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Wealth Markets and Commerce
?K. Rice, Jr. & Co. Buy & Sell American Chicle Com. & Pfd. American Meter < ?>. Chas? Nati. Hunk Mock De!., lack. A Wewtern Coal Equitable Trust stock Famous I'lny ers-I-asky Fanner?. Loan & Tm*t Stock Lehiifh Valley Coal Sales Merchant?* Refrigerating Com. Penna, . oal A Coke Port toboa Petroleum Remington Typewriter Stocks Singer Ma i??? i :?< i iirinj, Texa?. Pacific ( oal ?V Oil Mhitt? Rock Water Com. & Pfd. J.K.R_ce,Jr.&Co. Phones 4000 to <n'? John. 36 Wall St., N. T. Bonds for Investment Harris, Forbes & Go. Pine Sfrce?. Corner %VUU_?ro NEW YORK Liggett & Drexel | Utmber* Sew York etock Bxchantt Conservativa Investment? 61 Broadwa**?New York Boston rb.Uad?Iphia Buffalo ? ss/rjmvs/////////jM^^^ STANDARD WEEKLY ?"^ V.If.L BE SUMMARY || ' MAILEIT ON B TO STAMIARD OIL . INVESTORS ISSUES |__ ON REQUEST CARLH.PFORZHE?SVIERS-Ca Phone 48S0-1-?-3-4 Bruad. 25 Broad St. N.T. Adams Express Co. Coll. Tr. 4s, 1947 FREDERIC H. HATCH & CO. Phase Bertor 6340. 74 Broadway, New York Private telephone to Boston. $20,000,000 Issue Out Liggett & Myers Three-Year Notes Offered The National City Company and the Guaranty Trust Company joint? ly are offering to-day an issue of 520,000,000 Liggett ?fe Myers Tobacco Company three-year <> por cent notes at 98, to yield about ' 7 per cent. The proceeds from the p_?c of the notes will provide funds to reduce the com? pany's current indebtedness. This piece of financin. the largest since the flotation of the fourth Lib? erty Loan, was necessitated Dartly by the advanced cost of leaf tobacco and partly by the increase in the amount of inventory carried. On September 30 last quick assets exceeded $69.700,000, vrhile current liabilities aggregated $21-200,000. For the first nine months of the cur? rent vear the volume of the company's business totalled S108.141.000. -,?? Market Barometers Stock Exchange Transactions Stocks Rail Other All stocks. stocks. stocks. I Last wTr. 745,400 2,664,000 3,409,400) Week bef.1,046.800 2,730,900 3,771,700! Year ago. 312,000 1,533,100 1,845,100: January 1 to date: 1918... 17,545,500 105,248,100 122,793,600 1917.. .20,720,200 143,855,600 164,575,800 1916.. .30,887,200 153,194,900 184,082,100 Bonds Week Year Last-week. before. before. U.S. g427,439,000 $39,354,000 $11,395,000 BTtb.. 7346,000 10,919,000 2,208,000 ?fl-*rs. 13,901,000 21,849,000 5,682,000 AD k*ds 48386,000 71,122,000 19,285,000 January 1 to date: 1918. 1917. V. S. rot---$1,005,292,000 $203,139,000 Bailroads .. 146,653,000 182,294,000 Others. 465,774,000 449,309,000 AH bonds... 1,617,719,000^ 834,742,000 Stock and Bond Averages Stocks Last week "Week before. High. Low. High. Low. 2? Railroads..78.60 77.05 79.15 76.05 30 Industr'ls..86.23 85.40 87.37 84.97 60 Stocks.83.70 82.20 84.08 81.40 Bonds Last week Week before, j High. Low. High. Low. 10 Railroads..86.57 86.17 85.77 82.11 10 Industr"ls..93.48 9?33 91.97 9120 ', Utilities...87.80 87.16 87.95 85.80 25 Bonds.89.46 88.83 88.68 86.48 (Same week last year) High. Low. 20 Railroads .66.20 64.55 SO Industrials ?.69.17 68.10 50 Stocks . 67.98 66.92 Bonds 10 Railroads.80.28 79.71 10 Industrials . 91.03 90.72 5 Utilities . 93.32 93.22 -_ Bonds . 87.19 86.83 Jsnnary 1 to date: Stocks iUlH. 10)7. High. Low. High. Low. 20 Railroads..79.15 66.12 89.35 64.45 ? 30 Industr'ls..88.83 73.37 97.40 67.37 I SO ?toe-kn.84.08 70.30 91.24 66.20 ! Bonds 1918. 1917. High. Low. High. I,ow. 10 Rail road?.. 86.57 76.62 93.80 79.68 10 Ind uk*.!-'!:*. 93.48 67.40 98.30 90.80 5 I'tiiitie-*.. .89.02 82.60 101.48 92.60 25 Bonds ... .89.46 83.62 95.52 86.83 Trust and Surety Companies B ?! A?k?l ' 1S|.) Ail-wl Afilar-'-? IM-- M 75.UrinAt. Tr . '?? 100 *'y if VI Ma/,'?far? . i?,?, |i,, f.tsiiorr, .400 ? M-r T *t U . 115 ? l?o??* ?uni M'* .IM V>'> V'.?ropo* . 310 _ . 4M W'? M<? l^jiirl _ SO *0 '? rsl VuUm i*** ? M'H T ?* W... 105 12? ;5Ml ? ?,(,( r-'ir.-ly 200 21"? l M .... '-O II? s y l, t ? Tr ?50 ftOO >-*)??.*?? Irus*... ?40 MWK-h V'/rS? T m, ??o? Ko???'*m/- . va'/, - h y ic .... Sa ?? t, *. T. ?jW) :;70 l'?4phr*i 2ht 275 . 7^5 '/;'. Ufa (?i? IV? ,. _ a? i 740 tat H*ail} A-v. 70 m 200 -/if. u-atuiinaflut . 2?S ??79 tk>> ?! ... i. /, . 2V) 270 EnaiiUro zv> 2M|Tr?nmU*i4k (70 ido T .. I )? MV ? ??'.? ato !?I0 'Iiti.-i? Tniat ? ,i, H XI t, T Si?". -Oft tUuaa C_ ?16 ?M : *at t. pnrrr*-*. m BSJft?^fjp aWtit Iruv lit*? ?1?M0 il Finance - Economies W.ALL STREET OFFICH: Telephone i MiNs Building, 15 Broad St. Hanover 6514 ' Professor B. M. Anderson in the ? article we reprint this morning draws an interesting parallel be-i tween business at the Civil War's j end and now. Largely on the ? strength of this parallel he predicts j a sharp fall in prices. The likeness ? of the two times is unquestionably i close. Both were at their respec? tive dates the greatest wars, numer- j ically, in history. Both lasted about four years. Both severely inter? rupted the world's commerce. The rise in prices in this country was in both about the same. Both occa? sioned, in this country, a huge ex? pansion of the main forms of busi? ness exchanges actually in use. Dur? ing the Civil War this involved a large issue of paper money; in the ? present war a corresponding expan sion of bank credits which, in the j intervening time, had become the chief form of the actual "cur? rency" with which business is done. But there were still differences. The fall in prices that came in the three months preceding and fol? lowing Lee's surrender was a fall in greenback prices, as Professor An? derson clearly sets forth. There was a still more violent fall in the gold ? premium. In consequence of this ! commodity prices measured in gold I did not fall at all. So far from this, within the year that followed, gold prices were in general higher than at any time during the war. The | fall in the gold premium meant in | effect a corresponding appreciation of the paper currency, which in ' turn inevitably implied a general j fall in commodity prices. The pres? ence of this gold factor confuses the picture and Ifiakes inferences ! therefrom less substantial. | The next two or three years may show a still more remarkable paral? lel to the reconstruction period fol lowing 1865. Then the utter pros-j tration of the South kept cotton j at an almost fabulous price.?To-day the great need of cotton goods in Europe may mean high prices in j this textile for some time to come. After the war there were economic j and crop disturbances in Europe, | which combined to make food prices ! very high. Wheat, for example, j soared to unheard of levels. Mr. Ogden Armour has already recorded his conviction that grain prices in ! this country will remain at a high j figure or some timo to come, j After the Civil War these high food prices led to a great Westward | migration and a rapid development of the rich grain lands of the Mid? dle West. This was accompanied by a great era of railway building, which lasted, with the severe inter- 1 ! ruption that followed the panic of j I 1873, until late in the 80's. The ' j va?st grain fields of Canada may | see a like development now. The j needful railway construction has | been in considerable part already i carried out. It is not so clear that ; the railway mileage of this country will be so largely extended, for the simple reason that, like England and Western Europe, the need has been | largely filled. It is different in the < northern and eastern half of Eu rope, where quick construction of a hundred thousand miles of new : railway would bring millions upon j millions of acres as contributors to ! the world's food supply. Although ! the average yield an acre of wheat j in Russia is higher, for example, ! than that in the United States, it is i a remarkable fact that the surplus ; grain yielded by the Russian fields i is nothing like ]so large, in propor? tion to the farming population, as I in the United States. That means ? i that the production a man power is i ! much greater in this country than ! in Russia or anywhere else in Eu- j rope. Russia is the natural granary for that section of the world. Its I vital needs are machinery, good ? roads and cheap transportation. The I return of a stable government there would open a market for literally billions of dollars' worth of Ameri? can manufactures. The possibilities of South Amer? ica are no doubt considerable. But the population of those countries is much more closely related to the people of Europe, and especially to those, in order, of Italy, Spain, Portugal, France and England, than to this country. For the rest, the whole white population of South American does not much exceed the present population of, for example, Italy. The signing of the armistice last Monday brought into new focus brokers' discussion of the restric- j tions of loans for Stock Exchange purposes. There were some who wanted to believe that, with the cessation of firing on the fields of j France, the need of all steps to con? serve credit for essential national purposes ceased forthwith. The military end of the war seemed about to let loose a great flood of speculative enthusiasm, which was dammed up by the rules of the money committee, which would not countenance "a further expansion I of loans" or "undue speculative" | activity. Many brokers reported that they found it necessary to de? cline-business because of the arti? ficial limitations imposed. Despite the unmistakable desire in some quarters for a relaxation of bars to a free market, bankers associated with the money committee promptly intimated that the present restric? tions would remain as long as the wants of the government continued to tax the credit resources of the country. ?Official intelligence on this subject was lacking until Saturday, when the new money committee of the Association of Stock Exchange j Partners, which had been in con- n ference with the Stock Exchange Committee of Five, which is said to be in steady touch with the money committee, of which Benjamin Sjtrong is chairman, issued a state ment, saying, "We desire to take this opportunity to state that the ! present restrictions will remain." Meantime, conditions in the money market were a shade easier, al? though rates remained at the sta? bilized level. The successful move? ment of the Western grain crops released funds for other purposes, and there were more ninety day loans made last week than in any previous seven day period for sev? eral months. Call loans secured by mixed collateral were made at 6 j per cent and secured by industrial collateral at 6 K? per cent. Time loans brought* 6 per cent, and most of these arrangements were in the nature of renewals. m ?? ? New York Bank Stocks Bit! Asked.I Btd.Aske<*., ! Amerii-a. .490 505'i'arfieM . 170 180 .Atlantic . 165 l?OlGottium N. 200 225 ! Am Exch. 210 220|C,recm?lch . 330 ? Hatten? . 190 210'Harriman . 235 245 Howe?-? .390 420i Hanover . 670 690 Bryant I'. 150 ?Im & Trad. 500 515 B'way Ten. 140 l50;!rvinK Nat. 270*280 Bronx Nat. 150 I60?l'">erty . 390 400 Butch & D. 20 25 I'incolti . 250 300 Chase . 375 405 Manhat Co. IfiO 170 Chat & r. 235 245' Mci'lr ?- M_ 300 310 Chelsea Ex. 120 ?|Metr?.pt.]itan .. 165 175 .Chemical .390 400 Mutual . 375 ? atz Nat. 215 225' Merchant.? . 120 130 City .430 440'New Nelhs. 200 210 Coal & Iron_ 215 230? N V N I* A_ 420 ? Commerce _ 190 195 N ? Co. 135 ? Colonial . 350 ?H'ark . 505 515 Continental _ 100 I lOU'ai-iflr . 135 ? Columbia . 155 !65Tro?l Kx . 200 ?I Com Ebcch. 325 330; I'uhlie . 200 210 Cosmot-olitan .. 85 lOOIShfrinai. 120 130 Commcre'l B... 300 ?IScabord .450 475 ! Comwealtll _ 195 ?Second . 395 415 Cuba . 181 185 State . 102 107 i Ka.?t lllver. 20 29123d Ward . 103 ? I Cl.'th NhI. 200 2'UlT'iiMi! Kx . 150 155 I Fifth. Ave.1700 21001 Wash Uts .350 ?I First Nat.900 ?I York rill 6 . 320 350 I Business Foresight Will Prevent Crisis When Prices Fall Dr. B. M. Anderson, Recalling Experience After Civil War, Counsels Optimism By Dr. B. M. Anderson, Jr. National Bank of Commerce, New York A sharp drop in commodity prices will follow the end of the war, but we will have, no crisis. Wages will also drop, but fair play on the part of both capital and labor will keep this from resulting in industrial turmoil. How? ever, a continuance of active business will depend upon the policies which governments, banking and business pursue to further the rapid repair qf the wastes of war and the restoration of normal conditions throughout the world. The belief that there will be a drastic drop in prices is based on obvious con? ditions. With a vast volume of labor rapidly being discharged from muni? tion factories the world over to resume the producticn of normal supplies; with steel, copper, coal, shipping and other essentials released; with 50,000, 0?0 soldiers returning to farms and factories, there will be an immense in? crease in the volume of goods availa? ble for civilian consumption. Prices should fall, even before this actual transformation is carried far, because wholesale markets commonly forecast impending changes. No Crisis After Civil War Under ordinary conditions this would mean a business crisis with widespread bankruptcy. Yet, to take a historical precedent local to America, the verit? able collapse of prices in the North, following the Civil War, produced no such crisis. In the six months from January to July, 1865, the general average of wholesale prices slumped over 30 per cent. Such a slump coming unex? pectedly would seem to mean universal bankruptcy. Most merchants, having bought goods largely with borrowed money and meeting, in effect, a 30 per cent depreciation when they undertook to sell those goods, would be unable to pay their debts. The credit system would collapse. Yet 1865 was remarkable for the comparative fewness of its bank? ruptcies. Dun's agency reported only 500 failures for that year, as against, 5,900 in 1861. The liabilities in the | 1865 failures likewise were only one- ; "tenth of those in 1861. Greenback Depreciation The rise in Civil War prices was ' due chiefly to the depreciation of the ? Greenback dollar, which at its lowest, ! in July of '64, was worth only 35 cents | in gold. There was no world-wide I shortage of good?;, except cotton. The ? prices were not gold prices, but paper money prices. They represented, not a rise in the value of goods, but a fall iri the value of the paper dollar. Vice ' versa, the fall in prices in 1865 repre- ! sented a rise in the value of the paper ] dollar as the victory of the North be- ? came assured and it became probable ! that the government would redeem its j paper money in gold at a reasonably early date. High prices to-day in the ! United States, however, are high gold prices, representing real scarcities of supplies of almost all kinds. But this difference does not upset the parallel between 1865 and the end of the present war. The business man's contracts run in dollars, not in gold. Cheap and fluctuating legal tender paper money is a great evil, but for short run purposes it will pay debts. A rise in the value of the dollar, re? ducing prices of the goods the busi? ness man has to sell without reducing the prices he has contracted to pay for them or the loans at the bank he has to meet, is at least as hard on him as a fall in prices through increased sup? plies of goods. Business men generally are antici? pating just this change. They are car? rying light stocks of goods, partly through caution and partly because scarcities have been so great that they cannot obtain heavy stocks. Only that man should suffer who goes light heartedly on, on the theory that pres? ent prices are to last forever. Six Points in Post-War Conditions There will be no crisis, but can there be real industrial activity in the United States? To answer this ques? tion we must consider six principal points: (a) The Physical Needs of Europe To-day. A second great difference be? tween the North at the end of the Civil War and most of the belligerent coun? tries to-day is to be found in the fact Price Trend on the New York Stock Market _ -..1, _? I, 1 1.1,1 . I i ne graph aoove show? ayerage price of twenty railroad stocks in one line and thirty j industrial stocks in the other on the first business day of each month from January, 1915, tc July, 1018, and the weekly high, low and closing average prices since July 1. $20,000,000 Liggett & Myers Tobacco Company Three Year 6% Gold Notes To be Dated December 1, 1918 To Mature December 1, 1921 Total to be Authorized and presently Issued $20,000,000 Interest payable June 1 and December 1. Coupon notes in denomination of $1,000, registerable as to principal only Redeemable as a whole or in part, at the option of the Company, on any interest date on 30 days' notice, at 102% and interest for notes with two years or more to run; at 101V2 c and interest for notes with one year or more but less than two years to run; at 101% and interest for notes with less than one year to run Guaranty Trust Company of New York, Trustee From the letter of Mr. C. W. Toms, Vice-President of the Company,which is on nie with us, we summarize as follows : The Notes are to be direct obligations of Liggett & Myers Tobacco Company. The proceeds of the issue will provide funds to reduce present current indebtedness. The Company manufactures and sells all kinds of tobacco products excepting snuff and large cigars. Among its principal brands are Fatima and Piedmont cigarettes, Velvet and Duke's Mixture smoking tobacco. In the Trust Agreement under which the Notes are to be issued the Company will make provision, among other things, that As long as any of the Notes are outstanding the Company will not (a) mortgage or pledge any of its real or personal property, except United States Government obligations, or (b) sell any of its real estate, plants, brands, trade-marks, patents, or shares of stock of Pinkerton Tobacco Company, unless it pays over to the Trustee cash to an amount equal to the cash value received from any such sales, to be used to purchase Notes in the open market, or applied upon the redemption of Notes. The Company will at all times maintain quick assets in a sum equal to at l*pst twice the amount of its outstanding Notes and all other liabilities other than its bonds maturing in 1944 and 1951, notes secured by United States Government obligations and reserves (including tax accruals), all as defined in the Trust Agreement. The six-year average balance of income, after deduction of bond interest, was equal to more than five and one-half times the annual interest requirement for the Notes, and the balance for 1917 was equal to more than six times such annual interest requirement. CONDENSED INCOME STATEMENT Year Ended December 31 Net Income Bond Interest Balance 1912 $8,998,547 $1,829,361 $7,169,186 1913 8,279,966 1,820,235 6,459,731 1914 7,202,139 1,810,965 5,391,174 1915 8,602,912 1,802,636 6,800,276 1916 8,383,566 1,794,511 6,589,055 1917 9,150,183 1,786,463 7,363,720 Total?6 years $50,617,313 $10,844,171 $39,773,142 Average $8,436,219 $1,807,362 $6,628,857 The volume of business done by the Company has increased each year and the earning? have kept pace with the increase in volume. The value of gross sales for the first nine months of 1918 was ?108,141,174. Present quoted prices for the outstanding stocks indicate an equity of about $60,000,000 over and above the Notes. We offer these Notes for subscription subject to allotment when, as and if issued and received by us, and subject to approval of counsel, at 98 and interest to yield about 6%% It is expected that permanent Notes will be ready for delivery about December 2, 1918 Subscription books will be opened in New York at the offices of the undersigned, at 10 a.m., Monday. November 18, 1918, and may be closed at any time at the discretion of the undersigned without notice. The right is reserved to reject any subscription, in whole nr in part, and to allot less than the amount applied for. *? All Ugal details pertaining to this issue will be passed upon by Messrs. Stetson,, Jrnnings \3 Russell, of NewYork The National City Company Guaranty Trust Company New York of New York We do not guarantee the statements and figures presented herein, but they are taken from sources which we believe to be accurate FINDING OF CAPITAL ISSUES COMMITTEE "Passed by the Capital Issues Committee as not incompatible with the national interest, but without approval of legality, vsBdity, worth or secority. Opinion No. A1652." that the North had great undeveloped natural resources and, largely as a con sequence, could get credit in foreign countries. To-day, of course, our un? developed resources are much reduced after a half century of rapid exploita? tion, while Europe, with the exception of Russia, lias largely developed her resources. What are the prospects of active business following peace? What has just been said will show the tremen? dous need for products of all kinds. Consumption has been repressed. People are wearing old clothing and old shoes. Housing supplies have run down. Hunger, long standing, is eager for relief. The need for new capital, equipment, machinery, rails and raw material is very great. Rut can this need be converted into that effective demand which will keep wheels turn? ing and chimneys smoking? Can a people which must pay enormous taxes merely to meet interest on a war debt find funds to buy anything with? lb) The Financial and Credit Re? source?* of Europe. The picture above is blacker than need be. For a counjry which has done most of its borrowing at home it may be said that the burden of the war is over when the war itself is over. The real cost of the war is in the men killed and maimed, in the infant mortality, in the destruction of property, in the reduced consumption of articles of necessity, comfort and luxury by the population. This cost is borne during the war, and after the war is over the price has been paid. If wo can look at the country as one great family it is clear that no finan? cial burden exists. What the family pays out of one pocket in taxes, it re? ceives back in another pocket in the interest on the bonds which it holds. Of course the matter is not so simple As this. Taxpayers and bondholders are not. exactly identical. With pres? ent taxing methods, it is highly prob? able that the heavier proportion of the burden will tall on the rich rather than on the poor, although this has not been true of war debts in the past. Nor ia it true that the imposition of taxes to meet the interest on the bond* ?nd amortiza the principal need b? a handicap to industry and trade, in com I petition with the industry and trade ? of other countries le??s heavily bur j dened. The case is different with a country which has borrowed very largely from I other countries. A foreign debt is a i harder matter to meet. It represented a real gain in goods and supplies over and above the current products of the country's industry at the time the debt was contracted, and it represents a real loss to the country when the time comes to pay it. We may expect in most of the coun? tries of Europe a general pooling of credit resources looking toward the provision of credit for necessary indus | tries. It is right that those who have i suffered least in the course of the war I should aid those who have suffered I most. Something of this sort has been suggested by M. Klotz, the French ; Minister of Finance. (c) The United States As the Main Source of Loanable Capital.?From what countries can the new capital now come? The North at the end of the Civil War could draw to a consid? erable extent upon rich domestic capi? talists. It could draw largely on Eng? land, the Netherlands and France. But the sources of new capital in the period immediately following the present war are, in proportion to the demand, much less abundant than was then the case. The one great source must be the United States themselves. Japan can lend to some extent, as shown by her loans during the war to Great Britain, Russia, France and China, totalling over $900,000,000. Certain of the South American countries may be able to provide some credits. Perhaps the neutrals of Europe -all minor states? can aid substantially. But the main reliance must be on us We must continue to tighten our belt; and must continue to lend and invest Europe will owe us hundreds of mill I ions a year in interest payments air? land at the least we must re-invert?" i in Europe. ,. r.. (<i) Governmental After-the-W?** penditure.?We should, however. <*\ the possibility that the restoration; European credit with a large ???? of demand for our steel, machiner:; -_.., -,..;?). ...,,* ^unnfartures, K?> ovided against. , .?_ Students of the -business eyw the alternation of prosperity. C[-:;, depression and prosperity Hi8!n , has characterized the last century ?? a quarter-have proposed t.w . fluctuations should be lessened . concentration of government Pu\'w. in the period of depression ana ?) withdrawal of the gov ernment ?? the markets as far as possibl? *"^5 the period of greatest activity__^ Continued ov page 'wehe Course of the Bond Market l.nnH?1?lS,f'ar .T"? lhe ??er?Se P??s of ten railroad, ten industrial an? five public ?it? *zt^2; ??,?jb?T;ni. yofeach month f,omjanuar-v*m5*?? *?????'?i9is***nd,hcw<f.