Evening star. [volume], November 15, 1936, Image 75

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

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---1 FINANCIAL AND CLASSIFIED I
c'“s-AJ’ ftlje iunflaa gtef I p"‘n"
Part 5—14 Page.WASHINGTON, D. C., SUNDAY MORNING, NOVEMBER 15, 1936._
ABOVE WEEK AGE
Bank Clearings and Retai
Sales Also Well Ahead
of Same 1935 Period.
WEATHER AIDS TRADE
IN NEARBY TERRITORY
Kailway & Electric Preferred Ac
tive on Exchange—Insurance
Firm Notes Anniversary.
BY EDWARD C. STONE.
In a weekly survey of business con
ditions in 36 important cities, the De
partment of Commerce reported yes
terday that the value of the week',
building permits In Washington wa
74.6 per cent above the previous weel
and 67.5 per cent greater than in thi
same week in 1935, while the tota
Value for October was $1,587,275
which was 3.5 per cent less than tota
building permits granted in Octobei
a year ago.
Retail trade, which has been mount
!ng steadily for many weeks, revealet
a further gain of 25.3 per cent ovei
the corresponding week in 1935, al
though it was off 11 per cent from th<
previous week. At the same time ban!
clearings advanced 8 per cent over th<
previous week and scored a 25 per cen
rise over the same week last year
Tourist activities were slightly lowei
than the previous week, but main
tained their margin over last year, a
evidenced by visitors to the Washing
ton Monument.
Trade throughout the rest of th<
fifth reserve district continued to hol(
a wide gain over the comparable 1931
week. Bank debits, clearings, ston
■ales and wholesale business hung u]
better than seasonal records in mos
cities and towns. The weather en
hanced demand for seasonable goods
Baltimore reporting the best trade it
‘ five or six years.
Railroad Preferred Active.
Washington Railway & Electric pre
ferred led trading on the Washington
Stock Exchange as the week closed
One 85-share and two 50-share sale
were registered at 110%, ex dividend
The stock closed % up from Friday
when more than 100 shares sole
•round 110.
Mergenthaler Linotype appeared or
the board again yesterday with severa
10-share sales at 50. off a point, ant
the final sale of five shares at 55%
A 10-share lot sold In Boston Fridaj
•t 55 Ya. During the week the stool
made a new 1936 high on the ex
change here when It reached 57.
Capital Transit ended the week ai
13% on light sales. Holders art
evidently awaiting coming action bj
the Public Utilities Commission on th<
company’s request to raise the cost
cf weekly “passes” to a uniform pria
of $1.25. It will be recalled that suck
• request was made several months
•go. It would seem that some kind ol
• ruling on this matter must be made
in the near future, perhaps during the
present month. While the transit
company showed a deficit in Septem
ber, the October earnings are ex
pected to be well in the black.
Potomac Electric Power 5% and 6
per cent preferred issues are now being
quoted ex-dividend, sis are Washing
ton Railway & Electric common and
preferred and Mergenthaler Linotype.
These dividends will be paid shortly.
(Volume of trading during the week
Was highly satisfactory, with prices
remaining strong.
Sun Life Notes Anniversary.
The Sun Life Insurance Co. of
(America celebrated its tenth business
year in Washington yesterday at the
offices in the Edmunds Building, 917
Fifteenth street. During that time
yreat progress has been made both In
$he industrial and other insurance di
visions. Organized in Baltimore 46
Jrears ago, the company now has more
than $100,000,000 insurance in force.
Jose L. Hirsh was the first manager
bf the Washington office. He Is now
one of the company's supervisors and
Earnest O. Ulrich heads the office,
having been here since 1933, the office
having expanded until there are now
61 representatives. The personnel In
the Capital has grown to 61 repre
sentatives.
The celebration wound up last night
with a banquet at the Hamilton Hotel,
attended by all the Washington repre
sentatives and their wives and manj
Officials from the home office in Balti
more. J. Balch Moor, superintendent
of insurance in the District, was a
special guest.
Railroad Earnings Climb.
Nineteen class I railroads, repre
senting 66 per cent of total operat
ing revenues in the Southern district
had estimated operating revenues oi
$30,417,183 in October, compared with
$26,458,163 In October, 1^35, and $35,
008,491 In October, 1930, 15 per cenl
above the same month last year, bul
13.1 per cent below October, 1930.
Freight revenues of those railroadi
In October amounted to $25,712,723
compared with $22,733,344 in Octo
ber, 1935, and $28,746,691 in October
1930, 14.9 per cent above the sam<
month in 1935, but 10.6 per cent be
low the same month In 1930.
Passenger revenues of those roadi
In October totaled $2,322,386, com
pared with $1,937,708 in October las)
year and $3,511,224 In October, 1930
being 19.9 per cent above October oru
year ago, but 33.9 per cent below Octo
ber, 1930.
Heard in Financial District.
Directors of Peoples Drug Stores
Inc., have deferred the meeting foi
dividend action on the common stock
until the middle of December, when
they will have more complete re
ports on the year’s operations.
Possible restriction of foreign buy
ing of American securities was the
chief topic of conversation in thi
brokerage houses yesterday. It wat
pointed out that United States official!
have no immediate plans for attempt
ing to curb such trading, that the
matter is only In the study stage
•nd that drafting of any legislation
would take a long time and Its pas
sage still longer. '
Tom K. Smith, A.B.A. Head,
Is Visitor at White House
_ . _
Former Treasury Official
Close Friend of Pres
ident for Years.
OM K. SMITH, recently-elected
president of the American
Bankers' Association, paid his
respects to President Roosevelt
this last week on his first visit to
the Capital since he took office. He
has been a close friend of the Pres
ident for years and is a former Treas
ury official. While here he also con
ferred with Robert V. Fleming, im
mediate past president of the A. B. A.
The new head of the national or
ganization hails from St. Louis, where
he is president of the Boatmen’s Na
tional Bank. A graduate of the Uni
versity o' Missouri, class of 1904, he
holds an honorary degree of LL. D.
from the same institution. Starting
his financial career as a bond buyer
and salesman, he rose steadily in
finance until he became one of the
leading business men in St. Louis.
’ In November, 1933, he was called to
' Washington as special advisor to the
Secretary of the Treasury on banks
1 and banking matters, serving until
May, 1934.
[
Mr. ormin is presiaenx or xne tsi.
Louis Clearing House Association, and
Is an active leader in a host of busi
ness corporations and civic enter
prises.
COTTON USED
DURING OCTOBER
646,499 Bales of Lint and
72,546 of Linters Far
Above 1935 Mark.
1 By the Associated Press.
' Cotton consumed during October
1 was reported by the Census Bureau
yesterday to have totaled 646.499 bales
' of lint and 72,546 of linters. compared
■ with 629.727 and 67,859 during Sep
tember this year, and 552,840 and
67.279 during October last year.
Cotton on hand October 31 was re
. ported held as follows:
i In consuming establishments, 1,402.
916 bales of lint and 160,781 of linters,
1 compared with 848,734 and 132.264 on
September 30 this year, and 1,077,796
and 148,634 on October 31 last year.
In public storage and at compresses,
8.028,140 bales of lint and 52,780 of
linters, compared with 6,805,999 and
31,852 on September 30 this year, and
8.482,269 and 41,765 on October SI
last year.
Imports for October totaled 9,944
bales, compared with 9,162 In,Sep
tember this year, and 7,965 in October
last year.
Exports Climb Sharply.
October exports totaled 861,016
bales of lint and 32,135 of linters,
compared with 569,624 and 12,801 in
September this year, and 711,664 and
23,771 in October last year.
Cotton spindles active during Oc
tober numbered 23,638.270, compared
with 23,514,270 in September this year,
and 23,138,014 in October last year.
Cotton consumed during October in
cotton-growing States totaled 1,549,
039 bales, compared with 527,158 dur
ing September this year, and 459,815
during October last year.
Cotton on hand October 31 in
cluded:
Tn AnnenmEncr •ctahliehm^nM In
cotton-growing States, 1,239,525 bales,
compared with 702,811 on September
30 this year, and 935,765 on October
31 last year.
Storage Total Below 1935.
In public storage and at compresses
in cotton-growing States, 7,983,695
bales, compared with 6,771,009 on Sep
tember 30 this year, and 8,377,191 on
October 31 last year.
Cotton spindles active during Octo
ber in cotton-growing States totaled
17,372,302, compared with 17,318,738
during September this year, and 16,
932,026 during October last year.
An increase in both volume and
value of raw cotton exports in Octo
ber, compared with the previous
month and October last year, was re
ported by the Commerce Department.
It said October exports amounted to
861.000 bales valued at $57,379,000 this
October, compared with 570,000 bales
valued at $37,825,000 in September
and 712,000 bales valued at $45,211,
000 in October, 1935.
Value Gains Moat.
For the first quarter of this cotton
year exports of 1,613,000 bales valued
at $107,231,000, compared with 1,440,
000 bales valued at $92,813,000 the
first quarter of last year, a gain of
173.000 bales or 12 per cent In quan
tity and $14,418,000 or 16 per cent in
value.
Exports were larger this season to
the United Kingdom, France, Ger
many, Canada, Sweden, Belgium and
the Netherlands, while shipments to
Japan, Italy and Poland were smaller.
G-TEAR PEAK SET
DEMAND MOUNTS
Textiles and Non-Ferrous
Metals Hold Attention
With Sharp Gains.
BY A. A. PATTON,
Associated Press Ststistician.
NEW YORK, November 14 —Com
modity prices swept to a six-year peak
as the week dosed, with textiles and
metals other than Iron or steel out
standing gainers.
The spectacular advance that fol
lowed the election lost some of its
drive during the period. Trade circles,
however, pointed out this was the nor
mal aftermath of a sharp upturn, that
the pace set In the previous week could
not be maintained for any length of
time.
The Associated Press weighted index
sf 35 important wholesale commodity
prices pushed up to 83.65 per cent of
the 1926 average, compared with 83.06
last week and 77A4 in the same period
g year ago.
Heavy Demand Cited.
The buoyant effect of an enormous
industrial and consumer demand for
all kinds of staples was credited by
most analysts with the upturn during
the last fortnight. Accompanied by
relatively low stocks of many com
modities, they said, actual and specu
lative demand naturally hoisted quo
tations.
Textiles jumped ahead for the sev
enth consecutive time, the index
showing a 20 per cent rise for the
period.
Cotton cloth quotations equalled
mid-1929 levels. Despite higher opera
tions than any recorded in the past
decade, excepting for a short time
during the 1933 inventory boom, cot
ton fabrications were unable to keep
abreast of demand.
ported sold ahead well into 1937. with
no apparent let-up in sight. Imme
diate deliveries have become, tem
porarily at least, a thing of the past.
Wool and Silk Gain.
Wool and silk moved up a notch.
With spindles and frames operating
at a high rate and profits rising, a
majority of woolen manufacturers
this week boosted the wages of their
Employes.
Industrial staples were heavily
bought at rising prices. Non-ferrous
metals shot up to a new top for the
year, tin, zinc and lead concurring.
Other staples, Including hides, rubber,
turpentine, lumber and burlap, nudged
ahead, while bituminous cosrl dipped
slightly.
Agricultural items were mainly
higher, especially grains. Corn, wheat
and rye led the way. Oats and cot
ton declined. The latter reflected the
Increased crop estimate In official
ijuarters, although some sources were
puzzled by the drop, in view of the
fast tempo of cloth production.
Live stock showed the only group
setback. Hogs and cattle, however,
were unchanged, only lambs sliding.
Food Prices Jump.
Food prices were up sharply; eggs,
sugar, cocoa, coffee and lard led the
parade. Butter was lower.
The Index, with Its components based on
1928 as 100. compared as follows:
Previous Year
Nov. 13. week. ago.
35 commodities_*83.85 83.06 77.84
Industrial _ 83.96 83.74 76.65
Pood - 75.69 73.98 77.73
Uve stock_ 82.10 82.97 87.30
agriculture _ 94.63 94.33 70.45
TextUe _*80.02 77.78 89.28
Non-ferrous metal_*74.58 73.85 67.71
•New 1936 high.
General Motors Profits Likely
To Climb Near 1929 Levels
special Dispatch to The Star.
NEW YORK, November 14.—The
remarkable progress made by Gen
eral Motors Corp. is a feature in the
automobile industry this year. For
the first nine months of 1936 earnings
were equal to $3.92 a share on com
mon stock, against $2.91 in the cor
responding months of 1935. Poor's
Investment Advisory Service forecasts
that General Motors’ profits for the
full year will be within striking dis
tance of 1929’s 98.49 a share.
"The excellent results reflect a
marked increase in the company’s au
tomobile sales, which are expected to
top 2,000,000 this year," continues
Poor’s. “The concern was aided by
increased volume in its medium
priced cars, but a more Important
factor was Chevrolet’s big sales ad
vance. Also helping earnings to some
extent was the larger volume in sub
sidiary products, such as Frigldaire.
"Holding leadership in the auto
mobile business for many yean, Oen
> eral Motors has built up an lmpr|i
1 '
sive financial position. Capitaliza
tion of surplus profits, of course, has
greatly increased common stock,
which now amounts to 42,871,000
shares. However, prior obligations,
consisting of a $3,188,000 minority
interest and 1,835,844 shares of pre
ferred stock, are relatively small.
Moreover, treasury position is strong.
"As of September 30, 1936, cash,
United States Governments and other
marketable securities amounted to
(384,397,000, while net working cap
ital was $336,636,000. Owing to its
strong cash position, its excellent
earnings and because of the penalties
cm undistributed profits imposed by
the revenue act of 1936, the company
has been following a liberal dividend
policy. So far two extra common
distributions of 75 cents each have
supplemented the regular quarterly
payments to bring total disbursements
for the first nine months to $3 a
share. Furthermore, it may be as
sumed that another extra distribu
tion will b« mads Mon thi year
ends." ^
Stocks Now Nearly 100 Per
Cent Above Levels of
March, 1935.
INVESTORS HAIL ERA
OF INCREASING VALUES
Federal Beserve Board and S. E. C.
More Concerned About Future
Than Cheerful Public.
BY CHARLES F. SPEARE.
Special Dispatch to Tht Star.
NEW YORK, November 14—The
elevated plateau of prices of all
groups of securities reached since the
election, and now nearly 100 per cent
higher for stocks than In March, 1935,
Is beginning to create anxiety. Hav
ing had a "landslide” In the political
field, are we to have a runaway mar
ket in stocks and are the quotations
for bonds to continue upward under
the leverage of continuing low Inter
est rates?
These are questions that are con
cerning the Federal Reserve Board
and the Securities Commission more
than the average investor who wel
comes an era of increasing values
after the years of deflation and de
spair from 1930 to 1935. They were
not so pertinent on Thursday as on
Monday. It would be impossible not
to have had response in Wall Street
to such evidences of prosperity as
were given this week in the golden
outpourings of the General Motors
the Chrysler Corp.
Seldom are benefactions of this sort
underestimated in advance as they
were in these Instances. They repre
sent only two of a large number of
similar acts by corporation managers
in sharing their profit* with their em
ployes and their owners, and at the
sam> time, challenging the undivided
surplus tax act. It wiU be interesting
to discover in the tax figures later
to be published if this measure and
the manner of it* reception has
brought to the Treasury the sum an
ticipated.
Need of Tax Changes Seen.
Washington reports are to the effect
that no further program of taxation
is scheduled for the next Congress.
The Increase in revenues from ex
panding corporation profits and in
dividual Incomes is expected to pro
duce a steady reduction in the size of
the deficit and to keep the new Treas
ury borrowing to the sum indicated
In the last budget message.
With the rising tide of prosperity
there is no good reason why a general
recasting of the Income tax schedules
should be postponed and a beginning
made to bring into the list of Income
payers the several millions of Amer
ican citizens whose average earnings
justify some sharing of these with the
Qovernment to the end that an early
reduction of the national debt be ef
fected. This writer believes in cutting
all present exemptions to Include In
the income brackets those earning
11,000 a year and over.
If the recipients of increased wages
and of larger dividends now being an
nounced are disposed to spend this
new income, there will be a degree of
prosperity for the consumption trades
rivalling that of pre-depression days.
Some portion of it obviously must go
to balance the rising cost of living.
This is slow and not at all menacing.
Its progress will be quickened by the
very fact of spending. Retail prices
are at the highest since 1931. The
Dun & Bradstreet's food index this
week shows the top point since Sum
mer.
It is, however, only slightly above
that of a year ago. There are debts
jtiU to be liquidated. On the other
Hand, new ones are being contracted,
as the volume of finance paper proves.
Labor Situation Important.
The relation of higher wages to the
general labor situation is also im
portant. In some instances, as in
the iron and steel industry, increases
followed indications of unrest among
workers that pointed to strikes. Even
now an element in this trade is op
posing the "sliding scale" method of
adjustment.
It is clear that labor will not regard
passively the flood of stock and cash
disbursements by manufacturing con
cerns. There is, however, no serious
labor disturbance except that of the
seamen on both coasts. This has its
basis in what appear to be technical
union procedures rather than in the
more fundamental ones of wages and
hours.
Whether or not prices in this coun
try advance in sympathy with extend
ed prosperity and the enlarged spend
ing ability of the public, plus the gen
eral world trend based on the abund
ance of capital seeking an outlet, it is
certain that the “bargain days” are
jver.
There may still be unexploited areas
In the market for securities and for
real estate. There will be “inflation”
markets, even if not justified by facts.
By and large, however, values have
already adjusted themselves to the
fundamental considerations of earn
ings and return.
Urn Part in Cash.
The strength of the speculative sit
uation is that so large a portion of
the buying of stocks has been for
sash. Brokers’ loans no longer cut a
figure in determining the extent of
the public’s participation. On the
other hand, the objective of the cash
buyer is a profit. Today that profit,
and the proper moment when it is
expedient to realize it, is uppermost
In the minds of a large percentage of
those who first began to interest
themselves in stocks a few months
sgo. There were at times this week
signs of some liquidation in over
boomed stocks. A weak feature of the
situation, as It was in 1929, is the un
willingness of those whose profits be
gan to accrue with the rise dating
from March, 1939, and earlier, to take
them because of the Income taxes
involved.
(Copyitlht. 1930. by tbs North American
Newspaper Alliance. Jpc.)
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NEW TIME ACT
TO BE DISCUSSED
D. C. Accountants to Study
Problems of Robinson
Patman Law.
Accounting and sales problems cre
ated for retailers and manufacturers
by the Robinson-Patman act will be
discussed at the November meeting of
Washington Chapter. National Asso
ciation of Cost
jMwl Accountants. The
meeting, which
will be held at!
the Hamilton
Hotel next Wed
nesday night, will
be addressed by
Dr. W. H. S. Ste
v e n s. formerly
with the Federal
Trade Commis
sion.
The provisions
of the act in
which the inter
ests of retailers.
w. h. s. sterens. josoers ana man
ufacturers center, are those which
amend the Clayton act so that It shall
be unlawful to discriminate in price
between different purchasers of goods
of like grade, except as such variations
are justified by difference in cost of
manufacture or sale resulting from
the different methods or quantities in
which commodities are sold. The act
is interpreted to mean that quantity
discounts to large outlets such as
chain stores, department stores or mail
order houses are permitted, but only
where the cost of sales to such large
distributors is shown to be less by ap
proved accounting methods.
Dr. Stevens, who will make the prin
cipal address, has spent many years
in the investigation and study of va
rious phases of price discrimination.
He holds degrees from Colby College.
George Washington University and
the University of Pennsylvania and
has lectured at Tulane. Pennsylvania,
Maryland, Columbia and American
Universities. His book on Unfair Com
petition was the first volume dealing
with the economics of this subject pub
lished and his studies on this same
topic in the Political Science Quar
terly figured importantly in the con
gressional debates on the unfair com
petition of the 1914 act establishing
the Federal Trade Commission. He
also has published various special
studies.
Following Dr. Stevens’ address there
will be a forum discussion under the
direction of Arthur B. Gunnarson of
the Chamber of Commerce of the
United States. Mr. Gunnarson, who
formerly was connected with the Har
vard Bureau of Business Research, now
is in charge of the national cham
ber’s activities in the field of domestic
distribution. He is well known for
his studies and speeches on current
business problems as they are affected
by congressional legislation.
All accountants and business ex
ecutives interested in the effect of the
Robinson-Patman act are cordially in
vited to attend the meeting, which will
begin at S o’clock, following dinner
at 6:30.
CUBAN SUGAR EXPORTS
CLIMB ABOVE YEAR AGO
*» the Associated Press.
Cuban sugar exports, the Commerce
Department is informed, totaled
24188,236 long tons during the first
10 months of this year, compared
with 2226232 tons in the correspond
ing 1935 period.
Shipments to the United States
during the period this year totaled
1.412,660 ionf tons, compared with
1,467204 tons last year^
Morris Plan Bank
To Open New Type
Of Check Service
Willard O. Barker, president of the
Morris Plan Bank of Washington, an
nounced yesterday that his bank will
open a new type of checking service
in the city tomorrow, which requires
no minimum balance and makes no
monthly charge, but a charge of 5
cents per check. Checks are Issued 20
to a book and may be used over as
long or short a period of time as the
customer chooses.
Mr. Barker explained that the new
service in no way takes place of the ,
standard type of checking accounts .
which have been offered by the bank j
for some time, but is designed for j
those who have found checking ac- j
counts too expensive and for those f
who do not wish to maintain any re- .
quired balance.
Statements will be mailed quarterly, ,
together with canceled checks which •
serve as legal receipts, the banker ]
added. The new service is quite sim- •
ilar to the type adopted by branches 1
of the Manufacturers’ Trust Co. and !
the National City Bank of New York.
FURNITURE SALES
CONTINUE CLIMB !
__ 1
Backlog of Unfilled Orders Larg
est Since 1929. According
to Trade Authorities.
by the Associated Press.
CHICAGO. November 14—The fur- 1
niture manufacturing industry's back- 1
log of unfilled orders, largest since
1929, was augmented this week by '
the midseason shows sales volume,
which ranged from 50 to 100 per cent
bigger than a year ago, according to
reliable estimates today.
This business reported at the close
of the week-long November show was
the newest bright spot in the indus
try's most glowing picture in seven |
years—a picture including a 34 per i
cent increase in factory orders so far '
this year, a 30 per cent gain in ship- 1
ments and a 5 per cent decrease in
cancellations.
These figures are based on factory !
reports given the National Association !
of Furniture Manufacturers. Inc., and <
include statistics available through !
September.
Various estimates in unfilled order <
volume indicated many factories are i
booked well into the new year. 1
MJTWITE NETS
m$& PROFIT
Mine-Month Total Compares
With $1,778,752 for Same
1935 Period.
B7 the Associated Press.
NEW YORK. November 14—Elec
rlc Auto-Lite Co. and subsidiaries,
rith headquarters at Toledo, reported '
or the nine months ended September
10 net profit of *3.242,683, equal after
jreferred dividends to 62.52 a com
non share, against $1,778,752 or $1.31 !
1 share in the first nine months of
935.
From the quarter ended September
!0 net profit was $886,805. equal to 66
ents a common share against $1,
>03.363 or $1.21 a share in preceding
luarter and $436,084 or 30 cents a
hare in the like period last year.
Pacific Gas Si Electric.
Pacific Gas & Electric Co. for the
2 months ended September 30 re
ported consolidated net income of
123,721,713, equal after preferred divi
lends to $2.51 a common share,
(gainst $19,579,018 or $1.83 a share
or the corresponding 1935 period.
Columbia Pictures.
Columbia Pictures Corp. reported
let profits for the quarter ended Sep
ember 26 of $129,258, equal after pre
erred dividends to 26 cents a share
in the common stock. Comparable
igures for last year show net profits
if $495,083, or $1.49 a share. No pro
Ision has been made for tax on un
listributed profits.
MOST OF GOLD COMES
FROM UNITED KINGDOM
By the Associated Press.
Commerce Department statistics
how that the major portion of the
nation's gold imports in the last two
veeks have come from the United
Cingdom.
For the week ended November 6
he United Kingdom supplied $11,
179,728 of the $20,015,211 In gold
hipped to this country. In the previ
ius week *12,170.974 of a total of
.18,678,337 came from that source.
During October France led in gold
xports to this country, with *95,
112.681. compared with $72,155,922
rom the United Kingdom.
__—--- i
Further Increase in Railroad
Income Forecast in Next Year :
Special Dttpatcb to The Star.
NEW YORK, November 14.—Given
the expected moderate rise in general
business activity forecast for 1937, the
Standard Statistics Co. discusses in a
current bulletin the possibility of rail
road net income after fixed charges
reaching around $436,000,000 next year
against about $157,000,000 this year.
A rise of 10 per cent or more in the
average level of industrial production
next year, which seems a reasonable
expectation at this time, would be
translated into roughly correspond
ing gains in both freight carloadings
and gross Income of the railroads.
Any approximation of 1937 earnings
at this early date, however, must be
qualified in many respects.
The first qualification is that the
! C. C. may grant freight rate in
creases totaling about $50,000,000,
which would partially offset the elim
ination of freight rate surcharges.
Even without such assistance, gross
revenues of all class 1 roads next
year should be in the neighborhood
of $4,380,000,000. an increase of,
roughly. $400,000000 over the indi
cated 1936 total.
It is calculated ^that close to M
» _
per cent of the increase In gross could
be brought down to net operating ]
income. The latter would be in
creased by some $180,000,000 to better
than $800,000,000. Assuming further ;
that the railroad pension act is de
clared unconstitutional, the roads will ]
be relieved of approximately $46,000,- i
000 of taxes.
They would likewise be in a position
to credit back to earnings some $38,- i
600,000 of 1936 accruals for the :
pensions. Net operating income would <
thereby be swelled to some $890,000,- i
000. Other income, including income ]
from investments, should add another ]
$230,000,000, bringing gross income ,
to the neighborhood of $1,100,000,000.
Fixed charges will consume some I
$665,000,000. leaving net income avail- 1
able for the equities at around i
$436,000,000. This would compare, 1
roughly, with $157,000,000 indicated 1
for 1936. If the pension act should ;
not be invalidated the final 1937 1
figure would be reduced by some
$84,000,000, to $351,000,000. Any one i
of several other developments could i
likewise alter next year’s earnings <
substantially, but the possibUity of 1
wide expansion ^readily apparent. i
TRADE FORGES UP
AS BUYING POWER
OF NATION GROWS
Rising Tide of Pay Boosts
and Larger Dividends
Helps Incomes.
RETAIL SALES EXCEED
1935 IN ALL AREAS
Wholesale Centers Stimulated by
Holiday Orders and Weather.
Textile Markets Bushed.
BY THOMAS E. FLANAGAN.
Associated Press Financial Writer.
The Nation's purchasing power
swept forward last week on a mount
ing tide of pay bocets and expanding
dividends while industry and retail
trade strode forcefully "ahead at wide
gains over 1935.
The Associated Press index of in
dustrial activity rose to 97.0, highest
since February, 1930. A week ago it
stood at 96.2. A year ago at 82.5.
In its weekly study of business in
36 cities, the Department of Com-,
merce said: “Retail trade everywhere
throughout the country moved to
higher levels than prevailed at this
time last year.
“Wholesale markets were stimu
lated by increased holiday orders and
good buying weather. TextUe markets
particularly enjoyed a wave of con
sumer demand.”
A iitA PrnHneHAtt Ininnc
Accompanied by predictions of good
business in 1937 by leading motor ex
ecutives, automobile production shot
ahead to 104.248 units. Cram's said.
In the previous week the total was
33.892 and in the like week a year ago,
95.075.
Electric power output declined less
than seasonally to 2,169,480.000 in the
week ended November 7, the Edison
Electric Institute reported. The to
tal was 13.4 per cent ahead of th#
corresponding week of 1935.
With power output holding stub
bornly ahead of a year ago, sources
close to the industry predicted ex
pansion of plant and equipment in
1937 as virtually certain. Barring un
foreseen adverse developments com
panies will extend construction sharp
ly over 1936 levels, some said.
Steel experts, noting the industry
running at sharp gains over 1935,
said prospective price increases are
likely to drive in a heavy surge of
buying orders, cushioning the decline
which usually occurs In December.
Higher Steel Expected.
Announcements of new price sched
ules were said to be awaiting final ac
ceptance of proffered wage increases
by some workers. Numerous men at
Camegie-Illinois Steel Co.. United
States Steel Corp., giant operating
subsidiary, were dissatisfied with the
imount of increased pay offered,
’hough many more signed up.
Operations at steel mills ran at 74
per cent of capacity, compared with
74.7 per cent a week ago and 52.6
per cent In the like week last year,
the American Iron and Steel Institute
showed.
As shipments of all classes of
freight, except coke, contracted, car
loadings in the week ended November
7 declined 6.7 per cent to 759,318.
The drop was somewhat more than
seasonal, but the total was 15.9 per
cent ahead of the similar period a
year ago.
Claiming the business and financial
spotlight was a generous scattering of
industrial companies, large and small,
which announced wage increases,
more liberal dividends and sharply
higher third quarter earnings.
General Motors Acts.
At the head of the list was General
Motors Corp., which presented share
holders with a “year-end” dividend
of $1.50, raised wages 5 cents an hour
and announced- a $10,000,000 Christ
mas disbursement to workers.
Business observers were impressed
with the variety of business enterprises
which lifted pay, cut dividend melons
and reported wide third-quarter in
come gains over a year ago.
On the roster of the wage booster*
were Eastman Kodak Co., Simmons
Co., Columbian Carbon Co., American
Woolen Co. and Du Pont.
Units declaring more generous divi
dends included United States Gypsum,
Commercial Solvents, Alleghany Steel,
Eastman Kodak. Chrysler, Gulf Oil,
Sears-Roebuck and Allis-Chalmers.
Important companies entering earn
ings improvement on the ledger in
:luded General Motors, Chrysler,
Western Union, Anaconda, United
Carbon and Stone & Webster,
lythlehem to Spend.
Tangible evidence of the speeding
up of heavy industry and hope for
:ontinued acceleration was seen in the
innouncement Bethlehem Steel Corp.
arill spend $35,000,000 on new con
duction between now and the close
>f 1937. extending a program on which
>34.500,000 has been spent in the past
nr
During the week pessimistic pre
lections were heard in trade circles
ibout copper. Some said they doubted
,he recent heavy volume of buying
:ould be sustained in the face of
iigher output.
It was said a good deal of the de
nand from abroad has been from
(peculators. To the extent the metal
las gone into such hands, it was ex
ilained, this would constitute a pos
able threat to price stability.
Silver in Spotlight.
Silver pushed into the new last week
ls the price of the imported metal at
lew York rose 2% cents to 47 H cents
in ounce, a peak since January 16,
ind the first change in quotation sinpa
day 19. As the week drew to a close,
lowever, the price was reduced to 45 ft
:ents. ^
Merchandising circles, noting do*:
ober sales well ahead of 1935, said
hey expected wage Increases, fatter
lividend checks and gains in farm
mying power to provide a basis for
he best Christmas trade in several
ears with demand for better goods
o the fore.
Shares on the New York Stock Ex
hange bumped into selling in most
ections as the week wore on. Llqui
lation was said to have come from
raders who felt prices might have
iutrun business improvement.
I