Full text of Commercial and Financial Chronicle : September 26, 1946, Vol. 164, No. 4528

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

BUS.

ADM.
2 7 1946

LIBRARY

ESTABLISHED 1839

Reg. U. S. Pat. Office

.Volume 164

New

Number 4528

tions

oppose

American

sugges¬

involving too drastic state

as

magnificent fiction. Pleads for realism in de-bunking |
j
pseudo-Liberals, or we lose the Two-World duel by default.

French

while

claim there
no

is

great dan¬

of

ger

1923-

That

wonder, the Cabinet crisis touched

nine-days

25

Sept.

(By

Wireless)

The "deroute" of the security markets should be puzzling in view
employment, all-round shortages and ris-

/,

of such facts as virtual full

^-ing

commod-

Wal¬

ity

prices,

getting.
lace

mounting

person¬

ure

be

meetings
rive at

par-

resting

to

clouds
emotion

ing

frequent

major effort to ar¬
agreement for "mone¬

in a

an

tary purification," but progress is

slow despite Anglo(Continued on page 1579)

extremely

Section Two Omitted
As the trucking strike has

not

yet been completely settled, we
are obliged to again curtail the
size of today's issue in order to
conserve
the small supply
of

on

of

solid

materially larger output of goods and services, must of
necessity be largely nullified by corresponding increase in living
costs.
Productivity now at low point owing to "feather bedding"

ground of fact

the

and

logic. But
the
episode
has signifi¬
In

a

Management no longer able, through technological
improvements, to offset rising production costs resulting from de¬
clining work week and higher basic labor wages. Whatever causes
of labor's present "psychological fever," fact is that not even tenth
part of postwar dreams will be realized unless nation gets back
to work without delay.

beyond his own personality.
sense it
is symbolic of the

great

great
debate,
and
the
searching
of
conscience,

under

in this country on the

subject

way

/

provocation.
Eugene Lyons

Russia.

of

.

be typical

happens to

part of the American public
relatively small part but tre¬
paper still on hand. Accordingly,
mendously influential—which has
we
are
omitting Section Two
tied its hopes for a better world
and restricting our coverage of
to the' Soviet
Union.
That at¬
^Prospective Security Offerings"
tachment is so intense, so sincere,
to only those items not reported
a

desperate, that it resists mere

so

;

*

•

Debate continues and is likely to continue

while to

Pictures taken at the

(Continued

striking
"Boom"
and

at .that.

Aerovox Corp.* 3 i

that
even
Secretary
Wallace has postponed for a year

two, when the monetary vol¬
is .four to five times larger

or

a

good

on page

1562)

*

than

in

•

Prospectus

on

for

durables

satisfied

for

years

ports

COMMON STOCK
Analysis on request

Hirsch & Co.
Successors to

Members

time

high

York

Hew

HAnover

2-0600

Established

Stock Exchange

Geneva

Y.

Teletype NX 1-219

Cleveland

Chicago

London

(Representative)

INVESTMENT

1927

SECURITIES

Buffalo

Albany
Dallas

Baltimore

Pittsburgh
Springfield

For

detailed

contents

see

index
page

of

1,

■

Acme Aluminum
Conv.

Alloys, Inc.

MARKETS

14 Wall St..

New York 5.N.Y.

Members

N. Y.

Security

REctor

2-3600

Teletype N. Y. 1-576

v

TELEPHONE-RECTOR 2-6300




Dealers Ass'n.

New York 5

45 Nassau Street

Philadelphia Telephone:

r'>*''•• &W».

?

>/

'

>

'•,a

*

ST.,

N. Y.

HAnover 2-0986

NATIONAL BANK

Bell Teletype NY 1-395

Montreal

THE

OF

Toronto

CITY OF NEW YORK

Enterprise 6015

New

// Service

Twin Coach Company

•«"'

Appraisal of

T

9Prospectus

on

Reynolds & Co.
Broadway, New York 5, N. Y.
Telephone:
Bell

.and Dealers

request

Members New York Stock Exchange

120

•

Members New York

Members New

Stock Exchange

York Curb Exchange

and
111

New York 4

New

Tel.

Tele. NY 1-733

DIgby 4-7800

Stock Exchange
Exchanges

other Principal

10 Post Office Sq.
Boston 9

Broadway
York 6

REctor

30 Broad St.

REctor 2-8600

Teletype NY 1-635

ira haupt & co.
Members New York

Hardy&Co.

Values

available upon request

■

Preferred

England

Public Service Co.

for Banks, Brokers

Company

INCORPORATED

Tel.

"

Conv. Preferred

Conv.

STOCK EXCHANGE

V-''r

>y•

THE CHASE

Bond Brokerage

Preferred

*Solar Aircraft Company

& C°

billion

1551)

Woonsocket

90c

MEMBERS NEW YORK

"

New York

SECONDARY

&

$10

on page

York Security Dealers Assn.

WILLIAM

52

Syracuse

Wilkes-Barre

New Haven

Gearhart

of

Bond Department

>.

;i

Members
New

*Detroit Harvester Co. Com.

BROKERS

almost

v'

"

HART SMITH & CO.

1531.

FINANCE

BOND

spite

State and

i

Washington, D. C.

Scranton

(in

be
ex¬

\

INDEX

PHILADELPHIA

BOSTON

Troy

come,

Bonds

New York S

64 Wall Street,

cannot

Municipal

■.

CORPORATE

BULL, HOLDEN

of

(Continued

1541, 1542 and 1543

and other Exchanges

15 Broad St., New York 4, N.

running

are

,'f '

R. H. Johnson & Co.

CO.

HIRSCH, LILIENTHAL &

to

cumbersome controls) at a peace¬

& OHIO RR.

request

the pent-up

when

1929,

demand

GULF, MOBILE

Havana Litho. Co.*

:

coming "de¬

pression"

'L

;

'

;

It could not be the

v,..v/.'v-'-i:

;

Dr. Melchior Palyi

long

a

one

;

the
hour,

NSTA Convention at Seattle, also of newly elected

/ officers, appear on pages

Vacuum Concrete

for

about wages

and the cost of living.
Argu¬
ments pro and con persist concerning the part wage in¬
creases of the
past year have played in the greater cost of
virtually everything one must have to maintain a normal
existence.
The old notion of fixing wages on some sort
of sliding scale to take account of rising retail prices is
come

(Continued on page 1556)

V

clock

the

ume
■,

Wallace
of

his¬

tory in the
offing—brief¬
ly, in front of

'

—a

issues.—Editor.

nation's

practices and general disposition pf workers to strike at slightest

by

far

removed from

cance

In previous

freight car
tie-up in the

of living relationship fail
bring home cardinal truth that higher wages, unless accompanied

tees are hold-

Bratter

in¬

the

greatest

palpably

—

tite commit¬

:

far

of

ventories;

Current discussions anent wages and cost

-

current

ahead

EDITORIAL

His views may

.

un¬

sales

stage.-

.

-

orders

and

AsWe Weem

the

on

world

filled

confused,

Quadri

Herbert M.

a

attention it is

type for dras¬
ally may be a
tic inflation.
secondary fig¬
BERLIN,
GERMANY,

off by the

Henry A. Wallace speech on foreign policy, deserves the extravagant

with

war

weak capital market that impedes capital flow
into productive enterprises.
Looks for a new kind of trade cycle
within an inflation periods that will disturb equity valuations.
Russia, and in

•

termed

American

of

bearish factors in threat of credit controls, in fear

i

Soviet, in praising Siberian slavery in lieu of American liberty,

on

jibe at
plan,

Russians

regimentation.

j 1 (3) uncertainty of avoiding monetization of national debt; and
H (4) the difficult Russian problem. Says inflation and labor troubles
i
go together and contends cheap money policy is collapsing.
Sees

typifies influential part of American public which is emo¬
In a mental
panic they reject realistic disillusionment of their fantasies about
Russian "democracy'' and other "idealism."
Wallace's book

tionally, desperately, and sincerely attached to Soviet.
.

British

.(■■■: ment to (1) wage-price muddle; (2) incumbent credit expansion;

because

Wallace

Special Correspondent of the
77■' <(Chronicle"

Calling attention to seeming paradoxical situation of a stodk market
decline occurring in an inflationary period, Dr. Palyi ascribes move-

i

Correspondent in Russia.

Publicist states recent Cabinet crisis is highly important

By HERBERT M. BRATTER

Copy

By MELCHIOR PALYI

By EUGENE LYONS

Former Editor, American Mercury; UP

a

Inflation With Jerks

New Monetary
Wallace and the Pseudo-Libeial
Delusions About Russia
Unit for Geinumy

Urged By U. S.

Price 60 Cents

York, N. Y.; Thursday, September 26, 1946

2-3100

'

;

Hancock 3750

Tele. NY 1-2708

Direct

Private Wire to Boston

THE COMMERCIAL .& FINANCIAL- CHRONICLE

1530

Thursday, September 19, 1946
a

'.Trading Markets ini

ICC's Failure to Raise Hates

N.Y.N. Hav. Pfd.&Com.

an

Rockwell

Standard G & E Com.

"

Alabama Mills

Important Cause of Market Decline

Taca Airways*

Higgins, Inc*
*With

Manufacturing Co.

By ELISHA M. FRIEDMAN, Consulting Economist

been

Mr. Friedman holds market decline has

^

>

Prospectus

drastic in rails than industrials because of Cora-

more

Bought—Sold—Quoted

increased wages. Urges wages and rates be. fixed simultane¬
ously. Contends prompt granting iof adequate rate rise would restore "normal" earnings and secur-'
ities prices, as well as stimulate general economy through capital expenditures and high employment.

mission's delay in raising rates to cover

KING & KING

Analysis
"V

*•*:

••

Request

on

V

;;

;>

•'

j

■

•

SECURITIES CORF.
1920

Established

Members N. Y. Security Dealers
Nat'l
40

of

Ass'n

Assn.
Inc.

V

"

HA 8-3778

BBLXi TELETYPE NY 1-423

Securities

The Behavior of Railroad

Dealers,

Securities

Bxohange PI., DT.Y. B

^

Why did the stock market break? Earnings were threatened by labor disturbances, strikes, and
wage increases not covered by selling prices. Market price is capitalized earnings. The failure of the

Steiner, Rouse & Co.
Members New York Stock
Exchange

25 Broad

increase of freight rates to pay for the increase in wages caused the market decline in
Prompt granting of an adequate rate increase would restore normal earnings and
market prices.®The judg¬

ICC to grant an

?•

Jonas & Naumburg

is

railroad

The

Mayflower Hotel

ivas

out

Mitckell & Company
WOrth

,

;

.

t

i

NY

1-1227

Maintaining securities dealers cannot through flights, real

|
j

Securities and Exchange Commission, which has
outposts in every city, Commissioner McConnaughey urges dealers

i

to

y•

did

average

Common

though

Mississippi Shipping

not.

a

If

Vanderhoef & Robinson
York Curb Exchange

York 5

COrtlandt 7-4070

Any

sort

to create

trials.

On

on page

rive

from

as-

in

and

American Overseas

'

stock

Common

■

v.

•'

,;

\

u

•\As
'J

'•

.v-

de¬

move

K.

JR.

V

»rl •'»

from

■

Bought—Sold—Quoted

(c) By Harris & Ewing

might
we

came

the

20 Pine Street, New

York 5

Members
New

Teletype

NY

York Stock

New

WHitehall 3-1223

Telephone:
Bell

McDonnell
York

Curb

1-1843
120

BROADWAY, NEW YORK
Tel.

REctor

Pacific

the

Coast

Northwest

impulse,

some

in

great

.!,

5

2-7815

ABITIBI POWER &
PAPER, Common & Preferred

or

of

blocks

large

COMPANY, Common & Preferred

BULOLO GOLD

accumulation

maintained for the

placement

BROWN

for awhile to

Canadian

some

time

persuasive
this

various

"v

Teletype NY 1-1140

NEW

?
YORK' 5

HAnover 3-9479,

warmer

'V- Assoc. Gas & Elec. Corp.

a

;>*'

;tyiy 5All Issues

shown their visi¬

why each year1
takes wing from its

home

-cities

like

from

come

-

Chicago, MiL, St. Paul & Pae.
v' ss/2000

;

reason

group

migration

York Curb Exchange

to

But

climates

whether with

reason

'"V Chicago & North Western
4%«/i949

long

a

on

this.

Consolidation Coal

many

that

Consolidated Film Ind.

or

DREDGING

sacred

at

reverence

pay

shrines,

i

Members New York Stock

Teletype NY 1-9SS

more

Punta

no

have

& Co.

Exchange

1 Wall St., New York 5, N. Y.
DIgby 4-7060

crusaded to ac¬
complish the return of some re¬
vered object to more sympathetic

indeed

been

the

Alegre

Sugar Corp.
Quotations Upon Request

backward

glances to learn how things

Securities Dept.

Gude, Winmill

or

crusading spirit has
been evident, .and the shrine of
most of the pilgrims appears to
lie in the other direction. • Many

NORANDA MINES

Over-the-Counter Stocks and Bonds.

it's

hospitable place.
The
hospitality that the Northwest and

hands. But

MINNESOTA & ONTARIO PAPER

of

Members .New
64 WALL 8T;

mere

been, to

We Maintain Active Markets in U. S. FUNDS
for

Department
is

we

unerring

return

Our

"Special Situations"

Frank C. Masterson & Go.

at least as

::--^yy,.-..

,Exchange
Exchange

and

intuition that

claim,
not, to toe
equable—and generous
*An address by Commissioner hospitality is characteristic -of our
McConnaughey before a section of people everywhere. So-that can't
the National Security Traders As¬ be the whole story.
sociation, .San
Francisco,
Cal.,
Of course, throughout all his¬
Sept. 23, 1946.
i'
tory men have been making pil¬
grimages. Frequently they have

&(b

fidelity Electric ,"A",

pro¬

tors suggests that that may toe

down

have all lieard how each year the

natural

Eastern Footwear

primary

this migration to

the Coast have

salmon, following

H. G. BRUNS & CO.

McConnaughey

be many reasons.*

Airlines

Wells

Struthers

there

leave off. But

little security traders.

new

subtle

sur¬

roundings,

careers

of

de¬

Spring

Detroit IntT Bridge

arrangements
to
continue

I Up in the Flathead Valley a
couple of weeks ago I saw a flight
geese winging it's way south
over Nine Pipes Reservoir.
Each
year they're presuaded toy some

people

interests

1558)-

duce

common

lightful

.

N. Y.

of

salmon

more

purpose of

the

| o y m e/it

new

Stock

York 4,

Scranton

There they

it does not appear to be a

occurs.

that
with

the headwaters

appropriate

for

e n

Stock

A. 5. Campbell

make

where their

Beyond

index, the rail stocks yielded

(Continued

migrations to

reasons

why it

the Dow-

on

New

Brook Water
their native streams.i

spec¬
about

the

than1 in the indus¬

Sept. 20,

Broadway WHitehall 4-8120

Bell System Teletype NY 1-1919

t-

esting to

Byrndun Corporation

Common

-

inter¬

of

sociation

U

Common

■'•••:

re—

ulate

The decline in the rails has been

Jones

.

rather

a'

an industry must cause
liquidation of stocks and declining
market prices.
%\ ' V ,

drastic

50

During the past week this annual peregrination of ihe National
Security Traders Association has impressed me as in many respects

are

delaying of rate

measure

Members New Y-ork Stock Exchange
Members New York Curb Exchange

by Commission.

did

,

Edward A. Purcell & Co.

stamp out more effectively evils and abuses "if

can

-

Towmotor

.bad practices." Defends proposal to bring unregistered securities
under control, and cautions "registration" does not mean approval

deficits in

more

Bell System Teletype NY 1-1548

"

market

government officials

increases.

,

general

Vacuum Concrete

collaborate in working out and applying jointly remedies for "

we

low for -the year •

new

fect of the ICC's

Preferred

SI Nassau Street, New

Commission

!

not,

the

im-

escape

studying the causes of the market markablephe-;
decline, let them examine the ef¬ nomenon. It's

Electric Ferries

Telephone

;

■
-

Laird
or

cooperate and collaborate with agency. Says in past widely j
accepted view SEC and the industry have antagonistic viewpoints
is on wane, and both will benefit by having one objective. Holds-

railroad and equipment stocks de-

^ i

clined to

New

Member,

j

The market became pessimistic on
the rails.
Again, on July 23, Ihe

Rogers Peet

Members

a new

because of the
outlook for
earnings.

uncertain

Common &

average

high level on
May 29, but the
railroad stock

Elisha M. Friedman

Securities and Exchange Commission

i

agined,

Envelope, Com.

Textiles, Inc.

j

The

d nst rial

reached

2-4230

Teletype

Bell

n

stock

Broadway, N. Y. 5

By ROBERT K. McCONNAUGHEY*

.

off-

D ow~J ones

Baltimore Stock Exchange

120

branch offices

our

Soya Corp.
U. S.

rate

a ny

setting
increase.

Members

j

May 22, with¬

Bought—Sold—Quoted

NY 1-1557

La.-Birmingham, Ala.

Direct wires to

With SEC!

increase
granted on

wage

May, McEwen & Kaiser

New Orleans,

Wanted: More Collaboration

place
significant.

.market.,

Jones Estate

>

the

of

ment

St., New York 4, N. Y.

HAnover 2-0700

railroad securities.

were

going back home.

^YeeuecmiCompavu^

Members N. Y. Security Dealers Assn..

37 Wall

St., N. Y. S

Hanover 2-4850

Bell Teletypes—NY 1-1126 &1127

1

'

Goodbody & Co.

Members N. Y. Stock

Exchange and Other Principal Exchanges

115 BROADWAY

NEW YORK 6, N. Y.

Telephone BArclay 7-01 CO

Teletype NY 1-672

Again, there have been many
flights
from
persecution,
real or imagined.
But here the
great

SEC has dogged your every foot¬
step—and besides has outposts in

(Continued

A low

priced speculation—

Keynote
Recordings, Inc.
Manufacturer

For

Eastern

around

selling
on

Members

New

York

2%

Exchange

120

WALL

ST.,

NEW

YORK

TEL. HANOVER 2-9612

Jefferson-Travis Corp.
Western Union Leased Line Stocks

Common Stock

Preferred

Trading Markets

CO.

Stock

—

SOLD

—

QUOTED

/

Pacific & Atlantic

Telegraph Co.

Southern & Atlantic Tele. Co.

v

Memorandum

on

request

.

x

Empire & Bay States Teleg. Co.

Request

Stock

Exchange

St., New York 4, N. Y.

HAnover 2-4771

& GAS CORPORATION

BOUGHT

Simons, Unburn & Co.
25 Broad

&

York

International Ocean Telegraph Co.

Stock

Common

■Prospectus

Racing Association
Common

New

\York Curb Exch. Assoc. Member
New York Coffee & Sugar
Exchange

1569)

FEDERAL WATER

of

Phonograph Records

Currently

Banks, Brokers & Dealers

on page

FARR &
Members
New

Tele. NY 1-2908




Troster, Currie & Summers
Member New

York

INCORPORATED

Security Dealers Association

74 Trinity Place, New York
6, N. Y. ;

Telephone HAnover 2-2400
Private Wires to

37 WALL STREET

Teletype 1-376-377-378

Buffalo—Cleveland—Detroit—Pittsburgh—St.

J-G - White 6 Company

Louis

NEW YORK 5

ESTABLISHED 1890

Tel. HAnover 2-9300

Tele. NY 1-1815

bought

-

sold

-

quoted

,

Arnhold and S. Bleichroeder
INC.

30 Broad St.
WHitehall

3-9200

New York
Teletype NY

1-51

r

'[Volume 164

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4528

Stock Break Justified by .»■
Economic Background

I N D E X
Articles and
Wallace

Page

News

Russia

Delusions About

Pseudo-Liberal

the

and

By LUCIEN O. HOOPER*

/

^

Bratter

M.

Decline—Elisha

More

Wanted:

M.

Friedman

With

Collaboration

Hooper

:

Mc.

Background—Lucien C.

'

1531

—

..

on

>

____.:_.;;_1530

Stock Break Justified by Economic

Thoughts

K.

SEC—Robert

Connaughey

Whenever

Comparative Stock Prices—Rogers W. Babson,.-,.---——1532

We Are in

;

The

a

be

Nystrom.-—1533 i

Government's

Fiscal

Imminent
;

:

Policy

ble '• to

W.

John

—

all

———1531";.'

—

—.—

Government

the

and

<

entire

be reasonably

alibi.

this

*

Dollar to Be Unchanged—John W,

•

.

facts,
bly

high.

Some of them

1534

job
in

—

the NSTA Convention Train 1538

on

of

O.

Hooper

*An
before

them

that

ex¬

al¬

stocks

go too

SECURITIES

G0LDWATER, FRANK & 0GDEN
Broadway, New York, N. Y.

39

Empire

Trust

Co

A Fiscal Policy to

:

my

Theory,

address
the

}

we

on

——1539

Mr.

Hooper

Annual

page

Busi¬

Aeronca Aircraft

Park,

Great American

1553)

Industries

;

Thoughts

1540 j

Fight Inflation—--..y—————

Price Maladjustments Due to Retention of Wartime
—-

retail trade

pi

f

>

and

warns

Regular Features

Securities

Canadian

Dealer-Broker

v.*

-I-

•

%

: v?

' -

come

for the merchant

-

#

■}.%■■■/

*

and to reconsider expansion plans;

We

TRADING MARKETS

have

to

Thiokol

were

National Shirt Shops

; r

T

estimated

''I

Laclede-Christy Clay
Products

at

$1,474,000,000; in 1945, at $2,964,000,000; and in 1946, they may total as much
as
$3,500,000,000. Between 1938 and 1945, retail
drug sales doubled; and in the same period, sales
of toilet articles and drug sundries in department
Q. Forrest Walker
stores probably increased about 35%. The figures
;
r
lead one to suspect that a good part of the gain in
drug store sales has come from general merchandise lines rather
than strictly drug store merchandise.
In the war period,-the sales

(Continued on page 1580)

Corp.

ex¬

completed nearly eight years of
expanding retail trade. In 1938 retail drug sales

_1545
1539

—

Investment Recommendations
^,Vy

11, the time has

pense

Cover
.———1546
——-—1547

———L,

Chicago

; *

between Postwar World War 1 and Postwar World

War

—

Reilly & Co.,inc.

New York

fhat it may he

put his house in order and to correct wasteful

(Editorial)

J. F.

a good policy to prepare
Says first phase of postwar read¬
justment is ended, and although there are differences

————--1547
———1548 f
NYSE Wants to Encourage Listing of Foreign Securities—1580

Bank and Insurance Stocks——.—

j

for lean years.

——.— —

Business Man's Bookshelf—

to uninterrupted expansion of

recent years, and.poses question whether it will continue.
Recounts experiences in previous postwar periods,

Young Pleads for Railroad Investor—

As We See It

Bought—Sold—Quoted

Economist, R. H. Macy & Co., Inc.

———

Policy

Retail Outlook

Merchandising economist calls attention

Cdffrey*2Uid^3chram to Address Securities Administrators'-1546
Wallace Resigns From Cabinet at Truman's Request——-1547 *
World Bank Treasurer? Appointed
u—1547
Ilarriman, Successor to Wallace, Backs Truman Foreign
X.

on

1

By C. FORREST WALKER*

-1544
Sees International Currency Essential to World Unity——1544 i
SEC to Investigate Stock Market Break———JU545
Dutch Finance Minister Arrives—..
—1548
Controls

Assn.
!
Inc.;

of Security Dealers,

have been

ness

(Continued

of

York Security Dealers

National Assn.

interpretation

by

Babson

Member
New

'

Webb———.1538 1

—

Teletype NY 1-1203

HAnover 2-8970

Wall Street Union Rejected by Employees of
...

•

ESTATE

REAL

high in bull

•

Conference, Babson
Mass., Sept. 19, 1946. '

advance into stock prices.
''
It is my opinion that the recent

deciifte in stocks, which after, all,

i

they

of the Dow
L.

trans¬

lating

as

According to

a

now may

priced, but past

teaches

markets.

the

up

Specialists in ,'f

too low in bear markets

go

—just

while, I would

Snyder-———

Public Works Expenditures to Rise—James E.

ways

than

in

botch

Weinberg and WPB Aides Awarded Merit MedaL—
1535
Reports Indebtedness Still Rising
—.1536
"Tools for Profit"—Talk on Productivity
_—————1537 I
High Lights and Side Lines

perience

if

proba¬

more

once

<

,

Even

I knew all the

Churchill Pleads for United Europe—,——-—1545
*

,

I believe that stocks have been
too

behind

Against Sovietism—William Green—>————-1545 ;

:W. y-y:y/>;v-•■•vy*

wants!

else

one

Telephone: WHitehall 4-6561

of •" the
stampede
of
buying which occurred between
V-J Day and the end of May, has
been entirely justified by the eco¬
nomic background.
;
v

——-

Firm

AFL

the

on

Obsolete Securities Dept.

sequences

should": hide

Varda-

—I—.—,
——--C—1537 yFood Suply and Price Considerations—Paul S. Willis——1537 j
Efficacy of Price Control—Thomas H. McKittrick—-——1539
The Economic Situation—John H. MacDonald—————1510

Jr.

man,

facts
absorb

background.
No
analyst,
however,

————1537 i:

System—James K.

Banking

the

the

Jr.-..—1536
Richberg—1536

Relations—Donald R.

just

it

bid

to

us

stocks and bonds-

WALL STREET, NEW YORK

09

has wiped out only the price con¬

<

Parade of Unbelievable Events—Walter Chamblin,
Trends in Industrial

to

no

analyst gets too sure of himself, his clients should
In an economy as complex as. ours

an

know

to

or

How Soon Must We Go Back to Work?—A. M. Zelomek—1534 [

Prospects of Economic Stabilization—Russell Weisman—1535

The Goals of NSTA—Thomas Graham

issues, that

but

believe,

to

natural

unnatural

most

suspicious of his judgment.
is impossi-

it

Bear Market!—James R. Bancroft—1533';-.

Snyder

hard

It's

comes

low of 150 in Dow-Jones Industrial Index.

Retail Outlook—Q. Forrest Walker——1531

What to Do About Inflation Trend—Paul H.

DOING WHAT

Hooper terms this a real bear market, caused by following:
(1) cessation of fiat money creation and curtailment of credit;
(2) outstripping of personal incomes by prices; (3) obstruction to
corporate expansion plans by difficulty of securing equity capital; !
(4) public's disillusionment over absurdities of previous one-way ^
bull market; (5) change hi sentiment over international outlook.;
Expects sharp market rally, followed by renewed decline to possible

Important Cause of Market
.1530

an

AND COMPANY

COMES NATURALLY!

Mr.

--Cover 'y-

:

ICC's Failure to Raise Rates

ticHiran

.

Market Analyst, W. E. Hutton & Co.

..Cover
Inflation With Jerks—Melchior Palyi
—_-_Cover
New Monetary Unit for Germany Urged by U. S.—Herbert
>
—Eugene Lyons

1531

Hi M O O & Co. INC,
Members New York Security Dealers Assn.

170

Broadway
Bell

WOrth

.

,

Teletype NY

System

2-0300

1-84

,

,

>

«/o

0613); 1
England,

Edwards & Smith.

i

ary

1942,
Y.,

25,

York,

N.

Company

j, '

at the post office at New
under the Act of March
^

.

' -.X-yx.V'

.

v:

Subscription Rates

.

Subscriptions in United States and Pos¬

sessions, $26.00

in Dominion of
South and Central

per year;

"Canada, $29.00 per year;

Mexico and Cuba, $29.50
y>er
year;
Great
Britain,
Continental
XEurope (except Spain), Asia, Australia and
Africa, $31.00 per year.
Spain,

America,

(Continued

i

| FINANCIAL CHRONICLE
Park

DANA

Place,

REctor
HERBERT D.
WILLIAM

Punta Alegre Sugar
Eastern

Publishers

COMPANY,

to

Haytian Corporation
f

j

•

y

New York 8, N. Y.

2-9570

1552)

*An address by

Mr. Walker before the annual meeting of the Federal Whole¬
sale Druggists Association, Atlantic City, Sept. 17, 1946.
r

25

on page

!

COMMERCIAL and

WILLIAM B.

,••

second-class matter Febru¬

.i'3, 1879.

The

Reg. U. S. Patent Office

Copyright 1946 by William B. Dana

V.y'yyy'H>j y^y
IReentered as

Published Twice Weekly

135 S. La Salle St., Chi¬

Other Offices:

3, 111.
(Telephone: State
Drapers' Gardens, London, E. C.,

cago

We

9576

are

interested in

VV

offerings of

U. S. Sugar

SEIBERT, Editor & Publisher
DANA

SEIBERT,

President

WILLIAM D. RIGGS, Business

High Grade

Manager

Thursday, September 26, 1946

,y

°

Every Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue—-market quotation

Sugar Assoc.

Lea Fabrics

;

American Bantam Car

^Fidelity Electric

Public Utility and Industrial

Class

Susquehanna Mills

PREFERRED STOCKS

records, corporation news, bank clearings,
state and city news, etc.)
.

Co.

A Common Stock

♦Prospectus

request

on

"

i

X

'

Bank
f $25.00
y i

Other

and
per

Publications

' -

•

Quotation Record—Monthly,
•VU-'X
:

year.

Monthly,
1325.00 per year.
*
Note—On account of the fluctuations in
the rate of exchange, remittances for for¬
eign subscriptions and advertisements must
■foe made in New York funds.
1 i

■

'

Monthly

Earnings

Record

TITLE COMPANY

§

Grinnell

—

Welch

.Spencer TraskCo.,

Corp.

.25 Broad Street, New York

Grape Juice

Whiting Corp.
N.

y.

Security Dealers

Broadway

NEW YORK 4
Teletype NY 1-832. 834

WHitehall 4-6330

Bell Teletype NY 1-2033




*

r

:

Private

Wire

to

Boston

-'
■,

*

Miles

&

Service,

Shoes

Inc.

Incorporated

,'

Common.. Stock

National Radiator Co.

•

Bought—Sold—Quoted

~

?

Public National Bank &
Trust Co.

Assn.

*Prospectus

Board of Trade Bldg.

HOURgSESItofiSIER

CHICAGO 4

Established 1914

Harrison 2078

Teletype CO 129

York—Chicago—St. Louit
City—Los Angeles

Kansas

Sales

s

Direct Wire Service
New

15 Broad St, N.Y. 5

-

American Bantam Car

STRAUSS BROS.
Members

DIgby 4-8640

U Members New York Stock Exchange

-

St., New York 4, N. Y.

WHitehall 3-0272—Teletype NY 1-956

*Parks Aircraft

32

Newburger, Loeb & Co.

Teletype NY 1-5

Members New York Stock Exchange '

Lawyers Mortgage Co.

Prudence Co.

DUNNE&CO.
Members New York Security Dealers Assn.

>

25 Broad

Telephone HAnover 2-4300

Oneida, Ltd. K

Bond & Mtge. Guar. Co.

N. Y. Title & Mtge. Co.

-

Cleve. Worst. Mis.

CERTIFICATES

Lawyers Title & Guar. Co.

-

Trinity Place, New York 6, N. Y.

Telephone:
BOwling Green 9-7400

Teletypes:
NY 1-375 & NY 1-2751

request

C. E. Unterberg &
Members

74

upon

N.

Y.

61 Broadway,
Telephone

Security

Dealers

Co.
Ass'n

New York 6, N. Y.

BOwling

Green 9-3565

Teletype NY 1-1666

I

'"••.•TAIDHAM PI

•££X) WO? v

M,M.)').

i

THE COMMERCIAL & FINANCIAL CHRONICLE

1532

Thursday/September 19, "1946

jm'mrnl

jf1' l

»t •

From

BUSINESS BUZZ

W.

Washington
head Newso
the

A

/

in

J,

CARLISLE BARGERON

By

Correspondent reports Chairman Hannegan confident that Demo.-,

^

elections

Art Metal Const.

will continue to vote blindly as hereto- '
of Representative Slaughter in Missouri as indica¬
voters follow dictates of political leaders. Contends prin¬

wherein party is strongest,
purge

tive of how

Amer. Window Glass*
&

theory that people in cities and industrial centers,

on

fore.. Cites

American Bantam Car
Com.

November Congressional and Senate J

crats will be victorious in

cipal motive of Jeftwing agitation for extension of franchise is to
use additional "uneducated masses" as pawns. Sees Labor Depart-

Pfd.
.

Automatic Instrument

endeavoring to obtain confidence of industry.

.ment

Barcalo Mfg. Co.*

of Bob

attitude

The

highly interesting

Cinecolor

as1

country. ; You, v
Wotild' ' think

Chicago R. I. & Pac.

Organization of the voters is all
he believes, and

that is necessary,

that he would

Old Pfd.

in the Henry Wallace crisis is

Hannegan

to what may be a truly serious situation in this

that

convinced

the Demo¬

be

'

he

up

DIM Inc.

his

crats have the cities and industrial

throwing
hands
anguish.

in

District Theatrest
'■

Hartford-Empire Co.*

enough in¬
competency in
high Wash¬
ington circles

Jack & Keintz

bring about a
complet e

Jessop Steel HisLanova*

November.

Mastic

Asphalt
Michigan Chemical
Minn. & Ontario Paper
i."

,j
gan is not the slightest bit dis¬
turbed.
He hasn't the slightest
doubt that his party will remain

to

Pfd.

N. 0. Texas & Mexico

I

But

optimism.

exude

and die.

is

This

Naturally

have only to study the man
realize that he is absolutely

certainly what such
enterprisers as Frank

American

"I Know It's Your First

Deposit, Mr. Melton, But I Assure You
Nothing Will Go Amiss!"

Hague, Ed Kelly and Boss Crump
have been doing for years. And

hn:

*
"
«•
Hannegan is further • justified in
Hannegan doesn't think that isr his own estimation of the voters
sues
in : November,
the almost by what took place in the recent
primary
out
in
complete breakdown in the han¬ Congressional
dling of our foreign affairs, the Kansas City. The Pendergast ma¬
chine was hot sold on Truman's
graft and waste during the war,
will

Purolator Prod.*

11,

would

says.

sincere.

I NX New Hav. & Hart.
Old

them to the polls, theirs not to
question why, theirs but to vote

by

impressed

aren't

We

you

Moxie

pened, these people do not think
and all that is necessary is to herd

in control of both the House and

he

Mohawk Rubber*
r

,

what he publicly

Old Pfd. "

so

figures they won't do this, be¬
cause regardless of what has hap¬

Carlisle Bargeron

Yet Hanne-

Senate.

Missouri Pac.

country

cities and industrial centers. Bob

in

overturn

the

dry, that they already have the
congressmen from these areas. To
appreciably
1 li e r e a s e
thei r
strength they must break into the

to

months

of

publicans have pumped the areas
of their natural strength pretty

recent

in
...

been

h as

Douglas Shoe*
Gt. Amer. Industries

communities

airtightly organized that the Re¬
publicans have no opportunity of
making any serious inroads. It is
a
fact, of course, that the Re¬

there

Surfely

is

amount

to

(Continued

dam.

tinker's

a

on page

Comparative Stock Prices
By ROGER W. BABSON

Mr. Babson urges caution in

|f

*The FR Corporation

Upson Corp.*
U. S. Air Conditioning

;

*Loew

^United Drill t^ool^B"
Vacuum Concrete

b
■

^Stratford Pen

^Princess Vogue

.

,

*Hungerford Plastics

^District Theatres

Tenn. Products

•,

•

i;

7

Aspinook Corp.*

52

York

New

Members

Mij/ /Alabama Mills*

Jones

good individual issues.

Central National
■..'

Circular

upon

ESTABLISHED..

22 East 4Dth

Standard Gas Elec.
or

said

In

look

should

for

issues which are

Corporation
1927'....

.

■,.

..

,

''

.

.

Street, New York 16, N. Y.
Teletype: NY 1-2948

•

request

^

J

compare

y/e

have

we

some

insight

action to expect from

as

to what

their future

one

money

performances.
As
I
explained
week,' the Industrials sold .at
the depression low of 41, the Rails

such

individual

capable of mak¬

at

13, and the Utilities at 16. They
to peaks in 1937 with a sharp
decline and a lesser recovery ia

rose

The market then remained

1938.

promise. Next, we must
stagnant with a down-hill trend
which companies are until
Pearl Harbor Day, Dec.;7,
suited
financially,
as
well
as
1941.
mechanically, to do the best job
show

.

ascertain

in
'

Telephone: LExington 2-7300

■

Averages

last

make

to

order

ing the grade. First of all, we must
select stocks iii industries which

| Southwest Natural Gas
• Bulletin

well

averages.

NATIONAL COMPANY

If

of the

vance

Quoted

Paget S'nd P. & L. Com.

>

the

above

Sold

0 Market

certain stocks
market, Some pricewise and percentagewise With
the Dow-Jones Averages in 1932,
of
these
should ad¬ in 1937, the war years and now,

NORTHERN INDIANA PUBLIC SERVICE

Spec. Part.

its

centagewise

Roger W. Babson

Southeastern Corp.

retafd

to

issues still per¬

EASTERN CORPORATION

Derby Gas & Elec.
New England P. S. Com.

chance

find individual

average

Bought

less

progress.
AH the above factors
should aid readers in selecting

:

tProspectus Upon Request

have

can

below

;{y American Gas &Pow.
Cent States Elec., Com.

•;

mar¬

readers

1 Textron Wrnts. & Pfd.

m

of

sort

ket, therefore,

Teletype NY 1-2425

***'.'

/

Tel. HAnover 2-8080

•Aver¬
In this

ages!

'^000:0^

yield,' if the financing is simple,
usually makes for sales appeal. .A
company which requires TeW'feinr i
ployees in relation to its vplvine
of production should be especiaUy
attractive, since labor strife will

New York 5, N. Y.

,

.

be¬

low the Dow-

*- -

Security Dealers Association

Wall Street

good is¬
well

sues

FIRST COLONY CORPORATION

mmmmmmmamammmmamm

:

depressed^
many

Shops *Metal Forming Corp-

*Prospectus Available

V

1

-

The stock market will continue to have ups and downs; but now
caution must be exercised in picking stocks.
The recent slumps

^

.Drug;ep.^.lncr^r;:w-&: Envelope

-

are,

Concludes market is favorable for wise selections.

sons.

Taylor-Wharton*

i

t

which

issues

market.

Richardson Co,

;

picking stocks, and points out many
percentagewise, below average .of
Lays down principles for selection and makes compari¬

individual

1556)

fields. We must be cer¬

their

Since 1942 the market has been

which we rising with intermediate decline?.
(Continued on page 1555) ;
choose has sales appeal. A good

tain

the

that

stock

ACTIVE MARKETS

Ward & Co.
EST.

1926

*Argo Oil- Corp.
t

m

•

■

.

-

-

General Crude Oil

;
*

♦Wellman

-

>

•

Engineering

Robert Reis Common

Electrol, Incorporated

Descriptive Circulars

on

*Hoying Corp.
.

Aeronca

Osgood Co. "B"

.Members N. Y. Security Dealers Assn.

120 BROADWAY, N. V. 5

.

•

Stand. Comm. Tobacco
♦Tennessee Prod.

■''

request

*

on

request

.

]

Distilleries

Great American

Capital Records

fProspectus

REctor 2-8700

Glenmore

Great American Industries
;

Soya Corp.

,

Aircraft

Industries.

j
i;
:!

N. Y. 1-1286-1287-1288
Direct Wires To

Chicago, Fhila/ & Los'Angeles
ENTERPRISE PHONES
Hartf'd 6111

Seligman, Lubetkin & Co.
'

'

.

Buff. 6024

Bos. 2100




1

41 Broad

Incorporated '

■.4

Members New York Security Dealers Association

Street, New York 4

,

;

"

HAnover 2-2100

J.K.Rice,Jr.&Co.
0

Established 1908.

Merqbers N.

Y.

REctor 2-4500—-120
Bell

f

•

?

-

SIEGEL & CO.

Security Dealers, Assn.

Broadway
System Teletype N. Y. 1-714

39 Broadway, N. Y. 6

DIgby 4-2370

Teletype J?Y 1-1942

|

Volume 164

1533

CHRONICLE

THE COMMERCIAL & FINANCIAL

Number 4528

Henry B. Leighfon With

What to Do About Inflation Trend

Eastman, Billon & Co.

By PAUL Ii. NY STROM*

(Special

Professor of Marketing, Columbia University

,;

t

Chairman, Central Council of National Retail Associations

of (1) adequate production and <
lower costs; (2) a balanced Federal budget; (3) abandonment of
government price fixing; (4) buyers' strikes; (5) curtailment of /
wage increases; (6) avoidance of high raw materials prices; and
(7) positive opposition to government regulations that force higher
consumer prices.
Holds business gains nothing by appeasement.
anti-inflationary

V
h

There is

widespread

program

in this country about the present
is well justified.
Prices have

concern

trend towards inflation.

The

concern

gone^
far that ties, or

already
up so

the

dollar

come.

of

today is worth

the

more

than

50c

what

it

We

was

forces

at

con¬

are

tinuing to cut
down the val¬
of

ue

every¬

thing

that

bears

the

11

sign,

d
Paul

H.

Nystrom

o

a r

whether

be

V

that

war

a

here and now.

deposits in banks
two-and-a-half
times what

in 1940. Demand
are

they then were. Time deposits are
nearly twice as great as they

gists

were.

Nystrom be¬

City,

We Are in

The

national

total

(Continued

Sept 47,T9463;^/)

By JAMES R. BANCROFT*

A

and high

will

develop

dominating

relatively small declines in business

which

for

drawn

from

many

Economic

the

to

\ *

;

ham

exaggerated and rising prices

are

,

resistance, leading to readjustment.' Sees

vulnerable.

nomic situation is both distorted and

&

and

Co.,

Na¬

Chase

the

tional Bank.

months

several

Stifel, Nicolaus Add

Social

and

(Special

The

Chronicle)

Financial

by

technical

a

staff

with

now

—

E.

Thomas

-

Edward H. Julius are

Felker and

agencies aided

government

ILL.

CHICAGO,

by unofficial consultation with other countries.
The former Proposals, which advanced the basic
idea that there should be established an Inter¬

& Co., '

Stifel, Nicolaus

Both

Inc., 105 West Adams Street.
have been in the U) S. Army.

Organization of the United Na¬

Trade

to

It has been under prep¬

Pulp & Paper

l\-

;

arrangements.;

Stocks and Bonds

the

The fundamental difference between this draft Charter and

suggestions of last January, is that England and several other coun¬
tries committed themselves to the earlier U. S. proposals; while
is

British Columbia P. &

Consol. Pap. Corp., Ltd.

document

new

a

worthwhile

make

definitive

a

known

latter meeting, to be

Brown

stock market advance in three months
is no simple incident, however looked at—nothing to be easily ex¬
plained away.
/•;//). •
•
?
1
—
—"Tti
ket.
At least I don't • want to
To pretend
erate on rare exceptions.
otherwise is

the

therefrom—there will

St. Lawrence

Preparatory

concetely

together around the table,

Commissions;

Dryden Paper 4s, 1961

obtuseness,

Eugene Lyons' article on the front cover

see

;•

ji

(Cintinued on page 1568)

'

4s, 1964

Quebec Power 3s, 1962
Shawinigan Water & Power

of

3s,

The list of these 19 members (the

of the "Chronicle"). ;

issue

Grain

Federal

these

all,, excepting the

and

1961

^

;

Shawinigan Water & Power
.*-3Yzs, 1970

/

);;/ v/. •

,

^

_

1965

Abitibi Pr. & Paper 53,

Union, have accepted {for a hint as to the background of the

Soviet

Ltd.

nego¬

The world's

commodity agreements.

Negotiating

and

Ltd.

Corp., Ltd.

St. Lawrence P. Mills Co.,

This will be a

body known as the Negotiating Group.

a

Price Bros. & Co.,

-

Ltd.

Paper Co.

another conference, partici¬

still

be

important trading nations were invited to membership on

most

Minnesota & Ontario

This

year.

new

of Can.

Paper Co., Ltd.

International Paper & Pr.,

the World Trade Conference, will

as

tiating reciprocal trade and

this

in

P., Ltd.

Company

Donnacona

Spring of 1947; immediately after which—in-fact, - con¬

in the

Soviet

To lose 40% of a four-year

meeting

Ltd.

Abitibi Pr. & Paper Co.,

unilateral

proposition—not even repre¬
senting overall intra-U. S. Government opinion.
For example, in
the case
of the anti-dumping
proposals/ other countries agreed

the

"bed-rock" group sitting

deflation, rather than inflation, ahead, and decries production waste-;
fulness inherited from war. Concludes current business and eco¬

*

issued

was

Council last December.

pated in by

greatly reduce profits. Holds both short-

demands

consumer

consumer

1

'

charter, based on this country's Proposals
for Expansion of World Trade and Employment,

tinuing

ages

: -

;

about this Plan: It is

of orientation

word

^

draft

a

costs, says

or

)

discriminatory techniques.

their

countries in forsaking

meet other

in order to

arrangements

occur

under these conditions

J

,

to

cause of current bear
individual incomes and
rapid advance in price levels is killing markets. Points ;

volume will eliminate

135

Mr. Leigh-

eliminating the barriers against international trade, is newly evi¬ ton has been serving in the U. S.
denced by the State Department's charter for world trade.
This
Army. Prior thereto he was with
document goes the whole-hog in frankly admitting that we must
F. S: Moseley & Co., Hariris,/Upclean our own house of export subsidies and preferential tariff

market is serious maladjustment between
oat

become ; associated

Eastman, Dillon & Co.,

South La Salle Street.

thereto in

President, American Institute of Finance

Investment counsellor, holding

Henry ; B.

—

advance, but have not even seen their spelling-out - in the
current document.
And throughout, the new Charter represents very
important amplifications and clarifications.
This Charter is issued in anticipation of the meeting of the
Preparatory Commission of the Economic and Social Council, which
takes place in London Oct. 15, next, and. which will seek enough of a
framework of agreement on reduction of restrictive trade measures

income

1554)

on page

Bern Market!

a

Chronicle)

ILL.

raw

fore the Federal Wholesale Drug¬

Association,/Atlantic

country is still pushing to the maximum the war for

/ That this

national

in circulation is twice what it was

bond, interest on a promissory
note, insurance, pensions, annui♦An address by Dr.

with

tions, contained detailed suggestions for rules to
materials which, if not
govern trade barriers, restrictive business prac¬
carefully and sanely handled, can
tices,
intergovernmental
commodity
arrange¬
produce economic catastrophe. We ments and domestic employment policies/ This
have; on the one hand, a great International Trade
Organization will be the last
surplus of purchasing power and, unit in the Economic and Social Council's affilA. Wilfred May
on
the other, a sharp deficit not
iated organizations—a companion to. the Interi
only in the goods that people national Labor Organization; the International Monetary Fund and
want to buy, but also in the rates
Bank, Food and Agriculture, International.. .Civil Aviation, World
of production at which such goods
Health and Refugee organizations; and UNESCO.
Its overall purpose
are coming onto the market.
will be to liberalize international trade; its more specific aims: to
Purchasing power is at an all- deal with commercial trade
details, cartel policy and commodity
time high. The amount of money

inflation¬

work

j

have in this country all

now

of the

worth in 1940.

ary

This danger of infla¬

tion is present

of

The

any other form of fixed in¬
I am not forecasting dan¬

future.

Financial

The

CHICAGO, •

Leighton. has

A World Trade Charter

'

aration

Forecasts"' have to do with

ger.

little

;

By A. WILFRED MAY=

Asserting danger of inflation is here, Dr. Nystrom lays cause to
both goods shortage and administration policies./ Attacks minimum y.;
wage legislation as hoisting unduly entire wage structure and pro- ,
poses an

to

.

.

Many

either

simply

delude

to

self

one's

some

or

ment—a

to

attempt

?

The records

the

ican

have) pointed

four

rise,

year

(Continued

on page

Institute

with

1549) J

New York

advance

*An

-

St. Louis

Kansas City

-

Bell Teletype NY

1-395)

Montrf.al

•

•

Toronto

Los Angeles

-

Standard

Fruit

Com.

lost

40%

ushering in

bear

a

Pfd.

&

address

by

Mr.

Teletype

);

Whltt, & Company

mar-

Bancroft

before the Annual Business Con¬

New York 4, N. Y.

Babson's, September 19,

/

V

2075

MICHAEL HEANEY, Mgr.

>

129

CG

/ WALTER

Baum, Bernhelmar Co.

•

KANSAS CITY

ST. LOUIS

KANE, Asst. Mgr.

Joseph McManus & Co.

f

/

Pledger & Company, Inc.

Members New Orleans Stock Exchange

New Orleans 12, La.

41 Broad St.

ference at

CHICAGO 4
Harrison

DIgby 4-8640
Teletype NY 1-832-834

S/S

Securities,

rise

that

of

&

Curb and Unlisted
;

Board of Trade Bldf.

Broadway

NEW YORK 4

Lane Cotton Mills Corp.
R. Bancroft

James

duration

never

32

T. J. FEIBLEMAN & CO.
•

Chicago

Member* New York Security Dealers Ass'n
'

or

years

without

J

Jonas & Naumburg

of

has

-

HAaover 2-0980

ST., N. Y. 5

ITew York

STRAUSS BROS.

Sulphur

Pfd.

&

ex-

o n s, a

two
more

Lake

Com.

market

stock

l&fil

§f COAST -TO -:COASf!lS

with

Galveston, Houston
Jefferson

that,

rare

t i

p

52 WILLIAM

Amer¬

show

c e

;;)|||

Direct Private I Wire Service

Finance

of

CO.

HART SMITH &

for

such develop¬

some

widespread public participation—

delude others.

of

signs

time to

York Curb Exchange

New

Members

Chicago Stock Exchange

LOS ANGELES

)

V
New York 6
teletype NY 1-1610

39 Broadway

Carondelet Bldf.

Bo. 9-4432

Digby 4-3122

Bell TeL—NY-1-498

1946.

Philippine
v
,

Dravo Corp.*

San Nap Pak

Canadian

-

American Maize ProcL Co

American Insulator

Domestic

*Air Products,

Preferred

&

Common

Common

'

^Raytheon Manufacturing Co.

Baker Raulang

Bought

——

Sold

—

In

Investment

62 William St.

'

Securities''

4-2422

,

-

Branch Office
V; 113

Hudson- St., t Jersey

City, K. J.




w

*

K

Prospectus

~;; •*."* "

■

0

FREDERIC H. HATCH & CO., INC.

■

Teletype
NY 1-2613

,

<■*"9
i.

.

\

S

'

''

4.

on

request

.

•'

.

^

•

.

••

*

-

Preferred

..

New York 5, N. Y.

Telephone
WHitehall

..

•Prospectus on request

American Beverage

Com.

Quoted
*

MAHER & HULSEBOSCH
Dealers

Preferred

$2.40 Conv.

.

♦Universal Winding Co.

Mining Issues

Brokers ,&

Inc. Com. & "A"

Preferred

PETER BARKEN
32 Broadway, New
Tel. WHitehall 4-6430

:

Established
MEMBERS

York 4, N. Y.
' *

Tele. NY 1-2500

...„

83

S-4

*

Wall

%

»

•

*

.

V

»

120

N) Y. SECURITY DEALERS ASSOCIATION" ~
•.

i

!••»«-» ••

-

o

IU

UHkHi

I i

-

* i 4

t *

•

Bell

Street; New York 5, N. Y.

#

Reynolds Stock Exchange
& Co.

Members

1888

tK%

8

t *

<■

i, t >

r

l ♦ t

t

t

f

New

York

Broadway, New

»'

York 5, N. Y.

Telephone: iREctor
Bell Teletype.

Teletype NY 1-897

'

*

2-8600

NY 1-635

-

1$34

THE COMMERCIAL & FINANCIAL CHRONICLE

Dollar To Be

The Government's

The recent precipitate decline

of.Treasury Snyder
notifies International Monetary
Fund-par of U. S. dollar will re¬

to Be Revamped
inj the stock market lengthened the

two utility yardsticks, the average
yield and average price-earnings
for seasoned utility operating company stocks.
A number of

ratio

utility

holding

plans had been adjusted to
shortened yardsticks in the past year, and now may have to be "cut
back."
Due to the leverage factor an increase in the; yardsticks of
one-fifth may mean a shrinkage of^half or more in the equity for Niagara & Eastern, and now con¬
holding company common stocks. solidated into a large operating
Hence
equities
like
American company, Buffalo Niagara Elec¬
Water Works, American Power & tric.
This
was
supposed to be
Light,
Electric
Power,Middle done by Nov. 1, but Niagara re¬
West and Niagara Hudson have cently asked for a year's exten¬
dropped about one-half in value, sion of time. It also filed with the
although operating stocks such as Public Service Commission at Al¬
Commonwealth

Edison

cific Gas declined

and

Pa¬

only about 15-

25%.
•

Two

large holding companies—

National Power
lumbia

Gas

pleted

& Light and Co¬
substantially com¬
plans
before the

—

their

worst of the break.

& Electric
for

sale

is

of

American Gas

integrated excepted
property, and

one

General Public
is about 80%

Utilities'

main

integration

company

program

completed. National

(which has a dual regula¬
tory role with the SEC) a new
plan to merge Central New York
bany

and

Power

New

York

P.

&

L.

at

$35 j>4r
for

fixing

* values

currency

other member nations
In

letter

a

to

Camille

managing director

of the

(

acting

Chairman

as

At the moment American

Our

tice that

United

the

gold

States

the

will

Inasmuch
of

the

Bretton

before

:

the

•

/

end

intelligence—
it

to

do

the

the ;y

terms

well

programs

under

but

way,

seem

to

think it

over-valued).

5 Columbia

-

Gas

barely

wire"

the

with

bond issue and

Gas & Electric

.which

has " completed one
"token" sale of subsidiary stock
(Ohio Edison) hut has deferred

ern,

those

"got in
huge two other sales.

its

sale of Cincinnati

Works'

stock. The

sale of

sustain

American Water

a

common

stock
syndicate
may
moderate loss,
since

a

the
stock
broke from the offering price of

plan is dependent on the
huge amount of stock in

a

new holding company, set up to
take over the water works inter¬

ests..

Standard Gas' plan is con¬
26 to 21% after some half or more
tingent on sales of operating com¬
of the
issue had been reported
pany stocks; one offering was de¬
placed—however, at this writing ferred because bids were deemed
the price has rebounded to 23 Vz.
inadequate, and this was before

Tlie sale of these two

satisfaction

to

the

promoters

tasks

that

After

all

Dec.

12, with

the

Fund

would

ture

value of their respective

many

troubles

great

time for readjust¬

affairs,

action.

we

of

world

not/been

have

.

with

But

acceleration

per¬

mitted any breathing spell what¬

Instead

soever.

probably

cur¬

and

our

more

*An

problems

numerous

address

Snyder

before

:

by

are

even

the

Secretary
Executives'

market.', The subsequently without the formal Club, Milwaukee, Wisconsin, Sept.
consent of
the
directors of the
company
however, reduced
23,1946.-,,.
y
refunding program, and
should its own fixed charges by substi¬ Fund. It is expected that under
this arrangement a degree of sta¬
promote the common stock to the
tuting a bank loan for bond is¬
small group of
"integrated" and sues, Northern States Power has bility will be achieved in foreign
regular dividend-paying holding suffered from a
glut of reorgan¬ exchanges among the members.
company issues.
As a result, Co¬ ization
The text of Secretary Snyder's
plans (three new plans
ables

Columbia

to

issues

en¬

complete

the

break

its

ip
has,

war

future

well-being of
therefore of all

and

our

na-i

depend
upon
the
course
of action adopted by this
country in dealing with our
eco-^
nomic problems and in the handling of our political interna¬
tional relationships.
Success
due

labor,

failure

or

to

will

not

or

any

than

more

war.

The

was

outcome

will result from the combined

tions

be

government,
business,
any other group acting

individually
winning the
and

contributions

of

the

/

ac-

each

citizen, each organization, and the
government. Upon all the respon¬
sibility falls, and the result will
be shared by all alike.

.

;

The Wartime Demand

During the

war,

between

a

tremendous '

the

supply of con¬
sumer goods and the demand for
such products was created. The*,
gap

necessities of winning the war'
always came first. Meanwhile, a:
larger demand than ever before V
created

was

ments to

as

income

our

pay-f

workers and- others;

war

attained the highest levels in his-

tory*

4

This

no change beyond a
margin of 10% is to be permitted

during the

were

tions,/ will

and

in terms of gold or of the

(foliar,

of

course

the /

we

today.

years, it
only reasonable that

seem

before

rencies

us

ment and to reflect upon our fu¬

t

par

the

of

be allowed

we

statement of the

a

confront

The

nation,

problems of the past few

of

Monetary Fund.

the war, are to furnish the manag¬

of

spirit to face the

and

age

nations, except those which
occupied by the enemy in

director

nations

face

^

It requires a great deal of cour¬

were

ing

urgent

in the period
of readjustment after war.K

Under the terms of the charter of
the International Fund, the mem¬
ber

be

inevitably

John W. Snyder
1(

V

years.

—

.

problems that

sterling-dollar rate would not be
changed, the problem of a new

the International

people

able to tackle

cause of its low price)
advanced completion depends on
sale
or
sharply during the declining mar¬ exchange of certain holdings of readjustment of the "key cur¬
rencies.": for the time being has
ket—from iy4 to 2V2, later selling
subsidiary equities: This is also
been
settled, with considerable
off
to
2
(conservative
utility true of Commonwealth & South¬

statisticians still

and

—

we

a

iqystery and perhaps popular be¬

intends

cooperate
j shall

agreement,

States dollar, the letter of Secret
tary Snyder has a special signifi¬

'

and

courage

nations of the Fund is to be'fixed
in terms of gold or of the United

$5,000,000

with

acts

as

other

E-Bonds'

healthy and strong.

are

than'they

the

government

the par value of all other member

of the year. ; V

will.

we

per ounce.

Woods

+

op-*"

For.' if

un¬

reduced from

and

good. This will, remain true provided
our

in

par

under

as

be

value

is

As

content of the

dollar

and

bonds

fiscal affairs

p'ortunities.

of

Advisory Council on
International Monetary and Fi¬
nancial
Problems, gave formal no¬

common

leaving only

under

outlook

heed

/. Electric Bond & Share and its
cance.
As Hugh Dalton, British
stockholders, sub-holding companies, American
few odds and ends. Power & Light and Electric Pow¬ Chancellor of the Exchequer, has
already
given
notice
that
the
The "stub" stock (somewhat of a er &
Light, all have integration
to

economic

the National

re¬

has distributed its important hold¬

ings

items—including terminal leave
anti-inflationary.

J

accrued interest—as

Inter¬

Monetary Fund created
by the Bretton Woods Conference,
Secretary of Treasurer John W.

Snyder,

some

expense

-

Gutt,

national

With Buffalo Niagara Electric. The
gold will remain at $35
parent company's bank loan, in-v
capitalization of Bi N. E., has been
$40,000,000 to $35,000,000 and may be cut by an¬

government must maintain high taxes
time," and price control "a little while longer." Affirms
^Treasury policy of reducing expenditures, balancing budget, and
| lowering public debt. Cites "non-cash" basis of some Treasury

"for

>

of

of Fund.

Secretary of the Treasury

Treasury Secretary states

;

•

Furnishes basis

ounce.

/.yV

/f

gold value of

present

changed,

eurred in connection with the

By JOHN W. SNYDER*

Secretary

Holding Company Plans May Have

;

Imminent Fiscal Policy

Unchanged
;

Thursday, September 26, 1946>

of

limited supply in the face
.increased demand, more- f

an

over,

was

accumulative.

find that

we

our

(Continued

people

on page

Today,"
ready

are

1559)

^

,

How Soon Must

.

lumbia has had
er

a

somewhat small¬

were

filed

to

supersede

the

old

letter to M. Camille Gutt follows;

We Go Back to Woik?

decline than most

holding com¬ one, already approved by the
being
currently SEC), and niay now have to com¬
compared with a high promise between old and new.
thought that the divi¬
.

pany

issues,

around 9V2
of 14. It is

dend

<;

rate

may

-now

improve

substantially over the small dis¬
tributions made in the past.
Niagara Hudson Power had been
ordered by the SEC to dispose of
about half its system, the western
portion formerly controlled by the

sub-holding

Central

Southwest

amended

its plan several times due to a
fight between Middle West (par¬
ent holding
company) and the
independent common stockhold¬
ers;
was

Buffalo

company,

&

My dear Mr. Gutt:
:,In reply to your letter of Sept.
12, 1S46, which was received the

day,

same

behalf

I have

of the

ernment,

United

on

Interna¬

tional Monetary Fund that the par
of the dollar is fifteen and

value

contingent
(Continued

on

the

on page

sale

1552)

of

a

twenty-firsts
(155/21)
grains of gold nine-tenths (9/10)

Portland Electric Power
6s, 1950
Portland Electric Power Prior Pfd.

rate

the

identical

Monetary

with

YORK 6, N. Y.

Direct Wire to
Chicago

to

within

is

that

I

communicated
value

of

the

value

shall

dollar

be

the

for

the

par

of the Fund as mentioned
in Article XX, Section
4(b). This
par value of the dollar is hereby

Federal Water & Gas Common
Public Service of Indiana
Common

Puget Sound Power & Light Common
BOUGHT

—.

SOLD

—

QUOTED

Paine, Webber, Jackson & Curtis
ESTABLISHED 1879




The
does

United

not

States

believe

Government

that

necessary to make any

rangements
the

the

par

for

value

the

of

it

will

be

special

ar¬

discussion

the

dollar

of

a

of

12

to

sub

s

t

a n

t i

a

justment
to

1

I

am

demand, large
supply, and rising prices,

will

A.

W.

Zelomek

sense

to 5

of

period of high level business ac¬

with

;

,

am

sion between 1929 and 1932.

year
Peak in Business Activity to Come

Early Next Year

tivity after the coming temporary
\

the

period.
In otherusingj'bust" as being
similar to 1920-21, although less
extreme, and bearing no relation
whatsoever to the great depres¬

take

optimistic in the

down¬

before

levels off for its longer

postwar

words, I

expecting at least a 3

recession.

we

the phrase is that this

readjustment

term

•'

place.

were

we

use

economy

business read¬

have

we

be followed by a sharp

ward

rather

a

as

But when

high inventory

money

pe¬

months during
which

communicated to the Fund for all
territories and possessions of the
United States. ?/■''''/;■ /:y.

Delaware Power & Light Common

be

then

riod of 9 to

pur¬

poses

when I

that there will

here

"boom and

first postwar business cycle is one

that

lieving

Government

par

the
be¬

of

sense

that,

war.

a

must be very care¬
ful
about defining
"boom" and
defining "bust."
What I mean

pessi¬
in

we are

after the last
say

am

.

mistic

re¬

*1

in
situation, just

bust"

w

months.

Monetary Fund.

States
the

e

I am pessimistic in the
inventory replacement boom

Certainly

the
f

next

ferred to in Article
IV, Section 1,
of the Articles of
Agreement of
United

pessimistic and optimistic.

time

some

the

1944,

both

am

of expecting a peak in the present
be reached
/■■/■■;;•

sense

weight and
fineness of the United States dol¬
lar in effect on July
1,

The

Co.

Fund,

I

i

entry into force of the
of
Agreement
of
the

International

desires

&

we now are simply
enjoying inventory replace¬
boom, turning into 20-30% declines in production and prices -//:
in 1947.
Advises caution in construction outlays, in anticipation
| of 10-20% reducton in building costs. Over long-term, Mr. Zeloi; mek forecasts subsequent 3-5 year high business activity.
[

ment

exchange prevailing on
Oct. 28, 1945, the sixtieth day be¬
Articles

*

Economist holds

:

of

the International

Gilbert J. Postley

By A. M. ZELOMEK*

Economist, International Statistical Bureau, & Fairchild Publications

fine. This par value, based on the

fore

BROADWAY, NEW

honor,

States Gov¬

inform the

to

but the plan finally approved five

American Gas & Power
3-5s, 1953
American Gas & Power
3.6s, 1953

29

the

The

reason

,

also optimistic in believing

with

the

first

for

j

this is keyed in

postwar

This
business cycle is
leashed by the drastic decline in purely and simply an inventory
(s) JOHN W. SNYDER
security prices are utterly un¬ replacement boom. After V-J day,
Secretary of the Treasury, and
founded,
A lot of the talk that total inventory replacement re¬
Chmn., National Adv. Council
sprang
up
about a "boom and quirements could be reliably esti¬
on International
Monetary and bust" situation was sheer non¬ mated at around $8 billion,' give
Financial Problems.
or take a little.
This* made allow¬
sense.
Fund.

v

I

am

that

some

of

the

wild

fears

un¬

Sincerely yours,

Mr. Camille

Managing

Gutt,
Director,

International Monetary Fund,
Washington 6, D. C.

ance
.

,

*An

by

Mr.

Zelomek

for

materials

the
and

liquidation of poor
for the higher in¬

Salesmanship Club of Dal¬ ventory required by the higher
(Continued on page 1564)
September 19, 1946.

before

las,

address

inventory picture.

Volume 164

Number 4528,

■

THE COMMERCIAL & FINANCIAL CHRONICLE

J 535

•—

:

.><.

President

Truman

! recognizes
war

Professor

community and: head of the in¬
vestment banking house of Gold¬
man,

his

.

outstand¬

ing service in
the

sented

pre¬

with

sented
the
-

•;u

■:

duty
the

Pro d

u c

Board

May,

War
t i

o n

from

1941,

to

'

s
i
.s Septemberj
as assistant to the chairman
of the War Production Board and

1944,

-

later

vice

as

chairman

-

of

the

"

board, Weinberg procured the ca-i
,*' pable personnel needed to fulfill
successfully the mission of the
board in its guidance of the main
civilian war burden. Mr. Weini

,

berg

,

glamorized

year"

jobs and
qualified to get

*

the

"dollar-a-

recruited

the

men

goods

pro-

duced.
r
r

Weinberg, who
Brooklyn, has been a
figure

was

Wall

Street

He

§ years.

born in

well-known

in

came

up

for

many

the hard way,

holding varied jobs in

the finan¬
cial center starting with office
boy
until he reached the position he

holds.

now

f

Says same errors of )
judgment and of policy exist as after World War I, and that 1
Administration's efforts to prevent violent fluctuations fail. Holds 1

and

■

his

At

more

or

•

-

lift

to

v'

forces and factors in

and

life

employment
quickly to a

recurrently

to

it

there,

while

*

time
the

demand

the

or

the

is for

ly

have

near,

peak.

years

the

and

cycle
Russell

lead¬

of

controlling

Weisman

Business

field

j

Cycle

economics

of

we

(Continued

on page

they have not yet
their mind whether, to

ratify it, and that their attitude
may
possibly be influenced by,
the impressions he would bring
back from the forthcoming meet¬

the

Woods Agree¬
On

the

parture
held

Vi

the

he

call

at

that

it is

the

necessary

Treasury

*

boom

in

quoted, which
is

rare

came

event

and

to

be

May.

of

favor

back

disappointed
owing to
y.;'
in this coun¬ the way in which the American
try to arouse interest. What is delegates brushed aside practi^
even more remarkable is that he
cally all his proposals. Official,
Paul Einzig

did" not
usual

a

enough

confine

himself

to

the

and

*

Zealand

towards

in

circles

utterly

of resentment,

London

of their

ing

for

saying a good deal about the
desirability of measures and poli¬ Supervisors of State Banks, Cleve¬
cies that will bring an end to the land, O., Sept. 19, 1946.

TRADING

role

in

the

tional Monetary Fund

International

Bank

(Continued

MARKETS

Recon-

1561)

IN

"OLD"

r

eral Electric

William

E.

Rutland Railroad

Colony Railroad

Denver & Rio Grande West.

St.

Louis-San Francisco

Diiluth, So. Shore & Atlantic

St.

Louis

Seaboard Air Line

■

<■
'•'a

:'4-'•!I

■

:'»..•

v.■■■ ;,v
-V;»:>.V

■

:V'

Hp

I

'

"ft
4
'

•'/

V,

.

'

'rVt J ~'

.

•

-

"'■?

'

vft:

*

1
''i

..

•

'' *

f: ' k
* >'

: "
-V {• -

:

"Z'-

ivjii

5

_

••

-

•

*

Southwestern

Western Pacific

Y., New Haven & Hartford

Wisconsin Central

N. Y., Ontario & Western

;•£''* "
*
**
-

''

THElYEARftROUND! S;

ALL
:

y.

' v ;'. .%■

t

N.

LABOR DAY
'

Co.); Joseph D. Kee-

Corp.);

;

•

Missouri Pacific

r't

fhan (c/o Chicago Federation of
Xabor); James S. Knowlson (Stew¬
art-Warner

•

Old

Chi., Rock Island & Pacific

G. A, Saxton & Co., Inc.
70 Pine Street,

^

.

New York 5, N. Y.

WHitehall 4-4970

.Levis (Owens-Illinois Glass Co.);'

Teletype NY 1-609

C.

Meigs, (The Hearst
Corporation); Donald M. Nelson,
(Continued

1564)

on page

IT'S a fact... butwe'relike it that way. In the
we always the prowl
office and out,

r'!

on

for facts that will be of value
That

Richmond Cedar Works ;

it

Tennessee Products

American Vitrified Products

Washington

Properties

National Press Bldg.

to

means

Shirt

dealers.

Solar

need help we'll give

informed information

to

dealers has resulted in

C A. S.

Campbell Co., Inc.

mutually profitable business. Incidentally, we've
a

lot of other

strings to

our

bow,

too*... so

Analysis

just

phone, wire or teletype us when you need help.

Shop

with warrants

;
:h

Manufacturing Corp.

5% Sinking Fund Debentures, Due 1960

We've found that giving prompt,

you fast.

N. Y. & Rich. Gas

National

when you

to

BOUGHT

—

on

request

SOLD

—

V

QUOTED

Montague Rod & Reel
.v

.

New York Hanseatic Corporation

y,,;;-'

"120 BROADWAY, NEW YORK S, N. Y.

H. D. KNOX & GO.
11

Broadway, N. T. 4

Tel.

27 State

DIgby 4-1388

Tel.

Tele. NT 1-86

St., Boston 9

Capitol 8950

Tele. BS 169

Established

R. W.

1926

68 William

Pressprich & Co.
l

Street,

NEW YORK 5

The Cross
Common

&

Company

201 Devonshire

yy

;

•

Preferred

F. H. Holler & Co., Inc.
111

Security

Dealers

Ass'n

Broadway, New York 6, N. Y.

BArclay

7-0570

NY 1-1026.




V Teletype NY 1-993

BRITISH SECURITIES

Street, BOSTON 10

■ ^H.

:

MUNICIPAL,

United
Exchange
RAILROAD,

Kingdom 4s, 1960-90

Bought

—

Sold

—

Quoted

UTILITY, INDUSTRIAL BONDS

AND

Y.

Telephone HAnover 2-1700
/

Members New York Stock

PUBLIC

N.

I
;;

GOVERNMENT,

Members

Teletype: NY 1-583

Telephone: BArclay 7-5660

INVESTMENT

STOCKS

Goodbody &. Co.
Members N. Y. Stock

Exchange and Other Principal Exchanges

115 BROADWAY

Telephone BArclay 7-0100

,

and in th$

for

on page

Chi., Milw., St. Paul & Pac.

-

Interna¬

Preferreds & Commons

V

the

advantage

strong position for securthemselves virtually
a

dictatorial

the

.that

felt

United States took full

generalities about the need

New

full

An

I.

re¬

pro¬

Lord Keynes, though in
collaborating with the
United States at almost any cost,

himself

address by Mr. Weisman
before the National Association of

are

(Libbey-Owens-Ford
Co.); Harold J. Boeschen-

stein, (Owens-Corning Fiberglas
Corp.); Lemuel R. Boulware (Gen¬

':V

to

was

reaction

a

war-born

Biggers

.

-

meaning of

sults of the Savannah Conference

allowed

Bretton Woods Agreement he re-

1560)

■..

the

foundly dissatisfied with the re¬

Treasury,

and

.-.i-

understand

To

this remark,

Press

a

Conference

up

ing. '

of his de-

eve

a- good
deal over
about the business establish mutually beneficial per¬
possible methods of sonal relations. When questioned
it. But academic about the attitude of Australia

studies in that field have been of

,

•

that

marked

for co-operation and the hopes to

talked

many

apparentfearful; of

from

the

In

At the pres¬
ent time po¬

ers,

war.

Control

stabilization

at,

al¬

inevitably must follow sooner
later the boom engendered by

or

in

up

Ex- |

made

ment.

What

which

reaction

the

of

Bretton
>

most

boom

of

off

ward

stabi¬

lize

depressions.

to

set

of

of#-

under

y

lead

and

that

Chancellor

tutions set up
-yy 'y

economic

our

booms

Conference

British

out

the two insti¬

they really have in mind is gov¬
ernment policy that somehow will

substantially
higher level
and

create

that

Points

B oards

less regular intervals interest in

pro¬

Bank.

Governors

stabilizing business
and industry is revived. In time of subnormal
activity, government
is called upon
1
<♦>
duction

in

LONDON, ENG.—The Chancellor of the Exchequer is now oh
way to
Washington to attend the inaugural meeting of the

be

can

r

Merrill

Fund

attitude

,

Weinberg
received
the
award
along. with ' • James
S.
AdamS,- (Standard Brands, Inc.);
Hiland, G. Bateheller,' (Allegheny
Ludlum Steel Corp.);'William L.
Batt, Sr., (SKF Industries); John
Glass

dictatorial

chequer's forthcoming visit to Washington may result in a changed
j
attitude which may lead Australia and New Zealand to ratify *
Bretton Woods Agreements. Looks for abandonment of uncom- }
promising policy followed by former Treasury Secretary Vinson. '

Economics, Western Reserve University

'^Mr.

D.

Savannah

S.

World

level under government compensatory action.

litical

Mr.

u

Keynes' dissatisfaction arising from

U.

i• v

elasticity and flexibility be promoted in our economy; (3) budget
be balanced; and (4) public debt be carefully managed..

a

with

On

with

1 "v

,,

Medal for

Merit.

Sidney J. Weinberg

London observer recalls Lord

v

,

prevented and present error lies in
attempting to perpetuate disordered Wartime economy. Recom¬
mends (1) attention be diverted from jobs to production;
(2) that

the war when
was

of

business fluctuations

winning of

he

WEISMAN*

Washington Visit

By PAUL EINZIG

Economist points out despite vast research into Business
Cycle, mis¬
takes of judgment are made and there is little
prospect of avoiding
"booms and bust." Lays failure to attempts to stabilize at boom

-

»

Mr. Dolton's

Associate Editor, Cleveland Plain Dealer

.-•T' Sidney J. Weinberg, prominent
member of New York's financial

Sachs &
Co., was sig¬
nally honored
Sept.
18
for

By RUSSELL

'•

v

/S

■

Stabilization

»

-

their outstanding services in
-effort.

'

W

of Economic

Awarded Merrl Medal
•,

gi

''

Weinberg, WPB Aides

NEW YORK 6, N. Y.

Teletype NY 1-672

■

j

1536
i
,

THE COMMERCIAL & FINANCIAL CHRONICLE

t

BALTIMORE

Reports Indebtedness Still Rising
Commerce

Department estimates total U. S. public and private
at $400.5 billion: at end of 1945, an increase of
$35.4 billion for year. Rise due to Federal borrowing and to busi-

Bayway Terminal
;

Drug

Common

j;

.V

C. A. Reed
Class

B

The

•

stein bros. & boyce
Members New York & Baltimore Stoek
and other leading exchanges
S. CALVERT
ST., BALTIMORE 2

V'

;

total

net

in

debt

the

This compares with
of

crease

a

record in¬

Prospectus

furnished

on

$42 billion. This increase

request

Sheller
Dwight Mfg. Co.

Report furnished

tially offset by debt reductions in
other spheres, notably a decline of
billion in corporate shortterm debt, largely made possible
by decreased Federal income tax
liabilities.

request

on

debt
•

request

on

Mercier, McDowell

Inquiries invited

& Dolphyn

dii

Pont, Homsey Co.
31

MILK

Detroit

Buhl

STREET

BOSTON

Stock

Exchange

Tele. DE 507

Teletype BS 424

Y. Telephone

CAnal 6-8100

LOUISVILLE

Corp.

million to

Dividends
2

have

months

March

been

the

on

After

was

old

Girdler

3-for-l

cents

paid every
beginning

50

able

split in
paid
Sept.

has

cents

Nov.

to

Oct.

stock.

June

of

end; long-term cor¬
porate debt, down $95-0 million to
a total of $39.3 billion; and farm
mortgages, down $190 million to
a
$5.1 billion total, the lowest

increase

lion;

Corporation

0810

New York Tel.

New York

10, Mass.
Teletype B8 189
HAnover 2-6929

1st

Philadelphia

Allentown

Washington
Harrisburg Portland

Easton

debt,

up

dicts
It

that

-

Incorporated

-.

Bird &

Gruen

Bell Tele. LS 186

porate

debt

$14.7

the

decade has passed
.
since
of the mid-thirties were

a

.

.

events

in

would

her in that

never

believe

them

to be real.

The

Vice

then

-

a

"Think of that

Presi¬

an

felt

touch

such

thor

au¬

And

could

he

the

abdication

that

Al¬

British throne-

;

V\

:

v

.

Why, this Simpson woman," he

by Mr. Chamblin

ever

restored

be

.

«

believe

by

deficit fi¬

/.

.

Fortunately, Mr. Garner is still
but
unfortunately he

alive
has

address

would

great nation felt prosperity

a

nancing.

i

would say, "is deserving of a place
*An

as

Navy

a woman.

domestic problems
believe
that
future

of

could

Walter Chamblin, Jr.

the

of

British

couldn't

generations

by

Edward

resigning

man

the

ing away the Roman Empire for
Cleopatra."
'

of

dramatize

in

It's just like Mark Antony throw¬

only

an

Admiral

to become third mate to

Shakespeare.

the

way."

Then he would rephrase the sit¬
uation this way:
•;'/
:;
# ?

..V ^

He

18, 1946.

v

.

.

lived

forties

to

are

that

see

as

much

the

mid-

in need of

Shakespearean pen

a

the world
of 10 years ago ... as the parade
(Continued on page 1567) • ;
as

on page

Trends in Industrial Relations

noncor¬

billion;

and

By DONALD R. RICHBERG*

1544)

Contending labor monopoly and labor dictatorship are destroying,
free enterprise* Mr. Richberg asserts as long as labor unions en-<
gage in warfare against employers and public they must be tyrannical.
Says labor movement has become political, and portends

RICHMOND, VA.

.

VIRGINIA—WEST VIRGINIA

Son, Inc.

NORTH and SOUTH

Indiana Pub. Serv.

Memos

on

Request

V

?

by class. Urges clarifying line between lawful and.
strikes, and recommends legislation to that effect. Advo¬
cates Republican-Democratic coalition to lead with minority labor :
dictatorship.
'
government

unlawful

;

CAROLINA

The main trend in industrial relations is toward the destruction
MUNICIPAL BONDS

of

free economy

a

-

-F. W.-

BUCKLEY BROTHERS
Members
Los

New

York,

New

1420

Philadelphia

and

Angeles Stock Exchanges
Also

Teletype BS 373

yet

.

future

Member

York

Walnut

Curb

of

New York

CRAIGIE&CO.

Los Angeles

Bell System

Teletype:

RH 83 & 84

Wire System

These

barons.

ness

by

V

are

obscured

a

is just

tors.

the

Philadelphia, New York and Los Angeles

simply do not understand
ruling ciass of labor bosses
as undemocratic as a rul¬
ing class of feudal lords or busi¬

They
that

by

-

—

tried to evade the anti-trust laws.

dicta¬

labor

trends

ST. LOUIS

between

destroyed

Telephone 3-9137

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

€>—

government
are
being

RICHMOND, VIRGINIA

Exchange

Street, Philadelphia 2

by labor monopolies. At the same time democratic

of

processes

Telephone Liberty 8817

.

sociation, Atlantic City, N. J., Sept.

Dealers in

Watch Company

Northern

Eastern Utilities Assoc. Conv.

Square, Boston 9, Mass.

.

that

history comparable to Helen of
Troy, but nobody ever thinks of

•

10 P. 0.

lamented

before the National Petroleum As¬

consumer

(Continued

Floor, Kentucky Home Life BIdg.
LOUISVILLE 2, KENTUCKY

Nn-Enamel

General Stock & Bond Corp.

only yesterday

Garner

generations

>

M. J. Whittall Assoc. 2nd Pfd.

Pre¬

fantastic

so

Noncorporate urban
mortgages totaled $27.3 billion at
the end of the year; short-term

Lovett Grocery

PHILADELPHIA

U. S. Sugar Corp.

m

time,

$957 million.

&

Long Distance 238-9

Boston Sand & Gravel

seems

$2,541 million;
debt, up

up

same

to administer government.

men

and

commercial

policy and, at the

Republican victories in November.

John N.

$162 mil¬

commercial and financial

Federal St., Boston
HUB.

debt,

and short-term

..

49

debt,

was not the only debt to
during 1945. There were

short-term

financial

m BANKERS BOND £2i

Securities

Contends Truman is inconsistent

out ClO-endorsed

carry

seeking conservative-minded

bert

Government

urban mortgage

Willett

15th.

Incorporated

Tel.

Federal

Winn

record

billion

to

prohibition of strikes and eventual Fed-

of profits.

notable increases in noncorporate

W. H. Bell &Co.
Investment

total of $13.7

Murphy Chair Company

and
pay¬

stock

H.

debt, down $349

the year's

however,

Ass'n

50

1st

declared

been

1st

Turf

Consider

year

this

1st

American

a

in state and

were

level since 1915.

American Air Filter

at 21 y2

corporate
at the

billion

Shakespeare is needed

a

of last decade. Cites bad labor

dent pined for

Other declines

The

Reed-Prentice

$46.5

year's end.,;

at

Bldg., Detroit 26

Cadillac 5752

Short-term

totaled

local government

MASS.

9,

HANcock 8200
N.

Members

was par¬

$8.8

Manufacturing Corp.

Products

increased

regulation

trying to

increase in the Federal Government

conclusion

says

events

communism with

or

eral

Although the war-time rate of

successful

Boston Wharf

Analysis

ism

was
considerably reduced
during 1945, the Federal debt in
the year the war was brought to a

Electromaster, Inc.

Chamblin

/

-

of Manufacturers

properly paint
situation, waver¬
ing foreign policy, and President Truman's conflicting, confusing
and unpredictable domestic program as situations
requiring ade¬
quate delineations. Says labor unions are leading to Federal Stat-

debt

DETROIT

BOSTON

Descriptive

Mr.

unbelievable

United

$62 billion in the total

Bell Teletype BA '393
New York Telephone REctor 2-3327

Purolator

Vice-President, National Association

States,'public and private,
amounted to $400.5 billion at the end of 1945, an increase of $35.4
billion from 1944, the Department ~
of Commerce announced on Sept. debt in 1944, the last year of full25.
■: v'.-vf. scale war expenditures.

Exchanges

'.v

By WALTER CHAMBLIN, Jr.*

and municipal
and mortgage
V''■

ness loans, only partially offset by reduced state
indebtedness. Sees end in decline of non-corporate

borrowing.

Common

Noxzema Chemical

6

of Unbelievable Events

*

indebtedness

Monumental Radio
Emerson

Thursday, September 26, 1946

Delusions of Labor Politicians

America,

paradox

in

common

with the

that outstand¬

ing leaders of

Bank

and

Stix & Co.

Sterling Motor Truck

INVESTMENT SECURITIES

•

Insurance

Stocks

Industrials—Utilities
Inactive

Warner

,509 OLIVE STREET

Company

Securities

Boston

77 Franklin

Exchange

Street, Boston 10, Mass.

Tel.

Portland

Stock

Liberty

St.Louis 1,Mo#

H. M.

Providence

Byllesby & Company

Members 8t. Louis Btock

PHILADELPHIA OFFICE

2340

Springfield

Stock

Exchange

Telephone

prise

and

their

hatred

of

Donald

that

Richberg

R.

;

*

monopolies, and the most
labor " bosses regularly

all

reassert their faith in
Most

of

these

labor

democrary!
leaders

quite sincere. They simply
understand that legalized

73

DES MOINES

of

tive

Teletype
PH

good of the greatest number; and

enter¬

are

do not
labor

monopolies are far more destruc¬

Exchange Bldg. Phila. 3

RIttenhouse 6-3717

to

devotion
free

ruthless

F. L. PUTNAM & CO.. INC.
Members

emerging enjoys, like previous
ruling classes, the delusion that
it
is
working for the greatest

pro¬

their

claim

So. Colorado Power

Secondary Distributions

con¬

stantly

Empire So. Gas

England Coverage

•

through a social revolution. The
new
ruling class that has been,

labor

New England Markets
Retail New

rest of the world, has been going

a

free

economy

than

all

monopolies that ever

the business

SALT LAKE CITY

SPOKANE. WASH.

WHEELOCK & CUMMINS

MARKETS

for

INCORPORATED

of

&

Iowa Municipal
Bonds
DES
PW*

4

MOINES

BUILDING
,

9,

IOWA
T-t,

DM 184




request

St., Philadelphia I

PEnnypacker 5-8200
'

*Private

or

MINING

Established

BOENNING & CO.
1606 Walnut

EQUITABLE

on

UTAH

of

PH 30

Phone to N. Y, C.
COrtlandt 7-1202

1898

Std.

Pac.

11:30
Sp-82 at

10:45 to

Time:

formulas

found

whereby
tural

men

and

can

consequences

programs

avoid the na¬
of their acts.

delusions of labor
politicans include the following:
1.
can

present

That

be

the high

met,

or

cost of living

reduced by

even

increasing wages.
That

higher ;., wages
and
without increased

hours,

production, benefit labor.

Members Standard Stock Exchange
of

Brokers
'

""

-

Spokane

Dealers

Peyton

3.

That

forced

...

-

Underwriters

Building, Spokane
Branches* at

Kellogg, Idaho and Yakima, Wn.

dictation,

')>
en¬

by

strikes,

labor

can

bigger
and
longer
increase the income
out of a re¬
duced national income.
!
of the wage earners,

(Continued

CORPORATION

BROKERS

Phone S-6172

from

STANDARD SECURITIES

Members Salt Lake Stock
Exchange

Teletype 8U 67

Exchange

other hours.

W.H. CHILD, INC.
Stock Exchange
Building
Salt Lake City, Utah

of Orders

Quotes call TWX Sp-43 on Floor

A.M.,

STOCKS

Paper Co.

Memos

SECURITIES
For Immediate Execution

Southern Advance
Bag

to

,

BROKERS and DEALERS

Grinnell Corp,
We invite offerings

NORTHWEST MINING

common

ruling class is that it has

every

shorter

trading markets

delusion

Another

The

gather ever-in¬
to
dictate the

power

of events.

course

2.
TRADING

should

it

creasing

♦An

on page

address

1561)

i'

by Mr. Richberg
Meeting of the Na¬
tional Petroleum Association, At¬
lantic City,
Sept. 19, 1946. Mr.
Richberg is a member of the law
firm of. Da vies, Richberg,. Beebe,
Busick and Richardson, Washing¬
at the Annual

ton, D. C.

'

Volume 164

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4528

'

mi

0%

0

1

ifMffi

m

"Tools for Profil"

The Goals of NSTA

Talk

k;By THOMAS-GRAHAM*
President, National Security Traders Association

Mr. Graham points out
should

be

(1)

of NSTA and

progress

At

Government in fiscal and economic affairs, and

the

istic'system.

Says

America's

destiny

lies

The National Security Traders Association was founded

.

with

ciation

is

promote
general

fare

<§>

this

its

has

members,

to

con¬

duct, to pro¬
vide the benebe

to

from

sonal
acquaintanc e

the

who

one

interest today because of the need
increased productivity.
It is

for

becoming increasingly evident
that labor is not going to provide
the iricrease in efficiency which
will curb inflation and improve
our
living standards and hence
the

universal

interest

in

I feel that I am well qualified to address this
gathering of con¬
trollers—and I appreciate the invitation to do so.
For more than four

mech¬

and privileged
officer on three oc¬

been honored

years

anization

group

pertinent

been
the

particular strength
with State and Federal
(Continued on page 1571)

to

publications

will

The
of

affiliates

26

composed

is

the

at

1946

Convention, Seattle, Wash., Sept.
17, 1946.

"Main

Every

3,254.

Association

Traders

scattered

88

and

■

the

gen¬

doing

business

with

control¬

& Co.

of

the food and grocery business you

therefore, well

are,

situation
In

of

'

,

-

J,

„

.

.

.

By JAMES K. VARDAMAN, Jr.*

.

^

one

labor

price considerations with

a room¬

ful of practical professional con¬
trollers.

in

plain words there
profit, or there will be
continuing supply.
—

must be

a

On the other hand, his product

(Continued

fore

America,
17, 1946,

New

of Southern California

Merges its Business
of

First California Company

RESOURCES, experience and personnel of Nelson Douglass
& Co. and First California. Company have been
com¬

.

complishment,

the

world

trend

sweep
as

all before it in this country

it has in nearly all other coun¬

tries of the world.

After

structive
ment

cial

in

etary

our

Vardaman

at the Dinner Meeting of the An¬
nual Conference of National As¬

sociation

of Supervisors of State

Cleveland,

Banks;

O.,

Sept.

in

govern¬

biggest

machinery.

single

financial and

mon¬

there are
other wheels in this machinery
just as important as the Federal
Reserve System and all of these

our

of

There

19,

1946.

we are

and

work

wreck

to¬

certain to strip

and find ourselves

gears

immobile
side

But

must mesh

gether, else
*An address by Mr.

the

is

wheel

spending more than 20
in investment and commer¬
banking, I absented myself wheels

years

influences

and

an

along the road¬

human progress.
is

the

(Cintinued

Secretary
on page

of

1568)

the

bined

to

form

a

securities investment institution of

greatly

enlarged strength.

Acquisition of Nelson Douglass & Co., long established in
Southern California, represents a most
First California

important

move

by

Company in anticipation of tremendous

advances in California's business economy.
The addition of the Nelson

.

Douglass organization will

more

effectively enable First California Company to keep pace
with the state's

rapidly expanding population and industrial

growth.
We have

prepared

an

ANALYSIS of

First California Company
incorporated

Cherry Rivet Company
Copy available

on

INVESTMENT SECURITIES

PrivateWires between SanFrancisco, Los Angeles, New York and Chicago

request

-300

650 South

Montgomery Street

Spring Street

SAN FRANCISCO 20
;

L. D. SHERMAN & CO.
30 Pine
•

Telephone

.

.'

.

.

WHitehall 4-5540




,

-

Street, New York 5
,

v

.

.

,

LOS ANGELES 14

Teletype SF 431-432

Teletype LA 533

SEVENTEEN
,

/

Teletype

NY 1-2233

OFFICES

.

.

.

SERVING

CALIFORNIA

1562)

address by Mr. Willis be¬
the Controllers Institute ©f

In my

toward collectivism" will certainly

on page

*An

with that

opinion the 48 great State banking systems of the respec¬
tive states form the securest foundation upon which rests bur entire
structure
of
private enterprise.^
Without those banks it is hard for for six years to do a job—a purely
destructive job—-with the United
me to conceive just how our pres¬
ent system of political and social States Navy. On my return I have
and business economy can con¬ been fortunate enough to become
tinue. Without them standing at connected with this great Fed-<
the bulwark and forefront of in¬ eral Reserve System which is po¬
dividual effort and individual ac¬ tentially one of the most con¬

well

as

a

you

dying days."

great system "this country will find itself in its

—

place, the producer
product must be able to sell
that product at a price which
will pay his costs of production
plus a reasonable reward for his
of

that it is a distinct
pleasure for me to. appear here
today and discuss food supply and
assure

'

"»

industry

know it.

men

Nelson Douglass e-Co.

Recently appointed FRB member warns of danger of Federal I
absorption of banking system and calls on local bankers to again
fake their position as financiers of their communities. Decries
tendency of public officials and governmental agencies to override/
intent of Congress and take direct participation in business and
exceed legal powers. Says much of regimentation and control in
)■) war was unnecessary and calls for discontinuance of war measures /
that have outlived their usefulness. Lauds present system of dual
Federal and State banking and predicts if banks are forced into

speak.

In the first

''ft

Member, Board of Governors, .Federal Reserve System

11

of the

aware

I

endeavor

System
;

which

food

the

in almost every other field of
—
there is a close re¬

as

no

After this four year experience,

officer of the Cleveland Trust Co.,
is associated with the investment
counsel firm of Boyd

in

and

eral

I

CLEVELAND, OHIO—Carl H.
Kent, Jr., former investment trust

—-

you people are
firms engaged
in

ness

ington.

Boyd

——

of

lationship between ' supply and
price. That is basic, and all busi¬

lers in Wash¬

Carl Kent Now With
'

Government and the Banking

my

controls,
trying
to
fathom others,

.

Counsel Firm of

of

some

fair

be

as

Security

have

and
spent

•——

Since

executives

working days
battling
un¬

Paul S. Willis

Graham

Mr.

National

of

President

individual members, the total ag¬

gregating

of

♦Message

membership

in

grocery

most

the trading division of the secur¬

ity business."

im¬

one

business,
I

has

an

portant

present and investment dealers
or
their representatives will be
welcome.
'
■■
'
,;
• "■
>

in dealing

matters

"control"

of statistical services and

financial

now, v-—

t h e:word

cesses.

the NSTA has

means

discussing

and

The room will

the club bulletin

r

As
Thomas Graham

afford

to

organization,

of

member

capital or that of his company."
an organization of individuals,

per
and

charter

a

on

Leading grocery spokesman, though expressing some satisfaction
wijji revised OPA law, asserts situation in his industry is now not
much better than during war.
Contends manufactured food prices
are reasonable and have advanced
only proportionately with ihose
of other products.
Asserts production of food products will con¬
tinue to be hf'Upered as long as price control exists without cor¬
responding control of wages and as long as 'we seek to solve prob¬
lems of world with American food and American
money.
Predicts
ample and more diversified food supply.

entitled

of manufacturing pro¬
Commencing with a brief
to serve as an
review of our company's history
casions, the growth of NSTA in
since 1898, "Tools for Profit" in¬
membership, in prestige and in
cludes on-the-job scenes of some
importance to our industry is most of
the latest and most intricate
gratifying.
metal working machinery in some
A trader, u^jng broad terminol¬
of
America's
largest industrial
ogy, is "one who can commit his
plants.
firm, thus assuming the full re¬
Representatives from a select
sponsibility for either his own

and

ethical

As

roster.

maintain high
standards ; of

derived

are

Wel¬

establish

all large financial
represented on the

and

centers

the

of

f its

in 1934

——

Street"

to

Company,

"Tools for Profit" is of special

objective fully expressed in the Preamble of its Constitution:

an

"The object
of this Asso¬

designated

board,

expanding

in an
ft=■•■■■

■

Cross

"Tools for Profit."
be

support Congressmen believing in American democracy and capital¬
economy.

By PAUL S. WILLIS*

President, Grocery Manufacturers of America, Inc.

Lowell Thomas' commentary with
a late movie of the
operations of

members to

urges

Productivity

closed preview at 4:00 p.m.

Sept. 26, a
gather at the
Downtown Athletic Club to hear

groups supporting private business;
(3) support of prudence in financial affairs; and (4) opposition
to rule by minority groups. Decries economic fumbling of Federal
:

and

select audience will

(2) cooperation with

power;

a

on

Thursday afternoon,

its goals
of Federal

says

opposition to further centralization

1537

AND

NEVADA

York

City,

Sept,

1538

THE COMMl£RCIAIf & FINANCIAL CHROHICLE ;

Thursday, September 26,1946
4 >

v^^ay;
Club

O'Connell and Janareff

Car.

be

To Be Dissolved

0a the NSTA Convention Train

&

Janareli, 120 Broadway
r By the "Chronicle's'*
Roving Reporter, EDWIN L. BECK
New
York
City, will be dis¬
solved
as
of
Sept. 26.v Homer
Harry S. Grande, Grande & Co., Seattle, Wash* welcomed-, the
O'Connell is forming Homer NSTA visitors in a
striking manner—with matches.
V
O'Connell & Co., Inc., with of¬
fices* at 25 Broad
Street, New
Foster & Marshall, Seattle, Wash, gave the boys a most elaborate
York City.
This new firm will map to guide them around town. It saved
many a footstep and the
deal in railroad bonds and stocks
boys were most thankful.
"4, -ir-iK*
V-:>. '
and industrial stocks.
Associated
■v'-..';"'*
*
*
r
{
with
the
firm
will
be Joseph
The Pacific Northwest Company, ox Seattle had a Wall Street
Mitchell who will be in charge of
Journal tucked under every door each morning—while the
gang did
the trading department.
not always read it,- they liked
having it handy.
Joseph Janareli will continue
*
*
*
*
•

,

•

.

business

his

under

name

own

did a swell

D. H. Robins With
to

The

,

After

breakfast,

took

we

our

and

his

der the firm name of D. H. Robins

*?;.

CARTER H.C0RBREY& CO.

—

1541, 1542

appear on pages

a

DISTRIBUTION
LOS ANGELES 14

CHICAGO 3

650 S. Spring

135 La Salle St
State 6502
CG 99

rose
•

to

-/

j

>

Portland

Grbws,"

wear.

*

•;:

-

-

Circular

on

.

•'*.

'.

-

our

Smith, Collija, Norton & Co., New York City found out
guic(e on the bus that " "Multnomah" meant'^Down the

When

he

asked

was

how the market

'

-

when he turned to look cried "Gin."..

Robert

1

■"••v

from
see

McConnaughey,
Philadelphia, is one of

him for

Friends

HICKS & PRICE

and

•

.

Influence

.

1 Wall St.

^

works

a

-

fiscal

1947

years

agen1948 was

and

€>

*

neither should it compete in
any
area for scarce labor.-/.
Accord-

E.

:

for Federal

,

the

during

ingly, it is my desire that

of

in

until

a

and services slacken off."

is¬

•

going he would
i'l
'
'

.

*

,

V,

!

His

&

intima¬
came

of

reports
received

the

President
in

Commissioner

/l {

in

re¬

'
addressed to them

"on

improvement, reclamation,,
development, rural elec¬

power

James £. Webb

re¬

sponse to let-

<

Aug. 2,

trification, and highway construc¬
tion. They requested reconsidera¬
tion

of

new

•demanding J he

projects

the

limitations

and

are

insti¬
submitting revised data relative to
and,
present commitments.
'
i
particularly, the deferring of all
In addition, the agencies listed
construction not of an imperative
immediate

tution-of economy

measures

njature.
\

In

the
"■

part,

read:

'

1|.
some

.

<

President's letter

deferrable

considered

in

the

We must g(>; ahead with

programs that

eral.economy."

aie absolutely
the ^veterans'

as

•

completed,^

revisions

necessary

should keep in mind the conserva¬

dations

tion

next two weeks.

.

materials

with

which

to

time be careful not to inter¬

fere with private construction and

the

Bob

overall

"The

the

^ ^}

M

fied.

the trip. Dale Carnegie had better
he revises his book "Howj to Win

non-

of

:*As the analysis of the reports is

emergency housing program and
the veterans' hospital program. In
each public works program we

of

as

interest

Federal Government and the gen-

-

necessary, -such

same

Exchange

harbor

agency

heads

•J

,

departments,

detrimental to the public interest.
The programs chiefly in question
related to flood control, river and

being
by

from

of

reported to him that strict com¬
pliance would, in their opinion, be

as

the : result

-

Heads

viewing expenditure programs in
the light of the President's
desires,

-Direc¬

accomplish
the
most
necessary
\ cpnstruction. > We should at the

'

.

Sept. 20.

tor's
tion

all post-

ponable public works be deferred
private demands for goods

the

.

job

of

reconversion.

Federal

Government

will be made to the

The work is

extent justi¬

now

in progress

and it is expected that recommen¬
will

be

made

the

within
^

V*/

Budget Bureau officials stated
any
upward : revisions in

that

public works limitations will
casion

a

further

oc¬

review

of other

order

that. the

budget. items Jn
total

wife

have

should not compete with private

pet saying is "The SEC boys don't

expenditure limitation,
as
set by the President in his August

wear

industry .for*

review, would not be exceeded. *

his

and

attractive

'
*

E.

Randolph 5686—CG 972

strict compliance with Presi-

says

*

*

scarce

.materials.

j?i

V

,*

i

..

'

"

_

So. LA SALLE ST., CHICAGO 4

on

People."

made plenty of friends.
horns and tails."

Principal Stock Exchanges
Chicago Board of Tradp

Securities
us

pointers when" next

Members

-

was

>,

'V::

Request

New York Office

-

,

*• ^^:J:,

*

The-Muter-Co.
'

a

Richard Saffin, Boland,
Sa^fin & Co., New York City*is com¬
plaining about the rummy tactics on the NSTA
train—whilje playing
cards they called his attention to the
lovely Western scenery and

The Chicago Corp.

i

was

presented with

Harold

from'

River."

•.

saying goes*

were

as

*:::

*

simply say "Multnomah."

•

the

as

;
'■

■■

'V":

»

Greyhound Corporation

as

Direc¬

The

ters

in

Donald C. Sloan, Sloan &
Wilcox, did a-grand job as "M. C." He
was backed up 100%
by his Committee. We say "Thanks as Million,
Portland."

St

Michigan 4181
LA 255

]

terrific.

was

Rose

a

reality by the ladies of the party who
1

^

ui,

public

out

Budget,

(Mrs. Richard, H.) sang several beautiful numbers
hubby Richard II. Walsh of Newhard, Cook &
Co., St.
found was quite a whistler, too. They should be on the

"For You

beautiful

UNDERWRITERS
MARKET

Webb, Budget Director,

Upward^revision of the expenditure limitations
for

reau

Her

radio'—the applause

good many ladies

.

Timberline Lodge and were back at the hotel at 2:30
p.m. for
luncheon.. At 5:30 p.m. The Cocktail
Party; at 7:30 p.m. a most elab¬
orate buffet supper with nothing
lacking. The KOIN Radio .Station
orchestra played for us and all
joined in the singing of favorite col]ege tunes, sectional songs and for closing:"God Bless America." *

we

a

:

or

^ouis,

made

what drops, what etc.

i

found

'

SECONDARY

•

sued

us.

246 feet tall and 17 feet

one

We had to lie flat on
wonderful education for
city boys.

dent's economy directives by department heads
would be detri¬
mental to public interest. Sees need of further
revisions in budget;
to avoid
exceeding proposed expenditure limitation.
v

statement

Pacific Coast

For

curves,

tor of the Bu¬

and 1543

for

Wholesale Distributors
Middle West

James E.

James

Anir Walsh

Dealers

Securities

•

,,

Public Works Expenditure to Rise

Webb,-

officers,

Member, National Association

of

a

probability by

Seattle, also of newly elected

investment business un¬

& Co.

was

The bus ride along Mount
Tamalpais

Pictures taken at the NSTA Conven-

Dam

Gray-Line busses1
Hopkins Hotel in

Mark

on a sightseeing tour to Muir Wooda National

the top—it

see

scream—what

held

conducted

In the past he

own

backs to

tion at

&

Brokaw

Friedman,

Samish.

the

S.

Robinson, Phillips, Schmerz & Robinson, Philadelphia, led
picked group of traders bedecked in engineers' caps at
Eugene,
Oregon on Sept. 21. They were all eager to learn how to operate a
big iron horse. It's a fascinating bizz with no Vs—Va—1/32, to
hand

a

worry

about either.

.

>.v":1-*
*

Wells-Gardner

&

A

Co., Com.

Snap-On Tools Corp., Com.
Cribben & Sexton

Inc., Com*

train:

on

signs pasted

compartment doors in

NSTA Notes
our

-r;;v

will

be

.

"Furnished Rooms."
■

•

SECURITIES TRADERS ASSOCIATION OF DETROIT

,•

"Does Your Basement Leak?"

,

AND MICHIGAN

.

Request.

Harold R.
Mrs. Chester de Willers

Paul RDavis &Go.
Established

the

on

;

f?."f'O■ ■'^

^

"No Hunting Allowed on These
Premises—Trespassers
prosecuted to the full Extent of the Law."
>

Woodward Govenor Co., Come
*ProspeclUs Available

lot of funny

.■

1916

(C. E. de

ebrated her
corsage

Willers, New York City) cel¬

birthday on Sept. 21 and was presented with an elegant
of lettuce leaves, radishes, etc., tied with a lovely blue ribbon.

Members

Principal Stock Exchanges
Chicago Board of Trade

10 So. La Salle St., Chicago 3

Frank White, National Quotation Bureau, San
Francisco, the girls
say is a WOW—that means "Worn Out Wolf," Frank!
"*■

Tel. Franklin 8622

Teletype CG 405
Indianapolis, Ind.
Rockford, III.
Cleveland, Ohio

V

•

Sfc

Ed welch, Sincere

& Co.,

Rogers

*

*

'■

..

& Co., Seattle, got together
couples for the doubles at the Olympic.

and

sorted

out

the

|

''

,■

married

I SINCE 19081

Fred. W. Fairman Co.

.•

Chicago, and Jack E. Jones, Hartley

Underwriters—Dealers—Distributors

elected
and

Chapel, partner of McDonald-Mocre & Co. has been

President

of

the

Securities

Traders

Association

Utility

our

analyzing

208

new

these

SOUTH LA

CHICAGO
Telephone
Direct Private
Bell

Investment Bankers Association of America and of the. Municipal
Advisory Council of Michigan, has been active for several years in
the Traders Association and served last year as Vice-President,
i

Other

officers

elected

Ralf

are

A

Crookston

New

&

committee

chairmen constitute

the

The officers and

Board of Directors

for

the next

fiscal year.

V/■
'
Other appointments announced by Chapel are four past presi¬

Brochure

SALLE

to

Hornblower

as National Committeemen: Frank H. Kemp of R. C.
Co.; Bert F. Ludington of Baker, Simonds & Co.; Frank
P. Meyer of First oLMichigan Corp.; and Don W. Miller of McDonaldMoore & Co. Alternate Committeemen are Ray P. Bernardi of Cray,
McFawn & Co.; and H. Russell Hastings of H. Russell Hastings & Co.,
both past presidents; and George J. Elder of Mercier, McDowell &
Dolphyn; and Neil DeYoung of De Young, Larson and Tornga.
The

serve

O'Donnell &

Bonds.

CG

of

Weeks, Vice-President; Reginald MacArthur of Miller, Kenower &
Company, Secretary, and Clarence Horn of First of Michigan Cor¬
poration, Treasurer. Claude G. Porter of Mercier, McDowell & Dolphyn, a past President, was appointed Chairman of the Membership
Committee; H. Terry Snowday of E. H. Rollins & Sons, Inc., a newly
elected Director,. Chairman of the Program Committee; while retir¬
ing President Paul I. Moreland of Moreland & Company, becomes

dents to

ST.

H. M.

York

537




Byllesby and Company

Incorporated
135 So. La Salle Street,
Chicago 3

Randolph 4068
Wire

Municipal

r

4, ILLINOIS

System

Railroad

Detroit

Mr. Chapel, who is a past President of the Bond
Club of Detroit and former Chairman of the Michigan Group of the

BONDS and STOCKS

Utility
51/2V of '52
Write for

Industrial

of

Michigan, Inc.

Chairman of the Arbitration and Ethics Committee.

Public

Central Public

Telephone
New York

State

8711

Philadelphia

new

Teletype

Pittsburgh

CG

273

Minneapolis

'

ip diameter, with bark 15 inches in thickness.
our

cies

Mr. Robins was pre¬

to

The redwood and bay trees,

V

with

us

v

p.m^—We went

Monument.

tours to Bonneville

H.

MO.—Delmar

viously with Edward D. Jones &

231

a grand
;; v.;-v„ v
h

Oakland. .The

■/.

*

Scherck-Richter Company, Fourth
and Locust.

hurry.
^
2'30

a

1

bang—he sings too.
hired at: Seattle and

a

the tfain to San Francisco made the bill

on

':: ■ Sunday neon we arrived at
met us and a police escort saw

Marshall,

Hotel for breakfast.

Robins has become associated

.

put over the show with
with music by two boys

acts

brought along

publicity job for the Convention City.

Chronicle)

Financial

LOUIS,

.

'

Co.

that

star

sfuccess.

Portland boys put on a great program: We were met at the
depot
Friday morning with Gray Line busses and driven to the Multnomah

Scherck Richter Co.
^Special

,

All the members of the Seattle Bond Club
gave their time cheer¬
fully and served us at every turn. Don Meyers, Foster &

Broadway.

from offices at 120

ST.

C."

10

.

.

*

'

in

"M.

an

About

The investment firm of O'Con
nell

night the Myrt Parson Follies were presented. in, the
Larry Doyle, Hardy & Co., P^ew York
City, turned out to

-

officers will take office

on

Oct. 1.

The Securities Traders Association of Detroit and
founded

in

1935

has

over

170

Michigan, Inc.

members from 64 Investment Houses

doing business in Detroit and Michigan.

-

.Volume

164

Number 4528

THE COMMERCIAL & FINANCIAL CHRONICLE

Sheller Manufacturing Corp.

Efficacy of Price Control
By TH0MAS ll' McKITTRICK*

i

v

(1)

high standard of administrative ability; (2)

a

isis ply of commodities
/

:

control

of

>

|

no

•

i;' should not be
vV

that the

of

efficacy

system

a

of price

i

j

control

overrated, in forgetfulness of the conditions which have

'

be fulfilled for its satisfactory $>

to

line

In the first place, a high- stands
ard of administrative ability is re¬

regards both civilian and

as

when

But,

the

sjt- sufficient

authority

to

cials then becomes

ensure

among the public at large respect

Another

for the regulations in force. There

a

return

to

,

difficult,

more

is

reason

that

with

there

peace

is

no

■J

are

in

appear

signs that in peacetime the be¬

longer any definite objective (like
of the public is going to the winning offthe war) which
differ from what it was during the has a clear priority over other con¬
war/ While a nation is engaged in siderations.^ From a
psychological
a
deadly struggle for its very point of View the danger is that
existence, individual citizens can regulations may be broken with¬
be counted upon to lend their aid

out

any

condemnation

by public

willingly to the authorities, it opinion, the reaction of the public
being a point of honor to fall into providing a test of general senti¬
77- f"""'' ""Y7777 Y' /:/ ■»::
Y'Y':Y7'Y; ment and a deterrent often more
( *Extracted from the 16th Art-* effective than sanctions of the law.
nual Report of Bank for Interna¬
tional
Settlements, Basle, Swit¬

zerland, July, 1946.

-

F,

Reilly

In

the second

underlined

^

place, it must be

that

(Continued

country

no

has

1557)

on page

;f

Monthly

Bargaining Bights for Employees of Trust Go.
j

ees as collective bargaining
agent, 174 to 97. Set-back is third f
onion has had in three weeks. Representatives of NYSE and union >
scheduled to discuss new contract next week. 1"

*

■

r

v

Miller

The

United

Financial

Employees

has

a

of

score

exactly

zero

$o far in its efforts to obtain collective
bargaining rights for the
employees of Wall Street broker-*
age houses and banks. Last week,
pretty much set the pattern for

union lost another election—

the
at

the

the "Street."

Empire Trust Company-—

97 to 174.

There

were

ship of 200

321 persons

A,'Y:Vyf..V/':'■ •'

Three

weeks

ago,

transportation

on

Arden Farms

Company—Analy¬

Federal

sis—New

York Hanseatic Corpo¬
ration, 120 Broadway, New York
5, N. Y.

gotiations looking toward a new
contract by Oct.; 1 and a meeting

the results of the election at

of

Harris, Upham & Co, set aside in
a

election.

new

of the union have filed

Also

available

is

study

a

N. Y7

ing the company with unfair labor
on the grounds that it in¬
the

free

choice

the event

of

circulars

the date for

will

hearing.

a

commence

at 10

on

struggle
Co.

as

the

over

Also
on

&

with

Harris,

an

ford

are

Also

Broadway.

on

vote

Lanova Corp,;

GAS

available

The

Chicago

Y,V.7Y:

force

,

;

•

'

will go to the
table armed with the

652 to

in-

a

poll

(the

5), of the Stock

Exchange employees

4 ov:YY.'

and

American

Window

'■

Glass;

Puro-

•r.

Products; Upson Corp.; Ala¬
..

Also available is

on

Southern

on

.

Montgomery Street, San Francisco
4, Calif.
■
'
.

Also

,

Arizona

Central

reports

are

Light

&

Liberty

Sierra

Advance




Bag

&

Power

7

Corporation

Common Stock
on

^

j

Request

—

Publications

—

Cir¬

ADAMS & CO.
231

cular—C. E. de Willers &

Co., 120
Broadway, New York 5, N. Y.

7

.... .

Loan

MacFadden

oration, The Trane Company, and
,

Corporation j

111.

Texas Company, Towmotor Corp¬
The White Motor Company,

I

Study of situation aud outlook—
Sills, Minton & Company, 209
South La Salle Street, Chicago 4,

on

The Plomb Tool Company,
Pacific Power Company,

pany,

7

Terminals

memorandum

Circular

.

available

a

Gulf, Mobile & Qhio RailroadAnalysis—R. H. Johnson & Co.,
64 Wall Street, New York
5, N. Y.

—Special anallytical report—Walston, Hoffman & Goodwin, 265

SOUTH

LA

SALLE STREET

CHICAGO 4,

TELETYPE CG 361

ILLINOIS

PHONE STATE

Also
on

available

Gruen

are

Watch

National Terminals Corporation
—Late

memoranda

Company

Northern Indiana Public

memorandum

for

dealers

only—Adams & Co., 231 South La
Salle Street, Chicago 4, 111.

and

Aeronca Aircraft

'"Decker

Service;

New

England

Public

Service

Also

available

Dwight

study

[studies- of
Co.

Fred B. Prophet Company—De¬

and

form—Fred

South

—
Comprehensive
analysis' in brochure

W.

La

Fairman

&

Manufacturing

Rockwell

N. Y. 7v;

•

Schenley Distillers

Cherry Rivet Company—Analy¬

been running

7

.

Decker

tailed

&

Manufacturing Co.

St. Louis Public Service Co,

* Trailmobile
Company [

*Detailed analysis available on

request.

Comstock & Co.
CHICAGO 4

in the Chronicle-

write'to Mark Merit, in care o?
Schenley Distillers
Corporation
350 Fifth Avenue, New York 1

Manufacturing Co.—De¬

Analysis—Comstock

Corporation

,

Corporation»

Seven-Up Texas Corp.

—Brochure of articles they hav*

sis—L. D. Sherman & Co., 30 Pine

Street, New York 5, N.-Y.Y

Miller

Co.—

:

Coal

Mastic Asphalt Co.
*

.

Street, OiL;
7YY: YY-'Y/'

Ben

*

Long-Bell Lumber Cpmpany

Analysis—Steiner, Rouse & Co.,
25
Broad Street, New York 4,

Co..

Salle

4, 111.

Old

tailed., memorandum—De

Young
1
\
Larson & Tornga, Grand Rapids
National Bank Building, Grand
Public;
Utility
5%^ Rapids -2, Mich. Y f
Consolidated Electric

and

'"Hydraulic Press Mfg. Co.

*

are

Manufacturing
Purolator Products.

Corp.

Manufacturing Co.

Howard Industries, Inc.

Co.—Appraisal of values
Ira
Wharf—Descriptive an-, Haupt &
Co., Ill Broadway, New
alysis—du Pont, Homsey Co., 31 York
6, N. Y.
Milk-Street, Boston 9, Mass..
4
Boston

August 14

strike if necessary to en¬
its demands.

231

Sorta Salle St.

Dearborn

1501

Teletype CG 955

v.

N. Y.

Co.[

CONTINUOUS INTEREST IN:

&

THE

INDIANA

TRANSMISSION
PUBLIC

SECURITIES

Koehring Co.

Macfadden Publications

OF

upon request.

INCORPORATED

1 ' * ''

National Tool Co.
Northern

Nekoosa Edwards Paper

Hamilton Mfg. Co.

James Manufacturing

Superior District Power Co.

'

Co.

.

Co.

'0

Members Chicago

PHONES—Daly 5392

Chicago:

Stock Exchange

'

MILWAUKEE (2)
State 0933

All Wisconsin Issues

Paper Mills Co.

&(g©,

225 EAST MASON ST.

Teletype: CG 1200

Gisholt Machine

Weyenberg Shoe Mfg. Co.

,

Wisconsin Pr, & Lt. Co.

Cons. Water Pwr. and Paper Co.

SERVICE

CHICAGO 3, ILLINOIS
6161

[

National

M

•

-Y , •>
*.,ifi
Belden Manufacturing Company

a

135 SOUTH LA SALLE STREET

Telephone $ Dearborn

Tele. CG. 28

Active-Trading Market in

Paper Co.

.

DOYLE, O'CONNOR & CO.
^

••

•

randum—Boenning & Co., 1606
Walnut Street, Philadelphia 3, Pa.

Compo Shoe Mach. Co.

'

Chicago 3y III.
Tel. STAte 4950

Memo¬

—

Lake

'

135 South La Salle Street "

The-

7Y:.;Y:'

Wisconsin Elec. Pr. Co.

'

KITCHEN & CO.-

UTILITIES

*Prospectus available

•'

—

memoranda

are

Corp.

Grinnell Corporation

Mo¬

Iron & Steel; Barcalo; Haloid;

MIDLAND REALIZATION

"TENNESSEE

Corporation

officials

was

to call

&

it feels that this case .will

NORTHERN

Glenmore Distilleries
Common

Cable

memoranda

hawk Rubber; and Taylor Whart¬
on

v

Philip Blum

yyy[:Y:Y7YY> ;YY::-;i:;

Muter-Co.

available

Empire;

cago

conference

con¬
of its

MIDLAND

represen¬

agreement can not be

authority granted

Upham

TRADING MARKETS

Corp.—

Greyhound Corporation—Circu¬

Co., 120
5, N. Y.

analysis-

W. L. Douglas Shoe Co.; Hart¬

208

!/Union

;

Testimony

a.m.

outcome

A.—Current

lar—Hicks & Price, 231 South La
Salle Street, Chicago 4, 111.

Aspinook Corporation—Circular
New York

Campbell

Chicago 4, Hi;

Also available is the Fortnightly

Engineering.

back to Oct. 15.

[ The union is particularly
cerned

Gas

&

W.

Tennessee Products and Wellman

—Ward

analytical

S.

John J, O'Brien &
Cq., 209 South
La Salle
Street,

Investment Letter discussing Rail
Prospects. V7-"■■■' 7Y7Y7
Yy /

Y./7:*

reached by Oct. 15, with the terms
of the new- contract retroactive

employees. The State Labor Board
has considered the objections and
has set next Thursday, Oct. 3, as

Water

General

cular—Seligman, Lubetkin & Co.,
Inc., 41 Broad Street, New York 4,
are

an

A.

Study—H. Hentz & Co., 60 Beaver
Street, New York 4, N. Y.

7 Argo Oil Corp.—Descriptive cir¬

available

is

on

Co., Inc.

of

S. Campbell Co., Inc.

Also

available

Inc., 37 Wall Street, New York 5,

Central
present contract calls for the au¬
tomatic extension of the present, of •'52 and
and Gas Pfd,
contract for a period of 30
days ip

objections

practice

with

Exchange and union

tatives is scheduled for early next
week.
Another provision of the

Officers

With the State Labor Board charg¬

terfered

York 5, N. Y.

Memorandum—J. G. White & Co.,

among

which expires on Oct. 15. One of
the provisions of the present con¬
tract calls for the opening of ne¬

H? However, the union is trying to

favor of

member-:

The union has written to the
New York Stock Exchange
asking
a meeting to discuss a new corntract to replace the present one

the U. F. E.
lost two elections, one at Harris,
Upham & Co., 115 to 197, and the
other at Carl M. Loeb, Rhoades &
Co., 67 to 272. Thus,, to date, the
Voting against the union has been
running better than two-to-one.
get

-

~

to vote altogether but
only 291 cast ballots of which 20
were
either void, ^challenged" or

■siW"';

a

Corp.

Manufacturing Co.

Company—Analy¬
sis for dealers only on 66-year old
company
with interesting pros¬
pects—Moreland & Co., Penobscot
Building, Detroit 26, Mich.

the employee's
of that company.
The union is
Bird & Son, Inc.-—Memorandum
now also thinking about
bringing
charges of unfair labor practice' —Buckley Brothers, 1420 Walnut
Street, Philadelphia 2, Pa.
against the Empire Trust Co. ;
j ;

eligible

blank.

It claims

De¬

New York Hanseatic

—

analyses of memorandum

are

C. H. Button

Company, Glenn L. Martin Com¬

7

v

Building^

Manufacturing

Also

available

Press
Manufacturing
Co.; Long Bell Lumber Co., and

Hickey, 7 49
Street, New York 5, N. Y.

Wall

i

Employees of Empire Trust Co. turn down United Financial Employ-

;

Chi¬

Street,

Hydraulic

&

Comment—Sum¬

of report

mary

N.

Salle

T.

V ICC

A.

La

111.

Also

N. Y.

lator

Wall Street Union Fails in Attempt to Obtain

South

cago 4,

regular feature to
Highlights
of
Wall

bama Mills.

■

231

Co., Inc.,
40 Exchange Place, New York 5,

havior

>

of

developments in industrial

on

situations—a

national

.

-

column

military tasks.

emer¬
quired if the system is to be adeT gency has passed ?■and everyday
life
begins
again, the attitude
/Vquately run. ; It is not only a
question of finding officials who often changes into one of sharp
whenever mistakes are
are reliable and otherwise qual- criticism
Y jfied
to
handle
the
problems committed, together with a dis¬
0 arising but" also of
seeing that the tinct inclination to safeguard pri¬
administration as such commands vate interests; the task of the offi¬

y

data

Tell—A

statistics—Vilas

functioning

.

Executives

Street—J.

value without

It is important

Buhl

Corporation, 120 Broadway, New

fair

on

adequate supplies for proper rationing and stresses need of restricting expenditures for subsidies to
avoid an inflationary movement. *
\
/
are

Solar

Analysis

cup-

a

Dolphyn,

troit 26, Mich.

It is understood that the firms mentioned will be
pleased
to send interested parties the following literature:

:;

world markets; (4) avoidance of i
hindrances to economic progress; and (5) not claiming more than
j.
is actually achieved in price stabilization. Notes subsidies in price

7*.'

;

sufficient

a

&

Recommendations and Literature

;);

to meet population's vital needs; (3)

of price stability

measure

/

;j

\,v

Administrator of BIS points out difficulties in enforcing price con¬
trol under peace conditions, and lays down as conditions for
efficacy

i

Recent report—Mcrcier, McDowell

Dealer-Broker Investment

•::;

.

President, Bank for International Settlement?

1539

Teletype MI 488

HOLLEY, DAYTON & GERNON
Member—Chicago Stock Exchange

|

105

So.

CG

1

La Salle

262

St., Chicago 3, 111,
Central 0780

Offices
Eau Claire

-

In Wisconsin

Fond du Lac

Madison

-

-

La Crosse

Wausau

i'i

M t
^.

.

«TV*^

n*tr»

^ *r/w jrrn -

*,

^mrv&wtrff- iwvHrtr^WV^yvtor •n

FINANCIAL CHRONICLE

THE. COMMERCIAL &

1540

I UiW to

$$£> "»:>Jmwt'I

Oy $,ht

a

*T Tynr is -ftrgsguft; -Tm^aratc-i-luu' *

t^rs "w n>nv w&r» •*

<

.

Thursday, September 26, 1946
7;.

v'7

*
'■'

at prices

interest cost of 1.86%

A large group

made

in

'

Seattle last week. The group

not

•:

demns unneeded government

of

notes

Railroad

Erie

to

Barhyte

Dave

Hawley,

of

1 v.1-

"Tl IT

•

n**-1

n

lA

well

as

Cayne & Co.; George

TT 'H

close study

as

tis.

*■

*

City, Dr.
vice-presi¬
dent in charge of research and
technology of the U.
S. Steel
On Nov. 21 at Atlantic

Hufus E. Zimmerman,

Corp., will be awarded the 1946
medal for the advancement of rep
search by the Society
of Cleveland.

••

•

'•

then,
New

rials and labor.

graduate of Franklin & Marshall
College, Thiel College and Mas¬
sachusetts Institute of Technology.

&

Co.

were

bonds

bond

school

awards—

2.13%

at

the

School

Heights

Cleveland

bonds

on

1976.

in

a

then

Street

Trust,

$20,000,000

Cleveland

in

in

Still

the

country

banking offices..-

'

*

a

'

before

'

*

* -

vY;,;YY

I

'

Keith S.

McHugh, a vice-presi¬
charge of public relations
information
department of

.

Institute

a

-

of

conduct

to

business

affairs

the

organization.

-

,;

;•

of

•

Has

Practiced

-'7v7>77

Excesses

Now, lest I be accused of being
reactionary \yho is completely
touch; with the develop-

out'of

City^

America,
New
York
Sept. 16, 1946.
; ,V
"

war
many

''

MacDonald

Controllers

the

of

the
in

but

made

Business

and

*An address by Mr.

during

lifted,

important policy decisions

are

which

World War II and a year of
halting reconversion.
We have

16th
with 50

to
should

only after careful
probable Wash¬
ington reaction. I do not regard
this as the proper atmosphere in

ery,

the

is

Trust

wm;

degree

enterprise

imposed
been

consideration

de¬
fol¬

lowed
by
a
partial recov¬

v

,

in

more

Ohio

.

John H. MacDonald

adding ap¬

private

cases,

seen

major
pression

joined

bank

largest

The;

Saginaw
bid of 100.01 at an

have

Since

j

Lorain

largest

$4,800,000

was

'

f

'

branches

two

assets.-

of

yield 1% in

^

the

week

with

proximately

bid of

a

interest cost

an

2.15%

other

$6,000,000
on

at prices to
to

1949

George A. Walker, clerk of

Midland

of

$7,000,000..

Last

the
was

tions

conceived.

have

there is a
how far

of

the

regulated by government have
gone. To be sure, some restric¬

had al¬
been

iar,

of

;^v'"

be

ready

the First National

over

famil¬

realization

concepts

which

are

we

so

a

Bank

first

all

around

Michigan cities.
The

these

today

even

complete

with

which

$25,-

we

of, two

bonds

water

$10,800,000

whether

Bank of Painesville with assets of

Halsley, Stuart
awarded a total of

and

con¬

busi¬

of

ness

Cleve¬

over

far-reaching

a

tually the entire world. I question

trols

$1,000,000,000 mark. Y v
this
month
Cleveland

Trust took

100.0136

Warrensville

Early

*v

,

^

assets by

seen

gov¬

of

ernment

bringing the bank's total

above the

Otis & Co. and

who has offices
in New York and Pittsburgh, is a

Ohio

yr.

also

fundamental change in the social
and economic philosophy of vir¬

line

*

s

Deal,

carrying with
it
the
long

in

one

Incrbasd

additions

Trust's

000,000

can
be completed
because of the high cost of mate¬

improvement

Jj

Mr. Zimmerman,

Recent

The
land

before the

be a .year or more

may

nearby Painesville.

that it

dent, Forrest Bidlaclc, said

including

in this country was slipping rapidly
history. Although. Wp did not know it
the •—
*

"

for Metals

.

,

for

offices,

ing

$787.70 premium
l%s. The school board presi¬
The bid was

Urges p

; Fifteen
years ago business
into the,worst depression in its

,

,"V.:"*

■

of costs and accounting procedure.

clear statement in corporation reports.

•

n*n

year and says
of economic fundamentals 3

this will necessitate accurate judgment

Cayne of $235,000
unlimited
of
Cleveland
participated with
Opdyke of building bonds to Wm.-J. Mericka the Buffalo bank. The Erie also
Ledogar-Horner & Co.; Ben Mc-' & Co. The winning bid was 101.09 has
requested bids for $254,000
Polin of McDonald & Co.; Robert for 2y4% bonds, which were repromissory notes to finance about
Erb of Green, Erb & Co.? William- offered at prices .to .yield from
80% of the cost of four more Die¬
Koeth of Gur.n, Carey & Co.; and j 0.75% to par for the final masel electric locomotives.,
rl
William
Mericka
and "Edward turity.
A total of $64,000 bonds for con¬
Parsons, JY., of Wra, ;J..Mericka &
Since the first of the month,
Co.
Also in the group was Carl struction of four additional rooms
the
Cleveland
Trust
Co. has
Zies, president of V. D. Anderson to the Parkman School went to
added four new branch bankCo. of Cleveland..
Paine, Webber, Jackson & Cur¬
^ ,,
& Co.; M. A.

Shepard

.

as

lays part of blame on excesses
Foresees increasing competition in business in next

v

purchase of 15 Diesel electric lo¬
comotives. Central National Bank

awarding of
tax school

board, announced the

con-

impeding reconversion,
practiced by business in past,

restrictions

but

cover

.

were

Newly elected President of Controllers Institute of America

.

submitted the bid
1.67% for $979,050 promissory

Co. of Buffalo,
of

/!'

'

Vice-President, National Broadcasting Company.

*

*

,*

,

Manufacturers. & Traders Trust

expected hack in Cleveland until next Monday, were
and dinners by the Bond Traders Association
at San Francisco and. the Security Traders Association of Los Angeles
In
the
Cleveland
contingent*
"
~
"

which is

honored with receptions

'

.

By JOHN H. MacDONALD*

supply of each community.
,

tional Security Traders Association in

water

develop and increase the

of Cleveland investment brokers and their wives
the convention of the Na¬

the excursion to the west coast for

'

yield 0.90% in 1949 to 1.90% *
1976. Funds will be used to

to

Ohio Brevities

.

gY; (Continued

,

1564) Y

on page

dent in
and

American Telephone &

Telegraph

A Fiscal

Co.* has been elected a director of
Ohio Bell Telephone Co.
Henry
S.

tolllB8®

Policy

*

Sherman, president of the So¬

ciety for Savings Bank, also was
..

elected

director

a

j

recently.

•>f

The
Bank,
/

•

«.

mM

has,

Cleveland

been

for

the

j
director

of

Y to yiehl large

(Industrial

Rayon Corp., has been elevated to
the newly cheated post of execu¬
tive vice-president and
of the executive Committee^ Y

He became associated

dustrial

Rayon in 1925

search chemist and

^

-

|

witli!tnSas

was a

a

re¬

leading

meat shortage," providing you like fish. Bill figure in the company's develop¬
Baren of William S. Baren Co.,., of New York City, and Ben Del ment of the
method for continu¬
Monaco of The Genesee Valley Securities Co.r lnc;, of Rochester, ous
spinning s and processing of
N. Y., claim they broke the record for black bass Tat Henderson viscose filament
yarn. He has been
Harbor, N. Y.Y.. and above is the pictorial evidence!;; The accuracy
vice-president since 1930.
!
of the foregoing comes from reliable sources but cannot be guar¬
anteed.—Editor.
v :,
."/•
'"£%
:
"One way to solve the

,

FINANCIAL SHORTSCleve

H.

Pomeroy, vice-president- and
treasurer of National Malleable &

Gruen Watch, Com.

Sport Products

,

;;

Steel Castings Co., moved into the

V u:',

presidency last week . .j
Frank
J.
Schwab,
vice-president, > has

Whitaker Paper

Underwriters and-

Land Trust Certificates

./}

(

v

..

excess

of receipts

over expenses

t Yi

in current fiscal year. " Y JYY!

.

-t

There is danger

v

Y

that the present inflationary trend in the United'

to grave proportions.'; Shortages persist- every
production perform
with
ance has not been as
good as it threat must be- combated
might have been; There-are con¬ more production and less spending
centrated in
nUt * phly the —more work and more restraint.
"normal" demand of4W but also These are efforts to which every-

States

will

and Corporate

Securities

Philip Carey Com, &

Y
t

Pfd.r;,'j
\YY.\;

jtcd Top Brew

-

in

opment

otis &
"K-\.
j,. '
:

■'

:

'

f

'

coYl

(Incorporated)

/

W. D. Gradison ft Co.
Member*

Dixie Terminal

CLEVELAND"

New York

"

Chicago'
Columbus

York

and

Cincinnati \
j

Stock Exchanges—N.-Y; Curb Assoc.

Established 1899

$ Cincinnati

New

.

—
_

.

?

Denver«

"Toledo

!

Building

CINCINNATI 2

V./ii'-

J

Tele. CI 68 & 274

Tel. Main 4884

.

.

charge of product devel¬
of John C. Virden Co.

John H. Kerr, former secre¬

tary of. American j Steel: &. Wire
Co., elected secretary of Cleve¬
land-Cliffs

Corp.*.
N. O.

Iron

Cliffs

and

Co.

v"William C. Dunn and

Scourfield elected directors

of Harris-Seybold Co.

•

pent up during
which

of

businesses

future

and

years,

not

+ or

~

We speak

of serious, accelerat¬

ing inflation as a danger.- It is not
a certainty; we may escape it. But
it would be foolhardy to depend

good fortune alone

on

central source/.

to bring us

but

ourselves

"

.

P:"!

;

;

,

Any

OHIO

Circular

Members of

on

or

a

ary

will

Request .1

all

i

the

Cleveland Stock
..

Exchange

Commerce BIdg.

14,

INCORPORATED
v '

'Union

Commferde

...

Building''

CLEVELAND 14

-

V

,

Field. Ricbards & Co.
Union Com. BIdg.

Teletype CV 594

CLEVELAND

29

BROADWAY

NEW YORK 6

of

Tele. CV 174

Union Cent.,Bldg.
CINCINNATI
Tele. CI 150

the

community-

labor; agriculture,
federal,

governments.

Members Cleveland Stock Exchange

Ohio




sectors

sumers,

WM. J. MERICKA & CO.
'

Cleveland

many-sided and
require the active support of

trend will be

business,

•"

1582 Union

effective program to arrest
inflation¬

moderate the present

state

The

con¬

and * local

inflationary

4V*A statement on National Policy
issued by the Research and Policy
Committee of the Committee for
Economic Development, Septem¬
ber 21, 1946.

a spree

.'of

,

peaceful trading world, If we fail
to discharge the unusual responsi¬
bilities which we have earned by
performance in -war, we shall
leadership in peace.,
w

embark upon

now

spending and price and wage in- creases, the /alternative to
run¬
away inflation must include ;at
least stringent curtailment of gov¬
ernment services, severe credit re¬
striction and steep boosts;in tax

.

in ; recreating

factor

tant

Engineering

Company

we

production is the most
important factor in world recon¬
struction.
American
financial
stability \ is
the
most
impor¬
American

lose our

Wellman

businessmen, farmers or workers

also ' to men ' and
of the world.

in every part

women

;
>

The length to

crucial period un¬

this

through

,

J

action alone

than action by other
groups. The contribution that in¬
dividuals in their private capacity
can make to more production and
less spending depends upon their
own particular circumstances and
cannot be prescribed from any

of

prospective; supply

.

important

goods.
;

because Federal

^

v

but

would be sufficient or even more

trying to satisfy now. The sum of
these demands exceeds the pres¬
ent

Government can do,

Federal

consumers

nation of the world are

of every

.

v'.YY'
Y

one

the war, and part

demand

the

of

«Y#v
: » |

who works or spends can contribute. This policy statement is
concerned largely with what the

part of the demand Of vl942-1945.

our

GOTTRONf»»'°|RUSSILLca

,

*

mount

which Federal ac¬
tion must go in fighting inflation,
been named to head sales activi¬
scathed.
"
-. *
ties of Lempco, Inc., and sub¬ ;
Our national performance, the will depend upon how well each
sidiaries
Norman H. Vacha manner in which we handle these of us discharges our; individual
elected a director and .vice-presi¬ problems, is important not only tin responsibilities. ;.If as consumers,
dent

*

where. ~ Our

.

Distributors of Municipal

•;

.

-

offii

Hayden B. Kline, veteran
cerand

to curb inflation:

,

best in its field for 1944.

'l**-*,!.1..;-',,

necessary

•

oiE

excellence

year's report by the "Finan^
dial World."
It was judged the

I i| i
'

Development cites the following steps

straint in raising wages

I.;

last

L«x

I ft* 4 *

yfa

of

certificate

ri

......

..

,,

(1) increased productivity; (2) re»
and prices; (3) postponement of deferrable Y'
expenditures by individuals and businesses and State and local
governments; (4) curtailment of public's expendable funds, through
; monetary policy; .(5) high sales of Savings Bonds; and (6) reducz tion of Federal expenditures and maintenance of sufficient revenues
• •

report, to stocksthe,1 Central National

of

awarded the highest merit award

11
mum**'

Y

annual

holders
\

..

for Economic

: Committee

;y

rates. ;'.
We

•

Y;' "• ;

ments in a-program
,

"

Y;,,'/

list here the essential ele¬

to curb infla¬

tion, starting with what is gener¬
ally agreed to be the most impor¬
tant and desirable step—the ex¬

)

pansion of production:

of management, labor
government to increase pro¬

1. Efforts
and

ductivity.
flow

of

Maladjustments in the

materials, industrial dis¬

putes and distortions in the wage
and price structure have reduced
the efficiency of production since
V-J Day

in many industries,

not¬

ably manufacturing; -There is h6w
an
opportunity to increase pro¬
ductivity

per

man-management-

(Continued on page 1570)

,

Volume 164

Number 4528

i,*yV ;
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iritw,;

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1541

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THE COMMERCIAL & FINANCIAL CHRONICLE

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ELECTED
V

Vice-Pres.

OFFICERS

2nd Vice-Pres..

Secretary

*

■">K-

& IK
*

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PI STA

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j 'Hie 13th Annual Convention

„4

"

was

i

held

in

Seattle

'-j-

^

. _fc

of' '<*
on

The

v

17-19, 1946. R. Victor Mos-

with

j/ey, Stroud & Co., Philadelphia,
was

Other officers elected

is

of

Paul

^i

Curtis, Boston, Treasurer.

'V

N

to the 1947 Executive Council

Association y
welfare
members, to establish and ;*

promote the general

its

trading

division

of

the

.business.v-^.

security "
;

' •*,»;

77ie membership is

composed of
twenty-six affiliates and eighty-eight :,f
scattered individual members, thet
total aggregating 3,254.
iifb

Named
were

Francisco; and Jack Jones, Hart¬
ley Rogers & Co., Seattle.

to

high standards of ethical1}
conduct, to provide the benefits to !$j
be derived from,personal acquaint-}
ance. and id afford the; means of f
discussing mattets pertinent to*the

^John O'Neill, Stein Bros. & Boyce,
Baltimore; Jesse Sanders, Sanders
!> &
Newsom, Dallas, Tex.; Ernest
Blum, Brush, Slocumb & Co., San
.

Constitution?yj

maintain

[Yarrow, Clement, Curtis & Co.,
.[ Chicago, First Vice-President; Paul
jj{IA Moreland, Moreland & Co., De-'~
ttroit, Second Vice-President; Ed- '
ward "H. Welch, Sincere & Co.,
Chicago,: Secretary;
James
R.
Duffy, Paine, Webber, Jackson &

.

1934}*

objective fully expressed

an

■"The object of this

Graham,. :

were

Traders 1

Security

founded in

in the Preamble of its

| The Bankers Bond Co., Louisville.

.

was

elected President of the Asso¬

ciation to succeed Thomas

;

National

Association

■

Boston
ON

ARRIVAL

♦

was

chosen for the site

-

).

of the 1947 NSTA Convention.
,

Mrs. Thomas B. Graham and Thomas B. Graham, Bankers Bond Co.,
Mr. & Mrs. Ed Welch, Sincere &
Co., Chicago.

Louisville;

'-J
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A. Sherman Ellsworth, Wm. P. Harper & Son & Co., Tnc., Seattle;: Dayton Haig[p~
Ro^on,; "n.
^^Ifnur,
r

'Balfour, Portlands Edward E. Gutherless, BlytH & Co.,

:

RwssejR. -Rovpej StewaUr&t J;*,«,

Inc., Portland,

i-

.

John C. Hecht, Butler-Huff & Co., Los Angeles; Jerry Tegeler, Dempsey-Tegeler.f
Cot, St.^vLoUis; ThomasvMontgomery,* Glore, Fort/an & Co., Chicago; Charles Mi;
Zingraf, Laurence M. Marks & Co., New York City.'>
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THE COMMERCIAL & FINANCIAL CHRONICLE,

1542

Thursday, September 26, 194$

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E. W.

Snyder, E. W. Snyder & Co., Syracuse, N. Y.; Ora Ferguson, Merrill L]jnch,

Pierce, Fenner & Beane, Louisville; George F. Ondyke, Ledogar+Hotner Company.
Cleveland; A. Gordon Crockett, B. V, Christie & Cov Houston.;

B. F. Kennedy, Bosworth, Chanute, Loughridge & Co., Denver; Dick Walsh,
Newhard, Cook & Co., St. Louis; Lex Jolley, Johnson, Lane, Space & Co., Inc., At*
lanta; Ralph C. Deppe, Edward D. Jones & Co., St. Lduis.




,

I T. E. O'Connell, Kaiser & Co., Seattle; Herman A. Feldmann, Geyer & Co., Inc."/ '
Rupe & Son, Dallas; A. A. Sullivan, Equitably, a
Securities Corp.J New York City* a
^ ,v
New York; G; Harold Pearson. Dallas

L. Gordon Miller, Miller & Patterson, Richmond. Va., R. Victor Mosley, Stroud,
Co., Inc., PhiladelphiaClifford E. Poindexter,4 Turner*Poindexter & Co., Los;
Angeles; Benjamin H. Van Keegan, Frank C. Masterson & Co-., New York City.
*
\
&

•

Clair S. Hall, Jr., Clair S. Hall & Co.,

New York

Cincinnati; Carl Stolle, GT. A. Saxton & Co.,

City; W. E. Creamer, Schirmer, Atherton & Co., Boston; W. J. Zimmer-?

man, Bingham, Walter &
Son & Co., Inc., Seattle.

Hurry, Los Angeles; Hugh R. Sbhlicting, Wm. P. Harper &
•

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Number 4528

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Jesse A. Sanders, Jr., Sanders & Newsom, Dallas; Robert W.
Thornburgh, The:
W. C. Thornburgh Co., Cincinnati; John Kalb, Kalb. Vcorhis &
Co.,'New York City;
Herbert Pettey, Equitable Securities
Corp., Nashville; H. Frank Burkholder, Equi? table Securities Corp., Nashville.
»
.■„.

■m
•

.

'

Maurice Hart,- Neiv York Hahseatic
Corporation, New York City ; Jack E. Jones,
Hartley Rogers & Co., Seattle; Abraham
Strauss, Strauss Bros., New York City;
Irving L. Feltman, Mitchell & Co., Mew York
City; John Kalb, Kalb, Voorhis & Co.,
New, York City." • V- *!;•. >'
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A. A.

Jordan, Jordan & Co., Seattle; Louis S. Lebenthal, bpbenthal &
Co., New
Griffin, Lord, Abbett & Co., Inc., New York City; Thomas A.
Akin,

York City; O. D.

■

■

Murray Barysh, Ernst & Co:/ New York City; Max
Kaplan, White & Co., Si,
Louis; Samuel E. Magid, Hill, Thompson
J. S. Strauss & Co., San Francisco.

Joe C. Phillips, Pacific Northwest
Company, Seattle;;Wm. Perry Brown, Newfrnan, Brown & Co., New Orleans; .Albert O. Foster, Foster &
Marshall, Seattle; Ludwelj A. Strader, Scott, Horner & Mason, Inc., Lynchburg, Va,

-

-

R.

<fy Co., New York City;: Houston Hill, Jr.,

Vv

;•.

*

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v

:

,
.

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Emmet Byrne,

Southwest

Dempsey-Tegeler & Co.. St. Louis; James F. Jacques. First
Co., Dallas; Henry J. Richter, Scherck, Richter Co., St, Louis; Don
Meyerg

Foster & Marshall, Seattle.

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B^f~l ~?k~

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Oscar M. Bergman, Allison-Williams Co.,
Minneapolis; William T. Patten. Blyth
Co., Inc., Seattle; Lyle Wilson,- Pacific Northwest
Co., Seattle; Barney Nieniari,
(Uarl Marks & Co.,
Inc., New York City.

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_

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-♦&:*

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John J.

O'Kane, Jr., John J. O'Kane, Jr. & Co,, New York City; Jack F. Glenn,
Co., Atlanta; Leo J. Doyle, Doyle, O'Connor & Co., Chicago; Ellwood S.
Robinson, Phillips, Schmertz & Robinson, Philadelphia; George E. Lestrange, Moorea
Courts &

Leonard &

Lynch, Pittsburgh.

.v..

1544

THE COMMERCIAL & FINANCIAL CHRONICLE

■

<

-jijj .,i\v

Thursday, September 26, 1946

"Unless the decision is reversed
;

an appeal, it was pointed out
that .the ruling compels an owner

in
to

uPrice

Retention of Wartime Controls"

"Representatives of the tenants
an OPA hearing, said Berman,
recognize the financial
plight of the owner and indicated
their willingness to pay an in¬
creased rent so that the loss could
be eliminated.
However, it was
at

'seemed to

From

time

to

time,

we've

this

in

suggested

column

real

that

estate bonds, representing first mortgage liens against favorably sit¬
uated properties, had receded to levels which made them extremely

attractive from the standpoint of both yield and security.
contention

our

the fact

on

that

construction

new

could

We based
com¬

never

pete with existing properties because of high building costs and OPA
restrictions

on

rentals.

As

iter of

rying

below

collected

fact, as shown in the article
(appearing in the N. Y.
"Sun" of Sept. 24, 1946,) it is even
impossible
for
buildings
with
100%

indicated
der

(although prob¬
ably in a better position than pos¬
sible new construction) to show
occupancy

to

such

un¬

OPA regulations,
rent

increased

an

that

the tenants

the present

mat-1*

a

may

not

legally be accepted and that the

not sufficient to meet the ex¬

are

rents now
regulations

only relief available to the owner

The

charges.
under

OPA

operation, New York
City
taxes
and
the
mortgage
charges as provided by the law
of the State of New York.'
of

penses

to

v/as

the application for

press

withdrawal from the housing ren¬
tal market.'"

landlord

"The

Park

417

at

of

the

apartment
Avenue

permission by the Office of Price
today to close his
building, despite his pleas that
the building was losing money
under

present

operating

condi¬

tions.
"The

(Continued from page 1536)

denied

Administration

short-term

reviewing the changing pat¬
tern of public and private debt
during the war period, from 1941
to the end of 1945, the Depart¬
total

rent

$202.4

owner

of the New York Yankees

baseball

club, and Clarence H.
Low, retired rubber executive.
"David Neuwirth, attorney rep¬
resenting the tenants, said today
that Berman

Gresham

the

associated with

was

Realty

Company,

headed by Alexander M. Bing, the
real

of

the

property, and
charged that they wished to re¬
owners

the

move

to

tenants

convert

the

building for business purposes.
"Berman

said

the

that

market

Avenue has

because

net

debt

billion

to

advanced
from
$400.5 billion.

During these years the gross na¬
product or expenditure rose
from $120 billion to $199 billion.
This

period of generally
for private
debt reduction, with the Federal
was

favorable

a

conditions

government taking over much of
the responsibility for war financ¬

ing and expanding incomes per¬
mitting the retirement of existing
debt.
net

'417

Park

been unable to

earn

sufficient income to meet its

car-

1941

From

through

1945,

private debt
dropped from $78.7 billion to $71.7
billion. This reduction, however,
was offset by a large rise in busi¬
ness
short-term obligations, re¬
quired for the greatly enlarged
long-term

business

volume

in

1945

as

com¬

£

During this period (1941-1945),
Federal Government net debt in¬
creased

more

than five-fold, non¬

commercial

short-term

corporate

financial

and

increased

loans

one-half times,
and corporate short-term debt in¬
creased moderately. Other classes
of debt contracted in varying de¬
grees: urban noncorporate mort¬
gage,
5%; corporate long-term,
10%; State and local government,
16%; farm mortgage, 22%; and
nearly

consum¬

32%.

Noncorporate urban real estate
which declined from

REAL ESTATE

mortgages,

$28.-3 billion at the end of 1941 .to

SECURITIES

$27.1

billion

at the end of 1944,
during 1945, the De¬
partment of Commerce said. Dur¬

expanded

1945, mortgages of this type
increased by $162 million as com¬
pared with-a reduction of $174
million during 1944.

ing

V

ily rising revenues, were
sible for debt retirements
and local
In

handicapped by strikes and material shortages. Decries
ate

;

something."

In

Holds

wages

the

period

ahead,

indebtedness

mortgage

since

continuous

been

that has
early

the

1920's, may be halted soon. This
was indicated in 1945, it was said,
the nation as a whole.

paper

Vice-President of
&

Lionel

Edie^

D.

Co., Cleveland, blamed the

tinuation

of wartime

much

the

of

con¬

for

controls

present inflationary

trend. He pointed out that despite
the heavy increase in the money

to

the credit of the federal gov¬

and

will

labor

stay on
job" since with increased out¬

the present volume
rency could be absorbed.
"In

the

middle

of

of

curr

'

/rv

Mr.

1940,

Bryan remarked, the money sup¬
ply was only $39 billions. It has,

Total

Net Public

tions

„

and

and

and

Members New York Stock Exchange

transferred

and individuals. As between

businesses

and

the
supply is
divided about fifty-fifty; in
individuals,

ownership of the
now

the

1940

55%

money

ownership

about

was

business and 45%

personal."

"Regarding reducing the circu¬
lation, Mr. Bryan said that "there
is only one way in - which our
direct
result
of
the
sale
of supply of money can be reduced.
new issues of government securi¬
That is through the retirement of
ties
to
the
commercial
banks, government securities now held
which the banks paid for by set¬ by banks, either with the procontinued on page 1565)
(< "j
ting up on their books deposits

therefore, increased
lions

by

$66

bil¬

170%. This increase is the

or

Sees International Currency
Essential to World

answered

Unity

by

Chairman

o

broad trends in indebtedness evi¬

Reserve

organization

Marriner
Eccles,
as follows
(p.

"An

dent

during the war will have
substantially altered by the

been

close of 1946.
The

expanding peace-time
has already increased

This note is to call
world

gage

loans

celeration

rising with the ac¬
private construction

are

of

activity.

an

the

Fi¬

Currenc y,

private debt in the United States,
written by Elwyn T. Bonnell, Na¬
tional Income Division, Office of
Business Economics, will appear

79th Congress,

in the

months

September issue of "Survey
of Current Business," official De¬
partment of Commerce publica¬
tion.
The

following

table shows a
the nation's net

Mr.

participating in the function of
issuing money and sustaining its

Alden A. Potter

Craw¬

v

Some

ford:

prohibits them from

Constitution

Session):

2nd

4 is

fore, view our state governments
as organizations
which are sepa¬
rate
but not sovereign, for the

on

and

Banking

society.

currency

patible with the existence of ; a
single currency. He must, there¬

V House

;A full discussion of public and

-

% human

ment; he plainly says that sepa¬
rate sovereign powers are incom¬

Anglo-

ment,

of

international

with an international
government." Of course, Mr.
Eccles meant a worldwide govern¬

nancial Agree¬

Committee

the basis of

are

international, not a worldwide,

synonymous

Hearings

287,

American

capital and mort¬

financial matters

f

Board,

on

short-term

attention, because of your interest in
raised by Congressman Crawford and

your

question

a

Federal

the

business needs for both long-term
and

to

peace,

economy

State

Government

Local

of

breakdown

public
years

and private debt for the
1941, 1944 and 1945:

202,446

value.

the late President
Correlatively, there can be no
Roosevelt dropped a thought to us worldwide
government without a
that the world was not yet ready worldwide
currency
system
as
for an international currency.. .. devoid of
"foreign exchange" dif¬
ago

Would

you

to comment on
of the world for an

care

the readiness

ficulties

(such

the

as

Fund and

—v

Government
———

-

—

•

—

Noncorporate, total
Farm Mortgage
Urban Mortgage

"v>

Dlgby 4-4950

,

D;

——

————

Commercial

Short-term

Consumer

&

,

54,869
6,484
28,562
9,924
9,899

—

Financial

——

50,364
•

5,271

13,725

1,379
12,346
85,882
39,347
46,535

>
r

,

;

27,134
12,182
5,777

53,834
5,081
27,296
14,723
6,734

for

Mr. Eccles:

Well, I think that an

international

and

Brooklyn Fox 3s 1957 W. S.

500 5th Ave. 4s 1961W. S.
N. Y. Majestic 4s 1956 W. S.

East. Ambassador Hotels Units

N. Y. Towers 2s 1960 W. S.

Hotel Lexington Units

yet

have

separate sovereign

is—then

governments and have
is not conceivable

sovereign

currency,

one

to

me

in

at all.

>

:

.

Crawford: In other words,

Mr.

no way

the
Woods ma¬
it might be

does it come within

Mr.

:

is a recog¬
the fact that you cannot

to

police




atomic disarmament

the members of a

cannot

Hotel St. George 4s 1950

have

Pittsburgh Hotels

have

laid the basis

have one currency, you

one

currency.

Hotel Statler

■*''•

150 Broadway
Tel. BArclay 7-4880

Incorporated

-

*

If

you

could

as

a

with sig¬

world sovereignty,

legislative power, as long

these members stand in mone¬

need

would not tary isolation such as would ob¬
Bretton Woods. The very fact tain within our own country if our

that

Savoy Plaza Class A
Mayflower Hotel

Montgomery St., San Francisco 4
EXbrook 8515

or

ment

nificant

Amott, Baker & Co.
•

proper

any

of nations. Such an arrange¬

Sherneth 534s 1956 W. S.

{

an

program among

nition of

you

have

this International

Monetary Fund is a

I.

.

approach to world gov¬
ernment by way of police power,
such as is proposed in developing
an Atomic Development Authority

Roosevelt Hotel 5s 1964

Roosevelt Hotel Common

! »

be

there

can

group

Woods

Eccles: The Bretton

Nor

of

Hotel Lexington

'■

"surrender of sover¬

feasible

machinery, of course,

Brooklyn Fox

J. S, Strauss & Co.

no

The currency, it seems eignty" is involved in any of the
to me, has got to be created by the current' proposals for promoting
sovereign power of government, international peace by disarma¬
and how you can have a hundred ment through a UNO or by treaty.

The Madison 3s 1957 W. S.

Real Estate Issues

there

United States Govern¬

no

powers.

expanded?

Beacon Hotel 2-3s 1958 W. S.

California & New York

currency,

common

a

could be

currency

concept of the Bretton
chinery directly, or as

OFFERINGS WANTED

Firm Trading Markets:

Bank, so-called, are alleged "to
resolve) as is the state of trade
within the U. S. A. Were it not

is synon¬ ment, and no truly free trade be¬
400,466
ymous with an international gov¬ tween our states.
ernment. I do not see how you
If Mr. Eccles' definition of sov¬
247,025
can have an international currency
ereignty is right—and I think it

365,115

47,797 V 205,040
16,337
14,074
1,860
1,417
14,477
12,657
83,443
95,637
43,614 ? 40,297
39,829
55,340

international currency, or whether
or not it is in the prospective fu¬

1945

,

,

.

—

—

1944

(Millions of Dollars)

-

Debt---

Agencies
government—.

Short-term

T«!e. SF 61 & 62

ownership of this money
to private busi¬

way

nesses

1946, brought to a close a period
public debt expansion such as
this
country has never
before
known, the Department of Com¬
merce said.
It is expected that the

of

1941

Private

'li Long-term
Short-term

Teletype NY 1-953

•'''•■

were

spent by the gov¬
ernment for the goods and ser¬
vices needed to wage war, and in

In 20 states

,

Members New York Curb Exchange

'

deposits

subsequently

Alden A. Potter contends an international currency is synonymous
increased in 1945
as
compared with only 8 states 4 with international government, and denies sovereignity of indishowing increases in 1944.;
vidual nations can be maintained under it.
F;
The Treasury's debt reduction
Editor, Commercial & Financial Chronicle:
program, begun in late February

local

Corporate, totals

SHASKAN & CO.

'

These

ernment.

farm mortgages

...

•

-Z

long-con¬

before the Public Utilities Section of the Controllers?
Institute of America in New York City on Sept. 17, Robert F. Bryan,
a

when the decline was retarded for

,

State

155

a

necessity to "liquidhave risen more than prices.
- d
&■
no

the Department of Commerce said
that the downward trend of farm

Federal Government, Federal Corpora-

Bell

respon¬

by State

governmental bodies.

.viewing

'

QUOTED

40 EXCHANGE PL., N .Y.

money supply is not
permitted and industries were not

ture?

BOUGHT

SOLD

_

during the war years. The
limited
opportunity for capital
expenditure, reflecting wartime
conditions with respect to supply
of materials and labor, plus stead¬

and

one

noncorporate short-term
er,

-.

,v

tions

tional

pared to 1941.

had been asked to
withdraw the building from the

rental

t

OPA's

permission

were

tinued recession in business since there is

the

duced

In

day

ping, brother of Dan Topping, part

production

put

State and local governments re¬
their outstanding
obliga¬

$6.7

debt

consumer

billion.

decision, handed down to¬ ment of Commerce said that the

by Ira Schiller, chief area
attorney, was directed against
Samuel H. Berman, record owner
of the
property.
Twenty-eight
tenants were affected, including
Peter Arno, the cartoonist; Hiram
C, Bloomingdale, the department
store executive; John Reid Top¬

excessive if full

removed

Reports Indebtedness Still Rising

12-story
building

was

Robert F. Bryan of Lionel D. Edie & Co. holds

supply, the amount would not be this
excessive "if price controls were was

operating profits under rent ceil¬
ings:,
luxury-type

Maladjustments Due to

operate his property at a loss.

.

New York 7, N. Y.
Teletype NY 1-588

the

fact

that one

recognition of

currency

is not

possible.
In

other

states

the

Bretton

Woods and allied arrangements

in

money

before

the

as

the

did

Union

was

formed.
,,

words,

issued

Colonies

,

Bethesda

ALDEN A. I'OTTEK.
14, Maryland

September, 1946.

V

.

Volume 164

Number 4528

THE COMMERCIAL

FINANCIAL CHRONICLE
&

ing

Churchill Pleads for

operations

must

be

severely

restricted because there is
age of manpower,

it

a

short¬

seems.

Trends in the Stock Markets

By WILLIAM McKAY

Proposes

United States of Europe in which both Germany and

a

Newfoundlanders

France would take leading parts. Cites League of Nations as prece¬
dent and ascribes failure to desertion from its principles.
Ex-

Canada.

are not inclined
favorably toward
proposition as they fear the loss of business to Canadian com¬
petitors.
The present commission form of government which came
into being during the crisis of the last depression is believed to be
highly unpopular, however, and^

presses

'

Conservative merchants

the

gratification at President Truman's interest and sympathy
proposal, and holds it does not conflict with United Nations
Organization.
Urges oblivion of past and look toward future.

:

debating whether should apply for the
territory as a province in the Dominion of

are

admission of their island

in his

Holds first step in recreation of European family is partnership be¬
tween France and Germany but says little regarding Russia.

there

is

doubt

no

considerable

a

part of the population, consisting

largely of fishermen, would wel¬

Speaking in Zurich, Switzerland

no

The prices of securities on the
stock
markets
during the last
week followed closely the trend
in

New

York.
Golds, however,
fairly steady. In New York,
demand was good for both

were

the

Canadian
and

Government

entry
The

Canadian

delegation will be
McKinnon,.

riers to trade within the national

Chairman of the tariff board and

boundaries

President

United Europe,
with
both

noble

advantages

Franceand

cultivated

of

of;

world.

is

It

and

of

ethics.

the

most

the

the

foundation

Canada

of

which,

federation

entire

thrashed

is

at

now

national

a

convention at St. John called for

origin of most of the

the

Great Britain purporting to indi¬
cate what the people of the island

of Nations. He

culture, art, philosophy and sci¬ think their government should be
The
commission
both of ancient and modern like.
govern¬
times. If Europe were once united ment is disliked, it is said, partly
in the sharing of its common in¬ for the reason that many of the

made little ref¬

heritance there would be

on

principles of

ence,

the old League

to Rus¬

limit

no

the

to

happiness, the prosperity
Winston Churchill
and the glory which its 300,000,000
sia as a mem¬
ber in the proor 400,000,000 people would enjoy.
<*
posed organization, but stressed Yet it is from Europe that has
the importance of a partnership sprung that series of frightful and
between Germany and France.
nationalistic morals originated by
erence

commissioners have

been

British

civil servants who have ruled the
land with an attitude developed
from

years

areas

as

of

India

service
and

for

move

in

other

sections of the British
the

Hector

of

Commodity

$150,000

Prices

such

remote

Empire.

federation

If

should

Province of

Efforts to Settle Steel Strike

being

Christian

and

by

Stabilization Corporation.

|

issue

out

headed

would

>!>■.;' '

The

<

other

think,

Canada

with

bring.

and

they

the purpose of drawing up recom¬
mendations to
be
presented to-

of

.

is

It

the

faith

Christian

a

States

Europe

based

fairest

regions

the

on

earth,
enjoying a temperate and equable
climate, j is the home of all the
great parent races of the Western

H e
nership."
suggested the
United

the

whole

Germany in a
"family part¬

creation

continent, comprising

bar¬

Bog Down'

ALBERTA

f Efforts to settle the steel strike
continue to bog down deeper and
deeper.
The union now has re¬
affirmed its demand for a 15%
cents
and

hour

an

refuses

increase

in

2%% Bonds
Due June 1, 1951

budge from this
Perhaps decisions by

position.

(Non-callable)

the War Labor Board to grant
workers in other fields wage in¬
creases

cents

ing

ranging
hour

an

the

on

from

15

have

may

matter.

to
a

A

and

gentlemen:
I am
honored today by being received
in your ancient university and by
the address which has been given
to

on

me

your

behalf and which

17

Payable

bear¬

ot

15-cent

Europe has been reduced?
of the

to

speak

to

smaller states

made

today of
about the tragedy of Europe. This
I

plight to which

good recovery, but

a

areas

a

vast

quivering

over

mass

tormented, hungry, careworn
(Continued on page 1566)

you

AFL Firm Against Sovietism
By WILLIAM GREEN*

President, American Federation of Labor

Attacking both Russian aggression and dual unionism, veteran
labor leader calls for support of a firm foreign policy and a united
stand of our government's efforts to maintain and reinforce world

Calls attention to infiltrations of communism in CIO unions,
and condemns Russia's labor policy as enslavihg the worker by
making him creature of State.
peace.

;

The great hope of the

victory could be crowned with lasting world

make

Saturday,

for

crease

of

37,000

15

instance.

British

Today, instead of international
accord,

W

sion.

The United Nations

zation

e

have international ten¬

we

is

united

on

gave food and
supplies and
money to our

The

bitter

split

has

Allies and

and Soviet Russia

even

to

time when

ages

in

I

deliberate

a

in

se-

and

existed

the

assets

on

side

one

with her Com¬

Inventories of

cents

An

and

in¬

Price 100 % to

to

more

course

of

on

expansion

seized

the

territory

and

of

d in order
William

Green

meant what

of

former

enemy

workers

and

is

driving them under conditions of

says

-

the

union.

in

ence

Confer¬

which opens on Oct. 15 will

for

press

clarification

a

of

U.

S.

custom regulations.
A spokesman
said: "It has been the

experience

ol'

Canadian exporters in
past that the United States
administration of tariffs and regu¬
many

the

lations is

so

complex and requires

much

documentation

and

leaves

so much discretion to the
individual officer that there have

been reports that goods have
gone

through
through
been

one

port

cheaper. than

another.

cases

There
have
where importers have

tired of all the documentation and

delays

occasioned

American

system

through

steel strike in

"holding

are

worse

the

than the

strikes,
particular,

country

war

ever

back

did."

have

and

the

forced

said in

peace.
Yet here
year

which
we

are,

more

than a

after V-J Day without hav¬

ing secured any tangible progress
toward our great objective. Other
nations have been eager to take

everything, we had to offer, but
persistently unwilling to

remain

give even the slightest
cooperation for peace.
■

,

*An

address

token of

.delivered by Mr.

before the Illinois State
Federation of Labor Convention,

Green

Rockford,

labor

Ili.,-Sept. 18,1940. ;,; /




our

to

own

rebuild

her

American

own

<orporati02i

Over direct
we

are

market

with

fast

ful missions.
time

furnish

to
a

and

to

tl^

come

to

call

purchase the

lines

toba Railway

Company,

of

the
a

Mani¬

come

showdown. ■ Unless
to

a

CANADIAN BONDS
GOVERNMENT
PROVINCIAL

vf

I

MUNICIPAL

CORPORATION

►'

!

subsid¬

iary of the Northern Pacific Rail¬
way. -j The Dominion Bureau of
Statistics has reported that visible

supplies
store

of

America

Canadian

in

or

at

transit

wheat
in

in

an

CANADIAN STOCKS

North

Sept. 12,
79,556,200 bushels,
12,289,197 bushels
over the total for Sept. 5.
'7-:V'-' •
Inadequate Labor Supply in

amounted

midnight,

to

increase

of

;

A. E. AMES & CO.
INCORPORATED

Northwestern Quebec

The lack

of

adequate labor

an

supply is holding

up

the develop¬

northwest portion of
the Province of Quebec, the Mon¬

ment of the

bond

investors

comprehensive

in

TWO WALL STREET

NEW YORK 5, N. Y.

RECTOR 2-7231

Street, New York 5

WHitehall

service.

NY-1-1045

taylor, deale
;'-v Sl company
64 Wall

this

a
1.1-1- •

aggressive tactics of

dependencies. The time has
a,

v

3-1874

Inquiries Invited
has

Soviet Russia and her Communist

for

NY 1-702-3

vs

application in Chambers Court at

Winnipeg for permission to pay
$7,000,000 into the Manitoba Court
of King's Bench on an option to

,*

halt

New York 5, N. Y.

Bell System Teletype

hog production.
The Caba-:
Railways will file an

private wires to Toronto and Montreal

able

40 Exchange Place,

dian National

Canadian Bonds

boys

helped to liberate and to whose
starving people we are still send¬
ing vast amounts of relief sup¬
plies, has shot down and killed
American fliers, bound on peace¬
The

de¬

Dominion Securities

Price Control Costs Canadians

proclaiming the goodneighbor spirit as the basis for economy. She has fomented revo¬ cided to let it go and not attempt
treal
Board
of
Trade
and
La
iuture international relations. We lution in nations like China where to
import goods from Canada
Chambre de Commerce found in a
helped to form the United Nations we are trying to restore stabilized again.
Therefore, the wholesale tour of the region recently. Both
Organization, the UNRRA and conditions. Her agents are spread¬
removal of tariffs would do us
agricultural production and min¬
ing
propaganda
hostile
to
the
many similar financial and eco¬
nomic agencies through which we United States in Japan, in South
could make our contribution to America and in other parts of the
world reconstruction and world world. Her satellite, Jugoslavia,
we

Toronto and Montreal

last week that all

but the

and

Regulations

The Canadian delegation to the
London preparatory meeting for
Trade

Direct Private Wires to Buffalo,

Re¬

wood

International

yield 2.65%

Columbia

pulp in the
: $900,000,000
U.
S. have been comparatively
) Operation of the price control
low, amounting to only 531,647
machinery in Canada from 1941
tons at the end of July, or less
to March 31 of next year will cost
than
17 days' consumption
and, the Canadian Government a
grand
it is believed, increased U. S. con¬
total of something like $900,000,sumption of paper and papers
000, it has been estimated.
This
board along with the failure of
figure includes War Price and
the Scandinavian countries to re¬
Trade Board bills amounting to
sume
volume shipment of wood
about $440,000,000 and Dept.
of
pulp to the U. S. has made the
Agriculture subsidies of $455,000,U. S. lean heavily upon Canada
000, $80,000,000 to keep the price
for both wood
pulp and paper. v
of bread down and
payment df
$375,000^00 to bonus gvaife, dairy
Want Clarification of Tj. isL

too

neighboring States.
She has plundered occupied ter¬
ritory. She has enslaved millions

own

to p r o v e we

the

between

all directions. She has reached

out

our

a n

a

short-

rious

that

Soviet Russia has embarked

en-

at

is

nations

munist satellites on the other.

our

conquered
emies

truth

occurred

democratic

Organi¬
only.
a
sharp

paper

from

States

States

currency

loggers,
17 cents to 1,800 textile work¬

couver

newsprint
United

August totaled 294,847 tons, the
largest amount ever sent across
the border in any single month'.

the

every

sacrifice.

was that
To achieve that

peace.

of
the

to

Custom

American people after V-J Day

goal,
our
people w,ere
willing to

Shipment
Canada

United

construction Minister said at Van¬

,Increase

Some

have indeed

in

Canadian

wage increase for 750 Vancouver
longshoremen was announced last

granted,

Newsprint Shipments to U. S.

And what is the

wide

I greatly value.

wish

all mankind.

.

wages

to

The
text
of
Mr.
Churchill's the Teutonic nations in their rise fail, it is likely therefore that of
other
form
of
self-rule ers at
to power, which we have seen in some
Courtauld's in Cornwall
speech, as monitored in London
this twentieth century and which would be adopted. Newfoundland and of 15 cents to
2,000 steelby the Exchange Telegraph and
have for a long time wrecked the would be' Canada's tenth prov¬ workers in four British Columbia
reported by the Associated Press,
ince.
locals of the
peace and marred the prospects of
union have been
follows:

Ladies

come

we

can

clear and honest under-

continued

on page

1565)

v.

i

Wood, Gundy & Co.

i.

*

-

*■

CANADIAN

SECURITIES

Incorporated

14 Wall

Governmentr

Street, New York 5

Bell System Teletype NY 1-920
•rmfti

r

"'

if regulations hampered
into the United
States."

good

on Sept. .19, Winston Churchill,
wartime Prime Minister of Great Britain, made a strong plea for a
recreated

the abolition of tariff

come

internals

high grade external bonds.

Municipal

Provincial

Corporate

THE COMMERCIAL & FINANCIAL CHRONICLE

1546

six... companies reported a com-,
bined
ratio
for
the
first
six

SEC to;

.

months of 1946 under

Bank and Insurance Stocks
This Week

Insurance Stocks

—

Co. of North America and

surance

Aggregate operating results of 85 stock fire insurance com¬
panies for the first half year of 1946, compared with the first half
of 1945, are tabulated below.
These figures are as published in Best's
Bulletin Service, compiled from the Tiled statements of the companies.
•

•

,■.

.'

}.

/

•

.

Net

:

808,777

/

484,728

ratio

these

-11,444

for the

6.9

1.0

+

■

4.0

+

39.9%

+
+

19,082
62.2%

39.5%

,

.

,

102;1%

-99.3%,

ratio

Dividends

declared

13,194

jThe Bulletin

points

•;

-

2.8

+

3.2

premium volume, is up
a
rate of gain approxi¬
mately double that of the past
few years, and probably reflects

two

last year
while

{

dividends

3.2%.

noted,

are

These

are

of June 30, 1946, the vol¬
ume
was
running approximately
20% above the 1945 peak.

before Federal-taxes.
total figures for the

are

in Insurable entire group of 85 companies. Na¬
underwriting turally, the experiences of indivi¬
results compare unfavorably with dual companies vary considerably;
last year; however, after adjust¬ it therefore is pertinent and of in¬
to
present Table I and
ments for the 14.7% increase in terest

as

the inflationary rise

Statutory

values.

/ •'

Table II.

40%

unearned premium reserves,

1945

Chg.

(000's Omitted)
3.0

21,450

25,736

20.0

3,656

-3,863

7,916

American

Bankers & Shippers

7,679

9,376

29,025

30,871

22,343

23,717

♦Ins.

24,796

27,033

9.0

21,723

8.9

11,363

13,436

18.2

6,482'

-7,766

9,056

16.6

3,934

4,883

24.1

2,230

10,198

21.8

13,834

10.7

117,045

149,930

28.1

2,627

6.0

8,639

8,124 —6.0

12,319

9,249

8,812 —4.7

6,993

22,347

A.__

22,184 —0.7

18,890

Union

Security Ins.

—i

Springfield F. & M.

8,375

Average-

■1,187-

14.2

6,230

TABLE

.

6 Mos. 6 Mos.
••

.i

'.V.1945

'//'

Agrictultural

%

101.5

__

103.7
95.3*

103.0

American

98.4

94.2

110.3

Camden

:

Continental

647

533

595

91

88

—3.3

122

250

256

2.4

891
+1,069

2,351

2,423

3.1

1,917

2,027

5.7

959

1,110

+

,1,184

.+

+

1,059

+

985

+

532

+

97.4

456

159

:

112.4

359

366

•;/

107.0

178

410

91.7

& Rutgers.—___

271"

the
at

.316

16.6

169

167

—1.2

332

4.4

97.2

12

106.5

123

89

106.1

107.3

254

530

258

218

Security

104.3

109.6

257

408

166

168

1.2

Springfield F. & M.~—-

102.8; 106.3

370

791

Z 511

Totals

+$1,504

_____________

101.2

Average

59

.

,V

$9,921

+ $565

59

.

535

$10,538

New

capital and sur¬
plus in Table I, only three com¬
panies report a lower value .on
on

6-30-45, viz: Na¬

tional

Union,
Security and
Springfield.
The maximum in¬
crease of 28.1%
by Insurance Co.

and

INSURANCE

of North America

Laird, Bissell & Meeds
Members New York Stock Exchange

120 BROADWAY, NEW YORK 5, N. Y.

BArclay 7-3500

He

will

The

/.

increase

In Table II it will be noted that

ANAYLZED

—

REVIEWED

Trading daily 7 a.

m.

to 5

■

p. m.

at

sistant

Special Bulletin and Booklet Service to Dealers & Brokers

KInquiries invited.

;

,7';,..

will

the

PRIVATE

TELETYPE L. A. 279




San Francisco
—

Professor

L. A. 280

—

said, then the SEC would take
against the operators andt

action

there would be

Seattle

-

tightening

a

up of

SEC rules.
Officials of SEC

don't

know

admitted they

what, the

results

of

the investigation will show. They
indicated that it "was going into

with

entirely

an

mind

open

until the information has been

as¬

sembled and interpreted."

'

■

Pieter

Lieftinck, Netherlands Minister ' of Finance,
York, on Sept. 22 aboard K. L. M.'s Flying Dutchman,

to
'

under, control

a

and in stabilizing
prices and wages."
?

A d

r

DENVER. COLO.—The Marshall

Min-*

DeJong,

Adrian Company,

Dr.

a a n

Pieter

M.

d i

"

-

of' the

rector

who

Marshall Adrian Company

ompany-

i

Prof.

<*;

*-•

which

last for about

During

Lieftinck

said

be

during the

expected

are

to

was

a press

difficult

what would

see

be

him

for

to

discussed

since he had

meeting,

the

say

the

at

as

Vice-President,

luncheon

Commodore

on

The

acting

General

the agenda.

;

,

E.

at

following organizations
as

the

York, will preside.
are

.hosts in the entertain¬

ment

of the

New York

visiting Administra¬
Stock Exchange,

cussions will deal with the whole

comment

to

Asked

Australia and New Zealand

BANK~OF 777/577
NEW SOUTH

Stock

Exchange

Association,

covery,

"I

think

Professor Lieftinck said:
both'institutions will be

useful for the development
post-war economies and the
abolition of exchange control by
nations

individual

and

tribute largely to the

Liability of Prop.- 8,780,000

___■

/

Aggregate Assets
Sept., 1945

may

£23,710.000

30th
_____£223,163,622

THOMAS BAKER
General

Head Office:

7
29

HEFFER,
Manager

LONDON

OFFICES:

Threadneedle
47

:.•/ '

George Street, SYDNEY

Street, E. C. 2

Berkeley Square, W.

1

/ :

;

Agency arrangements with Banks 7/

throughout

the

U.

S.

A.

reply to a question by one
reporter as to whether the or¬

NATIONAL BANK

ganization would serve to prevent

of INDIA, LIMITED

depressions, Professor Pieter Lief¬
tinck

will

replied:
not

"I

succeed

am

yet to

but it

depressions,

afraid

may

Bankers

v/e

if that implied that de¬

Asked

inevitable*the

Pro¬
concluded by saying: "It all
on

ernments

keeping

whether national gov¬

will

be

successful

in

the investment business

Government

7

in

Office:

Head

26, Bishopsgate,
London, E. C. •'

in

India, Burma, Ceylcn, Kenya
Colony and Aden and Zanzibar

Branches

smooth them out."

pressions are

the

Kenya Colony and Uganda

prevent

help to

to

Subscribed Capital--.

Paid-Up
Reserve
The

Capital—
Fund

£4,000,000 '
£2,000,000

—£2,200,000 ~;

conducts
every
description, of
banking and exchange business

Bank

Trusteeships and
also

Executorships(

undertaken

-

-

/
"f

con¬

distribution

In

depends

Association, New York Open-

£8,780,00®
6,150,00®

,—

Fund

credits."

of foreign

fessor

ers

1817)

Reserve

very

of

Dealers, New York Security Deal¬

End Investment Companies.

Capital

Paid-Up

7

WALES

(ESTABLISHED

the

upon

role of the bank in European re¬

Y.

of

Ed¬

E., R.

Reserve

set-up of the fund and the bank."

Sept.

of

and

wards, Secretary-Treasurer.

yet to

Requested to comment upon the
immediate objective of the meet¬
ing, he replied: "I think the dis¬

business

Willard

Robert

are

Botkin, President; G. Ernest Ryan,

week.

a

interview at the
airport, Porf. Lieftinck stated that
he had not brought any specific
proposals from Holland and that
it

Officers

business.

Bank,

will

Colorado Build¬

ing, is engaging in the securities

'•

^

Netherlands

Lieftinck

his alternate governor,

meetings

He

arrive in -Washington
on Wednesday to prepare for the
International Bank .meetings
scheduled * to begin in that city
next Friday.
/ 7* •• * * /: x 77

next

was

Government..

expects rio

struction

ister

for

official visit-with

an

—

"7*7-

•'7 •'■

c c

La-

left

immediately

Canadian

the

Friday
in
Was hington.,
A

Field

•Ottawa for

and

ing, the

Lieftinck

Professor

ternational

n

National Association of Securities

WIRES

—

a

Investment, jankers

210 Wrest 7th St., Los Angeles
Chicago

business

Firms, New York Curb Exchange,

OF CALIFORNIA

—

Florida.

of

the

Dr.

be

Attorney

Association

York

at

include

tors:

(P. C. T.)

Orders solicited.

BUTLER-HUFF & CO. Z

New

b

.■

State of New

COMPARED

—

at

27, at which John J. Powers, As¬

Quoted

—

State

Atkins, who, together with Harold
G.
Moulton,
President
of .The
Brookings
Institution,
and
Dr.
George W. Edwards, prepared the
recent report of that Institute on
the subject of the capital markets.

Co. of

Insurance & Bank Stocks
Sold

Securities'Admin¬

the

speakers

sessions

noon

—

or

T

There

Bought

Chair¬

Stock

preside

sessions.

(L. A. Gibbs, Manager Trading Department)
-

of

istrator

a

North America, report an
in net premiums written.

1-1248-49

York

Edwin Larson,

influenced

man's Fund and Insurance

the

to

President of the Association is J.

25% increase in capitaliza¬
tion through the issue and sale
of additional shares in December,
1945.
All companies show a gain
in unearned
premium reserves,
and all companies, except Fire¬
by

STOCKS

Teletype—NY

was

election

Exchange, will
speak briefly. The annual meet¬
ing of the National Association of
Securities Administrators opened
on Wednesday, Sept. 25, and will
continue through Sept. 27.
The

With regard to

6-30-46 than

Friday,

on

ney, General of the State of New
York, will preside at the dinner,
and Emil Schram, President of the

4.7 '

+ 6.2

+ 3.9

BANK

Bell

1,961

1,794
?•:

102.2
.

Telephone:

345

of .Se¬

manship of the Securities and Ex¬
change Commission.
' 7 /
Nathaniel L. Goldstein, Attor¬

—15~5

N. A

Union

Commodore

the

since- his

9.3

100.2

of

Co.

National

Association

Sept. 27. This will be Mr. Caffrey's
first
public
appearance

15.7

318/

National

curities Administrators, to be held

'

1110.7

Ins.

Jersey

Caffrey

J.

11.6

133-

+

If it is ascertained that pools
operated in the market, Mr. Trean¬

Netherlands/Bank, to attend meetings of International and
Lauds usefulness of Bretton Woods institutions, but
cautions they cannot prevent depressions.

opensJames

Emil Schram

3.3

$283

—

114.3

Falls_____i____^_—.

Globe

Hanover

+

—

'

turned to its New York office by
Oct. 7.
/■/.'. ^777+//v: /'///.v7:

of

Develop¬
ment, which

Change

47

+

the proposed investigation on
Sept. 3 warranted .it. > The Com¬
mission requested: that informa¬
tion in the questionnaires be re¬

World Bank.

and

r

185

385

—.

—

4

I

1946"'/%

$274

102.9

Glens

6 Mos.

1945

"short

Dutch Finance Minister Arrives

Bank

-

sale,

a

a

of

Guardia>

/

represented

of

pur¬

or reconstruction of other
trading
days would be followed if results

Governing
poard of the

(000's Omitted)

—$229

$84

.

name

it

a

"stop-loss" order.
Mr. Treanor stated also that' an
investigation of specific securities'

this

the

addiess

a

or

levels of

Net Inv

6 Mos.

1946

91.7

91.7

Fund

'*

whether
sale"

and

name

customer, whether
or
sale, "and
if

chase:

Prof. Pieter Lieftinck accompanied by Dr. A, M. DeJong, Director

f

c o n

} (OOO's Omitted)

—

this

Fund for Re-

6 Mos.

?

on

the

each

meeting bf the

rlncome-—-. ■,: v7;/77"'.

1945

im¬

share,

4,783

additional shares.

■

causes

of the
security, the number of
shares and price of each security,
the number of shares and price a

12,821

•

88.5-96.2

Fidellty-Phenix
.Fireman's

106.1
102.6

92.4

Shippers

6 Mos.

;.

when
severe

and

restrictions

attend

v

t——Results

1946

%

■

/;•/,/; '

■" / Net /: m,
Underwriting

Combined

Underwriting
—Ratios—-

II

a

form of

Schiedam,

_

♦Capital increased 25% December, 1945, through sale of

for

short-selling

arrived in New

7,707

10,724

or

•

1,339

•

*'3/946'
,

new:

blame

j;

20,909

22,438

14.7
8,020
22,351 .18,3

posed

1937

in

made

was

on

'

213,949 238,846 + 11.6 133,998 148,866 +lhl
+ 14.7
+19.8

—___+i 8.9

V-

11.8

14,069
r

change for data on sales made
during the day. A similar inves¬

6,580

4,853

,

0.4

2,599

•

2,324

which

woiildt be; sent' io every member
firm, of the New York Stock Ex¬

3.174

31,929

31,814
j

477,480 555,573 + 16.4

Totals

Bankers &

21,128 —2.7
8,604
32.7

9.8

2,478

N.

principal

the

13,456

15,593

12,497
of

Co

Jersey
national

will ' be

questionnaire

a

i

13,235

49,629

pared

speaker at the annual dinner" of

16,748

econstructed

ute averages and that he has pre-

Chairman of
Com¬

Caffrey,

mission,

6.1

18.2

14,319

Hanover

J.

James

the

sale by sale in
fifteen- min¬

27,

5,912

4,582

16,512

»

Treanor, Jr.

Commission will ask for the

2.173

1,858

lor

day would be
A.

the Securities and Exchange

6.4

88,651 104,787

Globe & Rutgers—

Sept.

Friday,

re-

that

trading.
According to Mr. Treanor,

will
; climax three-day annual meeting.
Dinner

;

22.1
-

45,212

Fund____

Falls

Glens

'.13,594

11.8

4,068

3,638

1*1
15.7

■:+.

6,113
17,369

■

17.2

8,007

Fidelity-Phenix
Fireman's

22,903

5!7

$

4T404

25.1

9,447
26,849

7,553

107,209 124,077

Camden

Continental-.

,1946.

$

$

$

9,314

%.
(COO's Omitted) Chg.

6/30/46

6/30/45

\7 {,

6 Mos,

6 Mos.- "

Prem. Reserves

Chg.

(OOO's Omitted)

i on,

transac¬

v.r
J.

the SEC laid

||f

s

ported
tions

Administrators/

—-Wr i tten—+,

Unearned

6/30/45 6/30/46

9,046

~

f

the:

break

Address Securities

Net'Premiums

Cap. and Surp.

Agricultural Ins

•'/./":<'

'

i

v

:

tigation

Gaffrey and Schrant to

I

TABLE

Jr.-,
o

Trading a n d
Exchange Di-

companies on

Indications

business.

the

of

that,

A.

Director

Dec.

These figures; it should be

James

Treanor,'

.

is up 6.9%
declared are up

t's

the'SEC's

j It is of interest to remark that

Net investment income

jNet.
19.3%,

3.

change and only
/ / .7

31, 1945 reported the highest
premium volume in the history

e

brupt and
steep
decline
on
September
a

show. lower profits.

stock fire insurance

comparison with
appears less unfavorable.
the

aur k

m

•

61.5% below their totals

no

cause

of" the

same

shows

pany

| company,

attempt will be made to find the
stock ❖

an

•

Companies report a gain, one com¬

underwriting results, company bv

approximately only 35% of total
business, nevertheless, their oper¬
ations provide a reasonably good
index of the entire industry.

It was announced by the Securities and Exchange Commission
Sept. 23 that

I

picture of net investment
income is quite different, since 13

statutory

of whieh is creditable to

write

]
on

The

that®'-

out

companies

85

these

13,613-

-

(

period in 1945. Nine
companies out of the 15 report
underwriting losses.

19.3

+

—28,232

;

17,846

—-

are

+ 14.7

302,440

—_———

—

Combined

while

+ 12.4

'

422,566
253,527

—

income

+14.3;

909,173

Treanor, Jr., Director of Trading and Exchange Division,
will seek through questionnaires to reconstruct market of Sepl. 3. 7
Wants to know what group of operators were most active, v/
;7 /

Jersey; but only one of these, In¬
surance Co., of North America, re¬
ports underwriting profits in 1946.
The 15 companies in the aggre¬
gate show net underwriting prof¬
its for the first half of 1946, yet

Change

$1,608,330

59.8%

ratio

Expense

$1,406,644

_^Jr

reserves—

written—
underwriting

Statutory
Ket investment

June 30, 1946
(OOO's Omitted)

June 30, 1945

(000's Omitted)

f

v

—

premium

premiums

Loss

'

,

.

—_______—__.

surplus

and

Capital

Unearned

{;

■

,

1

+

assets

Admitted

Investigate Stock/Market Break

James A.

same

DEUSEN-

VAN

A.

E.

By

100%;, these

companies report a net un¬
derwriting profit. Only five com¬
panies show .improvement over
1945, viz: American, Bankers &
Shippers, Globe & Rutgers,. In¬

Thursday, September 26, 1946

-

-

-

-i i

'

^Volume 164
"i

Number 4528

'

THE COMMERCIAL &

FINANCIAL CHRONICLE

1

Wallace Resigns From Cabinet
At Truman's Request
j

Haniman, Successor to Wallace,
Backs Truman Foreign
Policy
Newly
Secretary

Commerce

Secretary, after receiving telephone request from Presi-i
dent, immediately complies. In evening radio broadcast, he says*he will "carry on fight for peace." President Truman issues formal^
of

statement

;

the

of Commerce issues statement in which
Mr. Truman and Byrnes are carrying on the high principles
laid down by Mr. Roosevelt on the road to
peace.

position at press conference and;
Republican National Committee announces in i

W.

morning of Sept.

extended conference with

20,

hardly

12 hours after he had

Averell

Harriman,

an

Secretary of Commerce Henry A. Wallace,

stitute
for

of

The

Public

Relations,

National

for

the

in

New

Arthur

C.

Persia—A

ing Procedure
ness

—

Research

Cost

which

of

23,
he

the

a s

of

following
tinue

which

in

it

office,

stated

was

but

that

the

Secretary

would make no further
(Continued on page 1566)

would

public

Busi¬

and

The

Financial

CHICAGO,

con¬

utterances

to

Gordon

Laury

have

staff of

South

ILL.

and

W.

to

Commerce,

appointed to office by Eugene Meyer. !
formerly connected with Netherlands Trading Co. and was
Dutch delegate at Bretton Woods. '

I

{Special to The Financial

'

"

Eugene Meyer, President of the International Bank for Recon¬
announced the appointment

struction and Development, on Sept. 20
of Mr.

Ionghj of the<;>
Treasurer of the ' erlands

as

Bank.

v'

.

dell B. McEwen has become
nected

Indies

the

at

request

of

don

where

he

served

an

as

•

nected

in

LOS

ter

Week

are

change-.

lantic

with

and later bePresident and then
President of the Society in Am¬
sterdam, resigning the latter po¬
sition in September, 1939.
?
f t He went to the Netherlands
'East Indies in December, :1939,
.and was serving as Chairman of

lands

,came

the

East

Indies

Netherlands

iCompany
•was

Indies,

Vice

Airways

the Netherlands

when

by the Germans and

overrun

Bretton

Woods Conference

City.

He was also Chair¬
man
of, a
governmental agency
representing the economic and fi¬
nancial
areas

United
he

interests

of

the

Financial

dition, he is

an

an

exchange control and manage it.
A few

days before the capitulation

fo the Japanese, he left the Neth¬

for

&

of

the

Los

H.

•

Angeles

Mr. Week
R.

Stock

>

.

,

on

exclusive

105.1%

Baker

&

of capacity

ago, the American Paper &
Pulp Assn. reported on Sept. 23.

year

Industry-capacity is based on a
six-day week and many mills
currently
are
operating
on t. a
seven-day schedule.
Paperboard
production
was

v

opportunity

of

newsprint, was »at
for the week
ended
Sept.
14 compared with
86.7% in the preceding week and
94% in the corresponding week a

of

various missions,

the

the

101%

to

for the current week

J. Barth Admits Dimond

help and moral leadership.

SAN

FRANCISCO, CALIF.-r-J.
Barth
&
Co.,
482
California
Street, members of the New York

of

Ex¬

and

stable

a

and

expanding

econ¬

at home is of primary impor-

omy

Co. V

\v-'

Counselor

'4<

tance.

Expanding peace-time

San

changes.

Francisco

will

Stock

admit

Bank for Reconstruction and

111

•I,

De¬

International

pro-

of these

any
;■?.

\

fr

85,512 Shares

X£XX;- y.X$:'X..

Scovill

j«;

'•

'»'

■

...

r':'"

'X-£

Manufacturing Company

Until December 1, he will de¬

vote as much time as possible to
the work of Treasurer of the Bank
and thereafter he will be on > a

Common Stock
(Par Value $25

a

Share)

;

!

j;

full-time basis in that capacity, r

X£XXXXI^XXXXXX^XXXXXXXXXXXXXr.
*

This is
To

the

-Holders

not

-•

Offer

an

;

of
.

These shares

upon

a

;
...

,

the

are

those which

exercise

were

not subscribed for

of subscription

warrants

issued

Jo holders of the Common Stock of the Company.

.

7

,

•

City of Bogota
.

<

>

1(Republic of Colombia)

8% External Sinking Fund Gold Bonds of 1924
f

Dated October 1, 1924, Due October,1,.1945

Municipality of Bogota
7-7-

Price $30 a Share

v

(Republic of Colombia,

-•

.

T,

-

<•

Power and Light Consolidation Loan- of 1927
w.^V::>^:^Tw€Aty-Year'External 6%% Secured
Sinking Fund Gold Bonds
Dated
i

Copies of the Prospectus

^

V;777;777.7

:

7'

'

may
.
.

may

be obtained from only such of the undersigned as
7;-7 ^7";

teidUy °ffer these Shares in compliance with the
securities laws-of the respective States,

April 1st, 1927—Due April 1st, 1947
NOTICE OF EXTENSION

/■X':'^X£ ''XX-X

The time within which the Offer, dated November 15,
1944, to

exchange the -above Bonds and the appurtenant coupons for
Republic of Colombia, 3% External Sinking Fund Dollar Bonds,
due October 1, 1970, may be accepted is
hereby ^extended from
October 1, 1946 to October 1, 1947.

Copies of the Offer may be obtained upon application to the
Exchange Agent, The National City Bank of New York, Corporate
Trust Department,, 20 Exchange Place, New-York 15, N. Y.

Juan Salgar Martin
t

September 26, 1946,




*

Mayor of Municipality of ~Bogota
^(Republic of Colombia)

MORGAN STANLEY & CO. : :

.v'v,- :■>
•

•"

CLARK, DODGE & CO.

DOMINICK & DOMIN1CK

•7.

,;

7,7v ■'

:

"■

WEEKS

KIDDER, PEABODY & CO.

•

X

SMITH, BARNEY & CO.
-

r\

■

■

;■

;

' J-

THE FIRST BOSTON CORPORATION

HORNBLOWER &

Incorporated

September 21f, 19J6.

7-.-

CHAS. W. SCRANTON & CO.

DREXEL & CO.

HARRIMAN RIPLEY 4b CO.
,L...:

r

.

.

r.

WHITE, WELD & CO.
-

Ex¬

Douglas M.
Dimond to partnership. on Oct., 1.

an offer to sell nor a solicitation of an
offer to buy
rii" Shares, The offer is made only by the Prospectus. ,,yv :;:7

kt[

com¬

pared with 83% a week previous
and 96% a year ago.

This announcement is neither

1946

.

101%

In playing our part in world
reconstruction, the development

previously

was

; to

United States paper production,

opportunity

during Mr. Roosevelt's first

had

at

In ad¬
Alternate Execu¬

\

up

Fairman

tive Director of the International

Indies

set

with

road

v

Basis-Paperboard

learn at first hand of grave eco¬
nomic
problems that face the

;

the

the Netherlands Embassy.

•Jhe^was asked by the Netherlands
to

now

the

peoples

Paper Output at 105%

Harriman's

merpber and then chairman

have

lies

for Netherlands Indies Affairs of

velopment and the
Monetary Fund.

Government

in

in May,

and

I

There

overseas

Netherlands

States,

became

the

of

Chronicle)

for

peace.

the business advisory commit¬
of the Department of Com¬

Mr. Truman

Co., 210 West 7th Street, members

and to the UNRRA Council in At¬

to the

Financial

evelt.

ca¬

ANGELES, CALIF.—Wal¬ peoples of
Jpurope and Asia. They
Simpson and Charles O. look to us with hope and faith

W.

lands
Trading Society, a large
banking institution with offices in
the Netherlands and the Nether¬

the

of

"•

r'-

The

an

During the past six years, in
representing Mr. Roosevelt and

Spring Street.'

to

the

two terms.

Co.,

i

ber of the Netherlands delegation

office

tee

con¬

(Special

all

are
carrying on the high
principles laid down by Mr. Roos¬

con¬

of 7 Mr.

welcome

merce

&

rmtrntnemT^

Nether¬

Rotterdam

of

Fair man & Co. Adds

offi¬

Iongh was born in
cial of the Netherlands Depart¬
Dordrecht, the Netherlands, on
ment of Colonies and handled the
April 21, 1888. He studied law at
the University of Leyden and re¬ foreign assets of the Netherlands
East Indies.
;
,
.
ceived his Doctor's degree in May,
'1914. In June, 1914 he entered the 77 Mr. Crena de Iongh was a mem¬

F. Hutton

E.

XX.

the Government and went to Lon¬

Mr. Crena de

with

base

that

peace

stated

text

active

Chronicle)

ANGELES, CALIF.—Wen¬

623 South

D. Crena de

Netherlands,

LOS

essential

an

who

viously

joining Mr. Truman's Cabinet as
Secretary of Commerce. I know
the department well, as I was an

Street.

McEwen With E. F. Hutton

Was

founda¬

crave.

statement follows:

the

World Bank Treasurer Appointed
Crena de Iongh of Netherlands

and

The

Mason, Moran & Co., 135

La Salle

is

lasting

that he fully
foreign policy of
and
Secretary of
State Byrnes.~'7--■'

Mac-

added

It

Secretary

'

D.

William

been

sound

I fully support the foreign pol¬
icy of Mr. Truman and Mr. Byrnes

W. Averell Harriman

•

James

and

prosperity and happiness
and for our ability in

home

co-operation with other nations to

supported the
the President

Chronicle)

—

of

our

well, is

had been pre¬

pacity,
(Special

essential

as

States,

with which he

Two With Mason

Henry A. W&Uac*

United

a continuing
helpful hand to
people of the world.

department

a

the

offer

man's Cabinet

C.—

advisory
Carroll Reece

the
tion
at

join Mr. Tru¬

—

Service, Uni¬
versity of Wisconsin—$1.00.
W

in
ex¬

pleas¬

for

in

people and for export

opportunity to

Account¬

Bureau

Sep¬

on

pressed

Millspaugh—Brookings

Suggested Bank

;—

available for the needs of all

public state¬

tember

clinic

Institution, Washington, D.
cloth—$3.00.
;y;:/ Or■'

Secre¬

as

U. S. Ambas¬

ductivity

ment

of

Internationalism

as

a

Inc.,

Association

serving

was

Britain, issued

ure

Americans

President Truman

Henry A. Wallace

sador to GreatO

Commodity Exchanges and Free
Marketing—A survey by the In¬

Commodity Exchanges and Allied
Trades, Inc., 141 West Jackson
Boulevard, Chicago, 111.—paper.

'

to

successor

tary of Commerce, in London, where he

f statement that he rejoices.
On

appointed

he says

Administration's

Chairman Reece of

1547

' '■

7 7.

■V)

I

FINANCIAL: CHRONICLE

THE COMMERCIAL &

,1548

•.AOtfHF

VTOttAWlY#

:

■\ti

1/j

i')

Thursday, September 26, 1946

-the circum
if at all, on the

that estimates' under
4.

stances would err,

X

bearish side there is

question
highly

no

the estimates are

but that

discouraging to put it mildly.
Characteristically' not so much

given" to

more
made
by
some other managements, nor did
dia
the market pay attention to the
fact
that many railroads admit
that the outlook promises profit
publicity

J

'

'

'

.

•

.

.

..

held a
few months ago it is likely that the dire predictions of the various
railroad executives would have been pretty much, if not entirely,
.^disregarded.
There would have been a tendency to dismiss them
•as a natural over, stating of the needs of the carriers for increased
revenues with which to off-set the vast increase in costs with which
saddled in$

has been

jthe industry
tin

a

very

considerable

arisen

had

——

simistic have not visualized any
such figures as presented by the
general management as estimates for 1946
■*

1

r

o

r\A l-r

These estimates show a
operating deficit for 1946 be¬
fore Federal, income taxes, and a
given to management testimony
net loss of close to - $12,000,000
before the
interstate Commerce
after tax carryback credits and
.'Commission' was little short of
fixed charges.
Even if the entire
.catastrophic.-7'7"
v. I- "'7
rate increase requested is granted

the state of

as to
entire economy,

apprehension

ntar

vv

most

The

severe

the publicity

blow fell on

president of
and a vice-

Thursday -when, the
l^ew York Central

Pennsylvania

of

president

had

Cen¬
unfavorable earnings

That New York

-their say.

tral is in an

and 1947.

net

the

management estimated a

$18,652,000 for next year,

of

loss

net

indicating coverage of not much
than half of fixed charges.
On the basis of present rates the

management

estimated

and

Union

Ohio,

&

Northern Pacific

are

expect to
of any tax

also roads which do not

position has been recognized by
have
the advantage
railroad analysts for some operating loss of close to $41,000,000 and a net deficit, after carryback credits this year but
time.-v. However, the most pesearnings availablefor
fixed charges, of nearly $69,000,- estimate
their common stocks. These roads
ooo.
^
will
also
show earning
power

most

From

psychological point of

a

R.

Young,

conference

press

statement.'

Every

Chairman

that

a

the

Corporation,
:

economic

system

from

which

it

may never recover.

"The chief purpose of the ICC
as created by Congress is to main¬
tain rates
that will provide
a
sound

transportation system. *' In
they are flagrantly failing as
as flouting
the instructions
Congress.
If public opinion

this

well
of

continues
away

to let its servants get
with this kind of steward¬

ship,

predicated
upon
political
maneuvering, then we do not de¬

serve

to be free.

"This

statement is made with¬

out

Robert

R.

party partisanship since Re¬
publicans sit on these bureaus as

Young

impact of
testimony before the -Interstate
Commerce Commission to the ef¬

face the
showing in his¬

railroads

financial

'worst

Alleghany

;

the

fect

of

Sept. 20 in New York made the following

citi—

has'

zen

Board
on

\

Santa Fe, 'for direct Vor in¬
instance, estimated that without direct
finan¬
the,, benefit of any tax carryback cial
interest
credits it should be able to earn in the Amer¬
more than $11.50 a share this y'e5r:
ican railroads.
Even with no further increase in
Yesterday and
rates above those now prevailing
again
today
the management estimated some the market
net income next year. With the prices
for
full increase requested, a condi¬ their bonds
tion
under which' Pennsylvania nosedived in¬
estimated
a
sizable deficit, the to
new
low
Santa Fe management visualizes ground for
earnings of around $7.50 a share this new bear
on its common.
■ *
market under
Pacific

net

a

Robert
a

operations.

Chesapeake

more

Alleghany Corporation sees widespread railroad
bankruptcy if rates are not increased. Cites 50% rise in labor costs
and attacks ICC pessimism in reorganization plans.

" estimates

able

As the market was
nervous state, and there

Recent years.

was

favorable

........

,

railroad rate hearings been

stages of the

Had the final

Board Chairman of

well

as

V

Democrats.",

,

Answering reporters' questions,
Mr. Young said that in his
opin¬
ion the ICC would risk
bankrupt¬

tory' in 1947. • The reason for this ing the national economy to prove
bankrupt showing by the " rail¬ that it had been right in its pes¬
roads is that wages
and other simism of 1937, when it set up its
costs have been allowed to in¬ plans for reorganization of its sonext year on the basis of the re¬
crease
roughly 50% 7 while rate called bankrupt railroads.
He
quested
rate
increases.
Their
estimates
for
next
year
were increases have been held to a pit¬ further stated that it was ridicu¬
tance.
Anyone who has a life lous to have an agency guiding a
$13.75 for Union Pacific, $3.23 for
insurance policy or a savings bank major industry when it had no
Chesapeake & Ohio and $1.28 for
deposit-should be deeply . con¬ faith in that industry. • • • >7 7'""'7
Northern Pacific. Great Northern cerned in this financial fact.
;;
"The present situation is not the
estimated a satisfactory net in¬
"Every citizen, in addition to fault of organized labor,, The
come
for 1946 even without the his financial interest in the rail¬ railroad brotherhoods have sup¬
,

view the

Arden Farms

even

was

Common &

Preferred

Pennsylvania testimony
worse.
A road with an
record

unbroken

of

profitable

.

operations and dividends for 100
years
finds itself with a pros¬
pective 1946 deficit of $14,616,229
after a tax carryback credit of

Dictaphone Corpn,
Common

$19,000,000.
Moreover,
management estimated 'that
even with the entire freight rate
increase
requested there would
be a net deficit next year of $9,370,009.
As with New York Cen¬
tral the management visualizes a

roundly
the

Abitibi Power
&

Paper
1965

1st 5s,

deficit
the

operating

net

substantial

very

basis of
The full sig¬

next year on the

present rates.

is obvi¬
that in all
few roads,

nificance of these figures

Chicago Railways

ous

when it is realized

railroad

Cons. "A" 5s, 1927

and

history

very

then only the very

weakest,

single year.

Ernst&Co.
1

members

Exchange and other
and Commodity Exchs.

Stock

York

New

leading Security,

120 Broadway, New York
I*'-,
iii 7K«*V •
1/ 231, 5e»

5,N.Y.
"it-

LaSalle

Railroad Bonds and Stocks
•ri'jbfcji"'
roif&Ft Cvtov77

'V/vi'd

0

-j

t

v/art" 7"
5r

-

Members

61

SECURITIES
Selected Situations at all

Broadway

New

*

vtiv.,";

Commission reorganization

Bell

Times

Denver & Rio Grande Western

Street

Railroad Co.

STOCKS-»0NPS

St. Louis-San Francisco Railway Company

New York 4, N. Y.

When issued securities

GUARANTEED RAILROAD

25 Broad

!

Teletype—NY 1-310.

Telephone BOwling Green 9-6400
Teletype NY 1^1063

Complete arbitrage1 proposition on
When issued

V

'

;

Shreveport

con¬

stantly increase wages while

in¬

stantly

reducing

the

profits discounted

EST. 1696""-

120 BROADWAY, NEW YORK 5, N. Y.
/
Telephone REctor 2-7340 1

ficially imposed, upset the normal
system

of

economic

checks

of the Interstate

ner-dance

at

the

Park

crises,

at home

Mclaughlin, reuss & co.

Trading Markets in—

Members New

-

York Stock Exchange

LONG ISLAND AIRLINES
BOND

GETCHELL MINE, INC.
*T?

63

Wall

tU

Street, New York 5

BOwling Green 9-8120
I.

Boston

-

Tele. NY 1-724

•

Philadelphia

Hartford




BROKERAGE SERVICE

Specializing in Railroad Securities

V

Adams & Peck

UNITED PUBLIC UTILITIES
ONE WALL

STREET

NEW YORK 5

'I

L h. rothchild &
of Securities

Dealers,

TEL.

co.

Member, of National Association

Inc.

r.;»
52

wall

HAnover

street,

2-9072

are

impossible when restrictions, arti¬

and

Central

and. abroad, firm, employees and their friends.
A show, presented by professional
may
think that they are being
entertainers, was the highlight of
politically smart, but actually
the evening.'
they are striking blows at our
of

Common Stock

'

costs, rpf

goodsj but that "such things

Commission who have Hotel, Sept. 19. The dinner took
now forped the railroads to come
the place of the firm's usual an¬
to
them
with
predictions of
nual picnic and was attended by a
calamity at the very moment the
large number of members of the
market is tottering under a deluge

Ry.

!

possible

Commerce

Members New York Stock Exchange

Vicksburg,
& Pac.

.

free

enterprise system to

a

nual affair in the form of a din¬

'

"The members

| SUTRO BROS. & CO. i

•IL-

in

Commission

Street!

request

that it has always been

found this action by
to be without balances";.7"- -V."0. v.-"sound justification.
This arbi¬
r
trary action by the Commission is Hirsch & Co. Holds
all the more questionable because
Dinner Dance for Firm 777
the Commission itself in approv¬
Hirsch & Co., 25 Broad Street,
ing their sale to the public found
them to be in the public interest. New York City, members of the
And the Securities and Exchange
New York" Stock. Exchange and
Commission has been set up to
other exchanges, held their an¬
look for security frauds in Wall
the

New York 6

-

plans.

Congress has

York Stock Exchange

(Telephone—DIgby 4-4933

they

while

i

pflugfelder, bampton & rust

RAILROAD

were
20-years ago
everything else has nearly
doubled.,V." 7 .j.
n -"Not only
has the railroad se¬
curity, holder been;>held unjustly
to a beggarly return but over $2
billion of his securities are being
arbitrarily wiped out by present

than

,7 7&.U
"zsl
i i

Specialists in

k

safety.

$6.65. If the

credit expects to earn

in
Mr. Young1 stated unless public
Even granting ously the situation is not hopeless. already been selling at bankrupt opinion is mobilized
against this
levels. For years Washington has
of
government meddling
been starving the railroad investor force
may
in order to curry political favor. "the present bear market
Proof of this lies in the fact that well be the last gasp of the capi¬
talistic system."
He pointed out
freight rates today are no higher

sustained net operating losses
any

roads, is concerned in the national ported the rate increases.- This
The war has demonstrated present delay is the fault of bu¬
that
the adequate maintenance reaucratic obstinacy in Washing¬
rate
increases
are
granted the and technological advancement of ton."
There have been no rate in¬
road expects to show $6.67 a share the railroads is as essential to de¬
fense as the army and navy. Con¬ creases
during the time when
next year.
Other roads expecting
sequently, this situation in which other bureaucratsVhave granted
to show earnings on their common a dollar invested in a sound rail¬ three
general wage increases, Mr.
stocks both in
1946 and 1947, road property is not as good as a Young pointed out. The price of
dollar in the bank is as dangerous everything the railroads buy have
granting the rate increase, are
to our physical safety as it is to advanced
70%
since
the
last
Baltimore & Ohio, North Western,
future employment.
freight rate increase was granted
Southern
Railway,
Southern
7
"Before
the
recent panic
in in 1939, he added.
In reply to another question,
Pacific and Illinois Central. Obvi¬ railroad security prices they had
carryback credit and with the

tax

'

.

■
n.

Tele. NY

■

-v"h"

y. c.

5

1-1^93

HANQYER 2-1355
*"

Philadelphia

TELETYPE NY 1-2155
Telephone—Lombard 9008

•

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4528

164

i

We Axe in a
!■

;
' (Continued from page 1533) >
unusually long —the Dow-Jones
industrials selling at 20 times 1945
earnings and 18 times projected
1946 earnings, with excess profits
taxes
eliminated, raw, material
prices way outrunning finished
goods prices, the failure of volume
of transactions on the March-May

strength to equal those of Novem¬

ber-January, indicating declining
absorption power, coupled with a
stickiness in the heavy new fi¬
nancing of the first six months of

>

,

tendency

'Y

-i

to

In

Bear Market

a

in

are

a

bear

question.

no

give

recoveries

if

■

the 1 part

of

what

people

the difficulty is
likely to
eliminate
prudence..-Y" .'.YY*:!.
; I have for some time stated that,
looking long ahead, I can readily
see
in .this country a protracted
period of
sound reconstruction
prosperity. " To think,. however,
that, that would immediately fol¬
they

want,

that

it

but

is

low the end of the
to

to

me

In existing

has seemed

war

the height

be

conditions

of,folly.

have

we

no

To prepare the

—^particularly in any subsequent
period of enthusiasm. Y - '--Y'YY;,:Y-

)';

the faith that
to

was

so

prevalent up

month ago—by any such re¬

a

coveries, will again be making
bad mistake.

a

/

•

One of the fundamental causes
of
business
recession — business

readjustment—is the development
in a period of prosperity of mal¬
adjustments
between
individual
segments of the economy.
The

dominating
bear

of

cause

market

is

the

the

current

serious

mal¬

adjustment

between
individual
incomes and costs; The rapid ad¬
vance

The

in

prices is killing markets.
damage has already been

done.

It

is not

future—it

something in the

is. actual—and

tional wage
increases
few months will
this situation.

-addi¬

,

aggravate

\

/

One fact that many
people have

overlooked is that costs in enter¬

prise

generally

much and
take

are

volume

of

risen

have

;

so

rigid that it will

so

much

a

smaller

business

decline

than

in

in
the

period to markedly reduce
even eliminate
profit margins.

prewar

and

It

is

not

business

cepted
on

to have a
in the ac¬

necessary

depression,

that term and based

use of

standards,
to
raise
havoc with the earnings of indus¬
try. eBusiness is 75% above pre¬
prewar

war

So,

war

endings are attended by shortages.
Some of these are real, some are

only apparent. Most are in some
degree real and in some degree
apparent. All cause rising prices.
But they set in motion counter
forces
which unfortunately we
have

pretty consistent record of

a

minimizing.

'

/,

Many are overlooking the tre¬
mendous productive facilities built
up in the past five years. Regard¬
less of that, however, and purely
on the basis of shortages, it should
be remembered that there is a

tendency for short supplies to go
into hiding, so that total stocks
appear to be less than they are.
that

With

the

over

next

duction and distribution.

comes

over-estimation

evitable

niand.
Y

almost

an

Y

„

Y

/

of

in¬
de-

,

Actually, :;vthe Yline

between

surpluses/in most
goods in this country is not wide,
but
relatively narrow.
History
furnishes ample precedent for a
pattern of postwar shortages soon
succeeded by sufficient supplies,
if not over supplies.
'
;
shortages

and

Please remember that as far as
I

concerned these are things I

am

to

dislike

stock

stress

after

now

has

market

40%

lost

It is a great mistake,
opinion, to buy stocks in

the

of

a

advance "in J three
months.
They are* things that, I
have
been
stressing previously
four-year

in

no

values.

- It
is earnings, not
capital, that counts.

invested

Wartime Production Wastefulness

Continues

During the
vast

how

wastefully
that,
and

not.

or

As

quite

no

obtained—

was

result of

a

naturally,

the

has been

war

car¬

into peacetime produc¬
considerable degree. In¬

over

tion to

a

dividual

production,

it

wastefulness of
ried

had to have

war we

quantitative

productivity of workers,

Disregarding past attitudes, re¬
gardless of Whether one has been
bull or a bear, it is the
height of
danger to brush aside, from either

seems

a

a

business

or

standpoint,

the

stock market

To

it

me

stock

a

portents

market
of

the

collapse.
that those who

seems

would counsel

that it

otherwise, who say
impossible to find real

is

major

a

downswing in
stock prices,
responsibility
which careful men ought not to
are

business

'

^

....

which is

no

which in the

very

exceptional

to

seems

cases

phenome¬

has

been

developments,

that

me

a

past in all but

followed by certain
it

sign what¬

infallible, but when

have experienced

you

action

counsel prudence.

and

know, just

;

as

well

as

else, that people

as a

whole like

to hear pleasant

optimistic
in

a

—

anybody

things, like to be

except unfortunately

period of depression, when I

have found from experience
that,

strangely,

you

have to fight to get

optimism into them.
There

the

me

sen-

is to recognize such
probabilities—as they have ample
basis for recognition historically.
If you have not been prepared for
what happened in the stock mar¬
ket, at least be prepared for what
may happen inmusiness.
r

is,

-

therefore,,

You

of

both

and

men

declining,

risen

machines

production

have

them.

and

That is not

-

costs

prices

could

but

time

my

does

•

at

length,

not

permit.

that the principal
of living from now

say

rise in the cost

promises

on

this

J

"v

" *

discuss

Suffice is to

with

basis for pro¬

a

tracted prosperity.

M.I

per

be

to

in

processed,
goods.
The
main responsibility for the
rising

and

manufactured

cost
on




natural

a

minute.

Wars are in¬

evitably ■*'inflationary;
Yet., howj
hard it was to get people to oper¬
ate on that basis in the winter of
1941-42.

Now, with the war over,

inflation has

the headlines.

Yet,

the normal progressive and tech¬

nological force of

is defla¬

peace

tionary, not inflationary.
We
our

have

of

outstanding

monetary

persist,

an

important fundamental

many

marketwise.

All of this presents AN OPPORTUNITY FOR YOU TO

DO BUSINESS.
Here

.

is

time

have averted it

to

was

consumer

resistance is to in-

efficiency—to increase
ductivity; •
crease

pro¬

see

profits.

Make

also long-term profits.
Analyze present holdings
sales for tax purposes can be made to offset
Select other comparable situations that can be repurchased at
v.*.

current levels.
your

well

loss

some

Look at the

general. labor sit¬

uation,

consider the attitude of
individual .porkers and you can

with sales, and new purchases, by
customer, wherein both his position will have been benefited as
as your own.
Be careful though to make your switch into strong

situations: those which have demonstrated market action

considered

By this

at

all

don't

we

equally

consider¬

i

the residual in enterprise—
as

it

.

stocks

.

don't

go

they

up,

put

are

up.

they have to be manipulated in order for
.

in¬

margins of profit. By and

a

,

.

.

|

-

.

.

-;/YY: Y,',1 •« Y'Y .v
v
,Y
But to get back to selling this idea to your customers—here is

where

you

interview

-

-

.

will have to

important

use

...

if

the right

If you make your
telephone call to
eliminate the least hint of an

approach.
dignify it with

you

a

appointment
and if you
mind for what may have happened to some of
the securities you have sold to your customer as far as concerns their
decline in price
Y
you are on the right road. Don't for one minute

arrange an

apology in

.

.

.

your own

.

.

.

don't tell him

.

,

do not make the market, or that old wheeze, "if I had a crystal
ball I wouldn't be in Wall Street." Don't evade and don't equivocate;

you

The

country is moving in

dan¬

a

gerous rather than a sound trend

Commodity prices are in a vulner¬
position. Y In price control
politics has been substituted for

have

more

assets for themselves?

ter, and the
will be

we

more

can

We are helping them to live bet¬
accomplish along these lines the greater

rewards both in bull and bear markets.---

our own

able

economics.

Y

/Y

v

Although the purchasing power
of the factory r worker and the
firmer; has

open, raised

the

to

crease

ing

has forced

higher,

union

the cost of liv¬

remembering: that
amount
to
only

workers'

about one-fifth' of those gainfully

whole.

economy as a

i Actually, the rise in the cost of
living may, by the end of this
year, exhaust the savings of those
in the lowest 60% of the

[Many
the

American
balance

of

Shipments 6% #
Below Output in Sept. 14

YY;":

YYY

Unfilled

YYY1

1

order files of the

421

i Lumber shipments of 421 mills

mills reporting amounted to 64%
Sept. 14 fell of stocks, -i i'.-Y':Y Y'-YHY\' Y*Yi
•For the year to Sept. 14, ship¬
6.0%-below production and ne\y;
orders dropped 7.0%, the
National; ments of reporting identical mills
Lumber
Manufacturers Associa*- exceeded production by 1.8%, and
tion reported on Sept. 2L In the orders by 0.3%; - - Y.u*. Y
■
preceding
week,
lumber ship¬
Compared to the average corre^
ments of 408 mills were 2.9% bel¬ sponding week of 1935-1939, out¬
low
output,
while new orders put of reporting mills was 6.9%
showed a decline of 5.7%. For the above; / shipments,
were
6.6%
week ended Aug. 31, shipments above;
and orders
were
1.0%
of 401 mills were
14.4% below above. YY;Y' YiY AYYYY Y I'
for the week

ended

Denman Tire & Rubber

year

anc

Company

5% Cum. Conv. Pfd. Stock

corporations
this

below.

spending

With the majority of peo¬
ple
expecting* price
advances
many have already anticipated the
trench,.with forward buying.
group.

for

production, and hew orders 15.6%

Lumber

•«*

•

Common Stock

Y~

.revenues in excess of anything
seen before the war.- But, under

continued

regulation

and

-

...

,.

Prospectus

I

con¬

on request

U 'i

-

v

;

-

"Y YYI

Y Y/Y

.

tinued labor-government domina¬

tion; the overall profits from this
business

in

will

Herrick,Waddell & Co., Inc.
"

■

my

opinion

be

below expectations that have been

prevalent, at least

up

1

*'

r.

,

55 LIBERTY STREET. NEW YORK

,yr y

5. N.

V.

to the past

few weeks.
;

We

in

are

artificial

a

props

segments of

lush period,

with
supporting many
An ab¬
and fragile price

our economy.

high

American

Fruit

Fullerton

New Vercoe Partner
John L.
the

Stock

Exchange

Exchange,

member

firm

Vercoe & Co., on
make

his

Oct. 1.

headquarters

-

-

—

♦ -

-

Members Lo» Angeles Stock Exchange
€26 SO. SPRING ST.
»

*

>

y

TRINITY S761 j

LOS ANGELES 14

~

.

> —

t

•-

r

Teletype: LA 68

the

firm's New York office at 1 Wall

Street;-

Com.

Oil Co., Com.

WagensellerS Durst,Iita

of

He will
at

Inc., Com.

.

Newburger, member of
York

New

Growers

Arden Farms Co., Pfd. 8C

structure has been created.

,

stocks—-only'~

times
mean

stock

Inflation,^ rising prices; is bull¬
"

com¬

me

the

creases

that

favorably with the security which is being sold. This is very
important, otherwise your customer may some day take you to task
in the event that the
security he sold has a sharp rally and the one
you suggested lags behind, Market sponsorship is still a factor to be
pares

you don't have to do this. Remember it is hot whether you are richer
ON PAPER one month, and poorer ON PAPER the next that is imfjust as well as I can tell
you
what the prospects are of portant, but it is important where you are going to be over the
that, without a;period of consid¬ longer term that matters; That is all you have to say. It is the truth,
isn't it?
Think it over for yourself.
What are we selling in this
erable readjustment;
business besides pieces of paper that fluctuate from day to day?
Are
we not selling
preservation of surplus assets, and the creation of
J „
Conclusion
Yj Broadly then, the current gen¬ larger assets, so that people can have more security and LIVE BET¬
TER?
What are we doing; when we present a plan such as this
eral business and economic situa¬
where we are helping people to pay LESS TAXES, so that they will
tion is distorted and vulnerable.

tell

it has largely ceased.

on

,

This provides you

will be admitted to partnership in

ish

its foundation, placing

as

Check up every account that you have
note of the short-term profits taken this year

a

allow your customer to put you on the defensive.

*

ation is that, with the war's
end,

•

approach which has

the customer's welfare first.
in your office.

THEMSELVES.'

goods falls
wage ad¬
decreased efficiency.

winter, when excessive wage
increases were put into effect. The
way to stop it now and to elim¬

inate

sound

a

manufactured
and

last

tremendously. While naturally the
effects of that

are

with

rise in price to take place.
SOMEONE MUST BE INTERESTED
IN SEEING TO IT THAT OTHERS BUY.
STOCKS DON'T SELL

normally

increased

course

bewildered.

Some are completely at a loss, to know what to
of their holdings, especially those which have beeh
acquired lately, such as the new issues that have flopped so badly
ers

do

combination of

of

the

vances

The

V

point. What do we see today? After four and
a half years of
advancing prices, a decline has cancelled out about
40% of this rise during the past three months. Many of your custom¬

if

put

idea will create business.

an

in

case

them

into 1947, should experience gross

hear

also

willprobably

a

«

considerable about inflation. Let's

common

a

Not Inflation Ahead?

Deflation

honest counsel to action can
only

I

'

inevitable.

look at it

■,Now, I fully, r.ecognize that:in

non

readjustment

sible: thing

a

economics there is
ever

A

At least it seems to

or

assuming

assume.
;

at the

be sustained

level.

.

basis for
either

cannot

ment

present

Here is

and

employed, with resultant dimin¬
ished purchasing power for the

Y:YY:> Y'Y'-

it will provide for your

and list

With the out¬

develop. I Under 'such ? conditions
goods cannot move and employ¬

YYY'YCollapse

are

plan of action that is based primarily upon the beneficial effect that
customer, you are on the right track. Prop¬

a

ages, has declined.

•

The Portents of Stock Market

the most valuable stimulants of business—but
your ideas must be based upon a sound foundation. If you can devise

measured by industry-wide aver¬

highest levels in history; their
gains are illusory for; reach in¬

i

Creative ideas

erly presented such

normals. A decline to 25% and they are things that I want
above would still be
prosperity, you to bear ip mind in subsequent
so-called, but what it might'do to
periods of stock market recovery.
profit margins is another story.
Broadly, looking ahead, it is my
That is a point which in
my opin¬
opinion that .under rising prices
ion is being grossly neglected. Y •"
we
will see consumer resistance
.

By JOHN DUTTON

my

boom

a

the basis of increased replace¬

on

ment

unit

Shortages Exaggerated

spread optimism;-Y:Y YYYv, ,'YY
You will hear much probably
YY In my opinion, however, any
about shortages. War disrupts and
one who will allow himself to be
lured into a renewed faith in a interrupts the processes of pro¬

protracted period of prosperity—

large, current inflation is doing
such thing.

matter;

groundwork for a reconstruction
prosperity, we have got to go
through a period of readjustment.
What I am giving you, then, is by

result in renewed wide¬

Securities Salesman's Corner

I

tiff

i

"following

precipitate
declines— recoveries
perhaps sufficient to restore cour¬
age and

'

•

preclude]110 means a "gospel of despair
but rather a counsel for prudence

That, however, does not
substantial

Of

market.

that I think there is

■

on

even

,.,

counselors

■

sound basis for it.

the year.

We

i*

1549

—

QvoUflo* Mid laionnatlo* oa alt Califomla UcmHlm

"Y"/

.

-

1550

(THE COMMERCIAL & FINANCIAL CHRONICLE

.

in

leaders

They're Saying—*

Selected Investments Co.—(President Edward P. Rubin)
"Time has proved that active business,
rising earnings and in¬
creasing dividends do not necessarily produce rising stock prices.
From 1939 to 1942 we had excellent
business, very good earnings and

dividends.

Yet

stock

prices declined drastically. Just as war and
tax fears were the real answers to stock prices in that
period, it is
conceivable that an unhealthy in-®——1 .'
1
ternational
of
the
old
favorites
are
situation,
combined
with

bad

domestic

labor

leader¬

ship and fears for the permanence
of the boom, could be the real
answers

"On

now.

the

downward
the

,

.

■

.

other hand,

violent

intermediate

trend

in

conclu¬

tentative

are

They,

may be modified as
develop. But for the
being we believe they are

facts

new

,

a

through, for this cycle.
"These
sions.

time

conclusions of sufficient merit to

market

does. not necessarily be the basis for investment ac¬
major business depres¬ tion."
;
sion or even a protracted further
Wellington
Fund — (President
decline
in
stock
prices.
There
Walter L. Morgan)
have
.
been
previous
occasions .'■"i
forecast

a

.

.

when
YOUR INVESTMENT DEALER OR

Distributors Group, Incorporated

Wall Street

•

.

such

stock

market

breaks

have

stopped far short of any¬
thing which could properly be re¬
garded as a bean market.
.

"We don't want

New York 5, N. Y.

our

thinking to

be dominated exclusively by what

| "We do not know whether the
market may go still lower before

strength

reappears or

pendent

investment

with whom

with

are

we

not.

Inde¬

authorities

have contact, state

firmly that there is

basis for

no

time,

have we
things

.

"Whether

worries.

are

"Yet

we

must, be.careful not to

disregard either.
important.

They

are
•

both

„

"Weighing one thing against an¬
other, we believe the following
are

the probabilities:

1. It is

ognize that the current markets
thin

but

their

best

analysis

leads them to the conclusion that

major trends

still

are

the

on

con¬

structive side and that good tim¬

ing

of

purchases

the

over

near

term will later result in profits."

George Putnam Fund— (Trustees

unlikely that this

mar¬

■

s

ket decline' will be accompa¬

Putnam, Werly and Osborn)

'

nied or

followed by a serious
prolonged depression in

and

business.
2. There

risks
..

Prospectus upon request from
your investment dealer or

or

are
on

still definite price

the down-side, now

in the intermediate future.

3. Pronounced

extended

and

rallies, from present or some¬
what lower levels, are prob¬
able.
Election hopes, good
third quarter earnings, rising
fourth quarter dividends,
might be the reasons.
4. Enough damage has been

national securities &

research corporation
120 BROADWAY
New York 5, N. Y.

done

to

investor

confidence

to indicate that considerable

time must elapse before the

I

stock

market

again

resumes

,an upward trend.
.-.S:
5. Once a sustained new upward

';;
i

trend is

|

initiated, the market
will have new leaders. Many

"The fact of the matter is that
the American people are aggres¬
sive and temperamental. As a na¬
tion

we

chances.

work

The

hard
result

and

of

take

this

is

been

us

Most of them have been
for

even

long time—perhaps

a

worrisome

more

form

than at present. But mass senti¬
ment has its own laws of motion.

It will ignore bad news during a
long period of optimism, and then
optimism will tire. Pessimism will
ignore good news—and then ulti¬
mately tire too.
.
.
"In perspective —r as predicted
long ago—our economy is moving,
necessarily, toward a permanently
higher level of prices and wages.
This is inescapable. It is not, in
itself,
unfavorable to invested
capital.
The process is highly
complex. It is impossbile for it
.

to proceed smoothly for there will
alternating periods of great op¬
timism and equally great despair. alivays be temporary dislocation
in parts of the economy and occa¬
After winning the greatest war in
sionally a severe and general set¬
history it was only to be ex¬
back^
>"? V.;
pected that the relief in getting it
"We
have
just witnessed
a
over with should generate optim¬
psychological set - back,
ism. - The only wonder is that it general
has taken so long for the other nothing more. It is not a turn in
underlying, trend. Because it is
side of the picture to show itself,
psychological its duration is not
i "It is easy enough to blame the
predictable, for it does not tie in
Russians and their attitude toward
to any measurable economic facts.
Peace Treaties for our troubles,
Un'settlement in the stock market
or

if

one

is

concerned

more

over

domestic picture to say that
the bureaucrats in Washington do

bur

prevailfor some weeks, or
suddenly give way to re¬
newed optimism.
; "All that can safely be forecast
is
that
our
greatest period of
prosperity is ahead, not behind
us.
The 'pipelines' (inventories of
manufacturers,
wholesalers, re¬
tailers) are not yet filled, the ac¬
may

may

.

not

understand

the

businessman.

the

problems of

Perhaps

labor

,

cumulated demands of consumers
not

begun

goods

be

met.

have

Capital

been

be¬

by strikes of their own,

strikes of

They

to

industries

deviled

are

suppliers, shortages, etc.

only now approaching

the

INCORPORATED

HUGHW. LONG & CO.
New York

iNCO«*O»AY£0

48 WALL
,

0'

.'.N-r.iif

STREET,

Chicago

Los

Angeles

point of sustained operation

at

Lord, Abbett & Co.

Corp.

j"Regardless
definition

decline

the

of

of

or

the

technical

recent

market

what caused it, the fact

remains that it

all the gains

erases

of 1946 and

part of those made in
1945. Today's prices call for a re¬
appraisal of clients' accounts and

give the investment dealer an op¬

portunity to provide the type of
professional guidance which will
satisfied customers." \

mean more

Fund

Delaware

Moreau

"One

— (President
Barringer)

can

find

as

for

the.

many, causes

week

decline

violent

as

high level. Only'as that point

a

is reached will maximum earnings
be

possible,

many

cases

which

earnings

in

should^justify much

successful flotation of new issues

depends part of the capital expan¬
sion which is required to build the
present business boom up toward
an orthodox climax.
It is only the

finance

important

plant renova¬

tions and additions out of existing

cash. The large maj ority
to

depend

will have

on new money

from the

public, and if the new money is
not

forthcoming, there will be an

important lack of industrial ex¬

pansion and employment."
Institutional Shares

,

(President

—

Emlen S. Hare)

;

1937.
that

writers

financial

"Some

likened

this

reaction

to

In this we do. not agree,

with

the

public,

unlike

today,

curtailing its spending at the same
moment that

optimistically

manufacturers were

expanding

inven¬

tories and output. We suspect that
the extent of this decline has been

very much ma gnified as a result
of the 100% margin and other re¬
strictive

legislation,

government

which, while intended to stabilize

markets, hasinstead resulted in
"thin"

the result

markets, with

tiiat

.intermediate market declines/

and

appreciations will undoubted-,

ly be far-more sizable than prior
to these restrictions.
we

are

correct

in

If,1 however,
our

analysis

that the basic long-term trend of
stock

prices continues to be up¬

ward, exaggerated moves
ups

long-term trend."

from

pour

local investment dealer or-

your

The

may

be obtained from

local investment dealer,

or

Keystone Company

of Boston
50

Congress Street, Boston ?, Mass.




,

request from Principal Underwriter

INVESTORS SYNDICATE
Prospectus

THE

PARKER

CORPORATION

ONE COURT STREET. BOSTON 8, MASS.

R. E.
.

on

the

and downs will not alter this

INVESTORS STOCK FUND, INC.

be obtained

;

banking figures showed clearly a!

INVESTORS SELECT! VEFtlND, INC.

map

in'

disintegration of basic conditions, j

INVESTORS MUTUALINC.

Prospectus

of

prior to the 1937 reaction the

SHARES OF CAPITAL STOCK OF

on

have

that

CHICAGO

Prospectuses

A-'•/

-SSI/

exceptional corporation which can

NEW YORK S. N Y.

.

D.

.

trend.

rec¬

.

.

have

we

stocks."

common

National Securities & Research

of last,
people to voice opinions.1
Whatever the cause is, some of
the results may be susceptible of
definition. The new issue market,
which had shown signs of serious
Distributors Group — (Investment
glut for quite a while, has been
T
Research Department)
effectively stopped by this de¬
"The
worries
which
caused cline, and can only be revived
owners of common stocks to sell by the offer of definitely higher
in such volume as to bring aver¬ returns on new securities, or an
age prices about 20% below their unexpected and radical reversal
peaks for the year are not new of the market trend. Upon the

in

They

what

through this summer has com¬
pleted the downward swing or
whether it is merely one step in a
longer chain is a question that
cannot be answered today. How¬
ever, with so much business to be
done in the next few months, it
seems probable
that the market
may already be tending to overdo
its pessimism."

with

1937.

or

At the same
not always had
to worry about?

present day situation found .id the
up and down temperament of the
people of this country?
:

those of 1929

good business out¬

a

today.

And is not the real answer to the

thinking conditions today parallel

to be

us

similar

look, nor should it be dominated
by a mechanical theory of price

seems

higher than present market prices
for

paid only for what they

produce. There is no doubt that
these various" depressing situations

What

.

to get
their

for

•

be

can

RED CROSS!

•A PROSPECTUS ON REQUEST FROM

anxiety

their share

union members also fail to appre¬
ciate that in the long run people

Support the

STFFI
j a ljljmj

their

than

more

Thursday, September 26, 1946!

Macgregor, President

Minneapolis, Minnesota

REPRESENTATIVES IN THE PRINCIPAL CITIES

OF THE UNITED STATES

.i-i.-'v.:.,

THE COMMERCIAL & FINANCIAL'

Volume 164 " Number 4528

CHRONICLE!
til

Inflation with Jerks
The

.(Continued from first page) .
;
annually, and an all-time record
of almost $20 billions is

the

city

technical

con-

I

debacle in
the midst of inflation is a para" dox.
The early years of World
•
War II offer the nearest analogy,

j

'•" .While the foundations

i

considered

bound to pass with
So were price reg¬
ulations and other unpleasant in¬

4

as

the transition.

of the presbeing
laid, in 1940-42, and prices took
their first upward spurt, stocks
were dragging along the bottom.

-

But

terferences.?;
■

The

YY';-<V'

■>

and

strikes

of

recurrence

Y

■

strike

threats, under obvious pro¬
tection from above, renewed OPA
and ICC interventions of an un¬

Of course, it was a period of rap-

stabilized

then

the

in¬

as

monetiza¬

tion of the debt cannot be halted.
This

has

been

aptly called "the
tragedy of the answered prayer." 2

even

or

being

The dilemma of the

insoluble:

if

appreciably, the optimism; it was bond-price

ent currency inflation were

*

pro¬

needs, and would do
as at
falling prices. The
first strike wave did not dampen
stable

boom in housing.
A security market

*

would

at higher wages as well

so

"

v

know-how

vide for all

struction prospect for 1947, an in¬
stalment on the long-run planned
;

country's magnificent capa¬ stead of
to produce and its brilliant tended.

Managers is
keep up the

they

guarantee,

the

rates

will decline further and promote

inflation;

more

if

they relax it;

the rates rise and the bond market

is bound to collapse, necessitating

support by further money-print¬
ing. The choice of the lesser evil
should not be doubtful.

But the

idly increasing taxation and regi-

economic

mentation, while taxes have been
reduced this year, and wartime
regimentations relaxed.
/

decline of labor productivity, etc.,
could not fail to disappoint the

" that,,, an
experimentalminded bureaucracy might try the
impossible — a new bond price
stabilization below par — short¬

optimists.
Under inflation, in¬
stead of being overcome by pro¬

bondholders'

*

!

,■.*

I

The unorthodox character of the

V

current

decline

market

is

nature,

duction,

shown

by the simultaneous weakness of
bonds (as in the first months after

shortages

and

more

writer

.

ernment

bonds

the

as

(in "The Elu¬

sive Dream of Full

I

;
>

<

.

r

-

break
visible

disturbance

the

of

;t structure.

!; •' '
y'-<; '•

without

before

occur

trouble, which is essentially a
consequence
of the monetary
inflation, too. 'Swollen pocketbooks, due to the wartime in¬
flation, strengthen the self-con¬
fidence, bargaining power,' and
fighting will of the working

•:

more

of

accumulation of pent-

demand backed by ability to
pay
(another consequence, of

up

"

inflation)

The sequel to the boom is depression—but this time not of the
kind of automatic sequel we have

■m

so

the vast

.

credit
*

the unions.
The
since labor is aware of

and

men

any

'

important indirect
"shortages" is labor

of

source

Y*
-

Production"):

most

The

break is accompanied, or rather
preceded, by a decline of real estate values and of basic raw material prices—both of which are
moving now. in the opposite di¬
rection.
No depression has ever
broken out under cheap money
conditions as
are
prevailing at
present, nor did a similar market

*

to

and
its

insure

naturally

own

wants

share

in the

pie. The distortion of "relative"
wages—disproportionate rise in
one
category " as against the
other—adds to the smoldering

1

known under the rule of the gold
standard.
The sequel has to be

brought about by man-made de¬

J5

dissatisfaction and sharpens the

flation.

■

class-consciousness. All of which

Normally,

leads to industrial strife/ fanned

the

boom: breaks
when the stoppage of gold im¬
ports, or the onset of gold exports,

;•

spells

,

1

.

and

>

actually forces credit restric¬

tions.

by irresponsible political fac¬
tors, which in turn reduces pro^
duction and"'causes more shofct-

end to credit expansion

an

No

such

automatic

ages.

..

*

com-

pulsion operates at present. Under the gold standard, prices cannot rise beyond narrow confines

-

.

■

because

r

severe

repercussions,
tightening monetary

the

"

ing

power.

months

^

with

"

of prices so that both

ry -;
;

will
or

the Yl next

few

inhibit

not

more

slowdowns to follow

progressively lower purchasing power of his wage dollar, will be quick to realize that
he is not getting what he really
bargained for.
Labor will not
be satisfied with any fixed wage
as long as price inflation con¬
tinues, even at a slow pace.

,

-;

-

because the working man, faced

Y':f| system, on the other hand, is Vir<f
tually divorced from limitations
Y ..Y set by gold reserves; the increase
of mass incomes parallels the rise

probability that
contracts will be

Y negotiated; in

Our "managed" money

waves" of

more

The

wage

strikes

to stop

further inflationary credit
expansion—could be accomplished
only at the price of wrecking
prosperity.
-They have all the
powers to determine the quantity
and direction of the credit flow;
but

cannot

the

use

effec¬

powers

tively without causing
sion.

a

'

depres¬
;

'

Certain
drastic

it

as

that

seems

curbing

of

no

commercial

loans is in the

offing at this junc¬
ture (to say nothing of curbing
the government-sponsored mort-f
gage loans), experiments in "quali
itative"
control may ; be under¬

taken; as ind
re-introduction of mild checks
credit.

consumer

But,;; if

on

for

way, abortive experiments with
somewhat more drastic restric¬
tions

might

;

>

occur.

v'

i,„

J"

;

.

War?

the

a

is

should

be

also

C

'

>

result

would

factor.

a

"bullish,"

both

A

war

destroying

there is

side to the pic¬

reverse

a

The

inflationary
effects,
coming on top of the previous,
would be so devastating as to jus¬
tify
rigid regimentations,
high
taxes," and even capital levies.
v

However there is

danger of
armed clash with Russia, not

an

Y;Y

; V ""
Y';Y
"

no

can proceed
in the near future. For one thing,
indefinitely — until an artificial
the Soviets are likely to give way
deflation stops both. That is bound
rather than to fight a war that
to come some day, but the day is
could only end with disaster to
still distant.
In the meantime,
Now, it has become evident that them.
For another, the Angloshort-term profit expectations
inflation and labor trouble go to¬ Saxon nations lack the moral en¬
which govern the stock market,
gether.
Costs keep rising, with thusiasm for action, the insight in¬
depend on more than "supply and
new wage-raises a certainty. Will
to the necessity of a showdown in
demand."
Postwar economic polpublic opinion permit promptly their own interest, and the deter¬
icies, internal and external, are
equivalent price increases? If not; mined leadership to force a just
still in the makeshift stage. They
strifes must result, which may. be and
lasting peace down the Soviet
are sheer adaptations to political
temporary in each case, but their throat--at the (probably non-ex¬
pressures and other circumstances;
"The

mixture

of

ideological ex¬
practical
incom;petence has sharpened rather than
solved the overhanging problems]
until at last showdowns- become
uberance

:

and

unavoidable:

The

;

of
un-

v

certainty about these forthcoming
showdowns on basic policies.
:

*

-f ' Showdowns
'

are

forced

on

the

evasive politicians on four, closely
interrelated scores, each of fata

"

*

significance:

(1)

How

handle

to

'

the wage-price

muddle;; (2) Wha

expansion Y;(secondary inflation)
Y (3) How to "manage!' the nationa
its

The Wage-Price Showdown

:

American

business

and

in

an

new postwar
atmosphere of bubbling

thusiasm.
-

-

-

*

The unprecedented

j

era

en¬
cor-

porate liquidity and pent-up demand, the vast consumer buying
power

and

the

construction

equally vast

need

of

the

the

on

the reaf estate

propensity for retrenchmentf
"Tragedy
■

-.

of the Answered

The artificial stiffening of com j
mercial short-term interest
rate|
since

may

February would, not have
the', immunized govern-*
bond market1 had it < nof
.

double-talk

guarantees

to

an

and

subsidies,

ultra-bullish




added

outlook.

that

by; off

the

be raised further.

In

rates

reality!

the debt management is caught ort
the horns
of
a
dilemma: " The

Cheap .Money

succeeded

policy

too well: "Guaranteed bond prices
remove the risk of
price de^

...

clines in long-term securities, and
long-term rates tend to fall," inlThe
out

re-

outer

world, plus fantastic governmental
up

j

y;PrayerV;t;.-;Y Y Y ::.; j

that

mercial
serve

Secretary of the Treasury pointed
the firming of short-term com
rates—brought

Board's

action

"

I

mar-j

Additional shocks enhance

been for the fear generated'

inves-

tors entered the
*

effect

ket).

ficial

monetization:

(4) How to deal with Russia.
•''
V"
' Y
■
-" Y.
1

That
prime reason for the shock

which stock quotations registered
(and which had naturally little or

ment.

'

avoid

is the

affected

,Y to do about the incumbent credi

debt—to

disturbs profit expec¬

tations and compels caution.

no

insecurity

capital valuations reflects the

.

.

recurrence

about

in

the

rediscount—is

any

"real repercussions"

policy.
1946.)

("Wall

■

Street

not

by

effectively

Re¬

raising
to

have

Federal

As

•

a

a

Journal,"

July

18,

markets, according to the
prospect of "political" interfer¬
ence with profits.
At some

point,

consolidating her
the occupied coun-j
tries,
possibly
against
Russian
"concessions" at the Dardanelles1

of the next quarter's

all

over

crowd

to

international

than the far more exposed Royal
Exchange, Paris Bourse and Am¬

earnings re¬
The fear of a permanent
depreciation
of
the
currency's
purchasing power, which is preva¬
and Trieste, in which area she had
lent in Europe, has not permeated
no
business at all, and probably as
yet the capitalistic thinking of
never
expected to get anything. this nation.
That is why Wall
The damage done by the Wallace Street is
so much more "sensitive"
encouragement

unity,, the;

Russian

of

ports.

im-;

dark

a

sterdam markets

chapter in American foreign pol¬
icy.

Ultimately,

Profitless Inflation?

sumably
of

Discounting war fears as alton
gether premature, there remains
the fundamental fact that

inflation

aged

gated

a

are.

painful stabiliza¬

much

on

higher

levels

commodity

and equity prices
than the present ones, and at re¬
duced real incomes for broad sec¬

man-;

tors, if not for everyone. That is
profits, especially the unavoidable sobering-up after
Administration
influ-f an inflation orgy.
:
; ;

an

not

unmitin

an

of

source

under

is

a

tion will have to be accepted, pre¬

enced

by anti-capitalistic pressure
groups, and in view of the forth¬
coming expiration of E. P. T. re¬
funds.

For

Crude Oil Production

while, at any rate,'
full employment and rising prices
may proceed at declining or low
a

net

returns to shareholders.

for

a

while

Off in
The

But

only.

oil production for the week ended

the

4,733,250 barrel^,
4,799.950 barrels
per
day in the preceding week
and 4,833,450 barrels per day in
the week ended Aug. 31, accord¬
ing to the American Petroleum

Already, the
capital market
the flow of capital into

weakness
reduces

of

Sept.

essential to the upkeep
expansion of the productive
apparatus. < Unless profit chances
are restored,
employment and out4
put will slump, and a political re¬
and

chances

trols will

tioris,

if

It did

elec^

before.3
With
system untouched by

credit

not

'

Gasoline

production, the Insti¬
amounted to 14,796,000
barrels
during
the
week
ended Sept. 14, 1496, a decline of
467,000 barrels from the precedr
ing week, while gasoline stocks

the

tute

the
slump on thq security markets,
mild
doses "*sof
favorable
news
might - suffice to carry stocks to
new highs.
<

Reports received by the Insti¬
from refining companies in¬

-

,

tuate in

states,

declined 93,000 barrels during the
week to 86,818,000 barrels.

New Kind of Cycle

But, y we
may •. expect
sharp
cycles within the inflation period
itself, especially so in terms of
equity valuations. They may fluc¬

with

Sept. 15, last year, average daily
production was 4,537,900 barrels.

con¬

be lifted after the

was

Institute. During the week ended

already;

that many

are

14

compared

ventures

and

Sept. 14 Week

daily average gross crude

tute

dicate
whole

that

the
to

ran

Mine

of

industry

stills

on

a

approximately 4,892,000 barrels of crude oil daily,
as
against 4,881,000 barrels per

body economic by shortages, class

day the week before.

an

unprecedented fashionj

new

and

other

tensions.

>

Stocks

A

kind of cyclical fluctuations

is what

are

we

against,

up

as

in the
barrels

in

stocks
3
on

14 week

to

by 671,000

20,032,000

distillate

of

;
increased

keroesene

fuel

barrels,
was

Including lowering margin requirements
brokers'

that

for

of

Sept.

the

the

usual

loans.

100%

slump,

in

exhibition

matters,

coming

well-informed

The

widespread

requirement is
part
of
as

at least,

naivete

responsible
is an un¬

in

economic

rels

oil

.

;

.

;

and

stocks

jumped

it does from otherwise

sources.

of

residual

950,000

barrels

55,736,000 barrels.

tinuing to appease the Soviets.
Stuttgart speech of Byrnes
means
merely that we shall re¬
construct the Allied zones of Ger¬
and also—as General Clark

announced since—in Austria. That

is

our.

inimitable way to save Eu-.

(bolstering,

boom).'What
reconstruction of- Central Eu-;
rope,, including i* Italy, means cart

incidentally;

our own

the

only

understood

be

if

one

real¬

that she must be re-equipped
from abroad with at least $10 bil4
lions worth" of equipment and in¬
ventories.: In the meantime, her
population of 100 millions must
be fed, clothed and housed, at an
izes

additional annual

billions.,
As to

cost

of

INVESTMENT

several

;

.

Wallace's stab in Byrnes'

Other

between

left

and

right in the
a showdown

—

that is likely to be postponed un¬
2

By

C.

C.

Abbott,

Management
Federal Debt, 1946, pp. 52-53.

of

the

Exchange and

Leading Exchanges

UNDERWRITERS AND

Wallace's bid~for the Presidency),
it means more than a showndown
Democratic Party

BANKERS

Members New York Stock

back, originally meant for purely
internal
consumption
(implying

DISTRIBUTORS OF

INVESTMENT SECURITIES
1'

BROKERS OF BONDS, STOCKS, COMMODITIES
Private Wires

•

up

1,483,000 barrels to 56,204,000 bar¬

theory

conflagration.

rope.from bolshevism

a

while the unrelenting inflationary
will continue to shake the

fever

The

many;

as

Bureau

basis

matter of fact, we are con¬

fiscal

expected
on

the

istent) risk of

lative

Russia

to

conflicts
;

.

;

sent

it

bol-

shevism abroad and at home. But
ture.

all major inflations.
They con¬
sist of violent gyrations in
specu¬

a

power

the

on

because

and

in

has

.

war?'with

fear'of

side

financial

It

they will be further sharpened by
the vagaries of capital flight: if
in the country. The Wallace-Pep¬ and when the
public awakens to
per attack against him will rally the
conviction
that
the
price
his critics with his followers, and structure had been
inflated for
permit him to proceed with ap-; good, with no chance left for k."
peasement by blaming it on the return to anywhere near the
preleft wing at home. The net result inflation
levels.
So far, our se¬
will be, anyhow, the de facto
con-j curity markets still think in terms

action will set in.

a

while Mr. Eccles should have his

Russia

by

strikes.
new

Here,

.

strikes will, be

of

wave

followed

base limits the available purchas-

..

that

too, the Managers are faced with
the dire fact that their objective—

Lastly,

;

The

"

without most

consideration

the threat of credit control.

.

v

Credit Control
third

election.

perialism, etc., constitute

grow
A

the

deeper political meaning, so much
so that one might
suspect that it
bad been pre-arranged.
The fact
Is
that
Byrnes'
tough-speaking
and soft-acting appeasement
pol¬
icy arouses increasing opposition

frightens the prudent investor is

investment (except in an acute
1 panic, in which banks fail). Nor* mally, morever, a stock market

,

adds to the

jitters.

nancial Chronicle"

safe

one

it would be,

as

As this

pointed out in Jan. 31, 1946,

.

;

must

intensive.

more

lived

issue of the "Commercial and Fi¬

;Y.;V-: Pearl Harbor).
If people expect
a depression, they turn to gov-

.

progressive

a

worry

after

1551

Home Office: Atlanta

•

Phone LD-159

fuel

to
v

THE COMMERCIAL & FINANCIAL

1552

,

CHRONICLE

has

Retail Outlook

on
Revolutionary
(Continued from page 1531)
independent drug stores have words: 3
allso grown faster ' than
During a
sales of

War

in

these

of

chain

52,200 drug stores

were

as

of

September 1939, but the total
declined during the war period
and

the

Dec.

estimated

31, 1945

number

SO^OO.1

was

of

as

loss.^

to

.About

the

restore

Many

wartime

them

the

will

normal

be

best pre-war record.

well

usual; there were the
rich, ready to spend, as

>

the

as

new

and

poor

a new

of debtors; the same old

crop

Obviously, it would be
take to

pansion
#

a mis¬
that the great ex¬

assume

of

interruption; or
come again
when this industry is beset by
severe competitive problems, cre¬
ated in large measure by the in¬
flux of new and relatively inex¬

followed

trade

many

who

lines of trade whether they oper-:
ate in great retail organizations or
outlets

small

in

ownership, y

their

under

;y ••/•;•',7.)

./•

•

own

Probably the most ancient

y

of

cept

rule

is

are

pre¬

abundant. But the

forgotten

ignored

and

every

generation of business

men

seems

ing the mistakes of its predeces¬
Our

sors.

business

record

annals

A

our

psychological
that

•

in

the

economic

history

of

1783.

years

nations. No

peace

tory of these periods of

.

But

.

.

war

tional

one

life

other

our

primary depres¬

a

After that, with

everyone

na¬

without

first

our

got it in 1791,

*

all

the

kinds

broad
ment

time

war

of

civilian

deficits

goods.

phases and the
our Civil War,
degrees of expansion and contrac¬
period of hesitation tion; but, on the whole it seems
extending from April to Novem¬ to be well defined..5
ber, 1865. Then the replacement
Postwar Economic Behavior
boom
got under way. It lasted
The most penetrating analysis
until the end of 1866. During the
of
postwar
readjustments
dis¬
next four years business oscillated
tinguishes four principal phases:
around a normal level, but the
(1) a period of hesitation and
following three years witnessed
uncertainty where business men
a great railway and industrial ex¬
stumble to get their business bear¬
pansion that led to excesses and
ings; (2) a replacement boom in
culminated in the panic of 1873.
which
was

The

main
War

lined

as

features

boom

the

post

been

the

generally outruns itself;
(3)
a
period of retraction and consoli¬
The business recovery which dation of
the replacement
gains;
began shortly after the disband- and finally
(4)
a
considerable
ment of the armies was based
period of business expansion that
primarily on the replenishment leads to
excesses
that
require
of stocks of goods—by individ¬
sweeping correction in a severe
ual consumers, wholesalers, re¬
secondary
postwar
depression.
follows: *

tailers

/

and

There is

now

no

reason

dation

of

on

war¬

rants
about

the

business future.

luxuries

Previous Postwar Experience

is

uncertain and

an

art in

which

much

.rs

shrewd

appraisal

-

In

trends.

perhaps
the

good

the

of

current

business

of

Economic

guide

literature

well. As

is

times

as
large ia$
previous
year.

the

a

result of the tremen¬

dous volume

of consumer buy¬
ing, people flocked to the larger
cities to engage in profitable

great
is

in

and
dealers not only
supplied consumer demands, but
replenished their inventories as

by
business

after

necessities.

as

re¬

because

part

fall, 1919,
American
plants operating at
practical' capacity, were unable
to keep
up
with new orders,
and additional plants and equip¬

hind

private

nature and character

governmental
life.

economic
group

intervention

of

Some

scholars

years

concluded

tman

the

they

were

prior to 1914. But

ienced unusual

why business men de¬
cide to expand, or contract opera¬
tions at particular times are often
hard
to
explain or understand
despite great care in economic
reasons

tial

and

centers.

the
reasons
for
the
changes in business attitudes or
naoods, remains a great problem.
If

we

may

assume

that

business

actions and reactions to the

omic

strains

of

great

econ¬

wars

have

similar psychological basis, then

a

the

history of business trends in

postwar periods will give
ful
of

clues

the

to

economic

that

probable

activity.

there

similarities,

are

us use¬

We

many

course

know

striking

the

S.
x

Dept. of Commerce, Survey
"—'"eiis,. May 1946, p. 23

'T'.'f




of

marked

during

and the

when

the

is written.
of

However, it is

iods.

vanced

sharply

in

as

other

ad¬

war

periods. There had been consider¬
able

conversion

of

manufacturing

facilities to the production of

war

goods during hostilities, but noth¬
ing comparable to the- scale in the
conflict.

Reconversion

3 James

,

as

9

.

Brown

in

lems.

We

under

a

can

&

~

or

(The

Boom

at the

End

of

Brookings Institution,

47, Washington, D. C. 1942).

the

War,

Pamphlet

full

blown

upon

as

the

January, Feb¬

to

not

warranted

and

probably will not be tolerated
by an alert citizenship.

1919-1920

and

1921

can

now

be

safely

assumed

postwar,

war

typical
readjustment pattern

own

hands

.

.

.

was

that

goods were actually plentiful....

ing

sweep

The

of consumer demand.

cancellation evil had

broken out in

<•"

March, when mul¬

tiple, oversized orders had be¬
gun
to
be withdrawn.
Now
goods themselves were either
refused
cuse

The

of

or

6

Vol.

t

'

.

•

Encyclopedia of the Social* Sciences,
1, pp. 190 et. seq. (Macmillan, 1930).

in

many

1922

of

financial losses to the retail trade;
and

only the select few
profits.

•

able

were

to make net

Postwar I and

Postwar II

'

:

Differences

periods; but the similarities in re¬
buying practices and customer
attitudes are sufficiently strong

tail

to

warrant

of

all

dence

careful

prudent
of

consideration

merchants.

Rising

present evi¬

no

customer

striking change in
buying habits; but we

do

that

know

any

coming
choices

and

customers

more

selective
want

are

in

better

be¬

their
values

for their money. If

still much water in the enormous

backlog of orders on the books of
and

other

wholesalers

and

under way

traders.

intermediate

will be quickly erased

by six months, of rising produc¬
tion, there now seems to be no
prospect of catastrophic price de- V
clines such as characterized the
mid-summer
In short,

of 1920.

—

the time has come for

give thought to plans for mer¬
chandising under much more
competitive conditions than have
to

prevailed during the past several
yeprs.
With some careful fore¬
thought now,
perhaps we can
avoid
costly repetitions of the
1919-20 experiences.

PabiiT Utilities

returned

on

the ex¬

(Continued from page 1534)
large
block
of common stock,
which now may be stymied by
market
conditions.
All
these
plans,
are

bulk

delivery dates.
of the cancellations,

prosperity to collapse may
assigned to the quick reversal
from ordering in advance and

from

Business Behavior,
(Journal of Business
July and October 1942, Vol.' XV,,, Nos. 3
and
4.
(University
of
Chicago
Press;
Chicago, 111;)
\
,
7 Wilson

pp.

and perhaps

affected

some

varying

in

by the market decline.
should enjoy a
ery
on

the

others,
degrees

If stocks

good price recov¬

holding companies should be
of

the alert to take advantage

opportunity to complete
plans—before any secondary

new

their

decline ensues.

>

broken

however, grew out of managers'
reappraisal of the immediate
future; and no small liability for
the violence of the transition

1919-22,

5 Ibid.

than

ran very high. No
drug store failures for
this period are readily available.
The price collapse caused heavy

details

(the con¬
price matters

be

that the first phase of the

period

better

other types of retailing. The fail¬
of small retail enterprises in

Wade Bros, to Be
NYSE Member
,Wade

P.

Payne:

207-210

Bros.

Co.,

&

Street, New York
come

First Phase of Readjustment Over

again

fared

ures

enabled
take

rived too late to catch the ebb¬

reconstruction

is

move¬

that

simply

economic

expansion

a

"Buy Nothing"
as early

in evidence

form of gov¬

say

democratic

being given to the possible
role of government in encouraging
and

..••••

A pathetic by-product of the
buyers' strike and the rail tieup
was
that' merchandise ar¬

now

sound

-

in which this in¬

nation.

which

into his

governmental aid
meeting business cycle prob¬

It

■

.

several

/;■;

were

sumer

for

The

American,
Co., Boston

processor

August, 1919, and the
gained momentum

tion

period
part

present discussion to survey
the positive steps that have been
suggested

as

up

ruary
and March saw it at
near-peak intensity, but in April
the passive resistance was at its
meridian.
This singular condi¬

our

G. Moulton and K. T. Schlotterbock:

Collapse
p.

Adams:

(Little

231-232.

1943.)

No.

Truslow

was

raw

.....

burst

not

World

Commodity prices had

with

manner

clubs

no

the problem of inducing
intelligent direction and use of
War I, we had a
capital and credit in the control
lhen unprecedented debt of
$25.5 of private citizens bristles with
billions. We had no problems of
practical difficulties. But a wholly
a
disorganized currency: such -as
negative attitude toward the vast
characterized other postwar per¬ amount of constructive thought

After

but

startled

economic

war

the

stores

the merchant to put his house in
order, to return to safer buying
protesting against rising
practices, to improve turnover, to
prices, brought on the downturn
correct the wasteful expense hab¬
by withdrawing from the mar¬
its that mushroom in war periods,
kets. This "buyers' strike" did
to reconsider expansion plans, and

after World War I

history of this recent

levels

sumer,

similar conclusion will

a

low

reached

While much of the price rise now

The

was

reached

the

not

retailers to

ment

be

partment

flationary spiral was reversed is
distressingly simple: The con¬

ernment

securities markets.

4 H.

1U.

rapidly
in
eastern
Inventory 7 speculation

extended to real estate

pp.

after

building

first nine months of peace,
and the speculative spirit also

recent

recovery

exper¬

commercial

i

our

greatly in¬

cities

the

"'it!)
An eminent American historian

describes

the

growth. Residen¬

especially

was

con¬

traction,"'

and

expanded

gnalysis.„The ^psychological basis
expansion

was

Large

and

and

were

manufacturers

winter deepened.

Perhaps

better

operations,

built

were

wholesale deliveries

as

social thought

creased.

are

) trading

de¬

began;

1922

until 1932. It is probable that de¬

taking would al¬
Buyers all along the line

spare,;'.

that

establishments

and

stocks

the chief contribution to scientific

ials for scientific study

booms

By

suppliers
in the ardent hope of covering
actual needs with something to

a

pressions, and the factual mater-

business

of

.

consumer

one

the improvement of govern¬
mental policies and techniques. <5

ries

.

.

placed oversized orders not with

of

number of wholesale and retail

plete with descriptions and theo¬

sales
of

from

in

ago,

but by
December 1921, there had been a
decline of about 15%
from the
May peak. In 1922, recovery in

low.

the motivating

from the

from

rose

prices rise rap¬
idly during the next few months,
public resistance is bound to grow.
Some
time
in
1947,
the
most
cases
demands for
a
year. Bona fide orders urgent replacement
could
find
no
takers.
Prices many types of consumer goods '
freed
from
Wartime
control will be fully met because produc¬
stood
up
to what the traffic tion is now rising rapidly, far '
would bear..
Congress wanted more rapidly than • is generally to curb the skyrocketing prices realized. Some observers believe '
but
continued [to
appropriate that a moderate change in the re- >
funds and authorize additional tail sales trend will be evident f
early in 1947. Meanwhile, there is
bonds to cover the deficits

and

small

no

sales

about 44%;

or

'

force be¬
enterprise
arises

of

store

105,

.

We may be sure that govern¬
ment will be compelled to take an

important role

peak.

retail

or

Traders

comes

as

situation,

the best rough

trend

wars.

luck

four

were

those

imperfect

often

success

by

well

as

.

.

rapidly

credit. They thronged

The imports of dry goods in the
fiscal year ending June 30, 1866

v

Forecasting the future of busi¬
ness

*

-

pur¬ war. Our best
hope is that a wise
business
statesmanship may be
trains, hotels, theatres, res¬ able to mitigate the extremes
of
taurants
and
stores,
buying these economic readjustments.

pretty serious thinking

some

to

1919 and May
index of de¬

retail sales afford

the

bonds

war

partment
73

to

on

adjusted

,.

People were intent on gratifying that the main outlines of this
their
long, • unsatisfied
wants, pattern of action and reaction will
even though it meant the liqui¬
be drastically different after this
chases

swept

January

the

...

to believe

busi¬

and

ment were ordered built. Indus¬

\

manufacturers.

itself.

try suddenly found itself short
of raw materials
output was
alloted and delivery dates put
7 forward
by months, in some

war

knows

,

v:

the enthusiasm to make up
deficits in civilian goods

out¬

of

have

de¬

consumer

to 7 assert

began

1920,

There are, of course, important
differences between economic con- ;
ditions in the 1919-20 and 1945-46

..

a

Civil

from

ing to the Federal Reserve Banks.
Between

time

of

After the close of

unsatisfied

.

the

of

Released

during this period, except
the department stores report¬

luxury lines, unstemmed.
by the mounting price barriers
hurriedly thrown in its path
by sellers.
{
Meanwhile, de¬
mand making forces on the for¬
eign market front were active.
By June 1919, the quantity of
goods exported was at an all

The

over-emphasize poli¬
history while business his¬
tory is mostly a closed book. But
every careful student of business
ness

emerged.

con¬

the

pattern of postwar adjust¬
differs, of course, both in the

duration

,

.

unexpected

an

commodities

being
im¬
''moods of^busi¬

great wars and by the vast power
of the economic forces at work to
restore

long

Slowly at first and then with
increasing momentum the buy¬
ing wave engulfed the staple

read the his¬

can

largely ephemeral, pressed by the
always destroys an ness men" and consumers when
capital. relief comes from the tensions of

readjustment is always called

there

tical

eight years of
expansion
certainly

for

the fear and economy of war, a

be found in

can

are

war

war, we

educational sys¬

that

front

dition

postwar

two

| then the real crash. In

tem tends to

0

ket

economic

and

dominate

of the

trying to scramble back, there
is a period of speculation and

thought that they would be smart
enough
to
anticipate
economic
troubles before their competitors.
No small part of these failures
arise because

for

signing

Paris

sion.

who

or

lasted

the

for. There is

the failures of those who did not

fallow the time-worn rule

re¬

are

we do not have
information on retail

good

sales

in the
making. On the domestic mar¬

great

our

not

were

mand

and

to have to learn by repeat¬

or

ful

abroad

of the power¬

some

,

good management is to
for the lean years when

prepare

the harvests

peace

after

activity

indicates

of

immense amount of real

in the lush days of this great ex¬

different than merchants in other

business
wars

sketch

huge

profits

have

pansion business. We forget Or fail
to follow prudent merchandising
practices when business is easy to
get. The drug store merchant is no

when

historical

brief

Unfortunately,
very

oc¬

.

ations, parallels

in

policies

unsound

This

.

readjustments. With sundry vari¬

after

perienced merchants and by older
the

which

after World War I

"while"

serious

of

curred

that

ceiving increasing attention from
business analysts. For this reason,
some comments on that experience
may be timely; but they must be
brief and, unfortunately, narrow¬
ly limited to matters that most

merchants stocked up and
people bought for d while. The

that the time will not

members

always,

as

came,

ei$ht. years < is likely to continue
without

by a depression extend¬
ing into the first half of 1922; and

and

boom

after

factors
So

the past

sales during

followed

as

new

Will Expansion Continue?

all

a

ment

.

when the number

distant

of outlets will equal or exceed

problem.
to April

1918

November

in excess of needs to
buying oa
a hand-to-mouth
basis.

are

we

the

in

immediately concern us as mer¬
that, with some interruption chants, Perhaps a few extracts
in 1924, we entered the so-called
from
the
outstanding economic
prices for crops; privateers and "new era of prosperity" that finv
others had made or lost for¬ ally culminated in the great stock study of that period will serve our
tunes;
army
contracts
had market crash in the fall of 1929. present purposes: 7
yielded fat returns; many had The long depression of the thirties
Expansive market devel¬
gone into debt, farmers among is now familiar history.
opments
both
at
home
and

established in 1946 and the time is
not far

many

again.... During the war many
/people of all sorts had made
money. Farmers, had gotten high

stores have been

new

From

and that

second or re¬
boom
phase.
The
similarities between this replace¬
along
placement

somewhat less difficult

a

'■!

people have
things they

war,

denied

thinks

one

4,200 stores discontinued business
during the period from Sept. 1941
to Dec, 1943; and it is estimated
that about 1,300 new stores will be
needed

t

course

well

1919, we experienced once again
peroid
of great uncertainty;
have been accustomed to think then a replacement boom accom¬
of as necessities, even though panied by severe inflation which
they really have been luxuries; lasted until about the middle of
With the coming of peace, every 1920. The collapse in prices was
been

store drug outlets.

There

•

_

its

run

Thursday, September 26, 1046

members

60 Beaver

Cityr will be¬

of the New York

Oct. 5. with
Daniel E. Wade,

Stock Exchange as of
the admission of

exchange member, to partnership.
Other partners will be Edward .J.
Wade and W. H. Lanier of Augus¬

Alfred Fisher is retiring
partnership in the firm. ; .

ta, Ga.
from

THE COMMERCIAL &

Number 4528

Volume 164

In

based?

the

first

selling, and at the same time see
prices rise to progressively

of

first

the

since
the

least

Because

June.

were
only' ,; slightly
above the February highs, I think

May

highs

be* contended, with some

it might

logic, that we have been in a bear
market since; the first week in

Certainly, the sharp
February.
February break was what Pro-

fessqr Taussig used to call a "pre¬
chill."

monitory

Material j Rally Expected '
'
k
Bear
markets / usually follow

j!

.

S

'

•

-

i

,

,

■ o

„

definite!;., patterns.; If this
runs true to form, it should

fairly
one

rally to somewhere between 185
and-195 in the Dow-Jones Indus¬
trials and then, perhaps weeks or
'months later; go back and test the
old. lows,
probably / dropping
through them; The minimum un;

ply; of credit has been
resting f the

The

finally recorded.

lows

the

unfavorable

maximum

ex¬

it seems to me, is. a
decline in the industrial share in¬
dex* to around 147-153, a point
which often has been a resistance
pectation,

area

both oh the way^up

and on

the way down.
I expect the'
dustrial share index again to sell

contracted

purpose

,

When: most

,

I

as

am

kets-which could not be

r

f

about, Feb¬
ruary of this year, have been disinvestingin government securi¬
ties. at a more rapid rate than at
any, previous time in American
monetary
history.'"; Wq talked
about bank gelling of government
banks,

since

;

securities as the cause

of the mar¬

ket. setbacks, of both 1929 * and
1937./But the disinvestment in

government
securities / through
paying;! off of government debt
from cash balance, has been many
times greater , in the past seven
months than at any time in 1929
or

1937.

f

We retired $2 billions on

Sept. 1 and will retire another $2
billions the first of October. And
in the earlier months of the year
we'retired billions more. - Desir¬

crystal gazer rather than an ap¬

This

of

statement,

cation.,..;.

most .outstanding

markets

^

markets

needed, the buying power of
the American public in terms of
consumers
goods, and the bene¬
fits' which may be derived, in the
long run,! from an economy in

vestment

,

are

which*

.

'

sound.,. -You-can't fill a bushel
basket with two pecks of potatoes.
take the pitcher to

the

in International

///:/'-•'•

)!//.///; Sentiment

„

that.! Russian-American

said

lations

a

re¬

chronic rather

By that
have meant .that-so far as I am

than
I

present

an

acute problem.

concerned/immediate war be¬
tween;; Russia ; and - the United
States
seems
exceedingly -rimprobable,
the

two

-

cataclysm

had,

After, such a market
we
have recently

as

is

there

strained for years and .there will

periodic crises and near-crises.
Meanwhile, we have a problem in

be

undigested military victories. ! ; !
Strangely enough, the «• recent
weakness
in the stock market
came almost immediately after an
historic cabinet meeting in Wash-

,

going to last two years, they are

The aftermath has to

stocks sell.

period in which thinking is
emotional and changes in

a

less

ownership
In such

.

.

.

;

M

of the absurdi¬
ties on which the latter phase of
the now ended bull market was
.What

are

some

these goods were

not obtainable. -

fallacy is obvious.
Take
man
who usually buys an

The
the

_

automobile every other year. He

more/ voluntary.

are

period, prices get back
relationship, one to
another. Ordinarily it is a period
of relative inactivity in the stock
market, and a time when in¬
a

evidence of over-valuation there.

Such
of

period usually is not one
buying, and .after

a

enthusiastic

of over-valuation such as

era

an

the

.

through which we have

one

recently passed, there are likely
to ;be /more / unpleasant;, than

to

anticipate

that

shall

we

not

immediately go back into a bull
market.
I
feel, < too, 1 that • the
chances favor at least a testing
of

the

and

of

old

laws

probably

•

in

bottoms.

new

the

averages

establishment

the

those

For

who

profits, this
time to buy, but for

seek quick short-term

be

may

a

of

most

considerations

tax

us

short-term

make

unattractive.

rather

profits

-

>

■

•

/ j

-

.

-

Tax Considerations

//These

tax

considerations,

not

because
they
discourage
short-term trading, but also be¬
cause
they put a premium on
short-term losses to offset against
only

earlier in the
limit contramodern bear
market.'//.■•/• ,v:.//■'
v
profits: registered
year,

tend to

may

trend rallies in any

there is no

/ To sum up, I feel

with Rus¬ hurry about reinvesting the cash
It• is sound one was wise enough to withdraw

if

practically

into becoming realists.

all

which

opinion, will avoid war
sia

its

than a

rather

level / around

price
be

disturbed inter¬

a

values

of

relation

: // ••'?./v :
but relations between pleasant revelations.
countries/ will/ remain / I think' it is logical; therefore,

,

government securities has been
accomplished by- drawing down thusiasts begin to believe numer¬ now scarce goods are available,
ous' things ; that
really are not the public immediately will buy
an excessive cash balance in the
U. S. Treasury.
.// •. /./'•, true at ; all. Eventually : these not only its current requirements
absurdities come home to roost. but also all the goods it did not
The fact remains, however, that
People now are being shocked buy during the war period when
instead of creating new;debt, in¬




that all stocks are un^

or

„

.

in¬
stead of establishing new bank
deposits with the stroke of a pen,
the supply of money and the sup¬

juncture that all stocks are over¬

.

in business.

this

at

contend

not

in vestors are more inclined to be
sentimentf of course, has been the pessimistic rather than optimistic
I
think we
are
going to pass
gradual realization on the part of
Americans that the foreign situa¬ through such a period sometime,
the
next
two
to
six
tion, in spite of our complete vic¬ during
tories over- Germany and Japan, months..,: .='•/'/: // • ■". /' ////:':';// '■
/ The time is at hand when we
still is a menace to peace and a
threat to domestic tranquility.
In shall begin to discover evidence
of
under-valuation
here, ; and
my
own writings'F have often

worth two s times their face value!
.anything can.»
every corporation has Actually, non-recurrent - earnings and realistic./ Russia already is
working capital needs often are not worth even one believed to be changing some of
ably and welcome as this is, it
tends to reduce bank deposits and importantly / increased
by high times their face value. They,have her attitudes in accordance with
money in circulation.
It is defla¬ prices,, unbalanced inventories a Way of getting lost in some un¬ its implications. She knows that
Industry pleasant readjustment to normal. she cannot go on winning blood¬
tionary economic phenomena.
It and swollen payrolls.
is effective deflation.
It always needs more new capital just, at a Seldom are they paid out 100% less-victories and she is aware of
her military^ and < economic
*
in¬
has made itself felt in finance time when the investment banker in dividends.
/'//
\ //.
is faced with a problem in un¬
and in business.
feriority.
I do not see why our
<//;'/
Deferred Demand Exaggerated
new foreign policy should be re¬
It mayV be objected that there digested securities—just at a time
when -the public's appetite* for
Fourth, the investment public garded ^as bearish since the old
still is plenty of credit, and that
speculative
shares- has ^become has;done some extravagant rea¬ policy,; "or lack of policy, which
there still are plenty of .Federal
sated./:'•
/■ ,/•//:;//:/ soning about the size of the de¬ we have now jettisoned was much
Reserve notes outstanding. It may
Fourth, ;; whenever - the
stock ferred demand for goods./ Much more dangerous- and/much, less
be said too, and accurately, that
most
of
this disinvestment v in market* travels rin ?!■ a / one-way of this reasoning has been based positive- than the one now in
street for four or five years; en¬ on the strange theory that, when force. Tn other words, it seems to

stead of printing new money,

speculate in price.
would

I

The fifth cause of the change

•
' - «
Third, the ambitious expansion reasoning..
A; third absurdity has been-the
reasoning / that
non-recurrent ington, at which; a' tadical new
foreign - policy
was
earnings should be appraised at American
more
than one times their i face adopted. '
■
> r
'
For the first time in at least
shortages and an almost com¬ value. A stock which, has a nor¬
plete drying up - in the markets mal/earning:. power of $4.00 a ,two generations this country has
for'.new equity capital. /Just at share,' if fifteen is the prbper a well defined foreign policy; It
a
time when the cost of every price-earnings ratio, is worth $60 is a.policy of non-appeasement; it
expansion project is rising rapid¬ a share,/- If, however, for. unus¬ recognizes that, yrhether- we like
ly, ' corporation
executives- are ual ; and / non-recurrent 'reasons it; or not, we are hopelessly in¬
finding that investment bankers this company's earnings suddenly volved in the pbiitics of: Europe
no*longer! cari sell their compa*- jump to $14 a share, this does not and' Asia, and we/must behave
nies' stocks to. the public. '/ // make the stock worth 210, or even according to; that policy and not
Back in 1937,. you will recall 100 df 150.: If the non-recurrent as though rwe can withdraw into
many / corporation
executives earnings are going to last one our shell, as we tried so unsuc¬
thought.. that the collapse in the year, they are worth one times cessfully to do after World WarT.
This new foreign policy, in my
market for new equities had a their face value and if they are

plans of corporations,; which al¬
ways provide a great stimulus to
general business,.-now are caught
between rapidly rising costs and

value

in

in-?
who
rather

an

as

owner

their normal

well too many.times.
Thev Change

invest

to

wants
than

the

for

der-valued.

work:; for/a while; but eventually
they fail because they are un¬

can

to* its essential worth

valued

.

bull

the bear market
price that any stock is fairly
valued, that is, valued according

market price and

people ere trying

money

ple's pockets and put it into their
own without making any tangible
contribution to the public weal.
All. these; 'stimuli;to bullishness

You

only somewhere between the

out of other peo¬

so many*

take

to

feature of bull

over-valuation.. It, is

is

is inevitable after a period
of so !much enthusiasm that we
have over-estimated the amount
of goods we will send abroad, the
number of houses we will build,
the number- of automobiles which

•

found

■

high and every stock sells
feature of bear
is undervaluation.
The

sells to

;/ It

1
Stock Split-Up Fallacy
capital indefinitely with¬
out
encountering j the (law /of / A - second absurdity, regardless
diminishing returns — perhaps I of how ridiculous it- sounds,;:is
should say the law of vanishing the widely held theory that the
returns!
Wage and salary in¬ parts always are worth more than
This theory has Ap¬
creases no longer
add to buying the whole.
power/ "
/
'
** peared in the widespread specu¬
lation in public utility holding
Wealthy investors, who have
company
break-ups, and in the
profited for two generations from
hectic trading in securities repre¬
the good, advice Mr. Babson has
senting receivership railroad re¬
given them, dob't have'to worry
It also has dom¬
about steaks at a dollar a pound, organizations.
inated the craze to split up stocks
five thousand dollar houses for

great deal to do with the decline
Incidentally^ recently

be a

analyst. tend to

too low. The great

prey on

,

The

satisfied

the

makes

That

value.

under-stress

and

! like most statements in
economics, is subject to qualifi¬

-

.

of their funds,

tends to make us over-stress price

course,

,

|

lost.

forever

.

" '

in the management

scarci¬ praiser of intrinsic worth, ;
From time to time, every stock
ties, for the most part have been

"

reversed.

attention essential investment

during the war period of

.

beefi

de¬

stock

values.. The * boasted liquidity of
American equities, and the way
in which investors employ them

mand—and that is all.

.

ers supplied them,.,

more

once

deferred

only. current de¬
The mar¬

mand! becomes

,

ting^ into the pockets of another;
Labor has discovered that it can't

goods

become v; available/

inclined to think
low; as 160. * T can
see the possibility of its going to
into smaller pieces..
// //
fifteen thousand dollars* a $1,500
150,-either before thqend of 1946
In 1945 there were only forty
Ford,-a $2,200 Buick, eighty'cents
or early in 1947.r
////,// ; or
firty' split-ups.
From Jan. 1
for forty cents worth of butter,
to date, at least 185 split-ups have
or {forty
dollars a week for a
)
- Causes of the Collapse
been announced. ; These split-ups
twelve dollar:; house servant. !, I
I Would lik^ to justify what has
have involved an increase in the
assure
you, however, that there
occurred' thus fah in this bear
aggregate
capitalization in the
are many families in this country
market.5 In 'my opinion, there
185 companies from 86 million to
who still have incomes of from
should be no mystery at all about
over,!226 million shares.;' Some of
$35 to $70 a week, and that fami¬
these split-ups have been in stocks
the causes of the collapse in values
lies with such incomes have had
which already has wiped away
which are yeqrs sold for less than
their aggregate buying power re¬
about thirty billion, dollars from
$10 a'share.-/ t
;v*
duced substantially by the rapid
You and I remember that one
the market appraisal of securities.
rise in .prices.
;
V of the most frequently cited rea¬
//The causes of the break which
Families with .incomes of- from sons
given, by investors early this
already has occurred, and of the
$35 to $70 a week provide the year for buying a stock was that
further period of investment un¬
backbone of the buying power'of it was going to be split up. r Now,
certainty through which we ap¬
this nation.
Since the first ! of when a stock is split two-for-one,
parently must pass, might b^stimt this year, in spite of all, wage and the
resulting ' shares are worth
marized as folltfws:""
salary increases,
the group of just/ half as much. as the old
{ First, we have ceased to create families on which the. prosperity shdres;A-; few months" ago
tnorte and more credit. - We are of America
depends has lost buy¬ everyone thought, that whent a
no longer printing more and more
ing power and has lost a lot of it. stock was split two-for-one, the
fiat* money.': A long: sustaining
Furthermore^ it /is still losing. new* stock ought to be worth 60%.
and' stimulating bullish factor, in Prices qre
going up faster than or (70% * as * much : as/ the void'
fact the main bullish factor; has incomes.
shares;
It was crazy investment
under 170.

it will go

•

conscious

the

pay too much attention
quotations and too littlb

analysts
to

chances are that

levels.

of ar¬
past three or four years repre¬
inflationary / spiral. sented, nothiftg but "inside'" sell¬
What has been done, and still is
ing.
Families and capitains of
being done, in the money and industry were selling out to the
banking field to arrest inflation public. Their motives were vari¬
has^ been just as effective as OP A ous. • Some had to sell to obtain
price ceilings have been ineffec¬ money to- pay inheritance taxes.
tive. // v.-ivY".
!!//,:v //';' / Others wanted to diversify their
f Second,/ personal
incomes investment
risks.
Still
others
sometime during the first half of thought it a good time to liqui¬
this
year,
apparently began to date. * Likewise, a great many- of
lose the race with prices.
They the so-called "new issues" which
are: still losing this race.
It al¬ have been sold to the public in
ways is possible for a time to in¬
the past two years really repre¬
crease wages, salaries; and profits
sented
"inside"selling.
Family
faster than prices rise, v We all held companies were being dis¬
know that is a jolly experience. tributed to the public.
The pub¬
A time, comes, however,- when it
lic, for the first time was being
is discovered that wealth is not "allowed" to become partners in
created merely by taking money successful enterprises. / The pub¬
out of one man's pocket and put¬
lic demanded securities.
Insid¬

for

favorable * expectation, • after the
most,; violent break since 1937, is
a period of dull trading not .far
above

;

a

been impressed

1943, $nd another in 1945, The
he has been un¬

in

called "secondary

(Continued from page 1531)
market at

bear

available,
bought another car
been

Most of the so- able: ; to buy a car this year.
offerings" of se¬ Mathematically, his .deferred de¬
curities handled by brokers and mand in 1947 is for-three cars.
investment--bankers
during the Actually, he will buy but one.

higher

long time I have
with the fact that
economists, statisticians and.

If analysis. For

in 1941.

car

had

automobiles

he would have

stock

a

last

bought his

the

place,

public seemed- to believe that it
could indefinitely absorb "inside"

In

1553

FINANCIAL CHRONICLE

me

that the fundamental .causes

of the trouble we have had in

the

stock market are of domestic and

at

higher prices, or one was for¬
not to spend when
prices were higher than they are
now.1
The position I take,
you
will notice, is not one of extreme

tunate enough

*

bearishness* but
and

delay.

one

of

caution

I

Miss Ford Dead
Miss

ated

Rose

with

Marie

Shields

Ford,

&

associ¬

Company,

New York

City, in their, munic¬
ipal department since 1938, died
on
Sept. 21 after an illness of
several
months duration.
Miss
Ford was with- Washburn & Com¬
pany in their New
two years before.

York office for

j oining; Shields
Ford
The Art of Security Analysis,
had handled a major part of the
detaijs connected, with Shields &
I would not close, without try¬
Co.'s refunding and syndicate op¬
ing to make a constructive -con¬
; ;
tribution to the* art of* security erations/

not of foreign

origin.

&

•

Co.

In recent years Miss

..

THE COMMERCIAL & FINANCIAL CHRONICLE

1554

Thursday, September 26, 1946

ligations in order to obtain funds that would be needed for business
not

are

"

Our
Reporter on

Governments"

in potential sup¬
if there should be an
..77v,';

products

However, it is believed that this increase

but
.

••

BANKS—ELIGIBLES VULNERABLE
Money market experts are watching developments very closely
The market action of the bank-eligible bonds, some of which
because it is believed in some quarters there may be changes in
made new lows recently, would no doubt be affected by any change
monetary policy in the not distant future, due to fear of economic in the monetary program of the Treasury . , . A slackening in the
maladjustments
.
*
It was pointed out that if the postwar boom debt retirement program, which would relieve some of the pressure
.

end, as is believed by some, then the money man¬
agers will most likely base future actions more on business actiyity
and the trend of commodity prices, rather than on fear of inflation,
which has been all-important in the immediate past . . . It is be¬
lieved that the first indications of an alteration of policy would be

has

the

to

come

an

postponement of the flotation of securities, the
would be used to retire securities held by the

which

banks

.

It

the. Treasury

ing

:
/.7" 7\.*-. 7
77;
announcement by Secretary of
Snyder that the Treasury is not now contemplate]?, ;
bond issues, is the first clue to a different attitude

any new

toward

the

money

-

■

..

,■

the recent

that

markets.

be the

would

What

7

"

...

be

may

proceeds of
commercial

.

,

,

other factors to

work, but it would not be surprising if there
gressive attitude toward debt retirement and
bank deposits
.

would be a less ag¬

pushed farther into the background
the action of the securities markets and the opinions of some of
that be, concerning future

certificates

maturities

by
the

business prospects, it may be that

will pass up the redemption of part of the
coming due on November and December 1st . , . These
could be rolled over and the Treasury would be in a
managers

the redemption of the 1%% notes due
;777777-7'77;"-i"

position to concentrate on
Dec. 15

,

,

'

.

77 777

belief is held by some that the
refund the 114% notes, with a bond bearing
rate as the maturing obligation . . . It is re¬

On the other hand, the

/

Treasury may even
the

same

coupon

ported that one of the points stressed in the
in Washington was that there would not be an

recent meetings

increase in debt
214% bond in exchange

to rule out a
notes on Dec. 15

charges, which would seem
for the maturing 114%

.

.

,

.

who feel that there may be some
kind of a non-negotiable obligation offered to non-bank- holders
Of the iVz% notes of Dec. 15
.
This obligation would probably
be on the type of the Series G savings bonds, with the maximum
rate available only to those that hold the obligation to maturity
However, there are still some
.

boom, and the beginning of a period
readjustment could result in a decrease in the demand for busi¬
ness loans which would
also have an effect on the investment pol¬
of

.

DECLINING

institutions

icies of the deposit

...

The

What to Do About Inflation Tiend
running at nearly two-and-a-

.

*t

.

rate before the
On the top of these liquid
is the readiness of business
the

half. times
war.

grant enormous credits for
things/ as homes, automo¬

to

such

biles, furnishings, electrical goods,
and so on, if only such goods were
That is a sum¬

available for sale.

purchasing

.

"

situation.

power

which homes

constructed.

are

shortages in furniture,
home furnishings and7in nearly
There

are

deposits in order to counteract the to, in some cases equal to, pre¬
war levels.
So far as the infla¬
deflationary trend and at the same time not add too substantially
tionary; trend :is concerned 'there
to the debt burden?
INSURANCE

industry-wide
and

7/;$' i1 / If

can't5 be much

COMPANIES PRINCIPAL BUYERS

price
increases
thousands of company

many

price increases.
in

Nor

is

the

end

sight.

New increases ar£ being
announced every day. Additional
price increases will be reported

tomorrow and the next day.
As a consequence of these wage
cost pressures that are

raising the

and of distri¬

that the nation's
the grip of an infla¬
tionary
spiral.
Higher
wages
mean higher costs of
production.
Higher costs of production must
we

say

economy is in

inevitably be followed by higher
prices.
Higher prices, in turn,
stimulate

demands

and

so

for

increased

in upward cir¬

on

Until and unless

this infla¬

tionary spiral is stopped
inflation

more
-

than

positive

and

more

inevitable.

is

measures

weak-kneed

It

rather

attitudes

and

or more of
appeasements to stop a movement
energies to the pro¬ of this kind. You can't cure infla¬
duction of war goods. The imme¬ tion by dealing with its end prod¬
diate result of this procedure was ucts. You must begin with its
to increase the spread between causes. Inflation will go on until
causes
of
inflation
are
rising purchasing power and the the

our

national

limited amount of consumer

more

with the certainty

goods. Faced
of imrnediate

inflation

ministration made
effort

a

the

Ad-

checked.

It

*

,

be

must

-

,

,

clear

to

everyone

that wage increases, unless accom¬

well inten-

from those

consolation drawn

figures, for while pro¬

to

prices ty, must

control

the 1 Emergency

through

commercial banks, and increase

7.

costs to their prices. So the OPA
had to permit hundreds of

We had to devote half

tioned

7

.

,

is

by which any indus¬

panied by increases in productivi-;
mean increased costs of
production -and,
therefore,
in¬
On the other side there are the
Control Act.
The OPA was de¬ creased prices and inflation,. You
shortages of needed goods.
In
signed to control the prices of are all familiar with the infla¬
spite of the fact that it is consid-^
finished goods, but it started off tionary character of the wage in¬
erably more than a year since the
from the very beginning with a fa¬ creases that have been granted In
war ended, there is a tragic short¬
tal weakness.? While Congress gave recent months. The effects of such
age of homes as well as of prac¬
the OPA authority to fix the prices wage increases upon prices has
tically all of the raw materials out

the

of

mary

Treasury balances, even after the Sept. 15 income taxes are now
all ifypes of equipment that go
only slightly in excess of nine billions and this will be^ reduced by
int6 homes. There are shortages
$2 billions on Oct. 1, which means that continued retirement of cer¬
in food, apparel, automobiles and
tificates out of cash will soon reduce these balances below prudent
with 7 some > exceptions,
almost
levels
Also if there should be a recession in business, and gov¬
other \ commodity
and
ernment revenues
decrease
and deficits increase, the Treasury every
service that one might name. This
would need to husband its cash resources to be in a position to meet
is a summary of the inadequacy
these conditions
If new funds should be needed because of un¬
of the supply situation;
,
•
favorable business conditions, would it be likely that the Treasury
Recent news releases out of
would issue securities that would be restricted to the insurance
companies and savings banks, carrying high coupon rates, thus in¬ Washington, particularly from the
creasing debt service? ; . . Would the money managers instead fldat CPA, make much of the increases
in civilian; production almost up
obligations with a lower coupon rate that would be taken by the
.

per

There

has

takes

(Continued from page 1533)

assets

production

raise the costs of

services.

try can carry on under increasing
costs and that is by adding these

wages,

is

and

way

bution,

recommendations of the Federal Reserve Board's open
market committee which meets the first week in October, will no
doubt be given important consideration by the Treasury in shaping
its future financing policies. There seems to be little doubt that the
monetary authorities are preparing to be in a position to meet any
changes in economic.conditions.. /7..777;'Vi;777;7''' ;:7i7;7:;7-7
7

•

costs of production

AWAITED

RECOMMENDATIONS

FRB

of

TREASURY BALANCES

,

.

.

the ending of the post-war

one

cles.
-

With the inflation fear

the money

of
as

the decreasing of

POSSIBILITIES

powers

,

consider is largely guess¬

deposits and reserves, would have an effect on investment policy
the commercial banks
Changes in economic conditions such

on

Higher wages, shorter

,

.

ply is not likely to come into the market
adverse trend in economic conditions . .

By JOHN T. CHIPPENDALE, JR.

ductivity.

These holdings are practically all owned outright and hours and less
hour all tend to
to be considered in the speculative classification ...

purposes

of finished

Price

goods, it failed to give

it the power to

fix the costs of pro¬
duction, that is, of labor and of
many raw materials. The omission
of controls
duction

the

over

the costs of pro¬

created

OPA

a

that

problem

could; not

In

solve.

good wishes and
the entire nation

spite of all the
good

will

of

while at war, this weakness made

been direct and immediate.

Even

the union leaders

admit

of

some

the

inflationary effect of their;
wage proposals. It is not enough, ,
however, to consider the general
relations of wage costs to prices
and inflation.
It is necessary to
ways
and means bythese wage increases have

the

study
which
been

gained.

.•?

it

impossible for the OPA to do
what it was directed to do. -7 7
Failure of Wage-Price

The

7

1

?• Not
ment

Adjustment:./.7J7?- ;"7

long
the

of

tration

OPA

forced

was

to keep wages
Steel Formula
wage

the

after

establish¬
Adminis¬

the

to

take

steps

in line. The Little
permitted general

increases

up

to

15%.

The

Effect

The

of Legal

Minimum;;

f777771. ff: Wages;77/ 7•'■i'77
Getting wage increases is not
merely a matter of collective bar¬
gaining, union demands, strikes
and government aids. All of these
are
factors, but back of < these
moves are the far reaching plans,

preparations

and

the

of

unions !

which there would be a

without

upset and gave duction may be reaching pre-war War Labor Board was established much higher percentage of union
ground during the period of severe weakness in the stock market, levels, purchasing power is at but
If there were time-it,
its
controls
were
honey¬ failures.
least 2 Vz times pre-war levels.
It was able to recover, as insurance companies and savings banks
combed with exceptions permit¬ would be interesting to study the
came in to take advantage
of prices that appeared attractive to
ting wage increases such as for mechanics of the union movement,
;! 7, Inflation Man-Made
them 7 *
The insurance companies : were much ;more important
so-called "inequalities" and "in¬ to see the tools and equipment,
There
is
nothing
mysterious
feuyers than the savings banks, because the former have ample funds
equities." Other exceptions fol¬ which a union now uses in put¬
about this inflation. We know the
to invest compared with the savings banks which in many instances causes of it. It is purely man- lowed, such, for example, as the ting an industry or a concern over
to
establish mini¬ a barrel and made to pay tribute
Ore quite fully invested, or have been losing some deposits
made.
While the war is partly permissions
mum
wages first up to 50c and to labor leaders as well as to pay
fhis has created a cautious attitude among the savings banks, which responsbile for it, it is, in the next to 55c
increases in wages to their work¬
per hour, as if these
Will no doubt persist until there is clarification of the trend of de¬ main, the result of following cer¬ would not affect the entire wage ers. At the present time I would
Although the government securities market was

.

tain

posits

Undoubtedly cne of the influencing factors in the de¬

practices and policies for sev¬

cision of non-bank investors to put some of their funds to work

eral years before the war began.
Back in the 1930's our Adminis¬

announcement of Secretary Snyder that

tration set out to create inflation

.

.

.

the press conference

Was

the Treasury is not contemplating any new offering of long-term

government bonds at this time

.

.

;

'

7

7

we've got it.

now

war

the

years

In the pre¬
Administration

increasing

pur¬

.

This

means

that non-bank investors, particularly the insurance

Companies which have been waiting for a new issue of securities,
Will be putting these

funds to work now

.

.

.

There is

doubt that

no

the insurance companies are the most important factors in the gov¬

This

was

also the

purpose

of the

Fair Labor Standards Act of 1938

that
all

fixed

a

minimum

wage

for

interstate industries.

The

Administration,

at

>

the

time, bent its efforts on re¬
ducing production, particularly in
agricultural products. It also con¬
tributed to a per capita decline in
production by passing a maxi¬
same

ernment securities market now and
future

.

.

.

will continue to be in the

near

Whether they will be inclined to reach for issues is prob¬

be an opinion that these institu¬
in the recent past, un¬
abrupt change in the policies of the monetary

lematic, although there seems to

tions will continue to be cautious buyers as
less there should be an
authorities

mum
a

work week of 40 hours with

one-half
work above 40 hours.

penalty

for any

...

of

time

and

When the war came this nation

LOOKING ELSEWHERE
It is believed

V

sideration given in the future
••other

that there will be greater

con¬

by the Treasury to the holdings of

investors'' of government securities, especially the restricted

bonds, and more
*5ved that these

particularly, the longest 2%s arid 2*4's
holders are




six

this year another bad

like to

call your attention to

It is bepotential sellers of the long-term ob^
.

.

.

production

to

still

lower

levels.

and more per
industries in which
»

paid

being granted. The costs of pro¬
duction are moving upward. Ac¬

least

Those

all

wage

made.

increases

7;
are

cording to some reviews, the la¬
bor leaders are counselling their
members

to

postpone

their

at least until after elec¬
tion. But the rarik and file of un¬
ions have learned that by the ex¬
strikes,

ercise

of that peculiar

institution called "collective bar¬

they
can
Strike and
come away with a lot more dol¬
lars of pay. You haven't heard of
many
strikes failing in' recent
-

costs

of

for unskilled, marginal or
employable workers. It is

7777

the basic wage.
The basic minimum wage

is the

foundation rate of the entire wage

All

structure.
above
are

for

the

wage

rates
basic

minimum

paid,
wage

merely wage differentials paid
differences
in
experience,

American skill, amount of responsibility car¬

gaining"

The

a

restricted

18y2c

,

still

in

the demands were

years.

of

but

device,

one

by law, by collective bargaining,
or by, the natural processes of the
labor rnarket,-is the lowest wage

hour

production.
We had to have increased produc¬
tion and we had to have it quick¬
ly. To make the war effort effec¬
tive we- had to cut down civilian

policy

of

creases

change in its

faced the need for

in some quarters

first

the

a
relatively
new
a tremen¬
break in wage controls occurred wage-raising tool of
I refer
when organized labor, by the most dously effective nature.
serious strikes ever suffered in to a device called the legal minithis nation, forced the Adminis¬ mum wage..
:'777;7\7 v /777
tration
to
grant flat wage in¬ 7 A minimum wage, whether fixed

of

.

bent its efforts on

,

Although Mr. Snyder was careful to emphasise that his de- - chasing power. This was the ob¬
nial of any plans for an immediate new government issue did
ject of the NRA. This was the
not foreclose that possibility at a later date, it is very generally
purpose of the National Labor Re¬
believed now that there will be no new money financing by the-' \ lations Act. This was' the objec¬
tive of the Social Security law.
Treasury during the year 1946 . .- • *fvV■
l777//7?i

*

.

and

During

structure.

months

production

are,

however, not merely raised by in¬
creasing wage rates, but also by
the, shortening of the hours, of
work and, worst of all, by a sub¬
stantial decline in man-hour pro¬

ried or other factors affecting in¬

dividual

or

group

productivity.

The amounts of these differentials

above

the

minimum

rate are the measures

basic

wage

of the de¬

sirability of Such employees over
the marginal or least employable
workers who get the basic mini¬
mum wage rate.
*

For, example,
mum

may

the basic -mini¬

wage rate in any industry
be 40c per hour, but the dif-

Volume

ferentials
rate may

75c,

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4528

164

$1.50, $2.00 and
more per hour.
This would be a
typical wage distribution in any
large concern. It would be a typ¬
ical wage distribution in any in¬
dustry for both large and small
concerns.
Those getting differen¬
tial wage rates above 40c per hour

paid for their differentials in
experience, skill or ability above
the marginal or least employable
are

workers.

Whenever, for any rea¬
material change is made
rates,
similar changes must also be made
son, any

in the basic minimum wage

in the differential wage rates. If
increase be made in the mini¬

an

wage

from 40c

to

60c per

hour, it is clear that it will be¬
come

necessary sooner or later to
increase
all
of
the
differential

but

through
to

came

discrimination. Any employer can

It is

this inflation, I would rec¬
that you take up
the
suggestions made to their mem¬

high wages as any
other similarly circumstanced em¬
ployer. If all must come under
the same regulation, higher wages
simply mean higher costs of pro¬

the Senate,

the

in

business

and will pay as

fluke it never

some

vote

a

Representatives.

House of

absolutely

certain that similar bills will be in¬

duction

State laws and orders.
that

rates. Those formerly em¬
ployed at 45c, 50c, 55c and 60c
per hour would all have to be

It is clear

derstanding of the causes of in¬
flation, their responsibilities for
keeping costs and prices down,
and for raising production, we are

the

proponents of minimum
legislation feel that the pas¬
sage; of higher minimum wage

wage

increased immediately to some¬
thing above 60c so as to maintain

rates

at

State levels

would

be

a

certainly likely to end

decided

help in getting the new
and much higher minimum wage

mar¬

nomic
1

'

ginal workers

employed

now

rates at the Federal level.

at

60c per hour. It would be neither
fair nor economic to expect the

competent workers to work
for the same wages as the least
employable .?■; marginal
workers
now
suddenly raised to 60c per
hour. But raising the differentials
of those who formerly got more

ceiving

-This

somehow

be

time

a

the

minimum

basic

level

would

structure.
; The adjustment of wage differ¬
entials above a new and higher
minimum basic wage takes place
a

wage

relatively short time—usually

matter at most of

Manyemployers fairness
V

v,

well

as

a

few months.

recognize
the

as

the

need

for

promptly raising the differentials
their

of

skilled

workers.

and

competent

But if they do not make

t h e s e
adjustments
reasonably
promptly, they tend to lose their
better employees to other employ¬
ers.
Or they will face demands
for wage increases made by the
unions. Nothing suits a union or¬
M- ganizer better than to find an em¬
ployer is too slow on raising the
wage rates of his employees. Un¬
ion
organizers ;have frequently

stated that the concerns easiest to

organize

the

-are

ones

in

which

there are

employees who have not
received prompt and fair wage in¬
creases.

•

•

<

So the

legal minimum wage has
become a powerful engine used in
hoisting the entire wage structure.
A

remarkable

feature

about

the

minimum wage as a device to be

in the

used

collective bargaining

is that it has been

states

well

as

the

raise

rates by

so

easy in most

in

as

Congress to

minimum

legislation

istrative

order.

striving for

now

tion of this

The
a

basic

or

wage

by admin¬
unions

are

wider applica¬

device and you may

be sure that this effort is not be¬

ing made solely out of regard for
the well-being of the.unskilled,
least

employable, marginal under¬
privileged workers played up in
their arguments. ^ The minimum
wage device is, in fact, the smart¬
est

and

surest

way

of

getting

increases all along the line.

wage

The union effort then is to
a

cure

se¬

legal minimum wage rate

at as

high

then

through

ing and
the

a

level as possible and
collective bargain¬

other pressures to raise

differential

portionately

wage

very

rates

shortly

pro¬

after¬

wards.
1938

Congress, passed the
Fair Labor Standards Act, a min¬
In

imum

law.
mum

and maximum hour
It began by fixing a mini¬
wage

some

of 25c per hour to be
gradually up to 40c per

wage

increased
hour.

of the elections in November it is

The 40c level was reached
years

and

expected that

a

per

succeed

the

similar minimum

ago.

At the last ses¬




or

If

must

will

do not

shall find ourselves in

we

situation

Austria

as

back

in

until

it

upon

not well equipped
to meet this movement properly.
To begin with, many of them do
not understand the part that the
minimum wage mechanism plays
in raising all wage rates. It is a
common

are

which it

that

occurrence

when

In

thing

same

Dangerous
and far

as

checked,

a

employers of skilled

stopped

high-grade

if

aggressive

workers tend to take the position

promptly* taken to

of distribution.

position

that the minimum wage is not of
interest to V them since they

trend

ready

the

than

more

pay

mini¬

wag^ rates proposed. They things that

mum

overlook the fact that

change in

a

The

the minimum basic rate makes it

inevitably

the differentials
v

as

fight not only of the government,

rise in prices, the forces that raise
costs of production, whether

these

taking

part

in

minimum

wage
controversies for
trouble with the unions
own

shops.

also

are

in

'(r

^

Employers

fear

,

of

their

/

••

weak

,

in

meeting
this
situation
because
they are confronted not merely by
organized labor, but also by social
workers, society people, so-called
"liberal"

college professors, and
even
by religious leaders who
usually have not the slightest idea
of the far reaching effects of the
minimum wage, but who are keen
to become the front for the

particularly

ment,
cost

as

it

whatever the Marxists wish to call

business employers are
mqde ,to feel uncharitable and un-r
chivalrous
if
they
oppose [ 'the
minimum wage. An employer is
so

usually

made

ashamed

of

to

feel

rather

himself for taking

a

position against the improvement
of wage levels for these poor mar¬
ginal workers. It is so much eas¬
ier

to get along wtih the "best
people" in a community by agree¬
ing that marginal workers should
be better paid even if there is no
change in their productivity and
even

if

the

long-run

VI.

Let

effect

is

a

wage
fates,
work, or reduc¬
tions
in
productivity per man
hour. Let us adopt the philosophy
of the CIO and really apply it all
along the whole economic line.
Let us stop making higher pay¬

pushed

#

seems

consider¬

ductivity is

to

our

will

money

tirely;

1

The

2.

the value of
disappear en¬

power or

Administration (■ should
once

continue

to

to cut its expenses,

collect

enough taxes
begin to

to balance its budget and

pro¬

increase in inflar
tion, and a part of the movement
that is leading us towards national
catastrophe. •• . ~
V \
an

.

„

5. It is time that business

em¬

ployers should learn more about
the

techniques of organized

new

I have referred in this ad¬

labor.

dress to the

surprising significance

the minimum wage in connec¬
tion with its effects on the entire
of

structure and its contribu¬

wage

tions to

get up adequate
production and to keep costs of
production down. We must pro¬
duce goodsas fast as we produce

purchasing

productivity, ex¬
other measur¬
Every increase grant¬
qr

that is not for increased

ed

So

at

the
us.

enemy

next

may

.

,

,

let

the fail¬

as

defenses in proper
Pearl Harbor or

fight inflation not
merely through Congress and the
us

Administration, but also

as

viduals and

.

business

through

groups.

Let

steps to

our

remove the

flation.

take the necessary

us

Let

indi¬

of in¬

causes

be

us

precise and
definite in our opposition. There
is nothing to be gained
by ap¬
peasement. This is a responsibility
that rests on all of us. Let us as¬
those responsibilities. - Let
do what needs to be done and

sume
us

employers ; should

themselves

prepare

the

meet

to

-

efforts

be made to

extend the

minimum wage rates at the com¬

ing session of Congress
at State level.

as

well

as

If you are an em¬

ployer then these minimum wage
proposals are your business.- If
you are an employer and all; of
your employees are already re¬
ceiving more than $1.00 per hour,
then the minimum wage propos¬
als

Stoch Prices
(Continued from page 1532)
On

are

May

special concern for
most ingenious prepara¬

your

29,

1946,

the

Averages?

attained a high of 212 for the
Industrials and 43 for the
Utilities;
followed on June 13th by a new

high for the Rails of 68. This has.
been followed by a severe
drop
of some 45 points for the Indus- ■*
trials and proportionate amounts
for

the

Rails.

Though the Aver-r
further, there
still be promising buys be¬
decline

ages
may

low

the

even

general

market

aver-

$;'■^ J-

age.

? '•

'

Comparisons

:

To

;

two

compare:

stocks

which*

.

.

prominent

percentagewise
dropped well below the Averages;
let

first

us

reached

peak

as

an

Solvents.

low of

a

in

.

take,

Commercial

1937

3^. It

and

example,

In

1932

it:

to at;

rose

had

by 1942
back to a low of 7%. Its*
peak of 32^4 came in May
of this year in a period when the
Averages were at their highest
in 15 years. The Averages at the.
settled

next

recent

low

have .declined

only
May highs while;
Commercial ^Solvents,
which
I
21%

from

the

still believe to be

good, has fallen

off about 37%. The Averages are

yet well above

Commercial

i Montgomery

Ward is

stock I:

a

believe is good, which has shown
a
decided decline far below that
of the

Averages, due in great part,
the issue of rights. In
193£
Montgomery Ward
declined to?
3Y2.
It reached a high of 69 int
1937.' It again receded in 1942 ta i
to

a

low

of

23 Wl' which was a de¬
66%! compared to only

cline

of

52%

for

trial

Averages.

the

Dow-Jones

Indus¬

Along

with th^
rest of the market the price oE
this stock progressed during the

repay
would

its staggering debts. > This
give a great lift of confi¬

they

dence

not

It has since sold off to a low of
creasing your wage,-costs.
Finally, I do not think that it 65 y2 or about a 37% drop com¬
is good policy for employers to pared with only a 21%
drop for
accept regulations supinely on the. the. Industrial Averages. A > wise
theory that they have only to add selection of individual issues may
the increased costs to the prices be
made
at "this
time if
one's>

only to the people of
this country but a noteworthy ex¬
ample to the rest of ; the world. V
3. The. government should get
of its attempts to fix prices.

out

are

tions for reaching you and for in¬

In

war.;-

Ward

May,

oZy goods

judgment- is

will

favorable

thinking people.

bill.

tude

towards

*

The public atti¬
control V is
The OPA could

price

waning rapidly.

;

save some

ing
on

up

part of its face by clos¬
its activities soon. To hold

will

mean

ally wind
credit.

that it will eventu¬

in failure and dis¬
The hope of some people
up

always continue to pay the
You who are in business are

in a real sense, trustees for th
consuming public. <■«>Through la
of proper effort or carelessness bn
your part the consumers mayyfor
a time have to pay higher-prices,
but in the long run the consumers
will turn on you just as the con¬

to

sumers

in this country

all

keep price and.profit controls
is not now receiv¬
ing very much encouragement.

We

are

such

learning

controls

economy

and

rapidly about
a
regimented

from what

of Russia.
will

The
go

we

see

and

elections

far

in

towards

showing what the American peo¬
ple think about our own regimen¬
tation carried, ovei; from, the war
years into our peacetime economy.

have always turned upon

others who have failed them.

The
very

outcome

is

not

likely to be

pleasant.
present inflationary trend
dangerous to our nation as if

as

it

were an

a

foreign

attack made upon it by
enemy.-

The

trend towards inflation

present
prob¬

can

ably be checked, but only if you
other business, men and the
thinking citizens of this country
4. If you would like to know
J
apply; themselves intensively to
what
business
individuals
and the defense cf our economy. Any
„

.

..

>

-

based-

factors

tioned, including
lationship';
Averages.

I
a

;r *

on

all

have

the

men¬

promising

the

to;

*

Montgomery
of 104%i.

peak

a

re¬

Dow-Jones.
-,

.

•'

'

*

Weekly Electric Output
Shows 12.1% Over 1945
The amount of electrical energy

distributed
and power

by the electric light
industry for the week

ended

The
is

1946,

reached

It should get out of this mess be¬
June 30, 1947,. By doing so
it will raise the respect of all

fore

and

.

"

Sol¬

vents.

national inflation.; Busi¬

that will

November

and

workers,
society people, college liberals and
religious .leaders
long
enough,
are likely to weaken and to
agree

that

lose

never

is

have

around by unions, social

able factors.

inflation

hear

crowded

program

for increased

are

perience,; skill

ness

higher costs of production, higher
prices and even inflation.
Finally employers, when they
been

ments in form of wages or for raw
materials
unless such payments

sight of the
main point that the only cure for
us

doesn't begin at

anything out of their
own pocket books to be for higher
minimum
wages.
Proposals for
minimum wages are usually dra¬
matized in terms of pitifully op¬
pressed, underprivileged workers
unable to help themselves, ground
down by capitalistic exploiters, or
it, and

Here is

sound and merits your
ation.
*'5

move¬

them

groups,

terest of organized labor that this
fight must be made andwori;
:

wherever

strike at

increased

,

business

all

of

and last, hut not least, of all businessmen.
It is to the long run in¬

In recent years many individual

employers have actually refrained
from

also

be

shorter hours of

.

but

,

substantial

more

the

are

fight against inflation is
fight'and mine. It is the

your

to change all
well.

necessary

even

Tfrhe way to stop inflation is to
stop the forces that produce in¬
flation, the forces that cause the

it.' The

inflation.

cause

an

nomic and unproductive increases
in wages.
^

us

site direction, if we make up our
minds to do it and stop doing the

^al¬

our

either

In addition to op¬

higher prices at the
v level,
there
is
also

opposition against the increases in
costs of production and particu¬
larly against unjustified, uneco¬

be turned in the oppo¬

can

treasonable

as

keep

to

consumer

needed

be

can

steps

stop

not

to

order

let us not forget that the
prices of goods to consumers are

the movement is

It

buyers' strikes the
right track, but the
going far enough. It
•

the

on

is

These

trend is
ure

But

that the
happen here.

address..

purchased.

of

so prevent this
inflationary move¬
price levels. We may ment from getting
any further out
agree that this is a part of a
of hand,
r
general program against inflation;

I would not bother to

or

this

make

each

no

or

groups or of the administration of
this country to take the
necessary
steps to check the inflationary

reasonable

have

we

each

failure either of individuals

all

already gone,
it is my belief that it may still be
as

of

is well enough to oppose the
pur¬
chase of consumers' goods at un¬

paper

printed. Let

can not

days

indeed of

urging

CIO

not be so foolish as to say

minimum wage issue arises many
or

was

be

CIO is

"

Employers

certain

week,
goods at
buyers'
strikes are the protests of the CIO
against higher prices.
all

Germany
theearly

worth the

not

was

that

be set aside in which

1930's, or of Hungary at
the present time., In those coun¬
tries the value of money declined

Employers' Attitude

has

month, 'or

of Italy and France in

or

CIO

mend

this

we

we

help

public by the CIO.
some
exceedingly
competent leaders. Their ability
and skill are noteworthy.
They
are
at
present
urging buyers'
strikes.
They are advising their
members and others not to buy
high priced goods. They recom¬

the late

rate will go into effect in
California.
'

wage

bills were intro¬
duced to amend the Fair Labor to any regulation so long as it is
Standards Act of 1938 to increase applied to all businesses without
sion of Congress

checked

to

bers and to the

The

We are

movement

to ruin.

same

1920's;

a

through the entire

a

minimum

a

65c

of

about

inflationary movement?

be carried

rate

done

he

can

hour for
office workers will go into effect
in a few days. At about the time

per hour,
relatively short
increase, starting at

wage

Massachusetts

wage

some

have to be accompanied by wage
increases all along the line up

in

In

What

do

can

ommend

in the main but the reflection of
the total costs of production and

Done

inflation.

than 60c

more

that within

so

be

,

York, Ohio and California,

necessary to raise the
rates of those already re¬

wage

Can

,

groups

stop

already well along on the broad
highway towards the disasters of

it

make

.

already; been active 'cam¬
paigns this year for higher mini¬
mum wage rates in Massachusetts,
Rhode Island, Connecticut, New

rates above 60c would also

wage

What

in eco¬
V

up

collapse.
>

There

have

more

than 40c but less than 60c to

for

everybody,
What
troduced at the next session of bears down equally on everybody
is simply met by adding it to the
Congress to open in January. But'
instead of asking for a lpinimum prices of goods. Under these cir¬
wage of 65c per hour, the CIO has cumstances,
employers
do
not;
indicated that it will ask for a themselves pay the higher wage.
minimum wage of at least 85c or The higher costs are paid by the
ultimate consumer.
possibly $1.00 per hour.
In the meantime, organized la¬
Because
of these weaknesses,
bor and all of the agencies of or¬ some employers tend to be ruled
ganized labor such as the Depart¬ by expediency rather than by
ment of Labor in Washington and principle.
They tend to forget
many of the labor departments out their responsibilities to consumers
in the States are driving very hard and instead join with prices driv¬
to secure higher minimum wage ing us towards inflation. Unless
rates at State levels through the employers come to a clearer un¬

wage

their differentials above the

bills passed

these

of

$1.00,

90c,

mum

the minimum basic wage from 40c
an hour up to 65c per hour.
One

above the basic-wage
be 45c, 50c, 55c, 60c, 65c,

1555

Sept. 21, 1946, was 4,506,988,000 kwh., a gain of 488,075,000

kwh., or 12.1% over the corre¬
sponding week in 1945. The cur¬
rent figure, however, was 14,163,000 kwh. below the output for the
week ended Sept. 14, 1946.
The ,'largest gain was reported
by1"(he Southern States division

which reports an
over

the

increase of 13%

1945 period.

^

-

Thursday, September 26, 1946

& FINANCIAL CHRONICLE

THE COMMERCIAL

1556

to the contradictions between the

vision of mankind into two oppo¬

two halves.

the

site political and moral camps. ' ;
But events are serving to blow

"lib¬
tales about Russia rest,

away the fog of confusion.
More
and more Americans are begin¬

faster

The

(Continued from first page)
facts or common sense.
I am not
referring, of course, to the paid
agents and the cynical propaganda stooges of the Communist
movements
I have in mind the
honest liberals and progressives
who hate poverty and injustice
and yearn for a shortcut to per-

[

face

as

Rarely has any man

fact.

gathered so much detailed misin
formation in so short a time and

such
nonchalance.
In
only a few days under strict official tutelage, days crowded with
receptions' and speech-making,
Mr. Wallace managed to learn

offered it to the public with

self-righteous

that liberty and democracy preAfter all the central mystery vail in Soviet Siberia and that its
population is "pioneering" a won¬
about Wallace is how a top Amer
derful new civilization in a truly
ican official, with the manifold
American spirit.
'■■fl
sources of government informa¬

fection.

.

.,

Nikishov

Comrade

and

Siberian

But that only under¬
lines the virulence of his obses¬
democracy.

sion. The truth about

forced-labor

its

Siberia and

economy

was

probably on file in his own De¬
partment of Commerce. -It is cer¬
tainly available in the State De¬
partment and accessible on the
shelves of the Library of Con¬

Mr. Wallace doesn't know
it because, psychologically, he is
unable
to
confront
disturbing
truth about; his Russian dream¬
gress.

; y:
we

dispel

can

"one world" myth on which
eral" fairy
the

achieve

shall

we

sooner

mental clarity needed to head

third world

a

the

off

The tempta¬

war.

ning to comprehend that gas pains
in the Arab region, violent fits in
Yugoslavia, a rash of civil war¬

tion has been to treat every

fare in

in

in

crisis
whether in
China or the Middle East, in the
Balkans or Manchuria, as an iso¬
foreign

lated

affairs,

that way we

In

case.

China, political indigestion
Poland, the acute distemper
Paris, are all close¬
ly related, i; They are all mani¬
festations of the great duel be¬

in evidence in

by¬

tween "two worlds.",

passed the ominous fact that each

over-all condition—of the

an

the

If

is simply>a symptom of

of them

vails,

di¬

v ;

.

Wallace

mentality pre¬
shall lose that duel by

we

default.

world; he runs away from facts
at his disposal, * with access
Siberia
that could upset the pretty fairy
people having. intimate per¬
The key to the monstrous joke tales he lives by.
sonal knowledge of the5 Russian
is that Siberia is today, to a vast¬
Situation, could remain so deeply
{ The Influence of the Obsessed \
ly greater extent than under the
"liberals'*
misinformed about: that country,
Czars, a region of political pris¬
(Continued from page 1532)
so strangely oblivious to the tem¬
The tragedy of it is that "lib¬
oners, exiled populations, forced
against the incumbent minds of Truman and his advisers.
per of the Russian rulers. A few labor and
erals" of this obsessed, variety not fight
piled-up horror.
A
There have been seemingly recandid hours with friends and
Slaughter. But Truman persuaded
large portion of the "pioneers" only hold high office but hold it
colleagues, in the administration
and once it agreed to do the job liable reports that Schwellenbach
spots of immense influence. in
were brought there in cattle-cars
•L-with men like William C. Bul¬
it proceeded to turn in precinct intended to resign as soon as Tru- V;under bayonet guards.
Literally shaping American public opinion. after
could
find
another
him
litt, Averell Harriman, Loy Hen¬
precinct ^where Slaughter man
millions'of these beneficiaries of They edit magazines and teach in
would get but one or two votes, judicial post. He seems to have
derson, Laurence Steinhardt, etc.
;
Soviet democracy in Siberia; live colleges and expertize as foreign
his opponent three or four hun¬ nothing of the kind in mind. That•
-—might set him straight on* at
in filthy barracks behind barbed affairsJvspecialists , on the
radio
least his more startling miscon¬
dred. There is no suggestion in his advice has been
repeatedly
wire fences bristling with ma¬ chains. ; Small in numbers,; their
ceptions about the Soviet heaven.
any quarter that this was not the turned down at the White House
chine guns.Anyone who wants influence is multiplied by the fact
that they are highly articulate. way the vote was cast. But it is seems not to annoy him. He seems .
tion

From

!to

Washington

Ahead of the News

:

.

Wallace's Misconceptions ;
secret that some
Cf these people have tried to make
1he
former
Vice-President see
cense on the elementary Russian
facts.
They have sought to ap¬
prise him that what he calls "eco¬
nomic democracy" in the Soviet
lUnion is about as democratic as
Similar institutions and policies
'tinder Hitler and Mussolini.
But
they found that the Wallace mind
was closed to unpleasant informa¬
tion and impervious to logic on
this issue,: however sensible it
might be on other issues.
When we understand this about
Wallace, we understand it no less-

j

It is an open

I

ah 'eye-witness close-up descrip¬
tion of a typical Siberian "pion¬

Most

though

manifest that there was no think¬

to

they peddle faith in a collectivist
slave state, they use the vocabu¬

dom," written by a Soviet official
who kicked over the traces.
:
But there is no hint of all this

lary of freedom, economic democ¬

the part of the voters;
They voted blindly and dutifully
as they were told., ;
;
•':/

over

eering". effort will find it in a
current best-seller, "I Chose Free¬

in the Wallace report.

racy

fischievous

region of Magadan.' He was
guest of Comrade Ivan Nikishov, head of the Dalstroy Trust.
He writes ecstatically about in¬

like attacking
The

the

the

all,

To ex¬

and social progress.

pose or oppose

He visited

of

precisely

typical, demonstrates
the importance of a more realistic
approach to the Soviet facts. The
vague feeling which lingers that
"despite everything" the Soviet

because it is

that areaf. Ad¬
dressing an official gathering in
his honor in Irkutsk, Mr. Wallace System holds promise of«the' bet¬
declared: "Men born in wide, free ter life must b& dissipated.
- •/
.
On one side we have a huge
spaces will not brook
injustice
and tyranny.
They will not even and fanatically; earnest propa¬
temporarily live in slavery."
ganda, backed by the resources of
about all the aforementioned "lib¬
How the Soviet officials present a great nation, to build up and sup¬
erals."
They reject in a kind of
must have laughed inwardly! How port illusions about Russia.": Be¬
mental panic any references to
the plain people in the audience, sides an army of paid agents and
{reality that disturb their fond
Communist Party members there
illusions.
They
have
invested many of them Siberian exiles,
must have writhed in bewildered are legions of fuzzy-minded vol¬
years of ardent faith in what they
unteers of the Wallace brand. On
Here was the Vice-Presi¬
want to believe is a great experi¬ anger!
the other side there is no equiv¬
ment in social idealism.
They dent of the world's greatest de¬
alent;
counter - propaganda' of
resist any proof that the experi¬ mocracy praising their slave sys¬
truth."
■ment is neither liberal nor ideal¬ tem' instead of boasting; of his
This lack must be made up. Our
istic as violently as others resist own free system.
should
It happens that Magadan is the government departments
slurs on their religion or on their
most notorious of the forced-labor be stirred into realization of their
families..
"
'
and concentration camp areas in duty to release to the public all
;
The "Liberal" Obsession
Russia.
Dalstroy -is one of the pertinent information about Rus¬
If you want proof of this "lib¬ most sinister slave-labor organi¬ sia now concealed in their files.
eral"
obsession,
a
remarkable zations under the aegis of the Whatever excuse there may have
document is at hand.
It exhibits Secret i Police set-up. ; Comrade been for reticence while the war
the will ta, believe that ..Russia Nikishov is one of the foremost was under way has been ended
despite everything is still the N.K.V.D. slave-masters. The "pi¬ with the victory. -The American
hope of the human race in its oneers" whom the American visi¬ people should have all the facts. V'
rawest and most illogical forms. tor exalted were not born in those
At the same time businessmen,
dustrial progress in

on

begin to

In this light, you

.

There

franchise.

the

belief

see

-

.

.

so

J

;

document, moreover, pro¬

for the most editors and others with access to
were dragged there as the public ear should make it an
Wallace.
prisoners and deportees." To com¬ affair of patriotic duty to circu¬
books
that tell the
truth
I refer to the book which he pare them to those self-reliant, late
published recently .under the title ambitious American families who about Russia; to obtain the widest
"Soviet Asia Mission."
It is the braved danger and hardship to dissemination for frank' reports
record of a hurried journey to build our West is to insult every¬ on that country by returning cor¬
eastern Siberia which Mr. Wal¬ thing that is most precious in the respondents; to refute without in¬
hibition the propagandist versions
lace, then f. Vice-President, made American tradition of freedom.
in the summer of 1944. * Why he
Consider the fantastic picture: of the Soviet reality offered by
^ ;
waited two years to present the the second highest official of the obsessed "liberals."
account is nowhere explained. But United States of America, finding
Courageous and Objective
its faith in the ' "democracy" of himself in the world's most no¬
Diagnosis Needed
Stalin as a peace-loving ally eager torious forced-labor region, hails
:
In facing a sick
to cooperate with the capitalist the victims in the name of liberty!
and fevered
Powers is of the purest 1944 OWI Then, returning home, he recom¬ world, as in facing bodily ills, the
first and indispensable step to¬
vintage.
mends the
Soviet system as a
3';ward cure is an absolutely honest
The events of the intervening worthy model for his American
diagnosis^ "!This calls for couragev
years that have alarmed the world countrymen to imitate in their
about Moscow's methods and in¬ search for "social democracy." .; It is always pleasanter to pretend
that
the
acute
appendicitis is
tentions
are
simply
ignored.
I submit that a great satirist
Generalissimo Stalin's own forth¬ seeking to demonstrate the bound¬ only a bellyache. But the penalty
for such falsehood is always dis¬
right statement that war is inevi¬ less innocence of American "lib¬
table as long as "monopoly capi¬ erals" and their fierce eagerness aster.
From that point of view the
talism"—meaning, - in
the first to delude themselves could hardly
place, the American way of life— think up a better scene. It is as if sharpening American awareness
remains, might never have been a: foreign
dignitary had
been that there are, after all, "two
a
democratic
world
made.
As far as the author of taken for a visit to' Sing-Sing worlds"
that book is concerned, the Krem¬ prison, admired its quiet and dis¬ symbolized by
America and ia
lin aggressions, unilateral actions, cipline, was thrilled by industrial totalitarian world symbolized by
The
violations of formal pledges, rapa¬ progress in its worshops, and went Russia—is all to the good.
cious stripping of many regions back home to urge that everyone main fault in Mr. Wallace's Madi¬
a

vided

by

other

none

wide,

free

spaces;

than Mr. part they
,

---

Joseph
The

ment.

They wouldn't know a bet¬
ter government if they saw one.
They will make additional statis¬

T.

Johnson,

Milwaukee

known

house,
nel

tics for the Leftists to manipulate.

—

Company,

investment

Wallace's

Book

Termed

of Morris F.

Fox

The volume

appreciated.

must be read to be
It is a magnificent
-j--"v

ichievement in the domain of fic- 1believes the Homeric
tion

presented

with

a

a

model of

nonsense

he

straight has written about Magadan and




Co.

&

son

Square

Garden

world."

make it

franchise.

the

Democrats

the

If

:

'

will

associated with The Mil-

Michigan Street,. Milwaukee.'
; ;
William
G.Martin,
Addison

The

only

way

he

can

.

.

get through the November elec¬
tions without disaster,' we had
look

better

seriously

proposition that we
people. More likely
living in a
can't escape.

into

-

Haugan

that

who

free
we will: be
vise from which we
are

a

Carl G. Hausmann,'
join The Milwaukeethat date^have all -

and

will

Company

on

been with

Morris F.

Fox &

Cow

over

years.

who

,

,

twenty
resides

in

came

Aside

international

from * the

implications

in

the

associated with the company

in

appointment

Mr. Martin,
Milwaukee, • be¬

taken

is

it

in

connection

of

ment

former

Labor.

.

of

F.

has

company
from the

with

in

Water

been

repre¬

Co.

and

1921,

Morris

founded in

cupied its

Kentucky,

&

?

with

own

and

Fox

F.

&

1914 and has

the

oc¬

Mason

East

from

efficiency.

and

*

After all is said

sion

we

that

•

Streets

;

;

and done, how¬

the

-

became

-

T ' "

securities

associated

with Morris F. Fox & Co. in 1921;
and

elected

was

Vice-President

Secretary in 1929.

death

get the distinct impres¬
his job is to sell, the

investment

He

business.

of

Morris F.

Upon the

Fox, founder

-

of the firm,

in 1935, Mr. Liginger
became President.
,

This move is a continuation of
department to business, that he is
to be, in. this respect, a glorified the expansion program of The
public relations man. He is call¬ Milwaukee Company, which in
ing
in
businessmen,
visiting 1941 merged with Edgar, Ricker
with others, in an effort to sell & Co.,'the oldest investment firm
It was formed in '«
them on 4he department's sincere in Milwaukee.
desire to be of help to the man 1904. ' Morris F. Fox & Co. was
second oldest, having been
Who has to pay the wages. This is the
a
radically different conception founded in 1914. :The Milwaukee
from
that of the department's Company also has offices in Chi¬
functions
in the
past. It was cago, St. Paul, Madison and Wau-i

created ; in

1913

as

labor's baby,

frankly to promote the cause of
labor and as it turned out, the
cause

of organized labor.

^

,

sa^i, and representatives through¬
out Wisconsin.

Chas.

"

Johnson is now seeking

v

Slaughter to Admit

ably

as

to

nothing,, but'it is interesting
what is going through the

on

Oct. 3.

.

..."

;

'
.

>

partmental administration and to
this end is bringing all the con¬
ciliators into Washington - to see
what can be done to improve their

ever,

;-;«v

Co.

Vice-President in since 1921.
\
charge
of public
relations for
J ames W. D. Liginger, £ Presi¬
Reynolds Motors, has been made dent of Morris F. Fox & Co., and
Under-Secretary of Labor. He is widely known in financial circles
to have charge particularly of de¬ for the
past 25 years, is retiring

•

^

in

Mr.'

building at North

recently

more

,

since
his
graduation
University of Wisconsin

1924.

was

has

Fox

since

Hausmann

in the Depart¬
Keen Johnson,

Governor

Morris

Janesville

think are
being badly stretched, business
might get more comfort from it if

of Commerce, which we

what is happening

1921; Mr, Haugan

sented

Secretary

of Averill Harriman as

address, and

stick is to shut his eyes

*

becoming- increasingly ap¬ waukee Company on Oct. 1, with V
parent that what we need is a headquarters at The Milwaukee •> 4
reduced vote, not an extension of
Company's main office, 207 East

.

:

Magnificent Fiction

}

the prison as

1

v

securities "

that the person- *

announces

become

j-.

well-

to con¬
Charles
Slaughter & Co., ,66
vince labor leaders that the cause
even more so in his long memo¬
the good life.
Beaver Street, New York City,,
of labor can be best promoted by
randum to the President, is that
members of the New York Stock
Wallace Believes His
he ignored this dualism. Mr. Wal¬ the department if it has the con¬
of industry. We don't
Own Nonsense
lace holds on for dear life to the fidence
Exchange,'^ will admit .Sergius
Unquestionably
Mr.
Wallace wartime theory that this is "one know what this will lead to, prob¬ Klotz to partnership in the firm
uayucsuuuauiy
ivir.
wauaee

follow

just didn't happen!

President of

It is

•

,

WIS®

MILWAUKEE,

power.

(

It is

Merged f

With Milwaukee Co.

they can use. •• them

They; would
add
nothing>towards .better govern¬

for

p

->■

Morris Fox Co.

'pawns in their great struggle

as

a

policy, generally speaking, is helpful.
,
. .
vj

educated masses to be given the

franchise

all '

is

having
creditable job- for labor

hands off

real

additional un¬

want these

it
as

whatever the cost. And Truman's

denied their constitutional rights.

They

before

be hailed

industry. In the meantime,
industry seems to be showing increasing signs of resisting labor,

the agitators
people
are * being

certain

that

no

is

that

he will

and

the part of

on

believe

done

,

them seems almost why there is a lot of breast-beating
on the part of Leftists to extend
idealism itself.

of Wallace,

case

ing

^Volume 164-

and

that, in particular, govern¬
ment credit should remain intacf,

V

Efficacy oi Price Control
(Continued from page 1539)
been able to maintain an orderly
.

distribution
without

and

stable

having at

..prices

its disposal a

sufficient supply of commodities to
meet the vital needs of the nonqlation in regard to food, clothing
and other utility, goocts.

vVnerever

there was an acute shortage in the
supply of necessities, it proved im¬
possible to prevent the population
from trying to satisfy its impera¬
tive needs by purchases outside

the official system of distribution
and to do that even when very

When that

making for economic adap¬

for"

Another condition for

in

success

able them to buy on such markets,
country to maintain foreign trade are the truest reflec-'
would upset the wage policy.
In
stable prices.
Thus, after 1933, tion of the real change that has
Germany benefited by the rela¬ taken place in the purchasing many countries, however, condi¬
tions were present for an effective
tively stable level of prices within power of money.
'
working of a system of subsidies
the wide sterling area;
and, al¬

individual

the

did not

individual

doubt,

prerequisite for the

a

It

gen¬

eralized effort of 1942 to introduce
an effective price control
was, no
suc¬

I

What Has Happened in Prices

countries

clearly realize it, the

the'markets for farm

diately
of

thorities

is only

broad

by going behind the

figures and study¬
ing the behavior of the different
commodity groups that one ar¬
average

and,

long

so

the

lasted,
anxious
order

to

to

wages

emergency
were

the

subsidies

the

use

keep

as

i the

as

governments

increase

.moderate

in

in

possible,

as

well

Revenue

in

was

of

brisk demand for

that had

At least

which

eliminates

War,

valuable

some
UNITED

KINGDOM—COST

•Working Class Cost of Living—.

Food

102

102

130

122

.X,

1944,

December

1945,

December

131

122

June

131

122

131

122

1946,

March

:

-

Fuel and

Light

Rent

100

103

101

167

145

166

152

166

100

v,

:

*

151

166

;.v:

151

101

102-103

104

,

102-103

!

The

fuel

of clothing and of ening of other goods and services;
have risen con¬ their total in 1946 comes to £334

groups

and

light

siderably

more

but

are

than the average,
almost, the same as

million

in

the

it become

problem

clear what

faces

the

a

the

emergency occurs,

since in the

nance

the

United

cal

relief

occurred.

Now,

6.0%,

run

the supply of accommo¬

cess

ministries

of

which have secured the

of

or

are

a

15,683

social

reform.

•

•

increase of

an

1.8%,

or

The

the

above
V

"

»„•

loading of revenue freight

for the week ended Sept. 7,
showed

a

194#,

decrease of 113,957 cars,

12.5%, below the week ended

or

Aug. 31, 1946..

United States:

..

Goods for Consumption."

and Imported

;

*

Indexes January-June 1939=

of

helping the needy, for they give
low prices also to groups of citi¬
zens

for

whom

the

basic

cost

of

100.

ZOO
.

food

of

is

substantial

no

fi¬

A sudden

Export"

conse¬

180
•■y

"

?'■

■

'''

<

-

>1:

-i

•

"

160

160
—

•

suc¬

-

«

Import prices

1

Bases: Jan.-June 1914 and Jan.-June 1939

140

'140
■

jV<;y.

:'

120

J:

120
V-

■100

-

V
.'-:h

/ u

•'

j:.

Jr

^J

.lilllllllu iiiiiinin ii.Liilii.lu. lllull.ll.Ji ijliili.iJ.il. iiluLulu i VI nit

■

tin

N°72f.

Note:

The

fall

in

1945

would

and

subsequent

value

export prices which occurred

seem

to

connected

be

cessation

with

of lend-lease

which had been accounted for at

of

the

in the

course

gradual

shipments, the export
relatively high prices.

Kingdom: Wholesale Prices

data do not permit an exact com¬

parison, but for the United States
graph shows an interesting
correspondence
between
the

240

the

for

curves

seven

years

1914-

1920 and those for 1939-1945.

rise

which

the

has thus

American

counterpart in
countries

occurred

market

-

a

has

-

v

on

its

200

the

shape of
the curve for the United Kingdom).
In other words, the governments

»'}

7":

/m

' :

.

.

200
r-Ji]

220
'

-

ins]

:

A200

180

180
'AA

-

tm •19411

180

iJiU

-

-

-

180

January-June 1939= 100.

f

200

fi 1

220

number of other

(compare

1914- ®

'

The

Indexes

240

the

160

160

-

*1

-

V
-

have

not

fit

seen

to

hold

down

160

160

the

prices of farm products, one
reason being that they would hesi¬
tate to take steps which might

jeopardize the production of com¬
modities
so
important for
the
feeding of the population.
But
they wanted

to

ensure

that

>

V\

.

-i
-

*

\
:

with

a

should

heavy

costs and they

not

be

-

being
granted in most countries, mainly
for food but also for; the, cheap-




-

j

-

100

V

100

100

100
,

;J. i \ J

•3

r

'
.

.ri'tl.

iiLululu nliilnln llllllll'l! nliilnln iiiiiinin Illllllllll lilllllllu nliilnln Illllllllll nliilnln

1514

still

.

120

120
-

the

•

saddled

increase in living
achieved their end

subsidiesare

.

120

120

by allowing high subsidies for
keeping down the price of food.
Such

-

-

{

%

consumer

140

140
140

140

am

BIS

1916

191/

1920

1921

1939 <1840

m

M2 m M 1945

1946

1918

1919

1922

1923

niiiiiiin

Illllllllll

B2L7192S

Illllllllll
80 nlijlu In .lj,i!jIiiIii
H*719.

1939

;

1940

1941

Illllllllll

:

1942

Jllillnlii

of

reduction*

for Food and Tobacco.

100.

—

•••

-

United

Products.

ZOO

' '■

prices

180

rise in the cost of liv¬

United States: Prices of Farm

For

1945, and

or

cars,

corresponding

week in 1944.

the

the United Kingdom the available

51,068

the

cars,

of

also

was

Wholesale Prices for Exported U.S. Merchandise

Subr

rise with the corresponding change
war.

same

countries, a rise in

the majority of

in

week

once

strong demand, making
seller's market, has been the

most uneconomic way

dation

that occurred in the last

of

over

is-

holiday),

Day

Association

the

increase

an

over

(which

American Railroads. This

a

.

sidies

ing as a result of a cut in the sub¬
price and cost policy,
sidies may, however, have political
depends almost wholly on since it was the holding-down of
and other consequences not easily
the
number
of
houses
already living costs that made it possible
overcome.
After
the
last
war
existing.
When new houses are to set a limit to wage rates, and
there was, as may be seen from the
built, rents corresponding to the it was thanks to that limit that a
accompanying graph, an abrupt
true economic cost will as a rule
strong rise in all prices could be
fall in agricultural prices and this
have to be charged (except when avoided.
To make such a policy
brought with a fall in the cost of
subsidies are granted).
successful, however, it was neces¬
living
from
the
A special story is attached to
high ' levels
sary for the amount paid out in
reached in the first world war.
the relatively low cost of the food subsidies to be raised wihout in¬
ilVhether a similar fall in the prices
items.
It is one of the achieve¬
flationary effects, since such ef¬
of agricultural products will occur
ments of the wartime price control
fects, if they had occurred, could
this time is open to doubt.
The
that the rise in wholesale prices
easily have cancelled out the ad¬
agricultural sector in many coun¬
this time was much less than dur¬
vantages accruing from the rela¬
tries has been promised price sup¬
ing the first world war.
tively low prices charged for food.
It was, indeed, a necessary condi¬ port and it is likely that almost
Effect of Subsidies
tion for the success of a policy of everywhere great political resis¬
It
is, however, instructive to subsidies that financial stability tance would be directed against a
pick out the price rise for agricul¬ snould not be profoundly shaken price decline, were it to come as a
tural products and compare that
short

to

increase

14.2%,

or

Labor

the

according

the years 1919notwithstanding
the
sharp increases during the 1914-18
period,
further
substantial k ad¬

at present. The remain¬
ing large subsidies constitute a
heavy burden on the budgets, lim¬
iting the amount available for fis¬

war,

by

cars,

194®,

14,

an

previous'week

when,

•

an

cars,

au¬

Kingdom,
quence and who could therefore
over $1,000 million in th£ United
afford to defray the full cost di¬
being held down States, vFr.i fcs. 85 ...milliard
in
by a strict system of "ceilings," France and over Sw. fcs. 295 mil¬ rectly instead of being subjected
to the complication of paying via
and the cost of food is low as com¬ lion in Switzerland.
v: •
the tax system (including turnover
pared
with
the general index.
Consequently, it is not the price
and sales taxes which fall on all
Rents payable for houses and flats control alone but
largely the allo¬
classes).
i';:
need not be raised at once when cations
rents

before

Sept.

thorities

•.

Clothing

—September 1, 1939

average^._i.—^_

-

does

907,169

eluded

been

freight for

revenue

ended

112,686

the

the experience of

more,

difficult

OF LIVING
•

Total Index

1939, .monthly

ized

1939 and 1946:

week

totaled

case

any

Freight Loadings

Loading of
the

irrespective of the level of prices
and wages reached by the end of

vances

to the

area

Up 112,686 Gars in Week

knowing that a wage rise
they achieved in check¬ rives at a fuller understanding of
would be followed by a price rise for a
ing sharp rises during the latter what
has really happened.
The and necessitate
greater and greater rule, this demand being in evi¬
stages of the war. WA'iXi
dence also in relation to labor.
following table shows the changes additions to the public debt.
Fourthly, it is well to remember
in the main items of living costs
Only when the true nature of Beween the summer of 1945 and
that a freezing of
prices, such as
the wartime achievements is real¬
the summer of 1946 there was, in
happened in Germany during the in the United Kingdom between
cess

adapted in each

be

prices has been

goods and also a rise in wage rates

20

sad

same

conditions there prevailing.

postwar business.
It
probably true, however, that in
first year and a half or two
years after the cessation of hos¬

war.

aur>

as

to

the

the

as

experience
The ste®®>
taken would naturally have

is

a

well

"boom"

"bust"

for the

was natural

to be

the trend of

there

the

the

should not be repeated.

less than in the final
phase of the last war.
This fact
assumes a certain importance for

bound,to be

after

came

the

time

decidedly

tilities

in:

employers and
employed to be anxious that

has been that this time the rise in
wage rates and in

set

1919-20

1920-21; it

.

1939 level and the

im

changes in

on'

r

January-June

A

supply and1 prices for peacetime goods and in
the
wage' rates
of
specifically
products.
But the question peacetime industries. In that way
a new wage differential was estab¬
whether it will prove possible to
continue for any length of time a lished, which certainly helped td
more
pronounced
increase
of expedite the process of rece&?»
prices within the agricultural sec¬ version. But apprehension impa©-*
demand

was not the case, when,
instance, the price rise had
tation
and
thus
hinders rather already gone so far thgt current
than helps economic progress.
An prices had lost vall- contact with
elastic price system has received prewar levels (having risen not 40
or 50%, but four or five
times), tor than in other sectors is not easy
more vindication
during the sec¬
In this as in some
ond world war than is generally when, in fact, the depreciation in to answer.
the real
value of the currency other respects there are distinct
realized.
made it impossible to place large elements of uncertainty pertaining
Fifthly, more should not be
claimed for the price control than loans among the public, then the to future price developments.
device of large-scale subsidizing
it has really achieved.
The facts
A New Wage Differential
are
that by the summer of 1946 would no longer arrest but only
The result of the price control,
accelerate the inflationary move¬
wholesale
prices in the United
reinforced as it was by subsidies,
States had risen by 50% above the ment.

forces

the
application of subsidies as
cost of living by 33%.
For the
United Kingdom the correspond¬ well as in the application of price
high prices had to be paid.
control (see graph) was that suf¬
In the third place, account must ing figures are 80 and 33%.
The
ijbe taken of- certain important in¬ indexes of British and American ficient supplies should be avail¬
able to the public under the ra¬
ternational
aspects of the price import and export prices show in¬
control problem. If there is a fair creases varying between 60 and tioning system; otherwise the pubmeasure of stability in the general
100%.
In
some
respects
the lice would be driven to black
level of prices on world markets, largely uncontrolled price quota¬ markets and the workers, by de¬
it may not be too difficult for an tions applicable to transactions in manding increased wages to en¬

though

result-of

L*

v

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4528'

nliilnln nliilnln nliilnln IJIU.'ilLU

1943 1944 1945

•

1946 194/

80

~\'

THE COMMERCIAL & FINANCIAL CHRONICLE

1558

ICC's Failure to Raise Rates

.

freight rates were fixed simul¬
taneously, there would be some

an

statesmanlike principle, based on
elementary bookkeeping!
Would

be¬

that the ICC would 'apply
this
principle. Would that Under-Secretary Schindler would use the

reasonable

Important Cause of Market Decline
(Continued from page 1530)
6.30% return, but the industrials

a

only
4.14%.
Prime
rails
like
Louisville & Nashville ahd Great
Northern yield 7.00%. Why does
the ICC delay in granting neces¬
adequate increases?
Is it
waiting for a catastrophe?
As

sary

Fairman

B.

Dick

told

the

House

Judiciary Committee in 1943:

VIn

April, 1931, the ICC regarded the
railroad situation
reduction

a

in

strong that

rates

Before

ranted.

as so

the

1931

of

the ICC reached the opinion that
the situation was desperate. Dur¬

ing the short interval before the
Supreme
to

Court ordered

reconsider

its

what

smaller

the

ICC

views,

the ex¬
treme optimism had been replaced
by extreme pessimism."

$500

was

on

some¬

traffic,- the net in¬

$897 millions. But what
happened to wages in this period?
The average
hourly wage rate
come was

was

67c

in

1929

78c

and

in

1941

and $1.11 in 1946. Traffic is at the
highest peak of any peace year.

The

National

Railroad
sioners

Utilities

and

asked

that

of

Commis¬

the ICC

post¬

until after Dec. 15 the hear¬
ings scheduled for Sept. 4, to en¬

pone

able the railroads to estimate bet¬
ter the volume of postwar traffic.

It also

"requested that 30 speci¬
fied railroads be required to file
estimates of carryback credits for
1946 and 1947 and suggested

that

the Treasury might have to pay a

billion
rates

dollars,

were

because

not raised."

is not official but
.

a

This request for

freight

This

operations
handle
be

this

fall

railroads

The

all the

offered

curtail

or

and

winter.

simply
traffic

cannot
which will

them

during coming
months."
By Government bun¬
gling and delay in acting, the rail¬
will

roads
boom

such

end

a

of

year

traffic with deficits.
From 1945 to

1946, net
by $317 millions

shrank

for the

by
an estimated $465 millions for the
full twelve months, showing def¬
icits both for the five months and
for

full

the

twelve

1946,

year

months.

the Class

For

1

the

rail¬

roads will not cover their interest

charges, including roads just decapitalized in bankruptcy. Some
will

roads

not

cover

even

their

operating, expenses. Is the ICC
deliberately trying to create a
new wave of
bankruptcies? r
•

IV

possibility;.
delay was en¬

ICC

Unsound

Obviously, there is something
with our procedure.
On
the railroads, the setting of wages
lay to October 1st to file briefs,
is segregated from the setting of
but the ICC granted until Oc¬
freight rates. The ICC fixes the
tober 25th. Thus, any freight rate
rates.
An
emergency
board,,: a
increase can hardly be put into
fact-finding board of some- other
effect
until
January
1,
1947. Government
appointed tribunal
Meanwhile, a billion dollars in
virtually fixes the wages by apr
overdue but ungranted rate in¬
proving all or mqst of the union
crease is.a drain of about $3 mil¬
demands. At present the Govern¬
lions per working day. Either the
railroad stockholders or the United ment, yielding to railroad union
pressure,
fixes railroad
wages
States Treasury will have to carry
virtually under political threat.
thg burden. But can the ICC ex¬ At times Presidents have granted
plain why a billion dollars of car¬
increases
when the
unions
re¬
ryback should be taken out of the
jected an arbitration award.
Treasury to subsidize farm and in¬
The wage increases are
gen¬
dustrial shippers whose incomes
an
have risen handsomely? Hearings erally - made t -retroactive !to
earlier date, near the date of the
are being held now in
Washing¬
union demands. Thereafter,
ton. Let the proponents of
delay
when railroads petition for an in¬
answer this question.
crease in freight rates, the
Gov¬
III
ernment invites the customers of
the railroads to hearings to ask
Wave of Bankruptcies Imminent
them whether they would like to
The head of the RFC once told
have freight rates increased and
a
Congressional committee that
by how much. Rarely is the in¬
we have more facts
and statistics crease in costs
adequately cov¬
about the railroads than
any other ered
by the increase in freight
industry
and
that, what
was
rates: The resulting responsibility
needed was, not more
investiga¬ is not assumed by the Govern¬
tion, but action. The following
ment, but is thrown on the man¬
statistics come from the records of
agement. Technology then saves
the Government and of the rail¬
the day. Engineering, inventions
roads. For the first seven months
and managerial efficiency reduce
of
1946,
the railroads
carried deficits.
/
about
325
It asked for

de¬

a

y '.'j!

of

Committee

Railroad

that

1938

commis¬

"the

shall

permit the establish¬
ment of rates which will sustain
an
adequate transportation sys¬
tem; maintain credit to attract
essential capital, and afford fair
treatment to investors." Yet, since
1938,

bankruptcies ex¬
ceeded
the
highest
figure
in
American history. Will the ICC
heed
these
principles
of ratemaking , in fixing final freight
The

;

alternatives

clear.

are

the private investor gets

deal,

he

a

If

square

will

put up additional
capital. Only thus can the rail¬
roads
modernize,
expand,
and
create opportunities for employe
ment.

.

The

'

•

Government

power,

dodges the

but

'

v

the

assumes

responsi¬

wrong

'

ton-miles

of

If, as is usual, railroad freight
rates are raised inadequately or
late, the investor foots the bill.,Is
this a rational policy from the
point x>f view of the public inter¬
on about the same
volume of traf¬
Is
it
sound
bookkeeping?
fic, Individual roads fared worse. est?
Selling prices must cover costs.
The Baltimore &
Ohio, Chicago
Certainly, costs may not exceed
North Western and
Pennsylvania
Selling prices for long. Otherwise
railroads,
representing
respec¬
/•
tively a marginal road, a reor¬ bankruptcy must result.
It would be easy to bankrupt
ganized road and a blue chip, did
not
cover '
operating i expenses, any company if wages were raised
even though
the: Chicago North unconditionally by. one part of the

traffic

and

showed

a

defieit

of

$58 millions, as against a net in¬
come of $131 millions in 1936
and
1937 and $135 millions in
1931,

Western

*

drastically decapi- management and if thereafter an¬
talized, The? Pennsylvania had in- other part of the i management
would; hold }■ hearings amongthe
vestment
income which
helped
was

cover 'part of the interest
-charges.
New York Central, a railroadLstill

solvent, and the Milwaukee, ! just

through reorganization with great
decapitalization,: did not cover
interest charges.What ■ statistical
rabbits is the ICC awaiting? Why
does it heed these groundless^ and

customers of the company , to- in¬
quire whether they would likes to
pay higher prices, v:.In4-all other
than regulated business there is
unified power to fix both costs
and selling prices. These are tied
to each other.
.

v

unwise pleas for delay?
Or let

us

examine

results. For the year

timated

ton-miles

a

Power
full year's "j

1946, the

will

total

billions and the net income

a

es¬

490

def¬

Power

Involves

y--/,::
Responsibility

and

responsibility must
unified. Rates should be
adequate to provide a "fair re¬
also

turn"

be

on

the investment. This

was

icit of $18 millions. But for the the principle of the Esch-Cumfull year 1941, on about the same jmins Act of 1920. This provision




one

other.

it

The

would

unions

with

out

the

wages

other

or

costs

authorized

by the OES

(Office of Economic
Stabilization).
r•' .

Labor Should Protect Its Industry

yIntelligent labor leaders recogze'[ this principle.
When
the
clothing manufacturers had defi¬
cits, Sidney Hillman actually re¬
duced piece rates and tried to de¬
vise

to increase

means

ity.

productiv¬
the > Amalga¬
Bank, the union's institu¬
actually loaned money to

Furthermore,

mated

tion,

manufacturers

to

tide

them

over

period of deficits. But railroad

a

labor leaders show

vision.

They

are

no

"featherbed"

more

"make-work"

such social

demanding

now

VIII

Low Return

v

com¬

Commerce

reports
the percentage change in profits
;

after taxes for 960 corporations in
21

groups, for the first quarter of
1946 over 1945. The best group

showed
about

increase

an

130%,

showed

but

decrease

a

100%, the

lowest

dustries.

What

profits of
railroads
of
almost

of the 21

in¬

/.

the return upon the

was

aggregate
For

in

the

the

investment?

property
1931

to

years

railroads earned

a

1935,

1.55%

the

return.

For the years 1930 through 1939,
the return was 2.05%. For the

1945, the return

year

imately 4.92%
1946

should

was approx¬

for

and

the

year

be

only 2.30%, un¬
less the ICC acts promptly. Is this
a::fair return on capital "to sus¬
tain an adequate transportation
system, to afford fair treatment
tcrnnvestors

and

tional capital"?

attract

to

addi-.

What is the ICC
;

rules,

devices.

In

or

1938,

were

millions.

railroads

1947.

and

The

flim-flam

take

the

leaders

ton-miles

450

To

billions.
of

over

an

in

1945

offset

estimated
increased

$2,000 millions, the

railroads'ask for (an increase of $998

millions.
is

This
about

increase per tontwo-tenths of one

(0.2c). The&zrverage haul in
United

Staf^. is about 498
miles. The increase, therefore, for
such an averagefhaul would be

to the investor to

up

loss."

Railroad

union

might

well practice Mr.
Hillman's self-restraint and pru¬
dence.

:V

*

VII

Wanted—Integrated
Our

Policy

national

Delay Inexcusable
The ICC procedure of delaying
the obviously necessary rate in¬

coal and steel industries into pay¬

ing wage increases without simul¬
offsetting price increases.
are the railroad freight

taneous

Not only

rates controlled by the ICC but,
apparently, also, railroad manag¬
ers'

billions of railroad

in¬

powerful pressure groups
the proceedings.
The

unions

workers

of

dominate
labor

dominate

minds.

:

.

The ICC should prorhptly
rai§#
rates by the full amount that the

rialroads ask. The ICC could then
the

order
the

railroads

increased

final

a

impound
subject to
.State
Utility

decision.

Commissions

practice.

to

revenue

often

this

follow

The ICC could later

duce such rates

as

seem

re¬

to be too

high,

;
Not only the railroads are af¬
fected by rate increases. General
industry is affected. A leading
economic service lists among fac¬
tors
disturbing < business
confi¬
dence "the postponement of ICC
freight rate hearings." The rail¬
^

roads wish to make great expen¬

ditures for additional rolling stoOk
and expansion and modernization

tinuing
not

a

require con¬
earning > power,

definite
tax

mere

carryback

the Treasury for one year.

-

from
;,

If the ICC continues its delays,
improvements will
lag on the
railroads and unemployment will

railroads

to

cost

increased

cover

of wages and

supplies is equal tp,

but better thafn, a PWA financed

The "multi¬

by Treasury deficits.

plier" has been working. This de¬
layed rate increase of $1,000 mil¬
lion has caused a shrinkage in
market value of more than 10
times

as much.
A prompt grant¬
ing of the rate increase would be
as
stimulating as a PWA, but
more confidence-inspiring.

The economic life of the

try

is integrated.

are

not in

from

the

vacuum

a

rest

coun¬

Railroad
or

the

of

rates

insulated
economy.

this
integration is revealed when-the
State
Commissioners
and
the
What distressing ignorance of

Traffic League plead for delay

in

raising freight rates and when the
ICC consents to the delay!

,

vestments?
Two

automobile,

has proved to be funda¬
mentally unsound. All facts avail¬ !; Profits make an economy work.
able! justify raising freight rates Deficits stall an economy .V Tfce
simultaneously with an increase ICC has no. shred of justifica¬
in wages. There is not a single tion for delay.
It should raise
industry in the United States rates promptly.
i"
about which so many statistics,
^ xi
both Government and private, are
available. Bookkeepers!
Freight Rates Must Cover! Costs
bankers
creases

policy on rail¬
roads must be integrated. Hear¬
ings on wages and freight rates
should be held concurrently. The
investor is powerless. His voice is
and business men know that sell¬
rarely heard. He is never invited
to appear. At a freight rate hear¬ ing prices and costs are related.
ing he may occasionally crash the They study the income, account.
gate. He is tolerated as an inter- Both in tiie United States and in
the Soviet! Union, every
enter¬
venor,. as the lawyers call him.
But at a* wage hearing he has prise, whether privately/ oij State
owned, must have net income.
never appeared. Though railroad
In
the
investors are actually the owners
automobile, coal and
and
employers,
it is
doubtful steel industries, the managers re¬
whether any railroad wage board fused to make a wage settlement
would even permit them to ap¬ until the OPA made a price set¬
pear to protect their interest. Why tlement, They stood firm. So also
do not the insurance companies stood firm the Board of Trans¬
and savings banks appear to pro¬ portation of New York City, when
test their

the

a

for
this
brotherhood,
"Ability to pay is not a $1 per ton, or iSF'for 20 pounds
one-twentieth
of
lc
per
proper
element of consideration and
in fixing a fair wage."
In the pound. Surely, this will not cause
1941 hearings the union spokes¬ inflation or burden the consumers'
men said that
they "did not care budget! v/'.7-v
X
where the money came from and
was

agency

could

stated:

that it

retroac¬

cannot

become

actually 540 billions and for
will be

costs

Within

may

1946 and 1947

the

lawyer

$300

the

year

cent

the

be

Government

No

follow in the industries supplying
railroads. Purchased by railroads
of'materials and supplies were
financially embarrassed,: not be¬ $1,500 million in 1926 and 1927 as
cause there is no traffic, but be-:
against $600 million in 1934-5," a
cause rate regulation has become
shrinkage of $900 million. Artifi¬
a
cumbersome, bungling and ir¬ cial deficits created by the ICC
responsible procedure, bound with hurt the entire economy. By de¬
red tape.
:: v
laying the needed rate increase
the ICC has already reduced pur¬
Inflation Not Entailed
chases and* modernization plans
', a
,'The proponents of delay ask by the railroads. Unfilled orders
the ICC to obtain estimates of by railroads declined. This criti¬
traffic. But three months earlier, cal index is watched by business
the railroads
had already
sub¬ men as a forecast of depression.mitted their
estimates for
The
1946
$1,000 million asked by
clined

the railroads have not the money
is not our problem." Mr. Hay, the

of

rates

of facilities. This will

-

ICC's delay? The net working cap¬
ital
(excluding inventories and

Brotherhood, said: "The fact that

Whitney

re¬

price settlement, for

a

tive.

Capital

on

pared to other industries? The De¬

partment c: of

mile

F.

»

permanent OPA.

a

settlement until the

wage

railroad

How did the railroads fare

Trainmen

A.

a

ICC makes

This ^ principle supplies) of all Class 1 railroads
was
recognized by the Federal has been shrinking sharply. On
Government
when
it; dictated Dec. 31, 1945, it was $1,650 mil¬
business policy during the war. lions and by May
31, 1946," it de¬
OPA had authority to raise
selling prices to cover increased

sense!

fuse

v

waiting for?

The

is

tectedl.^

x%WHat has been the result of the

This reveals
not cunning but stupidity.
Selling
prices and costs should be fixed
wages.

common

The ICC

The railroad managers should

bility, with respect to both selling
and

same

farmers.

prices

-

billion

on

The investors would thus be pro-

railroad

rates now?

unions

simultaneously.

|

Procedure

; v^v;#V

;

President Roosevelt's Joint

first five months and

sum

dorsed by the National Industrial

Traffic League.

the requirements of

sion

shut down

income

Association

to live up to

factories

to

the

battle

the British railway-rate tri¬
bunal made an honorable attempt

the legislation.

the

side and the farmers and shippers
on

ever,

recommended

increases?

Costly Delay

subsequently repealed. A similar
provision was incorporated in the
British Railway Act of 1921. How¬

stated that "the impending trans¬
portation crisis will compel some

Why the delay in granting rate
II

was honored in the breach rather
than in the observance and was

ODT Director J. Monroe Johnson

war¬

was

end

traffic, the net income
millions, and in 1929,

labor

of forces

balance

tween

<

Thursday, September 26, 1946

the

wage

hearings. The farm and shipper
groups dominate the freight rate
hearings.
If
both
wages
and

over

demanded

an

increase

$17 millions. "A source of

.

v

,

>;

The pending

increase in jail-

road freight rates
cause

it

will

„

is opposed be¬

cause,

inflation

will divert traffic from the

apd
rails.

However,, the
facts > speak' for
themselves.! Freight rates did riot
initiate
or
participate
in V the
great price rise since 1941. They
remained stable. But if increased
costs

are

to be met,

increased.

The

rates must be
railroad

recent

increase totals about $675
on
top of increases an
1943 totaling $694 mil¬
lion. From 1939 to 1946, the aver¬
wage

million
1941

age

and

straight-time hourly rate rose
From

1941

through

funds for the wage increase must

51%.

before the
Board of Transportation can com¬
mit the City to such increased ex¬
penditure,"
resulting from the
wage increase.
What asound,

1946,

railroad operating costs

necessarily

be

found

by $2,029 million.
now

to

ask for

an

increased
The railroads

increase of

yield about $998 million.

hnlnnro

nf the* inrrpasprl

rates

The

rnst.s will

Volume

amount to more than

traffic holds and
not.

to

This

be

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4528

1641

$1 billion if
if

more

it

does

difference would

by

overcome

average hourly wage rates rose
from 62c in 1926 to 74c in 1939.

have

XIII

engineering

and managerial efficiency.
'
An increase in freight rates

v

Simultaneously

is

needed to cover these increases in
wages and material costs.

quested

20%

The

re¬

increase in rates

is

insignificant as compared to the
rise by Aug. 14, 1946 in farm
prices of over 200%, and in raw
material prices of over 100%,f; The
farmers cannot object to a
rise in rates. The prices received

by farmers

faster

rose

than, the

prices paid by farmers. As
sult, this ratio has risen
above

a

re¬

43%

1939

by June of 1946, and
higher by the end of Au¬
gust. Besides, farmers enjoy both
large crops and high prices.. ■
Industrial shippers can afford
much

My recommendation that wage
and freight rates should be

fixed

simultaneously and

other, is not

new. There is a prece¬
After the last war, the rail¬

roads

themselves

found

risen

51%

risen about 57 %
to
for. wage increases.
On June 30, 1946,

compensate

freight rates
were the same as in June,
1939,
and since then, the ICC granted
an
emergency increase of 6V2%.
This merely restores the tenta¬
tive freight rate increase of
4.70%
authorized by the ICC in March,
1942 and suspended in

What

the

was

crease?

origin of this in¬
1941, railroad wages

In

increased

were

for

retroactively

by
The railroads peti¬
compensating 10%

$360 million.
tioned

a

increase in rates.
ed

May, 1943.

retroactive

can

rates; but no one suspended the
increase in costs,

Solution
Government

gested

ownership is sug¬

But Government

increase.

-is borne by the stock¬
holders or, if bankrupt, even by
The deficit of

borne by

port.

to

forms

This argument

without
ate

other
basis.

a

trans¬

tb be

seems

The trucks oper¬

the public

on

of

highways.

But

the railroads operate on their own

private right-of-way, paid for and
maintained by themselves.;
Yet,
the truckers have long been com¬
plaining to the ICC that they
cannot compete with the railroads
at

yhe present rates.

with the ICC

to

They plead
compel the rail¬

roads to raise their rates in order
that the trucks may survive. As
for1

ships,

the recent sharp in¬
in wage rates per hour, re¬

crease

sulting from the seamen's strike,
has made the United States War

the taxpayers. f
>..
There is no magic in Govern¬
ment ownership. -Even) the «ICC
admits this. Its report of Jan. 21,

Shipping Administration and the
U. S. Maritime Commission
plead
with the ICC to compel the rail¬

raise

where

rates

taxation."
its wise

Let

note

now

opinion then.

Again,

ship,

ICC

the

the

with

cannot move them at

loss.

a

for

under private
Government

.

'-^(Continued

to

much«0fr:^the

But

it.-

do

creates

the

"inflationa|y|

sure".

One of the chief

owner¬

is,

or

interests.

The

Govern¬

the

Government

becomes

is left. The
Government becomes a partisan
in the fight of the labor lobby
the candidates in the next

versus

election.
the

the

So

bill.

foots

taxpayer

must
cover
costs.
Therefore,
freight rates must be increased—

and

soon.

'

;'

-

We

for a period when, due to ex¬
ceptional circumstances, such as
the

the law of supply and

war,

demand does not work. We must

continue

prices

I

still

are

|

^

is what

;

the "government

itself

is

doing

;

Levels Must

As far

as

taxes

Bp Maintained
are

concerned,

td achieve

budget and

a

railroads

have

1921

been

effi¬

to

1939, the av¬
erage
charge
per
ton-mile
of
frdight decreased from 1.275c to
0.973c.
In 1939, despite years of
deficit induced

by depression, by

low volume of

building construc¬

tion

and

railroads

of

heavy industry,

reported new high

ords for all time for
in the lowest
per

ton-mile

average

ber

of

and per

the
rec¬

efficiency,

as

consumption of fuel

of

traffic,

highest

train speed, highest
ton-miles

per

num¬

train-mile

freight train-hour, while




future.

the

his

and

sound

reduce Federal

us

ex¬

sible,

to

and

debt
a

immediately, to bal¬
budget as soon as pos¬

the

lower

the

public

whenever

possible.
that affords

program

couraging

This

is

en¬

an

atmosphere
to ; our
system of individual

American

reached

the

point in

and

and

more

solution

term

demand

must

we

6f

em¬

the long

more

bringing supply

into

better

balance.

The government in its program

mean

expenditures

the

budget
Decreased

lessened

in short

and

In

the

of

course

expenditures,

cutting down
should like
to

I

think that the government is set¬
an

think

its

expenditures

demand

goods

on

supply.;),yiMkkiSkkkkWk

President

Truman

emphasized

recently

that the executive
branch must cut its expenditures
even below the amounts
already
authorized

by the Congress. This
is a very important contribution
to combating inflation which the
government can make today.
*

do

Expenditures should be cut

a balanced
surplus to be used
to reduce the public debt. I know
you
will agree
tpat the debt
should be cut as much as possible
in exceptionally prosperous times
as

Now

first

government's

responsibility, definitely, is the
balancing of the budget. When I
took office as Secretary of the
Treasury, I stated that it was the
responsibility of the government
to achieve a balanced budget —
or

better

or

not

1947

is

a

—

for

1947.

balanced

possible

has

Whether

budget

yet

for

to

shown. But the Administration

bending
end.

every

everything

at

once

within

to curtail his

for

in

goods

his
own

scarce

gigantic

a

effort and it would have gigantic
results. This would be curtailing
it

"inflationary pressure" where

counted

most.

This

would

ages. This

would

have short

we

lower

in critical fields so that

increasing

supply

demand
our

would

ever

sooner

match that demand.

Just
do

as

individual should

every

all in his power

purchases

of

to cut down
items so he

scarce

should put all the money he can
into United States
This
ent

will help

Savings Bonds.

to meet the

pres¬

problem of inflation and the

individual will

thus

improve his
own
security. I urge our people
to invest heavily
in all sound
forms of saving and particularly
in the

purchase of United States

Savings • Bonds.

as

Clearly

.
„1 *
satisfactory

^ f,

the

most

.

increase the supply so that it can
meet all comers. That day will

services

and

maintaining

national security.

our

actions, will take in

more

money

this year than it will spend.

Thus, for example, most of the
terminal
over

be
is

effort • toward this

leave

pay

that

—

$2,000,000,000 of it

—

is,
will

to

the

problem

bal¬

of

And when it comes, if we
maintained our mass pur¬

come.

have

chasing
able

what

it

is

today, our
standard of living will be much
better than any we have ever had.
Due chiefly to the vitality of
our

system of free enterprise,

have made

a

we

successful transition

the

ending of the shooting
war to the beginning of the peace.
Looking back over the recent
months, I am sure that we will
find

have done the

we

job well—

interest

made

•

We do not promise you an eco¬

But

is treated

throws

as

budgetary

a

But it will

the

value

and will not

the

be

expen¬

actually
of

the

go

to

bonds,

paid out in cash

bonds

redeemed.

are

made

who

cash
these

be

transaction.
and

what

erating

we

some

As

majHeall

surplus
The

will, of course,
that

to
a

about
a

non¬

result

of

otherAiteips, there will

000,000,000.
at

which, in the

represents

date;

they

>

do

cash op¬
of
almost
$3,non-cash items
a

have to
But

not

be paid

it is helpful
involve cash

outlays to the public at this time.

a

we

are

repeat

here you were

was

in

man

most

the

White

House

not

stop doing things; al¬
everyone says the govern¬

is terrible, but almost no
seriously suggests doing much
of anything about it except com¬
plaining; and along you roll ir-i
rationally, irrelevantly, ■ and yet
vastly
more
prosperously
and
cheerfully than,any other people
ment

one

earth."

on

America

will

go

forward

its

great

history.

ward

and

will

We

break

our

go
for¬
previous

records of

production, of employ¬
ment, and of income.
We have always been willing
to accept any challenge to human
betterment, and we can succeed
again today because we possess
the power and the

confidence
can

forward

go

with

full

patience.

with

assurance,

continue

we

philosophy, the

the

and

to

face

We

hope and
as
long as

the

facts.

Goal

Production Rose

During Sept. 14 Week
The Solid Fuels Administration

Sept. 24 estimated bituminous

on

coal

production during the week

ended

Sept. 14 at 12,700,000 tons,

compared with

160,000

tons

an

in

output of 11,the
preceding

week

12,565,000 tons two weeks
and with 12,320,000 tons in
the comparable week of 1945.

ago,

The

cumulative

soft

out¬

coal

put for the calendar year through
Sept. 14, 1946 was estimated at
364,626,000 tons, which was

de¬

a

of 12.4% below the 416,408,000 tons mined in the similar
period of 1945 through Sept. 15.
crease

the

In

fields

Pennsylvania anthracite
output for the week ended

Sept.

14

approximated

1,255,000

tons compared with 1,032,000 tons
for the preceding week, 1,278,000
tons two weeks ago, and with

144,000 tons mined in the

1,-

corre-,

sponding week in 1945.
During the calendar year
through Sept. 14, total production
of

hard

coal

was

<

estimated

42,445,000 tons, which
of 9.7%

crease

was an

at

in¬

above the 38,687,-

000 tons mined in the

comparable

,

portion of 1945.

side-light

upon
'

a

four-

United

asked his

"The United States remains the

only place on earth where every¬
thing can be completely screwy
and almost everyone can still get
along quite well.
"You have buyers' strikes and
new sales records marching along
tion

hand; you break produc¬

records

breaking

while

records

The- American

workers

for

Institute

this

Iron

week

i

Steel

and

announced

that

telegraphic reports which it

had

received

indicated

that

the*

operating rate of steel companies*
having 94% of the steel capacity
of

the industry will be 90.4% of
capacity for the week beginning

Sept. 23, the highest rate for the
post-war
with
ous

a

period.
This compares
rate of 89.1% for the previ¬

week,

the

and

week

89.4%

for the week
9,
84.5%
forbeginning Sept.
2

88.5%
Sept.
for

the

week

be¬

record

principal im¬
pression. He replied:

hand in

Operations at 90.4%

Highest Since End of War

our

all human.

just finished
trip
across
the

was

Steel

*

be

story which

a

had

States

amounts

White

ginning Aug; 26.
For the week
beginning Sept. 24, 1945, the in¬
dustry was operating at 83.6% of
capacity. The previous post-war

to

According to one of our weekly
magazines a visitor from England
month

$600,000,000

me

continue

American character.

ment trust funds

aggregate,

since

—

let

Also, interest earned by govern¬
—

will

and

accruing
on
bonds, which amounts to about
$700,000,000 for the fiscal year,
diture.

that

would

beginning

desoite the many crises.
nomic Utopia. Mistakes have been

increase

the

anything, while

unanimously complaining that

as

level compar¬

power on a

to

not be paid in cash, but rather in
terminal leave bonds.

Also, the
savings

the last time I

complaining

in

ancing supply and demand is to

from

Non-Cash Items

fellow

House doesn't do

re¬

strain the bidding up of prices in
those fields where

solution

until

these.-

the

individual

every

sharply as is compatible with ren¬
dering
the
necessary
govern¬

gress

such

that

supply. This would be

bal¬

doing

is

of

time

your

that

enterprise.

the

Policy

that

system of free enter¬
prise, which has written for us a

penditures

Any

:

is necessary

From

program to

a

expenditures

convinced,

Con¬

to .invent "featherbed" devices to
destroy America's leadership in
low freight rates and high wages.
The

in

in

of

most

under

pledge to do all

better

President

will

the Treasury's part is
recommendations.

foijloihe.- ' time. This

cient.

Our

and

greater supplies of almost every¬
thing and greater shortages of
everything tag right along to¬
gether; politically,
you
put in

Yes,

capable leadership has set for

to

fin

maintained

.

have done

we

mental

ahd| demand
balanqejlin some

of

commodities.
Here

regulation of

supply

out

have

am

phasize

little while longer. That

a

because

is

direct

the

The unions have not yet been able

to

year

example that will be fol¬
by every individual
throughout our land. I should like

battle against inflation where,

our

ways.jjy which part.

inventiveness,
engin¬
eering and managerial efficiency!

American

"feather-

tribute

a

better

Policy

Budget

ancing

will legislate the tax laws. I
believe, and I tfiirik that the Con¬
gress and the / American people
believe, that for our common good
our
present tax levels: must be

worst

But

over.

For my part, I

ting

,

1534)

page

pres¬ reducing

version, was by direct restraint
on* prices through governmental
regulations. This is desirable only

course,

the

fiscal

The President's Program

ance

-

-

Experience with
Government
operation of the railroads in the
first World War does not justify
Government ownership. The right
answer is to operate the railroads
as a self-supporting enterprise. It
must pay its way.
Selling prices

time

thus

and

make

What

in

Naturally, there should have
been
an
improvement. For the
war, as far as the gunfire is con¬

in my power to make our record

from

inflation-during the
far during recon¬

fought

we
war

of

bedding"!

$21,000,000,000 in the fiscal year
and the deficit

which just closed
of $54,000,000,000

most people expected.

-SM,

to

world—and

January. At that time the deficit
estimated
at
$4,500,000,000.
Many of us had hoped that the
improvement
would-be
even
greater. But what a tremendous
change it is from the deficit of
was

cerned, is

they find that manyvQf .thie goods
they seek are not available. This
enormous demand coming1 against
the
severely
limitedyS u p p 1 y

world per ton-mile

hour in the

last

made

much better in actual results than

ready to make original pur¬
chases, and have~the*swtierewithal

United States has not only
the lowest rail freight rates in the
wages per

great improvement

a

estimates

the

posing

q^?j|bods and

worh^

replace

'

highest rail

000,000, it is
over

ment, however, usually decides in
favor of the contestant controlling
the most votes or having the best
organized pressure group.
But

Imminent Fiscal

The

but, also,1 the

pective budget deficit of $1,900,-

power

Tax

'

of us likes the pros¬

should be, an umpire between op¬

The1 Government's

com¬

waterways.; As

none

1945.

the
battle C; Early in August, the President
air transport, despite heavy Gov¬ against inflation. First,ywe are released revised budget estimates
ernment subsidies; air cargo is curtailing expenses. -Second* we for the fiscal year 1947, estimat¬
are
limited to valuable, compact mer
urging the holding of the ing the budget deficit at $1,900,chandise, such as jewelry, flow
present tax line in order to create 000,000.
Considering that there
a
ers, etc.
Coal, lumber, steel, ce
government surplus to pay off are certain non-cash expenditures
included in the budget, the gov¬
the public debt.
ment; and brick must move chief
V
ly by rail. But even the railroads
ernment, in current cash trans¬
peting

While

lowed

,

roads-to

a

is

business

Government-owned

costs, but provide profits
large enough to attract the neces¬
sary flow of capital. There is no
escape from this conclusion. And
even
a
sound system of public
ownership and operation requires
earnings sufficient to cover all
costs, including interest on debt,
and prevent a burden on general

are

Another 1 argument
against
a
rail freight rate increase is that
shippers
will
be
increasingly
driven

owner¬

company

.v

Would Not Divert Traffic

rate

a

ship will solve no problems. No
matter who owns a property, it
cannot long operate at a deficit.
The deficit of a privately-owned

the bondholders.

all

the owner, no umpire

alternative to

an

as

which will not only

revenues

This, of course, is a contribution
to the battle against inflation.

when

any

XIV

to

1

was

Jan.

Government Ownership No

The ICC grant¬

5% and not retroactive. The ICC
suspended the increase of freight

to

1, 1946.
business prosper un¬
der such misregulation?
How

increase averaging less than

an

the

1947, but the wage increase
made

from

Jufie, 1939 to June, 1946. Since
1939, the price of automobiles has

in

plight as today. In 1920, the
freight rate increase was granted
nine
days after the- wage in¬
crease.
In 1946, the freight rate
increase may not be granted until
same

pay the increased rates.
Ma¬
terials and supplies bought by the

have

should

bear some casual relation to each
dent.

have

cover

rates

to

railroads

A;

Wages and Rates Should Be Fixed

1936, sent to the President and the
Congress, reads: "So long as we
depend on private enterprise for
transportation, the carriers must

1559!

are

striking;

was

90.3% for the week of

Aug. 12, 1946.

•
'
'
operating rate for the week
beginning
Sept.
23*
1946,
is
equivalent to 1,593,200 tons of
steel ingots
and castings, com¬
pared to 1,570,300 tons one week

The

ago,,

1,559,700 tons two weeks ago,

tons

1,489,200

three

weeks

ago,

1,575,600 tons one month ago, and
1,531,200 tons one year ago.- Cur¬
rent production

will be the great¬

est since the week of Aug. 6,

when indicated output was
000 tons.

■

1945,

1,610,-

THE COMMERCIAL & FINANCIAL CHRONICLE

1560

Thursday, September 26, 1946

economy

of Economic Stabilization
time

.V ;■ (Continued from page 1535)
'little

practical

this

morning,

to

lift prices to a level they had at¬
tained in 1926 and then by a sys¬

be¬

consequence

cause measures

review

to

and policies which

of

tem

"might possibly be brought into
play to counteract the excesses

there

controls

for

to

generation.

a

them

freeze
-

•.

•

*

ernment, to prevent violent busi¬
fluctuations

ness

have

successful. If the facts

been

un¬

other¬

were

wise the government at

this time

would be concerned neither at the

forgotten, when possibilities of sharp reaction or
the ^processes the more immediate prospect of a
are most invariably
held in abeyance. From the politi¬ that had made for declining prices very violent inflation.;
cal, point of view business cycle throughout most of the decade of
Can Prevent Business fluctuations
control is desirable only when ef¬ the 1930s were reversed and prices
If government, particularly
forts are bein- made, on the one rose well above the 1926 level.
democratic government, is not so
hand, to expand enormously the
Theory of Government
constituted as to be able to pre¬
Volume
of
production and em¬
Compensatory Action
*
vent violent fluctuations in our
ployment and, on the other, when
The second major business cycle economic life with all the hard¬
something is suggested or under¬
taken to prevent their contraction. control theory and policy of the ships they entail must we con¬
clude * that nothing can be done
The Washington government has government, in recent years, was
been fearful of reaction from the that .the government by control¬ in these fields, and that economic
war-born boom almost from the ling the flow of funds, by borrow¬ history with its booms and de¬
must
be repeated at
time hostilities ended in the Pa¬ ing in times of subnormal busi¬ pressions
cific. While it has paid a good ness activity, and by high taxa¬ more or less frequent intervals as
deal of lip service to measures tion when boom was in prospect, long as our present economic and
could and should iron out sharp political system shall continue? ->
designed
to: ease
inflationary
I
think
not.
I
am
genuinely
pressures, it has consistently and irregularities in the curve of busi¬
ness activity by filling in the val¬
hopeful with the increasing under¬
persistently lent support to poli¬
cies which were predicated on the ley and leveling down the peaks. standing and knowledge we have
business
and
financial; pro¬
thesis*-that sharp reaction, rather This so-called compensatory ac¬ of
tion by the government, like its cesses that we shall be able to
than dangerous inflation, was in
price-lifting policy, was initiated prevent violent booms and equally
early prospect. /•.;;C
in time of depression and prompt¬ violent reactions from them, Cer¬
Take, for example, the admini¬
stration's
postwar wage; policy. ly abandoned when action on the tainly those of us who have faith
Reduced to its lowest terms its boom side of the picture was indi¬ in our free institutions and have

and

abuses

which

lead

But all that

boom

to

early

and inflation

in

the

was

and

political

walks

worst

ment,
guided

of that period that our
leaders, exercising (the
possible judgment,
liked
and hoped would, become perma¬

cated.:

war¬

.

plenty of
a

be sustained. -

'

-

them
threw

we

and

deflation which

now

are

So

of the war
compelled the government to take

inevitable

as

setting of the

which

lent business and
as

employment and wages
income, and through
them, the whole economy, at ap¬
proximately the levels which pre¬
vailed
*?:

when

the

ended.

war

-

The Full Employment Act

as

finally approved contained

was

provision for

the

members

But

did

the

-

government which

ing prices at the 1926 level avail
itself of this opportunity?
Was

it

the compensatory

a

principle which
adopted when business
activity was normal carried over
had

of

been

which have been

appointed within into the war period and its count¬
the last few weeks. I
thought it erparts—high* taxation and com¬
was an interesting
commentary on pulsory saving—adopted when the
the
economic
thinking of the signs began to point clearly and
president. that in announcing the
definitely to boom and inflation?
appointment of Edwin G. Nourse,
The answer in both ; cases was
a
distinguished economist, as of course, No,,

Chairman of the Council the presi¬
dent said, in effect, that his

prin¬
ciple responsibility in the newly

created

post

a Course

of action that would

an

would

be

to

chart

bring

early end to "booms and busts."

A few days later
Henry A. Wal¬
lace, Secretary of Commerce, who

in his

book

"Sixty Million Jobs"
bad missed the boat
completely on
the

/,

'

iSf Same Errors of Judgment
'r{.V;;
.

With

the

the

first

decade

minds;

i

;

economic

history

of

fact,

in

with

some

economy

seg¬

still feel¬

effects of the unsound
we had pursued over the
and postwar years, we pro¬
to

was

gov¬

aimed, to be sure,
Which, he. fears,

and industrial and financial opera^
tions of the second World War

ernment action
at- the

the

V;

;■

When to

It

'•/■•

morn¬

ing to forecast the course of eco¬
nomic events. It is rather to
point
out that if business cycle control
and
are

the

stabilization

ever

phrase

to

of

business

get beyond the catch
controls
must
be

stage,
not

at

be

to

believe,

maintained

reasonably

may

a \

long period.

relatively
•*

>

One searches almost in vain in
tlje business cycle controls initi¬
...

ated in this ™>unt.rv

action

signed to hold expanding produce
Uuw

ana

bounds.

rising

In

the

prices

early

Witmu

itur

1930s when

business /stabilization and cycle
were closely tied up 'with
the price level it was the stated

control

policy of the late President Roose¬
velt,
by rmonetary
and .credit
measures

which

I

do

not




of industrial

measurable

a

normal* in

are

rise

activity
in

time' &f *

price
and

war

ture. When account is take of the

whieht modern

to

ments confronted with

govern¬

abnormally

matter of
To be

course.

sure

■

'

/;

\

financing the ex¬
traordinary expenditures in ques¬
in

judgment

tion

in

these

errors

upon

clearly

will

and

for

our

facts that
established

failure

had

been

in

our

experience cannot fail
higher. How much higher
war

be

ment

determined

by the judg¬

we

have

But
much

you

the

may say I stress too
role of government in

stabilizing business. If I dwelt at
too great a length on the
govern¬
ment aspect of the problem it is

time of

construction
the

with

the

selves

in

of

same

the

fore.

than he had
And

government

efforts/ at least

efforts, of the American

gov¬

when

that
the

is

war

over,

of problems

presented

latter

part

of

them¬
of 1919

1920, and by
token, with the solution

many

had

ever

to

were

be¬

realize

V.

'

...

active production and trade,
only we will direct our effort
to? the production of more and
sure

better and

cheaper goods. This is
by way of saying that our political
leadership has gravely confused

for the last year, and in fact for a
decade
or
longer, the essential
.

features of

a sound
economy with
the surface indications of a sound

economy.

speculative

atten¬

our

if

pave

a

divert

firmly of the opinion that there
will be jobs enough for all who

by getting a tip on

•,;

2—We? must

in

;• -•*. ■

v

our

/;.

economy

the

way for the
elasticity
his and flexibility
upon which an ef¬
the' fectively functioning economy of
economic outlook the man who1 private
enterprise depends. Par¬
applied himself to his task and ticularly we must not be hemmed

stock

or

on

the

first

race

at

favorite track. In this view of

in

by government regulations

to

what

industry and self re¬
dull, or belonged to an
that had gone by.
;
was

was

his

for

a

of

out

who

the

to

took

bank

in

to

buy Florida real estate
quick profit or anyone of

a

hundred

several
on

inclined

individual

the

money

order

much

never

listed

securities

slender margin. I have

very

often wished I might believe there

pot of gold to
at the rainbow's end.

be found

a

were

Public Officials

:-;r:

Should

Know

public

sumed

to

Economics

officials,

are

pre¬

know

agency

facts

or

of

as

the -opinion

in

some

of some
individual £he

economic

our

life

ought

be. i:

to

3—We must control public ex¬
penditures and we must provide
by
taxation whatever
revenues
are
required to balance the bud¬
get whether the annual expendi¬
ture figure is $20 billions or twice

that amount.,

:

4—We must

••

begin thinking and

planning now about careful and
prudent management of the pub¬
lic debt. Such planning will entail
some sharp breaks with the poli¬
cies and philosophies of the last
ten

or

nomic

twelve

years

but the

eco¬

industrial

and

history of
country since 1932 scarcely
supports the belief that there is
the

anything

sacrosanct

about

any

policy adopted for the
purpose of lifting us out of the
great depression. In fact there is
much in the history of that period
citizens.
to indicate that some of the poli¬
However in the months immedi-*
cies of those difficult years would
ately following the end of the first
have to be sharply modified, even
World War our political leaders
led us to believe everything would completely reversed,' if 1another
somehow be, -different. While .the great' and protracted (depression
id to- be avoided.'
l^te President Harding delivered
—■*—■——»—> ty* f.
an inaugural address in behalf of
returning to normalcy, a
very
sound speech incidentally, mem¬
bers of his cabinet began immedi¬
measure

or

——

era.

One

of

them

said,

that it was wholly
unreasonable to believe that prices
ever

give

decline to the prewar

could not possibly
much ground because we

They
so

were on

a new

and different basis.

Equally unsound and dangerous
expressions-came from leaders in
the fields of business and banking.
And

to

be

to

climax and to
enormously the losses

cap the

aggravate

suffered

as

a

result of the

'

Municipal Bond Corp. |
Personnel Changes 1
ALTON, ILL. —The Municipal

Bond

Corporation,

Building,
G.

announces

Hohe

manager

has

been

Commercial
that Vincent
promoted

to

of the Alton office, add¬

office supervision to his re¬

ing

sponsibilities of investment

serv¬

to Illinois and Missouri

Bank

ice

accounts.

Mr. Hohe,

turned

from

the

S.

U.

much

of

so

in

so

recently re¬
service

overseas

Army, has

been

in

asso¬

many

positors and the credit of their in¬
stitutions behind this utterly un¬

,

our

us

economy was

disrupted

that

not

so

could

it

not have been reconstructed with¬

unhappy events that cul¬
in

in the

a

great

late

speculative

1920s

plete-

economic

1930s.

Not at all. > *T\r

1

and

collapse

com-

in
r

.

the
;

*

It

was

where

thus human frailty both

reasonably

one

might

ex¬

disposition to profit from past
experience that led to the boom
which was followed by reaction,

depression and finally the
banking crisis and a long period
depression. then

ing

an

a

territory embrac¬

in Southern Illinois

area

and Southern Missouri.

ler

Mr. Fow¬

recently returned from three

years' service in the U. S. Navy,

having been stationed in the Pa-*
cific

zone.

•

Hawkes Admits Kershaw:
Hawkes &

of

Co., 14 Wall Street,;

members of the New York Stock

Control the business cycle? Only

j

The trouble was that there were1

aspects of the disordered:wartime

ipal investment recommendations
to bankers in

sound view of the nation's future.

pect to find it and human frailty
and bad judgment where we ought
to be able to find wisdom and a

;,

In 1920

boom

the light of that' well-estab¬
lished fact it is in order to
say

../«: /

..

must

this promise of abundance not by
hard work or useful service but

ment

problems that confront

today.

minated

In

that

better

and the first half of

the

gov¬

primarily the result of
poliey.
-

ernment

the

Through high prices and high
iand large speculative prof¬
to have more and

wages

its everyone was

exercise

solution

kind

out the

-

...

1—We

..

have

events

uation:.

American

accurately economic

more

war.

Postwar Readjustments

seriously

perhaps,

should

bad judg¬
ciated with the sales department
directions - the
banking fraternity of the firm for more than ten
But in this discussion I am not
which; is charged with a very high
years/';:;"*.
concerned, > especially, with the
measure
of
responsibility, with'
A. Darrel Fowler has joined the
stabilization of business and prices
respect to the institution of credit
in wartime. My concern is with
sales department of the Alton of¬
fell into all the errors and literally
measures of orderly economic re¬
placed the savings of their de¬ fice and .will specialize in munic¬
!

because government for five years
has largely dictated the course of
economic events, or
been

invested

;

level.

•

the exercise of sound

for

be

future.

speculation in anticipation of still
further price increases follow as would

paid

to

on

funds, low to moderate individual
earnings—were no criterion of the

new

be

earlier

6%.

or

example,

to

so

5

the

ultimately

act

of

return

for

indebtedness, busi¬
acceleration, rising prices and

the

to

a

ness

a

I

few suggestions as
to the need of the immediate sit¬
a

wish to fill them, jobs
providing
plenty of purchasing power to en¬

monetize their

first

the

over

and

the

infinitely greater, magni¬

,

cause

acceleration

of

of

than

exercise, or fail to ex¬
top of the ercise, in dealing with critical sit¬
boom, or even at the bottom, but uations as
they develop in the
at or near a level
which, there is months ahead.'
; '
initiated

admitted, for purposes
of ; argument, that a considerable

those

were

Control

not my purpose this

is

-

Let it be

and/ in the use of the funds
provided for the task - at hand,
would pretty largely prevent eco¬
nomic and financial developments
of the kind we take for granted

tude

Initiate

•

stabilization

everything had been changed by
the war, that the landmarks by
which we had been guided in the
past—dollar wheat, if you please,

But

price

recession

impends.,..

boom.

of : business

like to make

were

something of the
■
facts of economic life. Certainly
Let us again turn back to the no one should be able to qualify
records following the end of the for the most modest public office
first World War and consider them without understanding the source
in relation to the human frailty of wealth creation and realizing
factor
which, I have indicated, that governments have only such
is at the seat of the modern busi¬ funds as they take from their
ness

by

tion from jobs and
money to pro¬
duction of useful services. I am

far

and wide in the world of business

make

nation

ride

line

War, and of the heavy expenditures resort to bor¬
following,* fresh in our rowing - through
means:
which ately to spread the philosophy of

taking, and called again for

economic

reliable

and finance.\

extent

ing the
policies
war

warning-of the boom and bust

actions

reflected

World

ments 6f bur

ceeded

issued

and. Policy

•

events

likewise

whose

are

,

substantially the
same errors of judgment and poli¬
cy we had made twenty-odd years
earlier. And because the military

a

others

and

decisions

greatly Increased public expendi¬

of postwar business and

course

economic

leaders
and

•

had set itself the goal of stabiliz¬

Economic Advis¬

an

Council,

ory

•

-

price fluctuation

they could be.

govern¬

will

sold (or should
say
we
sold
ourselves)
the
philosophy of the new era. Its
major tenet was that somehow
we

criticize

and exercise, controls over flowing from them can be very
such wide interest early qvery important segment of our greatly mitigated.,
v, * ,
in the
Boom
and
economic life,
depression as we
year when
our
over
labor, over
political
know them in the United States
leaders and some of our industrial materials and over; money
and
leaders were so fearful of far- credit. With virtually unlimited are man-made phenomena. They
re
aching unemployment and controls over all these factors of do not just happen. They are the
when jobs for 60,000,000 became our economic life the conditions product, I am convinced of human
a political catch
phrase. Like the were about as favorable for the frailty, of bad judgment exercised
administration
wage
policy the pirevention of abuses and excesses by producers, consumers, farmers,
full employment bill
public
officials,
labor
proposed to of the kind that precipitate vio¬ bankers,
money

values,

them at

every

inflated, that is,
with long term

were

of

out

sustain

by

I

I

over,

and

yardstick
were

age

sun.

tracted

maintain

important

continued to believe in the virtue

the

as

order, to

in

levels

liance

rising
They are
not inevitable. If they cannot be
completely
eliminated'; the
ills
were

all

of thrift and

up our hands in despair and de¬
clared that boom and depression

business

the

feared. The exigencies

,

again at • the
so-called
Employment Act which at¬

Full

making

and the

activity would
,
•£•/.;vi

•Look

•

in

stake

work would be remiss if

opportunity to
cycle and
thereby to forestall the recession

money

and economic

large

a

excellent

an

us

control

to spend and, as
result, the wartime level of busi-*

ness

,';;, *

^„

The second World War afforded

time level of money payments in
order that consumers would have

in

business,
education, labor,
-

'

,

purpose was to maintain the

life,

high price of certain
commodities
and
the
relatively
v
Present Needs ':•••:'•
high levels
to
which
security
In
prices had advanced were among
concluding • these
remarks
them.;
/.#.'■ v'/■ -.-■ about some of the broader aspects

war,

;

of,

be
sound principles and
exercise good judgment.

will

The

nent.

leaders

as

as

ant.

the human race will learn and
unon

the teachings of history^

Exchange,

will

admit

Korshaw tnmartnershin

Ralph ,R»
on

Oct. 1.

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4528

[Volume 164

j\sr>r.?mMv^'uvi

z

"

v-^7'.

.

1561
"

*)«

«&.

their labor.'

They

•'

i'

(Continued from page 1536)"
Of

that

course

-

it should be evident

only

higher real wages can

be obtained out of increased pro¬

It should be the major

duction.

of

interest

all real labor

use

every

possible

means

They

are

destructive, like all warfare.

They

warfare.

industrial

are

only justifiable when neces¬

destroy the tyrannical
of those who would ex¬
ploit labor.
to

sary

powers

the

In

struggle

long

organizations

of

labor

to1;;gain'^f or

the

workers their proper influence

in

regulating the terms and condi¬
tions of employment, the unions
were really fighting
to maintain
the

essentials of

a

free economy

government. But,
struggle has been won. Or¬

and democratic
that

ganized labor has so much polit¬
and economic, power today

ical

that

its

leaders

can

exercise

this

on

mainte¬

issue—the

of irresponsible labor pow¬

nance

supported by a coalition
Republican la¬

er—it is

of Democratic and

bor

politicians.

Legal Limitations

of

Need

:;F.F;F;';

in

We have had ample evidence
the last year

that unless there are
legal limitations imposed on the
right to strike, the constitutional,
democratically-controlled govern¬
ment of the United
States will
subservient to

become

an

uncon¬

undemocratic, irressponsible government by organ¬
ized labor.
The right to strike
should
not be
destroyed, if it
could be destroyed by law.. The
.

should be pre¬
last resort of men who

strike

to

served

as a

would rather cease work and
fer loss

of

suf¬

easier, when

much
power,

one

has the

of a
and
But in a

to dictate the terms

contract, instead of to argue

plead and compromise.
free economy and a democratic
society
'

no

should have the

one

to dictate.;
'
/ The desire for individual free¬
dom is so deeply rooted in human
nature that the would-be dicta¬
tors can never be
the faithful
servants of mankind.
There is
some logic in striving for dicta¬
torial power as the way to satis¬
fy the selfish interest of the dic¬
tators.
Or, if they have the cus¬
tomary
delusions of : grandeur,
power

,

earnings than to con¬
employment under un¬

essential freedom of labor can be

'! ■
merely a peace¬
ful withdrawal from Work.
A
strike is not merely a refusal to
work under unacceptable condi¬
tions.
A strike is a forceful at¬
preserved.

;

A strike is not

against one or more employ¬
the public.
Strikes are declared for the pur¬

tack
ers

and usually against

pose of compelling employers to
yield to labor demands.
'.

A strike is maintained, first, by

controlling: the labor supply so
that
no
substitute workers can

intelligence..'

No Logic in

v,...*

employed and, second, by pre¬
venting other would-be workers
from being employed.
A strike is
carried on by causing as much

and

as

maintenance
the

There • is' the

illegal. acts:

tally

Labor's Program

assumption that the freedom

damage

,

But, there is*no logic at all in
the present: programs
of j labor
leaders' who seek to obtain and
exercise dictatorial power on the

settlement of the

the

dispute by

negotiation or with the
aid of government mediators or
through impartial arbitration.
It
should be the legal obligation of
employers and employees, who
undertake to provide the essen¬
tials of life for large numbers of
private

people, to seek

peaceful settle¬
arbi¬

a

ment of their differences by

tration after the failure of genu¬
ine collective

barganing.

should
enact

practical

a

as

matter,

Government

Federal

the

!

Advocated

Legislation
Now

legislation which will make
or
lockouts unjustifiable

strikes

in the

majority of important labor
disputes,, and which -will outlaw
those strikes which, by their nature

privileges which have developed
a

labor power so great

of

a

enforcement

and
monopoly

monopoly
of

a

the elements of
what is commonly called extor¬
tion.
There is an illegal inter¬
ference with; the rights "of pri¬
vate persons and of the public to
have access: to private premises
and to use freely the public high¬
ways,!" There is the threat of
bodily harm, grave injury and
even murder,- in order to terrorize
price.

There

are

it

wield

who

must

that those
made

be

re¬

sponsible fqr the protection of the
public interest.
-'V
/" /
,

The

session

last

of

Congress,

recent

and

developments, have
shown the only practical way in
which Federal legislation can be
enacted.
tion

That way is by a coali¬
Democrats and Republi¬

of

who

cans

want

to

free

our

see

and our democratic gov¬
ernment F preserved,
; and
who
realize that these labor organiza¬
tions with their tremendous polit¬

economy

ical and economic power

required

to

that

use

must be

power

as

servants and not as masters of the

the
They

or

^ .V
There
United
and

of

Free

large sections of the

States, north, south, east

west, in which the traditions

of individualism and

free

a

econ¬

astray by eco¬
political bosses
at the

or

price of liberty.
There

tude

to

labor

bosses

whom

over

they have not the slightest
trol.

The wage

con¬

who are

earners

willing to be slaves of a labor
dictatorship are. a small minority
of
the
entire
population.
But,
through the political and economic
power of the labor monopolists,
aided by their/.coalition represen¬
tatives in government, this small
minority is steadily acquiring the

dictate

to

power

conditions
of

the

the

American

and

terms

which

under

the

rest

people shall be

V A W V;

permitted to live.

would nhe.exceedingly-

It

(

united in

their."Votes :'to

be

party.It is not at
all difficult for their representa¬
tives to unite in the Congress in
a

one

coalition against Democrats

Republicans who

are

and
elected from

those sections where subservience

labor "bosses'.is

to

the

purchase

this

until

wait

not

has
taken
over
the control of government
with, its private armies of pickets
and sluggers. We should challenge
the
organization
of
a
private
,

has

and

captured

great

so

many key
terrorize an<f.
starve the nation into submission

positions that it
I

not

am

of any

so

can

advocating the election

Republicans
But I am
advocating the election of free
representatives of a free peopl^
under both Democratic and Rpr
publican banners, in order to prpf
vide a coalition that, in the next
Congress, will be able to defeat
the
coalition
of
captive
labor
Democrats

or

partisans this fall.

as

agents,

who

have

the

economy

the

government

States,

been

and

running;

underminiri^

of

the

"■

(Continued from page 1535)
struction " and
that
a

Britain

Development,- and

partner but

not

treated

was

as

as

and

the

became

Zealand

New

reluctant than

more

to join

ever

'v;./ v,
'<•>"1

-

■

■

The result of this feeling was
that; the Governments of Aus¬
tralia

they .ask London's advice

it would be given in the opposite

sense;--FFF ' 'F

subordinate.

a

should

Inwell-informed

;

arrangement. They were cer¬

-

:

circles

•

it

'■

-

|

is

hoped, -however, that the per^
sonal change at the United States
Treasury has resulted in a change
of

attitude.

Mr.

Snyder

is

be¬

tainly not pressed to do so from
London, not even after the ratifi¬
cation
of the Washington
Loan
Agreement by Congress. Indeed,

lieved, to be less uncompromising
than his predecessor was. Should

while the British Government in¬

meet him

tends

the two major financial and trade

to/carry out strictly the
letter of the agreements, it is in¬
clined to endeavor to avoid going
beyond their letter. It had no in¬
tention of making use of their
facilities for the requirements of
Britain

Dalton

Mr.

his

at

the " statutes

Dalton

no

Mr.

the British

Bolton,

the

of

director

Bank,
with the

office

his

Bank of

England and only means
to pay occasional visits to Wash¬
ington characterizes in itself the
lack of enthusiasm in British

of¬

of view of .Britain's influence on
Boards

of

the

the- absence

institu¬

two

of

Australia

in

means

gaining,
looked

uncompromising

an

suit

and

in

for

a

France

well

as

the

In

the

the:

and

some

so

did

Argentine,

far
beyond the limits of their original
The resulting agrees

intentions.
ments

considered

are

be

to

fat

from

satisfactory from the point
of view of any of the parties. But

this is better than

a

breakdown of

the

negotiations. It is also much
bettejr tban agreements represents
ing a triumph for one party and d
defeat for the other./:, Instead of
the resentment that would arise
either from

weaker

Dominions :: have

it

parties.

as

sweeping concessions, and

from

both

Britain

eleventh hour Britain made

Their pfesence would strengthen
the British
voting power, even

lately shown some signs of being
prepared to take an independent
line. On the other hand, so long

time

some

though they might re+
deadlock, to the detri-i

as

and New Zealand cuts both ways.

though

to

mood. Both agreements were pre-i
ceded
by prolonged hard bar-;

bargaining

The

certain

agreements,
concluded
on
the
same day, with the
Argentine and
France, show that London is by

other

whole-hearted.

from

is

halfway. The terms of

of

retained

tions,

conciliatory frame' oI

a

Mr.

ment

that

the

in

be

mind

institutions,/is meant to

two

has

he

of

accordance " with

far

its
strictly- in
And

16.

while

collaboration,
the

by

Confer¬

Press

September

on

ence

reaffirmed

fact

a

—

still

difficult: for

should

Mr. Dalton's

ficial circles for playing the sec¬
strong.F Some of
these sections are,.normally Dem¬ ondary part: assigned to this coun¬
;;
j
ocratic
sqme.nprmally ^Republi¬ try at Savannah.
Needless to say, f/bin the point
can.,
are

omy

We

organizedminority

tyranny before it grows

millions in the ranks

are

organized labor who would
rejoice to be free from their servi¬

executive

Economy

led

long

bosses

of

fact

StiH Strong .F T^FT F

are

nomic

who promise them security

be

American people.
Traditions

hot

are

until full
given for

least
been

at

has

opportunity

be

possible ■ toy the em¬
they
may
convince . themselves ployers affected and as much suf¬
that their efficient tyranny will
fering and loss by k the general
be better for the race in the long
public as it will endure.,l<->F Ft)
itun than the ultimate determina¬
;>n- Thus, 'a strike depends for?fits
tion of all issues by the decisions
subcess on a series of fuhdameri"
of average

illegal

or
result, should be defined as
Could such laws be en¬
just conditions.
But the right to illegal?
I have made so many
strike, for any reason or for any forced?
and written so many
purpose that appeals to the selfish speeches
interests of a labor union or to articles on these questions that
the ambitions of its
leadership, I do not feel it necessary to weary
has been so abused so frequently, you with any detailed answers.
and" with such disastrous effect The job should be done and it
can be done only by the Federal
upon the general welfare, that there
is urgent need to have a legal line Government, which has endowed
drawn clearly between a lawful labor unions with those special

tinue their

greater authority in government
and in business, than the repre¬
and an unlawful strike,
r
'
sentatives of any other single ele¬
y It should be recognized that a
ment of our society.
'
;
I strike is a form of civil warfare
; F-Labor fought
for the right, to which should be avoided whenever
organize and to bargain on equal economic justice can be obtained
terms with employers.
But, bar¬ through peaceful means, and the

gaining on equal terms calls for
the exercise of intelligence, pa¬
tience and sweet reason.
It seems

made

stitutional,

right

F;F:; Political Power of Labor

not seeking I

are

economy

government of the nation.

and

leaders

to
avoid work stoppages and to in¬
crease
every
variety of useful
production in order that there
may be more products to divide
among the producers.
Strikes are
to

control 'the

to

■W

in

i*

a

failure to agree or

terms

the, two
rise

to

imposed

the

on

party, the, conclusion of
agreements has,- given
revival

a

of

old

the

friendly sentiments between the
parties. It is fervently hoped over

price of public office. In the last
the common man
here that Mr. Dalton's Washing¬
session of Congress, such a coali¬
be advanced.
A
tion passed the Case bill and had as a by no means inconsiderable ton visit would produce a similar
labor organization, in.*• order to
of F the
British i Empire effect on American-British res
almost enough votes to overqome section
gain the size, the discipline and
keeps aloof, there will be a strong lations.FF;FF!F;:.,~//.
a presidential veto.
Vthe
economic power to-dictate
inducement, in case of. difficul¬
terms
to the American
people,
all opposition. ^ "F. I.
Democratic "Republican Coalition ties, for Britain and other British
4• <;
must become undemocratic in its
Stock Exchange
Against Labor Tyranny
| ~ countries to try to work out their
There can be no question that
organization, its methods .and its
salvation by breaking away frpip
influence. So long as labor unions such an assault on private rights F At the present time the Demo¬
Weekly Firm Changes
x *
the Fund. It is obviously to the
are
engaged
in
waging
war and the public welfarecan be cratic Party is struggling to piaihr
The New York Stock Exchange
interest of the United States that
made entirely unlawful*
tain
itself
in
Even if
national; power
against employers and the public
has
announced
the
following
the largest possible number
of
a strike were a simple withdrawal
through holding the conservative
they will be, and must be, like all
weekly firm changes: .F ; ; / >
from work, and supported only by Democratic vote in the South and countries should join the Bretton
war-makers, tyrannical at home
T. Ferdinand Wilcox, exchange
»1F "P.'f
.
F
peaceful persuasion, it could be- Southwest and adding to it a radi¬ Woods scheme.
and abroad.'*
• ' 1
-r
r
member, and general partner in
made unlawful wherever there is cal labor vote in the great indus¬
;
.It. seems probable that, as Mr.
And so, as the labor movement
Wilcox & Co.' will become a lim¬
centers. The. Republican Dalton observed at the Press Con¬
has become more and more a a! reasonable ; obligationy on : < all trial

prosperity
will

of

thereby

,

,

concerned

to

continue

a

vital

political movement it. has become
service.
y
,F v.. :F
more and more hostile to democ¬
A strike against a public utility
racy. ' It has become more and
more
revolutionary.! The early service should be made unlawful,
labor leaders were fearful of this and at the same time provision
trend
toward
a
class-conscious should be made for the impartial
labor party. "Reward your friends determination of issues in dispute
and punish t your enemies"; was between the management and the
their simple slogan.
It is still the labor who have devoted their
wise purpose of most labor lead¬ properties and their service to the
ers to avoid committing their fol¬
public. :
:
lowers wholly
to one political
^Political Strikes Unlawful
party.
But as labor's political
Every form of political strike
power has grown, it has become
plain that if both the Democratic could be and should be made un¬
and Republican parties are, going lawful; that is, a strike for the
to yield to organized labor on all purpose of coercing a public offi¬
issues upon which labor is united, cial or a public body, in the exer¬
cise of public authority. .
we are going to have a class gov¬
v.!
Any strike of such magnitude
ernment no matter which party is
in power.
There is one major is¬ that it will cause widespread suf¬
sue upon which labor is united;
fering and hardship should be




•

•

-

Party is striving to hold its con¬
vote
in
the
predom¬

servative

inantly agricultural regions of the
North, the East and the West, and
to augment that strength by ca¬
tering to the radical labor vote in
the industrial

It
the

is

centers.

inevitable

bi-partisan

V

-

that,

labor

politicians to elect either Republi¬
cans

Democrats

or

in the

indus¬

trial centers, we shall have again
in the next Congress a Demo¬
cratic

coalition
of
captive labor agents. This should
be offset by a Democratic-Repub¬
-

Republican

lican coalition of free
tives of
-

This

a

is

free people.
a

nation

would

to

ence

land.

And

; i

.

of

working

in

titude

there can be no doubt

the

the

depend

on

United

attitude

v.

bership of Constantine Hutchins
to John Parkinson, Jr., will be
considered by the Exchange , on
Oct.

Mr. Parkinson Will

3.

tinue

as

a

con¬

partner in Hutchins &

Parkinson.

<^1"

r/y;' F'•:•/;

Transfer of the Exchange mem¬

Washington meeting. Should
Savannah experience repeat

bership of Ralph H. Hubbard to

Mr. Snyder
follow
Mr.
Vinson's
policy
of
aiming at a 100% diplomatic vic¬
tory, Mr. Dalton would return to
itself,

and

London

should

with

the, conviction that
and

the

British

Empire has to do with the Bretton Woods institutions, the better.
that

In

of

the

en¬

1,

Transfer of the Exchange mem?

at

would

freedom

will

this .respect

Government's

States

men,

the

New Zea¬

and

that the British Government's at¬

representa-> the less Britain

Farmers, small business¬
and millions of unorganized

enjoy

a

ited partner effective Oct.

in

of Australia

sion

people.

workers

British Government
a position to influ¬
large degree the deci¬

the

be

through tirely
of

effort

ference,

case

the

two

Dominions

certainly not be pressed
to ratify the agreement; in fact,

Rose

Reuben
on

considered

Mr. Rose will do busi¬

as an

individual floor broker,

ness

it

will. be

Oct. 3.
is

understood.

*

Transfer of >tlm exchange mem¬

bership of Gustav Epstein to Jack
be considered

Adler will
3.

Mr.

Adler will

act

as

on

an

Oct.
in¬

dividual floor broker it is under¬
stood.

solve

!

-

McKenna
as

&

\

Morris

of Sept.

30.

will

dis¬

r.A
THE COMMERCIAL & FINANCIAL CHRONICLE

1562

be

As We See It
,

v -r

.

cerned,

sort of industrial malaise which keeps
ready at any moment to interrupt the
production process upon the slightest provocation, indeed
upon no provocation at all.
Even when the "big strikes"

suffering.

them

(Continued from first page)

Thursday, September 26, 1946

in

It is

a

again being aired, and many are asserting that a "cost of are more or less removed from the scene; even when
stop¬
living bonus" to all fixed wage or lower salary earners is
pages of magnitude great enough individually to attract a
becoming, if it has not already become, a necessity, Union great deal of attention are not present; even in what is re¬
leaders are evidently "feeling out"; their membership and
garded in this day and generation as a "quiet" labor front,
the public at large to determine the wisdom of initiating
workmen are refusing to work in sufficient numbers at
another "wave" of wage demands buttressed upon the rise
critical points in-industry to make it possible for -the
in the cost of living since most of the wage grants of the
mass
industries upon which the economic system of the
past year were made.
XV'United States rests to continue to operate with that smooth
this

tends

to

divert

attention from

the current situation which is of even
if that be

aspect of

an

greater importance,

possible, than the matter of wage rates or other

arrangements which result in higher wage payments per
hours

The publib needs to be alert to the
basically fallacious reasoning employed in most of the cur¬
rent discussion of wages and the cost of living, lest it be
led into costly errors of judgment and policy.,
But even
more it needs to understand what it is that,.enables a busi¬
ness

or

per

week.

enterprise to pay any wages, and in particular what
possible for employees generally to obtain higher
without increasing the cost of living in such degree
their apparent advance in economic position is nothing

makes it
pay

that

than

more

a

snare

and

a

delusion.

.

<•

•'4 < "

\

Out of Current Production

continuity

which their

upon

Hardly a day passes without some one having some¬
thing to say about the laggardness of the motor industry,
the customary leader in American industry.
A good many
columns have been written about the
cedented

the

Yet

situation.

able

and

as

fundamental

as

wages—depreciation, obsoles¬

depletion, and at least a measure of profit sufficient
make it appear to the entrepreneur to be worth while

cence,
to

Now, unless some of these other
reduced without crippling industry,

producing, for example.
factors

cost

can

be

obviously the wage earner can obtain a higher real income
only if he produces more.
Such, by and large, is the situa¬
tion as it stands today, and the hope of the wage earner
lies in his own behavior—his own behavior when at the

of this unpre¬

causes

explanation is simplicity it¬
Among all our industries this one is perhaps most
nearly at the very top of a long series of sub-manufactur¬
ing industries, and accordingly can operate - successfully
only if these industries feeding it can keep going on an
even .keel.
These sub-industries simply have not been able
since V-J Day to do any such thing.
If one ; of them is
going reasonably smoothly, then another is out of gear.
One result is very low production in the motor industry;
another is no profit in the motor industry.
self.

Why?

For any

substantial period of time wages can be paid
out of current production and out of nothing else.
Wages
moreover
are
not
the
only claim on current produc¬
tion.
Certain other elements of cost are fully as unavoid¬

depends.

success

Why do

have all this trouble? There seems to be
a virus in the air which
produces a kind of psychological
fever in industrial areas, i At any rate a mental state seems
to prevail which must be eliminated, whatever its cause, if
any of us are to prosper.
War strain, foolish notions ac¬
quired from God knows where and fomented by profes¬
sional trouble makers, often with foreign backgrounds, the
influence of restless veterans, the effects of more money in
the pocket than in the past, the New Deal preachings, and
a half-dozen other influences are
usually cited to explain
this state of mind.
All of them doubtless play a part.
What is clear

beyond question is that we shall have to
lathe, the work-bench, the wheel of a truck, or wherever settle down to work in this country—and do so without
he works.
.further delay—if we are to realize a tenth part of our post¬
This phase of the subject is commonly termed "pro- -war dreams.
r
w
*'
ductivity of labor," and is sometimes mistakenly supposed
to turn wholly upon the willingness of the individual to
exert himself.
The matter is, however, much more com¬
-

plex than is thus suggested. ; What is at question is really
the productivity of a system, and it may and often does
depend upon a great many things other than what labor
does or does not do.
In general, it is far beyond the con¬
trol of any individual workman or small group of work¬
men.
Invention,
production
techniques,
management
skill, and many other factors enter at one time or another
into the picture.
; . \

Food

Supply and

pay

price that

a

afford to
there will be insuffi¬

or

—

as

can

cient demand.

"

law

takes

from

production
-

is

That

of

some

price

so

happens, however, at the present-moment that

productivity is largely, indeed almost wholly, a matter of
the behavior of labor taken collectively/ A steadily declin¬
ing work week, accompanied by a generally rising money
wage rate during the past decade or more, has kept the in¬
genuity of technicians, managers and alb the rest con¬
stantly under pressure to do all humanly possible to off¬
set these higher : basic labor costs with technological im¬
provements. ; It; is scarcely " conceivable -that this type of
progress can be accelerated further.
Indeed, it is to be
doubted whether in many industries it is possible to main¬
tain the rate of speed obtaining in recent years.
Profits
can stand
no
further whittling, and the more rapid the
progress in technology the larger the obsolescence costs; the
more mechanized,
the larger depreciation and investment
costs inevitably become.
*
*
:
'
u

A

New

Attitude

Needed

fundamentals

two

These

closely related,
iness

a

have realized for hun¬

men

dreds of years.

ton

Unfortunately, our

controllers

amateur

are

fact which bus¬

the

been

have

Washing¬

in

uninformed^ or

points.
They have recognized the second
misinformed,
one

the

not

but

these

on

/

first.

For

years

way

But
must at

second
from

even

this evil at least in its

formal form

present perhaps be assigned a place of importance

general, less easily defined infirmity
which virtually all workers of the day appear to
to

a

more




had.

control

True,

basic purpose of

same

preventing inflation but, .at the
same
time, it must allow indus¬
try to get into full production so
that supply can eventually equal
demand and thus

wired, tele¬
phoned, and journeyed to Wash¬
ington, trying to teach those fel¬
lows
this
elementary
business
fact. They were still trying to do
so

at the end of June, this year,

when

the

price control
ungracefully from.the

original

law passed
'

scene.

\

,

followed
the

food

a

month

industry

;

in

sup¬

Price
der

Control

pressure

Act un¬

Extension

from

the

Adminis¬

tration, labor, so-called consumer
and

others.

amended the act to make

But,
it
certain

erase

the threat

the

and

the

administrators

have

to

paid

wages

to

who

women

the

work

,

and

men

in

the

plant

which produces it. What has hap¬

pened

to these

costs in

the

past

five

;

years? '
.
' !, 1 ;' '
'.
1
Well — according to govern¬
ment statistics
prices received
by farmers for food products have
v

—

risen 72.4%
of

from 1940 to the end

June, 1946.
».
During the same period, hourly

•
.

earnings

received by

workers
The

have

Labor

49%

of

period

the

of

must

the

There

Index

increased
the

of

course

same

This

more

than 4,000 in the

increase) it
remembered,
pertains
list of 73 specific items.

a

are

food

average

products
-Bureau; of

,

time.

be

only to

plant

34.5%.

food

in

Statistics

in

food

increased

prices

represented

store and

prices of

great many of these have /re¬
mained stationary since 1942.'
a

It

seems

apparent,
therefore,
prices are within

that

grocery
reason
when

these

of production.

I

they

not.

are

that

do

contend

not

But

And

undoubtedly

are

I

do

that

contend

who
expects
the
manufactured article

anyone

price
to

consider /in¬

we

costs

increases

justified.

of

a

remain

duction
needs

stationary while

costs

to

are

pro¬

the

on

back
study arithmetic.

rise,

to ; school

go

;

and

;

;

I have cited

only two cost fac¬
tors involved in production. You
gentlemen
are
controllers
and
know

better

than

I

do

all

of the

other costs involved. Costs of

tainers
are

have

taxes

up,

prices

risen,
are

freight

machinery
complete the

up,

up./ You

are

con¬

rates

list.

;

Fdod plant workers are not the
ones earning higher wages

only
in

1946

than

in

1941,

The

steel

worker, the coal miner, the rail¬
road

engineer,

automobile

v

store
your

the truck

driver,

the

mechanic,

clerk, the office worker.—

secretary

— all
higher

are

ing

a

standard for that

much

receiv¬

wage,

than

same

posi¬

tion in 1941.
Of course prices are up. With
heavily increased costs of pro¬
duction, prices must go up I or
.

there will be
As

tion

I

no

supply.

stated .before, the ques¬
not have prices-gone up

is

but are prices1 reasonable?
Are
they in line with earnings? Is the

American family spend¬

average

ing

the

same
percentage of .its
weekly income for grocery prod¬
ucts as it spent five years ago?

.Let's

need for

^Situation Today

look

at

some

ernment-figures.

more

gov¬

this

In

case,

And

so

tics for 1939 with those for

the food industry today;

is presumably operating under, a

liberalized form of price control.
But the
situation is not much
It

better.

is

difficult to

still

elementary

plain

business

ex¬

prin¬

ciples to CPA men, it still takes
a long time to force the elimina¬
tion of production obstacles, and
there is still a large- amount of

Gro¬
cery manufacturers, nevertheless,
are
doing their utmost to pro¬
duce a sufficient supply of essen¬
tial food and grocery products at
reasonable prices.
'
uncertainty in the picture;

Note those two words "reason¬
able

Are grocery prices
reasonable?- Many people
think that they are not. Probably
prices."

today
the

wife

of

almost

every

man

another

creased
the

bite

grocery
on

you

bill
for

money.

,

—

and put
house

more

United

spend.it. Of that amount,. 14.8%
disposed of in food stores,- In
1945, disposable income had risen

was

to

$139.6 billions but food

store-

sales accounted for

only 14.3% of
that sum. In other words, in six
years the
disposable income ; in
this
/country
had
more
than
doubled
food

but

store

,.

the

.

percentage

:

of

sales

compared with
disposable income hail decreased
five-tenths of 1 %.. These figures
would
if

certainly be

food .prices

a

had

lot different
risen;out

proportion to income..
There

of
-

other

are

government
the point. ; In
1939, total compensation .to civil¬

figures
ian

me!

that

Certainly

are

In

prices

$67.7 billions.
people had .that

was

much to spend if they wanted to

I know. It has happened to

-food

States

The .American

to

prove

employees

States

..

1945.

First, let's look under the head¬
ing of "Disposable Income."; In
1939, the disposable income in the

-

.

has at one- time or
complained
of an in¬

here, today

of
it higher, but so are earnings. The
recognize
that question is: Are-prices in line
elementary business principle with our present economy? When
just mentioned. The new price you look at all of the Tacts con¬
that

would

costs in¬
production of a

we'll compare government statis¬

C

wrote,

spokesmen

—

prices

grocery store product are the cost
of the ingredients used and the

than

government control of prices.

groups,

more

goal

phasis upon prices and none jupon
supply. For four years, grocery

Savings must come in reduced wage costs per unit of posedly operated/in a free market
output, and this reduction must be effected by a funda¬ —unhindered by controls which
mentally altered attitude on the part of the great rank stymie production and prevent a
full flow of goods to market/But
Tand file of wage earners, particularly of organized wage
there was no actual holiday so
earners.
A great deal has been said about "feather-bed¬
far as production was concerned/
ding" in recent months. :It is a subject about which there Not knowing how long the period
should be no silence until such practices are rooted out of of no price control would-last,
whether there would be a new.
our economic system.
No wage earner anywhere in the
price control law or not, .manu¬
land (with the exception of the immediate beneficiary—
facturers
simply
couldn't
get
and even he will not benefit if the practice is carried too back to normalfar or is practiced too widely) or any one else in the coun¬
Then,
Congress
passed / the*

spread throughout the economy.

> r

of inflation

There

have the fullest share of economic
long as these practices remain wide¬

has the

upon

it should be.
control; ' must

broader

war-time

the
it

price

much

a

it

they have placed all of the em¬

which

try, can ever hope to
welfare open to him so

have

emphasis

supply.

upon

—

Peace-time

the

places

and

,

It

farm

was

(Continued from page 1537)

person

in

everyday

the

the

Price Considerations
the average

in

that prices

similar proportions

increases

volved

■

.

must be marketed

the

to

creased

we

evident

and wages!
The major

,

All

it is

have risen in

ferment

a

was

sum was

1945,

civilian

in

the'

United

$48.1 billions 20.8% of
spent in food stores.

total

compensation i'to

employees

rocketed to $120

had

;

sky¬

billions but only

16.7% of that amount

was

spent

THE COMMERCIAL & FINANCIAL CHRONICLE

Volume :164 *; Number 4528

1563
*

....

;

*

families

American

of

eating

are

day

in look¬

row" advisedly. Industry,

before in their

than.ever

purchases- of ing to the future — and in plan¬
quality food products which they ning for it — must look at two
are
enjoying for the first time programs. One is for "tomorrow"
which is the period from today
are creating tonnage increases in
grocery
sales as well as dollar until June 30, 1947, when, let us
volume V increases,
and I think hope, the Price Control Act will
you will agree that food prices expire. The other is for the "day
after tomorrow"; when industry
are "reasonable.''' /Vv/ :/v /
• '/'//■
•The figures that I have quoted, will once again operate under the
v
/
however, must be digested with free market system.
lives,

that

their

-

.

that

is

One

reservations.

two

is

There

i

a

short-

little

actually

popula¬ range planning in the grocery in¬
today.
Conditions
are
tion
a
greater per¬ dustry
centage. of-income-for its .table bound to be unsettled during the
next 12 months. The price con¬
supplies. That is the fixed in¬
law, although it correctly
come
group, people on pensions trol
and the like. They are suffering places emphasis upon production,
certain

of

segment
is
paying
•

our

;

hardships

financial
of

that

operation

government

a

control prices with¬

tried to

h&s

at the hands

and. other
production.
;
•/:
'Secondly, there have been a
number
of
price .increases
on
fdod and grocery products since
the end of June. These have been
controlling wages

out

costs of

>

.

,

.

help bring
production

granted, however, to
prices in line with
I"

still

certain,

am

food

favors
'

'v'1

•;

,

'-

♦

continues

policy

•••:

'

-

Supply

today's sup¬

'Now for a look at

of price con¬

wage

a

control.' /
regula¬

but-not

trol

| Inequities

pricing

in

tions will continue to hamper the

of

production

prod¬

food

many

hope that conditions in

We

ucts.

next year,
'"V

but we can't plan on it.
,<U-

'/ i'

■

r

.

y" i.

^

V

Long Range Planning
I

some

extent

by

look

to

forward

to

who

planners

is

planning

long-range

Even

solving the problems of the world
with American money and Amer¬
ican food.

ply picture.

out¬

have

farmers

•American

growing rec¬

done themselves in

ord-breaking crops this year.- A
million
World War II veterans
returned to the farms and

recall the pre-war

You will all

attempts by the government to
furnish one-third of the nation's

population—allegedly ill-fed and

helped

under-nourished — with adequate
bumper crops of wheat, food through the distribution of
corn,
and other grains. Supplies surplus foodstuffs. At first, these
of potatoes are much greater than foods
Were
distributed through
last year and the sugar situation municipal welfare offices by • a
shows
improvement
although surplus marketing agency. This
grow

canned fruits and

more

are

demand.

below

still

is

supply
There

vegetables coming on the market
than at this time last year. The
remaining serious shortages
in fats and oils, and there is

two
afe

sign of early

no

improvement.

Recent

figures, from

partment
be 2%

over

of

so

week- with
The receipt

carload of apples by an upr

a

the

in

village

York

New

heart of the

ample-growing coun¬

put
the finishing
Agriculture / show try, helped
crop volume will touches to such distribution.
the-previous peak of ; Then the Department of Agri¬
higher

26%

the

than

1923-1932 average.

/The

and

swamped with

next
forth.

the

cabbages,
flour,

work very well.
balance. One week,

were

of

-

and

1942

De¬

the

no

was

relief clients

1946

the

that

»

didn't

system
There

state

*

corn

called

culture

with

the food in¬

upon

for help and it came up
stamp plan which

dustry

to

according

crop,

the food

September 1 estimates, will be 3 worked pretty well,
bpiion, 371 million, 707 thousand i It is noble of mankind to want
bpshels as compared with 3 bil¬ to help the under-privileged and
lion,
18 million,
410 thousand no one can condemn the man who
bushels last year and 2 billion,
foster such a movement. However,
608 million, 499 thousand for the their enthusiasm for the cause
//'/;

average.

Wheat

•

lion bushels more than last year.

to

mount

the

dertaking

of

success

the

un¬

in

result

and

—

its

grains in its history.
abundance :of
at

failure.

/ We learned, for instance, that
who have never
eaten
properly must be taught the value
supply of a balanced diet, and educated

contributions

simply

ignorance, they
fail to eat properly.
through

tion,

Board
to

much

condi¬

the

World

of

proponents

Food

this

of

The elimination

continue

because,

or

will

plan .state,

do

world peace.
That, of course, is a most worthy
goal. All of us are in favor of
world peace and none of us wish
to
see
human
beings
without
promote

enough food to eat when there is
which

with

available

food

they

use

.

and-bthers

workers

front

the home

on

to

able

were

ample

secure

supplies of quality food products.
And, on
top
of all
that, we
shipped life-saving, and battle-

supplies

saving,

of

to

our

and

we

food

allies.
ended

war

were

in

a

conditions

food

of hu¬

Millions

mess.

beings in Europe and in Asia
faced mass starvation unless they
man

got food and got it quickly. The
United
nish

States

needed
after

and

—

supply
it. Ship

total

the

did

we

fur¬

to

asked

was

of

60%

from American

ship sailed

as

foods. There

tne

to

thanks

to the nutritive value of foods,

lines.

We

old

good

food pipe

our

to the
countries that needed it, and in
got

the

food

shut down or operating at

hum. The supplies of
of many foods are still short of
today's record ; demand but the
situation improves gradually.
to

bread

to

returned

has

cancellation

the market following

government's

80%

wheat

extraction order for flour millers
there

is good

reason

to be¬

regulations limiting
domestic distribution of flour and
that

lieve

the

use

sors

of grains by food proces¬

will also be eliminated. Such

action

will

hasten

further

.

the

flow of familiar grocery products
to market.

„,

.

■

:

before

salt

pork

should

we

often

more

but they
of

don't know it is because
food they eat.
;

the

That
ience

of

part

was

of

food

feed one-third
population.
Now,
efforts being made to

in trying to

America's

there

are

thing with twothirds of the world
population.
You can imagine the problems in¬
attempt the

volved
food

—

same

the

and

effect

while

interests

being solved.

r

much

Prospects

-

#'

.

\

for conditions today.




upon

they
;

t-

are

/

Basically, the idea is to create
a World Food Board which would
have control of the international
distribution

of

foodstuffs.

It

El Salv

This

would

cultural

also

mean

country.

that agri¬

prices would be

stabil¬

d

a

N i

c a r a

o r,
and

gua.

The combined

3,160 votes of
these

Dr.

coun¬

Machado

Luis

tries comprise
a

are

bloc of 4.23% of the

Bank's total.

a sensible national trol Agency under the Cuban Min¬
which recognizes sup¬ istry of Commerce. He has also
ply and price considerations. We served as attorney for the Na¬
are stalled until that day arrives.
tional Association of Manufactu¬
And I believe that American bus¬ rers and as a member of the Na¬
iness must undertake the job of tional
Tourist
Commission
in

operate under

economy

Cuba. In 1944 he attended the BW
to arrive Conference as a technical advisor
within
a
reasonable
length of of the Cuban delegation. The same
time.
year he
was a
member of the
.•;//
We must prove to the general Cuban delegation to the Interna¬
tional Civil Aviation Conference
public that our industries are
in 1945 on the
built on public service. That we at Chicago and
to the. Mexico City
have been able to build our busi¬ delegation
nesses
over
the course of many conference on problems of war

people

that

if

because

years

is

day

we

bit

little

charged by
because

and peace.

operate in the

than

lower

/Sr.

strove

keted

better than those

records

were

free

America's

der

made

enterprise

un¬

system. And I believe that Amer¬
cannot help solve world food

ica

but

the
not

do

while employing any
system we now have. I
believe that Sir John's
promote
world
peace
better eating will suc¬

to

through

it

if

ment

I

involved

of

America.
am

the

/

- •

■//'

sorry

the

profit

).

•

to

abolish¬

system

•''/ -

/

and

Food

Agricultural

Organization that the World Food
be operated ■ so that the

Board

American

system

was

mar¬

food for profit is replaced

by the

production of food for/ use only.
Our present system, our business
men, our financiers, and our mar¬
keting agencies are condemned.
Abolish • them,
it is said,
and
there will be no more hunger in
the

world.

This
You

is

/

.

.

„

_

gentlemen.

erroneous,

know

it

as

well

as

I

do.

Americans do not produce unless
there is an incentive "to
If

we

were

forced

ducing for profit,

to

we

produce.
stop

pro¬

would sim¬

Air

bana
i

At

in

.//■' ■/

1945.

one

/ The
public must realize that
a long list of industrial and social
want high
organizations/- among them the
prices but that it wants free
Christian Youths' Association, the
prices and fair prices. The rec¬
ords show that the food industry Rotary Club, the Circle of Friends

is

one

the

of

most

highly com¬

Culture,

French

of

the National

petitive in the world and that it Tourist
Corp.,
the New York
has brought the public constantly
World's Fair, the Committee for
increasing
quality
and' value
Inter-American Commercial Ar¬
through the years at lower and
lower prices.
:
./• '-hv./
■' bitration, the Inter - American
Council for

"Is If War

or

Peaco?"

search,

66

announces

the

on

Appraisal",,

/

/

Speakers include, A. A.

Frank L.

./

sociated

Berle,

Jr., former Assistant Secretary of
State;
of

Charles Hodges, Professor

"Times."

A.

with

Wilfred

nancial Chronicle," will be
/

•

/

National Bank of

the First

Fall River,

later becoming a

cot¬
In 1920
investment securi-

in Andrews

ton

investment brokers.

he

chair¬
>

started

in

part¬

and Horton,

ner

May, Executive Editor and colum¬
nist of the "Commercial and/ Fi¬
man.

Fall

investment firm, of

died at the age of 83.
Andrews began his career

Mr.

Politics,
New
University; James B. Reston,
Diplomatic Correspondent of the
York

president of

Andrews & Son, an as¬

River, Mass.,

International

New

Inter-

Frank Andrews Dead
Frank L. Andrews,

Thursday,

on

Expreso

A

United Nations:

Sept. 26 at 7:30 p.m.

Yacht Club, etc.

Machado has been

Americano.

of
the Associate
"War or Peace? The

Future of the

of

official

an

West Twelfth Street,
dinner-forum under

a

auspices

Realistic

Since 1944 Sr.

Social Re¬

The New School for

Intellectual Coopera¬

tion, the Miramar

York

,

American

Radio - Conference.
He
President of the International
Transport Conference in Ha¬

time or another Sr. Ma¬
chado has taken a leading part in

Company,

producing Members,

of

member of

this industry does not

been recommended to the United

Nations

a

-^

Regional

in

that it has

say

Brown

as

Washington for the

to

our

Company,
Company, and by the

Jones

1945

"

Rio de

delegation to the Inter-Amer¬
ican Radio Conference and in 1946

Smith

the

by

in

to

the

those

make

to

.

went

Machado

Janeiro

competitors. And,

our

we

products
the

would work to stabilize the world

agricultural market so that there
would
never
be : surpluses • or

,

Honduras

for:

manufacturers

o

u b a
Peru,
Uruguay, Ec¬
uador,, Domin¬
ican Republic,

We expected to have

ready

t

Mexico,

C

operation today. Plans
buildings and new prod¬

are

•

These

exper¬

our

scarcities of food in any

/ Future
So

ucts

countries,
wit:

them

made

Bank

Latin

American

,

time.

ceed

were

ago

fraction of capacity are begin¬

and

in

new

a

tion,

than they should be,

months

few

a

the

them

the

nine

plans for the day
We

governors'
March,

in

represents

on

•

tomorrow.

yesterday.
for

starva¬

mass

no

was

plan

plants

imanufacturing

/White

do have

We

the

Cuban law¬

a

yer,

the supply of the world's
best-quality foods at reasonable
prices.
"

after

directors of the

at

re-selling itself to the American
the

Then

found that world

and they say, "why
change now?" Sure
their children are scrawny and ill

ning

uncer¬

means

...

Bank

meeting at Savannah
Sr.
Machado,

tainty in the grocery manufactur¬
ing industry and deter us from
reaching our goal of full, produc¬
tion and full employment, which

Frozen

lines are filled again and

either

elected executive

World

•

Sr. Machado, a native of Guanararing to go. They have hundreds
bacoa, Cuba, at 46 has had a
of new, easy-to-prepare products
varied public career.
He studied
tion would depend to a large de¬
ready for Mrs. Housewife. Pre¬
at
Chandler
College,
Habana.
gree on United States participa¬
packaged % meats and fruits and
Even before
obtaining his law
tion in it. We are one of five sovegetables will make their ap¬
called
food
producing
nations pearance when equipment and degree from the University of
Habana in 1922, he served as a
who would have to supply these
supplies are available.
member of the delegation to the
under-fed
^citizens
of
many
There will be a host of new^ Versailles
Peace
Conference of
countries with the foodstuffs they
packaged foods on the market/ 1919. Primarily a lawyer—a mem¬
require for good health and good
foods that please the palate and ber of the Habana law firm of
living.
at the same time4 furnish their
Nunez, Mesa y Machado and au¬
We have done an amazing job
users
with
necessary
vitamins thor of several books dealing with
in recent years in meeting rec¬
and minerals. The employment of
legal and economic matters—Ma¬
ord demands for food. During the
new and more modern production
chado has been
very
active in
war, we increased production to
techniques will bring all of these public affairs. He has represented
the
extent
that
our
fighting foods to the American people at
the National Association of Indus¬
forces were the best led in the
prices within the reach of all.
trialists on the advisory commit¬
world.
At the sarfne time, war
But. not until we are free to tee of the Export and Import Con¬

problems

which

Director of the Bank

First of all, we must remember
that the success of such an opera¬

foreign to them. They have got¬
ten along for years on beans and

point.

the weather man and

grocery

of

period

Series)

One of the two Latin Americans

.

Now, thanks to
the farmer,

vanishing
the pipe

the

a

Latin American Executive

execution
can be fed.
when we finally return to a free
1
/
market.
New machinery
is on
But, we are talking about sup¬
order to replace equipment worn
ply and price considerations in
the food industry. How are these out in the breaking of food pro¬
duction records during the war.
affected in this case?

system. Our food producers would
not have been able to produce
the way they did under any other

lines

■

foods

(Twenty-first of

LUIS MACHADO y ORTEGA

Developments such as this one

people do not have the money to
pay
for a sufficient amount of
nutritive

would feel the same way.

man

because these

under-nourished

drainage of our food pipe
so that supplies for domestic
were depleted almost to the

the

of

of the

they can be helped. You
just can't throw the food at them
and expect them to make proper
use of it. In fact, many of them
won't even use it because it is

relief abroad required

td famine

a

is

.

food people

time when it is sorely

a

America's

needed.

And World Bonk

deprived

them. If the farmer was

right to receive a reward
rector
of
the
United
Nations
for his labors in accordance with
Food and Agricultural Organiza¬
his ability and effort expended;
tion. Its purpose is to provide all
if he could no longer pit his in¬
of the people of the world with a
sufficient supply of food at all genuity and brain power against
his neighbor farmer, he'd quit!
times. It
is claimed that twoother
American
business
thirds of the world's population Any

U.S.A. We drained

fAll in all, America is harvest¬

ing the largest quantities of
;This

advanced

been

We

.

billion, 167 million, 319
thousand bushels or about 44 mil¬
one

comes

has

plan

producing.

stop

' /.■< often results in their overlooking ports laden with wheat, with public interest — because we
strove to bring our goods to the
production is .estimated
important points which are para¬ flour, and with other essential consumers of "America at prices

1935-1944

at

This

ply

stop growing, and that is

by Sir John Boyd Orr who is di¬

,

industry will improve in the

our

beclouded

prices.
i

nevertheless .complicated and
difficult. to administer. And, it
is

two,

costs. The ratio between the

would
fatal.
Actually, the adoption • of this
plan would decrease world food
supplies
instead
of
increasing

ized. Without fluctuations in sup¬

ply; there can be no fluctuation
in price,
according to the pro¬
ponents of the plan. ,
,

the

decrease of 4.1%.
Vv . /,
'
iConsider the fact that millions

age

better

And

after tomorrow?
/ .:
I use the expressions "tomor¬
row" and "the day after tomor¬

Now, how about tomorrow?

stores. There's a percent¬

in food

•■'•'"■.

'V"vV': W>:':/ ''::■
r.--yv.'vV'^

"

•■',

'■

■"

■

',.' v

■••'•

.

■<.

:

'...'.

I

■!

,.; ;•■ ■.;'.' -i'.

V,-

y;,-1'

y;"/

'•

■'' •'•

]:

,

''.

!\ '

; 1 ■''.p'y

THE COMMERCIAL & FINANCIAL CHRONICLE

1564

1

"•

'''

■

y ;..y vy

.;.y

Thursday, September 26, 194fij

i
..

..'■

: ''

»

"%

How Soon Mast We Go Back to Work?
Security Flotations Will Be

countered sales resistance based
(Continued from page 1534)
of
production and ship¬ on fears of unending inflation
should be thankful for the decline

ments.

(Continued from page 1540)

More Difficult

y

levels

With regard

rhents

to financing prob¬

of

let

say

me

the

past fifteen

years,

at once and with equal
that business manage¬
my
personal opinion,
certain amount of the

in security prices and the pros¬ lems, I believe you must conclude •emphasis,
inventory increase for pect of an early return to more that it will be more difficult to ment, in
raise fixed capital by security flo¬ brought a
the entire year will probably run normal business conditions.
close to $7%
For
the lawyers I would say tations than it was in the first half New Deal philosophy on itself.
billion.
You will
remember that during
the first this:
Interest in labor relations of the year. I doubt whether this I doubt if there is a man in this

According to results so far this

the

year,

■■!

week of the current stock market

continue

will

at

a

high level in

begins to open up again
until reserve requirements are re¬
market

was a great deal of the postwar period. I feel strongly
July inventories. Stocks that
many
business men have duced, which seems to be a good
in July generally were not ex¬ done a very poor job in handling possibility for next year but not
We also expect a further
cessive.
They are not excessive their labor relations.
Too many this.
now. But what has impressed both
of them have indulged in wishful slight hardening of money rates,

there

break

.

interest in

security and commodity buyers is thinking and the belief that labor
the prospect that inventories will is on the
down grade, or that
be at an amply high level by the unions can be eliminated. In many

and that they will
excessive quite rapidly in

■end of the year,
become

In fact, if production

early 1947.

maintained
throughout 1947 at the levels they
and

prices

were

will reach by the end of

.

this year,

the

complicated
in

and

Reserve to influence interest rates.

body of

Federal and

Labor

decisions.

law

rulings,

Board

utes,
court

before

more

take several months
it is completed. How¬

State stat¬

they have been put at a se¬
rious disadvantagle by ignorance
of

may

hardly agree with
forecasts of a sharp decline in high
grade bond prices in view of the
high Federal debt, and the power
of the Treasury and the Federal

cases

found

which

is

There

ever,

we

can

tre¬

a

inventories

to

probably equal or exceed

would

30%.

and

between 20

That would be an im¬

cycle.\

certain

as

sorts—refrigerators

all

am

that if

we

will look

the

For

business

<

the war;

then

we

years have been able to sell more
income is high; large savings ex¬
than they could produce.
In the shocked
ist; consumer instalment outstand¬ longer-term postwar period that I
unfold.
ings are at a relatively low level; have described here their sales
high wage rates increase the need should
continue • substantially
for labor saving devices; and the
above

position of business is
favorable to capital goods expend¬
financial

itures.
"••V;•• -ir'v

^

[fyr

—C'1/'v*

A 3-to-5 Year High Business
Activity After Next Year's

/

me

just

will have to be trained

new

lowed.

briefly that cer¬
generated by the

and agres-

of production, quality
improvement, and the introduction
sive policies

lines will have to be fol¬

can't

You

these jobs

afford

off much longer.

in the money supply and an
accumulation of demands. In prac¬

Advised

executives

Business

as

neither surprised nor

this pattern begins to

this: During
received

the past year we have

numerous

letters

from

potential insurance buyers asking
if we thought inflation would
make their policies worthless. Our

us

answer
■J??.,

We
on

has

have

been:

advised

Definitely no!
them

to

cover

insurance in line with their in¬

that

its

too

exces¬

continue

we

In

this

the

this

and

situation
Institute

have

paralleled

opportunity

balance'wheel

a

unavoidable

to

v

controller

act

as

those

between

laissez

return to

a

un¬

an

to

also

(Continued from page 1535)
(Society of Independent Motion

construction

high

The value of the

as

be

price

compared with

re¬

pre¬

that it will not

popular

in

certain

quarters. The controller who fol¬
lows this road will do much, in

All

of

With Davies & Mejia
SAN
Davies

is

to the United States
proof that the American sys¬
will
work, the man who
helps demonstrate its soundness
here is making a very real and
looking

for

tem

personalcontribution v to

world
democracy for which two World

Wars have
<

San

have

■

been fought.

.j, .

would

strongly urge that each
give these important sub¬
jects adequate treatment at thei?
local meetings.
control

Constructive Financial Statements

Another

work;; by
ahead

field

for

constructive

controllers in

the

year

.

acceptance '

the

concerns

and
understanding
by
stock¬
holders, employees and the pub¬
lic generally of published financial statements. As you all know,
the Controllership Foundation, in

which
has

Controllers

.

Institute \

and

continuing interhas selected this subject for

a

est,
its

the
vital

" ■;<,

project. Surely
activity in which the

there is no

controller

be

can

helpful

more

to his management than the prep¬
aration of clear and understand¬
able

financial

comment, I

statements.

This

add, applies with

may

equal force to statements pre¬
pared for internal use by top
management ■ v a n d
department
heads. Operating executives are
not
accountants i but controllers
must have the operator's point of

understanding of Ms 5
they are to be of
help to departments
top management. The presian

if

maximum
and

,

dent of

large company once toldt
that any one who can add and

me

a

subtract. can be an accountant*
While this statement leaves much
to be desired in

far

so

adequate

as

•

.

•
-

appreciation of the nature of ac-{j&,.

is

business

which

course

The

Financial

Chronicle)

—

and

thus

controllers

for

reasonably

already

are

—

>'

and

First

of

im¬

fundamental

the matter of com¬
petition. I believe that the next
twelve months will be an era of
is

portance

intense competition
companies and in¬

between

brand

compete

with

of

others, but the products

of

those
one

others. In my own com¬

of many

for example, we must not
only compete with other broad¬
casters but the broadcasting in¬

pany,

whole must compete
newspapers, magazines and

dustry

as

a

In

penditures.
case

the

Francisco
added

New

Stock

York

and

Exchanges,

Norman L. J.

Lloyd

to their staff.

machinery,

advertising

addition,

in

ex¬

our

have the further problem

we

developing : an entirely new
medium — Television — while
of

maintaining our
sound
broadcasting in order to pay for
the large capital investments and
operating losses which are in¬
evitable to its development.

at the same time
revenues

It

is

and profits from

obvious

that

,

competition

intensive

era

of

which

is

this

just ahead of us will necessitate
a
type of thinking by the con¬
about

troller

mentals

which

the

economic

In

of.the

-reading

funda¬

far transcends

in

daily routine of

procedure. The 1947
budgets of all well-managed com¬

panies will be much more than
a series of hopeful guesses based
largely on past experience. Their
preparations will require not onlyinformation about broad economic

Controller

comments of,
executives and con--

the

certain

top

trollers

clear.

Expects Increasing Competition

importance

of

Position

the

and

Those of you who have en¬




costs in

spite of them.

£

derstand.

problems it will
create for* business management
and

years

recently

the place

on

of

the controller in the organization^
I

was

find

surprised and chagrined to;

the

some

statement

gards the
as

top

cases

of

that

int
re¬

controllership function;
importance than the

more

controller
Within

the

good taste
due

made

management

regards
it' himself.
obvious
bounds
of
and of

—

course

regard to the facts

with

it has.

—

I

been

my
observation that the1,
standards by which a man judges
himself go far in establishing the

opinion in which he is held

by

;

his associates. If the controller is
so
as

foolish

"just

to

as

refer

figure

a

to

himself

man"

and

emphasize his lack of participation
his
he

in

v ;

,

to

: &

policy determination and

ignorance of operations, then
is

not, in

controller

"just

all

figure

a

opinion,

my

at

but

is,

man."

real

a

in fact,

It

is

only

necessary to draw attention to the

increasing number of members of

V

the Controllers Institute who hold

top executive positions
ing

those

who

to

moted

general

the

—

—

controller's

he

pro-

presidencies

to

of

deals,

of

"

and

their

that

prove

position,

presentation

includ¬

been

managerships

companies

which

have

like

the
the

the figures with: '

is largely what

he makes it. If every member of
the

Institute

will keep

•

this sim¬

ple but all-important fact in mind
this

year

about it
made

—

and

do

something

personally—he will have-,

a

direct

and

constructive

.

,

above.

-

,

first research

likely to follow in the next few

family responsibilities, however, should be judged less in
Loveland With Buckley
trends, but a thorough knowledge
without regard to this present
of company policies and plans,
comparison with prewar prices "■'(Special to The Financial Chronicle)
price cycle. Insurance is as good
SAN. DIEGO, CAtlHW Alfred markets, products, and .operating
than; in terms of present wage
a buy as it ever was in view of the
Loveland has become associated Costs; The importance to a com¬
business
outlook
as
outlined rates and the need to reduce labor with
come

that time does

sorry

Although

FRANCISCO, CALIF.—
accounting
& Mejia, Russ Building,

members

am

opinion, to preserve free en¬
view and
terprise in this country. Since
it is clear that today the world' problems

my

all other media for

(Special to

Machinery prices will

war.

always

means

with

Administration).
the foregoing business

delays.

even on an open

main

which also

Charles E. Wilson (General Elec¬
tric Co.), and T. P. Wright (Civil

have

alternatives but to place orders

basis.

fact finder, an analyzer and
interpreter. His is the objec¬
tive approach in which all ex¬
tremes of opinion are weighed in
order that an equitable solution
may be obtained. His defense of
the American capitalistic system
must be adequate and forceful —
a

an

Awarded Merit Medal

On machinery purchases we see

ahead,

training, the controller

industry must compete for
the consumer's dollar with those

30 to 50% above prewar.

no

is

inch of its life. By na¬

an

and

enterprise to literally

ufacturer's

Costs, however, will still be about

far

within
ture

I

of laws

whereby
government regulates business.
scores

tools. I

not permit a more extensive dis¬
cussion of these matters here but

strange,

Weinberg, WPB Aides

"

•

not

dustries. Not only must one man¬

.

For insurance men I would say

have the

both

the problem of construction, ma¬ and industrial leaders were for¬
will, at the proper
chinery purchases, and financing. merly members of the War Pro¬
lime, translate itself into high We have been
urging clients for duction Board, whom Mr. Wein¬
"level activity in two basic indus¬
years
to finish the construction berg recruited to direct the tre¬
tries—automobiles and
building.
they needed to take advantage of mendous pob of producing goods
A
third
basic industry—textiles
favorable postwar prospects.
';. §
For for the war effort.
and apparel—will operate at a
The presentation of the medal
the past few months, however, and
unit volume substantially above
at the present time, we are urging which was awarded by President
the prewar level. Finally, capital
them to be cautious. A 10 to 20% Truman, was made by Secretary
investment will bear a relation to
reduction in building costs is likely of War Patterson in a ceremony in
business activity much closer to
next year, mainly from the elimi¬ the Pan American Room, May¬
that of the twenties than to that
nation of black market prices and flower Hotel, Washington, D. C.

of the thirties—an additional stim-

therefore,

practiced
is

It

increasingly

tical terms this

ulaing prospect.

has

too.

ses

Aeronautics

Caution Regarding Construction

chief of which were an in¬

crease

are

put Picture Producers); 'y John Lord
O'Brian; Edward R. Stettinius, Jr.;

to

say

tain forces were
war,

but business will
again be competitive. Sales forces
prewar;

of

Readjustments
Let

business

broad

sure

executives: I ahead on a reasonable basis we
and
automobiles
for individual
feel it hardly necessary to point
consumption, and improved ma¬ out that a very careful inventory will not be surprised at events as
chinery and other labor saving de¬ and commitment policy will be they develop. None of us can hope
vices for manufacturers. The dur¬
to be 100% right about future de¬
necessary from now on.
able goods industries are now much
Another important change is in
more
important than they were the ability to make sales. Many velopments; but if we are fairly
right about the general pattern,
after the last war; real demands
concerns for
a period of 4 to 5
have accumulated during

played their part. Unfortunately,

,

counting by management is con-^O
reconversion
from cerned, it does
clearly illustrate
war
to peace has not yet been
the necessity of stating the facts
to take advantage of completed,
due to delays With clearly and
simply and in language, \ opportunities that lie which we all are / familiar, the which the
layman can clearly un-^

the

I

^oods*of

situation

the

late private

Another example of a coming decline or
same drastic re¬
occurred in 1921.
problem in labor relations in¬ the broad
-The second reason involves the volves
the
guaranteed
annual ahead.
accumulated demand for durable wage.

to

trenchment

of

faire and those who would regu¬

agement's right to introduce ma¬ Work?"
Decline Will Be Less
chinery or processes that will lead
Easy Sledding Temporary
yl
Drastic Than in 1920-21
to greater productive efficiency.
The point of my remarks is that
There are two principal reasons This is a problem requiring con¬
lor this belief.
>
siderable statesmanship. It is true Only a few months of easy sled¬
^
.
.The first is that a decline in that workers are frequently dis¬ ding are left and that the long
agricultural prices, similar to that placed by such developments, but term prospects, after a sharp re¬
of 1920-21 when cotton dropped it is equally true that living stand¬ adjustment next year, while ex¬
from 40c a pound, within a few ards and the economic position of ceedingly favorable in comparison
months, to 8c a pound, is impos¬ wage earners can improve only if with prewar standards, will also
sible under the present Govern¬ the manufacturer can sell at a be intensely competitive.
ment
setup.
While farm prices lower cost while paying higher
Those of us who loaf until the
and income are near their peak, wages. The only answer is steady
last possible minute will not be
the farm economy under present improvement in production tech¬ veiry well prepared either to pro¬
Government supports is not ex¬ niques.
tect ourselves from next
year's
posed

equities

yers

The Coming

-

de¬

a

and disregard for

power

mendous

Furthermore,
there are the process of changing.
While the title of my speech is
general trends which cause
portant business readjustment, but some obj ectives to be more im¬ "How Soon Must We Return to
Selling?" I should like in conclu¬
not as
drastic as in 1921 and portant than others.
to
I might mention, as an example, sion
rephrase this and say
nothing; like the one that began
the desirability of protecting man¬ "How Soon Must We Go Back to
In 1929.
mate these declines at

in which greed,

cases

sire for
the

who advocate

/ C
'
Conclusions
job to be done by law¬
During the last 4 or 5 years
in this field and I believe
$10 billion, which would be much that they will accomplish better many of us have come to think
It re¬
results if they can arrange to work of ourselves as'geniuses.
too much.
It seems to me to be simple ele¬ hand in hand with the economist. quired no
great intelligence to
run a business profitably. The de¬
mentary logic that production or The success of various labor pol¬
prices, or both, will have to de¬ icies may easily depend on their mand for goods and services could
cline some time in 1947.
I estir timing in relation to the business not be satisfied.. All this is now in
additions

further

who is not at least familiar

room

with

day. As the executive having the!;
responsibility
for
both"
>
budgets and cost accounting, the ^
controller is in a strategic posi¬
tion to advise top management •
through the proper use of these '
final

Buckley
Broadway.

Brothers,

625

pany

never

of

its costs was
evident than it is to¬

knowing

more

contribution

ship
pany

as a

both

to-'.controller-"

whole and to the

which he

serves*

:

.

com¬

:

I

Volume"164

employment' statistics—there

AFL Fiim

Against Sovietism

be

forced into
later.
;,t ;; ;

now, we may

war

against

her

Soviet

nists

War against Russia is the last

always

Russian

is

evade

workers

fare

how

ple, who, I

am certain, are just
anxious to prevent another war

as

Y;>

as we are.

■

At

;

a

■:

time like

•*:;";'•';vYA,AAAA'
this, the Ameri¬

people must stand united in

can

support of
forts

to

our

Government's ef¬

maintain

and

reinforce

World peace.
Actions of Communists '

"

trying feverishly to divide

our

people and to discredit the for¬
eign policy of our country every
time it runs counter to the policy
of Soviet Russia. These American
Communists have found a fertile
field of operations in

one

branch

of the labor

movement, not affili¬
ated with the American Federa¬

tion of Labor.
v

Y *

Only

a week ago, an organiza¬
known as the United Elec¬

tion

trical, Radio and Machine Workers
held

a
convention in Milwaukee
which graphically illustrated the

million

the

."/A

;

:

If the Communists in this

coun¬

try think they can ever sell to the
people of this country on the basis
iet publications have themselves
of what Communism has done for
revealed, we must consider that
the- Russian workers, they must
information reliable,
!.. X >V; :
consider American workers utter
This report, published as a pub¬
lic document of the United States, fpols.
Let me say here and now that
devotes an entire chapter to La¬
the
bor. The functions and activities nothing has ever disgusted
of the Soviet Trade Unions are great mass of American workers
of Soviet Russia and official Sov¬

the brazen display of

than

disloyalty given by some unions
in the 1 dual movement. They are
refusing

in

ever

growing

num¬

bers to remain identified with

or¬

ganizations controlled and domin¬
ated by Communists.' They are
flocking to our banner in an in¬
creasing wave. I predict that this
trend

will

be

accelerated

coming months.

in

the

eral

been

absorbed

Government

in the South and other sections of

paralleled

success.

We

are

a

united

organization, united in our
unswerving loyalty to America

and united in

bring about

our

determination to

an ever

higher stand¬

ard of life for the men and women

represent. In that spirit, we
stand ready to face and overcome

we

problem that arises and
meet the challenge of the future
with courage and confidence and
every

Vigor.

AA;, AA AAAA AAy •■■■A

1

ma¬

chinery. Soviet trade-union offi¬
cials

are Gov¬
officials, carrying out
(Continued from page 1544)
Government policies, and Soviet
ceeds of taxes or with the pro¬ economy where they have been
trade unions are Government in¬
ceeds of additional sales of gov¬ held down, the money supply will
stitutions, disciplining the Work¬
ernment securities to private in¬ support a level of gross national
ers to the Government's needs and
dividuals or businesses. It is not product/ of
from $225 to $240
goals - and performing functions
billions. With the present money
which in other countries are per¬ likely that such a program will
be carried out on any significant supply this would put the turn¬
formed either by management or
scale.
over ratio between 2.15 and 2.30.
by .Government."
"In the process of adjusting it¬ This would be well below the av¬
Expanding on this a little later,
the report states, and again I self to such a sharp increase in erage prewar ratio of about 2.65,
the money supply, a private enter¬ which means that consumers and
quote:
businesses will maintain relatively
"The relation of the union to prise
economy
is subjected to
as

rise

until

May,

1920;

reached a peak of
140% above 1915,' and then col¬
lapsed. The question is whether
1946 is another 1919, and whether
1947 will-be another-1920.
"I

not

do

think

and

so,

my

is simply that in 1920 the

reason

rise in commodity prices had fair
outrun
the
expansion
of
the

1920.
"In my

the country are meeting with un¬

by its gen¬

economic

to

they

r:

"Trade unions in Soviet Russia

have

tinued
when

1565

money supply, while today prices*
Today the American Federation having been restricted by govern¬
of
Labor
stands' at
its
not yet
peak mental controls, have
strength in history. Our paid-up fully grown up to the money sup¬
membership last month reached ply. I think it is probable that we
the all time high of more than 7,- can avoid the kind of collapse in
100,000. Our organizing campaigns commodity prices that came in
-

clearly set forth. The report says,
and I ,quote:
;
A A

Yet the Communists in America
are

several

are employed under po¬
discipline •; and receive only
miserable keep for their labor."
I think that makes the picture
pretty clear; It is unnecessary for
me to delve any further into the
foul facts on which the grandiose
Soviet claims of gains for labor
are based*
No government which
regards human beings as creatures
of the State, to be used as slaves
when that suits the policy of the
political leaders or as cannon fod¬
der when they become military
minded, can ever be trusted 'to
protect the welfare of the work¬
ers.
Only in a free land can work¬
ers enjoy freedom.

We do not covet anything Russia
.Soviet■"Trade Unions
possesses, nor are we interested in
Fortunately we have a factual
destroying her way of life Within
her own domain. But we do object answer at hand and no longer
have to rely on hearsay. The Li¬
most strenuously to Russia's forc¬
ing her way of life by aggressive brary of Congress, at the request
of Congressman Dirksen of this
methods on other people and other
lands, even to the point of encour¬ State, recently prepared a docu¬
mented analysis of Communism in
aging revolutionary movements in
action in the Soviet Union. Surely
our own country. It is tragic that
when the Library of
Congress
the "iron curtain" in Europe pre¬
prepares a factual report of this
vents
us
from
bringing these
kind, based on what the leaders
truths home to the Russian
peo¬

•

lice

do

under

thing the American people want. Soviet regime?

Union

workers

The question that must be an¬
swered and which the Commu¬

^

can more

be no reasonable doubt that in the

(Continued from page 1545)
standing with Russia

}H A

THE COMMERCIAL ^FINANCIAL CHRONieLE

Number' 4528

Party 'activists'

ernment

mind, the

cause

for con¬

today is the fact that many
key industries are unable'to pro¬
duce efficiently, or are unable to
turn out finished goods, because
of a lack of certain basic materials
cern

and parts. This lack may be at¬
tributed in part to strikes and

stoppages, but the principal re¬
sponsibility must be .borne by
those in charge of the price con¬
trol machinery. There are definite
limits to the ability of these in¬
dustries to continue to operate, at;
low efficiency or to accumulate
inventories of partially completed

products. Unless the materials sit¬
uation improves before long in
these
industries, they may be
forced to cut down their rate of

off workers and
some
of the
component parts and materials on
which they have been getting de¬
livery. Such cancellations could
cause additional layoffs, and th«
resulting dip in factory payrolls
operations,

lay

for

orders

cancel

could; cut
so

power,

order of

a

purchasing

consumer

that something - on the
business recession fol¬

'

lowed.

*

i

opinion, if such a re¬
cession should be brought on, iti
very severe stresses and strains. larger cash balances than before would not last long. Business re¬
war.
Unfortunately, if this cessions always take place be¬
In our economy, in peacetime, it the
range of gross national product is cause it is necessary to liquidate*
which
used
to flourish
in the is the outlook for profits that
same} time brazenly denounced
reached within the next two years,
governs the level of employment
something. A recession of this sort;
United States." ; Secretary of State Byrnes. If any
Just think of it! • The Soviet and the size of the output of goods only about half the increase will would be for the purpose of liq¬
documentary evidence were
and
services. Expansion of. the represent additional real output, uidating price controls and dis¬
are -operating
the
needed to prove the strange loy¬ trade unions
number of dollars that consumers and the balance will reflect an pelling
the illusion that labor
alties of these officers their report way company unions do in this
advance of from 10 to 15% in the
and
businesses
have
to
unions can push the rest of the?
spend
country, except that they take or¬
provided it.
;
ders from the Communist Party naturally improves the outlook for general level Of prices. Q,
country around without getting
By the issue of Communism at
"With the civilian employment hurt themselves. I can only hope
leaders instead of a private cor¬ dollar volume of sales. It there¬
the convention was drawn even
poration. - And the parallel be¬ fore stimulates the demand foi already just about at the limit that these ends will be achieved*
clearer by an attempt made by
set by the size of the labor force, by something short of a business?
comes
even
more
striking when labor, materials, plant and every¬
one of the
delegates, a young man the
increases
in
i; ;.AA,..'' YAA'
aggregate recession."
right to strike is considered. thing else that goes into produc¬ further
who happens to be Secretary pf
tion, But the effects of this surge physical output of goods and ser¬
The report says:
the CIO, to put the convention on
"Soviet unions are not organ¬ of dollar purchasing power upon vices will have to come about
record as opposing Communism
ized to
conduct strikes. ; While costs, prices and incomes are not through increases in output per
■I
and Fascism. The resolution was
Some
there does not appear to be any uniform.
producers
find manhour. With improvement in
extremely mild and, if adopted,
their
costs
the flow of basic materials in
rising more rapidly
specific : legislation
prohibiting
could have been used as a smoke¬
strikes, strikes never • occur in than their prices,- and some in¬ those industries which have been
screen to hide the real
allegiances State industries, One writer
CLEVELAND, OHIO—Informal
come
retarded by shortages —
groups find prices rising most
puts
of the controlling officials of this
matters and problems relating t<*
it cryptically that 'strikes accord¬ more rapidly than their incomes.? shortages for which strikes and
union. But apparently the Com¬
price controls are responsible — regional stock exchanges were
ing to the unwritten and unpub¬
munists are so bold now that thev
lished Soviet law, are forbidden-" Maladjustments Due to Continued it should be possible to expand discussed by officials of the Cleve¬
no
longer want to stay under¬
land. Detroit and Cincinnati StockWartime Restrictions
our aggregate physical production
A The true purpose of the Soviet
ground. They fought the resolu¬
trade unions, the report : makes
Commenting on price and by at least 10% during the next Exchanges at a recent meeting In
effects

of

"In

left-wing domination.
The officers of this union, in their
the employing enterprise took on
report to the convention, lavished
the aspects of 'company unions'
praise on Soviet Russia and at the

my

.

•

,

.

Detroit S. E. Discuss
'

.

,

tion and defeated

it by

an

over-

Whelming vote. And the officers
who refused to condemn Commu¬
nism along with Fascism were re¬
elected,

according to newspaper
reports, by a six-to-one margin.
I

to you that the develop¬

say

ments at that convention publicly
confirmed
the facts
which the

production .- maladjustments,
Mr. year or so. The principal contri¬
bution to this increase in aggre¬
Bryari stated that "these various
this language;
maladjustments would be serious gate output will be made by the
goods indus¬
"The unions also took on the enough even if costs, prices and durable consumer
managerial functions of working incomes were relatively free to tries, including automobiles, and
for
increased production, main¬ move in perfect response to the by the building industries.
"It is worth emphasizing that
taining discipline, enforcing the shifting forces of demand and
decrees with reference to restrict¬ supply, but under such conditions the in crease in factory wage rates
ing mobility, idling and absentee¬ they would before
long
work over 1940 will be 90%, as com¬
ism and organizing 'Socialist com¬ themselves
out. Our misfortune pared with an increase of 78% in
is that the policy of the Federal all wholesale prices, arid increase
petition'.";/. A vy/'i aAAAAA ■
.[AAA
i''■ Now
let's
examine v; that / last government has been one of con¬ of_70% in manufactured goods
statement a little more closely. It tinuing into peacetime the arbi¬ prices, and an increase of less than
refers to decrees restricting mo¬ trary wartime restrictions upon 60% in the cost of living. Factory
bility. That means workers are movement of prices, and conse¬ labor will
therefore have in¬
forbidden to move from one job quently of costs arid ; incomes. creased its real Wages by close to

clear, is to conduct
speed-up.. The report
,

a

constant

says
.

so

in

Cleveland.
1

Present

O.

John

at A the

session

;

were

executive

McFarlane,

,

vice-president
of
the
Detroit
bourse; C. H. Steffens of the Cin¬
cinnati

and

mart,

Guy

Prosser*

president; Richard Gottron, vicepresident, and William Perry, sec- ;

,

American

Federation

of

Labor

knew

as to the true nature and
identity of the forces who are
backing the dual labor movement.

No

one

has to suspect any longer.
know. And armed with

Now we

s.

_

that knowledge, we> are going .to
resist and defeat any further ex¬
tension

of

their

power

in

the

American trade union movement,
not only in order to safeguard the
welfare of American workers but
to

protect our country from those
hate

who

the

American

way

of

life and want to destroy it by rev^
olution.
It

inconceivable; to

seems

that American workers could

me

be misled or hood winked by the

false pretensions of the Commu¬
nists and their twisted philosophy.
The

spark of freedom burns to6
brightly in the hearts of our peo^
pie to be extinguished by the kind
of
hypocritical promises which
Hitler_psed to issue to his people
and which the

Communists" have

adopted now as their own strat¬
egy.

.

•

.

A




to

Pierce R.
Butler Huff ttoi

they prefer but must/ Continuance of present price con¬ 20 %, in part because of increased
stay put where they are assigned. < trol policy much longer will com¬ output per manhour and in part
Do you think American workers pletely frustrate the postwar ad¬ through an increase in its "take"
Would ever stand for that? And justment of this country to a new at the expense of profits and at
apparently there are also decrees stable level of production and the expense of the other income
restricting "idling and absentee¬ employment, at which all values, groups, which must bear the bur¬
ism." The trade unions in Russia expressed in dollars, would be in den
of
correspondingly higher
enforce these; decrees.
The re¬ equilibrium with the greatly en¬ prices for factory output."
port does not tell us. But it does larged money supply. With elimi¬
Postwar Stock Markets
go on in a following chapter to nation of price controls there must
discuss
forced
labor
in
Soviet also come reform of the federal
Referring to the stock market
Russia and it states with extreme statutes
that
now
permit
the recession, Mr. Bryan pointed out
fairness;
■■ /
\v A
monopoly power of labor unions that "the recent reaction in stock
"Undoubtedly the most trouble¬ to be used repeatedly to enforce prices has renewed interest in the
some of all the Soviet institutions wage demands that in many cases comparison between the 1919-1920
to
present arid discuss without are excessive in relation to labor's period and the 1946-194,7 period.
passion is the institution of forced contribution to the value of the It is pointed out that the stock
labor.
market rose sharply for 12 months
Although the Government output.
publishes no statistics regarding f "I believe that if price controls after Aripistice Day and then be¬
the camps in which prisoners are are removed and labor will stay gan a very serious decline in No¬
concentrated—arid thus confuses on the job, so that prices and out¬ vember, 1919. It is also pointed
and throws out of line all its other put can rise in the sectors of the out that commodity prices con¬
.

•

Y! I

(Special to The Financial Chronicle*V:.v

another

-

ever

retary, of the Cleveland exchange.

LOS

CALIF.--

ANGELES,

Pierce R. Garrett has become as¬
sociated with Butler-Huff & Co^
210 West Seventh Street. Mr. Gar¬
rett

was

formerly with Cruttendea

& Co. in

charge of the trading de¬

partment in the Los Angeles
fice and prior there

of¬

to was withi

Cavanaugh, Morgan & Co.

.

,

First California Adds Two
(Special to The Financial

Chronicle*

.

CALIF.—Rob¬
Beach and Lynn A. Hart

LOS ANGELES,
ert

G.

are! #ith

party.
.^.•11.

First

California

Com-.;

Mr. Hart in the past was

TITilUnwx

A

T

Aitrnv

JPr

Prv

THE COMMERCIAL & FINANCIAL CHRONICLE

1566

of any size

comes

Wallace Resigns Fiom Cabinet at Truman's
I

(Continued from page 1547)
until

after

for peace,

Con

Paris Peace

the

intend to carry on the fight

diately complied, adding in a note
President, "I shall continue
to fight for peace. I am sure that
you approve and will join me in
that great endeavor."
At 10 p.m. (EST), Mr. Wallace,
in a five-minute radio broadcast,

he

to

ment

for

world," and would resist
aggression, whether Russian, Brit¬

Winning the
portant
It

is

than

more

VThe

success

foreign policy will
ference

between

life

children

and

children.

It

will

of

grand¬

existence

tinction of

man

is

It

of

one

to

and

of

ex¬

and

im¬

supreme

should

we

regard it as

us

the

and of the world.

therefore

portance,

a

every

holy duty

join the fight for winning the

peace.
*

his

for my part, firmly believe
is nothing more important

I,

its

must

relations

there

and

views

foreign policy and

on

those

of

being shared, I am confi¬
by the great body of our

dent,

the

Administration—the

citizens—there

was a

fundamental

We

3Y//YY'

could not

permit this

con¬

flict to jeopardize our position in
relation to other countries.
;
/.

now

to the voters of Amer¬

up

Communist
Democrat

Wallace

as

important
voters

element?

Does

"It necessitated extravagant fis¬

cal policies to give the people jhe
impression that the plan was
working. The people were asked
to accept more paper dollars; in
the
pay
envelopes
and ; fewer
groceries in the basket. Just about

last/ month 1 at: which time

Notre

Dame

University

com¬

pleted its study of assets used for
production.

I

shock you as

it did

sure

this

me.

am

Between

will

1930 and 1940 America's stock of

In dol¬

billion dollar decrease.
age

measured; but ;alX
is look about
mous wear

us

w£/;rieed ? to/ do

ind

the

see

enor¬

and tear to which

our

the

I

'

than

do

can

of peace.

cause

work

"

The action taken

dent this morning

in

the

.

.

by the Presi¬
relieves

me

of

obligation of last Wednesday.
that our present foreign
policy does not
recognize - the

my

I

feel

realities

basic

World

threaten

^

wish

not

granted

led

to

two
now

war—this

time

However,

war.

to

1

which

and

another

atomic

an

which

Wars

I

abuse

the

do

freedom

by the President this

me

morning by saying anything to¬
night which might interfere with
the

of

success

But

ence.

the

Paris

the Executive branch of the
gov¬
ernment
will
make any
public

statement
which

to

as;

is

in

established

conflict

foreign

public statement

confer¬

I do feel it proper to

foreign

policy

with

our

policy.
Any
foreign policy

on

shall be cleared with the
Depart¬
of State.
In case of dis¬

clear up some points about which
there has been widespread mis¬

ment

understanding

referred to

agreement

of

my
Madison
Square Garden speech,
I don't have to tell anyone who

more

matter

will ' be

have:

munists have endorsed. *,
As for the Republican

1*

[

from Moscow.

Defines

"'V "v/

•

Paris peace conference.

fifteen

years ago.
I do not be¬
lieve in two worlds.
I have con¬

Mr.

Byrnes

with

me

that for the

past

14

America has been practic¬

ing "economic cannibalism."

(See

"Chronicle," July 18, first page).
"For

150

as

years,"

"profits

stated,

consults

Mr.
Reece
recognized

were

desirable and decent institu¬

a

V

.

Administration

■

cannibalism'

no

,.

plans ;on
of ;'eco¬

resuming -its: practice
nomic

the

or

in

that

eight

destroyed 20% of our tools
and, in addition, continuing many
harmful war-time controls."
1
>
years

'•"Vv-V

often and the policies which guide
him and his
delegation have

tion—and for 150 years America^
stock of tools /continued to in¬

full endorsement.

crease

Wallace's resignation as
Secretary
Commerce at President Tru¬

economic
word

dreadful in

man's

They

were

'

WM

i,

.t

t

-

,.

and: bewildered. human V beings face the facts and act while

has

involvedf their

own

fate

tiijne

remained.

This /disaster, must not be repeated. There is/ therefore, much5
knowledge
and
material
with
which to build and also; bitter,
dear-bought. experience to' spur

the builders/

1'

1

I was vexy

glad to read in thej
newspapers tWo days ago that my
friend, President Truman, had ex¬
pressed his interest and sympathy?
with/ this; great/design/YThereiist
no reason why a regional organi-p?
zation

of Europe should in any
conflict with the world nr-

way

gapjzation of the United NatiohsX
'

Advdcatcs Broad Natural

enslavement of Europe

or

Groupings

>

as

.

representing this country at the

than

over,

"The

with

But

is f little

there
sign of reform.
V;

'v

well/ and has stretched out hands
Following the foregoing state¬ of succor and guidance—but for
ment, Mr. Reece delivered an ad¬
that, the Dark Ages > would have
dress at French Lick,
Ind., on returned in all their cruelty and
Sept. 21 to the Indiana Republic¬
squalor.
;
an Editorial
Association, in which
he amplified his accusation previ¬
Remedy for ^Tragedy
years,

discarded.

be

war

^ (Continued from page 1545)

the ruin

"Economic Cannibalism"

ously made

frequently/ said* X

have cpmplete
confidence; jn' Mr.
Byrnes and t his delegation now

has followed my views on interna¬
tional affairs that I began talk¬

ing about "one world"

I

As

v

the
me.

the

and all normal economics had

war

ask these questions of the

Democrat candidate for the Sen¬
ate, Mr. Lehman, whom the Com¬

■

/

was

came

York

...

that

along

Churchill Pleads for

It is

New

Party}
deeply regret the breaking of
the dismissal of Mr. Wallace
a long and
by gaze on the • ruins of their ; cities
pleasant official asso-'
public clamor is a vindication of andf scan the dark horizon for the
ciation, but I am sure that Mr.
its repeated charges'. that subver¬ approach of- some hew peril, tyr¬
Wallace will be happier t in the
exercise of his right to present sive actions, typified by the CIO- anny or terror.
Among the victors there is ;a
PAC, have exercised a dominant
his views as a private citizen.
|
influence in the present Adminis¬ babel of; voices, among the van¬
I am confirmed in this belief
by
tration,
quished a sullen silence of des¬
a
very friendly conversation I had
The
President's
approval
of pair.
"with Mr.' 'Wallace on the " tele¬
Mr. Wallace's appeal for the ra¬
That
is
all that Europeans;
phone this morning.
dical vote and his reluctance to grouped in so many; ancient states
Our foreign policy as established
call for the resignation is fur¬ and nations—that is all that the
by the Congress, the President
ther support of these
Germanic races have got by tear¬
charges,
and
the Secretary of State re¬
It is now certain that the full ing
each other- to. pieces and
mains in full force and effect
weight of American public opin¬ spreading havoc far and wide. In¬
without change,
,
' ,
ion is alert to this danger and will
deed, but for the fact that the
No change in our
foreign policy overcome this ^radical element great republic; across the Atlantic
is contemplated.
No member in which ? receives
its
inspiration Ocean has at length realized that
I

scheme

the

down

breaking

The dam¬

done sinceX940 cannot yet be

that

time

the

to

tools decreased by 20%.

lars that it about/35'billion—a 35

Mr.

spokesman?

a

that

gram resulted in no lasting bene¬
It did not stimulate busi¬

fits;

the

recognize

Party

in

eco¬

of

directly question all Demo¬
crat candidates for Congress.
Do
they stand with Mr. Wallace or do
they disavow the support of the

decade

first

ness,

the Bureau of Economic Research

Wallace, he con¬
dangerous
factor
in

ica to

in¬

an

"The actual extent of this

against him. ;

gone

match

the

is

the history of our nation that we
did not make progress.
The pro¬

nomic cannibalism was not known

until'

Mr.

a

ship—-a roving ambassador-without-portfolio of the Kremlin.
It
is

latter

It may mean the difference be¬

tween the

States

in

conflict.^

)

.

United
unit

a

resign from the Cabinet.
It
had become clear that between

dif¬

death

or

/

civilization.

our

•

our

the

mean

the

as

I have today asked Mr. Wallace

death

and
our

of

to

the dif¬

ference between the life

I

of

mean

for

our

ment

politics.:

failure

or

for

Russian
totalitarianism • to - the
American, form of Republic.
He
js now free to pursue his leader¬

any

with the rest of the world.

high public office.
important than any

i consideration of party
.

As

tinues

The people of the United States

stand

im¬

more

already has

to

in¬

macMnery has been subjected for
five years.

the past
"This

It did not solve unemploy¬
repair. The natibn
consuming its own strength ment; we had as many unem¬
devouring its own substance. ployed in 1941 as we did in 1933.

was

American public life.
He is the
leader of the forces in the Demo¬
crat Party which prefer Soviet-

may

^*

is

peace

..<«

,

,

tools

impossi¬

normal

in population; but'it: ilso
impossible the normal re¬

made

in his own party—and this on the
eve
of a general election which

!v.

of

made

the

placement and

swayed, first one way and then
another, by the divided interests

on

?

My fellow Americans:

Paris, Mr.
The
amazibg

Mr.

;

The text of this

radio address follows:

resignation

of

crease

crease

in

policies
merely

not

bearing the burden of

disagree freely and publicly
question, including that of
foreign policy, but the Govern¬

"one

r

ble,

interest

were

Statement

the nations of the world.

firmly committed to

ish or American,

"These

Connally,

The foreign policy of this coun¬
try is the most important question
confronting us today. Our respon¬
sibility for obtaining a just and
lasting peace extends not only to
the people of this country but to

and

peace

the

on

Wallace:

that he would

fight

was

Request

Senator

taxed at
^ ^

were

hitherto undreamed-of rates.

Truman
yielded, 1
Prior to the foregoing address, .fact that emerges from, all this" is
President Truman at a press con¬ that the President is not the mas¬
ference issued the following state¬ ter of his own destiny," but lis

to the

continue

Truman's

Mr.

diate resignation of Mr. Wallace.
The Commerce Secretary imme¬

that

who

.

and

American

President
Truman,; by
telephone, requested the imme¬

ference,

announced further

denberg

Thursday, September 26, 1946

On the' contrary,

I believe

fhiat

the larger synthesis will only .sur¬
vive if it is founded upon broad I
natural groupings in the

Hemisphere.

Western

We British have our

commonwealth

own

nations.

of

>

These do not-weaken—on the con-* \

They may still return. There is trary they strengthen-—the world i
remedy which, If it were gen¬ organization.
They are, in fact,
erally and spontaneously adopted its main support. And why should
a

by the great
the

majority of people in
Aould, as if by
transfifefi the whole

lands,

many

miracle,
scene

and

woul

make

all

Europ

few

a

the

years

greater

there not be
which

can

a

European grouping

give a sense of national I

patriotism and common citizen¬
ship to the distracted peoples bf
this turbulent and

mighty Contin¬
it not take^
its
ay
proper,
rightful place with
one world. We cannot have
peace
welfare of every
What is this
segment of the
so^^ign remedy? other great groupings and help jo
except in "one world."
Reece, Chairman of Republican
population,
v.
It is/to/f^creafe^the European shape the destinies of man?.
;
;
v
I wish to make clear again that
Nat'I Committee, "Rejoices"
'"Then along came the European
family, or as mi$&; bf it as we
In order that this may be ac¬
I am against all types of imperial¬
(Carroll Reece, Chairman of the anti-tool philosophy of the thir¬ can/and to provid^it with a struc¬
ism and aggression, whether they
complished, there must be an act
JV',
Republican. National Committee, ties.
ture under which'-|f (?$n dwell in of faith in which millions of
are
of Russian, British or Amer¬
fami¬
issued the following statement on /.* "In 1933 the Administration be¬
peace,: in safety ahdin freedom. lies
ican origin.
speaking ; many
languages
Also I wish to em¬
Sept. 20 in reference to Henry A. came obsessed with a dreadful We must build ajcind of United
mustK consciously take part.: We
phasize that the one world con¬
tinuously and wholeheartedly ad¬
vocated the principles or living in

cept

must

be

held"

steadfastly;
and that any regionalism neces¬
sary
to give practical form to
world economic and political re¬

my

of

request:

Mr. Wallace is out of the Cab¬

and

with

it

increased

fallacy—and I
sold

the

the

use

true

its

the

sense.

notion

America's economic troubles

that
came

"'and

part of it, as fr
as Switzerland is

hundreds of millions of toil¬
be

ers

happy

In this way only

States of Europe.
will

as

able

to regain the

simple

ent, and why should

all knovy

that the two world wars
which we have passed
out of a vain passion of'a?

through
arose

and hopes which make life newly united Germany to play a;
alities must take into account the
dominating part in the world. Inicans
canbe thankful,
The process is
pie. All that this last struggle crimes and mas- •
but his ture
rights of small nations, just as
economy,
overproduction, is needed is the
»lve of huncollaborator
who
approved the and
sacres have been committed which
the nations of the Western Hemi¬
oversavings. This, they said,
en and wok
Madison Square Garden speech
dreds of millions
have: no parallel since the ;lnv&/'
sphere have done under Frank¬
had caused a great concentration
still is in the White House,The
men to do right i
$ of,wrong,' sion of the Mongols/in the foutlin Roosevelt's "good neighbor"
of wealth.
:
ward blessand to gain as th
damage done to our foreign pol¬
teerith century and have no equal
policy.
/v/-//v
"Having arrived at the wrong ing instead of cur
icy and our national prestige has
|/Much work- at anytime in" human;history. The success of any policy rests
diagnosis they proceeded with the has been done u
not been mended. ;
:
/ ':/-y //v
./this task by /'.The guilty must be punished.
Ultimately upon the confidence
wrong cure.
'
the exertions of
As the smoke clears from this
planned Eu/ Germany must be

inet,

for

which

patriotic

Amer¬

from

having to many tools. They
called it by such names as ma¬

joys

worth living.,.

-

,,

and the will of the people.
can be no basis for such

unless 'the

derstand

Therfe

success

people know and

the

effective 'demonstration of Ad¬
ministration ineptitude, one sali¬
ent fact stands out,
namely, that

issues—unless

..un¬

they

the

given all the facts—and un¬
less they seize the opportunity to
take part in the framing of forare

ipign policy through full

as

this debate,

York
t

■

we

man

live

■
.

in

"one

•

'

lition.

live at all.




*

•

we

must

strike

'the

not

dispense

with

He
.

a
i

truce

approved

advance;"

with

Mr.

later

Wallace

which Mr. Wallace
silent.
from

for

•

.

they

were

forced to

the radical intellectual*
administration. They def

upon

its

cided

of

that payment for the, use
tools was an evil, institution,

ignoring /the

fact

that

under

state

ownership the same cost ex¬
ists. "*■... v
-v.'-;
/'/,
'/"They made it as difficult as

Finally,
Mr.

possible for individuals and

cor¬

porations to add to their tools

vo¬

or

even

first

in

Mr.

own

was

under

Byrnes,

he

under

to remain
pressure

Senator

replace them

as

out.

Business

forced to pay

the

hedged. Then he sought to placate
rising public opinion by forming

not

world"

'

"two worlds"—but whether

did

speech

I said in my New

as

also

Wallace's services of his

expect them

rely

so

,

What

How we resolve

speech, will determine

whether
or

we

to

American people is that Mr. Tru¬

we must respect
rights and interests of other

peoples, just

seen} fit

.

and open

| In this debate,

to respect ours.

has

gamble, for the' radical vote in
New York and elsewhere with
the
nation's security.

debate.

the

President

."To do

was

they

wore

much

to

bfenhove-Cal-

Count;

anded

ergi /and /which

the

bias .been/done, as it .will;be done/
of/ the/Wmous't French is /it/ is /beih&./done/: theri; ^there
patron> and rstate|hian, A'ristide mast be an* end to retribution,
y 'Briand.////:• •/'
|
; There is also that immense body Wants "Blessed Act Of .Oblivion?.
-

....

,v....

of

doctrine

was

and procedure

which

brought into being amid high

of its

It failed because these prin¬

principles

or concep¬

ciples

porations

prevented

from

states

who

to

meet

being.

It failed because the Gov¬

changes.

All

in-

blessed act

must look to the future.

cause

tions.

reserves

a

League of Nations did not fail bet

Cor¬

up

must be what Mr.

called

livion.

divi¬

building

There
stone

hopes after the first World War.
of Nations. The

I mean the League

out earnings in the form of

Van- technological

rearm; and. make another
aggressive/war./But when all this

services'

dends, wages and salaries.
were

deprived 6f the

^h';/owes.w,so-- power to

Union//

ropean

were

ernments

deserted
had

brought

of those

those

by
it

into

days feared to

upon
not

We must all turn

our

backs

the horrors of the past. We

afford to

the

Glad¬

of ob¬

years

We

can¬

drag forward across

that

are

come the
which have

to

hatreds

and revenges

sprung

from

the injuries

of the

past.
If

Europe is to be saved from

infinite

misery and, indeed, from

Volume 164
fa.

^

i

'•

.

Number 4528

,v''

' T

'final doom, there must be this
of

faith

in

THE COMMERCIAL & FINANCIAL CHRONICLE

'

act

readiness of all

and

men

the

European family to die rather : than to
this act of oblivion against tyranny.

„and

ish
Commonwealth
Of
Nations,
to mighty America and, I trust, So¬

women

Submit

viet

Russia—and then

indeed

all

the crimes and follies of the
In all this urgent
must be
work, France Would' be ; well
past, and the'free peoples of ;;Eu- and Germany must lake' the lead friends and- sponsors of the
I rope must rise to 1 the
height of together. Great Britain, the Brit¬ Europe. Let Europe arise!

With
ficial

all

have

Is there

/g'?/

need for any fur¬
conflicts; or agony? Is the
biily lesson of history to be that
mankind is unteachable? Let there

(Continued from

.

unbelievable

events

-still, goes

oriXXXX:X V "XX'X-y--v/'X'
The

ther

Labor

Situation

Take, for example, the

present

irresponsibility being displayed by
be, justice, mercy and freedom. the, leaders of organized4 labor.
They again have challenged the
The people have
only to will it in

order to achieve their heart's desife.
v.-;';4'-\4/;.;..4
i

•.

I

am

thing

now

;•

■

to

going

.

which

-.v.

.

will

say

'•

•

/ you.

The first step in the, re-creation of

of government and defied
policies of the Trumd'n Ad¬

the

ministration.

;X

The maritime

up

'~

XXX- 'j!'*XX:'

controversy points

sharply/ the futility of govern¬

ment in

the

attempting to manage) a

iSart
11«»
European family must be a part frnn "o«/I part
free and
Federally regu¬
partnership ' between t France and lated'economy.
XXX''1XXXMXX
Germany.; f:/, X[ XX' XXX ■:. XX /' 4/: ; / In the opinion of a few mem¬
X. In this way only, can^Frahcfe re1 bers:/, ofCongress, /whoare*/- in
Washington,' the Administration's
wage vpolicyX is now. a complete
,no

>

^T^^^CahcbSS

Eu£;

withoutf a spiritually ' great

rope

France

and

a"

,

spiritually^ great

Germany.
The

r

*

-

structure

of

the

*

United

States of Europe, if well and truly
built, will be^iich as to make the
material strength of a single state

less important.
.4

Small

much

as

.•

.

count. as

.

ones and

gain their
,

hqhor by their ;cbntribUtiqiL,tb' ^
common cause.

The ancient ~states

and

principalities of Germany,
newly joined together into a fed¬
eral; system; might Itake their: in¬
dividual place among the United
States of Europe.
•
,.

'< 1 shall
not : try to make a de¬
tailed- program for hundreds of
millions of people who want to
be happy, free: and prosperous,
,

and

wish to enjoy the four free¬
doms of which the great Presi¬

it

:may,;

as

well Address.

This,

\

.

T

4

as you know,

ator White.

ficially empowered to act in for¬
eign policy for the United States*
\ The • Wallace foreign program
seemed to hold up pretty well
from about 10, p.m. on Thursday,
Sept. 12, until about 3:30 p.m. on
Friday, Sept. 13.

Senator

friend¬

was

for all, but alliances with
"■;/'
<K
-■
After the Churchill speech, the

none.-

■

■

■

foreign policy of the United States
in the eyes of the; world was this:
J / The United States and the Brit¬
ish

Empire have // joined
spiritual union. 4

ttThe

reason

in

At 3:30 p.m. on

ning the State Department in the
absence of Mr.

other nation in the world could

He told

~

recurrence

a

of similar situations.

dbmand /for
tion.

a

little, Means

a

compulsory/farBtraJ

•

;

'

there

.

.

straightened

you're

.

out

the

on

all
nation's

now

foreign policy . . ; and Mr, Wal¬
lace is leaving for Chile as Mr.
Truman's special envoy to the in¬
augural ceremonies for
Chilean President. 4 ~

the

new

The second unusual thing is that
the policy was announced by Mr.

by Mr. Byrnes at
least set the record straight. No¬
body kndWs whether it set -Mr.
Stalin straight.
'*

■.

.

Truman's Domestic Policy

:/ /

'

And now let's take a look at
Mr. Truman's domestic policy.
:

/ Then, last Thursday, there was
the rather unusual situation of an

Persons who have access to the

White House

the /policy, un¬
less
carefully examined, would
appear conflicting, confusing and
unpredictable.

important announcement on for¬
eign policy being made^by Secre¬
tary Wallace at a purely political
fcnmpaign rally.

This

say

seemingly, in

some

>' \ '•/
/ 'X";'
Senator Brewster, the
.

,

Senatorial

nominee,

re-elected by 64% of the vote.
on the percentage basis in

was

So

Maine

you have a percentage so
close to the betwixt and between

of the 65% borderline

figure

to

as

indicate that the November elec¬
tions

decidedly in doubt.

are

Members

of

the

Democratic

Republican

and

clusions:

these con¬

\

>

Republicans
will
in: both houses.'

First —The

strength

gain

,

however^

in agreement on

seem

>

stags of both

«
•' '// •'..'/ "' ••/
•/ 4 ' ■'// " J
Second—Whether the gains will
»

sufficient to

give the Repub*

licans control of the House is un-»

certain

and

..

:third

—

v.

would

Senate

the

*

control of
surprising.

Republican
be

So, being unable to decide that
question as of the present, Wash7
ington political thinking turns to
conclusions as to what to expect

next winter. 4

of Congress

First—It

4 / /'

certain that Presi¬

is

dent Truman will resubmit all of

the ClO-endorsed legislation pro¬

CIO
have

sponsored

■

last

its

numerous

bills de-*

signed to strengthen the Produc-f
actual, inconsistency results from. tion Act of 1946, which is better
Mr,- Truman's efforts to-carry out known as the old Full Employthe ClO-endorsed legislative pro¬
ment bill.
1

f

-1-

which Congress rejected at:
session. In addition, the
and the New Dealers will

gram

cases

Roosevelt

'

re¬

of the

Republicans came
capturing the

4

Republican

be

So

this, yet labor is now movihg to Wallace, whose Commerce De¬
saddle such a situation; not only partment has been stripped by the gram inherited from Mr. Roose¬
spoke, and live
velt and, at the same time, obtain
I upder the,, principles embodied in upon itself bui also upon indusrty. Roosevelt - Truman 7 Administra¬
tions of every foreign function it conservative-minded men to ad¬
I the Atlantic Charter."
' " ; *
minister the affairs
Aiding Communism
«
of govern¬
ever performed.,
1
t
But this is hot all organized la¬ 4; And the third unusual thing is ment. Recent appointments by the
Wants Immediate Action
President have set set union lead -1
bor leaders are doing.
If this is the wish of
Certainly that Mr. Truman announced at
Europeans
the shipping strike coiilcl not have arpress conference that he fully ers in an uproar.
hrso many, lands, then they have
come at; a more opportune time
•The President is represented as
approved of all that was said.
only to say so and means can cer¬
for the Communist movement in
But the unusuals do not stop feeling a moral obligation to sup¬
tainly be found and machinery
N
America than if the strike had here.
port the Rppsevelt legislative pol¬
erected to carry that wish to full
been called in Moscow.s
.Mr, Wallace proceeded to divide icies.
r
.^4'!' ./■;•;; XXXXX: ;4:4 J' XXXX'X
fruition. But I must give warn¬
The Paris peace conference is up the world into three parts.
-But, at the same time, Mr. Tru¬
ing; time may be short. At pres¬
in a nervous pitch, and the fol¬ China was left to
China.; The rest man also is represented as believ¬
ent there
may be
a
breathing lowers of the Kremlin ard
seeking of the world was then divided be- ing union leaders have been, using
space.
Tl\g cannons have ceased to
J portray to the ; world that ween the United States and Rus¬ the prestige of the White House
firing. T^ fighting has stopped,
democracies (the United States in sia.
/
H
too much for their own advantage.
but the dingers have not stopped
This would indicate that Mr.
particular) are weak, vacillating
Thus, those who think they
If we/bre to form a United and
lacking in stability. Nothing Wallace simply swallowed up the
know the President's mind look
States M
Europe, or whatever could better prove their conten¬ British Empire.
for him to use one hand in moti¬
name it may
His speech would seem to re¬
take, we must begin tion- about
conditions
in
the
vating the ClO-endorsed Roose¬
now.
-In these present
days we United States—conditions brought establish the Churchill policy of
velt legislative urogram and the
dwell strangely and
an
alliance between, the United
precariously about by the union leaders.
other hand to pick the best men
under- the
The buccaneering attitude of la¬ States and Great Britain. ;
shield, and I will even
obtainable
regardless of the
say protection, of the atomic bomb. bor is sending1 chills down the
Also, Mr. Wallace made an im¬ CIO and New Dealer
objections
The atomic bomb is still
only in spine of the -New Deal politicians portant omission.
He said ; Mr.
•;
to administer the executive
the hands of a State and '/nation who have held office for a decade Truman had
approved his parti¬
departments,'
which we know will
i" 4 .
and a half
dent

4

This year

,

.

tual Federal regulation of profits,
Labor has sMd: it wants none of

House.

present the Wallace viewpoint On
the foreign situation.

speech before the Society of the
Friendly Sons- of St. Patrick, the
Secretary of State repudiated, the
Ghurchill pfohouncement.

know,

as you

for"

up

67%

within nine seats of

but/.

1$This speech

,

Saturday,

on

Truman

.

a

Whether the top - labor. leaders
know it. or not,' their attitude in
Supporting the shipping strike is
likely to bring public-backed re¬
quests for compulsory, arbitratiori
of strikes.
This would ultimately
mean
(1) !-Government/I fixing
wage rates, (2) which would;lead
shortly to Government determin¬
ing pribe policy, and (3) the even¬
4

was

received

the

and

explained that Mr.
Byrnes' again was in charge of
foreign policy; that'he simply had
given Mr. Wallace the right to

•

In

White

election he
vote

Sen-/
\ )

later in 1942 when

years

the

Then

' '

policy from British hands.

Six

present

National ...Committees,

by Mr. Byrnes
American policy.
4

were

Mr.

the T Then//too, the rest of-the world

preven.

was.the

candidate

conference that

news

Republican Senatorial nom;
with only 51%.
The

won

still

ifresponsibilify/:displayed/by,^6r^ thinks/of spiritual unions as being
ganized Tabor : holds an ominous headed up by a general staff.; 4 ^
Ten days after the Churchill
threat for both organized labor
and business, in general; :Tt fore¬ speech, Mr. Byrnes made an ef¬
fort to retrieve the United States
shadows a demand by the genera
public for legislation to

a

inee

pronouncements

a

discuss

of the head of the nation in which

speaking.

some

offer, and he suggested
that certain portions of U. S. for¬
eign policy as enunciated by Sec¬
retary Byrnes be respected. /

spirit¬
ual,; material or any other kind of
union without the prior approval
was

Byrnes, had

views to

no

foreign statesman

Friday, Sept. 13,
Clayton,'who is run¬

William L.

a

for this is that in

Connally

,

ship

,,

as

•

defined by Mr.
Byrnes, was on the same key set
by George Washington in a Fare¬

he

,

X But be; all * this

This, spelled out

nations- will

large

Wreck.

1536)

page

United States,

power

some¬

astonish

Maine

and Vandenburg are the only ones abroad of¬

of

any

car-^

The question also arises as to
is doing the scheming.
As
far as is known, Mr. Byrnes and

..

^

In 1936 when Mr. Roosevelt

ried every state with the excep¬
tion 6f Maine and Vermont, the

Senators

been washed away on
by the miseries which

have been endured.'

Republican Senatorial candidate
polled 61% of the vote.
f

admitted

who

../•If they can, the wrongs and in¬
juries which have been inflicted
sides

that

has

nation

a

.

,

country was scheming
against another friendly power.

new

these resolves of the soul and of
the instincts of the spirit of man:

all

of

Carthage
an of¬

.

.

that' his

the

'

will

- phrase
destroyed .4

the

must be

<

4

this,also,.-, is

Second——And

'/t,

;

H

;

4-4-1

/

&

point—Neither the Presi¬
dent nor the CIO will control the
next Congress.
Even if the Re¬
publicans fail to carry the House
4-4; a conservative RenublicanSouthern Democratic coalition will
certain

control.-

/
No Tax Reductions

:;v4/4v

\

"

.

,

...

.

never

except in the

cause

freedom, but it
that

in

may very

few

a

use

well be

this awful
destruction
will; / be

of
widespread
agency

years

and

.

the

following from its

use

catastrophe
by several

warring nations '' will not X only
bring to an end all that we call

civilization' butl may possibly/dis¬
integrate the globe itself.
I must

now

tions which

sum
are

up

;

the proposi¬

before

us. •

Our

constant aim must be to build and

fortify the strength of the United
Nations organization. Under and
within that world concept, we must
recreate the European
family in

regional structure, called, it may
be, the United States of Europe,
and the first practical step would
a

be to form

If'at
not

a

willing

union,
ceed
lose

Council of Europe.

first all states of
or

able

Europe are
join the

to

we must nevertheless pro¬
assemble
and
combine

to

who will and

can.

The sal-

/ation of the people, of the

com-

non
people of every race and
land, from war and servitude must

be

,

established

on

solid

by virtue of the labor

it

of right and

founda¬

The fear of this labor vote
in November and in 1948

vote.

virtually
paralyzing the thinking of some
of the politicians in the Adminis¬
tration and thereby stimying much
is

of

the

efforts




in

the

Truman Administration to restore
some order out

of

the

world.

He failed

-

whether he had cleared his

say

speech with Mr. Stalin.

Then,

United

Nations/ must- administer

the oil supply of

all

nations

the Near East to

alike.

Then

a

little

olchaos,

the

.

x

',4;: The Next Congress
lAnd

there's another baffling
aspect.; '.Mr, Wallace
said
the
-

,

to

^ XXX'.:\-r later he said the world atmosphere
strange doings of Ihe was not
ripe for a World Federa¬
leaders of organized labor, are not
tion and that the United States,
the only need for a Shakespearean
the British and the Russians must

,4 But

now

Congress. >

for'a look at the next
'

;

.

Unfortunately,

^r^X-X'XX^X
no

is available,

swer

Frequently- :" the
elections offer

a

clear-cut

an¬

won

the next two years to

carry

in
out

V

"

this year.

easily, the vote

was

the

and

X Fourth—Republican control of
the House would initiate a move
to ecmalize the status of manage¬
ment in dealing with labor «> . the v;
elimination, of

.^

Communists

:

out of business.

Most overlook the fact that this
is the second convulsion over for¬

eign policy within the
Mr.

Truman

has

year.
had

.

/. >

names

ically

are

so

Wallace.

The

mentioned

alphabet¬
determine their

you can

arrangement in importance.

recognition
Empire in a world
between the Russians

British

sitting
an

on

man

in the presence of Mr. Tru
—
the foreign
policy of the
q

.

sidelines tagged as

"exemption."

ance

by

Mr.

7.
one

_

other utter¬

Wallace

worthy/'of

note: He said the "Russians should

stop Conniving against
tain

areas

us

in cer¬

of the world just as we

should stop scheming against them
in other parts of the world."

As far

Fulton, Mo., speech early this call, this

year

the

Then there is

Well, until Mr. Churchill made
his

a

divided up
and Americans with the Chinese

Three

spokesmen, exclusive of himself.
They are
Mr.
Byrnes, Mt.
Churchill and Mr.

Here again he gave
to

in

as

Washington could re¬
the first admission

was

Tast experience would indicate

that
a
Republican
victory
in
Maine by 70% of the vote is a
forecast

for a Republican
slide in the nation. ///

land¬

Also, past experiences

indicate
Republican margin of 65%
indicates the Republicans will not
gain materially—if at all—in the
other states.
4
'
.

that

and

J

^

thought to ponder.

and

Georgia,

4:r4,,./

<

,

Both Senatof *
Democrat of
the

""X; f;'

and

Wallace are in agree¬
one thing:
4' • 4 4;; '/vl'1;-

Secretary
on

It is that further tax

reductions,

-

are

^

two instances.

when Mr.' Hoover swept

In 1928
the

na¬

tion, Maine gave the Republican
Senatorial nominee slightly better
than 70%.

In 1930 when the Democrats all
history since uaiu ended jns
Cato cnucu his
speeches in the Roman Senate but captured the House, the Maine

***

substantial tax r®duction until there is a curta^ ment of foreign fiscal commit¬
likelihood

of

ments.

Three Join Dean

a

Here

(Special to

,SAN
Earl C.

The Financial

FRANCTRGO.
Elliott.

Chronicle)

CALTK

—

William H. Hop¬

and Phill.iD M. Li^hty have
affiliated
with
Dean
&
Co.,
45
Montgomery
Street, members of the New York
and
San
Francisco
Stock
Ex¬
kins,

become

Witter

changes
tional

■ ,

conclusion, there is this

But in

ment

....j.

v'4"44

travelers from the
Federal Government
Jnsure
the demise of OPA m . and genj .
erally. seek to / take government

.

to adequately describe/the

■

fellow

their

,

speare

■'

desire. This results from
commitments already made
unfortunately irrevocable . . i,

XXv X: 'XXX* XX: iXXXXXtifX: X strive to create a world atmos¬ lightest since 1930. This, in itself, in other words domestic tax *** XX'S XX Foreign "Policy XXXX XX. phere Which would, enable the adds an element which should add icv. are now t;ed uo with ,f,
ooiicv,.
: and that there is little/
It would really take a Shake¬ United Nations to
caution to any conclusions*
function.,:

recent" commotion with reference
to American foreign
policy.
4

v

i,\I/

fiscal

..early
case

!■-,.
•..

ments

Chairman of
Senate-fFin»noe -Committee,

Maipe

•••-

'

anything like the economy pro¬
gram which all conservative ele¬

George, conservative

-4Even though Republican candi¬
dates

would find it difficult

House

44.4,*:

good bellwether.

But such is not the

/ Third—A Renublican-controiled

ten

11

tions, and must be guarded by the'

of> others

tion

<

:

and

other

exchanges.

leading

na¬

,

-

:l

THE COMMERCIAL &

1568

,AA\A

(Continued from page 1533)

•

ience), is

three

follows:

as

Great Britain

Belgium

Luxemburg

'

.

USSR
■

Canada

-

■

Brazil

Norway

v?

Negotiating Committee .meeting, nur
group), together with the Department
Department and the Tariff Commis¬
sion, will have a very onerous job in formulating our proposals for
tariff schedules: Jointly, with. the Administration's Committee for
Reciprocity and Information, they will hold hearings for all industry
between now and when the Negotiating Group convenes.
•/>?•'; -AAA/ A- A
i
...yAv
f;.;A A * c A*
* ~ •' .v.". "AAA",A'I'"-•'AA"'.*• "
.

•••

'

£Too Many. Conferences?; "A; A /1 \ : 3 i>1.;,

AC A'AA

above-detailed; schedule apparently -harbors - one potential
danger—that too many ~ conferences', with indefinite results' if not
The

serious controversy,

will limit the efficacy of the contemplated Inter¬

debating society.
conversation, on

national Trade Organization to that of just another
As an offset to the possible overproduction of
'

State Department officials hold that the current
meetings afford several advantages over the many- "pious" confer¬
ences held between World Wars 1 and 2Now, it is felt there is a
other

the

hand,

definite and direct tie between action and principles—helped by the

signing-and-adoption procedure—in \ lieu of the previous sanctimon¬
ious, but relatively academic, resolution technique.
Currently, this
constitutes concrete evidence by the biggest Powers that they mean
business

and

putting principles i into practical effect—furnishing

are

examples to smaller countries and encouraging them to join in.
"Z *

5

According

to

International

the

.

-

Deposit Insurance Corpora¬

tion to which enough credit will

bankers

to

dozens

and in private conversation by

ers.

The
-1

more

more

men

in¬

and bank¬

I have listened, the

little

have; -realized, how

your

about

leadership and

ground than if they come to
ington. A Therefore AI

Wash¬

have made

administration; they

.

continue the dynamic constructive
force in their

respective commuhiA

ties, if they perform their duties
as
trustees for their depositors
the

sources

of sound loans for
expan¬

sympa¬

InternationaT Trade. Organization which will have
either to* approve or break them.A All preference

wide discretion
agreements,; like tem;1aaa
to, negotiation.
^ '
-Danger of Federal

Furthermore^r-of. great - importance—it is. provided that if a
country . makes a i reduction :in; a " preferential - tariff ^vis-aAvis oiie
:;;)^tion^'^e,r^uctioijL' mu^Tikmvise: he appliedproportionately to all
:

.

lize that the Congress cannot pass

banking.

dustry and

Because I am a new

public ser¬

vant, I feel that you may be in¬
terested because of the position
which

trend

I

in knowing the
thoughts along cer¬

occupy

of my

tain lines: and

Lam going to give

an < outline of - some ^ of my
views. I am doing this because I
you*

want vou to

tell me personally or

illiA thoughts

of Banking System

j

are

with your

,

.

.

■

.

.

*

,

r

-

.

r

.

in

each in¬

stance, and that some things have
to be left to discretion; but I think
these discretionary powers
be few and far between

ation.

should

and exer¬

great care and deliber¬

cised with

/

/ '//A/;*'.;

Aipy a

;

fear that some of

A Because of my

A regulations

issued as war
have outlived their
usefulness. I ask that we" review
such
regulations. : Certainly ■ no
harm can come from a reconsid¬
eration of any action.'If,.; in the
the

measures may

not far out of line
The reason I am light of present/day circumstances,

t believe the
administration, of;, this

foimdest

of particulars

bill

a

own.

Absorption" doing this is that

:' During' recent years,", "in the' jpb^ whto^L
plague of government securities, be to reflect as far as I can a con¬
Countries.
In other words, a differential cannot be widened.
•
"
1
r••
• <-•;>;
--.-A
>--v
•
government • guarantees
of
all sensus of the best contemporary
'.v
'./L'"-''*.;>■/V -'•* ■V/V'.-.* \s/l.' v
sorts " and government participa¬ thought/11iijiye,. very .definite
a -M Commodity Arrangements and/Cartels
tion in loans, the science, pf rates ideas about .most things but1 hope
It iS-hbp^d thatHhe working rules of the iTO will eliminate the and risks has been all but lost and they are^ not arbitrary, and J hope
existing Confusion between, commodity agreements and cartels. many banks and many examiners I am not too hard-headed or too
Where. - arrangements
represent... government-to-government
state now -hesitate to - take a business stubbornAio give weight to con¬
enterprises, the cartel provisions-apply/
/
'
nbk in: the making of h loan;; but trary opinidns.: no ^.matter, from
The prospective; regulations Acla^ddwri an cohimddity agreed rather
rprefer to takb the easiest what; source they may come; - and
ments, particularly; Where "there are 'a large number of independent way- sihd when in doubt t>uy govA •I shall certainly give weight ; to
producers.
ernment
paper
or
government ariy opinion : expressed ; to ' me
*
Bulk purchases will riot be wholly forbidden, although they will
guaranteed-papery I think this is from any reliable source, a;
A.-ii' ''v;A- A''•A- .*►£•' '••?'.•
,-A
^rendered difficult to justify.
A
A
.
a
bad trend and it is one which
Public Servants Should Not
Furthermore, the proposed Charter recognizes that in the case of will surely: lead tothe' total abn
certain commodities, as primary agricultural products, unique diffi¬
A -' Partcipate in Business r ;
sorption of * our; banking system
culties—such * as a world surplus—might legitimately warrant the
"Ayou notice - that I have used
by the Federal government.; 5
adoption of intergovernmental^ commodity agreements to regulate
the words just now "public ser¬
The trend toward government
production, trade or prices. " Such regulatory commodity agreements
vant." I chose those words delib¬
participation A (as1 distinguished
are specified as justified, if they are necessary (1) to enable countries
erately
as
having • considerable
government regulations)
to solve difficulties which are caused by surpluses without taking from
difference in meaning from the
unilateral action; (2) to forestall the injury to producers or to labor should be stopped and the local
words "government official" and
which is caused by surpluses when production adjustments cannot bankers should again take their
"public official." I am afraid that
be-made quickly enough; or- (3) to provide a working arrangement pqsitidns i as a the . financiers : for
some, of us in Washington may be
Tor a transitional-, period during-which remedial measures may be their communities, and get as far
inclined •. to - Aforget tliat, :Ye; ?Fe
taken.-wv •
/"A AAAAA. AAA A:AAAA- A AAA aWay A;"as'a is ' practicable ^" from
eternal government guarantee and public servants and remember too
well that we are government offir.
participation. Banks cannot
do
Other *ancu Functions
y•
;*■ "
y-'.VUICIvV Varied *• UUVUUI1S».
cials - and as such we are apt. to
?;
'
without
cooperative
..

govern-v

.

under;: your

constructive,

-

the

turn

people through
their ;• duly.
myself a schedule which calls its
about V3 of my * time, elected representatives in A Con¬
in following this schedule T gress.-1, resent and I will alwayshope to visit each one of you from fight any, effort that may be made
time to time in your respective by our Board or any ;other board:
action" on any .matter
state capitols arid talk with you to: take
where such action is not definitely
on the problems as seen through
your, local eyes of farming, in¬ authorized by the Congress. I rea¬

.

V

to

ment of the United States back to

and

"
a.
thetic and understanding leader¬ by letter or by telephone il you
the proposed Charter ' provides that there shall
ship on the part of their supervis¬ disagree with me, and .if I get no
be no exchange restrictions imposed on commodity arrangements
ing r examiners, both in-the State signs of disagreement then I am
and that all bilateral agreements t will have to be submitted to? the
that my
and in the Federal Reserve Sys- bound to conclude

up

ministration

for travel

.

opened

It."

■

for

administration of these systems. If

■

the Ottawa one, are to be

r»

-

.

.

»

»•'."•*»

-.

-

—

Bilateral Agreements Would Scuttle Trade Aims
sion, if they take to their hearts
Great misgivings have been occasioned by the emergence of spe¬ the interests of their people and
cial bilateral trade agreements, -as the recent pact between Sweden
carry out their mission as guides
and the Soviet, whose details have been obscure.
Prevalence of of financial and social develop¬
such narrow: arrangements would surely scuttle, the world leaders7 ment in -their communities, if,
they
contemporary intense efforts -toward expanded international trade. do these things, their future is'seFundamentally, it is hoped' that—as it is lack- of foreign • exchange Ciire.AAA:;;;y
which has allegedly incited these special barter arrangements—oper¬
But these "things they cannot do
ations of the Inter national- Monetary: Fund jvill repder: such bilateral
without
a '
,

A

,

•

,

-

.

legitimate enterprise and

.

a

■I; know- and I hope very much to

'

any- event,

Undoubtedly;;now: :^cfe$s$$y.. and
to: be.'- so. .'But - only
few instanres of Agbyernmerit

Will', continue

.

as

.

government competi¬

undoubtedly necessary
during the war. Many controls are
was

,

collaboration in trade and related matters.

In

tion

'

/AAAA VA//mA/AA:A

i

control and

-

relaxation

deals unnecessary.

listened

and

dozens of talks in meetings

"v/^A'A

Some of this regimentation and

.

and regulation of barriers to world, trade,
whether such barriers are imposed by governments or private organi¬
zations*; (3) to provide an orderly procedure under, agreed rules-for
the negotiation of inter-governmental commodity arrangements; and
(4) to create permanent international machinery for consultation and
general

personally to hundreds of

govern-*

participation or, 'competRidri^were
probably never be given for the cpntinue the remaining years of actually necessary during 'the;war;
fearless and constructive way in my administration of the position and I know^of but T^w- instances
which it has A administered- and •in .studying and' learning as well off hand where they are 'necessary
chused to succeed a system of de¬ as in execution. A *-- 'AiA'-A'A-A-A- orr desifable.oi::A;■■■
'i
/'
'
; .v:
"'A.;.' •*.:■"> A' V-'1---A--'A 'r-"posit guarantees which many of
t
; -You probably know,. I.;arri sure,
Artificial Atmosphere of \us not so far-sighted had thought
that once a board; or-: burieau; is
S iAAA.I Washington-.;
v'A.c
tb be fantastic and impossible of
created in W;ashmgton itA is ex¬
sound
administration A I
| In my; mind there-Is just one
figura¬
tremely difficult to. ever eliminate
tively doff my hat to this organi¬ spurce of accurate knowledge and it-and there 'is
always'f a/danger,
zation and wish for its continued- iriformati.oil" and that is the busi¬
that: it may become, m^re' qpriness
man," the farmer1 and-tb/a
energetic life to carry on the
cerned with self-perpetuation than
splendid
work already ' accom¬ banker, themselves in their own in
being
of
constructive help.
communities,. The atmosphere of
plished.
There is also a danger that some
And
then
there
are
the
48 Washington is so artificial that it bureaus and boards
may by-pass
wheels consisting of the State is really hard to get direct accur¬ the
Congress to issue regulations
ate information there. Even when
banking systems — both member
and make orders and take action
and non-member banks
and it men come to Washington from
without regard to Congressional
is to these that I bow tonight in the various states for the purpose
expression or- Congressional- in¬
of expressing their opinions they
cbmpliment of their achievement
tention. AAA;;/; >,: A AA AV:AA A;.r
apparently become somewhat sub¬
iand present- prestige1 and thei^
Congress■ Supreme;;
future potentialities. *;/ * x A\; dued and awed by the atmosphere
11 consider the Congress is su¬
j ( The future of these all-import of the place and I have personally
tant State banking systems largely found that I can get more candid preme, *;and I am in hearty :acA
rests with you, Mr. State Super¬ impressions; on the citizens' home cord with the efforts of this ad¬

.

Trade

(I) to promote the maintenance of employment; (2) to bring
the

our

Then there is the Fed¬

5
a : " r visori/And whether they live or
Department,;
is. largely
major/aims: die; manner of ; dependent a upon
the

>

Charter proposed by our State
Organization shall have' four

this

.

..

'Purposes of Proposed Charter

/ 1

,

*

dividual business

powerful, and helpful in

economy.
eral

In advance of next year's

A

upon

and

Chile

New Zealand

talked

foresighted administration of the
National
Banking
System
has
made that group of banks strong

State Department (as a policy
of Agriculture, the Commerce

•

the Currency whose efficient and

Cuba A;

Aus.ralia

§

listening and learning. I; have more absorbed by the
(Continued from page 1537)
Treasury and the Comptroller of traveled many thousands of miles, ment.;A/-AA ' '" -A- A

Lebanon

Czechoslovakia

C *

•. <

• »

India"

;

South Af rica

I

/

IJrS.
:

-

Netherlands

China

V "i \

!

having been included foi4 procedural- Conven¬
*
A'A x
' >
1
it
'
f
? $AA

France

Thursday, September 26, 1946 S;

Government and the Banking System

Observations
last-mentioned

FINANCIAL CHRONICLE '

.

our

ued

regulations should/be ".contin¬
and in their present status
,

soundly based on
Congressional ' authority, A then I
shall certainly, support:them. But
if in the light;of present day cirand

if they are

antiquated,
that they
be either brought up to date or
dropped. And if there is no ^clearly
indicated Congressional authority
for such regulations, then I hope
we will ask the Congress for
an
expression ofAits desires.
A;/A;
cumstances' they A are v

shall' certainly

I

hope

.

-'

■f

again,

A Referring

$

gress,

;I

hope

you?

-

.

;

.

■

There

"5; J.
wide

■:}

;

'

«..«>

r

is

a

and

■

y\A

;•

.•

y

all of

The ITO's Structure

.•*■>

-

."/A

:

:

A

.

supervisory capaci¬

the banks make

side
.

A

in a

us

ty will do what we can to

A. A-. A. 'A

-

of the exam¬
and it is to be hoped that

understanding

iners

.

A/"

help

the

this

j

variety of miscella'neous functions additionally
suggested for the. ITO."
Among- these - are assisting and advising
members and other international organizations about industrialization
and general economic development projects; and promoting interna¬
tional agreements concerning capital movements, technology, com¬
mercial travelers and double taxation.", • i~
> /••.
- A:Ay:,-

:,.

:"

of the government

Gentlemen,

grateful

-

for

field.■

I am - particularly
this opportunity- to

have met with you and

It is contemplated ..that the principal organs of the Organization
will be: a governing-body Conference/an Executive Board; a Com¬
^

help

sound loans out¬

listened to
you talk at this-t&rly stage of my
experience as a member < of the

that these

mind

to; the Con¬
will; bear ; in
hu- ;

people, are

and that they
subjected to tremendous pres¬
sure
from organized groups and
that they are pushed, pulled and
shoved from every angle.. But if
some
twenty-five years' experi¬
just

man,

as we .are,

are

in

ence

does not

and out of Washington
deceive me, you will find^

good personal con versa-;

that

one

tion

with your

Congrcsspiari^will

him than any.
petition. A; /A -AAV-As

have more effect on

memorial

or

.

forget the purpose of our
in Washington, and what
we

into

presence
is worse,

"liable to inject; ourselves
the business life of our coun¬

are

try to a degree far
which is. necessary or

beyond? that

that was in?
tended by the Congress. There has
already been too much of that.in
my opinion and after six years of
absence,' I am surprised at the
complacency with which American
labor,- business people^ farmers

-

; Advocates

;v
A

A

A;

with

'

^

I advocate

our

Personal Contact r r

* Congressman;7
A ;
'Lf .1-

'

•
.♦

personal contact'.with

legislators. If

you

believe in

private /; economy
which we now have and which has,
carried
us
successfully. through
the trying years of war, and will
the

type

of

.

see

us

through even more trying

of reconversion, then go,to
and .tell himj
so: personally. .Give him; your .sup-*
a
Board of Governors of the Fed¬
arid industrialists, • and, all other
V
;pc|rt jri his efforts.:- tpA-check ..tlije
Like the entire Economies and-Social Council, the Internatiorial eral "Reserve System. At the rrioTrade Organization .envisages, a very broad,'scope'of lofty- aims whose Iment.1 am rounding out my first cl^ssesj have accepted regimenta¬ present necessity and status of all
these
government ; bureaus and,
achievement-is meticulously charted-under*a widely*ramified organi¬
| si^: months in this position. Being tion, government interference and
zation and scientifically%devised agenda: ' Whether these* aims can" be a mew man on a very old job, I
corporations and boards . created
government participation^ I am
mission

Commercial

Policy; b> Commission on Business Practices;
Commodity Commission;-and a>Secretariat:-';
y. :/ A • -. on

years

vour

Congressman,

_

translated into performance; or whether, despite the elaborate "para¬ realized that I had a great deal
during the emergency. Ask him to
surprised at the complacency with eliminate those which are not nec^
phernalia," the factor- of sovereignty and the host of other "tough" to learn if I were to serve you
which : bankers
have permitted essary and return-their functions
practical obstacles to world, cooperationi—will r prevail, As another constructively, and so Lhave given
all this first six months to study, their prerogatives to be more and to; private-enterprise.- But above.
question. ; :
A .,
y r -A,
•

.

:




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[Volume 164

fW'

$*■

Number 4528

»y " I'

»

■'

» V

f>

•

'.V -i — ' '

•

,

proud of our present form of gov¬
ernment and our present, policy
of private enterprise, Therefore,
1 am a devout believer, in the dual
or quadruple- banking .system as
we now know it; that is, the na¬
tional banks, state member banks
and state non-member banks, with
the Comptroller of the Currency,
the
Federal
Deposit Insurance
Corporation, the Federal Reserve
System, and the State Banking
Systems. Ours is the only central
banking system which is privately
owned (if you can call the Fed¬
eral Reserve .Banksprivately
bwned)5 left1 in the1 World today;
All the others have gone the route
of
collectivism, * nationalization,

worthwhile when-they, are
as insurance of a con¬

made

considered

of

tinuation
of
*•/

over-all

our

private - economy.
Just

banks

sure

as
are

as

?

system
; ■ ■J:-.

;

fate, if all our

forced into

one

great

system, controlled by one master
button, pushed "by one master
hand in Washington, private bank¬
ing and private enterprise in this
country will find itself in its dying

days.;

r-f

"'

'*

* ^ UW •* ' '

*»*

"tf'

jAioaaMMoa sht
f " ift* Mvft Wi/.Vi*

.VvV:y'-;.
keep what

:J/;
j Let us
we have and
try to pass on to our children and
to our; grandchildren at least sonic
1

fathers handed down to us.

attitude is wholly unrealistic and

widespread

contrary''- fc,,the .facts.*.: Not • only
that. It impairs and impedes the
Commission's opportunities, to be
as helpful to you in your business
as it might be.
It sometimes .ob¬
structs opportunities to work out
with you the best, and most prac¬
ticable
to
solutions
problems
which everyone agrees need a so¬

has

-

lution. It sometimes obscures your

appreciation that situations need
correction
when,
in fact, they
plainly .do. It deprives us, on the
Commission, of mariy of your most
productive suggestions. Where we
might have from you, useful, con¬
structive ideas, which would be
wholly welcome, it gives, us in¬
stead carping, sterile criticism that
does no one any good except spe¬
cialists on high blood pressure.
Often, I am sure, disposition we
make of questions that require! otii"
action are 'not as sound or prac¬
tical as they might be if'yciur in¬
dustry would put its weight on a
laboring oar and help work out
the most practical answers rather
than standing by merely making
caustic comments.

I;5/!

don't bother

1569

■*h •;

understanding

.

than

Existed; up to vthis; time;

But

decide for himself whether

may

staff genuinely desire to be help¬

buy: those securities;/And that
it is up to the buyer to use that
information to determine for him-)
self what it is he's buying.
V
X think its highly important iof

ful- toyou-inmeeting your prob¬
lems and minimizing • your diffi¬
culties. I don't plan to go into de¬

—and that you

tails here.

mistakably

It

ever

will-require

general

more

a

realization throughout your busi¬
ness that the Commission and its

I merely want to leave

with you the suggestion that the
attitude that the SEC is .the "bete

noire"

the

of

securities

industry
is a lot of nonsense, and to urge a
better understanding of the fact
that the. Commission and those of
you who want the securities busi¬
to be

ness

sponsibilities.
be

the

have

and common re¬

If that understand¬

achieved,

sometimes in

what

you

the past have con¬

troubles with'the SEC

as

will, be greatly diminished, and
ouf aciivitiesj on the other hand;
pective

and

time

same

less

ef-

more

burdensome

to

those who do their business hon¬

estly ' and fairly.

Unregistered Securities Control;

we'd

should make it

clear

But

is

is

knoW

important for

that

the

to

study

With SEC!

they buy* It
have everything
to gain by having your customers
fully v informed; abpui,; the merits
and the risks of the securities they
JWlronl you.;..
.
„
seems

to, me

you

.

These

comments

the

on

Coast

in.

ment

There's still knottier reason that

the .securities

I shan't go into
them now. This city is too beau¬
tiful for me to detail you for any

markets.? We

are

cating-if x objectives

are;;

"

several bars and a general store.
The manager of the general store
was
a
colorful product of that

arduously beautiful country.
He
told us a simple tale that, may
have some bearing on why you
It seems the. road to the

nearest

city, some 56 miles away, had
been torn up by logging .trucks
winters, and -badly
needed grading. He said that he
was the only one who seemed to
take much interest in getting any¬
thing done about it< Soy he said; j
i
"J went into town- to- look up ta
Tellow there who has considerable
influence in such1 matters* .1 went
looking for him at that-fine new
hotel they have there;
And do
and

hard

-

.

between

nancing—and where such inter¬
ests may be readily exchanged be¬
tween
those who first acquire
them and others who want them

later.
are,

We. are .concerned, as you
that the public's confidence in

those markets shall be maintained
—and for that reason we are con¬

cerned—and
you

are

those

if

you

are

realistic

too—that, transactions in

markets

Shallbe

consist¬

ently fair to all participants, and
manipulation,

free from fraud and

,You and the Commission view
questions from; somewhat
different points of view. We op¬

v

these

Congressional direc¬
tion to take steps to assure the
fairness, of -transactions, in securi¬
ties. The main force that directs
erate under

know what?
Those fellows
there are making so damn you to the .same objective is plain
business good sense—-the principle
much money- - they- get - together
of not killing: the; goose that lays
and have lunch with each-other
the golden eggs by working it to
every week " .•;■*. #:: :y£y;;,:
j;
you

over

•

.

•'

.

death.

///"'

Together" ©! I
No Antagonism of Objectives
/: -;;.;
Dealersry';;/; i•"
Now I don't believe there's any
Well, it is. probably impossible
for anyone to say exactly -what question that in the past it has
combination of-factors.inspir.es an¬ been ; a ' widely; accepted
view
nual meetings like -this. But, it within your industry that our
does seem'to me it's proving to be viewpoints are essentially antag
a
good thing for you to get to¬ onistic. There are some indica¬
gether every year as you do. You tions that that attitude is on the
wane.
But you know and I know
are building within your segment
of the securities industry a spirit that it still persists with great
that seems well on its way to force in many. quarters, in your
solidarity. I understood you be¬ business. At times those who share
it are highly' articulate. They be¬
gan ten or twelve years ago with
only rather tenuous1 social ties. It rate with sweeping adjectives any
"seems 'plain 1 enough \thkt in the hction or suggestion* of the Com¬
mission regardless of thought as
years since you have * developed
into a group that feels a keen to its merit.
I suggest to you that such an
sense
of common interests—an
Approves "Get




industry and the
Commission in • approaching ^the
problems with which both you
your

and the Commission have common

I don't mean merely
pleasant talk of harmony. Nor do
I mean, as has sometimes been
suggested when some serious
problem has existed, that the
Commission should step aside and
leave its correction wholly to the
industry. , You ; can I do 4 much
through pressure of industry opin¬
ion and through your own ma¬
chinery to prevent serious prob¬
lems from arising or,-when they
do arise, from becoming wide¬
spread. But, when they do arise
and spread, I think- we should
work together,
The Commission
has, been given powers: to. correct
various. kinds of evils in-your in¬
dustry, I think Congress intended
that ..those powers should : be used
whenever necessary; I think they
can be used most effectively, and
most practically,
and ; with " the
concern.

,

,

least

feasible

interference

but

elaborate detailed
The

discussion.

Commission

submitted

a

has

report

to

,

recently
Congress

recommending amendments to the
Securities

Exchange Act of 1934

which would
in

extend to

investors

unregistered securities certain

protections now afforded to invest¬
ors in registered securities.
Your
association has submitted that

re¬

port
for
your
consideration. * I
hope that you-will bring to its
r*onsiderbtiori an appreciation that

it

may have advantages;to you.
Consider whether there maty not

!

made

state¬

a

that will

the way these particular

provisions

are operating.
We are
giving the question intensive con¬
sideration and we hope soon that
throughout the country buyers
will be regularly able to get cor¬
rect, essential information about

the

securities

offered to them In

ample time ahd in such form that
they : can and ; will consider for'
themselves, with whatever expert
advice they wish to have, whether
they want the securities that $re
;
offered."'
-'■ *"
T'v

IBA

«

Training Group

In Northern Ohio
•

"I?--'

QHIO---A trains
in investment banking

course

has

been

:

inaugurated

by
the
Northern Dhio Group of the In¬
,

with

facts, about

makes

the

ations

plainly

evident

its

to

IBA member houses in the Cleve¬
land area.
The course is similar
to that offered in New

York, Chi¬
large financial
centers, Fulton said.
;
:" :U1.: /
In addition to regular classroom
instruction,; special lectures will
be given by investment, bankers
of long experience in such fields

those

cago

and

other

.

whose money finances those oper¬
ations. I have no doubt that you
will have questions about the pro¬

posals made in the report. I hope

will consider them objectively
If you do
that they
have substantial merit. If you dis¬
agree on details, let us know. Weare never averse to, constructive
suggestions. / /
••
\ ■?;'

you

as

and with an open mind.
I think you may/ find

Corporate securities, trading, syn¬
dicating, operation of stock ex¬

What Is Meant by.

government,

municipal

anl

changes, investment portfolios and
government regulation, • :
Present at the meeting at which
the course was announced were:
Robert W. Clark, of Washington,
educational director of IBA, and

Registration;

One. point more I want to men¬ Dean Herbert C. Hunsaker, Mar¬
tion briefly—not so. much because vin J. Barloori "and: L.. Merle Hosit follows logically from- what I tetler, of Western Reserve.
i :
have said before, but because '| I : ; Other
members
of I Fulton's
think it is. particularly important committee areV Claude F. Turben,
to your business and to the Com-? of Merrill-Turben & Co.; John D.
mission's effectiveness/
Burge, of Ball, Burge & Kraus;
You know, as well as I do, that Morton A.
Cayne, of Cayne & Co.;

know too that some salesmen en¬
courage that idea, even though it
is illegal to do, so. It seems to me

long run to your
business and to the reputation of
your industry. To the extent that

the course- will provide
comprehensive and t h o ro u gh
training for new employees of

oper¬

Such

the

stated

lacking in securities that
so
registered.- Consider
whether you don't have better
and more saleable, merchandise,
other things being equal, if the
company whose securities you sell
aren't

highly important that the public

.

of Hornblower • Sc

Paul: J, Eakin,

Weeks,

and: Harold L; Emerson,

of H. L. Emerson & Co.
——■

};

:

ir'

—

Leslie B. Meyer With

•

Dempsey Tegeler & Co.

Commission's facilities * to aid' in
dealing with your problems.
Joint
action
in collaboration

LOUIS,
MO.—Leslie B.
has joined the staff of
Dempsey-Tegeler
&
Co.,
407
North Eighth street, 'members :of
see; to'it as f areas' practically pdssible that companies offering se¬ the New York and St. Louis Stock
curities through public distribu¬ Exchanges. Mr. Meyer in the past
tion disclose the" facts the buyer was with the Mississippi Valley

will require a closer and a more

needs

you

will work with

ing them,

we

us

iri correct¬

welcome and invite

collaboration^ and» freely offer the

should

understand

quite

clearly

that we don't approve "registered
securities—that" our function is to

to

know in order- that he

::

^CLEVEIJVND,

irig

and

practices can't help but be detri¬
in

ment in

not

.

mental

fully in

do want you to know that we are
aware of the need for
improve¬

plainly informed of the purposes
for which their proxies are sought
by the management of that" busi¬
ness, in having some' assurance

legitimate, fair and proper oper¬ the Commission does not approve
ations, if .we: Collaborate in. workr securities registered.. with .it,. But
ing' out, - and" applying jointly* you know equally well that many
suitable
remedies for practices public purchasers think the SEC
shown to be bad for the people does approve such securities. Yoii
who do business with you.

be

the whole question in more
detail than is practicable now. I

money is invested, in having them

are

to

soon

about the business in which their

inside

^

cover

be great merit in 'the idea of hav¬
ing those- who own1 securities >as^
sured that they can get the facts

thSt those on the

/that regard.

don't plan to discuss those ques¬
tions here. I understand that they

taking undue advantage of their vestment Bankers Association-in
really inside position' in trading in; the cooperation with Western Reserve
Iv
company!s
securities, . Consider University of Cleveland:
whether it ..makes* iehse to have .{»W, Yosfl FultOn, -oft Maynard H.
these j protectiops ; a,Vailable in se¬ ]yiurch-& sCo.>r Chairmanj of the
curities registered oh exchanges group's e d u c a t i o n ^committee*

cohic^rned", as yph;,ar^
faring./.Driv¬
jttark£ts shall ieryc with the uting ,thxpqgh Montan a ^ecentl^ rWe
jhdist effectiveness • as; ' a' place ; Genuine Collaboration
eame jupon # littlet towp ,tbkt ha4
where interests in sound enteijI' think -the; time ha
•looked big enough oh; the mkb but
prises may be readily distributed come for: genuine collaboration
proved to have only a few homes,
when those, enterprises need fi¬
might; bave. somev

others,

are

_

.

briefly to one
under consideration

many

questions about the way in whidb
registration and prospectus
provisions "of .thb 1933 Act' are
functioning., I think there is much
to be desired especially out here

will be discussed

are times, when, all over
world, it seems, men's tem¬
,(Continued from page 1530)
pers-are short.
There is a ten¬
awareness of problems that con¬
almost every city on your
dency after the strain of intense
So there can't be a journey of cern us all—and a realization of collaboration
throughout a great
responsibility to speak its mind as
war to grab hastily fox immediate
There
have
been too,. great a group; and to help work out advantage—to focus on close ob¬
those problems. I hope that ten¬
flights from drought and famine.
jectives and overlook greater fu¬
But here the market quotation dency continues. I hope - that it ture
prospects if they are in any
continues constructively and that
follow* ; and frequently precede
degree remote. There is a wide¬
it keeps free from narrow view¬
your progress.
And they create
spread disposition to profess sim¬
and
shortsighted selfish
the same symptoms of hunger that points
ilar objectiyes but to wrangle over
must be fed, and thirst that must motives.
details of method > to the : point
be-quenched as ' they do in your
where the objectives are largely
Relationships With SEC
home cities.?5?■j'-V
nullified. I think it may not be
Because
I
believe you
have
More nearly, perhaps, the mo¬
too much to hope that the rela¬
reached that point I want to speak
tives for this westward movement
tions between the Commission and
briefly about the relationship be¬
may be like.those that inspired
your industry as a whole in the
tween your industry and the SEC
thev great migrations
over
the and
years ahead may belie that ten
about, the attitude that your
dency. - *
*
■'
*■' * **
plain and through the passes that
association and you as members
/ If; you can clearly understand
brought the settlement ,of these
may choose to take over the years
that one of the Commission'^ pri
vast
and fruitful .regions;;;the
to come towards the Commission's
seeking of new fields to cultivate;
mary concerns is to have your in¬
activities/^
^
pew opportunities y to turn from
dustry free from trouble that will
I speak for. an agency that came
the natural richness of this coun¬
damage its future standing and
into being at about the same time
impair its usefulness arid its earn¬
try a. better living; new-contacts
with new, people .and. a wealth .of as your association., ,We are con¬ ing potentiality, I see no reason
vast new resources.
But I doubt cerned, officiaRy" with most of the why there should be any serious
.that many on this, convention trip, same problems .that concern you. trouble^ in working; put featsible
We are" concerned as you. are,
plan to stay on and settle here as
methods; for aeeomplishingrthat
with the efficient functioning of end. Details
the old timers did.":
riepd not be compli¬

refer

to

suggest

the

consideration in that spirit. There

These

the

want

is

right to have it and

a

question now
which I think would benefit from

>

them to

it before

suggestions.

>

.;

information

; "I

••

un¬
you

It may be true that some
buyers;
prefer to rely on second hand ad-;
vice-—that
they don't want to
bother with reading a prospectus!

rather have thoughtful advice and
•

whenever

deal with retail customers.

.

be at the

can

that
the
publip
doubts about that

no

they have

objectives

can

business

-

should-have

standards

ethical

same

sidered

your

available if they want it and that

high

ing

to

sound business 'with

a

The comments

much.

us

v

ft'Wf**'**'!! ^W4.MWWe* "t»<1

THE COMMERCIAL & FINANCIAL CHRONICLE

fill, give him * your personal con^ communism or socialism,.;I; hppe
'tact;1s?.-/.;•< and pray for a: continuation of. our.
I ani proud to be in the Fed¬ present * system?
-J • >
?
eral Reserve System, gentlemen, r I admit our systems« overlap,
and I look forward, to ,the day that they are inefficient to some
^hen all banks which can profit¬ degree, and that they are irritating
ably become members, will do so. in many / respects. But. all these
But most of all, gentlemen, I am acknowledged - shortcomings.• are

,

'

'

ST.

Meyer

Trust Company.

>;

1:

i

~

>y

V,.. y.*,1 i*. s-i'y 1

'*■.

■■

'•

*

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Y >V * >"•

f

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.•

*

'

1570

THE COMMERCIAL & FINANCIAL CHRONICLE
*

A Fiscal
(Continued

flationary

1540)

on page

machine-hour at

Policy to Fight Inflation

rate far beyond

a

the normal rate of growth.

Better
pricing and better allocation of
materials will likewise increase
the efficiency of production. High
productivity, which cuts unit costs
and increases supplies in relation

^o demand, can make the major

pressures;
Wherever
possible, expenditures for public
works, cash payments to veterans

and tax reductions should be de¬

ferred.-.

ing singly or collectively in rais¬
ing prices, wages and salaries, in
recognition of the common inter¬
est in avoiding a wage-cost-price
spiral.
3. Restraint by individuals and
/. businesses
in making deferrable
expenditures at the present time:
/'

4. Restraint by state and local

the

ans

■

public.'

7rS'-

;1

7/7 7;//77,,.'

6, A vigorous campaign on the

benefits and

for tax

to reduce
expenditures and main¬
tain sufficient revenues to yield; a
large excess of receipts- over ex¬
penditures in the fiscal year end¬
ing Juhe 30,1947.
•
;
Federal

Government

monetary action to curb spending.
The present statement explores
the ways in which : the Federal
Government may reduce infla¬

tionary

reduc¬

pressure

by cutting

or

de¬

Such

PAYMENTS TO AND RECEIPTS FROM THE PUBLIC

/

FISCAL YEAR 1947

;/77;

//

We
lem

Interest

Refunds

on
■

the public debt

"

—l
7-"

are

times

not in

'

in

Federal

a

(excluding trust accounts).

the pages

following

ment is offered

Total payments to the public——

on

than

individuals^—^

lit
..

-9.8''

—

tures,
absorb

3.1

1947

3.3 7

Trust.accounts!!

estimated at $16.4
about

payments

—.S 2.8 7'

—

*Excludes $2.1 billion of terminal leave bonds for enlisted mili¬

tary personnel.

^
^
t
fThese are: aids to agriculture, including subsidies, $1.2 billion;
Social Security and-relief, $0.7 billion; housing, excluding defense
housing, $0.2 billion; general public works program, $0.9 billion; Post
Office Department (general tad), $0.2 billion; general government,
$1.7 billion; pay increase (anticipated supplemental appropriations),
,

$0,2 billion:.
ttNet appropriation to Federal Old-Age and Survivors' Insurance
Trust Fund is excluded from employment taxes, but included as trust

.

,

si

.

■

Budget.

billioh,

40 per cent

of the
Their great size re¬

quires that they
carefully. •

be

most

Total receipts other than borrowing—42.7 j
Excess
of
receipts, other than borrowing,
over

:

;

.

•V National defense cash expendi¬

7.5

receipts, general and special accounts-^—

,

Military Expenditures-*/ - ? ^

.61

Excise taxes and customs^—a—.a.

com¬

on

tures must come.

borrowing;
——

brief

a

the categories
from which reduction of expendi¬

39,9

Direct taxes on corporations—,——^-————
Employment taxesff
a
—.
Miscellaneous

ac¬

count purposes

se¬

in

be explored.
opportunity, and
perhaps need, at some later date
to carry out any worthwhile proj ects that are postponed
today./;;

and

International

ditures which

scrutinized

?* *

" ?
<
paramount importance of
an
adequate military establish¬
ment is universally recognized.
No group of private citizens can
prescribe how much and in what
direction
military
expenditures
can be safely reduced. ' However,
the fact that the Army and Navy
plan to spend about as much per
man in the armed forces in fiscal
1947 as they did at the height of
the two-front war suggests that
there is some room for postpone¬
The

I♦

ment.

account receipt.

force

to

state

,

apply with equal

and

local

govern¬

ments, to businesses and to con¬

Every dollar by which
economic unit can reduce its
expenditures in relation to its re¬
ceipts is a net gain in the drive
against inflation.

sumers.

any

Large Budget Surplus Necessary
to Curb Inflation

Today, fighting inflation through
fiscal policy : means
collecting as much and spending
as little as possible. We cannot be
;

government

content with

a

mere

equality of
Revenues and outlays. In the pres¬
ence of today's demands, rapid in¬
flation. and balanced receipts and

expenditures

can

go

hand-in-

hand.

Prompt achievement of a
of receipts is neces¬
sary to affect the current infla¬
tionary trend materially.

large

excess

According to the latest official
estimates, there will be a deficit
of
$1.9 billion in the Federal
Budget for fiscal year 1947. Ex¬
penditures are estimated at $41.5
billion, after giving effect to the
cutbacks recently, directed by the

president. Revenues are estimated
ht $39.6 billion (at present tax
rates, approximately present
prices and a gradually rising level
of production).

The

/

conventional

sentation

does

Budget pre¬
not
accurately




shall

have

Finance

The $4.4 billion estimate for in¬
ternational 7 finance ♦ covers
dis¬

world

prosperity and the lowering

trade

of

dorsed

barriers.

the

We

principle

have

en*

of

chases here."

We

recommend

that

the

and that the investigation to de¬
ceipts and disbursements upon in¬ termine what further military ex¬
flationary pressures. For example, penditures may be appropriately
the large receipts and outlays of deferred be expedited in every
the Social Security Trust Accounts way possible.
are not included in
the Budget.
Public Works
7
On the other hand, the Budget
Estimated Federal disbursements
does
include
as
expenditures
for civil public works in fiscal
transactions and accruals not in¬
1947 total $900 million.
In com¬
volving current cash payments
and having only an indirect or de¬ parison with some items in the
Budget, this is a relatively small
layed inflationary effect.!
figure.
Yet public works is a
The over-all economic effects of
singularly appropriate category to
the financial operations of the cut when an
anti-inflationary pro¬
Federal Government are reflected
gram is needed. There is general
more
accurately,
though
still agreement that considerable lee¬
crudely, by a comparison of cash way exists in the
timing of many
payments to the 'public and cash
types of public works.
"77 v.
receipts from the public.
The
The composition of the public
President's review of the 1947 works
program reflects an ap¬
Budget estimates that cash re¬
praisal of the economic picture
ceipts will exceed cash payments that was current in the Fall of
by $2.8 billion. The table above 1945. It was" then
recognized that
summarizes the major items of
building materials—brick, lumber,
cash receipts and payments:
etc.—would be in very short sup¬
The projected $2.8 billion sur¬ ply, but it was thought that there
measure

Cash

pensions

,

ments
of

was

payments? for
and benefits

veterans'
in fiscal

strain

over

authority

Federal

pay¬

to

spending.

re¬

The

fFor

example, $0.5 billion of
on the government debt
represented by an increase in
the redemption value of E and F

including labor,

interest

not

a

much leeway for econortiy,
they should be carefully h4"

but

ministered

so

as

are

to avoid expen¬
not essential* to

discharge the responsibilities ' of
the government.
'
;^

/:J;-

Taxes> :•

;

,

V'--

We fully understand and share
the general desire to avoid tax in¬

current

are scarce

today

every dollar of public works
outlay means more competitive
bidding for existing resources and

cash
i

creases.

■/>','/

As a basic principle of tax pol¬

icy,

reaffirm

we

belief ''that

our

the tax structure and the budget

should be drawn so as to majke
possible substantial reduction i of
the Federal debt at

a

high level

of

employment. ' As much debt
should then be retired ^as is con¬
sistent

with

maintaining high
employment and-production,"$ When we are through this
costly aftermath of war, we shall
again urge the substantial reduc¬
tion in taxes required by this
policy, v?//:
levels of

Meanwhile,

cash

if

outlays

of

the magnitude recommended can¬
not be

quickly eliminated or post¬
and if inflationary prfcs?not brought under con¬
trol by other means, tax increases
represent the next effective de¬
are

sures

can

defini¬
standards.

be achieved by better

tion and application of

Well defined standards and effi¬
cient administration are in the in¬

terests of all—veteran^'and
veterans

Subsidies

:'The

non-

alike.'c
1

revised

Budget estimates
include $800 million for food sub¬

need

for

avoided

tax

by

other fronts

increases

may

be

action

sufficient

on

But it would be

now.

prudent for those responsible for
tax policy to take steps now to
prepare for the possible need to
raise tax rates early in 1947. />/£*>
i;/;;

*

❖

•"f

■

current "itiflafion

The

brief and mild.

may *

i>e

subsequent
reaction, if it comes, ■' may ,be
minor. We fervently hope so.* But
there is little in our history to
The

indicate that these hopes are cer¬

sidy operations in fiscal 1947. How

there is danger that we

that
shall do

much will

too much to meet such

crisis

actually be spent de¬

pends upon decisions regarding
price ceilings on foods. We repeat
the recommendation in

our

policy

statement, The End of Price Con¬
trol—How and When?:
f,
; i

"The

principle

of vigorous,
liquidation should

progressive
apply to cost-of-living subsi¬
dies.
Elimination of these
subsidies will ' require higher
.

.

.

prices to consumers or lower re¬
turns to

producers. These alter-

natives

v

cannot

be

escaped

by

postponing the date for discon¬
tinuing subsidies. The cost-ofliving subsidies are large in to¬

tain

or

probable, * or

even

a

.or

do it too soon.
No

look at the present

one can

situation without recognizing th6

possibility that, at some uncertain
date, the, problem may be defla¬
tion and unemployment, rather
than inflation. The immediate de¬
or postponement of Fed¬
expenditures that we recoinf
mend will not make it more diffi¬
cult to cope with a possible future

duction
eral

business

reversal.

On

the

con¬

trary,
postponement of worth¬
while but not urgent expenditure

projects now will help provide" a
backlog- of useful expenditures

volume; their inflationary
effect is serious.
We must get

that can be drawn upon When
counter-deflationary, measures are

rid of them

needed,

tal

rapidly as pos¬
because they ag¬
gravate our fiscal and monetary
problems but because the longer
they persist the stronger will be
as

sible not only

the vested interests in their in¬

definite continuation."

:;

,..

Administrative Expenditures

in

Recommendations for economy
Federal
expenditures
often

start with general administration.
Maximum, efficiency must be a

constant goal, for in the general

.

/

-

,

If there are

simple, pleasant and
certain ways to avoid serious in¬
flation we have nQt; found, them.
Cutting and postponing expends
tures is not easy. - Raising taxes is
not pleasant.
But if we wish -to
live in a dynamic, free society, we
must accept the responsibilities of
free citizens. This is one of the

great postwar tests of the ability
of a free society to keep its house
in order; we cannot afford failure.

administrative expenditures is ex¬

pressed the conscientiousness of
our government officials.' We are
confident that some current sav¬
ings can still be effected in this
category
without
handicapping
essential
government
services.

.

Most of the opportunity for re¬

*A

Postwar

Federal

Tax Plan

for High Employment proposed by
the Research Committee of the
Committee for Economic Devel¬

opment, p. 24.

; •/,

Marshall Barlow

://7';

j.

■'.

,/■

With;

Robert Schweser Co. i
(Special to The Financial Chronicle),

DES

MOINES,

IOWA—Mar¬

shall J. Barlow has become asso¬

ducing Federal disbursements lies ciated with Robert E. Schweser
in the categories discussed above,
Company, 208 South 19th Street^
particularly in national defense
and public works. The remaining Omaha, Neb. Mr. Barlow has been
more
inflationary pressure.
In $9.2 billion includes $3.8/billion vice-president of Carleton D. Beh
view of conditions as they have lor interesti $1.9 billion for tax Co.
and

is

outlay.

offer

$5.8 billion. fense available in the fiscal field.
It is probably not possible to put
in behalf of
veterans reflect the deep gratitude higher taxes into effect until early
of the; country to veterans for 1947. We repeat our hope that the

Other Expenditures

rural electrification.

But the fact is that all resources,

bonds and is

$0.2 billion for the Post Office
Department. These items do not

The Acts of Congress

However, the campaign for a com
prehensive anti-inflationary pol¬
icy must not be defeated by turn¬
would be room and need for pub¬
ing it into a drive merely to elim¬
lic works of a type that did not inate file clerks
and cut down on
use such materials, such as recla¬
telephone calls.
mation, flood control, roads and

made possible by use

Presidential

curity), $0.7 billion for social se¬
curity
(outside trust accounts)

1947 are estimated at

the impact of Federal re¬

plus of cash receipts

(mainly social

poned,
Veterans' Pensions and Benefits ;

economies called for by the Pres¬
ident be effected without delay

Federal finance

this field should

We

that
the
challenge.,, of
dollar of controllable ex¬ their heroism and' their sacrifices.
penditure from the standpoint not
Everyone wishes to see our obli¬
necessarily of its elimination but
gations under these
Acts dis¬
of
its deferrability might
well
charged in full. At the same time
bring us the necessary results. In we believe considerable economies

Trust accounts v-r,——r————-

Direct taxes

refunds, $2.6- billion for trust

every

-__—

,

actually developed, some steps
have already been taken to screen
and cut the public works program.
All possibilities for further action

disburse¬

We recognize that we are

believe

_.

prom the public'other

heroic

position to pass judgment
on
the expenditures which have
been tentatively approved. We do

Veterans* pensions and benefits——
International f inance——

Receipts

for

call

fully aware of the prob¬

reduction

T.

~~—•

Other activities!

re¬

presented by a further large

ments.

.

National defense*.

■

making
loans for
those purposes.
The
measures..,.::;v//7'/;; / 7:/ > ■■ 77 /■:;w>,
loans were made in amounts that
The reductions in Federal ex¬
were essential and are being spent
penditures must not only be large;
for types of goods that are urg¬
they must also take effect prompt¬
ently needed for world recon¬
ly. There is a natural tendency for
struction.
We do suggest, how¬
government agencies to defer ac¬
tion in hope that perhaps the cuts ever, that the government explore
with foreign borrowers the possi¬
may be avoided. But the urgency
bility that both their interest and
of
our
present situation gives
ours would be. better served by
great weight to reductions that
some postponement of their" pur-,
can be made now.;
the

but

;7/7/v/77.;/7/, 77/;;

'

.

payments, and if possible

expenditure reduction, will

Excluding Major Jntragovernmental and Non-Cash Transactions
Budget Review Estimates, August 1946,
-Based on Existing and Proposed Legislation
'7 ;"7
77;/.
(In Billions)
v-:/

payments to tub public:

:

or

quire heavy cuts in other items.
Heroic measures will be needed-^-

can

policies contribute a ferring its own expenditures. The
Jserious addition to the general in¬ observations made here about
tion.

•

,

7, A vigorous policy

Federal

The?

■' *

bursements in fiscal year 1947 tin¬
a
der foreign loan agreements, in¬
$7 billion excess, instead of
the $2.8 billion excess now con¬ cluding Export-Import Bank loans
and the United States subscription
templated, Some important items
to
the
International
Monetary
in the Budget cannot be cut-taFund.
The CEP Research i and
terest, tax refunds and social se¬
Policy Committee has repeatedly
curity. To achieve the $5 to $7
emphasized the importance to the
billion excess of receipts by means
United States of the restoration of
of
over

$6

keep sold, Series E and F bonds
of small denominations.
,,

reduce the danger of inflation not
so much by a direct contribution
to higher output as by fiscal and

governments in making expendi¬
tures not urgently needed now.
Many states accumulated surplus
funds during the war, Since V-J
Day there has been a general ten¬
dency to use these funds, espe¬
cially for. public works, for. veter.

;'77;-Jr L';

;>

part of the Treasury to sell, and

2. Restraint by individuals, act¬

,

:1::.

5, A monetary policy to help
prevent further expansion of ex¬
pendable funds in the hands of

contribution to moderating infla¬
tion.
'■

thus far has been com¬
mendable, but it is not enough.;
The proper goal of Federal fis¬
cal policy" today is the largest at¬
tainable excess of receipts over
payments. Yet it is helpful to have
a more specific objective in view
We recommend
as
a
minimum
goal of fiscal policy the creation
of a $5 billion excess of receipts

progress

Thursday, September 26, 194(5
'

j.

i.r
•'')

'

V •' <«'•:»

THE COMMERCIAL & FINANCIAL CHRONICLE

Volume <164 V Number 4528
V

through

nor

sfc.

sold

creed

authoritarian

any,

administrative
that our
I ^bodies, a? I
■members—the professional trad
},ers in securities of the U. S,; A.
legislative

and

;

ami,| pleased

Canada—are more and more

and

lutllizing the opportunities which

ijthis Association affords of mutual
Ocontact and concerted action for

j|heir individual benefit and the
advantage of the firms with which

they

are

associated.

cially all of our 26 affiliates this
There are 15 cities in
now
have individual
members where we should have

last year?
which we

goal for 1947
the Member¬
ship Committee at 5,000 members.

-NSTA affiliates, our
i4& being placed by

fiscal

this

during

officers

Sear have attended various meetlings of the National Association
SEC

?Of -Securities Administrators,

formal and informal hearings and

Congressional Com

number of

of in

-mittee hearings on subjects

terest to our industry.

•

sh

Association

against

o u

1 d« be

further centralization

any

.of: power in the hands of Federal
agencies and should further the

solving of investment problems by
our own organizations. 1 Our mem¬
bers should see to it that these

organizations,

however,

dominated

a

by

not

are

few but are run

by democratic processes.

Only 300 years have transpired
since boatloads of people with ini¬
tiative began to come over to this

country,

selling levels.
and, expenses

theory."

attracted by the oppor

to work and develop the
great natural resources. - During

Americans have
the greatest nation this

this period, these
earth

has

has
been

ever

This result

seen.

without

accomplished

any,great contribution from Gov¬
ernmental

v

authorities

and

cer¬

in the main, centralized
Federal government had little to
tainly

this success.

do with

should

Association

be

wielded

power

small

by

to-the detriment of the
great majority of the American
people,
i believe we need cour¬
ageous leadership .in government,
in

in

"Congress,

business

in

and

the ranks of labor to apply proper
and
use

restraints

arbitrary
of economic power.
Courage
fair

America's

is

on

heritage.

proudest

there is

Somewhere

Jackson

drew

another

An-r

will4 rise

who

to

presidency by using that one
great American attribute.
; ■ \

the

.

David

in

stated

Lawrence

an

editorial last week, "The break in
stock

prices is indicative of basic
weaknesses, that dur¬

able goods industries face curtail¬
of earnings,, endless spiral

ment

of wage increases
leads inevitably

and price rises
to depression."
about in¬
dustrial
earnings and the true
situation inside the durable goods
industries will come out. * In due
"In due

■>U

time the facts

time the effort of labor

monopo¬

lies will be visible in the liquida¬
tion

small

of

medium

and

sized

enterprises. : When
the climax
comes, the whole thing will
in
retrospect seem so obvious. . But
it is human nature to overlook the

Amer¬

obvious and that is why in

ica we have

depressions."

;

fiscal

having

Government

with
are

like

a

and

with

clear field ahead which on

in. the

do

to

team

a

nearjy

months since

fumbled the ball. The

path to prosperity has been clear,
but very

little economic courage,
foresight, or coordination has been

Our forefathers' philosophy of shown in administrative circles—
government, "the best govern¬ the advice of able leaders in Con¬
ment being the least government,"
gress and in finance having been
was always the exact opposite of
ignored.
*

and Asiatic beliefs.

the European

state, historians will record that
America's glorious era has come
to

end."

an

NSTA,
The

:<yV"-;

■:"■

should

and

can

be

the constructive leader in the in¬

vestment

awaits;

nity

The

business.

time

the

opportu¬

is

I

all

*

I've been
asked to
give
long-term implications, some¬
thing I prefer to shy away
from, I have enough headaches

Walter

Whyte

as

it is. But for those who think

it makes

interesting reading I
that the current panicky
Liquidation by i n f I a t i o n, - selling is completely over¬
minded public puts market looking the political possibil¬
ities due next November. Ma¬
in position to rally. Long pull
jority financial opinion has
outlook has been discounted
by break. From now on sup¬ always looked upon the New
■By WALTER WHYTE-

say

-

;

'•••

Constructive Leader

a

NSTA

*

Markets

we

that

about

<

higher pedes¬

on a

is

see.

Tomorrow's

ex¬

surrender our liberties to the

we

all

too

Deal

port looked for.

inimical to business.

as

If this fear is valid the exit

The market

always looking of Wallace spells the end of
decided that an era which will almost cer¬
humbly proud of the splendid ac¬ the elimination of Henry Wal¬
tainly add many Republicans
complishments of our officers and lace from the cabinet was
to Congress in November. The
Committees;1 r without
this
fine'
and
ineptitudes
team and their teamwork, nqthing bullish, so it rallied when the vacillations
constructive would or could have news
hit the broad ticker of Truman, the lack of a rally¬
been accomplished. This Admin¬
tape. But 24 hours later it ing point for the so-called
istration goes out of office on De¬
that liberal vote, will help the Re¬
cember 31, 1946.' We pledge the apparently. discovered
that wasn't enough, so it went publicans. The only thing that
new officers our full support and
wish them every success in the down
again. The time lapse can lick the Republicans next
strenuous days lying ahead.
was
actually *, greater;
the Fall is the Republicans. With
■As a boy I recall that my Father
that kind of a picture it is
in ending his sermons would quote rally came Friday afternoon,
the
new
the following:
1 ; ^
*
decline, ? Monday hard to believe that the mar-'
short.

I thank

each

of our

mem¬

bers for their fine support and airi

for

bogey

a

man,

■

"BE STRONG.

to play,

We

to dream,

not here

are

to drift.

afternoon.

ket is headed for the cellar.

;

We

-

'

*

-

*

#.

'

://

V

■'/'/,

have hard work to do and loads to

lift.

Shun

not

the

struggle, face

rTis God's Gift"

it.

,%

U. S. and Paraguay
The

signing

of
a
reciprocal
agreement
between
the
States

and

Paraguay was
Sept. 13 by the
State Department at Washington,
known

which

on

said that it

Asuncion

on

Sept.

a

with

around 200.

averages were

not

take

Congress

to

50%

Now to

as you didn't get
the advance (and

just

advan¬

tariff

cut

because

the

negotiations were at an advanced

was an

the top
if you

accident)

so you

get back to the mar¬ won't get the bottom on the

ket,. Tape action is full of
The wild - eyed

decline.

few weeks ago now

From

-•••

confusions.

bull of
the

said

tage of additional authority pro¬

by

this column foresaw when the

I wrote

time to get

of the market, though I
emphasized that you wouldn't
get the top eighth. I now say
that the market is getting to
a
point where buying should
be the order of the day. But

did it

announcement

another

ing for reasons the finding of
which add to nothing except
excuses
for something that

was

out

Paraguay

ington, which also stated:

rates

for < any
market
I'm little tired of look¬

sponsible
break.

here that it

12.

sociated Press advices from Wash¬

vided

re¬

on

this country; it Was motecfc inj As¬

did

Wal¬

was

signed at

reciprocal trade agreemeht

agreement

wasn't

it

the SEC that

or

few weeks ago

A

was

is the 29th nation to enter into

"The

afraid

I'm
lace

,

Trade Agreement Between

United

affairs

economic

football

every play
V-J Day has

who

leaders

portunities—from the time

made

agencies of the Fed¬

eral

place security

trade

Economic Fumbling
J The many

liberties to

tal than individual rights and op¬

against the arbitrary use of eco¬

tunity

built up

.

Opposition to Minority Controls

nomic

dividual

can

:

low gave them bread and jobs in
We must cut taxes change for power.
regardless of any
"From
the
moment
that

economic

-

Opposition to Further Centralized
-( A,Federal Power
This

cor¬

groups

Your officers have visited offi¬

The

eral spending are stopped,
porations ' will.
maintain

/This

I

"The people of Germany, Italy
arid Russia surrendered their in¬

•

that

moment

the misleading

under

label of liberalism.

(Continued from page 1537)

a

157^

.

a

bloodshot

has

here

it's

on

your

and he's baby.

eyes

Forget about all the
no longer a bull.
He's selling rumors of foreign selling. In
and swearing at everything a few weeks
you'll hear ru¬
including his broker.
But mors of foreign buying.
while his selling is duly reg¬ ////-:':■/.!/.'/ *
*
*
wV.;;C
istered on the tape, which in
; More next Thursday.

opportunity this
In. 1928 there were 300,000 Fed¬
stage when the Congressional ac¬
year to work and contribute in
eral
tion came."
employees, our population
.
turn
—Walter Whyte
brings out additional
furthering the election • of/Con¬
The agreement provides for the
being 120.000,000; in 1946, there
gressmen and Senators, irrespec¬
there is some sem¬
are 3,500,000 Federal
mutual reduction of tariffs and selling,
employees,
[The views expressed in this
tive of party, believing in Amer¬
elimination or reduction of other blance of buying poking its article do not necessarily at any
our population being 140,000,000.
ican Democracy, the Capitalistic
time coincide with those of the
trade barriers between the two head
Many of these supposed public
up in a few stocks. This
System and our industry. Busi¬
servants do not believe in the
countries,
said
special
advices doesn't mean that the bottom "Chronicle.'* They 'are presented
ness and our industry face in this
as those of the author only.}
governmental philosophy of our
Sept. 13 to the New York "Jour¬
election a real opportunity to help
has been seen. Bottoms aren't
fathers but follow the opposite
We all have

an

.

political ideology and will not be
satisfied until they have sapped

political, moral and economic
of our country.
We

the

strength

to decentralization
political power but

should

return

of' not

only

economic and financial power.

Cooperate

To
f

with

Groups

porting Private Business
should

Association

This

co¬

operate with all groups believing

preservation

the

in

of

of our members

private

business and should oppose Gov¬

ernmental usurpation of functions
which experience has proven are

have re¬

cently so gallantly completed on
foreign shores. If we don't make
this supreme

effort,

another example of

we

m.ay

find

"too little and

In this fight for Amer¬

too late ."

Sup-

is

important and worthy as

as

many

fight

Country—the

our

save

just

hour of
work in the precincts, at the polls,
and every dollar counts.
ica,

every

The

vote,

most

every

important

current

problem of this Convention is to

nal of Commerce" from its Wash¬

ington bureau; from these advices
we

also quote r

"The
cover

the

V

mean

reciprocal

concessions

substantial proportion of

a

mutual

trade, including re¬
each country of its
import duties on specified prod¬

ductions

by

bindings of certain tariff
rates against increase, and bind¬
ings of the duty-free status of
ucts,

certain commodities.

"General

provisions

of

the

do

everything' possible to bring agreement include mutual assur¬
complete agreement, mutual ances of non-discriminatory tar¬
understanding
and
cooperation iff, quota, and exchange treatbetween all organizations which riient,"
•
• «
are
endeavoring to further the.

about

performed by the individual.
our American way of life is
best interests of the investment
the best way is conclusively es¬
business. I suggest as a motto for F. H.,Silence to Be Official
tablished by the almost unanimous
our industry next year, "Pull To¬
desire of other people to acquire
Of Grace National Bank
citizenship here, but the individ¬ gether!" Let every group unite
Frederick H. Silence, President
and take the many problems of
ual opportunity heretofore offered
this most vital industry to our of the New York Coffee Exhange,
in this land is being steadily lim¬
elected representatives, both Fed¬ will
ited and threatened with destruc¬
resign from that post to ac¬
eral and State, for redress.
tion by the growing centralization
cept his election as a Vice-Presi¬
and expansion of government.reg,-best

That

America's

ulation.

in Financial Policies

Association should be for

prudent financial policies in the
affairs of Federal, State and Mu¬

Governments.
Senator
George, the ablest fiscal authority
in
public
life
today, recently

nicipal

"continued
which in the long
stated:

high
run

taxes—
mean low

production—are direct and basic
causes

cline.

Lies

in

An

Expanding Economy

Prudence

This

Destiny

of the

recent market de¬

Unless high taxes and Fed-




John

Chicago

Ss Knight,

"Daily

Editor of

News,"

dent of the

that way. But it does
that somewhere in this

made

Grace National Bank

starting to
come
in.
My guess is that
more
signs of this will be seen
in the next few days.
How
much of a rally can come out
of such a support isn't clear.
Offhand I would say it points
to a rally back to about 172,
is

support

area

recently

the following on "Amer¬
Destiny": "I am firmly con¬
destiny lies
in the direction of an expanding
economy that will provide greater
opportunity for the individual and
constantly improving standards of
living.
'V

nouncement

President

by Chester R. Dewey,

of

the

Bank.

With

a

very

background

vinced that America's

perience in the importing and ex¬

"This objective can never be at¬
tained by governmental, dictum

porting
Grace

of

departments
&

years

many

Company,

of

Mr.

W.

problems

of

importers

porters and will
duties On Oct.

1.'

assume

and
his

ex-,
new

New

Board

Orleans
And

Curb

Exchange
Exchange
Exchange

Inc.

Exchange,

Commodity
Chicago

Stock

Cotton

York

New

.

of

Trade

Cotton Exchange

other

Exchanges

Y. Cotton Exchange

Bldg.

NEW YORK 4, N. Y.

Pacific Coast

CHICAGO
"

DETROIT

GENEVA,

PITTSBURGH

SWITZERLAND

\ V

Securities
Executed

Orders
Pacific

on

Coast Exchanges

LAMBORN & CO.
99 WALL

STREET

NEW YORK 5, N.

Y.

Schwabacher & Co.
V

Members

-

New

New

Stock Exchange

York

York

Curb

Chicago

R.

Silence

York

New

N.

ex¬

will give special attention to the

Members

York

New

But for the

promising.

wrote

ica's

H. Hentz & Co.

which I'll admit doesn't sound

of New York, according to an an¬

the

Established 1856

.

Private
San

7-4150

Wires

—

SUGAR

Trade

Exports—Imports—'Futures

Teletype NY 1-928
to

Francisco

Monterey

of

New York 5, N. Y.

14 Wall Street

COrtlandt

(Associate)

Exchange
Board

Principal Offices

—

Santa

Oakland
Fresno

—

Barbara

Sacramento

DIgby 4-2727

THE COMMERCIAL & FINANCIAL CHRONICLE

1572

Securities

June

Registration

Ing—A maximum of 100,000 shares may be sold by com¬
pany to persons, firms, or corporations with whom the
corporation had network affiliation agreements on March
31.
The remainder will be offered publicly.
Price by
amendment. Proceeds—To prepay notes payable to ac-

Corp., Cuba, N. Y.

filed

26

in

INDICATES ADDITIONS SINCE PREVIOUS ISSUE

•

Acme Electric

Now

132,740 shares ($1 par) common stock.
Underwriters—Herrick, Waddell & Co., Inc., and First
Colony Corp.
Offering—To be offered publicly at $5
a share.
Proceeds—Company will receive proceeds from
the sale of 68,880 shares and four selling stockholders

Ansley Radio Corp., Trenton, N. J. V

quire,radio station WXYZ, to construct broadcast trans¬
mitter for station KGO at San Francisco and for

ferred and

working

tire

Of the net proceeds ($292,940) $50,000
pay current bank loans; about $20,000
and equipment, and the re¬
working capital.

price of $200.

Cladmetals

will be used for machinery

July 8 filed 196,500 units comprising 196,500 shares of
voting common stock ($1 par) and 589,500 shares of non¬

mainder for

voting

will be used to

1

Acme-Hamilton

Corp.,

Mfg.

Trenton,

29 filed 50,000 shares
stock ($20 par) and 82,000
Aug.

benture

voting

•

common.

:

(letter

in

the

of notification) 250 shares of stock
subscription to stockholders at $100 a share

ratio

of

1

share

for

each

two

held.

shares

No

underwriting. To provide funds for continued construc¬
tion of a golf course.
„

Arkansas

plant,

pay accounts payable, purchase equipment, for
building "alterations and working capital,'

23

offered for

common

,

Argyle Land Co., inc., Silver Springs, Md.

Sept.

and 3 shares of non-voting
common.
Underwriters—None—the company intends to
distribute its common stock directly to the public. Offer¬
ing—Price $6 per unit.
Proceeds—Net proceeds esti¬
mated at $1,179,000 will be used to pay a mortgage on ;

J.

N.

5% cumulative preferred
shares ($1 par) common
stock.
Underwriters—G. L. Ohrstrom & Co. and S. R.
Livingstone & Co.
Offering—Company is offering the
50,000 shares of preferred, while the'82,000 shares of
common are being sold for the account of certain stock¬
holders.
Prices—$20 a share for the < preferred, and
$11.50 a share for the common. Proceeds—Company will
apply proceeds to fully discharge secured demand
notes, mortgage notes and partial discharge of de¬

of

•

stock ($1 par), each unit consisting of

common

share

1

Prices—$6 a share for
Proceeds—To re¬

common.

share for

a

bank

loans of approximately $100,000, to purchase
wood-working machinery
and ? for
working
capital.
Temporarily postponed.
/

of Pittsburgh

Co.,

share of

one

preferred and $1

capital.
American

?

Aug. 29 filed 7(1,000 shares of Class A cumulative con¬
vertible preferred stock ($5 par) and 120,000 shares of
common
(50c par). .'Underwriter—Amos Treat & Co.
Offering—To the public in units of one share of pre¬

*

the proceeds from the sale of 63,860 shares.
Company
also will receive proceeds from the sale of 20,000 war¬
rants for common stock to underwriters at an aggregate

Thursday, September 26, 1946

•

June

5

Western

Gas

Co*

filqd 33,639 shares of

stock

common

(par $5).

?

Underwriters—Rauscher, Pierce & Co. Inc., and E. H.
;

?
American Colortype Co., Clifton, N. J. ,
Offering—Stock will be offered to
the public. i* Price by amendment.
Aug. 12 filed 30,000 shares ($100 par) cumulative pre¬
Shares are being sold
ferred stock.
by six stockholders.
Underwriter—White, Weld & Co.
Price
by amendment.
Proceeds—Net proceeds initially will '
Armour and Co., Chicago
be added to general funds, however, the company antici- ?
Rollins & Sons Inc.

4

i,

indebtedness.

•

,

f pates it will vse the funds for its building and expansion
program. Offering date indefinite.
'
'

July 12 filed 350,000 shares (no par) cumulative first
preference stock, Series A; 300,000 shares of convertible
second preference stock, Series A, and 1,355,240 shares
Sept. 11 (letter of notification) 170,000 shares of $1 par
American
Frozen
Food
common stock
Lockers, Inc., White
(par $5).
Underwriter—Kuhn, Loeb &
common.
Offering—Price $1 a share.; No underwriting.
1
,
Plains, N. Y.
Co., New York. , Offering—The 350,000 shares of first
For organizing business of developing inventions in
preference stock will be offered in exchange to holders ;?■
connection with aircraft.
;
'
5 Aug. 22 (letter of notification) 5,000 shares of 6% con- /
vertible preferred stock ($10 par) and 70,000 shares ($1 : of its 532,996 shares of $6 cumulative convertible prior •?
preferred stock at the rate of 1.4 shares of first prefer¬
Aerovox Corp., Bedford, Mass.
par) common.
No underwriters.
Offering—Prices $10
a share for preferred and
Shares f
$2 a share for common. Pro- - ence stock for each share of $6 prior preferred.
Aug. 22 filed $1,500,000 of 5% sinking fund debentures,
of first preference not issued in exchange will be sold
ceeds to pay off notes and loans, and for working capital
due 1961, and 50,000 shares ($1 par)
common stock.
to underwriters. The 300,000 shares of second preference
and inventories.
Underwriter—Ames, Emerich & Co., Inc., and Dempsey
stock will be offered publicly.
The 1,355,240 shares of
& Co., Chicago.
Offering—The debentures will be of¬
common
will be offered for subscription to common
American Insurance Securities Corp., Atlanta,
fered publicly. The common shares will be issuable upon ? •
6a.
;:;?????. : ?' ???:??:?^?f:' stockholders of the company in the ratio of one-third >
the exercise of stock purchase warrants for purchase of
Aero Research

.

Corp.,; New York

,

,

.

common

stock at $2 a share above the bid

common

on

price of such?
Com-?

Sept. 20 (letter of notification) 1,000 shares of $100 par
preferred; 4,000 shares of $10 par common. Offering
price, $100 a preferred share and $10 a common share.
No underwriting. The company proposes to invest
$50,-

-

the effective date of the registration,

will sell warrants for 25,000 common shares to the
underwriters at 10 cents a warrant. The remaining war¬
rants will be sold to officers and employees of the com¬
pany

000

estimated at $373,680,

in

serial

notes

of

the

Whitner

and

Price—Debentures at 100. Proceeds—Company will
use $1,025,000 of proceeds of debs, for payment of an
indebtedness to Bankers Trust Co., New York. Balance,
pany.

:

$35,000 in bonds of
Agency, Inc. The balance
capital.

;

r

will be added to working capital.

Oberdorfer

will

be

used

:

for

June

19

filed

shares

200,000

New York

($1

par)

common

J stocks

and
loans, construction of building at Newark Airport,

Underwriters—None. Proceeds—Repayment of bank
other

cost of moving

office, etc,

Air Express

Internat'l Agency, Inc., New York

July 22 filed 125,000 shares
Underwriters—Newburger &

of 50-cent par common.?
Hano; Gearhart & Co.,

sults of competitive bidding are known. Underwriter*—
To be filed by amendment.
Probable bidders include
■

notification) 10,000 shares of 5%
cumulative convertible preferred and 25,000 shares of
common, of which 10,000 share are reserved for conver-.
sion privilege.
Only preferred being offered. No under¬
writers.
Offering—Price $10 a share.
Proceeds for ?
purchasing plates, dies, authors' royalties, publishing?
rights, etc.
?
(letter

of

,

,

.

:

Dillon, Read & Co. Inc., White Weld & Co., and Shields
& Co. (jointly), and W. C. Langley & Co. and The
First Boston Corp. (Jointly).
Offering—Price to public
by amendment.

American

Brake

Shoe Co.,

New York

Sept. 13 in the ratio of one additional share for each
four shares held at $35 per share. Rights expire Oct. 21.
Unsubscribed shares will be. sold to other persons in¬
cluding officers and employees.
Price, $35 a share.
Proceeds—Net proceeds, estimated at $6,915,285, will be
used to defray part of the cost of its plant expansion and
improvement program.

sold

assets

two

of American

Common

June

27

filed

950,000

shares

($1

Inc.,
par)

Nii?'Y*

common

stock.

Underwriter—Dillon, Read & Co. Inc., New York. Offer-

stock

is

to

be

offered

initially for cash
to common stockholders of parent and to public holders
of preferred stocks of Community and Ohio iri
exchange
for their shares.

exchange offers
For details

see

Stock not subscribed

issued under

to be sold for cash to underwriters.

are

issue of April 4.

will

share held.

be

Unsub¬

purchased

ment.

by

Artloom

Corp., Philadelphia

shares will be offered for
holders in ratio of
The

subscription to

common

share for each two shares held.

one

remaining 2,734 shares and

any

shares not subscribed

for by common stockholders will be offered to
employees
of company. Price—$10 a share. Proceeds—The
company
estimates it will use $300,000 of the proceeds to purchase

additional space and equipment, and $350,000 for manu¬
facturing facilities. The balance will be added to work¬

•

Axe-Houghton Fund,

Sept.

24

filed

Underwriter

500,000

ing agent. Price

Bendix

Inc.,

shares

Jersey City,

N. J.

Sept. 6 filed 336,550 shares common stock (par $1).
Un¬
derwriting—No underwriting.
Offering—Stock will be
offered for
ord

on

subscription to

Nov.

1

in

shares

the

common

ratio

held.

The

of

one

stockholders of

—

—

At market. Proceeds

Investment house.

For invest¬

—

?•

?';

;■

Helicopter, Inc., New York""1"

Sept. 18 (letter of notification) 20,000 shares of common /;
(par 500). Offering—To be publicly offered at $1.20
per share (estimated market). Underwriter — Bond &
Goodwin, Inc. will act as broker., Proceeds to selling
stock

stockholders.

-

V V

•

v?? :

?

Berbiglia, Inc., Kansas City, Mo.
Sept. 12 (letter of notification) 41,000 shares

of

additional

share

for

subscription offer will ex-;

$6

a

Offering price,
share. Underwriter—Estes, Snyder & Co., Topeka,

Kans. To pay outstanding indebtedness and expenses and
to open five additional stores in Kansas

July

filed

29

100,000

Underwriters—F.

Byllesby

and

underwriters
will

ing

Co.

S.

shares
Yantis

($1
&

par)

Co.,

Offering—Shares

common

stock.

Inc.,

and

H.

M.

were

sold

to

the

July 29, 1946 at $10.70 a share. They
offered to the public at $12.50 a share. Offer¬
date indefinite.
on

be

,

—

SPECIALISTS

Underwriters and Distributors

United Stales Government Securities

of

Corporate and Municipal

Municipal Bonds

M

Securities

C. J. DEVINE
*•

,J";'

'

CO.

&

Kidder, Peabody

'

INC.

CORPORATION
•

Pittsburgh

and other cities




Co.

Founded 1865
48 WALL ST., NEW YORK 5, N. Y.

;

•

Chicago

5%

cumulative convertible $6 par preferred.

The

New York

■

Black, Sivalls & Bryson, Inc., Kansas City, Mo*

rec¬

pire on Nov. 21.
Unsubscribed shares will be offered
for subscription to officers and directors of the
company.
Price—By amendment.
Proceeds—Working capital.
?

State and

•

;

($1

par) capital stock.
Leffler Corp., Jersey City acts as sell¬

—

ment. Business

'

Boston

?

stock¬

_

FIRST BOSTON"

the

ing temporarily postponed.

Zinc, Lead & Smelting Co., St. Louis

i.

Corporate and Public Financing

or

common

common

City, Mo. Offer¬

American

each two

American Broadcasting Co.,

Water Works & Electric, liquidate
Community Water Service Co. and
Corp., and provide cash working capi¬

subsidiaries,

Ohio Cities Water
tal.

Aug. 16 filed 199,101 shares (no par) common. Under¬
writing—No underwriting. Offering—Shares are offered
for
subscription
to
common
stockholders
of
record

Purpose—The common stock, together
$15,000,000 10-year 3% collateral trust bonds (to
privately) are to be issued to acquire certain

with
be

of

Price—Public offering prices by amend¬
Proceeds—Net proceeds will be used to retire all

ing capital. Issue postponed indefinitely.

March 30 filed 2,343,105 shares of common (par $5) plui
an additional number determinable
only after the re¬

Algonquin Publishing Co., Inc., New York28

Proceeds—Net

American Water Works Co., Inc., N. Y.

Inc., and Burnham & Co., all of New York. Offering—
The shares will be offered publicly at $6 a share.
Pro¬
ceeds—Estimated net proceeds of $656,250 will be added
to general funds. Temporarily postponed.
r

Aug.

amendment.

proceeds, with
other funds, will be used to redeem $20,000,000 of 7%
cumulative preferred stock at $115 a share plus accrued
dividends. Indefinitely postponed.
'

'

t

by

share for each

shares

August 16 filed 151,367 shares (no par) common. Under¬
writers—No underwriting. Offering—Of the
total, 148,633

July 18 filed 100,000 shares each of $100 par prior pre¬
ferred stock and $100 par convertible second preferred
V stock. Underwriting—Union Securities
Corp., New York.
Price

new

underwriters.

working
■w,

r.

'r American Locomotive Co., New York '/•
Air Cargo Transport Corp.,

a

scribed

unexchanged shares of $6 prior stock and to redeem its
Co., Inc.,
Insurance ?? outstanding 7% preferred stock. Temporarily postponed.

Insurance

the

.

of

Chicago

»

Boston

♦

Cincinnati

Philadelphia
•

St. Louis

•
•

HAnover 2-2727

Pittsburgh

•

%

Members

Cleveland

New York

San Francisco

☆

of the New York and Boston Stock Exchanges
1
Boston
Philadelphia
Chicaoo
.

7

{Volume 164

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4528

the company
selling 67,500 shares to underwriters for public offer¬
ing and 55,177 shares are to be offered in exchange for
outstanding capital stock of Consolidated Printing Ink
Co., Quality Park Box Co., Inc., and John Beissel Co.,

(Showing probable date of offering)

which will become subsidiaries. In

September. 27, 1946
Upson Co.

—

_______

_

_^.Common

—Equip. Trust Ctfs.

October 1,

common

corporate

$26.50

funds.

Brunner

1946

Ohio Associated Telephone Co

-Bonds
Shaycraft, Inc.___
Pref. and Common
Wheeling & Lake Erie Ry. (Noon EST)
Equip. Trust Ctfs.
October

share;

a

and

7, 1946

;

October

21, 1946

—For

v-.October;28, 1946'
Films Inc._—

Blumenthal (Sidney) & Co. Inc., New York
Aug. 30 filed 119,706 shares (no par) common and sub¬
scription warrants relating to 30,000 shares thereof.
Underwriting — None. Proceeds—For reimbursement
; of company's
treasury ; for
funds'1 expended i in
re¬
demption
of
3,907
shares
of
7% " cumulative pre¬
ferred on April 1, and for funds deposited in trust for
redemption on Oct. 1 of remaining preferred shares. Al¬
though it was proposed to offer the stock for subscrip¬
tion to stockholders at $10 per share,
company on
20 decided to withhold action at this time.
I

Sept.

of

Chicago,

Inc.

Sept. 10 filed 30,000 shares ($50 par) 5% cumulative
preferred and 500,000 shares ($1 par) common. Under¬
writers—Paul

H.

Davis

Offering—Preferred

&

will

Co.

Stroud

and

&

Co., Inc.

have ,non-detachable

stock

purchase warrants for purchase of 30,000 shares of

com¬

stock

of the total common, 375,000 shares will be
offered for sale, for cash. 30,000 shares are reserved for
issuance upon exercise of warrants attached to preferred
mon

and 95,000

cise

of

shares

are

outstanding

Braunstein

(Harry), Inc. Wilmington, Del.
($25 par)

4%% cumulative
convertible preferred stock and 50,000 shares (200 par)
common

stock. Underwriter

New York.

Price

share for

$25

—

common.

a

C. K. Pistell & Co., Inc.,
share for preferred and $11
—

Proceeds

—

the

Of

shares

regis¬

tered. 7,000 preferred shares are being sold by company,
the remaining 5,500 preferred shares and all of the
common

are

stockholders.

being
Net

sold

by

proceeds

company's

to

the

three

in

company,

Wilmington, Delaware and

a

summer

branch

store in Rehoboth Beach, Delaware.

H

Briggs & Stratton Corp., Milwaukee

Aug. 9 filed 76,000 shares (no par) capital stock. Under¬
writers—A.

G.

!

shares of American Gas and

common

;

(

Co.,Springfield.

III.
•

>

,

Burgess-Norton Mfg. Co., Geneva, III.

Aug. 14 filed 150,000 shares ($100 par) cumulative pre*
Sept. 23 filed 10,000 shares ($50 par) 5% cumulative Yferred stock.. Underwriter—To be determined
by com*
preferred and 120,000 shares ($2.50 par) common. Under¬
vYpetitive bidding. Probable bidders include Dillon, Read
writer—H. M. Byllesby and Co. (Inc.), Chicago. Offer¬
& Co., Inc.; Smith, Barney & Co., White, Weld &
Co.;
ing—Of the total 120,000 common shares, 110,000 are is¬
Glore, Forgan & Co.; Lehman Brothers and Lazswrd,
sued and outstanding and being sold by stockholders.
Freres & Co. (jointly).;
Offering—New preferred stock:
The remaining 10,000 shares are reserved for issuance
will be offered on a share for share exchange basis to
upon the exercise of warrants attached to the preferred a holders of
its old preferred stock other than the Middle
being offered. Price by amendment. Proceeds — The
West Corp. which holds 38,564 shares of such stock.
Jf
Company will use its proceeds to reimburse its treasury, y more than
150,000 shares of old preferred stock are <&<for purchase of machinery and equipment at a cost of
posited for exchange the number of shares to be ex¬
$98,386 and toward payment for a new building being
changed will be pro rated/ Shares of new preferred not
constructed by the company at an estimated cost * of
issued in exchange will be sold to underwriters.
Fi$~
$223,700.
Any balance will be used for purchase of
; ceeds—Net proceeds from sale
of shares not issued J»
additional machine tool equipment. Business—Company
exchange will be used to redeem old preferred at
manufactures piston pins, spindle bolts, shafts, ball bear¬
a share and accrued dividends.
ings, clutch plates, stampings and other steel products.
'

Central & South West Utilities

California Oregon Power Co.
;

May 24 filed 312,000 shares of common stock (no par).
Stock will be sold through competitive bidding.
Under¬
writers—Names by amendment.
Probable bidders in¬
clude Blyth & Co., Inc.; The First Boston Corp.; Harri¬
man
Ripley & Co.
Offering—Stock is being sold by
Standard Gas and Electric Co., parent, of California.
Bids

Rejected—Standard

Gas

&

Electric

Co.

'

as

Becker &

Co., Inc., Chicago.!; Price by
amendment.
Proceeds—Shares are being sold by stock¬
holders. Temporarily postponed.
/.

purchase of the stock as un¬
Blyth & Co., Inc., and First Boston Corp.
a share, and Harriirian Ripley & Co. bid
of $24,031 a share.
Stock will again be put up for sale
when market conditions improve.
satisfactory.

a

sufficient number of such share*

constituted

the

into

upon

issuer

consummation o£ M
of American Publle

not

exchanged for shares of the merged corporate©.
by amendment.
Possible bidders;, Glore,
Forgan & Co.; Lehman Brothers-Lazard Freres & Co,

of $28.33

Underwriters

y

(jointly); Smith, Barney & Co.-Harriman, Ripley & Co¬
njointly); Blyth & Co., Inc., Stone & Webster Securities
; Corp. and First Boston
Corp. (jointly). Price by amend*
-ment. Business—Public utility holding company,
j

*v^/California-Pacific Utilities Co., San Francisco
Sept. 6 filed $1,670,000 of first mortgage bonds, Series
B, due 1971, and 33,610 shares ($20 par)
common.
Underwriters—To be determined by competitive bid¬
ding.
Probable bidders include Halsey, Stuart & Co.,
Inc. (bonds only). Proceeds—Net proceeds will be used
to redeem outstanding 3*&% mortgage bonds of East¬
ern
Oregon Light & Power Co., whose electric prop¬
erties were recently acquired by the company; to pay

Central Soya Co.,

Inc., Fort Wayne, Ind.

Aug. 21 filed 90,000 shares (no par) common. Under*
writers
Glore Forgan & Co., Chicago. Offering —
—

Common shares
to

held.

shares

underwriters.

■

for previous expenditures. yr.V-Y-'-Y

;

'

capital,

initially will be offered for subscription

stockholders

common

7Vs

,

off short term indebtedness and to reimburse its treas¬
ury

of

be

Service Co., to provide funds for retiring the preference
shares of the issuer and American Public Service

June 25 two bids for the

bid

will

same

proposed merger

rejected

Co.

Aug. 30 filed its ($5 par) capital stock. Company's nante
is to be changed by post effective amendment to Central
& South West Corp. (Del.)
Prospectus will be issued
in connection with the public invitation for sealed bills
for the purchase

present

estimated
at $147,500, will be used to prepay to the extent possi- ;
ble outstanding $149,300 mortgage liabilities. Business—
Operation of retail ladies ready-to-wear and accessory
store

■

.

outstanding preferred stock of Brunner.

reserved for issuance upon exer¬

Sept. 25 filed 12,500 shares

a

■

Central Electric & Gas Co., Sioux Falls, S. D.

May 29 filed 35,000 shares of $2 cumulative preferred
stock, series A (no par), but with a stated value of $50 J»
share, and 175,000 shares of common stock (par
Underwriter-^-Paine, Webber, Jackson, & Curtis, (Si*
;
Buffonta Mines Ltd., Toronto, Can. ;
■'
cago. Offering—The stocks will be offered to the public
Sept. 12 filed 1,000,000 shares $1 par (Canadian cur¬
at prices to be supplied by amendment.
Proceeds—To
rency) common. Underwriting — George F. Jones Co., i' pay off
$3,000,000 loan from First National Bank Chi*
Inc., Buffalo, N. Y. Price—$1 a share, American cur¬
cago and Harris Trust and Savings Bank, Chicago, bad*
rency. The underwriting commission will amount to 20 :
ance working capital.
cents a share. Proceeds—For development of gold min-:
ing properties.,
Central Illinois Public Service
jy
the

warrants.

Price—By amendment.
Proceeds—Net proceeds, together with other funds, will
be used to pay the company's 2% subordinated note in
the principal amount of $5,268,750 and accrued interest.
•

"V.

■

Y/

.

*i '

Boston Stores

variety of purposes in connection with explore^
of shafts, diamond drilling and working

capital.

Machine Co.,' of Albert Lea, Minn., on the basis of three
for each Class B share.
Price—$10.25 a share.

.

Class A and Common

__

a

tion, sinking

shares

standing Class A

__Pref. and Common

underwriter by post-effective amendment.
Offering—
To the public at $1 a share in Canadian funds. Proceed*

,

Proceeds—Net proceeds will be used to redeem the out¬

Plastic Molded Arts Inc.__

Ltd., of Toronto,

June 24 filed 400,000 shares of common stock.
Under¬
writer—Registrant will supply name of an American

;

.

of American Gas

common

;

Carscor Porcupine Gold Mines,
Ontario

Manufacturing Co., Utica, N. Yyy,

23,395 shares of Class B

,

Candego Mines, Ltd., Montreal, Canada

postponed.

Sept. 13 filed 180,185 shares ($1 par) common. Under¬
writers—George R. Cooley & Co., Inc., Albany, N. Y.,
and Mohawk Valley Investing Co., Inc., Utica. Offering—
Of the total, 110,000 shares will be offered publicly and
the remaining 70,185 shares will be offered in exchange
for

Chicago, Indianapolis & Louisville Ry.
(Noon CST) Cond. Sales Agreements

temporarily

Indefinitely delay^.riir

May 31 filed 500,000 shares of common stock (par SI),
Underwriters—Sabiston-Hughes, Ltd., Toronto.
Otter*
ing—Shares will be offered to public at 75 cents a sham.
Proceeds—Net proceeds, estimated at $300,000, will he
used for mining operations.
;
; '

i

share. Proceeds—Net proceeds to

Offering

£

machinery and equipment, and tools, jigs, die#
fixtures; balance will be available for corporate

purposes.

.

the company will be used to redeem unexchanged shares
of 6% preferred at 110% and for increasing general

September 30, 1946

Str Louis-San Francisco Ry

addition, stockholders

of the company are selling 322,521 shares to the under¬
writers for public offering. Price—Preferred $103.50 a

'

1

.

chase of

is

NEW ISSUE CALENDAR

v

•

i

offered to the public. Of the total common,

V

if

etc.

at rate

of

Unsubscribed

share for

one

shares will

be

each

sold

to

Price by amendment. Proceeds—Working
Offering indefinitely postponed. :

j.Y

3
.

Brooklyn

:;

(N.

Y.)

Union Gas

Camfield Mfg.

Co.

May 3 filed 70,000 shares of cumulative preferred stock i
($100 par). Underwriters—To be filed by amendment.
Bids Rejected—Company July 23 rejected two bids re¬
ceived for the stock.
Blyth & Co., Inc., and F. S. Moseley & Co. and associates submitted a bid of 100.06 for a
dividend.

4.30%

Securities

Harriman

Corp. bid

Ripley & Co. and Mellon
100.779 for a 4.40% dividend.
In¬

Co., Grand Haven, Mich.

July 29 filed 220,000 shares ($1 par)
derwriters—Gearhart &

registered, 100,000
be

sold

to

the

are

common

Chase Candy Co., St. Joseph, Mo.

stock.

Un¬

Sept, 12 filed $2,500,000 of 4% sinking fund debentures,
due 1961; 100,000 shares ($20 par) 5% convertible cumu¬

Co., Inc. Offering—Of the shares
issued apd outstanding and will

underwriters

by

three

stockholders

lative

preferred, and 170,000 shares ($1 par) common.
—
F. S. Yantis & Co., Inc. and H. M.
Byllesby and Co. (Inc.). Chicago, and Herrick Waddell
& Co., Inc., New York. Offering—Common will be
fered for subscription at $10 a share to common stock¬

at

Underwriters

$4.50 a share for their own account. The remaining
120,000 shares are being offered by the company. Price
$4.50 a share. Proceeds—Company's share to pay rene¬
,

definitely postponed.
Brown &

'■'

Bigelow, St. Paul

July 19 filed 35,000 shares of .4%% ($100 par) cumulative
preferred stock and 427,558 shares ($1 par) common
stock. Underwriters—Reynolds & Co., New; York. Offer¬
ing—19,079 preferred shares will be offered to 6% pre¬
ferred stock
pot

issued

on a

in

share for share exchange basis. Shares

exchange plus

15,921

additional will be

gotiation refund ; in amount of $180,000 to the U. S.
Government, and for additional working capital. Offer¬
ing date indefinite.
.■■.
-Vy

holders
of
.

:

Canadian Admiral Corp.

for

at

record

will

rate

be

of

Oct.

on

one

share

offered

for

sale

*.

.e

♦.

Industrial, Public Utility, Railroad
and

OF NEW YORK

;

Y

Transfer

Agent

Registrar

•

•

,

Members New York Stock Exchange

NEW YORK

PHILADELPHIA

ALBANY

,

,

PITTSBURGH!-




CHICAGO

j>

TRENTON

INDIANAPOLIS

WASHINGTON

'

:

Distributors

•

Municipal—Railroad

'

Trustee
Direct contact with Markets in principal

.V

& Co,

Public Utility—Industrial Securities

Municipal Securities

'/ Hemphill, Noyes C& Co.

directors and

of

The Marine Midland Trust Company
Y/

officers,

held

subscribed

:♦

Underwriters

;

to

shares

not

July 8 filed 150,000 shares ($1 par) common stock. :
Underwriter—Dempsey & Co. Offering—Stock initially
common stock subscription rights, F.
S. Yantis
will be offered to common stockholders of Admiral Corp.
at $3 a share.
(Continued on page 1574)
Proceeds—$75,000 is earmarked for pur- ;■;"

UNDERWRITERS—DISTRIBUTORS—DEALERS

■><

two

common

employees. Price—The debentures will be offered at
100 and the preferred at $20 a share. The common will
be offered to stockholders at $10 a share. Pursuant to the

Ltd., Toronto

•

'

for each

19. Shares of

financial center#.

ONE HUNDRED TWENTY BROADWAY
NEW YORK 15, N. Y.

E. H. Rollins & Sons
Incorporated

RECTOR 2-2200
A

!

•

■

•

■

<
New Tork

40 Wall Street, New
•

Boston

-

Philadelphia

*

**

York.$,
-

Chicago

~

-

San Francisce

^

1574

THE COMMERCIAL & FINANCIAL CHRONICLE"
(Continued from page 1573)

will

purchase
for

common

investment. Any

shares which

officers,

sold to the corporation certain properties, etc., in consideration for the issuance to him of certain stock inter¬

100,000 shares of the 170,000 shares 6f

directors

and

employees

70,000
by stockholders and
will be sold to the

$5,150,000, for acquisition of the
candy manufacturing business operated by Clinton In¬
dustries, Inc., as its national candy division with plants
in St. Louis, Mo., and Chicago. The balance will be used
to redeem its 4% serial debentures and for additional
'

>■

-

''/"y!,'

•

N. J.

v
■

Clary Multiplier Corp., Los Angeles
Sept. 3 filed 150,000 shares 5%% cumulative convertible
preferred stock (par $5). Underwriting—Maxwell, Mar¬
shall & Co., Los Angeles. Price—$5.25 a share. Proceeds

Industries, Inc., Chicago

Consumers

Corp., issuer's sole stockholder, is offering
own account. Prices by amendment.

for its

and

for

..

working capital. Indefinitely postponed.

stock.

common

Underwriters—Emanuel, Deetjen & Co., New York. Price
by

amendment.

Proceeds—Company will

receive

pro¬

150,000 shares and Generoso Pope,
President of company, who is selling the remaining 150,000 shares will receive proceeds from these shares. The

Colorado Milling & Elevator Co.,

vertible

ties

Denver, Colo.

70^00 shares ($50 par) cumulative

preferred

stock.

Underwriter—Union

Columbia Aircraft Products

Securi¬

two

principal

their rights to subscribe. The
and shares not subscribed to

Inc., Somerville,

'

common

common

stockholders

held.

who

waived

remaining 90,414% shares
by

common

stockholders

share. Proceeds—Approximately $55,000 for pay¬
taxes; $250,000 for payment of a loan;
loan to

Palmer

Brothers

Engines, Inc.,

a

used for

Commonwealth Fund

working capital.
of

For investment. Business

—

Investment House.

•

Commonwealth Telephone
Co., Madison, Wis.
Sept. 23 filed 16,071 shares ($100
par) $4 cumulative
preferred. Underwriters
Paine, Webber, Jackson &
Gurtis and Stone & Webster
Securities Corp., both of
New York. Offering—The shares will
—

be offered for

ex¬

change to the company's $5 cumulative
preferred, on a
share for share
basis, plus a cash adjustment to the old
preferred stockholders.

Shares not issued in
exchange
Will be sold to the
underwriters. Price by amendment

Proceeds—Proceeds will be used to redeem

share, plus divs., all

unexchanged

shares

of

at

$110

old

a

1

'

,

Unsub¬
Price

by

general funds.

-'

^

j

'

i

common

Corp.

,

—

First

Colony

stock (par 10c).
Offering — 25,000

\

July 29 filed 140,000 shares ($1 par)

:

,

•

Connell

.

.

(W. W.) Inc. Fort Worth, Tex.
Sept. 23 (letter of notification) 10,000 shares of common.
Offering price, $5 a share. Underwriting, the notification
stated that since
Connell, President of the corporation,




f

preferred

stock,

stock

common

Inc., N. Y.

(par $25) and 150,000 shares of
$1). Underwriters—Van Alstyne,

(par

Noel & Co. Proceeds—Corporation will receive the pro¬
ceeds from the issuance of 50,000 shares of the common
stock which will be used to increase productive capacity,
add new lines of products and expand the business.

They

remaining 100,000 shares of

common

stock and the pre¬

ferred shares will be sold by present stockholders.

•

>

Engineers Waterworks Corp., Harrlsburg, Pa. •
June 24

(letter nf notification) $275,000 4% debentures
Underwriters—C. C. Collings & Co., - and
Stroud & Co., Inc., Philadelphia. Price, $101. Proceeds/7
for purchase of additional water properties or their
due

vt

Sept.

5

filed

shares

105,000

common

stock

(par

$1).

Underwriter—Straus & Blosser, Chicago.
Price—$11.50
a share.
Proceeds — Shares are being sold by stock¬
holders.
*
'
1*
,

Fashion Frocks,

July

24

giving effect to the sale and assuming exercise of certain i
warrants and an option, the Meyers family will retain
ownership of approximately 58% of the common stock.

Inc., L. I. City, N. Y.

7 Aug. 9 filed 300,000 shares ($5 par) common stock.
Underwriters—First Boston Corp., New York.
Price by
amendment.
Proceeds—Go to Joseph Levy, President,

•

Felt & Tarrant Manufacturing

Co.

Sept. 25 filed 251,340 shares of common stock (par $5).
Underwriters

Offering date indefinite.

—

Lee

body & Co. Offering

Higginson Corp. and Kidder, PeaShares are being sold by share¬
changes in com¬

—

holders after consummation of proposed

Cyprus Mines, Ltd., Montreal, Canada
May 31 filed 500,000 shares of common stock (par $1).
Underwriters—Sabiston-Hughes, Ltd., Toronto. Offer¬
ing—Shares will be offered to the public at 75 cents a
Proceeds—Net proceeds, estimated at
$300,000,
will be used for
mining operations. Business — Explor¬
ing for ore.
*

Inc.

filed

200,000 shares ($1 par) common stock..
Underwriter—Van Alstyne, Noel & Co. Offering—Offer¬
ing does not constitute new financing but is a sale 6f
currently outstanding shares owned by members of the
Meyers family, owner of all outstanding stock. After

selling 100,000 shares and 15,000 shares are
being sold by a stockholder. The company will use its
proceeds to provide additional factory space and purchase machinery and equipment and to construct a new
office building. The balance will be added to
working
capital. Offering date indefinite.

stockholders.

7

Ero Manufacturing Co., Chicago

company is

Crawford Clothes,

1971.

securities and for other corporate purposes.

Copco Steel & Engineering Co., Detroit

<

*•

\

current

pany's capitalization and the merging into the company
of Comptometer Co. Price by amendment. Business —
Makers of "Comptometer" adding-calculating machines.

share.

Danly Machine Specialties,
July

26

Inc.,

Cicero,

III.

;

filed

62,000 shares ($25 par) 5% cumulative
convertible preferred stock and 71,950 shares
(par $2)
common stock 40,000
by company and 31,950 by certain
stockholders. Underwriters—Paul H. Davis &
Co., and

Shillinglaw, Bolger & Co., Chicago. Price by amend¬
Proceeds—Company will use proceeds, together
a
$1,000,000 bank loan, to purchase machinery,
buildings and to retire bank indebtedness. Temporarily
ment.

with

postponed.

7

Delanne Aircraft Corp., New York
*
Sept. 11 (letter of notification) 300,000 shares of $1

/common.

Offerings-Price $1

a

share.

par

No underwrit¬

ing. For organization of business of manufacturing and
selling airplanes.
j

pre¬

ferred stock and to pay cash
amounts required by the
terms of the exchange offer.
Business—Providing tele¬
phone service in Wisconsin.
1

to

'

,

1.

f

•

"

•

■"4 '

v-7'f '

-.

'

7

Fidelity Discount Corp., Detroit

•

*

..

*'

.7

**•-:

\

,

,

Derby Oil Co., Wichita, Kans.
«July 19 filed 131,517.3 shares ($8 par) common stock.
Underwriting—H. M. Byllesby and Co., Inc., Chicago,
and

Nelson

Douglass

&

Co.,

Los' Angeles.

Price

by

amendment.

Proceeds—Part of the estimated net pro¬
ceeds will be used to pay a bank loan.
The remainder,
with other funds, will be used to
expand a

drilling and

exploration program. Indefinitely postponed.

.V

!'*:•"}'

'

6%

—

•

'

Boston

Sept. 24 filed commonwealth fund indenture of trust
5,330 plans A; 8,004 plans B.
Underwriting—Trusteed
Funds, Inc., Boston is sponsor. Price
At market. Pro¬
—

underwriters.

Indianapolis, Intf.

selling
Commonwealth Aviation Corp., New York
June 28, 1946 filed 150,000 shares
($10 par) 4%% cumu¬
lative convertible preferred stock and
300,000 shares
($1 par) common stock. Underwriters—To be supplied
by amendment. Price—$12 a share of preferred and
$7
a share of common.
Proceeds—Estimated net proceeds of

ceeds

(no par) 7

be

Aug. 19 filed 115,000 shares ($1 par) common. Under¬
writer—E. H. Rollins & Son,
Inc., New York.
Price
by amendment.
Proceeds—Of the shares being offered

Rights

subsidiary, balance working capital.

•

Underwriters—To

tures, due 1967, to pay certain debts and for additional
equipment, manufacturing space and working capital.

stockholders

ment of Federal

$3,420,000 will be

to

Proceeds—To be added

shares being offered by Dumont Electric Corp., and 69,000 shares by Dumont Electric Co., a limited partnership.

4V2% cumulative
convertible preferred." Underwriters—Otis & Co. and
Prescott & Co., Inc.
Offering—To the public.
Price—
$25 a share. Proceeds—Estimated net proceeds of $1,356,200 will be used to redeem its outstanding 4% deben¬

will be offered to the public
through underwriters. Price

a

for each share held.

sold

Underwriter

July 17 filed 60,000 shares ($25 par)

150,000

of preferred for each share of
expired Aug. 20. The offering to

as

be

Temporarily postponed.

Mich.

Cooper-tire & Rubber Co., Findlay, Ohio ,77"

■

Underwriters—Floyd D. Cerf
Co., Inc., Chicago. Offering—Company offered 59,585%
shares for subscription to present common stockholders
of record Aug. 6 at $4.50 a share in the ratio of one share

$50,000

amendment.

will

Aug. 29 filed 94,000 shares of

Co., Jackson,

liability of company for Federal taxes,
and balance to working capital.
Indefinitely postponed.

each share of preferred.

a

Power

unspecified number of shares

advertised for Sept. 24.

were

extent

shares ($4 par) 30c cumulative
stock, convertible into common
6tock in the ratio initially of 1% shares of common for

—$5

shares

Drayer-Hanson, Inc., Los Angeles

preferred

the

scribed

vertible

Underwriters—W. C. Langley & Co. and
Aronson, Hall & Co. Price by amendment. Proceeds—
$1,510,833 to repay notes and obligations; $1,600,000 to
purchase U. S. Treasury savings notes to fund to that

J.

excluded

at rate of one-half share

7

common.

con¬

preferred, together with other funds, will be used to
repay the bank loan. Indefinitely postponed.

convertible

Los Angeles

Aug. 2 filed 80,000 shares of cumulative sinking fund
preferred stock ($25 par) and 350,000 shares ($1 par)
«

ferred stock for redemption at $55 a share
plus accrued
dividends.
Funds for the redemption will be supplied
by a short term bank loan.
Proceeds from the sale of

filed

July 25 filed 65,347 shares (no par) common stock/ Un¬
derwriter—Merrill Lynch, Pierce, Fenner & Beane,
Npw
York.
Offering—Stock will be offered to stockholders

ble

Price by amendment.
Proceeds
—Prior to the proposed issue of preferred
stock, the
company plans to call its $3 cumulative convertible pre¬

N.

Inc.,

Continental-United Industries Co.,

Corp., New York.

June 26

Hotels,

j

Dictaphone Corp., New York

t;

■

1

company will use its proceeds for payment of mortgage
notes, open account indebtedness and for purchase of
additional equipment. Any balance will be added to
working capital. Indefinitely postponed.

Aug. 20 filed

,,:7

.

ceeds from the sale of

<

r\v

f

common stock, of
which 40,000 shares are being sold by two stockholders.
Continental Motors Corp., Muskegon, Mich.
J
Underwriters—By amendment. May be placed privately.
July 8 filed 250,000 shares 4%% cumulative convertible 7 Price
by amendment. Proceeds—From sale of company's
preferred stock, Series A ($50 par).4'* Underwriters—Van
100,000 shares for purchase of inventory, payrolls, and
Alstyne, Noel & Co.
Offering—Price by amendment.
working capital.
Proceeds—For rearrangement and expansion of the com¬
'
* ' A '
£
^
/'
M
^
»' 1
J j, f
"
pany's manufacturing plants, acquisition of additional
Empire Millwork Corp., New York
»
tools and facilities, and for additional
working capital
Aug. 28 filed 50,000 shares of $1.25 cumulative converti¬
requirements.

Co., Inc., N. Y.I

August 15 filed 300,000 shares ($1 par)

Inc., East Orange,

determined by 7
competitive bidding.
Probable bidders include Morgan;; Price by amendment.
Proceeds—Net proceeds from the
Stanley & Co.; Lehman Brothers; Shields & Co.; Harrisale of the company's 25,000 shares will be used for gen¬
man Ripley & Co. and The First Boston
eral corporate purposes. Offering temporarily postponed.
Corp. (jointly).
Price by amendment. Sale Postponed—The
company on
Sept 19 postponed indefinitely the sale of the stock.
Electronic Laboratories, Inc.,
Bids

'v

Colonial Sand & Stone

an

stock.

common

Proceeds of preferred to pay company's indebtedness to
General Finance Corp., purchase equipment and real
estate

/•. '7;''

-

Aug. 9 filed

standing common stock. Underwriter—Brailsford & Co.
Offering— company is offering the preferred and Gen¬
common

Transit,

Aug. 12 filed 80,529 shares ($1 par) class A stock, con¬
into common stock (par $1).
UnderwritersMaxwell, Marshall & Co., Los Angeles. Price—To public
$10.25 a share.
Proceeds—Net proceeds, estimated at
'
the sale of 851 shares of preferred. The
$694,761, will be used to pay off loans and accounts pay¬
remaining shares
of preferred and all of the common are
able. Offering temporarily postponed.
7v;
being sold by V
,'t
Ben Weingart, President and director.
Company will 7
add the proceeds to
Dumont Electric Corp., New York • r
T
working capital. - 7;

Aug. 28 filed 150,000 shares 5% convertible cumulative
preferred ($10 par) and 250,000 shares ($1 par) out¬

the

—

Aug. 9 filed 97,363 shares ($25 par) 4%% convertible
preferred stock and 150,000 shares (50c par) common.
Underwriter—Lester & Co., Los Angeles.
Price—$25 a
share of preferred and $9 a share of common.
Proceeds
—Of the total, the company will receive
proceeds from

proceeds, estimated at $650,000, will be used to
repay a $90,000 bank loan, to construct a factory and
office building at San Gabriel, Calif., at a cost of about
$250,000, and to purchase additional equipment, esti¬
mated at $250,000.
The balance will be added to work¬
ing capital. Offering temporarily postponed.

eral Finance

—

July 29 (letter of notification) $100,000. 7% cumulative
(non-convertible) preferred stock and $100,000 class B
common stock.
No underwriter at present, but one ex-r
pected.
Price, $50 for preferred and $3 for common.
Proceeds—For purchase of equipment and for
operating |
capital,
- 7
/.-/ • yh7*7/ --%7V 7,
77;.. - ■
7;;,v 7'777/yiConsolidated

—Net

Climax

70,920 shares

,

Consolidated Air

price, amounting to

Working capital.

Detroit, Mich.

($1 par) common. Under¬
writer
C. G. McDonald & Co., Detroit. Price — $5.50
a share.
Proceeds
Stock is being sold by six share- ,7,
holders Who will receive proceeds. Business — Setting
and manufacturing type.
■

he

underwriters. Proceeds—Net proceeds, estimated at $5,856,125, will be used to pay the balance of the purchase

Detroit Typesetting Co.,

Sept. 25 filed

may be deemed that he is an underwriter. Al¬
though he received no part of the sale price nor does
receive any commission on the sale of stock.
Fort
expenses and drilling operations.
>
7;7';-';!■'■

of the remaining

not subscribed for

are

•k

,

it

est

Thursday, September 26, 1946

(letter of notification) 10,000 shares ($10 par)
cumulative convertible preferred.
Offering-^Price

$10

a

Sept. 13

Underwriter—First of Michigan
capital.

share.

Detroit.

For additional working

Films Inc., New York

Corp.,
.

.

j

(10/28-31)

June 25, filed 100,000 shares ($5 par) class A stock, and

300,000 shares (10 cent par) common stock, of which
200,000 shares reserved for conversion of class A. Each
share of class A stock is initially convertible into 2
6hares of

common stock.
Underwriters—Herrick, WadCo., Inc., New York. Offering—To be offered
publicly at $8.10 a unit consisting of one share of class A

dell

&

p/.ock and

one

share of common stock.

U00 for retirement of 2,010

Proceeds—$201,-

shares ($100 par) preferred

stock at $100 a

other

share; remaining proceeds, together with
funds, will be used for production of educational

films.

Food Fair

-

Stores, Inc., Philadelphia-

Aug. 5 filed 60,000 shares ($15 par) cumulative preferred
stock.
Underwriters—Eastman, Dillon & Co.
Price by
amendment.. Proceeds—To be used to redeem 15-year
3Vfe% sinking fund debentures, due 1959; and $2.50 cum¬
ulative preferred at $53 a share.
Balance will be added
to working capital.
Temporarily postponed.
\

7

Volume" 164

Number 4528

Fabrics

Foreman

1573

Graham, Jr., 100,000 shares of issued and out¬
Prices, preferred $100 a share; com¬
mon
$14 a share. Proceeds—To retire $6 cumulative
: preferred, pay notes, discharge a loan. Offering tem¬
porarily postponed.
standing

/

'

(Mich.)

Kalamazoo

and J. C.

Corp., New York

July 29 filed 110,000 shares ($1 par) common stock, all
outstanding.
Underwriters—Cohu & Torrey. Price by
amendment. Offering date indefinite.
Forest

FINANCIAL'CHRONICLE

THE COMMERCIAL &

common.

to common stockholders in the ratio of one
each five shares held.
Price—$15 a share.
Proceeds—Proceeds, estimated at $1,500,000, will be used
to retire a $500,000 short-term bank loan, to make loans
to The KVP Co. Ltd., a subsidiary, and to increase work¬

City Mfg. Co., St. Louis

ing capital.

•

State

Lake

Underwriters—Blair & Co.

'

Fownes

Brothers

& Co.,

ceive proceeds.
Fresh

•

Hammond

Aug.

Aug. 30 filed 450,000 shares (100 par) common. Under¬
& Banks, Inc. Offering—Of the total
company is selling 350,000 shares and two stockholders,.

Roland E. Fulmer and Louis H. Newkirk, Jr., are selling
the remaining 100,000 shares. Price—$6 a share- Proceeds

purchase of sweet potatoes, plant, expansion, addi-

tibnal storage facilities, research and development work
and working
General

Bronze

•

Corp., L. I. City

'

:

s

Glen Industries

Inc., Milwaukee,

Harris

27

Wis.

100,000

Glensder Textile Corp., New «York
•:

Alstyne, Noel & Co. Offering—The 300,000 shares are
issued and outstanding and being sold for the account
of certain stockholders.; Company has also issued 55,000,
stock purchase warrants to the selling stockholders at
10 cents a share entitling them to purchase up to Aug. 1,

($1 par)

e

Heinz

Inc., Los Angeles

y

shares will
an

the public and the remaining 136,500be reserved for issuance partly in payment-

Illinois

indebtedness. Partly as a commission to the selling

agents and

partly

exercise of options. Price—$5 a
refinancing of company sand for
working capital and funds for development and construe-!

Power Co.,

June

Corp., New-York V

>

(letter of notification) 300,000 shares ($1 par)
common.
Of the total, 85,590 shares are to be exchanged
far overriding royalty interests in leases and fee prop--

Leyendecker, Inc., and.
operations to be carried on by the issuer, :,The balance, 214,410 shares, will be offered publicly at $1 a share.
Underwriter—Leven Brothers, New York., Proceeds—
For direct corporate purposes.
s
v

'

converted

not
v

date.

The

into

balance

be

prior

to

added

common

will

to

Griggs, Cooper & Co., St. Paul, Minn.

/

(letter of notification)

12.000 shares ($1 par)
common.
Underwriters—Kalman I# Co., Inc., St. Paul,
Price—$25 a share.
Proceeds — For improvement and
modernization program. Offering indefinitely postponed.

'

International

Underwriter—Otis & Co.

Society, Inc., New York

^

July 29 filed 18,500 shares at $4.25 cumulative preferred
stock ($100 par),
with non-detachable common stock

,

two

000 shares of $1 par

common

M.

Byllesby

and

common

Co., Inc.

stock.

Underwriters—H.

Offering—Underwriters to

purchase from the company 18,500 shares of preferred
and 20,000 shares of common; and from Fred P. Murphy




Mercantile

•

Joe

Sept. 5

shares

on

888,500 shares

behalf of Inter-Mountain Shares,

Corp.

postponed.

f

Calif.,

of

Sail

'

'

being sold

on

behalf of Harold G. Snodgrass,

Mercury Messenger Corp., New York, N. Y.
common

(letter of notification) 93,000 shares of capital
stock (par 20c).
No underwriting.
Price—

$2.70 a share. Proceeds will go to expansion of
business^'.''/'
:

issuer's

•

<

Mica

Mountain

Mines,. Inc., Salt Lake City

Sept. 11 (letter of notification) 171,000 shares of common
for company, and 22,937 shares to be reoffered in the
alternative for an oversale of offering covered by letter
of notification filed Jan. 2, 1946, Offering price, 171,000
shares
25 cents each; 22,937 shares — 20 cents each,
Underwriting, for the 171,000 shares only—Howard R.
Clinger and O. M. Lyman, both of Salt Lake City. To
finance operations until production returns begin.
—

stock (par $1).

(10 par)
Inc.
Offering price, 2 cents a share. Underwriter—InterMountain Shares will do its own selling. Proceeds go
to the selling stockholder.
stock

are

Aug. 28

redemption
treasury funds.
on its fi¬

temporarily postponed.

Burlington, N. C.

president and director of the company, who will receive:
proceeds.

the

Dandy Mining Co.," Colorado Springs, Colo.
(letter of notification)

shares ($10 par) capital stock.
determined through competitive

Acceptance

Francisco

Offering—Price $10 per share.

Offering

,

Sept. 17 (letter of notification) 1,000 shares of $20 par
5% preference stock. Offering price, $20 a share. Under-?
writer—Guardian Securities Corp., San Francisco. The

v

Michigan Gas & Elec, Co., Ashland,

Wis.

A first mortgage bonds,
due 1976; 14,000 shares ($100 par) cumulative preferred
stock and 120,000 shares ($10 par) common stock.
Un-

June 24 filed $3,500,000 of series

Manufacturing Co., Chicago

stockholders.

,

.

Preque Isle, Me.

being registered. Offering temporarily

t

July 24 filed 148,176 shares ($1 par) common stock. Un¬
derwriter—Doyle, O'Connor & Co., Chicago.
Price,
$8.87^2 a share.
Proceeds—Shares are being sold by

purchase warrants entitling registered holders of shares
of the $4.25 preferred to purchase at any time 64,750
shares of common stock at $16 a share at the ratio of 3^
common shares for each preferred share held; and 120,-

...I

Noyes & Co. Price—By amendment. Proceeds—Net pro¬
ceeds go to 11 shareholders Who are selling the stock;

Co., Inc., New York
common

be

May McEwen Kaiser Co.,

Proceeds—Selling stockholders will receive proceeds.
'Jensen

Grolier

Dress

150,000

'''

Aug. 22 filed 175,418 shares ($1 par) common stock.
Underwriters—Goldman, Sachs & Co., and Hemphill,

nancing program because of present market conditions.
>

1.

Co., parent of Maine Public Service, in compliance with
geographic integration provisions of the Public Utility,
Holding Company Act.
,

Company has asked the SEC to defer action

Aug. 28 filed 140,000 shares of

gold

>

Probable bidders include The First Boston
Peabody & Co., and Blyth & Co., Inc.
(jointly); Harriman Ripley & Co; Coffin & Burr and
Merrill Lynch, Pierce, Fenner & Beane. Proceeds—The
shares are being sold by Consolidated Electric and Gas

'

S,ept. 3

filed

25

developing

and

■:

bidding.

selling the common shares.

erties formerly operated by R. E.

Grand Valley Oil

.

Underwriters—To

ferred stock and 966,870 shares

,

,

Business—Exploring

AJ—

Maine Public Service Co.,

pany's treasury for construction expenditures^ Net pro¬
ceeds from the sale of common will be applied for redemption of 5% cumulative convertible preferred stock

♦

'

Toronto

Corp.; Kidder,

Aug. 28

tion program.

outstanding

off

pay

mining properties.

June 17, filed 200,000

on

Proceeds—For

To

filed 250,000

company.

shares ($50 par) cumulative pre¬
(no par) common stock.
Underwriters—By competitive bidding. Probable bid¬
ders include Blyth & Co., Inc. and Mellon Securities
Corp. (jointly) and Morgan Stanley & Co. and W. E.
Hutton & Co. (jointly). Proceeds—Net proceeds from the
sale of preferred will be used to reimburse the com¬

share.

—

Engaged in six different busi-*

Division; Rig Building Division; Construc¬
Division; Lumber Division; Rotary Mud Division

V.'.-.

-

;

Decatur, III.

—

shares of capital stock (par 40c).Underwriters — Names to be supplied by amendment.
Offering—Stock will be offered publicly in the U. S. at
40c a share (Canadian money).
Proceeds—Proceeds,
estimated at $75,000, will be used in operation of the

Price—$25 a share of preferred. Price for the common
by amendment. Proceeds—Net proceeds will be added
to general funds.
,
;
'•

will be offered to

of

are

Proceeds

Mada Yellowknife Gold Mines, Ltd.,

($1 par) common stock. Undrewriters—Otis & Co., Cleve¬
land, Ohio. Offering—Company is selling the preferred
and stockholders

Dean Witter & Co., Los Angeles. Price-

Oil

June 7

June 28,1946 filed 20,000 shares of 4^>% ($25 par) cumu¬
lative convertible preferred
stock and 33,884 shares

shares

capital stock.

par)

($1

and Crushed Rock Division.

Proceeds—Company will apply $5,150,000
J* to redemption on or prior to Jan. 1, 1947, of outstanding
•
Golden Crown Mining Co., Crown King, Ariz.
4% cumulative preferred at 103 and dividends. Balance
Sept, ,15 (letter of notification) 20,000 shares ($1 par)
will be added to working capital. Business—Processing,
common on behalf of Western Gold Mines,
Inc., Carson
packing and sale of food products.
City, Nev. Offering price, : $2 a share. Proceeds—To the
Holt (Henry) & Co., Inc., New York
selling stockholder.

...

—

shares

100,000

amendment.

tion

amendment.

V Grand Canyon-Boulder Dam Tours, Inc., Boulder
,\\ City, Nev*
?
-'€t>
Sept. 3 filed 636,500 shares ($5 par) capital stock. Underwriting—There will be no underwriting but Everett N.
Crosby, President and James Manoil, Treasurer, will act
a'$ selling agents. Offering—Of the total 500,000 shares

Calif.

Corp., Clearwater,

filed

25

bank loans. Business

Sept.. 18 filed 100,000 shares ($100 par) cumulative, pre¬
ferred and 200,000 shares ($25 par) common. Under¬
writers—Morgan Stanley & Co., New York. Price—By

share. Price

Macco

By

shares

Co., Pittsburgh

stock. City Bank Farmers Trust Co.,
will act as agent and depositary.

Underwriter

,

(H. J.)

-

Sept.

nesses:

<

receive

common

New York,

Hayes Manufacturing Corp., Gr. Rapids, Mich.

amendment.

will

who

Longines-Wittnauer Watch Co., Inc., New York

•

Proceeds—
Company is selling 60,000 shares and stockholders are
selling 40,000 shares.
The company will use its proceeds
to pay the costs of opening additional stores and to ex¬
pand merchandise in its existing stores.

Aug. 28 filed 355,000 shares ($1 par) common, of which
55,000 shares are reserved for issuance upon the exer¬
cise of stock purchase warrants.
Underwriter — Van

company, /

Sept. 23 filed voting trust certificates for 500,000 shares

•

par).
Stock
acquired by selling stockholders in exchange for 432,000
shares of common stock (par $3) of American Engineer¬
ing Co. Underwriter—By amendment. Offering—Price by

of

y.;

proceeds.

To be offered to the public at $8 a share.

^

President

Bloomberg,

a

Feb. 27 filed 185,000 shares of common stock ($2
Shares are* being sold by certain'stockholders.

a

—

Manufacturing Co., Stockton, Calif.

filed

L

Limoges China Corporation, New York

Sept. 25 filed 75,000 shares ($1 par) common. Under¬
writer
Riter & Co., New York. Price — By amend¬
ment. Proceeds — Shares are
being sold by Harry

($1 par) common stock.
Underwriters—Van Alstyne, Noel & Co., New York, and
Johnston, Lemon & Co., Washington, D. C,
Offering—

To selling stockholders.

1949, common stock of the company at $11
by amendment.
v

Co., Chicago

(letter of notification)

Hartfield Stores,

-

July 31 filed 50,000 shares of $1.25 cumulative converti¬
ble preferred stock series A ($20 par) and 150,000 shares
(10c par) common, all issued and outstanding and being
sold by eight selling stockholders.
Underwriters—Van
AJstyne Noel & Co. Price by amendment. Proceeds—

ar-

Instrument

maximum of 150,000
shares ($2 par) class B stock. Offering, for subscription
to present class B stockholders at $2 a share. No under-,
writing. For additional working capital.

June

r

t,

porarily postponed.

the underwriting firm.

8 filed 80,000

-Sept..20

July 26 filed 115,000 shares of cumulative convertible
preferred stock ($25 par). Underwriters—W. C. Langley
& Co. and Aronson, Hall & Co.
Price by amendment.
Proceeds—To pay cost of acquisition, construction and
equipment of new plant, and for working capital.
In¬
definitely postponed. »:
>
'

phia, and Gearhart & Co., Inc., New York, Price—$5.50
a share. Proceeds—Working capital,
etc. Offering tem¬

"

capital.'

Montgomery

Inc.,

Co.,

filed 225,000 shares (10 cent par) common
Underwriters—Newburger and Hano, Philadel¬

stock.

shares ($1 par) common.
Under¬
writer: Paul H. Davies & Co., Chicago.
Price by amend¬
ment.
Proceeds—Net proceeds will be used to redeem
its outstanding 6%
cumulative preferred stock at an
estimated cost of $213,258, exclusive of accrued divi¬
dends.
It also will use approximately $402,000 toward
the purchase of a manufacturing plant in Chicago; bal¬
ance
for working capital. Offering temporarily post¬
poned.

Dry Foods, Inc., Columbia, S. C.

Cola

Lime

June 28, 1946

•

«

Underwriter—Keane &

uct, an automatic dishwashing machine in commercial
quantities.

Hamilton Pipeline Co., Thermopolis, Wyo.

ceeds will go to

writer—Newkirk

—For

Offering—Stock is being of¬

Sept. 19 (letter of notification) $300,000 of first mort¬
gage bonds. Offering price, $1,000 a unit. Underwriter—
Peters, Writer & Christensen, Inc., Denver, Colo. Pro¬

;

for benefit of issuerr

Co., Detroit.
Offering—Price $2.50 a share. Proceeds
for working capital to enable issuer to produce its prod¬

their preemptive rights.

Inc., N. Y.

Aug, 6 filed 100,000 shares ($1 par) capital stock. Underwriter—Van Alstyne, Noel & Co., New York.
Price
by amendment. Proceeds—The shares are issued and
outstanding and are being sold by Ivens Sherr, President
and A. I. Sherr, Executive Vice-President, who will re¬

100,000 shares ($1 par)

common

fered to present shareholders at $3 per share.
Holders
of approximately 200,000 shares have agreed to waive

•

>

(letter of notification)

Aug. 27

,

4,

Products, Inc., Jackson, Mich.

*

Proceeds—Approximately
$1 ,060,950 for redemption of class A preferred; balance
for expansion, working capital, etc. Dividend rate and
price by amendment. Offering temporarily postponed.

Co.

for

share

Gubby Mines, Ltd., Montreal, Canada
17, filed 280,000 shares ($1 par) common stock. Underwriters—Peltason, Tenenbaum Co.) St. Louis. Of*
May 31 filed 500,000 shares of common stock (par $1).
fering-^-Shares will be offered publicly at $11.25 a share.
Underwriters—Sabiston-Hughes, Ltd., Toronto.
Offer¬
Proceeds—Net proceeds go to the selling stockholders,•:,> ing—Shares will be offered to public at 75 cents a share.
Proceeds—Net proceeds, estimated at $300,000, will be
Foster & Kleiser Co., San Francisco
used for mining operations.
July 29 filed 100,000 shares of $1.25 cumulative con¬
vertible preferred stock (par $25). Underwriter—Blyth
Gulf Atlantic Transports Co., Jacksonville, Fla.
& Co., Inc. Offering—Underwriters are making exchange
Jan. 17 filed 270,000 shares of common stock (par $1).
basis plus a cash adjustment.

Parchment

scription

June

offer to holders of Class A preferred on share for share

Vegetable

3 filed 100,000 shares ($10 par) common stock.
Underwriting — No underwriting.
Offering —For sub¬
Sept.

.

competitive bidding.
Inc.; Kidder, Peabody & Co.; The First Boston Corp,; Harris, Hall & Co.
(Inc.); Merrill Lynch, Pierce, Fenner & Beane, and Ira
Haupt & Co.
Offering—New preferred will be offered
on a share for share exchange basis to holders of its
outstanding 7% prior lien, $6 no-par Pjior lien»
preferred and $6 (no par) preferred. Of the common

derwriters—To

be

determined by

Probable bidders include Blyth & Co.,

stock being

registered, company is selling
(Continued on page 1576)

40,000 shares,
i

1576

Int., New York, is selling 22,774 shares. Proceeds
^Michigan will use net proceeds from bonds to redeem
$3,500,000 3 3/4% series A first mortgage bonds, due 1972,
at 106.75 and interest.
Net proceeds from sale of com*
mon and from shares of new preferred not issued in ex¬
change will be used to redeem $375,000 Vh% Serial de¬
bentures, due 1951, at 101.2 and interest. It also will:
redeem at

105 and accrued dividends

:f.

.

Michigan Steel Casting Co., Detroit

June

27

New England Gas and

'

>

filed

100,000 shares ($1 par) common stock.
Underwriters—Cray, McFawn & Co., Detroit. Offering—
To be offered publicly at $8.25 a share. Proceeds—Pur¬
chase additional facilities, expansion, etc. Offering in¬
definitely postponed.

Mississippi Fire, Casualty & Surety Corp.

Morrison-Knudsen Co., Inc., Boise, Idaho

,,

;

retire its certificates
ferred stock and

of

;

indebtedness, outstanding pre- ;

portion of its bank loans. It also will
use the funds for investment in preferred stocks of sub¬
sidiaries. Price—Preferred, $50 per share; common, $16
per share. Offering temporarily postponed. :
r:>
#,

a

Northwest

Northwestern

Pal

con¬

Brewing

Co.,

Kansas

City, Mo.
Sept. 25 filed 41,327 shares ($25 par) 5% cumul. Par¬
ticipating preferred and 40,000 shares ($1 par) common,
Underwriters — Headed by Stern Brothers & Co., Kan¬
sas
City. Offering — Preferred and 20,000 shares of

Palmetto

used

to

pay,

bank

operating capital.

>

—

Public Service

f

Co., Huron, S. D.

derwriting.
•

Nugent's National Stores, Inc., New York
June

21

(par $1),

"v..,

;

Dehydrating & Milling Co.,

Lamar, Colo.
June 28 filed 28,960 shares of 4^% cumulative
preferred
stock ($100 par), 250,000 shares of
comrpon stock ($1
;bar) and warrants for 28,960 common shares (attached
to

.

■

preferred

stock). Underwriters—Stone & Webster
Securities Corp., and Bosworth,
Chanute, Loughridge &'
Co. Price by amendment. Proceeds—Shares are out¬
standing and are being sold by stockholders. Tempora¬
rily postponed.
.'/■■■;■
; >

price,

Clement A. Evans

&

$35

a

Co., Inc.

Aug. 5
common

•

issued

and

and




Plantation Foods,

Inc., Burton, S. C.

New York (10/21-25) j

par)

shares of common (par 50c). Underwriter—
Herrick, Waddell & Co., Inc.
Offering—Company is
offering the preferred stock to the public, while the
common is being sold by certain stockholders.
PricesPreferred,[ $10 a share; common, $4 a share. ProceedsProceeds from sale of preferred will be used to purchase
equipment, pay bank loans, and other corporate purposes,
Portland

(Ore.)

Transit Co.

convertible debentures due
200,000 shares of common stock (pat

June 14 filed $1,250,000 4%

June 1, 1966, and

$1); also an additional 128,750 common shares for con¬
version of debentures. Underwriters—First California Co.;

.

Scherck, Richter & Co.; Weeden & Co.; Allen & Co., and

Rauscher, Pierce & Co. Proceeds—To complete payment
of purchase price for the capital stock of Portland Trac¬
tion Co. and the properties of the Interurban Railway
Division of Portland Electric Power Co., working capital,
etc. Offering price oi debentures $105; price of common
to public, $8.25 per share. ' •

selling stockholder.

shares

19

are

—The First Boston

-

■

,

Brooklyn

140,900 shares ($5 par) common. The
being sold by three stockholders. Underwriter

filed

ment,

and k Samuel

Corp., Ltd., Montreal, Canada

.

Sept.

,

outstanding

*;

;;

and 75,000

Denver, Colo.

Old Town Ribbon & Carbon Co. Inc.,

UnderwritersProceeds—For redemp¬

are
being, sold by
Friedman,; .President
and Secretary-Treasurer, respectively, each
selling 13,000

Cohen

,

Laundry Services, Ltd., Los Angeles

Plastic Molded Arts, Inc.,

Offering—Price at market.
Underwriting—Inter-Mountain Shares, Inc.
Proceeds-

share.

preferred (par $10), and 30,000 common shares ($1
par).
Underwriters—Names by amendment. Offering—Shares
are

Peerless

Aug. 27 filed 60,000 shares of preferred stock ($10

(letter of notification) 571,000 shares (5c par)
on behalf of Frank C. Myers, President and

Go to the

Newburgh Steel Co., Inc., Detroit />..*
Aug. 2 filed 30,000 shares of 6 % cumulative convertible

Maurice

For organization of airport business. 1

(letter of notification) 500 shares ($100 par)
common.
Offering price, $100 a share. No underwriting.
To cover increased cost of equipment and materials
and to allow for an operating surplus.

Treasurer of the company.

tion of outstanding $2.50 class A
non-cumulative stock.

Postponed indefinitely.

^

Sept. 19

:

Oklahoma Oil Co.,

National Manufacture and Stores
Corp., Atlanta
(letter of notification) 8,500 shares of common

Offering

;

writer—Sabistopf.. Hughes, Ltd., Toronto, Canada. Price—
60 cents a shaye. Proceeds-r-Net proceeds will be iised to
purchase drilling machinery . and other equipment,

June 12
stock;

■

Sept. 3 filed 600,000 shares of common (par $1). Under¬

Paine, Webber, Jackson &•.
Curtis and Stone & Webster Securities, both of. New
York. Offering—Of the preferred being registered, 21,000 are being sold by the company and the remaining
14,000 are being sold by General Telephone Corp. Price
—By amendment. Proceeds—Net proceeds to the com¬
pany will be use to redeem its $1,770,000 of 3^% first
mortgage bonds, due 1970, at 107%%;Mo repay $1,450,000 in bank loans; to pay General Telephone Corp.
$937,518 in retirement of its 6% cumulative preferred
owned by General arid to reimburse its treasury for
funds previously expended.
w" ' \v \
V
i'' '
v'

Underwriter—Smith, Barney & Co.
Price -by amend¬
Proceeds—Redemption of outstanding 4%% pre¬
ferred stock at $109 a share plus dividends.
Indefinitely
National Alfalfa

,

Airpark Corp., Malvern, Pa.

Peninsular Oil

filed

preferred. Underwriters

Co., McKeesport, Pa.

ment.

r*;"

-

Sept. 13 (letter of notification) 100,000 shares of $1 par
Class A common. Offering—Price $3 a share.
No un¬

.

June 13 filed 250,000 shares of common stock

.

Paoli-Malvern

Opera¬

.

postponed.

Corp., Washington, D. C, V'..

Fibre

for purchase of

85,000 shares ($1 par) common stock. •
common; will
be offered publicly. Remaining 20,000
Underwriters—Newburger & Hano, and Kobbe, Gearhart
shares common will be offered to officers and key em¬
& Co., Inc.
Price, $6.75 a share, proceeds—Net pro¬
ployees at $4.75 each. Price — To the public preferred 1 ceeds to the company, from 62,000, shares, estimated atI
$25 per share and common $5.75 per share. Proceeds —
$350,200, will be applied as follows: About $111,300 for
Of shares being offered to the public."
34,827 shares of f retirement of outstanding preferred stock; $41,649 to
preferred are being sold by 34 stockholders and 6,500 | purchase 100% of the stock of two affiliates, and bal- •
shares of preferred and 20,000 shares of common are ■; ance $197,000 for other corporate purposes.
The pro¬
ceeds from the other 3,000 shares will go to selling
being sold by the company. Proceeds — Proceeds to the
company, together with other funds, will be used to : stockholders. Offering temporarily postponed.
pay off $181,909 balance of, note held by Schroder Trust
Ohio Associated Telephone Co. (10/1-2)
Co., New York; to finance a proposed expansion pro¬
gram and to increase working capital. Business — BrewSept. 11 filed $3,250,000 Of first mortgage bonds, 2%%
■ing Pilsener beer.
V--;.;..
series, due 1976; and 35,000 shares (no par) $2 cumulative

Murphy (G. C.)

New York

par) capital stock.
Inc.
Offering *225,000 shares are outstanding and are being sold by 10
stockholders, and 2,500 shares are being sold by A* L.
Marlman to all salaried employees. Indefinitely post-

,

Sept. 15 (letter of notification) 98,485 shares ($1 par)
prior preferred and 8,625 shares of $1 par common. Of¬
bidders include Halsey, Stuart & Co. Inc. (bonds); Har¬
fering price, $1 a unit. No. underwriting. Company said
riman Ripley & Co., Inc.; Lee Higginson Corp.; A. G. V
that offers made on Aug. 1, and Aug. 12, 1946, were
Becker & Co., Inc., Salomon Brothers .& Hutzler, Dick
without registration with the SEC and that, therefore,
Merle-Smith, Drexel & Co., Harris Hall & Co. (Inc.)
the previous offers were withdrawn. The company will
and Stroud & Co., (jointly); Offering—Securities will be '
use
the proceeds from the present sale as working
sold at competitive bidding. Proceeds—Refunding.
capital.
'

sale has been temporarily postponed.

■

Blade Co., Inc.,

June 28,1946 filed 227,500 shares ($1
Underwriters — F. Eberstadt & Co.,

26,000 shares ($100 par) cumulative preferred stock,
and 110,000 shares of $3 par common.
Underwriters—
To be determined by competitive bidding.
Probable

56.39% of the company's outstanding common.
Sale Postponed—Standard Gas & Electric Co. asked for
bids for the purchase of the stock on Sept. 4, but the

(George)

San

June 28 filed $5,275,000 first mortgage bonds, due 1976;

Offering—Shares,

stitute

Muehlebach

Telephone and Telegraph Co.,

Francisco

,

Probable bidders include Blyth & Co., Inc.; Kuhn, Loeb
and Smith Barney & Co. (jointly); Harriman,

& Electric Co. and

Proceeds will be used

additional equipment and facilities. Business
tion of airline system.

'

■«Co.

Gas

—

the remainder will be

loans and

States Power Co.

by Standard

Pacific

—

June 6 filed 140,614 shares of common stock (no par).
Underwriters—To be determined by competitive bidding.

owned

ing price—To be supplied by amendment. / ;

Airlines, Inc., St. Paul, Minn.

ment. Proceeds

are

share,_with cash adjustments, for the new pre¬
surviving corporation, Offer*

ferred stock of Pacific, the

"

improvements.

Ripley & Co.; The First Boston Corp.

share for

Sept. 19 filed 271,935 shares ($10 par) common. Under- 7 August 16 filed 4,000,000 shares (100 par) preference
stock. Underwriting—Tellier & Co.r New York. Price
writer
Auchincloss, Parker & Redpath, Washington,
50 cents a share. Proceeds—The company will use esti*
D. C.; The First Boston Corp., and Hornblower & Weeks,
New York. Offering—Shares initially will, be offered for r mated net proceeds of $1,473,000 for purchase of a new
factory near Punta Gorda, Florida, at a cost of .about
subscription to common stockholders in ratio of one ad¬
$951,928. It will set aside $150,000 for research and de¬
ditional share for each two shares held. Unsubscribed
velopment. purposes and the balance will be used as
shares will be sold to underwriters. Price—By amend¬

Mosher Steel Co., Dallas, Tex.

Mountain

^

(

•

Sept. 23 (letter of notification) 4,000 shares of common.
Offering price, at market. Underwriters — Rauscher,
Pierce & Co., Dallas; Mooney, Beissner & Co., Houston.
Addition to fund for paying cost of plant additional;
-

.

Aug. 28 filed maximum of 384,016 shares of common
stock. Underwriters by amendment as shares will be.
offered under competitive bidding. Probable bidders inelude Blyth & Co., Inc.; The First Boston Corp.; Stone
& Webster Securities Corp., and Harriman Ripley &
Co., Inc. (jointly). Of the shares registered, 182,667 are
being sold by Midland Realization Co.; 54,426 by Mid¬
land Utilities Co., and 146,923 by Middle West Corp.

&

Daly, Inc.
Proceeds—Selling stockholders are of¬
fering 149,550 shares of the common and will receive
proceeds from these shares.
The company's; proceeds,
together with funds to be provided from tlie sale of
$2,000,000 of 3%% debentures, due 1961, will be used to

<

Pacific Power & Light Co., Portland, Ore.
■
July 10 filed 100,000 shares ($100 par) preferred stock*
Underwriters—By amendment. Probable bidders include
Blyth & Co., Inez,-'White, Weld & Co. and. Smith, Barney &
Co. (jointly); The First Boston Corp., W. C. Langley & Co.;
Harriman Ripley & Co. Offering—Company proposes to
issiie the 100,000 shares of new preferred for the pur¬
pose of refinancing at a lower dividend rate the 67,009
outstanding preferred shares of Pacific and the 47,806
preferred shares of Northern Electric Co., in connection
with the proposed merger of Northwestern into Pacific.
In connection with the merger, the outstanding preferred
stocks of Pacific and Northwestern will be exchanged

Sept. 6 filed $75,000,000 of 40-year debentures, due 1986.
Underwriters—By competitive bidding; Probable bidders
include Morgan, Stanley & Co., Blyth & Co., Inc., Halsey
Stuart & Co., inc. Proceeds—Net proceeds will be used
Northern Engraving & Mfg. Co., La Crosse, Wis. :
to reimburse its treasury for previous expenditures for
Aug. 29 filed 70,000 shares ($2 par) common stock.
extensions and improvements to its plant and plants of
Underwriter—Cruttenden & Co.
Offering—All shares / subsidiaries. Remaining proceeds will he used to repay
are issued and outstanding and being sold for the account
outstanding advances from American Telephone & Teleof present holders.
Price-^-$16 a share.
Proceeds—To
graph Co., parent, which are expected to nearly equal the
selling stockholders. Indefinitely postponed."
-V amount, of the proceeds from the sale of the debentures,
the registration stated.
^/Vkx^
;
Northern Indiana Public Service Co.

/

August 19 (letter of notification), 14,000 shares ($10 par)
common stock, offering price $20 a share. Underwriter—
CJany M. Seay, Jackson, Miss, will undertake to' obtain
signatures authorizing subscriptions tor the stock to
create capital and surplus for operation of business.
Company is to be organized in Mississippi.
■
;

July 22 filed 249,550 shares ($10 par) common and 70,000
shares of ($50 par) 4Vt% cumulative convertible pre¬
ferred. Underwriter—Blyth & Co., Inc., and Wegener

Electric Association

Thursday, September 26, 1946

|

_

July 11 filed $22,500,000 20-year collateral trust sinking
fund Series A bonds, and a maximum of 1,568,980 com¬
mon
shares ($5 par).
Underwriters—By amendment.
Bidders may include Halsey, Stuart & Co. Inc. (bonds
only), Bear, Stearns & Co. (stock only), First Boston
Corp., White, Weld & Co.-Kidder, Peabody & Co. (jointly).
Offering—Bonds and common stock are being offered ha
connection with a
compromise recapitalization plan
approved by the SEC, on June 24, 1946, which among
other things provides for the elimination of all out¬
standing debentures and preferred and common stocks, and for the issuance of $22,500,000 of bonds and 2,300,000
of new common shares. Price by amendement. Proceeds
—To retire outstanding securities, aggregating $34,998,500. Bids for the purchase of the bonds and the common
stock which were to be received by the company Aug. 13
were withdrawn Aug. 12.
Sale postponed indefinitely.

all unexchanged

preferred stocks.

■

•

shares, of preferred and 15,000 shares of common., Price
—$10 a' share for the preferred and $6> a share for the
common. Expected late October or early November.

and Halsey, Stuart

&Co.

shares of prior lien and

'

'

(Continued from page 1575)
West is selling 57,226 shares

aiaaie

,

& FINANCIAL CHRONICLE

THE COMMERCIAL
„

Precision

1

Orange-Crush do Cuba, S. A., Havana, Cuba
July 22 filed 75,000 shares of $1.50 par common. Under¬
writer—Elder, Wheeler & Co.
Offering—Pride $8. a
share.
Proceeds—^Of the total company is "selling 2&.000 '
shares and stockholders are selling 50,000 shares
The;
company? willuse its; proceeds; for equipment;- Offering

-

date indefinite.

Parts

-

Co, of Ann Arbor,

Mich.

'

shares 5% cumulative convertible
preferred stock ($10 par). Underwriter—Van Alstyne,
Noel & Co. and associates.
Price by amendment. Pro¬
ceeds—Of the net proceeds, $250,000 will be used to pay
3% notes held by National Bank of Detroit, $75,000 to
reimburse treasury for sums, spent in acquisition^ of the
electrical division plant of the company, $30,000 for construction of space for executive offices in ..the economy
baler plant, and the balance will be deposited with gen-*
July 5 filed 75,000

Corp., New York. Price—By amend¬

era! funds.

\

-u'

f

,r.>«"irjriijrt v>P. ,-•»*rhwr^'l

*,

Vi V> t

r

/ i 11

*

/\

•

j

»/t

A i*

51HT

;
i^*irr*r»v»nn»i"i' *- *

'-v..

f

THE COMMERCIAL & FINANCIAL CHRONICLE

164 " Number" 4528

Volume

-

:M V Red Rock Bottling Co. of Ypungstown,
y «
Warren, 0.
.v-v ;•>
>_v 7 \v

*

share

;

cent

warrant.,

a

capital.-

f

.

tion of

6

added

general corporate funds.

to

are not

also

and

to

not

be

underwritten.

'

-

*

.

•

--

V:

,

,

>

>,

,

$5).

Co. *'Offering—Eight
disposing of 62,000 shares, an&

are

Proceeds—Net proceeds from the sale of the company's
will be added to its "building construction and
improvement fund.'-' Offering date indefinite.

'

i

1

Street & Smith

Public

—

offering

price

of

Sun Electric

;

filed

for

$20,000,000

1st

mortgage

bonds,

officers to
ceeds—For

'

equipment.
©

•

Sunset

-

'

•

: i

Laboratories,

Inc.,

common

■).

Glendale, Calif.

Edwin,%

69 shares to

J.

com¬

Shaut

and

Mary L. Shaut

motional services. The

series

stock

as

consideration for pror

classification

was

not

disr

closed.

Offering price of public shares, $100 each. No
underwriting. Purchase lot, building, equipment and. to
provide capital.
',
—
....
*
■

lc)

.

' J

Shaut and Mary L. Shaut for business and
assets, 2,000
shares to the general public, and 2,069 shares to Edwiji

.

(par

-

employees and business acquaintances. Pro¬
working capital, purchase of machinery arid

Sept./15 (letter of notification)

1976;h:^.oh^l\

Soya Corp. of America
Aug. 28 filed 375,000 shares

Corp. of Chicago

Aug. 28 filed 7,000 shares (par $100) 6% preferred stock.
Underwriter, none." Stock will be" sold by * company's

unsubscribed

-

Publications, Inc.

July 17 filed 197,500 shares of common stock.
Under^
writers—Glore, Forgan & Co.
Offering—The offering
represents a part of the holdings of the present stock¬
holders. Indefinitely postponed.

Manufacturing Co., Detroit, Mich.

: >

stock."

;

,4J

,

<

Swern & Co., Trenton, N. J.

'

■

^

Underwriter

Manufacturing Co.
($1 par) common stock.
Underwriters—Blyth & Co., Inc.
Offering—Company
will sell 130,000 shares to the public through the under¬
writers and 70,000 shares to Bethlehem Steel Co. Price.

(par

by amendment.
Proceeds—To repay RFC
Aug. 28 filed 195,000 shares common/stock (par $1?.
loan, to buy Canton Mills, Inc. and for working capital. / Underwriter—C. K. Pistell & Co., Inc. Offering—Com¬
'
pany is selling - 45,000 shares, and eight selling stock¬
holders are disposing of the remaining 150,000 shares.
Standard Brands, Inc., New York
: Price—$10.50 a share.T Proceeds—From'45,000 shares
Sept. 6 filed 220,000 shares (no par) cumulative -pre¬
sold by company will be applied to working capital
ferred stock.
Underwriters-—Dillon, Read & Co. Inc.
initially.

Rheem

.

Ma

stock

Price by amendment.

June 26,1946 filed 200,000 shares

rily postponed.

common

shares

Southwestern Public Service Co., Dallas, Texas
Sept. 20 by amendment filed $1,500,000 2%% of first
mortgage bonds, series due 1971. Underwriters—To be
supplied by amendment. Probable bidders include Dil¬
lon, Read & Co., Inc.; Halsey, Stuart & Co., Inc., and

due

shares,

Underwriter—Goldman, Sachs &

i •

pany

102,759

the company will offer 40,759 shares
initially to its prd4
ferred and common stockholders.
Price by amendment'

Such pro¬

/

-

filed

selling stockholders

shares by amendment. Proceeds—For expansion of
plant
facilities and for additional working capital.

,

Proceeds—Working capital.

stock.

28

-

/price. Price

Reynolds Pen Co., Chicago
May 4 filed 400,000 shares of common stock (no par),
of which 100,000 shares are being sold by company and
300,000
by
stockholders.
Underwriters—Names
by
amendment. Offering—Terms by amendment. Proceeds
—Net proceeds to the company will be added to working
capital.
i

By amendment.

Aug.

for

| r Blyth & Co,, Inc. Price by amendment. Originally

1;':/•

>*'■

common

Stix, Baer & Fuller Co., St. Louis

/

preferred share for each five shares of common
he)d
unsubscribed shares willbe sold .to underwriters'at same

offered for

3

used

•*.

.

one

277,231 shares (50c par) common stock, with Sterling,
Co. as underwriters.
Company has decided to

stock only, which will be
subscription to stockholders of record Sept.
the extent of one share for each five held. Issue will

'

Sept 3 filed 40,000 shares ($25 par) 5% cumulative con¬
vertible preferred. Underwriter—Ames, Emerich &
Co.,
Inc., Chicago. Offering—To be offered to common stock¬
holders for subscription at $25 a share in the ratio of

Grace &

issue 454,465 shares Of common

be

-

r

.

converted into

will

•'

Soss

Republic Pictures Corp., New York
Kegistration originally filed July 31 covered 184,821
shares of $1 cumulative convertible preferred ($10 par)
"

(letter of notification) $200,000 6% debenture
Offering price, $1,000 a unit. No underwriting
general corporate purposes and to increase working
capital.
• ;,V ^ • l.
:
«
•
; ■"< ;

outstanding series A convertible preferred stock

capital.

of the recission offer is because the earlier secur¬
not registered with the SEC. Price—The notes
will be sold at 100, the preferred at $100 a share, and
the common at 10 cents a share. - Proceeds — Proceeds

17

notes.

For

additional \ manufacturing
facilities in the amount of $600,000; for additional inven¬
tory amounting to $400,000, and for additional working

were

be

Sept.

-

80,000 shares of $1.12^ cumulative con¬
preferred stock, series A (par $20).
Under¬

ceeds

private subscribers for an aggregate price of $464,384.
company is offering to repurchase these securities
with interest and reoffer them to- the public.
The pur¬

will

v

..

Manufacturing Corp. /

which

of

Stickley Bros. Corp. Division Institutional Fur¬
niture Co., Grand Rapids, Mich.
^ •
<p%--

-

but

writers—Van Alstyne, Noel & Co.
Price by amendment.
Proceeds—Net proceeds will be applied for the redemp¬

The

pose
ities

•

qne

filed

14

vertible

filed $500,000 of. 3%% notes, due 1966; 2,500
3Vz% preferred stock (par $100) <and 15,000
shares of common stock (no par).
Underwriting — No
underwriting.
Offering—The securities being registered
include notes, preferred and common previously sold to
.

to be offered in- units of
unit. Not underwritten,

per

•

Solar

June

Conn.

shares

$11

Underwriters—Frank C. Moore &

Republic Foil & Metal Mills, Inc., Danbury,

Sept.

at

.

Co., New York; and H^ll, Tattersall & Co., Philadelphia.
For payment of plant mortgage, purchase of additional
equipment and for working capital. \
.

.

(par $1)

of \ each

will be sold by officers and directors. Proceeds for addi¬
tional equipment, woolen and cotton yarns and working

Aug. 16 (letter of notification) 199,000 shares (50c par)
common and warrants for purchase of 125,000 additional
common.
Offering—Price $1.50 a common share and
one

stock

common

"'

;

157J

and

Blyth & Co.

Offering — Offering is subject to an
exchange to holders of company's 200,000 out¬
standing shares of $4.50 cumulative preferred.
In the
event the public offering price of the new preferred is
$100 a share, holders of the old preferred will be grant¬
ed the opportunity to exchange their stock for new
pre¬

/

Taylor-Graves, Inc., Saybrook, Conn.
r
July 12 (letter of notification) 44,300 shares of ($5 paif)
cumulative convertible preferred stock and 44,300 shares

offer of

Tempora¬

C,

'/yQ

Rowe Corp., New York
"•
;J
July 29 filed 100,000 shares common stock. Underwriters
—Hayden, Stone & Co. Offering—The selling stockhold¬

stock (par 50c).
Offering—Price $6 a share foir
preferred and 75 cents a share for common. Underwriter

common

—Amos Treat &

Proceeds—For payment of notes

Co.

ferred at the rate of 11/lOth shares of new preferred for
each share of old preferred.
Price — By amendment.

mortgages and for general corporate

Proceeds

who include Robert Z. Greene, President, are offer-,,
ing the shares to the public through the underwriters,
for their own account.
Price, by amendment. • Offering
ers,

temporarily postponed.

Company will use net proceeds from any
shares sold to the public to redeem all unexchanged
shares of old preferred at $110 a share.
—

'

.

Offering

purposes.
,

V Tele-Tone Radio Corp.,

New York
)
m
filed 210,000 shares of common stock (par 50
•
Underwriters—Hirsch & Co.
Offering—Com¬
San-Nap-Pak Mfg. Co. Inc., New York
Starrett Corp., New York
pany is offering 75,000 of the shares registered.
Eleven
July 24 filed 80,000 shares ($1 par) common stock, i Un¬ s Sept. 20 filed receipts for deposit of $2,686,000 of 5%
stockholders are selling 135,000 issued and outstanding
derwriters—Dunne & Co., New York.
secured income bonds, due 1950, $2,686,000 of 4% col¬
Offering—Price
shares, for their own account.
Offering—Price $6.75 •
by amendment.
Proceeds—Nat E. Heit, President and
lateral trust bonds, due 1966, and 107,440 shares ($1 par)
Options—Selling stockholders are also selling to
director, and Harry Preston, board Chairman, Secretary ; common. Agent—Guaranty Trust Co. of New York will V share.
v
the underwriters at 7 cents per option warrant options-to
and Treasurer, will receive net proceeds as selling stock¬
act as agent to receive deposits of secured income bonds.
holders. Offering date indefinite. :
purchase 18,000 shares of the issued and outstanding
17;
Offering—The registration was filed in connection with
:
common owned by them. / They are- also selling to Hallthe company's April 1, 1946, voluntary plan of
exchange
of securities. The securities are offered in exchange for
;j^Sardik Food Products Corp.; New York r
gartep & Co., for $1^500, plus $360 as a contribution
fey 29 filed 175,000 shares ,of>rcapital stock (no par). 'S the comp&ny's 5% secured income bonds, due 1950, at
toward the expenses of issuance; options to purchase an
Underwriter—George F. Breen, New York. Offering—
additional 18,000 shares1 of the issued and • outstanding
the rate of $1,000 principal amount of receipts for de¬
Stock will be offered to public at $14 a share. Of the
common.
Proceeds—Net proceeds for the sale of com*posit for each $1,000 principal amount of secured intotal being offered company is selling 155,000 shares and
come bonds and, after the plan of exchange has been
/ pany's 75,000 shares will be used for increasing working
the remaining 20,000 shares are being sold by two stock¬
declared effective, of $1,000 principal amount of -4%
capital, with a view to entering the Frequency Modulaholders.
^Proceeds—Working capital, purchase equipcollateral trust bonds, due 1966, and 40 shares of $1 par : tion and Television fields at an advantageous time. Of¬
ment and plant, etc.
Temporarily postponed.
common for each
fering -date postponed.
$1,000 principal amount of secured indate indefinite

.«

.

.

f

,

.

.

„

,

Aug. 1
cents).

,

-

..

^

•

Scripto, Inc., Atlanta, Ga.
Aug. 7 filed 25,000 shares ($10 par) 5% cumul. converti¬
ble preferred stock and 244,000 shares ($1 par) common
atock. Underwriters—Clement A. Evans & Co., Inc., At¬
lanta.
Price of preferred $10.75 per share; price of com¬

fl

*

stockholders in the ratio of

3%

date indefinite.•

.

any extended date, the plan will be abandoned. Business
—The Company is solely a holding company owning all

State Street Exchange, Boston, Mass.,
July 1, 1946 filed $1,750,000 second mortgage 4% noncumulative income bonds,
due 1961.
Underwriters—
Roger W. Babson, Wellesley Hills, Mass., and Charles F.
Ayer.
Offering — Company will issue $750,000 of the
bonds to two banks which hold two first mortgages on
all of the company's real estate and the
remaining $1,000,000 of the bonds will be offered to the company's

a

the

stated that

sold

.

Offering—Certain stockholders

sell¬

are

ing 140,000 issued and outstanding shares.
Company is
offering 100,000 shares. Price by amendment. Proceeds
—From company's 100,000 shares proceeds will be used

-V.

1

/

Seaboard & Western Airlines Inc., Wilmington,
Del.
-./V':.,
"

,

Sept.116 (letter of notification) 100,000 shares ($1 par)
Offering price, $1 a share. No underwriting.
'For purchase of surplus aircraft from War Assets Ad¬
ministration by a group of present and prospective
'common.

veterans,to, equip
'

V"*' **

3 *

and

operate

***£ * ^

•

and

passenger

*y/k * 4^^

i.

5.'

•»

*>

i :

.

i.

i*

cargo
i

.

4™**' J •

Shaycraft, Inc., Newton Square, Pa. (10/1)
Sept. 23 (letter of notification) 6,000 shares of 6% cumu¬
lative preferred stock (par $10) and 6,000 shares voting




to

underwriters.

one

Price

to

shares will be

.

the sale of 51,000 shares by the company "vYill be used to.
reimburse treasury for funds spent on June 26 to retire

5,000 shares of preferred stock, $100
porarily postponed.

par.

Offering tem¬

/V-

'/y*

none.

For additional working capital.

Cincinnati, Ohio
*
Aug. 25 filed 24,000 shares ($4 par) common. Under¬
writer—Benj. D. Bartlett & Co., Cincinnati. OfferingsShares will be offered to the public by seven stock¬
holders, who will receive the entire net proceeds.
Price by amendment; Offering date indefinite.
;*f

-

Upper Michigan Power & Light Co., Escanaba,
■

'<■

•

Mich.

'■; ■;

July 18 (letter of notification) 5,500 shares of 414% first
preferred stock series B ($50 par). Offering price, $50
a share.
Underwriter—First of Michigan Corp., Detroit.
Proceeds—For enlargements and improvements

plant facilities.

stockholders

Stern & Stern Textiles, Inc., New York
Aug. 29 filed 191,000 shares of common stock ($1 par).
Underwriter—Carl M. Loeb, Rhoades & Co.
Offering—
Company is offering 51,000 shares and selling stockholders are disposing of 140,000 issued and outstanding
shares. • Price by amendment«> Proceeds—Proceeds ifrom

D. C.

United States Shoe Corp.,

bond for each unit of

Unsubscribed

Steep Rock Iron Mines Ltd., Ontario
March 27 filed 500,000 shares of capital stock (par $1),
Underwriters—Otis & Co.* Offering—Price to public by
amendment.
Proceeds—Net proceeds will be added to
the general funds and will be available for generalcorporate purposes. For details see issue of April 4. ;

to reduce outstanding bank loans and commercial paper

and for other corporate purposes.

Underwriting

$27.50 a
share and price to underwriters $26.50 a share. Proceeds
—Company will pay $225,000 to the two banks holding
its mortgages and the balance will be retained for neces¬
sary repairs to its real estate.
V"
• "-.''.r:,

Seaboard Finance Co., Washington, D. C.
Aug. 29 filed 240,000 shares of common stock (par $1).
Underwriters—Van Alstyne, Noel & Co., and Johnston,
Lemon & Co.

shares of stock held.

Today's Homes, Inc.; Washington,

Sept. 20 (letter of notification) 20,000 shares ($10 par)
'6% convertible preferred. Offering price, $10.50 a sharg.

Starrett Brothers and Eken, Inc. ,;
engaged exclusively in the construction of buildings.

share and stockholders are selling 244,000 shares
underwriters 'at $5 a share.
The registration
24,000 of the 244,000 shares of common are
being reserved for a period of four days following the
effective date of the registration for sale to employees,
officers and directors at $5 a share.
The company also
is selling 200,000 stock purchase warrants to executives
of the company at 50 cents a warrant.
Company will
use its proceeds for general corporate purposes.
Offering
$10

•

,

of the capital stock of

mon, $5,625 per share.
Proceeds—Company is selling
the 25,000 shares of preferred to the underwriters at
to

come bonds.
•
...
' If in the judgment of the company's directors, suffi¬
cient acceptances are not received by Dec. 31, 1946, or

^

of power

f-

v

Upson Co., Lockport, N. Y. (9/27)
Sept. 20 (letter of notification) 150 shares of common
•

'

stock (par
To

be

$10). Underwriter

offered

at

market

—

Hamlin & Lunt, Buffalo.

(approximately)

share. Proceeds to W. Edward Upson.
;

i

$14.50

per

S[ '

''/
July 24 filed 203,500 shares of stock which are to be sold
for the account of certain stockholders.
Underwriters—
Sherck, Richter & Co., and Straus & Blosser. Offering—
Of the total, 200,000 shares will be sold through the
underwriting group at $8.50 a share, and 3,500 shares
will be offered to certain employees at $7.50 a share.
Offering postponed indefinitely.
,

Velvet

Freeze,

Inc.

Virginia Dare Stores Corp., N. Y.
July 3 filed 90,000 shares of 5% cumulative convertible
preferred stock, X$10 par). -' - Underwriters—Newburger
& Hano; Kobbe, Gearhart & Co., Inc., and D. Gleich Co
Offering—Underwriters propose to offer the shares in
_

.

part to the public and

the balance to certain dealers,

(Continued on page 1578)

<•

.'■'V

X§,

Thursday, September

1578

Winters

organization expenses, and about $1,100,000 for working

(Continued from page 1577)

capital. Offering temporarily postponed.

whom any underwriter may be included, at the
public offering price, less certain concessions. Price $10
per share. Proceeds—It
is presently anticipated that
$437,500 will be used to acquire the capital stock of Wil¬
liams Stores, Inc., and Levitt Millinery Co.
The bal¬
ance
will
be applied to general corporate purposes.

;,:

postponed.

Issue temporarily

Underwriter—E.

Crude Oil

Co., Venice, Calif.
Sept. 4 (letter of notification) 250,000 shares of common
on behalf of the company and
100,000 shares on behalf
of Henry L. Rath, President. Offering price, 10 cents a
share.
Underwriting, the company and officers. For
further drilling operations to develop petroleum gas.

H.

Rollins

holders at the rate of

one

Price by amendment.
sales

common

&

share for each two shares held.

Proceeds—To retire

conditional

a

contract

obligation held by the Reconstruction
Corp., pay off bank l#ans of $600,000, arid for
working capital. yYv'iY?''

.

<///'-/'■:■-''///V

Crampton Corp., Grandville, Mich.

stock (par $1).
Sons, Inc.
Offering—
Company is initially offering the stock to its eomrrion

among

Western

&

Aug. 28 filed 119,337 shares of

f

1946

Finance

.

Westinghouse Electric Corp.
(.*j
Wisconsin Power & Light Co., Madison, VVis.
Aug. 14 filed 1,647,037 shares ($12.50 par) common.v
Sept. 3 filed an unspecified number of shares of comMay 21 filed 550,000 shares ($10 par) common stock to
.mon stock
(par $1)*
Underwriting—Loewi & Co., Mil¬ Underwriter-i-Kuhn, Loeb & Co. Offering—Stock will be
be
sold
at
competitive /bidding. - Underwriters—By
offered for subscription to holders of outstanding prewaukee.
Offering—The shares are being sold both by
amendment.
Probable bidders include Merrill Lynch,
ferred stock and common stock in ratio of Vs share for
the
company
and by shareholders.
The respective
Pierce, Fenner & Beane; White, Weld & Co.; Glore,
each share of common or preferred held. Unsubscribed
amounts
will be supplied by amendment.
Price by
Forgan & Co., and Harriman Ripley & Co. (jointly);
shares will be sold to underwriters. Price—By amend¬
amendment.. Proceeds—Company will use about $210,The Wisconsin Co., and Dillon, Read & Co*
Proceed*—
000 of its net proceeds to redeem 645 shares of its prior m ment. Proceeds—To reduce bank loans. Offering tem*-v
Part of the shares are to be sold by Middle West
Corp.,
porarily postponed.
44^
■
preference stock at $110 a share and accrued dividends,
top holding company of the System, and part by pref¬
and 1,386 shares of second preference stock at $100 a
West Ohio Gas Co., Lima, Ohio
/v erence stockholders of North West Utilities Co.,
parent
share and accrued dividends.
The balance will be "
Sept. 10 (letter of notification) 48,000 shares ($4 par) ' of Wisconsin, who elect to sell such shares of Wisconsin
Webster Electric Co.,

Racine, Wis.

.

,

<

added

general corporate, funds.

to

common.

Offering, to

stockholders for subscript

common

tion at $4 a share in the ratio of

Nashua, N. H.

Weetamoe Corp.,

one

$1.20 cumulative .■ shares held. No underwriting. To be added to general
"pfd. stock, 100,000 shares Of ($1 par) convertible stock > funds.
and 650,000 shares ($1 par) common stock. Underwriters £
West Virginia Water Service Co.
^
—Blair & Co., Inc., Reynolds & Co., New York and Max- ,
Aug. 6 filed 46,400 shares (no par) common.
Underwell, Marshall & Co., Los Angeles.
Offering—The pre¬
writer—Shea
&
Co., Boston." Price, by amendment.
ferred and convertible stocks will be offered in units of
Proceeds—Shea & Co. is selling 26,400 shares for its own
one share of preferred and one-half share of convertible.
account and the remaining 20,000 shares are being sold
Price by amendment. Proceeds—Weetamoe Corp. (Name
by Allen & Co., New York, with Shea as underwriter.
to be changed to Nashua Manufacturing Co. prior to
White's Auto Stores, Inc., Wichita Palls, Texas
effective date of registration) was incorporated June 27,
Aug. 29 filed 75,000 shares $1 cumulative convertible
1946 to acquire the operating properties and certain
July 15 filed 200,000 shares ($25 par)

•

,

.

Nashua Manufacturing

of

assets

'

'
;

/

the

of

Net proceeds, together with $2,300,000

company.

new

representing the proceeds from the sale of 50,000 shares
of convertible stock to the underwriters and 525,000
shares of convertible stock to Textron, Inc., at $4 a share,
will be used as follows:
approximately $13,000,000 for

common

are

distributed

West

them

to

Utilities

the

upon

Co.

Corp., New York

50,000 shares - ($1 par)-common stock.
Underwriters—Headed by E. F. Gillespie & Co., ^nd in¬
cludes Childs, Jeffries & Thorndike, Inc., New rYork;
Courts & Co., Atlanta; Irving Rice & Co*., St.
Paul, and
Maxwell, Marshall & Co., Los Angeles and New York.

Price—$10
of

a

share.

Proceeds^—Estimated net proceeds

$400,000, together with $87,125 from the sale of 10,250

additional

";

President, at $8.50

($20 par) and 50,000 shares common
(par $1).
Underwriters—First Colony Corp. and
Childs, Jeffries & Thorndike, Inc.
Offering—Company
is offering 75,000 shares of preferred; the 50,000 shares

be

filed

17

-

shares to J.~ William Anchell, Viceshare, will be used partly for the

common

a

purchase of 10,995 shares of capital stock of Islahd
Needlework, Inc., of Puerto Rico, out of a total of 11,000
outstanding shares.
The shares will be purchased for a
total price of $220,522 from Mrs. Gertrude S. Korsh, sister
of Herbert
L.
Miskend, President and Treasurer 'of
Yolande Corp.
Of the remaining proceeds, $68,750, plus
dividends, will be used to redeem at $110 a share t)ie
company's 625 shares of $100 par 6% cumulative pre¬

stock

of

subsidiary, Textron Mills, Inc., which are promoters
;

;

Co. which was J, preferred stock

incorporated in 1823. The new company was organized'
at the instance of Textron, Inc., and is wholly-owned

Yolande

.

Sept.

will

North

of

„,

„

other

which

common

share for each five*-/ dissolution

outstanding and being sold by four in¬

dividuals for their

own account.
Price by amendment.
Proceeds—Proceeds from the sale of the preferred stock

will be used to provide funds for a

wholly-owned sub¬
sidiary, retire loans from banks and from White's Em¬
ferred stock.
The balance will be used to reimburse
ployees Profit Sharing Trust, and for additional working
the company's treasury for previous expenditure and for
capital. Offering date indefinite.
\i. additional working capital.
*

■

-

payment of a portion of the purchase price of the assets
to be acquired from the old company, about $100,000 for

'

itf/ ProspectiveiSecurity Off erings
'

^ J.'K
•"*•'u-o^fki-:/»'•
y,

'■//'./ //:/

T/

-■/«•/,.

:

/'•

-

■-

•

■

...

...

:

■

:'/
.

.

■

..

.

"

:

(NOT YET IN REGISTRATION)
•

INDICATES ADDITIONS SINCE PREVIOUS ISSUE

'-n/:

■■

.

.

•

[EDITOR'S .NOTE—The strike of truckmen in New York City,1
having cut off delivery of newsprint to us, we have been obliged to

»

■

effect certain economies in today's issue in order to

■m

stock

conserve

hand.

Accordingly, we are limiting our coverage of "prospective"
financing in this issue to only those undertakings which have come
to hand during the past week, thus omitting the items of this nature
on

which

were

reported in previous issues. We regret the necessity for
will resume the usual complete tabulation as early

this action and
as

•

Sept.

reported

18

equipment
able

trust

bidders

Salomon Bros.

circumstances permit.]

Ohio RR.

Baltimore &

•

plans

certificates

included

Halsey,

& Hutzler

phia banks.

'

to

issue

$7,500,000
about November 1. Prob¬

company

Stuart. &

and New York

Co.,

Inc.;

and Philadel¬

'

■

r

....

•
Carey (Philip)
Sept. 23, Robert S.

Manufacturing Co.
King, President, stated that it is
probable company in the near future will require some
financing to meet the cost of an expansion and improve¬
ment program.

'

; '

-

■

El Paso

Electric

Co.

Sept. 16 stockholders voted to split
for

•

and Halsey, Stuart & Co., Inc.

•

authorizing

Oct.

4

stockholders

will

vote

increasing authorized
common from 400,000 share to 550,000 shares
(par $15).
It is contemplated to give the stockholders rights to

share for

share, for the

new

•

Oct.

7

finance

for

$3,854,625 conditional sales
of the purchase price of

75%

estimated to cost

(10/7)
noon

CST

agreements
new

to

Sept. 21 reported that public offering of 86,750

equipment

$5,139,500.

•

Sept.

16

shares

common

the retirement

on

Nov.

1

of

$19,800,000 first mortgage
2V2S of 1962. Bonds will be sold through competitive
bidding. Probable bidders include Morgan, Stanley &
.

Co. and

Halsey Stuart & Co., Inc.

$5)

•>

1 <%.

»

/

and

shares.

stockholders

to

voted

to

change

(no par) to 250,000 shares

increase

the

authorized

the

250,000-

common

amount

to

350,000

It is proposed to offer for sale 67,454 common

provide

additional

writer, Riter & Co.

capital
*

funds.

,

*

Probable

s.\

; ■

under¬
-

State, Municipal

and

First California Company

preferred

to

be

plan.
exchanged on

common

5%

issue

225,000

shares

of

stock

(par_$50)
under
Of this amount. 85,000
basis of one preferred

shares for each Washington Ry.

preferred

share; proceeds from sale of
remaining shares would be used to redeem 6% and
5 %"% preferred stocks. Probable bidders include Alex.
Brown & Son and

•

Kidder, Peabody & Co.

-y

♦

sell

at

Public Service Co. of New Mexico

Sept

18

expected

date

later

merger

that

shares

of

Cities
this

Service

company

Co.

-

will

received

through

of Federal Light & Traction Co. Probable bid¬

Rollins & Sons; Rauscher, Pierce- &
Co., Inc. Blyth & Co., Inc.; The First Boston Corp.; Otis

ders

include E. H.

Co., and Harriman Ripley & Co. ,i,

•

Government,

to

proposes

recapitalization

are

Electric

6

United States

1, 1947. Probable bidders in¬

(par

shares and 9,723 unissued $2.40 dividend
preferred stock
to

company

share and 3J/2
*

~

Neptune Meter Co.

Sept.

Duluth, Missabe & Iron Range Ry.
24 company, a subsidiary of the United States
Steel Corp., asked the ICC for authority to issue
$19,200,000 of first mortgage serial bonds in connection with

shares

&

/ '■>

will

mature Jan.

cumulative

amended
common

expected at early date through

"

•

21

3.60%

Midland Oil Corp.

shares at $3.25 a share,
Gearhart & Co., Inc.

stockholders

Potomac Electric Power Co.

Sept.

subscribe to the additional stock when issued.
•
Chicago Indianapolis & Louisville Ry.
Company is asking for bids to be opened 12

Alstyne, Noel & Co.

cluded Kuhn, Loeb & Co. and Halsey, Stuart & Co., Inc.

preferred, plus not less than
six nor more than eight shares of common as
may be
determined by directors,
•

stock two

par) preferred

in indebtedness

000 5s which

made to

on

Van

vote on authorizing an in¬
by $12,000,000 to provide funds
for payment or to reimburse company for payment of
existing indebtedness. Company has outstanding $10,000,-

issue of

an

15,000 shares of 4J/2% prior preferred stock ($100 par)
If approved, it is expected that an offer will be
preferred stockholders to exchange their stock,

.

Central Illinois Electric & Gas Co.

14

crease

on

underwriters

Pittsburgh Bessemer & Lake Erie RR*

Nov.

Marlon Power Shovel Co.

Nov. 7 stockholders will vote

common

and authorized 100,000 shares ($20

Probable

and G. L. Qhrstrom & Co.

value.
•

one

stock.

interest. Probable bidders include Stone & Webster Se¬

curities Corp.,

Pharis Tire & Rubber Co.

/•

Sept. 23 company requested the SEC authority to issue
and sell under competitive bidding
$6,000,000 of new
bonds. Proceeds, together with Treasury funds, would
be used to redeem $6,500,000 series A bonds at 108 and

v;

Louis-San Francisco Ry.; (9/30)

\

Company will receive bids until Sept. 30 for the

pur¬

St.

chase

of

$5,500,000

equipment trust certificates, to be
1, 1946, due serially 1947-56. Probable bidders
include Halsey, Stuart & Co., Inc.; Salomon Bros. &
Hutzler, Stroud & Co. (Jointly). "
.1 / . ; /
-

dated Oct.

INCORPORATED

Corporate Securities

.

Underwriters and Distributors
.

Blair

Co,
Serve

Offices
California and Nevada

BUFFALO

PHILADELPHIA




CHICAGO

'

PITTSBURGH

Head Office: San Francisco
ST. LOUIS

noon

bidders must

CLEVELAND

?

inviting bids for $1,720,000 of equipment
trust certificates dated Oct. 1, 1946, and maturing from
April 1, 1947, to Oct. 1, 1956. Bids must be received be¬
fore 12

BOSTON

(10/1)

Company is

Our Sixteen

INC.

NEW YORK

Wheeling & Lake Erie Ry.

ders

include

E.S.T. Oct.

1. The company stipulated that
price 0^ at least 99. Probable bid¬
Halsey Stuart & Co., Inc.; Salomon Bros,
name

a

and Hutzler and Stroud & Co.

Co., Inc.

(Jointly); Harris, Hall &
/

.

,

Volume

164

Number 4528

THE COMMERCIAL &
FINANCIAL CHRONICLE
stock

common

to

raise-

So

little

a

Pacific

issue,
the

over

week

a

Company has been elected Assist¬

\

$20,000,000.

ant Vice-President.

hence

Telephone's new 40-year
which bidders will name

on

rate

coupon

well

as

price, should provide

the

as

fairly sub¬

a

stantial idea of how bankers and

investors

are

Winding

3By-.xontrast

rush of

new

ed

the

spring

in

the

with

the

hectic

>

cinnati

these

market,

business.

Bankers

most part, however, are still
finding plenty to do in the job of

:

most

a

and

| Insofar as new undertakings
concerned, it is quite gen¬
erally recognized that any re¬

only

the

-disturbances

soned market

Referring
outlook

the

in

With

severe

to

the
one

stock issues

out

are

said,

is

time

the

power

of
he

the moment,"
"liquidation is still

adding

ind people

on:

for

no

interested in

are

,

selling-rather than buying."
He made it

a

entiate in the

bonds,

that

of corporate

in

the :

debentures,

or

evidences of debt,

case

The

intrinsic

,

value

had

the

a: quick

run¬

pulled, but- it has
partial recovery.

was

since scored

and

involving
of

age

number of shares offered
512.

to

the

drastic

into

Nelson

CALIF.

FRANCISCO,

Kelly, Chairman of the

Convinced, however, that what
we -have
been witnessing is a
fundamental adjustment in mar¬
ket conditions, this: banker con*
tended
that
whether projected
new financing involved bonds or

ment authority expressed the con¬

viction that

financial interests

our

should acknowledge the fact that
become a world

oi|r» market has

a

exchange

not

just

Douglass

&

•

Co,

of

Southern California after months

monetary

to

the

meet

market.
for./--,?.♦' :

•';'?'■"

He is

•

" *

.:

.

.

the recent

securities

selling

was

in American

of foreign origin.

and not influenced by any fears
of

another

trary

the

suggested

lie

Dutch

On

war.

and

British

who had built up

ments

here

period,

and

con¬

French, i

large invest¬
in

in Southern California,

operation

.wiii

the largest retail»sales or¬
ganization in the Western invest¬

the
a

war

position

The entire

personnel
of the Nelson Douglass Company
is poming to the First California
Company and will comprise 150

employees.

Regarding
French

stock,

American- plan

>

our

in reconstruction elsewhere

Brooklyn,
The

it

the

tersely he

to world

and

asserted

our

growth

proportions economically

put on long pants as finan¬

ciers."
A Fortnight Hence

?

A

from

week

'

.

ideas

the

1946.

debentures.
That
vide

project promises to pro¬

the

market

first
for

|

real

test

corporate

of

the

obliga¬

tions since the period of heavy

liquidation marketwise has sub¬

deposits

expected

was

Issue

to

Power

Co.

give the new

market its trial spin

this

Russian

that

were

Even

also

we

DIVIDEND
The Board of Director* has declared
g

and

effectively

on

should

it

was

ute

to

decided at the last min¬
delay

that

company's

projected sale of sufficient new




the outstanding

the Company,

1946

REFINING AND MINING COMPANY
Directors have declared a quarterly

The

dividend of 1*4%

1046.

on

Walter h.
and

Morris

Associates,

national

a

conference

First Consolidated Mortgage
Four For Cent. Gold Bonds

;

Holders

of Certificates for shares of
Common Stock pf the par value pf $10
each .are therefore .urged to exchange
such Certificates, for Certificates for
new Common

Rehfeld, .Vice-Presi¬

;

of

Common Stook $5

pew

for each share of

Liiii

_

-value,

j

J

hereby

that

should

the shove
presented to

fie

Department, 16 Wall Street, New York 15,
N. Y., on or after Octoher 1,

1046, for the
of having coupon sheets attached
Interest
due April 1,
1947, to
October 1, 1996, both inclusive.
Form of

.

__

given

-bonds

'

,

1996.

the Successor Trustee under the
Mortgage,
Bankers Trust Company, Corporate Trust

L- G. HANSON, Treasurer.
'
: •
'

■
„.

par

,

is

described

Comuwu Stock of the
/
I

par value of $10.

Due October 1,

,

Notice

Stock of the pgr value of

ph the basis of two shares

purpose

■]-- ij-j

covering

letter

or¬

ganization of bank 7loan officers.
Pie organization will hold its an¬

Norfolk and Western

:

Railway Company

Common stock of the par value pf $5
each shall have been Issued therefor.

$5 per share,

Company,
St.
Louis, has been elected Second
Vice-President
of
The
Robert

;

shares of Common Stock pf
the par yalup of $10 each 1s recognized,
for any purpose, until surrendered, and
a
Certificate pr Certificates for new
share or

Trust

NOTICE

To Holders of

10, 1945, ho Certificate representing »

dent of the Mercantile-Commerce
Bank

FINANCIAL

Pursuant to sa resolution adopted at
the Stockholders' Meeting held on <luly'

,

FRANCIS FISKE,
Treasurer.

September 30,3.946.

*

Robt. Morris Assoc. Meet

on

quar¬

terly dividend of 37 Vit per share on
the Common Stock, ($5 Par), payable
October 15, 1946 to holders of Common
Stock of reeord at the close of business

are

payable

■

September 19, 1946
a

Stock

October IS, 1946 to stockholders of record
at
the close of business
September 30,
S946. No dividend was declared on the
Common Stock.

at the close of business on October 15,

There also has been declared

cents per share) on

(87
Capital

Preferred

the

Series haye been declared payable No¬
vember 1, 1946 to holders of Preferred
Stock of the respective series of record

r

SMELTING

STATES

UNITED

A regular Quarterly dividend of $1.00

done

reportedly

the

at

October 15,1946.

on

New York, N. Y.
September 18, 1946

can¬

have

stock of

stockholders of record

to

share

per

common

payable Octoher 31*

close of business

entering Germany.

Since the French

nual

quarterly dividend of 50c

on

PHILIP MORRIS"

Americans

some

the

of

transmittal

office

PACIFIC GAS AND ELECTRIC CO.

Swampscott,
Mass,, Sept, 30, Oct, 1 &nd 2.

should
usual

be

may

obtained

at

pf Bankers Trust Company.
No. 100, due October
1, 1946,

Coupon

in

SITUATIONS WANTED

detached

be

manner.

collected

and
•

'

'

in

the

-

NORFOLK AND WEJSTERN RAILWAY

pjyiDEND wrm

"

V COMPANY,
L. W. COX,' Secretary.
Philadelphia, Pa., September .4, 1946.
-

fotnmon Stock c.Dividend flp* 123
a

Over The Counter

which

believe

I

population,

will

reach

the

25,000,000 mark .within the next
15 years."
C.

Coltrin,

Vice-President,
charge of Southern

F.

by check

change

sonal

reasons.

927,

.

for

on

at

the

close

fer Boob will

not

of

trans¬

Carolina
October
tation

THE SUPERHEATER COMPANY

M.

Vice-President of First California

Experienced
trader
in
unlisted
and
bonds, 35 years of age
15 years' ,experience, presently
employed,
desires
new
connection
with member or unlisted firm.
Cap¬
able
of
managing
unlisted
depart¬
ment.
Address
Box
A
925,
Com¬
mercial
&
Financial
Chronicle,
25
Park Place, New York 8.

SCHILLER,

Treasurer.

maturing

Interest

&

-77-;

be

WESTERN

RAILWAY

maturing
paid by said

coupon

will also

CAROLINA

COMPANY,

77 f. p. lemmon,

at

Vice

Dated: New

Nelson .Douglass, Jr. and
J. D. Middleton will become Vicedent.

Presidents.
be

liussell E. Evans will

Vice-President

in

charge

of

Southern

California Division Of¬
Charles
F.
Sill
will
be

fices.

Vice-President

reaux

troller

Manager.

will
and

Southern

ft.
and

O.

I.

Lamo-

he;Assistant Comp¬
Office
Manager of
Searl,
F.

operations.
J. ■*'. Brandon

Stuart

Roussel

Perry of Santa Ana Dis¬

Office

for

First

California

|
-

THE CHASE NATIONAL BANK OF THE CITY OF NEW YORK
The Chase National Bank of the City of New York has

a

declared

dividend of 40f* per share on the 7,400,000 shares of the

stock of the Bank,

payable November 1, 1946

to

capital

holders of record

at

the close of business October 11, 1946.

Angeles

also named Vice-Presidents.

James

trict

Los

California

Sidney
were

and

stocks

with

The transfer books will not be closed in connection with the

Capable Assistant To
Active Trader
over-the-counter-market.

Park Place,

Box

M

926

Chronicle, 25

New York 8,

N.

Y.

of this dividend.
THE

Fully experienced in all phases of the

Commercial & Financial

payment

!

President.

York, N. Y., September 23, 1946

TRADER AVAILABLE

Company will become Vice-Presi¬

N. Y.

1, 1946,
Company.

CHARLESTON

Assistant

now

15,

Company

will be paid upon presen¬
of

Central Hanover Bank
Company, 70 Broadway, New

Trust

York

A

October 15,
1946 to stockholders of record
•the close of business October 5, -1946.

Egan,

1946,
office

October
Trust

Dividend No. 166

Railway
1,

at

quarterly
dividend
of
twenty-five
cents
(J25c) per share on all the outstanding stock
of
the
Company has been declared payable

N. Y.

,,

The
$2,720,000 of 6%
Bonds
secured
by First Mortgage of Charleston & Western

San Francisco, California

■

REDEMPTION

Railway Company

be closed.

E, J. Beckett, Jrt<nsy.m

and

Fi¬

&

Chronicle,
25
Place, New York 8,

OF

Charleston & Western Carolina

Oct. 15, 1946, to

record

Sept. 27, 1946. The

W

nancial
Park

NOTICE

per¬

Box

Commercial

on

to
7'

make

on

par

shareholders of
business

Making money in
Desires

REDEMPTION NOTICE

Sept. II, 1946, for the
of the year 1946, /qual tovalue, will be paid upon
the Common Capital Stock of this Com*
2°/o of its

experi¬

years

dividend declared by the Board

third quarter

pany

Seventeen

panjr,';;;7§;:::^
Joihn

cash

of Directors

Trader Available !

this market.

Bruner

week, but because of conditions,

Company, Inc.

•

celled.

ence.

California

Division

Consumers

sided.

American

Transfer books will remain open.
ROBERT B. BROWN, Treasurer.

on 7 the

panding

Tuesday, California operations, it was an¬
unless
conditions
dictate
delay nounced by
George H. Grant,
such
as
developed
in
several President of First California Com-?

Pacific Telephone
Telegraph Co., subsidiary of
American Telephone & Telegraph
Co., is slated to sell, in competi¬
tive bidding $75,000,000 7 of new

Waters have

Universal Pictures

7

Call/or

keep pace with our rapidly-ex¬

next

&

York
of
the

Company has declared a divi¬
per share pn the Common Stock,
payable
October
i, 1946, to Stockholders or
Record at the close of business September 19,

per share on the Cumulative Preferred
Stock,
Series,
and the
regular
quarterly dividend of 90? per share on
the Cumulative Preferred Stock. 3.60%

expect in: CSdlr"

we

California Company to

will remain in

other instances,

Now
Directors

of

25c

Philip Morris & Co. Ltd., inc.

■

First

F.

'

Board
of

at

Douglass organization will enable

Putting

;

A.

DIVIDEND NOTICES

strongly jibed at Secretary
Byrnes for the reference he made

fornia. The addition of the Nelson

that "we should admit

Somers and John J.

press

aration for the tremendous devel¬

for

In the world.

MASS. —David

■

withdrawn
use

and

been added to the staff of Edward
E. Mathews Co., 53 State Street.

Manufacturing
dend

in the German press which is con¬
trolled by
them.
The Russian

organization is one of
most important jsteps in prep¬

opment which

heavily

BOSTON,

in

Douglass

to realize handsome profits, had

funds

-;•*

York

MANUFACTURING COMPANY
Noble and West Streets

subj ect of
monetary administration: they can
only he surmised from comment

"The 'acquisition of the Nelson

interests,

during
were

"Nelson Douglass & Co. is an
established firm," said Mr.
Kelly, "with a sales organization

old,

ment field.

-'7-7:

New

Exchanges.

AMERICAN

ment

pany

conyinced that much of

7;*

,

compromise.

merger of

American make the First California Com¬

an

7

of

Stock

Two With Mathews Co.

It is understood, howr
that the British are amend¬
ing their original ideas somewhat

of negotiation have completed the

men

the

Boston

ficulties.

think

and the combined

Co., 15 State Street,

members

DIVIDEND NOTICES

shrink¬

substantially,

of

of 70

Watts has become connected with

85,-

Stockholders of Scovill Manu¬

W.

Estabrook &

The issue has been oversub¬

scribed.

the Los Angeles invest¬
blocking ^quadri-partite progress
banking firm into the First consistently, the comment on the
California Company which merr American
plan which appears in
French-licensed V "Badener
stock, the key to successful flota¬ gey will result 7 in one., pf Jhe the
largest retail distributing organ¬ Tageblatt" is
tion would be found in a realistic
illuminating and in¬
izations in Southern California.
teresting. It holds that the pres¬
approach to changed conditions.
i Nelson t Douglass &
ent
situation does not require
Co. will
Rhouid Put On "Long Pants"
maintain its 7o|fiees at the pres¬ measures designed to terminate
gigantic inflation like that of 1923.
tAh avid student of world finan¬ ent location.
cial affairs, this particular invest¬

was

*

MASS.—William

avoiding administrative dif¬

all

Nelson

Watts With Estabrook
BOSTON,

a

on

unit

the State, and a capital Levy.
In
lieu of the American
proposals the
British have suggested that prices
be permitted to rise
thus

a

involve

mortgaging of all property to

dent of First California Company
and Nelson Douglass, Jr., President

right.

20.

ever,

down of around 4 points when the

f<plug"

understood

made at

was

price of $30 a share, with a deal¬
er's discount of 75c a share. The

Stuttgart to the pressing need
Board of First California Com¬ for an
anti-inflationary plan, by
pany has announced that H. T.
declaring that they have no such
Birr, Jr., Executive Vice-Presi¬ urgent need in their zone, where

mar¬

there

was

stock

Earl Lee

ket cduld be found provided the

the pricing was

of

subscribers.

nervous

SAN

of

other

or

ready

a

nstill holding

was

substantial ; portion

total, must have originated with

obligations, expressing the firmconviction

since

Douglass and >
First California Merge

V

point to differ^

case

which,

is

currency

the

pressure,

the syndicate
a
,

investment banker declared "new

being.
There
absorption at

/

offered to them at $30 a share
under rights which expired
Sept,

unsubscribed
were publicly

underwriting group

The distribution

opposed to the American plan

basis

than half the total

more

!

American recognition of the press¬
ing need for action."The British

new

issue sold, there appeared to be
~

sea¬

financing,

such

the New York

;

Common shares of the Scovill

Manufacturing Co.,
for by
stockholders,

market by an

(Continued from first page)

which

the offer¬

Stock Is Offered

headed by Morgan Stanley & Co.

conversion of Reichsmarks

Stock Exchange.

,

specifically

for

on

at

facturing had subscribed for 84,036 of the 149,548 common shares

"

Sept. 23 as a secondary
distribution after the close of the

Monetary
Unit for Germany
Urged By U. S.

are

was

Scovill Common 7^

offered

&

order

bid

group

stock

ing price of 26

sumption of such activity must
await straightening out of cur¬

,

Gas

in

was

Charles F. Sill will be members
of the Southern California Execu¬
tive Committee.

•

aure

rent

common

inopportune time when

heavy liquidation
holding the

r

Electric

Columbia

! That issue reached market at

V

marketing , the substantial rem¬
nantsJeft over from some of their
"

by

prising development.

for

earlier deals.

&

sold

Electric Corp., was hardly a sur¬

dealers,

and

.

Gas

stock,

dull days in the underwriting

are

syndicate

marketing of
the unsubscribed-portion of Cin¬

and early summer

issue

the

7

•

Coltrin, John F. Egan,
Nelson Douglass, Jr., ,J. D. Mid¬
dleton,\ Russell
E.
Evans
and

New

which handled the

equities which mark¬

new

of

up

•••?'•>

C.

^

.

Cincinnati Gas & Electric

.

;

7

thinking.

F.

1579

CHASE

OF THE

NATIONAL

BANK

CITY .OF NEW YORK

W. H. Moorhead

Vice President and Cashier

THE COMMERCIAL & FINANCIAL CHRONICLE

investor

Exchange Wants to Encourage

New York Slock

markets in world through
reciprocal trade and monetary agreements, New York Stock Ex¬
change is developing a program to help American investors to take
advantage of commercial opportunities wherever they may open
ap on surface of globe. In general, Exchange's plan is to encourage
listing on Big Board of securities of leading companies of all coun¬
tries of world, particularly nations of South America, Africa and

sion,

-

ing

'

mercial

they may open up on the surface
of the globe.
/ ,«/
The Exchange's Department of
Stock List is

concerned

agencies,

governmental

tain

now

ironing out

cer¬

and

and

though some very
have already been
further developments

block

From Washington

Cover

Mutual Funds

I.

—

Mr. Detzer

previ¬

was

fill Rails Sfeg

Calendar—

Security Issues

1573

Notes

1538

Observations—A. Wilfred

May

1554

Our Reporter's Report

1579

Offerings
Public Utility Securities
Prospective

Security

1534

M. S.Wien & Co.

Corner

Salesman's

FOREIGN SECURITIES

__1578

Securities..

Estate

Securities

NEW ISSUES

1532

Our Reporter on Governments—

Real

ic.' Commons & Pfds.

1550

Securities Now in Registration

ESTABLISHED

Tomorrow's Markets (Walter Whyte Says)

Members
40

N.

Y.

Security

1919

Ass'n

Dealers

Exchange PI., N. Y. 5

HA. 2-8780

Teletype N. Y. 1-1397

Trading Markets in

may

DuMont

-

facilitate stand¬

To

techniques.

ear,

requirements
for listing,

the

in

program into full effect but, first
of all, the Exchange feels the in¬

ardization

ternational political and economic

believes also that
certain revisions in the Securities
Act of 1933 are necessary.
The

desirable

considered

Peace

of

disclosure

broad

Tel. CAP.
N.

0425

:

:

9, Mass.

Teletype BS 259

Y. Telephone HAnover 2-7914

Wilcox Gay Corpora

corporate

general, the Exchange's plan earnings and activities is desirable
the listing on the but that some of the provisions
Big Board of the securities of the of the Securities Act of 1933 by
leading companies of all the coun¬ requiring what it feels are -ex¬
tries of the world, particularly cessively
detailed
iiiformation

148 State St., Boston

Radio & Television, Inc.

that

view

the

takes

Exchange

what

In

Radio & Te

Exchange

the

situation will have to settle down

essential for
the Exchange has in mind.

See "As We See It"__

Ahead of the News—Carlisle Bargeron__1532
Visit—Paul EinzigJ
1535

be reduced to
an irreducible and practical mini¬
mum
and
bridge '• by
modern

formidable obstacles
in the way of putting the

absolutely

Wis.

|o the listing of foreign se¬

curities here

Some very

something like normal.

Chronicle)

Old Reorganization

Page

L

' '

Financial

The

Detzer has become associated with

Mr. Dalton's Washington

change's hope that these differ¬
Which could be a serious

yet.'

is

into ef¬

to

Bell, Farreli & Stebbins, of Madi¬

Regular Features
Financial Situation (Editorial)

ences

likely soon, no one at the Ex¬
change believes that the idea can
be fully carried out for some time

to

if its program is to be
put
fect.

and

(Special

MILWAUKEE, WIS.—Harold E.

countries

Laws, governmental regulations
practices vary con¬
siderably in the different coun¬
tries of the world and it is the Ex¬

are

stand

other

Detzer With Bell, Farreli

stock

and corporate

solid beginnings
made

financing
international securities trans¬
foreign

in

actions.

for further consideration and

action; and,

and

abroad who have been or may be

preparatory to putting the propo¬
sition up to the Board of Gover¬
nors

lawyers
here

both

accountants

and

of the plan

technical details

trust

companies and commercial banks,

wherever

opportunities

of

officers

bankers,

ment

advantage of com¬

the

the

(Continued from page 1531)

;

NSTA

cessful operation, such as mvest-

to help American

program

a

exchange in

and

mmmmmx 111111

New

Anticipating the restoration of relatively free markets in the
world through reciprocal trade and monetary agreements, the New
York Stock Exchange is develop-*^—
;
;
~
investors take

Department

the -State

bodies

son,

Treasury Department in this country and corresponding govern¬
mental bodies and stock exchanges in other countries if its program

into effect.

ernmental

ously with Seligmann & Co.

State Department and

and Exchange Commission,

Treasury Department in this
country"- and corresponding gov¬

*
Exchange

cooperation of the
Exchange Commis¬

the

need

the

that

the

own

:

It is certain Exchange will need cooperation

South Pacific Zone.

is to be put

v* -

:

clear

is

his

in

pay

r

Securities and

Anticipating restoration of relatively free

of Securities

It
will

Listing of Foreign Securities on Its Big Board

must

country.

Thursday, September 26, 1946

In

is to encourage

^

the

of

nations

South

the

about

America,

companies

Africa and the South Pacific Zone,
■and otherwise to make it easy

thinks

theif

operate

cap¬

ital anywhere, ,. In a sense, the
proposal reflects the growing im¬
portance of the New York money

"market in the world and is

a

to

tions,

agreed
upon
Kingdom, are

can

position the United States

not remain aloof from world¬

•en

the rhoment about all

at

do to\vard

zation

whose

pensable

the

in

the ultimate reali¬

INCORPORATED

45 NASSAU STREET, NEW
telephone

REctor 2-3600

•

Enterprise

'

double
of

case

taxation which
in the
brackets
could

persons

15%

?•

•.

"•'

•

•

•

.

J

1-576

york

Worcester Trans. Assoc.

•/'v V

Ralph F. Carr & Co., Inc.
01

Milk Street,

Boston.

We

-

•:•/*

V

•

•

Hubbard 6442

other

earn¬

*''*r

^"V'• *" V

V«*".*/•»'

•

Boston 0, Make.

New York

Teletype

k

Hinorer 2-7913

BS 328

BROAD

•-v
//V*'•
Firm Trading Markets

specialize in all
'*

■

•••»' V

r;

">'*

AV \ -♦

Industrial Issues

;

1924

t

,

2

HANOVER 2-4341

ST., N.Y. 4
TELETYPE—N. Y.

Public Utility Stocks and

1-2866

-

;

Securities with

;•*

Bends

a

New Eng.

Market

•

'

New

Specializing

Specialists in

v

ftj,

in

ZZ// lis fed Securities

10

Established in 1922

-

!

Joank

'

—

Insurance

■'a

•

■

New York 4. N. Y.

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

Public

Utility — Industrial—Real Estate
Lumber & Timber

^Seaboard Fruit

Co., Inc.

^General Products Corp.

Grinnell

'Susquehanna Mills

Fleetwood-Airfiow, Inc.
Gerotor-May
Eastern

Pressurelube, Inc.

Empire Steel Corp.
Engineering Co.

Convertible
.

Radiator, Pfd.

Bonds, Preferred and Common Stocks

Common

...

'-L

*Prospectus

Northern

Engineering Works

"

/

Common

4

-

.

1

w. t. bonn & co.
120 Broadway

New York 5

Telephone COrtlandt 7-0744
Bel! Teletype NY

1-886




on

request

and Common

'

,f

BOUGHT—SOLD-QUOTED

Preferred

Amos Treat a Co.
40 Wall St.

BO 9-4613

New York 5,

REMER, MITCHELL 8c

REITZEL, Inc.

208

PHONE RANDOLPH 3736

SOUTH

WESTERN

LA

SALLE

ST., CHICAGO 4 •

UNION TELEPRINTER "WUX"

•

BELL SYSTEM TELETYPE CG-98?

Hill, Thompson & Co., Inc.
Markets and Situations

120

N. Y.

Tele. NY 1-1448

for Dealers

Broadway, New York 5

Tel. REctor 2-2020

|

Tele. BOston 229 J

SECURITIES
.

-

England Unlisted Securities

Tel. HANcock 8715

-

U. S.

:

Frederick C. Adams & Co.
-

<%PFPT A T

Sunshine Consolidated

1

TEXTILE SECURITIES

Vl-

r.ARL MARKS 4 P.O. 1HC.

50 Broad Street

i:

Investment Trust Issues

24 FEDERAL STREET, BOSTON

FOREIGN

,

'

FOREIGN SECURITIES

•

vi;

Insurance and Bank Stocks

*'*

.■

*.t t.r'iy-j

:

Morris Stein & Co.

Teletype—N. Y. 1-971
•

new

Foods

Schoellkopf, Hutton & Pomeroy

tax is levied in the country

where dividends and

HAnover 2-0050
!'

60IS

National

Bell Teletype

MINING and OIL STOCKS

deductible from the tax which the

''-

YORK 5

Boston Real Estate Trust

50

'

Thompson's Spa Inc.

;

Established

■"

Suburban Elec. Sec.

:

Association

philadelphia telephone

1

•

'

lines recently
with the United
also necessary, as

invaluable to its suc-^

or

! /,

t

Rogers Corp.

ings originate and this amount is

be

would

■

Members New York Security Dealers

foreign firms are

indis¬

aid

request'

higher
income
wipe out earnings entirely.
As
the arrangement works where it
has already been applied, only a

objective is to con¬
sider a possible revision of its own
rules pertaining to foreign listings
and to discuss the question with
Others
who
might
conceivably
hav£ an interest in the proposition
or

to

posed

it

its

of

on

otherwise investors would be ex¬

problems.

The Exchange is frank to admit

that

Prospectus

•

the

along

ognition of the fact that to main¬
tain this

wide economic

■

:

On the other hand, it
that the financial state¬

altogether too inadequate.
Reciprocal tax treaties between
the United States and other na¬

rec¬

'

w

listings. un¬

restrict

ments of many

'

Gearhart & Company

necessarily.

for Americans to invest

concerned

'

Tele. NY 1-2660