Evening Star Newspaper, June 9, 1929, Page 75

NDAY STAR, WASHINGTO NEW U.S. CURRENCY - AROUSES INTEREST Money Soon to Be in Circulation. BY EDWARD C. STONE. Curiosity got the best of thousands of depositors in all the local banks during | I Ends 19th Term | | | the past week when the new currency | &5 | was placed on exhibitlon for the first) tme. the new bills being studled with | intense interest. Scores sought to ob-| tain one of two of the bills, but all pleas were refused. Each bank had but four bills and it was distinctly under- stood that they were for exhibition pur- ses only. b T paper currency, 65-16 by 211-16 inches, is most attractive and is Tow expected to be put into circulation about July 10. bills is an engraving of Washington. On the face of the 82 bills is a picture of Thomas Jefferson, while on the reverse side is a picture of Monticello. Lincoin appears on the face of the $5 bills, while on the back is a handsome engraving of the Lincoln Memorial. The $10 bill presents a picture of Alexander Hamilton on the face and the United States Treasury Building adorns the other side. Jackson appears on the face of the $20 denomination, while on the reverse side of this bill is a fine pic- ture of the historic Hermitage, his old home near Nashville, Tenn. Novel Method Is Adopted. An effort has been made to keep the | new designs as simple as possible with- out unnecessary and confusing orna- mentation. For the new designs every back of a given denomination is abso- lutely identical. The $5 bill back will always bear an engraving of the Lincoln Memorial as a lprednmmutlng feature. The $5 backs will accordingly be printed in quantity and used for any kind of currency issued in this denomination. Accordingly there will be only one $5 back, instead of several, for the Govern- ment to print and protect, and for the public to become familiar with, For the faces, although necessary to show the kind of currency, uniform denominational characteristics have been fixed, tie outstanding feature of each denomination being the portrait. ‘The Treasury seals and serial num- bers will be printed in color, on United States notes in red, in blue for silver certificates, in yellow for gold certifi- cates, in green for Federal reserve notes and in brown for national bank notes. On United States currency the seal will be on the left, balancing a large “F-I-V-E” at the right of the portrait. On the Federal reserve currency the seal will be superimposed on this word “F-I-V-E” at the right of the portrait, | | | | ALBERT S. GATLEY, On the face of the $1 | Executive vice president of the Lincoln | National Bank, who is slated for his twentieth_election as treasurer of the District Bankers' Association at the | coming Long Island convention. His books always show a generous balance. DISCOUNTS EFFECT CF DROP N WHEAT Statistics Company Declares Break in Prices May Not Result Seriously. Special Dispateh to The Star. ' NEW YORK, June 8—While in no way attempting to minimize the extent of the disaster which has befallen a large number of farmers in the recent drastic decline in wheat prices together with a large carryover and prospective large production, the Standard Statis- tics Co. of New York, sounds an op- timistic note in an “interpretation of the Break in Wheat Prices.” The survey, after reviewing the high record earnings of the 500 manufactur- ing concerns which reported average profits for the first quarter 32 per cent over the similar period of 1928, says in a part: “By Fall it is quite possible that the evil effects of the drastic shake-down but will be balanced by the Federal reserve district numeral at the left. ‘The seal will have the same place at the right on the national bank currency and at the left of the portrait the name of the issuing bank will be promi- nently printed. These differences of color and the position of the seal are sufficient to facilitate the ready sorting of currency by banking institutions. Gold certificates, the Treasury an- mounces, will no longer have the yellow back of the past, but will be printed with a green back like other currency and will have the numbers and seal in yellow on the face. Study of the new $1 bills reveals that they have no picture on the back of them. All bills of $100 denomina- tions and under, with the exception of the $l1s, have engravings of buildings on the back. The $1s and the higher denominations have ornate backs al- though none of the banks here or elsewhere have yet received any of the Jarger denominations. It is stated that there are 11 denominations represented in the new reduced size currency. Enormous Printing Problem. As one looks at the new bills as they are exhibited in the banks the enormous amount of work in &mducmg them is little understood. It has been necessary to print for a complete turnover of United States and Federal Reserve cur- rency approximately 76,000,000 sheets of 12 subjects each, or 912,000,000 indi- vidual piéces. These have to go through the various operations of wetting, back printing, examining, a second wetting, face printing, examining, trimming, numbering and sealing, and the final cutting into individual notes. After this they are assembled into packages of 4,000 pieces for delivery to the Treasury. Vast as is the capacity of the bureau to accomplish enormous tasks of this character, the production of this new currency, in part carried on during a period of substantial pro- duction of the old size currency to meet the needs of the past months, strained the bureau’s capacity to the utmost. In order that this new currency might have a longer life than that of the old size currency, extensive research work was undertaken with the co-opera- tion of the Bureau of Standards, the Bureau of Efficiency and the manufac- turers of the paper to develop a type of paper which would have a greater endurance and folding strength and which would at the same time meet the manufacturing requirements of the Bureau of Engraving and Printing. It 18 not every paper of high strength that will stand the wetting and drying operations incident to the manufacture of currency. United States currency is | printed by the intaglio process on dampened paper. Paper when moistened expands, but does not always contract uniformly as it dries. A second wetting is necessary between the printing of the backs and the faces. The Treasury has to have a paper that will expand and contract uniformly under these conditions, in order that the faces on each sheet of 12 notes may register with reasonable accuracy against the backs previously printed, a somewhat severe requirement, when combined with a stipulated thick- ness, structure and folding strength. The new paper has no prominent silk fiber. Such fiber as it contains is so | macerated and interwoven in the tex- | ture of the paper that it is not readily observed. It has long been felt thnt‘ the prominent silk fiber was an encour- agement to the counterfeiter, since it was so easily imitated. Distribution Another Big Task. ‘The Pmbism of distribution 1s planned as follows: Prior to the issue date, stocks of the new-size currency will be placed in reserve custody in the 12 Federal Reserve Banks and in certain of their branches. The initial issue will be made simultaneously to all banks. At this time all established denomi- nations from $1 to $20, inclusive, of | all kinds of currency, except national bank notes will be issied. The higher | denominations of United States and | Federal Reserve currency and the estab- lished denominations of national bank notes will follow as soon as possible. All issues will be through the Pederal Reserve Banks to member and other banks, and ail banks will be placed on an equal footing. = FIVE AIRPLANE FIRMS JOIN IN BIG MERGER Special Dispateh to The Star. DETROIT, June 8-—Formation of the Detroit Aircraft Corporation as a consolidation of five of the leading companies in the industry and em- bracing in its directorate some of the best known executives in the auto- motive and aeronautical industries, including . Ford and General Motors officials, was announced here today. ‘The five companies that will be in- in wheat prices may be somewhat miti- gated. Production Outlook. Meanwhile, of course, and until there are definite signs of more adequate ag- ricultural incomes than at present avail- able, precautionary measures are like- ly to be taken by business men and manufacturers to place themselves in positions to withstand a_considerable period of dullness this Fall. Production schedules which have thus far held up remarkably well, are Nkely soon to show a more definite downward trend. “Nevertheless, the presént is not & time to be stampeded into a pessimistic frame of mind. While there is clearly ample basis for taking certain measures of precaution, the wheat crop is by no means an_all-inclusive determinant of business. There is no assured founda- tlon for expectations of a serious busi- ness recession, and many reasons for the belief that the handicaps of cur- rently low grain values can be at least partially overcome later this Fall. “But virtually every important in- dustry normally looks to the quickening effects of harvest income for a decided spurt in activity during the Fall months. If the release of purchasing power to the wheat growers is to be as sharply below that of a year ago as the present comparative level of prices would indi- cate, there is need for caution in the scheduling of business programs over the next half year. “On the other hand, the break in wheat prices clearly signalizes the need for consideration by the Federal Reserve authorities of a less stringent credit policy this Fall. Granting that ma- teriaily lower prices were probably justi- fied by the prospective burdensome car- ryover of old crop grain and by the favorable new Winter crop outlook, the severity of the decline witnessed was in all probability directly affected by the strained credit situation, and by presure from the Reserve authorities for a general reduction of borrowings against speculative commitments. Partial Recovery. “It is quite possible that the decline in grain values in the process of dis- counting oversupply overshot its mark, as evidenced by the partial recovery during the past week. Any amelioration of the money situation when the bur- den of crop moving is more nearly at hand would further tend to stabilize and improve values. Moreover, much will depend on the Srrlnl wheat pros- pect. There is considerable doubt as to the ability of Canadian growers to attain last year's harvest volumes, and some likelthood also of lower European ylelds.” CHESAPEAKE CORP. INCREASES STOCK | Shareholders Make Provision for Dividend and Offering of New Shares. Stockholders of the Chesapeake Corporation have approved an increase in 1its authorized capital stock from 900,000 shares to 2,500,000 shares of no par value, Subject to this approval, the directors had proposed to pay & stock dividend of 33%; per cent on July 1 to stock of record of June 27. Stockholders of record of May 22 have the right to subscribe to 450,000 addi- tional shares at $50 a share in the ratio of one-half share of new stock for every share held. The rights will expire on June 24. roceeds of the financing will be used chiefly for the purchase of additional common stock of the Chesapeake & Ohio Rallway at par of $100 under an authorization by the Interstite Com- merce Commission. The financing is in connection with the recent merger of the Pere Marquette with the C. & O. The directors have announced their intention of continuing the present $3 annual dividend on the new stock to be issued. OLD GEORGIA BANKS VOTE FOR MERGER | 8pecial Dispatch to The Star. ROME, Ga., June 8.—The PFirst Na- tional Bank of Rome has been added to the affliations of Fourth National Bank of Atlanta. Fourth National ac- | %Izlud a large block of stock of the me bank through the Fourth Na- tional Assoelates, a holding company owned by Fourth National. This in. creases Fourth's resources to more than 864,000,000 and oapital assets above $5,000,000. First National Bang of Rome was or- anized in 1877. This is another step Many Request View of Paper | e . + ||selective Buying Succeeds! Special Dispatch to The Star. TRADING IN STOCKS ON NARROW BASIS Recent Reaction, With Sev- eral Groups Strong. BY CHARLES F. SPEARE. NEW YORK, June 8.—About one- half of the recent average decline in| stocks has so far been recovered. The improvement. following the latest of the sharp reactions, beginning with that of | last December, has not been so swift or. so pronounced as the others nor has there been the accompaniment of large | volume of trading and public excite- ment. ' The characteristics of the market | have been those of comparative dullness | in the general list, but exuberance in | particular groups of stocks, whose | buoyancy has contributed very largely | to re-establishing average prices at a | higher level. Such a procedure is in line with the | prevailing belief that the market from now on will be of a selective character and that special groups of stocks, rather than all classes of stocks, will assume leadership. This s illustrated by the concentrated professional and public interest this week in public utility com- mon shares, as well as in the issues of companies related to the power and light industry and to those manufac- turing electrical goods or producing copper metal. Three Groups in Lead. While a majority of the 10 main di- visions of stocks at present show a com- paratively small average price increase over that in June, 1928, those repre- senting the public utilities, coppers and manufacturing concerns stand between 30 per cent and 40 per cent above the average of 12 months ago. The high figure of the manufacturing group is due to the steadily increasing valuations placed on this class of security. and especially to a small number of con- spicuous stocks in this division and at a time when there is a tendency to dis- criminate against industrial shares as a class and to shift speculation into public utilities and rails It is a significant fact that through- out the periods of disturbed markets since December, and in spite of their having six months ago established themselves at what was then regarded by power and light managements as an extravagant level of values, the public utilities have continued to advance and to enlarge their speculative followings. his is due not only to the continued expansion in the gross and net rev- enues of a majority of the operating and holding companies and to active programs for extending the commercial and domestic usage of their products, but to certain large consolidation projects that have been undertaken, especially in Eastern sections of the United States. These consolidations have brought outstanding operating companies under new and aggressive controls. Along with this has been a succession of new stock issues and valu- able “rights” to shareholders. Rail Shares Still Deflated. Undoubtedly there will be other proj- ects of similar character to stimulate interest in public utility stocks. These are today selling on a basis of prices to earnings higher than that of any other actfe group and twice as high as railroad stocks. Therefore it can no longer be said that public utility shares are market-wise, where they may be indiscriminately purchased or where banks to which they are offered as collateral in loans are willing to continue lending continually on such collateral. Houses that ve been most friendly to public utilities for a Xonf time are beginnine to take the fim tion that they, like the industrials, ave run their course, and that the safe policy to pursue is to reduce commit- ments in this group and enlarge those in railroad stocks. The argument is that the rails are still deflated in price, compared with either industrials or public utilities, and represent a comparatively small total in the aggregate of collateral loans. Therefore they are preferred by the banks. Their position as to earnings is most satisfactory. Although a closer study of the United States Supreme Court decision in the St. Louis and O'Fallon case leads to considerable con- fusion and doubt as to the merit of this opinion in clearing up the valua- tion situation, it undoubtedly has put the public into a moré generous frame of mind toward railroad securities. The difficulty in developing a sustained speculative interest in “rails” is thav there is no mystery about them, nor is there likely to be until conditions again favor promotion of consolidations that were nipped in the bud by the Inter- state Commerce Commission last year. Market Technically Stronger. Technically, the market has been strengthened by the purging of last month, which reduced values approxi- mately $3,000,000,000 and cleared out a fren many weak. accounts, amon which were those of several of the mos! militant bulls of the 1928 market. It also has been assisted by a stabilization in money rates. For nearly three weeks there has been freedom from wide dally fluctuations in call loan quotations. The daily rate latterly has been 7 per cent, compared with 6 per cent from May 23 to June 3. The borrower is not so much dis- turbed by a moderately high rate for money as by a rate that moves rapidly up and down and gives him no clue one day as to what he may have to Rfiy the day following. There may be igher rates next week and in the latter part of the month. The present indi- cations are that Wall Street’s money trials are coming to an end in so far as rapid dally shifting of rates is con- cerned, and that a fairly uniform quo- tation, but still a high average for the season, will obtain between the first of July and the middle of September. It is equally important to the bond market, as to the market for stocks, that a uniform rate for money be established and if the Summer provides stabilized money rates this should be beneficial to a division of securities that has suffered at the expense of specula- tive stocks. This week’'s Treasury issue of nine months’ certificates of indebted- ness at a rate of 514 per cent probably represents the peak of the borrowing cost to the Government since Treasury bills were placed at 3!s per cent in No- vember, 1927. It is rather interesting to remember that the Treasury has frequently fixed its rate low in a risin; money market and high in a market that was on the eve of a decline. Discount Rate Rise Unlikely. Suggestions have come recently that the Federal Reserve Board proposed to ease credit through the purcl of bankers' acceptances. There is so much friction between the board and district officials that it is difficult to obtain a satisfactory idea of what is going on behind the scenes of the most intense controversy and the deepest internal disturbance since the Federal Reserve system was established. There is ob- viously less occasion today for raising the rediscount rate than there was a few weeks ago. Unless Wall Street returns to its old habits and tries to regain pos- scssion of the funds released by the May liquidation, such an advance i8 not likely to be proposed. For the first time this year loans of those other than banks are showing a contraction, having decreased $108,- 000,000 in 'the past two weeks. This compares with a decliné in such loans after the May break in stocks of $52,- 000,000, but with a reduction of $156,- 000,000 when the corporations drew out their funds for year-end require- cluded in the Detroit Aircraft 0)?0- ration are: Ryan Aircraft Corporation, Aircraft Development Corporation, Winton Aviation Engine Co. (partly owned only), and Blackburn Aeroplane Eastman Aircraft Cor- | qul the expansion program of Fourth National, and gives the Rome ban! gnter scope and resources in - Tr“‘q“.m’ for the financial re- ements of numerous national con- cerns, inclug several cotton k | ments in December and placed temporary burden on the banks. Sentiment has been hel; this week by the ralley in the prices of 3 July wheat i8 12 cents a bushel higher Week’s Financial Highlights | Special Disvatch to The Star. NEW YORK, June 8, 1929. Stocks (average of 50 issues).. Bonds (average of 40 issues) Foreign bonds (average of 10 issues) Federal Reserve ratio... Money rates in New York Call . Time Unfilled steel orders. Pig fron production. . Building permits: Number of cities. . Amount Commercial Number Liabilities Revenue car loadin All commodities. . Coal and coke Forest produets......... Miscellaneous products. . Ore ..... Live stock . 390 cees . $538,446,781 failures (R. G. Dun & Co. reports): 5 . . 2,021 ‘Week of May 25, 1029. Previous . 1,061 .41 ‘This Week. Last Week. mgh. Low. High. Low. . 24348 23885 23867 233.18| This Week. Last Week. | . 8677 86.71 | 10492 10436 | ‘This Weeék. Last Week. Year Ago. | 4.5 68.7 | This week. Last week. | 6 to7 6 . 8% t08: 8% to9 Monthof Monthof | April, 1928. Mar,, 1929. 4,410,718 3,872,133 | 106,183 | 119,822 Month of A‘)r\L 1929. . 4427763 . 122,087 i 582 590 $407,365,423 $347,949,526 1,818 $37,985,145 k. Year ago. K 1,987 $35,269,702 836,355,601 2i 5 26,150 'CAPITAL TRACTION'S DIVIDEND ACTION IS EAGERLY AWAITED Liberal poli;; of Directors Recalled as Time Approaches fo bursement—Fare Situation Reviewed. BY I. A. FLEMING. Directors of the Capital Traction Co. will probably meet within a few days for the consideration of the July divi- dend rate and other matters of vital importance. For some time the annual distribu- tion has been upon the basis of 7 per cent per annum, a rate that the courts permit titilities to earn upon their phys- ical valuation. It is admitted that the company has not been earning its divi- dend, but the directors have pursued a Hbt‘rulrolicy for the advantage of the shareholders, even going so far as to anticipate the passage of the merger measure through Congress and per- haps higher fares, to which they be- lieve they are entitled. Rate Petition. In days of YO" this corporation was one of the big money makers and is one of the leading public utilities of the city today. That was prior to the entry of the automobile into competi- tion with the passenger carriers to the rteut reduction of the income of the atter. ‘The people of Washington seemed to favor a merger of the street car sys- tems, the House passed the measure, but it died with the Seventy-first Con~ gress. Capital Traction officials, in conjunc- tion with those of the Washington Rail- way & Electric Co., not long ago filed a petition with the Utilitles Commis- sion asking for higher rates, but with- drew it on request, pending action on merger. It is within the probabilities that re- newal of this request will be asked in the near future. The court has sus- tained the physical valuation of the company’s property around $26,000,000, while the Utllity Commission’s experts have placed $18,000,000 as the correct valuation. The company has not asked aate based on 7 per cent of its own valua. tion, but would be satisfied if given that percentage on the lesser basis, ;:rl’l;h it feels is nothing more than In the prosperous days before q“e’ Utllities Commission and the aul competition Capital Traction shares were quoted much higher than their present value. It is recalled that as high as $152 a share was paid by some officials for their holdings. Some of this stock is still held by men who paid that price for it and also in strong boxes of the heirs of many of the city’s leading citizens. May Cut Dividend. No one can tell just what the di- rectors will do regarding the dividend for the second quarter of the year and there is equally uncertainty regarding action of the Utility Commission when presented with a plea for higher fares Changes in the personnel of the com- mission make their position in the matter more uncertain and in the end an appeal to the courts may be taken. A million dollars remains in the ury of the company, cash surplus, aside from surplus in trackage and equip- ment, and it is Just possible that the board may decide it best to continue on the 7 per cent basis, in the interest of many shareholders who may suffer from a cut in their incomes. One and perhaps two .per cent have been estimated by brokers as the prob- able extent of the cut in the event of the board finally deciding to take this drastic action. May Win Out. Granting of the petition for higher rates of fare would be favorable for Traction shareholders and some day— some day when the automobile pas- senger traffic is barred from downtown parking—it, may win back its lost patronage. On the local market Traction shares have declined from their one-time high to 9213, the low for this century, and closed on Friday at 941, It is recalnd that at one time, not 80 many years ago, the vehicle for the unification of all local utilities was at hand and killed off by Senator La Follette A serious decline in Traction shares was sustained in the years when the ‘Washington Utllities Co. was being or- other grain prices recovering relatively. Artificial stimulants have béen admin- | istered in the form of proposed govern- ment purchases of surplus wheat. This does not correct the fundamentally un- | sound conditions caused by over pro- duction. That the outlook in the wheat growing sections has taken the edge off the general business situation is evident from the caution with which large manufacturers of agricultural imple- ments and automobiles and national distributors of merchandise, have been proceeding since it was first realized a month ago that the purchasing power of the farmer this year would be materi- ally reduced. Events in Foreign Field. Outside of the United States there have been two events this week that have a close relation to American busi- ness and financial aff: One was the settlement of the reparations terms with the acceptance by Germany and the al- lies of the so-called Young plan, The other was the overthrowing of the Con- servative party in England and the suc- cess of Labor. The debt settlement has had the im- mediate effect of stimulating industry in Continental Europe, which will be later on reflected in an enlarged demand for American goods and raw materials. It has led to a reduction in rates of in- terest in Germany and in an advance here in German dollar bonds of from 3 to 8 points. This advance represents an appreciation in a week's time of ap- proximately $100,000,000 in German se- curity held by Americans and ought to be of satisfaction to those who sug- ested the slight concession made by United States to the debtor nations which was the entering wedge in the o Pl ey erence to ! pe financially. than it was at the end of May, with and r Regular July Dis- ganized, when direct bear pressure was exerted on Capital Traction in order to bring the price nearer the going value of the Washington Railway & Electric that a merger might be the more easily accomplished. In some quarters it is held that the traction company would be in a much better position to sustain its position in an application for permission to in- | crease fares if its dividend rate was on | a lower basis. Should Help Utilities. ‘The recent decision of the United States Supreme Court overruling the Interstate Commerce Commission in declding that physical valuations of carriers should be based on replacement cost at the time of computing value, should be of value also to utilities. Indeed, that view has been held effec- tive for some time. The Spurt in Gas. Just why Washington Gas shares should spurt from around 110 to 112 to 124 bid, 125 asked on sales of a few odd lots is more or less of a mystery. Apparently the buyers were indifferent as to the price they paid for the small lots. It was stated earlier in the year that the bu of some 40.000 shares of the 130,000 shares capital stock and who was given representation on the directory of the company, might, if he desired, acquire the holdings of all officials of the company and others at 125 a share. Some large holders of the stock will not be a party to a sale at the price quoted. If is within the possibilities that the parties back of the purchase of 40,000 shares, probably some big outside cor- pgnuon. have decided to accept this offer. It is expected that there will be a large attendance of past presidents of the District of Columbia Bankers' As- sociation at the regular weekly luncheon of the lunch group Wednesday when gold insignia will be presented to former heads of the association. An enforced absence of some of the | leading bank men will be made neces- sary by iliness. Messrs. C. C. Glover, Charles J. Bell and B. F. Saul, all are confined to their homes, a matter of deep regret to the younger men who are in office at this time. It is hoped that this gathering will revive the interest of some of the former officials in the association, a much to be desired consideration, and perhaps | induce them to attend the annual con- vention now but 10 days away. There is sure to be a large represen- tation of bankers and their friends at the Montauk Point gathering and the “best” of times is expected, and this goes for the entertainment to be offered also. The luncheon ‘will probably be the last before the convention, the close of which will inaugurate the administra- tion of Willmar J. Waller and close that of R. V. Fleming. The latter has made a most efficient executive and has presided at the weekly gatherings with satisfying ability. The Second Convention. ‘The second annual convention of the association was held on the 8. 8. Mid- land of the Norfolk & Washington line. Thursday morning the bankers and their guests found themselves anchored at Yorktown, Va. A visit to the little |town and historic points occupied part of the day, the program was carried out and just before 3 o'clock the boat sailed to Norfolk. That evening the bankers of Norfolk entertained in royal fashion at a coun- try club north of the city—a most un- expected and beautiful spur-of-the- moment affair. Programs were carried out mornings jand part of the afternoons while the | steamer sailed around in the bay snd the roads. The guests visited the great shipbuilding works at Newport News, danced and were otherwise entertained | evenings and arrived home safely Mon- | day morning. It was voted a most successful affair, 'WHEAT PRICES GAIN ON BUYING MOVE By the Associated Pres CHICAGO, June 8.—Wheat ranged upward in price today from start to finish, but top quotations were not . maintained, uncertainty prevailing about | the Government crop report this after- noon. Dry weather complaints from Canada, Argentina and Australia, espe- cially Canada, were largely responsible for price advances. On the other hand, the Government crop report due from Washington after the close of business here was expected to indicdte a mate- rially larger domestic yield of wheat th;s season than was predicted a month a Wheat closed firm, 12 to 11 net higher; corn, 1Y, to 13 advanced, and provisions, unchanged to a rise of 12. B e o 11 112% 113% 119 117 Luly ptember . TOBACCO HOLDINGS COMPANY. NEW_ YORK, June 8 (#).—United Stores Corporation, which is to be the holding company for a merger of to- co companies and chain atores, in- cluding United Cigar Stores, was in- corporated in Delaware. papers set forth the purpose of the corporation to deal in tobacco and drugs and to operate farms, planta- tions and laboratories PR , | for stocks showed a decline from the TRUST BUSINESS - GROWS IN SOUTH Atlanta Conference Told of| Many Obstacles Hurting i Rapid Development. | | Discussions at the recent Second ! Southern Trust Conference, held at| Atlanta, again served to give emphasis | to what is the greatest problem or ob- | stacle to the development of trust busi- ness in the South. Most of the States below the Mason and Dixon line are stil operating under taxing laws which have not been changed in over 40 years. Property is taxed under general pro- perty tax laws, with personal property | paying the same tax as real estate. The same lack of modernization applies in most of the States to investment of trust funds, with some States arbi- ' trarily restrictive and others providing | little or no statutory or judical guidance | for trust investiments The consequence, | says Trust Companies Magazine, is that | intangible personal property is subjected | to such heavy burdens as to discourange the creation of trust estates and, in many instances, forcing millions of wealth to other jurisdictions. Legislative Action Sought. Fortunately,the Southern Trust Con-: ferences have brought about a general recognition of this problem, and at the recent sessions in Atlanta a committee was appointed to investigate the subject and submit recommendations for legis- lative redress. In several States bills have already been presented providing for constitutional amendments and the adoption of up-to-date tax laws similar to those enacted in Kentucky and where the result has been a very marked in- crease in trust estates. Freedom from onerous taxation of estates and intangible personal prop- erty is bound to give a big stimulus to trust business in the South. Wealth has increased by leaps and bounds in that section of the country, as {llumin- atingly described by Gov. Black of the Federal Reserve Bank of Atlanta in his opening address at the recent confer- ence. "The need for trust protection and conservation is clearly indicated by cross-section statistics showing that in | North Carolina, for example, that 74 people with estates out of every 100 who die do not leave wills and that 95 per cent of those who do make wills do not name banks or trust companies as executors. Richmond District Trusts. ‘There are some fine old trust com- panies in the 8outh which have demon- strated that, despite handicaps, the ap- plication of dprupm' principles, quality of service and equipment will yield suc- cessful trust department results. The fact remains that there are too man: trust compenies in the South whic do not live up to their titles and fail to give to trust department operations the attention and acknowledgment of responsibility * which such service de- mands. It would appear from the attendance and the proceedings at the Atlanta conference, the magazine concludes, that national banks are going ahead with perhaps even more enthusiasm than many of the trust companies. In the comparatively few years that na- tional banks in the South have ac- tively assumed trust functions they have already built up quite a volume of trust business, the Federal Reserve reports showing 192 national banks in the Richmond Federal Reserve district | reporting $140,000,000 individual trusts assets, and 144 national banks in the | Alll':m district showing $111,000,000 ets. ————e ES INPROVED BY FARM AIDPLAN Approach of Congressional Action on Pending Proposal \ Helps Grain Market. By the Associated Press An approach Congress toward the effective formulation of Federal | policy for agricultural rellef was by far the most important Washington action of the week touching general commercial conditions. House and Senate negotiations toward eliminating differences over the pending proposals operated to stimulate prices on grain exchanges for all the cereal crops, and was reflected in allied flelds. Pederal Reserve Bank credit policies came up for revived discussion, but no steps we'r:' taken toward modifying rediscount rates, ‘Wholesale Prices Drop. Federal price index calculations re- leased during the week indicated that current wholesale prices had dropped to unusually low levels, approaching a new record for post-war periods, but the phenomenon was not assoclated with any showing of business depres- sion. Railroad traffic, classed as one of the more important indicators of trend, was reported by the American Railway Association to be running in a volume very considerably above nor- mal for the season. “The volume of money turnover for the week ended June 1. as indicated by check payments, was lower than the preceding week, but showed a sub- stantial fi"" over the same period of 1928, the Commerce Department's weekly review of the business situation at home and abroad said. “Steel plant activity was likewise lower than in the previous week, but operations were 20 per cent more ac- tive than a year ago. The output of crude petroleum for thé latest reported week showed a considerable gain over both the preceding week and the cor- | responding week a year earlier. ‘The production of bituminous coal showed gains over both prior periods. The primary distribution of goods, as re- flected by loading of freight cars covering the latest reported week, was substantially higher than a year ago. “ “The general indeéx of wholesale prices receded from both the preceding week and the same period of last year. Iron and steel prices showed a frac- tional decline from the previous week, but were higher than a year ago. Cot- ton prices and prices for wheat aver- aged lower than in either period. Loans and discounts of the Federal Reserve member banks showed practically no change from the previous week, but were higher than a year ago. Interest Rates Lower. “Interest rates on call loans averaged lower than in the previous week and showed no change from a year ago. Time money rates were easier than in the preceding week, but were higher than a year ago. Bond prices were lower than in either period. Prices previous week, but were 20 per cent higher than a year ago. Business fail- ures were less numerous than in the lnnvtoua weeks, but showed a gain over as! t_year. “Receipts of wheat, cotton, cattle and hogs during the week ended May 25 were lower than a year ago.” In- Canada, the Review said that “manufact is reported to be less i ! Banker Diplomat HARRY L. SELBY, Manager of the Farmers & Mechanics Branch of the Riggs National Bank, is chairman of the hotel committee for the local bankers’ conclave at Montauk Point June 20 to 24. pon his shoul- ders rests the responsibility of pleas- ing 250 or more guests with perfect hotel accommodations. The job requires | much diplomacy. BUSINESS REMAINS | AT HGH LEVELS Reserve Board Reports on; Conditions Now Prevailing ). in 12 Districts. | Industrial activity continued at a| high level in April, and the volume ol: factory employment and pay rolls in-| creased further. Loans and invest-| ments of member banks in leading cities | just reported to the Federal Reserve | Board here continued to show a further | decline between the middle of April and | the middle of May, and were at thnb" time at approximately the same level as a year ago. Industrial activity increased in Aprll; to the highest level on record. The iron | and steel and automobile industries con- tinued exceptionally active during April. | Activity in copper refining, lumber, cement, silk and wool textiles, and the | meat packing industry increased, and production of cotton textiles showed a | less than seasonal reduction. Employ- ment and pay rolls increased, contrary | to the seasonal trend. Output of mines was also larger in April. Copper, tin and anthracite coal | production increased, and the seasonal | decline in output of bituminous coal | was smaller than usual. Petroleum | production declined slightly. | Preliminary reports for the first half of May indicate a continued high rate of operations in the iron and steel in- | dustry. Output of lumber and bitumious | coal was somewhat larger during the | ‘Rm:upart of May than at the end of pril. May Building Contracts Lower. Building contracts awarded during the month of April increased sharply, and for the first time in five months | approximated the total for the corre- | sponding month in the preceding year. | The increase was not continued, how- i ever, in the first part of May, when awards averaged 20 per cent below the same period in Mag-, 1928. During | April most classes of building showed | seasonal increases over March, the | largest being in contracts for residential building and public works and utilities. Shipments of commodities by rail in- | creased during April, and were the largest for this month in any recent ! car. The increase from March re- ted larger loadings of miscellaneous freight, . 'live stock and ore. During the first half of May shipments of freight continued to increase. Sales at wholesale declined seasonally in April, except in the case of grocery and hardware firms. In comparison with April, 1928, all lines of trade re- | porting to the Federal Reserve system | showed increases. Department store | sales were also smaller in April than in March, but continued above the level of a year ago. Prices in Slight Decline. ‘Wholesale commodity prices averaged slightly lower in April than in March, according to the index of the United States Bureau of Labor Statistics, re- flecting primarily declines in prices of farm products and their manufactures. Prices of min and forest products and their manufactures, on the average, showed little change. There were in- creases in the prices of iron and steel. | and sharp declines in copper, lead and tin. Seasonal declines occurred in prices of coal and coke, while gasoline prices advanced. Prices of farm products and their manufactures averaged lower in April than in March. Prices of grain, es- pecially wheat, moved downward more sharply, and wool and cotton continued | to decline. Live stock and meat prices continued the upward movement of the previous month, but at a slower rate. Hides averaged siightly higher in price, and leather somewhat lower. Among imported raw materials, rubber, sugar and coffee showed marked price reces- | sions. Early in May cattle hides and wheat prices declined sharply, and the price of rubber increased. Heavy Decrease in Loans. During the four weeks ending May 15 loans and investments of member banks in leading citles showed a de- crease of nearly $200,000,000, largely in loans on securities, together with some further decline in investments. All other loans, chiefly tor commercial and agricultural purposes, remained un- changed at a relatively high level There was a further reduction in tfw average volume of Reserve bank credit outstanding between the weeks ending April 24 and May 22, owing largely to additions to the country's monetary stock of gold. The decline was in dis- counts for member banks: holdings of acceptances and of United States secu- rities showed practically no change. Open market rates for commercial pa- per remained unchanged, #s did rates on prime bankers' acceptances, except for a temporary decline at the end of April and the first week in May. In the first three weeks of May rates on col- lateral loans averaged considerably higher than in April. SAVINGS DEPOSIT GAIN IN BALTIMORE BANKS At the close of business on April 30, 1929, 12 mutual savings banks in Bal- timore had aggregate deposits totaling $189,950,148, compared with $188.299,306 on deposit at the end of March this year and $183,096,168 at the end of April a ear ago. The April 30, 1929, total was thy ighest on record, but showed only 3. per cent increase over the figure a year ago. In contrast to the increase in deposits in mutual savings banks time deposits in reporting commercial banks declined from $249,679,000 on May 16, active in the Toronto district as a re- sult of ckening in automobile pro- duction,” while in Mexico it was re- marked that the general business tone was somewhat improved. . ufl'fi"‘in’fl". has a population of 1928, to $329.393,000 on May 16, 1929, decrease of $10,286,000, but it is probable that much of this sum was either in- vested in securities by the withdrawing depositors or loaned at attractive in- terest rates to others for stock and |in 1 | | AVIATION INDUSTRY AT MERGER STACE Pioneer and Mushroom Periods Are Succeeded by Reorganization Era. 1 | BY JOHN F. SINCLAIR. ;sp!c:ll Dispatch to The Star. | NEW YORK, June 8—Every new |industry goes through certain definite | cycles. First, the hard, early period. | When faith is large and business is ! small—the heroic pioneer day. After that the mushroom growth period when | beople, attracted to the new industry, {Sweep into it with their ti nd money | —far more than is needed. Then the |drop and the inevitable reorganization, | the nightmare for the little investor, Aviation has gone through two of these periods already. For five years | after the close of the great war aviation | was in the doldrums. Nearly every | airplane company of importance suf- fered large losses. Many of the leaders in war “aviation withdrew from the field and entered other lines of business, Lindbergh Flight. Thep came the Lindbergh fight, centering the attention of the entire world on aviation, the development of the air mail and the amazing wide- spread interest of the younger people in_ flying. With this has come the mushroom growth. Hundreds of companies have started. Flying schools are being es- tablished over night—many of them incompeten managed and poorly in- Death schools” they are often called. The bad ones will be weeded out, as will the mushroom companies. But only after many lives and much money has been lost. Aviation has now entered the third period—that of reorganization. The more prosperous small companies are being merged into larger and larger cnes until today there are but four or five outstanding companies in the whole airplane field. Thess are all amply financed and their future seems well established. No American has had any ater influence on the dc\'elopmenc’of“:\'la- tion into its present form than Clement M. Keys, the Canadian-born American banker, who has been called the “E. H. Harriman of aviation.” After graduating from Toronto Uni- versity, this bespectacled, quiet spoken youth was undecided about what he should do in life. He had been a good student and a good athlete, so he spent the next three years teaching history and foot ball at Ridley Cofiege, St. Catherine’s, Ontarlo. That was in the closing years of the last century. Took Up Newspaper Work. But he tired of this—was ambitious for greater things, and the year 1901 found him a reporter on the Wall Street Journal. Five years later, he was rail- road editor. This was his big chance to study finance and transportation. He took full advantage of his opportunity. But he was restless. He quit journal- ism and became an editor—financial editor of World's Work. When Walter Hines Page, upon his retiring to be- come American Ambassador to Great Britain, asked young Keys to become his successor as editor of World’s Work Mr. Keys thought it over and replied: “A great job, I admit. I would be up at the top, as far as I could go, but it is not far enough. I have been study- ing finance for years. It is my special- :y; I guess I will stick to it. I'm resign- LR So Mr. Keys left writing behind, and founded C. M. Keys & Co., bankers. He. specialized in transportation stocks and bonds. He developed friendships among many big business men and bankers. He was doing fine. His com- pany grew. Then the war! Mr. Keys saw immedi- ately that airplanes would be needed badly by the governments of the allles. Few people were in the business. Meets Glenn Curtiss. Glenn Curtiss, well known inventor, had been building airplanes for the allies. He met Mr. Keys as a financial consultant, was impressed, and Mr. Keys joined hands with Mr. Curtiss in what was to be his most important move in life. He became vice president of the Curtiss Aeroplane & Motor Cor- poration, without salary. Together Curtiss and Keys made the Curtiss Co. the biggest thing in the industry. They produced 5,000 airplanes during the war. They were prosperous. And the world had be- come air-minded, they thought. Then the post-war smash. People forgot the war; they forgot about flying. Things looked black. Aviation seemed to be down and out, along with every- thing else. But Keys kept up his cour- age. He saw what was in store a few years hence. So, without saying much, he bought the Curtiss organization for a song (around $4 a share). He acquired it from the Willys-Overland Co., whios at that time was having its own prob~ lems in_automobile manufacture. Mr. Keys began reorganizing and re- building the company. That was in August, 1920. Today that stock is almost forty times as valuable as when he_purchased it. But it was hard sledding for years It sounds easy now, but it was anything but that. After he got the company going and properly financed, Mr. Keys organized the National Air Transport, primarily to take the air mall contracts be- tween New York, Chicago and Dall Today that company is making money. Other lines were started: other mergers were effected. until today there are 17,000 miles of aerial highways being | operated for air mail and 3,000 to be added this year. Business Has Expanded. His airplane business has expanded beyond his wildest dreams. He has entered other lines. With others he took over the control of the National City Bank of Miami, Fla, in 1927. He is chairman of the board of the Curtiss Aeroplane Corporation, presi- dent of the Glenn H. Curtiss proper- ties, director of the National Cash Register Co., in addition to being di- rector and chairman of the executive committee of the National Air Trans- port, Inc Mr. Keys, a quiet, extremely modest man, moves around the country freely, a hard worker, with his business s> well organized, he spends much of his time outside of his office. He is a good listener, says very little himself in conversation, never brags or talks about his own achievements. But his eyes and ears are always wide open. ‘This airplane leader is known among his own group as a man who looks for the best talent in each fleld, and buys it on liberal terms. When he organ- jzed the National Air Transport, he offered Col. Lindbergh the job of tech- nical adviser. Col. Lindbergh went over the plans carefully with this for- mer mhoof teacher, saw what the future had in store in aircraft development, and accepted the position. “Nat" is today the largest airplane holding come pany in the United States. Mr. Keys' pet is the Curtiss Flying Service. As a former school teacher, he sees the value of a thorough ground'ng for all air ‘gikxu. Three factors coums tribute to the elimination of airplare accidents: (1) first-class planes, (&) first-class pilots, (3) first-class weather. The first two of these elements can always be under control. first two under control, even without first-class weather, the danger from airplane accidents is nominal. Mr. Keyes has spent much time in the development of the Curtiss Flying Service. When that job is done, the Curtiss Co. will have “service” branches 25 of the principal cities of the bond transactions, the Reserve Bank of Richmond repo: United_States. « (Copyright, 1929. by North American News- | paper Alliance.)