Evening star. [volume], January 17, 1932, Image 55

About Evening star. [volume] (Washington, D.C.) 1854-1972

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_ I , FINANCIAL AND CLASSIFIED ' i
News of Markets Classified Ads
Pages 5 to 11
Pages 1 to 4
Part &-M2 Page* WASHINGTON, D. 0., SUNDAY MORNING, JANUARY 17, 1932.____
SUBSTANTIAL GAIN
NDTEDBYW.R.&E.
IN ANNUAL REPORT
Surplus Income Up $153,394
in 1931, President Ham
Tells Stockholders.
TAXI COMPETITION CUTS
DOWN GROSS EARNINGS
Officers Re-elected—Bonds Popular
on Exchange—Record Turnout
of Bankers Forecast.
BY EDWARD C. STONE.
In his annual report to the stock
holders of tne Washington Railway &
Electric Co., yesterday, President Wil
liam F. Ham reported surplus income
for the year amounting to $2,023,437.37,
an increase of $153,394 during 1931.
The traction president also reported
a balance for the year credited to
profit and loss of $1.221,454 04.
His statement showed a decrease in
gross earnings from operations of over
$271,000, but there was an Increase In
miscellaneous income, including divi
dends from the Potomae Electric Power
Co., of $149.806 60. The corporation
ilso made a cut of $250,341.83 in operat
ing expenses, which played a vital part
In the company's net gain in income
during the year.
Washington Railway & Electric's con
densed statement for the year 1931
gives the following picture of the year's
financial activities.
Comparisons With Previous Year.
Increase or
1931. decrease.
Gross farnlngs from
operation .S5.287.270 13 •4271.033.63
81iscfllaneous Income
(including divi
dends from Poto
mac Electric Power
Co.) . 1.851.004 81 149.806 60
Oro-s income . 7.138.274 94 •121.227.03
Operating expenses
(includina deprecia
tion). taxes and
miscellane ous
Charges . 4 483.391.91 *252.341 80 1
Gross income (less
operating expenses,
depreciation, taxes
and miscellaneous
items) . 2.654,883.03 131.114 83
Interest on forded
and unfunded debt 631.44 5 6C *22.279 11
Surplus income
for the year. .42,023.437.37 4153.394 00
•Denotes decrease.
Disposition of Surplus, 1931.
Surplus income for
the year .$2,023,437.37
Add' m'scellaneous
profit and loss ad
justments . 78.016 67
' -$2,101.454 04
L*vv
Pavment of 5*7 div
idend on preferred
stock . $425.000 00
Pavment of 7*7 div
idend on common
stock . 455.000.00
-—-- 880.000.00
Balance for the year cred
ited to profit and loss...$1,221,454 04
Taxi Competition Cuts Earnings.
Study of the reports shows that the
keen taxicab competition during the
latter months of the year made a severe
inroad into earnings. The officials of
the company have hoped that the Pub
lic Utilities Commission would place
more regulation upon the taxicab busi
ness in the city, but the situation still
remains the same as it has been since
the low-rate taxis began operations.
The annual meeting of the Potomac
Power Co. was also held yesterday, as
the two corporations have the same
officers and directors. After presenting
his financial report for the Washington {
Railway & Electric Co.. President Ham |
made no extended comments regarding
the figures. With the Potomac Power
rate matter before the courts, Mr. Ham
deemed It unwise to go over the details
of thesituation at yesterday’s meeting.
He will report soon on the rate status.
The board of directors was elected,
consisting of Woodbury Blair, Edwin C.
Brandenburg, Daniel J. Callahan, F. W.
Doolittle, Robert V. Fleming. Julius
Garfinckel, Edwin Gruhl. William F.
Ham, Robert N. Harper. Cloyd H. Mar
Vin, Lennard H. Mitchell, Clarence F.
Norment Eugene E. Thompson and
Harley P. Wilson. The directors met
Immediately and elected their officers
for the ensuing year: William F. Ham,
president; S. R. Bowen, vice president
and general counsel; A. G. Neal, vice
president and controller; H. M. Keyser,
secretary, assistant treasurer and coun
sel; J. E. Tenly, treasurer; H. G. Hay
don, assistant controller; William L.
Clarke, assistant secretary-treasurer,
and H. W. Kelly, assistant secretary.
No changes were made in the legal
and operating staffs of the railway or
Potomac companies. At i,he meeting
133,812 shares were represented in per
son or by proxy.
JLiaumg Mil 1/. v/. ivAvuau^p.
Bonds got all the attention in the
week's closing trading on the Washing
ton Stock Exchange- The sales:
Washington Gas 6s "A”—$100 at 100'a,
$800 at 100V $1,700 at 100.
Washington Gas 6s "B”—$100 at 100’-j,
$500 at 1C 3 c*.
Capital Traction 5s—$!,0f0 at 60. $1,000
at 60. $3,000 at 60. $1,000 at GO.
The unlisted securities were called off
ar. usual on Saturday and very few
changes in quotations noted. The high
est unlisted stock on the board is
Anacostia Bank which is quoted at 285.
So far in 1932 Washington Gas Light
6s. Series A. have been the most active
bonds in the regular list and Washing
ton Railway & Electric preferred has
been the leader In the stock division.
Record Attendance I’redjcted.
Reservations indicated the largest
attendance of local ^bankers on record
at anv of the Midwinter open meet
ings. The meeting takes place tomorrow
evening at the Willard. Secretary F P.
H Siddons being swamped with notices
from those expe"ting to be present.
Several r,pedal guests have been in
vited. David Lawrence, editor of the
United States Daily, is always heard
with unusual interest. President C. H.
Pope will preside.
In addition to the chief addresp, sev
eral important reports will be presented
by committee chairmen and heads of
association sections.
. —- — •
BOSTON WOOL MARKET.
Special Dispatch to The Star.
BOSTON. January 16. — Various
grades of French combing wools were
actively sold at the close of the week
in the Boston wool market, comprising
the bulk of the business. Graded wools
of this tvpe moved at 52-55 for choice
lots, while original bag lines brought
52-53. Lines containing short French
combing and clotting staple realized
60 cents. California French combing
was available at 45-47. Medium graded
wools and fleeces were relatively quiet
Fine territory combing clean was
quoted today at 57-58. French combing
63-54, half-blood 54-55. three-eighths
blood 48-50 and quarter blood 41-43
Fine Ohio fleeces were quoted at 23 V
241/2, grease basis; half-blood and three
eighths blood 23-24 and quarter blood
21-22.
FOREIGN TRADE OF U. S.
DROPS TO LEVEL OF 1916
Favorable 1931 Balance of 8331,076,000
Less Than Half of Mark Set
for Year of 1930.
The Commerce Department said yes
terday that the foreign trade of the
United States in 1931 dropped to a
new post-war level, with imports the
lowest since 1916 and exports the low
est since 1914.
The official figures of the depart
ment revealed that, “although there was
a favorable balance of trade of $334.
076,000 for 1931. it was less than half
as large as in the preceding year.
Exports dropped from $3,843,181,000
in 1930 to $2,424,183,000 in 1931, a
reduction of $1,418,998,000. Imports
for 1931 were worth $2,090,107,000. a
decrease of $970,801,000 from the 1930
total of $3,060 908.000.
A pick-up in imports was noted in
December, but decrease was likewise
noted for American exports.
Reaction From Abroad.
Dr. Julius Klein, Assistant Secretary
of Commerce, explained the import
gain was probably a reaction from the
depreciation ef currency abroad.
•‘The figure tpr December imports
probably reflects the beginning of an
ticipated larger imports from Europe,
Dr. Klein said, "facilitated by a for
eign exchange depreciation. The in
crease, however, was not as great as
observers had expected.”
A sharp rise in imports, he continued,
had been considered probable, but that
there had been a "sharp shrinkage in
the buying power of this country.' He
pointed cut that much of the mer
chandise that came over in December
and that is arriving now was con
tracted for before the exchange factor
entered the situation.
Discussing conditions in Great Brit
ain which has been the best customer
of the United States in recent months,
the Assistant Secretary said that be
cause of "the extent to which the pur
chasing power in England has declined,
it is difficult to estimate the effect on
American exports of such individual
factors as the buy-British-goods move
ment, protectionist tariffs, the de
preciated currency, together with the
extension of American branch fac
tories in Great Britain.”
At Best Indefinite.
He said the branch factory movement
in England had not received the im
petus that was expected “partly—and
this is important—because the British
tariffs are emergency measures and It
is held unwise to build plants in the
country which would be forced to face
strong foreign competition when the
tariffs are withdrawn.”
As to the outlook for foreign trade
in 1932. Dr. Klein said, “It is at best
indefinite.”
The commerce executive asserted that
recovery from the world-wide depres
sion “undoubtedly must begin in this
country because it has a more resilient
and mobile economic .structure, which
is better able to arjust itself to chang
ing conditions.” .
He said he believed “the domestic
situation will, however, feel the effect
of any unforeseen changes in Europe.”
In his opinion the reconstruction !
finance corporation bill will be a “no
tent influence in preventing further
declines. It will act as a "cushion
against further shocks from European
economic developments and as a seda
tive for jagged nerves.”
December Figure.
Foreign trade figures compiled by
j the department showed that December
exports totaled $184,000,000, as against
$274,856,000 -in December, 1930, and
$193,555,000 in November. With the
exception of July and August, the De
cember figure was the lowest since Sep
tember. 1914. when the amount was
only $156,100,000.
December imports rose from $149.
725 000 in November to $153,000,000. as
compared with $208,636,000 in Decem
ber, 1930. The December amount was
the lowest, with the exception of No
vember, of any single month since Sep
tember, 1915, when the total was $149,
200.000.
The favorable balance of trade in
December was $31,000,000, as against a
favorable balance in December, 1930, of
$66,220,000.
Gold exports for the year went up to
$466,794,000, as against only $115,967,
000 in 1930, a gain of $350,827,000. Most
of this increase has been attributed to
a “raid on th‘e dollar” in September and
October.
Imports of gqld for the year showed
a gain of $216,065,000. from $396,054,
000 in 1930 to $612,119,000 last year.
Silver exports last year were valued
at $26,485,000, as compared with $34,
157.000 in 1930. while imports were $28.
664.000 in 1931 and $42,761,000 the pre
ceding year.
HEAD OF U. S. STEEL
PUZZLES INDUSTRY
—
Speculation Is Rife on Suc
cessor to James A.
Farrell.
By the Associated Press.
NEW YORK, January 16.—The steel
trade continues to buzz with gossip over
the probable successor to James A.
Farrell as president of the United
States Steel Corporation, but high
officials of ths corporation have main
tained a discreet silence. Mr. Farrell
recently announced his retirement as
of April 13.
It is expected in usually well-informed
steel quarters that the new president of
the largest steel company in the world
will be a technical man taken from the
ranks of the company.
Names most frequently mentioned of
late are those of Eugene P. Thomas, vice
president of United States Steel, and I.
Lament Hughes of Pittsburgh, president
of the Carnegie Steel Co., one of United
States Steel's leading subsidiaries.
Dow. Jones & Co. reports that one
name being mentioned in Middle West
ern steel circles is that of Sewell Lee
Avery of Chicago, now president of the
United States Gypsum Co. Mr. Avery
was made a director of United States
Steel last July, taking the place made
vacant by the death of George F.
Baker, sr. , .
Rumors that Mvron C. Taylor, chair
man of the steel corporation's Finance
Committee, might also take over the
presidency, are completely discredited in
ouarters close to the steel corporation.
Rumors that E. T. Weir, president of
the National Steel Corporation, might
be offered the position are also dis
credited in these quarters.
-—
ACTIVITY IN STEEL
IS REPORTED QUIET
Auto Manufacturers Delay Orders
to Await Public Response
for New Model Cars.
By the Associated Press.
NEW YORK, January 16.—Slight in
creases in steel activity have been less
than recent conservative trade predic
tions and the slowness is attributed
partly to a disposition of automobile
manufacturers to await public response
to new models before anticipating re
quirements.
For the week steel ingot production
was estimated to have increased a
point to Above 25 per cent of capacity.
Hopes for future expansion are said
to be based on anticipated improve
ment in rail buying. Pig iron was
quiet, with slight easiness in Southern
prices, but elsew'here markets were
steady. , . ,
Export demand for copper, which had
improved late in the previous week,
tapered off following declines in Lon
Idon and the market became dull.
Tin was firmer, reflecting partly ad
vances In London and lessening pres
sure of domestic resale offerings below
an Import parity. J
Demand for lead expanded to the
best proportions for several months,
with buying for prompt and February
shipments in excess of daily produc
tion.
Buying of moderate quantities of
zinc by large consumers In prompt
positions developed at lower quotations,
but demrnd for more distant delivery
was restricted, with somewhat increased
selling pressure reported.
Antimony was quiet and steady after
redent purchases absorbed the more
pressing offerings.
-•-——
$4,625,000 Gold Received.
NEW YORK, January 16 (£>).—Gold
transactions today consisted of an im
port of $4,625,000 from Argentina, ac
cording to the New York Federal Re
serve Bank statement.
There were no exports and Jno net
change in gold earmarked for foreigr
account.
t
INSTITUTE PLANS
ANNUAL BANQUET
I. J. Roberts Appointed Head
of Committee for Feb
ruary 13 Session.
I. J. Roberts, assistant cashier of the
Riggs National Bank, has been ap
pointed chairman of the Banking In
stitute's 28th Annual Banquet Commit
tee, by Aubrey O. Dooley, president of
Washington Chapter. Other members
of the committee have also been named
for the event, which takes places on
Saturday evening, February 13, at the
Willard 'Hotel.
Mr. Roberts is a former president of
Washington Chapter, has served as
banquet chairman in previous years and
is credited in a large measure with
the success of last year’s dinner. The
annual event, the chief social event of
the year at the institute, brings to
gether large groups of both senior and
junior bank officers.
The Program Committee is already
functioning and has tentative plans for
special entertainment features, a guest
of honor of national prominence, and a
speaker of outstanding ability. Last
year President Stevenson of the Ameri
can Bankers' Association attended the
dinner, as did also the national head
of the institute.
Othpr Committee Members.
Others on the committee are Frank
M. Perley, American Security & Trust
Co., and Miss S. Winifred Burwell,, Na
tional Metropolitan, vice chairman;
Miss Catherine M. Kxieg, Riggs Na
tional. secretary: Miss Gertrude G.
Wick, Liberty National, assistant secre
tary, and J Earle McGeary, W. B.
Hibbs & Co„ treasurer. The other
Eanquet Committee members include:
Willard G. Barker, Morris Plan;
£enneth Birgfeld, Riggs; H. W. Burn
| *^e* R’KSs; William A. Cady, Ameri
can Security; It Jesse Chaney, Com
mercial; Frank C. Cook, District: F. H.
Cox, Commercial; George R. Flemer,
Metropolitan Constance D. Fogle,
Riggs; A. E. Henze, W. B. Hibbs & Co.;
Lloyd H Johnson, Northeast Savings:
Henry F. Kimball. American Security; |
Claude W. Kinseley, Riggs; Robert H.
Lacey, Columbia; Frank W. Lee, Mount
Vernon Savings.
. ??beIt E Lee, Lincoln; T. Hunton
Lefth Secuirtv Savings & Commercial;
S. William Miller, Union Trust; Rich
ard A. Norris. Lincoln; Stuart S. Ogil
I YjL Second National: Nathan Poole.
Federal-American; Robert M. Poole,
i R^gs; Mabel V. Royce and Rose L.
j Royce. Washington Loan & Trust: Wil
I liam F. Russ. Munsey Trust; W. L.
Sanderson, Federal-Amcriean.
Paul J. Seltzer and A. W. Sherman,
American Security & Trust; Robert A.
Sisson, Washington Savings: James A.
Soper, Lincoln; Norman E. Towson.
Washington Loan & Trust; Raymond
L. Weber ational Savings & Trust;
Lois A. White, Federal-American: Alice
H. Whitton and Robert G. Whitton,
Elr,^ National Bank, Alexandria. Va.;
Mildred C. Woodcock, American Secur
ity & Trust.
GROUP INSURANCE RECORD
MADE BY EQUITABLE LIFE
Equitable Life Assurance Society
reports that, despite the business de
pression in 1931, its group insurance
premium income established a new high
Tn?°rtino} history of the company.
The 1931 records in group insurance
business are: For group life, $127,510,
043, and, on the basis of volume cred
its adopted by the society for ctoud
disability, $14,821,463. and for
annuities, $9,727,122. ^ P
----•-—....._
NEW YORK CLEARING HOUSE
NEW YORK, January 16 (/P)_The
j weekly statement of the New' York
Clearing House shows:
Total surplus and undivided profits
$1,028,309,400, unchanged. P
I Total net demand deposits (average)
: $119,190,000 decrease. 'average;,
Time deposits (average), $8,306,000
increase.
225 735rlngS ending $4,232,
'arafe.** «*■* ••
POLICY SEEN S1EP
— ■' "—
Easier Credit Regarded as
Implied Intent in Cutting
Rates for Bankers' Bills.
TIME IS BELIEVED RIPE
FOR STRATEGIC ACTION
|
Stocks and Bonds Enjoy Best Re
covery in Months as Pressure
Is Lifted.
*
BY CHARLES F. SPEARE.
Special Dispatch to The Star.
NEW YORK. January 16.—The im
plied ' intent of the Federal Reserve
Board in reducing buying rates for
bankers’ bills this week is that a step
is being taken in the direction of easier
credit, or away from the process of
deflation that has been going on for
over two years, toward one of moderate
inflation. This has not so far been
supplemented by a lowering of redis
count rates or by purchases of Gov
ernment securities. The amount of the
latter in the Federal Reserve portfolio
has recently decreased instead of in
creased while bills discounted have re
mained stationary.
Undoubtedly a new banking method
or philosophy has been adopted by the
central authorities, who have timed
it with the cessation of liquidation by
member and non-member institutions
and expects to promote it through such
agencies as the Reconstruction Finance
Corporation. It also coincides with a
strong undercurrent of confidence in an
adjustment on German credits that will
be helpful, if not entirely satisfactory,
to creditors here and abroad. Recog
nizing a leadership both in Washing
ton and in financial centers that had
been ccnspiculously absent during 1931,
the investing and speculative public
have reversed their positions in the
market, and with pressure lifted, stocks
and bonds have enjoyed the best re
coveries in months.
Strategy Well Timed.
Unquestionably the psychological mo
ment has arrived for the strategic
move initiated by the Federal Reserve
authorities The degree of deflation
in commodities, in securities and in
loans to brokers as well as those held
by banks had approached, and in some
items exceeded, that of other major
crises. Most of the banks at the end
of the year had "put their houses in
order" to the detriment of the bond
market and of many of their best bor
rowers in pursuing a practice which
the controller of the currency ought
to deprecate rather than to encourage.
They were in a position, therefore, after
the turn of the year, to resume their
normal functions, and having adjusted
their financial structure to the effects
of a price cyclone which swept away
about $175,000,000 from the assets of
three prominent security affiliates, to
consider those responsibilities attached
to chartered lenders.
Liquidation of credit had been on an
enormous scale and far in excess of
that required to bring the financial
structure back to a sound basis. From
figures that have just appeared in the
American Bankers' Association Journal
it is shown that between September,
1929, and September 30, 1931, there
was a reduction of $5,291,000,000, or
20 per cent, in the short-term credits
of Federal Reserve member banks and
of nearly 50 per cent in all reported
security loans. An even larger amount
of decrease would be indicated if the
combined reports of the banks as of
December 31 last were available, as
some of the heaviest liquidation. oc
curred in the final quarter of 1931.
Reflecting this deflation were prices
of railroad securities, less than a fort
night ago. lower than they had been
for a half century’; farm prices that
have not been approximated in 30
years and quotations for various other
commodities below those known to
living men. Obviously, the time for a
material regeneration had arrived.
Important Dividend Meetings.
There have been no unsettling divi
dend changes this week; a few have
been even better than anticipated. The
important meetirgs at which recogni
tion may be given to improved credit
prospects occur in tne second nan 01
the month and include those of the
United States Steel, Pennsylvania Rail
road and Bethlehem Steel companies.
It is not unlikely that they and others
will determine the rate of dividend
next to be paid by the outlook for the
future rather than on failure to earn
their dividends during 1931.
There is every reason to believe that
the corporation bond market has seen
its low levels. It is not so certain what
the outcome of proposed Government
financing is to be on outstanding Treas
ury obligations. Although these are at
the base of the credit structure of the
country, they have been pitifully weak
at times recently. In his special mes
sage to Congress on January 4, Pres
ident Hoover stated that "the recent
depreciation in prices of Government
securities is a serious warning which
reflects the fear of further large and
unnecessary issues of such securities.”
Since this was delivered all classes of
Government loans have touched the
lowest prices in a decade, with the
latest long-term issues at a discount of
about 18 per cent.
An influence inimical to the market
for these loans has been that of "short
selling.” There is an old slogan that
one should net “sell the United States
short.” Recently it appears to have
been a rather popular pastime. If there
is any warrant for it at all, it is the
fear that a reckless borrowing policy by
the Government may compel additional
loans at rates of interest Exceeding the
yields on existing loans and that, in
stead of * balancing the Government
budget through measures of economy,
the United States debt will expand to
the extravagant proportions reached in
those countries that have gone off the
gold basis.
The sharp political division in the
coming campaign may grow out of two
opposite philosophies in the field of
economics, the one contending for an
easy road for the taxpayer, which might
be popular with the masses, and the
other for a rigid adherence to the prin
ciple of meeting debts by curtailing
governmental and municipal extrava
gances The Issue is one that has been
clearly promoted recently and is likely
to b" fought over with as much intens
ity as those relating to prohibition, the
tariff and international debts.
(Copyright, 1932.)
Steel Operations Gain.
NEW YORK, January 16 (&).—-Dow,
Jones & Co. estimate that Youngstown
district steel plant operations next week
will be at 34 per cent of capacity, an
increase of 3 per cent over the current
week.
WE MIGHT TRY A LITTLE PRIVACY
DECLARED SUCCESS
Attendance and Sales Both
Exceed Records of
Last Year.
BY HARVEY’ ANDERSON.
Special Dispatch to The Star.
NEW YORK, January 16.—“Happy
days are near again" is the chorus
heard on all sides on the closing day
of the National Automobile Show, as
manufacturers, dealers and the public
unite in acclaiming it one of the most
successful exhibits of the motor in
dustry in several years.
Not only did the attendance exceed
last year’s show by more than 35 per
cent, but the actual sales were greatly
increased for a number of lines of cars.
The public response, in the words of
S A. Miles, show manager, was re
markable. The Show Committee of the
National Automobile Association ex
pressed itself as "more than gratified”
with the results.
It was reported that there were visi
tors at the show from every State in
the Union. Large delegations of dis
tributors, sales managers and dealers
left the city today for their home
cities with the conviction that the auto
motive industry is now in a position
to lead the country out of the slough
of depression on the upward trail to
more prosperous times.
Crowds End Tension.
Mr. Miles summed up the week’s ac
complishments thus:
’’The show arrived at a tense in
dustrial moment^-when the air was
full of uncertaintly regarding what the
public reaction would be in the matter
of purchasing the products of America’s
largest manufacturing industry.
"The first big question was answered
a few hours after the doors were opened,
when it was seen that the attendance
was breaking last year's record by more
than one-third.
"The second question, of whether or
not the public would buy cars, received
a most encouraging answer. Exhibitors
began to report sales from the very be
ginning. Both in actual sales and in
negotiations entered into for trade-ins,
last year’s exposition was surpassed con
siderably.”
Heads of several motor companies
declared emphatically that they saw
signs of returning confidence on the
part of the buying public and that the
impetus given the industry by the New
York show and other shows throughout
the country will assure a satisfactory
volume of production during 1932.
Must Overcome Fear.
Alvan Macauley, president of the
National Automobile- Chamber of Com
merce, sounded the keynote of the
week in an address before the Mer
chants’ Association of New York when
he said that "the co-operation of all
business can bring about a return of
public spending, effacing the fear and
hysteria which now hold the con
sumer’s dollar in check.”
“It is the fear of buying new things
which must be overcome before we can
have a return of prosperity,” Mr. Ma
cauley asserted. "We cannot be pros
perous if people do not buy and it is
the action of each individual person
in loosening his frozen dollars which
will create the great buying waves that
this country so urgently needs.”
On Monday the Brooklyn show,
twenty-first of the annual series, will
open at the 106th Infantry Armory,
continuing until January 23. It is held
under the auspices of the Brooklyn
Motor Vehicle Dealers’ Association.
The Newark show opens today, to con
tinue until January 23. The middle
western section of the show will be
held in Chicago from January 30 to
February 6.
(Copyright, 1932.)
-•
U. S. TREASURY CERTIFICATES
(Reported by Chas. D. Barney & Co.)
Rate—Maturity. Bid. Offer.
23,4s June 15. 1932. 100 4-32 100 8-32
2s Mar. 15. 1932. 99 31-32 100 1-32
ltii Sept. 15. 1932. 98 22-32 99
3s Sept. 15, 1932. S9 31-32 100 1-32
3Us Dec. 15. 1932. 99 31-32 100 1-32
Everybody’s
Business
Financial Prestige of League
of Nations Involved in
Bulgaria s Fiscal Crisis.
BY DR. MAX WINKLER.
Special Dispatch to The Star.
NEW YORK, January 16 (N.A.N.A.).
—What Versailles proved to Germany,
St. Germain to Austria, Sevres to Tur
key, Trianon to Hungary, Neuilly has
proved to Bulgaria. There is only one
thing left to the conquered—to expect
no salvation.
Bulgarians, "the Yankees of the
; Balkans,” were sufficiently short-sighted
j to choose the wrong allies during the
; Great War. Bulgaria’s side lost. An
| indemnity was imposed upon the coun
1 try amounting to $434,250,000, equiva
lent to about $80 for each man, woman
I and child living in this tiny and great
ly impoverished Balkan kingdom.
Expressed in terms of the country's
own currency, the per capita burden of
reparations is equivalent to 10,536 leva.
A United States Senator suggested that
the Germans reduce their daily con
sumption of beer by one glass and,
presto, she will be able to pay repara
tions. What would he suggest to the
Bulgarians? Perhaps one smell less
of attar of roses, which is one of the
country's principal products.
Met 1925 Agreement.
Despite continuous warfare with her
neighbors and resultant economic and
fiscal difficulties, Bulgaria has met her
obligations promptly and faithfully. It
was not until the outbreak of the
World War that she found it necessary
to suspend payments.
In 1920 negotiations were entered
into with representatives of her for
eign creditors with a view to settling
this question and removing from the
nation the stigma of default. An agree
ment was finally reached in 1925 pro
viding for the payment of interest on
the various loans held abroad, in the
most appreciated -currency specified in
the bonds, at rates varying from 30 to
42 per cent of the coupon, with provi
sions for an increase in these percent
ages until the original rate is restored
in full.
The nation has carried out tly terms
of this arrangement most meticulously.
The only appreciation shown by foreign
creditors has been the persistent selling
of Bulgarian issues down to levels which
to a very considerable extent arq in
dicative of impending default.
The world-wide economic depression
has not spared Bulgaria. Despite rigid
economies, she has been finding it diffi
cult to make ends meet. She has ap
pealed to the League of Nations for
financial assistance. She may get it.
If she fails, she will be obliged to an
nounce that her present financial situ
ation does not permit of the payment
of interest and sinking fund on all her
foreign obligations.
Must Follow Hungary.
Bulgaria, therefore, will, have to adopt
a method to which her northern neigh
bor and former ally. Hungary, took re
course a short while ago—that is, she
will have to deposit Bulgarian money
in the national bank, to be transferred
and made available for her foreign
creditors, as and when conditions allow.
Bulgaria has outstanding in the
American market two issues aggregat
ing about $17,500,000. Her entry into
the American market for financial ac
commodations took place in 1927, when
a 7 per cent loan of $4,500,000 was
underwritten by an American banking
syndicate for the purpose of providing,
among others, funds for the settlement
of about 120,000 Bul|arian refugees
from other countries. Proceeds were to
be expended under the direct control of
a commissioner appointed by and re
sponsible to the League of Nations.
In the following year, Bulgaria ob
tained in the American market a 7Vg
per cent loan of $13,000,000, proceeds
from the sale of which were allocated
for various governmental purposes, in
cluding liquidating budgetry deficits.
There is no doubt that the successful
marketing of the above loans was due
to confidence which the investors placed
in the ability of the League of Nations
to look after their interests. The
League would thus appear to have a
certain moral obligation toward those
F
RESTORATION PUI
UP TO INDIVIDUALS
Advertising Held Means to
Start Motion to Better
Business.
"The only thing that will restore
business as a whole is for each and
every one of us to restore his own busi
ness,” declares. Earnesto Elmo Calkins in
Advertising and. Selling.
“Advertising has not lost its power.
These are the same people who were
such enthusiastic customers two years
ago. They still must live. They still
have the same wants and desires. We
got them to buy through advertising
when money was plenty. Do we expect
them to buy without advertising when
money is scarce?
Still Use Advertising.
“Nearly every business that has been
determinedly and confidently pushed
this year has succeeded and has made
money. Some of them are retail stores
and some are manufacturers. They still
believe in advertising. They are still
confident of the future. They know
some people have money, they ask for
it and they get it. They are little
spots of prosperity in a sea of depres
sion, not enough yet to leaven the
whole lump.
“But if each shop and store and
factory and service station will endeavor
to sell writh all its might and main, and
use advertising with the same courage
and confidence it did when business
was good and people were buying with
out urging, these little spots will soon
cover the country and business will be
good.
“All wealth comes from dollars in
motion, rolling around the country,
buying goods at the retail store, going
on back to the factory to buy more
goods, paid by the factory to its work
men or for more raw materials, spent
by the workmen for goods at their retail
stores.
Advertising Is Need.
“The only known way to set dollars
in motion is by advertising, by making
the goods or service so tempting, so
desirable, so needed that they will bring
in the dollars of those who still have
them and thus supply dollars to those
who now have none, so they, too, can
buy things.
"Advertising will do that if we put
our whole soul into it and put good
merchandising behind it. We must be
lieve in our own advertising if we ex
pect others to believe in it.
“If a million storekeepers do this
now it will put business in high gear
—not immediately, there is nothing
miraculous about it—but it will be
motion ard that motion will be for
ward and upward. And that is all
that’s needed.”
w’ho purchased securities sponsored
by it.
If the League should fail to make
necessary arrangements to tide Bulgaria
over the present difficult period, and
if default should result because of such
failure on the part of the League, the
prestige of this body would suffer im
measurably. Politically, it has not al
ways had the smooth sailing which its
most ardent adherents anticipated.
Financially, however, the League may
be said to have been eminently success
ful. It has been responsible for the
rehabilitation of Austria, the recovery
of Hungary, the restoration of Greece,
and the renascence of Bulgaria. De
fault on a League loan would be highly
regrettable
It is hoped and expected that Bul
garia will not be forced to adopt the
extreme measure. Those identified with
the origination and distribution of the
country’s obligations among investors
in all probability will do their utmost
to extend temporary assistance to a
nation which is anxious and willing
to meet payments in full on all con
tractual obligations.
(Copyright. 1932. by the North America a
Newspaper Alliance, Inc.)
'EUROPE’S BUSINESS
| SHOWS CONCERN IN
i 1
Orderly Agreement or Hard
Struggle at Lausanne
to Be Factor.
OTHER NATIONS LOOKING
TO FRANCE TO TAKE LEAD
London Refuses to Be Wholly Pes
simistic Despite No Real
Improvement.
Srecial Dispatch to The Star.
NEW YORK, January 16.—Cable and
radio dispatches to the Eusiness Week
give the following survey of business
abroad for the week ending today:
Europe,—Whether reparations end in
on orderly agreement or after a strug
gle which could easily precipitate a
series of further crises is a major worry
to world business. On France rests
the major decision. Britain is mildly
optimistic over the outcome of pending
conferences; has prospects for better
domestic business. Italy wants an end
of reparations; is industrially less
active. France is changing govern
ments, trying to delay a definite deci
sion on reparations until after elections,
playing for a better bargaining position
abroad, facing rapid industrial decay at
home. A Bulgarian moratorium is like
ly to be followed by several measures
in Greece, Jugoslavia and Austria.
Germany is helpless.
France Not Uneasy.
Par's—If there is any uneasiness in
Paris, it is due to no fear concerning
reparations themselves (France intends
to pay her war debts only proportion
ately to reparation receipts). Rather
there is fear lest once the reparations
checkrein over Germany is relaxed,
Germany wi'l attempt other revindica
tions, such the right arm and the re
turn of the Polish Corridor.
As yet there has not been time for
the national equipment program to
show any effect on business conditions.
Unemployment continues to rise with
labor restlessnes more evident, especial
ly around Paris. *The just-published
November production index continued
the 2-point monthly drop which has
repeated itself each month since Au
gust, and which now has reached 115,
compared with 140, the monthly average
in 1930.
The $80,000,000 year-end expansion
of bank note circulation is contracting
very slowly. The Bank of France, due
to the generally unfavorable domestic
situation and to the prospect of sharp
ly reduced activity in 1932, is expected
to pursue the recent policy repatriation
of its foreign balances.
London Optimistic.
London.—British business refuses to
be wholly pessimistic despite a lack of
data to show real improvement in the
general situation. In the industrial
field encouragement is derived from the
increase in trade inquiries. In the
financial field there is cheer in the
better tone on the stock market and
tre continued hope that the Lausanne
Conference will at least determine con
ditions which will prevail for a fixed
time, as limited as that may be. Rumors
are abroad that the cabinet is in serious
disagreement on its tariff scheme, due
to be announced with the Aoril budget.
Pressure from all sides for' protection
is unrelenting. The iron and steel in
dustry, in particular, is demanding im
mediate aid. Treasury officials are
anxiously scanning first reports of the
income tax yield. Not only is the rate
increased this year, and the exemptions
lowered, but three-fourths of the year’s
tax is payable now'. More than 1,500,
000 new taxpayers are added by the
lowering exemptions.
During the first nine days of the year,
tax returns totaled nearly $73,000,000,
which is $32,500,000 more than W'ere
paid in the first nine days last year.
German Industry Worse.
Berlin.—Chancellor Bruening’s repar
ation statement is officially interpreted
as Germany’s inability to pay in ac
cordance with the Basle report and not
as any unwillingness on the part of the
Reich. Opinion is strongly opposed’to
any short-term prolongation of the rep
aration moratorium with a six-month
adjournment of the Lausanne Confer
ence. The money market is remark
ably easy. Nearly 90 per cent of the
Reicbsbank’s year-end credits were re
paid in the first week in January. The
general industrial position has further
worsened. Unemployment at the year
end stood at 5,600.000 and is increasing
rapidly. The coal and steel industries
contribute the largest number.
RETAIL FOOD PRICES DROP
THROUGHOUT COUNTRY
Retail food prices throughout the
country, according to figures compiled
yesterday by the Labor Department’s
Bureau of Statistics; continue to slide
down the scale. The bureau noted a
reduction of 2 per cent on December 15,
as compared with figures compiled as
of November 15.
This reduction places the average de
crease in retail prices for the year at
16 2-3 per cent, according to the bureau.
Washington, Springfield, 111.; Salt
Lake City, St. Louis, Philadelphia,
Peoria, Mobile and Minneapolis each
noted a 2 per cent decrease during the
30-dav period ending December 15. This
reduction places the yearly decrease
here at 17 per cent.
CHEMICAL REPORTS JUMP
IN EARNINGS IN 1931
Special Dispatch to The Star.
NEW YORK. January 16.—The
Chemical Bank & Trust Co., which has
just made public its annual report,
states that the bank in the year ended
December 31, 1931, earned $5,113,000,
equal to $2.44 a share on 2,100,000
shares of stock as against $2.25 a share
earned in 1930, a fine showing during
a panic year.
The bank now has 14 offices in New
York City, one in Brooklyn, one in
Chicago and one in London. It is a
charter member of the New York Clear
ing House Association.
CORPORATION EARNINGS.
NEW YORK, January 16 (jP). — Per
share earnings of corporations reporting
in the past week included:
Year ended November 30— 1931 1830.
Gulf States Utilities nfd. $13.00 $16.83
Pensylvania Pow. & Light pfd. 17.10 17 12
Puget Sound Pw. & Light pfd. 8.75 10^37
Virginia Elec. & Power pfd.. 20.01 20 00
Year ended December 31—
American Superpower.04 38
Italian Superpower .41 .44
R. J. Reynolds Co. 3 64 3 43
United Corporation .75 .78
United Fruit . 2 32 4 24
U. S. Realty & Improvement. .52 4.42
Western Union . §88 9.63
White J^ock Mineral Springs.. 4.00 4.70