Evening Star Newspaper, January 27, 1931, Page 12

'A—1Z = CHILE VINEYARDS SEEK EXPORT MARK Plan Largest Shipments of | Wine in History During Current Year. By ti:= Associated Press. SBANTIAGO, Chile—Chilean wine growers plan to make 1931 the great- est export year in history, and to place their vint>ges in the very cellars of the great wine countries, France, Germany and Spain. To help them the government will pay groewers the equivalent of about 4 cents for every quart of wine exported. Last year Chile sent more than 105.- 000,000 gallons of wine to the markets of the world. Most of it was made from grapes grown on vines pianted by Ger- mans and other Europeans in South Chile many years ag>. Mixed With Local Wine. Just why other viine-producing coun. tries should buy Chilean wine is hard to explain. It is largely due, however, to the fact that only barreled “corriente,” or new wine is exported in quantity, anc this, being of uniform flavor and color, is mixed with lccal wines of the country to_“stabilize” them. Bottled wine is sold only quantities abroad, due to heavy tariffs and large freight The “reservado” types of agsd wines are exported only in small lots because of the danger of transformation when the wines goes throcugh the tropics. The “corriente” wine is not affected by transport. Cost 40 to 90 Cents. Wines in Chile are recognized as equal to most European wines of similar age. A red wine of “reservado” classi fication may be purchased by the con- sumer at from 40 to 90 cents a large bottle. Wine of the previous year's vintage sells often at 30 cents or cheaper, de- pending on where the purchase was made. Some brands of new wine, rep- utable and good, sell for as low as 10 cents a large bottle. Champagne is being produced on & small scale, but so far doss not rank with that from France. in small | the heat or | BY CHARLES F. SPEARE. Special Dispatch to The Star. NEW YORK, January 27.—The im- mediate effect of the recommendation of the Interstate Commerce Commis- sion. for a repeal of the so-called “re- capturs clause” is not expected to be important, and therefore it has not had any great influence on réilroad shares. It is regarded, however, as an impor- tant step in removing obstacles in the way of the carriers in respect to earn- ings on their property investment. A feature of the opinion just handed down is the comment made by Com- missioner Joseph B. Eastman on the | present difficulties surrounding the | transportation industry. Recapture Provision. The transportation act of 1920 pro- vided that net railway operating in- come that was in excess of 6 per cent on the value of the property in any year should be utilized by placing one-half of such excess in a reserve fund to be maintained by the individual railroads earning the excess and the remaining one-half in a general railroad contin- | gent fund. The amount now in the fund is $12.- 697.958. The suggestion has been made that this should be returned to the roads that have earned it. There has never been any use made of the fund for the benefit of roads that were ex- |pected to be helped by it in an emergency. Commissioner Eastman, in his report, | discusses conditions that have worried | railroad executives for years, and no | more so than in the past 12 months. | He reviews the several important rate changes effected since 1920, including | the large horizontal increase ordered six | months after the transportation act | took effect in order to provide for the fair return described in the act, and the subsequent 10 per cent reduction in 1922, when business was recovering and it was felt that the carriers no longer needetl the emergency rate established two years previous. From 1922 until the Fall of 1929, he pointed out, the earnings and credit of the railroads in almost all sections of REPEAL OF RECAPTURE CLAUSE WOULD AID RAILROADS OF U. S. I. C. C. Has Taken Step to Remove Legal Provision Affecting Earnings of Nation' THE EVENING s Carriers. the country steadily gained ground, so that the commission did not feel war- |ranted in initiating or approving any | further horizontal increas: in rates, The present disturbance, he indicated, was much more severe than had been forecast in 1929, so that today “aggre- gate net railway operating income |is far below the level contemplated by section 15a." Under such circumstances and in or- der to carry out the intent of the trans- portation act—which permits of earn- ings of 53, per cent on property in- vestment, whereas at present it is at the b>st 4 per cent in some districts and about half that in others—it would have been logical for the railroads to have asked for an increase in rates which would have brought their earn- ings up to the prescribed ratio to prop- erty investment. Mr. Eastman pointed out that no such steps have been taken by the carriers, which, obviously, have realized that a sharp increase in rates “would probably expose industrial con- ditions to another severe shock and re- tard recovery, leaving the railroads no better and perhaps worse off than they were before.” Reasons for Repeal. The main reasons suggested by the commission for repeal of the “recapture | | clause” are the difficulty of using the | | excess funds after they are recaptured in_ways that would be beneficial to | public interest, the enormous ‘expense | |and time involved in the process of “recapture” and the menace of exten- sive and prolonged litigation involved | in “recapture.” The history of this case dates back lm March, 1923, when the Interstate | Commerce Commission issued an order requiring all raflroads to report by May |1 1923, as to their earnings during the | previous year and to pay over to the | Government, under the transportation act, one-half of the amount by which such earnings exceeded a 6 per cent re- turn on the value of the investment. Subsequently, the case has been through many of the lower courts,-and in May, 1929, the United States Supreme Court held that the methods of the commis- | $61,200,000 STAR, WASHINGTON e slon for ascertaining the value of the rallroads for ‘were improper. (Copyright. 1931.) COMPETITION STRESS| rate-making purposes I C. C. Report on Recapture Clause Reviews Effect of Law. Supplementing its considerations cited in its annual report in support of its recommendations that recapture provi- sion be repealed, the latest expression of the Interstate Commerce Commis- sion points out that, in addition, it may be said, even in theory, that the need for recapture is not so impressive as perhaps it appeared when the plan was first formulated. “The rallroads have never been able, since 1920, to obtain the aggregate earnings contemplated by section 15A, and they are faced with continually increasing competition from other forms of transportation. More- over, differences in earnings between in- dividual carriers seem likely to be ma- terially lessened by the gradual prog- ress of unification, and our power over divisions of joint affords 2 means of adjusting earnings to some extent as between strong and weak lines. “Furthermore,” the report continued, “certain railroads which have an envi- able reputation for financial strength owe this strength to the fact that they are undercapitalized in comparison with the values of their properties and, vice versa, certain railroads which are weak financially owe their weakness to over- capitalization. Because of this situation there are many strong railroads which are in little or no danger of recapture, whereas it threatens certain various railroads which are weak.” ‘The communication pointed out that elimination of recapture is favored for similar reasons in statements to Senate Committee on the Howell bill submitted by National Association of Rallway and Utllities Commissioners and National Industrial Traffic League. Find Difference of Opinion. The Association of Railway Execu- tives in its communication to the com- mittee pointed out that there was a wide difference of opinion as to whether rates are in reality made on any rate base regardless of the question of whether or not such rate base correctly expresses value. Executives' brief said that many of property or rate bases are the product of commercial and eco- nomic conditions. The commission expression _agreed with Nationa] Association of Railway and_Utilities Commissioners’ view that if the valuation law is continued un- changed, particularly as to recapture, and complied with, it will require a large valuation force constantly em- ployed. Report stated commission has mno Missouri Pacific Railroad Company FIRST AND REFUNDING MORTGAGE 5% GOLD BONDS, SERIES I Dated February 1, 1931 Due Interest payable February 1 and August I in New York City February 1, 1981 Redeemable, at the Company’s option, as a whole or in part, upon 90 days’ notice, on August 1, 1936, or on any interest payment date thereafter until and including August 1, 1975, at 105% and accrued interest, and thereafter at 100% and accrued snterest, Coupon Bonds in demomination of $1,000, registerable as to principal. Registered Bonds in demomimations of 51,000, 35,000, $10,000 and $100,000. Coupomw amd registered Bomds and the several demominations of registered Bonds interchangeable, The issue and sale of these Bonds are subject to authorization by the Interstate Commerce Commission GUARANTY TRUST COMPANY OF NEW YORK, CORPORATE TRUSTEE L. W. Baldwin, Esq., President of the Missouri Pacific Railroad Company, has furnished ys with the follow- ing statement concerning the Company and this issue of Bonds: PROPERTY trackage rights over other railroads, The main lines of the Company, together with those of subsi PURPOSE OF ISSUE The Missouri Pacific Railroad Company operates more tham 7,450 miles of road, of which approximately 6,524 miles represent fee mileage, 355 miles are lines operated umder comtract and 511 miles are leased lines amd aries directly or indirectly conmtrolled, extend from the St. Louis gateway westward to a commection with the lines of the 50% ownmed Demver and Rio Gramde Western Railroad Company, southwest to the Mexican border, and south to New Orleans and other Gulf ports. These Bonds are being issued to provide for the retirement of $42,874,000 principal amount of St. Louis, Irom d. Mountain and Southern Railway Company Gemeral Comsolidated Ras and Land Gramt Mortgage 5% B maturing April 1, 1931, for the making of additions, betterments and improvements to the Company’s property and for other corporate purposes. SECURITY . Upon the satisfaction of the Irom Mountain Comsolidated Mortgage, wow comstituting a first liew om 1,538 owmed miles, the First and Refunding Mortzage Bonds will he secured by a first liew om 5,229 miles of owned railroad. D. G, }unnuon in saying tht “if, in bring- ing valueations up to date, we must con- tinually redetermine and reappraise on the basis of current conditions (as is necessary in considering present repro- duction costs) and reweigh all of the elements of value * * * which have been specified in the decisions of the court or are set forth in section 19A of TUESDAY, the interstate commerce act, the process of valuation will always be far in ar- rears and we shall never have more than a rough estimate of aggregate value ready for current use in the ad- ministration of section 15A." Accounting Method. Howell bill which will make it possible to build up an aggregate rate base from the original valuations by some - | counting process will meet the practi- cal necessities of section 15A, assum- ing that the formula for the determi- nation of the general rate level which that section provides is otherwise capa- ble of practicable application, the com- mission pointed out. e communication, after reviewing the commission’s interpretation in_ the past of the future of section 15A, which seeks to give railroads a return of at least 53, per cent upon their transpor- tation property. said that under the formula of that section carriers could take steps to bring about a substantial increase in rates. No such steps have been taken, however, it was said. “The result would probably be to expose in- dustrial conditions to another severe shock and retard recovery, leaving the railroads no better and perhaps worse off than they were before,” commission continued. Based upon its experience in observing the results of such hori- zontal rate adjustments in the past, commission concluded that “apparently this has been the view of the carriers, S| for they have not undertaken to in- itiate increases in rates nor have they jasked us to exercise our authority in | this direction.” Eton Whippings Attacked. Abolition of “swipings” with the birch at Eton, the famous boys' school in England, is being advocated. This form of punishment, administered by the | headmaster, was abolished by Canon since has been revived. Parents alway: know when their son has been birched, for their bills show a charge of 60 cents for the birch used. Another form of Etonian punishment which is under fire | is_the beatings by members of “Pop.” which consists of senior boys, for breaches of school etiquette. These beatings are severe at times. THE EIGHT ;8 JANUARY A plan such as is provided under the Lyttleton when he held that office, but | alone 27, 1991, USE OF FERTILIZERS MAY SHOW DECLINE Decrease in First Quarter Is Indi- cated by Freight Car Requirements. BY J. C. ROYLE. Use of fertilizers on the farms of the | United States is expected to drop be- tween 7.5 and 8 per cent in the first quarter of 1931. That fact is made ap- parent by the freight car requirements which the industry has submitted to the railroads through the 13 regional shippers’ advisory boards. This would seem to promise no relief from the pres- sure under which the fertilizer and chemical industries have been laboring and shows clearly the position of the | farmers. In 1930 the fertilizer industry | earncd less than 4 per cent on its in- | vestment, according to Charles J. | Brand, executive secretary of the Na- | tional 'Fertilizer Association, today. If the drop in probable fertilizer sales to farmers had been caused by cur- tailment in plantings, the situation would have been far less serious. But the drop in proposed plantings has been less than the probable fall in fertilizer use. As a result, farmers may make less money from larger acreage than they have in other years. Not only is the fertilizer industry in | an unsatisfactory position, but the pro- ducers of raw materials for fertilizer are also affected. The main raw ma- terials of fertilizers are the nitrogen carriers. Nitrogen production all over the world is down. In Germany 40 per cent of the nitrogen produced had to be stored during the last year, as there was no market for it. In addi- tion the drop in German fertilizer prices would be equivalent to 8,000,000 reich | marks on the volume of sales made in 1930. Germany has huge works produc- | ing nitrogen and operates them on a | most economical basis. | The Chilean nitrate industry has becn in such a condition that it has been necessary to combine the various nterests, including the American, British and Chilean companies under the auspices of the Chilean government. The future of Muscle Shoals as a nitrogen producer is now up before Congress, but chemists hete can see no particular help for the farmer, no mat ter whether private individuals or cor- porations or the Government operates Buick oels ights priced fi say that while the the project. Loy fixation at Muscle ‘They nit doubtful if the plant could compete with foreign or other domestic pro- ducers. ‘The Department of lture said today that it had specially urged fruit growers to increase the amount of fer- tilizer used this Spring. Reports from varjous districts make it probable that the amount used by potato growers will be at or near normal. (Copyright, 1931.) CUT-RATE PATRONAGE Managers in Nice Organize League for Protection as Hard Seasons Near. | RIVIERA (N.AN.A).—There has been more_than one bloodless revolution on the Riviera this season, and the last has concerned the proprietors of lux- ury hotels and restaurants more deeply than even the present rivalry between cocktalls and sherry. Restaurateurs and casino managers are beginning to take a firm stand | against the something-for-nothing bri- gade. They are tired of the ple who exact big prices for their fashionable patronage and especlally determined not to succumb to newcomers among them who count on a hard season to force the hotels and casinos to give them cut rates and other special advantages as a return for the publicity afforded by their presence. ese people generally demand board and lodging in the best hotels at below cost price and free en- trance to the casinos. In Nice the managers of these con- cerns have organized a league for their | protection, for they have decided that | to offer cut rates is injurious to trade, as well as harmful to their self-respect, so | blacklist of customers whe levy toll of |them in this way, and thé will refuse {level. (Copyright, 1931, by Nor#h riean News- Daver Alliance? i New highways opened in the United States last year had a total mileage of 952, while those constructed in Canada covered 8,083 miles. s IS FOUGHT BY HOTELS | in future they are going to keep a | (to reduce their prices bel®% a certain | HOLDING UP WELL Shipping Tonnage Makes Extra- Good Showing, Considering Business Situation. Special Dispatch to The Star. SAN FRANCISCO, January 27.- Forelgn trade and shipping trafc in and out of San Francisco Harbor was little affected by the depression in | meneral business during 1930, according to the mid-January business review i(7!’ the Wells FPargo Bank & Union Trust Co. “Shipping tonnage entering and clearing the harbor during the year," the report states, “totaled 38,365,505 tons, a decrease of only 2 per cent | from the record high figure of 1929, but 6.6 per cent heavier than in 1928 Inltli 14 per cent heavier than in 1927 Customs collections on imports in 1930, totaling $13,057,370, showed a slight gain (0.15 per cent) over 1929. and were 2 per cent larger than 1928 | and 5 per cent larger than in 1927." | Sharp improvement in_the building and real estate business in San Fran- | cisco during December over recent low levels was reported by that industry. Building permits Increased 75 per cent over November and 42 per cent over the previous December, to a total value of $2,292,388. Permits issued during the entire year totaled $22.726,994, or a decrease of 30 per cent from 1929. Commenting further on this industry, e Wells Fargo Bank & Union Trust Co. states “Real estate sales, totaling $6.105,771 in December, were reported; this was 16 per cent more than in November and 20 per cent more than a vear ago The total for the year of $84,675630 was 12 per cent below 1929 and the | smallest since 1921.” r. Tax on Van Stores Wanted. Merchants of Coleraine, Ireland, war t |a tax on peddlers and on merchants who sell goods in the country by stores mounted on vans. The merchants who stay at home say their business is dwindling and that the market day is & thing of the past. They want a “traveling shop” law similar to that of the Irish Pree State. Here’s what America thinks of BUICK Out of every 100 sales of BUILDS IT m $1000 0 $2000 14 other manufacturers share the mmm‘m‘rg WEST COAST TRADE | | On 1,209 additienal ‘miles of owned railroad they will have a direct lien subject to the prior liens of less tham $S1000.000 of bonds outstanding in the kands of the public. Of the prior lien bonés, all are secured by mortgages closed by the First and Re- Sunding Mortgage and 531,548,000 principal amount mature in the year 1933. The aggregate amount of First and Refunding Mortgage Bonds and of prior lien bomds outstanding in the hands cf the public upon completion of this financing and the retire ment of the Iron Mountain Consolidated Mortgage Bonds will be at the rate «f less than $43,000 per mile of ownmed railroad. The Bonds are also secured by a first lien on all the bonds and capital stock of the Missouri Pacific Railroad Corpo in Nebraska, owning 345 miles of railroad operated by the Company under contract, and om $23,703,000 par value of Th and Pacific Railway Company 5% preferred stock. EARNINGS Below are shown, for the five years emded December 31, 1930, the Company’s gross operating revemues, i come available for fixed charges, fixed charges exclusive of interest charges ow bomds jumior to the First and Refunding Mortgage Bowds, total fixed charges, and met income. ex Fixed Charges other tham Interest om jumior bomds 513,334,525 14,333,189 13,883,568 14,095,220 14,488 414 Total Fixed Charges $15,323,405 16,322,069 15,872,448 17,783,627 19,028,884 Income Available for Fixed Charges 23,955,072 20,723,265 25,385,138 Net Income 5 8,631,667 4,401,196 Ended 31 Gross Operating Revenues $133,990,.294 125,728,405 131,576,525 139507914 30,001,390 120,187,689 25,742,495 In the five years covered by the ‘above table, earnings of the Company available for fived charges averaged more tham 1% times all fived charges other than inierest charges ow bonds jumior to the First and Refunding Mortgage Bonds, and in 1930 also amounted to over 1% times such charges. Total fixed charges were covered on the average about 1Y times in the five year period and more thaw 13 times in the year 1930. EQUITY The Company (together with its wholly owned Nebraska subsidiary) has a wet investment in road and equipment, after deducting reserves for deprecitaion of equipment, in excess of 532,000,000 and investments in affiliated companies of more than 551,000,000, a total of $613,000,000. This compares with $411,519,100 total funded debt and equipment trust obligations to be outstanding giving effect to this financing and the retirement of the Irom Mountain Comsolidated Morigage Bonds. Of this total debt 595,653,500 represent bomds junior to the First and Refunding Mortgage Bonds. The Company's balance sheet of December 31, 1930, shows outstanding $71800,100 par value 5% Cumulative Preferred Stock (om which unpaid accumulated dividends amount to $48.25 a share) and $82339,500 par value Commow Stock. The indicated market value, based on current quotations, of the bonds and stock of the Company jumior to the First and Refunding Mortgage Bonds is over $153,000,000. Dividends of S% per annum are currently being paid on the preferred stock. L] THE ABOI'E BONDS ARE OFFERED FOR SUBSCRIPTION, SUBJECT TO THE CONDITIONS STATED BELOW, AT 95% AND ACCRUED INTEREST, TO YIELD OVER-525% TO MATURITY Years December 192 1927 1928 1929 1930 Percentages compiled from official registration figures swpplied by R. L. Polk & Co. 12,217,763 6,713,611 Such unmistakable and nationwide preference can have as its foundation only one reason: OUTSTANDING VALUE Effective January 1, every Buick built—including Buick’s Series 50, priced from $1025 to $1095, f. o. b. Flint, Mich.—has the famous Syncro-Mesh Silent-Shift Transmission and Torque Tube Drive. A GENERAL MOTORS VALUE Stanley H. Horner Buick Motor Co. Emerson & Orme | 1015-17 14th St. 1 4 th “ L 17th & M Sts. N.W. Bury Motor Co. p Rushe Motor Co. Anacostia, D. C. "Washington, D. C. Hyattsville, Md, WHEN BETTER AUTOMOBILES ARE BUILT ... BUICK L} Subscription books will be opened at the office of J.-P. Morgan & Co., at 10 o'clock A.M., Tuesday, January 27, 1931, and will be closed in their discretion.” The right.is reserved to rejeck any and all applications, and also, in any case, to award a smaller amount than applied for. All subscriptions.will be received subject to the due au- thorization, issue and sale of the Bonds as planned, and to approggl by counsel of the form and wvalidity of the re- lated documents and proceedings. The amounts due on allotments will be payable at the ofice of J. P. Morgan & Co., in New York funds to their order, and the date of payment (on or about February 17, 1931) will be stated sn the notices of allotment. Temporary Bonds or Interim Receipts, exchangeable for definitive Bonds when yeceived, are to be delivered. 2% J. P. MORGAN & CO. KUHN, LOEB & CO. GUARANTY COMPANY OF NEW YORK FIRST NATIONAL BANK, New York THE NATIONAL CITY COMPANY CHASE SECURITIES, CORPORATION BANKERS COMPANY OF NEW YORK New York, January 27, 1931. Lodge Motor Co. Purcellville, Va. Fred N. Windridge Rmmy-. ILL BUILD THEN o