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Ifve.
tininirraal
Volume 137

financial

branirk

New York, Saturday, September 30 1933.

Number 3562j

The Financial Situation
SECURITY prices have suffered further collapse
the present week, bonds declining almost as
severely as stocks, and when such a state of things
continues, week after week, as is now the case, the
conclusion is warranted that the financial markets
take the view that the general economic situation
is not progressing in an entirely satisfactory way.
And the deduction is fully warranted inasmuch as a
feeling of apprehension actually does exist and the
apprehension is assuming a steadily widening scope.
A superficial view ascribes this to disappointment
over the fact that credit and currency inflation is
not proceeding fast enough. The exact reverse is
the case. The apprehension grows out of the fact
that credit expansion is proceeding altogether too
fast, and the further fact that new devices are constantly being put forth for still further adding to
its volume and for extending its use in new directions. Hardly a day elapses that news dispatches
from Washington do not advise us of some new
method for adding to the volume of credit afloat
and does not bring intelligence of some scheme for
adding to it, thereby leading to anxious inquiry as
to where the thing is to end.
For the time being President Roosevelt seems
to have set his face against the demand, as urged
by the cotton planters last week, that he put afloat
the $3,000,000,000 of United States notes, or legal
tenders, authorized by law, and in that way he is
gaining credit as evidencing a spirit of conservatism,
whereas credit inflation is proceeding unchecked on
every side and plans are being laid deep and wide
for still other means of credit inflation, and for
putting it at the command of any and everybody.
The result is that distrust in the whole economic
and financial system as planned at Washington is
growing up. There is first of all the steady expan•
sion in Federal Reserve credit through the purchase
of United States Government securities. This is
going on unchecked week after week, and treated
by newspaper writers as if it were of no account,
whereas it furnishes occasion for the deepest solicitude, since the ultimate result must be to undermine the entire banking structure of the country,
inasmuch as in the last analysis banking here rests
on the security and stability of the Federal Reserve
organization. This latter is the main source of
dependence of the member banks of the system.
These member banks are faced by a deposit insurance, or guarantee plan, which fills them with dread
of the consequences and if, in addition, the impregnability of the Federal Reserve System itself is to be
called in question, further occasion for solicitude




and anxiety is being provided. Yet the Federal Reserve banks are being loaded up to the gunwales
with United States Government securities. This
very week the new purchases have reached $36,615,000, which is at the rate of close to $2,000,000,000 a year. And the total holdings of these
United States securities now stands at $2,274,395,000. This certainly does not add to the liquid
character of the assets of these institutions, and
people who look beyond the surface of things cannot refrain from reflecting how unfortunate would
be the situation of these Federal Reserve institutions were they suddenly called upon to assist the
member banks because of some unforeseen contingency making it urgent for these member banks to
seek aid in that quarter. At present the discount
holdings of the 12 Reserve institutions, which reflect
member bank borrowing, foot up no more than $133,233,000. The Federal Reserve System cannot be
held as othewise than in peril so long as its sole
function appears to be to act as an adjunct to the
United States Treasury to take over large masses
of United States securities. How anyone can treat
with indifference this class of inflation now proceeding on such a gigantic scale, and go still further
and demand a new source of inflation, as did the
United States Senators from the cotton States last
week, and act as if real inflation could only come
from the issuance of $3,000,000,000 of United States
notes (the greenbacks of the Civil War period),
passes comprehension.
The result of this flooding of the country with
Federal Reserve credit is seen in the abnormally
low rates at which the United States Government is
able to place its short-term obligations, and which
as a consequence are mounting up to huge figures.
On Monday of the present week the United States
Treasury asked for tenders on an offering of
$75,000,000 of 91-day Treasury bills, and disposed
of the whole issue at an ayerage price of 99.971
($75,082,000 of these bills being allotted on that
average basis, which is equivalent to only 0.10%
per annum). We wonder if the reader realizes how
extremely low a rate of only 1/10 of 1% per annum
is. It means that the Treasury gets the use of this
$75,082,000 for 91 days at the trivial cost of $21,774.
All the energies of the United States Government
are now being employed in providing banking credit
for needy borrowers of one kind or another, but
obviously there can be no scarcity of banking credit
when the United States Treasury is able to borrow
at such abnormally low figures. As a matter of
fact, the financial centers are flooded with idle

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Financial Chronicle

funds for which no employment can be found as
the direct result of the steady expansion in the
volume of Reserve credit afloat. Another illustration of the absurdly low figures at which Government borrowing is done was seen when, as part of
its September financing, the United States Treasury
put out an issue of certificates of indebtedness
running nine months and bearing a rate of interest of only 14 of 1% per annum.
/
With the cost of borrowing so low, the Government not unnaturally stands ready to engage in all
sorts of financing, no matter what the amounts
involved, and that is one reason for the growing
distrust that is spreading on every side and which
now finds reflection in the steady collapse of the
security markets at a time when monthly and quarterly statements of earnings are making extremely
favorable comparisons. As one illustration of the
kind, the New York Central RR., in its statement
for the month of August, made public the present,
week, shows gross operating revenues of $27,423,036
the present year against only $22,737,653 in the
same month last year, and net operating revenue of
$8,328,806 against $6,532,475, and yet New York
Central stock sold down the present week to 3634
,/
against 581 2 on July 7. And the New York Central
/
return is simply typical of virtually all other railroad returns. The underlying conditions, which determine the intrinsic merit of securities, are sound
and encouraging, but there is the deepest kind of
distrust as to the way, the unqualified way,in which
Government obligations of one kind or another are
being assumed as if there were no end to the resources of the Government and its ability to put
through all schemes of financing, whatever their
nature or character.
HE action last week of the cotton growers constitutes another case in point. The ease and
facility with which drafts are being made upon the
United States Treasury not unnaturally are causing worry and anxiety. These cotton growers were
represented by two different committees. The first
committee was chaperoned by Senator Thomas of
Oklahoma and Senator Smith of South Carolina.
This committee did not succeed in getting an audience with the President, who was suffering from a
cold at the time, but presented its demands to the
Agricultural Adjustment Administration and asked
the President immediately to establish a minimum
price of 20c. a pound for cotton on the farms, urged
the putting out of $3,000,000,000 of United States
notes, or greenbacks, and also the purchase by the
Government of 50% of this year's crop at a minimum price of 15c., on condition that the producer
contract to reduce his acreage by a like amount next
year and 25% the following year. The second committee, which did get an audience with the President, was headed by Senator Bankhead of Alabama,
dropped the demand for currency inflation and
merely asked the Government to purchase one-half
of the 10,000,000 bales now in the hands of the farmers at 15c. a pound, or $75 a bale, with the understanding that the producer would take out of production that amount of next year's crop. This
would cost about $375,000,000, it was stated, and
would be financed by the Reconstruction Finance
Corporation.
The President finally agreed to loan 10c. a pound
on the cotton, which has the appearance of a con-

T




Sept. 30 1933

servative step, since it does not involve resort to the
issuance of greenbacks as originally demanded, and
is at a price lower than the 15c. a pound which both
committees urged should be paid in the taking over
of several million bales of the present year's crop.
But there is no more warrant for buying at 10c. a
pound than there would have been for buying at 15c.
a pound. The Government has already dealt very
generously with these cotton growers, and it might
well have taken the stand that inasmuch as cotton
is now selling in the neighborhood of 10c. a pound
all occasion for further aid at Government expense
is without warrant or justification. Instead of
that, the Government has now agreed to loan 10c. a
pound on all cotton that may be offered, and, what
is more, has made the terms so liberal that the proposition really partakes of the nature of an outright
gift. That this statement is not an exaggeration
appears very plainly from the announcement given
out at the time—that is, on Friday, Sept. 22, by the
Agricultural Adjustment Administration. This announcement read as follows:
"Following a conference at the White House today between President Roosevelt, Secretary Wallace, Administrator George Peek of the Agricultural
Adjustment Administration and Senator John H.
Bankhead, of Alabama, it was announced that cotton producers will be given an opportunity to secure
an advance of 10c. per pound on their present crop
without liability to them.
"Details of the plan to provide this credit to cotton producers are now being worked out by the
Agricultural Adjustment Administration in co-operation with the Reconstruction Finance Corporation
and the Farm Credit Administration. Oscar Johnston, Director of Finance, is representing the Agricultural Adjustment Administration in formulating
these details.
"The plan, approved by the President, entails the
lending to producers 10c. per pound on their cotton
crop, for the purpose of enabling them to hold their
cotton until prices are nearer their fair exchange
value."
It will be seen that it is expressly stated the advance of 10c. per pound is to be "without liability"
to the cotton producers. And this purpose found
further confirmation when on Sept. 25 it was made
known that the establishment of a private corporation with 'Federal capital had been decided upon
by the Agricultural Adjustment Administration
"for distributing up to $400,000,000 in loans to cotton farmers under the program to lend them 10c. a
pound on this year's crop." Newspaper accounts
explain the reason for the formation of a separate
corporation by saying that use of this expedient to
circumvent legal impediments had been decided
upon when it was discovered by officials that the
Reconstruction Finance Corporation could not make
loans without an unconditional guaranty of repayment by the borrower.
Since then undivided attention has been given the
plan so as to put it in immediate operation, and
under date of Sept 25 the following further announcement came from the Agricultural Administration:
In an effort to expedite the advance of 10c. per
pound to cotton growers on the current crop, Oscar
Johnston, Director of Finance, of the Agricultural
Adjustment Administration, has called a conference for Wednesday morning (Sept. 27) of cotton
co-operative executives, cotton factors and others
engaged in the buying and marketing of cotton.

Financial Chronicle

Volume 137

Mr. Johnston was designated by George N. Peek,
Administrator of the Agricultural Adjustment Administration, to represent this Administration in
working out the details of making the loans to cotton farmers. Conferences were held during the
week-end by Mr. Johnston and representatives of
the Reconstruction Finance Corporation and the
Farm Credit Administration.
"We are developing a mechanism that will make
these loans available to cotton farmers with the
minimum delay," Mr. Johnston said.
We have stated that Washington might well have
taken the ground that already adequate assistance
had been extended to the cotton growers, and that
therefore there was no justification for involving
the Government in any further outlays on their
account. The underlying purpose of advancing 10c.
per pound on cotton of the current crop is to supply
the growers with immediate cash, but they are
already getting large amounts of cash under the
processing plan recently put into operation, by
means of which a processing tax of 4.2c. per pound
has been imposed on goods in process of manufacture, and also a store tax. Payments are already
being made in connection with this processing program, and the Administration feels very proud of
the way these payments are being expedited, and is
taking pains to proclaim the fact. Thus, under date
of Wednesday,Sept. 27, announcement came of what
had already been accomplished in the brief space
of time which has elapsed since the program was
put into effect: "Rental payments totaling $40,199,041.02 have been distributed to cotton producers of
the South who participated in the 1933 acreage
adjustment program. This amount, the total of
345,034 checks, had been sent out by seven o'clock
this morning (Sept. 27). The units dispersing these
checks reached a high production Sept. 26, when the
three shifts engaged in this activity completed and
mailed 35,277 cotton checks. Checks are now being
sent out at a rapid rate, and it is expected this speed
will be maintained until all of the approximately
1,037,000 contracting producers have received their
checks."
Accordingly, over $100,000,000 in actual cash is
now being turned over to the cotton growers, and
that certainly ought to be sufficient for the time
being. But how is this scheme of taking over cotton
at 10c. per pound likely to work out? The indications all are that this scheme will work just the
same as all previous schemes. To be sure, it is part
of the scheme that the cotton grower receiving an
advance of 10c. a pound (without liability) must
agree to reduce his cotton acreage, both next year
and the year after, but acreage reduction as here
planned is a matter of the future, pending which
many things may happen, while the cotton on which
the Government will make these advances is a matter of the present. Nor is any account taken of the
fact that through intensive cultivation, which is
very likely to occur, the yield per acre may be
greatly increased In the meantime cotton would
again be accumulating in the hands of the Government in sight of the whole world the same as before.
There is no reason for thinking that the result in
this case will be any different from what it was on
the former occasion.
-4--

TN THE meantime other means for spending Gov1 ernment money are multiplying on every side.
In a letter to Senator Capper, on Sept. 14, President




2315

Roosevelt gave assurance that the Government
would speed up farm operations "to the end that
the refinancing of distressed mortgages may be accomplished as rapidly as is consistent with sound
business." The President's letter, according to the
Topeka "Capital" of Sept. 15, was in reply to a letter
which Senator Capper sent the President complaining of the delay of the Farm Credit Administration
in functioning for the relief of owners of mortgaged
farms. Then also President Roosevelt has been
urging cities to speed requests for allotments from
the $3,300,000,000 public works fund. In a message
sent by him on Sept. 22 to the conference of Mayors
meeting in Chicago, the cities of the nation were
urged to send immediately to Washington their
requests for allotments from the $3,300,000,000 public works fund. In his message the President
pointed out that Congress had appropriated $3,300,000,000 to finance a comprehensive program of public works, in part for Federal projects. Approximately $1,600,000,000 already have been allocated,
he stated, adding: "We are at the point now where
the State and municipalities interested in public
works projects should come forward quickly with
proposals which will give immediate work to their
unemployed." Secretary of the Interior Ickes, in
addressing the Mayors' conference, on Sept. 23, declared that red tape was not impeding the lending
of public works funds, but dropped the remark that
"In many parts of the country the Federal Government, in offering a grant of 30% and a loan of
the other 70%, is regarded as an ungenerous or even
niggardly step-father."
We suppose the announcement which has come
the present week from Newark must be looked upon
as fruit of the President's invitation referred to.
The announcement said that Newark was considering the possibility of asking the voters at the November election to approve an issue of $150,000,000
bonds, for the purpose of financing the construction
of a municipal electric power and light plant. The
Public Works Administration, it was stated, would
be asked to underwrite the cost of the project on the
basis of an outright grant of 30% of the expenditure
with the remaining 70% furnished as a loan to the
city. Imagine Newark getting $150,000,000 in this
way, with an outright gift of 30% of the amount!
And the same process is being pursued in other
directions, all with the idea of spending huge sums
of money and of spending them quickly. For example, the Reconstruction Finance Corporation has
been sending letters to all of the banks in the United
States recommending to them that they sell preierred stock to the Corporation to put them in condition for admission to the deposit guaranty company when it begins to function, in accordance with
the provisions of the Banking Act of 1933. The purpose may be commendable, but it means an enormous expenditure of public money. Is it any
wonder that in these circumstances there should
be growing distrust as to the ultimate outcome of
all this?
SIDE from a let-up in the schemes at Washington for spending money, a pressing requirement of the day is the modification or amendment
of the provisions of the Securities Act which now
operates to prevent the raising of new capital funds
both for taking care of maturing obligations and
to provide the needful new capital in the production

2316

Financial Chronicle

of capital goods—not through Government agencies
but through private subscriptions and private financing. Roger W. Babson, in a message from Babson Park, Massachusetts, Sept. 16, directed attention to the way in which the unfortunate provisions
of the Securities Act were working to prevent new
private financing a every description. He declared
that the Securities Act has been the chief factor in
practically drying up new security offerings as well
as refunding issues. He asserted that he was
heartily in favor of the underlying purposes of the
Act—namely, that the seller of securities should
share with the buyer a definite responsibility. However, he could not believe that the Administration
intended to pass an Act which even though accomplishing its purpose, paralyzes the major industries.
He said that much of the criticism aimed at the
measure was justified. "I am sure that automobile
men would protest vigorously if a law were passed
making each salesman personally responsible for
any defective part in every motor car he sells, not
for the first 90 days, but during its entire lifetime.
Nobody could afford to sell automobiles. The same
is true with the Securities Act of 1933." This is an
apt description of how the unfortunate provisions
of the Securities Act are working so seriously,
to the detriment of the country's progress by shutting off private means for the raising of funds for
its development.
Mr. Babson observes with much force that one of
the most unfortunate effects of the "Truth in Securities" Act to date has been its failure to eliminate
tipster sheets and stock promoters. Recent activity
has brought out a flood of new tipsters and renewed
'the energies of old ones. "The public, under the
impression that new securities now offered under
the new law must be sound, have placed their funds
in various promotional and fake stocks." Mr. Babson well says tint already there is a huge public
sentiment in favor of modifying and softening the
provisions of the law. It is to be hoped that he is
also right in asserting that such modification is
part of the legislation now being considered in
Washington.
HILE there is much talk to the effect that
inflationary schemes are being held in check
by the Washington Administration, inflation or expansion, or whatever is the correct word, in the
operations of the Federal Reserve System continues
to grow apace. This week the Federal Reserve banks
have added $36,615,000 more to their holdings of
United States Government securities, with the result of raising the total of these holdings to $2,274,395,000. The whole of this, and more, too, is outstanding in the shape of additional Reserve credit.
In fact,. the amount of Reserve credit outstanding,
as measured by the total of the bill and security
holdings, has been increased during the week in
amount of nearly $40,000,000, these bill and security
holdings having risen during the week from $2,376,662,000 to $2,416,038,000. This is due to the fact
that besides the increase in the holdings of United
States securities there has been an increase also in
the discount holdings of the 12 Reserve institutions,
these discount holdings, which reflect member bank
borrowing, having risen during the week from $130,161,000 to $133,233,000.
The amount of Federal Reserve notes in circulation keeps diminishing, however, there having been a

W




Sept. 30

1933

further drop this week in the same from a total of
$2,986,781,000 to $2,972,782,000. As in previous
weeks, the decrease here is in part offset by an increase in the amount of Federal Reserve bank notes
in circulation, this item having risen during the
week from $137,170,000 to $145,627,000. Gold holdings have further increased, but only in a small
way, the total rising from $3,590,966,000 to
$3,591,799,000. While liabilities on account of
Federal Reserve notes in circulation have diminished, the liabilities on account of deposits have
been increasing, the total of such deposits having moved up during the week from $2,766,622,000
to $2,807,779,000. The principal item in the increase
has been the member bank reserve deposits, which
have risen during the week from $2,543,328,000 to
$2,595,634,000. Evidently the member banks have
been able to enlarge their reserve account with the
Reserve institutions by means of the proceeds received in payment for the United States Government
securities purchased. The result altogether is a
slight further diminution in the ratio of cash reserves to liabilities. For the present week this ratio
of gold reserves and other cash to deposit and Federal Reserve note liabilities combined is reported
at 66.1% against 66.4% last week. The amount of
United States Government securities held as part
collateral for Reserve note issues decreased during
the week from $527,200,000 to $525,200,000.
HIS week reductions and suspensions of corporate dividends have been more prominent than
resumption and increases in the same. Public utilities have been especially hard hit in that respect.
Foremost place among the dividend suspensions
must be given to the People's Gas Light & Coke Co.
of Chicago, which omitted the dividend payment
ordinarily payable about Oct. 17. The Public Service Co. of Indiana cut the quarterly rate on the $6
cumul. prior pref. stock and $7 cumul. prior pref.
stock in half by declaring quarterly dividends of
75c. and 87 c. a share, respectively, on these issues.
/
1
2
The Central Power Co. omitted the quarterly divident on its 6% and 7% cumul. pref stocks. The
Mohawk Hudson Power Corp. declared the regular
quarterly dividend of $1.75 on the $7 cumul. pref.
stock, but took no action on the quarterly dividend
of like amount due Oct. 1 on the $7 cumul. second
pref. stock. The American Light & Traction Co.
reduced the quarterly dividend on common from
50c. a share to 40c. a share, after having previously
/
reduced from 621 2c. a share to 50c. a share. The
Southern Canada Power Co., Ltd., reduced the quarterly dividend on common from 25c. a share to 20c.
a share.
On the other hand, the Montreal Tramways Corp.
has increased the quarterly dividend on common
from $2 a share to $2.25 a share. The United States
Smelting, Refining & Mining Co. declared an extra
dividend of 50c. a share on common, in addition
to the usual quarterly dividend of 25c. a share. This
compares with 25c. a share paid each quarter from
July 15 1930 to and including July 15 1933, and
8712c. a share paid previously. The Eaton Manu/
facturing Co. resumed dividends on common by the
declaration of 20c. a share. The Alaska Juneau
Gold Mining Co. on Sept. 28 declared an extra dividend of 15c. a share on the common stock, in addition to the regular quarterly dividend of like
o mount. On Sept. 29 the Pacific Western Oil Corp.

T

Financial Chronicle

Volume 137

declared an initial dividend of 25c. a share on the
no par capital stock.

_

MARKED reversal appears in the August
report of the foreign commerce of the United
States. Merchandise exports for that month were
considerably below those for July, while imports
exceed in value those for any Month in nearly two
years. Furthermore, imports were in excess of
exports. In issuing the statement the Department
suggests that this change was brought about by the
continued downward trend in the value of the American dollar. Merchandise exports in August amounted
to $131,000,000 and imports to $155,000,000, an
excess of imports of $24,000,000. In July, exports
were $144,194,000 and imports $142,980,000, exports
exceeding imports by $1,214,000. The export
trade balance in July was greatly below the usual
amount. In large measure the reduction in exports
in August, compared with July, was due to much
smaller cotton shipments in August. In August of
last year, merchandise exports were valued at
$108,599,000 and imports at $91,102,000, the export
trade balance for that month being $17,497,000.
Both exports and imports in August 1932 were
exceptionally low in value. There were three or
four months during that period when the amounts
covering both movements were slightly less than those
for August of last year, but with these exceptions,
the August statement of a year ago was at the low
point for practically a quarter of a century. On the
other hand, exports last month were in excess of
those for any month so far this year excepting only
July, while imports were above those for any month
since October 1931.
For the eight months of 1933, exports are valued
at $944,527,000 and imports at $890,131,000,
exports exceeding imports by $54,396,000. In the
same time in 1932 exports amounted to $1,055,441,000 and imports to $917,309,000, the export trade
balance for the eight months last year having been
$138,132,000. Exports in August were 9.3% below
those for July, but show an increase of 20.7% over
August 1932, while for the eight months of this
year there was a decline of 10.6% in value of exports
from the same period of the preceding year. On the
other hand, imports in August were in excess of
those for July by 8.4%. Compared with a year ago,
there was an increase of 70.1%; for the eight months
this year imports were 3.0% lower in value than for
the same period in 1932. Considerable variation
is indicated by the above records.
August was the second month this year in which
merchandise imports were in excess of exports. The
other month was June, when the value of imports
was $2,457,000 higher than exports. The so-called
unfavorable trade balance last month, amounting to
$24,000,000, was the largest of any month since
March 1926, when the excess of imports over exports
amounted to $68,493,000. Since that time, there
have been only four months in which import values
were larger than those for exports.
It is generally the case that the value of merchandise exports in August exceeds that for July.
This is due in most instances to the larger shipments
abroad of cotton in August, which is the first month
in which exports of new crop cotton are to be expected.
This year the cotton crop moved early. Cotton exports in July were larger than those for any month

A




2317

this year since January. In August, however, there
was a reduction from the preceding month, August
cotton exports being 545,800 bales, compared with
709,700 bales in July. The Augu t cotton movement
this year was larger than that of August 1932, when
exports were 462,760 bales, the increase in that
month this year being 17.9%.
Cotton exports last month in value were very much
above those of a year ago, owing to higher prices
this year. The value of cotton exports last month
was $28,172,582. For July this year it was $36,755,604, the August figures showing a reduction from
the preceding month of $8,583,022 or 23.4% less.
In the comparison with August 1932 there was an
increase this year of $10,047,500.
Exports other than cotton have in most months
been below the restricted movement of a year ago,
and that was the case with August, if allowance is
made for the higher prices this year. The value for
last month was $102,827,000, after , deducting the
value of cotton exports for that month from the total
for all exports. The August figures were ,566,000
below those for July, while they show an increase of
$12,353,000 over August 1932, or 13.6% larger.
This increase represents, in part, the higher prices
for practically all commodities this year. For cotton
the increase in the value of exports in August this
year over a year ago was 55.4%. The increase in
bales was 17.9%,the difference of 37.5% representing
the higher prices for cotton this year.
Shipments of the precious metals in August were
much the same as they were in July, excepting that
the silver movement was very much higher. Gold
exports last month amounted to 1,473,000 (consisting mostly of gold previously earmarked) and
imports to only $1,085,000, the latter another low
record for many years past. For the eight months of
this year, gold exports have been $260,552,000 and
imports $186,095,000, the excessiof exports being
$74,457,000. Last year for the same period gold
exports amounted to $809,379,000 and imports to
$192,057,000, exports..exceeding imports by46$617,.
322,000.11kThe exports ofisilver lastimonth were
increased to $7,015,000 and imports to $11,602,000.
For the eight months of this year silver exports have
amounted to $12,386,000 and imports.
to_$43,565,000.
Last year for the same time,;silver exports were
$9,531,000 and imports $13,598,000.
HE New York stock market has suffered further
collapse the present week, with sharp further
declines in prices all around. The drop in prices
has been continuous day after day, with only an
occasional feeble rally, and with an unimportant
recovery on Friday. There is no way to account
for the weakness, except that there has been growing distrust with the prodigal way in which Government funds are being spent almost without limit,
and the steady expansion in the amount of Federal
Reserve credit through the purchase of additional
amounts of United States Government securities.
The commodity markets have been weak along with
the stock market, and bond prices have as a rule
also moved lower, especially in the case of the lowpriced and speculative issues. Another adverse
feature has been the occurrence of labor strikes in
numerous parts of the country, showing growing
restlessness on the part of labor. Being favored
with shorter hours and higher pay, they are not

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Financial Chronicle

satisfied, but are demanding further favors at the
bands of the employer and the Federal Administration as a part of the plan of securing additional
advantages for themselves; and the feature which
is attracting special attention in these labor troubles
is that the disposition seems to be to yield very
largely to their demands. The steel shares have
been depressed by the action of President Roosevelt in calling the leaders of the steel industry into
his presence and asking a reduction in the price of
steel rails to below $40 a ton, which has long been
the prevailing price. The request has been accompanied by the promise of large orders for steel from
the railroads, the Reconstruction Finance Corporation standing ready to make large loans for the purpose where the railroads are not in a position to
raise the funds themselves. The reduction in price,
while perhaps justified, has been viewed with some
concern, because rails have been about the only
product of the steel mills in which a profit has been
accruing to the mills in good years and bad years
alike, owing to the fact that the price was always
held unchanged. Returns of railroad earnings for
the month of August have been appearing in large
numbers during the week, and have made exceedingly favorable comparisons with a year ago, but
this has been of no avail in preventing a break in
railroad securities; both stocks and bonds have been
tumbling badly along with the rest of the list.
Loadings of railroad revenue freight have shown
somewhat smaller ratios of increase over the same
period of last year than has been the case recently,
and the same is true of the production of electricity
by the electric light and power industry of the
United States, this last being reported at 1,638,757,000 kilowatt hours for the week ending Saturday, Sept. 23, as against 1,490,863,000 kilowatt
hours in the corresponding week in 1932, thus indicating an increase of 9.9% as against 12.7% the
previous week. On the other hand, accounts regarding the condition of the steel trade, apart from the
uncertainty regarding the price to be fixed for steel
rails, have been more encouraging than for some
weeks past, the "Iron Age" observing that "the
launching of a Government-sponsored capital goods
program, the speeding up of public works, and a
renewed wave of steel buying, set in motion by price
advances, have put new life into a flagging market."
The national average of ingot output at 41% is
identical with the rate of a fortnight ago, but two
points lower than the figure of last week.
The commodity markets have at times been weak,
along with the security markets, as already
stated, but have been quicker to recover. The September option for wheat at Chicago closed yesterday at 861 2c. as against 8534c. the close on Friday
/
/
of last week, while September corn closed at 461 4c.
/
/
against 461 8c. the close the previous Friday. Sep/
tember rye at Chicago closed yesterday at 6614c.
against 6434c. the close the previous Friday, and
/
September barley at Chicago closed yesterday at
/
5434c. against 5258c. bid on Friday of last week.
/
The spot price for cotton in New York yesterday
was 9.90c. compared with 9.80c. on Friday of last
week. The spot price for rubber was 7.90c. as
against 7.38c. the previous Friday. Domestic copper yesterday was 9c. against 9c. the previous Friday. Silver prices continued to move within narrow
bounds, at least as far as the London price was concerned, which closed yesterday at 18 7/16 pence per




Sept. 30 1933

ounce against 18 pence the previous Friday. The
/
3
4
New York quotation was 3912c. yesterday against
/
40c. the previous Friday. The foreign exchanges
all moved lower, thereby lessening the diminution
in the gold value of the American dollar. Cable
transfers on London yesterday closed at $4.76 as
against $4.791 2 the close the previous Friday, while
/
/
cable transfers on Paris yesterday closed at 6.0114c.
against 6.08y ihe close on Friday of last week.
2c.
On the New York Stock Exchange 18 stocks established new high records for the year during the
current week and four stocks dropped to new low
figures for 1933. For the New York Curb Exchange
the record for the week is 12 new highs and 34 new
lows. Call loans on the Stock Exchange continued
to rule at 3 of 1% per annum.
/
4
Trading has been of only moderate proportions.
On the New York Stock Exchange the sales on Saturday last were 1,004,748 shares; on Monday they
were 1,308,810 shares; on Tuesday 1,432,010 shares;
on Wednesday 2,320,236 shares; on Thursday
1,443,990 shares, and on Friday 1,643,950 shares.
On the New York Curb Exchange the sales last Saturday were 153,835 shares; on Monday 181,635
shares; on Tuesday 192,105 shares; on Wednesday
658,474 shares; on Thursday 213,895 shares, and on
Friday 245,480 shares.
As compared with Friday of last week, prices are
again quite generally lower. General Electric closed
%
yesterday at 1934 against 205 on Friday of last week;
North American at 17% against 1834; Standard Gas
& Elec. at 103 against 10%; Consolidated Gas of
%
N. Y. at 403/ against 423 ; Brooklyn Union Gas at
4
g
against 713/2; Pacific Gas & Elec. at 203/2 against
673%
213/ Columbia Gas & Elec. at 143/i against 143%;
s;
Electric Power & Light at 6% against 6%; Public
Service of N. J. at 351 against 36%; J. I. Case
4
Threshing Machine at 663 against 703/; Interna4
s
tional Harvester at 363 against 38; Sears, Roebuck
4
& Co. at 383/i against 413/; Montgomery Ward &
8
Co. at 193 against 2234; Woolworth at 3834 against
4
393%; Western Union Telegraph at 55 against 603/2;
Safeway Stores at 41 against 4334; American Tel. &
Tel. at 1173/ against 1253 ; American Can at 883%
4
against 913 ; Commercial Solvents at 353/i against
4
5
35%; Shattuck & Co. at 73% against 738, and Corn
4
Products at 861 against 88%.
3
Allied Chemical & Dye closed yesterday at 13534
against 1363/i on Friday of last week; Associated Dry
Goods at 14 against 1534; E. I. du Pont de Nemours
at 743/ against 763%; National Cash Register "A" at
163 against 173s; International Nickel at 193/2
4
/
against 2034; Timken Roller Bearing at 263/s against
28; Johns-Manville at 50 against 51%; Gillette Safety
Razor at 133/i against 14; National Dairy Products
at 1434 against 153%; Texas Gulf Sulphur at 36
against 375 s; American & Foreign Power at 93/i
/
against 1034; Freeport-Texas at 42 against 433 ;
4
United Gas Improvement at 163/ against 1634;
8
National Biscuit at 503/i against 543/2; Continental
Can at 643/ against 663/2; Eastman Kodak at 80
2
against 81; Gold Dust Corp. at 20 against 2034;
Standard Brands at 233 against 243/; Paramount
8
4
Publix Corp. ctfs. at 13/ against 1%; Coca-Cola at
873/ against 883/2 bid; Westinghouse Electric & Mfg.
at 343/i against 393 ;Columbian Carbon at 52 against
4
56; Reynolds Tobacco class B at 509/i against 503%;
Lorillard at 21 against 2134; Liggett & Myers class B
at 96 against 9732, and Yellow Truck & Coach at
43 against 5.
4

Volume 137

Financial Chronicle

Stocks allied to or connected with the alcohol or
brewing group declined along with the rest of the
market. National Distillers closed yesterday at 893/
8
against 97 on Friday of last week; Owens Glass at 77
against 7532; United States Industrial Alcohol at 65
against 673 ; Canada Dry at 295 ex-div. against
4
%
30; Crown Cork & Seal at 38 against 413 ; Liquid
4
Carbonic at 273 against 30, and Mengel & Co. at
%
9% against 103 .
4
The steel shares have been more or less a weak
feature for the reasons outlined above. United
%
States Steel closed yesterday at 451% against 493
on Friday of last week; United States Steel pref. at
82% against 793 ; Bethlehem Steel at 33% against
4
3
34%, and Vanadium at 213 against 223. In the
auto group, Auburn Auto closed yesterday at 46%
against 523/ on Friday of last week; General Motors
at 283/i against 31%; Chrysler at 403 against 45;
Nas'i Motors at 1934 against 21; Packard Moto..s at
3% against 4; Hupp Motors at 33 against 33 ,and
4
4
Hudson Motor Car at 103 against 129. In the
4
rubber group, Goodyear. Tire & Rubber closed yesterday at 33 against 371% on Friday of last week;
B. F. Goodrich at 131 against 151%, and United
%
States Rubber at 163 against 1734.
%
The railroad shares have been much depressed.
Pennsylvania RR. closed yesterday at 293 against
4
313/2 on Friday of last week; Atchison Topeka &
Sante Fe at 541% against 583/2; Atlantic Coast Line
at 35 against g8; Chicago Rock Island & Pacific at
41% against 5 8; New York Central at 371% against
413/; Baltimore & Ohio at 273 against 29; New
2
%
Haven at 201% against 221%; Union Pacific at 1103/
2
against 115; Missouri Pacific at 434 against 43 ;
4
Southern Pacific at 223/ against 235 ; Missouri2
%
Kansas-Texas at 93 against 10; Southern Ry. at
.
241% against 26; Chesapeake & Ohio at 4134 against
423/; Northern Pacific at 213 against 2334, and
2
4
Great Northern at 1934 against 213 .
%
The oil stocks have also moved lower. Standard
Oil of N. J. closed yesterday at 393 against 4134
4
on Friday of last week; Standard Oil of Calif. at 39%
against 4234; Atlantic Refining at 26 against 2734.
In the copper group, Anaconda Copper closed yesterday at 151% against 16% on Friday of last week;
Kennecott Copper at 20% against 223/; American
2
Smelting & Refining at 42% against 463 ; Phelps%
Dodge at 16 against 163s; Cerro de Pasco Copper at
/
341% against 371%, and Calumet & Hecla at 55%
against 634.

2319

concern over French budgetary questions was evident in Paris. The French financial community was
gratified, however, by removal of restrictions on the
listing of foreign securities on the Bourse. These
restrictions were applied under a law passed in 1916,
and abrogation of that measure will increase the
international importance of the Paris market, it
was said. The Berlin Boerse was unusually quiet,
in anticipation of new trading regulations which
will heavily curtail the number of licensed brokers.
Prices moved upward generally on the London
Stock Exchange in the initial session of the week,
owing to more reassuring reports from Washington
regarding possible currency developments in the
United States. British funds were in good demand,
and most industrial stocks also showed gains. The
international list of securities was stimulated
sharply. The general tone was again firm in quiet
dealings on Tuesday. British funds were slightly
higher in early dealings, but settled back to previous
levels at the end. Most of the home industrial stocks
reflected quiet buying, while reports that strikes
were ending in South African gold mines gave a
fillip to this section. International specialties remained in favor. Changes in Wednesday's trading
were mostly toward better levels, but turnover remained small. British funds were dull at first,
owing to the overnight announcement of a new 21 2%
/
conversion loan, but the initial losses were regained
just before the close. Industrial securities also
wavered a little, but closed firm. 'Some good features appeared in the international group, with
Argentine bonds especially active. The market
trend Thursday was again upward, and brokers were
further cheered by a slight increase in business.
British funds advanced and industrial issues also
were in good demand. The international group
received additional support, with attention centered
mainly on Brazilian securities. British funds
sagged slightly in quiet dealings yesterday, but
other sections were firm.
The Paris Bourse was buoyant in the first dealings of the week, owing mainly to an impression in
the French capital that President Roosevelt would
not countenance a chaotic and disorderly inflation.
Prices improved in all parts of the list, with rentes,
French stocks and international securities all in
excellent demand. Reports reached Paris Tuesday
to the effect that American monetary policy remained unsettled, and this news caused a downturn
on the Bourse. Rentes held their ground fairly
well, while French stocks lost only small fractions
TRREGULAR price movements were reported on in most cases. The international group of securities
1 stock exchanges in the leading European finan- dropped heavily. After an irregular opening Wedcial centers this week, as there was again a good nesday, prices improved on the Bourse, but the
deal of uncertainty regarding the recovery plans increases were small in most issues. A few of the
in the United States and the possibility of infla- speculative favorites did well, and there was also
tionary measures. The London Stock Exchange renewed interest in international issues. Uncerwas generally firm, but business remained on a tainty was more pronounced Thursday, and most
very modest scale. The Paris Bourse and the Berlin securities lost ground in the session. Trading was
Boerse moved alternately upward and downward, slow and small transactions sufficed to unsettle the
as both markets were affected by internal unsettle- market for some issues. Rentes remained firm, but
ment as well as international difficulties. Dis- French stocks and international securities moved
patches from all three centers reflected the con- steadily lower. The trend yesterday was good, but
fusion prevalent among traders and investors re- advances were not great owing to light trading.
garding American developments, and the hope of
Securities of all descriptions were in good demand
early stabilization of the dollar. In the London on the Berlin Boerse in the opening session of the
market international currency problems far over- week. Bonds were especially strong owing to indishadowed domestic trade reports, as the latter cations that the Reichsbank would buy such issues.
showed no changes of any importance. Further Stocks advanced 3 to 4 points, but few offerings




2320

Financial Chronicle

appeared even at the higher levels, and turnover
remained small. The trend was reversed Tuesday,
and most of the gains of the previous session were
lost. A slight rally developed just before the close,
but it did not affect quotations much. Confidence
was restored Wednesday, and fairly sizable advances were registered in all parts of the list, but
trading dwindled to very small proportions in this
session. Bonds were in better favor than stocks,
but equities also showed gains as offerings were very
scarce. Prices turned downward on the Boerse
Thursday, but the losses were not especially pronounced. Profit-taking appeared on a modest scale,
with offerings easily absorbed at slight recessions.
Business was quiet yesterday, but the tone was
cheerful.
ORMAL negotiations for revision of the intergovernmental debt settlements will begin in
Washington, next Thursday, between representatives of the United States and British Governments.
Beyond the fixing of a date for the initial meeting, there is little that is definite about the coming
negotiations. The problem has become steadily
more complicated owing to political events in
Europe and recent currency developments. It was
indicated in Washington last Sunday that Secretary
of State Cordell Hull would direct the negotiations
on the American side, and that the State and
Treasury Departments would co-operate closely.
Mr. Hull announced Thursday that Under-Secretary
of the Treasury Dean Acheson, and Frederick Livesey, assistant economic adviser to the State Department, have been designated to conduct the actual
discussions. President Roosevelt has repeatedly
indicated that any final decisions on proposals to
be submitted to Congress will be made by himself.
He is expected to maintain close supervision over
the negotiations.
In a Washington dispatch of Wednesday to the
New York "Herald Tribune" it was remarked that
the American attitude will be one of sympathetic
consideration for any proposals that British representatives may make. The American representatives, however, will make no offers or commitments.
British officials who will engage in the debt conversations are Sir Frederick Leith-Ross, chief economic adviser to the London Government, and T. K.
Bewley, a Treasury official, who has been attached
to the Embassy at Washington. Together with Ambassador Sir Ronald Lindsay, they sailed from
Southampton, Wednesday, on the SS. Majestic. Sir
Frederick Leith-Ross remarked on sailing that he
expected to observe the feeling in this country
toward the question of war debts. President Roosevelt will confer with the British officials personally
on their arrival in Washington next week. Other
debtor governments will observe with closest interest the course of the negotiations between America
and Great Britain on this difficult problem.
Reports current in London this week were to the
effect that Great Britain will not pay any more
annuities, and will endeavor to arrange a final lumpsum payment as the only alternative to outright
repudiation. The problem of the December instalment remains unsettled, and it is held possible that
a further "token" payment, similar to that of last
June, will be tendered pending Congressional approval of any arrangement that may be made between officials of the two governments. Any offer of

F




sept. 30

1933

a final settlement, however, probably would involve
consideration of the tentative German reparations
payment of 3,000,000,000 marks, in final discharge
of the German obligation to the former Allies. "Default or a final lump-sum settlement were the
familiar alternatives last winter, but the British
Government finally took a middle ground, paying
the full instalment then due with a reservation to
the effect that it must be considered only as payment on account of the final sum to be determined
later," a London dispatch of Wednesday to the New
York "Times" states. But the British Government
"has no intention of taking that middle ground
again this year," the report adds. In the coming
negotiations, accordingly, all emphasis will be
placed on a final payment, with the discussion likely
to hinge chiefly on the amount that might be considered fair to both countries. A Paris report of
Wednesday to the New York "Times" indicates that
there has been no change in the French attitude
toward the debts. France is willing to pay the,
United States what she is supposed to receive from
Germany, and no more, it is said.
HE endless debate on international disarmament was conducted this week both in private
negotiations among leading diplomats and in the
public sessions of the League of Nations Assembly
at Geneva. Long private talks were held over the
last week-end by representatives of Great Britain,
France and the United States at Paris, while further conversations of a like nature were held this
week at Geneva, with Italian and German officials
as additional participants. Aside from indications
that views of these major Powers were drawing
closer, little developed at these gatherings. In the
formal League Assembly sessions great emphasis
was placed by all speakers upon the dire need for
disarmament, and appeals for progress were numerous. Such speeches, however, have been a feature
of Assembly sessions for years. As the representatives of all member States of the League were gathering last Sunday, it was noted by the Geneva corm
spondent of the New York "Times" that some slight
hope of a disarmament agreement prevailed, in contrast with the usual pessimistic attitude of the diplomats. "This hope," said the correspondent, "is
based on the feeling that the situation is now so bad,
and the alternatives to an agreement are so dangerous and widely recognized in high places, that no
government will take the responsibility of a purely
negative policy, and even less of a break-down."
Week-end discussions at Paris were conducted
chiefly by Premier Daladier and Foreign Minister
Paul-Boncour for France, and Stanley Baldwin and
Foreign Secretary Sir John Simon for Great
Britain, with Norman H. Davis of the United States
also a participant for a time. An attempt was made
to bring British and French views of international
armaments supervision closer together, and some
progress was apparently made. France originally
desired a four-year period of regular supervision
before beginning any disarmament on her own account, while Great Britain considered a period of
nine months more in keeping with the situation.
It was reported last Saturday that the British and
French had agreed tentatively upon a three-year
period of inspection, with actual disarmament to be
accomplished in eight years. On this matter Mr.
Davis also was said to be in agreement with British

T

Volume 137

Financial Chronicle

and French representatives. Apparently the question of sanctions and of American consultation was
raised in the discussions, and Mr. Davis is reported
to have repeated President Roosevelt's suggestion
for limited consultation, made last May. Reports
of the Paris conversations appear to have occasioned
some concern in Washington, as Secretary of State
Hull declared last Sunday that the United States
would avoid sanctions, but would throw no bars
across the enforcement of arms treaties by other
Powers.
British and French views on the relatively minor
point of the period of inspection having been reconciled to some degree, attention next was turned to
the infinitely more thorny problem of German and
Italian aims. Alarming rumors reached Paris last
Sunday that Germany would demand the right to
fortify some of her frontiers and to re-arm generally,
and these reports quickly modified the hopes for
disarmament raised by the modest Franco-British
accord. The British Foreign Secretary, Sir John
Simon, talked in Geneva last Sunday with the German Foreign Minister, Baron 'Constantin von Neurath, and is said to have assured him that nothing
was done behind Germany's back in the previous
negotiations at Paris. Full information on the conversations was placed at the disposal of the German
Minister, reports said, and the German press reflected thereafter a somewhat more hopeful attitude,
although nothing was said officially. Nor was anything divulged about a conversation held Monday
between Mr. Davis and Baron von Neurath. Geneva reports about the negotiations indicated that
the Germans were not pushing their demands for
the right to re-arm, as they had been expected to do,
owing to their obvious isolation. French and British spokesmen were reported adamant against
granting Germany the right to re-arm, but the suspicion prevailed in Geneva that they might let the
bars down a little in order to satisfy Chancellor
Hitler and make at least some sort of disarmament
,convention possible.
Italian representatives appeared on the scene
Tuesday, with a compromise proposal designed to
bridge some of the more obvious difficulties in the
way of an accord. Strict reserve was maintained
on the subject of this proposal, but it was reported
in some dispatches that it contemplated the superimposition of the Franco-British suggestions for
armaments inspection upon the MacDonald plan.
Since the latter proposal called for an increase in
German effectives from 100,000 to 200,000, there
were some hopes that this scheme might appeal to
the Reich. The Italian suggestions also provided
for a new definition of defensive armaments, under
which Germany might be permitted to possess pursuit airplanes and other paraphernalia not allowed
under the Versailles treaty, it was rumored. Such
suggestions alarmed the French, however, and intensive discussions continued on the matter in the
hope that all divergencies could be reconciled before
the scheduled meeting of the General Disarmament
Conference on Oct. 16.
Although French and German delegations at Geneva avoided each other persistently early in the
week, arrangements for a direct discussion between
Foreign Minister von Neurath of Germany and Foreign Minister Paul-Boncour of France finally were
made, and these two officials conferred at some
length Thursday. The conversation, a Geneva re-




2321

port to the New York "Times" said, revealed so wide
a difference between them that it is understood they
agreed the best thing to do was for Baron von Neurath to return to Berlin and report to the Cabinet
there. "It was learned authoritatively," an Associated Press dispatch said, "that M. Paul-Boncour
had urged Germany to join the peace move by accepting a four-year trial period which would involve the
control of existing armaments. Thereafter a second
stage would be reached during which the question
of German armaments could be re-opened." Baron
von Neurath is said to have offered counter-proposals, such as an increase in the German army, and
possession of "samples" of tanks and pursuit planes.
M. Paul-Boncour rejected such suggestions, and it
was then decided that the German Minister would
do well to report to his Government. This will probably take a week, it is believed, and no immediate
progress toward a Franco-German understanding
is looked for.
The slight indications of progress with regard to
land disarmament were not duplicated in the naval
sphere. It was made clear in Washington, Tuesday,
that the British Government had suggested modification of the new American ship program, but the
United States Government did not accede to the
request. The State Department made a brief announcement on the matter, as follows: "In reply
to suggestions from the British Government that
the laying down of any six-inch gun cruisers larger
than those now in existence might be deferred during the life of the disarmament conference, or at
least pending further discussion of the qualitative
limitations of future ships, the American Government has replied that it did not see its way clear
to alter its delayed naval construction program or
to suspend the laying down of any projected ships."
The British, it is understood, desire a 7,000-ton limitation for six-inch gun cruisers, as compared with
10,000-ton maximum of the London treaty.
ELEGATES from 64 nations assembled at Geneva, Monday, for the opening of the fourteenth annual session of the League of Nations
Assembly. Disarmament problems, as indicated
above, constituted the chief subject of discussion in
the formal meetings of the large League body, but
the addresses made were of little importance compared with the direct negotiations conducted simultaneously by representatives of the large Powers.
League activities have been pushed steadily into the
background by the developments of recent years and
popular interest in the sessions is waning in all
countries. The League Council met concurrently
with the Assembly and voted, early in the week, to
make a study of public works as a means for relieving unemployment. It was indicated at Geneva,
Tuesday, that Argentina probably will be elected to
membership on the Council, in recognition of the
Argentine Senate's decision of the day before to
join fully in League activities. Denmark and Australia also are likely to get seats on the Council,
it was said.
The Assembly meeting was opened by Premier
Johan Ilowinckel of Norway, in his capacity as
President of the Council. The Norwegian Premier
pleaded in his address, for pacificism in "torn and
divided Europe, where the words equality and fraternity are relics of a bygone age and where even
the most sacred rights of liberty—liberty of thought

D

2322

Financial Chronicle

and personal liberty—are not everywhere secure."
Public opinion is dissatisfied with the League, he
declared, because of its poor record in the Manchurian affair and the Disarmament and Economic
conferences. The large Powers, including the
United States, are responsible for this state of
affairs, Premier Mowinckel said, and he urged them
to reconcile their views and lead the way for the
smaller Powers. Satisfaction was expressed regarding the increasing co-operation of the United States
in League activities, and he expressed the hope that
it would become even closer. "Despite general disillusionment and discouragement, every responsible
person knows that we have in the League a marvelous instrument, and we are bound to do all that
lies in our power to make it strong and effective,"
Premier Mowinckel said. After conclusion of this
address the Assembly proceeded to elect Charles T.
te Water, of South Africa, as its permanent President. Mr. te Water made a brief extemporaneous
address in which he also pleaded for peace. Chief
interest in this initial meeting of the Assembly centered on the spectacular arrival of Dr. Joseph Paul
Goebbels, one of the leaders of Nazi Germany, who
entered the Assembly hall surrounded by a stalwart
bodyguard of young German Nazis.
Sir John Simon, Foreign Secretary of Great
Britain, took up the cudgels for the League in an
address delivered on Tuesday. He emphasized the
need for a disarmament agreement and remarked
that such political issues cannot be kept indefinitely'
in suspense and are not made easier by delay. Defending the League against charges of failure in
political matters, Sir John Simon pointed out that
much valuable technical work had been done by various League Commissions. "The true view," he said,
"is that the nations and governments that compose
the League have not been able even with the help
of its machinery and influence to compose their vital
differences." Dr. Engelbert Dollfuss of Austria
rose to address the Assembly amidst warm applause,
in which German delegates did not join. Without
referring once to the difficulties of his Government
with German propaganda, Premier Dollfuss dedared that his country is determined in "this grave
and troublous time of fratricidal strife" to follow
the path that offers the possibility of independent
existence and economic development. Dutch representatives began a movement for bringing before the
Council and the Assembly the question of the refugees from Germany who are now crowding toward
Holland, Switzerland, France and other lands, and
a formal demand for a League Committee to care
for the refugees was made yesterday. The League
sessions were overshadowed, beginning Wednesday,
by the almost continuous private negotiations on
the disarmament problem.

Sept. 30

1933

in new bonds for every £100 of the 4 % issue.
/
1
2
Those accepting will receive a special interest payment of 27s. 9d. on Feb. 1, and a full half year's
interest on April 1 on the new bonds. The remaining £100,000,000 of the new issue is offered for cash
subscriptions at 94. Funds realized on cash sub_ scriptions will be used to reduce the floating debt,
which has now reached a figure of more than £1,000,000,000. Books were opened on the conversion issue
Thursday, and an excellent response was reported.
Political stability in the United Kingdom is comparable with the financial assurance that has made
possible the long series of important debt conversion operations of the last two years. Small byelections have been the only important developments
since the National Government was organized two
years ago. A contest of this nature brought Prime
Minister Ramsay MacDonald into the political
arena again, and aroused some conjecture regarding the position of the former Labor party leader
in the Cabinet, which is dominated almost entirely
by the Conservatives. Mr. MacDonald asserted late
last week that he remained firmly convinced of the
need for forming a National Cabinet in 1931, and
reiterated that he felt justified in cutting party ties
and joining the Government then organized. Two
years ago the problem facing the Government was
not the distribution of wealth, but the existence of
the wealth itself, he declared. The achievements of
the National Government are especially noteworthy
in the currency field, he said, as the pound "is held
in as much general confidence as the very best and
in very much more than most currencies." There
are also encouraging signs of trade improvement
and a reduction in the unemployment rolls month
by month, the Prime Minister stated. But the work
is not yet finished, Mr. MacDonald added, and he
urged continuance of the National Government. In
a London report to the New York "Times," however,
it was noted that the political plea by the Prime
Minister served only to emphasize his waning influence in British politics. "Quietly but none the less
certainly he is fading from the political scene," the
dispatch said. The Conservatives dominate the
country to-day, and the real job of shaping British
policy is done by the triumvirate of Neville Chamberlain, Walter Runciman and Stanley Baldwin, the
correspondent remarked.

HANCELLOR ADOLF HITLER and his associates in the German Fascist Government are
at length evincing a tendency to modify some of the
onerous restrictions applied by the "totalitarian
State" to make the revolution effective and complete. Dr. Kurt Schmitt, the Nazi Minister of Eco110MiCS, announced Wednesday that discrimination
between "Aryan" and "non-Aryan" business establishments might result in serious harm to the plans
ONTRASTING sharply with the economic and for economic reconstruction, and was impossible to
political uncertainty prevalent in almost all achieve in any event. So long as the owners do not
countries of the world is the confident and assured violate the law or the principles of business ethics,
attitude of the British Government and people. The no ground exists for discriminating against any
admirable economic stability of Great Britain is enterprise, Dr. Schmitt informed the German people.
reflected in a further debt conversion operation, an- Dr. Joseph Paul Goebbels, the Minister of Propanounced by the Treasury on Tuesday. This con- ganda and Enlightenment, agreed with him on this
sists of the public offering of a £150,000,000 loan matter, Dr. Schmitt said. This announcement was
/
1
2
with 2 % coupons, due 1949 and callable 1944. viewed everywhere as an indication that the official
/
1
2
Holders of £50,757,037 4 % Treasury bonds due persecution of Jews in Germany soon will cease.
1934 are offered the opportunity to convert In Berlin reports of Thursday, however, Nazi leadFeb. 7
into the new loan at the exchange rate of £106 7/6 ers were quoted as saying it represented chiefly a

C




C

Volume 137

Financial Chronicle

desire to proceed cautiously. The Nazi program of
building a "pure Aryan State" has not been relinquished, such authorities declared.
But other extremes of Nazi policy also are being
modified. A "purity campaign" of Nazi Storm
Troops, which aimed at preventing women from
smoking or powdering their faces, was vigorously
denounced last Sunday by Colonel Ernst Roehm,
leader of the Hitlerite army. Chancellor Hitler
issued a brief announcement Thursday, in which he
condemned "all unatithorized and illegal revolutionary activities." In Geneva Dr. Goebbels spoke
on several occasions this week to groups of Journalists in defense of the Nazi regime, but he never referred to the League of Nations and did not address
the Assembly. The trial of five men in Liepzig on
charges of treason and incendiarism proceeded this
week without any startling developments. The four
Communists stoutly maintained they were not implicated in any way in the Reichstag building fire
on Feb. 27, while Manaus Van der Lubbe, who is
termed a Communist by the Nazis and an agentprovocateur by the Communists, admitted his guilt
before the Supreme Court yesterday.
RESIDENT RAMON GRAU SAN MARTIN reP tained this week his precarious hold on the
Government in Cuba, but in every dispatch from
lIavana it was emphasized that no progress whatever is being made toward solving the political and
economic problems of the country. Political leaders conferred every day in the effort to arrange a
coalition regime, as it is reported that the present
Government enjoys the confidence of only a small
minority of Cubans. The aim remains unrealized,
and in the meantime some of the more extreme elements appear to be taking matters into their own
hands. A huge demonstration of Communists was
staged in Havana, Tuesday, and the incident caused
much concern in responsible circles. The students,
who are among the chief supporters of President
Gran San Martin, are believed to be turning toward
Communistic ideas. In the interior small armed
groups are being organized everywhere, and in most
cases they are roaming the countryside inciting the
workers on plantations and in mines and mills to
join them in a revolt against the owners and operators. A general strike throughout the Island is
now believed possible, as a result of Communist
efforts to oust the President and set up a Soviet.
"The chance that Cuba can save herself from and 'thy is now so remote that it may almost be dismissed," a Havana dispatch to the New York
-Times" states.

2323

cow that Manchukuo, under Japanese instigation,
was preparing changes in the administration of the
railway which would virtually render Soviet representatives powerless. The Russian Government,
according to the note, considers Japan "the real
master in Manchuria," whereas Manchukuo is "powerless and incapable of answering for events." Moscow insisted that Japan "must assume direct responsibility for all violations of treaties on the Chinese Eastern Railway, as well as for the seizure of
the railway now being prepared."
The Chinese Eastern was built with Russian funds
supplied by the Czarist regime, and the covering
treaty provided for joint Sino-Russian management.
In view of the many difficulties which part ownership of the road caused to the present Soviet Government, negotiations for sale of the line to the
Manchukuan Government were initiated early this
year, but they have dragged on in true Oriental
fashion without apparent progress. The discussions for the sale have taken place exclusively in
Tokio between Russian representatives and Japanese officials who ostensibly are acting for Manchukuo. In a Tokio dispatch of last Saturday to
the New York "Times" it was indicated that the
Russians now are asking 200,000,000 gold rubles,
while Japan-Manchukuo is offering hardly more
than a tenth of this sum. The negotiations have
reached a "critical stage," the report states, and
it is quite possible that the rumored Manchukuan
aims are intended to occasion further reductions in
the Russian asking price.
—•-HURRICANE in 'Mexico and an earthquake in
Italy caused numerous deaths this week, and
destruction on a scale that surpassed even that
occasioned by tempests along our own coast recently. Three-fourths of the City of Tampico, Mexico's greatest oil part, was reduced to ruins Monday
by a hurricane that attained a velocity of nearly
150 miles an hour. More than 50 deaths were caused
by the wind and the waters that were driven inland
under its fury, while more than 850 persons were
injured. Twenty thousand families in the city itself
and the surrounding territory were rendered homeless. No Americans were killed or injured, while
damage was done mainly to wooden buildings in
the port and to railway lines. Martial law was
declared to control the terror-stricken inhabitants,
and extensive relief activities were hastily organized by the Mexican Government under the personal
direction of President Abelardo Rodriguez. The
earthquake in Italy occurred in the small hours of
Tuesday, and reports reaching Rome late the same
day indicated that 19 persons were killed and more
than 200 injured. The epicenter of the earthquake
was placed in the Abruzzi Mountain region, and
damage was heaviest in the towns of that area.

A

OFFICIAL communication couched in unusually strong terms was addressed by the
Soviet Government of Russia to the Japanese Foreign Office, late last week, in protest against alleged
plans of Manchukuan authorities to eliminate the
HE Bank of England statement for the week
last traces of Russian control over the Chinese
ended Sept. 27 shows a gain of £34,203 which
Eastern Railway. The note reflects the unrelieved brings the total up to a new high mark at L191,766,tenseness of the diplomatic situation created in the 643; last year the total was only £140,397,380. As
Far East by the Japanese conquest of Manchuria this gain in gold was attended by an expansion of
and the formation of the puppet State of Manchu- £284,000 in note circulation, reserves fell off £249,000.
kuo. Quite possibly, however, it is also to be inter- Public deposits decreased £1,730,000 and other
preted in the light of the current negotiations for deposits £7,818,783. The latter consists of bankers'
sale of the 1,000-mile railway to Manchukuo. The accounts which decreased £8,353,807 and other
Russian note, published without comment in Moscow accounts which increased £535,024. The reserve
on Sept. 22, was sent after information reached Mos- ratio rose to 51.34% from 48.56% a week ago; a




T

Financial Chronicle

2324

Sept. 30 1933

year ago the ratio was 40.46%. Loans on governHE Bank of Germany statement for the third
ment securities fell off £6,830,000 and other securities
quarter of September shows a further increase
£2,464,742. Of the latter amount £1,934 was from in gold and bullion, this time of 16,154,000 marks.
discounts and advances and £2,462,808 from securi- The Bank's gold stands now at 354,220,000 marks
ties. No change was made in the 2% discount rate. in comparison with 781,599,000 marks last year and
Below we show the different items with comparisons 1,374,409,000 marks the previous year. Reserve in
foreign currency, bills of exchange and checks, adfor five years:
BANK OF ENGLAND'S COMPARATIVE STATEMENT.
vances and investments record decreases of 11,144,000
marks, 100,729,000 marks, 20,120,000 marks and
Oct. 2
Oct. I
Sept. 30
Sept. 27
Sept. 28
1929.
1930.
1932.
1931.
1933.
83,000 marks respectively. Notes in circulation
£
E
E
E
£
r tom
reveal a decline of 75,793,000 marks the total of
370.754,000 359,784,231 357,208,682 359.386,483 363.347,695
Circulation_ a
8,992,562
16,488,000 23.417,643 30.069,090 21.645,391
Public deposits
0,534 114,023,631 115,206,969 96,107,056 102.951.560
which is now at 3,307,951,000 marks. Last year
141,23
Other deposits
6
Bankers'accounts_ 97,334,183 80,626,456 62,642,21 9 61,317,731 64,909,909
0
43,956.411 33,397,175 52,564,66 34.789,325 38,041.851
Other accounts
circulation aggregated 3,504,592,000 marks and the
73,825,963 69.918,094 68,975,906 44,536,247 73.766.855
Govt. securities
21.176,346 30,141,762 40,649,326 34,074,346 29,481,955
Other securities
previous year 4,173,886,000 marks. An increase
9,190,293 12,069,350 14,773,556 11,916,677 8,507.649
Disct.& advances_
11,986,056 18,072,412 25,875,770 22,157,689 20,974.306
Securities
appears in silver and other coin of 32,564,000 marks,
Reserve notes & coin 81,014,000 55,613,149 53,951,012 57,416,844 26,995,893
191,766.643 140,397,360 136,159,694 156,803.327 130,343.538
Coln and bullion
in notes on other German banks of 2,028,000 marks,
24.11%
48.76%
37.13%
51.34%
40.46%
Propor.of res. to liab.
61561
307.
661
4
20
7.
20
13nnk rnta/
in other assets of 29,466,000 marks, in other daily
a On Nov. 29 1928 he fiduciary currency was amalgamated with Bank of England
note issues adding at that time £234,199,000 to the amount of Bank of England
maturing obligations of 18,345,000 marks and in
notes outstanding.
other liabilities of 5,584,000 marks. The proportion
HERE have been no changes during the week of gold and foreign currency to note circulain the discount rates of any of the foreign tion stands at 12.2% in comparison with 26.5%
central banks. Present rates at the leading centres a year ago and 40.1% two years ago. Below we
are shown in the table which follows:
furnish a comparison of the various items for three
DISCOUNT RATES OF FOREIGN CENTRAL BANKS.
years:

T

T

Country.

Rate In
Date
Effect
Sep129 Established.

Austria_ ___
Belgium .
Bulgaria_ _ _
Chile
Colombia. _
Csechoslovakla_ _ _
Danzig_ _ ._
Denmark _ _
England_ _ _
Estonia__
Finland__
France _ _
.Germany..
Greece
Ilnlland1

Pre!nous
Rate.

Mar. 23 1933
5
314 Jan. 13 1932
814 May 17 1932
414 Aug. 23 1932
July 18 1933
4

6
24
9)4
bIS
5

Jan. 25 1933
July 12 1932
June 1 1933
June 30 1932
Jan. 29 1932
Sept. 5 1933
Oct. 9 1931
Sept 31 1932
May 29 1933
Sent. 18 193.3

414
5
31.4
234
6)4
514
2
5
9
3

34
4
3
2
534
5
234
4
74
2W

Country.

Rate in
Date
Effect
Sept 29 Established.

Hungary.._
India
Ireland__,
Italy
Japan
Java
.
1.1th uanla _
Norway. _ Poland _ ___
Portugal__
Rumania __
South Africa
Spain
Sweden_ _
Switzerland

4)4
34
3
34
3.65
414
7
34
6
8
6
4
6
3
2

PreMous
Rate.

Oct. 17 1932 5
Feb. 111 1933 4
June 30 1932 34
Sept. 4 1933 4
July 3 1933 4.38
Aug. 16 1933 5
May 5 1932 734
May 23 1933 4
Oct. 20 1932 734
Mar. 14 1933 834
Apr. 7 1933 7
Feb. 2111)33 5
Oct. 22 1932 61.4
June 1 1933 334
Jan. 22 1931 254

REICHSBANK'S COMPARATIVE STATEMENT.
Changes •
Sept. 23 1933. Sept. 23 1932. Sept. 23 1931.
for Week.
Assets—
Gold and bullion
Of which depos. abroad_
Reserve in foreign cure.
Bills of exch. and checks
Silver and other coin._
Notes on other Ger. bks.
Advances
Investments
Other assets
Liabilities—
Notes In circulation-Other daily matur. oblig
Other liabilities
Propor.of gold & foreign
elm tn nntn riretil'n

Relchsmarks. Relchsniarks. Re:Om:arks. Relchsnuirks.
+16,154,000 354,220,000 781,599,000 1.374,409.000
99.551,000
78,779,000
63.351,000
No change.
603.000
47,758.000 146.241.000 297,
—11.144,000
—100,729.000 2.962,115.000 2,689,675,000 3,003.317,000
+32.564.000 268.496.000 266,429,000 124,566,000
12,243,000
12.067.000
14.238.000
+2,028.000
66,787.000 102,525,000 141,165,000
—20.120,000
—83,000 319,832,000 362,359,000 103.075,000
+29.466.000 538,588,000 794,804.000 933,140.000
—75.793.000 3,307.951.000 3,504,592.000 4,173,886.000
+18,345.000 407.864.000 357,960.000 540.291,000
+5.584.000 231,068,000 725.741,000 788.232,000
4-11 tot

12207.

26.561

1.
40.16

In London open market discounts for short bills
on Friday were 3/2@9-16%, as against %% on FriHE New York money market remained extremely
day of last week and 9-16% for three months' bills,
easy this week under the continual outpouring
as against %@7-16% on Friday of last week. Money
on call in London yesterday was /%. At Paris the of credit by the Federal Reserve banks, through open
open market rate remains at 23.1% and in Switzer- market operations. Call loans on the New York
3
Stock Exchange were 4% for all transactions of the
land at 13/2%.
week, whether renewals or new loans. In the unHE Bank of France in its statement for the week official street market call loans were reported arranged
ended Sept. 22 reveals a decline in gold holdings at M% Monday,/ Tuesday, and again at M% in
5 3%
of 57,152,363 francs. The total of gold holdings is all subsequent sessions. Time loan rates were unnow at 82,204,446,560 francs in comparison with changed, and there were also no variations in charges
82,621,794,767 francs last year and 59,346,170,306 on bankers' acceptances or commercial paper. An
francs the previous year. An increase appears in issue of $75,000,000 in 91-day Treasury discount bills
c.eedit balances abroad of 3,000,000 francs, in French was awarded, Monday, at an average discount of
commercial bills discounted of 580,000,000 francs 0.1%, which is the cheapest figure ever recorded
and in creditor current accounts of 741,000,000 except on a single issue sold last December at 0.09%.
francs while advances against securities is off 23,000,- Brokers' loans. against stock and bond collateral de000 francs. Notes in circulation show a contraction creased $19,000,000 in the week to Wednesday night,
of 406,000,000 francs reducing the total of notes according to the usual statement of the Federal
outstanding to 81,017,810,575 francs. Circulation Reserve Bank of New York.
a year ago stood at 80,200,291,100 francs and two
years ago at 78,173,081,590 francs. The proportion
EALING in detail with call loan rates on the
of gold on hand to sight liabilities is now at 79.59%
Stock Exchange from day to day, Yi% has
as against 76.87% last year and 57.02% the year
various been the ruling quotation all through the week for
before. Below we furnish a comparison of the
both new loans and renewals. The market for time
items for three years:
money has been at a standstill this week, no transacBANK OF FRANCE'S COMPARATIVE STATEMENT.
tions of note having been reported. Rates are
Changes
Sept. 221933. Sept. 23 1932. Sept. 251931.
for IVeek.
nominal at M% for 30 days, M@N% for 60, 90
Francs.
Francs.
Francs.
Francs.
and 120 days, %@1% for five months, and 1@13.4%
—57,152.364 82.204.446.560 82,621.794,767 59,346,170.306
Gold holdings
+3.000.000 1,288,483.166 2.911.834.38112.363,636.450
Credit bats. abroadfor six months. The market for commercial paper
•French commercial
bills discounted._ +580,000.000 3.184.529.526 3.622.438,541 5.880.429,273
showed up considerably this week, though transac1,345.765,409 2,081,338.660 12,829,950,505
b Bills bought abr'd Unchanged.
—23.000.000 2.738,706,445 2,752.065,602 2,754,051,284
Adv. against securs_
tions have been moderately active. Rates are 13/2%
Note circulation. _ _ _ —.406,000.000 81,017.810.57580.200,291.100 78,173,081,590
Credit current accts. +741.000,000 22.267.490.278 27,281,084,882 25.898.883.528
for extra choice names running from four to six
Propor. of gold on
57.02%
79.59%
76.87%
—0.32%
hand tn ataht nab_
4
months and 13 % for names less known.
Includes bills purchased in France. b Includes bills discounted abroad.

T

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D

a




Financial Chronicle

Volume 137

acceptances have
THE market for prime bankers' the week. There
been moderately brisk during
has been a

modest increase in bills available but
transactions slowed up the latter part of the week.
Rates are unchanged. Quotations of the American
Acceptance Council for bills up to and including 90
days are %% bid, and h% asked; for four months,
%% bid and M% asked; for five and six months,
% bid and h% asked. The bill buying rate of the
New York Reserve Bank is 1% for bills running from
1 to 90 days, and proportionately higher for longer
maturities. The Federal Reserve banks' holdings
of acceptances decreased during the week from
86,932,000 to 86,681,000. Their holdings of acceptances for foreign correspondents also decreased
during the week, dropping from
6,701,000 to
$42,407,000. Open market rates for acceptances
are as follows:
SPOT DELIVERY.
—180 Days— —150 Days-- —120 Days—
Asked.
Bid.
Bid.
Asked.
Bid.
Asked.
Prime eligible bilis
Si
St
Si
Si
Si34
—90Days— —60Days— —30Days—
Asked.
Bid.
Asked.
Bid.
Bid.
Asked.
Prime eligible bills
34
34
34
,f
34
34
FOR DELIVERY WITHIN THIRTY DAYS.
Eligible member banks
% bid
Eligible non-member banks
% bid

been no changes this week in the
THERE have rates of the Federal Reserve banks.
rediscount
The
of rates

now in effect
following is the schedule
for the various classes of paper at the different Reserve banks:
DISCOUNT RATES OF FEDERAL RESERVE BANKS.

Federal Reserve Bank.
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

Rate Ps
Erred on
Sept. 29.

Date
Established.

Previous
Rate.

3
234
3
3
334
334
3
3
334
334
3.4
3

June 1 1933
May 26 1933
June 8 1933
June 10 1933
Jan. 25 1932
Nov. 14 1931
May 27 1933
June 8 1933
Sept. 12 1930
Oct. 23 1931
Jan. 28 1932
June 2 1933

334
3
334
334
4
3
334
334
4
3
4
34

CTERLING exchange is steadier and has fluctuated
within comparatively narrow limits, in contrast
to the spectacular gyrations of last week. The pound
is still firm in terms of dollars, but has receded
greatly from the high point of 4.853/ registered last
week. Sterling is easy with respect to French francs
and the gold currencies of Europe. What really
happened is that the United States dollar has firmed
up gradually against the gold currencies from the
low point of 64.5 on Friday of last week to 66.3.
Foreign exchange traders say that business has been
limited in all markets, with transactions apparently
confined chiefly to normal business requirements.
Speculative forces seem for the moment quiescent.
The range for sterling this week has been between
4.6934 and 4.79 for bankers' sight bills, compared
with a range between 4.68% and 4.85h last week.
The range for cable transfers has been between 4.69%
and 4.793/i compared with a range between 4.6834
and 4.853/ a week ago. The weakness of sterling in
terms of gold may be judged from the London check
rate on Paris, which has been below 80 all week,
indicating that the Exchange Equalization Control
of London is apparently making no serious attempt
to hold the pound to any fixed ratio to Paris, or gold.
Only a few months ago it was apparent that the
London authorities were bent on keeping the pound
around 85 francs. A few weeks later the rate was
allowed to drop gradually to around 80, which level
was believed to constitute a new peg.




2325

Owing largely to the uncertainties as to dollar
exchange the Equalization Fund is finding it increasingly difficult to hold sterling at any fixed relationship to Paris. When on the gold basis the par of
sterling with respect to francs was 124.21. At this
season of the year the rate ordinarily fluctuated between 124 and 126 francs to the pound. The tables
immediately following give the London check rate on
Paris day by day and the mean gold quotation for
United States dollars in Paris:
LONDON CHECK RATE ON PARIS.
Saturday Sept. 23
Monday Sept. 25
Tuesday Sept. 26

78.937 'Wednesday Sept. 27
Thursday Sept. 28
79.34
Sept. 29
Friday
79.34

79.656
79.85
79.437

MEAN GOLD QUOTATION U. S. DOLLAR IN PARIS.
Saturday Sept. 23
Monday Sept. 25
Tuesday Sept. 28

64.7 'Wednesday Sept. 27
85.4 Thursday Sept. 28
Sept. 29
65.7 Friday

66.2
66.3
65.6

There is essentially nothing new in the foreign exchange situation from that prevailing for many weeks.
The subsidence of speculative drives is doubtless
only temporary. Surplus capital is everywhere extremely nervous and is still strongly inclined to seek
shelter wherever safety offers. There is for the time
being a pause in the outward movement probably
because all markets are rife with rumors that a positive pronouncement by President Roosevelt on monetary policy is about to be made. Up to the moment
of writing no indication of an official nature has been
given, but while markets everywhere are awaiting a
statement, there has been much discussion of the
feasibility of various plans of inflation, including
that of lowering the gold content of the dollar. For
the time being the sound money forces seem to be
gaining strength both here and abroad. Prime
Minister MacDonald in a recent speech at Kilmarnock asserted that it was Great Britain's determination to keep the pound stabilized, and criticized the
fluctuations of the American dollar abroad. He said:
"The currency of Great Britain is held in much general confidence as the very best, and in very much
mote confidence than most currencies. Trade is
showing signs which bid us hope. We have got
prices rising. Prices ought not to be encouraged to
be low if such lowness gains by someone being underpaid." However, there is a strong body of opinion
both here and abroad which is inclined t9 believe that
the stabilization of currencies on the gold basis may
be deferred for a much longer period than is generally
expected. Such views hold that many other adjustments must take place before we can hope for stabilized currencies on the gold basis. Thomas F. Woodlock, writing from London for the "Wall Street
Journal," discusses the conservative British view as
voiced by Professor J. H. Jones (Chair of Economics
at Leeds University) at a meeting of the British
Association, to the effect that for a general return to
the gold standard the following requirements must
be met:
First—There must be some kind of practical equilibrium in the trade of the various nations with each
other, the distribution of this trade being determined
in the main by costs of production and (reasonably
stable) tariff policies, and changes in this distribution
being rather gradual.
Second—The savings of people generally must in
the main flow into long-term permanent investment
SO that the amount of "liquid' capital does not grow
out of proportion.
Third—The long-term investments of each country
should be appropriate to and correlate with their
industrial structures.

2326

Financial Chronicle

Fourth-Tariffs must not be used to correct temporary clisequilibriums in the balance of international
payments.
Fifth-There must be somewhere a central bank or
reservoir which can mobilize the liquid credit and
direct it to wherever it may be needed.
Mr. Woodlock says that all these conditions were
present in greater or less degree before the war and
that none are present to-day. In closing his analysis
he asks: "Can anyone see much chance of this sort
of thing being within the range of any 'practical'
politics in the world today? This writer hardly
expects to live to see it!"
An important feature bearing on the immediate
future of sterling exchange and the London money
market was the announcement this week from London
on Tuesday that the British Government is offering
a £150,000,000 23/2% conversion loan. Part of the
loan will be devoted to the redemption of 43/2%
Treasury bonds of 1934, of which £50,000,000 are
outstanding. This will leave £100,000,000 to be
devoted to funding the floating debt. The total
floating debt of the British Treasury on Sept. 16
amounted to £1,022,205,000. The new conversion
loan will permit the refunding of about 10% of the
total, which still leaves a far larger floating debt than
usual, but included in the total is £350,000,000 which
has been borrowed by the Exchange Equalization
Fund and which has not been offered on the market.
After the funding of £100,000,000 and excluding the
£350,000,000 Equalization Fund, there will be approximately £650,000,000 floating debt in the market. It is considered that this amount is necessary
for the London money market, as there is a great
demand there for short-term prime investments which
under present conditions of world business depression
cannot be filled by commercial bills, and it is considered in London only right that the Treasury bill
should fill the gap. Although capital is leaving
London and going to France, Holland, and Switzerland in search of refuge, there is a large offsetting
movement of foreign capital into London whose
owners look upon Great Britain as the safest place of
deposit. Some of this capital is even moving from
France, Holland and Switzerland into London.
There is .continuous selling abroad of American
securities by foreign holders. Much of the large
accumulation of gold in the London open market
which from week to week is taken for Continental
account is held on deposit by London bankers. How
much is so held is never disclosed. It is variously estimated that American capital seeking safety in
London amounts to from $500,000,000 to $1,000,000,000. The superabundance of idle funds continues
to be reflected in the London open market money
rates, which remain practically unchanged from
week to week, though at present slightly firmer than
last week. Rates are expected to recede again
immediately. Call money against bills was in supply
1
at 4% to %%,two-months' bills at 7-16% to %%,
three-months' bills %% to 9-16%,four-months' bills
3
%% to 11-16%, and six-months' bills 4% to %%.
Gold continues to flow to the London open market
from all parts of the world and prices as expressed in
shillings and pence are at record high levels.
On Saturday last £460,000 was taken foe the Continent at a premium of 73'd. On Monday £400,000
was available and was taken for Continental account
2
at a premium of 73/d. On Tuesday £300,000, the
entire available supply, was taken for the Continent




Sept. 30

1933

at 73d. premium. On Wednesday £380,000 available was taken for the Continent at a premium of
103'd. On Thursday £660,000 was available and
was taken for an undisclosed destination at a premium
of 63/2G. Yesterday £330,000 was taken for Continental account at a premium of 8d. The following
tables give the London open market gold price from
day to day and the Mee paid for gold by the United
States Treasury:
LONDON OPEN MARKET GOLD PRICE.
Saturday Sept. 23
133s. 7d. Wednesday Sept. 27 __.._133s. Od.
Monday Sept. 25
132s. 9d. Thursday Sept. 28_ __ ___132s. 4d.
Sept. 29____....133s. Od.
Tuesday Sept. 26
133s. 2d. Friday
PRICE PAID FOR GOLD BY U. S. TREASURY.
31.35
31.75 I Wednesday Sept. 27
Saturday Sept. 23
31.05
Monday Sept. 25____ ______31.30 Thursday Sept. 28
31.33
Sept. 29
31.49 Friday
Tuesday Sept. 26

This week the Bank of England shows an increase
in gold holdings of £34,203, the total standing at
£191,766,643 on Sept. 27, which compares with
£140,397,380 a year ago, and with the minimum of
$150,000,000 recommended by Cunliffe committee.
At the Port of New York the gold movement for
the week ended Sept. 27, as reported by the Federal
Reserve Bank of New York, consisted of exports of
$18,831,000, of which $16,666,000 was shipped to
France and $2,165,000 to Holland. There were no
gold imports. The Reserve Bank reported a decrease
of $16,666,000 in gold earmarked for foreign account.
The Reserve Bank reported the export of 44,029
ounces of gold recovered from natural deposits. In
tabular form the gold movement at the Port of New
York for the week ended Sept. 27, as reported by the
Federal Reserve Bank of New York, was as follows:
GOLD MOVEMENT AT NEW YORK SEPT. 21--SEPT. 27, INCL.
Exports.
Imports.
816.666.000 to France.
2,165,000 to Holland.
None.
818,831,000 total.
Net Change in Gold Earmarked for Foreign Account.
Decrease: $16,666,000.
Exports of Gold Recovered from Natural Deposits.
44,029 fine ounces.

The above figures are for the week ended Wednesday evening. On Thursday there were no imports
or exports of the metal or change in gold held earmarked for foreign account. On Friday there were no
imports of the metal, but $6,941,500 was withdrawn
for export, $6,666,700 of which was shipped to France
and $274,800 to England. Gold earmarked for foreign account decreased $6,941,500. There was also
exported 24,331 fine ounces of gold recovered from
natural deposits. There have been no reports
during the week of gold having been received at any
of the Pacific ports.
Canadian exchange continues at a discount. On
Saturday last, Montreal funds were at a discount of
23'%, on Monday at 23%, on Tuesday at 2%%,
on Wednesday at 2%%, on Thursday at 23/2% and
on Friday at 2 1-16%.
Referring to day-to-day rates, sterling exchange on
Saturday last was steady in dull trading. Bankers'
sight was 4.78 ® 4.79; cable transfers 4.78% ®
4.783. On Monday the pound was easier. The
range was 4.73 ® 4.769/s for bankers' sight and
4.733/i ® 4.763/i for cable transfers. On Tuesday
the range was narrow in dull trading. Bankers'sight
was 4.7332 © 4.753; cable transfers 4.7334
4.753%. On Wednesday the pound again moved
lower as the U. S. dollar firmed up. The range was
4.711 ® 4.733/i for bankers' sight and 4.7134
4
4.73% for cable transfers. On Thursday sterlsi
was steady. The range was 4.6934_®,..4.72% for

Volume 117

Financial Chronicle

2327

bankers' sight and 4.697 ® 4.737 for cable trans- of 354,220,000 rm., an increase over the previous week
A
fers. On Friday sterling recovered; the range was of 16,154,000 rm. Dispatches from Berlin on Thurs4.72 @ 4.757 for bankers' sight and 4.727 @ 4.76 day stated that the scrip system providing for
A
for cable transfers. Closing quotations on Friday partial payment of coupons on German loans was
were 4.755 for demand and 4.76 for cable transfers. declared effective as of Oct. 1. It is understood that
A
Commercial sight bills finished at 4.753.; 60-day bills the Reichsbank has agreed to provisions of the
at 4.747; 90-day bills at 4.743; documents for pay- American Federal Securities Act in connection with
ment (60 days) at 4.74%, and seven-day grain bills issuance and registration of the scrip, w'lich will be deat 4.7534. Cotton and grain for payment closed livered to bondholders in partial payment of coupons
on German obligations except the Dawes Plan,
at 4.75%.
Young Plan, and the so-called potash loan. BondXCHANGE on the Continental countries al- holders will receive 50% of the cash value of the
though receding from the high points of last coupons as provided by the plan, plus an additional
week continues firm in terms of the dollar and 50% through acceptance of the scrip, which may be
sterling. French francs, the leading gold bloc unit, resold to the German Gold Discount Bank at half
are weak against a number of the Continentals, its face value.
largely as a seasonal matter. France has been partItalian lire continue firm and generally display
ing with gold not only to Holland and Switzerland, less fluctuation than almost any of the Continental
but to some of the minor markets. It will be recalled currencies. Milan dispatches state that the revitalithat expressed in dollars the franc closed on Friday zation of financially clogged companies in Italy is
of last week at 6.089 for cable transfers. Yesterday making substantial progress under the auspices of
the closing price was 6.0134. The par of the franc the Italian Industrial Reconstruction Institute. It
is 3.92. The firmness of the franc with respect to is'stated as an eveidence of the progress which Italy
sterling may be judged by the fact that the London is making in bringing her international payments
check rate on Paris closed yesterday at 79.53, which into equilibrium that the current foreign trade
compares with 78.97 on Friday of last week and with returns indicate a good possibility that the visible
the gold par of 124.21 francs to the pound. The import trade balance for 1933 will be less than
weakness of the pound in terms of the franc is at- 1,000,000,000 lire for the first time since the War.
tributed in Paris to seasonal factors such as raw
The London check rate on Paris closed on Friday
material purchases for English industry. In Paris at 79.53, against 78.97 on Friday of last week. In
the conviction is strong that the pound will not be New York sight bills on the French centre finished on
allowed to depreciate unduly with respect to the Friday at 6.00%, against 6.087 on Friday of last
franc rate and that the British authorities will not week; cable transfers at 6.0134, against 6.08%, and
permit such gyrations in the pound as would injure commercial sight bills at 6.007, against 6.077.
the solidarity of the gold bloc currencies. Paris Antwerp belgas finished at 21.43 for bankers' sight
awaits anxiously some positive pronouncement as to bills and at 21.44 for cable transfers, against 21.69
American monetary policy. As noted above, the and 21.70. Final quotations for Berlin marks were
Federal Reserve Bank reports a shipment of $16,666,- 36.64 for bankers' sight bills and 36.65 for cable
000 gold to France. The general opinion in foreign transfers, in comparison with 37.14 and 37.15.
exchange circles is that this gold represents earmarked Italian lire closed at 8.07 for bankers' sight bills and
stock gold by the British Equalization Fund to the at 8.08 for cable transfers, against 8.147 and 8.15.
Bank of France or shipped to Paris by the British Austrian schillings closed at 17.25, against 17.40;
control, for deposit there to support sterling exchange exchange on Czechoslovakia at 4.56, against 4.61
when and where necessary. But no positive infor- on Bucharest at 0.927, against 0.93; on Poland at
mation can be obtained respecting central bank ear- 17.18, against 17.40, and on Finland at 2.15, against
marked gold operations. Nor do the European 2.19. Greek exchange closed at 0.87 for bankers'
central banks publish details of gold shipments. sight bills and at 0.877 for cable transfers, against
The best bankers can do is to deduce what has taken 0.87 and 0.877.
place from the various weekly bank statements.
Some of this British earmarked stock which has been
XCHANGE on the countries neutral during the
going to Paris constantly since March and which now
war follow much the same trends as have been
amounts to approximately $202,000,000 undoubtedly in evidence for many weeks. The guilder position is
does go to the Bank of France, for it is well known much stronger and Amsterdam seems to be enjoying
that Paris has been sending gold to other European complete recovery of confidence. For the past few
countries constantly in the past few months without weeks there has been a steady flow of foreign funds to
any appreciable diminution in the Bank's own gold Holland, which has been drawing gold from Paris.
holdings. The Bank of France statement for the The latest weekly statement shows an increase in
week ended Sept. 22 shows a decrease in gold hold- gold holdings of 12,000,000 gu;lders, bringing the
ings of fr. 57,152,364 the total standing at fr. 82,204,- total gold stocks to more than 841,000,000 guilders,
446,560, which compares with fr. 82,621,794,767 a or a gold coverage of 94%. Holland is glutted with
year ago, and with fr. 28,935,000,000 in June, 1928, idle funds seeking liquid investment and it is generally
when the unit was stabilized.
believed that The Netherlands Bank will make a
German marks are quoted exceptionally firm in further reduction in its rediscount rate, which now
terms of dollars, but mark exchange is largely nominal stands at 27%. It was marked down on Sept. 18
owing to restrictions enforced by Reichsbank control. from 3%. In June, when speculative attacks were
Every week brings new evidence of the Reichsbank's active against the guilder, the bank rate was raised
attempt to build up its gold reserves. Most of this to 47%. The steady reduction in the rate since
gold seems to be taken from France, while some of it June 29 have done much to alleviate nervousness,
comes from Russia. The Reichsbank statement for even though there have been some sporadic outbursts
the week ended Sept. 23 shows total gold holdings since that time. Swiss guilders are also strong, es-

E




E

2328

Sept. 30 1933

Financial Chronicle

pecially against francs, and much gold and foreign Treasury the buying rate for cable transfers in the
funds have been flowing to the Swiss centres in recent different countries of the world. We give below a
weeks. The Scandinavian currencies move with record for the week just passed:
sterling, to which they are attached. Spanish pesetas FOREIGN EXCHANGE RATES CERTIFIED BY FEDERAL RESERVE
BANKS TO TREASURY UNDER TARIFF ACT OF 1922.
are steady, though of minor importance in this marSEPT. 23 1933 TO SEPT. 29 1933, INCLUSIVE.
in
ket. The peseta is strongly inclined to move
Noon Buying Rate for Cable Transfers in New York.
sympathy with the French franc.
Value In United Stales Money.
Country and Monetary
Unit.
Bankers' sight on Amsterdam finished on Friday at
Sept.23. Sept.25. Sept. 26. Sept.27. Sept.28. Sept.29.
S
8
$
S
$
S
EUROPE61.84, against 62.74 on Friday of last week; cable
.173000 .169937 .171250 .170250 .169550 .170500
Austria,schilling
.215961 .213200 .212772 .210730 .210323 .212463
Belgium, belga
at 61.85, against 62.75, and commercial B
transfers
.013750* .012000* .011750* .013000* .012750* .013250*
ilgaria, ley
sight bills at 61.60, against 62.60. Swiss francs Czechoslovakia, krone .046000 .045285 .045357 .044950 .044735 .045162
.213340 .212045 .211891 .210658 .210366 .211572
Denmark, krone
closed at 29.79 for checks and at 29.80 for cable trans- England. pound
.785583 4.748303 4.741416 4.720892 4.710750 4.734484
sterling
.021183 .021016 .021020 .020916 .020900 .021050
fers, against 30.11 and 30.12. Copenhagen checks Finland, markka
060639 .059839 .059628 .059126 .059089 .059613
France,franc
.370058
finished at 21.27 and cable transfers at 21.28, against Germany, retchsmark .008716 .364430 .364640 .361192 .359978 .363457
.008600 .008615 .008518 .008504 .008630
Greece,drachma
.625109 .616736 .615250 .610138 .608991 .614276
Holland,
21.42 and 21.43. Checks on Sweden closed at 24.59 Hungary,guilder
.272166* .270500 .270333 .269166 .268166 .270000
pengo
.081263 .080273 .080336 .079525 .079311 .080000
and cable transfers at 24.60, against 24.75 and 24.76; Italy, lirakrone
.240136 .238616 .238175 .237125 .236709 .238060
Norway,
Poland,zloty
.173400 .170700 .172375 .170000 .170250 .171200
and cable Portugal,escudo
while checks on Norway finished at 23.94
.046700 .046033 .046316 .046012 .045966 .046133
Rumania.leu
.009300 .009266 .009000 .009050 .009125 .009300
24.12. Spanish Spain. peseta
transfers at 23.95, against 24.11 and
.129357 .127792 .127646 .126535 .126085 .127357
.248220 .244690 .244636 .243416 .242791 .244336
Sweden.krona
.295136
.295366
pesetas closed at 11.303/ for bankers' sight bills and Switzerland, franc .299815 .295584 .020700 .292575 .292500 .020900
.020475 .020733
Yugoslavia. dinar
.020966 .020766
ASIAat 11.31 for cable transfers, against 12.993/i and 13.00. ChinaCbefoo (Yuan) dol'r .305208
Hankow (yuan)don. .305208

.303750
.303750

.305000 .300833
.305000 .300833

.301875
.301875

.302708
.302708

Shanghai(yuan)dol'r .306093 .304375 .305625 .301562 .302656 .303593
XCHANGE on the South American countries
Tientsin (yuan)doll- .305208 .303750 .305000 .300833 .301875 .302708
.339218
.336718
Hong Kong
.340625
presents no new features of importance. So far India, rupee dollar .358800 .339062 .339843 .354200 .338437 .355156
.353750
.355900 .356605
278375 .277375 .270956 .278187 .277650 .278500
as New York is concerned there is practically no Japan. yen
Singapore (5.5.) dolls .556250 .550000 .552500 .551250 .547500 .551875
A USTRA LAS1Amarket in South American currencies. All quota- Australia, pound
3.800000 3.774166 3.772291 3.758541 3.747500 3.766866
New Zealand, pound 3.806250 3.783333 13.781666 3.767916 3.757500 3.775833
tions are highly nominal and the exchange and foreign
AFRICA
.688750 4.682812 4.665156 4.656250 4.676250
trade operations continue under the strict control of South Africa, pound 4.724583
NORTH AMER.Canada, dollar
.978229 .977343 .976927 .972916 .969375 .976750
local government boards in the various South Ameri- Cuba, peso
.999350 .999350 .999350 .999350 .999350 .999350
Mexico, peso (silver). .284275 .283660 .282100 .282100 .281720 .280975
can cities. Dispatches from Buenos Aires this week NeWfoundland, dollar .975750 .974500 .974375 .970625 .967000 .974575
SOUTH AMER..879621*
Argentina. peso
.894920* .884134* .890522*
state that Argentina is negotiating a loan from Great Brazil. milrels (gold) .082912* .081830* .081830* .875600* .873432* .081080*
.081580* .081830*
.089375* .088750* .089375* .088750* .088125* 088125*
Chile, peso
now frozen Uruguay, peso
Britain which will free the British credit
.743166* .711250* .735416* .721666* .715833* .720833*
Colombia, peso
.793700* .793700* .793700* .813000* .560000* .675700*
in Buenos Aires.
•Nominal rates: firm rates not available.
paper pesos closed on Friday nominally
Argentine
at 38% for bankers'sight bills, against 393/i on Friday
HE following table indicates the amount of gold
of last week; cable transfers at 3932, against 39%.
bullion in the principal European banks as of
Brazilian milreis are nominally quoted 7.81 for bankers' sight bills and 83. for cable transfers, against Sept. 28 1933, together with comparisons as of the
7.81 and 8%. Chilean exchange is nominally quoted corresponding dates in the previous four years:
,
8
93/2, against 93/2. Peru is nominal at 213/ against Banks of- 1933.
1931.
1929.
1932.
1930.
21.30.
8
8
£
£
8

E

T

XCHANGE on the Far Eastern countries continues demoralized as a result of the uncertainties prevailing in the monetary policies of both
Great Britain and the United States. The Chinese
units appear to be firmer when it is considered that
the silver quotations in New York this week have been
2
ruling close to 40 cents an ounce and as high as 403/
cents an ounce. The London quotation has been
ruling around 18d. per ounce., but if silver is guaged
by the gold price, rates for the Chinese units are
not so strong. The yen likewise appears to be
relatively firm in terms of the dollar, but on the
basis of gold the yen cannot be considered strong.
However, all foreign exchange trading in Japan is
under the strictest kind of Government control.
The Indian rupee fluctuates .of course with the
pound, to which it is attached at the fixed rate of
is. 6d. per rupee.
Closing quotations for yen checks yesterday were
,
8
283/ against 28 on Friday of last week. Hong
Kong closed at 343@34%, against 343'@34 15-16;
Shanghai at 30 11-16@31%, against 30 7 16@30%;
49.95, against 50; Singapore at 559,
Manila at
against 563/2; Bombay at 35%, against 363', and
Calcutta at 353's, against 363/a.

E

England.-- 191,766,643
France_ a - _ 655,435,372
Germany b.
13,772,050
Spain
90.402,000
Italy
75,960,000
Netherlands
69,081,000
Nat. Belg
77,170,000
Switzerland.
61,581,000
Sweden_
14,018,000
Denmark _.
7.397,000
Norway _ _.
6,570,000

140,397,380
680,974,358
35,912,300
90,279,000
62.190,000
86,223,000
74,140,000
89,165,000
11,443,000
7,400,000
7,911,000

Total week_ 1,263,153,065 1,266,035,038
Prey. week_ 1 2R3 oni RR' 12e.c rna 162

136,159,694 156,803,327
474,769,362 387,450,129
60,061,900 116,452,300
91,054.000 98,090,000
56,525,000
58,220,000
58,594,000
32,549,000
46,456,000
34,564,000
36,808,000
25,585,000
12,750,000
13,459,000
9,536.000
9,566,000
8,128,000
8,139,000

130,343,588
315,286,622
103,112,800
102,594,000
55,807,000
36,920,000
29,182,000
21.306,000
13,450,000
9,586,000
8,154,000

992,536,956
082775281

825,742,010
*921(12 4R

940,088,756
ORO RA0090

a These are the gold holdings of the Bank of France as reported in the new form
of statement. b Gold holdings of the Dank of Germany are exclusive of gold held
abroad, the amount of which the Present year is £3,938,950.

World Interests at Geneva-The Problems
Before the League.
The speech with which Premier Johan Mowinckel
of Norway, President of the Council of the League
of Nations, opened the fourteenth session of the
Assembly on Monday was well calculated, it would
seem, to spur the Assembly to more energetic and
constructive action than either that body or the
Council have taken for some time. Dr. Mowinckel
warned the Assembly of the danger of a world war,
pictured a "torn and divided Europe, where the
words equality and fraternity are relics of a bygone
age and where even the most sacred rights of liberty
-are not
-liberty of thought and personal liberty
everywhere secure," and declared that public opinion was not satisfied with the course which the
League, dominated by the great Powers, had taken
URSUANT to the requirements of Section 522 with Manchuria, the London economic conference,
of the Tariff Act of 1922, the Federal Reserve and disarmament. The London "Times," commentBank is now certifying daily to the Secretary of the ing editorially upon the speech, expressed surprise

P




Volume 137

Financial Chronicle

(we quote from a dispatch to the New York "Times")
that "while other international gatherings, including athletic meets and Boy Scout jamborees, are
hailed as means of improving international relations, there should always be doubt cast upon the
usefulness of the annual meeting at Geneva." Both
Premier Mowinckel and the "Times," however,
agreed that the League still had an opportunity to
exercise a mediating influence, while the "Times"
remarked that "the fact remains that despite all the
rumors of war in Europe, there has been no war,and
the frequent conversations of responsible statesmen
in Geneva, it may be, have had a good deal to do
with its prevention."
The particular stimulus to war talk is to be found,
of course, in the anxious uncertainty regarding the
policy which Germany is likely to pursue in its
international relations, and the continuance of
strained relations between Germany and Austria.
It was inevitable, therefore, that the question of
disarmament, the formal discussion of which in the
Disarmament Commission is scheduled to begin on
Oct. 16, should intrude upon the Assembly debates
and be prominent in unofficial conversations among
League delegates. The accord between Great
Britain, France and Italy, which was reported to
have been reached on Sept. 22, appears to have been
a hope rather than a substantial fact, at least as
far as the crucial issue of control of armaments is
concerned. Paris dispatches of Sept. 23 made it
clear that the spokesmen for the three Powers were
not unanimous—a fact which, it was pointed out,
would become of great importance if there should
be a change of Government in France at an early
date, as has been freely predicted—and attention
was called to reports that Germany was preparing
to make counter-proposals, among them the right
to erect defensive fortifications and to have "samples" of the weapons which are denied to it by the
Treaty of Versailles. It had been reported on
Sept. 21, although without official confirmation,
that Germany would ask for the right to fortify
parts of its eastern frontier and to increase its
armed forces sufficiently to garrison the proposed
works, and also to create an aviation force of light
pursuit planes suitable for defence against an aerial
attack.
Developments during the past week, at Geneva
and elsewhere, have shown not only the complications that might arise if international control of
arms were undertaken, but also the evident reluctance of the three Powers to put any serious pressure
upon Germany. There have for some time been reports, the correctness of which has been denied by
Japan, that Japan was fortifying certain mandated islands in the Pacific which under the Treaty
of Washington were not to be fortified. It has
been pointed out at Geneva that it would be illogical
for the League to approve a periodical inquiry into
the observance of the military provisions of the
Treaty of Versailles, and refrain from inquiring
into the observance of the naval provisions of the
London and Washington treaties, especially since
it is in the Far East that the darkest war clouds
are thought by some to be gathering. The evident
desire to avoid irritating Germany appears in the
report from Geneva, on Sept. 23, that the British
delegates had taken pains to inform Baron von Neurath, German Foreign Minister, of what had been
talked about at Paris. The presence at Geneva of




2329

Dr. Paul Joseph Goebbels, one of the two principal
lieutenants of Chancellor Hitler, as a delegate, has
naturally revived rumors that Germany intended
to press for the right to increase its armaments,
and the French press has been aroused by the publication of a sensational article by the London political writer, "Augur," on an alleged plan of Germany
for the invasion of France.
It becomes increasingly clear, however, that while
efforts will doubtless be made to save the Disarmament Conference from complete collapse, no direct
issue is likely to be made with Germany either on
disarmament or on anything else. French influence
at Geneva is still powerful for obstruction, and
nothing that France resolutely opposes is likely to
be done, but international leadership, as far as the
League and Germany are concerned, is obviously
passing from France to Italy and Great Britain.
The fundamental sympathy of Fascist Italy for
fascism in Germany cannot be ignored, and the
tour-Power pact, in its origin a Mussolini conception, gives the Italian Premier an instrument which
he has shown no disposition to abandon. The British attitude at Geneva has been one of restrained
friendliness for France and a cautious interest in
coming to terms with Germany, and since Italy, in
foreign affairs, has usually been counted upon to
follow the British lead, the Anglo-Italian combination is strong. It is highly improbable that the
Powers will consent to allow Germany to make any
large increase in its armament, but Great Britain
and Italy seem disposed to make concessions. If
Germany succeeds in avoiding false steps, there is
some reason for expecting that agreement will be
leached, and that the agreement will satisfy, temporarily at least, the spirit if not the letter of Germany's demands. Precisely what the German demands are has not yet been officially made known,
but it is expected that Baron von Neurath, who
received on Thursday night an explicit statement
of what France was prepared to do, will be able to
present the German demands after a conference
which he is to have with Chancellor Hitler.
Whether or not the vexed problem of disarmament
will be thus advanced toward solution depends, however, very much upon the attitude of the League
toward Germany at other points. The "long and
warm applause" which greeted the speech of Chancellor Dollfuss of Austria in the Assembly on Wednesday was a clear indication of the special friendliness with which Austria is regarded at Geneva
at the present time, but the friendliness will be
of little value unless it is extended also to the
Fascist scheme of government which Chancellor
Dollfuss is proposing to set up. The position of
Germany in the League will be materially altered
if the League consents to undertake an inquiry
into the treatment of Jews in the Reich, as it is
being importuned to do, for while the German Jews
can undoubtedly be classed as a racial and religious
minority, they are not among the minority peoples
for whose protection the so-called minorities treaties
undertook to make special provision. The question
of the Jewish refugees in other countries, on the
other hand, is not one on which the Reich would
necessarily object to seeing the League take action.
It was reported on Wednesday that the Dutch Government, with the probable co-operation of Belgium,
Switzerland, France, Czechoslovakia, Denmark and
Luxemburg, was preparing to bring the question be-

2330

Financial Chronicle

fore the Assembly, and that the representative of
Haiti had submitted a resolution for a convention
enlarging the protection now accorded to minorities
by special treaties, and in the meantime establishing a special League bureau for the benefit of minority refugees. This latter proposal was in part
embodied in a resolution presented by the Dutch
delegation yesterday, asking for a special committee to consider the situation of German refugees in
Europe.
The interest of the League is not confined to disarmament and the situations in Germany and Austria. The recent action of Prime Minister Ramsay
MacDonald, looking toward a reconvening of the
Economic Conference, has raised the question not
only of the desirability of calling the Conference
together again, but also of the usefulness of general
international conferences as such. The failure of
the London Conference has admittedly dimmed the
prestige of the international conference idea, and
the multiplying bilateral agreements and treaties,
especially those dealing with trade relations, seem
to offer to international relations a much more
satisfactory substitute. It is also apparent that
political agreements such as the four-Power pact
and the Little Entente are steadily encroaching
upon the field of League activities. The four-Power
pact is at the moment a more hopeful instrument
for the maintenance of peace in Europe than the
League, and the stated meeting of the Little Entente
was held on the day on which the session of the
Assembly opened. This latter body, it was reported
on Tuesday, took into consideration the opposition
of Hungary to economic co-operation in the Balkans
until the Hungarian frontiers have been readjusted,
the Franco-Russian rapprochement, and the attitude of Italy toward the Balkans—all of these, it
would seem, matters which naturally would interest
the League. There is also before the League a
project for a security pact among the States bordering on the Black Sea. The League intervention in
the Chaco controversy between Bolivia and Paraguay has not yet resulted in any real advance
toward a settlement, but it is expected that the
negotiators will meet in October.
A report from Geneva that the United States
was considering the development of closer official
relations with the League was denied by Secretary
of State Hull on Sept. 19 as "erroneous and misleading." According to the plan, as summarized in a
dispatch to the New York "Herald Tribune," the
Department of State was to create a Division of
League of Nations Affairs, with an assistant secretary, and a resident minister or a commissionergeneral was to be accredited to the League. The
plan, it was said, was being supported by the League
of Nations Association in this country, a propaganda organization which has for some time been
exerting itself to make the United States in practical effect a member of ,the League. According
to Secretary Hull, the United States "is not contemplating any change whatever in its political relations with the League. No project of such a nature
has been considered or is being considered in the
State Department." That the hope still persists
at Geneva, however, is evidenced by Premier Mowinckel's inclusion of the United States, in his address before the Assembly on Monday, with the
great Powers which he held collectively responsible
for dissatisfaction with the League, and his expres-




Sept. 30 1933

sion of hope that co-operation with the United
States, which he declared "never has been so important, so close and so varied," might "become even
closer." It is to be hoped that Secretary Hull's
denial of the report is definitive, and that the United
States will not become any more entangled in League
affairs than it is already. In the delicate political
situation that obtains in Europe, where alone the
influence of the League remains important, it is
more than ever the part of wisdom for the United
States to keep itself free of political alliances or
commitments.
Aid of Staunch Americans Needed to Help
Keep Country on an Even Keel.
Newspapers of the day constitute a mirror of conditions existing in the United States of America
which a short time ago no citizen of the Republic
would have thought possible to prevail. Strife and
antagonism appear to have been aroused to an unwonted degree. In the process of readjustment from
a prolonged depression there has been developed a
degree of personal selfishness never before attained
among a loyal, sober, industrious and home-loving
people. Nothing comparable has ever been experienced in the "Land of the Free" since the old
bell on the State House at Philadelphia rang out
the message proclaiming "Liberty throughout the
Land."
True the Nation was once involved in Civil War,
but the struggle which began in 1861 was clearly
defined, involving issues which had not and could
not be settled by any other method than resort to
the sword. Then the differences were clear-cut and
sectional, the North being for preservation of the
Union and the South for a new and separate Confederacy to be comprised of most of the States below
the Mason and Dixon Line.
Four years of bloody conflict under arms settled
for all time the question of slavery and the indissolubility of the Union. The principles at issue
were fundamental. Since the reconstruction following 1865 no people on the face of the earth have been
more highly prospered than the inhabitants of the
United States and the area has been extended either
by purchase or as a result of the Mexican and
Spanish Wars until it comprises Alaska in the Arctic
region, Hawaii in the Pacific Ocean, the Philippines
in the Far East and Puerto Rico in the Atlantic
Ocean, in addition to smaller islands.
As a united people the Americans constructed the
marvelously useful Panama Canal, bound the Atlantic Coast to the Pacific with bands of steel rails,
populated the Middle and the Far West, improved
rivers and harbors, developed industry and bore
themselves with honor in the greatest war which the
world had ever witnessed.
Following the mighty world conflict this country
prospered in a wonderful degree for more than a
decade. It is the history of mankind that an era of
extreme prosperity is followed by one of depression
and accordingly Americans in the usual course of
events have been compelled to bear their full share
of adversity since 1929.
As a people are we not now strong enough, sufficiently experienced and brave to combat adverse
circumstances? Or have we been so weakened by
the follies of 1929 that we have not the vitality required to maintain proper poise and work our way
out of the dilemma? Rather we should show our-

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Financial Chronicle

selves to be good sports, take our medicine when
affairs go awry and struggle once more to put the
country upon an even keel which will bring happiness to all of its inhabitants.
Having experienced the inevitable recession individually and collectively we surely are brave
enough to combat adversity by renewed manly efforts towards upbuilding, devoid of all malice and
hatred towards our fellow citizens. It is a time to
bury petty grievances, to put shoulders to the wheel
and work for better times.
Self interest in periods like the present must be
subordinated in behalf of the entire population. If
prosperity has made us greedy in an inordinate degree we should comprehend that sacrifices must be
made by each citizen in the interest of the general
welfare.
Instead of pulling against each other, as seems
to be the popular idea at present, every man and
woman would better understand that concessions
should be made on behalf of the country as a whole.
A spirit of tolerance towards our neighbors, be they
rich or poor, and the exercise of united effort with
unselfish purpose, devoid of envy, are absolutely essential to put the United States back upon the road
to prosperity, a goal which may never be attained
without true co-operation.
One has only to read the headlines of the daily
papers to realize that as long as our hands are raised
against our neighbors only turmoil can prevail and
under such a condition no advancement worth while
may be possible.
At such times as the present men come to the
front as leaders who know how to sway the weak
and unthinking by appealing to the rabble in public
places. Their motives should be studied. Every
good and loyal American, of whatever sphere in life,
owes it to himself and the future of his children to
refrain from being misled.
A responsibility rests upon each citizen to be
patient and candid, to repress ulterior motives, to
forego temporary personal advantage and to look
ahead guiding his own course for the benefit of the
public weal knowing that by so doing he will be
working to his own best and permanent advantage.
We are living in a changing world. At no period
since the command was given "Let there be Light"
have people encountered conditions like those facing
Americans now. Let each citizen, not excluding
members of labor unions, who are now fomenting
strikes all over the country, take a second, sober
thought, "figure it out for himself," and then unflinchingly hew straight to the line as his unbiased
conscience may dictate. Then will America pull
through successfully as always in the past, thanks to
cur forefathers and their descendants who struggled
to found the Union and who on either side fought to
settle a controversy which could be determined in no
other way.

2331

for the 1932 term, on Oct. 3 last. What the reason
is for this sudden increase in the amount of litigation in the Supreme Court, we do not know. Nor
do we know whether this indicates a new higher
level in the normal amount of litigation which will
be sustained in the future years.
Almost one-half of the litigation this term consists of cases in which the Federal Government is a
party. By Sept. 18 the Government was a party in
200 cases, which is about 44% of the total amount
of litigation, as compared with 150 cases of last
term, which constituted about 40%. The relative
amount of Government litigation has shown a small
increase. But the number of cases which were
brought by the Government as petitioner or appellant increased considerably. This term the Government originated 46 cases, which constitutes 23%
of the total number of cases in which the Government is a party, as compared with 25 cases originated by the Government by the same date last term,
which constituted 16 2/3% of the total number of
cases in which the Government was a party.
Ever since the President launched the "New Deal"
both lawyers and laymen have been intensely interested in what the Supreme Court will do to the new
emergency legislation. Our guess has always been
that the Court would uphold it. By that we do not
mean that in every case which will come to the
Court, the statutes in their application will be held
valid. There may be instances in which the Court
may hold that the executive officers charged with
the duty of enforcing the laws have in a given manner exceeded their authority delegated to them
under the statutes, or, in extreme cases, that the
statute in its application is unconstitutional. But,
if there be such cases, we guess that the application
declared invalid will not have the effect of declaring
the entire statute or any substantial part of it unconstitutional.
Our guess is based on two main propositions: (1)
The cases will probably come to the Court on the
argument that the statutes violate the due process
and equal protection clauses of the Fourteenth
Amendment or the contract clause of Article I, Section 10 of the Constitution. These provisions have
always been held to give way to the police powers
of the States, and, in the case of the Federal Government, to the welfare clause in times of emergency.
Coupled with that, it must be remembered that cases
attacking the emergency legislation are apt to arise
in the form of equity suits, and there the plaintiff
is confronted with the famous dictum of Justice
Holmes that "there is no vested right in an injunction," and also with the recent pronouncements of
the Court that in granting equitable relief the Chancellor must balance the convenience of the plaintiff
against the hardship the relief would impose upon
others.
(2) As a practical matter, the Court cannot
afford to stand in the way of the present attempts
Supreme Court Opens Term.
of the Federal and State governments to cope with
[By GREGORY ILetisitr, Director Legal Research Service, Washington, D. C.)
a nation-wide economic emergency. Therefore the
(Copyright, 1933, Legal Research Service.)
Court will undoubtedly invoke and give effect to the
There has been a sudden increase in the number well-known proposition that in passing on the
of cases filed in the Supreme Court of the United validity of a statute all doubts must be resolved in
States this term. By Sept. 18, 460 cases had been favor of its validity. Since the existence of the
filed as compared with 376 on the same day of last emergency is itself a factor or element raising a
term, so that when the Court convenes on Oct. 2 doubt as to the validity of the statute, we suppose
next it will probably have over 500 cases to deal the Court will give the Government the benefit of
with, as compared with 422 cases when it convened that doubt.




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Financial Chronicle

The manner in which the validity of the legislation will be upheld will vary with the type of case
and the manner in which the case comes up. The
Court can affirm the judgment below in favor of
the legislation or reverse the judgment, if the decision below held the statute unconstitutional. But
in most instances it need not do either. About 85%
of the cases come to the Supreme Court on petition
for writ of certiorari. The Court can decline to
review the decisions of the lower Federal or State
Courts.
In the relatively few cases which come up on
appeal, that is, "as of right," the Court has always
dismissed a majority of these for want of jurisdiction or for the want of a "substantial Federal question." The meaning of this phrase is so nebulous
that it may fairly be said the right of appeal has
been reduced by the Court to the privilege of having
a review of the judgment below. And so, the Court
need not, if it does not wish to, burden itself with
the task of affirming judgments rendered in favor
of the validity of the present emergency legislation.
It may then only consider those cases in which the
lower Courts have taken a stand against the legislation. Such cases rarely ever come to the Supreme
Court on appeal, but only on petition for writ of
certiorari.
At the present time there are only three cases
before the Court involving emergency legislation of
the States. There are no cases as yet involving the
validity of the Federal legislation. Two of the State
cases came to the Court on appeal, the first involving the validity of the South Carolina banking legislation, and the second the Minnesota Mortgage Law.
The third case, which came on petition for certiorari
to the Supreme Court of California, involves a
statute which may be considered in the nature of a
moratorium statute. We shall state what these
cases are about without, however, expressing an
opinion or venturing a guess as to how the Supreme
Court will act on those specific cases.
The case from South Carolina was brought by a
depositor of a State bank, who attacked the constitutionality of the South Carolina law appointing conservators for insolvent banks. This Act, passed on
March 9 1933, gave the Governor of the State plenary
powers over banking institutions with power to appoint conservators to conserve the assets of the
banks. The depositor maintained that the assets
of insolvent banks belong to the creditors, and that
the assets must be administered through receivership and the assessment of stockholders' liability;
that the law therefore deprived him of property
without due process of law and was contrary to the
contract clause of the Constitution..
The conservator of the bank moved to dismiss the
appeal on the ground that the statute does not deprive the creditor of his right to contribution from
the stockholders' liability, and that he had no vested
right in the mere remedy of enforcing his rights
against the insolvent bank, namely, through the appointment of a receiver rather than the conservator.
In addition, the conservator argued that in view of
the fact that banking has always been regarded as a
business affected with the public interest, it was a
reasonable and proper exercise of the police powers
of the State, in view of the emergency, to vest the
Governor with plenary powers to supervise and control the banking department and the banks of the
State. Viewing this case from the standpoint of




Sept. 30

1933

the appellee, a serious question arises whether the
case involves a substantial Federal question.
The appeal which came from Minnesota attacked
the validity of the recent Mortgage Act of that
State. This was a suit on a mortgage which provided for foreclosure by advertisement, and also for .
a redemption period of one year from the date of
the foreclosure sale. The emergency Act provided
for the following: (1) That at the option of the
mortgagor all foreclosures by advertisement could
be converted into foreclosures by action in court;
(2) that the foreclosures could be delayed for a
period of two years; (3) that the redemption period
from prior mortgage foreclosure sales expiring less
than 30 days after the passage of the Act could be
extended to May 18 1933; (4) that at the option of
the mortgagor the redemption period from mortgage
foreclosures could be extended to May 21 1935; (5)
that no deficiency judgment could be had during
that period, and (6) that suit could be stayed until
May 1 1935.
The appellant attacked the statute under the contract clause, due process and equal protection
clauses. At the time of this writing, the appellee
had not yet filed an answer to the appellant's
"Statement as to Jurisdiction and Motion to Advance the Case." It is expected that the appellee
will argue that the case raises no question under
the equal protection clause because all persons similarly situated are equally affected, and that there is
no arbitrary and unreasonable classification; that
there is no violation of the due process clause, because it is within the power of the State to regulate
the procedure of the courts so as to prevent hardships on defendants; as to the contract clause,
although the statute in question was passed after
the contract had been entered into, all the changes
relate to matters of procedure or remedy which do
not violate the contract clause, unless those changes
affect the substantive rights of the parties.
The California case does not attack the validity
of the statute directly, but only the decision of the
Supreme Court of California, which petitioner
claims has given effect to a later statute. The decision, however, was rendered in April, and the
statute was not passed until June 1933. Therefore,
no question can arise under the contract clause of
the Constitution. As to the other questions raised
by petitioner, the respondent's answer is that the
Federal question was not timely raised.
We shall now turn to the 500-odd cases which the
Supreme Court will consider when it reconvenes.
Of these, 53 cases are ready for argument. That is,
they are cases in which the Supreme Court granted
writs of certiorari or held that proper jurisdiction
had been noted, toward the close of last term. A
number of these cases, however, involve the same
questions, and will be heard together so that all
the 53 cases may be heard as 38 cases. Considering
that the Court hears on the average of 15 cases per
week, it is expected that it will be in a position to
hear all the cases which are now ready for argument
in a period of two and a half weeks. That means
that when the Court returns, it will have to pass
quickly on appeals and petitions and grant a number
of them so that it will not be out of a job in these
days of unemployment.
Of the cases pending for argument, there are now
11 involving questions under the Internal Revenue
laws. Four involve the much-litigated question of

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Financial Chronicle

the statute of limitations, namely, whether the
assessment imposed by the Commissioner of Internal Revenue was within the statutory period.
All involve the question whether a waiver filed after
the expiration of the period of limitations and after
the enactment of Section 1106 (a) of the Revenue
Act of 1926 was effective so as to permit the Commissioner -to assess the tax.
Four cases involve the same question of deductibility from the gross income of an estate of amounts
distributed to the beneficiaries. One case involves
the deduction of certain expenses as "ordinary and
necessary expenses" incurred in a trade or business,
and two involve the computation of the gross estate
under the provisions of the Federal Estate Tax law.
There are also ready for argument six cases involving matters of State taxation. The most interesting of these raises the validity of the Pennsylvania inheritance tax law as applied to personal
property, consisting of paintings loaned by a nonresident decedent for exhibition in Pennsylvania,
and while the pictures were being exhibited the decedent died a resident of New York.
Three of the State tax cases involve the question
of whether certain property taxes imposed upon
rolling stock, owned by an oil company, constituted
a burden on inter-State commerce and violated the
due process clause, seeing that rolling stock was in
the State for only a fractional part of the taxable
year. Another, which came from Minnesota, involves the question whether livestock purchased at
stockyards and sold for inter-State shipment could
be attached for personal property taxes. And
finally, there is one case which raises the question
of the validity of the gross receipts tax imposed by
the State of Illinois on fire insurance companies.
Three railroad cases are pending for argument.
One questions the validity of a Virginia statute
authorizing the State Highway Commissioner to
eliminate grade crossings. The statute was attacked
on the ground that the carrier was not given sufficient notice and hearing, on the necessity of the
elimination of the crossing. In another case, a
railroad which operated under Government control,
prior to 1920, received an amount under Section 204
of the Transportation Act as deficits sustained by
it, and the Government brought suit to recover the
amount paid on the theory that the L-S. C. Commission had misconstrued the word "deficit" in the Act.
The most important of the railroad cases, however,
is a rate case in which the I.-S. C. Commission
ordered inter-State carriers in Louisiana to charge
rates in intra-State transportation which could be
not less than those charged for inter-State transportation. The case involves the extent of the I.
-S.
C. Commission's authority to treat the rate cases
as revenue cases and the extent of the evidence required to sustain the Commission's conclusions, that
the intra-State rates do not contribute their proportionate share to the upkeep of the railroad. This
summer several other cases involving substantially
the same question were filed in the Supreme Court.
There are also three criminal cases pending for
argument. One is the case of John Factor, whose
extradition is sought by the British Government.
Of the other two cases, one involves a prosecution
under the National Prohibition Act and questions
the validity of an affidavit upon which a search
warrant was issued. The other involves a prosecution for murder, alleged to have been committed




2333

by an army officer. It involves the question whether
certain statements made by the alleged victim, his
wife, could be treated as dying declarations.
Most of the other cases relate to matters of private
law, of which one might mention four receivership
cases, coming from the Third Circuit, and attacking
the general problem of "friendly receiverships";
also two bankruptcy cases, one of which involves the
construction of the provisions limiting discharges
in bankruptcy, and the other the validity of a turnover order failing to describe specifically the property ordered to be turned over, if the bankrupt had
concealed the property and it could not be described
more specifically than by book values. The cases,
not yet ready for argument, consisting of the numerous appeals and petitions, filed during the summer,
will be treated in ancither article.
The Government Cotton Plan and the South.
The bountiful hand of the United States Government has again been extended to the distressed
cotton farmers of the South. In spite of the acreage reduction plan, which Secretary of Agriculture
Wallace put through last spring, a larger yield of
cotton per acre than expected has resulted in a
total estimated production of about 12,400,000 bales.
A crop of this size, when added to the large carryover, created a situation where the supply overbalanced the prospective demand. The crash last
July in the commodity markets, caused by the Crawford smash-up on the Chicago Board of Trade, drove
speculative support away just at a time when the
South was preparing to market the 1933 crop of
cotton.
Taking advantage of this situation, domestic and
foreign spinners have bought only on a moderate
scale, with the inevitable result that prices for the
Southern staple dropped down to around 8 c. a few
/
1
2
weeks ago. This was approximately the low price
level of a year ago, with prospect of even lower
prices as the movement of the cotton crop to market
increased, with consequent expansion of the hedge
selling in the New York and New Orleans trading
rings.
Out of this situation, which caused a political
clamor in the South, grew an agitation, led by Senator Pat Harrison, of Mississippi, and others close
to the Administration at Washington, in favor of
immediate inflation of the currency, as authorized
by the last Congress. A large delegation of cotton
growers from the South last week gathered in Washington, and, backed by their home Senators and
Representatives, demanded an audience with the
President. Through the kindly intervention of Senator Bankhead, of Alabama, the radical element of
the delegation was held in check, and a soft pedal
put on the question of inflation. A plan finally
submitted to President Roosevelt in person called
for the purchase by the Government of all the cotton
of this year's growth left on the Southern farms at
15c. per pound. The President took the matter
under consideration, and a few days later announced
that he had accepted in principle a plan by which
the rest of this year's crop still held by the farmers, estimated at about 8,000,000 bales, would be
taken by the Government as collateral for loans on
the basis of 10c. per pound. This would afford a
minimum price of 10c. per pound, or $50 per bale,
throughout the entire cotton belt, and as this would

2334

Financial Chronicle

assure a fair margin of profit, above growing expenses, to the producers, the official announcement
of the plan from Washington caused some degree
of jubilance in cotton circles in Dixieland.
The effect of the official announcement of the
new cotton plan on the markets was quite marked,
prices on both spots and futures rising sharply well
above the minimum price of 10c. at which cotton is
to be pegged by the Government. It is just possible
that now that a "bottom" has been put under the
cotton market by Federal action, trade demand and
speculation may take hold of the staple and carry
values considerably above the 10c. mark, but no one
can speak with assurance on that point. As outlined
in the tentative plan announced in Washington, the
financial relief given to the cotton growers of the
South is coupled with control of the acreage to be
planted in cotton for the years 1934 and 1935. All
farmers accepting loans from the Government agencies will sign an agreement for cotton acreage reduction for the next two years. The plan previously
announced by the United States Department of
Agriculture calls for a reduction of the total area
in cotton for 1934 to 25,000,000 acres. On such a
comparatively small acreage as this the crop, it is
argued, would probably not exceed 10,000,000 bales,
and, in the event of an unfavorable growing season,
might drop to 9,000,000 bales. With another reduced yield in 1935, surplus stocks would be wiped
out, unless consumption fell off materially. At
least, so the argument runs, but it does not allow
for the fact that the acreage remaining might, under
intensified cultivation, be made to yield a greatly increased product, and that the final result might be
to again load the Government up with immense
masses of unmarketable cotton. The cotton planter
is getting sufficient Government assistance as it is,
and further resort to artificial props might well be
abandoned.

Sept. 30 1933

that such paper depreciates in value much faster than the
printing press can produce new supplies. This is the essential fallacy of paper-money schemes. It is this fallacy which
makes paper-money inflation, as an eminent German authority, Dr. Peter Reinhold, has put it, "the most terrible
thing that can happen to any civilized state."
But it is the record of inflation of the currency that its
evils do not end with an accentuation of the problem that it
is expected to remedy. In the process it works an inequitable and cruel redistribution of a country's wealth. As one
historian has trenchantly written, "It leads to the absorption of the means of the workingman and the man of small
fortune; it impoverishes men living on fixed incomes,
salaries or wages, and creates on the ruins of this large
group a small class of debauched speculators, the most in- ,
jurious class that a nation can harbor—{more injurious than
professional criminals, whom the law can reach and throttle.:
it stimulates production at first, and leaves every industry
prostrate afterward; it breaks down the idea of thrift and
develops social and political immorality."
We want no experiments of that sort in the United States.
But there is grave danger that we may have them forced
upon us if those who are aware of their hidden dangers do
not make their opinions felt. Friends of sound money cannot afford to permit an issue fraught with such grave economic and social consequences to go by default.

The Course of the Bond Market.

The two-day recovery in bond prices which took place
Friday and Saturday of last week was succeeded by a general
easing off throughout this week. Railroad bonds as a group
showed greater losses than other groups, particularly the
lower grade and receivership issues. The public utility
averages were down slightly, but industrial bonds as a class
have shown no great fluctuation. The computed price for
120 domestic bonds now stands at 86.25, which is slightly
higher than the recent low of 85.61 made on Thursday of
last week.
The Federal Reserve banks added a little over $36,000,000
to their holdings of government bonds this week. The total
of over 23.1 billion dollars is the largest amount ever held,
and is 420 million dollars more than holdings at this time
last year. The excess reserves of member banks are at a
record high, but they have not thus far had any visible effect
on member bank loans and investments. Money rates continue abnormally low. Indications that the Administration
does not favor further currency inflation tended to strengthen
somewhat the market for gilt edge bonds this week, while
Time to Fight.
low grade and speculative issues continued soft with the stock
[Editorial in New York "Herald Tribune" for Sept. 23 1933.]
market. Government bonds have maintained their recent
The time has come when the intelligence of the country high price levels, remaining close to the year's peak.
There has been no uniformity of trend in the railroad divimust speak its mind on the question of currency inflation,
and speak it forcibly. It can no longer, it seems to this news- sion. For the most part the week was devoted to readjustment of price levels and relations after the precipitous depaper, stand by and permit the impression to gain ground
in Washington that the Pittmans, the Thomases, the Bank- clines of the preceding week. Both losses and gains have
heads and others of their kind are representative of the been limited to fractions in a majority of cases and to a point
or two in others. Great Northern 7s, 1936, moved from
responsible and thinking mass of opinion in the nation.
There can be no question that those who understand 80 to 79, New York Central 43/2s, 2013, from 613/2 to 613.1
monetary matters and who are familiar with the history and Union Pacific 4s, 1947, from 99 to 983/2.• Northern
of previous experiments in currency inflation are irrecon- Pacific 6s, 2047, gained 33/2 points from 783/2 to 82 and
cilably opposed to subjecting the country to the grave Oregon Washington Railroad & Navigation 4s, 1961, 33.1
4
dangers inherent in these fatuous proposals. Unlike the in- points from 813 to 85. Alleghany Corporation bonds
flationists, however, this great body of thoughtful citizens strengthened on the announcement that interest due October
lacks, at the present time, the leadership and the organiza- 1 on the 5s, 1950, would be promptly paid.
The industrial bond averages also showed little change
tion that are essential if it hopes successfully to combat the
uninformed but highly articulate propaganda of those who this week. There was a slight easing off among second grade
issues. Steel company bonds firmed up after losses of the
would resort to the printing press.
Any counter-movement launched against the inflationists preceding week. Youngstown Sheet & Tube 5s, 1970,
should be non-partisan politically and should have leader- closed the week with a net loss of 2 points, National Steel 58.
ship in which people could place confidence. Its objectives 1956, lost % point and Bethlehem Steel 5s, 1942, lost 1 s
should be two: first, to educate the public in the dangers points on the week. Oils were firm, with Texas Corp. 5s,
and fallacies that underlie demands for paper money infla- 1944, off 3.1 point to 973.1. The leading tire and rubber
tion; second, to organize informed opinion so that the latter bonds were firm and little changed for the week. National
Dairy 5Yis, 1948, closed the week at 84, unchanged since
would make itself effectively felt in Washington.
Those who do not already realize it should be made to last Friday. Tobacco issues were firm. After a moderate
understand that there is no more vicious illusion in the world rally in the early part of this week, prices fell away again
than the illusion that a shortage of money can be remedied toward the week-end and most of the leading industrials
by placing an official stamp on paper and declaring that such are now at approximately the same levels as on Friday, a
paper shall have a stated value. During every paper-money week ago.
Utility bonds were quite irregular this week and there was
inflation of the past, whether one takes the case of the
French assignats, the German marks or our own greenbacks, no definite tendency in evidence. High grades held up fairl3,
the result has always been the same: the faster the paper well but second grades and speculative issues moved up and
was printed, the greater and the more poignant the cry of down over a reasonably wide range and got nowhere. New
a "shortage of currency." The reason for this is, of course, York traction issues were quite strong immediately prior to




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Volume 137

the city's arrangement for easing its financial difficulties.
Some price changes for the week (from Friday to Friday),
were as follows: Interborough Rapid Transit 5s, 1966,from
63 to 66%, Consolidated Gas N. Y. 43/2s, 1951, from 92
3
to 933', Commonwealth Edison 4s, 1981, from 79% to 78%
and Texas Power & Light 5s, 1956,from 79 to 77.
The foreign bond market gave evidence of some strength
toward the end of the week. Argentine, Australian and German bonds in particular advanced noticeably, Norway issues
were steady and Danish and Finnish slightly up. Among
the "gold" issues, new highs were made by French Govern-

ment bonds but there was some recession in the prices of
Dutch East Indies and Swiss issues.
After several weeks of sagging prices, the apparent settlement of the immediate financial problems of New York City
brought an impressive rally in the city's bond prices, carrying
long term issues up five to six points. Banks are to lend on
a direct pledge of taxes rather than on the general credit of
the city. Other municipal issues were inactive but fairly
firm, off from the highs for the year.
Moody's computed bond prices and bond yield averages
are given in the tables below:

MOODY'S BOND PRICES.*
(Based on Average Yields.)
1933
Dolly
Averages.
Sept. 29
28
27
26
25
23
22
21
20
19
18
16
15
14
13
12
11
9
8
7
6
5
4
2
1
Weekly
Aug. 25
18
11
4
Jttly 28
21
14
7
June 30
23
16
9
2
May 26
19
12
5
Apr. 28
21
14
13
7
1
Mar.24
17
10
3
Feb. 24
17
10
3
an. 27
20
13

6.

All
120
Domestic.
86.25
85.99
86.25
86.51
84.64
86.64
86.25
85.61
86.25
87.17
88.10
89.31
89.59
89.86
89.45
89.45
89.31
89.17
89.04
89.17
89.17
89.59

120 Domestics by Ratings.
Aaa.
106.25
106.07
106.25
106.07
105.89
105.72
105.54
105.37
105.54
105.89
106.42
107.49
107.67
107.67
107.67
107.49
107.49
107.49
107.31
107.31
107.14
107.31

89.86 107.14
90 69
91.25
91.39
91.67
91.67
90 97
91.87
00.41
88.90
87.96
86.77
86.64
85.87
85.10
84.10
82.74
79.68
77.11
74.67
75.61
74.46
74.77
77.88
79.11
74.67
78.77
81.30
83.23
82 38
83.11
82.99
83.85
141.66
92.39
74.15
/12.62
87.57

Aa.

A.

95.93
95.63
95.48
95.78
91.63
95.48
95.33
94.43
94.58
95.18
96.23
97.78
98.25
98.41
98.09
98.09
98.09
97.78
97.47
97.78
97.78
98.25
Stock
Stock
98.25

84.60
84.47
84.85
85.35
85.61
85.61
84.97
84.22
84.85
85.74
86.51
87.56
87.69
87.83
87.56
87.43
87.30
87.04
86.91
87.04
87.04
87.30
Exch
Exch.
87.83

107.67 99 04
107.85 100.00
107.85 100.33
107.67 100.00
107.14 99.52
106.96 99.36
106 96 99.04
106 25 97.62
105.72 96.54
105.54 95.33
105.20 93.85
104.16 94.43
103.82 93.99
103.99 93.26
103.32 92.25
102.30 90.55
99.36 87.30
99.68 85.35
97.78 83.35
Sloe
100.00 85.87
99.84 85.10
99.52 84.48
101.64 87.83
102.30 89.17
Sloe
99.04 85.48
102.98 89.31
104.51 90.83
105.89 92.68
105.37 92.53
105.54 92.39
105.03 91.81
105.54 92.25
104.85 90.69
108.03 100.33
97.47 82.99
103.99 89.72
85.61 71.38

Baa.

2335

MOODY'S BOND YIELD AVERAGES.?
(Based on Individual Closing Prim.)
120 Domestics
by Groups.
RR.

P. U. Indus.

66.47 86.38
66.21 85.99
66.38 86.38
66.81 86.91
67.16 86.91
67.25 86.77
66.73 86.38
66.21 85.35
67.42 86.64
68.58 87.43
69.68 88.50
70.81 90.13
71.09 90.27
71.87 90.55
71.19 90.13
71.38 90.27
70.90 90.13
70.90 89.86
70.90 89.5971.00 89.86
71.09 90.00
71.87 90.69
nge Clo sed
nge Clo sad
72.28 91.11

77.00
76.78
76.78
77.11
77.44
77.44
76.67
76.25
76.46
77.55
78.66
80.14
80.72
81.42
81.07
81.07
80.60
80.37
80.37
80.49
80.37
80.84
81.30
82.50
83.97
84.22
85.23
85.48
84.72
85.87
84.72
83.85
83.23
82.50
81.90
81.18
80.84
80.14
79.11
75.92
74.05
72.06

98 73
98.73
98.73
98.41
97.94
97.16
97.31
95.93
94.73
94.14
92.68
92.25
91.11
90.27
89.31
87.69
84.84
83.35
81.30

74.67
73.25
73.35
78.10
80.49

81.90
79.91
80.14
82.14
82.74

76.35
80.60
83.85
85.99
85.99
87.56
88.23
89.17
88.23
89.31
71.96
87.69
65.71

78.44
83.11
84.97
86.25
85.48
86.38
86.64
87.56
86.38
99.04
78.44
85.61
62.09

97.31
97.00
97.31
97.31
97.31
97.62
97.31
97.16
97.78
98.41
98.57
99.04
99.04
99.04
98.57
98.57
98.57
98.41
98.41
98.57
98.41
98 73

120 Domestics by Ratings.

Sept.29...
28._
27__
26..
25..
23.22-21.20._
19..
18..
16..
15..
14.13._
12._
11..

6...

WeeklyAug.25..
18..
11..
July 28 .
21..
14 .
June 30..
23..
16..
May 26..
19._
12..
Apr. A.
.21..
14..
13..
Mar.24..
17._
10..
3.
Feb. 24._
17..
10..
Jan. 27..
20..
13..

Aaa.

As.

A.

5.70
5.72
5.70
5.68
5.67
5.67
5.70
5.75
5.70
5.63
5.56
5.47
5.45
5.43
5.46
5.46
5.47
5.48
5.49
5.48
5.48
5.45

4.38
4.39
4.38
4.39
4.40
4.41
4.42
4.43
4.42
4.40
4.37
4.31
4.30
4.30
4.30
4.31
4.31
4.31
4.32
4.32
4.33
4.32

5.01
5.03
5.04
5.02
5.03
5.04
5.05
5.11
5.10
5.06
4.99
4.89
4.86
4.85
4.87
4.87
4.87
4.89
4.91
4.89
4.89
4.86

5.43

98.57

88.63 73.05 91.81
88.77 74.15 91.96
88.77 74.36 92.25
89.17 75.19 92.25
89.17 75.71 92.25
88.23 74.67 91.96
88.23 76.67 92.39
86.91 75.40 90.97
85.35 73.35 88.90
84.60 72.06 87.17
83.60 70.43 85.61
83.48 70.15 86.12
82.87 68.94 85.61
81.78 68.04 84.47
80.72 66.98 83.35
79.34 65.62 81.66
76.67 62.56 78.55
74.46 58.32 74.36
72.16 55.73 71.38
Excha tute Clo Red
73.95 54.80 71.09
72.65 53.28 70.62
72.85 53.88 71.38
75.82 57.24 73.65
77.33 58.52* 74.57
Excite 'we Clo Red
72.06 54.18 69.59
76.25 57.98 73.15
79.45 60.60 75.50
81.54 62.48 77.77
80.49 61.34 76.25
81.18 62.95 76.25
81.07 63.11 75.09
81.90 64.31 75.71
79.34 61.56 71.96
89.31 77.66 93.26
71.87 53.16 69.54
78.55 67.86 78.99
54.43 37.94 47.58

All
1933
120
Daily
DomesAverages. tic.

4.33

4.88

5.83
.5.84
5.81
5.77
5.75
1.75
5.80
5.86
5.81
5.74
5.68
5.60
5.59
5.58
5.60
5.61
5.62
5.64
5.65
5 64
5 64
5.62
Stock
Stock
5.58

5.37
5.33
5.32
5.30
5.30
5.35
5.30
5 39
5.50
5.57
5.66
5.67
5.73
5.79
5.87
5.08
2..42;
6.70

4.30
4.29
4.29
4.30
4.33
4.34
4.34
4.38
4.41
4.42
4.44
4.50
4.52
4.51
4.55
4.61
4.79
4.77
4.89

4.81
4.75
4.73
4.75
4.78
4.79
4.81
4.90
4.97
5.05
5.15
5.11
5.14
5.19
5.26
5.34
5.62
5.77
5.93

5.52
5.51
5.51
5.48
548
5.55
5.55
5.65
5.77
5.83
5.91
5.92
5.97
6.06
6.15
6.27
6.51
6.72
i .,0
lit9
,5k

6.61
6.72
6.69
6.40
6.29

4.75
4.76
4.78
4.65
4.61

5.73
5.79
5.76
5.58
5.48

6.70
6.32
6.10
5.94
6 81
5.95
5.96
5.89
6.07
5.25
6.75
5.99
8.74

4.81
4.57
4.48
4.40
4 43
4.42
4.45
4.42
4.46
4.28
4.91
4.51
5.75

5.76
5.47
5.36
5.23
5 24
5.25
5.29
5.26
5.37
4.73
5.96
5.44
7.03

Baa.

120 Domestics
by Groups.
RR.

40
For
P. U. Indus. Motu.

5.69
6.48
7.57
5.72
6.50
7.60
5.69
6.50
7.58
5.65
6.47
7.53
5.65
6.44
7.49
5.66
6.44
7.48
5.69
6.51
7.54
7.60
5.77
6.55
5.67
6.53
7.46
6.43
5.61
7.33
6.33
7.21
5.53
6.20
5.41
7.09
6.15
5.40
7.06
5.38
6.09
6.98
5.41
6.12
7.05
6.12
5.40
7.03
5.41
6.16
7.08
5.43
6.18
7.08
5.45
6.18
7.08
5 43
6.17
7 07
5.42
6.18
7.06
6.14
6.98
5.37
Excha nge Clo *ed
Excha nge do sad
6.10
6.94
5.34

4.92
4.94
4.92
4.92
4.92
4.90
4.92
4.93
4.89
4.85
4.84
4.81
4.81
4.81
4.84
4.84
4.84
4.85
4.85
4.84
4.85
4.83
4.84

9.27

6.46
5.29
6.00
5.28
5.88
6.75
5.86
6.73
5.26
5.78
6.65
5.26
5.76
526
6.60
5.28
582
6.70
D.73
6.51
5.25
5.82
6.63
5.35
4.89
5.50
6.83
5.94
5.63
6.96
6.00
7.13
5.75
5.06
7.16
5.71
7.29
5.75
6.11
6.14
5.84
7.39
6.20
5.93
7.51
6.29
6.07
7.67
8.58
6.34
8.05
6.73
6.76
8.63
7.03
6.96
9.02
Excha nge do Red
6.70
7.06
9.17
6.77
6.84
7.11
6.90
9.42
7.03
6.83
9.32
6.88
6.38
6.80
8.79
6.59
6.71
1.45k 8.60
0c
6.17
sed
ha
;.YP 6.54
6.96 E917 ng
6.16
6.85
8.6fi
6.55
5.89
6.62
8.31
6.26
572
6.41
8.06
6.08
5.72
6 55
6 17
8 21
5.60
6.55
6.11
8.00
5.55
6.66
7.98
6.12
5.48
6.60
6.05
7.83
5.55
6.97
6.27
8.18
5.47
5.19
6.42
5.47
6.97
7.22
9.44
6.98
5.59
7.41
6.30
6.34
7.66
9.23 12.96 10.49

4.83
4.83
4.83
4.85
4.88
4.83
4.92
5.01
5.09
5.13
5.23
5.26
5.34
5.40
5.47
6.59
5.81
5.93
6.10

9.09
9.10
909
9.03
8.91
8.84
8.89
9.32
965
951
968
9.78
9.62
9.66
1006
10.07
9.89
10.26
10.58

6.05
6.22
6.20
6.03
5.98

10.83
11.02
10.80
10.78
10.73

6.35
5.95
5.80
570
5 76
5.69
5.67
5.60
5.69
4.81
6.35
5.75
8.11

11.19
11.05
10.40
10.05
10.20
9.88
9.85
9.62
9.98
8.63
11.19
9.86
15.83

9.39
9.43
9.49
9.52
9.56
9.60
9.62
9.52
9.50
9.45
9.39
9.32
9.36
9.31
9.34
9.37
9.35
9.35
9.34
934
9.31
9.28

High 1933
Low 1933
Low 1933
High 1933
High 1932
Low 1932
Low 1932
lily/ A 0 ) ll) 2
0
3
Year Ago
Sept. 29 1932
82.62 102.30 89.59 78:55 66.47 76.78 87.69 83.85 Sep. 29'32 5.99
5.59
5.89 10.00
6.50
6.34
4.61
7.57
5.45
Two Years Ago
2 Yrs.A oo
Sept. 29 1931
77.99 99.04 90.41 74.77 54.04 72.65 44.34 74.38 8en. 24'31 8.34
4.41
5.39
6.60
8.87
6.90
5.54
6.73 12.69
Noles.-• These prices are computed from average yield on the basis of
the average level or the average movement of actual price quotations. Theyone "Ideal" bond (454% coupon, maturing In 31 years) and do not purport to show either
merely
movement of yield averages, the latter being the truer picture of the bond market. f serve to 1 lustrate In a more comprehensive way the relative levels and the relative
The latest
the "Chronicle" of Sept. 9 1033, page 1820. For Moody's index of bond prices by months back complete list of bonds used In computing these Indexes was published in
to 1928, see the "Chronicle" of Feb. 6, 1932. page 907.

Edmund Platt Holds Banks Should Quit Federal Reserve
System-Would Illustrate Ability to Carry on
Without Deposit Guarantee.
From the New York "Journal of Commerce" of Sept. 25
we take the following:
The proposal of Jesse II. Jones, head of the Reconstruction Finance
Corporation, that the Wall Street banks assume leadership in selling 5%
preferred stock to the RFC is forcefully attacked by Edmund Platt,VicePresident of the Marine Midland Group, Inc.. in a letter to the "Journal of
Commerce."
Mr. Platt suggests that, instead of selling stock in order to set an example
tor the weak banks which would not quality for deposit insurance without
revising their capital structures, it would be better for the large institutions
to quit the Reserve System and "show that they can get along not only
without the insurance but without membership in the Reserve System."
Mr. Plates Letter.
The letter entitled: "An Example to the Small Banks," follows:
"Editor of the "Journal of Commerce":
"According to the news columns of the 'Journal ot Commerce' of this
morning (Saturday) 'Wall Street banks have been urged to assume the
leadership in the sale of 5% preferred stock to the RFC and are now negotiatin3 upon the amount so to be sold.' These negotiations are said to be
upon the insistence of Jesse H. Jones, head of the RFC,and for the purpose
of having the Wall Street bankers set an example to the smaller banks ot the
country In the matter of obtaining capital from the Corporation even
though they have no used for the funds whatever. The Jones argument is,
of course, that inasmuch as a considerable number of small banks are believed to be in need of additional capital so as to clean up and make themselves eligible for insurance under the Federal Deposit Insurance Corpora-




tion strong banks which not only have no need for such additional funds bul
have large surpluses of funds which they are unable to loan or invest with
a return greater than 3% should pay 5% on preferred stock simply as an
example.
"As a business proposition this is so silly that it is hard to believe that
any Wall Street banks are really negotiating with the RFC. If as generally
supposed, most of the small banks which may have difficulty in qualifying
are non-member banks, wouldn't it be a better example for some of the
large member banks of New York City to become non-members and show
that Utley can get along not only without the Insurance, but without membership in the Federal Reserve. As things stand to-day the Federal Reserve
banks are practically out of business as loaning corporations. The total
loans of the System on Sept. 20 were only $130.030.000. and the Reserve
Bank of New York was loaning only $40.000,000, none of it to the reporting
member banks of the city.
Effect of Withdrawal.
"Supposing such a bank as the Guaranty Trust Co. should withdraw
from the Federal Reserve System, how would it be affected? It could continue to carry its reserves in the Federal Reserve Dank as a non-member
clearing bank and could continue to use the clearing facilities of the Federal
Reserve Bank. Furthermore, it could adjust its reserves thrcugh the Federal Reserve by buying or selling acceptances or short-term governments.
This is exactly what the late Paul Warburg once declared that banks in
the financial district should do anyway, instead of rediscounting, and
would resemble very much the relationships between the chartered banks
of London and the Hank of England. Membership in the Federal Reserve
System does not seem to me to be at all a necessity for the Wall Street
banks. About all they would lose by withdrawing would be a small 6%
investment in the Federal Reserve stock, and about all the Federal Reserve
Bank of New York would lose would be a reduction of its capital which
would be a matter of small consequence."

Sept. 30 1933

Financial Chronicle

2336

Cotton Movement and Crop of 1932-33.
Our statement of the commercial cotton crop of
the United States for the year ended July 31 1933
will be found below. It was slightly larger than in
the previous year, though the actual growth was
much smaller. The commercial crop reached 15,171,822 bales, against 15,128,617 bales last year,
13,868,804 bales two years ago, 14,630,742 bales
three years ago and 19,281,999 bales, the record crop
raised in 1926-27. Exports from the United States
were 8,611,238 bales, against 8,844,382 bales in
1931-32, 6,933,804 bales in 1930-31 and 8,249,527
bales in 1928-29. U. S. spinners' takings were
6,800,029 bales, against 5,649,281 bales. The whole
movement for the 12 months is given in the following
pages, with such suggestions and explanations as the
peculiar features of the year appear to require. The
first table shows the export movement for the past
year (1932-33) in detail, and the totals for each year
back to 1920-21. The second table indicates the
stock at each port July 311933, 1932, 1931 and 1930,
and the receipts at the ports for each of the past
four years.
Experts for Year Ended July 31 1933 to
From
Ports of
Texas
Louisiana a
Georgia- -Alabama. _
Florida _ _ _
Mississippi
So. Caro_ _
No.Caro..
Virginia. _ New York.
Boston_ _ _
Baltimore _
Fhiladeria
San Fran_
Los Ang_b_
Seattle_ _
To Canada

Japan &
Russia. China. Other.

GerGreat
Britain. France. many.

Total.

____ 1,370,702 874.8635,121,502
983.653526.019
423.831239.313 34,000 432,618 199,223 1,874,200
23,297
9,125 303,650
102,151 8.871---45,493 23,072 383.519
__-166,499 26,258
4,743 163.010
16,966
88.59: 3,638
1.187
18.316
844
-2,000 11,727 252.195
3,450 34,708
7,20: 24.050
146,512229
1,043 42,277
11,414
136
2,007
1,309
1,383 49,566
52
298
9.131
6,314
7,203
637
200

677,109689,156
371.047 174,168
157.126 3.080
104,843 17,354
244
48,821
100
16,185
2
91,954
27,448
37.393
52
126
2,568
12,568

-555

35,648
120,293
5i

11,961

Total_ _ 1.547,240886,756 1,951,852828.68
For'n corn
exported

920
794
6,026 44,392
3,904 149,119
515
510
c168,146 c188.148

34,000 2,049,197 1313,5108,611,238
-

6,992

6,992

Total all 1,547,240886,7561,951,852828.683 34,000 2,049,197 1320,5028,618,230
Total in
_ _ _ 3,416,111 1269,004 8,869,160
1931-32. 1,372.578483,648 1,637,530690.289
1930-31_ 1,090,171 937.57 1,730.728 495.551 29,279 1,662.320 996,7696.942.393
1929-30_ 1,271,921 326,349 1,799,068666,81 129.021 1.240,267, 917,3966,850.841
1928-29_ 1.856,617 301,79 1,941,793 724.406 339,457 1.516.3551085.1808.265.598
1927-28. 1,446,849 396,554 2,189,612697,989 413,210 1,065.6561143,385 7,853,255
1926-27_ 2,582,4301024762 2,952,846 787,056 506.958 1,835.387 1550,956 11240404
1925-26_ 2,290.989917,268 1,736.812 745,868 245,588 1.199,151 1110,3408,246,016
1924-25_ 2,546,272 900,759 1,887.316 733.824 241.598 921.048 1032,767 8,263.584
1923-24_ 1,719,135720,028 1,309,782 553,061 184,711 573,780 774,9835,835,480
647,835, 817.159 4,867,831
1922-23_ 1,285,926 632,938 995,593488.38
913,479, 884,5496,337,769
1921-22_ 1,778,885 771,794 1,471,717 517,345
737.3171 875,854 5.806.325
1,751.784584,390 1,346,722 510,258
1920-21_
a Includes 159,946 bales exported from Lake Charles. La. b Includes exports
from Dan Diego and San Pedro. c These are shipments by rail to Canada: in addition, 23,516 bales went to Canada by water, making total takings of the Dominion
189,662 bales.
Receipts tor Year EndingPorts
of-

July 31 1 July 31
1932.
1933.

July 31
1931.

July 31
1930.

Stocks.
July 31 Aar 31 1 July 31 1 July 31
1931. 1930.
1932.
1933.

Texas..5614,6676.224.382 4,997,8004,957,157 1770,346 1,627.386 1,189.856 731.902
Loubra _ 2171,756 2,251.425 1,530.259 1,713,918 783,733 975.506 570.634326.316
oeorgia.I 225,680 390.906 783.391 534.526 105.494 203.478 343,422 103.815
Alaba
387,570 568.155602,511 410.61 127.213 160.7271 208,729 9,881
16,9941 17,948 1,098
39,225
Florida _ 185,482 125,183 85.924 32.15
1
1.30
1.327
2.011
Miss pp 18,316
33,398 97.445 153.990 63.555
So.Caro. 218,279 140.77 301.853 253.01
3,799 4.398
7.094
15,596
No.Car. 58,604 60.817 73,727 95.4
43.953 56.100 49,200
24.4
81,224 150.950 159.4
Virginia. 58
145.714 202.739 227.770239.215
1.175 59,
N.Yorka
14.184
2.880 5,917
2,19
17,910
6.590
933
Boston a
614
500
500
1.000
1,000
25,826 28,859 33,06
Beltim.a 19,451
5,293 5,176
5,389
5.389
7
12
7
Philalaa
98
1
San Fran
17,000 6,948
12,032
Los Ang.
Seattle.
Tacoma.
Port.Ore
Total_18959,2559,851,7098,584,1788.253.050 3081,4503,355,895 2.786,9411548019
a These figures are only the portion of the receipts at these ports which arrived
by rail overland from Tennessee. &e.

If we now add the shipments from Tennessee and elsewhere direct to manufacturers, and Southern consumption,
we have the following as the crop statement for the four
years:




Year Ended July 31-

1932-33.

1931-32.

1930-31.

1929-80.

Receipts at ports
bales 8,959,255 9,851.709 8,584.178 8,253.050
Shipments from Tennessee, &c., direct
705,640 1.009,040 1.222,944
754,609
to mills
9,713,864 10.557,349 9,573.218 9,475.994
Total
Southern mill takings not incl. above a5.457,958 54,571.268 4.295.586 5.154.748
Total cotton crop for year

15.171.822 15.128.617 13.868.804 14.630.742

. a These are Southern mill takings. Southern consumption was 77,192 bales less
than that amount, or 5,380,766.
S These are Southern mill takings which were 387,393 bales in excess of Southern
mill consumption, which amounted to 4.183.875 bales.

The results of these figures is a total crop of 15,171,822
bales (weighing 7,888,823,674 pounds) for the year ended
July 311933, against a crop of 15,128,617 bales (weighing
7,849,588,255 pounds) for the year ended July 31 1932.
NORTHERN AND SOUTHERN SPINNERS' TAKINGS in 1931-32 have been as follows:
bales_15.171.822
Total crop of the United States,as before stated
Stock on hand at conunencement of year(Aug. 1 1932)
223.312
At Northern ports
3.132,583- 3,355.895
At Southern ports
18.527.717
Total supply during year ended July 31 1933
Of this supply there has been exported to foreign
08,445,092
ports during the year
166,146
Sent to Canada direct from the West
35.000
Burnt, North and South_c
Stock on hand end of year (July 31 1933)
170,013
At Northern ports
2,911,437-3,081,450-11,727,688
At Southern ports
Total takings by spinners in the United States for year
6,800,029
ended July 31 1933
Consumption by Southern spinners (included in
5.380.766
above total)
-*5.457.958
77.192
Excess of Southern mill takings over consumptiond1.342.071
Total taken by Northern spinners
a Not including Canada by rail. c This is an estimate of the Census.
d Exclusive offoreign cotton. * These are U. S. Census figures.
1931-32.
Bales.
1,078,013

1930-31.
Bales.
1,372,492

1932-33.
Bales.
Takings and Consumption
1.342,071
North-Takings
5,380.766
South-Consumption
Excess of takings over
*77.192-5,457,958
consumption

4,571.288

4,295,586

a6.800,029

c5,649,281

55,668,078

8,445,092
166,146

8.663.842
180,540

6,732.847
200,957

8.611,238
35,000

8.844,382
66,000

8,933,804
28,000

15.446.267
Total distributed
Add-Stock increase(+) or decrease
(-) together with cotton imported -274,445

14,559,663

12.829.882

15,171,822

15,128,817

Total
Exports
Total,except to Canada by rail
To Canada by rail
Total exports
Bui-nt during year

Total crop

+568.954 +1,238,922
13,868,804

a Exclusive of 46,964 bales of foreign cotton consumed in the South and
85,430 bales in rest of country. b Exclusive of 60,194 bales of foreign cotton
consumed in the South and 119,399 bales in rest of country. c Exclusive
of 43,045 bales of foreign cotton consumed In the South and 79,032 bales
In the rest of the country. • These are U. S. Census figures.

COTTON PRODUCTION AND CONSUMPTION IN
THE UNITED STATES AND IN EUROPE.
-The cotton industry for the year under
United States.
review did not open with any great degree of promise on
Aug. 1 1932 but it closed on July 31 1933 with conditions
quite encouraging. This statement applies alike to the raw
material, cotton, and to the cotton goods trade. The
contrast between the beginning and the end of the season
of 1932-1933 is sharp and noteworthy, and has few parallels
in the past. The improvement may be said to be due entirely
to the change for the better in the United States, though
exports of the staple were well maintained at the high figures
of the previous year while yet falling somewhat below these
high figures. The domestic mill demand continued good
from beginning to end of the crop year, and in the closing
months reached proportions never previously attained. The
crop was a short one, but there was at first no realization or
appreciation that it was to be a small crop, and, as it
happened, the Department of Agriculture at first underestimated the size of the production and as additions to the
prospective yield were made month by month they exerted a
depressing influence far beyond their due, inasmuch as the
crop remained a small one even after the additions to the
same. The Department of Agriculture as of Aug. 1 1932,
put the prospective crop at 11,306,000 bales and as of Sept. 1
at 11,310,000 bales and on Oct. 1 raised its estimate to 11,-

Volume 137

Financial Chronicle

425,000 bales, and on Nov. 1 further increased the same to
11,947,000 bales while in December in its final report for the
year raised the prospective yield to 12,727,000 bales. According to the ginning returns the actual size of the crop in 500
pound bales was 13,001,508 bales, but this nevertheless left
the crop a small one, especially as it contrasted with a crop
in 1931 of no less than 17,095,594 bales, this last the largest
crop with a single exception in the history of cotton planting.
In the early spring of 1932 tremendous efforts were made
to cut down the acreage. The States proceeded singly and
collectively in the attempt but without avail. Nevertheless by the voluntary action of the planters themselves some
reduction in the area planted to cotton was effected. This
proved quite a surprise, even though the decrease was not
very large, but it was a decrease nevertheless even though its
importance and significance were not recognized at the time.
The U. S. Census report issued on July 8 1932 indicated
a reduction in the acreage planted to the new crop of 93/%,
yet this passed unnoticed, and it was not until the appearance
of the August report estimating the new crop at only 11,306,000 bales (which, as just noted, proved considerably
short of the final yield) that the trade sensed what was going
on and prices surged upward in a very noteworthy fashion.
Unfortunately, however, this was followed by a quick relapse
as trade depression in the United States became intensified
and other unfavorable developments began piling up, one
after another, as related with greater detail in subsequent
portions of this report, where we deal with the action of
Federal agencies in seeking to strengthen the price situation.
Dealing first with the size of the crop, a distinction must
be made at the outset, as heretofore, between the commercial crop, as compiled by us, and the actual growth of the
staple for the season. Our figures deal with that portion of
the crop that finds its way to market, while the actual growth
of cotton is determined by the Census ginning returns.
The previous season, that is in 1931-1932 it happened that
the commercial crop fell far short of the actual production.
The actual growth of cotton in 1931 was 18,162,975 bales of
500 pounds, including linters, but the commercial crop
proved to be only 15,128,617 bales, the reason for the
difference having been that cotton farmers withheld considerable supplies from market, because of the desperately
ow figures to which market values of the staple fell. In
1932-1933, on the other hand, (the crop now under consideration) the reverse proved to be the case, and the commercial crop ran far in excess of the actual crop. This last,
as already stated;as measured by the Census returns was no
more than 12,709,647 running bales and 13,001,508 bales in
bales of 500 pounds, to which must be added 741,346 bales
of linters, making the total 13,742,854 bales. This means of
course that considerable supplies of old cotton came forward,
raising the total to a corresponding extent. As a matter of
fact, judged merely by the figures of the commercial crop
one might draw the conclusion-erroneously-that the
crops for the last two seasons had been about equal in size,
that for 1932-1933 having been 15,171,822 bales and that
for 1931-1932 15,128,617 bales, these of course being running
bales in both years. But that should not blind us to the
fact that the crop was really a small one and it deserves to
be noted, too, that it was raised under unfavorable conditions, the yield per acre having been only 173.3 pounds,
or the lowest yield per acre in all recent years. It follows
that it was the low yield per acre rather than the diminution in acreage that cut down the size of the crop so substantially. And this fact should be borne in mind, since in the
current season of 1933-1934 the indications are that the
yield will be quite high, to that extent offseting the reduction in the size of the crop because of the 10,000,000 acres
to be plowed under in the carrying out of the policy of the
Agricultural Administration. The small yield per acre in
1931-1932 was due in no small measure to the under-fertilization of the soil. The price of cotton at the opening of that
season was too low to make it profitable for the planter to
indulge in the purchase of fertilizers, and, besides, planters
were not in financial condition to make purchases. In the
current season, however, fertilizing material in the Southern
States appears to have been no more freely used than it was
last year. At all events a statement of the fertilizer tag
sales in the cotton States compiled by H. G. Hester of the
New Orleans Cotton Exchange shows only 468,916 tons of
fertilizers applied for all purposes in the cotton States for
the seven months ending with the close of February 1933, as
compared with 471,001 tons in the corresponding seven




2337

months ending with February 1932; 972,080 tons in the
similar period ending in 1931 and 1,571,743 tons in the
seven months ending with February 1930. Nevertheless the
Department of Agriculture at Washington in its latest report
forecasts a yield per acre for the United States as a whole of
197.8 pounds per acre.
As to the other causes operating to reduce the yield in
1932-1933 the boll weevil is reported to have been a main
cause of damage, with the loss repotted on that account at
15.2% for the cotton belt proper. This was considerably
above the loss from that cause in the previous two years and
it was the highe.it percentage attributed to that cause since
1927. In 1931 the loss in yield due to weevil was 8.3%;
in 1930, 5.0%; in 1929, 13.3% and in 1928, 14.1%. The
loss from that source was greatest in Georgia, Florida,
Alabama and Mississippi, and in those States the reported
percentages were higher than in any year since 1923.
The Large Consumption of Cotton in the United States.
Whatever the size of the crop now in the ground, a highly
encouraging feature is the large and active consumption of
cotton in the United States. The International Federation
of Master Cotton Spinner, and Manufacturers Associations
at Manchester has just made public its compilations of the
world consumption of cotton for the year ending July 31
1933 and from this it appears that the world consumed
14,167,000 bales (exclusive of linters) of American during that
period of 12 months, which it will be observed runs well in excess of the growth of cotton in the United States in the same
crop year, which was,as already noted, 12,709,647 in running
bales and 13,001,508 bales of 500 pounds. In the previous
season, that of 1931-1932, the world's consumption of
American cotton was no more than 12,319,000 bales. This
shows an increase in the latest season of 1,848,000 bales. A
significant fact is that 1,269,509 bales of this increase
represents expansion in the American consumption of the
staple, this having been (exclusive of linters) 6,135,525 bales
in 1932-1933 and 4,866,016 bales in the preceding season
and 5,262,974 bales in the season before. To be sure the
consumption in this previous season was quite low, but.full
and enduring recovery appears now to have been established
and it should not escape notice that beginning with September
1932 every monthly return of cotton consumed (with the
single exception of February when the month had one day
less than the same month of 1932, this last having been a
leap year) recorded expansion over the corresponding
month of the previous season and in June the quantity used
by the mills ran close to 700,000 bales (being 696,472 bales)
or more than double the quantity consumed in the same
month of 1932 which was only 322,706 bales, and the largest
consumption of any month since the U. S. Census has been
compiling the figures.
It is well known that the cotton goods trade was foremost
in the business recovery which came in the spring of 1933,
following the closing of all the banks in the country in March,
and the fact is that the cotton goods trade had nothing to
complain about earlier in the season as far as volume of
business was concerned though this does not imply that
prices realized for the goods were satisfactory-far from it.
The truth is, the low prices at which manufactures of cotton
sold acted greatly to extend the use of cotton goods, buyers
appearing who would otherwise have refrained from making
purchases. Now of course prices are enormously higher,
being in many cas double those prevailing previous to the
bank breakdown in March 1933, but everything else is also
higher, and this is part of the National Recovery program at
Washington. The following series of tables show the consumption of cotton in the United States for each month of
the last six years.
COTTON CONSUMED IN COTTON-GROWING STATES
-RUNNING SALES
Foreign Cotton Included.
1932.
August
September._...
October
November ____
December
January
February
March
April
May
June
July
Total
Linters

1931.*

1930.*

1929.*

1928.*

1927.*

338,170
407,966
414.572
421,499
371,079
1933.
397,774
370,607
412,305
389,316
514,221
565,644
483,230

341,765
377,531
378,144
355,347
344.206
1932.
358,048
366,601
398,205
310,946
287.657
275,832
239,069

284.035
313.912
351,849
333,278
321,515
1931.
355,419
341,439
383,766
390.062
361.680
356,674
353,944

428.771
423,189
488,660
424,437
353,072
1930.
450,620
381,365
393,906
412.232
370,087
320.190
302,650

403,431
381.012
471,357
469,503
404.807
1929.
508,221
451.562
479,328
477,940
504.513
431.450
409,141

464.530
462,378
449.297
469.252
401.633
1928.
442.330
428.741
431.812
396,510
442,583
392,052
332,724

5,086,383 4,033,351 4,147.573 4,749,179 5.392.265 5,113.842
341,347
192,291
313,765
334,073
369.254
315,593
Grand total- 5.427.730 4.225.642 4.461.338 5 illin 252 A 751 5110 A L90 VIA
•Includes revisions made subsequent to the publication
of the monthly figures.

-RUNNING BALES.
COTTON CONSUMED IN OTHER STATES
Foreign Cotton Included.
1931.•

1932.
64,431
83,689
87,672
82,223
.983
68
1933.
73,428
71.056
81,862
81,369
106,688
130,828
116,913

AtIllUst
September......
October
November ____
December ____
January
February
March
Aprli
May
June
July

1,049,142
416,349

Total
Linters
fIrsnot ...al

1 AOC An,

83,265
86,804
82,879
69,881
71,195
1932.
76,678
84.638
90,702
55,535
44,715
46,874
39,499

1930.*

1929.*
129.983
122.645
151.099
116.716
99,613
1930.
125.540
113.031
113.740
119,679
103.197
85.046
76.372

68,591
79,478
91,435
82.037
84.003
1931.
94.698
91.937
106,743
118.629
103.683
97.227
96,940

1927.*

1928.•

169.990
165,406
164.223
157.490
137.153
1928.
143,812
144.134
149,513
128.255
134.801
118.347
107,097

122,909
111,295
144.881
141.670
128,494
1929.
160,065
143,158
152.341
153.882
164.137
137.964
138.024

832,665 1,115.401 1,356.661 1,698.800 1,720,221
464.636
510,015
471,097
400.352
445,028
1 977 AC.

1 RIK 'VI

1 291 150

9 led 1257

9 9112 el c

monthly figures.
• Includes revisions made subsequent to the publication of the
COTTON CONSUMED IN WHOLE UNITED STATES
RUNNING BALES.
Included.
Foreign Cotton
1931.*

1932.
402,601
491,655
502,244
503,722
440,062
1933.
471,202
441,663
494,167
470,685
620,909
696,472
600,143

August
September.....
October
November......
December
January
February
March
April
May
June
July
Total
Linters
nmno mt.]

Sept. 30 1933

Financial Chronicle

2338

425,030
464,335
461,023
425,228
415.401
1932.
434,726
451,239
488.907
366,481
332,372
322,706
278,568

1930.*
352.626
393,390
443.284
415.315
405,518
1931.
450.117
433,376
490,509
508.691
465.363
453.901
450.884

1929.*
558.754
545,834
639,759
541.153
452,685
1930.
576.160
494.396
507,646
531.911
473,284
405,236
379,022

1928.*

1927.*

526.340
492,307
616.238
611.173
533,301
1929.
668,286
594,720
631.669
631,802
668.650
569,414
647,165

634,520
627,784
613.520
626.742
538.786
1928.
586.142
572.875
581,325
524.765
577,384
510.399
439,821

6,135,525 4,866,016 5,262,974 6,105,840 7,091.065 6,834.083
780.229
879.269
805.170
714.117
637,319
757,696
A nog 991 n snq 225 5 077 1101 8 011 11111 707(1 RRA 7814 909

aggregating no less than 8,844,382 bales, and the export
movement during 1932-1933 has been only moderately less
than this at 8,611,238 bales. The export shipments the
previous season had been swollen to an unusual extent by
the takings of cotton for the Far East, mainly due to
unusually short crops in that part of the world, the East
Indian crop having been heavily reduced and likewise the
China crop as also the Egyptian crop. But with the yield
in that part of the world once more restored the takings of
American cotton were again reduced. The exports from the
United States to Japan, which had increased from 1,233,711
bales in 1930-1931 to 2,321,995, bales in 1931-1932, fell
back to 1,741,250 bales in 1932-1933. The exports to
China, which had run up from 428,609 bales to 1,094,116
bales, have dropped to only 307,947 bales. With the Far
East taking such diminished amounts of American cotton it
is surprising that the total export shipments from the United
States should have suffered relatively so little. Germany
heads the list with export takings of 1,951,852 bales as
against 1,637,530 bales in the previous year; Great Britain
took 1,547,240 bales as against 1,372,578 bales; France
886,756 bales as against 483,648 bales; Italy, 828,683 bales
against 690,289 bales and so on through the list, there being
relatively few instances of a drop in the export movement
aside from the Far East in which should be included India
whose export takings, after having increased from 89,865
bales in 1930-1931 to 221,807 bales in 1931-1932, dwindled
to only 56,768 bales in 1932-1933. In the following table
we show the exports to each of the leading countries for the
last five years.
COTTON EXPORTED FROM THE UNITED STATES

•Include revisions made subsequent to the publication of the monthly figures.
-LINT
NORTH
COTTON CONSUMPTION OF SOUTH COMPARED WITH
AND LINTERS.
Running Bales.

1932-33. 1931-32. 1930-31. 1929-30. 1928-29. 1927-28.

5.427.7304,226,642 4.461,338 5,083,252 5.761.519 5.429.435
1.465,491 1,277,693 1.515.753 1,827.758 2.208,815 2.184,857
2 24/1 1178
It:ream ni cest•th _ 1 089 220 2 947 049 2 945 ER5 a 255 404 2 552 7(14

South
North

YEARLY PRODUCTION OF COTTON IN UNITED STATES
ACTUAL GROWTH.

Growth
Year.

Running Bales
Counting Round
as Half Bales.

Equivalent
500-lb.
Bales.

12,709,647
16.628,874
13,755.518
14,547,791
14,296,549
12,783,112
17,755,070
16,122,516
13,639,399
10,170,694
9,729,306
7,977,778
13,270,970
11,325,532
11,906,480
11,248,242
11,363,915
11,068.173
15,905,840
13,982,811
13,488,539
15,553.073
11,568,334
10.072,731
13,086,005
11,057,822
12,983.201
10.495,105
13,451,337
9,819,969
10.588,250
9.582,520
10,102,102

13,001,508
17,095,594
13,931,597
14,824,861
14,477,874
12,956,043
17,977,374
16,103,679
13,627,936
10,139,671
9,762,069
7,953,641
13,439,603
11,420,763
12,040,532
11,302,375
11,449,930
11,191,820
16,134,930
14,156,486
13,703,421
15,692,701
11,608,616
10,004,949
13,241,799
11,107,179
13,273.809
10,575,017
13,438,012
9,851,129
10,630,045
9,509,745
10,123,027

1932
1931
1930
1929
1928
1927
1926
1925
1924
1923
1922
1921
1920
1919
1918
1917
1916
1915
1914
1913
1912
1911
1910
1909
1908
1907
1906
1905
1904
1903
1902
1901
1900

Linters
Equivalent
500-fb.
Bales.
*741,346
1,067,381
986,430
1,241,355
1,282,061
1,016,375
1,157,861
1,114,877
897,375
668,600
607.779
397,752
440,313
607,969
929,516
1,125,719
1,330,714
931,141
856,900
638.881
609.594
557,575
397,072
310,433
345,507
268,282
321,689
229.539
241,942
194,486
196,223
166,026
143,500

Total All
Equivalent
-lb.
500
Bales.
13,742,854
18,162,975
14,918,027
16,066,216
15,759,935
13,972,418
19,135,235
17,218,558
14,525,311
10,808,271
10,369,839
8,351,393
13,879,916
12,028,732
12,970,048
12,428,094
12,780.644
12,122,961
16,991,830
14,795,367
14,313,015
16,250,276
12.005,688
10,315,382
13,587,306
11,375,461
13,595,498
10,804,556
13,679,954
10,045,615
10,827,168
9.675.771
10,266,527

•These are running bales for this year.
-UNITED STATES
PRODUCTION OF LINT COTTON BY STATES
CENSUS GINNING RETURNS.
Gross Bales of
1932-33. 1931-32. 1930-31. 1929-30. 1928-29. 1927-28. 1926-27.
500 Lbs.
1,497,821
948,8541,419,689 1,473,287 1,341,5501,109,126 1,102,392 122,902
Alabama
91.6561
69,193 115,061 155,409 152,839! 149,458
Arizona
1,547,932
1 320,556 1,906,736 874,356 1,434,6601,245.982 999,983 131,211
Arkansas
91,1771
172.230
California.. _ _ 129,371 176,560 263,766 258,5591 19,203
31,954
16,496
28,578
50,306
15,151: 43,164
Florida
854,357.1,392,665 1,592,539 1,342.6431,029,499 1,100,0401,499,105
Georgia
714,529 808,8251 690,958 548,026, 829,407
.
Louisiana_ _ _ 610,509, 899,922
74,875 1,355,252 1,887,787
Mississippi_ _ _ 1,179,781 1,761,2031,464,311 1,915,4301,4
1 217,859
1
306,835, 288,9911 150,955 219,932' 146,909 114,584
Missouri
65,2941 71,000
83,544
88,450
69,8681 08,1241 98,462
New Mexico
861,468 1,212,819
663,359' 756,294 774,734 747,208 836,474 1,037,1411,772,784
North Carona
1,204.625
.
Oklahoma _ _ _ 1.083.7131,261,123 853,584 1,142,686 726,039 730,013 1,008,068
South Carolina 716,2251,004,730 1,000,892 830,0551 429,284 359,059 451,533
,
594,512 376,912 5j5 774
Tennessee..... 480,3531
4,356,2775,630,831
4 501,800;5,322,453 4,039,136 3,941,626 5,109,939
Texas
51,329
30,609
47,5271 43,711
41,952
31,1651 42,423
Virginia
16,032
6,576
6,018
8,3591
6,467
11,944
14,418
Allother Stat
374
17095 594 13931 597 14824 68111447787412956 043 17977
13001 508
Total

As to the foreign takings of cotton, as measured by the
export shipments from the United States, these also afford
much encouragement. The export shipments from the
United States the previous season had been of unusual size,




1932-33.

1931-1932.

1930-31.

1929-30.

1928-29.

Germany
Great Britain
Japan
France
Italy
Russia
Canada
Spain
China
Belgium
Rolland
Portugal
3weden
VIexico
Denmark
India
Vorway
3reece
stew Zealand
.
Vigra
kustralla
)ther countries

Bales.
1,951,852
1,547,240
1,741,250
886,756
828,683
34,000
189,662
314,092
307,947
200,504
142,290
67,515
58,528
43,278
39,578
56,768
9,247
2,389
4
1,464
25
188,166

Bales.
1,637.530
1,312,578
2,321.995
483.648
690,289

Bates.
1,730,728
1,090,171
1,233,711
937,575
495,551
29,279
204,081
248,883
428 609
151,258
135.628
42,223
48.371
16,512
33,916
89,865
6,227
100

11,116

Bates.
1,799.068
1,271,921
1,021,107
826.349
666.819
129,021
195,314
254,198
219,160
182.802
137,595
48,905
43,917
10,957
19.107
100
5.858
225
358
566
15
7,274

Bales.
1.941.793
1.856.617
1.288,619
801,790
724,406
339,457
270,464
269.439
227,736
222.596
168,869
42.809
41,401
20.790
14,872
5.975
3,462
827
452
448
280
6.425

Total exports

8.611.238

8.844.382

6.933.804

6.840.636

8.240.527

To-

198,807
306,657
1.094,116
145,868
156.480
60.777
56.875
2.042
36,791
221.807
8,448
2,943
520
461
8
45,742

A question comes up as to the foreign supplies of cotton to
be drawn upon, especially from the Far East. The latest
figures show that the China crop which yielded only 1,700,000 bales in 1931-1932 against 2,250,000 bales in 19301931. recovered to 2,300,000 bales in 1932-1933; that the
East-Indian crop which dropped from 4,372,000 bales of
478 pounds in 1930-1931 to 3,368,000 bales in 1931-1932,
has recovered only part of the loss with a yield in 1932-1933
of 3,779,000 bales; furthermore the Egyptian crop which
dropped from 1,715,000 bales in 1930-1931 to 1,288,000
bales in 1931-1932, has been further reduced to 950,000 bales
in 1932-1933. There would appear to be nothing in these
comparative figures to indicate that supplies from the Far
East stand a great chance of displacing American cotton in
the immediate future. Egypt deliberately, cut down its
acreage a year or more ago. Cable advices in November 1932
stated that an Egyptian decree had been signed restricting
acreage to 40% for Sakellaridis and 50% for other varieties
of the cultivated areas, but is now enlarging the same again.
Thus Cario (Egypt)adviees Aug.7 to the New York "Times"
stated that the Ministry of Agriculture of the Egyptian
Government had on that day issued figures on cotton acreage
in 1933, and that a marked increase, which was shown over
last year, was believed to be due to the fact that the Fellahin
failed to find profit in cereals which they had been induced to
cultivate, because of extremely low prices, and therefore
resumed cotton planting. The statistics showed 1,804,209
feddans of cotton (a feddan is a small fraction more than an
acre) against 1,093,701 last year. We may expect therefore
that the Egyptian crop will once more get back to its old
proportions, but that is a prospective increase rather than an
immediate increase. In the following table we show the
Egyptian crop for the past four seasons and also the Egyptian
exports, and it will be noted that the Egyptian exports in
the past season were only 849,795 bales against 1,009,493
bales last season and 923,852 bales the season before.

Volume 137

Financial Chronicle

ANNUAL STATEMENT OF THE EGYPTIAN COTTON CROP.
Season
1932-33.

Season
1931-32.

Season
1930-31.

Season
1929-30.

Total receipts (Interior net
weight)
centers 4,947,699

Years Ending July 31—

Exports—
To Liverpool
To Manchester
Total to Great Britain
To France
To Spain
To Portugal
To Italy
To Switzerland
To Austria and Hungary
To Czechoslovakia
To Poland
To Germany
To Holland
To Belgium
To Greece
To Russia and Esthonla
To Sweden and Finland
Total to Continent

6,871,724

7,551,931

8,447,600

Bales.
166,807
134,453

Bales.
213,872
158,757

Bales.
156.244
131.369

Bales
143,465
151,756

301,260

370,629

287,613

295,221

133,382
39,552
2,604
60,737
30,921
7,444
20,496
11,063
108,923
1,894
4,773
2,685
1,455
3,445

98,819
44,818
1,394
78,326
32.286
24,465
20,853
10,223
105,608
602
5,612
1,240
44,231
1,540

123.133
50.010
1.502
67.545
48.940
7.270
20.780
11,233
82.828
1.084
9.286
1.225
55.538
1.180

126,118
34,186
1,306
58,032
42.876
7,684
18,444
7,557
71,421
1,090
4,704
802
50,972
777

429,374

470,017

476.554

425.469

To United States and Canada

40,807

48,619

23.504

102.052

To India.

16,628

50,103

81,048

5.975

To Japan and China
Total to all ports
Equal to canters._

61,726

70,125

65,133

35,253

849,795

1,009,493

923.852

863,970

6,437,931

7,450,724

6,801,860

6,360,979

With reference to the Jananese takings of cotton it would
appear that Japanese needs for the staple had not been fully
supplied the past season. A delegation of five representatives of the cotton spinning industry of Japan arrived in
New York City Aug. 29 en route to London where it was
stated they would attend a conference with British cotton
spinning interests on the subject of Anglo-Japanese competition in the world cotton goods trade. A number of other
conferences are also contemplated. An announcement by •
the New York Cotton Exchange stated that the conferences
had to do with the great expansion in exports of cotton goods
by Japan at the expense of British trade, particularly in
exports to India, and with the efforts of the British interests
to overcome the Japanese competition by having India
impose an import duty of 75% on Japanese goods while the
duty on British goods is 25%. India has also served notice,
Mr. Okada, the head of the delegation stated, that on Oct. 10
it would abrogate its existing commercial treaty with Japan
by which it extends to Japan most-favored nation treatment.
Mr. Okada said that the matter was so serious for Japan that
Japan had been obliged to notify India that it would not
buy Indian cotton. Since the first of May Japanese spinners
had not bought any Indian cotton and did not intend to buy
any until India treated Japan more fairly. Mr. Okada also
said that Japan normally buys about 1,500,000 bales of
Indian cotton a year and Japan would have to buy this
cotton from other countries, particularly from America, if
Japan did not buy it from India. When the Japanese
spinners stopped buying Indian cotton they had considerable
cotton on hand and so this has not yet resulted in increased
buying of other growths, but it would be necessary to buy
other growths more freely when these reserve supplies have
been exhausted. We have stated that the indications were
that Japan the past season had not fully supplied its current
needs and what Mr. Okada sari would appear to confirm
the statement, and the official figures of cotton importations
into Japan, furnish evidence to the same effect. Here are
the figures for the last four fiscal years.
Years Ended June 30—
Imported into Japan from—
India
United States
China
All other countries

1932-33.
Pk
-Ws,

1931-32.
Pleats.

1930-31.
Ptculs.

1929-30.
Pietas.

3,908,003
6,275,953
485,964
811,573

3,047,472
8,918,167
498,734
478,249

4,810,137
4,105,363
687,245
309,259

4,962,002
4,085,032
764,399
482,071

Total Imports into Japan_-- 11,481,493 12,942,622 9,912,004
10.293,504
500-0. Bales. 500-18.13ales. 500-lb-Bales. 500-1b.Bales.
3,065,508 3,455,680 2,646,221
2,748,365

Equivalent in 500-lb. bales

2339

decreased, and we may add that the Japanese mill stocks were
nevertheless reported larger at 647,000 bales for July 31 1933
as against 530,000 bales on July 31 1932. Japanese port
stocks however are lower. From all this the conclusion
would seem warranted that Japan will again have to take
increased amounts of American cotton; as a matter of fact
the movement has already begun, American export shipments to Japan in August 1933 having been 117,481 bales
as against only 58,464 bales in August 1932.
Tne export movement from India is also of interest at this
juncture and in the following we show the exports from India
for the season ended July 31 for a dozen years back. It will
be observeci that as a result of the Indian crop shortage in
the previous year the Indian exports dropped from 3,719,666
bales (400 pounds) in 1930-1931 to 1,758,304 bales in 19311932, but that for 1932-1933 there has been a partial recovery
to exports of 2,604,240 bales. Japan and China got 1,551,414
bales of Indian cotton as against 1,151,349 bales in 1931-1932,
but comparing with 2,309,642 bales in 1930-1931. In view
of these figures there can be no doubt that Japan is in
position to inflict considerable injury by discontinuing
purchases of Indian cotton.
EXPORTS FROM ALL INDIA TO—
Great
Britain.

1932-33
1931-32
1930-31
1929-30
1926-29
1927-28
1926-27
1925-26
1924-25
1923-24
1922-23
1921-22

bales of 400 lbs.

Continog.

Japan &
China.

227,165
128,363
264.510
239.184
229,969
220,757
72,301
172.517
199.618
287.345
223.948

825,661
478,592
1.145,514
1,611.990
1,500,022
1.327.833
882,296
1.090.050
1,284.390
1.563.226
1,113.612

1,551,414
1,151,349
2.309,642
1,947.058
2.187,292
1.576.652
1.882,381
2.512.534
2.415.772
1.592.013
2.243.119

70,629

Season Ended July 31—

963.178

2,604,240
1,758.304
3,719,666
3,848.232
3.917,283
3.125.242
2,836.958
3.775.101
3.809.780
3,442,584
3,580,679

2.216,732

8.250,539

Total.

World Consumption of Cotton.
We have already stated that according to the Manchester
Federation of Cotton Spinners the consumption of American
cotton in the year ending July 31 1933, was 14,167,000 bales
as against 12,319,000 bales in the previous year, an increase
of 1,848,000 bales, and have shown that the great part of this
increase was in the consumption of American cotton by the
United States. The Manchester Federation also gives the
figures for cotton mill consumption of all descriptions of the
staple and the figures in that respect are shown in the table
we now subjoin.
WORLD CONSUMPTION OF COTTON OF ALL KINDS AS COM
PILED BY INTERNATIONAL FEDERATION AT MANCHESTER.
Bales Irrespective
of Weight—

1932-33.

1931-32.

1930-31.

Amer.cotton in U.S.
Rest of world

Bales.

Bales.

Bales.

6.003.000
8,164,000

4.747.000
7,572,000

5,091,000
5,817.000

5,803,000
7.2,0,000

Total American- —
East Indian cotton
Egyptian cotton---Smithies

14,167,000
4,200,000
936.000
5.029.000

12,319,000
4,789,000
980.000

10.908.000
5,863.000
853.000
4.864,000

13,023.000
6.087.000
937.000
5.162.000

All kinds of cotton

24.332.000

22.323,000

4,236,000

1929-30.
Bales.

22.488.000 25.209.000
Note.—The figures In this table relate to lint cotton only, and do not
Include linters.
WORLD'S COTTON MILL CONSUMPTION—IN BALES, REGARDLESS OF WEIGHT.
1932-33. 1931-32.
1930-31, 1929-30.
1928-29.
Europe—
Bales.
Bales.
Bales.
Bales.
Bales.
Great Britain___ 2,248,000 2,386.000 1,964.000 2,465.000 2.800.000
Germany
1.212,000 1.196.000 1,086,000 1.323.000 1,378.000
France
1,099.000
892,000 1,122,000 1.171,000 1.227.000
Russia
1.613.000 1,520,000 1.821,000 2,109,000 2.152.000
Italy
861,000
794.000
783,000 1,001.000 1,042,000
Czechoslovalda— 287.000
344,000
397.000
461.000
495,000
Belgium
303,000
303,000
358,000
461,000
452,000
Spain
396,000
403.000
393,000
412,000
404.000
Poland
257.000
194.000
223,000
225,000
251,000
Switzerland
86.000
92,000
88,000
101.000
105,000
Holland
156,000
154,000
198.000
206.000
190.000
Austria
81.000
104,000
97,000
117,000
149.000
Sweden
101,000
110,000
78.000
98,000
97.000
Portugal
71.000
53,000
85,000
92.000
87.000
Finland
31.000
32.000
34.000
30,000
34.000
Hungary
77,000
61,000
57.000
51,000
20.000
Denmark
29.000
25,000
24.000
22.000
22.000
Norway
11.000
9,000
8.000
9.000
7.000
Total Europe- 8,919,000 8,668.000 8,820,000 10,354,000 10.912.000
Asia—

With India having a larger crop available the Japanese India
2,636,000 2.700,000 2,513.000 2,419.000 1,997,000
2.900.000 2.769,000 2,565,000 2,997,000 2.766,000
importations, which had dropped from 4,810,137 pieuls in Japan
China
2,584,000 2.254,000 2,329.000 2,297,000 1,957,000
1930-1931 to 3,047,472 piculs in 1931-1932, increased again
Total Asia.. _ _ _ 8,120.000 7.723,000 7,407,000 7.713,000 6.720,000
to 3,908,003 piculs in 1932-1933; doubtless the takings
America—
would have been still larger if Japan had not stopped U.
S. A
6.109,000 4,847,000 5,246.000 6,060,000 7,033.000
altogether the taking of Indian cotton on the first of May. Canada
174.000
195,000
202.000
200,000
228.000
The importations from the United States which had increased Mexico
166,000
160,000
146.000
215,000
164.000
453,000
465,000
392,000
414,000
472.000
from 4,105,363 piculs in 1930-1931 to 8,918,167 piculs in Brazil
1931-1932, fell back to 6,275,953 piculs in 1932-1933. But
Total America- 6.902.000 5,667.000 5,986,000 6,889.000 7.897.000
391.000
265.000
270,000
253,000
the point which we wish especially to stress is that when this Sundries
353.000
cotton movement is converted into 500
Total all
24,332,000 22,323.000 22,483,000 25.209,000 25,882,000
-pound bales it is
found that the Japanese importations of the staple in 1932This shows that the total increase in cotton
1933 were only 3,065,558 bales, as against 3,455,680 bales of all kinds was only a little larger than that consumption
of American
in 1931-1932 and 2,646,221 bales in 1930-1931. In other cotton by itself, the grand total for the year ending July
31
words Japan imported altogether 390,000 bales less of the 1933 being 24,332,000 bales as against 22,323,000
bales in
staple in the latest year than in the previous year. Turning the 12 months preceding. The consumption of East
Indian
now to the figures on the world's cotton consumption cotton fell from 4,789,000 bales to 4,200,000 bales and
the
prepared by the Manchester Federation we find that the consumption of Egyptian cotton decreased from
mills of Japan consumed 2,900,000 bales of cotton in the to 936,000, but the consumption of sundry cottons 980,000
latest year as against 2,769,000 bales in the preceding year, from 4,235,000 bales to 5,029,000 bales. Nothing increased
appears in
that is more cotton was consumed, while the importations the Manchester statistics to show the composition
of this




2340

Financial Chronicle

made up
large amount of sundry cottons, but apparantly it is and of
almost entirely of Russian cotton, Chinese cotton
from
Brazilian cotton. The Federation has no returns
estimates
Russia and its figures are stated as being rough
for the
only. But the consumption ofsundry cotton by Russia must
that
latest year is estimated at 1,510,000 bales andlike manner
have been mainly cotton of Russian growth. In
official
the Chinese consumption of sundry cotton from
seems fair
returns is given as 1,646,000 bales and this, too, it Chinese
of
to conclude must have been composed chiefly
consumption of
cotton. Then Brazil is credited with a
bly consisted
453,000 bales of sundry cotton which presuma
of Brazilian cotton.
ACTIVITIES OF THE FEDERAL FARM
ADMINISTRATION.
Administration played
The activities of the Federal Farm
crop
part in the cotton situation during the
an important
in its influence affecting prices,
year 1932-33, particularly
years. The happenjust as it had in the two previous crop
previous years were fully detailed in our
ings in these two
of things at the
annual crop report for 1931-32. The state
cotton
of the crop year 1932-33 was that spot
beginning
1932 had touched 5.00c. on the
in New York on June 9
the lowest price
New York Cotton Exchange, said to be
that Exchange. At the same time cotton
In the history of
being heavily
consumption in the United States was still
pursued
owing to the rigid policy of curtailment
reduced,
reverse of what happened later
• by cotton manufacturers, the
consumption of
in the crop season (1932-33), when home
by rapid strides, the cotton textile induscotton advanced
became such a contries leading the business revival which
banks
feature of affairs with the reopening of the
spicuous
ons in March 1933. After the bad
after the general suspensi
part of the
break in June 1932, however, prices the latter
d, and the recovery extended into July and
month recovere
of the South
August of that year (1932). Large sections
apparently suffering from too much rain, while conwere
weevil was
siderable damage from the depredations of the
likely to
feared. Under-fertilization was also reported as
The United States Census report issued on
show its effect.
planted
July 8 (1932) indicated a reduction in the acreage
1932 crop of 9%%, but very little attention was paid
to the
August
to this, and it was not until the appearance of the
ng
1932 report of the Department of Agriculture, estimati
at only 11,306,000 bales, or from 1,000,000
the growing crop
comparto 1,200,000 bales less than private estimates, and
with an actual production in 1931 of 17,096,000 bales
ing
prices
(not including linters) that the downward course of
ted
was reversed and an upward movement was inaugura
month of the crop year (1932-33) under rein the opening
view, which unfortunately, however, proved short-lived. As
against 5.00c. touched on June 9 1932, the New York spot
(the
price had recovered to 6.05c. at the close of July 1932
d to a
end of the old crop year of 1931-32), and then advance
high of 9.20c. on Aug. 27 1932, after which, though, the
downward course of values was resumed, owing to a series
of unfavorable developments, more particularly the further
extension of business depression in the United States, which
was to last until the spring revival of 1933.
In August 1932 (the opening month, as already stated,
of the crop year of 1932-33), there came numerous indications going to show how the Federal Farm Board had been
and was influencing the cotton situation, present and prospective, and the part that its doings and performances were
having in acting as a stimulating agency to the upward
surge in values along with the sudden realization that the
cotton trade was facing a heavily reduced growth of cotton
from the harvest of 1932. One thing in particular appeared,
namely, that the huge accumulations of Government cotton
would not be allowed to hang heavily as a burden over the
cotton market for the time being. All through the month
of August 1932 the Farm Board, acting through its subsidiary, the Cotton Stabilization Corporation, appeared to
be engaged in disposing of some of its holdings of the
staple. The price kept steadily rising in face of these
sales. This action of the Farm Board, however, was in
accordance with a statement which it had given out the
previous May 2 (1932), saying that it would authorize sale
of Government-owned stabilization cotton not to exceed
650,000 bales during the cotton year beginning Aug. 1 1932.
The intention of the Board to liquidate a considerable portion of its holdings was confirmed in a number of state9
ments during August 1932. Thus on Aug. 4 193 , Carl
Williams, of the Farm Board, said that the Board expected
to dispose of 1,150,000 bales of cotton in the cotton year




Sept. 30 1933

bales of
1932-33 without any disturbance to prices, 500,000
Red
this representing cotton which the American National
with 45,000,000 bushels of
Cross was to receive (along
I'resiwheat) under a resolution of Congress approved by
on July 5 1932 for relief purposes. James C.
dent Hoover
Stone, Chairman of the Farm Board, made the same statereply
ment in a letter, also dated Aug. 4 1932, written in
Gore suggesting the advisability
to a proposal from Senator
of impounding until Aug. 31 1933 the cotton belonging to the
Cotton Stabilization Corporation and the cotton owned by
of
the Cotton Co-operative associations which are members
American Cotton Co-operatives' Association. In reply,
the
Mr. Stone said that the Cotton Stabilization Corporation
to
owned approximately 1,300,000 bales of cotton. Prior
1 1932 it had not bought or sold any cotton since
Aug.
July 1930. "However," he said, "the Stabilization cotton
cannot be held indefinitely," and he added that the previous
April (1932) "the Cotton Advisory Committee, which is
composed of spinners and cotton growers, had recommen12d
to the Board and the Cotton Stabilization Corporation that
an amount of cotton be sold during the present (1932-33)
cotton year of not in excess of 650,000 bales." A surprise,
however, came when on Monday night, Aug. 29 1932, Jesse
H. Jones, Director of the Reconstruction Finance Corporation, announced that $50,000,000 had been made available
to keep Government controlled cotton off the market until
1933. It appeared the next day (Aug. 30 1932) that of
the loan of $50,000,000, $15,000,000 was to be advanced to
the Cotton Stabilization and $35,000,030 to the American
Cotton Co-operatives' Association. Security for the advance,
it was stated, was to be cotton now held by the two organizations. On Sept. 5 1932 the Farm Board itself confirmed
'the arrangement and stated that of the 650,000 bales of
cotton proposed to be marketed by the Cotton Stabilization
Corporation prior to July 31 1933, more than 300,000 bales
had been sold. The Corporation would immediately withdraw its remaining stocks from sale until March 1 1933,
with the exception of certain small amounts now on consignment in foreign countries, and such cotton as might
be sold at 12c. per pound or more, based on the near month
of the New York Cotton Exchange. The American Cotton
Co-operative Association would maintain its present stocks
until July 31 1933, with similar exceptions for sales at the
'above prices.
A survey of the situation at that time appeared to show
that while the Farm Board originally held approximately
1,300,000 bales of cotton, through the Cotton Stabilization
Corporation, 500,000 bales of this was assigned to the Red
Cross and of the 650,000 bales proposed to be marketed by
the Cotton Stabilization Corporation prior to July 1 1933
more than 300.000 bales were sold during August 1932 before the change in policy occurred, leaving, therefore, less
than 500,000 bales remaining out of the total of 1.300,000
bales; in addition, about 1,400,000 bales, it was estimated,
were then in the hands of the Cotton Co-operatives. All of
this seemed to preclude the likelihood of these accumulated
stocks of cotton in the hands of the Government coming
on the market as an additional depressing factor in the
trade. Nevertheless, it proved impossible to prevent a new
downward plunge in prices. As a matter of fact, market
values began to tumble almost from the day news was received that the Reconstruction Finance Corporation had
come to the rescue with a loan of $50,000,000. At all events,
cotton reached its highest price on Saturday, Aug. 27, and
Monday, Aug. 29, just before definite word was received
on Monday night, Aug. 29, of the $50,000,000 loan. Spot
cotton in New York on both the days referred to sold at
9.20c., while on Sept. 17 it was down to 6.80c., and in November and December repeatedly was quoted below 6c. a pound,
and enduring recovery did not again come until after the
re-opening of the banks the succeeding March, following
the general closing down early that month. The main depressing influence was the growing prostration of trade and
business throughout the United States, as a result of which
commodity prices generally kept dropping lower and still
lower, though there was really no diminution, even early
In the season, in the actual consumption of cotton, the very
low prices recorded acting as a stimulus to buying.
The downward plunge, too, during that period continued
notwithstanding further efforts on the part of Government
agencies to aid and relieve the cotton planter in various
ways. Thus, on Oct. 5 1932, the Department of Agriculture
announced a plan for extending crop production loans in
cotton States by accepting the staple as collateral on flu,

Volume 137

Financial Chronicle

basis of 9c. a pound on middling uplands %-inch. In "certain areas" the Department, it was stated, would allow 9%c.
a pound on middling %-inch cotton. The announcement
made in behalf of the Department of Agriculture was given
out by Henry S. Clarke, Director of the 1932 Crop Production Loan Office, and said that at the request of a large
number of Senators and Congressmen, co-operative associations, and individuals in the cotton-growing States, the Secretary of Agriculture had agreed to liberalize the terms of
the Crop Production loans in these States for the relief of
the distressed cotton farmers. The plan, it was stated,
would ease the burden of repayment of such loans and should
result in improving the cotton market. The purpose of the
plan, it was set out, was "to encourage the storage of cotton,
relieving the pressure on the market, and assisting the
farmers to care for their families during the coming winter."
Borrowers who wished to take advantage of the collateral
plan •were to be required to deliever their cotton to the
Cotton Co-operative Association or to Federal bonded warehouses. All cotton so collateralized had to be accompanied
by an agreement signed by the borrower whereby he reserved
the right of selling such cotton at any time prior to March 1
1933, and authorized the Secretary of Agriculture to sell
the same in his discretion at any time subsequent to that
date. When the cotton was finally sold, the borrower was
to be credited with the proceeds of the sale in the event
that the proceeds were not sufficient to pay the full amount
of the loan. The balance was to remain, however, as an
obligation of the borrower.
All this did not serve to prevent a further shrinkage in
the price of the staple, and at the end of October the New
York spot quotation was 6.15c., and at the end of November
5.95c., while at the beginning of December the quotation
dropped to 5.70c., though it should be stated that the Department of Agriculture, which had put its estimate of the
growing crop on Sept. 1 about the same as on Aug. 1, namely
at 11,310,000 bales, as against 11,306,000 bales, on Oct. 1
raised the prospective yield to 11,425,000 bales, and on
Nov. 1 further increased it to 11,947,000 bales, and in
December, in its final return for the year, issued on Dec. 8,
further raised its estimate of the prospective 1932 yield to
12,727,000 bales [the ginning report the following spring
made the count in running bales 12,709,647 bales, and in
the equivalent of 500
-pound bales at 13,001,508 bales, which,
notwithstanding the increase, was nevertheless far below the
exceptional crop of the previous season, when the product
was 17,095,594 bales of 500 pounds].
Efforts, however, to relieve the agricultural interests of
the country continued unabated, and on Jan. 12 1933 the
House of Representatives, by a vote of 203 to 151, passed
the Jones Bill for Farm Relief, intended to restore pre-war
farm prices. The bill undertook to fix immediately, and
later to stabilize, the farm price of wheat, cotton, hogs,
tobacco, peanuts, butter fats and rice to a point bearing the
same relation to the general commodity price level that they
bore in pre-war days. This was to be accomplished in the
main by a processing tax on those products and by division
of the receipts among all the farmers raising the specific
products who agreed to cut their acreage. The aim was to
give to the grower, in the initial marketing period, 75c. a
bushel for wheat and 9c. a pound for cotton, and specifically
named prices for the other products and in subsequent
marketing years the "fair exchange value" determined by
the Secretary of Agriculture in accordance with the provisions of the bill. Deleting all provisions relating to hogs,
tobacco, butter, butter fat, rice and peanuts and rejecting
proposals for acreage control the Senate Agricultural Committee on Feb. 15 ordered a favorable repert on the measure, limited to wheat and cotton. No further progress, however, was made with the measure, and it died with the
adjournment of Congress on March 4.
On Feb. 11 1933 the Agricultural Committee of the United
States Senate voted to make a favorable report on the Smith
Bill (so-called because sponsored by Senator E. D. Smith of
South Carolina), designed to cut 1933 cotton production by
3,500.000 hales. The bill provided for a 3,500,000-bale Government pool, to comprise all cotton which the Farm Board
and other Federal agencies controlled. A share in this
would be allotted to producers who cut their production
30%. Out of this share it was reasoned the cotton farmer
would profit by the difference between the current price
and the price after Aug. 15, it being assumed that cotton
prices would rise because of the resulting smaller crop.
On Feb. 15 1933 the Senate Agricultural Committee, as just




2341

noted, also ordered a favorable report on the so-called domestic allotment plan, but confining its operations to wheat
and cotton. The Committee likewise eliminated the socalled "parity plan" and wrote into the bill the flat provision that growers should receive 12.4c. per pound for
cotton and 88.4c. per bushel for wheat, reaching this arbitrary figure by establishing it as the same as the 1909-14
average. The bonuses paid to growers of these• two commodities would be recovered by the Government through
taxes levied on processers or manufacturers of products
made for wheat and cotton. The Smith Bill passed the Senate on Feb. 18 and was approved by the House on Feb. 28,
with some amendments, in which amendments the Senate
concurred on March 1, but President Hoover killed the
measure with a pocket veto as the life of the old Congress
expired on March 4 1933. Somewhat similar measures
found their way into the statute book several months later,
when the new Congress functioned under President Roosevelt, but at this stage of the proceeding neither the grain
trade nor the cotton market paid much attention to these
measures. Nor did the cotton market take much notice of
the signing on Feb. 8 1933 by President Hoover of the bill
authorizing distribution of 350,000 bales of Governmentowned cotton to the American National Red Cross and other
organizations for relief of the distressed. Congress in the
previous July (1932) had provided 500,030 bales for the
same purpose, taking the cotton likewise from the stabilization stocks accumulated by the Farm Board. The price of
cotton, however, continued to rule low.
With the advent of the Roosevelt Administration to control of the Government, on March 4 1933, new schemes of
legislation for the relief and assistance of the cotton
planter came to the front, some of them not radically different from those which were•proposed in the old Congress,
and these were pushed with great rapidity and became laws
in ghort order. These we shall enumerate as we proceed
with this narrative of events. It seems pertinent, however,
to observe at this juncture that with the re-opening of the
banks after the general bank suspensions all over the
United States under Presidential decree, general trade and
business enjoyed immediate revival and business activity
grew apace. This, along with the program of inflation
promulgated by the Washington Administration, provided
a basis of recovery which so improved the cotton goods
situation, and the cotton goods industry—the price of
cotton rising with great rapidity—that the need for artificial aids to lift prices completely disappeared, and after
the legislation provided for the purpose had become effective
the Government could well have dropped recourse to the
same, or at least have deferred action under them for another year, as permitted by the laws themselves. However,
the Administration saw fit to put them into operation, and
its program for carrying them into effect, not only constitutes an important part of the history of cotton and the
cotton industry for the year, but unquestionably exercised
a very potent influence in shaping its course. For one thing
there never could :have been such a prodigious advance
in goods prices except for the processing tax and the store
tax which the Government imposed as a result of the new
legislation—even allowing for the fact that the inflationary
policy decreed by Washington was sure to swing the cotton
goods industry forward along with all other industries.
On March 22 1933, the House of Representatives at Washington, by a vote of 315 to 98, passed a Farm Relief Bill
urged for enactment by President Roosevelt in a special
message sent to Congress on March 16. With reference
to this measure, the President said that the "deep study
and the joint counsel of many points of view have produced
a measure which offers great promise of good results," and
he added: "I tell you frankly that it is a new and untrod
path, but I tell you with equal frankness that an unprecedented condition calls for the trial of new means to rescue
agriculture. If a fair administrative trial of it is made
and it does not produce the hoped-for results, I shall be
the first to acknowledge it and advise you." The bill was
favorably reported to the House on March 20 by the House
Committee on Agriculture. On March 21 the House, after
extended debate, voted 184 to 102 to consider the bill under
drastic procedure prohibiting amendments and forcing a
vote after four hours' discussion, thus assuring the passage
the next day of the Administration's proposal which then,
as stated, was approved by the House by a vote of 315 to 98.
The bill was rushed through with great rapidity, and
Associated Press advices from Washington, March 22, said

A.2342

Financial Chronicle

that actual details of the measure had been discussed only
casually. The bill's chief purpose was a grant of power
to President Roosevelt and Secretary Wallace to be employed in boosting farm buying power. In the Senate the
bill remained under consideration by the Agricultural Committee the rest of the month, not being reported to the
Senate until April 5.
Incidentally, it may be remarked at this point that on
March 27 President Roosevelt sent another special message
to Congress in which he transmitted an executive order
reorganizing the Agricultural credit agencies of the United
States. The President said: "This executive order consolidates in one agency—the Farm Credit Administration—the
functions of all present Federal organizations which deal
primarily with agricultural credit, namely, the Federal
Farm Board, the Federal Farm Loan Board, the functions
of the Secretary of Agriculture with regard to loans in
aid of agriculture, and those of the Reconstruction Finance
Corporation pertaining to the management of regional agricultural credit operations. The functions of the Federal
Farm Board with regard to the further stabilization operations are abolished by the order." Henry Morgenthau Jr.,
the Chairman of the Federal Farm Board, was named as
the head of the Farm Credit Administration. On March 30
Mr. Morgenthau announced that the Farm Board had ordered the liquidation of its commodity loans in both wheat
and cotton. This was at first taken to mean that some
1,600,000 bales in the hands of cotton co-operatives would
be put on the market. Another view, however, came to
the fore at this time. It was argued that if the Smith Relief Bill were enacted Government holdings would not be
dumped on the market, but would be withheld for the time
being. All this served to indicate the confused situation
existing regarding the working of the Relief Bill when
it became a law. In this situation the price of raw cotton
moved rapidly downward the latter part of the month, after
some display of strength in the early part. The close for
spot cotton in New York on March 31 was 6.30c.
Things now moved with great expedition. April proved
an eventful month, not alone in its bearing on the cotton
situation, but on the economic and financial structure of
the entire country. It saw the United States pass off the
gold standard to which it had consistently and persistently
adhered ever since the resumption of specie payments on
Jan. 1 1879, and it saw this done, not because of a shortage
of gold supplies within the country. but as a deliberate
matter of policy. It saw the action viewed, not as occasion
for deepest regret, but treated as an event for rejoicing,
with the great mass of the population according it approval,
and with the stock and commodity exchanges manifesting
unrestrained buoyancy, accompanied by most spectacular
advances in prices. It was on April 19 that public admission came that the Government meant to let the international value of the dollar shift for itself, and that the
purpose henceforth would be to make sure that the value
of the dollar should become so depreciated as to bring about
a commensurate rise in the general level of prices in the
United States. The result was a drop in foreign gold
values of the American dollar of startling dimensions. To
cap the climax, and to emphasize the fact that the Administration meant no longer to pay any attention to the foreign
value of the dollar, legislation was determined upon of a
most startling character designed to bring about credit and
currency inflation, with the view to raising the general level
of prices in this country. This new legislation was introduced in the Senate late on Thursday, April 20, by Senator
Thomas of Oklahoma as an amendment to the Farm Relief
Bill. On Friday, April 28, the Senate passed this Thomas
amendment to the Farm Relief Bill. Then by an almost
Identical vote approved the Farm Relief Bill itself. It
authorizes the President to initiate various measures for
"controlled inflation." The vote on the inflation amendment was 64 to 21, and that on the Farm Relief Bill, with
the amendment attached, 64 to 20. The price of cotton
now moved up with great rapidity, and the New York spot
quotation April 29 (April 30 was Sunday) was 7.90c.
against 6.30e. March 31.
In May a further stimulus to rising prices was the fact
that the fear of any dumping of Government holdings upon
the market, which had been so long an incubus on the
course of prices, was c(mpletely eliminated, the Farm Board
having disposed of the last of its holdings of both cotton
and wheat, while the holdings of cotton against which loans
had been made by the Farm Board were turned over to




•

Sept. 30 1933

the Secretary of Agriculture under the Farm Relief Act
to be held by him under the provisions of that Act. Accordingly, May 31 saw the New York spot quotation up to 9.35c.
The Farm Relief Bill, with the Thomas inflationary rider, •
became a law on May 12, with the signing of the bill by
the President. The House vote May 3 on the inflation
rider showed 273 Democrats, 30 Republicans and 4 FarmerLaborites casting affirmative ballots with 7 Democrats and
79 Republicans against the proposition. Under the provisions of the rider the President is authorized to arrange
with the Federal Reserve banks for the purchase of United
States Government securities to an aggregate of $3,000,000,000, in addition to the amount held at the time of the
approval of the Act, also to issue United States notes similar to the greenbacks during the Civil War period up to
$3,000,000,000 to retire Government obligations, of which 4%
would be canceled annually; likewise to reduce the gold
content of the dollar not to exceed 50%. The inflationary
rider also provides for the unlimited free coinage of silver
at a fixed ratio with the gold dollar, this ratio to be determined by the President. In addition, the President is authorized to accept silver up to $200,000,000 for a period of
six months in the payment of war debts due to the United
States, the silver to be valued up to 50c. an ounce—far in
excess of the current market price of the metal, the whole
providing the broadest kind of a scheme of inflation. But,
as if this were not enough, a joint resolution was introduced in Congress at the instance of the Administration
completely abolishing gold payments and making any kind
of coin or currency issued by the Government legal tender
for the payment of public and private debts, past, present
and future.
As already stated, the cotton trade during May was
relieved of the fear of any dumping of Government holdings
of the staple. On May 12 Henry Morgenthau Jr., Chairman
of the Federal Farm Board and Governor-designate of the
Farm Credit Administration, who had from the first evinced
a disposition to get rid of the remaining Government holdings of both wheat and cotton, announced that the last remaining cotton of the Cotton Stabilization Corporation
would be sold to the highest bidder at the Corporation's
office at New Orleans on May 16. This proved to be 19,306
bales of cotton belonging to the Cotton Stabilization Corporation, all in storage at various foreign locations. Storage
and carrying charges had been constantly accruing on this
foreign consignment of cotton ever since it was shipped
abroad the previous year. Mr. Morgenthau said the Farm
Board thought it wise to dispose of it so that the affairs
of the Cotton Stabilization Corporation might be completely
liquidated. All other remaining stocks of cotton of the
Corporation, it was pointed out, were in process of delivery
to the Red Cross for relief purposes as directed by Congress.
It was stated at the same time that the only other cotton to
which the Farm Board bad a claim was that pledged as
collateral in the 1930-31 season by the American Cotton
Co-operative Association and the Staple Cotton Co-operative Association. There was 1,557,000 bales of this cotton,
upon which the Farm Board had made loans to permit
advances to growers of 90% of the market value at the
time the advances were made in the case of the American
Cotton Co-operative Association cotton and 80% in the case
of the Staple Association cotton. By the provisions of the
Farm Relief Act the cotton held by the subsidiary corporations was to be acquired by the Secretary of Agriculture
and held for disposal to planters who agreed to reduce their
acreage in accordance with the terms of the Relief Act and
in pursuance of regulations issued by the Secretary of
Agriculture.
Further action under the Farm Relief Bill was not slow
In coming. Congress adjourned in the early morning hours
of June 16, with the largest program of new legislation
to its credit ever devised or carried through in peace times.
The most important piece of legislation not previously mentioned was no doubt the National Industrial Recovery Act,
which the President approved on the day of adjournment,
and which provides for Federal control of private business
for the revival of industry and also for a $3.300,000,000
program for expenditures on public works. Another measure was the Home Owners' Mortgage Relief Act, making
$2.000,000.000 available for the refinancing of mortgages of
small home owners. This latter provides for the establishment of a quasi-Federal agency to be known as the Home
Owners' Loan Corporation, with a capital of $200,000.000
subscribed in full by the Treasury and authorized to issue

Volume 137

Financial Chronicle

2343

up to $2,000,000,000 in 4% bonds guaranteed by the Governprocessing tax was fixed at 4.2c. a pound on cotton and
ment as to interest but not as to principal.
became effective Aug. 1. Levied to pay farmers cash beneAs far as cotton is concerned, the price of the staple now fits for reducing their acreage, it is to be collected from
spurted still higher with great rapidity in the general up- the manufacturer on the amount of cotton he converts into
ward movement of all commodity values, influenced very finished material. This processing tax was estimated to
largely by the spectacular slump of the American dollar as yield about $120,000,000. Mr. Wallace said that he expected
expressed in the terms of foreign currency units, this shrink- at least $100,000,000 would be paid to cotton farmers in the
age in the dollar value abroad being looked upon as part 16 States during the ensuing six weeks in return for their
of the general scheme of inflation by which the Washington agreements to reduce their acreage from 25% to 50%.
Administration was undertaking to establish a permanently George N. Peek, Chief Administrator, said that about 60%
higher level of values in this country. The latter part of of the growers showed a preference for the payment method
June the spot price of cotton in New York ruled above 10c. a under which they are given cash payments together with an
pound, and on certain days when the depreciation of the option on Government held cotton equal to the estimated
dollar became especially pronounced, the upward flight of
production of the land they offered to take out of producthe staple reached spectacular proportions. The ordinary
tion. He said that 2,000,000 bales available for this purspeculator now became active, and in July spot cotton in pose would be used to give growers options. The other 40%
New York sold as high as 11.75c. on the 18th of the month, preferred cash payments in proportion to the estimated
under the speculative fever that was then raging through
yield of the land they agreed to plough up. On July 17 it
all the commodity markets as well as on the Stock Ex- was made known by the Agricultural Adjustment Adminischange, but was doomed to be quickly followed by a col- tration that over 10,000,000 acres of cotton had been pledged
lapse all around, the result of which was that the spot for abandonment. It appeared that when the cotton processprice of cotton July 31 was back to 10.00c., and in August ing tax of 4.2c. a pound became effective on Aug. 1 a floor
(1933) dropped still lower. The Government tried in
tax on cotton goods also became effective on stocks in the
every way to extend assistance and on July 2 press accounts warehouses of spinners, manufacturers and wholesalers. It
from Washington stated that arrangements for loans of
was pointed out that retailers would have 30 days before
from $3,000,000 to $4,000,000 by the Reconstruction Finance the tax became effective on their stocks, but they would be
Corporation to finance the sale of 60.000 to 80,000 bales of required to submit an inventory of cotton materials on hand
cotton for shipment to Soviet Russia had been arranged. as of Aug. 1. This inventory could then be checked against
It was stated that under the terms of the loan the cotton the goods on hand 30 days later.
purchases were to be made in the open market and not
Carrying information with regard to Government operafrom any holdings of Government agencies. This provision, tions beyond the close of the crop year on July M. down to
it was noted, was included also in the agreement to extend
the present time, note must be made of the fact that Washthe loan for shipment of cotton to China. It might be ington dispatches, Aug. 1, stated that a $30,000,000 loan by
added here that on Sept. 16 press dispatches stated that the a group of private bankers, beaded by the Chase National
Reconstruction Finance Corporation was now completing
Bank of New York and the Guaranty Trust Co., was made
plans to extend a further credit of $50,000,000 to $75,000,000 to the Agricultural Adjustment Administration to finance
to the Soviet Government to be based on the purchase of the purchase of 1,019,814 bales of spot cotton from the Farm
American commodities, including cotton, copper and
Credit Administration. The loan was granted in two inaluminum.
stalments of $15,000,000 each, the first loan of $15,000,000
Definite, information came in July as to the method by
to bear interest at the rate of 2% and to run for 45 days,
which the Farm Administration meant to proceed for the and the second loan to run for 90 days at the rate of 2%%.
relief of the cotton grower. On July 19 Oscar Johnston, The cotton purchased by the Agricultural Adjustment Ad- .
Director of Finance, who was handling the negotiations for ministration from the Farm Credit Administration plus certhe Agricultural Adjustment Administration, stated that tain carrying charges, was to go, it was stated, into the
contracts had been completed for immediate delivery of general pool for option by farmers who signed agreements
1,019,184 bales of actual cotton and 455,200 bales of cotton
with the Secretary of Agriculture to reduce the current seafutures, and that delivery was expected some time between son's cotton acreage. It was stated in Washington advices,
Aug. 1 and Aug. 5 of between 150,000 and 200,000 bales, Aug. 1, to the New York "Times" that Sc. a pound was paid
making an available total of more than 1,624,384 bales. It for the old Farm Board holdings, which had been originally
was added that in addition to this amount of cotton the
acquired at 9%c., and to prevent a $54,000,000 loss to the
Farm Credit Administration was endeavoring to acquire Credit Administration, the Adjustment Administration paid
a title to an appreciable portion of the 788,000 bales of cot- the remaining 41 c. from its $100,000,000 fund provided by
,
ton upon which the Government held crop production loan the NRA.
liens. Acquisitions from this source, added to the cotton alPurchase of future contracts for 19.800 bales of cotton for
ready delivered, would provide sufficient cotton to cover the the account of the Secretary of Agriculture to offset
sale
options to producers who had agreed to reduce production. in the open market previously held as collateral for GovMr. Johnston stated that in the case of returns from some ernment crop and seed loans was reported on Aug. 3 by
900,000 producers submitting offers, between 500,000 and Governor Henry Morgenthau Jr., of the Farm Credit
Admin600,000 had asked for cotton options. It was estimated that istration. It was stated that of the 872,000 bales of
stored
the Government's requirements could not exceed 2,300,000 cotton held as collateral for such loans about
75,000 bales
bales, and that figure probably would be scaled down appre- had been sold by permission of farmer
borrowers, or reciably when some contracts were rejected because of legal leased for sale. The transactions, it was
pointed out, were
or other defects, or when growers in some cases might fail a part of the process of acquiring title
to cotton against
to carry out the terms of their offers. The reductions from
which Government agencies held claims, so that the Secrethose sources should reduce the amount of cotton required
tary of Agriculture might fulfill cotton option contracts
to cover these options to between 2,000,000 and 2,250,000 bales. in the acreage reduction program.
There was considerable uncertainty the early part of July
The Agricultural Bureau in its report on the acreage
as to whether enough cotton planters would sign the agreeplanted to cotton issued on July 8 put the area planted for
ment to plough under a portion of their acreage to make it the growing crop at
40,798,000 acres which compared with
possible for the Administration to put through its acreage 36,542,000 acres in
cultivation on July 1 of the previous
curtailment scheme. On July 8 President Roosevelt apyear, being an increase of 11.6%. This showed no disposipealed to cotton growers of the country to join in the Admin- tion on the part of
planters to make any curtailment at
istration's acreage reduction program as a "patriotic duty." all and in the view
of the Washington Administration
The appeal was embodied in a letter addressed by the
rendered action on its part imperative. The scheme for
President to Secretary of Agriculture Wallace, who broad- acreage reduction by means
of the processing tax, is outcasted it in a speech from Washington. Following the close lined above. In its return for August
1 the Department of
at midnight, July 13, of the Administration's cotton acreage Agriculture made the indicated area for harvest
29.704,000
reduction campaign, it was announced on July 14 that the
acres and said that this indicated area for harvest was
efforts toward curtailment had been successful, and that the estimated area in cultivation July 1
less the probable
processing taxes would be levied on the staple and on com- removal of 10,304,000 acres through the program
of acreage
peting products, including rayon. Secretary Wallace said reduction of the Agricultural Adjustment
Administration,
that enough growers had agreed to cut their acreage to less 10
-year average abandonment on the acreage not under
reduce this year's potential crop by about 3.500,000 bales. contract. In its return for Sept. 1 the acreage
removed
The tentative goal had been set at 3,000,000 bales. The was raised from 10.304,000 acres to
10,396,000 acres and it




was estimated that 1.2% of the remaining acreage had been
abandoned or less than usual, leaving the net area in cultivation 30,036,003 acres. Conditions for the new crop have
been exceptionally favorable affording the promise of an
unusually high yield per acre as compared with a relatively
low yield in the case of the 1932 crop. The Department
estimated the probable yield of the 1933 crop as of Aug. 1
at 12,314,000 bales, and as of Sept. 1 at 12,414,000 bales.
It will be seen that throughout the whole of the crop
year 1932-33 under review, and beyond, Government operations played an unusually prominent part in affecting the
cotton situation, just as was the case in the crop seasons
Immediately preceding.

In the following we show the New

York price of spot cotton for each day of the season of
1932-33 compiled from the records of the New York Cotton
Exchange.
DAILY PRICES OF MIDDLING UPLAND SPOT corroN IN NEW YORK
FOR SEASON OF 1932-33.
Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July
Month
and Year. 1932. 1932. 1932. 1932. 1932. 1933 1933 1933. 1933. 1933. 1933. 1933.
Days1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
ao
31

C.
6.05
5.90
6.00
5.95
6.0C
6.20
gun.
7.05
7.00
7.15
7,50
7.20
7.35
Sun.
7.50
7.55
7.45
7.60
7.50
7.60
Sun.
7.75
7.80
8.30
8.45
8.65
9.20
Sun.
9.20
8.70
S44)

c.
8.75
8.90
8.90
Sun.
Hol.
8.95
9.00
7.15
8.10
8.10
Sun.
7.75
7.40
7.25
7.25
7.05
6.80
Sun.
6.90
6.95
7.50
7.50
7.35
7.45
Sun.
7.50
7.50
7.40
7.00
7.25

C.
7.05
Sun.
7.15
7.15
7.10
7.05
7.05
6.65
Sun.
6.65
6.80
Hol.
6.45
6.55
6.50
Sun.
6.35
6.35
6.45
6.35
6.30
6.25
Sun
6.20
6.25
6.40
6.45
6.35
6.20
Sun.
6.15

C.
6.10
6.10
6.10
6.20
6.45
Sun.
6.30
Hol.
6.15
6.45
6.15
6.55
Sun.
6.40
6.40
6.40
6.40
6.35
5.90
Sun.
6.15
6.70
6.05
Hol.
5.90
6.25
Sun.
5.80
6.00
5.95

C.
5.95
5.80
5.75
Sun
5.70
5.80
5.75
5.75
5.90
5.90
Sun
5.95
5.90
6.20
6.00
6.00
6.15
Sun.
6.10
6.10
6.00
5.85
5.95
Hof.
Sun.
Hol.
5.95
6.00
6.15
6.10
Hol.

C.
Sun
Hol
6.10
6.30
6.25
6.25
Hol
Sun
6.30
6.40
6.25
6.25
6.25
6.25
Sun.
6.15
6.30
6.20
6.25
6.25
6.25
Sun.
6.30
6.30
6.25
6.20
6.25
6.25
Sun.
6.10
6.00

C.
5.90
5.90
6.00
5.95
Sun.
6.00
6.05
6.05
6.15
6.15
6.10
Sun.
Hol.
6.00
6.05
6.05
6.15
6.15
Sun.
6.15
6.10
Hol.
6.05
6.15
5.95
Sun.
6.05
6.05

C.
6.15
6.10
6.35
*
Sun.
*
*
•
*
*
*
Sun.
•
a
•
6.85
6.55
6.55
Sun.
6.55
6.25
6.35
6.45
6.50
6.45
Sun.
6.25
6.40
6.30
6.35
6.30

c.
6.40
Sun.
6.40
6.45
6.50
6.60
6.55
6.55
Sun.
6.60
6.75
6.70
6.85
Hot.
Hol.
Sun.
6.70
685
7.25
7.45
7.50
7.60
Sun.
7.65
7.60
7.60
7.60
7.50
7.90
Sun.

C.
C.
C.
8.25 9.35 10.30
8.25 9.25 Sun.
8.30 9.10 10.40
8.30 Sun Hol.
8.55 9.30 10.25
8.60 9.15 10.50
Sun. 9.25 10.30
8.40 9.10 10.25
8.35 9.25 Sun.
8.65 9.35 10.75
8.95 Sun. 10.65
8.95 9.45 11.55
8.85 9.40 11.40
Sun. 9.35 11.60
8.70 8.95 11.40
8.65 9.25 Sun.
8.75 9.05 11.65
8.60 Sun. 11.75
8.50 9.35 11.35
8.25 9.25 10.55
Sun. 9.40 10.10
8.40 9.35 10.20
8.60 9.50 Sun.
8.70 9.60 10.55
8.55 Sun. 10.50
9.00 10.45 10.65
9.15 10.40 10.90
Sun 10.25 10.50
9.20 10.15 10.50
Hol 10.15 Sun.
10410
9.35

*bank moratorium; Cotton Exchange closed

To indicate how the prices for 1932-33 compare

with those

for earlier years, we have compiled from our records the following, which shows the highest, lowest and average prices of
middling uplands in the New York market for each season.
Low. Average,
Low. Average.
High.
High.
C.
C.
c.
C.
C.
C.
16.45
15.37
12.40
1932-33
11.75
7.37 1909-10
5.70
111:42
1931-32
13 15
8.15
9.00
6.34 1908-4/9
5.00
11.39
1930-31
13.55
13 15
9.90
10.38 1907-08
8.25
11.48
13.50
12.45
19 55
9.60
16.60 1906-07
1929-30
11.20
9.85
19.73 1905.06
12.60
17.65
1928-29.-21.65
913
11.65
6.85
20.42 1904-05
17.00
1927-28 ____23.90
12.58
15.15 1903-04
17.25
9.50
1926-27
12 IS
19.20
10 26
8.30
20.38 1902-03
13.50
1925-26....._24.75
17.85
24.74 1901-02
9%
11424-25.
22.15
9fi•
31.50
7"1.
934
12
31.11 1900-01
23 50
3785
8111
1923-24
9%
6%.(
26.30 1899-1900_10%
20.35
31.30
1922-23
6%
5fis
18.92 1898-99
611.
23.75
1921-22
12.80
8%
17.95 1897-98
13sui
buil
1920-21
10.85
40.00
8%
38.25 1896.97
711is
711s
1919-20
28.85
43.75
31.04 1895-96
854
7fis
954
25.00
19113-19 .......33.20
59 4
29.65 1894-95
,
0 11
754
21.20
1917-18
36.00
19 12 1893-94
91$
8
13.35
1Iss
7
61fis
27.65
1916-17
10
fila
11.98 1892-93
9.20
7114
13.45
1915-16.
8a"
807 1891-92
61111
7%
1914-15
7.25
10.60
124
9%
8
13.30 1890-91
11.90
1913-14
1450
this
1254
1031
12.30 1889-90
10.75
1912-13 ...._..1340
103ta
10.83 1888-89
11gis
920
954
191I-12....1340
15.50
12.30
19.75
1910-11
In the following table we also show the price of printing
-inch, 64 x 60, at Fall River each day of the season:
cloth, 28
-INCH 64 x 60) AT FALL RIVER
DAILY PRICES OF PRINTING CLOTHS(28
FOR SEASON OF' 1932-33.
Month Aug. Sept. Oa. Nov. Dec.
&Year. 1932. 1932. 1932. 1932. 1932.
Days- c.
1 ____ 2fis
2 ____ 2fis
3 __ 27.,
4 ____ 255
5 .... 235
255
7 ---_ Sun.
8..._ 254
- 234
9
_ 2%
10
11 ____ 2%
12 __ 232
I3..___ 2%
14_U Sun.
15 ____ 23.4
_ 2%
16
17 ____ 2%
18 .._ 251
234
20...._ 2%
21 ____ Sun.
22 ____ 254
23..___ 2.74
24____ 3
25....__ 3
26......_ 335
27....... 3.51
28 ____ sun.
29 ____ 3%
30 ____ 334
21

Sept. 30 1933

Financial Chronicle

2344

21(

e.
3%
352
334
Sun.
Fol.
3si
334
334
3%
334
Sun.
354
335
354
354
3
3
Sun.
3
3
3
3
3
3
Sun.
3
3
3
3
3

c.
3
Sun.
3
3
3
3
3
3
Sun.
3
234
Hol.
2%
235
234
Sun.
2%
251
2%
2%
2%
2%
Sun.
234
232

251

2%
234
2%
Sun.
244




C.
254
254
254
2%
254
Sun.
234
Hol.
2fis
2fis
Da
2fis
Sun.
2fis
2fis
2fis
2fis
2fis
2fis
Sun.
235
254
255
Hol.
254
255
Sun.
254
255
2fis

Jan.
1933.

c.
c.
2fis Sun.
2fis Hol.
234
2fis
255
Sun.
2%
234
234
2%
234
255
234 Sun.
235
234
255
254
2%
Sun.
254 271442%
255 27,s@234
2% 211.4[4)255
234 Sun.
254 27 s15234
255 2fie15255
Sun. 2fie@2%
2fis
235
2fis
235
2fis
234
235 Sun.
2/ss
235
2fis
255
2fis
Sun.
VI,
255
2%
255
2%
235
235 Sun.
255
254
214
MA

Feb. Mar. Apr. May June July
1933 1933 1933. 1933. 1933. 1933.
c.
255
254
234
2fis
Sun
2fis
231
2/1
2/1
234
255
Sun
Hol
254
234
255
234
2%
Sun.
23',
255
Hol.
254
255
255
Sun.
234
255

e.
2%
254
254
254
Sun.
255
255
234
255
255
2%
Sun.
255
2%
2%
2%
2%
2%
Sun.
234
255
235
255
255
254
Sun.
234
254
255
254
234

c.
254
Sun.
254
2%
255
23',
235
255
Sun.
234
234
234
2%
255
234
Sun.
2%
255
2%
2%
2%
234
Sun.
3
3
3
3
3
334
Sun.

C.
334
3%
3fis
37,
3fis
351
Sun.
3.32
3.31
3%
354
355
355
Sun.
355
334
355
334
3%
3%
Sun.
354
355
334
3%
4
432
Sun.
432
Hoi.
434

c.
4%
4%
41.4
Sun.
4%
434
432
4%
431
434
Sun.
431
4%
454
454
454
434
Sun.
455
435
454
454
455
455
Sun.
435
455
454
4%
4%

c.
4%
Sun.
434
Hol.
4%
in
,
4%
4%
Sun.
4%
4%
4%
5
5
5
Sun.
554
5%
534
5%
4%
434
Sun.
4%
4%
434
454
4%
4%
Sun.
434

We likewise subjoin the following compilation to show the
range of prices of printing cloths for a series of years. Like
the table above it sets out the highest and lowest quotations
for 64 squares 28
-inch printing cloths at Fall River and covers
each of the last 38 seasons-1895-96 to 1932-33, inclusive.
MO. Low.
High. Low.
High. Low.
C.
Cis. Cis.
1932-33_ -- 5
.flb 1906-07-- 5.25 3.38
1
C
,
2 1, 1919-20.-1711 11
32-- 3% ',711 1918-19.-13.00 6.75 1905-08-- 3.81 3:37
19311930-31-- 4% 354 1917-18-14.00 7.2r. 1904-05-- 3.50 2.62
1929-30„-- 534 434 1916-17- 8.00 4.2.5 1903-04-- 4.12 3.00
1928-29-- 6% 534 1915-16-- 4.25 3.25 1902-03-- 3.37 3.00
1927-2
8--1914-15-- 3.50 2.88 1901-02-- 3.25 2.37
1926-27--- 6
1913-14-- 4.00 3.62 1900-01---- 3.25 2.37
1925-26.... 7.00 5 00 1912-13---- 4.06 3.75 1899-00---- 3.50 2.75
1924-25--- 7.75 6.75 1911-12-- 4.00 3.12 1898-99-- 2.75 1.94
1923-248.75 6.85 1910
-IL.... 3.88 3.621897-98....- 2.62 1.94
1922-23-- 8.75 6.88 1909-10-- 4.25 3.62 1896-97-- 2.62 2.44
1921 -22---- 7.12 4.75 1908-09-_-- 3.62 3.00 1895-96-- 3.06 2.44
1920-21- -14.00 4.62 1907-08---- 5.25 3.00

Ri!

Record of Middling Upland Spot Prices of Cotton in
Liverpool.
The following table shows the price of middling upland
spot cotton in Liverpool for each day of the past season:
DAILY CLOSING PRICE OF MIDDLING UPLAND IN LIVERPOOL.
Month
Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July
and Year. 1932 1932. 1932. 1932. 1932. 1933. 1933. 1933. 1933. 1933. 1933. 1933.
Days1
2
3
4
5
e
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31

d.
Hol.
4.68
4.61
4.69
4.69
4.80
Sun.
4.87
5.27
5.22
5.48
5.51
5.54
Sun.
5.61
5.76
5.75
5.65
5.76
5.70
Sun.
5.85
6.02
5.98
6.39
6.45
6.76
Sun.
6.98
6.93
8.72

d.
6.50
6.57
6.85
Sun.
Hot.
7.20
7.00
7.10
6.38
6.44
Sun.
6.46
6.10
6.15
5.92
5.88
5.65
Sun.
5.58
5.59
5.67
6.13
6.07
5.94
Sun.
6.07
6.08
6.10
5.95
5.73

d.
5.87
Sun.
5.73
5.86
5.86
5.79
5.84
5.87
Sun.
5.55
548
5.69
5.64
5.43
5.55
Sun.
5.47
5.39
5.57
5.54
5.46
5.44
Sun.
5.48
5.56
5.52
5.61
5.62
5.59
Sun.
5.45

d.
5.43
5.37
5.42
5.39
5.55
Sun.
5.64
5.60
5.60
5.44
5.60
5.60
Sun.
5.56
5.47
5.54
5.61
5.61
5.53
Sun.
5.50
5.54
5.50
5.41
5.44
5.39
Sun.
5.39
5.35
5.38

d.
5.27
5.30
5.14
Sun.
5.12
5.15
5.17
5.03
5.04
5.14
Sun.
5.17
5.15
5.14
5.30
5.26
5.28
Sun.
5.32
5.21
5.21
5.15
5.07
1101.
Sun.
Hof.
Hol.
5.10
5.16
5.29
Hol.

d.
Sun.
Hol.
5.26
5.24
5.33
5.33
5.31
Sun.
5.30
5.25
5.32
5.27
5.30
5.27
Sun.
5.24
5.18
5.25
5.22
5.25
5.28
Sun.
5.22
5.14
5.14
5.16
5.15
5.18
Sun.
5.11
500

d.
5.02
4.93
4.94
4.94
Sun.
4.88
4.89
4.94
4.96
5.09
5.01
Sun.
4.99
5.02
4.89
4.97
4.95
4.95
Sun.
5.06
4.98
5.01
5.04
4.95
4.99
Sun.
4.90
4.85

d.
4.90
4.94
4.79
4.86
Sun.
4.72
4.79
4.99
5.00
5.17
5.18
Sun.
5.23
5.09
5.08
5.25
5.26
5.14
Sun.
5.13
5.15
5.05
5.08
5.13
5.10
Sun.
5.13
5.08
5.13
5.17
5.15

d.
5.06
Sun.
5.16
5.16
5.18
5.22
5.28
5.28
Sun.
5.31
5.35
5.35
5.37
Hol.
Hol.
Sun.
Hol.
5.36
5.29
5.27
5.30
5.33
Sun.
5.37
5.41
5.41
5.54
5.53
5.55
Sun.

si.
5.73
5.73
5.83
5.79
5.89
5.99
Sun.
6.01
5.87
5.96
6.12
6.19
6.18
Sun.
5.96
6.02
5.96
6.08
5.96
5.91
Sun.
5.88
5.99
6.12
6.05
6.07
6.27
Sun.
6.21
6.30
6.45

d.
6.28
6.37
Hol.
Sun.
Hol.
6.37
6.26
6.12
Hol
Hol
Sun
6.21
6.24
6.24
8.33
6.18
6.19
Sun
6.16
6.21
6.16
6.23
6.18
6.23
Sun
6.32
6.59
6.53
0.42
6.38

d.
6.42
Sun.
6.45
6.48
6.54
6.37
6.40
6.15
Sun.
6.01
6.15
6.21
6.45
6.33
6.45
Sun.
6.31
6.48
6.43
6.35
6.23
6.12
Sun.
6.13
6.23
6.18
6.30
6.47
6.37
Sun.
6.2

CARRY-OVER OF COTTON REDUCEb.
With consumption heavily increased, and running in excess
of the new growth, the carry-over of cotton into the new
)
season has been substantially reduced. Including linters t
carry-over of American cotton, July 31 1933 stands at
11,813,820 bales against 13,228,809 bales, on July 311932,
but comparing with 9,263,876 bales on July 311931; 6,888,584 bales July 31 1930; 4,918,523 bales on July 31 1929, and
5,526,486 bales on July 31 1928. Full details appear in the
table which we now append.
CARRY-OVER OF AMERICAN COTTON AT END OF SEASON.

Lint.
In U. B. consuming establishments
In U. S. public storage. &c
At Liverpool
At Manchester
At Continental ports
Afloat for Europe
Mills other than in United States (0)
Japan and China ports and afloat•
E.sewhere in United States (2)
Total lint cotton
Linters
In U. S. consuming establishments
In U.S. public storage. &c
Elsewhere in United States(a)
Total Unters

July 31
1933.

July 31
1932.

July 31
1931.

July 31
1930.

Bales.
Bales. Bales.
Bales.
1,299.150 1.164.011 921.428 1.047.946
5704,2456.661.021 4.491.068 2,803.801
391,000 263.000 357.000 245.000
44.000
63,000
69.000
89.000
822,000 592 000 691.000 432,000
78.000 123.000
300.000 180 000
1 266,000 1.395 000 954,000 937.000
450,000 500.000 350.000 300.000
1,080,000 1,760.000 850.000 470,000
11375395 12604038 8.761.496 6,402.747
321,694
31,731
85,000

301.689
53.082
270,000

253.657
48,713
200.000

238.747
87.090
160,000

438.425

624.771

502.380

485.837

11813820 13228809 9,263,876 6.858,584
• Estimated. a As animated by United States Census. 8 Taken from the
compilations of the International Federation of Master Cotton Spinners and Manufacturers' Associations.
Grand total

The foregoing figures deal solely with American-grown
But there are also considerable stocks of foreign

cotton.

-Bast Indian, Egyptian, Peruvian, &c. To make
cotton
the survey entirely complete these stocks of foreign cotton
must obviously also be taken into account. Such stocks
constitute a supply additional to the carry-over of AmeriFrom the statistics compiled by the International Federation of Master Cotton Spinners and Manu-

can cotton.

facturers' Associations it appears that the mill stocks of
foreign cotton during the late season were increased 548,000
bales. We bring the figures together in the following table,
and they show that there were 2,472,000 bales of foreign
cotton on hand in the mills throughout the world on July 31
1933, against 1,924,000 bales July 31 1932; 2,447,000 bales,
July 31 1931; 2,513,000 bales, July 31 1930; 2,734,000 bales
on July 31 1929, and 2,675,000 bales on July 31 1928.

Financial Chronicle

Volume 137

STOCKS OF FOREIGN COTTON AT MILLS.

MIll Stocks.

July 31
1933.

July 31
1932.

East Indian CottonBales.
European mills
250,000
Asiatic mills
1,249,000
Canada. United States.&c.
6,000
Elsewhere
3,000
Egyptian Cotton
European mills
182,000
Asiatic mills
30,000
Canada, United States, Oso.
18,000
Elsewhere
4,000
Sundry Cotton
European mills
303,000
Asiatic mills
283,000
Canada. United States.&e.
87,000
57,000
Elsewhere
Grand

9 479 owl

tntal

July 31
1931.

July 31
1930.

July 31
1929.

Bales.
Bales.
Bales.
Bales.
365.000
155.000
418,000
342.000
860.000 1.177.000 1,192,000 1,395.000
17.000
21,000
15.000
14.000
9.000
3.000
36,000
10.000
166.000
39.000
23.000
1,000

153,000
15,000
65.000
4,000

143.000
19.000
62,000
4,000

316.000
232.000
70.000
44.000
1

143.000
43.000
30.000
2,000
316.000
202.000
100.000
43.000

203.000
281.000
92.000
33,000

299.000
241.000
145.0110
60.000

024

rinn 2.447.000

2.513000 2.734 MA

In addition, however, to the mill stoCks of foreign cotton
there are also considerable stocks of foreign cotton at the
different ports in Europe, Asia and Africa. Here there
has been some further decrease the past season. Figures
regarding these stocks of foreign cotton at the different
ports in Europe, Asia and Africa are furnished every week
by us in our weekly statement of the visible supply of cotton
throughout the world, and from the statement for the end of
July we reproduce the following comparative table concerning these stocks for the past five years. It will be observed
that the port stocks of foreign cotton altogether were 1,790,000 bales July 311933, against 1,893,000 bales July 31 1932;
2,124,000 bales, July 311931; 2,313,000 bales, July 31 1930;
1,972,000 bales July 31 1929, and 1,934,000 bales July 31
1928.
STOCKS OF FOREIGN COTTON AT PORTS.
July 1933. July 1932. July 1031 July 1930. July 1929.
Bast/neon,&aril,dt4.Liverpool stuck
London stock
Manchester stock
Cont1 nental stock
Indian afloat for Europe
Egypt, Brazil, Ac., afloat.
Stock In Alexandria, Egypt
Stock I n Bombay,India_ _ _
Tntal tlage India ,as

Bales.
331,000

Bales.
327.000

Bales
417.000

Bales.
461,000

57,000
76,000
101,000
100,000
310.000
815,000

62.000
46.000
58.000
91.000
504.000
805.000

108.000
99,000
81.000
106.000
594,000
719.000

66,000
30.000
124.000
80.000
142.000
128.000
86.000
120.000
476.000
223.000
958.000 1.000.000

1 700 non

Bales.
391.000

1.893.000 2.124.000 2.313.000 1Q72 nun

It thus appears that in addition to the carry-over of
11,813,820 bales of American cotton on July 31 1933 there
were 2,472,000 bales of foreign cotton at the mills throughout the world and 1,790,000 bales of foreign cotton at the
ports, making the grand total of the carry-over of cotton of
all kinds 16,075,820 bales. This compares with 17,945,809
bales July 31 1932; 13,834,876 bales on July 31 1931; 11,714,584 bales on July 31 1930; 9,624,523 bales on July 31 1929;
10,135,486 bales on July 31 1928, and 1?,,086,588 bales on
July 31 1927. In tabular form the comparisons are as
follows:
CARRY-OVER OF COTTON OF ALL KINDS.
July 31
1933.

July 31
1932.

July 31
July 31
July 31
1931.
1030.
1929.
SummaryBales.
BOY.
Bales.
Bales.
Bales.
Carry-over of American__ 11,813,820 13,223.809 9,263,876 8,888,584 4,918,523
Carry-over of foreign
At mills
2,472,000 1,924.000 2,447,000 2,513.000 2,734,000
At ports, Ac
1,790,000 1,893.000 2,124,000 2,313,000 1.972,000
Grand total of all

16.075.820 17.041.809 13.834.876 11.714.584 9.624.523

THE COTTON TRADE OF THE UNITED STATES.
Startling contrasts in conditions occurred in the cotton
textile industry during the 12 months which ended on
July 31 1933. The point of extreme distress was reached
late in February and early in March of 1933, with the first
indication of a change noted at the end of the National
"bank holiday." The months of April, May, June, July
were four of the best months which cotton mills have known
in a long time-in many years for quite a few organizations.
It was early in April that the Black bill became conspicuous
-hour week. While it was not
in Congress, asking for a 30
felt that this particular piece of proposed legislation would
be passed, there was a fairly broad realization that along
the lines of a shorter work-week, the Administration hoped
to alleviate its unemployment problem. By the latter part
of April it became known that many cotton mills were operating night and day, at capacity, turning out every possible
yard, and straining every point to stretch this production
to the utmost. A number of mills which had not run
looms at night for several years joined the procession which
became quite formidable in May, and even more so during
June. The cotton consumption figures tell the story of
this period, wherein during several months the cotton
mills turned out a record output for all time, for a corresponding number of months. Zeal in production became
greater as it was evident that the NIRA was inevitable,




2345

and that this would place a maximum of 80 hours per week
on operation of machinery.
During this same period, starting in April and going
through July, prices on goods rose rapidly and sharply, to
the point where it was conceded that the average mill
made handsome profits
-enough to insure a good statement
for the first half of 1933.
The so-called "mill margin"
-meaning the spread between
the cost of cotton used and the market price for the gray
cloth, reached a low point early in March. This was a
certain indicator that mills were taking severe losses on
any business accepted at the low levels then prevailing.
When the buying commenced late in March,and pricesstarted
to move upward, the "mill margin" broadened greatly,
making possible the profits to which reference has just
been made.
Threat of inflation, and confidence that President Roosevelt would take the aggressive in working out of the depression, was responsible for the start in buying. Prices
which had been unduly low, naturally responded. The
advance in cotton was another element in cloth quotations.
Buying later was further stimulated by the belief that shorter
hours and higher wages, conceded to be certain, made it
advisable to anticipate requirements. In addition, there
developed the heaviest speculative move in gray cloths
which the industry has known since the post-war period.
Substantial buying of gray cloths was done by interests
entirely outside of the textile business. All of this demand
had its effect on prices. Add then the increases in labor
costs resulting from the NRA-and on top place the processing tax, and one becomes aware that prices on many
cotton textiles advanced more than 100% from early March
to early August.
This was one year when buyers who had foresight and
bought early were able to benefit from this vision. After
the passage of the NIRA, the President proclaimed that
it would be within the spirit of the Act if buyers would
share in the increased costs resulting. When he issued
the Blanket Code, Mr. Roosevelt made this even stronger,
with the consequence that a general adjustment of contracts
followed and many mills were saved from tremen dous losses
which had been staring them in the face.
Starting in April, a number of mills had refused to sell
goods on contract unless protected by what was known as
"labor clauses," which made it incumbent upon the buyer
to pay any increases in costs through increasing of wages or
shortening of hours, or both, due to legislation. During
January and February there had been heavy sales of flannels
to the jobbers and to the garment manufacturers. These
flannels were sold at rock-bottom prices, which showed mills
a loss at the time of the sale. At that time, there was fear
that buyers might delay their flannel purchases and that
mills might have to close down. To assure •operation of
plants, prices weie made so low that buyers could not help
making liberal commitments ahead through the summer and
the fall.
These flannel mills were in a very awkward position, as
there had been absolutely no intimation during January or
February, or before Mr. Roosevelt's advent to office, that
the economic structure of the country was to be so completely transformed. On top of the losses originally sustained, flannel mills would have had to take the additional
"licking" from the increased costs resulting from the NRA.
Through the work of the Industrial Recovery Committee
of the Association of Cotton Textile Merchants of New York,
it was arranged that flannel mills would be compensated
fully for the increase in labor costs; also any other mills which
had taken contracts prior to April 7, the date that the Black
bill came to the fore. Between the period from April 7
to May 17 (the date of the introduction of the NRA), it
was decided that such contracts, where taken without
"labor clauses," should be arbitrated. Where a mill had
sold contracts without protecting itself, following May 17,
it was decided the mill would have to suffer the consequences of its neglect.
Mill shipments of cotton goods of all kinds during May
through July were the heaviest, taken together, for any
similar period on record. Buyers were endeavoring to "beat"
higher costs of production, and were requesting delivery
of merchandise, even though contracts called for shipment
during September and October. The large mail order houses
were among the first to sense that once goods were in their
own warehouses, instead of at the mill, they were sure it
would not be necessary to pay additional labor costs, if the

2346

Financial Chronicle

merchandise were received before all of the new schedules
went into effect.
Mills report they never had such a demand for anticipation of deliveries. In quite a few instances, though production was heavy,mills had the smallest stocks in years at the
end of July, by reason of the manner in which the goods were
being sent out. That there were some mills which had
piled up goods prior to the middle of July, to be shipped
out after the code became effective and thereby obtain the
extra labor cost, has been suspected by a number of buyers. However, it is not believed that this applied to the
majority.
During the height of the buying activity—late in May and
in June—certain kinds of fabric could not be obtained fast
enough, because of this widesiiread demand for anticipation
of delivery. The result was that quite a few buyers were
accepting substitutes, and a good many mills were able to
clean out old merchandise which had been in their possession
for a considerable time. The way all of this worked out,
placed most mills in the best position of years, so far as having
very little undesirable stock on hand.
As it worked out later—after Aug. 1—inventory had
switched—it was being carried by the distributor and the
garment manufacturer, instead of the mill. This meant that
the buyer had to pay the big burden of the floor stock tax,
so far as fabric inventory was concerned. Of course, the
mill was hit badly enough, as the floor tax applied to stock
in process in the plant.
Perhaps in another year or so, we'll be able to look back
and write more intelligently about the floor stock tax and
the processing tax—the product of the AAA. Right now,
so far as mill executives and their customers are concerned,
there is undoubtedly a great deal of prejudice. So much is
this so, that whet' the cloth business quieted down very
materially after the first of August, many of the mill folk
insisted this was the direct result of the Farm Act taxes.
They said that it was bad enough to add the higher labor
cost due to the NRA,but when the processing tax was added
on top of that, it was like the "straw that broke the camel's
back." The Department of Agriculture has not been satisfied with these contentions of the cotton textile industry,
for which reason a hearing maybe held by the Department,to
learn more about actual costs of production. Under the AAA,
Secretary Wallace has almost unlimited powers, important
among which are the explicit instructions to him that the
consumer be protected against undue price advances.
The working out of the land-leasing plan, under the
Farm Act, has been disappointing. After all of the ballyhoo,
in which farmers agree to plow down over 10,000,000 acres
of growing cotton land, the South is blessed with the most
ideal crop conditions which it has had in years, nullifying
considerable of the acreage reduction and threatening that,
even with the smaller area to draw from, the yield could go
as high as 14,000,000 bales, assuming a continuation of the
most fa vot able conditions. Mill people feel it is not fair to
pena ize the consumers of cotton materials—generally the
poorer classes—so that the farmers can be paid $110,000,000
or more—and yet the crop has a prospect larger than that
for the 1932-33 season.
That the processing tax would have considerable bearing
on mill operations, has been insisted by quite a few of the
industry's leaders. They mean that there are still quite a
few manufacturing companies which are in weak financial
condition, and who could not afford to pay the Government
$21 a bale processing tax, just to put the goods into stock.
In other words, if these mills ran out of orders, they would
simply have to shut down until business again increases.
Cotton manufacturing interests have been opposed from
the start to the imposition of the full amount of the processing
tax at one time, but have advocated a graduated scale for
the tax—one cent a pound for the first three months, two
cents a pound for the second three months, until the full
4.2 cents a pound were reached. The theory of this has been
that, aside from being gradual, it would be an incentive
for business, inasmuch as buyers would save by making
commitments now rather than waiting until later in the year
and paying a larger tax.
The floor tax created a great deal of confusion. Many
folks didn't learn until rather late that they would have to
pay the Government a tax on whatever merchandise they
had in which cotton was the component part of major value.
In fact, information came out so slowly that many were
fooled at various stages. When the subject of a floor tax
first came up, the trade had no idea it would apply to made-




Sept. 30 1933

up articles. The prevailing thought was that the floor tax
would go on piece goods. Quite a few garment manufacturers felt they could escape this tax by making up shirts,
dresses, or whatever the case might have been. There was
even the thought that, if the fabric were cut up, ready to
sew—in what might be called semi-manufactured state—
one might avoid the tax. Several big garment houses cut
up millions of yards on this theory. But when the tax details came out, every avenue of escape seemed stopped, for
it covered garments and whatnot.
Business dropped to a low point during August, after the
heavy buying of the three previous months. During August
there were fears that prices had been put too high, that consumer resistance would block the progress of operating under
the code. Some Manufacturers, in their alarm, started to
cut prices, with the result that recessions during August
became quite threatening. At the same time, cotton had
lost a part of.lts gains, dropping from nearly 12 cents to
about 9 cents, which added to the discomfort of the cloth
markets. Gray cloth markets started to take on new life
during the end of the first week in September, when talk of
inflation was revived.
The 1933 season in cotton dress fabrics was the largest on
record, though it was crowded into a comparatively short
space of time. For a number of weeks it was not possible
to get enough piques, or enough organdies, to satisfy the
demand. Mills produced these in large quantities; finishing plants ran their machinery overtime, and yet the cry
for more merchandise did not let up until late in the season.
Piques had enjoyed several successive good seasons, but nothing like that of this year. It has been many years since
organdies have been sold on such a huge scale. Imported
organdies found a good market here. In fact, it was considered quite extraordinary that during a period of depression
women should be willing to pay nom 79 cents to $1 a yard
for a cotton dress fabric.
Linens had a very large sale to the dress trade this year,
which fact influenced the character of some of the cottons
which were in demand. As with the piques and the organdies, this was probably the best linen year on record.
Cottons for men's summer wash clothing had a big season.
Seersuckers sold in a very substantial way. What was even
more important, was the numerous types of new cloths
brought out for these wash suits, light in weight, yet with
sufficient body to get away from old ideas about cotton
clothing for men.
It is well to point out, too, that the cotton pants business
expanded considerably this year. Cotton slacks were produced in fabrics with yarn dyed raised cords, which made
up well for golf, as well as for other sport wear, and they
became popular. As with the summer suitings, numerous
new items were introduced in pants fabrics. Clothing of this
type has been very low in price.
Statistics also show that work garments of various kinds
were produced on the largest scale on record during the
period starting with the first of 1933. Overalls had never
been sold so low as last fall and early this year, with the
result that retail buying was greatly stimulated. In spite
of this, however, the price of denims fluctuated widely
and, during the quiet interims, dropped to levels which
showed the mills substantial losses. However, as previously stated, the comeback of May, June, July, made
up for a great deal, making it possible to arrive at averages ,
which were quite attractive in the majority of instances.
As an industry, cottons enjoyed consumption right through
the depression that was exceptional, when compared with
what was going on in other industries. Those who could
not afford to buy apparel of cotton were able to get these
free from the Red Cross. Thus, it can hardly be said that
the industry suffered much from loss of consumption.
Congress donated to the Red Cross, as already pointed out,
considerable Government-owned cotton, with the provision
that this be converted into fabrics for the purpose of relief
of the unemployed and the destitute. Millions of yards of
goods were bought, including large quantities of denims,
ginghams, flannels, diaper cloths, blankets, &e. For a
period of a number of months, it was safe to say that the
Red Cross was the largest individual buyer of cotton materials
and of cotton garments in the country.
The bulk of this Red Cross purchasing was timed when
mills were in dire need of orders. For several months
cotton mills and their selling houses had representatives
spending much time in Washington, contacting with the
Red Cross, in the effort to get a share of the orders that

Volume 137

Financial Chronicle

2347

were handed out. There were instances where mills, which competitor in nearly all markets, for the entire world, has
had been shut down, were able to open up on the basis of been and still is, Japan.
Red Cross orders, or where they were enabled to continue
The past year has seen an important forward step in the
running by reason of the fact of such business. Another sheet and pillow case business-namely the recognition of
thing of interest is that many mills were able to dispose the desirability of the larger size sheets. Perhaps it was
of materials which they had had in stock for years, because because sheets had been so unbelievably inexpensive that
the Red Cross was interested chiefly in serviceability, rather women were willing to turn to the larger sizes. For several
than in style. Early in the year, when the Red Cross years, mills have been campaigning to teach women of the
decided to buy about 1% million cotton blankets, prac- numerous advantages from the use of the 81x99 sheets,
tically everyone of the cotton blanket mills, as well as rather than the 81x90 which had been the standard for years.
some mills which had previously not cared much for cotton Larger sheets, of course, mean that the mill turns out more
business, made a strong play for these orders. It meant poundage of cloth per given period. It is interesting that not
that mills could keep machinery occupied, whereas other- only did women "step up" to the 81x99, but that the sale
wise the looms in question probably would not have run.
of the 81x108 also showed creditable gains.
Another phase which indicates how the cotton industry
Sheets are among the items on which the retail mark-up
enjoyed a good market (this refers to breadth of distribution is such that it is causing considerable concern, even though
and not to profit) is in the reforestation camp program. The sheet sales for the month of August, with the scores, were
Government came into the market foi considerable quantities considered phenomenal. One chain store reported that
of overalls, work pants, underwear, hosiery, tents, &c. All sheets which it had retailed at 49 cents each, in June, were
of this took up big yardage and helped to ease a situation already up to $1.19 in September.
that might have pinched much more than it did. The
Blankets are affected likewise. Between competition
Government is still buying materials and garments for its among mills, and competition between the stores, blanket
reforestation workers.
prices sank to depths that were unreasonable in every respect.
The sad commentary on this large consumption of mer- Particulany where there is any wool in the blanket, the
chandise during a period when there was such general suffer- rise has now been terrific. Raw wool for the cheaper blankets,
ing, is that the mills themselves did not benefit from this which was obtained at 8 to 10 cents a pound during the
continuous movement of goods. There is this to be said, summer and fall of 1932, cost up to 35 cents a pound and
however, that the cotton mills had less unemployment than higher in the past few months. This has meant that cermost other industries; that mill workers in general did not tain all-woo blankets which opened the year at about 70
have to endure the privations of the depression.
No to 75 cents a pound, are now being quoted at about $1.50
doubt there was humanitarism behind mill operations at a pound. Department stores have had a good business on
times when it would have meant a saving to have plants closE all of these items which come under the "domestics" catedown. On the other hand, there were a number of others gory-and the stores have taken good mark-ups, it is genwho took advantage of the difficult conditions, and who cut erally understood.
wages repeatedly, in order to sell goods at absurdly low
A number of the bedspread mills had had a good season,
prices. It was admitted generally, that the rate of pay from the point of view of volume. Prices on these goods
in quite a few mills, before March of this year, had reached have jumped quite some. Cheap woven cotton bedspreads
an abnormally low stage.
which had cost 623 cents each in May, were quoted to the
However, it is also interesting that those mills who paid stores at $1.25 early in September. The same is true of the
the lowest wage scales are now paying the penalty under the candlewick bedspreads, which had been selling at 60 to 623
NRA, through the minimum wage. This is true because, cents earlier in the year, and or which prices had advanced
with such mills, the increase in cost has been greatest. A to $1.25 to $1.30 by September.
mill which had been averaging $5, $6 and $7 a week pay,
Towels have seen low points during the past year which
is very likely finding it harder now, than a mill which had it is doubtful whether they will ever witness again. Clas.sing
been paying $8 to $10 average per week.
as "heavy goods," the price advances in towels have been
The establishment of a minimum wage and a 40
-hour week, rather sharp.
limited to two shifts, through the NRA, are achievements
The whole picture is one which requires patience to analyze.
which were hailed by most leaders in the industry. Benefits Above all, optimism is essential in reckoning the future.
to mills must be eventual. In the meantime, it has been
As indicating the course of values of cotton goods from
possible to accomplish what co-operative efforts had not week to week during the season, we introduce here the
been able to achieve. For years, quite a few have wanted to Fairchild index numbers, which show for each week (1) the
pay a fair wage scale, but felt they could not do so amount weekly average price of middling upland spot cotton in New
of the inhuman competition which was kept alive by York; (2) the weekly average price of gray goods; (3) the
"taking it out" of the poor workers. Overnight, the $12 weekly average price of finished goods, and (4) the weekly
minimum wage in the South, was established-and $13 in composite price of cotton goods:
the North-one of the greatest events in the history of tex- FAIRCHILD COTTON AND COTTON GOODS INDEX PRICES.
tiles.
Average
Average
Composite
Equally in importance to the minimum wage, for the
Date.
Gray
Spot
Finished
Cotton
Cotton.
Goods.
Goods.
worker, as well as for the industry, is the 40
Goods.
-hour week.
Time was when cotton mills ran 72 hours a week. It was
1932.
Week
a struggle to reduce this to 60 hours, then to 54 hours. Aug 5Ended
4.078
5.99
9.625
5.927
12
7.02
4.411
9.880
6.233
Massachusetts was alone in its 48-hour week. All effort to
19
7.49
4.665
10.194
6.508
8.09
get the cotton textile States to agree on simultaneous legis- Sept.26 •
4.926
10.975
6.943
2
8.76
5.500
11.350
7.450
lation for a 48-hour week had failed. Now, at one stroke,
9
8.58
5.559
11.572
7.564
16
7.46
5.371
11.572
7.431
-hour stretch.
all drop operations to a 40
23
7.18
5.204
11.146
7.290
7.35
5.244
Whether an 80
11.350
7.297
-hour week (two shifts) is going to be suf- Oct. 30
7
7.09
5.170
11.238
7.193
14
ficient to cure the overpioduction problem in cotton textiles
6.62
5.052
11.222
7.109
21
6.38
4.900
10.972
6.924
is rot yet certain. In fact, it will probably take a year or so
28
6.31
4.788
10.916
6.831
4
614
4.659
10 777
6 698
before one can get the correct perspective. While it is Nov. 11
6.41
4.612
10.694
6.639
18
6.42
4.509
10.611
true that many mills which had been operating at 110 hours
6.603
25
6.10
4 508
10.347
6.454
a week and more were being cut down to 80 hours, it is also Dec 2
5.99
4.331
10.125
6.262
9
5.77
4.264
9.361
5.963
true that many others which had been content with 55 hours
16
599
4 272
5.959
9.333
23
603
4.342
9.333
6.000
changed over to run two shifts (80 hours) under the code.
30
6.05
4.268
9.305
5.947
Also, there was a rush to reopen mills which had been idle
1933.
few years or so. What the net result of it all is remains Jan. 6
for a
6.23
4.259
9.333
5.953
13
4.233
6.29
9.333
5.932
to be seen.
20
4.208
6.23
9 333
5.916
4.170
6.26
9.292
.5.877
The cotton goods export business is believed to be in dan- Feb. 27
3
4.152
6.03
9.138
5.814
10
606
4.128
9.111
5.789
ger of being wiped out almost entirely, through the higher
17
607
4.147
9.222
5.838
24
4.119
6.12
9.222
5.820
costs resulting from the NRA. How this can be avoided Mar. 3
4.076
6
4;10
9.000
5.717
10
4.432
is not evident, unless the Government is willing to subsidize
9.457
5.106
17
6.70
9.48.5
4.518
6.174
the export or to permit a drawback that would counteract
24
6.45
9.429
4.427
6.094
4.326
6.34
9.429
6.027
the increased labor cost, and thereby place American tex- Apr. 31
7
6.48
4 293
9.429
6.005
14
6.69
9.429
4.476
6.127
tiles on a competitive basis with foreign. Export trade has
21
7.15
4.705
9.828
6.413
already fallen off considerably. As is known,,the textile
28
5.023
7.59
101145
8.589




Financial Chronicle

2348
Date.
1933.
Week Ended
May 5
12
19
26
June 2
9
16
23
30
July 7
14
21
28
Aug. 4
II
18
25
Sept. 1
8
15
22

Spot
Cotton.

8.26
8.65
8.67
858
9.24
9.19
9.29
9.32
10.17
10.35
11.03
11.14
10.53
10.30
9.73
9.04
9.39
9.56
9.21
9.24
9.97

Average
Gray
Goods.

Average
Finished
Goods.

Composite
Cotton
Goods.

5.334
5.507
5.683
5.912
6.832
6.935
7.166
7.285
7.668
8 126
8.449
8.747
8.660
9.579
9.743
9.359 •
9.240
8 993
8.685
8.619
8.811

10.458
11.138
11.694
12. 00
13.388
13.555
13.833
13.833
14.000
16.558
16.588
16.669
16.669
17.497
18 768
18.712
18.406
17.760
17.495
,(49
17.
17.250

7.042
7.384
7.687
8.018
9.017
9.142
9.389
9.467
9.778
10.937
11.152
11.388
11.329
12.217
12.751
12.477
12.296
11.915
11.622
11 573
11.6E1

* Cotton E...ehange closed.

THE COTTON TRADE IN EUROPE.
Improved conditions have prevailed in the English cotton
industry during the past 12 months as compared with the
previous year. This improvement, although only comparatively slight, is shown in the official Government returns
regarding shipments of piece goods for the 12 months ended
July. Although the figures are in excess of the 12 months
ended July 1932, and are considerably higher than the year
1930-31, they are still below the exports during 1929-30.
Taking the whole of 1932 shipments of cloth from England
were 29% larger than in the previous year and an outstanding feature was the recovery in trade with India, the shipments to that outlet for that year being 598,886,000 square
yards, against 389,923,000 square yards in 1931. This is
equal to an increase of 53%. Other markets that took larger
quantities as compared with the previous year were China,
British West A flica, Foreign West Africa, the Straits
Settlements, Hong Kong and Australia.
It should be pointed out that the industrial production
throughout the world reached its lowest level in July 1932.
Since that date there has been a sharp increase in world
activity. This improvement was, of course, assisted by the
normal seasonal movement so that the subsequent decline
in production experienced by other trades and industries
towards the end of the year was only slight in the case of the
cotton industry. Prospects regarding the English cotton
industry in July last year were darkened by the labor situation. The Federation of Master Cotton Spinners' Associations, representing the spinning employers, and the Cotton
Spinners' and Manufacturers' Association representing the
weaving employers, abrogated the hours and wages agreements with the operatives at the beginning of 1932.
Following preliminary skirmishes the manufacturers
then proposed to reduce wages by approximately 2s. 9d.
in the £. Negotiations with the trade unions carried on over
a long period proved abortive. A deadlock was eventually
reached and a strike was declared from Aug. 27. Early in
September the British Ministry of Labor officials intervened but a settlement of the dispute was not arrived at
until the manufacturing section had been closed down for four
weeks and two days. Work was resumed in the weaving
sheds on Sept. 28. The wages agreement provided for a
reduction of is. 8d. in the £ off current earnings.
The spinning employers also attempted to reduce wages
by 2s. 9d. in the £. Here again the Ministry of Labor intervened and an agreement was reached for a wage cut equal to
is. 63d. in the £ on current earnings. The rank and file
of the spinning operatives, however, were dissatisfied and a
strike was declared. The stoppage of work started on Oct.31
but following a ballot the operatives decided to accept the
employers' proposal and, after the mills being stopped a
week, work was resumed on Nov. 7.
A feature of the agreements was the setting up of a Special
Conciliation Committee with an independent chairman to
deal with any deadlocks which might arise in the future.
The spinning employers also agreed to discuss the question
of exceptional wage rates for low-paid operatives so that these
particular workers should not have their wages reduced by
the agreed cut of Is. 63.d. in the L. It was not until early
this year, however, that the employers and operatives
reached an agreement on this question of low-paid operatives
and it was then decided that piecers' wages should not be
subject to the wage reduction.
Naturally these labor disputes seriously affected production in the Lancashire cotton industry.




Sept. 30 1933

Stoppages of work took place in both the spinning and
weaving sections and production was brought down to a
minimum. It is impossible to estimate what the strikes
cost the Lancashire cotton industry, but the loss to Lancashire must have run into millions of pounds, as the whole
of the weaving section was closed down for just over a month.
The Lancashire industry was the only cotton trade which
experienced a severe labor dispute during the 12 months.
Other countries were more or less free from trouble. It is
not to be wondered, therefore, that spinners and manufacturers became very disheartened and depressed. Lancashire, suffering very severely from competition by Japan
and other countries, was trying her best to make headway
in markets which she previously monopolized. In face of
all her ordinary troubles, however, she was faced with this
wages dispute. It is true that the reduction in production
costs has enabled spinners and manufacturers to sell on a
lower basis and thereby bring yarns and cotton goods on a
more competitive level with other countries. At the same
time during the period that the mills were stopped on account
of the strike other countries, espacially Japan, took advantage of the stoppage and flooded the markets with cheap
cotton goods.
Another important development in the labor situation
has been the agreement between the Cotton Spinners'
and Manufacturers' Association and the Operative Weavers'
Amalgamation regarding the more looms to a weaver system.
Following preliminary negotiations an agreement was eventually arrived at whereby the operatives would be guaranteed
a minimum wage of 28s. per week for working six looms
instead of four. This system began to operate from the first
week in January of this year. Serious difficulties, however,
have arisen. Many employers who found that they could
not adapt the more looms to a weaver system started to pay
the six looms rates of wage for weavers engaged on four
looms.
This, of course, was equal to a reduction on ordinary wages
and it enabled them to undercut manufacturers who were
paying standard rates for four-loom working. Matters
reached a climax early this year and the Ministry of Labor
officials conducted a special enquiry into the conditions of
work, &c. The report by the Ministry has been compiled,
but has not yet been published. In the meantime there
has been growing dissatisfaction throughout the whole of
the manufacturing section at this unexpected development.
Both the employers and the operatives are keen to stamp
out the employers who are not paying the agreed rates of
pay. It must be pointed out that these defaulting mills
are not members of the official employers' organizations
and they are, therefore, not compelled to work according to
the official agreements. The trade is faced with a difficult
task in eliminating these pax ticulal employers who are not
paying standard rates of wage. It has been suggested that
a Cotton Control Board should be set up with special powers
from Parliament to enforce the agreements. The question
of legalizing agreements by special Act of Parliament has
also been suggested, but this plan is not likely to be carried
out. On this point it is known that the Trade Union Congress,which represents the whole of the trade union movement
of the country, is opposed to legalizing agreements, for the
view is held that it might react unfavorably upon the
workers.
The settlement of the more looms dispute, therefore,
although hailed with satisfaction has only brought trouble
in its train. It would seem impossible for all sections of
the Lancashire cotton industry to be at peace. No sooner
is one dispute or matter settled, before another queston
arises. Even the Special Conciliation Committee which
was appointed to prevent strikes and lockouts has been
incapable of dealing with the situation and at the time of
writing strikes have actually occurred at a non-Federated
spinning mill and in certain manufacturing firms. The
labor movement in Lancashire remains strong and powerful
and although the trade union coffers are depleted on account
of the strikes last year when huge sums were paid out in
strike money to the operatives, they are still sufficiently
powerful to make themselves felt.
It will be seen, therefore, that the employers have had
to contend with innumerable difficulties from the labor
angle. In face of all these troubles, however, the amount
of trade done in yarn and cloth has been larger than in the
previous 12 months, but the future prospects are viewed
with a good deal of anxiety. Japan having left the gold
standard and depreciated the yen is now able to compete

Volume 137

Financial Chronicle

more effectively with other countries, including Lancashire.
Large quantities of Japanese fabrics have been imported
into India and other markets. This question of Japanese
competition has received a greater prominence during the
past 12 months than in any previous period. A special
organization called the Cotton Trade League was formed
of leading spinners, manufacturers and merchants. Mass
meetings were held in Manchester and Lancashire cotton
towns to protest against the flooding of British markets
by Japanese cotton cloths, and resolutions were forwarded
to the Government. All these fabrics were low priced and
Lancashire had definite evidence that they were being
dumped irrespective of the production price. It is actually
known that in India, Japanese cotton cloths were being
sold at the price of the raw cotton alone. This is really
astonishing when one considers that the cotton had to be
imported, manufactured into cloth and then shipped to
India. The big disparity in price between Lancashire
and Japanese fabrics carnot be attributed to increased
efficiency or better marketing methods by the Japanese.
It would appear that Japan has followed out a set policy of
dumping. It is no wonder, therefore, that Lancashire has
been up in arms.
The Manchester Chamber of Commerce also formed a
speeial committee to deal with the subject and the net
outcome of all this agitation was the appointment of a strong
deputation to go to India to hold discussions with Indian
and Japanese cotton interests regarding Japanese competition. This deputation, which comprised representatives
of spinning, manufacturing and merchanting interests,
sailed from England at the end of August. They will first
meet the representatives of the Indian mill industry and
will later hold discussions with representatives from Japan.
It is also understood that further talks will be held in London
between English and Japanese industrialists. Whether any
good will result from these talks remains to be seen.
An important development regarding Lancashire's trade
with India was the increase in the Indian import duties on
Japanese fabrics. The duty was raised in June from 50 to
75%, and as the duty on English fabrics remained at 25%
this left Lancashire with a preference of 50%. The Japanese
cotton industry protested against this increase in duty
and it is probable that the Japanese delegates to the India
talks will do all in their power to get the duty reduced.
A further development on the question of Japanese
competition was the announcement by the President of
the Board of Trade in the British House of Commons in
May that 12 months' notice had been given to terminate
the Anglo-Japanese Treaty in British West Africa.
The agitation in Lancashire which has gradually gained
impetus has caused the Government to realize the seriousness
of the position of the cotton industry and the hope is expressed that the Government will support Lancashire's ease
in preventing unfair Japanese competition in India, the
Dominions and the Colonies. The outcome of the discussions in India is awaited with great interest. It is
realized that much depends upon the success of the conference.
India is a British Dominion and Lancashire believes that
she should have a preference on her goods. Japan by
working long hours, paying low wages and depreciating the
yen, is able to undercut Lancashire. To a European mind
this is unfair competition, for although the Japanese operatives may be well satisfied with the long hours which they
work and the relatively low wages which they receive, they
do not compare with the wages and hours of work in force
in any European cotton trade. This question of East
versus West was discussed at the International Cotton
Congress held at Prague in June. The European delegates
in a polite manner accused the Japanese of unfair methods in
competition. The reply of Japan, however, is that her
workers are satisfied with the conditions; that she buys from
England more goods than England buys from Japan. Be
that as it may, the fact remains that Lancashire is unable to
compete with Japan and unless the position is remedied
Lancashire cannot hope for any improvement in trade in the
foreign markets. The Japanese have got a strong foothold
in India, Egypt and other markets and it seems only a matter
of time before she eventually decides to invade other outlets.
The leaders of the Lancashire cotton trade will, of course,
agitate to keep Japanese goods out of the British Empire
by tariffs. It certainly seems absurd that British capital
and brains should plan a country, build railways, roads and
docks and when everything is smooth running allow the




2349

Japanese to import goods on the same basis as Lancashire
cloths. It is the aim of the Cotton Trade League to place
an embargo on Japanese fabrics entering any market of the
British Empire, but whether or not the British Government
through the Colonial Office will agree to place a prohibitive
tariff on Japanese cloths remains to be seen.
With regard to the trade done in cotton piece goods Lancashire firms derived considerable benefit in India from the
decline in the anti-British agitation. This movement, of
course, has been led by Gandhi and for some time very little
has been heard of the boycott movement. The Indian
Government has adopted a very strong attitude as witness
the recent imprisonment of Gandhi. This has undoubtedly
helped to reduce the Nationalist movement and has, therefore, resulted in the freer distribution of Lancashire cloths.
Trade with India has been on a very fair scale. Even in face
of Japanese competition the exports to that outlet have actually shown an increase as compared with the previous 12
months. Business, of course, has been helped by the preferential tariff for British fabrics which enabled Lancashire
manufacturers to compete more successfully against the
products of Japan.
Early in 1932 the mills were very busy on contracts for
China. During the past year, however, demand has been
much quieter and the condilons throughout the Far East
have been fax too unsettled for trade to flow freely.
Trade in piece goods has to a considerable extent been
hindered by higher tariffs, import restrictions and quotas.
These developments have had a serious effect on many
countries on the Continent, especially in the southeastern
part of Europe, and South America. Owing to the restrictions on the export of credits, merchants have been afraid
to trade with numerous markets.
It cannot be said that there has been any improvement in
the financial position of manufacturing firms. Most concerns have had to accept the 'hest prices they could. In
many instances these have been below production costs.
Some of the larger combines have, of course, been able to
work at a profit, but generally speaking the past year has
been unsatisfactory.
Taken as a whole the spinning section has had a rather
more favorable 12 months than in the previous year. This
branch, however,is still working at a loss and more companies
have had to go into liquidation owing to financial difficulties.
Production has been very irregular and it is estimated that
the mills have been working at between 60 and 75% of
capacity. Fair buying movements have occurred from time
to time, but it has been hard work for spinners to improve
their position. Some company reports, however, were a
little better than in 1931, especially in the fine spinning
section.
It is pleasing to record that rather better financial returns
were made by the mills during 1932. I have made an
analysis of 210 companies and these paid an average dividend
of 1.41%, against 1.39% in 1931. In 179 cases no dividend
was declared. Dividends absorbing £323,526 equal to 0.75%
on the total paid-up ordinary share capital of £30,760,000
were paid by the remaining 31 companies. In 1931 the
distribution was £273,155, equal to 0.84% on a capital of
£32,528,000 for 225 companies.
With regard to the profits and losses I have analyzed the
returns of 136 companies. Twenty-one made profits totaling
to £46,885 and 115 made losses of £556,473, the average loss
per company being £3,747, as compared with £8,288 in 1931.
With regard to the profit and loss accounts 57 companies
have credit balances of £864,349 and 147 have debit balances
amounting to £6,931,314.
There were again fewer financial difficulties in the Lancashire cotton trade during 1932 as compared with 1931,
the total of bankruptcies, deeds, liquidations, &c., being
149, against 234. I have obtained figures for 63 firms and
their total unsecured liabilities amounted to £1,741,174 with
net assets of £524,653, a deficiency of £1,216,521. In 1931
the liabilities of 133 firms were £4,680,694 and the assets
£1,270,606, a deficiency of £3,410,088.
BRITISH EXPORTS.

The following table gives particulars of foreign trade in
yarn and cloth for the 12 months ended July 1933, with the
comparison for preceding years:
Yarn
Cloth

1931-32.
1932-33.
1930-31.
1929-30.
149,728,700
Ma 128,247.800
127,349,200
149,124.000
sq. yda.2,089,698,300 2.037,244,600 1,746,739.000 3,067,445.600

The following table of the index number of raw cotton,
yarn and cloth, in the Manchester market illustrates the

Financial Chronicle

2350

fluctuations in prices which have taken place since the
beginning of this year:
July 31 1914
1933—
Jan. 6
July 28 (High)
Mar. 3(Low)
Aug. 11

American American
Cotton.
Yarn.
Cloth.
100
100
100
80
97
72
89

91
101
86
97

100
106
95
105

Egyptian Egyptian
Cotton.
Yarn. Average.
100
100
100
89
100
80
94

92
100
85
98

90
101
84
97

BRITISH COTTON GROWING.

The quantity of cotton marketed by the British Cotton
Growing Association shows a satisfactory increase on the
figures of recent years. The number of bales and the value
of the cotton dealt with by the Association during the last
six years is as follows:
Year—
1927
1928
1929
1930
1931
1932

Bales.
171,600
124,182
124,790
89,350
121,362
149,855

5,012,084
4,160,049
3,683,567
3,683,567
1,338,657
1.976,243

The accounts of the Association showed a loss on the
year's working of £20,105 after adequate provision had been
made for depreciation. This reduced the total excess of
income over expenditure on Dec. 31 last to £453,277. The
loss was largely due to 'depreciation in the value of cotton
against which advances had been made.
The original object of the founders of the Association
was the promotion of the cultivation of cotton in the British
Empire, and the Association's officials are satisfied that the
results are eminently satisfactory despite the unfavorable
conditions which have ruled throughout the period. The
past few years have been a severe test for British Empire
cotton growing, but notwithstanding the low values of cotton
the industry has generally been well maintained and the
increased production in the Sudan and in Uganda was most
gratifying. One of the greatest steps towards world prosperity would be a better return for their energies to those
who produce cotton and other crops which would quickly
result in a renewal of confidence and an increas) in the
buying power of the agricultural population. The main
hope for tho future lies in the capacity of the world to purchase and consume on an increased scale and this depends
upon a return of confidence, freedom to trade and a removal
of the various complications—political and economic.
With regard to cotton growing in the British Empire, an
interesting development has been the formation of a Special
Committee to promote the greater use or Indian cotton by
the Lancashire industry. This Committee has been formed
as a direct result of the agreement concluded at Ottawa
between the British Government and the Government of
India when the former undertook that they would co-operate
in any practical scheme that might be agreed between the
manufacturing, trade and producing interests in the United
Kingdom and India for promotirg, whether by research,
propaganda or improved marketing, the greater use of
Indian cotton in the United Kingdom. This Committee has
done good work up to date. A large number of different
types of cloth have been manufactured from yarns made
from Indian cotton. The experiments are being continued
and it is hoped that eventually Lancashire will use an increasing quantity of Indian cotton. This movement, if
maintained, would go a long way towards Lancashire's plea
for a larger proportion of the trade in cotton-piece goods
in India to the exclusion of Japan.
With regard to the Empire Cotton Growing Corporation
spinners in Lancashire have for some years past paid a
levy of 3d. OD every bale used, which money went towards
carrying on the work of cotton growing in the British Empire.
The levy, however, was reduced this year from 3d. to ld.
per bale. The reduction had been rendered necessary by
the depression in the cotton industry.
PROSPECTS IN LANCASHIRE.

Taking Great Britain as a whole, the industrial outlook
rather tends to improve, but it cannot be said that any
progress towards better times is being made in the cotton
trade. In fact, during July and August there has been a
tendency in some quarters for ground to be lost and new
business has been less than the output of the spindles and
looms. It is estimated that at the present time between
70 and 75% of the machinery is working. This compares
with about 80% two months ago.
There are two factors at the present time which are
largely responsible for the slack state of affairs in Lancashire.
One is the poor purchasing power of our oustomers abroad
and the other is the lack of confidence on the part of buyers




Sept. 30 1933

in current rates. Cloth demand for many of the markets
overseas remains unsatisfactory. With regard to India it
remains to be seen whether the deputation which has now
sailed from Lancashire to have discussions with the Indian
and Japanese mill interests will be able to reach any agreement which will be of benefit to Lancashire.
During the past few weeks there have been discussions
between leading spinners regarding a scheme to control
production and prices. Already spinners of coarse yarns
have agreed upon a price basis. This scheme has not received any publicity in the press but it has worked satisid.
factorily and margins were immediately improved by Y
a lb., which to many concerns was the difference between
a loss and a profit. The talks are now taking place as to
whether the spinning section could be split up into different
groups, each producing the same type and qualities of yarns.
It will take months, of course, before any definite scheme
can be put before the trade. Even when everything has
been settled there still arises the question as to whether individual spinners will agree to carry out the scheme. In
the past voluntary efforts have failed—and failed miserably
—owing to the lack of unanimity. Compulsory powers will
have to be obtained if any scheme is to be a success. This
would mean the passing of a Bill in Parliament to enable
those in control to fine or penalize members who did not
carry out the provisions of the scheme. The Lancashire
spinner is famed for his individualism, but this individualism
becomes a danger when it degenerates into what Lancashire
terms "pig-headedness." In other words the losses in the
spinning section are due largely to about 20% of spinners
who through various reasons, financial or otherwise, are
compelled to sell the output of the mills, no matter what
the price. This minority fixes the price basis on 'Change
and it certainly seems absurd that the whole of the industry
should be ruined by the activities of a minority such as this.
The present move is to eliminate the actions of this minority.
EUROPEAN CONTINENT.

The cotton spinning and manufacturing industry on the
European Continent has again experienced a depressing
period. It is not possible to record any real improvement
in trade with the exception of certain countries.
AUSTRIA.

It is estimated at the time of writing that only about
54% of normal capacity is being worked. This unfavorable
position is almost entirely due to the lack of demand in
the home market. With regard to manufacturing, activity
has shown a slight increase in the past three months and
it is estimated that about 60% of the mills are working.
The outlook is considered to be unfavorable for spinners
and weavers, for there have been no indications of any
increased consumption. As regards wages, slight reductions were made in a section of the trade for day rates, although the official rates were maintained. These reductions
amounted to between 4% and 5% of the total wages paid.
BELGIUM.

The rise in the price of cotton during the past two months
has brought about a slight improvement in the cotton
trade in Belgium, but the majority of buyers treated the
rise as though it were only temporary and have since operated
from hand to mouth. Here and there manufacturers
have increased their activity, but generally speaking the
whole industry remains in an unsatisfactory position.
Owing to the fluctuations in the cost of living, the employers
have canceled the increase in wages of 2%% which was
granted to the operatives in November 1932.
FRANCE.

No better reports have been received from France. Prices
of yarn and cloth have not increased in sympathy with
the advance in raw cotton prices and margins remain poor,
especially in the fine spinning and weaving sections. At
the end of May the activity in both the spinning and weaving
sections was estimated to be between 72 and 75% of full
capacity, taking into account all the firms which were
completely stopped.
GERMANY.

With regard to the spinning section the second quarter
of 1933 witnessed a remarkable improvement and this was
maintained until the first half of July. More machinery
was working and prices improved. Demand, however, has
since become quieter and fewer orders have been booked.
It is a general complaint that owing to the poor offers
received from Germany's foreign customers transactions
have had to be arranged on an unsatisfactory basis. In the

Financial Chronicle

Volume 137

manufacturing section a strong buying movement was
noticeable during the second quarter of this year. During
April and May substantial orders were received, which
enabled manufacturers to extend their order books. Business, however, tended to taper off, though the present state
of order books is considered to be generally satisfactory.
The orders in hand will enable activity to be maintained
during the next few months.
HOLLAND.

With regard to the spinning section demand has been
unsatisfactory. Competition among spinners has been very
severe and transactions generally have had to be arranged
at below cost price. Many mills are working short time.
With regard to the manufacturing section, business has been
on a small scale and the prices that buyers have put forward
have been too high to enable business to result. Most of
the mills which cater for the export markets are compelled
to work short time, and a large number of mills are stopped.
The home trade demand has somewhat improved, probably
on account of the summer season and the firmer prices for
cotton, but the leaders of the trade are by no means certain
that this improvement will be maintained. The general
condition of the industry is still far from satisfactory and
there does not seem to be any immediate possibility of a
permanent improvement in trade.
ITALY.

An improvement was registered in the Italian cotton
spinning and manufacturing sections up to March of this
year and the situation remained more or less stationary until
the end of June. A slight setback then occurred. This was
attributed to the monetary situation in the United States
which introduced considerable uncertainty into international
commerce. There is a tendency for employment to increase.
SPAIN.

Although the demand for the home trade has been maintained, there has been a falling off in the export section,
chiefly as a result or he currency restrictions imposed.
by
several nations, those of South America being the principal
ones. This resulted in a falling off in business to the outlats
abroad.
SWITZERLAND.

As a result of the advance in cotton prices thc demand for
yarn and cloth improved during the second quarter of 1933,
but it is disappointing to record that there was no improvement in sellers' margins. Order lists, however, weie extended, but manufacturers were still compelled to sell at a
price which was not satisfactory. Production in the spinning
section has ranged between 65 and 87% of capacity and in
the weaving section it has varied between 71 and 90% of
normal. The lowest percentages were registered in the fine
sections and the highest in till average and coarse sections.

American Coll n.
Foreign COU071

COTTON CONSUMPTION IN THE SOUTH.
Through the courtesy of the Census Office, we are again
able to present the following table, showing separately the
quantity of linters and of foreign cotton consumed in each
of the Southern States during the last two seasons in running bales:




Linters.

Lint.

1932-33. 1931-32. 1932-33 1931-32 1932-33 1931-32
Alabama
Georgia
North Carolina
South Carolina
Tennessee
Virginia
All other cotton States

659,862 529,132 2.938 2,942 1,125 3,118
1,094,284 866.793 11.965 10,443 10.511 7,590
1,450,157 1,165.177 19,094 14,255 21,515 18.123
1,314,386 1,007,653 2,666 1.845 9,600 9,878
•
152,152 139,004
1,054 1,116
•
144,547 115,479
224,221 167,068 305,473 261,5138 3,159 3.220

t
Total

5,039.609 3.990,306 342,136 291,856 46.964 43.045

•Now Included in "all other" as large proportion represent the operations of single
establishments.

As showing the dominance of the South in cotton manufacturing, as in cotton raising, we add the following table to
indicate the number of cotton spindles in each of the leading
Southern States with the amount of cotton consumed by the
mills therein. We no longer make an independent investigation of cotton consumption in the South, as was our practice
up to the season of 1921-22. but now adapt the Census
returns to our requirements. The table is as follows:
Number of Spindles.
Southern Slates.

Consumption
Running
in Juts.

Bales.

1,873,518
3,297,286
6,136,702
5,677,322
627,348
643,038
797,116

1,718,488
3,077,866
5,624,784
5,542,832
527,254
643,038
553,170

663,925
1,116.760
1,490,766
1,326,652
153,206
144,547
532,853

19,052,330
19,137,559
19.108.856
19.122.896
18.848.216
18.508.322
18,169.026
17874.750
17,634,948
17.226,118
16.458.116
16.074.981
15.380.693
14.990.736
14.639.688
14.369 599
14 040.676
13 017.969
10 451.910
7.039.633
3.670.290

17,687,412
15,220,742
16.779.228
17.268 344
18.004.436
17.602 480
17.655 378
16,920.526
16,577,760
15.469.864
15.872 395
15 580 000
15.130 755
14 792 436
14 243.813
14.111 621
13 937 167
12 737 498
9.864 198
6.714.589
3,574.754

5,428.709
4,325,207
4,463,401
5.080.871
5.761.519
5.429.435
5.493,929
4.795.534
4.459.956
4050.844
4.489.150
3977.849
3 168 105
3 724 222
3.504.191
4.323.826
4.378.298
3 164.896
2 234.395
2049.002
1.227,939

Alive.
Alabama
Georgia
North Carolina
South Carolina
Tennessee
Virginia
All other cotton growing States....
Totals 1932-33
1931-32
1930 411
1929-34)
1928-29
1927-28
1926 27
1925 26
1924-25
1923-24
1922 -23
1921 22
19.0 21
1919-20
1918- 19
1917 18
1916-17
1914-15
1907-08
1902-03
1897-98

The following indicates the aggregate number of spindles
in the North and the South separately for each of the last
six annual dates:
Spindles.
North
South

1933.

1932.

1931.

1930.

1929.

1928.

11,841,640 12,570.952 13,564.356 14.901.970 15.971.318 17,031.634
19,052,330 19,137,558 19,108.856 19.122.896 18,848.216 18.508.322
In

1•0fal

Q0/ 070 21 70/ cln.29 A7/ 919

24 024.566 34.810.524 IA A42 129

Movement of Cotton at Interior Towns.

INTERNATIONAL COTTON CONGRESS.

The International Federation of Master Cotton Spinners'
and Manufacturers' Associations held its 16th Cotton Congress at Prague and Carlsbad, Czechoslovakia, in June.
Resolutions were passed upon the following subjects: False
packing of Anu rican cotton, currency, tariffs and credit
restrietior s; the futures markets; renewal of moisture agreement for Egyptian cotton; new varieties of Egyptian cotton
and cotton coveiing for Egyptian bales. A discussion also
took place upon the maintenance of the balance between
production and demand and there was a strong reeling expressed in the Congress that the system of double and treble
shift working should be gradually abolished. It was, however, found impossible to reach a unanimous decision on the
question and the Congress decided to postpone rurther
consideration. In the meantime all the affiliated associations
were recommended to devise and put into operation any
temporary scheme capable of maintaining the balance
between production and demand.
We are indebted to a special and well-informed European
correspondent for the foregoing review of the spinning industry in Great Britain and on the Continent in 1932-33.
Taken in conjunction with our remarks on the situation in
the United States, presented further above, it covers quite
fully the countries of the world that take chief rank in cotton
manufacturing.

2351

COTTON CONSUMPTION IN SOUTHERN STATES—YEARS ENDING
JULY 31
[Quantities are given in running bales counting round as halt bales, except foreign
cotton which Is In 500-1h. bale,'

following table shows the movement to the interior
towns of the South during the last two seasons:
The

Towns.

-

-

Receipts.

-

-

Shipmeat,

1933.Year Ending Juig 31 19 2
Stocks. Receipts.

Ship.
menu.

Stocks.

Ala.. Birmingham__
46,379 7,269
43.766
82.983
100.087 9,882
Eufaula
17,238 5,747
17,054
12,076
14,326 5,931
54,346 34,796
41,611
Montgomery
39.590
39.468 47.521
Selma
76,907 25.865
62,434
89.567
83.088 40.338
Ark., Blytheville
204,271 16,894
191,706
120,215
102.152 29,459
Forest City
27,698 10.728
23,788
33.933
21.292 14.638
Helena
79.136 21,426
70,196
78,443
56,525 30.366
Hope
56.896
55,695 9,575
59.589
51,576 8,374
Jonesboro
21,403
20.855 1,866
21,236
20,892 1,318
Little Rock
165,485 44,004
165,874
193.037
162,850 43,615
Newport
53,406 8,243
51,096
, 48.588
40.292 10,553
line Bluff
150,888 25.469
140,424
180.279
152.275 35.933
W Milt Ridge.._
68,243 3,436
67.244
.
47,162
44,150 4.435
Ga., lbany
4,924 2,856
4,570
5.317
3.207 3.210
Athens
30,690
25,990 45,565
40.159
22,260 40,885
Atlanta
236.737
187.739 203.610
99.666 154.612
86.593
Augusta
161.085
128,284 90.464
188,143
160.030 93,387
Columbus
37,634
36,323 15.101
58,780
41.290 22.790
Macon
23,285
27,231 33,043
33,131
23.706 36.989
Rome
13.396
14,485 8,837
14.799
9.176 9,926
La Shreveport
83,157
121,130 28,488
113.348
105.857 66.459
Miss.. Clarksdale___
139,237
186,736 15.498
198.479
145.486 62,995
Columbus
17.898 5,093
17,128
23.065
20.075 5.863
Greenwood
138.720
167,336 36,014
171.144
124.276 64,630
Jackson
43,593 17.022
40.597
44,373
43.293 20,018
Natchez
11.100 3.034
9.858
12.750
12.988 4.276
Vicksburg
38.575
42,524 6,069
41,247
34.761 10.018
Yazoo City
32,533
37,975 8,940
36.252 14,382
47.371
Mo.. St. Louis
198,344
199,135
150,995
5
154,135
796
N C., Greensboro._
30,845
33,239 18,124
22,339
35,880 20,518
Oklahoma—
'Fifteen (15) towns*
761,941 16.669
747,120
609,765 31.490
622.993
S. C., Greenville
185,528
169,303 93,308
175,305
133,611 77,083
Tem.. Memphis
2,149,477 2,136,399 297,568 2,091.742 1,909.259 284,490
Texas, Abilene •
91,036
91,148
145
56,355
56,222
257
Austin
24,893
25,827 1.083
29,454
27.751 2.017
Brenham
19,209
21,127 2.220
19.532 4.138
20.042
Dallas
102,791
103.074 9,184
146.980
143.695 9,467
Paris
55,159
994
57,779
98.108
94.736 3.614
Robstown
9,884
10.258 2,296
33.737
32,464 2,669
San Antonio
14.723 1.491
15,810
17.942
18.916
404
Texarkana
48,559
44,964 11.364
65.878
60.618 7.769
Waco
78.666
82.438 2,446
82.931
79.898 6.218
Total. fili towns__ 5.718.015 5.825.160 1191844 5.701.098 5.148_277 1343712
•Includes the combined totals of fifteen towns In Oklahoma.

2352

Financial Chronicle

World Consumption and Production.
To complete our narrative of the world's progress in cotton
production and manufacture, we now add our customary
tables running back for a long series of years. Official data
are used wherever possible. The compilation appended embraces substantially the entire distribution or consumption
(expressed in bales of 500 lbs. each net) of the commercial
cotton crops of the world, and the portion taken by each
country. The figures include linters as well as lint cotton.
THE WORLD'S ANNUAL COTTON CONSUMPTION.
Countr(es.

1932-33

Bales of 500 Lbs.-Nei
Great BMuslu
Continent

1931-32.

1930-31.

9,144.000 8.876.000 8,856.000 10 401000 11.028.000
11.465.000 x1.279 000 11.512.000 11.827.000 x2.200.000
x5,428.000 x4.227.000 x4,469.000 x5.091.001115 770.000

Total Europe
United States
-North_
South_ _
Total United States
East Indies
Japan
Canada
Mexico

6,893,000 5.506.000 5,981.000 6.918.000 7.970.000
2.201,000 2.272 000 2.079.000 1.975.000 1.622.000
2,727,00 2. 71.000 2,283.000 2,679.000 2,488 000
23:1.000
207.000
206.000
176.0011
199.000
215.0(10
164.000
160 000
146.000
167.000

Total India &c
Other countries

5,271,000 5.202 000 4,715,000 5.075.000 4,507.000
3,410,000 2.908.000 2.891.000 2.868,000 2,702.000
24,718,000 22.492.000 22,443,000 25,261.1)00 26,207.000

Total world

a As the weight of the bales In the United States has been Increasing and the gross
weight In 1926-27 averaged 516.44, we began in that year to take that as the exact
equivalent of 500 lia, net, and have continued this practice since then, though the
bales have Increased In weight since then.
WORLD'S COMMERCIAL CROPS OF COTTON (IN BALES OF 500 LBS. NET.
1928-29.
1630 31. 1929-30.
1932-33. 1931-32.
('ountries/ •,a.
Bales,
Bales.
(4mays)coadagforward.)
Bales.
Bales.
15,172,000 15,129.000.13.869,000 14.831.000 15.858,000
United States
2,841,000 3.787.000 4,0(6000 5,0 7.000 4,804.000
East Indies a
984,000 1.374,000 1,564,000 1.676.000 1.622.000
Egypt
Brazil, Sec d
5,000,000 4.600,000 4,300,000 4,410.000 3,527.000
Total
Consumption 52 weeks

24,005.000 24,890 000 24,638,000 25.774.000 25.811.000
24,718,000 22,492.000 22,443.000 25,261,000 26,207.000

Surplus from year's crop k713,000 2,398,000 2,193.000
513,000 *398.000
Visible and invidble stock:
Aug. 1, beginning year.13,769,000 11.371,000 9,178,000 8.663,000 9,059.000
Aug. 1, ending year._ _13,056.000 13,769,000 11,371.000 9,176,000 8.663.000
a Includes India's exports to Europe, America and Japan and mill consumption
In India. Increased or decreased by excess or loss of stock at Bombay.
d Receipts Into Europe. &c., from Brazil, Smyrna, Peru. West Indies, &c., and
Japan and China cotton used in Japanese and Chinese mills.
k Imiletence In the year's new supply.

The above statement indicates, in compact form, the
world's supply of cotton in each of the five years, the amount
consumed and also th3 extent to which visible and invisible
stocks were augmented or diminished.
We now give a compilation which covers the figures of
consumption in detail for each cf the principal countries
embraced in the statement of the world's annual consumption already presented, and the total of all. These figures
are not the takings of the mills, but are meant to show the
actual consumption, and are in all cases expressed in bales
of 500 lbs. net'. The figures in the table cover the years from
1908-09 to 1932-33, inclusive, and are given in thousands of
bales. The figures for 1913-14 to 1932-33, inclusive, cover
the 12 months ended July 31; all earlier years are for the
period Sept. 1 to Aug. 31:
United States.

Europe.
Conll
neat.

East
AU
Mate: !mum Others
TOW

Vorth

South

3,721 5,721 9,441 2.44) 2.464
3,17 5,46, 8.631, 2,26, 2,261
3,77 5,461 9,231 2,23) 2,251
,
4.161 5,721 9,881. 2.59) 2.621
4,40, 6,001 .0,40) 2,881 2,841
4.301 6,004 ,0,301 2,701 2.97!
-- ,
Av.8 y'r> 3,92. 5.721 9,641. 2.48 2,571

1908-09 _
1909-10 __ .
1910-11 -.
1911-12 ....
1912-13 _
1913-14 ...

1914-15__
1915-16 -.
1916-17 __
1917-18 _.
1918-19 ...
1919-20Av.6 yen

Total

Total
4,912
4,533
4,48.
5.211
5.53)
5,686

1,653
1,517
1,494
1.607
1,6471,681

881
1,051,
1,087
1.357
1,354
1.521

5,051 1,599
,

1,209

3.90 5,001 8.901 2,761 3,03 5,801
,
4.001 5.001 9,004 3,231 3,87. 7,111
3.001 1.001 7.001 3,19-, 4,23: 7.43,
,
2.901 3.00 5.901 2,991 1.181 7,174
2,501 3.401 5.900 2,511 3,391 5,912
3,204 3.801 7.000 2.93 3,62' 6,562
_
---3,25) 4,03. 7,283 2.94 3.72 6.661

27r
449
441
511
CD
671

17,184
16,189
16,750
18.566
19.544
19,858
-497 18.012

854 1.8.747
761 10,344
991 18.925
74? .7 190
577 15.889
922 17.777
-1,643 1,696
809 18,097
1,649
1,72:4
1,72:
,
1.631
1.80;
1.536

1.53>
1,74;
1,772
1.651
1,706
1.763

1920-21 ___
1921-22 ___
1922-23 _
1923.241924-25 ___
1925-26 ....

2,100
2.800
2,754
2,751
3.150
3.10

4,400
4.800
5,01Y,
5,30
5,950
13,601

6,500
7.600
7.751)
8,030
9,100
9.60(

2,091
2,324'
2.681
2.099
2,330
2.491

3,117
3.891.
4,379
3.922
4.362
4.68:

5,208
8.226
7,068
6,020
6.692
7,17!

1,800
1,80(1
1.700
1,500
1,800
1.601

1,705
1.965
2.100
1.8011
2,040
2.40)

1.430 16 843
2.090 19,681
C,341 20,959
2.270 19.640
2,215 21.847
2,601 23,379

Av.6 y'rs
1926-27_
1927-28 ...
1928-29 _
1929-30° _
1930-31. _
1931-32__

2.75)
3,080
2.1161
2,942
2.578
2,035
2.500

5,342
7,000
7,7511
8.082
7,822
6,821
6.376

8.10'
10,080
10,710
11.028
10,400
8,856
8.876

2.33
2.500
2,16(
2,201'
1.827
1.512
1.279

4.08'
5.500
5.430
5.770
5.091
4.460
4.227

6.39
,
8.000
7,590
7,9711
6,91.
5,981
5.506

1.7111
2.100
1,700
1.622
1.975
2,079
2.272

2.002
2,450
2,275
2,488
2,679
2.283
2.283

2.157 311.338
2,570 23.200
2,750 25 025
3.099 26,207
3,289 25.261
3.244 22,443
3.267 22.492

Iv.6 y'rs-- 2.683 7,308 9,991 1.913 5.081 6,994 1,958 2.409 3.036 24,435
1932-33 ___ 2.373 6.771 9.144 1,465 5,428 6,893 2.201 2,727 3,753 24,718
•Figures are subject to correction.

Another general table which we have compiled of late
years is needed in connection with the foregoing to furnish
a comprehensive idea of the extent and the expansion of this
Industry. It discloses the world's cotton supply and the
sources of it. The specialboints we.haveisought to illus-




V(310)0

500-0,
Bales.

and
Invisiob
Supply
Beginfling of
Year.

1905-09.
1909-10.
1910-11.
1911-12.
1912-13.
1913-14
kverage
6 years

1,855.09
1,676,52
1.732.49
4,844.74
1,808.92
1,462,891

914-15.
915-16_
916-17.
917-18
916-19
919-20
I ventge
6 years

7.519,38:4,351.616
1.379.08.
4.477.49
1163.471,336,33,

Commercial Crops.
Untied
States.

.411
Others.

Total,

13,496,751
10.224,92:
11,804.74!
15,683.94
13.943,221
i 4,494.763

1,489,16!
1.021.60
1.057.98.
1,845.976
1,254.75!
1.419,89)

17,985,920
15,246,52>
16,862.731
10,529.91.
19,197,97!
10,914,661

Total
Actual
Consump
lion.

Balance of Supply
End of Year.

Visible.
17,164,48:
16.188.56r
16,750,484
18,565,731'
9.54,0'1
19,858.17.

Invisible.

1.875,14.
1,367,621.537,241
3,095,47>
3.015,211
3.877,301

1.801.386
1.364.867
1.307.495
4,713,449
1.447.688
1.642.083

1,496,284
3.045,48
2.585.491
2.795,98
,
1.277.01
4.530,45,

3.855,384
2.333.597
1.892.006
1.367.498
1.019.313
1,239.590

13.274,721 5,181,56 18,456,290 18,011,90
14,766,461 4,812,48'
12,633.961 1,737,20
12.670.091. 1,353.23
11.547,65), 5,238.011
11.410.191 1,551,76
11,814.45' 1.396,91.

19,578,93 18.746,661
,
17.371,16 20,343,75:
18.023,33' 18,924.92:
16.785,663 1.7099.67
16,961,95! 15.689.10
18.211,37. 17,777,66:

12.473.804 5.348,27' 17.822.07 18,096,96

920-21. 5.770.0411
921-22. 6.980.048
922-2:1 7,101.792
923-21. 6,102.705
924-25. 6,136,795
925-26. 0.931.792

11.173 Ills 8,680.000 17,853,918 16.643.830 5,795.209 1,184.839
11.152.720 80502)011 10.802.7211 19,680.971 3.600.006 3.501.792
10.960.777 9.009.011(1 19.980.777 20,959.774 1.953.0011 4.149.795
10.961 000 8.7102100 19.674.000 19.840.000 1.990.0(s• 4.116.795
14,392.0011 8.250,60' 22,6422100 21,847,001 2.130.001. 1.781.795
15,112,00. 9.000,00' 24.112.001 23.379.00( 2.850.001 1.814.795

tverage
6 years
928-27. 7,664.000
927-28. 10286000
1928-29. 9.059,001
029-30 R.681 (WV
930-31. 0,170.000
931-32. 11371000
1 verage
6 years

12,202.589 4.331.66c 19 674.233 20.358.43
.
10,282,000 4.540,000 27.822,000 25,200.000 4.893.000 5,013.000
14,373.0110 31,425.000 23.798.000 25.025.0th 3,860.980 5.200.029
15.858.00 . 9.753.000 25.811.000 26.21)7,1100 3.472.344 5,192,450
..1 63 no, (1.,41 006 l,774 00, ,- 28'.00( 4 7 '4.267 (44 .703
13,869,0e1) 10769000 24.634.000'22.443.1109 6.291.202 5,079,708
15.129,1100 0,761.00024,890.000 22.492.000 6,562,778 7.206.222

03223

15.524.000 9,899.000 15,423,000 24,438.000
nna non 94 712 ono a•290

12700nnn IS 179 nnnQ 292 nnn 94

nos. a, , 1
'
man°

To Illustrate the preceding, take the last season, 1932-33, and the results would
be 89 follows:
Supply
-Vi Able and invisible stock beginning of year
bales.13,769,000
Total crop during year
24,005,000
Total supply-bales of 500 pounds
Distribraton-Total consumption, dm
Leaving viable stock
Leaving InviAble stock

37,774.000
24,718,000
6 325,398
6,730,602

Total visible and invisible stock at end of year

13,056,000

There has been a further decrease the past season in the
world's spindleage, the decrease extending to practically
all parts of the world except the Orient, where there has been
considerable increase. The following table shows thenumber
of spindles in all the countries of the world for each of the
last five years:
NUMBER OF SPINDLES IN THE WORLD.
1933.

1932.

1931.

1930.

1929.

Great Britain
Contluent

49,001,000 51.908.000 54.240.000 55.207.000 55,917.000
49,008,000 49.534.000 48.466.000 48,1393,000 48,388,000

Total Europe
United States
North
South

98,039,000 101,442,000 102,712.000 103,900,000 104.305,000

Total U. 13
East Indies
Japan
China. Egypt. &el.._

WORLD'S COTTON CONSUMPTION.

500-1b. bale.
000s omttres Great
6r0'n

WoRLD's suPpLY AND DISTRIBUTION OF COTTON

1929 30 I 1928-29.

2,373,000 2.500.000 2,035.000 2,578.000. 2.945000
6.771.600 6,378.000 6.821.000 7.822.0001 8.083.1)00

Sept. 30 1933

trate by the statements are, first, the relative contribution
to the world's raw material by the United States and by
other sources, and,second, to follow its distribution. Figures
for 1908-09 to 1912-13 are for the year ending Aug. 31, since
then for the years ending July 31. The figures are all intended to be in bales of 500 pounds net.

30,894,000 31.709.000 32.676.000 34.025.000 34,819,000
9,506,003 9,312.000 9,125.000 8.907.000 8,701.000
8,209,000 7,798.000 7,312.000 7.072.000 6.530.1)00
4,535,000 4.285.000 4.054,000 3.829,000 3.602.000

11,842,000 12.571 000 13.587.000 14,903.000 15.971,000
19,052,000 19.138,000 19,109.000 19.122.000 18.848.000

Total India, dm
22,300,000 21,395.000 20.491,000 19.803,000 18.838.000
Canada
1,240,000 1,234.000 1,276,000
1,277.000 1.240.000
Mexico. So. Am..&e. 5,181,000 5,236.000 5.123.000 5,104.000 5,001.000
Total other

6.421,000

6,470.000

6,399.000

6.381,000

6,241.000

In the above all figures except those for the United States
have in the more recent years been taken from the returns
compiled by the International Federation of Master Cotton
Spinners' and Manufacturers' Associations.
Details of Crop of the United States.
We now proceed to give the details of the crop of the
United States for two years:
LOUISIANA.
1932-33
1931-32
Exported from New Orleans:
To foreign ports
*1,874.200
*1,480.209
To coastwise ports
c421,683
c309.398
Inland by rail, &a
48,359
97,786
Manufactured
35,884
22,417
Burnt
Stock at close of year
a783,733-3,163,859
a975,506-2,885,316
Deduct:
Received from Mobile
2.131
6.401
Received from Galveston
5,215
9.663
Received from Houston_ _ _
.
8.338
32,908
Received from Texas(Ay _
408
978
Received from Los Angeles_
235
Received from Corp. Christi
175
3,047
Received from San Francisco
100
Received from New York
2
Received from Calexico_
1.000
Received from Lake Charles
238
Stock at beginning of year.-- 975,506- 992.103
a579,654- 633.891
Movement for year_bales.

2,171,756

2,251.425

* Includes 69,076 bales exported from Lake Charles, La.. in 1931-32
and 159 bales in 1932-33. a Includes 48.538 bales stock at Lake Charles,
La., on July 31 1932 and 51,930 bales on July 31 1933. c Includes 25,937
coastwise from Lake Charles in 1931-32 and 20.214 bales in 1932-33.

Volume 137

Financial Chronicle
TEXAS.
1932-33

1931-32
Exported from Houston (Port):
To Mexico
16.193
Other foreign ports
2,568.323
2,655.094
Coastwise and inland ports_ 212.631
175.482
Local consumption
11,550
10,365
Burnt
Exported from Galveston:
To Mexico
7.519
Other foreign ports
2 016.850
2,190.186
Coastwise and inland ports.. 134,242
102.317
Local consumption
150
361
Burnt
12.561
Exported from Texas City:
To Mexico
Other foreign ports
166,006
179.441
Coastwise and Inland ports.
64,011
Exported from Corpus Christi: 87,130
To Mexico
To other foreign ports
313.752
345.646
Coastwise and inland
18,947
67,561
Exported from Beaumont, El
Paso, Eagle Pass, &c.:
To Mexico
To other foreign ports
17,409
32.189
Coastwise and inland
3.623
Stock at close of year:
At Houston
1.156.132
1,075.164
At Galveston
434.997
462,179
At Corpus Christi
149,266
74.957
At Texas City
12.896
15,086
At Beaumont
18,055-.7,341,038
-7.466.223
Deduct
Received at Houston from
other ports
6,854.
855
Received at Galveston from
other ports
92,131
71.130
Received at Texas City from
other ports
Stock at beginning of year:
At Houston
1,075.164
729.307
At Corpus Christi, &c
74.957
29.498
At Galveston & Texas City- 477,265-1,726.371
411.051-1.241.841
Movement for year...bales
5,614.667
6.224.382
ALABAMA.
1932-33
1931-32
Exported from Mobile:
To foreign ports
383.519
577.858
Coastwise, Inland, &c
29.738
31,943
Local consumption
8,402
7.146
Stock at close of year
127,213- 548,872
160.727
777,674
Deduct
Receipts from Florida, Pacific
Coast, &c
575
790
Stock at beginning of year160,727- 161.302
208,729- 209.519
Movement for year.. bales_

Exports

387,570
MISSISSIPPI.
1932-33
18,316
18,316

*FLORIDA.
1932-33
Exported from Pensaeola, Panama City and Jacksonville:
To foreign ports
163,010
To coastwise ports
252
Stocks at close of year
39.225- 202,487
Deduct
Received at Jacksonville from
Savannah
11
Stock at beginning of year-16,994- 17.005

568,155
193142
2.011
2,011
1931,32-126,120
17
16,994- 143.131

17.948- 17,948
Movement for year...bales185.482
125.183
*These figures represent this year, as heretofore,
only the shipments
from the Florida outports. Florida cotton has also gone inland
to Savannah.
&a., hut we have followed our usual custom of counting
that cotton at the
outports where it first appears.
GEORGIA.
1932-33

1931,32
-Exported from Savannah:
To foreign ports
265,404
461,728
To coastwise ports. Inland.
&c
19,905
24.556
Local consumption
236
257
Exports from Brunswick:
To foreign ports
38.246
44.459
To coastwise ports
Stock at close of year:
At Brunswick
At Savannah
105,494- 429,285
203,478- 734.478
Deduct
Received from Brunswick, &c..
127
150
Stock at beginning of year:
At Brunsw'ck
At Savannah
203,478-- 203.605
343.422-- 343.572
Movement for year..
225.680
390.906
VIRGINIA.
932-33
-1931-32-----Exported from Norfolk:
To foreign ports
42,277
53,799
To coastwise ports
17,475
21.598
Shipped inland*
20,613
3,804
Local consumption
224
76
Exported from Newport News,
&c., to foreign ports
Stock end of year, Norfolk---- 24,400- 104,989
43.953- 123,230
Deduct
Received from Wilmington,&c
Received from other No.Cam.
3,781
5,906
Received from Houston and
New One-ms
2.200
Stock at beginning of year
43,953- 49.934
56.100- 62,006
Movement for year-bales55.055
61,224
SOUTH CAROLINA.
1932-33
931,32
Exported from Charleston, &c.:
To foreign ports
252,195
196.695
coastwise ports, ml.,&c.:
To
Coastwise
3,512
1,263
Inland & local consumption:
Inland
29,134
8.535
Local consumption
Stock at close of year
33,398- 318,239
97.445- 303,938
Deduct
From Galveston, &c
2.515
9.178
Stock at beginning of year
97,445- 99.960
153,990- 163,168
Movement for year _bales_
218.279
140.770




2353

NORTH CAROLINA.
932-33
1931-32
Exported from Wilmington:
To foreign ports
34.708
43,420
To coastwise ports
1.529
26
Inland by rail
22,061
2,015
Local consumption
8.070
6.155
Coastwise from Wash.. &a__
3. 41
5 906
Stocks at close of year
15,596- 85,745
7,09.-64.616
Deduct
Received from other ports_
16.266
Stock at beginning of Year..
7.094- 23,360
3.799-3.799
Movement for year.. _bales_
62,3.35
60,817
TENNESSEE, &c.
1932-33
1931-32To manufacturers direct, net
overland
754,609
705,640
To New York, Boston, &c., by
mil
20,065
26,836
Total marketed from Tennessee, &c
774,674
732.476
Total product detailed in foregoing States for year ended July 31
1933
9.713.864
Mill takings in South, not included
a5.457,958
Total crop for United States for year ended July 31 1933_bales 15,171,822
a These are Southern mill takings. Southern consumption was 77,192
bales less than that amount, or 5,380,766 bales.

Overland Crop Movement.
The following shows the details of the overland movement
for the past three years:
A MUM ShippedYin St. Louis
Via Mounds, &c
Via Rock Island
Via Louisville
Via Cincinnati
Via Virrinia points
Via other routes East
Via other routes West

1932-33.
199,135
168,689
470
18,816
12,891
121,171
8,452
a446,171

1931,32.
152,149
201.041
660
9.009
16,356
158,413
5.814
a364.945

1930-31.
303.339
246,512
1.645
24.243
2.947
179.192
27.1165
516,962

Total cross overland
975,795
908.467 1.301.945
Deduct Shipments
Overland to New York. Boston.&e
20,065
36.436
26.836
Between Interior towns
28.832
19.184
40.021
Texas Inland and local mills
31,129
36.164
76.609
New Orleans inland and local mills
43.646
72.948
84,158
Mobile hound and local mills
11,097
18.097
15.620
Savannah inland and local mills.
8,925
9,203
16.949
Charleston inland and local mins
29.134
11.578
8.535
North Carolina ports inland and local mills--30.131
8.295
8,170
Virainia ports Inland and local mills
18,227
3,633
3.127
Jacksonville inland and local consumption
-17
112
Total to be deducted
221,186
202.827
292.905
Leaving total net overland*
754,609
705.640 1.009.040
• This total includes shipments to Canada by rail, which in 1932-33 amounted to
166,146 bales. a 75,000 added for adjustments.

Below we give the total crop each year since 1896-97. All
years prior to 1913-14 cover the period Sept. 1 to Aug. 31.
The year 1912-13 consequently includes August 1913, which
is also a part of 1913-14.
Years.
1932-33
1911-32
1930-31
1929-30
1928 29
1927-28
1926-27
1925-26
1924-25
1923 24
1922-23
1921-22

Bales.
15.171.822
15.124.612
13.869.804
14. 30.742
15.358.313
14.372.977
19.281.999
15.452.267
14.715.639
11.326.790
11.248.224
11.494.720

Years.
1920-21
0-20
10,
1919-19
1917-19
1916-17
1915-16
1914-16
1913-14
1912-13
1911-12
1910-11
1909-10
1908-09

Bales.
11.355.190
12.217.552
11.602.634
11.911.896
12.975.569
12.953.450
15.067.247
14.894.901
14.128 902
16.043.316
12.132.332
10.650.961
13.828.846

Years.
1907-0R
1906-07
1905-06

1904-05

1903-04
1902-03
1901-02
1900-01
1999-00
1999-99
1997-99
1896-97

Bales.
11.581.929
13.550.780
11.319.860
13.556.841
11.123.686
10.758.326
10.701.453
10.425.141
9.439.559
11.235.393
11.180.960
8.714.011

Weight of Bales.
The weight of bales the past season was somewhat heavier
than in the previous season, the average for 1932-33 having
been 519.97 pounds per bale against 518.85 pounds per bale
in 1931-32, 520.11 pounds per bale in 1930-31, 522.14 pounds
per bale in 1929-30, 520.26 pounds per bale in 1928-29,
516.14 pounds in 1927-28, 514.71 pounds in 19'46-27, and
511.95 in 1925-26. The crop was of good grade, averaging
about 10 points better than Middling. The average weight
of bales and the gross weight of the crop we have made up
as follows for 1932-33, and give 1931-32 for comparison.
Mooenumt
Through-

IOW .1auvu 4.44, On 1.500.

Number of
Bales.

Weight in
Pounds.

Cu,•

ammo.. vv., ea avv.a.

Aver. Number oil Weight in
Weight Bales.
Pounds,

seer.
Weight
Texas
5,614,667 2,982,617,511 533.00 6,224,382 3,324.940.377 534.18
Louisiana
2,171,755 1,145,384,114 527.40 2,251,425 1,182.2 m,810 525.13
Alabama 0
405,886 205,190,038 508.00 570,166 289.302,228 507.40
Georgia b
411,162 203.286,446 505.53 516.099, 263.091.850 509.78
South Carolina
218,279 110,230,895 505.00
140,770' 72.496,550 515.00
VIntinla
55,055 27,527,501)500.00
61,2241 30.612,000 500.00
North Carolina__
62,335 29,944,800 480.00
60.817 29,678.696
Tennessee, dm_ 6,232,632 3,178,642,320 510.00 5.303,744 2.657,175.744 484.00
501.00
Total crop.-- 15.171.822 7.888.823.674 519.97 15.126.e17I7.841.588_255 518145
a Including Mississippi. b Including Florida.

The relation of the gross weights this year to previous
years may be seen from the following comparison:
Crop.

Season of
-

A eic
t eraft

No. of Bates.
1932 33
1931-32
1930-31
1929-30
1928-29
1927-28
1926-27
1925-26
1924-25
1923-24
1922-23
1921-22
1920-21
1919-20
1918-19

Weight. Pounds, per Bale.

15,171,822
15 118 *417
13.868.804
14.630.742
15.858.313
14.372.877
19.291.999
15.452.267
14.715.639
11.326.790
11.244.224
11.491.720
11.3.55.180
12.217.552
11.602.634

7,888.823.674
7.8, 588 255
9
7.213.364.418
7.638.942.456
8,250.547.617
7.418.414.991
9.924.773.826
7.910.892.917
7523.144.619
5.735.826.695
5.741.884.193
5.831.095.010
5.836.947.956
6.210.271.326
5.925.386.182

519.97
5i 4.85
520.11
522.14
520.26
516.14
514.71
511 95
511.23
5041.39
510.47
507.28
514 08
508 33
510.69

Sept. 30 1933

Financial Chronicle

2354

STATES
COMPLETE DETAILED STATEMENT SHOWING EXPORTS OF COTTON FROM THE UNITED
BY PORTS AND COUNTRIES OF DESTINATION.
Exports from-

Season of 1932.33.
Country and Part of
Destination.
Galreston.
England
Hull
195,148
Liverpool
03.506
Manchester
London
Scotland-Glasgow _
France-Bordeaux_
Dolmens
46,301
Dunkirk
183,249
Havre
Marseilles
Reval
Cette
Germany
276,862
Bremen
1,450
Hamburg
34,240
.
Holland-Rotterdam
4,149
Belgium-Antwerp _.
39,490
Ghent
18,461
Denmark-Copenh'n.
Alborg
Norway Bergen.
3,493
Oslo
Sweden-Gothenbur t17,935
Gefle
Norrkoping
Oxeland
Stockholm
Warberg
Poland
33.728
Gdynia
. 138,849
Spain-Barcelona
Alicanti
Gijon
747
Bilbao
799
•
Corunna
1,084
Malaga
1,145
Passages
283
Santander
Heislogfor
Tarragona
1,730
Portugal-Lisbon..._ •
17,445
Oporto
615
Lexfoes
Russia-Leningrad
Italy
5,225
Flume
133,570
Genoa
3,433
Naples
16,520
•
Trieste
500
Leghorn
51,546
Venice
Mestre
Finland-Abo
Mantyhwto
Wosa
Greece--Patras
MittIone
514
Piraeus
Saionica
Syra
Latvia-Riga
605,594
Japan
64,790
China
Canada
7,519
Mexico
Champerleo
-Martinique
W. Ind
Nassau
Puerto Rico
San Juan
Canal Zone-Cristobal
Colon
Philip. Isl.-Manila
Honduras-Tela_
Salvador-S.Salvado
Uruguay-San Felipe
Venezuela-Maracalb
Companca
Guatemala
200
Porto Colombla
Colombia-Bogota__
70
Buena Ventura
Barranquilla
Porto Barrios
258
Cartagena
Manizalls
Maddellon
2,046
Equador-GUaYatItillBolivia-Lapaz
Chile-Tachuana__
Arica
21,880
India
Bombay
Africa-Cape Town_
Durban.
Australia
New Zealand

(e)
Pensacola,
(f)
Jack(d)
(c) Lake
Gulf- son elite BrunsCharles
Witwick &
and
port
and
(b)
and Panama Saran- Charles- ming- NorNew
Corpus Other
ton. folk.
ton.
nah.
Houston. Christi. Texas. Orleans. Mobile. Clio.

224,959 33,566 38:195
64,678 12,177 14,805

New
York.

Booton.

(g)
Philo- San
del- Franphta. ctsco.

Los
Angeles.

Seattle

Total.

1,860
---------------------------------------- --------------8.169
1,860
52 --------11,918 ____
96,. 50,17 ____ 10,713 31,806
34
277,696 82.
____ 452,212
90,912 37,828 14,147 60,749 41,762 ____ 16.735 4,313 ------------600
1,031
25
____
277
579

41
154,423
717,705
6,162
1,050
____
190
200
167
____
___
____
___
____ ____
167
50
50
____ 1.873,348
70,441 410,602 159,012 87,070 95,019 133,134 6,88' 11,321 9,131 ------------11,961 ----78,
555,240 46,668
454
93 -------------------321
1,528 7,132 13,378
13,229 8,331
28,385 3,463 1,144
194 ------------142,290
100 _
32,901 13,930 3,465 9,557 1,572 ____ 1,000
41,864 7,105 1,362
2,133 9,647 ---------------------------------44,414
____
20,252 3,142
485
1,452
3,154
0
43 ------------------------ 156,09
508 3,450
727
650
34,096 2,619
61,780 8,459 4,268
39,539
____
37.5
14
20,489
--__ ----39
...
------------ ---- ---------------------39
--------------------100
100
9,147
--1,176
____93
4,386
499
54,
-----------------------------------------------10,225
450 1,208
24,591
235
-----------------------------------200
35
--------------------609
600
1,750
___
___ ___
_
1,750
330
-----------------------------------------------30
300
1,114
254 ____-----------------------------------------------550
700
600
100
195
800
39,844 3,172
78,478 7.436 2,367
301,329
--------------------------------------433
579
17,751
110,685 25,706 7,334
500
___
____ ____
____
______
____
100
400
447
---- -447---- ---- ---- ---1,350
-------------------------------603
3.000
___
____ ____
1,951
672
2,
----------------------------------------------__ii
__Li
1,123
3,828
___
____
____
___
---175
2,568
633
____
____
____
____
---- ---- ---350
8
____
____
_.____
___
-325
____
____
50
-11,168
----------------------------------4(0
____
---112
150
2,101
56,19
9
-----------------------------------____
15,453
270
131 2.472
20,304
---------------------------------------------6,247
200
448407
325
4,252
34,000
-----------------------------------------------34
.000
100
100
-9,763
------------------------------------------------1,000
500
3,033
-------------------- 591,681
____ 16,.,
137,454 15303 3277 571
209,138 16,541)
17,401
------__
4,894
ICO
____
100
7,364
46,584
---- ------4,834 1,232
____
54
23,926
1,675
____
__-____ ____
___
____
---650___
____
____
____
525
26 ------------------------ 154,220
____ 6,000
338 3,000
40,481 4:403
46,830 1,596
7,169
____
5,220
744 1,200
986
____
350
___
.500
136
1,900
____
___
_
---____
1,900
----------------------------------------------10
10
8
- _-_
____
____
____ ____
____
____
188
14
____
14
413
1,
------------------------------------ -------- ____
20
_
_
779
55052.
-----------------------------------------------25
224
___
___
____
____
__
____ ____
____
224
------------------------------------------------ ----1,175
1,175
1,250
____ 34,t 118i
i
___
____
501,244 73.000 10,617 332,103 32780 11,900 19.)
5 307,947
1,339
317 ____ 1.246
499
____
.
467 100,515 12,713 .5,066 4,000 2 000 ---_
107,576 7,414
519 al89,662
__
2 6,214 ___ 5,722
3,296
7,772
42,778
----------------------------------------1,170 ____
2,446
___ 15,499
16,133
1001
-----------------------------------------------10
__
____
__
170
------------------170
15
----------------------------------------------15
0
12
-----------------------------------------------49
80
0
50
-----------------------------------------------500
____
266
____
266
650
-56(5
____
50
300
4
____
____
--_
____
-------__
450
____
__„
____
---- ---700
___
-___ ---____
__-_
700
------------------------------------------------227
227
---200
____
---200
---- ---41
69,444 4,627 1,141
298,574 59,458 21,821

28.552 1,085
135,93f 15,870

___
244

2,580
500

-___ --_
_-_
____ -___
____
_
393 ____
____ ____
____
___
____
____
62 ---------------------------2,007
-------------------------------

,
3- iai

30

1.026
289
27,256

____
3,790
____
____
--------------------------------------------------200
-----------------------------409
------------------------------------------------------------------550
- - - 275
483
------- -_-2
----2 5
20
____
___
____
------------------------------------------------100
100
------------------------------------------------5,002
1,930
____
2.600
____
2,600
------------------------------------------------4
889
----_-_
---- ---- ---- ---- ---- ---- ---___----600
____
55,527
____
2,084 __
--------------------100
150
--------4,057
1,241
------- ---591(350 __
------------1,314
---------------- ---243
150
150
25
25
44
200
--------300
550

Ma S,811,236
020 44.392 140,119
9 n94 26') 2.584.500 313.712 198.875 1.874.200 401.835 163.010 303,6503252,105 34.708 42,277 49.566 7,203
to Dunkirk, 1,053; to Oslo, 93; to Gothenburg, 1,298; o Bremen, 65 488; to Gdynia. 1,548: to
Includes 166,146 bales shipped by rail. b Includes from Texas City
a
Rotterdam. .306:10 Genoa, 2.996:10 Barcelona 4.271:10 Japan, 10,6 7:10 China. 467;
.
8233 to Havre. 20 380; to Ghent, 4,210; to
Liverpool. 37.110: to Manehm(ter• 11)
Lisbon. 112; to Passages, 175: to Copenhagen. 375: to Leixoes, 448, From BeaurrOnt to Oporto 401; to Bremen,
to Oporto, 2,072: to Malaga, 14; to Antwerp, 150; to 1,085; to Gdynia. 819; to Piraeus, 20: to Dunkirk. 388: to Manchester, 2.082; to Antwerp, 335 to Ghent, 58:10
to Havre, 1,441; to Liverpool,
4.953; to Genoa, 665;
El Paso to Mexico, 15.460 c Includes from Lake Charles to Bremen, 32,928; to Warberg 673; to Gdynia,
Hamburg, 1,144; to Barcelona, 3,063: to Rotterdam, 56. From
6,736; to Havre, 34,799; to Abo. 200 ;to Naples, 1,284; to Genoa, 9,590:10 Oporto, 159: to Warberg, 100; to
768; to Ghent. 9.117; to Rotterdam, 3,402; to Liverpool.
3.572:10 Gothenburg, 1.250; to Antwerp, 649; to Japan. 22,879:10 China, 11.275; to Bordeaux. 1,036; to Leixoes, 101; 0 Canada, 3,206;
Manchester. 4,043; to Dunkirk,
Includes from Gulfport to Liverpool, 16,013: to Havre. ICC; to Bremen. 844; to Rotterdam, 406; to Manchester,
to MarKilles. 2011: Barcelona. 100; to Leningrad, 11,700. d
Panama City to Bremen, 16,702; to Liverpool. 9.461; to Hamburg. 597; to Menehestet. 2.788 to Rotterdam, 312. From Jack172: to Hamburg, 781 e Includes from 4.410; to
Rotterdam. 224; to Liverpool, 10,601; to Japan, 3.80f; to China, 3,800: to Genoa, 1,336; to Chest. 200. From PensaBremen,
sonville to Manchester. 1,395; to
Rotterdam, 2.929; to Ghent, 450; to Gdynia, 195; to Liverpool, 14,612; to Manchester. 9,964; to Havre,
Genoa.
cola to Bremen, 65,958; to Hamburg, 931: to 1,233; to1.941: to 18; to B trcelona, 433; to Xlettre, 5. f Includes from Brunswick to Bremen, 10,553; to Rotterdam, 1,647;
Irlette,
244; to Venice. 338; to lapel, 6.100: to China,
to Japan, 3.200; to China. 2.500. g Includes from Philadelphia to Great Britain, 126: to Poland, 600; to HolitlAnche3ter, 440:
to Ghmt. 50: to Liverpool. 10.856; to
land, 194.
Total

Date for Hearing on Cotton Processing Tax Scheduled
for October 2.
on the cotton processing tax which had
The hearing
originally been set for Sept. 7, but had been postponed before
that time until a date to be announced later, is now fixed for
Oct. 2. The hearing will be held to determine whether the
payment of the processing tax places cotton processors at a
disadvantage in competition with producers of certain other




fibers by reason of shifts in consumption to such commodities
or products thereof. From a Washington dispatch Sept. 22
to the New York "Journal of Commerce" we quote:
The cotton States' conference earlier this week sought removal of tho
processing tax on cotton, but has apparently receded from this position.
Secretary of Agriculture Wallace and his associates have asked cotton
farmers to find other means for raising money expended In carrying out
the 1933 acreage reduction program before becoming too insistent upon
the withdrawal of the processing tax.

Volume 137

Financial Chronicle

The hearing is the second to be held under Section 15-d of the Agricultural
Adjustment Act. Commodities to be considered include paper,jute, hemp.
sisal, henequen, abaca, 1stle or ixtle, phormium, kapok, crin vegetal, sunn,
cantala, piteria and coil* or plassava.

The official notice of the hearing follows:
Notice of Hearing with Reference to Processing Taxes on Commodities in
Competition with Cotton.
Under the Agricultural Adjustment Act, approved May 12 1933, as
amended, and under the General Regulations, Series 1. Revision 1, of the
United States Department of Agriculture, Agricultural Adjustment Administration, issued pursuant to said Act.
Notice is Hereby Given of a hearing to be held in the auditorium of the
National Museum. Constitution Ave. and Tenth St., Washington, D. 0.,
on Oct. 2 1933 at 9.30 a. m., at which interested parties may be heard as
to whether the payment of the processing tax upon cotton is causing or
will cause to the processors thereof disadvantages in competition from
paper, jute, hemp,sisal, henequen, abaca. hale or ixtle, phormium, kapok,
crin vegetal, Bunn, cantata. piteira, coir or piassava, by reason of excessive
shifts in consuhaption between such commodities or products thereof. This

2355

hearing is to be held pursuant to Section 15 subsection (d) of the aforesaid
Act, which provides that If the Secretary of Agriculture finds, after investigation and due notice and opportunity for hearing to interested parties,
that such disadvantages in competition exist, or will exist, he shall proclaim
such finding and shall specify in this proclamation the competing commodity and the compensating rate of tax on the processing thereof necessary
to prevent such disadvantages in competition; that thereafter there shall
be levied, assessed, and collected upon the first domestic processing of such
competing commodity a tax, to be paid by the processor, at the rate specified, until such rate is altered pursuant to a further finding under this
section, or the tax or rate thereof on the basic agricultural commodity is
altered or terminated; and that in no case shall the tax imposed upon such
competing commodity exceed that imposed per equivalent unit, as determined by the Secretary, upon the basic agricultural commodity.
(S) C. F. MARVIN, Acting .Secretary of Agriculture.
Dated: Sept.21 1933.
Washington, D. O.

Items regarding the proposed hearing appeared in these
columns Sept. 2, page 1659, and Sept. 9, page 1865.

Indications of Business Activity
THE STATE OF TRADE
-COMMERCIAL EPITOME.
Friday Night, Sept. 29 1933.
Business activity showed a slight recession during the last
half of September. Usually a seasonal improvement sets in
at this time. However, the public works and related measures are still expected to make for a late seasonal rise in
general business activity to a new high level for the year.
The spreading of the strike movement in labor circles has
added considerably to the uncertainty in business and
industry. Steel and automobile operations held up fairly
well, but coal, electricity and oil activity shows a slight
falling off. Lumber production gained over the previous
week and new business was the largest since July. Carloadhags reached the highest total seen in two months. Automobile output was slightly under the August average weekly
rate, but indications are that the third quarter will show a
total more than 100% above that of the same period in 1932.
The steady gain in employment and consequent increase in
buying power helped retail business. After showing signs
of falling off for nearly two weeks retail buying was resumed
with more surety.
Retail sales in some districts ran far ahead of the comparative totals for any fall in the last three years, but there
was a decline in cities where the weather was unfavorable and
unemployment was yet to be relieved. When deductions
are made for these sections, the average dollar volume of sales
is only slightly above that of a year ago. Sales of shoes,
millinery, hosiery, jewelry, handbags and toilet accessories
were larger. High-grade furs and silk goods continued in
good demand and sales in the current season are expected to
be the largest in many years. . Sales of men's clothing were
the largest in three years, despite higher prices. Top coats
were in better demand. The trend of sales of furniture,
rugs and housefurnishings continued upward. Sales of
women's ready-to-wear clothing were larger. More interest
was shown in evening gowns. There wasa better demand for
office supplies and equipment. Whclesale buying showed
some broadening despite the religious holidays, and prices
were firm. There was an increased demand for dresses and
suits, but sales of coats were smaller. Jewelry reorders increased and there was a large movement of house-furnishings
and furniture. The weather retarded the fall buying movement to some extent yet the men's clothing division continued
to make a good showing. Cotton goods were more active
with sheets in good demand. Carpets, rugs, and floor coverings were in better demand. Wholesale hardware dealers
reported a better business. The production of cotton mills
was restored nearly to the August rate owing to heavier
sales during the last two weeks. Textile prices advanced
and are now double those in April. Many mills are sold up
on print cloths to the end of the year. Cotton yarns were
more active. Mills producing men's wear woolens and
worsteds reported a better business. In many cases they
refused to quote prices or promise deliveries.
Early in the week there were frequent scattered showers
over many parts of the country but rainfall was mostly light
to moderate, although in some sections precipitation was
quite heavy. Late on Sept. 24 a hurricane struck Tampico,
Mexico, which raged through the night, causing loss of life
and damage. The town was practically isolated as all wires
were down, railroad tracks washed out and roads flooded.
The latter part of the week there have been only
light scattered showers and temperatures mostly unseasonably high.




To-day it was 60 to 73 degrees here and mostly 'clear.
The forecast was showers Saturday afternoon or night with
mode temperatures. Overnight at Boston it was 60 to
66 degrees; Baltimore, 60- to 80; Pittsburgh, 56 to 72;Portland, Me., 56 to 72; Chicago, 48 to 68;Cincinati756 to 767
Cleveland, 56 to 76; Detroit, 52 to 68; Charleston, 74 to88i
Milwaukee, 50 to 62; Dallas, 72 to 92;
68 to 90;
kansas City, Mo., 60 to 76; Springfield,.Mo., 66 to 70; St.
Louis, 60 to 70; Oklahoma City, 70 to 92; Denver, 58 to 78
.
;
Salt Lake City,56 to 84; Los Angeles,58 to 70; San Francisco,
.58 to 74; Seattle, 50 fo
-62;
-Montreal, 54 to 68, and Winnipeg, 38 to 52.
Loadings of Revenue Freight Lower Than in Preceding
Week, but Still Show Gain Over Same Period Last
Year. '
The first 15 major railroads to report car loadings of
revenue freight originated on their own lines for the seven
days ended Sept. 23 1933 loaded 255,771 cars, as compared
with 260,161 cars in the preceding week and 241,023 ca.s in
the corresponding period last year. With the exception of
the Atchison Topeka & Santa Fe Ry., the Gulf Coast Lines
and the Missouri Pacific RR., all of these carriers showed
increases over the 1932 period. Comparative statistics
follow:
REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS.
(Number of Cars.)
Loaded on Lines,
Weeks Ended-

Rec'd from Connections,
Weeks Ended
-

Sept. 23 Sept. 16 Sept. 24 sex.23 Sept. 16 Sept.24
1933. 1933. 1932. 1933. 1933. 1932.
Ateh. Top.& Santa Fe Ry
21,038 21,149 21,282 4,841 4.602' 4,793
Chesapeake & Ohio Ry
23,223 22.799 21,031 8.913 8,348 7.257
Chic. Burl.& Quincy RR
16.307 15,662 15,865 6,634 6.463 6,212
Chic. Milw.St. Paul & Pac. By
18,523 18,057 18,354 6,522 6,271
Chicago & North Western Ry _ - 15,312 14,205 14,478 9,010 8,457 7,330
8.623
Gulf Coast Lines & subsidiaries_ _
1,636 2,008 2.161 1,389 1,230
International Great Northern RR 2,974 2,939 2.220 1,644 1,469 1.007
1.352
Missouri-Kansas-Texan Linea_ _ _ 5,943 5,605 5,545 2.656 2,718 2,476
Missouri Pacific RR
15,150 15,292 15,861 7.277 7,196 7,110
New York Central Lines
43.816 45.267 41,050 54,232 56,250 50.084
New York Chic.& St. Louis Ry.
4,686 4.718 4,203 7.997 7,715 7,065
Norfolk & Western Ry
21,157 21.019 16,333 4,304 3,860 3,379
Pennsylvania System
59,126 61,886 53,171 35.212 36,996 34,009
Pere Marquettte Ry
4.277 4,350 4,143
x
Wabash Ry
5,603 5,205 5,326 6,548 6758
6,844
Total
255.771 260,161 241.023 157,179 158,156 147.541
x Not available.
TOTAL LOADINGS AND RECEIPTS FROM CONNECTIONS.
(Number of Cars.)
Weeks Ended.
Illinois Central System
St. Louis-San Francisco Ry

Sept. 23
1933.

Sept. 16
1933.

Sept. 24
1932.

28,597
13.847

27,458
29,416
13,015
13,994
Total
42,444
40.471
43.410
-Lehigh Valley RR. car loadings for
Note.
Increase of 3% over the previous week and 8% the week ended Sept. 23 showed an
when compared with the corresponding week a year ago.

Loading of revenue freight for the latest full week-that
is, for the week ended Sept. 16
-totaled 652,016 cars, the
American Railway Association announced on Sept. 22.
This was an increase of 80,629 cars above the preceding
week this year, which included Labor Day holiday, and an
increase of 64,770 cars above the corresponding week in
1932. It was however, a decrease of 90,598 below the
corresponding week in 1931. Details for the latest full week
follow:
Miscellaneous freight loading for the week of Sept. 16 totaled
231.447
cars. an Increase of 26.892 cars above the preceding week, and
13.617
cars above the corresponding week in 1932, but a decrease of 44.130
cars
under the corresponding week in 1931.
Loading of merchandise less-than-carload-lot freight totaled
172.371
cars, an increase of 24,215 cars above the preceding week. but 4,577
cars

Sept. 30 1933

Financial Chronicle

2356

below the corresponding week last year, and 45,541 cars below the same
week two years ago.
Grain and grain products lbading for the week totaled 31,457 cars, an
Increase of 4.653 cars above the preceding week, but 4.433 cars below the
corresponding week last year and 8.733 cars below the same week in 1931.
In the Western Districts alone, grain and grain products loading for the
week ended Sept. 16 totaled 20,547 cars, a decrease of 4.007 cars below
the same week last year.
Forest products loading totaled 25,219 cars, 2.959 cars above the preceding week and 7.169 cars above the same week in 1932, but 1,344 cars
below the same week in 1931.
Ore loading amounted to 40,081 cars, an increase of 5.385 cars above
preceding week. 33.523 cars above the corresponding week in 1932, and
10.226 cars above the same week in 1931.
Coal loading amounted to 124.805 cars, an increase of 15.463 cars above
the preceding week, 18.013 cars above the corresponding week in 1932,
and 1.800 cars above the same week in 1931.
Coke loading amounted to 6.571 cars. 267 cars below the preceding
week, but 3.099 cars above the same week last year, and 1,965 cars above
the same week two years ago.
Livestock loading amounted to 20,065 cars, an increase of 1,329 cars
above the preceding week, but 1.641 cars below the same week last year
amd 4,841 cars below the same week two years ago. In the Western
Districts alone, loading of livestock for the week ended Sept. 16 totaled
last
15.430 cars, a decrease of 1,393 cars compared with the same week
year.
All districts, except the Southern and Southwestern, which showed
small reductions, reported increases in the total loading of all commodities
compared with the same week in 1932. but all districts reported decreases
compared with the corresponding week in 1931.
Loading of revenue freight In 1933 compared with the two previous
years follows:

1931.

1933.

Total

1932.

1,910,496
1,957,981
1,841,202
2,504,745
2,127,841
2.265,379
3,108,813
2,502,714
666,652
571,387
652,016

2,266,771
2.243,221
2,280,837
2,774,134
2,088,088
1,968,488
2,420,985
2,064,798
581,325
501,537
587,248

2,873,211
2,834,119
2,936,928
3.757,863
2,958,784
2,991,950
3,692,362
2,990,507
759.871
887.750
742.814

20,109,226

Four weeks in January
Four weeks in February
Four weeks in March
Five weeks in April
Four weeks in May
Four weeks in June
Five weeks In July
Four weeks In August
Week ended Sept. 2
Week ended Sept. 9
Week ended Sept. 16

19,755,430

27,205,959

The foregoing, as noted, covers total loadings by the railroads of the United States for the week ended Sept. 16. In
the table below we undertake to show also the loadings for
the separate roads and systems. It should be understood,
however, that in this case the figures are a week behind
those of the general totals-that is, are for the week ended
Sept. 9. During the latter period a total of 50 roads showed
decreases as compared with the corresponding week last
year. Among the most important carriers continuing to
show increases over a year ago were the Pennsylvania
System, the Baltimore & Ohio RR., the Chesapeake & Ohio
Ry., the New York Central RR., the Norfolk & Western
Ry., the Louisville & Nashville RR., the Chicago & North
Western Ry., the Chicago Milwaukee St. Paul & Pacifio
Ry., the Southern Pacific Co. (Pacific Lines) and the Great.
Northern Ry.

-WEEK ENDED SEPT. 9.
OF CARS)
REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS (NUMBER
Total Loads Received
from Connections.

Total Reenue
Freight Loaded.

Railroads.

1933.

1932.

1933.

185
4,288
8,446
2,549
1,577
10,000
934

168
3,449
7,801
1,551
1.452
8,632
954

27,979

23,807

1.053
2,463
6,768
856
2,690
9.095
812

662
2,249
0,206
560
2,090
8,589
821

1,082
3,042
8,443
711
3,188
11,220
570

•

23.537

20,997

28,256

Total

,
8.360
9,109
11,431
175
1,528
8,010
1,867
23,464
2,128
381
361

6,270
5,064
12,398
1,690
765
8.135
33
24,643
1,901
27
277

5,017
4,188
11,089
1,436
752
4,698
38
19,784
1,498
83
200

57,296

47,289

64,794

59,203

48,743

502
1,122
6,884
11
181
20'
1,37r
2,417
54
5,
3,60(
4,07
3,709
4,399
1,156
4,448
4,110

392
1,294
7.078
18
378
138
1,096
1,758
4,303
2,620
3,906
3,319
2,931
785
4,536
2,501

589
1,934
8,857
43
320
257
1,256
2,679
8,090
3,375
4,794
4.326
4,019
903
5,402
3.493

948
1.701
10,081
70
91
1.852
637
4,600
7,355
196
7,008
3,642
4,615
790
8,218
2,579

937
1,580
9,116
49
100
1,137
467
3,832
5,863
161
6,180
3.123
2,992
421
5,509
1,992

44,048

37,031

48,117

52,581

43.359

Grand total Eastern District...

124,881

105,317

141,187

139,763

115,909

Allegheny DistrictBaltin•ore & Ohio
Bessemer & Lake Erie
Buffalo Creek & Gauley
Central RR.of New Jersey.,..,.
Cornwall
Cumberland & Pennsylvania._
Ligonier Valley
Long Island
Pennsylvania System
Reading Co
Union (Pittsburgh)
West Virginia Northern
Western Maryland
c Penn-Read Seashore Lines

27,407
3,895
288
5,334
3
259
80
1,094
55,653
11,081
8,013
74
2,699
1,345

20,926
1,111
141
4,484
(
183
6`
827
45,484
10,026
3,199
46
2,287
1,135

30,928
3,640
135
8,803
478
278
132
• 1,481
67,454
13,775
7,215
51
2.914
e

13,651
1,757
6
8,711
52
6
24
2,204
32,360
12,679
3.427

9,475
900

7,903
32
41
13
2,175
27,549
10,804
844

4,148
1,404

2,725
1,043

117,225

89,924

135,284

80,434

63,509

20,257
17,880
661
2,736

18,520
14,947
823
2,887

22,717
18,433
985
3,729

7,332
3,987
1,170
458

7,003
3,015
859
453

41,534

36,977

45,844

12,947

11,330

5,669
1,175
329
149
48
1,360
424
319
5,527
18,042
120

8,080
820
377
117
51
1,241
431
260
5,481
16,817
158

8,110
1,174
444
183
55
1,877
434
357
7,385
20.589
187

3.5.58
1,165
670
254
80
1,011
723
1,884
2,662
10,022
730

3,527
922
623
243
67
947
858
1,751
2,582
9,073
595

Total
Group C:
Ann Arbor
Chicago Ind. &
Cleve. Cin. Chic & St. Louis Central Indiana
Detroit & Mackinac
Detroit & Toledo Shore Line._
.
Detroit Toledo & Ironton.
Grand Trunk Western
Michigan Central
Monongahela
New York Chicago & St. Louis
.
Pere Marvette
Pfttsbumh & Lake File
Pittsburgh & West Virginia .
IA abash
Wheeling az Lake Erie
Total

Total
Pocahontas District
Chesapeake & Ohio
Norfolk & Western
Norfolk & Portsmouth Belt Lin
Virginian
Total
Southern District
Group A:
Atlanta Coast Line
ClinchfleId
Charleston de Western Carolina.
Durham & Southern
Gainesville & Midland
Norfolk Southern
Piedmont & Northern
Richmond Frederick. & Potom.
Seaboard Air Line
Southern System
Winston-Salem Southbound.,..

5

211
631
600
3,230
312
295
739
318
1,130
18,639
14,823
141
209
1,728
2,257

306
695
851
3,814
233
375
953
488
1,484
20,774
18,790
155
177
1,867
2,714

1933.

136
395
835
1,847
224
181
1,238
297
680
7,821
3,359
246
232
1,204
1,832

1932.

99
355
872
1.798
176
338
1,071
251
628
7,268
2,704
277
274
987
1,645

-iii

-526

"iai

-iii

44,808

45,534

54,002

20,856

19,108

Grand total Southern District_ .

75,970

77,385

94,777

43,415

40,074

Northwestern District
Belt Ry. of Chicago
Chicago & North Western. .
Chicago Great Western
Chic. Milw. St. Paul & Pacific •
Chic. Ft. Paul Minn.& Omaha .
Duluth Missabie & Northern._ .
Duluth South Shore & Atlantic
•
Elgin Joliet & Eastern
Ft. Dodge Des M.& Southern
•
Great Northern
Green Bay & Western
Minneapolis & St. Louis
Minn. St. Paul &S.S. Marie_
Northern Pacific
Spokane Portland & Seattle.-

583
16,028
2,053
15,297
2,969
11,905
381
3,852
246
14,042
45:
1,541
5,161
8,681
827

952
12,810
2,220
14,763
3,448
2,390
398
2,750
272
9,313
427
1,687
4,556
8,179
1,122

1,357
19,064
2,737
19.847
3,747
9,746
659
3,740
322
14,272
506
2.079
5,528
9,655
900

1,542
7,693
2,251
8,054
2,811
48
295
4,080
86
2,079
295
1,312
1,908
2,223
1,136

84,018

85,285

94,159

33,813

30,809

17,680
2,870
178
14,247
10,044
2,184
830
2,954
*537
976
664
199
18,142
200
284
11,127
375
1,471

18,276
2,853
111
14,461
11.324
2.351
871
2,870
483
821
542
185
13,942
203
325
11,079
461
1,228

23,604
3,188
195
17,745
12,727
2.795
1,102
3,208
572
1,108
746
114
17,377
301
266
14,181
617
1,451

3,960
1,639
30
6,109
5,095
1,862
1,046
1,913
21
881
244
3(
3,041
361
835
6,651
10
2,260

3,776
1,571
17
4,890
5,186
1,625
782
1.813
10
727
233
16
2,500
411
787
6,427
8
1,882

82,733

62,168

101,293

35,908

32.661

203
234
169
02,185

3,297
270
107
858

2,459
192
124
843
,
1- 207
535
1,182
616
233
186
231
2,010
6.169
28
104
2,683
848

Total

Total
Central Western District
Ateh. Top.& Banta Fe System. •
Alton
Bingham & Garfield
Chicago Burlington & QuIncY-Chicago Rock Island & Pacific
Chicago & Eastern Illinois
Colorado & Southern
Denver & Rio Grande Western
Denver & Salt Lake
Fort Worth & Denver City
Northwestern Pacific
Peoria &Pekin Union
Southern Pacific (Pacific)
St Joseph & Grand Island
Toledo Peoria & Western
Union Pacific System
Utah
Western Pacific
Total
Southwestern District
Alton & Southern
Island
Burlington-Rock
Fort Sts ith & Western
Gulf Coast Lines
b Houston & Brazos Valley.
International-Great Northern..
Kansas Oklahoma dr Gulf
Kansas City Southern
Louisiana & Arkansas
Litchfield & Madison
Midland Valley
Missouri & Northern Arkansas_
Missouri-Kansas-Texas Lines..
Missouri Pacific
Natchez & Southern
Quanah Acme & Pacific
St. Louis-San Francisco
St. Louis Southwestern
Is San Antonio Uvalde & Gulf._
Southern Pacific In Texas & La_
Texas & Pacific
Tenr inal RR.Assn.of St. Louis
Weatherford AlIn.Wells & N.W.

166
145
132
1,224

126
220
182
1,244

1,971

2:180

1,229

191
1,384
1,318
319
812
*123
4,685
12,669
29
59
6,814
1,985

124
1,379
1,351
122
811
77
4,042
12,918
38
94
7,937
2,345

284
1,923
1,826
106
935
80
5,241
15,701
39
101
8,417
2,354

778
1,226
667
540
247
249
2,334
6,456
11
107
2,803
1,195

5",4i0

4.708

iiiii

2:236

iiii

3,449
1,874
29

3,431
1,568
15

3,897
2,003
36

2,491
1.865
20

r,..4C4*!

4,492
6.183
9,083
135
1,041
6,058
1.518
18,126
2.043
395
215

1931,

N

5,362
8,771
10,992
125
1,157
7,552
1,736
19,369
1,447
454
341

Group B:
207
.
Alabama Tenn. & Northern_ _
574
Atlanta Birmingham & Coast_ _
527
-West.RR.of Ala
& W P.
3,130
Central of Georgia
175
Colun bus & Greenville
288
Florida East Coast
710
Georgia
350
Georgia & Florida
1,296
Gulf Mobile & Northern
. 15.920
Illinois Central System
18,855
lout yule & Nashville
157
Macon Dublin & Savannah_.
196
Mississippi Central
1,789
Mobile & Chic,
2,372
.
Nashville Chatt.& it. Louis..
-d New Orleans Great Northern.
282
Tennessee Central

1932.

4 .NCOMMOVCVN01.0,
00.,-

Group B:
Delaware & Hudson
Delaware Lackawanna & WestErie
Lehigh & Hudson River
Lehigh & New England
Lehigh Valey
Montour
New York Central
New York Ont.sio az Western_ Pittsburgh & Shavnnut
Pitts. Ehawmut & Northern -

Total Load Received
from Connections.

Total Rerenue
Freight Loaded.
1933.

1932.

1931.

Eastern District
Group A:
Bangor & Aroostook
Boston & Albany
Boston az Maine
Central Ver.' ont
Maine Central
New York N.H.& Hartford._ Rutland

Railroads.

,203
2
2,092
1,823
31

25.779
251.965
5.5.226
44.501
45.020
20.9aa
Total
22.559
40.775
31.831
31.162
lines of the West Jersey & Seashore RR., forIncluded
In Gar Coast Lines. c pennsylvarda-Reading Seashore Lines include the new consolidated
Read ng Co. d
a Estimated. b Included
formerly part of Reading co. 1931 and 1932figures included in Pennsylvania System and
merly part of Pennsylvania RR.and Atlantic City RR.,
Co.figures. *Figures of previous week.
in Gulf Mobile & Northern RR. e Included in Pennsylvania RR.and Reading
Total




Volume 137

Financial Chronicle

Guaranty Trust Co. of New York Views Events of
Past Few Weeks as Supporting Belief That Definite
Progress Toward Business Recovery Has Been Made
—Normal Autumn Influences Expected to Bring
Further Improvement—Federal Securities Act Presents Obstacles.
The decrease in business activity that began about the
middle of July has continued this month, though at a
slower rate, states the Guaranty Trust Co. of New York in
the current issue of "The Guaranty Survey," its review of
business and financial conditions in the United States and
abroad, published Sept. 25. "It has been most apparent
in the basic industries; but trade in many of its branches
continues to expand," says"The Survey," which continues:
Commodity prices have been distinctly firmer than last month, with
many irregularities but apparently with a slight upward tendency. As the
NRA movement passes from the phase of organization into that of operation,
visible developments in its progress become less striking. Viewed as a
whole, the events ot the last few weeks seem to support the belief that
definite progress toward recovery has been made and that the normal
stimulating influences of the autumn season may reasonably be expected
to bring further improvement.
Encouraging Features.
While the recession in business levels is disappointing to those who hoped
for a quick transformation in the economic situation under the influence
of governmental intervention, informed opinion inclines to the view that
it may very well prove to have been a wholesome development from the
long-term standpoint. As the upward movement approached its midsummer peak, evidence was rapidly accumulating that the expansion, in
many directions at least, was unsound and untenable. Where the bulk
of the output was intended to build up inventories in anticipation of
Inflationary price advances, as was clearly the case in many instances.
the revival in activity could not have been expected to continue steadily
for more than a brief period. And, as long as a serious possibility of
Inflationary action continues to hang over the country, a similar suspicion
will inevitably attach itself to every upward movement in trade and industry, however welcome the greater activity and the increased employment
may be for the moment.
An encouraging feature of the present situation is that the increased purchasing power brought into being by the larger payrolls and the more
optimistic sentiment of the last few months has begun to assert itself in
retail markets. This is a development that not only spells real and immediate relie to millions ot individuals but represents a broad economic
influence of the most constructive sort.
Sources of Uncertainly.
As far as the NRA movement is concerned, the events of the last few
weeks have emphasized both its strong and weak points. On the whole,
the country has shown a commendable willingness to co-operate in the
common Mort, even to the extent of temporarily submerging individual
interests and advantages, At the same time controversies have arisen
to illustrate the welter of conflicting interests that begin to press for recognition as soon as the Government or any other central agency assumes
even partial responsibility for the course of economic affairs.
Neither the recent reaction in business nor the practical difficulties of
the NRA program necessarily indicates that progress toward recovery is
not being made. On the contrary, setbacks and controversies were recognized from the beginning as inevitable; and the contrast between present
conditions and those that existed six months ago leaves little room for
doubt that a genuine upward thrust has occurred. If impatience can
be curbed and dangerous political influences held in check, the outlook
may be regarded as definitely favorable.
Stimulating Capital Expansion.
Increasing attention has recently been given to the problems of stimulating
the output of. and the demand for, producers' goods. This question has
been brought forward partly as a result of the NRA program, which is
designed primarily to increase consumers' demand. It has been pointed
out that consumers' demand alone can hardly form the basis of a true
Industrial recovery—at least, not within the near future—inasmuch as a
large part of the e dating industrial equipment is suitable only for the production of further industrial equipment. In other words, the modern
industrial mechanism is so designed that it can operate at a high level only
In a situation permitting a rapid growth in the total supply of capital
goods. The steel and construction industries are outstanding examples
of the many important branches of business that depend for their markets,
to a large extent, on industrial expansion, rather than current consumption.
Consequently, even if purchasing power could be so distributed as to
enable consumers to take a greatly increased amount of consumption
goods off the market, a large proportion of the aggregate plant capacity
could not participate in the production of such commodities.
This view is in accord with some of the most widely held theories of
business cycles. It is well known that the production and consumption
of consumers' goods vary comparatively little. The wide differences
between rates of output during prosperity and depression are due, for the
most part, to variations in the production of buildings, machinery, tools,
and other productive equipment. All this productive equipment, of
course, can be used only to produce goods directly or indirectly for the
ultimate consumer. According to several authoritative and widely accepted
theories, it is the tendency of productive equipment in times of prosperity
to expand too fast—that is, beyond the capacity of consumers to absorb
the output—which constitutes the principal factor operating to terminate
prosperity and bring on depression. It has been estimated that the industries producing capital goods represent, roughly, half of the country's
productive capacity and that in 1929 the total production of such goods
amounted to about $40,000,000,000, as against 830,000,000,000 in consumption goods.
Securities Act Presents Obstacles.
It is evident, therefore, that wide-spread industrial recovery, if It is to
take place within the reasonably near future, must include a revival of the
industries producing capital goods. But how to promote such a revival
is a difficult question. One line of thought on this subject emphasizes the
difficulties placed in the way of long-term borrowing by the new Securities
Act, which lays heavy responsibilities on investment bankers and on
the managements of corporations seeking to borrow. In the opinion of
some authorities, these provisions are so harsh that they will practically
prohibit the flotation of new securities by reputable concerns until the
law is amended. Inasmuch as the great bulk of industrial expansion
under modern conditions cannot take place without public borrowing,
it is obvious that any factor hindering such borrowing must necessarily




2357

prevent, at the same time, the industrial expansion that is essential to
business recovery.
It is true that the flotation of new securities in the last few months has
been practically at a standstill. However, the same situation existed for
some time prior to the passage of the Securities Act; and it is probable that
the inactivity of the capital market was also due in part to fundamental
factors. Business concerns will not borrow unless they have a reasonable
prospect of making money with the borrowed funds, and investors will
not lend unless thay are satisfied that the borrowers will be able to make
payments on account of the interest and the principal of the loans. Both
of these conditions depend on the present and prospective demand for the
products of industry. In addition, the investor is concerned with the
legal protection that will be given to his securities and with the purchasing
power of the money in which the loan will ultimately be repaid.
These possible alternative explanations of the present situation in the
Capital markets do not greatly alter the merits of the case against the
Securities Act. Markets for long-term capital issues may be inactive at
present from natural causes, but they cannot remain so indefinitely. To
the extent that business recovery proceeds and the monetary outlook is
clarified, the demand for investment securities, on the one hand, and for
new capital,on the other,should revive. If the flow of capital into industry
is paralyzed by an arbitrary and unreasonable piece of legislation, the
effect will be to hamper,if not actually prevent,sound business expansion.
Trade Well Maintained.
Recent developments in the business situation tend to emphasize the
extent to which the more pronounced recessions have been confined to the
basic industries. Both wholesale and retail trade appear to have been
comparatively well maintained, although recent gains are admittedly due
in large measure to seasonal influences.
Among the directions in which decreased activity has been noted are
steel production, automobile output, cotton textiles, lumber, and bank
debits to individual accounts. Railway freight traffic has increased irregularly, but hardly by the usual seasonal amount.
Department store sales, on the other hand, according to a preliminary
index, increased from July to August by considerably more than the estimated amount. The index for last month stands at 75, as against 71 a
month earlier and 68 in June.
Sales of cotton textiles. after an abrupt decline following the application
of the code and the processing tax, have advanced sharply in the last
few weeks. Commission houses report large volumes both in cotton
and woolen goods and anticipate a continuance of active business for
some time.
An encouraging feature of the situation in recent weeks has been the
growing number of corporate dividends resumed or increased. While the
movement has not yet become by any means general, it has been substantial enough to attract comment. The tendency is significant as an
Indication that some companies have experienced an improvement in their
business sufficiently marked and sustained to be reflected in earnings
and to inspire some con idence regarding future trends.
Another favoeable development is the consistent decline that has occurred
in business failures. Improvement in this direction has been visible for
several months, with the result that the total number of failures for the
year to date makes a conspicuously favorable comparison with that of
last year, when conditions were particularly difficult.
41110 •
-

Moody's Daily Index of Staple Commodity Prices
Continues Irregular Decline.
With the exception of last Saturday, the decline in basic
commodity prices, which began ten days ago, continued
during the past week. Moody's Daily Index of Staple
Commodity Prices closed the week at a net decline of 1.4
points and is now 131.5, or practically where it was two weeks
ago.
The action of individual commodities was again mixed,
six of the fifteen showing a net decline, four a net gain, and
five no change. The most important declines were in hogs
and hides, with sugar, silk, coffee and cocoa showing smaller
losses. Rubber was the only commodity registering a
sizable gain, while wheat, cotton and silver closed slightly
higher for the week, and corn, wool, steel scrap, copper and
lead closed at the same levels as last week.
The movement of the Index number during the week, with
comparisons, is as follows:
Fri.
Sept. 22
Sat.
Sept.23
Mon. Sept. 25
Tues. Sept. 26
Wed. Sept. 27
Thurs. Sept. 28
Fri.
Sept. 29

132.9
134.5
133.8
133.2
132.7
131.4
131.5

2 Weeks Ago, Sept. 15
Month Ago, Aug. 29
Year Ago,
Sept.29
1932 High, Sept. 6
Low, Dec. 31
1933 High, July 18
Low, Feb. 4

131.8
131.0
96.5
103.9
79.3
148.9
78.7

Monthly Indexes of Federal Reserve Board—Decrease
Reported in Industrial Production During August
as Compared with July—Employment Higher.
Under date of Sept. 25, the Federal Reserve Board issued
as follows its monthly indexes of industrial production,
factory employment, &c.:
BUSINESS INDEXES.
(Index numbers of the Federal Reserve Board; 1923-25=100.).
Adjusted for
Seasonal Variation.
1933.
Aug.
Industrial production. total
Manufactures
Mineral,
Construction contracts, value a—Total
Residential
All other
Factory employment
Factory payrolls
Freight-car loadings
Detusrt.s'ent store 9.1iPS

July.

p92
p92
p92
x

100
101
90
21
13
x
28
73.3 70.1

61
r7S

65
71

1932.
Aug.

Without
Seasonal Adjustment.
1933.
Aug.

60
p91
59
990
65
p95
30
x
a
12
45
x
58.8 73.4
55.7
51
65
as
s57

July.
96
97
89
24
13
32
68.9
49.9
66
4
9

1932.
Aug.
69
58
66
32
11
48
58.6
40.1
53
49

Financial Chronicle

2358

INDUSTRIAL PRODUCTION-INDEXES BY GROUPS AND INDUSTRIES.*
(Adjusted for seasonal variation.)
Mining.

Manufactures.
Group and
Industry.

1933.

1932.

Aug. July. Aug.

Aug. July. Aug.
Iron and steel
80 100
Textiles
p114 130
Food products
p92 100
Paper and printing_ _ _
_ _ p104
Lumber cut
46
46
Automobiles
61
70
Leather and shoes.. p104 116
.
Cement
56
50
Petroleum refining_ _ _
__
155
143
Rubber tires
Tobaccorranufactures 123 117

1932.

1933.

Industry

p75
23 Bituminous coal
961
90 Anthracite coal
p137
85 Petroleum
57
84 Iron ore
23 Zinc
77
23 Silver_
84 Lead
56
48
135
68
108

76
67
132
40
71
34
36

50
48
104
8
31
41
33

-INDEXES BY GROUPS
FACTORY EMPLOYMENT AND PAYROLLS
AND INDUSTRIES.
(Underlying figures are for payroll period ending nearest middle of month.)
Payrolls.

Employment.
Group and Industry.

Adjusted for Sea- Without Seasonal Without Seasonal
sonal Vasiations.
Adjustment.
Adjustment.
1932.

1933.

1933.

1932.

1933.

1932.

Aug. July. Aug. Aug. July. Aug. Aug. July. Aug.
Iron and steel
Machinery
Textiles, group
Fabrics
Wearing apparel
Food
Paper and printing
Lumber
Transportation equipment
Automobiles
Leather
Cement, clay and glass
Nonferrous metals
Chemicals, group
Petroleum
Rubber products
Tobacco

73.2
57.1
91.2
99.8
69.6
89.7
88.1
46.6
51.4
59.7
86.4
53.9
66.1
92.4
78.3
81.9
67.7

66.3
51.7
90.3
97.6
71.9
83.6
83.4
43.8
49.3
58.8
85.7
51.6
60.3
87.5
76.4
76.4
67.3

50.6
46.4
64.8
66.1
61 5
81.0
80.9
36.7
44.8
49.8
74.0
40.5
46.4
74.0
74.4
62.7
68.3

72.7
57.1
87.8
96.4
66.9
89.3
86.9
47.6
51.7
60.9
88.7
55.8
65.4
89.9
79.7
83.3
67.6

65.3
51.8
85.7
94.1
64.7
83.1
82.5
44.0
49.2
58.4
85.4
51.8
59.5
84.0
78.1
77.0
65.6

50.4
46.4
62.3
63.8
58.4
80.7
79.3
36.4
45.1
50.8
76.1
42.1
45.8
72.2
75.8
63.6
68.3

52.7
38.9
67.0
77.0
46.9
71.7
70.8
28.9
43.9
52.5
69.3
34.6
50.4
72.2
66.7
64.4
48.2

42.4
35.7
58.9
67.2
41.9
68.2
67.8
24.6
38.3
46.1
64.2
30.2
46.5
67.9
66.1
65.2
47.3

22.1
27.1
42.3
42.1
42.6
67.9
67.4
19.3
31.6
32.7
51.7
23.9
28.9
60.0
68.2
41.5
49.4

* Indexes cf production, car loadings and department store sa es based on daily
averages. p Prelin Mary. a Based on 3-mon h moving averages, centered at 2d
month. x Complete data not yet available.

Wholesale Trade in Second Federal Reserve District
According to Federal Reserve Bank of New York
Sales of Reporting Firms During August 52%
Larger Than in August 1932.
The Federal Reserve Bank of New York, in its Oct. 1
"Monthly Review" states that "total sales of the reporting
wholesale firms in the Second (New York) District during
August averaged about 52% higher than last year, continuing
the unusually favorable year to year comparison shown for
July." The Bank adds:
Hardware and paper firms reported even larger increases in sales than
in the previous month and there was some further improvement also in
stationery sales. Most of the other lines reported smaller percentage
increases over a year ago than the record increases of July, but the gains
over a year ago continued to be large, especially i the case of me 's clothing
sales, orders for machine tools, and sales of diamonds and jewelry.
-11
Stocks of merchandise held by grocery and hardware firms showed larger
increases over a year ago at the end of August than at the end of July,
and the year to year reduction in drug and diamond stocks was som what
smaller than in July. Jewelry stocks continued tl be much smaller than
last year. In most lines, the rate of collections of accounts outstanding
continued higher than a year ago.
Percentage
Change
.4 ug 1933
.
Compared with
July 1933
•

Percentage
Change
Aug. 1933
Compared trUh
Aug. 1932

P. C. of ACCOutta
Outstanding
July 31
Collected in
Aug.

Commodity.
Net
Sales

Groceries
Men's clothing
Cotton goods
Mk goods
Shoes
Drugs

-0.8
+140.9
-20.9
•
+3.5
-3.0

Hardware
Machine tools x
Stationery
Paper
Diamonds

-1.5
+6.4
+15.2
+17.9
+5.7

Jewelry

+48.2

Welehtai nvarsura

.4.52,1

Stock
End
of
Month.

Net
Sales.

+9.5 +29.7
____ +115.1
+13.9 +25.4
•
.1 7
1 7:9

•
•
+36.7
-4.4

+2.5

+27.4
+102.8
____ +10.6
____
+28.5

+4.4
-6.7

+87.6
+59.9
4-A2 2

Stock
End
of
Month.

1932.

1933.

+46.5

76.2
29.9
28.8
79.2

21:6

23:9
-

+14.4

41.2

____

55.4

46.1

____
-32.9
-48.8

35.5
115.4

1 3.4
2

5014

MO

Percentage Change August 1933
Compared with Augus 1932.
Type of Store.
Number of
Stores.

• Figures reported by Silk Assoc% ion of America not yet available.
x Reported by the National Machine Tool Builders Association.

41.2
47.5

Total
Sales.

Sales per
Store.

-2.2
+0.1
-21.4
-23.7
+1.3
+14.0

-11.7
+11.1
-18.2
-4.9
+20.3
-3.4

-9.7
+11.0
+4.0
+24.6
+24.7
-15.2

-2.3

+5.9

+8.3

Grocery
Ten cent
Drug
Shoe
Variety
Candy
Total

Sales of Department Stores During August 83/2% Over
August a Year Ago Reports Federal Reserve Bank
of New York-Largest Increase Reported Since
April 1930.
"August department store sales in the Second (New York)
District were about 83/2% higher than last year, the largest
increase reported since April 1930," states the New York
Federal Reserve Bank. "This favorable showing," the
Bank continues, "may be attributed to increased volume
this year, to the influence of rising retail prices, and to the
fact that the year to year comparison is with a month in
which sales were particularly poor." In its Oct. 1 "Monthly
Review" the Bank further states:
Stores in the Buffalo and Syracuse districts reported the largest year to year
increases In sales ever recorded by this Bank, and the Bridgeport and Rochester stores showed the largest increases in sales in over seven years. In
virtually all the remaining districts sales advanced by the largest percentages in two to four years. Sales of the leading apparel stores in this
district were 13% above last year, which is the largest advance over a year
previous since March 1929.
For the first half of September, sales of the leading department stores
in the Metropolitan area of New York were 7% lower than in the corresponding period a year ago. Although this comparison is with a month last year
that showed some improvement, it still appears that business during the
first half of September of this year did not hold the gain registered in August.
Department stores in practically Mil localities and also apparel stores
again reported a higher rate of collections on charge accounts than a year ago.
Total department store stocks of merchandise on hand Aug. 31, at retail
valuation, were larger than a year previous for the first time since December
1929, and apparel store stocks, also, have begun to show increases over a
year ago. A majority of the individual departments in the department
stores showed substantial Increases In the value of goods on hand; especially
large increases were shown in stocks of textiles and apparel.
Percentage Change
from a Year Ago.

Aug.
New York
Buffalo
Rochester
Syracuse
Newark
Bridgeport
Elsewhere
Northern New York State_
Southern New York State_
Hudson River Vail. District
Capital District
All department stores
Apparel stores

P. C. of Accounts
Outstanding ,4
July 31 Collected
in Aujust.

Stock on
Hand End
of Month.
Feb.
to Aug.

Net Sales.

Locality.

+7.7
+20.0
+13.8
+26.0
+9.2
+1.88
+1.10
-10.3
+12.6
+11.0
+13.2
+8.6
+12.9

1932.

1933.
38.1
39.0
38.4
24.7
33.7
32.4
26.5

--8.2
--7.8
--13.1
--1.6
--12.8
--5.4
--7.4

+18.6
-7.1
-4.5
-15.3
+11.8
+5.7
-10.4
---

34.6
33.9
38.0
20.0
32.9
31.0
27.6

-111i3

+12:5

-8.4

+5.2

33.0
35.2

_

_
35.8
37.2

August sales and stocks in the principal departments are compared with
those of a year previous in the following table:
Net Sales
Percentage Change
August 1933
Compared with
August 1932.

46.0
30.9
44.3

-11:8

The August increase in average sales per store for all reporting chains
was larger than the rise in total sales, as there has been some reduction
from a year ago in the total number of units operated. In the case of the
drug and shoe chains large reductions in the number of units operated were
accompanied by increases over a year ago in sales per store. Ten-cent store
and variety chains, which have shown no material change in the number of
units operated, also had substantial Increases in sales per store in August.

87.2

_ __
+1.4

Sept. 30 1933

Cotton goods
Men's and boy's wear
Linens and handkerchiefs
Musical instruments and radio
Shoes
Women's and Misses'ready-to-wear
Woolen goods
Men's furnishings
Home furnishings
Furniture
Hbsiery
Women's ready-to-wear accessories
Books and stationery
Luggage and other leather goods
Silverware and jewelry
Toilet articles and drugs
Silks and velvets
Toys and sporting goods_
Miscellaneous

Stock on Hand
Percentage Change
Aug. 31 1933
Compared with
Aug. 311932.

+33.1

+58.2
+28.7
+4.6
-18.3
+30.1
+30.1
+55.8
+32.4
+4.2
-10.2
+46.1
+47.1
-17.4
+0.2

+24.9
+23.9
+22.9
+19.5

+19.3
+17.0
+13.6
+12.8
+1.7
+1.4
-1.2
-2.4
-3.3
--4.3
-6.2
-12.9
--14.7
+0.2

Increase of 6% Noted in Chain Store Sales During
-26.9
-18.6
August in New York Federal Reserve District as
+18.9
Compared With August Last Year
-Most Favorable
+16.1
+3.7
Year to Year Comparison Since April 1930.
The Oct.-1 "Monthly Review" of credit and business
conditions of the Federal Reserve Bank of New York has Upward Trend of Wholesale Commodity Price of U. S.
17following to say regarding...chain [store] trade in the
Department of Labor Continued During Week
nd (New York) District:
Ended Sept. 23.
In August, total chain store sales in this District were 6% higher than a
The wholesale commodity price index of the Bureau of
year ago, the most favorable year to year comparison since April 1930. Labor Statistics of the United States Department of Labor
Sales of the 10-cent and variety chains showed the largest increases since
continued its upward trend during the week of Sept. 23 and
Augt.st 1929, and sales of chain shoe stores declined ly the smallest percentage since May 1930. The decrease in sales of the drug chains, moremoved upward to the highest point that has been reached for
over, was slightly smaller than that reported in July, but the recessions
the present year. According to a report issued Sept. 27 by
shown by the grocery and candy chains were larger than in the previous
the Bureau, the index for the week shows an increase of 20%
month.




Financial Chronicle

Volume 137

over the low point of the year which was reached during the
week of March 4 with an index of 59.6. The report added:
The Bureau's index number of the general level of wholesale prices for
the week was 71.5 showing that an increase of nearly 1%% has taken place
in the all commodities total as compared with the previous week when the
Index was reported as 70.5. This is the first time since the Bureau began
the calculating of weekly indexes in Jan. 1932 that the general level of wholesale prices has reached this height. The Bureau's index is now up to the
level of Sept. 1931.
Wholesale prices of farm products are responsible for most of the increase
during the past week. They rose by more than 6% as compared with the
week previously. Steep advances in the market prices of grains, live stock,
and cotton account for the greater part of the rise in the prices of farm
products.
Of the 10 major groups of related commodities which comprise 784
separate price series, weighted according to their relative importance and
based on average prices for the year 1926 as 100.0. 8 groups showed an increase and 2 no change as compared with the preceding week. It is the first
week in the past 10 weeks that no decrease has been reported for any of the
10 major groups.
Manufactured foods and textile products each registered a gain of more
than 1% for the week. Other groups showing slight increases were, fuel
and lighting materials, metals and metal products, building materials,
housefurnishing goods, and miscellaneous commodities. No change was
reported for hides and leather products and chemicals and drugs.
The accompanying statement shows the index numbers of groups of commodities for the weeks ending Aug. 26 and Sept. 2, 9, 16 and 23. 1933.
INDEX NUMBERS OF WHOLESALE PRICES FOR WEEKS OF AUG. 26,
AND SEPT. 2, 9. 16, AND 23, 1933.
•
(1926=100.0)
Week Ending
Aug.26
All commodities
Farm products
Foods
Hides and leather products
Textile products
Fuel and lighting materials
Metals and metal products
Building materials
Chemicals and drugs
Bouseturnl.hing goods
Miscellaneous

Sept. 2

69.6
58.2
65.0
92.8
74.2
66.7
81.2
80.7
72 5
76.9
65.2

69.7
57.1
65.3
92.9
74.2
67.2
81.4
81.0
72.2
77.0
65.2

Sept. 9 Sept. 16 Sept.23
69.7
56.6
65.0
92.8
73.9
67.6
81.7
81.4
72.3
78.6
64.9

70.5
55.9
65.1
92.0
75.5
72.5
81.7
82.0
72.1
78.7
64.8

71.5
59.3
65.9
92.0
76.4
72.8
81.8
82.3
72.1
78.8
65.1

Wage Rate Increases and Reduction in Number of
Hours of Work in United States Is Reflection of
Acceptance of NRA Blanket Code, According to
Secretary of Labor Perkins.
While National Recovery Administration codes in only
seven industries had been officially adopted and approved
by President Roosevelt prior to Aug. 15, the acceptance of
the blanket code by thousands of employers on Aug. 1 was
reflected by wage rate increases and a reduction in the
number of hours worked per week from July 15 to Aug. 15,
Secretary of Labor Frances Perkins announced Sept. 21.
These indicate, she said, how the $12,000,000 manufacturing
payroll increase for this period was distributed. Continuing,
Secretary Perkins further said:
The average hourly earnings as reported to the Bureau of Labor Statistics showed an increase from 42.7 cents per hour in the June 15
-July 15
period to 48.5 cents per hour in the July 15-Aug. 15 period while the average
hours worked per week dropped from 42.3 to 38.6 in the 89 manufacturing
industrits combined which were surveyed. As to the industries under the
code, we have the following picture.
The cotton goods industry on the basis of Bureau of Labor Statistics
figures showed an hourly rate increase from 23.2 cents per hour to 36.1
cents and a drop in hours per week from 49 to 36.5 for the period of the
survey. Wage rates in the woolen and worsted goods industry went from
35.8 cents to 43.3 cents with the hours dropping from 48.5 to 41.2. Shipbuilding wage rates roso from 56.4 cents to 61.7 cents with hours reduced
from 33.6 to 30.3. The electrical machinery group showed a wage rate
increase from 53.7 cents to 57.0 cents with hours cut from 38.1 to 35.4.
The women's clothing industry showed a wage rate raise from 34.4 to 43.3
cents and a drop in hours from 38.9 to 35.1. The corsets and allied garments
industry registered a wage rate increase from 35.3 cents to 41.3 cents and
an hour drop from 39.8 to 39.3.
Data on lace, the only other industry under the codes on Aug. 15, was
not available when the Bureau of Labor Statistics made its report.
In other industries only under the blanket code at the time, such as
dyeing and finishing textile, there was a decrease from 49.5 hours to 36.3
hours with an increase from 37.1 cents per hour to 49.7 cents. The silk
goods industry reported a change from 42.1 average hours to 36.7, with an
increase from 31.5 cents per hour to 41.5 cents.
The decreases in hours worked per week and the increase in hourly
earnings over the same period were correspondingly great in numerous
other industries.
Of the eight manufacturing industries which failed to report a shorter
work week, flour had been working much less than 40 hours per week, and
the increased hours worked in the industry still remained below this figure.
In the seven industries which failed to show increases in average hourly
warings the beet sugar industry showed the most pronounced drop, which
can be accounted for by the large number of lower paid workers taken on
at this time of year for seasonal expansion.
In the group of non-manufacturing industries for which man-hour data
are available, the dyeing and cleaning industry reported an hour drop from
47 to 40.5. The bituminous coal raining industry, due to increased production, reported an increase from 31.5 hours per week to 35 hours. The
anthracite mining industry also reported an increase in average hours
worked from 31.5 to 34.1.
While these increases in hourly or daily rates cannot be interpreted in all
instances as representing an actual increase in the employees weekly
wages, the number of hours worked per week in many industries has been
drastically cut to conform with the industry or blanket codes and the
increase in rates offsets the difference in hours worked.
Taking the average picture, which we are studying, the average worker
during this month received approximately the same weekly wages, had
more time for leisure and personal advancement and additional workers
obtained employment by the device of shortening of the work week.




2359

Increases in weekly or hourly wage rates averaging 24.3% and affecting
1,145,576 employees were reported by 3.776 of the 18,008 manufacturing
establishments reporting to the Bureau of Labor Statistics.
Practically 75% of the workers affected were in the following 10 manufacturing industries: Cotton goods, iron and steel, automobiles, knit
goods, dyeing and finishing textiles, boots and shoes, electrical machinery.
foundries and machine shops, paper and pulp, and slaughtering and meat
packing. The cotton goods industry reported the greatest number of
workers affected, 428 establishments in this industry reporting increases
in wage rates averaging 44.7%, and affecting 242.474 workers. Or 96%
of the total number of employees in these plants. One hundred and ten
plants in the iron and steel industry reported increases in rates averaging
15.2% and affecting 136,546 workers.
Wage-rate increases averaging 12.2% and affecting 128.333 workers were
reported in 73 establishments in the automobile industry. The knit goods
industry reported wage-rate increases averaging 35.5% and affecting 56.977
employees, and the dyeing and finishing textile industry reported 36.869
employees affected by wage-rate increases averaging 29.4%.
The boot and shoe industry reported 34,703 employees affected by wage
rate changes averaging 13.8%; the electrical machinery industry. 34.261
workers affected by wate-rate increases averaging 10.6%; foundry and
machine shops, 33,991 workers affected by wage-rate increases of 14.1%;
paper and pulp establishments, 26,523 workers affected by wage increases
averaging 16.7%; and the slaughtering and meat packing industry reported
wage-rate increases averaging 19.5%, affecting 24.751 employees.
Wage-rate increases affecting 129,591 workers in 14 of the non-manufacturing industries surveyed were also reported in August. In this non.
manufacturing group, the bituminous coal mining industry reported the
greatest number of employees affected, 76,731 workers, whose average
Increases in wage rates was 19.9%. Reporting establishments in the retail
trade group showed increases In rates averaging 17%. The canning and
preserving industry also reported large numbers of workers affected_by
wage-rate increases averaging 25.7%.

The Bureau of Labor Statistics' report was given in our
issue of Sept. 23, page 2172.
National Fertilizer Association Reports Further Advance in Wholesale Commodity Prices During
Week Ended Sept. 23.
Wholesale commodity prices again moved up decisively
during the latest week,according to the index of the National
Fertilizer Association. When computed for the week ended
Sept. 23 this index showed a gain of six points, advancing
from 68.8 to 69.4. (The three-year average 1926-1928
equals 100.) During the preceding week the index gained
15 points while two weeks ago it advanced only one point.
The latest index number is 26 points higher than it was a
month ago and 72 points higher than it was a year ago.
The Association further reported as follows under date of
Sept. 25:
During the latest week seven groups advanced, one declined, and six
showed no change. The advancing groups were foods, fuel, grains, feeds
and livestock, textiles, metals, fats and oils, and fertilizer materials. The
largest gains were shown in the food, and grains,feeds and livestock groups.
Miscellaneous commodities declined slightly.
/01
Thirty-two commodities showed higher prices, while 19 commodities
showed lower prices during the latest week. During the preceding week
there were 47 price advances and 21 price declines. Important commodities that advanced during the latest week were cotton, wool, burlap.
silk, lard, tallow, eggs, potatoes, heavy hogs, good cattle, cottonseed meal,
copper, silver, gasoline, and rubber. Listed among the declining commodities were pork, corn, oats. wheat at Kansas City and Minneapolis,
barley, choice cattle, heavy melting steel, and calfskins.
The index numbers and comparative weights for each of the 14 groups
listed in the index are shown In the table below:
WEEKLY WHOLESALE PRICE INDEX-BASED ON 476 COMMODITY
PRICES (1926-1928= 100).
Per Cent
Each Grasp
Bears to the
Total Inds:.
23.2
16.0
12.8
10.1
8.5
6.7
6.6
6.2
4.0
3.8
1.0
.4
.4
.3
100.0

Group.
Foods
Fuel
Grains, feeds and livestock
Textiles
Miscellaneous commodities
Automobiles
Building materials
Metals
Bowie furnishing goods
Fats and oils
Chemicals and drugs
Fertilizer materials
Mixed fertilizer
Agricultural implements
All groups combined

Latest
IVeek
Sept. 23
1933.

Pre
ceding
Week.

Month
Ago.

Year
Ago.

71.1
68.2
54.8
66.4
69.7
84.4
74.5
78.8
81.6
48.8
87.0
638
70.2
90.3

69.8
67.9
53.4
65.8
69.8
84.4
74.5
78.4
81.8
48.7
87.0
63.3
70.2
90.3

68.9
58.5
53.1
65.2
69.8
84.4
74.7
78.5
78.7
48.7
87.0
65.1
66.7
90.1

63.8
63.3
43.4
48.9
62.1
89.0
71.4
70.1
77.4
43.3
87.4
61.6
69.0
92.1

69.4

68.8

668

62.2

Both Employment and Payrolls in Manufacturing Industries Increased During August While Hours of
Work Declined According to Monthly Survey of
National Industrial Conference Board.
An increase of 8.6% in the number of persons employed
and an advance of 9.2% in average hourly earnings, accompanied by a decline of 8.9% in average hours of work per
week during the month of August were the outstanding
developments in manufacturing industry, according to the
regular montly survey made by the National Industrial Conference Board. The survey, issued under date of Sept. 28,
further noted:
Average hourly earnings of wage-earners in 25 manufacturing industries
reporting to the Conference Board rose from 45.5 cents in July to 49.7
cents in August, or 9.2%, while average hours of work per week fell from
42.6 to 38.8 or 8.9%. The net result of these two developments was a
slight rise of 10 cents, or 0.5%, in average weekly earnings, which were
$19.15 in July and $19.25 in August. Since, however, the cost of living

rose relatively more between these two months than did average weekly
earnings, real weekly earnings declined 1.8%.
The number of persons employed increased 8.6% in August over July
and, since the contents of the average weekly pay envelope increased
slightly in August, total payroll disbursements in the 25 manufacturing
industries rose over 9%. Total man-hours worked were 1.2% less In
August than in July. In the aggregate the changes noted reflect the
Government's industrial policies rather than increased business activity.
Female labor benefited relatively most from the adoption of minimum
rates of pay. The average hourly earnings of women rose from 30.3 cents
In July to 36.2 cents in August. or 19.5%. Their average hours of work
per week were reduced from 42.8 to 38.1. or 11.0%. Average weekly
earnings of female labor rose from $12.93 to $13.83. or 7.0%•
Average hourly earnings of unskilled male labor advanced from 37.5
cents in July to 40.9 cents in August, or 9.1%. A reduction of 10.0% In
the average hours of work,from 44.2 to 39.8. however, lowered the average
weekly earnings In this class from $16.48 In July to $16.17 in August, or
1.9%.
Average hourly earnings of semi-skilled and skilled male workers increased from 51.7 cents in July to 56.0 cents in August, or 8.3%: average
hours of work declined from 43.4 to 39.7, or 8.5%. while average weekly
earnings increased from $21.99 to $22.16. or 0.8%. during the same period.

Gas Sales Show First Revival in August.
Sales of manufactured and natural gas aggregated 77,396,700,000 cubic feet in August, an increase of 4.4% over the
corresponding month of the preceding year, it was announced
by the American Gas Association on Sept. 25. This was
the first increase registered by the industry as a whole in
nearly 33 years or since April 1930. The Association
further reported:
In spite of augmented sales however, revenues continued to lag. Income
for August amounting to $45,167,400 as compared with $46,187,800 in
August a year ago, a decline of 2.2%.
Most of the sales expansion of the industry was the result of pronounced
increases in gas sales to industrial users, particularly in the case of the
natural gas companies.
During August, sales of natural gas totaled 51,839,500.000 cubic feet. an
Increase of nearly 7%, while revenues for the month were $16,872,200, a
gain ot 2.3% over the preceding year.
Because of the relatively smaller proportion of industrial business, the
manufactured gas companies did not participate to the same extent in the
general sales increase, manufactured gas sales tor the month amounting to
25.557.200.000 cubic leet. or substantially the same as tor the preceding
year. while revenues were oft nearly 5%.
For the eight months ending August revenues of the entire industry aggregated $457.951.100 or 7% below the preceding year,while gas sales amounted
to 788.591.300.000 cubic feet, a drop ot 2.3%•

Percentage Increase in Electric Output, as Compared
With the Same Week Last Year, Declines.
According to the Edison Electric Institute, the production
of electricity by the electric light and power industry of the
United States for the week ended Sept. 23 1933 was 1,638,757,000 kwh., an increase of 9.9% over the corresponding
period last year when output totaled 1,490,863,000 kwh. A
gain of 12.7% was registered during the preceding week.
The current figure also compares with 1,663,212,C00 kwh.
produced during the week ended Sept. 16 1933, 1,582,742,000
kwh. in the week ended Sept.9 1933 and 1,637,317,000 kwh.
in the week ended Sept. 2 1933.
In most sections of the country comparisons with last
year were less favorable than in the previous week. A gain
of 28% was reported in the Rocky Mountain region as compared with 27.6% in the preceding week, an increase of
11.7% was shown in the Southern States region as against
10.7%, the New England region was up 8.6% as compared
with 9.5%, the Middle Atlantic region was 4.7% higher as
against 9.3%, the Central Industrial region was 13.5% as
compared with 17.9%, the West Central region 3.5% as
against 6.0%, and the Pacific Coast region was up 1.3%
as compared with 1.2% in the week ended Sept. 16 1933.
The Institute's statement follows:
PER CENT. CHANGES.
Major Geographic
Divisions.

"Annalist" Weekly Wholesale Price Index Declined
-Monthly Average Up.
During Week Ended Sept. 26
A decline of 0.8 points in the "Annalist" Weekly Index of
Wholesale Commodity Prices to 105.8 on Tuesday, Sept. 26,
from 106.6 Sept. 19 was due to the collapse of the new inflation movement last week, upon the refusal of the President
to favor the irresponsible measures proposed, and upon the
drawing of much of the inflationists'fire by the 10-cent cotton
loan program. The "Annalist" continued:
Cotton and the grains dropped, but still remained above the levels of a
fortnight ago. The fall of the index would have been considerably greater
except for further advances in hog and gasoline prices. On a gold basis
the index rose to 69.3 from 68.8, in consequence of the partial recovery of
the dollar from its recent drop, the dollar on the basis of quotations on
France, Switzerland. Holland and Belgium rising 1 cent to 65.5.
The monthly average for September, reflecting chiefly the rise of the weekly
figure last week, and its relative maintenance this week, rose to 104.8 from
102.7 in August, and 103.4 in July; on a gold basis it declined further to
70.7 from 74.6 and 74.0.
THE ANNALIST WEEKLY INDEX OF WHOLESALE COMMODITY PRICES
Unadjusted for seasonal variation (1913=100).
Sept. 26 1933. Sept. 19 1933. Sept. 27 1932.

A11 nnynnlea9Ine nn on01 hind a h

90.2
105.6
'120.7
145.8
105.2
109.3
97.0
85.2
105.8

91.8
106.7
a121.3
144.8
104.8
108.6
97.0
86.6
106.6

sea

77.2
98.6
79.0
130.7
97.1
106.2
95.2
83.1
93.9

ass

* Preliminary. a Revised. b Based on exchange quotations for France. Switzerland, Holland and Belgium.
THE ANNALIST MONTHLY INDEX OF WHOLESALE COMMODITY
-MONTHLY AVERAGES OF WEEKLY FIGURES.
PRICES
Unadjusted for seasonal variation (1913=100)
Sept. 1 1933. Aug. 11933.
Farm products
Food products
Textile products
Fuels
MetaLs
BuLding materials
Chemicals
Miscellaneous
All commodities

A 11 nnynn9s111•Inia nn enIti haala il

89.3
105.7
121.9
139.2
104.8
108.4
97.0
86.0
104.8
70.7

89.3
104.2
127.4
121.9
104.4
107.6
97.2
86.5
102.7
74.6

Sept. 11932.
77.5
99.8
79.3
136.2
97.2
106.3
95.2
82.0
95.2

a Based on exchange quotations for France, Switzerland, Holland and Belgium•




Week Ended
Week Ended
Week Ended
Week Ended
Sept. 23 1933. Sept. 16 1933. Sept. 9 1933. Sept. 2 1933.
+12.7
+6.8
+17.4

+86
+4.7
+13.5
+11.7
+1.3
+3.5
+28.0 •

+9.5
+9.3
+17.9
+10.7
+1.2
+6.9
+27.6

+10.7
+7.7
+16.2

+8.4

+9.9

+2.6
+3.7
+26.7

+5.0
+1.9
+23.1

+9.9

New England
Middle Atlantic
Central Industrial._
Southern States
Pacific Coast
West Central
Rocky Mountain

+12.7

+11.1

+11.8

Total United States.

Arranged in tabular form, the output in kilowatt hours of
the light and power companies of recent weeks and by
months since and including January 1930, is as follows:

May 6
May 13
May 20
May 27
June 3
June 10
June 17
June 24
July 1
July 8
July 15
July 22
July 29
Aug. 5
Aug. 12
Aug. 19
Aug. 26
Sept. 2
Sept. 9
Sept. 16
Sept.23
Sept.30
no. '7

Week of-

1933.

Week of-

Sales of Ordinary Life Insurance in Metropolitan Area
of New York During August Estimated at $57,887,000.
The Life Underwriters Association of the City of New York
announces estimated sales of ordinary life insurance for
August 1933, in the Metropolitan area, of $57,887,000.

Farm products
Food products
Textile products
Fuels
Metals
Building material*
Chemicals
Miscellaneous
All commodities

Sept. 30 1933

Financial Chronicle

2360

1,435,707,000 May 7
1,468,035,000 May 14
1,483,090.000 May 21
1,493,923,000 May 28
1.461,488,000 June 4
1,541,713,000 June 11
1,578,101,000 June 18
1,598,136,000 June 25
1,655,843,000 July 2
1,538,500,000 July 9
1,648,339,000 July 16
1,654,424,000 July 23
1,661,504,000 July 30
1,650.013,000 Aug. 6
1,627,339,000 Aug. 13
1,650,205,000 Aug. 20
1,630,394.000 Aug. 27
1,637,317,000 Sept. 3
1,582,742,000 Sept. 10
1,663,212,000 Sept. 17
1,638.757,000 Sept.24
Oct. 1
CIA*

II

1932.

1,429,C32.000 May 9
1,436,928.000 May 16
1,435,731,000 May 23
1,425,151,000 May 30
1,381,452,000 June 6
1,435,471,000 June 13
1,441,532,000 June 20
1,440,541,000 June 27
1,456,961,000 July 4
1.341,730,000 July 11
1,415,704.000 July 18
1,433,990.000 July 25
1,440,386,000 Aug. 1
1,426,986,000 Aug. 8
1,415,122,000 Aug. 15
1,431,910,000 Aug. 22
1,436,440,000 Aug. 29
1,464,700,000 Sept. 5
x1,423,977,000 Sept. 12
1,476,442,000 Sept.19
1,490,863.000 Sept.26
1,499,459,000 Oct. 3
1 MIR 910 nnn rim. le

1933
Over
1932.

1931.

Week of-

1,637,296,000
1,654,303.000
1,644,783,000
1,601,833,000
1,593,662,000
1,621,451,000
1,909,931,000
1,634.935,000
1,607,238,000
1,603,713.000
1,644,638,000
1,650,545,000
1,644,089,000
1,642,858.000
1,629,011,000
1,643,229,000
1,637,533,000
1,635,623,000
1,582,267,000
1,662,660,000
1,660,204.000
1,645,587.000
1 Age 200 nnn

0.5%
2,2%
3.3%
4.8%
5.8%
7.4%
9.5%
10.9%
13.7%
14.7%
16.4%
15.4%
15.4%
15.6%
15.0%
15.2%
13.5%
11.8%
11.1%
12.7%
9.9%
---

x Corrected figure.
DATA FOR RECENT MONTHS.

Monih of-

1933.

1932.

1931.

____
January.
February... _
March
April
May
June
July
August
September_
October_
November __
December_

6,480,897,000
5,835,263,000
6,182,281,000
6,024,855,000
6.532,686,000
6,809,440.000
7,058,600,000

7,011,736.000
6,494,091,000
6,771,684,000
6.294,302.000
6.219,554.000
6,130,077,000
6,112,175.000
6,310.667.000
6,317,733,000
6,633,865,000
6,507,804,000
6,638,424,000

7,435.782,000
6.678,915,000
7,370,687,000
7,184,514,00C
7,180,210,000
7.070,729,001.
7,286,576,000
7,166,086,000
7,099,421,000
7,331,380.000
6.971,644.000
7,288,025.000

Total

77,442,112 nun

RA

1930.

1933
Under
1932.

8,021,749,000 7.6%
7,066,788,000 10.1%
7,580,335,000 8.7%
7,416,191.000 4.3%
7,494,807,000 s5.0%
7,239,697,000 811.1%
7,363,730,000 1115.5%
-7,391,196,000
--7,337,106.000
-7.718,787,000
-7,270,112,000
--7,566,601,000

nan cm Ann 50 407 non non

a Increase over 1932.
-The monthly figures shown above are based on reports covering approxiNote.
mately 92% of the electric light and power Industry and the weekly figures are based
on about 70%.

Review by U. S. Department of Labor of Building
Operations in Principal Cities of the United States
During August-Reports Decreases in Estimated
Expenditures of New Residential and Non-Residential Buildings.
Building permit reports received by the Bureau of Labor
Statistics of the United States Department of Labor from
774 identical cities having a population of 10,000 or over
indicate an increase of 6.0% in the number of total building
operations, but a decrease of 2.2% in indicated expenditures
for total building construction in August 1933 as compared
with July 1933. Under date of Sept. 23 the Bureau said
that new residential buildings decreased 12.9% in number,
while indicated expenditures for such buildings decreased
11.3%. There was an increase of 7.3% in the number of

new non-residential buildings comparing August with July
and indicated expenditures for this type of building decreased
4.8%, according to the Bureau which added:
There was an increase of 8.2% in the number of additions, alterations,
and repairs while indicated expenditures for this type of operation increased 10.3%.
Comparing permits issued in 344 identical cities having a population of
25,000 or over, in August 1933 and August 1932
-Total building operations,
while showing an increase of2.2% in number,registered a decrease of 14.4%
In indicated expenditures.
There was a decrease of 7.4% in number but an increase of 4.7% in indicated expenditures for new residential buildings.
New non-residential buildings decreased 15.3% in number and 41.3%
In estimated value.
There was an increase of 9.1% in the number of additions, alterations,and
repairs. Expenditures for these repairs increased 21.7%.
The number of family-dwelling units provided in new dwellings in these
344 cities decreased 4.0% comparing August 1933 with the same month in
the previous year.
Permits were issued during August 1933 for the following important
building projects. In St. Louis, Mo., for a municipal office building to
cost $3,100,000; in Endicott, N. Y., for factory buildings to cost $298,000;
in Poughkeepsie, N. Y., for a hospital building to cost over $220,000; in
Muskegon, Mich., for an amusement building to cost $280,000, and in
Royal Oak, Mich.,for a church to cost $250,000.
ESTIMATED COST OF NEW BUILDINGS IN 774 IDENTICAL CITIES, AS
SHOWN BY PERMITS ISSUED IN JULY AND AUGUST 1933 BY
GEOGRAPHIC DIVISIONS.
New Residential Buildings.
Geographic Division.

CUtes

Estimated Cost.
July 1933. August 1933

New England
105
Middle Atlantic
179
East North Central_ _. 178
West North Central... 72
South Atlantic
80
South Central
81
Mountain and Pacific. 79
Total
Percent of change

774

Families Provided for
in New Dwellings.
July 1933. August 1933.

82062,005
2,645,748
1,524,471
916,750
928,010
732,369
2,421,665

461
688
344
292
378
363
740

429
576
318
258
286
325
672

$12,665,986 $11,231.018
-11.3

3.266

2,864
--12.3

$2,109,773
3,357,573
1.652,239
1,048,407
1,019,634
945,380
2,532,980

New Non-residential
Buildings, Estimated
Cost.

Total Construction (including alterations and
repairs), Estimated Cost.

July 1933. August 1933. July 1933. August 1933.
New England
105
Middle Atlantic
179
178
East North Central_
West North Central_ _ 72
South Atlantic
80
81
South Central
Mountain and Pacific_ 79
Total
Percent of change_ _

2361

Financial Chronicle

Volume 137

774

$672,848
2,865,660
1,526,093
4,006.660
584,863
1,988,513
1,807,803

8752,811
2,880.939
2,304,521
3,736.673
882,242
847,560
1,407,582

$4,245,801
10,236,382
4,765,622
5,944,356
2,787,261
3,724,354
6,315,621

$4,228,350
10,861.030
5,322.554
5,448,038
2,884,545
2,474,595
5.945.456

813,452,440 $12,812,328 $38,019,397 $37,164,568
-4.8
-2.2

Sales Set New Record.
For the fourth successive month a new high record in
the sales of household electric refrigerators in the United
States was made in August, according to the announcement
by the Edison Electric Institute, which further states:
August Electric Refrigerator

August sales totaled 95,413 units, compared to 25,583 sold in August
1932, and 68,465 in the corresponding month of 1931, the industry's peak
year.
Total sales for the first eight months of the year were 890,380 units, as
against 644,313 sold in the corresponding period of 1932 and 767.913 in
the first eight months of 1931. The sales in the entire year 1932 were
769,695 units.
With the impetus gained through the celebration of National Electric
Refrigeration Week, Sept. 30 to Oct. 7, the Electric Refrigeration Bureau
Is confident that the fall sales will bring the year's total to a new record
of well over a million units. The original quota set for the year by the
Bureau in its National sales promotion campaign was 800,000 units, which
figure was reached the first week in August.

Chain Stores Report Sales Improvement.
Substantial further progress was reported during August
in most sections of chain store trade, notably the apparel,
shoe and general merchandise divisions, according to the
"Chain Store Age." Instances of outstanding individual
gains of a contra-seasonal nature were again in plentiful
evidence everywhere, but chiefly in the groups above mentioned. Sales of grocery chains, however, despite the
continued improvement shown by some units, failed as a
whole to maintain the upward trend of recent months. The
publication goes on to say:
Therefore, although four of the component series advanced, the weighty
influence of the decline in grocery returns caused a drop in the "Chain
Store Age" bade t of chain store sales for the month to 84.3 of the 1929-1931
average as 100. from 86.2 in July. As compared with August 1932. however, the index figure for August this year showed a gain of 3.9 points
as against an excess of 3.0 points in July this year over the corresponding
month of 1932.
Average daily sales in August of 19 leading chain store companies used
by "Chain Store Age" in compiling the monthly Index, aggregated $6.662.000 as compared with $6,813,000 in July and $6,352,000 in August 1932.
The index of sales for three chains comprising the apparel group rose
to 91.3 in August from 79.4 (revised) in July, while that for two chains
comprising the shoo group advanced to 86.4 from 78.6 the preceding
month. In each case the August level was the highest for any month since
April 1932.
Business for these chains in August was greatly aided by vigorously
pushed "Buy Now" campaigns. Total average daily sales of the apparel
group were 21% ahead of August 1932 as compared with a comparative




increase of little over 5% in July. Average daily sales for the two shoe
chains in August were 28% larger than the same month of last year.whie.h
contrasts with a gain of only 7% in July.
The index of sales of two drug chains advanced to 95.0 in August from
94.8 in July. Average daily sales for these companies last month were
11.7% ahead of 1932, as compared with a comparative gain of 7.3 in July.
The sales index for the five-and-ten-department store group in August
was approximately 92.4, as against 92.3 in July and 80.4 in August 1932.
Total average daily business of these chains were 15% ahead of August
1932, against an increase of 9% in July.
Average daily sales of the six Companies used in the grocery index again
fell under 1932 levels after having shown encouraging improvement in
July. The index for the group in August was 80.4 as compared with 83.4
in July and 80.8 in August 1932.

Employment Conditions in Chicago Federal Reserve
District During August-Further Marked Improvement Reported-Number of,Employees Increased
8% and Payrolls 7%.
In reviewing employment conditions in the Seventh
(Chicago) Federal Reserve District, the Chicago Federal
Reserve Bank, in its "Business Conditions Report" of
Sept. 30, states that -employment in Seventh District
industries registered another marked improvement in
August, reports for a payroll period near the middle of the
month showing increases of 7% in number of employees and
8% in payrolls over the corresponding period of July."
The Bank continued that "this marks the fourth consecutive
month of expansion in industrial workers and brings the
employment index up to 68.2, the highest point reached since
September 1931." Continuing, the Bank said:
Payrolls have advanced steadily since last March, but the August index
of 46.7 reflects a level which is still below that prevailing during the first
quarter of 1932. Readjustments under the National Recovery Administration (code) were reported by a large number of establishments as responsible for the current increases.
Increases in employment were more extensive in manufacturing than in
-but except for public
non-manufacturing industries
-7%% as against 4%
utilities in which there was practically no change, every major Industrial
group made some contribution to the rise in this item. The smallest gain
recorded was that at coal mines where less than ji of 1% in additional men
were put to work during the month, and the largest was that of the stone,
clay, and glass industries in which employment showed an increase of 15%.
Exclusive of the last-named group, gains within the manufacturing industries ranged between the narrow limits of 7 and 9%. The changes in
payrolls were less regular than in employment. Two of the groups, rubber
products and coal.showed marked decreases, while the increases ranged from
2% for public utilities to 24% for the textile industries.
Practically all industries are operating with larger forces and paying out
more in wages than a year ago. Exceptions are to be found in the public
utilities and the construction industries, the former showing a general curtailment of about 5% and the latter employing almost as many men as a
year ago but paying out 20% less in wages.
-SUVENTH FEDERAL RESERVE
EMPLOYMENT AND EARNING0
DISTRICT.
Per Cent Changes
from July 15 1933.

Week of Aug. 15 1933.
Industrial Group.

Metals and products.a
Vehicles
Textiles and products
Food and products
Stone. clay and glass
Wood products
Chemical products
Leather products
Rubber products_ b
Paper and printing

No. of Number
of
ReportWage
ing
Firms. Earners.

Earnings.

153,702
208,148
32,887
77,610
9,677
24,806
15.208
27,586
7,133
46,361

$2,996.000
4,903,000
522,000
1,478,000
170,000
328,000
323,000
434,000
143,000
1,020,000

741
177
146
355
145
272
106
86
8
317

Total manufg., 10 groups_ _ _ 2,353
274
Merchandising_ c
78
Public utilities
16
Coal mining
329
Construction
Total non-mfg., 4 groups__
Total 14 groups

697
3.050

603,118 $12,317,000
672.000
35.601
2,197,000
76,473
36,000
2.129
179,000
10.303
124,508

$3,084,000

EarnWage
Earners. ings.
+8.4
+6.7
+8.9
+6.4
+15.0
+8.2
+8.5
+7.6
+5.9
+7.1

+13.7
+7.3
+24.1
+6.2
+6.8
+11.1
+6.7
+13.3
-15.8
+7.1

+7.5
+10.1
-0.1
+0.3
+14.4

+9.2
+7.1
+1.7
-8.4
+8.9

+3.7

+3.1

727,624 $15,401,000

•Other than vehicles. b Michigan ana Wisconsin. c

+6.8
+7.9
.0.5 and Wisconsin.

Sales of Merchandise in Chicago Federal Reserve
District Through Both Wholesale and Retail
Channels Increased During August-Increases in
Most Instances Seasonal in Nature.
"The merchandising of commodities inYthe Seventh
(Chicago) District showed expansion in August over July,"
it is noted in the'Sept. 30 ."Business Conditions Report"
of the Federal Reserve Bank of Chig.Ftwhichsaid_ that
"the gain in volume of trade being partly seasonal in nature."
The "Report"further stated:
In wholesale distribution, grocery sales increased 1% over the preceding
month, hardware 3%. drugs 1815%. shoes 29%, and electrical supplies
,
The gains recorded in hardware and electrical supplies were counter
to trend for August, and that in drugs was greater than average, while the
increases in grocery and shoe sales were less than usual for the period. The
dry goods trade experienced a contrary-to-seasonal recession of 17%,
following a non-seasonal gain in July this year. As may be noted in the
table. all groups continued to have heavier sales than a year ago: in groceries,
hardware,and dry goods,the gains were smaller than in a similar comparison
for July, but in electrical supplies the increase was considerably greater
than a month previous, and in drugs contrasted with a slight decline. The
continued gains over last year in the dry goods and electrical supply trades
brought cumulative sales for the eight months of 1933 to a little over the
same months of 1932. Declines for the year to date in other groups amounted

10%.

Financial Chronicle

2362

to 6% in groceries, 5% In hardware, 16% in drugs, and 1% In shoes. In
the grocery trade,stocks on Aug. 31 totaled heavier than a year ago on the
same date, but remained lighter in the other lines.

Sept. 30 1933

TOTAL VALUES OF EXPORTS AND IMPORTS OF THE UNITED STATES
(Preliminary figures for 1933 corrected to Sept. 22 1933.)
MERCHANDISE.

WHOLESALE TRADE IN AUGUST 1933.

August.

Per Cent Change
From Same Month Last Year.
Net
Sales.
Groceries
Hardware
Dry goods
Drugs
Shoes
Electrical supplies

Stocks.

+5.5
+30.9
+24.8
+3.4
+5.3
+48.8

+5.6
-9.6
--7.0
-13.5
-26.5

+5.2
-2.7
+12.5
-4.4
-32.9
+17.2

+7.0
+12.2
+20.1
-10.6
-10.5
+40.4

109.9
240.1
294.2
226.9
202.3
195.0

Following a greater than usual recession n July department store trade,
the volume of August business expanded considerably more than seasonally.
The gain over the preceding month of 34% n the total for Seventh District
reporting firms compared with one of only 12% in the 1923-32 average for
August, and represented a larger increase than in any of those years.
Stores in smaller cities showed greater improvement in the monthly comparison than did those in the large cities, the total for the former group
gaining 41% over July. In the yearly comparison. Chicago continued to
make the most favorable showing, while the moderate increase In Detroit
trade was the first recorded since the fall of 1929. A further rising trend in
stocks is noted, and substantial increases in Chicago. Indianapolis. and
Milwaukee on Aug.31 over the same date a year previous brought the total
for the district to 6% heavier in this comparison. Stock turnover continues
to be more rapid than a year ago.
DEPARTMENT STORE TRADE IN AUGUST 1933.

Locality.

Per Cent Chanoe
August 1933
From
August 1932.

P.C.Change
8 Months
1933 From
Same
Period 1932

Net
Sales.
Chicago
Detroit
Indianapolis
Milwaukee
Other cities
Seventh District

Stocks End
of Month.

Net
Sales.

+43.3
+7.9
+32.1
+23.4
+20.9

+22.7
-27.1
+24.9
+9.3
-4.4

-0.1
-22.6

+29.3

+5.7

Ratio of August
Collections
to Accounts
Outstanding
End of July.
1933.

1932.

10.5
-9.4

25.2
30.6
35.6
31.8
26.4

20.1
24.8
33.7
29.6
23.8

-8.0

28.7

1,000
Dollars.
944,527
890,131

1,000
Dollars.
1,055,441
917,309

1,000
Dollars.
-110,914
-27,178

54,396

138,132

17,497

Exports
Imports
Excess of exports
R X1,101 of Imnnrfia

1,000
Dollars.
108,599
91,102

Increase(+)
Decrease(-)

1933.

24 nnn

EXPORTS AND IMPORTS OF MERCHANDISE, BY MONTHS.
1932.

1933.

1931.

1930.

1929.

1,000
1,000
1.000
1,000
Dollars. Dollars. Dollars. Dollars.
120,589 150,022 249,598 410,849
101,515 153,972 224,346 348,852
108,015 154,876 235.899 369,549
105.217 135,095 215,077 331,732
114,203 131,899 203,970 320,035
119,794 114,148 187.077 294,701
144,194 106,830 180,772 266.762
131,000 108.599 164,808 297,765
132,037 180,228 312,207
153,090 204,905 326,896
138,834 193.540 288,978
131,614 184,070 274,856

ExportsJanuary
February
March
April
May
June
July
August
September
October
November
December

1928.

1,000
1,000
Dollars. Dollars.
488,023 410,778
441,751 371,448
489,851 420,617
425,264 363,928
38,8.013 422,557
393,186 388,661
402.861 378,984
380.564 379,006
437,163 421,607
528,514 550,014
442,254 544,912
426,551 475,845

8 mos. ending August 944,527 1.055,441 1,661,547 2,640,243 3,406,513 3.135,979
12 months ending Dec.
1,611,016 2,424,289 3.843,181 5,240,995 5,128,357
Imports
January
February
March
April
May
June
July
August
September
October
November
December

135,520 183,148
130,999 174,946
131,189 210,202
126,522 185,706
112,276 179,694
110,280 173,455
174.460
79,421'
91,102 166,679
98.411 170.384
105,499 168,708
104.468 149.480
97,087 153,773

96,008
83,748
94,860
88,412
108,874
122.251
143.000
155,000

310,968
281,707
300,460
307,824
284,683
250.343
220,558
218,417
226.352
247.367
203,593
208,638

368,897
369,442
383,818
410,666
400,149
353,403
352,980
369.358
351.304
391,063
338,472
309,809

337,916
351,035
380,437
345,314
353.981
317,249
317.848
346,715
319,618
355.358
326.565
339,408

24.7

In the retail shoe and furniture trades, unusually sharp declines in July
were followed in August by a contrary-to-seasonal expansion in the former
and a more than normal increase in the latter. Sales by reporting shoe
dealers and the shoe departments of department stores aggregated 19%
In excess of the July volume and 17% heavier than for last August, the
latter being the first gain in the yearly comparison since the early months of
1930. In the first eight months of this year, the volume sold totaled 9%
smaller than in the corresponding period of 1932. Shoe stocks expanded
26% during August. so that the total at the end of the month exceeded
that on the same date last year by 2%.
The gain of 44% over July in the retail furniture trade compared with an
increase in the 1927-32 average for August of but 28%. Furthermore. the
38% gain over last August represented the largest increase In the yearly
comparison in four successive months of expansion. Stocks gained slightly
between the end of July and Aug.31, and totaled about the same as a year

ago.
Aggregate sales in August of 14 reporting chains operating over 2,500
stores, exceeded those of the preceding month by 2% and were 12% greater
than in the same month last year. In the monthly comparison, drug,fiveand-ten-cent store, cigar, and .musical instrument sales increased, with
groceries, shoes, and men's clothing recording recessions, while as compared
with a year ago, all groups had larger sales.

-Imports and
Country's Foreign Trade in August
Exports.
The Bureau of Statistics of the Department of Commerce
at Washington on Sept. 23 issued its statement on the
foreign trade of the United States for August and the eight
months ended with August. The value of merchandise exported in August 1933 was estimated at $131,000,000,as compared with $108,599,000 in August 1932. The imports of
merchandise are provisionally computed at $155,000,000 in
August the present year, as against $91,102,000 in August
the previous year, leaving an unfavorable balance in the merchandise movement for the month of August 1933 of approximately $24,000,000. Last year in August there was a favorable trade balance in the merchandise movement of $17,497,000. Imports for the eight months ended August 1933
have been $890,131,000, as against $917,309,000 for the
corresponding eight months of 1932. The merchandise exports for the eight months ended August 1933 have been
$944,527,000, against $1,055,441,000, giving a favorable
trade balance of $54,396,000 for the eight months, against
$138,132,000 in the same period a year ago.
Gold imports totaled $1,085,000 in August 1933 against
$24,170,000 in the corresponding month of the previous
year, and for the eight months ended August 1933 were
$186,095,000, as against $192,057,000 in the same period a
year ago. Gold exports in July were 1,473,000, against
only $18,067,000 in August 1932. For the eight months
ended August 1933 the exports of the metal foot up $260,552,000, against $809,379,000 in the corresponding eight
months of 1932. Silver imports for the eight months ended.
August 1933 have been $43,565,000, as against $13,595,000
in the eight months ended August 1932, and silver exports
were $12,386,000 compared with $9,531,000. The following
is the complete official report:




1,C00
Dollars.
131,000
155,000

1932.

1932.

8 mos.ending August
12 months ending Dec

890,131

917.309 1,448,290 2,174,960 3.008.713 2.750.495
1 322,774 2,090,635 3,060,908 4.399,361 4,091,444

GOLD AND SILVER.
8 Months. Ending Aug.

August.
1933.

Excess of exports
Excess of imports
SUM
Exports
Imports

1933.

1932.

Increase(+)
Decrease(-)

1.000
Dollars.
81,473
1,085

GoldExports
Imports

1932.
1,000
Dollars.
18,067
24,170

1,000
Dollars.
260,552
186,095

1,000
Dollars.
809.379
192,057

1,000
Dollars.
-548,827
-5,962

74,457

617.322

80,388
6,103
7,015
11,602

Excess of exports
Excess of imports_ __ _

433
1,554

12,386
43,565

9,531
13,595

4.587

1.121

31.179

+2,855
+29,970

4.064

EXPORTS AND IMPORTS OF GOLD AND SILVER. BY MONTHS.
Gold.
1933.
ExportsJanuary
February
March
April
May
June
July
August
September
October
November
December

1932.

Silver.

1931. 1930.

1933.

1932.

1931.

1930.

1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars.
14 107,863
54 8,948 1,551 1,611 3,571 5,892
21,521 128,211
14
207
209
942 1,638 5,331
28,123 43,909
290
269
26
967 2,323 5,818
16.741 49 509
193 1,617 3,249 4,646
27
110
22,925 212,229
628
82
235 1,865 2,099 4,978
26
4,380 228,117
40
343 1,268 1,895 3,336
85.375 23,474 1,009 41,529 2.572
828 2,305 3,709
81,473 18,067
39 39,332 7.015
433 2.024 4,544
____
60 28,708 11,133
868 2,183 3,903
61 398,604 9,266
-_
1,316 2,158 4,424
16 4,994 5,008
--__
875
872 4,103
13 32,651
38
__-- 1,260 2,168 3,472

8 mos.end.Aug. 260.552 809,379 1,837 90.523 12,386 9,531 19,104 38,255
12 mos.end.Deo____ 809,528 466,794 115,967 ..- 13,850 26,485 54,157
Imports
January
February
March
April
May
June
July
August
September
'
October
November
December

128,479
30,397
14,948
6,769
1,785
1,136
1,496
1,085

..
..0.4 00000-4
va.ww.....wr
14,
loW0'0,-bOWw1.501,2
.40.-40.vw-4.-4w,o..
nams...40-.00,...A.09

Commodity.

Ratio of
Accts. OutColstanding to
Accts. Outstanding. lections. Net Sales.

8 Months Ending Aug.

1933.

34,426
16,156
25,871
49,543
50,258
63,887
20.512
57,539
49,269
60,919
94,430
89,509

12,908 1,763
60.198
855
55,768 1,693
65,835 1.520
23,552 5,275
13,938 15,472
21.889 5,388
19,714 11,602
13,680
---35,635
.___
40,159
____
32,778
--_-

2,097
2,009
1,809
1,890
1,547
1,401
1,288
1,554
2.052
1,305
1,494
1.203

2,896
1,877
1,821
2,439
2,636
2,364
1,663
2,685
2,355
2,573
2,138
3,215

4.756
3,923
4,831
3,570
3,486
2,707
3,953
3,492
3,461
3,270
2.652
2,660

8 mos.end.Aug. 186.095 182,057 317.992 273,802 43.560 13,595 18,381 30,718
12 mos.end.Dee
___ 213.315 612.119 398 054
____ 10 650 25 664 49 761

Further Decline Noted During August by Federal
Reserve Bank of Chicago in Mid-West Distribution
of Automobiles-Schedules of Manufacturers Maintained July Levels-Orders Booked by Furniture
Manufacturers Decreased 26% as Compared With
July.
The Federal Reserve Bank of Chicago states that "manufacturers of automobiles maintained August schedules at the
July level, and operations continued to be more than double
those of a year ago. August output of passenger automobiles
in the United States totaled 195,076 in number," the Bank
said, "or a few cars more than the 195,019 of a month
previous and representing a gain of 157% over last August."
The Bank further reported as follows in its "Business Conditions Report" of Sept. 30:

Financial Chronicle

Volume 137

Truck production in the month, numbering 41,336. showed an expansion
of 9% over July and exceeded that of the same month last year by 187%.
j• For the second consecutive month, distribution of automobiles at wholesale in the Middle West recorded some decline Sales by dealers to consumers, however, totaled moderately larger in August than in the preceding
month. Both phases of distribution showed further notable gains over the
corresponding month of 1932. The number of used cars sold, in line with
new car sales at retail, increased over July and totaled considerably greater
than a year ago. Stocks of new cars declined between the end of July and
Aug.31,following some expansion a month earlier. In number, they totaled
above those on the same date last year, but their aggregate value was less,
principally due to certain dealers and distributors handling a wider range of
lines this year than at that time. The ratio of deferred payment sales to
total retail sales of dealers reporting the item, again rose in August,following a rather sharp drop in July, the current ratio being 44%, as against
36% a month previous and 45% a year ago.
MIDWEST DISTRIBUTION OF AUTOMOBILES.
Changes in August 1933 from previous months.
Per Cent Change From
-hay 1933.
New cars:
Wholesale
Number sold
Value
Retail
Number sold
Value
On hand Aug. 31
Number
Value
Used ears:
Number sold
Salable on handNum her
Value

Companies Included.

Aug. 1932. July 1933. Aug. 1932.

-14.8

+196.5
+149.8

19
19

12
12

+7.0
+7.6

+137.1
+104.3

54
54

33
33

-4.8
--10.1

+12.1
--13.1

54
54

33
33

+9.1

+50.0

54

33

+0.9
+1.8

+24.3
-3.3

54
54

33
33

With regard to orders booked by furniture manufacturers
the Bank reported as follows:
From the peak levels reached In the preceding month, orders booked by
Seventh District furniture manufacturers reporting to this Bank receded
26% In August, remaining, however, except for the July volume, in excess
of any month since August 1931. 'Shipments gained markedly-45%-the
fifth consecutive gain in the month-to-month comparison. As compared
with the volume a year ago, both new orders and shipments registered the
fourth successive Increase, amounting currently to 80% in the former and
87% in the latter item. Owing to the very heavy gains in orders booked a
month previous and the comparative slowness of shipments, the volume of
unfilled orders outstanding so increased during August that at the close of
the month it totaled 118% of current orders, as compared with but 84%
on July 31. The August rate of operations was expanded 10 points over
that obtaining in July, averaging approximately 58% of capacity, or 14
points above that of a year ago.

Slight Decline Shown in Lumber Output in Southern
Pine Mills in August.
August production of lumber in Southern pine mills declined slightly from July but the average weekly production.
was 53% above that in August 1932, according to the University of Texas Bureau of Business Research. Average
weekly shipments and average unfilled orders per unit
declined 7% and 13% respectively from July. However,
shipments were 13% above and unfilled orders were 6%
above August 1932.
Average weekly production per unit exceeded shipments
by 3,812 board feet, whereas in July 9,022 and in August
1932, 54,430 more board feet per unit were shipped than
were produced, added the announcement.
Gains in Business Activity in San Francisco Federal
Reserve District Retained During August-Mixed
Tendencies Noted in Trade and Industry.
Isaac B. Newton, Chairman of the Board and Federal
Reserve Agent of the Federal Reserve Bank of San Francisco, stated under date of Sept. 23 1933 that "Twelfth
(San Francisco) District industry and trade showed mixed
tendencies in August but, on the whole, activity retained
most of its previous gains and continued higher than a year
earlier. Industrial employment increased substantially more
than is usual at this season, and," Mr. Newton said, "there
was considerable expansion in payrolls." He continued as
follows:
Harvesting of most grain and field crops progressed satisfactorily during
August and the first half of September. Deciduous fruit crops were
damaged to some extent by insects and high temperatures, however, and
are expected to be smaller in the aggregate than in 1932. Sept. 1 forecasts
continued to indicate larger citrus fruit crops than in 1932. Condition of
both ranges and livestock became poorer during the month. Although
farm products prices decreased somewhat during August, they were considerably higher In mid-September than a year earlier.
Electric power production changed little from July to August, whereas a
slight decline is ordinarily expected. Activity at lumber mills did not
increase as much as Is usual from July to August, although production continued at a relatively high level. New orders for lumber fell off somewhat
further during the month. California output of crude oil averaged higher
during August and the first part of September than in July, but was
reduced considerably in the week ending Sept. 16 to 489,000 barrels daily.
That was the first full week of production under the new Federal code
allotments. Operations at canneries expanded seasonally, despite the
restrictive influences of strikes among fruit pickers. Non-ferrous metal
mining was slightly more active in August than in July.
The seasonally adjusted index of department store sales was lower in
August than in July, entirely as a result of decreases in California, where
a 23-i % sales tax became effective on Aug. I. Railroad freight carloadings
and wholesale trade increased slightly less than is customary from July
to August, but continued substantially higher than a year ago. Inter-




2363

coastal traffic expanded sharply, reflecting the highest eastbound tonnage
in two years.
Banking and credit conditions in the Twelfth District continued to
improve during the five weeks ending Sept. 20. Commercial loans of
reporting member banks tended upward during this period, particularly
during September. At the same time interest rates charged customers by
the city banks were reduced. Net demand deposits increased while time
deposits showed little net change. Investment holdings averaged slightly
lower than in the preceding month. Member banks reduced borrowings
from the Reserve Bank with funds received from commercial transactions
with other districts and from net United States Treasury disbursements
In excess of collections in this area. Most of the currency withdrawn in
early September to meet derdands over the Labor Day holiday was returned
by the middle of that month. Seasonally increasing needs of trade normally
call for an expanding circulation through the remainder of the year.

Lumber Shipments Lowest Since May-Orders Heavier
Than During Most of Recent Weeks.
Lumber shipments from the sawmills during the week
ended Sept. 23 1933 were the lightest of any week since May;
lumber orders, though less than the week before, were
greater than during any of the eight preceding weeks,
according to telegraphic reports to the National Lumber
Manufacturers Association from regional associations covering the operations of 1,051 leading hardwood and softwood
mills. Increase in new business reported was partly but not
entirely due to the larger number of mills reporting. Total
production during the week was 188,116,000 feet which was
the lowest of any week but one since July 8. Shipments
were 175,021,000 feet; orders received, 174,406,000 feet.
The Association further reports as follows:
For the first week since early July new business booked in the Douglas
fir region was heavier than production. Orders in Northern hemlock and
Northern hardwobds were also above output. Southern pine orders were
16% below production; Western pine, 19% below; Southern hardwoods.
14% below; total lumber, 7% below.
All softwood regions reported orders during the week ended Sept. 23
below those of similar week of 1932, total softwood orders being 13%
below those of last year. Hardwood orders showed gain of 6% over those
of corresponding week of 1932. Shipments were about the same during
the current week as during that of last year. Production this year was
47% above that of similar week of 1932.
For the 38 weeks of 1933 to date, orders were 14% above production.
For the first six months of 1933, they were 40% above output.
Forest products carloadings of 25,219 cars were 2,959 cars above the
preceding week, 7.169 cars above the same week of 1932 but 1,344 cars
below corresponding week of 1931.
Lumber orders reported for the week ended Sept. 23 1933, by 562 softwood mills totaled 147.235,000 feet, or 7% below the production of the
same mills. Shipments as reported for the same week were 147,702,000 feet
or 6% below production. Production was 157.479.000 feet.
Reports from 513 hardwood mills give new business as 27.171.000 feet,
or 11% below production. Shipments as reported for the same week were
27,319,000 feet, or 11% below production. Production was 30.637,000
feet.
Unfilled Orders.
The 526 identical mills (softwood and hardwood) report unfilled orders
as 435,818,000 feet on Sept. 23 1933. or the equivalent of 15 days' average
production, as compared with 503,655.000 feet, or the equivalent of 17
days' average production on similar date a year ago.
Last week's production of 393 identical softwood mills was 144.032.000
feet. and a year ago it was 103,055.000 feet; shipments were respectively
133.280.000 feet and 134,933,000; and orders received 130,556.000 feet
and 150,227.000. In the case of hardwoods, 189 identical mills reported
production last week and a year ago 16,906,000 feet and 6.258,000; shipments 15,327.000 feet and 13,675,000; and orders 15,236,000 feet and
14.407,000.
West Coast Movement.
The West Coast Lumbermen's Association wired from Seattle the following new business, shipments and unfilled orders for 314 mills reporting for
the week ended Sept. 23
NEW BUSINESS.
Feet.
Domestic cargo
delivery _ _ _ _
Export
Rail
Local
Total

UNSHIPPED ORDERS.
Feel.
Domestic MVO

23,353,000 delivery__ _127.004,000
86,100,000
22,475,000 Foreign
73,565,000
30,353,000 Rail
8,967,000
286,669,000
85,148,000 Total

SHIPMENTS.
Feet.
Coastwise and
intercoastal
Export
Rail
Local
Total

27,628,000
17,553,000
27,213,000
8,967.000
81,361,000

Production for the week was 82,489.000 feet.
Southern Pine.
The Southern Pince Association reported from New Orleans that for
103 mills reporting, shipments were 6% below production, and orders
16% below production and 11% below shipments. New business taken
during the week amounted to 22.051,000 feet (previous week 22.991.000
at 108 mills); shipments 24,786,000 feet (previous week 24,706.000): and
production 26,399,000 feet (previous week 26.390.000). Production was
44% and orders 37% of capacity, compared with 42% and 37% for the
previous week. Orders on hand at the end of the week at 100 mills were
57.140,000 feet. The 100 identical mills reported an increase in production
of 31%,and in new business a decrease of 30%,as compared with the same
week a year ago.
Western Pine.
The Western Pine Association reported from Portland, Ore.. that for
114 mills reporting, shipments were 16% below production, and orders
19% below production and 3% below shipments. New business taken
during the week amounted to 36.226.000 feet (previous week 54.032.000 at
131 mills); shipments 37.292,000 feet (previous week 43.534,000); and
production 44.570.000 feet (previous week 45.190,000). Production was
38% and orders 31% of capacity, compared with 34% and 29% for the
previous week. Orders on hand at the end of the week at 101 mills were
88.895,000 feet. The 99 identical mills reported an increase in production
of 62%,and in new business a decrease of 14%, as compared with the same
week a year ago.
Northern Pine.
The Northern Pine Manufacturers of Minneapolis, Minn., repot''did
production from 7 mills as 3,620,000 feet, shipments 2,475,000 feet and new

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Financial Chronicle

business 2,750.000 feet. The same mills reported production 350% greater
and new business 9% less than for the same week last year.
Northern Hemlock.
The Northern Hemlock and Hardwood Manufacturers Association, of
Oshkosh, Wis., reported softwood production from 24 mills as 401,000 feet,
shipments 1,788,000 and orders 1.060,000 feet. Orders were 8% of capacity
compared with 9% the previous week. The 15 identical mills reported a
decrease of 25% in production and a decrease of 12% In new business,
compared with the same week a year ago.
Hardwood Reports.
The Hardwood Manufacturers Institute, of Memphis, Tenn., reported
Production from 489 mills as 29,678,000 feet, shipments 25.953.000 and
new business 25,509,000. Production was 38% and orders 33% of capacity,
compared with 38% and 29% the previous week. The 174 identical mills
reported production 161% greater and new business 6% greater than for
the same week last year.
The Northern Hemlock and Hardwood Manufacturers Association of
Oshkosh, Wis., reported hardwood production from 24 mills as 959,000
feet, shipments 1.366.000 and orders 1,662,000 feet. Orders were 19%
of capacity, compared with 13% the previous week. The 15 identical mills
reported an increase of836% in production and an increase of 5% in orders
compared with the same week last year.

Value of Canadian Exports of Newsprint Declined
During August as Compared with August 1932—
Volume Increased During Month—United States
Biggest Buyer.

During August total exports of newsprint paper from
Canada amounted to 331,760,000 pounds, valued at $6,237,054,as compared with 305,521,300 pounds, valued at $7,251,752 in the corresponding month last year, states a report
issued Sept. 19, by the Dominion Bureau of Statistics.
According to the Montreal "Gazette" of Sept. 20 the report
also noted:
The United States was the best customer, taking 265.704,300 pounds,
valued at $5.092.974.
The United Kingdom was in second place with 26.556.400 pounds, valued
at $492,172, and Australia was third with 10,551.300 pounds, valued at
$231,783.

Trade Agreement in German Automobile Tire Industry
Canceled—Its Purpose of Satisfactory Regulation
Admitted to Be Failure.

Dissatisfaction with the existing trade agreement in the
German automobile tire industry has resulted in its cancellation, according to advices from Consul Sydney B.
Redecker, Frankfort-on-Main, made public on Sept. 21
by the U. S. Commerce Department. This agreement
established at the beginning of the current year between
manufacturers and dealers to regulate the German trade in
automotive tires is generally admitted to have failed to
achieve its purpose of satisfactory regulation, the report
states, adding:
One cause of serious complaint is the reported excessively low prices
granted directly by manufacturers to very large buyers, such as automobile
manufacturers and concerns operating numbers of vehicles. Tire producers
have been so eager to keep up production to the maximum that in order to
secure these large contracts they have cut their prices to levels allowing
scant profit above production costs.
On the other hand, dealers are very dissatisfied because of their small
turnover and elimination from the important wholesale business. In spite
of strict regulation, considerable price-cutting has taken place among the
dealer trade.
One factor which has particularly adversely affected the dealers in recent
months is the law granting tax exemption to new automotive vehicles
brought into service after April 1 1933, thus stimulating a great demand
for new vehicles, equipped with new tires, with a very depressing effect
on the old vehicles, reflected also in a diminishing demand for tire replacements, supplied by dealers.
The whole matter of new reorganization of the entire tire trade has been
presented to the Ministry of Economy for study and it is believed that a
new agreement will be established in the early fall, embodying features
designed to correct present causes of dissatisfaction.

Increase Reported in Exports of Rubber From Dutch
East Indies During First Seven Months of 1933.

A 25% increase in rubber exports from the Dutch East
Indies occurred in the first seven months of 1933 compared
with the corresponding period of last year, according to
advices to the U. S. Commerce Department from its London
office. In an announcement issued Sept. 19 the Department
said:
Total shipments in the 1933 period amounted to 161.640 metric tons
compared with 128.149 tons in 1932. July exports approximated 33,000
tons against 28.810 tons in June and 18,546 tons in July 1932.
Native rubber production, the report points out,is rising rapidly, totaling
13.000 wet tons (10.500 dry tons) in July, compared with the monthly
average from July 1932, to April 1933, of 5.730 tons.
Rapid increase in rubber production is considered in British trade circles
as likely to influence production control measures now under discussion, the
report declares.

Malayan Rubber Output Increases Shown for August
in Production and Stocks on Hand.

From the "Wall Street Journal" of Sept. 25 we take the
following from London:
Production of crude rubber on estates over 100 acres in size in Malaya
totaled 21,356 tons in August against 20.870 tons in July and 20,284 tons
In August 1932. Estimated total stocks of rubber, dry weight, on the same




Sept. 30 1933

estates, were 19,410 tons on Aug. 31 against 18,935 tons on July 31 and
19,618 tons on Aug. 311932.
Dealers' stocks at the end of August were 17.346 tons against 16.085
tons at the end of July and 18,921 tons at the end of August, last year.
Gross exports, duty paid, were 34,269 tons in August against 38.368 tons
in July and 32,156 tons in August, last year. Exports, as declared, including re-exports to Straits Settlements, were 32,554 tons against 30,958 tons
in July and 23,114 tons in August 1932.

Financing of Seeding of Winter Wheat to Be Made by
Regional Agricultural Credit Corporations and
Seed and Crop Production Loan Offices—Will Not
Exceed 85% of Borrower's Average Annual Acreage
of Product for Past Four Years.
Regional agricultural credit corporations and the seed and
crop production loan offices will finance the seeding of not
to exceed 85% of a borrower's average annual acreage of
winter wheat for a base period of the last four years, it was
announced Sept. 26 by Governor Henry Morgenthau Jr., of
the Farm Credit Administration. A statement issued by the
Farm Credit Administration on Sept. 27, in which the announcement was contained also said:
The financing is limited to the 85% of the average annual acreage regardless of whether or not the borrowing farmer has signed a wheat acreage control contract with the Secretary of Agriculture. The effect of these
Instructions is to place the loaning policy of the Farm Credit Administration
entirely in accord with the wheat acreage control program of the Department of Agriculture, Mr. Morgenthau explained.
This limitation of financing to 85% applies if the average annual acreage was in excess of 95 acres. If the average annual acreage was less than
95 acres but more than SO acres, no loan will be made to finance the planting of more than 80 acres. No reduction will be required if the average
acreage was 80 acres or less.
Governor Morgenthau also pointed out that in cases where winter wheat
is considered necessary for forage for the livestock of the applicant for a
loan from a Regional Agricultural Credit Corporation, plantings up to 80
acres may be nrade regardless of the history of the land. The seed and
crop production loan offices are making no loans for planting forage crops.
In computing the average annual acreage planted to winter wheat, the
spring wheat acreage may be used for the crop year or years in which no
winter wheat was planted. However, if both spring and winter wheat were
planted in the same crop year, only winter wheat acreage will be used.
If the land to be farmed was planted to winter wheat for the crop years
1930, 1931, 1932 and 1933, then the base period shall be that four-year
period. If the land was planted to winter wheat for only three of these
years, then the average of these three may be used to determine what may
be planted. Likewise, if it was planted for only two or only one of these
years, then the two years or the one year, as the case may be, may be used
to determine the allowed acreage.
In determining the aveiage acreage to be planted by an applicant, the
record of the land is to be used, whether or not the applicant farmed this
particular land.

$1.50 Wheat Prediction May Increase 1934 Crop.

From Fort Dodge, Iowa, the New York "Times" of Sept.
24 reported the following special correspondence under date
of Sept. 22:
Dollar and a halt wheat tor the 1934 crop, which was predicted at a
regional farm comerence by William Settle, a member or the national
wheat advisory committee, has imparted a stimulus to wheat planting
in the Southwest.
Although the farmers have agreed to a 15% curtailment in wheat acrea're
for the crop: new land will be added this fall unless the conservative farm
leaders are able to dissuade the speculators.
Mr. Settle's prediction was based on the parity price which he said
would be established no matter if $1 a bushel processing tax became neces-

sary.

United States Estimate on Wheat Too Small, According
to B. W. Snow—Statistician Sees Supply Close to
Domestic Needs.

In the Chicago "Daily Tribune" of Sept. 16 it was stated
that the United States is materially closer to a domestio
basis on wheat than the country as a whole believes, according to Statistician B. W. Snow. The latter, said the
"Tribune," after a careful analysis of the supply and demand
situation, estimates around 682,000,000 bushels of wheat
will be consumed in the United States this season, although
the Government recently placed the total around 600,000,000
bushels. The item from which we quote added:
Mr. Snow's view is to a large extent confirmed by Nat C. Murray.
who places the probable requirements at 630,000.000 bushels.
Mr. Snow is inclined to the belief that the Government has made a
serious error in its estimates on the carryover from the previous crops, and
calls attention to the fact that in a recent revision of the 1931-32 figures
they were raised nearly 20,000,000 bushels, due largely to a change in farm
holdings.
A Sharp Drop.
According to the figures presented in the analysis of the domestic wheat
situation the carryover at the end of the 1933-34 season may be reduced
to only 135,000,000. a figure about equal to the normal amount on hand
before the Federal Farm Board started its stabilization operations, and threw
a monkey wrench into the world's economic machinery, which wrecked
the market to such an extent that less than six months ago prices were the
lowest in recent history.
In arriving at his conclusions as to the amount of wheat available for
the current crop year. Mr. Snow uses his own estimate on production of
471.000.000 bushels, and allows 346,000.000 bushels for carry-ovdr from
the previous year. The Government's September estimate suggested a
yield o'507.000.000 bushles, while the carry-over was placed at 389,000.000
bushels in excess of a year ago.

Volume 137

Financial Chronicle

Hearings in Portland.
No material export outlet is regarded as necessary this season in order
to cut down domestic wheat supplies, although the Government is now
holding hearings at Portland. Ore., to subsidize the shipment of 30.000.000
to 35,000,000 bushels from the north Pacific coast to the orient and elsewhere.
Mr. Snow believes that if this wheat is exported there is a possibility of
the carry-over at the end of the 1933-34 season dropping below 100.000.000
bushels, which he regards as very moderate insurance against another
crop shortage. It would seem, therefore, that such a disposition of the
relatively small surplus in Oregon and Washington might properly be
likened to the removal of the key log in a lumber jam, and result in a
general cleaning up of our wheat situation.

Estimates Indicate That Canada's Current Wheat
Production Will Be at Lowest Levels Since 1924.
Official Canadian estimates indicate that wheat production in Canada during the current year will be the lowest of
any period since 1924, according to advices to the U. S.
Commerce Department from Commercial Attache H. M.
Bankhead, Ottawa. Total yield of oats is estimated to be
the lowest since 1929; barley, since 1921; rye, since 1931;
and flaxseed the lowest on record. An announcement issued
by the Commerce Department on Sept. 25 said that the
report further stated:
The yield of all the small grain crops is below last year. the report states.
The late sown crops are in poorer condition than at the same time last year
and about 20% below average. There has been a further decline in the
condition of pastures. In Prince Edward Island, Ontario. and the three
Prairie Provinces pastures are extremely poor. In fact, the report declares,
in the whole Dominion the condition of pastures is the worst on the Dominion
Bureau of Statistics records since 1908, except for the year 1914.
The official government estimate of the 1933 wheat crop is 282.771.000
bushels, of which 268,628.000 bushels are spring wheat and 14.143.000 fall
wheat. The estimate of the production of oats is 316,966,000 bushels;
barley. 64,291,000 bushels; rye, 6,418,000 bushels; and flaxseed, 756,000
bushels.

Large Wheat Surplus Forecast for France.
Under date of Sept. 26 Paris advances to the New York
"Times" stated:
The French wheat surplus at the end of the present season is going to be
about 110.000.000 bushels, and not virtually nil as the Minister of Agriculture forecast, according to Deputy Jean Montigny in an article in to-day's
El Capital.
k M. Montigny says the Minister's figures were mistaken and the government's plans were "gravely insufficient." The only solution lies in sharp
reduction of acreage, he adds.
Meanwhile, the price of bread has again risen in correlation with the
price of wheat, which is now 120 francs a metric quintal—about $1.96 a
bushel based on to-day's dollar rate.
) Bread now costs 1.95 francs a kilogram instead of 1.90. Much unfavorable comment has been aroused by this fact.

Slight Increase in India's Current Wheat Yield
Estimated.
On Sept. 26 the Department of Commerce at Washington
stated:

p

•

Estimates of India's wheat crop for the 1932-33 season just issued in
India show an increased yield of 5% over last year, according to ViceConsul Nathaniel Lancaster, Jr., Bombay, in a report made public by
the Commerce Department.
The official figures, covering over 98% of the total wheat acreage of the
country, report the total area under wheat in the current season as 32,992.000 acres against 33.803,000 acres last year. The total yield of the
crop, which has already been harvested, is estimated at 9.452,000 tons
compared with 9.024.000 tons in the 1931-32 season.
This year's estimates of wheat yield, it is pointed out, show an increase
in all the important wheat-growing areas of India, except in the Central
Provinces and Berar, North-West Frontier Province and Rajputana.
The yield per acre in the present season is 642 pounds compared with
598 pounds last season.

Use of International Wheat Pact Doubted in Germany
—Russia Seen Wrecking the World Agreement—
Reich Not Affected Under New Policy.
From Berlin Sept. 23 a wireless message to the New
York "Times" stated:
There is skepticism here as to the efficacy of the international wheat
agreement and suspicion that Russia has designs to wreck it on the pretense
that her export quota is inadequate, although at present her shortage of
cereals is so acute that she has begun buying in Turkey. Germany is not
affected, as under this week's Government announcement she virtually
will be isolated from the international market.
) State has directly fixed internal wheat and rye prices, raising them
The
from 182 marks a ton for wheat in October to 195 in June 1934. and from
147 marks for rye to 165, from mark Brandenburg products, the changes
In other districts being made according to geographical position.
The State by regulating production and import and export, with punishments for selling below these compulsory rates, can undoubtedly maintain
prices. The trouble is that a living profit cannot be assured to farmers
unless agricultural wages and prices of fertilizers and machinery and the
interest rate are simultaneously fixed by the State.

Russia Again Prevents Agreement on Wheat Export
Quotas—Demands 75,000,000 Bushel Allotment and
Rejects Compromise Offer by Canada and United
States—Negotiations to Be Resumed in Two
Months.
Further Russian refusals to accept an export quota of less
than 75,000,000 bushels of wheat annually forced an adjournment of the wheat advisory committee, meeting in London
on.Sept. 28, and again caused fears of Soviet "dumping" of




2365

the grain which might imperil the world wheat agreement.
Officials of the Department of Agriculture at Washington,
however, indicated that Russia's failure to adhere to the
agreement did not constitute a serious threat to the pact.
It was also said that the Wheat Advisory Committee will
meet again in about two months, and that a satisfactory
accord with Russia may then be reached. The export quota
offered Russia was 37,000,000 bushels. In an effort to satisfy
the Soviet representative on the Committee, an offer was
made to increase the Russian allotment in 1934, contingent
upon an increase in all wheat exports, but this offer was
rejected. Associated Press advices from London on Sept.
28 said in part:
Canada and the United States met Russia's demand that she must
have at least 75.000,000 busheLs of the export quota—double her allotmentby offering her 8,000,000 more in the event such an increase was
found feasible.
The Russian delegate, Abraham Gourevitch, left the meeting before its
conclusion with the assertion the position of his Government had not
been changed.
"Why should we?" he asked.
Later an official announcement said "no definite conclusions have been
reached." but that "further negotiations will be carried on between the
governments."
Argentina and Australia delegates did not attend the session, the explanation being that, since any concessions which would be made would involve
only the United States and Canada, it was believed those two nations
only were concerned.
The Russian refusal was generally anticipated since it was recognized
the hypothetical offer of an increase of 8,000.000 bushels came nowhere
near meeting the Russian demands. Acceptance of the offer would have
placed the Russian allotment near the American figure, 47,000,000 bushels.

Czechoslovakia Adheres to International Wheat Pact.
On Sept. 26 Associated Press accounts from Geneva said:
Czechoslovakia notified the League of Nations to-day that she adheres
to the international wheat agreement, which entails eventual reductions
in tariffs, provided this step will not make it difficult to maintain a remunerative price for home-grown cereals.

Less Sugar Consumed in United States During August
Than During August 1932.
Sugar consumption (distribution) in the United States
during August 1933 amounted to 540,626 long tons, raw
sugar value compared with 589,178 tons consumed during
August 1932. This is a decrease of 48,552 tons or 8.24%,
according to a report issued Sept. 25 by B. W.Dyer & Company, sugar economists and brokers. The report showed
that consumption for the first eight months of 1933 amounted
to 3,978,687 tons, an increase of 39,946 tons or 1.01%,
compared with the same period of 1932.
Increase of 64,471 Tons Reported in Distribution of
Sugar in United States During First Eight Months
of This Year.
There was an increase of 64,471 tons, or approximately
1.6% in the distribution of sugar in the United States
during the first eight months of 1933, according to statistics
compiled by Lamborn & Co., members of the New York
Coffee & Sugar Exchange. Distribution from January to
August inclusive was 4,051,741 tons, compared with 3,987,270 tons distributed during the similar period in 1932. The
firm also reports the following statistical developments:
Russia, during the first six months of 1933. exported 24,557 tons of
sugar, a decrease of 12.485 tons (approximately 50%) compared with the
similar period of last year. Of this year's shipments, 11,540 tons went to
Persia, 6,607 tons to Egypt, 2,626 tons to Afghanistan. 2,672 tons to China,
while the balance 1,112 tons were exported to miscellaneous destinations.
Of last year's six months' shipments, 20.296 tons went to Persia, 6,843 tons
to British East India, 2.641 tons to Afghanistan, 3,201 tons to China.
2,049 tons to Turkey, while 2,012 tons were exported to sundry other places.
The Louisiana cane sugar crop, based on the condition of the cane as
of Sept.1, is forecast at 165,200 long tons as contrasted with 198,892 tons
produced last year, a decrease of 33.792 tons, or 16.9%. The forecast is
based on an average yield per acre of about 13.75 tons of cane, and a total
production of 2,434,000 long time. Last year, the yield averaged 13.84
tons of cane to the acre, and total production amounted to 2,577,000
long tons.

Government's Plan to Advance Cotton Producers 10
Cents Per Pound on Their Crop—Growers to Get
Funds Without Guaranty of Repayment Beyond
Federal Lien—Loans to Bear 4% Interest—Credit
Corporation to Be Set Up to Distribute Funds
Advanced by RFC.
The plans of the Government to advance to cotton producers 10 cents per pound on their present crop (to which
reference was made in our issue of Sept. 23, page 2179),
have been further developed during the week. The initial
announcement made by the Department of Agriculture
regarding the plan was issued as follows on Sept. 22:
Following a conference at the White House to-day between President
Roosevelt, Secretary Wallace, Administrator George Peek of the Agricultural Adjustment Administration and Senator John H. Bankbead. of
Alabama, it was announced that cotton producers will be given an opportunity to secure an advance of 10 cents per pound on their present crop
without liability to them.

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Financial Chronicle

Details of the plan to provide this credit to cotton producers are now
being worked out by the AAA in co-operation with the Reconstruction
Finance Corporation and the Farm Credit Administration. Oscar Johnston
Director of Finance, is representing the AAA in formulating these details.
The plan, approved by the President entails the lending of producers
10 cents per pound on their cotton crop, for the purpose of enabling them to
bold their cotton until prices are nearer their fair exchange value.

On Sept. 25 it was made known that the establishment
of a private corporation with Federal capital was decided
upon by the AAA for distributing up to $400,000,000 in
loans to cotton farmers under the program to lend them
10 cents a pound on this year's crop. Further advices from
Washington Sept. 25 are taken as follows from the New
York "Times":
Use of this expedient to circumvent legal impediments was decided
upon when it was discovered by officials that the RFC could not make loans
without an unconditional guarantee of repayment by the borrower.
Under the original plan, announced by President Roosevelt last Friday.
(Sept. 22) it was contemplated that the required funds would be advanced
by the RFC to the FCA. The latter organization was to have complete
jurisdiction over the distribution of the loans, in line with the policy of
placing all loans for agricultural purposes under a single Federal agency.
For the latter purpose the FCA was established at the behest of the
President. and Henry Morgenthau Jr. received authority over all such
Government credit activity.
Growers Not Fully Liable.
It is contemplated further in the cotton loan program that growers
taking advantage of it should not be liable for repayment of the loans
beyond giving the government a 10-cent lien on the cotton against the
loans. It is an integral part of the plan that, should cotton go below 10
cents a pound on the farm, despite the 40% reduction contemplated in
next year's plantings, the Government would stand the loss.
But since the RFC could not advance the required funds without an
unlimited liability on the part of the borrower, the matter was put up to
Mr. Morgenthau. He pointed out that he could not wisely guarantee
repayment because such an action would directly involve all the assets of
the FCA, including outstanding Federal Land Bank bonds, and the remnants of the Farm Board revolving fund, from which loans are made to
co-operatives.
Corporation to Be Formed.
Officials then turned to the private corporation idea, which is understood
to have been the suggestion of Oscar Johnson, Finance Director of the
AAA. He first though of utilizing an unused charter to the Staple Cotton
Growers Association of Mississippi. which was set up when the Farm Board
began lending 163i cents a pound on cotton in its stabilization operations.
Although confident that permission to use the charter could be obtained
from the Mississippi organization, officials found in it certain restrictive
clauses not suited to their purposes.
It is probable, as a result, that the AAA will seek the establishment of a
private corporation under Delaware laws. Stock would be purchased exclusively by the AAA by using part of the $100.000.000 fund made available
to the President under the Agricultural Adjustment Act. This fund was
intended to finance the establishment of the adjustment machinery until
proceeds from processing taxes would be sufficient for the purpose.

On the same day (Sept. 25) the following announcement
was issued by the Department of Agriculture:
In an effort to expedite the advance of 10 cents per pound to cotton
growers on the current crop, Oscar Johnston, Director of Finance, of the
AAA. has called a conference for Wednesday morning (Sept. 27) of cotton
co-operative executives, cotton factors and others engaged in the buying
and marketing of cotton.
Mr. Johnston was designated by George N. Peek, Administrator of the
AAA,to represent this administration in working out the details of making
the loans to cotton farmers. Conferences were held during the week-end by
Mr. Johnston and representatives of the RFC and the FCA.
"We are developing a mechanism that will make these loans available to
cotton farmers with the minimum delay," Mr.Johnston said. He explained
that he had invited those agencies which engage in marketing and selling
of farmers' cotton to the Wednesday conference here for the purpose of
securing their co-operation in the effort to make these loans immediately
available to the farmer.

Loans to producers under the Government 10 cent cotton
program are to bear 4% interest, it was revealed on Sept.
27 in a tentative plan for placing the advances into immediate
operation, laid before cotton interests by Oscar Johnson,
financial administrator of the AAA. The Washington
correspondent of the New York "Journal of Commerce"
reporting this added that a complete program calling for the
set-up of a Federal Commodity Credit Corporation to pass
the RFC funds on to producers through the Federal Reserve
banking system, had been prepared by the financial administrator for the conference of cotton factors, shippers, cooperative marketing association representatives and others
in the industry. Continuing, the dispatch stated:
It was Indicated that the program would be made effective with only
slight changes that might be made later.
Wallace Approval Necessary.
The FCCC is to be set up through an agreement with the Secretary of
Agriculture under the Agricultural Adjustment Act.
The loan agreement will provide for 10c. a pound on all cotton classing
%-inch or better, low middling or better in grade: Sc. on low middling
or better but less than h-Inch: and on lower than low middling, "if made
at all," shall be made at a ratio determined by the Credit Corporation.
Full loans are to be made only on cotton in Federal or State licensed
warehouses, class BB or better. On cotton in licensed warehouses below
class BB an appropriate deduction is provided from the full loan on account
of increased insurance charges.
Borrowers may not sell pledged cotton without fully liquidating the
loan against it, including all costs and expenses incident to the loan.
Provision for Call.
The Credit Corporation may call the loan and require payment If the
market on middling 74-Inch cotton is 15c. or over, on the average spot
market price. Otherwise, loans are to extend to June 1 1934.




Sept. 30 1933

Loans are to be made to producers only, on notes to be determined by
the Credit Corporation, which will obligate the borrower to co-operate
with the AAA cotton acreage reduction program for the coming year.
Storage charges, interest charges and commissions will be payable from
the proceeds derived from the sale of the cotton and will have preference
over the principal obligation, provided the commission for selling and
handling is not over 3% of the gross sale price of the cotton and the Other
charges are usual.
Loans are to be made through co-operatives, cotton factors or licensed
warehouses in which the cotton is stored, and these lending agencies are
to certify the grade of the cotton. Warehouse receipts are to be used as
collateral.

The Government's plan to lend to cotton farmers 10 cents
a pound on their holdings of this year's crop was conditioned
on the acceptance by the growers of the program of the
AAA for reducing the crops of 1934 and 1935. The advices
to this effect were contained in a dispatch Sept. 22 from
Washington to the New York "Times" which in part also
said:
Considered the most definite step taken by the Administration to stimulate commodity prices to their pre-war level, the offer involves potential
loans of $400,000.000 should all farmers still in possession of their 1933
cotton take advantage of it.
The agreement which planters must make is to reduce planting next
year by 40% under the acreage of the last five years and to reduce plantings
of 1935 by not more than 25% of the same base period. This would permit
plantings in 1934 of about 25,000,000 acres, as compared with 41,000,000
acres this year, when the prospective crop is 12.400,000 bales after the
destruction of 25% of the crop.
Higher Prices the Goal.
In entering upon this program, the Administration hopes to reduce
the cotton production next year to a point where there will be no heavy
surplus and higher prices will result.
Pointing to the recent rapid rise in retail prices of consumers' goods
under the National Recovery program, Secretary Wallace said:
"We don't want the farmer to get hooked in the next two or three months."
The 10 cents a pound assured to growers represents an increase over
prevailing market prices of about a cent a pound. This is because the
loans will be made against cotton "on the farm" where there is a differential
of about a cent a pound under market prices.
This, the second notable step taken by the administration this week to
Increase commodity prices is supplemental to the policy of buying cotton,
foodstuffs and other staple supplies for distribution among the destitute
unemployed announced yesterday by the President. The direct relief
program will represent an expenditure of 175,000,000 and will be swiftly
organized.
Expects Trade Stimulation.
Both moves were characterized by the President as a form of inflation
intended to aid the producers and stimulate prosperity, and came as the
administration's answer to urgings by the recent cotton conference here
for immediate inflation of the currency, repeal of the processing tax on
cotton and the Pegging of prices for that commodity at 20 cents a pound.
After the cotton farmers had suppressed their pleas for currency expansion, the President agreed to consider their request for a move to stimulate
prices.

In the Washington account Sept. 22 to the New York
"Herald Tribune" it was stated that the cotton loan plan,
not dissimilar to the costly and futile pegging operations:of
the Federal Farm Board, but based, Administration officials
believe, on the sound ground of controlling future production, was announced after a White House conference.
From that account we also quote:
Those participating in the conference were:
Henry A. Wallace, Secretary of Agriculture; George N.Peek, Agricultural
Adjustment Administrator: Lewis W. Douglas, Director of the Budget, and
Senator John H. Bankhead, Democrat, of Alabama, spokesman for the
cotton inflationist group which has been meeting in Washington for several
days.
The cotton group managed to see the President yesterday, after it had
withdrawn its demand for outright inflation, a move that resulted in the
retirement from the group of Senator Elmer Thomas, Democrat, of Oklahoma, who had insisted upon inflation as the only method of reaching the
farm price situation everywhere.
Announcement of the cotton loan plan was made at the White House,and
its details were disclosed later by Secretary Wallace and Administrator
Peek, together with the program from the cotton acreage reduction campaign for next year, seeking a reduction of planting to not more than
25,000,000 acres. The crop sown this year of 41,000,000 acres was reduced
by the "turn-under" campaign carried out by the Administration to
approximately 31.000,000 acres, with an estimated yield of 12,000,000 bales.
On the basis of the ginnings to date from the present crop, which for the
most part Is being picked now,the experts of the Department of Agriculture
estimate that there are more than 8,500.000 bales still on the farms.
It Is not believed that anything like this total amount will be made
collateral by farmers for loans as the program to advance 10 cents a pound
now Is designed as a price-pegging operation. The expectation is that when
cotton advances to more than 10 cents the demand for loans will cease.
It is not expected at all, Secretary Wallace said to-day, that the government will buy the entire cotton crop or any major portion of it at 10 cents
a pound or $50 a bale. In their original demand, the cotton inflationist
group visualized 20
-cent cotton as the result of inflation, and if that did not
work, asked that the government buy 50% of the 1933 cotton on farms at
15 cents on the condition that the seller would pledge an acreage reduction
in 1934.
"In simple language," said Secretary Wallace, who is confident of higher
prices for the staple. "It is a plan to get for the Southern cotton grower a
price for cotton before it leaves his hands. I doubt if it will be necessary
to lend a large sum of money."

The proposals for cotton price fixing at 20 and 15 cents
were referred to in these columns Sept. 23, pages 2177-2179.
Cotton Loans at 10 Cents Are Above the Present Market—Nine Cents a Pound on the Farm.
The following is from the New York "Times" of Sept. 23:
The differential In the price of cotton from plantations to markets varies
from 25 to 40 points between the principal Southern ports and the interior,

Volume 137

Financial Chronicle

so that a farm value of about 9 cents a pound is indicated by yesterday's
prices.
The spot prices in the South ranged from 9.01 cents a pound at Little
Rock to 9.60 cents at New Orleans, with Houston and Galveston quoting
9.55 cents. The New York spot price was 9.80 cents a pound, about X
cent higher than in the Southern ports.
Cotton futures here were strong yesterday, the markets having received
a variety of reports as to what the Government might undertake for the
solution of the cotton growers' problem. October cotton closed at 9.61
cents, against 9.43 to 9.46 cents at the end of business on Thursday. and
December cotton was 9.85 cents, against 9.65 to 9 68 cents the day before.
Futures recently have been above 10 cents a pound on the markets, a
sharp rally on Tuesday having set the best closing levels of the week at
10.27 to 10.28 cents a pound for the October delivery and 10.50 to 10.52
cents for the December delivery.
At the same time practically all Southern ports quoted cotton slightly
over 10 cents a pound, and the New York spot price was 10.45 cents,
making the value to the farmer a shade less than the 10
-cent level now
established as the loan value on farm cotton by the Government. The
highest level reached by the New York spot price this year was 11.75
cents, on July 18, corresponding roughly to 11 cents a pound on the
plantation

Accurate Cotton Statistics Suggested as Means of Easing
Pressure on Growers.
Statistics as a possible means of relief for cotton farmers
are suggested by State Senator Shelby Fletcher, who is an
important North Alabama cotton grower and mill operator.
We quote from Birmingham (Ala.) advices, Sept. 22, to the
New York "Times," which likewise said:
Senator Fletcher believes the total number of bales of cotton in the
country to-day may be considerably less than is indicated by Department
of Agriculture estimates. These figures, be points out, are obtained by
adding to the number of bales ginned each year, the number computed to
have been carried over from the preceding year, and he suspects that the
carry-over computations have been used for so many years now that numerous errors may have been multiplied. Many things, he believes, can have'
happened to both the figures and the cotton. As one of Alabama's representatives at the cotton conferences in Washington, he is urging a complete
count of every bale in the country.
"For years," he told newspaper men in Montgomery recently, "we have
been figuring a carry-over from the last year. The carry-over figures have
grown. But we do not know whether there are as many actual bales of
cotton as the carry-over figures indicate. I would not be surprised if an
accurate census count of every bale In the country did not seriously cut
down the indicated total."

Continued Improvement Noted in German Cotton Mills.
Improvement in the German cotton spinning mills was
maintained during August, although new orders registered
a considerable decline according to advices from Co,,sul
W. A. Leonard, Bremen, made public by the U.S.Commerce Department. However, it is pointed out that the
majority of the mills are reported to have orders on hand to
continue operations at the present increased level for at least
two months. An announcement issued by the Commerce
Department under date of Sept. 22 continued:
Conditions in the German cotton weaving mills, the report shows, are
similar to those in the spinning mills with business on hand sufficient to
enable present operations to continue for the next few months.
Demand for cotton goods and yarns during August is reported to have
shown a decline when compared with the immediate preceding months. It
is stated that an appreciable decline was noted in the demand for flag and
uniform material. The demand for cotton goods is expected to increase
during the coming months since orders for autumn and winter articles have
been placed in few instances and only for small quantities. The demand
for cotton yarns is reported to have shown a decline when compared with
the immediate preceding months. Mills producing fine yarns reported a
slight improvement in sales.
The underwear and glove industries reported that the receipt of orders
during August continued to be good.
The hosiery industry reported operations to have continued at the same
level as in the preceding months.

Decrease Reported in Cotton Business During August
in Bremen.
Business in the Bremen cotton market registered a marked
decrease in August as compared with months immediately
preceding, according to Consul W. A. Leonard, in a report
made public by the U. S. Commerce Department, Sept. 22,
which also stated:
Local cotton merchants state that after the heavy buying and price
fixing during the months of June and July, a reaction set in during August
when spinners practically withdrew from the market. It is stated that
whereas in former months spinners called forward purchases before date of
delivery, they now request postponement of their purchases to a later date.
The demand for raw cotton during the month continued to be chiefly for
medium grades of staple length. The demand for low grades declined somewhat which is a usual situation at the beginning of a season.
Local cotton merchants state that the demand for Egyptian cotton continued quiet as was the case in the preceding months. Activity in the
market for Indian cotton is reported to have declined somewhat during
the month.

British Cotton Prices—United States Product Up
327 % from 1932—Wheat Gains.
4
The New York "Times" reported the following from
London, Sept. 23:
The current price of American middling cotton on the British market is
5.42d. a pound which is slightly below the 6.07d. price of a year ago; but
the present price is 32X% above the lowest of 1932, which was 4.08d.. on
on June 1. During the violent fluctuations on the New York cotton
market last July, Liverpool remained relatively steady.




2367

For wheat the Liverpool market's low price was 4s. If. in February,
but the British price has subsequently risen 2534% from that figure.

Egyptian Exports of Cotton Lower During Cotton
Year 1932-33 Than Preceding Year—France, Germany and Poland only Countries to Increase
Demand.
Exports of cotton from Egypt during the cotton year
1932-33 amounted to 862,000 Egyptian bales of about
750 pounds, compared with 982,000 bales during the preceding year, according to Alexandria trade reports received
by the Bureau of Foreign and Domestic Commerce. An
announcement issued Sept. 27, in noting this, further said:
The decline was general with the exception of France. Germany and
Poland which countries took more Egyptian cotton this season than last.
Exports to Great Britain amounted to 306.000 bales against 363.000
bales last season; India. 18,000 bales against 50.000 bales; Italy, 65.000
bales against 83.000 bales; Japan, 52.000 bales against 59.000 bales; Spain,
38.000 bales against 45,000 bales; Switzerland, 30,000 bales against 32.000
bales; and the United States, 41.000 bales against 48.000 bales.
Exports to France amounted to 131.000 bales against 100,000 bales
last season; Germany. 109.000 bales against 106,000 bales; and Poland.
13.000 bales against 11,000 bales.
Exports to Hungary decreased to 2,117 bales from 15,656 bales last
season but the large exports last season were brought about mainly by
credits granted by the Egyptian Government to Hungarian spinners.
No exports were registered to Russia against 13.378 bales exported in
the 1931-32 season,
The exports of Sakellarides amounted to 255,000 bales, representing a
decline of 8% from the 1931-32 shipments; exports of Ashmouni amounted
to 475,000 bales, a decline of 14%;and exports of Mon amounted to 33,000
bales, a decline of 40%.

License Requirement for Dyestuffs Imported into the
United Kingdom—Recommended to Be Continued.
The United Kingdom Import Duties Advisory Committee
has recommended the continuance of the Dyestuffs Act
requiring licenses for dyestuffs and intermediate products
(but exempting colors and coloring matters, including lake
pigments, artists' colors and printers' inks) imported into
the United Kingdom, and the removal of the import duty
of 10% ad valorem on dyestuffs admitted under license,
according to a cablegram received in the U. S. Department
of Commerce from Commercial Attache Lynn W. Meekins,
London. An announcement issued by the Commerce Department Sept. 14, from which the foregoing was taken
added:
The Dyestuffs Act of 1920 prohibited the importation into the United
Kingdom (except under license issued by the Board of Trade) of all synthetic
organic dyestuffs, colors, and coloring matters and all organic intermediate
products used in the manufacture of such dyestuffs, colors and coloring
matters. The act was originally scheduled to expire on Jan. 15 1931.
but its enforcement has been extended annually.

Japanese Dye Industry to Receive Government Aid
300,000 Yen Set Aside for Encouragement of
Production.
A policy designed to make Japan self-sufficient in the
matter of dye-stuffs has been determined by the Government,
according to advices to the U. S. Commerce Department
from Assistant Trade Commissioner Donald W. Smith,
Tokyo. The report, according to an announcement issued
by the Commerce Department on Sept. 21, further pointed
out:
The tentative budget of the Ministry of Commerce and Industry for the
next fiscal year contains an item of 300.000 yen,to be used for the encouragement of production of 28 different kinds of special dyes. Most of this
amount will be given to the Institute for Industrial Research and the
chemical branches of the Imperial universities.
The Ministry of Commerce and Industry also plans to give substantial
grants to firms engaged in the production of dyestuffs, during the next
fiscal year.
Imports ofsynthetic dyes Into Japan during 1932 were valued at 9.066.438
yen. Ofthis total the United States accounted for 1,157.000 yen; Germany,
4,959,000 yen. and Switzerland, 2,025,000 yen. Imports of dyestuffs
into Japan from the United States consists chiefly of indigo and direct
cotton dyes.

Petroleum and Its Products—Texaco Supports Crude
Oil Allowable Reduction Ordered by Ickes with
Higher Prices—Dollar-a-Barrel Crude Level Established in Wide-Spread Advances—Mid-Continent and Texas Fields Benefit—All Major Buyers
Swing Into Line with Higher Prices.
The Texas Corp., followed by all major buyers in the
Mid-Continent and Texas fields, boosted prices in these
fields from 3 to 11 cents a barrel, firmly establishing a
dollar-a-barral level as Secretary Jokes, Petroleum Code
Administrator, slashed daily crude oil production allowables
for October.
Under the revised price schedule, established late Thursday by Texaco and met the following day by all major
factors, Oklahoma and Kansas top grade prices are now
$1.08 a barrel for 90-gravity and over. A dollar-a-barrel
level was established for 36.
-36.9-gravity, considered the
average gravity produced in the Mid-Continent fields.

2368

Financial Chronicle

The.company's increase pushed East Texas postings up
10 cents a barrel to $1 a barrel with Texas Panhandle prices
also moving up 10 cents a barrel. Gulf Coast crude was
raised 11 cents a barrel to $1.12 for 40-gravity and above.
"The Secretary of the Interior, with the support of the
State Commissioners," the company commented in announcing the advances, "has succeeded in effecting a substantial reduction in the output of crude oil and has thereby
rendered a distinct service to the industry. Still further
reductions, however, are necessary in order to bring production into balance with consumption, and we believe
that the industry will be able to co-operate in effecting this
balance. It will be easier to procure 100% cc-operation
from the producers if they feel that an increased price will
accompany a reduced output."
In Conroe field, the advances ranged from 3 to 8 cents
a barrel with oil of 35 degrees at $1.07 a barrel, up 8 cents,
the advance narrowing down to 3 cents on 40-gravity and
above, posted at $1.12. Pric3s of 10 cents a barrel were
posted in West Texas, New Mexico, Texas Panhandle,
Darst Creek, Duval Country, Saxet and Great Fields, and
Smackover, Arkansas, while the advance was 8 cents a
barrel in the Darst Creek area.
The rwised production allocation announced by Secretary Ickes, effective Oct. 1, lowered the allowable of California, Texas and Oklahoma, the "big-tbree," and provided
that excess production in September must be charged
against the October total. Allowabla output was incraased
slightly for Kansas and Oklahoma with amounts in the.
other States and areas holding unchanged.
While under the new schedule daily allowable output
during October is reduced to 2,337,500 barrels from 2,409,700
barrels, its provisions provided for a sharper cut in actual
production by wells than the 72,200-barrel slash. The new
ruling authorizes the withdrawal of 95,000 barrels of crude
from storage in five States, but the withdrawal must be
deducted from the total allowable in those States.
September production in excess of the total allocation was
about 77,000 barrels, which, combined with the 72,200barrel reduction in daily allowable total output, and the
95,000 barrels allowed for withdrawals from storage, would
result in a dip in the total flow from wells of approximately
244,200 barrels daily.
Some form of diciplinary punishment was indicated for
violators of the allowable total posted earlier this month by
Secretary Ickes in Washington dispatches which have reported that he was keeping his eye on the situation and would
take action at the proper time.
The Ohio Oil Co., effective immediately, advanced the
price of Illinois, Princeton and western Kentucky grades of
crude oil 11 cents a barrel and Lima 10 cents yesterday
(Friday).
Members of the Texas Railroad Commission were enjoined
late yesterday from forcing 28 East Texas refiners to make
reports of their operations and transportation of crude oil
and its products by a writ issued by Judge J. S. Hutcheson
and Judge W. L. Grubbs, sitting as Federal Court at Longview. The Commission also was denied the right to examine
the books and records of the plaintiff companies.
The Judges pointed out, however, in making the ruling
that they did not intend to affect the rights of the Commission and the Attorney-General and other officers to
enforce the statutes which prohibit the purchase, transportation or handling of crude oil produced in violation of
orders. They also said that the plaintiffs must continue to
furnish approved tenders before any oil is accepted for
purchase.
Price changes follow:

-The Texas Corp. posted advances ranging from
Thursday, Sept. 28.
Texas fields.
3 to 11c. a barrel throughout the Mid-Continent and
-The Stanolind Crude Oil Purchasing Co., subsidiary
Friday. Sept. 29.
the Sinclair-Prairie Oil Marketing Co..
of the Standard 011 Co. of Indiana;
subsidiary of the Consolidated Oil Corp.: the Magnolia PetroleumCo..
Co.and the Humble
subsidiary of the Socony-Vacuum Corp.; the Carter Oil
New Jersey:
011 & Refining Co., subsidiaries of the St ndard Oil Co. of
Pipe Line Co.. the Gulf Refining Co. of
the Tidewater Oil Co.; the Gulf
by Texaco.
Louisiana. and the Sun Oil Co.. met the advances announced
-The Ohio Oil Co. posted advances of 11c, a barrel
Friday. Sept. 29.
grades of crude oil
In the price of Illinois. Princeton and Western Kentucky
with Lima being advanced 10c. a barrel.
Prices of Typical Crudes per Barrel at Wells.
(All gravities where A. P. I. degrees are not shown.)
$ .71
$2.35 Eldorado. Ark.. 40
Bradford. Pa
1.03
1.20 Rusk. Tex., 40 and over
Corning, Pa
.60
1.08 Salt Creek, Wyo., 40 and over
Illinois
.48
1.23 Darst Creek
Western Kentucky
.90
Okla., 40 and above... 1.08 Midland District, Mich
Mid-Cont.,
1.10
Hutchinson, Tex., 40 and over.... 1.03 Sunburst, Mont Calif.,40 and over 1.34
1.03 Santa Fe Springs.
SPindletOp, Tex., 40 and over
1.00
.75 Huntington, Calif., 26
Winkler, Te
1.82
.70 Petrolla. Canada
Smackover, Ark., 24 and over




Sept. 30 1933

-CRUDE OIL ADVANCES STRENGTHEN
REFINED PRODUCTS
MID-WEST BULK GASOLINE MARKET-LOCAL COMPETITIVE CONDITIONS FORCE CUT IN SERVICE STATION
-OUTPRICES OF GASOLINE IN TWO SOUTHERN CITIES
LOOK IMPROVED.

Bulk gasoline prices in Chicago, which had been easy all
week under continued liquidation of supplies bought in anticipation of Government fixing of crude oil prices at higher
levels, strengthened on the increase in crude prices although
the price level held unchanged. The low-priced offerings which had been in marked evidence all week disappeared from the market Friday morning
and the bulk of the movement of low octane gasoline held at
434 to 43/i cents a gallon. With low octane gasoline avail4
able at 33 cents a gallon in East Texas and selling freely at
4 cents a gallon in Oklahoma, the outlook had been rather
dismal before the higher crude postings.
Mid-west distributing circles hold that higher prices will
develop within the next few days in view of the higher crude
prices. At any rate, they pointed out, the market is freed
from the pressure exerted by buyers liquidating stocks.
This, while the price of gasoline held largely unchanged was
highly unsettling and little activity was reported.
Gasoline originating at small refineries in East Texas and
distributed at low prices was held responsible for the 1 cent a
gallon reduction in service station prices of premium and
ethyl grades of gasoline posted Wednesday in Houston by
the Humble Oil and Refining Co.and other major marketers.
The new prices in Houston area are 183' cents and 203/
cents a gallon, respectively, for premium and ethyl grades,
including 53 cents a gallon in taxes. Third-grade gasoline
held unchanged at 163/i cents a gallon.
Friday saw a 1-cent a gallon reduction posted in servcie
station prices in Louisville, Ky., by the Standard Oil Co.
of Kentucky and other major marketers, with the market
reported flooded with stored gasoline. The new price schedule
holds ethyl at 21 cents a gallon, regular at 19 cents and thirdgrade at 173. cents a gallon, including 5 cents State and
13' cents Federal tax.
Continued strength in the Gulf Coast markets was refleeted by firmness of the price structure in the local market.
Price advances in the former area would most certainly be
followed by like advances in the New York market, trade
circles contend.
Prices here, however, held firm during the week with good
demand reported. The reports from the Mid-West markets
of liquidation of supplies and offerings of low-priced gasoline had a slightly bearish effect on the market, although
the strengthening of the Chicago market following the crude
oil advances lifted this depressing influence.
Trade cirlces are interested in the stiffening of the export
demand for American gasoline which has been reflected in
increased activity in the Gulf Coast markets. Soviet
Russia is now turning to America to fill her motor fuel
requirements, according to trade reports, and is also apparently unable or unwilling to furnish adequate supplies to
her European markets. In some circles, it is reported that
Soviet Russia apparently desires to conserve its petroleum
resources in view of unsettled world conditions and consequently American refiners and exporters may expect to reap
the benefit in increased demand abroad for American motor
fuel.
With trading in other refined products in the local markpt
largely routine, Grade C bunker fuel oil was in good demand
at $1.10 a barrel, refinery, while Diesel oil was well held
at $1.95 a barrel, same basis. Domestic heating oils continued strong despite the recent increase in prices.
Demand for water white kerosene has Picked up somewhat, aided by seasonal demand, and it is moving along in
good fashion at from 534 to 53/i cents a gallon.
Pennsylvania lubricating oils are in slightly better demand,
with the price list holding firm.
Price changes follow:
-The Humble 011 & Refining Co. and other
Wednesday, Sept. 27.
major marketers late Tuesday reduced service st %Lion prices of premium
and ethyl grades of gasoline 1 cent a gallon to 18% cents and 20M cents.
respectively, including 5M cents a gallon in taxes.
-The Standard 011 Co. of Kentucky, Stoll Refining
Friday. Sept. 29.
Co. and other marketers reduced the price of gasoline 1 cent a gallon to 21
i
,
cents for ethyl, 19 cents for regular and 173 cents for third grade.IncludIng
5 cents State and 1M cent Federal tax.
Gasoline Service Station, Tax Included.
New York
Atlanta
Baltimore
Boston
Buffalo
Chicago
Cincinnati
Cleveland

$ 185
19)
203
185
193
165
.21
.21

Denver
Detroit
Houston
Jacksonville
Kansas City
Louisville
Minneapolis
New Orleans

$.195
156
185
.20
14
19
159
193

$ 14
Philadelphia
San Francisco:
.166
Third grade_
Above 65 octane- .21
23
Premium
145
St. Louis

Volume 137

Financial Chronicle

Kerosene, 41-43 Water White, Tank Car, F.O.B. Refinery.
New York:
Chicago
$.0234-.0334 I New Orleans,ex_ --3.0314
(Bayonne)
$.0534 I Los Ang.,ex_ .0434-.06
Tulsa
.0434-.0335
North Texas
.03
Fuel Oil, F.O.B Refinery or Terminal.
N. Y.(Bayonne):
California 27 plus D
Gulf Coast C
$ .95
Bunker C
$1.10
8.75-1.00 Chicago 18-22 D_ .4234-.50
Diesel 28-30 D
1.95 New Orleans C
.80 Philadelphia C
.85
Gas Oil, F.O.B. Refinery or Terminal.
N.Y.(Bayonne):
I Chicago:
I Tulsa
L0134
28 plus G 0_3.033.1-.04 I 32-36 GO
$.0134 I
U. S. Gasoline, Motor (Above 65 Octane), Tank Car Lots, F.O.B. Refinery.
N. Y.(Bayonne):
N. Y.(Bayonne):
Chicago
$ 05-.0534
Standard 011 N.J.:
Shell Eastern Pet_13.0675 New Orleans,ex_ .04-04)4
Motor, U. S__-3.07
New York:
Arkansas
04-.0434
62-63 octane-. .0625
Colonial-Beacon._ .0650 California
05-.07
vStand. Oil N. Y__ .07
:Te MS
0675 Los Angeles, ex_ 0434-.07
Tide Water 011 Co .07
Gulf
0625 Gulf ports
05-.053i
:Richfield 011(Cal.) .07
Republic Oil
0650 Tulsa
05-.0534
Warner-Quin. Co_ .07
Sinclair Refining_ .0634 Pennsylvania__
.0534
:Richfield "Golden." z"Fire Chief,' 8.07. v Long Island City.

Texas Company Initiates Sweeping Increases in Crude
Oil Prices Throughout Southwest-East Texas
Field Oil Quoted $1 Flat
-New Schedule for Oklahoma Ranges from 84 Cents to $1.08 a Barrel
Many Leading Companies Follow.
Sweeping crude oil price advances were inaugurated by the
Texas Co. throughout the southwest yesterday morning
(Sept. 29). The Texas Co., which is one of the leading in-.
dependent oil companies, named a flat figure of $1 a barrel for
crude oil in the East Texas field. A few months ago the
Texas Co. was posting a price of 10 cents a barrel in this
field. Schedules in other fields, reported in the New York
"Journal of Commerce" of Sept. 29 by Harry A. Rapp,
follow:
In Oklahoma the new schedule, on a gravity basis, ranges from
84c. a
barrel for 28 gravity and above, with a 2c. spread, fixing 40 degrees gravit
at $1.08 a barrel, an increase of 11c. a barrel, in all grades and bringing
the
top level to within 3c, a barrel of the long expected price of a $1.11 a barrel.
Other increases announced by the Texas Co. include: advances of from
3c. to 11c. a barrel, in the Conroe field, the price now ranging from $1.07
a
barrel for 35 degrees gravity with a lc.spread to $1.12 a barrel. In Winkler
County, the price was boosted 10c. a barrel to 75c., while Crane and Upton
counties were raised 10c. to 70c. a barrel.
North Texas, north central Texas and north Louisiana are marked up 11c.
a barrel based on 79c. a barrel for below 29 degrees gravity with a 2c. spread
up to 40 degrees gravity and above which will be $1.03 a barrel.
Is Gulf Coast crude prices were increased 11c. a barrel, while Gray, Carson
and Hutchinson were advanced 10c. Smackover, Ark., as well as Duval
were raised 10c. Lea County, N. M., was boosted 10c. to
75c.. while
Darst Creek was advanced 8c. to 85c. a barrel.

Many leading oil companies announced yesterday (Sept.
29) that they had fallen in line with the prices posted by the
Texas Co. They included: Subsidiaries of Standard Oil Co.
of New Jersey, Socony-Vacuum Corp., Standard Oil Co. of
Indiana, Consolidated Oil Corp., Tide Water Oil Co. and
Sun Oil Co.

2369

The report for the week ended Sept. 23 1933 follows in
detail:
DAILY AVERAGE CRUDE OIL PRODUCTION. •
(Figures in Barrels.)

Week
Ended
Sept. 23
1933.
Oklahoma
578,550
Kansas
127,150
Panhandle Texas
43,700
North Texas
53.100
West Central Texas
21,850
West Texas
128,600
East Central Texas
46,100
East Texas
470,600
Conroe
73.500
Southwest Texas
44,700
North Louisiana
25.700
Arkansas
32,650
Coastal Texas (not including Conroe). 111,550
Coastal Louisiana
48.500
Eastern (not including Michigan)
94,600
Michigan
28,750
Wyoming
31,000
Montana
6,950
Colorado
2,450
New Mexico
41,900
California
475,100
Total

Week
Ended
Sept. 16
1933.

Average
4 Weeks
Ended
Sept. 23
1933.

564,650
130,100
45,650
54,300
22,2.50
129,250
53.200
550.200
79.550
50,250
25,850
30,950
118,700
48,050
97.600
30,650
31,200
7,550
2.350
41,850
489.300

551,300
390,400
128,550
100.950
45.800
46.650
53,550
48,550
22.150
23.850
145,650
169,850
54,100
53,950
560.850
371.500
83,700
17.350
49,250
54,750
26.050
29,750
31,500
34.000
123,650 126.650
47,950
34,350
96.300
95.800
30,000
24,500
30.100
31,900
7.200
7.300
2.400
2,600
41,750
32.000
494,150
481,900

Week
Ended
Sept. 24
1932.

2,487,000 2,603,450 2,625,950 2.178,550

Toxna

MA 700 1.103.350 1.138.700 913.100
-The figures Indicated above do not Include any estimate of any oil which
Note.
might have been surreptitiously produced.
CRUDE RUNS TO STILLS, MOTOR FUEL STOCKS. AND GAS AND FUEL
OIL STOCKS, FOR WEEK ENDED BEET. 23 1933.
(Figures in Barrels of 42 Gallons Each.)
Daily Refining Capacity
of Plants.
District.

Crude Runs
to Stills.

Reporting.
Potential
Total.
East Coast
Appalachian_ _
Ind., Ill., Ky_
Okla., Kan., Mo.
Inland Texas._
Texas Gulf
Louisiana Gult
North La.
-Ark _ _
Rocky Mountain
California

%

Daily OperAverage. ated.

a Motor
Fuel
Stocks.

Gas and
Fuel Oil
Stocks.

582,000 582,000 100.0 443,000 76.1 13,460.000 9,160.000
150.800 139,700 92.6 103,000 73.7 1,808,000
845.000
436,600 425,000 97.3 367.6100 86.4 6.472.000 5,650.000
462,100 379,500 82.1 265,000 69.8 4,833,000 4,208.000
274,400 161.100 58.7
95,000 59.0 1,259,000 1,830.000
507.500 497,500 98 0 393,000 79 0 6,022,000 7,213,000
162,000 162,000 100.0 125,000 77.2 1,382,000 2,030.000
82.600
76,500 92.6
53,000 69.3
219,000
656.000
80,700
63,600 78.8
798,000
35,000 55.0
718.000
848,200 821.800 96.9 460,000 56.0 13,691.000 98,641,000

Totals week:
Sept. 23 1933_ 3,586,900 3,308.700 92.2 2,339.000 70.7 c49944000 130,951,000
Sept. 16 1933_ 3,586,900 3,308.700 92.2 2.387,000 72.1 49,621,000 130.652,000
a Below are set out estimates of total motor fuel stocks on U. S. Bureau of Mines
basis for week of Sept. 23 compared with certain September 1932 Bureau figures:
A.P. I. estimated on B. of M. basis, week Sept. 23 1933.1s
51,850,000 barrels
U. S. B. of M. motor fuel stocks, Sept. 1 1932
57.592.000 barrels
U.S. B. of M. motor fueld stocks. Sept. 30 1932
52,289,000 barrels
Estimated to permit comparison with A. P. I. Economies report, which Is on
b
Bureau of Mines basis.
c Includes 28,149,000 barrels at refineries. 18.095,000 bulk terminals, in transit
and pipe lines, and 3,700,000 barrels of other fuel stocks.

Secretary Ickes Reduces Daily Allowable Oil Output
from 2,409,700 Barrels to 2,337,500
-Order Lowers
Allocations for Three States and Raises Quotas
Crude Oil Output Declined During Week Ended
for Two.
Sept. 23 1933
-East Texas Figures Off Sharply
Oklahoma Flow Rises-Imports Lower.
Secretary of the Interior Ickes on Sept. 28 ordored a
The American Petroleum Institute estimates that the downward revision of total allowable daily production of
daily average gross crude oil production for the week ended crude oil, under the coda for the peticleum industry. The
Sept. 23 1933 was 2,487,000 barrels, or about 87,000 barrels production allocation which will become effective to-morrow
a day above country-wide allowable figure set by Secretary (Oct. 1) reduced the daily total from 2,409,700 barrels to
of the Interior Ickes. This compares with 2,603,450 barrels 2,337,500, but in addition provid xl for heavier reduction
per day produced during the previous week, a daily average in actual output by wells. He also ordered that 95,000
of 2,625,950 barrels during the four weeks ended Sept. 23 barrels of crude may be withdrawn from storage daily in
and an average daily output of 2,178,550 barrels during the fiva States, but that the withdrawals must be deducted
week ended Sept. 24 1932.
from the total allowable in those States. Details of the
Stocks of motor fuel oil rose 323,000 barrels during the Secretary's order, as contained in Washington advices to
week under review, or from 49,621,000 barrels at Sept. 16 the New York "Journal of Commerce" on Sept. 28, follow:
In cutting the allowable daily production the Secretary decreased the
to 49,944,000 barrels during the week ended Sept. 23 1933.
allocations
In the preceding week inventories fell off 1,292,000 barrels. Production provided for Texas. Oklahoma and California for this month.
quotas for Arkansas and Kansas were increased
Imports of crude and refined oil at principal United States of the areas were left at the same figure made effective for and the rest
this month.
The allocation for Texas was placed at 965,000 barrels, a daily reduction of
ports totaled 515,000 barrels for the week ended Sept. 23,
10.000 barrels from the 975.000-barrel quota allowed this month. The new
a daily average of 73,571 barrels, compared with a daily regulations provide that 40,000
barrels daily
average of 129,000 barrels in the preceding week and a daily withdrawals from crude oil storage stocks. of the October quota may be
Oklahoma's daily quota was set at 495.000 barrels for the coming month,
average of 116,607 for the last four weeks.
a reduction of 45.000
the 540.000
Receipts of California oil at Atlantic and Gulf ports were month. It is providedbarrels from barrels daily barrels allocation for this
that 25.000
of the October quota may
nil for the week ended Sept. 23, against a daily average of be taken in storage withdrawals.
The
69,286 barrels in the preceding week and a daily rate of 25.000 California allocation was cut to 455,000 barrels daily, a decrease of
barrels from the 480.000-barrel quota allowed this month. Of the
44,250 barrels for the last four weeks.
October quota, California may take 15.000 barrels daily
in storage withReports received for the week ended Sept. 23 1933 from drawals.
Arkansas also received an increased allocation. The 29.000-barrel
daily
refining companies controlling 92.2% of the 3,586,900 barrel quota for that State
during September was boosted 4,000 barrels to 33.000
estimated daily potential refining capacity of the United barrels for October, No provision was made for storage withdrawals
in
States, indicate that 2,339,000 barrels of crude oil daily that State.
The Louisiana quota was left at the 70.000
-barrel daily limit for this
were run to the stills operated by those companies, and month, but it was provided that 5.000 barrels
daily might be taken in
that they had in storage at refineries at the end of the week, storage withdrawals.
28,149,000 barrels of gasoline and 130,951,000 barrels of asProduction allocations for the remaining areas were left at the same rate
provided for September: New Mexico, 41,400 barrels daily: Rocky
gas and fuel oil. Gasoline at bulk terminals, in transit Mountains States. 38.900 barrels; Appalachian States, 94,200 barrels,
and
and in pipe lines amounted to 18,095,000 barrels. Cracked Michigan. 30,000 barrels.
gasoline production by companies owning 95.1% of the
To Assign Withdrawals.
Storage withdrawals are to be assigned by the "appropriate State regupotential charging capacity of all cracking units, averaged
latory body to such persons as have received permission from the planning
487,000 barrels daily during the week.
and co-ordinating committee and the approval of the petroleum adminis..




2370

trator to make the withdrawals," it was provided in the Secretary's order.
No storage withdrawals were allocated this month. The order read
further:
"It is hereby further ordered in accordance with Sections 3 and 4 of
in
Article IL of the aforesaid code that excess production or withdrawals
that
any State during September shall be charged against the allowable of
to during subseState for October and the same policy rigorously adhered
quent months."
This provision was interpreted here as making it vitally important to the
industry to aid in blocking "hot oil" shipments in excess of production
allocations.
petroleum
The provision of the first allocation order limiting imports of
imports
and its products to an amount not exceeding the average daily
during the last six months of 1932 were continued.
-.Downward Trend in Steel Production Less Pronounced
-Operations Now at 41% of Capacity-Orders for
-Price of Fin1,000,000 Tons of Rail in Prospect
ished Steel Again Rises.

The launching of a Government-sponsored capital goods
program, the speeding up of public works and a renewed
wave of steel buying, set in motion by price advances, have
put new life into a flagging market, announces the "Iron
Age" of Sept. 28. At the same time the downward trend
in steel production is less pronounced, with a rise of two
points to 46% of capacity at Chicago partially offsetting
three-point declines to 29% at Pittsburgh and to 72% in
the Wheeling district. The National average of ingot output,
at 41%,is identical with the rate of a fortnight ago and two
points lower than the figure of last week. The "Age" adds:

The chief disturbing feature in the iron and steel outlook is the fact that
the continued upward movement of prices, forced by rising costa, has
driven in business considerably in excess of consumers' present needs.
Even the steel fabricating trade, which had long religiously restricted its
purchases to steel requirements for specific projects, is now purchasing
for stock.
The greatest current impetus to steel demand- has been supplied by
advances of $2 a ton on plates and shapes and $3 a ton on bars for the
fourth quarter, which become effective Oct. 1. Covering at lower prices
this week is heavy. Buyers are prompted to get under the wire not only
on account of the advances in base quotations but also because of revised
extras and more stringent contract terms which go into effect next Monday.
In stipulating that contracts for steel shall be as binding as contracts for
pig iron and other materials, the mills are introducing a reform which has
been attempted without success on various occasions in the past. As
long ago as January 1919, the directors of the American Iron and Steel
Institute approved a form of sales contract of the type which has just been
adopted. However, the means of enforcement now available under the code
were not then at hand.
Scrap shows further weakness throughout the country, and price declines
at Chicago and Philadelphia have reduced the "Iron Age" composite for
heavy melting steel from $11.17 to $11.04 per gross ton, the fourth consecutive recession since the last week in August. Notwithstanding this
unfavorable augury, the trend of prices in other primary materials seems
to be definitely upward. Labor disturbances in the western Pennsylvania
coal mines have become chronic and on Oct. 2 code wage scales will become
effective, which will make higher fuel prices inevitable.
The "Iron Age" composite price for pig iron is unchanged at $16.71 a
gross ton, but the finished steel composite has risen from 1.979c. to 1.992c.
a lb., with a further advance due next week when fourth quarter prices on
heavy rolled products go into effect.
As distinguished from billet steel merchant bars, both billet steel and rail
steel reinforcing bars are unchanged from prices recently announced. Rail
steel merchant bars, however, have been advanced $3 a ton,effective Oct. 2.
The steel industry is still making adjustments in selling practices to make
its code workable. It has given Into the pressure of the automobile industry
for a moditcation of the code stipulation that all-rail freight rates be
charged on all shipments of iron and steel, and has arbitrarily fixed freight
charges to Detroit at 15c. per 100 lb. on merchant steel bars and 20c. on
hot-rolled strip and sheets.
Southern producers' differential of 38c. a ton under delivered prices on
Northern pig iron has been restored after having been canceled.
Arbitrary switching charges of 50c. per net or gross ton have been established at all pig iron and steel basing points except Chicago, where the
arbitrary will be 60c.
The Government's capital goods program was bought nearer to realization by a conference between rail makers and President Roosevelt at
Washington on Monday. Close to 1.000,000 tons of rails are reported to
bids.
be ready to be placed upon the submission of satisfactory competitive
Steel companies did not bind themselves to reduce the present rail price of
$40 a ton but it is understood that a concession of possibly $2 a ton may
be made.
The rail program is expected to be followed by Government-sponsored
purchases of railroad equipment.
Public works continue to loom up as an increasingly important prospective
source of tonnage. New structural steel projects, most of them of a public
and
character, total 29.350 tons compared with 14,500 tons last week
mostly in small
24,500 tons a fortnight ago. Structural steel awards,
of
tonnages, aggregate 10,100 tons, the largest total since the first week
August.
tons
Iron and steel exports in August rose to 119,374 tons from 88,311
In July. The principal increase was in the scrap movement. August
total.
Imports, 46.839 tons, underwent a decline of 5,966 tons from the July
THE "IRON AGE" COMPOSITE PRICES.
Finished Steel.
(Based on steel bars, beams, tank plates
Sept. 26 1933, 1.992c. a Lb.
1 979c.3 wire, rails, black pipe and sheets.
One week ago
1 979c.I These products make 85% of the
One month ago
1 965e. United States output.
One year ago
Low.
High.
1.867c. Apr. 18
1 992c. • Sept. 26
1933
1.928c. Feb. 2
1 977c. Oct. 4
1932
1.945c. Dec. 29
2.037e. Jan. 13
1931
2.018e. Dec. 9
2.273c. Jan. 7
1930
2.2830. Oct. 29
2.3170. Apr. 2
1929
2.217c. July 17
2.2860. Dec. 11
1928
2.2120. Nov. 1
2.402c. Jan. 4
1927
Pig Iron.
basic iron at Valley
Sept. 26 1933, $16.71 a Gross Ton. (Based on average of irons at Chicago.
$16.71 furnace foundry
One week ago
Philadelphia, Buffalo, Valley, and Bir16.71
One month ago
mingham.
13.64
One year ago




Sept. 30 1933

Financial Chronicle
1933
1932
1931
1930
1929
1928
1927

High.
$18.71 Aug. 29
14.81 Jan. 5
15.90 Jan. 6
18.21 Jan. 7
18.71 May 14
18.59 Nov. 27
19.71 Jan. 4

Lou.
313.58 Jan. 3
13.56 Dec. 6
15.79 Dec. 15
15.90 Dec. 16
18.21 Dee. 17
17.04 July 24
17.54 Nov. 1

Steel Scrap.
Based on No. 1 heavy melting steel
Sept. 26 1933, $11.04 a Gross Ton.
$11.17 quotations at Pittsburgh, Philadelphia,
One week ago
12.00 and Chicago.
One month ago
7.75
One year ago
Lou.
High.
88.75 Jan. 3
$12.25 Aug. 8
1933
6.42 July 5
8.50 Jan. 12
1932
7.62 Dec. 29
11.33 Jan. 6
1931
•11.25 Dee. 6
15.00 Feb. 18
1930
14.08 Dec. 3
17.58 Jan. 29
1929
13.08 July 2
16.50 Dec. 31
1928
13.08 Nov.22
15.25 Jan. 11
1927

A $2 per ton advance in plates and shapes and $3 in bars
becoming effective Sept. 30, fourth-quarter contracting for
these heavy finished steel products is expected to be brisk
this week, states the magazine "Steel" of Sept. 25, which
adds:
Accompanying this rise is a revision of terms calculated to make a contract for heavy steel as ironclad as a contract for pig iron long has been.
Beginning Immediately, producers will contract on the following basis:
(1) For a definite tonnage to be completely specified in time for shipment before the last day of the quarter: (2) for a tonnage from which
the buyer may deviate up 25% or the mill down 25%. and (3) for a stated
percentage of a consumer's requirements within a specified maximum. It is
possible that mills also will give protection on identified jobs for 60 days.
The fact that the present 1.60c., Pittsburgh, base on plates, shapes
and bars becomes 1.75c. and 1.80c. Saturday is a spur to coverage. However, there are balancing penalties for under- and over-estimating requirements, the former necessitating open market purchases at advanced levels
and the latter the payment for and stocking of surplus material.
General business still being confused and the fourth-quarter outlook
obscure, buyers normally would tend toward conservatism, but if the
prospect for inflation deepens this week, an investment in materials may
appear more attractive than the conservation of cash. In any event,
demand has been so negligible for several weeks that whatever contracting
develops will represent a marked gain.
An advance at this time is in the face of an ebbing market, which by the
usual tests would not support a price rise, but producers point to sharp increases under the steel code as offering no alternative. Ingot costs alone
have increased $2 per ton, with conversion costs bringing the total almost
to $4, due chiefly to labor and fuel.
During the past week specifications against expiring contracts were so
extensive the national steel rate sank only 1 point to 40%• Chicago mina
gained 4 points to 44% on the strength of rail releases. Youngstown mills
were up 2 points to 48% and Buffalo 3 to 48. Eastern Pennsylvania was
steady at 3534%, Detroit at .55. and Birmingham at 50. Pittsburgh eased
a point to 34, Wheeling 3 to 72. Cleveland 6 to 54. and New England 10 to
86. This week New England will drop 16 points and Pittsburgh 4 points,
Youngstown will gain 2.
Public work is more a factor in the structural market, prospective jobs
including 4,000 tons for Boulder Dam, 3.000 tons each for a bridge at
Quincy, Mass.. and for the Puget Sound Navy Yard, 3,500 tons for a
municipal auditorium at Kansas City, Mo.. and 3,500 tons for Middle
West bridges. Last week's awards were 12,645 tons.
Word from Washington concerning railroad purchases remains indefinite
but some support from this quarter appears certain. The New York Central's distribution of 8.230 tons of rails makes a total of 17.530 released this
year. Thirty-five thousand tons is said to be in prospect from the Santa Fe.
Whether tin plate mills can operate at capacity more than a month longer
rests with can-makers, who may bridge the approaching seasonal letdown
by manufacturing for stock at present prices. A few small lots of cast iron
pipe are coming out of the public works program. Buying of hot-rolled
strip has been a shade broader. Specifications for sheets, especially from
automotive users, have necessitated putting on additional capacity.
Pig iron shipments continue seasonally high. For the New York vehicular tunnel 25.000 tons will be placed shortly. More Indian iron is being sold
in New England. Scarp remains dull, with the easy tendency in prices
dominant. Coal strikes are firming coke quotations.
Merchant rail bars have been put up $3 in conformity with hot-rolled
bars, and cold-finished and alloy bars are likely to advance and retain their
differentials. Hot-rolled sheets No. 10 gage are now quoted at the new
price of 1.75c., Pittsburgh.
"Steel's" index of iron and steel is unchanged at $31.23. The finished
steel composite, however, is up 20 cents to $48.50, while the scrap index is
off 17 cents to $10.71.

Steel ingot production in the week ended Sept. 25 is
placed at a shade above 40%, according to the "Wall Street
Journal" of Sept. 27. This is fractionally over the rate
of 40% in the preceding week and compares with 42%
two weeks ago. The "Journal" further reports as follows:
For the U. S. Steel Corp. thb output is estimated at slightly over 37%,
against 38% in the week before and 40% two weeks ago. Independent
companies are credited with a rate of 42%, compared with a fraction over
41% in the previous week and nearly 4334% two weeks ago.
The following table gives the percentage of production for the corresponding week of previous years, together with the approximate change
from the week immediately preceding:
Independents.
U. S. Sheet.
Industry.
1734+1%
1734+334
1734+234
1932
31-1
27 28-1
1.031
5634+ 34
05 -1
80
1930
79 -2
8514-234
82 -234
1929
85 +4
85 +6
85 +5
1928
62 +2
8534+1%
84 +2
1927

Steel Prices Advanced by All Leading CompaniesBars, Plates and Shapes Raised $2 to $3 a Ton.
Schedules showing increased prices for steel bars, shapes
and plates for the fourth quarter were sent by all the leading steel companies on Sept. 22 to the American lion & Steel
Institute. According to the schedules, bars have been
advanced $3 a ton, bringing the new prices to $1.75 per

Volume 137

Financial Chronicle

100 pounds, Pittsburgh, and $1.80, Chicago. The prices
of plates and shapes were increased $2 a ton, the new quotations being $1.70 per 100 pounds, Pittsburgh, and $1.75,
Chicago, on both products. It was reported that no official
comment has been made with regard to steel rails, which
hold at 0 a ton. From the New York "Journal of Commerce" of Sept. 23 we quote in part:
The advance had been generally expected In trade quarters, as the costs
of production are definitely higher under the National Recovery Administration. It is probable that the prices will hold, as for the first time
the whole Industry is required to post cost data with the American Iron &
Steel Institute, the code administration agency, and is also required to
flie advance notice of price changes.
The industry has complained for the past two years of insufficient tonnage
and low prices. With tonnage substantially above the levels of a year
ago the profit outlook was improved until the higher costs came into effect.
It has not been indicated whether the price advance will do more than
equal the cost increase. The labor cost to the industry is said to have
jumped $100,000,000 as a result of the adoption of the code limiting hours
and setting minimum wages.
Steel men were hoping yesterday (Sept. 22) that considerable business
would be booked before the end of the month, but it was not finally decided
if present prices will hold on such orders.

In its issue of Sept. 29, the New York "Times" said:
Minimum prices on steel plates and structural shapes have been filed
with the American Iron and Steel Institute by all makers of these products
In accordance with the industry's NRA code. The new prices represent
a rise of $2 a ton for deliveries in the last quarter of the year. The advance
was announced last week.
The new prices, with the dates on which they become effective, follow:
Plates.
--$1.80 a hundred pounds, Sparrows Point, Md., effective
Sept. 30; $1.75, Gary, Ind., effective Oct. 1.
Floor I-gates.- 3.20 a hundred pounds. Pittsburgh, effective Sept. 30;
$3.25, Chicago, effective Oct. 2.
Struaural Shapes.
-41.80 a hundred pounds. Buffalo and Bethlehem, Pa.,
effective Sept. 30; $1.85, Birmingham, Ala., effective Oct. 2; $1.70. Pittsburgh. and $1.75, Chicago, effective Oct. 5. Standard sections only,
$2.10. Gulf ports. effective Oct. 5. Wide flange, $2.20. Gulf ports, effective
Oct. 1; $2.35, Pacific Coast ports, effective Oct. 1.
New minimum prices on bars have not yet been announced, although
some makers have made advances of $3 a ton. Until all producers have
adopted the new minimum no change will be made in figures on file with
the institute.

Daily Average Production of Bituminous Coal Again
Declines-Anthracite Output During Week Ended
Sept. 16 Highest Since Last February-August
Figures Show Gain.
Production of bituminous coal during the week ended
Sept. 16 1933 is estimated ay 7,170,000 net tons, a daily
average of 1,195,000 net tons. This compares with 6,510,000
tons in the previous week, in which the Labor Day holiday
was observed, or a daily average of 1,289,000 tons, and
with 6,145,000 tons in the corresponding period last year,
or a daily average of 1,024,000 tons.
Anthracite production in Pennsylvania during the week
ended Sept. 16 1933 was estimated at 1,251,000 net tons,
the highest weekly output recorded since last February,
and compares with 1,019,000 tons in the week ended Sept. 9
1933 and 884,000 tons in the week ended Sept. 17 1932.
During the month of August 1933 production was estimated at 33,190,000 net tons of bituminous coal and 4,396,000 tons of anthracite, as against 29,482,000 tons of bituminous coal and 3,677,000 tons of anthracite in the preceding month and 22,489,000 tons of bituminous coal and
3,465,000 tons of anthracite in the corresponding period in
1932.
During the calendar year to Sept. 16 1933 there were
produced a total of 224,506,000 net tons of bituminous coal
and 33,140,000 tons of anthracite,compared with 196,960,000
tons of bituminous coal and 32,226,000 tons of anthracite
during the calendar year to Sept. 17 1932. The Bureau's
statement follows;

2371

ESTIMATED UNITED STATES PRODUCTION OF COAL AND BEEHIVE
COKE (NET TONS).
Week Ended

Sept. 16
1933.c

Sept. 9
1933.d

Calendar Year to Date.
Sept. 17
1932.

1933.

1932.

1929.

Bitum. coal a:
Weekly total 7,170,000 6,510,000 6,145,000 224,506,000 196,960,060 366,218,000
Daily average 1,195,000 1,289,000 1,024.000
1,028,000
902,000 1,675,000
Pa. anthm. b:
Weekly total 1,251,000 1,019,000 884,000 33,140,000 32,226,000 48,931,000
Daily average 208,500 203,800 147,300
153,100
148,800
226,000
Beehive coke:
Weekly total
16,800
18,800
9,900
584,200
498,300 4,887,500
Daily average
3.133
2,800
1,650
2,643
2.255
22,115

a Includes lignite, coal made into coke, local sales, and colliery fuel. b Includes
Sullivan County, washery and dredge coal, local sales, and colliery fuel. c Subject
to revision. d Revised since last report.
ESTIMATED WEEKLY AND MONTHLY PRODUCTION OF COAL BY
STATES (NET TONS
-000 OMITTED).
Week Ended
Sept. 9 Sept. 2
1933. 1933.
Alabama
Ark.and Okla.__
Colorado
Illinois
Indiana
Iowa
Kansas and Mo.
Ky.-Eastern
Western

Monthly Production.
Aug.
1933.

July
1933.

Aug.
1932.

?al. Yr. to End of Aug.
1933.

1932.

1929,

Michigan
Montana
New Mexico_ _ _ _
North Dakota._ _
Ohio
Pa. (Mural__
Tennessee
Texas
Utah
Virginia
Washington
West Virginia
Southern _ a _ _
.
Northern_b
Wyoming
Jther States_ __ _

188
56
108
541
226
21
75
639
131
24
2
37
20
24
380
1,755
59
15
54
170
22

218
73
132
733
258
40
95
760
173
29
2
43
18
32
458
2,196
92
15
42
202
31

1,425
465
67
6

1,747
523
83
15

Total bit. coal_
Pa.anthracite._

6.510
1,019

8.010 33,910 29,482 22,489 208,602 184,934 343,921
1.234 4,396 3,677 3,465 30,460 30,648 46,062

Total coal__ _ _

7.529

9.244 38.306 33,159 25,954 238,062 215,582 389.983

Maryland

10
153
90
82
2,250
8.690
378
65
168
948
95

840
147
205
2,425
916
150
292
2,815
510
110
8
120
80
60
1,630
8,560
320
65
112
871
85

593
88
270
1,720
754
210
370
2,355
827
81
13
108
85
53
910
5,785
230
51
153
596
96

7,919
2.508
282
15

6,922
1,992
248
5

5,434 45,872 39,369 66,323
1,416 11,952 13,388 23,960
281 2,150 2,427 3.994
84
10
111
127

960
278
374
2,820
1,128
175
417
3.290
665

150

5,637 4874 11,998
1.172
984 3,109
2,914 3,033 5,776
21,896 18,470 37,643
7,899 7,404 11,670
1,686 2,166 2,562
3,073 3,306 4,337
18,129 15,448 29,809
4,503 5,680 9,144
908
895 1,720
159
258
518
1,151
1,182 2,052
745 1,695
697
848
983
922
12,092 7,199 14,594
55,085 47.538 04,715
2.190 2.008 3,526
491
400
751
1,462 1,549 3,047
5,655 4.630 8,296
762 1.024 1,633

a Includes operations on the N.& W.,C & 0., Virginia, K.& M.,and B. C.& G.
b Rest of State, including Panhandle.

25,000 Silk Workers Still on Strike in Paterson, N. J.,
District--Efforts at Mediation Fail and Mills Remain Closed-Estimates Place Cost of Walkout to
City at $500,000 Weekly.
No settlement of the strike of silk workers in the Paterson. N. J. district appeared likely late this week and practically all of the larger mills have remained closed as negotiations between representatives of the employees and employers failed to reach any satisfactory conclusion. On Sept.
27 at a conference between manufacturers and strikers in
the Jacquard branch of the industry it was agreed to appoint a joint committee of eight to seek a wage and hour
accord. On the same day the Associated Silk Workers
Group brought all branches of the strike under one leadership when it appointed a general strike committee to represent broadsilk, jacquards, throwsters and dyers. More than
25,000 strikers will be represented by this committee during
the strike. Meanwhile local business interests have estimated that the walkout is costing the city of Paterson
$500,000 weekly. The unions have recently opened several
relief bureaus to meet the needs of impoverished members.

Current Events and Discussions
The Week with the Federal Reserve Banks.
The daily average volume of Federal Reserve bank credit
outstanding during the week ended Sept. 27, as reported by
the Federal Reserve banks, was $2,392,000,000, an increase
of $28,000,000 compared with the preceding week and of
$141,000,000 compared with the corresponding week in 1932.
After noting these facts, the Federal Reserve Board proceeds as follows:
On Sept. 27 total Reserve bank credit amounted to $2,421,000,000.
an increase of $33,000,000 for the week. This increase corresponds with
an increase of $53,000.000 in member bank reserve balances and a decrease
of $3,000,000 in monetary gold stock, offset in part by decreases of 910,000,000 in money In circulation and $9.000.000 in unexpended capital funds,
non-member deposits, &c., and an increase of $2,000,000 in Treasury
currency adjusted.
Bills discounted increased $3,000.000 at the Federal Reserve Bank of
San Francisco and a like amount at all Federal Reserve banks. The
System's holdings of bills bought in open market show practically no change
for the week. Holdings of Treasury certificates and bills increased $33.000.000. of Treasury notes $2,000,000 and of United States bonds $1,000.010




Beginning with the statement of May 28 1930, the text
accompanying the weekly condition statement of the Federal
Reserve banks was changed to show the amount of Reserve
bank credit outstanding and certain other items not included
in the condition statement, such as monetary gold stocks and
money in circulation. The Federal Reserve Board's explanation of the changes, together with the definition of the different items, was published in the May 31 1930 issue of the
"Chronicle" on page 3797.
The statement in full for the week ended Sept. 27, in comparison with the preceding week and with the corresponding
date last year, will be found on subsequent pages, namely,
pages 2420 and 2421.
Beginning with the statement of March 15 1933, new
items were included as follows:
1. "Federal Reserve bank notes in actual circulation." representing the
amount ofsuch notes issued under the provisions of paragraph 6 of Section 18
of the Federal Reserve Act as amended by the Act of March 9 1933.

g the
2. "Redemption fund—Federal Reserve bank notes," representin
the redempamount deposited with the Treasurer of the United States for
tion of such notes.
deposits—non3. "Special deposits—member banks," and "Special
received
member banks," representing the amount of segregated deposits
from member and non-member banks.
the amount
A new section has also been added to the statement to show
banks.
of Federal Reserve bank notes outstanding, held by Federal Reserve
against
and In actual circulation, and the amount of collateral pledged
outstanding Federal Reserve bank notes.

Changes in the amount of Reserve bank credit outstanding
and in related items during the week and the year ended
Sept. 27 1933 were as follows:
Increase(÷) or Decrease(—)
Since
Sept. 27 1933. Sept. 20 1933. Sept. 28 1932.
133,000,000 +3,000,000 —207,000,000
—27,000,000
7.000,000
2,274,000,000 +36,000,000 +420,000,000
7,000,000 —6,000,000 —7,000,000

Bills discounted
Bills bought
U. S. Government securities
Other Reserve bank credit

000 +33,000,000
TOTAL RESERVE BANK CREDIT-2,421,000,
4 324,000,000 —3,000,000
Monetary gold stock
1,948,000,000 +2,000,000
Treasury currency adjusted
5 595,000,000 —10.000,000
Money in circulation
2,596,000,000 +53,000,000
Member bank reserve balances
non-member
Unexpended capital funds,
503,000,000 —9,000.000
deposits. &c

+180.000,000
+139,000,000
+113,000,000
—10,000.000
+327,000,000
+116,000,000

City and
Returns of Member Banks in New York
Chicago—Brokers' Loans.
the Federal
Beginning with the returns for June 1927,
also commenced to give out the figures of
Reserve Board
as those in
the member banks in New York City, as well
for
on Thursday, simultaneously with the figures
Chicago,
themselves, and for the same week, instead
the Reserve banks
which time the
of waiting until the following Monday, before
covering the entire body of reporting member banks
statistics
ready.
in the different cities included cannot be got
is the statement for the New York City member
Below
for the
banks and that for the Chicago member banks
full statement
current week, as thus issued in advance of the
available until
of the member banks, which latter will not be
City statement, of
the coming Monday. The New York
member
course, also includes the brokers' loans of reporting
e of brokers' loans the present
banks. The grand aggregat
of these
week shows a decrease of $19,000,000, the total
1933 standing at $806,000,000, as compared
loans on Sept. 27
record for all
with $331,000,000 on July 27 1932, the low
these loans have been first compiled in 1917.
time since
,000 to
Loans "for own account" decreased from $715,000
banks"
$997,000,000, and loans "for account of out-of-town
$102,000,000, while loans "for account
from $103,000,000 to
00.
of others" remain unchanged at $7,000,0
REPORTING MEMBER BANKS IN CENTRAL
CONDITION OF WEEKLY
RESERVE CITIES.
New York.
Sept. 27 1933. Sept. 20 1933. Sept. 28 1932.
6,698,000,000 6,742,000,000 6,801,000,000

Loans and Investments—total

Investments—total

Reserve with Federal Reserve Bank__
Cash in vault

_ _ 881,000,000
39,000,000

061,000,000
38,000,000

5,296,000.000
5 244,000,000 5,278,000,000.
763,000,000 761.000,000 829,000,000
388,000,000 388,000,000 273,000,000
73,000,000
67,000,000
69,000,000
1,122,000,000 1,179,000,000 1,270,000,000

806,000,000

Total

715,000,000
103.000,000
7,000,000

400,000.000
20,000,000
5,000.000

825,000,000

425,000.000

292.000,000
531.000,000
133,000,000
275,000,000
Chicago.
1,215,000,000 1,220,000,000 1,214,000,000

Loans—total
On securities
All other
Investments—total
U. S. Government secur ties
Other securities
Reserve with Federal Reserve Bank
Cash in vault
Net demand deposits
Time deposits
Government deposits
Due from banks
Due to banks
Borrowings from Federal Reserve Bank_




879,000,000
37,000,000

543,000,000
282,000,000

701,000,000

698,000,000

767,000,000

342,000.000
359,000,000

342,000.000
356,000,000

445,000.000
322,000,000

514,000,000

522,000.000

447,000,000

299,000,000
215,000,000

300,000,000
222,000,000

253,000.000
194.000,000

374,000,000
32,000,000

355,000,000
28,000,000

229,000,000
17,000,000

1,031.000.000 1.017.000,000
347,000.000 347,000,000
61,000,000
61,000.000

853,000,000
326,000.000
32,000,000

217,000,000
272,000,000

211,000.000
284,000,000

199,000,000
268,000,000

4,000,000

+12,000,000

—267,000,000

Loans and Investments—total-- —16,592,000,000
8,560,000,000
Loans—total

—36,000,000

—710,000,000

3,703,000,000
4,857,000,000

—70.000,000
+34.000,000

—271,000,000
—439,000,000

8,032,000,000

+48,000,000

+443,000,000

U.S Government securIties____ 5,086,000,000
2,946,000,000
Other securities

+42,000,000
+6,000,000

+397,000,000
+46,000,000

1,883,000,000
189,000,000

+7.000,000
—6,000,000

+224,000.000
+15,000,000

10,519,000,000
4,502,000,000
865,000,000

—39,000,000
+18,000.000

+134,000,000
—70,000,000
+314,000,000

1.199.000,000
2,595,000,000

—28,000.000
+6,000.000

—116,000,000
—187,000,000

20,000.000

—2,000,000

—65,000,000

On securities
All other
Investments—total

Reserve with F. R.banks
Cash in vault

Due from banks
Due to banks

Borrowings from Federal Reserve BankLoans on secur. to brokers & dealers: 697,000,000
For own account
102,000,000
For account of out-of-town banks
7,000,000
For account of others

Loans and Investments—total

Increased $6,000.000.
Borrowings of weekly reporting member banks from Federal Reserve
banks aggregated $20,000,000 on Sept. 20, a reduction of $2,000,000 for
the week.
of
Licensed member banks formerly Included in the condition statement
weekly
member banks in 101 leading cities, but not now Included in the
net
statement, had total loans and investments of 3885,000,000, and
00 on Sept. 20,
demand, time, and Government deposits of $912.000,0
y, on Sept. 13.
compared with $871,000,000 and $912,000,000, respectivel
member
A summary of the principal assets and liabilities of the reporting
are included in the statement, together
banks, in 90 leading cities, that
with changes for the week and the year ended Sept. 20 1933, follows:
Increase 1+) or Decrease (—)
Since
Sept. 20 1933. Sept. 13 1933, Sept. 211932.

Net demand deposits
Time deposits
Government deposits

2,297,000,000 2,314,000.000 2,321,000,000
1,057,000,000 1,054,000,000 1,001,000,000

U.S. Government securities
Other securities

On demand
On time

The Federal Reserve Board's condition statement of weekly reporting
member banks in 90 leading cities on Sept. 20 shows a decrease for the
week of $39,000,000 in net demand deposits, and increases of $18,000,000
In time deposits and $12,000,000 in loans and investments.
Loans on securities declined $80.000,000 at reporting member banks In
the New York district and $70,000.000 at all reporting member banks,
and increased $7.000.000 in the Chicago district. "All other" loans increased $9.000,000 In the San Francisco district, $8,000.000 in the New
York district. $6,000,000 In the Chicago district, and $34,000,000 at all
reporting banks.
Holdings of United States Government securities increased $65,000.000
in the New York district and $42,000,000 at all reporting member banks,
and declined $18,000.000 In the Boston district. $6,000,000 in the St. Louis
district and $5,000,000 in the Dallas district. Holdings of other securities

1,731,000,000 1,743,000,000 1,683,000,000
1,613,000.000 1,631,000,000 1,796,000,000
3,354,000,000 3,368,000.000 3,322,000,000

On securities
All other

Due from banks
Due to banks

Complete Returns of the Member Banks of the Federal
Reserve System for the Preceding Week.
The Federal Reserve Board resumed on May 15 the
publication of its weekly condition statement of reporting
member banks in leading cities, which had been discontinued
after the report issued on March 6, giving the figures for
March 1. The present statement covers banks in 90 leading
cities instead of 101 leading cities as formerly, and shows
figures as of Wednesday, Sept. 20, with comparisons for
Sept. 13 1933 and Sept. 21 1932.
As is known, the publication of the returns for the New
York and Chicago member banks was never interrupted.
These are given out on Thursday, simultaneously with the
figures for the Reserve banks themselves, and cover the
same week,instead of being held until the following Monday,
before which time the statistics covering the entire body of
reporting member banks in 90 cities cannot be got ready.
In the following will be found the comments of the Federal
Reserve Board respecting the returns of the entire body of
reporting member banks of the Federal Reserve System for
the week ended with the close of business on Sept. 20:

3,344,000,000 3,374,000,000 3,479,000,000

Loans—total

Net demand deposits
Time deposits
Government deposits

Sept. 36 1933

Financial Chronicle

2372

Borrowings from F.R.banks

G. W. McGarrah Returns from Abroad.
Gates W. McGarrah, former President of the Bank for
International Settlements at Basle, has returned to this
country after being abroad for nine months.
Stock of Money in the Country.
The Treasury Department at Washington has issued the
customary monthly statement showing the stock of money
in the country and the amount in circulation after deducting
the moneys held in the United States Treasury and by Federal Reserve banks and agents. It is important to note
that, beginning with the statement of Dec. 311927, several
very important changes have been made. They are as follows: (1) The statement is dated for the end of the month
instead of for the first of the month;(2) gold held by Federal
Reserve banks under earmark for foreign account is now excluded, and gold held abroad for Federal Reserve banks is
now included, and (3) minor coin (nickels and cents) has been
added. On this basis the figures this time, which are for
Aug. 31 1933, show that the money in circulation at that
date (including, of course, what is held in bank vaults of
member banks of the Federal Reserve System) was $5,612,121,521, as against $5,629,852,526 on July 31 1933, and
$5,692,053,976 on Aug. 31 1932, and comparing with
$5,698,214,612 on Oct. 311920. Just before the outbreak
of the World War, that is on June 30 1914, the total was
only $3,459,434,174. The following is the full statement:

Financial Chronicle

Volume 137
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•Revised figures.
a Does not include gold bullion or foreign coin other than that held by the Treasury,
Federal Reserve banks, and Federal Reserve agents. Gold held by Federal Reserve
banks under earmark for foreign account is excluded, and gold held abroad for
Federal Reserve banks is included.
b These amounts are not Included in the total since the money held in trust against
gold and silver certificates and Treasury notes of 1890 Is Included under gold coin
and bullion and standard sliver dollars, respectively.
c The amount of money held In trust against gold and silver certificates and
Treasury notes of 1890 should be deducted from this total before combining it with
total money outside of the Treasury to arrive at the stock of money In the United
States.
d This total includes $35,633,867 gold deposited for the redemption of Federal
Reserve notes ($1,132,755 In process of redemption, $37,900,584 lawful money deposited for the redemption of national bank notes ($21,041,009 In process of redemption, including notes chargeable to the retirement fund), $8,024,650 lawful money
deposited for the redemption of Federal Reserve bank notes ($492,943 In process of
redemption, including notes chargeable to the retirement fund), $1,350 lawful money
deposited for the retirement of additional circulation (Act or May 30 190S), and
$59,284,381 lawful money deposited soot reserve for postal savings deposits.

e Includes money held by the Cuban agency of the Federal Reserve Bank of
Atlanta.
f The money In circulation Includes any paper currency held outside the continental limits of the United States.
Note.
-Gold certificates are secured dollar for dollar by gold held in the Treasury
for their redemption; silver certificates are secured dollar for dollar by standard
silver dollars held In the Treasury for their redemption: United States notes are
secured by a gold reserve of $156,039,088 held in the Treasury. This reserve fund
may also be used for the redemption of Treasury notes of 1890, which are also secured
dollar for dollar by standard silver dollars held in the Treasury: these notes are being
canceled and retired on receipt. Federal Reserve notes are obligations of the United
States and a first lien on all the assets of the issuing Federal Reserve Bank. Federal
Reserve notes are secured by the deposit with Federal Reserve agents of a !Ike
amount of gold or of gold and such discounted or purchased paper as Is eligible under
the terms of the Federal Reserve Act, or, until March 3 1934. of direct obligations
of the United States if so authorized by a majority vote of the Federal Reserve Board.
Federal Reserve banks must maintain a gold reserve of at least 40%, Including the
gold redemption fund which must be deposited with the United States Treasurer,
against Federal Reserve notes in actual circulation. Federal Reserve bank notes
are secured by direct obligations of the United States or commercial paper, except
where lawful money has been deposited with the Treasurer of the United States
for their retirement. National bank notes are secured by United States bonds except
where lawful money has been deposited with the Treasurer of the United States
for their retirement. A 5% fund Is also maintained In lawful money with the
Treasurer of the United States for the redemption of national bank notes secured

by Government bonds.




2373

Otto H.Kahn and W. W. Aldrich Return From Abroad.
Winthrop W. Aldrich, President of the Chase National
Bank, arrived in New York from Europe on Sept. 29. Otto
H. Kahn of Kuhn, Loeb & Co. also arrived from abroad the
same day.
Gold Output Lower in Transvaal
-Production in
Eight Months 7,414,184 Ounces, Against 7,657,764
a Year Ago-Great Britain Continues to Show Big
Excess of Imports of the Metal Over Exports.
According to London advices Sept. 16 to the New York
"Times" the Transvaal gold output continues to decline
in consequence of the treatment of lower-grade ore which the
high price now obtainable for gold makes possible at a substantial profit. The account continued:
August production of 934.714 ounces compared with 991,322 in August
1932, while every month this year has seen a decline compared with last
year. The total output for the first eight months was 7,414,814 ounces,
against 7,657,764 in the same period of 1932.
British imports of gold in August amounted to £4,392,000. and exports
£7,009.000. This striking excess of imports over exports has been character'Stic of virtually every month this year, imports for eight months totaling
£162,197,000, against exports of only £51,315,000. In the corresponding
period last year imports were E109,000.000 and exports £88,000,000.
Of this year's imports, £46,000,000 came from Transvaal. £22.392.000
from India, £22.190,000 from France, £14,341.000 from Holland, £11,580.000 from Germany, £11,430,000 from Australia. £7,373.000 from Canada,
£9,883,000 from the United States, £2,553,000 from Rhodesia, £1.129,000
from West Africa, £607,000 from Belgium, £720,000 from New Zealand,
£642.000 from Egypt, £672,000 from South America and the remainder
from other countries.
Of the exports. £16,966.000 went to Holland. £16,372.000 to the United
States, £7.946,545 to France. £1,036,000 to Belgium, £857,000 to Switzerland, £407.000 to South America and the remainder to other countries.
The increase in the Bank of England's gold holdings since the beginning
of the year accounts for part of the excess of imports over exports, but large
quantities are being held here in foreign account and represent hoarding
to some extent.

London World's Chief Gold Market.
The importance of London as a world gold market is
revealed in a study completed in the Commerce Department's Finance and Investment Division. The Department
in indicating this on Sept. 13, said:
This study which was made by H. M. Bratter points out that the outstanding position of the British capital as a gold center is due to five principal factors:
(1) Great Britain's leadership and wealth.
(2) The fact that the bulk of the world's new gold is produced in British
countries.
(3) The fact that a large number of regular transportation lines not only
ensure the prompt delivery of gold in London, but also the prompt transfer
from London to practically any part of the world.
(4) Tradition.
(5) The existence of well-established and highly-specialized firms dealing
in bullion.
Because of those factors, the marketing of the world's gold centers in
London. Indeed, that city is the only place where there is an organized,
permanent market for gold, distinct and apart from the Treasury and the
Central Bank.
It is interesting to note, according to Mr. Bratter. that the suspension of
the gold standard on Sept. 211931. was not permitted to interfere with the
operation of the London gold market. It is true that for some time a great
deal of the world's newly-produced gold thereafter found its way to the
ultimate buyer without passing through London in the usual manner.
That situation has since been changed, and the market now operates
normally. Under the glod standard, the London price of gold was held
within very narrow limits, owing to the fact that the British Treasury.
through the Bank of England, stood ready at all times to buy and sell gold
at fixed buying and selling prices.
Now that the gold standard is in suspension, the pound sterling naturally
fluctuates, in terms of gold and, conversely, the price of gold in terms of
pounds sterling is no longer held within any definite limits, the study reveals.
When the Bank of England wishes to buy gold it must purchase in the market
like any buyer and bid the market price, which is to-day considerably
above the statutory buying price of the British mint.

Philippine Tax Asked on Gold Mining Profits-Insular
Senate Gets Bill to Apply Leasehold System to
Mineral Deposits.
Pointing out that the Philippine Legislature has awakened
to the fact that a boom exists in the gold mining industry
and has taken steps to enable the Insular Government to
share in the large profits being made by a number of the
big gold mines, most of which are located in the mountain
province around the City of Baguio, special correspondence
Sept. 12 from Manila, published in the New York "Herald
Tribune" of Sept. 24, went on to say:
A bill sponsored by Senator Jose Veloso, member of the Philippine mission which recently visited the United States with Senate President Manuel
Quezon, has just been introduced in the Senate. seeking to amend existing
mining laws. Going farther than mere participation in the gold mining
profits, the bill seeks greater control of all mineral lands in the Philippines
by prescribing regulations governing the holding system and the operation
ot the mines.
One ol the most significant teatures of the bill is the provision which seeks
to replace the freehold system with the leasehold system. The Government
would assume full ownership and control of all lands containing mineral
deposits, other than coal, petroleum. mineral oils and gas, and all corporations or individuals seeking to exploit or develop such deposits could only
lease the land trom the Government, paying a rental of $2.50 a hectare
(two and a half acres) every year.

2374

Financial Chronicle

Would Affect Old Claims.
It passed by the insular Legislature and approved by the President of the
United States, the new law would affect not only future holdings, but also
claims now tiled with the Government by individuals or corporations, with
the provision that parties who have claims now on file would be given
preference to lease their claims, so long as they file a petition to that effect
within one year atter the new law goes into effect.
The holdings through lease are limited in the bill as follows:
1. For metallic minerals in lode deposits: Not more than ten hectares
(25 acres) for an individual nor more than 100 hectares for a corporation.
2. For metallic minerals in placer deposits: Not more than 10 hectares
for an individual nor more than 500 hectares for a corporation.
3. For sand, gravel, earth or other mineral products: Not more than 10
hectares for an individual nor more than 30 hectares for a corporation.
4. For precious, ornamental and building stones: Not more than 10
hectares for an individual nor more than 30 hectares for a corporation.
Mineral Royalties Proposed.
In addition to the yearly rental the bill empowers the Government to collect royalties which for all minerals except gold would be at the rate of
% of the actual market value of the gross output. In the case o7 gold
mines the royalties would be 13i% 1:the value of the output does not exceed
% if the value exceeds 3500.000, but does not exceed $1,200,3500,000.
000; 33i% if the value exceeds $1,250,000 but is not more than $2,000,000.
and 5% when the value of the output exceeds $2,000,000.
Should the new law become effective the $2.50 a year rental, as well as
royalties, would be levied on all mineral holdings and claims, irrespective
of when these holdings were obtained.
The bill places control of all mineral lands in the hands of the Secretary of
Agriculture and Commerce.
Gold mining in the Philippines has taken on unusual activity during the
last year, but the actual boom has been in progress only for the last six
months. The main advance has been in the district around Baguio, where
the gold fever runs high. During the last year not less than 20 gold mining
companies have been organized and incorporated, with no material investment from outside the Philippines.
Shares Rise from Five Cents.
Among the gold mines which have proved valuable are the Benguet Consolidated Co., the Balatoc Mining Co., the Antamok Goldfields, the Gold
Creek Co. and the Rogon Mining Co. The Benguet Consolidated, organized in 1903, has been the most valuable mining property in the islands.
Its shares, originally sold for five cents each, are now quoted at $12.50,
with no sellers. Last June the company paid quarterly dividends of 25
cents a share on 2,000.000 shares, or a total of $500,000 for the second quarter this year.
Officials of the Benguet Consolidated have made the claim that, with the
exception of one mine in Alaska and another,one in the United States,
Benguet is the largest gold producer under the American flag.
The 13alatoc company,a younger organization, is capitalized at $1,000,000
divided into 2,000,000 shares. The current market price is $11.50 a share.
Last June the company paid dividends of 15 cents a share tor the second
quarter of this year. Balatoc is operated by the Benguet Consolidated.
The profits reaped by the Benguet and Balatoc companies during the last
few years brought about a sudden interest in gold mining, with the result
that within the last year no fewer than 20 new companies have been formed.
some of which show great promise. Some of these new companies are the
Antamok Goldlields, Eldorado Mines, Benguet Exploration, Bontoc Exploration, Demonstration Gold Mines, Fortuna Goldfields, Gold Creek.
Gold River, Midas Gold Mining, Salacot Exploration, Stove Consolidated
and Southern Cross,

Colombia Urged to Aid Gold-Mining Industry.
From the New York "Times" of Sept. 24 we take the
following special correspondence from Bogota Sept. 20:
Stimulation of gold production by extending Government credit for
financing such operations is proposed to Congress in a bill introduced by
Senator °spina Perez. He stated that in the 18th Century Colombia
produced 40% or the world's gold and now extraction has fallen to 1%.
"All the gold that was easily reached," the Senator explained, "has been
taken out. Civil wars that rorced those who formerly exploited gold mines
to abandon them and the lack of roads permitting the introduction of modern machinery have destroyed our mining industry. At present mines can
only be worked by very poorly paid labor. They were profitable when
worked by slaves."

14th Session of Assembly of League of Nations Is
Opened with Warning of War Threat to World—
Premier Mowinckel Hopes Four-Power Pact May
Aid Peace—South African Elected President—Preliminary Disarmament Discussions Continue at
Geneva.
The 14th session of the Assembly of the League of Nations
was opened at Geneva on Sept. 25 by Premier J3han Mowinckel of Norway, President of the Council, who warned
the delegates that the possibility of war threatens the world,
but who added that the Four-Power Peace Pactrecently signed
by Germany, Italy, France and Great Britain might prove
a bulwark for a "torn and divided Europe, where liberty of
thought and personal liberty are not everywhere secure."
One of the dramatic incidents at the initial session of the
Assembly was the entrance of Dr. Paul Joseph Goebbels of
Germany, accompanied by a bodyguard. Sixty-four
nations sent representatives to the Assembly, including
all League members except Japan, Argentina and Honduras.
A surprise recorded on the opening day was the election of
Charles T. de Water, the South African High Commissioner
to London, to be President of the Assembly. By a vote of
30 to 20 he defeated Francisco Castillo Najera of Mexico,
whose election had been widely anticipated. The Assembly
acted on Sept. 25 to adjourn until 1934 the task of harmonizing the League covenant with the various peace pacts
that have recently been concluded. The address of Premier




Sept.

30 1933

Mowinckel was described as follows in Geneva advices to
the New York "Times":
Looking down on Dr. Paul Joseph Goebbels of Germany, the first
League delegate ever to enter the building protected by a bodyguard,
as he sat in the front row, the Norwegian Premier invoked the pmific
spirit of Gustav Stresemann and Aristide Briand. He pleaded for "torn
and divided Europe. where the words equality and fraternity are relics of a
bygone age and where even the most sacred rights of liberty—liberty of
thought and personal liberty—are not everywhere secure."
Premier Mowinckel recalled that Herr Stresemann had told the 1929
Assembly "it is our prosaic duty to bring the people nearer together and
bridge over their differences," while all eyes continued to centre on the
small non-Ayran appearing figure of the chief Nazi propagandist. Dr.
Mowinckel, who is six feet of pure Nordic, ended by quoting this passage
from M. Briand's speech here in 1929: "When children are taught love,
peace and respect for other nations and to look for what men have in
common rather than for their points of difference, we shall no longer need
to apportion guarantees or apply Article XVIII of the Covenant. Peace
will already be enthroned among the nations."
Criticism of League Noted.
Dr. Mowinckel's review of the year, expressing his personal views,
stressed that public opinion, which is centred not on the important daily
work of the League but on big events, is dissatisfied with the League
because of the Manchurian, disarmament and economic conferences. He
stressed the responsibility of the great powers for this, including the United
States, and urged them to get together and lead the way. To the surprise
of the delegates of many small States, he thought the Four-Power Pact a
step in the right direction.
He found cause for League satisfaction in its work in the Persian, Letician,
Greenland and Chaco disputes, but most of all in the co-operation enjoyed
during the past year with the United States, "which never has been so
important, so close and so varied," and hoped it would become even closer.
"Despite disillusionment and despite the general discouragement that
prevails, every responsible person knows that we have in the League a
marvelous instrument and we are bound to continue to do all that lies
in our power to make it strong and effective," said Dr. Mowinckel.

The first commission of the Assembly,meeting on Sept. 26,
voted to increase the membership of the Council to 15,
thus providing an extra seat. It was reported that France
and Italy hope to obtain this place for Austria. Plenary
sessions of the Assembly were meanwhile postponed pending
a decision of Paul Joseph Goebbels of Germany to speak.
Most of this week's activity at Geneva, aside from the
formal opening of the Assembly on Sept. 25, was devoted
to disarmament discussions preliminary to the opening of the
Disarmament Conference on Oct. 16. The Italian delegates
played a prominent part in these discussions, and held a
series of conferences with the French and German representatives. A copyrighted dispatch from Geneva to the
New York "Herald Tribune" on Sept. 26 said that the
Italians were reported to have proposed a compromise
agreement which raises the following questions:
A four-year trial period, as the first stage before any disarmament by
France, Great Britain, Italy and the United States, should also be accepted
by Germany.
Control should be accepted, though Germany should have a hearing on
its objection to international inspection in favor of bilateral visits between
German and French experts, for instance.
German effectives should be doubled,as proposed in the British plan,
to 200,000 during the four-year period. semi-military organizations being
disbanded meanwhile.
Germany should be allowed to double its defensive armaments, leaving
to future negotiations whether these will consist of arms allowed by the
Versailles Treaty or whether they will be based on a now definition of defensive weapons which would allow the Germans pursuit planes.
Details of disarmament by France and the other countries during the
second stage should be specifically cited.

United States Refuses British Suggestion to Delay
Cruiser Construction —Navy Now Building Four
Ships of Type to Which British Objected.
The State Department announced on Sept. 26 that the
United States Government has notified Great Britain that
it cannot delay or modify its naval program in conformance
with recent British suggestions regarding the reduction of
tonnage of vessels in the cruiser B or six-inch gun class under
the London Naval Treaty. It was reported in Washington
that Norman H. Davis, United States Ambassador-at-Large,
had given this information to Sir John Simon, British
Foreign Secretary, at Geneva on Sept. 25. The State
Department announcement read:
in reply to suggestions from the Uritish Government that the laying
down of any six-inch gun cruisers larger than those now in existence might
be deferred during the life of the disarmament conference, or at least
Pending further discussion of the qualitative limitations of future ship-s.
the American Government has replied that it did not see its way clear to
alter its delayed naval construction program or to suspend the laying down
of any projected ships.

Washington advices to the New York "Times" on Sept.
26, commenting on this decision, said:
For the past ten years, British naval experts have been trying to secure
adoption of a limitation of 7,000 tons on light cruisers, instead of the
maximum limit of 10,000 tons under the London Treaty. The lighter
cruiser 18 better adapted to British Navy needs because of Britain's many
naval bases and stations, but American experts have constantly opposed
any such limitation for the United States Navy.
From the strategic point of view American experts feel that our cruisers,
in the event of war, would be called on to operate far from their bases.
They have insisted that the United States Navy needs cruisers capable of
steaming 3,000 miles to meet the enemy, carry through the engagement,

Volume 137

Financial Chronicle

and return to their home bases without touching land. A vessel of at least
10,000 tons is needed for such an operation, they claim.
Under the naval building program now under way, as part of public
works expenditures of the recovery movement, the navy is building four
of the cruisers to which the British object. Each will displace 10,000 tons
and be armed with six-inch guns.

Great Britain Offers Conversion Loan—New Issue of
£160,000,000 in Exchange for Short-Term Bonds—
Interest 23 %.
.
The British Government announced on Sept. 26 that it
would issue on Sept. 28 a new 2IA% conversion loan (194449) of £150,000,000 for dealing with a portion of the shortterm floating debt. The price of the issue is 94%,according
to London advices, Sept. 26, to the. New York "Times"
which gave details of the offering as follows:
Holders of 43 % Treasury bonds, due on Feb. 7 1934, may convert all
or part of their holding at the rate £106 7s. 6d. of the conversion loan for
each £100 nominal of Treasury bonds. Those accepting will receive a
special interest payment of 27s. 9d. on Feb. 1 and a full half
-year's interest
on April 1 upon the new 2%% loan issued in exchange.
Assuming the whole of the £50,757,000 worth of 4 % Treasury bonds
(1934-36) are converted, the government will effect an annual saving in
Interest of £934,000. It also will acquire funds to the extent of nearly
£100,000,000 which it can utilize for reducing the available volume of
Treasury bills or alternatively lessening the amount of borrowings on such
bills in the near future.
The new loan is really an addition to the existing 23 % conversion loan
(1944-49) of which £55,000,000 is outstanding. It will appeal mainly to
banks and other professional dealers in credit. At 94 it will show a flat
yield of £2 13s. 2d. and a total yield in 1949 of £2 19s. 7d.

British Bill Rate Lowest on Record.
From London,• Sept. 23, London advices to the New
York "Times" said:
Treasury bill allotments this week were the cheapest on record, being
45. 9.I5d. against 5s. 11.30d. a week ago and the previous low of 56. 4.95d.
In August. The current low is due to the fact that the bills represent
maturities of the end of December.

New

Australian Conversion Loan of T21,000,000
Disposed Of in London Now At Premium.
Canadian Press advices, Sept. 15,from London said:

The Australian conversion loan offered to reduce the interest rate on three
bond issues totaling approximately £21,000,000 was subscribed to-day
mmediately the list was opened.
The three issues are the 6% (1931-41) Commonwealth £15.000,000:
the 5h% (1925-35) New South Wales £4,901,000, and the 554 (1930.%
40) West Australian £1,050,000. They now will be converted into new
stock carrying 3g% interest, at 98, redeemable in 15 and 20 years.

On Sept. 28 the Canadian Press London advices stated:
The Australian conversion loan of £21,000,000 was floated successfully

as was the Canadian £15,000,000 loan of last month. Cash subscribers
were able to get only 10% of the amounts desired, and the loan to-day was
at a premium of 1%. Issued at 98, the new bonds bear interest of 3U%.
They will be redeemable in 15 and 20 years.

The loan was referred to in our issue of Sept. 16, page 2018.
France Warned of Inflation Peril—Senator Regnier
Sees Choice Between It and Balancing of the
Budget.
Noting that the question of inflation of the franc is now in
the forefront of the discussions about the French budgetary
deficit, although it is the opponents of inflation who occupy
the stage, advices, Sept. 24, from Paris to the New York
"Times" continued:
In speeches and editorials the subject takes only one aspect—a warning
that if the budget is not balanced inflation must follow.
It was Marcel Regnier, Senatorial budgetary reporter and one of France's
greatest fiscal experts, who led the way yesterday with an editorial in the
newspaper "Agence Economique et Financiere."
"It must be said and repeated without let-up," he wrote, "that it is a
choice between budgetary equilibrium or inflation. Equilibrium will doubtless be difficult and even painful, imposing upon the Government as well as
Parliament the hardest of duties, but it will assure safety. Otherwise, there
will come deadly inflation, the mother of misery, ruining the retired workers, the possessors of small savings who have already lost four-fifths of their
possessions, and risking the dragging of our country into the worst sort of
adventures."
That warning note is sounded to-day in at least three sections of the
country where Radical Socialist congresses were held, while one agricultural
meeting heard the same dire prophecy.
As regards the Government, one thing only is known with certainty—that
Premier Baladier is opposed to inflation and presumably would resign before
permitting it.

Exporters Appeal for. France's Help—Letter to Premier
Says Factories Must Be Closed if Business Is Not
Increased—Farmers Also Seek Aid.
According to Paris advices (Sept. 22) to the New York
"Times," an appeal, couched in terms of deep distress, was
sent to Premier Daladier, Sept. 21, by a group of exporting
organizations representing virtually all the exporters of
France. Their letter, which was called "our supreme appeal," said the exporting industries had reached the limit of
their resistance and would soon have to shut down if relief
were not granted. The account from which we quote continued:




2375

At the same time a group of delegates representing Chambers of .Agriculture all over France visited various Ministries and complained against the
importation of agricultural products. They demanded increased trade
barriers.
These two appeals give a striking picture of the extent to which the depression has finally hit France.
"Alarming" Drop in Exports.
"The situation is, in effect, extremely alarming," said the exporters' letter.
"Every one knows the exporting industries were the first and hardest hit by
the crisis. Our exports were 50,000,000,000 francs in 1929, 43,000,000,000
in 1930, 30,500,000,000 in 1931 and 19,800,000,000 in 1932, which represents a drop of 30,000,000,000 in four years.
"Moreover, while internal markets have been improving slowly but steadily
since the summer of 1932, exports have not improved in the slightest. It
proves our industries have reached a degree of weakness where they cannot
respond to stimuli.
"To-day the infinitely serious question arises as to whether our exporting
industries are to close. Their disappearance would have the gravest consequences.
•
"In the first place, from the monetary standpoint, our currency at present
benefits from exceptional prestige, due to the uncertainty created in all
minds by the instability of American and British currencies. But devaluation and stabilization of these moneys would make fully apparent the grave
danger which the annual deficit in the trade balance of 10,000,000,000
francs truly constitutes.
"From a social viewpoint the closing of our factories would put 2,000,000
persons out of work and bring on a serious underconsumption of agricultural
as well as industrial products."
Urges Production Cost Cut.
The letter concluded by asking the Govermnent first to reduce the cost
of living so as to permit a reduction in the cost of production and to facilitate
the access of French exporters to foreign markets.
The letter expressed keen interest in the Government's new quota policy,
which goes into effect Oct. 1. The new plan is intended to aid exporters
by directing French purchases toward countries which buy from France.
Agriculturists also are deeply interested in this development, though for
an opposite reason. They described what they called "the urgent necessity
for organizing efficacious protection for the national economy against the
world economic and monetary disorder."
After calling attention to the permanent excess of imports, particularly
of agricultural products, the group stressed "the imperative necessity for
reducing import quotas for the fourth quarter, particularly for secondary
cereals, cattle, meat, fruits, vegetables, certain dairy products and lumber."
They also asked that license taxes on imports be raised.
It is believed that the Government is more inclined to favor the agriculturists, for France is inexorably pushed toward a policy of self-sufficiency,
and there is a highly influential body of opinion here which believes France's
salvation, like that of the United States, lies in economic nationalism.
France Announces Two More Lotteries—Next Subscriptions Will Close on Oct. 5 and Oct. 20—First

Unexpectedly Popular.
The overwhelming response of the French public to the
Government lottery received official confirmation on Sept,23
in the publication of an announcement that the second and
third lotteries of 200,000,000 francs each would be issued
Oct. 5 and Oct. 20. The foregoing is from a Paris message,
Sept. 23, to the New York "Times," which also said:
Thereafter new lotteries of like amounts will be held every 15 days until
the public has had enough.
According to early estimates the first batch of tickets were oversubscribed
more than 15 times, so it is likely the Government will get far more out of
the lotteries than it originally expected.
There have been reports in the last few days that the Government would
resort to a huge lottery to help cover the budgetary deficit, but so far that
has been denied. It is presumed that even the extra amounts gained by the
present series will be applied to the pension fund.

The new French lottery was referred to in our issue of
Sept. 23, page 2187.
Belgian Lottery Loan Subscribed.
In its Sept. 16 issue, the "Wall Street Journal" reported
the following from Brussels:
The national 5% lottery loan of 1,500,000,000 Belgian francs, intended
to consolidate the Belgian floating debt and to finance public works, was
subscribed in a single day. It is understood that numerous subscriptions
were received from abroad and Minister of Finance Jasper asserts that all
classes in the nation subscribed, testifying to popular confidence in the beige.
The loan, which was offered at par, is redeemable by annual drawings for
70 years, but during the first 10 years drawings will be only for lottery
prizes.

German Reichsbank Gets Young Plan Bonds at Low
Prices in Paris.
Purchases of Young Plan bonds on the Paris market for
amount of the Reichsbank have been arousing interest in
financial circles in Paris, it was stated in advices from that
city, Sept. 26, to the New York "Times," which also had the
following to say:
Is is impossible to ascertain the amounts but the quotation on those

bonds yesterday rose from 424 to 443, and, according to the Agency Boonomique et Financiere, it was solely due to intervention of the Reichsbank.
To-day the Young I'lan bonds did not receive that help and dropped
back to 435.
As Germany has a favorable trade balance with France, the necessary
funds to make such purchases are always at hand. It will be recalled that
out of the original $300.000,000 of Young Plan bonds issued in 1930, France
marketed $130,000,000, while Germany herself took $100000000. The
Issue was oversubscribed here five times, while the German portion also
was overscribed.
The Reich at that time asked the French to give up part of their share
but the bonds already had been sold. Now the French wish they had let

2376

Financial Chronicle

some go, for the bonds, which were issued at 982.50, are now quoted at
about half that price. It is a far greater bargain for the Reich than ever.
since ultimately the bonds will be redeemable at par. Consequently the
purchases here are casuing no surprise.

Foreign Debt of Germany Totaled 18,967 Million
Reichsmarks at End of February According to
NICB—Long-Term Indebtedness 10,265 Million
Reichsmarks—Even Reduced Supply of Foreign
Exchange Regarded as Adequate to Meet Debt
Service Requirements in 1933.
The National Industrial Conference Board stated on
Sept. 24 that according to the latest official estimates of the
German. Government, the total foreign debt of Germany,
not including direct investments, amounted to 18,967,000,000 rm. at the end of February 1933. Of this total,
the long-term indebtedness amounted to 10,265,000,000 rm.
and the short-term debt to 8,702,000,000 rm. As compared
with the situation at the end of September 1932, there is a
reduction of 645,000,000 rm. in the short-term debt and an
increase of 84,000,000 rm. in the long-term debt. The
Board supplied these figures, together with further information concerning the German debt. In its statement the
Board said:
Germany,
As compared with the status of July 1931. the foreign debt of
not including direct investments, shows a decline of approximately 5.000.declined from
000.000 rm. During the same period direct investments
5,900,000,000 rm. to 4.200,000.000 rm.
the end of
The burden of interest and amortization payments from
February 1933, to the end of February 1934, is estimated at 1.299.000.at 622,000 rm. Interest payments on long-term debts are estimated
rm. These
000.000 rm., and those on short-term debts, at 382.000,000
dollar deof
estimates were made without taking into account the effect
Of the
preciation on the burden of interest and amortization payments.
1,299.000.000 rm., 605.000.000 rm, at the
total debt service charge of
States
par of exchange, or almost 50% of the total, is payable in United
with the
dollars, which show a depreciation of about 30% in comparison

German mark.
surplus of comDuring the first seven months of 1933. Germany had a
667,000.000 rm.
modity exports of only 315.000.000 rm., as compared with
expenditures,
in the corresponding period of 1932. The income from tourist
undoubtedly also
shipping services, and German investments abroad will
to the unfavorable condition of world
show a great decline in 1933. owing
political detrade and partly as a result of foreign reaction to internal
from these four
veiopments in Germany. The net income of Germany
if there is no
sources is not likely to exceed 900.000.000 rm. net in 1933.
400.000,000 rm.
revival in world trade. This figure would be approximately
by the Gerbelow the net requirements for foreign debt service estimated
not take into
man Government. The official estimates, however, do
on sums due to
account the saving of as much as 30% that can be made
they appear to
the United States owing to exchange depreciation; nor do
that has
take into account the repatriation of German foreign obligations
weight in estitaken place since July 1931. If these factors are given due
income
mating the foreign debt service of Germany and if the considerable
net income from
from the payment of Russian trade credits is added to the
foreign investments, it appears that even
merchandise trade, services, and
to meet in
the greatly reduced supply of foreign exchange will be adequate
Under the partial transfer
full the actual debt service requirements in 1933.
possible for the
be
moratorium arrangements, made this summer, it will
position.
German Reichsbank materially to strengthen its reserves

German Government Bars Discrimination Against
Jewish Firms—Minister of Economics Declares
Boycotts Would Harm Economic Recovery—Continuance of Drive on Non-Aryan Companies Would
Increase Unemployment, Dr. Schmitt Finds.
Nazi GovernA radical change in the racial policy of the
Germany was forecast on Sept. 27 when Dr. Kurt
ment in
Schmitt, Minister of Economics, in an address at Munich de"nonclared that discrimination between "Aryan" and
with the idea of boycotting
Aryan" business establishments
Jewish concerns "would unquestionably cause serious disturbances in the progress of economic recovery." Dr.
Schmitt's address and its probable significance, were described as follows in Berlin advices of Sept. 27 to the New
York "Times":

he said,
Discrimination with the idea of boycotting Jewish concerns,
progress of eco"would unquestionably cause serious disturbances in the
nomic recovery."
through the
"It would injuriously react upon the employment situation
continuance of the boycotting of commercial establishments and indirectly
other concerns creditthrough the effects being spread in widening radius to
ing them with supplies, thus hitting both the owners and the employees,"
the rescript states.
with
In conclusion, Dr. Schmitt emphasizes that "in complete agreement"
Dr. Paul Joseph Goebbels, the Minister for Propaganda, he can see no
ground for discriminating against any business enterprise, "so long as the
owners do not violate the law or the principles of business ethics."
This official pronouncement is easily the most emphatic issued by the
government in its attempts to curb National Socialist racial persecution in
so far as it threatens economic interests.
Goebbel'a Approval Cited.
The fact that Dr. Schmitt cites the approval of Dr. Goebbels, one of the
most exuberant promoters of the anti-Jewish campaign, would seem to
indicate the more responsible elements in the Hitler Government are taking
sane counsels on the issue. On it there had remained an unhealable cleavage
in the Cabinet since the proclamation of the anti-Jewish boycott on April 1.
That boycott was sternly opposed by the non-Nazi members of the Government, including Vice-Chancellor von Papen, Foreign Minister von Neurath
and Count Lutz Schwerin von Krosigke, the Finance Minister. It was
allowed to go into effect because the Nazi machine had made nation-wide
preparations for it and it could not be countermanded.




Sept. 30 1933

What appears to be the trouble is that the present rulers of Germany,
having discovered that they have over-reached themselves in preaching antiSemitism, are now finding themselves unable to head off the worst economic
effects.
It was found almost impossible to prevent the social ostracism pronounced
against Jews from spreading over to business; and the social ostracism
was being carried to a fantastic degree.
On July 7 Rudolf Hess, Herr Hitler's deputy in the Nazi organization,
issued tentative orders to cease propaganda against the department stores.
"Any procedure against them is condemned by the party management
and is inappropriate in view of the present economic situation," he wrote.
He emphasized that in trying to injure the business of the department
stores the Nazis would only counteract the new government's endeavors to
reduce unemployment.
How little effect, however, this admonition had is indicated by the fact
that Nazi district leaders continued to issue warnings for non-obedience
to these orders. To-day, however, the Nazi "labor trustee" for the Rhineland, Wilhelm Boeger, published a rescript repeating textually the manifesto of Herr Hess. He threatened that if violation of it, through open or
covert boycott of the department stores, "such as has constantly been reported to me and the Reich Economic Ministry," continue, "we will resort
to having the violators arrested."

Hitler Regime Seeks Peace with all Nations, Joseph
Goebbels Declares Before Leaving'Reich for Geneva
Conferences—Says Another War Would Be Madness.
The Hitler Government desires only peaceful relations
with other nations, while its domestic goal is that of providing bread for its citizens, Dr. Joseph Goebbels, Nazi Minister for Propaganda and Public Enlightenment, said in an
address on Sept. 24 at Ruedesheim, prior to taking an aeroplane for Geneva to attend the sessions of the League of
Nations and the Disarmament Conference. Dr. Goebbels,
speaking before a meeting at the Niederwald monument,
asserted that Germany "must have peace" and that "it would
be madness to plunge into fresh disaster while not yet recovered from the last one." His address was reported as
follows in Berlin advices of Sept. 24 to the New York
"Herald Tribune":
"I am inclined to believe," he said, "that the world looks askance at the
remolding .of the German nation into a unified front. The world is always
distrustful when Germany is gathering new strength."
•
National power, he said, was based, not upon armaments, but upon the
homage to pacifism are forever prewill to exist, "and the nations that pay
paring for the next war."
Referring to the charges of the Hitler Government's opponents that it
had driven people into exile, he declared that never before had a German
Government enjoyed such widespread support among the people. "The
people," he said, "is sovereign, and we are the executors of its will."
The Hitler regime, he declared, had confidently attacked two great tasks,
to give the people bread and peace, though aware of the difficulties confronting it. The former republican governments, he charged, had sought to discredit the National Socialists abroad.
"We will never tire," he said, "of telling the world that Germany wants
peace; that no nation, neither Germany nor any other one, would win anything by a war, but rather would lose, and that it would be madness to drive
the nations into a new disaster when they scarcely have recovered from the
previous one."

Exchange Dumping Is Feared in Berlin—Drops in
Dollar and Pound Cause Anxiety Among Financial
Leaders.
Except among those who owe money abroad and who
welcome every reduction in their burden, the new falls of
the dollar and sterling are taken unfavorably in Berlin, it
was stated in a wireless message from that city to the New
York "Times" on Sept. 23. These advices added:
Exporters apprehend exchange dumping.
Economists, remembering Germany's own experience, declare automatic
expropriation of American and British investors and savers will ultimately
Injure internal trade. They also predict the stimulus to trade and the stock
exchange through flight from the dollar and pound will disappear when the
exchanges are stabilized, still more so it they again appreciate.
It is considered that progressive depreciation ot the world's two greatest
currencies must check an advance in gold prices which should normally
occur under influence of trade betterment. This theory seems confirmed by
the reaction in gold prices in recent weeks.
It is regarded as certain that there will be an advance in public salaries.
prices and materials, while tax revenue remaining unincreased, will threaten
public finance. It is feared England may be obliged to embark on inflation
because the buying power of her present currency in circulation may prove
insufficient for business.
In general, the policy of currency depreciation is very unfavorably
criticized; therefore, the report that President Roosevelt contemplates
stabilizing the dollar was welcomed here. but it is repeated that stabilization probably will involve a temporary reaction in business and securities,

German Reichsbank Plans Praised as Sound—Dr.
Schacht Says Stability of Currency Is Basis of
the New Program.
A wireless message from Berlin Sept. 23 is taken as follows
from the New York "Times":
Critical reflection on the German Government's economic program,
announced last night, finds one surprise in it—its conservatism.
American banking representatives resident in Berlin view the announcement essentially as a pledge of economic orthodoxy. They attribute much
significance to the fact that at yesterday's session of the Economic Council
the discussion was led by Dr. Hjalmar Schacht and Finance Minister von
Krosigk, with the exponents of "socialism" relegated to the background.
For the expansion of the Reichsbank's functions, tormal assent of the
World Bank is required, but this may be taken for granted. It is contemplated to include abolition of the Reichsbank's General Council, which,

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137

Financial Chronicle

Dr. Schacht said, "with the lapse of the Young plan and consequent withdrawal from the Council of its foreign members has lost all reason for its
being."
The chief innovation is that the Reichsbank will be able to buy and sell
gilt-edged bonds at will, and will include in its holdings such securities as
a part of its circulation coverage. The Reichsbank will thus tigure as a
main prop to the holders of German securities bearing fixed interest.
This is intended, Dr. Schacht explained, to assure that hereafter there
shall not be selling orders that produce serious and unjustified declines in
the bond market.
Furthermore, the steadying influence of the Reichsbank's appearing as
a buyer of German bonds at any critical time is to prompt wider investment
in such securities, the idea being "to restrict the short-term money market
to a degree and divert part of its funds to capital investment."
Dr. Schacht emphasized the changes required to give the Reichsbank this
enlarged radius:
"It may be regarded as a measure of the confidence the government has
in the directorate of the Reichsbank," and this will make use of its enlarged
mobility only "with scrupulous regard to the needs of currency."
"You may be assured," he added, "that the Reicbsbank adheres, as
heretofore, to the principle that there is only one sound currency policy—
that which maintains stability of currency."

Germany Provides Import Reprisals—Cabinet Decides
to Ban Goods of Lands Putting Embargo or Quota
on Reich.
A measure providing for reprisals against countries that
restrict imports from Germany was enacted at Germany's
Cabinet meeting on Sept. 22, according to a wireless message
on that date to the New York "Times," which also had the
following to say:
It also passed an addition to its employment-creation program increasing
government aid for certain perations and decreasing agricultural taxes.
There was also enacted a law framed by Dr. Paul Joseph Goebbels Propaganda Minister, under which German "culture" would obtain corporative
organization.
The Foreign Exclusion Law was officially explained as a purely defensive
measure. It has no connection with Germany's domestic economic situation, it said, and its provisions will not become operative except as is made
necessary by any action of foreign countries. In so far as these "attempt
to repress German exports by means of embargoes or quotas" they will
counter-action forbidding imports from them to be received in Germany.
The reduction in agricultural land taxes was said to aggregate 100,000,000,000 marks and to lower the individual taxpayer's burden by 16%.
Further relief is accorded by reduction of the turnover tax.
The provisions for use of the government's funds to aid building operations have been enlarged in scope.
Under-Secretary Reinhardt of the Finance Ministry said the government
oan involved the circulation of 2,000.000.000 marks.
"Of these 1.000.000,000 will lie paid in wages," he said. "This will
employ 1,000,000 workers for six months. If we succeed in thus carrying
1,000,000 unemployed through the Winter, we shall save 250,000,000 marks
in gold.
The government's measure for incorporating German "culture" provides
co-operative "chambers" for literary men, the press, the radio, the stage,
films, music and the graphic arts. All these several chambers to be coordinated in one "Reichskultur" chamber.

Decline in Germany's Unemployed.
The following from Berlin Sept. 23 is from the New
York "Times":
The census ot registered unemployed in Germany on Sept. 15 totaled
4,067,000. Their number thus had diminished by 57,000 in the first half
of September. The figure was 1,934,000 below the maximum of unemployment this year, which was in February.

Germans Warned on Overproducing—Farm Minister
Declares That Price Guarantee Is Based on Not
Exceeding Demand—Bans Grain Acreage Rise.
Richard Walther Darre, the German Minister of Agriculture, in announcing an undertaking by the Gwernment to
obtain "a just price" for the produce of German farmers,
especially grain, warned them on Sept. 16 that it was conditioned on their offering no more than the amount for
which there is a genuine domestic demand. He admonished
them especially against increasing grain acreage, said Berlin
advices Sept. 16 to the New York "Times," from which
we also quote:
"If any agriculturist does so, nevertheless, I shall find ways and
means
of making him pay the appropriate penalty," he declared.
Herr Darre also emphasized that Government price-fixing for agricultural produce was "a special measure undertaken in the interest of Germany's food supplies."
"No similar measures are in contemplation with respect to other branches
of economic enterprise," he declared. "By passing this law the Government, and above all the Chancellor, has manifested Rs especial confidence
in the sound common sense of the German peasantry. It is now up to us
to show ourselves worthy of this confidence."
Free Grain Market to Go.
The free grain market is apparently to be abolished, for the Minister of
Agriculture said:
"If in such a market the Government fixed the price it would also stand
ready to buy at that figure. The result would be an attempt to dump the
whole crop on the State."
The alternative envisaged does not yet appear quite clear, but Herr
Darre spoke of "a new marketing organization created by the corporative
consolidation of producers, middlemen, co-operatives and millers."

Lloyd George Warns on "Bullying" Germany—Fears
Interference Means Red Revolution,
David Lloyd George begged the British Government in
a speech at Barmouth at London on Sept. 22 not to "bully"
Germany, no matter how bad the excesses of the Nazi




2377

regime might be. He is reported as warning that the
outcome of too much interference from abroad would be a
Communist upheaval throughout the Reich, "and a Communist Germany would be infinitely more formidable than
Communist Russia." London advices Sept. 22 to the
New York "Times" went on to say:
"Germans would know how to use their communism effectively." he
declared. "That is why every Communist in the world, from Russia to
America, is praying that the Western Nations should bully Germany into
a Communist revolution.
"I entreat the British Government to proceed cautiously and not get
mixed up in another Deniken or Wrangel business, whether by blood or
blockade. [Generals Deniken and Wrangel were White Russian leaders.
who fought the Bolsheviki with Allied backing.j
"I know there have been horrible atrocities in Germany and we all
deplore and condemn them. But a country passing through a revolution
is always liable to ghastly episodes owing to the administration of justice
being seized here and there by an infuriated rebel.
"I am neither a Nazi nor a Fascist nor a Communist, but if the powers
succeed in overthrowing Nazi-ism in Germany, what will follow? Not a
conservative. Socialist or liberal regime, but extreme communism.Surely
that cannot be our objective."
Lloyd George blamed all the present tension in Central Europe on the
failure of the former Allies to fulfill the disarmament Iledge of the Treaty
of Versailles.
"Their failure has impaired the moral authority of the league," he
asserted. "I hope to God it has not destroyed it."
Another consequence, he said, was the overthrow of liberty and liberalism in Germany by the Nazi regime which "taught the German people to
believe they could no longer trust the word of their neighbors."

Treasury Department at Washington Issues Antidumping Orders—Imports from Japan, Germany
and Netherlands Affected. .
Anti-dumping orders affecting Japan, Germany and The
Netherlands were issued on Sept. 19 by Acting Secretary of
the Treasury Acheson. As noted in the Associated Press
accounts, anti-dumping orders do not bar importations;
the Customs Bureau, however, is authorized to assess import
duties upon these articles sufficient to raise their price to
what is considered a fair value. Regarding the issuance
of the orders on Sept. 19 a dispatch from Washington on
that date to the New York "Journal of Commerce" said:
The commodities involved were:
Incandescent light bulbs and lamps from Japan: rubber soled fabrics
topped footwear from Japan; celluloid thumb tacks from Germany and
saponified stearic acid from the Netherlands.
American industry "is being or is likely to be injured" by these imports,
Acheson found. The products were held as "being sold in the United
States at less than a fair value."
Dumping Duty Planned.
An anti-dumping duty will be assessed against the products sufficient
to bring their selling cost in the American market to that in the country of
origin. Dumping is a situation where the selling price in this market is below
that in the country ot origin and where American industry is injured or
is likely to be injured by such practices.
About the middle of last year the United States began to suffer a flood
of cheap priced commodities from foreign countries. Abandonment of the
gold standard abroad brought foreign production prices below those in the
United States. This enabled foreign producers to sell in the United States
at lower than American production costs, apparently setting up no violation
of the anti
-dumping laws.
However, the then Secretary of the Treasury, Ogden L. Mills, called
hearings before the Customs Bureau and for a month American producers
appeared and gave evidence as to the situation. Testimony was to the
e...ect that legislation was essential in view ot the tact that the anti-dumping
laws did not apply.
Complaints were made as to the imports of low priced
cement from Great Britain, rubber-soled footwear from Czechoslovakia,
scrap iron and steel products from a number of European countries, matches
from Japan, fish products from Japan, Norway, Portugal and the United
Kingdom, rag and tiber rugs from Japan and Czechoslovakia and other
products in addition to those on which dumping orders were issued to-day.

Germany Warned on Rise in Prices—Institute for Trade
Study Points to Reduction in Buying Power—
Retail Sales in Half Year Show Decline of 10%
—Food Imports at Record Low in August.
The Institute for the Study of Trade Fluctuations warns,
that the present wave of German price rises is not in accord'
with the Nation's reduced buying power. We quote from
Berlin advices Sept. 17 to the New York "Times", which
went on to say:
Trade reports are less favorable. The retail turnover for the first half of
the year was 10% below that of the same period in 1932. Many small retail
stores in Berlin have closed.
The heavy iron and steel industries are running at 45% of capacity. The
pig iron output in August was 473,000 tons, against 268,000 tons in August
1932. The number of Krupp Steel Works employees is 25% above that of
August 1932.
The Brussels steel market is dull and it is reported the Japanese competition is increasing in the Far East, whereas the American competition, in
consequence of increased production costs, is declining. Export prices of
those steel products which are not controlled by the international cartel
have declined, while prices of German copper semi-products have advanced.
Cotton weavers in the Spinners Association report that whereas old
orders guarantee satisfactory operation in the coming few months, new
orders have declined. Indeed, orders for certain grades of yarns which
normally increase in August are back at the level at the beginning of 1933.
The increase in exports in August was in accord with seasonal precedent but also was duo partly to belated booking of mass deliveries to Russia.
It is noteworthy that exports to two of Germany's biggest customers,
England and Holland, recovered.
August imports of foodstuffs were the lowest on record, being only
80.000.000 marks, which was 22% of the 1927 monthly average of 360.-

2378

Financial Chronicle

000.000 marks. Owing to the continued decline of these imports the outlook
for a favorable trade balance is good.

German Tariff Rates on Office Equipment Sharply
Increased—Duties Are Now Five Times as High
as Those of Year Ago—Other Products Also
Affected.
New duties on office equipment about five times as high
as those in effect a year ago were announced in the German
"Official Gazette," published at Berlin on Sept. 23. The
new rates apply to typewriters, adding machines, cash
registers and office furniture, while various other products
were also placed under the higher tariff. The announcement
was noted as follows in a Berlin cable to the New York
"Times" on Sept. 23:
German Importers and firms representing foreign producers are being
reminded by German trade officials that German products not only equal
foreign products but in many cases are superior."
"We are fundamentally opposed to the importation of such foreign commodities, but if you hold a contrary opinion we would be glad to have you
give us proof." says the official statement.
Among the categories coming within the purview of this ruling, in addition to o flee equipment, are automobile accessories and artificial silk.
The hardest hit by the new duties are Japanese electric bulbs, on which the
duty Is increased twentyfold. The Japanese have been laying down these
bulbs in Europe at five gold francs apiece, which German producers claim
covers only the labor item in production costs.

Germany Plans Tobacco Cartel to Remove Cut-throat
Competition from Industry.
To take 'cut-throat competition out of the industry and
place it on a sounder footing, a tobacco cartel will be formed
in Germany embracing the largest processors in the country,
said Associated Press advices from Dresden Sept. 23 to the
New York "Times," which also had the following to say:
With the founding of the cartel, experiments with German-grown
tobacco will be pushed in view of the favorable reports coming from the
research station at Forchheim in Baden where e cperiments have shown
that German climatic conditions could produce certain types of eastern
tobaccos for blending purposes.
Under the projected terms Hamburg and Dresden would have huge
tobacco processing plants from which the major German tobacco firms
would agree to buy one-'ourth of their needs. Through grouping this
purchasing power in two plants the foreign purchases might be used to
swing additional markets in Greece, Turkey and Bulgaria for German
exports.
With the principal tobacco factories under the cartel agreement, small
dealers would be protected from underselling competitors, the cartel
refusing to sell to those stores which sold below the stipulated prices.

Germans Complain of Official Waste—Business Men
Also Criticize Absence of Publicity Concerning
Budget.
In a Berlin wireless message Sept. 16 to the New York
"Times" it was stated that business men are sharply critical
of the increasing official extravagance and the confusion
between public and the Nazi party finances. There is
complaint also that the entire lack of budget publicity is
responsible for a suppression of expert criticism, said the
advices.
Chancellor Engelbert Dollfuss of Austria Completes
New Cabinet, in Which He Holds Five Portfolios—
Denies Rule Is a Dictatorship.
Chancellor Engelbert Dollfuss of Austria announced on
Sept. 21 that he had completed a new non-party and nonparliamentary government, and made public the personnel
of his Cabinet, in which he himself will hold five portfolios.
On the same day he denied that he hald any dictatorial aspirations and said the Cabinet was merely a step toward a
Cnnstian German corporative State. The new Cabinet
follows:
Chancellor and Minister of Foreign Affairs, Defense, Security and Agriculture—Dr. ENGELBERT DOLLFUSS.
Vice-Chancellor—Mayor EMIL FEY.
Justice and Education—Dr. KURT SCHUSCHNIGG.
Finance—Dr. KARL BURESCH.
Trade—FRITZ STOCKINGER.
Social Welfare—RICHARD SCHMITZ.
Without Portfolio—Dr. OTTO ENDER.
Without Portfolio—Dr. ROBERT KERBER.
The Under-Secretaries are:
,
Defense—Prince ALOIS of S hoenburg-Hartenstein.
Security—KARL KARWINSKY.
GLEISSNER.
Agriculture—HEINRICH
Justice—FRANZ GLAS.
Unemployment—ODO NEUSTAEDTER-STEURMER,
Tourist Traffic—ODO NEUSTAEDTER-STEURMER,

Hungary Reducts DIficit —Further Reduction Expected for Next Year.
Budapest advices Sept. 26, are taken as follows from the
New York "Times":
In a report published by the Hungarian Government to-day the Financial
Committee of the League of Nations declares the budgetary position of
Hungary has improved since the last report. Trig year's deficit Is 137,000,000 pengoes, compared with 160.000,000 last year. the reduction being
achieved by paring down expenditures. Next year's deficit Is estimated at
76.000,000.




Sept. 30 1933

The interest rate on Hungary's short-term debt has been lowered as a
result of negotiations with creditors. Despite a reduction in total trade.
Hungary's export surplus has increased. This year's harvest has been
very good.

Two Rothschilds Cede Big Estates to Austria—Action
Incident to Liquidation of Credit Anstalt.
Advices as follows from Vienna, Sept. 13, are taken from
the New York "Times":
Barons Alphonse and Louis Rothschild, the heads of the Austrian branch
of the famous banking family, ceded two estates in Gaming and Ybbsitz to
the Austrian Government to-day.
This was done in connection with the liquidation of the Credit-Axu3talt,
of which Baron Louis Rothschild was President and the other Baron a large
shareholder. The estates cover 35,000 acres and consist of valuable woods
and agricultural land.
The Austrian public has demanded that the Rothschilds be forced to make
partial compensation for losses of the Credit-Anstalt. The two bankers
sacrificed their stock in that institution.
This additional concession will enable the Austrian Government to use
the land for the colonization of several hundred settlers. The Gaming
estate was one of the most famous hunting preserves in Austria.

Austrian Banks Lower Interest Charges to Industry.
Bank and credit institutions belonging to the Society of
Austrian Banks and Bankers have lowered interest charges
on industrial loans, according to a report to the Commerce
Department from its Vienna Office. The Department in
announcing this on Sept. 23 added:
The average reduction is 2.45%. The banks have agreed to charge a
basic rate not over 1.5% above the official bank rate and to eliminate or
reduce handling charges. Sometimes in the past these extra charges have
raised a basic rate of 9% to an actual charge of from 13 to 15%. The
old rates, inclusive of the extra charges, averaged 12% while the new rates
will average 9.55%.
The banks had been built up to serve the old Austro-Hungarian Empire
and until recently had been burdened with overhead charges not In keeping
with the reduced volume of business. They were compelled therefor to
Increase the charges on industrial loans.
Early this year the Government forced reductions in bank pensions,
salaries, directors' fees, &c., which paved the way for the present reduction
in interest charges on industrial loans.

Rotterdam to Pay on Currency Basis Coupons Due in
November on Dollar Loan.
A copyright cablegram, Sept. 17 from Rotterdam to the
New York "Times" said:
The municipality of Rotterdam has decided to pay the 6% dollar loan
coupons falling due in November on a currency basis. With the present
exchange price of the dollar this means a difference of 25% with gold payments hitherto made. The Dutch financial authorities regard this move
unfavorably, as one of doubtful morality and definite tactlessness. It is
understood that the Committee of the Stock Exchange is likely to protest.

New York Stock Exchange Rules on Bonds of
State Bank of Jugoslavia.
Through its Secretary, Ashbel Green, the New York
Stock Exchange issued the following announcement on
Sept. 28:
NEW YORK STOOK EXCHANGE.
(Committee on Securities)
Sept. 28 1933.
Referring to the ruling of this Committee dated Aug. 25 1933 in the
of arrangements made to pay the six coupons maturing from Oct. 1
matter
1932. to April 1 1935, both inclusive, pertaining to State Mortgage Bank of
Jugoslavia Secured 7% Sinking Fund Gold Bonds, due 1957, and making
provision for dealing in bonds
(a) "with Oct. 11932. and subsequent coupons attached"
(b) "with all unmatured coupons attached (i.e. all matured coupons
detached)"
(c) "with Oct. 11935. and subsequent coupons attached":
The Committee on Securities further rules that in settlement of transactions made prior to Oct. 11933, under method (b) referred to above, bonds
must be delivered bearing the Oct. 11933,coupon; and that in settlement of
contracts made pn and after Monday. Oct. 2 1933, bonds must be delivered
bearing the April 1 1934 coupon.
ASHBEL GREEN, Secretary.

Bonds of City of Berlin and State of Hamburg (German)
Dealt in "Flat" on New York Stock Exchange.
The following announcements were issued on Sept. 28 by
Ashbel Green, Secretary of the New York Stock Exchange:
NEW YORK STOCK EXCHANGE.
(Committee on Securities)
Sept. 28 1933.
Notice having been received that the interest due Oct. 11933. on City of
% Sinking Fund Gold Bonds, Municipal
-Year
Berlin (Germany) 25
External Loan of 1925, due 1950, will not be paid on said date:
The Committee on Securities rules that beginning Monday. Oct. 2 1933,
and until further notice the said bonds shall be dealt in "Flat" and to be;a
delivery must carry the Oct. 11933. and subsequent coupons.
The Committee further rules that In settlement of all contracts in said
bonds on which interest ordinarily would be computed through Oct. 11933.
Interest shall be computed up to but not including Oct. 11933.
NEW YORK STOCK EXCHANGE.
(Committee on Securities)
Sept. 28 1933.
Notice having been received that the interest due Oct. 1 1933, on State of
-Year 6% Gold Bonds, due 1946, will not be paid
Hamburg (Germany) 20
on said date:
The Committee on Securities rules that beginning Monday. Oct. 2 1933,
and until further notice the said bonds shall be dealt in "Flat" and to be a
delivery must carry the Oct. 1 1933, and subsequent coupons.

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Financial Chronicle

The Committee further rules that in settlement of all contracts in said
bonds on which interests ordinarily would be computed through Oct. 1 1933.
Interest shall be computed up to but not including Oct. 1 1933.
ASHBEL GREEN. Secretary.

Sweden Denounces Truce on Tariffs—Stockholm
Understands Withdrawal is Solely to Gain a
Free Hand.
In a cablegram from Stockholm to the New York "Times"
it was stated that following the example set by Holland on
Sept. 4, Sweden on Sept. 27 renounced the temporary
tariff truce set up on the suggestion of the United States
at the World Economic Conference in London. The cablegram (Sept. 27) added:
P. A Hansson. the Swedish Prime Minister, who is now in Geneva, is
understood to have handed in a month's notice for termination of adhesion to the truce personally to the Secretariat of the League of Nations.
It is stated that the Government has decided it requires complete liberty
of action in the matter of raising import duties, although no immediate
move is contemplated in this direction.

On the same date (Sept. 27) Washington advices to the
`Timeq" said:
State Department off,cials refused to comment on Sweden's denunciation
of the tariff .ruce, as the State Department has not been officially advised
of it nor of the reason for it.

Turkey and Bulgaria Renew Treaty of Friendship—
Turks Had Hoped New Pact Would Be Signed
During Negotiations at Sofia.
The Turko-Bulgarian treaty of friendship which expires
in March 1934 was renewed for a period of five years after
a series of formal conferences which were concluded at Sofia
on Sept. 22. A wireless dispatch to the New York "Times"
from that city commented on the result of the negotiations
as follows:
This is a disappointment for Turkey. Ismet Pasha, in a toast at
an
official dinner in Sofia, definitely invited Bulgaria to join in a new TurkoGreek arrangement. The Bulgarians declined, because to do so
would
have meant abandoning Bulgaria's claims, admitted under the
peace
treaties, for access to the Aegean Sea.
The Turkish Premier then suggested to the Bulgarian Foreign Office
the conclusion of a Bulgarian-Turkish pact modeled on the Turkish pact
with Greece. This also proved unacceptable. Finally, renewal of the old
pact was agreed upon to avoid the appearance of complete failure.
It may be assumed that this is partly due to advice given to King Boris
by London, where he has just been inquiring personally as to British
opinion on Bulgaria's foreign policy. Bulgaria has now declined to form
part of the new Balkan combination devised by Italian statesmanship, in
which the Turko-Greek pact was to have been the first step, just as Bulgaria
held aloof from the Rumano-Yugoslav group controlled by
France.

Argentina Signs Tariff Treaties With Great Britain
and Italy—Former Provides Release of Frozen
British Credits by Loan.
Argentina signed two new tariffs accords on Sept. 26, one
with Great Britain being initialed at Buenos Aires, and one
with Italy being signed at Rome. The British-Argentine
accord supplements the trade treaty between the two countries and consists of a general tariff understanding covering
rates on 388 items of British manufacture, many of which
compete with American products. Two annexes to the
accord deal with Argentine exports to Great Britain, while
the treaty itself includes a provision for a large British loan
to free frozen British credits held by the Exchange Control
Commission. United Press advices from Buenos Aires
reported that the supplementary accord stipulates that the
rate of exchange for the proposed loan to release these
credits will be the rate prevailing on the day of signing.
The Argentine-Italian convention signed at Rome establishes preferential tariffs for 26 Italian products and 12
Argentine products. Transit duties are eliminated and equal
treatment is assured for foreign and native products.
Bankers Extend Argentine Loans—Brown Bros. Harriman Cut Interest to 41 7
/ o•
From the New York "Sun" of last night (Sept. 29) we
take the following (United Press) from the Buenos Aires:
The Government to-day obtained a renewal for six months on the
$17.100.000 loan from Brown Bros., Harriman
& Co. of New York and interest
was reduced from 5 to 4 % annually.
The same renewal and interest reduction were obtained on a miscellaneous
loan of $3,908,000.

The "Sun" commenting said:
At the office of Brown Bros. Harriman & Co. it was stated that the loan
in the reduced amount of $17,100,000 had been renewed for the period and
on the terms stated in the dispatch from Buenos Aires.
In the case of the smaller loan, the bankers had no information,since they
acted only as coupon paying agents. The bonds of the small short term
loan are held by industrial companies in this country which agreed to take
them some years ago through a conversion plan whereby Argentina met a
large maturity.
Dispatches from Buenos Aires to-day also stated that a saving
of 40,000.000 pesos on the annual debt service was an integral part of the government's economy plans, the Argentine Chamber having approved
a
budget of 47,000,000 pesos less than the Government's estimated requirements. These savings must be negotiated with bondholders and reduction
in interest on external short term debt is a contribution toward the general

purpose.




2379

Argentina Plans Debt Reconvers;on—Finance Minister Tells Chamber Formula Will be Equitable and
Reasonable.
A cablegram, Sept. 28 from Buenos Aires to the New York
"Times" said:
The Government is planning a reconversion operation for both the foreign
and internal debts, but will not take any drastic steps likely to hurt bondholders, according to an address by Finance Minister Pinedo in the course
of a Chamber of Deputies debate on the budget.
The Chamber approved a budget of 47,000,000 pesos less than the Government's estimate, insisting that the Government must save 40.000.000
pesos on debt payments by the debt conversion operation authorized by
Congress last year which former Finance Minister Alberto Hueyo refused
to undertake. Senor Pinedo told the Chamber he hopes to no;otiate better
terms directly with the bankers or bondholders. If this is impossible, the
Government will seek another solution which he said would be equitable,
reasonable and le ltimate. The budget as passed by the Chamber authorizes
expenditures of 792,000,000 pesos, of which 30% is for interest and service
charges on the public debt. Despite Senor Pinedo's statement that further
administrative economies are impossible, the Chamber cut down government
expenditures by 25,000,000 pesos. The peso is quoted at 38 cents.

Argentine Senate Authorizes Government to Join
League of Nations—Will Not Recognize Monroe
Doctrine.
The Argentine Senate voted unanimously on Sept. 25 to
authorize the Government to join the League of Nations,
thus terminating, after 13 years, the equivocal situation in
which the League considered Argentina a member while the
Argentine Government considered itself a non-member. The
House of Deputies authorized membership last'year, so the
measure becomes law upon signing by President Justo,
said a cablegram from Buenos Aires Sept. 25 to the New
York "Times," from which we also quote:
Argentina will join with the sp-cific reservation that it does not recognize
the Monroe Doctrine as an international regional agreement, although the
League Covenant so defines it.
Foreign Minister Saavedra Lamas told the Senate Argentina does not
owe the League 1,000,000 gold francs in back membership dues, as announced in Geneva Sunday. He also told the Senate the reservation regarding the Monroe Doctrine was not intended to be hostile toward the United
States and that he was not responsible for its inclusion in the present law.

Salvador Proposes American League of Nations.
Associated Press advices from Mexico, D. F., Sept. 22,
said:
Proposals for the formation of an American league of nations and an
American court ofarbitration will be made at the forthcoming Pan-American
conference at Montevideo by El Salvador, the Salvadorean Minister here
announced to-day.
No mention was made of the United States in the announcement, which
stressed the need of Hispano-American solidarity, but the Sal adorean
Minister, when questioned, said the United States would be included in
the proposed organizations.
This was interpreted in Latin-American circles here as a bid by the
Government of El Salvador for recognition by the United States.

Rulings by New York Stock Exchange on Bonds of
United States of Brazil.
Under date of Sept. 28, Ashbel Green, Secretary of the
New York Stock Exchange, issued the following announcement:
NEW YORK STOCK EXCHANGE.
Committee on Securities.
Sept. 28 1933.
Notice having been received that the interest due Oct. 11933. on United
States of Brazil 655% External Sinking Fund Bonds of 1926, due 1957.
will not be paid in cash but that provision has been made for payment in
20
-Year Funding Bonds of 1931:
The Committee on Securities rules that said bonds be quoted ex the
Oct. 1 1933, coupon on Monday, Oct. 2 1933: that the bonds shall continue
to be dealt in "Flat" and in settlement of transactions made on and after
that date, bonds, to be a delivery, must carry the April 1 1934. and subsequent coupons; and
That Funding Bonds or fractional certificates therefor received in payment of coupons shall not be deliverable with the bonds.
ASHBEL GREEN. secretary.

Rulings by New York Stock Exchange on Bonds of
Republic of Columbia.
Ashbel Green, Secretary of the New York Stock Exchange,
issued the following announcement on Sept. 28:
NEW YORK STOCK EXCHANGE.
Committee on Securities.
Sept. 28, 1933.
Referring to the offer of the Republic to make partial payment of onethird in cash and the balance in scrip on account of the interest due Oct. 1
1933, on Republic of Colombia 6% External Sinking Fund Gold Bonds
of 1928, due Oct. 1 1961:
The Committee on Securities rules that beginning Monday, Oct. 2 1933,
the said bonds may be dealt in as follows:
(a) "With Oct. 1 1933, and subsequent coupons attached."
(b) "With April 1 1934, and subsequent coupons attached."
That scrip received in partial payment of coupons shall not be deliverable with the bonds;
That bids and offers shall be considered as being for bonds "with Oct. 1
1933, and subsequent coupons attached" unless otherwise specified at the
time of transaction: also
That beginning with transactions made on Oct. 2 1933, the bonds shall
be dealt in "Flat."
The Committee further rules that in settlement of all contracts in said
bonds on which interest ordinarily would be computed through Oct. 1
1933. interest shall be computed up to but not including Oct. 1 1933.
ASHBEL GREEN, Secretary.

2380

Financial Chronicle

S. M. Bruce Named Australian High Commissioner
in London—Relieved of Cabinet Post.
Stanley M. Bruce has been appointed Australian High
Commissioner in London, it was announced on Sept. 21.
A wireless dispatch to the New York "Times" of Sept. 22
from Melbourne, Australia, Sept. 21 contained the following:
Prime Minister Lyons said that the arrangements under which Mr.
Bruce had remained in the Cabinet while repreesnting Australia in London
had proved satisfactory, but that if continued indefinitely in the case of
this particular Minister it would involve a departure from the principle
of collective responsibility of the Cabinet, Mr. Bruce concurred in the view.
Mr. Bruce's appointment would mean a serious loss to his colleagues.
Mr. Lyons said, but his skill in financial matters had made it clear that he
should remain in London, as it was of vital importance to Australia to get
further relief from the existing burden of interest payments abroad.

United States Consulate at Corinto Nicaragua, to
'
-Day (Sept. 30).
Close To
The following, sent by Tropical Radio to the New York
"Times" of Sept. 10,is from Managua, Nicaragua, Sept. 9:
The United States Consulate at Corinto will close on Sept. 30 because
action will
of the small amount of work. Documents requiring consular
be handled by the United States Legation at Managua. The American
Consulate at Bindlelds has been closed for several months.

S. H. Brown of New Jersey Transferred as Vice-Consul
at Rotterdam to Vice-Consul at Batavia—Other
Transfers Made.
The State Department at • Washington announced on
Sept. 23 that Sidney H. Brown of Short Hills, N. J., now
Vice-Consul at Rotterdam, has been assigned as Vice-Consul
at Batavia. The Department also announced the following
additional changes in the foreign service:
Leo J. Callahan of Dorchester, Mass., Consul at Nairobi, Kenya, East
Africa. assigned Consul at Aden.
Ray Fox of Glenn, Calif., Consul at Aden, assigned Consul at Berlin.
Harold Shantz of Rochester, Consul at Barcelona, now temporarily at
the Legation at Prague, assigned Consul at Nairobi.

Labor Troubles Continue to Disturb Cuba as Agitators
Ask for Resignation of President Grau San Martin
—Efforts to Form Coalition Still Unsuccessful—
State Department at Washington Clarifies Regulations Governing United States Naval Forces.
of
Threats of a general strike to force the resignation
Grau San Martin were again heard in Cuba late
President
this week, and thousands of hand bills distributed on Havana
streets demanded that all business close until the President
would resign. Meanwhile labor troubles in the interior of
the island have persisted, despite the efforts of Government
troops to maintain order. Little further progress appears
to have been made in plans to form a coalition Government,
although President Grau San Martin has held almost daily
meetings with members of opposing factions. On Sept. 28
Dr. Carlos Finlay, Minister of Sanitation in the Grau San
Martin Cabinet, arrived in the United States by aeroplane
from Havana, and it was reported that he might hold political conferences in Washington within the next few days that
might have an important bearing on the question of recognition by the United States.
Evidence of unrest under the present Government was
afforded on Sept. 27, when between 40,000 and 50,030 members and supporters of the Spanish regional societies paraded
and met before the Presidential Palace in Havana to protest
against a decree requiring all physicians to join the Medical
New
College of Cuba. The Havana correspondent of the
York "Times" described the demonstration as follows:
business and proDespite a drizzling rain, the well-dressed throng of
with the crowds
fessional men and women and children, in sharp contrast
students, marched in
that have attended demonstrations organized by the
an orderly manner from Central Park.
addreesed the
President Ramon Gran San Martin and other officials
they would have
demonstrators from a palace balcony. Dr. Grau told them
to appeal to the courts.
houses, comThe possibility of a general lockout among commerdial
to dissatisfacpletely paralyzing industry and commerce, now looms owing
the demontion over the refusal of Dr. Grau to accede to the petition of
labor, which
strators and the failure of the Government to take steps against
demands
commercial interests assert is forcing the acceptance of impossible
by intimidation and acts of violence.
by
A report from Santiago said an orderly demonstration organized
Spanish societies there took place this afternoon.

Efforts to form a coalition Government were renewed on
Sept. 24, when Colonel Fulgencio Batista, Army Chief of
Staff, told a conference of various factions that a coalition
could probably settle the disturbed political situation. The
principal obstacle to an agreement however, was the refusal
of the students to co-operate with the opposing groups. It
was reported from Havana that strikes were again spreading and the food shortage was becoming serious. At the
State Department in Washington on Sept. 24 it was said that
conditions in Cuba were no worse, although occasional out-




Sept. 30 1933

breaks of violence were occuring at various parts of the
island.
Secretary of State Hull on Sept. 25 explained several
principles that would govern the action of United States
naval forces in Cuba in dealing with dangers to American
citizens and foreign nationals. The new policy would allow
somewhat greater latitude to naval officers. Mr. Hull said
that in cases of disturbance commanders of individual vessels
are to consult with Rear Admiral Charles S. Freeman, Commander of naval forces in Cuban waters, before taking action and provided there is time to do so. Commanders will
be permitted, however, to act on their own initiative in
emergencies where delay might endanger American lives.
The Secretary emphasized that naval forces now off Cuba
have been sent solely for the protection of American and
other foreign lives, and not to safeguard property. Property destruction will not be regarded as sufficient justification for sending landing parties ashore, he added.
On Sept. 25 President Gran San Martin received a visit at
the Presidential Palace in Havana from Colonel Juan Blas
Hernandez, rebel leader who had been reported in revolt in
Camaguey Province. Colonel Bias Hernandez, however, denied that he had revolted and said he had no intention of
doing so. Instead he issued an appeal to his followers to
support the present Government. The other important incident of the day was the termination of the strike of employees of Havana jobbers and wholesalers and the resumption of foodstuffs deliveries. The settlement of the dispute
was accomplished after wholesalers consented to the demands of the workers for shorter hours and higher pay. It
was welcomed principally as relieving the food shortage
which had threatened Havana for several days.
President Grau San Martin issued a decree on Sept. 26
creating a new armed force called the "Revolutionary
Guard." The term of enlistment is 90 days, and the Government is to provide food, lodging, uniforms and arms, but
will not pay any wages. The object of these troops is to
assist the army in maintaining public order. It appeared
that the decree was issued to legalize the student militia
which was formed to aid the present regime in retaining its
power.
New York Stock Exchange Abandons Plans to Move to
New Jersey After Mayor O'Brien Vetoes Stock
Transfer Levy and Tax on Gross Income of Security
Dealers—Mayor Acted at Suggestion of Samuel
Untermyer, Who Stressed Loss of Revenue to State
and Probable Depreciation in Real Estate Values—
Exchange Had Settled on Site in Newark, with
Stock Clearing Corporation in Jersey City—Mayor
O'Brien's Statement.
The New York Stock Exchange this week abandoned its
plans to transfer a large part of its dealings in securities to
New Jersey, after Mayor O'Brien had vetoed the two city
bills taxing stock transfers and the gross income of security
dealers. This action by the Mayor, on Sept. 26, followed a
recommendation by Samuel Untermyer, Financial Adviser
to New York City, who originally proposed the taxes, in
which he urged the Mayor to delay signing the two tax bills
until the Exchange had time to decide on whether or not it
would move to Newark if this part of the tax program were
not made law. After Mr. Untermyer had thus reversed his
position, Richard Whitney, President of the Stock Exchange.
Informed the Mayor that the Exchange would remain in New
York City if the proposed taxes were abandoned. The Governing Committee of the New York and New Jersey Stock
Exthanges supported Mr. Whitney's statement by adopting
formal resolutions, and on the same day (Sept. 26) Mayor
O'Brien vetoed the two measures, which had been expected
to provide $10,000,000 in new revenue for unemployment relief. The Mayor issued a long memorandum explaining his
veto, and declaring that no one had taken the possibility of
moving the Exchange to New Jersey seriously when it was
first mentioned. Details of the controversy between the
City Administration and the members of the Stock Exchange
were given in our issues of Sept. 16 (pages 2025-2028), and
Sept. 23 (pages 2192-2194).
The newly-created New Jersey Stock Exchange announced
on Sept. 23 that Newark had been selected as its location, and
that the Committee on Organization had chosen the Centre
Market Building in that city for the trading floor. At the
same time an announcement was made jointly by Howard
Froelick, Chairman of the Committee, and Mayor Hague of
Jersey City, that arrangements had been made to establish
a New Jersey branch of the Stock Clearing Corporation in

Volume 137

Financial Chronicle

the Pennsylvania Terminal in Jersey City. The terms of the
proposed lease on the Centre Market Building in Newark
provided for a payment of $25,000 for the first year, $50,000
for the second year, and $100,000 for the next three years.
Mayor Ellenstein of Newark, vvho was in Chicago, approved
the terms of the lease by telephone, and dictated the following letter to Mr. Froelick on Sept. 23:
In pursuance to our telephone conversations to-day by long-distance telephone, this is to inform you and your Committee that I, on behalf of the
City of Newark, will accept your proposal to lease to your Committee the
steel and concrete building known as the Centre Market and situated on
Commerce Street, Newark, N. J., for one year beginning Sept. 25 1933, for
the annual rental of $25,000, your group to make such repairs as you deem
necessary for uses as a stock exchange at your own expense.
Further, you and your Committee shall have the option of renewal for
four years additional at the expiration of the one-year term at the following
rental:
Fifty thousand dollars for the first year of such rental; $100,000 per
annum for each of the subsequent three years to complete the said option
of four years.
It is further agreed that the building is to be used as a stock exchange in
co-relation with or as a subsidiary of the New York Stock Exchange. Said
lease is not assignable or transferable without the consent of the City of
Newark; you and your Committee to surrender the building at the completion of the term in the same physical condition it now presents.
I have, previous to this writing, discussed these terms with the majority
of the City Commission of Newark, and these terms are agreeable to them.

After receiving Mayor Ellenstein's letter, Mr. Froelick
issued the following statement regarding the proposed new
site for the Exchange:
The Centre Market Building is ideally suited to the needs of the New
Jersey Stock Exchange. It will provide a trading floor substantially larger
than that of the New York Stock Exchange. Contractors have been engaged
and the work of preparing the new trading floor will be commenced immediately.
The close proximity of Jersey City to the offices of members of the Exchange at present situated in downtown New York makes it the logical place
for the stock clearing organization which will receive and deliver the securities dealt in on the New Jersey Stock Exchange. The Committee on Organization seriously considered locating the trading floor of the new Exchange
in the Pennsylvania Terminal in Jersey City. The space immediately available, however, was not sufficient for the needs of the new Exchange.

In announcing, on Sept. 23, that it would open a New Jersey branch, the Stock Clearing Corporation explained that
the new branch would operate a central comparison room in
connection with the trading floor of the new Exchange in
Newark and also would establish a central delivery department in Jersey City. The preliminary statement, outlining
the manner in which the-new Exchange would function, said,
In part:
Floor reports will be sent to the central comparison room by telephone
clerks as soon as trades have been reported by telephone from the floor to
the order room of the member firms.
These reports will be held in the central comparison room until exchange
tickets have been written from them. The writing of the exchange
tickets
must be done in New Jersey by clerks of clearing member firms. Stock
Clearing Corporation will provide facilities for the distributing of tickets.
This means that clearing member firms must be ready to supply as many
ticket clerks as their volume of business will require, to write exchange
tickets in New Jersey for those stocks which are traded in on the new
Exchange floor. Specialists also will be required to have clerks in this
central comparison room.
2. Separate night clearing sheets will be required for transactions made
on the New Jersey Exchange. You will continue to write up as in
the past
night branch sheets for stocks traded in on the New York Stock
Exchange,
but you will separately prepare exactly the same type of
sheet for stock
traded in on the New Jersey Stock Exchange. Sheets covering New
York
Stock Exchange transactions will be delivered, as in the past,
to night
clearing branch of Stock Clearing Corporation at 52 Broadway,
New York
City. Sheets covering New Jersey transactions will be
delivered to New
Jersey branch, central delivery department, Jersey City. The
dates for
delivery of said sheets will be in accordance with the regular
second day
delivery schedule now in effect.
3. Balance tickets for stocks traded in in New Jersey
will be available
for clearing members at New Jersey branch, Central
delivery department
in Jersey City. Security balance orders on stocks traded
in on the New
York Stock Exchange will be called for as usual at the
distributing department, 52 Broadway, New York City.
4. The central delivery department for stocks traded in
on the New Jersey
Exchange will be located in Jersey City. In it all deliveries made
in accordance with security balance orders for Jersey stocks must take
place. That
means that securities traded in on the proposed new Exchange
must be
received and delivered In New Jersey. Inasmuch as all stocks traded
in on
the new Exchange will be cleared, there will be no question involving
noncleared stocks or bonds at this time. The same type of stationery
as used
now for charge tickets or credit actual lists or fail tickets may
be used,
whether for the New York central delivery department or the
central delivery department in Jersey City. Delivery time in each central
delivery
department will continue to be 2:15 p. m.
The New Jersey branch will commence operations when the
New Jersey
StocK Exchange opens for business. The precise date will be announced
in a
later circular.

Definite indication that New York City would yield to
the
brokerage interests in the struggle over the tax program
was
seen at the formal public hearing on Sept. 25, when Mr. TJntermyer recommended that the Mayor delay signing the two
tax bills until the attitude of the Exchange on the City's offer
to abandon the measures was known. Mr. Untermyer, in his
statement, said that he was motivated by reluctance to endanger New York State's income of $30,000,000 or $40,000,000




2381

from stock transfer taxes, as well as the inevitable depreciation of real estate in the financial district. He remarked
that if the Exchange moved to New Jersey, New York City
would lose large amounts in real estate taxes in consequence.
He added that he was also concerned about the city's chances
of obtaining a loan of $72,000,000 from the bankers and did
not wish to jeopardize the success of these negotiations. His
statement read as follows:
Mr. Chairman, with respect to these two bills, I wish that I still believed
that the threats of the Stock Exchange to move away from New York were
a bluff, but the conviction has been carried to me that they are going away,
and that they have already gone. That the State of New York will lose upon
its stock transfer tax 30 or 40 millions of dollars, and that the City of New
York will suffer a great loss through deterioration in its property. I accordingly have the following recommendation to make:
I have been seriously considering the anticipated effect of the stock transfer and brokerage tax bills which are now before you upon the business of
the members of the Exchange in this city and adversely on other cities where
a large part of the business is now going. Its effect upon the real estate
values in the neighborhood of the Exchange and the consequent effect upon
the value of such property, but more particularly upon the revenues of the
State from this stock transfer tax, if the Exchange succeeds in dodging the
State and the city on transfer and brokerage taxes by carrying out its threat
to move to New Jersey.
Whilst I believe the ultimate effect of any such movement will be the
disintegration of business of the Exchange in this city until an Exchange
arises in its place, which is regarded as a certainty, I do not feel that the
city can in justice to the State permit any step to be taken that will injure
the revenues of the State and the real estate values of the city, urgent as
the need of the city for money from this tax for home and unemployment
relief, and that the law would automatically expire at the end of five
months and could not be renewed without an Act of the Legislature. By
that time the damage would have been done by the removal of the Exchange.
I would accordingly be willing to advise your Honor to reconsider these
bills if the Exchange will abandon the threat and terminate its negotiations
to locate outside of the State.
If the Exchange members refuse this proposal or suggestion, which is
offered chiefly to protect the city, there is no alternative except to ask
your Honor to sign these bills, both of which I regard as eminently just as
emergency measures in view of the pressing needs of the city. I have also
prominently in mind, Mr. Mayor, the delicate negotiations in which we are
now engaged, on which the future credit of the City of New York depends,
and am most solicitous that nothing be done at this critical time that will
complicate that situation. I ask you to do that thing advisedly.

Later on the same day (Sept. 25), Mr. Untermyer made
public another statement, in which he amplified his position.
This read:
I have no assurance that the Board of Estimate will adopt my recommendations. In making them I was largely influenced by the following
considerations:
I became convinced that the Exchange had determined to move out of
the State in order to escape the State and city stock transfer taxes and the
taxes on the incomes of the brokers. That would have cost the State over
$31,000,000 for the year, and I did not feel that the city had the right to
deprive the State of these taxes.
That New York City real estate values in the Wall Street district would
have suffered to the extent of perhaps $200,000,000, thus reducing the city's
income from these taxes about $5,000,000.
That tens of thousands of employees resident in the city would have been
thrown out of employment or gone to New Jersey.
That a large part of the business of the Exchange would have been
diverted to Chicago and Boston, both of which cities were angling for the
business.
That the bills had, as I have often complained, been so restricted and
emasculated by the Republican leaders in the Assembly that the sum collectable under them would have been problematical.
That the delicate and important negotiations with the bankers affecting
the entire future of the city would have been jeopardized.
The last consideration weighed very heavily with me.

The Stock Exchange was quick to accept the city's offer
to forego the taxes on the condition that trading activities
would continue in New York. Richard Whitney, President
of the Exchange, on Sept. 26, sent the following letter to
Mayor O'Brien:
lion. John P. O'Brien, Mayor of the City of New York, City Hall, New York.
My dear Mr. Mayor: I have seen in the press the recommendation in
regard to the local laws taxing stock transfers and the gross income of
persons engaged in the business of buying and selling securities, made to
you at the public hearing yesterday by Mr. Samuel Untermyer.
If you veto these bills, I will promptly recommend to the Governing Committee of the New York Stock Exchange and also to the Governing Committee of the New Jersey Stock Exchange, which will hold its first meeting
to-day, that the plan for the opening of a trading floor in Newark on Oct. 2
be dropped. In these circumstances, will you kindly let me know as soon
as possible what action you have taken in regard to the pending bills?
Faithfully yours,
RICHARD WHITNEY, President.

Shortly after Mr. Whitney sent his letter to the Mayor, the
Governing Committee met at the Stock Exchange and approved resolutions which assured that the Exchange would
remain in New York City. The Governing Committee of the
New Jersey Stock Exchange, which is the same as that of the
New York Stock Exchange, simultaneously approved a resolution agreeing to abandon the plan for opening the trading
floor in Newark on Oct. 2. Both resolutions were conditioned upon the vetoing of the tax bills by Mayor O'Brien.
The resolution adopted by the Governing Committee of the
New York Stock Exchange was as follows:
Resolved, That this Committee recommend to the Governing Committee
of the New Jersey Stock Exchange that its plan for the opening of a trading

2382

Financial Chronicle

floor in Newark on Oct. 2 1933 be dropped on condition that the Mayor of
the City of New York shall veto the bills now pending before him to impose
a tax on the sale or transfer of shares of stock and a tax upon the gross
income of persons engaged in the business of buying and selling securities.

The Governing Committee of the New Jersey Stock Exchange then approved the following resolution:
Resolied, That the plan for the opening of a trading floor in Newark on
Oct. 2 1933 be dropped on condition that the Mayor of the City of New York
shall veto the bills now pending before him to impose a tax on the sale or
transfer of shares of stock and a tax upon the gross income of persons engaged
in the business of buying and selling securities.

Sept. 30 1933

Exchange and a large number signed the constitution of the
new Exchange on Sept. 26, thus formally organizing the market. With the adoption of the constitution the work of the
Organization Committee was concluded, and the Governing
Committee of the New Jersey Stock Exchange assumed its
duties. Describing the reaction of brokerage firms to the
announcement that the usual trading activities would continue in New York City, the New York "Times" on Sept. 27
said:

Wall Street greeted with enthusiasm yesterday the news that Mayor
O'Brien would veto the stock taxes. The brokers had not relished the prospect of moving from the stately Stock Exchange building to a remodeled
garage in a much smaller city.
It was in the spirit of a "modern Boston tea party," as they described it,
that all had co-operated in the organization of the New Jersey Exchange,
and the inovem‘int's success brought a sense of relief to the embattled brokers.
Mayor O'Brien's Statement.
But the "tea party" was an expensive engagement for the Stock ExBefore the adoption of these measures by the Municipal Assembly, I gave
change, brokers admitted. Estimates of the cost ran from $50,000 to
• $100,000.
the subject of the proposed taxes involved herein, and other taxes adopted
Wall Street's exuberance was in sharp contrast to Newark's gloom after
at the same time, a great deal of serious thought. Indeed, it should be
recorded herein that during the past eight months the whole subject of proArthur Harris, Secretary of the Exchange's building corporation, sent home
new sources of revenue to meet the ever-increasing burden of unemducing
the incoming shift of 200 workmen, one of three altering Newark's Centre
ployment and home relief has been the most pressing problem before us.
Market, until the work was suspended at 4 p. m.
Before any action was taken on any form of new taxes designed to proNewark was left with a tenantless $5,000,000 market on its hands. Durduce revenues to care for the unemployed, I called a public meeting of the
ing the day the city obtained a judgment for non-payment of rent against
invited the representatives of a
Board of Estimate and Apportionment, and
the City Centre Corporation, whose garage there it had evicted.
very large number of organizations interested in public affairs to send their
Although the Exchange considers itself morally committed to a lease,
representatb es to the hearing for the purpose of securing a broad expression
Mayor Ellenstein said Newark could not agree to a $25,000 rental without
of opinion as to the best methods or measures of securing funds to carry
the benefits accruing from a trading floor. Richard Whitney, President
on unemployment relief.
of the Exchange, said he thought it would "meet the city on the question of
The meeting was attended by over 200 representatives of various bodies,
rental," and will meet Mr. Ellenstein to-day to discuss final action on
counsels, chambers of commerce, et al.,
taxpayers' organizations, community
the lease.
and the Mayor and the other members of the Board heard discussion for
Alteration of the Exchange Place terminal of the Pennsylvania RR. in
over five hours. Various other discussions have been carried on before the
Jersey City, proposed home of the New Jersey Stock Clearing Corporation,
Board of Estimate at its meetings upon this subject and a great variety of
also was suspended.
taxes suggested.
At the request of the Board, a special session of the Legislature was called
United States Government Bonds Eliminated from
by Governor Lehman to permit the introduction of bills designed to authorize
tax measures which were calculated to produce the necessary funds for relief
-Day Delivery Plan of New York
Operation of Two
purposes. As a result of the special session, the local authorities were
Stock Exchange—New York Federal Reserve Bank
empowered to impose taxes.
Requests Member Banks to Give Specific Date of
There followed quickly a discussion by the Board of Estimate and ApporDeliveries Under Plan.
tionment of the best means of relieving our situation with regard to unemThe provisions of the rules of the New York Stock Exployment relief; and as a result, four separate bills calculated to provide
adequate relief funds were determined upon and the above bills were introchange with respect to dealings in United States Governduced as two of the four revenue measures. All of the four projected measment bonds under the two-day delivery plan of the Exchange
ures were approved by the Board of Estimate and Apportionment and by
(under which securities are deliverable on the second full
the Board of Aldermen.
During and since the passage of these measures a great deal of discussion
business day following the transaction) were amended.on
has been carried on. Numerous protests were made before the two Boards
Sept. 27, as noted in the following issued by the Exchange:
at the time when the bills were being considered. Many written protests
At a meeting of the Governing Committee held Sept. 27 1933, the prowere forwarded to me and members of the Board, through resolutions, letters
visions of the rules with respect to dealings in United States Government
and telegrams. The above measures having been passed by both branches
bonds were amended so that beginning Thursday, Sept. 28 1933, In effect,
of the Municipal Assembly and a hearing having been held before me yesterthis class of securities Is eliminated from the operation of the two-day
day, Sept. 25 1933, where various arguments were made, these matters now
delivery plan.
come before me for action.
Unless otherwise specified, all bids, offers and transactions in such
Following the passage of the above measures, new facts and conditions
bonds are to be assumed to be "Regular Way," i.e., for delivery on the
have been disclosed. These happenings and activities have presented possifirst full business day following the day of the transaction.
bilities which though previously referred to by objectants to the tax measInterest on United States Government bonds sold "Regular Way" is
ures, were never seriously considered as likely to be realized. The situation
to be computed up to but not including the day on which delivery is due.
presented during the last 10 days or two weeks is extremely serious. It
George L. Harrison, Governor of the Federal Reserve
extends in several different directions, and in its most dangerous aspect
includes a seriously threatened action which might prevent any adequate
Bank of New York, issued the following statement on
return upon the State stock transfer tax, with the resulting loss to the
Sept. 28:
State treasury and the derangement of its budget.
With respect to the delivery of securities, either direct or through the
The threatened embarrassment to the City of New York in its plan emStock Clearing Corp., by this Bank for account of member banks, and
bodied in the above measures to care for, during the next 15 months, those
supplementing our Circular No. 922, dated July 11 1929, member banks
without employment, food and shelter, also has become so serious as to
are requested, when authorizing this Bank to deliver securities, to give
demand a complete review of the whole situation. Unfortunately for the
the specific date on which such deliveries are to be made under the new
purposes of the program enacted by the Municipal Assembly in these meastwo-day delivery plan of the New York Stock Exchange, which became
ures, the issues now raised come at a time when other equally serious probeffective on Sept. 8 1933.
lems must be met and solved. Whatever one may think about the lack of
Reference to the second-day delivery plan were given in
co-operation and spirit of sacrifice and the absence of local patriotism,
which have been manifested in connection with the adoption of these measour issues of Aug. 26, page 1498; Sept. 2, page 1675, and
ures, this is not just the time to discuss such subjects. I am confronted
Sept. 9, page 1850.
with a situation which I cannot control, wherein serious and pressing conclusions must be made.
Thus, I reads my decision without any reservation, which is to veto these
President O'Brien of Chicago Stock Exchange Names
measures. This attitude should not be and will not be construed as a change
Special Committee to Consider Plans to Improve
of mind with respect to the original necessity of passing the above measMarkets in the Securities Listed on the Exchange.
ures and the inescapable obligation upon me and the other members of the
At the request of Thaddeus R. Benson, Chairman of the
Board of Estimate and Apportionment of finding, wherever we may, the
Chicago Association of Stock Exchange Firms, M.J. O'Brien
means of carrying on relief work In this city and caring for all needy and
dependent persons.
•
President of the Chicago Stock Exchange,appointed a special

Mayor O'Brien studied the two resolutions, and on the
evening of the same day (Sept. 26) vetoed the two tax bills,
at the same time making public the following formal statement explaining his action:

The Mayor's statement added that he had not definitely
decided what action to take with regard to two other measures providing for new taxes on savings banks, public utilities and life insurance companies. Both of these measures
had met strenuous opposition, together with threats that if
they were signed the banks, insurance companies and utilities would protest their legality and would contest the issue
with the city in the courts. Meanwhile officials of the city
have this week held several conferences with Governor Lehman, and these meetings have also been attended by bankers
on whom the city is depending for loans to refund short-term
city securities and to defray salary and relief needs.
•
The cancellation of plans to begin security trading in New
Jersey on Oct. 2 does not indicate that the Stock Exchange
has any immediate intention of dissolving the newly-formed
New Jersey Stock Exchange, it was said this week. More
than 90% of the members of the New York Stock Exchange
had indicated their intention to join the New Jersey Stock




committee of floor members of the Exchange to consider plans
for the improvement of markets in securities listed on the
Chicago Stock Exchange. Mr. Benson, in commenting
on the meeting on Sept. 21, said:
This meeting to-day is the second step In a definite plan to improve
markets in our securities. The first was a meeting of Order Clerks held
Aug. 15.
In view of the tax situation in New York City we are naturally concentrating on those Middle-Western institutions whose securities are listed
on the Chicago Stock Exchange as well as in the East and whose markets
should be in Chicago because more of the stockholders reside in Chicago
and the Middle West.
Diamond Match Co., for instance, has already rebated its securities
on our Exchange for the benefit of its stockholders, more than 50% of
whom live in the Middle West.
The Chicago Association of Stock Exchange Firms has asked Its members
to furnish information concerning the potential volume of business originating in, or routed through, Chicago offices of members. We believe this
Information will disclose that a large percentage of the transactions in
these Issues originates in Chicago and the Middle West. When these
figures are compiled they will give us a definite basis on which to work.
When we have a basis on which to work. I know we can count on the cooperation of everyone concerned.

Volume 137

Financial Chronicle

Mr. O'Brien emphasized that in this program of development no unlisted department will be organized. He said,
"We will not change our requirements for listing securities
on our Exchange. We will continue to trade in only those
stocks regularly listed here." The personnel of the Floor
Committee is as follows:
R.A. Wood.Chairman
Morton D. Cahn
Virgil C. Webster
Earl R. Boorman
Ford C. Carter
John R. Burdick Jr.
Ralph M. Cleary
Frank I. Cordo
Lester M. Eiseman
Norman Freehling
W. W. Haerther
Thomas J. Harper

Elmer A. Kurzka
W. S. Mills
Irving E. Meyerhoff
Edward P. Molloy
Frank E. McDonald
R. W. Phillips
Sampson Rogers Jr.
Henry Selz
Robert P. Shimmin
Edward J. White
Hugh H. Wilson
Joseph W. Myers
Ralph W. Davis

Brokers,
&c. Put into Force by Secretary of State.
A code of ethics for security dealers, brokers and salesmen
—designed to protect the public from unscrupulous operators
—was put into effect on Sept. 15 by Edward J. Hughes,
Secretary of State for Illinois. The Chicago "Tribune"
states that the regulations were drawn up by Edward J.
Bippus of the State Security Department in co-operation
with Mr. Hughes. The code will apply in the case of
dealers, brokers, solicitors or argents registered under the
provisions of the Illinois Securities Law. From the "Wall
Street Journal" we take the following, from its Chicago
bureau:
Code of Ethics for Illinois Security Dealers,

These rules in effect form a code of ethics for the sale of securities in this
State.
Representatives of the Department state that the Chicago Stock Exchange, the Chicago Board of Trade and the Investment Bankers Association of America were consulted in the framing of the rules. They state
further that the issuance of these rules gives effect to views expressed at
conventions of State Security Commissioners for some years, but that the
matter was not in shape to be put in definite form until recently.
Text of the rules regulations, effective Sept. 15 1933, follows:
The word "registrant" as used in these rules and regulations and any
amendments thereto, shall mean and include every dealer, broker, solicitor
or agent registered under the provisions of the Illinois Securities Law.
The Rules.
The following rules and regulations are hereby issued in pursuance to and
under the express provisions of Section 25 of the Illinois Securities law.
1. The relationship between the registrant and customer is a fiduciary
one and shall be so considered by the re glstrant at all times.
2. If a broker is also a dealer in securities being sold or offered for sale,
the customer shall be specifically informed of that fact and also as to the
fact that the dealer or broker is expecting to make some other remuneration
in addition to the compensation for his services as broker.
3. Every registrant shall in all dealings with prospective Investors in
securities be unquestionably free at all times from just charges of fraud or
misrepresentation which would tend to work a fraud on the investor.
4. Every registrant shall employ full candor and fairness at all times in
dealing with customers.
5. The customers of a registrant shall not be deliberately misled in the
purchase or sale of a security to or for such customer.
6. Securities or other property pledged by a customer with a registrant
shall not be used by the registrant as if it were his own property but shall
be safeguarded as a pledge.
Bucketing Forbidden.
7. No person engaged in the business of purchasing and selling securities
as a registrant, being employed by a customer to buy and carry upon margin
securities of any kind, while acting for such customer in respect to such
securities, shall sell for his own account the same kind or issue of such
securities with intent to trade against the customers order, or who being
employed by a customer to sell securities of any kind, while acting for such
customer in respect to the sale of such securities, shall purchase for his own
account the same kind or issue of securities with intent to trade against
the customer's order. Such practice carried on to the extent of 10% or
more in terms of market values of all such securities bought or sold on
account of customers' orders shall be deemed prima facie evidence of intent
to trade against customer's order.
8. All printed matter of every kind and description issued by any person
selling or offering securities for sale shall be accurate and adequate to the
end of plainly stating material facts and of omitting no fact, which at the
time of the sale or offer for sale, if omitted, would render any act stated
misleading or inaccurate.
9. Investment counsel or advice, whether by one specializing solely in
rendering investment counsel or advice, or by a dealer or broker, incidental
to usual transactions in securities, shall be strictly on the basis of fiduciary
relationship between the counselor or advisor and the investor or prospective investor. In no event shall such counsel or advice be influenced or
colored by the element of profit or compensation through the sale or tradeout of any security held by the investor. Any advice or counsel given to an
investor must be solely on the basis of interest or pecuniary profit to the
investor.
Early Confirmation Demanded.
10. All purchases or sales of securities shall be confirmed to the customer
within a reasonable time and the terms of such sale or purchase shall be
expressly stated in the confirmation.
11. Long distance telephone calls by a registrant in canvassing for prospective customers shall be employed with due regard to (1) the bona fide
character of the proposed transaction, (2) the amount involved in any proposed sale and (3) the relation of prospective bona fide profits to the dealer
or broker from such proposed sale as related to the necessary cost or expense
incident to such call. Where prospective or resultant sales are so small in
amount as to limit bona fide profit, calculated according to generally accepted rules as to spreads or commissions,to or below the apparent necessary
cost and expense of such calls, such will be regarded as prima fade evidence
ot bad faith and unfair practices.




2383

12. Permitting or encouraging an investor to trade beyond his immediate
financial resources; reloading unreasonable delays in making deliveries of
securities; agreements to repurchase or resell securities; representations
that securities are to be listed, are all questionable practices and shall not
be indulged in, tolerated or permitted by a registrant.
13. Where any registrant offers to sell and contracts for the sale of any
security on the partial payment plan, whereby the purchaser is required to
make periodical payments against the total purchase price thereof tna is not
entitled to require delivery of such security until the purchase price is fully
paid or until a certain substantial portion thereof is paid, such registrant
shall have within his or its poss.ssion or control and set aside, segregated
and identified, and held for the sole benefit of the partial payment purchasers, cash, and (or) securiti,a of the kind so sold from time to time, equal
at all times to the total partial payment receipts then received against the
total sales price ofsuch s3curities, but in no event less cash or securities than
sufficient to meet the sellers current contract liability to the customers on
all outstanding contracts. Every registrant engaged in selling securities
on the partial payment plan shall at all times, while engaged in such business,
maintain a liquid position of not less than 20% over and above his or its
total current contract liability on all outstanding contracts.
14. No registrant shall solicit margin accounts or offer securities fr sale
on margin by communicating with any person at his home or place o; reddonee unless such person shall have previously given express permiss.on
in writing for such communication. The foregoing rules and any additions
thereto or changes made therein may herafter from time to time be revised,
amended or added to by the Secretary of State of the State of Illinois.

Massachusetts and Pennsylvania Lifts Restrictions on
Life Policy Payments.
Restrictions preventing life insurance policyholders from
securing cash from insurance companies for the surrender
of their policies or by borrowing on their policies, imposed
to protect the companies during the banking emergency last
spring, were rescinded Sept. 21 by Insurance Commissioner
Merton L. Brown of Maasachusetts.
All such regulations, the Commissioner announced, drawn up by his
department as authorized by the Legislature last March, are not to be
effective from now on.
C.F. Armstrong,Insurance Commissioner of Pennsylvania
has lifted restrictions on life insurance companies licensed
to transact business in the State of Pennsylvania. They
permit them "until further order to resume payments in
accordance with the terms of the various life insurance and
annuity contracts issued by such companies."
These rules are substituted for the emergency regulations issued in
Pennsylvania March 10 1933. and amended from time to time.

Federal Reserve Board in Monthly Review of Banking
Conditions Reports 30% Rise in Deposit Turnover
—Increased Velocity Important Factor in Financing Business Activity—Increase in Gold of
Central Banks.
The increase of 30% in the deposit turnover in member
banks during the period from March to July is noted by the
Federal Reserve Board in its September Bulletin, issued
Sept. 26; the Board states that there has been an increase of
about $1,000,000,000 in demand deposits since March, and
says:
The growth in the volume of bank deposits since last March has been
accompanied by an increase in the use made of existing deposits, as shown
by an increase in the volume of checks drawn against them.
This increase in the turnover, or velocity of deposits, has In fact been a
more important factor in financing the increased volume of business activity
than the actual growth in the volume of deposits.
Between March and July, while industrial production increased by 60%
and factory payrolls by almost 40%,deposits of member banks in 90 leading
cities increased by less than 10%, while the velocity of their turnover increased by about 30%.
In March net demand plus time deposits of these banks were turning over
at the rate of about 17 times a year, while in July they were turning over at
the rate of about 22 times a year.
The volume of check payments at the reporting member banks increased
from March to July by about $8,000,000,000, and amounted in July to
about $29,000,000,000. About two-thirds of the increase was at New York
City and Chicago, where it reflected in part increased activity in the organized exchanges for corporate securities and for basic commodities such as
cotton and grain. This increase was general throughout the country, however. At 139 cities, not including New York and Chicago, bank debits.
which measure the volume of payments by check, increased from April to
July by about $2,600,000,000, or approximately 30%, and increases were
reported for every Federal Reserve District.
Currency returned to the Federal Reserve Banks and the Treasury
between March 13 and Aug. 30 amounted to about $2.000,000,000. This
represented currency returned by banks from their holdings of vault cash
and currency taken out of hoards, since it occurred at a time when the
demand for currency for active use by the public was increasing with the
growth in the volume of pay rollsand retail trade. That the return flow of
currency was from hoards and not from active circulation is indicated by the
fact that the larger part of the paper currency returned to the Federal
Reserve Banks since last March has been in the larger denominations, $50
and over, such as are used relatively little in day-to-day transactions.
Figures of currency by denominations are available only for end-of
month dates, and it is impossible, therefore, to analyze the return flow of
currency by denominationsfrom the maximum amountreached on March 13,
From the end of February, when money in circulation was about $1,000,000,000 less than at the peak, to the end of July,currency of denominations
of $50 and over declined by about 5500.000,000. or 26%, whereas currency
of $20 denomination declined by $165,000,000, or 11%. and the circulation
of the denominations of $10 and under, which is the currency used largely
for business purposes, declined by 575.000,000, or 3%•

The following further account of the Board's comments is
taken from the Washington, advices to the New York
"Times":

2384

Financial Chronicle

From month to month since the end of November 1930, when the public
began to withdraw currency for hoarding whenever there was a sharp increase it was most pronounced for the denominations of $50 and over, less
pronounced for denominations of $20 and $10, and seldom substantial for
those as low as $5.
At the end of July, the latest date for which figures are available, the
outstanding volume of the larger denominations was lower than a year
ago, reflecting chiefly the return of currency from hoards, while that of
$5 and $10 bills was higher, reflecting chiefly improvement in business.
The volume of $1 and $2 bills showed relatively little change over the period.
Rise in Gold Reserves Abroad.
"The reduction in circulation since March has been chiefly in gold coin
and gold certficates, the hoarding of which has been prohibited, and in
Federal Reserve notes," the Board said.
"The amount of gold coin and gold certificates outside the Treasury
and Federal Reserve banks is at present smaller than at any other time in
many years, while the circulation of Federal Reserve notes, after a considerable reduction since last March,is still much higher than at any other time
since early in 1921."
The circulation of Federal Reserve notes has increased during recent
months and the amount of National bank notes in circulation, after a considerable gain since the middle of the year, is at the highest level since 1914.
Increase in Gold Reserves of Central Banks.
The Board reported that since the first week of July there has been a
substantial increase in the central gold reserves of several of the chief
European countries that have maintained the gold value of their currencies.
On the basis of reports through the third week of August, central gold reserves in France, Germany, the Netherlands and Italy have grown by an
aggregate amount of 395,000,000, and the drain on Swiss reserves has
ceased.

$75,082,000 in Bids Accepted to Offering of $75,000,000
or Thereabouts of 91-Day Treasury Bills Dated
Sept. 27—Tenders of $196,624,000 Received—Average Rate 0.10%.
Of tenders totaling $196,624,000, received to the offering
of $75,000,000 or thereabouts of 91-day Treasury bills dated
Sept. 27, Secretary of the Treasury William H. Woodin announced on Sept. 25 that $75,082,000 has been accepted. The
offering, referred to in our issue of Sept. 23, page 2197, was
issued at the Federal Reserve Banks, and the branches thereof, up to 2 p. m., Eastern Standard Time, Sept. 25. The bills
brought an average rate of 0.10% per annum on a bank discount basis, which compares with previous rates of 0.11%
(bills dated Sept. 20); 0.12% (bills dated Sept.6) and 0.14%
(bills dated Aug. 30). It is the lowest rate at wbich Treasury
bills have been sold except for one previous occasion when
the rate was 0.09% (bills dated Dec. 23 1932). The average
price of the bills to be issued is 99.976. Secretary Woodin's
announcement of the results of the offering said that the
accepted bids ranged in price from 99.980, equivalent to a
rate of about 0.08% per annum, to 99.972, equivalent to a
rate of about 0.11% per annum, on a bank discount basis.
Only part of the amount bid for at the latter price was acCepted.
New Offering of $100,000,000 or Thereabouts of 91-Day
Treasury Bills—To Be Dated Oct. 4 1933.
A new offering of 91-day Treasury bills to the amount of
$100,000,000 or thereabouts was announced on Sept. 27 by
William H. Woodin, Secretary of the Treasury. The bills
will be dated Oct. 4 1933, and will mature on Jan. 3 1934,
and on the maturity date the face amount will be payable
without interest. On Oct. 4 an issue of bills amounting to
$100,010,000 will mature and the new issue will be used to
retire the same. Tenders to the offering, which will be sold
on a discount basis to the highest bidders, will be received at
the Federal Reserve Banks, or the branches thereof, up to
2 p. m., Eastern Standard Time, Monday, Oct. 2. Tenders
will not be received at the Treasury Department, Washington. In his announcement Secretary Woodin said in part:
They (the bills) will be issued in bearer form only, and in amounts
or denominations of $1,000, $10,000, $100,000, $500,000, and $1,000,000

Sept. 30 1933

all taxation, except estate and inheritance taxes. No loss from the sale
or other disposition of the Treasury bills shall be allowed as a deduction,
or otherwise recognized, for the purposes of any tax now or hereafter frn•
posed by the United States or any of its possessions.

New York Banks Solicit Loan Business--Leading Institutions Canvas Depositors and Former Borrowers
in Effort to Expand Credit.

Leading banks in New York City opened a definite campaign this week in an effort to expand bank credit, and several
institutions took action to "solicit" business of this chaiacter.
The Chase National Bank has communicated with depositors
maintaining balances of $25,000 or more, asking them if they
require credit. The Guaranty Trust Co. instructed its vicepresidents to communicate with former borx owers in their
distiicts who have not recently used credit lines, while the
National City Bank has been advising its customers that
credit is available if they require it. The "Wall Street
Journal" on Sept. 27 discussed the credit situation as follows:
So far as credit supplies are concerned,these are ample in the metropolitan
territory to provide for a potential expansion of close to $1,700,000,000 by
local reporting member banks of the Reserve system. Their excess reserve
approximated $171,000,000 on Sept. 20. last, each dollar of which is capable
of expansion 10 times in the form of bank credit.
At present the credit lines of local banks are being used by customers
only to the extent of from 10% to 24%. Rejections of applications for
loans have ranged from 10% to 12% of the number.
To assist in expanding credit, particularly to small borrowers, a committee of 14 banker representatives of the banks in the New York Clearing
House Association was organized a few days ago. This committee makes
its headquarters at the NRA and is devoting its attention primarily to
the study of complaints from small merchants. The study has not been
adequate to date to warrant a report, but it is probable that a definite
statement of findings will be made available within a week.

New Unit Planned by Bankers to Issue Small Trade
Credit—Bankers Study Revival of National Credit
Corporation.

The New York "Journal of Commerce" of Sept. 27
reported that in informed quarters it is stated that Wall
Street bankers are considering either the formation of a new
corporation or the revival of the National Credit Corp.
to meet the pressure for easier credit to small business.
If the National Credit Corp. becomes the vehicle for loans
to small business, it is believed, it may be possible for the
Corporation to sell its debentures to the Reconstruction
Finance Corporation, said the paper indicated. Continuing
it stated:
It is doubted that the funds of the Wall Street banks will be used for
this purpose.
Gap in Credit Facilities.
The purpose is to create an organization which, backed by ample resources,
will handle loans to small manufacturers, jobbers, shopkeepers, &c. Most
of the Wall Street banks deal primarily with large depositors. While New
York City also possesses several branch systems which handle neighborhood
accounts, business groups contend that facilities to finance small business
are insufficient.
Efforts have been made many times to form a new banking institution in
New York City for the financing of small business. Following the collapse
of the Bank of United States the tendency has been for the banks to deal
chiefly with larger business concerns so that small concerns had to finance
current operations through agencies charging high interest rates. Efforts
to organize a new bank up to the present time railed to find the necessary
capital.
Credit Corporation.
The present consideration being given to the revival of the National
Credit Corporation or to some similar device results principally from complaints of business men transmitted through the National Recovery Act and
the Administration. During the Hoover Administration the view became
widespread for a time that the sole basis for the depression lay in the refusal
of bankers to advance credit, and, in consequence, various agencies were
set up to placate those taking this position. While some bankers at the
present time feel that the demand for a new credit institution represents
only the repetition of this theory there are others who see an actual gap in
existing credit machinery.
The largo banks feel that to deal in small loans would be to shoulder the
burden of increased overhead. Naturally, the handling of small loans
would require additions to existing personnel.

(maturity value).
No tender for an amount less than $1,000 will be considered. Each
tender must be in multiples of $1,000. The price offered must be ex.
pressed on the basis of 100, with not more than three decimal places,
e. g., 99.125. Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated banks
and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by a deposit of
10% of the face amount of Treasury bills applied for, unless the tenders
are accompanied by an express guaranty of payment by an incorporated
bank or trust company.
Immediately after the closing hour for receipt of tenders on Oct. 2 1933,
all tenders received at the Federal Reserve Banks or branches thereof up to
the closing hour will be opened and public announcement of the acceptable
prices will follow as soon as possible thereafter, probably on the following
morning. The Secretary of the Treasury expressly reserves the right to
reject any or all tenders or parts of tenders, and to allot less than the
amount applied for, and his action in any such respect shall be final. Those
submitting tenders will be advised of the acceptance or rejection thereof.
Payment at the price offered for Treasury bills allotted must be made at
the Federal Reserve Banks in cash or other immediately available funds on
Oct. 4 1933.
The Treasury bills will be exempt, as to principal and interest, and any
gain from the sale or other disposition thereof will also be exempt, from




Receivers of National Banks Permitted to Exchange
Mortgage Holdings for Bonds of Home Owners'
Loan Corporation.
Permission to National banks to exchange mortgage holdings of closed institutions for bonds of the Home Owners'

Loan Corporation has been granted by Comptroller of the
Currency J. F. T. O'Connor. In a letter under date of
Sept. 23 to Chairman Stevenson of the Federal Home Loan
Bank Board, Comptroller O'Connor states that "we have
. . .decided to send instructions to all receivers authorizing them to submit for consideration to this office all cases
in which they believe it would be to the advantage of their
trusts to make the exchange." A month ago the Comptroller's office had taken the position that for the time
being the exchange of mortgages by receivers for bonds
would not be advisable. Comptroller O'Conner's letter
follows:

Volume 137

Financial Chronicle

Sept. 23 1933.
My Dear Mr. Stevenson:
Under date of Aug. 29 1933 we wrote you with reference to the position
of this office concerning the acquisition of Home Owners' Loan Corporation
bonds by receivers of National banks, and the position therein taken was
that for the time being, and pending further developments in the situation,
it would not be advisable for such bonds to be exchanged by receivers for
mortgages held by them.
Since writing you we have been getting a rather positive reaction from
receivers in various sections of the country indicating that in their opinion
it would be for the best interests of their trusts in many instances to exchange their mortgage assets for the Home Owners' Loan Corporation
bonds. They have pointed out that due to present economic conditions
an abnormally large number of mortgages have accumulated and that the
overhead expense involved in servicing these mortgages, taking care of
Interest and taxes and attending to other details in connection therewith,
is tending to mount up into substantial proportions, and that in view of
this situation and of the further fact that a market is being established
for the bonds and that the market for, the mortgages or the mortgaged
properties is abnormally slow, and having in mind also the loan value of
such bonds with the RFC, it would be advisable to adopt at this time a
general policy of permitting receivers to exchange their mortgages for bonds
where under the circumstances of the particular case such course seems to
be to the advantage of the trust.
Another consideration which has had considerable weight with us is that
our attention has been directed to numerous instances where the mortgagordebtor has reduced his mortgage substantially, and therefore has a worthwhile equity in the property, but is unable for the time being to continue
to carry the property by reason of lack of employment or reduced earnings
or otherwise, so that unless some relief is afforded the mortgagor-debtors
of this class will be liable to lose their equities in the properties.
The law requires, of course, that such exchanges be approved by court
order and that prior to the filing of the court proceedings the approval of
the Comptroller be likewise given to the exchange. Consequently this
necessitates that each case of proposed exchange be submitted to this office
for approval. We have, therefore, decided to send instructions to all receivers authorizing them to submit for consideration to this office all cases
in which they believe it would be to the advantage of their trusts to make
the exchange. We expect to systematize the operations in this respect
so as to facilitate the process as much as possible.
We expect, however, in each case of proposed exchange, to have a contract with the mortgagor-debtor permitting the bon 's held by the receiver
to be utilized in acquiring the mortgage held by the Home Owners' Loan
Corporation at such time, in each case, as may seem to be to the advantage
of the trust, and we assume that our policy in this respect will meet with
your approval in view of the provisions of the Home Owners' Loan Act
permitting such bonds to be used in payment of the outstanding mortgages.
The foregoing represents our present views in the premises, and we will
be glad to have any suggestions from you concerning the procedure or the
actual working out of the practical details, if you care to offer the same.
Very truly yours,
J. F. T. O'CONNOR, Comptroller.
Hon. William F. Stevenson, Chairman, Federal Home Loan Bank Board.
Washington, D. C.

W.J. Cummings of FDIC on Workings of Corporation—
"Temporary Insurance Fund" to Be Set Up Jan. 1
1934—"Permanent Fund" Effective July 1 1934.
The workings of the Federal Deposit Insurance Corporation
were the subject of a radio message by W. J. Cummings,
Chairman of the Board of Directors of the Corporation, on
Sept. 27. Mr. Cummings' talk, arranged by the Washington "Star," was broadcast from Washington over the
National Broadcasting network. Mr. Cummings explained
that the new corporation "is organized to insure the deposits
of all banks that are qualified under the law to receive the
benefits of deposit insurance." "As a first step," he
said, "the corporation is directed to set up a 'temporary
insurance fund' which commences Jan. 1 1934, . . . to
insure all deposits in eligible banks up to a maximum amount
of $2,500 each until July 1 1934." "On July 1 1934 the
'permanent fund,'" he explained, "goes into effect and
deposits up to $10,000 will be insured 100%; amounts in
excess of $10,000 up to $50,000 will be insured 75%, and
amounts in excess of $50,000 for 50%." We give herewith
Mr. Cummings' remarks in full:
It is with pleasure and gratification that I accept this opportunity to
outline to you one part of a most vital and important piece of legislation
called the Banking Act of 1933, which was passed at the recent special
session of Congress.
I refer to certain sections of the Act creating and relating to the FDIC.
The name means just what it implies—an insurance corporation, to insure
bank deposits—obtaining its capital from banks which become participants,
from the Federal Reserve banks and from the Treasury of the United States.
Out of the tragic events of last February and March, which left our
country tottering on the brink of economic ruin, came the necessity to
ware the people that their money could be put into a bank with full
assurance of withdrawal when needed.
The FDIC was created as a result.
No feature of the Banking Act of 1933 attracted such attention. To
almost a universal degree our people are interested and affected by that
Act which touches on their deposits of money placed in .our banks. The
demand for insurance of deposits became so insistent that the Banking
Act of 1933 passed the House of Representatives with but six dissenting
votes—while in the United States Senate the vote was unanimous.
The voice of the American people had spoken unmistakably on the subject
of banking reform through their representatives in Congress. The people's
sure instinct for progress and order had asserted itself, as it often has done
before at times of crisis in the history of our Nation. But it was the President
himself who first interpreted what was going on in the public's mind, and
here are his own words: "We do not want, and will not have another
epidemic of bank failures."
Many of the listeners to-night well remember the dramatic occasion
last March, when this mighty resolve came to them from the White House,
expressing so forcefully their own wish and determination.




2385

Let us go back six months to see where the Nation stood on the night
of that important broadcast from the White House—March 12. All the
banks in the country had closed and were only then beginning to open.
Anxiety and panic gripped the owners of 40 million deposit accounts.
Trade and industry were completely paralyzed.
Then, under authority of executive orders issued by the President, the
Honorable William H. Woodin, Secretary of the Treasury, began to bring
order out of the indescribable confusion into which the banks had been
precipitated by earlier events.
The first step was to determine the strength and fitness of each member
bank of the Federal Reserve System that applied for a license to reopen.
The next step was to co-operate with the banking departments of each
of the 48 States to the end that State banks outside the Federal Reserve
System might also be re-opened as quickly as possible.
Since those tragic days six months ago, much has been accomplished in
restoring credit, and those of us who saw the whole series of events at close
range can only marvel at the progress made to date. The period of hysteria
and fear is now past. Hundreds of millions of dollars have been returned
to the banks from their hiding places. Now that deposits are to be insured.
there will be a further tremendous increase in bank deposits, available
for investment in commercial enterprise.
The new FDIC is organized to insure the deposits of all banks that are
qualified under the law to receive the benefits of deposit insurance, and the
entire resources of the Corporation are placed behind every insured bank
to guarantee to each depositor the safety of his deposit.
As a first step in this program the Corporation is directed to set up a
temporary insurance fund, which commences Jan. 1 1934 (unless the President shall by proclamation fix an earlier date) to insure all deposits in
eligible banks up to a maximum amount of $2,500 each until July 11934.
About 97% of the depositors in our banks have less than $2,500 in their
accounts. This means that the vast majority of the depositors have 100%
protection even under the temporary plan.
On July 1 1934, the permanent fund goes into effect and deposits up to
$10,000 will be insured 100%; amounts in excess of $10,000 up to $50,000
will be insured 75%, and amounts in excess of $50,000 for 50%.
Under the law it is necessary for non-member State banks to be examined
to determine their eligibility for deposit insurance in the temporary fund.
All member banks of the Federal Reserve System automatically become
members of this fund. Bank examiners, under direction of the Corporation,
are now at work examining those banks that have already applied for
membership.
Let it be clearly understood that no discrimination against non-member
State banks will be permitted in these examinations. The law itself is
specific on this point. I quote roughly from Section 12-B of the Act_as
follows:
"It is not the purpose of this Act to discriminate in any manner against
State banks not members of the Federal Reserve System, nor in favor of
National banks or other Federal Reserve member banks; the purpose is
to provide all banks with the same opportunity to obtain and enjoy the
benefits of deposit insurance."
Quoting further from the Act:
"No bank shall be discriminated against because its capital stock is
less than the amount required for eligibility for admission into the Federal
Reserve System."
The whole purpose of the Act is to provide insurance protection for
depositors in as many banks as possible, thus extending the immeasurable
benefits of deposit insurance to every nook and corner of the land.
I assure you a fair and broad interpretation of those provisions of the
Act relating to the eligibility for insurance of any bank operating under
the charter of any State. The examinations are to be based upon solvency,
not upon liquidity. This Corporation has been created for the protection
of depositors by affording them insurance, and under such a system the
test of solvency can be substituted for that of liquidity without sacrificing
ultimate safety.
The insurance fund will stimulate the expansion of credit. The depositor
will be reassured. He will have no reason to withdraw his money. Dispelled in the future will be the causes for panics such as we witnessed last
winter, when depositors clamored for their money at the counters of virtually
every bank in the United States.
I would like to call attention to the immense capital resources of the
FDIC. The initial capital is to be furnished by the United States Treasury
in the amount of $150,000,000. In addition, the Federal Reserve banks
will subscribe one-half of their surplus. This amounts to about $140,000,000
more. Here we have $290,000,000 of capital initially provided.
During the first six months in which the temporary fund is operative,
all deposits up to a maximum of $2,500 are insured, and all banks that
have the benefits of deposit insurance are to subscribe one-half of 1% of
the amount of such insurable deposits, paying half in cash at the outset—
the balance being subject to call.
On July 1 1934. participating banks will subscribe to stock in the Corporation in an amount equal to one-half of 1% of their total deposit liabilities:
and on that date the insurance is increased to cover all deposits up to
higher limits. It is estimated that approximately $200,000,000 will be
subscribed by banks that become members of the permanent insurance
fund. Thus the Corporation will have a capital fund of approximately
$500,000.000, in addition to which it is authorized to borrow against its
assets up to three times the amount of its capital.
After July 1 1936, all banks participating in the insurance fund must
be members of the Federal Reserve System. The plan therefore looks
forward to a logical development of our banking system through insurance
of deposits.
There are many other phases of this Act which are highly important,
but to-night it has been my purpose to outline briefly only its insurance
provisions.
In conclusion let me emphasize that the Federal Deposit Insurance
Corp. will make your savings secure. Returning confidence and an end
to hoarding will result. For business and industry it means that our banks,
strengthened immeasurably by deposit insurance, can more readily supply
credit to finance legitimate enterprises.
I hope I have succeeded in giving you some idea of this new important
Act in the short time allotted.

RFC Advanced $111,495,630 For All Purposes During
August as Compared With $252,734,318 in July—
Advanced $17,381,800 To Banks and Trust Companies To Aid Reorganization.
The Reconstruction Finince Corporation advanced during
August for all purposes $11,495,630 as compared with
$252,734,318 in July, according to its monthly report issued
Sept. 25. The July total was swelled by the unusually
heavy authorizations to closed banks and an authorization
of a $50,000,000 credit to China for the purchase of American

2386

Financial Chronicle

cotton and wheat. The July authorizations also included
$74,000,000 to two Ohio banks which were in receivers'
hands. Continuing its efforts to speed reorganization or
liquidation of closed banks, to release tied-up deposits, the
Corporation auth3rized, in August, loans of $17,381,8C0
to banks and trust companies for such purposes.
According to advices from Washington to the New York
"Times" of Sept. 26, the report also contained the following:
The Corporation also authorized in August purchases of 32,895.000 of
preferred stock of banks,$500,000 of bank debentures,and loans of$126,000
on preferred stock.
These activities were in furtherance of the campaign accelerated in July
when $33.832.523.62 in loans. 812,732.500 of preferred stock purchases.
and 82.615,000 in loans on preferred stock of closed banks were authorized
by the corporation.
One of the features of the administration's present credit expansion program is to release with as little delay as possible the frozen deposits of closed
banks, and place thes3 banks in a position to obtain membership in the
that
Federal Deposit Insurance Corporation. It is expected, therefore,
as the
loans and preferred stock purchases may soon show a sharp increase
campaign gets under full headway.
had not
Many of the authorized loans to conservators and receivers
the report,
actually been disbursed by Aug. 31. the last day covered in
but th re is a sharp drive on now to get into full action.
loans authorThe balance sheet of the Corporation as of Aug. 31 showed
3272.489.ized to closed banks by the RFC up to that time aggregated
Taking into con760.95. of which $10,824,673.01 had been canceled.
disbursed less
sideration repayments of 860,382.550.67. the proceeds
but
repayments totaled $145,195,279.40, with $56,087.157.78 authorized

Sept. 30 1933

ASSETS.
Item—
Cash deposit with Treasurer of United States
Funds held in suspense by custodian banks
Petty cash funds
Deposit with bid for purchase of bonds
Allocated for cape .see regional agricultural credit corporations—
Farm Credit Administration
Advanced for Federal Emergency Relief Administration expenses_
Allocated to Secretary of the Treasury (1)
Allocated to Secretary of the Treasury (2)
Allocated to Land Bank Commissioner
$200,000,000.00
Allocated to Secretary of Agriculture (3)
Less—reallocated as caLital of
regional agricultural credit cor$44,500,000.00
porations
Reallocated to Governor of Farm
40.500,000.00
Credit Administration
85,000,000.00
Capital region agricultural credit corporations
Allocated to Governor of Farm Credit Administration
Loans under Section 5:
Proceeds disbursed (less repayments)—
8693,587,316.56
Banks and trust companies (4)
547,144.07
Credit unions
78,687,608.14
Building and loan associations
68,381,462.12
Insurance companies
25,800.000.00
Federal Land banks
9,830,191.18
Joint Stock Land banks
3,490,826.89
Live Stock credit corporations
158,797,132.31
Mortgage loan companies
Regional agricultural credit corporations..- - 96,457.013.54
2,145,169.20
Other agricultural credit corporations
331,100,906.06
Railroads (including receivers)
Proceeds not yet disbursed—
$63,649,058.12
Banks and trust companies (4)
429,322.21
Building and loan associations
7,098,637.50
Insurance companies
1,200,000.00
Federal Land banks
5,607,517.72
Joint Stock Land banks
547,500.00
Live Stock Credit corporations
12,144,000.35
Mortgage loan companies
5,039,063.82
Regional agricultural credit corporations_ _ _ _
4,148.50
Other agricultural credit corporations
27,305,092.43
Railroads (including receivers)

not disbursed.
Advances authorized in August included the following:
To banks and trust companies, related Institutions and $51,314,852.75
railroads
$29,295.28
For the export of surplus agricultural products Agricultural
For payment of the processing tax under the
$190,000.00
Loans and contracts for self-liquidating projects:
•Adjustment Act
2,895.000.00
Subscriptions for preferred stock of banks
500.000.00 ' Sections 201a—
Purchase of debentures of banks
Proceeds disbursed (less repayments) (by purchase of bonds,
126,000.00
Loans on preferred stock of banks
certificates and notes—par, $40,635,000.00)
3,500.000.00
To the Secretary of Agriculture to acquire cotton
Proceeds not yet disbursed (contracts, bonds, certificates and
4,500.000.00
Subscriptions to stock of Federal Home Loan Banks
notes—par, $17
0,478,650.00)
45.240.482.53
Loans for repair or reconstruction of property:
Direct emergency relief to'States
3,200.000.00
Damaged by earthquake, &c,—
Under the Emergency Farm Mortgage Act
authorized
Proceeds disbursed (less repayments)
During the month requests for $16,217.665 in loans previously
Proceeds not yet disbursed
were canceled, chiefly by banks and trust companies.
Loans under Section 201c:
in August
For financing sale of agricultural surpluses in foreign markets—
Applications for loans from banks and related institutions
including
Proceeds disbursed
numbered 221. of which 148 were by banks and trust companies,
liquidation of banks
Proceeds not yet disbursed
90 applications for loans to aid in the reorganization or
Loans to Institutions under Section 201d:
closed or in the process of liquidation.
Proceeds disbursed (less repayments)
was 33.862.000
Proceeds not yet disbursed
One of the first railroad loans authorized for some time
had been disRelief authorizations (1932 Act):
the Chicago & North Western By. Co., no part of which
to
Proceeds disbursed (less repayments)
bursed up to Aug. 31.
Proceeds not yet disbursed
companies,
Following were the loans authorized to banks and trust
Relief grants (1933 Act) (5):
related institutions and railroads:
Proceeds disbursed
Type—
Banks and trust companies (including receivers)
Building and loan associations
Insurance companies
Mortgage loan companies
Federal Land Bank
Agricultural credit corporations
Live stock credit corporations
Regional agricultural credit corporations
Railroad
Total

Amount.
$36,178,287.70
888,151.83
650,000.00
3,776,400.00
2,000,000.00
76,730.88
400,000.00
3,483,282.34
3,862,000.00

$51,314,852.75

In all, loans were
The largest bank loan authorized was for 88.877.696.
There were
made to banks in 31 States and the District of Columbia.three in New
and
three such loans in New Jersey, aggregating $538,500,
to banks in N. Y. City.
York, totaling $125,000. No loans were made
a loan of $500,000
One New Jersey building and loan association received
and a New York insurance company got $200,000.
following:
Subscriptions for preferred stock included the
$50,000
First National Bank at Bessemer, Ala
15,000

Choctaw Hank of Butler, Ala
City Bank of Tuskegee, Ala
Coast National Bank in Fort Bragg. Calif
First National Bank of Meeker, Colo
First National Bank & Trust Co., Covington, HY
Murray National Bank of Murray, Ky
Northern Maine National Bank, Presque Isle
Millbury National Bank of Millbury, Mass
National Bank of Grand Rapids, Mich
National Bank of Richmond, Mich
Albuquerque National Trust & Savings Bank N.M
First National Bank In Albuquerque
Guaranty Bank, Greensboro, N. C
Bank of Davie, Mocksville. N. C
Peoples Bank, Roxboro, N. C
National Bank of Lima, Ohio
American National Bank of Shawnee, Okla
Medford National Bank, Medford. Ore
Scranton National Bank. Scranton, Pa
First National Bank of Williamsport, Pa
Belton National 13ank of Belton, Tex
Citizens National Bank of Hampton, Va
First National Bank in Marlinton. W.Va

25,000
25,000
25,000
250,000
50,000
150,000
50,000
250,000
30.000
300,000
250,000
300,000
50,000
75,000
100,000
100,000
50,000
300,000
200,000
25,000
200,000
25,000

as follows:
Loans were made on the preferred stock of banks
Company, Eldorado. Ark.,
The Exchange National Bank and Trust
Oklahoma City, $26,000.
$100,000; Liberty National Bank,
was authorized for the
For the purchase of bank debentures. $500,000
County Trust Company of Maryland at Cambridge.
the Corporation
During August, 370.000.000 of the series 0 notes of
making $1,690,000.000 of notes
were sold to the Secretary of the Treasury,
outstanding on Aug. 31.
$154,175,390.51 by the
The monthly balance sheet showed receipts of
and trust companies of
Corporation, including repayments by banks
agricultural credit corporations;
830.396,777; $23,058,592 by regional
82.541.418 by building and loan
33,354,961 by mortgage loan companies;
borrowers. Loan disburseassociations, and smaller amounts by other
352.625,709 paid out to
ments as compared with authorizations showed
banks and trust companies.
its organization showed disburseThe corporation's balance sheet since
repayments, at $693,587,315.
,
mental to banks and trust companies, less
had received $331,100,906:
The next largest borrowers, the railroads,
and mortgage loan companies.
building and loan associations, $78,687,608.
8158.797.132.

According to the New York "Times" the Corporation's
statement of conditions as of the close of business, Aug. 31,
s as follows:




Proceeds not yet disbursed
Loans secured by preferred stock banks and trust companies:
Proceeds disbursed (less repayments)
Proceeds not yet disbursed
Loans to Secretary of Agriculture (Agricultural Adjustment Act):
Proceeds not yet disbursed
Preferred stock banks and trust companies:
Purchased
Subscriptions authorized
Capital notes and debentures, banks and trust companies:
Purchased
Advances for care and preservation of collateral:
Proceeds disbursed (less repayments)
Proceeds not yet disbursed
Collateral purchased (cost lass proceeds of liquidation)
Accrued interest receivable
Reimbursable expense
$433,998.97
Furniture and fixtures
61,953.90
Less allowance for depreciation
Total

Amount.
$5,110,756.14
2,238,031.59
5,420.00
8,680.00
5,260,000.00
58,112.14
124,741,000.00
200,000,000.00
300,000,000.00

115,000,000.00
44,500,000.00
40,500,000.00

.

1,468,824,769.87

123,024,430.65

40,220,294.10
169,736,788.57
1,580,931.00
8,835,394.00
3,401,493.39
49,479,049.41
2,922,329.78
1,552,317.48
299,192,414.00
15,001.00
124,973,472.54
25,162,005.46
12,766,581.97
101,000.00
3,500,000.00
45,853,000.00
4,757,500.00
700,000.00
251,684.61
31,021.36
1,896,593.29
31,550,527.53
486,562.59
372,045.07

$3.258,609,207.54

LIABILITIES AND CAPITAL.
$72,271,000.00
Payable to Secretary of the Treasury (1)
199,000,000.00
Payable to Secretary of the Treasury (2)
294,600,000.00
Payable to Land Bank Commissioner
40,600,000.00
to Governor of }arm Credit Administration
Payable
Callable by Farm Credit Administration for expenses of regional
3,541,234.83
agricultural credit corporations
2,573,924.17
Liability for funds held as cash collateral
Proceeds not yet disbursed—
123,024,430.85
Loans under Section 5
169.736,788.57
Loans and contracts for self-liquidating projects. Section 20Ia
Loans for repair or reconstruction of property damaged by
8,835,394.00
earthquake, &c
Loans under Section 201c, for financing sale of agricultural
49,479,049.41
surpluses in foreign markets
1,552,317.48
Loans to institutions under Section 20Id
101,000.00
Loans secured by preferred stock banks and trust companies.
3,500,000.00
(Agricultural Adjustment Act)
Loans to Secretary of Agriculture
15,001.00
Relief authorizations (1932 Act)
25,162,005.46
Relief grants (1933 Act) (5)
31,021.36
Advances for care and preservation of collateral
Subscription authorizations preferred stock banks and trust com4,757,500.00
panies
13,182,344.38
Cash receipts not allocated pending advIces
5,179,970.28
Miscellaneous liabilities (including suspense)
31,229.67
Liability for funds held pending adjustment
1,520,440.27
Unearned discount
294,120.84
payable
Interest refunds and rebates
18,518,004.34
Interest accrued
8,509,71
Deferred credits—income on collateral purchased
1,690,000,000.00
Series "C" 33y % notes
500,000,000.00
Capital stock
17,804,757.73
Surplus Dec. 31 1932
Interest, earned, less interest and expenses (Jan. 1 1933, through
13,389,163.59
Aug. 311933)
4
$3,258,809,207.5
Total
•
NOTES.
amended by the
(I) Section 2 of the Reconstruction Finance Corporation Act, as
of the
Federal Home Loan Bank Act, provides that "In order to enable the Secretary
subscribed for
Treasury to make payments upon stock of Federal Home Loan banks sum of 5125.by him in accordance with the Federal Ilome Loan Bank Act, the
allocated
000.000, or so much thereof as may be necessary for such purpose, is hereby the Corof
and made available to the Secretary of the Treasury out of the capital obligations
proceeds of notes, debentures, bonds and other
poration and (or) the
by the SecreIssued by the Corporation." The amount of such stock subscribed for
tary of the Treasury is $124,741,000.
Loan Act of 1933 provides that "the Board
(2) Section 4b of the Home Owners
amount of capital
(Federal Home Loan Bank Board) shall determine the minimum Is authorized to
and
stock of the Corporation (Home Owners Loan Corporation) as may be necessary,
amounts
increase such capital stock from time to time in such
shall be subscribed
but not to exceed in the aggregate $200,000.000. Such stock

Financial Chronicle

Volume 137

for by the Secretary of the Treasury on behalf of the United States, and payments
for such subscriptions shall be subject to call in whole or in part by the hoard and
shall be made at such time or times as the Secretary of the Treasury deems advisable,
In order to enable the Secretary of the Treasury to make such payments when
called, the Reconstruction 1 Mance Corporations authorized and directed to allocate
and sake avallAble to the Sectettry of the Treasury the sum of $200.000,000, or so
much thereof .a3 may be necessary, and for such purpose the amount of notes, bonds,
debentures or other such obligations which the Reconstruction 1 Mance Corporation
Is authorized and empo ,ered under Section 9 of the Reconstruction Finance Corporation Act, as amended, to have outstanding at any one time, is hereby increased
by such no .Lt' es may be necessary." The amount of such stock subscribed for
by the Secretary of the Tressury is $200,000.000.
(3) SectIon 2 of the RFC Act, as amended, made available to the Secretary of
Agricult. re $200,000,009. Of this amount $135,000,000 was paid to him, of which
$20,000, 00 was returned to the corporation. Of the $85,000,100 difference $44,,
500,000 was reaPocsted as capital of the Regional Agricultural Credit Corporations
(Section 201 (e Emergency Relief and Construction Act of 1932). The ran (tinder,
340,000.nt.0. Is a,
(ursine to the uovernor of the ICA,under the provisions of Section
6(a)(1) of tne Farm CrLdit Act of 1933.
(4) Loans under Section 5 of the RFC Act to aid in the reorganization or liquidation of closed banks have been authorized in the aggregate an SUM of $272 4 9 .
.
760.95, of which $10,824,673.01 has been canceled. After taking into consideration
repayments of $50,382,550.67, items (4) of the balance sheet include the balance of
$145,195,279.49, representing proceeds disbursed (less repayments), and $56,087.257.78, representing proceeds not yet disbursed.
(5) Under the provisions of the 1 ederal Emergency Relief Act of 1933 the COITOMVon is authorized and directed to make available $500.0(.0,000 for expenditure by
the Federal Emergency Relief Administrator, payment to he made by the corporation upon certificate of the Federal Emergency Relief Administrator.
*

*

•

In addition to loans and other authorizations reflected on the statement of condition, the corporation has approved in principle loans in the amount of 8324,645,247
and purchases of preferred stock and debentures of banks and trust companies in
the amount of $58,290,000 upon the performance of specified conditions.
This statement of condition does not take into ens sideration expenditures incurred but not paid by the corporation at the close of bIALESS Ang. 31 1933, nor
Income of Regional Agricultural Credit Corporations whose capital stock was sub(gibed by the corporation.

H. N. Stronck Appointed Assistant to Director of
FDIC, Washington.
H. N. Stronck, formerly of Tucson, Ariz., has been appointed assistant to Director E. G. Bennett of the Federal
Deposit Insurance Corporation, Washington, Mr. Bennett
announced Sept. 27. He will assume his new duties at
once. The announcement further said:
Mr. Stronck was at one time special counsel on technical matters for the,
Comptroller of the Currency, while he also served as a special National
bank examiner. In addition, he formerly was senior partner of the H. N.
Stronck Co., bank management consultants of Chicago. Ill.
Besides Mr. Bennett, directors of the Federal Deposit Insurance Corp.
are Waher J. Cummings, chairman, and J. F. T. O'Connor, Comptroller
of the Currency.

Appointment of New Examiners to Examine into
Qualifications of Banks for Membership in Federal
Deposit Insurance Fund.
Under date of Sept. 29 Associated Press advices from
Washington said:
The Federal Deposit Insurance Corp. announced to-day the appointment of 99 new bank examiners to look into qualifications of banks for
membership in the deposit guarantee fund to be subscribed by the Government, the Federal Reserve banks and member banks. The corporation will
start guaranteeing bank deposits after Jan. 1. The force will supplement
the present staff of National bank examiners now under the direction of the
Comptroller of the Currency. Others are to be named later.

Letter to Banks By RFC Urges the Sale to Latter of
Banks' Preferred Stock—Move For Qualification
For Membership in Deposit Insurance Corporation
—Attitude of New York Banks.
The Reconstruction Finance Corporation has sent letters
to all of the banks in the United States recommending to
them that they sell preferred stock to the Corporation to
put them in condition for admission to the Deposit Insurance
Corporation when it begins to function, in accordance with
the provisions of the banking act of 1933, next Jan. 1. The
New York "Herald Tribune" of Sept. 23, from which the
foregoing is taken, further said:
This letter, which the RFC has sent out to banks far and near, follows
up the statement by Jesse H. Jones, Chairman of the Corporation, in
Chicago more than two weeks ago,that he would like to see the Government,
through the RFC, become a partner in all the banks of the country. With
the RFC the owner of preferred stock of all the banks, this partnership
would be achieved.
It was learned yesterday that the RFC officials and directors of the
Deposit Insurance Corporation were interested in persuading the large New
York banks to participate in the stock plan. Tentative discussions have
been held along this line, and strong indications have been given by local
bankers that they are willing to "go along" with the plan, if the authorities
think it advisable. Mr. Jones was able to approach bankers here informally
on the proposal when he came up from Washington last week.
Amounts Not Specified.
Discussions with New York bankers have not yet proceeded to the point,
however, of asking them to sell any definite amount of preferred stock to
the RFC. The amount would in all probability be nominal, but it would
have the effect, it was felt, of having the banks present a united front on
the preferred stock issue.
Local banks have a considerable amount of excess reserves now, the
total reaching up to around $170,000,000 on Wednesday night (Sept. 20),
and any preferred stock which they sold would be somewhat of an expensive
luxury for them. The preferred stock is supposed to carry a 5% dividend.
which is a rather higher return than the banks are now getting on their
loans and investments generally. But the expense would not be heavy,
it WM held, If the amounts were kept nominal.
Confer IVith Reserve Officials.
It is learned that bankers from various towns and cities in this District
are being called in to the Federal Reserve Bank here to discuss with officials
the details of the most recent examination of their institutions, and steps
are being taken to have every bank statement in shipshape condition.




2387

Those having charge of the deposit insurance work, bankers here say,
have every confidence that they will be able to give all banks their closest
attention and have all of them in shape to meet the entrance requirements.
The requirement laid down is that every bank have good assets equal at
least to its deposit liabilities. Preferred stock is one means of achieving
this balance.
Some of the bankers in other centers are balking at selling preferred stock
to the RFC unless the big New York banks participate in the plan. Appearone s y sterday suggested that the local banks would not be averse to
,
participating.

In the New York "Times" of Sept. 24 it was stated that
the larger banks in this city are strongly opposed to the
suggestion of the RFC that they should lead the way in
selling preferred shares of their institutions to the Government. From the same account we also quote:
The argument of the banks here is that if they sold only a small amount
of preferred stock to the RFC, it would be apparent to everyone that thr•y
were merely making a gesture, while if they were to sail a substantial
amount, equal to. say, 25 to 50% of their present capital funds, and if all
other banks throughout the country followed suit, the RFC would be put
to a tremendous outlay of funds, and banks, already surfeited with money
for which they can find no useful employment, would be left with a large
amount of unneeded capital, costing them 5%.
As a consequence the banks here feel that in asking them to sell preferred
stock to the RFC, the Government is making a request that can bring
little practical good and that can cause them inconvenience and itself
needless experse. Some of them take the stand that if the Government
insists on its point, they ought to accede, however much their inclinations
and judgment are opposed. Others will oppose probably the plan to the end.
If the RFC continues to insist on sales of preferred stock by the larger
banks which have no need of capital, it is considered likely that the banks
will attempt to reach a uniform stand on the subject through conferences
among themselves and with Government officials. Thus far, however,
they have not felt the issue pressing enough to call for a conference.

From Washington Sept. 22 a dispatch to the "Herald
Tribune" said in part:
The President, it became known, 113 definitely committed to a program
providing banks with more capital as a step in the development of the
Depositors' Guarantee Corp. to be set up in January to provide governmental guaranty of deposits up to $2,500. He realizes that many of the
banks, although solvent, do not feel that they are sufficiently liquid to
make the loans desired to support the recovery effort. The President, it
was explained, is going to see that they are made sufficiently liquid.
It was apparent further to-day that banks have not responded in the
manner expected to the proposal of the RFC to make loans at 3% for a
six months' period provided they were reloaned at 5% to supply industry
with the funds necessary to meet the requirements of the recovery program.
Few applications have been received, it was learned, after the President
conferred briefly with Jesse H. Jones, Chairman of the RFC. Mr. Jones
still places confidence in the development of community mortgage companies
to borrow from the finance corporation, and also in the purchase by the
finance corporation of preferred bank stock.
If these plans should not produce the desired result, it was indicated
that serious consideration might again begiven to the idea of reviving the
war-time credit corporation, or creating an agency along similar lines, to
extend loans at reasonable rates to small industries struggling to meet the
requirements of the NRA. Discussion of this idea, which has appeared
before in the Administration's dealings with the problem, has suggested
that it might be financed jointly with funds provided by private interests
and the RFC.
The declaration that action will be taken looking toward the release of
closed bank assets was interpreted generally as a reply to the statement
Issued last week by Walter L. Smith, President of the Federal Reserve
Advisory Council, in which he advised the banks not to make loans not
collectible within a reasonable time or eligible for rediscount at Federal
Reserve banks.
Mr. Smith's statement, it was later learned, was actuated by a feeling
in the advisory council that if the President desired to Innate credit, he
should do so by exercising his authority to issue Treasury notes for releasing
the funds of closed banks.

The call upon the banks by Jesse H. Jones of the RFC
to issue preferred stock was made in an address before the
annual Convention of the American Bankers' Association,
given in our issue of Sept. 9, page 1880, as well as in our
annual American Bankers' Convention number, issued
Sept. 23.
President Roosevelt Urges Cities to Speed Requests for
Allotments from $3,300,000,000 Public Works Fund
—Message to Conference of Mlyors Asks Prompt
Action on Construction Projects—Secretary Ickes
Denies Red Tape Impedes Loans—Sees Fund
Exhausted by Jan. 1.
The cities of the nation were urged to send immediately to
Washington their requests for allotments from the $3,300,000,000 public works fund, in a mesqn.ge sent by President
Roosevelt on Sept. 22 to the Conference of Mayors, meeting
in Chicago. In his message the President pledged that
allocations would be made with all possible speed. The
message was sent through Mayor Curley of Boston, President
of the Conference and read:
May I send through you, my personal greetings to the mayors who are
assembled in Chicago. I hope that during your deliberations you will
consider carefully the relationship of your States and subdivisions to the
recovery program of the Federal Government.
Congress has appropriated $3.300.000.000 to finance a comprehensive
program of public works, in part for Federal projects. Approximately
$1,600,000,000 already have been allocated. We are at the point now
where the States and municipalities interested in public works projects
should come forward quickly with proposals which will give immediate
work to their unemployed.
We want to co-operate to the fullest possible extent, and I assure you
that after your projects have been passed upon by the State Advisory
Boards they will be acted upon in Washington with a minimum of delay.

2388

Financial Chronicle

We will match speed with you. The money is available and we want to
put men to work.

Addressing the Conference on Sept. 23, Secretary of the
Interior Ickes declared that red tape was not impeding the
lending of public works funds, and said that "in many
parts of the country the Federal Government in offering a
grant of 30% and a loan of the other 70% was regarded as an
ungenerous or even niggardly stepfather." He added that
legal technicalities in local constitutions have been chiefly
responsible for delays. Mr. Ickes said that the Federal
Government would pay no attention to demands from
States and cities that the public works money be allocated
directly to the States for expenditure in any way they saw fit.
Any such system, he remarked, might result in inequalities
in distribution and might lead to charges of fraud or discrimination against certain sections. Before the formal
conclusion of the Conference, the 80 Mayors present passed
a resolution calling on the Federal Government to begin
with all possible speed the expenditure of $3,300,000,000
provided for public works to furnish employment. The
resolution added that unless some more simple system of
allocating the money is devised, "it will be difficult, if not
impossible, to prevent great suffering and possibly starvation
in all sections of America during the winter of 1933-34."
Before leaving for Chicago on Sept. 22, Mr. Ickes said
that enough worthy projects are before the PWA or in course
of preparation, to exhaust the $3,300,000,000 fund by Jan. 1.
Mr. Ickes on the same day announced the allocation of
$13,442,350 from the fund for the financing of several
Federal and non-Federal projects, of which the largest was
an allotment of ,990,000 to Cleveland for sewerage improvements. Other allotments on Sept. 22 included a grant
of $194,000 for the construction of incinerators in Cleveland,
$290,000 for sewer work in Louisville, $1,775,000 for construction of a lock and dam on the Savannah River below
Augusta, Ga.; $1,520,000 for a lock and dam on the Cape
Fear River in the vicinity of Wilmington, N. C.; $250,000
for a survey and investigation of the Bonneville Dam project
on the Columbia River, Ore., and $53,350 for repair of
public buildings in the Virgin Islands.
Other recent allotments of the PWA included $971,550
on Sept. 19 for the Department of Agriculture; $54,709,358
on Sept. 20 for construction and reconditioning work at 32
army posts in 19 States, and $14,800,000 on Sept. 21 to the
Coast Guard for equipment to combat an anticipated increase in smuggling in the event that the prohibition amendment is repealed. This last allocation will provide for immediate construction of seaplanes, patrol boats and cutters.
On the same day, the PWA approved an allotment of
$1,000,000 for construction of a seawall at Fort Monroe, Va.
Misunderstandings Relative to Liabilities Under Federal
Securities Act and Extent of Damages Recoverable
Clarified in Letter of B. B. Bane of Federal Trade
Commission's Securities Division.
Due to misunderstandings current with reference to the
liabilities imposed under Section 11 of the Federal Securities
Act and the extent of damages recoverable thereunder for
any violation of its provisions, the Federal Commission on
Sept. 22 made public an explanatory letter written by the
Chief of its Securities Division, Baldwin B. Bane. The
Commission points out that Section 11 of the Act has to
do with the liabilities for false registration statements of
persons, usually officials of a company, who sign such a
statement. The letter takes up:
(1) Recovery of damages by a person suing under Section 11 (e) in cases
where he may have sold his stock at a price in excess of the offering price:
(2) The probability of an underwriter's liability exceeding the aggregate
amount at which the securities were offered to the public; and
(3) The standards set up in the Act as to what facts must be disclosed
by an issuer of a security.

According to the conclusions of Mr. Bane, "the damages
recoverable under that paragraph [Section 111 must be
computed on the basis Of cost to the plaintiff not exceeding
the price at which the security was offered to the public.
In other words," he saii, "if the plaintiff had disposed of
the security at a price in excess of the offering price, no
damages would be recoverable." Mr. Bane also holds that
"both theoretically and practically there is no probability
of an underwriter's liability exceeding the aggregate amount
at which the securities were offered to the public." In
the concluding paragraph of his letter Mr. Bane says:
An omission of a material fact in order to create liability under Section 11
must be one of two types. It must either be an omission of a fact required
to be stated in the registration statement or it must be an omission of a fact
which renders the statements made in the registration statement misleading,




Sept. 30 1933

and, in both of these instances the omission must be of material facts. To
say in the light of this that the "practical effect" of the Act is substantially
to make an underwriter a "guarantor against failure to disclose every
material fact," neglects the express qualifications in Section 11(a) itself, to
say ntohing of the provisions of that section which absolve a person of
liability, if such person be not the issuer, if in any case he can prove that he
exercised reasonable diligence such as that common to persons occupying
fiduciary relationships."

The text of Mr. Bane's letter follows:
Sept. 5 1933.
Mr. S
New York, N. Y.
Dear Sir:
I beg to acknowledge receipt of your letter of Aug. 31, enclosing a copy
of an opinion rendered by
, making certain observations with reference to liabilities imposed by the Securities Act of 1933.
Allow me to make the following observations upon their conclusions with
reference to each of the numbered questions:
1. The contention is advanced that 11 (e) of the Securities Act may
permit a person who sues under paragraph (2) thereof to recover damages
In cases where he may have sold his stock at a price in excess of the offering
price. This contention neglects the relationship of paragraph (2) of this
section to paragraph (1). Paragraph (2) gives an alternative remedy for
damages only where the person suing no longer owns the security. Where he
owns the security, he can recover back the consideration paid for it, but
under Section 11 (g) this cannot exceed the price at which it was offered to
the public. But an alternative remedy is provided, in order not to compel
the holder of a security in order to have a remedy to hold that security
until he is enabled to bring suit. Instead he may seek to cut his losses, so
far as he is able, by disposing of the security. This obviously should not
deprive him of a right which he would possess if he continued to hold the
security. Viewed in this light the alternative right given by paragraph (2)
is really derivative from (1), and consequently the damages recoverable
under that paragraph must be computed on the basis of cost to the plaintiff
not exceeding the price at which the security was offered to the public. In
other words, if the plaintiff had disposed of the security at a price in excess
of the offering price, no damages would be recoverable.
The other view neglects both the relationship of the one paragraph to
the other and the practicalities of the situation.
2. The question as to whether it is at all possible for an underwriter's
liability to exceed the total amount raised from the public plus interest
thereon, must be approached with one caveat. Our legal system, adequate
or inadequate as it may be, on occasions does bring about the conviction
and execution of the innocent despite the safeguards with which we surround
the accused. Your question must then be reduced to the more reasonable
one as to whether such a legal happening is at all likely.
Such an occasion could happen only as the result of a series of suits
occurring under paragraph (2) of Section 11 (e) upon the same security by
different plaintiffs, because, as I indicated above, the individual recovery
granted to any one plaintiff could not exceed the price at which the security
was originally offered to the public by the underwriter. Examination of the
basis for liability under Section 11—a matter which finds no consideration
In the opinion submitted—shows that liability is rested upon damage consequent to material misstatements or misleading or inadequate misstatements of a material character in the registration statement. "Material"
in this connection, as is abundantly illustrated by the cases under the
English Companies Act, has a relationship to the purported value of the
security as reflected in the offering price. Of course, everything that is
required to be stated in the registration statement is prima facie material,
but it takes little ingenuity to find matters required to be stated in that statement which, even though mis-stated, could not be deemed as material misstatements. Pursuing this thought further, one sees immediately that
trading losses as distinguished from losses
e to material, misleading or
Inadequate statements as of the time of offering the security, afford no
ground for action. Totaling the former type of losses in the hands of successive holders of the same security may very well bring a sum in excess of
the offering price of the security. But totaling the latter type of losses as
a maximum can theoretically never exceed the price at which the security
was offered to the public. Thus traders whose successive transactions have
been liquidated prior to the market's discovery of any fault in the'registration statement would have no claim for market losses. Theoretically
there may, indeed, be successive actions for "faulty registration losses,"
but practically one doubts whether the first such action will not in almost
every case absorb the entire amount ofsuch loss. Thus both theorectically
and practically there is no probability of an underwriter's liability exceeding
the aggregate amount at which the securities were offered to the public.
3. The third contention advanced is that there is no standard set by the
Act as to what facts must be disclosed by an issuer, for it is stated that the
failure to disclose any material fact may involve the persons designated in
Section 11 in liability.
Frankly it is difficult to see just how such a conclusion can oven be
seriously advanced in view of the explicit statements in Section 11 especially
when contrasted with the difference in language used in Section 12. Section 11 places liability for omission where a person has "omitted to state a
material fact required to be stated therein (1. e. in the registration statement)
or necessary to make the statements therein not misleading." Section 12
makes no such qualification inasmuch as it is not necessarily tied to the
registration statement in the manner that Section ills. This conclusion
is obvious on the face of the language but it gets even further emphasis
from a sentence in that important interpretative document,the Statement
of the Managers on the Part of the House. I quote from page 26 of that
document:
"The House Bill made the liability depend upon the making of untrue
statements or omissions to state material facts. This phrase has been
clarified in the substitute (I. e. the bill as enacted) to make the omission
relate to the statements made in order that these statements shall not be
misleading, rather than making mere omission (unless the act expressly
requires such a fact to be stated) a ground for liability where no circumstances exist to make the omission in itself misleading."
In other words an omission of a material fact in order to create liability
under Section 11 must be one of two types. It must either be an omission
of a fact required to be stated in the registration statement or it must be
an omission of a fact which renders the statements made in the registration
statement misleading, and in both of these instances the omission must be
of material facts. To say in the light of this that the "practical effect"
of the Act is substantially to make an inderwriter a "guarantor against
failure to disclose every material fact," neglects the express qualifications
in Section 11 (a) itself, to say nothing of the provisions of that section which
absolve a person of liability, if such person be not the issuer, if in any case
be can prove that he exercised reasonable diligence such as that common to
persons ocupying fiduciary relationships.
Very truly yours,
BALDWIN B. BANE,
Chief of the Securities Division."

Volume 137

Financial Chronicle

Ruling of Federal Trade Commission Confers Power
to Amend Registration Statements Under Federal
Securities Act on Person Authorized to Receive
Communications from Commission Concerning
Securities Filed.
The Federal Trade Commission announced on Sept. 22
the adoption of a rule under the Federal Securities Act conferring certain powers upon the person who is designated in
each registration statement as authorized to receive all communications from the Commission concerning the security
issue filed for registration. The Commission's announcement
said:
According to the new ruling, such person shall have power to amend the
registration statement by altering to a subsequent date the date of the proposed offering of the securities registered; power to withdraw the registration statement or amendments thereto; and power to consent to entry of
an order by the Commission prior to effective date of the registration refusing to permit the registration statement to become effective until It has
been amended in accordance with the order.
A consent order entered by the Commission under this ruling is to be
"without prejudice to the right of the registrant thereafter to have such
order vacated upon a showing to the Commission that the registration
statement as amended is no longer incomplete or inaccurate. . . ."
Accompanying the rule is an explanatory note covering the arbitrary
delaying of the proposed date of offering of a security in instances where
the registration statement is incomplete or inaccurate, but "can be corrected with ease by an amendment." The purpose is to permit of a method
whereby an extension of 20 days can be afforded to registrant so as to
allow him, without threat of stop order proceedings, time to make and tile
the necessary amendments. The procedure is designed with the idea of
permitting the Commission not to make a record against a registrant who,
the Commission has reason to believe, is ready to conform to the Act.
Under this procedure the Commission can afford him sufficient time to
make his registration statement conform to the Act, at the same time preventing him from selling securities until the necessary amendments shall
have been made.
Other rules adopted by the Commission pertain to (1) the withdrawal of a
registration statement or an amendment thereto; (2) amendments filed
pursuant to an order oi the Commission; (3) a deilnition oi "distribution"
as used in Section 2 (11) of the Act; and (4) the incorporation by reference
of exhibits filed with previous registration statements. The purpose of
the last named rule is merely to facilitate the second and subsequent registrations, and to avoid a filing of unnecessary exhibits with such registrations.

The full text of the new rules follows:
Amendments Filed Pursuant to an Order of the Commission.
An amendment made prior to the effective date of the registration statement shall be deemed to have been made pursuant to an order of the Commission within the meaning of Section 8 (a) of the Securities Act so as to
be treated as part of the registration statement only when the Commission
shall, after the filing of such amendment, find that it has been filed pursuant to its order.
Withdrawal of Registration Statement or Amendment Thereto.
Any registration statement or any amendment thereto may be withdrawn
upon the request of the registrant if the Commission consents thereto.
The fee paid upon the filing of such registration statement shall not be returned to the registrant. The papers comprising the registration statement
or amendment thereto shall not be removed from the files of the Commission
but shall be plainly marked with date of the giving of such consent and in
the following manner: "Withdrawn upon the request of the Registrant,
the Commission consenting thereto." Such consent shall be given by the
Commission with due regard to the public interest and the protection of
investors.
Conferring of Powers of Amendment. Withdrawal and Entry of Consent Order.
(1) All registrants shall hereafter center upon the person designated in
the registration statement as the person authorized to receive service and
notice of all notices, orders, communications and other documents which
may be issued by the Commission in connection with the registration
statement:
(a) a power to amend the registration statement by altering to a subsequent date the date of the proposed offering of the securities for which the
registration statement is filed: and
(b) a power to withdraw the registration statement or all amendments
thereto, or an amendment made by virtue of the power conferred in paragraph (a) above; and
(c) a power to consent to the entry of an order issued under Section 8 (b)
of the Securities Act, waiving notice and hearing, such order being entered
wi,hout prejudice to the right of the regcstrant thereafter to have such order
vacated upon a showing to the Commission that the registration statement
as amended is no longer incomplete or inaccurate on its face in any material
respect.
(2) The naming of a person in accordance with the forms promulgated
by the Commission as a person authorized to receive service and notice
of all notices, orders, communications and other documents which may be
issued by the Commission in connection with the registration statement,
shall be deemed also, unless there is an express statement to the contrary.
as an authorization by the registrant of the person so named as having the
powers specified in paragraph (1) of this rule.
Explanatory Note.—The Commission upon finding that a registration
statement is on its face incomplete or inaccurate, or includes an untrue
statement of a material tact or omits to state a material fact required to
be stated therein or necessary to make the statements therein not misleading, but also finding that such incompleteness, inaccurace, untruth or
omission can be corrected with ease by an amendment, and recognizing
that the case is not one that requires immediate steps to be taken to issue
an order under Section 8 (b) or 8 (d) of the Securities Act, but recognizing
that it is desirous that no securities for which such registration statement is
filed should be legally sold until the necessary amendments shall have been
made. may thereupon request the person referred to in the above rule to
file an amendment prior to the effective date of the registration statement
delaying the proposed date of the offering of the securities for which the
registration statement is tiled. Such amendment, which may under the
above rule be filed by the person named in the above rule, if filed prior to
the effective date of the registration statement, will under Section 8 (a)
of the Securities Act automatically delay the effective date of the registration statement for 20 days after the filing of such amendment, until
and unless some further action is taken by the Commission. The other
necessary amendments properly executed may thereafter be forthcoming.
Upon their filing the Commission can consent to such filing, with due regard
to the public interest and the protection of investors, thereby making such
amendments part of the registration statement. Such a procedure does




2389

not necessitate delaying the original effective date of the registration statement, if the amendments are duly e .ecuted and filed prior to such date.
At most, it necessitates a delay in the date or otfering the security for one
day, and even this day may be eliminated by requesting the withdrawal
of the amendment first filed. This procedure permits delaying the coming
el an etfective date when the registration statement unless amended is
inaccurate or incomplete. At the same time. it affords a registrant the
opportunity to amend without having initiated against him proceedings
looking forward to the issuance of an order under Section 8 (b) or 8(d).
Lack of co-operation on the part of a registrant by failing promptly to make
the necessary amendment, will require the Commission to initiate proceedings looking forward to the issuance of an order under Section 8 (b) or
8 (d).
A registrant may seek to avoid the making of such an amendment or
the initiation of proceedings looking forward to the issuance of an order
under Section 8(b) or 8(d) by requesting that his registration statement be
withdrawn or by requesting that an order of the type specified in paragraph
1 (c) of the rule above be entered.
Incorporation by Reference of Exhibits Filed with Previous Registration
Statements.
The issuer of a security for which a registration statement is in effect
may, in filing a subsequent registration statement, incorporate by specific
reference such exhibits or parts thereof which may have been filed with
any of its previous registration statements as it may choose. If the inclusion of additional items would be necessary to make such a reterence complete, the issuer will be deemed to have complied with the requirement, if
along with the reference, it also files such additional items. If alterations
have taken place in any document, a copy of which was filed as an exhibit
with a previous registration statement, the copy so filed may be incorporated
by reference. if the issuer files along with the reference a statement indicating all deletions, and containing the text ot all substitutions and additions,
and stating the date or dates on which such changes took effect. The
Commission, however, may refuse to recognize any incorporation by reference in any case where in the opinion of the Commission such incorporation
by reference is unclear or confusing.
.Distribution Under Section 2 (11) Defined to Include Certain Activities.
A person, the chief part of the business of which consists in the purchase
of the securities of any one issuer, its subsidiary and (or) affiliate and in
the sale of its own securities to furnish the proceeds with wlaich to acquire
the securities of such issuer, subsidiary and (or) affiliate, is to be regarded
as engaged in the distribution of the securities of such issuer, subsidiary
and (or) affiliate within the meaning of Section 2 (11).

Federal Securities Act Needs Change Roger W. Babson
Says—Financial Expert Points Out Law Curbs
Flow of Money to Industry.
Roger W. Babson is quoted in the following from Babson
Park, Mass., Sept. 16 (copyright), published in the Washington, D. C., "Post" of Sept. 17:
The Securities Act of 1933 has been the chief factor in practically drying
up new security offerings as well as refunding issues.
I am heartily in favor of the underlying purposes of the act—namely,
that the seller of securities should share with the buyer a definite responsibility.
However, I cannot believe that the Administration intended to pass
an act which, even though accomplishing its purpose, paralyzes the major
industries.
Effect on Financing.
Since the Securities Act became effective, investment bankers have
become ultra-cautious. The result has been the drying up of legitimate
financing. This works a great handship on industry and wage workers
as well as security houses and salesmen.
Much of the criticism aimed at the legislation is justified. I am sure
that automobile men would protest vigorously if a law were passed making
each salesman personally responsible for any defective part in every motor
car he sells, not for the first 90 days, but during its entire lifetime. Nobody
could afford to sell automobiles. The same is true with the Securities Act
of 1933.
To show how drastic has been the effect of this new program on security
offerings, let us review some financing statistics. For the first seven months
of 1933 new issues floated amountei to only $112,535.000. compared with
$5,802,127,000 for the same period in 1929.
Securities Offered in July.
Total corporate securities offered in July of 1933 amounted to M.954.000, against $111,871,000 in July. 1932. and $862.847.000 in July of
1929. Since 1929, new flotations have dropped 93%, and the corporate
financing business as a whole has been deflated 89%. While fears of inflation have also been a handicap, I believe the Securities Act has been
the real brake on financing.
Every reader knows that security houses put out many disreputable
issues in boom days, leaving the innocent public holding the bag. This
situation had to be remedied. At the same time it should be remembered that it is as difficult to stop an investor from choosing a poor security
as it is to keep a man from choosing a poor wife.
Truth in Securities.
As part of the "New Deal" program, the "Truth in Securities" bill
was enacted to place the responsibility for unwarranted and fraudulent
bond and stock offerings on those engineering the issue. It is ridiculous.
however, to allow such a law to destroy an essential business and handicap
recovery, even for such a good motive.
Prior to the enactment of the Securities Act of 1933, it was only nemssazy
to have all the facts accurate in offering securities. Under the new law,
however,the issuers are held personally responsible not only for the accuracy
of the figures presented but the omission of any material facts.
This provision has so frightened security houses that they do not dare
to attempt any financing and lay themselves open to law suits and prosecutions. Moreover, investment bankers are held liable for statements
by word of mouth as well as by printed circulars. This section of the new
legislation has been the chief target of criticism.
Defeating Its Purpose.
Before any new bonds or stocks can be offered to the public it is necessary to register the issue. To prevent the omission of any motorist facto,
such registration requires the filing of voluminous information with the
Federal Trade Commission.
I was surprised to learn that one large holding company prepared 100,000
sheets of data to comply with the provisions of the ct. Naturally, the
average investor has neither the time nor the inclination to wade through
this mass of statistics.

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In this way, much of the vital information concerning companies completely escapes notice. Thus, instead of teaching investors to study
securities more carefully before they invest, this huge volume of material
actually discourages them. The act then defeats its main purpose.
One Unfortunate Effect.
One of the most unfortunate effects of the "Truth in Securities" Act
to date has been its failure to eliminate tipster sheets and stock promoters.
Re ent activity in securities has brought out a flood of new tipsters and
renewed the energies of old ones. The public, under the impression that
new securities now offered under the new law must be sound, have placed
their funds In various promotional and fake stocks.
Gold mining, television, rayon and brewing enterprises have mushroomed up all over the country. In unconsciously protecting this particular phase of fraudulent security selling, the new program has missed
Its mark.
Sentiment to Modify Act.
Already there is a huge public sentiment in favor of modifying and
softening the provisions of the law. This sentiment is growing every day.
It is said in well-informed circles that such modification is part of the
legislation now being considered in Washington.
Just what changes will be made, it is impossible to say at this time.
Something, however, must be done as it is rumored that investment bankers
will be forced to allow several sound companies with bonds maturing in the
near future to default on principal.
What does all this mean to the millions of people in the United States
who own no securities? They are not interested in how much money the
broker is making, how big are the bond salesmen's commissions, or whether
the investment banker is busy.

Federal Trade Commission to Open Hearings October 3
on Exemption from Registration Requirements
Under Federal Securities Act of Notes and Bonds
Secured by Real Estate Securities Rulings—Not
Broad Enough It Is Held.
In an effort to shape its regulations under the Securities
Act as closely as possible in accordance with the needs of
those coming under their scope, the Federal Trade Commission has decided to hold open hearings on disputed rulings,
it was stated in the "United States News" of Sept. 16, from
which we also quote:
The first of these hearings has been set for Oct. 3 and will deal with a recent exemption granted by the Commission to certain securities backed by
first mortgages and deeds of trust.
"Real estate and mortgage organizations of the country have requested
this hearing so that they may present their views and suggestions regarding
a rule adopted July 27 by the Commission," the official announcement of
the first hearing read.
The two classes of securities which were exempted and which will be discussed at the hearing, according to the Commission, are:
"First, the transactions where the entire mortgage or deed of trust is transferred with the entire amount of notes or bonds to a single purchaser at a
single sale.
"Second, the transaction where the notes or bonds secured by the mortgage or deed of trust are transferred to more than one person in more than
one sale, the number of notes or bonds so secured not to exceed 25."
These exemptions, the Commission explained, were made because "the
enforcement of the registration provisions did not appear to be necessary
in the public interest nor for the protection of investors because of the small
amounts involved and the limited character of the public offering."
Several objections to the ruling, all claiming that the exemption is not
broad enough, have been raised by mortgage companies. The exemption of
issues which are sold entirely to one purchaser, the first class mentioned
above, was unnecessary because such issues are not public offerings and
therefore do not come under the act, it is claimed.
The second exemption, that to issues of not more than 25 notes,should be
revised to set a limit not on the notes or securities Issued but on the number
of purchasers, mortgage men advocate.

At the time the Commission announced the adoption on
July 27 of the rule exempting from the requirements of
registration under the Securities Act of 1933 certain securities
it stated that enforcement of the registration provisions did
not appear to be necessary in the public interest nor for the
protection of investors, because of the small amounts involved and the limited character of the public offering.
Various conditions and requirements regarding transactions
in either class were stated specifically in the Commission's
ruling, full text of which follows:
Various conditions and requirements regarding transactions in either class were stated specifically in the Commission's
ruling, full text of which is as follows:
Notes and Bands Secured by Real Estate Mortgages.
The Federal Trade Commission in pursuance of the authority conferred
upon it by the Securities Act of 1933, finding that the enforcement of the
Act with respect to the following securities does not appear to be necessary
In the public interest and for the protection of investors by reason of the
small amount involved and the limited character of the public offering,
exempts the following securities from the requirement for registration when
offered, sold, extended, renewed, or exchanged to the public under the
conditions herein described.
(1) Notes or bonds directly secured by first mortgage (or deed of trust)
on a contiguous plot of real estate. or a leasehold (other than oil, gas or
mining leasehold) when the entire mortgage (or deed of trust) is transferred
together with the entire amount of notes or bonds to a single purchaser at a
single sale, if (a) neither the face value nor the offering price of such notes
or bonds exceeds $100.000; (b) If the commissions, discounts, brokerage
charges, and all other expenses to the borrower for procuring the loan do not
exceed a total of five percentum of the face value of the loan; (c) if, In the
case of a construction mortgage, the notes or bonds are plainly stamped or
inscribed with a statement that the security underlying them is of the nature
of a construction mortgage, subject to prior mechanics', materialmen's and
similar liens (the character of such similar liens being specifically described):
and (d) the aggregate face value of such notes or bonds (not including
Interest rates or coupons) secured by such mortgages (or deed of trust)
does not exceed 65 percentum of the fair market value of the real property
or leasehold on the date of the issue ofsuch securities.




Sept. 30 1933

2 Notes or bonds directly secured by first mortgage (or deed of trusty
on a contiguous plot of real estate or a leasehold (other than oil, gas, or
mining leasehold) if (a) neither the face value nor the offering price of such
notes or bonds exceeds $60.000:(b) if the real estate is not further removed
from the residence or place of business of the purchaser of the notes than 150
miles; (c) if the entire number of notes or bonds secured by the mortgage
or deed of trust is not in excess of 25: (d) if the commissions, discounts,
brokerage charges and all other expenses to the borrower for procuring the
loan do not exceed a total of five percentum of the face value of the loan:
(e) if in the case of a construction mortgage the notes or bonds are plainly
stamped with a statement that the security underlying them is of the
nature of a construction mortgage, subject to prior mechanics', materialmen's, and similar liens (the character of such similar liens being specifically described); (f) if the aggregate face value of such notes or bonds (not
Including interest notes or coupons) secured by such mortgage (or deed of
trust) does not exceed 65 percentum of the fair market value of the real,
property or leasehold on the date of the issue of such securities: (g) if the
Person offering such notes or bonds to the public is not controlled by or
Pecuniarily interested in, by way of stock ownership or otherwise, the
trustee (or person performing similar functions) under the mortgage (or
deed of trust), and such trustee or other person is not similarly controlled
by or pecuniarily interested in the person offering such notes to the public:
and (h) if the person offering the notes or bonds to the public sha 1 at the
time of their sale give the purchasers a written statement briefly setting
forth, and shall in all prospectuses dealing with such notes or bonds, briefly
set forth, (i) the person or persons who have examined the title to the
underlying property; (ii) the total amount of the notes or bonds authorized
under the terms of the mortgage (or deed of trust); (iii) the assessed value
of the underlying property as of the time of the sale of such notes or bonds
and the value for which it was appraised in connection with the mortgage
(or deed of trust) under which such notes or bonds are issued;(iv) the aggregate taxes assessed against the underlying property for the year prior to the
time of the sale of such notes or bonds, together with a statement of any
special assessments that may have been made against such property but
remain unpaid;(v) the rights of the noteholder or bondholder upon default
in payment of the interest or any amortization payment;(A) a description
of the underlying property, Identifying it and stating the purposes for
which it is to be used; (vii) the amount of insurance outstanding upon the
underlying property, Its character and the obligations of the mortgagor to
maintain the insurance: (v111) the nature of the amortization provisions, if
any; and (ix) the amount of commissions received or to be received by the
Person controlled or affiliated with him, for effecting such sale, extension,
renewal, or exchange.
Neither of the above exemptions shall apply to any such note or bond
where the payment of the principal or interest thereof is guaranteed by
some person other than issuer, unless such guarantor shal have filed a
registration statement in the form prescribed by the Commission, and a
prospectus based upon such registration statement is furnished to the purchaser at the time of sale.

List of Companies Filing Registration Statements of
New Issues With Federal Trade Commission Under
Federal Securities Act—Securities Registered Total
Approximately $225,000,000.
The Federal Trade Commission announced on Sept. 23
the filing of ten additional registration statements under the
Securities Act of 1933, bringing the total amount of securities
filed with the commission to approximately $225,000,000(revised). In its announcement of Sept. 23 the commission
said:
In no case does the act of filing with the Commission give any security
the approval of the Commission or indicate that the Commission has passed
on the merits of the issue, or that the registration statement itself is correct.

The list of registration statements is as follows:
Accumulative Royalties Corp. (2-221), Tulsa, Okla., a Delaware corporation, producers and marketers of crude oil and buyers, sellers and
owners of oil royalties and leases, dealing in certificate of interest in oil
and gas mining leases. Amount of offering, $50.000. Registration fee
paid the Commission is $25. Among officers are: Wade H. James. Tulsa,
President, and A. A. Scarpati, New York, Secretary.
Central Idaho Mining & Milling Co. (2-225), Seattle, Wash., an Idaho,
corporation, miners and millers of gold and silver. Amount of offering,
250,000 shares of common stock at a par value of
a share. Registration
fee paid the Commission is $25. Among officers are: II. W. White, Seattle,
President, and Stephen F. Chadwick, Seattle, Secretary.
Cram's, Inc. (2-224), Portland, Ore., an Oregon corporation, engaged
in mining and refining cinnabar ore and marketing quicksilver. Amount
of offering. $30,000 in common stock at a par value of $1 per hart*. Fee
paid the Commission,$25. Among officers are: Henry S. Cram, President,
and James Cram, Jr., Secretary-Treasurer, both of Portland.
Eagle Bird Mine, Inc. (2-227), New York, a Delaware corporation,
producers of gold, silver and other metals. Amount of offering, $187,500
in common stocks. Registration fee is $25. Among officers are: Edmond
B. Bronson, President, and Frederick C. Hart, Secretary-Treasurer, both
of New York. Underwriters are: Coronado Holding Corp., New York.
Faith Oil Corp. (2-226), Wichita Falls, Texas, a Texas corporation, oil
producers. Amount of offering, $200,000 bond issue. Registration fee
paid the Commission is $25. Among officers are: W. J. Green, Gilmer,
Texas, President, and S. A. Man, Wichita Falls, Texas, Secretary,
Gulf Coast Water Co. (2-229), Bay City, Texas. a Texas corporation
engaged in supplying water for irrigation to rice farmers and for industrial
uses. Amount of offering, $700,000 first mortgage 5% bonds. Fee paid
the Commission, $70. Among officers are: E. J. Croffoot, President, and
R. G. Wertz, Secretary-Treasurer, both of Bay City, Texas.
Kelly Gold and Sliver Mines, Inc. (2-228), Wilmingotn, Del., a Delaware
corporation, miner of gold and silver, proposes to issue 200,000 shares of
common stock at a par value not to exceed $10 per share. Registration
fee paid the Commission is $200, indicating total aggregate proceeds not
to exceed $2,000,000. Among officers are: Edward H. Fennessy, President,
and H. Tracy Rogers. Secretary-Treasurer, both of New York.
Mines & Metals Corp., Tucson, Ariz., (2-220), a Delaware corporation,
engaged in all phases of mining and dealing in gold, copper, silver and
other metals, proposes to issue 200,000 shares common stock at a par value
of $1 each. Registration fee is $25. J. Ryan,is Preisdent of the company,
and Ward L. Hill, Secretary-Treasurer, both of Tucson, Ariz. E. P. Gage,
Jacksonville, Fla., is underwriter.
Morgan Industries, Inc. (2-223), Dover, Del., a Delaware corporation,
manufacturers of electric devices and apparatus. Amount of offering,
$500,000 common stock. Fee paid the Commission, $50. Among officers
are: Morgan J. Lewis, President, and George W. Breyer, SecretaryTreasurer, both of Philadelphia.

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Financial Chronicle

New University Realty Co., Inc. (2-222), New Orleans, La., a Louisiana
corporation, a real estate holding company. Amount of offering in first
mortgage bonds is $250,000. Fee paid the Commisssion, $25. Officers
are: Walter Schuttler, President, and L. M. Nicolson, Vice-President and
Treasurer, both of Chicago. Underwriters are Nusloch, Bandon & Smith,
New Orleans.

Our last reference to the list of registration statements filed
with the Federal Trade Commission appeared in these
columns Sept. 23, page 2206.
Amended Registration Statement of Transcontinental
Precious Metals Co. Under Securities Act of 1933
Made Effective by Federal Trade Commission—
Statement of Southern Crude Corporation Withheld by Commission Pending Furnishing of Additional Data.
The Federal Trade Commission has made effective the
amended registration statement of one company against
which it had formerly issued an order suspending the effectiveness of its registration statement under the Securities Act,
and also issued a stop order against another company which
had failed to furnish all information required in its registration statement. Regarding this action, an announcement
issued by the Commission on Sept. 21 said:
Last month the Commission refused to permit the registration statement
of Transcontinental Precious Metals Co. (2-138). Flint, Mich., to become
effective until certain deficient data, principally in the advertising prospectus, were furnished the Commission. The company having amended
its registration statement under date of Aug. 24 and Sept. 1, 11 and 18,
the Commission now declares its statement in effect so that the securities
registered may now be placed on the market.
The Commission has suspended effectiveness of a registration statement
of Southern Crude Corp. (2-157), Los Angeles, until certain essential data
not appearing in the statement are furnished to the satisfaction of the
Commission. The company, among other things, failed to submit balance
sheets and profit and loss statements as well as an advertising prospectus.

The withholding of the registration statement of the Transcontinental Precious Metals Co. was noted in our issue of
Sept. 2, page 1706.
Limit of 30% of Income Which Purchasers Should Pay
for Homes Advocated in Report of Committee
on E:_onomic Policy of United States Building &
Loan League.
No purchaser of a home should contract to pay more than
30% of the family's income for his shelter, according to the
recommendations of the Committee on Economic Policy of
the United States Building and Loan League. The Committee reported, at Chicago, on Sept. 14, before the 41st annual
convention of the League, which is the trade association of
the building and loan institutions. The Committee emphasized that it was merely making recommendations, and
points made are not yet binding upon any individuals of the
League. The report said:
Prospective home owners should be discouraged from "saving" the downpayment by purchasing speculative subdivision lots, which are frequently
never used, because when the time for building comes, it is found advisable
to build in some other territory. Instead, they should be encouraged to save
the down-payment in a savings institution, thus developing habits of thrift
essential to the orderly repayment of a monthly mortgage.
No home should be purchased with less than 25% of the purchase price
paid in cash, unless the purchaser agrees and shows his ability to pay at
least 1 1i times as much as the monthly rental value of the home.
7

The Committee recommended that every State should have
a savings and loan supervisory department separate and distinct from every other financial institution's supervising
authority. It said:
Every savings and loan supervisory department should have as part of its
structure a board of three savings and loan managers, appointed by the
Governor of the State, to serve without compensation. Such board should
have advisory powers and should also have the power to determine broad
policies of the supervisory department.
Every Association should deal with each borrower individually, so far as
the foreclosure problem is concerned, keeping in mind social interests, the
point of view of the community, the Association's borrowers and its savers.
Where lending institutions adopt this policy, every general mortgage moratorium is inadvisable.
Every Association should make new mortgage loans totaling at least lh of
1% of its assets each month, if worthy loan applications are available.

HOLC a Temporary Institution to Supplement Activities of Federal Home Loan Bank System, According
to W. F. Stevenson of Home Loan Bank Board—
$6,600,000,000 of Home Mortgages Held by Building
and Loan Associations in United States.
Terming the Home Owners' Loan Corporation a temporary
institution to supplement the permanent activities of the
Federal Home Loan Bank System, William F. Stevenson,
Chairman of the Federal Home Loan Bank Board, addressed
the annual convention of the United States Building and
Loan League in Chicago, on Sept. 14. "Building and loan
associations hold $6,500,000,000 of home mortgages in the
United States. Savings banks which are eligible for membership in the Federal Home Loan Bank System just as the
building and loan associations are held $3,500,000,000 so that




2391

the classes for whom the System was devised hold half of all
the mortgages on homes in the country," said Mr. Stevenson.
He added:
Other institutions which have been engaged in the same business are
rapidly retiring from that field and it takes no profit to see that within a
few years the loans will be long-time and so amortized that the frugal owner
of the home can pay off his loan by reasonable monthly payment and loans
will be confined to institutions which will either be actual or potential
members of the Home Loan Bank System.
The System has grown since the 20th of March so quietly that little attention has been paid to it, but its loans actually paid out to its members are
now over $60,000,000 in contrast to about $10,000,000 when this program
was started. Its stock owned by members has risen to $15,000,000 and is
growing rapidly. Its banks are nearly all past the stage of paying off the
expense of organization and are making profits every week.

Speaking of the fact that the Federal Home Loan Bank
System would celebrate its first anniversary on Oct. 15, Mr.
Stevenson said that some of the regional banks in the System
are prepared to pay a dividend both to the Government and
to their stockholders. He further said:
While people short on information but long on idle assertions continue to
say it was a failure and has now disappeared, there is no sounder system of
finance than this Federal Home Loan Bank System in the entire country.
Its ability on a sound co-operative basis which has been a growth of more
than a century and had its roots in the American desire to own a home which,
next to love of life itself, dominates the aspirations of our citizens.
The building associations grew up, watered and fed by that sentiment,
and when they organized and made the fight for a great reserve system based
on business principles and guided by long experience, they wrested from a
hesitating Congress their system, not perfect, but workable, and capable of
improvement from year to year.
Unlike the National banks, who had to go into their system, although most
unwillingly, the associations left it to the choice of the potential members
to go in or stay out, and one year's experience was demonstrative that they
have recognized the merit of the plan and have corny in to the extent of
1,632 members, taking stock already to the amount named above.

Speaking of the Federal Savings and Loan Associations
which are provided for under the terms of the Home Owners'
Loan Act of 1933, Mr. Stevenson said that these are organized
and fostered wherever they do not conflict with established
institutions. He also observed:
They are not to be established for the benefit of promoters who desire to
use them to exploit their own schemes, but to encourage the plodding, frugal
and industrious man to save and find him the capital to become a home
owner; and that is the spirit of the law and the policy of the present Board.
In 10 years these associations will be a powerlul force in the great organization, as they must be members of the Home Loan Banks, and I predict
that the members of the Home Loan System will in that time hold 15
billion of the 20 billion mortgages on homes in this country. Member associations, if they desire, can convert into Federal associations, but the Board
makes no bid to induce them to do so. The States that created them must
consent, and no doubt will do so, or in many cases by charter rights conferred may hate done so already.

President Roosevelt in Letter to Senator Capper
Says Efforts Are Being Made to Speed Up Operations of FCA in Refinancing of Distressed Mortgages—Farm Loans Will Be Accelerated.
President Roosevelt, in a letter to Senator Capper, received yesterday (Sept. 14), gave assurance that the Government would speed up farm loan operations "to the end that
the refinancing of distressed mortgages may be accomplished
as rapidly as is consistent with sound business." The PresidOnt's letter, according to the Topeka "Capital" of Sept. 15,
was in reply to a letter which Senator Capper sent him recently complaining of the delay of the Farm Credit Administration in functioning for the relief of owners of mortgaged
farms. From the paper quoted we take as follows President
Roosevelt's letter:
The President's Letter.
My dear Senator Capper:
I am glad to have your recent letter in regard to the policies and operations of the Federal Land Banks. A tremendous responsibility has been
placed upon these institutions. It is highly important to agriculture and
to the Administration that they should carry out the mandates of Congress
in a vigorous and constructive manner.
Most of the criticisms voiced in your letter and the accompanying documents relate to delays in action on applications for loans and to the hardboiled attitude of those in active charge of Land Bank operations. It is
difficult for anyone not in close touch with the actual operation of the Land
Banks to realize the enormity of the burden that has been placed on them by
reason of the tremendous increase in the number of applications in recent
months. Governor Morgenthau, of the Farm Credit Administration, informs
me that during July the number of applications received by these banks
exceeded the total number received during the preceding 29 months. August
will run somewhat ahead of July.
Had to Change Old System.
AS you know, we inherited the Land Bank system and personnel. The
inevitable result of the operation of these institutions during 13 years of
continuously declining land values was an attitude of rather extreme conservatism. The Farm Mortgage Refinancing Act called for a complete
'flange of attitude, but this could not be effected immediately. In every
ease the officials of these institutions have expressed their wholehearted
belief in the present program of the FCA and are exerting every effort to
carry out these policies in a constructive manner.
I have been keenly interested in the success of the farm mortgage refinancing program, and have consulted Governor Morgenthau frequently regarding
its progress. He tells me that on May 12, when the bill was signed by me,
there were in all about 200 appraisers In all of the Federal Land Banks.
This force has been built up as rapidly as possible until, at the end of last

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Financial Chronicle

week, there were 1,498 commissioned appraisers actually at work and 834
additional men in training. This appraisal force will be increased as rapidly
as possible until it is large enough to handle applications more rapidly than
they are being received. For several weeks most of the time of the experienced appraisers was required in training new men in order to build up the
force to its present strength. While this has involved delay, it seems to have
been unavoidable under the circumstances.
To Speed Up Dire Cases.
Governor Morgenthau tells me that arrangements have been made to speed
up all cases where quick action is imperative. Where a considerable delay
is involved, the prospective borrowers are also being informed that they
can withdraw their appraisal fee until the approximate time when the application can be made. This will give farmers the use of the money until it is
powible to appraise their properties.
Considerable confusion has been caused by the fact that mortgage loans
have been made both on the ordinary Land Bank plan and also from the
$200,000,000 fund allocated to the Land Bank Commissioner by Congress.
This difficulty has recently been corrected by providing for one application
blank and one application fee for each borrower, regardless of whether his
needs will be met by one or the other type of mortgage loans or by a combination of the two.
During the entire year 1932 the total volume of farm mortgage loans
closed by all of the Federal Land Banks was slightly less than $28,000,000.
Although loaning operations were continued during the first five months
of this year at approximately the same rate as in 1932, the rate has been
speeded up so that the total volume of mortgage loans closed by these banks
during the eight months ending Aug. 31 amounted to slightly lees than
$30,000,000, and thus exceeded the total loans for last year. It is expected
that the volume of mortgage loans closed by these banks during September
will approximate the total for the first eight months of this year. Starting
at dead level in the middle of May, it has been impossible to gain full
momentum quickly. I believe, however, that it is safe to count on a continued increase in the volume of loans closed each month, DOW that the
machine has attained some momentum.
Appraisal Is Big Problem.
The question of appraisal is another problem of peculiar difficulty. It Is
manifestly impossible to loan the full face amount of the indebtedness of
many farmers who are in financial distress. All of the funds for making
Federal Land Bank loans come from the sale of bonds. The confidence of
investors must be retained if the program of refinancing is to be effective.
Since the passage of the Emergency Farm Mortgage Act, the Federal Land
Banks have attempted to appraise land on the basis of normal prices for
farm products, considering normal prices those received by farmers during
the five-year period immediately preceding the war. Mistakes in appraisal
have undoubtedly been made, largely because of the conservative phychology
resulting from the economic situation of agriculture in recent years. Every
effort is being made to correct this tendency and to make full and fair
appraisals and to loan all that sound business judgment will permit under
the law. Where mistakes seem to have been made, Governor alorgenthau
tells me that they will be glad to make careful, independent investigations
and to increase the amount to be loaned if such an increase is found to be
justified. In the past some loans have been refused because the officials of
the Land Banks found themselves unable to loan the full amount asked for.
The present policy is to offer to make a loan as large as can safely be made,
giving the prospective borrower the opportunity of obtaining such a scale.
down of his indebtedness as may be necessary under the circumstances.
Governor 3forgenthau assures me that every effort will be made to speed
up all operations of the FCA to the end that the refinancing of distressed
mortgages may be accomplished as .rapidly as is consistent with sound
business.
Very sincerely yours,
FRANKLIN D. ROOSEVELT.

Van Schaick Rules on Listing Mortgage Lien Holders—
To Give Names When Not Sought to Buy Up
Certificates Cheaply.
George- S. Van Schaick, Superintendent of Insurance of
the State of New York,in granting the application of Alber A.
and Rose Goldfluss for a list of mortgage certificate holders
in connection with a protective committee, declares that the
power to make public such lists rests with him under the
insurance law creating guaranteed mortgage participation
certificate protection corporations. He states that the
restrictive nature of the law was intended to give certificate
holders the benefits derived from a unified, competent and
non-profit making quasi public agency and not to create
chaos in connection with reorganizations pertaining to this
type of corporation. Mr. Van Schaick's statement, issued
Sept. 25, follows:
Article XII of the insurance law relative to guaranteed mortgage particiption certificate protection corporations was intended to give certificate
holders the benefits derived from a unified,competent and non-profit making
quasi-public agency. The need for such agency was made particularly
urgent since in many instances certificates in small amounts representing
interests in large issues had been sold to investors widely scattered throughout the State who have no means of communicating with each other or
forming associations among themselves to protect their common interests.
The indiscriminate release of lists containing the names of such investors
would lead only to a multiplicity of committees with attendant heavy
expense to investors, delay in accomplishing reorganization of certificate
Issues and further demoralization of the real estate market.
The Legislature, bearing in mind the chaos that has been and would be
created by the wholesale, unrestricted trafficking in lists of investors,
provided in Sectint 437 of Article XII that lists of certificate holders shall
only be furnished to applicants approved by the Superintendent of Insurance. in whom is vested rule-making power as to such applications. Sucl.
administrative control supplements Section 553 of the Penal Law which
makes it a criminal offense to traffic in original lists of 500 or more customers.
Since all lists of certificate holders are part of an original list which contains
In excess of 500 names, it is believed the statute is applicable.
The Superintendent has no desire to use the power to refuse lists except
Irsofar as it is necessary to protect the interests of the certificate holders.
Lists will be furnished to applicants acting in good faith, where the Superintendent is satisfied that a useful purpose will be served and that other
certificate holders will not be exploited.,




Sept. 30 1933

Where the information sought will be used to buy up certificates from
unsuspecting holders at a fraction of their true value and there is reasonable ground to believe such is the purpose, the information will not be furistied. The history of reorganizations has been marked by the use of lists
In some quarters to stir up needless litigation and promote selfish interests.
All the authority possessed by the Department will be employed to prevent
a recurrence of such activities.
I, The denial of an application should not necessarily be interpreted as a
reflection on the applicant. Such denial may be necessary to promote the
best interests of the greatest number of creditors. Lists may be denied
where the Superintendent believes that adequate steps are being taken for
the protection of the interests of the certificate holders. Public policy
demands prompt reorganizations and hearings on reorganizations already
under way should be facilitated and not hindered.
Mortgagors who seek the names of the participants in the mortgages on
their property will be granted such information if the request meets the
same test of good faith and sound purpose required of other applicants.

Steel Leaders Confer with President Roosevelt Re-Ton
garding Plan for Federal Financing of 700,000
Rail Purchase—Myron Taylor, Eugene Grace and
L. E. Block Agree to Compete for Business—
President Warns Price Must Be Under $40.
The Federal Government is prepared to lend to the railroads public works funds to finance the purchase of 700,000
tons of steel rails, provided steel companies will enter "the
lowest competitive bids," President Roosevelt told the beads
of three leading steel companies at a White House conference on Sept. 24. Those who attended the conference were
Myron C. Taylor, Chairman of the United States Steel Corp.;
Eugene G. Grace, President of Bethlehem Steel Corp., and
L. E. Block, President of the Inland Steel Co. J. F. Wilborn,
Chairman of the Colorado Fuel & Iron Co., had also been
invited to the conference, but he advised the President that
he had referred the invitation to the receiver for the company, who was en route to New York. President Roosevelt
presented his program as one which might stimulate both
steel production and railroad maintenance operations, with
consequent gains in emplpyment. Others who attended the
conference were Joseph Eastman, Federal Co-ordinator of
Transportation, and Donald Richberg, General Counsel of
the NRA. The Washington correspondent of the New York
"Times" described the conference, in part, as follows:
He made it very clear that the bids must be competitive, and that the
price must be less than $40 a ton, at present the standard for rails.
At $40 a ton, 700,000 tons would come to $28,000,000, and the steel
man indicated on leaving the White House that they were not unmindful
of what such an order would mean to their industry, now operating far
below capacity.
The President's bold stroke was looked upon as a major move in his program of "priming the pump of industry." It would have the two-fold effect
of stimulating the steel industry to greatly increased activity and pushing
up employment on the railroads.
Both from the point of view of the public good and from that of private
advantage it was apparent that it would be very difficult for the steel men
to say no.
This was evident from their brief comment on leaving the White House.
They had assured the President that such a large volume of orders within
the space of a few weeks would greatly stimulate their industry and lead
to increased payrolls.
While saying little, they were evidently impressed with the difficulty of
refusing to abandon in the emergency their standardized price.
"We are out for orders and are prepared to bid on any business that is
offered," was all that Mr. Taylor would say.
Asked whether the steel companies would consent to bid against one
another for the orders, he was interrupted by Mr. Grace, who remarked:
"All the other companies will compete with the United States Steel."
More absolute indications of their attitude was contained in reports from a
responsible quarter that all the steel men had told the President they would
bid on the rail orders.
Their reported consent was believed to be based on the present low state
of the rail business. In 1932 the production was only 402,566 tons as
against 1,157,751 tons in 1931. Thus the new orders would total more
than the entire rail business for 1932.
Mr. Eastman, who has been working on a number of plans to improve the
condition of the railroads, presented figures to show that the lines could use
more than 600,000 tons of steel rails, and indicated that orders might be let
for this equipment with little delay if the steel men agreed to competitive
bidding.
Mr. Eastman, after to-day's White House conference, refused to comment
in any way, saying that it was agreed among those present that any announcement or discussion of the project would ,be left to the President.

President Roosevelt Studying Plan to Finance Purchase
of New Rolling Stock by Railroads—Project Is
Extension of Rail-Buying Plan—Secretary Roper
Says Public Works Program Will Catch Up with
NRA Within 30 Days.
Capital goods industries will be stimulated by Federal
credit as the next step in carrying out the Administration's
credit expansion program, according to an announcement
by President Roosevelt to newspaper correspondents on
Sept.27 on his arrival at his home in Hyde Park, N. Y., where
he planned to spend several days. The President was reported as indicating that a study is being made of a plan to
finance the railroads out of emergency public works funds
in the purchase of rolling stock and other operating equipment. This project would be similar to that already suggested for buying steel rails, but would probably be larger

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in scope. It was said that the President had discussed the
matter with Joseph B. Eastman, Railroad Co-ordinator, before leaving Washington.
Further efforts to speed the public works part of the recovery program were revealed on Sept. 26 by Daniel C.
Roper, Secretary of Commerce, who told the National Association of Commercial Organization Secretaries, meeting
In New York City, that the works movement is now progressing rapidly and will be brought into line within the next
30 days. His comments upon public works activity were reported in part as follows in the New York "Times" of
Sept. 27:
Urging that local chambers of commerce help their communities in
furthering public works, Secretary Roper asserted that the lagging of the
program was not the fault of any one in Washington but was due to the
fact that, while large projects had been planned in advance, the projects in
smaller communities had not been ready.
"It takes time for local communities to properly investigate, decide
upon and engineer local projects," he explained.
"I think you will find in the next thirty days a very satisfactory approach
to co-ordination in the uniform frontage of line between the National Recovery Administration and the public works program, and a satisfactory development of purchasing power."
General Johnson is starting in the NRA a statistical study of the question
of prices and purchasing power in order to provide guidance "for all concerned," Secretary Roper said.
"But we cannot accomplish this price control except through industry
recognizing the importance of keeping up purchasing power. We can only
act as a clearing house for education."

NRA Urges Rapid Formation of Local Compliance
Boards to Protect Signers of Codes and Re-employment Agreements—To Take Action Against "Wilful
Chiselers."
Rapid organization of local compliance boards was urged
on Sept. 25 in a statement issued at NRA headquarters in
Washington by Boaz Long to all State and District Recovery
Boards. He emphasized that this action is essential to
afford complete protection to that part of industry and trade
which has signed codes and re-employment agreements. Mr.
Long's letter, stressing the importance of speedy formation
of local compliance boards, said:
You can now perform a most valuable and beneficial service by keeping a

close and friendly contact with the boards, thus insuring a uniform and
100% compliance. Those employers and employees vvho have unselfishly
and willingly signed the President's re-employment agreement must be protected from the small group of wilful chiselers who, through their selfish
motives, are jeopardizing' the success of the President's agreement. This
small group will rapidly increase if permitted to continue with its misuse of
the blue eagle. The surest method of effecting compliance and bringing this
minority into line is by the immediate creation and active co-operation of
all NRA compliance boards. To this end we ask your immediate
assistance.

In an accompanying letter to local NRA Chairmen, Mr.
Long wrote:
The National Labor Board is contemplating the establishment
of regional
agencies for labor dispute mediation, and it is requested that any
future
disputes brought to your attention should be immediately forwarded to
NRA
in Washington.
•

Eugene Grace, President of Bethlehem Steel Corporation Urges Use of Employee-Representation
Plan—Asserts Benefits of NIRA May Be Obtained
Without Affiliation with a Union.
Asserting that it is unnecessary for an employee of a
company to be affiliated with a labor union to derive benefits
from the NIRA, Eugene Grace, President of the Bethlehem
Steel Corp., writing in the current issue of the "Bethlehem
Review," declared that all the benefits of collective bargaining given under the act are available to the Bethlehem
employee without cost to him. Mr. Grace explained that
he issued his comment "in view of misleading statements
on the much-discussed subjects of the open and closed
shop, of union and non-union labor and in fairness to our
employees." He said:
In view of misleading statements on the much discussed subject of the
open and closed shop, of union and non-union labor, and in fairness of our
employees, I feel it my duty to say plainly that no Bethlehem employee
Is required to belong to a labor union to get the full advantages of collective
bargaining under the NIRA.
The Act provides for collective bargaining quite independent of an employee's affiliation or non-affiliation with any organization, union or otherwise. All these benefits of collective bargaining are afforded under our
employees' representation plan, without coat to the employee.
No outside agency could possibly take the place of our plan, without
destroying that all-essential direct contact and relationship so necessary
to insure to employees the best possible working and living conditions,
and to management, the co-operation of an intelligently informed body
of employees. Under the plan the employees have been kept constantly
advised, through their elected representatives, of the conditions of our
business, and the part they have played in counseling and originating
constructive labor policies is an attainment of which every employee can
well be proud.
The principles of our plan have been adopted by all other important steel
companies and by many lrage organizations in other industries. Meeting
the requirements of the NRA,our employees' representation plan continues
to serve as the medium of representation just as it has in the past. I urge
all employees to continue to use to the full the facilities of the plan for
presenting their needs and views. This is its purpose. No question can
be raised by an employee that can react in any way against him.




2393

Bethlehem has whole-heartedly joined with the other companies in the
steel business to have our great basic industry co-operate with the President
and his Administration in overcoming the causes of the present depression.
To this end we and all other important steel companies have subscribed to
a Code of Fair Competition for the conduct of the industry during the
emergency. Mutual understanding and united effort on the part of all are
necessary to accomplish this great purpose. The code aims to reach this
objective for the industry as a whole; and within our company an effective
agency for accomplishing this co-operation is the employees' representation
plan. Let us, therefore, continue to so operate the plan that we may. as
employees and citizens, make our full contribution toward national recovery.

H. I. Harriman Declares NIRA Prohibits Closed Shop—
Declares That Any Group of Workers May Bargain
—Warns Employers to Avoid Coercion.
American industry is in no danger of having the closed
shop imposed upon it, according to Henry I. Harriman,
President of the Chamber of Commerce of the United States
and member of the NRA Industrial Advisory Board who
addressed members of the Chicago Association of Commerce
on Sept. 20. Mr. Harriman said that he understands that
Gen. Hugh S. Johnson, Recovery Administrator, regards
the closed shop as prohibited by the National Industrial
Recovery Act. Mr. Harriman interpreted the act to mean
that employers may deal with their workers through federated
unions, company unions or individually, but must be careful
not to coerce workers in making a choice on collective bargaining. Mr. Harriman said:
The NIRA clearly indicates that, in the future, there are to be three
partners in industry. They are the employer, employee and the public.
The first proposition of thelabor section of the Act is that employees
have the right to organize. This right is already well settled by decisions
of the United States Supreme Court,
The NIRA, however, does not prescribe any particular form of organization: furthermore, employees may bargain individually if they so prefer.
The second proposition is that employees have the right to bargain
collectively. Collective bargaining has a definite meaning, but it contains
no implication, direct or indirect, as to the number of employees who must
participate before collective bargaining exists.
Collective bargaining is a method. As a method it may be used by
some employees of an employer, by all employees of an employer, by some
employees of a group of employers, or by all employees of all employers
In a given industry.
The third proposition is that employees are to be free from interference
or coercion on the part of employers in selecting their own representatives,
and they may choose an employee, or non-employee, of their employer,
as they may determine. There is no room to question this right, but there
Is also no doubt that in exercising it the worker should be free from coercion
from sources outside his employment as well.

William Green Attacks Views of H. I. Harriman and
R. L. Lund on Open Shop and Organized Labor—
Declares Employers and Not Workers Have Impeded Recovery Drive—Asserts NIRA Does Not
Prohibit Closed Shop.
Continuing the debate on the interpretation of the labor
provisions of the NIRA, William Green, President of the
American Federation of Labor, on Sept. 21 issued another
statement in which he criticized views on the open shop
and organized labor which had been expressed on the preceding day by Henry I. Harriman, President of the Chamber
of Commerce of the United States, and Robert L. Lund,
President of the National Association of Manufacturers.
Mr. Green's statement said in part:
Mr. Harriman is quoted as having said in a speech in Chicago, "If I
read the language fof General Johnson] correctly, it means that General
Johnson considers the closed shop prohibited by the NIRA," while Mr.
Lund is represented as having said that labor's organizing campaign "IS
the most serious obstacle to the attainment of the objectives of the NIRA."
I hesitate to challenge the good faith of these gentlemen, so I shall be
forced to challenge their intelligence. The NIRA does not prevent the
closed union shop and I Mean by that term just what we have always
meant by it. I mean the shop which is union by agreement between the
workers and the employers. There never was any other kind and there
never can be any other kind.
What the NIRA does is to give the workers their freedom to organize,
so that we now have a great many more really union shops than ever before
and the number is growing daily and rapidly. What hurts Mr. Harriman
and Mr. Lund is that the workers now have this freedom and having it
are using it.
These gentlemen are dismayed at the steady stream of workers who
are joining unions. They are dismayed because wage earners are free to
follow their own counsels and are no longer under the necessity of paying
tribute to the company union schemes of employers who hate to abandon
their role of industrial dictators and are no longer under the necessity_of
signing individual or yellow dog contracts.
It is rather interesting to find these spokesmen for the employers so
vitally concerned over the question of whether or not workers join unions.
And as for Mr. Lund's assertion that labor is impeding the progress of the
NIRA, let me ask Mr. Lund what interests have opposed in every code
hearing the proposals for shortening of hours and raising of wages so as to
effectuate the purposes of the NIRA?
Without such provisions in industrial codes the NIRA is robbed of all
Its power to promote recovery, and yet day after day we observe employers
opposing with all their might even the most moderate provisions for increasing employment and purchasing power in this way. If the NIRA
could get from employers half the support it has had from labor we should
have double the number of newly employed.
Labor believes the thing to do under the NIRA is to give it real service,
not lip service. Labor has given the NIRA genuine service. The Labor
Advisory Board has found it possible to join in working out solutions
to many vexing problems, and to do so through precisely the type of negotiations that take place in workshops between employers and employees.

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Financial Chronicle

We have found the employers of the Industry Advisory Board able to come
together with us in the same spirit.
The battle hymns of such gentlemen as Mr. Lund and Mr. Harriman
have little place in the picture to-day. They sound too much like the
alarm drums of special privilege, aroused by the determination of a nation
to regain mastery over itself and to establish industrial freedom as a companion to our political freedom.

R. L. Lund, President of National Association of
Manufacturers, Attacks William Green's Assault
Plans—Declares
on
Employee-Representation
American Federation of Labor Head Is Hampering
Re-o:ery Drive—Says Wages Paid Members of
Company Unions Exceed Those of Federation
Affiliates.
Robert L. Lund, President of the National Association of
Manufacturers, on Sept. 20 issued a statement in reply
an attack on the preceding day by William Green,
President of the American Federation of Labor, on companies
dealing with their employees through plans of employee
representation, although not affiliated with the A. F. of L.
Mr. Green had charged that these corporations were violating the provisions of Section 7(a) of the NIRA. Mr. Lund
said that a recent canvass of the membership of the National
Association of Manufacturers indicated that more than
80% were operating either under codes of fair competition
or under President's re-employment agreements. His statement then continued:
Mr. Green's statement about organizations set up by workers in cooperation with their employers is not surprising, because he and his associates look upon these organizations as competitive to their own. Considerably more workers are in such organizations than in those under the
leadership of Mr. Green and his associates. In fact, the American Federation of Labor unions include probably less than 10% of the workers in the
industries where they are represented.
The relations between workers and employers in plants where the organizations to which Mr. Green objects exist are the best in the country. This
applies to both wages and working conditions. Furthermore, none of the
labor difficulties which are so seriously obstructing the recovery program
have arisen from such organizations.
On the other hand, the efforts of the American Federation of Labor and
other organizations which co-operate with it, to secure control of labor,
have proved the most serious obstacle to the attainment of the objective
of the NIRA. Perhaps the control of this situation does not lie entirely
with Mr. Green and the leaders associated with him. They have started
agitation which perhaps they will not be able to guide, because it is clear
that a great deal of the organizing effort and agitation resulting from it
Is the work of men, some of them of very radical beliefs, who pay little
attention to those leaders, nominally representing them but actually concerned only with their own selfish purposes. This situation is fraught with
great danger because there is reason to fear that these activities may, in
a large degree, destroy the recovery program. In fact, they are already
having this effect.
Mr. Green's attack upon the workers' organizations, which he does not
like, seems gratuitous, because the NIRA itself provides for its administration and penalties for failure to obey its provisions.

National Association of Manufacturers Bulletin Asserts
Closed Shop Violates NIRA—Legal Opinion Opposes Contract with Single Union—Taking Issue
with William Green, Counsel Says Choice Rests
with the Worker.
A closed union shop under which labor contracts were
made with a single union would violate the intent of the
NIRA,according to a copyrighted bulletin issued on Sept. 25
by the National Association of Manufacturers and prepared
by John C. Gall, associate counsel of the Association. Mr.
Gall's interpretation of the Act was in direct contrast to that
of William Green, President of the American Federation of
Labor, who had charged large companies with "astonishing
evasions" of the law in furthering company unions. The
Association in its bulletin informed employers that under
the law they could advise workers against joining a labor
union or could offer special inducements, within limits, to
employees who would join and bargain with a company
union. Such an inducement, for example, might be group
insurance, the bulletin said.
Mr. Gall added that "since the NIRA leaves to the employee the clear
option as to the form of collective bargaining he desires, if any, there is no
difference whatever under the law between a company union, on the one
hand, and an affiliate of the American Federation of Labor, on the other.
Either a closed shop agreement is invalid whether made with one or
the other types of labor organizations or both kinds of closed shop agreements are valid, and by a bona fide agreement with the employees through
a company union the employer may outlaw other unions in his plant.

The attorney added a belief that both forms of closed
shop were invalid.
New York City NRA Finds"Strikes and Walkouts
Increasing Despite Settlement of Many Labor Disputes-16,000 Painters, 25,000 Underwear Workers
and 3,000 Coal Yard Men Return to Jobs—Walkout
of 20,000 Outerwear Workers Threatened—Transit
Men Seek Higher Pay While A. F. of L. Seeks to
Displace Company Unions.
Strikes and labor disturbances continue to impede business
activity in the New York metropolitan area this week, and
while some of the most important disputes were settled




Sept. 30 1933

through the mediation of the local National Recovery Administration committee, other large walkouts were threatened late in the week. More than 16,000 painters, whose
week-long strike had halted much of the building and renovating work in the city, returned to their jobs under new agreements on Sept. 27. The Association of Master Painters, ax4
well as 200 individual employers not members of the association, signed an agreement which provides for a 7-hour
day and a 5-day week at $9 a day or $1.28 an hour. Another
strike which was settled involved nearly 3,000 employees of
more than 75 Brooklyn coal companies, who returned to
work on Sept. 28 under an agreement with the Brooklyn
Coal Dealers' Association, providing that Brooklyn employees are to receive the same consideration granted to coal
company employees in Manhattan, except that Brooklyn
employees will receive pay for five holidays during the year
instead of ten.
On Sept. 27 Grover A. Whalen, Chairman of the New York
City NRA, was presented with a complicated strike situation involving a jurisdictional dispute between two large
unions affiliated with the American Federation of Labor
which threatened a general walkout of 20,000 worlprs in
the knitted outerwear industry. Earlier in the week Mr.
Whalen's intervention resulted in the settlement of a threeweek-old strike of 25,000 underwear workers, members of
the White Goods Workers Union, an affiliate of the International Ladies' Garment Workers. Describing the settlement of this dispute, the New York "Times" on Sept. 26
said, in part:
The agreement which brought to a conclusion the strike of 25,000 underwear workers was made by the White Goods Workers Union, the International Ladies' Garment Workers, the parent organization; the Lingerie
Manufacturers Association, the Allied Underwear League and the Negligee
Manufacturers Association. These associations represent the bulk of the
industry. The agreement is to be in force for two years.
The terms of the agreement included the 37- hour week, week-work
scales of $21 for operators. $17 for pressers and $17 for examiners; a piecework scale of 65 cents an hour for an average minimum worker; an auto
made increase of approximately 10% for all workers receiving these scales;
registration of all outside contractors with the union, and unequivocal
recognition of the workers' organization. The agreement established the
closed shop by obligating the employers to employ only members of the
union and to co-operate in every way in the maintenance of union standards.
According to Samuel Shore, strike leader, the settlement terms represent
a wage increase averaging from 25 to 35% for week workers and imply a
reduction of 25% in working hours. He said the industry was now virtually
100% unionized, whereas it was only 25% organized before the strike.

The terms of settlement of the painters' strike were summarized as follows in the "Times" of Sept. 27:
Settlement of the painters' strike was on the basis of a compromise
granting the workers the 35
-hour week in place of the 40
-hour week previously prevailing and an increase of $1 a day over the old rate of $8. The
new 35-hour schedule is to be worked within five days. The new wage
rate of $9 a day is to apply to maintenance and repair as well as to new
work.
After considerable discussion the employers finally yielded to Mr.
Whalens' advice to abolish all overtime and to enforce this provision by
accepting the union's demand for double time pay for any overtime that
may appear to be unavoidable.
"Our experienc • in all the industrial disputes that we have had to handle
at the NRA has been that employers realized the wisdom of doing away
with all overtime work as an essential feature in the movement for the
shortening of workday and the spread of employment," Mr. Whalen said.
"I have become thoroughly convinced that overtime has been the bane of
industry and that it should be eliminated as much as possible. This is
to the interest of employers, employees and industry as a whole."
The master painters also accepted the union's demand for double pay
for Sundays. New Year's Day,Independence Day, Election Day, Columbus
Day, Thanksgiving Day and Christmas.

The threatened strike of 20,000 workers in the knitted
outerwear industry, after the request for mediation was filed
with Mr. Whalen, was noted as follows in the "Times" on
Sept. 28:
The request was filed by the United Textile Workers' Union and was
supported by the Knitted Outerwear Manufacturers Association, the
employers' organization. The union demands recognition of its organization, Local 1,793 of the United Textile Workers, no discrimintaion for
union activity, a 25% wage increase and the 35
-hour 5
-day week.
These demands supersede a recent agreement concluded between the
United Text:le Workers and the employers association on the basis of the
textile code. That agreement was opposed as inadequate by the International Ladies' Garment Workers' Union, which stepped into the situation
with the assertion that the agreement was invalid, inasmuch as the United
Textle Workers had no jurisdiction over the knitted outerwear industry,
which is engaged largely in the manufacture of coats and suits, a domain
over which the I. L. G. W. U. claims control.
The latter organization charges that the agreement should have been
concluded not on the basis of the textile code, with its inferior wage and
hours provisions, but on the basis of the coat and suit code.
David Dubinsky, President of the I. L. G. W. U. has protested the
agreement to William Green, President of the American Federation of
Labor, with the demand that the A. F. of L. call upon the United Textile
Workers to transfer jurisdiction of the 20,000 knitted outerwear workers
to the I. L. 0. W. U.

The dispute between the United Textile Workers Union
and the International Ladies Garment Workers Union on
the question of jurisdiction appeared to have been adjusted
late yesterday (Sept. 29) following a settlement which would
grant wage increases ranging from 10 to 20% to the knitted

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Financial Chronicle

outerwear workers, together with a working week of 373's
hours. Three thousand employees who had been on strike
returned to work yesterday and it seemed likely that the
17,000 more who were awaiting strike call would not be
summoned to a walkout. The settlement was achieved by
negotiations between both unions and the employers.
Although no strike call has as yet been issued to workers on
New York City transit lines, NRA officials on Sept. 27
answered an inquiry by a representative of the company
union of the Brooklyn-Manhattan Transit Co., with a
membership of 12,000 employees, and stated that the men
were not bound to accept the minimum 30-cent wage provided in the National transit code, but under the NIRA
might bargain collectively for a higher figure. This inquiry
followed a move by the Amalgamated Association of Street
and Electric Railway Employees and Motor Coach Operators, an A. F. of L. affiliate, to organize the men on the
I. R. T. and B.
-M. T. surface and bus lines. Officials of
this union said last week that they would soon demand a settlement on the issue between the company unions maintained
in New York and the A. F. of L. organization, which has
sought for years to enter the New York field.
Almost all of the disputes revolved around demands for
shorter hours or higher wages or both. A week ago it was
estimated that at least 100,000 persons were on strike in
New York. Col. Leopold Phillip, Chairman of the New
York NRA Compliance Board, conferred in Washington
with General Hugh S. Johnson, National Recovery Administrator, regarding rulings on matters of compliance pertaining
to labor. On Sept. 18, Senator Robert F. Wagner,Chairman
of the National Labor Board, in a radio address appealed
to employers and employees to avoid industrial disputes
and to bring controversies to the Board for settlement, if
necessary. Describing the status of the principal strikes in
the New York area, the New York "Times" of Sept. 20
said in part:
The growing army of strikers in New York City was augmented yesterday
by the addition of 15,000 painters who responded to the strike call of the
Brotherhood of Painters, Decorators and Paper Hangers of America,
District 9, and walked out in support of the union's demands for shorter
hours and more pay. The demands are for a 6
-hour day, a 5
-day week
and $1.65 an hour. The men now receive $8 for an 8
-hour day.
The painters' strike marked the outstanding development yesterday in
the battle between capital and labor which has been extending on an everwidening front in this city for the last several weeks. The strike resulted
in the stoppage of work in thousands of apartment houses, private homes
and business establishments where renovating work was under way. Many
office buildings and hotels also were affected.
Simultaneously with the painters' walkout and the preparations of
furniture drivers for a strike, 7,500 automobile service men employed in
some 2,400 garages in all parts of the city took steps to enforce demands
for pay readjustments and improvement of working conditions. Meetings
will be held this afternoon, at which strike action may be taken.
While some progress was being made toward settlement of the strike of
25,000 underwear workers, now in its second week, no settlement appeared
likely immediately, although Grover A. Whalen, Chairman of the local
NRA organization, held further conferences with employers and representatives of the union at the NRA headquarters in the Hotel Pennsylvania.
Refusal by retail furniture houses to grant their truck drivers and helpers
a 48
-hour week, instead of what the men characterized as the unlimited
hours now prevailing, will precipitate a general strike of 2,000 men next
Monday morning [Sept. 25). William Snyder, General Manager of the
Teamsters Union, Local 138, said.
Should all divisions of the teamsters' local, involving more than 5.000
men,go out on strike there will be a complete tie-up of flour, bakery, grocery
and furniture deliveries in the metropolitan area. Hospitals and public
institutions, as well as private concerns, would be affected.
The union is not demanding any wage increases, but is confining its
demands to a 48
-hour week for grocery drivers and furniture trnck chauffeurs and helpers, and a 45
-hour week for the flour truck drivers. The
union insists, however, that alleged wage scale violations by the employers
cease.
Mr. Whalen revealed last night that one big stumbling block to a settlement of the strike of 25,000 underwear workers was the competition experienced by the industry from cheap labor and low-standard plants in
Puerto Rico and the Philippines.
Mr. Whalen said that the cheap production of goods in Puerto Rico
and the Philippines raised the question of applying industrial codes under
the NRA to insular possessions.

Patrick J. Hurley Terms NRA Plan "Americanism"—
Secretary of War Under President Hoover Expresses
Approval of Purpose of Act and Urges Co-operation
of Nation in Recovery Program—Offers Suggestions
to NRA.
Declaring that the National Recovery Administration
plan "is not Bolshevism,Socialism, Fascism or Collectivism—
it is Americanism," Patrick J. Hurley, Secretary of War in
the Hoover Administration, expressed approval of the
broad purposes of the National Industrial Recovery Act in
a radio address on Sept. 27, and asked that President Roosevelt be given "a character of non-partisan support too often
denied to his predecessor." Mr. Hurley said that while
he was not in agreement with all the provisions of the NIRA,
he nevertheless believed that it had been passed in response
to a demand of a majority of citizens, and he urged that a




2395

fair trial be accorded to the will of this majority. Other
portions of his address were quoted as follows in Washington
advices to the New York "Herald Tribune":
Seeking to allay the misgivings of those who fear that the recovery
program will "eliminate individual initiative and freedom of action," and
who "see in it a step toward the socialization of industry, or collectivism,"
Mr. Hurley said:
"Instead, the NRA is attempting to inaugurate self-government in
industry. Under it wages and profits go to the individual,and not to a
collectivist commission, or to the State. The NRA plan is not bolshevism;
it is not socialism; it is not fascism; it is not collectivism; it is Americanism."
Mr. Hurley offered the following suggestions to the Recovery Administration and champions of the NRA:
"Its ardent supporters should cease using the words 'compulsion,'
'coercion,' boycott,' and 'dictator.' They should use rather the words
'leadership,' co-operation."welfare,' and 'progress'.
"In the control of production, and the attempts to establish prices,
more adequate means will have to be devised to protect the consumer.
"One of the most hurtful charges made against the NRA is that it is
beneficial to individuals and institutions with surplus capital or credit and
that it will tend to establish a monopoly of business in their hands; on the
other hand, that it will work a hardship on smaller enterprises. . . .
These small institutions cannot survive under the NRA unless credit is
provided for them. Nothing could be more detrimental to the ultimate
success of the NRA than to force the small merchants and industrialists
out of business for want of credit. General Johnson fully understands this
situation and has already suggested a plan whereby a powerful flow of
credit for these smaller operators can be acquired through the Reconstruction Finance Corporation.
Loosening of Credit Urged.
"In that connection, may I suggest a change in the public works feature
of the NRA. A public works program is helpful only so long as the money
is expended on projects that are needed and that will return a dollar's
worth of service to the public for every dollar expended. It gives temporary
not continuing employment. More people would be more quickly and
more permanently re-employed if some of the public money now earmarked
for public works could be diverted into credit channels to sustain small
business enterprises.
Some enthusiastic and loyal supporters of the NRA tell the public,
day after day, that our democratic form of government may be making
its last stand; that if the NRA fails, democracy will fail, and be succeeded
by some form of dictatorship, or absolutism. That is a great mistake.
That is the doctrine of despair. It is the psychology of fear. It disregards
America's experience of 150 years of freedom and the power of universal
education."

Broadcasting Industry Still Unprofitable Despite Huge
Increase in Advertising Expenditures Since 1927,
NRA Hearing is Told—Radio Code Would Add $1,328,000 to Annual Payrolls—Actors Submit Complaints.
Although annual expenditures by radio advertisers have
increased from $3,832,150 in 1927 to more than $70,000,000
in 1931, the radio industry as a whole has not yet operated
on a profit basis, according to testimony given by representatives of the broadcasting industry at a hearing on a
tentative code of fair competition before the National Recovery Administration on Sept. 27. It was estimated that
compliance with the code, which was submitted by the
Naticnal Association of Broadcasters will increase by 765
the number of full time employees, who now total 11,000,
and will increase payrolls by $1,328,000 annually. A
W ishington dispatch to the New York "Times" on Sept. 27
summarized other testimony at the hearing as follows:
Alfred J. McCosker, President of the National Association of Broadcasters, who was the first witness, said that the association includes less
than half of the licensed stations in the United States. The member stations,
however, do about 81% of the total commercial business of the industry,
he added.
The problem of the actor was called to the attention of Deputy Administrator Sol A. Rosenblatt by Frank Gillmore, President of the Actors Equity
Association, who said that of the 1,869 actors employed in the broadcasting
industry, 1,078 are Equity members. One of the "major abuses" of the
industry. said Mr. Gillmore, is the practice of requiring rehearsals and
auditions without pay.
Mr. Rosenblatt, answering a question by J. N. Weber, President of
the American Federation of Musicians, assured him that the musicians
would be taken care of in the finished code that goes to the President.
The code provides for a 40
-hour week and a minimum wage of $15.

NLB Plans to Create Regional Agencies to Mediate
in Labor Disputes—Compliance Boards to Report
to NRA Pending Their Appointment.
The National Labor Board is planning the early creation
of regional agencies to adjust labor disputes, it was revealed
in a joint statement issued on Sept. 22 by Senator Wagner,
Chairman of the Board, and General Hugh S. Johnson,
Recovery Administrator. Until these agencies are appointed
the local compliance boards will report such disputes to the
National Recovery Administration dead quarters in Washington for reference to the NLB. The text of the statement
follows:
The NLB was set up by the President as a part of the NRA to handle
labor disputes. The NRA has recently asked all communities to organize
local compliance boards to secure adherence to the President's re-employment agreement. These local compliance boards have never been given
authority to deal with labor disputes.
It is contemplated that in the near future the NLB will set up regional
agencies for mediation in the case of labor disputes. Until that time,
when there is an active or threatened lockout or strike in a community,
which is brought to the attention of the local NRA compliance board, this
board should report that fact immediately to the NRA for reference to the
NLB.

2396

Financial Chronicle

Similarly. if any case of non-compliance which the compliance board
handling threatens to turn into a labor dispute this case should be similarly reported for reference to the NLB in Washington.
There has never been any difference of opinion or conflict of authority
between the administrative side of the NRA and its NLB. They have
clear and definite functions. We are working together in the closest
harmony for the common good.
is

President Roosevelt Signs Coal Wage Agreement—
Attaches Memorandum Extending Wage Schedule
to Non-Union Members—Regards Compact as
Among Most Important in American Labor History.
President Roosevelt on Sept. 22 formally approved the
wage agreement between the United Mine Workers of
America and the bituminous coal operators of the Appalachian
field. In signing the compact, the President attached to it a
memorandum which read:
In approving this agreement it is with the understanding that the hours
and wages and conditions of employment recited herein may also be applied
to the employees who are not parties hereto and that the requirements of
Section 7 (a) of the NRA will be complied with in carrying out this agreement."

The President's signature of the agreement conformed to
Section 7(b) of the NIRA which provides that the President
shall offer employers and employees every opportunity "to
establish, by mutual agreement, the standards as to the
maximum hours of 1 tbor, minimum rates of pay, and such
other conditions of employment as may be necessary in
such trade or industry, and the standards established in such
agreements, when approved by the President, shall have the
same effect as a code of fair competition, approved by the
President under Subsection (a) of Section 3." The text of
the coal wage agreement was given in our issue of Sept. 23,
pages 2208-10. It was signed for all operators in the Appalachian field except those of Western Kentucky and Alabama.
Even if these operators fail to sign the agreement, they are
nevertheless covered by the coal code and must therefore
comply with the wages specified in the wage schedules.
It was reported from Washington that after President
Roosevelt signed the agreement on Sept. 22, he indicated
that its successful formulation was decidedly gratifying to
him, and that the compact was one of the most important
wage agreements ever made in American labor history. It
was said that it would affect more than 300,000 miners.
Shoe Code May Be Delayed by Inclusion of "Merit"
Clause—Labor Advisory Board Protests Modification of Collective Bargaining Section — Higher
Wage Rates Advocated as Code Is Prepared for
General Johnson's Consideration.
A revised code of fair competition for the boot and shoe
industry was prepared by the NRA for submission to General
Hugh S. Johnson, Recovery Administrator, this week, following its formal filing on Sept. 20. Acceptance of the code
appeared doubtful, however, because of the fact that the
manufacturers refused to delete the so-called "merit" clause,
which President Roosevelt has eliminated from other igreements. Both the Labor Advisory Board and the legal division of the NRA made reports on the code which contained
strcng objections to the section which specifies that employers may hire and dismiss without regard to union affiliation. The Labor Board in its report also objected to the
minimum wage provision and suggested instead a flat
schedule of $18 weekly for unskilled workers, $30 for skilled
workers and $40 for those highly skilled. The original code
provided for minimum wages ranging from $14 to $15 weekly
for men and $12 to $13 for women. The shoe industry, in
urging the inclusion of the "merit" clause, attached the
following memorandum to the revised cods:
The Act clearly grants the rights of collective bargaining to the employees. These protective provisions are expressly set forth in the code.
But the picture is not complete without a clear portrayal also of those
rights of the employer which are guaranteed by law and which were not
repealed by the NIRA.
Those rights are not expressly set forth or even mentioned in the wording
of the Act; nevertheless they remain a part of the law of the land. Under
the law, the employer has ever had the right to select, retain and advance
his employees for individual merit.
The NIRA did not repeal this legal right of the employer. To write
into the code those provisions of the law defining the rights of the employee
and omit those defining the rights of the employer will promote misunderstanding and breed industrial strife.
Industrial strife has already resulted from the fact that the workers have
seen only that part of the picture in which their rights are painted in vivid
language, while the other part of the picture has not been understood by
them.

President Roosevelt Signs Modification of Shipbuilding
Code—Committee of Fair Practice Increased from
Eight to Ten Members, of Whom Four Will Be
Selected by President.
President Roosevelt on Sept. 22 signed a modification of
the code for the shipbuilding and ship repairing industry.
This modification enlarged the Planning and Fair Practice




Sept. 30 1933

Committee to ten members, of which six will be named by
the industry and four by the President. The original code
provided five representatives of the industry and three members without vote to be named by the President. The
members of the Committee, and the reasons for making the
change in number, were noted as follows in a Washington
dispatch of Sept.22 to the New York "Journal of Commerce":
The shipbuilders and ship repairers maintained that as the locations of
the companies are so scattered a committee of six members,instead of five.
could best function in performing the duties imposed. It was also suggested
that at a later date an additional increase might be sought to take care of the
Mississippi River and its tributaries.
Secretary of the Navy Swanson pointed out that since the operation ofthe
code would have an important bearing on naval construction, it was advisable for the Navy to be represented on the Committee.
Capt. Henry Williams was formally named to-day by the President to be
the Navy's representative, while others appointed are Robert L. Hague,
Standard Shipping Co., New York, as industrial and consumer adviser;
Joseph S. McDonagh, International Brotherhood of Electrical Workers,
labor representative.
Representatives of the industry are H. G. Smith, National Council of
American Shipbuilders; Joseph Haag Jr., Todd Shipyards; S. W. Wakeman, Vice-President, Bethlehem Shipbuilding Corp.; Roger Will'ams, VicePresident, Newport News Shipbuilding & Dry Dock Co.; Robert Haig,
Vice-President, Sun Shipbuilding & Dry Dock Co., and W. H. Gerhauser,
President, Great Lakes Ship Building & Repair Association.

Oil-Burner Code Becomes Effective—Establishes Uniform System of Cost Accounting and Prohibits
Selling Below Cost.
The National Recovery Administration code for the oil
burner industry became effective Sept. 25, following its approval by Pres.Roosevelt. The code provides that no member
of the industry may sell or exchange any product at a price
below his own individual cost, which will be determined
by a standard cost accounting system to be set up by a code
autnority for the industry, with the approval of the NRA,
within 120 days after the effective date of the code. It was
further specified that members of the industry must file
with the code authority within five days after the effective
date "a net price list or price list and discount sheet as the
case may be, individually prepared by him, showing his
current prices or prices and discount terms of payment."
The wages and hours provisions were summarized as follows
in the New York "Herald Tribune" on Sept. 25:
In so far as its labor and wage provisions are concerned, the code sets up
flexible working hours in line with practical seasonal requirements and
stipulates that in manufacturing operations the maximum average work
week for one year shall be 36 hours and in installation and service operations 38.
The minimum wage rate for both groups IS fixed at not less than 45
cents an hour and for office employees engaged in managerial executive
capacities at not less than $15 a week. Since the code does not draw
any distinction between the wages to be received either by men or women,
It is interpreted to mean that the code calls for equal pay for equal work.
The maximum work week for one year for office and salaried employees,
receiving less than $35 a week, is fixed at 40 hours a week averaged over a
six-month period and not to exceed 48 hours during any one week of that
period.

Shipping Code Submitted to NRA—Virtually All Lines
Unite in Agreement That Is Expected to End
Costly Waste—Foreign Companies May Co-operate
for Stability—Rate Regulation Continued in More
Rigid Form.
A code of fair competition for the steamship industry was
submitted to the NRA on Sept. 25 by J. Caldwell Jenkins,
Chairman of the Code Committee of the American Steamship Owners Association, who said that the Association and
its affiliated organizations on the Gulf of Mexico and the
Pacific represent practically the entire shipping industry.
He added that the code will result in unprecedented cooperation. It is expected that foreign lines will co-operate
so far as possible in the code provisions, since most of them
have signified their intention to subscribe to the agreement.
This foreign co-operation would extend to terminal operation
and office work, but could not be applied to the management
of foreign ships.
A. D. Whiteside, Deputy Recovery Administrator, said
on Sept. 25 that one of the most important features of the
proposed code is the proposed continuance of rate regulation, although this is placed under more rigid control both
by the industry and by the Government. This control is
expected to replace "conference agreements" with regard to
rates which shipping interests have entered into in the past.
The code would apply to "all owners, operators and agents
of all vessels of all flags engaged in foreign commerce and all
American vessels of more than 100 gross tons engaged in interstate commerce, not including vessels (except active oceangoing) operating on the Great Lakes or inland waterways,
and owners, operators and agents of any other vessels who
voluntarily become members of the code." It is specified,
however, that the hours of labor, minimum rates of pay and
conditions of employment "shall not apply to sea-going

Financial Chronicle

Volume 137

personnel on ships in the foreign trades, except as otherwise
provided in a division or subsidivision in this code." Labor
and wage provi:ions of the code were detailed as follows in a
Washington dispatch of Sept. 25 to the New York "Times":
Divisions of the industry are defined in the code as foreign trade, intercoastal, Atlantic and Gulf coastwise and Puerto Rican, Pacific Coast,
tanker, bays and sounds and general.
In its labor provisions the code contains Section 7 (a) of the National
Industrial Recovery Act and the following provision:
"Except as otherwise in this article provided, nothing in this code shall
be deemed to control negotiations between employers and employees as
provided in the NIRA."
48 Hours for Shore Workers.
It also provides that longshoremen, tally clerks, checkers, cargo repair
men, maintenance men and all other dock workers, except watchmen,
baggage clerks and ship caretakers, shall work not more than 48 hours a
week "averaged over a period of four weeks."
The minimum pay for these workers is set at "not lower than the basic
day-time wage scale in effect July 1 1933: but in any event not less than 40
cents an hour, unless the same class of work on July 15 1929, was less than
40 cents an hour,in which latter case not less than the hourly rate on July 15
1929, and in no event less than 30 cents an hour, unless otherwise provided in a Bays and Sounds Division code."
Office employees would work not more than 48 hours per week "averaged
over a period of eight months," at slightly under $12 to $15 weekly, based
on the population of the city in whih they are employed.
W. H. Davis, Deputy Administrator, sail" that briefs had been received
from the National Association of Americala Seamen, and the United Licensed Officers, U. S. A., in regard to minimum wages.
While not strictly comparable, due to definition, the rates suggested by
the three sources follow:

Rating.
Master
Chief mate
Second mate
Third mate
Fourth mate
Boatswain
Carpenter
A. B.seaman
Ordinary seaman
Deck boys
Quartermaster
Master-at-arms
Radio operator
Chief engineer
First assistant engineer
Oilers
Firemen
Wipers
Purser
Chief steward
Chief cook ..
Waiters
Mess men
Mess boys
Utility men

National
Ass'n American Seamen.
$315
185
165
150
135
75
80
62.50
47.50
25
70
70
105
300
205
72.50
67.50
57.50
150
50
50
42.50
50

United Licensed
Officers.

Code
Rates.

8345 to 8310
205 to 200
185 to 175
175 to 160
175 to 150

8140
120
105
50
50
40
30

75
31010 300
205 to 195

140
50
40
30
100
85
35
30
30

Code for Jobless Asks $14 a Week-50 Cents an Hour
for Relief Work Also Demanded by New York
State Federation of Unemployed Organizations.
A code for the unemployed, establishing a minimum grant
of $14 a week in cash for each unemployed person, with
$3.50 added for each dependent, was mailed to President
Roosevelt and the National Recovery Administration on
Sept. 22 by the New York State Federation of Unemployed
Organizations. This was indicated in the New York
"Times" of Sept. 23, which also said:
The proposed code would fix a minimum of 50 cents an hour for all
emergency work and abolish all discrimination because of race, religon or
political affiliation in the distribution of relief.
It would set up collective dealing between relief agencies and the unemployed organizations. It proposed the establishment of a complete
system of public employment exchanges and commissaries to sell necessities at cost to the unemployed.

2397

a view both to economy and the improvement of service. It is anticipated
that this study may eventuate in a reduction in personnel of the bureau,
which at the time of the transfer was 924, of which 463 were in the field
and 461 in Washington.
The Government fleet at the time the Shipping Board became a subsidiary of the Commerce Department numbered 297 vessels, only 58 of
which, however, were in active service on the three remaining Government
lines—American France, American Pioneer and American Republics. Of
the remainder, 144 ships were in layup, with 95 vessels remaining to be
delivered for scrapping among the 124 ships sold some months ago. The
incorporation of the Shipping Board as part of the department is intended
to promote efficiency through elimination of duplication and otherwise,
it was explained by Secretary Roper.
"It is the intention of the Department to interfere as little as possible
with the essential activities of the board and its corporate subsidiary,
Merchant Fleet Corporation," he asserted.

Personnel of CSB Completed—W. W. Riefler Is Named
Chairman of Body Created by Executive Order.
The personnel of the Central Statistical Board, which
was created by an Executive Order issued by President
Roosevelt on July 27, was completed early this week and
the organization is ready to begin its duties of appraising
the value of data collected by the various agencies of the
Government, with a view to planning for the improvement
and co-ordination of the work. The new Board is a successor to the Federal Statistics Board. It is granted advisory powers only, and will not itself collect, compile or
analyze statistics. The various Government agencies interested in the problem named members of the Board, of
which Winfield W. Riefler is Chairman. Other members
were listed as follows in a Washington dispatch of Sept. 24
to the New York "Journal of Commerce":
These members are:
Interior Department, Oscar E. Kiessling, chief economist of the mineral
statistics division, Bureau of Mines.
Agriculture. Mordecai Ezekiel. economic adviser to the Secretary,
Louis H. Bean,economic adviser to the Agricultural Adjustment Administration, alternate.
Commerce, Assistant Secretary John Dickinson; William L. Austin.
director of the Census Bureau, alternate.
Labor, Isador Lubin, Commissioner of Labor Statistics.
Federal Reserve Board, E. A. Goldenweiser, director of Research and
Statistics.
National Recovery Administration, Alexander Sachs, Chief of the
Economic Research and Planning Division.
Committee on Government Statistics and Information Services, Meredith
B. Givens, Executive Secretary.
This group has completed the organization of the Board by the selection
of five additional members, as follows:
E. Dana Durand, Chief Economist, Tariff Commission.
Corrington Gill, Director of Research and Statistics, Federal Emergency
Relief Administration.
Stuart A. Rice, Assistant Director of the Census Bureau.
0. M. W. Sprague, Financial Executive Assistant to the Secretary of the
Treasury.
W. R. Stark, Chief of the section of Financial and Economic Research,
Treasury Department, alternate.
0. C. Stine, Chief of the Division of Statistical and Historical Research,
Bureau of Agricultural Economics, Department of Agriculture.

Public Works Administration Placed on Double Shift
to Speed Allotments for Non-Federal Projects.
The staff of the Public Works Administration was placed
on two shifts daily, by an order issued on Sept. 25 by Secretary of the Interior Ickes, who explained that he took this
action to expedite the allocations of public works funds for
non-Federal projects. In announcing the double-shift basis,
Mr. Ickes estimated that several hundred additional persons
will receive employment. His statement read as follows:

Secretary of Commerce Roper Announces Permanent
Day and night as well as Sunday work has been the order for weeks,
Organization of Shipping Board Bureau of De- but on a single shift basis, which was exhausting the staff as the drive was
partment of Commerce.
pushed.
Lack of office space immediately available for the staff brought the
The permanent organization of the Shipping Board Bureau
decision to install two shifts of workers so that all facilities now at hand
of the Department of Commerce was announced on Sept. 20 would be utilized pending securing of additional room.
by Secretary Roper. Major-General Charles McK.Saltzman
of Panora, Iowa, and Thomas F. Woodward of Washington
National Association of Real Estate Boards Asks
were named Vice-Presidents of the Merchant Fleet Corpora,
Federal Loans for Home Building—Presents Protion and with Admiral H.I. Cone, President of the Corporagram for Recovery in Series of Conferences.
tion, these officials will act as a permanent Advisory Board
The request that the Federal Government at this time
to the Secretary of Commerce in operating the Bureau, make available direct loans to qualified individuals and
which functioned as an independent unit prior to Aug. 10 firms engaged in home building was made by the National
1933. Commenting on the appointments and the future Association of Real Estate Boards in a series of conferences
policies of the Board, Washington advices to the New York with officials of the National Recovery Administration
"Journal of Commerce" on Sept. 20 said:
and with other Administration heads. The Association,
Both of the new Vice-Presidents have had previous experience in the
in indicating this on Sept. 18, added in part:
Government service. General Saltzman was retired from the
Army in
1928, and the following year was appointed a member of the Federal Radio
Commission. Since the inauguration of President Roosevelt he has been
working in close co-operation with the department, particularly in the
question of departmental reorganization.
Thomas M. Woodward, a practicing lawyer in Washington since 1918,
spent several years in the I. C. C., where he was engaged in rate studies.
Within the past few months he has been called upon frequently by the
Agricultural Adjustment Administration to serve as Deputy Administrator
in highly important hearings.

Thorough Study Planned.
With the organization of the board completed it is expected that a thorough
study will at on.ce be undertaken of the activities of the organization with




Such loans, opening new activity in the one field which is clearly recognized as presenting a present definite shortage, would constitute a strong
push toward recovery,the Association points out. So early as May ot this
year a survey conducted by James S. Taylor, Chief of the Division of
Housing of the United States Department of Commerce, found that there
exists a present though largely unrecognized shortage of approximately half
a million homes.
Home'construction, with its large proportionate outlay for labor costs,
and its division into a multitude of small contracts, would do more than
any other type of co .struction to distribute widely both new employment
arid new credit, it is pointed out. The government might act as mortgage
lender on new homes for a short period,say six months, the loans to be longterm amortized loans, the Association,suggests.

2398

Financial Chronicle

Loans such as are asked could be made either through the Public Works
Administration, the Reconstruction Finance Corporation, or both. They
should be at fair competitive interest rates, so as not to injure the savings
institutions or retard their ability to resume normal functioning.
Important action on the subject in loans for housing and home building
may be expected soon, it is believed.
W. C. Miller, Washington, D. C., President of the Association, and
Herbert U. Nelson, Chicago, Secretary, together with members of the
special committee now negotiating a general code affecting real estate,
represented the Association in the conferences, which presented a new
aggressive platform of Federal action for encouragement of home ownership.
Asks Mortgage Freedom; Protests Codes Doubling Home Costs.
Further important Federal action called for to safeguard projected new
home building is as follows:
1. That regulations covering mortgages under the Federal Securities
Act be simplified and clarified, and that no attempt be made to supervise
and regulate the ordinary small home mortgage.
The investor has always been well protected in this field, and always is in a
position to protect himself. The present regulations, issued by the Federal
Trade Commission, July 27.introduce a number of new uncertainties which,
unless removed, will retard the resumption of normal mortgage lending on
homes.
2. That care be exercised to avoid at this time any sharp increase in
home building costs such as would be entailed in some of the codes and
regulations now before the Recovery Administration. . . .
Text of Loan Proposal.
A memorandum which has been the basis of the informal discussions with
various officials embodies the suggestion ot the Association as to how
direct loans proposed for home builders might sately be made. The memorandum, as addressed to Robert D. Kohn, head 01 the Housing Division of.
the PWA,is given in lull below. The Association in presenting this memorandum was represented by J. C. Nichols, Kansas City, Mo., Chairman of
its Land Development and Home Builders Committee; Hugh Potter.
Houston, Tex., its President-elect, and Herbert U. Nelson, Chicago, its
Secretary.
Memorandum on Use of Public Creditfor Home Building.
It is the opinion of the undersigned, representing the National Association
of Real Estate Boards, that there are a considerable number of cities and
towns where a moderate amount of home building for purpose of sale could
be undertaken at this time with good results in the matter of re-employment. Assuming some continued improvement of business conditions, we
believe that the real estate market will absorb from 10,000 to 15.000 lowpriced and moderate priced homes throughout the country during the coming
winter and spring season. Due to present lack of first mortgage funds from
usual sources, use of public credit is necessary if any home building IS to be
done soon.
We suggest that loans be made for home building on the following conditions:
1. Loans to be made only to individuals and companies able to show good
business standing, successful experience, and high quality of past work.
2. Home3 built to be sold by the builder under appropriate lease or contract arrangement and title to be held by the builder as security for the
advances from the Government.
3. Loans to be made up to 15 years and to be amortized to 50% of original
amount at maturity.
4. Building sites should as far as possible be contiguous and arranged in
accordance with a community, neighborhood or a group plan.
5. Preference to be given to projects in which no extensive land assembly
is necessary.
6. Sites should not exceed 52.000 in the final sales price to the home
buyer, except in very unusual cases.
7. Home sites to contain not less than 5,000 square feet or have less than
40 foot frontage on the street.
S. Preference to be given projects where street improvements aro already
installed and utilities are immediately asailable.
9. Sites to be restricted for single family dwellings for 25 years and until
owners by majority agree to c an e.
10. Preference to be given projects where home owners are organized for
maintenance of neighborhood amenities, control of architecture, and
protection of neighborhood values.
11. Value of Improvements to be at least 234 times the value of the site.
12. Dwellings to be single family,freestanding, modern, well built and of
good design.
13. Home builder should make reasonable showing as to need and probable market for dwellings and be able to provide junior financing.
14. Building lines, side yards, and percentage of land coverage should be
in keeping with the best practice of the community.
NATIONAL ASSOCIATION OF REAL ESTATE BOARDS,
J. C. NICHOLS. Chairman,
Land Development and Home Buildings
Committee.
HUGH POTTER, President-Elect.
H. U. NELSON, Secretar .

National Association of Real Estate Boards Files NRA
Code Affecting Real Estate.
proposed general code affecting real estate and suppleA
mentary codes for five special divisions have been filed with
the National Recovery Administration by the National
Association of Real Estate Boards, according to an announcement issued by the Association on Sept. 11, from which we
also quote:
Supplementary codes filed are:
1. For the real estate and insurance brokerage business.
2. For the real estate and building management business.
3. For the real estate mortgage business.
business.
4. For the land development and home building
appraising.
5. For the profession and business of real estate
Owners Included.
for
It is provided that other supplementary codes may be incorporated
estate by
any other divisions that may be developed. Operation of real
to which the general and
an owner is included in the interests and activities
supplementary codes are applicable.
Ask Co-operation of Other Groups.
received
The code has been completed in accordance with suggestions
from all over the country, in conference with other groups in the field,
the NRA. Text
especially the construction industry, and in sessions with
as iled is now going out to all member boards for their study and suggestions.
Date for hearings on the code has not yet been set.




Sept. 30 1933

It is the hope of the Code Committee that real estate interests and
activities may arrive at a general code for real estate to which all the
national organizations in the field will agree. In submitting the code the
Association has endeavored to cover the activities of its own membership
and in addition provide a basis for such general co-operation. The supplementary codes have been filed with the general code so that additional codes
filed or to be filed by other groups may be more readily co-ordinated.
Would Adjust Production to Current Needs.
"Despite the fact that real estate represents so great a share of the
national wealth, there has been in the field a lack of co-ordination," the
Association states through its president, W. C. Miller, Washington, D. C.,
and its code committee chairman, J. W. Cree, Pittsburgh, in the letter of
transmittal which accompanied the general code. "For this reason there
has not been sufficient planning with respect to the production of improvements and their adjustment to current needs. As a consequence we have
periods of feast and famine. Lack of co-ordination has also produced costs
that are an obstacle to home ownership.
"The present crisis offers an opportunity for the major interests and
activities in the real estate field to work together for more intelligent
development of cities, better planning and construction, sounder financing
methods, and more productive management."
The problems which exist in the various special fields of real estate cannot
be solved separately but only in the light of their relationship to one another
and to the whole field of real estate activity. The general code submitted.
it is believed, offers the framework within which such solutions can be
worked out. Such a broad program is the only sound one for real estate.
it is believed.
Adpinistration.
The code provides for a General Real Estate Code Committee to be
charged with the responsibility and authority to administer the code under
the direction of the National Recovery Administration. The Committee,
It is proposed,shall consist ofrepresentatives elected so as to give representation to the interests and activities involved and to the various sections of the
United States. The Committee would be empowered to cause complaints
of violation to be arbitrated or to initiate proceedings before the appropriate
governmental agency to prevent or punish violations. It would be given
authority to make surveys and compile reports necessary for the purposes el'
the NIRA and further to collect data and develop recommendations for
the improvement of real estate interests and activities.
Sub-committees may be appointed by local groups or associations for
specific purposes with the approval of the General Real Estate Code
Committee, which committee, it is provided, shall appoint one of its own
members as an ex-officio member ofsuch sub-committee.
Defines Certain Unfair Practices.
Each supplementary code contains an enumeration of unfair competitive practices which would constitute a violation of the general code. The
outlawing of destructive practices would advance the interests both of
the sound operator and of the general public. The code for the profession
and business of real estate appraisal, for example, contains a notable
statement of standards of unfair and fair practices which if given the
authority of NRA should do much toward safeguarding appraisal for loans
and for new construction. This should constitute an important bulwark
for the safety of a new and sound real estate activity.
Hours and Wages for Employees.
The code covers maximum hours and minimum wages for all types of
employees. It takes account of seasonal variations in employment, of
time lost in land development, land maintenance and home building
through climatic conditions,and of the problem raised by building managers,
custodians, caretakers and others whose chief remuneration is free rent of
quarters occupied. It covers the question of emergency maintenance and
repair work and the problem raised by employees working a major part of
their time outside the office, or by employees whose work hours are necessarily not continuous.
The codes point out the service nature of the real estate business as meaning that most of its problems cannot be approached from the same angle
as those of industry.
Home Building Costs Involved.
In presenting its proposed supplementary code for the land development
and home building business the Association calls attention to the fact that
a code has been filed by the Construction League covering the construction
Industry which might be interpreted to include the home building business.
The home building business, it points out, has always been largely composed
of small business units and never has conformed and cannot now conform
to costs common to the construction industry. Inclusion of home building
under the general code affecting real estate is asked in the belief that
inclusion of the business under any code other than one including its allied
business, the development of the site, would not only tend to oppress and
destroy the business of those now constituting it, but would place further
and undersirable obstacles in the path of home ownership.

The Code Committee of the Association consists of the
following, the committee having been given full power to
act:
J. W. Cree Jr., Pittsburgh, Chairman.
Hugh Potter, Houston, Texas, President-elect of the Association.
.1. Soule Warterfield, Chicago.
J. C. Nichols. Kansas City, Missouri.
Harry E. Gilbert, Baltimore.

Letters of transmittal for the supplementary codes are
by the following:
H. Clifford Bangs, Washington, D. C., Chairman of the Brokers Division of the Association.
Kenneth C. Brown, Chicago, President of the Institute of Real Estate.
Management of the Association, formerly its Property Management
Division.
August C. Sehrt, Milwaukee, Chairman of the Mortgage and Finance
Division
Guy T. 0. Hollyday, Baltimore, Chairman of the Land Developers and
Home Builders Division of the Association.
Philip W. Kniskern, New York, President of the American Institute o(
Real Estate Appraisers of the Association.

A previous item regarding the proposed code appeared
in our issue of Aug. 19, page 1352.
Says NIRA Violates Basic Law —Judge Bruce Holds
Line Must Be Drawn.
Both Amendments V and X of the Federal Constitution
are contravened by the National Industrial Recovery Act,

Volume 137

Financial Chronicle

Judge Andrew A. Bruce, Professor of Law at Northwestern
University, told the Chicago Kiwanis Club at a luncheon
mee.ing in the Hamilton Club, Chicago, on Sept. 21, according to the Chicago "Journal of Commerce" of Sept. 22,
which further reported:
Expressing the hope that the constitutionality of the NIRA may never
be tested in the Supreme Court, Judge Bruce said that this Judicial body
would have to resort to metaphysics and much legal acumen to sustain
the Act. Sanction of this legislation, he continued, would overrule a long
line of decisions and would be tantamount to recognizing an intellectual
and industrial revolution as complete as has occurred in Germany and Italy.
Makes Government Supreme.
"Formerly," Judge Bruce declared, "our theory was that the Federal
Government was a government of limited and of delegated powers. Now
an attempt is made to make it supreme. Formerly we insisted upon a
theory of individualism, of State rights and of local police control, and the
Supreme Court had repeatedly held that even the power to regulate interState commerce could not be used to control the domestic policies of the
several States. Now the State is being forgotten and has been practically
made a County in the Federal organization.
"Under the presumed power to regulate commerce the Federal Government is controlling prices, controlling output, controlling hours of labor and
fixing wages. Formerly our constitutional policy was one of individualism
which frowned upon monopolies of all sorts and favored freedom of competition.
Would Stretch Constitution.
"Should the Supreme Court sustain the NRA. the justices will be acting
as statesmen or politicians, rather than as judges interpreting and administering established law. They will be stretching the Constitution
much as Mr. Marshall did to weld 13 States into a nation.
"Personally I would say that we should get behind the NRA, but at
the same time we should say: 'Step warily. This far you may go, and no
further.' Even if we concede that the Tugwellian t..eories may be temporarily helpful, we must not permit the destruction of the fundamentals
of our Government or our hope in America."

Hearing on Hotel Code Strikes Obstacle in "Merit"
Clause—NRA Insists on Its Elimination Before
Agreement Can Be Approved—American Federation
of Labor Objects to Hours and Wage Provisions.
Hearings on a code of fair competition for the hotel
industry, held before Deputy Administrator Whiteside in
Washington this week, were suspended after the hotel men
had declared they would not remove from the agreement the
so-called "merit" clause, which stipulates that employment
shall be open to capable workers, without regard to their
membership or non-membership in any labor organization.
National Recovery Administration officials indicated, however, that the section must be eliminated before a code
could be submitted to President Roosevelt for his approval.
Negotiations on this and several other controversial features
of the code continued late this week.
At the initial hearing on the hotel code on Sept. 25 certain
sections of the agreement were attacked by both William
Green, President of the American Federation of Labor,
and some of the hotel operators who testified. Summarizing
the testimony on Sept. 25, Associated Press Washington
advices of that day said:
Mr. Green, after detailing objections to hour and wage provisions,
expressed hope that the representatives of employers and workers would
get together and. "in co-operative effort, draw up a code which will more
adequately effectuate the purposes of the NRA than does the one now
presented by the hotel employers."
E. 0. Romine, New York hotel operator, described the hotel industry
as in "shaky financial condition." tie warned that the raising of wages
and trimming of working hours would risk further defaults and receiverships
for many hotels.
Mr. Green said the maximum schedule of 56 hours a week for men and
48 for women as provided in the code would not accomplish the aim of
putting some 70,000 idle hotel workers back to work.
As to wages, Mr. Green said, the code was confused by conditioning
some wages on the amount of "tips" an employee received. This, he
asserted, would render toe worker insecure and result in "virtual peonage."
The wage scale ranging from 20 to 28 cents an hour was described as inadequate, Mr. Green asserting that the 30% reduction from this minimum
allowed for "learners" would destroy the wage set-up as employers could
rotate new help in such a way as to keep a continuous force of "learners."
Mr. Rennin° said $5,000,000,000 was invested in hotels in this country
and that 80% of hotel mortgages were in default, with bonds selling on
the average of 15 cents on the dollar. In many instances, he said, not even
pay rolls were being earned, but notwithstanding this hotels had maintained
employment throughout the depression.

Another obstacle in the path of a successful conclusion
of a hotel code arose during the second hearing on Sept. 26,
when officers of the American Hotel Association reiterated
their insistance that the controversial "merit" clause be
included in the agreement. On the preceding day Deputy
Administrator Whiteside announced that consideration of
the code would be deferred until the merit clause was
deleted. No reply was made at that time, and Mr. Whiteside assumed that the hotel operators were willing that the
clause should be omitted. On Sept. 26, however, Lucius M.
Boomer, Chairman of the Hotel Association's Industrial
Recovery Committee, said that he wished to correct an
impression that the industry had deleted the clause. This
testimony was described in part as follows in Washington
advices to the New York "Times":
Speaking directly to Deputy Administrator Whiteside, who was conducting the hearings. Mr. Boomer said:




2399

"I am sure that you do not feel as the result of what was done and said
yesterday that we agreed to the exclusion of the very important merit
clause. We have not agreed to its exclusion, and do not agree to its
exclusion."
"That compels me to make a statement," Mr. Whiteside replied. "I
did not allow discussion of the merit clause because it would have led us
nowhere. That is a matter of administrative policy which has not been
changed and cannot be changed so far as 1 am concerned.
"The policy at this time is that the merit clause cannot be included in
a code. You say it cannot be withdrawn. The matter will have to be
Ironed out later."
When he said to-day that the "matter will be ironed out later," be
meant that Recovery Administrator Johnson or, if need be, President
Roosevelt would be asked to make the final decision.
The clause in question provides that hotels shall be open to capable
workers, "without regard to their membership or non-membership in any
labor organization," and that the right to hire or dismiss employees "on
the basis of individual merit subject to the fluctuating conditions of the
business shall not be limited or abridged."

Wholesale and Retail Grocers File Codes with NRA—
Hearings on Labor Provisions Set for Oct. 5—
Retail Pact Specifies 48
-Hour Week, with Overtime
Permitted in Peak Periods and Minimum Pay
Placed at $15.
Hearings on the labor provisions of a code of fair competition for retail and wholesale grocery establishments
will be held before the National Recovery Administration
on Oct. 5, it was announced in Washington on Sept. 27
after codes were submitted on that day. Sections of the
codes dealing with fair practice will go before the Agricultural
Adjustment Administration. The retail grocery code provides a 48-hour maximum week of not more than six days,
while the wholesale agreement specifies a maximum 44
-hour
week of six days. The codes do not include professional
persons, outside salesmen and collectors, watchmen and
detectives. Maintenance and outside service employees of
retail grocers are permitted to work 52 hours or more weekly,
provided they receive time and a third for all time over
52 hours. The wholesale code would grant overtime after
48 hours' work. Other provisions of the two codes were
listed as follows in Associated Press Washington advices of
Sept. 27:
both codes provide that at Christmas, inventory time and at other
peak periods, not to exceed two weeks in the first six months of the calendar
year and tnree weeks in the second six months, employees may work not
more than 56 hours a week and 10 hours a day. with payment for overtime.
The retail code provicies a minimum of $15 a week in cities of more than
500.000 population; $14 in cities of 100,000 to 500,000; $13 in cities of
from 25,000 to 100.000; a 20% increase in villages and towns of 2,500 to
25,000 to fix wages between $10 and $11, and in communities of fewer
than 2,500 a 20% increase up to $10.
The following minimum wage scale is set up for wholesale employees:
In cities above 500,000. $14.50 for a 44
-hour week and $15 for a 48
-hour
week; between 100,000 and 500,000, $13.50 for a 44
-hour week and $14
for a 48
-hour week; 25,000 to 100,000, $12.50 for a 44
-hour week and $13
for 48 hours; in communities from 2,500 to 25,000 the wages of all classes
would be increased from the rates existing on June 1 by not less than
20%, provided this did not require an increase above $11 and that no
employee receive less than $10. In villages of fewer than 2,500 population
a 20% increase up to $10 would be provided.
Both codes permit one extra hour of work on one day a week, as long
as the maximum hours are not exceeded. The retail code limits to one in
six the number of inside workers who may be exempted from the maximum
hour provisions, this including executives, proprietors, partners or persons
not receiving monetary wages.
Under the retail code grocers in any buying area, town or city, by mutual
agreement of two Ultras of the operators, subject to approval of the NRA
Administrator, would establish uniform store operating hours which would
be binding on all stores.
Hours so established could not be under 63 a week or over 78, except
that any establishment which was operating on a schedule under 63 hours
on June 1 might continue on the same basis, but not reduce further.

Gilbert H. Montague on NRA Codes, Price Fixing and
Anti-Trust Laws
--Before National Petroleum Industry Says Code Provisions Containing Debatable
Phrases Are Liable to Be Thrown Out in Courts.
Gilbert H. Montague of the New York Bar, speaking
before the National Petroleum Association at the Hotel
Traymore at Atlantic City on Sept. 22, stated that "for many
weeks to come, the National Recovery Administration must
rely upon industry to propose properly drafted code provisions by which, in the words of the President's May 7
radio address, the strong arm of the Government may prevent unfair practices on the part of 'the unfair 10%,' and
may prevent the 'cut-throat underselling by selfish competitors' mentioned in the President's May 17 address to
Congress." he added that "code provisions containing
ambiguities and debatable phrases are liable to be thrown
out as too indefinite, when tney come up for enforcement
in the courts, or in tne Federal Trade Commission, or ai the
Attorney-General's office. .Vor this state of affairs," he
continued, "the remedy must be sought, not in the overworked staffs of the NitA, but in improved drafting ability
and higher specialized competence in the industry committees which submit codes to the NRA."
The subject of Mr. Montague's address was"NRA Codes,
Price Fixing and Anti-Trust Laws," and in his comments
he said:

2400

Financial Chronicle

While NRA bill was being drafted, the President in his May 7 radio
address declared that the "Government ought to have the right, and will
have the right, after surveying and planning for an industry, to prevent,
with the assistance of the overwhelming majority of that industry, all unfair practices, and to enforce this agreement by the authority of the Government," and thus curb "the unfair 10%" and free "the fair 90%" from the
situation of being "compelled to meet the unfair conditions" created by
"the unfair 10%."
The President and the Congress have done their part, and the NRA
now offers to business men a splendid opportunity.
It will be a pity if this opportunity is lost, because of lack of specialized
competence and bad draftsmanship in the codes that are now being submitted to the NRA.
Will code provisions fixing prices be upheld by the courts?
No one can safely venture a prophecy on this question.
In the past 20 years, in upwards of a dozen decisions,repeated legislative
attempts to regulate prices have been upset by the Supreme Court of the
United States—some on the ground that they were too indefinite for enforcement, and some on the ground that they were inapplicable to general
business.
In the NIRA and in the emergency to which it is addressed.the Supreme
Court may find grounds on which to excuse a departure from this long line
of decisions.
The difficulty in finding constitutional support for price fixing provisions
in NRA codes is great, but so is the difficulty in finding constitutional
support for the obligatory provisions in NRA codes regarding collective
bargaining between employers and employees, maximum hours of labor
and minimum rates of pay, which constitute the very heart of the NRA.
The most valuable result of the NRA may turn out to be a changed national attitude toward the anti-trust laws.
Since 1890 our national thinking on this subject has been enslaved by a
congeries of economic notions, political ideas, legal theories and popular
beliefs which have become compacted through the years into a national
state of mind entirely unlike that of any other nation.
"There must be power in the States and the Nation,"said a great Justice
of the Supreme Court in March 1932,"to remould,through experimentation,
our economic practices and institutions to meet changing social and economic nees. . . . To stay experimentation in things social and
economic is a grave responsibility. Denial of the right to experiment
may be fraught with serious consequences to the Nation. . . . If we
would guide by the light of reason, we must let our minds be bold."
Obviously we are now at the point where immediate emergency relief
may help more than any delayed legislative masterpiece—where a prompt
temporary remedy may be a greater necessity than any postponed statutory
utopia—where speed may be more important than absolute perfection—
where prolonged discussion may perhaps help very little, but a certain
amount of sound and prudent experimentation can possibly help a great
deal.
History may record, as the greatest accomplishment of the NRA, that
it freed the Nation from the slavery of an unsound national state of mind
regarding the anti-trust laws, and that it aroused the Nation to break
through its 40 years of encrusted economic notions, political ideas, legal
theories and popular beliefs regarding these laws, into a sound and realizing
sense of social and national actualities.

From the Atlantic City account Sept. 22 to the New York
"Times" we take the following:
Mr. Montague assisted General Hugh Johnson in drafting the NIRA
blanket code. He is Chairman of the NRA Committee of the New York
State Bar Association.
Overlapping codes are bound to cause a great deal of confusion among
the various industries in their effort fairly to interpret the requirements
and to live up to the obligations, he declared.
Vague Provisions Found.
"No lawyer would ever think of trying to get a conviction in court on
some of those vague and so-called elastic provisions in many of the codes,"
Mr. Montague said. "The conscientious manufacturers will obey. The
others will not. It is bound to bring a tremendous reaction against the
whole NRA.
"That casual hearing on the top floor of a Washington hotel, on an
industry we never thought we belonged in, may be writing the law that
governs other Industries apparently far removed.
"I am not blaming any one. Apparently that is the only way the
NRA can be put in effect rapidly enough to serve its purpose. But remember that when a code is passed it constitutes an Act of Congress. Often an
industry does not know that an overlapping code which will cover its
operations is coming up for hearing until the very day.
11 "It 113 bad enough to have a schedules cover too much, but still worse
to have it contain unfair competition clauses which do not adequately
hit any one."
"Whatever may be the short comings of the NIRA in restoring employment, it will certainly greatly relieve unemployment among lawyers."
Mr. Montague said.

$270,647,352 Paid to Depositors in Closed National
Banks Between March 5 and Sept. 23—Before
Advertising Club in Washington Comptroller of
Currency O'Connor Reviews Duties of Office-Repayments of Loans Made to Closed Banks by
RFC—Work of FDIC.
Depositors in closed National banks throughout the
United States were paid a total of $270,647,352 between
March 5 and Sept. 23 of this year, J. F. T. O'Connor,
Comptroller of the Currency,told members of the Advertising
Club of Washington at their luncheon in the Hotel Raleigh
on Sept. 26. In a review of the duties of his office, Comptroller O'Connor also pointed out that his Department is
directing the work of 1,140 receiverships now; he explained
the fallacy of expecting the entire deposits of banks in
receivership to be recovered; gave details as to the number
of licensed and unlicensed banks, and spoke of the work of
the Federal Deposit Insurance Corporation. The Comptroller said:
The Reconstruction Finance Corporation has co-operated magnificiently with my office and we have been able to pay to depositors in closed
banks from March 5 1933. to Sept. 23 1933. $270,647.352. Since March
1932, 666 loam have been made by the RFC to banks in receivership in
the amount of $68,409,600. of which $50,636,798.36 has actually been




Sept. 30 1933

drawn by receivers and used in payment of dividends. Of this amount
$40,850,665.41 has been repaid to the RFC as of Aug. 31 1933.

He explained that the lending of this money permits a
more orderly liquidation of a closed bank's assets. On
Sept. 23 1933 Mr. O'Connor announced, the Comptroller of
the Currency was directing the work of 1,410 receiverships,
the total deposit liability of such banks being 18,012,438;
continuing, he said:
There has been considerable comment about the effect on business if
this amount were released at once. In reality there is no such sum to
be released to depositors. The figure given represents the total deposit
liability in receiverships as of the date given. If there were no losses a
bank would not be in receivership, and just what the losses amount to is
of course impossible to ascertain, Your guess is as good as mine. However, I believe it is very important to point out this fact to our people.

On Sept. 25 last, the Comptroller pointed out, deposits in
unlicensed National banks aggregated $707,762,000. At that
time, he added, banks licensed totaled 620, reorganization
plans had been approved for 362, plans were under consideration for 122, no feasible plan had been submitted by
38 banks, and plans had been disapproved and a receiver
recommended in the case of 303 banks. "When present
approved plans are consummated," Mr. O'Connor declared,
"less than 2% of total deposits will be frozen in National
banks. The remaining banks which are in the hands of
conservators will be either reopened through reorganization,
consolidation, sale of assets under the Spokane plan, or placed
in receiverships before Jan. 1 1934."
Washington, the Comptroller said, presents a good idea
of the work of his office in the reorganization, consolidation
and merger of banks. "Here," he said, the reorganization
division worked day and night for months and finally
merged seven Washington banks into the new Hamilton
National Bank for which a charter was issued on Saturday
Sept. 23, and it opened for business yesterday morning
Sept. 25. This bank made available for depositors in the
old banks approximately $9,000,000. I regret sincerely
that the depositors of the United States Savings Bank did
not also take advantage of this merger which would have
made available to them 50% of their deposits. However,
court action prevented this happy result. To-day there is
being distributed to the depositors of the Commercial
National Bank over $1,000,000."
Mr. O'Connor explained the operation of the new FDIC,
of which he is a director with E. G. Bennett and Walter J.
Cummings, who is Chairman. The temporary insurance.
whereby bank depositors will be guaranteed their accounts
up to $2,500, goes into effect Jan. 1. The speech of Comptroller O'Connor follows in full:
The office of the Comptroller of the Currency has jurisdiction over all
National banks and has direct charge of all receiverships and conservatorships. Through the banks in receivership practically every known business is directed: some 200,000 acres of land, cotton plantations, orange
groves, pineapple plantations, wheat, tobacco, factories, hotels, apartment buildings, coal mines, railroads, various manufacturing plants, and
in fact every branch of industry is represented in the numerous conservatorships. In former days when a bank was placed in liquidation and a receiver appointed, dividends were paid to depositors only as they were
collected from the borrowers. In many instances this meant great delay
and not infrequently, great hardship upon the borrowers. This system
has been entirely changed. When a bank is placed in receivership and
the proper notice to creditors is published, the Comptroller instructs the
receiver to make application to the RFC for as large a loan as it is possible
to receive on the frozen securities in the bank. The RFO has co-operated
magnificently with my office and we have been able to pay to depositors
in closed National banks from March 5 1933 to Sept. 23 1933, $270,647,352.
Since March 1932, 666 loans have been made by the RFC to banks in
receivership in the amount of $68,409.600, of which $50,636,798.36 has
actually been drawn by receivers and used In payment of dividends. Of
this amount $40,850,665.41 has been repaid to the RFC as of Aug. 311933.
The great advantage of this system is at once apparent as It permits a
more orderly liquidation of the assets of a closed bank and holds off the
market stocks, bonds and other securities which, if dumped upon the
market, would bring a much lower price.
At the present time the Comptroller of Currency is directing the work
of 1.140 receiverships as of Sept. 23 1933. The total deposit liability
in these banks is $818,012,438. There has been considerable comment
about the effect on business if this amount were released at once. In
reality there is no such sum to be released to depositors. Tho figure given
represents the total deposit liability in receiverships as of the date given.
If there were no losses a bank would not be in receivership, and just what
the losses amount to is, of course. Impossible to ascertain. Your guess
is as good as mine. However, I believe it is very important to point out
this fact to our people.
Then we have what is known as unlicensed National banks. On Sept.
25 the deposits in these banks amounted to $707,762,000. The following
data will be of interest:
620
Banks licensed
362
Reorganization plans approved
122
Plans under consideration
38
Banks submitting no feasible plan
303
Plans disapproved and receiver recommended
1,445
Total
We have completely cleared the slate in 23 States. When present
approved plans are consummated less than 2% of total deposits will be
frozen in National banks.
The remaining banks which are in the hands of Conservators will be
either reopened through reorganization, consolidation, sale of assets under
the Spokane plan, or placed in receiverships before Jan. 1 1934.

Financial Chronicle

Volume 137

No better general idea of the work of the Comptroller's office in the reorganization, consolidation and merger of banks can be found than in the
City of Washington. Here the reorganization division worked day and
night for months and finally merged seven Washington banks into the
new Hamilton National Bank for which a charter was issued on Saturday.
and it opened for business yesterday morning. This bank made available
for depositors in the old banks approximately $9,000,000. I regret sincerely that the depositors of the United States Savings Bank did not also
take advantage of this merger which would have made available to them
50% of their deposits. However. Court action prevented this happy
result. To-day there is being distributed to the depositors of the Commercial National Bank over $1.000.000. The distribution of this money
in both instances has been due to cash collected in conservatorship on
loans. sale of some assets, and loans from RFC. I give you these two
illustrations and call your attention to the fact that this is what we are
doing all over the United States.
Permanent prosperity in this country must be built upon a sound banking structure.
Time will not permit me to give you in detail the work of the FDIC.
This corporation was organized on Sept. 11, at which time Walter .1.
Cummings, E. G. Bennett of Ogden, Utah, and myself were sworn in as
directors, and five days later there were sent out from Washington 50
bags of mall containing over 5,000 letters to every non-member State bank
and other institutions in the United States eligible to qualify for Insurance
in the Deposit Fund. These letters contained instructions. applications•
for admission, a copy of the Banking Act of 1933. blanks on which banks
are to list all securities and deposit liabilities, and other information.
Therefore every bank in the United States is fully advised as to the requirements of membership.
An experienced and efficient National bank examiner has been selected
in each State and for several days has been actually working with the
State Banking Commissioner In each of the respective States, securing
data and necessary information to make up the record of the banks of
that State. These examiners were selected without reference to their
political affiliations and were chosen from the list of National examiners
by W. P. Foiger, Chief National Bank Examiner in Washington. Experienced assistants in each State have been appointed under these supervising examiners and actual examination of banks has commenced. You
will be intereeted.to know that at noon to-day there were 617 applications
for membership in the insurance fund. The insurance provisions of the
Banking Act of 1933 provide that a bank must certify "upon the basis of
a thorough examination of such bank whether or not the assets of the
applying bank are adequate to enable it to meet all of its liabilities to
depositors and other creditors as shown by the books of the bank."
Jesse H. Jones, Chairman of the RFC, has advised all banks in the
nation that he stands ready to purchase preferred stock in banks which
need capital strengthening. The President of the United States has said
"the object of the insurance provisions of the Bank Act was to insure as
many non-member banks as possible."
The temporary insurance which will insure each depositor up to $2.500
In banks which become members of the fund will become effective on Jan.
1 1934.

Reopening of Closed Banks for Business and Lifting
of Restrictions.
Since the publication in our issue of Sept. 23 (page 2218),
with regard to the banking situation in the various States,
the following further action is recorded.
COLORADO.

Purchase by the Reconstruction Finance Corporation of
a $1,500,000 new preferred stock issue of the Colorado
National Bank of Denver, Colo., thereby increasing the
capital of the institution from $1,000,000 to $2,500,000,
was announced on Sept. 21 by Harold Kountze, Chairman
of the Board of Directors of the bank. The Denver "Rocky
Mountain News" of Sept. 22, authority for the above,
quoted Mr. Kountze in his announcement as saying in part:
During the past few years many borrowers in all sections of the country, who, in normal times, met their obligations promptly, have been unable to do so, owing to the nation-wide conditions, over which they
had
no control, involving rapidly falling values for their commodities, agricultural and live stock products, securities and real estate. Such borrowers
are entitled to consideration and help. Naturally their notes are not as
liquid as would ordinarily be the case, although practically all such paper
will be paid in a reasonable time and as general business recovery develops.
In spite of a long continued practice of investment in almost entirely
short time domestic securities of the highest class, with a very limited
amount of investment in local bond issues to care for our share
of the
community needs, there has been some slight depreciation in even
these
security holdings.
We have taken this opportunity to eliminate all doubtful notes and
depreciation of securities from the assets of the Colorado National Bank.
We are proud that the Government of the United States has decided
us worthy enough to Invest in $1,500,000 of preferred stock of the Colorado National Bank, and this has been done with the full approval of
the Comptroller of the Currency, the RFC and the Federal Reserve Board
at Washington, and the full co-operation of the Federal Reserve Bank
of Kansas City.

The reopening shortly of the Grand Valley National Bank
of Grand Junction, Colo., is indicated in the following dispatch from Washington, D. C., on Sept. 23 to the Denver
"Rocky Mountain News":
Plans for the reopening Oct. 15 of the Grand Valley National Bank
Grand Junction, Colo., are being rapidly completed, it was disclosed here
-night. W. 0. Kurtz, representing depositors of the institution, who
to
has been here conferring with Senator Alva B. Adams, left Washington
to-night for his home.
ILLINOIS.

As of Sept. 25, the directors of the RFC authorized the
purchase of $50,000 preferred stock in the Security National
Bank of Cairo, Cairo, Ill., a new institution. This is contingent upon the subscription of like amount of common
stock by_those interested in the new bank.




2401

Proposed reorganization of the First National Bank of
East St. Louis, Ill., with capital of $200,000 and a surplus
of $50,000, was announced on Sept. 22 by A. C. Johnson,
its President. The institution was placed on a restricted
basis on Feb. 28 last and failed to re-open after the National
banking holiday in March. Under the reorganization plan,
stockholders will be asked to surrender their holdings for
cancellation, and depositors will receive trustees' certificates
of participation. The St. Louis "Globe-Democrat" of
Sept. 23, authority for the above, went on to say:
The plan, Mr. Johnson said, will become binding when two-thirds of the
capital stock is surrendered and three-fourths of the depositors and other
creditors have signed waivers.
Stockholders in the Illinois State Trust Co., an affiliate of the First
National, will also be asked to surrender their stock for assignment to the
trustees. This stock has a book value of $415,000.
The reorganization plan contemplates two loans from the RFC. the
first for $200,000, and an additional loan of not more than $715.000.
Assets or equities in assets of the bank, which are to be assigned to the
trustees, amount to $2.118,644, including $974.066 In "good" notes receivable and bonds and securities, and $1,553.951 in slow. doubtful and
lost accounts.
N. C. McLean, senior member of an East St. Louis real estate firm;
H. Grady Vien, attorney. and Mr. Johnson will serve without pay as
trustees for "waiving" depositors. Mr. Johnson hopes to complete the
reorganization plan within 15 days or soon thereafter.

The State Auditor for Illinois, Edward J. Barrett, has
authorized the Rock Island Bank & Trust Co. at Rock Island
to reopen without restrictions.
The Chicago "Journal of Commerce" of Sept. 25 stated
that the Tompkins State Bank of Avon, Ill., would reopen
on an unrestricted basis on that day, according to an announcement by Edward J. Barrett, the State Auditor.
LOUISIANA.

The directors of the Reconstruction Finance Corporation
have authorized the purchase of $50,000 preferred stock in
the Citizens' National Bank of Morgan City, Morgan City,
La., a new bank which is to succeed the Bank of Morgan
City & Trust Co. and the Peoples State & Savings Bank of
Morgan City.
The preferred stock authorization is contingent upon the
subscription of an equal amount of common stock by those
interested in the new bank.
MARYLAND.

Three small Maryland banks, all located in Carolina
County, were reopened on Sept. 21, according to the Baltimore "Sun" of that date which went on to say.
One of these is the Peoples Bank, Denton, with a branch at Ridgely.
This bank has a capital of $50.000: surplus. $10,000. and deposits of $540,000. H. T. Nuttle is President. and J. Frank Wright, Cashier. G. L.
Wilson is Manager of the Ridgely branch.
Another is the Caroline County Bank, Greensboro. This bank has a
capital of $40,000, surplus of $15,000 and deposits of $725,000. Dr. W. W.
Goldsborough is President, and T. C. Horsey. Cashier.
The third bank is the Hillsboro-Queen Anne Bank, Hillsboro. with a
branch at Cordova. This institution has a capital of $25,000, surplus of
$5,000 and deposits of $380.000. Charles Jarrell Is President. and H. P.
Flowers, Cashier. Ralph E. Swartz is Manager of the Cordova branch.
These three banks . . . all followed the same form of reorganization. The capital structure of each was revamped by the issuance to
depositors of 5% of their respective deposits in stock and 30% In beneficial interest certificates. The remainder of deposits is made immediately
available.

We learn from the Baltimore "Sun" of Sept. 21 that the
Talbot Bank at Easton, Md., a small institution with
combined capital and surplus of 0,000 and deposits of
$800,000, reopened for business on Sept. 21. The reorganization was effected, it was stated, by reducing the old
capital from $25,000 to $10,000 and then increasing it to
$50,000 by the sale of ulditional stock of the par value of
$10 a share at the price of $22 a share. Charles B. Lloyd
is President of the institution and W. W. Spence, C tshier.
MASSACHUSETTS.

Advices from Pittsfield, Mass., on Sept. 20, appearing in
the Springfield "Republican," stated that reorganization
of the Berkshire Trust Co. of Pittsfield had been completed
and that Arthur Guy, State Banking Commissioner for
Massachusetts, had removed all banking restrictions from
the institution. Cummings C. Chesney, President of the
bank, was quoted as saying on Sept. 20 that the company
has more than $800,000 in cash and no indebtedness. The
steps taken in the reorganization were given in the dispatch
as follows:
1. Sale of $300,000 in preferred stock "A" to the RFC.
2. Sale of $300,000 in preferred stock "B" to stockholders, depositors,
banks and other individuals.
3. Reduction of the common stock structure from $300.000 to $150,000.
4. Charging off the worthless and questionable loans, and sale of real
estate mortgages to banks of Pittsfield and the surrounding county.

The advices furthermore said in part:
All bills outstanding have been liquidated, including the original loan of
$500,000 made by the RFC over a year ago.

Common stock in the company was reduced from $300,000 to $150,000
by reducing the par value of each share from $100 to $50. To this $150,000
in new common stock is added the $600,000 in issues of preferred stock.
bringing the total capital structure of the company to $750.000, as compared with $300,000 previously.
The RFC becomes the bank's largest stockholder with its purchase of the
preferred stock "A" issue. It consists of 6,000 shares with a par value
of $50 apiece. It will bear 5% annual interest for the next five years. and
6% annual interest thereafter. Under agreement with the RFC, the
company is required to set up a retirement fund, into which will be put
annually not less than 50% of the net earnings of the company until preferred stock "A" is retired.

Officers of the Berkshire Trust Co. in addition to Mr.
Chesney are Harry S. Watson, Vice-President and Treasurer;
Benjamin M. England, Vice-President; Erenest J. Waterman, Vice-President and Trust Officer; and John Hainsworth and William F. Retalliek, Assistant Treasurers.
MICHIGAN.

The Board of Directors of the RFC has authorized the
purchase of $40,000 preferred stock in the National Bank
of Ypsilanti, Mich.,a new bank to succeed the First National
Bank of Ypsilanti. The preferred stock authorization is
contingent upon the subscription of common stock by those
interested in the new bank.
On Sept. 25 the directors of the RFC authorized the purchase of $25,000 of preferred stock in the First National
Bank in Ontonagon, Ontonagon, Mich., a new bank which
is to replace the First National Bank of Ontonagon. The
preferred stock authorization is contingent upon the subscription of an equal amount of common stock by those
interested in the new bank.
In regal d to the affairs of the two closed Detroit banks—
the First National Bank-Detroit and the Guardian National
Bank of Commerce—the following statement was issued
at Washington on Wednesday of this week, Sept. 27, by
J. F. T. O'Connor, Comptroller of the Currency:
Despite published reports that the Comptroller of the Currency has
refused to approve plans made by the RFC for the rehabilitation of the two
leading closed Detroit banks, the fact is that the RFC has suggested no
definite plan for the reorganization of these banks.
Plans are under consideration for further assistance to the Detroit
closed banks.

Two small Michigan banks. the Lee State Bank of Dowagiac and the Antrim County Savings Bank at Mancelona
have feopened. In zeporting this the Michigan "Investor"
of Sept. 23 had the following to say:
The Dowagiac Bank was reorganized under a plan of 100% assessment
of stockholders, two of the largest being Fred E. Lee and A. B. Gardner.
At the same time all doubtful assets were removed and the balance written
down to present-day values. Ten per cent of deposits were made available at the reopening, and more than $40,000 was deposited the first day.
The Mancelona bank is the first to be reopened in that section of the
State since the moratorium. E. L. Mills, Cashier for 40 years. acted
as conservator until the reorganization was completed. The distribution
of the deposits will be made through certificates bearing interest. No
earnings of the bank will be paid as dividends to stockholders until a
surplus is established equal to 20% of the capital stock of the bank, or
$5,000.
MISSOURI.

We !eau) from the St. Louis "Glebe-Democrat" of Sept.
24 that a loan of $3,660,000 to the Lafayette-South Side
Bank & Trust Co. of St. Louis, Mo., which is undogoing
reorganization, was approved by the RFC in Washington
on Sept. 23. A brief statement given out at the bank said:
In connection with the reorganization plan of the Lafayette South
Side Bank & Trust Co., the RFC to-day approved a loan of $3,660,000,
an amount sufficient to consummate this detail of the proposed plan.

The paper mentioned continued as follows:
J. L. Rehme. President of the bank, was in Washington last night
(Sept. 23) and could not be reached for a statement.
It was not known here last night what form the details of the reorganization plan would assume. In Rehme's absence other officials of the bank
declined to comment in addition to the prepared statement. The RFC
loan, however, is considered an important factor in the plan, and as soon
as the remaining details have been approved by the necessary Federal and
State banking officials, an announcement is expected to be made.
The bank has not reopened since the banking holiday last March.
MONTANA.

The RFC has authorized the purchase of $25,000 preferred stock in the Farmers National Bank in Chinook,
Chinook, Mont; a new bank which is to succeed the Farmers'
National Bank of Chinook. Tne preferred stock authorization is contingent on the subscription of an equal amount of
common stock by those interested in the new bank.
NEW JERSEY.

About 500 depositors of the Collingswood National Bank
at Collingswood, N. J., have approved a plan looking
towards the organization of new institution to replace the
present bank now in the hands of a conservator. The
Philadelphia "Ledger" of Sept. 22, from which this is learnt,
eontinuing said:
Under the plan, each depositor with $100 or more to his credit would
assign 15% of his account toward shares in the new bank. This action




Sept. 30 1933

Financial Chronicle

2402

would create $100.000 of capital and $50,000 surplus. The new bank
would take over certain assets of the old institution, while the so-called
present "frozen" assets of the old bank would be liquidated for the benefit
of depositors when market conditions are deemed right.

On Monday of this week, Sept. 25, the Orange Valley
Bank of Orange, N. J., closed since the National banking
holiday in March last, reopened for business. Although the
4,500 depositors were permitted to withdraw 10% of their
deposits, only $2,000 was withdrawn by 50 of them and new
accounts exceeded $18,000. Colonel William Freiday of
South Orange is President of the reorganized institution,
while the other officers are Clarence R. Britten, VicePresident; John J. Brothers, Cashier, and Miss A. M.
Sautter, Assistant Cashier. In reporting the election of the
officers in its issue of Sept. 22, the Newark "News" said in
part:
The bank was reorganized under a plan approved by State Banking Commissioner Kelley.
It involved the selling of $243,750 of preferred stock to depositors. The
amount was raised over a month ago in a week's campaign under direction
of a depositors' committee. When the bank opens Monday all depositors
will be entitled to withdraw 10% of their accounts less the amount subscribed for the preferred stock.
All new accounts after the reopening will be available in full on call.

Plans have been begun by the reorganization committee
and the depositors of the First National Bank of Carteret,
N. J., for the reopening of the institution on a restricted
basis as soon as the necessary amount of waivers is received
from the depositors, according to advices from that place
on Sept. 27 to the New York "Times," which continuing
said:
The bank was closed on March 3 in the national moratorium and was
reopened later on a restricted basis with a conservator. About $1,200,000
in deposits were tied up.
Under the new plans the depositors will have available immediately
about $600,000. and the remaining $600,000 will be liquidated by trustees,
and as it is made available it will be turned back to the depositors. It is
said that $75.000 of the required $120,000 new capital has been subscribed
and that the remainder is in view.

With reference to the affairs of the First National Bank
of Secaucus, N. J., now in the hands of a conservator, the
"Jersey Observer" of Sept. 26 carried the following:
Contingent upon successful reorganization under the modified Spokane
plan, the Treasury Department yesterday (Sept. 25) advised the depositors'
committee and Conservator William Hilbert, Jr., of the First National
Bank of Secaucus, that a $447.000 loan had been recommended by the RFC.
Application for the loan was made in July, and the amount approved
by the RFC will provide for a 55% initial withdrawal dividend for depositors, in addition to retirement of bills payable.
The modified Spokane Plan, submitted by Town Attorney John E.
Degelmann, representing the depositors' committee, Conservator Hilbert,
and Counselor G. P. Moser, bank lawyer. provides for an issuance of 4,000
shares of common stock with a par value of $25 a share. The capital of
the new bank, under this plan will be $100,000 and the surplus $20,000.
Nothing of a definite nature has developed from negotiations with an
"outside group" who manifested interest in the Secaucus Bank some time
ago, Mayor John J. Kane. Chairman of the depositors' committee reported.
He stated that a representative of this un-named group is to let him know
their decision to-day. If the plan to have the group aid the bank falls through,
the Mayor said he will call a meeting of the depositors and have them vote
on the plan approved by the RFC under which the loan will be granted.
NORTH CAROLINA.

A new plan is now under way for the reorganization of the
Page Trust Co. of Aberdeen, N. C., and its 13 branches
throughout that State. At Raleigh on Sept. 20, 50 or more
representatives of the depositors of the parent bank and of
its various branches met officials of the State Banking
Department and of the trust company and unanimously
approved the new plan. Following the meeting, Gurney
P. Hood, Commissioner of Banks for North Carolina, stated
that the new arrangement provides for the organization of a
State bank only, the new institution not to be nationalized
as was the case with the Security National Bank, organized
recently to succeed the defunct North Carolina Bank &
Trust Co., and in which, under the original plan, the Page
Trust Co. was to have been included. The new institution
will be capitalized at $150,000 with surplus of $75,000, the
former to consist of 15,000 shares of common stock of the
par value of $10 a share, which will be sold at $15 a share
and thereby provide the surplus. We quote below in part
from the Raleigh "News & Observer" of Sept. 21,from which
also the foregoing information is obtained:
Commissioner Hood said yesterday (Sept. 20) that a 20% dividend to
depositors in the Page Co. is contemplated. The plan of reorganization
states that "the existing bank will distribute to its unsecured and partially
secured depositors through the new bank all cash on hand, all proceeds from
the assets sold to the new bank, and all proceeds derived from the stock
assessment prior to the consummation of this plan except the amount paid
for capital stock in the new bank. To provide an additional amount for
distribution to the depositors, the existing bank will borrow from the
RFC and pledge its assets as security for the amount so borrowed."
The Page Trust Co. has been operating on a restricted basis since March 3
of this year and has been in the hands of a liquidating agent for some time.
the agent being appointed for the purpose of levying a 100% stock assessment against stockholders. At that time the entrance of the Page company
into the plan for reorganization of a State-wide bank composed of the Page,
the North Carolina Bank & Trust Co.. and the Independence Trust of

Financial Chronicle

Volume 137

Charlotte was contemplated. The deposit liability of the institution when
it went on a restricted basis was approximately $2,800,000. . . .
A summary of the new plan follows:
At the request and option of the existing bank,the new bank will purchase
with cash the best unpledged assets of the existing bank in any amount
offered, not in excess of $225,000. but no assets shall be so purchased except
such as are acceptable to an appraisal committee of the new bank. Purchaseable assets shall consist of the following:
1. United States bonds and other United States obligations.
2. State of North Carolina bonds and notes.
3. Notes fully secured by United States or North Carolina bonds or
notes.
4. Notes fully secured by marketable collateral.
5. Sound notes so classified by the State Banking Department.
After consummation of the plan, the liquidating agent will be removed
and liquidation of the existing bank will be made by a board composed of
four representatives of depositors, two representatives of stockholders and
one representative of other creditors, acting under the supervision of the
Commissioner of Banks and pursuant to such regulations as he may
Issue. . .
The Commissioner of Banks will defer the subsequent reappointment of
a liquidating agent for the existing bank for three years from the date the
new bank begins business, unless in his opinion the condition of the bank
makes advisable such reappointment at an earlier date or the board of
depositors', creditors' and stockholders' representatives request such
reappointment.
At the request and option of the existing bank,the new bank may assume
the payment of all fully secured deposits in the existing bank. The new
bank would receive from the existing bank the security for such deposits
and would account for the same at the existing market value at the time
such securities are taken over.
After 15 days' notice, the new bank will take over all cash on hand and on
deposit with the Federal Reserve bank of Richmond, which the existing
bank holds in trust for the special deposits received since March 3 1933. and
the new bank will assume full payment of these special trust deposits.
Each depositor and creditor of the existing bank will share ratably in the
assets retained for liquidation and will receive a participation certificate
representing the balance of his deposit or claim.

The branches of the Page Trust Co. are located in the
following places: Apex, Albemarle, Carthage, Hamlet,
Liberty, Raeford, Raleigh, Ramseur, Sanford, Siler City,
Thomasville, Troy and Zebulon.
That trust powers have been given to the new Security
National Bank of Greensboro, N. C., (which represents a
reorganization of the North Carolina Bank & Trust Co.), is
indicated in the following dispatch by the Associated Press
from Greensboro under date of Sept. 21:
The Security National Bank now "has full authority to exercise trust
Powers" the bank was advised in a telegram received to-day (Sept. 21)
from the Federal Reserve Board in Washington and a formal certificate
authorizing the institution to operate a trust department will be received
from Washington in an early mail.
Within the next few days C. M. Vanstory, Jr., Trust Officer of' the
Security National Bank, stated to-day, the trust department will begin
business here in Greensboro and in the cities in which the bank has branches,
namely Raleigh, Wilmington and Tarboro.
OHIO.

Concerning the affairs of the closed First-Central Trust Co.
of Akron, Ohio, advices from Akron under date of Sept. 19,
printed in the Clevelani "Plain Dealer," contained the
following:
"Gratifying results" were reported to-night by members of the reorganization committee at the end of the first day of its drive to reopen the
closed First
-Central Trust Co. here.
More than 1,200 depositors had submitted their "proofs of claim" and
of these, 1,053 had signed the reopening agreement, H. H. Kuhn, General
Manager of the Hardware & Supply Co. and member of the committee,
reported.
More than $6,000,000 will be released to depositors if holders of 85%
of the frozen funds agree to the reorganization plan.
Seventy-nine of the 2,200 stockholders had approved the reorganization
agreement, it was reported when the tellers closed heir windows at 9 p. m.
"While the number that showed up to sign the agreements to-day was
not as large as we had expected, we are pleased and expect the number
to increase from day to day," Mr. Kuhn said.

Robert B. Keeler, for the past 18 months in charge of the
St. Louis office of the Guaranty Co. of New.York, has been
chosen Executive Vice-President of the National Bank of
Lima, Ohio, the new institution which succeeds the Lima
First American Trust Co., which failed to reopen after the
banking holiday in March. Previous to his connection with
the Guaranty Co., Mr. Keeler was senior partner of R. B.
Keeler & Co. of Cleveland.
A press dispatch from Bryan, Ohio, on Sept. 26, printed
in the Toledo "Blade," stated that assets of the closed Union
Savings Bank of Bryan were nearly equal to the deposits,
according to the report of officers of the depositors'committee
who said they believed the bank "may pay out well over a
period of years." The dispatch continued:
The report states that the deposit liabilities are $368,000. The assets
are given as approximately $94,000 in mortgage loans; $85,000 on collateral
loans; $15,000 other loans; $102,000 in bonds;$22,000 in real estate;$12,000
in cash, $30,000 of cash now tied up. Examiners said the figures are actual
values.
It was estimated by the officers that there are 95 shares, valued at $50
each, on which double liability might be collected, but this action, it was
said, may not be advisable due to the cost.

Assurance of a reorganization of the People's Bank &
Savings Co. of Cincinnati, Ohio, at the earliest possible date
was given last week with the announcement at Washington
that the Reconstruction Finance Corporation had authorized




2403

the purchase of $325,000 of the capital "A" debentures of
the bank. The People's Bank & Savings Co., which is in
the hands of a conservator, has been operated on a restricted
basis since the banking holiday last March. Word that the
pm chase had been authorized was received by former State
Attorney-General Gilbert Bettman, attorney for the People's
Bank, in a telegram from James B. Alley, attorney for the
RFC at Washington, and stated that the reorganization
plans of the bank had been approved and the request of the
Secretary of the Tieasury endorsed by President Roosevelt
authorizing the purchase had been granted. The Cincinnati
"Enquirer," from which the foregoing is learnt, went on to
say in part:
Mr. Bettman said that the action of the RFC constituted the climbing
of the biggest hill on the path to reopening of the Peoples Bank. He said
that several further capital debentures by the RFC means that the plan of
reopening has also met the approval of the corporation. That plan calls
for the freeing of depositors' claims to the extent of 50% and the issuance
of participation certificates to depositors in the less liquid assets to the
extent of the remaining 50%•
Stockholders will be called upon for contribution to the extent of$200,000.
and subscription to capital debentures in the sum of $175.000 will be sought
from stockholders and the general public. . . .
Mr. Bettman said that virtually all of the actions by the stockholders
and depositors which are required by the action of the Governmental
bodies have been agreed to in advance.
Permission of the Ohio State Banking Department is also to be obtained
after the completion of the purchase of the debentures.
The bank must now match the RFC purchase with a sale of an equal
amount of debentures. This will be sold in Cincinnati, where stockholders
have already pledged themselves to purchase a part of these notes, it is
understood.

The Cleves National Bank, Cleves, Ohio, was formally
opened on Sept. 21, as the successor of the Hamilton County
National Bank of Cleves, which has been closed since the
banking holiday. The new institution is capitalized at
$50,000 with surplus of $10,000 and occupies the former
quarters of its predecessor. The Cincinnati "Enquirer" on
Sept. 22, in noting the opening, went on to say in part:
Dr. J. H. Walton, Sayler Park, is President of the new bank, and S. E.
Howard, who was cashier of the Hamilton County Bank is Vice-President
and Cashier. . . .
In the organization of the new bank 50% of the restricted deposit liabilities
of the old bank were taken over. All monies set aside on the 5% accounts,
and all deposits since Feb. 27 with the conservator, will be transferred to
the new bank after Oct. 5.
J. B. Bonham, conservator for the closed bank, has consented to remain
as conservator for the present and collect all accounts due the former bank.
Funds collected will be made available to depositors on the balances of their
restricted accounts.
PENNSYLVANIA.

A plan for reop?.ning the Keystone National Bank of
Pittsburgh, Pa., and releasing approximately $2,300,000
tied up in the institution sine) the banking holiday last
March, was approved on Sept. 20 in Washington, according
to the Pittsburgh "Post-Gazette" of the following day,
which added:
Dispatches said the only step remaining to be taken was the selling of
Preferred stock in the bank to the Reconstruction Finance Corporation,
application for which already had been made.
As soon as the required amount of stock has been sold, a license will
be issued by the Comptroller of the Currency and unrestricted operation
of the bank may start, it was announced in Washington. Details of the
plan were not available at the bank yesterday in the absence from the
city of A. S. Beymer, conservator and former President of the institution.

Probable re-opening in the near future or Lycoming Trust
Co. of Williamsport, Pa., and the First National Bank of
that city, is indicated in the following dispatch horn Williamsport by the Associated Press under date of Sept. 23:
Hopes for re-opening Williamsport's two largest banks, restricted since
last March, were strengthened to-day, after the re-organization committee
of the Lycoming Trust Co. reported raising $652,000 in new capital. The
First National previously had raised $375,000 in new capital.
Re-opening of the banks, expected in several weeks, will release more
than $3,500,000 in "frozen" deposits. The First National's plan calls for
release of 50%, and the Lycoming Trust's for 40%. The remainder is to be
paid as rapidly as liquidation of assets will permit.

Additional List of Banks Licensed to Resume Operations in Second (New York) Federal Reserve
District.
Supplementing its statement of Sept. 13 (noted in our
issue of Sept. 16, page 2053), the Federal Reserve Bank of
New York issued the following list on Sept. 27 showing
additional banking institutions in the Second (New York)
District, which have been licensed to resume full banking
operations:
FEDERAL RESERVE BANK OF NEW YORK.
[Circular No. 1286, Sept. 27 1933.]
MEMBER BANKS.
NEW JERSEY.
Hackettstown—The Hackettstown National Bank.
NEW YORK STATE.
Dunkirk—The Merchants National Bank of Dunkirk (effective 9:00
a. m., Saturday. Sept. 30 1933).
Norfolk—The First National Bank of Norfolk.

Financial Chronicle

2404
NON-MEMBER BANKS.
NEW JERSEY.

Orange—Orange Valley Bank.
NEW YORK STATE.
Clymer—Clymer State Bank.
GEORGE L. HARRISON, Governor.

•
tion
Ten Forum Leaders Announced for Annual Conven a at
of Investment Bankers Association of Americ to
-Nov. 1—Feature
Hot Springs, W. Va., Oct. 28
Be in Addition to Reg.ular Program.
c subLeaders of the 10 forums on financial and economi
t interest to investment bankers, to investors
jects of foremos
ed
and to business men in general, which have been organiz
s
open debate by members of the Investment Banker
for
the organization's 22nd Annual
Association of America at
, Va., were
Convention, Oct. 28 to Nov. 1 at Hot Springs
Association's office at Chicago on Sept. 24.
announced at the
regular
The forums, it was said, will be in addition to the
ion Sessions at which the Association's Committees
convent
their year's
and research groups customarily make reports of
Association
work. The purpose of the forums, officers of the
current problems close-up, immediate
asserted, is to give
representation
and co-ordinated consideration by as large a
be
an and Canadian investment bankers as may
of Americ
Detailed agenda for each forum
practicable to assemble.
that each may
is being prepared to be sent to all members so
questions or to contribute facts and
be prepared to ask
The
opinions on financial and economic problems of to-day.
it was siad, has for several years been developing
Association,
convention
forum discussions as a supplement to its regular
and the
program. The outline for the 10 forums this year
announced as follows:
leaders thereof were
Distribution—
1. Oct. 28, 11:30 a. m. The British Method of Securities
the United States. The forum

Its Application to Securities Distribution in
& Webster and Blodget,
will be conducted by F. Kenneth Stephenson, Stone
n will be by E. Gerald
Inc.. New York, and the introductory discussio
Board of Governors.
Hanson, of Montreal, a member of the Association's
Inc., which was founded in
Colonel Hanson is a partner in Hanson Bros.,
Mr. Stephenson is
Montreal 50 years ago by his father, Edwin Hanson.
Securities Distribution.
Chairman of the Association's Committee on
Operations and Methods
2. Oct. 28. 2:30 p. m. Improving Syndicate
Loeb & Co., New
of Syndicate Allotment. George W. Bovenizer, Kuhn.
a Vice-President of the
York. will conduct this forum. Mr. Bovenizer is
es.
Association and an active member of Important committe
as Educational Essentials
3. Oct. 29. 11:30 a. in. News and Advertising
Daggett, Marshall & Ilsley Bank, MilIn Business Recovery. James H.
of its Education
waukee. a Vice-President of the Association and Chairman
In addition to
Committee the last three years, will conduct this forum.
y-known corporation
Investment bankers who will participate, nationall
the discussion.
executives, editors and publishers will take part In
Banker—His Current
4. Oct. 30. 10:30 a. in. The Local Investment
Wampler, Lawrence
Problems and His Future Opportunities. Cloud
Wampier is Treasurer
Stern & Co., Chicago. will conduct this forum. Mr.
Chairmen's Committee.
of the Association and Chairman of its Group
Recovery Program—A
5. Oct. 30, 11:30 a. in. The Railroads Under the
The discussion will
Discussion of Its Effect on the Investment Outlook.
New York. Mr. Bailie is
be led by Earle Bailie, J. & W.Seligman & Co.,
s Committee.
Chairman of the Association's Railroad Securitie
Banking Business under the
6. Oct. 30. 3:00 p. in. The Investment
conducted by Ralph T. Crane.
Securities Act of 1933. The forum will be
Introduction of the discussion
Brown Brothers Harriman St Co., New York.
the Association's Committee
will be by Paul V. Keyser, Washington,
Dean of the law firm of Sullivan
Counsel, who will be followed by Arthur H.
members of the Association, who
& Cromwell. New York. and by various
ons under the new law.
will give their experiences with and observati
Bankers Association of America
7. Oct. 31. 10:30 a. m The Investment
to Its Members? Trowbridge
—Can It Be of Greater Practical Benefit
lead this discussion. Mr.
Callaway. Callaway, Fish & Co., New York will
1929-30. His discussion of
Callaway was President of the Association in
Foundation at Northwestern
investment banking ethics, before the Vawter
investment banking doctrine
University in 1929, when he announced the
has been widely quoted.
of "caveat vendor," let the seller beware,
Banking Business.
8. Oct. 31, 11:30 a. m. Trends in the Investment
Paine, Webber tic Co., Boston.
The forum will be led by Albert P. Everts,
s. Mr. Everts is also
Governor
a member of the Association's Board of
"Trends of the Business."
Chairman of the Association's Committee on
Dunstan,
Municipal Bonds. E. Fleetwood
9. Oct. 31. 2:30 p. m.
discussion. Mr. Dunstan is
Bankers Trust Co., New York, will lead this
Committee, which has
s
Chairman of the Association's Municipal Securitie
g and curing municipal defaults.
contributed notably in its work in preventin
Utilities Under Present Day Conditions.
10. Nov. 1, 10:15 a. in. Public
W.Clark & Co.,Philadelphia,
This forum will be led by Sydney P.Clark,E.
s and of its Committee
a member of the Association's Board of Governor
the Committee on InvestPublic Service Securities, and Chairman of
on
ment Companies.

Bankers AssoCentral States Group of Investment
to Century
ciation Suggests Pre-Convention Visit
Progress Exposition at Chicago.
of
Bankers AssoIn its September Bulletin the Investment
ciation of America printed the following:

of Progress, which has unBecause of the great interest in the Century national significance. the
a of
folded an amazing and colorful panoram
addressed a letter to eastern
Central States Group of the Association has
informal pre convention visit to
members of the Association suggesting an
following which they may travel
Chicago during the week of October 23,
the Association at Hot
from Chicago to the annual convention of
direct
Springs, Va., from October 28 to November 1.
the suggested trip offers a
Inasmuch as the Fair closes on October 31.
remarkable spectacle, at
last opportunity for an inspection of this truly
convention on the return
same time permitting members to attend the
the




Sept. 30 1933

trip. As a special inducement, the special railroad rates in effect for the
convention may be applied to the complete roundtrip, so that the railroad
fare from New York. for instance, will amount to $49.40 for the circuit.
Pullman rates will of course be in addition, and based on compartment
occupancy will amount to $29.63 per person.
It has been sug ested that special parties plan to arrive in Chicago early
,
In the week of October 23. thus allowing them three or four days for sightseeing at the Exposition, prior to the departure of the Chicago special train
to the convention on Friday afternoon. Although the Central States
Group is not planning formal entertainment for visitors, the Fair is the
social center of Chicago this summer and the many clubs, restaurants and
cafes are the popular gathering places of the moment.
The office of the Association is desirous of co-operating with visitors to
any extent possible, and will provide information on hotels, transportation
and other pertinent matters. It should be emphasized that hotel reservations must be made as promptly as possible, for the Fair is brincIng great
crowds to Chicago and the loop hotels are well filled at all times. No
difficulty Is anticipated, however, in making a suitable reservations several
weeks in advance.

40th Annual Meeting of Savings Banks Association of
New York State to Be Held in New York City,
October 16 and 17.
The 40th annual meeting of the Savings Banks Association
of New York State, with the Association entering the 40th
year of its existence, will be held this year at the WaldorfAstoria Hotel, New York City, Oct. 16 and 17. It was
said that plans are now under way and announcements regarding the meeting will be made shortly.
Problem of Constructive Operation of Long-Term
Credit Foremost World Problem, According to
President Gordon of Investment Bankers' Association of America.
In our issue of Sept. 23 (page 2215), we published an
item under the above head, but by some mishap throughout
the item the speaker was made to appear as Frank M.
Pope, instead of Frank M. Gordon.
Annual Meeting of New York Group of Investment
Bankers' Association of America—Officers Elected.
Pierpont V. Davis, Vice-President of the City Company
of New York, Inc., was elected chairman of the New York
Group of the Investment Bankers' Association of America
at the annual meeting and election of officers of the group
held on Sept. 26 at the Bankers' Club in New York City.
Mr. Davis, who was Vice-Chairman of the group, succeeds
Robert E. Christie Jr., of Dillon, Read & Co., the group's
head officer for the last two years, who has been nominated
President of the Association. Lewis L. Strauss, a partner
of Kuhn,Loeb & Co., and a member of the group's Executive
Committee, was elected Vice-chairman. The announcement issued by the group said:
In its choice for Secretary-Treasurer, the group again unanimously
elected Frank L. Scheffey, a partner of Callaway. Fish & Co., for the 12th
asurer of the New
consecutive year. Mr. Scheffey has been Secretary-Tre
in 1921, at which
York group since the local organization was founded
led the
time the growing importance of the investment banking business
States and Canada for
Association to develop its 17 groups in the United
. Mr. Davis and
the handling of local investment banking problems
on
Mr. Scheffey are members of the Board of Governors of the Associati
ion
and hold Important committee positions in the national organizat
of the New York
For the last three years Mr. Scheffey has been Chairman
given imgroup's Education Committee, which during that time has
University
portant educational courses in co-operation with New York
and the City College.

Officers of the group are members of the Executive Committee, other members of which were chosen at this week's
meeting as follows:
Francis T. Ward, J. P. Morgan & Co.
Reginald G. CoImbe, Edward B. Smith & Co.
E. Fleetwood Dunstan, Bankers Trust Co.
Nevi] Ford, First of Boston Corp.
Hearn W. Streat, Bancamerica-Blalr Corp.
George S. Stevenson. Stevenson, Gregory & Co., Hartford,

The New York group comprises members of the Investment Bankers' Association in New York, Connecticut and
New Jersey, and is the Association's largest group in number
of members. Among the Committees to be named by the
group's new administration are Committees on Business
Conduct, Membership, Education and Municipal Securities.
ITEMS ABOUT BANKS, TRUST COMPANIES, &c.
ship
The transfer of a New York Stock Exchange member
the
was arranged Sept. 28, at $150,000, unchanged from
tion on Sept. 21. The following memberprevious transac
Howard S.
ships were posted for transfer on the same day:
James A. Bogle and Leonard J. Marquis to Ellett
Filston to
G. Scarritt, both at $150,000.
on the
The two memberships held by Edward A. Crawford
auctioned off Sept. 27, at
Commodity Exchange, Inc. were
purchasers were
$5,000 and $5,075, respectively. The
William G. Daub, both for others.
Floyd Y. Keeler and

Volume 137

Financial Chronicle

Immediately after the auction the second membership held
by Clarence Lovatt was sold to Jack R. Aron for another
at 85,000.
A Boston Stock Exchange membership was sold Sept. 29,
at $10,500, an increase of $500 over the last previous sale.
A membership on the Chicago Board of Trade was sold
Sept. 27, for $10,000, off $100 from the last previous sale.
At a meeting of the Board of Directors of Sterling National
Bank & Trust Co. on Sept. 28, Arthur L. Barnes was elected
Vice-President, and will make his headquarters at the main
office at 42nd Street and Lexington Avenue. Mr. Barnes
has been connected with the Manufacturers Trust Co. and
merged institutions for the past 19 years and until recently,
as Vice-President, was in charge of the branch at 4th Avenue
and 27th Street. Prior to that he was in charge of the
Chatham Phenix branch in the Lincoln Building in the
Grand Central Zone.
The Bank of Manhattan C- o. of New York City opened
on Sept. 26 a new building and office at Madison Ave.and
64th St. The building, which is a departurefrom the ordinary
type of commercial bank building, is of the early colonial
design. The facade copies that of a colonial residence, the
old Morris House in Philadelphia, an example of postcolonial architecture of the period around 1799 when The
Manhatan Co. received its charter. The officers' platform
is a reproduction of the drawing-room in the eighteenth
century house of John Emlay at Allentown, N. J. It
has a fireplace and fine ornamental cornices. Leading
from the main floor is an elliptical staircase, copied from
an old Philadelphia mansion. The decorations in form,
material and color make a harmonious design in the spirit
of early American architecture. Originals of the various
parts of the bank may be found in the American Museum of
the City of New York.
Authority was granted to th- e Chase National Bank, New
York, on Sept. 18 by the Comptroller of the Currency, to
open a branch office at the corner of Rockefeller Plaza and
49th Street. A previous reference to the branch was given
in our issue of Aug. 19, p. 1359.
Henry E. Cooper, Conservator of The Harriman National
Bank and Trust Co. announces that, in order to reduce
operating expenses, he has moved to quarters at 100 Park
Row, New York, where all communications should be
addressed and where all business will be transacted.
The First National Bank of Pittsfield, Pittsfield, Me., with
capital of $100,000, was chartered by the Comptroller of the
Currency on Sept. 19. The new bank, which replaces The
Pittsfield National Bank, is capitalized at $100,000, made up
of $50,000 preferred and $50,000 common stock. A. P. Bigelow is President and Geo. A. Moore, Cashier.
On Sept. 22, the Comptroller of the Currency granted a
charter to the Webster National Bank of Webster, Mass., an
institution which succeeds The Webster National Bank.
The new bank is capitalized at $100,000. Joseph N. Roy is
President and Arthur R. Terrien, Cashier.
Thomas Wilcox Stephens, President of the Bank of Montclair, Montclair, N. J., and a former director of the Federal
Reserve Bank of New York, died of heart disease at a private
hospital in Boston on Sept. 26. Mr. Stephens, who was 67
years old, was stricken while returning from Yarmouth, Me.,
to his Montclair home. The deceased banker began his banking career in Omaha, Neb., where he was born. He moved
to Montclair in 1885 and four years later with others founded
the Bank of Montclair, becoming its first Cashier. He became Vice-President in 1906 and President in 1912, the office
he held at his death. In 1898 Mr. Stephens was co-founder
of the private banking firm of Wilson & Stephens, which
later became T. W. Stephens & Co., with offices at 2 Wall
Street, New York. He served as President of the organization until 1914, when it was dissolved. In addition to his
banking interests, Mr. Stephens in 1903 was elected President of the photographic firm of Anthony & Scobill, which
two years later became the Ansco Film Co. of Binghanipton,
N. Y. He retired from the company as Chairman of the
Board in 1925. On Jan. 1 1930, Mr. Stephens was made a
director of the Federal Reserve Bank of New York and
served until Dec. 31 1932. Among other interests at the time




2405

of his death Mr. Stevens was President of the Watchung
Title & Mortgage Guaranty Co. of Montclair, a trustee of
the Montclair Savings Bank. a director of the Montclair
Building & Loan Association.
On Monday of this week Homer J. Van Duyne became
Manager of the new business department of the Union
National Bank of Newark, N. J. Mr. Van Duyne, according to the Newark "News" of Sept. 23, has had 16 years
of banking experience. In 1921 he became Deputy Director
of the Newark Department of Revenue and Finance, which
position he held for four years. The last eight years he has
been Receiver of Taxes for Newark.
The Corn Exchange National Bank & Trust Co. of Philadelphia, Pa., one of the leading banks of that city, celebrated its 75th anniversary on Sept. 23. The Philadelphia
"Ledger" of that date said:
Founded on Sept. 23 1858, the Corn Exchange began business with capital
of $130,000 and deposits of $250,000. The last official statement of the
bank, as of June 30 1933, showed capital of $4,550,000, surplus and undivided profits of $9,680,932, deposits of $65,634,148, and total resources of
$84,488,733.
The institution was started on what proved to be an active career near
the close of the panic of 1857-58. In the latter year it had a President, a
Cashier and five clerks. To-day it has 26 officers and 400 employees.
At the outset the Corn Exchange was a purely local bank. At present
its activities are world-wide.

A third 10% dividend, totaling $150,000, was to be distributed on Sept. 18 to depositors of the Tarentum Savings &
Trust Co. of Tarentum, Pa., according to the Pittsburgh
"Post-Gazette" of Sept. 18. The institution closed nearly
two years ago.
A payment of 7%% was to be made to the depositors of
the Miners' Bank of McAdoo, Pa., on Sept. 28, according to
an announcement by the Pennsylvania Banking Department.
In reporting the matter, the Philadelphia "Ledger" of
Sept. 23 furthermore said:
The payment will amount to $16,903, and will be made to 1,441 accounts.
It will mark a total of 50% in payments made to depositors of the institution, which closed its doors Jan. 4 1932.

J. S. Odland, receiver of the First National Bank & Trust
Co. of Monessen, Pa., on Sept. 21 announced a second dividend of 7%%,amounting to $180,283.31, according to advices
from that place appearing in the Pittsburgh "Post-Gazette."
A charter was granted on Sept. 22 by the Comptroller of
the Currency to the United States National Bank of Johnstown, Pa. The institution, which succeeds The United States
National Bank of that city, is capitalized at $800,000. John
W.Walters heads the new bank with F. C. Martin as Cashier.
We learn from the Baltimore "Sun" of Sept. 24 that James
Bruce has resigned as President and director of the Baltimore Trust Co. of Baltimore, Md., now in course of liquidation, and also as a director of its successor, the Baltimore
National Bank. Mr. Bruce took this action in order to
qualify for his new position as financial adviser to the Board
of Directors of the Home Owners' Loan Corporation, the
paper mentioned said.
The Comptroller of the Currency on Sept. 18 granted a
charter to The Garrett National Bank in Oakland, Oakland, Md. The new bank, which is capitalized at $50,000,
succeeds The Garrett National Bank of Oakland. Charles
W. Ream and H. O. Riggs are President and Cashier, respectively, of the new bank.
On Sept. 16 the Comptroller of the Currency issued a
charter to the Citizens' National Bank of Hampton, Va. The
new institution, which succeeds The First National Bank
of Hampton, is capitalized at $400,000, consisting of $200,000
preferred stock and $200,000 common stock. Joseph B.
Healy is President of the institution.
J. F. Brown, President of the Citizens' National Bank of
Brazil, Ind., was arrested on Sept. 18 for alleged violation
of the National Bank Act. In reporting the matter, the
Indianapolis "News" of Sept. 19, continuing, said:
P The Federal Grand Jury indictment charged that Brown extracted

r.

$10.200 worth of Vanderbur County road bonds that belonged to the
bank and transferred them to another official of the bank. whom Federal
authorities are seeking. The transfer, according to the charge, was made
In January, 60 days before the bank was placed in the hands of W. S.
Henderson, the cotservator.
Browns bond was_fixed at $3,000.

2406

Financial Chronicle

Proposed consolidation of two Huntington, Ind., banks, the
First State Bank and Citizens' State Bank, is indicated in
the following dispatch from that place on Sept. 19 to the
Indianapolis "News":
will form
The coming merger of the First State and Citizens' State Banks
an institution of exceptional strength, it is asserted.
and
The decision to combine resources, join the Federal Reserve System,
obtain the Federal Guaranty of Bank Deposits was announced late yesterday
(Sept. 18).
• The State Banking Commission and directors of the Federal Reserve Bank
at Chicago have given their approval.

Effective Aug. 19 1933, The First National Bank of Williston, Williston, N. D., with capital of $75,000, was placed in
voluntary liquidation. The institution was succeeded by The
First International Bank of the same place.
Lincoln, Neb., advices by the Associated Press on Sept. 15
stated that the following dividends were paid on that day
by the Nebraska State Banking Department to depositors in
the following two failed State banks:
South Omaha State Bank, a 5% dividend of $39,056, bringing the total
return to 45%, or $351,506.
Norfolk Savings Bank, a 5% dividend of $7,729, bringing the total return
to 20%, or $30,918.

As of Sept. 15 last, the First National Bank of Frederick,
Okla., went into voluntary liquidation. The institution,
which was capitalized at $100,000, was succeeded by the First
National Bank in Frederick.
On Sept. 16, The First National Bank of Black Rock, Ark.,
changed its title to The First National Bank of Lawrence
County at Walnut Ridge, and its location from Black Rock
• to Walnut Ridge, Ark.
Concerning the affairs of the defunct Vandeventer National
Bank of St. Louis, Mo., the St. Louis "Globe-Democrat"
of Sept. 23 carried the following:
Depositors of the Vandeventer National Bank will be paid their third
liquidating dividend, increasing the total paid to 68% of the deposits,
as soon as the checks can be prepared in Washington. D. C., it was announced yesterday (Sept. 22), by Joseph F. Holland, receiver.
When the bank closed in January 1932, there was $1.001,769 on deposit.
The first disbursement was made in July 1932, when $238.862. or 25%.
-was paid out. The second payment was made the following October
6330.000, or 34%, being disbursed. The third dividend, amounting to
$90,143, or 9%, is soon to be paid, bringing the aggregate to $681.163,
or 68%.
Holland stated a substantial portion of the 6250.000 due from stockholders under the double liability provision, of its charter has been collected. Suits against some stockholders are pending.

Sept. 30 1933

with Seadepositors, with the additional aid and service which can come
board's greater capital and increased facilities, Mr. Fawcett said.

in
Depositors In the Bank of Willows, at Willows, Calif.,
which closed in January of the present year, recently received a dividend, according to the following dispatch from
that place on Sept. 15, printed in the San Francisco
"Chronicle":

Willows
Checks for approximately 1,900 depositors of the defunct Bank of
yesterday.
were mailed to-day (Sept. 15) as a result of a dividend declared
receive
Depositors in the commercial department will, under the dividend,
15%.
. 20% of their claims, while those in the savings department will receive
The dividends in the two departments total $194,913.32. Carl Wagner,
special deputy in charge of the liquidation of the institution to-day stated
that with favorable conditions another dividend would be declared within
a six months' period.

Senator J. M. Wilson has been appointed President of the
Banque Canadienne Nationale (head office Montreal) to succeed the late Hon. F. L. Beique. Beaudry Leman, General
Manager and a director, has been named Vice-President.
Sir Alexander Kemp Wright, General Manager of the
Royal Bank of Scotland, Edinburgh, and an outstanding figure in the Scottish financial field, died suddenly in Edinburgh on Sept. 21. Sir Alexander, who was knighted in 1926,
was born in 1859, the son of Andrew Wright of Methven,
Perthshire, where he received his early education. Later he
attended Edinburgh University. From 1898 to 1907 he was
Honorary Secretary of the Edinburgh Chamber of Commerce
and Manufactures, and in 1919-20 Chairman of the same
body. He served as President of the Institute of Bankers in
Scotland from 1921 to 1924, and was also Chairman of the
Scottish Savings Committee. Among his many other activities were directorships in the P. & 0. Banking Corp., Ltd.;
Scottish Equitable Life Assurance Society, and William
Deacon's Bank, Ltd.
He wrote several articles on banking and other financial
subjects, and made many addresses in connection with the
national savings movement.
THE WEEK ON THE NEW YORK STOCK EXCHANGE.
Price fluctuations on the New York stock market have
been irregular the present week, but for most of the time
strongly in the downward direction. Considerable weak-

ness was apparent from time to time and there were frequent
periods of liquidation that pulled prices down. Call money
3
renewed at % of 1% on Monday and remained unchanged
at that rate throughout the week.
The stock market continued to extend its gains during
The Citizens' National Bank in Gastonia, Gastonia, N. C.,
-which replaces The Citizens' National Bank of Gastonia, was the abbreviated session on Saturday. The tone of the
chartered by the Comptroller of the Currency on Sept. 21. market was strong and most of the advances were held
The new institution has a capital of $200,000, consisting of until the close. Air Reduction attracted a lot of speculative
$100,000 preferred and $100,000 common stock. A. G. Myers attention and worked into a new top, and stocks like National Lead, International Business Machine and Allied
heads the new bank, while Allen H. Sims is Cashier.
Chemical & Dye were sharply up. Metal issues were active
A charter was issued on Sept. 20 by the Comptroller of and strong and the so-called wet stocks like National Disthe Currency to the First National Bank of Temple at tillers, United States Industrial Alcohol and American
Temple, Tex. The new bank succeeds The First National Commercial Alcohol were from 1 to 2 or more points higher.
'Bank in Temple and is capitalized at $200.003 of which half The oil stocks were represented on the upside by Standard
Is preferred and half common stock. Z. A. Booth is Presi- Oil of Kansas which broke through to new high ground.
Toward the end of the session, realizing became apparent and
dent of the institution and H. C. Surghnor, Cashier.
part of the early gains were erased. The principal advances
The 2,600 depositors of the defunct Marine Bank of of the day were Air Reduction, 23% points to 1063%; American
Santa Monica, Calif., received checks in the mails, amounting Car & Foundry pref., 25,4 points to 433%; American Loco2
to $45,000 Sept. 20 from Bruce McBirney, Special Deputy motive pref., 5 points to 55; Atchison, 3 points to 613/;
of the California State Banking Department. The checks Brooklyn Manhattan Transit, 2% points to 313%; Celanese,
represented 5% of the principal of all claims allowed. A 23% points to 47%; Du Pont, 4 points to 114; Gulf States
dispatch from Santa Monica, appearing in the Los Angeles Steel, 25 points to 25; International Harvester, 2 points to
%
'Times," reporting the above, added:
40; National Lead, 33% points to 130; Norfolk & Western
It was the third dividend paid since December 1931. and brings the
33% points to 1563%; Owens Illinois Glass, 23/ points to
total returned creditors to 37%.
783%; Remington Rand pref., 3 points to 29, and Western
.
2
the outstanding stock of the Hollywood Union Telegraph, 1 point to 613/
Substantially all of
The market lost part of its Saturday gains as prices fell
National Bank of Los Angeles, Hollywood, Calif., has been
the early trading on Monday. As the day proacquired by the Seaboard National Securities Corp., which off during
Seaboard gressed, a sharp rally in the grain market stiffened prices
also owns, with affiliated interests, control of the
the trend again turned upward
National Bank of Los Angeles, according to the Los Angeles all along the line and as
some of the early losses were made up. The day's turnover
continuing, said:
Times" of Sept. 19, which,
amounted to 1,308,810 shares as compared with Friday's
Consummation of the deal was announced yesterday (Sept. 18) jointly by
transactions, which totaled 3,315,000 shares. The losses
K. L. Carver, President of Seaboard Natioral Securities Corp. and W. R.
Fawcett, President of the Hollywood National Bank.
included American Smelting, 23% points to 4534; Atchison,
In its statement of June 30 last, the Hollywood National Bank revealed
23/2 points to 59; Auburn Auto, 2 points to 993%; Celanese,
an increase of more than 30% in deposits over the previous quarterly report,
23% points to 383%; Cerro de Pasco, 23% points to 363%;
with resources in excess of $1,000,000.
Mr. Fawcett said that the officers of his bank were convinced that the
Freeport Texas, 2% points to 43; Homestake Mining, 20
step was sound and that definite advantage should accrue to the banks and
points to 340; Illinois Central (4), 4 points to 453%; Ingersoll
customers alike through the joining of hands with the Seaboard National.
Rand, 33/2 points to 533%; Johns-Manville, 2% points to 50;
The Hollywood bank will continue with its present personnel to serve its




Volume 137

Financial Chronicle

National Distillers, 3% points to 553 ; J. C. Penney, 3
4
points to 103; Peoples Gas, 23/2 points to 48; Safeway Stores,
33/2 points to 85; Union Bag & Paper, 33j points to 433/2;
Union Pacific, 134 points to 115; United States Industrial
Alcohol, 23 points to 66%; West Penn Electric A, 73%
%
points to 403/2; Western Union Telegraph, 23i points to
5934; Westinghouse, 234 points to 373/2; Worthington
Pump, 2 points to 24; Pullman Co., 2 points to 47, and
Allegheny Steel, 234 points to 18.
Stocks moved irregularly lower on Tuesday, the downward
reaction in wheat bringing renewed selling all along the line.
There was some buying in the railroad shares and rail equipment issues during the first hour due to the overnight report
from Washington that President Roosevelt had won the cooperation of steel interests in the Administration's plan to
stimulate steel operations by substantial purchases of Government
-financed rails and rail equipment. The gains, however, were mostly replaced by moderate losses before the
close. Amer. Tel. & Tel. and some of the recent inflation
favorites, particularly the metal shares, were weak. The
volume of sales was small, the total barely reaching 1,433,010
shares. The bulk of the day's changes were on the side
of the decline, the recessions including such prominent stocks
as Amerada 13/2 points to 42, American Can (4) 1 point to 90,
American & Foreign Power (7) pref. 234 points to 203/2,
Amer. Tel. & Tel. 23 points to 1225 , Associated Oil 434
4
%
points to 32, Auburn Auto 234 points to 473 , Brooklyn
4
Manhattan Transit 23 points to 3334, J. I. Case Co. 13
4
4
points to 6834, Commonwealth & Southern pref. 3 points
to 37, Du Pont 3 points to 111, Eastman Kodak 294 points to
82, Endicott-Johnson 434 points to 52, Hercules Powder 234
points to 44, Homestake Mining 5 points to 335, International Silver 2 points to 38, McKeesport Tin Plate (4) 434
points to 81, Norfolk & Western 3 points to 14994, Peoples
Gas 834 points to 343 Sterling Products 2 points to 55,
/
2,
United Gas Improvement pref. (5) 4 points to 86 and Standard Gas & Electric pref. (7) 23 points to 353/s.
4
Prices continued their downward course on Wednesday,
thus practically making a continuous decline since the
week started. Leading issues were down anywhere from
1 to 5 points and the total dealings were approximately
2,320,236 shares. Liquidation was in evidence throughout
the day and many of the speculative favorites dropped to new
lows for the current movement. American Tel. & Tel. was a
weak spot and railroad shares, as a group, were close to the
June lows. The recessions for the day included among
others, Air Reduction, 23 points to 10634; Alaska Juneau,
4
234 points to 233/8; Allied Chemical & Dye, 2 points to 134;
American Beet Sugar pref., 23/2 points to 60; Amerada, 4
points to 38; American Commercial Alcohol, 33/s points to
553'8; American Smelting (2) Pref., 334 points to 60; American
Woolen pref., 434 points to 47; Armour Illinois pref., 33
4
points to 513 ; Atchison, 43/2 points to 55; Brooklyn Man%
hattan Transit, 334 points to 30; Cerro de Pasco, 334 points
to 333 8; Colorado Southern, 3 points to 24; Delaware & Hud/
son, 4 points to 60; Eastman Kodak, 4 points to 79; Federal
Mining & Smelting,5 points to 85; Freeport Texas, 10 points
to 140; General Cable, 6 points to 20; National Steel,
33/2
points to 38; New York Central,3 points to 57; Peoples Drug,
434 points to 60; Pittsburgh Steel, 5 points to 56; Seaboard
%
Oil, 35 points to 373 ; Union Bag & Paper, 4 points to 38;
4
Union Pacific, 33/2 points to 1103/2; United States Rubber
pref., 5 points to 25; Western Union Telegraph, 332 points to
553/2; and Worthington Pump pref. A,5 points to 373/2.
The downward drift of the stock market turned into a
moderate rally on Thursday, and while the upturn was
gradual, a few of the outstanding market leaders registered
gains ranging up to 2 or more points as trading closed, but
most of the advances were restricted to about one point
and the market did not, at any time, show an especially
buoyant tone. Among the advances were such stocks as
Allied Chemical & Dye, 234 points to 13634; American Can,
1% points to 883 ; American Smelting, 25 points to 42%;
4
%
5
American Woolen pref., 334 points to 5034; Brooklyn Manhattan Transit, 2 points to 32; Celanese, 43/2 points to 423/;
3
Homestake Mining, 29 points to 340; Industrial Rayon, 33
4
points to 693/2; National Distilleries, 33/2 points to 9734;
Peoples Gas, 234 points to 3234; Union Bag & Paper, 2
points to 40; Vulcan Detinning Co., 2 points to 50; United
States Steel, 134 points to 4734; Public Service of N. J.
(2.80), 1 point to 353/2, and Cerro de Pasco, 15 points to
%
34%.
Price movements were generally unsettled on Friday, the
weakness in Amer. Tel. & Tel. being due to persistent selling




2407

extending to all parts of the list as the day advanced. At
one period during the morning trading, the specialties group
showed substantial gains, especially United States Smelting
& Refining, Celanese and Commercial Solvents, but in the
late downward movement, a goodly part of these advances
were canceled. The changes at the close were largely
fractional, though there were a number of fairly active stocks
that ended the day with a gain of a point or more. Among
the latter were Amerada (2), 134 points to 2934; American
Sugar (2), 2 points to 63; Atlantic Coast Line, 1% points
to 35; Colorado Southern, 334 points to 23%;Federal Mining
& Smelting, 10 points to 95; Ingersoll-Rand, 2 points to 53;
International Business Machines,3 points to 13534; Laclede
Gas pref., 3 points to 45; National Distillers, 2% points to
8934; Norfolk & Western, 2 points to 14534; Union Bag &
Paper, 23/2 points to 423/2, and United States Steel, 234
points to 4538. The market was soft at the close, many
of the pivotal issues yielding to fresh selling.
TRANSACTIONS AT THE NEW YORK STOCK EXCHANGE.
DAILY. WEEKLY AND YEARLY.

Week Ended
Sept. 29 1933.

Male.
Railroad
Mocks.
Number of and Miscell. Municipal dt
Poen Ronde.
Bonds.
Shares.

Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
-,-.....

1,004,748
1,308,810
1,432.010
2,320,236
1,443,990
1,643.950

34,251,000
5,885,000
6,073,000
6,897,000
5,347,000
5,659,000

n 105 'AA

525119000

114 902

Ann

1932.

1933.

Stocks
-No.of shams _
Bonds.
Government bonds_ __ _
State & foreign bonds_ _
Railroad & mLsc bonds_

5374,000
933,000
1,301,000
1,007,000
842,000
1,645,700

56.211,000
9,401,000
10.048,000
10.446,000
8,555.500
9,846,700

VI 102700

S.54 50R.200

Jan. Ito Sept. 29.

Week Ended Sept. 29.

Sales at
New Yotk Stock
Exchange.

Total

51.586,000
2,583,000
2,674,000
2,542,000
2,366,500
2,542,000

Total
Bond
Sales.

United
States
Bonds.

1932.

1933.

9,153,744

8,695,490

545.912,738

349,694,005

$6,102,700
14,293,500
34,112,000

55,375,600
15,684,000
31,130,000

5330,345,500
576.213,000
1,632,887,900

5496,185,350
580,329,600
1,292.302,000

554,508,200 552,189,600 $2,539,446,400 82,368.816.950

DAILY TRANSACTIONS AT THE BOSTON. PHILADELPHIA AND
BALTIMORE EXCHANGES.
Philadelphia.

Boston.
Week Ended
Sept. 29 1933.
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
Total
. --

Shares. Bond Sales. Shares. Bond Sales

525
1.542
1,532
1,024
1,258
1,354

12,243
16,976
16,529
24,630
16,559
5,335

51,000

$43,500

92,272

516,000

7,235

527,500

ccri
.

101 R19

SR C00

10.373

525.400

17,005
22,564
26,786
35,219
20,439
5,013

5100
36,400
1,000
3,000

127,026
.

Baltimore.

Shares. Bond Sales.

3,000

15,000

$4,000
4,500
9,000
3,000
7,000

THE CURB EXCHANGE.
Curb market trading has been comparatively quiet this
week, and with the exception of the modest rally on Tuesday
when stocks were moderately higher all along the line, price
movements have been irregular with a general tendency
toward lower levels. Public utilities were weak on Monday,
but displayed moderate improvement as the week progressed.
Oil shares have attracted moderate speculative attention and
liquor issues have been somewhat mixed. Considerable
selling has been in evidence from time to time due in part
to the assumption that currency inflation had been put in
the discard as a monetary policy and that the Administration
intended to go ahead with its credit program. The real soft
spots were, as a rule, among the relatively inactive stocks.
On Saturday, curb prices were somewhat higher as many
active stocks in all parts of the list joined in the advance
though, on the whole, the changes were within a narrow
channel. The public utility group extended its gains of the
preceding day, the advance being under the leadership of
Electric Bond & Share which was up a point at its top price.
and Columbia Gas & Electric cony. pref. jumped about 2
points. The liquor stocks were stronger, Hiram Walker
moving up about a point followed by Distillers Ltd., Allied
Mills and Canadian Industrial Alcohol A and B. Armstrong
Cork also showed moderate improvement. Oil shares were
featured by another advance in Creole Petroleum to a new
top for the year at 1034. Standard of Kentucky, Standard
Oil of Indiana, South Penn Oil and International Petroleum
were fractionally higher. Humble Oil, on the other hand
was inclined to ease off. The active issues in the industrial
group included Aluminum Co. of America, General Tire,
Cord Corp., Tubise Chatillion and Great Atlantic &
Pacific Tea Co.
Lower prices all along the line and irregular price movements characterized the trading on the curb market on
Monday, and while the dealings were limited, the list of
active stocks was larger than on most recent trading periods.

2408

Financial Chronicle

The public utility group lost most of the gains registered in
the preceding rally, and in several instances, stocks broke to
new lows for the movement. Among the latter were such
prominent issues as Electric Bond Sr Share, American Gas
& Electric and Columbia Gas & Electric pref. Oil shares
were somewhat easier with the possible exception of Gulf Oil
of Pennsylvania which closed fractionally higher. Humble
Oil, Standard Oil of Indiana and Standard of Kentucky lost
ground. In the industrial group, Aluminum Co. of America
dropped about 3 points on a small turnover and in the alcohol
stocks many of the active issues were hard hit, Hiram Walker, Canadian Industrial Alcohol A and B and DistillersSeagrams losing from fractions to 3 or more points.
Prices were somewhat firmer on Tuesday, and while there
were a few soft spots, they were largely among the inactive
stocks. Public utilities were mixed in their movements,
Commonwealth Edison dipping about 4 points at one time
and Pacific Lighting pref. slipping back about 6 points. On
the other hand, Pennsylvania Water & Power soared about
5 points, Northern States Power A advanced 5 points and
Electric Bond & Share and American Gas improved about a
point. Oil stocks moved around in a similar way, Humble
Oiladvancing 1%points to 86%,while Gulf Oil of Pennsylvania
showed a small loss. The so-called wet stocks continued in
demand, Hiram Walker and Distillers-Seagrams being the
outstanding features of the group. Pittsburgh Plate Glass,
General Tire, Walgreen, Great Atlantic & Pacific Tea Co.
and Pepperell Manufacturing Co. closing with substantial
gains. Most of the mining issues were in supply at small
declines, particularly New Jersey Zinc which dropped over
a point. Newmont Mining was an exception and moved
up about 13 points.
The curb market turned heavy on Wednesday as selling
flurries continued to dominate the trading. The sag was
particularly noticeable in the larger groups, though the declines, on the whole, were not especially noteworthy and the
trading was light. In the specialties group, losses predominated, Pittsburgh Plate Glass, Sherwin Williams,
Parker Rust Proof and Montgomery Ward slipping downward during most of the session. Distillers•Seagrams and
Hiram Walker yielded ground and stocks like Swift & Co.,
Pennroad Corp., Aluminum Co. of America and Cord Corp.
were off from 1 to 3 or more points. Toward the end of the
session, a brisk rally developed, and while the losses were not
entiraly cancelled, much of the early dip was made up before
the close. Mining shares failed to move back with the rest
of the list and stocks like Bunker Hill, Newmont and Lake
Shore were down from 1 to 4 or more points at the close.
Leading stocks on the curb market generally moved lower
on Thursday, and while the trading continued dull, there
were some wide declines recorded by many of the more
active stocks as the session came to an end. The alcohol
shares did not show much change at the close, though there
were a few in the group that displayed a stronger tone. In
the industrial group Aluminum Co. of America was the
weak feature during the early trading, but met support later
in the day and moved up % point before the close. General
Tire & Rubber continued under pressure and recorded a
further loss of I % points to 76, and stocks like Parker Rust
Proof and Pittsburgh & Lake Erie showed a recession of
about a point. Movements among the public utilities were
narrow and irregular, Electric Bond & Share and American
Gas & Electric making small gains, while most of the rest
of the group showed fractional losses. Aside from Humble
Oil and Gulf Oil of Pennsylvania, the fluctuations among the
oil stocks continued within a comparatively narrow channel
and mostly on the side of the decline. In the industrial
section, Jones & Laughlin Steel dipped about 5 paints which
was attributed to labor troubles, and Seeman Brothers
yielded 43 points to 353%. Newmont was the feature of the
4
mining shares and moved briskly forward about 2 points
at its top for the day.
Firmer prices were apparent among the leading stocks on
the curb market on Friday, though the changes,on the whole,
were largely fractional. The advance of ten cents a barrel
in crude oil ordered by the Texas Co. helped the oil stocks.
Creole Petroleum breaking into new high ground with an
/
advance of over a point to 107s. Gulf Oil of Pennsylvania
gained over 3 points, Humble Oil about 2 points and Standard Oil of Indiana advanced over a point at its top for the
day. Alcohol issues were generally higher, the strong
stocks including Hiram Walker and Canadian Industrial
Alcohol shares. Public utilities were mixed and most of
the changes were fractional. Mining shares were repro-




Sept. 30 1933

sented on the upside by Lake Shore Mining which, at one
time, was up about 3 points. Most of the gains were
made during the early trading, and as the day progressed
a part of the morning advances were erased.
The changes for the week were largely on the side of the
decline, the recessions including among other prominent
stocks, Aluminum Co. of America, 71 to 65; American Gas &
Electric, 253. to 233%; American Superpower, 33% to 33%;
Atlas Corp., 123% to 12; Commonwealth Edison, 473% to
403%; Cord Corp.,93% to 83%; Duke Power,45 to 40; Electric
Bond & Share, 183% to 173%; Ford of Canada A, 13 to 12;
Gulf Oil of Pennsylvania, 533 to'53; Hudson Bay Mining,
4
103% to 10; Humble Oil, 863% to 813%; New Jersey Zinc,
64% to 603%; New York Tel. pref., 1143% to 113; Niagara
Hudson Power, 73% to 7; Parker Rust Proof, 59 to 573%;
Pennsylvania Water & Power Co., 50 to 473%; Standard
Oil of Indiana, 31 to 293%; Swift & Co., 173% to 165 ;United
%
5
Founders, 13% to IN; United Shoe Machinery, 543% to 53%,
and Utility Power, 13 to 13.4.
%
A complete record of Curb Exchange transactions for the
week will be-found on page 2440.
DAILY TRANSACTIONS AT THE NEW YORK CURB EXCHANGE.

Week Ended
Sept. 29 1933.

Stocks
(Number
of
Shares).

Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
Total

Bonds (Par Value).
Foreign
Foreign
Domestic. Government. Corporate.

153.835 $1.705.000
181.635 2.029.000
192,105 2.380.600
258,474 2,203,000
213,895 2.099.000
245,280 2,209,000

$96,000
84,000
104.000
54,000
63,000
122,000

1.245,224 $12,625,000

$523.000

Week Ended Sept. 29.

Sales at
New York Curb
Exchange.

Total.

$88,000 $1,889,000
173.000 2,286,000
141,000 2.625.000
154,000 2,411,000
75,000 2,237.000
81,000 2,412.000
$712,000$13.860000
Jan. 1 to Sept. 29.

1933.

1932.

945,937
1,245,224
Stocks-No. of shares_
Bonds.
Domestic
$12,625,000 $18,787,060
889.000
Foreign government_
523.000
805,000
Foreign corporate
712,000

83,320,326

45,498,477

$685,378,000
32,087.000
31.381,000

$654,515,100
24.674.000
48.638,000

$13,860.000 $20.481,000

$748,846,000

$727,827,100

Total

1933.

1932.

COURSE OF BANK CLEARINGS.
Bank clearings this week will show a decrease as compared with a year ago. Preliminary figures compiled by us,
based upon telegraphic advices from the chief cities of the
country, indicate that for the week ended to-day (Saturday,
Sept. 30) bank exchanges for all the cities of the United
States from which it is possible to obtain weekly returns
will be 3.2% below those for the corresponding week last
year. Our preliminary total stands at $4,447,503,846,
against $4,595,747,757 for the same week in 1932. At this
center there is a gain for the five days ended Friday of 3.2%.
Our comparative summary for the week follows:
Clearings
-Returns inx Telegraph,
Week Ended Sept. 30.

1933.

1932.

Per
Cent.

New York
Chicago
Philadelphia
Boston
Kansas City
St. Louis
San Francisco
Loa Angeles
Pittsburgh
Detroit
Cleveland
Baltimore
New Orleans

$2,283,689,476 $2,259,452,567
160.252,811
147,708,570
190,000.000
215,000,000
159,000.000
142,000,000
47,656,566
44,781.201
46,500,000
45,800.000
80.286,000
69,673,000
No longer will report clearings.
69,933,372
62,134,528
46,948,443
45,956,802
44,539,275
44,405.829
32,776.649
40,893.569
18,742,000
23,907.847

Twelve cities, 5 days
Other cities, 5 days

$3,180,324,592
402,595,280

$3,141,713,913
378,065.874

+1.2
+6.5

Total all cities. 5 days
All cities, 1 day

$3,622,910,872
824,583,974

$3,519,779,787
1,075,967.970

+2.9
-23.4

‘4,447.50.(49

(4.5 15.747.757
,

-3.2

Total all cities for week

+ 1.1
+8.5
-11.6
+12.0
+6.4
+1.5
+15.2
+12.6
+2.2
+0.3
-19.8
-21.6

Complete and exact details for the week covered by the
foregoing will appear in our issue of next week. We cannot
furnish them to-day, inasmuch as the week ends to-day
(Saturday) and the Saturday figures will not be available
until noon to-day. Accordingly, in the above the last day
of the week has to be in all cases estimated.
In the elaborate detailed statement, however, which we
present further below we are able to give final and complete
results for the week previous, the week ended Sept. 23. For
that week there is an increase of 10.3%, the aggregate of
clearings for the whole country being $4,863,647,503, against
$4,410,776,748 in the same week in 1932. Outside of this
city there is an increase of 4.3%, the bank clearings at this
center having recorded a gain of 13.8%. We group the
cities according to the Federal Reserve districts in which
they are located and from this it appears that in the New

Volume 137

Financial Chronicle

York Reserve District, including this city, the totals record
a gain of 13.7% and in the Boston Reserve District of 14.7%,
but in the Philadelphia Reserve District there is a loss of
7.3%. The Cleveland Reserve District records an increase of
3.2% and the Atlanta Reserve' District of 14.9%, but in the
Richmond Reserve District the total shows a decrease of
14.3%. In the Chicago Reserve District the totals are
larger by 9.3%, in the St. Louis Reserve District by 8.4%,
and in the Minneapolis Reserve District by 19.3%. The
Kansas City Reserve District falls behind but only to the
trifling extent of 0.6%, while the Dallas Reserve District
enjoys a gain of 18.6%. The San Francisco Reserve District
records a decline of 2.0%.
In the following we furnish a summary of Federal Reserve
districts:
SUMMARY OF BANK CLEARINGS.

Week ended Sept. 23 1933.

1933,

Inc.or
Dec.

1932.

1931.

1930.

Federal Reserve Dias.
$
lot Boston
12 cities
221,185,352
2nd New York_.J2"
3,221,379,497
3rd Philadelphia 9 "
217,494.307
4th Cleveland
5 "
182,818,891
5th Richmond.. _ 6 "
82,082,405
6th Atlanta_ _ _10 "
.
93,986,998
7th Chicago.- _19 "
319,589,480
8th St. Louis..
4 "
97,479,128
9th Minneapolis 7 "
85,601,298
10th Ka88363 City 9 "
90,310,616
11th Dallas__ _ 5 "
46,318,632
12th San Fran. 13 "
175,397,899

$
192,913,353
2,833.274,943
267,031,600
177,081,868
95,818.161
81,792,026
292,393,657
89,912.272
71.767,633
90,832,622
39,039,242
178,909,371

%
+14.7
+13.7
-7.3
+3.2
-143
+14.9
+9.3
+8.4
+19.3
-0.6
+18.6
-2.0

$
362,889,267
5.405,036.387
410.118,964
292,613,776
141,750,946
101,721,699
519,968.862
112,870,848
85,629,735
122,480,846
50,518,832
243,953,103

$
469.896,123
6,339,466,180
443,028,609
352,658.510
158,597,567
143,636,014
791.859,180
153,316,417
117,866,554
166,497,377
63.139,913
292,068,532

Total
111 cities
Outside N. Y. City

4,863,647,503
1,727,495,053

4,410.776,748 +10.3
1,655,771,960 +4.3

7,852,553.265
2,570,321,840

9,493,031,006
3,287,605,598

323.632,805

252,678,933 +28.5

301,945,661

368,765.043

Canada

32 cities

We now add our detailed statement, showing last week's
figures for each city separately for the four years:
TVeek Ended Sept. 23.

Clearings at
1933.
First Federal
Se.
-Bangor__- Portland
.lass.-lioston _ _
Fall River_ - - Lowell
New Bedford
Springfield_ _
Worcester
3onn.- Hartford
New 1faven_ _ _
0. I.
-Providence
6.11.-Manches'r
Total (12 cities)

1932.

Inc. or
Dec.

8
$
%
Reserve Dist rict-Boston 514,945
309,376 +66.4
1,586,744
2,004,445 -20.8
194,720,953 167,353,879 +16.4
593,868
750,237 -20.8
281,641
228,339 +23.3
514,064
447,266 +14.9
2,260,517
2,392,228 -1.7
1,148,949
1,498,286 -23.3
8,801,975
7,350.556 +19.7
3,191,368
3,397,630 -6.1
7,201,300
6,748,500 +6.7
349,028
432,611 -19.3
221,185,352

192,913,353 +14.7

Second Feder al Reserve D Istrict-New
6. Y.
-Albany
8,703,097
4,497,946
Binghamton_ _
.
771,747
640,359
Buffalo
26,857,216
22,533,654
Elmira
478,806
519,454
Jamestown_ __
.
441.833
485,617
New York_ _
3.136,152,450 2,755,004,788
Rochester
5,011,482
5,657,820
Syracuse
2,917,242
2,993,519
. .-Stamford
..'onn
2,700,202
2,144,043
6. J.
-Montclair
391,900
339,364
Newark
13,470,110
16,882,928
Northern N. J_
23,478,412
21,575,451

1931.
$

1930.
$

497,640
2,852,577
324,193,386
781,717
409,493
771,784
3,746,677
2,756,081
11,057,918
6,146,795
9,223,300
451,897

595,149
4,236,284
424,088,782
764,422
402,321
807,534
3,754,736
3.178,365
14,106,673
6,759,007
10.617.800
585,050

362,889,267

York
5,711,150
5,569,421
+93.6
+20.5
889,942
1,104.769
+19.2
44,668,914
36,416,368
-7.8
782,443
748,672
-9.0
691.100
1,100.293
+13.8 5,282,231,425 6,205,425,408
7,765,240
-11.4
9,626,857
3,751,886
4,105,465
-2.5
+25.9
3,089,166
3,498,400
+15.5
365,700
603,133
25,278.402
-20.2
27,912.994
38,097,336
+8.
35,068.083

Total(12 cities) 3,221.379,497 2,833,274,943 +13.7 5,405,036.387 6,339,466,180

247,494,307

Fourth Feder al
)hio-A kron ........
Canton
Cincinnati__ _ _
Cleveland
Columbus
Mansfield
Youngstown.....
Pa.
-Pittsburgh _

267,041,600

-7.3

Reserve D istrict-Clev elandc
c
c
c
c
c
37,836,178
40,909,000 -7.5
59,498,625
58,388.543
+1.9
7,583,900
6,291,500 +20.5
1,091,510
829,930 +31.5
c
c
c
76,808,678
70,662,895 +8.7

410,118,964

1,325,477
c
931,157
1,855,227
424,000.0 0
2,677,023
4.394.048
3,088,275
1,750,402
3,007,000
443,028,609

c
c
59,927,205
90,221,742
8,948,900
1,911.334
c
131,604,595

c
c
49,075,170
118,935,019
14,142,400
2,014,444
c
168,491.477

+3.2

292,613,776

352,658,510

Fifth Federal Reserve Dist Het-Rich:1i ondtV.Va.-liuntIon
116,681
306.286 -61.9
Va.-Norfolk._....
2,361,000
1,965,401 +21.1
ItIchinohd
25,387,930
28,638,759 -11.3
3. C.-Charlestot,
937,968
752,626 +24.6
Md.-Baltimore.
41,927,076
48,22 .587 -13.1
13.C.-Washing'u
11,331,750
15,937,500 -28.9

550,407
2,773,667
35,641,620
1,416.871
80,034,216
21,334,165

811,295
3,376,604
42,544,000
2,224,083
88,273,959
21,367,626

95,818,161 -14.3

141,750,946

158.597.567

Sixth Federal Reserve Dist rict-Atlant aTenn.-Knoxt Ille
3,906,610
2,225,627 +75.5
Nashville
9,526,354
8,608,605 +10.7
(58.- Atlanta..
36.760.209
25,400,000 +44.7
1,041,704
Augusta
1,075,369 -3.1
Macon
735,604
467,535 +57.3
Fla.-Jack'nville_
9,824,000
6,552,387 +49.9
Ala.-birm'ham_
11.174,550
8,313,160 +34.4
1,224,034
t Mobile
852,961 +43.5
Miss.-Jaelcson
c
c
c
137,194
i Vicksburg
107,861 +27.2
-New Orleans
La.
19,656,739
28,188,521 -30.3

3,298,147
10,440,295
32.400,000
1,255,662
603,813
8,700,426
11,571,907
1,122,847
c
104,973
35,223,629

2.102,517
18,669,660
50.000,000
1,808,586
1,068,485
9,493,143
17,066,813
1,605,199
c
155,858
41,645,783

104,721,699

143,636.044

Total(5 cities).

Total(6 cities).

Total (10 cities)

182,818,891

82,082,405

93,986,998




177,081,866

81,792,026 +14.9

Week Ended Sept. 23.
Clearings at
1933.

Inc. or
Dec.

1932.

1931.

$
,
,
$
$
Seventh Feder al Reserve D istrict-C h i cago-Adrian _ _
Mich.
37,315
169,711
71,025 -47.5
Ann Arbor__
293,882
892.591
371.624 -20.9
Detroit
69,545,863
70,612,702 -1.5 136,220,824
Grand Rapids.
1,663,204
4.064,139
3,388,402 -50.9
Lansing
778,255
2,857,800 -72.8
8.902.726
Ind.
-Ft. Wan
425,370
803,479 -97.1
1,305,736
Indianapolls
9,524,000
9,260,000 +2.9
13,032,000
South Bend
448,171
1,129,879
903,778 -50.4
Terre Haute_ _ _
3,014,132
3,562,098
2,550,474 +18.2
Wis.-Milwauke
11,405,933
11,176,493 +2.1
18,588.953
Ia.-Ced. Rapid
257,491
2,490,040
650,260 -60.4
Des Moines__ _
6,334,792
4,425,819 +43.1
5,597,540
Sioux City__
2,299,367
3,380,337
2,071,546 +11.0
Waterloo
C
c
c
c
Ill.-Bloomingt'
.325,000
1,138,597
876,505 -62.9
Chicago
208,849,008 177,860,499 +17.4 313,230.988
Decatur
455,075
791,205
385,307 +18.1
Peoria
2,536,140
2,413.269
1.829,552 +38.6
Rockford
1,281,531
521,193
417,689 +24.8
Springfield_
875,289
1,880,703 -53.5
1,776,698
Total (19 citieS)

1930.
$
169,077
1,102,215
183,175,521
6.078,925
5,131,772
2.757.795
16.975.000
2,156,733
4,472.977
24.560.526
2.842.996
7,432,648
5,548,099
c
1,566,203
519,679.430
953.629
3.391.736
2,329,921
2,033,977

+9.3

519,968,862

791,859,180

Eighth Federa I Reserve Die trict-St.Lo Ws
Ind.-Evansville_
b
b
b
Mo.-St Louis__
.
64,000,000
60,000.000 +6.7
Ky.-Louisville.._
19,032,889
16,466,263 +15.6
Tenn.-Meniphis
14,101,249
12,977,297 +8.7
Ill.-Jacksonville
b
b
b
Quincy
345,000
468,712 -26.4

b
82.100,000
19,752.666
10,333,456
b
684,726

b
102,800,000
33,362,117
17,179.851
b
974,449

112,870,848

154,316,417

Ninth Federal Reserve Die tact-IR I n n ea pollsMinn.
-Duluth_ _
3,704,978
3,025,67s
3,305,571 -8.5
M inneapolis _
58,896,528
60,950,78:
47,881,673 +27.3
St. Paul
17,501,613
17.939.630
16.476,987 +6.2
N. 60.
-Fargo.... _
1,437,384'
1,837,914
1,576,268 -8.8
S. D.
-Aberdeen
488.289
704,041
561,246 -13.0
Mont.
-Billings.
332,142
436,744
275,394 +20.6
Helena
1,868,406
2,109,900
1,690,494 +10.5

7,505,260
81,303,522
22,369.437
1,908,097
952,017
663.974
3,164,247

Total(4 cities)_

Total(7 cities)_

319,589,480

97,479,126

85,604,298

292,393,657

89,912,272

+8.4

85,829,735

117.866.554

Tenth Federal Reserve Die trict
-Ka ns as CityNeb.-Fremout__
47,945
1 89,302
107,024 -55.2
Hastings
C
c
c
c
Lincoln
1,687,955
2,552,721
1,514,852 +11.4
Omaha
21.892.096
30,226,418
20,512,325 +6.7
Kan.
-Topeka _.
1,425,012
1.368,943 +4.1
2,191,921
Wichita
1,585,912
3.384.910 -53.1
4,351,474
Mo.-Kan. City.
60,157.699
60,398,868 -0.4
77,893,570
St. Joseph
2,710,373
3.125,996
2,464,210 +10.0
Col.
-Col. Spgs_
405,565
522,580 -22.4
873.807
Pueblo
398,059
1.075,637
558,910 -28 8

194,089
c
3,049,224
39.859.585
2,578,317
5,795,859
107,929,042
4.761,697
987,136
1,342,428

71,767,833 +19.3

469,896,123

Third Federal Reserve Dis Wet- Phila delphl a_
'a.
-A ltoona __ _
326,229
326,643 -0.1
679,538
Bethlehem_ _
c
c
c
c
Chester
208,412
294,958 -29.3
716,207
Lancaster
749,528
1,008,093 -25.6
2.087,708
Philadelphia_
239,000,000 257.000,000 -7.0 393,000,000
Reading
943,681
1,590,706 -40.7
2,690,398
Scranton
1,805,088
2,110,013 -14.5
3,220,173
Wilkes-Barre_
1,259,626
1,690,235 -25.5
2,730,208
York
960.743
814,952 +17.9
1,520,732
6. J.
-Trenton_.
2,241,000
2,206,000 +1.6
3,474,000
Total (9 cities)_

2409

Total (9 cities)_

90,310,616

90,832,622

-0.6

122,480,846

166,497,377

Eleventh Fede ral Reserve District
-D
Texas-Austin__ _
821,119
621,108
Dallas
35,797,820
28,907,861
Ft. Worth
4,995,704
4,836,643
Galveston
2,760,000
2,359,000
La.
-Shreveport.
1,943,989
2,314,630

alias
+32.2
+23.8
+3.3
+17.0
-16.0

1,468,658
37,504,188
6.480,407
2,316,000
2,749,579

1.529,843
44,108,573
9.371,243
3,149,000
4,981.254

39.039,242 +18.6

50,518,832

63,139,913

Total(5 cities)_

46,318,632

Twelfth Feder al Reserve D istrict
-San Franc iscoWash.
-Seattle_ _
23,294,428
21,665,256
28.739,528
+7.5
Spokane
5,170.000
5,662,000 -8.7
8,832.000
)(akin's
492.122 -0.8
488,328
821,025
Ore.
-Portland_ _
19,445,295
16,925,152 +14.9
25,325,854
Utah-S. L. City
9,853,270
8,834,311 +11.5
12.908,189
Calif.
-L.Beach
3,337,897
2,640,679 +26.4
4,869,186
Los AngelesNo longer will report clearings.
Pasadena
2.349,500
2.461,954 -4.6
4.008,239
Sacramento _ _ _
4,779,092
8,531,462 -44.0
10,881,181
San Diego_ _
No longer WI ii report clear logs.
San Francisco_ 102,216,075 107,310,275 -4.7 140,492.656
San Jose
1,703,317
2,496,786
1,575.777
+8.1
Santa Barbara_
786.539
831,792 -5.4
1,498,101
Santa Monica.
1,600,368
853.157
770,494 +10.7
Stockton
1,121,001
1,480,000
1,208.097 -7.2

35.628,714
11,055.000
1,125.633
32,055,167
16,330,216
6,520,233
4.403,667
6,391,425
170.503,771
2,824,502
1,606,584
1,859.620
1,764.000

Total(13 cities) 175,397,899 178.909,371 -2.0 243,953,103 292,068,532
Grand total (iii
4,863,647,503 4,410,776,748 +10.3 7,852,553,265 9,493,031,006
cities)
Outside N. Y._

1,727,495,053 1,655,771,960

+4.3 2,570,321,840 3,287,605,598

Week Ended Sept. 21.
Clearings at
1933.
CanadaMontreal
Toronto
Winnipeg
Vancouver
Ottawa
Quebec
Halifax
Hamilton
Calgary
St. John
Victoria
London
Edmonton
Regina
Brandon
Lethbridge
Saskatoon
Moose Jaw
Brantford
Fort William_ _ _ _
New Westminster
Medicine HatPeterborough
Sherbrooke
Kitchener
Windsor
Prince Albert......
Moncton
Kingston
Chatham
Sarnia
Sudbury

$
89.667,521
101.678,097
73,561,928
13,125,470
4,075,593
3.734.146
1.985,533
4,091,739
6,104,324
1,464,648
1,298,178
2,515.627
3,360,784
5,859.726
334,316
422,024
1,292,514
592,238
730.990
543,648
419.593
257,551
622,655
534,281
908,774
2,673,434
292,285
683,832
595.551
373,383
355.843
531,599

Total(32 cities)

324,632,805

1932.
$
71,612,700
79,514.837
45,367,738
12.054,335
4,208,678
3,564,388
1,917.998
3,944,879
5,088.893
1,428.243
1,358.791
2,5015,558
3,798,600
4,516.648
391,538
355.410
1,617,999
732,341
698,750
602,755
418,436
217,293
554,526
544,337
892,41
2,142,747
261,762
591,230
598,96
369,28
386,00
420.850

Inc. Or
Dec.

1931.

1930.

%
+25.2
+27.9
+62.1
+8.9
-3.2
+4.8
+3.5
+3.7
+20.0
+2.5
-4.5
+0 4
-11.5
+29.7
-14.6
+18.7
-20.1
-19.1
+4.6
-9.8
-0.9
+18.5
+12.3
-1.8
+1.8
+24.8
-7.4
+15.7
-0.6
+1.1
-7.8
+26.3

$
100,046,614
86.309.302
42,730.653
23,648,590
5,665,362
4,532.488
2.656.437
4,567.884
5.012.760
2,314,501
1,616.251
2.307,087
3,999,397
3,485,658
405.376
354,598
1,606,971
618.277
848.457
595,227
484.188
294,702
803.381
648,243
923.666
2,321,741
318.817
710,010
685,854
388.823
424.777
619,571

$
108,035,300
111.196.032
59,070,916
23,956.573
6,322.486
5.650.168
3,1)45,359
5.648,118
8,985.311
2,345,451
1,334,195
2,935,383
4,892,833
6,500,435
566.917
525,871
2,456.597
1,169,904
964,436
807.005
861.837
357,770
916.234
720.176
1,158,444
3,104,791
542,571
700,000
809,951
554.190
700.000
1,028.889

252,678,933 +28.5

301,945,661

368,765,043

b No clearings available. c Clearing House not functioning at present.
• Estimated.

Sept. 30 1933

Financial Chronicle

2410

-The statement of condition of the National banks under the CompCondition of National Banks June 30 1933.
troller's call of June 30 1933 has just been issued and is summarized below. For purposes of comparison, like details for
previous calls back to and including June 30 1932 are included.
ABSTRACT OF REPORTS OF CONDITION OF NATIONAL BANKS IN THE UNITED STATES ON JUNE 30, SEPT. 30 AND DEC. 31 1932,
AND JUNE 30 1933.
June 30 1933
Dec. 31 1932
June 30 1932 Sept. 30 1932
(6,150 Banks). (6,085 Banks). (6,016 Banks). (4,902 Banksa).
Assets
Loans and discounts (including red icounts)_b
Overdrafts
United States Government securiti ; owned
Other bonds, stocks, securities, &c.. owned
Customers' liability account of acce ytances
Banking house, furniture and fixtur 38
•
Other real estate owned
Reserve witn Federal Reserve Oanks
•
Cash in vault
•
Due from banks
Outside checks and other cash Items
Redemption fund and due from Uni ted States Treasurer
Acceptances of other banks and bills of exchange or drafts sold with endorsement
•
Securities borrowed
Other assets

Liabilities
•
Demand deposits
Time deposits (including postal savi ags)
•
United States deposits
•
Due to banks..c
•
Total deposits
National-bank notes outstanding..
Agreements to repurchase U. S. Go -ernment or other securities sold
Bills payaole and rediscounts
Acceptances of other banks and bills of exchange or drafts sold with endorsement
Acceptances executed for customers
A ecentsnces exe-uted by other ban s for account of reporting banks
Securities borrowed
Interest, taxes, and other expenses ccrued and unpaid
Other liabilities
Capital stock (see memorandum bel we)
•
Surplus
Undivided profits, net
Resenes for contingencies
Total

$
03,000
9,919,6
4,901,000
3,662,669,000
3.780.623.000
234,544,000
756,494,000
155,125.000
1.381,065.000
295,607.000
2,108,813.000
33,315.000
37,792.000
4,601.000
7,892,000
182.951.000

$
$
9,844,036,000 8,116,972.00.1
2,800.000
3,688,000
3,760,886,000 4,031,576,000
3,822.550,000 3,340,055,000
225.835.000
198,486.000
641,694.000
760,269,000
132.187.000
169.835.000
1,625,840,000 1,412,127,000
288.478,000
308,716.000
2,518,412,000 2,381,333,000
37.008.000
60,959,1)00
37,428.000
39.408.000
4,912,000
5.422,000
4,359,000
8,027.000
203.727.000
184.440,000

22,367,711.000 22,565.995,000 23,310,974.000 20.860.491.000

.

Total

$
10,281,676.000
4.701,000
3,352,666.000
3,843,986.000
262,943,000
760,057,000
143.585.000
1,150,575.006
338.404,000
1,956.154.000
40,728,000
32.711.000
7.182,000
7.951.000
184.392.000

7,940,653.000 7,848.753,000 8,276.715,000
7,265.640,000 7,237,933.000 7,376.563.000
252.529.000
374.150,000
213,287.000
2,041.333.000 2,221.081,000 2,612.300,000
17,460,913,000 17,681,917,000 18,518,107,000
780,069.000
743.080,000
652.168.000
22.053.000
26.595.000
39.535.000
348,596.000
443,644,000
506,890.000
5,422.000
4,601,000
7.182,000
207,368,000
239,053,0..0
279.220,000
2.747.000
2,019,000
3,098,000
8,027,000
7.892,000
7.951.0(10
46.208,000
68.934,000
49,439,000
127,985.000
104,125,000
81,467,000
1.568,983.000 1,563.232,000 1.634.484,000
1.259.425.000 1,205.939.000 1,173.278,000
269.785.000
308,384.000
302.521.000
166,845.000
d166,580.000
d148,919.000

7,894.127.000
6,216,917,000
449,661.000
2,213,410.000
16,774,115,000
730,435,000
9.223,000
117,855,000
4.912.000
229,364.000
3,374,000
4.359,000
41.617,000
88,743.000
1.515.647.t1J0
940,598.000
235,600.000
164.709.000

22,367,711,000 22.565.995,000 23,310,974.000 20,860.491,000

•
,

Memorandum:
Par val le of capital stock
Class A preferred stock (re irable at 658.596.000)
Class B preferred stock (re irable at 32,700.000)
Common stock

1,568.983.000

1,634.484.000

51,193,000
2,600.000
1,463.412.000

1,568,983,000

Total

1.563,232,000
1,563.232.000

1,634.484.000

1,517.205,000

Details of Cash in Vault1.034.000
12.753.000
12,778,000
12.372.000
uolo coin
1.245.000
21.887,000
22,755,000
26.188,000
Gold certificates
286,199,000
274,076,000
260,074.000
299,844.000
An other cash in vault
Details of Demai d Deposits
6.709,556,000 6,879.752,000 7,202.331.000 6,825.317.000
India(dual subject to check
75,490.000
95,569.000
78,521,000
100.236.000
Certificates of deposit
848,475,000
851,715,000
782,361,000
1,005.930.000
State, cour ty and municipal de posits
8,901,000
(
Deposits of other banks, trust ompanies located in United States
1.000,000
Foreign countries
•
127300,00,1 134,904,000
108,119,000
I 124,931,000
Other demand deposits
Deposits
Details of Time
240,913.000
267,135,000
250,542.000
247,980.000
State. county and municipal de posits
766.783,000
996,172.000 1.013.744.000 1,024,642,000
C ertificate of deposit
5,035,483.000 5,126.931,000 4,281,521,000
lass book
5.202.948,000
repeal ts evideced by savings
1 34.912,000
Christmas savings and similar ccounts
365.358.000 1 249,206.000
372,958.000
5 324.429.000
Open accour ts
574,713.000
542,948.000
522,039,000
450.275,000
Postal savings
46.563.000
49,250,000
40.910.000
39.093,000
Depos is of other banks and truat companies located in United States
711,000
299,000
2,257,000
4,743,000
Foreign countries
Deposits. tne payment of which has been deferred beyond the customary period by
21,595.000
agreement with depositors
Percentages of Reserve
11.30
1133'
11.60%
1l.64V
Central Reserve cities
6.94%
6.74%
6.74
6.76
Other Reserve cities
8.65 o
8.55°!
8.37
8.32V
All Reserve cities
4,69e7
4.78 Jo
4.70%
4.729'
Country banks
7.16%
6.999
6.799/,
6.72%
Total United Statss
a Licensed banks which were operating on an unrestricted basis. b Includes customers'liability under letters of credit. c Includes certified and cashiers'
checks, and cash letters of credit and travelers' checks outstanding. d Includes reserves for dividends.

Foreign Trade of New York-Monthly Statement.
Merchandise Movement at New York.
Month.

Imports.
1931.

1932.

Exports.
1931.

1932.

July
August- - _
September
October
November
December_

37,656,849
43,067.631
48.988,212
54,474,928
51,828,170
82,453,858

84.823,0
81,423,455
94,872,046
92,059,201
86,585,105
87,837.295

35,157.319 67,058,129
31.607.397 59.208,716
36,988,907 67,749,087
38,279,461 65.352,268
38,899,469 51,967,285
38,645,03e, 55.939,911

January_ _
February,
March.__
April

1933.
49,288,867
42,911.432
48,268,303
43,203,671

1932.
65,450,212
68,324,224
67,088,157
61,785,558

1933.
38,168,036
36,186,782
77.379,206
34,200,531

Customs Receipts
at
New York.
1932.

1931.

7,704,834
11,864,718
14,253,710
13,883,709
13,273.841
11,000,515

$
17,237,635
20,162,713
21,683,259
18,506.473
15,161,993
15,902,204

1932.
1933.
1932.
44.388,825 10,670,817 13,177,166
47,040,635 8,865,580 12,756,949
48.261,354 10,386,765 12,047.238
42,176,624 9,493,105 10,741,892

Total__ 470,117,921 790,248,343405,512,143549,142,834 111,397,594 157.377,523

Movement of gold and silver for ten months:
Gold Movement at New York.

Silrer-New York.

Exports.

Imports.

Exports.

1932.
$
213,623
738.216
781,306
353,207
478.3.53
872.429

$
533,848
272,409
554,106
650,348
397,704
541.384

1932.
1933.
1932.
1933.
5.750107,842,041
January_ 111,598,294 19,057,937
February _ 20.423.202 7,221.315 21.491,025 128,185,769
2.238.052 6,630.355628,052,452 43.902,866
March_ __
735,518 3,164,462 16,594,167 49,480.976
April

1933.
872,419
134,305
757,710
834,386

1933.
541,384
38,986
109,091
645

Total...258,443.554(153,635,278 707.758,899795,163,323 6.035,954

3,639,905

GOLD.
The Bank of England gold reserve against notes amounted to £100,285,361
on the 6th inst.. as compared with £190,283,342 on the previous Wednesday.
Purchases of bar gold by the Bank during the week under review amounted
to £90.769.
A sharp decline In gold prices from the high levels reached last week was
seen during the week, following a reaction in the French exchange in favor
of sterling. In the open market, supplies of gold were again on a substantial scale, but were disposed of readily, the demand from the Continent
continuing to be keen.
Quotations during the week:
Equivalent Value
of E Sterling.
Per Pine Ounce.
12s. 11 64d.
131s.
Sept. 7
12s. 11.74d.
130s. lid.
Sept. 8
13s. 1.80d.
129s. 2Hcl.
Sept. 9
13s. 2 31d.
128s. 9Hd.
Sept. 11
13s. 3.81d.
127s. 7d.
Sept. 12
13s. 1.85d.
129s. 2d.
Sept. 13
13s. 1.53d.
129s. 5.33d.
Average

1932.

$
$
$
10,926,608 23.472,951 1,000,328
32,500
25,844,79 18,058,424
35,000 28.690,327
35.034,945
35,000398,471,056
25,656,339
8,560 4,034,936
6,840,308
5,570 32,622,524
13,248,219

THE ENGLISH GOLD AND SILVER MARKETS.
We reprint the following from the weekly circular of
Samuel Montagu & Co. of London, written under date of
Sept. 13 1933:

Month.

Imports.
1931.

1932.
July
August_ _ _
September
October_
November
December_

$
2,484,659
10.268.482
16,170,722
10,759,539
811,521
82,953,565




1932.

1931.

An Exchange Telegraph message from Washington dated Sept. 6 stated
that the Treasury, under the new gold regulations, will sot a daily price for
newly mined metal eligible for export. This price will be based on the
highest quotations in free markets abroad and will be the standard for sales
by the Federal Reserve. The standard price will be the highest free
market quotation less charges for handling.
According to a Reuter telegram from Washington on Sept. 8, the U. S.
Treasury announced on that day the Federal Reserve banks "may sell
newly mined gold to the arts and crafts and foreign purchasers at $29.62
an ounce." This Is the first announcement of the daily price to be established by the Treasury.
Prices have since been announced daily, varying between $29.10 and
$29.21.

Financial Chronicle

Volume 137

The following were the United Kingdom imports and exports of gold
registered from mid-day on the 4th inst. to mid-day on the 11th inst.:
Imports.
Exports.
France
£1,363,814 France
£154.038
Netherlands
19,545 Netherlands
387,515
Iraq
14,708 Switzerland
3.771
United States of America.. 316,800 Other countries
3,510
Mexico
157,129
Venezuela
20,560
Peru
20.500
Alaska
20,719
British South Africa
1,856,155
Canada
472,885
British India
1,010,565
British Malaya
38,033
China
242,188
Salvage from SS. Egypt
37,970
Other countries
47,651
£5,639,222
£528,834
The SS. Kaisar-i-Hind which sailed from Bombay on the 9th inst. carries
gold to the value of about £819,000, of which 2773,000 is consigned to
London and +46,000 to Amsterdam.
The Transvaal gold output for August 1933 amounted to 934,714 fine
ounces as compared with 923.671 fine ounces for July 1933 and 991,322
fine ounces for August 1932.
SILVER.
The market has continued to show a very steady tone, prices showing
little change from the level maintained last week. China has again given
support and the demand was met chiefly by sales from Continental sourres.
but there have also been further re-sales by speculators. America on the
whole has been more disposed to buy than to sell, the enquiry being mostly
for near delivery.
The following were the United Kingdom imports and exports of silver
registered from mid-day on the 4th inst. to mid-day on the 11th inst.:
Imports.
Exports.
Netherlands
£31,258 France
£1,810
Germany
46,020 Germany
3,718
United States of America
64,673 Denmark
1,070
Mexico
32,400 Syria
1,480
Japan
12,149 French Possessions in India
3.500
British West Africa
11,692 Persia
5.025
British India
13.227 Malta
10.000
Australia
11,543 British India
2,580
Salvage from SS. Egypt
17,655 Other countries
2,328
Other countries
2,794
£243,411
Quotations during the week:

£31.511

IN LONDON.
IN NEW YORK.
Bar Silver per Ounce Standard.
.
.
(Cents per Ounce .999 Fine.)
Delivery.
Delivery.
Sept. 7
181-16d.
183-1
Sept. 6
37
Sept. 8
184d.
184d.
Sept. 7
374
Sept. 9
1S1-16d.
184d.
Sept. 8
3734
Sept. 11
184d.
184d.
Sept. 9
364
Sept. 12
183-163.
186-163. Sept. 11
374
Sept. 13
184d.
184d.
Sept. 12
37 11-16
Average
18 115d.
18.229d.
The highest rate of exchange on New York recorded
during the Period
from the 7th inst. to the 13th inst. was $4.593( and the lowest
S4.5134.
INDIAN CURRENCY RETURNS.
_ (In Jews of rupees.)
Sept. 7.
Aug. 31.
Aug. 22.
Notes in circulation
17,945
17.976
17.912
Silver coin and bullion in India
10.510
10,541
10,477
Gold coin and bullion in India
2,931
2.931
2,923
Securities (Indian Government)
4,504
4,504
4.512
The stocks in Shanghai on the 9th inst. consisted of about
126,800.000
ounces in sycee, 290,000.000 dollars and 6,340 silver bars, as
compared with
about 124,600.000 ounces in sycee, 290,000.000 dollars and
6,340 silver
bars on the 2d inst.

ENGLISH FINANCIAL MARKET
-PER CABLE.
The daily closing quotations for securities, &c., at London,
as reported by cable, have been as follows the past week:
Sat.,
Mon.,
Sept. 23. Sept. 25.
Silver, per on
18)4d.
18 7-16d.
Gold, p.fine oz 1338.534d. 132a.9d.
Consols, 28% Holiday.
7354
British 3Si%W. L
Holiday.
10034
British 4%1960-90
Holiday.
11154
French Rentes
fin Paris)3% fr. Holiday.
67.30
French War L'n
fin Paris) 5%
1920 amort__ Holiday.
109.30

Tues.,

Wed.,

Thurs.,

Frt.,

Sept. 26. Sept. 27. Sept. 28. Sept. 29.
1834d .
185
-led. l87
-16d. 187-16d
133a.2d. 1338.2d. 1328.4d. 13313.8c1.
7854
743.4
7454
7454
10034

101

10154

101)4

11034

1103.

11034

11034

67.70

67.80

68.30

68.10

110.80

111.90

111.40

111.30

The price of silver in New York on the same days has been:

Silver in N. Y.,
per on. (Ota.)

4014

3954

3954

393.4

3834

393.4

PRICES ON PARIS BOURSE.
Quotations of representative stocks on the Paris Bourse
as received by cable each day of the past week have been
as follows:
Sept.23 Sept. 25 Sert.26 Sept. 27 Sept. 28 Sept.29
1933.

1933.

1933.

1933.

1933.

1933.

Francs. Francs. Francs. Francs. Francs. Francs.
Bank of France
Banque de Parts et Pays Ban
Banque d'Union Parlsienno..
11053
Canadian Pacific
DAY
Canal de Suez
Cie Distr d'ElectrIcitie
Cie Generale d'Electrieltie
..




12,400 12,400 12,500 12,400
1,630
1,630
1,630
1,630
343
338
330
310
15e
247
245
242
19,775 19,690 19,780 19,520
2,535
2,495
2,520
2,525
2,080
2,050
2,100
2,100

12,500
1,630
247

2,120

2411
Sept.23 Sept.25 Sept.26 Sept.27 Sept.28 Sept.29
1933.

1933.

1933.

1933.

1933.

1933.

Francs. Francs. Francs. Francs. Francs. Francs.
Cie Generale Transatlantique
Citroen B
Comptoir Nationale d'Escompte
Cot7 Inc

55
537

Courrieres
Credit Commercial de France
Credit Fonder de France
Credit Lyonnais
Distribution d'Electricitie la Par
Eaux Lyonnais
Energie Electrique du Nord....
Energle Electrique du Littoral
French Line
Galeries Lafayette
Gas le Bon
Kuhlmann
VAir Liquide
Lyon (P L M)
Mines de Courrierea
110LIMines des Lens
DAY.
Nord Ry
Orleans By
Paris, France
Pathe Capital
Peehlney
Brutes 3%
Rentes 5% 1920
Rentes 4% 1917
Rented 4 Si% 1932 A
Royal Dutch
Saint Gobain C & C
Schneider & Cie
Societe Andre Citroen
Soelete Franealse Ford
Societe Generale Fonciere
Societe LyonnaLse
Societe Marseillaise
Suez
Tubize Artificial Silk prof
Union d'Eleetricitie
Union des Mines
Wagon-Lila

545

57
550

1,110

1,110

1,110

337
798
4,870
2,230
2,510
2.660
728
961
91
1,050
770
942
340
430
1,400
900
1,010
71
1,230
67.30
109.30
78.30
84.60
1.790
1,292
1,600
540
74
125
2,710
569
19,700
164
860
200
96

56
550

1,100

1,110

230
230
230
230
333
336
332
_ __
791
808
804
_
4,860
4,830
4,860
4,900
2,220
2,210
2,230
2,210
2,510
2,480
2,520
2,520
2,660
2.700
2,690
2,710
__ _
724
737
734
963
985
965
__
54
56
56
57
91
91
91
91
1,020
1,030
1,050
1,030
650
650
650
650
770
770
780
770
949
968
965
--330
330
340
330
440
430
430
430
1,460
1,400 1,435
1,450
____
9C5
896
_ _
980
980
980
980
65
67
68
1,220
1,220
1,220
1,230
67.80
67.70
68.30 68.10
110.80 111.90 111.80 111.30
79.70 80.50
78.90
80.10
84.80
85.80
85.10 85.80
1,810
1,780
1,790
1,790
1,288
1.300
1,289
1,599
1,595
1,599
_
550
540
550
550
74
72
74
73
125
123
122
125
_
2,665
2,685
2.690
569
569
564
- --19,700 19,800 19,600 19,600
169
168
_
168
860
850
860
860
190
200
200
190
98
96
99
-

THE BERLIN STOCK EXCHANGE.
Closing prices of representative stocks as received by
cable each day of the past week have been as follows:
Sept. Sept. Sept. Sept. Sept. Sept.
23.

25.

26.

27.

28.

29.

Per Cent of Par
Retchabank (12%)
139
Berliner Handels Gesellschaft (5%)
84
Commerz-und Privet Bank A G
46
Deutsche Bank und Disconto-Gesellschaft... 47
Dresdner Bank
39
Deutsche Relcbsbahn (Gel Rya) prof(7%) 99
Aligemeine Eiektrizitaets-Gesell(A EG)-__ 18
Berliner Kraft u Licht(10%)
110
Dessauer Gas (7%)
98
Gesfuerel(5%)
73
Hamburg Elektr-Werke (834%)
104
Siemens & Halske(7%)
140
IC. Farbenindustrie(7%)
118
Salzdetturth (734%)
Rheinische 13munkohle (12%)
172
Deutsches Erdoel(4%)
97
Mannesmann Roehren
53
Hapag
11
Norddeutecher Lloyd
12

139
84
45
46
39
99
19
112
99
73
106
139
117
159
174
96
53
11
12

139
84
45
46
38
99
18
112
98
72
105
141
117
160
174
9.5
52
11
12

142
84
45
46
37
100
18
114
102
74
106
146
118
-178
97
52
10
12

141
84
44
45
37
100
18
113
101
73
105
147
116
_
180
95
51
10
11

141
84
43
45
36
100
18
113
100
74
106
146
116

182
96
53
10
11

In the following we also give New York quotations for
German and other foreign unlisted dollar bonds as of Sept.29
1933:
SW
Anhalt 78 to 1946
/23
Argentine 5%, 1945, 8100
pieces
72
Antioquia 8%, 1946
124
Austrian DefaultedCoupons 165
Bank of Colombia, 7%,'47 /25
Bank of Colombia. 7%,'48 125
Bavaria 610 to 1945
nit
Bavarian Palatinate Cons.
Cie 7% to 1945
(13
Bogota (Colombia)6H,*47 j21
Bolivia 6%, 1940
18
Buenos Aires scrip
/15
Brandenburg Elec. 6s, 1953 5712
Brazil funding 5%,'31-51 4212
British Hungarian Bank
7 Hs,1962
(46
Brown Coal Ind. Corp.
134s. 1953
f53
Call (Colombia) 7%, 1947 JI4
Callao (Peru) 734%. 1944 /3
Ceara (Brazil) 8%. 1947.. f 5
Columbia serip
115
Costa Rica funding 5%. 51 34
Costa Rica scrip
(34
City Savings Bank, Budapest. 71). 1953
/39
Deutsche Bk 6% '32 unst*d f75
Dortmund Mon URI 13s,'48 36
Dulaberg 7% to 1945
115
Duesseldorf 7s to 1945_ _ _. 118
East Prussian Pr. 68, 1953. 38
European Mortgage & Investment 734s, l966.,
/al
French Govt. 514s, 1937
137
French Nat. Mali SS.66,
152 134
Frankfurt 7s to 1945
/15
German All Cable is, 1945 3;l2
German Building & Landbank 64%.1948
26
German defaulted coupons. /70
Haiti II% 1953
65
Hamb-Am Line 614s to 40 77
Hanover Harz Water Wks.
6%, 1957
(22
Housing & Real Imp 78,'46 38
Hungarian Cent Mut 78;37 /36

171st price.

Asir
26

bid

Flungartan Discount & Exchange Bank 7s, 1963...
75 Hungarian defaulted COUPS
26
Hungarian Rai Ilk 7348,'32
____ Koholyt 634s. 1943
28 Land M Bk, Warsaw 88.'41
28 Leipzig Oland Pr 6 lis,'46
30 Leipzig Trade Fair 7s, 1953
Luneberg Power, Light &
18
Water 7%, 1948.
23 Mannheim & Paint 78. 1941
Munich 7s to 1945
11
25 M unie 13k, Hessen,7810'45
59 Municipal Gas & Elec Corp
Recklinghausen, 78, 1947
4412
Nassau Landbank 6 Hs,'38
48
Natl. Bank Panama 612%
1946-9
56 Nat Central Savings Ilk of
16
Hungary 734s, 1962....
6 National Hungarian & Ind.

10
2.5

Mtge.7%. 1948
Oberpfalz Elec.7%,1946._

__ -- Oldenburg-Free State 7%
to 1945
Porto Alegre 7%, 196841
Protestant Church (Ger
many). 7s, 1946
40 Prov Bk Westphalia 68,'33
18 Prov Bk Westphalia 66,'36
23 Rhine Westph Elec 7%,
'36
41 Rio de Janeiro 6%. 1933._
Rom Cath Church 6 Hs,'46
63 R C Church Welfare 7s.'46
144 Saarbrueeken M Bk 6s,'47
138 Salvador 7%, 1957
20 Santa Catharina (Brazil)
4312
8%, 1947
Santander(Colom)75, 1948
29 Sao Paulo (Brazil) 6s, 1947
. __ Saxon Pub. Works 5%,'32
_
75 Saxon State Mtge 68. 1947
80 Stem & Halske deb 66.2930
Stettin Pub Util 7s. 1946..
26 Tucuman City is. 1951_
42 Tucuman Prov 7s, 1950._
38 Vesten Elec Ry 78, 1947._
Wurtemberg is to 1945_

Ask

160

301?
- -- -

170
37
611
671
25

8912
29

58
40
/28
20

60
43
30
25

271.
/47

3012
52

(2812

39

40
.
(48

42

/45

47

2912
20
/
23
3612
/57
/46
/35

r25

/64
433
4
50
/16
/24
/10
116
(30
(57
181)
f34
(24
45
(20
26

50
3112
25
25
38
......-

iii"
27
66
443i
60
18
26
13

18
--59
-- -37
26
49
23
30

Financial Chronicle

2412

CommercialantiPliscellaneonsnexus
-All
Breadstuffs Figures Brought from Page 2484.
the statements below, regarding the movement of grain
receipts, exports, visible supply, &c., are prepared by us
from figures collected by the New York Produce Exchange.
First we give the receipts at Western lake and river ports
for the week ending last Saturday and since Aug. 1 for
each of the last three years:
Receipts at-

Oats.

Corn.

Wheat.

Flour.

Barley.

Rye.

.561bs.
bbls.196lb8.bush.60 lbs.bush.56 lbs. bush.32lbs. bush.481bs.bush
215.000
7.000
.535,000
248,000 3.022,000
162.000
Chicago
710,000
71.000
709,000
322,000
1,416.000
MinneapolLs
117.000
45,000
286,000
17,000
1,779.000
Duluth
444.000
1.000
208,000
555,000
00
2
4.0 8
11.000
Milwaukee-1,000
2,000
70,000
40.000
241.000
Toledo
17,000
7,0
12,
9,000
23.000
Detroit
130,000
450,000
57,000
Indianapolis
9,000
6.00
108,00
365,000
278.000
124.
St. Louis_ _
28.000
2,000
56.000
388,000
40,000
38,
Peoria
64.000
336,000
490,000
11,
Kansas City-58.000
270.000
448,000
Omaha
34,000
159.000
135
St. Joseph- - 4,000
14.00
195,
Wichita
22,000
13,111
52,000
16,000
Sioux City
187.000
1.308.000
Buffalo
Total wk. '33
Same wk. '32
Same wk. '31

346,000 6.673.000
12.376,000
405,
9.535,
526

5.999.000
4,101.000
2,788,000

2.287,000
1,918,000
1,816.000

141.000 1,750.000
1,086.000
531.
1,049,000
416.

Since Aug.I12,521,000
54.457.000 31.136,000 27,471,000 2,898,
2.396
1933
34,720,000 36,178.000 3,418,00010,767.000
91.529,
2.944,
1932
9,947,000
3.956.000 116,764,000 22,337,000 21,995,000 1,296,
1931

Total receipts of flour and grain at the seaboard ports for
the week ending Saturday, Sept. 23, follow:
Receipts at-

Oats.

Corn.

Wheat.

Flour.

Barley.

Rye.

bbls.tgelbs.bush.60 1bs.bush.56 lbs.bush.32 lbs.bush.481bs.bush.b6lbs.
2.00
276,000
116,000
New York_ _ _
3,000
1,
4,000
8,000
29,000
Philadelphia__
3.000
10.000
5,000
13,000
52.000
10,000
Baltimore__ __
1,000
Newport News
1,000
Norfolk
30,000
75.000
27.000
36,000
New Orleans*
8,000
Galveston
107,000 2,010.000
Montreal_ _ _
232,000
Sorel
4,000
15,000
Boston
542,000
Quebec
8.000
Halifax
Total wk. '33 323,000 3,155.000
Since Jan.1'33 10,984.000 67.181.000

43,000
88,000
4.275.0001__3.299,000

13,000
250.000

6,000
521.000

126.000
31,000
330,000
86.0001
294,000 5.147.000
Week 1932
Rine. Jan i'52 11.836000109.800000 4.424.000 7.200J00510.855.000 6.882.000
•Receipts do not include grain passing through New Orleans for foreign ports
on through bills of lading.

The exports from the several seaboard ports for the week
ending Saturday, Sept. 23 1933, are shown in the annexed
statement:
Exports from•
New York •
Norfolk
Newport News
New Orleans
Galveston
Montreal
Sorel
Quebec
Halifax

Wheat.

Corn.

Oats.

Flour.

Rye.

Barley.

Bushels. Bushels. Barrels. Bushels. Bushels. Bushels.
22,740
1,000
490.000
1,000
1,000
5.000
7,000
1,000
7,000
1,000
107,000
2.010,000
232.000
542,000
8.000

Total week 1933._ 3,281.000
game week 1932_ 5,073,000

2.000
85,000

147,740
65,145

5.000
205,000

30,000

125,000

The destinat'on of these exports for the week and since
July 1 1933 is as below:
Flour.
Exportsfor Week
Since
Week
and Since
Sept. 23 July 1
July 1 to-1933.
1933.

Wheat.
Week
Sept. 23
1933.

Since
July 1
1933.

Corn.
Week
Sept. 23
1933.

Situe
July 1
1933.

Bushels.
Bushels.
Bushels.
Barrels. Barrels.
837,400 1,609.000 11,832.000
United Kingdom_ 89,390
202,892 1,661.000 16,070.000
24,740
Continent
69.000
10.000
12,000
2,000
So.& Cent. Amer_
1.000
4,000
1,000
193.000
19,000
West Indies
3.000
__ - Brit.No.Arn.Cols.
1.000
151,000
61,175
. 12,610
Other countries_ _

Bushels.

2.000
85,000

22,000
484,000

Total 1933
Total 1932

147,740 1,309,417 3,281.000 28,126,000
812.994 5.073.000 42,634,000
65.145

19,000
3,000

-The following information regarding
National Banks.
National banks is from the office of the Comptroller of the
Currency, Treasury Department:
CHARTERS ISSUED.
Capital.
-The Citizens Nat. Bank of Hampton. Hampton, Va...- $400,000
Sept. 16
Capital stock consists of $200.000 preferred stock and
$200,000 common stock.
President, Jos. E. Healy. Will succeed the First National
Bank of Hampton. No. 6842.
50,000
-The Garrett National Bank in Oakland. Oakland, Md-Sept. 18
President, Chas. W. Ream. Cashiers, it. C. Riggs.
succeed the Garrett National Bank of Oakland.
Will
No. 6588.
-The First National Bank of Pittsfield. Pittsfield, Me__ 100,000
Sept. 19
Capital stock consists of $50,000 preferred stock and
$50.000 common stock.
President. A. P. Bigelow Cashier, Geo. A. Moore.
Will succeed the Pittsfield National Bank. No. 4188.
200,000
-First National Bank of Temple. Temple.Tex
Sept.20
Capital stock consists of $100,000 preferred stock and
Common stock.
$100.000
President, Z. A. Booth: Cashier, IT. C. Surghnor. Will
succeed the First National Bank in Temple No. 13206.




Sept. 30 1933

Sept. 21-The Citizens National Bank in Gastonia, Gastonia, N.0 $200.000
Capital Stock consists of $100,000 preferred stock and
$100,000 common stock.
President. A. G. Myers: Cashier. Allen H. Sims. Will
succeed the Citizens National Bank of Gastonia.
No. 7536.
100.000
-Webster National Bank, Webster. Mass
Sept.22
President. Joseph N. Roy; Cashier, Arthur R. Terrien.
Will succeed the Webster National Bank, No. 11236.
-United States National Bank in Johnstown, Johnstown,
Sept.22
800,000
Pa
President, John W. Walters; Cashier, F. C. Martin.
Will succeed the United States National Bank of
Johnstown. No. 5913.
CHANGE OF TITLE AND LOCATION,
-The First National Bank of Black Rock, Ark. to "the
Sept. 16
First National Bank of Lawrence County at Walnut
Ridge.'
Location changed from Black Rock. Ark. to Walnut
Ridge, Ark.
VOLUNTARY LIQUIDATION.
-The First National Bank of Williston, Williston, N. Dale. 75.000
Sept.18
Effective Aug. 19 1933. Liq. Agent, W. S. Day dson,
Williston, N. Dale,
Succeeded by the First International Bank of Williston,
N. Dak.
100.000
-The First National Bank of Frederick. Okla
Sept. 21
Effective Sept. 15 1933. Lig. Agent, J. B. Beard Jr..
Frederick. Okla.
Succeeded by First National Bank in Frederick, Charter
No. 13760.
BRANCH AUTHORIZED.
-The Chase National Bank of the City of New York. N. Y.
Sept. 18
Location of Branch. Corner of Rockefeller Plaza and 49th St..
Borough of Manhattan, N. Y. City. Certificate No. 892A.
-The National Bank of Commerce of Seattle, Seattle, Wash.
Sept. 19
Location. of branch: 331 Pacific Street, Bremerton, Kitsap
County. Wash.-Certificate No. 894A.
-The First National Bank of Portland, Ore.
Sept. 19
Location of branch: City of Salem, Marion County, Ore. Certificate No. 893A.

-Among other securities, the following
Auction Sales.
not actually dealt in at the Stock Exchange, were sold at auction
in New York, Boston, Philadelphia and Buffalo on Wednesday of this week:
By Adrian H. Muller & Son, New York:

$ Per Sh.
Shares. Stocks.
$75 lot
750 Peoples Trust & Savings Bank of Chicago, par $100
$50 lot
and past due
Six notes totaling $35,322.25
5.5 lot
238 Marion Cafeteria, Inc.(N. Y.). "B," par $100: 4 "A," par $100
$4 lot
Gilliland 01' Co. (Del.) common temp. ctf., no par
200
$5101
common class A. no par
40 Peoples Light & Power Corp.(Del.)
$3 lot
155i Bush Service Corp.(Del.) common v. t. o., no par
15 Bush Service Corp. (Del.) preferred, series A, Par $100; 50-100ths 7% lot
55
rum. preferred .nterim receipt. par $100
$13 lot
200 Detrolt & Canada Tunnel Co.(Mich.). common, no par
$29 lot
$100
6 Brooklyn Academy of Music (N. Y.), par
37 lot
41 Clinbrook Realty Co.(N. Y.), par $100
$3101
42 6-7 Delaware Valley Utilities (Del.), common, no par
861 lot
50 Delaware Valley Utilities (Del.), pref., no par
Bonds
$7.000 City of Coral Gables, Fla., 6% bonds ($1,000 due 1938; 51.000 due flat
10%
1940; $3,000 due 1949; 52.000 due 1953)
In form of a
A mtge. affecting No. 25 Runyon Road, Yonkers, N Y., givenconveyances.
deed and now held by National City Bank of N. Y. by memo
and which said last-mentioned deed was recorded in Westchester County
Register's Office on Dec. 15 1931, which said personal property is held and
will be gold for the account to recover advances in the aggregate sum of lot
$50
$78.21

By R. L. Day & Co., Boston:

$ per Sh.
Stocks.
Shares.
61X
40 Naumkeag steam Cotton Co, par 5100
68
$100
5 Appleton Co., pref., par
20
570 Crown Manufacturing Co., par $100
$6 lot
Slrobroco Stone Co. common
20
Toll, Lee Higginson receipts. non-nego105 Kreuger & Toll; 80 Kreuger &
tiable; 2,400 kronens Kreuger az Toll 5s, Lee Higginson receipts, non-nego- lot
52%
tiable
$1 lot
143 Insull Utility Investment Inc., common
37
20 Greenfield Tap & Die Corp., preferred, par $100
10
5100
50 B. F. Sturtevant Co.. common, par
Per Cent.
Bonds4445,Sept 3 1937. 8500 Mem_.10151
$5.000 City Clneinnat Mill Creek trunk sewer
coupon
9254
82.000 City of Boston 4s. Jan. 1960, Dorchester Tunnel loan
Customers'leases and notes receivable of various dates and maturities in the following amounts, payable with interest to the Poland Laundry Machinery
Co.and endorsed in blank:
*1,250.00
• $50.00 Leader Laundry
Appleton Laundries, Inc
*1,700.00 La Blanc Cleansers & Dyers,Ino *505.00
Bryan Laundry Co
C.dc W.Dyeing & Cleansing Co_ *225.00 Mass. Dye House,!. Tailors, Inc.4,000.00
*3,021.13
*6,507.94 Modern Steam Laundry
John R. Crowell
*756.85
Daylight Laundry Co., Inc.....3,514.93 Monarch Laundry
*1.230.00
*1,435.00 Paramount Cleansers
Luze Laundry
De
*535.00
*540.00 Rapid Cleansers & Dyers, Inc
Eastern Overall Co
*400.00
*215.00 J. E.Saxon
0..!. V. Co
*2,513.00
*1,533.00 Sun Laundry Co
General Laundry Co
*145.00
*180.00 Sunbeam Laundries
Globe Laundry
*355.00
*585.00 Superior Laundry Co., Inc
John Hoffnagel
*2.125.00
Tom Ricci Laundry
Holland Cleansers & Dyers of
'600.00
*29,191.50 Universal Laundry
Maryland, Inc
*500.00
*513.18 Wesco 13Ieachery
Home Laundry, Inc
'5,100.00
*7,508.59 Wonder Laundries Co., Inc....
Horton Laundry Co., Inc
'$15,000 lot.
•1,550.00
House of Liederman. Inc

By Barnes & Lofland, Philadelphia:
$ per Sh.
Shares. Storks.
6 Si
2 Philadelphia Rapid Transit Co., 7% cumulative preferred
lot
20 United States Electric Power,common (with warrant for com,stk. attached)871
United Founders Corp., common
107
1
153 30-40 Central States Electric Co.,common
Stint
60 Evaul Brothers, capital stock
$1 lot
50 Evaul Realty Co.. capital stock
$1101
120 South Jer,ey Realty Corp., capital stock
81101
100 South Jersey kfortgage Co., common
$1 lot
8 Homelands Development Co.. capital stock
El lot
5 Haines & Hand Co., capital stock
57 lot
10 P. A.Stewart Land & Development Co.. capital stock
84 lot
25 Goodwin Co., Inc., capital stock
81 lot
230 Merchantvile Nattatorium Co., capital stock
El lot
11 Broadway Stevens Co.. capital stock
$1101
73 J. W. Paxson Co., capital stock
$1 lot
stock
200 Audubon Wire Cloth Co., capital
81 lot
133 South Jersey Amusement Co., common
Si lot
49 South Jersey Amusement Co., preferred
$11.1
common
600 Suburban Laundry & Carpet Cleaning Co.,
52
8 Suburban Commercial Bank of Barrington, Barrington, N.J
5200 lot
21 J. It. Quigley Co., capital stock
3)4
100 Northwestern National Bank dr. Trust Co., par $20
19
5 Chester Can bridge Bank & Trust Co., Chester, Pa., par $20
74
100 Girard Trust Co.. par 810
89
5 Real Estate Trust Co.. par $100
33
10 Florida Realty Co., capital stock, par $100

Volume Lrl

Financial Chronicle

BondsPer Cent.
$3,000 C. M.St. P.dr P.RR..5% cony.ad.
mtge.,ser. A. due Jan. 1 2000._ 13
$10.000 Berkelash Country Club &s, 1947
$100 lot
$500 N. W. corner Third St. & Lehigh Ave., Philadelphia. 534% let mtge..
due Aug. 1 1933. reglitered
2
52.000 Boyd Theatre, Philadelphia. 534% let mtge.. ser. A. due June 1 1933. 36
$500 NW. corner Thirteenth & Locust Sta., Philadelphia, 6% 1st mtge..
due 1933 (minus guarantee policy)
26

By A. J. Wright & Co., Buffalo:
Shares. Stocks.
10 The Como Mines
50 United Office Building preferred with 50 shares common

8 Per Sit.
$0.20
$40 lot

DIVIDENDS.
Dividends are grouped in two separate tables. In the
first we bring together all the dividends announced the
current week. Then we follow with a second table in
which we show the dividends previously announced, but
which have not yet been paid.
The dividends announced this week are:

Name of Company.
Public Utilities (Continued).
United Pow.& Light (Kan.).7% pt(gm)
United Telep.(Kans.),7% prof.(qu.).-6% preferred (guar.)
Quarterly
West Penn Elec. Co.,7% cum.prof.(gu)
6% cum. preferred (guar.)
Wisconsin Telephone,common (qua:.)..
Preferred (guar.)
Worcester & Suburban Elec..(guar.)-

2413
Per
When
Share. Payable.

$134
134%
114%
$134
$1%

Books Closed.
Days Inclusive.

Oct. 2 Holders of rec. Sept. 15
Oct. 15 Holders of rec Sept.30
Oct. 15 Holders of me. Sept.30
Oct. 15 Holders of rec. Sept.30
Nov.15 Holders of rec. Oct. 20
Nov. 15 Holders of rec. Oct. 20

51 Sept.29 Holders of rec. Sept. 21

Bank and Trust Companies.
Commercial Natl.Bk.& Tr.(N.Y.)
(gu)

52 Oct. 2 Holders of me. Sept.28

Fire Insurance Companies.
Hartford Steam Boiler Insp. dr ins.(gu.)

400 Oct. 2 Holders of roe. Sept.27

Miscellaneous.

Abraham & Straus, Inc., pref. (qua?.)... VA Nov. 1 Holders of roe. Oct. 14
Affiliated Products Co., Inc.. corn.(mo.)
5e Nov. 1 Holders of roe. Oct. 18
Ajax Oil & Gas (guar.)
2% Oct. 16 Holders of roe. Sept.30
Alaska Juneau Gold Mining Co.(gu.)_
15o Nov. 1 Holders of rem Oct. 10
Extra
15e Nov. 1 holden of rec. Oct. 10
Allied Chemical& Dye Corp.,corn.(gu.) $114 Nov. 1 Holders of rec. Oct. 11
Per
When
Books Closed
American Can Co., corn.(guar.)
$1 Nov. 15 Holders of roe. Oct. 250
Name of Company.
Share. Payable.
Days Inclusive.
American Factors, Ltd.(mo.)
We Oct. 10 Holders of rec. Sept.30
American Ice Co., prof.(guar.)
$114 Oct. 25 Holders of rec. Oct. 6
Railroads (Steam).
Appleton.7% pre
Cincinnati Sandusky & Cleveland
65114 Nov. 1
Austin Motors. Ltd., ordinary
6% preferred (5.-a.)
25%
$115 Nov. 1 Holders of rec. Oct. 24
Bonus
Lehigh & Hudson (guar.)
75%
$1 Sept.30 Holders of rem Sept. 21
Preferred
Norfolk & Western (guar.)
20%
51 Nov. 18 Holders of rec. Oct. 31
Autollne Oil Co.,8% pref.(guar.)
Reading.common (guar.)
20e Oct. 1 Holders of rec. Sept.25
25e Nov. 9 Holders of me. Oct. 11
Bloomingdale Bros., Inc.. prof. (qua?.). $134 Nov. 1 Holders of rem Oct. 20
Sharon (semi-annual)
$1)( Oct. 2 Holders of rec. Sept.23
Boots Pure Drug Co., Ltd., Arner. dep.
Vermont & Massachussetts (s.
-a.)
$3 Oct. 7 Holders of roe. Sept. 12
rec.ordinary regQuarterly interim
Public Utilities.
=6% Oct. 9 Holders of roe. Sept.25
Ordinary registered
Amer. Cities Pow.& Lt. cl. A (guar.).- 1750 Nov. 1 Holders of me. Oct. 5
=6% Oct. 2 Holders of roe. Sept. 15
Amer. Light & Traction Co.. corn.(gu.)
$134 Sept.30 Holders of rec. Sept.23
400 Nov. 1 Holders of rec. Oct. 14a Boston Storage Warehouse (guar.)
Preferred (mar.)
40e Oct. 16 Holders of roe. Sept.30
8114 Nov. 1 Holders of rec. Oct. 14a Bridgeport Hydraulic Co.(guar.)
Amer. Water Works & Elec.. corn.(gu.)
Bridgeport Machine Co., pref
hit Oct. 10 Holders of roe. Oct. 5
25c Nov. 1 Holders of rec. Oct. 6
Attleboro Gas Light (quar.)
Byers (A. M.) Co.. Prof
500 Nov. 1 Holders of roe. Oct. 16
$3 Oct. 2 Holders of rec. Sept. 15
Bell Telep. Co.,corn.(guar.)
Calansba Sugar Estates,corn.(guar.).
40e Jan. 2 Holders of rec. Dec. 15
$2 Sept 30 Holders of rec. Sept.30
Canadian Fairbanks Morse, pref.(guar.) $134 Oct. 14 Holders of ma. Sept.30
7% preferred (guar.)
35c Jan. 2 Holders of ree. Dec. 15
Cameron Machine, 8% pref. (guar.)...
Central Hudson Gas & Elec. Corp.
$2 Sept.30 Holders of roe. Sept. 21
6% preferred (guar.)
Canada Packers,7% pref.(guar.)
$134 Oct. 2 Holders of rec. Sept. 16
$114 Oct. 2 Holders of rec. Sept.22
7% preferred
Quarterly
h$314 Oct. 2 Holders of roc. Sept. 16
20c Nov. I Holders of rec. Sept.30
Voting trust certificates (guar.)
Carpel Corp., (guar.)
260 Oct. 1 Holders of roe. Sept.22
20e Nov. 1 Holders of roe. Sept.30
Central Maine Pow. Co.. 7% pref.(gu.) 2134 Oct. 1 Holders of roe. Sept. 10
Case Lockwood & Brainard (qua:.)
ESA Oct. 2 Holders of rec. Sept.20
6% preferred (guar.)
Cincinnati Advertising Product Co.slit Oct. 1 Holders of rec. Sept. 10
Comn.on (guar.)
$6 preferred (guar.)
250 Oct. 1 Holders of rec. Sept.25
$134 Oct. 1 Holders Of roe. Sept. 10
Cincinnati Postal Terminal & Realty
Central Pow. Co..6% & 7% pref. div. deferred.
Chesapeake & Potomac Telephone Co.of
$134 Oct. 16 Holders of rec. Oct. 5
634% preferred (guar.)
Baltimore City, cum. prat. (guar.)... $134 Oct. 16 Holders of rec. Sept.30
Citizens Wholesale Supply, 7% M.(qu.) 8734e Oct. 2 Holders of roe. Sept.30
6% preferred (guar.)
Commonwealth Edison Co.(guar.)
760 Oct. 2 Holders of roe. Sept.30
$1 Nov. 1 Holders of roe. Oct 14
Cleveland Graphite Bronze (guar.)
Dayton Pow. & Light, 6% prat. (mo.).
260 Oct. 2 Holders of roe. Sept.25
50r. Nov. I Holders of rec. Oct. 20
Des Moines Gas,8% pref. (guar.)
Cleveland Union Stockyards Co. (gu.). 1255c Sept.30 Holders of rec. Sept.25
51 Oct. 2 Holders of rec. Sept.20
Collyer Insulated Wire (guar.)
7% preferred (guar.)
260 Oct. 2 Holders of rec. Sept.25
87340 Oct. 2 Holders of rec. Sept. 20
Edison Elec. Ilium. Co.of Boston (gu.). $214 Nov. 1 Holders of rec. Oct. 10
Preferred (guar.)
$114 Oct. 16 Holders of rec. Sept.29
Columbia Mills (guar.)
Franklin Teleg., 2)4% gold stock (s -a.) $134 Nov. 1 Holders of ma. Oct. 14
50c Oct. 2 Holders of rec. Sept 26
Gas securities Co., corn.(mo.)
Comm.Invests., manage.sir.(qua?)....
10e Oct. 2 Holders of rec. Sept 25
G A ofI% Oct. 2 Holders of rec. Sept. 15
Preferred (monthly)
Commonwealth Life Ins.(Icy.)(qua?.)..
40e Oct. 2 Holders of rec. Sept.26
50c Oct. 2 Holders of rec. Sept. 15
General Water. Gas & Elec.. $3 prof-Consol. Cigar Corp., pref.(quar.)
5144 Nov. 1 Holders of rec. Oct. 16
76e Oct. 2 Holders of rec. Sept. 22
Harrisburg Gas. pref.(guar.)
Preferred (guar.)
tlfi Oct. 16 Holders of rec. Sept.30
$134 Dec. 1 Holders of rec. Nov. 15
Hartford Elec. Light (guar.)
Consolidated Dry Goods, 7% pref
6$214 Oct. 2 Holders of rec. Sept.23
6844c Nov. I Holders of rec. Oct. 14
Haverhill Gas Light (guar.)
Consolidated Royal 011 (guar.)
5e Oct. 16 Holders of rec. Sept.29
56e Oct. 2 Holders of roe. Sept. 27
Holyoke Water Pow.(Mass.)(guar.)
Coro Products Refining Co. (qua?.)..
s75e Oct. 20 Holders of rec. Sept. 29
$3 Oct. 2 Holders of rec. Sept. 22
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