs,
religion and
county
government
instead
That
dilemma.
I
is
our
the
put
because
matter
want
I
listening to
in
all
this
way
who
are
tonight to under¬
me
stand. in terms of their own lives
and
their
experience,
own
first,
why it is necessary for the United
Nations to succeed; and second,
why this is so immensely difficult.
In the third place, I want to con¬
sider with you what the peoples
and their governments might be
at^e
to
do to
of failure
treduce,the chances
and*incrhase the chances
of success.
The conflict
fronted
the
in Korea has con¬
world
with
its
most
annual report to the mem¬
the work of the
on
zation this
address
by
Mr.
Lie
at
meeting
I
summer
Organi¬
was
12
Nations
during
The Cleveland Electric
Illuminating Company
able to
point out 14 major actions of the
United
the
past
First
Mortgage Bonds, 23A% Series due 1985
months—aside from the action
in Korea—which have been
be
of
constructive
world.
or can
benefit to
the
These include such matters
as:
The
decision
the
of
General
favor of the inde¬
of Libya within two
years;
the independence of the
Republic
of Indonesia
after a
three-year effort in which the
United Nations played
a
major
role; the renewed effort of the
Assembly
pendence
Security
dispute
Council to settle the
Kashmir
between
Pakistan; the successful
maintenance
the
of
of
Greece; the launching of
the United Nations expanded pro¬
assistance for
economic development;^the estab¬
gram- of
lishment
Relief
plus accrued interest frpm September 1, 1953
Copies of the prospectus
may
be obtained jront such of the understyn'd < who
the underwriters named in the prospectus) as may loyally
these securities under applicable securities laws.
armistice
regimes between Israel and her
neighbors; the part played by the
United Nations in the progressive
pacification of the northern bor¬
ders
Price 100.787%
in
ar
offer
over
India and
of
the
United
Works
refugees
Nations
Agency
for
in the Near
1
East.
Against
Dillon, Read & Co. Inc.
Salomon Bros. & Hutzler
Union Securities Corporation
L. F. Rothschild & Co.
A. C. A!!yn and Company
incorporated
.
Dean Witter & Co.
Kayten, Miller & Co.
•
c
technical
and
Palestine
♦An
ponscred by United Nations Association
jf Chicago, Chicago, IH., Sept. 8, 1950.
$25,000,000
the past year, when the cold war
living comfortably far apart from
confronted
September 21, 1950
IS'ew Issue
much
so
Even
these
and
many
other
.
13"
the cause of world peace if an act
A five-year of armed aggression had suc¬
trusteeship prior to independence ceeded in these circumstances. It
had, in fact, been agreed upon in did not succeed because of the
principle but was never carried imrpediate action of the Security
could
ers
forces which would be at the dis¬
Accuses
decisions
C
,
not, because the two Great Pow¬
The main
components of this system were
to be: first, United Nations armed
Says conflict in Korea is not only most serious
since 1945, but also a threat of third World War
The military occupation
that followed was supposed
to
bring unification of Korea but did
so
the
United Nations Charter.
UN executive recounts difficulties of United Nations in achiev¬
peace.
the line.
the
balanced
far—the failure
system of col¬
lective security envisaged by the
establish
to
Secretary-General of the United Nations
ing
and United States forces south of
United
the
of
be
must
major failure
By TRYGVE LIE*
4
«'
(1093)'
accomplishments
UA
*
#
The Commercial and Financial Chronicle
McDonald & Company '
Merrill, Turben & Co.
Riter & Co
Fahey, Clark & Co.
Robert W. B~ird & Co.
T. H. Jones & Comp^n *
ncorpo.-aied
a-a^er
& Co.
14
The Commercial and Financial Chronicle
(1094)
EUGENE
Our
too
and
to
and
properly balanced development
:
We
Chat
all
conscious
living and working iri
are
we
are
deeply
troubled times.
Tne
evenis
grave
that have occurred in Korea have
already
the promise of change
promise
reper-
of
eussions
oe
world.
the
pity
be
if
of
a
events
the
scure
nomic
ove
one
un¬
in
men
their
wards
This is
which
have
we
all
Petri
are
goals that
some
can
yield hign place lor very
long in the life of any nation or
never
able
to
confidence
that
of
im¬
conditions
achievement of that goat
today—if
that
in
most
for
suffer interruption. But short
of. this eventuality, I am convinced
which
that
peace
may
we
and
can
must
wjard along the path
and
must
forward at
press
rated
have been
we
following,
f'ot-
press
indeed
'that
we
accele¬
an
pace.
Let
briefly the reasons
prompting me to say this. What is
now happening in Korea is not a
struggle for a few thousand square
miles of lard. It is part of a
strug¬
gle
the
for
hundreds
the
of
chased
of
is
not
The
-
improving
virus
hearts
of
and
mini's
millions
of
of
people
with
in
the
devoted
to
conditions
well
into the
Bank's
Bank
to
they live
their
have
earn
a
and
better living for themselves
a
and
not preordained
are
deep conviction that they
right to the opportunity to
better future for their chil¬
a
be
write
those
of
enjoy the
of freedom, it is
great^hlessings
often
difficult
appeal
of
practice
the
to
understand
ideology
an
denies
right to
who
us
to
his
little
means
freedom
only
to
in
individual
own
tinies. But for those less
freedom
the
which
the
govern
des¬
fortunate,
when
live
out
it
is
their
lives in misery and want. Ifi them,
the, promise of
ill-founded
it
bound to find
*
the
Address
Fifvh
by
a
a
ReDort
Bank
Paris,
France, Sept. 8,
the
in
Black
litra!
to
be
response;
Mr.
Annual
millennium, how
may
in
of
Board
-
.
nations
to
as
fact,
they
see
presenting
*h<*
of
is
Inte-na-
looking to
think
the
justify
future
of
our
made
loans
billion
which
dollars to
widely
separated
world.
We
that
tt"e
totals nearly
a
17
counties in
parts
of the
can
duce
fruits
steel
increase
in
of
Western
timber
yield
Europe, to
in Eastern
Emote, to enable the Indian rail-
Continued
far
what
on
page
39
pres¬
competitive
on
its bid of 100.2399.
The
bonds
new
dated
are
bidding,
Sept.
a
series
1985
1950,
the
at
as
of
1,
Tuesday,
and
option
wnole,
are
the
of
in
or
part
at. 103.7.9%
lot,
at
prices
decreasing
redeemed
The
if
Cleveland
to
100%
if
Soot, i, 1980,
on or aftci
nating Co. is
le^eemed
Electric
Illumi-r
operating public
an
utility engaged in the production,
transmission; distribution and sale
of
electric energy -in Cleveland;
Ohio, and in adjacent industrial,
suburban
rural .territory
and
northeastern
in
: O h. io..., extending
nearly 100 miles along the south
shore of Lake Erie.
The
currently
company
serves
approximately 410,OUu electric
compared
to '310,000
245,000 at year-ends 1935 and
lesp.ctiveiy.
Ti.e
sponding numbers
customers
and
ends
1935
and
corre¬
residential
360,0U0
are
275,GOO
cf
currently
215,COO
at year-
and' 1925, respectively.
Large light and power customers
(having a demand of 50 kilowatts
or
more)
numbered
30, 1950.
1,538 at June
;V
put in
With Pacific Northwest
in
more
sympathy
From reports, it is indicated tha
a
handful
The 2%s have been in
but have been pretty
at
least,
Federal
to have had
seems
upon
a
in
operators
some
not be the complete
has
securities
such
in
stated
would
nearly
all
ovrcLE)
i
Co., W. R. Rust Bldg.
With
Scott, Horner
'S^-cial
to The Financial Chronicle)
APPLETON, "Wis.—Robert L.
Tilley is with McKee & Jaeckels,
Inc., Irving Zuelke Bldg.
answer
orderly.
kept
This
supporting the market could
of the
With McKee & Jaeckels
right along that the
be
policy because buyers have
a
C
Mason, Inc., of Lynchburg.
bought the higher-income obligations if
may
Financial
as
having quotations of these securities go
hand, this
*o The
DANVILLE,
Va. —Robert
B.
Wooding is with Scott, Horner &
the long end of the list, the eligibles
effect,
(Sp*c'a3
TACOMA,
Wash. —James
H.
Wiborg is with Pacific NoHhwest
(Special to The Financial Chronicle)
in
between
is
u. s.
been very
obli¬
longer Treasury
it»will
still
be
TREASURY
★
are
are
more
will
before
the
be
be
top, unless
number
there
1V2%
a
be established
of
about at the
why
unforeseen
issues,
been
now.
more
for
—
BILLS
1%%
cer¬
happehings take
one-year
CERTIFICATES
NOTES
not
paper.
BONDS
?
by Federal for certificates,
particularly
right level
has
rate
★
known.
supporters of the opinion that a
the
★
answer
nonetheless many shrewd operators v^ho are
are
a
time
some
going to happen to interest rates will
are
rate
reasons
This is
the
1956
no
doubt
interest
in
these
maturities,
of the
one
securities
recently.
have
Governors,
1950.
to
theie
in¬
already begin to
these loans; to
mention
but
a
few
examples,
Bank financing is helping to
pro¬
see
and
Whether
we
be
,
able to get more than
not
increased amounts,
because
the carrying of
stitution with confidence.
Up to the present time,
down,
(according to reports)
If the former rate is to
in
us
marked
discounting the possibilities of
ob¬
review with you some of the fac¬
I
were
government
place, there
I think the Bank has made sub¬
which
for
tificate
Progress
tors
problem
While there
its
.
1V2% One-Year Paper?
reconstruct
towards
'
pur¬
and
interested
Undoubtedly,
Bank Has Made Substantial
progress
com¬
gations.
productive facilities.-
stantial
the
few
charter
jectives during the first four years
of its operations.
I should like to
dren.
For
ravaged
V
recent action of the Central Banks in
the longPerhaps the most powerful sin¬
force shaping the course of rarge function of promoting de¬
history in our time is the awaken¬ velopment as coordinate with its
shorter-ram e, if then more imme¬
ing consciousness of the under¬
privileged masses of the people, diate, function of helping the wartheir
recommended
is
be
to
It is pointed out that the Central Banks would
On the other
market
stability
c
stepped in
were
lower.
the founders of
International
things which cannot
September 1967s than from the weight of
psychological
have
not
improving
'
and
the ineligibles
as
the money markets,
to
peace
the
of
AOcms
at
It 25,
r
of, according to reports.
care
favorable
was
the same recognition
importance of economic de¬
to
sale
cj
bank
proposed property additions.
The
bonds were awarded to t e group
customers
but the amount
wnich
were
Federal's support of
it
influenced
the
ue«~u
ently amounting 10 t8,0u^0J0 and
was
Federal Provides Prop
gle
that the conditions of
poverty, illhealth
and
ignorance in which
take
spread
And
velopment
ihat
as
the market in somewhat
they
which
which
,
of bonds, during the recent price decline.
throughout
the world,
was
given its place
alongside the Security Council.
of the
;
are many
banks,
into the market.
same
buyers of the 1960/65s
It is no accident that, in estab¬
lishing the structure of the United
Nations, an Economic and Social
economic
an
obligation.
longest partials
bonds that
threatening the
row
may be close to, if not
The ability of the market
levels.
'
sizable
as
the decline
well
the
throughout the world.
the
k.e
repay
'
Eastern
stimulated
ill
vv
to
Illu¬
mortgage
by
out-of-town
tne
the longest bank
of the world.
Council,
state
me
has
bona.j
$25,-
issue
2%%
Sept. 1, 1985, at 100.787.
Proceeds., from
pany
if
Electric
new
today
during the 12 months' period end-»
ing Aug. 31, 1951, ana thereafter
in the government mar¬
concern
These purchases, it
point intervals tor some
some
a
Cleveland
redeemable
is believed, should be spaced at Vs of a
institutions, wh.le in otner instances the 74 point state would be
more satisfactory.
An interest in- the 1956 is also being advised
the last
greater effort had
of
assume
commitments in the longest bank bond.
scale
Europe)
—we might not
tance of our task.
Of
tod?.y be witness¬
course,
should the situation
seriousiy de¬ ing so much social unrest and pos¬
teriorate
the progress we have sibly not even hostilities.
I sug¬
been making in the direction of gest that it is the existence cf
orderly
economic
development widespread poverty and misery
from, the impor¬
21;
minating Co. first
-
The present tensions throughout- conditions in the less developed
areas of the world
the world seem to me to add
(and I include
to,
not detract
(Sept.
Inc.
s. xtr
points of
liquidation.
i
and
to
be preuictea at tnis time, it is indicated that-certain
large banking
institutions have been advising correspondent banks to make
during
1 undred years
towards which the energies of
thef
been devoted towards
Bank nave been directed.
•
market
equilibrium.
Although it is recognized there
enjoyed..
Surely, if such
exist
offering fcr publ.c
and
It was primarily to promote
a wide gap be¬
objective that the Interna-^ tween standards ol' living in va¬
t.ional Bank was created. And it#, rious parts of the world did not
the
the
Longest Bank Eligible Recommended
of
group
Uncertainty Continues
still many
are
man
that
is
confidence and
for
ly67/72 have recovered from the si.arp decline
tutional
self has
span.
resolved
be
due in part to a mark-down in quotations and some taii-e..u insti¬
life will
grow
better over the
Among these, I years and that his children will
think, is the continual improve¬ have greater economic an_t cul¬
ment of the conditions in which tural opnortunities than he him¬
the individual citizen lives out his
to
The longer-term
teixioer
government.
any
have
issues, particularly tne ineligibles, have been
giving evidence of resistance, mainly under official.support.-!-.If it
were not for buying of this
type the tap bonds would most likely
have given more ground because insurance companies and sav¬
ings banks are still letting these securities out.
The 2l/2S of Sep-
well-
ordinary
his
Bank
cught to be
we
the
Central
buying has been in evidence in somewhat larger amounts in the
eligibles, but herein again caution is keeping
investors irom getting too enthusiastic in tner
acquisitions.,
which is essential
least
give
nriuing this
aiso
the
intermediate-term
real
a
material
from
unfavorable development, but
there are still many unknowns which must be cleared up umoie
real solid commitments are likely to be made in volume.
Scale
dignity and self-respect.
long a.id arduous process
—but at the
actively.
so
a
hope
the
provement
bonus
tap
aside
ket, in spite of signs that certain issues
Koreas
being of all
Black
R.
that
aiready at, temporary resistance
to rally following sell-offs is not
011
future
well-founded
and
Eugene
is
tne government market, and the
Market
freedom
out
This
a
There
more
relying
hold
the
ot
new
at
lormer
f
ol
market.
we
can re-
can
more
uanku.g
the balance to finance current and
an¬
pressures—we
we
is
company
the obvious advan¬
cause
—only if
to
There
the
of democracy and
hampered exchange of goods, to-»
pressing
nations,
us
.ieve those
de¬
the
its
offset the tremendous pressures
mealed by that gap.
We can re-
velopment, of
balanced trade
and
of
must
of
Scale buying
tile
co
recov¬
and
that
and
lew
a
the
uncertainties
developed
less
less permanent one.
or
feeling of playing it sate
staying short Has not been dissipated yet., There are too many
and
by and watch the
tne standard
the
of
to
are
tages
of
those objec¬
tives
of
eco¬
ery
living
what
im¬
tors in
between
developed
were
allowed to ob¬
portance
widen
countries
these
with
But neitner
content to sit
gap
Yet, it
would
at least
millennium
a
other kind.
around
more
13-month note has assumed some prominence in the
price yvhich has attracted outside buying. Despite a
less bearish attitude, there is still plenty of caution among opera¬
hope for betterment.
must not, and 1 trust will
not, counter the promise of one
millennium
witn
of
The
We
of
out
market,
a
kind
had
their
in
fashion
way
a
to be very much in order, and on a somewhat expanded
intermediate and longer eligibles are being bought 111
The
operations.
and strive for fiscal
of hope and progress.
one
turn out to be
seems
tnis
programs
solidarity. Concludes Bank's task is
better
a
bonds due
basis.
and its credit has been established. Claims
rigid standards of lending have been maintained,
Europe and underdeveloped countries formulate
urges
be
investment
headed by Dillon Rta„ A-
OeO.tOO
still
stantial progress
sound and
Illuminating txo.dds.
An
could
not founded to be a fair-weather
equalizing living standards among
Says despite troubled conditions, bank has made sub¬
nations.
■
feeling and better tone in the government
market. Although it is not generally believed the storm is entirely
over, there is, now ever, a growing teenng tnat tne market, as a
whole may not be far from a temporary stabilization
area, that
institution, Mr. Black stresses objective of promoting better
conditions
I"-
Governments
on
With the first phase of the refunding out of the
way, and not
much disturbance in the money market because 01 it, there
seems
liv.ng
Reporter
By JOHN T. CHIPPENDALE, JR.
Development
was
Thursday, September 21, 1950
.
BLACK*
R.
President, International Bank for Reconstruction and
Asserting World Bank
.
Dillon, Read Group
World Bank Progress
In Troubled Times
By
.
the
market
has
requirements is anyone's
'
there
is
rot
believed that
likely to be
an
discounted
guess,
a
upping of
an
result
in
further
in
reserve
to
be that
change in the immediate future.
reserve
It
is
requirements would most likely
herald the coming of a 1%% certificate rate.
wculd
increase
but the feeling seems
Such
a
development
price adjustments throughout the
whole
Aubrey G. Lanston
8c Co.
INCORPORATED
list.
New York
some
of
the
most
of
these
City banks have been buyers of the longer issues,
taxables
as
purchases
recent market weakness.
well
as
were
the
made
partials.
at
15 Broad Street
45 Milk Street
NEW YORK 5
^
BOSTON 9
Whitehall 3-1200
HAncock 6-6463
It is reported that
attractive
prices
in
the
Volume 172
Number 4944
..
The Commercial and Financial Chronicle
.
only
was
Cunent Investment
a
temporary reaction to
Rising prices enlarge
expenditures. On the
a
war.
new
consumer
other
Problems of
«
bauxs:
^
-
war
i
,
*
,
-
■
automobile
d
savings
economy on
(2) re(3) stagnation in supply
Our country
war
is
duration,
may
to resist ComThis is not an
munist aggression.
ail-out
ma-
or
their
mortgage
The
plentiful.
thesis
with
war
Soviet
debt,
Russia
loans
accepted
lot subscribed
against
ity.
the Ad-
a
before,
unprece-
of mortgage
safety factors
were
reasonable protection
as
deterioration
of its qual-
Also, insurance and guaran-
pay-as-we-go
many
ponsible
tend
expansion of dis¬
income in check. Since
to
keep
posable
in
are
we
curtailment, f For
to lessen fur-
should
toer the risks incurred by lenders,
automobile
of
spokesmen
was
of
must
•»ve
our
rearm
curselves and other nations
European
be'ore had to
never
in
with
hithert
Great
had
major
a
for
strength to play a major
role in keeping the peace against
our
eco¬
nomic thinking is necessary.
t.-
r
j
'xi.
^
u
x.
worlds
ences
eral
would
settle
their
was
gros^ national
de'e^se
tional
Already,
billion
+v
uct.
discuss,
forces,
-nd
scale
s
expenditures
to
are
$36
some
T^is is 13%
year.
has
s+ance
toward
Who
spending will be
said
Mir
provide
large-
period,
military
a
of
the
how
say
to
necessary
*v»ptn+iy
we
armed
European
can
exnansion
con-r
menace
of
enemy aggressors?
The
•","ons
n
ernmert
little
far
from
been
a
surprising.
rush
to
buy
goods that people fear will be in
caies
neriod.
e
department
store
46% larger than in the
of
week
There
a
of
the
year
upon
Savings have been drawn
to supplement current in¬
come
in
paying-for these abnor-
maTy large purchases,
buying rush has now largesubsided. Actual consumption
0f goods
so
buying
is
is not materially larger,
reasonable
to
suppose,
therefore, that the decline in
montn
typifies the
effect of
upon
an
re-
building
diversion
from
of
home
toe -manufacture of
and
arable
consum er
be
some
goods. It is. to
therefore, that new
exre-ted
that
at
large
inflation
is
be duplicated
on a
long
so
To
limited
riod
ahead
will
as
erate
to
deficit.
But
this
is
not
regarded
not in
an
as
of
era
peace
such
facture
occurred
as
pect is for
during
the
pros¬
moderate increase in
a
the initial
forward
buying
the part of the public
and
on
will have
sight.
It would
be
mistake
a
even
so
to conclude that
greatly increased
military expenditures necessarily
mean a major and protracted in¬
flation.
Tne, American
had
fill
its
public has
inflation
of
from two world
resulting
The people
wars.
protecting
the
purchasing
of their savings and liquid
power
resources.
The Supply of Mortgages
Surveying the prospective sup¬
ply of investments for mutual
savings banks, we find that a
to
come
end, limita¬
an
feeling
tion.
against
We
have
infla¬
further
Congress
seen
enact
goods and heavier taxes notwith¬
standing.
national
the
on
output of consumer
drastic
Trend of
The
Will mutual
tinue to
Savings
Deposits
savings banks con¬
about 7% of the
receive
savings of the American
people, as has been the case since
the end of World War II, or will
liquid
That
is
decline
share
the
$64
question
which
confronts mutual savings bankers
in appraising
ited
the impact of a lim¬
economy upon the trend
war
of their
We
deposits.
know
banks offer
that
mutual
depositors
an
savings
extraor¬
dinarily high degree of safety
and liquidity, and efficient service.
The rate of return paid on depos¬
attractive.
Mutual
savings banks have en¬
joyed in recent years a strong
competitive position in the thrift
its—2%—is
relatively
savings banks, like all
institutions, could be ad¬
Mutual
thrift
credit
We have
hold
to
„seen
down
prices.
seen
curbs
other
and
authorized to curtail buying
so
as
have
We
the Federal Reserve author¬
ities
insist
short-term
face of
increase?
or
elections.
upon
firming
a
interest
in
rates
of
the
Treasury opposition.
available
limited'
war
by expanding produc¬
tion, by raising taxes, by curtail¬
economy,
ing non-essential spending, and by
Government financing of its def¬
icits through the sale of Treasury
to
buyers
commercial banks.
other
than
It is too soon
to be sure whether these measures
will
be
applied on an adequate
public opinion, so long
indifferent to the inflation threat,
scale.
is
But
finally
vulsion
aroused. And the re¬
popular
sentiment
of
against further inflation is the best
reason for hoping that this threat
to
thrift
and
nn
Mutu
Mutual
Savings Banks
1S7vings banks, like other
segments of our nationl
economy,
will be affected by a
major
limited
war
economy,
which
we
war
footing,
many concerns
This announcement
is
and* guarantees gave
powerful stimulus to home build¬
ing
earlier
this
Truman has
*Adc'-
v,
M
Banks
Brookiy
r-
A
,
by
f
-ocia
f
i
left after taxes
agencies concerned
tighten mortgage insurance and
personal
guarantee
terms.
Much
restrictions
lending
on
provided
are
Defense Production Act of
New
construction
is
—
will
struction.
and
Higher
the
building costs,,
likelihood
shortages
that
into
sorbed
th£
a
defense " effort,
limiting effect on
the volume of home construction!
Demand
for
mortgages from
lending institutions is going to be
sustained, however, so that there,
will
be
keen
competition
mortgages.
•,
available
Under
these
conditions
*can Pe°Ple is divided between
consumption expenditures and
sav/ngs. When spending increases,
sav,nS9 Pei*f°rce decline.
.
,
spending
since the Korean
seen.
.
,
,
war
But
he¬
that
_
initial buying and hoarding spree
a
successive net increases of around
$100 million
a month in mortgage
holdings reported earlier this year
could
not
be
maintained
Continued
security
September 1, 1975
be obtained from the undersigned.
HALSEY, STUART &. CO. Inc.
September 21, 1950
of
supply and sustained de¬
mand, mutual savings banks face
the prospect of a slackening be¬
fore long in the rate of gain of
their
mortgage portfolios.
The
Price 101.769% and accrued interest
has
for
lessened
Due
may
labo;r
develop in areas
where building workers are ab¬
may
on
Sinking Fund 3% Bonds, Series A, Due 1975
Copies of the Prospectus
dis¬
couraged by reduced supplies for.
civilian use of many of the ma¬
terials that enter into home con¬
grant
register
1950.
also
offer to sell or a solicitation oj an offer to buy these securities.
offering is made only by the Prospectus.
'
Dated September 1, 1950
more
mortgage
for in the
Hampshire Electric Company
First Mortgage
gains.
Disposable income of the Amer-
Mr. ihie'eid at the Anjumped
Group Vcf.th? Saving*-.
gail
as
n
of
New
York
State,
?
r;. Y., Sept. 20, 1930.
President
year.
already directed the
$3,600,000
New
•
insurance
not an
The
of
Liberalization of mortgage
omy.
increases. Taxes are being
increased also, but it is probable
that disposable income—what is
Consumption
rnial
volume
appears ihevitablo in this limited war ecori-
wage
Effee'
the
mortgages
will also have
Inflation in this country can be
prevented, even in a
securities
in
contraction
Government
i
.
sweeping tax increases, and
lay the basis for new tax meas¬
ures,
despite the imminence of
tions
„
lets.
is
tion of civilian automobile manu¬
re¬
we
im¬
peace, and what we have hither¬
have at last awakened to the need
trend of savings deposits, without
stressing unduly the deposit dron
of! the past few months. National
income is rising as emp oyment
goods ,: nU servmes will develop
which can sustain production at a
-
affected
we
expands and
.
be
portantly, not only by the trend
of deposits, but also by the vol¬
war
apparaise the
look,
back Jo "c of demand for peacetime
high level even after military
spending is again reduced.
Problem
.
for
the fu-
deposit outmust weigh the fundamental forces that will affect the
capacity
record
sav-
productive capacity is due for further ey^ rston. But even so there
ve
the
from
year
ings deposits in July, August and
in the first part of the current
that the savings deposit dccl'ne
cf 1941, marking the commencement of a total war economy, will
very
public
level of 1950—not complete cessa¬
ture deposit trend. It is not likely
is
the
believe
to
of
magnitude of the invest¬
ment
problem
that
will
face
mutual savings banks in the pe¬
will be sustained. It
spree
rot
gov-
business
Should
come
con¬
trend
that it is unlikely that any such
main
producJ
in auto out¬
The
iy
cession under these conditirns Our
is bound to be
next
speaks
now
field.
assures
increase in
military spending
W elihood
rush,
were
in its present scope
high 1 vrl of production for
indefiri
is
has
before.
nfuch, -nd for h<*w long
a
This
There
s*vi£ing buying
n
industry
cut of 10 to 25%
their
the country since the out¬
of the Korean war.
aid.
will
rearmament.
pr
Savings
over
iorei
P-eside-t
T
tain
for
Savings deposits have declined
all
corresponding
will dor We the size of
further
Outlook
na-
mcrease
+hts
a
+
The
present gross national prod-
our
investment
T}£ War II.
?Se -^r^
basic questions
product-—on
and
suet
setted u7 rd Jo
of
current
a
asJ?armg
*
around <% of
money
future
The
spree
of
have
tially in price. At the peak of the
Cov-n-ent-
the
inflates
supply.
for
no reason
the
Investment
The
huge
man¬
a
drastic
will
we
short supply, or will rise substan-
lesstha* $20 billion
oiir
that
ner
finances
requirements in
COJzII"*
savings deposits.
of
that
so
irfer-
c
put
suffer drastic
example,
the
World War II. AH in all,
investment
peaceful way, rUr Fed-
m a
Government
wartime
about
cern
hoarding
Until tse Communist invasion of )
o
the
there would be
to
break
South Korea clouded the hopetnat
the
free
and
the
Communist
1949, the public knows
that
the
purchasing power of
savings can be cut severely when
Since the Korean war, we have
witnessed an impressive revulsion
Because we
readjustment in
and
U11C6
the
long-term stability
dollar has been restored,
the
of
OVCtCOITIC.
in
the rate of savings after
face drastically changed conditions
not encountered before, a funda¬
mental
new
e
u?on to bay government
securities V? s."bstan*tial volume,
the
would-be aggressors.
its
run
of
a
not
savings banks again
since
ther friendly natiors like
Britain and France have
v
the
Pr°hlem.; How will the supply of
hew mortgages and. corporate investments available to us be affected? Will
all-opt
power,
supply
whole
much
keep ourselves
readiness
ant
cors
war
after
3roblem must be reappraised. Will
have
We
powers.
the
1939
D6
dence
increase
United Slates, although an old one
for
found
Having seen the
living rise 70% between
of
cost
W1JLA
savings bank deposits continue to
experience fcr the
new
and
Now
aggression and so
safegua r a international security.
a
be
mortgages declined,
productive strength to
to deter further
This is
other suitable invest-
er
could
course
mo-
bilize
of concern
building boom would have
Nevertheless,
Ihlefeld
whet1
ments
nation,
cause
fears the flame.
a
the supply of consumer
In fact, the chief
this
August
limited rather than
a
total war,
political
r e s
policy of stepped up
goods
a way
The burnt child
ex¬
adopted the more it will
taxes is
cies provided
by
be
income can
Disposable
tes of mortgages by Federal agen-
ninistration
nor
With
relatively
the
expansion
crrtain
ever
were
Despite
ted
a en
is inevitable is
to by
to
answer
problem.
much faster pace than
World
Wars I and II.
Tat
main
investment
home building going forward at
powers, as
were
the
mortgages
war
between
public's
the
by
fear of inflation.
pected to increase as production
and employment expand.
An in¬
have to endure for a protracted period,
Before the Korean war, mutual
savings banks found in real estate
involved in
now
limited scale, but of in-
a
on
definite
year
affected
versely
unavoidable, there would be some
danger that savings habits would ume
of
mortgage
amortization
change, that a larger percentage payments.
cf
total savings would
go
into
crease in disposable income with¬
As the mortgage portfolio has
out a corresponding expansion of Equities or real estate, and that
expanded,
annual
amortization
all thrift institutions would re¬
consumer expenditures would
payments have increased corre¬
ceive a small percentage of total
mean some increase in the volume
spondingly. This is not much of
liquid savings.
of
savings. We cannot expect,
a
problem when the volume of
Given peace, I believe that ex¬
however, anything like the spec¬
mortgage loans increases rapidly.
pansion of the volume of pro¬ But with a
tacular increase in savings that
decline in.the volume
duction In this country would be
occurred during World War II,
of new mortgage lending, heavy1
when
national
income
soared great enough to keep the pur¬ amortization
payments' oh * loanj
power
of
the
dollar
while the supply of many civilian chasing"
made previously Will add to the
reasonably stable, even if the volume of
goods was drastically reduced or
funds fpr which saving^
Government operates, at a mod¬
cut off entirely. The more that a
banks must find investment out¬
;
obligations; and (4) increase in
as result of new Treasury longterm offerings.
Looks for narrowing of margin, of savings
banks earnings over expenses and dividend payments.
bend holdings,
go/anment
production next
equal the record level of 1950,
even though the decline may not
be as great as was feared earlier.
corporate and tax-exempt
or
production of
will
(1) resumption of upward trend in savings;
diction in supply of new mortgages;
con¬
on
durable goods will cut down
spending. Few expect that the
volume
of
home
building and
President, Savings Banks Trust Co.
effects of limited
restrictions
many
By AUGUST IHLEFELD*
as
and real estate construction
credit and reduced
*
Mr. Ihlefeld lists
hand,
sumer
Savings Banks
15
(1095)
under
page
41
16
(1096)
The Commercial and Financial Chronicle
of
International Gold
July
$40.75
to
Sept.
on
14.
Continued
from
Small offers of Russian gold were
noticed in Hongkong, Singapore
and
Macao.
South
Africa,
the
Philippines and European dealers
supplied
Hongkong
with
about
Markets Post-Korea
75,000
By DR. FRANZ PICK
International Monetary
internaticnal
which
started
lost
the
panic
coins
after
the
middle
for
August.
Many
as
gold
the
dealers in the
Far
East,
in
of
dollar
reduced
was
to
gold
and
interest
100
U.
prices
$39.50 to $38.75
I
S.
from
ported
the
reported growing interest for
^re-
jn
tralian
tan's
rubber
wool
jute,
September,
as
lead and
market,
contracts,
well
in
in
American
contracts,
funds
world.
Dealers
in
all
and
Aus-
tion
bean
safe
such
.
80,000,000
70,000,000
100,000,000
000,000
130,000,000
95,000,000
August
reported from all
important trading centers.
United
States
gold
losses, which reached *450 million
during the eight weeks following
the
Korean
war,
left public opinion in this
country
completely indifferent. Gold tradand
abroad, do not at"dollar importance" to
such official gold movements Free
market transactions o* the yellow
with
moderate
volume.
Demand for "gold dust"
small, very few nurchases
were
reported at $40.00 to $40.50
against $42.50 an ounce, at the end
during
$42.75
the
to
last
Ea>?l<*s
six
$41 .f0
declined
weeks
and
from
Cr-vereigns
offered at $11.50 round buyers at
$11.00 only. Small gold ba-s couM
be bought at $30 00 against
$40.00
six weeks
ago.
of such bars
Hna^dm^ nurch^ses
wre
no^'ce*1 in Mid-
Western and Cali'crnia ci^es. International Gold
transactions in
New York gained
^li^htly in vol-
ume
during the last ";x weeks.
Manhattan dealers sold about 60.000
to
and
South American
70,000
o'mces
sterdam, Zurich
which varied
$38.50
an
and Paris at
activities
prices
$38.00
f.o.b
HemicnhPrA aimnrf
Hemisphere airport.
Hoarding
Central
gold to Am-
between
ounce,
invested
at
from
in
com-
and
Western
'
very ac-
The
101.768%
Net
bonds
are
appreciate
And
Hal
Trading centered in Paris, where
daily sales averaged over $1,700,000 in August and about
$1,250,000
in September. Dealers and
speculators took profits and
-
were
order to buy "faster moving"
or
metals.
Bar
corn-
^i^?djbeJ?w^'l00'000
proceeds to be received
payment
of
the
would care to call
Number
just at
making
a
low.
financing additions, extensions
improvements to the com¬
pany's plant equipment and fa¬
cilities, to retire $380,000 of first
mortgage 3V2% bonds, series A,
and
1963
due
at
$102.75, to retire
$1,000,000 of first mortgage 3V2%
bonds,
series
B, - due
1971
at
$104.75, and the balance will be
set aside for financing additions,
made
*
at
104.77%
ranging'
prices
from
100%.
to
redemptions
Sinking fund
from 101.77% to
run
100%.
Canada
'
,
in Morocco and in Tunis remained
very Quiet.
..
How
could
us
take
individual
nervous
(and
have
we
of
many
fellows
have
you
had
such
our
Convention
all
in
meet
from
an
office.,
any
them over the period of
operating deal with Herb
met
splendid
a
"no"
sudden
the
might
you
that makes
ad
every
publication
our
there.
are
just couldn't
up
our
yearbook.
Ads
appears.
you are
You will be
certain would
Well Messrs Beck, Reilly, Murphy and Gray
ad cancelled, mister.
see your
Gee, fellows, don't you think you would rather stay on the
trading desk and be kind and considerate of these men that have
aided
us
more
every
much
so
Committee
the
above
financially through their untiring efforts to do:
In behalf of the entire National Advertising
my best wishes and sincere appreciation to
year.
I
extend
mentioned
ladies and
HAROLD
gentlemen.
B.
SMITH, Chairman
N'STA Advertising Committee
Pershing & Co., 120 Broadway, New York City
Continued
from
5
page
Observations
standing
statements
current issue
"There
as
above-cited)
Jebb's
be
can
question
no
Europe, that
set
forth
in
the
prodding and
issues, American mili¬
outstripped European plans.
.
On
has vanished.
excuse
the pace.
.
some
.
.
It is the Americans who now
.
"The three-year defense program, however, is limited (at this
stage) to what the Government conceives to be 'physically possi¬
ble'; it presupposes that assistance from the United States will be
sufficient both to provide materials from dollar sources and 'to
maintain our economic strength.'
"Nothing
came
that Mr.
to
near
Attlee
.
attitude
usual.'
Gaitskell said
impression that
rebutting .the
ment's
.
Mr.
or
during
the
the Govern¬
There would have to be
towards
the
economics
of defense is 'business as
sacrifices, some degree of hardship,
fewer cars and television sets, some diversion of labor and some
rise in the cost of living.
But nothing is apparently to be done
to ease an economy already bursting at the seams.
Theie was no
mention of any action to modify the existing commitments on the
social services and housing."
French Impotence
EVENTS
Regarding the potentialities of fulfillment of security respon¬
sibilities by France, probably the less said the better. As Bertrand
Field
Investment
is
of European
now
response.
COMING
In
.
.
a
set
.
thinking has already far
fear of American half -hear tedness has held back anyone in
tary
If
.
(Sept. 16) of the "Economist" of London as follows:
of reluctant American
debate
de
Jouvenel, the distinguished French publicist, summarizes his
countiy's situation—after stating the possibility of France remain-/
22,
Sept.
1950
(Chicago,
Municipal Bond
cago
14th Annual
Knollwood
Club
Field
Country
111.)
ing in
of Chi¬
Day at
Club.
a
for
sons
Sept. 22, 1950 (Pittsburgh, Pa.)
Bond
Club
of
Fall
Outing at the Long Vue Country
Pittsburgh
Club.
va
1950
pawn
pushed
far
.
ahead
.
France tends to feel it is a
.
of
the
Anglo-American
chess
"First-thing-first"!
The low morale
existing between
our
Allies and ourselves in
cooperative rearming in this epochal time of crisis is demonstrated
National
sociation
Security
Annual
Traders
As¬
Convention
in
the
proceedings of the Foreign Ministers' Conference at the
at
Waldorf-Astoria Hotel in New York City.
the Cavalier Hotel.
indeed
12.
Oct
to the enemy—"the rea¬
prey
Revival of self-help in England and France surely constitutes
very
(Virginia Be»rr
^
a
present military weakness are of three orders:
strength."*
our
Sepi. 26-30,
weak, insular position,
France's
material, intellectual and moral.
weak
umbus
' Asia's markets showed large activity during the first two weeks
1950
(Dallas.
Club
that President Truman
Tex.)
Col¬
Annual
Day Outing at the North-
wood Club.
Nov.
away
is being
his country's trump-card in
a
A sad commentary is it
blamed for having given
poker-game with
friends
our
ner
kong, which averaged $7,000,000
a
week
1,
1950
declined
to
at
the
™eekly
average of only $5,000,000
during the first half of Septemthe
ony" declined from $44 at the end
(Starlight
Waldorf
Astoria
Hotel
June
Roof)
11-14,
Lodge,
1951
Alberta,
Investment
(Jasper
Park
Canada)
Dealers
Association
of Canada Annual Convention.
more
Observation
(Hollywood
a
August,
by announcing prematurely and withoui any quid pro
quo
would send
26-Dec.
of August. Then, many leading
Fla.)
speculators
in
Hongkong
and
fnvpftrvxipt Bankers
Macao sold most of their stocks of Annual Convention at the Holly¬
the yellow metal and turned to wood Beach Hotej
Singapore's rubber markets, as
Dec. 8, 1950 (New York City)
well as to American commodity
New York Security Dealers As¬
exchanges for "new opportunisociation Silver Anniversary Din¬
ties." Gold transactions in Hong-
Prices
ad for
an
..
Activity in Asia
in
trader and solicit
a
positions of Ed Beck,
I don't think many
a
(Special to The Financial Chronicle)
Dallas Bond
.
Gray.
time when the trader has used bad judgment in '
commitment or trading activity has continued at the
repeat
Allison-Williams Adds
a daLn~c
.
on
Fred
and
.
5*"
1* in ^ienna a* $42.50
.eJ;s
m suPP°seAy J*us~
.
behalf.
our
purpose
of
.°vJ?e^^40/75
.
have
secretaries
promis¬
outstanding
notes made for
sory
P_• T
J
in Zurich. Russian
f, ?r
af.ain no
111
African markets also showed a
reduction in their gold trading
volu.me. Tangiers' volume, which
declined from $5,000,000 in July
to $4>000,000 in August, might
?nl^ reach $2,000,000 to $2,500,000
in September. South Africa supp!ied most of t.he metal to TanSi^rs at $38, against $39.75 in July.
Barcelona and Marseilles bought
smal! shipments of gold from the
Bel&ian Congo. Gold transactions
Seibert's
transfer ourselves to the
Murphy, Vince Reilly
by
company
from the sale of
these bonds will be applied to the
gold de-
mjjj" tS°'UFCeS Were reported from
Herb
the
rather
rid of their stocks in
us
interest.
and accrued
membership
our
the opportunity of working with
staff.
efforts in
your
let
now
priced
August,
reported extensions and
improvements to
slower
transactions
during the plant equipment and facilities.
first two weeks of September.
Regular redemptions may be
ber
in
Mexico, Uru-
at
Inc.
of gold transactions in Holland,
Belgium
and
Switzerland
re-
During the fmst two weeks of
September, further declines of
Double
sold
Co.
clined from $45 to $42.
French
MINNEAPOLIS, Minn.—Thomas
farmers, however, who at present H. Caley, Jr. is now connected
are selling their
crops, continued with Allison-Williams Co., North¬
to buy coins.
Combined volume western Bank Building.
60,000 000
July.
were
resulting
during
modities
80
July
of
were
eager to get
May
was
gold
funds
Europe's gold markets,
^
65,000,000/
continued
sales
tive
,
June
metal
of
and
substantial
Africa.
u.s. Dollars
April
any
$44 during August,
guay and Venezuela sold coins and
August Decline
January
February
here
about
small bars to Europe and the Far
East. Venezuela also shipped small
quantities of bars at $39, cif North
trading of gold in all in-
1950
tach
bought
&
to
now
setting up of our roster with over 3,700 members and
Many, many thanks to these wonderful ladies. We
affiliates.
today (Sept. 21) by Halsey, Stuart
from
Approximate Sales in
era,
peso,
modity speculation.
TW1
of
to
of gold at prices be-
however,
amounts
tlie ri?ht li^e
the
yet.
outbreak
ounces
$42.50
ternational markets declined about
27% during August.
the
Hampshire
Electric Go. 3% Bds.
knowl-
seemed
metals,
or
a+ re"mves^fne^ lrJ
metal has arrived
Official
their
of
tember,
the
According to recent reports, they
eventually plan to return to the
protective investment in gold, but
were
who
advance
some
switch
to
March
hoarders,
had
"Chronicle"
do
practically
series A, due 1975 of New Hamp¬
shire Electric Co. is being made
Buenos
Since the first two weeks of Sep-
copper,
over
down.
presented
always been most cooperative with our National Advertising Com¬
mittee in the following up of the
many details necessary tor our
yearbook and convention issue of the "Chronicle."
I need only
not
saw
City,
commodities
gold sales
metal.
Mexico
it
-Free
price of the
Gold inflow into
tween $43 and
speculators
deemed
TK„
The
the
amazed when
Offers N«
be
Seibert) show and prove their salesmanship ability as they close
slowed
go,000
Paris, and from
gold
yellow
gold transactions will
Kalsey, Stuart &Go.
corn-
edge of the forthcoming devalua-
Pakis-
soya
as
from
from Hongkong to
Buenos
Aires
to
l°r
of
overheated
market
war,
have
platinum, attmcLed sub-
stantial
to
free
Aires'
half, of
"Temporary investments"in Singapore's
re¬
million)
Franz Pick
14
first
war
accom¬
rather brisk
a
holdings
mGj \ continAug.
new
of
(which, since the KoOffering
of
$3,600,000
first
its foreign gold
increased by about $30 mortgage sinking fund 3% bonds,
rean
ued its decline
the
adjustment
Montevideo
yellow
into
the
yellow
tive interest in
since
Then,
of all
undoubt¬
should
medium.
For many years I have had
many
These
modity speculations and declines
that
specula-
the
interest
Reports of the many standing committees
National Committee meetings but I feel that
our
report
this
30
commodity prices to the
expenditure
has
been
vival
partial
a
through
back to gold, once
come
8
page
Convention.
be made at
mention the
*
inflationary
plished.
will
years
Central and South America also
mi-
sphere,
the
com¬
Commodity
Speculations
West-
He
#
International
edly will
on
gold.
on
National
take place and carry the free gold
ounce.
an
Latin-Americans
dam, and also
^e
not
Thursday, September 21, 1950
.
NSTA Notes
price to much higher levels.
the
Orient,
Paris, Amster*n
mostly concentrated
ff
Near
ern
Karachi, Teheran, and
Aviv, the speculative interest
modities and
markets, as well
"up valuation" of
an
Canadian
HH|cents,
Montreal
Speculative
commodity
rumors
Bombay,
Tel
Offers of bars and
increased
Vancouver.
routh and in Saudi Arabia, but in
their rise.
resume
slowed down.
outbreak
has definitely
war,
momentum
of
gold
with
of the Korean
week
ounces
week during the first half of
September.
India
bought small
quantities of the metal in Bey¬
authority reports sharp decline in international gold
trading since the "Korea Boom." Asserts speculators in the
United States, Europe and Far East seem more interested in
wool, rubber, grains, fa's, non-ferrous metals and diamonds,
than in gold.
Pred.CiS wiien these commodities become specu¬
The
each
and only 50,000
a
Gold
latively less attractive, gold purchases will
of gold
ounces
in August
Economist
.
.
of
of
our
the
new
UN
conscripts to Europe.
similarly
emphasizes
that we
r
the
great
im¬
portance of mending national diplomatic as well as military fences
as
elements
debater
our
ilke
of
international
Vishinsky
was
persuasion.
certain
For
an
astute
Kremlin
to show up the weakness in
past Far Eastern policies by specifically citing the inconsistent
double-tracking of "a Mr. Acheson
(with
a
versus.
Mr. Acheson"
on
China
quite convincing demonstration).
*
£
The head of the World Organization
surely seems to lie uneasy
between sharpening and lengthening national swords; meanwhile
sputtering endless propaganda diatribes.
"Le'ter
from
France—It
Explains Why
Bertrand de Jouvenel; in
"Barron's," Sept. 11,
Europe
1950.
Is
Still
Unarmed,"
by
Numbel 4944
Volume 172
..
Commercial and Financial The
Chronicle
.
Communists have
sabotaged these
organizations at every turn. Furthermore, we were prepared to
Mobilize Om Leadership Now!
offer
By MURRAY SHIELDS*
erate
*
:
contends present productive facilities can achieve this
mobilization and guidance are utilized.
if
economic
development
their and
our
and
not
elected
only
from
proper
answers
room
n<r
is
it
that
anyone's mind
All
of
f 1
con
1
t
c
::
fn
loiaiitanan-
'
it
Is
not
at present.
a
,
nificance
is
that
this
country's
a
more
need
even
the
need for
obtain quickIy
to
balance
of
in that task
and
power
imperative
'effort
major
guidance
of
military
shall
we
most
our
the
in the Communist
that the
fact
made
Communist
imperative, therefore,
actions of their
in
the
aggression
of munitions inherited from Wor:d
have War II,
UN
friend for them, that the
no
stockpile of weapons is substantial. We have the world's largest
position is Navy in mothballs, huge supplies
a
vast number of air, naval
and army bases which can quickiy
able to present to the world coi^t
vincing evidence that while we d<*
not want war, the outcome, if we
are forced
i 10 so bloody, heartrendLig and horrible a course, is a
forego
Korea be reactivated or rehabilitated, a
in
(3)
e co
Wt
■,
r
ousion.
full
makp
must
use
of
-
that we muster Into the decision- and their threats of military ac- colossal merchant fleet to reserv a all 0- our re;ources of economic*; .
mak'ng group at the helm of our tion elsewhere make them talk of and a not inconsequential stock of leadership-if-we are to eliminated
Communistic
•
ness
An Emergency Council Needed
.
are
Another fact of impressive sig-
military machine.
representatives
that
people
Among other sources of weak-
had
us
hoped
its
which they
aid
we
a dev- military potential is more readily
qualified citizens. With an Emer^
but also bled their mobilizable than was the case at gency Council, such as has beenu.
of living white to build the start of World War II.
Our described here, we should soon be*
colossal
a
obivous that we must chart our
the world is now confronted with course with all of the foresight
a crisis of unparalleled magnitude,
and statesmanship we possess.
in
doubt
for
of them than
which
astating war
clear—yet
not
are
the
the from nowwe can be further ahead
But
course
prevented
having
standard
leave
events
a
desperately needed after
so
i
Recent
progress can that a decade or a generation therefore, the
prosperity rest.
Kremlin
Wants military potential created to win conflict, and
finance.
1
1 - -
the
which
on
"politics as usual." Advocates creation* of Emergency
Council composed of leaders in science, military, business and
to
nations,
those with Communist
governments, in order to accel-
urges,
abandon
.
assistance
is overwhelmingly in our favor, ment has developed the skills of
Furthermore, we have freer and our workers,
better research and capacity for
'phat we have the resource dotechnological development far in tential there is no reason to
doubt,
advance of that of any Communist but it js undeniably true that at 'State. And it is not too much to present the armed power of the
say that we can produce new ca- Communist bloc is more
fully mopacity so much faster than they bilized than is ours
We
face
including
during current crisis, that we place at
Government's decision-making helm our really great men and
Mr. Shields
;
financial
vast
of the less developed
all
Vice-President and Economist, Bank of the Manhattan Company
177,
(1097)
government:
of
number
a
our
peace seem
shallow and insincere some of the new weapons devel-
the risk of the ereat economic rol-
oped late-in'Worl^Warli or since
great; men-those of_un-'and tkat.thejr^acttons have
Democratic
'
confi^,
lapse the Communists so
C
■.*
c
averted.
two
devastat-
ing
Emergency Council
into which could be drawn those
creation of
debilitat¬
two
ing depres-
is sure
straight.
to
call for is the tory
lsituation may well
and
wars
an
The
ideological
record production so that our expenditures for new productive capacity
in which c0uld b<~ concentrated in the new
the
get
war
them^and to "in sure * the "nation;
again'st finai cial collapse or ruin-*
ous
infiati0n.
Our
is*
position
of exceptional scientific, we are engaged is a bitter one electronic Aand antisubmarine de- basically strong for our standard91
^
"
J0aVefS military, business and financial in which, despite the fundamental vices and the new types of combat of personal and corporate finan-y
™
experience and accomplishment weaknesses of their position, the weapons without undue strain on dal housekeeping is too high, oui?.*
•
.
sions
Murray.Shields
^
SO
liaV0
men *
*"* *
*
1
**
*
*
*
*•
..
.
-
-
-
on whose c°bnsel ^ President Communists have, thus far, .re- the rest of our economy.
financial position too strong, owr«rifh and Congress can appropriately tained the initiative. We will need
Our industrial capacity is sub- business policies too sound, our
wh?t
InLrS hpi Lm
lean for Suidance at a time as to have full mobilization of our stantially larger, more efficient, recent expansion too firmly based};
^nhAArf,,nUv tn LmS tiS this* What a reassurinS thinS 11 resources of leadership, states- more widely dispersed and more on increased population and tech4 .
opportunity 10 oominaie me
Satinnc
nniitiVhi
nnmip
«
+«
thpv
oe
tn
an
wQuld
world
one
way
another. Their
or
conviction
is—ana
tranKnesb
in
it
time
is
speaKing
01
tor
tnese
tnings—that the Democracies nave
themselves to
permitted
oUsly
be
seri-
irresponsible
by
weakened
financial deficiteering, by punitive
taxation
against sayings
and capi-
the. President to manship and salesmanship if we
such a Council men are to win it but our potential is
who. could inspire the confidence such that with such mobilization
of
an
opportunity^ for
-
,
welfare
productivity.
:
lapse and
that
aie
^
economic
^
col-
weak militarily
so
the
command
and
of
taking
confident
a
future, for
Kf
K/w
?a?.rm.ou.s ailVZ needs »ut to be
a.nd
to become a powerful
to
UC4-UXHC
puwcnui
vl 1V/1 illVivlij
wt v
for
crisis with which
fronted. There
we are now con-
several
are
*1*4.
reasons
.
io
p
4-
4. *
6
y
I nnccttc
1
v
•
i
which
.irlll
q
Jre- Plear that w.ith
vlvCti
• p
if
nnvmii
...
rnili^rv ronfl^t
OnfllCt
hours
ilvmi b
<
more
.
ship is essential.
the
-
p/ipndprlin wf
l
ft ni^ nnl^ntik
lnnp
v*
JICl 1/
thp
sources
be
mobilized,
conditions
and
the
terms
which
on
they
iS
should be committed and the cir-
weapons
/ox
which
in
cumstances
should be used.
tj
r-,
i
„
.
ob
(3) How we should
ze
Nation's military resources,
bureauci
as
usual
acy_ as
usual
on
should
on
the
whether
se
"general'
use
controls
be
and
the one
we
hand and full mobilization
should
t e
where
pontics as
as..
strikes
usual,
other
new
our
'specific'
or
order to. obtain what-
in
diversion of our resources to
ever
military
use is necessary,
to
meet
our
in
such
a
defense
as
way
and how
war
costs
avoid
sub-
or
to
jecting the economy to the debilitating distortions of inflation.
*
*\
TT
^
(4) How we can manage either
a
defense
when
the
war
a
or
effort
emergency
is
so
over
that
our
society will be intact and we can
look
forward
are
genuinely
"7X7 address
Manufacturers
cut.
195'0>
Inc.,
'
New
.
peaceful
and
people
perplexed.
The
which
our
by Mr. Shields before the
Association of ConnectiHaven, Conn., Sept. 12,
t
Our
Sb;
! J.'C
This
pomt reached
action
our
traditional
Qur
Colonialism
the
with
is not to
'
,
.
an
an
in our history
,icies
th t
our
The
our
offer
to
sell
■
or as an offer to buy the
by the Prospectus.
Common Stock
$1 Par Value
our
knows
wor,d
Price $11.50 per
is clear_
■
share
x.
foundations on which the
Communist ideological position
rests are weak rather than strong
and it ig not ^rue> as some have
contended,
ajj Q£ ^
the
wag
that
they
successes
failures>
finauy
After
wonj
offered
an
have
ancj
we
World
in states in
an 0f
securities
War
legally be distributed.
the Communists
opportunity to
wtllch C0Uld> wlth the Kremlin's
cooperation, have set the Stage for
,
and in which the Prospectus may
n
participate in world organizations
as the UN, the International
Bank and the International Fuftd
and
Copies of the Prospectus may be obtained from the undersigned only
which the undersigned is qualified to act as a dealer in
made
such
peace
.,
prosperity.
are
immeasurably.
position is right and that
recor'd
mJ
whoIe
in
or
,
<,,
But the
.
F. Eberstadt & Co. Inc.
,
September 15, 1950
our economy
so
much
problem
prODiem
bu(7
thinking
of
Ol
.
solid,
prepre—
engaged or any
military war which is
forced upon us will be increased
of warmongering in our
ounce
makeup
as an
we
global
Standard Coil Products Co. Inc.
^her^'is n'ot
Ume
be construed
mentioned. The offering is made only
whlcb
of
charge that we have imperialdesigns on anybody, anyat
they
This inventory of our potential
strength provides impressive evidence that if, through such an
Emergency Council as has. been
suggested, we fully mobilize, the
resources of leadership with which
we are blessed, there is good reaSOn to believe that the risk of
World War III will be reduced
and that the prospect that we
shall win the ideological war in
367,500 uuaito
Shares
jsbjc
where
of
for ruinous inflation,
<;♦'
*
toward
mockery
a
the
me
resnect
attitude
make
concerning
concerning
rfrfi
on
two occasi0ns of the territorial fruits of
victorv
announcement
securities herein
-
renouncement
were
the really vital ques-
tions concerning
are
a
future.
prosperous
These
to
ever devised. We have a j
solid record of sharing our rq-y.|f
sources, 'techniques and posses- ^
sl0ns with other nations, whereas
the reverse is true of Communism.
face,-
to
tU
I
cn
should
us
To be sure we
can expect fluctuations—and occasionally severe ones—in prices,
nil
_
or
for
collapse
a
an JLXIVt L>C4Dv> 111 sound and imaginative
inFreasf...V1
W J> LH
of work per week, a little
ui wutA pci. wccrv,
uiuc
effort to increase production
mugt mobiiize our re. tremendous' We and our friends
of leadership if we are to of the Western World have reridH1ntoSU confronts " "all our. ideologic.l war
are ^ ^
m
our
Nation with
a
situation in whl.cb
Communism is waging vastly superior in quality and in W6rrmi War u*
_
£
which the fate of the world for agalnsJ
for wblle.oar strength- numbers to those of the ComWith consumers' stocks of autoeenerations to come mav well be potential for ideological conflict is munists.
Our people are better mobiles, housing and household
determined bv
the actions
our
^P/essive it has not yet been fed, better housed, better paid and equipment as ample as they are
government takes by the attitudes made effective*
have better jobs. We have devel- a^er several yeaff
capacity
it assumes and b'v the policies it
There is strength in* the fact oped raw* material resources, in- production/ it shouJ$ybe possible—
adoots on
a
wide range of ex- ^ba^
our economic system pro- dustrial capacity and transporta- without material inconvenience to
tremelv
difficult issues
such as vides
a far higher standard of tion facilities formidable indeed tbe People
to divert a colossal
-(1) How we should direct our living for our people than any as compared with those at the dis- volume of production from civilrelatione with the UN
with our Communistic nation ever dared to posal of the Communist bloc. In ian to war goods.
friends and with the Communist h°Pe for> that our way of life is steel, petroleum, the whole range
0ur stock of "know-how" is at
hi
that we can win the ideoone
of
rewards
rather
than of metal fabricating industries,
o11
..a
vnnrc
loeica? war win anv limited or penalities, of freedom rather than the basic chemicals and in vir^ f "ew all-tlme
Years o£
"global"
military
war
which fear» of Peace rather than war and tually everything which is vita^ higher education have been procomes and win the ensuing peace.
human dignity rather than sub- in wartime, the resource position vided to veterans. Full employ(2) How our present military mersion in a soulless state, and
resources
should
be distributed, *hat our political system guar-,
how rapidly and completely they aptees more
freedom than any (
^
HitKwhl^hp1n£pH
like
1929-34 intensity.
;
effort to increase production venting deep and prolonged deinWnn
p.er man~hour and the introduc- pression that the chances are good
tion into the labor force of some that with sound leadership we can
of the people in retirement, in the in fact avoid any economic debacle
higher grades of our schools and and can find ways to prevent war
in the home' our national output from undermining our financial
can be lifted to a level matu^r'al-y structure or from setting the stage *
more
whirh
Which
™ ____3 JV,
"TT
not
1S wa£ed nf ihp hattihiif \*ntVi
against us. We may
win
ail
_
progress
anything
tive the great technological ad- readjustments in
vances of recent years. And it is there has been
Qlco
®
rv>r»V-»ili-7arl
f,,lKr
the
— — —^ —
mobilization. of our leader-
why
mh_ro
^
.
nological
industry has invested in expanded
and improved plant and equipment over $100 billion in the past in markets and in production, and:
decade—much of it to make effec- there may be many far-reaching /
to ques-
-
vv
with
dealing
reason
We Possess the Military Potential
view of the
potential
mobilized
iiiuuhi*.cu
no
tion the outcome.
resource
our
instrument
there would be
ourselves.
defend
cannot
we
by
that
assume
-
,
,
reduce
reduce
which
headed for
are
the
^
j
and
unions
They
u
.
we
•
-xi
of vital
policies
frien(js
our
friend and foe alike,
this Were done, I am convinced
that
we
would
be
justified in
ID
•'
0
into
respect
S„byiab0ll°'!^.Wh;^ PI?: is
vide
capture
easily convertible to military production than was the case at the
beginning of World War II. U. S.
bet for
bring
18
The Commercial and Financial Chronicle
(1098)
state of affairs.
Guns and Butter in Switzerland
By PAUL EINZIG
Dr.
Einzig, contending problem of supplying a nation with both
no means inescapable, cites1 Switzefland as example of reconciling a high standard of living with a
high degree of military preparedness. Ascribes this to hard
and well organized work of Swiss people, and their cooperation
with official economic policy.
-
guhs and butter is by
.
■
*
luxury of over-full employment. Where anyone can
earn high wages through
finding unskilled work at any time, there
is bound to be a high degree of reluctance to spend years on learn¬
ing skilled trades. The result in the long run is a gradual decline
in the number of skilled workers and
the
one
or
ment, there is
other
has
evidence of such tendency. Both the quantity and
quality of Swiss production is well maintained, and there is con¬
deep roots in the minds of the
public.
It has become a generally accepted
conception that a country can only achieve na¬
Thanks to
defense
the alternative is to sacrifice national security
as
by neglecting the defense services in order to
be able to raise the standard of living.
On the
basis of this assumption it
to
the
escape
States
would
Paul
Democratic President
or
in
.
conclusion
mands
a
supply of
butter
that
to
end.
This
has
been
of
For
that
of either of these
three
her
other
democratic
disarmed
almost
World
on
both
sides
of
inevitably
avoid
mean
a
and
the
its
increase
in
the
been
sufficient
1939-41
a
acreage only 2% greater.
At the
time, production (per farm
same
Thus, while utilizing rough-
early
more
increased
was
investment
large part,
result,
a
as
was,
well
light ol the current in-
ective reduction in carryover of
certain important crops, it is of
interest to survey productivity in'
agriculture with
resources
level of to.al farm
a
output well in
of anything
excess
achieved."
been
Makes Its Debut
periodical designed to fa¬
general
tractors
public
American
with
economic
con¬
Project made posisble by
from Alfred ' P.
Sloan
cepts.
grant
Foundation
"Popular Economics,"
odical
published by
new
peri¬
the Institute
of Economic Affairs of New York
University to familiarize Uie gen¬
eral public with American eco¬
nomic
concepts, will be ready for
national
Dr.
distribution
Harold
chancellor
O.
and
Sept. 25,
on
Voorhis,
secretary
'
vicethe
of
University, announced.
The
Alfred
to
the
Sloan
P.
tion has made
University's
Economic
Affairs
the
of
New York
director
of
Institute
the
publi¬
periodical,
which
Edi¬
for
will have ten issues
torial offices
Founda¬
substantial grant
a
cation
a
year.
at 32
are
Broadway,
City, and the editorial
Clayton
Hoagland,
is
'■
editorial writer for the New York
"Sun"
for
than
more
20
years.
"Popular Economics," according
the vice-chancellor, varies from
to
other
economic
its
asmuch, as
publications, in¬
material, couched
nori-technical
in
directed
to
language,
the layman
view to deter-
a
he suggested,
able as well
is
who does
ways
American
agriculture has continued to imP™ye its capacity to produce^ Sel¬
ent^c research has ™ade steady
Progress in the development of
new or hybrid products and m he
application of technical innovation
will
of
of
news
tiiot
insects.
'f""'1 farmers
Further,
ha/e
m^ht be ejected froin the faraners
of the nation in the event that
table
™
an
r,n
all-out
morn
effort
were
otfoin
again
to
To
sources and credit available to
them to rebuild their soil and to
.
.
,,
.
prices TheiTe ftertiK?
o
"The data in the accompanying
indicate
the changes that
gathers the impression of hard and well-organ¬
ized work. A nation with such a high standard of
living must be
strongly tempted to rest on its laurels and take things easy. There
have
taken
of
acre
place
the most
in
output
important crops
since
the
riod.
Again it should be pointed
immediate
prewar
pe-
Farm Yields per Acre, 1948-50
'
for
example,
has
than
more
doubled in the last ten years.
"It would be impossible to esti-
per
mate
the
level
of
farm
ma¬
new
economy.
inventiveness,
and
products
developments
rently- affect the daily
Vice-Chancellor
pressed
the
that
would
of
the
at
serve
as
a
programs of
school
levels,
guide
in
valu¬
reading
high
freshman
ex¬
"Popular
afford
supplementary
economics
A
cur¬
life
Voorhis
belief
Economics"
as
such
as
citizen.
every
able
lead
a
special
provide stor¬
economic
*««»
„i"
to
some
American
college
l/u.T/uin
devoted
The remainder will
tare's capacity ta produce ond lo
„
be
describing
phase of the American
students
ji
informative
Twenty-four of the publication's
pages
article
!?«. mESS t JTSKS
*
will present enjoy¬
as
terial.
s."1:?
one
to
the
to
and
well
as
American
educational
industry and labor.
primary
purpose of the peri¬
odical, Dr. Voorhis said, is to
clarify for the lay reader all the
and
ways
United
by
means
States,
which the
providing r a
in
healthful' economic
produc-
climate
for
.private, enterprise, thrives as a
productive country with a rising
all-out effort should developstandard of living for its whole
tion that might be achieved under
an
Average Compared with 1939-41
population.
'
■
1
,
Comomdity
Potatoes
Corn
1939-41
,
(bushel)
Tobacco (pound)
Oats
figures
Source
:
U.. S.
are
those
7
i
<i* \•
by crop .condition
o* Agriculture.
indicated
*
34.6
Department
on
Aug.
Institute
is
a
University's
Arts
and
of
Economic
department
Graduate
Science
Af¬
of
the
School
under
of
Dean
Joseph H; Park.
A. E.
+19
21.6
*
+ 17
+
■
*1950
fairs
+20
287
18.4
31.-3
+26
16.0
241
(bushel)
+35
1,232
13.3
(pound)
Soybeans (bushel)
+67
39.9
981
(bushel)
change 193941 to 1948-50
216
29.6
Cotton
.
1948-50°
129
(bushel)
Wheat
The
Percentage
.
Output per acre
maintaining this
nation's +arm
yield
that has ihus far
ies
holdings.
'"In many other
as
of agricultural prosperity.
cause,
in Switzerland
inclined to support a government which aims at
in
ers' investment in other types of
equipment are not available, it
may be inferred from the fourfold increase in the dollar value
of farmers' investment in machinery and motor vehicles that the
inventory of equipment has kept
Pace with the increase in tractor
the direct
ba demanded of them.
demagogy there is a tendency for
politicians to favor over-full employment, which means that there
are mahy more vacant jobs than workers
seeking employment. As
this state of affairs is very
advantageous to the employed they are
the
would
not have the time and
ternational situation and the pros-
causing
Many demo¬
con-
of
shortages of civilian supplies, leading to unduly high prices?
answer is simple.
The Swiss people' are not only prepared to
fight for the freedom of their country, but also to work for it, which
requires a much higher degree of patriotism. Wherever one looks
over-employment.
an
on
the
strong demand and faprices
that
stimulated
"In the
any
The
cratic countries have
yet to learn that the latter can be fully as
wasteful as the former.
Unfortunately, in countries where democ¬
racy tends to degenerate into
1950
of
weather
growth of farm productivity
in
industrial output from civilian to
military
How is it that this can be done without thereby
ductive activity. There is no
scale unemployment or through
and
utilization
8% decline in
an
relatively
high farm incomes that made farm
impr ovements possible. The
diversion of
to stimulate this pro¬
waste of labor either
through larger-
decade
to
sumers and
a
vorable
There remains, of course, the problem of
providing the Army
with mechanized equipment and
maintaining the elaborate system
of formidable fortifications in
good condition: This requires con¬
as
past
to
farm
1950 is providing America's
the
farm production, and of
training in the shortest possible time.
policy is such
in
ly the same acreage and employing fewer people, agriculture in
rapid development in the
result of
Thereafter everybody is called up for three
year, in order to maintain and improve the training he
has
194°-
Second
increased
Sedond World War
population.' To do so would'
sharp reduction of her standard of living.
To
The official economic
of
and
output
upon
of the widest use
background
and other farm implements that
to profit from reading the more
has taken place. In 1940, farmers
technical economic literature. By
employed 1.5 million tractors; by
1949 the figure was 3.5 million, combining the features of a home
and
an
educational
had been slowed down markedly more than double the 1940 level, magazine
during the period of the 1930s, While quantitative data on farml¬ pamphlet, "Popular Economics,"
that she keeps
whole-hearted work everywhere.
overall
and fertilizers,
insecticides,
and
advanced farming techniques. Technological advance in agriculture
Atlantic
is no evidence of such a spirit in Switzerland.
There workers
believe in giving a full
day's work for a full day's pay. Building
operations for instance, are proceeding in rain as in fine weather
to the limits of
possibility. There is an invigorating atmosphere of.
practices directly related
agricultural prosperity.
farm'equipment
during his initial term of service. This means that a
high degree of efficiency is maintained without depriving the
national economy of an undue proportion of man
power.
Care
is taken that during the brief periods of the initial service and of
the subsequent briefer periods of refresher service no time
should
be wasted, so that the soldiers can obtain the maximum
possible
purposes.
methods
and
"The
in
improved
received
siderable
farming
export markets a far
larger volume of food and fibres
than in any period prior to the
Second World War.
"Explanatory of the improved
productivity in agriculture' over
the last ten years is the greatly
despite
the
1940s
is only four months.
_
farmers
favorable
this
a
"In
-
employment. Among the facin this expansion were the
tors
Swiss statesmanship has devised the ideal
system of
national service.
There is compulsory military service for all
able-bodied men of military age, but the
period of initial service
weeks
im-
War, to meet expanded doand foreign requirements,
and this
farm
naked, Switzerland has maintained
war-time military preparedness, and has even
strengthened
course
vital
of
by 37% from
its 1935-39 average while increasing planted acreage by only 2%,
stark
it in many respects. This does not mean of
under arms nearly 20% of her total
states.
American
countries.
the
is
total of their output
this has been achieved without low¬
countries
in
provements
Re-
capacity to produce
commodities
mestic
ering the standard of living of the Swiss people since 1945. Indeed
has not only succeeded in recovering her pre-war
standard of living but has even
managed to raise it further.
While
nfniiations
encouragement
probable that most of
seems
the improvement between 1939-41
and 1948-50 has resulted from im-
between
article
done
Switzerland
have
the
has
worker has increased significantly,
national crisis, when the United since, in the first six months of
States quite literally becomes the
1950, agriculture utilized the labor
'bread basket of the world'," the of 13%
fewer workers than in
a
What is more,
Business
Federal
but it
un¬
conditions
important producing regions.
seems probable that removal of
It
per acre,
portance during periods of inter-
some
has devised.
and
the
weather
yield an
expansion of total output of 25%
farm
people of about 4,000,000 it is no mean achievement to
750,000 of highly trained soldiers and airmen in readi¬
ness, with some of the best technical equipment military science
have
the
favorable
situation.
nation
weather
some
:
picture of the current
and prospective U. S. agricultural
country has succeeded in reconciling a high standard of
living with a high degree of military preparedness. It is not real¬
that, if war broke out tomorrow in Europe, Switzerland
would be in a position to put in the field
immediately more fully
trained and equipped divisions
jthan either Britain or France or
Italy. This in spite of the fact that her population numbers much
of
the Sep"Monthly
that
out
helped to improve yields
pro¬
relatively
"Popular Economics"
optimistic
cratic
one-tenth
of
Credit
of
tense
current
price-support
despite
favorable
basic
Bank of New York gives an ' productivity
serve
ized
than
nation's
situation,
issue
Conditions"
without the glaring lights of
propaganda, and for this reason very
few people outside Switzerland are aware that this small
demo¬
less
the
to'
tember
having had 4o
its
due
Review
Switzerland has led the writer of this article
this conflict between
supplying
the
on
productivity in the light
heavy prospective food
de-
"America's
that
its
and
gram
miliarize
international
with either guns or with butter and not both is
by no means in-^
escapable.
The Swiss nation has found a solution which has
enabled it to be well provided with
guns without
sacrifice
the Department of Agriculture in¬
cident' to
to yield 25%
Held highly significant in present
farm
of
Prime Minister woujd
part of the former.
A brief visit to
only moderately belbw the
all-time peak in 1949, despite pro¬
duction
restrictions
imposed by
New
Commenting
years
levels reached during World War
II and
Hitler and Stalin could
inadequate defenses. For the sake of the improvement of the
living conditions of the masses through higher wages and social
services, the latter have exposed themselves to aggression on the
the
of
few
that farm output in 1950 is
being maintained very close to the
international crisis.
striking contrast between
Totalitarian States armed to their teeth at the cost of
accepting
a
very low standard of living and Democracies with
relatively
high and rising standards of living achieved at the cost of grossly
to
matters
next
effoit necessary. It
important, however, to keep in
productivity in past decade has been sufficient
commit political suicide if he attempted this at
any time except in
extreme emergency.
Thus we are confronted with the
-
in
Productivity at Peak
agricultural progress and changes
the
an
mind
expansion of total output.
afford to force their respective subjects to
produce the required number of guns without
giving them the required ounces of butter; any
Einzig
within
make such
is
N. Y. Federal Reserve Bank estimates overall increase in farm
necessarily unavoidably at an im¬
advantage in comparison with Democ¬
racies, because they are in a position to force
their peoples to sacrifice butter for the sake of
guns, while in democratic countries this is
are
mense
Di<.
Switzerland
economic
Totalitarian
conclusion
politically impossible.
realistic attitude of
Finds Farm
be difficult
that
in
civilian requirements.
as
policy, there is at least one country in
a position to discourage aggression by
a display of strength.
This example deserves to be better known
and to be followed by other democratic countries.
security by sacrificing its prosperity to
requirements of national defense, and that
the
the
well
as
Western Europe which is in
tional
ments
no
sequently enough for military
taken
Thursday, September 21, 1950
..
a
balance between large-scale unemployment and over-full
employ¬
years
the
deterioration of the quality
Thanks to Switzerland's ability of striking a fair
of their output.
— Ever
since Goering's notorious statement
before the war, that Germany had chosen guns
in preference to butter, the idea that nations have to choose either
some
inducement to work
no
ill afford the
LONDON, Eng.
made
The result is that there is
hard, for it is only too easy to find alternative employment.
Switzerland evidently knows how to draw the line between
democracy and demagogy. While employment is maintained at a"
high level, there is no demoralizing over-full employment. Indeed
a country which depends to a
large extent on the production and
export of goods requiring highly skilled specialized labor could
.
1.
9
Bausenbach, Inc.
BUFFALO, N. Y.—A. E. Bau¬
senbach, Incorporated is engaging
in
a
fices
securities
at
19
business
Allen
Street.
from
of¬
t
Number 4944
Volume 172
..
The Commercial and Financial Chronicle
.
(1099)^19
j'the nations who
with us, for
th^y
associated called
are
are
more
^
^
HOI*. HARRY F. BYRD*
By
-
Yet, the President and
-
A
«•
-
„■
1H. S: Senator, from Virginia
1
.
;
destroy
tern
aims
consideration.■
^
may well go down in history as\
most irresponsible
.fivejyearsJ
the
Which
cialism.
ti°n> and the outlook for the fu-
enterprise
the dangers of uncontrolled infla-
*
We must do everything it takes' ture is gloomy indeed. As, awful
to defend- ourselves. Our own de- as these prospects are, they, of
fense should be as nearly impreg- course, cannot be compared wfth
nable as possible and should be' the fact that our casualty lists m!ay
our first consideration. - But, even
be expected to grow much greater
upon- expan-
sys-*
own
we'
building our before they become smaller.
defenses, we comThese are the grim facts that
started
military
enterprise system mitted ourselves
depend
we
to military defense of virtually indefensible for-
cannot
wc
face but have not been (old about
Unfortunately, the more* gruesome
r
debt,
or
or eign hationsi To defend-ourselvesi partnf the'burden wec&rry must
state so-Mn ahy circumstances,1 of course, is! be borne by the fresh
yourtg ar-
What happens to free em
our duty, and to defend-the others!
terprise under socialism has been^ in the current circumstances
v
mies,;
navies
is a! sehd' abrbatfl
and
air
It! is
forces
^ve
hot tOO^miJch
demonstrated > by the British be- responsibility to which we have'to'ask the'older generation to roll
fore our very eyes in these same committed ourselves.*
up its sleeVeS and' chsf ;aside its
five years.since World War II.
•
These things the Russians know.' luxury and make the economic
Apparently they know it better'' sacrifices which are necessary 1 to
,
now we are
War H ended,:They
free
free
overwhelming
saying We didn't spend
enough for defense. V
-
There have been just five years
lead-
our
j'
^sufyiVe, in confiscatory taxes
-V V
since- World
the
This
..
upon
7 V
;;
insisting
before it gets lower. Add to these
plan)-—which, if adopted, will' before
nan
io' $49
Points
still
cialized housing, socialized medicine, socialized farming (the Bran-
'
for socialistic domestic-civilian
billion spent in domestic-civilian
programs in last five* years'and- calls for putting an -end to
flintier socialistic legislation. * Says1 defense should be first
sacrificing defense
programs.
are
sibn of socialistic legislatioh—so-
/
Asserting Administration has maneuvered nation into position
oi being fiscally vulnerable from- with_n as wejl as militarily
vulnerable froift without, Sen. Byrd criticizes Federal spending
as
ers
upon, to exert our supreme
effort in another world conflagfca-
tiont
wardfc
allies.
than
How inconsistent can national
policy be? *
*
.
./ •
-To shift the blame,-or conceal
D°mestic-Ciyilian
Programs Have than We do.J And, these things the1 the preservation of thO nation, ilie
v
Cost $40 Billion
Russians are exploiting.
They are' f°rm: of govterhiheiit- ahtf thd frdeRe-"„ ity is a natural and lnevitable^fo^
in these five years the Federal especially
exploiting our vulner-1 dom which was its heritdgeT
I
public,: and, ;low-up to irresponsibility. We thus;-government has spent approxi- able fiscal condition at home, as
I do not concede that either deunle'ss we be- have Whar is a very obvious hos- mately $40 billion for strictly do- Russia is
waging against us today: mocracy, or free enterprise, or any
gin thinking- tility between the two
greatest. mestic-civilian programs, exclu-1 a war of economic attrition. More'other American freedom has rim
straight and1 and most-vital departments in the sive of the cost of the interest on\ than our own
military might, the the course of its usefulness in the
.'n»i
FvPfiitivp Rranrh
of thp
pnvprn+u~
'
*
t h e; great
ui:
^American
-
.
.
:/
t
_.-i
t
...
..
..
.
.
time
all
To'
stra
Harry F. Byrd
act
accord
ingly from this point forward, we
the' hour of its
would do well to analyze the
we
war
in which
orgy
post-
actions
in-' we
have
we,
the test of my vote,in the Senate
don't recogi
dulged ourselves, for we are about»if we do
to find that the adversaries which
haven't bCen told about it.
,
ccnircnt. us
and
strong
are
,
...
have'}
we
years
®
■
*
told
squandered the greatest prosperity
ever
to come to-any nation; the "
naivv
Federal Government has collected J
We
far
than
taxes
more
ever
about
'
delinaueht
or
:
Are
Fiscally
Vulnerable,
before;' '
we Kave maneuvered'the greaton' est country the best form of
aovpurely domestic-civilian programs emmenj. ar^d.finest
it
has
than
spent far
money
nation^of
before; it has spent far
ever
more
more
abroad than
money
npnnlp
hi<;tnrv nf thp worid
in th
fntoPa ^
posit;on wherye
be-
ever
fore* it has
fore; it has snentr far more money
spent far more monev
for defense than ever bqfore with-
*■
,
,
they
achieving
we
haver
tailed
public
greatest
has
preparedness,
to
,
caUy vulnerable from within, and
s0 greatly extended that
so greativ
,
without
Neither
democracy
any
the black
bohdfigg
mihtar^
of
tutorship'
ourVedtal buda/t mfv
[he Preservatio" of freedom in our
before
be
not
df
forced to go to war
were
without effective prepara-
Korea
although
had spent
we
the .parti
fense in
fore
in
the
more
flve^yeaS
invasion,
Be-
Congress
was
told that the South Koreans
were
well
trained, well equipped, and
prepared
to defend themselves, and later we were told that
well
,
did
we
.
.
,
dare
not
for
equipment
would
train
to
.
..
them
them effective mill-
more, or give
tary
,,
attack
the
f
e a r
pTea thlt
what
votes
toil
of
the
work
to make this
,^e
(Marshall
and militarily
abroad
expenditures
earned'
give-away
in Korea
program
to hide its benefits.
a war
unify our armed services,
and join
the United Nations to
work
as
an
integrated national
international team for peace,
and, as we send the Marines to do
a
dirty job of shock troop^ relief
at the
war
front of
our
own
uni-
fied forces under the direction of
the United Nations, we call them1'
*
long time to
by
come,
has offices in New York,
Los
1950 Federal Expenditure
troit
Our Federal expenditure budget
for years
to'come
nne
wars
we
not
celebrating
anniversary this year. The
partners and top personnel of the
its 40th
^gan^tfon meefeach"
before it
off
by
Lr»11TrVkAA
Un/lnolrAJ
v-v/%
as nearly as possible, and it, too,
down side-"will
before
satellites in
higher
be
it
gets
for
lower I
ments in the accounting and tax
long
time. fields. This year's meeting will be*
debt,
•
held in Los Angeles, Calif., dur-
required
impregnable.
'
This announcement appears as a matter of record only and is
under no circumstances to be
offering; of these securities for sale, or as an offer to buy} or as a solicita-:
securities. The offeHng is made only by the Prospectus.
tion of an offer to buy, any-of such
come
jf
which
we are
over-^
must
we
an
not to be overcome,
,
ant
.,,
have only 6% of the world
s
We have assumed the
reSp0nsibility for propping
half
0f
economy
as
the
world
150,000 Shares
:
the
up
These
bilities
at
js
are
and
than
a
have
we
time when
a
more
our
jess
ever
ye{
John Meek Industries, Inc*
i
,
.
Common Stock
•
national debt
trillion
a
other ria-
dared to conceive, much
assume.
Our taxes
approaching
j^dch
antj
assumed
quarter of
dollars—more than any
tion
*■>
tremendous responsi¬
which
are
.confiscatory
greater
already
levels,
taxation
Price $4.00
Per Share
,
3
l
must
come.
~
t
-
S J30I1S1 UllltlGS
W6
ll3V6
t0 preSerVe our free
3.SSUlTli0Cj[
way
of ,
I', life lies in the capacity of the free
Our leaders complained that tne enterprise system to produce tin
2
Copies Of the Pi-ospOctus may be obtained from such of the several underwriters,
including the undersigned, as are registered dealers jn-securities in this State.
f
r
^
ing
socialistic
programs
*.«
»
of
was
domestic
civilian
terials and engines of
-
j
quantities those goods, mawar
&
\
which
:
f
At
C
------
Tax!"
mass
Federal^ but
addj-ess b, Sen, Byrd
National
-
depriv-
Association,
Pa., Sept. 13, 1950.
_
:
tity
than all
More,combined,
Pittsburgh,
for
us
of
our
adversaries
Ahd thrte is UO-reason
to expect much help
from
>
'.
*
September 19, 1950
-,
in
Our
a
or whether we areals°. will rise for years to come ing the first week in October.
sjtuation!
f,.W of ballyhop-bedecked po- ^
^
high cost of defense
year
onfofte^cities whl?e its'offlces
aPP™ach the expenditure figure, are located to discuss develop-
sight,
continue hopping
yon to put
set
in
Chicago,
Angeles, and other cities, De¬
being its 15th office.
The Seidman firm is
this year will be between $50 billion and $75 billion, and it will be
construed
pro¬
We
and
acterized by unselfish and selfless
patriotism is the first requirement.
We have had it in the past/ It is
not too much to ask now.
necessary:
voked the communist Koreans into
starting
dollars-is
whether
thither and
to.: contain defending more tha n half the
commumsm and prevent war, but,
-countries Qf the world from miliat the same time, we were told
tary attack by communist dictaby Administrator Hoffman that tors whp control the other half
the great effect of the foreign
earth. '
are
a
Here is the situation1 into which *
we
bave gotten ourselves — thfe^
North Koreans.
Plan)
is
everything
j
,
country fiscally sound
they
told that the_ ECA
that
to
,
these, leadership char-
.
At any rate the end of the sac- higher
public
spending
by
applied
'I! ndardl THWng^d in^d getS '°Wer °Ur t3X bUdg6t mUSt
^"downl'to thTlwelfa^d'1 the:remote^^areas-
population.
'
we
—strip off the luxuries of sociological ventures and political bids
for
,
must dance.
know has to be done
we
.
elpoep^.yof Christian democracies
simple plea for
a
In all of
-<'—.
•'^
go^ovef the &
we
precipice of financial disaster.
We
This, then, is
be
to
allowed ourselves to be maneu-%
vered' into the shameful position
where communistic dictators .can
call the tunes to which the free
die-
only 2. We have started
deficit spending again in a large
baiaimed
86
whether they will risk commit-
*
the shackles of overwhelming debt
the
cordingly.
ting themselves and their own re—everybody in this country — in
Seidman & Seidman
sources to an all-out third World public office or out—for a long
^ar' is to be tlleir decision—not-time to come, if we are to restore
ourS* Russia has the time table-the peace and freedom for which
—not us.
this nation was founded, and to
Seidman & Seidman, a national
* Perhaps there is no sadder com-" which it is dedicated.
'
1"
fjrm of certified public accouiftmentary on-the quality of postwar".
There is no short cut—there is V
announce the establishine £
Yankee shrewdness" at Washing- no easy way; it can't be postponed
... >
.
nptrnit
MirW
Sf
if
vrr
it must TiULo a part of us for offices in Detroit, Mich., located In.
become ;
ponnKcpM
ti^
t°n tbau the fact that we have
the Penobscot Building. The firm,
in either
*
government has been in
years our
be militarily vulnerable
may
..
nation
In the past 19
known.
ever
and«^ey
tne
curtail
debt
communist adVer-
„
fis:
are
n
perhaps
mu^ umucva uamc wnn- perhaps
out
-
rrimi_
lpader,hil3
our
believe in my conscience to be thel
by prolonging this series of side-.-best for .my country. I say with
line* satellite wars breaking out' all the sincerity of which I am;
here and there all over the globe,* capable that such must be the test \
0f Its'-
^
-
.
aren't
these' five
In
Whether
r..,r-
•
c
rutniess.
ave been in the past, and
they will.be in the: future, are
determined by the test of what I
we
*f;
0um,4.
nize the sacrifices we must make;
until we see clearly the course We
mus* takeI and until we act ac~
now,
as
If
...
•now
elsewhere,
CO.
<L
i
.)
-20
The Commercial and Financial Chronicle
(1100)
''"Herbert E. Scharff Opens
LITTLE NECK, N. Y.—Herbert
/•
E. Scharff is engaging in
v
ities
business
249-16 Fifty-first Averue.
Mutual Funds
secur-
a
offices
from
He
at
By ROBERT R. RICH
formerly associated with Tellier &
Co. of New York City as cashier.
Parker
in
Demonstrates
Value of Management
Almost
25
ago
years
the hold¬
value.
ings of Parker's new-born Incor¬
NATIONAL
Inves^merO^count
Open
Details
of
prospectus
request
upon
NATIONAL
&
SECURITIES
CORPORATION
RESEARCH
120
and
program
BROADWAY, NEW YORK 5, N. Y.
On
the
plus
12%,
up
minus
side,
finance
the
were
Drake
To
all
Today,
$165,000.
INVESTMENT PROGRAM
the
were
worth companies were down 23%, elec¬
the com¬ tric and gas utilities were down
panies which made up this orig¬ 8%.
inal portfolio are solvent.
None,
As
the article notes, "It isn't
has been through bankruptcy, and
always easy to see in dollars and
with the exception of American cents how diversification
works,
Investors
porated
An
On
side, rail
aircraft
manufacturers were up 17%, and
metals and mining were up 11%.
values
Dividend Notice
The
Board
Mutual
dend
of
has
of
Directors
declared
twenty-seven
payable
on
holders
tn
No. 40
a
cf
cen.s
September 29,
record
as
Investors
quarterly
of
divi¬
share
per
Fairman *&
are
ILL.—The
Munici-
&
Hotel.
Moseley & Co., Chairman; Robert
featured
be
R. Harmon, Shields & Co.; Harold
H. Spink, Dempsey & Co.
at the
outing
golf, with prizes for individ-
ual low
(one for guests and
Horseshoes:
James
S. Barcus,
members); first low net Barcus, Kindred & Co., Chairman;
foursome;
individual
low
net William
H.
Hammond,
Braun,
one
gross
for
(separate prizes for guests and
Foundry, all of them are how it uncovers unexpected op¬
and
other
awards;
at a profit.
But, al¬ portunities which help to offset members)
though millions of dollars have unplanned for reverses. Yet from horseshoes, soft-ball; and tennis.
There will also be a special event
been
plowed
back
into
their time to time, the benefits of di¬
under
the
direction
of
William
plants in improvement and ex¬ versification
become
plain
and Morrison of Harris Trust
and Savpansion, the value of the secu¬ clear and measurable."
mgs Bank.
rities in the original holdings has
Reservations may be made with
increased only $6,000 or less than
Scudder, Stevens Fund
Francis R.
4%,
including stock
dividends,
Schanck, Jr., Bacon,
Rises by Four Million
Whipple & Co. Guest reservation
rights,
warrants
and
the
like.
Scudder,
Stevens
&
Clark fee will be $25.
But,
during this
same
period,
$165,000 placed in Incorporated Fund, Inc. reports total net assets
Members of the General Com-of $31,963,304 on Sept.
11, 1950,
Investors would have been worth,
mittee are:
equal to $53.73 per share on the
on Sept. 1, $287,000, or an increase
Thomas
w.
Evans,
Haisey,
594,906 shares outstanding on that
of 74%.
Stuart & Co., General Chairman.
date.
This
compares
with total
Parker
tells this- story in its
net assets of $27,461,365 on Sept.
Arrangements: Francis R.*
current letter, and, to drive home
the
importance of management, 12, 1949, equivalent to $49.23 per Schanck, Jr., Bacon, Whipple &
share on the 557,807 shares then
Co.,
Chairman;
Edward
McC.
it has listed on one side of its cir¬
Blair, Wm. Blair & Co., Gene A.
cular, the original holdings of In¬ outstanding.
Scudder, Stevens & Clark Com¬ Frantz, Weeden & Co.; Arthur E.
corporated Investors, asking the
Car and
Bosworth
Northern
1950 to share¬
September
16,
1950.
H. K. Bradford,
President
value.
in
the
other
the
On
side
of
the performance is
given. Of the 16 original stocks
owned, Incorporated has outper¬
circular,
Investment Manager
Investors
Leverage in New Booklet
Syndicate.
Minneapolis, Minnesota
Fund, in one of its
booklets, is featuring the
leverage factor obtained by its
right to borrow money.
From
1945 to June
1950, the
booklet
notes, borrowings have
averaged about 22% of total as¬
sets.
On Dec. 31, 1940, borrow¬
ings amounted to 44% of total
assets, and the ratio increased to
J
57%
June
on
30,
1942.
All
the
then being borrowed was
paid off on June 15, 1950.
Since
September,
1945,
the
amount
of
borrowings
of
the
Fund has been subject to the lim¬
money
itations
TZZ^sb^-^prospectvs front
your
dealer
investment
or
of
the
Investment Com¬
pany Act of 1940, which requires
that borrowings not exceed one-
40,494
on
On
PHILADELPHIA
2, PA
?
Jr.,
Reception:
13,
1949, net
$634,300. Adjusting
split of the
two-for-one
last
March, the
value
asset
share
per
Sept.
on
13
of
Canadian
Fund
Resources
vestment
five
of
Fund,
million
The
fund
rities
initial
of
of
is
the
the
in
secu¬
the
are
and
natural
re¬
directors
its
that
assets
dividend
not
will
Miehls, Wm.
rence
Blair & Co., LawWingader, John Nuveen
A.
Joins Draper, Sears
policy
less
be
the
of
than
60%
Nuveen
;
&
is
Draper.
gears
now
affiliated
Co.,
=t—
Fund
that
shows
market
had
covered
Keystone
(Special
Boston
h.
Stock
was
Johnson &
its
on
Sept.
almost
14 the
Exchanges. Mr.
previously
Co.
and
exactly
"Pre-Korean"
re¬
high,
King
has
joined
Merritt
&
BOSTON,
MASS.
—
Sheldon
of
Keizer &
staff
Inc.,
c7//e Seor<i«
PUTNAM
FUND
/jjoJtvn
-
.
1
:f
Pvtham Fund Dutmbutou. im.
i
-
-T
Building.
share
during the period.
The significance of this record
a
Custodian
that the
is
Group Securities, Inc.
balanced fund in question
servative
Funds
with
25
rities
investing their capital
40%
such
AAA
and
INVESTMENT FUNDS
to
invested
ally
Certificates of Participation in
aim
in
ord
con¬
upon request
ABBETT & CO.
ifHiioO
AooiH
J. R. Bragdon Now
With Goldman, Sachs
Investment
Managers
uLrtoD
/T
/•>,
J
Lord, Abbett & Co.
New York**$W—
Chicago
—
Atlanta
—
Los Angeles
usu¬
defensive
cash,
secu¬
governments
Hence, the
achieved
was
of
in
as
is
Prospectus
LORD
<:ntiTHiVj
operation,
of its assets
bonds.
tirely b.y the
tion
and
■>. uu'i
:
}>.
while the asset value of the Group
balanced fund increased two cents
Fund, Inc.
of
Pencfe
rec¬
almost
en¬
stock
por¬
common
Fund.
the
IN
Putnam Fund Shows
BONDS
Diversification in Action
(Series B1-B2-BS-B4)
PREFERRED STOCKS
(Series K.1-IC2)
On June 23, the day before the
Korean
shares
COMMON STOCKS
(Series S1-S2-S3-S4)
two
may
But,
be obtained from
Keystone Company
of Boston
'
'
•
50
Congress Street'"
;
I
•
were
overall
Fund.
Roger
Bragdon
(Special to The Financial Chronicle)
only
the composite
performance of the
•
To
J.
Investor," these fig¬
VM.,v;
..
;
.
.
demonstrate., how diversifi¬
cation,, reduces < risljL, f, the,, ; Fund
listed vitsr;;
holding... of common
groups ,i and
showed
BOSTON,
Bragdon
has
Mass.
become
with, Qoldman,
Federal
—
Sachs
J.
A
Roger
associated
&
Co.,
75
^treetj iP^. ,was i formerly
the
with: the Trading' department of
of their marT.
the Bostbrt* off ice bf Blair, Rollins
the same
;
percentage (change
•
J
they
Putnam Fund reports in
measure
stock
Boston 9, jMassachiisetts
as
"Prudent
ures
or
Tke
later,-
$16.63.
its
Prospectus
"break," "Putnam Fund's
$16.61. On Aug. 23,
were
months
•
,
ket
values
month
Fund
over
period ~,that
shares
two-
the
increased
Putnam
two
cents
&
Co.',4 IiVc; and' |>ribr thereto
with Coffin &
was
Burr, Incorporated.
Diversified Investment Company
Prospectus
S.
Co., 19 Congress St.
>»»»»»!
Affiliated
Chkonicle)
the
Co.,
the
Mann has been added to the staff
investedj in
Financial
with
in
Keizer Co. Adds
5Q State Street, Bojtoo
Tennis. P^Kil Jhckbcn,rS|ii8lds
&
Co.,
Chairman; J. Franklin
MINNEAPOLIS, Minn.—Roy M.
Kelley
State
past with Chas. A. Day & Co., Inc.
Co.
King Merritt
to The
with
53
gtreet, members of the New York
ancj
paying securities.
With
Performance Noted
comparison of the stock mar¬
ket
"averages" with the opera¬
tions of The Fully Administered
'
BOSTON, MASS.—John C. Larmondra
Fully Administered Fund
A
.
(Special to The Financial Chronicle)'
(Special to The Financial Chronicle)
Warren S.
Golf:
Thomas
Kelvin, Glore,
Forgan & Co., Chairman; Paul E.
Uhl; Edward V. Vallely, John
Canada, with particu¬
present
D. Buchan, White,
Co.; Raymond V. Condon,
Ingen & Co.; Don G.
Van
& Co.
O. H. Heighway,
Weeks, Chairman;
John N.
Faust, Kidder, Peabody
&
Co.;
Paul
Stephens,
Paine,
Webber, Jackson & Curtis.
lar reference to those
engaged in
the development of mineral, nat¬
ural gas and oil resources.
It
J.
Hornblower &
invests
development
B.
Refreshments:
offer¬
William S. Mor-
Harris Trust & Savings
Andrew
cago;
Weld &
McMaster Hutchinson & Co.; Carl
H.
Oilman, McDougal & Co.
companies
which
in the exploitation
sources
•.
In¬
of/
engaged
.
Maxwell,
C.
is offering
shares, $1
common
value, with an
ing price of $5.49.
par
Walter
M.
chairman; P. Alden Bergquist> First National Bank of Chi-
tin, Burns & Corbett, Inc.; Walter
J. Fitzgerald, Jr., Blunt Ellis &
Simmons; Frank B. Hutchinson,
Canada
Ltd.,
jr
J.
Co.
Bank
B
Yates, C. F. Childs & Co., Chairman; William J. Corbett, Jr., Mar¬
Five Million Shares
The
Co.;
?xrJh°rP-c>V^}^ir *Larmondra
White Phillips
Entertainment:
Offers
&
Trust
Special Event:
rjson
Cleave,
Blyth
&
Co.,
Inc.,
Chairman;
Charles F. Hemenway, The Illi¬
nois
Co.;
James
P.
Jamieson,
Glore, Forgan & Co.
Sept.
were
the
outstanding
last year amounted to $22.01.
of
third of total assets.
Phillips,
o*' lnc-
per
Affiliated
new
>■
shares.
net
'
$23.85
to
^
A.
.
shares
Features
Affiliated Fund
INVESTORS DIVERSIFIED SERVICES
equal
year,
share
for
Principal Underwriter and
as
this
assets
formed all but four.
Established 1894
Stock Fund, Inc., reports total
net assets of $965,802 on Sept. 11
mon
of
De-
man;
operating
reader to list the order of increase
Co.;
Witt Davis, Welsh Davis & Co.'
Softball: C. J. Robertson, Sills,
••
INVESTORS MUTUAL
Thursday, September 21, 1950
.
Harris,- Inc., Chair¬
John W. Allyn, A. C. Allyn
Co.; Eugene C. Travis, Harripal Bond Club of Chicago will man Ripley & Co.
hold its 14th annual field day at
Transportation Walter A. Hintz,
the Knollwood Country Club on
McDougal & Condon, Inc., ChairFriday, Sept. 22. The event will man; James G. Brophy, First of
be preceded on Thursday, Sept.
Michigan Corp.; Henry J. Jensen.
21, by cocktails and a dinner at
Prizes:
George J. Bielby, F. S.
CHICAGO,
was
°
.
Buckmore, Boettcher &
Municipal Club of
Chicago Outing
'
.
may be obtained from your local
investment dealer or The Parker
Corporation,
200
Berkeley St., Boston 16, Mass.
Number 4944
Volume 172
.
.
The Commercial and
.
Chronicle
(1101)
hut;
so far as possible; frbm the
public .and non-banking institu¬
;
By M. S. SZYMCZAK*
'
Member, Board of Governors, Federal Reserve System
Federal Reserve Board member points out causes
of inflation,
Says it is insufficient to
tax away excess dollars if I hey can be replaced through credit
expansion. Cites means of restricting credit through discount
and open market operations of Federal Reserve and through
high margin requirements in stock exchange transactions.
its
dangers, and
to combat it.
means
well bal¬
a
rela¬
tionship
be¬
tween
the
dollars
we
have to spend
and the goods
to
."
*
-
onto the scales.
The
plain. More dollars are being sup¬
plied and less goods will become
tion reduces the value of the dol¬ available because a large part of
lar and makes us weak.
If
We can the goods will go to defense.
avoid inflation this gets out of hand it may be¬
anced
banks find, it
credit
-
expansion- for
.
new
more;
the
excess
present
tendency of the larger
banks to cultivate the small busi¬
field. A variety of economies
become possible, making banking
ness
me.
To the extent that we services availaoie to the public at
willing to tax ourselves and to a lower cost.
restrict
our
On the other hand, the
borrowing, we can
develop¬
succeed in large measure in main¬ ment has implications which could
taining our
economic
balance become undesirable, and already
which is synonymous with our the question has been raised po¬
well-being.
litically whether the trend is lead¬
and for
Federal
must use
their
use
These
reducing the goods you and I can for the battlefront. You and I
buy, it becomes increasingly im¬ don't like to be controlled or reg¬
perative to curb by taxes and by ulated. It can be justified only as
credit terms tne dollars flowing a
protection—a protection for you
Everywhere the American dol¬
lar is a symbol of strength. Infla¬
by
Truman has taken steps Jo
curb
construction in real estate.
advantageous!
capital irT the
purchase of ot^er banks, thereby
It is likewise important that all selective means restraio the bor¬ a c
q.uixin g
existing facilities,
of us—business and you and I— rower or the
buyer—you and me: brai.ches,
deposits,
and experi¬
curb our private borrowing.
All these,means are weapons— enced personnel.
As
J,
defense requirements take more to
The public interest would
fight inflation—and are as es¬
ap¬
and more of our
production, thus sential as the weapons necessary pear to be better served by the
How to Curb Inflation
.■v.-
ident
tions.
\',2X
Reserve
means
System
it has
to
are
re¬
strict the growth of borrowed dol¬
lars. The general means we have
to
.
accomplish this are technically
as open market operations,
discount rates,
We must not only strive for bal¬ ing to a monopolistic situation.
and reserve re¬
come ruinous.
The
German
inflation
after quirements. They restrain lending ance, which is called, economic Obviously, this is a far-fetched
stability, but we must keep our cry when one considers that there
World War I ushered in Hitler. by banks.
We may later need additional people
employed and we must are approximately 14,000 commer¬
The more recent Chinese inflation
general means. We have also cer¬ keep our factories and shops mak¬ cial ba ks now operating through¬
paved the way for Communism.
tain selective means to restrain
out the United States.
>
i
How then can we restore and
ing things we absolutely need in
maintain this balance?
We
can
do
known
stock market credit and
also
now
Consolidation
of
banks
con¬
our
daily lives, but, above all,
a means to restrict credit on auto¬
tinues. The cause is low earning
taking dollars
mobiles and household appliances making things we must have for power. Tne sa
e consideration of
away through taxes. But also we
can
spend
(known as consumer credit). Pres¬ our military defense.
the public interest should be the
them.
The must curb the further growth of
concern of governmental
agencies
scales
should credit. It accomplishes nothing to
whose policies so vitally affect the
be evenly bal¬ tax dollars out of our pockets if
Continued from page 4
earning power of banks.
."
anced. If there we can replace them with bor¬
^
on
which
we
it
first
of
all
by
.
are
too
many
dollars
M.
S.
too few
Szymczak
prices
and
up.
been
be
to
spent
on
a
supply of goods.
Credit
goods,
go
dollars
rowed
limited
sharply
by banks hhs
expanding. Sim¬
ilarly, borrowing by you and me
tion.
Our supply of dollars in¬ to
buy
automobiles and
other
creased
greatly during the last goods—called consumer credit—
has been growing rapidly.
war. We still have a very
Real
big sup¬
That's
infla¬
ply. Even before Korea there
clear
signs
of
pressures
to
ance
need
between
♦Remarks
sion
by
Report-Washing¬
NBC studios, Washington, D. C.,
17,
estate
credit
and up
for
has
some
been
time
going
up
now.
Mergers in New York City
Requirements
For example, in New York Citw
the cash reserve requirement im$
ratio today of 10 to 1
much too low.
New York City varies from bank to bank, rang- posed upon the banks by the Fea4
eral Reseive Board is a discrimibanks are further handicapped by ing from a high of 16 to 1 to a
the high cash reserves which they low of almost 4 to 1. Banks with ijatory handicap which suppresses
are required to maintain.
As one the low deposit-capital ratios are their earning power. Despite then*.
banker so aptly stated, "Our capi¬ those holding "excess" capital. Let traditionally strong capital ratio
ingly
heavy
this
taxes,
ratio
is
average
ates
Government
taxes
1950.
it
doesn't
borrows
get
not
through
from
banks
nificant. The blue-ribbon- banks .y.
n
have lost ground.
The brown hJ"ilonmanually.
\Let us remember
derby banks have moved ahead.
Distribution of New York City Clearing House
LEXINGTON
Showing Percentage of Each Bank
*
-Based
Weekly Net Demand and Time Deposits
(Including U. S. Government Deposits)
Average
Deposits—(000)
Chase
14,70
Trust
York
7.53
8.67
8.82
5.14
4.89
5.56
4.20
4.42
3.71
2.55
4.00
Trust
S,
2.72
1.37
Guaranty
Grace
(")
(a)
from
they
to
government
are
the
banking
assured that
will
recognize
worthy of its hire.
3.22
1.54
2.08
2.01
1.08
1.21
1.33
.73
.71
.92
.95
.54
.51
.39
.38
.41
.28
.31
.31
.12
Trust (c)
Bank (t)__
Bernard L. Decheine ^
With Dayton & Gerno
.66
.11
.15
.22
.21
.40
.42
(d)
&
—
—
.31
.40
.36
(*)
'■*
the
2.61
3.18
1.50
.92
•
.45
.43
100.00%
100.00%
100.00%
100.00%
100.00%
1946.
(h Joined in 1943. ' (t) Joined in 1944.
Manufacturers subject to stockholder ratification on Oct. 11, 1950.
Bank,
(c) Merged with Bank of New York,
(d) Absorbed
Clearing non-member, joined in
Merger
with
by
Chemical
Bankers Trust,
1, 1950.
Sept.
14,
liabilities assumed by Bankers Trust,
(e) Deposit
1950.
July
In many instances,
—
V
.50
Farmers
(b> Abrorbed
by
'
.89
Totals
be obtained from
.
'
1.69
.89
.86
-—
National
City Bank
<
.92
93
.86 *
.77
Film\fAvebite ;(c)_.
Title
2.42
2.75
3.03
1.51
,____
(t J
attracted
bank capital as
4.34
2.20
National
Ltiwyer'&Trust■ "(t)
be
not
2.37
1.53
Brookhpi,-Trust (t) (a)
Continental Bank (bi—l
U.
4.39
2.56
3.00
Trust-
Midland
Commercial
4.07
2.18
______
private enterprises/ " The
clear.
Invesjoi^iwill,
field unless
2.47
1
(t)
Trust
&s
evidence -is
4.27
4.89
whicfi
5.54
4.46
2.74
New York—
Marine
5.31
3.95
National
Pub ic
5.57
5.59
._
Exchange
Bank of
9.50
5.41
5.63
4.89
,__
—
Morgan
New
9.90
6.26
6.54
4.56
__
National
Porn
12.18
7.66
7.40
4.61
Bank
Manhattan
P.
19.48
i
oujr
institutional
17.83
19.44
5.15
,
Manufacturers
First
17.60
7.80
Hanover
J.
17.73
16.42
7.61
Trust
Central
Trust
.
16.82
13.99
16.70
Bankers
Irving
19.98
19.82
__
C.ty
Chemical
ate
1950
$15,122,£75 $16,757,052 $25,810,914 $21,881,587 $21,949,892
_.
Nat'onal
National
1949
1945
1941
■
in
enables commercial banks to oper¬
G Months
J.
1940 '
Total
Guaranty
or
..
.
"
«*.
.
' ^
Average
on
-v/i
■
investors supply the capital
Total of All- Clearing House Banks
to
*•
that
economy, private and
Deposits
4-
Office
their high degree of liquidity,
these 25 central reserve member
banks must maintain cash reserves
qf the income of more than $10
Banking capital is unevenly dis-
the Fund's New York
,
Deposits six months of 1950. The shift m ers of New York banks this meaqs
the relative position of the banks that your institutions afe deprived
shown in: the table is most sig- _f th
inram~ of morp Iufln
tribuled among these banks. This
intensifies the merger trend. The
may
.
„
lion would be indicated.
Prospectus
,
J&L^2% against their demand de4
posits whereas the rate is 18% fojp
orawal
by investors of banking the
accompanying
table which the 346 banks in the 58 resqrvd
capital, how great will this trend presents the distribution of Nevrcltles. This handicap of four ,per-»
be?
The overall deposit-capital York City Clearing House deposits
^^tage points means that an ad-f
ratio is now 10 to 1. If the devel- and shows the average percentage ditionaL$800 million of theNey^
Opment proceeded further to a of each bank to the total of all York City banks assets are irhpoirit at which the ratio became Clearing
House banks for the poundeu m cash of the Federal
12 to 1, a withdrawal of $400 mil- years 1940, 1941, 1945, 1949, and Reserve Bank. To you stockholdof $23 billion would then compare
with capital of only $2 billion.
TRUST FUND
..
.
Borrowing from the banks cre¬ tal strength is now our weakness." us not overlook the fact that demore
and
more
dollars,
posits have shifted in the last ten
Question of Deposit-Capita! Ratio
years to banks having broad pubdollars and goods is whether done by the Government
If further eliminations are to lie contact.
or by you and me.
It is important
Mr. Szyimczak in televi¬ at a time like this that what our come,
This condition is illustrated in
with a concurrent "with-
"Battle
program
ton" at
Sept.
were
upward
prices. After Korea
bring back the bal¬
on
the
renewed
«)
Discriminatory Reserve
Bank
extended
operating
re¬
sults of recent years have not jus¬
tified
the
existence
of
position.
certain
banks to pay out a larger
of
earnings
in
tradition
of
versus
Bernard Decheine
oppor¬
(Special to The Financial Chronicle)
excess
an
The decision of
capital
share
tion
tunity.
cash
Will Large Banks Change
Business?
Under the
divi¬
Scope of
Wis. —Bernard
LaCROSSE,
•
Decheine
circumstances, man¬
with
has
become
&
Dayton
4
associatef
Gernon,
Stat
management's answer to agements may ask—are we to re¬ Bank
Building. He was formerly
question — why add to our main a blue-ribbon bank continu¬
ing to serve our limited clientele, manager of the trading departU
capital when we can't use it all
ment of J. M. Dain & Company!
or shall we cross the tracks and
now?
dends is
Ira Haupt & Co.
Members New York Stock
and other
Exchange, New York Curb Exchange
principal exchanges
the
Managements have responded to become
the
realities
Broadway, New York 6, N. Y.
an
excess
capital
position by larger dividend,, pay¬
ments.
4t thevsamer tiqie they
know that this excess capital can
be used t6r; Acquire ' other' bahfe".
They a re• alerted to< th e" potential ities offered; tp .secure (their (future
competitive po^itfbq.. And, this-has
brought into focus the larger ques¬
.
111
of
a
bank of little business as
the
as
highly ddhipetitive Wall Street
<'jUhgle,M* Vakirig, large- loans rtb
tevi/
j'i
Of Minneapolis.
big business?
Shall we
continue to operate exclusively; in
well
SHelds Co. Adds
'/
(Special
to The
Fit*Uncial
\i
Chronicle)
'bb'trov/ers^t cht-throat rates, j? LOS ANGELES, Calif.—Arthup
ft. Thompson ha3 been?, added tpj
f
orJ shall'7 We broaden? - 'otiir4 sphere
through branch Operations and ex¬
tend', bqr service# Hx* thfe' ^lihlic?
fir deciding
■
.
•
"
to
make these qhangesj
.'1
vti'j >,
the staff cf Shields & Company,;
|l0
West Sixth Street.
/j
22
The Commercial and Financial Chronicle
(1102)
International Fund States Gold
Bank and Insurance Stocks
tions to
premiums
on
!
Within the next two weeks New York
City banks will publish
the third quarter. The results
achieved so far this year have been encouraging, and it is expected
that earnings for the current period will also show a favorable
•
statements
operating
for
comparison.
A
in
expenditure
-
inventories
were
-
national
this period reflected the prevailing
and showed one of the greatest declines in
While part of the contraction was seasonal in character,
important element in this situation was the activity in the
nondurable industries. Soft goods were particularly hard hit, and
An
;
.*
with
bank
inventories, reduced commitments in trie expecta¬
prices, many retailers who normally use
on
pressure
lines to finance
tion of still lower
Around
prices.
middle of August
the
the liquidation
was
completed
activity increased. The recovery was accompanied by
firming prices and rebuilding of retail inventories for the fall
and winter season. Loans to business responded to the improved
factor in
The main
the business recovery was
the high level
of activity in the building and Automotive industries.
The same
elements continued to support business through the first half of
;
'
Residential construction and automotive output reached rec-
.1950.
ord
i
rates
during the period.
A considerable
of
April
the
30,
tion
with
gold
ex¬
situation, particularly
gold production and
regard
the
to
lication
as
it
free
gold markets.
rate
world
chapter follows:
Fund's Gold Policy
proved the position of
dressed
in
ter
all
to
which
national
In
it
believed
is
reason
its
it
members
deprecated
transactions
in
let¬
a
mvina-.s
inventories
outbreak of
inter¬
gold
at
take
steps
to
prevent
Business
has
been
loans
rising
were
rapidly since that time.
trols,
and
before
July
but
have
of
of its
many
mem¬
the
amine
and
omy,
icy.
the rise
was
one
of the
largest
i
on
are
now
almost
back
to
the
ing
members
Fund
changes
tices.
In
have
before
in
their
spite
of
con¬
introduc¬
gold
the
prac¬
fact
-that
the
arrangement
limited
in
hoards,
absorbed
would
been much
bers
the
and
thus
amount
probably
have
larger had Fund
mem¬
non-members
some
cooperated
toward
making
not
this
the
the
Fourth
Board
Annual
Meeting
Governors, the
of
Union
introduced
of
their
internal
of
South
resolution
a
to
good
one-
gold
better
showing.
port
holdings of government securities are below the total of
•last year, income from this source
may be down. The better yields
which have been available may prevent
any substantial decline
however.
also have
a
securities
tax
such
as
municipals.
-
These
employees
Tax
as
as
well
as
some
outlook, rijay
be
factor
that ,could
aid
allowed
under
the
upon
the
ac¬
Treasury
formula.
In
such
cases,
future transfers will represent
replacement of loan losses charged
against the reserves.
faced
with
payments
have
be
to
met
large
inter¬
deficits
which
by
that
might
,
amounts
-.
of
be
divert
gold
from
undesirable.
exist
world
additional
monetary
into private hoards would
reserves
in
Moreover,
in
which
as
of the
parts
many
markets
foreign
exchange is dealt in at off-parity
rates, any extension of premium
gold transactions would be likely
to
encourage a greater volume of
such
exchange
dealings.
would
from
not
the
change
cause
This
only be unsatisfactory
point of view of ex¬
stability,
a
but
distortion
of
would
the
also
normal
pattern of trade that might affect
adversely the commercial interests
of
number of countries.
a
The
Executive
the
Belgian
Urundi.
also
change in the
par
values of all member country
In
its
view
Congo,
The
Reserve
effected
gola
certain
which
sales
there
was
Gold
Prices
Black
in
Afser
in
par
a
values
uni¬
were
revival
of
much
activity,
reduced
with
1949.
Kong
dollars reached
fine
per
in
recovery
been
slow
increases
gold
owing
to
in
operating
including mine la,w, sup¬
and equipment, wmcn, taken
conjunction
with
the
fixed
price of gold, reduced the profit¬
ability of *gola mining.
many
countries, difficulties in recruit¬
ing skilled labor have been an
important
retarding
factor.
In
order To
and
golu
encourage
produc¬
tion, several countries have sought
ways and means of givmg assist¬
ar¬
on
the
of
gold in
into U.. S.
May
25, 1949,
but by May 31, 1950 it had fallen
to
on
approximately $37.50, whereas
the price for gold dealt in directly
reduction
of
part, in free markets.
The devaluation of sterling and
other currenciej in Sep¬
certain
tember, 1949 brought abcura rise
in
t.e
official
price
terms
of
these
of
gold
mining
about
8
%
outside
of
the
world
price
gold
devaluation
of
gold
Congo ;it
been
of
summer
ception
price
downward
1949.
is
has
tations
A
the
the
notable
Bombay,
the
stable.
Paris
Quo¬
market
not follow the general trend
after
the
ex¬
wnere
remained
in
since
devaluations
■
did
until
of
the
autumn .of
1949, but by the end
May, 1950 the price of bar gold
was
the equivalent of ap¬
proximately $38.50 per fine ounce.
of
there
The
gold
decrease
in
was
the
price
of
it
44%. In the Belgian
14%, and
was
m
Canada
Aithough
deval.
will
not
time,
the
effects
of
some
improvement
position
of
the
in
gold
probably make possi¬
steady expansion,
allowance
far
apparent
great
profit
a
full
the output of gold
on
be
the
mines jwu\
ble
the
anon
is
made
even
for
when
increases
in
yvages
and
other
operating
costs, for higher taxes and mailer
subsidies, and for the tendency
to lower the average
grade of ore
milled.
Devaluation
has
a .so
ac¬
mining properties, and the Orange
Free State mines now
beiig de¬
veloped may be expected to come
black
the
current
de-
The Chinese demand for hoard¬
ounces
at
1946 to
about
yearly,
1948
three
million
disappeared
in
and, instead of being the
principal importing country far
private holding, China became a
net exporter of
several
go'd.
exists
gold
a
other
is
its
was
demand
Inasmuch
linked
income,
of
Middle East
traditional
hoarding.
demand
countries
the
with
amoint
into production in
Certain
was
1949,
such
where
large part due to several
affecting
ing, which from
for
in
greatest
was
celerated the development of new
and
mancf and supply of gold.
In
in
caused
markets
free
on
factors
in
to
rise
10%.
prices in nearly all gold markets
has
of
countries,
area
amounted
output
got.,
The
by
direct'on
South
in
U.S.S.R.
sterling
general
in
This
Africa and other devaluing coun¬
tries which together account for
various trading centers, reached a
high of $55 during May, 1949 and
The
gold
currencies.
greaJy improved the pruf.t posi¬
tion
official
1950.
of
'
the
quoted at $36.25 auring May,
pay¬
...u
subsidies, and the sale of
newly-mined gold, in whole or in
in U. S. dollars, for which irregu¬
lar
quotations
are
available
in
was
taxeo,
ment of
a
approximately $89
ounce
national
1949. It
has
in
compared
price
Kong converted
terms of dollars
April 30,
1948.
plies.
all gold
though
scale
The
outlined in the Annual Report for
ended
the estimated total
postwar
costs,
July, 1949. The Hong Kong mar¬
ket was active on a declining scale
until January, 1950, when the vol¬
ume of
trading became very small.
However, there has been a recent
the
year
Production
the Government in
ance
to
their
gold mm s.
The
Hong Kong sanctioned gold trad¬
methods employed have included
ing in bars less than .950 fine from
the F-r East and
Governors. Some of the
change
of
and
on
aoout
a
substantial
rangements,
there
form
The
re¬
cUons in April, 1949,
following
some
temporary
Board
arguments for and against
ban
a
in
mining
Markers
placing
gold
actual
tion is still only about 6o% of the
peak output of 1940.
involve
central
Free
and
lessen
Al.hou0a> output
steady incrc-aoe since
1945, the present annual produc¬
domestic
not
prospec¬
reached
million
serves.
economic justification for rec¬
ommending such a change to the
no
of
did
withdrawal from
any
Bank
to
to bring
per ounce,
has shown
Ruanda
or
the
currenc.es
approximately
$83o million, compared with $808
dentists, industrialists,
go dsmiths residing in Belgium,
or
of
production
output
fide
estimated
Board
studied the question whether there
should be a uniform
currencies.
$35
Congo and Ruanda ;Urundi gold
while buyers must be
intergovern¬
grants and
credits, any
change in the Fund's gold policy
there
earnings, depending
counting used by the individual banks, would be a reduction in the
provision for bad debt reserves. Many banks have reached the
maximum
was of the opinion
time when many coun¬
a
are
mental
larger.
be higher,
Gov¬
External
that, at
increases in the number of
current
recom¬
of
ecutive Board
invest¬
Nevertheless, operating results for the quarter should be favorable.
One
Board
national
increases in pay, this total will
provisions, in view of the
the
reaching its decision the Ex¬
tries
advantage.
there have been
a
that
on
In
operating expenses ape expected to show a moderate
Wages and salaries are an important element in operat¬
ing costs and
care¬
on May 3. It is reproduced
Appendix II.
in
Current
increase.
study
public
other
nongovernment
ments
instructed
Transactions in
Gold at Premium Prices was made
investments, while not particularly large
in relation to the total, will be substantially higher than was the
'case a year ago.
Many barks have been increasing their holdings
of
to
in
Belgian
trans
con¬
the resolution of the
Governor for South Africa should
not be adopted. The Fund's Re¬
As
Income from
Board
undesirable, and
mended
ernors
"
a
Board
and
that
to
the
of gold (ex¬
clusive of the U.S.S.R.) continued
•to increase during 1949. Valued at
was
change in policy
existing circumstances
under
There
quarter.
Executive
Executive
would be
increase for the
this resolution
the
to
concluded
has recently been some
tendency for interest rates to firm and this also should contribute
to
1949
limited
are
the
hoarding. The
Septemoer, 1949
of
Gold
to include the Belg an Congo and
Ru.nda
Urundi.
Sales
in
these
markets
Italy,
in
reaused
and
contributed
World
the
market
coun¬
or
confiaence
dishoarding.
which was established
June, 1949, had been extended
India
to
up
newly-mined
any
16,
gold
a^pi-fied by
improved eco¬
increased
or
de¬
gold
stability
hoardii.g
prac¬
governing
for
also
have
of
current
France
as
devaluations
Belgium,
bona
ful examination of the findings of
the
Staff, the Executive Board
These developments indicate that income from loans will show
i
-
such
cuirencies
tive
d;
was
increased
have
econ¬
the
the
supply
incentive
producers,
the Staff to prepare a draft
for its consideration. After
postwar high.
evaluate
leak¬
prices
goiu
in
local
effects of its gold policy.
Dur.ng the year under review,
Belgium notified the Fund that
comparatively large quantities of
gold have continued to flow into
the
the
to
in¬
x.ave
conditions in cemaui
tries,
of
aspects
changes
tical
Several
report
to
the
Board of Governors.
Subsequently
record, and the total loans at
banks
economic
on
have
developments relating
to
serous
arustic purposes.
eflect
nomic
various
pur¬
hand, the current
result of
a
mand and
con¬
gold in relation to the world
siderations
-increases in each of the past 15 weeks. For the week ended £ept. 13,
the weekly reporting member
and
guiu
cf go-id seems
capital transactions,
in order to keep abreast
current
bers in carrying out its gold pol¬
for the study of all relevant
increased
in
other
ana
such
production,
practices
the
The
ef¬
the support
Sept.
At New York City banks they have shown
their
cohti-iue
transactions, markets,
pneer,
sold to monetary authorities or to
the Fund at Lie official price. O.i
particularly noticeable since the
iriai
no
to gola, the Fund continues to ex¬
market at premium prices,
provided that the remainder be
in Korea.*
war
is
such transactions. During me idSt
three years the Fund has received
referred
"increased
there
regarding
countries,
in
been accompanied by an increased
demand for business loans. The need for working capital to finance
gold
making this policy effective.
collecting ci rrent infor-
of
they
permit members to sell
and prices have been moving sharply
that
Will
that
half
These developments have
■
aoliars
into the hoarding market of
onginaily destimu ior indus-
ages
considerations,
Besides
mat.on
On
cnange the Fund's exist¬
to
'
wages
of these
view
premium prices and recommended
Africa
upward.
gold-
many
producing countries.
in
18, 1947 the Fund ad¬
Governor for the
crisis, there have been additional and inten¬
sified demands made on the economy. Tne prospects of increasing
'military expenditures and the likelihood of shortages have caused
consumers and manufacturers to anticipate their needs.
Backlogs
have been rising, and with the need to assure adequate labor and
resources,
of
for
chases.
creased as
forts to.collaborate with the Fund
The
of
Since the Korean
material
terms
available
come
suppiy
have materially im¬
ing geld policy. It is expected that
The text of this
part of this business was financed through the
credit made it easy to sell the final product, and
that
of
Report, exchange
adjustments in a large part
of the
current
affects
At
credit.
easy
consumer
'
Inter¬
for
policy effective.
Government sponsored housing projects and
the high
level of activity contributed to the upsurge of business in related
and dependent industries,
use
:
in
pressed
be noted that, since the pub¬
may
private
outlook.
.
the
Fund
.ended
year
sulted
and business
•
of
Monetary
On June
business during
conditions
history.
Directors
ecutive
and pessi¬
aggressive inventory liquidation on a broad scale was the principal
contributing factor and accounted for the abnormal decline.
-
Report of the Ex¬
being liquidated, capital
reduced, unemployment rising
programs
Loans to
business
Annual
fiscal
mism about the economic outlook increasing.
;
chapter headed "Gold Policy"
the
plains the position of the institu¬
activity has been maintained at a very high level
during the past six months with the Federal Reserve Index for
July and August reaching over 200. This is the highest rate attained
1 in the postwar period. Moreover, it is in sharp contrast to the con¬
ditions existing a little over a year ago.
Business
At that time business
markets which precedea mem re¬
duced
the
national
income
ex¬
Sees gold output increasing because
consequently the part of that in¬
'
their
in response to the devalua¬
of
September, iu4o. These
devaluations and the aepreciation
of the currencies on free and black
of recent devaluations.
THs Week—Bank Stocks
Thursday, September 21, 1950
.
tions
ended April 30 reveals its objec¬
gold as well as payment of subsidies by
gold producing countries.
.
crease
Policy
In Annual Report for year
E. JOHNSON
By H.
.
as
the
in
bound to de¬
tries that,
coun¬
with
resorted to the
gold-mining
since t%e
few years.
after consultation
the Fund, had
of
a
gold-producing
subsidies,
devaluation
use
have
of
feptember, 1S49, either canceled their
subsidy payments oi1 dee ded to
reduce the scale of such
Australia
and
a
Southern
""'stance.
Rhodesia
have
c~r.celed their golu-mining
subsides, and Canada has ratified
the
Fund
program
curtailed.
that
has
its
been
grid
subsidy
substantially
Volume
172
Number 4944
.
.
.
The Commercial and Financial Chronicle
International Monetary
(1103)
23
24
(1104)
*>
»
The Commercial and Financial Chronicle
lock
TORONTO, Ont., Canada—The
Canada
By WILLIAM J. McKAY ■
logical
decisions
momentous
of
the
anticipation
conferees
the
on
at
the
of
part
Interna-
the
for
position of sterling
S.
dollar, that
of the changed
the
vis-a-vis
Canada,
meeting
of
would defer any
National
Executive
tional
Monetary Fund annual
meeting, the actual outcome was
distinctly anti-climactic.
In the
Australia, and Pakistan
contemplated in¬
dependent action.
For example,
the
the subject of inflation and the
on
inevitable,
bored
deferred.
produce
the
long
the
Pakistan
a
terialize
as
failed to
rupee
intended
arbiter
in
behind
made
accepted
of
exchange.
reference
not
or
ma¬
body which
the
be
to
matters
Whether
of
result of the delib¬
a
erations of the world
was
Even
mouse.
devaluation
overdue
closed
doors
was
to
the
Australian pound,
advanced
been
for
immediate
of
there
to be little reason
delay in restoring the
dollar1 to its original
appears
for further
Canadian
the matter
undervalued
present
the
British
Common¬
wealth currencies, the obvious op¬
portunity to take appropriate
tion
permitted to
was
this
For
a
customary official
a logical ex¬
planation. Curiously enough, fol¬
lowing the Fund meeting, the
denials there must be
Britisn
Commonwealth
members
reassembled in London for
nadian
U.
con¬
a
dollar
relation
in
the
to
S. dollar,
the following points
clearly emerge:
will
(1)
When
valued
last
the
pound
was
represented
accurately
value
ference that has received very
ditions
i t
con¬
now.
lit¬
publicity. A gathering of this
kind, however, lends itself ad¬
mirably for constructive discus¬
sion
of
matters
interest
urgent
Kingdom
The
of
the
to
the
and
International
other
hand,
and
common
United
Dominions.
Fund
it
as
does countries with diverse inter¬
ests,
of
some
doubtedly
the
which
conflict
British
would
with
(2) The extent of the devalua¬
tion
in the
and
un¬
those
Commonwealth,
of
is
a
tainment of British objectives. As
background
for
the
sterling compelled action
possibly also
London
the Canadian
(4) The U. S. rearmament pro¬
has created a growing de¬
From the Brit¬
adjustment shouM not
counter
to
the
Commonwealth
interests
as
Con¬
certed, instead of independent
tion
in
this
field
also
designed to promote
dislocate
-the
vital
ac¬
could
rather
be
than
sterling-area
trade relationships.
•sit
is
logical that
forthcoming
(5) The raising of the value of
sterling and the Canadian dollar
would offset the increased
essential
try
U.
as
S.
result
of
the
Imperial
view
of
a
conference
mounting
constitute
effective
an
against the
that
pressures
economic
now
of the United
Kingdom and the Dominions.
to
that
conceive
reached
it is
the
difficult
conclusions
during the British Com¬
discussions
will
not
During the week there was a
steady demand for external bonds
with
activity
than
usual.
Dominions
ent
Municipal
larger
a
in
scale
internal
more
despite denials of
currency
still well
Corporation
on
Interest
was even
an
persist¬
imminent
change. Free funds
bid at the
momentary
their upward
trials
continued
and the
notably
sues,
also
4-2400
NY
1-1045
weak
Boston 0, Mass.
indus¬
the
ad¬
Toronto
registered
Interlisted
C.P.R.,
Aluminium
were
Western
will
Pacific
&
Co.
Ltd., all
M.
Co.
&
Ltd.; S. B. G. Denton, Cochran,
Murray & Co. Ltd.; A. L. Howard, Anderson
& Co.;
H. L. Johnston, J. L. Graham &
Co.;
D. C. H. Stanley,
Ltd., all of Toronto.
on
D.
Young
&
St.
London
Association
in
Co.
&
&
Co.
Co.
S.
Corp.
Municipal
Deans
Ltd.;
S.)
(N.
Gpo.
H.
and
J.
James
F.
Ltd., Halifax;
A.
&
Co.
Business
D.
George
P.
J.
R.
S.
Brennan
To¬
Bankers Bond
Cochran, Mur¬
Christie, R. A. Daly
Simpson
(rep.
Toronto
Midland
Bell
(Jr.
Securities
IDAC),
Bell,
all of Toronto.
T.
E.
A.
Ames
Co.
&
Ltd.;
Wood, Gundy & Co. Ltd.;
Dominion Securities Corp.
Thorburn,
Mills, Spence &
Co.
Co.;
Co.
Corp.
London
W.
Ltd.;
R.
R.
Monk,
McGee,
&
Petroleum,
especially promi¬
Smelters
were
and
of
the
and Paymaster
base
T.
&
the
sharply.
ment
J.
Co.
N.
F.
&
Co.
&
Ltd.,
Char¬
to
learn
The
will
Hughes
&
H.
James
Rich¬
The
MacKeen
D.
A
S.
E.
A.
H.
&
Sons,
Calgary;
Sources
James
K.
C.
R.
Tanner
Ltd.,
Co.
V.
J.
Sorsoleil,
The
Nesbitt,
Driscoll
bien
&
Co.
Dudley
E.
(Jr.
Securities Corp. Ltd.,
Business
G. Beau-
Dawson,
McNeil,
McNeil,
IDAC),
Dudley
Mantha
Dominion
W.
T.
Effects
ties Corp.
Co. Inc.;
Co.
Ltd.; E. D. B. Kippen, Kippen &
Ltd.,
all
of
E.
Blair (Chairman), James Richard¬
Sons; J. L. Duncan, Wood, Gundy &
S.
&
son
(Chairman),
Garneau,
Boulanger Limitee; Henri Clement, Clement,
Guimont Inc.; Lt. Col. Jean Gendron, J. T.
Cle¬
S.
Backus
Weir
(Chairman),
Co.
Ltd.;
Bros.>& Denton Ltd.;
S. B.
&
R,
<S?.Co. Ltd.,
all
&
Co.
McLeod,
K.
Heath, Walwyn,
of rToronto.
Conduct:
H.
Dingle (Chairman), Wood, Gundy
Ltd., Vancouver; J. D. Hagar, Hagar
Ltd., Victoria.
Investments
Public Relations and Education:
G.
Sherwood
D.
and
Burns
Ltd.;
all of
C.
D.
Miller
(Chairman),
P.
A.
Wootten,
McMalion
Western
rities Corp.
Gilmore.
Vancouver.
Dominion
residents
of
this
area:
&
Co.; E. F. Hutton & Co.; Hill,
Co.; John M. Barbour
Co.; Jones, Cosgrove & Co.;
C. Harry Laufman Co.; Lester &
Co.; Leo G. MacLaughlin Sec. Co.;
Merrill
minion
Kee,
Lynch,
Pierce.
Fenner
&
Beane; George R. Miller & Co.;
Paine, Webber, Jackson & Curtis;
Pasadena Corporation: Milton C.
Powell
Co.;
Quincy
Redfield
&
Cass
Co.;
Asso¬
William
R.
McDeimid
&
(Chairman), McDermid,
Ltd; I. D. Main, Do¬
McDermid
Securities
Victoria
r
Corp.
Securities
Ltd.;
Ltd.,
Staats
Co.;
Wagenseller
&
Durst; Walston, Hoffman & Good¬
James
Mac-
win; First California Co.; Shear-
all
Van¬
son,
of
Hammill & Co.
Secu¬
Ltd.; N. H. Gunn, Bell, Gouin¬
Inquiries
I
Provincial
(Chairman), A. E. Ames
Ltd; D'Arcy Dingle, Wood, Gundy &
D.
to
couver^
Pi Spragge
J.
course
Bateman, Eichler & Co.: Bingham,
Walter & Hurry; Crowell, Weedon
& Co.; Dean Witter & Co.: Denton
ciates;
Relations and- Education:
Ltd.;
dena
&
.
W.
Pri¬
the following
cooperating with Pasa¬
City Schools are offering this
Business
Taxation:
Wright,
Mills, Spence & Go. Ltd.; E. S. Miles, Burns
•Fisher
on
Richards &
Ltd.,
DISTRICT
Provincial Government Legislation:
H.
Government
representing
po., Ltd., both of Vancouver.
& Co.
Garneau
ONTARIO
of
institutions
Montreal.
Group:
Gendron, Inc.; Joseph-Albert Gagnon,
ment, Guimont, Inc., all of Quebec.
Bank
Common Investment "Pitfall"
Brown
Gundy & Co. Ltd., all of Vancouver.
H.
J.
City
and
Members of the Pasadena Bond
Membership:
(Chairman), Royal Securi¬
Rodolphe Casgrain, Casgrain &
Cie, Limitee; R. T. Tait (Jr. IDAC), Mead
Quebec
Rela¬
General Review
all of Montreal.
Conduct:
Goidon
Stocks
Its
Timing
vate Investment
Edmonton.
(Chairman), Odium Brown
Investments Ltd.; A. G. Osburn, Pemberton
& Son Vancouver Ltd.; John J. West, Good,
K.
S.
Cycle:
Forecasting and Analysis
Club
Mackenzie
Plan¬
Stocks
DISTRICT
Municipal Affairs:
Ltd.;
Ltd.;
P.
Se¬
on
Portfolio
to Investment
Insurance
Ltd., Edmon¬
(Vice-Chairman), Tanner
H ;.jf'
Ltd.,
Business
tion
Edmonton.
Tanner & Co.
man),
Information
Investment Trusts
(Chairman), Tanner & Co.
ton; C. McDonald
&
and
ning
Sutherland &
Sydie,
Listed
curities
Langfeldt
Diversification:
Calgary;
Ltd.,
of
Rich¬
Thomson & Co. Ltd., Calgary; J. E. Sydie,
;
Markets:
all
Affairs:
(Chairman), L.
Balance
Profit and Loss State¬
Big Business
(Chairman),
(Vice-Chairman), W. C. Pitfield & Co. Ltd.,
•■ni l
Inc.,
Preferred
Unlisted
Edmonton.
Turney
ardson
.....
Delahay
Co.,
Bonds,
Functions of the Stock Exchange
New vs. Old Industry: Small vs.
Conduct:
PACIFIC
Beaubien
of
Corporation's
Security
(Chairman), Toole, Peet
Calgary;
J.
E.
Sydie
Sydie,
Sutherland
&
Ltd.,
Ltd.,
Montreal.
Municipal
the
Underwriter,
Counselor, Invest¬
Dealer, and Broker
Sheet:
'Ij-fydL
&
the
op¬
Stocks, Common stocks
Edmonton.
Hrr.
Limitee;
the importance
on
Corporation's Financial
The
...
Greenshields
stocks
practical stand¬
Investment and Speculation De¬
fined
Edmonton.
Finance:
Robitaille & Cie.,
a
in
Investment
ment
(Chairman),
Sons,
Business
Gundy
Nesbitt
IDAC),
the fun¬
investing
placed
Functions
Legislation:
'
iJr.
understand
of
following subjects will be
and particular emphasis
be
Carlile & McCarthy Ltd., Edmonton.
Driscoll
Wood,
,'T
of
and
History of Invest¬
ment, Significance
-MJiodT
'Speakers Panel:
r, :'U j"| i •..
(Chairman), vjNesbitt,
C. R. Tanner (Chairman), Tanner & Co.
Thomson & Co. Ltd.;
P. R. Payii, W. C.
Pitfield & Co. Ltd.;
fLtd., Calgary; C. McDonald '(Vice-Chair¬
Henri Robitaille, Lajoie,
Bond
posed to speculation:
Ross
D.
Pasadena
covered,
(Chairman), Wood, Gundy
(Vice-Chairman),
Ltd., all of Montreal.
A.
the
bonds from
DISTRICT
Government
Investments
Ltd., all of Montreal.
Corporation
sponsoring
J.
Gillette,
Robert
of
re¬
con¬
market."
Taxation:
Co.
In
to
schemes of "how to beat the stock
G.
Public Relations and Education:
Securities
(Chairman), Collier, Norris &
Quinlan
Ltd.;
Roger
Belanger, Belanger,
Inc.;
J.
P.
Guite,
Credit Interprovincial
Limitee; W. H. Price, Mills, Spence & Co.
Ltd.; Jacques Adam (Jr. IDAC), Gairdner
&
invest¬
qualified
course.
damentals
Public Relations:
G. A.
20
over
the
ments
Co. Ltd.; Henry F. Seymour, Greenshields
Co. Inc.; John Porter (Jr.,
IDAC), A. E.
Ames
in
Club, points out that the Club is
offering the public an opportunity
Turner
man),
Corp. Ltd.; G. W. M. Webb, Bell, Gouinlock
&
the
course,
President
(Chairman), W. C. Pitfield &
Co. Ltd., Calgary; A. K. Snell (Vice-Chair-
(Chairman), Eastern Secu¬
(Chairman),
well
as
Structure:
Saint John.
Cole
With
business, Mr. Coleman is
garded
Ltd., Edmonton.
ardson
Ltd.,-Halifax; H. D. Macgillivray,
Macgillivray Ltd., St. John's; J. R.
N.
Co.
experience
years'
Municipal Administration and Finance:
QUEBEC DISTRICT
metal
among
Pasadena
&
will
course
C. Coleman,
Office, Hill,
selecting securities from
standpoint of investment as
Morgan
Education:
Co.
advanced
Manager,
Richards
Woodstock.
Corp.
the
Introduction:
the star
-
Day Division, the
Ltd., all of Ottawa.
ALBERTA
Co.
Eastern
of
members
dena Board of Education, Extend¬
White, G. E.
R.
Ltd.,
by
L.
(Chairman), Jennings, Petrie
Co. Ltd., London.
Securities
(Chairman), Nesbitt,
Ltd., Saint John; Ralph
Royal Securities
lottetown; F. C. Fisher,
the
Gam¬
Petrie
L.
R.
Paton,
to
D.
District:
H.
Hamtn
Colwell
7:00
consecutive
is free
course
Sponsored
Taxation:
M.
The
17
Pasadena Bond Club and the Pasa¬
Entertainment:
R.
for
eacn
of
Ltd., Char¬
lottetown; J. D. Wood, J. C. Mackintosh &
Co. Ltd., Halifax; J. Douglas Winslow, Win-
Cornell,
held
from
be
thereafter
p.m.
weeks.
in
made
public.
and
(Chairman),
and
&
will
course
9:00
be
may
Wednesday evening,
point rather than any crystal-ball
Gamble
Froats
200-C
the
and
duct
all of Toronto.
Provincial
Securities
A.
curities
Royal
W.
Room
the
Steers, R. D.
Co.; G. H. Taylor, Wood, Gundy
& Co. Ltd.; B. E. Dabson, Nesbitt, Thom¬
son & Co. Ltd.; D. W. McKeen, Royal Se¬
Royal
Bond Club.
Registration
Steers and
Royai
&
H.
Beaubien
Education:
slow & Winslow Ltd.,
of
District:
D.
ble,
Paton,
Organ,
Parker,
Ottawa
Stan-
James Organ,
Organ,
Co.
Eastern
all
(Chairman), Matthews & Co.;
Funston,
W.
Co. Ltd.,
Ltd., Halifax.
&
Jones,
Ltd.,
H.
G.
Anderson,
E.
p.m.
Education Committee of the Pasa¬
E.
(Jr.
Cassels, Cochran, Murray & Co. Ltd.;
O.
W.
Conduct:
Thomson
A.
Dominion
Pooler
R.
Exchange Liaison:
J.
R.
(Chairman), East¬
ern Seecurities Co.
Ltd., Saint John; E. M.
Bagnall, F. J. Brennan & Co. Ltd., Char¬
Leslie
Vance,
Jolly,
E.
Assn.),
MacMurray
James
T.
E.
Newman,
B.
Ltd.;
Corp. Ltd., St. John's.
Relations and
Mills,
Wood,
(Chairman),
Ltd.; J.
Traders
Finance:
iChairman),
Saint John;
Halifax;
Morrison,
S.)
Public
Ramsay
Ltd.,
Ltd.,
Wood,
Head,
O'Brian,
Co.
Norman
D. K.
7:00
at
be conducted by Ted
M. F.
& Co.
P.
Ltd., Saint John; H. D. Mac¬
W.
W.
C.
Ltd.;
Bond
(Chairman), Wood, Gundy
Halifax; F. C. Fisher, Eastern
Co.
W.
B.
DISTRICT
Administration
George
Ltd.;
Gouinlock & Co. Ltd.,
gillivray,
Cornell,
Macgillivray
Ltd.,
St.
John's; E. M. Bagnall, F. J. Brennan &
Co. Ltd., Charlottetown.
bury &
(Chairman),
Ltd.;
announces
College
City
Wednesday, it was announced by
Harry W. Hurry, Chairman of the
ed
Corp. Ltd.;
Government Legislation:
Ltd.,
dena
Wednesday
Conduct:
C.
M.
present
tor, will be presented at the Pasa¬
Se¬
Toronto.
C.
Fairclough &
Business
the
course,
the funda¬
securities, and to pro¬
vide a practical approach to the
problems of investment from the
standpoint of the average inves¬
i
Griffin
Securities Co.
of
R.
Ltd.;
Coip.
F. D. Lace
H.
Ltd.;
Co.
&
Stock
Provincial
Dominion
ronto.
Sub-Committees:
MARITIME
all
Ltd.;
Co.
&
Ames
membership of the following
District
&
H. E. Cochran, Cochran,
Ltd.;
L.
G.
Mills, Mills,
John, N.
later
also
(Chairman),
McLelland
Gundy
the
to
Gundy
investment
an
to
mentals of
to
J.
W.
accom¬
visit
a
Wood,
time
designed
dena
Murray
16
PASADENA, Calif.—For the
sixth
Legislation:
Co.
The
the
Public
group
Ltd.;
Taxation:
year.
Young,
were
International Nickel
golds
H.
Gundy
be
Provinces:
and
following their recent
Consolidated
performers
Denton
City Co. Ltd.; H. R. Whittall, Ross Whittall
spell;
tral Leduc
&
Hunter (Chairman),
Fairclough &
Ltd.; A. C. Cochrane, Bankers Bond
Corp., Ltd.; J. I. Crookston, Nesbitt, Thom¬
C.,
B.
a
is¬
Milner, Ross & Co.;
Stewart, A. E. Ames
ray
&
index
Rose,
Toronto.
Spence & Co. Ltd.,
7;
B., Oct. 30; Halifax, N. S., Nov. 2,
He will visit Quebec City, Ottawa,
Calgary and Edmonton, and Cen¬
nent.
Fifty Congreas Street
lead
to
particularly strong.
oils rallied
New York 5, N. Y.
The
Ltd., and Brazilian Traction
INCORPORATED
WORTH
course.
16-year high.
new
Two Wall Street
pause resumed
of
IDAC),
A.
a
vance
A. E. Ames & Co.
to
Winnipeg, Oct.
Education,
Dawson
after
W.
Municipal Administration and Finance:
of
Inc.;
porate-arbitrage rate showed little
change at 101/2%-91/2%.
Stocks
CANADIAN STOCKS
14;
5
Victoria,
Kilburn
Maritime
eries narrowed slightly.
cor¬
M.
Securities
but the premium on future deliv¬
The
E. R. Pope,
J.
Spence
Mr.
were
official level
Coffey, Burns Bros.
panied by H. L. Gassard, Director
the
menace
'n the direction of upward revalu¬
ation of several British currencies.
Provincial
and
to
counter-
inflationary
stability
monwealth
Government
10
Calgary,
Oct.
(6) Currency revaluation would
ultimately lead to concerted action
CANADIAN BONDS
3;
Edmonton,
Investment Course
McLeod,
G.
curities Corp. Ltd.;
follows:
18.
to
Co.
measure
J.
N.
rities Co.
coun¬
price-level.
For these reasons
in
Oct.
as
Oct.
Sask.,
4;
Vancouver
cost of
imports from this
a
members
Regina,
Oct.
Commonwealth
their marketing
no
longer dependent on the
availability of cheap sterling.
the
of
whole.
a
run
British
resources:
for
mand
a
ish angle it would be highly de¬
sirable that any individual cur¬
the
Corp. Ltd., St. John's;
gram
cial representatives, there is little
change of the parities of various
Empire currencies figured to a
visit
lottetown;
areas.
P.
Federal
now
assured what appear to be perma¬
nent
markets
in
hard-currency
trading
Committee,
A., and J. A. Kingsmiil, To¬
ronto,
Secretary-Treasurer,
will
James
is
doubt that the recent pressure for
dollar has
Executive
D.
Securities
The cheapening of sterling
(3)
and
natural
rency
the Australian
Co.;
I.
(N.
meeting of Commonwealth finan¬
prominent degree.
of the Canadian dollar
case
pound.
less desirable medium for the at¬
a
of
the
on
comprising
less in its favor than
were
&
son
de¬
true
s
at that time when
even
Dinnick,
Ltd.;
Co.
de¬
was
September it
liberately placed at an under¬
valued level; $3.00 to $3.20 more
tle
"
Commonwealth
early
There is little doubt that in any
the
and
due for considera¬
was
an
discussion of sterling and the Ca¬
cently provoked universal atten¬
tion
at
conference.
ac¬
pass.
strange reticence with
subject that has re¬
regard to
tion
known that
were
S.
Co.
& Co. Ltd.; J. H. Christie,
Daly Co. Ltd.; W. H. Watson, Ander¬
A.
Co.
Similarly
J.
&
son
the
of
Committee
Ltd.;
Weir
Kilburn,
Greenshields
&
Co., • Montreal, President of the
cabi¬
a
postponement
action.
from
of
despite
the
majority in favor of revalua¬
tion, unconvincing reasons have
parity, unless it
their
of
case
net
pertinent question of revaluation
levels
the
members
Peter
although obviously
has been surprisingly
in
R.
Fort
National
rupee,
Also
the
Co.
Goulding, Rose
annual
Garry Hotel, Winnipeg.
Following the meeting of the
adjustment of the parity of the
rupee in relation to the
Indian
1951
at
the
Pakistan
fate of the quite unifmportant Aus¬
trian schilling, the mountain la¬
to
its
Announced for Oct. 2, 1950 is a
U.
shape of indeterminate discussion
.
hold
meeting from June 11 to June 14,
inclusive,
at
the
Jasper
Park
Lodge, Alberta.
of general study
purpose
will
&
Young,
Investment Dealers Association of
Despite
Pasadena Bond Club
I.D.A. of Canada 1951 Convention
Canadian Securities
1950
Thursday, September 21,
...
Legislation:
,;JR. H. Edgell
(Chairman), Yorkshire Se¬
K. S. Patton, James Richard¬
curities Ltd.;
son
& Sons;
rities
Ltd.,
James Munro, Yorkshire Secu¬
all
of
\
Victoria.
may
ry,
regarding the course
be directed to Harry W. Hur¬
Bingham,
Pasadena,
Walter
&
Hurry,
to Robert J. Gillette,
Crowell, Weedon & Co., Pasadena.
or
I
.Volume 172 "Number 4944
...
The Commercial and Financial Chronicle
(1105)
Wright graduated from the Uni¬
quarters
versity
47 Newark Street.
of
Georgia
Harvard
News About Banks
where
CONSOLIDATIONS
NEW
OFFICERS, ETC.
Bankers
and
REVISED
School
in
Review.
the
with
1920
Franklin,
CAPITALIZATIONS
firm
of
in
dent and
Director of W.
Stewart
organizations,
the
the
them
Corp. and
among
Grace
Marine
Midland
Co., has been elected a trustee
the Emigrant Industrial Sav¬
ings Bank of
Central
Savings
on
New
patrick began with Manufacturers
R.
&
of
York,
it
its
board
Executive
of
Trust Co. in 1933.
by
Assistant
T.
Madden,
and
ing the Second
Kilpatrick was
the
o
f
o
100-year-
1 d
institu¬
has
fill
he served
to
the
the
from
death
of
the
of
dition
also
his
Joseph P. Grace, Jr.
of
director
of
a
as
the
Grace
the
City
Bank,
Ingersoll
Rand Co., Northern Insurance
Co.,
Assurance
Company of America,
Stone &
Webster, Inc., Atlantic
Mutual Insurance Co., Centennial
Insurance Co., Grace
Line, Eaonomic Club, and Commerce and
Industry Assn. He is a trustee of
Inter-American
and
*
of
*
Announcement
Sept.
Council
Production.
*
various
on
changes among the of¬
following
the
death
of
Harvey D. Gibson on
ficers
President
Sept. 11,
item regarding which
in our Sept. 14 issue,
an
appeared
1010.
page
Henry
C.
Chairman
Trust
Elm,
the
formerly
Board
of
Company, has been
Officer
Chief
and
to
Horace
succeed
C.
the
named
Executive
Mr.
Gibson;
formerly
Flanigan,
Vice-Chairman of the Board, has
been
named
Chairman
of
the
Board; Ernest Stauffen, Chairman
of the Trust
named
Committee, has been
Chairman
Committee,
patrick,
of
and
the
Finance
Harry
C. KilVice-President
formerly
and Assistant to the
and
President, be¬
Vice-President
Executive
comes
director.
a
Mr. Von
President
Elm, the newly elected
Chief
and
with
1903
Executive
the
career
Manufacturers
National Bank, which in
part of what is
came
ab¬
&
ing
in
it
Kil¬
Mr.
of
of
of
Trust
Bankers
New
York,
Sept.
on
14, approved the
merger
Lawyers
with
of /that
Trust
Company of New York, by
2,377,072
1,538
to
vote
a
special
Wall Street.
at
meeting
a
held at 16
The merger became effective with
the
opening of business
day,
Sept.
18,
Mon¬
on
when
the
four
offices of Lawyers Trust Company
began
operating
Bankers
ficers
Trust
branches
as
Company.
of
will
become
Vice-President
York
Brady,
director
a
and
in
charge of New
business.
James
C.
City
President of Brady Se¬
Realty
Corporation,
curity
and
Howard
S.
Cullman
of
Cull¬
Brothers, Inc., both directors
man
of
1914 be¬
Manu¬
now
a
Trust
*
The
project,
since
1925.
From
while
Mr.
Gibson
American
sioner
Lawyers
Co.,
Trust
Bankers Trust.
will
will
also
The appointments
effective
become
after
ap¬
proval of the merger by the State
Superintendent
of
Banks.
The Lawyers Trust
been
located
offices have
111
at
Broadway;
Empire State Building, Fifth Ave¬
as
Europe,
Chief
of the Bank.
at 34th Street; 14th Street and
Eighth Avenue, all in Manhattan,
and 203 Montague Street, Brook¬
lyn.
These offices will supple¬
and
ber of
Mr.
of
as
October
a
1931.
chase
March
He
named
was
the
of
University,
of
various
Stauffen
Gibson
member
the
far
which
as
Manufacturers
has
been
director
Trust
I
director
Bank
and
Co.
since
1939.
of
a
as
joined
in
Chairman
since
with
Vice-President
1917,
Committee
Trust
a
a
he
di¬
a
corporations.
Liberty National
back
Cor¬
of
associated
was
as
in
Board
a
from
in
1932.
of
the
1934
and
He
site
the
well
as
made
branch
of
this
Henry
by
Details
man.
residential
some
as
the
and
units.
move
was
Bruere,
Chair¬
location
of
of
accompanying
the
facil¬
ities,
and other special facts are
as yet available, being subject
not
to
approval of the
by the State
banking
Banking De¬
new
office
A
is
*
windows
of
Colonial
Rockefeller
Avenue
at
4«th
exhibition
on
the
of
in
Street,
in
Office
to
joint
a
Accord¬
announcement
President
Kenna,
of
by
the
former
companies, and Arthur S.
Kleeman, President of the bank¬
ing house, the exhibit is intended
to dramatize graphically both the
firearms
of
evolution
in
this
and various steps in
country
the
present-day manufacture of sport¬
ing
*
elected
Nelson
of
trustee
a
Savings
Bank
has
the
Union
bank;
of
the
present
Bankers
Aug.
issues
our
also
and
erence
of
17,
641, ref¬
the acquisi¬
to
tion
the
banking
Guarantee
At
the
Board
of
City
held
the
death
as
a
19,
elected
been
is
a
V
Na¬
York
Boykin
C.
director to
a
created by the
Guy Fairfax Cary, who
Aug. 27, after serving
member
of
the
than 30 years.
of
member
Shearman
&
associated
since
for
Board
Mr. Cary
Sterling
was
firm
law
the
of
Wright,
with which Mr. Wright has been
has
member
City
Bank
&
The
1945.
been
Com¬
City
His
trust
the
National
affiliate, since
1942.
at
the
end
of
the
World War found him
General.
served
In
Major
in
ceived
decorations
After
the
Wright
the
in
was
Conference
in
as
1918,
Paris
American
Secretary
of
Economic
Council
and
to
.in
*
he
Mr.
*
Thomaston,
Conn.,
was
voluntary liquidation
Bank
placed
Aug.
on
Trust
Co.
Thomaston
The
which had
1919.
Mr.
the
of Waterbury,
Bank,
capital of $50,000, is
a
operated as a branch of the
Waterbury institution.
now
*
of
Board
Bank
of
of
Chairman
City,
N.
J.,
of
graduated from the University of
Pennsylvania in 1926.
*
Consumer
Credit Department, and the broad¬
ening
of
Loans
to
up
its
scope
Small
to
Business.
include
Loans
to $5,000 are contemplated and
terms
new
where
First
stated
24 months will be
warranted.
"This
to
up
granted
Mr.
National
Graham,
the
The
*
financing
ex¬
tailored
to
meet
their
John G. Hewitt, manager
Credit
Depart¬
ment, will exercise general super¬
vision of the operations of
the
Loans
to
Small
Business
sistant
directly
Credit
in
Manager,
Section.
charge
with
will
in
in
Mr.
1927, and
1938.
elected
As¬
be
head¬
Last
Vice-Presi¬
he
year
director
a
of
the
McDonald, entered the
ice
of
the
First
National
was
bank.
serv¬
in
1940
as
General Counsel after 11 years
in
the
Minneapolis law firm
known
now
Dorsey, Colman, Barker,
as
Scott
&
later he
Barber.
consolidation
of
by
approved
was
directors
of
both
the
institutions
on
Sept. 13. The merger, it is stated,
involves
$375,000,000.
Associated
Press advices from Indianapolis,
referring to the plans, said: "The
banks
two
few
A
months
made Vice-President
was
1946
he
has
served
Vice-President.
May, 1949 he has been
director
a
of First National Bank. Mr.
is
President
and
a
as
Since
Quay-
director
a
of
First
Bloomington Lake National
Bank, a Minneapolis affiliate of
First
National
and
the
of
one
*
proposed
Ind.
olis,
have
been
affiliated
Group. He is
a
director of First Service Corpora¬
tion,
operating
Bank
affiliate
Stock
of
First
with
First National Bank
which
Corporation
is af¬
filiated.
He
is
member
a
and
former President of the Minneap¬
olis Association of Credit
Men,
and
member of the Association
a
of Reserve
City Bankers. Mr. Mc¬
Donald is President and
since 1893, when
of First Edina State
23d President of the United States;
John H. Holiday, founder of the
director
a
Banks.
Union Trust was
organized by Benjamin Harrison,
the
under
charter
the
of
of
member
James WhitHoosier poet, and
The consolidated institution will
operate
affiliate
News;
Riley,
others."
and
name
Indiana
bank will be those
now
the
13
bank's
board;
the Union Trust
National
composing
directors of
First
of
*
VJ,
The
meeting of the
institutions
19 to vote
increased
$200,000
to
is also subject to the
the
$300,Q00
approval of
the
ment.
State
Russell
of
dent
Banking
L.
the
Depart¬
White
is
Indiana
Presi¬
National,
M. Brown is Presi¬
*
First
W.
*
the
succeed
the
of
Fed¬
eral Reserve Bank of Minneapolis
at
meeting
a
rectors
of
the
Sept. 15.
on
bank's
di¬
J. N. Peyton,
President of the Reserve Bank has
Mr.
announced.
Mills,
formerly
Vice-President and Cashier of the
Bank, succeeds Oliver
who
Bank
to
Board
become
of
S.
Powell,
resigned
recently
Vice-President of the
a
as
First
Minneapolis
member
Governors
the
of
of the
Fed¬
System in Washing¬
ton, D. C. Prior to coming to the
Federal
Reserve
Mr.
Mills
the
Pioneer
had
Duluth. He
was
in
Bank
1933,
Cashier
been
National
*
Bank
of
Washington
named
Seattle
af
Manager
Branch ,to
Cook
A.
who
is
being transferred to the Main Of¬
,
fice of that bank, Joshua Green
Jr., President, announced on Sept..
17. Since 1935, Mr. Cook has suc¬
cessfully managed the branch of¬
fice. Mr. Laughlin came to Seattle
from Miles
City, Mont., where he
had been associated with the First
National
named
was
Vice-President
*
Ross
Bank,
*
Mills
from
stock/
a
John C. Laughlin, Jr., Assistant
Vice-President of the Peoples Na¬
father
Albert
by
dividend of $100,000.
North
Oct.
Comptroller of the Currency
and
of Aug. 31
as
of
both
American
National Bank of Amarillo, Texas,
was
has been
on
a
of
*
the
Bank
the proposal, which
on
*
Seattle
of
and
Group
of
capital
tional
held
be
First
A special
directors
will
Bank, another
National
the
members
are now
of the board of the bank.
of
which
his
Cashier.
Graduating
University of Washing¬
in 1935 Mr. Laughlin became
from
ton
was
the
associated
Bank
with
Peoples
National.
messenger and was trans¬
as
ferred to the West Seattle branch
in
1936, back to the Main Off ice-
in
1942
been
as
serving
an
in
the
work
Institute
of
President
as
Chapter in
instructor
Fundamentals
in
the
of
Banking,
of
the
1947-1948 and
A.I.B.
of
of
of
and
Loan Officer. He has
a
active
American
Seattle
Cashier
Officer, and in 1945 was
to
the
First
Avenue
assigned
Branch
Assistant
as
Personnel
classes
in
Banking.
R. G. Roberts & Go.
also formerly as¬
sociated with the Minnesota State
Open in New York
Banking department, St. Paul. He
Assistant
made
was
Auditor
of
Richard
the Reserve Bank in 1938, Auditor
1941, Cashier and Secretary in
and
1942,
Vice-President
and
32
H.
President
of
Quay
ing
was
Sept.
colm
McDonald
B.
was
Aged
years
of Execu¬
Clermont
uel E.
and a veteran of 33
service with First Na¬
Mr.
Quay is the. tenth
55
President
in, the history .of the
old. bapk., He, succeeds
Henry E. Atwood, President from
86-year
1945 until his death from
attack
on
appeared
issue, page 822.
at
iP our Aug.
The
new
offices
at
Cartwright and Sam¬
Magid, Chairman and Presi¬
of the
Inc.,
invest¬
banking firm of Hill, Thomp¬
&
Co., Inc.,
were
elected di¬
rectors of Allied Electric
at
the
annual
Products,
meeting
of
stockholders.
heart
graduation from high
Wayzata,
Minn., Mr.
Soon after
school
son
George Shaskan
Aug. 27, pri'item regard¬
ing which
31
a
maintain
dent, respectively,
ment
of
tional,
will
named to
Vice-President.
Robert.
the forma¬
Cartwright, Magid, Directors
the
the newly created post
tive
Bank
at a special meet¬
bank's directors on
11. At the same time Mal¬
of
and
Broadway, New York City.
elected
First National
of Minneapolis
Roberts
announce
tion of R. C. Roberts & Co. to deal
firm
Arthur
C.
Krulisch
R.
in investment securities.
Cashier in 1947.
is,"
"designed to
County
Consumer
department, Assistant
Cashier
dent
service
give small businessmen of Greater
pressly
credit
banks of the First
the
bank's
ing to the bank in 1919, he became
successively
Manager
of
the
General
has
expansion
the
the
of
National
in'
Artillery. Return¬
Since
Stetson
Building
&
Loan
Association;
the Maliory Hat Company; John
B.
Steison
Company
(Canada)
Limited, etc.
Mr. Harshaw was
in
First
The
Jersey
announced
staff
*
Graham,
Kelley
the
*
two
service
and General Counsel of the bank-
John
.
National
became; Theodore J. LeRoy, formerly
Supreme
has
years.
o
*
Thomaston
Conn.
re-, of
wars.
attached to the Peace
in
tilSbtr.
The
needs."
He
35
151st Field
I
Drummond,
Yorx;
eral Reserve
*
later
both
for
York.
of New
Hudson
Infantry.
Man¬
He
past President of the Rotary
BrigadierWar
I, he
and
Armistice
army
Second
a
World
Captain
as
of
Trust
pany,
career
new
director
a
Farmers
Inc., with which
associated
Club
vacancy
on
a
the
of
New
Sales
is
18, having been absorbed by
The
of
of
Nelson
ager,
Colonial
Sept.
of
died
Co.
meeting
Bank
was
the
*
Directors
on
Wright
*
regular
tional
of
Trust
&
*
fill
division
Wendel, President of the
Mr.
Diebold,
page
made
was
by
our
24, page 726.
In
Aug. 3, page 448,
Aug.
18
the
Trust with
appeared in
Trust
issue
Gabriel
Sept.
on
Eastern Bank Division, and
consultant on foreign contracts of
regarding the merger
Lawyers
of
An
announced
was
the
War
B.
been
Westchester
of
of World
years
New
*
W.
Elmer
than,
Less
of McCue Brothers &
dent of the Union Trust Co.
*
Bank.
and the United Engineers
Constructors, Inc., both ot
Philadelphia. He is also a director
pany
and
while Volney
arms.
*
Contracting Com¬
000. The directors of the enlarged
lin Firearms Co., and its affiliate,
ing
with the U.G.I.
National
three months later he began
Bank; the capital will be $25,000,-
display is sponsored by the Mar-
Roger
President and director
as
and
York.
the L. C. Smith Gun Co.
posts
The
Americas
New
through
until his
in March, 1947.
Prior to that he was successively
the
Com¬
Trust
Center
in
company
comb
*
display of rifles and shotguns
now
pany's
executive
Indianapolis
partment.
*
advanced
Co.
Union Trust Co. both of Indianap¬
branch, modern stores and offices,
Announcement
Stetson
B.
14.
pur¬
contain
to
was
the
Sept.
connected
the Indiana National Bank and the
Guarantee & Trust Company.
11
serves
number
of
Philadelphia,
on
com¬
County, at Mamaroneck, N. Y., it
more
in
of Trustees
Board
Mr.
as
num¬
director
a
Trust
Flanigan is
Mr.
a
a
Vice-President
a
Mr.
rector
He
Company
graduated in 1912, and
was
of
Officer
director of
Vice-Chairman
of the
Elm
director of Manu¬
Flanigan became
1947.
Von
companies.
and
nell
Mr.
Deposit
Manufacturers
1931
as
Commis¬
Executive
a
Safe
serves
serving
in
Bowery
offices of
Bankers Trust Co., six of which
were recently acquired from Title
the
ment
1945,
Mr. Von Elm is also
President and
facturers
was
branch,
housing
Harlem.
a
modest
a
of
Sept. 13
on
and
nue
director
until
Cross
Red,
for
acted
1942
announced
Bank
the heart of
has virtually
pleted arrangements for the
Title
Board
Savings
with
together
has been
a
40
over
*
plans for the building of
in
the
for
*
Bowery
York
New
of
of
Bowman
&
in the
years.
of
He has been
is
been
business
estate
real
1935
election
He is Pres¬
Byrne,
has
and
John
of
of
became
the
various
and
director of the
a
Trusts
Harshaw
New
of
President
Company,
Stetson
announced
Ex¬
of
1934
Company.
of
ident
Forshay,
by the Bankers Trust of the
deposit liability and certain assets
Chairman
been
Trustee of Title Guarantee
also
and
facturers Trust Company. During
this period, Mr. Von Elm served
in various official capacities and
since 1947.
Bank
since
bank
All of¬
Co.,
including
Orie
R.
President of Lawyers Co.,
Kelly,
and
has
and
employees of Lawyers
Trust Company will join Bankers
who
Forshay
Savings
the
The
institution
of
a
*
A
of
and
was
Quay the newly elected President
the credit department of
First
Harshaw,
with
York, it is announced by Francis
S. Bancroft, President of the bank.
Mr. Forshay has been a Trustee
Officer of
director
a
*
Vice-President
a
celsior
until
companies.
earlier item
Officer, began his banking
in
Mr.
become members of the Board of
Von
of
President
of
as
Stockholders
Trust
made
was
18
by the Manufacturers
Company of New York of
Trust
1942
Colonel.
serves
Company
the Presidency
organization,
Mr.
Commerce
Dur¬
Engineers, United
attaining the rank
*
National
the
of
Army,
number
to
serves
1938.
Executive
as
Lieutenant
patrick
father, Joseph
P. Grace, last
July.
In ad¬
Grace
an
1937
World War,
on
leave of
November
Corps
States
va¬
arising
cancy
from
in
October, 1945, during which time
been
elected
made
was
Vice-President in
sence
tion. Mr. Grace
He
Kil-
Mr.
Vice-President
President
and
trustees
Committee.
wasannounced
John
serving
Bank,
elected
*
*
Pennsylvania Company for Bank¬
Mr,
*
H.
has been elected
Cotton
1922.
Joseph Peter Grace, Jr., Presi¬
David
Office,
entered
*
of the John B.
partner
a
Hoboken
*
the
Born
of
becoming
the
at
1914,
President
was
Law
and
1911
Richmond,
Va.,
he
began
the
practice of law in New York in
BRANCHES
NEW
Law
he
Harvard
in
25
George Shaskan, senior partner
of Shaskan &
died
a
at
his
Co., New York City,
home
long illness.
Sept.
17,
after
26
(1106)
The Commercial and Financial Chronicle
Continued
from
controls.
4
page
Notwithstanding
the
extended.
A
Congressional watch
to
report
Act.
The
Thursday, September 21, 1950
...
the
amount
the
ceilings
prices, commissions,
salaries, paid or re¬
on
and
wages,
period from May 24, 1950. Exempt
this
from
rentals
section
for
prices
are
or
real
appointed
the
by
Presi¬
The
shall
protestant
be
recommendations
the
part
shall
charges by
lications,
broadcasting
stations,
theaters, outdoor advertising, in¬
carriers,
margin requirements on any
surance,
and
common
com¬
modity exchange.
Price
powers
and
wage
stabilization
shall not be used to
com¬
pel changes in business practices,
practices or methods or means
cost
aids to
be
in¬
the
of
in
of
reasons
have
or
with
law
or
is
controls.
of
against
However,
the
protestant
denial in whole
any
upon
price
request
(sic),
before
part, a protest
be considered by a board of
may
or
interlocutory decree
in whole
the
it harder
to
tion
order
or
of
reaching
on
appeal makes
test the
burden
the
the
constitution¬
of proof
citizen
the
to
If
and expense
rather
than
order
selling
person
any
terial
the
to
the
service for
such material
or
other
of
course
bring
year
or
trade,
ma¬
ceiling
a
buys
who
person
consumption
or
any
service violates
or
regulation,
staying or
in part,
regula¬
relating to price
effectiveness
order relat¬
or
government.
restraining
restraining,
to act
power
of
Court
The
temporary
or
ality of any regulation, and shifts
district court, except that the court
shall not have power to issue any
of any protests
method
Supreme
ar¬
the President thinks it necessary.
The President is judge and jury
any
provisions
regulation
about
Emergency Court of Ap¬
peals shall have the powers of a
in
the
ing to price controls. This round¬
capricious.
distribution, established
industry—except where
or
United
review
order
or
jurisdiction
any
on
the ground that it is not
accordance
bitrary
will
of
the
in
by-pass the
regular system of Courts. It is
expiessly provided that no court,
Federal, State, or Territorial, shall
rejection. If the protester
is not worn out by this time he
may
file a complaint with an
emergency
Court
of
Appeals,
specifying
his
objections
and
praying that the regulation be
enjoined or set aside in whole or
in part on
writ
a
be filed
Court
of
the
which
These
review, the protestant
informed
at
in the same
manner as a judgment of a U. S.
Court of Appeals.
for such
associations, pub¬
for
may
judgment
board, and in the event that
the President rejects in whole or
his board of
order
or
of
petition
States,
dent.
property, fees
charged for professional services,
press
lector.
regulation
Supreme
review
in
and
ings
A
the
the
mittee is authorized to hold hear¬
the
certiorari
formed of the recommendations of
during
gress
President may modify or re¬
anytime.
the
prevailing
Emergency Court of Appeals,
the
scind
ceived by any person for any ma¬
terial or service. The standard is
price
dog
use or
in
the
within
one
than
may
action against the
an
seller for overcharge. In such ac¬
any
seller
the
tion
reasonable
attorney's
costs
plus
than
three
the
in
be liable for
shall
the
times
of
case
fees
amount
an
unlimited nuisance
tions by unscrupulous buyers.
for
Bullish Factors in Rail Securities
ac¬
Consumer credit and real estate
The rail market continues to give a particularly good account
itself, and the overwhelming opinion among railroad. analysts
market technicians is that further substantial
gains are in
prospect over the near and intermediate terms. For one thing; the
market tvill have important support from
highly favorable earn¬
ings comparisons in August and subsequent months. During this
period a year ago, railroad traffic and earnings were seriously
affected by labor troubles in the all-important coal and steel in¬
credit
construction
Act
the
are
to
regulated
maximum
of
under
and
minimum down payments,
maximum
maturities,
and
the
as
loan,
time
and
form
amount,
of
pay¬
ments.
the power of consumer
trols to free resources to produce
are
other factors contributing to the bullishness toward
For a number of years investors and specula¬
a
recession of serious pro¬
portions
"just around the corner."
They were skeptical as to
the ability of the railroad industry as a whole to show much in
the way of earnings in such a recession.
Since the start of the
Korean incident these fears have been set aside.
It is
now
gener¬
ally, and confidently, believed that a period of high business activ¬
ity is assured for a number of years to come. With sustained heavy
traffic there is little question but that the carriers will be able to
realize handsome profits.
The carriers enter the present
emergency
than they were at the outset of World War II.
in far better shape
Since
1941
close to
$8 billion has been spent on additions and betterments to
prop¬
erty and equipment. A substantial part of this has been spent on
diesel power.
Capacity of lines and of important terminals has
Overall physical condition has been
These additions and betterments, and stepped up main¬
tenance, have brought about a marked improvement in operating
efficiency, with a consequent increase in the potential margin of
profit under anticipated boom traffic conditions.
"
The improvement in the status of railroads in the
period since
of World War II has not been confined to
the outbreak
factors.
During
money
spent
the properties since 1941, not including the heavy main¬
tenance outlays, has been
practically as much as the entire debt
on
roundly $850
tne
credit
in
good
shape,
less than
a
third
with
A
final
securities
is
with every
factor
meeting
important
excess
have high invested capital bases.
tax
liability and
the
railroads
reach
controls
credit
may
tions
enterprises
business
Small
given
are
pat on the back. They
be favored by such exemp¬
as may be feasible without
a
impeding the accomplishments of
the objectives of the Act.' '
While
afterward,
the
entitled by regula¬
years
is
President
tion,
is in effect, and
Act
the
two
for
subpoena,
otherwise,
or
to
obtain such information from, re¬
quire such reports and the keep¬
ing of such records by, make such
items
No
will
the
knows
one
which poweis
in
have
extent
to
That
invoked.
be
to
is
growth
size and
Military
fiscal
the
in
expenditures
the
ended June 30, 1950
about' $15
billion.
Since
year
were
Korea, the President has asked for
billion additional for mili¬
tary purposes. Probably only $10
$17
billion
additional
this
of
appro¬
be spent in the cur¬
rent fiscal year. The annual rate
of
total
military
expenditures
would thus rise lrom $15 billion
priation
can
rmci-iaoO
at
billion
$30-$35
to
a
and
local
World War II. The
rearmament on the
economy today is much less than
the impact of rearmament was in
the
peak of
of
impact
1940-41.
Effect
No Drastic
annual rate
the
increase
To
expenditures from
$d0-$35
billion
military
billion
of
$15
to
one
hence is not too difficult in
year
overall reduction that
terms of the
will be
required in the supply of
goods for civilian use.
Our overall productive potential
is some
50%
larger, through a
increase
10%
and
lion
the
in
labor
force
one-third expansion in pro¬
a
8% of the
production
Korea. By enlarging the
force
through the normal
contemplated is 6 to
rate
of .non-military
before
labor
of
population,
thiough
back more women and
older
workers, through putting
some of the unemployed to work,
growth
calling
through lengthening the work
and
week, the economy should be able
turn out in the next year this
additional 6 to 8%. There will
to
however be
more
power
man
acute
less
or
at
shortages
different
times and places.
nearly
present prog-am o? mili¬
So the
plies. By next spring the military
will be using 15% of steel pro¬
steel
duction, which leaves 85% of
capacity for civilian use.
total of civilian sup¬
While the
plies
will
be
civilian
of
kinds
tain
be deduced,
bigger in
not
may
reduction
dential
proclamation
by Presi¬
or by con¬
This
•
of
an
handed
tically
is
an
inadequate
resume
list
powers
appalling
to
no
limitation
one
man
of
with
restraints except
which
can
prac¬
a
time
easily
be
be saved
automatic
made
savings
lower expend¬
itures
for
farm
price
supports
and mortgage purchases.
must
as
be
careful
of
misr
Production
Act
the
cer¬
goods.
of
1950.
Unco¬
ordinated action that releases pro¬
ductive resources faster tnan
trie
military program requires them
will only lead to unnecessary un¬
employment and deflation.
The
heavy refunding operations
that lie ahead for the public debt
and the large deficits that loom as
result
a
of
Military
the
the
in
step-up
make it
programs,
man¬
the Treasury and
for
datory
the
Federal Reserve Board to compose
their differences
eral
debt
which
in
have
Take
Can
such
all,
take
Program
in
Stride
Its
All
with
bank
on
inflation.
on
Nation
that the Fed¬
managed
reliance
of
borrowings
leverage
so
be
may
minimum
a
our
the
economy
present
can
program
in its stride. Our standard of liv¬
ing
may
but
it
size and
retarded in growth,
be seriously im¬
be
will
paired.
not
Unfortunately, the future
duration of our military
expenditures depends on decisions
made by others. Any
expansion
of the present program will re¬
quire
the
of
assessment
new
a
economic effects.
Confronted
peril,
national
by
fpaust gather our strength for
military purposes, but in the. pro¬
we
cess
hold
must
we
the
of
vision
the
to
that
freedoms
encourage
which
initiative
the
the
made
.States great and
powerful
peacetime pursuits. Whatever
for
restrictions
selves
place
we
our¬
upon
interest
the
in
are
of
na¬
tional defense.
Production
The
shows how
far
we
of
Act
1959
willing to
e
a
but it places a frightful re¬
sponsibility on the Piesident, and
go,
on
you,
power
and on me to see that the
is used only in the emer¬
and only for the emergency.
gency
A
larger than ave: age cut back will
in passenger automobiles,
appliances and other
consumer
durable
goods
using
metals and scarce materials. But
Thomson & McKinnon
(Special
household
continue
here there-can still
volume
substantial
the
If
mobiles,
PALM
Frank
a
of
production
produc¬
of
yearl would see the
of four million cars,
prewar, standards would
272
near
a
high volume.
demand
time
could concentrate
an
resulting
general price increases.
We have
had
of
some
of the increases already
buying even before
of the extra appropriation has
through
any
demand
The
some
on
order.
government will drain off
demand
—
Orator
has
joined
Fla.
III
Road.
Allyn Ac!ds
to The
ver
has
A.
been
C.
Cht.onicle)
Financial
111.—John
added
Allyn
&
L.
Law-
the
to
Co.,
staff
Inc.,
100
West Monroe Street.
Joins Channer
Sees.
(Special to The Financial Ch onicle)
CHICAGO,
111.—John
L.
Rey¬
nolds has joined the staff of Chan¬
ner
Securities
Cojnpany, 39 South
La Salle Street.
scare
allocated
of
County
CHICAGO,
productive capacity. In¬
with
excess
South
A. C.
of $15 billion to $20 bil¬
lion of extra military demand at
such
Woodward
(Special
of
Pre-Korea non-military
Chronicle)
Financial
BEACH.
auto¬
an example, were cut
from^he present annual
very
to The
the staff of Thomson & McKinnon,
as
which by
be
been
current resolution of Congress.
could
occur
was
earlier
billion
condition, such
jection
terminated
a
possible by the changed economic
United
tary production can probably be
carried through with little reduc¬
tion in total overall civilian sup¬
1951. Provisions for
1952. Either set of provisions may
$3
almost
shipping and transportation.
terminate at the close of June 30,
be
to
ductivity due to technological ad¬
vances.
We aie better off, too, in
or
and
set
from the costs of running the Fed¬
eral
Government,
besides
tne
rate, next
production
capacity
could
governments
of doing without.
It has been estimated that $2 bil¬
Consumer
on
Supplies
back 50%
productive
to
example
good
We
necessary, or appropriate, in
his discretion, to the enforcement
supply and the general provisions
terminate at the close of June 30,
po¬
or
Through
hence. This compares with a
maximum of $90 billion and
12 .directed effort and zeal in apply¬
million in the armed services at ing the provisions of the Defense
be
expand
inflationary
controls
it
discourages
financing by individuals
by business firms. State apd
year
tion.
locations, authority to requisition,
of
tne
deficit
a
priorities, al¬
Act
restrain
credit
property of, and take the sworn
testimony of any person as may
price and wage
stabilization and controls of con¬
sumer
and
real
estate
credit
to
the
of
provisions
Production
contain it where it exists.
program.
and
for
various
its
designed
tential of excessive demand
future
by
even
Provisions
is
there will be
year
increases.
Defense
duration of the military
governed
of the books, records
other writings
premises or
administration of the Act.
tax
Through
the
col¬
tax
first step-up is de¬
gather $5 billion more
Next
taxes.
more
the
by
The
signed to
Con¬
granted by the Act
be held by
may
consumers
1950
inspection
contributing to the better feeling toward rail
impending tax legislation. Railroads, along
of
is to deny the use
producing
such
sumers.
that of the
determinant
need
produced,
lives of millions of con¬
the
into
of
other corporate enterprise and most individuals will
naturally feel the impact of defense spending through higher taxes.
However, with respect to an excess profits tax, which now appears
almost certain, the railroads are
expected to again be in a rela¬
tively sheltered position. Presumably invested capital will be an
small
in
money.
thousands of producers.
some
Consumer
earnings in dividends. In more
recent years the ratio of dividend
disbursements to reported earn¬
ings has been slightly more than 50%. If only this recent ratio is
maintained the prospective increase in
earnings should alone bring
larger payments to stockholders. In this connection the financial
the
for
be
to
goods. Programs for allocation of
metals would be concerned only
a
is awaiting with particular interest
Santa Fe directors around the 26th of this month.
them
metals
of
of reported
community
consumer
credit controls. If you do
or
the simple way
large amount of new
equipment in service, debt cut substantially and working
capital
position bolstered, it is obvious that the railroads are in a position
conservatively to pay out a larger share of dividends now than
they were 10 years ago. In the years 1941-1945 the railroads paid
out
If
goods are produced they
want
not
million.
properties
credit con¬
not produced, you do not
are
outstanding. Because of many lower coupon refunding oper¬
ations, moreover, fixed charges have been reduced even more
rapidly than has the debt. Finally, net working capital has in¬
With
,
on
ought to be sold and it does not
make any difference if they are
sold for cash or on time. If they
now
creased
reliance
much
too
supplies.
military
durable
physical
Finances have also been strengthened
materially.
the past 10 years the total net
outstanding debt, including equip¬
ment obligations, has been cut by
approximately $2 billion. It now
stands at not much over $8.5 billion. It is notable that the
is
There
been increased substantially.
improved.
Even
is careful of the taxpayers'
The increase in military output
1949.
tors have operated under the threat of
words.
gress
Credit Controls
Indicative of what may be in prospect in the way of
comparisons. Chesapeake & Ohio, the first to report,
showed August net income', more than five times that of
August,
earnings
railroad securities.
cost
stockpiles of basic raw materials,
Too Much Reliance on Consumer
dustries.
There
Com¬
The
itself.
hearings shall not be in ex¬
of
25
cents
per
hundred
cess
and
the amount of the over¬
charge in case the violation was
not willful. This section opens the
way
inform
pro¬
stenographic services to report
such
willful violation,
a
the
under
to
not more
overcharge
just
or
committee
that
institutions. More of the potential
will be taken away from business
pendency of any complaint before
Economic Impact of
Defense Production Act
is
.
the
potential for excess
vigorous cam¬
paign
for
the
sale
of savings
bonds. It has already liberalized
through
a
F. I. du Pont Adds
(Special
to The Financial Chronicle)
CHICAGO,
111.
—
Robert IE.
Greene has become affiliated with
Francis
I.
du
Pont
South La Salle Street.
&
Co.,
208
Volume 172
Number 4944
.
.
The Commercial and Financial Chronicle
.
(1107)
have
Any Time Is "An Ideal
high
farm
ideal time to get away
an
price
because
supports,
needed to bolster the market.
Korean
-
relatively
the
put
spotlight
on
vising
avoided.
If
maintain
Dr.
O.
B.
we
effective
an
world."—Prof. O.
fessor's
conclusions,
w
reference
Korea
to
"our
or
fact is
The
cannot
such
a
now
waste
from
recent
the
insurance.
doctor
a
which
This
and
his
had inherited.
the
doctors
struggling
relied, and properly so,
During
years
ne
they
The
surance.
something
cash
value
$50,000
over
was
and
something
was
the
over
$70 090.
The fortunes of both the
mother
on
and
father
divided
were
equally in trust between the two
boys meter terms of the parents'
wills; Neither had taken advantage
of allowable lifetime gifts. It was
suggested
,-W
gift
his
the
to
doctor
insurances
that
his
to
he
sons,
the
gifting coull be made
on the cash value, rather than the
paid-up value of the insurances.
Factors in Investment
Moreover, since neither the father
the
nor
mother
had
taken
ad¬
vantage
of
allowable
lifetime
gifts of $30,000 each and since tne
lace business and the other
estate
fancy
a
real
a
business
consisting of one
square-block, Lve-story building,
iirst
tne
rented
floors
lour
on
large corporation.
'was
in
l is
arried
U
which
of
he
long lease basis to
a
This gentleman
middle
to
a
70s
and
was
lauy some 30 years
younger tnan himself. He had no
chiiurai:
a
Lis
that
si re
to
r.
live,
aniici
plans
his
wife
alter
would
be
death,
his
This
in
make
to
was
\.nicn she had
to
accustomed.
sociates
objective in hs
sou
testamentary
the
become
gentleman's
businesses
1 is
able
in
as¬
were
"contemporaries.
In
wi'l
his
everything
gave
Our first question, after
gene
had
we
this gentleman's
over
the
as
value
back¬
total
could
be
expeV
The only
000.
in
be
the
ti e
;If
we
order
to
es.ape
which
about
knew
nothing,
have shrunk 25%
value.
to 50%
in
the
The
success
vestment
taking
lack of it in
or
the
is
management
in
all
economic
the
re¬
cycle,
phases
gaged
in
this
business
of
pre¬
estate
and
in the
details of investment
tax
matters
well
rents
of
and
And
they have
that
the
income
his
managing
of
seeking
capital
confidential.
results
relationship
dence
of
and
Does
the
problem
the
is
that
of
often
we
en¬
wills
an
wife.
primarily
of
studies
that
I give to him
own.''
I
or
her
the
investment
identical
husband and
The
all
in
sions,
first
portfolio
two
on
both
management
products
of
of
these
is
based
underlying
conditions and trends.
Here
tne
will
that he had
drawn;
was
given the matter careful:thougnt
and that he didn't think he wanted
to
make any
changes.
be
income would
to
He
:
his
each of his
one-half
approximate
for
years.
oi
the
per
year
preceding
ten
Under the customary rule
and lor estate tax pur¬
ikumo,
poses,
$100,000
„
of
each
e.^ch of the businesses would
likely be valued at about ten times
average
ten
earnings,
years
or
advised
was
Well, here was his situation. It
developed that net earnings from
businesses, after taxes,
be reduced
tune
but not
poi t where he coull not co
everything he had been doing for
many years past.
will
and
to
of
also
revise
to
his
gift
his
to
wife
residual estate
in order to qualify un¬
outright,
than
have
would
the
been
had the first spouse's fortune
case
a
been
left
having
much
in
been
rather
trust
than
outright.
j*iven
in fact that all of the
so
So
re¬
based
studies
upon
the
and
sions
arrived
at
search control the selection of in-
fortune
of
the
first cividua! securities for retention or
spohse and some of the fortune of purchase.
The research staff of
the second spouse could be taken firms in this business is
composed
making.
in estate
taxes.
Thus
fortune
one
of men
is wiped out and the second is im¬
ence
save
paired
to
she
failed
the el circumstances
Under
her.
for
estate
balance
the
put
win J
would
Jp
t.ust
ith
some¬
$S,000,000
with
,
around
thing
in
w
seek
to
proper
individuals
advice
on
taxes.
The
>
the
because
and
in
study of general business and
economic developments and of the
close
relationship
between
the investment adviser and/or in¬
affairs
of
tions,
hundreds
including
enterprises
ab; ut
his
g
would
estate
oss
f'4 000,000.
After
a
be
lawable
deductions, his Federal and state,
estate
taxes
expenses
mi
administration
would
Another
we
have
the
is
a
that where
one-man
business
for
right.
does
not
them,
ill
he
wants
receive
order
his
that
will.
and/or
As
a
trustee under
consequence
the
advisor, in attempting' to carry out
the terms of a will, learns in short
by the
order the harm of the client's fail¬
children
that his
taught the value
placing his fortune
vluue
purposes
which
of
ami t at, therefore, rather
children
tax
with
his
executor
frequently is
cement
parent
t'.e sales value-shinks severely on
the owner's death.
However, the
for
contend
anniu
been
money
than
problem
to
bUnd
have
It generally follows
business
an
approximate proud
$2,000,000.
a
setup.
to
in trust
have
estate
they
his
out¬
might
ure
to disclose to his attorney all
of the
so
background factors involved
that
a
proper
will
could
Because
outside
this
danger,
one
growing
well as the
The
is
for
in
example,
pe¬
of
for
change
a
in
Any
impor¬
underlying
conditions
is
the
eco¬
occasion
review of each account.
security
holdings
of
on
the
client's
the
errors
which
some¬
responsibilities
different
among
or¬
ba ed
on
un^er
the
value of the
supervision.
Fees
Urge accounts are nego¬
Under present Federal tax
liabilities,
tax
^
to the extent that
relates
other
to
exempt securities. Thus
vestor in
finds
in-
50% top tax bracket
a
that
offset by
than
an
half
an
of
his
net
fee
is
equivalent reduction
of his Federal income tax. A num¬
ber of states permit similar treat¬
ment.
Farr & Co. Admits
Farr
&
Co.,
New
York
120 Wall Street,
City, members of the
New
York
Stock
admit Francis
G.
on
Downs
to
Exchange, will
G. Geer and Helen
limited
partnership
Sept. 28.
With Greenfield & Co.
Frank
J.
J.
Smith, formerly with
Artilur Warner & Co., Inc., is
associated with Greenfield &
now
Co., Inc.," 40 Exchange Place, New
City, in their Trading De¬
York
partment.
With Merrill Lynch
each
(Special to The Financial Chronicle)
CHICAGO, 111.—Philip J. Charleson, Eugene T. Detmer, Sam J.
public utilities.
supervision.
when
service
of
spe¬
portfolio of every invest¬
advisory client is under con¬
tinuous
of
delays
arise
tax
supple¬
experts
firm
firm's
The
ment
tant
the first things an investment ad¬
as,
corpora¬
employment
technical
troleum and
nomic
of
the
by
fields
cial
be
drawn.
.
mented
of
fast
nature
the
stantly engaged in the observation
uehuetion, and thus
substantially in taxes, and
the
laws the net lees
paid for this
service may be deducted from tax¬
able income, in
computing income
with many years' experi¬
this work, who are con¬
der Ue marital
which to keep thetyvolf away from
vestment counselor and his client young
$1,000,000 as the value for tax
as
the door, as compared to $1,000,000
established
leaders.
pui poses for e;ch of the businesses.
very often leads to the request by
Added to his S2 000,000 in securi¬ to $1,500,COO uncJer the original the client that his adviser become own
research
staff
ties,
re¬
of
but eliminates
tiated.
upon
this
£
the
divided
industries
from
as
Stock
for very
of
Conclu¬
partner
of
harmful
annum
individual
companies and securities.
York
New
tc
opera¬
itself),
the
in-
not
merely
certain
of
fortune
Upon basic
of
is
but
to
Advisory service, generally
speaking, costs about y2 of 1% pei
economic
of
analysis
this
plug
as
ganizations.
research.
of
affairs,
are
deci¬
of
collectec
otherwise
or
the business
one
times
depends
types
Principal
the client.
by
a
floor
or
What
again, a
something
between
ground, was w: at figures had he
vital tax situation has been over¬ conclusions on these matters rests
$1009,000 ond $1,5C0,0C0, the rest
set on the values of his businesses.
looked. If the fortures are sizable, the
prudent
apportionment
of
in taxes and
He stated he only had a vague having evapo.ated
what happens is that on the death funds among different types of se¬
shrink ge.
The remedy here was
Idea, and that such matters were
of; the first spouse there is a sizable curities for safety, income or ap¬
t. ken care of by his accountants. to sell the businesses as soon as
estate tax.
What is left, piled on preciation,
always
within
the
We asked him why he had not poss ble, with a proviso that the
top of the remaining spouse's for¬ framework of the individual pro¬
taken advantage of his marital de¬ gent'eman remain in a consulting
tune, creates a much larger estate gram.
duction. His reply was that he was capacity, on a salary basis. In distax on the remaining spouse's for¬
The second type of decision is
per.'ectlv satisfied with the way po.ing of his busme.ses, his total
would
.
use
Success
nominee
is
(and
you
fidential
an¬
advantage of the
frequently available
of life insurance, or
planned program of gifts?
a
ir.
name, or
bank's
chooses.
Exchange at all
times during trading hours.
This
not only helps to protect the con¬
savings
from
the
monthly
as
in
least
the
a
are
his own testamentary plans?
Has, his will been recently revised?
the
cus¬
Exchange, maintains a complete
brokerage service. With two mem¬
berships in the New York Stock
Exchange it is possible to have at
Has he taken full
from
The
a
it becomes due and it
as
firm
member
been
trust, and of what nature?
opens
client's
of
.instructed
tions
confi¬
client
Citi¬
kept separate from income
inform
neces¬
has
then
client
I tended
proc¬
when
complete
discretion
established.
is
serv¬
York
companies.
Income
'My
Obviously,
obtained
are
the
as
apprecia¬
sound program
a
the
promptly
The information required to for¬
sarily
in
.disbursed
tion?
mulate
inter¬
investment
New
trust
selected
cash.
can
prudently be accepted in the
and
cash is
tax
What degree of risk
position?
income
efficient
leading
name
as
requirements?
over-all
permits
without
aosences
charge, the custodian
of
main
planning operation which requires
careful study of the needs ana
objectives of the individual. What
is
al
bank
identical.
his
investor of
and
todian account in the name of the
client.
Keg.stered securities re¬
velopment of a basic program for
the individual investor.
This is a
What
the
aetails
with
banks
investment portfolio is the de¬
cf my suouse,
likeiy
remain
tio
ices
clients of
The first essential in
automatically
Svine firms make available to
their advisory clients, at no addi-
the firm, and the firm's own suc¬
are
ac-
procedure.
full realization
a
relieves
it
fering
man¬
industry.
the welfare of the
sub¬
regulai
custodian
a
account
.
exicnuea
as
executives
commerce
of
bm densome
They have widespread
acquaintance with industrial ana
financial
and
are
the investors is obvious
an
turns.
in trust,
as
rights
provides the records necessary for
the preparation of income tax re¬
agement.
tax
the client.
warrants
to
Such
had
have
experience
.t
cou
native
and
years'
best
se-
a
proxies,
venience
co
The partners and
many
ess
involving
client's port¬
usually taken without the
garding
other senior personnel of firms en¬
are
in
changes
functions both of trust companies
anu
stock exchange
firms.
The
only of facilities and
methods, but of successful
good judgment.
an
lty
scription
in¬
not
One says to the other: <;In appre¬
ciation of the loyalty and devotion
in sales
That which would
himself
save
about
case
counter
she
and
of
Another
the widow would be left with two
would
counselor
merely
additional property, outright or in
$2,500 a year.
Si- ce the doctor's life expectancy
was approximately ten years, the
premium saving could amount to
a
total of $25,000.
markec risks,
provide the needed rnrney, then
to
and/or
beyond
of his securities.
cess,
submitted to each
are
saiekeeping of securities
collection
and
disbursement
0.'
income, and appropriate action re¬
ticipate the future inheritance of
miums
would sell the securities promptly
in
adviser
far
goes
the
is
recom-
The
ment
care
security
and
specific approval of
word the job of the invest¬
a
it from the doctor's estate,
tion, he would
as
assume
»uac t-.e executors
ome..t
l.
securities
of
In
port¬
every
such
No action
comment.
the first
tnus saving substantially in highbracket estate taxes, and, in addi¬
liquid assets would
eariier.
tax
remove
about $2,000,-
o;.
form
mentioned
ior
ses
gift
no
gentleman's executors wouid
be requhed to set aside, promptly
after his death,' tax and adminis¬
tration
of
$60,000, there would be
involved.
Moreover,
the gifting of the insurance,woftld
Under these circumstances, then,
this
businesses t~en.seives wouid
butrigct to his wife.
;
remains
but
businesses,
he
insuiance
gifted at the
cash
value
of
something
over
as
of the
date of his i eath
in
accordance
with the
usual for¬ $50,000, or less than the parents'
combined allowable tax free gift
mula.
shrir k
in
security
in writing, with
appropri¬
explanations, for approval oi
cu
throughout
the
United
States
and
abroad,
ihis family.
At the time we first
which provides an important con¬
conferred with the doctor he was
tact witn the ever changing cur¬
cairying $100,000 face value in in¬
insurance for the protection of
since
unrelated businesses—one
revealed
wnich
change
a
any
of
Suggestions
folio is
place.
experience
highlighted
of
of
case
35.
at
case
use.
the
each
rectifying the situation.
6
page
balance
pendent fortunes of about $500,000
it to ourselves.
owe
Continued
in
moment
a
have
of
review
a
Client
death, the client is
promptly advised to see his attor¬
and to tell him tne things he
should
in
ate
client's
sult
the
If the will is drawn so
xor
folio
jeopardize the fortune after
modern
say
was
in the first place, and should not
program
of each child.
wife and two sons, both matured.
The father and mother had inde¬
without
have embarked
on
child's
distributions s!at given
21, at marriage, 25, 30
practical
responsibilities to the
never
position
calls
ney
more
paid-up value
should
we
tax
each
the
of
practical plan
the .fortune in trust,
place
;;vnA
agricul¬
valid
are
death
to
as
ages,
and
program
buts they
pass¬
his death.
with partial
rest of the world."
We
to
the
on
are
cnildren,
second
a
death
tne
to
on
fortune
better and
is
the
quite in accord with the Pro¬
course,
tax
one
on
outright
i'ortuue
parent,; and
on
of
mar¬
investment
Under the
same
A
sota.
We are,
the
way,
unfortunate
an
ti-e
is
share
of high support
prices and still live up to our
responsibilities to the rest of the
B. Jesness, University of Minne¬
Jesness
this
in
tne
re¬
changed and that we
must accept leadership and its
responsibilities, or Russia will. J '
And it is certain that
have reached
they
35.
tne
even
in
position
our
of
there
world has
tural
until
riage and of unfortunate and in-
agricultural pro¬
has emphasized the
that
trust ior tunes to
to
Ol
age
you
experleneed
our
gram.
tne
nifciidatioiio
on
not
penalties of
has
an
in
only during his lifetime, but after
better
the
umm-
crisis
cross-indexed, and
vare
i
heid.
children
from
aren't
important reason for
more
fact
Korean
the
a
mentioned in the beginning, it is
the adviser's oh counselor's job to
protect the client's fortune, not
ing
"But
Without
far
portant.
.
to get viser and/or counselor asks of
casting client is to see his will, ior, as
which
on
life.
gentlemen,
it is the opinion of wiser heads,
based on bi iter experience, that it ,is
Price rises from the
have made supports
war
they
in
reflection
any
Time" for This
"This would be
something
started
27
The
client
Duva, Herbert C. Eggleston, Rob¬
ert
T.
son,
have
Mortimer, Robert Jw Pier-
Jr., and Bernard G. Ziv, Jr.,
been
Merrill
added
Lynch,
to- the
staff
of
Pierce, Fenner &
Beane, Board of Trade Building.
28.
The Commercial and Financial Chronicle
(1108)
the following conditions were pos¬
forced
tulated!
Continued from first page
ment
The
(1)
been made
Wax, Taxes and Security Prices
1939.
(Common
about
50%
(3)
prices
problems
logistics.
(not
cilities
sufficient
in
number
12 million.
differences
of
—from automobiles to houses—far
semi-depression.
Business
close
are
to
in¬
record
peaks,
■
Federal
(6)
are
income
than
more
tax
double
rates
those
of
1939.
(7) The national debt has
than
it
more
quintupled since 1939.
52%
was
Product;
of
Gross
it
now
is
Then
National
95%
over
of
GNP.
The
(8)
atomic
bomb.
Later,
perhaps, the hydrogen bomb.
(9) No clear-cut end to a pos¬
sible worldwide Korean-type con¬
flict presently visible, whereas in
it
1939,
feat of
would
evident
was
that the
soldier has not chases," is discussed below.
obsolete by the atomic
and
other
push-button
the Korean War has
so
painfully demonstrated.
The
direct cost per armed force man
will not exceed $12,000 annually.
(This allows for a 20% increase
over pre-Korea prices.)
(2)
No one knows when, or
even
if, the Korean conflict will
spread under the force of events.
Therefore, the projected budgets
are shown as phases of a develop¬
of
Power
trials.
as
Table
No.
Taking the second quarter
as
100, the $19.5 billion
of
rate
profits
capi¬
were
talized at the high of about 229 in
terms
of the Dow Jones Indus¬
Consumer Buying
on
1950
annual
;
The
which
in
manner
the
2
again presents the market appraised the earnings for
possible wartime phases the 12 months ended June 30,1950,
various
with
contrasted
1944
and
1950.
was
about 206 on the Dow.
By
dividing the 229 high into 206, an
index figure of 90 is obtained—a
fairly close approximation of the
earnings index of 93.
By applying this method to the
post-tax profits of the various war
phases, some idea of the possible
The
prime considerations here are,
What
happens
to
"Take - home
Pay"? What is the likely effect on
Personal
Consumption
Expendi¬
tures?
Take-Home
Take-home
chances
of
War
Korean
the
Pay
Pay
(THP)
ing general
war
that Phase No. 1
„
de¬
reflected
Germany, and later Japan,
clearly terminate the war.
first
in
the
budget,
which
is
the
financial
blueprint of the war effort itself.
The present conflict being
social-in character as
(10)
"pur¬
foot
Impact
be had.
govern¬
bond
Thursday, September 21, ,195Q
.
—
^i,af®hLam.QPr^ULb00m ^
h le 1939 followed a period
nod,
ventories
of
are
through
savings
.
is the
left
for
with no assurance amount
discretionary value of the projected earnings
might not quick¬ spending after taxes and war sav¬ may be gleaned. So long as the
eventually
spreading
to
other
bond
"purchases" are de¬ economy only had to cope with
areas
with other participants are ly telescope into Phases No. 2 and ings
No. 3, or even into No. 4, within a ducted.
No.
The income taxes were Phase
1, it would prosper,
better than even—it would seem
Even
year or so.
The only observation discussed previously. War savings "A nice comfortable war."
to follow then that the size, i. e.,
that can be made at this time is bond
purchases financed 24% of Phase No. 2 ("two Koreas") would
the cost, of the war effort needed
that raising, training, and equip¬ the deficit in
for
1944, 55% in 1950 not be too difficult to deal with.
victory
would
control
the
ping an armed force of the size (due
course of the economy for the into the small deficit), and In both phases a high degree of
of Phase No. 4,
12,000,000, takes now an estimated 15% of Phase selectivity would
be
necessary,
determinate future.
considerable
time
at
the very No. l's deficit. In view of the cur¬ however, with the heavy goods
I" this connection, it would be least, two years.
rent rate of redemptions, the im¬ "war babies" strongly emphasized.
wen to bear in mind that the size
(3) Financing the annual Fed¬ position of forced savings bond It is Phases 3 and 4 that would
problem means men as well as
eral
deficits can be
done
at
a
purchases may very well be seen test fully the nation's ability to
equipment. Since 1939, two very
weighted annual cost of 2%.
in Phase No. 2, certainly in Nos. 3 survive, since they would likely
large pay and allowance raises
In the
(4) The appropriated funds are and 4. The reasons are that most blend into one another.
have
been
granted armed force
actually spent in the particular non-bank bond buyers such as in¬ latter event, it goes without say¬
men; a third is now in the works.
phase year—not always the case, surance companies, savings banks, ing that the stock market would
Equipment cost increases are sug¬
Few
admittedly.
etc., at most would be able to ab¬ suffer a severe deflation.
gested by the following: Infantry
(5) Pre-tax, corporate income, sorb only about $8 billion, leav¬ stock groups could escape. If any¬
division in 1944—$14,500,000, now
it is estimated, would likely fol¬
Table
No.
3's suggested
ing commercial banks and indi¬ thing,
$74,000,000; an armored division low the last war's
pattern, show¬ viduals $18.5 billion of Phase No. price levels for the Dow Jones In¬
in
1944—$30,000,000, now $199,ing a declining ratio to Gross Na¬ 2's $26.5 billion deficit to assimi¬ dustrials are on the optimistic
000,000; destroyers in 1939—$7,- tional Product after
In 1942, for example, with
reaching a late. If the last war's peak buy¬ side.
000,000,
now
$40,000,000;
light
peak in Phase No. 2. Personal in¬ ing rate of savings bonds by in¬ a far less threat to the country's
tanks in 1939—$27,000, now $225,come
would
increase
by Phase dividuals is assumed for Phase solvency, the Dow Jones averages
000; B-17 bomber in 1939—$300,No. 4 to the extent that wages and No.
2, they will take $6.4 billion, fell below 100.
000, now B-36's cost, $3,000,000
salaries and proprietors'
As for bonds, an entirely dif¬
income leaving $12.1 billion for the banks.
plus. This size problem, of course,
are augmented, estimated at about
and
very
selective out¬
This latter will be a direct addi¬ ferent
would
be
buying,
the inventory of hard
goods in the hands of consumers
of
and
importance on the
hand; and, on the other, that
the
of record
years
exist
do
fundamental
0ne
,
After three
(5)
by illustrating the striking differences between 1939 and
1950.
If it is granted that these
purpose
and
to support an armed force
over
and
strategy
capacity has about
Admittedly, the above is an incounting numerous complete list, but it will serve our
war plants some of which are now
being de-moth-balled).
(4) A completely built navy and
merchant
marine
exists
(shipbuilding took about a quarter of
the
steel
industry's
output
in
1944-45);
so
do
huge
encampmerits, air bases, and training fa-
size
of
cated
are
higher.)
Plant
doubled
stock
bomb
weapons,
savings
war
.
15%
(from June 1950 levels).
The above assumptions are per¬
force arbitrary, and so subject to
However, our sole objec¬
(Jebate.
tion
the
to
supply and
inflationary.
From
to reduce the almost
money
theoretically
that
point
certain
on,
of
increase
the
in
is
look
indicated.
would
money
while
the
The
supply
of
greatly
(i.e.,
new
expand
demand
issues) would con¬
employing them is to try money supply, a further substan¬ tract.
Little or no private res¬
putting together the esti¬
get some helpful idea of the tial stepping up in the rate of idential or plant expansion would
national aspects of the last
war,
creates
essentially
different" as mates reflected in the different likely nature of the economy as it forced bond "purchases" would be be permitted. Such plant building
moves
towards
an
all-out
war
well
as
imperative and
is indicated
in as there was would largely be
infinitely more compli- budgets shown in Tablg No. 1,
status.
Phases Nos. 3 and 4. Even so, the government financed. Inventories
The budgets for 1944, the peak
TABLE I
money supply would be inflated would be stable to declining, with
war year, and 1950, are shown for
enormously
in
the
latter
two rapid turnover obviating the ne¬
Budgets for General War III
contrast.
In setting up the other
phases (by $41 billion and $57 bil¬ cessity for much of the present
(Billions of Dollars)
budgets, the prime objective is lion, respectively). The combined bank loans.
Public
building of
-Size of the Armed Forces (Millions)^
to show the possible impact of the effect of these
11.4
1.3
2.0
4.0
relatively modest roads, bridges, schools, hospitals,
8.0
12.0
1944
1950
No. 1
increasing war effort on taxes, (i. e., in view of the rate of ex¬ housing,
No. 2
No. 3
No. 4
etc., would inevitably be
OUTGO <U. S.)
the deficit, and the national debt.
jl 1 \
pansion
in the money supply) sharply curtailed.
War:
Thus, outside
These will be the subjects treated forced bond "purchases" and in¬ of the issues of the Federal Gov¬
Direct
12.4
24.0
43.0
96.0
144.0
below.
Indirect
T~
come tax payments on Take-home
4.6
9.0
13.0
21.0
29.0
ernment,
which largely creates
Other:
Taxes
Pay, is quite devastating and sug¬ its own money supply at the time
Oeneral
17.3
42
19.0
20.0
21.0
Phase No. 1, the Korean phase, gestive of the size of the cut in it sells its
22.0
bonds, the outstanding
Interest
S
3.2
5.8
6.0
6.5
9-9
has not called so far for any bur¬ living standards that would have amount of corporate and munic¬
primarily
contrasted
to
the
The Budget and General War III
predominantly
In
tive
rate
bond
money
in
and
—
.
'
'
J90.0)
.
-
"'
-
-
TOTAL
INCOME
97.4
(U.
40.1
58.0
87.5
-
S.)
Taxes:
f
145.9
204.9
'
,,'
Corporate
income
13.5
11.3
15 3
20.0
25.3
30.0
20.8
14.7
13.4
28.0
35.1
49.0
4.4
8.0
1
8.0
10.0
Miscellaneous
12.0
15.0
4.8
3.0
3.0
3.0
3.0
3.0
income„__
TOTAL
43.5
37.0
DEFICIT
53.9
3.1
232.1
257.3
44.7
61.0
75.4
97.0
13.3
26.5
70.5
107.9
270.6
297.1
367.6
475.5
*
'
DEBT
Total
-
Interest
3.2
PRE-TAX
5.8
6.0
6.5
7.9
9.9
24.3
29.3
34.0
36.0
38.0
40.0
165.9
210.0
218.0
224.0
234.0
245.0
INCOME
Corporate
Personal
;
Ratios:
1.
2.
War
(total
per man
cost
financed
by
$7,900
debt
$13,100
59%
$16,500
18%
$15,300
40%
$14 600
43%
62%
of
oi
tne
income
Di posable
2.0
4.0
3.0
12.0
No. 1
No. 2
No. 3
No. 4
165.9
Take-home pay
1944 prices (73.5% of June *50)
Personal
cons,
expenses
218.0
224.0
234.0
195 0
200.0
196.0
200 0
12.8
(net)
210.0
145.0
;
income
Bonds
1.3
1950
1.7
2.0
6.4
21.2
'
>
245.0
199.0
43.0
,
%
as
Personal
cons.
exp.
(actual i_
deficit
Financed
178.8
156.0
132.2
142.0
146.0
140.0
132.0
115.0
111.6
181.8
186.0
178.0
168.0
147.0
94%
94%
94%
94%
94%
1941
1942
1943
1944
1945
72.1
82.3
91.2
102.2
111.6
123.1
?.l
13 3
26.5
70.5
107.9
a
of THP
Federal
189.6
53.9
exp.
198.0
84%
cons.
197.3
1940
Personal
122.2
by Savings Bonds
24%
55%
15%
24%
30%
40%
TABLE III
General War III and
Security
-Size
of the
Armed
Stock
Corp. post-tax
earns.
($ billions)
4.0
8.0
12.0
No. 2
No. 3
No. 4
10.8
Industrial
16.0
12.7
10.0
96
82
65
51
140
Average
18.7
93
206
22 D
149
117
90
96
65
51
Equivalent
Buyer's
vie'.ds
Index
167
103
1.66
'NOTES:
2.
3.
Second
Second
In
quarter
1950
1950
computing
Index,
1.99
/
quarter
corporate
high
money.
on
DJ
J;
Of
;
Shiii)
"
115
A.94
($19.5
Industrials
„
1
i f
;<>tt
1.86
,!,i 1.59'riT9f'
ratio
billion
annual
(229i"i_Li
and
v_
Bond
war
if
*'.•
Gross
over
$100 billion.
was
Even
and
with
the
vihv,' oT
National
».uif
Debt
Takeri
National
as
a
relative
Product,
PCE
68% in the June'1950 quarter;
by Phase No. 4 it would drop to
This reflects the vastly in¬
41%.
creased
the
dividend), the drop would
cost
of total
war
and
the
back-breaking
concomitant
adverse
impact on
above,
the
It is in sharp
mounting deficits could only mean living standards.
contrast with the last general war.
a
very sharp rise in the National
year,
from
1940
onward,
Debt. If, for instance, going from Each
Phase No. 1 to Phase No. 4 took PCE expanded substantially, since
four years, the debt would jump taxes were relatively light, a huge
by 85% over today's near-record total of unemployed found work,
level.
Whereas in 1944, the peak and no forced bond "purchases"
were
required. There seemed to
war year,
the debt load exceeded
Gross National Product by only be plenty of candy for everyone
This time, a general war
8%, on achieving Phase No. 4. the then.
National
Debt
would
be
32% economy is hardly likely to be so
tax
rates
suggested
measure
of
This is the
the power of the
fuel that could light the fires of a
disastrous
inflation.
That
is
to
rate!
=
100
=L 100
Buyer's
interest
\Var III and Security
Prices
In view of the foregoing, it is
price conflagration could be
off,
since
the
creation
of pertinent to ask, what would be
the effect on security
prices of
money would far outstrip the pro¬
such an acceleration of the war
duction of
goods—were not the
dangers of such, a. development economy? Table No. 3 may shed
some light on this question.
now
SCK
widely feared., It is pre¬
set
As for common stocks, by cor¬
sumed, then, that prober steps will
taken, add' iri tiriii; The possi¬ relating post-tax corporate profits
Eond-v!'•*
>
100
Their
charge to in¬
purchase in
market would
be a
of employing the
surplus funds.
Tax-exempt bonds would natu¬
benefit most pricewise due
tax
sheltering features
which would become increasingly
more
valuable.
In the Table, the
rally
to
their
possible extent of the decline
in
yields is essayed by
correlating the "Bond
Buyer's"
Yield
Index
with the projected
tax-exempt
ratio.
money-supply-demand
It
might be mentioned that the esti¬
mates
are
on
the modest
side,
for
new
all-time
prices)
(highest
projection
the
fact
the
despite
calls
low
yields
exceeding
even
the record levels of
early 1946.
Conclusion
In
reviewing the foregoing, it is
well
remember
to
sition
rests
other
the
areas.
entire
an
upon
spreading of the
Korean conflict
this time, be¬
At
of the political and military
commitments
already made,
the
it
is
view
United
that such
a
par¬
States,
devel¬
growing increasingly
probable. If it does spread,
more
it
by
our
opment
as
po¬
eventual
ticularly
we
is
suggested at the beginning,
is highly
unlikely that the ex¬
perience of the most recent gen¬
eral war will be of much help as
be
a
one.
impact ion: consumer buying with the Dow Jones Industrial
power of. the combination of much Stock Average, a rough indicator
higher taxes, and the taking of of the relative worth of such earn¬
such'
preventive steps,
notably ings in terms of stock prices may
prior
a
means
issuer's
cause
General
is
open
major
to
sweet.
deflationary
corporate cred¬
safe, since bond*
be
taxes.
come
supply.
money
poor
even
would
the
a
cyclical
a
period,
its
of
us
private
Unlike
Expenditures
be the solje
hun?ry and
would
(bonds
-
growing
Consumption
Personal
enormous.
personal' tax
trebled, would bstill
with a whopping- deficit
almost
ipal
available outlet for
ble
it
earnings
,£upply-deipand
1937-41
i
vi
Eond
on
.,
82
•.
Private money supply ratio to
demand
1.
188
Values:
all-out
say, a
18.0
56
__■=
Index
Bond
2.0
No. 1
61
Index
DJ
1.3
1950
Values:
Personal
surance
true
Forces (Millions)-
11.4
1944
an
rate 'double through the non-recurring GI In¬
corporate
higher than the GNP.
Prices
in
time to be preserved.
be
Forces (Millions)
11.4
8avings
same
that of 1950 and the
Deficits
Armed
1944
Personal
the
'
Dol'ars)
-size
made
present social order is at the
increased 20% over No. 2, Phase 1950 quarter (unlikely, since such
No. 3's deficit would be enormous, a large amount of the buying was
the highest on record. Phase No. 4, done on
credit, and also partly
of
(Billions
the
consumption expendi¬
icit within bounds.
Phase No. 3 tures
(PCE)
necessarily
would
to
contract
doubtless would be merely a tran¬ have
very
sharply.
sitional period before No. 4, the Even if they remained as high a
all-out Phase. Even with tax rates percentage of THP as in the June
Consumer Power
on
to
could
a failure of localize the present
conflict, would call for the reimposition of the top tax rates of the
last war in order to keep the def¬
find
TABLE II
Impact
How¬
rate
$14,300
60%
be
taxes.
which
or
with
War cost
No.
about with another "Korea"
come
Other
Personal
Phase
in
2,
densome increase
ever,
%
guide- in
The
bility,
profits,
prosecuting
the
new
possibility,, even proba¬
of a major
particularly
deflation
in
of
consumer
goods industries, occurring simul-
Volume 172
Number 4944
.
.
The Commercial and Financial Chronicle
.
taneously with
ever
not
difficult
a total war, should
quickly
dismissed
merely because it never happened
be
•
too
before^
In
the
present.-
hedge
to
Accordingly, it is
impressed by the
equities at this
be
value
the late post-war economy defied
the law of economic gravity, a
For
general
type of security offering the
day's
go
war
making
on
own
it
as
under' to¬
economy
conditions
would
in
the
a
of
far
from
real
mean
Phase
sense,
In
with
Walter
the
Beer
died
constituting
a
temporary capital
absolutely necessary if the
levy,
social
held
fabric
of
America
together at all.
in Phase No.
are,'and
which
is
to
of
of
Max
&
sudden
of Phases 3
and
World
War
un¬
II
to
reckon with—
Mr.
in
La.,
Terborgh:
Mr.
There
two
are
here.
One, how much
corporation be asked to
Treborgh: And the second is
what
form
tion
Model,
Co.,
Sept.
should
take.
If
that
$5
billion
the
are
New
York
City,
Hirsch
died
on
11.
porate
it by
rate
putting
B.
Briscoe Company
with
profits
has formed
Company
with
C.
the
Mr.
Briscoe
B.
offices
1105
at
4, with their de-- West Clinch Avenue, to engage in
on share prices the securities business.
O'Mahoney:
you
raise
Briscoe
taking
excess
on an
or
tax.
KNOXVILLE, Tenn.—C. B.
precipitation
income
on
to
that.
on
regular
Terborgh:
I
agree
We 'ought
corporate
It is
to
rate.
raised
now
in the pending bill.
45%
ket.
This tax falls with prejudi¬
effect, with special effect, on
the successful, up-and-coming and
expanding corporations.
Senator O'Mahoney: I think that
is
rather
theoretical
a
Senator
O'Mahoney: Yes, and
business managers have told
that it ought to be not less
which
and
not
The
argument.
porations
those
on
raise
a
excess
cor¬
prices.
If
profits do not rise to the $35 bil¬
lion mark upon the average or
the $40 billion mark, then the re¬
turns will not be great.
So the
effect
of
an
Terborgh
salesmen
arguing
crisis,
plimentary to
are not
pects of what they are
is perfect. But you can face right up to the rough spots and turn
them into less potent objections by bringing them up yourself. You
can turn a seeming
objection into a reason for buying, or at least
nullify it as a reason for not buying. The man who sells a higher
priced car says, ''This car will cost you more in the beginning, but
you'll make it up in comfort and pride of ownership. It will pay
you in the long run.
You can't get something good for a little
—why not get something worthwhile for a change. You deserve
it don't,you?"
The
man
minimize
or
feel
to
hear the
objection "It costs too much to
buy a mutual fund." But if he- says something like this he's not
going to have that trouble: "Mr. Prospect, this is a long-term in¬
vestment.
It is somewhat like a piece of good real estate, or any
other valuable property.
Some years it may be worth more and
some years lees.
Don't you ever buy a mutual fund, either from
me
or
from anyone else, unless
ured and
it today or tomorrow, or even a
"There
the
expect to hold it as a treas-1
Don't buy it if you expect to sell
few months from now.
you
permanent investment.
is
acquisition cost here of about 8%.
an
That
covers
putting this fund together, of distributing it
throughout the country, of advertising it and of paying investment
dealers and their representatves to come to your door and tell
you about i it.
Over a period of years you can amortize this cost
and you just cannot get the advantages of broad diversificaiton in
a modest investment such as we are
discussing unless you do it
through one of these mutual funds. It is all explained right here
in the prospectus."
*
of
>
In
promise people the moon—don't
hide anything. Tell them where they stancL' Some of them may
(
not like it, but you haven't missed much
jfv^pu have to pass up
anyone who isn't willing to pay the
legitimate .marketing cost of,
your product.
:
}'„'0
Regarding yields, why not make it plain that dividends
fluctuate?
Why
not
return
average
on
business
that 4%
investment
qn
to
5%
is
that actually
a
mighty
covers
good
cross-
a
cases
many
represents the
cream
of American
Mention these points without an apology—there isn't
industry.
life insurance company in the country that wouldn't give
a
almost^
anything, if they could obtain an income on their investments at
something
■-
this return.
near
And there
another
is
point—people like to hear a man tell
It is the strongest kind
them the bad points as well as the good.
of salesmanship.
to worry
When
lay it
on
the line first,
you
won't have'
about making explanations and apologies later on.
is the only way to
are
you
counts is where
whether he
gets
a
a
acquisition cost and modest return.
person
is financially five years from now—not
higher return for a year or two on a highly
security buyers especially should appreciate this kind of
plain talk—also those who are fundamentally looking for a place
to put
their surplus at a fair rate of return, and with some assyrTr{
ance
of getting their
with
us
checks regularly. The speculators
think
incentive.
Not
a
those
the
are
playing with when
business
subject
$700
bill
tax
pro¬
billion with
budget of
the
million
of
ex¬
only practicable
way to increase the revenue is to
put on an excess profits tax and
to put it on now.
penditures,
the
Ralph Moberly With
1. M. Simon &
.
_.
j
to
v(
dol¬
ones
you
in
you
are
the
O'Mahoney:
World
This
surtax,
and
should
tal,
War
profits
excess
of
excess
not exceed
income
tax,
profits
tax,
of the to¬
80%
Sosit is 80 cents out of every
dollar
<ojy profits
.
when
get
you
into. Jhese
high regions of profit.
So the .principle here is to let the
carried
Ibiurdeftijbe
by those
larff'besL able to carry
this: Taxation is
can
who
practical prob¬
a
We have got to do what we
lem.
when
do it.
can
we
So at the
present moment the simplest thing
do
to
is
get the increase from
taxes
income
from
the
and
corporate
taxes
increases
then
and
loopholes. We haven't
been very successful in plugging
the loopholes.
plug
the
Mr. Terborgh:
I want to return
to this question of
Chairman
Granik:
Do
be
made out of
are
Mr.
Terborgh:
Your
begs the question.
Simon
think when
corporations
can
keep
only 15 cents out of each dollar,
they h^ve too little incentive left
costs down and to practice
This
is
not a
painless
Don't fooF yourself.
takes real
determinatipn to
rate
would
It
keep
I feel that .this 85%
have'1
a - very
inflationary effect in the
applies.
It has
a
serious
areas
in
bad ef¬
&
associated
Co.,
members
and
315
of
Midwest
the
Fouxih
New
Stock
York,
Exchanges.
formerly for
was
I. M.
with
North
years
many
Edward D. Jones
Co.
&
profits
base period
the
adjective
The
mere
fact
Pheips, Feitn-Lehman
is
company
base
or
than 80%
of
profit doesn't
in
more
period
indicate excessive profit.
be excess by your statutory
definition, but not excessive from
the standpoint of public policy.
Chairman
Granik:
What is
ex¬
cessive?
Ma>s,
^
competition is
open
It
judgment
my
profit that is made in fair and
any
may
be
a
fair profit.
a
high profit, but it is
because it is high.
excessive
not
It indicates that that company
performed
a
more
valuable
has
serv¬
ice for the public than its compe¬
titors who
are
or
making low profits,
are
the
in
Senator
the
the
was
cally
word
Warren
by
me
"high."
specifi¬
stated very
G.
speech
his inaugural
Let
"excessive"
word
substitute
The issue
Harding in
President
as
of the United States when he said
he
a
time when
envision the
could
republic would take all of the
profits above normal, and during
the Hoover Administration a Spe¬
Commission
cial
Taxation
on
for
War reported that 95% of all prof¬
fying that
is
on
that
now
a
as
twice
I
lic
issued
chusetts
ally
inclusive,
0.80.%
1,
Oct.
are
at
for
The
in
the
to the program that
I would adhere
contemplated.
now
like to make
a
second
seri¬
to
1990
to
for
yield
from
maturities
inclusive, and at
ranging from 100 t©
are
legal Investments,
opinion of the bankers, for
savings
and
due
subsequent maturities.
bonds
the
Com¬
being offered to In¬
prices
dollar prices
and
bonds,
1951
1.70%
to
the
The,
from
from 1951 to 1981
98
by
1950 and
1
Massa¬
payment of prin¬
itself.
Oct.
on
various
pub¬
1%%
authorities
interest
and
dated
by
as to
monwealth
Bros,,
mating
$9,875,000
housing
guaranteed
cipal
of
banks
in
Connecticut
Massachusetts
and
are
interest
exempt from all present Federal
and Massachusetts income taxes.
The
names
of
the
issuing
au¬
thorities and the amount of bonds
are
tabulated here:
Agawam
size
the
Lehman
and
offering
both agreed that
program
should be
pay-as-you-go basis.
announced.
should
Co.
Authority
that view if the program were
to
&
grati¬
we are
defense
say
Fenn
both of New York, is
involved
Summaries
Mr. Terborgh: I think it is
I
syndicate headed by Phelps,
vestors
red.
O'Mahoney:
withdraw
and
A
bonds
Mr. Terborgh: In
feel
would
I think it does. I
LOUIS, Mo.—Ralph Moberly
has become
St.,
Moberly
making more
than it made during this
a
financed
which it
want to
M.
ficulties—
this
Mr. Terborgh:
process.
In those
ST
there will be dif¬
course
you
efficiency?
economy.
body. We
its above normal should be taken.
incentives.
that 85% excess profits tax
to keep
Ralph
We
with
it.
May I
suggestion? It is
another
make
his
take
in.
He
Of
war.
contained
was
that the total take
the corporate profits, that is
combination
the
is
the record shows
namely,
from
We
he
tender with the excess profits that
It may
limitation that
the
the
Selective Service
any way
Senator
in
of
emergency
business
excess
amendment that Senator Connally
and I have proposed
bears the
tax,
are
Profits
his life sometimes.
that
profits tax.
them-^-'sorrtfe-1
the
$4!/2
balance
take the young man from
we
take him.
I
out of
all dollars but out of the top
are
and
why anybody should
to maintain incentive.
costs down.
I'd rather look for new investors and people who don't want
Factor
I
destroying
lars, and
great
whatever
15-cent dollar is too small
a
they
circumstances I cannot understand
disagree with
that. I think that if you leave a
corporation only 15 cents out of
the dollar, you have gone very far
always,/
are
but I wouldn't waste much time trying to educate
thing for nothing.
Incentive
Terborgh:
Draft
under the
take
ing the incentive for economy and
What
only
to
billion
$16
Since
thing, Dr. Terborgh, is that
this
Law
contribute to inflation by destroy¬
speculative investment and then loses a large part of his principal.
New
The
in
war,
That
enough advantages in the average fund to more than make up
for the disadvantages of
do
ready stated.
Mr.
The
tax
There
sell anything—straight out in the open.
for
which
debt upon the
war
before Congress
now
manage¬
I don't believe that
tunate
Senator,
excess
Senator O'Mahoney: No, I
don't,
for the precise reason I have al¬
to
of what in
section
mention
may
vides
afford
Senator O'Mahoney: The unfor¬
.
other words don't try and
new
debt.
must
we
cannot
motivated.
so
tax de¬
profits
would destroy incentive?
same
expense
Granik:
your
toward
who goes out to sell trust shares and tries to ignore
the sales load is only looking for trouble.
He's the
fellow who is bound
v
an emergency
all-out war.
for
Chairman
from the detrimental as¬
selling. This happens in every line. Nothing
a
war
that is
But
We
very com¬
fact.
putting in, in a long pull situa¬
tion, with no end in sight, wnat is
essentially
away
We should cut down
credit.
revenue.
pile
old
by
it, that corporations
says
of great
to
Help to Sell Trust Shares
who shy
to
cut
We should cut down
loans.
consumer
raise
should
waste money rather than
it to the government in a time
That is the preferable alternative
you
are
We
expenditures
ment and I don't believe it is the
vice
There
bank
economy on
would
pay
Mr. Terborgh: I am not
Let the Prospectus
front.
Government.
excess
that it shouldn't be raised further.
By JOHN DUTTON
home
the
support
therefore to fight inflation. I want
to add just this one word: I think
those
who say, even when Mr.
many
than 50%.
Securities Salesman's Corner
and
non-defense
profits tax
would be to keep prices down and
me
flationary impact
are
cial
profits tax will fall
if you need $10 billion more,
have the alternative of tak¬
ing it by raising the regular cor¬
that
ones
the
all
cur¬
O'Mahoney: We should
inflation
by every possible
war
giving the greatest service to so¬
ciety, and the ones that ought to
expand their position in the mar¬
contribu¬
need
you
porations
you
in
partner
impri*-
consumption.
fight
fect in another way. I believe that
in general the most profitable cor¬
practical
Senator
C.
uneasy
a
rent
more,
stability in
stock. prices
with
the
common
threat
of
and the
emergency?
partner
Orleans,
Max Model
are
period
New
have the unpaid
we
contribute in taxes in this defense
Sept. 5.
This could at best make for
ward.
debt
questions
Harvey,
Co.,
be
rapidly moving, the
level of post-tax profits would be
high, the trend .'would be down¬
a
V.
&
Thus, while
1, in which we now
Phase No. 2, toward
even
we
exception.
Walter V. Harvey
savings bond program
war
paid
should
a
would
4
communism,
war
forced
no
financing it
basis.
pay-as-you-go
very
the fact that
debt of World War I
prove
a
Senator
General War Ill's economy should
beating as labor
a
general war,
a
event
while
even
on
bad
wouldf be
we
shortsighted if we took
long-term load like this and
didn't finance most of it from
Our Arms Program?
one
and Profits may come and go but
Taxes we always have with us.
heavy
a
damage potential, would take
as
How Shall We Finance
of the investment
time, capital, apart from
almost
on
future, the
dollar, it seems
is tax-exempt bonds. War
that
29
dent' and
needed
us,
add
to
12
page
to
clear that, this
seems
from
protection against
assured falling living standard
an
unfolded.
Finally, it
war
its
of
intermediate
the
most
probably
rules
new
Continued
of
way-that time against an inflation that may
very well never be experienced.
same
(1109)
Amount
._$
331,000
Dalton
194,000 '
Dedham
Fall
River
Fitchburg
804,000
1,936,000
1,615,009
Ipswich
272,000
Mattapoisett
120,000
Methuen
590,000
armament
Milford
744,000
growing it is essential to cut back
Nahant
point that has not been mentioned
here this evening, and that is that
with
a^ far
this
as
burden
of
possible all
expenditures
that
government!
aren't
the defense program.
vital to
I should like
Springfield
148,000
2,332,000 '
Westborough
Woburn
152,000
,
637,000
1
30
(1110)
The Commercial and Financial Chronicle
Continued from first page
New Deal and
cling to its more recent counterpart,
they who want controls, with or with¬
out much excuse. It is they who insist upon labor monop¬
olies. It is they who would put business into strait-jackets.
It is they who apparently have no conception of the true
spirit of the American system.
now
It is
But it would be
in
an
effort to
and of what is
to
page
some
seems
prove
the
Programs in Financial Industry
to think that the real dan¬
the
objectivity
and
accuracy
statistical
research
and
of
material
published by the brokerage firms.
By 1940, through theJ combined
that with all the
smooth-tongued politicians in the country
constantly talking about poverty as if it were something
for which the American system is responsible, and about
misery as if somehow the other fellow has put a plague
upon the sufferer, there is always the possibility of dema¬
gogues persuading the ignorant that the way to banish
these eyils is to adopt some system other than that which
has made us the envy of the world. If "we" must banish
poverty, abolish misery, and replace ignorance with wis¬
dom in order to save liberty, then we are
really in danger
—the more so if all this must be done by the politicians..
effort
the
of
Exchange
the
and
specific in
diagnosis of
a
little
and has been
our
large
wiped out.
portion
believed
However, a
the people still
of
there
mysterious
a
was
"they" who put prices
put
or
up
them down at their will.
It
is
to
hard
categorically
criticism was di¬
which
exactly
rected
the
at
But lest
product and which
directed at the package. It is
belief, however, that the vast
part of the criticism was directed
a
little
done in
some
the
and
package
not
the
at
reforms
numerous
the
National
regulation under the
new
Exchange
erected
to
Act
of
1934
during this decade of 1930
designed to
about the
Our firm
particularly
was
that had
went
further.
even
other survey
to find out
expense
cally and in
things about
wouldn't
truth about
our own
tell
a
take
prevented
do
worse
or
If
their
tremendous
hair
than
put a prompt end to
money, credit and banking.
They
down
learned
we
amount
and
using
by
we
had
this
information
before us, we sat down
sciously adopted
tions conform
that
we
run
the
We
wherever
would
our own
with
customers.
our
and
opera¬
wishes of
determined
humanly
our
con¬
set of policies
a
possible
business
customers wanted it
as
In
run.
our
Indeed, if
we
persist in
re¬
in fact
paid
in
be¬
on
what amounted to
on
commission
a
faith
was
whom many re¬
for disinterested advice were
lied
mission
basis.
The
method
of
public
com¬
the
payment,
advice
of
not
truly objective.
be
We
customers*
attacked
this
could
men
problem
di¬
executives,
on a flat salary, and
that to take the tempta¬
did
we
tion away from our people of ever
that
not
was
needs of
customers something
our
suited
the
for
best
The public also told us that they
did not appreciate brokerage em¬
public
a
promotion
the
fundamental
free-enterprise
telligently.
booklets, like the "How to"
that
is,
the
the
and
"How
"How
Sheet"
In¬
to
to
Read'
series,
a
I
distributed, have
objectives.
Those are
which
think have been
the
same
somewhat
in
broader
their
ap¬
proach.
To justify the existence of Wall
Street
and,' ;the financial
com¬
munity, it must make some con¬
tribution
the
to
economic
being of America.
to
back to
go
this
In
when
day
the
of
well-
In other words,
analogy,
my
Wall
good product.
a
pressure
continued
institution
groups,
existence
of
depend upon
public acceptance, it is absolutely
essential to give valuable service
any
the
to
may
We
economy.
must
know
how this economic service is per¬
formed;
the
to
customer.
our
the
of
Street must have
rectly by putting our customers'
men, whom we renamed account
ployees calling them
market
tips.
the
could
do
not
we
anything about—for
down
in
orice—we
would
endeavor to explain tbthe public
the customers why these in¬
and
evitable things occurred and
uncertainties
vestment
of the
involved
in
the
in¬
process.
or
They said that they
factual information, not
We
made it
that
rule
a
we
would not offer gratuitous advice,
but our independent research de¬
partment
would
available
wanted
to
continue
help
help
who
and
be
to
who
customers
asked
for
help.
we
must show
its value
whole, and
probably the most important of all
economy
the public
brokers
to feel
seemed
recommended
se¬
a
as
a
Very
.
briefly
would
like
to
its
show
value
indi¬
to
In other words, we must
put it into an attractive package.
That is what
lations
signed to do.
of
scious
have
I
should
the
be
de¬
acutely
am
fact
that
con¬
still
we
long, long
way to go, be¬
recent studies of the public
a
cause
attitude
are
in
one
sense
encour¬
in
another
depressing.
The
aging
and
rather
the
toward
has
dustry
since
good public re¬
a
program
the
public
securities in¬
somewhat
improved
Roper
sense
.
in 1939,
The com¬
survey
and
security and wanted to get rid of
it. So we made it a policy to dis¬
close the holdings of our firm or
bined activities of the Investment
of
ties
our
printed
We
partners in the securi¬
which
we
described
literature.
in
our
Incidentally,
have discovered when the in¬
formation is
available, few people
be interested in asking
Apparently, most people
interested in this information
to
seem
for
are
it.
I say "somewhat."
vestors
ered
and
also
told
us
they consid¬
the financial soundness
firm
of
one
the
in¬
most
of a*
important
considerations in selecting a firm
to handle their business.
•
This, coupled with
nation to take
as
our
determi¬
much of the mys¬
tery out ~ of the business as
sible, led us to publish each
pos¬
year
still
is
It
Finished
Not
that
true
.
basic
our
job of public education has barely
scratched
still
the
surface.
There
are
legions of people who don't
know
Stock
the difference
Exchange
There
yards.
otherwise
can't
are
the
between
the
and
stock¬
thousands
intelligent people
of their
of
who
the
the mys¬
terious "they" who put prices up
and down. There are even those,
old
out
get
hocus-pocus
already
know
great variety of the
of Secu¬
thing to improve public attitudes
toward the industry, but we have
a long way to go.
ment, and
a
America,
Dealers, and the Stock Ex¬
change, as'well as the activities of
individual brokerage and under¬
writing - firms have done some¬
Basic Job
prospective
of
rities
only when it is denied them.
Investors
Association
Bankers
the National Association
complete annual report, giving
not
only our balance-sheet sta¬
tistics, but also an income state¬
Wishes
I
must
curity only when they owned the
a
Making Business Conform to
Public
we
viduals.
attitude
Also
that
warn
risks and
advice
to offer
give them
up
tips.
wanted
■
where things occurred which
ways
tinkering with
salesmen
cause
cases
example, the inevitability of stocks
at the least kept within bounds, we could
reason
they lacked
brokerage industry
the
sales
a
From the sales promo¬
point of view, they are tools
help our customers invest in¬
Balance
one
accomplish
system.
charges.
The public told us, too, that the
in¬
to
tion
to
vest"
.
whose
available
of
economics
Our
any
When
what
poverty in the future is to be
spjpething
series,
the
tell
that method ourselves.
danger inherent in it
Once it is generally accepted as permanent,
shall not like.
our
shortcomings.
outsider, and
some
that
us
us
just too polite.
were
would
them beforehand
we
not like
which they did not understand.
customers
often in the
sowing in
cus¬
they had
companies
Public, relationswise,
they
intended to teach all who read
delighted when we finally
changed our policy about service
gratuitous
operations
own
our
customers did
our
an¬
our own
specifi¬
detail the
experience had shown
drop in the bucket. Merely
a fraction of a percent nearer
in a free market is hardly of
our
that
teach
industry booklets,
have received, a;re
and
job.
to
about the ihdifs-
were
Our
for some years and
more
greater
the money market and the credit structure of the
land
was dead
wrong long before that. We have pursued such
a course for so
long now that the
that
had
We had to go to an outside firm
to have that survey made because
a
the rewards of
We
conducted at
going
reap
changes
In fact, we
taken place.
The attitude of the Federal Government toward the
problems involved in financing itself has for a decade
and a half, or more, been dead
wrong. Its attitude toward
begin to
directly from the
us
the
get
manu¬
-
to tell the world about the
j
shall
con¬
develop a
public relations program designed
great importance in and of itself.
we
to
were
selling to
scious of this failure to
has been accomplished, even if the Administration
pres¬
daily.
public
sale.
designed to make
grows
tell the
product it had for
new
Reserve authorities did not this time
what it would have to
pay
Roper
despite the
itself had
vastly improved, the package
had been changed little, if any.
In other words, Wall Street did
not have a public relations pro¬
They
ently acquiesces, is hardly
to ask the
Treasury to pay
that the
me
by the recent behavior of the Treasury
long period of heavy defense expenditures,
if not actually
large scale war. We find the Administra¬
tion clinging to the idea that the Government must have
what money it wants as
nearly free of interest as a marketrigging Federal Reserve System can provide. It was a
disgraceful performance, and we are very happy that the
course,
began
reasoned that because of the
to
seems
gram
story
been annoyed
been
Point is given
But, of
been
survey
proved that
fact that the product
a
past merely bow to the politicians.
had
1940.
It
or
so
Of
Act of 1933 and the Securities and
specific.
as
the
markets.
then
we
the
to
ape.
'
not
merchandise,
venture
more
and
relations
more
eliminated those service
we
tomers who told
Association
of Securities Dealers to police
to this comment
in the face of
during
1930 to 1940.
from
years
over-the-counter
course,
As
costs,
publishing
public
designed
the loss
up
tial
like those you
gained in good will, and
we
enough to make
real
Exchange itself had intro¬
which
modern half-concealed
way.
cially,
hence increased the ousiness
do
own
but sell securities of corporations,
we
undertook
a
really substan¬
vestors.
eliminated all such charges
because whatever it cost finan¬
our
for in¬
come
brokerage services.
brokers
their
securities
we
in direct revenue.
ganized
Such permanent
large scale production will not be promoted by the simple
expedient of printing greenbacks, even if the printing is
more
cost
customers out of all proportion to
the actual financial
importance.
than
government auspices inde¬
pendent security dealers had or¬
Greenbacks Not the Way
Now let's be
while fully justified on
basis to the broker, annoyed
my
Uhder
go astray on
perform,
safekeeping of securi¬
was
the ten
the subject, let it be simply
stated that poverty never will be abolished
except by
continued improvement in per capita
production. To be
sure there
may be some question of the distribution of
income, but even the relatively enormous income of the
people of this country would not, if evenly distributed,
abolish poverty. Now the way to make certain that no one
really is in want is to create an atmosphere in which hard
work, productivity, and vigorous business can and will
flourish—flourish permanently (with
temporary ups and
downs, of course) not simply for a time to be followed by
widespread hardship and misery.
we
a
So
say
,
"objective" of the politicians, the memory
of man runneth not to the contrary. It is an ideal
which,
of course, no man now
living will ever see realized. The
task is monumental, to say the least, and promises to do
any such thing in the calculable future spring either from
careless politics or from deep
ignorance.
frequently
place to
and
Because
tries
The
an
vestment
charges,
been
duced
own
such as the
the
facture
had
concrete and
danger and of the
remedies available for its removal? We may say without
fear of successful contradiction that one of the gravest
dangers by which we are faced today is that which stems:
from the quacks who, through panaceas, would
actually
fasten poverty upon us permanently. The banishment of
poverty is a consummation most devoutly to be wished,
our
variety of
a
advertising
program
inform people of'the
to
as
the
at
more
brokers
public
investment process and to sell
firm
small miscellaneous services which
the
make
to
the
also tried to redesign
We embarked on a
we
planned
ties; con ecu oxi of dividends, the
carrying of inactive accounts, pro¬
viding investment advice. These
product.
not better be
charge customers for
and
what
package.
authorities, any hint of
manipulations of security prices
Federal
Danger From Panaceas
we
with
sustained
realization of their nature
these policy, de¬
primarily to im¬
to
product
our
conform
wanted,
gers come from poverty, ignorance and misery. We think
there are even greater dangers.r We must admit, though,
But had
addition
cisions designed
6
it
required to make ourselves secure against
Senator Lehman
them.
from
profitable, we are sure, to take
dangers to our system here at home,,
come
Thursday, September 21, 1950
.
In
Continued
more
brief note of the real
.
sheets, but no firm has ever pub¬
fusing to do so our fight against poverty, no matter what
lished an income statement.
;
its nature otherwise, is more or less certain to fail.
This report has
proved to be
And in how many other ways must the Fair Deal
one of the most effective devices
for telling the public how we op¬
change its course if it is to' make real haadway against
poverty! And none of them of the sort that Senator Leh-— erate and has a strong tendency
to break down the iron wall of ig¬
man and his confreres would
suggest! Talk of abolishing
norance
that has surrounded 4hb'
poverty hardly lies in the mouth of a Fair Dealer.
entire industry.
/
"
As We See It
the Fair Deal.
.
about
investors,
the
who
difference
and
a
heads
wouldn't
between
a
preferred stock if
discuss with you some of the spe¬ operating statistics of the firm.
cific things that we had to do to vsttOut annual
report in 1940 was
make our business conform with
the
first
ever
published
common
the wishes
A year ago the Federal Reserve
Board made a survey which shows
that
nnlv about 8%
of the DODU-
;by,
It
and
was
is
of the
public.
the habit in Wall
still
in
some
brokerage firm;
Street,
quarters, to
one
has
Other
and
followed
firms
do
to-date
our
publish
they met them walking down the
street.
a
no
example.
balance
Volume 172
Number 4944
..
.
The Commercial and Financial Chronicle
(1111)
lation
believe
funds
should
securities "
cent
per
for
a
in
their
invest
or
bonds
insurance
it
is
the
two
-
wisest
put his surplus funds
bank
ernment
in
Ninety
believe that
to
surplus
invested
market.
man
the
that
be
it
real
or
in
gov¬
estate
tress.
These figures are convinc¬
ing testimony to the job that still
must
be
the
the
we
problem
considering this
Wall
in; somewhat
Street
relations
general
would
perhaps
recognize that
relations
individual
on
conversations
study
that'
second
programs in
be
terms,
useful
job
our
it
if
of
we
public
Wall Street.
toward
eralized
rect
as
attitudes
bearing
failure
or
.
tion,
the
and
Do
they
Such gen¬
have
can
di¬
a
financial
Professor
Ricci-
of
peo¬
ple who seek employment in the
industry, and this general attitude
is of vital influence
want
to
repeat that
number
ployment in
that certainly
minds
It
young
men
very,
had
this
into
come
second
seek
em¬
industry,
and
desire
any
business.
major
In
aspect
to
fact,
this
of
industry's public relations has to
that specific problem.
do with
Who
are
how
and
ers
into
verted
they
can'
be
con¬
active customers
kept happy?
tial
potential custom¬
our
and
The so-called poten¬
customers
are
of necessity a
than those who ac¬
smaller group
do
the
individual
good job
is
of
our
young
act
men
or,
as
who actually take part in the in¬
vestment process
remind
today.
I want to
that only 8%
you
of the
people have invested their money
in; securities.
that by
the
So
if
several times,
tremendous
tential
increase
we
you can see
number
that
customers
of
are
po¬
This
of people
group
like
may
not
the crucial question.
crucial question is this:
Do
really
The
it
is
self
their
problem
Wall
of
this
What I
general
Street
our
that
is
within
mined
we must not forget
wonderful combination
this
out
time
by
the
for
year
training
the
being
first
a
because of the
and
train
and
so
far
removal
Perhaps
the
about
made
want
invest
to
American
in
their
own
money
industry?
business, that in
young
T don't
competitors if it
courage them to follow
the
all
underwriting
community
technicalities,
and
performs
brokerage
two
serv¬
The first job of the under¬
writing function is to accumulate
ices.
money from many reservoirs of
savings and channel the funds into
This, I submit, is the
heart of the capitalistic process.
industry.
•The second job, of course, is
provide
ready market
a
vestment
can
so
or
jo
the in¬
be shifted from
to another
industry
one
converted
cash.
back into
.
If
are
we
to
fulfill
either
of
these two components, there must
be
literally millions of people who
understand
this process well
have the faith in the
willing to
their savings* available to
enough
to
future of America to be
make
'The biggest part of this job can¬
be
not
accomplished
such
as
by
mass
advertising
and
radio programs.
must
it
oh
an
On the contrary,
accomplished almost
be
individual
basis,
such
as
learning of the prin¬
techniques of invest¬
you men are
ciples
run
have
into it had
in botany.
I
started
ber,
300
Ex¬
fellowships
to
members
to
New
and
study
come
the
to
securities
and
ment.
Of course, most
vestors will never have the oppor¬
we
thing they
to help advise in-
class
and
men
us
had
we
the
this
with
that
forget.
the
over
help them
difficult
who
everyone
pe¬
sells
is
Western
one
other training cen¬
That
is
the
Graduate
At 5:30 each
day, if you are ob¬
will notice a stream
servant, you
leaving
of
many
financial
houses and heading over back of
thp
offices
Trinity Church.
done
ing
particular job and
within
our
own
a
Dean Collins has
remarkable job in recruit¬
students
and
in
designing
a
program to meet the needs of the
financial community.
itself
Street
of
City.
U.
S. Delegate to' the United
Nations Security Council meeting*
in Paris in 1949 as
Military Gov¬
ernment expert on the Berlin cur¬
question, Mr. Warner re¬
signed earlier this year as assist¬
rency
ant
to
the
Director
of
Finance
Division, U. S. High Commission
for Germany. He had been con¬
nected with Military Government
for Germany and the
High Com¬
mission since his separation from
the
U.
Military Intelligence Branch,
Army, in 1946.
S.
Prior
to
his
Warner had
service,
war
been
associated
Mr.
with
several
investment firms, includ¬
ing Wertheim & Co. and J. Arthur
Warner and
of
Co.
He is
the American
member
a
Economic
Asso¬
ciation, the American Finance As¬
and
the
I wish Wall
could
take
more
Academy
of
F. Eiserstadt Offers
Standard Coil Com.
An
offering of 367,500 shares ol
Standard
Coil
Products
stock
common
(par $i)
share
per
made
was
offering
marks
distribution
holdings
who
all
up
of
of
to
on
the
of
Co., Inc..
at $11.5(
Sept.
Co., Inc.
first
the
shares and comprises
three
a
If
The
public
company'*,
part of the
officiak
top
this time have
ownec
the
company's outstanding
1,470,000 shares. Proceeds of the
sale will be received
by the sell¬
ing stockholders. The offering
was
oversubscribed.
Starting in 1935
of young men and women
Our
name,
York
European financial
by F. Eberstadt &
of the New York
some
own
New
problems.
as
a
small coils
producer, with a net worth of
$16,000 in
1940, Standard Coil
Products
is
the
now
manufacturer
of
leading
tuners
for tele¬
vision sets with six plants located
in
Chicago,
Los
Angeles
and
Bangor, Mich.
In the first half
1950, the company supplied"
this equipment for over 40% of
of
all
television
this
country.
include
and
schools that
commodity exchanges.
was
a
great
deal
of
doing a fine job
in equipping men for this indus¬
work
ers
tailed things
courses
We
of
now
permanent
going
are
have
are
at
a
internal
op¬
firm.
Association
try
current
and
has
sponsored
in cooperation with indus¬
and
colleges
that
has
training
is
the
substantially
in
as ' we
field that is
program
of
this
to
normal*
two
program
apprentices.' We
the
have
take
graduating
the/training and educational
as interesting as this
experiment you
now.
be
I
making right
are
hope that this
continued
two reasons.
and
electronic
ability
devices
tuners
radio receivers.
recently
and
for
.
for
The first, because it
in
perme¬
automobile'
The company ha*
started
production
O;
frequency
(I.F.)
intermediate
strips
in
used
television
provide
amplification
frequencies,
horizontal
Known
output
component
power
sets
of
are
of
supply
the
picture tube.
to
tc
inter¬
and
o'
transformers
"flybacks,"
as
transformers
program can
expanded
produced
mediate
However, nothing has happened
program
sets
Other products of the company
small
coils
for
various
been
well received.
a
'
Members
called
them
own
inasmuch
lengthened
years.
the
as
our
which
on
^different
*
his
in
Warner's firm will specialize
in consultative services connected
courage
School of Business Administration
Decem¬
women.
under
offices
Mr.
they had thorough training
There is
war—we
in
business
have them be¬
we
ter in Wall Street that I shouldn't
in
Class programs consisted
erations
firms, various associa¬
can
went
who started with
men
because
conduct of business, and such de„
tions and the Exchange do every¬
that
men
security analysis and portfolio try— the School of Business at
management, and, of course, we Harvard, Wharton, and Dartmouth
reviewed all the pertinent rules are giving courses, just to men¬
and
regulations
governing
the tion a few. The Investment Bank¬
have
feel the effects of them.
250
on
gone
Member
prospective in¬
so
almost nowhere, but it is a
start, and I hope this joint com¬
mittee is going to increase these
fellowships by a great deal larger
number.
We have just begun to
the
starts out.
but
Ger- "
for
financial consulting;
a
sociation
—
very
There
market
twenty-six fellow¬
the third year and
first
the
Government
Sept. 15 of
stock
York
have been
awarded, but
think of it—only twenty-six! This
is
year
eight
University which
industry do has long worked in very close cothe lines that operatioin with the Street and the
of
Military
practical review of money credit. That school is our post
banking, accounting practices, graduate training center for mem¬
a thorough
and detailed study of bers of this community.
Of course, there are many other
economics, and the operations of
a
at firsthand.
So far some
a
and
faculty
provides
or
first
firms in the Street.
end
specialists
firm.
which
education
for
the
of
bound to encounter when he first
to
interested
1945—we have trained
young
hired
by
Bankers, and the Association of
Security Dealers have all coop¬
erated
by establishing
a
joint
on
the
our
Out
whole
along
Warner, formerly
Division, Officef of
Political Science.
riod
that
not
months
some
more.
financially
pro¬
own,
vast number
men
a
salary. We
them to be of any
our
value for
and
months of classes and on-the-job
training. Classes were taught both
by
outside
experts
whom
we
Firms, the Exchange it¬
the Curb, the Investment
committee
our
them
many, announced the formation on
few months.
expect
cause
postwar program consisted of six
change
self,
is
a
to stick with them and
have started.
Since
dents.
Stock
more
something
community has been making a
real, but still small, effort to help
university teachers gain the kind
of first hand knowledge of finance
that they need if their courses are
to really be useful to their stu¬
of
about
the
that
they
friends.
or
paid
didn't
have 200
industry inaugu¬
training
programs
It
unless
an entirely differ¬
experience ourselves because
whole
care
having
our
to
go
through those classes, we have
only 45. In other words, we
en¬
anxious
am
much
am
we
I
themselves.
don't
I
think, however, that this
Association
formal
within
today, and I am
happy to be able to say that in the
last several years the
financial
The
the
rate
it
the
came
or
because
gram
ships
industry.
media
long
whether
will
show
oc¬
lost
of
accused
my
J.
Finance
—of
to
but I think it is true, and
I don't mind perhaps irking some
criticism is valid
Brokerage
of
who
men
majored in finance
Services of Underwriting and
Stripped
the
difference
no
be
can
Adolphe
with
they have been out, I
think, about a year and a quarter
ment,
ac¬
to
rich relatives
originally, and
I
have
of that sort.
not fit to go out
public. They didn't
a
classes
immodesty in making that state¬
of
who
imagine the
were
the
some
commis¬
a
must
program
was
or
is why
essence
on
we
we
money
to
and
the facts of finance.'
We have had
different program from
a
a
little.
very
ent
else.
anyone
theoretical
from
That in
men.
have
we
a
told to go out
can
that
on
quit after
couldn't have
we
willing to spend
were
feeling within the
was so
had
fi¬
permanent institution unless
a
financial community that univer¬
sity instruction
felt that
we
You
The result
is
of
basis.
know
are
gave
securities
meet
to
deter¬
matter
sell
They simply
along with that,
goes
interpolate for just
One mistake that the in¬
casualties
Then, there is also
important
that
do
manage their own finan¬
affairs intelligently.
That, I
whom
curred
continually put young
into it, and we have got
very
our
to
with
Some
sion
have to
nance
has been
primarily
past
pro¬
we
commission
a
men were
and
a
blood
University of Ver¬
mont. I think you gentlemen here
are making some real history.
In
fact, I know you are, and I hope
this program is going to be the
first of a permanent class of this
type.
in
that
up
un¬
on.
training.
the larg¬
future
firm
our
to train them.
the
University
that
the
the willingness of
on
Then the
my
going to
permanent institution, and if
it is to be a permanent
institution,
be
course,
very
is
reason
for
is
they expected to be
salesmen and to whom they gave
few weeks or a month or so of
the great¬
are
candidates
a
complete
are
we
needs
our
of
build
can
erans
of
center
in
courses
dustry made after the war was in
employing a number of young vet¬
al¬
York
with which,
all familiar. It
active
simply
minute.
Finance
are
before,
JMtlpheJ. Waraer<
Opens is Consultant
compensation
straight commission basis.
a
I want to
in¬
on
The
business to live
formal
New
quickie
selection
til he
within the firm. I suppose
planning
we
Of
the
really
how
on
the student to finance himself
on
the
a
program is the most
Another
for jobs in the fi¬
industry and the training
actually going on there
the financial
community
itself.
the
by
carried
by
most
on
The
est.
people
nancial
II, carried
was
you
the
est, and
universities around the country to
equip
of
than
based
From
perhaps because
by that is the train¬
being offered in our
is
still
grams
mean
that
is
help
better
training in the community.
Several
firms,
including
own, have instituted training
training
both in terms of training for Wall
Street and training in Wall Street.
ing
firms.
of course,
Training
discuss
must
will
even
spasmodically
Institute
is
Street
an
War
standpoint, it
most' entirely
number
come.
We
World
dividual
from
activities
and
until the end of the war,
was
that' is
that the leaders of the future must
Wall
similar
universities do
said
submit, is just another way of say¬
ing that we need more education
called
fine
fellowships
we
op¬
Unfortunately, most of the sotraining programs that are
being conducted now are little
for
doing-a
I
relations job here in
Wall Street is to teach people what
Salesmanship
Training within Wall Street it¬
tual practicalities of the securities
management to
of propaganda as a'device*
selling a phony product. Edu¬
cation, on the other hand, is the
for
cial
own
adminis¬
business
joint
Institute of Fi¬
"Quickie Courses" in'
on
joint committee,
been
facilities
erating procedure.
job in the future.
Street's repu¬
course,
training
visiting fellows.
activity
class
two
or
offering on-theand instructions in
salesmanship.
our
will
who
they know enough about the in¬
vestment
process and
enough
investment
con¬
believe
the firm
more
rather
they
of
these
other
in¬
ahead, and, of
or
criticized
dislike Wall Street, but that is
or
think
have
the details of the firm's
tremendous
a
the
the
have
is
It
of
job
this program
the
New York
nance,
job of equipping young men
this industry. I hope and believe1
re¬
ruin Wall
avail¬
able to this industry.
schools
tration
customers'
tried
number
our
trained
are
or
of these two systems that is
the
part
of the
I
who
men
association they
without
call them, account
we
executives.
make
who
men
salesmen
as
in
gained
the
of senior executives but with
crop
total
times
Even
conviction
future
real
students.
around
that
tually determine the political at¬
titude toward the industry.
Our
potential
customers,
I
believe,
several
also
active
have had with the
man
in his
personal
my
their
amount from the
dustry rests not with the present
few
very
been
have
public
or
the
brought to our
forcefully
in
the
because
the
make
have
lations with the customer.
was
very
to
more
the public
tation in the years
it influ¬
who
the
1930s
the
how many
do business with.
the
ences
on
with
benefit to
great
also believe that all the
high-powered adver¬
tising, all the beautiful literature,
all the high-flown speeches can¬
not give Wall Street a good
public
to
I
contact
in
who
All of the
that
fellowships convinces me
they have gained an insight
that
like it than anyone else
in the world.
the
we
do
dislike
It
people
in
a
number
firms
programs,
but I
there are only one
As
doesn't
the
other
ducted
had
public
people who work in the industry.
influences
have
fully justified in tyingf into this business that will be of
was
of
public esteem
opprobrium that is attached to
I
we
built
ardi
if
It determines the
or
Several
are
class
learning and searching
reputation
this
that
contacts
deals
beginning.
other
truth.
that
institu¬
the
In "our
big
think
public
attitudes
general nature determine the po¬
litical atmosphere in which the
institution functions."
how
see
do
for
I
success
any/
to
to
process for
but
the future
on
of
financial
whole.
a
don't they?
The
what
need
more
training within this
'sought * industry, and we need it badly.
In the last analysis
mostly veterans betweeh the* ages
public rela¬
of 27 and 33.
tions is education. We in America
any
really serious programs now un¬
derway. One of these programs is
can
or
versations
department. After
decide
we
that
of
when discussing public rela¬
tions, is the attitude of the gen¬
public
on
every
worked out from the
animals,
community
us
us
research
years
with them.
these
different
The individual
community
in and sit in with
two
fellows
it may help inspire more
people right here to develop really
modern and effective
programs of
training within their firms. We
with the professors who have held
entirely
comes
distinct
the
good idea in itself, but I also
a
think
lations and training programs are
the
rather
have made
we
let
to
our
is
two
them together.
two
firm
own
phase of our business.
They sit in on confidential con¬
appear to
that Wall Street's public re¬
you
The first aspect, and the
people most frequently think
like
and
asked to talk to you about—
been
specific job and rotate them
through other jobs, finally ending
in
practice
come
part of the program which I have
training
our
a
of 22 years. We put them in
age
some
secur¬
business.
In
it
aspects.
eral
ities
with individual representatives of
This
New York
thing interesting about the
they hold
community.
brings me to' tne
to
come
and to enable them to find
every¬
and
one
has
structors who
At first blush it may
are
of
enjoying. For
they will have to
you are
part
the financial
done.
While
most
depend
or
put it under the mat¬
or
tunity that
31
an
these
assemblec'
high-voltage
the
television
32
The Commercial and Financial Chronicle
;(1112)
Continued
from
section
around
is
8
page
primarily to
due
First,
ties?
Suggested Answer: In view of
discussion by Dr. Bogen of
the
securities and the
various types of
will
bank
your
principle of not leav¬
of government se¬
field
the
fully adequate to
for greater credit risks,
market risks, and de¬
creased
marketability.
We .will
also assume that those differen¬
tials may not be adequate at a
is
particular time and therefore will
iimit our present
discussion to
Government issues.
S.
U.
facing the
This, then, leaves us
major problem of a desirable
maturity distribution.
Liquidity
lias been cared for by the Sec¬
therefore
and
Reserve
ondary
bank has a right to seek in
Investment Account
its
residual
the
objective of reasonable income
principal.
However, the search for reason¬
consistent with safety of
able income should be
a
regarded as
long-range, rather than a
income
maximum
moment,
short-
If you were to seek
quest.
range,
tiveness of the various issues.-
Question: Your mention of oc¬
as
into
led
be
might
you
of any one
from
maturity
one
to
group
limited
is it possible in the
how
and
time available to me to study
an
question is by no means
simple, but it is perhaps easier
than it first appears.
It is found
in a continuing examination of,
and
familiarity with, the yield
curve of government issues eligi¬
ble for commercial bank purchase.
You already know that a yield
curve is simply a graphic presen¬
tation of the yields prevailing as
of any particular date.
By plot¬
ting yields on the vertical line
to matur¬
and the number of years
ity
an
oil
the horizontal line, you get
immediate answer to the ques¬
whether
of
tion
are
you
being
yield curves is by
actual illustration.
The chart
the
of
use
hold shows yields pre¬
vailing on selected bank-eligible
up in yield in the event those bonds issues as of three dates. The yields
declined. Therefore, the objective in
question are net after taxes to
in the Investment Account is to a bank in the 38% tax bracket
seek reasonable or relatively good
in
1947
and
an
assumed
45%
which you
next
bracket
net
These
year.
yields have been used deliberately
in order to show both fully tax¬
at able issues and the partially taxalmost all stages of the market
exempt issues on a comparable
should represent some degree of basis.
"hedged" position.
By this we
I suggest that we look first at
mean some intermediate or longerthe curve prevailing approximate¬
term bonds for their immediate
ly three years ago on Oct. 1, 1947.
higher return and some relatively This date represented the approxi¬
short-term bonds set aside as re¬ mate
high of market prices In that
serve
purchasing power in the year just preceding the substantial
event of lower bond prices and decline in
prices culminating in
higher bond yields.
the
Dec.
24
lowering of Fed¬
eral
Reserve
pegs.
The
yield
Question: Assuming the desir¬
Investment
the
that
of
ability
does
how
Account
position,
"hedged"
a
about attaining
go
one
Oct.
of
curve
be
can
char¬
its rel¬
speak of
by
When
ative flatness.
it?
1
primarily
acterized
we
refer
in¬
creases only gradually and mod¬
would be through the use of spaced
erately as maturities are extended.
maturities, by which we mean For example, on Oct. 1, 1947, a
dividing the Investment Account one-year certificate yielded .60%
into fairly even amounts maturing net or
approximately .97% gross,
rather regularly over some period while the
2V4S of 59/56 (item No.
such as perhaps
10 or even 15 6) yielded 1% net or 1.61% gross
a
Suggested Answer:
Perhaps the
years.
the
senting
merit
of
repre¬
constant hedge
in the
has
least
a
like
mechanical devices, it has its
account.
most
On the other hand,
One
limitations.
from
the
failure
to
Department
make
such
possible.
know
all
a
too
results
of these
of the
Treasury
provide issues to
pattern
other
In
intermediate
well
years
buying
of
words,
certain
that
are
you
entirely
devoid of taxable issues.
second
The
yield
the
to
From
time
to
time
vari¬
ous reasons become more attrac¬
tive than
others, and naturally
certain maturity sectors for
would like to take advantage
-of such out-of-line situations when
they occur.
y
Thus
certificate at
.97%
to a
nine-year call date at 1.61% in¬
volved a gain of only 64 basis
points.
Compare that with the
relationship existing on the war¬
time financing pattern when the
year
certificate rate
% of 1% and
was
the intermediate 8-10
yielded 2%.
increase
of
almost twice
be
against the spaced maturity
theory is that such an approach
may result in too little flexibility
in adjusting to changed market
conditions.
approximate nine-year call
a move from a one-
an
date.
year
bonds
This represented an
112 basis points or
as
much
as
in Octo¬
ber, 1947.
reservation
cited
you
we
curve,
which,
on
one
for
approach
orthodox
rather
This
at
flat
relatively
to
Certainly all of
the
end
of
us
so
you
I thought it
to look next at
yield curve; which
at that time, keeping in
cidentally,
which
short
at
took
as
the
prevailed
mind, in¬
the
drastic
change
place in a period as
three months.
end
of
1947
Here
yield
net
a
had
The
curve,
is notable not
for general flatness, but rather for
steepness out to the intermediate
but to
what
examina¬
purposes,
what has happened and
can
happen.
Behind
tion there also lies
are
our
funda¬
more
a
This is to bring
flat curve when
purpose.
visually why
rates
a
low should act
as
note
a
of caution since it tells us that we
poorly com¬
material exten¬
being relatively
are
pensated for
any
sion of maturity.
As.
far
yields
rise
intermediate-term
as
further
some
continues
they could
concerned,
are
Federal
the
if
short rate.
raise the
to
Fundamentally,
Thursday, September 21, 1950
.
cretely by commenting on a par¬
ticular issue such as "bank 2%s"?
Yes, but in
Suggested Answer:
doing so it is necessary to make
some assumption as
to the basic
level
future
of
suggest that
tion
that
long
lor
that
to
1 Va %
of
and
year
to
the
on
for ineligible
premise
the
examine
continue
the short end in
2¥2 %
at
On
I
rates.
assump¬
an
range
one
end
bonds.
use
on
general
1%%
interest
will
rates
be "ancnored"
the
-
we
points
can
we
and
for
"bank 2y2S."
against the
Against the issue musi be cited
the following factors. In spite of
its
price decline this week, it con¬
could be vulnerable to
ceivably
decline
further
either
continuation of
due
to
a
rising bank loans
however, I am
may have to post¬
or to
an
increase in required re¬
serves.
Its present
price spread
higher inter¬
against Victory 2V2s is historically
mediate yield curve until nearer
on
the high side, though not as
1952.
great as last week. It admittedly
Question: Why did you mention can be vulnerable in 1952 when it
1952 as a time when we might meets the competition of newly
possibly see a change in the yield eligible issues, all of which are
shorter.
But
curve of intermediate maturities?
perhaps the yield
afraid that
we
hopes of
a
Suggested
There
Answer:
three
equivalent to an increase in
gross yield of 1.13% in a threemonths' period. Furthermore, the
bond at the end of 1947 was call¬
are
the
provides
curve
basis
70
telling
most
against the. long
argument of all
At the present
is
and for that call
able in 71/4 years
yielded materially more than
"bank 2V2s" with
date
so-called
the
call date.
almost 20 years to
I am
perfectly willing to admit that the
situation of the 2%% issue at that
time was unusual and that the
yield
for very long.
However, since it
does represent an actual illustra¬
at
stay
not
did
issue
that
it serves
tion from the recent past,
out the point which I
makel This is, namely,
bring
to
wish
to
of yield curves
should look for the point, if
any,
where the curve starts to
bend, since that is usually the
point of greatest attractiveness for
purchase. The reasoning behind
this statement is very simple.
If
that in your study
extend your maturity out to
or
issues which show
you
issue
the
a
steep rise in yield, you are
ting reasonable
get¬
compensation for
lengthening process; beyond
the point where the curve bends,
or in a generally flat curve, you
are
getting relatively poor com¬
the
maturity
pensation for your extra
risk.
to
Just
complete our examina¬
hold,
attention to the
tion of the chart which you
I
call
now
your
yield curve of a recent date, Sept.
11, 1950. You will note that this
curve is fairly
similar in pattern
to the curve prevailing on Oct.
net
is
even
present
the
However,
1947.
1,
curve
flatter and at lower
yields than the curve prevail¬
ing three years ago.
4
t
This is due to three factors; v;
has reduced net
probably
rate
1952, however, that amount will
be
addition
yields on all ma¬
$13%
than
bil¬
prospect of further large ad¬
ditions in 1953 and 1954. We have
existing intermediates result
from the scarcity factor in that
increased flatness of
is accentuated
since one-year securities now yield
about 1%% gross, while in 1947
that when large quan¬
believe
to
the
involves
factor
second
A
large volume of maturities which
will fall due in 1952 and succeed¬
ing years, including both market¬
able
bonds
issues such
The
the Series E bonds.
weight of the refunding
mere
problem
non-marketable
and
as
the Treasury
cause
may
Department to price its offerings
somewhat
As
third
a
bring
generously.
more
another
obviously
to
us
There- is
election.
no
will have a
change
of
administration
and
equally no certainty that such a
change, if it occurred, would re¬
that
certainty
sult
in
we
interest
higher
rates.
However, investors in 1948 seemed
to think that
a
might not be
to
as
firmly committed
policy
rate
interest
low
a
the
administration
new
as
administration, and
have
some
psy¬
chological effect on 1952 markets.
present
this
might
I have given you my reasons
for
1952 but we should
admit in all humility;'that no one
knows how much,, weight to give
mentioning
the
possibilities ^inherent
in
As a practical com¬
however, it might be
well to keep the year 1952 in the
year.
of
forefront
yields in intermediate and
have remained ap¬
proximately the same. This phe¬
nomenon
is directly traceable to
the
Treasury
simply
starved
That is,
has
Department
the
intermediate
section of the market by not offer¬
any
bond beyond five years.
Question: Your chart shows that
the
was
by
a
in
of
October, 1947,
followed within three months
flat
curve
sharp drop in bond prices and
much steeper curve, especially
a
the
intermediate sector.
the present curve
that of Oct.
is
so
Since
similar to
might ex¬
pect a similar decline in bond
prices in the near future?
we
ex¬
is
years
natural road block to any great
enthusiasm for
In
favor
purchase.
of
issue
the
be
can
cited the fact that it is the
high¬
est-yielding
that
and
it
give it the benefit of comparison
alternatives.
other
with
alternative
As
bond callable in 1952 will
one
in
investment
an
a
produce
a
gross yield of about 1%%.
In
comparison the "bank 2V2s" over
this same
two-year period will
provide
higher
somewhat
a
in¬
after allowing for amortiza¬
come
half
tion of approximately
must also
point.
a
remembered
be
that
saving
probably
25%
45% of that loss.
or
three
the
gether
equal
either
to
Add to¬
factors
of
in¬
creased
yield, amortization and
tax saving.
If the tax saving is
figured at 45%, these three factors
would
"bank
allow
cline about 1%
result
21//2S"
de¬
to
points in the next
and still produce a net
two years
approximately equal to the
of investing at 1% %
alternative
If
gross.
declined l7/s
in 1952, its
issue
the
points to about
102%
yield at that time to its call date
in
1967
ing
would
be
approximately
Thus certain banks need¬
2.30%.
income
current
logically decide to
badly
hold,
may
even
or
to buy, the "bank 2V2S" if in their
judgment the issue has a good
chance
of
selling
at
above
or
102% in 1952.
thinking and to
plan tentatively to let the passage
of
time
give
us
a
relatively
plication from
the present situation suggests con¬
if
centration in
higher
this
at
point
I
might say that the date chosen
by your Committee for this meet¬
ing
has caused me no end of
anguish because of market
mental
gyrations
One
knows,
were
the
of
week
my
ago,
toward
bearish attitude.
I
feel
few
past
Dr.
as
subsequent
slanted
a
days.
Nadler
remarks
somewhat
Today, however,
that such bearishness must
be distinctly modified
in view of
the substantial decline in
eligible
issues.)
Question:
You said earlier that
a
flat
a
signal for caution.
yield
express
curve
your
Question:
Do
I
gather
should
feeling
act
Would
more
relatively short-term
Suggested Answer: By implica¬
be
answer
might
"yes" for the following several
reasons:
Historically the recent yield
(1)
curve
has
been about
uninviting as it has
period of low rates.
(2)
We hope for
pattern of the
(3)
The
thorities
a
curve
Federal
are
as
ever
flat and
been in
a
change in the
in 1952.
Reserve
au¬
currently engaged in
allowing short-term rates to rise
and
we
cannot
know
in
advance
the goal which they may have
mind
you
im¬
securities?
for
as
con¬
by
remarks that
your
tion the theoretical
(Parenthetically,
1,1947, should I gather
by implication that
for
1%
of
our
vantage of them.
increased,
debt management policy.
%
tending one's call date 15
a
will sale two years hence at a loss from
national amortized cost would create a tax
longer bonds
have
field
Such negligible compen¬
1952
factor,
gross
short-term
in the
yields
gross
1952.
an
sation of about
It
position in 1952. Then
intermediate yields do
materialize, our respective banks
will be in a position to take ad¬
While
in
thousand per
issue callable
per
short-term
they yielded only about 1%.
(3)
than
eligible government
provides
a
hedge
tities of intermediate maturities against a continuation of low in¬
terest rates.
Furthermore, while
become
eligible
and
eliminate
scarcity, you will see a stiffening admitting the possible vulnerabil¬
ity of this issue in 1952, one must
of intermediate yields.
Therefore, it seems logical
sector.
promise,
The
$4
more
of
that
present curve
only
year
argued that the present low yields
ately greater effect on long ma¬
(2)
more
the
to
the
the
newly eligible issues with
lion of
turities, but has had a proportion¬
turities.
of
with
doubled
than
more
.
taxr>rate!
assumed 45%
An
(1)
of which the first
reasons,
eligible issue. That curve tells us
the most important. that this issue due in 22 and call¬
time there are less able in 17
years provides a net
than $111/2 billion of bank-eligible
income after an assumed 45% tax
bonds due beyond five years.
In
is
you
well remem¬
the
forecasting
see
points from 1.05% to 1.75%. That
70 basis point increase in net yield
prices just before
1947,
might interest
of
in
months
three
in
increased
ing
ber the drop in
issue
of
period
commonly accepted approach
most
curve
Item
5.
which
1955,
of
your
the
at
looking
31, 1947, one is immediately
by the outstanding attrac¬
tiveness of an issue such as the
struck
was
an
just for the moment
but over a period of years. From
this definition it is easy to see
Still
examined
have
We
these yield curves of the past, not
for
pone our
Dec.
2%s
low-yielding
not
this accounts for the
very sharp increase in yield in the
four
longest
partially exempts
represented on the chart by Items
and
issues,
emphasis are desirable?
of
long-term bonds with no chance
of averaging down in price and
of
the
mentioned was not
you
intentional.
mental
shifts of
find yourself
these
into
income
.
periods but the particular im¬
plication
out
whether and when such
Suggested Answer: The answer
two
the
yield
are
certain
tween October and the end of 1947
to know
purchase of nothing but long- relatively well or relatively poorly
term
bonds
at
relatively high compensated in yield by an exten¬
prices and low yields. You would sion of your maturities from one
have obtained the maximum yield
maturity group to another.
as of the date of purchase.
Later,
Probably the best explanation
locked
Reserve
re¬
prices of eligible
ly above par. This resulted in a
proportionately greater change in
the yield of intermediate issues
than
in the yield even of the
longer issues.
For example, be¬
an¬
the
however, you might
Federal
emphasis 5, 7. 8 and 9.
our
other sounds rather intriguing, but
to
one
your
to another as market con¬
ditions alter the relative attrac¬
group
com-, casionally! shifting
pensate
greater
factors.
2L/4S of 59/56 in¬
jective would be a hedged position creased 47 gross basis points, while
including at all times some short the yield of the much longer "bank
and some longer maturities.
The 2V2S" of 72/67 increased only 31
second objective would be a flex¬ gross basis points.
Secondly, you
ibility of approach. This involves will remember that the Federal
a willingness to shift some degree
Reserve did not lend its support
of emphasis from
one
maturity at all to the partially tax-exempt
investment
differential- in
the
unless
yield
a
other
for
curities
media
that
assume
adopts the
ing
Instead
problem.
the
of
phases
we
will not spend addi¬
on
those particular
we
time
tional
Mr.
by
taxation
of
discussion
Policy
general philosophy
of maturities might well incorpo¬
rate two objectives. The first ob¬
Therefore
Suggested Answer:
There
similarities
between
This
years.
two
taxable issues to levels only slight¬
Investment
suggestions with regard to maturi¬
the
seven
duced the market
Building-Dp Bank
Schapiro,
.
,
example.
the
one-year
rate,
in
for
Their goal, in turn, may
well be dependent upon the trend
Volume 172
of
Number 4944
.
..
commodity prices and of bank
Continued
loans.
(4)
Selling
exerted
would
pressure
the
on
market
event
required reserves
further powers to
and
serves are
the
The State of Trade and Industry
raised
raise
re¬
asked and granted.
The practical
answer,
Food
5
page
be
in
are
from
the
the economy under
granted by the Defense Production Act of 1950.
government
the powers
however,
its
in
gradual control
over
important factors
of
the
Theoretical
ledger:
(1)
The
It is natural to want to hold
earnings through retention or
purchase
of
intermediate
and
steel
a
decline in 12 weeks.
The latest figure marks a
the $5.85
decline of the past week.
Two
wait
newly
is quite a period
chance to
buy
years
for
the
eligible
intermediates
at
$143
banking
billion
change
the
of
bonds
could
complexion
the
of
itself
and
business
loans
its present
tive tightness.
be
not
from
bills
bottom
able
find
in
ourselves,
large
Producers
the
dilemma
we
might
conclusions
It
attention
the
needs
than
to
be
of
sum
well
the
to
tnis
of
up
give
the
and
growing in volume and ton¬
are
on
However, the tonnages
to
American
The
being sold in the gray market for $360
are
top of $260
a
ton only three months ago.
small and deliveries
are
Iron
a
this week
Institute announced
Steel
and
not reliable.
are
that the operating rate of steel companies having
an
for the
than
it
needs
mar¬
maturity shorter
be.
to
Therefore,
theoretically should be
ago,
portunities to do
ing.
In
should
however,
practice,
ening
we
sonable
increase
moment
in
for by
a
maintain
current
that
afford
will
earnings.
The
relief
some
us
Cou¬
It
from
through
suggestions
short
our
general
to
as
but important suggestion
endeavor
Loadings of
to
emphasize
problems.
think
included
both
revenue
the
week's
we
Auto
distributed
by
the
electric
the corresponding period two years ago.
freight for the week ended Sept. 9, 1950,
Labor
Day holiday, totaled
total
represented
4.8% under the comparable period of 1948.
"Ward's
to
of 151,606
motor
Automotive
(revised) units and 159,493 units
"Ward's" said that there
and
Reports"
the
past
week,
vehicle
threat
of
disruptions
are
at
no
a year ago.
from
change
will
time. Those changes
the
affect
to
suppliers'
plants
hangs
over
pro¬
cars
the pattern
Each of
us
6,639
in
to
the
needs of his
bank
and
conservative
adapted
individual
the
hedged
sense
in
of
being
maturity.
Commercial
also
in our think¬
that
advantage
our
of
banks may
new
take-,
conditions
they arise.
30
as
continued
prices
sharp
advance
with
years.
1 forecast of the Department of Agriculture placed
The Sept.
production at 9,882,000 bales.
This represents a decrease
last
their
41-cent mark for the first time
and
16,128,000,
year's
of 6,246,000 bales, or 38.7%, from
compares
with
a
10-year
average
of
II,599,000 bales.
Consumption of cotton for the four-week August period, as
estimated by the New York Cotton
Exchange, totaled 815,000 bales,
against 611,000 in the preceding four-week period.
as
Trade Volume Shows Moderate Rise Due to Seasonal
Factors
period ended
spent moderately more money in the
consumers
Wednesday of last week than during the previous
on
week; among the factors deemed responsible were wide
promo¬
weather, and the return of a six-day shopping
week, states Dun & Bradstreet, Inc., in its current summary of
trade.
Over-all dollar volume for retail trade was moderately
tions,
seasonal
period
above the level of the comparable
There
was
noticeable
a
last week,
apparel
as
in
rise
a year ago.
buying of
the
many
articles
shoppers thronged to department stores
and specialty shops.
The amount of coats, suits and accessories sold was consider¬
Responding favorably to largeback-to-school wear for children, lingerie
handbags for women, and lounging apparel and footwear for.
ably larger than that of a year ago.
scale
and
promotions
were
total
volume
of
food
bought during the week
increased
slightly; dollar sales were slightly above those of last year.
Much of the rise came about through price changes, as unit volume
virtually steady.
In some vicinities fresh produce was in
demand, although shoppers' requests for many canned
generally high level.
was
decreased
and frozen foods were at a
The
the
with
week
figure for
a
goods rose moderately
markedly above last year's
purchasing of durable
consumer
past
volume
dollar
number of items.
Washing machines, vacuum cleaners and similar large appli¬
ances were in steadily increasing demand,
as were automobiles.
The interest in furniture and floor-coverings was somewhat desul¬
the call for small
while
tory,
house-furnishings
limited in
was
scattered localities.
Total retail dollar volume in the period ended
of last week
on
Wednesday
estimated to be from 4 to 8% above a year ago.
was
centages:
New
to
+7;
+9.
Wholesale
ordering
was
virtually
+2 to
-f6; East
+'3
-j-5
unchanged
last
week
as
buyer resistance to upward price adjustments continued in regard
to some items. Total order volume remained moderately above the
level for the similar week in
1949.
The number of buyers attend¬
slightly.
Department store sales on a country-wide basis, as taken from
the Federal Reserve Board's index for the week ended Sept. 9,
5%
from the like period of last year. An increase of
recorded for the previous week from that of a year ago.
the four weeks ended Sept. 9, 1950, sales showed a rise of
and
industrial
failures
rose
to
165
was
For
from the corresponding period a year ago and for the year
10%
to date
weather
Post-Holiday Week
according to Dun & Bradstreet, Inc.
were lower than last year when
185
in
the
week
week,
Despite this rise casualties
concerns succumbed; how¬
they remained considerably above the 84 which occurred in
of 1948. Continuing below the prewar level,
failures were 38% less than the 269 recorded in the similar week
"
registered
an
advance of 4%.
and
by
the observance of religious
holidays.
According to the Federal Reserve Board's index, department
store
sales
in
New
York City for the weekly period
1950, advanced 1% from the like
ceding week
of
1949.
the comparable week
of 1939.
+4 to
Pacific Coast
and
+8; and Southwest
Northwest
and
England, Midwest,
South
Retail trade in New York the past week was retarded by wet
14 from 145 in the previous holiday-shortened
ever,
ing so
was
and 2,469 trucks built in Canada.
States, output in the United States was 144,271
ended Sept.
'
cultivate flexibility
current week
Business Failures Rise in
properly
Let's
in
units, and in the like week of last year, 152,228 units.
try to maintain constantly a port¬
folio
cars
output for the
For the United
will
cotton
and
year
1950, rose 8%
made up of 150,497
and 27,634 trucks built in the United States and a total of
Total
naturally will
shape and
of the yield curve.
time
of 3,377,790,000 bushels, and a 10-year average
The total wheat crop was estimated at
crop
ing various markets increased very
signs of faltering demand, but
duction.
yields
Sept. I report, showed
estimate of 1950 corn,
its
2,900,932,000 bushels.
Domestic
to
production in the United States and
of 187,239 units, compared with the previous week's total
Canada
that
an
Output Approaches Near Peak Performance
According
combined
have
conditions
general
cars, or
flexi¬
We
in
Regional estimates varied from last year's level by these per¬
37,735
in terms of
today
of
day.
the present situation and outlook.
But
energy
751,276 cars, ac¬
cording to the Association of American Railroads, a decrease of
101,045 cars, or 11.9% below the preceding week, due to the holi¬
brief
that
reduction
yield of 3,162,638,000 bushels compares with last
The indicated
420,574,000 kwh. higher than the figure reported for the
was
which
thinking about these
our
to
electrical
Carloadings Adversely Affected by Labor Day Holiday
and
a
expected
very
I
invest¬
Yes,
than
men.
increase of 127,314 cars, or
20.4% above the corresponding week in 1949, but a decrease of
Suggested Answer:
investment
capacity,
new
Output Resumes Forward Trend
of
amount
The
tried
on
of the output reported for
policy?
bility in
on
and
that
and
curve
remained slow.
production.
to
previous week, 869,986,000 kwh., or 15.6% above the total output
for the week ended Sept. 17, 1949, and 1,022,854,000 kwh. in excess
Question: Have you any further
all
A month ago, based
compared
stitute.
short-intermediate holdings.
ment
based
ago.
industry,
entire
light and power industry for the week ended Sept. 16, was esti¬
mated at 6,449,101,000 kwh., according to the Edison Electric In¬
earlier
or
export business in
processors
Department of Agriculture in its
The
take advantage of that sit¬
uation
is equivalent to 1,936,400 tons of
the
production amounted to 1,747,400 tons;
the smaller capacity then prevailing, it stood
90.6%
Electric
only hope
can
we
present yield
we can
week
a
for
can
that the situation in'1952
the
castings
86.2% and 1,589,100 tons.
At the
intermediate and longer bonds to
pled with
The
corn but demand for
Wheat prices trended
easier, reflecting large stocks in mills and elevators.
moderate
a
from
corn
smaller
a
of
operating rate
and
was
year ago,
at
hedge our posi¬
tions by holding or buying enough
we
was
somewhat
rea¬
a
yield.
rate
the
such length¬
when the added
times
at
week's
ingots
1,921,000 tons
try to attain
risk is compensated
cash
1950, compared to 99.6% a week
rise of 0.8 point.
or a
steel
lengthen¬
some
week beginning Sept. 18,
This
tie look out for attractive op¬
on
There
The nation's
hold
us
grains freely and to the backwardness of the corn crop.
to sell feed
stainless sheets, plates and bars for
ket action. Most commercial banks
most, of
closed
this year's cotton
94% of the steelmaking capacity for the entire industry will be 100.4% of capacity
average
many
all future deliveries of corn and oats rose to new high
for the season, largely due to the reluctance of farmers
ground
both worried about nickel
One mill is booking orders for January and
ton, compared with
a
bank
to future
basic commodities continued to spiral upward.
at 290.17 on Sept. 12, comparing with 236.58 a
earlier, and with 245.11 on the corresponding date last year.
for
range,
diameter.
our
more
individual
as
are
producers
sold out
are
Cold-rolled sheets
to
situation
guesses
requiring steel
But
they expect to cut their allotments in the next 10 days because
of the nickel shortage, "The Iron Age" points out.
Some producers
of large-diameter pipe report they are sold out through 1952.
Another big producer is sold out through 1951 on pipe of medium
follows:
as
would
light
price index rose
than two years during the past week as
more
current quotations going above the
1951, for good customers having defense orders.
February,
Tieasury Department in starv¬
ing the intermediate-term eligible
In
few months.
the rest of the year.
the
market.
wages
Fantastic prices have been offered for nickel-bearing
but it is practically unobtainable.
scrap,
to the policy cf
measure
a
Steel consumers and
dilemma due
a
steel
on
J supplies.
decline.
prices
The index
As they grow, regular customers making civilian goods are
nage.
Looking at
the
contradictory
points cited above brings out all
too clearly the dilemma in which
we
showdown
finding their quotas slashed and deliveries extended.
hop
the market
final
Defense orders
nimbly
longer issues at the
to
of
to
high for
new
a
I,011,644,000 bushels, comparing with 1,146,463,000 last
the 10-year average of 1,031,312,000 bushels.
within
yield three months hence, and it
is a certainty that all of our banks
will
to
year's actual
their
to
as
pension payments increased, although the
run for four more years.
government and civilian orders, this trade paper declares.
Thus, while Treas¬
guarantee
no
Years
Two
The Dun & Bradstreet wholesale commodity
Many
steel people feel that the voluntary allocations program will be
only a warmup for complete government controls to be installed
policy of rela¬
bills look relatively attractive
today, it is well to remember that
is
the
Commodity Price Index Highest in Over
spite of all the talk and plans being made in Washington,
steelmakers are still operating on a hit-and-miss basis to fill
ury
there
to show
chief function is
Activity in leading grain markets declined slightly last week.
company
In
turned downward and the Federal
relaxed
total of the price per pound of
its
and
Although prices continued to fluctuate irregularly over a narrow
big steel
one
*might reach the White
House because a big wage increase would have to be accompanied
by a steel price rise.
The steel expansion program, raw material
cost increases and a big wage increase would force all steel com¬
panies to charge higher prices for their products, despite the high
rate of steelmaking.
market quickly if and when busi¬
ness
use,
would be willing to grant a
The
deposits,
amount
general
Wholesale
week
least
in
Age,"
Iron
pension part of the contract is to
including
$37 billion savings deposits.
(4)
The
competition for this
small
"The
raise and will try to get
of
system
foods
rise of 14.2% above
the corresponding date last year.
on
slight wage raise without raising its steel prices, but the union
will probably turn down a raise of around 5 cents an hour, this
trade authority asserts.
It will go after a bigger cents-per-hour
During that two-year pe¬
riod $11% billion of eligible bonds
beyond five years' maturity is a
ridiculously small amount to go
a
industry—states
At
(3)
in
31
put
Nov. 1.
unknown yields.
around
recorded
general trend of food prices at the wholesale level.
Capacity Rate
national metalworking
weekly in its current summary of the steel trade.
Steelworkers
will get some kind of an increase.
One large steel firm has
already had informal discussions with Philip Murray, head of the
United Steelworkers, and official negotiations will start about
longer bonds, especially after the
(2)
week ago when the index showed the first
compared with $6.65
increases by auto and other manufacturing com¬
pressure on all basic industries—especially the
wage
panies have
up
to
Set at 100.4% This Week Exceeding New
Mildly in Latest Week
Advances
Index
The index represents the sum
Steel Output
the otner side
on
Price
Following the downward movement of last week, the whole¬
sale food price index, compiled by Dun & Bradstreet, Inc., turned
mildly upward the past week to stand at $6.68 on Sept. 12. This
is by no
means as easy since it has
to take into account the
following
33
(1113)
The Commercial and Financial Chronicle
3%
was
a
period of last year.
to Sept. 9,
In the pre¬
decline of 2% was registered from the similar week
For. the four weeks ended
Sept. 9, 1950,
an
increase of
noted and for the year to date volume showed no change
from the like period
of last
year.
1
.
Financial Chronicle
The Commercial and
.
.
.
Thursday, September 21, 1950
(1114)
34
frrmi
CnniifttioH
^onunuea
large interstate corporations as a national
which are not
10
nnne
jrum /juye
parts of public-util-
ity holding systems or investment
"The reason for this provision
companies, and whose manage- \s not that registration with the
mmmm
IZe 11
UyAny
>|iLa
A Ilv
MJAmm
IvQI
A
ments do not choose to list their SEC guarantees quality, but that
conducted in 1911, 1932, 1933 and
1934 to ferret out and expose the
more glaring examples of abuses,
nancial
information
the second
The need for some regulation
the adherence to the proxy rules, became of greatest urgency after
and the last the prohibition of un- the first World War, when the
Ex-
Securities
the
of
Act which are involved:
the first involves the filing of fi-
change
scrupulous
the
unfair practices at
or
of the investing pub-
exnense
feature of
Exchange Act in-
the third
lic
Clearly
the
Securities
additional burden to
ethically-managed corporations
volves
no
As for the
thpir manappmpnt
anH
information, virtually every large corporation with
over $3 million in assets and sub-
filing of financial
investor interest
or get along
without the accounts and records
from which all the information-republic
stantial
business
do
cannot
quired by the Frear Bill may be
readily ascertained. As a C.P.A. I
assure you that in preparing
annual financial statements, the
can
biggest share of the work comes in
the preparation of the accounts and
records themselves—and once
they
prepared,
the
duly
been
have
preparation of the financial statements from the records is, comparatively speaking, less burdensome.
the Frear
The question posed bv
Bill is not whether such accounts
anrl rprnrric should be maintained
exchange, are ignored. These in- release of adequate information."
vestors do not have equal protec.
tion even though their companies
SEC Studies
have securities widely distributed
The detailed studies completed
and actively traded. This double by the SEC in 1946 and 1950 indistandard of investor protection cate the need for corrective
whose annual report indicated
that its 30,000 shares of common
stock had a market price ranging
from $55 to $63 per share, did not
mention the fact that the company
bad granted its executives an option
purchase 3,500 shares at
$12 Per share. All of this informatlon> 1 believe, the investing pub-
already
for in most instances thev
^he
are
question is rather one of
teencordsandac'
whether
should
counts
stockholders—the
of the enterprise itself.
owners
adherence
tions,
xne
the
renuirinff
lequinng
nrnvision
provision
the
the
for
tor
As
As
available
made
be
public
the
to
the
to
regula-
proxy
careful understanding of
a
machinery
macninery
proxv
proxy
leads
ieaas
any
any
fair-minded individual brought up
the traditions of American de-
in
should
apply
have
nave
who
wno
interests.
all
to
investor
investor
public
puoiic
large
large
it
it
corporations
Basically the proxy rules
that
reouire
conclusion tnat
conclusion that
the
tne
mocrarv to
mocracy to
stockholder^
the
informed
to
as
anv
hn
national securities
be attributed only to the
piecemeal fashion in which the
several statutes were adopted. It
was to afford this group of investors some of the essential safecan
other insiders—abuses which were
jn these times of much-needed
uncovered in the investigations of expansion in certain industries,
the early thirties. The result was there is much concern in both prian overwhelming popular senti- Vate and governmental fields over
ment that something had to be the dearth of venture capital,
done to enforce more rigid fiduci- There must be a continuous flow
ary standards upon
corporate of such pubiic investment in inmanagers.
dustries if we are to maintain our
In 1933, the President of the present economic system and
United States recommended leg- world position. Nevertheless, in
islation to protect investors spite of some $200 billion of liqu'd
against fraud in securities and savings available for investment,
blind buying of new security is- only a small portion is used to
sues. He described this project as purchase equity securities. It
"but one steP in our broad Pur" seems clear to me that such capi~
Protecting investors and
depositors." The resulting law,
the Securities Act of 1933, requires
complete and truthful disclosure
of the financial condition of companies whose securities are bemg publicly offered.
A second step in the program
of protecting investors was taken
Congress
^ungiess
uyi1!;:
the
next
vear
ine next yeai
it dots
istered corporations.
Approximately one out of every
six of the companies examined
failed to £urnish its stockholders
..
reserve for contingencies
of $2,- tair.s °roxies
little
Hrto
dMX"' Ac¬
|
holders. The freedom of manage- Exchange and the insider was ma£erjais 0f 76 companies relating
selfish lm- therefore subject to the Securities
ti
p
Lfj,
,
.
rp<,tr:eted nnjv when the Fvphantrp
Art
minnritv
«tnrk
to 152 meetings weie Obtained.
.
The 1949 survey of consumer
finances sponsored by the Board
of Governors of the Federal Reserve System disclosed that the
trading, of course, was at the expense of the minority security
holders. There is no reason for
imposing this basic fiduciary ob-
plaipt_m thGi b3SI prov.isions of
The only corpothe proxy rules
rations covered by the Frear Bill
which might
have anything to
dread
fear
or
erwise
would
which
no
engage
ethical
would
person
without
n
a
practices
in
fair-minded
or
condone—with
Frear
v
h
those which oth-
are
or
Bill.
a
t1
p
Background of Frear Bill
There are still large areas in
own>
Many
have
asked why we
haven't had legislation like the
Frear Bill long ago. The bill seems
so
meritorious
that
people
keep looking under desks, in back
of drawers, and behind bookcases
many
looking for something wrong with
it. A quick review of the history
of the Frear Bill shows
is
needed
The bill is
logical product of
a
which
and
recommenda-
back
go
As early
States
Commissktner
in
honesty
nf
almost
50
1904 the United
as
law
esent
the
howeve
essential
provide
not
safe-
about their inability to ex-
ercise their corporate franchise to
vote at annual meetings because
of
the
and
type
about
of
proxy
suspected
furnished
"shenani-
gans" by corporate insiders Many
0f the companies which most of
you
believe to be covered by one
oranother
enacted
not in
years.
tions
why it
badly.
so
investigations
tions
us
Prior to the enactment of the Se-
Even among experienced finan-
to
fact
of the
Tecurities
protect
covered
laws
investors
are
and this in-
eludes some of the largest corporations in the United States.
Rm.,»
th.
bv stens wdh thpsp
mn
ws
tn
advisers
cial
public interest to comply with the
provisions ,of the Securities Excbange Act but permit these companies to be exempt.
interesting
It is interesting to note that reto note that re
quests for proxies sent out in con^
nection with 89% of the annuaI
meetings of these companies u.u
■ t even name the persons whom
the management proposed to elect
ag directors. In connection with
aPPears to
Exchange Act
lte stocks, which represented 36% ferred to a case where tne presiof their entire common stock port- dent of a corporation and his
folio, were all stocks of companies brother who controlled the comsubject to the requirements of the Pany with a Mttle over 10% of the
Securities Exchange Act. The tes- shares, disposed of their holdings
timony of Mr. William T. Gardiner' former Governor of Maine
and now representative of the Na«onal Association of Investment
Companies
lu
support
of the
Frear BH1> appears to confirm this
observation.
Of interest in this connection
is the reP°rt prepared by the
Trust Investment Study Commit-
of tbe jtems was stated to be the
purities Exchange Act, profits approval of the management all 0.f
and ratification of
from the sure thing speculation the acts
since
and analysts there
be a reluctance to com- m the stocks of their corporations
guards against corporate abuses, mit large sums to the care of cor- weie, with easy morality, more or
Many investors have written their Porate
management which does less generally accepted by the fiCongressmen
and
the
SEC
in not make the minimum complete nancial community as part of the
anger and frustration about their
disclosures I have mentioned. A return for serving as a corporate
inability to obtain from their of- recent compilation of the common officer or director.
The Senate
ficers and directors adequate in- stocks held by investment com- Report on the bill which became
formation about the business they Panies shows that their 50 favor- the Securities
rewhich
does
111656 comPanies comprised all
th t domesticmocompanies with vntasf nvpr
mniinn tvhoce
sets ol over $3 minion wnose vot2.ng securJtles have 1unli?ted trad"
.
Plfrhprivileges on thewere traded
FvehSnf*e and New York
Curb Excnange and veie traded
dunng a sampie shares a^ volume
year in
PVPPPHjn« s onn
casual
exceePmS a»uuy faar^- A casual
examinatlon of the list o^ thpco
companies furnishes dramatic evidence of the iilogicai nature of
our disciOSure iawS, which require
smaner companies with less
these barriers between the curities Exchange Act of 1934. 42% of the annual meetings one
investor and his corporation.
0f 1940.
w!hich
ment to follow purely
" com- and the Investment Company Act move
for
room
9olirited and to
^ "hkh
vears
is
are
pp
or
There
tne
the major provisions of the Se- to solicit proxies and to offer procurities Exchange Act attempts yufeaJS to be acted upon at the
to outlaw trading by insiders meetings
based on inside information. NuTn rnntr„_f with thi_ flmo;ratinrt
tal will not be supplied unless merous examples of such trading f h
.
. ,
f
t d
there are reasonable assurances have existed in the case of securi- w
p c+ PH iho
that the persons who furnish the ties not registered under the SenraPtiPPa nf manv nf :hp
money will be kept informed as curities Exdiange Act, a situation
do not at ores
to its use. Yet, under our present which would be rectified by the
laws, management may, and in Frear Bill. As an example in one ,
regulating their piactices. In
many instances does, ignore the instance, where a security was th s|c t
t
j have
interests
minority security registered on the New York Stock just re£erred_ £he proXy-soliciting
most important deterrent to in- lotion only upon officers, direcvestment in common stocks is a tors and 10% stockholders of reglack of familiarity on the part of jstered companies. The prohibithe public with industry's i;inan" ^ ^vf1^
sbockl^ 1con"
;be proc^y.^les also Provide that eyilg at which it wag aimed
cial condition. Familiarity may be duct should apply to all large
proxy soliciting material cannot
Tn the
1935
1938 and 1940
achieved onlv bv open and free publicly held companies.
contain false
misleading statetn tne years 1935, 193H and 194U, acnieveci oniy oy open duu
A
. y
ments and that proxies sent in bv further steps were l?ken t0 pro" disclosures of all important facAs we noted earlier the Frear
Sockholders must be voted as In- tect investors, with the successive tors affecting financial health BUI would extend to these large
dicated and not destroyed if in enactment of the Public Utility Distrust and reluctance to invest unregistered companies the conopposmon to the^ management's Holding Company Act of 1935, breed in an atmosphere of secrecy, trols now m force by virtue of the
nronosal
management s chapter x o£ the Bankruptcy Act, The Frear Bill is designed to re- insider-trading sections of the Serriu
studied
200,000 and did not mention any .
onoortunitv to cast
specific contingency for which their proxy voles mc vUi^eriuy
provisions had been made.
Non-management groups" are proAs I indicated earlier, one of vided with an equal opportunity
,
unon
„
.
basic statements-balance sheet, f/te?ed~Sandinfegfstered^omDaS"
profit and loss statement, and ^ Where there arrhnnd^ nr
statement of surplus-all essential to an understanding of the ™push£^ of ahu°e in the
financial condition of the business. ®rLv f?eld is so Evident that it
Many companies so handled their P .frp_ imip proration
reserves it was impossible to de- r ^ T ?nf| J A6, °hpr ■' dpr thp
termine, even with a balance
adnnted ^.mfuant to Section
sheet, what the company was
wortn. For example, one company J*;™anagemenx is reqiuirei wur,
with assets of $6million had a f .
of their rornoration wh»n
ll°ndt securities excuanges, to
nrov;dp tbp assurances neces- registered security
it is alleged
Provide periodic l n f o r m a 11 o n to provide tne assurances neces registered security, it is alleged
companies and to free sary to encourgae private invest- that insiders made a $3V2 million
fu
-f.
V
•
ment in industry
J
profit in two months
All the
their securities from the manip- ment in industry.
pront in two montns.
ine
matter
nin
°f the Fiear Bl11
?n® of the
wjth» one or more of tne thre^
with the enactment of the Securi- Pul*e? £ ha™^^^
holders^Lnfpeile^ the Lider to
ties Exchange Act to further That tbe Securities Exchange Act, the holders almost a half-million dolof 1934. cor- security happens to be sunjeci to return compelled the insider to
A
designed
wus uewgucu lu iuiiuei .uji
p„hiir TTtilitv Holding Company larV nrnfit
mflHp ac n rrdiilt nf
porate democracy in companies
^ ^ ynXenngt Company such shorMSm trlding n an
havmg securities listed on na- Act, or the investment company sucn snort term trading, in an
securities
exchanges
to Act.
The Frear Bill is designed other instance involving an un-
ulation
market operators who
wh?cT the?r nrnxv is snlic. caused prices to fluctuate for their
ited
Adeouate onnortunitv is nrnPers0nal profit, to the detriment
vided under the rules fnr stnckof Public confidence in the marholders who disagree with man" kets> and to the loss of Public in~
agementTcTPresent
vestors- This 1934 Act has been
thp
entire hndv
nf stnpkhnidnrQ
very successful, in so far as it
The
t rules a?sn S thai g°es> in its efforts to combat the
fullv
a
guards now enjoyed by the others,
and to remedy an illogical and
unwarranted disc ri minat ion
abuses in the conduct of corporate against them that the Frear Bill
affairs by officers, directors and was introduced.
P°se of
whether insiders had traded in
tbe company stock. One company,
on
American people purchased cor- apparently is an accidental rather legislation. These studies repreporate securities in unprecedented than a deliberate omission, and it sent an analysis of typical unreg-
amounts. Congressional investigation disclosed that, from 1920
to 1933, approximately $50 billion
of new issues were sold to American investors. Half of those issues
were absolutely worthless by 1933.
These losses in value were accompanied in many instances by
whether it had hau any material
transactions with insiders, ox
insure the avaiiaoility and
securities
features
securities exchange." der thesingle company mentioned
Securities Exchange Act.
Not a
Said the report:
for upward |f $16 million before
the companf passed a dividend
a"d later repurchased them for
about $7 m.fion, thus netting $9
uii ion.
The annuallreports of 119 companies with fcefa- of at least $3
million and 3S0 or more security
holders were J examined by the
Securities and Exchange Commis-
the last meeting) with no speciiication of the nature of those acts,
Qnly in a totalitarian state would
the type of banot in .general use
on tbese proxies have been tnW-
ated? for 95% of the companies
did not afford their stocknoxucis
an opportunity for a "yes" or "no"
vote on goecific items. Indeed, iti
one case some ingenious representative of management proposed to
print the proxy on the back of the
company's dividend check, so that
stockholder who endorsed the
check would automatically execute a pr0Xy unless he indicated
to £he contrary by markina an
ar)y
"X" in a particular space. Unless
legislation such as the Frear Bill
is enacted, the small stockholder
in such corporations has no altentative but to grope blindly
about for the correct exercise of
CoVpora- prefect the publ^ U te le t gaps tee.of.the New York Bankers As- sion. In most instances the finan- his prerogatives as part owner of
report in- StentionaTandacc^
J*.^coml
bUSmeSS'
hf promo«oneCy a"ecrecy tion ^"has'protdded^for the^na" recommended legislation, which Panies furnished no income stateSupport of the Frear Bill • ,
^ +' • • secrecy fjon it has provided for the na- bag gjnce been adopted by the ment at all, and the income stateIt is heartening to note the exhis
of
annual
nnrnnrato
ments of many fvmore were so tent and character of suooort for
highly condensed :that they were the Frear Bill. The financial comof only limited value: in some munity, which presumably knows
cases the statements did not even the problems of the investo- best,
report Over earnings the balance has given Organizations such as
the half <of during the aoproval. its almost unanimous
year.
- sheets examined were materially the Investment Bankers Associa-
tion s investors. The Congress has New York legislature for the re?1V6n+ 3 m?asure of Protection to vision of thegligt of gecurities in
princiPa^i evils investors in new securities, m- which trust companies might
zation
President^ T hi
ve?°J*s1m sec"rities ^sted on a place the funds committed to their
Roosevelt
WiUnn rJn
Kooseve t, Taft
Taft, and Wilson rec- Tatl0^al securities exchange and care to include bonds and stocks
investors in certain types of enmhdeaHinfj
statements"
nr
riicVinnti r°n
as
f
#
n
rn
t(,.
ommended that the
steps
to
remedy
Congress take terprise such as public-utility
these evils,
Congressional investigations
and
were
holding companies and investment
companies. But the investors in
,
,
.
fraH1ricr
S
lirinri
..
P
pv
change registered with the Secur- deficient wherTjudged by the
ities
and
Exchange
Commission
counting
standards
enforced
ac-
un-
tion, the National Association of
Securities Dealers, the National
Number 4944
Volume 172
.
.
The Commercial andt Financial Chronicle
.
Securities Traders Association, the
the
New
Society of Corporate
Analysts, the National Association
ofInvestment
Companies*
the
New Yorx Stock Excnange, and
the
New
York
Curb
Exchange
sent representatives to announce
their support for the philosophy
of the bill. Wi.en organizations of
this character together with the
conservative and respected mem¬
bers of
every
community agree
that legislation endorsed by a bi¬
Government
eral
It
essential,
the
and
reasons
of the
is
logical that the Frear Bill
bi-partisan sup¬
port. - The welfare of
investors
transcends party lines.
Not only
has the Congress made the SEC
itself a bi-partisan agency, but the
statuses administered by the SEC
have enjoyed a full measure of
support from both parties.
Al¬
though the first of these Acts was
not passed until 1933, the investi¬
should have such
which
statutes
two
in
be<~an
with
mat
the
-
-
member
supply.
House.
Protection
the investor
of
maintenance
the
—like
either
in
vote
of
Full scale war is a possibil¬
the horizon. We will need
10
expand our industries to the
maximum
possible
limits,
and
we will have to depend upon the
may
tween
East
settlement
West
and
and
achieved
be
cen
general
a
East
This
^
brings
point,
me
new
effort
a
between
on
as
East
to
!
I carried
of
ten
in
'i
with
in
Program
the
problem.
United Rations"
Security. Coun¬
A
than
a ; command.
Even if the Security Council had
been blocked by use of the veto,
will
the
of
rather
>
the
'General
there is
where
Assembly,
veto, could have made
the same recommendation,
and
the whole United Nations action
in
no
of
memorandum
a
Twenty-Year
Peace
Nations.
through
discussed
I
have
could
Korea
followed
it has, in fact, occurred.
The
potential
significance of
this
United
Nations
action
in
exactly
if
Korea,
succeeds,
it
is
in
proclaimed
already
of
action
for
Canadian
countries
other
to
come
may
be quite
sure. The precedent of Korea will
not be forgotten. The world will
;
Of
thing
one
find
it
can
we
difficult
more
than
ever
before, if not impossible, to permit
future
any
gression
pass
action
Enforcement
should
peace
of armed ag¬
unchallenged.
cases
to
to
a
matter of course.
There
are
immediate
long-range—why
clusion
in
by
its
and
versal
believe that uni¬
to
requires a universal
in
which
rations
peace
organization
which
This
;
for
room
regional groupings and
nMia"cps,'
These
do,
a
serve
But
they
useful
not
are
often
and
may.
very
substitute for
a
be.
vAnything
universal
can¬
than
less
organization
a
merely
brings the world back to the old
of alliances
system
war
that
has
in the past.
and
counter-
always
led
service
call
to
a
in
member
the
peace
on
to
governments
Nations apnroach
higher
a
what
is
government
priority
in
foreign policies—to make a
use all the resources
effort to
new
the
of
York
"working paper."
it is an appeal
'dve the United
to
New
are
Fundamentally,
Nations
United
the
as
really primary means of achiev¬
ing peace. Until the Korean crisis
came along no government really
the United
gave
Nations the top
glance
One
the
at
member govern¬
ment will make that apparent.
budget
of
any
there
Now
are
attitude ani
new
also
It
requires
by all the members of the
Nations.
the
if
as
they
were
signs of
some
new
a
will
from
North
the
ce^se-fire
Parallel.
Nations
a"d
a'l
order
is
Council's
25 an1
and
June
of
aim
The
must
thpir
38th
the
to
of
.
the
be
United
united
a
own
government
choosing.
To
things,
Nations
an
help in order to recover.
It must
have that time and help from the
United Nations.
and
Straus
thereto
he
&
had
Blosser.
his
own
busuiv.ss in Cnicago.
come.
Public
Utility Securities
Central Maine Power
Central Maine Power Company, with annual
revenues of $22
million, derives almost all its revenues from electric service—its
transit business was disposed of in 1944. the gas service in
1949*
and
water sales
the
Korea—as
see
the
s'art
and
than
1%
of total
of
in
want
to
to
negotiation
East
between
and
Nations.
United
the
in
of
the
ten
before
proposed
points
the
that
was
we
The
Company has been improving its hydro setup, and has,
the Dead River storage capacity by about one-third.
now ranks among the best in
storage capa¬
city, its 47 billion gallon capacity being almost as much as that
of TVA's Tennessee River.
The Kennebec River
(with Dead
River) supplies about 50% of the company's rated capacity, the
Androscoggin about 18%, and the Saco about 22% (with 10%
miscellaneous).
increased
The Kennebec River
In recent years the Company has added
17,000 KW hydro
capacity and 20,000 KW steam, about 10,000 KW is being installed
this year, and 60,000 KW added steam capacity has been ordered
for 1952. Thus the drought troubles which have
plagued the com¬
pany in parts of each of the last three years should be ameliorated
in future.
At present water conditions
are
quite favorable, with
storage ahead of the long-term average.
Central Maine Power Company serves about
214,000 customers
Maine, the area including such industrial
Westbrook, Lewiston, Brunswick, Augusta,
Bath and 267 other municipalities. This territory in i960 had a
population of about 560,000 or about two-thirds of the total popu¬
lation of the state, and includes the greater part of state industry.
Important industries include pulp and paper products, cotton and!
in southern and central
centers
as
Portland,
wool
textiles, shipbuilding, metal trades, lumber and woodwork¬
ing, and boots and shoes. Sales to important industries in the 12
follows, in millions of KWH:
months ended July 31 were as
and
242
Paper
Lumber and Woodworking
28
Metal Trades
21
_
_
13
6
Shipbuilding
While
New England
is not a fast-growing area as compared
with Florida, Texas and the Pacific coast, nevertheless the idea
that it is a backward section is fallacious.
Despite the fact that
Central Maine Power has disposed of services yielding in 1944
over $2 million gross, its growth record has been as follows:
Net
Revenues
Balance for
Operating
Com. Stocfc
Revenues
—(
000 omitted) -
series
a
vides,
meetings of the Secur¬
as the Charter pro¬
with foreign ministers or
of
in
•
133
I
of special
state
com¬
Company is primarily a hydro utility, rated capacity
being 185,000 KW hydro* 98,000 KW steam and 6,000 KW internal
In the seven months ended July 31,
hydro power
furnished 75% of the total output, compared with 63% in 1949and 56% in 1948, drought years. However, in the
preceding seven
years hydro ranged between 70% and 89%.
Korean
start
Electric
combustion.
Oo-ratim
first
The
gross.
The
a
effort
great
wheels
turning again
West
less
approximately 43% residential and rural* 17%
mercial, 31% industrial and 9% miscellaneous.
has
action
must—I
we
new
a
Nations
United
enforcement
its
won
to
amount
revenues are
attendance.
12 months ended
I
$22,008
$8,695
1949
21,337
8,105
3,344
20,453
6,478
2,487
1947
year
July 31, 1950
1948
Calendar
______
*
$3,560
2,532
15,398
7,122
1,835
one-third
meetings of this kind.
We should
1944
17,434
7,392
1,941
expect dramatic results from
1943
16,841
7,810
2,120
But if they were
1942
16,088
7,198
1,957
1941
14,474
6,256
1,511
1940
12,632
5,861
1,568
the
fact
Union, Communist
ofxthe
world's
poou-
believe
What is called the Western
not
such
has
about
rising
newly
one-third.
countries
of
it
is
bring
to
necessary
the
also
meetings.
properly conducted, with private,
sessions the rule, I be¬
informal
to
world
they might in time lead to
constructive results.
Certainly I
be the height of wishful
do not see how we can make any
Africa, who do not desire
belong to either camp, compose
other third.
the
it would
thinking
side
the
to
could
such
a
that either
its will upon
suppose
by force without
third world
a
destructive
be
as
In
impose
others
cipitating
know
we
war
of
lieve
pre¬
that
sides
civili¬
world
to
Effectively
I
see
United
none
except to make
Nations
work
a
wcrld
organization
with
my
all
We
have
any
first
to
demonstrate
doubt that armed ag¬
it
But
ef¬
as
is
too
This is
is
in
third world
it
term as Secretarysought consistently
sides together.
getting very late in¬
is
negotiate
parties represented .in it.
beyend
it
deed.
more
two
the two
the
fectively in the cause of peace
that
negotiation.
bring
Now
the
brought around the
table in genuine and
conference
During
Mare
unless
be
can
General I have
UN Must Wo'k
conflicts
the
of
the
honest
it.
at all toward a peaceful
progress
settlement
divide
What, then, is the answer?
prosram
reconstruction.
it
win
and
1945
accom-
devastated land after the fighting
is ended.
It will need time and
long time to
—
Chira and their allies have about
of
effective United
of relief and
Korea will be a
peace
a
with
2,306
pli'h this may take a long time
and will certainly require, among
other
Prior
such
formerly
was
Lyncn, Pierce, Fenner &
Beane
win
members
Exchange.
7,031
zation
a
Means
the last war, the world may still
Street,
Stock
6,171
would
e^ct
Meriiii
winning
to
gave
Salle
Midwest
17,436
+hat the Soviet
which
to
D.
16,159
remember
must
people of Korea aie able
independent Korea in
the
freely
win
obedi-
Koreans
withdrawal
t'-oi-
to
Joseph
1946
We
The
enough
Security
the
to
on~e
be
not
La
the
Mr.
spirit they
awaken¬
Asia and
It
South
of
Boots and Shoes
W^cn
btion.
Independent Korea
through¬
and
out
Nations.
World
Must Have United and
CHRONICLE)
—
Weboer-Simpson & Co., 208
Textiles
heads
same
gov¬
United
out the world—with the same all-
a
111.
,
policy-making officials of the
governments together in periodic
the
of
members
is
Nations—in .Korea
ing to the meaning of the United
alPances.
military aid
their
and
Pulo
increased
The effect
peoples
Signs of Awakening
to
It does not matter
and
agenda
of the
session
memorandum
who
purpose.
the United Nations and thev
not
is
re-
19.
^eonle
Within
this universal framework there
the
on
in
opens
5 eotember
with p]1 kinds of governments and
s'cial systems participate.
nor
governments
coming
oriority.
continue
for.
ity Council,
Nations.
United
Union
allies.
I
the
r?girnal organizations.
enbffhtened oolitical planning and
action
World
Western
Soviet
con¬
a
United Nations General Assembly,
successful
con¬
Korea.
This requires
a
other
the
United
the
bitter
in
proposals to all
them
put
crisis
to
first of all
the
about
c-o
member
59
whether the competing grouos are
in the form of federal unions or
the Unite:! Nations action must be
brought
brought once more
the question of
are
asked
the
sent
I
their
face with
to
what to
alliances
reasons—both
many
and
we
restore
become
now
with
as
this be brought about?
can
Thus
to
believe
JI
well
as
the Pacific area.
Hew
the
decisions.
similar
of
between
should they
action by
calls,
Nations.
United
the
Un'on,
the
and
Japan and the rest of the Powers
and
for enforcement
come,
Soviet
China
with
flict
ready,
Army,
future
relations
intention
its
continuing this force as u- per¬
United Nations force in
answer
ful
face
manent
the
Soviet Union;. It will be necessary
raising a
has
Korea,
the
countries
I was exploring,
way.
commitments from anyone.
have
of
the" sea
into
for Korea to have good and peace¬
aggression
countries
the
of
force
extending
Chinese Manchuria and
from
Canada, which is
tremendous.
one
future
for
collective security from
the
I
more
and foreign min¬
four
the
neither
I
Then
than the freely
given
consent
of
the
Korean
people. Remember that Korea is
a
peninsula about the size
of
Florida
the
ernments will support the
for
i' INANCIAL
C HI C A GO
all
Means has become aassociated with
audience
consideration
Win
to
United
o-ir-or?
permanent solution in Korea
require
for
the
for
developing
and
cil,
freedoms
peoples.
third
negotiate
this
me a
points
preliminary
mendation
fundamental
be¬
tonight will recall that I made
a
Irip th's spring to the four
Great Power capitals—Washing¬
ton, London, Paris and Moscow.
isters
"A Rep )it oil
(S^.U. tO 1HL
By OWEN ELY
.Many people
13
page
Webber-Simpson & Co.
to the
advancement of human rights and
my
to
West
and
of governments
from
lective security , dedicated
Joseph D. Means With
many
this memorandum with the heads
Continued
based
peace
United Nations.
to
answer
But it
part of
exchange.
is. the
between
peace—a
on the principles of the
Cnarter—a peace of genuine col¬
35
issues.
public
securities
tension
West.
nish the
Bill
for
a
cal
on
Frear
per¬
That
Korea.
of
a
solution
likely in the present state of criti¬
tory.
The
find
to
next
Nations
squarely
If
great deal of time and pa¬
effort.
A
permanently
peaceful solution for Korea is not
country is facing the most
national
will be done.
tient
crucial period in its glorious his-r-
a
governments
peaceful
future
take
Conclusion
ity
have
manently
the
through to
It will not be easy,
and
can
We
free
competition—is not the heritage
of any one party or group.
Our
we
We
unflinching
and with all the resources
purpose
it
resolution
President Hoover
its
but
tremendous study of this
the
U32;
Acts
1934
and
Senate
a
under
adopted
in
1933
the
carry that task
conclusion
with
can
dissenting
This
pay.
must
passed in 1940 were adopted with¬
a
not
does
have set out to do in Korea.
were
investor of today to fur¬
capital if we are to maintain our economic system.
We
must protect investors with full
and
adequate information about
their corporations, with democra¬
tic proxy solicitations and with
prohibitions against insider profgation of the Senate Banking and itering whether or not their par¬
Currency Committee which re¬ ticular corporations are listed on
sulted
gression
out
it
for the enact¬
legislation.
compelling
ment
is
obvious that there must be
Trade
Public Utility
Hoid.ng
Company
Act of 1935
goes all the way back to another
Senate resolution adopted in 1928;
Commission of the Fed¬
partisan
seems
Federal
Commission
which preceded tue
York
(1115)
war.
late
no
never
order
to
too
late
prevent
to
a
I do not believe
today.
time for despair.
This, above all, is the time to
and
fight for a
United
work
capital structure is 51% debt, 21% preferred
stock and 28% common stock and surplus, after allowing for small
intangibles such as deferred charges. New England Public Service
Company now owns 48% of the common stock, having just dis¬
posed of 260,000 shares for the purpose of reducing its bank loan.
It appears unlikely that NEPSCO will sell any additional Central
Maine stock, since its bank loan is being currently reduced to
about $2 million, which amount can probably be taken care of
through 1951 dividend income. While Central Maine Power has
The company's
done
fairly frequent equity financing, the next common
issue is
The
not anticipated
stock
is
until
currently
some
selling
time next
around
stock
year.
16 Vz
and
pays
$1.20
(which rate has been maintained since 1946) to yield about 7.3%.
Earnings for the 12 months ended Aug. 31, 1950, were $1.65 a share
and for the calendar year 1950 are estimated at $1.70 a share,
after
water
adjusting for a 42% tax rate. With 12 months of normal
conditions, earnings would probably rise to an estimated
$1.85, which however would be reduced by EPT in 1951. The
management believes that the $1.20 dividend can be maintained.
-36
The Commercial and Financial Chronicle
(1116)
Continued
from
Steel Indusliy
thing, that manufacturers are not
using steel as efficiently and as
now
as
they did in
1943; but there could, of course,
be another explanation. It is just
barely possible, for instance, that
the
of
following
the
of
liquor
a
10 cases of scotch,
to the clerk that
build up her in¬
to
wanted
ventories
are
are
into
went
explained
she
us
example
the
ordered
store,
arid
from
who
woman
who
today
customers
steel
buying
before
lot
a
greedy
of
people started hoarding.
Yes, gentlemen, that might ex¬
plain a lot, for certainly u.e tele¬
scoping of consumer demand, and
the replenishment of inventories
two
are
primary
for our
reasons
Iron Curtain; and—if you under¬
standing gentlemen will pardon a
reason
which
in
honest and
any
be
cannot
—
ignored
complete dis¬
cussion of the current shortage.
And that is the
simple, undeni¬
able fact that strikes have cost the
American
of steel
million
people 29
Now understand me,
I state t^at
not
merely
gentlemen,
a fact, and
I point the
as
accusation.
an
as
tons
production since VJ-Day.
blame at no one; for
with all my heart and soul I be¬
lieve one thing: I believe that any
finger
of
who—in
man
this critical
ism
the
and
high
of loyal
group
of any
purpose
/vmencaiis,
is plac¬
How
needs?
those
have
been
met?
Well, gentlemen, all during this
Twentieth
tive
has
Century, the steel in¬
maintained—year in
capacity nearly 50%
the demands
than
made
it.
That
years
on
upon
these
greater
has
nation
our
that,
means
the
because
stubborn
was
Others
may
management
unvielding.
and
be right. As an
interested party, I'm not qualified
ably
to
both could
judge.
this
of
But
thing
That if the patriotic
—the
who
men
I
sure:
am
men
it
make
of steel
the
and
who manage it—are fully de¬
men
termined
to
America's secu¬
else, there is no
put
rity above all
problem they will
face that
ever
where
fied
idle.
stood
Yet, in spite of this, it has con¬
tinued
to
expand
steadily,
in
every
decade—even in the depths
of the
depression when only half
steel
our
capacity
when
and
being used
was
couldn't
we
sold
have
another pound of the stuff if
taken
cigar
we'd
coupons
in
store
the
United
bled;
the
years,
States
duction
population of
has only dou¬
America's
but
has
steel
increased
pro¬
nearly
the
And the most dramatic
11
past
Capacity
years.
Since
So
I'd
tonight,
aside
reason.
like
II
dice, and plain political malarkey
that
tnis
surround
to
seem
snon-
Let's get down to the simple,
age.
dispassionate facts about
supply, and
picture
if
into
see
this
realistic
we
steel
our
can't bring
kind of
some
War
World
and
America
has
expanded
its steel production by more than
began,
million
47
an
That
tons.
of 90%
crease
is
big
as
the
as
population.
course—not even
in the darkest days of World War
II—did any military project ever
our
Never once, of
rect
for
lack
of
the
On
steel.
the
peak
of
year
production—after
di¬
every
military need had been fully
met—more than
steel
essential
and
total
our
still left for
was
civilian
for
of
50%
production
requirements
Lend-Lease
No
other
have
nation
in
matched
the
that
perspective
by
asking
three questions:
What
It
glorious tribute to the
men
steel
make steel and the
who built
industry
actually
the years, to fulfill its
responsibilities to the American
over
How serious is the
people?
ent
ores-
shortage in terms of military
and civilian
the
needs?
Aard what is
steel
industry doing to
that shortage?
come
Now
the
answer
question—about
first
the
to
what
over¬
have
we
done to live up to our national re¬
sponsibilities—is all
in
official
the
in
man
found
be
record,
the steel
I
proud,
to
think, to stand
any
be
that
can
on
record.
Americans, of
to
take
course,
second
don't like
place
in
any
league, so they expect their steel
industry to be bigger and more
productive than the steel industry
of any other nation on earth.
it
Weil
what many Americans
know, I suspect, is that
their own steel industry is bi^er
is;
do
but
NOT
than those of all the other nations
on
earth,
together!
put
Yes, the fact is that the Ameri¬
steel
industry
today
can
that
record
a
Steel in
stands
men
as
a
who
to the question of
come
we
present day steel supply and
our
made upon it.
the
first
the
of every foreign
plant in the world, ton for
ton, and still have 14 million tons
over.
nearly twice
It
as
turns
out
much steel
pretty
as
all
inquiries,
own
my
me
light of
fact
have
we
that military demands might go as
three times that figure by
high
as
next
July 1;
task
mountain
richest
moving
of
whole
a
iron—some
iron
hack
of
the
world
this
ore
has
hundreds
wilderness.
must
in
of
of
seen—through
miles
of
this
roads and
out
do
cart
To
put the Government
for 12 million tons.
aown
would
that
mean
shall
we
have to cut back our civilian
con¬
sumption by about one-eighth as
overall proposition, but unfor¬
an
simple as that.
proposition.
don't have to tell you gentle¬
tunately it isn't
as
And it isn't an overall
I
to life
steel supply.
it
So
the
is
our
entire
be necessary for our
Within
the
military
that
ing facilities
be,
are
be built to take
other
steel
steel-mak¬
new
going to have to
care
of them.
truly
facilities
new
out
met
needs
of
built—the Gov¬
are
have
will
to
existing civilian
be
sup¬
plies.
be
left
depends,
much
military steel
ment
take.
must
■
■
therefore,
i
!
question,
I
regret
Govern¬
our
And
r
■
to
i
how
on
that
on
i
say,
c
■
s
Most
familiar
are
that
the
sur¬
after
the
an¬
of
of
program
of
the
ex¬
know that in
the industry
You
will
a
of course,
details of
you,
months
27
whole
a
days
began,
industry
with
program.
next
as
added
have
a
alone.
heads above water—
our
is
going to fall.
The
be
will
Forces
need
million
ingot
entire
to
tons
capacity;
that
of
our
and
one-
will
increase
15
Steel
completed within the next
months
United
by
States
the
this
most
sudden
incredibly
dous
tremen¬
field ranges,
lockers, tin
cans for food, and
a lot of other
things that will take large quan¬
despite that fact—more plans are
tities of flat-rolled
being rushed
that
oil
pipe lines,
and
cars
And
freight
more
they get through,
flat-rolled
of
Beyond
our
products
is
going to look mighty flat indeed.
First Impact of Military Needs
similar
While
lem.
beginning
our
prob¬
pressures
are
develop
in
other
product lines, it is here, especially,
that the first impact of our na¬
to
large
a
civilian
tin
and
from our
sheets* plates,
Just how large a
will
be,
nobody
segment
supply
segment
plate.
that
I
of
have
been
much
very
"We must continue to recognize
that our strength
is not to be
tally
the
on
productive
capacity
Among those plants, of course,
will
be
which
the
sure
Morrisville,
strength—which is at the base of
our
security—is not impaired but
continues to
That
grow."
statement
dent,
gentlemen,
lot of
sense.
If
by
the
makes
our
Presi¬
whole
a
economy
is to
remain strong, and if it is to con¬
tinue
to
steel
home
at
we
it
grow,
shall
to
need
not
provide
abroad.
A
clearly, it is
build
—
as
up
as
it
can
—
And
right
will
mill
be
naturally want to know
Well,
I
everything
tell
could
I
want to know, but
you
I can't at this moment. How
that plant
large
will ultimately be, and
what kinds and
quantities of fin¬
ished products will be made
will
you
depend to
there,
large extent
a
upon
the military needs of our govern¬
So
ment.
until
to
necessary
of
ments
read:
Forces,
what
you
that
Korea—and
almost
as
cided
would
our
it
as
war
national
require the build¬
here
on
with
a
an
integrated steel
the
Eastern
minimum
Sea¬
capacity
the
capacity required to pieet our de¬
there fense needs with the least possible
democracy
this
produce whatever steel
gov¬
want
us
to produce
area.
produce
we
Venezuela
you
today,
Now
all
of Cerro
it
here;
of you
will I dwell
nor
many
weary
lions
of
dollars
the
mil¬
.
in
spent
we
searching four continents to find
that
mountain
want to
Many
fore
But
was
do
long be¬
public
great
any
it—the
about
I
thing:
one
ago—and
years
there
concern
steel
iron.
of
point out
American
industry
began
to
worry
a
possible shortage of iron
about
ore.
It
clear that the
was
20
ores
high-grade,
of the famed Mesabi
running
last much
low
and
more
than
were
not
longer if they
years
conserved.
It
not
were
probable, of
course, that the rich, hard-to-get
metal
was
the
in
would
add
to
mines
underground
enough
these
to
re¬
well beyond
the anticipated lifetime of most of
sources
carry
us
the men who were then doing the
worrying, but not beyond the ex¬
pected needs of a nation that is
only
in the first vigor of its
now
youth.
So
the
began
for
search
in
geologists
of
foreign
U.
Steel
S.
ores
while
and
earnest,
the
were
combing the globe for the strike
they finally made at Cerro Bblicompetitors—with equal
our
and courage—were
perserverance
finding other deposits in Canada,
Labrador,
Liberia,
and
South
America.
Hundreds of millions of tons of
the world's richest ores
added
America's
to
still the
industry
these
because
were
thus
but
reserves,
not content,
was
might
sources
be
cut off in time of war,
and because
the biggest iron treasure of them
all
lay right here at home in the
taconite deposits of our own Lake
Superior region.
Now
taconite
hardest,
'
is
toughest
just about the
rock
you
ever
It is estimated that there are
saw.
billion
72
some
and
country,
that
is
iron.
of
tons
about
The
it
in
this
one-third
trouble
is
tiny
fine
of
that
is scattered through
this iron
particles, - some
that they could
the
of
be
hidden
under
been to
separate those particles of
single
grain of
face powder. And the problem has
a
iron from the rock and to bundle
them
together by the millions into
pellets that
understand, of
course,
a
lem
Ore
part of the tremendous
face in building this new,
wholly-integrated
part
the
upon
and
years
upon
of
which
the entire
lies
capacity.
down
at
The
Cerro
be charged
can
blast furnace.
It is
the
a
prob¬
laboratories
industry have spent
millions of dollars;
other
full,
I won't repeat
so
many, many years
we
Vene¬
a
know the story
Bolivar,
be only
job
these
playing
are
thai this Eastern plant of ours will
a
of
conscientious and patriotic part in
the defense of the civilized world.
into
Now
ore.
survival
solid
ernment may
this
our
develop¬
this earth may de¬
on the steel that
on
zuelan officials
so
ultimately,
for the
pend tomorrow
them
that
Vene¬
accorded
the
ciency of operation. Beyond that,
however, I think it would be safe
assume
the
has
that
in
to
which
Knowing
rock
the
So,
'
help
arranging
large enough to permit high effi¬
plant will also be large enough to
stop
Venezuelan
be¬
steel capacity—we de¬
new
to erect
board,
soon
that
apparent
came
I
have
imme¬
and
to
this
you
diately after the outbreak of
in
is
require¬
the
Armed
our
onLy tell
can
what
know
we
meet
job,
like
of
var,
wish
be
to the industry to
rapidly
the
all about it.
in
must
on
Pennsylvania.
that
you
mill
economic
build
here in your own back yard, so to
speak,
ing of
the
Mill
Coast
East
new
expect to
we
big
would
Government
ment
banks of the Delaware River near
that
do,
we
in order that more
as our defense
requires them.
our people.
In all
therefore, we must
energies of
that
the
upon
upon
be built
can
because
So there is the crux of
only
not
the finances of
industry; and yet —
entire
plants
grain-storage bins.
more
when
supply
steel.
going to have to build
are
we
more
burden,
energies, but
the
in
of
and
cans,
standing
zuelan
us
space
a
I
moment to express my appre¬
a
might
short
States.
ciation for the friendly and under¬
al¬
into
of
plants here
our
mighty
a
here,
this
construction
thousands
across
United
range
time naturally imposes
jeeps, blitz
right
telescoping of
landing craft, tanks, more trucks
aircraft landing mats,
the
open-pit
Now
all
Armed
five
of
present
that much of the military demand
starved
How much civilian steel will
for
build¬
commencement
enormous
pansion.
to
It is
equally obvious that—until those
the
nounced
of
steel
in
for for
these
so
national
invasion
American
third
make
the
and
demands may
whatever
matter
a
Korean
light, flat-rolled products, and
it
is right
here in this fieldwhere we were already struggling
and
•
obvious
And
vival.
defense
on
planning
stopped
in the form of steel
have
claim
industry
plans that only-a short
were hardly more than
the blueprint of a distant dream—
are
already beginning to spring
already
first
steel
—
Military demands
thus far have been negligible, but measured in military terms alone.
they will increase rapidly in the Our power to join in a common
coming months and will naturally defense of peace rests fundamen¬
it.
make
the
future.
mountain
miles of water to
That's
ago
total
keep
enormous
come.
future—for its future and
time
let's be pessimistic
so
it and
about
to
to civilian customers as fast as we
a
nor¬
our
impressed, however, by a state¬
recognize here, it seems to me, is ment which President Truman re¬
that practically all the steel we cently sent to the Congress. In
can make today is
being shipped that statement he said this:
steel
left
things have
that
experience at the ings, flaming furnaces and roar¬
outset of World War II, I think we ing mills—ready to
provide our
must assume—for safety's sake— Armed Forces with whatever may
■f
match the output
never
plans
knows.
the probable demands that will be
Now
million
to believe that
this estimate is low. Certainly, in
cut
Next
four
tional defense program is going to
America.
ernment's
Can Match Any Other Output
can
is
can
and
industry
only
But since then many
world
record.
has
done,
to
tons.
to
export
ourselves
the
Fortunately
has
the
foreign nations—including Russia.
could
many years to
America's
in¬
an
in these 11 years—
increase six times
growth of
over
would
run
few months
program
mally would have been spread out
last
of
Increased
1939
Poland
testi¬
experts
the space of a
into
construction
of course, that our greatest
difficulty today lies in the field
1939, when Hitler's armies
invaded
arms
brush
oreju-
to
lot of the emotion,
a
again, the answer is sim¬
ple and factual: We are suddenly
men,
47%
Since
contrary—in
for¬
Here
defense needs up to next July first
That
50
In
Johnson
month. At that
time, they thought that our direct
trade!
suffer
with
military
early
happened and
cannot, and will «.ot, be peaceably
bearance—and
other
and
from the
Subcom¬
Secretary
recently, lead
settled—with
patience—with
program
comes
mittee
nearly one-third of all the steel-
labor was
Conceiv¬
that
say
willful and headstrong.
mendous
our
confronted
Appropriations
part of that increase has come in
will say those strikes
defense
our
six weeks old and
average,
that is NOT for me!
occurred
steel
House
sevenfold.
men
Do?
to
us
earthmoving equip¬
I don't see how any¬
by civilian demands ment. We must install heavy ma¬
alone is pouring more steel today one
can
be
expected
to know, that normally would have been chinery, huge conveyors, process¬
than all of the Communist nations
moreover, until we find out what spaced out over several years. At ing plants and laboratories. We
together are believed to be pro¬ deviltry that gang in Moscow is the same time we are facing a must have a
railroad, sorting yards,
ducing.
planning next. But when it comes flood of defense and military or¬ ore docks, and two new towns
So 1 think it is clear that the to
reading the Russian mind, I'm ders that might never have been for our workers—complete with
American Steel Industry has more
strictly a second-guesser myseif, forthcoming at all under other, water supply, power plants, streets
than fulfilled what is probably its
and happier, circumstances.
so if the experts are a little hazy
And sewers, and all the other costly
first responsibility to the nation about their estimates, what
right just as all these demands have improvements of modern munic¬
—the obligation to outproduce any have I to
been
complain?
compressed
into ipalities. Beyond that, we will
suddenly
possible combination of aggres¬
The only official information we one tremendous package, so the need a whole fleet of
sea-going
sors.
But what of our domestic have on the
subject is now about steel industry is now compressing ore carriers to
move
our
iron
ing the Kremlin's dirty game and
Some
brings
we
anybody knows exactly how
much
hour—
impugns the motives, the patriot¬
which
of
Bolivar, near the Equator, in the
deep interior of Venezuela.
Down there, we face the tre¬
ever
making facilities in America have
of Steel
All
will require.
over
Strikes Have Cost 29 Million Tons
Steel Industry
What Can
Thursday, September 21, 1950
.
think
brief commercial—I would like to
and year out—an average produc¬
important
Military
of Future
ci-
necessary
.
I
have
consulted third and final question: What is
with just about everybody except the steel industry doing about it,
the fortune-tellers,
and I don't and what can it do?
point out that United States Steel
third
equally
established disturbance to our
vilian demands.
Personally,
the other countries outside of the
dustry
and
no
Needs
present difficulties; but there is a
—
are
guide us.
Uncertainly
Will Do the Job
sparingly
some
l'irm,
simply
facts to
3
page
.
and many more
but today we.
think we've got it licked.
We
now,
are
building
our
pilot plants
and after that will come
a
Number 4944
Volume 172
host of great ore
rate and
The Commercial and Financial Chronicle
.
sepa-
Continued
I
2
page
*
\
.
it
tacon i
to
seems
te3 J
a
we
The
^hfnk^we^av^^nd
deposits
as
f,
.P. .'.f,
then this indeed
can,
we
oermitted to develop
we are
foreien
if
our
think
we
.
we
greatest contributions any pnvate
industry has ever made to any
nation. Whatever else the history
of tois great country of ours may
hold, I think it must then be rethat
corded
the
SUch
23
issuance
the
dividend
_
I
much
the
,
a
present
N. c. to Norfolk, Va„ a distance of
about
120
three
other
a
routes
„
PaS°"'he5r,n,
nnn
p,
r
/orll
* <£°-
»«?•• Jurnishes ice in
munities
,
with
population
a
of
;bQut
Qnly
repoit that
to be facing any
earned
the
strike'
Compagne d'E Electrique du
share ^ „aiti
(CEH)
Earned $14g,0oo:
to
things
200,000
out
$3 gQ per
pro-forma
stocks at
our
ing power.
340,000,
ore
These
three
-
Lakes
initiated
from
shipment
the
nickel
alloys,
and
scarce,
'
Ions
1
LOBER
Exchange
Stock
York
New
One
able
capital
is
of
A
against
and
copper
the
Governzinc, tin,
critical
any
nature.
rapidly
wan-
inpf
|
1/
crpin
/cn
to
seem
merit
That is why the steel
industry today is scouring every
likely corner of the earth for new
and reliable sources of supply, and
is negotiating, with patient deter¬
ably thin.
to
me
partic-
ular attention.
,
At
present,
the
Lober
Louis
is
SEC
considering a
plan filed by
mination, the development of the
foreign deposits it has recently
C. P. U. which contemplates the
discovered.
rnnort
mv
as
tn
the Story of
ha! well
areat
a
and
n,tinn'
™
I see
thp
"
and
T
the stock of another corporation
am
i.
duced
The
have
been
to
writ-
$800,000.
re-
is expected
It
the time the plan becomes
within
Associates, Inc., Rand Tower.
/
Opens
0f the above
C.
P.
is engaging
the
six
next
U.
P.
bonds
in the secur-
outsts
eration by the SEC becomes effective, this saving will no longer
be available, though C P. U. states
*kat uP°n consummation of the
will
it
plan
still
On
the
a
sub¬
period of
a
about 92%
r
the
P.
U.
interest
775,000
be
an
the
of
basis
the
of
212
Co.
(CIG)
and
area
Muncie,
Elwood,
Dunkirk,
v
,
are
gas
City,
City
Gas
requirements from
frpe Line Co.
Panhandle. Eastern
Carolina
Coach
Co.
(CCC)
di-
Operates
$285,000:
Earned
i-i
!;.
•
500,000
4
125.000
3
96.000
149.000
6
894.000
973.000
7
6.811.000
114.000
__
6
684,000
pesetas.
cannot
withdrawn
due
to
Gas
Spain.
y
For the year ending Dec.
31, 1949 the net income amounted
to
Spanish
pesetas.
are
blocked and
1,025,000
With
respect
companies,
'
*'
'
'
'
the
to
latter two
President
the
of
of dispos¬
Spain with the object
ing
the
of
properties.
Thus
far,
he has been unable to do this due
the
to
prospective buyers' inabil¬
furnish
to
dollar
exchange.
i
-
applicable
companies
the
to
Should
42,000,000 Spanish pesetas.
restrictions
be
modified
make
to
exchange available, a sub¬
sum
could
probably be
Total
Q
$21,008,000
valuation
th
the
figures
.
sjble va]ue Qf thfi
cgentral
dos-
£ndiana
bond is about $285,
that Qf the c
any owning
equivalent
per
the other properties is about $215
per
we
bond. Combining these values
have a
potential value of
$500
is
which
per
U. bond
C. P.
for
selling
presently
about $270.
from
the
sale
of
these
In
4
to be small
purchase of these
appears
the
in
bonds
the
around
at
Substantial
level.
these
bonds
With
(2)
appraise
nV
•
.«
•
any
be
balanced
values
or
the
As
be
S.
MOORE
New
York
City
ment
old
of
such
opinion
the United
Do¬
the thresh¬
States experi¬
ago.
the
f^y
Wat¬
Damage Commission has awarded
(but not, paid
the company
as
.
S
U.
The
to it
yet!) about 1',200,000 Philippine
r
'
'
•
"
>
•
i
t
>
i
'
■
'j
j
J
I
)
the
ests
outside
controlled
or
■'
company.
inter¬
the
by
,
The most important is owner¬
ship of 1,682,500 shares or 51.36%
of the stock of Consolidated Min¬
ing
&
This
Smelting Co.
holding
alone
prices amounts to
American
Pacific
tion,
the
at
land
to
In addi¬
the
than
more
oil
1949
of
1.6 million
acres
mineral
11
rights
million
held
and
Canada.
present
than $14
Canadian
on
end
owned
35,000 of which
to
at
Ordinary Stock.
company
of
of
more
share
a
acres,
under lease
were
companies for exploration.
from oil royalties is
income
The
small
at,
but increasing
holds "considerable
present
steadily
and
promise.
The company owns 11 ocean and
20 coastal
operation for
the
and
replacement
these
of
ships is consider¬
than balance sheet
higher
value.
The income
1949 was
steamships.
this
The 21 inland steamers
are
included in the railroad operation.
Also
owned
and
are
in
the
far
operated by_d.be
14 of the finest ho~
which
Dominion,
their
below
costs. "
ment
.)
are
replace¬
■
Earnings last year from all oper¬
ations
were
be
Canadian
$1.93
this
$2.50
and
and
between
somewhere
The
year.
income
Federal
tax.
offer
perfect hedge against both,
a war economy.
The
a
inflation and
railroad
the latter.
The
is listed
stock
The
Cana¬
the
other than
property
provides the former and the rail¬
on
the New
Pittsburgh,
Midwest,
1947
seeking
rapidly
dollar ties
the
our
tremendous
owned
and
To¬
Stock
Ex¬
Montreal
changes.
Budget
in
been
since
balance
to
1949.
of
those
to
against
ronto
With Barrett Herrick
each
and
(Special to The Financial Chronicle)
has
year
shown
1
Barrett
With
American dolS.
Charles
lars which
natural
where
many
Sehhimer, Atheric>i*
together Schirmer, Atherton & Co., 50 Con¬
gress Street, members of the New
created
Canadian
the
York and Boston Stock
He
was
Co.
and
Exchanges.
formerly with Raymond &
R. H. Johnson & Co.
instead of selling at 90.5%
this will occur in
strengthened
lifting
of
City.
resources,
S. R. Livingstone
parity or above. My feeling that
was
Inc.,
BOSTON, Mass.—Leroy H. Myhas become associated with
which will be in increased demand
situation
Co.,
rick
in 1947.
This financial progress,
Canada's
with
&
(Special to The Financial Chronicle)
Moore
compared with
the low of $461 million
Par¬
affiliated
become
Herrick
New York
held
$1,320 million
in
gold and
with
has
sons
of
1950,
As
Canada
MASS.—Ernest
BOSTON,
sur-
a
u s.
July 31,
at
action.
appeal
shrinking value of
in
of the American dollar should sell
were^v^relv ^amaa^^v
real
York,
has
1940
end
However, in spite of the prog¬
being made by the railroad,
War I.
dian
since
million at the
ress
World
dollar
u.
million
$10
duced
$14.5
road
the
at
of
that the
on
industrial expansion
great
as
enced
end
a
p.
$8,300,000 over a year
Fixed charges have been re¬
conclusion, Canadian Pacific
Railway Ordinary Shares seem to
Ordinary Shares)
minion of Canada is
improve¬
an
of
In
jn fhe above figures may
q
months showed
States
from the following
develop
other assets of
$1,701,293 in 1949 and the first
vs.
seven
$1.25 dividend is subject to a 15%
Canadian withholding tax whiefi
is
deductible
from
the
United
(Canadian Pacific Railway
my
road's
the
of
net was $3,842,107
July
should
Partner, D. T. Moore & Co.,
is
example
as
progress,
I would
element to
in
granted during the
past year.
$2.25
It
America
tels
con¬
freight
the lowest
spite of a
now
are
increase
company
less.
CHARLES
included
not
North
higher
by
which
rates,
carried
plan,
time
the
months
the
railroad
increased
in
.
the
place,
steady progress during
through dieselization
freight rates and
increase in labor costs should
and
of
be
to
respect -to
of
summation
holdings
said
are
hands.
strong
present
market
the last year
ably
.
There
(1)
made
$2,777,000
1
f f
*4
ignore
to
first
the
has
value
Summary
risk
willing
from
properties.
for U. S. rearmament, has
Additional
those
stantial
realized
,
prosperity
protection
Electricidad S. A.:
This
company
which is wholly
owned
by C. P. U. operates in
(3)
.*•
the
fluctuations.
These
blocked and
are
presently
exchange restrictions.
p
The company pur-
Fairmont.
its
Anderson,
Hartford
rectly and through subsidiaries an
South Seventeenth Street.'
above
32.000
^
miles with
1,600 square
includes
chases
staff
Corporation,
1,-
of
absence
capitalized
as follows the possible values appear to
favor the purchase of
C. P. U. bonds which are presmentioned
esfimated population of 166,500
and
(Special to The finanfcial'.'chrotftcle)
end-
Service
Indiana.
0f
secfjon
Alexandria,
OMAHA, Neb.—Frank V. Law-
roughly
was
Spanish
earnings
against those of Carolina
saving
their environs in the east central about
and
Joins Wachob-Bender
For
ending Dec. 31, 1949,
income applicable to the
net
C.
aforesaid
the
Electric
municipalities
23
embraces
Curtis, Med-
Gas
Indiana
in
retail
Pav-
The C. P. U.
of its stock.
year
six
year.
all
81,593,COO: Supplies gas at
Marion,
joined
of
19a0, follows:
30,
June
Earned
(Special to The Financial Chronicle)
has
the
carry¬
a
permit
savings for
tax
than
more
have
would
which
back
stantial
CEH
individual
their
with
together
Central
With Paine, Webber
Wachob-Bender
Canary Islands.
owns
in
operates
company
Electric & Gas Co., has been
A list of these assets,
& Gas Co.
ing
OMAHA, Neb.—Joseph J.
las is now affiliated with
ownership
sole
sgninr12 ezV
for the a months
West Third Street.
Jr.
1947,
November
securities of the Consolidated
CCC
months.
are
assets of the Consolidated
ities business from offices at 301
Webber, Jackson &
ical Arts Building.
the
dollar
since
U.
virtue of its ownership of all
by
PRG
(Special to The Financial Chronicle)
son,
earnings
is $3,146,000.
SCI
C.°
represent
GRAND ISLAND, Neb.—Alonzo
Ellis'
This
A.:
C. P. U. interests amount to about
356,000.
SDE
A. H. Ellis
H.
population served is
this indebtedness will ently selling at about $270 per
*Fther be susbtantially reduced bond.
Tms. Erngs. Valuation
Earnings
Pe consensus of opinion is that CIG
11
$12,023,000
$1,093,000
Minn.-Jeptha
Rasmussen
this
At
$1,300,000.
that by
Knox, Kenneth S. Nelson, and
C.
of
ing, the indebtedness has been
A
Minneapolis Assoc.
-
Jordon
about
which wi" be vested with the bal" Coaeh Co" 1 arrive at earnings °J
ance of the assets. The C. P. U.as $1,093,000 for Central Indiana and
a
June 30, 1950, was indebted to a $125,000 for Carolina Coach. If
a bank on a collateral loan in the the earnings of all the properties
•
the
is calculated
:
<
stake in
a
the
20%
should
U.
to hold
of Canada, I
Ordinary
Shares
of»
Canadian Pacific Railway Co. for
in
P.
exercised
ity
tomers.
future
favor
by C.
be
conta ns-
laitWully servect
the
to
(2) Union Electrica de Canaries
S.
industry Wat
served
applicable
''
States.
In order
roughly $990,000.
* Central Indiana Gas Co. and
(special to The Financial chronicle)
D.
at
United
interest, the total to be
received
option
is
The combined book values of both
I have made
faithfully
MINNEAPOLIS,
U.
against the earnings of Central
t
eat
*
Wltn
mcf per
cities of San Juan and
Piedras to about 12,300 cus-
suance in place thereof of the stock
sum
*jr.
3"
have
vou
boss
story
P.
tax saving and
charging $500,000 of this saving
gentlemen
the
of
proud
about
equivalent gas
cancellation of the 5V2S and the is-
there
th^ofcture
of
(PRG)
Coke
Through
the plan presently under consid-
Tnrnme
Porn
c
ture, but the long-range outlook
on manganese
is still uncomfort¬
&
Utility
Public
|
|
of
Gas
rvntral
tinn«?
ojt,]a_
these metals in the immediate fu-
And
3,400
to
inS consolidated tax returns and
thus has benefited by tax savings
of roughl.y $660,OCO per year. When
ruimher nf
|
industry
shortage
selling
$114,000:
miles
m'n nTThp
manganese
steel
that
award
C. P. U. has made several trips to
Rico
Earned
liquidat¬
a
ing or distrib¬
I
k
insure
buying C. P. U.'s 40%
shareholding
at
not
less
than
$750,000.
With the share of the
Rio
appreciation could
well
into "special situations
ada may require a change in steel
chrome,
million
38
mains sells about 410,000
willing to forego
for substantial
and
utive
will
of
year in the
income
immediate
|
specifications later on.
stockpiles of
about
annually,
143
(Central Public Utility Corp.
Income 514s of 1952)
get adequate quantities from Can-
ment
population of about
a
selling
Porto
Partner, Lober Bros., Member of
our
alone
tion
be
withdrawn
presently
exchange restrictions.
York
New
inability to
our
have the op¬
ernment then would
cannot
examine
the
Of
enough money to Manila to com¬
The gov¬
due to
the
on
LOUIS
plants.
really
serves
customers.
ore
to
mines
the
lend
to
water
mains
serves
two
cities
with about 283,214 million gal-
one
of
addition
obliged
Stock
vessel to carry
Beyond that we have
direct
rail
actively
now
above 70
which
and
in
and
is
earnings
unloading
limestone.
by
fleet,
40%
These
largest and fastest in
Great
our
self
boats,
ore
of
ance
yearly to about 26,200 customers.
Through
46
miles
of
bonds,
«on
new
the
be
of
kwh
traded
the Great Lakes
this year. But to meet this trans¬
portation problem, we are build¬
ing
sub¬
stock
Exchange around 50, could easily
have an ultimate workout value
now
they should be, and will be
still lower by next Spring, due
chiefly to the late opening of the
will
in
jines
than
shipping lanes
basis;
has taken place in the road's earn-
have bought
we
abroad.
Iron
plants are lower
tons
a
(
enough
foreseeable needs, and to
meet
help
obtain
can
we
on
convertibles will reap a larger
Compania Electrica Santo Doshare of the benefits accruing mi1?g0
(SDE)
Earned
$973,000:
from the pending reorganization Through
about
600
miles' of
ana the tremendous increase that
transmission
and
distribution
opening of new mines and
quarries may be necessary. Scrap
is always a problem, of course, but
think
the
of
37
the cost of its imports from the
on
.
protracted
Supplies electricity (about 10 milwe do not seem
1948. about $16 a share was re- lion
kwh yearly) in Port au
insurmountable problems so far as
ported.
For 1950 estimates run Prince and Cap Haitien, Republic
raw
materials and the other es- from about
$12 to $14 per share. of Haiti
through 160 miles of
sential
ingredients of steel are
More
conservatively
inclined transmission and distribution lines
concerned.
investors
may
favor the senior to approximately 10,100 customWe
have
plenty of coal and securities of the road. However, ersThis area's population is
limestone in the ground, although
the. patient holder of the MOP about 207,000.
we
60%
government
C.
stock.
common
.
operates
totaling about
„
$5 might
as
Also
miles.
253 miles.
Alter the
securities,
new
as
on
™ry
happy to
am
will
government
to
Manila, C. P. U. retaining the bal¬
Estimated earnings on the new about 27,000.
they will ever
long, long time to come.
So,
o£
be declared
all
need for
iron
the
o£
A
about
at
its
with
COmpared
class
new
created
be
In
common.
the
manner
WOuld
A
when-issued price of 28.
people of America
the
class
new
a
s£ocb
industry—in these years of patient
exploration
and research — has
given
thg
tQ
stee
American
scribe
basis, thus limiting their interest of about 285 miles, from Raleigh, plete its rehabilitation.
..
,
a
proviso
rehabilitate the
Under agreement, the
Philippine
Security I Like Best
ceive' on consummation, the new intercity transportation service
securities, or the>' might sell the extending from Charlotte, N. C.
Preferred shares on a when-issued to Washington, N. C., a distance
of the
is one
with
that it be spent to
£■
*.
properties.
that
me
($600,000)
pesos
..
concentrate, agglomerate
point this out, gentlemen, be¬
cause
a
from
(1117)
nodulize this iron.
and
if
factories to
.
.
of
import
items.
its dollar to
the
by
near
future
the
recent
restrictions
If Canada
ijar,
on
revalues
it will save 9)2%
Ackk
(Special to The Financial Chronicle)
DETROIT,
Mich.
&
Angus T.
Livingstone
—
Waddell is with S. R.
Co., Penobscot Building, mem¬
bers
of
the
change.
<'
Detroit
f't"
n *
i1 "> »
i
Stock
)c
Ex¬
38
The Commercial and Financial Chronicle
(1118)
stocks is apparent to anyone.
It is at such
Tomorrow's
It
market
the
such
on
progresses
Treasury-Federal Reserve Split
condition
period for
move
those
To
securities
*
question uppermost in
most people's minds is what
I am now looking for just
to
buy.
For the past few such a reaction on which to
weeks I have purposely recommend specific issues.
avoided
mentioning specific
*
*
*
except in passing fash¬
Federal
the
between
the
and
goats
tionary movement.
❖
%
#
have felt that
specific industries,
I
of
stocks
g., oils, sugars, steels, etc.,
would advance and suggested
e.
the
purchase of securities in
; It is only when the move that field. What has
happened
has gone to such an extent since is history.
that everybody believes there
*
*
*
is only one direction — up—
Incidentally the rise of the
that it is practical to start
rails is based
doesn't
This
choosing.
and
picking
I
that
mean
recom¬
The first
is
the
genuine fact
industry has been
the
that
two factors.
on
buying them on top of
moving peak loads, will prob¬
a move.
There is, however, a
ably continue to do so for the
pattern that practically all foreseeable
future,
and
is
mend
A
stock markets follow.
scale supply
and
The
of mortgages and, as
certain
made
Reserve
did
notes
Federal
the
not
that
move
the
in
up
In fact the Federal's sales
at premiums as low3/32 and 4/32 above par and
the
made
2%%
bonds
held
were
down
in
price to approximately 101. In
view of this the market began to
the scramble for
Of
course
that
news
the
war
comes
and the
from it will
.
likely
damaging inflation
Congress seemed
present tne President
to
asked
not
Until
the ^inflation
election
economy
might
him to do
so.
possibly
If
it
be
to
was
value
Might it
to lorestail the necessity
neip
Presidential
and wages?
action
prices
on
And, after election, if
expedient to resolve
seemed
it
Or
benefit
a
be greatest at tnis time?
lor
Re¬
good?
questions in favor of the
hope for a higher rate refunding Treasury, could this not be done
as now?
Un¬
issue such as an eight-year 1%% then just as well
bond although it expected hardly doubtedly the Board of Governors
more
than
a
4%- or five-year must have seemed determined.
1V2%
Thus
note.
months
10
for
any
Piecing Together the
the Federal pursued an aggressive
to
to
persuade
and
the Treasury into the
campaign
coerce
tablishment
term
of
the
it
The
pattern.
Treasury
but
the
higher
a
gave
Secretary of
ground
he resented
some
that
appears
es¬
short-
involved in the Fed¬
coercion
Reserve's open-market activ¬
eral
ity and he replied in kind.
this
is
rather easily.
sion
known
con¬
the
to
Treasury before the Secretary of¬
ficially
jelled
the
of
terms
his
offering. The Board's action could
well have appeared to be, if not
ultimatum,
least
at
another
fait
In
background
what other circumstances possibly
could have justified an open break
between these two important arms
of the government?
What is the
Treasury's position now?
What
spite
this
of
does the Federal Reserve have in
mind
its objectives?
as
How
position
case
would not the Secretary have
to its
the
vis-a-vis
this
the
were
had to accept either the Federal's
decision
tailed?
sion
the
or
Could
challenge
he
live
and
conviction
it
en¬
accept the deci¬
with
opposing
an
to the best interests
as
of debt management and national
may
the Treasury return
will
dominant
accompli.
If
welfare?
In
might
not
he
circumstances
such
have
done
what he did—and with
exactly
justi¬
some
Federal?
fication
for
theAbelief that the
likely that both par¬ Board might at the last moment
ties may have felt that they had,Y
change its mind?
made
their
respective positions,
And if the Secretary had had in
policies and convictions clear to
mind a combined offering of PAs
the other.
In the ,light of devel¬
and IV2S, might he not then have
oping conditions, it is now rea¬
failed to bring the latter into his
sonably clear that the Federal Re¬
conversations with the Federal,
serve
was
convinced that if
It
seems
play an important
part in intra-day movements.
But such news, though impor¬
tant, merely hurries and in¬
Pacific Coast
tensifies conditions that have
Securities
been
present in the market all
along. A shrewd trader will
recognize this state.
Orders Executed on
Pacific Coast Exchanges
they
short-term
Galveston,
D.,
Texas:
Schwabacher & Co. The those stocks column has on
only
I comment
this
a
are
Members
York
Stock
Exchange
New York Curb Exchange (Associate)
San
Francisco
Stock
Chicago Board
14
Wall Street
COrtlandt
Exchange
Trade
of
7-4150
Teletype NY 1-928
Private Wires to Principal
San Francisco—Santa
Ofjices
Barbara
Monterey—Oakland—Sacramento
Fresno—Santa
in,
mended.
If I tried to
Rosa
Per
A. T. & St.
Richfield
100
soon
deluged with requests. I
suggest either conferring with
your broker, or subscribing to
an
Shares
not
do
coincide
time
i
for
F.@ 133% Nov.18 $659.00
459.00
Mission
Corp. @ 54% Nov. 22
@ 79% Nov. 4
Y'ngst'n Sheet@ 191%Nov.lS
2$7.50
Halliburt. Oil
225.00
Cities Service @ 78% N iv. 24
South'n Pac. @54
Njv. 20
375.00
St'd Oil (NJ) @ M% Nov. 16
St'd Oil (Cal.) @ 77% Nov. 24
Grumm. Aircr.@ 34% Nov. 21
Glenn L. Mart.@ 16
Jan. 15
287.50
475.00
400.00
300.00
450.00
in
expressed
7
South. R'way @ 43% Nov. 20
market
the
Celan.
De-, 11
^ec. 9
112.50
112.50
162.50
@ 13% Feb. 2">
Put
<ft
Dealers
50
Calls
As*r>
Broadway, N. Y. 4
Brok"t*
£
ivc
Tel. BO <M470
de¬
before
sure
increase
the rediscount rate
in
the Federal Reserve Banks the
Board
the
acquainted
with its intentions.
President
In view of the
such
in
reasonable
the
matters,
to
it
seems
that
felt
convictions,
dent's appointee.
clear
the
Secretary
certainly
have
omitted
his
Now at this point
Slayton Co. Adds
(Special
ST
of
to The Financial Chronicle)
LOUIS, Mo.—Coyle T. Atch¬
ison has
been
Slayton
Olive
added
to
& Company,
the
it is
to
staff
Inc., 408
Street.
that
sure
Treasury
eral
was
the
quainted
the
con¬
on
we
can
Secretary of the
opposed to the Fed¬
Reserve's
moves
and
President.
so
4%~
offering of a
5-year 1V2% note. I am
or
certain
in
cil did not approve
Waddell-Reed
tion
(Special to The Financial "Chronicle)
KANSAS CITY,
Grant
and
with
Inc.,
Olive
408
Russell
Earl
affiliated
Mo.—Joseph A.
Waddell
,
Street.
are
&
• ;
now
Reed,
but
also
did
Could
it
the Board's
object?
not
ac¬
If
true, this would be surprising but
it could be rationalized as follows:
Prices
have
been
my
Treasury did
mind that the
own
confine
not
its
re¬
funding offering solely to \Vi% in
order to disappoint th£ market or
to squeeze rates.
held
a
which
The Federal still
substantial amount of
the
Federal
this
in
its bids the prospect was
the
this
changed its
I believe
the
came
felt
Treasury
about
and
somewhat
because
compelled
to their convictions
the
and
interests of the nation
up
to the
as
a
best
whole.
Subsequent events have under¬
the
scored
Federal
decisions.
At
the
serve's
its
handling
vestors
the
were
same
running
away.
Anticipatory
and
scare
buying
was rampant.
The fear of a fur¬
the
or
Treasury.
yields
trading
went
And
time
the
the
matur¬
securities
it
at
improved
progressively
along.
also
many
Reserve
repeated
The
as
first
officials
believed
at
be
100.
The
Treasury
had
supported
Secretary
of
the
publicly stated that his best esti¬
mate
fair
the
of
billion of
The
value
for
$14
Treasury securities
new
for
100
1*4%
a
of
coupon
months' term.
Reserve replied by
Federal
13
saying that this estimate of the
Treasury was too high and it pro¬
ceeded to make its
vail.
Today
will
sell
the
to
judgment
Federal
these
curities
1%%
same
yield
pre¬
Reserve
se¬
investor
the
1.35%.
Against
might
of
such
not
background
a
increasing
an
holders
average
number
savings
of
bonds question
whether they had
investment even though
good
a
the Secretary of the Treasury has
told them
May not
so.
increas¬
an
ing number of people place
in
credence
statements
letter
economists
chasing
more
the
columnists,
writers
and
future
pur¬
that
the
bonds
worth
of
of the dollar will
power
buy less and, therefore, both
ings
and
sav¬
will
money
be
less tomorrow than today?
\
•
What
About
Future?
Many professional investors
wondering just what the
and
Federal
port
price
of
is
Will the
continue
Reserve
the
are
score
what is likely to be.
to
sup¬
Treasury
se¬
curities? And, if the Federal sup¬
ports
them
port them
will
today
they
sup¬
sell them tomorrow?
or
This,
however,
from
"Alice
is
not
chapter
a
Wonderland"
In
or
the last chapter of that book. The
Federal
ing
attrition
power
in
the
that
purchas¬
of the dollar is
risk than
grave
believes
obviously
further
a
more
that involved
in
overruling the Treasury and up¬
setting the market. Apparently it
hopes to obtain an increased con¬
trol
the
over
member
a
positions of
reserve
banks.
by creating
It
hopes to do
so
price level for bank-
eligible securities such that sales
by
banks for the
taining
will
entail
purpose
restraining
a
of ob¬
extend credit
to
reserves
loss.
It
hopes
to
money
that savings banks and in^
companies may need to
increase
the
cost
of
surance
raise through the sale of compar¬
able Treasury securities. It prob¬
hopes
translate
to
Some
of
the demand for credit from banks
to non-banks and
thereby increase
competition for non-bank in-
the
vestable funds. If this
were
to be
it would increase compe¬
case
cost
and
of
found
they had paid too much for
Those
who
In
market
borrower,
available to
such
rates
securities
a
pro¬
for
and
all
high-
grade corporate bonds should rise
and
their prices decline.
under
such
Whether
procedure the
a
Treasury rate
year
one-
proved to
be
1.35%, 1%% or 1.40% is relatively
unimportant—at least to the Fed¬
be
Federal)
less
borrowers.
the
the
to
money
make credit
loans
maturing securities to
in the mar¬
(with
the
supply
coming
reinvestments.
on
re¬
that
not
ket
their
pegs
They
rumors
bonds should
eral. A
that
the
1947.
that 2V2% restricted
make their exchanges
the
quick to recall
of
Eve,
called
holders of
largely from
can
tition for such funds, increase the
course
yields than that offered by
these
market
its
rights but it of¬
outstanding
better
the
very
dropping
Christmas
Treasury
fered
of
affect the public state of mind. In¬
market for
ing securities
Re¬
technique is
market
open
gram
the
Federal
noteworthy because it shows how
some
tected
re¬
exceed
,
of the
phase
clear. The Federal pro¬
more
come
securities
of
materially
the
Treasury's
the
compro¬
Reserve's
'
determination to pursue
notwithstanding
would
a
figure.
This
ably
live
to
as
in
each
made
amount
deemed
program.
regrettable public" break
manner
party
l%s
they could have continued
sell had the Board
ac¬
be that the members of the Coun¬
Joins
last-
the
when
moment
mise
methods to be employed have be¬
necessary
depend more largely
jecture than on fact but
be
in
minute decision any
contemplated
no.
his
have
not
would
to
The Council, as
he
true,
ac¬
as
follow
must
recognize that the Federal Re¬
serve
might be equally forced to
follow
theirs?
Again
if this is
the
this year, strongly
With Piper, Jaffray
backed the Treasury against the
(Special to The Financial Chronicle)
Board.
Could it be that against
MINNEAPOLIS, Minn. — Drew the wishes of the President, the
C. Simonson is with Piper, Jaf¬ Council of Economic Advisers, and
fray & Hopwood, 115 South Sev¬ the Secretary of the Treasury the
enth Street, members of the New Board of Governors nevertheless
York
and
Midwest
Stock
Ex¬ went ahead? In my view the an¬
swer
to this question
is a very
changes.
recently
few
a
certainly if
to
between
They are presented as
the author only.]
he
would
that
also
only
at
1C0. And,
were
assume
members
Council
the Presi¬
on
he
that
nnee
THOMAS, HAAB & BOTTS
Members
financial
Committee one can
that before embarking on
any
necessarily at
those of
with
175.00
ru-
n
our
as
Douglas
be
of
of
the testimony
From
dent
125.00
Gimbel Bros. @ 20% Dec. 22
Subject to prior sale
line
first
the
Treasury securities
issue
1%%
tary of the Treasury is the Presi¬
200.00
Amer. Radi..
for
ing
32nds above
quainted. Nevertheless, the Secre¬
275.00
Nov. 20
Dec. 12
and
called
policy of caution—of sitting
tight in order to insure a stable
162.50
Corp. @ 38
@ 36%
Montg. Ward @ 55%
Radio Corp.
@17%
crisis
Korea
pattern be increased,
and of their sales of the outstand¬
those of
250.00
Homest. Mng.
in
a
this
187.50
Nov. 24
Steel. @41
international
in view of the Federal's insistence
that the rate
Chronicle.
•
Oil. @48% Nov. 2D
Armco
be
has
influence that the Council of Eco¬
investment service.
views
higher
a
Secretary
nomic Advisers has
I""-
Imperial Oil. @ 24% Feb.
would
be
article
•
I
others
on
[The
SPECIAL PUT"
The
involvement
recom¬ fense.
give ad¬
policy
re¬
a
made it clear that he believed the
an
vice
New York 5. N. Y.
and/or
position
exercise
to
interest rate would
necessary.
existing
S.
able
credit
straining
our
New
be
to
were
yesterday.
that
0
continue to
last
approximately
of
The Federal's deci¬
made
was
the
matured
Reserve
was
Picture
bit
likely
a
jecture, one can piece together the
remaining parts of the picture
an
What Next?
or
If
al¬
cash
for
redeem
which
Federal
compel
might not its psychological
not
the
Federal
the
to do any
move
harm?
in
Under these circum¬
would
stances
serve's
prior to
controls
to
$1,400 million of the $7-odd
dis¬
to freeze prices
In spite of the political
inexpediency of having to order
an
had
ury
most
billion
wage
this pic¬
As
day.
"sit it out.". In the end the Treas¬
had
powers
and
the third
developed most of those who
he
and wages.
price
as
have—namely,
to
cretionary
that
controls
day
second
they fared better bq.
well as those who waited
still held their "rights" decided to
more
some
the
on
that
until
ture
quite high.
with
to
however,
approached,
August
up
.
today
continued,
the
about
rates.
mar¬
making money. Much of the
is usually
buying in that group, how¬
friendless. Half-way up it ac¬
ever,
has taken the excess
quires some friends. As the
profits tax into consideration.
top of a move approaches its
Because
of
their
financial
friends are legion. It is then
structure, the rails are less
that the milling around starts
likely to be hit by such a tax
to happen.
than practically any other in¬
$
*
*
dustry in the country.
The scoffers of yesterday
❖
*
*
become the cheer leaders of
that starts
ket
argument
pound away at the 2*/2% restrict¬
ed bonds in the face of a large-
In the past few weeks rec¬
price.
ion, for the elementary rea¬ ommendations here have been
were
son that there is no separation
as
sheep in the start of an infla¬
the
by
acceptance
short-term
of
1V2 %
general.
the
further
no
i?
in. Treasury
investors
United States of the Korean chal¬
levels
ther and
was
refunding operation.
a
most
be lenge meant that there would be
to
avoided.
*
Federal's
the
tying
by
hands through a longer than usual
the
issues
found
down
a
and
future
the
to
Thursday, September 21, .1953
.
•exchanged
11
page
down again.
signs appear that
strong stocks of
the
indicate
By WALTER WHYTE s
As
is
that certain
Says—
=
accomplished
is
selling
start the market
Whyte
from
.
not
from strong hands to weak
ones and after a time enough
go
Markets
Walter
Continued
time that stocks
a
.
continuing increase in bank
and
bank. credit
may
well
the
signal for an increase in
the required reserves of member
banks.
ties
Sales
of
necessary
Treasury
to
meet
securi¬
these
in-
Volume 172
Number 4944
The Commercial and Financial Chronicle
...
requirements would have unless required reserves are in¬ of time. The selection of the is¬
entirely to the creased, the' rale may not go that sues to be sold in this instance
also should follow your customary
Federal and the rate at which the high.
The prospects for an increase in considerations but where an equal
Federal was willing to purchase
reserve
them would be important.
requirements are good choice exists between the sale of
creased
to be made almost
But
but
not
foreclosed
limiting factor exists. In
1947 and 1948 it caused the anti-
event.
inflationary objectives of the Fed¬
eral to boomerang in a big way.
might come within 30 days.
If
you believe thax you may need to
This
raise
a
limiting
is
factor
a
neces-r
tney
are
Such
funds
a
announcement
an
the
in
future
near
sity to support the Treasury Vh.% tnrough tne sale of bank-eligible
long-term bones at 100 or higner. Treasury securities, I would sugIf such bonds are not supported gest that you
do so now rather
than later.
The selection of is¬
in a manner that will insure pub
39
(1119)
the shorter-term 2V4S and 2V2S to
the
longer-term
bonds,
I
would
sell the shorter.
if
contemplate increasing
Investments in Treasury se-
you
your
curj. ties,
I would buy marketable
restricted
bonds
in
preference to
Intra-European Cooperation
Here, in Europe, much
sources
progress
vide
may
the
be necessary to pro¬
people with
ordinary
is being made in hammering out
new patterns
of production and
both the
means
increase
their
trade to replace and
I
improve
pre¬
patterns that cannot be
stored.
Habits of economic
war
re¬
co¬
operation
have
been
formed
which are already facilitating the
necessary readjustments; I think
we
may confidently
habits will be
that
expect
and the motive to
productive output.
think the history of almost all
the
more
the
industrialized nations of
world
demonstrates
that de¬
velopment is rapidly advanced
only when real incentives and op¬
portunities exist for the individual
to
push
sees
fit:
forward
The
he
as
farmer
himself
to
improve
his land and grow more crops, the
will result in even further
prog¬
more the Treasury is encouraged
ress
in intra-European coopera¬ small merchant to develop his
sues
to be sold should be based by your purchases
to use non- tion and in the
business, and the artisan to start
integration of
on your customary
portfolio con¬ marketable securities as a medium
his own small factory.
European industries.
The Bank
for raising new funds, the closer
siderations.
is
Basic to all these steps is an
ready
to furnish
whatever
If you contemplate the neces¬ our
financial
institutions
are
assistance may be within its ca¬ improvement in health, in educa¬
sity to sell restricted bonds, I moved toward a tight Federal
pacity to help in this forward tion and in public administration.
would not rush to market ahead control of their activities.
This will not come quickly and
movement.
In some of the
underdeveloped it will not be achieved easily. But
for that reason it is all the more
nations, I think we can also per¬
Qonnnue^ from page 14
J
r a
essential that the task be under¬
ceive an accelerating
the
Series
G
F and
bonds.
these
lasting and
The
^
lie confidence in their dollar price
—not in the
their
purchasing power of
but in their dollar
income
price—sellers
might
flood
the
quickly. Headlines of
large-scale price support might
accentuate the declining trend in
E bond sales. It could bring about
market very
measurable
a
enlargement of re-
demptions. Many holders of F and
G bonds
would decide to cash
them,
in
ment
judgment, the mo¬
protection for 2lk%
violated or in prospect.
100
bonds
my
was
That the Federal Reserve is aware
tempo
to break bottlenecks which
interfered with the effective
ways
had
distribution of goods, to augment
than five years. For the week
ending with the close of business
last Tuesday, the Federal Reserve
substantially the output of hydroelectric power in the Western
Hemisphere, and to expand food
bought $98 million of these bonds, production in a number of counIn view of the existing state of tries,
public mind, it has been and
the
Increasingly,
will continue to be inevitable that
protection
of
the
purchasing
power of the dollar is hopelessly
entangled with 100 or better pro¬
tection for the longer-term 2V2%
bonds. This does not mean pegged
does
It
forever.
rates
change
important
every
mean
that
mind or the
latter must be fully prepared for
the
of
state
the
public
is
One
to
bound
sympathize
Reserve Board and the Open Mar¬
ket Committee in the dilemma in
u\
iu
,
i
u
which the}
Vi
have found themse
s
during the past eight years a d
the new dilemma into which they
have
led
been
comprehensive
through
such
missions
sent to
by
their
convic-
similar
f
^Th ^realmry
for
but sympathy
will
e
reasons
the
resolve
not
break
ooen
or
bring about the desired coordinaDring aDOUl ine aebJieu tuuiuilw
tion.
We
Federal
can
only hope that the
will
Reserve
tread
cau¬
tiously, that its judgment will be
superlative
tion
that the resolu¬
and
the
of
problems will
without
the necessity
found
resorting
be
of
to Congress.
This completes
the story of the
and
background
the
picture
to
date.
The
Near Future
to
As
the
outlook for the near
future I expect to see strong sup¬
port rendered the restricted mar¬
If this support is not ren¬
ket.
dered
adequately by the Federal
Reserve
to
use
the Treasury may decide
In
the Treasury undoubt-
its trust funds instead.
such event
ddly would have to raise funds in
file market via the sales of other
securities, but the monetary inflation which would result if such
sales
were
made
to
commercial
have
Colombia, Turkey, Guate¬
Cuba, we can assist
assistance
should
we
be
their
to
more
to
able
their
use
effectively,
more
resources
own
contribute
to
than
development
through financial aid alone,
Bank's Credit Established
credit,
so
firmly established our
that we are now in a
we
likely
axe
need
10
loans,
tor
during the next few years at least,
the bulk of
our
borrowing
hag necessarjiy been in the United
to
the
see
markets
of
other
opening to our obliga-
;n„I,^nfinn
+v,«
Rant's
hnnHc
support for
from 2*2 s to assume large proportions if it is rendered in a bold
and
Further, as
and other credit con-
"willing" fashion.
real estate
trols take hold and
program moves
day's
sellers
aS|(he defense
into high gear to¬
may
be among to¬
morrow's buyers.
I
expect to see the develop¬
a somewhat higher short-
ment of
loans
bursed
amounts
but
the
to
undis¬
loans
of
already
lieve.
actions
previously
number
of
other
taken by a
countries—re¬
flect, I believe, the unique nature
of
our
securities, backed
not
are
only by
our
as
they
portfolio of
mark
,
a
-
step
^
new
forward
in the history of international in¬
Our concern through¬
out
sovereign nations.
is
It
the
has
that every loan we
been
fit
the
to
of the bor¬
This has meant
economy
rowing member.
also
encouraging
which
have
to
note
authorized
the Bank to begin lending their
18% capital subscriptions. While
I realize that many member countries may be unable to give their
unconditional consent at this time
to large ^quantities of unrequited
exports, I attach great importance
to our increasing ability to draw
lending, to use but one example—
and will make the Bank a more
truly ° international
institution.
This, in my judgment, is essential
if the Bank is to carry out fully
Because our credit has
firmly established, we have
to set up a system of
charges
which
compares
favorably with the current
on
most
dollar
bonds
as
been
the
to
to
concerned
the
that
only
not
assure
prospective
gain
over-balances
borrower
the burden of the debt obligation,
but
important, that the
more
even
project
financed
corded
proper
of
less well
the
work
na¬
of
and
responsibility,
hard
sacrifice.
been
an
division
ternational
concerned
appropriate
of
labor
in¬
by
+1
ments which influence production
and distribution costs.
case
development
Certainly,
it only impedes
wastes
and
scarce
can
provide impartial
questions of priorities
on means
nomic
for better mobiliza¬
environment
encourage
The task before
In
the
main,
I
few
minutes
which
which
will
productive investment,
private and
public.
Must Do
re¬
would like to examine
some of the steps which,
it, the underdeveloped
The
steps
us
seems
to me,
fundamentally, to be one of great
hope and promise. In this time
are
to
easy
state
but
continue to press ahead with such
take; their implications skill and
strength as we have at
obviously far-reaching.
But our command.
unless they are taken, the Bank's
aid is likely to be of little value
With Norman Mesirow
and the development problem may
hard
to
are
be
(Special to The Financial Chronicle)
to
seems
the formulation of
a
me
prop¬
erly
CHICAGO, 111. — Francis A.
Kenney
is
now
with
Norman
Mesirow, 135 South La Salle St.,
balanced development pro¬
gram, calling for investment ex¬ member of the New York Stock
penditures which are within the Exchange.
capacity of the country concerned,
including its capacity to borrow
With E. F. Hutton Co.
abroad, and for the allocation of
(Special to The Financial Chronicle)
those expenditures among differ¬
ent types of projects in accord¬
CHICAGO, 111.—Ruth L. Peter¬
ance with an appropriate pattern
sen is now connected with E. F.
of priorities.
I do not minimize Hutton
&
Company,
Board of
the
courage, the far-sightedness
restraint which this task
Trade
Building.
the
or
artificial government supports,
In
lending
its
operations
tion.
the
resting solidly on the two
pillars upon which must be built
and
strong
a
international
cjajiy
First,
of
lasting
revival
.investment,
requires.
of
espe-
as
each
tunity to stress the need for reestablishing the integrity of inter¬
contracts.
loan
And,
sec0I1(i, in our own loans we have
within
is under¬
completed, or
projects selected for imme¬
execution
are
not
those
than
taken
diate
of
the country
But development is
investment, only hindered if
private
of
between those of different
region.
if the
national
regions
judg¬
claims
elements of the community
have taken every oppor-
we
the
between
as
different
and
difficult
involves
It
ments
can
contribute
which
of
strength
more
be
the
most
to
economy
the
as
a
precautions whole.
A corollary to the formulation
satisfy ourselves of the ability
of a proper investment program
and wiHingness of the borrowers
is the adoption and vigorous exe¬
to repay them.
The standards we
have established
have, I think, cution of appropriate fiscal poli¬
I am thinking not only of
done much towards reviving and cies.
proving the idea that interna¬ the need to avoid the distortions
taken
be carried in an economy which are always
rewards both the fruit of inflation. I am think¬
ing as well of the adoption of tax
borrower arid the lender,
systems and other policies which
The Bank, then, has established
will
make
available
a
greater
firm foundation for its future
share of domestic wealth for de¬
tional
investment
wjth
0n
a
reasonable
ap
can
adequate
Within the limits of sound
investment
practice, it is a flex¬
institution, ready to adapt
itself to changing circumstances.
The effectiveness
^
^
_
of its contribu-
velopment purposes. It is, I sug¬
gest, a dangerous fallacy to be¬
lieve that the standard of living
of the masses can be raised with¬
out
some
alteration of those eco¬
the credit with the domestic interest rates tion in the years ahead, however,
nomic structures which permit a
restraining objectives of the Fed- prevailing today in the majority depends not only on a continuarelatively few people to enjoy
eral Reserve may be better im- 0f our member countries.
It is, I ..
f ..
Pffnrt« hut at ipast
on
It involves, for exam¬
capital resources to finance
ple, rejecting political pressures
projects which cannot produce on for monumental showpieces, and
competitive terms and which de¬ the
pressures of vested interests
pend for their continuance upon for enhancement of their
posi¬
ible
plemented but I believe that the think, worthy of note that, within
limit for the one-year rate the last few weeks, we have found
is unlikely to exceed 1^4%. And it possible substantially to reduce
and
We
both local and foreign,
What Underdeveloped Nations
to
encourage
term rate in order that
upper
front.
rights advice
different
has been ac¬
priority
in
the remain unsolved.
A first essential
plans.
also
have
We
to
work.
as
to those
borrower's development
very
yield
of
scrutiny of the particular with you
of trouble and disturbance in the
for which fi¬ as I see
world, let me remind you that the
nancing is requested and of the nations must take if they are ef¬ Bank was not founded to be a
relation of that project or pro¬ fectively to translate external fi¬
fair-weather institution. It has no
gram
to
the
economy
of the nancial assistance into the con¬ intention of behaving like a faircrete
substance of development.
country as a whole.
We have
weather institution now. We will
been
loan
well
ceptance
careful
its intended functions,
able
with a sense of urgency
commensurate with its importance.
taken
however,
Whatever
obligations
project or prbgram
Bank is
increasing number of member
countries
developed.
make should be of material bene¬
guarantee of 49
but by the
others,
vestment.
in the usual
similar
with
development is not tion of local resources. And with
something which can be imported the cooperation of our members,
from abroad. It is
Finally, we have established
something which we can aid, I believe, in creating
lending standards which, I be¬ can only be won internally by ac¬ confidence and the kind of eco¬
This action
recently taken by the
grapple
tions may be,
skills, and the many similar ele¬
authorities—and
to
problem
In
vanced nations
and
Lending Standards
only dollar obligations which,
up to now, have been permitted
to be listed on the Paris Bourse.
French
tough
ment.
made.
arp
the
probably would be far lesg on our 18% funds.
This will
than could result from the loss of widen- the
scope of our loan
confidence in the stability of the transactions — in
mtra-European
X do not expect such
the
tions and to note .tbat th<?se
taking into account such factors
Sations are receiving the high as the proximity of proposed
credlt standing which I believe is projects to the source of raw majustly theirs- To use but a single terials and to prospective mar-
banks
21/9% rate.
future
market, it is heartening to
gtates
me
willingness
In this whole process of devel¬
develop¬
less opment, the Bank can, I think,
progress is discernible.
play a significant role.
We can'
I have noticed a
tendency at provide financial support for some
times for development to be re¬ of the most useful
projects which
cur
commitment charge and to garded as
something which is due, we hope will generate additional
apply that reduction not only to as of right, from the more ad¬ productive endeavor on a broad
been
position to raise all the funds that
loans
i
survey
we
those of our member states desir¬
countries
Secretary1
those
as
and
mala
We have
members of the Federal
with the
assistance
If,
wjth technical help and advice.
and
changes
contemplated
their consequences.
have been able
we
supplement unanciai
the ing such
in
management of the public debt
and in monetary policies either
must be related to the existent
ing
Woili Bank Progress
In Troubled Times
of this danger is demonstrated by
ifs sharp reversal from the big¬
gest seller to a substantial buyer
of bonds with a maturity of more
of
economic activity and an increas¬
tlQ °f
s
f
'
*
equally upon the efforts of the
governments with which it deals.
most
In
of
a
some
nation's income.
countries, too, a fairer
the
country's re¬
allocation »of.
Your
RED
CROSS-must carry
on!
40
The Commercial and Financial Chronicle
(1120)
.
.
Thursday, September 21, 1950
.
i
The following
Indications of Current
Business
latest week
Activity
week
Latest
AMERICAN
IRON
Indicated
INSTITUTE:
STEEL
AND
operations
steel
(percent
Week
100.4
-Sept. 24
capa
of
or
statistical tabulations
or
month available.
month ended
Month
Year
Week
Ago
Latest
Ago
90.6
86.2
AMERICAN
of
1,936,400
1,921,000
1,747,400
ASSOCIATION
PETROLEUM
oil
Crude
INSTITUTE:
condensate
ar.d
Crude
of
(bbls.
average
9
-Sept.
5,908,830
5,759,630
5,674,750
4.903,450
at
daily
:
„
15,971,000
6,109,000
6,044,000
19,595,000
20,171,000
20,305,000
18,270,000
2,172,000
2,310,000
2,121,000
1,992,000
9
7,891,000
7,825,000
7,687,000
6.455.000
9
8,285,000
8,219,000
7,787,000
(M
gas
sales
and
unfinished
(bbls.)
gasoline
at
100.381,000
105,563,000
103,518,000
104,375,000
at
$
26,640,000
25,670,000
23,623,000
Steel
IRON
ingots
(net
71,597,000
69,179,000
63,053,000
and
9
42.727,000
41,437,000
41,810,000
,
OF
69,161,000
Revenue
freight
loaded
Revenue
freight
received
of carsi
from connections
Sept.
(number
of
"
CONSTRUCTION
"
—
751,276
852,321
847,465
623,962
Sept,
cars)
642,136
707,459
704,085
521,211
Total
of
construction.,.—-
construction
State
and
..Sept. 14
$219,743,000
123,324,000
$256,077,000
$250,145,000
192,884,000
169,697,000
63,193,000
80,448,000
89,846,000
Sept. 14
77,314,000
59,434,000
77,655,000
19,105,000
3,759,000
2,793,000
5,620,000
•
OUTPUT
Bituminous
S.
(U.
.
BUREAU
—
10,020,000
11,020,000
—Sept.
———Sept.
9
9
768,000
961,000
962,000
SALES
INDEX—FEDERAL
9
118,800
149,400
147,000
RESERVE
10,875,000
(In
output
(COMMERCIAL
STREET
AND
INDUSTRIAL)
—
DUN
SEED
310
273
273
Cotton
COMPOSITE
and
(per lb.)„
(per
gross
iron
6,449,101
6,028,527
6,369,830
5,579,105
165
145
186
185
Crude
AND
Sept. 14
at
,
3.837c
$46.61
—Sept. 12
_____
—
Sept. 12
.__Sept. 12
.
Scrap steel (per gross ton)
(E.
J.
M.
&
$40.75
3.837c
3.83*7 c
3.705c
$46.61
$46.61
$45.88
$40.58
$40.25
Export
Straits
Lead
tin
$25.75
(St.
York)
Louis)
(East St..
at
22.875c
23.500c
22.200c
17.325c
—Sept. 13
Sept. 13
.
at—
__
at
24.425c
24.425c
22.425c
17.550c
102.000c
97.500c
105.000c
103.000c
—.Sept. 13
__
16.000c
15.000c
12.000c
and
BOND
_
15.800c
14.800c
11.800c
Limers
15.000c
15.000c
10.000c
S.
Government
101.70
Sept. 19
Bonds
161.68
102.07
115.63
116.02
116.02
120.43
120.84
121.04
119.20
118.80
119.61
119.20
Sept. 19
115.24
115.43
115.63
Sept. 19
109.42
108.88
106.39
Sept.'19
111.81
112.19
111.62
Sept. 19
116.02
116.41
117.00
116.22
.Sept. 19
119.00
119.61
119.82
119.41
-Sept. 19
2.37
2.37
2.34
2.22
Sept. 19
Aaa
2.87
2.85
2.85
2.90
-Sept. 19
2.63
2.61
2.60
2.71
2.69
2.67
2.69
Sept. 19
2.89
2.88
2.87
3.21
3.20
3.23
3.37
-Sept. 19
3.07
3.05
3.08
2.85
2.83
2.80
July
2.70
2.67
2.66
2.68
Sept.
Sept 19
474.2
476.2
457.0
347.0
INDEX
MOODY'S
futilities
Banks
PRICE
EXCHANGE—SECURITIES
Odd-lot
sales
Number
of
Number
of
Dollar
Odd-lot
THE
ON
EXCHANGE
by dealers (customers'
bales)—
THE
N,
OF
Y.
Customers'
short
other
shares—Customers'
Customers'
short
other
9
81
100
99
72
9
738,187
729,058
646.656
380,248
135.6
134.2
129.2
Number
of
sales
PRICES
22,266
26,210
28.880
13,231
670,102
787,256
864,172
368,146
$28,706,532
$34,170,449
$36,852,830
$14,620,408
I
Sept
23,381
Sept.
sales
26,575
25,366
Sept
223
191
26,352
25,175
765,272
727,097
430,572
8,893
8,657
7,395
756,615
719,702
ESTATE
.Sept.
$27,193,488
$13,494,269
214,530
Grains
Livestock
margin
net
to
5.77
4.50
4.51
3.74
3.26
6.39
6.17
6.50
£9,418,000
£13,854,000
£2,221,000
$1,230,545
$1,208,326
$699,149
August
of
8.94
Aug.
debit
accounts—
balances
\
customers.—
in
banks
free
in
credit
U.
S.
288,130
712,050
547,657
74,697
85,053,070
82,000,115
68,667,723
125,256,745
Govt,
other
on
103,143
348,050
708,220
balances
bonds
U.
on
126,455
340,951
S
shares
listed
listed
125,209,399
133,642,800
I
222,849
144,381
713,650
393,318
$489,751
._
178,352
663,647
issues
collateral
FINANCING
U.
of
and
S.
June
Mutual
IN
$461,474
$323,183
NONFARM
FEDERAL
—
INSURANCE
SAVINGS
CORPORATION
(000's omitted):
associations
Loan
;__
135,918
Savings
banks
Individuals
91,368
293,452
204,949
96,758
companies—
120,743
301,137
companies-—
84,683
61,889
202,846
199,900
173,314
239,059
217,661
163,719
$1,465,469
$1,377,918
$1,018 427
$90,046,715
______
institutions
lending
Total
267,270
201,610
INCOME
SELECTED
RYS.
183,960
214,530
267,270
201~610
of
railway
258,960
341,650
132,670
-
fixed
from
charges
168.9
*167.7
164.9
154.6
-Sept. 12
181.7
*179.5
175.4
81,923,076
48,342,246
45,332,067
84,505,847
3,187,621
&
(way
equip.I—
3,121,401
72,049,636
structures
&
Amortization of defense projects—
.Sept. 12
2,582,771
85,533,630
45,220,845
42,302,814
35,725,621
1.372,254
.
income
Net
4,087,417
75,237,257
.
23,394,291
89,621,047
108,778,916
fixed charges.
$61,111,556
22,589,498
3,893,041
income
$67,031,549
22,625,242
112,571.957
income—
available for
Depreciation
LABOR—
I
-
deductions
Other
229,860
CLASS
Commission)
Commerce
deductions
after
S.
—--—
income
Income
U.
OF
June:
operating
income
Total
183~96b
ITEMS
(Interstate
—Month
Net
Miscellaneous
2
cl'
EXCHANGE—As
and
and Trust
Federal
products
OF
LOAN
Banks
424,712
$29,381,396
192G=J00:
Farm
5.89
5.99
BRITAIN-
LTD.—Month
borrowings
Income
OF
GREAT
carrying
of
5,860
654,118
.Sept.
DEPT.
5.99
—
IN
BANK,
of
Other
S.
6.61
6.66
15,975
$25,091,286
Sent
U.
6.36
OF
of August:
4.50
borrowings
157
23,159
663,011
Sept
~ sept
—
YIELD
16,132
222
-
Sept.
SERIES
2,417
,
ISSUES
Miscellaneous
—
sept!
NEW
749
2,400
3.51
value
AND
Sept.
shares
AVERAGE
customers'
AREAS
purchases by dealers-
WHOLESALE
1,252
1,907
omitted):
—Month
sales
Round-lot
7,349
9o7
(200)
hand
Insurance
sales
3,326
2,386
.
value
ODD-
dealers—
shares—Total sales
Other
467
490
129.6
Round-lot sales by
Short
848
250
349
5.92
Market
STOCK
value
Number of
177
._
Market
Savings
sales—
121
pounds)—
STOCKS—Month
Member
sales
Customers'
Dollar
(1,000
customers'
of
sept
total
83,313
134
1
extended
Total
sales
of
44,193
164
firms
157,135
sales
Customers'
Number
141,773
57,596
82,301
bales)—
31
STOCK
of
224,414
COMMISSION:
sales
73.799
49,546
53,336
___.
(000's
Member
229,360
Sept.
total
34,605
49,571
65,009
:
(125)
YORK
180,467
—
orders—Customers'
94,892
50,714
,
MIDLAND
NEW
9
purchases by dealers (customers' sales)—
of
81,712
48,314
v
1
on
purchases)—
total
73,634
43,146
__
_1
NEW CAPITAL
Cash
Sept.
shares—Customers'
66,340
88,745
(10)
172,955
INDEX—1926-36
ACCOUNT
-
.
yield
Average
237,995
orders
value
Number
*
ODD-LOT
SPECIALISTS
65,949
93,264
109,016
51,224
31
(1,000-lb.
Insurance
REAL
FOR
163,360
108,346
:_
(15)
317,217
Sept. 15
AND
61,255,000
110,559,000
136,002
(25)
191,916
A VERAGE—100
DEALERS
80,792,000
114,983,000
80,988
Member
TRANSACTIONS
59,523,000
118,382,000
(24)
9
Sept.
LOT
132,766,000
__
WEIGHTED
Credit
Sept.
STOCK
225,034,000
...
July
COMMON
200
ASSOCIATION:
REPORTER
66,671,000
167,553,000
.__
__
Produced
-Sept.
DRUG
48,656,000
31
July
Sept.
AND
31—
—
Fiber
31
PAINT
52,233,000
July 31
(running
Total
OIL,
50,748,000
68,051,000
87,477,000
2.84
-Sept. 19
PAPERBOARD
July
Shipped
3.18
_Sept. 19
NATIONAL
47,667,000
64,341,000
2.94
-Sept. 13
Baa
2.67
Sept. 19
COMMODITY
146,611
132,498
57,790,000
(tons)
Railroads
AVERAGES:
Average
MOODY'S
31
(tons)
Industrials
DAILY
208,265
333,993
109.79
Utilities
YIELD
July
Motes, grabbots, etc.
Stocks July 31
114.27
109.24
Group
BOND
117,352
177,800
(tons)
Shipped
115.04
119.61
Sept. 19
MOODY'S
47,229
128,307
Produced
103.90
Sept. 19
Public
46,300
of
____
(tons)
(tons)
Stocks
.Sept. 19
Railroad
3,710,000
*509,100
284,500
(pounds)
Shipped
.
U.
*37,615,000
*2,875,000
PROD¬
_
Produced
AVERAGES:
DAILY
SEED
31
(pounds)
(tons)
Stocks
14.925c
17.500c
at—
PRICES
35,350,000
4,398,000
630,000
(pounds)
Shipped
Hull
MOODY'S
49,983,000
____
Meal—
Produced
15.125c
.—Sept. 13
—Sept. 13
:
Louis)
tons)
tons)
(tons)_
July
(pounds)
Stocks
Sept. 13
York)
t
-15,892,000
$189,313,000
Hulls-
at
(New
(New
Lead
Zinc
,
"1,039,000
Oii—
Stocks
QUOTATIONS):
at
refinery
refinery
mills
Consumption
Cake
Electrolytic copper—
Domestic
t
•
.
21,410,000" 22,065,000
$334,948,000
$373,639,000
(pounds)
Shipped
PRICES
9,384,000
-
500,000
between
COMMERCE—Month
(pounds)
8hipped
Produced
METAL
;
Oil—
Produced
—
;
(net
(net
COTTON
OF
(tons)
Produced
BRAD-
&
__
ton)
lignite
tons)
(tons)
Stocks
PRICES:
steel
Pig
shipped
8,694,000
9,811,000
'.,.
Seed—
Stocks
Finished
1,372,000
anthracite
(net
coke
Reiined
IRON AGE
14,062,000
$116,864,000
"" 37,440,000
(BUREAU OF MINES)—Month
coal
Crushed
—
—
" 11,788,000
July:
295
—Sept. 16
INC.
80,160,000
August:
Stocks
FAILURES
$210,624,000
____
and
Pennsylvania
t.:
kwh.)__
000
credits
Beehive
6,155,000
SYS¬
Sept. "9
INSTITUTE:
•'
-
11,864,000
„
Received
Electric
-
10,500
AVERAGE—100—;—
ELECTRIC
EOISON
■
$237,634,000
•_
—
UCTS—DEPT.
STORE
TEM— 1935-89
*300
3,085,099
BANK
countries
COAL OUTPUT
COTTON
DEPARTMENT
*300
*4,277,036
OUT¬
RESERVE
August 31:
„
goods stored
on
789,000
-Sept.
Pennsylvania
Beehive coke (tons)—
300
4,139,239
Total
MINES):
OF
lignite (tons.)—X_I—
anthracite (tons)—.
4,534,855
87,297,000
Bituminous
and
coal
of
_____
foreign
of
COAL
July-
84,226,000
.Sept. 14
of
ACCEPTANCES
FEDERAL
—
YORK—As
warehouse
65,175,000
96,419,000
1_,
—:
6,722,771
6,192,438
alloy
ASSOCIATION—
exchange
Ba..ed
$156,021,000
—__Sept. 14
municipal
Federal
*8,071,294
;,«•
—
tons)—Month
DOLLAR
Domestic
—.—Sept. 14
—
J
8,194,531
5,668,898
produced
Including
shipments
Do.lar
Public' construction
castings
August
reporting
transported (tons)—
freight
NEW
Imports
.
S.
U.
Private
68,599
INSTITUTE:
Exports
NEWS-
ENGINEERING
RECORD:
135,183
carriers
Domestic
CAVIL ENGINEERING
2,016,811
94,390
July:
STANDING
(number
(net
motor
of
Volume
OF
for
oi
products,
TRUCKING
of
Number
RAILROADS:
AMERICAN
steel
steel
stainless
Month
78,231.000
and
of
BANKERS
ASSOCIATION
STEEL
AND
tons)—Month
Shipments
26.608,000
9
Sept.
•
2,220,593
152,222
-
sales (M therms)—
gas
AMERICAN
Sept.
Sept.
(bbls.)
Kerosene
2,926,174
2,679,562
130.079
._
therms)
(M
2,499,773
81,287
therms)
7,808,000
9
Sept.
——•,
refineries, at bulk terminals, in transit and In pipe lines-
Finished
2,711,139
sales
gas
AMERICAN
5,"243,000
9
Sept.
(bbls.»
average
9
Sept.
3tocks
—
(bbls,)—.
9
Sept.
output
-Sept.
Sept.
runs
Gasoline
Ago
42
—
.
stills
to
Mixed
output— daily
gallons each >
Year
Month
Month
therms)
(M
gas
Natural
Manufactured
AMERICAN
For
—
July:
Total
1,589,100
GAS
Previous
Month
Previous
99.6
either for the
are
on
Equivalent to—
-Sept. 24
production and other figures for the
cover
Dates shown in first column
35,552,043
34,029,963
1,372,995
3,029,253
1,369.037
31,370,587
13,276,309
25,795,150
12,844,577
1.464,695
3.24
taxes
34,360,843
7,372,741
2.30
1,055,752
2.24
$257,891,449
$257,556,877
$255,879,042
5,185,231
4,500,477
4,417,886
$252,706,218
income
$253,056,400
$251,461,156
2.200%.
2.230%
-
On
appropriations:
common
stock __r_
preferred
24,059,206
Dividend
166.0
-Sept. 12
166.5
168.2
167.4
157.6
On
-Sept. 12
241.5
239.6
239.1
214.2
Ratio
-Sept. 12
178.7
*177.2
174.2
164.5
-Sept. 12
260.4
260.0
255.1
237.7
-Sept. 12
157.7
*156.5
154.1
145.4
-Sept. 12
156.2
*152.8
147.6
139.3
-Sept. 12
134.9
134.7
134.0
129.9
-Sept. 12
175.6
*174.7
174.2
UNITED
stock
income
of
to
fixed
STATES GROSS
of
31:
July
General
fund
It
DIIRECT AND
DEBT
GUARANTEED—(000's
As
charges
omitted):
-
-
balance
-
:
167.7
.Sept. 12
220.0
213.2
214.3
189.6
-Sept. 12
127.3
125.2
121.7
118.0
Net
debt
Computed
annual
♦Revised.
fNot
2.200%
rate
including stock of American Tel. & Tel.
;
•
■
i
■
•
Volume 172
Number 4944
.
.
.
The Commercial and Financial Chronicle
Continued, from first page
the high quality and
liquidity they
provide, especially when they can
be bought close to par. At current
What's Ahead for
The Bond Market?
In the third place, the Federal Re¬
serve authorities
pursued an easy
policy to facilitate the fi¬
nancing of the huge wartime def¬
money
ing
matter
a
have
had
of
making
battle
would
we
rise in
greater
bond
prices and decline in yields
during World War II, were it not
for
the
huge bond
offerings put
by the Treasury in its succes¬
out
sive
loan drives.
war
These offer¬
ings provided life insurance
panies,
thrift
banks and other
institutions with a much-
needed outlet for
it not for these
be
may
com¬
savings
"tap" offerings,
that
sure
funds. Were
new
bond
we
prices
would have been driven consider¬
in pursuing a
policy and are
courage
credit
real contribution to the
a
against inflation.
The
fact,
much
a
great
restrictive
icits of the Treasury.
As
of the anti-inflation
scope
already
measures
since
adopted
the outbreak of the
in
war
Korea,
and others in prospect,
encourage
the hope that this time we may
a further major rise
commodity prices and another
substantial
in
cut
the
of the dollar.
power
purchasing
Whether the
If
we
were
are
again in
Savings
would
be
well
indicated
for
with
the
regard
bond
the
to
market
in
the period ahead :
(1)
Longer-term
bonds
a
tional
investments
to
an
shortage of
The
F
and
return
a
aggressive easy money policy
the part of the Federal Reserve
on
authorities drive yields still lower.
But
Mr.
Ihlefeld
[see page 15]
has emphasized the
all-important
point tnat we are now in a lim¬
ited, not
total,
a
erals in the field
they
must
pear
G
in which
Similarly,
of
and
On
tional
suffering
war
econ¬
pro¬
other
price
Government
ket"—a1
phrase
was
it
un¬
try to balance
budget and to restrict credit
the
ex¬
We
know
now
that this
was
a
Price
ceilings merely
postponed, they did not prevent,
inflation.
Once
ceilings
were
lifted, the wholesale price level
than
more
of
pressure
60%
under
inflated
our
the
money
supply.
In
that has
stated
limited
war,
is
it
the
policy of the Government
combat
thodox
inflation
measures
by
more
which
or¬
seek
to
correct
underlying causes, rather
than mere symptoms. It is planned
to defray most of the costs of lim¬
ited
warfare
the
same
by higher taxes. At
time, the Federal Re¬
authorities say they are de¬
termined to combat credit expan¬
serve
issues
somewhat
pegged in periods of
to
it
could
become
virtually
a
cessation
of
new
corporate and municipal bond
and
mortgages
the
tax
almost
no
new
is¬
home
available.
increases
fect and others in
Now, with
already in ef¬
the offing, new
financing by the Treasury should
on
a
the
decline
level
conditions
far
will
of
tend
industrial
from
be
from
further
a
certain
increase
we
the
was
as
the
activity,
that
in
lift
to
crisis
become
aggre-
The volume of corporate fi¬
their
est
during
This
those
to
net
effect
for
It is
But
outlays
courage
for
equipment in these
plant
the
fall
Shortages of materials and
prices will tend to dis¬
short
taxes voted
new
the
of
cases.
Treasury policies for help in
keeping inflation in check.
would be lessened
may
insurance
cause
satisfied with
available
doubtful
bid
so
are
yield differ¬
bonds,
such
many
attractive,
Governments,
it
is
issues
compared
for
mutual
as
savings banks.
(3)
Higher
far smaller scale than
resort
bond
to
and
rates
a
to
years
mainly
funds
finance
taxes
comes,
which
strength in the
municipal ob¬
The long-awaited large
of
return
will be
more
with
safety.
difficult to
They
secure
as
has
be
to
caused
centage of earnings
further
The
taxes
centive
to
tion
earnings
in
a
the
It
is
financing
bond
A
other
sharp
also
in
cut
propor¬
by
the
President.
shortages
well
as
higher
and
Materials
prices,
as
requests from the Federal
should lead to
Government,
tailment
works
of
other types
that
quired.
not
are
At
the
cur¬
public
urgently
same
time
re¬
that
sustained period of
ings will decline, demand for mu¬
nicipal
bonds from
commercial
and
volume
of
high level pro¬
employment that is
the
contraction
building
will
in
tend
the
to
volume
of
the
and
banks
the
and
of
tax-exempt offer¬
individuals
stimulated by
bonds
are
attractive
because
of
increases,
has
been
the prospect of tax
supply
of
reducing
available
buyers.
to
further
other
War
II.
inflation
a
purchases of
War
government
the
root
inflation
from that
II
period
made
by inadequate tax levies
was
great
of
cause
which
the
developed
war.
Opening of Series F and G
sav¬
ings bonds to additional subscrip¬
tions by savings institutions, up
to $1,000,000 for each institution,
shows the Treasury's intention to
finance the government deficit, so
far
as
possible,
securities
cial
to
through
other than
sales
of
commer¬
banks.
It is completely compatible
with
the
public
the
classes
for
it
bond
The
check
resumed
a
supply
Treasury's
debt
to
oft-stated
management
offer
issues
to
new
of
mort¬
new
in time be reduced by
controls,
materials
and
-
combat
credit
satisfy
the
ments of
inflation
investment
to
and
require¬
savings institutions.
Changes in savings banks
earn¬
ing assets to be brought about by*
these
their
conditions
high
will
quality
liquidity.
But
maintain'
increase
and
narrowing of
some
the margins of earnings over ex¬
to
be
dividend
and
penses
expected.
adequate
earning
problem
for
agements
payments ia
Maintenance
likely to become
a
more
savings
of
thus
pressing-
bank
the limited
as
is
power
man¬
war
pe¬
riod is prolonged.
With Milwaukee Co.
(Special
to The
Financial
Chronicle)
1
CHICAGO, 111.—John F. Fralick
II has become associated with The
Milwaukee
Company,
Salle Street.
viously
was
policy
marketable
mutual
With
Mr.
135
South.
Fralick pre¬
with Blyth & Co., Inc.
McDonald, Evans
(Special
Treasury financing and
would avoid
World
that
could
reduced, to
security holdings.
necessary
,
activity has already been ordered
are
securities by commercial banks in
decline.
housing
military preparations expand. The
duction
tensive
tax-exempt
will
commercial
adding to the already very large
money supply.
It was the ex¬
in¬
business,
public
investments
Such
likely that the volume of
and
than
credit control policy
thus lessening borrowing needs.
municipal
expe¬
World
further
of
(4)
The Treasury
will offer
long-term bonds suitable both to
La
ernment
per¬
personal
large
in
other
to
other
the
to
provides added
retain
lesser
(3) The supply of corporate and
exempt
obligations
is
not
likely to expand.
tax
banks.
offset any expansion of their gov¬
dividends.
as
increase
income
of
during
fears
far
was
a
shortages, and rising pricesj
existing mortgage holdings
will be gradually reduced by
pay¬
ments on principal.
Maturing
(3) Commercial bank loans and
in¬
smaller
a
at
than
increase
securities
of
sale
commercial
than
banks.
stock¬
reconciled
of
the
by
others
tions
This
personal
upon
deficit is fi¬
Treasury securi¬
ties are refunded, so far as pos¬
sible, through the sale of obliga¬
tendency has been encouraged by
distribution
market for State and
expansion.
I have said if:
(2)
extent
They have relied
internal sources of
upon
to
holders
obliga¬
tax-exempt
smaller
than in the past.
offerings
of
to
due to
spending
government
as
nanced
financing in recent
much
a
danger of inflation
The Treasury
(1)
corporations, outside
public utility field, have re¬
sorted to bond
probable decline in the volume of
tions will make for
financing.
American
the
heavy
tax
The
this is done,
reason for them
was
eral Reserve authorities are show¬
to
Be¬
aggressively for
corporate
that
cause
companies
narrow
be
with
even
somewhat.
in¬
tain
no
be
date
government spending.
Therefore, we need to look to cer¬
there
will
to
prospective
in
crease
and
porates
and
tax-
military needs on a
"pay-as-we-go" basis, in order to
reduce the danger
of inflation.
heavier
narrow
and
increased
pro¬
particularly
out
civilian
Where
to
mortgages,
highly desirable to finance
Government.
widening,
limited
adequate for the requirements of
savings institutions.
true,
capital needs with the aid of the
from
the
of
new
porate bonds will tend to prevent
yield differentials between corgovernments
though
of
labor
Particular inter¬
bonds.
Producers of military goods, on
the other hand, can finance their
and
patterns
while
attaches,
outlook
curtail
may
turning
mutual
hoarding spree ends and consumer
spending returns to more normal
World
expenditure
applies
of
(1) An upward trend in savings
likely to be resumed as the
is
Treasury Financing Prospects
industries
problem
savings banks:
credit
therefore, to
the
offerings
of
Treasury bonds at rates of return
will
may prove
case
capital
goods.
moderate, typical of a limited as
opposed to a total war situation.
investment
(2)
exempt
is
it
there
the
war
may
gages will
supply of
corporate
obligations
of
Some
issues
we
rise in savings bank deposits.
economy is thus likely to be
time a curtailment of the ag¬
War II.
new
limited
economy,
in
be living for a
long time, is thus likely to have
the following
effects upon the
rate
gregate
In
higher
ahead
de¬
in interest rates.
The
now
volume
nancing and mortgage borrowing
rate
yields
broad
yet in sight.
that would divert savings to other
corporate bond financing.
an
will decline, although the contrac¬
tion may be quite gradual and
will
in
15
page
sharply increased defense
spending
in
sell
improve the quality of outstand¬
necessitated by the huge deficits ing mortgages.
of World War II.
And the Fed¬
(2)
Long-term
Government
be
result
cline
in
volume should the in¬
ligations.
by direct credit controls like
volume
of
tax-exempt
Federal
Regulation
W,
and
by
raising
housing bonds will not materialize
short-term
interest
rates,
even
in a limited war economy.
against
Treasury
opposition
to
On the basis of these prospects
such a policy.
for the bond market, the following
It is not to be expected, there¬
would be rational features of an
fore, that the impact of limited
investment policy for mutual sav¬
war upon the bond market will be
ings banks:
a repetition of what
happened in
(1) Amortizing mortgages meetWorld War II. Reduction in the
volume of corporate and municipal ing reasonable quality standards
remain a highly desirable invest¬
financing and in mortgage bor¬
rowing will be gradual and mod¬ ment for savings institutions be¬
erate. During World War II there cause they provide a satisfactory
sues
be
not
from bond investments that would
sav¬
Supply of Other Investments
While
grams.
sion
was
will
yield
policy
Therefore, there
war
The
mar¬
hitherto
changed
fact, the opposite
be
since
them
means
The
which
outlets
ket will
weakness,
entials and
this
from
not
are
Conclusions
repetition
a
of the extreme easy money
The decline in the supply of cor¬
pansion.
delusion.
will not have
we
Problems of Savings Banks
ad
longer-term
bonds
Only
new
(2)
basis.
Current Investment
mari
securities
investment
However, of¬
long-term marketable
of
rienced
above par. With a war
emergency,
it is the more likely that the mar¬
ternational
assumed
made
to
necessary
the
supported
substantial
placed
was
It
ceilings
Federal Reserve authorities
ings bonds cashed before maturity.
Since there are very good reasons
infla^,
hand,
in
vated.
inflation
this
on
interest
serve
be
II, chief reliance
price controls.
in
might stimulate
the
necessary
on
the
with
occurs
ferings
is
summarize, I think that the
anti-inflation program being pur¬
sued in Washington and by the
event
substantial
a
as
income
To
other investments with¬
penalty such
to be expected
are
weakness
would
Inflation
to
tion.
the
out¬
attractive
more
of World War II.
out
the
as
Government
decline
a
that
New Means of Combating
rose
that
meant
duce.
that
prevent
rates
engaged.
this type of conflict will
prevent
are
bonds
to
various
far
their
of
that
the
we are now
to
to
by
so
It may be found that
certain State and municipal bonds
provide
the
portion
change in economic condi¬
tions, he could switch from such
learning that
are
War
In
manager.
provided
concerned.
a
strategy
Our Gen¬
in appraising
World
bonds
flexibility
taxes
taxed
to
the
cally different kind of
In
Series
bonds, which thrift in¬
face.
look for the bond
market, we must
take fully into account the radi¬
omy
than
after
types of investment
stitutions
buying support, since it re¬
mains the policy of the system to
maintain
"orderly conditions in
tactics to fit the different kind of
war
Bonds
attractive
more
and
should bring renewed Federal/fle-
war.
modify
G
Marketable Treasury bonds
acquired at a small premium ap¬
are
Reserve banks
to
and
(3)
likely to hold close to
Continued
their present prices. In the event
of strength developing in the mar¬
institu¬
ket, further sales by the Federal
new
their
meet
coupon,
offering.
new
advised, in that event, to bid ac¬
tively for available investments,
before
to
municipal bonds and
planned for early next year will restricted to such
buyers. It would
impose a Federal levy on mutual be
logical to give such bonds a
savings banks. Once mutual in¬ maturity
of
approximately
25
stitutions
elre taxed,
they will years, as was done in the World
want to compare the net return
War II loan drives.
part of a
greater
light of this background,
think the following conclusions
outlook
in State and
marketable
par as
Marketable
Outlook
a war economy.
banks
long-term
limit.
Conclusions As to Bond Market
during1 the current emergency.
Treasury has said again and
again that it seeks to fit terms ot
The
other
new
portfolio
are
to
a
result of it.
to be supported at
by the Federal Re¬
par
quate
offered
a
present
levels, and
minimum of deficit financing as
I
be
to
can
purchase this year
$1,000,000 in excess of the
usual $100,000 subscription annual
rates
In the
solely
by the World War II experience,
therefore, we should
expect
a
strong bond market now that we
need
much
about
at
interest
continue
above
or
new
Treasury bonds at
up
investments.
be guided
to
will
to
expect
of
will
requirements, the Treasury should
money.
It is improb¬
tax-exempt obligations, in be prepared and willing to fill the
able, therefore, that there will be view of the statement by Senator
gap by offering long-term market¬
early opportunities to subscribe George that the new
tax
bill able bonds with
a
21/2%
F
higher, and yields would
have been depressed much
further,
by the acute wartime shortage of
institutional
that
raise
anti-inflation effort is entirely or
only partly successful, we may
stability
to believe that Government bonds
4|
levels, they involve only a ve^ry serve banks, the added risk of its
security offerings to the re¬
slight risk of adverse price fluc¬ holding a marketable bond seems
quirements of the several classes
tuations.
The increases in taxes
negligible, and the yield is very of investors. Since the aggregate
already voted and contemplated nearly the same, when the market
supply of mortgages and other
will reduce deficit
financing, and premium above par is small.
investments
available
to
thrift
so lessen the
prospective supply of
(4) Mutual savings banks are institutions is
likely to be inade¬
new
long-term Treasury bonds likely to become more interested
really escape
in
ably
other
(1121)
savings
banks and other thrift institutions
to The
KANSAS
W. Brown is
McDonald,
Baltimore
viously
now
—
Robert
associated with
Evans
A.
Chronicle)
Mo.
&
Avenue.
with
Company.
Financial
CITY,
H.
Co,,
He
was
100&
pre¬
Bennett
&
42
The Commercial and Financial Chronicle
(1122)
Alabama
Power
Birmingham, Ala.
Co.,
28 filed 64,000 shares of 4.20% preferred stock
(par $100) offered in exchange for a like number of out¬
standing 4.20% preferred shares of Birmingham Electric
Co. No underwriter. Offer expires Sept. 22. Statesment
effective Aug. 29.
share). Underwriter—Goodbody & Co. and John F. White
& Co., New York, to handle sale.
Proceeds—To selling
Pa.
Organ Co., Allentown,
July 19 (letter of notification)
1,500 shares of 6% pre¬
ferred stock (par $100) and 750 shares of common stock
(par $100).
Price—At par.
Underwriter—None. Pro¬
ceeds—For expansion of plant and development of other
electronic
Office—8th
products.
Pittston
and
other
Sept. 7 filed 80,000 shares of cumulative convertible
pre¬
assets and to repay short term bank loans.
Chase
Candy Co., St. Louis,
Office—
rights in Alabama and Texas.
620 Massey Bldg., Birmingham, Ala.
American-Canadian
Uranium
147,861 shares of
to
property
first
be
offered
F. S. Yantis &
two
shares
offered.
to
the basis of
on
stock
stockholders
common
Co., Inc.,
held.
Mo.
common
Unsubscribed
one
shares
(par $1)
other
than
share for each
be
to
Price—To be filed by amendment. Underwriter
Co., Inc., Chicago, 111., who had in June,
1949, purchased 200,000 shares at $2.50 per share. Pro¬
ceeds—To selling stockholders. Expected this week.
City Stores Co.
July 17 filed
149,317 shares of common stock (par $5)
offered in exchange for common stock (par $10) of Op-
Securities
penheim, Collins & Co., Inc., and for the 4%% convert¬
ible preferred stock (par $50) and common stock (par
$1) of Franklin Simon & Co., Inc., at the following
Co.,
Inc.
Proceeds—To explore and acquire
American
Motorists
ore
Insurance
bodies.
Co., Chicago
June 28 filed 100,000 shares of capital stock (par
ratios:
$5) be¬
ing offered to stockholders of record July 25 at rate of
one
share for each three
new
Sept. 25. Price—At
purposes.
held; rights will expire
on
Proceeds—For general corporate
par.
Business—Casualty insurance.
Statement ef¬
llk
share;
two
shares for each
shares
and
share
Franklin
for
share
one
Simon.
Manager—W.
for
Franklin
each
Offer
two
expires
Hutton
E.
effective Aug.
Oppenheim, Collins
each
&
Co.,
Simon
shares
common
Oct.
on
New
common
preferred
York.
of
Dealer-
16.
Statement
Inc.
(9/22)
Aug. 3
Sept. 12 (letter of notification) 50,000 shares of 6% con¬
vertible preferred stock (par $5) and 100,000 shares of
class
A
stock
(par
cent) in units of one preferred
Price—$5.20 per unit.
Under¬
writer—Gearhart, Kinnard & Otis, Inc., New York, N. Y.
Proceeds—For expansion program, to repay advances
and two class A
and for working
Power
Calif.
&
Light Co.
Telephone Co., Ltd., Santa Monica,
Consumers
June 23
to
filed
loans and
Bids—Expected to be opened
on
for
new
ers
Sept 5 filed
$1,760,000 of
due 1965 (convertible into
5%
the
rate
of
one
new
Continental
July 28
Refrigeration Corp., N. Y.
(letter of notification)
vestors
Underwriters-National In¬
15,000 shares of capital
per
share).
•
Service, New York.
Continental
Proceeds—To pay expenses
Sulphur & Phosphate Corp.,
Dallas
Texas
(letter of notifictaion) $200,000 of 4% one-vear
promissory notes (to be convertible into common stock
Botany Mills, Inc.
Sept. 15 (letter of notification) 300 shares of common
Stock (par $1). Price—At market (estimated at $9.50 per
of
one
of
share
notes).
of
stock
common
Price—$1
per
for
unit.
each
$1
face
Underwriter—
Proceeds—To purchase mining claims in Wyom¬
Office—Tower Petroleum Bldg., Dallas, Tex.
ing.
Dayton Power & Light Co.
filed
13
be
sold
to
5G,000 shares
employees.
of
-
stock
common
Price—To
be
(par $7)
each
six-
month period by subtracting 15% from the
average
for the preceding 12 months.
Underwriter—None.
price
ceeds—For
struction
general
funds
and
used, in
set
part,
for
Pro¬
con¬
program.
Delaware Gazette Co.,
(letter
8
—The
Delaware, O.
Ohio
Company,
Columbus, Ohio.
building.
Proceeds—For
to 11.30 a.m.
Market
St.,
(EDT)
on
Sept. 26 at company's office,
Wilmington,
Del.
Statement
effective
(
Detroit Hardware
Manufacturing Co.
Aug. 4 (letter of notification) 100,000 shares of common
stock
(par $1).
Price—$3 per share.
Underwriter—
C.
G.
McDonald
facilities
Private IVires
m&mwrnmma
to
all
offices
Cleveland
Gas
Co.
•
■
(9/21)
Aug. 31 filed 230,000 shares of
common
stock
(par $3)
offered for subscription by common stockholders of rec¬
ord Sept.
19 at the rate of
held
share for each 10 shares
one
with
on
an oversubscription
privilege; rights will ex¬
Oct. 4. Price—$21.37 % per share. Underwriter
—White, Weld & Co.
Proceeds—To retire either a part
of the outstanding 2V2% bank notes maturing in 1951
and 1952 or a portion of the 3A/2% convertible debentures
Statement effective
1963.
due
Sept. 20.
'
Equipment Finance Corp., Chicago, III.
Aug. 7 filed 10,000 shares of 4% cumulative preferred
stock, to be offered to officers and employees of this
corporation and of Curtis Candy Co., parent. Price—At
par
($100 per share). Underwriter—None. Proceeds—
acquire equipment and real estate for
13.
its parent.
Family Finance Corp., Wilmington, Del.
19 filed 200,000 shares of common stock (par $1).
Underwriters—Mer-:
Sept.
Price—To be filed by amendment.
rill
Lynch, Pierce, Fenner & Beane and G. H. Walker &
Proceeds—For corporate
purposes."
Fedders-Quigan Corp.
June 21 filed 103,402
vertible preferred
shares of series A cumulative con¬
stock (par $50) to be offered to com¬
on
basis of one preferred share for
mon
stockholders
each
12 shares held.
Price—To be filed by amendment,
along with dividend rate.
Underwriter—Smith, Barney
&
Co., New York. Proceeds—To pay promissory note,
to complete purchase of a# new plant at El Monte, Calif.,
and for additional working capital.
Offering postponed;
• \
N. Y.
stock
(par
cent). Price—50 cents
McBride, New York.
one
"
*1 •*
1
(9/25)
per
writer—John F.
Florida
share.
Under¬
Proceeds—For
ex¬
Office—139 Duane Street,
pansion and working capital.
Y.
New York, N.
Power
Corp.
(10/2)
(par $100). Underwriter — To be determined by com¬
petitive bidding. Probable bidders: Kidder, Peabody &
Co. and Merrill Lynch, Pierce, Fenner & Beane (jointly);
Lehman Brothers; Union Securities Corp.
Proceeds—To
bank loans and for construction program.
Opening of bids tentatively scheduled for neon
repay
Oct.
Bids—
(EDT)
2.
•
Gardiner
Building Corp., Gardiner,
Me.
(letter of notification) $45,000 of 4% sinking
fund third mortgage bonds due Nov. 1, 1971 to be sold
in denominations of $500, $100 and $50.
Underwriter—;
None.
Proceeds—For acquisition of land and construc¬
tion of shoe manufacturing building.
Office — Water.
15
Street, Gardiner, Me.
•
General
Minerals,
Las Vegas,
Inc.,
Nev.
Dietmann, Jr., of Los Angeles, Calif., and
Neville, James H. McCarthy and James S,
Shea, all of Las Vegas. Proceeds—To develoo mineral
properties. Office—711 North F St., Las Vegas, Nev.
;
A.
Richard
L.
General Radiant Heater Co.,
and its two subsidiaries. Bids—Will be received
Sept. 18.
San Francisco
Natural
Elliott
and
&
for
postponed.
Sept.
6
cents).
Amendment may be filed.
Shoe Corp.,
General
June
30
in
filed
a
Nashville, Term.
maximum of
32,885 shares of
common
(par $1) to be offered on a share-for-sha re be si 3:
-stock
exchange
Douglas
for
outstanding
preferred stock of W L
Statement cifsethe
Shoe Co. No underwriter.
July 25.
Gosselin Stores
Co., Inc., Oklahoma City,
Gkia^
Aug. 15 (letter of notification) 27,000 shares of class Acommon
stock (par $1) and 220,000 shares of class B,
common stock (par $1).
Price—$1.3 0 per share for both
issues.
City.
Underwriter—R. J. Edwards, IraOklahamal
Proceeds—To expand chain stores.
Co., Detroit.
working
Proceeds—To expand
capital.
Office—1320 Mt.
Corp., New York
Mines
Granville
Corp.,
Ltd.,
British Columbia.
Canada
Feb.
Stores
(par 25£V
Price—$3 per share. Proceeds—For plant and warehouse,
advertising research, working capital, etc. Temporarily
Avenue, Detroit, Mich.
Diana
Inc.
170,000 shares of common .stock
May 3 filed
(9/26)
Aug. 29 filed $12,000,000 of first mortgage and collateral
trust bonds due Sept. 1, 1980.
Underwriter—To be de¬
terminated by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co. and Salomon
Bros. & Hutzler (jointly); First Boston Corp.; Union Se¬
up
Philadelphia
Under¬
Office—
Building, Cincinnati 1, O.
Paso
—Aloys
of
Delaware Power & Light Co.
600
Chicago
El
share.
construction of newspaper
company
Pittsburgh
American
per
Proceeds—For corporate funds.
Sept. 11 (letter of notification) 2,500,000 share* of canital
stock. Price—At par (10 cents per share). Underwriters
Corp.; Lehman Brothers; Morgan Stanley & Co.;
White, Weld & Co. and Shields & Co. (jointly); W. C.
Langeley & Co. Proceeds—For construction program of
Boston
going market value, about $20
writer—None.
Sept.
curities
New York
—At
None.
selling
•
pur¬
Sept. 1 filed 40,000 shares of cumulative preferred stock
Sept. 11
Underwriter—First California Corp., San Francisco, Cal.
Proceeds—To Virgil D. Dardi,
President, the
stockholder.
corporate
Eagle-Picher Co., Cincinnati, Ohio
Sept. 12 (letter of notification) 10,924 shares of common
stock (par $10), to be offered to 24 key employees. Price
incurred in prosecuting infringement actions under pa¬
and for commercialization of patent.
Office—50
notification) $140,000 of 5% first
mortgage bonds due 1962. Price—At 101lk. Underwriter
(approximately $2.75
general
•
tent
Sept.
(letter of notification)
stock. Price—At market
Proceeds—For
Office—545 Fifth Avenue, New York 17, N. Y.
poses.
Sept. 7 (letter of notification) 600,000 shares of common
$250,000 of 6%
5-year
1950 in multiples of $1,000.
income notes dated June 1,
Price—At 100 and interest.
— For drilling
and development
working capital.
Holdings Corp.
writer—None.
.
Proceeds
expenses and for
Helicopters, Inc. (10/2)
(letter of notification) 11,320 shares of capital
upon exercise of warrants, series A to
F,-inclusive. Price—$1.50 to $2.25 per share. Under¬
Federal Television Corp.,
to
common stock on basis of 200
shares for each $1,000 of debentures). Price—To be filed
by amendment. Underwriter—H. M. Byllesby & Co., Inc.,
8
holders at
Temporarily postponed.
Oct. 17.
sinking fund debentures
Proceeds—To
York.
18
(no par)
by a group headed by Morgan
Stanley & Co. Price—Expected to be not less than $33
per share.
Proceeds — For construction. Offering —
Sept.
Aug.
present
stock
common
underwritten
was
construction.
Big West Oil & Gas Co., Dallas, Tex.
New
Doman
Co., of New York.
Mich.
along with offering price. Five months ago an offering
454,457 shares of common stock to common stockhold¬
amount
Blair
Co., Jackson,
of
(jointly);; White, Weld & Co., Kidder, Peabody & Co.
and Shuman-Agnew & Co.
(jointly); Equitable Secur¬
ities Corp. and Harris, Hall & Co. (Inc.) (jointly). Pro¬
Chicago, 111.
common
10 held, with an oversubscription privi¬
Underwriter—To be named in an amendment,
at rate
bank
Power
499,903 shares of
offered
be
Jackson & Curtis and Stone & Webster Securities Corp.
repay
Corp.,
to be issued
•
of
Broadway, New York, N. Y.
(10/17)
Sept. 14 filed $6,000,000 of first mortgage bonds, series
F, due Nov. 1, 1979. Underwriter—To be determined by
competitive bidding.
Probable bidders: Halsey, Stuart
& Co. Inc.; Kuhn, Loeb & Co. and Salomon Bros. &
Hutzler
(jointly); Lehman Brothers; Paine, Webber,
ceeds—To
shares
share.
share for each
decision reached.
Associated
2,385
Underwriter—Cohu & Co.,
Proceeds—To selling stockholders.
per
one
May 23 filed 155,000 shares of cumulative preferred stock
(par $100). Proceeds—To be applitd to (a) redemption
on Aug.
1, 1950, at $110 per share plus dividend ac¬
cruals, of all the 47,609 shares of outstanding $7 pre¬
ferred and 45,891 shares of outstanding $6 preferred;
and (b) the carrying forward of the company's construc¬
tion program.
Bids—Received by company up to noon
(EDT) on June 19, but rejected. Only one bid was made
of $100,003 per share, with a $4.95 dividend from Lehman
Brothers, Equitable Securities Corp. and White, Weld &
Co. (jointly).
Statement effective June 12. No further
•
Price—$25
New York.
lege.
Arkansas
Stamping Co.
(letter of notification)
stock.
shares.
capital.
ADDITIONS
Statement effective Sept.
Columbian Enameling &
Electronics,
Noel
stock
To
16.
fective July 26.
Arcturus
Alstyne
pire
Sept. 1 filed 500,000 shares of common stock (par 10c).
Price—$3.50 per share. Underwriter—First International
claims and concessions for uranium
INDICATES
selling stockholders.
publicly
—F. S. Yantis &
(9/25)
Co., Ltd.
—Van
Sept.
stock, series F (par $25). Underwriters—To be
supplied by amendment—probably Dean Witter & Co.;
Blyth & Co., Inc. Proceeds — To restore treasury funds
used to finance construction and purchase of capital
Aug. 28 filed
•
Aloilco Corp., Birmingham, Ala.
Sept. 15 (letter of notification) 200,000 shares of capital
stock (par 10 cents). Price—25 cents per share. Under¬
writer—None. Proceeds—For acquisition of oil, gas and
Thursday, September 21, 1950
SINCE PREVIOUS ISSUE
•
California Water Service Co.
Streets,
Allentown, Pa.
.
stockholders.
ferred
Allen
.
•
Securities Now in Registration
July
.
(9/25-29)
filed 100,000 shares of common stock (par 50
Price—To be filed by amendment. Underwriter
16
filed
100,000
shares
of common
rpn-asse^sble'
share, inderw.
None.
Proceeds—To buy mining rrachir.vry
arid
working capital.
Statement effective May 10.
stock
(par
50c).
Price—35c
per
for*
Volume 172
Number 4944
..
.
The Commercial and Financial Chronicle
(1123)
Graybar Electric Co., Inc., New York
Aug. 23 filed 72,000 shares of
common
Feb.
subscription by employees. Price—At par ($20
per share).
Underwriter—None.
Proceeds—For work¬
ing capital.
Statement effective Sept. 18.
:—
NEW ISSUE CALENDER
September 21,
Greenwich Gas Co., Greenwich, Conn.
1950
Arcturus
September 22,
$25 per share, and common $10 per share.
Underwriter—F. L. Putnam & Co., Boston, Mass. Pro¬
ceeds—To
•
retire
bank
Hancock Oil
.Sept.
loan
Co.
of
and
stock to
common
employee
Diana
of six
shares to
1950, for
Stores Corp
North
services
American
Co., Ltd
Corp
Acceptance Corp.
7 filed
Price—To
115,263 shares of
be
filed
.Becker & Co.
Inc., Chicago, 111.
Proceeds—To
11:30
Winn
group of
a
———Bonds
Common
(EST)
a.m.
&
Lovett
Grocery Co
28 selling stockholders.
;
1950
September 27,
•
Home
Sept.
Telephone & Telegraph Co. of Virginia
57,600 shares of-capital
Holeproof
.letter of notification)
^4
stock.
new
Preferred
September 28,
construction.
Office—Emporia, Va.
Republic Natural Gas Co. 11
Hooper Telephone Co., Hooper, Neb.
Aug. 18 (letter of notification) $30,000 of 3%%
October
bonds
Doman
1970.
Price—In excess of 102%.
Underwriter—
Wachob Bender Corp.,
Omaha, Neb. Proceeds—To retire
October
18 cents
cumulative convertible preferred stock
(par $2).
Price—
share.
Underwriter—Dansker
Inc., New York City.
Brothers
&
Common
Preferred
3,
Sierra Pacific Power Co. 11
Common
1950
a.m.
(EST)-Debentures
warrants
cent),
and
the
warrants at
October
Proceeds—For working capital. ~
600,000
latter
rate
of
to
shares of
be
two shares for
stock
common
reserved
for
4, 1950
Vanadium Corp. of America
each
$1
of
Debentures
October
share for each 10 shares held.
17, 1950
—Bonds
Associated
Telephone Co., Ltd
New Bedford Gas & Edison Light Co.
11:30
a.m.
—Notes
(EST)—
October
.
'
-
.
'
■
,
Kaye-Halbert Corp., Culver City, Calif.
July 28 filed 100,000 shares of class A common
(par $1).
Price—$5
& Harris,
man
share.
per
Alabama
Preferred
Co
Power
Fedders-Quigan Corp.
Common
Co., Inc
Common
Middlesex Water Co
Rochester
Common
Corp.—
Telephone
Common
Southern Co
(9/21)
United States Plywood
-Preferred
Corp
-Price—At par ($1,000 each).
bonds and notes of Key West Gas Co. and stock
of Island
Langley & Co. and First Boston Corp. (jointly), $100.30
with a $5.80 dividend.
Statement effective June 12. No
City Gas Co.
further decision
Lancaster
week.
reached.
Chemical
Loven
Processes, Inc., N. Y. City
of California,
Newhall, Calif.
(par
A.
record
Sept. 6,
share
with
as
to
Oct.
64,321
15.
Price—
shares at
rate
of
working capital.
Office—620 Fifth Avenue,
20, N. Y.
New
York
1950 at rate of one share for each 4%
Sept.
1
filed
Price—To
50,000 shares of
be
California Co.
held; rights expire Sept. 26.
Bakeries, Inc.
common
stock
(par $1).
Underwriter—First
filed
by amendment.
Proceeds—To selling stockholder.
chased
York.
Lees
stock.
(James)
& Sons Co.
(letter of notification)
Price—At
York
4,100 shares of
common
market
(estimated at $24 per share J.
Underwriter—To be sold through Wood, Struthers & Co.,
New York.
lic
Proceeds—To selling stockholder.
No pub¬
offering is planned.
stock
(letter of notification) 300,000 shares of capital
Price—$1 per share. Underwriter
Proceeds—For
porate purposes.
New York.
Louisiana
working capital and general cor¬
Office—630 Fifth Avenue, New York 20,
..J
Power
&
Proceeds—To be used to
accruals,
the
Light Co.
redeem, at $110
59,422
shares
of
per
shart
ptus
outstanding ^$6
preferred stock, and for construction and other purposes
Bids—Received by company up to noon (EDT) on June
19
but
Union
rejected.
Securities
Three
bids
Corp., $100.40
were
per
made
share
as
with
follows:
a
$4.65
dividend; Rlyth & Co., Inc., and Equitable Securities
Corp. (jointly), $100.10 with a $4.65 dividend; and W. C
&
Avenue,
Bids—Received by company up to noon
June 19 but rejected. Four bids were made
purposes.
(EDT)
on
follows:
Union Securities Corp., $100.10 per share
$4.80 dividend; Lehman Brothers, $100,551 with
$4.85 div.; W. C. Langley & Co. and First Boston Corp.
(jointly), $100.30 with a $4.90 dividend; and Blyth & Co.,
Inc., Equitable Securities Corp
Shields & Co., White,
as
a
,
Weld & Co. and
stock
M.
Kidder
&
Co.,
Proceeds—To two selling
Modern
offered
Sept. 25 at rate of
to
one
rights to expire Oct. 21.
Underwriter—None.
for
plant
New
will
York,
stockholders.
—$110
common
stockholders
of
record
share for each five shares held;
No
Pittsburgh, Pa.
value—declared value $1)
par
preferred and ten common shares. Price
unit. Underwriter—None. Purpose—For gen¬
Office—837 W. North Avenue,
purposes.
Monarch Radio & Tlevision Corp.
Sept. 8 (letter of notification) 600,000 shares of
stock (par 5 cents).
Price—50 cents per share.
For
Co.,
New
York.
expansion and working capital.
•
common
Under¬
Purpose—
Office—2430 At¬
Multnomah Plywood Corp., Portland, Ore.
filed
18
($2,500
shares of
160
common
Price—At
stock.
share). Underwriter—None.
Proceeds—•
For costs involved in completion and expansion of plant
and for working capital.
•
per
New
Bedford
Gas
&
Edison
Light Co.
(10/17)
Sept. 14 filed $3,750,000 of 25-year notes, series B, due
Oct. 1, 1975.
Underwriter—To be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; Coffin & Burr and F. S. Moseley & Co.'(jointly);
Kidder, Peabody & Co.; Harriman Ripley & Co., Inc.;
First Boston Corp.; Whiting, Weeks & Stubbs. Proceeds
—To repay bank loans.
Bids—Expected to be received
to 11:30
up
•
New
(EST)
a.m.
Bedford
to be offered to
on
Gas
Oct. 17.
Edison
&
England
97.37%
Light Co.
common
(par $25)
stock
stockholders of record June 14,
share for each 25 shares then held.
common
basis of
on
New
one
Gas
Electric
&
Association
of
(owner
of the
outstanding stock) proposes to purchase
shares not subscribed for by others. Price—$67.50
share. Proceeds—To finance property additions.
any
per
Orleans
Public
Service
Inc.
Aug. 24
(letter of notification) 7.754 shares of common
stock (no par) offered to stockholders (other than Mid¬
dle South Utilities, Inc., parent) of record Sept. 1, 1950,
at
rate
pire
Price—At
improvement.
of
Sept.
None.
317
South
par
($4
per
share).
Office—Renkert
Bldg.,
Utilities, Inc.
(no par) to
preferred stockholders of three subsidiaries
—Arkansas Power & Light Co., Louisiana Power & Light
Co
and Mississippi Power & Light Co.
Underwriter-
Securities
share
0.168
25./ Price
Baronne
for
each
held;
Corp will serve as "dealer-man¬
ager." (See also listings of Arkansas, Louisiana and
Mississippi companies elsewhere in these columns.)
ex¬
plant additions.
Orleans 9, La.
—
Office—
Development Co., Washington, D. C.
(no par.) To
$1,000,000 at $5,000
share. No underwriter. Proceeds to be used to
per
plore and develop oil and mineral leases.
fective May 22.
•
rights
Underwriter
finance
New
Street,
share
$25 per share.
—
Proceeds—To
Norlina Oil
ex¬
Statement ef¬
North
share.
American Acceptance Corp.
(9/25)
(letter of notification) 16,000 shares of 60-cent
conv.
.
preferred
stock
Underwriter—Tyson
(par $5). Price—$10
Co., Philadelphia,
per
&
Proceeds—To increase notes receivable and for
Pa.
working
capital.
■I
Proceeds—To oay promissory notes
June 1 filed 400,000 shares of common stock
Equitable
12.
one
eral corporate
Northern
May
Illinois
Coal
Corp.,
Chicago
of notification) up to 2,000, shares of
(no par) to be sold at-the rparket price
(between $20 and $22 per share) by T. Howard Green,
10
common
be offered to
voting stock (no
per
Sept. 15
Canton, O.
Middle
Supply Co., Inc.,
offer only sufficient shares to raise
(letter of notification) 50,820 shares of common
be
effective June
March 28 filed 600 shares of capital stock
Corp.
Scott
(letter of notification) 2,500 shares of common
market
(about
$30.50 per share).
to
Statement
Sept. 6 (letter of notification) 1,500 shares of 5% cumu¬
lative preferred stock (par $100) and 15,000 shares of
cumul.
Aug. 29
Kidder, Peabody & Co. (jointly), $100.19
$4.90 dividend.
a
further decision reached.
New
Price—At
Underwriter—A.
and
May 23 filed 90.000 shares of preferred stock (par $100)
dividend
shares
share.
Un¬
Metropolitan Brick, Inc., Canton, Ohio
(par 10 cents).
—None.
18
stock.
(N. Y.)
Madison
Office—295
17, New York.
purposes.
Merritt-Chapman
Sept.
per
unsubscribed shares to be pur¬
by Lansing Foundation, Inc., 65 Broadway, New
Proceeds—For working capital and general cor¬
handle sale.
Leigh Foods, Inc.
June 30
•
Price—$10
but
derwriter—None,
porate
Sept. 11
new
Corp., New York City
(letter of notification) 8,995 shares of common
(no par) to be offered to stockholders of record
Sept. 11,
Langendorf United
Calif.
Mississippi Power & Light Co.
New
Mercast
Sept. 5
stock
'
Office—244 S. Pine St., Newhall, Calif.
'impact" plastics.
and 50 cents in cash for each
Underwriter—None.
Proceeds—For
share.
Price—At par ($1 per
buy land, build a plant and equip it to produce so-called
share [par $2]
one common
preferred
rights expiring
(payable
per
Hawthorne,
May 23 filed 85,000 shares of cumulative preferred stock
(par 100). Proceeds—To be used to redeem at $110 per
share plus dividends, the outstanding 44,476 shares of $6
preferred stock and for construction and other corpo¬
1950
May 31
itock.
$2.50
1216 shares
loans and
proposed
Sept. 14 filed 10,631 shares of
(letter of notification) 282,250 shares of capital
share). Underwriter—Floyd
Allen & Co., Inc., Los Angeles, Calif. Proceeds—To
Sept. 7
mulative
(letter of notification) 100,000 shares of 6% cu¬
(if earned) and convertible preferred stock
$2.50) to be offered to common stockholders of
6%
Un¬
Common
—
General Radiant Heater
stock
Proceeds—For working
Offering—Expected this
of
share).
install machinery and equipment
plant to be located east of the Rocky
Business—Manufacturer of gas and electric
water and space heaters.
a
par
Common
Consumers Power Co
-i
•Sept. 1 (letter of notification) $125,000 of series A bonds.
Underwriter—Bioren & Co.,
Philadelphia, Pa.
Proceeds—To purchase outstanding
shares
lantic Avenue, Brooklyn 7, N. Y.
24, 1950
OFFERINGS TEMPORARILY POSTPONED
capital.
Key West Propane Gas Corp.
retire bank
Sept.
Underwriter—Sills, Fair-
Inc., Chicago, 111.
1,000
preferred stock. Price—At par ($20 per share). Under¬
writer—Lester & Co., Los Angeles, Calif. Proceeds—To
Price—
Underwriters—Loewi & Co., Shearson,
'Hammill Sc Co. and Bell &
Farrell, Inc. Proceeds—For
working capital.
.-•■>
.
Inc.
Appliance Corp.,
writer—George J. Martin
•$18.75 per share.
.
Mission
Common
October
Manufacturing Co., Fort Atkinson, Wis.•»
Sept. 6 (letter of notification) 15,973 shares of common
stock (par $5) to be offered first
to common stockholders
one
Co.,
notification)
Pittsburgh 12, Pa.
Ohio Edison Co
St., New York, N. Y.
the basis of
Bonds
(EST).
11, 1950
warrants.
James
on
of
July 24 filed 50,000 shares of 6% cumulative convertible
in units of
1950
9,
Utah Power & Light Co. noon
of
Price—Of warrants, $1 per unit. Underwriter—Lawrence
Frederick Gardner,
Merrick, L. I., N. Y. Proceeds—To
buy mining pronerties and develop mines.
Office—11
West 4£nd
(Walter R.)
(letter
Proceeds—To assist in acquisition of
common
October
(par
conversion
N. Y.
Common
Sierra Pacific Power Co
Co.,
International Uranium Corp., New York
Sept. 11 (letter fo notification) $300,000 of convertible
one
6
derwriter—George D. B. Bonbrighi & Co., Binghamton,
with
•
ore
share
Underwriter—Clark, Dodge &
working
cumulative preferred stock at par ($100 per
with
1950
Helicopters, Inc
Power Corp. noon (EST)
Florida
Hub Loan
Co., Jersey City, N. J. (9/27)
Sept. 18 (letter of notification) 100,000 shares of
(EST)—Common
Pacific Power & Light Co.—
temporary loans.
per
2,
common
per
Indefinitely postponed.
Miller
rate
1950
a.m.
of
$50
a
due
$3.
...Common
Co
Price—At par ($5 per share). Underwriter—None.
Proceeds—To pay bank loans and for
•
Hosiery
Co
Hub Loan
at
Mountains.
Delaware Power & Light Co.
stock (par $5).
Underwriter—A. G.
common
by amendment.
shares
Proceeds—To pay notes and for additional
capital.
in
1950
September 26,
(9/27)
Common
..Common
Common
__Preferred
.Preferred
Regal Molding Co., Inc
Holeproof Hosiery Co.
basis.
5,200
stockholders
common
of company's common stock.
1950
*
Television
Federal
each
rendered.
Sept.
25,
American-Canadian Uranium
Aug. 31,
on
__Pfd. & Common
September
1,542 shares of class A
be issued at rate
the payroll
on
Safeway Stores, Inc
working capital.
California
(letter of notification)
12
for
Pfd. & Common
to
one-for-five
March
1950
Electronics, Inc.-.
(letter of notification)
offered
a
Bonds
Key West Propane Gas Corp
preferred,
f
on
Common
(letter of notification) 8,000 shares of $1.50 preferred stock (no par) and
9,777 shares of common stock
(no par), to be offered first to stockholders. Price—Of
9
stock
Co.
El Paso Natural Gas Co
Sept. 1
.
Middlesex Water Co., Newark, N. J.
_
stock, to be of¬
fered for
43
a
&
(letter
stock
Vice-President
of
the
company.
Underwriter—Faroll
Co., Rogers & Tracy and Shields & Co.', Chicago.
•
Ohio Edison Co., Akron, Ohio
(10/11)
Sept. 15 filed 396,571 additional shares of common stock
(par $8) to be offered to
common
stockholders of record
Continued
on
page
44
44
The Commercial and Financial Chronicle
(1124)
Continued
from
ceeds—Together with other funds, will be used to
43
page
•
Bids—To be received
Price—At principal amount.
notes.
Underwriter—None.
J. Connor, Inc. Office—925 15th St.,
N.W., Washington, D. C.
Seneca Oil
—To acquire
Sept.
1,100 shares of common
Price—50 cents per share
held in treasury.
To
Proceeds—Toward
and
Schoyer.
be
Preston,
through
Underwriter—None.
Watt
offered
repayment
1
filed
Power
$2,500,000
Co.
stockholders of record
of
of
Utah
due
Oct.
Oct.
3
on
basis
of
one
1,
shares
mon
held
share
rights
expire
to
Oct.
on
for
Olympic Radio & Television,
Inc.
Sept. 14 (letter of notification) 1,900 shares of common
stock (par $1). Price—At market based on New York
Curb Exchange quotations
($10.62V2 and $10.87 V2 per
share at Sept. 20).
Proceeds—To four selling stock¬
holders.
Underwriter—None.
Office—34-01 38th Ave.,
by amendment, together with subscription price.
able
Orchards
Co.
finance
(letter of notification) 500 shares of common
par ($100 per share).
Underwriter—
Proceeds—To modernize plant.
Pacific Power & Light Co.
r
Aug. 30 filed 1,750,000 shares of
stock
Mines
D.
Bowers
&
expiring
rights
Southern
•
multiple line
a
tive
company.
oversubscription privilege;
Price—$6 per share.
Under¬
increase capital to become
Office—Braniff Bldg., Oklahoma
•expiring Dec. 4,
be
to
Common
offered
par
($5
For
.
stock
common
new
capital.
for
(par
1,000,000
used
Latter issue will be
preferred stock. Price—At
Underwriter—None.
Proceeds—
of
to
a
loan.
the
bank
—
None. Proceeds
Address—Box
100
shares
of
—
To establish
plywood
449, Centralia, Wash.
exchange is to be supplied by amend¬
unless extended. Exchange
Tire Maintenance
Corp., New York City
Sept. 7 (letter of notification) 300,000 shares of common
(par 10 cents).
Price—$1 per share. Underwriter
stock
stock.
—Walt Clyde,
144 East 24th Street, New York 10, N. Y.
Purpose—For organizational expense and working cap¬
Address—c/o Guy M. Bagar, 730 Riverside Drive,
ital.
New
York 31, N.
Y.
buy television set
Investment Co.
of
be
common
Under¬
compo¬
St., N. W., Washington, D. C.
»
offered
to
common
Detroit
Alabama
Sept.
1
it
Power Co.
(10/24)
announced
company has filed with the
application covering an issue of $10,000,000 pre¬
ferred stock (par $100). Underwriter—To be determined
by competitive bidding.
Probable bidders:
Morgan
was
an
Stanley & Co.; Blyth & Co., Inc.; Union Securities Corp.
Equitable Securities Corp. (jointly); First Boston
Corp.
Proceeds—For
construction
program.
Bids-
and
Expected to
be
opened
Oct.
Registration expected
24.
Sept. 22.
•
California
Sept. 13 it
Electric
was
Co.
Power
announced company plans issuance later
this year $4,000,000 of bonds and $2,000,000 of debentures,
the proceeds from the sale of which will be used to re¬
in part $8,000,000 temporarily borrowed from Bank
to finance construction of new 60,000 kwh.
pay,
of
America
steam
&
generating plant. Probable bidders: Halsey, Stuart
Co., Inc.; Kidder, Peabody & Co.
California Electric Power Co.
ity to issue 40,000 shares of 5% cumulative preferred
stock (par $50). Exemption is sought from competitive
bidding requirements. It is planned to place this issue
with
small group of insurance
a
rill Lynch,
used to finance
Aug. 1 it
and
was
sell
companies through Mer¬
Pierce, Fenner & Beane.
expansion
Electric
Illuminating Co.
reported that company this fall may issue
issue
an
Proceeds are to be
program.
shares
of
no
of
preferred
of which
stock,
495,011
par
to be used for construction program.
are
underwriter:
Edison
Co.
of
York,,Anv,
New
May 15, Ralph H. Tapscott, Chairman, said the company
will require approximately $90,000,000 of "new money"
through the sale of securities. No permanent financing ig
contemplated before this fall, however, and current ex¬
penditures are being financed by short-term lopns, of
which $16,000,000 are now outstanding.
It is anticipated
construction
that $257,000,000 will be needed for the
sey,
(Mich.)
Probable
Dillon, Read & Co. Inc. if negotiated sale.
pro¬
the next four years. Probable bidders: Hal¬
Stuart & Co. Inc.; Morgan Stanley & Co.; First
over
Boston
Corp.
Consolidated
it
Lobster
Inch
Co.,
stated that company plans to offer addi¬
shares held, with oversubscription
privilege. Price—To be filed by amendment. Under¬
writer—McDonald-Moore Co.,
Detroit.
Proceeds—For
Aug. 11
general corporate
393
capital stock (no par) for subscription oy stock¬
At April 30, 1950 there were outstanding 54,shares out of 47,000 shares authorized.
•
Dostal
share
for each
three
purposes.
was
tional
holders.
•< .""»••
United States Plywood Corp.
scription by
amendment along with dividend rate.
stockholders of record Sept. 21 at
share for each
10
shares held;
rights to
Price—To be filed by amendment.
Un¬
derwriter—Merrill Lynch, Pierce, Fenner & Beane. Pro¬
portion of outstanding funded debt.
a
Prospective Offerings
,
stock (par $4), to
stockholders at the rate of one
June
expire Oct. 5.
expansion of its stores and other facilities and
prepayment of
common
amendment) filed 110,000 shares of 4%
preferred stock (par $100) and 257,064 shares of common
stock (par $5), the latter issue to be offered for sub¬
one
ment and
gram
Sept. 11 filed 55,865 shares of
12 ?(by
the rate of
filed
be
Consolidated
Safeway Stores, lnc.u(9/22)
common
stock (par $1).
by amendment.
Underwriter—Mer¬
rill Lynch, Pierce, Fenner & Beane, New York.
Proceeds
—For general corporate
purposes, including improve¬
Price—To
Agent—The National Bank of Commerce of Houston, Tex.
Inc.
notification) 600,000 shares of
stock (par 10 cents). Price—50 cents per share.
"
(9/26)
common
ceeds
June 22 (letter of
Sept.
Grocery Co.
Offer to expire Oct. 6,
Union
»
Lovett
The rate of
Royal Television & Electronics, Inc.,
Washington, D. C.
..ir
&
Aug. 31 company filed application with FPC for author¬
loans.
semi-privately.
.«
and
Co.
ment.
Christensen, Inc., Denver, Col.
Proceeds—For new ma¬
chinery, equipment and working capital. May be placed
n
of Brodhead-Garrett
working capital.
stock.
par, and in units, at $2,000 each.
Underwriters—Boettcher & Co. and Peters, Writer &
nents.^ Off ice-^714 Fifth
19,500 shares of common
Underwriter—The Ohio Co. Pro¬
assets
con¬
including
Price—Separately, at
Proceeds—To
Co.
Offering postponed.
(letter of notification) $150,000 of 5% convert¬
ible sinking fund debentures, due 1960, and 15,000 shares
of common stock (par $10), to be sold separately or in
writer—None.
Zinc-Lead
value are presently available, stock¬
holders on April 25 having increased the authorized
amount to 750,000 shares from 500.000 shares. The pro¬
Rocky Mountain Textile Mills,
$1,000 debenture and
Callahan
Sept. 6 filed 210,000 shares of
shares will be made, and the proceeds
Tennessee Gas Transmission Co., Houston, Tex.
July 11
one
Idaho
estimated 90,000 shares
Aug. 28 filed 100,000 shares of common stock (par $5) to
be issued in exchange for 80.000 shares of common stock
of Sterling Oil & Gas Co., and for 10-year subscription
warrants to purchase 133,333 shares of Sterling common
(Proceeds—For general corporate purposes,
repayment of
buy the
Cleveland
Telephone Corp.
by amend¬
Underwriter—The First Boston Corp., New York.
units of
common
retire
Underwriter
June 29 filed 125,000 shares of common stock (par
$10)
to be offered to present stockholders at rate of one new
•share for each four. held.
Price—To be filed
struction and
for
Aug. 17 (letter of notification) 6,000 shares of 6% cumu¬
preferred stock.
Price—At par ($25 per share).
mill.
ment.
provide
lative
N. Y.
Y.)
(jointly); Harriman Rip¬
Temporarily postponed. Bank Loans—
financing proposal was amended in
Sylvan Products, Inc., Centralia, Wash.
per
share).
equipment, acquisition of patents and working
Second Street, Mineola, L. I.,
(N.
(par $5).
$12,000,000 of bank borrowings
to provide funds necessary to acquire $12,000,000 common
stock of Alabama Power Co. and Georgia Power Co.
($6,000,000 in each), the bank loans to mature in one
year.
As soon as practicable and feasible, sale of the
Office—65 East
Rochester
Co., Atlanta, Ga.
10 cents);
conversion
Wallace,
an
(letter of notification)
May 8
SEC
stock
August to
Regal Molding Co., Inc. (9/25)
Sept. 15 (letter of notification) 59,000 shares of 6%
cumulative convertible prefered stock and 59,000 shares
reserved
Corp.,
Co.
ley & Co., Inc.
•
of
Proceeds
Street, New York 7, N. Y.
and Equitable Securities Corp.
publicly
through Burton, Cluett and Dana, 120 Broadway, New
York, N. Y.
Proceeds—For working capital.
Office—
226 Walnut Street, Philadelphia 6, Pa.
\
Securities
Co., Columbus, Ohio
ceeds—To
producing motion picture films
purchase of new equipment.
& Co. and Merrill Lynch, Pierce, Fenner &
(jointly); Blyth & Co., Inc. and Bear, Stearns &
Co. (jointly); Lehman Brothers; Union Securities Corp.
20, 1950, with the rights
Price—$25 per share.
Under¬
shares
Silver-Lead
Proceeds—To
Vieh
basis; rights expire
Underwriter—None. Pro¬
par.
Beane
Oct.
1950.
writer—Unsubscribed
Wash.
Winn
Peabody
10,000 shares of capital
stock (par $20) to be offered on a one-for-four basis to
record
Inc.
Underwriters—To be determined by competitive bidding.
Probable bidders are: Morgan Stanley & Co., Kidder,
(letter of notification)
of
for
and
Southern
Quaker City Fire & Marine Insurance Co.
stockholders
Productions,
June 23 filed 1,000,000 shares of common stock
City, Okla.
Aug. 2
on
of common stock (par $1).
Price—For the first 50,000
shares, 90 cents each; thereafter price will be determined
by market. Underwriter—J. A. Hogle & Co., Spokane,
to
Aug. 29.
an
13.
Oct.
and
July 28 filed 818,415 shares of common stock (par $5)
offered in exchange for 545,610 shares of common stock
of Birmingham Electric Co. on a l^-for-l basis. No un¬
derwriter. Offer to expire on Sept. 22. Statement effec¬
common
on
of
purpose
television,
Office—50 Church
Proceeds—To
writer—None.
t
with
bank loans
Vulcan
Corp., New York City
Price—At
Sept. 28.
for
Fire Insurance Co.
basis,
12
eight shares held; rights
Underwriters—Union
Sept. 8 (letter of notification)
for
Co., Denver.
(par $4) offered first to present stockholders
par)
(no
Sept.
Aug. 30.
stock at $10 per share.
on
Aug. 30 (letter of notification) 50,000 shares of
two-for-one
•
Webster
&
of record Sept. 8 on a share-for-share
"
stock
(par
ceeds—For
working capital.
Prudential
pay
Stone
construction.
Smith-Dieterich
Co., Denver, Colo.
Underwriter—Robert
.
Proceeds—To
stock:
Aug. 31 (letter of notification) 75,292 shares of common
stock (par $2.50) to be offered to common stockholders
notification) $150,000 of 5Vz% de¬
benture certificates due 1955 (in denominations of $500
each) «■ and 30^000 shares of common stock (no par).
Price—For certificates,
$400 each; for stock, $1 per
share
record
Vanadium
Calif.
stock (no par),
(letter of
Proceeds—For
of
—For
notification) 150,000 shares of common
$1).
Price—$2 per share.
Underwriter—
Gunther, Newark, N. J. Proceeds—To com¬
Koellmer &
Witter & Co.
10
4.
plete films in progress and for general corporate pur¬
poses.
Office—321 So. Beverly Drive, Beverly Hills.
Allyn & Co., Inc. and Bear, Stearns & Co. Underwriters
—Lehman Brothers, Union Securities Corp. and Dean
Perlite
for
Simmel-Meservey Television
representing all of the outstanding shares of the company
to be sold by a group of 16 stockholders headed by A. C.
Aug.
Oct.
stock
common
share for each
new
on
shares of
stockholders
June 29 (letter of
(10/2)
common
underwriter
Corp.
new
Orchards, Wash.
Price—At
None.
&
Probable
March 16
stock.
pro¬
(EST)
noon
derwriter—Kidder, Peabody & Co., New York.
plant modernization.
Prob¬
Halsey, Stuart & Co. Inc.;
Webster Securities Corp.; Kidder Peabody &
Securities
Telephone Co.,
to
bidders for debentures:
Stone
Long Island City 1, N. Y.
construction
up
Corp. of America (10/4)
Sept. 14 filed $5,000,000 of convertible debentures, dated
Oct. 1, 1950. Price—To be supplied by amendment. Un¬
debentures to be determined by competi¬
(bids to be received by company before 11
(EST) on Oct. 3); for common stock, to be supplied
tive bidding
a.m.
Proceeds—For
Light Co.
common
expire
•
writers—For
•
one
&
166.604
ment effective
Under¬
19.
(10/9)
Corp. and Smith, Barney & Co. (jointly). Price—$24.25
per share.
Proceeds—For construction program. State¬
each six preferred shares and one share for each 12 com¬
bank loans.
to
will
Hutzler.
Power
offered
(10/3)
debentures
Light Co.
Statement effective Aug. 30.
Aug. 2 filed
1975
and 24,716 shares of common stock (par $15), the latter
issue to be offered pro rato to preferred and common
(letter of notification)
now
&
Oct. 9.
on
properties and for working capital.
Pacific
&
Thursday, September 21, 1950
Bids—Expected to be received
gram.
basis of
Ohio Oil & Gas Co.
May 5
Bros.
mon
Co., Oklahoma City, Okla.
April 27 (letter of notification) 225,782 shares of class A
stock (par 500).
Underwriter—
Price—$1.25 per share.
Genesee Valley Securities Co., Rochester, N. Y. Proceeds
Sierra
acock
Co., Washington, D. C.
about Oct. 11.
or
on
(B. F.)
Proceeds—To Henry
(jointly); Merrill Lynch, Pierce, Fenner & Beane
and Kidder, Peabody & Co. (jointly); Glore, Forgan &
Co. Proceeds—For construction program and to increase
investment in common stock of Pennsylvania Power Co.,
subsidiary.
Saul
Power
.
Aug. 2 filed $8,000,000 first mortgage bonds due 1980.
Underwriters—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Lehman
Brothers and Bear, Stearns & Co. (jointly); Union Secur¬
ities Corp. and Smith, Barney & Co. (jointly); First Bos¬
ton Corp. and Blyth & Co.,
Inc.; Harriman Ripley & Co.,
Inc.; Kidder, Peabody & Co.; White, Weld & Co.; Salo¬
Sept. 14 (letter of notification) $70,000 of 5% promissory
& Co.
a
Utah
repay
$20,000,000 term bank loans.
share for each 10 shares held,
with an oversubscription privilege; rights to expire on
Oct. 30, 1950. Underwriters—To be determined by com¬
petitive bidding for purchase of unsubscribed shares,
plus such number—not in excess of 38,657—of additional
shares, if any, to stabilize market.
Probable bidders:
Morgan Stanley & Co. and White, Weld & Co. (jointly);
First Boston Corp.; Lehman Brothers and Bear, Stearns
Oct. 11, 1950 at rate of one
.
.
19 filed
60,000 shares of series B cumulative con¬
vertible preferred stock (par $100). Underwriter—East¬
man, Dillon & Co., New York.
Price—To be filed by
crease
Proceeds—To in¬
Foundry &
Sept. 12 it was reported
October 84,000 shares of
Machine
company
Co.
plans to sell in midUnderwriicrs--.
stock.
common
Smith, Hague & Co.; George McDowell & Co.; and FL &
Johnson & Co.
working capital and for other corporate purposes
including the erection of a new plant at Anderson, Calif
May 23 it
Temporarily postponed.
the SEC
Eastern
a
Utilities
'
Associates
'
»
4
>
'
1
announced that under a plan filed wits
new company will be formed to acquire tW
was
Volume 172
Number 4944
.
.
The Commercial and Financial Chronicle
.
(1125)
assets of Eastern, and of the Brockton Edison Co., Fall
River Electric Light Co. and Montaup Electric Co. and
will issue and sell $22,000,000 of first mortgage and
collateral trust bonds and $8,500,000 of preferred stock.
•
El
Paso
Electric
Co.
to
Sept. 19
company reported to be planning issue and sale
$4,500,000 first mortgage bonds between now and the
of
Long Island Lighting Co.
Aug. 29 company asked SEC authority to issue $20,000,000 first mortgage
bonds, series H, due Sept. 1,' 1980,
and requested exemption from
competitive bidding, plan¬
ning to place the issue privately. Proceeds would be used
repay bank loans and to reimburse
struction expenditures.
.close of the year.
El
Paso
July 19 it
Louisiana
Electric Co.,
Sept. 12 it
El Paso, Tex.
announced company plans to refund $3,loans (notes approved Aug. 22 by FPC)
was
500,000 bank
with
permanent
financing prior to March 31, 1951,
maturity date. The last issue of debentures was
placed privately last September with the John Hancock
Mutual Life Insurance Co. Previous financing underwrit¬
ten by White, Weld & Co.
their
Equitable
Gas
Co.
April 8 company said to be planning the sale this year of
$2,000,000 of bonds, with another $2,000,000 in 1951 or
1952. The proceeds are to be used for its construction
November.
Power &
Light Co.
June 9 stockholders approved creation of 50,000 shares
of $4.50 cumulative preferred stock
(par $100). These
shares
are
expected to be offered to finance part of
soon
construction
which is expected to require
proximately $25,000,000 new capital through 1952.
program
ap¬
Georgia Natural Gas Co., Albany, Ga.
Aug. 2 filed
application with FPC for authority to
construct a 335-mile pipeline system in Georgia and
Florida to cost about $5,100,000, which would be fi¬
nanced through
issuance of first mortgage pipe-line
bonds
the
and
cation
new
sale
of
stock.
common
Previous
appli¬
withdrawn.
was
(jointly); Blyth & Co., Inc.; Harriman, Ripley
& Co., Inc.; Shields & Co. and
White, Weld & Co. (joint¬
ly); Salomon Bros. & Hutzler; W. C. Langley & Co., The
First Boston Corp. and Glore,
Forgan & Co. (jointly).
Proceeds—For construction
program.
Mines, Inc.
Sept. 13 stockholders authorized the issue of 100,000 ad¬
ditional shares of common stock (par 25 cents) to stock¬
holders of record Sept. 22 on the basis of one share for
each 14 shares held.
Price—$1.50 per share. Proceeds—
To
develop
manganese
&
Electric
properties in
New
Mexico
and
Arizona.
mon
stock
use
the
(no par) of Louisville Gas & Electric Co., and
proceeds to retire $2,250,000 of bank notes
Probable
bidders:
Lehman
Brothers and Blyth & Co.,
(jointly); First Boston Corp.; Glore, Forgan & Co.
and
W.
C. Langley &
Co.
(jointly); Merrill Lynch,
Pearse, Fenner & Beane, White, Weld & Co. and Union
Securities Corp. (jointly). Expected before end of
Inc.
Market
Basket, Los Angeles, Calif.
May 25 company announced it plans sale of 4,452 sharea
of authorized but unissued,
preferred stock, series C
(par $15) and an additional 30,000 shares of preferred
stock,
(par $15)
be
to
authorized.
•
Hallicrafters
14 it
Further
details
it was announced company contemplates per¬
financing will be consummated before maturity
(Feb. 20, 1951) of proposed $25,000,000 bank loans which
account
of
the
and
company
Houston Lighting & Power Co.
April 14, S. R. Bertron, President, estimated construction
expenditures for 1950 between $19,000,000 and $20,000,000
This estimate may be raised to accommodate increased
power demands on the system.
If this is the case, more
financing will be necessary, he added.. •This may be
done
through additional common or preferred stock
financing.
Hussman
Oct.
6
Bonds—To
Probable
be
determined
bidders:
by
competitive
Halsey, Stuart & Co. Inc.;
Refrigerator Co.
preferred stock.
will
vote
creating $1,500,000 of
15,699
on
Proceeds will be used to redeem
outstanding shares of $2.25 cumulative preferred stock,
par value, and for general corporate purposes.
Tra¬
ditional underwriter—W.
E.
Hutton
&
Co.
May be
placed privately with an insurance firm.
no
Iowa
Southern Utilities
April 26
said
company
to
plan
sale of
first mortgage
bonds to finance part of its $3,200,000 construction
gram
Probable underwriter:
for 1950.
pro¬
The First Boston
Corp.
Johansen
Oct.
25
Brothers
stockholders
will
Shoe
vote
corporate purposes.
Traditional underwriter: Stifel,
Nicolaus & Co.
Steel
Fontana, Calif.
Sept. 6 it was reported that company was planning a
$100,000,000 financing program, which may include $60,000,000 of bonds (which probably will be placed privately
with an insurance company) and $40,000,000 of equity
financing which is expected to be in units of preferred
and common stock, a registration statement for which is
Corp.,
common
Co., parent.
stock will be
Expected thii
A permanent financ¬
ing program provides for the elimination of these bank
loans prior to their maturity, July 1, 1951, and such
pro¬
gram will include the issuance and sale of $12,000,000
additional
stock.
bonds
and
$3,000,000
additional
of
common
Previous debt financing was placed privately.
Milwaukee
Aug. 22
Gas
The permanent
financing program is expected to be con¬
prior to October, 1950 and will involve the re¬
financing of $13,334,000 first mortgage 4^2% bonds due
1967, $2,000,000 of 7% preferred stock and bank loans
(about $8,500,000) through the issuance of $27,000,000 of
bonds, and $6,000,000 of preferred stock (to be offered
publicly and $3,000,000 of common stock to common
stockholders.
(American Natural Gas Co. now owns
97.7% of presently outstanding common stock.) Probable
Glore, For¬
gan & Co., and Lehman Brothers (jointly): Kidder, Peabody & Co.; Harriman Ripley & Co.; Smith, Barney &
Co., Kuhn, Loeb & Co. and Blyth & Co., Inc. (jointly).
Registration expected shortly.
Aug. 22 it
plans to sell in 1950
and
1951 approximately $22,000,000 of new
securities,
with
$10000,000 of debentures expected in October.
reported
company
Underwriters—To be determined by competitive bidding.
bidders for bonds: Halsey, Stuart & Co. Inc.;
Probable
Pierce,
Fenner & Beane; Smith, Barney & Co.; First
Corp.; Lehman Brothers. Proceeds—For expan¬
extension of gas and electric properties.
Boston
sion
and
Mountain
June
6
Fuel
•
Kansas
Sept.
19
it
Gas
&
to take
over
and
reported
was
its
a
new
firm
exploration and development of natural
oil
that
company
is expected
to
Proceeds will be used to repay
23
it
17
(jointly); Smith, Barney
used
for new
&
Clfc.
construction.
000
stockholders
approved the issuance of $90,bonds for the purpose of
refunding $50,000due 1965; $10,000,000
3y4% bonds clue
$15,000,000 3% bonds due 1970 and
000,000
new
3y8%
1968;
bonds
$15,000,000
bonds due 1972.
Probable bidders: Halsey Stuart & Co.
Inc.; Morgan Stanley & Co. and Drexel & Co.
(jointly);
Kuhn, Loeb & Co. and Lehman Brothers (jointly); First
Boston Corp.
Republic Natural Gas Co.
Sept. 9 it
was
announced
(9/28)
that
bids will be received up
Sept. 28 at the Office of Alien Prop¬
a.m.
(EDT) on
erty, 120 Broadway, N. Y. City, for the purchase from
it,
an
entirety, of 3,000 shares of common stock. This
as
Roosevelt
Mills, Inc., Manchester, Conn.
of
about
$150,000 of
underwriters
share.
San
reported to be negotiating with a
for a public stock
offering of
additional capital stock at $1 or
was
group
There
are
are
$2
presently outstanding 1,381 shares
closely held.
Diego Gas & Electric Co.
July 31 it
was reported that the
company's
between $8,000,000 and
original plan
$10,000,000 of .bonds
September or early October may be changed to
preferred stock, depending upon market conditions. If
negotiated, Blyth & Co., Inc. may handle financing. If
competitive, probable bidders are: Blyth & Co., Inc.;
to
issue
late in
Brothers
and Bear, Stearns & Co.
(jointly);
Corp.; White, Weld & Co. and Shields St
Co. (jointly); Merrill
Lynch, Pierce, Fenner & Beane;
Union Securities Corp.; Salomon Bros. &
Hutzler. Pro¬
First
Boston
ceeds
would
•
Smith,
toward
go
Kline
&
construction
French
program.
Laboratories.
Sept. 13 stockholders increased authorized common stock
1,000,000
shares
(no
par)
to
2,000,000
shares
(par $1).
Following split up of present outstanding
807,295 shares on a two-for-one basis, there will remain
unissued 385,410 shares of the new stock. The
directors
from
were
empowered to issue all
at any
or
part of the latter shares
time.
South Carolina
Electric & Gas Co.
Aug. 17, S. C. McMeekin, President, said the
company
expects to issue and sell later this year $3,000,000 of
new bonds (in addition to
private placement of $3,000,000
of 4.60% cumulative preferred
stock, par $50), the pro¬
to
finance
for
bonds:
construction
program.
Probable
bid¬
Halsey,
Stuart & Co. Inc.; The First
Corp. and Lehman Brothers (jointly); Kidder,
Peabody & Co.; Union Securities Corp.
Boston
Southern
California Petroleum
Corp.
1, Tyler F. Woodward, President, announced that
stockholders should be given the
opportunity of subscrib¬
ing for additional capital stock, the proceeds to be used
Sept.
to develop the company's
Cuyama Valley holdings. The
offering would be underwritten.
*•
Georgia Natural Gas Co., Atlanta, Ga.
Aug. -23 company applied with FPC an amended applica¬
tion for authority to build a 526.9
miles pipe line in.
Georgia and Florida which, it is estimated, will cost be¬
tween $10,500,000 and $12,080,000 to be
financed by sale
of first
ities.
,
mortgage bonds and the issuance of junior secur¬
Probable underwriter: Courts & Co.
Southern Natural Gas Co.
Power Co.
that
$1,300,000
derwriter:
bidders:
are
to
bonds
at
issue
and
in
late
(1)
For
summer
shares
of
000,000
about
pay
or
$37,000,000
construction
new
costi
Present plani
early fall $10,000,000
stock.
Probable
preferred
bonds—Halsey,
$12,-
initially and the balance later
on.
On June 21
temporary bank> borrowing of tip516 $20,000,000 to mature July 1, 1951,- the proceeds to be used
SEC approved
construction
$32,520,000
$40,000,000 for 1950 to 1952.
50,000
was reported proposed
financing on a perma¬
basis has been increased from
$10,000,000 to $24,000,000 first mortgage bonds, although
company may
decide to take this in two
pieces, viz: $10,000,600 to
nent
for
Power Co.
April 24 it was estimated that
financing will be required to
estimated
Paine, Webber Jackson & Curtis.
reported
was
New England
bank loans, due in September, 1951, and the remaining
$300,000 will go to Central Telephone Co., parent, to re¬
pay temporary advances for construction. Probable un¬
States
■
writer—May be Merrill Lynch, Pierce, Fenner & Beane.
Proceeds—To retire $1,250,000 bank loans maturing Oct.
3, 1950, and for expansion program.
Telephone Co.
long-term bonds and n6t less than $600,000 additional
stock.
Expected this Fall.
company is considering
issuance of additional preferred stock (par $50), of which
there are authorized and unissued 77,007 shares. Under¬
June 6, company announced that it has advised the Wis¬
consin P: S. Commission that it expects to sell $1,000,000
common
Co.
be
July 31 it
Aug.
issue and sell 45,000 shares of new preferred stock some¬
of
Corp.
Mountain
Co.
time next month.
La Crosse
gas
group.
Electric
&
South
Supply Co. of Utah
announced plans to create
company
Boston
ing the underwriting
(Minn.)
Public Service Electric & Gas Co.
April
ceeds
Power Co.
was
writer—The
Corp. is reported to be head¬
Riter
Proceeds would
Lehman
Light Co.
applied to SEC for authority to issue
$3,500,000 promissory notes to banks to mature April 27,
1951, the proceeds to be used for construction purposes.
company
pay off an RFC loan, and the
remaining $8,000,000 added to working capital. Under¬
First Boston
and
ers
noi
than $20,000,000 from banks.
—$92,000,000 will be used to
Proceeds
Co.
reported that the company will be in the
market probably this fall with an
offering of $17,500,000
new preferred stock.
Probable bidders: Lehman Broth¬
of stock, which
operations. It will be financed, in part,
through public sale by the new unit of 1,000,000 shares of
capital stock (par $8). Financing plan submitted by First
expected to be filed with the SEC before Oct. 6.
Power
was
July 20 company
The additional
Blyth & Co., Inc.; Union Securities Corp.: Merrill Lynch.
Kaiser
Northern States
July 29 it
ders
sell $350,000 of 4% sinking fund debentures due 1960.
Proceeds to retire outstanding 7>xk% debentures and for
other
publicly not exceeding 40,000 shares of common
(par $10). Probable underwriter: Glore, Forgan
&c Co., New York. The
proceeds are to be used for rax
rebuilding program.
construction costs.
Montana
proposal to issue and
Corp.
reported that the company is to issue and
only.
Co.
on
Car
Niagara
sell
bidders for bonds: Halsey, Stuart & Co. Inc.:
Co.
was
White, Weld & Co. and Lehman Brothers (jointly);
Smith, Barney & Co. and Blyth & Co., Inc. (jointly). Pro¬
ceeds—To pay off short-term bank loans and for new
summated
stockholders
North American
Aug, 15 it
per
150,000 shares for the account of selling stockholders.
Underwriter—Kebbon, McCormick & Co., Chicago.
.
FPC of merger of Niagara Falls Power
Co. with
Mohawk Power Co.)
represents about 2% of the 1,450,693 common
shares out¬
standing. The stock will be sold to American citizens
for
bidding!
more
be for the
as follows:
$25,000,000 to pay construction costs
$16,000,000 to refund Niagara Falls Power Co. 3Vz%
bonds
(latter amount is dependent upon approval
by
writers
000
will
be used
and
include, during 1950, $20,000,000 of first mortgage
$6,000,000 of common stock, and the sale, is
1951, of about $10,000,000 of preferred stock. Under¬
bonds and
Michigan-Wisconsin Pipe Line Co.
July 25 company received SEC authority to borrow
that
bonds
to 11
will
early registration is ex¬
pected of 300,000 shares of common stock, of which 150,shares
reported company plans issuance of $41,some
time in November.
Probable
Halsey Stuart & Co. Inc.; Morgan Stanley & Co.;
Kuhn, Loeb & Co.; First Boston Corp. Proceeds would
was
new
bidders:
7
Fall.
Co., Chicago.
reported
was
noi
Michigan Consolidated Gas Co.
Aug.
Niagara Mohawk Power Co.
manent
sold to American Natural Gas
Sept.
Co.
was
available.
Power Co.
Sept. 6 it was reported Alabama P. S. Commission has
authorized the company to issue a new series of pre¬
ferred stock, the proceeds of which are to be used to
finance the erection of a steam generating station at
Gorgas, Ala.
Haile
Gas
(3) for preferred:—W. C. Langley & Co.
stock
notified that Standard Gas & Electric
plans to sell its holdings of 137,857 shares of com¬
Georgia
•
—
Brothers
Co.
Florida
$8,000,000 of bonds around mid-
and
preferred: Harriman Ripley & Co.
Brothers; Kidder, Peabody & Co.; First*
Corp.; Merrill Lynch, Pierce, Fenner & Beane;
000,000
To be determined
by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; Merrill Lynch, Pierce, Fenner & Beane and Kidder,
Peabody & Co. (jointly); Kuhn, Loeb & Co. and Lehman
Louisville
bonds
Lehman
Sept. 7 it
Light Co.
Underwriters
for
Boston
con¬
said that the company is expected to be
was
in the market for about
Aug. 29, SEC
program.
Power &
treasury for
(2)
Inc.;
45
Stuart
&
Co.,
Inc.;
for
program
which
is
1950-1951... Probable
estimated
to'-'cost
bidders:
Halsey,
Inc.; Blyth & Co., Inc. and Kidder, Peabody
(jointly); First Boston Corp.
Stuart & Co.
&
Co.
Southwestern
Aug. 1 it
was
Public
Service Co.
announced by Herbert L.
Nichols, ChsirContinued on page 46
46
The Commercial and Financial Chronicle
(1126)
Continued
jrcm
that the
man,
cost of about
45
page
500,000 and $18,000,000 through the sale of securities
during the fiscal year beginning Sept. 1, 1950. This may
include bonds to be placed privately and the balance
Warner-Hudnut,
estimated cost of $11,581,800.
an
20
change
conditions.
Sept. 18
in
money.'
f
It is planned to issue
mortgage bonds for 75% of the required capital
and to raise the remaining 25% through the sale of com¬
16,298 shares of capital stock
stockholders.
to file a
New England Electric ttysvtib.,; xue parent,
16,227^ shares and any shares not
minority stockholders/ Price—$35 per
Proceeds—To repay bank loans and advances
to acquire
proposes
registration with the
covering the sale of approximately 325,000 shares
of the proposed new common stock (par $1) to the pub¬
lic through a nation-wide group of underwriters headed
by F. Eberstadt & Co., inc.
It is planned
applied to SEC for authority to issue
(par $25) to its
company
sell
and
subscribed for.by
SEC
Sept. 15 company applied to the FPC for authority to
construct approximately 72 miles of new line in Texas
at
new
November.
of
Weymouth Light & Power Co.
Inc.
company's name from William R.
Warner & Co., Inc. was approved, but no action was
taken on proposed recapitalization plan, due to market
July
Natural Gas Pipeline Co-
Illinois
middle
about
,
offered
Texas
•
Thursday, September 21, 1950
.
.
•
publicly as preferred and common stock
with Dillon, Read & Co. inc. underwriting. The proceeds
are to pay for construction costs.
be
to
Expected
probable that the bulk of this new capital will be raised
through the public sale of new securities.
expects to raise between $17,-
company
.
4%% bonds due 2014, and over $5,000,000
It is
$110,000,000, including new facilities.
.
share.
construction.
for
and
Wilcox-Gay-Majestic Corp.
first
stock.
mon
Western
underwriters—White, Weld & Co.
Probable
July 17 it
was
RR.
sition
reported company plans issuance and sale
retire first
Expected in October.
thers and Bear, Stearns & Co.
Line Co.
July 25 filed with FPC tor authority to build 1,130 miles
of new lines in Texas, Louisiana and Mississippi at a
Continued
(jointly); Union Securities
(jointly). Proceeds—To
mortgage 4% bonds and convertible income
other obligations
This
uries.
Responsibilities oi Bank's
much
risen
thereafter
nor
phrase
At the
beginning of this century
than in¬
Since
vestments.
L*en,
uowever,
Mount.
this
from
which
applies to
There
great
other
is
a
teaching
us:
whosoever
"Therefore
loans in our banking system were
about three times Lrger
the
on
mon
heareth
these
sayings of mine, and doeth
them, I will liken him unto a wise
large part of this nation's cor¬ man, which built his house upon
porate financing has been done a rock; and the rain descended,
through the issuance of securities. and the floods came, and the winds
The loan account has been shrink¬ blew, and beat upon that house;
a
ing while the investment account
been
has
and it fell not: for it
of the
milestones in this apparently in¬
exorable
a
One
long-term trend was in
1934 when for the first time total
investments
in
national
our
1945
By
total
exceeded
banking
investments
four
times
they
are
total
loans
system.
over
were
loans
and
almost twice
today
large
as
as
This
is
than
more
directive
founded
hint—it
a
is
the subject of high
on
quality. Quality that will stand
up under tomorrow's conditions.
Thi§ is probably the most dif¬
ficult and most creative responsi¬
bility of all because it is under to¬
day's conditions and today's trends
the loan figure.
that
be
which
Further, it should
pointed out that the tremen¬
deficit financing since 1941
was
rock."
upon a
growing.
must select the securities
we
weather
will
with U. S. Treas¬
becomes
more
even
consider how
during the past ten or twelve
years the yield spreads between
the best security known and any
pointed
Investment Officer
never
comparing
accorded due weight in
from page 7
for long.
tomorrow's
when
we
narrowed
nave
down
per¬
ceptibly.
flow
and
of
reflected.
is
loans
is frozen into the monetary struc¬
ture since most of the increase in
investments
is
obligations of
government—the only debtor
our
our
I
that
know
of
be
cannot
wno
liquidated and who also fixes the
rate on
the
money
he borrows
from
difficult.
It
is
is
still
lending
in
change
a
descensus
Averno, a b a n k e r's
translation of which
us.
Do
choice,
your
usually
prejudice to in¬
rejection,
ment.
Beware
or
old
of
more
invest¬
an
outlooks,
observations disparaging
outworn
of
field
of
enterprise which may
to maturity while
have
grown
many
still think of it as wearing
ably
improvement
lasting
When
for
it
are
a
the
is
aware
obtained.
of
incomewise
all
in
that
thus
is
improve¬
a
character.
this
One, that the outlook for great
ex¬
be held by others regarding
may
the
future
of
and
rates
money
measurably lower bond prices
largely be dispelled.
In order to
vantage
a
cation,
I
use
the
to
that
contend
from
quotations
day to day
particularly
—
Governments.
that
we
kets
Not
that
should not know
but
a
should
we
man
certain
a
market
U.
S.
I
broader
sound
state
mar¬
not
scale
of
pay
important
on
more
from
the state of the
To my way of
prime
A
far
is
requisite
in
sound state of mind
that
fact
out
is
na¬
thinking, the
attaining a
is to
exact
an
hardly
the
hell
to
easy."
pretty
neatly to
to
get
the
overemphasize
devil
and
you
is
in
always
the
days of 20 years ago there
old
were
of
sentatives
themselves,
bond houses
bond
remem¬
ber that banking is s4 ill a business
and that profits are the dominant
and
delude
quality.
from
Departure
it
least
has
not paid
are
in
periods where for
there will
economic
pears
to
lacious
be
me
to
the
the
in
at
past.
those
of
one
no
association,
cartel
and
the facts of their arts and
crecy,
Odd as it may seem
they achieved a de¬
gree
of popular respect out of
proportion to their actual worth
professions.
to
us
now,
contribution
and
If
a
responsibility
investment
the
it
as
is
officer, even
else in
is
that
of
everyone
the bank, to convey
some
its
to
bank
functions
as
to the public
of the value of a
awareness
community, how it
a good citizen among
citizens.
If
the
operate
a
strong,
least
at
people
are
to
productive
they must comprehend
essential
the
facts
of
its
The local bank is the
of business most
representative
familiar
to
officers
most
should
and
do
can
Bank
people.
not
on
Such
profit
a
basic
a
on
investment
sounder
the
one
philos¬
than
relatively
that
unpre¬
have
dictable turn of high grade bond
Neither
prices.
Oft-quoted
from
are
parts of the Ser¬
do
the
ability.
they have
viewpoint
These
facts
in
the
all
be
and
in
real
what
an efficient
investors and the'
see
the
guidance of this flow of
investment funds.
it
is
interest
By and large,
that
economic
and
social
the
in
used
activities
investment
our
our
should
money
In
efficiently.
business
be
legitimate
do
to
In
in goods or serv-.
the investor tends
turn,
successful
the
reward
tends to
earnings the
good
values
best
the field
of
public
the
with
reward
ices.
outside
and
rackets,
enter¬
prise with ready access to invest¬
ment funds at low rates.
Thus,
by
humdrum
helping
funds
some¬
you
are
flow .of
the
the
to
points
they will aid and encour¬
where
dollars,
Conversely,
-the
and by the votes
wishes to succeed.
favors,
its
which
businesses
the
public
of
work,
channel
to
investment
age
and
day-to-day
your
times
restricting
are
you
the credit demands of those enter¬
prises which
marginal, which
are
inadequately managed, and
which the public is not patron-'
izing. At least, you are properly
Our
deterioration
be
investment
responsible.
should
from
The
a
ap¬
equal
and
the
security markets provide for the
necessary flow of capital into and
out of business, from which the
whole of society profits.
A
second
social utility flows
various
fal¬
market¬
to
mechanism
symptom of
degenerative disease.
It
any
example,
for
estate,
the malaise may
the
is
a
officer's
posi¬
For
many
iness
has
been
the
national
past
centage
received
commercial
The latest figures on
banks
seven
of
banking
show
the
years
total
from
gross
the
that
in
per¬
earnings
investment
the
to
people
now all bus¬
under fire from
been
and
sources
stigmatized
profession
success
as
and
.
anti-social.
not
has
no
has
escaped
doubt
you
again been placed
defensive as regards the
the
and
social value and propriety of your
calling.
day
Possibly on
you
some
blue Mon¬
a
even
entertained
and
reservations
have
doubts
for
occasional
proportion of partially or wholly
tax exempt securities, the earn¬
ings from the investment port¬
buttal
folio would
mis¬
economic parasites.
reduced
porate
be
still
figures
taxable
higher if
back
to
equivalent
a
you
cor¬
basis.
Second, the production of the in¬
the
guided individual who regards us
as
unproductive,
First, I will
use
and
virtually
higher
them
to pay
capital.
their
for
rates
both
the analogy of
of
It
you
are
of
which
rob
this
selection
L thus apparent that by
of
proce s
investment
and I and all investment men
contributing to the shaping'
To the
job well,
dynamic
economy
that
our
extent
do
we
our
insight into the direction of
progress, -with understand¬
ing of economic and technological
trends, we arc among the good
with
sound
architects
the future.
of
It is, of
regrettable that laws and
regulations so limit our range of
course,
choice oi investments that we are"
forced
often
to
commitments
and
ities
ready
in
types
well
exclusion
cf
concentrate
types
of
of securities
supplied,
others
our"
activ¬
to
al¬
the
deserving of
our
support and more needful of.
our
dollars;
I
am
also be
the
mechanical friction and electrical
resistance,
handicapping such businesses, by
years
on
of
vailing,
requiring
and
equal, still less any
in
point
of
quality.
no
superior,
resistance.
or
low
commissions
of transactions in
rapidity
ceived from non-business sources.
that
a
attacks
gations of the U. S. Government
losses
only contrast the close
spreads,
temporary matter, a trend which
will shortly
be righted.
Adopt
instead the skeptical attitude that
himself
now
remind ourselves that direct obli¬
minimum
are
give
making
the making of capital gains.
ophy is
based
By
need
of
their community a more correct
picture
of
business,
including
banking, than they have long re¬
to
much
folio cannot run the risk of the
portfolio has averaged about 46%. yourself on this score. Such feel¬
I, of
book losses that can result through This
course, do not mean purchasing
percentage is probably high¬ ings, in my opinion, are ground¬
investments to sell them at a profit the
holding
of "credit bonds" er in medium and large banks less and lest we be too close to
but the best profits are obtained despite the fact that such bonds and this figure does not tell the the trees to see the forest, let us
by producing the highest continu¬ usually meet interest payments whole story. First, bond portfolio consider together a few of the
ous
income possible within
the regularly and the principal when earnings viewed as a gross figure broader aspects of our profession.
structure of one's own bank. The due.
give no reflection to partially or Viewing them, I think that we
In passing, it may be trite but wholly tax exempt income and in can hold our heads high and per¬
emphasis in the mind should be
is
sometimes
upon the securing of income and it
important
to an institution where there is fair haps have a better-organized re¬
motive.
operates
economy
extraordinary
securities markets with those pre¬
the
the
it
Hence,
have
will
the
of
an
frictional
of
cost:
provide that
men
continuity of markets upon
our economy depends.
Our
share
with
low
at
and
enterprise which gives the public
destroy.
even
such
this
which
to
merely ignore; they tend to curb
tion
that
close
afford
investment into
of his
quickly
investment
We
The
cost.
can
of
field today is most important and
especially when the
bank investment port¬
funds
man," what the masses do not
understand,
they
distrust,
and
what they distrust they do not
in
structure.
society.
successful
was
then, it is obviously so no longer.
In this "century of the common
to
dangerous
to
attitude
that
functioning.
in
mantle of profound
frightening
se¬
a
sometimes
and
halo.
deterioration
formed
labor
union,
society.
They
secret
cloaked, in
professional
guilds,
which
combination of
peculiar
a
years
case,
average
into
economy,
When
of
as
artisans
also
storms
many
be
assume
quality
pays—or,
we
Maybe
come
high
seldom
standards
our
regarding
us,
and
the
for
a
only if he can readily com
cash,
One
By the same token shun the
security which has outlived its
security is only the first smell of
agent as their comprehension of liquor—during business hours—
high grade security was at times on
its
breath, long before its
woeful.
Time has changed this, financial
hiccoughs trumpet its
however, and my experience to¬ downfall,
an
investment
man
day is that seldom do the repre¬ must take care not to delude
too
speculating
than
day to day
tion.
thinking.
mind
road
mean
our
much attention to day to day fluc¬
tuations and let them influence
our
"the
be
bond salesmen who acted like his
best ad¬
investment edu¬
sound
should isolate himself to
degree
may
would
a
is
trade
of
by
served
are
of
in
ment
it
has
In the Middle Ages,
were
allow
not
fluence
a
deposit movement
necessary.
re¬
responsibility
large
a
themselves
is
will
I
the
alone
not
and
of
economy
ready
price
rests upon
of
goods
usefulness
money
vert much
believe.it
of
entire
invest
business.
place.
An example of
This applies quite market
investment portfolio. potential credit improvement is
pansion in bank loans is not en¬ In the
friendly
neighbor
to
the
perfectly legitimate pursuit our
couraging and therefore that the of
the maximum safe and con¬ north. Many believe that Canada's
commercial banks of this nation
tinuous rate of return, the temp¬ fiscal policies, national resources
will continue for years to be large
tation
to
depart
from
quality and otner latent powers will con¬
investors as well as lenders
of
to
standards is insidious and power¬ tinue
improve her national
money.
Two, some fears which ful. I can
credit.
purposes
demonstration
I
their
banking
which
of
men provide
functioning?
The
investment
do
in
of
sponsibility of an investment of¬
I question whether it has
a
rightful place t in this talk of
or
free
very
is
it
money
ficer,
security, it takes its
position yieldwise in the
Two
speak
How
Our so¬
our
economy
need
work
and
output;
and
owner
national
that
Because
ciety
frictionless
exchange
at
minimum
earnings.
system
men
bargain
Facilis
averaged
total
our
loan trends and
is not
at it looks.
of
humanity of useful work.
from the
only 37%
received
income
account
part
situation
easy
period
tution
that the maintenance of principles
as
the
same
seven-year
the
percentage of total
policy can change his investment
position.
Close cooperation with
others
in
one's
bank regarding
to
the Aeneid indicates
Vergil in
During
mine.
or
in
incidental,
costs
banks,
to
production of
earnings from loans and discounts.
The outlook for loans in his insti¬
One
of
several
purchase knee breeches.
today an investment which will examples which could be cited is
improve in quality as the years the field of railroad reorganiza¬
pass and thus improve the quality tion securities. Be among the first
of our security portfolio.
to discern fundamental and prob¬
which
of
attainment
more
higher
now
the
to
the
buying of U. S. Treasury
obligations and that this inflation
ideal,
the
from
low-
contrasted with
as
many
loaning
department, for it is within his
investment portfolio that the ebb
hostage
sense
a
bank
an
operation
loan
has created bank deposits through
have
portfolio derives
relatively small-staffed,
a
cost
gross
the
storms.
we
vestment
responsibilities of
an investment olficer, particularly
in a medium to large commercial
bank, is to realize that he is in
of
One
dous
Further,
by
Corp. and Glore, Forgan & Co.
$22,000,000 mortgage bonds. Probable bidders: HalStuart & Co. Inc.; Blyth & Co., Inc.; Lehman Bro¬
sey,
United Gas Pipe
was announced that in connection with acqui¬
Wilcox-Gay Corp. of Garod Radio Corp. and
July 14 it
Majestic Radio & Television, Inc., Wilcox-Gay-Majestic
Corp., the new company plans public offering of 500,000
shares of common stock (par $1;.
Underwriter—Gearhart Kinnard & Otis.
Proceeds—For working capital,
of
& Co.
and Glore, Forgan
Pacific
•
pioud
and
"
1
you
proud, that over tl
<
sheukl'
e > eais
professional standards of
calling
better
are
rising and becoming
recognized.
•
our
'
"
Volume 172
Number 4944
...
The Commercial and Financial Chronicle
(1127)
gems
as
tact,
tnere
fewer
no
holds it
war,
able, in
of
interest
grand¬
our
collection of
a
good jewelry, linens,
«'
cutlery, tools
rust-proof
other non-perish¬
or
able but universally useful things
which can easily be stored. Urges
5%
individual
of
be
savings
applied to this
be
too
'
This
week
I
investments
dren and
less
writing
am
for
about
grandchil¬
your
great-grandchildren. Un¬
the
affair
Korean
or
similar
due
will
see
probably
radical
no
and
grand¬
children
will
probably
real
see
troubles.
Every read¬
has
our
seen
dol-
own
1
a r
drop in
purchasin g
Roger W. Babson
It will continue to
I
German
U. S.
drop,
personally
mark
60
cents.
war or no
have
seen
from
go
dollars, to
less
to
power
than
war.
25
the
cents
the Chinese
zero;
dollar from 50 cents U. S. dollars,
to
nearly
and
zero;
the
French
franc from 20 cents U. S. dollars,
to the present value of one quar¬
ter of one
of
cent.
of
most
The
the
same
If
War
value
of
rapidly decline to
ure
did
as
our
1860's.
For
people
would
paper
again.
such
The
then
could
to
is
As
such
long
with
scales.
But
solution
a
only
natuial pearls have
be
of
the expensive
a limited suo-
Collection
a
Now
of
believe
that
those
read
this column
will, in their lifetime,
always be able to use U. S. paper
though it continues
currency even
decline in
value. On the other
win
World
War
III
many
yet
cities
our
will
destruction and
become
to
use
our
great grandchildren
to
even
for
com¬
or
grand¬
our
children.
Therefore,
should
we
in
their
start
not
interests
collection
a
fair
children
to
leave
only
dollars
paper
banks and
these
life
the
insurance
compa¬
nies will pay out to them? Hence,
suggestion is that readers
each
year
con¬
of their savings
into
collection
a
small permanently valuable
articles, storing them for their
grandchildren
and
great-grandchildren to use as money in some
later temporary emergency. Such
be
new—not
should
be
locked up in "Grandma's Treasure
for
perhaps
50
years
or
that
issues
soned
back
Co.'s
has
that
A
issues, it
been
sea¬
tending
at¬
more
month
case a
notably
utility
was
are
the
was
is
the
in
pressure
yields
This
in¬
true
in
industrial
and
pointed out.
an
points
of
average
2.72%, which
2.68%
to
is
not too surprising.
calculated
on
on
issues here
new
was
pick
up
e
New
the
shelves.
It
still
of
possible
Plantation
to
Pipe
Line's
$40,000,000 of 20-year debentures
ferred
few weeks ago, and
a
Light
stock
Co.'s
new
pre¬
the
Same
Indications
Hard
were
Road
Groups
Illuminating Co.'s $25,000,000 of new 35-year first mort¬
gage bonds, due up for public of¬
fering today would require a bit
of selling effort.
Priced at 100.787 to yield 2.715%
this issue carrying a 2.75% cou¬
appeared destined for only
a
the
rela¬
for
reported forming to
were
expected
an
shares
of
offering
of
preferred
new
by Kansas Gas & Electric
Co. probably next month.
Delaware
Power
held true in the
Light
has
Tuesday on $12,000,000 of new
30-year first mortgage bonds, and
Alabama
Power
24, tentatively
of
Co.
$10,000,000
has
set
Oct.
the date for sale
as
of
preferred
new
stock.
Meanwhile
El
Paso
setting plans for
of the block of 260,000 shares
&
called for bids to be opened next
the part
of big investors.
same
in
stock
that Cleveland
Electric
Much the
were
woes.
is
45,000
Face
market
money
bid
first
of
Electric
of
mortgage bonds between
com¬
DIVIDEND NOTICES
the
recently
UNITED DYEW00D CORPORATION
floated
to ultimate buyers,
who
follow
market
closely from day to day.
They
report
fair
a
A
of
September
main
of
INVESTING
BROAD
COLUMBUS
of
Board
Directors
of
this
of
December
record
at
the
N.
company
of
Directors
of
this
clared
a
(50e)
business
company
on
a
dividend of fifty cents
share
business
Capital
the
at
close
Secretary-.-
of
this Corporation have de¬
of
37>,2C per share on the
stock.
They have also de¬
of
62'/2c per share on the
Common capital stock.
The Dividends on both
Preferred and Common stock are payable Octo¬
ber 5,
1950, to stockholders of record at the
close of business September
19, 1950.
dividend
a
clared
capital
dividend
a
WALLACE
M.
KEMP.
Treasurer.
of
Wichita
L. G. CLARK, Treasurer
,
FRAHER,
Treasurer.
September 26, 1950.
the
EDWARD
the
on
Directors
clared
Preferred
Company, payable
11, 1950, to stockhold¬
record
of
ers
per
of
of
re¬
Stock of the
14, 1950, declared a dividend of 20
share on the outstanding Common
company
payable November 10,
1950, to stockholders of record at the close of
business on October 16, 1950.
cents
close
the
Checks will be
Treasurer.
The Board of Directors has de¬
on
September
Stock
MOISE,
TECHNICOLOR, Ine.
Y.
1950.
of
Board
close
at
HAROLD E. MITCHELL,
Dated, September 14, 1950
business
will
record
25, 1950.
Shoe Machinery
Corporation
October
15,
books
of
business September
United
September 14, 1950, declared the regular quar¬
terly dividend of $1,375 per share on the out¬
standing 5y2% Series Cumulative Preferred Stock
of
the
company,
payable January 1, 1951, to
stockholders
of
close
the
mailed.
The
COMPANY
STREET, NEW*YORK 4,
the
Transfer
stockholders
119
per
share on
the
corporation has this
payable October 2, 1950,
declared,
been
to
Number
$1.75
of
open.
DIVIDEND NOTICES
CITY
at
record
1950.
20,
of
Stock
day
Brooklyn 22, New York
Company
has declared the regular
dividend
of 25c per share on the
Stock,
payable October
1,
1950
to
stockholders
Dividend
dividend
Preferred
The Board of Directors of the American Manu¬
facturing
quarterly
Common
amount
Preferred
COMPANY
Noble and West Streets
according
the
MANUFACTURING
AMERICAN
offerings
have
proved to be sluggish in moving
those
UDY=
DIVIDEND NOTICES
Lag
September 12, 1950
River Oil
Corporation
Dividend
gillllUUIIIIIIIIIUIIIIIIIIIIIIIIIIIIIIillllllllllllllllllllllllllllllllllllllllllllllllll^
A
dividend
of
No. 18
Thirty cents (30tf)
per share
paid October 16, 1950 on the Common
the Corporation, to stockholders of
record at the close of business September 30,
will be
|
OTIS
Stock
of
ELEVATOR
COMPANY
| and Electric Association |
money"
|
PREFERRED DIVIDEND NO. 14
|
The Trustees have declared
|
available, it
In France, after
Joseph F. Martin, Secretary
September 12, 1950.
Common Dividend No. 172
§
=
|
a
A dividend of $.50 per
§
the
no
par
share
on
value Common Stock
|
quarterly dividend of $1.12'/2 per
share on the 4Vi% cumulative
People, of course, must use some¬
thing for money. It must be easy
|
convertible preferred shares of
|
the Association
payable October
|
record
to
|
|
|
|
1, 1950 to shareholders of record
|
October 6, 1950.
of business September
§
Checks will be mailed.
War
about and easily hidden
and something which other peo¬
ple want. Sterling silver was al¬
ways acceptable.
carry
As
unobtainable and
silver was gradually hoarded, the
most
preferred form of money
used in
Europe during the last
part of World War II was genuine
jewels.
Even the farmer would
accept this in payment for food
because he could pass it on to
gold
others
was
what
for
he
had
to
buy.
Such gems, used for money, must
not be too expensive and the sup¬
ply must be limited. Furthermore,
they must be of a nature where
the genuine stones can
readily be
recognized from the synthetic.
of
Value
Marine
The investment markets appear
to be gripped by a new case of
"jitters"
of
of
For
the
discomfort
who are engaged in the
distributing new securi¬
I
have
in
mind
such
ury's
tions out of the way, a period of
at least relative stability would
Thomarton
National
Bank,
at Thomaston,
is
in the State of Connecticut,
closing it's affairs.
All creditors of the
Association
to
present
undersigned
are
therefore
at
said
,,,
D^trd
payment
Bank. > >
for
claims
hereby
.
notified
to
the
p. i. roberts,
Liquidating Agent.
Atm'Sh !&;! .1950.
the close of business
on
Bruce H. Wallace, Treasurer
|
New
f§
Southern
California
York, September 20, 1950.
Edison
IllllllllllllllllllllllllllllllllllllllillllllllllllllllllllllllllllllllllllllllllllllllHIhl
Company
DIVIDENDS
COMMON
4.48%
THE ELECTRIC STORAGE BATTERY COMPANY
S3
i-
back
ground lost
and the
on
over
most
of
the earlier decline,
Government list behaved
However, there
appears
to
§OOtk
The
is
that
situation
the
uncertainty
on
over
is
the
basic market.
Some
to
member
ments
anticipate
banks
by
the
a
a
dispo¬
markup
in
reserve
require¬
Federal
Reserve
Board may be at the bottom of it.
Bankers, however, pointing to the
have
Accumulated
the
of the Company a
.
I XJLlAPfAAJl/l)P
Wf l/tM/vlAAi/ y L
fifty
tember 30, 1950, to
r\
of record
.
l^uamruj
on
declared
Surplus
dividend of
($.50) per share on the
Stock, payable Sep¬
cents
Common
at
stockholders
the close of business
September 19, 1950. Checks
will be mailed.
u
H.
s~7\
t"
Op'v
people feel that
Directors
from
90
/I Yi ftf)
r/
l/LCiAyllCt
SERIES
I
STOCK
NO. 10
of Directors has
authorized the payment
since there has been considerable
sition
CONVERTIBLE
The Board
if
■r\
SERIES
NO. 14
PREFERENCE
the
distinct feeling of caution,
based
4.56%
NO. 163
STOCK
CONVERTIBLE
DIVIDEND
DIVIDEND
way
a
DIVIDEND
PREFERENCE
The seasoned market did work
its
sensus
located
H. C. MOORE, JR., Treasurer
September 14, 1950.
at
develop.
'"backing-up" of new issues
in the municipal market, the con¬
The
|
payable OctO'
1950, to stockholders of
28,
a fortnight ago, it
though, with the Treas¬
big mid-September opera¬
fresh
LIQUIDATION NOTICE
.1
ber
as
jewels—the products of
not outright nervousness, pervad¬
the ocean—best qualify under the
ing the market place at the mo¬
above requirements. They are not
ment.
too expensive, yet their supply is
Observers cannot put their fin¬
limited and they cannot be manu¬
gers definitely
on
a
cause
but,
factured
artificially without de¬
tection.
15, 1950.
has been declared,
time,
a
looked
be
Marine
to
=
at the close
=
ties.
better.
Jewelry
much
those
task
is
$4,500,000 issue
a
and the close of the year.
now
stock, sold to bankers earl¬
mon
Way
tively near future provided noth¬
ing happens to add to current
go.
case
On
going ahead with plans to enter
reported
about
60% sold with the balance still to
pon
Issues
Other potential borrowers
is
lots
corporate
new
The
is
it
ier in the week by New England
month
a
equity markets a
heavy side, however,
the
on
the drag
of Central Maine Power Co.
of
Recent Issues
on
bit
Transmission
2.62%
to
investment and
ago.
Most
The
of
case
about ten basis
than the compar¬
better
2.58%
the
luke-warm reception on
High-grade utilities, it is noted,
selling currently at levels to
25
issue,
new
In
sold with the balance still
are
yield
Gas
new
hands
that about half the total has been
The
are
away.
market
toward
a
chipping the
point at which
institutions
the
1950.
accepted.
II, the farmers pre¬
ferred silver teaspoons for money.
World
renewed
a
in
| New England Gas vjgg
Chest"
more.
silver coin is
as
will be
to
out
Tennessee
Duquesne
thus
the
Meantime
so
still
sec¬
kept
house after
"hard
any
new
fully
clined
of
such
should
is
price
to
is
grand¬
bonds, and
savings
stocks,
which
and Buyers
there
below
result
jewelry, linens, rust-proof
cutlery or tools and other nonperishable but universally useful
things which can easily be stored?
it
of
quality
buyers would be interested.
of good
Be Used for Money?
as
yield
to
articles
No
too
able
is
brought out
feel
tendency
so
perhaps
Is
steady offerings of size¬
Yields
Some
such
huge — our present
dollars may be
of little
paper
there is evi¬
comes—
suffer
con¬
gages.
bit
Virginia Electric Power Co.'s
offering
bankers and dealers.
"sticky"
good
national debt
our
as
for institutional account. Evidence
is seen of some
switching to mort¬
or
ondhand—and
Jhappen
it
if
op¬
able blocks of industrial and
pub¬
lic utility issues of
Double
who
bit to the
moreover,
dence of
ago.
Gems, Linens, Etc.
I
goods.
prepare
now.
the
side and,
issues
new
a
tractive than
Begin
to
tinue to lean
fish
piy.
accept
to
pany will insure your
it starts to burn.
What Will
in
tangible
time
event
an
low fig¬
very
time
thing
same
could
refuse
for
money
This
come,
currency
a
also
classified as marine jewelry. In
fact, even the cheap
synthetic
pearls
are
made
from
beads
sider putting 5%
the
dollar
a
cultured—can
of
should
III
our
and
my
currencies
World
the
finding, cutting and polish¬
ing these gems. Pearls—both na¬
is true
world, including South America.
.
cost of
tural
Nevertheless
to
the
greater
increased labor
the
our
ren
er
slowly in¬
changes hand, I think nearly every reader
child¬ will agree that, although we will
money
but
bartering
tradesmen.
both
scarcity and
into
oldsters
any
Treasury
such action
see
necessary, at least at this time.
more
Hence, the wholesale prices of
one
World War III,
we
and
such marine gems will
some
develops
erations, do not
gems.
any
for
expensive
farmers
covered
purpose.
be
never
net results ot recent
the average diamond would
crease
children, to start
marine
jewelry is not feasible. In
with
be advis¬
may
these
In
be
to
yet the manufacture of diamonds
case,
Mr. Babson, predicting continued
depreciation of the dollar, war or
will
continue
diamonds made by nature, and as
tor
By ROGER W. BABSON
_
will
all
of
There
Household Goods
amber, coral, and jet.
47
C.
ALLAN,
Common
28
Stock;
cents
share
per
the
on
Preference Stock, 4.48% Con¬
vertible Series;
28V2
cents per
share
on
the
Preference Stock, 4.56% Con¬
vertible Scries.
All three dividends
are
pay¬
able October 31,1950, to stock¬
holders of record October 5,
1950.
Secretary and Treasurer
Philadelphia 32. September 8,1950
of the
following quarterly dividends:
50 cents per share on the
Checks will be mailed
from the Company's office in
Los Angeles, October 31,1950.
■
p.c.
.',
Treasurer
hale,
>
September 15, 1950
>
'
;
I
>
\
48
The Commercial and Financial Chronicle
(1128)
.
.
Thursday, September 21, 1950
.
Lyon Carter
BUSINESS BUZZ
Lyon Carter of Lexington, Mass.,
a
Washington...
Behind-the-Scene Interpretation*
from the Nation's
/■ fl /
Capital
V'VlTI
y
l>cM/
xJL f
partner of the investment bank¬
ing firm of Estabrook & Co. since
Jan. 1, 1929, died Sept. 20 after a
brief illness at the Cape Cod Hos¬
pital, Hyannis, Mass.
Mr.
Carter was
prominent
SMITH. SMITH, SMITH
JL fjr U/
AND
„
*
Boston
He
forecasters for the most part seem
be
to
concerned
with
primarily
keeping
their
doggone
mouths
shut, and that spectacular leap
which the U.
made
above
lines
in
allied
S. and
the
previous battle
a
brilliant
offers
Korea
example of why they
ing
in
much
forces
not talk¬
are
height
the
the
of
in
McMahon
Biren
hold
to
sides
now
say
also
toughest fights of the GOP is in
Colorado where Eugene Millikin
in danger for
is
one
scholar
finance
on
Walter
able
They are not talking because
nobody knows what is going to
happen next, the effect of which
George of the Finance Committee.
would
of
make
political
landing above the
net
on
the
it
lines
battle
than
1948.
no
was
balance, things
were looking
pretty rosy for the
Republicans, although you couldn't
get any prominent GOP member
to
grind out anything
the
routine
and if
confident
then, reluctantly.
The
try
than
prediction
more
feeling was that the coun¬
fed up with the Admin¬
was
istration's
"bungling," with the
uncertainties, and so on, and that
the
would
voters
it
take
out
on
the Democratic members in office.
chance of
the
All
for
capture of the
Republicans.
private
but
tion
predicting
were
with
in
House
their
of convic¬
lack
notable
voices
victory,
with
and
a
surprising vagueness about what
they would win.
seats
of
is
just such
thing
a
that
as
leap frog military action in Korea
which
the
scares
daylights out of
the really responsible forecasters.
If
the
offensives
northern
on
all
just
zones
the
more
well-conceived
are
counts,
bring
in
results
the
about
might
spectacular
a
victory. The victory would appear
all the more brilliant because it
no
doubt
holding
large
took
back
forces
being
was
order
to
real
the
from
held
build
offensive.
risk
to
which
front
a
precariously,
for
This
the military
guts
now-revealed
the
is
leap
one
of
in
people call big "cal¬
culated risks" which, if they suc¬
ceed,
make
national
heroes
and
sometimes Presidents. When they
fail, they make bums out of Ad¬
mirals and
Generals.
GOP
small
forfeit in the
of
number
four
with
totally
at
or
In
affect
three
the
House
as
i|t
The
as
that
ponderant
be
a
liberality
of insured and guaranteed
housing
finance.
thought
order
"cutting
before
schools
question.
President's
tried
be
this
on
the
that
two
are
for
out
cutting
of
One
is
mid-summer
back"
be
under
higher
5%
than
ments
down
pay¬
required before
were
FHA
VA
and
loans,
and
limited values to the basis of costs
of July 31. The
as
technical
regarded
the
as
many
is
effective,
reasons,
more
long-run.
There
cially
have
been
signs
boom
has
that
its top.
building
On the
of
approved
housing
loans may be so great as to tend
to
entire Red Korean offensive to at
new
best
put up stiffer down payments.
the
armies
enemy
and
annihilating them.
any such good things hap¬
pen, without other things inter¬
vening, then the election of a
strong Democratic Congress would
If
seem
to
be
almost
in the
bag.
On the other hand, if the land¬
ings north of the previous Korean
lines
the
cause
Kremlin
to
deal
off their Chinese Communist deck
the
how
v.
hole
endeavor,
matter
no
brilliantly conceived,
result in
even
an
might
greater disaster
to the IJS-UN forces than if these
additional
men
had not been
counter
make
is
raise them to
war, there
pretty
town
that Hoi en. Douglas, raihpant "Fair
Dealer," would get beaten for the
I
expectation
a
iff]this
as
the
new
lars,
house
the
the
but
of
the
the
tween
veterans'
The
HHFA.
of the
controls
which
on
the
*
several
down
much
houses,
payments
the
range
5%
or
down
pay¬
as
25%,
may
even
$10,000
or
call
of somewhere
of 10%
less
to 15%,
for
loving
as
an
The
about
expanded
the Housing and
Agency is in fact
top dog in housing finance under
President's
orders
issued
pursuance
of the Defense Produc¬
tion
HHFA
is
top dog be¬
cause
it
is
delegated power to
control
"government credit," or
FHA, GI, Fanny May, and certain
institutions.
The
greatest
ernorship
antees
government
insurance.
About
race
the
in that state.
best
the
Democrats
-could look for in Connecticut
was
or
this
increase
no
year,
infinitesimal boost
in
procurement
as
for
fear
that
to make materials
on
More seasoned observers
Hill, however,
tures,
even
in
"eco¬
between
expanders"
have
sold
the
on
the
basis for developing
as
a
ment
in
own
dream
idea of
under
this
of
the
govern¬
being
getting
for
expendi¬
procurement
started,
$52 billion and
A leading producer of cement
in
fast-growing
Southern
California.
to
run
Analysis of this Comjy "•audi
$55
bil¬
a
review of the Cernro
.
lag-
try available on request.
using
sake the expan¬
capacity
auspices,
fondest
the
look
with
the
on
lion, and the deficit not less than
White House
war
RIVERSIDE CEMENT CO.
CLASS B (common) STOCK
short¬
the
WE SUGGEST
ca¬
from developing.
crossed
For
Large Appreciation Potential
military
the
left-wing
$8 billion.
re¬
flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not
the
"Chronicle's"
$8*1'
Selling ahovt
(This column is intended to
coincide with
own
LERNER & C
ir° \
Investment
10 Post Office Squat
ILstoft
Tel. HUbbard
*
Mas,
2>V&~
views.)
IIAnover
2-0050
with
Teletype—NY 1-971
Firm Trading Markets
FOREIGN SECURITIES
All
Baker Raulan.i
Copper 6* Steel*
Jack & Heinle
Issues
Susquehanna Mills
PARL MARKS & pp. INC.
FOREIGN SECURITIES
SPECIALISTS
guar¬
The Federal Reserve Board, on
the other hand,
regulates, in con¬
Allied Electric Pre Jucts
Cont'l
in
financed
Jimmy
plant
pacity would not forestall
nomic
HA. 2-8780
Teletype N. Y. 1-1397
would
That
and other controls look ridiculous.
that
Exchange PI., N. Y. 5
now.
Boosevelt bit the dust in the gov¬
while
total.
1919
ESTABLISHED
40
increase in Marshall Aid
foreign military aid, and such
President
plant capacity, and then went
say
M. S. WlEN & Co.
probably
expanding
housing construction is
Senate
no
in
volume of
CahfoiTa a
forces
larger
would
just about account for the
achieved
an
first
Scophony-Baird Ltd.
uncom¬
in
capacity.
the
recruited
expenditure
fortable emphasis upon expanding
talked
Cinema Television B
rise in $8 billion above last year's
mean
"controls speech" laid
and less than $6
paying, feeding, and
transporting
here
observers
year,
Corp. of America
Government Employees Insur.
of last January.
year
being
Finance
Act.
the
if
keen
last
Trad Television
Video
deficit
remarkable
a
Finishing
Equipment Corp.
versus
Incidentally,
other
:|:
is
City.
U. S.
Television
using this figure.
The cost of
thought that the President in his
ages
& Reed, Inc. of Kansas
the Hill, some
forecast, because it involves ex¬
penditures
of
only
$8
billion
slow
while "low cost"
$12,000
want
is only a matter of emphasis,
sion
as
This
are
CITY, Mich.—Vic¬
tor W. Wiskochil is with Waddell
billion above the forecast for the
much.
to
to
not
istration
above
and
spokes¬
So many will have their fingers
absolutely in dol¬
higher
up
is be¬
lobbies
veterans do
they regard
FHA too
plant
(Special to The Financial Chronicle)
TRAVERSE
expenditures in the neighborhood
GI loans put in HHFA,
vastly for its
put
arguments
professional
ment. Thus, buyers of upper mid¬
dle income class houses may have
more,
real
which will develop shortly
to
R.
Blyth & Co., Inc.,
With Waddell & Reed
closest touch with the Admin¬
One
but
with
$45 billion, and
private financing in¬
against the homes
moderately well-to-do.
against
stitutions
It
of
laws
and
old
from
revenues
tax
new
predicated
is
This
billion.
total
in
an
is that the higher the cost of
ever,
the
C lies'if the
much
The way it will work out, how¬
So it will still be impossible to
forecast the trend of the Congres¬
sional elections for some time.
not the uncertain-
It
of 20% down.
average
Home
were
as
$3
as
on
$48 billion. On
or
said that the prospective order
may
toward exactly the opposite.
If there
restrictions
So it is probable that buyers of
homes will be required to
com¬
mitted. Then, of course, the elec¬
tion results
would
be
inclined
further
genuine cut-back difficult.
a
that the current year's
deficits will be "at least as high"
gestion
of
will
if these "limitations"
not in fact to be effective,
the time it is discovered the
back-log
de¬
not
offi¬
prove
by
and
alone
the
passed
other hand,
revealed
that,
discrimination
The
men
latter, for
detailed
and
is
#
*
Strange as it may seem, it would
that certain Administra¬
tion sources are inspiring the sug¬
higher down payment in the fi¬
nancing of a home through private
than through government chan¬
of
Forbes
Pacific Bldg.
*
earlier had
the
contrary,
HHFA
intend
to
impose
a
not
does
nels.
Ore.—Dexter
PORTLAND,
Advisers.
ex¬
which
remarks
indicated
longer
further. In
Unless
the
new
landings are
poorly conceived, the possibilities
range from at least upsetting the
trapping
spite
that order the President allegedly
required
ISN'T last?"
name
in the Council of Economic
group
appear
Notwithstanding
housing
on
while
a
back
nor
ment.
the
make
the
in
pre¬
long
will
cut-back
severe
neither
loans
guaranteed,
terms
pected to be sold to the govern¬
to
before
Administration
the
HHFA,
mortgage
nor
if
seem
just HOW do I know MY
with
home
of
insured
*
chances
"—and
the
many
Blyth & Co.
(Special to The Financial Chronicle)
trend
a
to 100 seats.
up
With
^
or
sultation
rule
a
as
H.
associated with
Atkinson-Jones & Co., U. S. Bank
blizzard,
hitting
unexpected,
Democrats.
now
Bldg.
majority of
a
most
complete
a
is
election, hardly
than
more
two,
or
Ore. —Clyde
PORTLAND,
Woodcock
be¬
can,
-
one
frog
what
Atkinson-Jones Adds
pronounced
a
the
the
There
It
here
even
Democratic unsafe seats potential¬
by
in
Democrats
even
cause
it looked at least fair for
the
the
all,
toward
ly
affili¬
become
ated with Robert D. Bowers & Co.
(Special to The Financial Chronicle)
swing
result in
a
of Denver.
removing Lehman from
in
has
Cunningham
but
state,
and
the
SCOTTSBLUFF, Neb.-John P.
Senate.
can
servers
that
happy and certain politicos
think they have at least an
Even to the most conservative ob¬
-capture of the Senate and better
in
Democrats
Ex¬
Invest¬
the
Association
Bankers
of
of
(Special to The Financial Chronicle)
the results have been anything but
out
for¬
a
With Robert D. Bowers
at
amusement
the
forecasters
Prior to the
Korean
much
the Rube Goldberg tactics of get¬
ting Mayor O'Dwyer out in New
York to "fix up" the situation for
monkeys
more
Truman upset in
secret that
is
There
New
the
Lexington Trust
Company, Central Vermont Rail¬
way, Inc., and Boston Mutual Life
Insurance Company.
less
1950 campaign.
Committee
director
is
hardly
Chairman
than
ment
of
and
as
conservatives
ablest
the
a
rates
of
Exchange and
former member-of the
a
ecutive
reelection to the
Millikin
Senate.
in
financial
York
member of the
Exchange and the Association of
Stock Exchange Firms.. He was
the
of
one
a
Governor of the Boston Stock
mer
Senate, and that was doubtful, and
lose the "liberal" William Benton.
All
Stock
York
the
was
Governors
of
Board
WASHINGTON, D. C.—Political
New
and
circles.
"
■»
Hill, Thompt.cn S Co.
| j!* * t
Trading Di-pcrtrnent
50 Broad Street
New York 4, N. Y.
70 WALL
STREET, N. Y. S
Tel. WHi'sfh'iiS
4-4 >40
t
I
@FedFRASER