Full text of Commercial and Financial Chronicle : September 25, 1947, Vol. 166, No. 4632

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Volume 166

Number 4632

New

York, N. Y., Thursday, September
25, 1947

Price 30Centsa

The European Crisis
By ELLIOTT V. BELL*

Superintendent of Banks,
New fYork State *

H-

•<

■'

dent

tit

;

New York
sees

Banking Superinten¬
By L. O. HOOPER
Market Analyst, W.
E. Hutton & Co.

Western Europe
con-\

fronted with economic
collapse

with serious

implications

Holds U. 5. assistance

forthcoming hut

Mr.

to us.;

must

countries

aided;

agree to expand produc-!
lion and restore .financial

stabil-j

Within the' past two months
there have been
piling up along
the economic horizon the
thunderheads
of
a
great:

approaching

storm.
ern
:
:

West¬

Europe is

depressant.

-relation
:

dollars from abroad.

the

"in

again

British

comes

the

'returned
I

spent

re¬

convinced that the crisis

Hooper

cally

♦An address
by Mr. Bell, at the
Annual Convention of

the

of
i

American railroad or
utility company, and ill a

majority of industrial

corpo¬

rations, may be purchased in'
the
stock market at less
than the cost
physical reproduction.

The sum of
$10,000 invested in
the stock market will
go almost as
far as it did at
this time in 1939.

the National
Association of Supervisors of
State It will not
go anywhere
at the Mayflower
near as
Hotel, far in the purchase of
real
Washington, D. C., Sept. 24, 1947. farm
estate,

lands, a ranch, cattle,
wheat,
cotton, coffee or sugar. It

ten

dollars'

as havmg exprassed jthe
opinion in
address that Britain: was too
,

worth

ling,

■

recent

con veri^-M

bility;:;,iBi&f

hasty in accepting the loan rent /transac¬
last year,
adding that had his country been a little tions
were
coy "America would have come
op p r e s
begging us to take the sive; and we
money.'' Dispatches published in this
country do not, so far deprecTas we have
seen
Dr. Melchior
Palyi
them, reveal the
reasoning which led to ated the loan
this remarkable
some 30 %
conclusion, but there is good
by raising our
ground for
prices,
suspicion that such views are
The; fallacy of the
shared by a
good many in
last, point
Great Britain.
from

should be obvious:
British
with the aid of the

/One

can

only

these

Britain.

are

quite convenient for

would

parity

(Continued

buy five
food;
1939

values, at the grocery store.
Some
(Continued on page
30)

But it is not
only abroad that strange ideas
about
"inevitable depression" in
the near future and the
;
(Continued on page 30)
'

below, in*

page

32)

\ i

Municipal

R. H. Johnson & Co.
Established 1927

buying

Iqru, and simi¬
disciples pf this odd doc¬ lar excessive
trine are followers of
foreign purchases,
/Lord Keynes—or
perhaps have beep w e r e instrumental in ruisuig
unduly influenced by the
reasoning of one Mr. Stalin, whose American prices, especially of
reasoning would fully support such an idea.
foodstuffs. Without the
It
excessive
be added that
hardly need foreign demand our farm
such ideas as
prices
suppose that the

b "i g

takes

dollars

o/t

ownership

Banks

Havana

—

any

public
vast

shorts

enough;-the
^

wide.

share
p

45)

page

bonds

critical

prim ai¬
rily o n t he
United States;
The loan' was

Depression Forecasts and Their Uses

ever, has been

the

public officials and
people of all sorts in an
effort to
obtain a better
understanding of
this

Seldom,

bankers, businessmen,

t h

crisis,'

age,

spread

grade

from

better part of
the Summer

approaching crisis.

t h

/yieldlob high

Europe, where
Elliott V. Bell

tional
dollar

i fe 1 d o n
stocks and the

T you; know/. 1
-have only just

they should, be, blame, their
upprfer
——-❖cedented ,•na

1925.

between

•

time

any

•

leftists, including the
"Economist," whiieadmitting that
are not
quite as

things at home

EDITORIAL-

•y

As. most

-than

nee

'The

a re

:"kcheaper

^-fescue.

(Continued

planning that U. S. would be
plunged Into and American
prices would fail.
Looks for sub- f
stantial decline in U.
S. exports, but holds
this will not canto
*j
domestic recession since
increased consumer
buying and expanding
construction
activity will take up the slack. Sees
European "soft
money" countries
increasing their'exports to "hard
in order to obtain
money" areas
needed

•'

a r n i ng

States

once
x-

postwar

deep depression

stocks

coliapsie

United

underlying

non-recurrent element of

For months
stock brokers and
market letter writers
have been
contending that common shares aire
cheaper than anything else
money
can b u
y.
In3>-

mediate prospect
of
eco¬

unless-

sult, I

Asserting

price-earnings ratios j
has depreciated
every- i

nomic

economists,

power

margin restriction an imConcludes enrrent
earnings are abnormally high but prices too low.
Urges leisurely accumulation.
portant artificial

facing the im-

buying

Palyi, commenting on the dollar
shortage and the failure of re¬
storing sterling convertibility,
points out fundamental error
was
idea

high profits is
exaggerated, he offers 30-year tabulation 6f
price-earnings ratios of Dow-Jones
Industrials, showing they have
been lower
only five times. Believes

dearth of dollars.

By MELCHIOR
PALYI, Ph.D.

Dr.

securities' present low

present

ity. Says there is great
plethora,;

rather than

Hooper maintains

reflect situation that
dollar's
where but in stock
market.

fhould

talking

>•

Hirsch & Co.
Members New York
Stock
Exchange
■
and
other

Chicago

Teletype NY 1-210

Cleveland

Geneva

INVESTMENT SECURITIES

64 Wall

Street, New York

Exchanges

25 Broad
St., New York 4,N.Y.

HAnover 2-0600.

London

(Representative)

BOSTON
Troy

PHILADELPHIA

Albany

Baltimore

Dallas

Pittsburgh

Buffalo

Scranton

the national
cp bank

Syracuse

Members

of new york

Harrisburg

Wilkes-Barre
Williamsport Springfield Woonsocket

Bond

Dept. Teletype: NY

New York

:
52

1-708

Bond Department

HART SMITH & CO.
Security

THE CHASE

Dealers Assn.

WILLIAM ST., N. Y.

•

HAnover 2-0980

Bell
Teletype NY 1-395
New York" "*
Montreal

NATIONAL BANK

;

Toronto

THE CITY OF NEW YORK

SERVING SOUTHERN
CALIFORNIA
SINCE 1927

Raytheon Manufacturing Co.
$2:40 Conv. Preferred

Solar Aircraft

MgensellerSDurstJnc.
S.

SPRING

ANG5LBS

Corporate Securities

;

Preferred & Common

•

PASADENA

(Incorporated)
•

*Prospectus

REDLANDS

Established 1809

MEMBER LOS ANGELES
STOCK EXCHANGE

TELETYPE: LA 68

;

■

CLEVELAND
New York

.Cincinnati

Chicago

Columbus

/ Denver
Toledo Buffalo

Reynolds
Members

Brokerage

Portland Electric
Power

& Co.

Telephone: REctor 2-8600
Bell, Teletype; NY 1-635

Company

for Banks, Brokers
-

and Dealers

request

New York Stock
Exchange
120
Broadway,. New York 5, N. Y.

;

Bond

Company

$1.25 Conv. Preferred

^Universal Winding
Company
90c Conv,

OTIS & CO.
ClAREMONT

Company

Conv. Preferred

*Twin Coach

and

ST.

TRInity 5761
LOS

90c

Underwriters and
Distributors of Municipal

Investment Securities
626

Copy

jr.

Hardy & Co.
Members New York Siock
Exchange
Members New York Curb
Exchange

30 Broad St.
Tel. DIgby 4-7800

New York 4
Tele. NY 1-733

Bonds

and

Preferreds

IRAHAUPT&CO.
Members New

and other

lit

York Stock
Exchange
Principal Exchange* i

Broadway, N. Y. 6|

REctor 2-3100
Boston

Teletype NY,i-2708
Telephone: Enterprise

1820^

COMMERCIAL' & FINANCIAL

THE

CHRONICLE

...

Thursday, September 25, 1947

(1202)
■

'''M

The Texas Company
Rights

Former Owner

;

BOUGHTriSOlMUOTED

request

Hanseatic
Corporation

New York

120 Broadway,

[BArclay 7-5660

t, e

prise raise the
standard
of

Savoy, Plaza

Savoy >Plaza

observers

has refused

the idea of any cus¬

toms union.

To what

do not expect

Euro¬

the '15

■

•

*e.

have

which

remained
*

other neigh¬

bor, however, could Austria turn
for a union, Austria, this eternal

-states

pean

Vapor Car Healing

Switzerland

In Central Europe,

Realis¬
tic

Russia was

a policy to which
profoundly' hostile.

ford

living.

3/6s, 1956

problem1 child, of the .old - conti¬
which has been unfit for life
since it* was born in 1918. Whom

nent

o n

join? Economical¬
this
side
o f
she tends to .Hungry and
the Iron Cur- ly,
but
those are
itain tounerge Czechoslovakia,
into
one states, in \he Russian zone of in¬
Should she be reincor¬
United States fluence.
should Austria

•

Vanderhoef & Robinson
Curb Exchange H
Street, New York 5

^Members Jiew York

SINassau
'

COrtlandt 7-4070
Teletype'NT 1-1548

Telephone
Veil System

Robertj Lann

m a

ler's

northern states, (Norway,. Sweden
and

Common

Denmark, ;vhave -alreadyt,de¬

clared

Service

••

they

and-Rights

intention was

Bought-—Sold—-Quoted
Prospectus

such

repeatedly discussed
Being the neigh¬

before the war*
;V

would not discuss a

Nordic customs union though

nature

common^

good neighbor policy.

25 Broad

I HAnover 2-0700

not
The

Direct wire* to

poverty.

are

;rIike

and

Russia,; they could not af-

Enemies, from

beginning

from
the Trojan War
the : bloody, massacre of

history,

through

i West Virginia-Pittsburgh

dctual markets
Stee
pfd.

f Electric Bd. & Share : Stubs
•New Eng.iElectric System

Eilm fA*
Hooker., Electro Chemical

Gen'l Aniline &

■

.Virginia Iron,CCoal & Coke r
Kittanning Coal

spiritual tradition. Athens —
city ; which gave the world its
basic philosophy, ; its; poetry ; and
drama
and its architecture. -On

WOrth

Aetna Standard Eng.

>]
r
.

"Moxie Common

Hood Chemical

$36:billion and.U. S. govern¬
ment securities another ; $39 bil¬

for

lion.

Haytian Corp.

]
j

Hit'l Detrola

;

unparalmagni-

.of

Paul

These two items on

price level

since 1933

tion of 1938).

(The:. banking
of

Security Dealers Assn.

the

most

N. Y. 5
Hanover 2-4850
Bell Teletypes—NY 1-1126 & jl27 j

87 Wall St.,

war

these -.short-term

system ,came .out
condition of al¬

the con¬

unparalleled

securities « and

cash

liquidity. *Of

assets, which at the end of

1945

total assets of $178 billion at the

accounted

for

assets,1 now make

;

McCracken

Mr.

term

presented
at
Federal • Reserve
g'orum, Minneapolis, Minn., Sept.
19, 1947.

Commons

held by

estly

of total

42%
up

only 29%.

Conversely, the, amount
♦Address

o£4onger

government securities

mod¬
billion 1 at

banks has increased

from "the v$63

Abitibi

MissourrPacific

Within

United Kingdom 4 %

Pow. & Paper

the

" NEW YORK 5
.HAnover 2-9470

Teletype NY 1-1140.

Curb and Unlisted

Securities

(

MICHAEL HEANEY, Mgr.

banks' portfolios oi

from - the most s liquid
less risky assets.

away

for the purpose

other than

WALTER KANE,

Mgr.

Asst.

JosephMcManus & Co.
Members

and

York Curb Exchange'
Stock, Exchange
L

New

Chicago

.'New York jS

39 Broadway

" Teletype NY 1-161D

Digby 4-3122

Bulolo Gold

$24 billion
i

Private

of car¬

•

■

•

cash balances

WHitehall 4-4970

••

(

(Continued on page 28)

Air Products,

COMPANY

Emery Air Freight Corp.

"Common

•
,.

•*

Common

^Georgia Hardwood Dumber

Bought—Sold—Quoted

Department

Inc. Com.

Detroit Hanrester Co.'Com. {
'i

Common

41 '

Co.

?
♦

Memorandum on request

J • G ' White 6 Company

ih
C.A.Saxton& Conine.

York Securitj^Dealers Ass'a
.

*90

Members
New

relative- to the vol-

;'i.

by the end of ,1945.

demand for credit dur¬

British, Securities

Securities

Department

Net .Market

Scophony,Ltd.

Canadian

Chemical

ing the . war; was quiescent, for; a
number of reasons.
The size, of

Gaumont-British

Minn.&Ont.Paper

Michigan

ryings securities, of $26* billiom at
the■; end of'4941 had »declinede>to

incorporated

Prospectus on request

ReynoldsStock Exchange
& Co.

Members New York

WALL 8T.

Selection

Rhodesian

i-T'v"'

Y. 5

York Curb Exchange

Members New

PUBLIC SERVICE

^Western? Pacific

Teletype NY 1-609

Established 1923

government vsecurities \ /therefore
the
last . year and one-half ha;
witnessed a material reduction in
the, relative importance of sho: tr
term securities-r-accenting a shifj

"FUNDS for

Brown Co.

St. Louis Southwestern ji

Frank C.Masteison&Co.

SOUTHWESTERN
We Maintain Active Markets in V. S.

Pacific

N. Y., ,New Haven
Hartford

by mid-1947.

Chicago,< Rock Island &

70 PINE ST., N.

Prospect Hill Apt. Units

when

time

moving steadily upward
(with the single excep¬

has been

Argo Oil

^tude and at a

McCracken

the

Time, Inc.

Preferreds

Detroit , Canada Tunnel

New Common

impresssive degree
Heavy4 Private1 Demand1 For
of liquidity indeed, y
Bank Credit
•.
The Treasury's cash, redemption
.The recent rapidly expanding
-program . whichbegan early in
,1946, has materially altered / this volume j of bank, loans?, has? consti¬
picture.. By the ; middle of this tuted a further major, banking de¬
If loans for, carrying
year, bank; holdings of the short¬ velopment.
er-maturity t securities
had de¬ securities are left out. of the
clined to $15 billion, a reduction picture, there was an actual de¬
of
almost
60%
since year-end cline during the war in the vol¬
1945.
And the combination of ume of loans.outstanding. Loans

4leled

Lea Fabrics

Detroit lnt'1,Bridge

•

77 %-r-a wery j

velo prnent s
have occurred

during a boom

j 'j

Members N. Y.

Foundation Co.
;

Bell Teletype NY 1*1227

year-end 4945 to about $67 billion

solidated + balance • sheet together
inap7, accounted;for 42% of all banking
propriate
to assets.'J If '-the longer-term lU. S.
government securities were in¬
re me mbe f
that these de- cluded, the- figure ■> would rise1 to

bal'accounted

It is not

H
■

due from banks

the 1920 boom,.

;

Newmarket Mfg.

2-4230

U%n:

Reserve!Bank^of Minneapolis

cash, reserve and

end of 1945,
,ances

at a rate
not
exceeded
even
during

Boston & Maine R.R.

Warner & Swasey

1 oans
ris¬

have been

j
;

Federal

yeaiv$>

last

ing

Dumont Laboratories

iPunta AlegreSugar

Broadway, N. Y. 5

120

changes in banking; pattern rib last twoj years^JMri
demand for: bank credit, ISays inventory loans, though

.bank

United Piece

Members Baltimore Stock Exchange

DyeWks.
United Artists ^Theatre

Guaranty & Trust
Boston Terminal 3^-47
Northern i New - England
Title

Commenting

increases in

Coal

vStockV

Monon Coal' 5's W-ith

MtCracken points out recent,
expanding, do not yet represent
excessive proportion, of bnsiness;borrowing,; and that only part of new construction is financed by bank ,.
loans. Says, riskless days in; banking have, passed, and contends inflationary , forces have -been under^e^timated. ' Shows export? riset not responsible/for-boom and warns bank loans on a too thin margin to !
finance excessive inventories for imprudent plant expansion may create future difficulties.
.
Fundamental changes in the pattern of bank assets have occurred during the last 18
months.. First, the very liquid, shorter term U. -S. Government securities represent a much
smaller proportion of total investments than was true early last year. Second, since June

NEW YORK S

Coke

Com. & Pfd.

Director of Research,

Tel^REctor, 2-7815

Taylor Wharton Iron &
U, S. Finishing com. &

Coal- &

Hurd Coal &»lron

1920-21, ■ the past has kept therii
separated one from the other. Historically,- spiritually, ; socially-4one
is the direct opposite of the
other.
On the i Greek ' side — A
Christian world with' the highest

New York

120 BROADWAY,

branch efficea

TobinPacking

TSrfc sStock -Exchange
Curb Exchange

iNew

;

Davis

Elk Horn Coal,

Request

Members

our

worlds.

the

Banking Developments Indicate a loom
s

: NY 1-1557

Turkey

different

Greece

•

two

bors of

York .Stock - Exchange

St., New York 4, N. Y. 1

New Orleans, La.-Birmlngliam, Ala.

the other side Byzantine and Asi4,
earth will take the
a Moslem eastern-society.
Except
Orphan Austria?
for the eleventh century-when ip
\.On -the ^southeastern tip . of
the Cathedral of Hagia Sofia a
Europe, a, customs union between
cultural culmination was reached
Greece
and Turkey is hard to
Turkey's past was wars followed
contemplate because ' these - two
by centuries of decay; for ages
countries have nothing one could
one called iTurkey "The, sick mah
assemble for their mutual advan¬
.(Continued on page 38)
tage. "They have nothing of a coii-

Who

Members New

only thing: they have in common

fulfillment: of Hit¬
dreams of a Greater .Ger¬

many.

three

The

involved.

are

even

be the.

would

str.uctive

Germany? ' -That

into

porated

'Europe.

o o

political ques¬
tions

Iowa Public

SteineR; Rouse & Co.

continent is divided by scores of border lines; most of the countries,
however, are too small to build up and to feed an efficient economy. ^Hence, the Marshall
Plan requires the creation of larger economic units. For-only in broad markets can- free

Teletype NY. 1-583

Common

Bought—-Sold—Quoted

The European

New York 5

Class "A"

Louisiana Securities

European economic expert
and points out-difficulties

■••V

Courier" in. Prague

of the "Prager Borsen

discusses problems of proposed economic and customs union:in Europe,
arising from differences in soil, in industrial; development and in. taxation ■
vsystems which binder; unity among European countries. : Concludes. .-outlook for a United fStates of ,
Europe is dark, and only a partial realization of .the Marshall Plan is probable, with possible customs .
"union between France -and-Italy,^and another composed of-Belgiumr Holland and .luxemburg.
- r

AFNET PRICES
Prospectus on

Alabama &

Management, Ltd.

Research and

Security Analyst^ Hare's

LANN

ByxDR. ROBERT

Common'Stock

Members N. Y. Stock

Exchange and Other Principal Exchanges

115J BROADWAY
Telephone BArclay 7-0100

NEW YORK 6, N.Y.
Teletype NY 1-672

37 WALL

STREET

-;^NEW-> YORK 5

ESTABLISHED 1890

Tel. HAnover 2-9300

Tele. NY 1-1815

120 Broadway,
-.

,Telephone:

New York 5, N.
REctor 2-8600

Bell Teletype: NY

1-635

Y.,

Volume 166

Number 4632

THE COMMERCIAL &
FINANCIAL

CHRONICLE

(1203)

I N D E X
and

Articles
I

News

European Economic Cooperation

Page

-Within

World Planning in the Frying Pan—Melchior
Palyi______Cover
The Market Significance
.

of Low Price-Earnings Ratio

European

Cover
'2

_________

Banking Developments Indicate a Boom
—Paul W. McCracken_—_______

European Economic Cooperation—Within
«

j the

UN?—Frederick

Widenmann

Mason-

GENEVA, SWITZERLAND

What Can Business Do About Pricing?
—Sen.

Conference

Ralph E. Flanders

Mr.

Our Role in European Recovery—Sec. W. Averell
Harriman
'

Social Security and Its Tax Potentialities—T. L.
Evans,

A Double
r

■

;

Moscow
tical

•

■

Canada

__i

—

^Boston Investment Club Reports

Investment Field

Assets Rise in U. S.

international Monetary Fund
\ Restrictions by Members.

;Reports

basic

2X '

Platinum Increasing in Popularity As
Hedge Against
Inflation, Says Irving J. Louis of Bache & Co._;____

Regular Features
Page
As

See

and

(Editorial).,.

Insurance

Man's Bookshelf™

Business
Canadian

Observations—A.

Our Reporter

1___™1

Securities™

Page

—Cover

Stocks______

Our

Field

—

Public

■——

X>ealer-Broker

Railroad

____—

\ News—Carlisle. Bargeron—___
Business Activity™

i™™-,-..™,

Funds™

News About Banks

and

Bankers

NSTA Notes—.

•*''

Published

FINANCIAL

"WILLIAM

(Walter

'^Sqe article

Other

and

CHRONICLE

bANA COMPANY, Publishers

REctor

New York 8, N. Y.

2-9570

WILLIAM

DANA

9576

SEIBERT,

RIGGS,

;

President

Thursday, Sept. 25, 1947

Coypright T947 by William B.
|.<u
Company
Reentered

25, 1942,
Work, N. Y.,

second-class matter

the post office
under the Act of

1, 1879.
k

" -

on .poge

i_.

per

year

year.

Quotation

year.

Record—Monthly,.

(Foreign postage extra.!

Earnings

Reeord

—

Monthly,

(Foreign postage extra.)
Note-On account of the
fluctutations in
me rate
of exchange,
remittances for for"eign subscriptions and
advertisements
be

mhde

^Wftf

made

Established 1998

situation

Members

organizing

Organization":

and

REctor 2-4500—120
Bell

„

;

Economically

Punta Alegre
Sugar

eco¬

many

Lea Fabrics

"Ecqnomicj

„

for
Europe"
was
formed within the framework of

the United Nations and
its Eco¬
nomic and Social Council with the
idea of

combining and merging all
European emer-i
organizations,, with
the
participation of Western as well as
these

U. S. Sugar

Susquehanna Mills

different

Members, New York Security Dealers Assn.

gency

TTwo meetings
already been held
Geneva from May 2 to 14 and
om
Jfuly 5 to 16, 1947 under
Eastern participation with some
constructive results. After the

jection of the Marshall
Mr.

':h

Haytian Corporation

aspects of
life. In: May

so-called

Dana

Molotov,

Plan

however,

re¬

25 Broad

St., New York 4, N. Y.

WHitehali 3-0272—TeUrtype NY

■

■'

■dttni

*!
ii

l-Rfo'
'

fei

rw"

■

Elk Horn Coal

Common

new

of Europe is the Paris
Conference
of
Western
shortage in trans¬ European Powers established
some
port (railroads, roads, waterways weeks
ago another organ outside
and aviation). Railroad
specialists of the United
Nations, the "Com¬
think that elimination of red
tape mittee of European Economic Co¬
and of hoarding of freight
cars, operation" under
participation of
pooling of railways and reparation 16
European countries, which was
facilities and the/gradual organic
to examine particularly- the
pos¬
restoration of the whole
railway sibilities of Western European
system could do very much in re¬
self-help and the coordination of
establishing a new form of mutual Western
European resources,
cooperation between all European
But after the answers to Gen¬
countries, not only with respect
and

New

must

York

funds.

Poland's coal surplus

indispensable fac¬
tor jn the whole
picture of Eu¬
ropean
coal distribution.
While

BOUGHT

—

SOLD

QUOTED

FIRST COLONY
CORPORATION
52 Wall St.

New York 5,

Tel.HA2-S080

N. Y.

Tele. NY 1-2425

eral Marshall's

questions have been
completed—the
"Economist"
of

London of Aug.

30, 1947, charac¬

terizes this stage of development
somewhat
ironically under the

Established

Eastern agrarian countries are in
urgent need for all kinds of ma¬

headline:

chinery,

practical problem may' arise
again whether ."European Self-

New

help"

New

they* have

surpluses

wheat, timber, etc., available for
mutual exchange.- In raw mate¬

The

Entr'act

Begins—

the

should

ganized

definitely

outside

and

or¬

from
potash, chemicals and
nitrates, and in many manufac¬ the United Nations set-up under
subsidies of perhaps $15 billion
tured
goods^ in housing and ; in
or more, or whether in connection
electrical power and
equipment
manifold possibilities of coordina¬ with U. N. ,an easier and perhaps
cheaper way of European recon¬
tion and even ofjoint action are
as

still open.
mon

Cooperation
European platform

fruitful -than

com¬

may prove

complicated

Ipurely

bilateral
now

basis;.which

apart

struction could be found

European
and

resources

goodwill in

using all

material

common

effort.

1856

H. Hentz & Co.
Members
York

Stock

Exchange

York

New

Curb

Exchange

York

Cotton

Commodity
Chicago

Exchange

Exchange,

Board

New Orleans Cotton

And other

N. Y. Cotton
'

Inc.
Trade

Exchange

Exchanges

Exchange Bldg. i

NEW YORK 4,
•

N. Y.

\'«
.

commercial barter agreements on

mushroom

CERTIFICATES
Bond & Mtge. Guar.
Co.

Lawyers Mortgage Co.

N. Y. Title &

New

may

useful

and

timely

therefore to review what has been

within Europe and

(Continued

CHICAGO

DETROIT

GENEVA,

PITTSBURGH!
SWITZERLAND
\
,

37)

page

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TITLE COMPANY

1947

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—-r—-

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Prom Washington Ahead of the

Mutual

Estate -Securities..

Scarce-

—

Real

Einzig—Dollars Cannot Be

Indications

"Utility Securities—'

Investment

Recommendations

Wilfred May____,

Governments—

Reporter's Report-—

Prospective

•Coming. Events in the Investment

;

similar

—

"Bank

neverthe¬

•

one.

greatest

—

Yishinsky Scores "War-Mongering" in U.

...

U, S. Finishing Com. & Pfd.

immediately follow¬

war

Commission

vivendi

tled for total

LaSalle St. Women's Club Announces
Meeting Schedules
r for 1947-1948
______

East

nomic nature.

Exchange

■.

Haile Mines

indi¬

economic
a

emergency

European economic

the

prac

all^ European countries.

political

did

modus

be found

The' Europeah

Newcomers in the

_____________

some

(

without

European Split Political

Commerce Department Reveals Foreign

again

situation and to prepare for
long-run economic reconstruction

Eu¬

staff totaling about 450
began
to deal with almost all

results,

between

Stassen Upholds Taft-Hartley
;Act____

the

Hovmg Corp.
Jack & Heintz

its

gency

16^

Donald B. Marsh Named Economist for
Royal Bank of
.

Aeronca Aircraft Com. & Pfd.

"Emergency Economic Committed
for Europe," which
finally with

order to bridge the present emer4

the

portation

end

form

less

Conference,

will have

J 10

of Insurance
(Funds, Reports Scudder, Stevens and Clark

STREET, NEW YORK

"European Coal Organization," a
"European Central Inland. Trans¬

d.o.n

constructive

"Marshall Plan"._______

Endowments; Exceed That

American

muddle

ing

should

o n

Conference

Finance Courses Offered by New York School for
Social
_i

and

Dr. F. Haussmann

But {

the L

that.

during

treaty.

Decades, Reports

i—^

any

sell

Telephone: WHitehali 4-6551'

German

is.

As a matter of
faqt,
beginning in this field

the

and

thinking is moving in

con-

g the
German peace

Housing Loans by Savings & Lc>an Associations Set New
V
High Mark in 1946, According to H. F. Cellarnis_____

Yield of College

different

direction.

Min- I

c e r n

the

ropean customs union

Foreign

—______________

Harry A. Bullis Urges Caution

—

The recent idea

cation

the

99 WALL

particular

-i

zones.

Big Four

Harold Bache Urges Pan* American
Cooperation

old stock

any

Europe by

unavoidable

<$>

don be-

isters

$6 Billion U. S. Private Funds Invested Abroad in
f Says Robert H. Patchin__

Research

o n

seemed

between

tween

Nati Association of Security Administrators to
Hold
(
Convention
a

} Walter W. McAllister—

part

Conference in

Home Building at Highest Rate in Two

eastern

coming
November

——_

;•

for

Germany

and

the

_____

rejection of the Marshall Plan
split of Europe and of

full success of

Standard in the Securities Business

High Prices the Result of Administration's Blunders
—Sen., Robert A. Taft__—1—
-—I—_________ 19
Human Values—Roger W. Babson

western

believe

Werle______-15

—Harry W.: Besse_________-—

phone

After the failure of the Moscow

—

the

many people
irrepa r able.
Only a few
optimists still

Do You Buy Municipal Bonds?—Warren F.
Sarle__i__

and

Molotov, the

into

Development of International Investment—Willard L>
Thorp 12
Foreign Issuers Cannot By-Pass SEC—Edmond M. Hanrahan 14
Floor Trading Procedure—Edward

—call

{

Competition,Price Policy and High-Level Stability
—Edward

purposes

non-governmental organizations, to distribute raw
materials, to organize transport, housing and electric
power, and
generally to reconstruct European economies.
Warns,- as did
Keynes, that Europe's rebuilding may well be
permanently ruined
;{by political shortcomings.

Without

Haussmanrr_________^____________„_

Hemisphere?—Hans

work with UN

ANY DOOR

of the Economic Commission
operating under UN, to solve German
problems,

J for Europe (ECE)

What Chance for Private Investment in the Western

Political economist describes

—

KNOCK ON

Professor of Economics, New
School for Social
Research, and
Special Correspondent of the "Chronicle" at
the Geneva
Conferences

Cover

Crisis—Elliott V. Bell___i._______.___

A United .States of Europe—Robert Lann——

AND COMPANY

By FREDERICK HAUSSMANN

—L. O. Cooper.

The

B. S.

Without the UN?

Stock

& Co

Members New York Curb Exchange

25 Broad

135 S. La Salle St., Chicago 3

Tel.: HAnover 2-4300

Exchange

••

WHitehali 4-6330

Teletype NY

1-2033

Street, New York 4

Albanv

Tel.: Andover 4690

Teletype—NY 1-5
Boston

Glens Falls!,

! Schenectady

•<

Worcester.

C. E.

■

Unterberg & Co.

Members N. Y. Security Dealers Ass'n

61 Broadway, New York 6, N. Y,

Telephone BOwling Green 9-3565
Teletype NY 1-1666

Competition, Price Policy and
High-level Stability

Investment in the

What Chance (or

<i.

Western
By HANS

By EDWARD S. MASON*

WIDENMANN*

Partner, Carl M.

Thursday, September 25, 1947

CHRONICLE

& FINANCIAL

THE COMMERCIAL

Professor of Economics, Harvard

Loeb, Rhoades & Co.

Dr. Mason

international capital investment will be resumed only when pressure groups and
i'< governments cease interfering with free judgment of market place. Holds Latin American countries
cannot get tbeir share of our capital, indispensable for their growth, unless they provide prerequisites in
form of liberal foreign exchange and trade policies.

indicates instability,
rather than resulting in price in¬
creases.
Points out price policy is dependent on market structure
of particular items/and relative steadiness of some prices is due to
small number of competing producers and adverse reaction to price
increases.
Holds agricultural prices are out of line, while re-<
adjustment of prices in other fields is sluggish. Sees another round •
of wage increases ahead because of trade union monopoly. »•

abide *

the

ing

com-:

bined

part¬

arrived
in the mar4"
as

ketplace.

the world are

judg¬

terested

It seems necessary, at the outset, to devote a certain amount
of attention to the meaning of high-level stability in the American
venture capital or brokerage de¬
freely accessible to
economy.
i take it for granted that stability does not mean
mand building up positions in the!
other countries;
rather, for the
employment if
most part such exchanges, as are hope of later liquidating in your o u tp u t
dependent on profits can more or
and
markets once they have been re-^
less
functioning today in any true
protect: themselves \ against
employment
opened. The connections betwee
sense of the word, are operating
this situation by successive rounds
in the expand¬
these markts here "and yours ar
within the more or less water¬
of wage and price increases. Nor
ing industries
tenuous at best and in most case;
is this process likely to degenerate
and .areas is
tight compartments of their own
nonexistent, as the presence o:
into a galloping sort of inflation,
economies.
Under the
circum¬
about suffi¬
the
discounts suggests.
Markets
stances it is not surprising that at
largely because there exists in
cient to absorb
in "internals" of other countries
the economy a very sizable group
the present time so few branch
resources
re¬
in which business is done at a
of people who are dependent on
offices are maintained by mem-;
leased by the
"discount" are common phenombers of the New York Stock Ex-!
relatively fixed income whose re¬
contracting
in New York these days; that they
sponse
will be to tighten their
change and the New York- Curb
industries and
reflect the effects of the mechan¬
belts and reduce their consump¬
Exchange in other countries of the
areas.
In this
ics of exchange controls and reg-r
tion.
It can be argued, further¬
Hemisphere. Canada is, of course,
sense
of
the
ulations
rather than measuring
more, that there are certain ad¬
in a class by itself due to our very
term
the
the degree of depreciation of the
vantages to be found in this in¬
close economic and financial ties;
American
other currency is well understood;
crease
in prices; it reduces the
in fact Canada and the United
economy, over
burden of the national debt and
States may suitably be considered
Dr. Edward S. Mason
the
last year
Free Markets Needed
the incomes going to an unpro¬
as one from the point of view of
or so, has pre¬
ductive rentier class in society.
the topic that we are discussing
Certainly history until World sented a remarkable example of
On the other hand a continuation
here today.
War II intervened, shows clearly
high-level stability. Employment
that we are vitally interested in has declined in certain industries of this process is likely to be ac¬
Controls Are Restricting
companied by a breakdown of
your
countries, judged by the geared to war production and,
some
pretty fundamental institu¬
At the same time many of us
more
substantial

war

ment of all in¬

ies,

for the freetpl^y of mar-j

manifests itself in many and devious .ways. Pressure groups ,j
governments constantly find new reasons for distrusting or being unwill¬
• r .
*
relatively few exchanges in the buying interest of American!

pervasive one and

demagogues or
by

desirable to provide some substitute

that it is

The notion

kets is

;

and increased wages are causing

declares

Mr. Widenmann

University

present rapid rise in prices

warns

For

sake of
power, politics
pr profits they
jthe

seek either to

by-pass

the-

market, or .in
effect to have

someone

their

group

cisions

Hans A. Widenmann

appointed

jtnake the de¬
rather

than let the free

Interplay of uncoerced buyers and
sellers be the arbiters.
This in¬
ternational conference therefore is
ja welcome opportunity for all of
us to consider the threats and the

problems which
reaffirm

our

confront us and

jstitutions which we represent and
jthe principles on which they were
founded.

amount of capi¬

very

enjoy close correspondent rela¬
tionships with firms in your vari¬
ous
financial centers,
some
of

faitli in the in-

whom I am glad

invested

tal

various

your

enterprises, not to mention the
direct investments of American

to note are rep¬ corporations

operating

your

recently, in

ber

limited num¬

of non-durable

tries,
leased

have

been

elsewhere

employment

into

absorbed

the

resented here among the dele¬ countries; it may be taken for
economy in remarkably effective
the out-? gates. Business, however, is ham¬
granted that this trend will be re¬ fashion. The economy while highly
set the prompt efforts made here pered
by the existence of the sumed provided only that you dynamic has succeeded in main¬
jright after thenar tp pick up the water-tight compartments — that give us the prerequisite ; in the taining a very high level of out¬
threads
td examine the pos¬ is to say,'the more or less general form of the restoration of free put and employment. The much
sibilities of enlarging the security foreign exchange restrictions im¬ markets and free exchanges. #In advertised recession, which was
business done between us.
Col-i posed on your nationals, prevent¬ this respect the members' of this just around the corner, has either
pnel John ..Haskell and Howland ing new acquisitions of dollars. Conference can be particularly come and gone or is still around
Davis, Vice-Presidents, of the New Actually, there is a considerable helpful and render constructive the corner.
York Stock Exchange, and Francis interest in the American market service; that these prerequisites
During this same period, how¬
Adams Truslow, the President of in Latin America, particularly in be furnished is also important for
ever, we have witnessed a drastic
jthe New York Curb Exchange, Argentina, Brazil, Chile, Cuba us, your counterparties on this increase in prices and the end is
(have been working on the prob¬ and Mexico. There is no question end, for we too have obstacles to not yet in sight. Since January,

glad to record at

lem and have visited you.
very

that

This

over-borrowing

American

existing positions.

and far between but

Clearly disproportionate consider¬

By the same token we are even

ing the volume of general business

less familiar With Latin American
internal securities than you are

jWe do with each other.
i

with

Now, of course, we are talking
a time when as a result of the

ours.

discounts

The various

internal securities
are
selling here insofar as there
is any market at all reflect the rel¬
•v
*An address before First Hem¬
ative pressures of thqse vfantjng
ispheric Stock Exchange Confer¬
to sell, which may include orders
ence, New York City, Sept. 18,
from Europe to get dollars, and
1947.
at

and

ences

-with thef over-lending
with

still

Hemisphere,
to

overcome

persuade

(Continued

which your

*An

obstacles to be

tential investor to go
on

the

po¬

any

address

Second

the

by Dr.

Mason

S.,

Washington,

D. C.,

Sept. 18, 1947.

26)

1947 Economic Insti¬

Chamber of Commerce

tute of the

beyond our

page

country is already far gone in the
process of disintegration and it is
going to take a long time to build
it

again.

All in all I do not

past year or so as high-level sta¬

cause

the

very

demand

Convertible Debenture

output

maintained. Furthermore
been told by the past

have

of writers on fiscal
policy just how we need} to go
about it to maintain effective de¬
mand. Unfortunately these same
generation

POWER (BALTIMORE)

CONS. GAS EL. LT. &

employment and

be maintained if effective de¬

CORPORATION

EASTERN

economy

large volume of effective
for its products.
It may
be taken for granted that a high

level

Bought—Sold—Quoted at Net Prices

American

whole has been confronted with

mand is
/.

believe, de¬

the fact that employment
and output have been high, that
we can describe conditions of the

spite

can

;

Rising Prices Indicate Instability

us;

the

going to get worse.
system
of the

educational

The

and

the twenties
while the in¬
vestor's losses in this field were
not
confined
to
the
Western
are

the situation is

has risen

that the effects of
our/unhappy experi-t

your

particular

and State services

already in a bad state from
the loss of effective personnel and
are

prices
bility. Stability is not compatible
by more than 40%, and to my mind with a 25-30% per
the cost of living by more than
annum
increase
in
wholesale
20%, This, represents a serious de¬
priceg.
',vrb
gree of inflation by comparison
Employment and output have
with any period of similar length
been high despite a very substan¬
in the past history of the United
tial shift in demand among the
States. Organized labor and those
products of various industries be¬
1946 the level of wholesale

is no blink¬

fact

the

ing

common

our

aim to fruition; there

forth,

the interrelations in securities are

bring

overcome

that actual business in
securities
is
largely
confined to switching in already

pices of the Inter-American Coun¬
cil, is testimony to the desire to
push Torw.ard, which is a good
pmem Yet if we are truthful with;
jourselves, we will concede that
not only few

much

would

business

greater, were it not for those for¬
eign
exchange
controls which
pretty effectively prevent the flow
of money and Securities back .arid

meeting, held under the aus¬

tions and services in this country.

goods indus¬
Municipal services
but the workers there re¬ but also Federal

writers

2'/zS of 1962

have ; not riold

how,

while

piaintaining that demand
necessary to the full employment
also maintain
stability of wage rates and

of resources, we can

LAMSON & SESSIONS

Central National

Corporation

ESTABLISHED 1927
A

leading manufacturer of bolts

and nuts since 1866.

Supplies automotive, railroad equipment and

22 East 40th

Will

share for

per

first six months of

1947.

Graham-Paige Motors Corporation
4% Convertible

Stock
per

*■

N. Y.

probably double that for full 12 months, indicating

possibilities for increased dividend by end of year.
-

is: selling

f or about: balf its book value

of $23

SPECIAL BULLETIN AVAILABLE

•

ized labor. As

Products & Chemical

Tennessee

...

120

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Phone:

At
Established

1926

Xele.
\

tll

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jtl

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Direct. wires to

tiilkk

York Security Dealers Association

PHILADELPHIA & LOS ANGELES

Vr ?

i»« *•

INCORPORATED

L MemBerS Netv York

Security Dealers

•A.-".'

Members

Seligman, Liibetkin &> Co.

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NY, 1-1286-7-8

41 Broad Street

;

the

economj^

for the maintenance of
employment we can be nearly
certain that, in the absence of
price and wage controls, we shall
have inflation. On the 6ther hapd
if effective ^demand is not maiWf
tained we can be equally certain
that high-level stability of em¬
ployment and output will not be
necessary

long

confronted by the volume $
demand that is deemed

effective

Analyses on request
'

they have usually shrugged it/off
with more or less serious admoni¬
tions to business and to labor to
exercise discretion and good judg¬
ment.
It is by now clear/ 'as ijt
should have been clear earlie.^

price and wage levels are not
going, to.be stabilized by the selftrestraint of business or of organs

Osgood Company "B"
-

that

Debentures due 1956

Fashion Park,.Inc.

share.

prices.

They have, it is true, recognized
the existence of a problem but

Teletype: NY 1-2948

Telephone: LExington 2-7300

implement industries, etc.

Earned, $2,42

Street, New York 16,

agricultural

some

Association '

New York 4,

ICY.

full

(Continued on page 34)

Volume 166

Number 4632

THE

COMMERCIAL

FINANCIAL

CHRONICLE

(1205)

5
r.

Steel

: The

■

Changesin Mun.Div.

Production

Electric Output

Of Northern Trust Co.

Carloadings

State of Trade
and

1 I

Retail Trade

CHICAGO, ILL.—The Northern

Commodity Price Index
Food Price Index
Auto Production

Business Failures

Industry

By A. WILFRED MAY
FROM HITLER TO VISHINSKY TO WALLACE

Trust

Pollyannish commentary on the Vishinsky anti-US
onslaughts at the beginning of this UN session reflects the unrealistic
moderate

week with
ment

increase

occurred

air of general

tranquillity. * As in past weeks

some

far from using them as a
stimulus on our people, has
belittled them as being merely Moscow's latest
gesture for home consumption to buoy up the
spirits of her malingering Soviet slaves, while
others have interpreted the motive as attempting

raw

that showed improvement
last week
that of steel operations which
advanced 5.4 points; or 6
0% above
the
preceding week with estimated (production due for a
further rise
the current week. The
automotive industry,
notwithstanding a short¬
age of steel, managed to attain a new
postwar production record of
110,088 units as compared with a revised
figure of 106,095 in the pre¬
ceding week. Carloadings of revenue
freight and electric kilowatt
output too, kept ,pace with other industries and
forged ahead to estab¬
lish fresh gains.
V
...
'
••
?
•
'
In
the
chemical
was

to influence
'"

industry industrial manufactures increased
with production of
paints, varnishes and insulating materials
high, level. Output of pharmaceutical
products also showed
slight rise.

A. Wilfred

very

Americans, not

30%.
Lumber production
too, declined almost 2% to
161,388,000 from 164,281,000 board

duction.

fractionally

exceeded

shall

also

sians

The

pro¬

buck

Rus¬

was

skilled labor.

production

rose

Worsted mills operated at

slightly..

pull Europeans into line.

German-Russian

of food

were

canned

high level

and

shoe

nition

with

sardine

1946.

and cheese

were

Substantial quantities
output holding well above that

Reversing the rise which began in
December, 1946, business
failures fell slightly in
August to 287. However, it was
the high¬
est for any
August since 1942 and three
times as high as in August
a year
ago.
The failure
index, compiled by Dun &
Bradstreet,
Inc., dipped slightly in
August, with 15.2 businesses
;
failing per
10,000 concerns, compared with
only 5.2 in August of 1946.
■
Liabilities turned sharply
downward with losses less than
half those in
July. Aggregating
$14,903,000, liabilities were, the
lowest since
February, 1947; in comparison with
previous
;
Augusts, losses were heavier than in
any year since 1938. A
drop
In the number of
large failures with liabilities of
$100,000 or
.more
was
chiefly responsible for the
sharp July-to-August
decrease.

•

The

rise

grain markets

commodity prices induced by unsettlement in
the

was

extent

some

averted

last

week

with

Dun &
Bradstreet's wholesale food price index
recording a gain of 10 cents
as contrasted with a
31-cent rise in the week
preceding. Dun's daily
wholesale commodity
price1'index following erratic

fluctuations 'in
foods and grains climbed
to a new postwar
high of 286,28 on SeptMS,
and closed the next
day at 287.05. This compares with
283.53 recorded
a week
earlier, and with 224,35 a year
ago.
"
- ,
"
Grain prices, which had
slumped for four days after
hitting rec¬
ord highs last
week, curved

upward,again

were

So grave has the food
price situation grown that
housewives
increasingly vocal about high prices and a

have become
•

movehas already gotten under
way by various consumer
groups
being applied on the
President for the return of

ment

.with pressure

price control.

•

STEEL OUTPUT SCHEDULED TO
RISE 5.3% ABOVE
WEEK AGO
It will
be

many

month before

the

size

of consumers' inven¬
steel ingot output in the
country
"Iron Age"
survey indicates stocks
below normal in all cases
studied. Even
among other steel
products, below normal inventories were
more
prevalent than in those considered to
be "about
right" when meas
pred against current demand.
;
V
-/
;Estimates made last fall and
early this year that steel
r would catch
supply
up with demand have
fizzled out completely. At the
very time slated by those who
predicted that steel
supplies Would ■*

tories become

factor in

lowering

JEfrom Maine to the West Coast
of flat-rolled material
are far

compari¬

5L !

V
V

page

demonstrate

Abitibi Power & Paper
Brown

counter¬

some

| "If there is
certain,

1
^

Minnesota & Ontario Paper

had

1930s, ^nevertheless
now are
persistently denying the
possibility of War resulting from
the totalitarian imperialism when
practiced by Moscow.
We shall not dwell here

difference

totalitarian

techniques that Vishinsky dupli*
the'Fuehrer

cates

physical

and

vocal

Thus

atic's

torch

dent

BONDS

Sport-

WITH

Coupons Missing
were

respon¬

between 'the

and

Germany

—;

Gude, Winmill

war¬

outlook

Roosevelt

from

the

R$oseyelt

^politics
he

made

see

money.

while

years

World

able

and

tion he went

arise

First

was

lived

from

ACTIVE MARKETS
,

^Di-Noc Co.

War

it
that;
During infla¬

hospitals.

wished

in,, Europe

Virginia Dare Stores

there

For

might

conflict

SIEGEL & GO.

American industry." —
From the Reichsfuehrer's speech
the

Reichstag,

declared

external

pleadings (Mr,
Vishinsky's having been so well

war

39 Broadway, N. Y.

this

Germany
S., Dec.

the U.

week

agreements.

And

Mr.

Stalin,

just as did Herr Hitler,
masochistically takes refuge in
complaining about the threat of
"encirclement."But

shall confine

these

re¬

then

DANISH and SWEDISH
Blocked

termed it

"a social

war

BOUGHT

be¬

with

tween nations, in which the havenots

fighting the haves." •
And similarly,in the UN's placid
Long Island setting we he&r from
Mr. Vishinsky that:
are

war

the

been assumed

the
citizens
of
their
nations. In this sphere

active

most

„

part

had

by the represen-

(Continued

on page

Balances
AND

quoted for

qny

foreign exchange, free
'

SOLD

approval of local controls.

Markets

•

■

kind of
blocked.

F. BLEIBTREU &

"In this propaganda of a new

flections to paralleling the efforts
which
seem
directed
toward

dividing
"enemy"

1-1942

11, 1941.

national

DIgby 4-2370

Teletype NY

;;
/ t
^ In
his
kportpalasi speech of
by Mr.
Jan. 30, 1940, Der Fuehrer first
McNeil).
There is the lie-repeti¬
tion technique, and
charging the accused the capitalist commercial
victim with the aggressor's
crimes, interests of the democracies of
such as failure to observe inter¬ having stirred up the war, and
demonstrated

earning money

engage

Soya Corp.

Into

which by taking sides he might

For

Teletype NY 1-955

has had

poor

During
j

a Co.
Exchange;

St., New York 5, N. Y.

DIgby 4-7060

family and have
always had to work for myself.
a

York Stoek

myself.

comes

and

ifew

Members

1 Wall

Presi¬

and

course

understand

world-wide gulf

the

well

can

wealthy family

example the gross inconsistencies
their

;

Toronto

BIDS MADE

From

—

the

enmity

Roosevelt of

But; basically, the- diplomatic
arguments of the present Russian
and" past German
propagandists

lot

all the advantages Of upbringing
in that circle. I, myself came

Techniques

embody various similarities.

war."

only

States

between

round-the-clock.

Similar Totalitarian

that there is

the

Russian "prosecutors" manifest a
sophisticated tongue-in-cheek at
titude at social events:. Hitter* on
the other hand, carried his fan¬

the

their

cast

men

for

monger.

conviction.

jopponents.

Delano; Roosevelt,

lawyer's attitude of putting on a
death^-grapple show in the open
court of meetings, but of imme¬
diately
thereafter- fraternizing
.his.

1-395

Montreal

Churchill

one

war-mongers

speech

United

Vishinsky, like Gromyko, has the

with

HAnover 2-99M
t

New York

•1 Woodrow Wilson.fand .Franklin

and

St., N. Y. 5

Bell Teletype NY

capitalists of today

side

"Two
sible

stridency. • Or, on the other hand
the
difference
in
fundamental
personal -attitude

52 WILLIAM

palast, Berlin, Jan. 30, 1942.

inMremendous

energy

BART SMITH & CO.

AND

detailed facets of similarity

and

the

Hitler's

the

many

then

that

was

greatest

and that the

behavior

1914

world's

War

thing that is

one

that

before

the

CO., Inc.

79 Wall St., New York 5, N. Y

Telephone HAnover 2-8681-2

40)

Cables:

Solofret,

New

York

36)

Ohio Match

6s, 1950

Universal Match

Portland General Electric Com.

American Maize Products Co.

•

LAMBORN & CO.,Inc.;
99

T-;

-v.

Company

Great Lakes Paper Co. Ltd.

Portland Electric Power

'3-1!

WALL

STREET

NEW YORK 5, N. Y.

When Distributed
Bought——Sold——Quoted

;
I 'w /V
'•

50 BROAD
ST.,

Tel. HAnover

2-3970

NEW Y ORK 4 N.Y.

Teletype NY

■

1-1582

political

'dl
11

imminence

result of the Hitler

•

(Continued

the

through

Monday,

last, in Chicago
followed by a rise in cotton
prices, the New York "Times"
reports. Wheat, after
dropping 38 cents a bushel last
week, regained
9 cents on
Monday on the strength of circulated
reports that the Com
modity Credit Corporation was
buying cash wheat for export. Corn
prices too, rose 1 to 47/s cents as
the first frost hit the
Midwest Corn
Belt.
and

negligible,

17%.

F. Kehoe of the New York

office is returning to
Chicago,

"have" scapegoat.

experienced
political
observers
who, despite their earlier recog¬

types of materials

Changes in the production of butter
though meat production increased almost
of

some

John

complaint levelled by the selfstyled
"have-not"
against
the

is also of interest because oi
the surprisingly large number oi

noted in the manufacture of
cloth¬

ing despite continuing
difficulty in obtaining
and

Chicago to the office of the Bank's
Representative in New York, ahd

son

Some slight improvement

engineering construction for the week declined
38%
to $90,627,000 from
$146,299,000. Private construction was 44% below
the previous week's
level, while public construction declined
lumber shipments

lamentably tended
to divide us, as a
possible clue to the real effect—if not intention—
of " the
Moscow-Vishinsky • line.^-i
——rr——
1
7
The latter's motive, as has been the foremost common thesis is the
Mr.
Wallace's, may thereby be charge that war-mongering ii
judged as an attempt to divide conducted by the money interests

supplies and equipment continued
high.

May

parts in Mr. Wallace's utterances, which have

machinery held steady at a high level
backlogs continuing at a substantial level. The
production
of farm
machinery, however, remained inadequate to fill the
heavy
demand but
output of oil well

feet

George

wavering European nations.

This columnist claims neither to be

The production of
textile
with order

Total civil

Department:

Bielby is being transferred from

extremely interesting but helpful toward deduc¬
ing'the significance .and intent'of Moscow's cur¬
'propaganda ;;Iine, to compare it with the
prewar blasts of Mr. Hitler, the earlier proper
evaluation of which might have spared us the
subsequent tragedy.,

slightly
a

press,

Bond

rent

following changes

Municipal Division of the

strategist, a diplomatic psychologist, nor a propa¬
ganda expert. But he does believe it is not only

our

"war-mongering"

Among the major industries

some

order

remained a problem that will not
apparently be solved for
time to come."

some
1.

thinking that persists regarding the real
significance of Soviet intentions and policy. Thus

manufacturing activity last
reflecting peak levels and labor-manage¬

employment rolls

relations

wishful

backlogs continued large and the
difficulty of obtaining
materials

the

in the

Current

Co., 50 South La Salle St.,

announces

FREDERIC H, HATCH & CO., INC.
j.{v.
Established 1888
x

SUGAR

Raw—Refined—Liquid

••

|
*

-MEMBERS N. Y. SECURITY DEALEBS. ASSOCIATION
r

63 Wall

Street; New York 5, N. .Y. ,}

Bell Teletype NY 1-897

•f Exports—Imports—Futures

DIgby 4-2727

toimey

State of
"Fraud—State ,Adr

General of the

'Nejw York,

What Can Business Do

ministrators' Views"; by James F.
Mferkel, Chief of the" Securities
Division of Ohio on "Registration

To Hear al Convention

Association of Se¬ —State Administrators' Views."
The program on October 2 will
Administrators will hold
jits annual convention in Jackson¬
ipclude addresses by a representa¬
ville, Fla., from Sept. 29 to Oct. 4. tive of the National Association of
programJ for Oct." 1
addresses by Com¬
missioner Richard R. Mclntyre of

Securities Dealers; by F. C.

Tracing effects of excessive wage

include

York

BALTIMORE

Chasers, Inc.
\ ' v-;
Davis Coal & Coke

Emerson

1 -■

STON BROS. &

BOYCE

ifembers New York & Baltimore Stock
Exchanges and other leading exchanges
S.

CALVERT ST.,

New

these

jta

York

Bell Teletype BA 393
York Telephone REctor 2-3327

and

structure
b

either
wages

Ralph E. Flanders

resulting

American Box Board

Botany Mills

Dracbett

Empire Steel Co.

Harshaw Chemical

Empire Southern Gas

Richardson

Sterling Motor Truck
Nazareth Cement
Warner Company

1
i..

■

Hell; RickarJs & Co.
Union Cent. Bldg.

Union Com* Bldg.

I
j

CINCINNATI

CLEVELAND

Tele. CV 174

jTeieCIlSO

H. M.

Byilesby & Company

PHILADELPHIA

OFFICE

Teletype.'
PH 73

decline? in demand results
a fall in prices.- This
is

This
first

Chamber. of

Institute

Washington,

Commerce,

VIRGINIA-WEST VIRGINIA

D.> C./

Sept. 18, 1947.
Consider H. Willett

Varnish

Reliance

Incorporated

f 1st Floor, Kentucky Home Life Bldg.
f
LOUISVILLE 2, KENTUCKY

Francis I. dnPcni & Co.

Long Distance 238-9

(Special to The Financial Chronicle)

CHICAGD, ILL.—Lucius A. An¬

CRAIGIE&CO.
RICHMOND, VIRGINIA •
Bell System Teletype:

Bell Tele. LS 186

with

Andrew

was

own

INVESTMENT SECURITIES
STREET

509 OLIVE

ScotL Horner &
Mason, Inc.
U
Lynchburg, Va.
J Tele. LY 83
LD 11

formerly with Bache
in

business

investment

.St. Louis l,Moe
rt

Members St. Louis Stock

Exchange

Earnings

1946

SPOKANE. WASH.

Southern Production Company

NORTHWEST MINING

per

1947

SECURITIES

Beryllium Corporation

For Immediate Execution of Orders

per

.$2.50

—

Member

experi¬
look for¬

record

tions were

Like¬

in different occupa^
out of line with each

readjustment..
shows, only in real
depressions can that be done by •
needed

and

other

As experience

This

depression.
farsighted one.
experience.

price and wage

degree of

as a stabilizer of
unemployment and of

losses for high

Wemainten-

cost producers.

was

adjustments. The;
factor in sight,

intractable

only

peri¬

usefulness

odic
a

It assumes the

promise of making an
undertaking of the needed

gave

easy

is a prudent and
It is based on past

This judgment

of full, or nearly full, em¬
social objective.
do not "wish to condemn to

ployment 'as our

are

production—and it is—^how
we to prevent a seller's mar-

rates,

'continuing at
dividend
liberalized.

December

payment

the

cost

of food,

and with-

harvests this was expected
level off, if not decrease. The

good
to

whole
In

outlook

the

was

hopeful.

early summer two

changed this

asters

Time:

Sp-82

may

Detailed

analysis

interested' dealers

STANDARD SECURITIES

New York Curb Exchange

CORPORATION

;

moderate cost

(Continued on page *25)

New

Analysis of

COMMON STOCK
contained in the
our "Business
and
is

available for
on

copy

September issue of
Financial Digest.

will be sent xmr

request.

Members Standard Stock Exchange

sufficient supply at

Nekoosa-Edwards Paper Co.

Approx. Price—$16 per share

Std.

Pac.

and

wages

.30

With -current'earnings

1420 Walnut Street, Philadelphia 2

wise

They hope that the any other means' than by leveling *
Profits of the great
will come soon. If it upward.
•does not, and inflation continues majority
of the business firms
unchecked, they fear that the re¬ who publish their reports were*
cession may deepen into a serious unusually large for peace time.

other hours.

BUCKLEY BROTHERS
York, Philadelphia

line with each other

3.00

A.M.,

Data on Request

Also

not in

and heeded readjustment.

Semi-annual Dividend

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

New

were

ing inflation.

and

Paid per Share.

The Gruen Watch Company

Los^ Angeles Stock Exchanges

flattened

there was expectation of
It was true that pribes

Months Earnings

1947 First 6

Members

such

en^

declibe.

Company

Common Stock

PHILADELPHIA

■■■

We were

living curve had

cost of
out and

more'balanced price

Many of them

of sorts.

answer

structure than "we are now
-

months will bring

joying a respite from the advanc¬
ing spiral during the late Winter
and .Spring.
Wages and prices
were; in an
uneasy balance.
Thb

the matter

have, however, set the

H. O. Peet & Co. Adds

iRIIIttllllllttlttlttllttlltmittlHUllHh

progressive inflation?"

The next few

Dan River Mills

out

have '
with¬

dis¬
hopeful pic¬
ture.
The first was the heavy
jWe
(Special to The Financial Chronicle)
unemployment
for any
great rains -and resulting floods which.
KANSAS "CITY, MO.-Charles
length of time any large number prevented planting corn and other*'
R. Pruitt has been added to the
of those able and willing to work. grain crops at the proper season.;
staff of H. O. Peet & Co., 23 West We would
not wish to permit This was particularly unfortunate .
so
far as the feed grains were
Tenth Street, members of the New imore than the 2,000,000 or 2,500,-;
They enter into the'
000 of frictional unemployment, concerned.
York Stock Exchange.
jcompqsed of those in seasonal oc¬ cost of almost every food except
cupations, or on the way from fish, fruit and vegetables. Their
jone job to another or voluntarily abundance or scarcity is a deter-'
bstaining * from' employmeftt for - mining factor in the price pf
The Long- Bell
time.; If, our object is a main- meat, milk, butter, cheese, potij-;
ained high level of employment try and eggs. There might still be
Lumber

Stix & Co.

Bassett Furniture Ind.

continued high employment

jance

American Furniture Co.

Mr.

Chicago.

Trading Markets

Co.,

in the past conducted

and

Co.

his

ST. LOUIS

Trade

Building.

duPont

Francis

Board

RH 83 & 84

Jr., has become associated

drew,

Telephone 3-9137

LYNCHBURG

clearly poses'' to us

her fateful riddle: "Can we

recession

F. W.——-

Sphinx now

recession as a
healthful alternative to continu¬

Lucius A. Andrew With

MUNICIPAL BONDS

lm BANKERS BOND sE

reach

ward

CAROLINA

Co.

encing.

NORTH and SOUTH

Murphy Chair Company

put

far longer time than most econ¬

Sen. Flanders just that way. They say that- a
moderate recession will enable us
before the Second 1947 Economic

Dealers in

American Turf Ass'n

not

levels for

omists and statisticians - thought
possible.
We have maintained
them until the attending dangers
became,
visible.
The
fabled

address

*An

American Air Filter

business

Some

analysts

VA.

RICHMOND,

LOUISVILLE

maintained these

have

peacetime history.

in-

ment

i|| '
prophets and

That market
have had the

highest level of employment and
the
lowest level- of
unemploy¬

Rates

„

Stock Exchange Bldg. Phiia. 2
Telephone
Rlttenhouse'6-3717

Effect of Excessive Wage

Pittsburgh Rys. Co.

There is a sel¬

ler's market in labor.

exists because

I A
natural balancing of the
structure
from wage-cost-price-profit
assumes that when wages get too
greater demand or higher profits
high- for -/marginal-producers" to
can lead to a rise in wages.vlri the
make a profit, and when in fact
other case, increased wages can
losses begin to appear, then by
necessitate a rise in costs and in
reduced
operations to; meet the
turn a rise in prices.
As long as
lessened
demand - atc necessary the pressure of demand remains,
this
spiral,
regardless of the prices, or by more drastic shut¬
downs and business failures, the
cause, continues upward.
lpnarket for labor falls off and
When profits and prices have
further " general wage* increases
gone up in the so-called "com¬
become obviously impossible to
petitive" price areas faster than
fhe employee groups, who would
wages, a point is reached where
(ptherwise be demanding them. To
there is an unwillingness or an
put it briefly and baldly, increas¬
inability to ibuy, either.^ on the
ing .unemployment afrests the in¬
part of consumers or. business- flation
spiral.

prices.- In¬
prices

creased

administered prices.

CLEVELAND

hypothetical; ques¬

will be' ply and directly.

concerned with the broad area

viously with Shields & Co.

can

that reasort; my remarks

can

Exchanges. Mr. Sullivan was pre¬

This is not a

price area,-busi-. tion. It is the question which our
do something.
For present condition puts to us, sim¬

initiated

so-called

the

crease?

in allaying the

"administered"

profit

But

nessmen

cost

price

do little

can

situation.

spiral : iii

wage

Chicago Stock

|>rice area, individual; business¬

men

direct,

thought.

your

209 South

would

first

Street, members of the

Salle

problems

that

affiliated

become

with Cruttenden & Co.,

cur-

rently menac-

ILL.—Richard" A.

CHICAGO,
$ullivan has

ejmployment increases. This dan- ' productivity/ resulting in the con¬
tinued
operation; of the wageger threatens today as farm prices
Soar.
Important as is the boom- cost-price-cost- of living spiral or
bust potential in the competitive bringing uncontrolled" price in¬
creases whether or not wages in¬

latter

is to the

(Special to The Financial Chronicle)

New

)

BALTIMORE 2

,
"

inflation?"

With Cruttenden & Co.
!

without,
It

ment

—
;———
—
———
—
: . :
ket in labor
from bringing an
by a decline in general
uncontrolled expansion in wage
demand, particularly in heavy in¬
demands in excess of increases in
dustry. Production is cut and un—

followed

employ¬

ing
!

Russia?" and "How

♦

have

can

full

Drug Company
A & B

these: "How can we get along with

problems this country faces are

pf the Florida Securities Commis¬
sion; and Hon.4 Edgar A. Brown,
State Senator of South Carolina.

■

"that the two major

to appear during
of the Convention will

Clarence M. Gay, Chairman

Hon.

Sumner Slichter dropped the casual" remark

Economic Development,

J be Hon. J: Tom Watson, Attorney'
General of the State of Florida;

Terminal

Bay way

course

of wage

Committee for

Research. Committee of the

two ago, at a meeting of the

A year or

Stock Exchange.

Other speakers

the

demands of certain labor groups; (2) reintroduction
controls; and (3) restraint, in public interest, in collective bargaining agreements.

and price

son,

New York

unless com¬

depression caused by excessive wage

Han¬
representative of the Invest¬
ment Bankers Association; and by
Emil Sehram, President of the;

Exchange Com¬
mission on "The Federal View";
toy Nathaniel L. Goldstein, AtIfop Securities and

and price rises, Sen. Flanders points out high wages,

pensated by high prices, increase unemployment and thus check the inflationary spiral in competitive
areas of business.
Lays blame of irecent price and wage rises' to easy victory of John L. Lewis, and
contends full employment under high wages ends in inflation. Looks for three possible courses: (1)

Trus-

low, President of the New
Curb Exchange; by Murray

•Speaking

U. S. Senator from Vermont

"'-7

IThe National

RALPH E. FLANDERS*

By HON.

curity

neiU

Thursday,-September 25, 1947

CHRONICLE

COMMERCIAL & FINANCIAL

THE

(1206)

...

New York

of Spokane

Los

Angeles
Pittsburgh, Pa.
Hagerstown, Md.
\ N. Y. Telephone—WHitehall 3-7253

Brokers

Dealers

Underwriters

Peyton Building, Spokane

Private Wire System between

Branches at

Philadelphia, New York and Dos Angeles

Kellogg, Idaho and Yakima, Wn.

COMSTOCK & CO.
CHICAGO
231 So. La Salle St.

Dearborn 1501

Members^Chicago Stock
225

EAST

MASON ST.

PHONES—Daly 5392

Chicago: State

0933

Exchange

MILWAUKEE (2)
,
Teletype MI 488

„

Teletype

CG 955

ma'

■■■■

Volume

166 ' Number 4632

THE

COMMERCIAL

& FINANCIAL

CHRONICLE

(1207)

on
British, Swedish and French economists

express views of future statu! of*our economic system.
Prof* ^
Findlay Shirras praises Alexander Hamilton's system but" says?; "oldvdivine right'of capitalism is
gone." IL F; Lundberg, Swedish economist, foresees more state Control and planning, while Prof*
Alfred Sauvy pictures future capitalism geared to a
high rateof^"taxatidhr an^teiist^iiidirgo^^profd«nr#5
modifications.
V. K. R. V; Rao of India holds ca pitalism is doomed.Ruetf - confident; of; France's '
future/ Winkler cites foreigners' unrealized assets.'

Ahead
By CARLISLE'BARGERON*
It

about time to piece together'the-most ^recent episodes
exercising her leadership, in world affairs.; They have
breath-takingr They have' been hilarious/ J It is doubtful^ in
fact, if-in all time such a comedy has been wrought by-the mind'

seems

of America's

been

of
'

man;

If,

•

are

.■>

•

the scientists intimate

as
-

the

end

of1

the'-

w o r

least'

cause*

in{

this country,
should be-able
to. exit laugh¬

ing.
^ You've
to
s

got
back

go-

America
be

had'

her

"rightful
place in-worldaffairs"'

that !

gigantic
•the

Carlisle Bargeron

supported

future

No other natiomin

bate

wars-

Harbor

had

days,

shrank

whether." the

shrunk,-4

as> we-

substantial

in the

•

out'and

went

ft.;

such de¬
pre-Pearl

any

■

...

be the same in western

down

through-

decades will not

some •

elements

the

Europe

Europe generally, -as it is. in a
free economy
as
in the

hot follow

countries; In Sweden we consider
free international' trade as one of
the main conditions for

making

} Now, having shrunk it, it was
plain to-both man and beast that
-

ize

the

leader

our

country;

immense

their

work

last1 two7

mentioned
in

influences,

might have to import;

"The
As

depressive

are

danger

•

spots?

closely correlated

most'countries there is Awl

Sweden the trend—accelerated b/
substitute
central

the' war—to1

;

planning and decisions for deceit-4
tralized entrepreneurial initiative* ;i
The longer the present scarcity j
situation lasts—with its most'

parent
symptom - in the dollar '
crisis—the deeper will our plan- !
ning and control measures become
fixed into our institutional set-up.
This will give less room for a dy- *
namic'
free - enterprise
system* j
Dangers arise- that short-sightocl .*
aims dictated: by political consitl-

■i

uses.:.

rehabilitation- had

; i "There/ have been4; too f many
.hegin at,home. -Naturally' we
'ISMS;? and this has produced con*
shrunken thing. 7 How should Vwe would, help air we could.
flicting creeds. The surge of-anti*
go about leading? Why, give the
The next day, so help me good¬
communist .f eeling As. spreading... in
other countries, money, of course.
ness,
the bright young men had western
Europe as it is in this
to
the
i. We are doing this right gra¬ sold' this
press
of the
country.7 And Alexander Hamil¬
ciously,- one would think; but ap¬ country as the Marshall Plan. It ton; would«' have
realized,: as he
parently not fast enough. :
was,
we
were
told, an '.'imple¬ did when he put forward his view*
; ' Of *a sudden, Mr; Truman comes mentation" of the Tfuman Doc¬
for / protection) as4 benefiting.: the
^>ack to Washington from an*ex* trine. Manifestly,' you just can't country as a whole and not

had

free competitive system work ef¬

fectively inside

effectively
that

■'

——

dogmas; but real¬
"There is some likelihood of a
potentialities of
serious * after-the+war depression
free enterprise, management and
erations will be satisfied at ' that >
in the United States.
were hearing that Brit¬
Personally,
techniques,- but • there: is4 a: neces¬
ain
would need a few
I think that the risk is not great cost of longer perspectives as,
billions
sity for watching red and grefen
more, Italy would probably- have
considering the preparedness of instance/the necessary increase ii\ |
lights by planning/as in this cpunThis lon.lthe government to intervene and productive capacity.
to have some money, France had
try where the President's eco¬
run point of view is in fact fairly 1
a. more stable and careful attitude
got1 a hunk from the World Bank. nomic: ad visors are
at work; and
well taken care of-by the instittSL* *
I
on the part of business than ever
was
re-reading
Marshall's a
rigidity, in regard to capitalism
before.
And in Sweden where tion of private property.
speech today, ,.It was one of those cannot* therefore^ be
accepted. ?
we
have had no experience of
-"The present tendencies &i
against
sin
and
in - favor? of
i "Under thes conditions ' of ex¬
motherhood
speeches. - We were
treme^- scarcity; you must ( guide home-made depressions/we think Sweden in the direction of too^
certainly interested' in Europe's
we have the means of
your resources, as in Germany to¬
(Continued on page 40)
combatting*
welfare, he said, but he thought day; into the-best
a

had

University
Eng., an' expert

playing the

speech.
recall, we

proved or even
promised she could get to us, but
we' proved we
could get to her
Iri order to prevent any debate in
world

believe,

several weeks ago, and make
At the time, you may

was,

had

war.

world

a
Capitalist World?" was discussed by a. group of • well-knovm ;
America, Europe and Asia, before the Associate Members of the Near
School for Social Research in / New York
City on Sept. 22: Prof; G. Findlay Shirras,

economists from

months', Secretary Marshall hhd^to
United States. Th other words,
go up to Harvard,1 I believe %
must

mean

most

our*

Coming

for

sometime;

have*, been

back of them.'

taking

e n

■

"What Chance for1

»,

College,• Exeter, <$—
———
■
>
public finance, although these dangers are gener¬
who is in this country investigat¬ ally* more
apparent in Sweden
sucker for a long time, i We are
ing the; Alexander Hamilton pa* than in the* United ' States, the
going to authorize this handout
pers, praised the
principles es¬ means of avoiding them are
but that's that....
tablished^ in
this
country
by clearer.
; The,
Congress
didn't' reckon,
however,. with the bright young Hamilton;' and stated that "capi¬
; "Thb fif-st type of danger is the
talism is an instrument promoting
minds, who still infest our govern¬
more imminent.
A third world
public ,welfare." But, he added.'
war
mental bureaus, and
would: probably put an end
particularly
"The * old divine- right of capi¬
to western civilization in Europe?
the *•' State Department.
The y
talism1 has
gone/
The
entre¬ But even a
didn't reckon with' the' ability of
lasting war menace
preneur is adjusting; for * society
would successively diminish the
these
brilliants to play on the
and is doing -a great job, but capi¬
changes of capitalism 1 in many
pOcketbook nerve and bring some
talism for

ap¬

proaching

would like to make

of/ the

We-take-pleasure-in announcing that

cursion, prepared-to head off for
another one' in the^ Caribbean^ He

have-

is told by; subordinates,

This

you can

tion j
in

of 'whom

bet he lost his apprecia¬

that

crisis

Greece.

Whether; the

had

developed

visit' of; our-erst¬

while OPA chief, Paul Porter,. to
a i

country,

scribed
bate.

It is

be properly; de¬
crisis is open to de¬

can
a

certainly

commotion

in V New;
Deal
semantics,
"crisis" is -probably about- as good

and

word

!In

'any;

•

his' annoyance; Mr.

said, ohv hell-

send up

Truman

a4 message

th: Congress-asking for -$350 mil¬
lion.

To his amazement,

he woke

up the next * day to find

out* that

what he

had

done

was

the Tru¬

man
Doctrine,
similar
to
the
Monroe Doctrine and that he had

grown

immeasurably- in

stature
overnight to join the nation's im¬
mortals;
eyes

Naturally, he rubbed his
said

and

thing it is for

what
a

man

an»amazing
who only a

relative few years ago was a ward

politician, to now be in the com¬
pany
of'1 Washington,
Lincoln,
Churchill and Roosevelt,

handout into
of

world

$350 million

tremehdous

statesmanship,

piece
were, of

course, the bright young men with;
whom Roosevelt loaded
up ;the

government.
been

The top level- has
purged of the Leftists - who

kppt waking us-up in the middle
of, the night to spring some radi¬
cal

change, but the lower levels

are

still infested5 with

them, and
when you know what they are do¬
ing you have a pretty fair ap¬
praisal of the" world's -; troubled
stater today,It will always be
po as long, as they are around.

J-

The purpose- of their, craftsman¬

ship in blowing
handout to

this ordinary

great chapter of his¬

tory/was to get; as-1 wrote, at the
time, an entering wedgeTor what
now is coming.
Congress said, in
effect, oh no, there isn't any¬
thing momentous about this hand¬
out.

radical1 change* from

.traditional

course

the

the world.

it1

ordinary* progress
A-doctrine without

This is what makes it

action."

fascinating,.- We. have been able
to see, play by,play,.the erection

First,;a Doctrine,
"implementation," and
springing into -action."

;of a.structure,

Isecond,,

then,

a
Citizens

have

been

arrested Tor

pulling, ar fire box and then run¬
ning around i to-? the fire house to
see

slide

the-firemen

down

the

In this instance; nobody is

poles.

particular* class,, the 'importance
the- United States which today hOs

6#>

of thO world's

of the world's

half

the

come.

world's

would

national

have-

trAdIng

into

got; to have, com¬
when
statesmen
spring

action -this

came' from

Seemingly

our

department

in¬

| ;vv'

J* G White & Company

realized

free equalities* of private capital¬
ism and the part'which she has-to

INCORPORATED

STREET

37 WALL

NEW YORK 5

•

189Dr

ESTABLISHED

To Alexander Hamilton pro*

taction f was

a means of, strength¬
power and wealth of the
rfationj Class interests had1 no in¬

ening the

terest for him

and;-just'as he was
capitalism and cap¬
italist industry as an expression of
natiohalism, were he living to¬
night, he would be interested in
capitalism/ as ran expressibn not
merely of nationalism but of in¬
interested

ternationalism;"

get
appointed J commit¬

You've

mittees

v»* -

pleased1 to

are

announce

that

ELDRIDGE ROBINSON *
(formerly with George K. Baum & Co., Kansas City, Mo.)

)

now

associated with

our

TRADING DEPARTMENT

these.- statesmen

sir,

together and
tees.

over one-

arrested.
Well

population, 20%

goods and

therefore the importance of the
United States in the' dynamic and

play.

has become associated with

any

subse¬

implemented/

implementation would be a silly
looking thing, .'and :it goes without
saying, that as- a WorldvLeader,
we would Took ridiculous leading
with a silly looking thing.
i In
Euiope, outside-the iron cur¬
tain, thee statesmen "sprang, into

way.

Statesmen

nations- unheard

of,

new;" nations
were
Whereas, we had been

looking* only? for* Britain to come
back for. more, with* Italy4 tagging

A Swedish Viewv
i

FRED W. FAIRMAN & CO.

Lundberg, noted Swedish
economist,
maintained, likewise
that

ism

the

type of capital¬
not"" return.'
"We are

"will

bound to have

control?

involving

and

The important question
development im¬
plies'1 fundamental difficulties for

needs."

Chicago 4, 111.

Members

Chicago Stock Exchange

Distributors

208 So. La Salle St.r

government

planning.

and

of Investment Securities

different institu-*

tional framework;
state

Underwriters

prewar

along, we now managed to muster
some2 0 V nations to "pool ■?» their

Tel. Randolph

4068

■

Chicago Board of Trade
Teletype CG 537

Direct Wire to Francis

I. du Pont & Co., New York City

the Tree-enter prise/system, event-

'■

Really; it's a scream. And-what
are they to do by way of carrying
out ' their part' of- the? "Marshall

Plan"' to rehabilitate themselves?
Whv.

thev Promise-* to

their

crease ;«

try to in¬
production,
they

try to stabilize ; their
they" promise to set
up,/ committees4 to « studyother
things/ such as: custom barriers.
promise to
currencies,

Will
There

farmers

•

get* through r Congress?
scarcely a- doubt. The

have

-been-

told

whether, this

September 22, 1947

UaB.y-leading to the end of capi¬
talism."

s..

Continuing, he stated:
"Let me mention lour danger
spots: (I) Remaining risk and fear
of a
new
war,; with s the world
staying/ divided in hostile camps.
(2) The present postwar economic
difficulties affecting more nations

arc

the

continued
high
products, they arebecoming, I am-assured by farm
belt. Senators,about as global

minded-,

is involved be¬

bankers.

as "

the

international

of this organization

so/that the free-enterprise system
gets too little living room.

thai

elected, a ••Vice, President
been

hass

lasting for; a considerable
time."
(3) A new severe depres¬
sion-or.1 stagnation t period.
(4)

terested

of .their

announce

KENNARD.. WOODWORTH:

Growing hostility, to the capitalist
system, especially on the part of
the. working .classes, implying too
much socialization* and planning;

costs

pleased to

and

by our
politicians .that " the reason food
are
so high
is that we are
exportingtoo ' much/ Being ini
costs i

our

4iaving *

carved out:

j The authors of this tremendous

transformation; of

dOctrine- without

quently

PAUL A. LUDLAM

]

"These, danger spots can very

Well

illustrated! by

studying

the Swedish position.
It must be
borne
in ;mihd, i however, .. that

'EATON: & HOWARD
INCORPORATED

INVESTMENT-MANAGERS
BOSTON
24 FEDERAL STREET
?

BOSTON

333

MONTGOMERY STREET?

SAN' FRANCISCO

wswstowa

'J
THE

COMMERCIAL

Thursday, September 25, 1947

CHRONICLE

FINANCIAL

$6 Billion U.S. Private
Dealer-B roker Investment
Recommendations and Literature

Abroad in 1946
& Electric Company

San Diego Gas
common

continu¬
ance
of trend is predicated on
safety and fair treatment being
accorded private capital.

& Co. executive, stresses

Bank

gest

number of the "Grace

tional amortization and plant ac¬

These

special charges

in the erating

are

al-?

nature of non-recurring items,

portions
of
the
total
amounts
will
remain
to
be

though

charged off next year (at a lower
rate than in 1947). However, with
rising costs and the possibility of
at cut in residential rates if earn¬

Thus

far

calculated

have

the basis of the pres¬
ent number of shares (1,250,000).
Including the present offering the
amount increases to 1,550,000. The
proceeds are being used for part
otJa $16,000,000 construction pro¬
gram and theoretically, the new
stock should "pay its own way."
earnings

based :on

However,

the

larger

total share

number of shares the

special

(including

earnings

would

charges)

about $1.52.

reduced

Making allowance for

other factors normal future

ing

earn¬

might be estimated at

power

around

possibility

eventual increase in the dividend
rate

5%%

$1. The present yield
seems

average

for

pffissibly

little

because

the

rate

below

similar
an

the'

companies
increase

considered

any

anticipated

future,

increase

un¬

possibly

until

not

discussions

formal

tween

the

had

are

other West

and

Company

the

City

San Diego.

Such

consultations in the past have re¬
sulted in
tions

number of rate reduc¬

by mutual consent."

tricity to

elec¬

California, and natural

opinion on Mnllins Manufac¬
turing Corporation.
"Now

Robert H. Patchin

Buckeye Steel Castings

Portland

situation

gas

nues

and

Paul Ludlam New With

generates
energy.

nearly

The

gas.

new

all

1948

Natural

.Southwestern Public Service
Company
White

—

Memorandum

—

Company, Inc., 37

J. G.
Wall

Street, New York 5, N. Y.

and

second

Also
dum

ufactured

still

standby plants,

Common Stocks

memoran¬

Final

the

New

Haven

Paul

Ludlam

Graham-Paige

Park; r ~

Ludlam was for¬

Mr.

Inc.,5 and J. Arthur Warner & Co.

Motors

:■

Company—Anal¬
ysis—H. Hentz & Co.; 60 Beaver
Street, New York 4, N. Y.
Steel

Inland

Genesee

EVE

Sept. 26, 1947 (St. Paul, Minn.) Twin City Bond ^Traders Club;
Annuel Golf Party at the South-

Club.

The

1977.

and

interest

awarded at

was

The

competitive

101.67.' The
proceeds will be used by the com¬
pany to finance its expansion pro¬
gram.

ican Bankers

discussing position as inflation
hedge-^Maxwell,'Marshall & Co.,
647

South

Spring

Street,

Los

Angeles: 14, Calif. y;

offering; price is

accrued

Sept.
28-Oct. 1, 1947 (Atlantic
City, N. J.)
;
"
Annual Convention of the Amer¬

County Land Co.—Memo

analysis available!or in¬
terested dealers—Comstock & Co.,
231 South La Salle Street, Chi¬
cago

4, 111. V
"

•' '

•

.•

Frederic
elected

Steiner

has

been

member of the Board of

Directors of Namm's, Inc., Brook¬

Carolina.,

...

lyn department store, according to
an announcement by Benjamin H.
Narpm, Chairman. Mr. Steiner is
connected

with

the

Paper

Co.—

analysis in September issue
Financial Digest"
—Loewi & Co., 225 East Mason
New

Wis.

Annual Convention at the

Beach Hotel:

Wood

;

•

„

■

;

•

11B-? i

Stock Alt Sold
Glore, Forgan Sc Co. and

Wil- •

Sept.-

the

Casualty

Continental
stock

(par

scription
per

100,000 shares* of >

$10)

Co.

capital-

offered for sub-,.

stockholders

at $40

share,; subscription warrants

covering 94,738 .shares were
Pennsy Ivania- Railroad - versus
Northern

1947 (Hollywood,

:v. Fla.)
V
' '
Investment Bankers(; Association:

of "Business and

investment

banking firm of Wertheim d$_Co.
and;.is Chairman* of the Finance
Committees of the A. S. Beck Cbrp.
and i the Schiff Co. '
**
* ^ "•

Nov, 30-Dec. 5,

18 that of

Street, Milwaukee 2,

Myrtle Beach, South
./

liam Blair & Co. announced

Adams Street

Nekoosa-Edwards

Beach, !

•

Steiner Director of Namm's

(Myrtle

South Carolina)
.
Security Dealers of the Carolinas annual meeting at the Ocean
;

National Terminal Corp.—Mem
orandum for dealers only—Adamf

Co., 105 West
Chicago 3, 111. ;

Association.

1947

10-12,

Continental Casualty

;

Oct.

Forest Hotel,

Detailed

238

6s, 1950

Inc.,

Co.,

COMING

Corp*-

Lamson & Sessions Company—
banking syndicate headed by
Kuhn, Loeb & Co. and Union Se¬ Special bulletin—Ward & Co., 120
curities Corp. is offering today Broadway,* New York 5, N. Y.
$25,000,000 Consumers Power Co.
first mortgage bonds, 2% %. series
j Long Bell Lumber Company-

sale; on Sept.

Direct Wire to Chicago

; Utica & Mohawk Cotton Mills,
— Circular — Mohawk
Valley *

Inc.

view Country

due

BROADWAY;' NEW YORK 9. •' N. Y.' i/vv'

Wall Street, New York 5,

Co., 1

associated with their trading de¬

Offered at 102

Gilbert J. Postley & Co.

N. Y.

Investing

Products & Chemical and Fashion

Cmshmts Pow. Bmk

When Distributed

N. Y.

United States Leather Company

Osgood Company "Br Tennessee

U. S. Potash Co.

Portland General Electric Com.

Also available are analyses of

Rockwell Manufacturing Co.

Portland Electric Power

Street, New York 5, N. Y.
available

New York..

merly with E. H. Rollins & Sons,
f

New

& Hano, 61 Broadway;
Y.

York 6, N.

Analysis—Seligman, Lubetkin &
Co:, 41 Broad Street, New York 4,

produced

because

ger

of Cali¬
—Newbur-

Company

Oil

Union

fornia— Memorandum

Dixie Cup Company—Analysis
—Laird, Bissell & Meeds, 120
Broadwqy, New York 5, N. Y.
~f <■' ?. '
"

small amount of man¬
gas'

Street, Utica 2, N. Y.

from. Southern Counties Gas Com¬

but

Purcell

United Electric Coal Companies

Allocations.

purchased

Gas—Circu¬
& Co.,
Broadway, New York 4, N. Y.

Suburban Propane
lar—Edward- A.

and

Chicago, Rock Island & Pacific
49 Wall

issue

—Memorandum—A. M. Kidder &

50,000 KW plant

gas

Company,

^-Memorandum—Vilas & Hickey,

102

•

Be¬

and

ryllium Corporation.

Street, Philadelphia 2, Pa..

Street, New York City, announce
that Paul A. tudlam has become

expected to go into operation

1950.

Cement

ysis

electric

its

Pacific

Company,

Beryllium Corporation —
of
growth
possibilities —
Buckley Brothers, 1420 Walnut

J. G. White & Co., Inc.

company

Established 1879

data

are

Watch Company

—Review—Kalb, Voorhis & Co.,
Anal¬ 15 Broad Street, New York 5, ~

about two-thirds electric

are

one-third

Paine; Webber, Jackson & Curtis

■

available

Also

—

;

Philadelphia 2, Pa.

Walnut Street,

Towmotor Corporation. *

Liberty Products Corp.
j

Time"—Bulletin

market

Trust

ving

Kern

Crowell-Collier Publishing Co.

The

current

less

partment;

—Data—Buckley

Grucn

population of 47Q,000. Total reve¬

Trading Markets in

Manufacturing Go.

discussion

and

Bates

6, N. Y.
available is

Company
Brothers,
1420

Production

Southern

York

Also

principally in San Diego County,

the shortage- of natural gas. *

are

New

population of 550,000

record.

year

flf: G. White & Co., Inc., 37 Wall

from

this

Broad

repre¬

Coast utilities, has a fine growth

Revenues

pany.

Earnings and Asset Value Avail¬

be¬

sentatives of the Commission and

pany,
company,

Wall

Street, New York 5, N, Y.
Also available is a memorandum
on
Indiana Gas & Water Com¬

im.

[The

not

Memorandum

—

& Company, Inc., 37

White

Strauss Bros., Inc., Board of Trade
than$l billion of United States pri¬
Building, Chicago 4, 111.
vate capital was invested abroad
Also available is a memoran¬
per kwh. According to the pros¬ in
1946
alone,
in
oil
fields, dum on
Graham Paige.
pectus, "The Public Utilities Com¬ mines and industrial enterprises.
*
mission of the State of California The continuance of this type of
has in recent years adopted a plan investment depends; on safety and
Art. Metal Construction Com¬
of making frequent or continuous fair treatment of such enterprise. pany — Special report — Walstori;
examinations of the rates of public For the time being, the outright Hoffman & Goodwin, 265 Mont¬
utilities with the result that at lending of private capital is over¬ gomery Street, San Francisco 4,
approximately annual intervals, or shadowed and retarded by the Calif.
more
Also available are special re¬
frequently
in
times, of gigantic intergovernmental; lend¬
rapidly changing conditions, in¬ ing and borrowing."
ports on the Buda Company, Ir¬
•

be: early

pah

the; near-term

over

and

future

pwWEsibility. However, it seerfi's

likely that

that

position

of
G.

Company
— J.

Service

Public

first half of 1947 being about 2.51c

San Diego G. & E. serves

good

Diego's rates are low, aver¬
residential revenues in the

age

$1.35.

On this basis there would seem
t04 be

tre¬

estimated

is
San

study—Lober Brothers & Co.,
York 4, N. Y.

Skelly
Oil
Company—Memo¬
randum—^Hay den,Stone & Co.*, 25
Street, New York 4, N. Y.
able at Discounts—Memorandum
^-Ira Haupt & Co., Ill Broadway,-

which

mendously

discussing

Wall Street, New York 5, N.

recovery

revenues

—

Cable Corp., Moore Drop
Forging, and Northwest Airlines,
Inc.—Bond *& Goodwin, Inc., 63

"one

aid

can

Analyzer"

Rome

things

force

30 Broad Street, New

Stock

Convertible Preferreds—Memo¬

among

the

tion

randum

in 1946 were $3,is the resump437,000, and the ratio to the rate
tion of direct
base was 8.2%. This percentage is
investments of
of course a little on the high side
cap¬
but it does not take into account private
ital in foreign
the
special
charge-offs,
which
enterprises. It
would reduce the figure to 5.2%.
i

ings are maintained at a high
level, it does not seem safe to
cbtuit on share earnings of $1.89.

that

& Iron

Indiana

economic

other

Philadelphia and Reading Coal
Company—Technical posi¬

Insurance. Stock Di¬

—

Geyer & Co., Inc., 67 Wall Street,
New York 5, N. Y.

by W, R. Grace & Co., Robert H.
Patchin, Vice-President of that
firm,
discus. . - .
sing
w o ri d

said

pleased

firms mentioned will be

parties the following literature:

"Insurance

current
Log," issued

problems

In 1946 utility plant, excluding
quisition : adjustments
totalling intangibles, amounted to $58,117,about $1,209;000 or some 97c a 000.
Depreciation and amortiza¬
share. Added to the other earnings tion reserve was
$18,361,000. In¬
Hie total would be $1.89 and the
cluding estimated workkrgTapital,
pfice-earningsratio • would drop the estimated, rate base would
beltew %, 'Vv
•'?. approximate. $41,700,000. Net op¬

and

interested

Discussing situation gen¬
erally—Also contains tabulation,

the

article

figure is estimated tor tne calen
well
over
twice the
dar year. On this basis the price- running
earnings ratio, would be fairly amount in 1939. Share earnings
have remained very steady be¬
high—nearly 16 times. However,
ill the 12 month's period there cause of high taxes through 1945,
and the special charges in 1946-7.
were special charge-offs for addi¬

send

300,000 shares of San Diego Gas & Electric Com¬
stock was recently successfully placed at 14 Vk by a
syndicate headed by Blyth & Company.
With a dividend rate of 800
thei.yield at this price was slightly over 5%%.
The price-earnings
ratio, however, is more difficult to calculate.
Actual earnings for the
12 months ended June 30, 1947 were 920 a share and about the same

pany

It is understood that the

W. R. Grace

Robert H. Patchin,

An offering of

Pacifier-Memorandum

—A, M. Kidder & Co., I <' W
Street, New York 5, N. jf.

exer-'

cised and 5,252 shares- were pur-^
chased

the underwriters and;

have been sold.;

"Volume .166

Number 4632

THE COMMERCIAL & FINANCIAL CHRONICLE

•

(1209)

111
™

W. AVERELL HARRIMAN*

By HON
:
'

■*'

■

)

Walter W. McAllister tells convention of U. S.
Savings and Loan League physical volume of
housing
has increased 200% in two
years*
Says control removals have stimulated
building and predicts
housing shortage will end with removal of rent controls.
Secretary of League estimates new home
loans in last year exceeded
billions.

Secretary of Commerce

V ,r

Pointing out adverse effects of war on European economy and re¬
sulting distress, Secretary Harriman cautions, despite our aid, road;
back to recovery will be long. Although asserting we must
help
other countries to become productive, we must also consider in
what manner our support can best be given to assure preservation
of our own well-being, maintain our foreign trade and
keep world
peace. Cites need of coal and wheat by Western Europe, and sug¬
gests voluntary reduction in U. S. food consumption to aid foreign

]

distress,

;";v

v
'

■':/

The home

building industry of the country is being asked to
accommodate the least
layer of the population first, an economic
challenge which
placed upon any other industry in our private
enterprise system. This was pointed
out

able and the least competent
is not
i

■

•

by Walter—•—*

w. McAllister,

,•

ident

It is important that we take a careful look today at what is
hap¬
pening m Europe. War itself is man's ultimate expression of the

excessive. The
last
the
•

war

most

cessive

all
a

men

can

one

first

times

seven

annual

temporarily

their

meet

-as

own

W. W.

unable

needs.

;ept.

McAllister

that

litical attack

fair: to

the

the housing short¬
age continues with uriabated fury,

you

the first World

that

their

have

vention

;
.

since 1940/.

same

who

now

I
-

is
prehension
wrought

destruction

and

human
too, it is not

beyond
so,

Americans, I think,

engaged,

men

involved

areas

the

struction.
to

the

extent

believe

was

that

cost

war-stricken countries would .pro¬

frim

is far

the

case

and it is only

ancholy fact.
of many

being

after

other nations

destroyed

was

and

war

I saw

the

*•

was

forms

difficult

condi¬

tions, have been able to make
since the end of hostilities.
De¬
spite

bad

who

absorbed

world.

the

rience.
shown

relatively

greatest

Federal

the

productivity1 but markable progress. I found in all
greatly increased it.
During the countries the will to work and the
war
we
produced so much that determination on the part of the
maintained

within

its

relatively short while we
a
gigantic navy, air

overwhelming majority of people

constructed

again

fleet and merchant marine, at the
same
time ^equipped more .than

sustaining

M imiilion
and
1

equip

our

are

most

and

men

incomparably the

now

country

Of paramount

the

importance

is the maintenance and expansion
df

productivity. We are
foundly conscious of what
our

pro¬

this

by way of maintaining a
peaceful and prosperous world.

means

There must be

constant flow of

two-way world trade ii> order to
preserve our own standard of liv¬

ing.

The

disparity between

production
great

and

that

our

formerly

productive countries

re¬

flected in current talk about the
"dollar shortage." What does "dol¬
lar shortage" signify? It is brought

about by a shortage of industrial
and

agricultural

most

products

country

every

outside

hemisphere.

seven

2Vz

^months of

times

this

of U

effective

and

from

the

interna¬

tional trade channels of much of

Eastern

world

Europe,

must

much

turn

the

United

States for farm and factory prod¬
ucts.' Others need our goods but

they don't have enough products
'

of their

Hence

sell in

are

short

own

they

Road iRack

The. United

States

Long

low

the

age

the volume of

cline

al¬

developing dollar short¬
spread?

Can
our

permit

exports to de¬

sharply?

We cannot and should not con¬
tinue to ship goods abroad in¬

definitely without getting some¬
thing of equal value in return.
The

United

wealth,

States,

not

despite

its

inexhaustibly

wealthy. Nor, despite its produc¬
tivity, is it endlessly productive.
We cannot indefinitely
support a
large part of the world. Yet for
every

ranging

reason,

from. the

humanitarian to the
economic, po¬

litical and

strategic,

countries

we must

become

help

produc¬

This

must

despair.

they

reason

who

their

freedom

our

their productivity.
done

*An address by Secretary Har¬
riman at a luncheon meeting of

not

one

have

been

such

propagandists that we
increasing proportion

population who feel that it

ing to his desires.
That group
asks,/What is my fair-share of
what you make?'.

Unless

careful, maybe someday
that

can't
don't produce.

the

divide
y

the Cleveland

Trade

arid

the

Chamber of Com¬
Cleveland World

Organization,
Ohio, Sept. 15, 1947.

Cleveland,
/

•

them with any
at

any

background material they

ourselves.
our

realize that

mary

closing

task. In this~we

"thanks"

our

deal satisfactorily is
neither time

nor

hope

you

sure

the

maintain

likelihood, that
our
our

own

and

Trading

stocks, title

Department

company

and

well-being,

foreign trade, help

(Continued

page

bank participation
certificates.

shall

39):

150

we can

will be in the

near

part to deserve it.

68 William Street

Telephone HAnover 2-1700
!

Teletype NY 1-993

Street, BOSTON 10

Members New York Stock

GOVERNMENT,
PUBLIC

MUNICIPAL,

UTILITY,

BROADWAY

Boston

NEW YORK 7, N.Y

Philadelphia

AND

RAILROAD,

INDUSTRIAL

INVESTMENT

...

Exchange
^

BONDS '

preserve

pri¬

our

effort.

of those dealers to whom

now, we

future. We'll do

spare

Incorporated

specializes in real estate bonds

business is dealing in securities, and

If you are not one
say

need

business has .marched with
longest strides forward in its

Our

However,
we

may

what

Wholesaler and Retailer
of
Investment Securities

as¬

•

time, without regard to immediate benefit

201 Devonshire

can

•

That's why we do everything in our power to supply

merce

throughout the country for their confidence
and trust.

NEW YORK 5

restore

support best be given to

great deal to our many dealer friends

are

interest to

rather this: In what
manner

will

Amott, Baker & Co*

but

our

"E OWE
1

the road
away from war¬
economy, the savings and

others

responsibility of the Federal

learn

seemingly,

see that
everybody
is fed, clothed and housed accord¬

The question

aiding

of $10,194,994,000 as of Dec.
31, 1946," Mr. Cellarius reported./

'classes'

Government to

time

and

sets

TO YOU DEALERS...

two

suddenly

have

society;

help countries struggling to main¬

dollars

has

have

is the

dictatorships.
our

have

offices

thorough
now

It is therefore to

that

build

have

much

are

ernment

loan

men no

permanently under-privi¬
leged, ill-clothed, ill-housed and
under-nourished.
Those advanc¬
ing this idea through high gov¬

are

labor has
increase from $45 to
$53

com-

we
possess
a
group constituting
about one-third of our
population

are forced to trade their free¬

dom for

were

would

will

American

chaos and

longer
hope, when they
nothing but darkness ahead,

have
see

For when

un,

good years.
"Since 1930

"On

prevent the growth of

factory

for

cupied by one, or at the most, two
.If only one out of 10 of

housing as

afford to

with
8,815,284
individual members and total as¬

'Take-

say

'■■N-'N/.v-'-

years.

6,117 savings and

ueople.

self-interest

may

were

abolished-.
According to
bureau, we have better
than 14,000,000 dwelling units oc¬

discovered

can

"There

loan; associations

expe¬

were

those

lAOO.GOO available units,

Some
pay

largest gain in 20

and we in
familiar with

first-hand

tions increased

by 788,568, the-

census

But the road back,is long.
The
question, therefore, which we face
is this: In terms of
enlightened

exchange. tain
of

heeded to buy here.
.

own

Cellarius

oletely
the

elsewhere

removal

self-

their

vanish if rent controls

tive.

Because destruction has reduced

productivity

themselves

by ...paying

in-,

associa-•

regula¬

year

greater than

these double

other

Role
,

al¬

this

make

way.

helped feed

Allies.

productive

world.

from

are

savers

the

tion,"^. McAllister pointed oi^t
>"pur home completions the first

housing, lack of ade¬ the
corresponding months of '46.
United States, geographically re¬ quate heating, lack of food and
"I have no doubt that our hous¬
mote from the conflict, not only clothes, they have made
truly re¬ ing
shortage would practically
war,

facts

home

made its
poorest progress when subjected
to

and
H.

The number

-of investors

business

savings and loan

"Housing

$3,-.584,500,000.

particularly true of the

construction

into

million of them

owners as
the country
the third year of the post¬

enters
war

dished in 1928.
It totaled

"It

uni¬

wore

home

are

un¬

Europeans, working

most

been

have

jobs and almost

greatly impressed with; the
the

men

was

greater bytwo
- • thirds
;

the loan ;
record > estab-:*

too high,

were

conceding that there

made

than

League President said that prices
are
beginning to outrun income.

of
the
country's
he recalled that a ma¬

economy,

meet-...

'last year

expecting much reduction
in costs in the
year ahead,
the

phases

many

jority of the

believable wreckage left
by it. Re¬
cently I again visted Europe and
progress that

use

Citing the return to normal of

vanquished

during' andimmediately

the

junder

ilYet while the productive equip¬
ment

and

While

t,.

housing /

loans

enjoy

home
and: have stable shelter
result of
owning their

that realty prices

August home building was at the
highest rate in 20 years, •* \

has

man

much to relieve the stress

others—victors

Europe

that people realize this mel¬

now

history of

na¬

this
nation
has
done
since the end of the war.
Our aid has been of the
greatest
help to people abroad.
I was in

the

ceed somewhat comparably to that
Tfehich was achieved after the first
World War. But that, as you know,

the

alike—as

natural for men

recon¬

recovery

done

sur¬

prising that nowhere in the world
were men able at first to realize

pride in the fact that

tion

com¬

any industry.
He' further cited
the fact that in
June, July and

take sol¬

can

emn

;

ing, stated the
volume
of:
new

out that

W. Averell Harriman

•

H. F. Cellarius,
Cincinnati, Sec-.
of
the
United:
States Savings and Loan
League,*
in
addressing the opening session
of the League's: 55th annual con\

'costs, as a
know, we have lent money to
War.
Britain, France, Italy and others. although there has been a 200%, ■homes, would have, been deprived
increase in the new physical vol¬ of this benefit
if lending .institu¬
As the war We are helping the Germans and
ume
of housing built in a two- tions
itself in terms the Japanese to rebuild their lives
generally had heeded all the
year period, a good showing for warnings for the
past seven years
of numbers of under democratic institutions. All

•

position

Mr. McAllister pointed

icrwnership

correspond-*
..

■*

retary-Treasurer

n u ou s

recall

millions

po¬

t i

has been the

He
d out

c on

bombardment
from officialdom about
high real
estate prices.
It would not be un¬

San

17.

point

credit to

had

The¬

ater

countries

prophets as well
government
officials.
We

con¬

Francisco

who were able to
help.
We have also extended

economic

vention at the
;Curran

•'

existed among our people and has
certainly been fostered by many

Lea g u e's

uncertainty has

in his address
b e f ore
the

largely financed by us and
lesser exterit by other nations

destructive

war

workers and the other three
have *

pot and cannot have
ing increase."

severe decline in our national rate
of saving.
That

League,

esti¬

hardships
confronted,

the

and

were

about

mate,

the
are

after

Loan

leadership in sending abroad
great quantities of things to pre¬
vent distress.
These shipments

fought. It was,
as
nearly as

relieve

since the war is over.'y
But bear in mind that
organized
labor represents
only one in four !

took

have occurred

f sihce

to,

Immediately

weekly

ing mood of uncertainty; about
business in genera) and a
very

States

Savings

r".

with which others

ex-

t h

wars

much

was

j———

the

United

———•■■■■

The peculiar thing about
this record growth of ours is
that
it has happened during a prevail¬

Antonio,
Texas,
Pres-

;

■■ •

f■

■■■

history.

San '

STOCKS

Tm GOMfflERClAL fc FINANCIAL

CHRONICLE

Thursday,' Septemberf25; 194?
■

,w
'

}» J

(

•

;

Offers $75,000^)00
An
■

turning in a particularly good operatihg per¬
been Kansas, City Southern, - Traditionally this has

One of the roads

formance lias

Sept. 24 made

a highly efficient property, but even against the long-term
background the postwar results -have been impressive. Indicative of
the road's normal status it is significant that for the five prewar

|*^n

through 24.1% of -gross to net

1937-1941 it was -able to carry

years

underwriting group • headed
First BostonCorp. 7 on

The

new

Issue

public offering of
$75;O0O,OOO; Du-

THE INVESTMENT TRADERS ASSOCIATION OF PHILADELPHIA

Light Go. first mortgage
30-year 2% % bonds at 101.229 and
accrued interest,-to yield 2.69 %.
The, bonds were awarded .to the

quesne

operating income before Federal^
income taxes.
Among the major tion in the loans themselves, con¬ group in competitive bidding oft
tribute far more than would divi¬
carriers of the country this: ratio
Tuesday.
The company -is a sub¬
dends.. to increasing
the ^funda¬
was bettered only by a few of the,
sidiary of Philadelphia Co.
>■
eastern coal roads.
Of the three mental value of the shares. It-is
; Proceeds from the sale of the
actua 1 fixed bonds will be used fo redeem at
largest carriers in the Southwest^-, significant 5 that
ern
Region Served by the road, charges -are now down to around 103 V2 $70,000,000 3 % % bonds how
Missouri
-Pacific *fcafped,ohly i$l,850,000, or more than $1,Q00;Q00 outstanding. Balance of proceed^
the
level '» of
1943.. Re¬
12.1 % of the gross through in the below
will, become part of the general
1937-1941 period, St. Louis-San ported
charges
are , somewhat funds Of "the company to be avail¬
above $1,850,000 as the company
Francisco carried 10.2% through,
able for general corporate purinterest on its < 3s,
and Missouri-Kansas-Texas car¬ 'still charges
ooses, including payment of a por¬
1950, not turned in,.; even though tion- of the cost of the company's
ried 7.0% through,
cash fdr payment of the principal
construction program Which cons. An import a'fit consideration,
and 'the interest, to maturity has
item plates the expenditure of ap¬
particularly in the present era of
^already been deposited with the
fpiraling wages, is 1 that Kansas Itrustee; This interest saving is proximately $7,5,OO;O0O:in 1947. • •
!
The new bonds will be subject
City Southern's labor costs are re'highly important in relation to ito redemption on 30. days' notice
1 lively low.
Actual figures for 'the
509,599 shares of common las a whole or in part at prices
the current year are not available
'stock outstanding.
\
V v :
but on the basis Of payroll taxes it
ranging from 10423 if redeemed
Without making any adjustment 'during "the 12 months' period end¬
it indicated that sthe company's J
for interim cuts in fixed charges,
labor Costs, including the payroll
ing July 31, >1948, to par ' if .re-l,
■earnings on the eqmmon over the
■deemed- during the 12
months':
taxes, absoibed less than 40 cents
■past 10 years averaged "$3.36 a
out of every revenue dollar in the
period ending July 31, 1977; i The
jshare. Last year the company ibonds. will Lave the benefit of ;'a
first six months. Fur a vast ma¬
'showed $5.57 a share and the, 1947
jority of Class I roads the ratio results should run between $6 and {Sinking-fund beginning Aug.;,l,
11948.
For the 12 months "ended
ran higher than 50 cents out Of
.

„

$7.

Charles

John M. Hudson

Wallace H. Runyan

Brennan

These earnings, moreover, do

the

April 30, "1947, the company re¬
-Obviously, mot include the
equity in undisgranted
ported net income of $9,003,904
| tributed earnings of the highly which compared with $9,291,921
non-operating employees, 'and

Hie

increases

dollar of gross.

«very

then, the recent increases

jprofitable subsidiary, Louisiana
ifor the calendar year 1946 and
that will probably
■Arkansas. The earning power, -ef¬
the7tspersfting brother!$9,282,639-for 1945. ficiency of the properties, and fa¬
[
wPigh less heavily on this
Duquesne Light Co. is an oper¬
vorable territorial outlook

be awarded

boods,

than

road

the industry as

whole.

months of the

should,
ating public utility engaged in the
the opinion of many analysts,
production, transmission, distribu¬
eventually be reflected in a far
tion and sale of electric energy..

A. H. Fenstermacher

J. B. McFarland, III

The following officers were elected at the annual meeting of the
more liberal appraisal of the com¬
Substantially all of - the electric investment Traders Association of Philadelphia held on Sept. 19,
City -South¬ pany's stock.
■energy sold by the company is
ern's transportation ratio was only
1947:
'
•.
^
> ■■ " •
*■generated in its own plaints. The
30.3%, and in July it dropped, be
President: John M. Hudson, Thayer, Baker & Co.
•
m
territory served by the company
low 30%.
This recordwas betHarold
;
First Vice-President: jpharles J. Brennan, Blyth & Co.
,
.•
iered by only four roadafin a list
| ((embraces the} city of Pilfcl/urgh
Second Vice-President: Wallace H. Itimyan, Graham, Parsons 8c
and surrounding mumMpai^es! iif
ttf 45 representing over 90% of the
■on Allegheny and Beaver Counties; Go.
gfoss revenues of thei industry.
Secretary: James B. Farland, III, First Boston Corp.
"The highly efficient 'Virginian and
The need for increasing coop¬ Pennsylvania, and one municipal¬
IVew
Orleans, ."Texas & Mexico eration between the-great invest¬ ity in Westmoreland County. The
Treasurer: Albert Fenstermacher, M. M. Freeman & Co.
were
down around 23% for the ment markets of the Pan Ameri-!
company furnishes all of the elec¬
■first
half while another Poca¬ can. Hemisphere, to aid the flow
The following were elected to the Board .! of Governors for a
tric energy required in the opera¬
three year term:
hontas carrier (Norfolk •'& West¬
'
;
.
;
..
;
of capital and
v
tion of the Pittsburgh Railways
ern); had a transportation ratio of goods
John G. Barton, F. P. Ristine & Co.; John B. Swann, Jr., Lilley
into
29% and St. Louis Southwestern productive'en& Co.; Herbert H. Blizzard, Herbert H. Blizzard:. & Co.; Joseph A.
system.
'
>
Was just below 30%.
Ability to terprise, was
The company owns and Operates iZeller, Bankers Securities Corp.; NewtonvH. Parkes, Jr., E. H. Rollins
bold the highly important trans¬ urged by Har¬
/
. ' :
certain coal- - properties and the |& Sons, -Inc.; 3L Whitney Rogers, Elkins, Morris & Co.
portation posts -under such strict old L. Bache,
control augurs well for a continu¬ m an
supply of coal for its power plants |
The following were elected to the Board of Governors for a two
aging
ation of high earnings. -/
is largely secured from this source.; year term:
"
••
;
...........
partner ' of
r.
.Alfred R.- McBride, Wright, Wood &- Co.;. Freeman G. Grant,
The company owns all of the cap-,
Many railroad analysts feel that Bache & Co.,
file recent market price for the at a farewell
..v
'
;
ital stock of. Allegheny '^County Dolphin & Co.
company's common stock fails to. J u n.c heon.
Steam Heating
Co., which fur¬
The following were elected trustees of the Gratuity Fund:
recognize the strong operatihg po¬ given by that
nishes steam
heating service to
rtion of the property, Kansas City firm to. mem¬
Floyd E. Justice, Kidder, Peabody & Co.; Thomas O'Rourke,
Southern is one of the few that bers- of
tti fe
. .
^ '
approximately 435 customers in Stroud & Co.; George J. Muller, Janney & Co. •

For the first six

;

current year Kansas

;

Bache Urges

did

not resume, dividends on

its

during the

stock * even

First

„

;Hemir.

the

Stock
although the non- Exchange
cumulative preferred is now pay¬ Conference.
"We Lave
ing its regular 4%. 'Studehts of

common

situation,

moreover,.

dof,not

entered

new

•

..;

its 1950 maturity

Aerial
iaken

bank
care

«f last year

Able

problems. How¬

in the process it iassumed a

ever,

its

loan that must be
of and as of the -end

it still had a note paysubsidiary, Louisiana

-Ac Arkansas.

•

: While
the loans may militate
aigainst early resumption of divi¬
dends it is pointed out that the

debt program in

Bache

tech nical

declared.

(Snecial :to The Financial

Chronicle)

luncheon

The

Merrill

given at the Wall Street Club
and attended by South American
representatives of the Financial'!

was

Industry.

Lynch, Pierce, Fenner &
Paine, "Webber &

Beane and with

Co. and Jackson

•& Curtis.

#hidh they were
gradual reduc¬ Paid J.
Koughan Joins

Lord, Abbett & Co. Staff

Bonds

Special Securities

A t e D

IHCO

CBA1AMTEEP jAILBOAD

25 Broad Street

STOCtS-BOHPS

New York 4, N. Y.

Telephone BOwllng

dreeri 9-6400

Teletype NY 1-1063

(Special to The

FinanciaL

Chronicle)

ANGELES, CALIF.—Paul
J. Koughan has become associated
With Lord; Abbett & Co., Inc., 210

(Special to

The Financial -Ghronicce)

ensuing .year, will be elected at that time^

Problems,

Taxation,

important courses

Four

the New York and San

Francisco

the
:

at the New

new

"fall term, beginning

Benjamin Graham,

the special topics

to be

included . are: forecasting' stock
devetopmetrts; security an¬

•market

alysis

for

the

investor; profes¬
stock ap¬

sional services; common

praisal and

selection; protection
credits.

of the investor; consumer

The sixth annual

"Federal

Maurice Austin;

ciated with Scharff & Jones,

Inc

Norris

Whitney Building.

Mark E.: Richardson;

investment, taxation and finance,

symposium on
Taxation," meets for a
is a director of the company.
10 weeks' series under the chair¬
With Sutro & Co.
manship of Alex M. Hamburg, at¬
(Special to tpe Financial Chronicle)
With Sduaff & Jones, Inc.! torney and tax counsel, beginning;
SAN FRANCISCO, CALIF.
(Spfecial to The-Financial Chronicle)
'-3 Tuesday, sept. B0 at 8:30 p;m.
Harold B. Getz, Jr., has become
NEW ORLEANS,-LA, —Rand Among 'the speakers in the series;
connected with Sutro & Co., 407,
are J. K. Lasser;
Ewing Eveiett;
Montgomery Street, - members of Hawthorne, Jr., has become asso¬
ibtodk Exchanges.

and International

series.

new

School for Social Research, 66 West 12th Street, in
Monday, Sept. 29.
:
i
President, Graham-Newman Corporation, and
A. Wilfred May, economist, commentator and executive editor of the
"Commercial and Financial Chronicle," offer a 15 weeks' series,
'Current
Problems of the In- *
ven;
Adrian W. DeWind; Jacob
vestoT," beginhrrrg Thursday, Oct.

open

1 Among

CINCINNATI,

New Scboel

Marketing,

finance tovered in

2 at '5:30 p.m.

Formed In Ciirciimati

OHIO — Cartwright
&
Co.,
Inc., has I been
formed with offices in the Union
Central
Building.
Officers - are
West
Seventh
Street.
He was
William A. Cartwright, President
formerly in charge of the Los Anand Treasurer, and John C. Tay¬
geles office of King Merritt & Co,
lor, Secretary. James A. Brett, Jr.
LOS

Hotel, Myrtle Beach, S. C., the week¬
?
•
^
; -Vr

Finance bourses Offered by
Investment

will hold its Annual

developments

Assumed, and fhe

Guaranteed Stocks

New officers for th^

;

CLEVELAND, OHIO—John N.
has
become 'associated
and ideas destined to serve one! IDarrow
■common purpose—to
aid in the with Prescdtt & Co., Guardian
greatest possible increase in the!' Building, members of tee' New
happiness and welfare of all the: York and Cleveland Stock "Ex¬
people of the new world," Mr., changes. He was formerly with
merbe In

THE CAROLINAS

of the«Carolinas

Dealers

Meeting at the Ocean Forest
end of October 10, 11, and 12.

hemispheric^

early resumption ' -of commerce, which encompasses not;
Common stock distributions.
The only the exchange of capital and
road has done a good job of con¬ manufactured goods, but a com-}

and-diminatnig

Security

The

Anticipate

solidating its debt

SECURITY DEALERS OF

THE

.J ;V

-Ha#-old L. Bache

era

section ol

principal business

Pittsburgh...

boom,

war

Hie

spheric

Darrell;

George Cra¬

Rabkin; -and Benjamin <xrund. - >
Dr. Julius Hirsch, market ex¬
pert, ; visiting professor to the
Graduate
Faculty of the New,

School, formerly chief consultant,
OPA, will give a 15 weeks' course
on "Marketing," opening Monday*
Sept. 29 at 8:30 p.m.
A

series, "Current International

Economic,

Financial

and

Prob¬

lems," will meet the fourth Mon¬
day

Antonin

every

led

month,

International

Bank j -for

struction, und

Development.

•series

Basch, chief ■ econopiist,

begins

at 8:30 p.m.

Recon¬

Monday, :Oct.

The

Volume 166

Number 4632

THE

Stockholders of all kinds

of business

should

COMMERCIAL

.The

FINANCIAL

CHRONICLE

(1211)

materials and
supplies necessary to rail¬
^operation has increased 87% since: 1939;
wages and wage taxes are up about 70%.
Freight
rate increases have
produced only 15% additional
cost

road

Freight
oosts

rates

stockholders
railroad

are

too

railroad
a

low

meet

operation and

fair

return

stockholders

are

the

mounting

allow

railroad

squeezed out—railroad

interest

other corporations—
by their stockholders.

words,-stockholders everywhere would
be penalized.
.•
,
i
'
\ "
•

Railroads

should

freight

treated

equitably and given

rates to meet increased

allow railroad stockholders

fair

costs

return.

^received

' 1

bigger and bigger share.

;

just and reasonable
that in meeting their responsibility to the
public
ih
'famishing adequate and efficient transportation
earn

our

.sufficient

revenues

enable the

railroads,

Under honest and economical and efficient
manage¬
ment to

jus

What the railroads desire is

to
'

and,

NOTE THE CHART—While Ihe stockholders*
share of
t
Railroad income has declined, those who sell

included —freight
promptly to the higher costs
performing transportation.

i' rates,

other

increased

.everyone —employes
rates-should be
adjusted

upon

owned, in turn,

"hauling the average ton of freight one
freight rates is needed. In the

mile. An increase.in

operation would fall on the Government. Under
^Government operation, taxes to
support the railroads
would fall
principally

for

revenue

their investments. If

provide the public with the service it desires.

Pennsylvania
supplies have
'

;

1936

1*46

1936

Dividends

J':

-i

i
.

j,.'-

1946

Materials and Supplies

■»*

■

*.*r

THE COMMERCIAL 4 FINANCIAL CHRONICLE

Industrial

Dow-Jones

moved
a

Bank and Insurance Stocks

Average

Development of International

from 177.20 tb 178.73,
points br 0.9%;
J r

Thursday ^September 25-' 1947

rise of 1.53

individual stocks, how*-

A,, few

have % moved
against the
example, Great Ameri¬
from 28% to 29%; Home from

ever, -

trend. For

DEUSEN

By E. A. VAN

can

This Week

—

Insurance Stocks

Semi-annual operating results in 1947 and 1946 of 70 stock fire
companies have been summarized and compared in the
September 1947 issue, of "Best's Insurance News." The following
r tabulation is arranged from Best's figures:
' •<*..
/

1 insurance
'»

First Six Months

Net Premiums Written

___—

\ Net Premiums Earned
Statutory Underwriting Results —
Change in Prem. Res. Equity
V Net Underwriting Results—__ ____
Net Investment Income

,1947

($000)
313,474
253,799
—33,643
+ 23,376

195,780
—26,777
+ 17,890

fTotal' Net Operating Prbfits. —
Declared

Dividends

—

+30.2
+29.6
+30.6

Due

the

,'to

,heavy

losses,

fire

the

Texas

City disaster, statutory un¬
derwriting losses were heavier
i than
a
year
ago,
but they are
a modified
by the subustantial rise
in premium reserve equity. Net
investment income was up 7.8%
helped to hold the decline

which

in total net' operating profits, be¬
fore
Federal
income
taxes,
to

—

1.2

sound

^,404

reflected

+69.5,

been

...

12,328

declared

are

8.8% greater than in

investment

1946; coverage by net

approximately 1.46
periods.
With regard to the year as a
whole, it is of interest to quote
Best's opinion, as follows:
"In¬
creased rates and higher premium
volume
have
already
laid the

income

was

times in both

groundwork for an improvement
in
experience and barring any
further catastrophe, operations in

Premiums/Written--—r
Nqt Premiums'Earnedi..
lr_
Underwriting

Results..

(|Change in Prem. Res. Equity.——

% Change

($000)
460,592
395,843
7,517
+24,997

($000)
353,269
303,056 ' >
—13,463^
+ 19,949

+30.4
+ 30.6

times in

many

+25.3

6,486

+ 17,480

+ 169.5

Total Net

20,519
4,460
16,059
11,167

15,278
32,758

8.9
+ 59.6
+ 3.2
+ 75.3

Operating Profits
——

fTotal Net Operating Profits—
Declared

4,604

28,154
9,516

'—14.8

the loss ratio was down as
early

began

this

year

to
in

the

experience of the companies. Net
investment income

8.9%;
3.2%

Federal
greater,

was

taxes
but

clared during the

so.

recently
vso

higher by

only

were

dividends
half

year

de¬

were

casualty stocks have drifted lower
since the first of the year. On
Dec.

31,

& Poor's

Standard

1946

fire stock index was 119.5 and on

1947 it was 113.4, a dercline of 6.1 points or 5.1%. Their

Sept. 17,

stock index, over the
period, declined from 161.0

casualty
same

150.1,

drop of 10.9 points or

6.8%. By way of comparison, the

Great American and
North River, each yield around
the average of 4.1%.

curity Of their

BANK
and

of INDIA. LIMITED

INSURANCE

Bankers

the Government

Head

Hartford

ity-Phenix,

Branches

Frank Kiernan & Co.
in New Location
Frank Kiernan & Co. announce

28th

floor

Liberty St., ef¬

Burma, Ceylon, Kenya
Aden and Zanzibar

Colony and

Friday, Sept. 19.
telephone number is

Members New York Stock Exchange
120 BROADWAY, NEW YORK 5, N. Y.

Telephone: BArclay 7-3500

Teletype—NY 1-1248-49

CL. A. Gibbs, Manager Trading Dept.)

Subscribed Capital

£4,000,000
£2,000,000

Paid-Up Capital
Reserve
The

Fund

—£2,300,000

Bank

conducts every description
banking and exchange business

stroyed by war and

selves to work

defend the

se¬

Willard L. Thorp

tituent

c o n s

New York Stock

Exchange

Weekly Firm Changes
The New York Stock

Exchange

has announced the following firm

changes:

ered

Exchange mem¬
Slaughter to

Charles

consid¬

by the. Exchange on Oct,.2.

broker.

■'

'/i'■

'■*>

Transfer of the

Exchange mem¬
bership of George M. Sidenberg,
Jr., to Vernon J. Harvey will be
considered by the Exchange on
Oct.

It is understood

Sidenberg will act
ual floor

broker.

Sept.

retire

firm

12.

members.

Here, tonight, we are
a
conference for a
complementary purpose, to work
together for economic advance¬
ment and stability. Peace, secur¬

Oct.

Strickland
solve

ity, social and economic progress
all
walk
together.
This
First
Hemispheric Conference of Stock
Exchanges can contribute its share
to that economic progress which

eloquent simplicity in the Charter
of the Americas, "to live decently
and work and exchange produc¬
tively, in peace and security."
Again I find it particularly ap¬

the

late

immediate

to all
chief in¬

consequence

Americas.

the

But

our

evening is the long-run

terest this

economic development of the com¬

Western

the

munities

In that endeavor the
this

hemisphere

This

can

idea.

new

world.

peoples of

collaborate.
It

has

al¬

been true that the relatively
mature economies have contrib¬

ways

their

uted

savings

their

and

know-how to the development of
the less developed areas.

However,

pects of this long-term

economic

levels

high

production;

the

collaboration and one

ternational loans and financial as¬
sistance

mental

is dominated by govern¬
institutions, national and

commodities
and
by
achieving
greater diversification/to achieve
stability as well.
But

Co.

of Sept. 30.
of

technology to create new and
productive economic activity and
to achieve higher than prewar liv¬
ing standards. The crisis in Europe
today is of a different order of
urgency and magnitude. Whether
or
not that crisis is overcome is

the potentialities in the Americas
propriate that this conference has are far beyond any present reali¬
been held on the initiative of pri¬ zation. Much can be done along
vate citizens because I wish to existing lines, and new types of
d;scuss this evening the signifi¬ activity can bring that diversifi¬
cance of the words of President
cation which is so important in
Truman in his speech at Petropo- the economic world of today. Eco¬
nomies based primarily on agri¬
lic.
"Here [in the Americas] the
need is for long-term economic culture f can
develop their re¬
collaboration. This/' he said, "is sources and utilize-; their talents
a type of collaboration'in'which a
to create new wealth in commerce
much greater role falls to private and industry. The-primary prob¬
citizens and groups
lem for the economy of the United
There are many important as¬ States is to maintain stability at

international. This has not been
will true of the past, and should not
Exchange member be trueitof the -future,, once the
2.
present economic crisis in the
& Widin will dis¬ world has been surmounted.

Slaughter

application

cf the more problem of our Latin neighbors is
that Mr. significant is the role of private to diversify their economies, to
individ¬ citizens in this regard/ At the decrease their dependence on a
number
of
present time, the problem of in¬ limited
exportable

S. Carter Campbell retired from
partnership in James-F.„ Shea &
on

develop¬

and steady

John

Fundamentals of International

Bacon, Stevenson & Co.,
of Aug. 31.

George E. Williams, partner in

tal

—

private capital and govern¬
Each is appropriate and

makes its
Role

international investment is to

take

expansion and
require capital —
foreign capi¬

mental.

Fundamentally, the problem of

industrial

development

domestic capital and

Investment

contribution.
of

Stock

Exchange

The stock exchange is a neces¬
sary

instrument in the promotion

country and nut of capital investment. By imposing
another. The uniformity in the procedures fdr
Frank E. King, member of the
present procedure is one of gov¬ buying and selling securities, hy
Exchange, died on Sept. 12.
ernment pre-emption on the one
maintaining
high
standards
of
Harold P.
Co., died

Sept. 8.

savings

MacDonald, member

of the

Exchange, died

Sept. 16.

Trusteeships and Executorships

hand

and

government allocation
the machinery

the other, with

being an

also undertaken

one

work

them

inter-government agree¬

The

traditional procedure

calls for voluntary

Helffrich & Co.

dividuals

honesty and integrity among its
members, by eliminating specula¬
tion prejudicial to the securities
registered on the exchange/ uby

savings by in¬
issuing daily price quotation's teftid
competitive re¬
by providing authentic informa>quests by the end-use borrowers, tion to the- public regarding com¬
ALLENEOWN, PA.—The firm
and with capital market machin¬
panies whose shares are offered/it
name
of C. C. Helffrich & Co.,
ery working out the arrangements.
can awaken a wider public to the
12-14 North Seventh

DEPENDABLE MARKETS

St., has been
changed to Helffrich & Co., Inc.
Officers are
Ruth E.
Helffrich,
President, and Robert F. Delaney,
Secretary-Treasurer.

BANK AND

INSURANCE STOCKS
of

210

California

Yni/^r^STREET

LOS

Comprehensive Trading

ANGELEt 14, CALIFORNIA

Helbig Co* Now Partnership

TELEPHONE TRINITY 7171

TELETYPE: U 177, U 2»

Analytical and

capital de¬

the restoration
standards of living but

the

and

ment.

Sales Service

development,

pledged them¬

Firm Name Now

•;

but, long-run

not the re-creation of

Jandt 7-3148.;

Beer &

Laird, Bisseil & Meeds

tion

Their is part of our commpn aspiration
COrt- —an aspiration expressed with

fective

ceased

In India,

this

concluding

Interest

26, Bishopsgate,
London, E. C.

tions

hemisphere

ment of resources and

Gillies in

Office:

STOCKS

in escaping the brutal impact of
war machines and enemy, occupa¬
tion—is not immediate rehabilita¬

Janeiro/.

problem

Western world—fortunate

peace

Kenya Colony and Uganda

Rio;

economic

central

the

Fire

Charles

NATIONAL BANE

The

con¬

field.

international

suc¬

cessfully

should be

believe

of prewar
the gradual

Co.

Bell

far /as possible in the

maintain

Transfer of the

reflected

utilized

together to

It is understood.that Mr., Bandler
will
act -as an individual floor

levels

for Insurance of
2.9% for St. Paul
Marine, and 2.5%
for
Fire/ Continental, Fidel3.4%

down

fIt will be observed that; both 14.8% lower than for the. similar
statutory and net underwriting period in 1946,
Results show improvement1 over
Marketwise, » both
fire
and
rate

States

ereign

North America,

f After Federal Taxes

higher

one: which

for Home,

for Franklin and 4.6%

David B. Bandler will be

1946;

There the na¬

bership

..:.

—,

Sov-

ence

representative stocks. Individ¬
ual yields range from 5.3% for
Security, 5.2% for Fire Associa¬
tion, 5.1% for Agricultural, 4.8%
21

*Before Federal Taxes

of the Confer-

and

—

14,033

Federal Taxes

This conference is singularly opportune. Although organized in¬
dependently and by private citizens, it is in fact a logical continuation

cluded

new

Net Investment Income

*Net. Underwriting Results—

Dividends

has

the removal of their offices to the

1947

1946

■

Net

pbinted 6ut

First Six Months

,Casualty Companies:

Statutory

market,

Federal

—1.2%.

•

the

this column.!

8.8

€■■

quality and
growth count and will be

—94.0

198

taxes in- the second half should be more
/.
curred during the first half of this favorable."
Best's has also summarized and
year,
however, were very much
lower than during the same period compared operating results for 70
v-in 1946, the net result being that, stock casualty-surety companies,
after
taxes, total net operating from which the following tabula¬
profits are up 69.5%. Dividends tion has been prepared:
only

brought to yield about 4.0%,
based on average yield of a list of

international

hemispheric economic collaboration and outlines
function of security exchanges and financial/ institutions in estab¬
lishing an international investment market. Says there is need and
opportunity for American investment abroad, but calk attention to
foreign discriminations against American capital; Urges-U. S. capi¬
talists comply -with domestic laws and refrain from political activi¬
ties in making
foreign investments.
,

such

factors,

expert of State Department points cut role

investment in

short-term moves; over the

longer term relative

Currently choice fire stocks can

continuation

country-wide

and /' other

such as
Continental;
tp .49; Fidelity-jPhenix
53; Hartford Fire, f rdm
106+4 to IOI1/4 and Insurance Co.
of North America, from 100 to 88/
After all, these are merely er¬

Economic
_

stantially,

ratic

+ 7.8

17,869
7,602

f After Federal Taxes

Assistant Secretary of State for Economic Affairs

from 56 to

^Before Federal Taxes

By HON. WILLARD L/THORP*

from 51%

—10,267

8,887
16,578
\ 7,691
3,324.
4,367
11,331

—

*Total Net Operating Profits.—
/Rederal Taxes

% Change

1946

($000)'
240,852

Fire Companies:

25%; North River from
221/2
to 24%; St. Paul Fire &
Marine,, from 67 to 69; Springfield
Fire & Marine, from 106Y2
to
IO71/2 and U. S. Fire, from 50 to
51; On the other hand, some of the?
best fire stocks have declined sub¬
24%

Z2W *hJ.
•OSTON

•

PALLAS

PHILADELPHIA
.

•

to
OETPOIT

ST. LOUIS

SAN FRANCISCO

•

SEATTLE

represent agencies of

major possibility

profitable

invCsti-

Baron G. Helbig & Co., 60 Broad
*Ah' address by Assistant Sec¬
St., New York City, is now a part¬
nership, members of the firm be¬ retary , Thorpe before the First
ing Baron G. Helbig, formerly Hemispheric Stock Exchange; Con¬
sole proprietor; Gi F, Helbig/and ference, New York City, Sept. 18,
R. H. Pattison.

making effective ment in enterprise. It gives; trans¬
ferability to the investment, which
the private capital market route
permits the investor to feel that
This is the method used within
he is at all times in a reasonably
the United States for the transfer liquid position. It provides a basis
of savings into investments, and for collective judgment as to the
importance

;

CtuHtclinf TM'tPJ

NEWYOKK
CHICAGO

You

with

1947.

relative risks involved in differ¬
ent types of enterprise. An active
and

well-organized capital market
imeahsifof attracting foreign
as
well
as
domestic, by
(Continued on page 27)

funds

Volume 166

Number 4632

M-

-v*.

THE

COMMERCIAL
/

;

if.*#*!.*,

•*$ PAtJE EIN'Zttft"

«^v f v

w-s

■

from these

come

LONDON, ENGLAND—Those who expected

failure

great deal of the
London meeting of the International Monetary Fund and the
Interna¬
tiona 1 Bank
^
"
~
a

■■

for Reconstruction

after

lp®-::

:'V
m

ernors

fy.

.a single dollar outside the
•tihitbd States and the
Fund, dol¬

lars could not be declared

currency, member countries

the

Einzig

Dr. Paul

themselves to routine

There

was

bus¬

question

borrow

placing additional earn dollars,so that it has no
disposal of Britain dollars
whatsoever, then and only
European countries af¬ then it is
graciously permitted
by the dollar
shortage, under the scarce currency clause

other

fected

beyond the facilities available
them

under

While some

the

existing rules
delegates were toying

with the idea of

revision of the
statutes of the Fund,
nothing could
come of
it since it was obvious
that Mr. Snyder would
veto it.
The importance of the Fund
and
a

to abstain from
spending any of
its non-existent dollars.
This may
read like a
passage from Alice in

Wonderland.

But

there

worse

to come.

Since the Fund is unable
declare dollars a scarce cur¬

rency until

that

are

will

find

itself

meetings became entirely without any dollars long before
overshadowed by that of the pri¬ then, under the Bretton Woods
vate meetings between Mr.
Snyder Agreement remains under legal
and Mr, Dalton Had
those talks obligation.to continue spending its
an

Speaking at a banquet of the Federal
Reserve Forum in Minne¬
apolis, Minn., on Sept. 18, Harry A.
Bullis, President of General Mills,
.Inc.,
c au -<S>—
L

it will be d costly
lesson, perhaps
costlier than the first lesson
which appears to have remained

tioned against
1

non-existent

agreement the nscessary

dollars.

;<;And

since

unheeded..

at'was

was

revision of the rule under

which member countries

entitled to

use

are

June 30, 1-947, at
a, time when
they are needed particularly ur¬
on

gently.

Since? the total quotas- of

members

States

000,

otheruthan

just .under $5,000,000,of dollars that
drawn during the year

amount

1947-48

would

limited

under

existing statutes to less than $1,250,000,000. Apart altogether from
the
be

fact
a

that

mere

this

drop

amount

the

would

ocean

dollar

When

Mr.

Snyder

asked whether

said

dollar

of dollars,
,

shortage.

that there ' js a

shortage, pot

but "of production, and
production could be raised all

have

enough dollars. There
tw.o flaws in this argument.

the U. S,

25%

their

quotas for the acquisition of dollars, the Fund would still possess
on

June 30, 1948, some

000.,

And

such

possesses

dollars

which

Bpilding.. He
,

dealer in Utica.

v V

aid."

Financial

Chronicle)

MICH.—Robert

marked

scot

Building.

partner
of

Windsor,

thereto
chen

was

Stodgell

Ontario,
with

aid

Penob¬

formerly

was

and

(Special

LOS

Co.

the

Fynd

amount

will

The

Financial

ANGELES,

;

che past was an officer of

Cass Associates.

the

statutes

lit isinpt allowed to
lend, it would
clearly absurd to claim that
Abe Fund is short of dollars.
Ineven

June

Fund: would possess

NEW
mund

ated
205

the

these

long

other

than

Fund's
the

goods

dollars

cannot

are

in short

any

Plus would only be able

their

to arise,

°*

into

over

will

Co.,

would

single

American

will

(Special to The

KANSAS

potential

cereals

our

andwfree,
■

unit

least
!>,-

Sutton

Financial

CITY,
has

Chronicle)

MO. —Joseph
affiliated

Inc.,

was

With Bourbeau &
Douglass

not

(Special to The Financial
Chronicle)

"J -r.

over

LOS, ANGELES,

CAUF.—Hays

with

Pacific

was

previously

Company

Cali¬

fornia.

all

money

the

-J.V

■

•—-—

•

(Special

common
.

■''.

■■^'

Bailey & Selland
to

The

Financial

Chronicle)v

FRESNO,
CALIF.
Frank
J.
Oneto has been added to the staff

money

-j" 1.

—1

With

easy?

—

A)f Bailey .and Selland, 1157 Fulton X

continent.

This advertisement is
not, and is under
securities for sale or

as a

The

NEW

circumstances to

solicitation of

Street.-,

be construed as, an

offer to buy

any

offer of these

of such securities.

offering is.made only by the Prospectus.,

ISSUE

ac¬
so

supply.

the

V 1

i Ti i

Consumers Power

sur-

to pay in

determined ks

ever

Company

First Mortgage Bonds

27s% Series due 1977

improved,

supply

aim

of. the

Dated September 1, 1947

Due

trends

every mem¬
U, S. utilized

balancing

,memkers 49,, use;
all.; ^t is therefore

cor-

balancing

ration of

her

AND

ACCRUED

INTEREST

our

with
on

his
con¬

Copies of the Prospectus

which

prevent. Britain

balance:

upon

be obtained in any,State only front such of the

may

lawfully offer these securities in

such

State.

ac¬

•

Kuhn, Loeb & Co.

and even

the resto-

sufficient degree

may

undersigned and others.as

from

international

$400,000,000 of .the Loan;

'theirj

102%

Marshall Plan to

counts. Nor did he
hold out
any
definite hope ot assistance
beyond
the
release- of
the

of the dollars obtained.

September 1, 1977

OFFERING PRICE

'.convertibility'to meet his approvaL

■JC.

September 25,,1947.

South J?

Spring Street.

Europe should at

that

■„

Matson has, become affiliated with
Bourbeau & Douglass, 510

nation

quick,

toward

her

That makes trade

;

become

chance

we win

common

as/ far

;•)

previously with B. G. Christopher V
& Co. and
Harris/ Upham & Co.
(2)/ develop
enable

built the United

country

avork

money

help.

can

and

;

with Herrick, Waddell &
Co.,
1012 Baltimore
Avenue.
He

permit Europe
(1) Establish

successful

land.

our

within

deficit area, it

Ed¬

New-

burger & Co. and Weil & Co.

to force Britain to make a
spcond attempt of convertibility
long before conditions have suf-

judging by the reluctance that is
conditional

qtiotas at

KoHnieyer,

greatest
of

With Herrick, Waddsll Co.
.£■

that the economic
require¬

S "We have

was

the

try

international accounts
Government's insistence
vertibility and Article

situation is most
unlikely

many

Mr; Snyder conveyed
distinctly
his Govern-

Such

Street,

that,

might be desirable for Europe.

affili¬

Steiner, Rouse &

Carondelet

own inconvertible currencies,

assist; Britain

nearly 75% of its quota for the
acquisition of dollars, without re¬

paying

with

are

adequate quantities

Ithe countries importing

the

dollars—provided that
ber

LA.—J.

ask

things:

ments that have

Chronicle)

and J
"
;

other farm products."

that Europe can
repay us.
achieve these two
purposes

means

Thus,

buyer

Ullman has become

previously with

justify it.
He was unable or
unwilling to
1949, the answer at his Press Conference a
at least $800,- question as to
how he reconciled

become technically
pos¬
sible for; the demand
by members
exceed

ORLEANS,

30,

it*1would
to

Financial

political
opinion, the

should

two

States

(Special to The

world.

other

help herself, and
economy which has

and

Quincy

re¬

have to continue loaning
forever,

asso¬

nations

equivalent
for
war. ^
Western Europe is the
only great :
single food deficit area in

continue

for prosperity so that

With Steiner, Rouse & Co.

raw
materials, fuel
equipment and food for workers,

ficiently

000,000 "unlendable" dollars.! It is
•only: during the year 1949-50 that
i

which

Chronicle)

;

the

Bullis

this,

markets,

peaceful

spe-

larger

of hot

industry, and that they

not' turn

conditions which

Wayne L. Doty has become

•

the

'socialism,' that they

terms

CALIF.

■

undertake

Ler- nostrums.

out the aid of

ment is

rhe

jdeed,

not

the other

Company
to

•

dog stands, they would en}
joy a high degree of
activity and 1
employment which might be a

"some

'nationalization'

terms

Wayne Doty With

our

Ob¬

they will not undertake

continue

will

Hayes in Detroit.

Botzum

much

what
before we

Mr.

that

prior

Watling,

-■

•

Europe had 1
automobiles,, .through high- r>
ways with no customs
barriers, "
modern filling
stations, and plenty '

people have
said that the terms should
include
pledges by nations who receive

Pingle has become associated with

Baker, Weeks & Harden

-x

Continuing,

Baker, Weeks & Harden
(Special to The

Europe
accora-

objectives, it

production.

"If

extend'Marshall-plan'

clarify

desirable

are

-to

agree

Robert Pingle Kow At

should

in
af¬

interest.

viously,

terms

DETROIT,

mass

i ch

w h

will

Harry A. Bullis

individual

result

these

assist .her

cialization,

"that

state of

fairs

Bullis

Company and prior, thereto
business

Europe,"

will

was

/•

to get into a
position to help herself
and thus
achieve greater
prosperity by

advances

Mr.

of the retail
for
Philipson

department

and

would

fur¬

any

states,

previously Manager

did

the

plishment

business from offices in the First
National Bank

dales

ment of persons as
well. If
would work toward

should

$2,100,000,- |the impression that

long as
a large
under

hall

ther

; UTICA, N. Y.—Richard R. Grif¬
fith is engaging in a securities

not hitherto
been ade- Second, so long as dollars are
quately realized. Yet it is a mat- 'scarce even an increase of
producter of simple arithmetic.
Even if ^on could not yield
dollars, for

whole

for

Own Inv.

First,

sition has

the

develop terms

it puts the cart before the horse:
Production cannot be raised with¬

and

used

have freedom of trade
within our
country, freedom of
opportunity,
freedom of
contract, free dissemination of
ideas, and free move-

countries would have
enough ex¬
ports, and therefore they would

quired in

all members other than

under the

"We

September 15

which does not possess
any dollars is entitled to discrimi¬
nate against the. U. S. by
diverting
its purchases to a
country where
it is able to pay, his reply was a

currency either this year or next.

This aspect of the technical
po¬

was

Conference

country

requirements, the 25% lim¬
itation rules out any
possibility of
the dollar being declared a
scarce

Press

[held in London

denial

United

are

the

could

the

disregarding Article

not

than 25% of

their quota in
any one year. This
rule prevents the effective
utiliza¬
tion of the Fund's doliar
resources,
amounting to about $3,350,000,000

;

ing its people of essential supplies

mainly aimed

Plan.

Richard

changes would have been adopted this is not practicable, it is con¬
ciated with C. A. Botzum
Co., 210
py the other delegates as a matter fronted with the choice of depriv¬
West Seventh Street.of course.
Mr. Doty in
What

ness

1950, and the chances

Britain

Bank

led to

premature

even

could

not benefit by this declaration
un¬
less and until they have
used up|
their own
dollar resources.
If
Britain has used
up
its dollars,
and is unable either to

decisions
dollars at the

any

scarce

tions* would
iness.

currency. Conversely, even if the
Fund declares
dollars a

institu¬

confine

jexist

Gov¬

currency
arise before

means that even
after all
member countries have
spent their
lqst dollars and there does not

en t ..di f f
a¬
culties. It soon
became
clear

two.

This

possibly bring
any relief, to
Britain's pres-

that the

second

scarce

unlikely
1950, if at all.

confer¬

could not

ence

is! most

existing statutes

declare^ dollars

few days that

this

a situation in
would be .justi¬

which the Fund
fied under its

the first

the

attempt may be able, to teach a
lesson in this respect to statesmen
on both sides of the Atlantic.
But

| rect to say- that•

Development
had to realize

and

willing to
dccept the American view, on con¬
vertibility. Perhaps the inevitable

because of their charter limitations.

sources

Harry A. Bullis, President of General Mills, holds no
aid under 1
plan should be granted unless Europe establishes
condition under
which self-help can operate and
establish an economy which can
i
promote prosperity. Suggests a common
money for Europe.
r "• ^

ernment appears to be

Points out, however, Fund has ample dollars which could be used
for Britain's relief.
Criticizes Secretary Snyder's
charge that shortage is in production and hot dollars.
.

(1213)

| Convertibility which might easily
$400,000,000 : in additional' losses.
In spite of this, the British Gov¬

•**•/■*>

Dr. Einzig, in commenting on London meeting of the International
Monetary Fund and World Bank, contends insufficient aid to Britain
can

FINANCIAL CHRONICLE

cost Britain k great deal more than

■
>»'»

Union Securities

Corporation

COMMERCIAL &

THE

25, 1947

Thursday, September

FINANCIAL. CHRONICLE

K
(1214)

and Its Tax

Social Secarity
v

By T. L.

EVANS* /

Co., Buffalo, N. V.

of J. N. Adam- &

VTreasurer
(f

Social Security
reviews progress of

Con-

ideal &

The stage is

dow being
pet for:: 1948,
Which will not
Only c- be
a
year of very

(2)

ex-

such as

pansi on

in
lib¬

but also

pro¬

duce

new

lic

a r

1 y

; :/•■'

■

The

T*.:

special groups
aliens and others.

such

financed
ment

tax of 1% levied upon
employer and employee.
Original Social Security Act

and

employer and employee contribution rates of, 1%
each with respect to wages in the
calendar
years
1937-1939 - andv
.iy2% each for 1940-1942, 2%-in
1943-1945, 2 y2% each in 1946-1948
and 3%

Security

and.the State,

whereby the

agements:

securities must be

registration statement
are offered or sold
and a prospectus must be supplied
to offerees and purchasers.
The
purpose of the registration state¬
ment and prospectus is to bring
out all essential facts concerning
the issuer and the1 security being
effective

dependent children $24 a
child in the family
$15 for each additional child

sold—nothing

;

-is

circumstances to

be construed as art

of the Prospectus,< ; *.

With

the issuers of
and

their

listed securi¬

B of the

Registration and: Prospectus
■

Requirements

'»

managements.

offering ofthese securities for sale, or as
tobuy, any ofsuchisecurities.
Tf_

offer to buyt oras a solicitation of an offer
The offer is made only by means

to- certain
protections in. his deal¬ quirements of Schedule
Act must be met.
ings on exchanges, with members
of exchanges, and in his relations

minimum

Cannot create national or foreign
80th
..scopie
legislation was enacted policy outside of the. limitedof the
of its powers and outside
to free the old-age and survivors
limited purposes of the legislation
insurance
tax at the „ rate l ot
Which it administers.
•
1% each to- employer-and em¬
ployee for 1948 and 1949? provid¬
j..SEC's Basic Limitation
ing at the same time, an increase
to 1V2 % to each for the years 1950 -j This Alimitationi must be ' kept
sqUarely in mind throughout your
and 1951, and further increase to
entire considerations of: the Com¬
2% for the time thereafter.
mission as a factor in any hemi¬
The same legislation extended
spheric exchange program; The

Commission,

Ordinarily Form S-l is suitable.
On the other hand, if the issuer
is a foreign government the re?

Congress-

••

Hanrahan

During the session of the

financed

Sept 8, 1947.

by the

that purpose
M.

American
is^ entitled

;

the

the major legislative de¬
The registration statement and
Within the framework of this legvelopments during the 80th Con¬
prospectus should discloser the
islation lies the permissible field
gress just closed, the following
history of the company, its: cap¬
in which the Securities and Ex¬
bills should be enumerated in this
ital structure and that of its affili?
connection:
V *
"" change Commission can act; It atesr a- description of -the securi-

in¬
entirely
survivors' in¬
ithrough payroll-tax levied upon
surance.
the employer alone, and amount
*An address by Mr. Evans be¬ ihg in most cases to 3%; 2.7% of
fore the New York State Council this is retained by the State and
©§ Merchants, Lake George, N. Y.,
0.3% is paid to the Federal Security
is

Developments

than

demanded.
The registration statement for a
foreign corporation is filed on one
of the various forms provided for

ties

Legislative

simple truth is

investor;

Among

thereafter.

surance

they

before

j This code of
regulation-

is available,
covered by an

its provisions

from

some

extent,- of the

aided.

Unemployment compensation

JMtovides: - ;■
(1) Old-Age and

Federal

provided for

This is under no

and,

month for one

■■■

present, Social

C At the

enemy

aid

ns
disability benefits and the intro¬
duction of health programs, if cer¬
tain
forces
are
successful in
gaining the necessary support of
t e.mp o r ary

Congress.

sucn

;

both the

par-

Uurance,

amounts to a fairly extensecurities exchanges, of the members who
adopted what

exchanges

Assistance programs are
by the federal Govern¬

Public

payroll

in-:

forms

.of regulation of

trade

Government matches- the predicated
The financial structure of the
ppon the\ es¬
expenditure of the State of oldsential
idea
existing old-age, and survivors',
age
assistance and aid to the
(h at
t he
insurance program is based on a
blind up to $45 a month and for

extension,

and

civilian war
_

t i o n

z a

States has

sive code

amounts needed

Rating.

assistance and

assistance to

eral i

The United

".."V-

sacrificed thereto.

protection must not be

(4) General assistance.
y, ,
(5) Temporary minor programs

;

marked

coverage,

allocates the

of credit is a worthwhile
propostion, and investors' •

only justify itself as a paying

can

for issuers of; tlie
tion.
•.
v
the
administration programs,: tc securities
(3) Public assistance, including the States.
In most States this
old-age benefits, assistance to the tkx is- reduced to employers' with graded ,, on
such
' ex¬
blind and aid to dependent chil¬
stabilized employment record
changes
and
dren.
/
\
I :
through the benefit of Experience
their man¬

sessions.

gress

compensa¬

Unemployment

obligations of foreign issuers
stock exchange rules. States (hat ;

although: free international movement

36%

coming

comply with all: &EC as well as

to.

Member,

and' Exchange

emphasizes

Commissioner Hanrahan

Committee, U, S. Chamber of Commerce
social legislation and points out tendency toward complete
federalization of program and extension of its co/erage, with consequential increasing costs. Cites
growing tax burdens on employers and public,, and foresees tax rates for social security rising to
of payrolls within next two decades*
Holds this may ultimately threaten free enterprise system.
,';> Social Security is rapidly forging its way to front position among the leading prob¬
lems within the legislation and taxation complex which faces- the country today, and it
fpHl undoubtedly advance even further and take a position of primary importance in the
Administration which, in turn, re¬
»

Social security expert

HANRAHAN*
Commission

By EDMONB M
Member Securities

cannot

Ctfmriiission

States

September 24,1947

for two years

and a two-

basic aim

investors

forsake the

of protecting
in- adjusting

American
either its

terms of the offering*
control and management of its

ties and thje
the

affairs: and the remuneration of
officers and directors,, as well

its

as
information neces?
sary tq provide the investing pub¬
lic with such data as it may re¬
quire to judge the merits of the

other

material

securitv being

offered.

securities to be sold are
debtfather than equity securities
the provisions of the Trust Inden¬
ture Act must also be considered,'
Without an exemption, an inden¬
ture covering the bonds or "notes
in^ question
must be qualified
If the

continuance of liberalized
NEW ISSUE
miles or its technique of adminis¬
grants to States for old-age assis¬
tration to any such program.
tance,- aid to dependent children
under, that Act before they are
} I bear in- mind also the neces- offered for sale.
und aid to the blind.
:
•; The
unemployment insurance sjarily preliminary nature' of this
It might be noted at this point
To the extent that a
loan fund was created in 1944, by conference.
that both the Securities Act and
Act of Congress, from surplus of policy within the framework of
Trust Indenture Act contain broad
our legislation can be reached thaf
revenue, over expenditures, de¬
A i
exemptions from their provisions.
rived from the 0:3% Federal un¬ policy must be based on an in¬ For example, if the security being
employment tax, i.e., appropria¬ formed consideration of the-many listed was sold by the issuer or
;; First Mortgage Bonds,
and
complex problem!
tions made to the States by the difficult
bona fide offered to the public
Social Security Administration for involved.' Perhaps it is dangerous
prior to July, 1933; an exemption
y
*
.
the administration of unemploy¬ in any case to attempt to formu¬
from both Acts would be avail¬
ment insurance program
is con¬ late broad policy in advance ol able. And, ordinarily, if the se?
i^lated August 1, 1947
■ 1
siderably
l ess: than. < revenue the specific consideration of par¬ curity was offered to the public
\
v
: ■ ■
. '
received. As a matter of fact, th4 ticular problems necessary to im¬ more than one year prior to list-'
In this case ing, it may be freely traded by
Price 101.229% and accrued interest
annual surplus from this source is plement that policy.
occurring at the rate of $150,0001,4 II feel assured, that it is the better brokers, dealers and their cus¬
000 at the present high peak o| part of. wisdom for the Commis¬
tomers.
employment, and the total excess sion to wait unt 1 more detailed
!
If the registration statement is
Copies of the Prospectus may be obtained from any of the several underhas now reached approximately information is available and until'
uriters only in States in which such underwriters are- qualified to att as
complete and accurate and no prethe background has been laid for
$800,000,000 since the inception of
dealers in securities and in which such Prospectus may legally be distributed.
effectlve amendments are neces¬
the program.
j < a* discussion ofr particular prob¬ sary, it may become effective on
States may borrow from
this lems.
t;
I \
the 20th day after filing, or,the
fund only in the event that theji
The First Boston Corporation " v
~ "
;{•
Foreigners Must Comply f- ; Commission may/ under appro¬
employment insurance funds have
priate
circumstances, accelerate
Glore, Forgan & Co.
- Kidder, Peabody & Co.
[ As most of you are probably
become depleted, as a result; df
Eastman, Dillon & Co.
the effective date.
extraordinary heavy withdrawals aware, a foreign issuer; proposing
Merrill Lynch, Pierce, Fenner & Beane
I Lazard Freres & Co.
through severe unemployment to register its securities on an ex¬
Stock Exchange Rules Enter
Stone & Webster Securities Corporation
conditions, or caused through 'si change in the United States, musi
When the requirements of the
Salomon Bros. & Huizler
be fully "apprised
of arid com¬
further liberalization of - benefits;
Securities- Act and1 the1 Trust In¬
which is constantly encouraged by pletely comply with, not only the
denture Act have been met, or it
ff S. Moseley & Co. Phelps, Fenn & Co. Shields. ^Company •' j
C •
4.. — v
... v (Incorporated) u. , .
the present administration.
' requirements of the exchange has been determined that an ex¬
upon which: the securities are tc
Other bills passed:
•
jVucker, Anthony & Co.
R. W. Pressprich & Co.
j j be
emption is available, the rules of
I'll
traded; but also the applicable
Graham^ Parsons. SI Co.
Cooley & Company
(1) Continued authority of securities laws of this country, the Exchange may then be con¬
American Securities Corporation
sidered.
In- this connection,; let
States to ignore income- from agri^
it <
namely, ther Securities Act of 1933,
Francis I. duPont & Co.
me point out that; in: the sale of
ifitroud & Company r : * ... - FrancisI. duPont & Co. ...
R.S. Dickson &
culture or nursing in determining
J.'(Incorporated'"
"•
t ,
, . Incorporated
■ *> payments of old-age assistance the Securities Exchange Act of securities registered under the
1934 and the Trust Indenture Act
Lioore, Leonard & Lynch
Singer, Deane & Scribner
Auchincloss, Parker
(S-1072).
jj of 1939, all of which are adminis¬ Securities Act or qualified under
■H » I
-- "
.
the Trust Indenture- Act, it is nec¬
(2) Technical amendment ex¬ tered by the Commission. .
11. F. Boynton & Co., Inc.
R. L. Day & Co.
Folger, Nolan
essary
that offerees and actual
tending time for voluntary unem¬
j:
■
'
;
• ■ 1■ ■ ^
■
purchasers be •'* provided with. a
ployment compensation contribU-r f 1933; Law df Prior Importance .
j It. Ml Newton & Company
F. S.
prospectus or an analysis of the
tions (individual employer reserve
; The Securities Act of-1933 must
! Kay, Richards & Co.
Laird, Bissell & Meeds Starkweather. & Co. Stein Bros.
accounts) (H. R. 4011).
'.{•! be given primary consideration indenture provisions as the case
may be.
1y
•
•'
- v-'
(39 The Senate Finance Con)-J In the absence of compliance with
Thomas & Company
Almstedt Brothers
Geo. G. Applegate
Boettcher and Company
At this juncture bear in mind
mittee, very significantly was au¬ its requirements, securities can¬
| '
5
. '
...
...
.....
...
thorized to make a study of the not be publicly offered or sold in that the exchanges in this country
Bosworth, Sullivan & Company
Chaplin & Company
C. C. Collings and Company,
Fauset, Steele & Co.
Social Security system under Sen¬ this country by any issuer, under¬ db noh *n general, provide facili¬
Courts & Co.
' S. K. Cunningham &' Co., Inc.
ate Resolution 141, and granted an writer or dealer.
This Act is, in ties for the initial distribution of
year

Series due August 1,

(Interest Rate

•ft.

ZH%)

1977-

; ;- :
Due August 1, 1977

;

-...

Harris, HaU A Company
The Wisconsin Company

Company
& Redpath

„

Incorporated

Julien Collins & Company

Smithers & Co.

& Boyce

Inc.

■

Kirkpatrick-Pettis Company

first California Company

New York

Minsch, Monell & Co.
'

•"

H. C. Wainwright & Co.
.1'

„

Sheridan, Bdgan Co.

Ballou, Adams & Company
*

Hanseatic Corporation

Phillips, Schmertz

& Co.

McJunkin, Patton & Co.

Schmidt, Poole & Co.
Webster & Gibson

Richardson & Clark

appropriations of $25,special study is in¬
tended. to produce
information
that will assist the Senate in the
consideration cf future Social Se¬

granted an
000.

^This

curity developments.
scheduled for the next

Proposals
Congress in

Incorporated

(Continued on page

32)

essence, a

disclosure statute which
unless an exemption

requires that,
*An

before

address by

First

Exchange1
1947,

Mr.

Hanrahan

Hemispheric Stock

Conference,

Sept, 18,

either foreign or-

domestic issues,.

commonly per¬
investment banker
or
banking syndicate.
It is only
after a sufficiently wide distribu¬
tion
is ; attained in the United

This

function

formed by an

(Continued on" page

29)

Volume

Number- 4632

THE

COMMERCIAL

& FINANCIAL

CHRONICLE

(1215)

By EDWARD? C. WERLE*

By WARREN F. SARLE*

Chairman, Board of Governors, NewYork Curb Exchange

Vice-President, The Northern Trust Company, Chicago

Mr. WerJe describes
machinery
Curb Exchange as

for executing orders on New York
developed since trading; was removed indoors.
Explains work of the Floor Specialist and supervision, of floor trading by the Exchange. Points out present system provides assurance
orders

are

executed in compliance with

Twenty-six- years

ago

rules of Exchange. 7
j
when the hearty, and weather-beaten group

It is

■

•

street in to..
this
f i n e

they

•

ta the

...

•

curities.

customer.

the.
securitiesworld.

minutes.

trading

floor

While

•

i t tees

comm

the genera 1

pattern, of the
old

e r.

ex¬

changes,
'a

they

d. d ed

to- start

Edward

"number of ihr

say,

name

yield

and

S16.00Q

when- it is not.

broad

invest-.

■;

ment groups.
True, during

;

1932 and early

because

skipping up to the $50,000 to $60,f

these

bad

most

banks

bonds

may

Furthermore such

Illinois

and

othe£

under j
Income.

not be high

may

certainly pripedf depending

if the voter cap
be'expected to remedy the situat¬
ion.

Likewise

corporations as well, these Illinelj

must be-exposed

1933 preceding
the bank mor-

bracket the government

investors ; State
are cheap,
*

bonds

For

the

bracket

would have to yield 3,13%, to pro-*
duce .90% income after taxes. .To

practical purposes
-due of all the
this, publicity has its advantages
*

from $14,000 to
1.-33%, an4

1.52%;

tax

00a tax

good

tere&b

"limited order."
ijf
this order is limited as to price,
the commission broker
proceeds
we

another

over.

Good'

securi¬

ment

under

Sec-.] again

political behavior like
human behavior in most
ties, they have walks of life goes unpublicized
the best rec¬ whether the
community be large
ord: for pay-, or small; Political
irregularity in
ment of prin-.
a large
city is news throughout
cipaL and in-, the nation; in a small community

■

aip coyers. orders only at th
market, i.e., the prevailing bid 0
offer.
Many ;customers desire 1
enter orders to buy below or se„
higher than- the current market oi,

followed

only

U. S-. Govern-

;
"'••• »■.7 :
What I- have endeavored to ex

their planning ;

had.

"ond;

sounds

upon

the most mod- ;
ern

This probably
involved1, but we
hav^
found that in many cases,
eve^i
though the order- originatesthoujsands of miles away, the entire
operation takes but a matter of

•walked'

pleasure to be given the opportunity to discuss state and municipal bonds ad
York Curb Market Association came
media for the investment of bank funds. I have always been partial to them, primarily, \t
..—'7
i;
clerks who call the member-firm
suppose, because' of their enviable safety record over the years as compared with othe#
:
types' of se- <&
——
:
"k
[office and from there ft is reported
to

of Traders known
as the New
from
the
".V."7 7"'".

building

In analyzing investment position of municipal bonds, particularly for banks, Mr. Sarle gives data re¬
garding relative yield and security of tax-exempt municipal issues compared with taxable bonds* Holds
municipals are not over-priced: and current prices do not always properly reflect difference in invest¬
ment quality., Points out investment factors in revenue bonds, and
lays down basis for bank purchases
of municipals.
7-'
'7 ■ 7 •' ]7..;'•••••
V-V; ■■ 1
'
». ■ ■ :.

Corporation

the

•

statu#
Federat

upon, tax

Law.;

For a largd"
taxable income ex*
ceeding $50,000. and thus paying A
Tax

bank having a

informaj-

tion. is of value to investors, Asjtute politicians desiring funds to combined normal and surtax raiai
atorium when. spend; and investors in, the bonds? of 38%,-net after taxes on the gov¬
speedily informed
n the- stock
which, of .course, i!s,
government 3s. and ^s. sold- at of
in the handling of" their securities the
their municipalities, desiring; ernments would be about .90%*
prevailing bid and offer.
Hp
orders. It was most
important fbr then, uses his judgment as to the substantial discounts, the market principal and: interest payments; the same as the Illinois, bonds*
for municipal- was also affected.. when
the broker- in the street to be in nncoiKiltfmo nf, fhc
due should, have,, at least,,, Here the governments are prefer¬
possibilities of the market reach-'
During that severe depression pe- one
sight, of his telephone clerk at all
common « interest
namely, able because no bonds rank in
mg the Price designated - on
times. The brokers Wore varied;
hig '-riod many industrial corporations,, preservation, of a high, credit rat¬ quality so high as our govern-*
order-in
*?}f Judgment,, such railroads, public utility companies, ing. This mutual interest has been, ments. For a. smaller bank with
eoloi*e& and distinctive hats and
a possibility will not- come
about and real estate?
coats
enterprises .went evidenced, over the years when taxable income falling between
and devised a system of
n a reasonable
time,, he will give int0
bankruptcy causing extensive, the credit positions- of some of $23,000'and' $50,000 and paying'^
[communication. by hand signals. the order to tne
specialist in the defaults in the
:
payment of both ourr states, and cities- have for one combined rate of 53% on this por ¬
.These signals were speedy and:
stock.; Such orders are timed and principal and interest, on their.' reason or another been threatened. tion, the five-year government#
efficient
and
the
system, was kept in sequence to, be executed
;bonds.. As we. well know, many of,
1 brought indoors. Our
would have to yield about 1.90%f
booths, where as the market reaches the
pricejs these companies failed to emerge,
t
our telephone clerks are
to net- .90% after taxes. For theno
Are Municipals High Priced.?
located, entered.
Lim.ted orders, are
under
their- original names,
:
are arranged in tiers
or
the Illinois bonds are> cheap.
in somewhat placed
for different periods of
emerge at all for that, matter;, thus
During the past few, years,, es¬ banks with taxable incomes 0$
.the style of an ampitheater or
time,
goodi for a day and good causing; widespread loss among in- pecially while Federal taxes on less than $25,000 for which cohi
; £ircus. The
trading posts for our until cancelled. •
|
vestors holding their bonds. State corporate and, individual incomes, biined normal and surtax rates, cto
stocks are on the open floor and! and municipal bonds fared much have- been at unprecedented high not exceed 23% the government#
are
in * sight
of the
telephone
The Floor Specialists
;
booths. The broker after: receiving
j better however.; Municipalities, of levels, we often hear it said that; are a better purchase because at
The specialists on our floor are any national consequence, afe least, municipals are- too- high priced. least 1.10% would remain aftdy
an order can proceed to the
proper
Like
many
general - statements} taxes,
/ ■ %••'••-*
■
. :-f '
;
post and can-, then signal back to regular members of. the- Exchange survived this period with, npth^pg
twho, register as, specialists in des^ UJoredthan a temporary-delay her£ this one is meaningless unless we
his clerk either the
execution of,
define the word high rather preReasons for Price Rise
i
or present
'gnated securities.
Their primary; ;and: there, .in debt service}
quotation and

novations of
the public more

own

keep

the

post and

asks

the

Warren- F. Sarle

market,

standing

bf, his order.
;

For

■

reasons

clarity,

I am
going to attempt to- trace the path
; of a market order to buy or sell
.

;
-

function is. to maintain

^re,.at

the

Curb security from, the time thie

member-firms

have

direcjt

telephone communication to th,e
trading floor from, their respec¬

tive
:

offices.

phone

The

clerk

member's
the

deceiving this order,

floor,

telqupon

uses our an-

nunciator board to call his broker

;
"

will

sale and

the current bid and asked.

price' bid-

„

offeifed-

meets his customer's

:
;

If the

such"

direction,, he

will

buy from or sell to. another
member at the post who is himself acting as agent for a member
«of

the

public.
This is accom¬
plished by the following simple
7 procedure:
The
buying broker
merely says "take it" or selling,
.

■

broker

"sold."

Each

them

.gives to the other the name of h's
firm, who will later complete this

transaction..
;

assume

WUV.

UWVM.J. J

The selling broker is

required to- report such' transaqlions

VJ ♦

that the market

f'»

ist executes it.
trade

...

employee of the Ex

true

that

municipals are

to, the

Ill

reports such

com miss'on

•

"odd

lots."

vestors

-brackets-

(1) Income tax rates have been
materially increased thus enharcthe value of their tax exempt

■

surtax

Federal income

exceeding $12,000- annur

ja
This
a

unit

of record only.

not

constitute

offering

but

appears

The offering is made only by the Prospectus.

of
NEW

our

does

matter

September 18,

ISSUE

1947

Stock Transaction^.

Committee

sideration

municipals have risen- in price to
greater extent than governments
for several reasons in particular:

appear-

broker

The

determined

Illinois bonds certatiply
ridiculously high priced
However, among individual' in¬

State

if to- his cus¬
tomer.. ' The spec'alist al^n ante a?

trading
is
Committee

the uninitiated in bonds, and taxes,

who will then renort

The

ally, we find quite a different status.
■
7...
opmion. To obtain a yield after
7 (?} The supply, especially diir^
taxes, amounting to
.90%. in the
Bank, Minneapolis, Minn., Sept. 19, $12,000 to $14,000 tax bracket the ing the war years, diminished ma(Continued on page 35)
; ;
five-year governments would have
11947-

drop's

rises, to the limit placed on ou|r
ri4ttrliinlv
order., at which rvAj'nf hlon cnnninlL
ooint the special¬

takes

into

such factors

con¬

100,000 Shares

distri¬

bution, amount of stock outstan cl¬
ing in the hands of the public, the

price of the security and the ac¬
tivity of the security in any other
market

before listing.. Odd. lots
executed automatically by thie
specialist at a price- differential
are

away from- the- full unit sale...

An
example
of
this:
A
customer
places an. order to buy 30 shares
of

stock

in .which

the .unit

trading is 100 shares at,the
'

ket.

«•

....

immediately the previous

■

V*.

The broker proceeds
to the post where the stock is
allpcated for trading.
He ascertains; called

■

Five year State of Illinois, bonds

are

order is

dealer in all orders for les^. than
the unit of trading.
These are

to the booth.
*

deposit for this purpose. When;

placed for the publijc credit position: the? residents
a
customer of one of our memn with them, they accept the agency :that community must live with it
from the commission broker.
bers.
The customer visits a
If and pay higher rates when bormemiber-firm office or communicates : orders to buy or sell are scarce
rowing
funds.
It
cannot
go
by letter, telephone or telegraph. they are expected to sten into the
Upon receipt of such an order, if breach and b .d for or offer to self through bankruptcy and. be born.
i§ .transmitted, by! a partner or emn stock at reasonable- prices.
Thiis
*An address, by Mr. Sarle at the
ployee of the member-firm to the ^events too great a. rise or fall in
+he JJA AV-V
price of, the security.
W'e Forum of the Federal Reserve
trading floor of our Exchange.

thought originates in, the mind of

7 All.
:

cases it was largely-due
banks holding funds on

to closed

selling at higher prices today than
currently selling to yield .90%
they were ten years ago; . Thrl?i
the samc timc};subragente -municipality suffers a decline in taxable U: S; Governments of Hhe likewise is true of United Statqn
public inasmuch, as when
same term yield about 1,40%, To
.7
Government securities, However,

andj ift

^ese few

a fair and
orderlv market at all times in. the
securities they specialism. .They

Capital Stock

(Par Value $10 Per Share)

cjf

mar¬

■'|

•

The first sale of such stock after
receipt: of this order by the.' spe¬
j

changg.

This- "reporter,"

Called,
Which

writes
is

h.e is

memorandum

dispatched

through

our

pneumatic tube system to the-cen¬
tral ticker desk where it is timed

printed
the

and

relayed

country by

our

cialist

throughout

ticker system.

the cost of.

telephone

City,

the holders of its

Giore, Forgan & Co.

cer¬

Harriman

address by

Sept.

17,

1947.

7.7

(Continued

page

45)

were

offered by the Company at $40 per share to
each five shares held by them.

purchased

•

barely covers
changing full lot
,

such shares

Capital Stock in the ratio of one share for

Subscription warrants covering 94,738 shares were exercised, and 5,262 shares were
by the Underwriters severally and have been sold.

differential

tificates into the desired smaller
Mr. Werle be¬
In the case of a limited
fore the First Hemispheric Stock amounts.
Exchange Conference, New York odd-lot order the specialist re;,*An

*As described in the Prospectus,

The-

lly:; sell-

required to buy from., the., selling
customer the shares,at 19%. This
orice

their

20;

stock at 20 V« or, in the case of ah
order to sell such shares, at the
market, the. specialist, would- b,e

transactions

•

au tomatica

The brokers, in turn, report their
•'

specialist
to. th e
buying customer 30 shares of such

must,

Ripley & Co.

Incorporated
_

William Blair & Company

Bacon, Whipple & Co.

Harris, (Incorporated^,
Hall & Company
.

■

THE

(1216)

COMMERCIAL.& FINANCIAL

Thursday, SsptGmber 25,

CHRONICLE

1947

/•ih*.

Security Triist Co. and the Fidelity Trust Co. He-was active in
promoting the Organization of the
Bankers Trust in 1924, serving as
Treasurer
during its formatioh
and becoming its first Secretary
and a trustee.
Subsequently he

News About Banks
CONSOLIDATIONS
NEW BRANCHES

and

NEW OFFICERS, ETC.
REVISED

Study by Scudder, Stevens and Clark shows average yield on in¬
college funds is 4% compared with 2.93% earned by insur¬
ance
companies. Ascribes higher yield to larger investment in
equities.

of the Bankers

became President

CAPITALIZATIONS

Exceeds That ol Insuiance
vested

Trust, which in 1933 was consoli¬
dated with the Hartford National
Co.

Trust

Bank

became

promotion of George L. continue her duties as Secretary President of the Security Trust
Co. in 1926, and when it associated
Kelley from Assistant yice-Presi- of the company.
*
-t
si:
with the Hartford-Aetna National
tdeht to Treasurer of the North
Bank on May 21, 1927, becoming
Side Savings Bank of New York,
Raymond A. Lander, President,
—- -—„
,
at
3230
Third Ave.,
was
an- of the Vogt Manufacturing Co.,'the
Hartford National Bank &
The

The

average

universities
and

mutual

cording

on endowment funds of American
one-third greater than on the invest¬
companies
banks, ac¬ almost in half. Utility and indus¬

rate of return

and'colleges is

of life insurance

ments

savings
a

trial risk bonds were

endow¬

survey

over

sharply re¬

Trust Co., he was named Presiment funds aggregating; approxi¬ duced, but holdings of railroad
elected on Sept. 16 to the board of | dent.
mately $1,300,000,000 completed by risk bonds were moderately in¬
directors
of
the
Central
Trust
In 1932 he was chosen by PresiScudder, Stevens & Clark, invest¬ creased. Industrial risk preferred
Company of Rochester, N. Y., the dent Hoover to advise the Reconment counsel. The study, believed stocks increased
substantially.
"Times-Union of that City re- struction Finance Corporation in
to be the most comprehensive of Real estate mortgage proportions
ported on Sept. 16 at the same assisting Connecticut banks, and
its kind ever undertaken, covers declined by two-thirds, while in¬
time it was added that Mr. Lander was active on the Committee on
Borrowing
of the 77% of the total of the endow¬ vestment in real estate equities
succeeds the late Albert E. Vogt, Government
Dwight R. Chamberlain were,

and

of the board; American
the- bank.
Mr., His 68th
Chamberlain has been Executive Sept. 11/

who

charge of investments.

1934 in

si!

G. Clarabut was the
recipient of congratulations at the
George

George L. Kelley

Farmers'

ounced

Fred
Bferry, President. Mr. Kelley has

Sept.

J been in the banking field for 30
*

years. Since 1945, he has been

I charge of mortgage investments
*

North

Side.

graduate

of New York University's School

| oL Finance and the American In¬
stitute of Banking.

Co.

Trust

Bank' &

National

Rome,

Sept.
of his

12
65

celebration

began his

with

association

messenger

Sentinel"

bank

the

"Daily

The

1882.

directors and in

ad¬

Chairman

Assistant

formerly

* a

Guaranty

Treasurer., He

Auditor.

was

■;:

Trust

Company

C.New York announced

4 the

appointment

Irving

r
-

Scott

Hartford

work

the

Sept. 19
Walter H.

the

Carl

Board.

Manager at the maift office.
f

Baxter

-i?

■%

t' ,'*'<■

■

Jackson,"

Newell, President of

died
a

Bank

National

Co. of Hartford,

Trust

Conn, since 1927,

Sept. 15.

Mr. Newell

was

ell, who had been Secretary of the
Mr. R.

Aetna Life Insurance Co.

1903

^ In

transferred

the

years,

going in

1907 to the

State
He became Vice-

Savings Bank.
Beposit Company of New York, President of the Fidelity Trust Co.
f announces that Miss Frances M. in 1917 and then Vice-President
I Boos, formerly Secretary and As- of the United States Security Trust
ShStant

Treasurer

has

been

f pointed Vice-President.

ap-

sion.

Lillie

Mr.

bank

joined the State
runner, and said the
he
won
promotions

"Courant,"
throuugh the junior officer list,
beginning as Assistant Cashier in
became

1908.

Cashier

Vice-President

and

when

1926

Phoenix

the

1914

1920/

State

Bank

and

was

consolidated

I Co., formed through the

She will of

& Trust Co. in
Broadhurst

the

United

States

merger

Bank,

January, 1944. Mr.
Chairman

Board of the State Bank

the

& Trust

Co.

of the late William H. New¬

son

of the Board of the Chemical Safe

dency of the Phoenix State Bank
B.

State Bank, where he served four

Chairman

Club

say:

Credit

their

foreign branch office supervision, B. Newell joined the Phoenix Na¬
Mr. Zulch has been associated tional Bank in 1902, the Hartford
with the company for 30 years,
"Daily Courant" reports, and it
and since 1930 has been Assistant
went on to

iM",

named a Vice-President, becoming
then Vice-President, was First Vice-President in January,
named
as
his Accessor, jn thq; 1&38.
Mr., Lillie succeeded Mr.
Presidency/
4 *\
V
Leon P. Broadhurst in the Presi¬
Robert

Zuleh as an Assistant Manager of
/the Foreign Department, in which
capacity
he
succeeds
the
late

Lillie

Simon,

Mr.

dinner at the Hartford
Monday evening Sept. 8.
recognition of his long service

guest at
In

had

bank

Mr. Lillie was presented with a
reports that
sterling silver service tray, suit¬
Chairman of the
ably engraved to mark the occa¬

he has served as

members of the executive staff of

Dwight L. Chamberlain, Presi¬
dent

the

& Trust

Conn,

First

National

Bank

Company of New Haven.

announces

that, because of

the expansion of activities in the
Trust

Department: of

arrangements

whereby
New

Haven

will

bank:

been

have

Donald

the

made

Bradley

become

asso¬

ciated with the Trust Department
of the bank, effective Sept.
22;
the New
ter"

Haven

"Evening Regis¬
reported this in its Sept.: 17

issue.

the

(Continued

page 3-1)

study

that

tripled

the

these

years

almost

was

well maintained.

high-grade
securities*
during railroad and industrial bonds were
and utility
institu¬ all but eliminated

reveals

past 15

tions

Among

bonds were reduced

propor-

tion held in

Thus,

reduced

creased

preferred stocks, and
sharply their holdings of

risk bonds

real

and

mort¬

estate

book

1931

declined

value

ferred stock

from

portions of these en¬

stantially

funds, it was being sub¬

reduced
in the - real
and risk corpo¬

in 1946, while the

estate

mortgage

earned by life in¬ rate bond portions, while highcompanies and mutual grade funds were being heavily
savings banks declined from about transferred from corporate to gov¬
rate

average
surance

significance

and

the

this

com¬

the study points out,

parison, as
lies

ernment securities.

2.93%.

The

fact

colleges

are

that

universities

generally free from

legal restrictions on their invest¬
rarely have to provide

ments and
for

the study con¬
cludes, "universities and colleges
held more than one-half of their
funds invested in the securities of
American corporations, while life
insurance companies held less than
one-fourth of their funds so in"In

general,"

convertibility of in¬
and
savings banks held
into- cash, whereas vested
insurance companies and savings barely" one-sixteenth so invested.
banks are heavily restricted by Thus, the growth and prosperity
law, have
different investment of American industry is of great'
objectives and to a certain extent benefit and importance to univer¬
sities and colleges and the 194S
must be prepared to convert a

quick

funds

vested

cash
of

meet

into

investments

their

parL of

liabilities.

Because

large measure of freedom

the

of American industry

prosperity
was

reflected

substantial

books

their

lar£e

and

income

educational institu¬ appreciation in the market value
study comments, their of their securities. Common stock¬
holdings alone showed an excess
investment policies are worthy O-'
examination by other classes of of market value over book value
of $115,000,000 in 1946, or about \
long-term investors.
by

enjoyed

tions, the

these

1946

universities

and

35%

37 %
their funds in high-grade senior

colleges held on the average
of

securities

19%

value

book

stock; 30%
and 13%% in
estate mortgages real estate
preferred

and

bonds

in common stocks,
real

Now

grade and' second grade

medium

and miscellaneous assets.

At mar¬

value, common stock

With Fred W. Fairman
CHICAGO, ILL —Fred W. Fair& Co., 208 South La Salle

frian

holdings

ket

Street,
bers

•

mem¬

the

averaged 35 V2 % of the whole.

Chicago Stock

High-grade senior holdings were
invested largely in U. S. Govern¬

Exchange, an¬

with moderate hold¬

Eldridge Rob¬
inson, former¬

ment bonds,

nounce

of high-grade utility bonds
small holdings of high-

ings

neithefpn ojjer to sell nor a solicitation oj ojjers to buy any oj these securities\
The bjjering is ftiade only by the Prospectus.v*
''

being in¬

in the common and pre¬

dowment

The average rate of return

gages.

risk was

while

and very
'. Tins announce-m^nlis

sharply. The

tipn of their funds held in com¬ proportion of U. S. Government
mon stocks, increased the propor¬
bonds rose from 2!/2%
to 27%.

Rome

visory capacity for 13 years. After
$,
: Milton E. Miller, who started serving as Cashier and later as
With Fulton
Trust Company
of Vice-President, Mr. Clarabut was
V New York
as
a
messenger, has named to the Presidency in 1923
been
appointed Assistant Trust following the death of Edward
V Officer by the board of directors Comstock.
x of that institution. Mr. Miller preOn May 1, 1934, Mr. Clarabut
r
viously was Mortgage Clerk for
resigned as President to become
i Fulton. Directors also appointed
tion

in the banking field. Ac¬
cording to the Hartford "Daily
Courant" of Sept. 10 directors and

Mr. Clarabut who

79 years of age

now

re¬

the occasion of his 50th anni¬

of continuous service with the

colleges.
the

extended

versary

the

were

Trust Company of Hartford, Conn,

years

the institution.

cently to Charles A. Lillie, Presi¬

with

board

^.Bernard A.. Kennedy to the posi¬

Felicitations

ment funds of all universities and

The
$

dent of the Phoenix State Bank &

V
$

since

1945. He came to the Central Trust

occurred

birthday

Vice-President of the bank

Association

Bankers

Chairman

was

directors

that

ly with George

grade railroad, industrial, foreign
and municipal bonds and of high-

K. Baum & Co,
/of

Kansas

stocks:J < High-'
City, Missouri*grade bond holdings were largely
.;is riow assoof long maturity. More than halt
ciated / with
of the investments in senior risk
their
trading
securities were in risk preferred
department
stocks and slightly less than halt
and will han¬
in risk bonds, of which the largest
dle a general
Eldridge Robinson
subdivision was railroad bonds.
line of indusTwo-thirds of common stock hold¬
'
trials and
ings werq industrials. Holdings of utilities! Mr; Robinson? was for¬
real estate equities were substan¬ merly
with
Lamson
Brothers,
tially larger than holdings of real Chicago, having left in 1937< to; be¬
gfade •'' preferred

■

123,246 Shares

Electric

Common Stock
(Par Value $1.)

estate

mortgages.

Sharp deviations

shown by several

age are

Price $5 per

sities

colleges.

univer¬

Thus,

the

associated with

come

Baum

Co.

George iK.

charge of their*

trading department. He also, was
President of the .Bond

former

72% in
.5
the gen¬ Of King Merritt in
average, and
a third held Los
Angeles
in real estate mortgages and
LOS ANGELES, CALIF.—Ray¬
estate, more than five times mond H. Mcintosh will be in

other

institution, held

common

eral
r
..

70%
real

Herrick, Waddell & Co., Inc.

and

holdings
of one institution in Traders Club in Kansas City.v m.
high-grade senior securities ag¬
gregated 81 % % of its funds. An¬ Mcintosh to Manage; Office

■Copies oj the Prospectus may be obtained within any State
from t ie undersigned only by persons to whom the under¬
signed tm y regularly distribute the Prospectus in such State.

September 25, 1947.

from the aver¬

stock, over twice,

the average

percentage.

charge of the Los Angeles

During the 15 years under re¬
view, the almost' three-fold in¬
crease
in
common
stocks was
largely in the shares of

industrial

office

Merritt &
Co., Inc.,
Chamber of Commerce Building.
Mr.
Mcintosh joindd the firm's

King

staff

sorpe;

monthsmonths-

ago.
ago.

Prior

companies, while the proportion thereto he was with Geo. H. Grant
held in railroad* stocks was .cut & Co, and Investors Syndicate.
,

h. ■'

■

rij

Volume 166

■

Number. 4632

THE. COMMERCIAL & FINANCIAL
-,tVj JJTrrH

TRONICLE

unworried

nor

by all the prob¬ 807,000 on
Sept. 1, a new all time
country,
But, high,
...r>,;,difference be? y National
Notes No. 425, issued
tween 'fear' and 'caution.'
Rea¬ by National
Securities & Research
sonable caution
lems

facing

there

this

Chamber of
Commerce.

author

vast

recommend

strongly—fear is. something to be
avoided, because it interferes with
the exercise of good
judgment and
it makes for inaction
rather than
action."

Corporation,
Obtain

titled

'Rebate'

"How

He is the
articles! on

numerous

economics,

international

finance,;

trade and taxation and of
various*
special studies undertaken
for the
Chase National

Two-Thirds

Bank.
;
r
Money You Spend." ••
In addition to
serving as the
Distributors Group believes
Royal
Bank's
that "heavy" or
economist,
Dr.
"capital goods" Marsh also is
attached to the De¬
industries
of the

offer the greatest val¬
dollar of market
price, in¬

partment of Economics and
Politfe-*
cal Science at McGill
cluding
Universityagricultural, - electrical as Professor of
John Kalb, the senior
Economics. He is
partner of equipment, industrial
machinery, the - author of "Taxes
Kalb, Voorhis & Co. has recently railroad
Without
equipment,
steel,
and Tears,"
prepared a comprehensive review
published in
The Evolution of Investment Funds

of investment

part

and

growth

born

automobile.

funds, and writes in
development

provide

vestors

with

They

the

were

smaller

copper.

in¬

diversification

The

and

Boston

management.
essential

Their place became
the private industrial

ate

fact

smaller

remains

requiring an outlet
hardly any choice
Government

that

investor

desiring

for funds
other

Bond

trusts

have
of

For

regulation..
has

the

under

The

benefit
the

control

investor
of

disclosure
25

and

since

years

terprises.

tXA$>' a
hetter
funds

result

of this

established
now

are

pro¬

open

end

merchandise
to

small

has,

which

se¬

believe,

can

investor in good

Group Securities, inc

and

ex-

■ment. Dr

«\n c e
the l^alm

economics

and

on request
or

Distributors Group, Incorporated
63 Wall

political

Street, New York'5, N. Y.

science.

Concur¬

rently,
Marsh

Dr.

ha?

been

employed

tax

re-

and

Dr. Donald B. Marsh
-

has

prepared

various

specialized
private business

for

memoranda

groups.
Since January, 1945, he
has been associated with the De¬

offer
con¬

partment of

Financial and Busi¬
Research of the Chase Na¬
tional Bank and
recently acted as

Notes:

Long's

prospectus

from your investment dealer

ness

■

aca-

im¬

science."

Hugh

taug^fe

Columbia
Graduate

p e r i

investment
an

e m

practical

j , '
evolution

age.

their

the

new

position

in¬

portant place in a small investor's
portfolio. They have come of

curity salesman

bring-*

his

wide

prac¬

the

entitled to

College,

announce-

Marsh

Ex¬

dustry was born, managements of
investment funds have
developed
a sense of
responsibility somewhat
akin to the
public viewpoint of
many of our large industrial en¬
-

"Manhattan.

Bond Fund" reports assets of
$26,-

Prospectus
your

Rapporteur for the Committee or
Capital, United States

Associates

the

International

'■

'•

"•>

-.v

■■«

•

upon

request

investment dealer,

from,
from

NATIONAL

the Flow of

SECURITIES 4
RESEARCH CORPORATION
120

broadway, new

york 5,n.y.

....

Union Bond
1

Fund C

Prospectus

upon request

OF INVESTMENT COMPANIES

INCORPORATED

Chicago

—

Funds

Los Angeles

Certificates of
Participation in

investment funds

SHARES OF CAPITAL STOCK OF

investing tlieir capital
in

;

bonds
(Series B1-B2-B3-B4)

preferred stocks
(Series K.1-K2)

common stocks
(Series S1-S2-S3-S4)

Prospectus from
your

Prospectus
HUGH W. LONG & CO
iNcofoi
46
LGS

WALL

STREET

ANC»?IS S

a i r o

NHW

YOSK

your

THE
5, N

C.MA ~P

anct
UnW

BOND

Canada, according

d
the

the

today

tices.
"In

from

RAILROAD

appointed economist for The
Royal Bank of

rigid controls

Securities ' and

full

Economics

Investments

Royal Bank

and

change Act which has helped
mote

and

Important," pub¬ School.

Dr. Donald B. Marsh
has been

years—resulting in the equiva¬
broad public

Barnard

University

Dr. Marsh Economist

gone

'Robber

Baron' abuses.
They accomplished
in five years between
1924 and
1929 what took rails and
utilities
30
lent of

Science

be obtained froni

may

local investment dealer,

PARKER

;

Tke

local investment dealer

Keystone Company
of Boston

CORPORATION

ONE COURT STREET. BOSTON 8, MASS.<

;

50
,

Congress Street

Boston 9, M.assachusetts

University?

Others—older forms
investments—are hardly open

"Investment

issue

Selected

State

Degree*

versity of Illinois.
Since receive
the Key¬ ing his Doctorate he has

and future
prospects.

for him.

through their " period

Ph.D.

an
interesting review, of de¬
velopments during the past
year

secur¬

ities market.
of

Masters

Louisiana

Political

"These

his

elabor¬

holds

Company of Chicago, is devoted

has

than

the

9
Seemed

lished

today

from

describing

Sept.

1945, and i&:
writing a book

engaged

international economics,

and

Company

published

Things

corporate form.

"The

has

booklet

The

-Keystone

stone organization.

wealth of this
country manifested
itself in public

the

now

Sept. 15 issue of "Per¬
spective," issued by Calvin Bul¬
lock, discusses the outlook for

investment funds

accident.

The

follows: "The

mere

ues per

1941'

Thursday, September 25,

CHRONICLE

COMMERCIAL & FINANCIAL

THE

(1218)

m
Says it is

amendment by removal of non-communist affidavit requirement and
restrictions. Ur*es firm attitude against Russia. In address at

good law, but needs

elimination of freedom of the press

By HARRY W. BESSE*

/'Save Food" plan. . \
Speaking at a meeting of the New Hampshire Press Association at Hempton Beach,
IN. H., on Sept. 19, Harold E. Stassen, former Governor of Minnesota and candidate for the
[Republican nomination for President, upheld the Taft-Hartley Act hut proposed two amend¬
Springfield, Mass., he proposes

ments, which,'»>-

—-

- :

-—

r' '

:not be

quirement shall be

freedom.

."As
k
;

n o

w,"

Stassen stated,
"I

;

supported

the final

pas¬

of the
Taft-Hartley
sage

law. Taken as

officers

Harold E. Stassen

^ ^

important measures, the

afiidavits

of its own

'.j

from the ruling

world.
vinced

there is a

do I think

possibility oi
of clashing

Minor

changing this situation

from

the

slopes oh the

Yangtse valley. Yet/ Vile existence
of erosion in formerly green fields
of stock exchange prestige is a

and- other

It is

cil.

plain
was

obstinate

and

time

when

There

fact.

the

effect an equality of responsibility
ilrortl a11 substantial issues of secu

center

refused to

sign such ah affidavit.

Consequently, thousands of local
and millions of workers

unions
ate

deprived of their rights under

the law.
r.

"These millions of workers in
AFL unions have*no' con¬

othef

trol over John L. Lewis. John L.
Lewis has no control over the

in¬
cluded in the United Mine Work¬

ittembers
ers.

the

unions

It is un-American

not

and con¬

trary to our basic principles of
individual liberty that men should

published by inite leadership which it is his
unions should have inviolate, the duty to provide. This is the plea
complete
right of ' freedom of and challenge which I believe the
press to print anything they wish citizens of our country join in
presenting to the President as he
on any subject, including politics,
returns to Washington.
limited only by the regular laws
"It is clear," Mr. Stassen con¬
of libel. To hold otherwise would
tinued, "that we must stop the
constitute an opening Wedge in an inflationary price-wage spiral in
attack on a Free Press. Many of America, if we are to avoid a
"N ew.spa p e r s

owned

have other

of our country are

also
business or

individuals who
interests in

and

boom

bust

similar to our

tragic experience after World War
I, Is it not clear that the place to

is by
lose their rights in such a manner. in government.
If we permit a bringing down the price of food?
"It is my view that the sensible
classification of newspapers and
^"I note that specifically Presi¬
manner to do this is for the Pres¬
dent Dan Tobin of the Drivers restrictions pn the rights .of ,a
ident to initiate promptly a na¬

tlnion has signed * an affidavit and
Bpeks to comply with the law on
behalf of the members of his

fundamentally
violate one of the most important
liberties of the American people.
Union, which is one of the largest
"I urge that even though you
id the nation. There is no more
loyal group of American citizens disapprove of every word" pub¬
than the members of the Drivers

tJnion.

Free

nor

Lewis'

the

extreme

treacherous

pol-

Com-

lished in every labor

They have never followed

dither John

Press,

America, you

sist upon

stop

emphatically in¬
it."

the price-wage spiral

will

your

fine republics.

tance

to excessive

"This

can

Par Value

Par Value $1.00

Per

7% Cumulative
UNITS

ONE

$1.01

60 Wall

Street, Hew York 5, N.

of new

design for eva¬

sion for another.
I

believe the

•

developed by the stock
of the United States

giving

life
financial
and I do not wish to see"

top

system
it

soil of our

washed away.

been

I \ Wortojs
DETROIT,
Moore &

MICH.—McDonald-

Co., members of the De-^
Exchange, investment

Stock

troit

e a

offices
P

'
a

program

of food con¬

possible for a

measure

careful

governmental

any

e no

contributing factor, the

an-*

the

associ atiori
them of

Jesse V. Wor-

boys

tative.

Worboys
familiar
ure ion

Street*
having' • spe-»

Jesse

bonds

ci alized

Worboys

Braun,
Sattley

Boswor|h

and

ted to the proposition
tors must

be provided

&
past seven

reach intelligent

regard to their

Weeks

and

later with

Co., H. V.
Co., inc., and for the
years with L. T. Hood
&

& Co.

that inves¬

with certain

J. O'Brien t Co.

before, they
decision with

minimum information
can

iri

municipal1
since 1919, first with Horn-

blower

Stock Exchange
the Commission are oomniit-

MV.

is a
fig¬
Gris-

wold

tion which fosters a double stand¬
ard in the securities business, j
Both the Boston

sales

represent

existence of legisla¬

the

s C

with

unfortunate sequence
fault of the exchanges? Cer¬

thd

in
b

u n c e

n o

other

with

Building,,

this

cause

and.

ers

brokers

the

issuers

With

McDonaM-Moore & Co.

listings to re¬

practice * for

exchanged

is among the

highest,in the world. It is the

place those lost through liquida¬
tion or consolidations. It became
common

)

standard of ethics

enlisted to give active

Carter H* Corbrey Adds

Inc.

drying

has

issuer and

one

securities.

- -

To «M P. Tallmao

do, we cannot,
CHICAGO, ILL. —Philip Tallwe! do not, stand indifferent to the
With G. fe. Leslie & Co.
man ; will
become a partner in
plight of investors in unregistered John J. O'Brien & Co., 209 South
(Special to The Financial Chronicle) ,
sedurities. 'The Boston^Stock Ex¬
Halifax; n. s., Canada— change likes to think of itself ■ as La Salle. St., members of the NeW
York
and
Chicago
Stock Ex-'
James C. Morrow is with G. E. a Veal
working partner pf the Se¬
changes.
Mr, Tallman has
Leslie & Co., Bank of Nova Scotia
curities and Exchange Commis¬ with the firm for some time. "
Building. '
i L sion in the efforts of each to

Member of Nat*l Ass'n of Securities Dealers

corollary

Believing

$0.01

Co.

procession of petitions by cor¬

porations to delist their securities
from the stock exchanges.
The
natural

laW

for

purchasing to* provide the neces¬
sary extra food for Europe this
next winter."
j).

Unit

&■

less

nebulous and

support
then, was the reason?
i
to the voluntary mobilization of
Many of us, and certainly I per¬
the people of the country on a
sonally, believe that, more than
are

also make it

SHARE EACH
per

of the

relatively
unregulated field. From that day,
financial archives record a relent¬
toward

that

legislation does not create a

It was

being displaced

center of gravity

cooperate sympathet?

be accomplished

resistance will
bring down food prices and Will

Stock

Common

early evidence of erosion.
one of
the first warnings

all,

ically with your Congress so

press,

sound

Class A Stock

and by the rulei
Exchange. Here was an

the

Above

organized resis¬
the
prices,
!»
if the tainly the files of our goverhrnent
and of. the, exchanges will con¬
radio, magazines and movies tradict such a conclusion, What,

It should include

"Such

295,000 Shares

both by the act

Was

servation and buyer

295,000 Shares

deprived
their security
holders of the protection intended

frefusal

tions.

&i CHEMICAL CO.

I suggest you
various'proposals as

these

watch

voluntary refrain from listing on regional
'Save-Food' program.
It should exchanges, whereas a few years
listed securities carried
have definite quotas or standards before,
a
much-to-be squght hallmark.
for individuals and for industries?

definite/ practical program includ¬
ing meatless days and heatless
days, less waste and smaller por¬

PROCESSING

coordinated

tion-wide

union paper

their right to publish

enacted

tion

gravity of the financial world had they are submitted to your law
makers. Contest with all of your
nought and found its natural place
in the stock exchanges. I say "na¬
strength the enactment of legisla¬
tural place" because Hie-construc¬
tion which interferes with free
tive and protective requirements
enterprise. With equal enthusiasm,
demanded by the exchanges in th
public interest had merited the endorse heartily legislation which
high respect that they enjoyed serves to protect the
investor.

American

the newspapers

time legisla¬
in each of.

From time to

rit/ies.

■

Boston Stock,

the rest of the ferent to the erosion within our ;®xc^an^
urJ[e
Commission,
Only if they become con¬ profession as we are to the disexP^dite to the Congress^ a re-,
this will not be the case appearance of the top soil of Asia !^st for: legislation which will

consistent With the Proposes a "Save Food" Program
approach of individua
On the following day at Spring
pf Robert Denham, General Coun>- rights and, is unconstitutional.
from the financial world and from
field, Mass., Mr. Stassen urged
fcif of the Labor Board, that all
"This interpretation should be
the informed public as well.
In
Pres. Truman to promptly .start s
Officers of the general executive
promptly overruled by the Na
nationwide voluntary food . con¬ spite of the best efforts of the ex¬
hoard of AFL and CIO must sign tional Labor Relations Board, of
servation program to bring about changes, erosion began.
Exemp¬
(affidavits that they are not Com- by the Courts, or the law should
tion from the necessity of making
a drop in current food prices ana
Pianists before any local union be amended, ;
at the same time permit food re¬ disclosures of essential informa¬
affiliated with these organizations
"The second invasion of free^
tion was provided by the Securi¬
lief to Europe.
can qualify for the assistance of
dam arises from the interpretation
"The voluntary method can suc¬ ties Act of 1934 for companies
the Labor Board or for its
given to the clause prohibiting ceed " Mr. Stassen stated,- "The who did not choose to register.
tinder the law.
\
i
direct or indirect political con¬
American people will cooperate if Certain very sizable corporation.'
the President will give the def¬ refused to register and by this
*r "John L. Lewis' has specifically tributions byf:upions.
f

f'The first arises

Europe and

from

1 <
important actions- then policies.
"In my judgment, major factors
affidavits of the officers of tha
in
the
success
of America in
parent organization should .be re-:
meeting this world-wide challenge
quired.
will be the accuracy with which
; itoore democracy in unions, and' no
"The interpretation, of the law
Weakening of the fundamental
the press informs its readers on
given by Mr. Denham gives to the issues of the day and the vigor
frights of labor,
John Lewis a veto as drastic as
W "But in two respects serious inj- the veto used by- Mr. Molotov- in with which it upholds individual
Jlringements of individual liberty the United Nations Security Coun¬ freedom for the American people.':
have developed.

remaining food pro-

It has been said that the conservation of the

expressea

organization whose ap
labor relations parent
in the nation. proval must be obtained for strikes

It will not injure the workers, but
in fact will benefit them through
leSs strikes, less loss of wages,

■

by corporations not having listed Securities.

;can

local officers should be
good law. • It sufficient to qualify under the act
will
improve If the local union is a part of ;
whole it is a

mation

ducingthe belief that no change j today. soil of the world is the greatest real problem before mankind
Unfortunately, one does not» ■ ■ ''
"•
■ '
-———
be expected in Russian policy cmnK overmuch about the erosion each, of Us. When legislation is'
"until the Politburo becomes con¬ tof
sou
when so much remains, required to assure this well-being,
authority over" a specific union, vinced there will be no clash in
:Undoubtedly, we should concern however, we believe it their pte-including the; power to authorize
our economic!system.
*
ourselves more actively about this rogative to act lor the partnership.'
strikes, Thus, if a local union has
"The Russians think," he said
tremendous problem.
Sometimes ,i
.v,LQnno.
___
complete autonomy and makes its
"that if we have another crash, it seems to
me, -however, that we
+ht lnctnn q
own decisions on strikes and other
then we will have to withdraw in the. United States are as indifg?
we of the
in

those

Mr,

legislation requiring infor-

standard in, securities business. -Wants

Speaking of the Russian atti¬
tude, Mr. Stassen urged a firm
attitude by the United States, but

interpreted to

instance only to
who1 have direct

each

apply,

you

unlisted securities, and contends it is eroding "the green fields of
stock exchange prestige.Says existing legislation fosters a double

Advocates Russia
Firmness Toward

disqualified.
"It appears to me that the only
strictions on,
individual sound rule is that the affidavit re¬
re¬

remove

Stock Exchange

Mr, .Besse deplores exemption frdin registration requirements

'' ~,

They should

munist labor line.

said, would

President of the Boston

)

(Special to

[THE:

Financial Chronicle)

;

as we

improve and revitalize the secu¬
rities profession. The well-being
of clients' served by our members
is a matter of equal concern to

With Schwabacher & Co*
(Special to "The Financial chronicle)

FRANCISCO, CALIF. —»
LOS ANGELE$, CALIF.—Wil¬
P. H. Coleman, JL, has been added
liam H. Nelson is now connected
*
to the staff of Schwabacher & Co.;
Address by Mr. Besse before
with Carter H. .Corbrey & Co., 650
600 Market Street, members of the
iSouth- Spring Street. He was pre¬ the First Hemispheric Stock Ex¬
New * {York 1 and., San
Francisco
viously with Investment Fund change ^Conference, New York
Stock Exchanges.
'f
City, Sept, <18 1947.' .
Distributors.
•v

SAN

THE COMMERCIAL &

Number 4632

Volume 166

FINANCIAL

CHRONICLE

(1219);

theory was wholly wrong, when for price increases. Jn two o
Ihe Adm.mistration itself agcesecl to. three
months; increases were n
an increase*"; in-thc.
df /steel-i (gotiated; in many fields, particu
Why Mr. Snyder agreed to-a price larly by the A. F. of L., ranL
increase in excess df the wage in¬ from 5 and even
up to 20% in
crease 1 don't
know, but he had to- few prosperous industries; a
.

•r'

■■

*./

/•

;

agree to some increase

speaking of rising prices, 'ptaces bkme on policies bf New Deal Administration and a too
rapid price decontrol by President Trttman. Admit; peacetime price control was impractical and says'
Presideiit?s'policy promoting higher wages while «e iking 4o bold prices down, has contributed ?to infla-j
tionary prices. "Holds reenaetment af price contr^ % -ndtithe romedy,andseesendofprice spiral at about
60% above prewar level, Advocafes^ reduced government expenditure] and lower flaxes) restriction of;
^exports, and education campaign. In Reno address, reiterates demand for reduced government spending.;
Senator Taft, in

out

who;

e .p

Who has

?cans.

see

increase, the President re
pudiated his first position; and
action of the A. F. of L,, and en
couraged an 18^% cent iriCrei
pattern throughout all industry
tivity per man, or unless the in* together with large increased: "
dustry is peculiarly profitable.
)
salary for everyorie, inclu<
Creased cost of railroad wages

Of
Course, wages are a part of costs'
and will result in increased prices
unless there is increased produc¬

ibri; was "against it.:We saw "how
black iinafkCta icame 4rtto ^exist¬

After V-J Day; when wage con¬ especially
trols were removed, it-was under¬ Obviously
.

many Wage:

justified.

were

stood arid proper that labor unions

government

Obviously);

the best today, wages and salaries in
fields have lagged behind tilellft
ence
they could get consiStent
whenever ; the prices fixed
with the ability of the business in creased cost of, living*
Xet me review what actually were/out of touch with
But
the real¬
happened when the; war ended. ities of the situation, But !I do which they were working, but effect of a general wage in:
Without giving legitimate grounds
•'
After V-J Day in September ;of •think 4hat
(Continued on prige 24) jf ^
a much more gradual
1945, the government abandoned modification of
Control
woiild
Wage control. Frohi then on the have delayed the
spiral of infla¬
iffort to enforce .price control be¬ tion and that priees would be
came 'increasingly difficult but
j it lower today;
v
!
vetoed the first bill/and cancelled?
all price control under the, second.

b li-

ing railroad Rates to meet the in-, 30%

>, Today I wish to deal with the danger which ifaces the country from the High prices par¬
ticularly of food -stuffs afid .the spiral Ofinflation by >Wiiich higher prices are increasing
wages and iiigher wages ar4 increasing prices.
The left-wingers are trying to put the bur¬
den of these '•
:i
——
■
-'vv
■■.. .•■■■ i.
md it wasPresideht -Truman

prices on the

with-' few price increases were neces
today ' sary. Then, suddenly, respondin
necessity ©f increas¬ to the CIO demand for a gener

enough, steel.

the apparent

would

out arid/get

go
increases

•

been

con-

of rthis

trol

o v re r n -

"l|f"

«ment

anyway
for the last,
sixteen years?

>•'

High prices

done by aban¬
doning the freeze theory and liiin(4) -What 'about * the cost
iting distributors and manufac¬ housing?.; '■* Whenthe President
turers to
a
reasonable margin, demanded unlimited emergency

are no
sudden-emer¬

re*

stilt
o

el t-T

left-wing

desired to continue a

'the
e

The

cost.

"over

fR b

Robert A. Taft

control.

ru-

group

strict price

control without Wage
only that,-! but the
Bowles theory "demanded a rigid
fixing of prices with Only Slight
regard for
increased
costs f of
wages or anything else. 1 wanted
a very gradual ^dlaxation of these
profit

Not

policies since the beginning

man

of the war.

As long ago as

April

"9/1945,1 pointed out that in-View

powers
sums

over

housing,

-to subsidize

and

huge

the production:

■

building materials, the
Republicans cooperated although
of .scarce

the program was opposed to their
principles, because tthCy realized
the tremendous

e m

er;g e n c y

housing and wanted the President

foreign assets in the United States.^—;——
Although these assets in the sec¬ sphere,
for
ond quarter of 1947 are

reported

ability,

limited

credits to

foreign coun¬

As
long ago as Nov. 23,
1945, 1
pointed out 'that the acts and real
policies of ..the Administration
partly for that reason.
.

contradicted its .promises to pre¬

and

sent-" inflation

constituted

/.What are the steps Which have

Tbrought about the present condi¬
tion?
!

(i)

Of course, the basic diffi¬

culty was the tremendous barrowing of the war period 'following
the repeated deficits of the '30's.

-a&ditiortal
created by
the government and much Of this
as now coming into the market It©
force prices up. During the- War
$50 billions a year of
purchasing -power was

established

*We>

•

pear

the^end of the War. We had
control• of wages,:

less vigorous

Continue

Controls
;

President "-adopted

.: v:;

(3) After the veto; I

cooperalec

the

tained by Europe

'ttirough curren*
transactions, loans, and the liqui¬
dation of gold and other assc

mostly in private hands. Other
long-term assets consist primarily'
of direct investments which, as

paid to non-European couri
tries, of Which $300 million wai$|

was

transferred to the Westerri Hemi¬

wartime

experience has ishown,
difficult to liquidate. Of
the ' total gold and bank balances
of f oreign countries about '$8 bil¬
lion belong to Europe, about $4.2
billion to the Western Hemisphere,;
rind $3.5 billion ito Asia, Africa and
Oceania. In addition, international
institutions had $4 billion to their

sphere, and $200 million to coun?»
tries in Asia, Africa, and Oceania^
This situation shows
that
ttii

are very

Upitecj States eicport surplus 'yritik
Europe from the first to the sec*
ond quarter increased $56 million
(as against increased loan dis¬
bursements to Europe by the U. SI
Government and international in¬

Credit.

stitutions of about $500 million),

stranjge

theory- that there scould he :a pat¬
tern;- of general -wage increases
throughout
the"
United
States

agricultural -products risdidsthe
bill/ The' Presidents c own
Board" then-: -decontrolled - grdin

whereas the export surplus with

Europe Fays Dollars to Other

•

■

Areas'-1 '' '

the Western Hemisphere increased

'.J

■

$130 million and the export ^sur¬

other

countries

first

dairy ^products.'-

and:

tfbi-s

The .Presi¬

mnbmeem^At is not m toffer to sell nor a solicitation of an offer to buy

~4he securities mentioned herein. The

dent -himself4 canceled 'meat ^con¬

offering is made only by the prospectus^

(different trol. Insofar ias the price of man¬
^methods including rationing, to ufactured goods Was concerned,
control distribution. Every act tof the President bad full power 'to.
iand

mum

e r

businessman was dictated continue "control /Until dune/ $0,
Washington.• Civilianprio- 1947, providing he recognized In¬
•duction was- severely controlled,- creased
costs.
He
voluntarily

every

-and in many

industries small bufidestroyed because

the

they ~were squeezed into die price
limitation only possible for the
larger concerns. ? To avoid this,*,
variations began to he made until
t>rice control degenerated largely
into profit control .with all the in^ustice ami delay involved in the
government -trying to Lgive dis¬

criminatory treatment to hundreds
different concerns. By the end
of the war wages Were up con¬

siderably

-the increased

higher

wages

than rprices

ahd

production

#hese articles.

TPtfce Ttontrol Ended Too Rapidly

President Truman ended
j&rice control too rapidly. Now The
-

^(2)

lasblaming the Republicans for the
•end .of .OPA,.but in the first place
it

was

"Which
fions
tOPA

Democrat

considered

•

that if manufac¬

The President was dominated jby

the Bowles .theory that if control
eould not be rigid and -unreason¬

'it

able,

should

abandoned.
I

the

;

Revere Racing Association^ Inc.
'

(A Massachusetts Corporation)

/completely
! /-

quite realize the reasons for
President's action

remov¬

ing

all meat control about the
time bf the 71946 election. He Was

jCongrCss

Common Stock

\
|

■
_

Price $5.75 Per

;

that unless he

removed; them/there would be an
overwhelming ^Democrat 'defeat lib
November.
He did ndt act sobn
enough. The people had come Ito
realize; that bis hind bf govern¬
ment control

(Without Par Value)

;

commodities had be¬

so. unpopular

Copies of the prospectus may be obtained from the.undersigned.

responsible for
absence of vmahy
essentials from the markets. They
wanted production add Were Will¬
the

was

complete

ques- ing to pay for it.
J
J
j
relating to the extension iof
;
I do riot fhink myself that govand passed the OPA bills;'
Crnriibnt piice control in any gen¬

Taft before,
Club, Ban
'Francisco, Cab, Sriiit. 19, 1947. i
Commonwealth

making

air the

address by Sen.

the

due

come

jof
j

profits in
not

excessive
1946 and 1947; it Was
Congressional lactiori.

" were

supply

It: has taken

time to restore the

election,

turers

advised by every Democrat pol¬
itician that controls affecting the

resulted in riiahy

the: market.

from

costs produced

Represented by Voting Trust Certificates

abandoned this control fjust 'after

"were

aiesses

130,000 Shares

from

eral

form is' possible

peace, r

in tirne ?of

We rsaw how "rapidly

broke down because

pbpular

opin-.

120

■

of;.''payments by area
shows that about $500 million ob¬

with Senator

balance

Due to the increased need of
Bafkley-in enacting
plus with
without price increases.
It tdok •non-European countries, particu-^
another OPA law, but because I o::
-about -a week to prove that this .larly those in the Western Hemi- million.
the six weeks hiatus wecould riot
fundamental 'secure as - complete • a -control over

government: control of wages,
*■ prices and
distribution.* We had
a control of price, effective vunltil

Could

President

■■ ■■■■ ■■

ings on United States loans te
European countries increased' chrif^
ing the second quarter. In fadt a
rough analysis of the United Btat

are

•

produttioh, and that
j President's Wage Policy
production obviously poiild
; (5) The President's, policy Re¬
not be-obtained without, a reasonable margin "reflecting ; increa^et garding wages brought about San
increase
in- prices.
After Vj-E
costs. .Because the first OPA foil"
Day the left-wing advisors of the
contained the - simple provision
Administration fried tb -boo^i ^ie
that ^increased costs must *be re*
wh©ie wage level of the cOimtfy,
'fleeted' in -increased "prioes, the
•already h^h compared to pricjes,
President vetoed the bill; thus "re¬
on
the theory thdt a depress
moving nil controls for" a period bf
•was bound to occur with at least
six
-weeks.
That .practically
8,006,1)00 uriempioyed.; In spite of
wrebked the possibility of fur*
the;. fact- that Secretary Byrnes
ther scientific control,- "
\
took- "the "opposite position, tihe
more

policy of planned inflation.
■

-and reasonable price levels

was

■■■■■»■■■■■_■

dollars, and *thei
a sellers market,

to have declined about $1 billion,;
require payment in dollars for
the : tdtal, including both short- their exports to Europe, the dra\
term
and
long-term items,: is

tries

Mini

In the September issue of "Current
Business," published by th
United States Department of
Commerce, an estimate is made of the

Bresident'spoliciesthe real
to have every power. • He set Sup placed at $26.3 billion, of which
danger before the countryJin the
controls, maintaining a reasonable the "Wyatt program and then the i$16.8 billicrn consists pf gold arid
bank balances. Analyzing 'the fig¬
postwar period was iriflation re¬
•margin over cost so as to -get pro¬ President himself assumed the Re¬
sulting from the great war spendduction but to permit ino rapid or sponsibility
for
canceling
the ures, "the article "Statesr w "
ing and deficits, accumulated cqr- substantial increase in
prices. | I whole program, fifing Wyatt and
Of the long-term assets, about
rency
deposits and "E" bonds, believed that the:one "solutionIt© abandoning every effort to hbld
$3.7 billion consisted of market¬
foreign, loans and loans to veter¬ all postwar problems of employ¬ :down costs.
able securities, which, however,
ans.
I opposed a policy of un¬
ment
of the

■

aim

Department of Commerce "estimates amount, including gold
here, at more than $25bil]ion on June 30,1947, above prewar peA.

iof

They
the
in¬

gency.
are

could have been

today

evitable

Incorporated

Broadway

New York 5, N. Y,

$l4S|

25, 1947

Thursday;, September
THE
•

(1220)

•20

FINANCIAL ,CHRONICLE
J- , I
,i
.
VthNffl+rt tf,"* '

COMMERCIAL ' & •

Friends, I fear there are
tp^inany other ^American busi¬
nessmen who are like me,—for¬
getting the human values. This
may explain why we do not un¬
derstand
the millions r of • wage
workers whose
only assets are
the.r boys and girls. Today I am
trying to think of them, and also
of the millions of starving families
in Europe who love their children
just as much as I loved Michael.-

.and tons.

BABSON

ROGER W.

points oat;
their study
III by giving

commenting on a personal bereavement,
human values should not be forgotten by businessmen in
of cold statistics.
Says we can prevent World War
up our luxuries for awhile in order to raise
abroad, and concludes wars do not settle great

Mr. Babson,

standard of living
questions when

ideologies are
,

involved.

'i-

■-<

^boys.

;

Prevent World War

Can

but only two have been
interest in business; he was

had several good grandchildren;
One of these is artistic and has no
'WW:'-' in the Service
but Michael was exhausted
and - returned

I have

My second reason

for mention¬

Michael is to apologize for my
discussing World War III

ing

habit of

and

Boston Investment

If the money

cost and

Hamp

ter was

drowned here at

Glouces¬

years ago. I lost no near
either in World War I or II.
War fatalities were only cold sta¬

ter many

shire

hotel all sum¬

kin

entered the business

report that there be
coordination between the

in the

since the war statistician

most part is vastly
ferent from that existing in
the

for

dif¬

that advice by

any

be given on

the"

previous time. No longer is
beginner fresh from school and
a position to look upon a year

unproductive labor as a
continuation of his education. The
average postwar newcomer is a
married man with one or more
of

the sales manager
following up an initial
interview with a prospect, as well
as frequent sales meetings to boost
the morale of the beginner and to
provide selling ideas.
It is stated-that from time to
time certain developments occur
—which to an

party out on Lake,
Somehow one of the

boat

Sunapee.
girls fell

tistics to me.

have

gangster

off her

Which

does

This

methods.

make a

cowardly*
would be
these dictators by giving
luxuries for awhile iii or¬

would pay

tribute, as a
but it

nation, to Europe,
licking

i\& our

raise the

der to

standard-of-living
cannot ac¬

Benefits has been

for Employee
in effect for
were

LiOng before there was any
/thought of Social Security or of
pensions by most companies; the

:>■'

Pensions and

receiving pensions at

the

1946.

The Pension

while the
a

•

«[Bell System instituted a Pension
Plan for its employees. The plan
went into effect in 1913.

Pension Plan
of the first pen¬

The Bell System

Jwas

not

only one

sion" plans but it has
to

be one

ees. The full cost is
■

continued
employ¬

of the best for

paid by the

[pompany. The employee is not
galled upon to contribute any¬
thing.

16,967 Bell System employees
(10,769 men and 6,198 women)

;;

BELL
-

comprehensive Benefit Plan that
also covers sickness, accident, dis¬
ability and death payments.These
were paid to more than 110,000
employees and their dependents
in 1946. During that year, one
Bell System employee in every
seven benefited directly from the
sickness provisions alone.
All of this is in the interest of
public as well as telephone
employees. Because for you to
have good service we must have

the

Ik*

^number of the, men

for

this is their
For threeof them this is their first

than

full

quarters

selling

the men
time job.

half

first

year,

selling experience.
"They- should be taught

that time.
is at
that this problem

Jr., is now associated tion of their
J. Caughlin & Co., Tfiey also felt
Building, in the sales de¬ consisted
of
partment.
r 1 v
than "doing."

with Edward
Finance

Admit

Wade Bros, to

haps

admitted
to partnership in Wade Bros. &
Co., 60 Beaver St., New York
City, members of the New York
Alfred Fisher

will be

Stock Exchange on

J. J.

Wilde

that

must first

they

Oct. 2.

Opens

251 Kearney

St.

years in the
nearly every

them.
members

armed ,

move
They are

of a team!

•:

•

greater and more
work,
house

used to being
It is not easy

immediately
such

requires

(2) Most

houses now

With Foster &

Marshall

Financial

Chronicle)

ORE.—Gilbert Pease
connected with Foster &

now

Marshall, 874

Willamette

Street.

—

reason

long

their

experience

knowledge and

this is

sales manager.

the

consist of
group of men who have been in
the business for mgny years and
who prefer
perhaps demandsvery great freedom of action. By

...

coherent, team¬

providing more leads ^nd
accounts and < much rqpre

thorough sales training. It is cflily
natural but hardly fair to criticize

most
last several
forces where
was planned
for the

adapt themselves
a
job which provides
freedom of action and
such great self motivation.

FRANCISCO, CALIF.—
J. Wilde is engaging in
securities business from of¬

fices at

"watching" rather

connection there are per¬
two basic situations, says the

this

for

SAN

the

training programs.
that their training

report.
(1) The newcomers
part have spent the

Jerome

(Special to The

SYSTEM

were

phase of busi¬

surprising to note that
the background of the newcomer
is so sketchy in this regard.
...
"Sixty-five
per
cent of the
member house men and .80% of
the non-member house men re¬
ported having no prior financial
experience or training. For more
it is

ness,

ring doorbells be¬
hand to show
fore they can profitably ring tele¬
is truly a serious one.;* '
• j: ; phone bells. Apparently the .men
The primary answer to the first are spending altogether too .jpuck
pommoditiesl :o|| will vve still in¬ question is-^money.; The men felt time in the office. 85% of the
sist on fighting Russia with human that current and near term earn¬ men reported that they spend
lives? ' •
/
;1 :■> ings failed to justify a continuing more than 20 hours a week in
investment
of * their. time and their office. «' v
: ? .": ;
In either case it would j mean
money. Indications are that aver¬
"This lack of experience and
real sacrifice and perhaps a sur¬
age net commissions .of men who previous training is "almost cer¬
been selling, approximately tainly a potent reason why a num¬
face setback for America;^ as jit had
should be done without increasing one year were $50 to $75 a month ber of men have left and are
for the full period. Perhaps two leaving.
the Federal or other debts. Before
men in one hundred had averaged
"It certainly must be difficult
losing my grandson, I was all for $200 a month for the full period. in the extreme for a compara¬
The second question — "What tively untrained man to develop
fighting now and "cleaning Russia
can be done to reduce the number
enough earning power in a few
up"; but today I think there may
of men leaving the business?" — months or a year to support him¬
be a better way. Besides, do wars
can
probably be rephrased to — self and' family—even very mod¬
ever settle great questions when
"How can they make more money
estly. 45% of the men felt that
sooner?"
v
" - :
' their houses would not be willing
ideologies are involved?
This brings up suggestions as to subsidize them until they were
reported in the questionnaire.
; averaging $200 per month net
,
About 50% of the men reported commissions.
John T.
"We feel very strongly that the
that they felt their training was
not sufficiently thorough and in¬ immediate earning power of the
With E. J.
tensive. Most of the criticism was beginner can be increased matqPHILADELPHIA, PA.—John T. directed at the lack of-organiza¬ tially" by. an' attempt tosecure

good people to give' it to you.

TELEPHONE

practically every

only a small fraction of
Ample evidence, therefore,

EUGENE,
•H

period covered one

O'Brien,

Plan is? part

ized

who com¬

O'Brien, Jr.
Caughlin

thirty-four years.

end of

"In

such

Even

reasonable wagjes.
The question is whether we will
do this voluntarily by the use : of

hours a day

System Plan

of 70 men

concludes by stating:
a
business which requires
a rounded and yet special¬
knowledge of finance and

The report

ten;

profits, investors to forego divi¬
dends and all of us to work fen

Bell

group

trades.

for

another lost nine out of
and another six out of six.
the 50% turnover mentioned
above is not truly indicative, for

such without .making
real sacrifices.^: It might tempo¬
rarily require farmers to forego

complish

furriish

lost nine;

We, however;

abroad.

their

pleted a training course in June,
1946, 50%
of those who com¬
menced selling have already left
the business. In individual houses
the percentage varies widely. One
house which took on 12 mep, has

that we

mean

of the men reported that
research department failed
them with sufficient
selling ideas or with suggestions

third

number?

this

Shall It Be?
not

experienced man—

security an attractive buy
These same develop¬
While he might be willing to or a sale.
work several years for a very ments might well pass unnoticed
nominal amount, the needs of his by the newcomer. He must de¬
family make it imperative that he pend, therefore, on his house for
develop some earning power in this information. More than one-

children.

we
that it is a fight
This is the first time
for "democracy against dictator¬
appreciated what these
ship." But since losing Michael,
350,000 families really suffered
pverboard.,; Michael stopped the and what a thousand other fami¬ I have been wondering if there is
not a more underlying reason for
boat and dove in after her, know¬
lies are experiencing every day of
today's world troubles. May not the very near future.
ing that she could not swim. He every year.
Succeeded in dragging her to the
The questionnaire of the Club
During my career, I have stud¬ property, stocks, profits and wages
be one reason for the struggle be¬
side of the boat so that the others
had as its base two main ques¬
ied only profits, wages, bushels
tween America and Europe? If we
could pull her in. This they did;
tions:
would be willing to sacrifice some
(1) Why are so many men leav¬
of our wealth—in a big way—
ing the investment business?
perhaps Russia would have to call
(2) What can be done to reduce

speed¬

recently he took a

mer;

recommended
greater
trader,
andsalesman. Also

specifically

the
has

the - report,
circumstances of the man who
According

if
will be told

course,

their houses.

from

one

compiled

"
thought: Of
World War III comes,

day.
Just

Gerrish, of

Stubbs is President, has issued a report,
by the officers of the Club, show-*>understandable. The houses then
ing the results of a questionnaire
are
a
collection of free lancers.
sent to members of the Club rel¬
Right at the outset, there is this
ative to the question as to why
divergence,
this cleavage. > The
so many young men were leaving
houses are naturally geared to the
the
investment
business.
The
requirements of the older men.
questionnaire also requested con¬
The suggestion is that the houses
structive
suggestions and - criti¬
attempt to develop greater team¬
cisms on the part of the men with
work and provide much more in¬
respect to the training, or lack of
tensive guidance: and push to the
training that they were receiving
newcomers.
:
•
>
.

Sunapee, New

which Robert G.

Investment Club, of

Boston

The

and

.....

Whiting, Weeks &

are

Babson

Suggests

statistician and salesman,

■-

Roger

in the industry.

Club gives results of
and holding young men

greater coordination between trader,
better education in finance for beginners.

property
from
Europe sank to the bottom; Divers finally
recovered his body. It was a splen¬ damage are of primary considera¬
safely. • 1 The
tion.
Heretofore, I have figured
other,
Mi¬ did way to go and I am much
which is the cheaper in dollars,—
chael, had prouder of him than if he . had to help out Europe now or to fight
lived and made a million dollars.
been much in¬
now.
I have not considered the
terested
in
millions of good boys who would
Have
You Really Suffered?
business,
one
be killed in another war.. Again
But why do I tell my personal
with whom I
troubles to you readers?
There I fear there are too many other
had discussed
businessmen—and perhaps labor
two reasons:—First, because it
my affairs al¬
leaders too—who are as ruthless
has brought trouble home to me
though only
I have been in thinking too
and makes me appreciate humar
18 years old.
much of the dollars involved and
values. It is the first blow which I
He had been
not enough of the human lives.
•working at a personally have had since my sis¬ Anyhow, I am a changed man to¬
as

questionnaire relating to

need of attracting

perfectly

and

Too often.: fie

occupied with-his own

cannot

accounts
tithe

give' sufficient

following up: ttie
In order ^for
manager to be abieF to

driving and

newcomers' progress.
the

sales

devote

this

time, he

should:be

adequate salary plus a
percentage of the commissions de¬
veloped from new business.
."This whole, thing is a tremen¬
dously big problem. Time-, thought,
action and effort in liberal quan¬
tities are the ingredients for solu-*

given an

tion."

Volume 166

Number 4632.

THE

COMMERCIAL

FINANCIAL

CHRONICLE

(1221)

'-rmtmrsz

Monetary Fund Reports
Says

most members of Fund

exchange restrictions is illustrated
by recent ^developments in Bel¬

Exchange Curbs

Says Fund

embourg Exchange Office, ex¬
change, is now granted liberally
for every
category of import, and

will take account of differences in conditions
in member
countries which lead to
multiple currency practices and exchange
restrictions and will consult with members with
view to their event¬

many commodities
ed

ual elimination.

The Annual
Report of the Executive Directors of the Interna¬
Monetary Bund for the fiscal year ended June

tional
the

following discussion

lent

international

of preva-^

exchange

change restrictions, although se¬
vere, are themselves subordinated

re¬

strictions:
~
Control of capital movements is
permitted to Fiend members at all
times. The Fund Agreement also

tensification of

exchange restric¬
tions, even though foreign ex¬
change receipts are still in
gen¬
eral at a high level.
Their large
demand for imports is in
part a

and transfers for4 current interna¬
tional transactions. The members
of the

Fund which did not avail
themselves of the transitional pe¬
riod

result

arrangements, and which ac¬
cordingly have already assumed
the obligation
to permit freely
transfers

for

cur¬

Multiple currency practices

proval

the
war, the amounts of goods needed
for reconstruction
purposes and

limited

Much

amounts
are

available

for

which

ports

immediately in
goods.
latent
in-

flow of

There

is,

inflationary

some

as a

therefore,

pressure which

cases

aggravated by
the aftermath of
wartime finance
and by current
budgetary deficits.
In these
circumstances the
coun¬

tries concerned
ration

are
compelled to
severely available

supplies

the

use

for many
years

designed to restrict im¬
be removed only when

can

and domestic

price

are

adjusted to balance ex¬
receipts and the cost of
imports.

change

eco¬

consum¬

necessary

activity, including
that
type of activity, such as recon¬
struction, which does not result
er

are

levels

consump¬

a high level
result of the maintenance
of
nomic

circumstances

exchange rates

limited while the flow of

income is kept at

Fund, adapted to

Those

The

tion

ap¬

in various parts of the
world and
in some countries are an
alterna¬
tive to import restrictions.

current

output of these countries is
being
used to repair the
damage and de¬
ficiencies caused by the war.

the

transitional period. Such
practices

productive

the

with

or,

the

have been in

minimum consumption
requirements
are
in
excess
of
present

changing

meet

their

maintained

The attitude of the Fund toward
use of
multiple currency prac¬
tices and other types of

the

exchange

restrictions cannot be doctrinaire
It will take account of differences
in
conditions in member countries.
During the past year the
Government of Ecuador
requested
the approval of the Fund for
an
adaptation of its multiple cur¬

practices through the impo¬
of
a
surcharge on non¬
essential imports, the
surcharge
rency

sition

used; for

to limit the demand
for

imports is
Of

even

the

imports,

controls and

have

limiting the demand
quantitative import
exchange restrictions

appeared
countries to be

most

these

preferable to

ex¬

change depreciation. The
disequi¬

librium
ments

their

balance

pay¬

temporarily

but it is due

tors

very large,
to special fac¬

connected
with
the
war
which may in time be overcome
than to fundamental
disparities
iq costs and prices. In the cir¬
t

cumstances, only

a very

large de¬

preciation would have had
nificant effect on imports

a sig¬
and, in
view of their present limited ca¬

pacity to export and the intense
world-wide, demand for goods,
such a depreciation would
not have
added

important amounts to the
foreign exchange receipts of the
countries concerned.
sons

For the

rea¬

noted, these countries have

decided

imports

and

direct

use

only of limiting

mands

alternative * methods

available for
for

greater.

not

control

but

present

also ;

inflated

import

decreasing

volume

cur

exceptiona

circumstances, even during
transitional period, to make

the
rep

resentations to any member with
view to withdrawal of

The
ment

most

wide

the nature and
-

differences in
severity of the re

strifctions maintained
by "members
of the special
arrangements for the. transitiona
period. In most European coun
tries the
urgency of

availing themselves

conserving
foreign exchange for the most es
imports has necessitated

sential

the continuation and
tension

the

even

severe

the

wartime

significant idevelop-

the

elimination

duce the flow of world
trade.

ability of sterling in current in¬

;'The

transactions.

sterling

By the
terms of the Anglo-American Fi¬
nancial Agreement, the Govern¬
ments

the

States

Mr.
D.

unless

stances

transfers

for

after

July
exceptional

later

date

after consultation.

ernment

the

agreed

risk.

proposed Organization

even

dis¬

all bal¬

payments and monetary
problems. The importance

to the Fund of

other Western Hemisphere coun¬
tries.
Sterling currently earned
by any of these countries is thus
transferable : freely
for
current

of.

ance

certain

national

Trade

successful Inter¬

Organization

can

hardly be overemphasized.

Presi¬

Di-.-

and

rector of Har-1

riman,
&

Ripley

Co.,

Inc.,

will

speak on
"The- Basic

Functions
the

Invest-

ment Banker*!'

Mr.

McClure

also is

gov¬

The

Miss

Florence

I nvestment

Bankers

Association

restrictions.
ent

and

The

Bond

now

in force and will consult wit"
a view to the miti

members with

(Special to The Financial Chronicle)

DETROIT^

MICH'.t'—Eai-1
Kiihlik ' has;1 been added tb
staff

By invoicing trade and settling
obligations in sterling, the recipi¬

R. F. McMaster & Co. Adds
»

inter¬

national

gation and eventual elimination of
any
whose maintenance
is
no
longer warranted by balance of
payments considerations
have

ance

of payments

harmful effect

tries. "A

necessary

announcement

of offers

any

(Special to The Financial

CHICAGO,

McMaster
Salle

Chronicle)

ILL. — Robert
F.
Co., 135 South La-

Street, have added Charles

A. Beckett to their staff.

the

who

from

his

has returned

position

recently
Director of

Displaced Persons Division 'for
UNRRA; Nov. 29, Nelson Tabajara, the Brazilian Consul in Chi¬
cago; Jan. 21, 1948, H. Fred Wil¬
son, Manager of the Banking and

and a partner in

Security Super¬
visors;, May ; 13, Mrs. Jo iford
Adamsson, Fashion Co-ordinator
ojL the
»

Stale

Street Council.

addition

the

itself to
ment

the

study of the invest¬

business, the other to prob¬

lems "national

and

international

•

vestment

Bankers

America;

ice-Pr|si-*'

Miss

Dr.

Colina

Clow,

Melchior

of demand in the
great industrial
Countries. In many countries the

Price $7.50 per

relaxation
tions which

exchange

were

restric¬
made necessary

Secretary

Goodbody

Miss

Edith

Co.;

Jiencke

Treasurer,

Glossberg.

inflation.:
ual

strengthening

of the

balance

exchange restrictions, In;severa
of payments
position of a country
European- countries ex¬ makes
possible the relaxation of
-

Prospectus may legally be distributed.

Reynolds & Co.

monetary

The manner in which the
grad¬

Share)

securities and in which such

September 23,. 1947.

ing Secretary, Miss Irene Falout
of

Copies of the Prospectus may be obtained from the undersigned only in States
in which the undersigned is legally authorized
to act as a dealer in

by excessive import demands will
ultimately depend on the success
of appropriate credit
and fiscal
policies in eliminating

Secretary,

Palyi; Correspond¬

Common Stock
per

Of||ri4

Assoc;atfon

Recording»

So far
.

Presin

dent, .Miss Florence Page of S.e£.*
V

_curity;,Supervisors;

pattern

(Par Value $1.00

•

This year's officers are:

for

Europe and the Far East are
concerned, progress in this direc¬
tion will depend
largely on the

ac¬

tivities will include two monthly
discussion groups,
one
devoting

the significant relaxation of
re¬
strictive exchange practices
is the
establishment of a better
of international
payments.

regular

monthly dinners, this year's

145,000 Shares

„

Relations divis.on of the
Federal Reserve Bank of Chicago; c
April 21, Edward P. Rubin, Presi¬
dent of Selected American Shares ~

coun¬

condition

(

Community Funi *of Chi¬

cago,

NEW ISSUE

which

•

speakers for subsequent
meetings w.ll be: Oct. 22,
Fred K: Hoehler, the new Director

a matter of record only, and is neither an offer to tell}nor a solicitation
of these securities. The offering is made only by the Prospectus.

the bal¬

other

■: r

"The

appears as

buy,

dinner

thq:j Jd'ent, Mi$£ Mary Lincoln

Watkins & Fordon, Inc.,
Penobscot Building.

capital

This

Club

and
Presidentv of the
Board of Trustees of the Commu¬

The Fund is at
pres

studying exchange restrictions
multiple currency practices

Page

America,

Chicago,

in character.

With Watkins & For don

cov¬

achieved

cussion provides for close consul¬
tation between the Fund and the

ac¬

currency
that
can
be
freely used for; current transac¬
tions in nearly
every part of the
world. The wider use of
sterling

settle¬

p?he draft Charter under

reserve

ent country thus secures

for

Organization, now going on, is to
provide safeguards against such a

be¬

be transferred to
any other or to

payments to other countries

time

prog¬

purposes

Under

and

some

progress

the

States

accumulated

of the discussions of the
proposed
Charter for an International Trade

quired from current transactions
by any one of these countries may
United

transactions would be illusory if
direct trade controls were to take
their place.
One of the

Kingdom and-a

sterling

for

The

implement these provisions
concluded

dent

through the total elimination of
Public
exchange restrictions on current

crimination.

were

Direct Trade Controls

available for current transactions
in any
currency area without dis¬

agreements

extent

sterling
15, 1947,

were

ment of these claims.

receipts from current transactions
of
all
sterling
area
countries
(apart from receipts arising from
military
expenditure
prior
to
Dec. 31, 1948) would be
freely

tween the United

large

ress

Kingdom

number of other countries.
these
agreements,

July

Negotiations have been in

also agreed to complete
arrange¬
ments under which the
sterling

during the war, now amount to
roughly £3,500 million, the largest
holders being India and
Egypt.

1947,

The Gov¬

United

Vice

nity Hospital cf Geneva, 111.

held

balances, which

very

circum¬

was

Nathan

President

These

current

15,

McClure,

balances

and

Kingdom undertook
impose restrictions on pay¬
and

;

South"

ernor

complete
integration
into a world system

The
1

multilateral payments will be fa¬
cilitated by the settlement of the
problem of outstanding

United

ments

upon

United

the as¬
obligation may

p.m.

Michigan Ave.

effective,

this

imposition of j even
more
severe
restrictions on im¬
ports and thus in some degree re¬

war¬

exchange restrictions is the
re-establishment of the transfer¬
ternational

not

6:30

Sept; 29

exchange

Eastern

410

international payments situ¬
are

with

season

meeting
Cordon
Club,

sumption of
compel • the

„

time

are

eral

ation

Transferability of Sterling

exchange payments
as'the primary means of
limiting course of trade made possible
by
iipports during the transitiona
the restoration of their own
pro¬
period,
:
'
'
duction and by the
maintenance
There

1948

ILL.—La Salle St.
inaugurate its 1947-

will

dinner

any

the

Under the Fund Agreement the
Fund is empowered in

Women

danger that, if efforts
to improve the United
Kingdom's
international position and the gen¬

tions in order to limit the
demand
for non-essential imports,,

transfers.

rency and credit.

CHICAGO,

ments, under which the proceeds
of exports to
any country can be
used to pay for
imports from

therefore

1947-48 Schedule

pay¬

prac¬

Because

conducted in
currencies,

sterling. The objective of restor¬
ing a system of multilateral

be import¬
Even re¬

ered by these
arrangements. The
countries with whom agreements
have been made are
Required to
maintain adequate checks to
pre^
vent the use of
sterling for

retiring

govern
domestically' produced goods. ment debt. .The
Fund agreed to
of the*'large decline
in the use of tbis
device for .a short
thieir foreign Exchange
receipts period. It will have the
effect
their need

of-

now

tices, however, were replaced by
more stringent
exchange restric¬

transactions

2, of the
Fund
Agreement; they may, therefore,

transferable

may add significantly to the bur¬
den of the deficit in the British
balance of
payments.
There is

XIV,

Section

dad consisted of six different rates
of exchange as well as a tax
of
5% on exchange sales. These

not to

Club Announces

world

exchange control other country, is thus
nearer
are usually
severely limited, have achievement. It must be recog¬
also been relaxed
nized, however, that the assump¬
considerably.
During 1946 Brazil abolished its tion of the obligation to permit
the-transfer of current
multiple currency practices which
sterling

the

generally

particularly the U, S., dollar .and

the importation and
exportation of bank notes, which
in a system of

payments and trans¬
fers within the
meaning of Article

can

limitation.

makes

La Salle St. Women's

terms

restriction

(

restrictions
in the transitibnal
period. In the
countries whose economic
position

capacity.

de¬

how¬

strictions

when applied to current
interna¬
tional transactions are

maintaining exchange

to-

wartime

countries,

that has occurred
since the
of the war.

end

It will thus be noted
that most
of the members of
the Fund are

impaired

some

comes

the United States.

seriously

deferred

ever, it is still more a reflection
of the inflation of
prices and in¬

transactions, are El Salvador,
Guatemala, Mexico, Panama and

was

mand.

rent

Transitional Arrangements

direct and
compre¬

American
countries the huge demand
for
imports has necessitated the in¬

adapt to changing circumstances
exchange restrictions on payments

and

even

hensive state intervention
through
state trading and barter
arrange¬
ments. In many Latin

provides that during a transitional
period members may, subject to
certain safeguards, maintain and

payments

30, 1947, contains

without

development

the

While the law gives exten¬
sive powers to the
Belgium-Lux¬

are

this

possible means.Jn practice that a
very large part of the-trade of

gium.

maintaining exchange restrictions
period and sees a latent inflationary pressure.

in the transitional

which

„

■

Gofen

THE

Governments
on

Reporter

(Continued from page 23)
as

socially dangerous act?

financial trusts;

lead¬ nopolies.

ing to a serious harm. • > r
'* ry"
'"Nevertheless," the-, gentlemen
The 1% rate for certificates, was expected by the market and
who made the baiting of the- So¬
a result has had no. appreciable effect upon quotations of Treasury
viet? Union and other ; democratic
ligations.
;
The longer-term issues, .especially the commercial Eastern ' European countries as
group, have given ground on light, volume. . . ; The restricted
well as consistent democrats and
es have also moved down, despite indications of buying by the
antagonists of a new war in other
aller insurance companies.. Savings banks, according to reports j
countries their profession,- never

InU. instead of
S.

been picking, up the 2V4S of 1969/62. and the earlier maturities
The market, decline is attributed to uncertainties in
.

international picture.

IOTBRS GAUTBGUS

vocateurs

and War-mongers,

(

is no need to-name too

many of them.. It is sufficient;\to
miention some of them, having,in

view

■

certainly, not their

person¬

because

exterminating, human beings only
it destroys as welh an excegive
amount of property.
This Harwood cynically said; at:.the confer¬
ence of American Professional In¬
stitute in. Milwaukee the follow¬

numerous

incorporate bonds, which has been rather pronounced
;tly because of the widening differential between these- securities
d Treasury issues, has created some caution among buyers of govrmnent obligations. , .
The transition: from war to peacetime
ethods of financing will no doubt bring-about somewhat increased
st costs to the Treasury "but this does not mean high-interest
ates.
If world economic conditions should necessitate future
sS of bonds to. nonbank investors, it is believed that there might
a minor increase in the coupon rate, with a lengthening of the
weakness

5"1. Dorn, member of the House necessity5 to* rehabilitate countries
Representatives, on May 7, and material, property on such a
en
the House of Representa¬ broad and- expensive scale.'
~
tives-discussed the proposed 're¬
"9. John Foster
Dulles, "in a,

and

ther world through

spread all over

;

j "There

poor weapon<

concerns and mo¬

alities: personal-convictions, peri ing: 'Though it sounds cruel; but.
sqnal merits and so on — but still the type of. weapon, we should
mainly those social groups, enter¬ possess if we are to wage the war».
prises, industrial, technical, scien¬ is, such a one that wilt kill only
Such weapon will.:
lack false and slanderous insinua¬ tific: societies whose views and human beings.
tions manufactured. by those pro¬ interests these persons- represent. eliminate during the next war the

commercial,, industrial, mnd

wjith

CHIPPENDALE, JR.

By JOHN T.

September 25, 1947

VisMxid^ Skmesf

Our

£ the 2.%s,

Thursday,

CHRONICLE

& FINANCIAL

COMMERCIAL

information canals.

"They stubbornly preach that lief assignations for the Greek
Speech delivered on Feb. 10, 1947,:
a new war is inevitable, and this
and' Turkish. Governments, made in Chicago, urged 'a tough foreign
under the pretext that it is neces¬
a I cynicah statement yforthy of < an
policy toward the Soviet Union,;
sary to" forestall the alleged ag¬
experienced war-monger, "* to^ the declaring that if the USA doeq.
gressive policy of the Soviet Uneffect that 'the Soviet Union, can¬
not take up such a course count¬
iojn and other Eastern European
not be halted by 400;000,000 dol¬ ing on- possibility of reaching a,
countries."
lars, but by a- big air fbrce and compromise
with the Soviet,
i Accuses John Foster Dulles
bombing; potential' industrial cen¬ Union, then the war is inevitable,.,
ters of jthe Soviet- Union,
Ural In the same speech Dulles, boasted.,
In the course of his remarks, the
Mountains
industrial
areas
and that
since
the collapse of the
Russian* delegate attacked specific
other vital places.'
y; ; Some followers of government securities feel thai the eligible
Rpman -Empire no nation
ever
corporations, scientists and,, indi¬
i "2. Jordan, the President* of the possessed such great superiority
obligations and the restricted securities, from here on, will be
viduals as "war-mongers" in the
National. Industrial'; Conference, of materifl power as the United,
Influenced by different forces which might result in divergent
following, words:
>
made; a slanderous statement on States and urged the United State$
Irarket action for these two groups.
v
•"It. should be noted that the the Soviet. Union.
According to to utilize this power to promote
capitalist monopolies, having , se¬ Jordan,; for* whom the sky is the its ideals."
It is being pointed out that nonbank investors are finding the
\
y
cured a decisive influence during
limit, "the United States 'should
Ripply Of suitable investments more plentiful with mortgages and the
I
The Resolutions
war, retained, this influence manufacture many atomic bombs
y
projects assuming greater importance among these insti¬
on
the termination of the war,
and quickly release them whether
! At the conclusion of his-address,/
ls..
'v.0
"
"v
\
skillfully utilizing for. this ourpose there is. or there is not any reason Mr.
Vishinsky offered the follow¬
governmental subsidies and grants to believe that the country con¬
ND FOR NEW ISSUE
.

...

of dollars as well as
protection they. erjioyed and
still are enjoying from the various
governmental agencies and organ¬
izations. This is facilitated by the
close connections of the monoDolies with Senators, members of the
government, many of whom very
often are either officials or part¬
ners in the monopolistic corpora¬
billions

The pressure to put funds into government obligations
the new nonmarketable" obligation will tend to further

this demand.

While the

...

issue is not exactly to

new

is lifting
decrease

the liking

of - institutional

investors, because they were hoping for a 2% %
"obligation with a 25-year maturity, they will nevertheless be sizable
buyers of the nonmarketable 2 Vz s. V
The lessening of the demand
from nonbank investors, it is believed in some quarters, will tend
to take the edge-off the market for the restricted obligations. .I ,
.

it
the refunding policy that

:i&k ... There appears to be a fear among- commercial banks that
the powers that be will continue to refund maturing or callable issues
with lower coupon obligations,: as they did in the September opera¬

The loss of income through such a procedure forces the

jmember institutions into the longer-term higher coupon bonds.

f
;

"3. Earle, former United States
Minister in Hungary and

on -

Nations Organi¬
condemns
the
crimina|<

The United

zation

Bulgaria,

propaganda of a new war which 1
is being carried on by the reac??*
tionary circles in a number of

.testifying, in the House of Repre¬
sentatives ..: Committee

"1.

Un-

countries, particularly in the:United States, Turkey and Greece?/

Activities; stated", in
provocative m a nn e r that'the
United1 States should immediately
use
atomic
bombs; against
the

American

by means of spreading all
insinuations
through

kinds-,

The eligible issues,

radioy
country that, refuses to* agree with press, cinema; and public state-,
tions.
y.y,:;/
American draft of inspection sys¬ ments,
and which contains an."Such a state of affairs agents tem.
is felt, will continue in demand, because of
..Frightening with. Soviel; o)?en appeal; for* ^n attack, on.;
has been adopted by the monetary author- also .industrial scientific activity 'reactive bombs; released? from the
peace-loving democratic countries*
concentrated, in ,the- laboratories

NG OPTION

tion.

ing resolutions:

cerned, manufactures armaments

the

It; is being noted, that between now,and 1951, more than

$36,000,000,000 of eligible issues

these securities,

carry

are

due and callable and all of

"The

same

corporations-.;

most terrible

can.be said, with re¬

insisted

weapons

secretly perfected'

that 'the
should be

Westinehouse Com-

sia "

General, Electric, Standard
others are most, closely
connected
with
this
research

nany,

v-;-"

■

"2. The

United Nations

Organi¬

the tolerance and?
the/support of such propa--

zation considers

and5 that 'the

more so

gard to the research in the field
bomb, 'is
of the use. of atomic energy.- Such whfin,. iho, first-- atom
whem the-" first
atom
bomb- is
capitalistic monopolies like d? 'Font dropped^ against us (U. Si M) we
chemical trust. Monsanto Chem¬ will'destroy every village in Rus¬
ical Company,

higher coupon rates than the Treasury has

submarines'

of various/large

of-a, new

that, would;

war

be, transformed

•;hird world war; as a

into

violation

fib

ofr

•

obligations undertaken by the :
members: of the United Nations.?

the

Chairman of the House Organization, whose charter pro-of Representatives Committee or vides for an obligation 'to.develop,
Foreign;: Affairs,
published
in friendly relations among nations
work,, being complete masters in
MATURITIES IN 1948
"
•• !—'
American Magazine' an article in based on respect for the principle
this field.
•
!
which he stated that 'we are still of, equal rights and self-determi-.
During 1948 more than $6,000,000.,000 of bank obligations will
I "Before the war they main¬ able to block Russia psychologi¬ nation of peoples and to take othey
he retirable with coupon rates ranging from 1%% to 2%%. ... What
tained
the
closest
cartel
con¬ cally; if we fail in this we should
appropriate measures to strength¬
I&re.the deposit banks going to do to maintain earnings if these se¬
nections with Qerman trusts, and rout Russia
by
the
force
of en. universal peace' so 'that" in*
curities are to be refunded with short-term low coupon issues or paid
many cartel agreements contained
weapon."
.ternational peace and security and?
i Off in cash?
It seems as though there is only one answer and
a, clause on the renewal
of the
j "5. McMahon, Senator, former justice are not; endangered' (Art. I,
that is to extend maturities.
To be sure, the monetary authorities
exchange of information after the Chairman of Congressional Comr par. 2; Art, 2, par. 3):.,
'
/
could remedy the situation by being somewhat more realistic in. their
war.: •
y *
'I
mittee on Atomic Energy, stated
"3. The United Nations Organi-refunding operations and offer securities with a high enough return
"All these facts suffice-to ex¬ in
to end the movement into the longer-term bonds.
Congress that 'USA should be 7ation. considers? it necessary to
plain the extreme interest on the the first to drop atom bombs if the urge the governments of all coun¬
nart of various capitalist monopo¬
NOT UNTIL 1952!
tries-on pain of criminal punish-atom war is; inevitable.'
,
,
lies
in
the ■ manufacturing ; of
"In another speech ,of. his. Mc¬ ment to» nrohibit war propaganda?
;
The position of the bank-eligible issues will not be improved for atomic weapons.' One ; can find
Mahon stated that should the ne¬ in- any form and take measures?
some years to come, since it will not be until 1952 when the first of
in these facts an explanation for
for the prevention and suppression?
the restricted bonds will be available for purchase by the commercial the stubborn resistance to the jus¬ gotiations on international, control
iover atomic energy fail there are of war propaganda as a socially'
banks.
In that year about, $13,000,000,000 of the ineligible 2*4s tified
demands
to
outlaw
this
possibilities left; for UFA; dangerous- activity threatening the*
dues 1959/62 and. the 2y2s due 1962/67 and 1963/68 will be in the manufacturing, of atomic weanonis
vital interests and welfare of the
/First,, to accumulate a tremendous
eligible class.
•
■ •
.v\••
• .
and to the destruction of the stock
stock of atom bombs;, ,second, tc peace-loving nations.
j
of atomic bombs into the manu¬
y !
This, however, does not solve the problem because in 1952
"4. The United Nations Organi¬
immediately begin the wary third,
facturing of which tremendous
more than $17,000,000,000 of bank obligations will be due or reto set up international control au¬ zation reaffirms the necessity for,
sums are invested;
thority without participation, in it
tirable.
The scarcity factor is something that the banks must
"The rush for nrofits on the
of the Soviet Union; fourth, to fix putting into effect, as soon as pos¬
contend within the next few years, and: the fear of. low coupon
nart of the capitalist monopolies,
a .date for the
coming into force sible the decision of the Assembly
their endeavor to
maintain by of the international control and
refundings is not helping them solve this problem.
i
of Dec; 14, 1946, on the reduction
^
all means, and to develop further declare that any country, refusing
Because of the timid refunding policy of the monetary author¬
of armaments and its decision of
these branches of industry thit
to recognize it is guilty of aggres¬
ities. which did not supply the market with securities that were
Jan. 24,
1946, on the exclusionyield large
profits cannot bijt sion.'needed, the commercial banks must protect their earnings against influence
the
foreign
policy,
from the national1' armaments of
; "6. Brooks, Senator, from Illi¬
future eventuality, which means continued buying of longer mastrengthening its militaristic,; ex¬
weapons and all: other
nois: in his speech in the Senate atomic
turihg Treasury issues.
This creates a good, demand for the more
pansionist and aggressive tenden¬
on
March 12, 1947, did not hesi¬ principal types of weapons de¬
.distant eligible issues, which should remain firm to better, irre- cies to
satisfy the ever-increasing
tate to. declare cynically that had
I spective of what might be the course of, other government obligqsigned
for mass extermination,,
appetite of the influential mo¬
the United States listened to the
tions.
"
nopolistic circles.
and considers that the realization
advice the Republican party of¬
"Such is the soil that feeds, ih
of these decisions meets the inter¬
TREASURY BILLS
^
fered; before, the; war and 'had the
the United States the propaganda
Germans
eaten
up
Russia*' the ests of all the peace-loving na¬
V
Firming of short-term rates is stimulating activity and trading of a new war; the promoters pf
oresent Truman program would tions and would be the heaviest;
propaganda
are
not
in Treasury bills, which are assuming greater importance as larger this
have been unnecessary..
blow upon propaganda and the
:
amounts of them move into the banking system with the higher rate prominent representatives of the
"7. General Deane (former head
American
influential
industrial of U. S. Military Mission in the instigators of a new war."; • V
of return.
More of the banks are placing reserves that are
and
military circles, influentia
USSR) writes in his book ,tha
created by the inflow of gold in Treasury bills.
organs
of press and prominent American 'military program
Joins Boettcher Co. Staff.
J .
While the trend of short-term rate& i& still up, the inflow of
politicians but official representa¬ should be designed to meet spe¬
(Special to The Financial Chronicle) ; '
cialized situation which the war
seen

fit to

Oil

in recent refundings....

use

"4. Eaton,

and

;

...

gold

means

complicating

that

firming

the

situation

process

will

somewhat

retarded

Nevertheless, the gradual climb in short rates,

which

probably

comewhat.
with

bills and

I certificates allowed to fluctuate, should have an influence upon
creation of

reserves

by the banks.

tives of the American government
as

well.

It, is by

no means

acci¬

dental that the particularly violent
war-mongers

those who

among

are

them

are

closely connected

with Russia would
"8. Harwood,

industrial

firm,

entail.'

Vice-President 0
Cutler-Hammer,

Inc., according to the newspaper
'Journal,' said- that atom bomb is

;

DENVER,

COLO—Richard W*

Hughes has been added to the
staff
of Boettcher & Co., 828
Seventeenth Street, members of
the New York Stock

Exchange.

[Volume 166

Number 4632

THE COMMERCIAL & FINANCIAL CHRONICLE

"War

Mongeiing" In U. S.

Chief Russian

delegate to U*N I attacks Marshall's proposals and accuses United States of fostering
war against Soviet Union.
Lists John Foster Dulles, American delegate, among individuals, instigat¬
ing war, and offers resolutions; directed against war propaganda.
At the

United Nations General Assembly

By WILLIAM J. McKAY
It is unquestioned that the present economic troubles of the work
have their roots in basic causes that can be dealt with
effectively

Sept. 18, Andrei Y.' Vishinsky, Russian

opjj

by constructive effort

over a long period,
On the other hand ttu
severity of the present crisis threatens to destroy the fabric of t!

world's financial structure, In which event the task of eventual <

before,.
(See »
"Chronicled'new proposal made by Mr, MarSept. 18, page' shall is in violation of the obliga¬
11), and ac,- tions assumed for itself by the

United states,
along.with

cinema

acceptable.

n g

Great

"The

ment

Turkey in fos¬
tering propa¬
ganda for war
on

the

Uni

Soviet

Mr.

spoke

for

hour

and

prefers,/instead

Govern¬

the end of his

under¬

governments

a new

and

'!to .urge

all

countries

the governments of

pain of criminal

punishment to prohibit
aganda in any form
for

measures

the

take

and

suppression of

#socially

>var propaganda as

dan¬
threatening the

activity

gerous

war prop¬

vital interests and welfare

of the

ment

atomic

the

essence

of
the

included;

weapons

and

Thus it is clear that the

objective

countries

and

better' and

can press.

posal

made ; by
Mr.
Marshall
should be rejected for the reason
that it is contrary to thi
obliga¬

kets' in

/■:v../.A- y

number

of newspapers

Fund

es¬

committee

the

United

Nations

General

their

countries.

indulge

mongers

under

propaganda
of., cries

smokescreen

about

strengthening

As¬

national

defense and the
necessity to fight
Regarding the Marshall pro¬ sembly on Peace and Security' to
against a war danger which al¬
maintain
'constant
attention'
to
posals, Mr. Vishinsky stated:
legedly comes from other coun¬
"There is left for me to say the wofk of the Assembly and 'in tries. /."A', /
'.v.;'-*
just a few more words with re¬ order to deal with continuing
"The war-mongering propagan¬
gard to the address of the Sec¬ problems.
In spite of the reservations in dists try by hook and crook to
retary of State, Mr. Marshall,
_

"Questions that
been the subject
were

Most

not

had

once

of discussion
in this address.

touched upon
of these questions

in¬

are

cluded in the agenda of the Gen¬
eral Assembly as separate para¬

graphs,
have

which

that

means

opportunity

we'll

state

our

the American

impinge

create

the

opinion on them, at the proper
place and time. The Soviet delega¬
tion, however, feels necessary to

nothing

tions
task is

immediately upon the ques¬
by Mr. Marshall in this
first statement, that is the ques¬
tion of independence and terri¬
torial-integrity of Greece. Leaving

discussion of the proper length on
this question until the time the
General Assembly deals with it

the matters which

are

primary responsibility of the
Security Council or of special
commissions,
there '• is
not .the
slightest doubt that the atempt to

tion raised

the

dwell

proposal' to the ef¬

fect that this committee would not

but

scheme
the

interim

ill-conceived

substitute and

Seciirity

by-pass

Council

The func¬
committee, whose

this

committee

to consider 'situations

and

disputes impairing friendly rela¬
tions,' are nothing else but the
-

functions of the Security

Council
particularly mentioned in Article
of

the

"Even

Charter.

this situa¬

according to the adopted agenda,

other organ
is, with¬

only that the very
raising of this question is devoid
of any foundation. The charges

made by the American delegation
against Yugoslavia, Bulgaria and
Albania are utterly arbitrary and

and

tion

can

will

energetically oppose it. I re¬

without any proof. These charges
go much further than the conclu¬
sions of the

majority of the com¬
mission, which were not supported
by

almost

not
to

50%

commission

the

stand
take

members
which

criticism if one is
serious approach to

any

the data

the
and

which the conclusions
based. It will not be difficult

are

jto prove that the

report

majority of the commission

the

so-called Greek question is full of
contradictions and gross exagger-

matter what its

name

out obvious and direct violation of
the Charter of the United

the

course

Soviet

Nations,
delega¬

accept it and

way

peat that if the above mentioned
new

proposals

ones

the

well

form

new

are

the old

submitted

General

Assembly by the
American delegation, the Soviet
delegation reserves its right to
make
rate

detailed and elabo¬

analysis of these proposals at

ations

which

deprive

clusions of any

those

con¬

importance what¬

soever.

time

when

the

substance

Marshall's

questions

address

raises

well.

Nations

organization,

adoption

United
His

•

such

the

outlined

way

work

American

the situation
that the futility

the

joint

commission

SovietKorea

happens to be attributed to the
Soviet side, Mr. Marshall makes
a

War

its forces to the cause of rehabili¬
tation of the areas that either
were destroyed by the war or suf¬
fered general damage in the course

the

1945.

this

matter

aganda for

'lv;

joint solution of

the

according

problem

the unification of Korea into

one

independent democratic state. The

Propaganda Charge
what he
a

new

rehabilitation and further

velopment
The

national

,/ ;Ay-

England,

and

some

well,

United

States

Turkey,

other

peasants,

Greece

countries

are

that the whole popu¬
lation of the Soviet Union—work¬
demns

intellectuals—con¬

unanimously

bring about

such

any

pew

attempts
And

war.

thing is impossible in the

Soviet Union.

The Soviet Union is

engaged in the work of peaceful

reconstruction, is peacefully labor¬
ing, having much to do in the
field

damaged

rehabilitation

and

war

■

gold

premium prices another out¬
standing situation which disturbs
confidence in exchange stability
:.s

the

so-called

"free"

areas

that of

no:

Union,, the

hint

land

in the Soviet
the socialist

democracy, the land of peaceful
construction of a new life of any¬
thing, and cannot be, of anything
even
of remote likeness to what
has taken place in some countries

"to

the

prop¬

the same time allow such shame¬

.justify
in the

race

press,

."_■/;

furious

mainly
in

and

campaign
in
the
in the American
the

press

the

countries

following the United
States
obediently, like Turkey,
has been spread
already for a

ful

performances

purpose

of coaxing public opinion
a

new

war.

All

means

war

propa¬

ganda and poisoning of public
opinion with the venom of hatred
and

enmity toward other nations.

"Should any person in the So¬
viet Union make a statement, even
in*

infinitesimal

degree,

resem¬

bling the /above-mentioned state¬
ments

ful| of criminal greediness

for

market

new

manslaughter,

such

vere

rebuff and

on page

22)

golds

succeeded

most of their

mamtaininj

gains.

-AAv,

Woodworth Elected V-

Qf Eaton &
BOSTON, MASS.—Eaton
Toward, Incorporated, 24 Feder&1|
Street, Boston investment poun^ *

firm, today announced the ete$*|
tion

of
d

n a r

worth

Ken-

WSSfc
of

Do¬

Mass.,

ver

Vice-Presi¬
dent.

A grad¬

uate

Har¬

1926,

attended

Harvard Busi¬
ness.

School

and begad his

business
ca¬
Despite labored
reer
with the
explanations from Ottawa con¬
Old Colony
cerning the relative unimportance
of this market the fluctuations of Trust Cornthe "free" Canadian dollar receive
p a n y.
He
attention

abroad

than

and

the

publicity

official

dollar.

The erratic behavior of the "free"
market not only undermines con¬
fidence in tl\e
standing of the
official dollar but it also provides

convincing propaganda for minor¬

ity interests whose persistent ef¬
forts

directed toward the rais¬

are

ing of the price of gold.
this

not

the

case

corrected

situation'

can

official re
recommendation,
but only by joint action on the
monstrance

•

and

Kennard W oodworJ

joined Boston

Insurance'"—;

/-'V/"V'\

Company in 1931, as Assistant
the President in, charge of invest*
ment research.

After three years' service in t&l
Navy, Mr. Woodworth in 1946 be-j
came

associated

with / Eaton

curity Analysts and President al
the National Federation of Finan
cial Analyst

Societies.

of Washington and Ottawa,
According to the Canadian view¬
point this market was designed
ostensibly for the convenience of
part

the

investor

but

effect

completely failed to achieve

it has

this

purpose

also

become

and
a

has

moreover

source

CANADIAN BONDS

embar¬

rassment to those responsible for

Contrary to the belief that sta¬
of the "free" market

GOVERNMENT

AAi'

PROVINCIAL

bilization
would
tion

to wholesale

lead

liquida¬

S. investors there is
little doubt the
accomplishment
of stabilized strength of the "free"
dollar would encourage not only
retention of existing holdings but
also a fresh influx of U. S. capita).
Furthermore success in this field
would prepare

the way for similar
bolstering intervention in the ca§e
of sterling.
Action of this kind
be

would

MUNICIPAL

means

CORPORATION

CANADIAN STOCKS

unprece¬

dented and the prewar Tripartite

although

arrangement,

currency

of
of

and

control

strict

A.E.AMES&CO*
INCORPORATED

TWO WALL STREET
NEW YORK 5,

N. Y.

minimum

speculation the technical task
achieving recognized stability
the
world's
key
currencies

RECTOR 2-7231

NY-1-1045*:

would be less onerous and its ac¬

complishment at this critical stage
of world

affairs would have far-

reaching beneficial repercussions.
The cost would be dependent pn

results, and it follows that?if
action were successful in its

such

pur¬

the balance would not be on

pose

the debit side.

TAYLOR, DEALE
&
64 Wall

COMPANY
Street, New York 5

WHitehall 3-1874

During the week there were
sjgns of a stiffening trend ih the
external section of the bond mar¬

ket

but

internals

the

to drag in

continued

sympathy with further

weakness of the "free" dollar.

result of

devaluation
a

rumors

resurgence

'•

stocks staged

gold and
Following almost

strong rally led by the

paper

issues.

Howard, Incorporated, and is £$*
rector, of Research. He is
•dent of the Boston Society of

CANADIAN

SECURITIES

public disapproval

(Continued

denials ther«

definite

subsequent reaction but the

Canadian dollars.

statement would meet with a se¬

considerable period of time for the
in favor of

was

vard

to exert pressure

tend

impossible of accomplishment*

immediate

causes

In addition to the traffic in

propagan

aware

ers,

removal

its establishment.

the

and

econ¬

war-mongering

active

dists

its

'/•

omy.

de¬

consider* themselves to be
democratic and progressive and at

termed

war

follow:

prepare

only

could

United States, atomic weapons in¬
cluded." His remarks on this topic

agreement

R. undertook,
agreement, to

and ;(the

basis of the

very

the furious armament

direct vio¬

reached by the three
ministers in December,
The
United
States
anc

;

Vishinsky next took

Korea,

foreign

that the Soviet Union de¬
its ^efforts to the cause

all

votes

which
Mr.

Moscow

proposal which is

lation

which

the

Nations."

"Korean question. Having arbi¬

trarily

the part of the Soviet
attack America,*.They

that the Soviet Union devotes all

of war,

currency
International

purposes, and tasks of the United

undermine

"Mr.
new

the

key

the

strengthening and further devel¬ confronted with unrestrained cur¬
these questions is examined and oping its national economy which rency speculation, operated suc¬
suffered from the heavy blows of
will insist upon the
cessfully to maintain the leading
rejection; of
the war imposed upon the Soviet
these proposals which are in dis¬
exchanges on a fairly even keelUnion by the Hitlerite bandits.
agreement with
the.? principles,
Under
present
conditions
of
There is
the

■

certainly know only too well that
they are; telling lies, that the So¬
viet,. Union is pot threatening in
any way an attack on any country,

tion alone these functions cannot
be transferred to any

neces¬

state

sary

Union

by virtue

the Soviet delegation feels

frighten people poorly versed in
politics by. the fables and vicious
fabrications about, alleged prepa¬
rations

the

concerted

the key exchange parities.

The / war¬

mar¬

which

and

proposes

gold that tend to under¬
existing exchange parities

mine

magazines, mostly American, cry
every
day and - in - every way
about a new war, systematically
tions assumed under the
tripartite
promoting this baneful psycho¬
agreement on Korea.
1
logical coaxing of public opinion
"Mr. Marshall
standing

Ottawa tb restrain the black

expediently
flow from the pages of the Ameri¬

Korea and will insist that the
pro¬

serves

justified action. The Soviet

tablish

dollar

Torrents of propaganda of a new
war
and appeals to prepare for

General Assembly under the
title of The Interim Committee of

Marshall's Proposals

differ

much

States to fulfill the expansionist
plans," the keystone of which is a
crazy 'idea' of world domination.

the

loving nations."

peace

how

adequately firm, pivot but stabil¬
ity oil the other key currencies is
also necessary in order to restore
universal monetary confidence. A
preliminary effort in this direc¬
tion is already discernible follow^
ing action by the International
Monetary Fund
in
cooperation
with
Washington,
London
and

to justify the furious arma¬
race
in the United States,

same;

Government cannot accept such a
violation of the said agreement on

The

being carried on under vari¬
flags and pretexts. But nb

flags and pretexts, the

States, U. S. S. R., Great Britain
China, to violate its under¬
takings in an attempt to conceal
by the prestige of the General

Assembly its unilateral

criminal propaganda
war as a threat to peace

serve the few remaining bases of
stability while they still exist,
,

justify the limitless desires of the
United" influential circles in the
United

the

address, offered four resolutions
calling upon the United Nations
condemn

magazines,

the whole propaganda remains

December, 1945, and submitting
joint consideration of

means

radio,
have been used.
;
i'

—

matter

and

h a1fand

Andrei Vishinsky

States

them to the
the

Vis h in sky

nomic rehabilitation would be almost
It is essential therefore to prey

-r

"This propaganda of a new war

taking arrangements for shaping
out adopted measures according to
the Moscow agreement on Korea

influence

ous*

United

Britain,
Greece and

psychological

newspapers,

United States of America and for
this reason is not the right one or

c u s

[

Government

Municipal

Provincial

Corporats

thecommercialafinancialchronicle

(1224)

—

high prices is; the tremendous in¬
come of the American
people to¬
day due to full employment and
high wages.

(Continued frbm page 19)\
jffttern

was

ices.'"

Of course

increase

(6) In

1946, the President veproposed

»ed the Case bill which

curb
/er

mild

the

manner

of the labor union leaders

force higher wages than

„

fied for

justi¬

Very limited group

resulting in inand costs for every-

swerful unions,
iased prices

>dy else.
Huge Funds Sent

Abroad

nations
International Bank,
foreign

Marough the
[the International Fund, the Ex[port-Import Bank, the British loan
[and many other special advances.
pSPhe Lend-Lease policy during the
(war had already provided; many
ligations, particularly Great Britain
[fehd South America, with dollar
[reserves.

We gave away every-

have

any nation is inflation.
It is
the easiest way out, for high gov¬

spending in peace or in
war, for high taxes, for low pro¬
ernment

duction.
As long as prices go up, the
burden of taxation is relieved by

reserves decreased

during the

tion, but also a reduction for 1948.
His budget statement seems to in¬
dicate that there may never be a

his way

plenty of, time to find new
ways to spend.
An argument is made that tax
reduction is inflationary, whereas

I have shown that its ultimate ef¬

lis

own

money

for what he needs

New dollars were lavishly

dispensed, usually without requir¬

ng it for him, probably for some¬
thing he doesn't need. A tax cut
will tend to prevent further wage

ing

any proof
and loans like

of specific needs,

the British loan
tnade dollars available to be spent

in the world, finally
%ecoming available to force our

anywhere

Iptices

The Bretton Woods

up.

'Fund

always a theoretical
^concept of Keynes and White with
was

world's

to the
^emergency condition.
application

lover the purposes

" which

increases

millions
home

now

receive

pay
than

taxes

offer

the

take-

an argu¬

What

the

remedy for the
Certainly, it is
lot a restoration of price control.
The CIQ urges, a, return to. price
ltroi exports, conferred by Con- Wcmtrol; saying nothing of
wage
Jjgress,. has practically not been control.
;
*e»ercised. Of course, foreign naThe President occasionally
! Hons cannot buy from us at the
grumbles at businessmen and high
tate of $15 billion a year without
prices, and blames the business¬
substantially increasing the whole men, none of whom have any con¬
fnice level in the United States. trol over their costs boosted by
Also,
government
and
foreign the President's own policies, and
buying policies have not been 10% of whom have no control
pursued with any interest in price over the price they can charge.
«nd have brought the government
But, after the way his fingers
Into the market at the most in¬ were burned in 1946, he does not
present situation?

advocate

Itofesident's Opposition to Reduced
Expenses and Taxes

(8) Finally, the President has
iought every effort of Congress to
tsduce government expenses and
:

"taxes.

The

tax

burden

this

Gantry is tremendous. The Pres¬
ident's new estimate shows that

effective to maintain free compe¬

tition, which has not even been
recognized as desirable in the
cartel system of Europe and the
British Empire.
We would be
idiots today to abandon a system
the very height of its success
and follow the rest of the world

over

$41 bil¬

abnormal employ¬

ment

ior

resulting from

from

the line are-reflected in increased
i
.

price wjhich the
shoes.
'

consumer pays

Specifically also,
eome .tax

the

for

♦

take the
lower

in
income

single person with
hundred dollars income,
Cr a married couple with sixteen
hundred
dollars
income,
pays
nearly a hundred dollars a year
in taxes. This burden is so heavy
groups.
eleven

that employers generally have to
increase the pay check to preyem
Substantial
hardship.
Increased
wages, of course, are reflected in

providing

thfls

equipment

undoubtedly

taper

tend to reduce demand.

demands

off

and

It is vi¬

the

group, after condemning before
iur Committee
the abandonment
if

It has continued

rent control because of the

length

Corporate profits today amount to
only about 10% of the total na¬
tional bill for wages and salaries,
so if half of this profit had been
transferred to the wage and salary

control,

were

afraid to follow

crease.

The

excess

100% in¬
increase in

labor, .the
government must require employ¬

to deal with the chosen repre¬
sentatives
of
their
employees.
ers

Otherwise, there is

advocating a return to price
lontrol.
Certainly, government
fixing of price is not practicable,

real free¬

dom in labor relations.

lor

be the remedy unless
intend to slide rapidly into
it

can

Competition Superior

Certainly, if experience

proves

anything, it proves that the Amer¬
ican system of freedom and comaetltion is superior to other syslems.

The tremendous productive
ability of the United States in the

'ast

war

While

has

our

'hey

are

tion

never

been equalled.

resources

are

not much out of
those

other

great,

propor¬

countries

and they are being depleted. \Yet
the United States stands so far
over every

ard of

w4ould have justified only

about

general 5% increase.

increase already has
greater.

the

course,

been much

allowing, however, for the
expenditures on new
plant and equipment, which make
Even

necessary

for

employment and greater
scwie manufacturers

productivity,

distributers

and

prices.

Too

could

reduce

people

many

today

think they are entitled to more
than

they can legitimately claim
perform. They
realize their return has

&for the service they
do

not

been abnormally large because

The

inflation.

sooner"

they

get

the logic of their own arguments

present level

bill

wages over 50 on 60% can prob¬ back to earth the better off the
ably be compensated in numerous whole nation will be. But the
shortages of other goods.
It has industries
by an increase in pro¬ natural force of steady recovery
continued export
control for a
ductivity.
If we, set 50 or 60% under free
competition, and in¬
year.
We realize that government as the
goal, we should then en-r creased
production, will, I believe,
must permanently take an active
courage the increase of all sub¬
soon
reduce profits to normal.
interest in maintaining the com¬
normal wages and salaries, to that
They should not be subnormal as
petitive system.
But wherever
point compared to prewar.
If
there is a reasonable difference of
they were in the thirties. The
prewar* wages in any industry or
millions of unemployed during the
opinion, the Republican party be¬
profession were subnormal, the
thirties resulted largely from the
lieves that economic freedom, less
increase might well be larger.
In
lack of funds and incentive for
government operation of business
this connection, I think the mini¬
business concerns to expand thfeir
and less government control of
mum
wage should be increased
facilities and increase production.
business, is the best method of from
40 cents to at least 60 cents,
obtaining that production which I
Fifth, further wage increases
dp npt believe that such in¬
mlhhs prosperity for all.
That
should be discouraged to the ex¬
crease^ in- subnormal wages, or
hfek always been the truly liberal increases
to white collar groups tent that they mean increases in
position.
or
to the ranks of unorganized prices.
Of course
we
recognize that
labor, will tend to increase prices,
freedom has its own abuses. The but it will
Voluntary Rationing
ease the burden of high
government must write the rules prices for millions,
Sixth, it may be desirable to
We should
of the road and see that they are
insist upon the vital necessity of undertake campaigns for the vol¬
enforced. There is always danger
increasing the productivity of untary rationing of products like
that the more powerful will drive
workmen
by better machinery, meat where excessive prices show
the less powerful out of business better
methods and better co¬ that there is a shortage compared
unless the government enforces
to the demand. The country as a
operation.
strictly the rules against monop¬
| Second, there should be a fur¬ whole is eating more than they
oly.
In order that there may be
ate before
and therefore
ther reduction of government ex¬ ever

Today

culties produced

crease

the

clearly the diffi¬
by the rapid in¬

penses and a corresponding reduc¬
tion in taxes, and we should have
it at once imorder to head off the

many
save

people

are

position to

without

food

harm 'to

If they do they re¬
duce the demand and they should
themselves.

inflationary effect of further in¬
creases
in wages in the higher reduce the price for the benefit of
wage brackets.
.
$hose #who are not so favored by

price level which

were

incomes. Such campaigns
under the Food

successful

fact, more than half the increase in exports to Europe.- There pas
to the average family has been been, little attempt to exercise ex¬
due to food.
In this field, there port control at all.
has been
no
charge of exces¬
Fourth, much can be accom¬
sive profits to businessmen.
The plished by'a campaign Of educa¬
farmer has received his share of tion.
There
have
undoubtedly
the increase and the increase has
been some excessive profits and
been due simply to the demand
the President has been right in
being so much greater than pre¬
urging upon those who have such
war demand.
In spite of the no¬
profits, a reduction in their prices.
toriously high price of meat, the
If extra funds are available, it is
average per capita consumption of
far
better
from
an
economic
meat in the United States has in¬
creased 15% since 1939r so the standpoint for corporations to re¬

other country in stand¬
living and productive abil¬ income is there to pay for it in
While
ity that the whole world is at our spite of the high prices.
doorstep asking for assistance. I the export demand has a material
increased costs.
believe that our success is due effect, and also the reserve sup¬
In short, the tendency when primarily to the system of in¬ ply of money! saved during the
taxation is excessive is to pass on ternal freedom and incentive in war, the fundamental reason for

chase

such exports

accumulated

return to price control;
IBowles - Henderson equality in dealing with

Even

One way

another, taxes paid all down

great deal

°f

out

jobs arid income. The suggestion
is that
this profit should have
postponed during the war; period
been used
for wage increases*
will
and

shoes and the retailer.

The CIO has'made

Third, we should restrict
ports of those products where
brings hardship to millions of peo¬ supply is short as in the case of
lion.
If we add State and local
lociaTsm.
We have seen that it ple with more or less fixed incomes. corn, and restrict the total volume
%xes, the total will be $53 billion, s only partially effective, even in We must realize, also, however, of exports more than we do tor,
ht least 30% of the national inwartime.
After the war,, we saw that there are also millions much day.
Congress has
given' the
wme.No matter how this tax. is "hah it restricted
production, made setter off ^han they were before President the extraordinary power
iaised, it falls to a large extent
many articles impossible to pur¬ the war, even with prices much of limiting exports.,, It seeipfed to
bft the whole economic machine
chase and created serious black higher.
The American people on be necessary in view of the fact
and increases the
costs, which in¬ narekts in others, Americans do the average, in fact, are enjoying that we had scattered American
evitably bring higher prices. Take cot like, government control af¬ the highest standard of living of dollars throughout the
jvorld in
Jhe price of a pair of shoes. The fecting their daily lives and their any people in the world, now or at almost unlimited amount- The
tatmer pays a tax on the business
great increase in exports which
laily needs. They submitted to it any time in the past. While the
raising cattle.
The railroad
n
wartime, but they submit most cost of living has increased less has had such a substantial^ effect
§>«ys a tax on transporting to mar¬ an willingly in peacetime, if at all. than 70 %, according to the Bureau on our own price level, i^ not a
ket.
The packer and the pro¬ The American people still believe of Labor Statistics, average earn¬ matter solely of relief supplies for
cessor of leather pays an income
n that freedom which has been
ings in manufacturing and mining Europe. As a matter of fact, com¬
in practice he charges more
the basis of American success;
have increased more than 100%.
pared to prewar exports/ there has
tor the product to make up for it
The greatest increase in price been a greater increase in exports
So, also, the manufacturer of
System of Freedom and
has been in the case of foods.
In to North and South America than
the revenues will be

the .increase in profits
today. Up to the present, as the
President points out in his' last
Sees Spiral
economic report, high corporate
There is no reason to believe
profits have provided funds for a
that the normal
course of
eco¬
substantial
proportion
of. the
nomic development under
a free
heavy volume of business invest¬
system will not solve the prob¬ ment. In
other words, they have
lem.
High prices will further in¬
not been hoarded' or distributed
crease production
and thus reduce
to the stockholders,.hut have been
price.
Abnormal exports cannot
spent to improve plant and pur¬
continue.
The

tally important that this slowing
tem can show on paper greater down
of
abnormal
activity be
equality in the distribution of this gradual and that new production
world's goods, but there is cer¬ be stimulated to take
up
some*
tainly no evidence that it can in¬ part of the activity which cer¬
crease the total output or improve
tainly cannot be continued.
the average standard of living.
What action then can we take?;
And, in ^fhe wolking out Of the
I believe we
may,as well recog¬
socialistic plan, it is doubtful if
nize that prices are
permanently
even
equality can be secured.
up above prewar prices.
Since
Certainly, the discrimination in
both wages and prices have^risen,
Russia today is just as great as
wages on the whole more than
under any capitalistic system; and
prices, we had better work toward
the Standard of living for fortu¬
a stabilization of
wages and prices
nate and .unfortunate aLke is in¬
at some new level,,
perhaps 50 to
:
finitely lower. *
-30% over 1939.
Increase in sup¬
The Republican party has not
ply and some decrease in ab¬
been extreme in its abolishing of
normal demand should bring
fell war control, even' two years prices back to that level from the

through a-revision of of time necessary to make up a
for a few especially shortage of housing compared to

powerful groups to have
ment for higher wages.

for which they

opportune moments.

laws have been

our

greatest danger of further infla;iori.
It is certainly far better for after V-J Day.

I have believed from the begin¬
The President's attempt to blame
ning that we should assist other high prices on the Republicans
nations to get their plant in order because they tried to modify OPA
%hd acquire raw materials so that lo make it workable and get pro¬
they might go to work to support duction is ludicrous.
^themselves, but the result of these
The Remedy
loans with practically no control

Unight be expended created a trenraendously abnormal export trade
Ifiom this country. The power to

general,

I
'-".profits;'

if he has

tax reduction
and

instead of the government spend-

war.

Perhaps we
monopoly than we

The moment prices be¬
come stable or decline, the burden
of the present taxes will be intol¬ into government-controlled econ¬
erable.
Yet, the President not omy.
It may be that a socialistic sys¬
only vetoed an immediate reduc¬

Tax'reduction
ig we exported and we paid
most of our imports, so our would permit the citizen to spend

should have, though less than any
other country in the world.
But,

fect is the reverse.

[igold

the economic field.1

the whole economic system in
the form of inflation.
The com«mon effect of economic hardship

nflation.

<7) The Administration insisted
lat huge dollar funds be made
available

to others, and finally

+he burden
to

~-v.

2&/19l47

Thursday," September

prices rather than increase
wages, or dividends further.
A
reduction ■« in prices 1 will benefit
millions compared to the thou¬
sands who gain from an increase
in wages or dividends.
duce;

Administration in the first World

War/

carefully planned and
through with determina¬

carried

tion, I

can have a
prices in the

believe they

material

effect

current emfe^gency.,

Joint Committee

the Economic

Report

Apart from the immediate price

situation, the grefet problem We
have to face in

free economic

is the prevention of de¬
pressions, and particularly major
system

depressions Of the 1032 variety.
study this problem, the Em¬
ployment Act of 1946 set up. a

council of three economic advisers

whose report the Presidents is
required to base an annual eco¬
nomic report. Such a report was1
submittedAin January, and a mid¬
on

in July. The Act also

year report

establishes

Joint Committee; of

Congress on the Economic Report,
of

which

have

the

honor,sat

Chairman. This
Committee is to study the Presi¬

present

dent's report, and make its own
studies

determine the factors

which bring about depression and
when there is danger of a depres¬
sion

occurring,

and

recommend ;

procedure and legislation to pre¬
vent

depressions.

We have

ap-

-166;

pointed

subcommittees which

the

States to get: first-hand
information about high
prices, the
-

for

cause

dustries

them

and

the

particular

measures

still

Have

tem

free

remain

the average
standard of living is
lower than the
average under our
system.
Nevertheless, I have felt
that unless under our
system we
can prevent
the kind of
hardship

suffering

States,

would

try

some

system which did not have
to reach
its goal

through periods
heavy unemployment.

We do know

good deal more
today about economic forces than
we have
known before. We have
better statistics.
We do not have
better brains, and I
am afraid we
a

have more economic
prejudices to
disturb our collective
judgment.
Economic forces are
infinitely
complicated and it is hard
to cal¬

culate

strength
which

change the relative

different

pressures

are

operating at the same
Human
ingenuity, however,
should be able to
solve any prob¬
lem.

done

but
of

means

Undoubtedly

the

government

can

stimulate certain types of
tivity like public works

ac¬

when

necessary. It

can

Prosperity

discourage others.

depends

apparently
balance between

upon the proper
wages and

prices, between

doing

must

play

for

con¬

sumption goods and
expenditures
for durable
goods* between? the
relative
income groups in the
population.
Education and

are

the

action

should

where within reason.
tics we now have

unemployment

political questions.' Of
course, any
spending government

legislation
-

money, or setting up government
bureaus has some effect on em¬

ployment, but if

we are to make a
of the fundamental
ques¬

success

tion, politics ought to be eliminated

•:

only

and

legislation

minor effect

which

has

and

the

tenance
proper

prices

committee
to

program
,

of the world,
and a nation which
today is the
envy of the entire world.

and

succeed

between

fixing

controls.

problem- is
merit. in

Dec.

without

detailed produc¬
Here, again, the
keep the govern-

position of helpfulness

In'summary,

we are

completely

opposed to the OPA theory, which
was

effect

dominated

CIO-PAC philosophy of

the

detailed

Party

has

always

stood

for

regard

Senator Taft conceded that there

"nothing more important" in
considering the development of
the

West

"than

irrigation

the

reclamation

projects

with

the

created."

large foreign would not press for further pay
commitments for feeding Europe
boosts, changed their minds fol¬
—commitments dictated by both
lowing the coal settlement and
political and humanitarian con¬ demanded and won a
5% wage in¬
siderations.
As it is, the near crease.
More

with

the

was not con¬

coal

settlement.

This left the way clear for a fur¬
ther boost in the price of steel
later on the basis of the increased

were far

is disheartening.

union

Effect

John

The

Lewis

Victory

second

vietory

calamity was
John Lewis in

negotiations

with

the

expected.
tlement made it

Wage

the

and

the

call

unless

one

are

this

calamity be¬

surely

the

quickly

prove

lessons

learned

it teaches
and

acted

upon.

days

means

have

been

interest

business

and

sidered

cerned.

difficulty of avoiding in¬

the

matter.

flation

under

employment.
which

economy

conditions
In

the

key

whole

the

full

low-pricing policy; 1

private affair of
and

country

de¬

to wage and

benefit payments
made. With little visible ap¬

were

This is

employees
no

This negotiation
concern

and

con¬

longer the

is not
matter

must

the

case.

private

public

defended

from the

That this is

size

and

is due to the great
basic influence of the
so

coal and steel

and to the

Corporation is engaged in a num¬
ber of different operations such as
mining and shipping, its basic
operation

steel.

most

Its

the

production

recent

to indicate that

seems

statement

during the

first six months of 1946, costs for

labor,

material, and services for

each ton of finished steel shipped

peated time-consuming tactics of

taxes

That the decision arrived at
lay
in the field of
public as well as

resistance

cost

still

terminate

greater

amount,

In
coal

late

July,

real

were

ac¬

inde¬

depending

shortly

after the

Steel Corporation announced sub¬
stantial increases in the price of
steel.. These were followed in due
course

by increases in automo¬
prices and electrical appli¬

clear

At least, its
chairman made a
public Statement in the nature of
an
apology for its action.' Al¬
though he gave a'number of ex¬

prices

that

they

costs

due

were

during

the

first

six

ing example, other industries
being approached for wage
creases.

Even if the Lewis

did

set

not

demands.
textile

viously

pattern, it

workers,

announced

in¬

encour¬

higher

England,

who

are

victory

to make

New

profits

tripled.

"depreciation

policy of high

instituted, sup¬
posedly to reflect the present high
replacement costs. Yet in July of
was

this year, the price of steel was
raised on the average $5 a ton.
Now it is dangerous for an out¬
to pass judgment
on
the

special nature

the mining industry, his main
was
that the agreement
ensured full operation and a con¬
of

defense

tinuing supply of steel to the in¬
dustries

of the nation. This argu¬
ment demands our earnest atten¬

had

that

the

we are

right in

our

conviction

inflation, and if the successful

without doubt inequalities in pric¬

educate

the

ourselves—all

fundamental

require¬
ments of our great adventure in
the material well-being of our
country and of all of its citizens.
Sir William Beveridge wrote in
his "Full Employment in a Free
Society": "So long as freedom of
collective
bargaining
is
main¬
tained, the primary responsibility
for preventing a full employment
policy from coming to grief in a
vicious spiral of wages and prices,
will rest

those who control the

the

road of the

destiny which

may be ours.. /,
,{
a Management
and labor of rio
industry has the right to make an

agreement without calculating Its.
effects upon the rest of society.This

alliance between industry and the
miners has many of the effects
of

cartel

agreement,

in that

ernment will be forced to step in.
do'know that the business? If we are to
escape such govern¬
ment control/it is necessary that
both

management

„

labor

and

fires of inflation. Price setting as

assume

well

sidering the welfare of the coun¬
try at large. They must consider

wage

setting has become
for our

each act

Munich Pact

the

possible to draw an
parallel between this

coal

settlement,

om¬
eco¬

and

the

Munich Pact with the Nazis.
both

cases

peace

seemed to be of

such supreme

would

sad

important

to emphasize
advantage of man¬
agement to exercise a restrained
pricing policy. Run-away prices
will not only hasten the coming of
a
depression but also greatly, increase1 its severity. Moderate prof¬
that it is to the

inous

the basis of its effect

society if followed by all.

upon

Coal Settlement Like the

the responsibility of con¬

end

our

its

mean

what

prices now will tend to
profits tomorrow. Charging
the

mean

market

losses

and

will

bear

can

bankruptcy

the future.

Are

there

other

and

easier

which will lead to safety?
Let the best minds of the nation

courses

address themselves to the critical

problems—this modern

riddle

the

Sphinx—which we must an¬
swer or perish. In the
words of

Bruce Bairnsfather's immortal Old

Bill, "If you know of
go to it."

better 'ole,

This talk began with reference
hopes for maintained high em¬
ployment, production and con¬ to this nation's two critical prob¬
lems—our relations with Russia
fateful economic
'
tendency, then sumption. 1
and the avoidance of inflation
the
Let us take another look at
parties
to the negotiations
under
full employment. Unfor¬
failed, wittingly or unwittingly, Munich. The? appeasement and its
tunately the two problems are re¬
in their duty to the nation.
immediately
following
events
j
lated. Uncle Joe is recalcitrant,
The industry might have fought seemed like a great victory for
because he counts confidently on
Germany.
But where
are
the
vigorously for less extreme terms.
our inability to solve the domestic
Better yet, it might have discussed Germans now? They suffered the
problem. When we fail in that, we
of
allA This Lewis have lost out to Communism.
the matter with John Lewis on worst fate
appeasement cannot in the long
broad grounds of public
policy,
Perched like a buzzard cn a dryrun produce
any benefits to the
affecting •" miners'
interests
as
well as those of their* employers, miners, if our analysis is correct. stub, he eyes with sardonic jnour
Some of them at least suspect terest
floundering 4 progress
In default of
more rea¬

sonable terms by these means, the

this.

they

problem might have been brought

the

The

Associated

Press

"Washington Rost"~for

July

and

Lewis' campaign is a large scale
example of the working of this

obtaining

ing left over from OPA controls.
But I

pre¬
r

is to

J
'

disregards the good of the whole

sion

the

means

for the short run benefit of spe¬
cial groups. If such arrangements
become general practice, the gov¬

dream

wisdom of these price rises. I my¬
self hesitate to do so. There were

that full employment tends to end

such

shortsighted,
advantage of

sider

importance that al¬
most everything else was sacri¬
ficed for it. If the peril of infla¬
tion under full employment is as
alarming as it seems to be, the
parallel holds. Peace has been
purchased, but at too high a price
to be repeated. It has been pur¬
chased at the price of mounting
and uncontrolled inflation, which
in the past has always ended in
a precipitate and correspondingly
deep depression. Such a depres¬

Industry officials
announcing the advances

increased

while

nearly

policy appears to have nomic event of 1947 and a certain
been realized by the.
Corporation. political event, of 1938—between

tion, for it is true—fearfully and
made dangerously true.

ances.

were

private

cuses

settlement, the United States

bile

shipped,

;At Ihe same time,

tually full employment.

the labor leader, terms

courses

leaders

were

ton

wages and prices endemic in
this long continued period of vir¬

pearance

labor

bargaining on behalf of labor;."
$24,000,000 or about
This calls for the growth of a.
$1.32 per share of common stock.
vital
statesmanship in industry
For the first six months of this
and organized labor, working to¬
year, these costs fell to $80.61 for
gether to save all, and to set alt ?
period

industries involved,
a
public responsibility
inflationary contagion major industries.

negotiation, except for the oft-re¬

ing.

viewpoint of public wel¬
which makes a price rise at this
industrial fare if it is to be justified at all.
time is shovelling fuel onto the

industry

pendent, record breaking demands
as

upon

concern

whole; but in
general it would have been con¬
employers

the

looked
some

us.

do? There

three

managers we can be
look for the narrow

Although the United States Steel us—to

after

'>:

;

open

seem

abandoning
our
maintaining high em¬
ployment, production and con¬
increased
to
include
excessive
sumption. ; ';.?• profits or excessive depreciation.
Another way is to re-introduce
Full
employment and
stability governmental controls of
wages,
are
promoted by a, high-wage,
prices and profits. Thi§ we fertlow-profit per unit economy.;, To dured under the necessities of
implement full employment, the total warfare. To resort to this
rate of depreciation and the rate
remedy in peace times would be
of
business profits need to be to abandon all
we fought for and
brought into relation with the re¬ to
surrender
to
a
government
quirements of continuing equilib¬ controlled economy.
rium in a dynamic society.
This
The third course is the hard one.

normal profit rate, but in the
pub¬
lic interest they should
not be

incident

this

Well, what shall
would

•

our
own
particular group, as a
result blow up ouf inflation iftta
Should the corpora¬
the ruins of depression. That is the
tion have raised its prices? Prices
course too many of us are follow¬
should cover costs,
including a

each

Public

Concern

former

the type
exaggerated form,

incident presents

situation, in
of

difficult to

Negotiations of

The

set¬

and

will

the

even

Lewis

resist wage demands.

United

States Steel Corporation

The

his

Northern mine operators

closer to the

increases demanded than

Possible Courses

Three

cost of coal.

recently, in the amounted to $98.27. A four weeks'
prospect for any decrease in the agreement with the
non-operating strike tended to make
operations
food element of living costs is
railway
brotherhoods,
the
in¬ less efficient but
profits for the
something less than dubious. It creases won

and'unfriendly control.of the in? aged other unions

dividual businessman and the in¬
dividual farmer. The Republican

with

that

our

interference

(Continued from page 6)

it not for

were

months of the year and did
trends with¬ not reflect the boost in
the miners'
with the pay.
Therefore, are we to expect
u:operation of each individual farm. a
further round of price increases
The? Republican program inclines
as a result of the wage cycle that
against production control unless the coal
settlement precipitated?
it is the only possible
remedy for
With the astonishing success of
starvation; prices.
the mine negotiations as the shin¬

direct

afford

than

the

this

What Can Business Do
About Pricing?

influencing basic

out

prices

end

prices

and

present

guaranteed

comes

balance

price?

the

self-supporting,

incidental power

We have

working

31, 1948. Here, again, we have a
dilemma of maintaining a sound

tion

goods.

now

program

which
.

some

all
up

was

relationship with the price local conditions.

V of manufactured
.

that

other public works."

the

most

general

farm

ex¬

in particular has the

well

can

na¬

and

the history

important problems is the main¬

tre¬

proceed

we must

undertaken

generous

broad
cepted which amount to an in¬
employment creased cost in
wages and benefits
major effect on politics, left
of forty-four cents
per portal to
for political
determination.
portal hour. For each hour spent
One of the most
difficult and at the working face the increased

problem

with

minimum.
In the President's
first economic
report, he undertook to recom¬
mend all kinds of
measures deal¬
ing with social welfare and other

would

to a

the

Federal

claim

are

price increases in steel which fol¬

give
warning. The government should
be able to act in
time to hold

reducing

public works program, and

projects
time

lowed.

The statis¬

expenditures

burden

appealing

cause

should

for

reclamation

believe

United

some¬

thing to keep this balance

all

"But certainly
with

measures
freedom of

of pork chops. It's the best con¬
tract we ever had, but it's likely
to
hit
us
right in the bread¬

A complete surrender
major points was accomplished, basket."

Having surrendered, the U. S.
Steel Corporation raised its
prices,
as I have
already stated, announc¬
of

penditure, debt and taxation.

the

was

pursued.
on

mendous

States

courses

nected

powerful

greatest
tion

these

necessity

find

in helping

enterprise, because
made

the

strjgpSp(^.posed

ha|

Neither

ing that the increase

ou%svstem work, but
eliminate

$35,000,000,000, it is

reconcile

some¬

gov¬

ernment

United

better

part

economy, as follows:
in the neigh¬

budget

arbitration,
•

the Federal Government with the

the

want

time to spend too lavishly on pub¬
lic works in general.
We do have

eco¬

farm

prices and industrial
prices, be¬
tween
savings
and
investment,
between
expenditures

•

our

before the bar of public
opinion, 9 reports one miner, soberly re*
that it$ true nature as a
ques-4 turning to ^workr .as 5s^ying: ;'£I
tion of publib
policy was ' revealed! hope these wage raises don't go
It could have been
submitted to out the window in the higher coifc
so

job, of
living and

time.

"With

borhood of

great

raising the standard of
increasing wages without increas¬
ing prices." That can only be done
by more productivity per man.
We recognize that the
government

which

they

The

CHP ONIGLJE.

;;Talk, Taft Again

government

divide- up

make.

is to tune

been

mate

benefits,

goods made

cannot

T7T\T A "KTft AT1

The day following the fore¬
going address, Sen. Taft at Reno,
Nev., reiterated his plea for more

ca¬

job

has

make

ties,

Jfc.

Cites Need for Economy

nomic machine and increase
pro¬
duction. On the whole a good

in the thir¬
the people might take
the
position that regardless
of ulti¬
we saw

than

problem

sys¬

which

available.

free.

can

total productive

his

economy and

eliminate violent
depres¬
sions, but apparently only at the
cost of limited
production in

and

fore

completely socialistic

the

!n Reno

pacity of the country, and there¬

which

plan and in¬

terfere with

doubt

limit

in¬

might be taken to reduce
them.
We face the
dilemma as to how
far government can

^^Mi/myrt7-Dr'TAT'

nigher standard of living. In my
opinion no workman has ever
been paid too much for a day's
work well done, but there is a

are

holding hearings throughout -

United

mTtr

Number"4632

toward

the

quicksands.

Let's disappoint

him.

THE

(1226)

COMMERCIAL

ft FINANCIAL CHRONICLE

Thursday; September 25,1947
rernfieht bonds de-

abolished*

G<
ciine; because

What Chance fox Private Investment in the

ulation,

CTOency manip*-

rket^s pegged;

tbj

are forbid- this country, and to disabuse the
agencies used public of the notion that there
to make artifj
J&pporting pur¬ are such people aa the mysterious/
knowledge of the factors involved, chases or onljTa limited number "they," the Wall Street brokers,;
of trades a daycare permitted, or who are supposed to be making
and who is certainly not actuated
by a desire to protect the buyer minimum priceTadvances or de¬ money at the expense of the pub¬
and seller in the market. The re¬ clines per day^dWhed, or mar¬ lic at all limes. It is a big and
ending
publipN relations
sult is regulated barter of one de¬ gins raised to 10O*and in a final never
scription or another which func¬ desperate effort/the market or job; as many of ypu here aire
tions more or less, hut only be¬ exchange is pa<#ocked. In Great aware frohi your own official ex¬
Britain, the mother country of perience. Last year, when ourd
cause of the police power of the
liberalism and f^e^trade, the govr market broke, a representative ins
government, and here is where
eminent close^ffte cotton . exr Congress was sure that the myk->
we begin to lose our personal lib¬
terious "they" in Wall Street had
erties. Even well-meaning; admin*- change and ts^k^Foyer its func¬
tions. In Hitler Germany the
gov¬ deMberately put the market* down
istrations committed to the phil¬
ernment, being politically inteiv and demanded in investigation, so
osophy of a planned economy ested in
mai^plfang, the sem¬ that steps might be taken and
presently discover that they can¬ blance of
privafe^jproperty, did new laws enacted to control the
not do so; without a certain amount
not close the
exjghanges, but de- situation. The SEC has just with¬
compulsion; this compulsion functionized them
completely. In in the month completed a most
grows as
the problems become Russia the
exchanges were quite exhaustive study of the character
acute; they soon discover that the logically
aboltlKid;; because in an and timing of the buying and sell¬
law of supply and demand re¬ economic
system jyhere there is ing that took place during that
mains unrepealed, and under such supposed to
be**nq .private prop¬ break, on Sept. 3, 1946, completely
circumstnaces this usually mani¬ erty there is
:
•
no"place for an ex¬ vindicating the Exchange.
fests itself in some sort of a black change—there is also no
As might be expected) this past
freedom.
market.
These are
decade has also developed a tre¬
mofe^^jat'' examples,
Here we lose another piece of but all of this; is
'pafcf of the same mendous literature in books; pam¬
our
liberties, as the government business which
academic
journals and
varying degrees phlets,
attempts to stamp out the black has been Witnessedjtime and again popular magazines. The theoreti¬
market—the unwelcome result of throughout histo
cal and. technical side of the. case
J$hen markets
£ or another was argued, back and forth.
its ineffective policies; a hypo¬ have for one r

dsns

security tram
den

(Continued from pace 4)
border because of this
history is
a formidable one.

nishes the most powerful invest¬
ment incentive that there is.

Indispensability of Security
stop at this point to say
Markets
is, of course, an over¬
It is through this mechanism
simplification to treat all pur
neighbors below the Rip Grande that new capital has constantly
in one category; your economies been added to that generated by
are Quite varied in character
business itself, giving industry the
and
potentialities—your problems, ca¬ high concentration of machinery
pacities and needs quite different. and horsepower per man which
Broadly speaking; however; this explain the enormous productivity
'

Let

that

may be said:
you

viewed economically,

of the American economy. The se¬

curity markets thus constitute the

much younger than we
are—you are still in the fortunate

very essence

position

system

are

being in

teens —you

are

your

the

early

rapidly

of the free enterprise
in addition to being the
tangible symbol of the free mar¬

ket.
Show me a country where
where, we
the '70s—the growth of Inroads begin to be made on the
some of your cities in the
last dec¬ exchanges either by some pressure
ade has been simply
phenomenal. group or by government itself,
Your interest rates are
and you may be sure that lib¬

growing stage—you

are

were

high, as
suspect—you are ex¬
periencing a tremendous demand
for capital that can't be
one

would

satisfied,

situation where the
entrepreneur

does not have much surplus to in¬
vest m securities either at
home
or abroad because his
capital is
all tied up in
personally owned

erty and personal freedom
danger,

are

Once

abandon the

principle

of the free market—once

cide

son

another

de¬

concede that for one

rea¬

the market shall

hot be permitted to respond td the

thetical scoundrel is created—this

shifting tides of supply

and de¬ scoundrel, who deals in the black
mand, then we are saying that the market, is a profiteer who must be
dictum of some third party shall
fined, punished, or depending on
though he
.has a substantial
equity;' any sur¬ be substituted for the, Judgment the kind of a situation, we are
plus he would develop he would of the market—then also trouble
looking at, exterminated; in the
promptly plow back
Since so begins for any interference with latter case, personal freedom has
many of your enterprises are still the normal functioning, of an ex¬ ceased to exist.
privately owned, the number of change will distort prices and val¬
Nor is * this loss of liberty the
corporations in each of your coun¬ ues with all the unforeseeable
whole story—in fact, it is only the
tries which by virtue of
consequences that may ensue) in
size and
beginning of another; new forces
earnings could qualify for
listing fact, the mere suggestion that have been set in motion by such
here is
still relatively small- there may be some rule or regu¬
interference with the freedom of
enterprises.
In fact, he is
prob¬
ably a borrower even

enough to make a start—but the
important point is that it will be

lation to be issued at some future

be substantial. In the
'70s

we were

to disturb

the

investor's right

shares with unlisted
trading privj-

Ueges, the total is

over

650,000,000;

Expansion Ahead
;

the

the balance of the

mar¬

usually

economy

results

efforts to at least banish the

welcome

un¬

manifestations

market

thereof,
,

History is full of all sorts of de¬

vices

which

make

have

markets

been

tried

precon¬

ceived pattern or to prevent them
and the
frontier economy from registering price advances or
full-fledged industrial econ¬ declines deemed undesirable. They

this expansion

transition from
to a

omy still lies before you.
This is
exciting and challenging pros¬

pect which will
.

all

occupy

your

have all been unsatisfactory, not
to say failures, and moreover have
not been good for the Stock Ex¬
change business except possibly

energies for the next few decades.
You will go into this
period with temporarily.
the benefit of
,k«br

/that

our

experience and

Europe before you—you
have the opportunity to
profit by
our
mistakes—and they have been
many—as well as our successes.
In the process of
played

tegral

part,

for

the

of
an

Stock

government

per

and

pressure

day-limitations
sales

tried

such

maximum fluctuations
orders

purchase

customer,
the mechanical apportionment of the

achieving these

successes, the institution
Stock Exchange

During the inflation
period after World War I, the Eu¬
ropean Exchanges usually under
devices

per

in¬ amount of stock offered between
the bidders at a fixed price even

Ex¬

change and the various agencies
that go with it, that is to
say the

though the individual buyer got
but a fraction of what he wanted;

broker, the dealer, the investment all without avail, There is no sub¬
banker, constitute the mechanism stitute for a free exchange market.
by which

economy,
applied

the

i.e.,

life blood of the
the savings to be

new..

construction

and

Principle Is Widely Valid
Nor do these observations have

investment, is made available to applicability merely to stock ex¬
body economic.
The invest¬ changes, the. principles of the free

the

ment

banking fraternity, with the market apply with equal force to
foreign exchange markets, com¬

affiliated network, of
dealers and
brokers throughout the

country

modity markets,

money

markets

the money, and
their abil¬ —any market — in fact, if these
ity to do so in the final
other markets are not free, the
analysis
rests on the mere
Stock Exchange will be in trouble
presence of a

raises

security market Even

*<.1

usurped

monopoly

press

/group

some

or gov-

ernment itself.

If bmes down to
permit the
unwillingness,
thermometer,
market, to
register the truth,
hence the
an

thermometer is

When one
these things just

the

consider

theory, not to

doleful

self to just one,
cinct and compact argument
the Exchange

sociation

written for /the
Stock

for

As¬

Exchange

W. w. Cum¬
partner of theVeminent
Ladenburg, Thalman &;

Firms by my friend

d^|oyed

btaa^Jto

mention

far afield^o;
confine my¬
namely, the\suc¬

would carry me too
cite names, so .I will

practical

examples whi?fiHye have before
us, one wonders how it is possible
for a government-hat proceeds to
make inroads tn^the freedom of

berland,
firm

Co. Probably no otner single pub¬
lication in this field received as

wide circulation and was as

im¬

portant in strengthening the hand
of the Exchange's proponents. I

normally do; they may obey the

hoard,

they will

use up

all their

ration coupons even if they don't
need

expect—for it musfcrbe abundantly
clear by now tMfeno government

a fluid popu¬
lation—and th&kao planned econ¬
omy

can

posslg^ produce

devices

are

in¬

tended to suppress...
Business finds it virtually im¬

possible to plan under such con¬
ditions because it is completely in

stupendous pmdjuction successes
and its high stlhfard of
living for
the average
man-—yet even we
here in the

United States

are cer¬

real consumers' demand and con¬

sumers'

germinate

dark

what

and

where

Able!

one

tribute

other champion of the Ex¬

thing like the results of an econ¬ change as a vital institution,
namely, Mr., Francis Adams Trus¬
omy enjoying free markets where

tainly not imhrSnf in this respect;
rather, we seem $0 be an excep¬
tionally f ertilftibid in which to

the

Champion

I should also like to pay
to

any¬

them, or they Will sell them there is a rewarFfor individual
they will buy other goods ex¬ initiative; least of all would
you
pected to be affected next, thus logically expert |to find such no¬
aggravating the very inflationary tions in this! country with ' its
such

President Truslow

reactions thereio^y

pressures

them.

possibly plip for* all the con¬
tingencies as wdyUas the manifold
can

low,

the

President

the, New

York Curb Exchange. There has
been no finer plea for freedom
than that contained in; his

inaugu¬

ral address last year.
I refer to these gentlemen, and

their contributions not
cord

but

credit Where
also

obstacles

only to re¬

credit

to indicate the

that

you

are

due,

kind

likely to

in persuading your re¬
spective countrymen of the jaenefits to be derived from re-estab¬
•ield vi currency, where most of tory of the patff fifteen years has
lishing
and
maintaining free
these. problems are, the public been conspicuously productive in
this regard. Tfte Apolitical attack markets for commodities of all
will circumvent qyite
legally the
kinds in general and securities in
effort to prevent a flight of capi¬ on. the exchangesfin the '30's has
been as sweeping as any experi¬ particular.
tal enforced by
varying degrees
enced in other
Clearly
your
first
objective
of compulsion
cCjpntries. An ex¬
by making other
should be to remove the restric¬
and
unforeseen
uses
of
their change is always'^ulperableJn a
tions largely bom of the war on
money, which creates hew prob¬ depression pa#|lafly if it has
conducted m own
affairs the free movement of capital—in¬
lems for the administrator, re¬ not
both within
quiring new control measures and properly—this is; particularly tfhe cluding 0securities
further compulsions. Homo sapi¬ of a highly dynamic and widely your countries and between your
country and Other countries in¬
ens is a very ingenious animal; fluctuating economy like our own.
the number of permutations and JL has been a >c#ktant battle in cluding our own; yet certainly ho
this kind of a^hhiate to prevent one at the moment is going.to but
combinations of things he may do
or
not do is infinite, and it is the demagogue.^om persuading any funds into another market
impossible to anticipate them ad¬ Congress to j>a#ep; legislation which restricts the withdrawal of
which ,wo U
ministratively. Nevertheless, the
l%^;haye literally the interest, dividend or profit On
such commitments to an arbitrary
number of functionaries required wrecked the mapMneW for trans¬
to administer tbe controls, issue lating savings lifto Capital and figure such as 5% per annum, not
making it available to] commerce to mention the right to withdraw
the
licenses.. and
permits, fix
the principal put in except over
prices, priorities and allocations, and; industry, fThe ^struggle tp
a 5 or/10 year
make the.
is of necessity
period./ r
!,:
ensujp^ i&ws workable
progressively en¬
We can do quite a number 1 of
larged at the expense of the coun¬ has been a lqfi^nne and a great
try's labor force and presently be¬ many people naW"collaborated in things-^you on your, end4-we, at
ours ^ these
comes more than the
are the things. We
economy can
|p':. •" /
have b.eendiscussing allthis week.
carry.
Tribute to/PfceSideiit Schram
We can look at international arbi¬
Nor does it make much differ¬

inventories

are.

the

bizarr^ideas. The

rurFinto

his¬

an enviable anyway because it constitutes such
ence what the
Ost credit must trage. We can examine the prob¬
First and
original theories or
an integral part of the
economy,
company whose se¬
economic misconceptions are be
distinguished lem of listing requirements about
given to
curities are about to be'
offered rThe absence of a free market, that which
lew York Stock which Comissioner Hanrahan, has
initiated the trouble-- the President of t
is to say the impingement
would pot be sufficient.'
upon
The im¬
1 Schram; IJh- just talked to you — we cap see
underlying principles are the same
ExchangeyMr.
portant consideration in the mind the freedom to buy or to sell, al¬
and the question of the
the continu- what can be done in the field/of
impact on der his Reader
of the individual investor
who is ways means that some agency and the
e Exchange as
reciprocal
taxation
and
see
security exchanges is only a ing assaults upcf
about to convert his sayings into very often the government itself matter of
the efforts to whether we cannot promote tax
degree* The notion that an institution
has decided that we may not ex¬
the market ought to be controlled circumscribe t
an investment in a new
freedom of the conventions along the lines al¬
enterprise change what we wish or trade on
is after ah a recurrent one and market were fr
y met and the ready negotiated between the U, S.
is the knowledge,
often unex¬ terms indicated by the supply and
always means an unwillingness relations of th# Exchange with and several European
govern¬
pressed, that he can sell on an ex¬ demand; rather, we must exchange to admit that
the Securities Jc ^Exchange Com- ments. Work looking towards the
something is wrong,
on such terms and on such con¬
as for example when a govern¬ mission
change, if necessary, without re¬
brought Ivto a workable adoption of some common stand¬
ditions as are prescribed by some¬ ment inflates
the currency. When baiis,<£hanks
-|he enlightened ards in the way of disclosure lgws
strictions as long as fair practices
one outside the market *who may
foreign exchange fluctuations be¬ policies of its
member- would be useful and mutually ad¬
In dealings are observed; this, fur¬ or may not have a
No man has vantageous.
speaking come uncomfortable, they are ehfo, Mr. Han:
Also fruitful would

record; of

goverl

sion

borrowing from England and the ket and set new forces in motion. technical letter of the
edict, but
Continent—they were the big ex¬ Failure or unwillingness to, elim¬ they do not stop, at that
point,
porters of capital In 1870 there inate the original cause, be it dij- they try to anticipate the next;
rect interference with the-mfer
move.'
If this happens toibe in
were^ less,than 15,000,000 shares
listed on the New York Stock Ex- chanism of the exchange of mis¬
the
field
of
prices, they will
management of other phases of
Change, mostly railroads;
today
we have over
1,800,000,000 shares
listed on the Big
Board, while on
the. Curb; if one includes the

been

market, since under compul¬ the market
am sure that the Association will
ever to survive the
people do strange things;
public oppositijga^.that one would I be glad to supply you copies - if
sell freely is sufficient
they do things; they would not
you bave not already
received

date restricting

growing, and looking ahead, will :to buy

done more than Mr, Sehram to
restore the publte esteem in whiph
the stock exchanges are held in

Volume 166

Number 4632

THE

COMMERCIAL

FINANCIAL

v
be

conscious; effort

on. your, part
and providing,
|hem with more
to
apprise us directly and via
eisure.
'
I
suitable material forwarded to our
Now,, most pf^our economies
Journals and; magazines, of new are. also
be seekers of
goirig;^|
projects and the expansion of old capital for. a
time to. come,
lqi
ones that you are undertaking— But; particular
the face., of,
your plans and your dreams in in¬
suoh a, demesti
and
1

dustry; agriculture and; transpor¬
tation.

The

;

•

■

you can-

not

hope to get

camnot

Most Important

share;

your

expect

flow of capital

Need

united

our

fa God and

armed

efforts

been

the destruction of

by
our

saved

Our

intact, our productive
undiminished;
our
renot; even fully explored

In consequence

you, us-

collective importence« fan the * affairs of a dis-

However^ I take it for granted iq thexform
We

are

all

—

point hik allegiance js solely to a distant stockholder, that he wants
the highest.returns in the shortest

type-of collaboration

period, of; time and then he will
withdraw, and- the enterprise or

groups, that is most particularly
the function of those he.ro assem-1

the wasting oi natural assets will

bled,, for in this respect
thp'ex¬
changes
can.
perform ^yeoman
service: because they stand at the
pivotal; point., in. the economy; not

our

of^peptable foreign tressed; world has become imagreed that the
exchange and trade policies and fad mense."
most pressing need of the
day in the
form of secqrity.- mechanisms I
i In the New
our business is to;
World;, in. the Westeliminate the
which; inspire o^Blidence.:
ern Hemisphere, after all, lies the
foreign exchange controls and re¬
move the limitations on the move¬
The
hope of the future of humanity, a
The ' American Poker
Chip
I hope wbicK we can only bring to
ment of capital which, are now
making business in securities be¬
.fruition by long-term economic
It may be argued that we
tween us impossible.
haveancl financial collaboration.
As
Obviously
this is much more easily said than really no choice in these matters
and that in the; final
analysis we \
done, for there, is much more in¬
volved- here than; die mere lifting must make loattOnd grants to aid
our'own industries
of Certain restrictions-^trade con¬ in "i keeping
operating at tollable levels; this
ventions, - taxation,
government
comes down tcrllle old
policies with respect to currency,
poker chip
prices, interest rates, to name but theory of the ". American position
that

out, this is

in which.a much greater rolefalia
to> private citizens and private

econ-

war/

are.

sources^

the; President went on„ to

from

powers. *

^satisfactory out-

||pm

grace

countries, have

l omies

you

provide* the prerequisites

,egs you

ure for the hopes and; aspirations
of this Conference:

"By. the

(1227);: 27

CHRONICLE

go
"

few,

affected and will have

are

modified,, in
radically. - ■
.

some

cases

internationaQrade;

such

objective

you *

achieving this
will
accordingly

theory

the world's markets,
dUcer and consumer

in making possible the easy evaluation
and
the
entrance- into
or
both pro-,..,
......
that in this [.foundation of investment, as need

if necessary; as we have
found it necesary, to take a direct

terested

and

continuing' interest, in

the

few years,

whereupon the

general policies of your respective
governments. You will find it nec¬

;
markets
A

ing

•

before the
with

only, to state your case
public, but also to work

government

sults,

experience

achieve

has

re¬

shown

that it is generally
impossible to
get at these problems any other
way.

This is

1Edge order.

How-

everpn^ these efforts

you will not
only\havethe history of the past

for the repatriation

0116 of the Purposes': of the exbycha"Se and the capital market
our
mm,mm
War I loans machinery in general should, he to
—the private foreign loans fol??
capital which otherwise
lowed' in the '20s mid when this ml®
n
be put 1° Productive
.

"inl

went

out

™

use.

Wiethe 1929 'crash,

the

overcome

reluctance

aeSn bv^evaSi^
Chfh S in industrial enterprises— their
enrhrn!,l .!!r
in,the
to, let
capital, lie
early ^Os—ou$&war and postwar I preference
•

>90"

in¬
aro

country involved* Constructive

vestment

not

in-

quick-in and
quick-out proposition. Investors
should put their capital to work
abroad over a long period. There
will be ups and downs which the
a

investors

must make reasonable
arrangements to accommodate.
In

The

not

our

country,

own

corpora-

Ijlons are increasingly aware of

12)

page

stock

exchange

the* sole

is clearly

instrument

for

g^ate^possible

pi0yment an(j fair and progressive
stimulating investment. Other fi-1
treatment nf x*mT*ir Arc
of workers. ThA c»mA
The same
isary

for

institutions

adjunct.

the

further

are

neces-

development

investors, cannot expect to ovencome
the
spirit 'of narrow na¬

tionalism

have

which

today
that

are

enterprise

the

that

would

bar

their

entry or expropriate their assets
if they retain the psychology of

savings.

public concern must:
foreign investments,

c^aracterize

ocal institutions which
encourage
and actively use domestic

situation

sense

leaders

anomalous

absentee

countries
urgently in need of
capital, find, among

landlords*

many

Compliance With. Domestic Laws
It goes, without saying that in¬

their nationals who have substan¬
tial savings, a preference for for-;
eign securities.
It is certainly not
my
to decry foreign

vestors

weu

;

laws

must

comply in spirit

Tetter

the

with the domestic

countries

which

intention
both here and loans, our lend^se and UNRRA dormant or to use it solely for the
they
operate,
that
they r must,
acauisition of land (which seems
investment, but
to; you also have arrangement W$re our latest conscrupulously refrain from any acthe- present
every endeavor should be made
explight of Europe be¬ tributions
tion that might be regarded; as
_in 5"thi§ respect. The change must establish greater o employ, such. capital,
fore
you,
where the
managed Marshall Plan in one sense
at^interference in the political life
is confidence
in
domestic
inves.tr where .the need is urgent. The 0f the
economy is clearly running into the
next device to accomplish the
country or the subversion ofi
arv
ments. This it can do in many risks are greater but so, too, are
impasse, and where the abso¬ same
pubitc officials. What are malr
purpose,
nevertheless,
I ways. The
lute necessity p£
exchange is a free aa- i;he returns. If local capital is not I practices at home are no less malreestablishing thmk it is questionable
whether I sociation but
convertible
only those should be freely forthcoming—at least to
currencies
will
al
practices abroad. Foreign, capital
the U. S. Government will conthat this implies, before
permitted to associate who recog- pay the local currency expenses
any rep] tmue to be
working in association with local
thep chip distributing nize-Atheir public responsibilities, of enterprise-—then the aspirations capital,
improvement can be expected, is
promoting" local skills, in«
agency indefinitely, while therie
By the immediate jurisdiction of of governments for greater Indusbecoming all too-obvious.
terested in the local needs pf the
certainly will ;±»et great political
I have felt free to
[the exchange over, its members it trialization may require them to local;'community, and respecting
say all these pressure
from^the farmer
and J should assure that securities are make capital available either by
| the nationi. integrity of the counthings as we have, sinned and suf
other special interests to continue issued and
or
quoted which pertain taxation
by
forced
savings
fered in these respects as much as
try of investment; will find that,
lending or giving away our prod- to; companies of intrinsic worth through the printing press and in¬
in the broad as. in. the narrow:
anyone else. In. fact I don't know
ucts as soon as there is
any evi- and solvency.. To, stimulate
the flation. And this is likely to transr sense, it
of' any country where the* stock
pays bigger dividends^
dence of a major downtrend in widest distribution of
ownership fer the decision as to the use and
The local community,' in turn,
exchange and Wall Street is so
the business cycle, the
presumpassets, the exchange can en- application of capital from the has reciprocal obligations to the
conspicuously and as matter of tion
is that at some point
mteria of the economic world, I
Congress caurage the division of stocks so
babit and political,
foreign investor. While the fortradition, the will
balk, becmhfe the taxpayer that units in sma11 denominations to those of the political. Where eign investor- cannot
public's and politician's whipping
expect and
will no longer be
there is a need for capital from
willing to foot ^ available for Purchase. The
should not seek special privilege,
boy. Those of you who were here
the bill; at any rate I am sure we enforcement of fuU and candid abroad the combination of local
last week had, a,concrete
he can expect and. should, receive
example
are all agreed thai the U. S. Gov- disclosure in prospectuses is part and foreign capital in partnership
on the front
relative equality of treatment in
pages of the morning
ernment itself is not likely to con- of tbe Publlc responsibility of the offers the best hope for, harmoni¬
business
and
tax
matters
with
newspapers last Friday. So do not
ous economic
tinue as the chip dispenser on the excban&®«
development in the that accorded local
be discouraged by the obstacles.
capital. He
interests of the importing as well
present
can expect qnd should
'For the potential rewards are
scale,
if only
because
enjoy the
Need of Uniform Accounting
as the investing
our domestic
community.
same, protection of his
capital requirements ;
great. /

hundred

abroad

...

our^wn securities
World War l arS
subsequently
back

promoting. If

fo€r a balanced' economy in the

work.

in the
business community, the'members
of the exchange can work together

sees fit to
tribute chips; thfffhe did via
buy-

inter¬

are

freedom than to demonstrate that
free

nancial

iocal endeavors, the exchange of-

game

inve^ent is

accumulates and is directed to

redis-'fers amedlum
of securities.

stops unless he

essary not

dictates; ^nd as_ domestic capital

poker game he is:mathematically
bound to have all the
chips in but

find

the kind

not

investment

break down the barriers to the
only, as a: vital link in-the ma-L
chinery to disseminate capital, but free, fb)W0* Private cap aU w
also as the symbol: of free enit
tprnriqp "
fertainlv
the
West' ^wo~way street. It is to tho ad
P
Certain y
x e
we
vantage of.the investor to develop
ern Hemisphere can perform no
enterprises, which not only asgreater service in the battle for sure a direct return but also fur-

(Continued from

preponderant position

To be effective in

this

simply holds that Uncle Sam has

national

Development of International

with him.

This

years;

to point

rea^onablv oermaneiS)-thr

Standards

the

tnhe hneXLieL^arrar'e gr
®
CurK,us y

Reservoir

In the postwar era the center
of gravity of international finance

that

States

;;Lr,;l0",IStw
these

have here

,y,

{j^ns

which

hSl make
Df

United

In the process of economic

One of the significant contribu- velopment there should
this

conference

to encourage

capital

can

a greater flow
countries is

between

vidious

distinctions

domestic

Capital has

person and
property as that enjoyed by na¬
tionals, the same access to courts

in¬

between

and

and
a

foreign
capital.
contribution to make

capacity

tracts.

enter

into

con¬

expect and should

can

enjoy reasonable remuneration for
for those from various countries regardless of its
origin, but if it the risks of his
enterprise, and
1 °-n
-r
syphoned off, to work together to set up uniform is to expect security and remunerbutr it simply us not true
certainty that he will receive just
reservoir
of
capital
formation.
rather, standards of accounting so that the ation it must not seek
special compensation^ if his
our natural
assets
are
The demand for
interest in participate I £oreign and the local investor wil
capital in the
privileges.
transferred to national ownership.1
world today is; stupendous.
This ing with you in |he development read
and understand the
same
e— TT
C
Reasons of national security and
includes the United States itself, of your manifgld resources will
things when they inspect the comr- Needofor U. S. Investment Abroad. wel£are
may^ in certain circumfor, among other things our own of necessity have to compete with
The need for U. S. investment
| ponent elements of a balance
stances; require limitations on the
capital consumption was, as might our own demands.
The private I sheet.;
Assets, #income,
profit abroad is greater than ever and participation of foreign capital in
foe expected, subnormal for
prac¬ capital function^md private capishould, be. terms of art,, clearly the opportunities many.
Never-1 local enterprise/ But discriminatically the entire decade of the tal exports will once more come defined,
part of an: unambiguous theless, we all know that the tion
against foreign capital solely
thirties. I refer you to the recent into their
own, qnd it is. to this international economic language, climate for international private
because it is foreign serves only
publication, "Arperican Needs & day and this goal, that we should Not
only accounting but other investment is not now as favor¬ to diminish world
trade, employ¬
Resources"; for some projections lbok and bsnd our efforts, so that elements of
corporate, organization able as it was in the 19th century
ment, and well-being.
oii this subject, and in fact
suggest the mechanism will be ready and
and. in the early years of this
j shpulci be unequivocally statedCapital is only one of the fac¬
that all of you take a look at a the
way pavedno proceed.
•
proxy practices, voting privileges century. This is not because for- tors in the
process of economic
copy before, you go—I think you'll
! American. cap$gft has already and< ibe like.; We have overcome eign capital has no, constructive
deyelopmerit but it is a highly
"find it a most fascinating com¬ taken a
proininent part in the de- foe barriers- ol language, differ- role to play. Our own country mobile factor
and more readily
pendium. I know of no. other sin¬
velopment of Uatin America and ences in our friendly association like our good neighbor Canada, traverses national
boundaries. The
gle book that I. might suggest that I venture
to ho^e1 that the present
evening. We must do so in was developed with the aid o_
will give you a better picture of
g^eat advances in economic wellphase of desuetude in our securiforeign capital. Nor is it simple f*(
-•
has clearly shifted, and the United
States is the one; and only great

surplusmf capital which
i

—

-the tremendous, economy that we

-here
I that

are

living in.

ourselves

big

are

apt

scope

and

ties and
of

one

j busfoess assoemtion

as well,

capital "relations is only I
In the United States it is
inaniingte: suspense and^^ only by the operation of the

no
ex

xenophobia.
technicians

engineers

As
we

are

being made since the Industrial:

and
than

Revolution

are

the

result

the

its

destined

temporary;
We changes themselves but by Fed- welcome; our, skills are eagerly appiication of technological disIjere in the United States certainly eral statute that the interest of the sought; but as businessmen, as coveries
i
made oossible and effecenergy; we have proceeded so far
recogrxize the enormous potentiali-1 Private investor is protected. Al- entrepreneurs, we are often notrf
S and so rapidly in
expanding the
so
welcome. Sometimes we feel tive b^ fo® use
capital. Private
machinery and power available ties of the hemisphere and: your
that at the same moment that
a

underestimate

its

;

individual factory worker that very presence here is
testimony
are staggering and be¬
to a desire
to^ilevelop. these in
wildering even to ourselves—the
a
common effort.
As our Presitruth is that this is Utopia—we
have achieved the unbelievable— dent, Mr.
Trumqn? said in his adthat is, winning a war, contribut- dress at the
closing session of the
ing with our Western Hemisphere
Inter-Americanjd0tefense Conferneighbors to feed the world, and
ence at PetropolisI which
at
the
same
time
provides
raising the
per

the results

standard

of living of our

iSSSSe'S
eral, Government's

seer

role

over-

of the capital market, I think

^ *s. generally agreed that the
requirements set by
statute

and

government

created

government
administered by a

c o m m

greater

b^ft

s s

ion have

confidence

and

is sought,
ev|ry obstacle
being put in the way of it; use
on a fair and equitable basis/
capital
is

The

reasons are

many

and

com¬

such

as yours,

haVe both- a singular opportunity
and

obligation further to stim-

late the growth, dissemination and

plex but among the most signifi¬ constructive application of capital
cant is the feeling, too often based in the economic,
process.
It, we1
on bitter experience, that the for-1
make

people l-a most favorable point of depart-1 investor and the
economy at large.

citizens and groups,

our

interest in the local

add

welfare, that I building

0ur

common

effort, we

r ,mT stona to the
of -a better world.

(1228)

September 25, 1947

Thursday,

29 (from 149.4 to 146.9) exports and gross national product}
began rising again' and by mid- dropped sharply ilii 1921.. If out
August had reached 152.7-—a con- exports currently were rclattueljf

March

I rate
of $5.4- billion per year, alpage 2)
being transacted I though during the first half of
comparatively high even in 1947 the rate had declined by
1941.; At that time some further approximately half.
>
•>'
;
1
1 expansion in the volume of
Some part of this inventory ex¬
busi¬
ness could therefore take
pansion has been financed by bank
place
without a corresponding expan¬ credit, although it is difficult to
sion in the private demand for know how much. A loan may be
I>ank
eredit.
Purchases
which secured by inventory because "that
normally bulk large with rising is the most readily usable collat; i ncomes
eral even though the proceeds of
(automobiles,
new
houses, new plants and equip¬ the loan are not for inventory acment) could hot be made because cumulation.
On the other hand,
these items -were not
available; an unsecured loan„ or a loan seand traditionally these items have cured
by ; bonds-or plant" and
given rise to a cohsiderable vol¬ equipment, may be an inventory
ume of bank
borrowing. Further¬ loan in Ihe sense that the funds

(Continued from

ume of business

was

•

Loans

have been rising rapidly,
Holdings of shorter-ttrm securities have been declining. Readily
liquid assets, by the end of the

siderable part of the rise being
explained by the rapidly rising

' v"'/'••/ '•■

"To'^aoss^NATiONA^PBODiicx
»; T0 S ewo™ Set Exportsurpiu,

trend of food prices and prices of
farm products. This is 22% above yeaf— asPct.ofGNP
July, 1946, when price controls 1919__ '
9.8%
were abandoned, and 94% above 1920_V
' 9.4
months. 1940. The latter figure means thai' 1921_<"
6.4

asPct.ofGNP
5.0%

42% of total assets, have
to 29%.
And this has

war over

declined

occurred in the space of

3.4

2.8

4*8

Bank Earnings Reflect Loan Rise
One result of this shift out of

^ntage pointsWof1 a

months of
-

■

"■ "

4.1

based

rates

«Annual

pre-

readily liquid assets has been some war years.
...
, :>
/
further rise in bank earnings even
That this is a disturbing develthough the deposit volume has opment few would deny That we
declined (because of the use of have a very real stake in mini-

6.6

194.7*"

level

double that of the immediate

•

2.4

1947.

•

first ""Seven

-AnA

••

*n *920 they would be

as *ar£e as

running at an annual rate hearer

to$93 billion by
mid-1^46, an ex¬
pansion of $71 billion. Individ¬

to $22 bilhon rather than fhe $14
bdbon annaal ra*Si*or
Sf
seven months of 1947,.or even the
will be used to expand
inyen- bank deposits nationally declined upon a very substantial^ prooor- $17 billion annual rate achieved
tones
In many cases
business 9%.
At the same time current tion of the population whose in-r h1 the-peak month of May. Even
may be generally short of work- earnings .of member banks
in- comes have risen mo^ slowlv our net export surplus so far m
ing capital and forced to borrow, creased from $2.1 billion in 1945 than the price levekTuclr an^n- 1947 has represented a smaller
It
quite probable, therefore, to $2.4 billion in 1946, a rise of flationary upsurge in prices is proportion of tot;al gross n;ational
that loans explicitly
reported. as. 15%. This was of course largely almost inevitably bound to create product than 1919, ^ough someinventory loans understate cob- the result of the shift out of low- for us in the years ahead some whatlarger than ip 1920. r
^
As a matter of fact,.if prewar
siderably the volume of bank yielding liquid assets and into the $ery intractable economic diffi^hit trie basis expand inventories, higher-yielding less liquid assets culties The problems posed bv a- relationships are any indication,
used to of recent
survey,
(loans, longer-term government recession are to no small extent a reasonable export volume curactually reported as inven- securities, and miscellaneous in- difficult in proportion to the ex- rently would be roughly $10 tQ

uals did about

lory loans represented 10% of all

vestments). In spite of the rise in cesses of the previous boom There

ings of $49 billion metamorphos^ business loans made by our Northan aggregate of $152 "billion west member banks,
although a
by June 1946.
larger proportion of mew lending
The rapid, expansion of bank was for inventory
financing^
loans which began in the middle
inese
data
are
moderpely

current earnings, net profits after is, moreover, some reason to think
taxes of member banks nationally that rising costs during this'oeriod
declined in 194-3 (for the Ninth will not be so easily worked out

more, a good deal of the necessary
•funds for increased war produc¬
tion were financed by more or
less direct advances of the
gov¬

ernment.
s -

The

cumulation of

liquid assets.

For

corporations, holdings of these as¬
rose from
$22 billion in 1940

sets

well. Their hold¬

came

therefore

some¬

of a surprise. 1 After
decade when private

prewar

mand for credit

parently do not represent
cessive

loans

was

period

in which

by one-third in

rose

loans

the

mid-1947

member

forced

un the

other

roug

loans

business

An unknown but

ap-

ex-

$11-billion. It was $5 billion ip
the latfe twenties or roughly 5%

of gross national product; Even
with tl$ rapid growth of trade re-

strictloSs in the thirties, exports

District they just held even). This of the economic system when re-

of course the result of two adjustments to less buoyant con- averaged 4% of gross national
First, net recov- ditions become necessary
product in the better years of the
eries
and
charge-offs
declined
The basic reason for this rapidlv decade. The current $14-$17 biH

was

developmeflts.

rising price level can of course lion export volume must therefore
be simply stated/ The demands be compared with a "normal" exhand, it is well appropriate to remember that this in the market backed uo bv pur- Port volume of perhaps $11 billion,

propoition
of
borrowing from
banks

all

Inventory

de¬

area.

bank

Quite

reassuring.

mild, and the
period when loans declined,
suddenly found ourselves in

the

1945

excesses of the boom

loans

midst

war

end

niizing-' the

seems almost self-evMent
apart from the hardships

into

thing

demption of the debt). From year-

war saw a tremendous ac¬

of 1946

war-loan balances for cash re-

are

business

this

50%, from $220 million in 1945 to
$109 million in 1946. It is not in-

half of itenh which accounted for ?A% of chasing power are substantially

unsecured,

possibly substan-

profits before taxes in

10%

l&#and

in excess of our
in 1946, is inevitably tem- produce. There
Experience has deippnover the long pull

curr!T£^U>

several rea-

are

given current rates of business
activity/
In agriculture the export market

is, of course, relatively more imthan for the economy as

1946, most of which occurred in
the final half of the year. It is by
ho means clear that we have yet

xiai

properly assessed the full signifi¬
cance of this rapid loan
expan¬

*V~ coveries and securities profits by year We sold abroad $1,408 million things can still happen in that
considerable, mhrgm.
During of U. S. merchandise, the peak But current estimates suggest
in^r^-PUrposesV
the 20-year period ending in 1941 month so far. This Was at an an- when the 1947 figures are added
;o7
s ln mind> roost banks gross recoveries and bond prbfits nual rate of $17 billion per year up, agricultural expprts will have
very watchful eye on for all member banks nationally a figure that compares very im- reached or exceeded the $4 billion
inventory position of their were $4.5; losses and charge-dffs presslvely with $4 billion in 1940 mark, about 14% of total cash
cust°mera.r realizing $8.3 billion. Any evaluation/of or slightly over $5 billion in 1929. farm income.
This figure is
2?
e?ce nd3 re,straint hQw: fixture * bank earnings prospects - Durim? the
month YMavi roughly 15% above 1946, eight
may later save headaches for them should be made with this expferi- w6i imported from abroad 35473
1940, and more than double

sion.
or

Yet there is

nothing magic

mysterious about it.

conditionswhich

substantial

credit.

First,

demand

prices

create

for

bank

Few will doubt that prices have
been. galloping
upward.
Some

have, set

records

whole. A lot of unpredictable

1947,

nous

•

If S »e betterbUJlon of the lateone ol
$14.
he
years
twen^

"theb^orrow^

for

tha?reason thfinven^ V Second,: operating costs have than $6 billion. Therefore by May
^mewhat lelfnm? been nsi.ng" recently somewhat of this year we had an excess of
today than Yt did ahontThZ ^°.re raPldly
earnings. And exports over imports, a net export

yea?. *

turn of the

Fourth,,
invested

businesses

many

substantial

have
of

sums

tiea- . ^ - • , . ,
;
Eve" ln *he case of agricultural

that^-1-to ,expect s^r?}^s: ^nning at an annual rate
howeyer» - comparisons
which^osfs"mTv mntin,!/')"5 °' $U /"io" Per"year7This' was *'th currently being illuminating.
"}!ier years.are exported is
lngs
°t™? t0 unquestionably inflationary. In- The H% of agricultural marketsmaller Proportion than prerise^more rapidly than, earnings, [comes were being, pa/d out "Vat an
in

„

■

than

i./wu

ri:ing.fat!an annual

30-40%

First, there is the widely adver- portant

were

sons.

that

money in constructing n.ew.build¬
higher altitude
ings, extensive alterations of ex¬
others, bub? the soisting ones,/and the purchase of
called
general price level;.'has
new ?equipnien.t,,; As. a matter of
done well enough. The Wholesale
price index, for example, had re¬ fa.ev American, business/last year !
spent in the
mained comparatively steady"1 from
neigh%rhood of $17
billion on new plaift and equip1942 to the first half of 1946. Not
ment; this year the corresponding
so since then.«In fact,
this index
figure will be in the neighborhood
rose
more during the
last seven of
$25 billion/ ;
months of 1946 than during the
While this is in a sense fixed
entire period of the war.
capital, some part of it has been
pital,
It was inevitable that the work¬
financed by bank credit. Banks
ing capital of many businesses, have lent
////.. Ba;ks
money directly, often
adequate for a period of compara¬
through some type of amortized
tively stable prices, was not ade¬ loans.
This undoubtedly helps to
quate for a period when prices

prices

strated

pos^ble bosses

More money is needed to transact
the business.

porary.

secVreT<? by °ther losses. and charge-offs exceed rer tised export demand. In May this a

rising
rapidly. Working capital, which
might be sufficient when prices
ers
For
are lower, quickly becomes inad¬
•picture looks
equate as prices begin to rise.
are

And

inventory.

carry

e?nment \prnH?fi?^k
y

V A period of rising business ac¬
tivity such as this produces four
general

part oi these unsecured loans

also

piore per year.

rate of

working capital was required, and
bank credit supplied a substantial
proportion of it.

Second, during a period of rap¬
idly rising business activity many
firms find their sales and. produc¬
tion rising more rapidly than re¬
ceipts because of a substantial
rise/ in ^accounts receivable.&• They

Jxp^mcthe.aubsfaDtial amount of
term
business
loans
made
by

banks, loans with
r-od

excess

maturity

one

pe-

year.

Much of this expansion appears
to have been

justified. Needed repairs and replacements could not
be

.viuf/iucino

ouggwt

tAAC I

CUliaUIXICl S ' Uti- I ' ' •

WWWglJlt.. uy

distinct possibility ttiat the prof-f ciause the merchandise was
itability of bank operations Jhasr sent overseas. It- had the

same

development in 1946
rise .to a heavy .de¬
bank credit was the

gave

mand

for

themselves.

well

^ 5..1Ir, —.
escane

the

feei*

.c«u^ attention gw^ tq

Banking. Prospects and Price i:;«
Inflation
The really stiff question posed
by my subject is one which is
perennially of concern to bankers,
b"t the current shift into risk as-

shrink markedly throifgh a. de-'
e

{

exports/The question has

become

with the

the

pertinent

11% decline in exports

from May°to June and the further^■
7% decline in July, declines at
least in part reflecting the mina-

$226

billion.

This is perceptibly

responsible for the present infla-

above the war peak of $221 billion tionary situation.. It seems not to
achieved exactly two years earlier be generally realized that the ra.and considerably more^than double tio of exports td our total gross;

rapid rise in the value of
These data spell put; the plain! the $100 billion of 1940.
;
national product sb far in/1947
business inventories.
During the, truth that the days of riskless I; The wholesale price index, after (first seven months) is materially
latter part of the year merchanj Ranking, if they eyer. existed, are declining almost imperceptibly for below 1919 or 1920 and approxidise was going into: stocks at the.
fading rapidly/from the picture, eight consecutive weeks following mately equal to 1921, though both
very

iwtcii

The third

rannnt"

rrpniflGntion given td

pie to produce war goods which
foreign tr aae .
,
y
could not, of course, be purchased
L iin(J where is the
with the income received. In each ^,y
n .
. difficult to locase the purchasing power paid troubie? It is not dilticuit to lotween earnings of CciPiLcli invested OUl was ail dressed up and with ca Tr»fTci + iAriQr\r
caxiiiuga oi capital lIlVKSiea
UUU Willi
nrpqqiirpe*
aricinf#
out Was all artoocu
*
in banks and in other types of no place to go.
.
.
fopJien Trau„ are arisme
trade arp arising
businesses may be les3 biased in
Recently there has been wide- currentl
less out of abnormally
businesses may be less biased in tread
Recently there has been wide- currentiv ]ess out of abnormally
favor of the former than was gen- spread rt«rn.«.on about the nrnh-1 la
discussion »hn„t the prob- )arge e^ports than from an abexports than from an aberally considered probable some ability of a recession if this net normally lov? volume of imports
noJLanJ ]0^ volume of imports.
time ago.
export surplus should disappear or n0™a the time
At
exports reached

sets has accented its pertinence, torial dollar shortage crisis abroad
That question, of course, is: What
Now there can apparently be
of the economic situation and the little doubt about the gravity of
economic outlook generally? Thisf the dollar-shortage crisis. Nor dan
is subject matter for a whole sep-, it be denied that an abrupt shrinkarate session, but we can scarcely age in exports would have a dedodge it altogether in any analy- pressing effect on our domestic
sis of what lies ahead for banking, price ; level. - The evaporation of
lt is reasonably clear by now the $10 to $12 billion dollar mar..three quarters of 1946 increased may prove to have been unwise that the inflationary, forces in the ket, which our net export surplus
It has always developed in other econ°my have been persistently represented at the peak, is not a
by roughly $7 billion. Some of
business booms that many
parunder-estimated.
•
trivial mattereven fpr a $225' bilthis is offset b,y a corresponding
National income expressed in! lion . economy, ^ particularly - if it
increase on the other side of the ticularly small and untried firms
have overexpanded their capacity' dollars has been rising so persist-! comes so suddenly as to preclude
ledger.in accounts payable.
But!
betting on an improbable continu- ently that broken records are orderly readjustments, /
.
it does; not cancel out for many
ation of temporarily inflated boom scarcely news. Our gross national;: j- Qn - the other hand, there is'
firms, and they must often bor¬
markets.. The ersuing readjust- product in the second quarter, the grave danger of too exclusive emrow to cover this lag of cash re¬
ment to a less affluent
economy last for which data are available, phasis on the extent to which our
ceipts behind sales and operating has then
created difficult prob^ was running at the annual rate of currently large exports are solely
Which

there should be a further material
inflation of bank credit.; If the
peak has been reached, it is'highly
probable that the relationship be-

made

lems for their creditors

already reached its crest unless inflationary effect as paying peo-

during the war, and a
bulge of expenditures for this purpose following the war was to be
expected.
Many, firms, furthermpre,, could' justify considerable
find themselves in the position of
expansion on the basis of the posttemporarily financing their cus¬ war markets
confronting them.
tomers-added purchases. For ex¬
On the other hand it cannot be
ample, receivables of all U. S.
denied that some of the expansion
corporations
during
the
final

expenses.;

being co™2

TnrP|„n

* Io^!°1Unaa °f
.ttie fune exports reached
peak
at a
i

billion

annual

rate

imports

^e5e,.^nm|

^-5 ^JJ1- £;/eas°"a„ ® aT "ij
otJlmp0",;

SiShtlv
binmn, pernaps sngnuy rao ,
Nowhere is this better illustrated than in the case of(?foQ<J
prices. The part that our substanmore

tial food exports have played in
high food prices is generally ^recognized. We sometimes forgetj

however, that we normally/im-

port substantial amounts of food,
much of which is not currently
available. For example, meat imr
ports normally equal about ? 9%
of our federally inspected sldugh^. Currently they are negligible,
The price which Ihe consumer
pays
ineat is^ tnejr^i»^e .cor,'respondingiy nigner,; r/

' Since the thing that creates
pressure on prices is riot "the "Size
of exports but their excess over
imports, we would do well to focus -more attention on ways to
enlarge imports if we wish to

riiinimize inflationary pressures
from foreign trade.
■ / Temporarily our,,appallingly/
low level of imports is undeniably

.Volume 166
be

THE

Numfeer 4632

explained to

small

wilr

BUt1

low

just that much to the already ex¬
cessive
volume
of
purchasing
power, v Second, the forthcoming

even

so,

uneconomically
after foreign production

•

them

among

lard).

■

wheat,

market for

items—at

: on

many

time when de¬

is excessive,

mand

;

;In view of these developments,
surprising that prices

it is almost

and

cotton,

restrictions

the

broaden

scarce

continue to pay higher prices and
some otherwise profitable exports
will
be choked
off
(important

taxation

credit will tend further

consumer

will

consumers

the

elimination

recovers,

•

the

of the last year in this
country gives one the uncomfort¬
able feeling that our
imports^ may
events

continue

observation

(1229)

create

further upward pres¬ amount of goods and , servi
sure on .prices.
First, the cashing which governmental units require
in of terminal leave bonds adds from current
production on* the

ex¬

it by1 the • simple fact that the
>reign goods are not?there to buy.
;

CHRONICLE

have not risen

For

even

rapidly.

we? apparently have to

that

thank in part one powerful check

one

hand and
amount

from

the

ments

the

other hand

funds

(Continued from page 14)

removed

States, to offer reasonable ,I assur¬ tween the
filing of annual reports;
ance of an
adequate auction mar¬ the listed securities are
and other' nontax pay¬
exempted
ket in the shares on the
Exchange, from the requirements of the
government. Currently
income

stream

through

that

the latter is exceeding the former
at an annual rate of somewhat

the

securities

would

proxy rules and from the opera¬
tion of Section 16 of the Act

deemed eligible for listing.

Assuming that the issuer can
$13 billion.i / t .
w
this $13.4 billion govern¬ clear these hurdles and other per¬
tinent exchange
mental income surplus plus the
requirements, it
$11.1 billion net savings of indi¬ should. then consider the provi¬
viduals which has offset the net sions of the Exchange Act.
This
Act complements the provisions
excess of exports over imports of
$10.6 billion and the net deficit bf of the Securities Act and .was
private business on investment adopted to prevent unfair,- man¬
aecount of $13.9 billion.
A bal¬ ipulative and fraudulent practices
over

Section

16(a) requires that offi¬

cers, directors and certain bene¬
ficial owners of listed securities

file

must

reports

transactions

equity securities of the issuer;

section

16(b), subjects
shortswing profits in equity securities
of the issuer, realized by such
per¬
:
These data at least suggest the
sons within
any six-month period,'
possibilityJhat our current infla¬ of all units of government. This is ance sheet of these deficits apd in connection with trading in se¬ to recapture by the issuer, and
tionary pressures are arising to a not the same-thing as a budget¬ surpluses for the second
16(c) interdicts certain
quarter curities both on exchanges and in section
; greater
extent from domestic de¬ ary * surplus. Rather it measures of 1947 Would look
something like the over-the-counter market, > It short sales of the issuer's equity

Domestic Demand Is Also

Excessive

•/

;

j.1 ;';i

otherwise

our

excessive de¬
the current $13billion-per-year "income" surplus
.

mands. ..That is

■

mand

has

than

been

recognized*

generally
It is ndt ineluctably

certain

that

extension of for¬

continue to ••Un¬
present price level;

eign relief "will
derwrite

the

is it certain that

nor

between

t h

■

this

(in billions):

Deficit

Surplus
Personal

disposable incomes-—Consumption expenditures

also designed to prevent the
excessive use of credit in security

changes which give no
readjustment could well
disproportionate disturb¬

Net

savings

159.0

Gross

$11.1

Exchanges Must Register.

$14.9

business investment___—

28.8

create
ances.
•

is,

Net

the

the net export surplus
major inflationary forces
as

imports.—-

10.6

receipts
Government expenditures
Net

surplus

mission.

42.3

savings———

attempting
ceipts.

13.4

consistently since the end
of the war planned a volume of
expenditures in excess of receipts
income.

ures

Since

income

meas¬

exactly the value of current

production,

attempt on the
part of individuals and businesses
to
spend in excess of receipts
means

any

demand in

duction

and

excess

therefore

prices.

pro¬

rising
•

the

$24.5

——

their

All

second

quarter of 1947
retained earnings and deprecia¬
tion and other reserves of private
businesses were running at an an¬
nual rate of $15 billion. But at

figures at annual rates.

seems

extra

$13

apparent that if this
billion of purchasing

power, or any

it,

were

made

substantial part of
available

con¬

and businesses

(primarily
through tax reduction) the prin¬
cipal
resultl would be further
price
increases.
Since we
are
currently pro^ucing^ at capacity,
it is obvious that consumers in the
sumers

aggregate
crease

ing.

could

their real

not

greatly

standard

in¬

of liv¬

doors

everyone that bur
open
for conferences
on

are

and

and into

of the recent price inflation
be explained by domestic
and supply relationships

large security holders.
extent

and

organization.

tion

statement

Only

analysis of particular
problems, in the light of the pur¬
poses
of the law, can help us
reach informed judgments.
The
ment

registra¬

under the

can

detailed

pany, which has filed

To what

provisions

respect
of various,
kinds of foreign securities cannot
be determined without a whole¬
sale survey of-the problem..

It should be noted that any is¬
suer, except an investment com¬

than has been generally realized.
Both businesses and a substantial

these

enforced

•

demand

important aspects of the

conduct of their managements and

volume of imports than from ab¬ istration
provides extensive in¬
normally huge exports.
formation
about
the issuer, its
Fourth, it seems probable that business, finances,
management
more

been

••

free
of

ideal.

Securi¬

proportion ; of 'Consumers
are ties Act
and which has no securi¬
purchasing power can be spending beyond receipts; a con¬ ties listed and registered on »any
released when demand falls short dition that spells rising
prices exchange, may, if the registration
the same time private business of our
productive capacity, it can when production cannot be ex¬ statement has become
effective,
: was
spending on plant and equip¬ contribute substantially to soften- panded. The boom will end when
file
an
application for
listing.
ment and inventory increases at4p&'the recession. If released pre¬ this propensity to spend beyond This consists of a
copy of the Se¬
an annual rate of $29 billion, thus
maturely, - it-, will merely - drive receipts (by using liquid assets or curities Act statement, a
descrip¬
running a .deficit on investment, 'prices higher during the current going into debt)
ceases, but it jis tion of the securities
being regis¬
account of $14 billion. ' ;
1;
boom; and thereby accentuate the no more possible now than it has tered and the
facing sheet of the
Individuals onbalance were subsequent decline. If this should ever been in the past to predict
appropriate form with required
having by mid-1947 at the annual occur, it is by no means certain scientifically its timing. ; - .v • j
v
t
'
;< •.. £ "
signatures,,
:
rate of $11 billion. It is well to that this recession, would, be iof
;
^Recognizing this, bankers gen¬ ; Registration'under this Act visu¬
remerhbef, however, that not. all the
comparatively ■>:. mild
and erally have pursued very prudent
ally becomes ' effective automatiof these funds are available for harmless
variety so frequently lending and investment
policies, cally 30 days after certification of
Outside investment. The purchase predicted earlier this: year* ; | * - with due
regard for the long-run its
approval by the exchange.: The
of houses, for. example, is also
outlook. In so doing, banks have
Commission has no power to pre¬
Conclusions
saving although it also constitutes rj"'
/.
J
aided - materially
in * financing vent the listing and registration
a demand on productive capacity,
It is time now to pull together much sound and necessary busi¬ Of a security so certified,
e^ept
j,, And it is well to remember that the
ness
expansion/.
where the registration statement
separate threads of our com¬
one consumer in four even in 1946
However, there seems to be lit¬ or some act of the issuer fails to
ments
on
"What's
Ahead
for
was spending beyond his income
tle reason to think that now, any
Banking" and see what we have.
conform to the Act or rule of the
more than in
1920 or 1929, bank
< disposing of liquid assets or goCommission
adopted
under' it.
"First, there has occurred in loans on too
thin a margin or
frig into debt)'. These "dissavers" recent months a rise in the rela¬
The responsibility for determining
made to finance excessive inven¬
disposed of about $10 billion of
whether to admit a security to
tive importance of risk assets of
tories or imprudent expansion of
liquid assets in 1946, using about
banks. This ha^
listing rests with the/exchange,
60% of the proceeds for living ex¬ decline1"' in1' the stemmed from a plant and' eqtiilMerit 'will not cre¬ but the application must contain
shorter-maturity
penses and the acquisition of dur¬
ate subsequent problems for both
such information as the Commis¬
securities and a rapid increase in
able
the banks and the borrower.
goods and the remaining
sion may require as necessary or
bank loans.
40% to purchase houses and other
Such earning assets
acquired appropriate in the public interest
Second, the loan expansion has
types of investment.;
i
or fbr the protection of investors.
resulted from characteristic boom during the boom will—in the cold,
It is not improbable that even
grey light of
a
price decline—
developments:, expanding inven¬
Forms for Foreign Issues
neither be earning nor assets.
currently this consumer "deficittories;
outlays
on
plant
and
Spending'! is an added inflation¬
•.
To assist foreign issuers in this
equipment; swelling receivables;
ary potential roughly equal to the
registration procedure the Com¬
additional , consumer borrowing,, Bonds of Buenos Aires
much-discussed export surplus. '
mission has adopted a few pre¬
and a generally rising price levbl.
Drawn for Redemption
scribed forms, namely, 19 through
With this tendency on the part While
much
of
the
additional
*
Holders of Province of Buenos 21, and 19K through 21K, which
of both businesses and many con¬ bank credit appears to have been
sumers to use their credit or li¬
justified by the need for business Aires, Argentine Republic, 4%- are to be used in connection with
serve

impressing

been1 filed by the issuer With the
exchange in question, unless dur
plicates of the application have
lion below the current level. The been filed
with the Commission,
major inflationary pressures from and the
exchange has approved
our foreign trade
therefore arise the security for listing and regis¬
more
out of an abnormally low tration.
This application for reg¬

Source—"Survey of Current Business," August, 1947,

have

Total

spend on balance
aggregate re¬
All things considered they

than

have

study of problems presented
by foreign issuers.
v ;
The Act further provides that
Secondly, it is apparent that the
Acts administered
no securities
by the Commis¬
may be admitted to
sion penetrate into many details
trading on an exchange in the
of financial recording and finan¬
United States unless a
listing ap¬
$24:5
cial
presentation
by companies
plication in prescribed form has

$55.7

nesses" and individuals have been
-

detaJs

measure make up for this lack

$13.9

Government

still 'arise out of the domestic seg¬
ments of the economy. Both busi¬

•

of exports over

excess

Large

impracticable without specific ex¬
amples. Perhaps I can in some

Under the Act all national se¬
curities exchanges are required to

time for

Net deficit

;
":vA;/;/•
/Summary' ::/"/'//• A

lineation

profits
__

trading and to provide truthful
Several things are apparent
and *. adequate
information con¬ from this
cursory review. First, it
cerning securities 1 i s't e d and has been
extremely sketchy. Re¬
traded on exchanges.
finements of concepts and the de¬

$170.1

surplus—.

Undistributed corporate
and other reserves

securities.

was

decline of

exports of some magnitude would
precipitate a major depression, al¬
though it cannot be denied that

abrupt

difference

the

the other hand, this re¬

It is

itself.

for

international

credit

justify

an end
genuine basis

international

must

move¬

worthwhile

not, however,

cooperation

itself

paying

proposition.
Our government has
made many decisions to facilitate
such cooperation.
However, we
should not .ask our investors to

place their havings in foreign

en¬

terprises while relaxing or waiv¬
ing, any of the standards of our

Acts .which

are

protection.

The standards which

their fortress

raise; prices.
or

mear

With production at
capacity levels,

existing

particularly for hard gbods with
war-legacy of deferred demand,
any -tendency
and any policy
-Whichjpaade possible ah accelera¬
a

tion
the

rate
availability

the

of spending or
of
purchasing

expansion, it has always devel¬ 4%% External Readjustment
oped in previous booms that/some Sinking Fund Dollar Bonds of
borrowing businesses have
not 1935, due April, 1976, are being
been able to adjust to less affluent notified that all of these bonds
presently outstanding will be re¬
conditions.
deemed through the sinking fund
Third, this shift into riskier as¬ on Oct.
1, 1947, at 100%. Re¬
sets accents the banker's interest
demption will be made at the
in
the
current
price inflation. head office of the National
City
This inflationary pressure arises
Bank of New York, or at the prin¬
out of both abnormally large for¬
cipal trust office of the Chase Na¬
eign and domestic demands. There tional Bank of the
City of New
is

some

evidence that the role of

power

the export demand in the current
boom has recently been overem¬

record—and painful, common ex¬

Relative to our grpss
product exports are ma¬
terially below 1920. With a $225
to < $230
billion ; gross national

is'bound to be reflected
primarily in rising prices. That phasized.
jguchf has occurred is a matter of national
perience. "/■
v

And during the

ture

two

further

immediate fu¬
developments

initial listing and registration and

the submission of

annual reports

to keep the information on file up
to date.
;
•"
"j"'
.

For

the

purposes

nationals

countries

sidered

quently,
10 and

of '

and

North

Cuba

are

this

Act,

American
not con¬

honest

trary, they
to

no^

and have

been, barriers to the conduct
business—national

international.

quid assets; to supplement their
rate < oL spending, one or both of
two (results was inevitable.
This
net excess of demand would eithqr
call .forth additional production or

I havC outlined are?

not

what

are

essential predicates

every

securities market

needs in order to

joy

public

survive, and

confidence.

maintenance

that

places

for

all

the

success

organized exchanges

ing

en¬

confidence

depends the continued
our

Quite to the con/

trad¬

investments,

domestic and foreign.

Preserva¬

tion of that confidence must be

guiding principle not only to the
Commission
manage

but

our

those

who

great market places.

Cyrus J. Lawrence to
Admit H. K. Halligan
Howard K.

Halligan will be ad¬

mitted to partnership in Cyrus J.
Lawrence & Sons, 115 Broadway,
New York
New

York

Oct. 2.

City, members of the
Stock Exchange, on

Mr. Halligan has been as^

sociated with the firm since 1946.

was
President
foreign - issuers;
conse¬ Prior thereto he
to these issuers Forms of General <Gas & Electric Corp.

1 OK would be applicable.

Foreign issuers

filing applica¬

tions for registration

on Forms 18,
19, 20 and 21, because of their
special
character
and
circum¬
stances, are exempted, from cer¬
With Harris, Upham & Co. tain requirements of the Act to
Laird, Bissell & Meeds, 120
(Special to The Financial Chronicle) 1
which' all other ; registrants are
Broadway* New Yorlc City, mem¬
f
For exampler they are bers of the New York Stock Ex¬
OMAHA, NEB.—John J. Bohrer subject.
has become affiliated with Harris, not required to file current reports
change, will admit Newcombe C.
Upham & Co., Omaha National revealing the occurrence of cer? Baker to partnership in the firm

York.

product,15 our "normal"
exports
would be only about $3 to $4 bil¬ Bank
Building.

Laird, Bisselt to Admit

Itewcoiiibe C. Baker
.

tain events in the

corporation be¬

today.

•
.

THE

(1230)

COMMERCIAL

this way

As WeSeelt
»

preventive measures are preva¬
Wallace takes great pains to 'tell the Amer¬
ican people not to forget for a moment that he sees this
country today in the hands of the "capitalistic reaction-*
aries"; that (he "knows" Jthat capitalistic -reaction inevi-(
tably destroys itself; and that unless "progressive" ele-'
ments succeed In forcing a broad change in policy a

Henderson,

the/Roosevelt .regimes.

quondam noise-maker

But there

Mr. Henderson has a

has

ing

runs, a

world

can

of the sort quite'adequately. It would be difficult to
precisely how seriously the rank and file of the voters
of the nation still take them, but for those who want higher

Depressions

complex and at

many

points

is not

welj^understood. He who would give the impression
he knoWis^just what "mistakes" to avoid and precisely

bottom of

depressions is simply de¬
At any rate, even at the

depressions in this country

have always been

infinitely better off than have such, peoples
even

good times.

the Russians

But the basic nonsense of most of these theories is,
perhaps, best demonstrated by the remedies suggested
by those who hold them.- Of course, the British who feel
that we must give them largely and apparently more or
less indefinitely of the produce of our energy may he
largely ignored. We have yet to hear of any Britisher
who believed that his country and his fellow-subjects
would best seek their own welfare by shipping large
quantities of British produce to/other and less wellsituated peoples gratis.
The Britishers who reason in

times.

past
the ratio, at some¬

years

during 'the -calendar period,
16 times.

connectiom?%etween -interest

some

re¬

dustrial

year.

Theories

idea

old

was

that

in¬

stock should :sell

common

at about 10 times

earnings.

Where

it originated, and

how it became
generally accepted, Is a matter on
wnich
historians
of
analytical
techniques disagree. \ The most
commonly accepted idea,-however,
is

that

those

stable and

less

emotional,
comfortable

assumed that

6% when

I, it was
yield

stock "Should

paid out 60%
of its earnings in dividends and
returned 40%
of profits to 'the
business, which was supposed to
be good corporate practice.,
»
i!
a company

Certainly the 6% yield idea is
obsolete because of changed inter-;
est

research

and -careful

rates;

shows

that

there

such

thing as a general practice of pay¬
ing out 60% of earnings in divi¬
dends. During the past 10 or 12
years a
large number of estab¬
lished companies paid out 60% to

100%^ of "profits

to 'stockholders.

The

old

"dead duck."

10-times-earnings theory

;

More .recently, .serious analysts
have

and

than

1924.

late

Rece

nStudy

earnings

^different

cbmftje.even in the

panies.

This is
case
of public
companies,
per

abstract attempt to
tility operating
is
the
most
cheapness of stocks
earnings, the usual homogeneous
grgpp of equities.
of the priceA recent stu
approach is to compute price-'
earnings ratios against the Dow- earnings ratios
|360 representaJones Industrials. Articles of this tive stocks sho
/that more than
kind already have appeared in the half currently s
for less than -7
"Commercial & Financial Chroni¬ times earnings
d that only 92
cle."
sell for 10 times
rnings or more,
■
■
the

fairly wide range of
to probable
1947
earnings on the Dow. Some think
the final figure will exceed $20,

estimates

Stock's repres

machine

industrj
manufacturing,
and machinery

and others think it will be -around

tainable

$19. -Accepting the lower esti¬
mate, the Dow-Jones Industrials,

selling at nine
times earnings. Probably earnings
will be a little over $19, so nine
times earnings is about right with

ing the washing
textiles, paper
eel
production

[

ently

are

ob¬

times earnings
sells at about

171, would be

age

for

public

theimost part at ,6
or/less. The aver¬

utilitpoperating stock
Up times earnings,

and the average

Hi stock at about

7,2 times.

the Dow at 176.

Logical

Going back over the record, and
accepting figures used by Ben¬

jamin Graham in the "Commer¬
cial
& Financial Chronicle'' on
1945, this is the lowest
price-earnings ratio prevailing ?at
any time since 1925. At that time,

There
about
the

leg

Perentials

'happenstance"

lack

staj

gested by -the
lead one To '1

jardization sugWe data would
?vei

times in

past 30 years.
T'he

only five of the

Dow-Jones

...

Industrials,

1926, have been above jlO
times earnings £11 of The lime in
since

every year

but three.

American

Youngstown
Rolling
Mill
Sheet
&
TubeJ cu. S. Rubber
jthlehem Steel
and
Goodyear,

year

of high

industrial

bull market/

;

past 33 years very low
to quite low price-earnings rsitios
prevailed in brill market years
like 1916, 1919, 1924, 1925, 1926
and T937.
In 1946, the average
price-earnings 4ratio was lower
In

the

than in

wise,
ratios
years

1938.
some

1943, 1944 or 1945. Xfkehigh price-earnmgs
prevailed in bear market
like 1920, 1930, 1931 -and
This theory Obviously has
very

merit.

California, Stat
Jersey
and r
Amerada and
Chemical

and;

Union Carbide J

For a short Ternational Bt

Non-Recurrent

Earnings Theory

It is closely related "with ithe
theory Of non-recurrent earnings,
so
Wideiy^tiisctrSsed in popular
market literature during the last
half of 1946 and the first half of
1947.

This

theory

would

divide

the

earnings of any company into
two parts, the current and non¬
recurrent, and value the recurrent
or dependable Earnings at a rather
high multiple, and • appraise' the
non-recurrent part at an exceed¬

ingly low .multiple. Dor instance,
if the XYZ Corporation has an
average earning power of $4.06
share per annum and current¬
ly is earning $20 a share, the $4.06
of1 earnings might be worth a
per

Southern
Pacific,

multiple of 10, or $40, whereas the
other $16 Of earnings might • be
worth, a, multiple of 2, or $32,
making the ktock worth'72^ which

Union Oil of

would be 3.6 times current earn¬

Food:

ings

than

ratios

price-eari

at 8% times earn-,
U.
S/
when ht their low for the. and
American
year. The ratio has been higher, and
than
9
times
at some
time In Railway
and
every year .since 1919, and lower; Continental Oil?

the Dow sold

activity; and [thus point out that
the highest price-earnings ratios
usually appear in 'bear./markets
and
the
lowest
price-earnings
ratios -often occur near the top of

There is

Oct. 18,

if.4

in relation to

discourage him from assuming normal risks. But the

his followers.

Date.

Available

-any

measure

tempt the individual businessman into unsound ventures

was

half of the time in the

twenty

enterprises rather than to do all that is possible

ceiving himself

any

The

Stuff and Nonsense

to follow to banish

than

always have been since modern in¬
dustry got under way. They doubtless will appear in due
course in the future.
It would be a great thing if we knew
how to prevent them,) or to mitigate their severity—other
than by
encouraging .careful and prudent management of

courses

market

Too many dnvi
arrived, therefore, to dis-<
jtors assume that
cuss the all-important phenomena, all stocks sell
^about the same
of low stock prices and low priceitio.
Actually,
price-earnings
earnings ratios in language .other there is a wide' variation in the
than that of the salesman., ,rV....
& market places
appraisal thie st<

from time to time there

what

and at the bottom "of the 1942 bear

time has

greater outpourings
of ether policies of a
like sort, they are: always a handy weapon. Without much
doubt they have ^served the unions well during the past year
or two. It is certainly not inconceivable that they will be of
great use to the farmer during the next year or two.

that

has exceeded

home you could have

same

times; right after Pearl Harbor
in 1.941 it got doWn to 9.3 times;

ings does not interest investors
enough to make them act. The

wages, shorter tours, larger subsidies,
of our wealth in Europe, and a number

modern business mechanism is

time

9.9

at three times or five times earn-; 5.07%

know

all this is stuff and nonsense.

of a;

spun fine theories
aropnd
the idea that the price-earnings
price-earnings
ratios.
The
ratio on industriaLshares moves in¬
current yield cu# AAA bonds is
versely with the [Federal Reserve
computed by Standard & Poor's
Board Index of [Production. They
at
approximated 2lh%, which
contend that investors will pay
sales arguments in the hands of compares with a*Paverage of ap¬
brokers and market letter writers. proximately 5% 4a 1917, a high of pore for a dollar's worth of earnin a poor business period
The fact that a stock is selling .6.40% in 1920, and an average Pf jings

poses

and

live.

time in .1937 the fatio declined to

clothing have doubled,
New "low priced" automobiles (if*
you are lucky enough to get one)
cost about $1,650, compared with
around $950 to $1,000 before the
war.
If you need a new six-room
house, the chances are that you
will have to pay $15,000 to $18,000

startling fact is re¬
peated often ^enough, it ceases to
be challenging,
"[that is one rea-;
-son why low price-earning ratios
have been signally ineffective as

At any Tate, predictions of this sort are not wholly in¬
effective political weapons. They have served several pur¬

When

designed to end it.

individual

bought for $7,000 to $9,000 in 1939.
The
prevailing9^ times earnings
buying power, of the dollar -ratio is even mort startling when
has depreciated everywhere ex¬
placed
in juxtaposition against
cept in the stock market.
;
f interest rates. Mere ought to be

which was substanti¬
ally prolonged by the New Deal nonsense ostensibly

Of course,

The

bad enough in Its own right, but

strange world in which

for the

supposedly Marxian doctrine and to what degree Lord
Keynes and his followers are responsible for the follow¬
ing that the calamity howlers appear to be able to aW
tract in this country.' Perhaps it is mostly a night- "
mare-like recollection of tthe 1929 depression, which was

The

(Continued from first page)
types

is true, his • reason¬

depression is las certain as anything in this
know to What extent this

Some

Significance of
Low Price-Earnings Ratios

of the nation.

be. fit is not easy to

market for almost

The Market

The point, according to his philosophy, is that in either
ease the nation is not and would not be communistic in

So long as this

become

the product

times before World War

would say, if he has not in¬
already said it, that it makes little difference-—except .possibly in the timing— whether "reaction" is
in the saddle in such a government as ours, or whether

sense.

market upheaval. There;has
been -no real "upheaval"
in the

Of course, Mr. Stalin

the Russian

times

cent

This

deed

at the head

rather than
are many

precisely what. Mr. Wallace would do to prevent
this approaching "lulu" or "granddaddy.^ One sus¬
pects his course of action would not diffeiftoo greatly
from that offered by IMr. Henderson and his associates
who apparently are skeptical of European aid as a cureall.
They want to reinstate all the controls and what
not of the war period.
;
:

Chairman of the "Americans
for Democratic Action," and former Housing Expediter.
The New Dealish tinge of this organization and of those join¬
ing Mr. Hendersoft in this recerit outpouring is clear enough.

were

and' 3.9

times

to say

Wilson Wyatt, National

Mr. Wallace -himself

are

between

other uses for the idea. As
already indicated labor has been making extensive use
of it for a good while past.
It would be a little difficult

vocabulary reminiscent of General .Johnson. What he sees
ahead is not a depression, even a "lulu" or some sort of a
"granddaddy," but -a plain simple "bust." It need only be
added that Mr. Henderson [was speaking in his capacity as
Chairman of the Executive Committee of the Board of
"Americans for Democratic Action,"-and that one of his
associates was none other than Paul Porter, another former
Chief of the discredited CPA of other years, while another
was

same

;

Leon Henderson

"paired" at Just about the
price-earnings "ratio. There
seven steel Stocks which, sell

are

•

■

depression which he describes as a "lulu," or (sic!) the
"granddaddyof'them all" can be expected with the first
change of wind; The political motivation df all this talk ;•
is too obvious to need description.

one

goods

obviously n^t "disinter
-.t"kl•-'
Prosperity and Profligacy
our

Well, they certainly earnings, 18 oil stocks sell ; be¬
tween 6 times and'7.9'times earn¬
suggest a strange assortment of .steps to remedy the situa¬
ings, 19 Steels sell at between 3
tion about Which they complain.;»Some of them
join with the- times and 5.9 times earnings, and
British—and it is surprising enough that many of those of' 34 out of 64 public utility operat¬
whom one would expect better things are to be found in this; ing company issues are appraised
at between 9 times and 12.9 tijnes
category—in the idea that we must export to remain pros¬
currently - indicated [per
share
perous—that is', export even if we are hot paM'for What We profits/ - ;
"
ship abroad.
One sometimes wonders H thCy are 'not by
Apparently
^investors
h a v e
implication saying that it is better not to. get paid.- This thought out what they regard as>
notion is on the whole the one held -most strongly'in rela¬ a proper appraisal for earnings of,
tively conservative -circles/ Erom it the
Marshall varying quality. Currently pre^
vailing price-earnings ratios, in
Elan gains many of its adherents.
The same lis true also of other words, are the result' of
the so-called Marshall Gap plans.
months of subtle, ;quiet thinking/
''v.

lent. Henry

Thursday, September 25, 1947

But what of our own wiseacres?

need of taking queer

Then there is Leon

about

ested."

(Continued Trom first page)

:3r

FINANCIAL -CHRONICLE

ires,

^Uthern
.

?Oil

Fair

of .New. ings. 1

•:

...

Company* ...This [reasoning
was
applied,
Oil, Monsanto often subconsciously, to nigh steel
Manville, and copper company earnings in.
In those years
^Carbon and Tn- 1916 and 1917.
ra s

Machines all

market

analysts constantly com-

Volume 166

Number 4632

Capitalism

I reflect

Socialism ant

Rlained that stock prices did not
earnings.
Conservative
% analysts used this line of thought
* as
an argument against purchasihg the shares of department
£ Stores and distilling companies in
first
not

■-

half

The

•

absorb

one

about

spiral still is try operation but it

they are right, a great
investors think that the

home

can't

would

forever.

There is

maladjustment between farm in¬
nfany
present'per iod of high earnings is comes and industrial incomes. The
sdecidedly : abnormal
and
that. inability of foreigners to pay for
stocks right now ought not to selr the things they want already is
6at "conventional" price-earnings leading to a sharp decline in ex¬
g ratios.
It is interesting to note, ports; Most other national inflar.
eni followed by a
however, that the possibly even tions have;
more
non-recurrent
nature
of period of de ition, and the idea
id States must defarm prosperity has not prevented that1 the Um
flate event*
a much higher market, relatively,
ly vis widely held,
for farm lands and ranch prop- In
short,
ce-earnings
ratios
!' erties. Can it be that the investor. vary invei
y With risks.
The
*
,

ijn common stocks is a more logi- risks are obvious, so price-earn¬
"J cal animal than the investor in ings ratios Are low.
^

real

estate?

It is

There

ing

theory of non-recurrent earnings

the:

theory of abnp0naL-£is£§,

that they
necessary
to
sell
change

In effect, it'is alihost impossibleto

separate the two. As Dr. Nadler
recently
said,
"Americans are

ments

V' The United States is

Tinding^t

are

their

American

invest¬

securities

order to obtain money

with which
to buy food, clothing and machin¬
ery, This leads to a constant drib¬

; prosperous but worried."

island

influences

operating within
the market itself; Foreign coun¬
tries are sb-shoht of dollar ex-

from the

very short step

prosperity and wealth in a
: world of depression and woe. Our
.prosperity and wealth not only
exposes us to the jealousies and
antagonisms of other peoples, but
* even invites military attack.
Furfhermore, there is a cold war of
Ideologies
in
progress
which
might flare up into a hot war.

ble, and sometimes a stream, of
overseas liquidation in our mar¬
ket.
'
**■ ;:1
■
The

second factor is high

gin requirements.

mar¬

The American

stock marketas: unable to absorb

lgrge a volume of selling on a
cash .basis as it would be able to

WHERE STOCKS SELL IN RELATION

g
~

(Summary Of Position of 360 Selected Issues
Price-Earnings
No. Of ' Ratio Group
Issues Times Earnings

■

Under 3

TO EARNINGS
as

of Aug. 29, 1947)

Types of Stock Predominating
In the Group

3.9^-^.Steels, Papers
Motors and Parts,

the

condition

able to buy a new
credit. Fewer new homes
were

Fewer stocks

sold.

The

are

inability

of stock

brokers
the cost

to lend more than 25% on
of securities

purchased by clients
unquestionably has resulted in the
flow of money into other types of
investment.
Chicago brokers
frankly say that they have done

■;

Machinery, Steels, Papers

not

represent

and investment
analysts have not thought through

but it hardly can be -expected to
have the influence of a shock. The

the

investment implications of a
permanently higher plateau of
wages and prices. As I see it, the
dollar has been so impaired and

market

wage rates have been

not

Most

that

investors

to prewar
In

'34/

deflation

.15

Oils, Motors and Parts '■) - —
4 8.9^—w Foods,
Oils," Building Supplies,
Electrical
Equipments
.
9.9
—Utilities, Oils, Motors, Chemicals, Drugs ;
10,9—
Foods, Drugs, Oils
11.9
Utilities, "Growth" Stocky ,
12.9-Utilities* "Blue Chips" \
A<:: V-/
13.9——Utilities, Chemicals, "Blue Chips"
14.9-Utilities, "Blue Chips," Drugs
\
More——Utilities, Chemicals, "Grovvtn Stocks," "Blue

than commitments in stocks, part¬

ly because they can obtain liberal
credit on the purchase of these
competing investments.

Ordinarily

Furthermore, the gov¬

charged-with the re¬
sponsibility of servicing the na¬
tional debt and making progress
toward paying it off. The national
debt

never

reduced

"The Dow"

Percentage
D-J

Dow-Jones

Inds.

Price-Earnings'

Industrials

Ratio

What has been said

thing.
far

thus

non-recurrent

about

earnings, the business and politi¬
cal risks Of our time, the threat
of deflation and recession,
and

extant for at least -a year.

them.
Certainly the
been reached where
no
longer any surprise

prices
to
point has
is

there

the

bearish

factors enumerated. They

still may

element

drag

but

the

out of

most

the price structure,

Earnings

Paid Out in

has

element

shock

gone

$iem.

Earnings And The Dollar
may

not

they look.

not go

key

outlook, in

my opinion, is the future value Of
the dollar in terms of goods, com¬

modities and services. If the dollar
is

1917.

21.90

99.18

65.95

25.7

16.18

89.07

73.38

34.8

1919.

13.77

118.92

79.15

29.6

the

1920.

6.74

109.88

66.75

51.0

99.20

110.15-

18.G2...

Dividends

High AtLow

54.22
.

84.96,

22.9

11921.

•

81.50

78.59

85.76

34.7

1924.

10.52

120.51

88.33

40.5

159.39
166.64

115.00

1926.

13.54 v
14.44:

1927.

13.18

202.40

152.73

42:0

1928.

15.36

300.00

.191.33

385

1925.
,

135.20

if it

19.31

381.17

198.69

294.07

157.51

739

1931.

2.68

194.36

73.79

2.57

108.67

1934.

4.68

110.74

1935.
1936.

should

present

high

food

prices,

much less inflated than the

Brit¬

50.16

85.51

ish pound, the French
franc, the
Dutch guilder, the Japanese yen,

117,9
70.0

and

certainly much less inflated

148.47

96.71

60.8

than

184.90 ~

143.11;

70.9

Gingold* just back from England,
says a dollar here buys about as

11.41
6.09

194.40

113.64

'71,4

158.41

9895

79,6

~194L

155.92

121.44

111.84

65.0

133.59

106.34

9.92

\Zu4*

146.46
153.00

134.10

; 92.69

150.53

10.50

1946.

13.60

213.36

1947.

19.28

fl86.85

161.61

ruble,

Oliver

65.5

domestic,

well

having. All of the troubles of
Europe are scarcity troubles, not

66.8
65.3

the

63:6

result

There

55.1

over-production.

is still plenty of work for

everyone to do.

ff42.6

1944; those of Anthony Gaubis for: 1945 and 1946; and of Barron's as
ekimate of 1947.
'./■.»
...--''v'
•
tRange for first 8y2 months of 1947. »,A,
w •; ;
:• •.
$N:dt computed.
■
.a,
/-•
-A*^200%:of payments for first half of. 1947. .;:
-t,./
ffBased on first half figues.
,

-H-

•,•

favorable

regard

surprise.

retails for $950.

So far

Anyone who thinks that labor
hates are going down as easily as

argument

plateau

can

that

reenter

there is no

see,

which to build

stocks

bull

immediate

market

future.

likely

are

Low

the

price-

ratios and high yields
likely to disappear over¬
night, and when they do disappear
it is entirely possible that earn¬
ings may be lower with stock
prices higher.
yyA
Avyy

earnings
not

are

much

anticipate

which

whether

for

are; in

to
in

period

difficult

tell

bull market

bear market, than to look

prices to go significantly be¬
to rise

logical

longer

low the bottoms

the

already reached,

sufficiently to establish

existence

"Dow

new

Theory" bull market.

From all that has been
must

too low.

are

ments

too

are

high

either

stocks

Probably both state¬
The present

accurate;

time, in my opinion, is
which

said, it

that

concluded

earnings

stocks

should

period in

accumu¬

lated; but I don't think there is
hurry about it There should

any

higher

factors

•;/; .y;;:'..■

plenty of time to buy leisurely

prices
means
a
permanently and thoughtfully.
higher level of wages and salaries
and therefore a higher level of
national income. National income

will'

not

back

prewar

standards.

Third,
while
present
stock
prices do not reflect prospective
replacement
costs
o f
physical
properties or the permanently de¬
preciated
value
of
the
dollar,

Now With Atwill S Co.
(Special

to thfi

MIAMI

Financial

Chronicle)

BEACH, FLA.—Clinton

McCreedy

has

become

asso¬

ciated with Atwill & Co., 605 Lin-

equity values eventually must re¬
flect this phenomenon. Plant and
machinery
won't
last
forever.
They will have to be replaced.
So far

the present

deplorable

state of affairs in Europe is con¬

this

cerned,
expected
The

the

aftermath

real

normal

and
war.

which

situation,

the

was

hidden by our unwarranted opti¬
mism for the first 18 months after
V-E

Its

Day,

is out in the

now

maximum

open.

impact on invest¬
probably is being

ment sentiment

felt, or will be felt in the months
immediately ahead.
If

are

to lose

export business

the

Clinton T. McCreedy

large amount

result of

inability of those who <Want

goods and commodities to pay
for them, it must be remembered
our

coin Road.
He was formerly in
charge of the Miami office of John
Nuveen & Co.

that, for the present at least, little
of this loss will be in the area of
food and

fuel, two highly impor¬
employment industries.

tant

Moreover, any reduction in aid
Europe must be compensated

(Special

to The Financial

Chronicle)

SAN
by an increase in the arma-i
FRANCISCO, CALIF. —
ment expenditures of the
United Ralph W. Herget has become asso-i
for

States. If we

are unwilling to con¬
fight Russian expansion
in a cold war, we must be pre¬
pared (at least) to fight it in a hot
war.
Preparedness expenditures

tinue

are

pound in London.

world scarcity of the things
people want and are accustomed

# A ^Figures for 1915-1944, inclusive, are those used by Benjamin
Graham in "Commercial & Financial Chronicle'' article of Oct. 18,

Russian

There still is
as

65.5

118.84'

10:07

1944.

120.19

9.74

1943.

the

much as

67,5

152.80

11:46

;

9.33
10.88

j1939:
C1940.

9.98

1938.

ours,

6.78

1937:

|945.

251,0

41.22

88.78.

0.31

forgotten, still is the best
currency in the world; and prices
in
this (. country
are r infinitely
lower, in terms of a day's work
than they are in any other coun¬
try in the world. The dollar, even

36,6

10.06

use

back to 1939 levels unless

Second,

abuse,

This "dollar

43.9

■-

1939.
1932.

wartime

not be

30.6

1929.

1933.

its

earnings will not
anything like as much as most
people fear.
'
u

41.2

105.38

103.43

the decline

63,90

11.38

8.20.

result

1923.

and

the

worth less in

prices go back to 1939 levels. The
earnings of automobile companies,
in dollars, will be higher if the
Ford,
Chevrolet
and
Plymouth
type of car retails for $1,500 than

non¬

The

;i918.

$10.59

1916.

Low

High

'Earned

fl9l5.

are

going back to a point where it
will buy as much food, clothing
and shelter as it did in 1939, earn¬
ings must decline sharply; but if
the purchasing power of the dol¬
lar suffered permanent injury as

serviced

through

think of high
buying power than the dollars
margin requirements on stocks as that the
government borrowed.
influencing only the volume of
trading in them. Actually this
Profits and Prices
artificial credit stringency has a
If general prices are to remain
marked effect on the prices at
on a
permanently higher plateau,
which stocks sell. It is one of the
not
necessarily as high as the
outstanding factors which makes
present level, a few things are
the securities business a depressed
axiomatic. First, it means larger
industry at a time when almost
sales, at any level of industrial
every other business in the United
activity, for every corporation.
States is exceedingly prosperous.
That, assuming conventional profit
margins, means higher earnings;
Not So Black As It Looks
The
stock
market
often
is earnings in harmony with the
price
level.
For
example,
the
wrong, and' it is most often wrong
when too many people believe the earnings of retail companies will

recurrent

can

except

of dollars which

present

mien of investors is to accept un¬
favorable factors as routine and

its

The

expected.

factor in the earnings

Price-Earnings Ratio

(and
partially
dis¬
it does to what has

been

ernment

business

poor

People with money find
commitment in real estate, farm
lands or ranches more attractive

Earnings
■360

carried

expected
counted )

in 1931-34.

The investment community has

can

ordinarily does not re¬
spond as much to what has been

stocks.

and

■

7.9

increased

democracy like the one we
America, no program of

have

impossible to go back
price levels.

under-employjpent.

therefore, in the bear case. That
part of it which^ true may con¬
tinue td be a drag on the market,

ities

Machinery, Building been thinking about the same
SllppUeS
V> '
'■
i
things for a long time. % has gone
6.9——Oils, Steels, Rails,. Foods,-^Machinery
a
ldng
way
toward adjusting

■

figure probably represents over¬
employment and 55 million might
a

sound basis

foreign liquidation, repre¬
sents widely held popular opinion
and a philosophy which has been

(1231)

logical conclusion; the public will
revolt much earlier than they did

excellent business in commod¬

5.9^-—Motors and Parts, Steels,

market is

even

....

;

same

permitted
The

b%ers.

stock

being sold.

and Rails
y

one

same

Textiles, Washers, Papers, Steels

—

30
60

the

were

■

Technical Market Factors
are^t least two depress¬

Matter of Risks

The

■

•

CHRONICLE

in the real estate market would be

credit

the

if brokers

situation

national ,climate

& FINANCIAL

extend

risks rather than stability even in
the domestic area. The wage-price

Whether

1946.

pn the defensive,
mmunism are on

the march.

* the

THE COMMERCIAL

:;;ri

scheduled

business
into
a

increase,

ordinarily

tailspin when

does
a

and

not

nation has

Ciated with Wilson, Johnson Higgins, 300 Montgomery Street. He
was formerly with Denault & Co.
and prior thereto was Manager of

the

investment

ment
was

San

analysis

depart¬

First California Co. and
Francisco

Manager

for

Geo. H. Grant & Co.

comprehensive armament pro¬

W.W

gram.

Danger of Over-Acceptance
It

always

well

theory about the

sus¬
-

picious

any

market when it becomes too
gen¬

(Special to THe Financial Chronicle)

NEW ORLEANS, LA.—W.
lace

Wal¬

Bouden, Jr., has become asso«
they went up certainly has a poor erally accepted. We have reached ciated with Randolph Newman &
idea of American psychology and the point where
most
of
the Co., Carondelet Building. He was
Of the history of wages, even be¬
pessimistic ideas outlined in the formerly in the sales department
fore the days of powerful trade
of Weil & Arnold and prior thereto
first half of this article have be¬
and industry-wide unions. To be
was
Manager of the corporate
come generally accepted. There is
bond
sure, we will not always have 60
department for
Levy &
million people employed; but such no longer any surprise
element, Rooney, Inc.

THE

(1232)

COMMERCIAL &. FINANCIAL

CHRONICLE

Thursday, September 25, 1947

buy* cost what it
ican

relief

"generosity"
Giving away offset one another, when a gov
(Continued from first page)
billions "doesn't cost any¬ ernment does the economic plan¬
stead of well above. The parities $20
ning there is no correction or
themselves, i.e., industrial prices, thing," said Undersecretary Clay¬
balancing possible.
But we are
ton only a year ago.
might be lower, too, than they
British planning, operating on doing more of the same. Inter¬
are
•
national
miscalculation
of
the
r
As, to the "oppressive" terms: this forecast, implied three things:
American
business
cycle
has
the loan was sold to the Ameri¬
First,
American
prices will
break and, therefore, Britain will brought down an economic hor¬
can public with the official argu¬
nets'
nest.
Now, .the
Marshall
ment that it is the price we pay be able to buy American goods
Plan
suggests
that instead
of
for restoring multilateral
trade. cheaply. A "little" American loan
abandoning the authoritarian ap¬
Then, the British spent over $2 of $3.75 billions will go a long
proach, the road to ruin, Europe
billions
of the American
loan way: it was expected to last three
do its planning on an even big¬
(plus $750 millions of the Cana¬ to four years. (It has been ex¬
ger and broader collective scale.
dian) by July 1 of this year, at hausted in thirteen months, ex¬
Incidentally, the 1924-31 "plan¬
which time their Cabinet still be¬ cept
for $400 m i 11 io n s now
ning" of an eternal boom, by the
lieved that the convertibility of "frozen.")
New York Federal Reserve and
sterling would be met without
Second, capitalism in America the
Bank
of
England,
is
the
difficulty. And we consented to will produce unsalable surpluses
nearest historical parallel to the
^liberalizing" the terms as soon of food, raw materials, and every¬
international experiment of
as we were asked.
thing, which gladly will be given '45-'47, if on a much narrower
:
In reality, leaving aside the away, leased, lent, or what have scale. Even so, its distending im¬

matter

that

expect much

vital

fact,

war

score.

wheat

export

quotas will have to be revised if

Nov.

price

should

not

ris<*

productivity, grow¬
and conse¬
quent bottlenecks, devastating
taxation and red, tape, overvalued
exchange rates for national cur¬
rencies and strait-jackets for in¬
ternational trade. Not a lack of
reduced'labor

and did

pending

Actually, our exports seem to
decline since May. In the indus¬
trial

field, this "Slump" will not

be felt seriously where it is most

plans, but a plethora of conflict¬
ing schemes is the greatest source
of confusion, the British Minister
of Health allocating the same ma¬
terials for constructions as the
Board of Trade earmarks for ex¬
port industries. Also, internal in¬
flation syphons much of the in¬
dustrial output from the export
markets.
Worst of
all is the
influence
o f
pressure
groups,

bulk.

steel

and

now

dxport 10% of the
7% of the coal

about

output; that much would be ab¬
sorbed by domestic consumers like
drops of rain by a heat-scorched
land. It is in the vast expanse of
non-essentials, "from flat-irons to

chewing gum;" that the export
shrinkage may hurt. Hundreds of
Industrial items, with films, radios
and other "luxuries" the outstand¬

recession

the

expecta¬

convertibility.

ancing and exchange stabilization
Europe, while the psychologi¬
and material conditions were
sources, the mire into which that
We
country
has
sunk, unless one favorable, was squandered.
keeps in mind the assumption on have permitted ■<' Europe to draw

crisis in

Britain, the waste of the

American

loan

and

of other

re¬

cal

which the Labor Government

has recklessly

seasonal rise in construction

ac¬

agricultural tivity, as in August, is another
t
implements, automobiles, fertili¬ item to the same effect.
Individual losses will occur, of
zers, box-cars, even tools and ma¬
chinery,
which constitute
the course, but employment and prices

in missing the immediate postwar
tion of a let-down in inventory
opportunity for stabilization is ir¬
buying did last winter. Indeed,
Third, to guarantee her domes¬ reparable. The time to enforce a
hundreds of firms may have to
tic
full
employment,
Britain's reasonable peace was while our
adjust themselves to reduced sales
economy must be isolated by all armies were over there.
Instead
abroad. But how much altogether
means
against the impact of the of starting immediately on reor¬
is at stake?
The total reduction
forthcoming American depression. ganizing Germany, we did our
of— our
export
surplus
could
Socialism and Statism are justi¬ best to destroy systematically her
scarcely amount to more than $4
fied by this phony fear
of an productive capacity,
trying
to to
$6 billions within the next 12
American depression.
starve her into democracy.
The
months, some 2 or 3% of a gross
One
cannot
understand
the chance for an early budget bal¬

sterling

needed: in coal, steel,

mestic

nothing to .meet the im¬

on
consumer credit, by
1, mav. turn *he trick. De-?
dining per-man industrial output
(by some 10% in the coal mines
since
mid-summer)
also might
help to keep prices up. More than

above

bushel.

the dollar crisis highlights
plight of economic planning

ing inflationary pains

shackles

the

policies, you. No serious dollar shortage
pact—by way of manipulated in¬
the could arise, none beyond the In¬ terest rates and the inflationary ing examples, will lose markets
that ternational ' Fund's and Bank's gold exchange standard — was for the time being.
-The prospect of export shrink¬
sweeps the westernWorld, plan¬ capacity to
cope with.
That is largely responsible for the world's
age now plays the same role in
ning which results in over-bur¬ why British officials were still
greatest depression.
generating fresh fears of a do¬
dening
each economy
with optimistic at the eleventh hour,
The damage done to the world
deeply disturbing Soviet

cline, and to adjust the economy
to
it.
The cashing of soldiers'
leave-bonds
(about $2 " billions)
plus the elimination of the last

The Amer¬

may.

consumer cannoi

could

not

affected

than

they were hit by the "reaction" of
last April and May. Even that is
doubtful in an economy with an
overgrown and expanding mone¬
tary base, and a backlog of indus¬
trial capital need alone, estimated
—by Professor Slichter, whatever
ifiuch

figures

are

worth

—

be¬

tween

$43 and $75 billions (at
prices).
If depressionpsychology gets the upperhand
again, it is likely to last even
shorter than it did last> spring.
An economy that was able to
absorb within two years or so, the
shock of the world's greatest de¬
flation—from
an
annual budget
deficit of over $50 billions to a
probable budgetary surplus of al¬
most $10 billions — surely could
present

take

revision

dity

exports

from

its

commo¬

fantastic

the

annual rate
of last May
($15.2
billions) close to the still extraor¬

national production that is rising,

dinary level of last year ($9.74
billions).
To stop the slow but /.
relentless price spiral would take ?

incidentally, at

10% annual rate

faster.
In other

words,

man-made and thorough-going '
Reflation of the unwieldly money

slight acceler¬
spending would

potential.

ation of consumer

suffice

the

anything of the kind?

offset

America's resources,
making dollars avail¬

de¬

export

who

Where is the Politician

would

much

suggest

instead of
ruth¬ operated for two years. The as¬ able
only on the condition that
sumption of an American depres¬
exploiting the planning sion was implied in Lord Keynes' the recipient use them to put his
ideology for their selfish aim: to
house in order. All this bungling
prediction
of
1946
(published
earn more and more for ..less and
posthumously in the "Economic was based on the theory that
less work.
fi
r
..•
Journal") that there will be no America can and will produce the
The failure of sterling conver¬
postwar' dollar scarcity. It per¬ excess of goods for everybody,
sion
documented
what
should mitted labor to
go along the prim¬ with no inflation strings attached.
(Continued from page 14)
have been known in advance: that
rose
Now, it is out of the question
path,
to reduce working
January will probably include the .and with provision for additional
British
money
no
longer com¬
hours, spend on unessential im¬ that we could continue indefi¬ following:
| benefits for dependents. It would
mands
any
confidence.
(It is/
ports, neglect essential reconstruc¬ nitely an export surplus at the
(1) Permanent f inancing of be designed to close existing gaps
quoted at a 40% discount against
tion, put business in strait-jack¬ annual rate of some $12 billions, Old-Age and Survivors' insurance in the coverage of both persons
the Swiss franc, in spite of all at¬
ets, but refrain from unpopular as in the first half of this year. program.
and risks to remove present in¬
tempts to embargo its outflow) measures of labor-control, expand It is a self-defeating process: the

unions in particular,

trade

lessly

Social

Security and Its

Tax Potentialities

•

Most

currencies are
in
capital
This is not a mere

other

worse

shape.

(2) Extension

coverage

equities in the protection of work¬

magnificient public more goods we give away, the the
OASI
and
Unemployment ers and the financial burdens of
works, and to proceed with long- higher our prices, and the less Compensation.
employers and to provide a con¬
sequel to the physical devasta¬ run
the outer world can buy. That is
plans of Utopia, income equal¬
(3) Further liberalization of sistent relationship among insur¬
tions and monetary inflations of
ization, womb-to-tomb security, the essence of this unique finan¬ benefits.
ance
provisions for the various
the war. What brings about pro¬
calamity:
dollar
shortage
"fiddling with nationalization cial
(4) Temporary and permanent risks and between provisions of
gressive deterioration in Western while Rome burns."
abroad plus the fact that fresh
the basic system and of supple¬
disability benefits.
Europe rather than even a slow
Why worry, if a depression- dollars can be provided only spar¬
(5) Compulsory health and mentary special systems for par¬
pace of progress, is the fact that plagued America will deliver the ingly
if prices in this country medical care.
ticular groups. As compared with
the first two years
of "peace" goods
should be kept from skyrocketing.
anyway?
Adversely, Congress defeated the separate programs to meet par¬
have been mismanaged under a
The same attitude prevailed in (About
one-half of the
outer
ticular risks, such a system would
false optimism.
The opportunity official France and elsewhere. world's remaining "liquid" re¬ President's Reorganization Plan
to

its feet has Why do the French hang on to an serves of some $25 billions, and of
bungled, and near-chaos en¬ artificial exchange rate for the $10 billions in residual credit
which cannot be cured by franc, more than double its actual lines, still is at the disposal of

put the world on

been
sues,

renewed

Cutting

"austerity."
Britain's imports by $900
of

doses

millions will be

of little avail if

market value? For one thing, they

eight Western European nations.)

expected American prices to col¬

will

very

difficult,

under

lapse,

French price

2 of 1947, which proposed to
the U.
S. Employment

transfer

Services
Labor

the

of
result,

Department

permanently.

cies.

A
comprehensive program of
public assistance, on a Federal-

of unemployment insurance.

State

Judging from the recommenda¬
tions of the Social Security Ad¬

and

Keynesian, or a con¬

Department

attempt doomed to fail¬
Mr. Truman also found out
conception provided a tune to by experience. Both Blum and
which all planners throughout the
Truman, naive as they may be in
-world did their dancing.
economic
matters,
know
that
Remember the 6 to 8 millions prices are not determined by poli¬
unemployed officially announced ticians' speeches. They tried to
magicians,
persuaded
by
by Washington for the spring of play
—1946?
Or
the
argument, of Marxian and Keynesian "experts"
that falling prices are around the
Messrs. Truman and Wallace for
higher

mixture of both, this mis¬

wages

safeguard

the

time,

ure, as

American

corner

anyway.

The two years since the war
purchasing power of the masses in
the, forthcoming depression? What have seen the first experiment in
they accomplished was to speed world-wide financial forecasting,
idea as the common
up the vicious wage-price spiral. with" one
To provide export outlets against premise. It is an expensive lesson
the evil day also served as ra¬ showing that, while individuals'
tionalization in favor of our post¬ mistakes in prognostication may

American

discourages

investments

basis, under which payments

services

eral

financed from

State

and

funds

Fed¬

would

available to any needy person in
the United States, irrespective of

ministration, most of which are
receiving very favorable consider¬
ation by the present powers in the reason for need or the place
Washington,
the
81st Congress of residence. The Federal finan¬

promises to be extremely produc¬
This
unemployment
ram¬ and their balance of payments -—to sell more in the "hard money" tive in! social legislation.
pant, etc. Most governments were would not suffer from franc-over¬ areas, especially in the U. S. prediction is made in view of the
guided by the idea that capitalism valuation, which is a major factor They will try to attract American fact that, there are now over TOO
social security bills ready for dis¬
necessarily digs its own grave by in *the catastrophe now facing
capital
from
non-governmental
cussion and the year 1948 with its
producing more than it can sell. France.
sources,
which is available for
It runs into short booms and long
Another illustration: last Janu¬ ventures in Arab states and some forthcoming Presidential election
depressions. A crisis df plenty was ary, Socialist Premier Blum tried Latin American countries, ; but will form a particularly ideal
to come after World War II as it to talk
background for discussions of this
prices into voluntary self- scarcely beyond.
(Besides, the
nature in order to exercise politi¬
did after World War I. Whether reduction at the rate of 5% at a State
Marxian

re¬

porting
burdens
and
simplify
arrangements as they affect work¬
ers, employers and public agen¬

the USES will be returned to the

breaking,

fused

reduce administrative cost and

Federal

Security Agency and co¬
or
ordinated with the administration

taking
with
them
the such circumstances, to avoid
level. So, they could even to postpone a European caproceed with printing money, ex¬ tastrophy.
and of exports.
II.
pecting at the" same time to hold
The fundamental idea underly¬ the franc at the artificial par-^
What will be the direct domestic
ing postwar planning in virtually eating their monetary cake and effect, in the near future?
The
every
country was that by the preserving exchange stability, too. "soft money" countries of five
summer of 1947, at the latest, the
continents will have to use all
Indeed, if the American depres¬
United States would be plunged sion had occurred, French prices
devices—including new devalua¬
into
a
deep
depression, prices would not have risen as they did,
tions, such as of the French franc
lowering of living standards
results in a loss of productivity

the

No.

cal

pressure.

•

cial

contribution

gram
move

should
the

great

such

designed

disparities

pro¬
re¬
now

existing in the treatment of per¬
sons

who

but live

are

in like circumstances,

in different parts of the

country.

should

also

de¬

signed to remove serious present
inequities in the relative burdens
borne by States and localities in

financing public assistance."

Recommendations of the Social

Federalization of Program
Europe.) And, of course, they will
resort, as they now do, to the Security Board include establish¬
If the above program is accepted
of
"comprehensive basic as
crudest methods of reducing im¬ ment
presented, it will mean a comnational system
of contributory
ports payable in "cash" cutting
plete federalization of the entire
social insurance covering all ma¬
each other's throats in the process.
Social Security program, including
In short, our imports may rise jor risks to economic indepen¬
unemployment compensation, and
dence and all workers and their
some—they are slipping lately—
will, without any question, spell
dependents threatened by such doom for
Y^hile our exports should decline
any Experience Rating
substantially.
In the new crop risks. The program would include system in
unemployment insur¬
insurance
against wage loss in
year, this could not affect greatly
ance laws.
the most sensitive field, that of periods of disability and against
With reference to disability in¬
farm products, other than tobacco, costs. of medical care, for which
surance, there are only two States
(The Government will support no general provision hOw exists
who have
legislation providing
the tobacco farmers as it supports in the United States, as well as
benefits for this type of riskthe wool growers. In cotton, only old-age and survivors' insurance
a
moderate exportable surplus is and unemployment insurance with Rhode Island and California. Cali¬
disability compensation
in prospect.)«. Food the world must benefits related To past earnings fornia's
„

'.,. «c o

!f Volume

166

JttE C^MMERCIA^

Numbei* 4622

;.' act provided for benefit payments1
r
commencingDec/1, 1946; it is pro*
; posed to be
financed entirely from
i a
1% tax levied on the
payroll of
i, employees^ »now
being < withheld
from their wages. As
yet, we do
not have
any experience recorded

CHRONICLE

employees, are essential for ade-

temporary

quatejarotection of aged workers
their,

would be furthered

disability
insurance come more convincing as we fur¬ be/in addition to cash; sickness
ther study the situation.
benefit.
: :a:;7
substantially.
aiaa77A7'JA '''
dependents and of the
This thinking has had, and is
We have another precedent in
Further provision is made tw
survivors
of insured; wage-earn¬
having considerable significance the Crosser Bill, passed in the medical, surgical, institutional,!^
ers. A; Further,
that a decade of and effect and revives the hope closing days of the 79th Congress, habilitation and other services
experience in operating the pro¬ of the agencies interested that amending the railroad unemploy¬ disabled individuals entitled W
gram has shown several feasible federalizationAof the Social Se¬ ment insurance act by establish-! receive insurance benefits if thefcit
7 on. the
California
Experiment. methods of solving the adminis¬ curity programs would ultimately ing a very liberal system of cash services may in any way enaWffir
However, Rhode Island's legisla- trative problems which caused the result in a confiscation of. the benefits for
temporary disability such individual to return to wor«A
:A. tion,
which was passed in 1942 initial; exclusion of such groups as State funds and their
utilization and maternity care, financed en7 The way the bill was set up, them
A and diverts
1% of the 1%% em- agricultural
and
domestic
em¬
for the purposes as outlined,
tirely from employer taxes. You was no limitation stated.
a
ployee tax to finance
In regard to Public
disability ployees and the self-employed.
Financing—Although no speci¬
Assistance, will probably recall the passage
compensation, gives us 'a fourThe Social Security Board rec¬ the Social
Security Board recomt of this act, which was high pres¬ fic tax is imposed by the biML.
year experience record
which so ommendations on. Unemployment mendations, in
sured
shortly after the contro¬ which would repeal the Federal
part, are as fol¬
;
far has not been too
favorable, Insurance are as followslows:, ..a
-" "
versy between President Truman unemployment compensation ta%>
Rhode Island has
Extension of the Federal Un¬
experienced a
and the two railroad brotherhood it is perfectly clear that a
Special Federal aid to low-in3?&
deficit consistently after the first employment Tax Act to all em¬
come States for
assistance, admin¬ leaders, Johnson and Whitney, in payroll tax is contemplated, with**
year and has, therefore, been com- ployers of one or more workers
istration and welfare services to the closing of the 1946 Congress.
out experience rating.
The billfc
-Apelled to divert the
remaining in covered industries and to many enable States with relatively low
As a consequence, the payroll are designed to force the Stat&iA
:
%% of the State unemployment excepted employments.
economic
resources
to
develop tax burden under the railroad to turn over their unemployment*
tax paid by the worker from the
Provision, under Federal law, of adequate public welfare
programs. plan, as amended, will reach a compensation funds to the federal*
unemployment fund to the cash unemployment benefits for seaState distribution of available total of
15 Vz%
of payroll in a system and, where the States^
i sickness fund for a period of two
Federal and State funds to locali¬
fuse to transfer these funds, thi£r
very few years.
j
ttSL 3in£ f°r emPloyees uniform ties in
of the
;
;
years, beginning July 1, 1946.
Federal Government on a
accordance
would suffer penally of the within
with
their
Both States have tied
up their basis irrespective of the State in
/
drawal of federal social
lending Legislation
A sickness insurance
security
program with which ahey have worked.
*
7
Deletion of the Federal match¬
/Pending legislative bills; Senate^ grants in such programs as foldA /
Unemployment compensation and
If a Federal-State system'of un¬ ing maximums for individual
bill 140
age, aid to
dependent children*,
pay (sponsored by Senators
AH paid
disability benefits to the employment insurance is con- ments of aid to dependent chil¬
etc. Coverage would include vif-*
Fulbright
and
Taft)
and
712
A workers covered
Abortion of the credit- dren, and deletion or increase of
by unemploy¬
(sponsored
by
Senator
Aiken) tually all employees, excludii^
ment insurance law for
limited offset features of the present tax such maximum for
old-age as¬ would elevate the Federal Social federal, state and foreign goverii**
7: duration.
These two States are and substitution of a straight Fed- sistance and aid to the
blind.
77 :'. a. ' 7
Security Administration to a cab¬ ment employees."A
;■' /.
7
:
among the few which collect em¬
Federal grants-in-aid to States inet
The foregoing will give you ar
er?i *ax
covered pay¬
status,
constituting
it
as
ployee contributions to help fi- rolls from the proceeds of which for
general -assistance
to
good
conception
of
tlks
any "Department of Health, Education fairly
> nance
the
unemployment pro¬ matching Federal grants to the needy person, irrespective of the and
Security."
Senate bill 545 thinking of those who have a bi&
and

•

■

•

■

'sgram.
! .x
:a7-7. "
■..*
>,
Unfortunately, I do rot have

States

there

would

these plans, but
principle that I

one

c omm

briefly.

It would
recognition of the

A ference
At; risks,

these

ent'upon
that

seem

the

inherent
two

dif-

types

cause of his need,
as well as for
old-age
assistance, aid to the
blind, and aid to, dependent chil-

s^lndards as a condition of tax-

dren.
children

offset credit
would
.-.

(includmg additipnal

Among such standards

;A sential

for

the

success

sickness plan.

any

In other words, an
independent claim administration
"With direct
employer interest as a
requisite, would assure sound apA plication and minimize the unv

lawful

collection of benefits.
";
opinion is supported by
A Dr. Carl W. Strow, Assistant Director of Research of the
Research
»■; Council for Economic
Security, in
his analysis of "State
plans" for
t
disability compensation" — "as an
'

This

■

*•

coverage to all employees

of aid

other person

sibility for

insurable

benefit amount of at least
$25 for
the worker with dependents
for

could

workers whose past
earnings
title them to the maximum.

eral

Provision
weeks

much

dependent
Federal par¬

any

assuming

parent

respon¬

child who is liv¬

from the Federal

Security Admin¬
istration and incorporate them in
a "National Health
Agency" to be
created, and
(2)

differs

to define and

A determine

as a matter of fact.
Its
existence and certification are in¬
fluenced by moral and human na-

eligible
for
benefits
whose unemployment extends
over so long a period.
Provision that disqualifications
for
voluntary
leaving
without
good cause, discharged for mis¬
conduct, or refusal of suitable

A ture

traits;, for

instance, 7

expe-

rience of compensation
plans
i shows
how the rate of recorded
disability rises upon the prospects
A of compensation."

benefit

rights

voluntary leaving

good
or

ments

7. ■■

Combining Sickness and Disability
With Unemployment Insurance

for

Because of the
extraordinary
importance and dangers connect¬

for refusing

suitable work to include good per-

ed with the

regard to old-age and survivors' insurance, the Social Se¬
curity Board has made, in part,

the

following recommendations:

Including agricultural

;

Coverage of all gainful workers,

;

and domes-

S?™1 reasons, the merely
not
attributable to

employees, public employees
and employees of non-profit organizations, .railroad
employees,

A and

self-employed persons, inA, eluding farmers and small
buslncssmcn,

„•

■■

.■

'-jf-f^^^^

Legislation to preveiit serviceA men from losing the protection of

% the old-age

causes

the sickness disability 'with the
unemployment insurance program,
involving the utilization of the
Recommended further, that if
unemployment insurance funds,
the
credit-offset feature of the for the
payment of sickness bene¬
present tax Js retained, reduction
fits, I would like to refer again
to the previously mentioned
sys¬
eJa? to credit
the additional 2% and change in
provisions, tems of Rhode Island and Cali¬
e made, so that
employers may fornia.
a a,7 7-a'-a
7
obtairr
rate

job

the

em-

reductions

tic

;

proposals to combine

either

Rhode

!xA;riiUg ®Xp5ience Rating> State♦£

reduction or

some -other

rc^thod. Also, if minimum benefit
standards

are

adopted, permanent

rathAA™1!®11 re"insurance fund

ratner .than,

loans, as. now. tempo¬
rarily provided for States whose
unemployment funds are low.,
•

Island's

adoption

cash sickness program has had

the United States toward
legisla¬
tion providing benefits for
this

type of risk. Also/the fact that
'Rhode Island, with the

and survisors' insurauthority
'of Congress, has diverted a
7 ance system because of service in fl.
part
one
tion that I can make in connecof their unemployment trust
; A' the armed forces.
,1- AA'a'A;
fund,
the suggested provisions
A'v;'V
contributed by the
7'aAi Reduction of the
employees, to
qualifying age made for credit-offset, and
that is a fund for cash sickness
1, A for all women beneficiaries from there
benefits,
is
a
determination on the will have an
(65, to 60 years.
encouraging effect
Changes in the part of
upon many of the 10
;A average monthly wage and benefit
Security adminStates, hav¬
: ;• formula*
ing: employee
toi n c r ease
contributions, to
benefit |
AA
amounts; particularly for
k
?
entirely and follow this same example, Cali¬
lowfornia has adopted an
yl paid;workers. - ,V,A> • /,7 -1 •; optional
A.r to a large extent.
plan of sickness benefits, permit¬
Arf lncrease from $3,000 to $3,600 a
ting coverage through the State
A yearl in; the maximum amount of
h
recommendatmns made by the Social Secu- operated fund or
7? earnings which
private contract,
are
subject to
utilizing the 1% employee con¬
7 contribution and counted in comtributions.
•
putation of benefits. 7 • /
7
A-,
As a condition of the tax offNew Jersey also has
'A 7;'Increase in the amount of earnbills, with
strong administration backing,
j' ihgs ?a> beneficiary

if only

interpreta¬

■

th^Social

encf

0ut the E^ieriSystem'
the^ benefits resulting therefrom,

Jv furthor illustrate

tie

■

fo&g:W°Uld llke 10 qU°te

^ay receive in

covered employment without susA f pension of
benefits.;> a.;a7 •.••7

11:A

Benefits1

7;|tended.

or-

during periods
permanent-

A like-those for

A7? A

ex-

disability,

old-age retirement.

Expansion of Coverage

0^07
eral

*bjn.efit star>dards
adopted to assure gen-

adequacy of benefits and
equity to workers," and again "it
senously
questioned

whether the Federal Tax—and bv
inference State Taxes-should be
further reduced while risks
of

disability remain "If
contention of the So- horary by most States." urn
protected
7 eial Security; Board that extension
S
t; of coverage to all workers and
?°ULd use,.their accumulated
funds for
-

the

7 coordination- of the basic Federal
>
system with special systems for4
1

railroad,

government

Unif' Other

benefits to workers
as

f-^thrdugh lack, of
lishriient of State

un-

weU

that

would

divert
$100,000,000
unemployment
trust
fund to a New Jersey Cash Sick¬
ness
Fund.
The proposed plan
would cothpel the
employer to in¬

from

sure

the-

the

risk

company

insurance.

with

qualify

insurance

for

self-

;■

pressure

bill)

within

including

the

and

(a)

grants

control

cancer

new

chiefly

activities

States for
000

land.

our

fact vis

that

principles, bwfc
we
are
beifife^

maneuvered

and

rushed

the

grants

State
Health Plan which may include
State participation -in health in¬
surance funds ($200,000^000 annu¬

ally for five years).

into

ship seaworthy, andT tir
temper the progress of this expeic**
sive program until it can be al^
sorbed gradually and safely int&
our economy,
■ AA: •
■'
■ j,
7777/^
economy

Opinions As to Ultimate Costf

$10,000,to

these

complete social program that m*
very easily stifle our economy. W
is my opinion that we have a; WH7
job on our hands to keep tlte

There

Federal

We may or may rffctf

with

agree

annually).

(b)

powefcfit

determination of the lav*s

have

varied opinions that
expressed as to whafc

are

been

the ultimate cost of social security
what the form
of taxation

and

will be, but'in all probability we
can
conservatively say it will
reach between 20% and 24% of

payroll/in about 15 to 20 years^

children

for

and

low

income

groups

$8,000,000
to
$20,000,000
annually for five years)
7
The

act

would

continue

maintain the present status of the
Federal

Bill

140

conceived to carry

probably
out the recoip-

mendations of the

President, out-f

in?his

lined

was

presenting
reorganization plan No. 2 of
1946, stating in effect "The size
and scope of the Federal Security
Administration
and
the
impor¬
tance of its functions clearly call
for

departmental

status

and

prominent place in the President's
cabinet."
This
is

all

might

indicate

there

strong possibility that we are
destined to have a comprehensive
a

health program
tant
come

in the not far dis¬
future, and it might well
in
1948, the presidential

election year.

Further, about one hundred So¬
Security bills that have aU
ready been introduced, will be
presented at the next Congress, all
of which would liberalize, fed¬
eralize, or both, the entire Social
Security program, including un¬
employment compensation.
The
Murray-Dingell companion bills
S1734 and HR.4390 might pro¬
cial

illustrations.

vide the best
bills

(2)
further

would

establish

These

national

system of unemployment compen¬
sation with additional benefits for

Unemployment
liberalized

insurance,,
previously

outlined.

(3)
would

Health

insurance

include

medical, 7 hospital.

whidht

and temporary disability amiwelfare services. 'A

care

message

his

that will include
Old-Age and Survivors In¬
with permanent disabilityv

program

surance

Security Administration.

Senate

(1)

(from

The fact is there is one author¬

ity in particular, who states thfie
cost might very well reach 29%^
basing his calculations upon sm
admission of Senator Wagner that
his program would cost 18%, anii^
plus 9% for old-age and survivot®
insurance program, and an aver-*
age cost of 2% for unemployment

compensation.
After

realizing the magnitude
potentialities under a?
complete Social Security Program^.
I hope we all will be cognizant of*
our responsibility and lend ever#?
effort we can to keep our econ*omy solvent, maintain government;
by the people, and safeguard ottr
.system of free enterprise, whict*
has given us the highest standard
of living in the entire world.
of

the

tax

Film Nmm Now Luca*
Eisen t Waeckerle
KANSAS CITY, MO.—The firm
of Lucas, Farrell & Sattef-

name

lee, Inc., 921 Walnut St., has been
to
Lucas,
Eisen
&
dependents and with cash sickness changed
benefits. The max¬ Waeckerle, Inc. Officers are Mark
imum benefits provided therein A.
Lucas, Jr., Erwin H. Eisen,
would make it possible for a $35 Harold E. Waeckerle, and John F;
per week employee,
with three Parker.
dependents, to qualify for the
maximum of $30 per week, or po¬
tentially over $1500 a year, with
about six months unemployment,
and maternity

and

additional six months for

sickness.

The

provisions therein

Open Inv.

would enable the Board of Trus¬

SUNBURY, PA.—Henry L. Phil¬

subjected,

tees to extend duration of unem¬

ployment to 52 weeks where and

lips will shortly open offices to
engage in a securities business^.
Mr. Phillips has been associated
with Theron D. Conrad & Ca,

Congress and State Legislatures
will

comprised

agency,
Federal

very
stimulating effect on the
legislature of several States, indi¬
cating a definite trend throughout

number

Wagner-Murray-Dingell
be

for

(alternates to pro¬
contained
in
the
1945

posals

;> A7'"

transferring title or
property by an appli¬
cant or recipient to the State or
.locality...'
7'..1;

re¬

cause

control of

•

participation

under State plans approved under
the Social Security
Act.;; 7 ! : ;
7'Elimination as a condition of
Federal grants, of State require¬

duction of benefits.
of

financial

the
Fed¬

citizenship requirements as a con¬
dition of eligibility for assistance

workers

Definition

through

Abolition of State residence and

duration of benefits for all

cellation

disability

achieved

general assistance.
26

work should entail only
postpone¬
ment
of benefits for
not
more
than four weeks rather than can¬

risk,

Provide

functions

new

voice and in fact decisive

in the
of

(1) Remove all health activities

Ball
com¬

prehensive measure, would

Board's recommendation

en¬

Disability is difficult

to permit
ticipation in assistance to

be:

from other hazards.
It is both
industrial and personal in nature.

A'-

Extension

Extension of unemployment in¬

surance

(sponsored by Taft, Smith,
Donnell), a much more

and

unemployment compensa- in industries covered by the Fed¬ ing in a family home and is needy
f tion and sickness, would make a eral tax. :
for any reason whatsoever A Sub¬
"separate administration seem esProvision of a maximum weekly stantially,
the
same : objective

•

■

would be made for both
benefits and administration.
Provision for minimum benefit

credits)

■

the
A time to
anayze the merits and de¬
merits of either of

to
increased
authorize the use ox

unemployment funds for sickness

Work,'estab- and other so-called social insur¬
programs for ance purposes, and this will be¬

if the fund of the State was ade¬

quate. Benefits for maternity care
the extent of 12 weeks would

Inc., as sales manager.

(1234)

THE COMMERCIAL

its

Competition, Price Policy and High-Level Stability

1947,

Thursday, September 25,

FINANCIAL CHRONICLE
price for

fear

its

will"

rivals

than follow¬

employment rather

Likewise, as; output ing prices as. they tend to .dp in
falls, variable costs per unit are more competitive markets? The
dustries here under consideration
(Continued from page 4)
increase in m on ey *wages cannot! relatively unaffected. And nofirm answer again has ma nly to do, 1
maintained. This is about where that; go far toward expaining tlrs
help but increase the demand for reduces- its price because a price believe, with the structure of. the
the problem stands now. Without phenomenon.
Among these char¬ the output of this sector of the I cut is likely to be followed by all markets in which wage rates and
an adequate counter-cyclical fiscal acteristics I
should; consider the economy, and1, as we have seen,
• •
J firms. Meanwhile a very active prices are. determined.
program
high-level stability of 'oliowing to have special impor¬ the
Although a comparison of the
relationship between an in-| competition of a non*price variety
output and employment is un- tance; the tendency of variable crease in demand and in
prices is mav well be in process. Admit- monopoly power of a labor union
likely.. With an adequate fiscal costs, per unit of output to be close and. immediate in the area tedly this is an
oversimplification in the labor market with the mo¬
stable with respect to
program a free market economy
changes in of competitive production.
| °f the situation but "it seems; to. nopoly position of a firm n* its
nhe volume of
seems
hold true in many industrial mar- product market presents serious
inevitably
to.
generate
output; the exist¬
ence of possibilities of
strong inflationary pressures.
Agricultural Prices Out of Line
difficulties, there are certa n re¬
kets.
expanding

sales through advertising or
prod¬

Price Policy Dependent on
Market Structure

Turning.-

uct changes without resort to
price

inducements; price policies which

now to the second term

necessity take account, of the
probable price reaction of rival

in the subject assigned to me,
i.e.,
price policy, I should like to con¬ firms;

sider

the

behavior

different
prices in the price system as the
economy
approaches. * high levels
of employment and output. The
thesis I want to defend, at the

risk of considerable over simpli¬
fication, is that wage rates and

competitively

determined

prices

traditional

with

concern

antitrust policy which forms part
of the peculiar sensitiveness of

large firms to

adverse public

action.

re¬

(

If you

will permit this, oversim¬
plification, what we may think of
as a
typical industrial market sitt
nation

one

which

three

are.

the dynamic price elements
which drag along in, their wake^
but
sluggishly and slowly, the
prices of products produced in
highly
concentrated
industrial

;
:

;

the industry,, in which: these firms
enjoy some substantial opportu
nity to. use non-price competitive

markets. Needless to- say the rela
tive stability of industrial
pricds
is >o.t to any large extent to be
attributed to the superior mora
character or even jfee superior

•

four large firms account for a
high
percentage of the total sales of

techniques, a situation in which
they typically regard their vari¬

wisdom

those who determine
The explanation o::
differences in price behavior anc
in price policies is to be founc
mainly in the differences of. struc¬
ture of different product and serv-

these prices.

ice markets.

As far- as motives; are

concerned
I assume- that when
business firms see an
opportunity
for profit they take it and tha
r

when, labor union leaders see an
other dollar
in
the
till
their

thoughts

turn

rate, in
creases.
When these motives are
converted into action the effec
wage

prices and wages will depenc
mainly on the market structure

on
•

within

which

place.
It should

this

action

takes

require^,no extendec
nor

sta¬

tistical material to. illustrate, the
fact that the prices, of industria
products are relatively stable. This
is, of course, as true of the down

swfeg of the cycle,

as it

upswing.

■„

are

Here

is of the

concernec

with, the behavior.;of prices in the
present
j

period

than ful

employment.

It; is not the prices
of iron and steel, petroleum
prod

ucts, heavy chemicals, aluminum,
glass

other

items

produced

the highly concentrated industria

sectors, of the economy that have
led the way in the present
up
swing of prices but rather grains,
poultry and dairy products, textile
fabrics, lumber and other items
produced in what we are accus

tomed to call competitive markets.
It is not thb prices of motor cars
as
sold by the "big three" tha";
have soared out of. sight but rather
the

prices of so-called used

cars

sold on more competitive markets-.
And when the output of the con
centrated industries has risen in
price the cause of the rise in
price
is, as likely as
not,; to, be found in

substantial wage rate increases.

costs

constant

with

re¬

possibility of adverse

public and legal action,. In mar¬
kets. of this sortofeere is a, strong

tendency towar®btability of prices
over the
cycle.*
By

of contrast, in agricul¬
ture,, in many branches of the tex¬
way

tile industry, lumber and .else¬
where the course of events during
cyclical

about

upswing
follows:

seems

increase

demand

leads to an increase in
price which is almost immediate

unless stocks

are

unusually large

an increase in
costs which soon

Costs

rise

both

output

The prices of agi*;-

present.

begin

re¬

ply and because higher prices have
to be paid to attract resources in¬
cluding labor into the industries
n
question.
The
sequence
o;;
events seems to

from demanc
This, sequence

run

to prices to costs.
's well

illustrated by the relation¬
ship between these variables in
competitive fields of enterprise
during the war.
In the area of large-scale enter

prise,

however, the sequence of
cost-price relationships appears to
run in the other direction.
An in¬
crease

in demand will be followed

increase of output accom
by no, or a very smal
price increase. This situation
may
an

uanied
persist

for

increase

that

car

ries output nearly to capacity
op
crations depending largely on wha

happens to material prices

or to
In the absence of sub¬
stantial changes in material prices

wage rates.

ir
wage rates, variable costs per
init of output remain constant or

rise very
slowly, and since over¬
head is spread over an increased
volume average costs decrease and
crofits increase
markedly. Under

toese

circumstances

the

impetus

spects in which the power cf par¬
labor monopolies seems

structure
ticular,
degree of much

stronger than does the mo¬

stability tovfcr the cycle is

nopoly power of most large, scale
enterprises. Furthermore it seems
certain that labor leaders are less

neither predominantly monopolism

tic.

predorpiirigptly

nor

tive.

exhibits

competir

^ blend! of

moH
nopoly and competitive elements
and if is the parffenlar nature of
this blend that results in the tentto rise without another round of Mency toward
price stability.
If
wage rate increases.
The prices these markets, were either more
of industrial products are caught
competitive or more, monppolist'r
in the middle and. regardless of it seems
likely? that prices would
the reluctance of large-scale en,m o ^^sensitively \ to
respond
terprise
to
undertake
another changes in
demand-conditions than

relations con¬
use
of < what
monopoly power they have than
are
large-scale- enterprises
An
industry-wide labor union may
control the supply of tabor fer
inhibited by public

round of price increases; the prices

of their

products

are

price

system,

■

parts

the

centrated

markets

discussion of the relation of
changes, in the rate of output and
costs.

the markets
one

number

each

relative to
a

firms

the-total

variation in

or a

derstandings
the firms.

markets

large,

lead'

+° i,ave a price policy implies

that

vf
by

th#

price

which-

?f. St ^
market forces oufside it^

control.

The

possible

firm

actionopen to thefirm confronted
this, situation are numerous.

Recognizing that, under > existing
conditions, increased volume can
not be obtained except
by price
reductions, the firm may try to
change these .conditions bv m-

MSge^

to suffii-

has

policy htve
The

dS$honw

slowly to price changes

may

elsewhere in the system, what is
the effect of this price inflexibil¬
,

ity

firm
in

high-level stability in, fee

economy as a whole? At the pres¬
ent juncture, facing
as we are

heavy inflationary pressures, fee
relatively sluggish adjustment of
industrial
prices
can
only be
judged to be a stabilizing factor!
The more sluggish the adjustment

the better.

When

one

the effect

prices

xhe

t|on

ever,

vulnerable-political posf-

lows

made.
a

that

price

conducive

markets

to a price increase seems
mainly given
This phenomenon was of
course, to come from the costs side, i.e., price,
familiar during the war period as from an
increase in material prices of how its
competitors are likelv firms without any~Toss of business
well as after.
It was the large or
wage rates.
The increase in to react to this price
change. If to rivals. That s\A prices are no!
scale enterprises of the
material prices, iq, turn, is
country
likely a price cut is met by rivals the raised is to be
that gave least difficulty to
ex|l§ined by semiprice to> be significant depending on firm
may gain little volume and political considerations rather thar
control authorities and the
highly whether these materials are pro¬ actually lose revenue
by the price by lie economic ^§ments of marcompetitive industries that gave duced under
competitive condi¬ cut.
If a price increase is not ket structures.
yone doubts
Ij
most difficulty; Whatever
the na¬ tions, or in the
large enterprise followed the firm may lose largely the
^this influence
ture of tne
importance
monopoly- problem at sector of the economy.
both in sales andj revenue. Under jn the United S
let him conr
other- times and places, at this
If this, view is
of industrial
approximately these: circumstances the firm may sider the behav
particular juncture of incipient
correct—and I believe that it is— be well advised to leave its
erican counr
price pXices in a Latin
inflation public authorities should
the dynamic elements in the price unchanged.
or
Brazil, in
try, say Argent"
thank heaven for a substantial
system are mainly wage rates,
This situation seems, in fact, to the face of the i
tionary presr
degree of concentration in the
particularly the rates of organized be typical of many industrial mar- sures that now
inge on this
American economy.
labor, and the prices of goods kets
during most of-the business country,
Now why is it that the prices of
produced in the small enterprise cycle. In the absence of substangoods in the heavily concentrated sector of the
R
.
id. Prices
economy.
Further¬ tial change in material prices or
wage itaie;
industrial sector of the
economy more the dynamic elements act
the dynamic
wage; rates the volume of sales
Returning now
are
relatively stable or inflexible and react fairly
rice
strongly upon can and does increase without any elements in
system,
th|
both in the upswing and the down¬ each
other. Costs of
n to
believe,
living depend marked change in prices A price which there is r
swing of the cycle? It would be quite
substantially on the prices increase is not necessary to induce are mainly com
itively deterimpossible to answer this ques¬ of goods produced in the
and-ihe wage
competi¬ increased volume since variable mined- market pri
tion. in satisfactory fashion with- tive
sector, of the economy. An costs seem to be fairly, constant rates of organize
abor, why is
out examining the structure of increase in' the cost
of living cer¬ with
al industrial
increasing volume pretty it that, in the t;
particular industrial markets but
tainly provides, at the least, a much to the limit of designed ca- markets now u
r
discussion,
there are certain characteristics
strong talking point for wage rate pacity., As output increases to- wage rates, tend t
ush up prices
common to all or most of
the in¬
on we ocner
hand, an
Muxv,
ih*s. in mi no Liu lixcx eases as .tne- economy'
proacnes full

high-wage relationship is

profit,

changes will

be iuncture without resorting to thif
dominated by mod of consideration.
Certainly
number of sellers any petroleum
prices^nd the pneof
firm, before changing its 0f a number of other products
will have, to take account could be raised Jay the leading
In

high-level

small

the

Unless
be sustained at

can

high rate—and this means high
wages—the capacity for saving in
the

American

level,

ment. is

such

difficult
far-

at any
full .employ¬

economy

approaching

to create

most

investment problem.

cost-price relations

are con¬

cerned this would seem to afgb®
for
a
much
higher, break-even

point than is customary in Ameri¬
can
industry though how this ,to
to be achieved I don't khOw. I
A recognition of these
however, throws little oron

the question

profit

relation

the attainment

the

port

light
,

maintenance of

high-levei employment
particular

factors,
no

which, cost-prlce^is conducive to

short-run

maintenance- of

employment.

consumption

„

;

turns, how¬

inflexible
employment and output
antitfusf mentality is over the
cycle one raises a ques¬
deeply ingrainedilh the American tion
about
which
economic
^teasing advertising expenditures; people and the ifetitrust laws are thought to date is, to
the firm may also-attempt: to; inr I
say the least,
vqgrely a legislative embodiment
crease
confused and confusing; Person¬
sales
without
reducing
a
profound M&picion of busiprices by one or more of a large
ally, I should support the view
ness
size.
The public reaction
that the inflexibility of industrial,
.category of possible courses of actherefore, to' affrapid increase in
,tion that are usually described
prices tends to even out cycliciat
asindustrial pricesos apt to be very
fluctuations in employment ahd
eon"PriJe competition^ to be disr different than^to a comparable output. At fee same time I
cussed by Mr. Phillips this aftershould
r|ge ^ agricultural prices or in
noon.
have to say that en this matterf
The term Pnce pohcy
as
the prices of « products of
economic thought is badly, dividefe
,1 am usmg if here, embraces the
small- enterprise.
The managerwhole range of devices by means
On the whole question of the
ment of large fivipSf the leaders
of which
the firm
attempts^ to tn particular industrial fields, are proper relatiop of costs, prices qnd
influence its volurne of sales withr
gs
well aware of this as anyone profits at any particular, stage- of
m the limits of the basic
demand
the cycle no one, so far as I know,
else
and the probable effect on
c-?s^ conditions which: lie out-1 rju^Hc relations of a sizable price has had anything very convincing
side its control.
to say.
In a highly productive,
;
increase is certainly taken, into
Even if it is impossible to inaccount. It would be difficult to wealthy economy such as .ours, lit
fluence sales without, resort to exnlam the behavior of certair is probably true that on the aver¬
price changes it by no means folage and over the long run a
loyy^
industrial prices • at the present

highly

't>]\

•

themselves

industria
is

conclude then that
prices tend to adjust

stability

larfft -scale

sluggish industrial \

industrial

It would berunwise, however

American.

pushing

Sluggishness of Price Adjustment

tence that pi*fc attitudes and

^he

of the. explanat¬
it is that; increases in
rates are a primary factor

prices.

response

to< take leave of this subject without recognizing the substantial in¬

Driees,

at least part

wage

both to

wtth reference "to' monopoly and
competitive elements in the-mar-

public

anti¬

ion of why

have

industriffciprice

labor

not to the
same degree, by the public, animus
against business giantism, and one,

cultivation of

ttis'JS:we

trust policy or^ at least

injtfemand and tp

actf^e

such

labor is not inhibited by an

|®reements. among

i^&^there

absent in

Add- to "this the fact that

market.

ket.

own

courses

market is

ac-

non-price forms^Sf rivalry,
"j3*''
;
Effect of Piffle Reaction

■

increases

customarily
■

into

take

enough competition
resist price increases in

will have price effects that must
be taken into account. How
they
are taken into* account constitutes

■

also

market, that

.«

preterit price cutting,
demand re&des.
There is

when

small

its volume of sales

called price policy.

rivals

I cient, monopoly^fhfluence in these

under

now

discussion there is

^Were more re¬
ft® would either

the

count, or if ther^wem rivals, resoonses to chang^F market condiHons would be1'governed by un-

are

particular blend of monop¬
and
competitive
elements
explain price sta¬
bilization- policies in the product

which helps to

have

relatively stable. There is more
to that question than is contained
m

That

oly

nopolistic

economy

industrial

respect to this labor supply
as
a
single firm would be with
respect to output if it were the
sole
producer in the
industry.

If these markets

away from the

with

question whethef^fus rivals would
price inbfease or decrease.

has
exptonar
tion of why prices in highly conr
drawn

it is. in the same position

meet a

;
t

doyjf^bev were more
th&-individual seller
would not be cbri^erned with the

This digression
concerning differences in price behavior in various

the whole industry.

ip fact they
competitive

likely to be

drawn upward by the behavior of
the more volatile elements in the

the

siderations.. in

+i,

of sup¬

price

piarket

-ajhigh

produces

for the cost of living. The
cost of living can hardly continue

rise

to
of

sources

type of

quences

because

higher-cost

but

that

cultural products are definitely on
their wav up with obvious conse-

•

The

between the dynamic elements of
the price system than confronts

The increase in prices is followec

sort to

argument to demonstrate,

•

able

spect. to output and finally a situ¬
ation, in which the firms are sen¬
sitive to the

"ssSf--r-

We could, hardly have a better
illustration of the interconnection

follow,

not

over

any

periods j At

beginning of th's year a
by Robert Nathan and,

restrained

President's

first

,•

rer-

iit

language,

the

"Economic

Re^

port" under the Employment Act

1946

advanced

the .view

that

prices and profits were too high.
•

and wages

too low to sustain high-

"Volume 166

Number 4632

level employment. Since Nathan
saw no prospect of adequate price

reduction, it would require in; his
view large wage increases to sus¬
tain ah, effective demand, sufficient

off the market the

take

flow of goods foreseen for 1947 at
full employment:

The President's

report contented' itself with a rec¬
ommendation of selective price re¬
ductions and wage rate increases,
Now

the fact of the

that, economists

matter

the

present

time do not know anywhere near

enough to be able to predict, on
the basis of current, wage, price,

profits,
what

and

the

employment.' data,
demand and,

effective

consequently,

the leveL .of em¬
ployment and output is likely to
fee over the ensuing; short period.
As things have, turned out wage
rate increases have done

little but

prices and it. is hard to
under the circumstances, how

push up
see,

they could have been expected to
have any other effect.
"Apparently we are in for an¬
.

other

round

shortly.

however, that
further

talk

much

hope,

wo shall; be spared
of the necessity of

increasing wages to maintain pur¬
chasing power to maintain output
arid employment? Admitting that
the long-run and in the ab¬

over

sence

this notion.

of extensive government

in¬

tervention,
a
high-wage,
lowprofit
relationship is
probably

CHRONICLE

giving precision to rious wastes, but there is nothing

About the only gen¬

either

that,

brought about by

whom
have

choose

number

Whom they

sell.

can

the

or
that sellers
of customers to
,

There must

able

three
on

four large

number

dominated

market

considerations

innovation, conditions
the possibilities in the situation. of entry, trade association prac¬
Beyond this point it is impossible tices,
volume; of
imports
and
to go in any general discussion of others.
Furthermore,
the
wav
workable

in any

United States Government securi¬

is suf¬

ties, and only 4.2% other, securi¬
ties
including municipals,
corporates, etc. This indicates meager

buyers

and

such

the

rate

competition.
Further these considerations blend
meaning can lie added only by particular market context

breaking down the problem into ficiently complex to render a f.nal
the context of particular market judgment possible
only in terms
situations.

of the net

is.

There

however, one aspect
problem to which, in clos¬

of this

ing, I wish to direct attention and
the relevance of numbers

that is
of

buyers ancb sellers in a given
market to the monopoly problem.
It may be said, I think, that
large
numbers
riot

are

sufficient

though

necessary
condition
Workable competition.
If
a

effect

probably also large enough, in

the

or that this or any other
particular relationship* is the- de¬
sirable one at a given stage of the
-business cycle.
~
r-

(

absence

port,, to
ticable*

government

sup¬

make'; collusion imprac¬
ineffective.
The indus¬

or,-

try may be unprogressive. and
existing methods may involve se¬

term of

our

return to the first

petition... We have seen that one
of, the important consequences of
that blend of competitive and mo¬
nopolistic influences characteristic
of. industrial markets is

stability

relative

inflexibility of prices.

Jjt would be quite impossible,
people

agree,

industrial

prices to

the

upswings and downswings of the
business cyclfe.
Furthermore, in
my opinion, it would be dubiously
desirable even if it could be done.
Prices would fall very low in pe¬

riods

depression

extremely

rise

and

high- levels

boom
years., The profits of business en¬

terprise could be measured only
in' negative figures in depression
rind

would

soar

astronomical

heights in prosperous years.
What this would do to specula¬
tion, to business planning and to
labor relations is- perhaps riot too
difficult

foresee.

fact,

tious in attributing monopolistic
significance to size of firm or per¬
centage of sales in a market sub¬
ject to active product or process
innovation.
This is presumably
the

basis

for

the

common

sense

that the automobile

popularly priced

cars were

made

by three firms, two of which

sistently

profits.
mon

earned

high

I suggest that

sense

per¬

rates
the

com¬

view is probably right.

the

swings

.What we do want from compe¬
tition is a process by means of
which over the long run—-and not
"""top long- a rum at that^-consumers
get the resultsof a vigorous and
independent probing of the possi¬
bilities of cost and price reduction
in* the American, economy by, inde¬
pendent buyers and sellers.
In
.

recent years various people con¬
cerned with, public policy in the

affea

ards

industrial life than the stand¬
customarily

advanced

economic -theorists

anti-trust

lawyers.
They reject, on the one
hand, pure competition or any
variant of it, as a norm of desir¬
able

behavior;

the other hand,
they' insist mat the tests of mo¬
nopoly ' ordinarily suggested
on

antitrust' actions

are

that vary greatly with the indus¬
trial context.
The term usually

applied to describe such

such

Now
date

that

period,

still in

we are

find

surpris¬

ingly

small differences in yield
between high grade well-known
a

broad

market

lesser quality.

and

For

ex¬

it must be admitted

bonds

selling

are

1.00%,

and

yield about
Philadelphias about

1.10%.

This

represents, only about

$1.00 additional

income

$1,000

per

Another/ example

the

IlLLnqj^five-year bonds

selling on .90% as4 compared with
Buffalo, New'^Ypfk on a 1.05% ■
both good bonds, but State of. Illi¬

very

little

nois

bonds

Ross

progress

has

weiser.issued this year
District located in

School

Marin

County^ Calif.,

having

local loan.

Hov&ever, if approached

eration.

present

market

Income

1946

year

State

District

priced to yield .95%

Illinois

credit

well

known and the/bonds have a broad
market.
Ross - School
District:
known

County; ^ Calif.,
and, relatively

the bonds have a
ket yet their

is little
speaking,

restricted

^price was
than the Illinois bonds.
Generally speaking if
little

known

spondent

buyers,

your

mar¬

higher
credit
corre¬

bank_ and other large
and lS~also little known

conditions.

credit

the

municipality with
interest
payable

from unlimited ad valorem
but are serviced

taxes

exclusively from

the earnings of the enterprise foi
which
they have been issued

basis.

All

amortize

banks

there

should

of fact there

vantages

are

be
a

mat¬

definite ad¬

the

high premium
bonds other than a larger yield
to maturity. The premium through amortization is nothing more nor
less than serial maturity of that
portion of the principal invested.
Many investors look upon dis¬
count bonds with disfavor becarise
the yield to maturity is not en¬
tirely tax
ejeempt. -The
profit
taken at maturity is subject to a
capital gains tax under the Fed¬
eral Income
In

the

Tax

law,
of

cases

muniipalities* the

states

and,,

borrower

constant permanent

ical

control

may

bank friends and various munici¬

pal

paid for that year
If this amounted ' to more than
$5,7*50; and current!/ operations in¬
dicate* about the- same or larger
earnings performance before taxes

dealers in obtaining current
opinions and information.

this

then the use of good
exempt, state and municipal
year,

tax

bonds

should

considered

for

Quality Guides
There

are

many

legal, fiscal and

political factors used as a general
guide in determining the quality
of municipal bonds. They should
be applied as patterns and guides
but not necessarily in the sense
of
set formulas
in
determining
quality of municipal credi|. Some

situation.
The
next step should
be to
determine prices you can afford
to pay for municipals. An estimate of these factors are:
of earnings and expenses for the
(1) Size and character of popu¬
year will indicate the probable
lation.
<

your

amount of taxable income. If you
fit

will

when

into

this

rates

surtax

and

comparing

municipal
taxable

prices

bonds

tax

return

indicate

will

schedule
normal

the
use

exempt
those of

tax

with

of similar maturi¬

Municipals

after

have

should

purchase.
proper tax
institution you are

taxes to justify

After

determining

rates for your

then confronted with the

problem

bonds for
purchase. My earlier remarks ap¬
ply more or less generally to this
phase of the problem. I shall now
of

selecting

are

1.85%

for

specific

discuss

briefly

regard to timing of purchases

(2) Type and diversification of
industrial life.

Character of local govern¬

(3)
ment.

■

(4) Direct and overlapping debt
as related to population
and as¬
sessed
valuation
indicating tax

paying ability.
(5) Willingness to pay as deter¬
mined by past experience.
'"
(6) State laws regarding debt
limitations, methods of levying
taxes, etc.
(7) Tax collection record.
To

apply

any

of these

in any

fixed ratio for determining quality
is not practical, but all of these
and

factors

others

combined

are

constantly important in arriving
at a conclusion in respect to the

quality of a credit.
It. is

not

surprising that many
especially
in
smaller

bankers

situated

towns

from
do

some

distances

financial

not

have

centers, feel they
adequate ability to

judge municipal credits or keep
properly informed. In some re¬

purchased when earnings and

spects the municipal business is.
peculiar. In reality the combined

tax

opinions of municipal buyers in
the aggregate establish much of
the credit standing of an individ¬
ual situation.
Much information

so-called
tax
exempt
revenue
tax status indicate an advantage
bond has become increasingly evi¬
and in most situations will require
dent.
bonds

basis, and also some New York
City 4y4s due the same year on a

the

amount of tax

revenue

with low coupons of-,
prices close to par. For
example, in the present market
there are some New York City,
2^s due 1952 offered on a 1.60%.
at

return

number of additional phases.

by the full faith and

from those

fered

observe

Tax

and

My discussion thus far has been
the conservative investment
directed solely thward direct ob¬
banker recommends that it should
ligation ad valorem tax bonds se¬
be done when funds are available
cured by the full faith and credit
for investment. Obviously this is
of
the municipality
and issued
simply an implied warning against,
with a good legal opinion, accept
able without question by large attempting to guess future market
conditions and in this sense is
buyers of
municipal securities
sound advice.
Municipals should
During the past several years the

Straight

a better yield is available
high premium bonds than,

entity. Polit¬
change, shifts
About one-third of your 469 memmay occur in population and the
aer
banks are in this category.
willinginess or ability to pay may
The percentage of securities other
change, but; the corporate munic¬
than
governments
in
all
size
ipal name is permanent and will
groups is about the same ranging be there
year in and year out.
from
3.5% for the largest size
Consequently the necessity of ac¬
group to 5.3% in some of the other
tively
watching, and following
groups. These figures lead me to
municipal credits is not quite sO
believe that more extensive use of
important as it is with corporate
municipals by the medium to bonds. This-to some
degree reduces*
large banks inclusive might well the risk and
worry aspects in any
increase net profits after taxes
high grade municipal program*
if judiciously approached.
However, municipals cannot be
In order to determine'possible
bought blindly by the average
need for municipals the first step banker and wherever
possible he
might well be to review your should utilize his
correspondent
der

endeavor

Revenue Bonds

principal^ and

„

Corporation
few banks

advantage of at least .10% yield
over
taxable
governments
net

in this manner, price continues to
be a matter of practical consid¬

five-year

Ros&'~ School

ties.

knowledge on your part of
important developments in their

not secured

were

consist

having total assets of less than $2,500,000 or even $3,000,000 would be
justified in considering them un¬

ous

population of 2 650 sold an issue.
The five-year Illinois bonds were
priced to yield
1.05%
and
the
bonds

the

your

.community or communities
close
by^thus permitting continu¬

quality of the two

bonds.

State

member

your

own.

investment, in spite of the differ¬
ence in
the

that

place in the situation without
knowledge. Bonds issued by

ample, among the widely known financial affairs may he evaluated
names
five-year
Minneapolis in much the same fashion as

stand-

a<d is "workable competition."
■"

and I may add

frequently Marin

either insignificant or misleading
and: in any case, have meanings

very

nois credit is m©ne3iighly regarded
organization
than that of the. City of Buffalo.
for a practica¬
About the timfe-the State of Illi¬

consonant with the. fact of Amer¬

ican

them, and I be¬
lieve it places no ratings on cred¬

extremely difficult to obtain ei¬
ther by yourself or by any pros¬
pective purchaser if you should
new underwritirigs declined sub¬ desire to liquidate your
holdings
stantially.
J,
Consequently, the bonds are likely
During this neriod of limited to have a poor market and un¬
supply and substantial demand, favorable developments could take

industrial

have been looking
ble standard of: competition

which rates

market, leaving new underwritings as a most important, source of
supply.,
During^ the war years

with

prices

ice

over

the cycle.

Profit is merely
If taken as current its outstanding in small amounts
the*years to maturity At the time a little known issue
it is tax exempt, but if taken as is marketed the underwriter has
profit; it is subject to* a capital a: certain amount-of information
gains tax. This fact alone materia useful in-evaluating the credit
ally restricts the supply of mu¬ From year tp year thereafter,
nicipals coming into the secondary however, current •information 1*

income

names

case

469

district

Tax law

ncome

the

■

bonds.

names

want

in- the

this

Federal

l|j^

(Continued from page

58%

the

present: Federal

In particular, one should be cau¬

future income.

competitive^adjustment of in¬

dustrial

taxable

profit

sensi-*

doubt whether
tive

-f

traded' for

banks

that

the

terially, and demand increased, to you, it probably should be
largely because of high war taxes avoided. Sources of information,
including both income and excess both historical and current re
profits;,r;'
W* garding municipal credits is rather
(3)
Municipals
are
seldom limited. I know of only one serv
.

assets

of tax exempt municipals by
banks in this district. Under

Buy Municipal Bonds ?

-razae*

indicates

year

use

•

most

by anti-trust or any
pther sort of policy, to bring
about a really competitive adjust¬
ment

Dg You

subject, namely corn?

!l946
total

the

for

the

courses

Competition

Finally let

<■

Bank

Reserve

ac¬

open

these; view

are

report prepared by your Fed¬

to suppliers or cus¬
tomers of the industry in question.

tion

turity
from

ter

during recent years it
has been less apparent. However,

prejudice against them. As

Holdings of Municipals

Bank

eral

part

independent probing of change

although

in the present market it is usually
true that in the same credit ma¬

premiums

technical

sellers

can

wage

ner.

sellers, depends

public utili¬ prejudice against high premiums

rate, in-

creases

ilar to those used for

in the situation to

industry
numbers are large enough to pre¬ is "a highly competitive industry
necessary to the maintenance of vent any serious consideration of despite the fact that, at least be¬
high-level stability, it does not interdependence among firms they fore the war, 90% of the sales of
s

(1235)

prevent individ¬ ties. and' corporations should be
eral
specification
of
workably ual firms from exploring demand employed for appraising revenue
Taken as a class these
competitive market structures that elasticities and
possibilities
of >onds.
can be-advanced is the
following: cost reduction; If measures need revenue bonds obviously do not
workable competition implies the to be taken to improve efficiency enjoy so favorable a- credit rating
availability to both buyer and they will definitely not be meas¬ as direct obligation securities^ and
seller1 of an adequate' number of ures leading in the direction of generally prices reflect this dif¬
alternative courses of action.
ference to some degree. However,
Ob¬ more competition.
revenue
issues
are
viously,, the word adequate puts a ■j The fact-.that large numbers of some
very
heavy premium on judgment of buyers and; sellers will insure highly regarded, and X have no
the significance of facts in par¬ workable competition
does not intentions of condemning them as
ticular industry situations.
It is mean, however, that such, num¬ a group. I merely wish to empha¬
clearly not enough that buyers bers- are necessary.
Whether or size that analysis of them should1
have a number of sellers from not competition is in fact work¬ be approached in a different man¬

increases

wage

too

been, made in

&r FINANCIAL

COMMERCIAL

THE

shifting funds from taxable to

exempt bonds as well as. the use
of tax exempts for new funds.
For several years

most state and

municipal bonds have been sell¬
ing at premiums,, although oc¬
casionally, especially in longer

is carried by word of

mouth, and

exchanges of opinions, rather than
in printed form. Consequently the
average

siderable

buyer has to place con¬
confidence

other

bonds appear in the
market at a discount. Obviously people, not necessarily only one
or
two
persons but
preferably
the
amount of the premium is
several.
does not guarantee service on the determined by three factors, qual¬
Municipal dealers, banks with
bonds.
Obviously, standards for ity, coupon rate and maturity.
and
corre¬
appraising the investment quality Consequently bonds priced at high Bond Departments
of such securities are quite dif¬ premiums carry larger coupons.
spondent commercial banks are
all willing to share their informa¬
ferent from direct obligation se
In the mind of the investing publie there has always been some tion with others.
curities. Standards somewhat sim
Even

though, the physical oper
ating properties are owned by the
municipality,
the
municipality

maturities,

(1236)

FINANCIAL CHRONICLE

COMMERCIAL

THE

September 9 figure of r$7T02. This rise contrasted
scored during the preceding period. The

10 cents oveirthe
with

31-cent

advance

$5.03 on the corresponding 1946 date,

current index compares with
'

(Continued from page 5)
be in balance—and "The Iron Age"

increase of 41.6%.,;'

steel will be so far above the supply that inventories
V;.small and unbalanced.
:
■/

;

oats, bellies, lard* butter, cheese, coffee, tea,
steers and hogs. Declines took place in barley, hams,
cottonseed oil, beans, potatoes, rice and lambs. The index repre¬
sents the sum total of the price per pound of 31 foods in general
use.

The survey this week by "Iron Age" district editors and

spondents all

corre¬

the country covering big and small firms dis¬

across

WAR LEVEL

closes that stocks are below normal when measured against current
manufacturing schedules. Many companies are keeping output high

heretofore unknown brand of conversion
deals, the magazine points
CUt.
V--- ii'i- V " *'• ;-r'[ '
■

Bradstreet* Inc., moved irregularly last week, reflecting nervous and
erratic fluctuations in foods and grains. After an up and down move¬

bolts many

■>

manufacture of sdme common-sized bolts and nuts.
The current tight

ventories, balanced stocks, got rid of obsolete or excess stock and
^gentfrally "cleaned house," "The Iron Age" reveals. Both producer
know, 'however, that an^ sudden decline in demand
for. durable and non-durable products Would cause current inven¬
tories to become a much larger factor than
they are now.
;5< **:
The American Iron and Steel Institute announced on Monday
M this week the operating rate of steel companies having 94% of the
steel capacity of the
industry will be 94.1% of capacity for the week
.(beginning Sept. 22, 1947, as compared with 89.4% one week ago,
month

ago and

90.4%

This represents an
increase of 4.7
points, or 5.3% from the preceding week. The sched¬
uled increase is made possible by the resumption of normal opera¬
tions; at the Carnegie-Illinois Steel Corporation, which had been
affected by a strike of railroad employees for two weeks. "*
one

year

month

one

ago,

and

1,593,200 tons

Co.* said Thursday, Sept. 4, that
the member banks of the Associa¬
tion have decided to remain closed

pared with 258,000 in the previous week, and with only 80,000
in the same week a year ago. - With the movement from the

light, cash yellow

country still

prices

corn

rose

a new

extension
been

markets

Cotton

the

new

last week but the general
in the latter part of the period.

adelphia,

bales smaller than had been generally

one

ago.

year

bill to permit banks to
holidays will be in¬

do business on

troduced in the next session of the

While this will be a
all holidays*
which was passed

legislature.

crop

blanket bill covering

expected.

similar to
this

According to the New York Cotton Exchange Service Bureau,
left the prospective domestic supply of all cottons still at an
14,400,000 bales, as compared with a total supply of 16,-

the purpose is to permit banking
hours on holidays in which gen-

111,000 bales last season. Export demand for the staple was rather
slow but domestic mill demand as well as commission house and

eral

government

estimated

The amount of electrical
energy distributed by the electric light
and power industry for the week ended
Sept. 20, 1947 was 4,977,141,000 kwh., according to the Edison Electric
Institute. This compares
With 5,053,300,000 kwh., an all-time

Consumption

loan.

cotton

during

August

was

Labor Day,

■week, and
in the

10.4% in

was

excess

RAILROAD FREIGHT

Loadings of

HIGHER

freight for the week ended Sept. 13, 1947,

1.7%

United

States

and

Canada

the

past week

piay effect a

slight drop in production according to "Ward's Auto¬
motive Reports." The present
scarcity of sheet steel also continues to
threaten planned

schedules, the above trade authority reports.
In
according to "The Iron, Age," an Authority in the steel trade,'the
automobile industry this week admits that it will not be able to
keep
Up a 100,000 car a week pace during the balance of 1947 because of
its inability to get that much
steel.
Auto leaders and steelmakers

faet

current

point.

week is

At least

one

Production

u?V;s f°r

of last year,
ure was

line

higher

The

delity

coun¬

77,351 cars and
27,170 trucks, while the Dominion figure showed
3,590 cars and 1,977
trucks.

CHANGED

sales last

RETAIL

WHOLESALE

AND

HIGHER

•

added:

"
'

SLIGHTLY

the

LEVELS FOR WEEK AND YEAR

LATEST

WEEK

in the week just ended
they were only one-third as
1939.

^s numerous

1946,

in the corresponding week of
as
in the same week of

high

prewar

?.?

Most of the week's failures, 62 out of

liabilities of $5,000 or
four times

were, over

more.
as

numerous

last year when only 15 concerns failed.

failures involving liabilities
failures

were

down

from

last

the

73, involved

week ago,

they

comparable week

of
A decline appeared in small

under $5,000.
15

total

Increasing from 60

week;

year

some

coats

were

year

ago.

concerns

•

Irregular movements slowed down the, upward trend of food
•prices in the past week. The Dun &
Bradstreet^ wholesale food price
index registered a new record
peqk of $7.12 voir September 16, up.

(;

•

>jtli'i

County*

Md.), which maintains a branch
Hill, could purchase the
assets apd assume the - liabilities
of the Commercial. National.

This*

said the Baltimore "Sun" of'Sept*

was announced jointly on Sept*
by. William H. Hollowav, Presi¬

Hill, and
President of
County Trust. From the "Sun" we
also quote: '
'
f hi

Addison

hardware,

quality persisited.
•
; Department store sales

Reese,

organized

was
&

„

The Commercial National Bank

popularity.

1902

has

and

excess

Snow

total

$2,000,000.

$47,000,000.
a

The County

Trust Co. has assets of

erated

Hill- in

resources

than

County Trust has

op¬

branch at Snow Hill since

1926.

Subject to approval of the
banking author¬
is planned to make the
deal effective Sept. 23.

Federal and State

ities,

Shareholders
tional

Bank

the

Lake

First

Na¬

Forest,

HI*

have voted to increase the capital
stock of the bank from $200,Q00 to

;

country-wide basis, as taken from
$300,000. It is learned from Jhe
ended Sept. 13, 1947,
Chicago "Journal of Cojmmjerce?
declined by 1% from the like period of last year, This compared
that it was also recommended that
with a increase of 1% (revised figure) in the preceding week. For
the surplus account of the1 bahk
the four weeks ended Sept. 13, * 1947, sales decreased by 2% and for
be
increased
from
..

the Federal Reserve Board's index for the week

the year to date increased
On

by.7%.

$200,0<M)' t6
$300,000.
It is added that We
present plan is to issue'the iie\y
\ shares on or about Oct, 31? kt'a
$50 par value,, present sharehold¬
; ers receiving three $50 par. value

New York-the
stare volume for
increase of 20% or mors

comparative basis retail trade here in

past week increased substantially.'Department

example

;

failing
.

the

at Snow

building materials and Jeneral items
for household repair was steady at a high level. Better quality
furniture, draperies and some types of floor coverings were purchased
in large volume. In some areas substantial price cuts on certain types
of radio-phonograph sets stimulated buying. The demand for nation¬
ally advertised refrigerators, ranges and washing machines continued
to exceed the supply.
Wholesale volume in the >yeek was at a slightly higher level than
that of the preceding week and moderately exceeded that of the
corresponding week of 1946. Buying generally continued to be
optimistic but some concern was expressed over rising prices. The
preference of retailers for moderately-priced merchandise of good

com¬

FOOD PRICE INDEX AT NEW PEAK IN MORE MODERATE
RJSE

that

of Maryland (the main
Office of which is at Cambridge*

demand and boys' trousers and sweaters in¬
Children's back-to-school articles con¬

in good

creased

tinued to be sought.

was

reported

showing

the similar week of 1946.

It should be pointed

out, however*-

reported.

against flv? last week and only .two

Na¬

Trust Co.

attracted favorable attention with lingerie,
dresses, hats and shoes selling well. Men's worsted suits and top¬

mercial service, the rise was

Commercial

weather- in

The number of retailers
going
out of business with loss to creditors this week rose from 25
to 29 or
about five times as many failures as occurred
last

sharper, with

the

liquidation

Fall styles generally

to retail trade and commercial service.

even

of.

tional Bank of Snow Hill, Md., the
bank
was
voted
into voluntary*

over

$ ■

special meeting of stock¬

holders

increased slightly although continued
areas discouraged buying.
Women's new

that the comparison was affectedi by the fact that trucking and
delivery strikes sharply altered sales volume a year ago.
The religious holidays cut into wholesale aetivity for the
week, but mail orders are heavy and food prices held at or
near peak levels.
Heavy purchases of machine tools were also

year.

He served in the

Lieutenant Commander in

as¬

firm

dent of the bank at Snow

hot

ago

Three-fourths of this week's failure^ were
concentrated in manu¬
facturing with 23 and in retailing with 29; Increases were confined

been

law

the

Interest in Fall apparel

Numbering 11, these small
nevertheless, there were

considerably more failures in this liability class than
when onty four failures were
reported.

has

Baker

with

Navy."

(

slightly last week as compared
with the preceding week. While the dollar
volume of retail sales
was a trifle higher than that of the corresponding week a year ago,
unit volume was moderately lower. Dun & Bradstreet, Inc., reports
in its weekly survey of trade. The proportion of cash sales to total
volume* declined as consumers increased their use of charge accounts
and collections were reported less prompt than in previous weeks.
Food volume rose moderately and resistance to the soaring prices
of some foods generally intensified. The demand for meat, butter and
eggs declined somewhat, but both fresh and canned vegetables, fruits
and juices were purchased in considerable volume. Frozen foods were
in steady call and the demand for eleomargarine increased. Highpriced liquors were neglected in favor of beers and ales.

Changing only slightly from the previous week, commercial and
industrial failures numbered 73 in the week
ending Sept. 18 reports
Dun & Bradstreet, Inc.
This compared with a total of 75 concerns
failing in the preceding week. While failures were almost four times

Pitts¬

announced

was

"Mr.

\yar as

SLIGHTLY

REFLECT

TRADE

Company

Pa.

by Alexander P. Reed*
President,
said
the
Pittsburgh
"Post-Gazette" of Sept. 12, which

year.

Torrance

Baker & Watts.

'
•

The demand for

Last week's output comprised
104,521 vehicles made in this
try and 5,567 in Canada. - The U. S, total included

September

Trust

Sept.

Trust Officer of the Fi¬

burgh,

tl;

election

Baker

the

where uric°s obtained

areas,

at the

than

•

the

United States and Canada
during the past
110,088 units, compared with a revised figure of 106,095
Previous week and 80,972 units in the comparable period
states Ward's. In the corresponding 1941 week the
fig¬

FAILURES

level.

with what

60,615 units.

BUSINESS

50%

major, automobile manufacturer the

revising his production schedule in

active

sociated

his steel suppliers have told him he would
get and not what he would
like to get.

week totaled

in western

very

Consumer buying increased very

ground and established a new postwar peak. A
Shutdown this week by Hudson to
permit changeover to new models

agree on this

well

continued

i
if

sje

Imports of foreign wools into this country continued at a very low

AUTOMOTIVE PRODUCTION HITS NEW POSTWAR PEAK

the

wools

domestic

done.

Christmas.

Average prices since the new season began this month were re¬

ported

ti
Auto output in
broke into new high

average of 33.300 bales r>er

poration. Keen competition featured Australian wool auctions.

above the corresponding week in 1946, and
increase of 66,259 cars, or 7.7% above the same week in 1945.
or

higher than those offered by the Commodity Credit Cor¬

were

totaled 922,360 cars, the Association of American
Railroads announced.
This was an increase of
133,310 cars, or 14.0% above the preceding
week which contained a
holiday, This represented an increase of

15,191 cars,

Boston market

YEAR

revenue

Trading

year.

LOADINGS

FOR WEEK AND

This compared with 677,489 bales used during July, or a daily
average of 30,800 bales. Weather conditions over most of the belt
were reported favorable for picking and ginning.

high record, in the preceding
of the 4,506,988,000 kwh. produced

corresponding week of last

bales,

Thanksgiving Day and

day.

at about 700,000

normally

plan, banks would be
closed only on New Year's Day*
Memorial
Day, Fourth of July*

substantial amounts of the n6w crop were reported being placed in

ELECTRIC OUTPUT 10.4% HIGHER THAN A YEAR AGO

business

Under this

trade buying showed considerable increase. Offerings appeared tighter
the

one

by the Ohio Legislature this year*

estimated

for, one of the
said; it may' be' ex¬

pected. that in view of a five-day
week in banking here and in Phil¬

following the; government's second forecast
11,849,000 bales, which was about 250,000

appeared

Strength
of

plan which has

spokesman

banks' here

irregular

were

upward particularly

was

Saturdays in

of the

trial since June.

all-time^

high of $2.58*4 per bushel.

trend

business

for

ago.

The week's operating rate is equivalent to
1,646,700 tons of steel
ingots and castings compared to 1,564,400 tons one week ago, 1,633,700

tons

sharply

due to heavy profit-taking but turned

one

reacted

largest volume reported for any week so far this year and com¬

.and ^consiifher

93.4%

prices

Trade lifted sales for the

controlled in¬

consumers

and

wheat, corn and oats on the Chicago Board of
week to 377,000 bushels. This was the

Active trading in

inventory situation applies despite action in

the past several months during which steel

Denton, President of
Pittsburgh
Clearing House
Association and Vice-Chairman of
the Mellon National Bank & Trust

upward in the closing sessions to recover most of the early losses.

entirely out of material needed for the

are

unsettled

were

Thursday and Friday

are incomplete. Some producers of these small

markets

Grain

the

closed at 287.05 on Sept. 16. This contrasted with 283.53
recorded a week earlier, and with 234.35 a year. ago.
•

survey was

~1V|

bank

Frank R.

and

15,

Saturday

part:

ment, the index climbed to a new post-war peak of 286.28 on Sept.
,

Y
One of the most serious conditions uncovered by the
.the extreme shortage of bolts and nuts. For the want of

but strategic products

wholesale commodity price index, compiled by Dun &

The daily

-by buying in the gray market, using substitutes, working hand to
mouth, periodically shutting down and utilizing every known and

projects and products

COMMODITY PRICE INDEX AT NEW POST¬

DAILY WHOLESALE

(Continued from pagel6>

closing which
has been observed by the Pitts¬
burgh, Pa. banks during the Sum¬
mer, and was scheduled to end at
the close of September, will be
continued
indefinitely,
it
was
stated in the Pittsburgh "Post-Ga¬
zette" of Sept. 5.
In indicating
this, the paper referred to, said in

■

cocoa, peas,

■

the week wereflbur, '

wheat, corm rye,

appear

;;

Bankers

^ 1 .-i.

higher 1 during

moving

Commodities

front in this—
the situation is tighter than ever.
With some companies it is
worse than war days.
Recent statements made by steel leaders
indicate two years as a "safe" guess as to how long demand for
was a way up

Thursday, September 25, 1947

;

•

••

new

shares; for

value share

James

each
held."

now
*

■'

:$100
-vn>?'.

it)

»r,

par

•

Mir-if

S; Bush,

former partner
Co., and more
Vice-President of First
National r Bank of * St. Louis; has
of G. H. Walker &

recently

index department
been elected a Vice-President, of
|;o Sept. 13, 1947,
period last year; This compared, mth Industrial Bank .of St* Louis, ac¬
cording to the - Sept 16 issue of
a similar decrease in the preceding
,; week/ For the four weeks . ended
'Globe -Democrat"
of : that
Sent. 13, 1947, sales declined 3%*-and for the- year to date rose py the
According; to * "the' Federal

Reserve

Board's

store sales in New York City for the weekly period
decreased 3%

-,i

below the sam6

)ljf

1'-

J «.K''

r- £

ri ?'•;

c 7

i)i

•)

•

♦

•Volume 165

Nutwtfer 4632*

TOE €0MMERCIAL & FINANCIAL CHRONICLE

two

other

handicap
soon

(1237)

languages

is a great
should introduce as

one.

possible the simultaneous

reproduction in all the three
guages as

action

(Continued from page 3)

;

done

during the

Geneva

las

can

months under the auspices of the

■

! Economic and Security Council of
U. N. to initiate regional European

{

the

ment

country

any

taken without the

in respect

agree¬

government

that

country" seems to limit and ham"
per

practical

acitvity

the

and .againas - to Commission. Such action, how¬
whether the continuation of such ever, can always be taken 'insofar

cooperation,

still be .possible
'as -an alternative to the final and
definite split » of
Enrope.^There
: " jnay' be even the possibility
of
V combining specific Western European cooperation with further
'. Economic negotiations on a broader
regional basis under the auspices
:
of U. N. along the patterns of the
cooperation

may

the

interests

the

opposing

the

Internatioal

former Minister

Sweden

hotly

;

last months.,

No; possibility

•

■'"

should be disregarded in view ol
the seriousness of the whole pic-

;

the

second

indeed just entering
act of Europe's

war

drama.

limits

tions ;

debated

are

Trade

iri

Swedish-Russian

trade

'agreement)
Secretary of ECE,

Executive

as 1

deliberations

started in order to determine

were

what to do with

ECITO, ECO and

affected, and the EECE,

the

Commission

are

(b) and (c) of the
mandate, clause (a) gives the pos¬
sibility of participating directly
in "concerted action" for the eco¬

the European

the third act of

It would be a. deus ex

"tragedy.

machina in its proper sense.

One

nomic reconstruction of Europe as
a whole or parts of this
continent,
and

for special

regulatory activ¬

ities.

are

economy was

Council's

much debated.

resolution

consultation

with

The

provides

the

for

respective

protagonist would appear in the

and, by allowing "study of eco¬
nomic and technological problems

role of the

modern

Atomic

Bomb.

occupation

member

authorities

countries"

leaves

the

Commission free to study German

Background and Structure of ECE
In early

•

■

after

;

May—just

Moscow

"Economic
its

the

—

few weeks

Commission for Europe" began
discussions

here

sub-committee

Geneva

and.Social Council
the
1

United

Economic

the

(ECOSOC) of

Nations.

A year

ago

ECOSOC during its

First Session
'.-set the ball rolling by a resolution

asking a newly established Eco¬
nomic and Employment Commis¬

advice

for

sion

"problems of

thorities of the German Occupied
Zones, V Active members are in

problems

insofar

member

they

countries

and

affect

insofar

such

studies

with

the agreement of the

carried

can

out

occu¬

its

broad

The participation of

Coal

will

admitted

and

turmoil

Europe.

Additional contact with the

four

countries

many

deeply in¬

are

the

Council

consultation

the experiences of

"E-Organi.

instead of

(ECO);
The

financial

Gen¬

nomic

the

Emergency

Eco¬

for

Europe

ECITO established

through traf¬

put to work, immediately^: f>
The
basic
mandate
of
ECE

was.

framework

the

United

Nations, formulated in a
somewhat
diplomatic
language,
reads

(a)" to initiate and participate
'ih rheasures for facilitating con¬
action

certed

*ecoh6tr,uction

for

the.

econpmic

Europe,

for

•fraisiHg the level of European econoijfiic activity, and for maintain-

iihg

and

strengthening

the.

eco-

iibmuc. Relations of the European
"countries both among themselves

";anfl with, other countries of the
\

eWorld;';'
vestigations
nomic

and

such in¬
studies of eco¬

or sponsor

and
technological

prob¬

lems and of developments within
member countries of the Commis-

*siom apd within Europe generally
as the Commission deems appro¬

priate;
(c) to undertake or sponsor the

evaluation and disr
of such economic,
technological and statistical in¬
Collection,

seminatidn

formation
-

deems

the

Commission

appropriate.

The additional clause "that no

political differences.

Coal Committee which

new

visionary initiative, by monkey

begin its activity not later

31, 1947v

general

•

tempt at

...

reservation

ECE

was

the

•

first, practical

in coal.

etc.

ECE

was.

the

traffic

Besides the identification

railway cars and similar
organizational measures are still

going

fats

certainly

and

will

oils,

find

inevitable
as

question

on.

concerned

and interested under the
regional

other

organizations,

and

Chamber

the

Trade
keen

World

interest

expressed

After

5-16)

the

May
a

two

2-14

third

first
and

session

sessions

from
is

July

planned

for

assist

the assumption that
the general
political circumstances dp. not in¬

increasing coal produc¬

tion it is also

acting as a channel
for ordering mine
machinery and
studies prices, manpower and in¬
vestments. A recent arrangement
within; the framework of ECO be¬
tween the three western
occupying

for

increased

allocations

of coal to France
may have cori-

importance,

but

has

probably to be revised and suplemented by Polish coal
exports
and
perhaps
Middle-German
brown-coal deliveries.
\
EECE—the real predecessor
CE

—

»!

performed

ail

the

other

January

1948 according to
western-eastern
patterns
under

terfere.

still

have

practically

prove

whether and how far it can offer

working

pattern

for

problems

the

eco¬

Europe' and

zone as

well

tensively

each

of
as

occupation

in Berlin

discussed.

was

Final

ex¬

deci¬

High poli¬
finally determine the
future activity and efficiency of
ECE.
But only
a
practical test
will

will

show whether economic

ordination

litical

excluding

problems

purely

bring about
within

can

ECE expressed the "hope that the
USSR would feel it possible nev¬
ertheless
to ■ participate
in the
.program of mutual aid.

A recent list of conferences sched¬
uled for Geneva indicates that five

which

loom

where.

—

considered

John

Dulles recently mentioned.

speculations,
mature and
soon

however,
can

are

pre¬

one

political events.
should keep in

mind that at least some
has already

All such

be overshadowed

by coming

Nevertheless

Foster

joint work

been practically ini¬

tiated in the last months and has

continued until most recent times:

often

every¬

On the verge of the abyss

common danger, not only
Europe but for world peace.
But perhaps the very imminence
of that danger brings a
strong
hope for a new, economically co¬
operative Europe in the frame¬
work of a peaceful world, after
the long period of horror, hate

for

and destruction,

(w,r

on->,

attentively than in 1919
the warning voice of John Maynard Keynes
all the

fateful

should be heard by

participants in the coming
conferences:

"The

bankruptcy and decay of

Europe, if we allow it to proceed,
will affect every one. in the long
reconsider

been

—

background

there is

run,.

N., helping

to be frank

—

the

inter-European; solutions

Eurppean

ness

the framework'of U.

In
fact, at a meeting of ECE on problems. Occasionally even the
July 7, the Soviet representative possibility of organizing the whole
Ruhr problem within ECE has
V. Zorin objected
strongly to the

the Marshall questions. The Brit¬
ish, and the French delegates on

in doing too little
doing it too late. It may he

| the':'lastchance to. suppress

co¬

po¬

( simultaneously to solve German

creation of the western Commit¬
tee in Paris formed for
answering

may

discontinue

Despite this progress in cooper¬ ■least" during
the;Tire Within the
ation., and agreement ECE may house—motives of naked selfish¬

tics

European countries in¬
cluding Ruhr coal. In its effort to

powers

The Prospects for the Future

until the next session.

Handicaps and Results

requests.

the practice of the past two years,
and

j- informative sion, pn- .the, relations, with• the
zonal authorities was postponed
• 1
' '

participation.

plan

which consisted

headquarters

Federation

organized and

is ready to function.

the Inter¬

Unions, have

Planning Di¬

Commerce

European aspect and the respec¬
practical
solutions.
Many

national

was

perhaps also for some German
questions. A proposed resolution
permitting the Executive Secre¬
tary to open up an office in the

tive

(from

various

only

Economic

nomic

Ger¬

question: International wa¬ The attempt has been made on,a
terways shall be exempted from non-political,
cooperative
selfthe activity of the new
Transport. help and self-control basis, as the

part of this continent.

ube

technical solution to avoid
dupli¬
as

at¬

constructive European
"from inside," including
a

solution

many

agencies

and

wrenches and last but not least by

made by Russia to eliminate from

world-wide interest and activities
ip the regulation of timber^ fish-

of looted

siderable

[' ■\(b), to make

of, its, main, tasks

ECO -allocates coal between the

follows:

cations,

Commission

(EECE).

fic in Europe after the war, espe¬
cially through the occupied ter¬
and
one
for Asia and the Far
ritories.
Its
Wagon
Exchange
East. "While the latter will hold
Committee met weekly to balance
its first preparatory meeting in
the numbers of in- and
out-going
the
Philippines
in
November
railway cars for each country. One
.1947, the European Commission

the

London in May 1945 for European
allocation of coal, was taken over

the discussions the delicate Dan¬

during the sessions by spe¬
cial delegates. The Food and Ag¬
ricultural
Organization
(FAO)
has already explained its
special

supply, fertilizers,
former

commission for Europe (ECE)

within

intricate

European Housing huge work of rebuilding European
economies can easily be wrecked
The former European Coal Or¬ by
the
danger
of
Utopian
or
ganization (ECO), established in bureaucratic inefficiency, by lack

the

Organiza¬

The

house

be the last chance to

Assembly recommended the
formation
of such a body
and
ECOSOC
established
in March

•.

The

the

problems.

Marshall

eral

■one

pai-

meanwhile

vision of ECE

devastated

finally

pa¬

much

June

The European Inland Transport
"discussed, ttie USSR argued first
tha± such; r a, "commission would Organization. (ECITO)^
to jSuj/'too much; emphasis
The European Coal Organization

But

much

sented

will be built

•countries.

for

Committee of ECE. At the end of

time

established under the auspices of
U. N. were continuously
repre¬

coordi¬

The further activities and studies

Kingdom, the United States and the above-mentioned
When this report was zations":

aid

same

paper-work.

developing

"Poland.

reconstruction

down.

the

tience—though not

tions."

emer¬

help. It will a3k for sincere
willingness of all participants to
cooperate, for tenacity and mag¬
nanimity, for bold leadership and

burns

Panel

practice

put

immediate

gency

can

with

nated economic European system,

"Economic Commission

"•bn long-term planning

Sub-

new

addition

that

.4. special question will be what f 'bne
for

four

but not in theoretical studies and

/by the delegations of the United

Europe) a Com¬
Industry and Materials

time

some

tience

Moreover,

former

Economic

jas

in eastern areas—will take

Electric Power and addition¬

than Dec.

Occupying

not

appalling starvation in western
well

resentative of the United States.

the

es¬

Timber;
Fertilizers;
Alkalis;

particular suggestion of the rep¬

was

for

created with

ally

administration
Forces.

ECE"
of

(Emergency

already
rather strongly with the economic

interfered

of the

Instead

Committee

especially
explain fully

basis—coordinating,

in view of the present emergency
situation
of
bad
harvests
and

and

invited in order to

■'

tions, partly for termination, part¬
ly for the continuation of its func¬
tions, a new "Inland Transport

Occupying Powers in Germany is
already resumed according to a

Commission

(ECITO)

"unifying" the different interests

Switzerland

economies
Count Coudenhove

recommenda¬

doubt

tainty

is thus not

European

detailed

Committees:

countries

European

and for which

Organization

made

was

that

nomic

had

yet belong to the Commission is

reconstruc¬

Transport

still under discussion

Spain which seems to
excluded). But there is

the

The.present attempt to handle
European problems on an eco¬

mittee

(except for
be definitely

countries

for

hardly could give technical advice.

EECE

the above-

different

fundamental questions

Committee

tions according to (a)
The

been estab¬

the

precondition

full unity has been reached. After
the European Central Inland

tablished.

pying authorities. The possibility
of participating in concerted ac¬
excluded.

and

financial as well as
monetary
problems which have to be settled

proposal

the

■

other branches of U. N. and with
"N 0 n-Governmental

tor Europe," put forward jointly

Allied Control Council in Berlin.

in¬

create an

time after

coun¬

different European
the

ings for the first

Byelorussia/the Ukraine, Poland Richest nation of the world should
and Yugoslavia
simple majority be introduced just now in Eu¬
rule was introduced but may not rope." The discussion
turns more
be the final solution. Against the realistically and more
modestly

re¬

how their situation affects and is
affected by the present uncer¬

made

"■

•

mentioned countries which do not

terested

economic

terest in European and world
construction as a whole.

fore it a detailed economic report
the

heard
gather¬

in these

war, 4oes not seem to expect now

tion

arrangements

son

•

make

tries.

■

N., as Austria, Fin¬ Zone Authorities has
Hungary, Italy, Portugal, lished.
Spain, Switzerland and the Au¬
In other

speeches, that they

devastated

really

was

Geneva

"Fed¬

Voice ; of

The most important and

land,

participating in the ECE discus¬
sions stressed in their introductory

reconstruction

The

any

areas." Lastofall ECOSOC had be¬

here

members of U.

Relation to German Economy

military

-most
-

Europe, which

represented in ECE thus far, with By a letter of
August 14, direct
the exception of nations not yet contact with the combined
UK/US

particular" also Russia

knows only too well that this new

Europe.".

practiqal help from
wdllmeaning but over-optimistic for¬
mulas according to which "the
hotly
disputed paragraph is-Rule~ 35. type of Federal structure which
Against the v"6ices*6f the USSR; has made the United States the
trials.

and continue consultation with the

Eighteen European countries

(including
the votes of
Byelorussia, and the
Ukraine), and the United States..
The question of the Commis¬
t
present dilemma will have to be
The latter participates not
only as
sion's competence to concern it¬
1 .examined to prevent the appear
an
"occupying power," but in
self with
problems of German
■ance of a new deus ex machxna
view

for, the General Assembly in Ge¬
neva and during the
Nuremberg

itself

stressed under

Every way out of the

ture.

not

are

lan-j

in the room

erated

all
to
be
merged
or
accordingly brought in line with the new ECE.
same votes the Executive Secre¬ around such problems as raw ma¬
(for instance on a special area).
tary was empowered: to resume terials, ■ exchange understandings
And while purely advisory func¬
Wide Representation
action

.kind

this

countries

(who

responsible for the.

was

Trade

experienced

ambitious blueprints for

We may

view
For

the
the

still have time to

our

^courses ^and

world

with

immediate

new

future

eyes.

events

taking charge, and the near
destiny of Europe is no longer in
are-

the hands of any man.

The events

the coming year will
not, be
shaped by the deliberate acts of

statesmen, but by the hidden

cur¬

rents

flowing continually beneath
the surface of political history, of

which
come.

no one

can

one

predict the out¬

way

only can

influence these hidden currents^—

by setting in motion those, forces
advisory and allocating activities meetings of
ECE's newly created
Enormous Task
thus far undertaken on a
of
instruction
and
European Sub-Committees will take place
imagination
All this will present enormous
reconstruction
basis, as in food between September 22 and Oc¬
which change opinion. The asser¬
tasks
on
a..
and
purely ; economic
-agriculture' " (seeds,1 fish; tober 9.,,
tion of
v.. ;
truth, the i^nveiling of
ground. Nobody within the, dif¬
draught - horses, ' fertilizers, ' etc.)
During the two summer sessions ferent
and last but not least
groups
discussing. ECE illusions, the dissipation of hate,
concerning
.

■

"Trade with
Trade with

After

the

Germany. »
election

s ECE

adopted

Procedure.

Gunnar

are

Myrdal, the well-known authority As

its

own

Rules

The official languages

English, French and Russian.
continuous

translation

into

problems

seems

moment

purely

to expect at the

progress

political

angle,

from
or

the

the
of

enlargement
men's hearts

from be the means.*'

and' i instruction
and

minds

must

in the
is like

Tomorrow's

WHYTE

By WALT®

lions in 'Greece and Turkey are

■..

*fc

•

•
;

similar, i.e.: equally bad. Both are
agricultural countries - still in
primitive stage, with equally
low yields (per acre, both concent
irating on the production of wool,1
tobacco, ./olive nil, figs, grapes,:
wines and dates for export. Y-IrM

tries for
an

poor

continues

Inflation

to leave,

The

skyrocketing of com¬
market eold.
Until .proof is modity prices is an interest¬
seen, sidelines is recommend¬ ing phenomenon that meanst
ed.
profits to those astute enough
to take advantage Of it. But
If there is any-single thing;
•by the same token it is pos¬
significant about this market
sible that, with an election
it is that inflation doesn't af-:
coming up, restrictive govern¬
feet everything at the same
mental clamps will be applied
time.
That inflation was in
.

the cards

deep secret.
Precedent pointed to it and
the policies followed by the
was no

made

Government

inevi¬

sellers

have

shown

economic merger:' France rand,

couraging

zero.,

and:-

Czechs

Slovaks

ment

and

soon

open

enm jty

from

news

needs.

kwh. of electricity a

in both

than at short .term

lower level than in Slovakia

oven

The long range conditions
of the countries must be

to avoid

e.g. with 7,000 million kwh. a year
produced by Philadelphia Electric
alone. In the long run however,
Turkey would make a very attrac¬
tive partner in a merger with some'
industrialized country, not only
for its magnitude (18 million in¬
any¬ habitants on
.300,000 square miles

one

which broqght Chechoslovakia into >?;
life resulted at first in estrange¬

that the

and

yields

hectare

per

could not stand any comparison
Turkey, the larger of the.
studied
in "all
respects,
before with the yields reached in Czechor
two countries, produced only 81
merging two countries, in order Slovakia was considered as the
million kwh. «a year as compared

favorable

The

question -of timing is sign: they've hit the top of
obviously of paramount im¬ an old trading range and are
portance in the buying or selb kind of marking time. They
ing of stocks. To be right too could start an up move from
soon, or too late, is debilitat-J such a position. But until they
ing to any account. Such ;a show it by positive, rather
situation applies to trading at than
negative performance,
anytime. It becomes particu¬ the stand taken here some
larly potent during an infla¬ weeks ago will have to re¬
tionary market. There is no main.
*
*
*
point in enumerating the po¬
sition of * stocks > today < and
More next Thursday.
** *
compare them '"with prices ; a
[The views expressed in this

hood

.possible consideration of

consumed Hbout looking further

Greece

thirties,

enough gumption to do
thing about it. The averages

of stocks.

against

in Parjs and in Rome, Both
coun%, -the roots of the'serious inner dif^*
tries show a considerable willingficulties in Czechoslovakia which 5
to discuss the subject. En¬
never could be eradicated..

the stock market is too early
The only place it didn't
to say. The market itself con¬
touch was the stock market,
tinues to mutter in its beard,
which again proves that the
bestirring itself every now
expected seldom can be and then but never
showing
counted on by the buyers and
(

part of the ; population
the jricher
part
soon
changed into political bitterness
and antipathy,: &nd "the brother¬

poorer

mess

year..

How all this will apply to

his

of the

Europe ,-amg
* A:
In 1939 and 1940, the Czech >
dicates that soon concrete steps
industry;
Government in exile studied the
might-be undertaken in this direc¬
—that's about all they have. The*
idea of
a, customs union
with
tion. The question arises whether
Poland to he realized after the
figures of electricity used Show,
an C economic
merger
has
any the war.
the poor status of their Industrie
The fact' that farming
chances of success. We must try
alization. In the beginning of the
in prewar Poland was done on an
almost

dustriaiizartion

125 million

;

and

envy

small textile .and mining

that will not do industry any

table.

growing wealth. The

Italy. Fortunately, the idea of a; dri the
part of Hhe Slovaks against
custom s unionisbeing advocated
Czechs. This has been" one Of .1

the

(

brother in Bohemia

the

•

another.

-A

Jje

v( Continued from page 2.)
has adqpted the highest tariff pro¬
tedtion .tfor jmeat ..and flour that
Why it acts the way it does; of OSurijpe.' me (present staffeus of . "has been in affect in
any of these
isn't any of my business, or '.Turkey ^represents a certain *re-t three
countries, viz: in Luxemjuvenation.
rather if it is, I can't see how,,
Greece and Turkey y."
.£
if I know the reason, it will)
Gut of the ,15 JjJurqpean states j
Economically however, condP there .remain only%wo more coun¬
affect the trend one way or

Wkyte

rs—

Thursday/"September

reasonably near future1
tossing a coin.
*

Markets
Walter

& FINANCIAL CHRONICLE

COMMERCIAL

THE

(1238)

deadly mistakes.

severest

the

agriculture, not in industry.
adjustment

The

industrial

the

ap¬

might

question

France

money.

^richness of her

countries

rich in

Turkey
chrom,

copper,

and

arsenic

neither

can

people hard

are

is the soil.

change the

soil

One
hor

the European farmer within a few

oil, iron ore,

manganese,

sulphur,

zinc,

lead,
coal.

Changes: in

years.
„

science;

the

of cultivation of soil

methods

are

processes

well

cus¬

•

Italy

Italy are
arts,
letters
and
nations of festivals
as

of;
are

and gayety, of old and high cul¬

ture; their populations
trious
both

are

indus¬

and

.thrifty; nonetheless,
of them are largely agricul-

(!
jf

tural nations. In France, only 12%
out of 40 million of inhabitants

in agricultural life.

usually

to handle and

Little Asia
which have been hardly touched.
surface

the

low

Not

Farmers

on,

Czech-Polish

France and

paratus of any country to changed
conditions has always been feasi¬
ble:

Later

suddenly killed

toms union.

Great values are hidden be¬

soil.

idea

risk of any customs union lays in

equal to the combined size of j
planning, of plant rationalization,
California, Oregon and Washing-'
of temporary subsidies or of re¬
ton as compared with 7.2 million
duction of excess production facil¬
population of Greece on 50,000
ities.
Substantially, such indus¬
square miles,
about the size of
trial adjustment is a matter of
New York State) but on account
of the tremendous

hindrance.

Russia's influence

opinion, the long term

employed in manufacturing and
than 1 % in mining. In Italy,
only 3,000,000 (7.1%) out of ,45
million population are industrial
,workers: 70,000 are (employed in
mining. After World War I, France
less

least, Turkey, protracted .over
decades
a n d|
started to evolve into an in-r
owns what's the most valuable as¬ farmers
cling to extreme con¬ dustrialized
nation, but this evo¬
set
in present Europe: lumber. servatism. Hence,, one Should be lution was
interrupted by World
Turkey possesses 21 million acres j on the alert if the agricultural War II. In
Italy as well as in
B"
of old rjpe forests; an. asset, of'jj level
of
two
candidates for < a France, agriculture still
plays an
highest
value
since . Europe's customs union markedly differs. overwhelming role. Hence, it is
year ago. Such a comparison article do not necessarily at any
woods
were
partially destroyed Twenty years of experience by
serves no useful purpose ex¬
time coincide with those of the
necessary to look at Italy's and
Chronicle. They are presented as by the Germans. Whether the in¬ Czechoslovakia might teach us a France's agriculture before weight
cept to bring on heartburn.
fluence and cash assistance of the lesson.
those of the author onlu.l
ing the chances for a customs
But
if the average trader
United States will prove .strong
union. Here are some figures
—Walter Whyte
,of
Position of Czechoslovakia
stuffed with earning
enough to bridge the deep con¬
fo
comparison. The figured of some
trasts of these two worlds and a
In 1918 Czechoslovakia emerged other countries are added to illus¬
casts, most of which became
3,000 year old mutual hostility out of World War I as an inde¬ trate how
vastly • different the
true, held on to some stocks,, RAvnnlds &
(despite the Balkan non-agres¬ pendent country, formed out of conditions are in
Europe.
: *
he knows what the score is iivjiivvviw
sion pact of 1934) that is open to
segments of the former AustroPotatoes. Yield in quintals
doubt because a customs union is
peif
today.
Hungarian monarchy. Three seg¬
t.

the final

stock

the

analysis it is

market itself

that

gives the answer of what to
expect. And despite the in-;
flationary flames starting all;
over the place, it was market;
action
which pointed to
trends before and point to
them today.
*

This brings it down to what
immediate future,
and here the answer is the

about the

Pacific

Coast Exchanges

Proceeds

Schwabacher & Co
Members

New York Stock Exchange

(Associate)
Ezchange

New York Curb Exchange
>

San Frandsco Stock

Chicago Board of Trade

New York 5,N.Y.

14 Wall Street

Teletype >HY 1-928

COrtlandt 7-4150

;

Private Wires to Principal Qtfices ;

Santa Barbara
Monterey —'Oakland — Sacramento
.San Francisco

—

allocated by
conference in Versailles

were

economy

hectare

(2acres).;,

;

'Czecho
-'

Year

•Italy

;
.

France' Slovakia Holland

123

220

Czechoslovakia:

1931

(a) Bohemia-Moravia-Silesia, the
requires the
highly - industrialized
western
abolition of a part of the sover¬
sector with a highly developed
' i eignty of each party in favor of
agriculture. The progressive far-r
a
third subject which is fo be
to be received by the
mers
in "Bohemia
and
Moravia

1932

from the sale of 25,000
shares will be used for organiza¬

tion expenses

and for other cor¬

porate purposes. The balance of
120,000 is being offered for the
account of selling stockholders.
ABC Vending Corp. was

formed

in January

Customs Unions
customs

created

places

assembly.

of public

largest portion of merchan¬
dise offered
by the companies
consists of those nationally ad¬
The

brands

have

proven

confections

to meet cus¬

customs

union.'

which merge into one
follow a com¬

Countries

for the six months ended June

80, 1047, net income after charges
.and taxes amounted to

customs union must

policy not only in their for¬
eign trade relations, but their
entire foreign policy must neces¬
sarily be coordinated, otherwise
accidents occur like that recently

mon

135

218

116

126

243

106

111

239

1934

118

128

292

1935

101

102

266

141

1936

107

1037

110

quintal equal to 220 lbs),
hectare (2,47 acres); (b) Slo¬
vakia the middle-eastern part of

1938

121

harvest

25-29

(one

per

Italy and France show

wide

difference

in the yield of their
potato crops per hectare, but for¬
agricultural
mountainous
state
tunately, the potato doqs mot play
with a small textile and paper
a big role in
Italy's menu.
Only
industry. Farming in Slovakia was
422,000 ha are planted with pota¬
done on a much lower level than
toes in Italy as compared with
5,the

republic, to

country -recently tried
her trade policy from

one common

exchange

great extent an

angle at the
Iberian
Penninsula,
a
customs
union of any state with the total¬
itarian Franco Spain stands no
chance at all of realization, not
even one of discussion.
Looking from this

the

see

establishment

unions.

Europe,
land

that the

customs

central part of
however; Belgium, Hol¬

.In; the

and

Luxemburg

have

al¬

unfavorable
not

duty tariff of the

Czechoslovakia, hectare.
could
Year

throughout

same

fail

consequences

The progres¬

appear.

Bohemia received
area^— yield and
revenues more than double that of
his poorer brethren in Slovakia
sive farmer in
an

—-on

'equal

The far¬
Bohemian and Moravia

and Podkarpatska Rus.
mers

support

standard

steaditly
ness

much

living;

higher
they could,

1931

;3.8,

1932

1934

Benelux union (a

17.5

29.1

18.0

21.6:.

30.5

17.0

14.6

33:1

14.5

"17:5

29.^

131

163

29.2

2136

31.1

;

•

11J
~

16.32

18J9

16.15

and Podk. Rus

29,8

13.0

A6.56

1939

rose

23.6

16,7;

15.4

1936

1937

13.5

16.0
;

17,1

13.8

-12.8

1933

13.9

15.3

their indebted¬
1938.,.
the mortgages on the

farms in Slovakia

France Slovakia Holland

12.4

reduce

while

{Czecho

Italy

1926/30

1935

could

16J

The wheat statistics

_A,:

shows very
The far¬ dose
yields per (hectare m
ItsAy
Slovakia Whose ^ working and■'<:France.
The•

from year to year.

ready undertaken the first steps mer in
equal to $0.74 per share of com¬ toward a customs union. It is
worth mentioning that , the new methods
mon stock to be outstanding upon
r

114

1933

Czechoslovakia. This
to separate in Bohemia and Moravia.
The
172,000 ha for wheat, 3,926,000 for
her general
Slovak farmer harvested about 15
grapes and 1,282,000 for corn. In
foreign
policy by joining the
quintals per hectare; (c) Podkar-. France
Marshall Plan. She could not,suc¬
however, the potato is one
natska Rus. (now taken by the Of the
main features. 1,404,000 ha
ceed.
Moreover, both parties of
Russians) where the farmers har¬ are planted with
a customs union must agree upon
potatoes;, the
vested
10-11 quintals and even wheat
area reached an
equal taxation, on common postal
average of
less in the mountains. Segments about
5,059,000 ha, oats 3,278,000^
and railroad rates, water and air
on three different economic lev¬
hay 2,908,000 and grapes 1474,000.
rates and social legislation. There
els were merged into one. market
must be a common policy as to
Wheat,
in
quintals per
As the price for wheat was the
the issue of money, probably, they
suffered by

$521,385

^completion of the pffering,

new

quintals

bused

extreme east¬
tomer acceptance most
readily. ern and western ends of southern
The experience has been that such
Europe do not lend themselves to
products are the most profitable.

form

union

the

:as

slogan "America's Best Candy," at must have
stands and by automatic vending
unit.
machines located in theatres .and

Fresno

the peace

•

■

and

company

which

ments of vast difference in nature

two coun¬

1926/30

Co. The
stock, priced to the public at $7.50
per
share,
has
been oversub¬

scribed.

elimination of

Sept. 23 by Reynolds &

vertised

than the mere

duty barriers between

value common stock of the tries.
ABC Vending Corp.
was made

other

not

par

Pacific Coast

Orders Executed on

but

last

Offering of 145,000 shares of $1

of this year to acquire
same as it has been last week ownership and control of vending
businesses
previously conducted
and the week before.
The
by ^various companies. The two
market shows so little that to
major-enterprises to be acquired
buy anything now in the hope by the company conduct vending
that it will show something businesses which havp been under
their present managements for ap¬
proximately 20 years. The prin¬
cipal business of these companies
is the sale of brand-name candies
and other confections under the

Securities

± .^>tv

ABC

And

table

were

poor, man;

outmoded remained

shows

also

;

the

above

^iwmvpawttiveiy

naturally, he -envied high standard. bf ^chostotfkiau

Volume 1661 Number- 4632

the COMMERCIAL & financial
chronicle

as.

<1239)
f

Tops in prewar Europe were Hdl1-1 ^and
land, Belgium and Gern«any7 V,V: -

.Italy

toins

iculture

fEumpean countries this would in-;
ranee to a cusicreasc their ^industrial
produce
the tables above
tivity, provide
her
continental
present ' only a
tgotwfe, and relieve the dollar re¬

union,

£ Corn ~(Maize), yield in quintals
(though
per hectare.
''X/'", 1 certain part
Fiance
•

'Year':.

■

-Italy

1926/30

16.4

1931

13.9

18.1

1082

20.8

12.0

1933;,

18.1

12,9

21.5

reflects in

15.0

...

'15934

1935'

12.9

;

178

;

1936

16.6

20.4
15.6

agriculture)

:
:

20.1

nr:;;ii8.4<Vr

available from the United States
in sufficient quantities to deal
with the urgent need of
human
beings abroad. The first is to bid

Van

Alftyne, Jr.

Warren Bowman, President
quirements of European countries
of1
up the price of wheat to a
point;
now
buying coal from us. Thus ttdrere It will not be
Gum,-'has
an¬
pcofRaMe Bowipan
Britain could decrease
Europe's o feed it to animals. This seems nounced that David Van
Alstyne,
de-Ear requirements by
something ;o me to be impracticable from

way the condihe countries. A

favorable forecast might be read
from the tables presented.

>23.2

17.5

the

tions in both/

15.9

would

in the neighborhood <of
$700,900,- the standpoint of our own econ¬
vUmX mutti|F trade
between '000 to
$800j000 000 a year, furnish omy.
The price of wheat and
France ahd 'Italy was very small.
jcoal to others
jBbfore the' war, not more than ,'increase her at a lower cost, and animal products might rise so
buying power in high that there would be a nat¬
one to four
percent of the French
•export" wentljto. Italy, and hot jotner-countries. I feel that in the ural demand of labor for increased
more than /png to two per cent Paris proposals Britain will come" wages, and we would be off again
forward with; a program
bf! the Frebclwiniport'
along oh another spiral; of increases ol
originated
^n/^aiyjtUori®eless, both of the these Enes> We all hope that she prices in all fields. ;
iwill make every effort to increase
Countries
woiud make a very
The second is to reinstitute
gov¬
6tro«g. 'CustoiM"union. The nfrwite
'!^1?r®duction »
*>
Wjl:**
.'••JSTSL.-i.
; .J '
te'lmwlfhaiunit /would, cgiint more than ■■no* possible, forfn^re is norther .urtav ernment-controls, Even if it were
way
82
considered desirable to do
so, ade¬
•infllioh 5 of cc^sumers in
Europe !by which-she can make so great quate controls could
hardly be
in addition; tq/another "70 million k cohtribdtioh :toflher
recovery
^

'•

>v;.-

1931

France Slovak

Italy

,;X, 1926/90

256

216

v;l932 C ; b: 297

265

^Holland

259

836

260 b 282 X

285

274

271

381

20i:

410

population'X^irfe:Prance's

onies;
"
5 There

1933

262

1934

'270

296

274

-280

1936

307

252

.217

1935
1937

239

267

423

233

871

308

365

264

1938

376
258

comparing

sugar
of the

are

yields
Of
comparison

weight of the beets har¬

vested per hectare does not tell the

:4&/hardly

rith

'■■■■'I,:,
any basic dif¬

tween France and
Italy.

;

Cdfftilusion
X

up^the

sum

outlook for a
State$2)f Europe is dark,

United

at the time hemg.
Only a partial
realization

'of^the Marshall plan
story More important is the "sugar is
probable, accustoms union be¬
content; of the beets harvested. tween
Erancecapd Italy in addi.

The sugar content of the French
,.tion to the customs union of Bel-

beets^has generally-been Father
"

lew. Was about 13.3% sugar con¬
tent on the average In the last
5- years before the war. It
was

glum,

Holland

which

both of

the

and

and; established

that of Europe:

col¬

ficulties tor aspustoms union be¬

345

1—

the

^plantations,

J.!.'

Increase

coal

' X•

■

,XX

production

the. Ruhr is of equal importance.
It is encouragin g that we have
agreed with Britain on plans to
expand the Ruhr coal production,
now only aibotit
50% of prewar.

Although I believe
sults

can

that

obtained

some

re¬

expansion of coal mining in
the Ruhr and in Britain will re¬
additional

maximum

time

results.

The
ast

week

who

crop year.

third

obtain

will

fore be necessary

for

beyond that time

there¬

was

member

dent's

way

committee

guished Citizens
construction:

people

that

the

of animal products,-

consideration.

Wheat Needs '•

;.r.

111

public

Why

Western

discussions.

supply food

European
they lack

Europe

coun¬

food?
of

one

the

large

part

its

import

food

itiative

upon those who hope to
participate V inany program of

American assistance that may be

developed.
lished

as a

Third, he has estab¬
prerequisite to Ameri¬

assistance

can

countries make

themselves

and

one

an¬

It is too

present low production

she

com¬

but

tt is due.on

of coal in

should recognize

large

measure to

Britain's
were

other; restore

war.

coal

a situation to discuss all
of the factors that have led to the

European
■that
help

help

much

plicated

program to
to

did before the

England

that

all-^t war effort. Men
taken frjely from the mines

their productivity.
The Marshall program is predi¬ if or military service when Britain
cated upon European self respect: ;was, concenti^ting on putting in
It presupposes that its benefici¬ the field the^maximum military
aries shall not-consider themselves forces and producing the maxi£&

objects of charity but

worthy

mum

direc¬

Gum, Inc. of Phil¬

adelphia.

to consumhXthem

level.
ence

If,
of

turn to

mal

reasonable

in the

lowered

food

other'

we are content

however,

wheat

ade¬

and

corn

pres¬

crop

of ani¬

source

and

pour millions
of
bushels of it down the gullets of
animals and poultry, there will

not be

enough left

over

to supply

Western Europe with its minimum
needs.

Eastern

industriitl production needed.

was

sharply diminished.

In order

to offset

this loss, every effort was
made this summer to increase the

production of potatoes and
mer

curred.

the

sum¬

Again calamities

crops.

oc¬

France, for example

drought

conditions

were,

told, the worst that had been
experienced in over 40 years. As
a

result, the food deficiency

Western
was

than

greater

thought possible.

Here
had

Europe
in

ganger pt Famine Conditions

Famine conditions breed the
po¬
litical Chaos on which dictator¬

ships have always thrived. We all

better

luck.

This

American

have

year

people

whether

our

hungry

people

whether too

must

Wheat

the United

the

States—An

accounting report of the National

Economy,

1946—Frahzy Eakin—
Accounting, Inc., De¬
catur, 111.—paper—50c.
:
X

Economic

much

Europe
is

to
or

con¬

by animals and poultry in
Here let us remem¬
ber that wheat is about seven to
this country.
ten

times

taining

life

beings than
obtained

are

from

have

been

effective
eaten

sus¬

human

the food products'

feeding

Brookings Bulletin—also contains
significant books

summaries I of
on

Presidential

and the ITO

power

charter—The

Brookings Institu¬
tion, Washington, D. 'C.—paper.
income

Theodore

and

Employment

^—

Morgen—Prentice-Hall,

Inc., 70 Fifth Avenue, New York
11, N. Y.—cloth—$4.35.
Metropolitan

decide

sumed

this country

Economic Activities

People

Forecasts Which Went Wrong-—

know that the forces Of Com¬
discuss three aspects
During last winter and munism
The immediate and urgent needs crops.
of'this plan; First, it is not a plan
plan to seize power at the
spring, -however, this area suffered
but it is an approach to the solu¬ Of Western Europe are coal and
opportune moment—the
moment,
the most unfavorable weather ex¬
wheat.
tion
of
an
that is, of chaos—and retain
Without coal the wheels
enormously compli¬
power
perienced perhaps in a century,
of our civilization
cated problem.
stop.
Britain
permanently with the establish¬
Second, he has
and the quantity of grain
can make them turn faster
produced ment of the
if she
placed the responsibility, for in¬
police state.
The
mine

tor of Bowman

from

European countries and
The Marshall Plan
.^.X. discuss
hlsovfromj, the Western Hemi¬
publtcjy
-Secretary Marshall has anwered a in should do in what I feel Brftcontributing to its sphere. Yet Western Europe nor¬
this questioin
in the statement own
recovery^tnd the reconstruc¬ mally produced large quantities of
jkiiown as "the Marshall Flan." I tion of
Europe';
wheat, potatoes and other food
should like to

would

Company, Inc., New York

'dis¬

There will be

products, if

It has long had to

areas.

r^arks

on what we
might do make*it-easier for me to

p,.

Noel &

City, has been appointed

lack of wheat here

for bread.

quate supply of meat,
animal

world's most highly industrialized

international

His

Western

the

tries.

(Continued from page 9)
their feet, and cerity to

peace of the world?

Jr., Senior Partner of Van AlstynC,

cussing it today in order that you
may weigh the alternatives and

There is

diminishing

quantities.

keep the

their

believe this suggestion deserves
earnest

suc¬

impossible unless

re¬

American

reduce

get

distin¬

ship consider

I j not reveal sharp contrasts between "when the two^Custom unions will
And now let me turn to wheat.
p.' the agricultural level in France merge into ope gigantic market. The: program of self-help en¬
visaged by Secretary Marshall is

Presi¬

European

voluntarily

the

the
Luxemburg substantial
interests
of
'toe
quantities of coal to
t$ie making. Should
United States that are at stake.
Europe for the next year, and
unions

customs

ceed in
developing favorable con¬
higher in Italy mid much higher in
ditions in the respective
countries,
[-I Czechoslovakia. /, '.5. .■ v-XXX
The tables presented above do the day should not be too far

X ethers

suggested

by Mr. Chester Davis,

promptly,, consumption

the

quire

to time to be effective

during "this

Study

Life,

Business

The

—

Growth

A
—

Marquis James—'The Viking Press,
18 East 48th
N.

Street, New York 17,

Y.—cloth—$5.00;;

Union-Management

Co-opera¬

tion—Experience in the Clothing
Industry

—

Brookings

Kurt

Braun

Institution,

The

—

Washing¬

animals; ton, D. C.—cloth—$3.00.

consuming

animal products than ever before
—for instance 25% more

meat5per

Russian-American
Mikhail V.

Condoide

Trad

e—

Citizens

—-

Britain exported before the War produced the greatest wheat
Conference on International Eco¬
crop capita than prewar-^-but since we
temporarily in 'difficulties
of
all times—nearly
1,5
billion are well supplied with
wilTIargely aid themselves if ^about 40 million tons of coal,
hay, ,soy nomic Union, 370 Lexington Ave¬
aid is given to them to aid them¬ largely to such-'countries as France bushels. This was due not only to bean and cottonseed meal and a
nue, New York 17, N. Y.—paper.
and Italy. It was natural that she favorable weather conditions
but still substantial corn
selves. "
•.
/
:•'! c.,
«,
crop, I be¬
should shrink* her
Who Gets the Railroad Dollar?
exports when also to the policies of the -Depart¬ lieve that if wheat is not abnor¬
;
Sixteen European nations are
the Nazis occupied these coun¬ ment of Agriculture tn
Eastern
stimulating mally diverted to feed animals in —Dr. Jules Backman
HOW at work in Paris developing
tries. Her problem now is to in¬ wheat
acreage
and
this country, there will Still be
production
their program of mutual aid. Pres¬
Railroads Presidents Conference,
crease
production to the iprewar Unfortunately, we have a short adequate supplies of animal prod¬
ident Truman has appointed an
Committee on Public -Relations,
corn crop.
level. At the*5>resent
It is substantially be¬ ucts at more reasonable
time, how¬
American committee made up of
prices tor 143
Liberty Street, New York 6,
low last year and less than in
any our own people provided we are
19 distinguished American private ever, British Joal is hot only in¬
N. Y.—paper—no charge.
sufficient for- British needs .totft year during the past ten years
careful in bur
consumption. In
Citfeensj which is working with
there is none -for export. - We are We not only have no
surplus of other words, I believe there is
me to /develop recommendations
Why Kill the Goose?—Sherman
corn to ship abroad but
it is shor; enough to go around, with all of
oh '"die : aid we cam! safely and witnesses, therefore, to the aston¬
Rogers—The Foundation for Eco¬
to teed our large livestock
ishing spectacle of American c<M
popu¬ the other foods available, if each
Wisely give. Theory mthout facts
nomic Education, Inc., Irvingtonliterally being carried to Newcas¬ lation.
of us exercises a degree of re¬
^dangerous and eons^uently the
tle. Britain
on-Hudson, New York—paper 750
certainly cannot pull
straint and if all will cooperate.
work being done by oufv commit¬
Where We Stand
per ear in the world boat unless
<
tee is. of vital importance.
The American people have grave per copy.
Once
she produces sufficient coal ficst
us
see
Where we Stand
Your Career in Banking—Dor¬
We are in possession of all the
decisions to make at this time.
Without adequate exports of food
of all for hermwn
needs, while if
facts, there will be a basis for de¬
Secretary Marshall and others of cas Campbell—E. P. Button & Co.,
to Europe no
she is to become an active
recovery plan can the
partner
Administration have been giv¬ Inc.,
veloping a workable program.
300 Fourth Avenue, New
in the European
succeed.
Hungry and hopeless ing Information on the
group seeking
serious York
p'ttAd an illustration of self help recovery she must again Ship coal men cannot
10, N. Y—cloth—$3.
Work
efficiently developments in
/ under the Marshall program there
Europe.
Con¬
abroad.
;
chaos
men

who

—

.«

Is ceal. My good friend, Mr. Bevin,
Wfeofn I have known well both

during ahd since the

war, has been

making public suggestions as to
bourses of action which the United

; States might pursue in'aiding Eu¬
ropean reconstruction. One of Mr.

engaf ing ^qualities is his
complete frankness.
Whether or
Aot his suggestions are sound, I

Britain

prewar

high ocean freight rates
her about -$20 a ton.

costs

from- 30

..X'

should

Anarchy and

may well -en¬

and the kind of world
to
Which we aspire will be
impossi¬
ble to attain. Our welfare is in¬
sue

separably

bound

with

the

results would
be effected. The area, in turn for a time
at least,
first is that she would save dollars
depends upon adequate shipments
spent here -for coal which because

second is

tot

production, two important welfare of Western Europe. That

;$hat he brings frankness? and sin-

feel

•

increase tier

coal production from the
present
rate of less than 200 million
tons
this year to 245 million
tons, Xher

understand

should

ot American food,

now

Hie
export'

that/if she could
to" 40 million 1 tons

■v'

What

There

shall

are

lieve, in

about

it?

only three ways, I be¬

which wheat

can be made

gressional leaders will be return¬

ing shortly with their first-hand
observations.
that

the

meet

this

have

With

standing

have

American

confidence

W. L. Renick, Jr., With
J. Earth & Company
(Special to The Financial

people

will

Chronicle)

SAN

they

always

FRANCISCO, CALIF.—W.
Leonard Renick, Jr., has been

characteristic

under¬

added

crisis

-and determination.

■

toe staff

of J. Barth &

Cov, 482 California Street, mem¬

A democracy such as ours must
have regard not cnly for a high

bers

standard of living but silso tor

the past he "was with William R.

high standard cif life.

^;4 'r w '•

the

Franbisco

New

Stock

| Staats Cor'

York

and

San

Exttoanges.

THE

(1240)

capitalism is ho longer

By JOHN

sufficient,"

(Continued from page 5)

he. stated. "This fact, however, is
so
well known that there is no

Salesman's Corner

Securities

it.

necessity to enlarge upon

There is a cure

for dull business.

another 30

sales.
During inactive periods in the securities
pessimism becomes exceedingly depressing tp

that generate

nancial groups.
groups that have

the

business the cycle of
all who are exposed
•to it.
Salesmen are naturally affected by their surroundings and
since they are endowed with a higher degree of creative imagination

It is a shame

that often an entire

sales organization becomes so

Have

confidential talk with him and

(Continued

„

•

in this proc¬

"In conclusion, I believe that
capitalism, if it is to survive, must
which

are

its vitality."

The very strong

cooperative

preneurs have a clear understand¬
ing oLthe necessity of a modified
planning.
There will be no in¬
crease in the working population
in Sweden during the coming 15
to 20 years.
State control of the
location of new firms has been

Rao Predicts Capitalist Doom
K.

Rao,

generally
under

accepted

conditions

States

Sweden.
our

fairly

that

soon

come

Nations,

spoke

of cen¬

in the

that

while

exchange

And

prestige,

Dr.

Bryn

Hovde, President

the New School, and former

delegate
the

same

UNESCO,

day

who

old

returned

these

the movement

that man failed because

words stubbornly

re¬

v'/v-'

r
:

"Only
will

simple-minded ass
impressed by offers of
a

friendship to Germany "I

no¬
deny that ChurchHl
was one of the most dangerous
war-mongers
of all times."—
"Mein Kampf" unabridged edi¬

body

can

tion, p. 699.
And

from

Mr.

"the

Vishinsky

that

reactionaries are
these efforts of theirs

American

not alone in

houses

cities.

and

rebuilding

our

Government financing and

detailed regional plans

will fur-

the family utterance
Churchills by themselves
.

;

their

subjects

own

would

Russians'
objective, judging by their
formity with the Wallace
by
the
current reports

main

jubilation

over

Moscow

the

seem

their

con¬

line,
front

supposed "panic" over the
Vishinsky. "revelations", and [by

our

apparent unsuitability for his
people's home consumption of Mav
Visbinsky's voluminous documen¬
the

tation,

•

U. S. Flushing Meadow we learn

from

gives

their common

1942.

had

The V

Sauvy Says It's Capitalism

AND

affairs

Britain first of all."

peated, T need a war.' "—Hitler
at Berlin Sportspalast, Jan. .30,;

ameliorate
international

the^work of .the
United stations organization is
not an accident tefttaarresulteef
an attitude toward Hfee
organi¬
zation on the part of a number
of members, U. S. A. and Great
with regard to

stood
the man I have often mentioned,
Churchill. All attempts to draw

exchange relationships.
*

with the grievous memory

(?)

all occasions

the head of

bounds and so

organization'^
it had place

try should be liquidated to keep
international ; relief
extensions
breakdown

(?) League of Nations. .
unsatisfactory state of

the British
fought against Europe and at
"On

able assets invested in this coun¬

the

same

shinsky, and Wallace..

within

the

dermining

capitalists" has been the
excoriation of Winston
Churchill by Messrs; Hitler, Vi¬

Bernard

individual
achiev¬
selfish narrowly

ing their own
conceived interests leads to un-r

frenzied

closer to

Company,

the organ-,

use

(UN)

states for the purpose of

by "the

authority,

"The policy

ization

Ogre

Churchill
only

Second

Winkler, international

and

historic

country's

his

reflecting

feud with the League:

charges of war-mongering and of
domination of the American press

main¬
tained that the generally unreal¬
ized amount of foreigners' valu¬
Winkler

and justice, is needed." ?
now
from Mr. Vishinsky,.

reason

Re-perusal of the Hitler oratory
the impression of greater
plausibility and general effective¬
ness, in its objectives toward un¬
dermining the morale and divid¬
ing
the
citizenry of
"enemy'*
countries, (and his spelling was
far better).
Domestic persuasion*

Max

Dr.

sidedly toward the vital functions:
Europe and the world as ct
whole.
A new system, based on

appeasement.

The

event.

out of

Hitler

Bank
is
of
the
utmost
importance,
France
should
recover
in any
*

;
.

contributed only one*

tions system

and the Wallacethe mon¬
prompted

the

his country from the World

Alii-

Berlin, Herr Hitler said;
The old Geneva League of Na~
in

ance

given to the

North American Newspaper

(continually) accuse
interests of having

stated

loan

additional

1936 in an .interview

own

(again this week)

Commission,

common

the totalitarian
Germans and Russians. On Aug. 6*

of the
three-month trip of investigation,
vs. Communism
would
be of little interest to anybody.
Alfred Sauvy. professor at the paid fulsome praise to the Amer¬
shrink rapidly in coming years.
But they are an indicator of that
Institute
of
Political
Science, ican system, adding that its con¬
"This demand will be fully satis-,
black work which is being carried
Paris, France, held. the fate of tinuance must be premised on the
out
in
certain
British circles
lied by plans for the rebuilding of
capitalism will depend on the maintenance of civil as well as
labor

another

being determined ei¬ of

are

ites

Reparations

;
:

force us into war."

every

ied

American soldiers.
We cannot
national oil rivalries to

allow

capitalism.

scarce

supply.
Because of this
population development, the de¬
mand
for
new
dwellings will

drive the last nail in the coffin of

current acute difficulties."

necessary

very

and

•

the Near

pheres. "Surely, at least, there is would mark the final gasp of
no possibility that the new India
capitalism, but they .assume that
will be built up on free enterprise the capitalists; themselves are too
techniques." A third World War, dumb to realize it And all in the
he prophesied, would be sure'to face of the fact that the Russians

furnishes opportunity for freer in¬
ternational trade, that no serious
United

their

the world turns more peaceful and

occurs

Britpurchasing oil in
East with the lives of

professor

depression

tive is neither saving the

good. The totalitarian and
fellow-travelers on the one
length on the conclusion that, cap¬
italism
is doomed in
both the hand realize and recurrently ex¬
Eastern
and
Western
Hemis¬ press the fact that another war
United

the

get

can

-I

of these recurrent capitalist war¬
Economics at the University of mongering charges is that it as¬
Delhi and member of the Food sumes complete ignorance by the
and Agriculture Organization of monied interest concerning their
V.

tral

lasting

believe that we

ish Empire nor

Capitalist Stupidity Assumed
Incidentally one seemingly ab¬
surd assumption connected with

•

cooperation once Russia understands that our primary objec¬

ther
by military men or Wall
Street men. The policies of reac¬
modifications tionary capitalists are leading into
necessary to maintain a third world war."

I'•

planning—to a certain extent
movement with a majority of so¬ —by
the entrepreneur
affords
cialist members—believes decid¬ hope
of
favorable compromise
edly in a free-enterprise system solutions from time to time. In a
and likes to preserve it.
Also, the socially fairly homogenous so¬
trade unions realize to a consider¬ ciety such as the Swedish, there
able extent the importance of a are
many
well-tried ways of
large sector of free enterprises, keeping
an
effective, although
with which they, can deal without modified capitalist system work¬
state
interference.
The
trade ing within the framework of gov¬
siions in Sweden don't like to be ernment control and planning. But
the necessary conditions to this end
government-controlled.
are as we have pointed out, that
; "On the other hand, the entre¬
ess.

sia. ;

profound

undergo

tell him you

classes and the acceptance

policies

nish the framework under which
The French Outlook
iligh taxation, too much central
private and cooperative construc¬
control and planning will eventuDuring
the
panel
discussion
tions firms are to work.
ally make it extremely difficult
conducted under the chairmanship
"These
are
examples
of the
lor a capitalist system to work
of A. Wilfred May, member of the
effectively.
And if we start on Swedish way of meeting the prob¬
New
School
faculty,
Jacques
According to my view, the
the road of decay, the- chance of lem.
member of the French
conscious acceptance of the free- Rueff,
capitalism surviving will grow
delegation to the United Nations,
progressively.: less.
There are, enterprise system—although in and Chairman of the Inter-Allied
however,
in Sweden important modified form—by the working
checks and balances

not

ferent way. 1

States who want war with Rus¬

characteristic

Capitalism?

from page

or.

seems

market."

What Tuluie for

doubtful that, in

influenced by those
outside the United

inside

policy

Russian

our

guided

long run, one single technique our policy.
We cannot defend
entirely satisfy two entirely corporate interests abroad in the
different regimes. If the hypothe¬ name of 'civil liberty'."
sis of a brutal rupture is excluded,
And in New Jersey last Satur¬
one
must expect a slow,
very
day that "I hope we can work out
slow, evolution of both commu¬
an end of this (cold war)
before
nism and capitalism
towards a
it becomes a hot war.
I distrust
new
regime, but through a dif¬
our
administration
whose
key

out and show the other hien

private "bull

world.

demnation

"It seems very

;

country in" the
The AntirLeague Attitude
The mountain of con¬
Berating the respectively ex-» \
Soviet, Rus.sia does
world organizations still
hide the moral weakness of isting
in

danger

competitor,

main

let

not

the

that business can be done.
Compensate him for good results with an extra bonus. Once he starts
to make sales and bring in some substantial business the natural re¬
sult is that the entire organization begins to say, "Look at those com¬
mission checks, I guess I'd better get out and do it too." Once a win¬
ding spirit is revived you are on the way to better times and your
own

Mr. Wallace Goes Along

can

horse.

failure of its
communism.

the
advanced

our

are

We
must not let British balanoe-ofpower manipulations determine
whether and when the United
States gets into war.
We must

even

are

Isles

men,

air base against Europe....

rapid stage of develop¬ race which is criminal in a world
that can't stand another war. . ; .
ment, that we find the greatest
I ; say until you lick reactionary
proportion of persons born half a
capitalism; and the scarcity and
century ago.' '■ war
talk
it stands for—peace,
"The fate of capitalism rests, on
jobs,
and
freedom will be in
one
hand, upon the success or

are

lead

hateful after, all to

V:military

the

"To

British

those groups
of society that skillfully utilize
the hardships of wartime tor the
purposes of enrichment."

defense

mutual

American

plans said:

their most

that the salesmen
of the rut. Overcmphasis on boogy-boos has always been the bane of this business,
^he public sells the salesman a bill of goods when times are like they
today. But Hetty Green, Baron Rothchild and the other famous
long pull speculators of history made their fortunes by capitalizing
Upon their ability to resist the forces of bearishness around them,
These things can help: Stop trying to figure out every phase of
what is going to happen to the world in the next six months—or for a
few years for that matter.
You know enough about these things
now—too much in fact—so stop reading about it for a while. If you
have to do so be a headline reader and just keep posted on the high¬
lights. Don't listen to anymore bellyaching around the office. Let
those who want to warm the seat of their pants on the office chair
do so, but go out and see people.
It is a, good, idea for the sales
.manager to get the office emptied out early in the morning. Those
Who have have a reason for staying at their desk naturally should
jptay there, but if you have some loafers around let them do it some¬
where else (or get rid of them if they can't be reasonable about this
thing). Find someone in your organization that is willing to become
3

glo

more" important
than the material ones.
Through propaganda weapon of reactionary
a
strange contrast, it-is at this capitalism. People the world over
time when our techniques are at are; paying for it in an armament

aging

Mr. Wallace speaking of An¬

ago,

Similarly we in Madison Square
Garden.9a [fortnight ago heard
placement.
from
Mr.
Wallace
that
"the
■The moral consequences of the
war-with-Russia
hysteria
is
a

steeped in statistical gloom and pessimistic lethargy
themselves do not know how to pull themselves out

want him to go

cost

is not so

war

his

Madison

people to insure their re¬

young

countries

some

red flag before a
famous speech at
Square Garden [ which
him his Cabinet job a year

bull. ; In

of profit figures from the
CIOV "Economic Review"
that
"in

also, Mr.

the waving of a

great

concluded by citing

And he

part of adult produc¬
tion will continue to be allotted to
old people.
At the same time, to
remedy to the aging of the popu¬
lation, the adult generations must
maintain a sufficient number of

everything, including the
is what has happened to
many good producers during the past year. This same thing has hap¬
pened periodically- before in the investment business. If you wish to
•/,<sfcart -doing .business, again. the first [thing to, do is regain perspective.
A new- mari Will home into the business occasionally and start out
tp sell something such as. an investment trust. He has one simple
&tory to tell and he goes out and tells it. He doesn't steep himself in
information regarding the foreign situation, the destructive forces at
■work in the economy and politically, the latest on various strikes in
progress and pending, nor the, conflicting theories of market letter
[writers as to whether "the Dow-Jones Averages are going down 10
points or up 10 points. He just goes out with his story, he believes he
teas a good product and he does business. When he meets an objection
tee either covers it intelligently or doesn't overemphasize its im¬
portance by agreeing with his prospect that the world will blow up
aijyway in a few years so why buy securities or anything else for
{hat matter. He has a fresh* clear view, uncontaminated by pessimism,

War

array

siderable

they can become unsold upon just about
Kftuasihess in which they are engaged.. This

In Mr. Wallace's eyes

These are the
received from

World

second

military

Churchill and the U. K. appear as

profits, as it was the case in the
first World War."

A con¬

40 years.

torious

leading branches of American
industrial and banking and fi¬

ditures increase,

repeating Churchill's no- ;
crusade against
Russia or in any other form."

form of

capitalist

American

monopolies, by representatives
of the largest enterprises and

countries, public expen¬
in the long run,

"In all

BUTTON

tatives

But you must not follow the at a higher rate than national in¬
crowd. The securities business is different than many other lines of come; therefore, capitalism must
be geared to high taxation with¬
endeavor. Security selling is essentially a creative activity. You must
sell ideas. You do not sell pretty pieces of paper. Most intangibles are out however acting as a brake to
-c
eold by first presenting an idea. When you work iri the realm of ideas production.
it is vital to your success that the power of suggestion which is all
; "This phenomenon is enhanced
around us does not turn [itself inward and create negative thinking by the. aging of the population
'{resulting in unsuccessful accomplishment) instead of positive ideas which will continue for, at least,
'

fluidity
classical

the

trial concentration,
which is necessary

Thursday, September 25, 1947

CHRONICLE

COMMERCIAL & FINANCIAL

American corporate

statistics.. Perhaps, of course, the

"lawyer" 10 years agoarguing a better case in the

German
was

political sphere.
In. any event,,
comparative appraisal of the
two authoritarian outpourings! is,- /
far
more
than the
oratorical)
display factors, important jnn
indicating
the real status of ■
UN as well as of world peace..
For the

parliamentary squabbling;

proceedings,,

in the Organization's
rules

over

the

use

toms

those even governing

the

rather

veto,

than

are

symp¬

causes.

The

success

failure

its

main

competitor, communism.
"In accordance with the indus7

against the

material liberties, including free¬
dom of the press.

cause

of peace and

organizing a
whether in the

which is directed to
nf»w

war

nrv

matter

causes,
measuring
status of peace and

the

present,

the possibility
maintenance, are contained
in the underlying attitudes of the
cohtfoiling
Great Powers ~- the
Soviet and the United States.
♦

of its

JVolume 166

Number 4632

THE

COMMERCIAL

FINANCIAL

CHRONICLE

(1241)

411

■

The

following statistical tabulations

shown in first column

are

stills—daily

Sept. 28

1,646,700

Sept. 13
Sept. 13

1,564,400

1,633,700

5,217,300
5,318,000

5,173,050
5,246,000

1,593,200

16,505,000

16,205,000

2,156,000

1,917,000

4,773,250

5,159,150
5,202,000
16,056,000

ENGINEERING

CONSTRUCTION,

RECORD:

6,337,000

5,601,000

8,708,000

8,831,000

8,209,000

All

82,509,000
21,832,000
.57,619,000

83,336,000

84,983,000
,18,808,000

87,313,000
20,613,000

51,685,000
54,000,000

57,340,000

Residential

56,238,000

Nonresidential

56,168,000

21,102,000

COAL OUTPUT

(U.

56,763,000

56,168,000

922,360

809,050

682,209

634,314

$90,627,000

33.550,000
11,180,000

45,897,000
44,730,000

$146,229,000
82,511,000

„

12,600,000

♦10,740,000

1,169,000

946,C00

119,300

Farm

129,100

Sept. 13

AND

INDUSTRIAL)—DUN

Electrolytic

gross

(E.

225

293

4,977,141

5,053,300

4,952,876

-75

Govt.

3.19141c

2.70711c

$36.93

$37.08

$37.35

$37.75

$37.92

LIFE

$28.13

$37.75

$19.17

21.225c

21.325c

21.350c

21.175C

CO.OOOc

80.000c

80.000C

Sept.' 17

52.000c

15.000c

15.000C

15.000c

8.250c

Sept. 17

14.800c

10.500c

8.250c

122.14

122.24

122.52

116.02

117.00

120.43

120.84

121.88

120.84

MOODY'S BOND YIELD DAILY
AVERAGES:
U. S. Govt. Bonds—
/-^Average corporate

—.
—

Industrials Group—

110.88

111.07

112.37

117.40

118.40

119.00

119.61

120.43

119.61

1.49

1.51

1.65

2.80
2.56

'2.61

2.64

2.87
2.63

2.88,

2.86

3.27

3.24

3.12

3.11
2,78

3.04

2.80

2.73

•'

3.17

2.70

2.67

428.2

438.1

234.0

222.0

222.2
266.1

303.0

302.0

,292.0

sept. 20

;

256.9

260.5

190.6

sept. 20
—Sept. 20

materials

2.82

Y70.2

♦190.6

)

190.4

159.1

225.8

?WliMftM,m»terial8
t

'£

z_—z

Chemicals and-vallied products
fHbasefttHSRhing: goods__
MttcoHaaeous commodities

,-';j J

•Revised figure.

II...

tNoi market—previous
quotation 21.225c.

83,325,291
4,595;516J

89,618,230

2,845,483

7 78,729,775'

59,981,56»#(»2,385,610^

11,562,292
5,438,630

21,454,573
5,296,643

16,632,422iV

2.15

2.37

-1.40%'

316,093,000
71,622,000

304,994,000
65,511,000
255,962,000

3,650,353

38,402,391
equip.)—

29,478,529

projects.—

1,355,617

—

.—

821,301*^

3,134,760%

appropriations:
stock

common

42,052,744
——-

defense
taxes

preferred

—

stock

——

REAL

ESTATE

AREAS

FINANCING

and

124.5

Insurance

Loan

S.—HOME

BOARD—Month

Savings

5,591,614|

NON-FARM

LOAN

July:

BANK

Associations-—

z__———z——

120.7

Individuals

Miscellaneous

127.1

212.6

115.4

♦213.5

♦207.5

170.5

♦149.6

149.7

»•

180,203
186,174

165^092
182,090

151,407

100

472,229

470,581

593,213

142.6

141.6

139.7

137.0

157.4

154.9

135,202,000

——

lending

STATES

EXPORTS

UNRRA

Lend

■■

46,353,000
164,808,000
128,105,000

965,733,000

July

;

__z__

......

—

STATUTORY
—

39,800,000

121.7

181.4

151.8

172.3

128.1

Total

139.7

i.<1

177.8

•

13 1

139.7,
111.0

150.4

146.7

113.6

179.4

Sept. 13
.Sept. 13
.Sept. 13

120.4

117.5

—^Sept. 13
—Sept. 13
Sept, j.3

—Sept. 13

gross

public debt

the Treasury

___Z—

180.1

178.9
117.2

131.9

132.0

114.3

117.2

115.5

168.5

166.8

138.4

147.2

111.9

-147.8

115.9

259,447,739,778
/

gross

79,971,276

378,634,367?
■

•

-1

public

debt

and

*
.

guaranteed

Deduct—Other

150.2

152.5

150.1:

150.9

148.9

138.1

137.9

...

P 146.5

-115.1!

obligations

%
'/

$260,176,196,535 $259,527,711,054 $267,924,475,268

obligations not
debt limitatioh. >.z—

public
subject to
875,289,809..

. ..
•
V
•' '■
balance face amount of obli_

879,6)1,568^

954,894,4521

A
■"

•

|f
ii?

outstanding

debt

|1
150.4.

•

267,545,840,9011

79.064,542

••

101.9

171.9

-1 i

97.9

117.9

<'| :■% '•

_________

Total

133.3

118.5

260,097,131,993
#v"

95.2

132.it*

-f

Guaranteed obligations not o^ned

140.3

—.

—

'i
outstanding at any one" time—— $275,000,000,000 $275,000,000,000
$275,000,000,000'
Outstanding—
**
S
v"

152.7

182.4

114.4

300,000

Li'<

174.1
183.2

——--.«

31:/

187.3

114.4

:—.—-—:_j

DEBT

Aug.

that; mayzbe. i.

180.9
185.2

„_Z——'

466,000,000

——■

——

amount

25;3O0OOO
1,200,000

449,960,000

Lease

,140.4

— --

'1,124,500,000 1,201,600,060

Program—tz.

13
-13

IMPORTS

Administration

GOVT;

.S.

AND

CENSUS—Month of

Commercial

■

—

institutions

-l-Ii—--ll-%t^U-^%il5i;000,000 \I;241,V00,00(h

Exports-

101

478,283

50,564,000
166,541,000

994,787,000

172,47«

254,765,000

—

—BUREAU

196,986
139,886

103

—Sept. 13

_I_I_II__IH_

37,824,949^*'
22,156,610^;

Ra(fo of income to fixed - charges'--;———-

AH commodities
other than farm
products^
AH commodities'
other tfcan farm
peoducts. and foods

75,728.897
13,889i333-

20,548,355

125.1

""sept

mDiiDW :;-|>r(Miuctsf-!_--,

60,201,058
r„23,124,233

—

structures &

(way

$259,300,906,726 $258,648,099,486
.

$15,699,093,274
♦Revised,

$266,969,580.8^

111,0
"V

304,991,1104

—

income

Dividend

•

Raw materials

203,955,722

209, 333,920

15,186,95®'*'
28,262,205^'

income

128.2

leSt

Bemi*manufactured"artrcleri

89.6%

103, 724,970

181,631,821

charges—

130.8

149.6

Dpeeiftf group#ir>

ITEMS

80.3%

150,779,406

46,360,195
29,428,489
1,356; 675
25,230,787

135.5

647,OOOlo60W>

18,261,45#**
3;074,50»"

Net

fixed- charges.

132.6

SenFvv
aept, 13

Zj—

issues-

income^-^

fixed

135.5

—Sept.
Sept.
Sept.
Sept.

—

676, 1856,879

723,000,000**
99,000,000^.

68184,122,479 69365, ,088,855 74350,238,520*
140958,397671^

collateral—

from

for

charges

LIMITATION

III"™"

'.I'-'

(Interstate Commerce

134.0

—

i
,

655,900,273

l_z__——:

available

Total'- face

50,215>9643,855,769

Imports

67 ,801,711
402, 198 852

78.3%

Govt.

INCOME

135.7

-Sept. 19

;

other

income

178-.6

Sept. 13

Fttei and Mkhting materials.—
MMWrnrt. metal products-

57,595,948^

143.5

159.2

♦226.6

SELECTED

Income, after

206.4

159.1

86,772,747

154.2

163.6
217.0

INMIMSALK PRICES—U. 8. DEPT.
LABOR—1926=100:
f Ali i commodities
-

i i i

£8,968,000%

212.4

♦186.4

167.3

226.6

.Sept. 13
Sept. 13

564, ,139,538

76,590,962
398,884,779

12-31-24=100
on

CLASS I RYS.

Income

188.2

.Sept, 13

•-

UNITED

y litm? products—

550,116,782

shares-i—-r—-v.

Sept. 20

Dm:PAINT! AND DRUG REPORTER PRICE
KDKK^-X92*36 AVERAGE=l0O___

free credit balance-

listed

index,

price

Total

348.8

246.7

■215.5

y tyastiM iprtfducts v -z._zzz__Z

Miscellaneous deductions

211.8

111 /

ASSOCIATION:
—l

•

1—

in U.

Net railway operating income—-—.
Other income zz———-—Z.--Z——

178.8

176.4

168.6

sept 20

All groups combined—_______

leather - products/—

debit balances-

banks

Bank and Trust companies
Mutual Savings banks

.-—III Sept.

—

£45,715,000

('•'

customers—,
in

Sept. 20

■

„

—

£3,306,000

Commission)—Month of June:

2.67

224.2

216.3

—Sept. 20
-Sept 20

Percentage of activity—.
/y Unfiled orders (tons) at—

;

value

borrowings

335.3

323.3

284.9

—-I——III~™ —III„ Sep L

—.

•220^
♦212#.

GREAT BRITAIN—

net

and

borrowings

2/76

256.4

.Sept. 20
.Sept. 20

——^—z—^

PAPERBOARD

hand

Depreciation

Sept. 20

♦204

1,104,368,000 1,210,569,000 1,272,736,000'^
325,896,000
312,863,000
323,504,00#*.
186,066,000
328,250,000
200,518,000%

3.01

421.7

—

>193

carrying margin accounts—

Member

3.14
-

2.83

Sept., 20

———

170

254

customers'

Member

2.82

2.81

261.9

":'t] Hides-and,

Stock

—

EXCHANGE—

of customers'

Federal

Orders received (tons)—z—.
Production (tons).—

—

31:

extended

■Amortization

-—

110.52

COMMODV

—_—z

NATIONAL

2.61

2.69

Sept. 23

;

Vfcrm machinery
j

2.85
•

2.71

—

—:

Fertilizers

firms

Contingent

Chemical and drugs—
Fertilizer materials ____.—,*,z

■

109.97

.Sept. 23

ASSOCIATION—WHOLESALE

MisceUaneous commodities

Building

—

2.69

108.70

1.50

Cotton

Metals;

31—

179

?05

Market-value of listed
bonds___-——- 141235,834445 140762 ,829432

GROUP—1935-89=100:
-

Textiles

August

Market

Livestock

183

246
214

—

STOCK

Total

117.80

-Sept.. 23
sept: 23
—.Sept. 23

COMMODITY INDEX—

Grains

Cash

112.93

117.00

Sept; 23

oils

200%

AVER-

Bank, Ltd.—Month of August—

Credit

116.61

-Sept, 23
Sept. 23
.Sept.-23
—

and

.......

Farm products

174

FEDERAL

1935-39

Aug. 31
adjusted as of Aug.

—

YORK

.Total

119.20

116.80

-Sept. 23

z___

40,52V*

—z

RAILROAD

—__

120.22

115.82

108.16

Sept; 23
Sept. 23

119.20

115.43

Sept. 23

Group

118.80

Sept., 23

Public Utilities
Group.
Industrials Group

FOods

86,91^
197,96#^

64,989

1,616,330,000 1,856,682,000 1,798,758,000%

Midland
NEW

116.61

—_

NATIONAL FERTILIZER

81.923

200.583

51,538

August:

NEW CAPITAL ISSUES IN

121.11

115.63

—

ITT INDEX

81,339

164,636

DISTRICT,
of

seasonally

Member

Group,—

P55,511fv
2,082,690*.

3,834,34^
22,019,OOO^i

—Sept. 23

—:

21,197,000

Total

14.150c

DAILY AVERAGES:

Sept.' 23

Fats

Aug. 31-

Aug.

677,489

1,400,077
900,510
21,415,434

833,113

8.100c

10.500c

-fc

Sept. 23

MOODY'S

16.425c

Sept. 17
_

21.225c

Sept. 17

—

Public Utilities

710,601
1,154,267

—

Aug.

Sept: 17

Sept. 17

Railroad Group

58,000,000

PURCHASES—INSTITUTE
LIFE INSURANCE—Month of
August:

Bonds

Baa

14,000,000^
167,000,000*
47,000,000^'
70,000,000^
50,000,00Of>

INSURANCE

Ordinary

QUOTATIONS):

corporate

Railroad

unadjusted

Industrial

Sept. 23
Aa

19,000,000
187,000,000

COM¬

(average monthly), unadjustedSales (average
daily), unadjusted——
Sales (average
daily), seasonably adjusted-

U. S.

RESERVE

AGE=100—Month

Sept. 16

Louis) at
(East 8t. Louis) at

MOODY'S BOND PRICES

91,000,000 ^
23,000,000^;

27,000,000%,

64,000,000
65,000,000

31——

RESERVE BANK OF N. Y.

4,506,988

Sept. 16

(St.

Average

BALES—

Zinc

7,000,000^'

19,000,000
130,000,000
26,000,000
42,000,000

65,000,000

copper—

Domestic
refinery at
Export refinery at--.
Straits tin (New
York: at
Lead (New York) at

Lead

Sales

Sept. 16

—

DEPT.

—

RUNNING

public storage

Stocks,
Stocks,

ton)

265

BRAD*

IRON AGE COMPOSITE
PRICES:
Finished steel (per lb.).

Scrap steel (per

63,000,000

In public storage as of
Aug.
Cotton spindles active as of

290

Sept. 18

METAL PRICES

—

LINTERS

—

ERAL

.Sept. 20

INC.-

ton)-/..

development

Z— z—

AND

81,000,000^
24 w.OOUvOOO5!,

DEPARTMENT STORE SALES—SECOND FED¬

BDISON ELECTRIC
INSTITUTE:
Electric output (in 000
kwh.)_,

gross

25,000,000^;
18.000, oao^

Consumed Linters—Month of
August—
In consuming
establishments as of Aug. 31

SYSTEM—1935-38 AVERAGE=100.

Pig iron..(per

—

water

Consumed Line—Month of
August
In consuming establishments
as
of

12,888,000
1,251,000
125,900

DEPARTMENT STORE SALES—FEDERAL
RESERVE

(COMMERCIAL

Z-z-Z--

public-—.
building repairs
building nonfarm—
Nonresidential building nonfarm—

COTTON

4^,000,000

44,000,000
19,000,000
135,000,000
26,000,000
46,000,000
21,000,000
163,000,000
65,000,000

—

1,052,000

11,750,000
1,060,000

135,800

and

;

other

32,903,000
-

32,000,000^

2,000,000
:

facilities

Residential

33,955,000

2,117,000

42,000,000'^

44,000,000
2,000,000

„

Minor

82,796,000
'

8,000,000

60,000,000*7'

288,000,000

mili¬

—

All

MERCE

-Sept. 13
Sept. 13
—Sept. 13

(except
facilities).

naval

Conservation «fe

$116,751,000

41,274,000

16,975,000

•

.—

60,000,000
123,000,000

48,000,000

——

building

naval

—.

building

All'- other

75,000,000
125,000,000
303,000,000
10,000,000

——

utilities

construction

Military and
Highways

MINES):

Bituminous coal and lignite
(tons)
Pennsylvania anthracite (fcnnayBeehive coke (tons)—

STREET,

907,169
680,540

$109,382,000
65,991,000
43,391,000

63,718,000
46,743,000

—_—

construction

Public

ft//

Sept.,18
Sept. 18
OF

906,305
686,019

NEWS*

Sept. 18
Sept. 18
Sept. 18

BUREAU

—

other

Public

■

—_

Farm

Sept. 13

municipal

Commercial

8,855,000

Ago

1,405,000,000 1,340,000,000 1,223,000,00#^,
1,212,000,000 1,153,000,000 1,056,000,odd7
909,000,000
065,000,000
809,000,000^
443,000,000
421,000,000
347,000,00#^
268,000,000
261,000,000
321,000,000^
139,000,000
139,000,000
159,000,000%*
76,000,000
74,000,000
107,000,000^
51,000,000
48,000,000
162,000,000 »?'

—

Nonresidential building nonfarm
Industrial
:
:
—.1

Sewer

ENGINEERING

—

6,053,000

Year

Month

Residential building nonfarm

4,886,000
14,892,000
1,957,000

DEPT. OF

construction

2,093,000
6,061,000

Sept. 13

Public construction/-—
State and

FAILURES

construction

and
Industrial

construction———————

Private

tary

Total U, s. construction
Private construction

—-

CONSTRUCTION—U.

LABOR—Month of.
August;,

OF AMERICAN
RAILROADS:

Revenue freight, loaded (number of
cars).
Revenue freight rec'd from
connections (number of cars)--—

Latest
Month

90.4

New

(bbls. of 42 gallons each)..
(bbls.)

Federal

Ago '

93.4

Total

——

I-

Year

Ago

89.4

BUILDING
,

(bbls.)_.
Sept. 13
Kerosine output (bbls.)
Sept. 13
Gas oil and
distillate fuel oil output (bbls.)
Sept. 13
Residual fuel oil
output (bbls.)z_.
—;
Sept. 13
Stocks at
refineries, at bulk terminals, in transit and in
pipe linesFinished and unfinished
gasoline (bbls.) at
.Sept. 13
v
Kerosine (bbls.) at
.Sept. 13
.<
Gas oil and distillate fuel
oil (bbls.) at
.Sept.-13
Residual fuel oil (bbls.) at.Sept. 13

CIVIL

Month

We.ek

94.1

average

Gasoline output

ASSOCIATION

Week

.Sept. 28

INSTITUTE:

Crude oil
output—daily average
Crude runs

production and other figures for the latest week or month available
(dates
or month ended on that
date, or, in cases of quotations, are as of that
date) :

Latest

AMERICAN IRON AND STEEL
INSTITUTE:
Indicated steel
operations (percent of capacity).
Equivalent to—
Steel Ingots and
castings produced (net tons).
AMERICAN PETROLEUM

cover

either for the week

$16,351,900,514

$8,030,419,18*

(1242)

THE

COMMERCIAL

FINANCIAL

CHRONICLE

Thursday, September 25, 1947

III
•S

my ;

INDICATES ADDITIONS SINCE PREVIOUS ISSUE
rm-'

•

Alabama

Power

Co.,

Birmingham, Ala.

•

Sept; 19 filed $10*000,000 204year first
mortgage bonds.
Underwriters—To be determined by competitive

Sept.

bidders:

To finance part of 'its
expansion
Piiblic utility..

program.

Chicago* Ind.

•

Coleman-Pettersen Corp.,
Cleveland, Ohio
15. (letter of notification)
2,000 shares ($20 par)
6% canmiilative preferred and
-

(letter of notification) 750 shares ($100 par)
6% cumulative preferred.
Price—$100 a share.
No un¬
derwriting. ; For * machinery and equipment and > for
working capital.

bidding;
Halsey, Stuart & Co. Inc.; Morgan
Stanley; &Co.;, Drexel & Co.; Lehman
Brothers, and
Blyth& Co. Inc. (jointly);
Harriman, Ripley & Co.; Gold¬
man, Sachs & Co.; Lazard Freres
Co., and Equitable
Securities Corp;
(jointly). Expected in October.* Price
•—To be determined
by competitive bidding.
Proceeds—
Probable

Bates Expanded Steel Corp., East

Sept.

4,000 shares (no par) comone preferred

ttk>qgj^Price—$30 per unit, consisting of'
sharevqnd two common shares^ No
new

Bellefield

Co., Pittsburgh, Pk
Septi 44 (letter of notification); 30,877 shares (no
par)
capital stock.
To be offered to shareholders * at'
$5 a
share.
Underwriter—Pioneer Land Co., Pittsburgh/ For

Business—

underwriting; For
retirement of bank1-loan and
working

Equipment,

capi.tM,..

Colorado'; Central

* Power
Co., Golden* Colo. it.! ' f
(letter of notification) 9,872 shares ($10
par)
Price—$30; a. share.. Company* will sell the }'
through investment bankers or security dealers

improvement of hotel properties.

•

Aluminum

Industries,

Inc.,

•

Cincinnati, Ohio

Sept.; 17

(letter of. notification) 2,2951 shares (nonpar)
Price—$25.50 per share.
Underwriter—Hallgarten & Co., New York
For additional working
capital.
<

American

Brake

Shoe Co.,

Mining

Corp.,

Tacoma, Wash.

;

common.

•

New York

Sept. 8 filed 199,101 shares ($100 par) cumulative

Dipper

Sept> 18 (letter of notification) 1,000,000'shares (10^
par)
Price—10 cents a share.
Any selling agents
will be supplied
by amendment.
For mine development.

common.

Big

•

(letter of notification)

stalment notes.

—

change for outstanding preferred stock.
The exchange
offer will be handled by a
group of preferred stockhold¬
ers.
The outstanding preferred will be
retired.1

publicly

Brayton Flying Service, Inc., Robertson, Me.
March 24 (letter of
notification) 50,000 shares ($1 par)
27^ cent cumulative, convertible preferred and 50,000
shares (10c par) common;
Price—$5perunit,

share of preferred for each five
shares *
of common held.
Rights will expire 15 to 20 days after
Oct. 1.
Unsubscribed shares will be "offered
one

through the underwriter. Price by amendment.
Proceeds

general

off'$12,250,000 short-term

bank

loan

and

funds.

for

American Water Works
Co., Inc.* N. Y. (9/25)'
March 30, 1946 filed
2,343,105 shs. of common (par $5)
plus an additional number
determinable only after the
results of competitive
bidding are known. Underwriters
—To be filed
iby amendment. Probable .bidders
include
Billon, Read & Co. Inc.; White, Weld &
Co., and Shields
& Co.
(jointly), and W. C. Langley & Co. and The
First Boston
Corp. (jointly).

Offering—Stockholders of
Sept. 26 of American Water Works &
Electric Co.,
Inc., will have the right to subscribe on or
record;

before Oct. 6

for the stock to the
extent of

one

expansion of business.

•

common.

Cooperative

Sept. 8

(letter of

common.-

record'

Products, Inc.* Flemington, N. J.
notification) 45,550 shares ($2 par)

Price—$6

share.

Sept; 29 in ratio

Offered to stockholders of
new share
/or each five

shares held.

Rights expire Oct. 31.
For payment of
notes and additional

—

For payment of

underwriting.
working capital.

Associates* Investment Co.,
(10/7)
Sept. 15 filed 223,000 shares
($10 par) common.
Under¬
writers— F. S.
Moseley & Co., Boston; Glore,
Forgan &
Co. and
Merrill, Lynch, Pierce, Fenner &
Beane^New
York.
Price by
amendment;
Proceeds—Of the total
offering, the company is selling 200,000
shares and 23,000
shares by
selling stockholders.
The
added
•

working capital.;

proceeds

will

Atlantic

Products Corp.,
Ttenton, N. J.
Sept. 23 (letter of
notification) 29,568 shares of
stock (par $1).
Price—$1.75 per share.

Sept. 22 (letter of
vertible preferred
$21.50

(9/29)

notification) 1,000 shares
stock, series

of 5%

Price

New York.

con¬

(at market)—
Underwriter—Model, Roland & Stone,Prpceeds to Liberty Products
Corp.-

per share.

#•

The

Central

Ohio

through New York Curb

New York

Chicago and other cities'

Sept|

100,000 shares ($1 par)
No

underwriting.

For

Helicopters, Inc., New York
15.000
No

($1 par);
Fori

underwriting.

Sept. 9 (letter of notification)
$150,000 5% sinking fund
debentures, due- 1959, with stock purchase warrants
at¬
tached, and;7,500 shares (no par) common.

will be sold; at 100% and
the common will be
sold upon
exercise of the warrants at
$5 a share until Sept. 1*

$5.50f;a share until Sept. 1, 1950, and $6.25
Sept.

1953.
Underwriter—The
For modernization and
expansion
chase

Ohio

1948,

writ*

•
'

-Reich &

Ciro Twins

each six shares of
common held.

Rights expire pet. 8.
will be offered
publicly. Price $102
Proceeds—To redeem
outstanding notes and
for working
■
' '
capital.

cents

(9/29)

Co., New York.

per8

share.

Purchase of

Empire Corp.*

common',
Under*-

inventory,

Denver Colo.

Sept®"(letter of notification) 6,000,000 shares (5c par)
comifoj|n. Price—5 cents a share; Underwriter—Fleet*

■'

*•

For drilling exploration
v

•

lire

Projector Corp., New York (10/10)
A'UglM^(tette£ of notification). 80,000 shares ($1 par)

commfn
'

behalf of the

wilUee

sold. to

Sherman
Co., New York/ the
principal underwriter, at 60 cents a share. The under?wFping discount for 80,000 * shares will be 50 cents a

shAfe-The
„

company, and 15,000 shares ($1
on behalf of officers and stockholders. T7ie
will be sold at $3 a share! The 15,000 shares

par)|qpmmon
80,0#|thares

Co., Columbus.

•

Price—65

^vestment Co., Denver.

purposes and to pur¬

Mining Co., Orogrande, Idaho
Sept.; 4 (letter of notification)
$100,000 of class A stock
and $200,000 of class B stock.
Price—25 cents per share.
Underwriters-Edwin Lavigne &
Co.* Spokane, Wash. For
development of ; property.

per share.

100).

etc.

share until

equipment for wholly owned
subsidiary and to
provide working capital for the
subsidiary and the is¬

Unsubscribed shares

Metric Steam
Sterilizing Co., Inc., N.Y*
(letter of notification) 65,000 shares of

stock| (par

Distributing Co., Columbus, Ohio

preferred.
Underwriters—Goldman, Sachs & Co.,
are
principal underwriters. Offer¬
ing—The shares offered to common
stockholders of recoord Sept. 24 on the
basis of one share of
preferred for
;

Stores, Inc., Atlanta, Ga; "

ond

Pittsburgh

tie

Ing expenses.

Chicago

and Lehman Brothers

CORPORATION
Boston

Cluett; Peabody & Co., Inc., New York
(10/9)
Sept. 4 filed 112,974 shares ($100
par) 4% cumul. sec¬

FIRST BOSTON

—

(letter of notification)
Price—$1.25 a share.

Sept. 16 (letter of notification)
10,000 shares of stock on
of H. F. Carr, trustee.
To be sold at market
through J. S. Bache & Co., or Merrill
Lynch, Pierce,

suer;'"

Corporate and Public
Financing

certificates:'1 Price
$250 each." To be sold through
offites and directors of the
company.
For machinery
and for working
capital.
*"•

andllquipment

iman-Frasier

Carr-Consolidated Biscuit Co.,
Wilkes-Barre,
Pennsylvania

Debentures

Ardmore, Pa.

Business, Inc.* Denver* Colo/ "
(letter of notification) 500 "gross participation

—

Proceeds—To repay short-term bank loans
in con¬
nection* with the
financing of construction program.

Stock Exchange.

Autocar Co.*

Diversified

(letter of notification)
ibh.
Price
$1 a share.
feng capital.

par.

Fenner & Beane

•

Sedjpp9

common

shares..

ebentures will be used to - make
-advances * to* the I
y*s three operating subsidiaries for
construction:
$es." •'
■■

Telephone & Telegraph Co.,
Tarboro,

Underwriting—
To be offered for
subscription to common stock¬
holders to the extent of
10% of present

holdings in an
aggregate of 21,043 shares and to
certain key
employees
in an
aggregate of; 8,525
shares.; Reimburse company
for sum paid
by it for purchase of said

each five shares held.
Unsubscribed shares,
sold privately or
publicly through an underPrice to be supplied
by amendment. • Proceeds
eeds from the sale of stock and
from the sale of
e

stockholders on the basis of two new shares for
each five shares held of
record Oct. 1, 1947.
Price—at

•

(no par)" common;"- Utfdfcr*'
If a public sale is made the
underwriter will
lied by amendment.
Offerings—The shares will
red to common stockholders on
the basis of ■ one

behalf

None.

(par

for

Sept. 3 filed 21,250 shares ($100
par)'common. Under¬
writers—Nd underwriting;.
Offering—To be offered to

common

Oiled 43,610 shares

up co¬

shares held.
Unsub¬
scribed shares will be sold
publicly. Price—By amend¬
ment.
Proceeds—To increase capital funds.
Business—
Fire Insurance.

Carolina

Derby Gas & Electric Corp., New York

California-Pacific Utilities Co. (9/29)
Sept. 11 filed 45,000 shares ($20 par) .5% cumulative
pre¬
ferred stockl
Underwriters — First California f Co.* and
Sutro & Co j San Francisco.
Price—$20.50 a share. Proceeds—To repay $700,000 of short term
bank loans with

$5)^Underwriter—A. G. Becker & Co., Inc., Chicago.
Price^by amendment. Proceeds—The shares are being
soTpy stockholders who will receive proceeds.

corporate purposes.

of one

Cleveland

^Ummins Engine Co., Inc. (10/1)
Sepfc&8 filed 21,678 shares ($100 par) 4%% cumulative

Post

frfst series preferred and
50,000 shares of

Productions, Inc., Nashville, Tenn.
(letter of notification) 17,000 shares ($1
par)
Price
$8.25 a share.
Underwriter—Mid-

one share for each
share.
held. Bids—American Water
Works Co., Inc.* is inviting
proposals for the purchase from it of
such of the shares
the balance added to
of its common stock to
treasury funds.
'
be offered
by it pursuant to the
subscription offer to holders of common
stock of "AmerCallaway Mills, LaGrange, GaA ;
ieanJ Water 'Works * and
Electric Co., Inc.* and - the" ex¬
Aug; 28 filed .123,306 shares (no par) common.
Under¬
change offers to the public holders of
$7 cumulative first
writing—No underwriting.
Offering -— Shares will be
preferred stock of
Cofrimunity Water Service Co. and $6
offered only to those
stockholder^
cumulative preferred
exchanged their
stock, series* A, of Ohio Cities
holdings of common for preferred in 1945.'
Water Corp. as are- not
Price—$35 a
required to be issued by the
share.
Proceeds—For corporate
purposes.
company pursuant to such offers.
The total number of
shares of common stock so
•*' Camden
to be offered
(N. J.)
Fire Insurance Association
by the company
cannot be determined
'until a proposal has been
accepted • Sept. 19 filed 100,000 shares ($5 par) capital stock.- Un¬
by the company Proposals will
be received by the com¬
derwriter—Butcher & Sherrerd,
pany at Room 901,-No. 50
Philadelphia.
OfferBroad St., New
ing-r-Shares will be offered "to stockholders
York, up to
12 noon
in the ratio
(EDT) on Sept. 25.V
of one new share for each
four

Anchor

Services

operative.

Brown Radio

South Securities
Co., Nashville, Tenn.
bank indebtedness and other

Registration statement effective

Sepfel5 (letter of notification) 2,500 shares of
common.'
Priffio^r- $20 a share.
No underwriting.
To'set

share of each.

Aug. 29

(10/1)

AugMg.29.

consisting
Underwriter—White and Co., St
Louis, Mo. For expansion of operating facilities and for
working capital.
of

Chicago
—

ex¬

York, and Harris, Hall & Co. (Inc.),
Chicago; Offering—Preferred shares will be offered
for
subscription to common stockholders of record on
Oct. 1,
in the ratio

-—To pay

Corp.,

filed $800,000 10-year first
mortgage 4%% sinking fu«td bonds. Underwriters
Illinois Securities Co.*
f
Joli#t^ll., and Mullaney, Ross & Co., Chicago.; Price—
Par.KOTproceeds—To pay off indebtedness and to finance

$68,410 10-year 3% in¬

Notes will .be offered with cash, in

>n-Moore

Minnesota

Sept. 18

Proceeds will

repay a $100,000 loan and to reimburse its

treaty cash.

Boyd Transfer & Storage Co.,
Minneapolis,

pre¬

ferred; Preferred stock is convertible
into common any
time prior to Oct.
1, 1957; Underwriters
The First
Boston Corp., New

commission of; $1.25 a share.

company- will

capital.

;

use
.

its

proceeds

increase

Volume 166

Number 4632

HEW ISSUE CALENDAR
"•'.

THE COMMERCIAL*

n,V;:".September 25, 1547

the ratio of one new share for each two now held. Un¬
subscribed shares will be offered publicity at $2 a share.
The underwriters will receive a commission of 25 cents

f ;:■"

share. Proceeds—For business expansion and
short term indebtedness.

American Water Works Co., Inc..—..—Common
Denver &vRio Grande Western RR.
*
Noon

• /

Natra-Lyn

Corp.

1—Capital Stock

September 29, 1947
®
Autocar Co.^,-,.>„w—
_Preferfed
(i California-Pacific Utilities Co
Preferred
Electric Steam Sterilising Co.:—-——Comlft»
Jersey Shore Gas & Heating Co._'_-___-^_^_-Bm«as
"

United Utilities Specialty Corp.___
:.a

•

neco

.Preferred

i Kentucky Utilities Co
—.—..Preferred
j
New England Telephone & Telegraph Co.-, ^
'
11:30 am. (EST)
--1———
—Debentures
Somners Drug Stores Co
October 1,

program.
•

__Pfd. & Com.
1947
j
Chicago, Milwaukee, St. Paul & Pacific,
>'
Noon (CST)
Equip. Trust Ctfs.
( Conlon-^Moore Corp.
:
__Bonds
; Cummins Engine Co., Inc.____—Pfd. & Com.
■'
Florida • Rami-' Products, Inc.________ 1 -Commpn
Standard-Thompson Corp.______Debs. & Com.
Telesonic Corp. of America--_______-Capital Stock
October 2, 1947
Southern Pacific Co.,
Noon (EST) __________„Cond. Sales Agreement
,

—Manufacture men's
•

6; 1947

Mutual Finance Co._^__———
___Pfd. & Com.
Seaboard Air Line RR., Noon (EST) __Eq. Tr. Ctfs.
_

_ _

Pacific Gas & 'Electee Co.—
:

<■'

•

Ortnhor

Cluett, Peabody & Co.,
U

Bonds

1M7

Inc'_____

;;

Preferred

Common

\
—__Cond. Sales Agreement

;v;
October 14, 1947
Texas Power & Light Co.
..

/#*•.

•

October110, 1947-'••

Noon (EST)

•

Empire Protector Corp.
Richmond. Fredericksburg & Potomac,

■

October

__Bonds

21,^1947-J

Pacific Tel. & Tel. Co—;

Debentures

Federal Electric Products Co.

>
-

Feb.

26, filed 150,000 shares ($1 par) common cj
F. Gillespie &
Co., Inc., New
Price—$7.25 a snare.
The registration
states*]
pal atockholder has granted the underwriters an
#tios
to purchase 45,000 shares of class B
($1 par) common
at $7.25 a share, exercisable for a
period of three years.
Proceeds—rProceeds of approximately $870,000, together
with $755,000 of other bonds, will be used to
repay the
balance of $34,000 of a property mortgage, to
pay off
loans In the amount of $1,295,000 to Bankers
Commer¬
cial Corp., New York, and for additional
working capital
Underwriter—E.

Florida

Rami Products, Inc. (10/1-10)
(letter of notification) 100,000 shares ($1 par)
class A common.
Price—$3 a share. Underwriter^Batkin, Jacobs & Co., New York. To purchase new
machines
and equipment, to pay off some current
liabilities and
.

Aug

to add to
•

working capital.

Florin Water

Sept.

mtge,

Co., Harrisburg, Pa.
(letter of notification) $67,000 4% 1st
^closed
ref. bonds, due Oct. 15, 1969.
Price—99 i^excl.

of interest

from

writer—Warren

Oct.

date

delivery).

W. York & Co., Inc.

1st

Under¬

To refund $67,300

mtge. 6s.

•

Futurers' Home

Owners, Inc., Washington,#. C.
Sept. 17 (letter of notification) $100,000 ($500 parfe&ommon.
Price—$500 a share. No underwriting: FO^gen-

eral corporate purposes.

;

Inglewood Gasoline Co., Beverly Hllls
July 7 (letter of notification) 100,414.8 shares ($1 par)
capital stock. Price—$1 r share. To be offered to stock¬
holders.
Unsubscribed' shares to be ^offered publicly
through Bennett & Co., Hollywood. To purchase equip¬
ment; liquidate indebtedness: and for working capital.:
An amended application may be filed in nearffuture. <

Glens

Falls

(H, Y.)

Insurance

Co.

Sept., 18 filed 150,000 shares ($5 par) capital stock;!
derwriter
Morgan Stanley & Co., New York:
ihg — The^, shares will be offered for subscri,
—

stockholders

the basis of three

shares held of record Oct. 6.

new

shares for

Unsubscribed shar

be offered
■).

publicly through underwriters. Price
amendment.
Proceeds^—To be added to the co

Dubuque, Iowa (9/26)
May 13 filed $19,400,000 of first mortgage bonds, due
1977, and 2,132,223 shares ($3.50 par) capital keck.
Proceeds—For debt retirement, finance new construction
and for working capital.
Bonds awarded Sept. 24 to
Halsey, Stuart & Co. Inc. on bid of 101.90 for a 3%%
Reoffering expected at 102.80.
Stock
Sept. 24 on bid of $4.05 per share to Lehman1
Brothers, Goldman, Sachs & Co. and Wertheim & Co.
Reoffering expected at $4.75.

•

Grand

Sept.

I-T-E

Co., San Diego, Calif.
(letter of notification) 10,000 shares

($L-par)

common, of which 5,000 on behalf of Edwin A.
and 5,0°0 on behalf of Harlan B. Eldred, both

Barnes \

vice-presi-'

dents of the company.
-

To be sold at market to regis-5

Great

Great Western Biscuit Co., Los Angeles

Aug.

filed

Underwriter

Philadelphia

Kent-Moore Organization Inc., Detroit
Sept. 10 filed 32,000 shares of common. Underwriting—
No underwriting.
Price—$16.50 a share.
Proceeds—
Shares are being sold by two stockholders who will re¬
ceive proceeds,
-

Kentucky Utilities Co., Lexington, Ky. (9/30)
May 9 filed 130,000 shares ($100 par) cumulative pre¬

—

249,972

Fewel &

($1 par) capital stock.
Co., Los Angeles. Offering —

Shares will be offered to stockholders at

share in

sold

Co.> New York.

5,000

market.

($2 par)

Underwriter—Btrn-v

Shares being sold on behalf of

two stockholders.
,

Manhattan Coll Corp., Atlanta, Ga.
May 20 filed $500,000 5% serial debentures, due 19491957; 12,000 Glares <$B5 par) 5%% cumulative converti¬
ble preferred and 85,000 shares ($1 par) common.
Un¬
derwriter—Kirchofer & Arnold, Inc., Raleigh, N. C. Price
--The debentures at 102.507, while the preferred shares
will be offered at par and the common shares at $4:
Proceeds—To

retire

bank

indebtedness

to I

and

finance purchase of machinery and other plant equip¬
ment.
•

Massachusetts

Bonding and

Insurance Co.,
' •.

Boston

Sept. 19 filed 100,000 shares ($5 par) capital stock. Un-,
derwriter—Geyer & Co., New York. Offering—To be
offered for subscription to stockholders on the basis of
one

new

share for each four held.

will be sold

publicly.

Unsubscribed shares

Price by amendment.

Proceeds

—For expansion of business.

McCormick & Co.,

Inc., Baltimore, Md.
(letter of notification) 1,400 shares ($100 par)1
5% cumulative preferred.* Price—$100 a share. No un¬
derwriting. For additional working capital,
Aug. 13

McPhail Candy Corp., Chicago

July 25 filed 100,000 shares ($10 par) 5% % cumulative
convertible ^preferred 'and '200,000 - shares ($1 par) com¬
mon.
Underwriters—Brailsford & Go., and Shillinglaw,
Bolger & Co., Chicago.? Price — $10 a preferred share
and $6 a common share. : Proceeds — Company will :re—
ceive proceeds from the sale of preferred only and will
use it to pay off bank loans, buy new equipment and for
working capital.; The common stock is being sold by
Russell McPhail, President.

Metropolitan Edison Co., Reading, Pa. (10/7)'
Aug. 29 filed $4,500;000 of first mortgage bonds. Under¬
writing
■
To be determined by competitive bidding.:?
Probable bidders: Halsey, Stuart & Co. Inc.; The First
Boston Corp.; Drexel & Co.
Proceeds—For purchase*^;
construction of

way,
•

facilities. /, BidJsf-Explcted^^

new

outstanding .($100 par) 6% preferred and ($50par) junior
preferred. The basis. of exchange will toe one share of
preferred for each share of 6% preferred and one
share of new preferred for each two shares of junior
preferred. Shares of new. preferred not issued in ex¬
new

will

putolidly

Koch Chemical

Co.* Winona, Minn.
(letter of notification) 60,000 shares ($1 par)
Price—$5 a share. Underwriter—H. P. Carver
Corp., Boston. To retire debt and for working capital.

Sept. 25, to be opened Oct. 7 at 61 Broad¬
New York.
'•
^
.

Murphy

(A. A.)

& Co., St. Paul, Minn.

Sept. 16 (letter of notification) 6,000 shares of 5%%'
prior preferred.
Price — $50 a share.
UnderwriterPiper, Jaffray & Hopwood, Minneapolis.
For partial'

payment of outstanding bank loans.
•

Mutual Finance Co., Tampa,

Fla. (10/6)

Sept. 18 (letter of notification)

2,420 shares ($100 par)
5% cumulative preferred and 2,420 shares (no par) com¬
mon.
Price—$105 per unit, consisting of one share of
each.
To be distributed by. A. M. Kidder & Co. as agent.
For payment of current obligations.
-f;? •
National Union Fire Insurance Co. of Pittsburgh,
Pa.

(9/29)

Aug. 5 filed 180,000 shares ($5 par) capital stock.
Un¬
First Boston Corp., New York,
Offer¬
ing—Stockholders of record Aug. 25 are given the right
derwriter—The

subscribe at

held.

rate

of nine shares

Rights expire at 10

for

each

Sept. 29.
Unsubscribed
shares will be offered publicly through the underwriters.
Price $25 per share.
Proceeds—To be added to cash
a.m.

funds for investment in securities.
,

•

Natra-Lyn Corp., Camden, N. J.

(9/26)

(letter of notification) 10,000 shares of capital
Price—$5 per share. Stock shall he sold
only by J. Howard Cundiff, Jr., 98 Park Ave., ColUngswood, N. J.
For advertising products of corporation,
consisting principally of cosmetic preparations.
I
Sept. 23

stock (par $5).

Underwriter—The First Boston Corp. Offering—
initially will be offered in exchange for

New

England Telephone

and

Telegraph

Co.

(9/30)
Aug. 29 filed $40,000^000 of 35-year debentures.
Under¬
writing — To be determined by competitive bidding.
Probable bidders: Morgan Stanley & Co.; Halsey, Stuart*
& Co. inc.* Proceeds—To repay money advanced by its
parent, American Telephone & Telegraph Co., as a tem¬
porary financing measure toward construction costs; and
to

finance

further

construction

costs.

Bids—Bids

for

purchase of the bonds will be received by company at
room 2315, 195 Broadway, New York, up to
11:30 a.rcu
(EST) on Sept. 30.
:
.

July 22

common.

Eastern Mutual Life Ins.
Co., Denver
Slept. 2 (letter of notification) 45,250 shares ($L par) a
capital stock.
Price—$2 a share. To be sold through v
Officers of the company.
Of the total 13,250 shares will $
be sold for cash and 32,000 will be issued in
exchange for 32,000 shares of capital stock of Western
Agency Co. *
In order to acquire all of the latter's assets.

Co.,

Jersey Shore (Pa.) Gas & Heating Co. (9/29)
Sept. 10 (letter of notification) $25,000 first mortgage
sinking fund debentures. Price, par.
Underwriter—
Bioren & Co., Philadelphia.
To retire present loan of
$20,500 and to add to working capital.
\

■

Circuit: Breaker

Sept. 15 filed 61,476 shares ($10 par) common.
Under¬
writer—No underwriting.
Offering—The shares will be
offered to ($10 par) common stockholders of
Railway &
Industrial Engineering Co., South
Greensburg, Pa., on
an
exchange basis of 1^ shares of I-T-E Common for
one share of Railway Common.
The offer will be made
pursuant to a plan of reorganization,

offered.
Proceeds—Proceeds
from the sale of new preferred will be used to redeem
unexchanged shares of old preferred.
Offering tenta¬
tively set for Sept. 30.

Stores

terea dealers.

rate.

coupon

awarded

change

general funds.- Business—Insurance business.

(letter of notification)

common.

baum &

Manufacturing Co., Inc., Little Falls,'

N. Y»

July 31

Preferred stock

Business—Mining.

Falco

be advertised

Interstate Power Co.,

ferred.
•

wear.

Hi-Dollar

Rochester,

lllinois-Rockford Corp., Chicago
July 24 filed 120,000 shares ($1 par), common. Under¬
writers—Brailsford & Co., and Straus & Blosser, Chicago.
Price—$955 a daare. Proceeds—The shares are being
sold by f0tH**toddioiders and represent part^of the $tock
the sellbra Yi^l receive in exchange for ^ieir holdings
of four furMture companies to be merged with the regis¬
trant. The merging companies are Toccoa Manufacturing
Co. and Stickley Brothers, Inc., both Illinois corpo¬
rations, and the Luce Corp. and Stickley Bros. Institu¬
tional Furniture Co., both Michigan corporations.

1947
Co.
—Common
Chesapeake & Ohio Rv., Noon (EST)__Eq. Tr. Ctfs.
Chicago Burlington & Quiney,
Noon (CST)
Cond. Sales Agreement
f Metropolitan fSdison Co..
:____
-Bonds

-} Associate Investment

Inc.,

Shannon, Inc., Las Vegas, Nev.
Sept. 17 (letter of notification) 400 shares ($100 par)
6% preferred and 2,000 shares ($10 par) common.
Price
—$150 per unit, consisting of one share of preferred and
five shares of common.
Any underwriters will be sup¬
plied by amendment. For operation of business.

October 7,

Co.,

New York'

______

Manufacturing

each.

Business—Sugar refinery.

Hickok

Sept. 19 filed 200,000 shares ($1 par) common. Under¬
writer—E. H. Rollins & Sons, Inc., New York.
PriceBy amendment, 'Proceeds—The shares are being sold
by 36 stockholders who will receive proceeds. Business

■.

October

equivalent to 50 cents). Underwriting—No Under¬
Offering—For subscription by common stock¬
on the basis of one share for each *1%
shares
owned. Price—$5 a share. Proceeds—For rehabilitation

writing.
holders

September 39, 1947

properties.

Hawaiian-Philippine Co., Manila, P. I.
Sept. 24 filed 500,000 shares 7% cumulative preferred,
par 10 Philippines pesos per share (currency basis one

National Union Fire Ins. Co._——l_-Capital Stock
Texas Electric*Service Co., Noon (EST)
Bonds

Legend Gold Mines, Ltd., Toronto, Canada

Greenback

(1243)

June 27 filed 300,000 shares
($1 par) common treasury
stock.
Underwriting — To be supplied by amendment.
Price—50 cents a share. Proceeds—To
develop minings

to reduce

(Tenn.) Industries, Inc.
Sept. 17 (letter of notification) 25,000 shares ($10 par)
preferred and 50,000 shares (100 par) common.
Price—
$10 per unit, consisting of one share of preferred and
two shares of common.
Underwriter—L. L, Bailey &
Co., Knoxville, Tenn. To pay for equipment and build¬
ings.
v.
v;

(MST) ^___j:_______Equip.Trust. Ctfs.
September 26, 1947
;,

* Interstate Tower Co.---_________Bonds & Common

& FINANCIAL CHRONICLE

Plant-Choate

Manufacturing Co., Inc.,
Rapids, Iowa
April 30 filed 60,000 shares ($25 par) 5% cumul.
Cedar

vertible preferred. Underwriter—Paul H.

con¬

Davis & Co.,

Chicago. Price—$25 per share. Proceeds—To be added
to working capital and will be used in part to reduce
current bank

loans.

•
Lay (H. W.) & Co., Inc., Atlanta, Ga.
/,!
Sept. 19 (letter of notification) 12,000 shares of $25 par
5.2% cumulative convertible preferred.
Price — $25 a
share.
Underwriters—Headed by Clement A. Evans &
Co., Inc., Atlanta, Ga. For new bakery plant.

•

Pacific Finance

Corp. of California, Los Angeles
Sept. 24 filed 19,750 shares ($10 par) common. Under¬
writing—No underwriting.
Offering—To officers and
employees of the company. Price—$18 a share. Proceeds
For general corporate purposes.
Business—Finance and
insurance business.

Pacific Gas & Electric Co.

:'
(10/7)

10 filed $75,000,000 2%% 1st and ref. mortgage
bonds, series Q, due Dec. 1, 1980. Underwriters—To be]
determined through competitive bidding.
Probable bid-;
ders include: Blyth & Co., Inc.; Halsey, Stuart & Co. Inc.;
The First Boston Corp. Proceeds—To retire bank loans
and to finance in part construction program.
Bids—Ten¬
tatively expected Oct. 7.
(Continued on page 44)
Sept.

en as a

(Continued from page 43)
•

Thursday, September 25, 194?-

THE COMMERCIAL & FINANCIAL CHRONICLE

(1244)

bonus

the basis of

one

share of common with

each, share, of preferred

Pacific

Telephone & telegraph Co.,

Francisco

(10 21)

stock to be donated shares from
present common stockholders.
Price — $10 a preferred
share.
No underwriting.
To retire part of bank loan
and improve working capital.

Salt'

■

Sept. 19 filed $100,000,000 40-year debentures. Under¬
writing — To be determined by competitive bidding.
Probable bidders: Morgan Stanley & Co,; Halsey, Stuart
& Co. Inc.

Price

Teaco

To be determined by competitive

—

named underwriter.

stock

The pur¬
from the
seller one share of $1 par common.
No underwriting.
The shares are being sold by three officers of the com¬
pany

Sept. 2 (letter of notification) 14,000 shares of common
(par 50c). Priee^-$1.875 per Share.
Offered on behalf
of or for benefit of Greenfield, Lax & Co., Inc., who is

from 100,000 to 500,000
declaration of a 100%
shares for
stockholders at rate of one share for

and the

each two shares held,
•

issuance of 100,000

Baltimore & Ohio RR.

Sept. 24 reported company has pending a proposal to
issue about $11,000,000 in equipments, expected to be f
marketed in two lots.
Probable, bidders: Halsey, Stuart •

of America, New York (10/1)

Sept. 23 (letter of notification) 100,000 shares of capital i
(par $1). Price—$2.50 per share.
Underwriter—
Americah Canadian Enterprises, Ltd., New York. Work- '

Effective Sept. 10.

dividend

subscription to

who will receive proceeds.

Telesonic Corp.

Industries, Inc.

Aluminum

Plan proposes increase in capital
shares (no par) common, the.

5% cumulative preferred.
Price—$10 a share.
chaser of each share of preferred will receive

N. Y.

Brooklyn,

Beverage Co., Nashville, Tenn.

Sept. 8 (letter of notification) 25,000 shares ($10 par)

bidding.
Proceeds—For construction program.
Bids—
Company will receive bids for the purchase of the bonds
up to 11:30 a.m. Oct. 21,

Payne Cutlery Corp.,

•

Sept. 23 reported special stockholders' meeting will be
held in October to authorize capital expansion program.

& Co.

Inc.; Salomon Bros, and Hutzler,

stock

•

Process Engineering,

Inc., Sbmervilte, Mass.

Sept. 18 (letter of notification)
preferred.
Price—$100 a share.

general corporate
•

purposes.

Prosperity Co.,

Inc.,

ing capital and increase production

750 shares ($100 par)
No underwriting. For
I

Oct.-2 the SEC will hold a hearing on the

facilities.

Texas Co., New

York

Aug. 14 filed lan unspecified number of common (par
$25) shares (maximum number, 2,248,932 shares). Un¬
derwriters—No underwriting.
Offering—Shares are of¬

Syracuse^ N. Y.

Salant & Salant, Inc.. New York

28 filed 240,000 shares ($2 par) capital stock.
Underwriter—Eastman,-Dillon & Co., New York. Price5

Proceeds—Shares

are

$45

(Wash.)

Precision Corp.

Sept. 10 (letter of notification) 15,000 shares (400 par)
common.
To be sold af market through brokers and
dealers. The shares are being sold by Lawrence Schmitt,
President, Who will receive proceeds.
(9/30)

t—Alex. Brown & Sons, Baltimore, Md.
Price to be sup¬
plied by amendment. Proceeds—To acquire control of
two other drug companies—Somners Drug Stores in San
Antonio and the Thames Drug Co., Inc.,
Beaumont, Tex.
These two companies, will be liquidated upon transfer of

their assets to,the registrant.

Newark,

'•/

•

(letter of notification). 20,000 shares.($1 par)
and 250 shares ($10Q- par) preferred: - To be
underwriting, to be sold through offi¬
For plant expansion and broadening
sales territory.
Sept. 8

common

\f:

■'

Consolidated Edison. Co. of New York,

•

Inc.

Sept. 19 filed'with the New York P. S. Commissioij
application for permission to issue 1,750,000 shares of
new preferred stock
and $57;382,6O0 principal amount
convertible debentures.

Proceeds from the

sale

preferred shares will be applied to the redemption
at $105 of company's present 2,188,885 shares of $5 cu¬
mulative preferred stock which has a book stated value

$199,995,259. Proceeds from the sale of the convertible
will be applied (1) to redemption of the
present preferred stock. and (2) to^ reimbursement of
company's treasury for sums expended for Recent plant
additions. - The convertible debentures will be offered
common stockholders on the basis of $5 principal amount
for each share held, according to the terms put forward
in the application to the Commission. The debentures;
debentures

10 filed 75,000 shares ($10 par) 5% cumulativepreferred.
Underwriter—Herrick, Waddell •
& Co., Inc., New York.
Price—$10 a share. The under- >
writers will receive

commission of $1.50 per

share.

In?

addition, they will be granted warrants to purchase 50,common at $5 a share.
Pro¬
ceeds—For additional working capital.
1
<
000 shares of the issuer's

Inc., McNary, Ariz.

will, be
-

Aug. 11

(letter of notification) 40,000 shares ($1 par)
capital stock. Price—$7,50 a share. To be offered to

•

stockholders.

Universal

Service

Corp.,

Chicago

*•'

common

share.

Fpr working capital.

underwriting.

Inc., Lynchburg, Va.
Utah Chemical & Carbon Co.

Sept. 8 (letter of notification) 1,621 shares ($1
par) com¬
mon, on oehalf of company and 8,000 shares
($1 par)
common, on behalf of four stockholders.
Price—$12 a
share.
Underwriter
Scott Horner &
Mason, Inc.,
Lynchburg, Va.
Company will use its proceeds for
Working capital and expansion purposes.

Dec. 20 filed $700,000

5% 15-year convertible debentures

due 1962, and 225,000 shares ($1 bar) common. The state¬
ment also covers 112,000 shares of common reserved for

—

conversion of the debentures.

Co., Inc., Boston.

Underwriter—Carver &

Price—Debentures 98;

convertible into

common

stock at rates to be

determined by Edison's board of trustees. The interest
rates on the debentures and the dividend rates on the
new preferred
stock also will be determined subse¬
quently by the trustees. Traditional underwriter: Mor¬
gan Stanley & Co.
,

Sept. 15 (letter of notification) 2,994 shares ($100 par)
5% preferred (cumulative), and 5,494 shares (no par)
common.
Price—$100 a preferred share and 10 cents a

Any shares not purchased by stockholders
will be bought by Imperial Trust
Co., Ltd., of Montreal,
Can. To restore
working capital.
•.'»
Sta-Kleen Bakery

(10/1)}

new

convertible

working capital.
Southwest Lumber Mills,

Chicago Milwaukee St. Paul & Pac. RR.

common

$3.75

Denver &

Rio Grande Western RR.

(9/25)'

Company has issued invitations for bids to be received
on or before noon1 (MST) Sept. 25 at office of company,
201 Rio Grande Bldg., Denver, Colo., for $2,220,000 of
equipment trust certificates.
The certificates will be >
dated Nov. 1, 1947, and are to mature semi-annually
from May 1, 1948, to Nov. 1, ,1962.
Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler.

per

Standard-Thompson Corp., Dayton, O. (10/1)

^ filed $1,750,000 5% sinking fund
debentures, due
1967, and 272,500 shares of common (par $1). Under-

writer-Lee Higginson Corp., and
Iric.» New York.

share.

Proceeds—For plant construction, purchase

equipment and for working capitaL

statement became effective June 28.

..ft

Registration
-

•' T'

P. W, Brooks & Co.'

Offering—The debentures' with

Vauze Dufault

com-,

Mines, Ltd., Toronto, Canada

HJ?n stock, warrants attached will be offered publicly.
he

Mar. 31 filed 500,000 shares ($1 par) common.

debentures.

writer—Name to be filed by amendment. Price—50 cent*:

common

shares will be reserved for conversion of

share..

Proceeds—For general

Under¬

•

Equitable Office Building Corp.

Sept. 23 ballots for voting on a pian of reorganization
approved by Federal Court Sept. 12, were ^ihaileid fto
stockholders.
Ballots are returnable Oct. 15. ^Th^pl§ih,
which has the approval of the stockholders committee'
and termed fair and equitable by the SEC; provide^ fpr
raising, by an offering of shares 4o stockholder r of, j|(n.
mr

operating expenses.
:

Sterling Electric Motors, Inc.,, Los Angeles,

California

Sept. 10 (letter of notification)
common.

•

;

19,591 shares ($1 par)

The shares will be issued upon exercise of out¬
To be added to the corporation's

:•:

'■

Vernal Oil A Gas Co., Sail; Lake City, Utah-

UNITED STATES

Sept. 15'(letter of notification) 300,000 shares of com¬
mon.

standing warrants.
-funds.'

Price-~25 cents

share.

GOVERNMENTS^ ?

MUNICIPAL AND

STATE,

To be sold through se¬

iu:

curities agents at a commission of

■

15%.

CORPORATE SECURITIES

Drilling well

for oil and gas.
9

Stokely-Van Camp, Inc.; Indianapolis, Ind.
Sept. 19 (letter of notification) 9,524 shares ($20 par)*
5% cumulative prior preference stock.' To be issued in
considerationr for the assets and plant of; The Polk Co:*
Tampa^ Fla., No underwriting...:
r*1
►

> •'

*'-j

'?'•

Wiard Plow Co., Batavia, N. Y.

stockf(p&r $1) with tights tp/purchase

;

tioiial Shares.

to 10,000 addi-

UnderV'

*/•>; -}:£ r^f

•

•'*.

u-INC.i"

NEW^yoric:^

•: vl ^

•

ATLANTA.
'ft-

■1;v

,•

;

* Wnter^E. F.tJiHespie #Co/, InevNew York; Pay bank?

Sept.115/(letter o(. notification)29,500 shares of pr0ferr0 and-29,500 shares of cbmmon.~ The common will be giv-; ingcapital.

Price—-$2.90 per1 share; rights 30.

6- Co.

Blair

Sept. 3 (letter of notification) 100,000 shares of common

(

•.

SunbeamPetroleum Co,r-Chicago

Company will receive bids up to noon (CST) at Roon*
744, Union Station Bldg., Chicago, for the sale of $2,240,4
000 equipment trust certificates, series AA, to be dated
Oct. 1,1947 and maturing in 20 equal semi-annual install
merits April 1, 1948-Oct. 1, 1957,
Probable bidders;
Halsey, Stuart & Co, Inc.; Salomon Bros. & Hutzler.

July

($10 par)

6% cumulative preferred and one
share ($1 par) common.
Price—$12.50 per unit. Underwriter—Southeastern Securities Corp., Jacksonville. For

^United Uttl(ties. & SpecialtyCorp.. (9/29-30)

July 29 (letter of notification j 8,000- units consisting of"
share

Jackson, Miss.

sold at par.
No
cers of company.

one

(10/14)

Tri State Linen White Corp.,

Southeastern Development Corp., Jacksonville,

Fia.,5f >*-"•:

Light Co.

Sept. 3 filed $4,000,000 30-year first mortgage* bonds.
Underwriters—To be determined by competitive bidding.^
Probable bidders: Halsey, Stuart & Co; Inc.; The"
First;
Boston Corp.
Proceeds—Tp redeem outstanding securi¬
ties of Atlantic City Gas Co., and
Peoples Gas Co., which)
were merged to form South'
Jersey Gas Co.

Power

Sept. 12 filed $8,000,000 30-year first mortgage bonds.
Underwriters—To be determined by competitive bidding.
Probable bidders include: Blyth & Co., Inc., Smith, Bar¬
ney & Co. and Kidder, Peabody & Co. (jointly); W. C.
Langley & Co. and Glore,;Forgan & Co. (jointly); Hal¬
sey, Stuart & Co. Inc.; The First Boston Corp., Hemphill,
Noyes & Co. and Drexel & Co. (jointly); White, Weld &
Co., Lazard Freres & Co. and Harriman? Ripley & Co.,
(jointly).
Proceeds—To, finance construction program.
Bids for purchase of bonds expected about Oct. 14..

Sept. 5 filed 100,000 shares ($5 par) 300 cumulative pre¬
ferred and .67,500 shares ($1 par) common.
Underwriter

Jersey Gas Co.,

•
Chicago, Burlington & Quincy RR. (10/7)
Company is inviting bids for the lowest interest rate at
which bidders will provide the following: Not to exceed
$1,252,900 from time to time before Jan. 31, 1948, for
financing the acquisition of two new 6000 horsepower
Diesel-electric freight locomotives and one new 4500
horsepower Diesel-electric passenger locomotive, and
not to exceed $1,517,100 from time to time before Aug.
31,1948, for financing the acquisition of 14 new stainless:
steel streamlined passenger train cars.
Bids are to be
submitted on or before noon (CST) Oct. 7 at Room 205^
547 West Jackson Blvd., Chicago,

Texas

South

(9/29)

ding.
Probable bidders include: Blyth & Co., Inc;,
Smith, Barney & Co. and Kidder, Peabody & Co. (joint¬
ly); The First Boston Corp.; Halsey, Stuart & Co. Inc.;
Hemphill, Noyes & Co. and Drexel & Co. (jointly);
Glore, Forgan & Co. and W. C. Langley & Co. (jointly);
Harriman, Ripley & Co. and Stone & Webster Securities
Corp.. (jointly); White, Weld & Co. and Lazard Freres
Co. (jointly).
Proceeds—To finance construction ex¬
penditures.' Bids—Bids for purchase of bonds will be
received by company at room 2033, 2 Rector Street, New
York, up to noon (EST) Sept. 29.

(letter of notification) $300,000 ($50 par) pre¬
Price—$50 a share. Underwriter—Shea & Co.,
Boston; and Smith, Landeryou & Co., Omaha, Neb. For
payment of loan and current obligations.

Sontners Drug Stores Co.

Fort Worth

27 filed $7,000,000 30-year first mortgage bonds.
Underwriting—To be determined by competitive bid¬

Gas Co.

(N. Y.)

proposal of

(subsidiary of Middle West Corp.) to sell «
319,300 shares .($10. par) common stock to Middle West ;
and 110,700 shares to Halsey, Stuart & Co. Inc. at $10 \
a share.
Central would use proceeds to finance additions
and extensions to its electric facilities.
Chesapeake & Ohio Ry. (10/7)
Company has issued invitations for bids to be received '
on or before noon (EST) Oct. 7 at office of H. F. Lohmeyer, Sec.-Tres., Terminal Tower, Cleveland, for $5,300,000 of equipment trust certificates. The certificated
will; be dated Oct. 15, 1947, and are to mature in equal
annual instalments from Oct. 15, 1948, to Oct. 15, 1957*
Probable bidders:
Halsey, 4Stuart & Co. Inc.; Harris*
Hall & Co. (Inc.); Salomon'Bros. & Hutzler.

Aug.

Sept. 4
ferred.

Silver Creek

•

per-

Texas Electric Service Co.,

being sold by 13

Stockholders who will receive proceeds.
Seattle

share for-subscription to stockholder^
of record Sept. 17 on basis of one new for each five
shares held.
Rights expire Oct. 8.
Proceeds—To be
added to-general funds for corporate purposes.

fered

March

by amendment.

the company

Sept. 17 (letter of notification) 3,000 shares/ ($100 par)
preferred/Price—$100 a share. No underwriting. /For
general corporate purposes.
;

Central Illinois Public Service Co.

•

BOSTON

PHILADELPHIA

•

BUFFALO..

PITTSBUIM3k

•,

CHICAGO

6T/LbuiS

•

C3LEVELAND

FRANCISCO!

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4632

Volume-166

shares.

prin¬

amount sufficient with other funds to pay off the

The

cipal and interest on $4,754,000 5%. debentures; and $3,000
6% gold bonds. The offering will be underwritten by

redesignated

Wertheim & Co.

cumulative

and

present 32,300 outstanding shares Would be
cumulative preferred, Shares 4 V4 % series

Idaho Power Co.

& Co.

Lazard Freres

The

underwriters.

•

purpose

construction, extension and im¬
operating facilities. Company also was

authorized to

•

short-term bank borrowing, aggre¬

issue

reported

Engineering Corp. (Calif.)
Sept. 15 stockholders authorized an issue of 15,000 shares
preferred stock (par $25). No further details available.

•

■■

agent.

& Co.

■.

•

Seaboard Air Line RR.

The

vote

the

growing furore as
new issues,
particularly in view of the large
backlog which is piling up, in¬

due to

are

rank

the

file complain that the

and

working

the Securities
and Exchange Commission's
spreads,

under

too thin,
the outcome of bidding for sev¬
competitive

eral

rule,

utility

.failed

loans

this

the

"fire¬

which

had

many

an¬

ticipated.
Rather the

keen

October

competition

ever

and

was

bankers

ap¬

more
concerned ' with
""capturing" the bonds than with
injecting some of their realistic

peared

views into their calculations. This

successful

The

bidders

for

®uquesne Light's $75,000,000 of
'30-year first mortgage bonds to
outstanding obligations,

^refund

due

issue

negotiated
shares
ferred

open

market

with

offering

of
199,101
convertible pre¬

4.20%

stock

American

Brake

Shoe Co. slated for market

the

first.
Consolidated Edison Co.

Rounding out of its capital re¬
financing, by reducing and re¬
placing present preferred stock
and
raising of funds, to defray
part of the cost of additions and

improvements

the

provided for in

Consolidated

Edison

Co.

which

took

the

issue of 30-year

first mortgage bonds, paid 101.for

offered

2%%
today

coupon

102

and reto yield

2.77%.

amount

new

with
of

au¬

preferred stock

$57,382,635

convertible

face

deben¬

given "rights" to subscribe for the
debentures in the ratio of $5
new issue for each common

share held.

Insurance

Firms

Seek

Funds

the running for additional capital
the

over

month

£long and in view of the slight
hardening in the underlying gov¬
ernment market, the general sit¬

Glens Falls Insurance Co. has

into registration covering

gone
a

projected

offered

the

ratio

"flux" at the moment,

for

each

the

150,000

of
10

shareholders

three
held

new

early in" Oc¬

tober.

Bidding Next Week

£• Bankers will have

issue

shares of $5 par capital stock, to

uation is regarded as in a state of

oppor¬

may

r-.

issue $7,500,000 bonds

Probable bidders: Halsey, Stuart & Co.
Weld & Co. and Kidder, Peabody & Co.

Inc.; White,
(jointly).
•

company

future.

near

Vacuum

Foods Corp.

were advised that
company is con¬
sidering refinancing plans which will solve its working
capital problem.
A committee has been appointed to
a

program which will be submitted to stock¬

subsequent special meeting.

provides

an assurance to

lic of the execution of

the pub¬

its orders

in strict

compliance with the rules
Exchange.
An operation of great value to

of the
*

the

exchange in any security
be known to
members
through our quotation system.

may

tion

where

center

attendants

stantly show

the

market.

current

mav

in¬

board

master

Members

time call the center
learn, the immediate market.
It*will *be readily perceived what
an advantage this is in enabling a
member to give instant informa¬
tion to an inquiring customer.
I feel sure that your visit to the
trading floor of the Exchange
later today will help to clarify in
your minds the procedures which.
any

and

have

endeavored

remarks.

outline

Any unsubscribed shares will be

(Continued from first page)
is real and that it has

profoundly
implications for all of us.

serious
The

problem

European

re¬

still lack

glass for their windows.
Everywhere along the main roads,
at
intersections,
and
especially

covery is enormously complicated.
There is a crisis in material things

massive

pill-boxes

and

ican Telephone, which at the time
is expected to total $112,000,000

and a crisis in morale.

bunkers that the Nazis built.

Lit¬

crises

in 2%% notes.

Flooi

through

his

erally, the people of Europe are
living upon the battlefields.
The destruction wrought by five

still

years

paired

-total''war

must

re¬

before there can be any
a resumption of normal

moment what it meant to have all

materials

15)

are on

all

the

to
-

then

clerk

economic
the

City of London, the heart

activity.

Think for one

bridges destroyed. Before

most

In the

the floor and his office to the ulti¬
mate customer.

there remain the

evidences of destruction

and

telephone

coast,

concrete

damage hope of

sides.

reported back
broker

spiritual
five years

the

near

by
of total
Even today, nearly 2% years
after Germany's surrender,
the

one-eighth below the des¬
ignated limit, if it was to buy, or
one-eighth above the designated
are

and

war.

Procedure

commission

underestimated the degree of

physical
wrought

Trading

Both these,

have their immediate and
their long-term aspects.
It is becoming increasingly clear
that both here and abroad every¬
one

Trading of specialists in the se¬
curities 'in which they are regis¬
tered is limited by the Securities

Two insurance companies are in
funds

per

ury
for expenditures made for
expansion and improvement and
to liquidate the debt owing Amer¬

actions
Common stockholders would be

Institutional

%s tough

Telephone, parent company.'

The projected sale will provide
funds for reimbursing the treas¬

limit if to sell. All odd-lot trans¬

tures.

two. The first in sometime.

buyers are quite
they have been right

can

place

is seeking

Consumers Power Co.'s $25,000,-

in part by advances from Ameri¬

000,000

company

together

interest,

Southwestern Gas & Electric Co.

At each
a
prospective offering of
trading post the special¬
$100,000,000 of 40-year debentures ist is required to report every
for the Pacific Telephone & Tele¬ change of quotation to our quota¬
graph Co. Like other companies
in the Bell group this one has a
large backlog-of war-delayed con¬

(Continued from page

of the

new money

•

Sept. 24 reported

volves

thority to issue and sell $175,-

new

000

re¬

supplement the supervision of the
committee
itself.
This
system

tains such buying or selling orders
until a full-lot transaction takes

The

yield 2.69%.
group

Tel.

One of the largest new money
issues
immediately
ahead,
in¬

New York.

paid a price of 100.7699 for a
%3A 70 coupon and fixed a reoffering figure of 101.229
to
The

public is one whereby, almost
instantly, the market on the floor
Pacific Tel. &

rate of

will

freight locomotives, expected to
1947, at an estimated aggregate
purchase price of $1,740,996, of which $1,392,000, or 80%
of the actual
aggregate purchase price, whichever is less,
is to be financed, > Bids will be received
up to nooii
(EST) Oct. 2 at Room 2117, 165 Broadway, New York.'

working capital.

month.

the latest program put before the
Public
Service
Commission
by

despite
the
•experienced

recent
"hangover"
in cases like
the
3Detroit Edison offering.

Electric

bidders

struction which has. been financed

new

week

produce

works"

are

Texas

29,

■

the

though

York

gage bonds,"

^hinking is' being reflected
-

its

New

Co., will open bids for
$7,000,000 of 30-year first mort¬

in their actions. v

Sept.

which

holders at

Service

have
pot yet reached the stage where

formulate

fraternity
with

•
Southern Pacific Co. (10/2)
Company requests bids for the lowest

$2,500,000 bonds, interest rate not to exceed 3Vz%. Pro¬

Telephone's last issue.

bankers evidently

■

banking

experience

be delivered in October

19 reported company considering the issuance of

will be interesting to note what
influence, if any, is exerted on

regards the pricing of

Co, and $600,000 by the Guaranty Trust Co. of New

tional sale to be dated Oct.
1,1947, the acquisition by it
from General Motors Corp. of three new
Diesel-electric
6000 h.p. four-unit road

Sorg Paper Co., Middletown, O.

be opened next Tuesday and it
TV

and Bosworth Sullivan and
Co.,
It is expected that $1,000,000 of the new
serial notes will be purchased
by the Travelers Insur¬

ceeds to retire bank debt and increase

this issue

public at $9.75

Sept. 20 stockholders

tunity of bidding for two more purchased
by
an
underwriting
utility loans next week, one of group.
them a large one, $40,000,000 of
Meantime
Springfield Fire &
35-year debentures of the New Marine Insurance
Co., plans to
England Telephone & Telegraph register 200,000 shares of
capital
Cot, subsidiary of American Tele¬ stock which, it is expected bankers
phone & Telegraph.
will
offer
publicly
late
next
Bids

one

provide hot more thaii
$1,392,000 for financing, under an agreement of condi¬

equip¬
and to
mature $300,000 annually from Oct. 15, 1948, to Oct. 15,
1962.
Bids will be received at office of Willkie, Owen,
Farr, Gallagher & Walton, 15 Broad Street, New York.
Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon
Bros. & Hutzler; Shields & Co. and associates.

increasing authorized

Reporter's

Even

( 10/6)

has issued invitations for bids to be

company

Sept.

will

stockholders

and Boettcher and Co.

apnum,

underwriters.

Our

their

ceived up to noon (EST) Oct. 6 for $4,500,000 of
ment trust certificates to be dated Oct. 15, 1947,

preferred stock (par $50) from 32,300 shares to 72,300

vestment

:
i

(EST) Oct. 10, for the lowest rate of interest at
which bidders will provide $400,000 for financing under
a
conditional sales agreement certain equipment to be
acquired from American Car & Foundry Coi 1

National Tea Co.

Despite

j
■

noon

•

■

Richmond, Fredericksburg & Potomac
RR. (10/10)
Company is inviting bids, to be submitted on br before

♦
Munising Paper Co.
Sept. 23 reported company contemplates early registra¬
tion of 50,000 shares convertible preferred (par $10) and
100,000 common shares, with Straus & Blosser and

Oct.

the

the rate

any unsubscribed shares

•

Corp.

additional shares

share at

of the additional shares is

York.

Inc.; Halsey, Stuart & Co. Ine.; The First Boston

$9.50

Denver, Colo.

Michigan-Wisconsin Pipe Line Co.
Sept. 18 at hearing before the SEC it was revealed that
American Light & Traction Co. plans to purchase $25,000,000 of common -stock of Michigan-Wisconsin to fi¬
nance construction
of. pipe line.
New company also
plans sale of $40,000,000 20-year Zxk% bonds and $7,500,000 of serial notes.
Probable underwriters: Dillon, Head

Brailsford & Co.

ance

(jointly); Glore, Forgan & Co.

new

a share if 80% or
subscribed/for by stock¬
holders, otherwise at $9.50 a share by an underwriting
group consisting of Hutchinson and Co. of
Pueblo, Colo.,
more

reported company may sell about $8,000,000
"new money" purposes. • Probable bidders:
Halsey, Stuart & Co. Inc.; Shields & Co. and White, Weld

•

& Co.

stock at

common

fha,r$..for each 15 shares held,

$1,600,000 of

for

placed privately through The' First

Issue may be

and

presently outstand¬

ing

issuance of
Probable bidders: Blyth &

stock

common

semi-annually March 1, 1948 to Sept. 1,

proposes to offer the
of common stock to the
holders of its

Boston Corp.

Indiana, Inc.
contemplating

bonds

Sept. 23 reported company has under consideration the
refunding of its $4,000,000 of bonds outstanding which
would entail the issuance of a new issue at lower interest

senal notes, due
1962.
Company

Public Service Co. of Oklahoma

Sept.

Jacksonville Terminal Co.

rate.

•,

to be offered to

company

•

equipment, and to refund its * presently outcompany proposes to issue and sell

LSe"al notes,

29,810

$15,000,000 1st mtge. bonds.
Co., Inc.; Halsey, Stuart & Co. Inc.; The First Boston
Corp.; Glore, Forgan & Co.
;

Interstate

•

portation

Electric Co.

Public Service C<k of

Sept.

gating $2,000,000 which it stated may be required to fi¬
nance the construction program until proceeds from the
proposal permanentfinancing are received.
*

Portland General

generating and distributing system

properties, to purchase additional bus passenger trans¬

the pro¬

use

Sept. 19 reported company has under consideration plans
for sale of between $6,000,000 and $7,000,0Q0 bonds. Prob^
able bidders include: Halsey, Stuart & Co. Inc.; The
First Boston Corp.; Blyth & Co., Inc.
,

to obtain capital for the

provement of

series' privately and
working capital.

new

plan to finance extensive improve¬

ments to its electric

FPC authorized the company to issue
of 4% preferred stock (par $100) and
of common stock (par $20). Sale of stock
be negotiated with Blyth & Co., Inc.,. and

Sept. 24 the
35,000 shares
100,000 shares
probably will

Sept. 22,/as part of

40,000 shares would be' designated
preferred shares 3-8% series. Company in¬

ceeds to increase

Southern Colorado Power Co.

additional

the

tends to sell the

(1245)

could

rudimentary

established

all

any

the

commerce

re¬

moved

those

bridges

what-was formerly the finan¬ •had to be repaired or replaced. To
cial center of the whole world is add to the difficulties, Europe has
of

still

ble,

vast, flattened

area

of rub¬

been

afflicted

this

year

with

where

the purple fireweed Winter of unprecedented severity
blooms among the crumbled bricks and a Summer marked
by the
and mortar.
In Rotterdam, Hol¬ worst drought. in many decades.
land's great seaport and commer¬ The sheer physical problem of re¬
cial center, you can still look
right covery from the destruction and
through the middle of the city dislocation of war is enormous.
without anything to obstruct the
Beyond this, it is gradually be¬
view of the countryside beyond coming apparent that
sthe longsave, here and there, a stump of term
problem of restoring eco¬
ruined masonry. Berlin is only a nomic stability to Western Europe
ghost city whose people live in reaches even deeper than the rav¬
cellars and in the shattered wreck¬ ages of the Second World War.

Exchange
Act
and
is
strictly,
regulated by a rigid set of rules age.
of the Exchange to insure the best
Throughout the liberated coun¬
tries farmers till their fields be¬
possible service to the public.

Europe is, in fact, suffering from
the effects of two World Wars and
the

depressed years that inter¬
Europe is facing the ne¬
of adjusting to a world

vened.

Supervision of Floor Trading

side the roofless ruins of their old
stone barns.
Here and there the

Operations upon the floor of all
members are supervised and regu¬

twisted wrecks of Tiger tanks still
lie in fields and along hedgerows

that has greatly altered in the
period covered by those;two World

cessity

;
• .'t:
'
where the tide Wars.
The position of Great Britain
Hardly a town
Committee on Transactions. This seemsti to^ have escaped without illustrates, the. profound changes
that have taken place. During the
committee is assisted by the De¬ some wxecked homes.
-Even in the-great cities many 19th century Great Britain rose to
partment of Stock Transactions; a
(Continued on page 46)
group of employees trained to buildings, otherwise - undamaged,

lated by a

to mark the places

change

of;dtattlei passed.

committee of the Ex¬
known- nas the General

».

■

(1246)
back
Thus

Crisis

The European

the

Thursday, September 25,1947

FINANCIAL CHRONICLE

THE COMMERCIAL 4
46

riches

world.

lands.

many

Other

raw

material

and

food, producing countries are seek¬
ing more and more to develop

situated, Great Britain was
to maintain at a relatively

perate effort, nights of terror and
danger and the long dreary time

of scanty food, shabby clothes and
all only work, work, work, with noth¬
nations trade is throttled by a ing to show for it. Nothing, that is,
(Continued from page 45)
material producing nations.
Her ported by her own soil.
spirit of nationalism and the de¬ except a victory which has thus
a position of unquestioned primacy
sire for self-sufficiency. The ties far failed to bring the freedom
huge business in; shipping,, bankr
in the world. She was the leading
In the First World War Britain
of empire h^tve been loosened and from want and freedom from fear
ing and insurance brought in a
industrial
nation,
the
world's
lost almost the entire manhood of
share of profits from the com¬
in some cases broken. In such a that the common man was prom¬
one
whole generation. - She lost
banker; her navy ruled the seas
merce
of many other countries.
,
•
world there is a very real question ised.
and the sun never set upon her
her primacy as the world's banker.
In France there is a sense of
The income from her world-wide
whether Britain, weakened by two
She acquired heavy external war
possessions, Britain at that time investments was very large.
world wars and a world depres¬ frustration left by years of occu¬
debts which she ultimately had to
was immensely rich, The products
Britain's adventurous sons had
sion, can survive without drastic pation, of; political division« and
confess herself unable, to meet.
of her
industry were in eager
scoured the earth and brought her
wounded national pride.
<
readjustments.....
Her
demand among the food and raw
people, for the first time,
In a broad sensj£ what is true of
Intimately associated with this
found themselves burdened with
Britain is true of Western Europe universal feeling of frustration in
onerous
and discouraging taxes
FINANCIAL NOTICE
as
a
whole,-,' although there is victory is the growing but dis¬
As an aftermath of that war Brit¬
much variation among the nations. agreeable realization that Europe
ain's pound sterling ceased to be
Western Europe ha$ a population cannot revive without Germany.
the world's foremost medium of
This is not an Offer
far larger than cah be supported Save possibly in;England there is
exchange and became an irre¬
deemable currency. Her industrial by the, food and I raw materials nothing but hatred and unforgiveTo the Holders of
produced by that area. Its past ness toward Germany in Europe,
plant became more and more anti¬
md vet it is becoming plain that
quated.
Yet Great Britain re¬ prosperity was based upon indus¬
trial supremacy which enabled il
the idea of reducing Germany to
mained a great power and it was
to exchange the products of its a
level of agrarian subsistence
(Republic of Colombia)
Britain in the end that drew a
factories for the food and raw will not work. The most impor¬
line past which Hitler could not
8% External Sinking
material it needed. But the bas;s tant single industrial region
in
go without having to fight.Dated October I, 1924, Due October 1, 1945
of that prosperity has been de
Europe,
the Ruhr, is currently
In the Second World War Brit¬
stroyed. Europe' no longer enjoys producing virtually, no-steel- and
ain
suffered
further
terrible industrial
supremacy.
The tradi¬ only half its prewar output of
losses.
The bulk of her foreign
tional sources of much of its food Coal. Europe needs the coal arid
investments
is now gone. / Her
(Republic of Colombia)
have been cut off pr diverted and steel which the Ruhr can produce
shipping has been largely de¬
increasing difficulties lie iri the and which only the Ruhr can pro¬
Power and Light Consolidation Loan
stroyed. Her debts are crushing
quickly enough. - Europe
way of the exchange of Europe's duce
and her industry is in need of
Twenty-Year External
industrial products for the food it needs to revive at least some of
large-scale rebuilding and mod¬ must have if its people are not to the old lanes of trade with Ger¬
Sinking Fund Gold Bonds
i
ernization.
Add to this; the? fact
die.
-..v
..
many in order that that country
Dated April 1st, 1927—Due April 1st, 1947
that she must devote much of her
From the standpoint of sheer may contribute to European re¬
energy to the repair of her bombNOTICE OF EXTENSION
economics, both short-term and covery instead of acting as a coridamaged towns and cities so that
drain - upon .European
long-term, the situation is cer¬ tmmncr
her people can once again have
The time within which, the Offer, dated November 15, 1944, to
v.
,
tainly grim enough, but it is fur¬ strength.
a place in which to live and work.
exchange1 the above Bonds and the appurtenant. coupons
ther complicated by psychological
Beyond the psvchological-scars
able

their

high standard of living a popula¬
tion far larger than could be sup¬

industries.

own

Among

City of Bogota

Fund Gold Bonds of 1924

Municipality of Bogota

of 1927
61/2% Secured

„

Colombia, 3%

Republic of

for
External Sinking Fund Dollar Bonds,

1, 1970, may be accepted
October 1, 1947 to October 1,1948.
due October

Today more than ever it is true
Britain must export or die.
Yet the world has greatly changed

is hereby extended from

the

application

Copies of the Offer , may. be obtained upon
to
Exchange Agent, The National City Bank of New York, Corporate
Trust Department, 2ft Exchange Place, New York 15, N. Y. ;
Mayor
,„

September 25,1917

ofMoiricipitfity of Bogota

REDEMPTION NOTICE

NOTICE. OF

REDEMPTION

sustaining

DETROIT EDISON CO.
Series F, 4%,

due October 1, 1965

by the war, there is the con¬
tinuing influence of the Great De-

'eft

toward

Socialism which it evoked.

Obviously from the; standpoint of
simnle economics the situation in
which Western Europe finds itself

people from their homes one night should have brought them the
and
shot
them."
Everywhere right pot to harder work and a
there are reminders of fear and lower standard of living but to,
hate
In

death.

and

less ".work

Great Britain one can

the weariness left by years

sense

and a. more

life.

To the

'
'

■

Notice

and will

THE
'

DETROIT

VBy John L.

Certificate of Incorporation and

EDISON CO.
~

unpaid dividends thereon

share.

certificates therefor at the office of
Redemption Agent, No. - 165
New-York, $17.50 per share, plus, accrued and
to the date fixed for redemption, to wit, 16% £

Trust Company,

Broadway, New York 15,
per

1947,
called

the surrender of

Chemical Bank and

^ -

■■

provisions of; its amended

Manufacturing Company,

resolutions of its Board of Directors, has elected to redeem
redeem, on October 15, 1947, all of the outstanding shares of its

for redemption, upon

presented for

MacLeod, Treasurer.

that Wentworth

•»

provided in the amended Certificate of Incorporation and the certifi¬
cates for said shares, holders of the Convertible Preferred Stock called for
redemption may, at their option, at any time up to the close of business
on the tenth day prior to the date fixed for redemption,
convert their
shares into shares of Common Stock of Wentworth Manufacturing Com¬
As

the rate of two shares of
Convertible Preferred Stock, upon

pany at

such Common

Stock for each share of

surrender of certificates for such shares
Company (Corporate Trust Depart¬
ment), 165 Broadway, New York 15, New York, transfer agent for the
stock, on or before the close of business on October 6, 1947.
Wentworth Manufacturing Company will before the date of redemp¬
tion deposit in trust for such redemption, with Chemical Bank and
Trust Company all funds necessary for such redemption. As provided
in the amended Certificate of Incorporation, except as to (i) the above
mentioned right of conversion before the close of business on October 6,
1947, and (ii) the right to receive from Chemical Bank and Trust
Company, from the funds, so deposited in trust, the redemption price for
said shares, without interest, the shares called for redemption'as aforesaid
will after such deposit.no longer be deemed outstanding. The right;to
to

Chemical

Bank and Trust

Dated, September 17, 1947
NOTICE OF

PRIOR PAYMfNT

has instructed Bankers Trust
and after September 17, 1947 the principal
of and premium and accrued interest to November 17, 1947
on any of said Bonds which are presented at the Corporate
Trust Department of Bankers Trust Company, 16 Wall Street,
New York City. All coupons maturing after October 1, 1947
should be attached to the Bonds.
^ ,
The Detroit Edison Company

Company to pay on

been made

and

bondholders, arrangements have
by Bankers Trust Company so that if said bonds

convenience to the

coupons

are

National Bank of

presented at the Principal Office of
Detroit* 600 Woodward Avenue, Detroit

the Principal Office of The Manu¬
facturers National Bank of Detroit, 151 West Fort Street,
Detroit 31, Michigan, the holder thereof will receive
payment in Detroit upon the terms above stated.

and after. October 15,
will cease and terminate.
The books for the transfer of shares of the outstanding; Convertible
Preferred Stock called for redemption as aforesaid will be permanently
closed at the close of business on the last business day preceding said

receive dividends thereon

1947 and all rights

will cease; to accrue from

of the holders of said shares

redemption date.

■

By order of the Board

26, Michigan* or at

WENTWORTH
:

Fall

River, Massachusetts,

MANUFACTURING COMPANY

By Alvin A. Sopkin,

war

there

1939

•

President

would work less
)
came to Engjarrd

were

able-bodied

old m that country
who had never had a job. Fear of
unemployment had become deeply
ngrained in the working people
and a philosophy of go Slow and
stretch out the work iri order to
make' as many jobs as possible was
fixed; in the mind; of labor.

men

40 years

repercussions

The

Britain. of
with

its

Great

unon

Deal,
curtailed
shorter hours and re¬
New

own

our

emphasis upon

production,
distribution of purchasing power,

strengthen this
• During
the war opinion seems * to have
crystallized among the majority
of the British people. They wanted
social security from the cradle to
the grave, large-scale public hous¬
ing; nationalization of key, indus¬
tries, a five-day week, more lei¬
sure, better living, better educa¬
tion
for
their children, better
working v conditions;: Moreover,
they, were bitter against a Tory
party that was tarred with the
brush of appeasement, and which
had been in office during the crit¬
only

served

point of view

ical

years

power

iri,Britain.

when

Hitler

and when, a war

rose

that might

prevented was allowed
become;inevitable. So the Brit¬

have been

people elected a Socialist gov¬
but the dreams and
promises. have, turned to bitter¬
ness.
Less work still stubbornly

ish

ernment;

produces less

of Directors

September 5, 1947.

have more;

and

When the

Accordingly, there will become due and payable on October 15,
each share of the Convertible Preferred Stock of the Company

case registered bonds are presented and payment to other than
registered holder is desired the transfer tax due must be paid
and the bonds must be assigned in blank or accompanied by prop¬

given

hereby

wicked bankers,

•

Convertible Preferred Stock.

the

of assignment in blank.

Stock

pursuant to

presented for redemption should have attached all coupons
October 1, 1947. The October 1, 1947, coupons

erly executed instruments

pursuant to the

maturing after

be detached and

Company

They have promised
Socialism, poverty and

hardship
would disappear, • the:
danger of war would vanish and
everyone,
except
possiblythe *

appertaining to such bonds should
collection in the usual manner.

' '

Convertible Preferred

November 17,1947, there will become and be due
and payable upon each bond of such Series F, upon presentation with
all coupons maturing subsequent to October 1, 1947, at the principal
office of the Trustee, Bankers Trust Company, Corporate Trust
Department, 16 Wall Street, New York 15, N. Y., the principal
amount thereof, together with accrued interest to November 17,
1947, and a premium of 5% of the principal amount of each such
bond. From and after November 17, 1947, interest on such bonds
will cease to accrue, the coupons for interest maturing subsequent to
that date will be void and such bonds and coupons will cease to be
entitled to the benefit of the lien of said Mortgage and Deed of Trust.
Bonds

;

Wentworth Manufacturing

and will redeem add pay in lawful money of the United States
of America, on November 17, 1947, all of its General and Refunding
Mortgage Bonds, Series f, issued and outstanding thereunder.

pay,

Accordingly,

Holders of

that, under

) *

REDEMPTION

the shortcomings of

due to

capitalism.
NOTICE OF

beep

telling their followers that most
of the evils of the modern world
were

GIVEN that, pursuant to the provisions of
and Deed of Trust of The Detroit Edison Company,
dated as of October 1,-1924, and of the Indenture dated as or Sep¬
tember 25, 1935, supplemental thereto, to Bankers Trust Company,
as Trustee, The Detroit Edison Company has elected to redeem and

Great Britain s*

Socialist labor leaders,have

NOTICE IS HEREBY

abundant

-•

.....

For manv years

of des-

REDEMPTION NOTICE

the Mortgage

world-wide trertd

and the

Dress ion

fect, "Here a hero died for his today is one that calls for harder
country," or perhaps it will merely work than ever before,/ and yet,
be left to some passerby to say, quite understandably, great masses
"Here
the
Gestapo took some of the people feel that victory

The United

Refunding Mortgage Bonds,

Generaf and

spat¬

Perhaps there will be a
little tablet nearby saying, in ef¬

tered.

industrial nation in the

leading

the

have

bullets

where

show

by all odds the

autarchy.

States has become

scars

plainly.

Cpntinept, in the city streets the
pock-marked walls of building?

the 19th century
when Britain developed the pat¬
tern of her industrial economy.
Eastern Europe, from which West¬
ern
Europe
formerly
received
much of its foodstuff, is now cut
off behind the iron curtain. The
whole area under the influence
of
Soviet Russia is withdrawn
from the channels of normal trade
and is seeking to develop a self-

(.Republic of Columbia)

show

the-war

since the days of

Fernando Mazuera

factors/' The

social

and

that

coal.

;

average Briton
still does.not graso the gravity of
Unhappily

the

his"country's position, nor has

yet been

jit

made clear to him by
There is endless

Britain's leaders.

THE

^Volume 166 ^Number 4632
talk v of

the

shortage,"

"dollar

implied suggestion being that this
is due
to
American parsimony.
There is much brave talk about

COMMERCIAL & FINANCIAL CHRONICLE

delusion to think we can prevent

unlimited - or
It should not be

either

tional.

the. Spread
Cft=-Communism by
making loans vto^Soc'alist govern-}
ments; that tip, b.llions already

their internal
affairs, fibut - we should certainly

satisfactory plans and progress in
bringing about expanded produc¬
tion
and
in
restoring financial
stability. Our people will require,
and-rightly, so, that their aid to
the, nations of Europe achieve its
purpose and they will expect these
cult and
py position and nations to undertake such specific
all respects be¬ programs of self-help and reform
Europe' is not/$
ll.
Yet it is not as will bring success to the whole
having very
crucial enterprise.; For our own
t has some
Europe alone
diffi-j
cult- decisionsf "
make. We. alsoj part we; shall need to show the
qualities .that made our nation
must choose between
.

What is

efFciency,
to

| face

work, increased
greater willingness

facts no: matter how d's-

rvreeabie.

and

also

fact

one's belt and reduring one's already ««carit food
ration, hoWever nraiseworthv, win
that pulling in

not

additional lump of
; There

well,

produce

themselves

whq argue that, in

here,

■

in ? Eurpne.

irren

are

coal.! /,.

one

thd light of all these adverse fac¬
tors Hworild, have been,: better if
the United States had limited its
postwar a:d and that it will be
better if all future aid is denied,

stripped to its essentials the basic
argument of ' these, men is this;
That the fundamental problem of

Europe is poverty,; that poverty
n only be cured by hard work,
that men will/only work hard if
the

of hunger

la«h

is laid upon

show

ask irt broad terms that they

alternatives]
attractive!

great: Courage and

neither of which is very

common sense

and the willingness to lend a help¬

the

.hand,

one

help

can

comrades in

.starvation;

literal

shall

cer¬

tainly face, cpiiditions of financial
crisis
and -economic; depression
of

critical

wide ;and

over

world;) "we

the

section

the

risk

shall

It. is ? not

too much to

plunging of all Europe into such
chaos and misery as may lead to

war

freedom

human

arms

that

say

preserve

the

if
Britain;

world,

pull back from
the rest of Western

now

* par

tion

the prospectus states,' this is
the' first public offering of securi¬
ties of a greyhound, racing busi¬

offered -$58,880
sold for

shares.

the account of the

pany-and

the

balance,

com¬

64,360

are being sold for the ac¬
count. of four stockholders.
The

will

current

pay

the proceeds: to

use

bank

loans

working capital.

A quarterly

Bonner, Inc., is mak¬
a/public offering of voting

no par common

outstanding preferred Stock of

130,000 shares

the Company, payable October

Stock of Revere

Racing Association, Inc.;^owner and
operator of a greyhound racing

track

and park at1 Revere, Mass.
certificates, which are priced
:$5.75 each, are - being offered

behalf of certain

15, l t947,:tto, stockholders of
at the close of business

record

October 2, .1947.

to barter free¬

When the choice is stripped to

MORRIS H. WRIGHT,

Treasurer
September 16, ,1947
Cleveland; Ohio

stockholders

DIVIDEND NOTICES
AMERICAN

MANUFACTURING

Noble
r

The
of

25c

1947.

West

COMPANY

Streets

New York
Directors" of
the

Company

the

divi-

books

will

ROBERT B.

American

declared

1947
to
Stockholders
business September

Transfer

has

share on the Common Stock,

per

payable ? October
Record

and

Brooklyn 22,

Board

Manufacturing
dend

dividend of $1.25

share has been ^declared by
the/Board of ; Direaors on the
per

Bonner &

dom for the promise of security
even* though-the promise is false.

com¬

Revere Racing Stock Issue

for which we

haves, been known

the

Bonner & Bonner Market

Europe, we may see that freedom

fought strangled be¬
fore our eyes. It must not be fori
gotten i than when men are faced
with / hunger % and privation .they

DIVIDEND NOTICES

for

and

officers

in this country.
The pros¬
pectus adds,. however, that there
are
about .20 stocks of English
greyhound racing companies listed
on the London Stock
Exchange.

company

the

ness

;being

are

pany,

The

/According tos the best informa¬

shares
value $1,

Acme;Electric Corp.,lis being of¬
fered at $5 per, share, by Herrick,
Waddell & Co., Inc.
Of the shares

France/and

its ^essentials,. there is only, one
political andf social upheaval of
decision. In a world still reeling
«Those who. reason this way are, lasting significance. We would be
and .gasping
from a five year
of course, men< of extremely con" foolish to take] such a risk in the
struggle to break the stranglehold
servative
social
and
economic world as it exisjts today. We must

their backs.

-stock,

to the company.

123,246

ing

;

haying fought

struggle - alone/ In this case we
will- certainly 06ndemn large num-j
our

common

trust certificates for

of the drawbacks I have al¬
ready mentioned. .On the other
hand, we can] leave Europe to

issue

themselves.

many

bers

proceeds from the sale will

accrue,

Acme Electric Common

ing hand, to those who will help

through the difficult; pe-j
riod of recovery and re-adjust¬
ment .which it faces. This involves

Europe

and

Derrick, Waddell Offers

how they must run

"pulling in our belts" spent have ^Joduced only . den
mands for mor| billions; and that
and going on shorter rations and
in the end wd shall have little
giving up what few pleasures re¬
much
main in the dreary life of the gratitude * but$ probably
abuse.
,/■
*•.
average Englishman today,
|
There is a,|§pod deal of dis-i
Actually, of course, there is no
agreeable
in these ,argu-;
shortage of dollars. : There is a
great plethora, of / dollars in the ments, but it Lis not the whole
world. Whaf is short is goods and truth.; Europe^ in a most; diffi
reeded

uncondi¬

latej. allies

to attempt»totell our

the rreed for

the nroductioji of 'goods.1.

necessary

remain

BROWN,

SOUTHERN CALIFORNIA

18,

open.

Treasurer.

EDISON COMPANY

our

attitude of a prudent banker .who

The Com¬
argument is that* American
aid means enslavement to the dolJar and the exploitation of Europe

country might well "take" the

consciously^ making a i rescue
loart. Such a Ipan is not likely , to

now

/abandon

helped to

from

one

ELEVATOR

victims

dicta¬

COMPANY

A dividend

DIVIDEND NOTICES

the

There, are .other men who argue
^gainst anv further.aid to Europe
fj on ,such grounds as the following•
•"That we cannot afford'tor feed the

iCQurage

October 6,

European countries to de¬

Companies

DECLARATION i OFSDIVIDENDS

paid; that by "financing large exgovernment

September," 1947. • *
\
Transfer Books and'Register of Members will be closed

The
20th

dividends

the London-

Park Place,

Financial

case

Chronicle;

payable .<•

each

from

case

.material

any

1947

1947.

to be

The
.

Companies, will ^deduct the ;Non-resident Shareholders' Tax'of
payable to Shareholders .wbose addresses in the Share Registers

the Union.

"■'V.'

Ltd..

Philip Morris & Co.

★

The

Dividends

declared

were

of Directors on

Board

■•$1.00

September

Street

with

man

clientele.

co¬

operation vplus. excellent leads. Libera^
commission
basis.; :Box W 918/Com-;
niOrcial &' Financial Chronicle, 25 Park
Place,
!f

■

New York 8, N. Y.

'L 'I

i East'
,

...

•,

per

100

■

able

r
v

Regular Quarterly Dividend
Dollar

of One

.1/6

..,

Lydenburg Gold Farms Company, Limited..,*
New

|Jnited......,

Mines,

New Witwatersftnd

Gold

.......,

Exploration Co., Ltd.

ment

Mines, Ltd..

..........

•.

,10/4Hd.

9d.

•15

There

$5.00 Par Value Common Stock

and

Rand

2/6

Exploration
2

,.25

Company, t

"'V.:

TRADER
Wishes
execute

position
orders

to
in

WesternAreal

give service

and

box M81, Commercial &
25 Parkr Place,
*York 8, N. Y.

Amalgamated -African -Hotels,

M':'

and

CateriAe)

2/6
.

York.

Pursuant to

<TV-

9d.

of. Common. Stock

Certificate*

Certificates

for mew

value of $5'

New

par,

issued therefore

Holders, of-

have been

Certificates Tor shares

Ltd^ (Theatres

JCinemas,
L

and Entertainments).,

<&., Ltd. (Land and Estate).....,

Kupcr &

Radford Adlibtgton Holdings,- S.A.,i Ltd.
'i*

YOUNG MAN

and

ing
S.A.

each

therefore; urged to exchange
such .Certificates, for Certificates for"
f

Potrsh

♦.

are,

night course in ?

accounting, with some book*»

keeping andoffice experience,
seeks position
■

firm.

%>ary

NS 911,

The

Pharmaceutical,

South

for each share of Common Stock of the

Fertilizer

par

value of-, $10.

.-.

VL. a HANSON, Treasurer.

Chemicals

African

THE

10^d

etc.)

.....;......

Alkali, Ltd.

6d.

(Tanning and

and

i-ii'J

6d.

cial Chronicle, 25

NEW
.

8, N. Y.

■'

UNION

CQLDF1ELDS,

_
.

•

LIMITED,

Transfer Secretaries.

; per F. J. M. VAN ZYL.

Registered Office:. New Clewer< House,. 3l Simmonds Street
(P.O. Box 8653), Johannesburg.
-

CITY OF

NEW YORK

payable November 1, 1947 to holders of

.the close of business October 6,

payment

York has declared

the 7,400,000 shares of the. capital

record at

1947.

The transfer books will not be

By- Order of the. Boards,

iBox;

Park Place,

dividend of 40i per share on

stock of the Bank,

South Africa, Ltd.

Ranching)..,

with securities j'

opportunity.

NATIONAL BANK-OF-THE

The Chase National Bank of the City of New
„a

The Union Cold Storage of

CHASE

(Canvas, Textiles

Salt)
(Meat

4/-

;

17H.

Commercial & Finan4 j

'New York

Compensation second-:
to

closed in connection with the

of this dividends
THE
OF

CHASE NATIONAL, BANK
THE

CITY

OF"NEW YORK

W. H. Moorhead

Vice President and Cashier
29th August, 1947.

new Common Stock of the par value ol
$5. per share, on the basis Of two shares
of new Common Stock; $5 par value,''

4j/d

.(Print*

Stationery)

General {Industries, Ltd.

and

Completing

of-,

^Common Stack otthe.par value of $10

Common Stock, of Lhe

'3d.

resolution adopted at

each- shall

the

Mining and Manufacturing

Phosphate
•

share ,or. shares

mailed

Robert P. Resch

;

1945, no Certificate representing a

the par value of $10 each is recognized,>

•
•

•

the

for any purpose,, until surrendered, and;

■

rM-

been. declared

Common

business

Electrlc/ Corporation . of .South Africa,
Ltd. (Electifc and Malleable Iron)..,.,....,

First

clese

;

also

has

of business on September 30. 1947.

10,

Vice President and Treasurer

(Hotels

Ltd.

.................

the

will

Checks

INDUSTRIES

Financial i Chronicle,

'New

record

of/

the Stockholders" Meeting held on July

payable Sep¬
tember 30, 1947 to stockholders of

over-the-counter

securities,
^

are

Bankers Trust Company of

dividends

pay-if-^

holders

October 15. 1947 to, holders bf
Stock' of -record at the close

,.able

rRegular Quarterly Dividend of
Forty Cents (40c); per, share. :
Both

1947'»to

quarterly dividend,of. 37'At-per share
t.on .the Common Stpck,. ($5 Par), pay-

September 19, 1947.

r'7'/j
-I- 5 ' Bonus

SITUATIONS WANTED
West

3d.
'3d.

Corporation, Ltd.,.,.., «

]. Roodcrand Mattt Reef

Somerset, Inv.ev

,, ,,

November

Preferred Stock of the respective series'
of record at the closO of business on
Ootober 15, 1947.

($1.00) /per share.

,25

.30

Rate per

Cent.

;........

Rand GaldS Coal and Estate, Co., Xtd.....

Eastern Transygal .Consolidated' Mines, Xtd.

lar nuarterly dividend of 90c per share?
on
the
Cumulative -Preferred
Stock,!

;

Stock

Preferred

Cumulative

per

;3-60%..Series have beetL.declared

Rate

v/No.

Ltd., inc.?

dividend

quarterly

regular

share on the Cumulative Pre-«. s
ferred Stock. 4%. Series* and the regu-j t$

the

J, 1947, as follows;

22nd Consecutive

.^Dividend

: 20 North Wacker Drive, Chicago

—

'
,

cent.

New York, N. Y.b
September 18, 7947:

General Offices

outside

are

services of

Secretary

PHILIP MORRIS*/

QJalifields,

New Union;

;

per

from, dividends,

use

o. v SHOWERS

September-19, 1947 >

CORPORATION

calculated at, the

currency

dwpatched from the Xondra .Office: to persons resident in Great Britain

—ORDINARY

can

4.48% Convertible Series, pay*
able October 31; 1947, to stock¬
holders of record on October 5,

MINERALS & CHEMICAL

London Office).

Irelan<j| will be subject to a deduction of United Kingdom Income Tax at .rates
arrived
atJafter aUowing for relief (if any) in respect of Dominion Taxes.

Company
(Each'ira which is, incorporated
in thev jlnion of * South Africa)

uniisteOirm

Cumulative Preference Stock

C. A.,Sanford, Treasurer

South African and'British
such material difference the

between

Should there be

vpI pay on. the. basis of; the, equivalent British,
exchhnge| ruling on: that date. <
v

ime

Live

the

N. Y. 8.

SECURITIES SALESMAN

of the; Union of South Africa and
7th November, 1947, from the Head Office and

of those Companies which have

..Warrants

^commission-i-basis, complete, facilities,
Box "G 924,

rate

Salary and liberal

with clientele.

man

currency

Northern

trader-sales¬

experienced

the

London Office

over-the-counter

established

be regarded by ihe .Boards
the 7th November,* 1947.

currencies

wants

York, September 17, 1947.

from the London Office >. (of those Companies v.which»have a
,Office>/||rill be paid in British, currency at. par provided ithere. is no difference

that may

TRADER-SALESMAN
Long

Office (in the

Dividends

London

HELP-WANTED

firm

declared

are

Warrants in pairment wilLbe posted

per

Sfeptember^ 1947, to-4th October, 1947,;,both days inclusive.
The

it js

inflation here at home; that

cents

|.eBeby

19th

loans

V we are dangerously adding to our
•

New

payable Octo-

Octobers, 1947

Not'ce is
given that Dividends have,been declared payable to shareholders
registered in the. books of the undermentioned Companies at the close of business on the
,

"really gifts that will never be rethrough

Checks will be mailed.
:

*ithey must Ultimately make; that
pur so-called loans to Europe ar£

ports

value Common; Stock

record at the close, of business

record

of>50^. per share

au-

/. ber 51,1947, to stockholders of

ber 29, 1947, to stockholders of

afer/the fundamentals adjustments

par

<■

has/been declared, payable OctO'

:world; that our aid will onlv- en-

;

of the
following quarterly (dividends:
571/2 cents per share on the
Common Stock,

Common Dividend No. 160

another.

:
;l

thorized the payment

;

torship to allow them to fall help¬
less

The Board of Directors has

im¬

the predatory economic
perialists of Wall Street.

Convertible Dividend

O TI S

We cannot

those

rescue

Cumulotivo Prtforonco

strong,

whom

munist

recovery
in giving

the

this help, it seems to me,

posed to American aid.

are

one

help

tyranny we

/orderly
in Western Europe. Bu( freedom-loving nation.

bringj^about

Curiously
enough
tbev
find themselves,ip agreement with
the Communists, who also are op-

•v'ews.

Dividend Ho- 151

Common

4r»-'

THE

(1248)

COMMERCIAL

FINANCIAL

CHRONICLE

Thursday, September 25, 1947
•

Commerce

from the Nation's

maneuvering for
Don't bank

mise.

V/|| a

promise

JL Ull

/I fHI

Capital

*•'

■

com¬

any

utility .»people

the

—

•

compro¬

BUSINESS BUZZ

Rizley bill denying FPC control
over end production and distrib¬
ution of natural gas. FPC knows
that measure can't be blocked,

Washington...,
Behind-the-Scene Interpretations

the

Committee

have the votes, are in no mood
to

dicker.

Utilities

;l;Pon't be fooled into believing the Marshall Plan is to be based
op America's ability to pay. That's nonsense. In the end, the Ad¬
ministration will fix some arbitrary figure and ask Congress to OK
it. The lawmakers will demur—may slice off a few billion. They'll
hedge and delay.
But ultimately the President will be told to go
:

ahead

and

divvy
$

=>'

ability to pay! By direction of
the White House, and with com¬

Just isn't any scientific formula
7for weighing. out. ho^mtieh steel,

the committee members.

much

Trade and government

from; the

extracted

(But you can

jtion

—

rely

into

allocations

Marshall

legis¬
.'7 ?'

7 that

we're skating

—

spilled

chilly

into the

!depths.

Ides"
yanks

stack of

desk

his

"Chron-

1920

this

startling
similarity. He concludes: the set¬
back will (1) hit us sooner, (2)
hurt us more, (3) leave us less
tranquil than the experts con¬

today. There's

cede.

'.ir'f /7_/■V.'_I',:-;

■

■"/7

Don't be fooled by the newest

consumers

don't

less

eat

anticipate

meat,

populace

the

will go vegetarian.

■

Actually, food prices will conto spiral higher, then wil
spiral lower, than prices for other
goods. It's an historical fact that
fluctuations in food
prices are
characteristically greater, at both
wholesale
and
retail, than for

tinue

;
;

;

most

other

commodities.

items

manufactured

food

7 Quires
:

prices
if.

The

Taft

economic

re-

Committee

following

the

presents

pattern

the

income

changes from 1940 to 1946: net
income of unincorporated enter¬

prises—all industries up 186 %,
manufacturing
industries
up
,

313%, food and kindred prod¬
profits

ucts up 450%; corporate

before

taxes—all

industries

111%, manufacturing industries
up 95%, food and kindred prod¬
ucts up 212%. They make no ef¬
fort to project
the plunge
during

the

inevitable

adjustment.

by FPC,

has
may

been

ad-f

ultimately

One fact is certain:

authority than, it

with
/'How

flaunts.

now

was

your

speech, dear?"

* :

Platinum

Justice

LEEekfeMtJokii

Increasing in Popularity As Hedge

r ■

l'/ •*.'

Miller-Tydings fair trade act, the Commerce
Department is offering to tell
small enterprise—for 15 cents-

Trade

both gunning for the

prices under that

the

vow

FTC

and

Justice

coun¬

Miller-Tydings

cents

ment Printing

Govern¬

the

Office—explaining

to negotiate minimum price
contracts and "How to Make Con¬

how

Stick." /"V"

tracts

ment controls

expire

They

continued

the

Bache

grain exports.

March 31, will
despite farm op¬

that
per¬

most

platinum
merely

practice, export controls have
rising grain prices but
little.
During fiscal 1946, corn
exports Were limited to 3.5% 6;'
production but corn price jumped
28%.
Oat
exports totaled only
1.5% of production as against; a
15% price hike. With rye ship¬
ments restricted to 3% of produc-;
tion, the rye price rose 21%. The
relationship between wheat ex¬
ports and price was more ap¬
parent, with exports totaling 34%
of production and prices rising
47%. '
::
•
>77

elry trade, Mr.
says,

wide

Philadelphia

future
,

that

associated with their

office.

Philadelphia

Formerly with the Phila¬

delphia office of Brown Brothers

recently JEckfeldt served

Mrv

Captain in the

and

the

both

Europe.

Old Reorganization

World

been

production of platinum is
about 400,000 ounces a year, in¬
cluding an estimated minimum
100,000 ounces produced in Russia.

uses

have

Louis

Irving

for

ical and dental fields.

"The

Since the

lifting; of government
price controls, platinum

has' found its widest" exploitation
in the jewelry trade.
Last year,

purchases of platinum rnetals by
that

reported

and Britain.
Such a development is looked on
with interest and with some favor
in financial circles.

apart

and

announce

Army in World War II dn Africa

from the jew¬

use

the

stockpile .that
may .t Ulti¬
mately" compete with gold stocks

by the
jewelry trade.

Louis

of ',!■

Exchange,

&"Co..

Harriman & Co. for 11 years.

num

used

Stock

Stroud

that Russians ibuildi^g up ;a plati¬

been the premetal

platinum in the electrical, chem¬
In

members

South

Theodore E. Eckfeldt has become

It- has ^been

cious

found

position.:

Co.,

firm

123

content.

declares

has

Inc.,

coining
the
metal.
Seventeen
years later, in 184&, coinage was
stopped because platinum's value
had risen to a point where it
paid to export it for the metal

Louis,

sons

PHILADELPHIA, PA.—The in.
vestment

dollar.

Irving

Quite

in its next regular
to extend Govern¬

Congress
session

v..

Stroud & Co. Staff

Department
Commission

industry amounted to 204,901
50% of the total

ounces, almost
U. S. sales.

towards

platinum,"
Mr. Louis declares, "is developing
right before our eyes, as more and
more investors come to appreciate
platinum's qualities and wei§
them first against the decrees pro¬
hibiting public holding of gold and
second, against the high cost of
storing silver."
.77.
move

Domestic & Foreign
Securities
New Issues

M. S.WIEN & Co.
ESTABLISHED 1919

recently, because of its
Geo. B. Chipman Dead
extreme hardness,
platinum ' has
George Bowie Chipman, one of
beep ? mentioned ,in conjunction
with uranium handling; and in the ; Washington ; managers
for
radar devices. 'v
Laidalw & Co., members of the
*
>
-

Members N.
40

•',/

,$ >

Security Dealers A^n.

Exchange PL, N. Y. 5

HA. 2-8780

Teletype N. Y. 1-1307 ;

'; v7 -77

.■

■'

The

Commerce

!' ■■■

Department

—

In the field of finance
earned itself

platinum

place early in the

New

died

York Stock' Exchange,

at his home after a

year's illness

is claiming the 100% last
century when Russia began at the age of 68; 7 - 7
requirement imposed
January, 1946 on stock trans¬
actions
minimized
that
year's
Teletype—NY 1-971
HAnover 2-0050
growth in private... noncorporate
commercial, financial and con¬
sumer
debt. Such
Firm Trading Markets
indebtedness!
climbed
$400 million in 1946,
would have mounted much higher
—

cash margin

;

Seaboard Fruit

report

prohibition against

Growing interest in platinum was reported on Wall Street and
inflation-minded investors are taking another look at that metal.
Actually, investors, brokerage houses and banks have been
noting the growing interest in platinum for months, and trade circles
are agreed now that the metal has been found that, like gold, it will
provide a long-term hedge against the decreasing purchasing power

Stabilization officially

consequently

the

Federal

and

longer period.

-'7

retarded

meatless day crusade. The motto
makers themselves don't expect

chartist

out editorials and news
stories for comparison with those

i-'we read

hobble prices.
'

letin—15

7;-/! 777'" "7 ) ■'

From
:

the perimeter of

downward spiral into ^gloomy

;

hearings

compromise limiting

accepted.

less

complementing
state laws
help
keep
prices
high.
With
debonair disregard, the Commerce
Department has produced a bul¬

His

the country on

Committee

FPC will emerge from 1948

and

fair record of projecting them.
current projections place

hiking the V. S. allotment but;
small
hope
this
would

selors

recession. He respects historical precedents, has

pro¬

November. DEFC people talk of

statute.

1920 postwar
?

power

probably can't be enacted

consumption

own

vanced

Kecom- ;
before an
London in I

restricting FPC

how to maintain

thin economic ice

same

will

committee

IEFC

com-

year

are

licenaing manufacturing

cocoa

.'October.

mendations

With-

J? demonstrate—by back issues of
the

the

for

position

plants generating power for their

have

FPC

working group convened j

mencing

tax-

but

will stiffen.

transactions. These

written. A

the

be done,

intrastate

their scope to a

Sept. 22 in Amsterdam to rec-;

predic-

on. one

777'/

I the "Chronicle"

that

and

loose

posals progressed through House

econ-;

ommend world-wide

I
>.,"v *, 7 7*7: 7"Y
:t\7
7 At least one time-tested goyi; ernment analyst is willing to

doubt

favored

streams and

company

Emergency Food i
curb the trend. An i

Council can

Congress won't be rushed

Willy-nilly
lation.

futures,

IEFC

Your guess right now is
valid as those peddled by the
[tipsters. v 7.,, "
t

able

International

nrs.

are

cocoa

be the
product of guesswork—guesses by
foreign nations how much they
jean extract from us, guesses by
ijthe President how much he can
extract from
Congress, and
js
by Congress how much
Marshall1 plan

less

Commerce

vexed by the boom in
j

omists

can

domination' of

First effort

them

the Miller bills redefining navig¬

yet

jolt

this year,

.fo6d^.;how::JD9tichL.ihar
*hinery we can give away without
impairing our own economy. So
Tthe

hasn't been sanctioned

committee.

thereafter opposition
"V V1
* if':.

for higher prices. They
support (1) / lessens
(2) thereby encourr
ages farm production, (3) reduces
scarcity,
(4)
minimizes
public
ridding for items in short supply.
That's a novel theory from investi¬
gators on the Republican payroll,

I have learned the hard way there

and power companies. The
in

calendars. That

increases

argue price
market risk,

Harriman and his brain workers

how

than

rather

jur¬

onto Senate and House legislative

pressure

yardstick.' His latest report —
nothing to report.
He's still
scratching his head, but not
very hopefully.
7

will

government parity price support
relieves

petent help, he's been striving
for
weeks
to
design such a
:

stuck

with the suggestion that

come

Commission

Power

bills went in last session, are now

The Taft staff men, as
a
by¬
product of their general studies,

Secretary

Harriman about measuring our

;

of gas

>>,:

Commerce

Ask

Federal

isdiction over intrastate operations

fashion.

dollars in helter-skelter

will try—and\ succeed
part—to nudge through legis¬
lation early next year curbing
in

the

absence

the

Federal

FOREIGN SECURITIES

Reserve's margin mandate. A drop
of $4.2 billion in security loans
from banks and brokers-offset

commercial

credit

merce

and

7;
*

OK'd by
sion

and

53%

say-the

analysts.

•

in« the

Susquehanna Mills
Empire Steel Corp.

All Issues

r.MI MARKS 4 CP. tea
.

•

Senate

FOREIGN SECURITIES
•

SPECIALISTS "-:v

the House last ses¬
now

Corp.

com¬

7 4

' 7 pf

General Products

ex¬

pansions of 31% in noncorporate
consumer, credit.'So

Co., Inc.

50 Broad Street
——

•

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

Thompson & Co., Inc.

Markets and Situations

New York 4, N. Y.
—

120

for Dealers

Broadway, New York 5

Tel. REctor 2-2020

Tele. NY 1-2660

Full text of Commercial and Financial Chronicle : September 25, 1947, Vol. 166, No. 4632

FRASER